The Hindu Business Line : `Company Law Board has powers to deal with contempt'

THE High Court being the appellate authority of the Company Law Board, the latter must be deemed to be a subordinate court within the ambit of the Contempt of Courts Act, 1971 and therefore, the High Court can exercise powers of dealing with contempts of the CLB provided such contempts are not offences punishable under the Indian Penal Code, the Company Law Board, Additional Principal Bench, Chennai held in an order.Responding to petitions by Mr N. Venkataswamy Naidu against Sri Suyateja Constructions Pvt Ltd seeking directions for punishing the respondents (company & others) for violating orders of the CLB by demolishing the structures in Gandhinagar, Ranga Reddy District, Hyderabad, the Vice-Chairman of the Board, Mr K.K. Balu said: "I do not, therefore, hesitate to hold that the respondents acted in gross violation of the orders dated July 18 & July 20, 2005 of the Bench, by demolishing the entire structures in dispute".

According to the counsels for the petitioner, Mr R. Murari and Mr B. Dhanraj, the respondents in disregard of the orders of the Bench continued the demolition of the structures. Agreeing with them, the Bench said that the respondents interfered with administration of justice by violating the orders of this Bench, and therefore, a reference could be made by the Bench under Section 15(2) of the Act. The Bench did not agree with the contention of the counsel for respondents, Mr K. Ramaswamy that there was no provision in the Act for taking action under contempt in case of violation of any order of the CLB.

The Bench said its order directed the respondents to maintain status quo in regard to the existence of the structures. Nothing prevented the respondents from seeking leave of the Bench to dismantle the structures, but instead they went ahead with the completion of the demolition process. Also, the report of the Advocate-Commissioner did not speak about the dilapidated condition of the structures as claimed by the respondents. It was a fact that the AC visited the disputed site and took photographs of structures. The work of demolition was in progress at that time, the fact of which remained uncontroverted. The respondents had not chosen to file any objections on the report of the AC.

On the question whether the Bench was empowered to punish such wilful defaulters invoking regulations 44 and 47 of the CLB Regulations, the Bench held that by virtue of regulation 44, every Bench had inherent power to make such orders as might be necessary for the ends of justice or to prevent abuse of process of the Bench.

It was true that there was no provision in the Act to punish any person who wilfully disobeyed any order. That did not mean that a contemnor could escape from punishment for contempt. An order of a judicial or quasi-judicial authority, being sacrosanct, must be obeyed unless and until set aside in a manner known to law. Any Bench of the CLB, being deemed to be a court for the purpose of prosecution of a person disobeying its order, Section 10 assumed importance.

The petitioner had not established any criminal contempt on the part of the respondents. The petitioner was at liberty to move the High Court for invoking its jurisdiction under Section 10 so as to prosecute the respondents for having wilfully disobeyed the orders of the CLB, the Bench held.

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