Supreme Court Upholds Passport Deposit Order in Property Dispute: Shyam Sahni vs. Arjun Prakash (2020)

Introduction

Date of the Judgment: March 19, 2020

Citation: 2020 INSC 246

Judges: R. Banumathi, J., A.S. Bopanna, J.

Can a court order a party to deposit their passport to ensure their presence in contempt proceedings when they have repeatedly failed to honor undertakings given to the court? The Supreme Court of India recently addressed this question in a case involving a long-standing property dispute. The court examined the extent of a single judge’s power to direct the deposit of a passport to ensure compliance with court orders. The bench, comprising Justices R. Banumathi and A.S. Bopanna, delivered the judgment.

Case Background

The case revolves around a property dispute concerning a house in Friends Colony, New Delhi. The appellant, Shyam Sahni, filed a civil suit in 2008 seeking declaration, permanent injunction, and possession of the first and second floors of the property. Alternatively, he sought partition. The dispute arose after the death of his mother, Niamat Sahni, when he discovered that Sarabjit Prakash and respondent No. 1, Arjun Prakash, had executed documents claiming ownership of the first and second floors.

Arjun Prakash, the respondent, contended that his mother, Usha Prakash, had taken possession of the first and second floors in 1974. He further stated that Niamat Sahni had made two wills, one in 1984 and another in 1992, dividing the property equally between her son (Shyam Sahni) and daughter (Usha Prakash). An Irrevocable Memorandum of Family Settlement was also allegedly signed in 1999, dividing the property between Shyam Sahni and Usha Prakash. According to Arjun Prakash, the ground floor went to Shyam Sahni, and the first and subsequent floors went to Usha Prakash. Usha Prakash later sold the flats on the second floor and the first floor to her husband, Sarabjit Prakash.

In 2007, a company formed by Arjun Prakash, his wife, and father took a loan from Bank of India, mortgaging the first floor of the property as collateral security. The loan became a non-performing asset, and the bank took physical possession of the first floor in 2011.

Timeline:

Course of Proceedings

The learned Single Judge initially granted an ex-parte interim injunction on June 2, 2008, restraining the defendants from creating any third-party rights in the suit property. This was prompted by the appellant’s claim that the defendants were raising further constructions and creating documents.

Subsequently, the appellant filed a contempt application alleging that the defendants had violated the injunction by obtaining financial facilities from Bank of India, mortgaging the first floor of the suit property. The learned Single Judge found Sarabjit Prakash guilty of contempt and directed both Sarabjit and Arjun Prakash to appear before the court, disclosing their assets. They both undertook to clear the charge on the property within four months.

However, they failed to comply with their undertakings. The court noted that Arjun Prakash had left Delhi and shifted to Singapore. Despite being directed to appear before the court, Arjun Prakash failed to do so, and proceedings were set ex-parte against him. The court then directed Arjun Prakash to deposit his passport and furnish security. Although Arjun Prakash offered properties as security, he again failed to comply with his undertakings, leading the court to restrain him from leaving the country and directing him to deposit his passport.

Arjun Prakash appealed to the Division Bench of the High Court, challenging the Single Judge’s order. The Division Bench set aside the order, stating that the bank was not a party to the proceedings and there was no justification for restricting Arjun Prakash’s movement. The appellant then approached the Supreme Court.

Legal Framework

This case primarily involves the interpretation and application of the following legal provisions:

• Order XXXIX Rule 2A of the Code of Civil Procedure (CPC): This provision deals with the consequences of disobedience or breach of an injunction. It allows the court to attach the property of the person who has disobeyed the injunction or to order their detention in civil prison.
• Sections 10 and 12 of the Contempt of Courts Act: These sections deal with the power of the court to punish for contempt of court. Section 10 outlines the power of the High Court to punish contempts of subordinate courts, and Section 12 deals with the punishment for contempt of court.

The legal framework within which this case operates is also influenced by the inherent powers of the court to ensure compliance with its orders and to prevent the abuse of the legal process. The court’s power to direct the deposit of a passport is seen as a measure to secure the presence of a party who has repeatedly failed to honor their undertakings to the court.

Arguments

Appellant’s Arguments:

• The appellant argued that respondent No. 1 had given an unconditional undertaking to clear the charges on the suit property within four months but failed to do so.
• It was contended that respondent No. 1 repeatedly gave evasive replies and undertakings but failed to comply with them.
• The appellant highlighted that respondent No. 1 had filed a false affidavit stating he resided in Delhi when he had already moved to Singapore.
• The appellant argued that the court’s direction to deposit the passport was not an impounding order but a measure to ensure respondent No. 1’s presence, given his history of non-compliance.
• The appellant contended that the court has the power to direct the deposit of the passport to ensure compliance with its orders and the undertakings filed before it.

