Gopal L.Raheja and Anr. Vs Vijay B.Raheja and Ors.

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 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 ORDINARY ORIGINAL CIVIL JURISDICTION

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 NOTICE OF MOTION NO.1327 OF 2006
 IN
 APPEAL NO.334 OF 2005
 IN
 NOTICE OF MOTION NO.3185 OF 2004
 IN

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 SUIT NO.3121 OF 2004

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 Gopal L. Raheja
 & Anr. ..Appellants/
 Orig. Plaintiffs.
 Vs.

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 Vijay B. Raheja
 & Ors. ..Respondents/
 Orig. Defendants.

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 Mr.Aspi Chinoy, Senior Advocate with Mr.Janak
 Dwarkadas, Senior Advocate with Mr.P.K.Samdhani,
 Senior Advocate with Mr.P.K.Shroff with Mr.Subodh
 Joshi with Ms.Radhika Pinzara with Ms.Prachi Khandge
 i/b.M/s.Parimal K. Shroff & Co. for the
 Appellants.

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 Mr.N.H. Seervai, Senior Advocate i/b. M/s.J.Sagar
 Associates, for Respondent Nos. 1 to 4.

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 Mr.I.M.Chagla, Senior Advocate with Mr.Levy Pareira
 with Mr.S.V.Doijode & Ms.Minakshi Iyer
 i/b.M/s.Doijode Associates for Respondent Nos.5 to
 7.

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 Mr.D.J.Khambata, Senior Advocate i/b.M/s.Raval Shah
 & Co. for Respondent No.8.

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 Mr.M.S.Doctor i/b.M/s.S.R.Rawell & Co. for
 Respondent No.9.

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CORAM : DR.S.RADHAKRISHNAN AND

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S.J.VAZIFDAR, JJ.

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DATE OF RESERVING

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THE JUDGMENT : 7TH AUGUST, 2006.
DATE OF PRONOUNCING
THE JUDGMENT : 15TH NOVEMBER, 2006.

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 ORAL JUDGMENT : (Per S.J. Vazifdar, J.)

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 The Appellants are the original Plaintiffs
 and the Respondents are the original Defendants in
 the same order. The Appellants have taken out this
 Notice of Motion in the above Appeal for an order
 striking out the defences of the Respondents under
 Order XXXIX, Rule 11 of the Code of Civil Procedure
 1908, attaching the property of the Respondents and
 for the detention of Respondent Nos.1 to 3 and 6 and
 7 in civil prison under Order XXXIX, Rule 2A of the
 Code of Civil Procedure, 1908. The Appellants have
 also sought an order setting aside and/or declaring
 as null and void the resolutions passed by
 Respondent Nos.5 to 9 dated 27.3.2006 and 31.3.2006
 increasing the authorised share capital of
 Respondent No.5 on the ground that the same were in
 wilful breach of the injunction/restraint orders of
 this Court dated 22.3.2005 and 25.10.2005.

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 2. In a nut shell, the Appellants case is that by
 virtue of the orders dated 22.3.2005 and 25.10.2005
 the Respondents were restrained inter-alia from
 exercising any rights or receiving any benefits in
 respect of the shares held by them in Respondent

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 No.5. Contrary to the orders, by the said

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 resolutions dated 27.3.2006 and 31.3.2006 the
 authorised capital of Respondent No.5 was increased
 from Rs.40 crores to Rs.210 crores and the new
 shares were allotted to Respondent Nos.1 to 3, 8 and
 9. Admittedly, the impugned resolutions were passed
 by the shareholders exercising their rights in
 respect of the shares covered by the injunction.
 The resolutions required the exercise of voting
 rights as while under section 94(1) of the Companies
 Act, a company may increase its share capital by
 issuing new shares, under section 94(2) such powers
 are to be exercised by the company in general
 meeting.

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 3. The resolutions were clearly in violation of the
 said orders which restrained the shareholders of
 Respondent no.5 from exercising any rights in
 respect of their shares. As we shall demonstrate,
 the Respondents in their affidavits did not deny
 that the plain language of the order prohibited such
 an act. Mr.I.M. Chagla, for Respondent Nos.5, 6
 and 7 and Mr.D.J. Khambata and Mr.M.S. Doctor for
 Respondent Nos.8 and 9 respectively, fairly agreed
 that this was so.

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 4. Had the Respondents apologised and offered to
 purge the contempt, we may have let the matter rest
 there. Having accepted that the resolutions were
 passed in breach of the said orders all they had to
 do to establish their bona-fides was to agree to the
 resolutions being revoked, and the issue of the
 shares pursuant thereto being cancelled. They could
 then have made an appropriate application for
 achieving their alleged purpose of raising funds for
 Defendant No.5.

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 5. They however refused to do so. The refusal to
 purge the contempt and the extensive defences taken
 and justification pleaded by the Respondents,
 especially Respondent Nos.1, 2 and 3, of their
 conduct, has complicated an otherwise simple issue,
 burdened this judgment and aggregated the contempt.
 As we shall demonstrate, the nature of defences
 raised especially by Respondent Nos.1 to 4 has
 further aggravated the contempt.

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 6. The Respondents supported each other generally.
 Their approach before us, during the hearing,
 differed in the degree of defiance. While
 Mr.Seervai on behalf of Respondent Nos.1, 2 and 3
 contended that there was no contempt at all and

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 stated that Respondent Nos.1 to 4intended "taking
 the Notice of Motion head-on", the other Respondents
 did not go that far though, they too sought to
 justify their conduct with considerable vehemence.

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The parties :

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 7. The Plaintiffs and Respondent Nos.1 to 3 are in
 control and/or management of and/or concerned with
 various hotels together with each other and/or
 individually. Plaintiff No.1 is the father of
 Plaintiff No.2. Respondent Nos.1 and 2 are the sons
 of the paternal uncle of Plaintiff No.1. Respondent
 No.3 is the son of Respondent No.2. Respondent No.4
 Mont Blanc Hotels Pvt. Ltd., is a company
 registered under the Companies Act, 1956 in which
 Respondent Nos.1 and 3 are directors and Respondent
 Nos.1 and 2 and/or their family members hold the
 entire or the majority shares. Gstaad Hotels Pvt.
 Ltd., is Respondent No.5 and Respondent Nos.6 and 7
 are the directors of Respondent No.5. Respondent
 Nos.8 and 9 are shareholders alongwith Respondent

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 Nos.6 and 7 in Respondent No.5.

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Reliefs claimed in the suit :

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 8. The Appellants filed the suit for a declaration
 that Respondent Nos.1, 2 and/or 6 to 9 hold 50% of
 the shares and 50% of the directorship of Respondent
 No.5 through which Respondent Nos.1 and 2 acquired
 the suit property in March, 2004 in trust for and
 for the account and benefit of the Plaintiffs and/or

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 their nominee and for a decree ordering the
 Respondents to transfer 50% of the issued share
 capital of Respondent No.5 to the Plaintiffs and to
 appoint the Plaintiffs and/or their nominees as 50%
 of the directors on the board of Respondent No.5
 against payment of 50% of the total cost of the
 property. The Appellants also sought a permanent
 injunction restraining the Respondents from dealing
 with, developing, alienating or encumbering the suit
 property, and constructing thereon unless the
 Respondents first transferred to the Plaintiffs 50%
 of the shares of Respondent No.5 and appointed the
 Plaintiffs and/or their nominees as 50% of their
 directors on the board of Respondent No.5.

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Disputes between the parties on merits :

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 9. For the purpose of this Notice of Motion, it is
 necessary to set out the facts pertaining to the
 main dispute only briefly and only with a view to

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 furnish the necessary background before dealing with
 the interim orders passed by this Court and which,
 according to the Appellants, have been violated by
 the Respondents. The merits thereof are not
 relevant for the decision on this Notice of Motion.

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 10(a). The Plaintiffs were interested in starting a
 hotel in Bangalore and were negotiating with United
 Breweries (Holdings) Ltd. (hereinafter referred to
 as UB) for acquisition from them of a three acre
 plot situated in a prime locality in Bangalore.
 Respondent Nos.1 and 2 agreed with the Plaintiffs
 that they would, with a nominee company, bid for and
 acquire from UB the said plot of land and would give
 the Plaintiffs equal shares and directorships in the
 acquiring company and that a five star hotel would
 be constructed and operated on the property by the
 Plaintiffs on the one hand and Respondent Nos.1 to 3
 on the other as partners, with participation by
 M/s.Marriott International. This agreement,
 according to the Appellants, is embodied in and
 evidenced by various documents and, in particular, a
 writing dated 27.9.2003 which reads as under :

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 "Sub: UB City Property of 3 acres
 bearing Khatta No.24 situate at
 the corner of Kasturba Gandhi

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 Marg and Vithal Mallya Road,
 Bangalore.

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 We confirm that we are buying the
 above property in a company called
 Mont Blanc Hotels Pvt. Ltd.
 (Respondent No.4) and to make you a
 partner, we are giving you equal
 shares on the same terms and
 conditions & equal directorship in
 Mont Blanc Hotels Pvt. Ltd. as our
 group holds. Both our groups confirm
 that Marriott shall have equity stake
 in the company. We shall carry out
 the amendments to the Memorandum of
 Article, in 30 days and shall then
 give the equity to you."

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 The document is signed by the Appellants and
 Respondent Nos.1 and 2.

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 (b). According to the Appellants, the entire
 documentation in respect of the transaction was to
 be undertaken by Respondent Nos.1 and 2 in the name
 of Respondent No.4 and that the Appellants would
 remain in the background, pending finalisation of
 the acquisition of the property to minimise the risk
 of other parties giving higher offers for the said
 property if it became known in the market that
 reputed hoteliers such as the parties herein, were
 interested in the said property and to avoid any
 sabotage of the said transaction by one Chandru L.
 Raheja, the brother of Plaintiff No.1, between whom
 relations were strained. Upon acquisition of the

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 property from UB, the hotel project would be owned
 and developed by Respondent No.4 in equal
 partnership as aforesaid.

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 The transaction between the Appellants and
 Respondent Nos.1 to 3 was to be given effect to by
 allotment of shares, appointment of Directors,
 modification of the articles of Respondent No.4 and
 payment within 30 days.

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 (c). In view of the aforesaid agreement, the
 Appellants did not make a separate bid for the
 purchase of the property.

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 (d). An agreement for sale was entered into between
 UB and Respondent No.4 by which Respondent No.4
 agreed to purchase the properties at the price of
 Rs.40.50 Crores of which Rs.11.50 Crores was to be
 paid as an advance. UB executed a power of attorney
 in favour of Respondent No.4 to enable it to apply
 for and obtain permissions necessary for the hotel
 project. The Appellants paid Respondent No.2 a sum
 of Rs.1 Crore in cash towards 50% of their
 consideration of the Rs.2 Crores paid in cash by
 Respondent Nos.1 and 2 to UB in relation to the
 advance consideration of Rs.11.50 Crores.

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 (e). The implementation of the aforesaid
 understanding was delayed allegedly due to
 Respondent Nos.1 and 2 not finalising the same.
 Ultimately, it was agreed that the same would be
 given effect to in early March, 2004. Respondent
 Nos.1 and 2 thereafter failed to proceed as agreed
 and to fulfil their part of the obligations and by
 their letters dated 12.4.2004 and 20.5.2004
 contended that the agreement dated 29.9.2003 between
 Respondent No.4 and UB had been cancelled and
 neither Respondent No.1 nor Respondent No.2 were any
 longer involved in the property.

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 (f). The Appellants contended that, in fact, on
 26.3.2004 Respondent Nos.1 and 2 acting through
 Respondent No.5, completed the purchase of the
 property from UB and that contrary to their
 contention that they were no longer involved with
 the property they were and, they had in fact been
 fully involved in applying for and obtaining
 necessary permissions for construction of the hotel
 through Respondent No.5. Apparently, several draft
 agreements were exchanged between the Appellants and
 Respondent Nos.1 to 3. In support of their
 contention that Respondent No.5 was, in fact,

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 controlled by Respondent Nos.1 to 3, the Appellants
 have relied upon various documents addressed to
 various authorities by Respondent Nos.1 to 3
 purportedly on behalf of Respondent No.5. The
 Appellants have also relied upon the transcript of
 tape-recording of certain meetings. It is not
 necessary to deal with the extensive evidence relied
 upon by the Appellants in support of this
 contention. The same would be relevant to the
 merits of the case and not for the purpose of the
 present Notice of Motion.

