What did the High Court hold?

The tribunal held that the contempt proceedings cannot be used to decide issues not addressed in the original order. Since the question of interest on revised pay-scale amounts was not decided, and the company had settled claims as per Supreme Court and BIFR orders, there was no contempt.

The complainants filed contempt petitions alleging disobedience of a court order directing payment of arrears with interest under a Voluntary Retirement Scheme (VRS). The dispute centers on whether interest is payable on the revised pay-scale amounts, which the company claims is not covered by the scheme.

What were the issues?

Whether interest is payable on revised pay-scale amounts under a VRS scheme, and if non-payment constitutes contempt of a prior court order.

Nagaraja C S vs Mr K K Gupta | Karnataka High Court 2016

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 27TH DAY OF JANUARY, 2016

PRESENT:

THE HON’BLE MR.JUSTICE N.KUMAR

AND

THE HON’BLE MR.JUSTICE G.NARENDAR

C.C.C. Nos.692/2015 & 752-766/2015 [CIVIL]

BETWEEN:

NAGARAJA. C. S

AGED ABOUT 70 YEARS

S/O C.V. SURYANARAYANA RAO

R/AT NO.118, 4TH MAIN ROAD

INCOME TAX LAYOUT

VIJAYANAGAR, BANGALORE-560040.

SRINIVASAN.B.S.

AGED ABOUT 74 YEARS

S/O H.C. YOGANARASIMHAN

NO.216, I.G. CROSS, 3RD STAGE

4TH BLOCK, BASAVESWARANAGAR

BANGALORE-560079.

NAGARAJAIAH.J

AGED ABOUT 74 YEARS

S/O JANNAPPA

RESIDING AT NO.15/13

SRI. NILAYA, 12TH MAIN, SHIVANAGAR

RAJAJINAGAR, BANGALORE-560010.

RAMESH.Y

AGED ABOUT 74 YEARS

S/O Y. RAMAKRISHNAIAH

RESIDING AT 783, 4TH CROSS

11TH BLOCK, NAGARABAVI

II STAGE, BANGALORE-560072.

R. ANANDASHAYANAM

AGED ABOUT 78 YEARS

S/O P.S. RAJAGOPALAN

RESIDING AT NO.530

8TH MAIN, 11TH A CROSS

J.P. NAGAR, 2ND PHASE

BANGALORE-560078.

RAMULU.K

AGED ABOUT 74 YEARS

S/O K. KODANDAIAH

RESIDING AT NO.301/1

GOKUL 1ST STAGE, II PHASE

10TH MAIN, 2ND CROSS

BANGALORE-560054.

VENKATARAMANAPPA

SINCE DECEASED

HIS LR’s SMT. CHANDRAKALA (WIFE)

AGED ABOUT 65 YEARS

S/O DODDATHIMMAPPA

NO.472, I.B. STREET

C CROSS, MATHIKERE

BANGALORE-560054.

G. LAKSHMANA

AGED ABOUT 74 YEARS

S/O H. GOVINDA DIKSITH

RESIDING AT NO. 121

3RD C CROSS, VIVEKANANDANAGAR

BSK 3RD STAGE, BANGALORE-560085.

VIJAYASARATHY.K.V.

AGED ABOUT 72 YEARS

S/O K.VENKATARAMAIAH

RESIDING AT NO.1454

7TH A MAIN, RPC LAYOUT

VIJAYANAGAR II STAGE

BANGALORE-560040.

10.

NARASIMHAMURTHY.S

AGED ABOUT 74 YEARS

S/O S.N. NINGA IYENGAR

RESIDING AT NO.55

SANNIDHI ROAD, BASAVANAGUDI

BANGALORE-560004.

11.

G. RAJEEVALOCHANA

AGED ABOUT 72 YEARS

S/O GUNDAPPA

NO.31, 7TH CROSS, 7TH MAIN

GOVINDARAJANAGAR

BANGALORE-560079.

12.

VENKATESHAN.K

AGED ABOUT 74 YEARS

S/O KALYANA SUNDARAM

RESIDING AT NO.139, 2ND MAIN

CKA, BSK III STAGE, III PHASE

BANGALORE-560085.

13.

H.N. SRINIVASAMURTHY

AGED ABOUT 74 YEARS

S/O NARASIMHA IYENGAR

RESIDING AT NO.785/20

4TH MAIN, RAJAJINAGAR 2ND STAGE

A BLOCK, BANGALORE-560010.

14.

RAMACHANDRAN.S.R

AGED ABOUT 75 YEARS

S/O V.S. RAJU NAIDU

RESIDING AT NO.26

BSK 3RD MAIN ROAD

III STAGE, 3RD PHASE

BANGALORE-560085.

15.

