1993 PLP 489 (CLC)

(h) Civil Procedure Code (V of 1908)‑‑‑ ‑‑‑‑OXXXIX, R.2(3)‑‑‑Disobedience of Court's order ‑‑‑Remedy‑‑‑Intervenor having sought protection of Court with regard to securities within its possession sold the same in contravention of the order of Court‑‑‑Goods constituting securities having already been sold Court directed officials of intervenor to deposit sale proceeds, thereof, in the Court within specified days. Sajid Zahid for. Plaintiff. Mansoorul Arfin for Defendants Nos.l, 5, 7 to 12, 14 and

15. I.A. Hashmi for Defendants Nos.2 and

4. Raja H. Nawaz for Defendants Nos3 and

6. Khalid Anwar for Defendant No.13. Muhammad Ali Saeed for the alleged Contemnors. A.I. Chundrigar for the N.B.P. This is a suit for recovery of Rs.393,945,601.41, against the defendant No.l, a public limited company, defendants Nos.2 to 9 as its directors/guarantors and defendants Nos.10 to 15, apparently, subsidiaries of the defendant No.l. Alongwith the suit, inter alia, C.MA. 1850/1985 under Order 39, rules 1, 2 and 7 read with section 151, C.P.C. was filed, seeking interim orders of injunction against the defendant No.l and/or any person acting through or on its behalf from removing, selling or dealing with its properties namely, factory situated in the Landhi Industrial Area, Karachi, together with structures, installations, machinery, fittings and fixtures and goods, stocks and other articles lying in such factory, as the plaintiff claimed a lien by way of first charge as mortgage thereof and the defendant was, allegedly, about to dispose of and/or remove the same. The application came up in chambers before a learned Judge of the Court on 30‑5‑1985 and notice was ordered to the defendant No.l for 3‑6‑1985. Meanwhile, the defendants were "restrained from removing or selling or in any manner creating any charge or liability on the property" mentioned in the application. On 3‑6‑1985, the defendant No.l, putting in appearance through Mr. Mansoorul Arfin, the case was adjourned to 12‑6‑1992 on which date Nazir of the Court and Mr. Jalaluddin Baloch, Advocate, were appointed to prepare inventories. After the summer vacations, upon reopening of the Court, on 13‑8‑1985, the National Bank of Pakistan (NBP), as Intervenors, filed CMA 2277/1985, an application under Order 38, Rule 8 read with section 151, C.P.C. praying that the Court be pleased to "release from attachment" the pledged goods/stocks/spares and stores in the 6 godowns situated on the premises of the factory above referred, and, such being under lock and key of the intervenors, permit the intervenors to take delivery of the same. Notice of CMA 2277/1985 was ordered to the plaintiff as well as the defendants on 15‑8‑1985. On 21‑10‑1985 when CMA 2277/1985 alongwith other applications came up for examination it was ordered that a representative of the N.B.P., may make a visit to the premises for the purpose of making enquiries about the goods which according to N.B.P. were hypothecated in their favour by the defendant No.l and to find out whether any such goods were under lock and key. Subsequently, on 31‑10‑1985, CMA 3736/1985 under section 151 read with Order 39, Rules 4 and 6 was jointly filed by the plaintiff and the defendant No.l. In the application last mentioned, upon reciting the orders of CMA 1850/1985 and re‑capitulating that on 12‑6‑1985 the Nazir of Court and Mr. Jalaluddin Baloch were appointed as Commissioners for preparation of inventories and that their report with an inventory and photographs had been submitted, it was brought out that substantial amounts were payable to the factory labour on account of non‑payment of which a law and order situation had developed. Prayer was, therefore, made that the plaintiff‑bank may sell the factory together with machinery, fittings, fixtures, stocks and goods at a price to be mutually agreed between the plaintiff and the defendant (No.l), which would not be less than Rs.150,000,000 (One hundred and fifty million), the sale proceeds to be credited in the account of the defendant No.l with the plaintiff. and out of the same labour dues of Rs.2,45,00,000 to be cleared, the plaintiff furnishing a bank guarantee for the balance amount of the sale proceeds. and such remaining operative till the decision of the suit. Due orders were sought. On 3‑11‑1985, a joint statement was submitted by the plaintiff and the N.B.P., as intervenors, to the effect that the intervenors had "no objection to the contents of CMA 3736/1985" except that the stocks and goods claimed by the intervenors to be under their lock and key, by way of pledge as in CMA 2277/1985, should not be sold "pending disposal" of the CMA last mentioned but such was to be without prejudice to the rights of the intervenors "to file appropriate proceedings", if necessary, against the defendant No.l, its guarantors and others. Nazir of the Court was stipulated to accompany the representatives of the intervenors and the plaintiff to prepare an inventory of the stocks and goods claimed by the intervenors. CMA 3736/1985 alongwith the joint statement of the plaintiff