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 11(a). Respondent Nos.1 to 3 denied the aforesaid
 contentions. According to them, one of the reasons
 for terminating the agreement between Respondent
 No.4 and UB was that the Appellants had not
 fulfilled their financial obligations in respect of
 the acquisition of the said property. According to
 the Respondents, on 19.1.2004 the agreement between
 Respondent No.4 and UB stood cancelled and on the
 same day an agreement was entered into between UB
 and Respondent No.5 at the same price and on the
 same terms and conditions as the original agreement
 between Respondent No.4 and UB and for the same
 purpose viz. constructing and operating a deluxe
 hotel on the property. The property had thereafter

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 been purportedly acquired by Respondent No.5.
 Thereafter Respondent Nos.1 to 3 ceased to have any
 interest in or connection with the said property and
 the transaction between Respondent No.4 and UB stood
 finally terminated. They contend that they have
 nothing to do with the remaining Respondents.

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 (b). By a letter dated 12.4.2004 Respondent No.1
 stated that it had become impossible to meet the
 time schedule set by UB and Marriott Hotels in the
 absence of funds from the Plaintiffs and that as a
 result thereof Respondent No.1 had withdrawn from
 the project. Respondent No.1 further stated that
 the agreement between Respondent No.4 and UB had
 been terminated by mutual consent.

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 12. To sum up, the Appellant’s case is that
 Respondent Nos.1 and 2 have purported to complete
 the purchase of the property through Respondent No.5
 and have taken the conveyance of the property from
 UB through Respondent No.5 on 26.3.2004; that
 although Respondent Nos.1 and 2 are ostensibly
 neither shareholders nor directors of Respondent
 No.5, and, although the ostensible shareholders and
 directors of Respondent No.5 are Respondent Nos.6 to
 9, the sequence of events and the documents on

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 record establish that Respondent Nos.1 and 2 are
 acting through Respondent No.5 which is the nominee
 of and controlled by Respondent Nos.1 and 2. The
 above stratagem, according to the Appellants, was a
 device with a view to depriving the Plaintiffs of
 the benefit of the said agreement viz. 50% share in
 the property. Respondent Nos.6 to 9 are only
 nominees, acting at the instance of Respondent Nos.1
 and 2 and that the entire design was in breach of
 the fiduciary capacity and duty of Respondent Nos.1
 and 2. The Appellants accordingly contend that the
 Respondents hold 50% of the shares of Respondent
 No.5 in trust and for the benefit and on account of
 the Appellants and/or their nominees and are bound
 in law to transfer 50% of the share of Respondent
 No.5 to them and appoint their nominees as 50% of
 the directors of Respondent No.5.

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Status-quo as on the date of the orders dated
22.3.2005 and 25.10.2005 of which the Respondents

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are alleged to have committed a breach :

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 13. Before referring to the orders, it is necessary
 to set out the status-quo between the parties on the
 date of the orders. These facts are admitted by
 and, in fact, constitute the Respondent’s case.

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 14. The authorised and subscribed capital of
 Respondent No.5 prior to the impugned resolutions
 was Rs.40 crores divided into 4 crore equity shares
 of Rs.10/- each. The issued, subscribed and paid up
 capital of Respondent No.5 was Rs.19,01,00,000
 divided into 1,90,10,000 equity shares. Respondent
 Nos.6 and 7 held 5000 equity shares each.
 Respondent Nos.8 and 9 held 1,65,00,000 and
 25,00,000 equity shares each respectively.

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The proceedings leading to the orders dated
22.3.2005 and 25.10.2005 :

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 15. The suit was filed on 25.10.2004.

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 16(a). The Appellants took out Notice of Motion
 No.3185 of 2004 for various interim reliefs. A
 learned Single Judge passed ad-interim orders dated
 15.12.2004 and 23.12.2004.

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 (b). The Respondents preferred Appeals against the
 said order. Respondent Nos.1 and 2 filed Appeal
 No.10 of 2005, Respondents Nos.5, 6 and 7 filed
 Appeal (L) No.24 of 2005. Respondent No.8 filed
 Appeal No.45 of 2005 and Respondent No.9 filed

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 Appeal (L) No.40 of 2005.

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 (c). By an order dated 17.1.2005 the Division
 Bench, to which one of us (S.J. Vazifdar, J.) was a
 party, admitted and disposed of the Appeals by a
 common order passed with the consent of all the
 parties. The learned Single Judge was requested to
 hear the Notice of Motion expeditiously.

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 17(a). The learned Single Judge finally disposed of
 the Appellant’s said Notice of Motion No.3185 of
 2004 by an order dated 14.3.2005.

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 (b). The above Appeal before us is from that order.
 It was admitted on 22.3.2005. The Division Bench,
 to which one of us (S.J.Vazifdar, J.) was a party,
 passed an ad-interim order dated 22.3.2005, in terms
 of the said order dated 17.1.2005.

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 (c). The Appellants took out Notice of Motion
 No.853 of 2005 in the above Appeal for interim
 orders. This Notice of Motion was finally disposed
 of by the Appeal Court by an order dated 25.10.2005
 passed by the Division Bench, to which one of us
 (Dr.S. Radhakrishnan, J.) was a party. The order
 dated 25.10.2005 expressly continued, pending the

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 hearing and final disposal of the Appeal, the
 ad-interim order dated 22.3.2005.

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 18. In other words, by virtue of the order dated
 25.10.2005 and with effect from that date there
 existed in operation an order in terms of the order
 dated 17.1.2005. The only difference is that,
 whereas, the order dated 17.1.2005 was passed with
 the consent of the parties, the order dated
 25.10.2005 was an order of this Court and not by
 consent of the parties.

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 19. The order dated 17.1.2005 reads as under :

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 "1. All appeals are admitted and
 disposal of by consent.

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 2. By consent the order of the
 learned single Judge is substituted
 with the following order :-

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 i) There shall be an ad-interim
 order in terms of prayer clauses
 (b)(ii) and (iii), except bracketed,
 portion in clause (b), which read as
 follows :-

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 "(b)(ii) : The Defendants,
 their servants and agents be
 restrained by an order and
 injunction of this Hon’ble
 Court from encumbering,
 alienating or parting with
 possession of the said
 property more particularly
 described in Exh. "A" to
 plaint and the construction

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 thereon and/or the rights or
 interest therein.

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 (iii) The Defendants, their
 servants and agents be
 restrained by an order and
 injunction of this Hon’ble
 Court from alienating or
 encumbering the shares of
 Defendant No.5 Company or from
exercising any rights or
receiving any benefits in
respect thereof." (emphasis
 supplied)

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 ii) The Plaintiffs will deposit in
 this court Rs.12.00 Crores within four
 weeks from today. If the amount is
 not deposited within the said period,
 Motion to stand dismissed.

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 iii) Any further development on the
 suit property shall be subject to the
 result of Notice of Motion and the
 counsel of the Appellants agree not to
 claim any equity on account of the
 said development.

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 20. The effect therefore of the aforesaid orders is
 that the parties were bound and liable by the last
 operative order dated 25.10.2005.

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 . Mr.Chinoy submitted that they were also bound
 by the orders and directions of the learned Single
 Judge which is the subject matter of the Appeal as
 the same was neither challenged by the Respondents
 nor stayed by the Appeal Court. Considering the
 view that we have taken it is not necessary to
 decide this point.

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Resolutions dated 27.3.2006 and 31.3.2006 alleged to

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be in contempt of the order dated 25.10.2005 :

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 21. The Appeal reached final hearing before us on
 7.3.2006 but was adjourned. The alleged act of
 contempt took place thereafter i.e. after 7.3.2005
 when an adjournment was sought and granted. Before
 the Appeal reached hearing on the adjourned date,
 Respondent No.5 filed an affidavit dated 5.4.2006
 disclosing the two resolutions which the Appellants
 contend, are in contempt of the orders of this
 Court. It sets out extensively the reasons why the
 Respondents were allegedly constrained to do so. We
 will come to that aspect when we deal with the
 justification pleaded by all counsel appearing on
 behalf of the Respondents. At this juncture, it is
 necessary to examine the resolutions themselves.

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 22(a). An Extra Ordinary General Meeting of the
 shareholders of Respondent No.5 was held on
 27.3.2006. Respondent Nos.6 and 7 attended the

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 meeting as directors and members. Respondent No.6
 was the chairman of the meeting. It was resolved to
 increase the authorised share capital of the company
 from Rs.40 Crores, divided into 4 Crores Equity

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 Shares of Rs.10/- each, to Rs.110 Crores, divided
 into 11 Crores Equity Shares of Rs.10/- each ranking
 pari passu with the existing shares and
 consequential resolutions amending the Articles of
 Association, altering the authorised capital and
 authorising Respondent No.6 to file the necessary
 documents in the matter.

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 (b). The resolution was proposed by Respondent
 No.6, seconded by Respondent No.7 and adopted
 unanimously.

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 23. It is important to note that the resolution
 opens by stating that the same is pursuant to
 section 94 of the Companies Act, 1956. There is no
 dispute about the fact that under section 94 of the
 Companies Act the resolution can only be passed by
 the company/its members. This is done by the
 members exercising their rights in respect of the
 shares held by them. Section 94 in so far as it is
 relevant, reads as under :

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 "94. Power of limited company
to alter its share capital.-(1) A
 limited company having a share
 capital, may, if so authorised by
 its articles, alter the
 conditions of its memorandum as
 follows, that is to say, it may-

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 (a) increase its share capital
 by such amount as it
 thinks expedient by
 issuing new shares;

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 (2) The powers conferred by
 this section shall be exercised
 by the company in general meeting
 and shall not require to be
 confirmed by the Court.

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 24(a). On 31.3.2005 another Extra Ordinary General

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 Meeting of Respondent No.5 was held, which was
 attended by Respondent Nos.1, 2, 6 and one Ms.Avni
 Raheja, the daughter of Respondent No.1. This
 meeting was also chaired by Respondent No.6.
 Respondent No.6 proposed a resolution this time to
 increase the authorised share capital of the company
 from Rs.110 Crores to Rs.210 Crores, divided into 21
 Crore equity shares of Rs.10/- each. Consequential
 resolutions regarding the amendment to the
 Memorandum of Association and authorising Respondent
 No.6 to file necessary documents in the matter were
 also passed.

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 (b). The resolution was proposed by Respondent No.6
 and seconded by Respondent No.1 and was adopted
 unanimously.

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Allotment of shares pursuant to the Resolutions and

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the consequent alteration in the status-quo as
existing on the date of the order :

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 25A. Pursuant to the resolutions the fresh issue
 was allotted as follows :

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 . An aggregate of 7,45,00,000 shares were
 allotted to three companies owned, managed and
 controlled by Respondent Nos.1, 2 and/or 3.
 35,00,000 and 30,00,000 shares were allotted to two
 companies owned, managed and controlled by
 Respondent Nos.8 and 9 respectively.

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 25B. Thus the status quo which existed on the date
 of the order i.e. 25.10.2005 was drastically
 altered by the resolutions and the allotment of
 shares pursuant thereto in two significant respects.
 Firstly, the authorised capital of Respondent No.5
 was increased from Rs.40 Crores to Rs.210 Crores.
 Secondly, Respondent Nos.1 to 4/their group
 companies became shareholders to the extent of about
 74% of the paid up capital of Respondent No.5.

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Respondent’s stand in their Affidavits

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 26. It is pertinent to note that this entire scheme

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 of increase of the authorised share capital was
 negotiated between the Respondents inter-se. We
 will let the first Respondent’s affidavit narrate
 the alleged reasons for the scheme and the scheme
 itself. The same is in paragraphs 4 and 5 of the
 first Respondent’s affidavit dated 5.4.2006 in the
 Appeal. These paragraphs assume importance for more
 than one reason. It would be convenient to set them
 out at this stage. They read as under :

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 "(4) Some time in mid-March,
 2006, Defendant No.6
 representing all the
 shareholders of Defendant No.5
 approached us and informed us
 that they were absolutely fed up
 with this litigation and that
 they had been caught in the
 crossfire between the Plaintiffs
 on the one hand and these
 Defendants on the other, while
 Defendant No.8 had invested huge
 amounts of his family money into
 the Project. Having entered
 into a commercial venture,
 Defendant No.5 and its
 shareholders had never expected
 to become victims of a family
 dispute and family litigation.
 Since the present equity was
 only Rs.19.01 crores as against
 a loan of Rs.64 crores, the debt
 equity ratio was very high, and
 therefore the lenders to the
 Project, HDFC Ltd. were
 insisting on the infusion of the
 required amount of fresh equity
 into the Project, as a condition
 to the continuation of the
 facilities offered by them for
 the Project. In this regard,

