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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1820 OF 2018

[@ SPECIAL LEAVE PETITION (C) NOS. 9820 OF 2016]

R K ARORA GENERAL MANAGER & ANR. Appellant(s)

VERSUS

M/S ACE ENTERPRISES Respondent(s)

J U D G M E N T

KURIAN, J.

1.Leave granted.

2.On 22.06.2011, the Court of Small Causes,

Srinagar, passed an order of injunction in the

following terms :-

“The application in hand will not be

allowed, there are chances that the suit

of the applicant will become infructuous.

So in the interests of justice the

application in hand is allowed and the

proceedings before the arbitration with

regard to matter titled M/s ACE

Enterprises Vs. Union of India and ors is

stayed till the objections from the other

side is filed. Put up this file on

26-07-11.”

3. Alleging violation of the above order, an

application was filed for initiating contempt

proceedings. The prayer reads as follows :-

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“It is therefore prayed that the contempt

proceedings may please be intiated and

the contemnors be punished according to

law and the order of revival passed by

the Arbitrator may please be stayed.”

4.The Court of Small Causes treated the application

filed by the respondent as an application for

contempt without mentioning any provision. It is

also significant to note that even the applicant had

not mentioned any provision for initiating contempt.

The Court passed an order dated 06.11.2013 by

entering a finding that there is no contempt and that

there is no violation of the order dated 22.06.2011.

The operative portion of the order, to the extent

relevant, reads as follows :-

“The proceedings of the arbitration

continued by the Arbitrator, is based on

the understanding of the Arbitrator and

the learned counsel for the defendants as

to the correct import of the order dated

22-06-2011. The said understanding

arrived at, though is borne out from the

facts and circumstances pertaining to the

controversy, cannot be construed as

willful and deliberate attempt on the

part of counsel for parties involved, to

flout the order of the court dated

22-06-2011. The arbitration proceedings

is an independent and statutory remedy

available under the provisions of Jammu

and Kashmir Arbitration Act, 2002. The

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provisions of said Act have overriding

effect over the general laws. Exercise

of statutory remedy and proceedings under

the special act, cannot be scuttled in

ordinary course of events. Only if the

statute provides for such exercise of

power by the civil court, the civil court

can enter into the domain of such

jurisdiction, that too in limited sphere.

The exercise of jurisdiction by the

Arbitrator, available under the

provisions of Jammu and Kashmir

Arbitration Act, advise rendered by the

learned counsel representing the

defendant in the court or before the

Arbitrator, and proceedings initiated by

any party in exercise of statutory right,

cannot be construed as flouting of the

order of the civil court or willful or

deliberate violation of the order, unless

the violation is clear, emphatic and

apparently willful and deliberate, aimed

at defeating the order passed by the

court. From the nature of the order

passed by the court of Sub-Judge/Judge

Small Causes Court, Srinagar, and the

facts and circumstances pertaining to the

case, I find no flouting or violation of

the order dated 22.06.2011, by the

persons named in the contempt

application. No justifiable and

sufficient ground exists for proceedings

against the said named persons for

contempt of court. Accordingly, the

contempt proceedings are dropped against

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the said named persons. Application is

dismissed. Record of application be made

part of suit file on completion.”

5. That order was challenged by the respondent

before the High Court. The High Court has considered

the matter in extenso. At paragraphs 11, 13 and 17,

the High Court has entered its findings as follows :-

“11. Admittedly, the impugned order has

been passed by the learned Sub-Judge in

a contempt petition filed by the

petitioner. The Jammu and Kashmir

Contempt of Courts Act, 1997 (Act No.

XXV of 1997) (for short, Contempt of

Courts Act) was enacted to define and

limit the power of certain courts in

punishing contempt of courts and to

regulate their procedure in relation

thereto. There is no provision in this

Act to empower a subordinate court to

punish contempt of itself. However,

Section 10 of the Contempt of Courts Act

vests with the High Court the power to

punish contempts of subordinate courts.

It says that the High Court shall have

and exercise the same jurisdiction,

powers and authority in accordance with

the same procedure and practice, in

respect of contempts of courts

subordinate to it as it has and

exercises in respect of contempts of

itself; provided that the High Court

shall not take congnizance of a contempt

alleged to have been committed in

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respect of a court subordinate to it

where such contempt is an offence

punishable under the Ranbir Penal Code,

1989. Thus, the law provides that if

there is contempt of any court

subordinate to the High Court, it is the

High Court alone which has the power to

punish for such contempt. Essentially,

therefore, a court subordinate to the

High Court cannot take cognizance and

initiate proceedings to punish for

contempt of itself, the question of

conducting trial of an application for

contempt and taking a decision thereon

is far remote.