and the intervenors was taken up for consideration on 3‑11‑1985 when that CMA was "granted as prayed subject to the terms of the joint statement filed by the learned counsel for the plaintiff and the intervenors". It was further observed that the order dated 3‑11‑1985 "modifies the interim order dated 30‑5‑1984 (sic) granting temporary injunction in favour of the plaintiff. Subsequently, it would seem, per decision of the Executive Board of the intervenor‑bank in its meeting held on June 3, 1986 the goods, which in terms of the joint statement were not to be sold by the plaintiff‑bank, were decided to be sold by the intervenor‑Bank. This gave rise to CMA 241/1988, filed by the plaintiff‑bank under Order 39 Rule 2(3) and section 151, C.P.C. for punitive action. Later the intervenor‑bank filed CMA 3234 of 1986 for withdrawal of its earlier CMA 2277/1985. On 25‑5‑1989 CMAs. 241/1988 and 3234/1986 were put up for hearing. CMA 3234/1986 was opposed by the plaintiff‑Bank on the ground that the intervenors had committed contempt in selling the goods and stocks which were the subject‑matter of CMA 2277/1985 and, therefore, its withdrawal should not be permitted. By an order of that date a learned Judge of the Court permitted the withdrawal of CMA 2277/1985, observing that if contempt was committed such would not be wiped off merely upon withdrawal of CMA 2277/1985. At the same time, it was found that since the goods under reference were in fact sold by the intervenor, prima facie, in the view of the learned Judge, breach appeared to have been committed by the officials, whose names having been disclosed via. Abdul Jabbar, Mehar A. Barlas, Amjad Ali and Humayoun Akhtar Adil, notices were ordered to them, similar notices having earlier been ordered on CMA 241/1988 to the National Bank and its principal officers and attorneys Akbar Ali Barolia and Syed Ziauddin. CMA 4284/1990 was filed by the plaintiff on 16‑9‑1990 for the cross‑examination of the aforesaid Akbar Ali Barolia and Syed Ziauddin. At about the same time, another application under Order 39, Rule 2(3) read with Order 39, rule 5 and section 151, C.P.C. CMA 4378/1990, was preferred by the plaintiff for taking punitive action against M. Jamil Shaikh, Secretary and Senior Executive Vice‑President of the National Bank and M. Anwar Ali Ilyas, Executive Vice‑President of the same bank having allegedly been instrumental in selling the above‑referred stocks and goods. It is these applications namely, CMAs 241/1988, 4284/1990 and 4378/1990 which have come up for disposal before me. Counter‑affidavits and affidavits in rejoinder have been submitted. On the record, I also find the unconditional apologies of M/s. Amjad Ali, Mehr A.Barlas and Abdul Jabbar Khan. In the counter‑affidavits, which have been submitted by the alleged contemnors, who participated in the meeting dated 3‑6‑1986, a statement, more or less, to the following effect has been incorporated:‑‑ "As stated above, the meeting of the Executive Board on 3‑6‑1986 dealt with the matter of sale but I attended the meeting as it is usually my duty to do so. I had no knowledge of any injunction order which would be binding on NBP and might have been made prior to 3‑6‑1986 and that it was still operative on that date. In any case having seen certain papers now, I would say that NBP or myself did not violate any order of this Hon'ble Court." While Mr. A.I. Chundrigar, appearing for the NBP, has maintained that the stocks and goods above referred have only been removed from the site and not sold, as alleged by the plaintiff‑Bank, there appears to be sufficient material on the record which virtually makes it an admitted position that, as a fact, the sale complained of did take place and the sale proceeds obtained total Rs.29.5 million. However, all the alleged contemners have urged that whatever transpired was not in negation of the Court orders and, in any case, in doing of the acts, complained of they neither had any intention to nor, in fact, violated any orders binding on them. As to knowledge, apart from the state of the record dilated upon above, Mr. Sajid Zahid for the plaintiff has brought to my notice a letter dated 10‑3‑1986, written by the plaintiff‑Bank to Akber Ali, as a manager of the NBP, wherein it was clearly brought out that any action involving removal of the aforesaid goods and stocks would be in contravention of the Court orders. Neither the receipt of nor knowledge of such letter seems to have been denied. In contempt proceedings, for an order of Court to take effect and bind those concerned it is not necessary that formal service thereof should be proved; due knowledge of orders should suffice. As to accidental disregard of orders, claimed to be wanting in intention, once knowledge is shown, the very fact that the contravening act, of commission or omission, was undertaken intentionally and with volition renders the act intentional: A.N.M. Mahmood v. M.O. Ghani PLD 1967 Dacca 67 (Order deviated from on technical grounds in M.O. Ghani v. A.N.M. Mahmood PLD 1966 SC 802); Ahmad Shah v. State PLD 1967 SC

