COURT ON ITS OWN MOTION VS MANAGER, ORIENTAL BANK OF COMMERCE
1999 P T D 509
[225 I T R 463]
[Himachal Pradesh High Court (India)]
Before M. Srinivasan, C.J. and Ms. Kamlesh Sharma, J
COURT ON ITS OWN MOTION
Versus
MANAGER, ORIENTAL BANK OF COMMERCE
Contempt Petition (Crl.) No. 5 of 1996, decided on 04/09/1996.
Income-tax---
----Deposit---Restriction on mode of repayment---Order of Court directing Bank to make part payment of sum awarded in motor accident claim case-- Bank manager refusing to make payment otherwise than by Bank draft or cheque---No specific direction in Court order for payment in cash---Bank Manager acting bona fide on basis of S.269-T of Income Tax Act---No question of contempt of Court---Indian Income Tax Act, 1961, 5.269-T-- Indian Contempt of Courts Act, 1971, S.2.
In a motor accident claim case, the High Court passed an order directing the Bank to release a sum of Rs.25,000 out of the total awarded amount in favour of the respondent therein, through his counsel. The Court also directed that the remaining amount was to be put in the fixed deposit for a further period of 25 months. As the final deposit was with the respondent Bank, counsel appearing in the claim case went with her client to the Bank and produced a copy of the order and memo issued by the Court. The respondent, who was the Manager of the Bank, refused to release the amount and asked counsel either to accept a pay order in her name to be deposited in her account or in the alternative to open a fresh account in her name in the Bank in which the amount to be released would be deposited. Counsel made a report to the Court by her letter, dated April 8, 1996, addressed to the Registrar of the Court. On the basis of the letter, the Court initiated contempt proceedings for punishing the Manager of the Bank under the Contempt of Court Act, 1971. The respondent in his affidavit tendered an unconditional apology and also stated that the amount in question being in excess of Rs.20,000, he was bound by the provisions of section 269-T of the Income Tax Act, 1961, to make payment only in two modes : either by account payee cheque or account payee bank draft/pay order or by opening an account and depositing the money in that account. He also placed reliance on a circular issued by the Reserve Bank of India insisting upon compliance with the terms of section 269-T of the Income Tax Act:
Held, that if the Court has specified the mode of payment in cash, the respondent could not refuse to make such payment. In the absence of such a specific direction of the Court, it was not wrong on the part of the respondent to have relied upon the Circular of the Reserve Bank of India and section 269-T of the Income Tax Act. In any event, there was no question of wilful disobedience of the order of the Court on the part of the respondent. There was, therefore, no civil contempt within the meaning of clause (b) of section 2 of the Contempt of Courts Act, 1971. Clause (c) of section 2 of that Act would not also apply, as the respondent could not be said to be guilty of contempt by tending to lower the authority of the Court. There was also no question of obstructing or tending to obstruct the administration of justice in any other manner. The respondent had acted bona fide on the basis of section 269-T and the circulars issued by the Reserve Bank of India. Moreover, he had tendered an unqualified apology. He was entitled to be discharged.
G.D. Verma, B.P. Sharma, Rajiv Sharma and Shrawan Dogra for Petitioner.
R.L. Sood for Respondent No. 1
Indar Singh, A.G. for Respondent No.2
JUDGMENT
M. SRINIVASAN, C.J.---This proceeding is initiated by the Court on its own motion under the provisions of the Contempt of Courts Act, 1971, and under Article 215 of the Constitution of India. This Court passed an order of Civil Miscellaneous Petitions. Nos. 262 of 1995, and 726 of 1995, in First Appeal Order. No 164 of 1995, on March 4, 1996, directing the release of a sum of Rs.25,000 out of the total awarded amount in favour of the respondent therein, by name, Shambhu Dutt through his counsel. The Court also directed that the remaining amount will be put-in a fixed deposit for a further period of 25 months. As the fixed deposit was with Oriental Bank of Commerce, Shimla, the counsel, who was appearing in that matter alongwith her client Sh. Shambhu. Dutt, went to the bank on March 29, 1996, and produced a copy of the order and memo issued by this Court. The respondent, who was the manager of the bank, refused to release the amount and asked the counsel either to accept a pay order in her name to be deposited in her account or in the alternative to open a fresh account in her name in the bank in which the amount to be released would be deposited. Counsel made a report to this Court by her letter, dated April 8, 1996, addressed to the Registrar of this Court. On the basis of the said letter, this Court initiated contempt proceedings for punishing the manager of the bank under the Contempt of Courts Act, 1971.
In the first instance, this was initiated as a civil contempt and later, by order, dated May 30, 1996, the Court converted it into criminal contempt proceedings and directed the parties to file further affidavits, if they so desire and also directed them to produce the witnesses.
