Parties in Court Proceedings Must Honor Undertakings: Delhi HC Rejects Apology, Holds Company in Contempt

The Delhi High Court, in a recent Contempt Petition, underscored the gravity of commitments made during legal proceedings, emphasizing the obligation for parties to genuinely fulfill their promises. Justice Jasmeet Singh, presiding over the Single Judge Bench, highlighted the significance of honoring undertakings, stating that parties cannot lightly offer commitments without intending to uphold them.

The case, initiated by the State Trading Corporation of India against officials of Akshata Mercantile Pvt. Ltd., sought to commence contempt proceedings for breaching commitments made in connection with a Criminal Complaint under Section 138 of the Negotiable Instruments Act before the Trial Court.

The petitioner alleged that Akshata Mercantile misled the Trial Court by providing false assurances, causing delays in the adjudication of the complaint. The respondents had pledged a monthly remittance of Rs. 10 crores to Rs. 15 crores to the State Trading Corporation, committing to clear the entire outstanding amount within 6 to 8 months.

Acknowledging the validity of the undertaking before the Trial Court, the High Court dismissed the respondent’s claim of conditional terms or lack of specified timelines. Justice Singh emphasized the clarity of the settlement terms, stating the commitment was neither vague nor devoid of timelines.

Regarding the apology tendered by the respondent, the Court referenced precedents and highlighted the significance of genuine remorse and regret in contempt cases. In this instance, given the repeated attempts to delay proceedings and the failure to comply with the agreed-upon terms, the Court deemed the apology as lacking bona fide intent.

Consequently, the High Court found the respondent guilty of contempt and granted a four-week period to respond and demonstrate cause as to why they should not be penalized for non-compliance with the Trial Court’s undertaking.

The case, titled “State Trading Corporation Of India Ltd v. Sheela Abhay Lodha & Ors and connected matter [Cont.Cas(C) 232/2015],” stands as a testament to the Court’s stance on upholding the sanctity of commitments made during legal proceedings.

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