M/S N D Waddar And Co vs. Sri Gaurav Gupta

Held

The Court held that while its powers under the Contempt of Courts Act, 1971, are limited to examining contumacious conduct, Article 215 of the Constitution of India vests superior courts with broader authority, including the power to determine their own jurisdiction. In this case, the Court chose to exercise its jurisdiction under Article 215 to give its imprimatur to the settlement arrived at between the parties. The Court found that the terms of the settlement were conducive to resolving outstanding disputes and advancing the interest of justice. The settlement included an undertaking by the Managing Director of the Nigam to pay Rs.171.43 crores by 30.11.2026. Clause 11 of the settlement explicitly allowed the complainant to revive the contempt proceedings if the payment was not made by the stipulated date. Therefore, the Court accepted the joint memo and approved the settlement terms. Subject to due compliance with the settlement, any contempt committed by the accused would stand purged, particularly in light of the unconditional apology. The complainant was also bound by their commitments. The case was consigned, with the liberty to revive the contempt proceedings if payments were not made.

Facts

The complainant, M/s N D WADDAR AND CO, a PWD Class-I Contractor, filed a contempt petition alleging non-compliance with an order dated 25.10.2025 in W.P.No.2767/2024. This order had directed the respondents to release the amount claimed by the complainant through submitted bills within four weeks. The complainant had completed works for Krishna Bhagya Jala Nigam Niyamitha (Nigam) and submitted bills, but payment was not received. A compliance affidavit was filed by the Managing Director of the Nigam (Accused No.2), stating that a settlement had been reached. The settlement involved the Nigam paying Rs.171.43 crores by 30.11.2026 as full and final settlement of all claims, including those in the contempt petition and related appeals. An unconditional apology was also tendered by Accused No.2. A joint memo detailing the settlement terms was filed.

Key Issues

1. Whether the accused Nos. 1 and 2 have willfully disobeyed the order dated 25.10.2025 passed in W.P.No.2767/2024, thereby committing civil contempt of this Hon'ble Court, as contemplated under Sections 11 and 12 of the Contempt of Courts Act, 1971? Petitioner's contention: The petitioner argued that the accused had willfully disobeyed the court's order by failing to release the claimed amounts within the stipulated period, necessitating the contempt proceedings. Revenue/State's contention: The revenue/state, through the accused, contended that a settlement had been arrived at between the parties, resolving the dispute. The Managing Director of the Nigam tendered an unconditional apology and agreed to a payment schedule as per the settlement terms. The settlement was presented as a resolution to the underlying dispute, thereby negating the contempt. 2. Whether this Court, in exercise of its powers under Article 215 of the Constitution of India, should approve the settlement arrived at between the parties and drop the contempt proceedings? Petitioner's contention: The petitioner agreed to the settlement terms and prayed for the dropping of the contempt petition based on the mutually agreed resolution. Revenue/State's contention: The revenue/state, through the Nigam, presented the settlement as a means to end litigation and fulfill the obligations, thereby seeking the court's imprimatur on the settlement and closure of the contempt case.