Respondent’s Arguments:

• The respondent argued that he and his father had made efforts to clear bank dues but could not due to unavoidable circumstances.
• It was contended that the equitable mortgage on the suit property was created before the ex-parte stay order.
• The respondent argued that the Single Judge was wrong in restricting the jurisdiction of the Debt Recovery Tribunal (DRT).
• It was submitted that there was no need to direct the deposit of the passport since a status quo order was already in place.
• The respondent argued that the court should not take the burden of the bank and compel him to clear the dues.
• It was contended that the coercive directions given by the Single Judge were not warranted and were rightly set aside by the Division Bench.

Sub-Submissions of the Parties:

Issues Framed by the Supreme Court

The Supreme Court considered the following issue:

1. Whether the learned Single Judge was right in directing the deposit of the first respondent’s passport.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Supreme Court relied on David Jude vs. Hannah Grace Jude and Another (2003) 10 SCC 767* to support the view that the court has the power to direct the cancellation of a passport to ensure the presence of a contemnor. The court found this case relevant to the present situation where the respondent was repeatedly failing to comply with court orders.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the repeated failures of the respondent to comply with undertakings given to the court. The court emphasized that the direction to deposit the passport was not an impounding order but a measure to ensure the respondent’s presence and compliance with court orders. The court also noted the respondent’s evasive conduct, including filing a false affidavit about his residence.

The court’s reasoning focused on the need to uphold the integrity of the judicial process and ensure that parties adhere to their commitments made before the court. The court was not persuaded by the respondent’s arguments regarding his efforts to clear dues or the timing of the mortgage, as these did not justify his non-compliance with court orders.

Ranking of Sentiment Analysis of Reasons:

Fact:Law Ratio:

Logical Reasoning

Issue: Whether the learned Single Judge was right in directing the deposit of the first respondent’s passport.

Judgment

The Supreme Court overturned the Division Bench’s decision, holding that the learned Single Judge was justified in directing the respondent to deposit his passport. The court emphasized that the order was not an impounding of the passport but a measure to ensure the presence of the respondent, who had repeatedly failed to comply with undertakings given to the court. The court noted that the respondent had given multiple undertakings to clear the charges on the suit property but had failed to do so.

The court observed that the respondent had also filed a false affidavit claiming to reside in Delhi when he had already moved to Singapore. The court highlighted the need to ensure compliance with court orders and to prevent the abuse of the legal process. The Supreme Court stated, “In order to ensure the presence of the parties in the contempt proceedings, the Court is empowered to pass appropriate orders including the surrender of passport.”

The court distinguished the present case from a case of impounding a passport. The court clarified that the direction to deposit the passport was only to ensure the presence of the respondent, who was filing repeated undertakings before the Court but not complying with them. The court stated, “As discussed earlier, the purpose of directing respondent No.1 to surrender his passport was only to ensure the presence of respondent No.1 who was filing repeated undertakings before the Court but was not complying with the same.”

The Supreme Court also noted that the Division Bench had erred in setting aside the order of the Single Judge, stating, “In our view, the Division Bench was not right in setting aside the order of the learned Single Judge in directing respondent No.1 to deposit his passport before the Court and the judgment of the Division Bench cannot be sustained.”

The court confirmed the order of the learned Single Judge directing the respondent to deposit his passport and requested the Single Judge to expedite the disposal of the civil suit.

Key Takeaways

• A court can direct a party to deposit their passport to ensure their presence in contempt proceedings, especially when the party has repeatedly failed to comply with undertakings given to the court.
• The direction to deposit a passport is not the same as impounding a passport; it is a measure to ensure compliance with court orders.
• Courts have the inherent power to take necessary steps to prevent abuse of the legal process and to ensure that parties adhere to their commitments.
• False affidavits and evasive conduct by parties can lead to stricter measures by the court to ensure their presence and compliance.

Directions

The Supreme Court directed the learned Single Judge to expedite the disposal of the civil suit, preferably within a period of nine months. The court also confirmed the order of the Single Judge directing the respondent to deposit his passport before the Court, to ensure the presence of respondent No.1.

Specific Amendments Analysis

There is no discussion of specific amendments in the judgment.

Development of Law

The ratio decidendi of this case is that a court has the power to direct a party to deposit their passport to ensure their presence in contempt proceedings, particularly when the party has repeatedly failed to comply with undertakings given to the court. This judgment reinforces the court’s authority to take necessary measures to ensure compliance with its orders and to prevent the abuse of the legal process. There is no change in the previous position of law, but this case clarifies the court’s powers in enforcing its orders.

Conclusion

The Supreme Court allowed the appeal, setting aside the Division Bench’s order and upholding the learned Single Judge’s direction for the respondent to deposit his passport. The court emphasized the importance of ensuring compliance with court orders and the need to prevent abuse of the legal process. This judgment reinforces the court’s power to take necessary measures to secure the presence of parties who repeatedly fail to honor their undertakings.