The respondent has filed two affidavits in reply. In the first affidavit, dated May 8, 1996, the respondent has rendered an unqualified apology and also stated, that as per the facts reported to this Court he had not committed any contempt. The respondent has placed reliance upon the provisions of section 269-T, sub-clauses (2-A) and (2-B) and proviso thereto of the Income Tax Act. According to the respondent, the amount being in excess of Rs.20,000 he was bound by the provisions of the said section to make payment only in two modes either by account payee cheque or account payee bank draft/cash order or by opening an account and depositing in that account. He has also placed reliance on a circular issued by the Reserve Bank on India insisting upon the compliance with the terms of section 269-T of the Income-tax Act. After the matter was converted into criminal contempt proceedings, a further affidavit was filed by the respondent dated June 21, 1996. In that affidavit, it is stated by the respondent that the modes of payment suggested by him to the Advocate was not any refusal to obey the order of the Court and he was bound by law to make payment only in the said modes.
Learned counsel for the respondent has repeated the contentions set out in the affidavits and submitted that there is no wilful disobedience on the part of his client and that his client is not guilty of any contempt within the meaning of section 2(c) of the Contempt of Courts Act.
In so far as civil contempt is concerned, section 2(b) defines it as wilful disobedience of any judgment, decree, direction, order, writ or other process of a Court or wilful breach of an undertaking given to a Court. In this case, the order of the Court, dated March 4, 1996, does not specify the mode in which the amount of Rs.25,000 should be released to the party by the bank. When the respondent contends that such release could be only in accordance with the provisions of the .law, it cannot be said that the respondent is guilty of wilful disobedience of the order of this Court. If the Court had specified the mode of payment as to be in cash, certainly the respondent could not have placed reliance either on section 269-T or on the circular issued by the Reserve Bank of India.
Learned counsel, Mr. Shrawan Dogra, has contended that the interpretation placed on section 269-T by the respondent is not correct. According to him, the section would apply only in cases where the depositor seeks to get refund or repayment of the amount of deposited by him. It is submitted by him that the deposit in this case was pursuant to the order of this Court in a. motor accident claim by way of compensation and part of that amount was directed to be paid to the person concerned by the order of this Court. According to learned counsel, in such cases, section 269-T can also not apply. Even so, it is only a matter of interpretation of section 269-T. It is not necessary for us in this case to give our interpretation to section 269-T of the Income Tax Act. The respondent has been controlled by the circular of the Reserve Bank of India and in such circumstances of the case he was of the opinion that as per the circular, he could not make the payment in cash.
As already pointed out, if the Court has specified the mode of payment in cash, the respondent could not refuse to make such payment. In the absence of such a specific direction of the Court, it was not wrong on the part of the respondent to have relied upon the circular of the Reserve Bank of India and section 269-T of the Income Tax Act. In any event, there is no question of wilful disobedience of the order of the Court on the part of the respondent.
According to clause (c) of section 2 of the Contempt of Courts Act, 1972, criminal contempt is defined as any publication (whether by words, broken or written, or by signs, or by visible representations, or otherwise) of any matter or the doing of any other Act whatsoever which scandalises or tends to scandalise, or lowers or tends to lower the authority of any Court or prejudices, or interferes or tends to interfere with, the due course of any judicial proceedings or interferes or tends to interfere with or obstructs or tends to obstruct, the administration of justice in any other manner.
Straightaway, we may point out that clause (c)(ii) of section 2 will not apply in this case as it is only in the case of any judicial proceedings being interfered with, if at all, the respondent could be brought under sub clause (i) or (iii) of clause (c) of section 2. It cannot be said that the respondent is guilty of contempt by tending to lower the authority of the Court. When the Court had not specifically directed the mode of payment, the respondent was well within his limit to gay that the payment could only be made in accordance with section 269-T. So also clause (c)(iii) will not apply in this case. There is no question of obstructing or tending to obstruct the administration of justice in any other manner. In any event, as pointed out by us, the respondent has acted bona fide on the basis of section 269-T and the circular issued by the Reserve Bank of India.
Consequently, we are of the opinion that the respondent is not guilty of any contempt. In any event, the respondent has tendered an unqualified apology, even though he has not made the payment as directed by the Court. The apology tendered by him is accepted. We record the apology and discharge the respondent from these proceedings.
We are thankful to learned counsel, Mr. G.D. Verma, President Bar Association, Mr. B.P. Sharma, Mr. Rajiv Sharma and Mr. Shrawan Dogra, who were requested by this Court to assist for their valuable assistance. We appreciate the assistance rendered by them in the matter to decide these proceedings in accordance with law.
M.B.A./1731/FCOrder accordingly.