42. It has been urged, principally, by Mr. A.I. Chundrigar for the NBP that the orders in the case, such as they may have been, were neither directed against the NBP nor its officers, none of whom were parties in the suit. It is urged that Order 39, rule 2 (1) (2), C.P.C. is confined to parties and sub‑rule (3) in the Order and rule, envisaging penal action, does not extend to disregard of orders passed in terms of Order 39, rule 1, which alone may extend to non parties. Reliance is placed on the observations of Corneliue ACJ, then in the High Court, in Hayat Ahmad Khan v. Bashir Sadiq, PLD 1952 Lahore 48, declaring that rule 2 (3) in Order 39, C.P.C. was limited to transgression of orders under Order 39, rule 2 and if orders passed under rule 1 of Order 39, C.P.C. were violated punishment in the way of Order 39, rule 2 (3) could not be visited even in virtue of section 151, C.P.C. With utmost respect I am unable to subscribe to this view without reservations. It is undoubtedly true that the clause envisaging punishment is postulated only in rule 2 (3) of Order 39, C.P.C. and carries an impression that the disobedience or breach is confined only to a temporary injunction issued under Order 39, rule 2 (1) (2) or the terms in which it is issued under the same provisions. The placement or locations of the remedy, incidental upon disobedience merely in sub‑rule (3) of rule 2 of Order 39, to my mind, can only be a drafting oversight, which in Ram Prasad Singh v. Benares Bank Ltd. AIR 1919 All. 20 (DB) had been termed as "clumsy" and in Adaikhale Thevan v. Imperial Bank AIR 1926 Madras 574 (1313), was characterised as somewhat "inartistic". Still, the opening words in Order 39, rule 2 (3) namely, "in case of disobedience or of breach of any such terms" should cover "disobedience" generally of orders falling under rules 1 and '2 of Order 39 which rules, being clubbed together, complement each other. It is inconceivable that the legislature, while envisaging punishment for non‑compliance of rule 2 (1) (2) would purposely omit to deal with disobedience of rule 1 in the same Order. Indeed the words "such terms" in the quoted phrase would amply that whereas it is "breach" of the "terms" in rule 2 (2), which is made actionable, qua "disobedience" the qualifying word "such" not occurring, the "disobedience" contemplated is under either of rules 1 and 2 in Order 39, C.P.C. The above cited two opinions in the Allahabad and Madras cases were followed by a learned Single Judge in Muhammad Naziruddin v. Raja Ram, AIR 1935 Patna 274, where Bal‑Bhaddar v. Palla, AIR 1930 Allahabad 387, a Single Judge opinion, was dissented from, having been rendered in ignorance of the referred Division Bench decision in the case of Ram Prasad Singh. In Deokishen v. Asaram, AIR 1922 Nagpur 62, the problem was resolved by interpreting the word "injury" in rule 2 of Order 39, as one which did not necessarily arise from breach of contract. The only other decision from the British Indian jurisdiction appears to be Janak Nandini v. Kedar Narain Singh, AIR 1941 Allahabad 140, where the question involved was only indirectly approached from the point of view of enforcement of an order of injunction, upon transfer of the proceedings. It may, therefore, be safely said that Order 39, Rule 2 (3) extends to "disobedience" of an order passed also under rule 1 of the same Order . Another aspect of the matter is that rules 1 and 2 in Order 39, C.P.C. are an extension of section 94 in the Code under which they have been "prescribed". Section 94 clearly, subject to Rules and Orders, postulates that in order to prevent the ends of justice from being defeated the Court, inter alia, may grant a temporary injunction "and in case of disobedience commit the person guilty thereof to the civil prison and order that his property be attached and sold". The requirement of the section, if "so prescribed", to my mind, was restricted essentially to the nature and kind of temporary injunctions, which have duly been prescribed by rules 1 and 2 of Order 39, C.P.C.. In so far as relief against disobedience is concerned, such is already provided for in specific terms by section 94 (c), C.P.C. and Order 39, Rule 2 (3) is a mere reiteration and perhaps a slight variation, the variation lying in limiting the unlimited term of imprisonment is section 94 (c) to one not exceeding .six months in Order 39 Rule 2 (3). To that extent the conditions of Order 39 being those "prescribed" as defined, should prevail. That both section 94 (c) and Order 39, Rule 2 (3) speak of a "person" and not a party makes the position clearer. The remedy is not restricted to parties. Further, while section 94 (c) talks of the property attached also being amenable to sale, rule 2 (3) of Order 39 simply confines that punishment to attachment relegating strict compliance to the domain of redundancy. This omission, however, in the face of Section 94 (c), has never been held to preclude the sale of the property so attached. In this view of this matter, disobedience of orders whether such be under rule 1 or rule 2 (1) (2) entails action under sub‑rule 2(3), Order 39 as well as under section 94 (c), C.P.C.: Vidvapurna Thirthaswami v. Vocar of Suritkal Church, (1917) F.L.W. 328; Adaikkala Thevan v. Imperial Bank, AIR 1926 Mad.