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 HDFC addressed a letter dated
 March 20th 2006 to Defendant
 No.5 stating that under any
 circumstances, the equity
 component should be increased
 before the financial year end,
 on March 31, 2006. Hereto
 annexed and markedExhibit "A"
 is a copy of HDFC’s letter. In
 view of the pending litigation,
 Defendant No.5 and its
 shareholders were naturally
 reluctant to infuse such a huge
 amount of further fresh equity
 into the Project through the
 Company. Further, the Marriott
 group of hotels, which was to
 eventually manage the operations
 of the hotel being constructed
 by Defendant No.5, was growing
 uneasy about the status of the
 Project, due to adverse media
 reports and speculation about
 the Project, arising from the
 messy and protracted pending
 litigation. Defendant No.5 knew
 of our existing relationship
 with the Marriott group, and was
 of the opinion that our
 involvement in the Project would
 quell their fears that the
 Project will not reach
 completion."
 "(5) We thereafter negotiated
 that we would reenter the
 Project by acquiring equity
 shares in Defendant No.5
 company. After considerable
 negotiations, we agreed to this
 commercial proposal. It was
 decided that Defendant No.5
 shall make a fresh issue of
 equity shares aggregating to
 8,10,00,000 new equity shares of
 Rs.10/- each ("New Shares").
 New equity amounting to
 Rs.74,50,00,000/- was to be
 issued and allotted to various
 investment companies owned and
 controlled by our family members

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("Companies") and
 Rs.6,50,00,000/- was to be
 allotted to Defendant Nos.8 and
 9 against share application
 monies earlier brought in by
 them. The details of the
 allotment of the New Shares are
 at Exhibit "B" hereto. The
 Companies would subscribe to
 7,45,00,000 New Shares for cash
 which would result in Companies
 holding 74.5% of the paid-up
 equity share capital of
 Defendant No.5 company while
 Defendant No.8 shall hold 20%
 and Defendant No.9 shall hold
 5.5% of the paid-up equity share
 capital of Defendant No.5
 company, respectively. My
 brother, myself, my daughter,
 Avni Raheja, my nephew, Aditya
 Raheja and Mr. Sunil Ahuja of
 Defendant No.8 would be
 appointed as additional
 directors of Defendant No.5
 company looking after the day to
 day affairs and the management
 of the Company while
 guaranteeing certain investor
 protection rights to Defendants
 No.8 and 9. Since Defendants
 No.8 and 9 are to hold more than
 25% of the paid-up equity share
 capital, no special resolution
 can be passed without their
 consent and concurrence. This
 was one of the pre-conditions
 insisted upon by Defendants No.8
 and 9 before allowing us to
 enter the Project."

¶127

 27. In paragraph 6 Respondent No.1 states that it
 is in the light of the above arrangement that the
 fresh allotment as stated above, was made.

¶128

 :25:

¶129

 28. It is not necessary to refer to the affidavits
 filed by the remaining Respondents each of whom
 confirms what is stated in the above affidavit of
 Respondent No.1. Several affidavits in reply and
 rejoinder have also been filed in the above Appeal
 in connection with the aforesaid resolutions. The
 same have been referred to and relied upon by all
 the parties during the hearing of the above Notice
 of Motion. Most of what is stated therein has been
 reiterated in the affidavits filed in the above
 Notice of Motion itself.

¶130

 29. Thus far four things are clear.

¶131

 Firstly, it is clear that by virtue of the
 aforesaid orders of this Court the Respondents were
 expressly restrained, inter-alia, from exercising
 any rights or receiving any benefits in respect of
 the shares.

¶132

 Secondly, as admitted by the remaining
 Respondents, each one of them was aware of the
 aforesaid orders, being parties to the proceedings
 in which they were passed.

¶133

 Thirdly, admittedly, the increase in the

¶134

 :26:

¶135

 authorised share capital of the company was pursuant
 to the exercise of the rights by Respondent Nos.6
 and 7 at the, meetings held on 27.3.2006 and by
 Respondent No.6 at the meeting held on 31.3.2006, by
 passing the resolution increasing the authorised
 share capital.

¶136

 Fourthly, the entire exercise of increasing the
 authorised share capital, allotting the shares
 issued pursuant thereto and the appointment of the
 new directors was carried out not merely with the
 consent but with the express agreement of each of
 the Respondents.

¶137

Submissions at the hearing

¶138

 30. None of the counsel for the Respondents,

¶139

 contended that the aforesaid acts were not contrary
 to the plain or literal language of the order.
 Indeed, the plain/literal language of the order
 establishes beyond a shadow of doubt that the
 resolutions increasing the authorised share capital,
 were contrary to and in violation of the said
 orders. Respondent Nos.1, 2 and 3 in the last
 sentence of paragraph 5 of their respective
 affidavits in reply, in fact, implicitly accept this

¶140

 :27:

¶141

 to be so when they say: "The purpose and intent of
 the said orders therefore requires to be considered
 by this Hon’ble Court and not merely the literal
language of the said orders ". Respondent No.6 on
 behalf of Respondent No.7 and himself has said the
 same thing in almost identical words.

¶142

 31. The stand taken in the affidavits in reply by
 each of the Respondents is similar. They have
 contended in the first instance that there is no
 contempt. They then seek to explain and justify
 their conduct on various grounds. They tender an
 apology in the event of the Court not accepting
 these contentions. But, and this is important,
 there is not even a hint of a desire or an offer to
 purge the contempt. On the contrary, they make it
 quite clear that they ought not to be called upon to
 purge the contempt as that would cause irreparable
 harm to Respondent No.5, its shareholders and the
 project. We will deal with Mr.Chagla’s
 offer/suggestion, the only redeeming feature of the
 Respondent’s case, in its turn, viz. towards the
 end, which is when it was made.

¶143

 32. Before us, Respondent Nos.1 to 4 took an
 aggressively defiant stand contending, on grounds we

¶144

 :28:

¶145

 shall deal with next, that no part of the said

¶146

 actions were in violation of the said orders.
 Counsel for Respondent Nos.5 to 9 took a relatively
 moderate stand. We did not understand any of the
 three counsel appearing for the different sets of
 Respondent Nos.5 to 9 to support the extreme stand
 taken by Respondent Nos.1 to 4. Counsel for
 Respondent Nos.5 to 9 contended that the Respondents
 were mistakenly made to believe that their actions
 would not be in violation of the orders. In view
 thereof, they contended that there was no wilful
 disobedience of the orders. Resisting the Notice of
 Motion their main contention is that no prejudice
 has been caused to the Appellants and that they have
 not benefited by their aforesaid acts.

¶147

Submissions on behalf of Respondent Nos.1 to 4 only:

¶148

 33. We will first deal with those of Mr.Seervai’s
 submissions which the counsel for the other
 Respondents did not adopt.

¶149

 34. Mr.Seervai on behalf of Respondent Nos.1 to 4
 contended in the first instance that the said
 resolutions were not in contempt of the said orders.

¶150

 :29:

¶151

 [A] The steps to his first submission in this regard
 were as follows :-

¶152

 (i). A Court will not interpret an order in such a
 way that it prevents the performance of a statutory
 obligation by any of the parties to the order.

¶153

 (ii). An order must be construed to at least
 exclude from it the discharge of mandatory statutory
 duties. The said order accordingly cannot be
 construed in such a manner that it would operate
 against the shareholders from exercising rights in
 respect of their shares, at least for the purpose of
 discharging their mandatory statutory duties. Thus,
 whatever be the literal interpretation of the order,
 the Court must read it down to exclude certain
 mandatory duties that a company is bound to
 discharge such as the appointment and reappointment
 of auditors and the holding of an Annual General
 Meeting.

¶154

 (iii). Once it is found that an order may also have
 the effect of preventing the performance of a
 statutory duty, the entire order is, to use his
 words, "AT LARGE" and open to interpretation by the
 parties to it. This, he submitted as a proposition

¶155

 :30:

¶156

 of law, would be so, despite the fact that the plain
 language of the order calls for no interpretation as
 such.

¶157

 (iv). Once an order is open to interpretation, a
 litigant is free to interpret it one way or the
 other and act upon such interpretation. In that
 event, such a litigant’s conduct even in respect of
 actions other than those required to be performed by
 statute, cannot constitute contempt even if it is in
 violation of the literal/plain language of the
 order.

¶158

 [B]. The second submission in this regard was that
 the orders are "confusing, unintelligible and
 meaningless." To make them "cogent, meaningful and
 intelligible" the Court must interpret them to
 exclude from their ambit the raising of the
 authorised capital if required for the Hotel
 Project.

¶159

 35. The submissions are not only devoid of
 substance but, aggravate the contempt.

¶160

 36. It is appropriate to preface a consideration of
 Mr.Seervai’s submission by expressing our agreement

¶161

 :31:

¶162

 with two of Mr.Chinoy’s submissions. Firstly, when
 the plain language of an order is clear, it is not
 permissible to look to extraneous circumstances to
 interpret the same. To hold otherwise would enable
 and encourage litigants to flout orders of the Court
 and justify their conduct even if held to be
 contrary to the order, on the ground that what they
 did was on their interpretation of the order. This
 would in many, if not most cases, render orders of
 the Court virtually nugatory.

¶163

 37(a). In Anil Ratan Sarkar & Ors. v. Hirak Ghosh
& Ors., 2002 (4) Supreme Court Cases, 21, the
 Supreme Court while observing that a plain reading
 of the order negated the understanding of the
 Respondent, held :

¶164

 "20. .................................
 ......................................
 Even in the counter-affidavit, filed
 in the contempt petition, the
 understanding still continues - we are
 at a loss as to what is this
 understanding about: the defence of
 "understanding" undoubtedly is an
 ingenious effort to avoid the rigours
 of an order of the court but cannot
 obliterate the action - the attempted
 avoidance through the introduction of
 the so-called concept of lack of
 understanding cannot, however, be a
 permanent avoidance, though there may
 be temporary and short-lived gains.
The order of this Court cannot

¶165

 :32:

¶166

possibly be interpreted as per the
understanding of the respondents, but
as appears from the plain language
used therein. Neither is the order
capable of two several interpretations
nor is there any ambiguity and the
same does not require further clarity.
 The order is categorical and clear in
 its context and meaning. The court’s
 orders are to be observed in its
 observance, rather than in its
 breach." (emphasis supplied)

¶167

 (b). Mr.Seervai sought to distinguish this judgment

¶168

 on the ground that the order was passed after six
 rounds of litigation and was based on the gross
 facts of the case. We are unable to ignore the
 ratio of the Supreme Court on these grounds. The
 ratio is not confined to gross cases. Nor is it
 confined to cases which arise only after several
 rounds of litigation.

¶169

 38. Secondly, equally well founded, we find

¶170

 Mr.Chinoy’s submission that even assuming that there
 was any doubt in the minds of the Respondents, and
 as we shall shortly demonstrate, they admittedly had
 at least a doubt, they ought to have approached the
 Court for a clarification or modification of the
 orders. Mr.Chinoy’s reliance upon the judgments of
 the Supreme Court in this regard is well founded and
 constitute a complete answer to Mr.Seervai’s

¶171

 :33:

¶172

 submissions. As we have demonstrated, in the
 present case, the order is clear. Indeed, on the
 plain language and literal interpretation thereof,
 not merely the counsel before us, but even the
 litigants themselves were of the opinion that what
 they did would be in contravention thereof. At the
 highest, even if they were to be believed,
 Respondent Nos.1 to 4 admittedly considered the
 order susceptible to interpretation. This is
 evident from the fact that they sought legal advice
 - an aspect we will have occasion to deal with
 later. In that event, they ought to have come to
 Court to seek a clarification and not to interpret
 the same in the self-serving manner in which they
 did and, thereby, violate the orders of the Court.
 That this is the course which ought to be adopted in
 such cases, is now well settled.

¶173

 39. In Major General B.M. Bhattacharjee (Retd.) &
Anr. v. Russel Estate Corporation & Anr., (1993) 2
Supreme Court Cases, 533, the Supreme Court in
 paragraph 11 held as under :

¶174

 "11. Mr.Dutta, the learned counsel
 for the respondents contended that the
 second respondent understood the
 allotment in a particular manner and
 that the said misunderstanding, if

¶175

 :34:

¶176

 any, was bona fide. We are not
 prepared to agree. Firstly, there
 could not have been any doubt in the
 mind of respondent with respect to the
 meaning of the order. Secondly,
assuming that he had any doubt
regarding its meaning, the least he
could have done was to ask for a
clarification of the said order. He
 could well have represented that he
 had already entered into an agreement
 of sale on April 26, 1991 in respect
 of these flats and that he may be
 permitted to deliver possession and /
 or execute sale-deeds in respect of
 said flats in favour of third parties.
 He did nothing of the sort. Having
 placed a highly restrictive and
 unwarranted interpretation upon the
 order of this Court, he went ahead and
 not only delivered possession of the
 flats to third parties subsequent to
 the said order but also registered
 sale-deeds in their favour. He thus
 rendered the said order nugatory. It
 was not open to the respondents to
 place a convenient interpretation upon
 the order and proceed to act upon it,
 thereby totally nullifying the order
 of this Court." (emphasis supplied)

¶177

 40. In T.M.A. Pai Foundation & Ors. v. State of
Karnataka & Ors., (1995) 4 Supreme Court Cases, 1,
 the Supreme Court held as follows :

¶178

 "8. One fails to understand how the
 said direction in the order dated
 13-5-1994 could be misunderstood by
 anyone. There was no question of any
 doubt arising as to its meaning nor
 did it call for any interpretation.
 ......................................
 ......................................
 It is thus evident that a doubt was
 sought to be created where there was

¶179

 :35:

¶180

 no room for any doubt. It is equally
 clear that the doubt was inspired by
 the Association of Private Medical and
 Dental Colleges."

