Supreme Court convicts occupier for civil contempt for wilful non‑payment of court‑ordered licence fees; 30 days to purge contempt

A bench of Justices Abhay S. Oka and Augustine George Masih heard a contempt petition arising out of Special Leave Petition (C) No. 17433 of 2021 concerning alleged non‑payment of use and occupation charges ordered by this Court on 7 November 2022. The petition was moved by M/s Chithra Woods Manors Welfare Association against Shaji Augustine for alleged deliberate disobedience of the Court’s direction to deposit arrears and to pay monthly licence fees.

The Court held that the respondent had committed civil contempt by “deliberately and with malafide intention” failing to comply with the order dated 07.11.2022 and by misusing judicial process to retain possession while enjoying the proceeds of the property. The Court, in its reasoning, observed: “The power and jurisdiction of this Court to initiate and punish for its contempt has not been disputed. It is well settled by now and it is apparent from the provisions of the Contempt of Court Act that Civil contempt means wilful disobedience of judgment, decree, or direction, order, writ or other process of the Court or wilful breach of an undertaking given to the Court.” The bench found that the respondent had sought and received bank details to transfer the ordered sums but had not credited a single rupee, and noted that his conduct and prior litigation demonstrated intent to retain benefits without payment. The Court held the respondent guilty of civil contempt, imposed simple imprisonment for three months and a fine of Rs. 20,000, and granted 30 days to purge the contempt by complying with the 07.11.2022 order; the sentence would follow in case of default. The Court also recorded: “We, in the above facts and circumstances, hold Shaji Augustine‑Respondent, guilty of Civil Contempt and impose punishment of Simple Imprisonment for three months along with fine of INR 20,000/-…”.

Background The dispute concerned a decree‑scheduled building in Munnar owned by the petitioner association and licensed to the respondent by a 26 January 2014 agreement for ten years at Rs. 12 lakh per month. Early defaults led to proceedings before a Sole Arbitrator and interlocutory directions in June 2016 for deposits and monthly payments. Appeals and mediation before the Kerala High Court produced a settlement dated 3 April 2017 reducing the monthly licence fee to Rs. 8 lakh and reducing claimed arrears to Rs. 75 lakh; the settlement was made part of the High Court’s order of 11 April 2017. Subsequent non‑payment prompted execution proceedings, an execution order of 23 March 2021 providing instalments and ultimately ordering delivery of possession; the High Court dismissed challenges on 20 September 2021.

The respondent moved this Court and an interim order of 7 November 2022 directed payment of Rs. 12 lakh per month as use and occupation charges with arrears from 20.09.2021 to 31.11.2022 to be paid in six instalments beginning 31.12.2022, and continuance of monthly payments by the 10th of each month, “subject to the outcome of the present Special Leave Petition.” The respondent sought account details on 17 November 2022 and received them, but made no payments and continued to occupy the property. The petitioner association lodged Contempt Petition (C) No. 712 of 2023 during the SLP’s pendency; the main SLP was dismissed on 1 December 2023 for failure to comply with the payment direction, while contempt proceedings continued.

The respondent filed an affidavit claiming penury and inability to comply; the Court called for disclosure of movable and immovable assets and personal attendance. On 12 September 2024 the Court found wilful breach, gave the respondent an opportunity to be heard, and, after hearing, concluded that his conduct showed mala fide intent and misuse of the judicial process. The Court relied on settled principles that contempt powers must be sparingly exercised but are essential to protect administration of justice and cited precedents including Hira Lal Dixit, Bank of India v. Vijay Transport and Sitaram Enterprises v. Prithviraj Vardichand Jain. The final result was conviction for civil contempt, a sentence of simple imprisonment for three months and a fine of Rs. 20,000 with 30 days’ time to purge the contempt by making the payments and filing a compliance report with the Registrar Judicial; in default the sentence would be triggered.

Case Details: Case No.: Contempt Petition (C) No. 712 of 2023 in SLP (C) No. 17433 of 2021 Case Title: M/s Chithra Woods Manors Welfare Association v. Shaji Augustine Appearances: For the Petitioner(s): Not specified in the judgment For the Respondent(s): Not specified in the judgment