The Supreme Court of India has ruled that a second judge of the same High Court cannot revisit and overturn a prior finding of contempt made by another coordinate bench. The ruling came in a civil appeal filed by Rajan Chadha and Rajiv Chadha challenging the dismissal of their contempt petition against Sanjay Arora by the Delhi High Court.
The Bench comprising Justice B.R. Gavai and Justice Augustine George Masih allowed the appeal filed against the Delhi High Court’s final order dated 3 July 2024 in CONT. CAS(C) No. 75/2021, holding that the subsequent judge had exceeded jurisdiction by reassessing a concluded determination of contempt.
Case Background
The dispute arose out of an MoU executed on 21 December 2019 between the parties regarding the transfer of shares in RBT Private Ltd., a company engaged in dyeing and trading of fabrics. The Appellants, holding a 51.36% stake, had agreed to transfer their shares to the Respondent, who already held a 25% stake. The MoU included provisions for arbitration in case of disputes.
After alleging breach of the MoU by the Respondent—including default in loan repayments, unauthorized use of premises, and asset siphoning—the Appellants initiated arbitration and sought interim protection under Section 9 of the Arbitration and Conciliation Act, 1996. On 11 June 2020, the Delhi High Court appointed a new arbitrator and recorded submissions made on behalf of the Respondent.
Subsequently, the arbitrator on 1 July 2020 directed the Respondent to continue paying EMIs on a loan account, stating that non-payment may result in classification of the account as a Non-Performing Asset, thereby attracting proceedings under the SARFAESI Act, 2002.
Upon continued non-compliance, the Appellants filed a contempt petition in the High Court. On 5 December 2023, a learned Single Judge held the Respondent guilty of contempt, noting:
“I am of the view that respondent No.1 is guilty of intentionally and malafidely violating the orders dated 11.06.2020 and 01.07.2020 and thus, has committed contempt of the orders of the Court.”
The Court granted four weeks’ time to purge the contempt, failing which the Respondent was to show cause against punishment.
Subsequent Developments
Following a change in the roster, the matter came before another learned Single Judge who, in the order dated 3 July 2024, dismissed the contempt petition, holding:
“…it cannot be said that there is any wilful and deliberate disobedience by the respondents of the order passed by this Court and the learned Arbitrator…”
The show cause notice was discharged and the petition dismissed.
Supreme Court’s Observations and Ruling
The Supreme Court noted that once a coordinate bench of the High Court had conclusively held the Respondent guilty of contempt, the only issue left was whether he had purged the contempt or should be punished. The second judge could not have reviewed the prior finding.
Justice Gavai, writing for the Bench, observed:
“When one Judge of the same Court has taken a particular view holding the Respondent to be guilty of contempt, another Judge could not have come to a finding that the Respondent was not guilty of contempt.”
The Court held that such an act amounted to sitting in appeal over a coordinate bench’s judgment and was contrary to judicial propriety.
The Supreme Court quashed the High Court’s judgment dated 3 July 2024 and remitted the matter to be considered afresh from the stage following the 5 December 2023 order. The appeal was accordingly allowed without any order as to costs.
Citation:
Rajan Chadha & Anr. vs Sanjay Arora, Civil Appeal No. ___ of 2025 [Arising out of SLP (C) No. 17013 of 2024]