¶181

 "9. On a consideration of all the
 relevant facts and circumstances, we
 find no room for a bona fide error on
 the part of the officers concerned,
 viz., ................................
 ......................................
 We are particularly pained by the role
 played by Shri. Mane and Shri. More
 in this matter. They are judicial
 officers of long standing. They have
 decades of judicial experience behind
 them. It is difficult to believe that
 they could make any mistake in
 understanding the orders of this Court
 which are worded in simple and
 unambiguous language. The least they
could have done was to advise the
Government to move this Court for a
clarification."

¶182

 41. In S.K.Samsudin v. Ravikant & Anr., 1997,
Cri.L.J., 1603 where, a learned Single Judge of the
 Calcutta High Court held :

¶183

 "The said order, such as it is,
 appears to be as clear and specific,
 as could be and does not require any
 prescience or perspicacity to
 understand the same. There could,
 therefore, be no scope for any
 confusion in respect thereof. Even
 so, if there was any confusion on the
 part of the Opposite parties in
 respect of the Court’s said order, it
 was open to them to obtain
 clarification from the Court. It was
 certainly not for them to construe or
 interpret the Court’s order, the way
 they liked, as they did by rejecting
 the prayer for grant of petitioner’s

¶184

 :36:

¶185

 permit to him on the grounds stated,
 thus attempting to circumvent the
 Court’s aforesaid order dated
 14-11-95."

¶186

 We are in respectful agreement with the above

¶187

 observations which require a party even in cases
 where there is any confusion, to obtain a
 clarification from the Court and that it is not for
 litigants to construe or interpret the Court’s order
 they way they like and thereby circumvent the effect
 of the orders of the Court.

¶188

 42. Both on principle and on a parity of
 reasoning contained in the judgements we are clearly
 of the opinion that if according to a party an order
 is confusing or unintelligible or meaningless he is
 not entitled to interpret it in such manner as he
 likes and insist thereafter that the court ought to
 accept his interpretation or even that his
 interpretation is a plausible one. In that event a
 party ought to approach the court for a
 clarification.

¶189

 43. With this, we return to Mr.Seervai’s
 submissions. Firstly, there is absolutely no bar to
 a Court granting an injunction restraining a

¶190

 :37:

¶191

 shareholder from exercising rights in respect of
 shares that he claims to own/hold. It happens ever
 so often such as in suits where there is a dispute
 as to the title to shares between the Plaintiffs and
 the Defendants, in rectification applications and in
 proceedings under sections 397, 398 of the Companies
 Act. The Court has the power to restrain the
 parties from exercising all rights in respect of the
 disputed shares. That, by itself, would not prevent
 a company from discharging its statutory obligations
 for there may be other shareholders through whom the
 same may be done.

¶192

 44. We do appreciate that in the present case there
 were only four shareholders viz. Respondent Nos.6
 to 9 and all of them have been restrained from
 exercising their rights in respect of the shares.
 The order certainly prevented them from exercising
 all rights without any qualifications. The proper
 and legal course for Respondent Nos.6 to 9 was to
 have come to Court, seeking a clarification or a
 modification of the order. It is certainly
 conceivable that the Court may have granted such an
 application permitting them to exercise rights in
 respect of the shares, to the limited extent sought
 by the Applicant. That however would have been

¶193

 :38:

¶194

 after hearing all the parties and possibly subject
 to terms and conditions. It is obvious that the
 Respondents did what they did precisely to avoid the
 same and to present the Appellants and the Court
 with a fait-accompli.

¶195

 45. Even assuming that there is some substance in
 Mr.Seervai’s arguments viz. that the order ought
 not to be construed so as to prevent the exercise of
 voting rights to the extent of enabling the company
 to discharge its mandatory statutory obligations,
 the same would not absolve the Respondents of having
 exercised their rights in respect of the said shares
 even otherwise. It was rightly not even
 Mr.Seervai’s contention that there was any statutory
 obligation requiring the increase in the authorised
 share capital. That was a purely voluntary act for
 personal reasons unconnected with the discharge of
 any statutory or other obligations.

¶196

 46. It is realising this difficulty that Mr.Seervai
 adopted the fourth and the fifth steps of his
 argument viz., that once an order is capable of
 being read down by the Court as suggested by him,
 the entire order is "AT LARGE", entitling a litigant
 to interpret it in such manner as he desired fit and

¶197

 :39:

¶198

 to act accordingly. And that once an order even in
 part prevents the discharge of a statutory function,
 the party is absolved from following the order
 altogether even in respect of matters which do not
 require the observance of or compliance with any
 statutory provisions.

¶199

 47. Orders restraining shareholders from exercising
 their rights in respect of their shares are common.
 Anyone who has had anything to do with litigation
 involving disputes regarding shares, knows that.
 The submissions however are novel. We have
 absolutely no hesitation in rejecting them. Not
 surprisingly, our attention was not invited to a
 single judgment where the Court was required to
 consider such submissions. To accept these
 submissions would leave the field wide open to
 litigants to violate the orders of Courts the moment
 it could be demonstrated that the order in a
 hypothetical situation could have the effect of
 preventing the performance of statutory obligations.
 There is no principle of law or equity which
 supports such submissions. To accept the submission
 would be to set at naught innumerable such orders
 which are passed in litigations pertaining to
 shares.

¶200

 :40:

¶201

 48. In support of his submission, Mr.Seervai relied
 upon four judgments. We find not one of them
 relevant to the issue before us.

¶202

 49(a). Firstly, he relied upon the judgment in the
 case of Union of India & Anr. v. Kirloskar
Pneumatic Co. Ltd., (1996) 4 Supreme Court Cases,
453. In that case, the High Court had passed an
 order clause 3 whereof directed that the Union of
 India shall not reject the refund application under
 section 27 of the Customs Act, 1962 on the ground
 that it is time barred. The Appellant challenged
 the validity of this direction. Section 27 of the
 Customs Act provided for an application for refund
 to be within a period of six months from the payment
 of duty except in a case where it has been paid
 under protest. Further, under section 27, a claim
 for refund can be made only in accordance with the
 provisions of section 27. It was submitted on
 behalf of the Respondent that this was a usual order
 passed by the High Court in several matters. The
 Supreme Court held the direction to be contrary to
 law and observed as under :

¶203

 "We do not think it is, even while

¶204

 :41:

¶205

 acting under Article 226 of the
 Constitution. The power conferred by
 Articles 226/227 is designed to
 effectuate the law, to enforce the
 rule of law and to ensure that the
 several authorities and organs of the
 State act in accordance with law. It
 cannot be invoked for directing the
 authorities to act contrary to law.
 In particular, the Customs
 authorities, who are the creatures of
 the Customs Act, cannot be directed to
 ignore or act contrary to Section 27,
 whether before or after amendment.
 May be the High Court or a civil court
 is not bound by the said provisions
 but the authorities under the Act are.
 Nor can there be any question of the
 High Court clothing the authorities
 with its power under Article 226 or
 the power of a civil court. No such
 delegation or conferment can ever be
 conceived. We are, therefore, of the
 opinion that the direction contained
 in clause (3) of the impugned order is
 unsustainable in law."

¶206

 (b). The question before us however, is not the
 validity of the orders of which contempt is alleged.
 We did not understand either Mr.Seervai or any of
 the other counsel to have argued that the order was
 void or even invalid. We are only concerned with
 the question as to whether the orders have been
 violated or not. The Supreme Court was considering
 the question of the validity/legality of the order
 and not the effect of any defiance or violation

¶207

 thereof.

¶208

 :42:

¶209

 (c). None of the counsel for the Respondents
 contended that the said orders are void. It is not
 necessary therefore for us to deal with the
 judgments of the Supreme Court in Tayabbhai M.
Bagasarwalla & Anr. v. Hind Rubber Industries Pvt.
Ltd. etc., AIR 1997 Supreme Court, 1240 relied upon
 by Mr.Chinoy.

¶210

 50(a). Mr.Seervai then relied upon a judgment of
 the Privy Council in Surajmull Nargoremull v.
Triton Insurance Company Limited, 52 IA, 126 (P.C.).
 The judgment was approved by the Supreme Court in
AIR 1959, Supreme Court, 559 which we shall refer to
 next. Mr.Seervai relied upon the following
 observations :

¶211

 "The suggestion may be at once
 dismissed that it is too late now to
 raise the section as an answer to the
 claim. No Court can enforce as valid
 that which competent enactments have
 declared shall not be valid, nor is
 obedience to such an enactment a thing
 from which a Court can be dispensed by
 the consent of the parties, or by a
 failure to plead or to argue the point
 at the outset : Nixon v. Albion
Marine Insurance Co. (1) The
 enactment is prohibitory. It is not
 confined to affording a party a
 protection, of which he may avail
 himself or not as he pleases. It is
 not framed solely for the protection
 of the revenue and to be enforced
 solely at the instance of the revenue

¶212

 :43:

¶213

 officials, nor is the prohibition
 limited to cases for which a penalty
 is exigible."

¶214

 (b). This judgment too is of no assistance in the
 present case. It was contended before the Privy
 Council that the question of law ought not to be
 allowed to be raised before the Privy Council as it
 was not raised before the lower Court. It is in
 this context that the above observations were made.
 We do not see the relevance of this judgment in the
 present case.

¶215

 51(a). In Badri Prasad & Ors. v. Nagarmal & Ors.,
AIR 1959, Supreme Court, 559 it was contended on
 behalf of the Appellant that by reason of section
 (2) of the Rewa State Companies Act, 1935, the cloth
 association was not a legal association because it
 was formed for the purpose of carrying on a business
 which had for its object, the acquisition for gain
 by the independent member thereof and further
 because it was not registered as a company under the
 said Act; nor was it formed in pursuance of its
 Charter from the Durbar. It was contended that by
 reason of the illegality in the contract of
 partnership the members of the partnership had no
 remedy against each other for contribution or

¶216

 :44:

¶217

 apportionment in respect of the partnership dealings
 and transactions and that therefore no suit for
 accounts lay at the instance of the Plaintiffs -
 Appellants. It was contended on behalf of the
 Respondent inter-alia that the preliminary objection
 ought not to be allowed to be raised at this late
 stage before the Supreme Court. Relying upon the
 above judgment of the Privy Council, the Supreme
 Court negated the contention. The Supreme Court
 held that section 42 being prohibitory in nature,
 cannot be excluded from consideration even though
 the bar of this contention had been raised at this
 late stage.

¶218

 (b). We do not see the relevance of this judgment
 either. Mr.Seervai submitted that the judgment was
 relevant only for the purpose of demonstrating that
 a Court will not and cannot pass an illegal order.
 We reiterate that it was not the contention of any
 of the counsel on behalf of the Respondents that the
 said orders were illegal.

¶219

 52(a). Lastly, in this regard, Mr.Seervai relied
 upon the judgment of the Supreme Court in
A.P.Christians Medical Educational Society v.
Government of Andhra Pradesh & Anr., (1986) 2

¶220

 :45:

¶221

Supreme Court Cases, 667. He relied upon the
 following observations in paragraph 10 of the
 judgment :

¶222

 "10. Shri. K.K. Venugopal, learned
 counsel for the students who have been
 admitted into the MBBS course of this
 institution, pleaded that the
 interests of the students should not
 be sacrificed because of the conduct
 or folly of the management and that
 they should be permitted to appear at
 the University examination
 notwithstanding the circumstance that
 permission and affiliation had not
 been granted to the institution. He
 invited our attention to the
 circumstance that students of the
 medical college established by the
 Daru-Salam Educational Trust were
 permitted to appear at the examination
 notwithstanding the fact that
 affiliation had not by then been
 granted by the University. Shri.
 Venugopal suggested that we might
 issue appropriate directions to the
 University to protect the interest of
 the students. We do not think that we
 can possibly accede to the request
 made by Shri. Venugopal on behalf of
 the students. Any direction of the
 nature sought by Shri. Venugopal
 would be in clear transgression of the
 provisions of the University Act and
 the regulations of the University. We
 cannot by our flat direct the
 University to disobey the statute to
 which it owes its existence and the
 regulations made by the University
 itself. We cannot imagine anything
 more destructive of the rule of law
 than a direction by the court to
 disobey the laws."

¶223

 (b). The question before us is not whether the said

¶224

 :46:

¶225

 orders are illegal and require the Respondents to
 disobey the provisions of the Companies Act but
 whether the Respondents had violated the said orders
 or not. The Supreme Court was not considering the
 question of violation of its orders. It would have
 been relevant had the Supreme Court passed the order
 in terms of the directions sought and the same had
 been violated and, in an action for contempt
 thereof, it had been contended that it was not
 necessary for the parties to obey the order of the
 Supreme Court as it required the disobedience of the
 statute. We asked Mr.Seervai whether it would have
 been open to the parties to disobey an order of the
 Supreme Court had it been passed in terms of the
 directions issued by the counsel. We heard no
 answer from him.

