Supreme Court Holds Shaji Augustine Guilty of Contempt for Wilful Disobedience of Court Order

The Supreme Court of India recently delivered a significant judgment in the case of M/S Chithra Woods Manors Welfare Association vs. Shaji Augustine, holding the respondent guilty of civil contempt for wilful disobedience of the court’s order. The case revolves around the non-payment of arrears of use and occupation charges for a property in Munnar, Kerala, and the respondent’s persistent defiance of judicial directives.

The petitioner, M/S Chithra Woods Manors Welfare Association, is the owner of a property consisting of 96 furnished studio apartments in Munnar. An agreement was entered into between the petitioner and the respondent, Shaji Augustine, on 26.01.2014, allowing the latter to occupy and use the property for 10 years in exchange for a monthly license fee of INR 12 lakhs. However, the respondent soon defaulted on payments, leading to a series of legal battles.

The petitioner association filed a suit before the Sub Court at Thodupuzha, Kerala, for the recovery of arrears. Due to an arbitration clause in the agreement, the dispute was referred to a Sole Arbitrator. The arbitrator partially allowed the petitioner’s application, directing the respondent to deposit INR 1,36,49,439/- and pay INR 12 lakhs per month from June 2016 onwards. Both parties appealed to the District Court at Ernakulam, which stayed the arbitration proceedings but reiterated the payment directions.

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The matter was further escalated to the High Court of Kerala, where the parties agreed to a settlement. The settlement reduced the monthly license fee to INR 8 lakhs and the arrears to INR 75 lakhs. The High Court incorporated the settlement terms into its order dated 11.04.2017. Despite this, the respondent failed to comply, leading the petitioner to file an execution petition. The Execution Court ordered the respondent to pay the arrears in instalments and deliver possession of the property. The respondent challenged this order up to the Supreme Court, which dismissed his petition and sustained the contempt proceedings.

The Supreme Court, in its judgment, noted the respondent’s deliberate and wilful disobedience of its order dated 07.11.2022, which directed him to pay arrears of INR 12 lakhs per month from 20.09.2021 to 31.11.2022 in six monthly instalments. The respondent sought account details from the petitioner but failed to make any payments, continuing to occupy and benefit from the property. The court observed that the respondent’s conduct reflected a clear intent to misuse judicial processes and retain possession of the property without fulfilling his financial obligations.

The court referenced several precedents to underscore the gravity of contempt. In Hira Lal Dixit v. State of Uttar Pradesh, it was held that contempt jurisdiction exists to prevent interference with justice and maintain the court’s authority. Similarly, in Bank of India v. Vijay Transport And Others, the court emphasized that contempt power is exercised to uphold the rule of law. The judgment also cited Sitaram Enterprises v. Prithviraj Vardichand Jain, where the court highlighted that contempt strikes at the heart of justice and undermines public confidence in the judiciary.

The Supreme Court concluded that the respondent’s actions amounted to civil contempt under Section 2(b) of the Contempt of Courts Act, 1971. It rejected his plea of financial incapacity, noting his failure to disclose income from the property or seek modification of the court’s order. The court held that the respondent’s conduct was deliberate, malafide, and aimed at undermining judicial authority.

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In its final order, the court imposed a punishment of three months’ simple imprisonment and a fine of INR 20,000/- on the respondent. It granted him 30 days to purge the contempt by complying with the payment directions, failing which the punishment would take effect. The judgment serves as a stern reminder of the consequences of disregarding court orders and the importance of upholding the sanctity of judicial processes.

Petitioner Name: M/S Chithra Woods Manors Welfare Association.
Respondent Name: Shaji Augustine.
Judgment By: Justice Abhay S. Oka, Justice Augustine George Masih.
Place Of Incident: Munnar, Kerala.
Judgment Date: 23-04-2025.
Result: dismissed.

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