574. As regards applicability of section 151, C.P.C. to "disobedience" it has already been seen that section 94 in the Code is predicated by the expression "to prevent the ends of justice from being defeated" and if "prescribed" proceeds to enumerate reliefs such as grants of temporary injunctions, breach being made actionable. Such injunctions have been prescribed under rules 1 and 2 of Order

39. Now, when section 151 envisages exercise of inherent C powers if "necessary for the ends of justice" the implication is that powers under section 151, C.P.C. can ipso facto be invoked for such ends in case. of disobedience or breach of an interim injunction or its terms and the rule extends also to non‑parties. As to rules of procedure, it is now settled that all procedure is permissible unless found prohibited. For this reason in India, Supreme Court downwards, section 151, C.P.C. has been resorted to in order to meet transgressions: Century Flour Mills v. S. Suppiah, AIR 1975 Mad.

270. For a different view Ali Hussain v. Rafiq‑Uddin, PLD 1977 Lah. 418, has been kited. That is not a case in point. Of much greater relevance in the Supreme Court dictum in the case of Bakhtawar, 1980 SCMR 89, applying section 151, C.P.C. to require a transgressor for restoring the state of things as prevailed at the time an interim injunction was obtained. The only situation in which aid of section 151, in such like situations, may not be obtainable is when inherent powers are solicited to perpetuate or further injustice, or to condone gross negligence or, generally, to defeat the provisions of the Code of Civil Procedure: Conforce Ltd. v. Syed Ali Shah, PLD 1977 SC

599. Section 151, C.P.C. has been enacted with a view to overcome omissions and lacunas in the Code, to soften the rigours of procedural technicalities, to alleviate miseries arising from absence of adequate procedural relief and, generally, to act ex debito justitia according to equity, justice and good conscience of a cause but always in consonance with sound judicial principles: Nazar Muhammad v. Ali Akbar PLD 1989 Kar. 635; Sardaran Bibi v. Allahdino, PLD 1990 Kar. 227; Muhammad Chottey Khan v. Muhammad Munir Khan, PLD 1991 Kar.

331. The learned counsel next urged that the goods in dispute were pledged with the NBP and were found to be under lock and key of that bank at the time when inventories were taken. It has also been contended that the said goods were not even hypothecated with the plaintiff‑Bank, nor that Bank had any other enforcible right in relation thereto. Ensuing orders thus being open to serious doubt do not attract any penal provisions of law. Mr. Muhammad Ali Sayyed, who represents the alleged contemners has advanced similar please. In first place, it may straightaway be observed that the question of pledge or hypothecation of the goods in dispute and with whom, if at all, such were pledged or hypothecated, is not material to contempt proceedings. That is a question touching merits and can wait. What is material is that the goods were owned by the defendant No.l and/or its directors/guarantors and further that under the specific orders of the Court dated 30‑5‑1985, the defendants in the suit were restrained from "removing or selling or in any manner creating any charge or liability" on the same. While the order is not direct in its impact on persons "acting through" or "on behalf" of the defendant No.l the application on which the order proceeded expressly made such mention. The words "in any manner" in the order arc thus significant. The order could, therefore, plausibly apply to the NBP which, as purported pledgee, may have acted for the defendant No.1. Not irrelevant to this, the order, when varied by consent on 3‑11‑1985, continued to hold the field since the assets indicated in CMA 3736/1985 were allowed to be sold by the plaintiff except the stocks and goods claimed by the NBP to be under their lock and key and such a state of affairs was postulated to continue till the pendency of CMA 2277/1985, filed by the NBP itself, the goods being identifiable through an inventory to be prepared in seven days' time and the only other right saved being the right of the NBP to bring other "appropriate proceedings". Similar implications arise under the CMA last mentioned itself when it acknowledges that the referred goods were under "attachment" of the Court and manifestly sought a "release" thereof. It, therefore, follows that when the order dated 30‑5‑1985 was framed, employing the expression "in any manner" and proceeded on an application directed against the defendant No.l or "any person acting through or on its behalf", its meanings and implications were not lost on any body. Thus the effect of the Court orders did not involve any doubt, ambiguity or want of precision. It is only when the Court orders are uncertain, wanting in essential details, capable of bona fide misinterpretations or open to debate and argument, one way or the other, that such may not attract penalties incidental upon contempt proceedings: Qadeer Ahmad v. Punjab Labour Appellate Tribunal, PLD 1990 SC

