In a significant judgment, the Supreme Court clarified that the jurisdiction for contempt is not limited to violations of explicit judicial orders but also extends to acts intended to obstruct court proceedings or circumvent the ultimate judgment.
“The contempt jurisdiction of the court is broader than direct disobedience of specific judicial orders or prohibitions. Even in the absence of explicit mandates, deliberate actions by parties designed to frustrate court proceedings or evade its eventual decision can amount to contempt. Such conduct undermines the judicial process, weakens its authority, and hinders its ability to deliver justice effectively. The respect for court authority must encompass not only compliance with the literal orders but also adherence to the broader spirit of the proceedings,” the Court observed.
“Thus, any actions aimed at frustrating court proceedings or bypassing its decisions, even without an explicit prohibitory order, constitute contempt. Such behavior interferes with justice administration, disrespects judicial authority, and threatens the rule of law,” the Court held.
A bench of Justice J.B. Pardiwala and Justice Manoj Misra ruled that a borrower transferring property to a third party while proceedings were pending before the Supreme Court amounted to contempt of court.
The judgment arose from a contempt petition filed by Celir LLP, the auction purchaser of the property. In a judgment dated September 21 in Celir LLP v. Bafna Motors (Mumbai), the Supreme Court had set aside a High Court judgment permitting the borrower to redeem the mortgage. The Court directed the bank to issue a sale certificate to the auction purchaser. However, during the pendency of these proceedings, the borrower transferred the property to a third party.
The borrower later filed a contempt petition, alleging non-compliance by the respondents in handing over possession of the property and annulling the release deed executed in favor of the borrower.
An argument raised in defense was that the property transfer occurred before the Court’s judgment, and thus no contempt had been committed. However, the Court noted attempts by the borrower and the subsequent transferee to obstruct the implementation of the judgment. Rejecting this argument, the Court observed:
“Any contumacious conduct aimed at bypassing or nullifying a court’s decision, rendering it ineffective, frustrating proceedings, or securing undue advantages, constitutes contempt. Efforts to sidestep the court’s jurisdiction, manipulate litigation, or undermine judicial decisions amount to contempt, even in the absence of explicit prohibitory orders.”
Despite these observations, the Court refrained from holding the parties guilty of contempt, instead granting them an opportunity to comply with the judgment. The Court declared the property transfer invalid and issued consequential orders.
Senior Advocates Mukul Rohatgi and Neeraj Kishan Kaul represented the petitioners; Senior Advocate Dr. A.M. Singhvi represented the borrower; Senior Advocate Kapil Sibal appeared for the subsequent transferee; and Senior Advocate Raju Ramachandran represented the bank.
Additionally, the Court observed in its judgment: Though Section 52 of the Transfer of Property Act does not render a transfer during pendency (pendente lite) void, the Court can invalidate such sales while exercising its contempt powers.
Case: Celir LLP v. Ms. Sumati Prasad Bafna and Others