K. SRINIVASAN.K

AGED ABOUT 72 YEARS

S/O B.L. KRISHNAMURTHY

RESIDING AT NO.352

6TH MAIN, N.R. COLONY

BANGALORE-560019.

16.

B. NAGENDRA KUMAR

AGED ABOUT 74 YEARS

S/O M.S. ANANTHA RAJENDRA

NO.92, 1ST MAIN, AMARJYOTHINAGAR

BANGALORE-560040.

… COMPLAINANTS

(BY SRI. N. MANOHAR-ADV )

AND

MR. K.K. GUPTA

THE CHAIRMAN & MANAGING DIRECTOR

M/S ITI LIMITED, ITI BHAVAN

CORPORATE OFFICE:

DOORVANINAGAR

BANGALORE-560016.

MR. S. GOPU

THE DIRECTOR (INCHARGE OF HR)

M/S ITI LIMITED, DOORVANINAGAR,

BANGALORE-560016.

MR. FAROOQUI

THE SECRETARY

GOVERNMENT OF INDIA

DEPARTMENT OF TELECOMMUNICATION

NEW DELHI-01

... ACCUSED

(BY SRI. C.K. NANDA KUMAR-ADV FOR A1 & A2; SRI. KRISHNA.S. DIXIT-ASG FOR A3) * * *

THESE CCCs ARE FILED UNDER SECTIONS 11 & 12 OF THE CONTEMPT OF COURTS ACT, 1971, PRAYING THAT THE HON'BLE HIGH COURT BE PLEASED TO INITIATE CONTEMPT PROCEEDINGS AGAINST THE ACCUSED FOR DISOBEYING THE ORDER DATED:27.11.2002 PASSED IN W.P.Nos.36875-36889/2001 (S-RES) C/W W.P.Nos.46251- 46275/2001 & W.P.NO.16232/2002 (S) & W.P.NO.18016- 17/2013 DATED:17.04.2003 (ANNEXURE-A & B)

THESE CCCs ARE COMING ON FOR ORDERS THIS DAY, N.KUMAR J., MADE THE FOLLOWING:-

ORDER

These contempt petitions are filed complaining of disobedience of the Order dated 27.11.2002 passed in W.P. Nos.36875–36888/2001 and other connected matters, wherein a direction was given to the respondents/accused to pay the arrears of amount with interest if the said amount is paid in installments in terms of Clause 5.2 of the Scheme.

From the pleadings filed by the parties, it is not in dispute that all these complainants are paid the amount due under the Voluntary Retirement Scheme [“VRS” for short]. It is also not in dispute that who ever has been paid these benefits of installments, they have also been paid interest in

terms of Clause 5.2 of the Scheme. It is also not in dispute that there is a revision of pay-scale and the entire amount due by virtue of revision of pay-scale has also been paid. Now, the dispute is regarding interest payable on the amount due by way of revision of pay-scale, which has not been paid.

The matter has reached the Supreme Court. In the meanwhile the Company was declared as a Sick Industry and an order came to be passed by the BIFR. In the Supreme Court, the Government of India undertook to deposit Rs.165 crores for disbursement of the same towards arrears of salary to its employees. Accordingly, Rs.165 crores is paid to the Company on 28.11.2014 and the said amount has been disbursed. Now, the grievance of the complainants is in terms of Clause 5.2 of the Scheme, even on the revised amount due under the revision pay-scale, the interest is liable to pay.

The accused have filed counter pointing out that there are in all 5 Schemes, under which the VRS was provided. Therefore, the amount is paid in terms of the

Scheme on the date of acceptance of the voluntary retirement application; the question of payment of interest would not arise. It is only in cases, where the amount agreed to be paid in installments under Clause 5.2 of the Scheme is attracted and in no other cases. In those cases also, the interest is paid on the amount of installments. But, when there is a revision of pay-scale and that the difference amount is also paid, whether that should be paid with interest is a mute question. The scheme formulated do not cover the area. Clause 5.2 of the Scheme would not attract such payment and therefore, there is no liability to pay the said interest. In fact, these questions have not been gone into in the order, which is sought to be enforced in these cases. As there is an order of Hon’ble Supreme Court and an order of the BIFR settling all the claims of the employees and the payment are made in terms of the said order, merely because interest on the difference in pay-scale is not paid, it cannot be said that the respondents/accused have no respect to the Court order and that there is disobedience. In a contempt petition, this question, which is not decided in the proceedings cannot be

gone into. Therefore, we do not see any justification to continue these contempt proceedings. Accordingly, the contempt proceedings are dropped reserving liberty to the complainants to put-forth a claim, so that the same could be considered by a Court of Law and appropriate order could be passed.

Sd/- JUDGE

SS-CT Ksm*

NAGARAJA C S vs. MR K K GUPTA

What did the High Court hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

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