¶226

 53. Faced with this, Mr.Seervai submitted that it
 follows as a corollary from the aforesaid four
 authorities that the Courts do not interpret orders
 in such a manner that the compliance thereof would
 lead to their performance of an illegality.

¶227

 We have already dealt with this contention.
 Even assuming this contention to be well founded, in
 the facts of this case it is of no assistance to the

¶228

 :47:

¶229

 Respondents. Their acts complained of are not
 pursuant to any mandatory legal requirements.

¶230

 54. It would be convenient while considering
 Mr.Seervai’s next submission to set out again prayer
 (b)(iii) of the Notice of Motion in terms of which
 the order was passed :-

¶231

 (iii) The Defendants, their
 servants and agents be
 restrained by an order and
 injunction of this Hon’ble
 Court from alienating or
 encumbering the shares of
 Defendant No.5 Company or from
exercising any rights or
receiving any benefits in
respect thereof." (emphasis
 supplied)

¶232

 . Mr.Seervai submitted that the said order in
 so far as it grants prayer (b)(iii) is "confusing,
 unintelligible and meaningless". The Court ought
 therefore to place a purposive interpretation upon
 the order to make it "cogent, intelligible and
 meaningful".

¶233

 According to him, the order properly construed,
 permitted the Respondents, to quote him, "to do all
 incidental acts to effectuate the purpose of
 development".

¶234

 :48:

¶235

 55. Mr.Seervai sought to support this submission on
 the ground that in prayer b(ii) the Appellant had
 sought an order restraining the Respondents even
 from developing the property. The Court however in
 the said order deleted the word "developing". He
 submitted therefore that the Respondents were
 entitled to do anything whatsoever if the same was
 for the purpose of development of the property. He
 submitted that to make the order intelligible and
 meaningful it would be necessary to rewrite the same
 to read, and we quote him verbatim, thus :

¶236

 "Defendants are restrained from
 exercising any rights in respect
 of the shares except if it is for
 the purpose of development"

¶237

 . We are, to put it mildly, unable to agree.
 The submission is contrived and dishonest as we will
 now demonstrate.

¶238

 56(a). The final operative order dated 25.10.2005
 was, in fact, in the same terms as the earlier order
 passed with the consent of the parties on 17.1.2005.
 The order dated 17.1.2005 was passed with the
 consent and in the presence of counsel and

¶239

 :49:

¶240

 solicitors appearing for all the parties. Four
 separate sets of counsel and solicitors appeared for
 and represented the Respondents. Even more
 significant is the fact that the same counsel
 instructed by the same solicitors, appeared on
 behalf of Respondent Nos.1 to 4 on 17.1.2005,
 22.3.2005 and 25.10.2005 when the same order was
 passed. On 17.1.2005 they consented to the order.

¶241

 (b). It was not contended that Respondent Nos.1 to
 4, their counsel and solicitors did not apply their
 minds before consenting to the order. Nor did
 Respondent Nos.1 to 4 state when they found/realised
 the orders to be confusing, meaningless and
 unintelligible.

¶242

 (c). If the orders were confusing, unintelligible
 and meaningless, as contended by Mr.Seervai, we
 would have expected the same to have occurred to at
 least one of the parties during the last eighteen
 months.

¶243

 57. Indeed, the affidavits filed by the Respondents
 did not seek to support the conduct on this ground.
 We did not hear either Mr.Chagla or Mr.Khambata or
 Mr.Doctor to support Mr.Seervai in this contention.

¶244

 :50:

¶245

 The reason is simple. The orders were in fact
 clear. Every counsel, every solicitor and every
 party before us considered the orders to be clear.
 Mr.Seervai’s argument must be rejected as an after
 thought. The "confusion" is contrived in an
 endeavour to justify the otherwise indefensible
 conduct.

¶246

 58. In fact, this submission of Mr.Seervai’s makes
 matters worse for Respondent Nos.1 to 4 for if,
 according to them, the orders were confusing,
 unintelligible and meaningless, they ought to have
 come to Court for a clarification or a modification
 thereof instead of taking it upon themselves to
 interpret the orders to make them cogent,
 intelligible and meaningful. It is not permissible
 for parties to rewrite orders of the Court in their
 minds to make them "cogent, intelligible and
 meaningful" and to act in accordance with such
 re-written orders.

¶247

 59. The submission, as we have stated earlier, was
 based on the ground that in prayer b(ii) the
 Appellant had sought an order restraining the
 Respondents even from developing the property. The
 Court however in the said order deleted the word

¶248

 :51:

¶249

 "developing".

¶250

 60. The argument needs only to be stated to be
 rejected. It must be noted that prayer (b)(ii)
 pertains to the property viz. the said land
 purchased from UB, whereas prayer (b)(iii) pertains
 to the shares of Respondent No.5.

¶251

 61. If this argument were to be accepted, it would
 entitle the Respondents to violate the entire order
 in every respect and justify the same by contending
 that the same was for the development of the
 property. If the argument were to be accepted, the
 Respondents would be entitled to alienate and
 encumber their shares though they were expressly
 forbidden to do so, so long as the alienation or
 encumbrance was for the development of the property.
 For instance, the Respondents could encumber the
 shares by pledging them to secure a loan for the
 development of the property. In the event of
 default the pledgee could sell the shares to another
 third party thereby altering the entire status quo
 sought to be preserved by the said orders.

¶252

 62. Mr.Seervai agreed that the same could not be
 done. He, however, stated that this was because the

¶253

 :52:

¶254

 words "alienating" and/or "encumbering" were
 specific restraints whereas the restraint, in so far
 as it related to exercising any rights in respect of
 the shares was vague. We fail to understand what is
 vague about the expression. It is plain, clear and
 in simple English.

¶255

 63. In fact, Respondent No.1 in paragraph 7 of his
 affidavit in reply has gone even further contending
 as follows :

¶256

 "7. I say that from the consent
 order dated 17th January 2005, it
 is clear that the parties had
 agreed that Respondent No.5
 Company and its shareholders were
 to continue to operate so as to
 develop the property described in
 Exhibit "A" to the Plaint and
 continue with the construction
 thereon and the operation of the
 Company but were not to part with
 possession of the said property
 of the existing shares held by
 the shareholders of Respondent
 No.5 Company. I respectfully say
 and submit that it was always
 understood by me that the order
 obtained by consent of parties on
 17th January, 2005 was not to
 hamper progress of the
 development work in any manner.
 I say that I bona fide believed
 that the actions taken at the
 meetings on 27th March 2006 and
 31st March 2006, which were taken
 to keep the hotel project alive
 and continue the development, did
 not amount to a breach of the
 order dated 17th January 2005."

¶257

 :53:

¶258

 64. Mr.Seervai admitted that this was in fact too
 wide an interpretation and attributed the same to
 poor drafting. We are unable to agree. The parties
 themselves have not said so anywhere. The
 Respondents appear to have adopted a totally
 convoluted line of reasoning in order to justify
 their conduct.

¶259

 65. The answer to this contention is obvious. The
 Respondents were not restrained from the developing
 the property. They were free to do so but they were
 not free to do so in any manner that they desired.
 They were free to do so in any manner except as
 prohibited by the said orders. They were not free
 to do so in violation of the said orders. For
 instance, they were free to arrange loans for the
 said purpose. Nothing prevented them from doing so.

¶260

 66. Mr.Seervai submitted that Respondent Nos.1, 2
 and 3 had taken legal advice before accepting the
 allotment of the said shares. The same is mentioned
 in paragraph 10 of the first Respondent’s affidavit
 in reply.

¶261

 :54:

¶262

 67. We analysed the paragraphs carefully. Nowhere
 has it been stated that Respondent Nos.1, 2 and 3
 sought advice regarding the actual resolutions
 increasing the authorised capital. In fact,
 Mr.Seervai stated that the paragraphs have been very
 carefully drafted to say exactly that viz. that the
 advice sought by Respondent Nos.1, 2 and 3 and the
 advise given to them was only with respect to the
 actual allotment of the shares and not as to whether
 the exercise of voting rights for the increase in
 the share capital, was in violation of the order or
 not.

¶263

 68. Firstly, we find it extremely difficult to
 believe that Respondent Nos.1, 2 and 3 sought such
 compartmentalised and restricted advice viz. only
 regarding the allotment. To us, it seems obvious
 that they must have sought advice regarding the
 entire transaction including whether the act of
 exercising rights in respect of the original shares
 to increase the authorised capital would be in
 violation of the order or not. This is indicated by
 the fact that the advise was sought in February,
 2006 i.e. much before the resolutions dated
 27.3.2006 and 31.3.2006 increasing the authorised
 capital.

¶264

 :55:

¶265

 69. Here we see a silver lining. The legal

¶266

 advisers have neither stated nor permitted
 Respondent Nos.1, 2 and 3 to state that they advised
 that the said act would not be in breach of the said
 order. We appreciate their upholding the tradition
 of the bar in refusing to lend their names to or to
 endorse such patently contumacious acts.

¶267

 70. Finally, Mr.Seervai submitted that if none of
 these arguments appeal to us he would be willing to
 tender an apology. A little too late and very
 grudgingly, we think, came this apology. Moreover,
 there was not even an offer to purge the contempt.
 The apology then is meaningless.

¶268

Submissions on behalf of all the Respondents :

¶269

 71. This brings us to a consideration of the
 following submissions made on behalf of the other
 Respondents which were also adopted on behalf of
 Respondent Nos.1 to 4 :-

¶270

 i) The Respondents bona-fide misinterpreted the
 order.

¶271

 :56:

¶272

 ii) The Respondents were unable to make an
 application for clarification or modification
 of the order due to paucity of time.

¶273

 iii) The Respondents have not derived any benefit
 by their acts.

¶274

 iv) The Appellants have not suffered any
 prejudice by the Respondents acts.

¶275

 v) The Respondents were not bound by the orders,

¶276

 as they were inoperative in view of the
 Appellants not having complied with the
 provisions of Rule 148 of the Bombay High
 Court (Original Side) Rules, 1980.

¶277

 vi) Respondent Nos.8 and 9 cannot be held to have

¶278

 committed contempt of the orders as they had
 not attended the meetings at which the
 impugned resolutions were passed.

¶279

 i) The Respondents bona-fide misinterpreted the

¶280

order :

¶281

 72. Mr.Chagla did not, on behalf of Respondent
 Nos.5, 6 and 7, adopt the stand thus far taken by

¶282

 :57:

¶283

 Respondent Nos.1 to 4. He, however, sought to
 explain why the Respondents did what they did.
 Mr.Chagla did not contend, that the omission of the
 word "development" in prayer b(ii) established the
 interpretation of the order, as contended by
 Mr.Seervai viz. that the Respondents were thereby
 entitled to exercise rights in respect of the
 shares, in the manner in which they did. What
 Mr.Chagla suggested was that it was for this reason
 that Respondent Nos.5, 6 and 7 mistakenly presumed
 that they were entitled to do what they did.

¶284

 73. It is difficult to accept this explanation. It
 is inherently improbable that any of the Respondents
 genuinely believed that their acts were not contrary
 to the order in letter or in sprit. The Respondents
 are all seasoned businessmen. They are seasoned
 litigants. They have the benefit of a galaxy of
 counsel and solicitors. The orders had been in
 operation for over a year when the resolutions were
 passed. Legal advice was in fact sought,
 admittedly, by Respondent Nos.1, 2 and 3. The
 entire scheme/arrangement was agreed to between all
 the Respondents. Not one of the legal advisers
 endorsed the arrangement stating that it would not
 be contrary to the said order.

¶285

 :58:

¶286

 74. There is another fact that belies this
 contention. If the Respondents were genuinely of
 the view that the resolutions were not in breach of
 the said orders, one wonders why they filed
 affidavits on 5.4.2006 in this Court disclosing the
 details thereof. The tenor of the affidavit makes
 it clear that the information was furnished therein
 because the Respondents were well aware of the fact
 that the Appellants would sooner rather than later
 discover the entire scheme. It is also clear to us
 that the Respondents were aware of the fact that
 their actions were in violation of the said orders.
 If they were not so aware, there was no need for
 them to have filed these affidavits.

¶287

 75. If there is any doubt left, it is removed by a
 reference to paragraph 9 of the affidavit of
 Respondent No.1 dated 5.4.2006 in which he offers an
 undertaking as follows :

¶288

 "(9) Until further orders of
 this Hon’ble Court in the matter,
 my brother and I undertake to
 this Hon’ble Court to ensure that
 the Companies shall hold the New
 Shares in terms of the existing
 order relating to the shares held
 by Defendant Nos.6, 7, 8 and 9
 and/or as may be directed by the

¶289

 :59:

¶290

 Hon’ble Court and my brother and
 I shall file undertakings in this
 Hon’ble Court to the said effect.
 I will ensure that the Companies
 will file undertakings in this
 Hon’ble Court within such time
 and in such terms as may be
 directed by this Hon’ble Court."

