The Delhi High Court recently ruled that not every instance of disobedience or violation of a court order constitutes contempt. The court emphasized that intent is the cornerstone of contempt, and without intent, contempt cannot be established.

Justice C. Hari Shankar of the Delhi High Court made these observations while hearing a contempt petition filed by Viterra BV, a Canadian supplier of essential food and feed products, against Sharp Corp Limited. 

Senior Advocate Darpan Wadhwa, representing Viterra, alleged that Sharp violated a Single Judge’s order restraining the alienation or creation of third-party rights over certain properties. Wadhwa claimed that Sharp sold a property in Siraspur on November 28, 2022, without informing the court. He further argued that Sharp failed to disclose any pre-existing mortgage or charge on the property and provided supporting documents with the contempt petition.

In defense, Senior Advocate Vikram Nankani, appearing for Sharp, contended that the restraint on alienating immovable properties, as stipulated in the Single Judge’s order, was explicitly subject to the prior rights of financial institutions.

Nankani clarified that the order referenced "prior rights" rather than "mortgage" and highlighted that the State Bank of India (SBI) certified that the Siraspur property was not mortgaged with the bank or its consortium.

The court emphasized that the essence of contempt is best understood through its etymology, which defines it as a lack of respect or reverence, often accompanied by disdain or mockery. 

In the legal context, the court clarified that not all instances of disobedience to court orders amount to contempt. The critical element is intent; without wilful defiance, contempt cannot be established. 

Referring to Section 2(b) of the Contempt of Courts Act, 1971, the court observed that mere non-compliance does not constitute contempt unless it is deliberate. Acts reflecting indifference to compliance obligations may qualify as contempt only if intent is evident. When intent is ambiguous, courts typically give contemnors a chance to rectify their breaches, thereby “purging” the contempt. However, continued disobedience despite such opportunities demonstrates intent and invites consequences, the court noted.

The court emphasized “Civil contempt actions, too, partake of quasi-criminal character, inasmuch as, if contempt is found to have been committed, the punishment that follows may entail loss of liberty. Courts have, therefore, to be cautious while arriving at findings of commission of contempt, and can in no case be over-sensitive in their approach”.

The court observed that ambiguity in court orders or the possibility of multiple interpretations could serve as a valid defense against allegations of contempt. It further emphasized that for contempt to be established, the alleged breach must be clear and undeniable, as courts generally avoid engaging in interpretative inquiries into the intent behind orders or alleged violations. These principles form the foundation of contempt proceedings.

Based on this reasoning, the court concluded that the sale of the Siraspur property did not amount to disobedience of the court's order. Consequently, it dismissed the contempt petition.

Representation:

• For Decree Holder: Senior Advocate Darpan Wadhwa with Advocates Raunaq B. Mathur and Keshav Somani
• For SBI: Advocates Siddharth Sangali and Harshita Agrawal
• For Judgment Debtor: Senior Advocate Vikram Nankani with Advocates Arvind Kumar and Heena George

Case Title: Viterra B.V. v. Sharp Corp Limited (2024:DHC:9302)