13. Since the subordinate courts do not

have the jurisdiction to take cognizance

of contempt of itself, or initiate

proceedings on a contempt petition or

try it, it cannot proceed to decide it

finally. In the instant case, the

learned Sub-Judge has not only taken

cognizance but has proceeded to

initiate, and conducted, proceedings

thereon and finally decided it. Thereby

the learned Sub-Judge has assumed a

jurisdiction, not vested in it under

law.

17. During the course of arguments of

this case, the learned counsel for the

petitioner brought it to the notice of

the Court that the Arbitrator appointed

in violation of the ad-interim orders of

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the trial court has ultimately concluded

the proceedings and passed the final

award against the interests of the

petitioner. Pending decision in the

contempt petition in terms of applicable

laws, there shall be stay of final

award. It hardly needs a mention here

that in the event it is found that there

has been a violation of the interim

order of the trial court, the

appointment of the Arbitrator and the

proceedings conducted by him together

with any award passed by him would be

rendered non-est in the eyes of law.”

6.When the matter came up before this Court, the

following order was passed on 18.04.2016 :-

“Though we do not have any quarrel with

the settled position of law, as held by

the High Court that the trial court does

not have any jurisdiction to initiate

proceedings under the Jammu and Kashmir

Contempt of Courts Act, 1997, we find

that the High Court has omitted to take

note of the fact that there are two

separate proceedings under different

contracts.

In that view of the matter, issue

notice.

In the meantime, there shall be stay of

further proceedings pursuant to the

impugned order.”

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7.Having heard Mr. Tushar Mehta, learned Additional

Solicitor General, and Mr. Abdul Rehman, representing

the respondent on permission, we do not feel it

necessary to refer to any other factual details.

Though an application for contempt was filed before

the trial court, it was, in fact, a petition for

taking action under Order XXXIX Rule 2A of Jammu and

Kashmir Code of Civil Procedure Act, 1977. It is not

a case for initiating contempt on the face of it.

These are two different jurisdictions. That is all

that has been clarified by the High Court. The

appeal is, hence, disposed of with the following

directions :-

i) The application filed by the respondent for

initiating contempt shall be treated as an

application for taking action under Order XXXIX Rule

2A of the Jammu and Kashmir Code of Civil Procedure.

It shall be renumbered accordingly.

ii) The trial court shall first see whether there is

any disobedience of the order of injunction and in

case the court enters a finding of disobedience, the

rest under Order XXXIX Rule 2A alone shall follow.

8.The submission made by the appellants regarding

separate contracts and pending application under

Section 8 of the Jammu and Kashmir Arbitration Act

etc. are open to the appellants to canvas before the

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trial court at the appropriate stage. It will also

be open to the respondent to take all available

contentions before the trial court. Being a matter

pending since long, we direct the trial court to take

a decision accordingly on the application

expeditiously and preferably within a period of three

months from the date of receipt of a copy of this

Judgment.

No costs.

.......................J.

[ KURIAN JOSEPH ]

.......................J.

[ MOHAN M. SHANTANAGOUDAR ]

New Delhi;

February 07, 2018.

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ITEM NO.4 COURT NO.5 SECTION XVI -A

S U P R E M E C O U R T O F I N D I A

RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 9820/2016

(Arising out of impugned final judgment and order dated 16-12-2015

in OWP No. 377/2014 passed by the High Court Of Jammu&kashmir At

Srinagar)

R K ARORA GENERAL MANAGER & ANR. Petitioner(s)

VERSUS

M/S ACE ENTERPRISES Respondent(s)

(IA No.78069/2017-PERMISSION TO FILE ADDITIONAL DOCUMENTS and IA

No.126071/2017-PERMISSION TO APPEAR AND ARGUE IN PERSON)

Date : 07-02-2018 This matter was called on for hearing today.

CORAM : HON'BLE MR. JUSTICE KURIAN JOSEPH

HON'BLE MR. JUSTICE MOHAN M. SHANTANAGOUDAR

For Petitioner(s) Mr. Tushar Mehta, ASG

Mr. Rahul Narayan, AOR

Ms. Mala Narayan, Adv.

Mr. Sushant Goel, Adv.

For Respondent(s) Ms. Aishwarya Bhati, AOR

Respondent-in-person

UPON hearing the counsel the Court made the following

O R D E R

Leave granted.

The civil appeal is disposed of in terms of the signed

reportable Judgment.

Pending Interlocutory Applications, if any, stand disposed of.

(JAYANT KUMAR ARORA) (MADHU NARULA)

COURT MASTER COURT MASTER

(Signed reportable Judgment is placed on the file)