¶291

 If, according to the Respondents, the said
 orders did not prevent the concerned Respondents
 from exercising their rights in respect of the said
 shares for the purpose of raising the authorised
 capital of Respondent No.5, where was the question
 of their offering any undertaking as above. This is
 a clear indication that the Respondents are guilty
 of wilful breach of the said orders.

¶292

 76. Mr.Chagla submitted that the parties were aware
 that the project was to be financed not merely by
 debt but by equity as well. He relied upon the
 feasibility report which indicated the same.

¶293

 77. This could not possibly exempt the Respondents
 from obeying the orders of this Court. Merely
 because the parties had initially contemplated
 financing the project by equity as well as by debt,
 even presuming that the financing for the project
 ran into difficulty on account of the said orders,

¶294

 :60:

¶295

 it would make no difference whatever. The order
 prohibited the Respondents in a particular manner.
 If the same caused difficulty, it was open to the
 Respondents to challenge the same. It was open for
 them alternatively to seek a modification of the
 order. It was open to them to seek a clarification
 of the orders. It was open for them to make an
 application to have the order set aside. It was
 however not open to them to ignore the orders, which
 is exactly what they have done.

¶296

 It would be useful to refer to the following
 observations of the Supreme Court in Prithavi Nath
Ram v. State of Jharkhand (2004) 7 Supreme Court
Cases, 261 :

¶297

 "8. If any party concerned is
 aggrieved by the order which in its
 opinion is wrong or against rules or
 its implementation is neither
 practicable nor feasible, it should
 always either approach the court that
 passed the order or invoke
 jurisdiction of the appellate court.
 Rightness or wrongness of the order
 cannot be urged in contempt
 proceedings. Right or wrong, the
 order has to be obeyed. Flouting an
 order of the court would render the
 party liable for contempt. While
 dealing with an application for
 contempt the court cannot traverse
 beyond the order, non-compliance with
 which is alleged. In other words, it
 cannot say what should not have been

¶298

 :61:

¶299

 done or what should have been done.
 It cannot traverse beyond the order.
 It cannot test correctness or
 otherwise of the order or give
 additional direction or delete any
 direction. That would be exercising
 review jurisdiction while dealing with
 an application for initiation of
 contempt proceedings. The same would
 be impermissible and indefensible. In
 that view of the matter, the order of
 the High Court is set aside and the
 matter is remitted for fresh
 consideration. It shall deal with the
 application in its proper perspective
 in accordance with law afresh. We
 make it clear that we have not
 expressed any opinion regarding
 acceptability or otherwise of the
 application for initiation of contempt
 proceedings."

¶300

 78. It is quite apparent that the Respondents
 entered into the said scheme/arrangement fully aware
 that it was contrary to the said order. They did so
 confident in their presumption that once they had
 invested an amount of Rs.100 Crores, no Court would
 ever turn the clock back. They did so to present
 the Court with a fait-accompli.

¶301

 ii) The Respondents were unable to make an
application for clarification or modification
of the order due to paucity of time :

¶302

 79. We asked Mr.Chagla why, if Respondent Nos.5, 6
 and 7 had any doubts as to the purport of the order,

¶303

 :62:

¶304

 they did not approach the Court for a clarification.
 Mr.Chagla fairly stated that they ought to have done
 so. But, he offered an explanation for their not
 having done so. The explanation he offered was, in
 fact, the one contained in the affidavit of
 Respondent No.6. Relying upon paragraph 9 of an
 affidavit dated 25.4.2006 filed by Respondent No.6
 in the Notice of Motion, he submitted that the
 resolutions were required to be passed in such haste
 due to the requirements of HDFC. It is now
 established that this portion of the affidavit of
 Respondent No.6 is not merely incorrect but false
 and made with the specific intention of raising the
 very plea presently under consideration.

¶305

 80(a). As we are of the view that these averments
 were calculated to mislead, it is necessary that we
 set them out verbatim. They read as follows :-

¶306

 "9. .............................
 When the hearing of the above
 Appeal was adjourned on 3rd
 March, 2006 to 12th April, 2006,
 HDFC Limited, which is the lender
 to the project, had not
 threatened to recall its loan
 facility. Subsequently, HDFC
 started putting immense pressure
 on Respondent No.5 and finally by
 its letter dated 20th March, 2006
 required Respondent No.5 to raise
 the equity share capital in the

¶307

 :63:

¶308

 Company latest by 31st March,
 2006 failing which, HDFC Limited
 threatened to recall the Line of
 Credit loan facility of Rs.64
 crores granted to finance the
 Company’s hotel project. I say
 that there was, therefore, no
 option but to act quickly within
 the short time available with the
 shareholders and management of
 Respondent No.5. ..............."

¶309

 (b). It is important to note here that supporting
 Mr.Chagla in this regard, Mr.Seervai, in turn,
 relied upon paragraph 4 of the first Respondent’s
 affidavit dated 5.4.2006, which we extracted
 earlier. In paragraph 4 it is stated that the
 shareholders of Respondent No.5 approached
 Respondent Nos.1 to 3 "some time in mid-March 2006"
 expressing their concern about the future of the
 project in view of the litigation. It is further
 stated that HDFC by its letter dated 20.3.2006
 insisted upon the increase in equity by 31.3.2006.

¶310

 In paragraph 5, Respondent No.1 states :

¶311

 "(5)We thereafternegotiated that
 we would reenter the Project by
 acquiring equity shares in
 Defendant No.5 company. After
 considerable negotiations, we
 agreed to this commercial
 proposal."

¶312

 :64:

¶313

 81. A conjoint reading of the above extracts from
 the two affidavits was relied upon to contend that
 it was in mid-March 2006 that Respondent No.6
 approached Respondent No.1 and that the negotiations
 took place thereafter.

¶314

 82. In fact, this aspect was emphasised by all the
 learned counsel appearing on behalf of the
 Respondents while answering our query as to why they
 did not seek permission from the Court for
 increasing the share capital. They specifically
 relied upon the letter dated 20.3.2006 addressed by
 the HDFC and the above affidavits to contend that
 there was no time to do so.

¶315

 83. The case regarding paucity of time to approach
 this Court for a clarification, is belied by more
 than one factor.

¶316

 84. Firstly, and this is most serious, the
 explanation is in fact false and, now demonstrated
 to be false. Respondent Nos.1 and 2 in paragraph 10
 of their affidavit in reply dated 25.4.2006 filed in
 the Notice of Motion, probably forgetting what they
 stated in paragraph 5 of their earlier affidavit
 dated 5.4.2006 (extracted above), have stated as

¶317

 :65:

¶318

 under :-

¶319

 "10. I say that at the end of
February, 2006, i.e. prior to
 the Extra Ordinary General
 Meeting of 27th March, 2006, at
 which Extra Ordinary General
 Meeting the authorised share
 capital of Respondent No.5 was
 raised, I (together with
 Respondent No.2) specifically
 sought legal advice. The legal
 advice we sought was as to
 whether the allotment of shares
 to us, or to our family members,
 or to our family companies, by
 the Board of Directors of
 Respondent No.5, consequent upon
the proposed increase in the
 authorized capital of Respondent
 No.5, (hereinafter, referred to
 as "allotment") would constitute
 a breach of the said orders of
 this Hon’ble Court; .............
 ................................"

¶320

 85. It is thus clear that this entire scheme was
 thought of, discussed, negotiated and decided to be
 implemented at prior to end-February, 2006. The
 suggestion before us that it was upon receipt of
 HDFC’s letter dated 20.3.2006 is clearly false.
 Admittedly, the legal advise sought at the end of
 February, 2006 pertained to the proposed increase in
 the authorised capital of Respondent No.5. Thus, by
 the end of February, the increase was already
 proposed. The case of paucity of time is false.

¶321

 :66:

¶322

 86. When we put this to Mr.Seervai, who,
 incidentally addressed us after Mr.Chagla, he
 admitted this to be serious and stated that he would
 revert after considering this aspect. We heard
 nothing from him thereafter. Nor did we hear
 anything from Mr.Chagla in this regard thereafter.
 Neither Mr.Khambata nor Mr.Doctor who argued after
 Mr.Seervai, on behalf of Respondent Nos.8 and 9
 respectively offered any explanation.

¶323

 87. These averments, we are constrained to say, are
 not merely incorrect, but false. They have been
 made with a clear intention of misleading the Court
 into believing that the Respondents were unable to
 approach the Court earlier due to paucity of time.

¶324

 88. Secondly, we reject the argument that the
 letter dated 20.3.2006 justified the Respondents
 acting in breach of the said order or that the same
 did not permit them enough time to seek the
 permission of the Court to do so. The resolutions
 were passed only on 27.3.2006 and 31.3.2006.
 Nothing prevented them from coming to Court between
 20.3.2006 and 27.3.2006.

¶325

 89. The Respondents have not contended that upon

¶326

 :67:

¶327

 receipt of the letter dated 20.3.2006 from HDFC they
 requested HDFC to wait for only a few days to enable
 them to seek a clarification from this Court. HDFC
 is one of the most respected financial institutions
 of this country. There is nothing to suggest that
 had such a request been made by the Respondents,
 HDFC would not have extended the alleged deadline.

¶328

 90. We hasten to add that even if the HDFC had
 refused to accede to such a request, it would not
 have justified the Respondents violating the said
 order. What we have stated is only to demonstrate
 the inherent improbability of the Respondent’s
 defence regarding paucity of time.

¶329

 91. The contention that the Respondents were unable
 to approach this Court to seek a clarification
 and/or a modification of the said orders due to
 paucity of time as a result of HDFC’s alleged
 insistence, is rejected both in principle and on
 facts.

¶330

 iii) The Respondents have not derived any benefit
by their acts :

¶331

 92. It was then contended by all the counsel on

¶332

 :68:

¶333

 behalf of the Respondents that the increase in the
 share capital and the consequent allotment of the
 additional shares conferred no benefit or advantage
 to their respective clients. They submitted that
 the issuance of shares was solely with a view to
 comply with HDFC’s requirement of maintaining a debt
 equity ratio and that the Respondents did not
 propose deriving any benefit by virtue of the
 allotment of the said shares.

¶334

 93. The submission is demonstrably unfounded.

¶335

 Respondent No.5 itself obviously derived
 benefit by having received a sum of
 Rs.81,50,00,000/- pursuant to the impugned

¶336

 resolutions passed contrary to, and in violation of
 the injunction. Nothing more need be said regarding
 the benefit to Respondent No.5.

¶337

 94. It cannot be contended by any stretch of
 imagination that Respondent Nos.1, 2, 3, 8 and
 9/their group / associate companies, did not derive
 any benefit by having received 81,50,000 shares and
 Directorship/control of Respondent No.5 in breach of
 the injunction. They cannot possibly be heard to
 say that they did not benefit thereby, in commercial

¶338

 :69:

¶339

 terms. They quite obviously did.

¶340

 95. The zeal with which they defended their action
 and their reluctance to purge the contempt, itself
 establishes the same. If they indeed have not
 derived any benefit, why is there such reluctance on
 their part to annul the entire process. The answer
 is obvious. The Respondents have derived enormous
 benefit by the allotment of the said shares.

¶341

 96. Admittedly, the allotment of shares was part of
 a composite deal. In consideration of Respondent
 Nos.1 to 3 subscribing to the shares they were to be
 placed in management of Respondent No.5. Respondent
 No.6 in paragraph 4 of his affidavit dated 10.4.2006
 in the Appeal, stated thus :

¶342

 "In the aforesaid circumstances
 more particularly described in
 the affidavit of Respondent No.8
 dated April 5th, 2006, I was
 constrained to approach
 Respondent No.1 with the proposal
 to invest in the Hotel Project.
 After the new shares have been
 issued, the new directors have
 started to manage the affairs of
 Respondent No.5 and to look after
 the Hotel Project. The lenders
 to the Hotel Project have been
 informed of their appointment and
 the infusion of the required
 amount of equity."

¶343

 :70:

¶344

 The value of being in management does not

¶345

 require any elaboration. We see no reason why we
 ought to presume in favour of the Respondents that
 they derived no benefit by having been allotted the
 said shares. The benefit is too obvious to require
 any explanation.

¶346

 97. What makes matters worse is that in the

¶347

 affidavit filed by the Respondents, not once has
 there been an offer to purge the contempt. In fact,
 a positive stand is taken that even if the Court
 comes to the conclusion that there has been a
 violation of the order, the Respondents ought not to
 be called upon to purge the contempt as that would
 not be in the larger interest of Respondent No.5,
 its shareholders and the project. This is clear
 inter-alia from paragraph 12 of the affidavit in
 reply filed by Respondent No.6 in the above Notice
 of Motion and paragraph 4 of his affidavit dated
 10.4.2006 filed in the Appeal.

