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March 19, 2009
You can run but you can’t hide!
The Hon’ble High Court at Mumbai (“Court”) has,
in a one-of-its-kind order1
passed on March 12, 2009, directed the Chief Metropolitan
Magistrate, Mumbai, to issue a letter of request to a
court/authority in Australia, to investigate the question as to
which officers of Clough Engineering Ltd. (“Appellant”)
were responsible for the sale of certain machinery (“Machinery”)
in respect of which, an injunction was allegedly subsisting. In
doing so, the Court has ensured that in this day and age of
globalization, no act of contempt of court is permitted to be
left uninvestigated, simply because the alleged contemnor is not
identified or is not within the jurisdiction of the courts in
India.
Brief facts:
Oil & Natural Gas Corporation (“ONGC”) filed a
contempt petition alleging that the Appellant, which had its
office in Australia, had disposed of certain Machinery in
Australia, in spite of there being a valid and subsisting
injunction and therefore, the said act of sale constituted
contempt of court.
Whilst hearing the contempt petition, the Learned Single Judge
noted that if the Machinery had been disposed of or sold by the
officers of the Appellant in Australia, then the Appellant would
be liable for contempt for the acts done by its officers in
Australia as the prohibitory orders passed by the court were
binding against the Appellant and its officers. As the names of
the officers of the Appellant were known only to the Appellant,
the Learned Single Judge passed directions calling upon the
Appellant to disclose the names of the concerned officers
responsible for the sale of the Machinery, so that the Learned
Single Judge could consider whether to proceed against the said
officers of the Appellant.
Aggrieved by the said directions, the Appellant approached the
Court.
Judgment:
At the outset, the Court held2
that it did have ample power to decide and follow procedure as
deemed fit by it in contempt proceedings. However, the Court
further held that the directions passed by the Learned Single
Judge in contempt proceedings, which were quasi-criminal in
nature, may lead to self-incrimination of the Appellant, which
in turn was against Article 20(3)3
of the Constitution of India. The Court, therefore, proceeded to
quash the said directions.
However, given the peculiar facts and circumstances of this
case, the Court, ensuring that it did not remain a mere silent
spectator, proceeded to issue directions to the Chief
Metropolitan Magistrate, Mumbai, by invoking the provisions of
Section 166-A4
of the Code of Criminal Procedure, 1973, which deals with a
situation where evidence in respect of a crime or offence is
available outside India. The Court directed the Chief
Metropolitan Magistrate, Mumbai, to issue a letter of request to
the competent court/authority in Australia to investigate the
issue as to who are the officers of the Appellant who were
responsible for the disposal of the Machinery. Upon receipt of
the said information from the competent court/authority in
Australia, it was directed that the same be transmitted to the
Learned Single Judge, to enable him to take further steps in the
matter.
Analysis & Implication:
The advent of international trade and globalization has resulted
in the entry of multinational companies into India, which
companies enter into a large number of contracts locally. When
such contracts go sour, for whatever reason, and the officers of
such companies who are located outside India breach the orders
of the Indian courts, it is necessary to ensure that Indian
courts have the power to find out who these persons are and to
ensure that they are brought to task for breaching any order of
an Indian court. In the instant case, the Court noted that this
was a case where the information in respect of the act which
allegedly constituted contempt of court was outside India and
the said information was required to punish the contemnors and
therefore, invoked the provisions of Section 166-A of the Code
of Criminal Procedure, 1973.
By this judgment, the Court has stated that it will not remain a
mere mute spectator and/or helpless in such matters. The Court
has further showed that in matters of contempt, which are of a
quasi-criminal nature, the Court shall not hesitate in providing
and following procedure as deemed fit by it, using its inherent
powers, given the peculiar facts and circumstances of each
matter, to meet the logical end.
_____________________________
1. Passed
in Appeal No. 264 of 2008 in Contempt Petition No. 96 of 2007 in
Arbitration Petition No. 349 of 2007.
2. Relying upon Zahira Habibullah Sheikh & Anr.
Vs. State of Gujarat & Ors. – (2006) 3 SCC 374.
3. Article 20(3): No person accused of any
offence shall be compelled to be a witness against himself.
4. 166A. Letter of request to competent
authority for investigation in a country or place outside India.
(1) Notwithstanding anything
contained in this Code, if, in the Course of an investigation
into an offence, an application is made by the investigating
officer or any officer superior in rank to the investigating
officer that evidence may be available in a country or place
outside India, any Criminal Court may issue letter of request to
a court or an authority in that country or place competent to
deal with such request to examine orally any person supposed to
be acquainted with the facts and Circumstances of the case and
to record his statement made in the course of such examination
and also to require such person or any other person to produce
any document or thing which may be in his possession pertaining
to the case and to forward all the evidence so taken or
collected or the authenticated copies thereof or the thing so
collected to the court issuing such letter.
(2) The letter of request shall be transmitted in such manner as
the Central Government may specify in this behalf.
(3) Every statement recorded or document or thing received under
sub-section (1) shall be deemed to be the evidence collected
during the course of investigation under this Chapter.
1. Ins. by Act 10 of 1990, sec. 2 (w.e.f. 19-2-1990).
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Sahil Kanuga
&
Vyapak Desai
You can direct your queries or comments to the authors
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