Pawan Malhan & Ors. vs. M/S. Yes Bank Limited & Anr.

Facts

The petitioners filed a contempt petition alleging wilful disobedience of a Delhi High Court order dated August 1, 2019, in W.P.(C) 8332/2019. This order directed the respondent-banks to allow each petitioner to withdraw an aggregate sum of ₹1,00,000/- per month for living expenses, despite their bank accounts being frozen by the Enforcement Directorate. The respondent-banks, however, argued that they could not comply with this direction due to an order passed by the EOW Cyberabad, State of Telangana, which also froze the petitioners' accounts. The banks contended they were not parties to the original writ petition and that complying with the High Court's order would put them in violation of the EOW Cyberabad's directions. The petitioners had also filed a separate writ petition challenging the EOW Cyberabad's order, which was not stayed by the Court.

Held

The Court held that the respondent-banks did not wilfully and deliberately disobey the order dated August 1, 2019. The Court found that there were bona fide reasons for the non-compliance, primarily due to the conflicting order passed by the EOW Cyberabad, State of Telangana. The Court noted that the respondent-banks were not parties to the original writ petition (W.P.(C) 8332/2019) and that the petitioners should have sought appropriate clarification and specific directions from the Court regarding the operation of their bank accounts in light of the EOW Cyberabad's order. The Court observed that the petitioners' challenge to the EOW Cyberabad's order in W.P.(C) 4782/2019 did not result in a stay or setting aside of that order. Therefore, the Court concluded that the act of not allowing the withdrawals could not be construed as a deliberate attempt to disobey the Court's directions. The Court discharged the contemnors and dismissed the contempt petition.

Key Issues

1. Whether the respondent-banks wilfully and deliberately disobeyed the order dated August 1, 2019, passed in W.P.(C) 8332/2019, by failing to allow the petitioners to withdraw ₹1,00,000/- per month from their bank accounts, thereby constituting contempt of court under Section 2(b) read with Section 12 of the Contempt of Courts Act, 1971? Petitioner's contention: The petitioners argued that the Court's order dated August 1, 2019, unequivocally directed the contemnor-banks to permit withdrawals of ₹1,00,000/- per month for living expenses, and this order has not been complied with to date. Respondent's contention: The respondent-banks argued that the directions in W.P.(C) 8332/2019 pertained only to the debit freeze by the Enforcement Directorate and did not cover freezes by other agencies. They stated that compliance with the High Court's order would violate the directions issued by the EOW Cyberabad, State of Telangana. The banks also pointed out that they were not parties to the original writ petition and that the petitioners had not sought specific clarification regarding the conflict between the two orders. Furthermore, the petitioners' challenge to the EOW Cyberabad's order in a separate writ petition (W.P.(C) 4782/2019) was not granted any interim relief by the Court.