¶348

 iv) The Appellants have not suffered any
prejudice by the Respondents acts :

¶349

 98. On behalf of the Respondents, it was also

¶350

 :71:

¶351

 submitted that in any event, no prejudice was caused
 to the Appellant by the Respondent’s said acts.
 This contention was based on several grounds. It
 was submitted that the Appellants, in any event,
 were not in management. Therefore, the increase in
 the authorised capital would not prejudice the
 Appellant’s rights to jointly exploit the project if
 the Appellants were to finally succeed in the Appeal
 or in the suit. Secondly, the Appellants would in
 fact be benefited by the said acts of the
 Respondents as the Respondents had invested about
 Rs.81 Crores and obtained further funds of Rs.64
 Crores from the HDFC Bank. The project was
 therefore kept alive and in the event of the
 Appellants succeeding in the Appeal or in the suit,
 they would be entitled to walk in at the price of
 only the face value of the shares. The shares they
 submitted would abide by the result of the suit.
 Lastly, it was submitted that, in fact, it is the
 Respondents who have been prejudiced as it is they
 who have invested about Rs.81 Crores and offered
 that the newly allotted shares would also abide by
 the same restraint order qua the original shares.

¶352

 99. Mr.Chinoy submitted that prejudice to the
 Appellant/Plaintiff is inherent in a

¶353

 :72:

¶354

 restraint/prohibitory order granted in his favour
 being violated by the contemnor. An injunction is
 granted by a court to protect the rights and
 interests of the Plaintiff/Applicant. The question
 of benefit and prejudice is dealt with and exhausted
 once the Court makes a restraint/prohibitory order.

¶355

 100. The submission is well founded upto the stage
 of the order. It is axiomatic that an injunction is
 granted to prevent the prejudice which the Court
 believes that a party is likely to face. In other
 words, the Court grants an injunction to ensure that
 a party does not face prejudice or harm in the
 absence of such an order being passed.

¶356

 101. Mr.Chinoy further submitted that a contemnor
 cannot violate a restraint/prohibitory order and
 when faced with action for disobedience/contempt,
 require the Contempt/enforcement Court to consider
 aliunde whether a benefit has accrued to him from
 the breach, or contend that no prejudice had been
 suffered by the Plaintiff/Applicant by such breach.
 Issues of benefit and prejudice are subsumed by the
 earlier restraint order. The Contempt/enforcement
 Court has to act only in the context of the order
 already made (and which has been violated) - not

¶357

 :73:

¶358

 aliunde. The Contempt/enforcement Court cannot be
 asked to consider aliunde whether justice is served
 by enforcing the order, or whether breach of the
 order would cause prejudice.

¶359

 102. It is difficult to accept this submission as
 an absolute proposition of law. There may arise
 various situations in which despite the breach of an
 order the Court may, considering the facts and
 circumstances of the case as well as the nature and
 consequences of the breach, refrain from taking
 action for contempt thereof.

¶360

 103. For instance, in an application for attachment
 before judgment under Order XXXVIII Rule 5 of the
 C.P.C., the Court may instead of attaching the
 Respondent’s property, merely restrain the
 Respondents from selling or disposing of a
 particular asset. If, despite the same, the
 Respondent sells the property, it would undoubtedly
 be a breach of the order and the Respondent would be
 liable for contempt. However, the Court may well
 refrain from taking any action against him in
 certain circumstances. If, for instance, the suit
 in which the order had been passed, was only to
 recover money and the Respondent had sold the said

¶361

 :74:

¶362

 property for an amount higher than the amount
 claimed in the suit and tendered the suit claim in
 Court the Court would not be bound to take action
 against him for contempt if it came to the
 conclusion that the sale was in fact for the purpose
 of securing or satisfying the claim in suit, the
 facts and circumstances warranted the immediate sale
 of the property and that the sale was not to
 overreach the Court or its orders.

¶363

 104. We are unable to agree with Mr.Chinoy that the
 Court has no power or jurisdiction to consider the
 nature of the breach in contempt proceedings even on
 the question of prejudice. We hasten to add that we
 do not wish to be understood as saying that the
 moment absence of prejudice is shown, the party
 would be absolved of having committed a breach of
 the order. It would depend on the facts and
 circumstances of each case.

¶364

 105. Having said that, we must add that the burden
 would lie very heavily upon the party in breach of
 the order, to establish that no action ought to be
 taken against it for this reason. The presumption
 always must be that the violation of the order is to
 the prejudice of the party in whose favour it is

¶365

 :75:

¶366

 passed and, for the benefit of the party against
 whom it was passed.

¶367

 106. Further, the case must be so clear that it
 would be apparent without any detailed investigation
 that the contemnor has not derived any benefit or
 that the other party has suffered no prejudice.
 This is but a logical sequitur of the principle that
 orders of the court must be observed and it is only
 in rare case that such defences may be entertained.
 It is not open to a party to commit contempt of the
 orders of the court and then expect the court to
 involve itself in a detailed investigation as to
 whether or not prejudice has been caused to the
 party in whose favour the order has been passed. To
 hold otherwise would leave the field wide open for
 parties to disobey the orders of the court. It
 would be detrimental to the rule of the law and to
 the sanctity of the orders of the court.

¶368

 107. In this matter the Respondents have not made
 out any such case. They however contended that the
 absence of prejudice is evident from various
 factors.

¶369

 108. Firstly they submitted that the Respondents

¶370

 :76:

¶371

 had while bringing the facts pertaining to the said
 resolutions to the notice of the court by their
 affidavits dated 05.04.2006 stated that the new
 equity shares would be held by the respective
 Respondents in terms of the order dated 25.10.2005
 and the interests of the appellants are thereby
 protected.

¶372

 109. This is rather presumptuous on the part of
 the Respondents. The rights of the parties are
 protected by the court. Once the court protects the
 interests of the parties in a particular manner, it
 is not open to the other party to act contrary to
 the order and then justify its action by purporting
 to secure the interest of the party in whose favour
 the order was passed in such manner as it deems fit.
 This is the jurisdiction of the court. No litigant,
 whoever he may be, is entitled to usurp it, which is
 what the Respondents have done. Had an application
 been made to court to raise the authorised capital
 it is the court that could have permitted the same
 subject to such conditions that the court thought
 fit.

¶373

 110. For the same reason nor do we find any
 substance in the next submission. Relying upon

¶374

 :77:

¶375

 paragraphs 4 & 5 of the affidavit of Respondent No.6
 dated 18.04.2006, it was contended that the
 Respondents had provided adequate safeguards to
 protect the interests of the petitioner. It is
 stated by Respondent No.6 that Respondent No.5 had
 entered into a Technical Services Agreement and an
 Operating Agreement both dated 11.08.2004 with
 Marriott International, USA, under which Marriott is
 to exclusively manage and operate the hotel. There
 are various averments to the effect that the hotel
 is to be planned, designed, constructed, furnished
 and equipped in accordance with Marriott’s
 standards, time schedules and design documents to be
 approved by Marriott and that the hotel is to be
 operated and managed exclusively by Marriott without
 interference from the company for the period of
 thirty years.

¶376

 111. The argument is curious to say the least. It
 is true that Marriott International is one of the
 most reputed companies in the world in the
 hospitality industry. We have no reason to doubt
 the high standards of efficiency and integrity that
 Marriott is stated to maintain. The aspect is
 however irrelevant to the question under
 consideration. What we again find particularly

¶377

 :78:

¶378

 objectionable is the presumptuous attitude of the
 Respondents. Contemnors cannot be heard to tell the
 court that no action ought to be taken against them
 as they have provided safeguards which protect the
 interest of the appellants. They are nobody to do
 so. If we were to accept submissions such as this
 it would permit every litigant to violate the orders
 of this court and successfully defend their action
 by furnishing what they consider to be adequate
 safeguards.

¶379

 112(a). Then came an extraordinary
 contention. It was submitted that in fact by the
 aforesaid resolutions and the consequent issue of
 shares it is the Respondents who subscribed to these
 new shares who are prejudiced and not the
 Appellants. The contention was based on the ground
 that the Respondents had contributed an amount of
 over Rs.80 crores and had obtained funding from HDFC
 in the sum of Rs.64 crores, whereas the Appellants
 had not contributed anything.

¶380

 (b). The argument merely requires to be stated to
 be rejected. Nobody asked the Appellants to invest
 the money. Nobody forced the allottees of the new
 shares to subscribe to or accept the allotment of

¶381

 :79:

¶382

 the new shares. It was really a little too
 ambitious for the Respondents to have expected
 anybody to believe that they invested over Rs.80
 crores to their prejudice and did not derive any
 benefit by the investment.

¶383

 (c). We put the Respondents to the obvious test by
 asking them whether they would allot the said shares
 to the Appellants on the Appellants paying the like
 amount for the same and to have their investment of
 over Rs.80 crores returned. The answer not
 surprisingly, was in the negative. Nothing more
 need be said about the sheer untenability of the
 submission.

¶384

 113. It was submitted that the scales of justice
 are tipped in favour of the Respondents as the
 project would remain the same namely a hotel project
 with the participation of Marriott. The Appellants
 would therefore also suffer no prejudice.

¶385

 We do not see how that tips the scales of
 justice in the Respondent’s favour or how this fact
 is at all relevant to the question of contempt.

¶386

 114. It was submitted that the purpose of the

¶387

 :80:

¶388

 appellants suit would be defeated if the resolutions
 were set aside. The Appellants would then not get
 50% shares in any company. Thus, the appellants
 would suffer prejudice if the resolutions are set
 aside.

¶389

 115. Apart from the fact that this factor too does
 not tip the scales of justice in the Respondents
 favour, the basis of the submission is incorrect.
 Merely because the project may not come up it would
 not mean that the appellants would not be entitled
 to any reliefs or that the reliefs if granted would
 be meaningless. If the appellants succeed they
 would still get a 50% share in the company,
 Respondent No.5, which in turn would be the owner of
 the property. The fact that the project may not
 materialize today does not mean that the property is
 not in existence or will be of no benefit to the
 company in future.

¶390

 116. The next factor relied upon was that
 Respondent Nos.6 to 9 in any event could have
 changed the management of Respondent No.5 even
 without issuing the new shares by appointing
 Directors.

¶391

 :81:

¶392

 117. That they could have done so does not absolve
 them of having issued shares when they were
 specifically restrained from doing so. They may
 have been able to do many things regarding the
 management and the running of Respondent No.5
 without raising the authorised capital and issuing
 new shares. That does not excuse them from
 disobeying the orders of this Court.

¶393

 118. Mr.Chagla relied upon a judgement in the case
 of Ashok Paper Kamgar Union V/s. Dharam Godha
 (2003) 11 SCC 1 (paragraph 17) in support of his
 contention that before holding a party guilty of
 contempt it is necessary for the court to come to
 conclusion that there was wilful disobedience of the
 order. In view of our conclusion that the
 Respondents have wilfully disobeyed the order dated
 25.10.2003 the judgement is of no assistance to
 Mr.Chagla.

¶394

 119. For that reason nor is the judgement in Ashok
 Kumar Singh V/s. State of Bihar (1992) 1 SCC 152
 (paragraphs 9 & 10) of any assistance to Mr.Seervai
 who relied upon it in support of the proposition
 that so long is the misinterpretation was not wilful
 action for contempt of court is not called for. In

¶395

 :82:

¶396

 view of our conclusion that the order dated
 25.10.2005 is clear; that there was no question of
 any doubt arising as to its meaning; that it did
 not call for any interpretation and that the so
 called doubt was contrived, the judgement is of no
 assistance to Mr.Seervai. In that case the Supreme
 Court came to the finding that the order had not
 been wilfully misinterpreted.

¶397

 120(a). Mr.Chagla relied upon an unreported
 judgement dated 20.07.1999 of a learned Single Judge
 of this court in BEAG and Ors. V/s. Rupa
 Investment Ltd. and Ors. in Contempt Petition
 No.61/1999 in Writ Petition No.2065/1996 in support
 of his contentions that even if the court comes to
 the conclusion that there is a breach of an order,
 it is not bound to set at naught actions performed
 in breach of the said order.

¶398

 (b). The judgement clearly is of no assistance to
 Mr.Chagla even assuming that the submission is well
 founded. It would depend upon the facts of each
 case as to whether such actions should be set aside
 or not. The learned Judge did come to the
 conclusion that the construction put up by the
 Respondent was in breach of the orders of the court.

¶399

 :83:

¶400

 The Respondents therein had tendered an

¶401

 unconditional apology and gave an undertaking
 inter-alia that they would remove the construction
 if so ordered at the final hearing of the Writ
 Petition and would not claim any equity by reason of
 such construction. The learned Judge accepted the
 unconditional apology tendered by the Respondents.