787. Where, however, the orders are readily comprehensible and unequivocal and, above all, the persons affected thereby understand and acknowledge the same, no such exigency arises. The impact of orders on the NBP is thus obvious. Same is true of its officers, on whom the orders applied with equal force: Nasim Hassan v. Karachi Metropolitan Corpn., 1984 CLC 2$

96. It was thus observed in the order of this Court dated 25‑5‑1989 that prima facie branch appeared to have been committed. Examining the case in some detail and hearing all, concerned I am unable to‑ draw a different conclusion. All that remains to be seen is as to what action, if any, is warranted and how such may be taken. Statutory law .does not envisage any procedure for contempt proceedings. However action for contempt, being penal in nature, irrespective of its being civil or criminal contempt, usually, upon concise recital of facts and applicable law, a question or issue, resembling a charge tray be framed, providing the alleged contemner(s) an opportunity to defend. Procedure, as far as practicable has to be of a Criminal Court, when attending to similar remedies. The Court, when acting under the Code of Civil Procedure, may even proceed on affidavits, allowing cross‑examination under Order 19 thereof F but that would depend upon the circumstances of a given case: Per Cornelius, A.C.J in Hatim v. Shah Din, PLD 1952 Lah. 77; M. Akram Khan v. M. Ashraf Khan, PLD 1987 SC (AJ&K)

88. This holds good for sections 94, 151 and Order 39, rule 2(3), C.P.C. as well, but with conditionalities, for section 3 of the Contempt of Court Act. It, therefore, falls to be decided now whether due question(s) be presently framed and the case for contempt be proceeded with. The power to take action for contempt is a serious matter and is to be exercised only in serious cases. It has been said that this is a jurisdiction which has to be G jealously guarded but sparingly exercised. Its usefulness has been found to depend on the wisdom and restraint with which it is applied; Muhammad Samiullah Khan v. State, PLD 1963 SC 237; S.M. Yousuf v. S.K. Rahim, PLD 1969 SC

77. It has also been laid down that where action under Order 39, Rule 2 (3), C.P.C. would lie section 3 of the Contempt of Court Act or summary remedy under Constitutional jurisdiction may not be invoked: M.O. Ghani v. AN.M. Mahmood, PLD 1966 SC 802, Bahauddin Sirhindi v. Mayor H.M.C. 1987 MLD 2090. In matters of contempt a heavy responsibility lies on the Court to explore, except in cases of Criminal Contempt, involving obstruction to the course of justice, as distinguished from merely enforcing orders (Civil Contempt), whether there are other equally effective avenues through which adequate redress can be administered. If so, a discretion and a judicial one at that vests to opt for a less rigorous course. In the facts and circumstances of this case, I find that there is an alternative available, that of passing an order requiring the intervenor bank to restore the status quo ante, as far as such be possible. This is distinguishable from punishment for contempt. The order can be passed in anticipation of as well as in conjunction with an action for contempt. In the Supreme Court case of Bakhtawar v. Amin, 1980 SCMR 1989, Karam Elahee Chauhan, J, approved such orders, invoking the aid of sections 2 (14), 36, 38, 51 and 58 read with Order 21, rule 32, C.P.C. not to mention section 151 of the Code which was separately resorted to. Accordingly, as a first step and by way of an independent order, since the goods have already been sold and cannot be restituted, I would direct the NBP and its above‑named officers to deposit the sale proceeds thereof namely, a sum of Rs.29.5 million or thereabout in this Court within 15 days whereupon the amount would be invested by the Nazir in Government securities bearing six monthly returns, the returns being likewise reinvestable. This being done, it will be examined what further action, if any, may be taken. Extenuating circumstances, including apologies, or absence thereof, would then be considered. Only, if necessary contempt proceedings would be drawn up. In due course, it will also be determined as to whom the money, to be deposited, really belongs. Meanwhile the above applications would remain pending. Order accordingly. AA./E‑64/K Order accordingly.