¶402

 (c). It is important to note however that the
 learned Judge did not permit the Respondent to
 occupy that part of the building which was
 constructed in breach of the order.

¶403

 (d). The Contempt Petition was taken out in a Writ
 Petition. At the final hearing of the Writ
 Petition, the Respondents could well be ordered to
 remove the construction. In the present case if
 Respondent No.5 is permitted to utilize the funds
 received pursuant to the allotment of the shares, it
 will be impossible to set the clock back. This
 would be so even if the shares themselves are frozen
 today as suggested by Mr.Chagla and the Respondents
 do not claim ownership in respect thereof pending
 the hearing and final disposal of the suit.

¶404

 (e). If we were to permit this the entire purpose

¶405

 :84:

¶406

 of the injunction would be frustrated and the
 stratagem adopted by the Respondents would succeed
 thereby undermining the sanctity of the orders of
 this court.

¶407

 121. The above judgement was carried in Appeal by
 the Respondent. By an unreported judgement dated
 09.03.2000 in Appeal No.1056/1999 the Division Bench
 accepted the interpretation placed on the order by
 the Respondent/Appellant. That is not the case
 here. The judgement, therefore, is of no assistance
 to the Respondents. Nor is the reliance upon
 paragraph 10 of the judgement of any assistance to
 them. The Division Bench in paragraph 9 of the
 judgment observed that the matter pertained to a
 public interest litigation and that the court had to
 balance between two conflicting interests namely
 demand for public interest for compliance with laws
 as against the fact that there was already
 construction upto the fifth floor. The Division
 Bench came to the conclusion that by restraining the
 Respondents from occupying the building public
 interest would not be advanced. It is important to
 note that the Division Bench too observed that if
 the petition were to succeed, public interest may
 demand the razing of the building but that would

¶408

 :85:

¶409

 have to be postponed till the final hearing. As

¶410

 observed by us while dealing with the judgement of
 the learned Single Judge, in the present case if
 Respondent No.5 is permitted to use the funds raised
 by the allotment made pursuant to the impugned
 resolution it would be impossible to set the clock
 back. The observation in paragraph 10 to the effect
 that the learned Single Judge rightly accepted the
 unconditional apology and the undertakings without
 holding them guilty and punishing them were made in
 the facts of that case. There is no discernible
 ratio in these observations. In any event in the
 facts and circumstances of this case we are not
 inclined to permit the Respondents to take advantage
 of their own wrong.

¶411

 v) The Respondents were not bound by the orders,
as they were inoperative in view of the
Appellants not having complied with the
provisions of Rule 148 of the Bombay High
Court (Original Side) Rules, 1980 :

¶412

 122. Mr.Chagla submitted that the Respondents were
 not bound by the said orders as the Appellants had
 not complied with Rule 148 of the Original Side
 Rules of the High Court at Bombay. In this regard,

¶413

 :86:

¶414

 he relied upon a judgment of a Division Bench of
 this Court in Murablack India Ltd. v. UBS AG &
Ors., (2005) 12 LJ Soft 235. In paragraphs 15 and
 16, the Division Bench held as under :

¶415

 "15. Rule 148 of the Original
 Side Rules of the High Court at
 Bombay reads as under :-

¶416

`"148. A party to whom interim` `relief has been granted` `shall, before the order`
`is issued, unless the`
`Court otherwise`
`directs, give an`
`undertaking in writing`
`or through his Advocate`
`to pay such sum by way`
`of damages as the Court`
`may Award as`
`compensation in the`
`event of a party`
`affected sustaining`
`prejudice by such`
`order."`

¶417

 "16. Our reading of the Rule is
 that this rule would apply in all
 cases where interlocutory relief
 ad interim or interim is granted
 and the Prothonotary & Senior
 Master should not issue the
 injunction order under the seal of
 this Court unless the undertaking
 stipulated in Rule 148 has been
 given. In the present case,
 admittedly such undertaking has
 not been given. Mr.Thakkar
 contends that because at the time
 when the Notice of Motion was
 moved for ex parte orders, there
 is an order made saying that leave
 under Rules 147/148 had been
 granted by the Court, it should be
 presumed that the Court has
 exempted the appellant (original

¶418

 :87:

¶419

 defendant No.1) from giving the
 undertaking contemplated by Rule
 148. In our view, this is a very
 unsatisfactory way of doing
 things. That the undertaking
 contemplated by Rule 148 applies
 to all interim reliefs, ex parte
 or otherwise, is settled law in
 this Court. (See in this
 connection the judgment of the
 learned Single Judge in (Bank of
Maharashtra v. M.V. River
Ogbese), 1989(3) Bom.C.R. 452 :
 A.I.R. 1990 Bombay 107, with
 which we fully agree)."

¶420

 123. We do not read either Rule 148 or the judgment
 as absolving parties from obeying interim orders of
 this Court in the event of the undertaking as per
 Rule 148 not being furnished. It is indeed
 unfortunate that even after the judgment, the
 practice frowned upon by the Division Bench
 continues. We direct a copy of this judgment and
 order to be placed before the Prothonotary and
 Senior Master to take appropriate action in this
 regard and direct the Prothonotary and Senior Master
 to submit a compliance report within four weeks from
 today to Court.

¶421

 124. The issuance of an order of injunction despite
 the undertaking as per Rule 148 not being furnished,
 would not render the injunction inoperative.
 Indeed, if that were so, almost every order of

¶422

 :88:

¶423

 injunction issued by this Court would be rendered
 ineffective.

¶424

 125. The Division Bench itself did not consider the
 injunction as inoperative or ineffective on this
 ground. Had it been so, the Appeal would have been
 dismissed on that ground alone. The Division Bench,
 in fact, giving the Appellant the benefit of doubt,
 observed that the Appellant may have been misled by
 the prevailing erroneous practice. Had the Division
 Bench been of the view that interim orders are
 inoperative in the absence of such an undertaking,
 there would have been no question of giving the
 benefit of doubt to the Appellant.

¶425

 126. An order of injunction becomes operative the
 moment it is passed/pronounded. Thus the moment an
 interim order is passed, parties are bound to
 observe and obey the same. Thus, even before the
 issuance of an interim order by the office, a party,
 if aware of the order, is bound to obey the same.
 This is settled law.

¶426

 127. There is bound to be a hiatus between the
 pronouncement of the order by the Court and the
 issuance thereof by the office. The matter does not

¶427

 :89:

¶428

 end by the Plaintiff furnishing the undertaking.
 The office is bound to examine the undertaking to
 see if it complies with the provisions of Rule 148.
 All this takes time. It surely cannot be suggested
 that in the meantime parties are at liberty to
 violate the order. There is nothing in Rule 148 or
 in the judgment that supports this submission. To
 hold otherwise would lead to an absurdity and, in
 many, if not most cases, render the interim orders
 of this Court ineffective ab-initio. Let us
 illustrate this point.

¶429

 128. Take for instance a case where a Court passes
 in the presence of parties an interim order
 restraining the Respondent from invoking a bank
 guarantee and the bank from making payment
 thereunder. If Mr.Chagla’s submission is accepted,
 the Respondents could render the order ineffective
 by the bank forthwith making payment under the
 guarantee i.e. before the undertaking under Rule
 148 is furnished.

¶430

 129. However, a party who obtains an interim order,
 must be held to be bound by an undertaking as
 required by Rule 148 irrespective of whether or not
 such an undertaking is given. Where a party obtains

¶431

 :90:

¶432

 an interim order, it will be presumed, unless the
 Court otherwise directs, that he is bound by an
 undertaking to pay such sum by way of damages as the
 Court may award as compensation in the event of a
 party affected, sustaining prejudice by such order.
 A party obtaining advantage of an interim order
 cannot be heard to contend otherwise.

¶433

 130. Orders of courts operate the moment they are
 pronounced and it is settled law that parties are
 bound by the orders even if they have notice
 thereof. It is axiomatic therefore that a party who
 obtains an injunction, takes, and must be deemed to
 have taken benefit thereof immediately upon the
 order being passed/pronounced. It would be unfair
 to permit the party at whose instance the order is
 passed to turn around at his pleasure and say that
 he did not intend the parties against whom the order
 is passed to be bound by the order. It is not in
 any event for the party to say so. The question of
 obedience to the orders of the Court transcends the
 personal benefit in favour of parties at whose
 instance the order is passed. Obedience to the
 orders of the Court is a matter of public policy and
 not just a question of the individual litigant’s
 protection.

¶434

 :91:

¶435

 131. Indeed, Mr.Chinoy did not dispute this
 position and conceded that the Appellant must be
 considered to be bound by an undertaking
 contemplated under Rule 148 despite the fact that
 the undertaking was not furnished by him.

¶436

 vi) Respondent Nos.8 and 9 cannot be held to have
committed contempt of the orders as they had

¶437

not attended the meetings at which the
impugned resolutions were passed :

¶438

 132. Mr.D.J. Khambata and Mr.M.S. Doctor,
 appearing on behalf of Respondent Nos.8 & 9

¶439

 respectively, while adopting Mr.Chagla’s submissions
 also submitted that though the resolutions may be in
 breach of the order dated 25.10.2005, Respondent
 Nos.8 & 9 were not responsible for the same as they
 were not parties to the resolutions. The mere fact
 they were beneficiaries of the resolutions passed in
 contempt of the order of the Court would make no
 difference. In other words, according to them the
 mere fact that Respondent Nos.8 & 9 took benefit of
 the contumacious acts would not render them liable
 for contempt or to have their defence struck out.
 They submitted that Respondent Nos.8 & 9 had not

¶440

 :92:

¶441

 even attended the meeting at which the impugned
 resolutions were passed leave alone vote on the said
 resolutions. They submitted that in fact had they
 attended the meeting and voted on the resolutions,
 they would have been guilty of contempt by
 exercising the rights in respect of their shares
 which they were restrained from doing by virtue of
 the order dated 25.10.2005.

¶442

 133. The submission is untenable. Admittedly
 Respondent Nos.8 & 9 were aware of the order dated
 25.10.2005 and were equally bound by it. Admittedly
 they were aware of and had agreed from inception to
 the entire arrangement/scheme leading to the
 impugned resolutions. It is pertinent to note the
 following averments in the affidavit of Respondent
 No.8 dated 05.04.2006:-

¶443

 "5. ......................................
 In the circumstances, we agreed that it would
 be best if Defendant/Respondent Nos.1 and 2
 invest in the Hotel Project and take on the
 burden of the pending litigation. We
 approached Defendant/Respondent No.1 with our
 proposal. As there was no restraint on
 Defendant No.5 from issuing further or new
 equity, it was proposed that further equity in
 Defendant No.5 company would be issued in
 favour of Defendant/Respondent No.1 against
 his investment.

¶444

 6. After negotiations with
 Defendant/Respondent No.1 and 2, the above
 proposal was agreed upon."

¶445

 :93:

¶446

 134. Added to this is the fact that admittedly in
 his negotiations with Respondent Nos.1, 2 & 3
 Respondent No.6 represented all the shareholders of
 Respondent No.5. This is so stated in the
 affidavit-in-reply of Respondent No.1 dated

¶447

 05.04.2006 in the Appeal. It is not controverted by
 any of the Respondents.

¶448

 135. Obviously the further equity could only have
 been issued by increasing the authorised capital for
 the existing authorised capital was insufficient to
 raise an additional Rs.80 crores. This, in turn,
 required the passing of a resolution. The passing
 of the resolution required the exercise of rights in
 respect of the existing shares by the shareholders.
 Respondent Nos.8 & 9, therefore, knew that what they
 had agreed to was contrary to the orders of this
 Court.

¶449

 136. Faced with this it was submitted that
 Respondent Nos.8 and 9 presumed that the resolutions
 would have been passed only in accordance with law.
 In other words, they presumed that Respondent Nos.1
 to 7 would take all steps required in law to raise

¶450

 :94:

¶451

 the authorised capital including seeking leave of

¶452

 the court to do so in view of the order dated
 25.10.2005.

¶453

 137. This submission too is without any force.
 This aspect was not even pleaded in the affidavits
 filed by Respondent Nos.8 & 9. It is nothing but an
 after thought. That it is an after thought and was
 never the case of Respondent Nos.8 and 9 is
 established also by paragraphs 4 and 9 of their
 identical affidavits-in-reply, both dated 05.04.2006
 filed in the Notice of Motion. The entire case of
 Respondent Nos.8 & 9 on affidavit was identical to
 the case of the other Respondents viz. that they
 did not consider the above resolutions to be
 contrary to the said order.

¶454

 138. Neither Mr.Khambata nor Mr.Doctor went to the
 extent of contending that the resolutions themselves
 were not contrary to and in violation of the order
 dated 25.10.2005. In the circumstances, Respondent
 Nos.8 and 9 not merely consented to but effectively
 participated in and agreed to the entire scheme /
 arrangement. Respondent Nos.8 and 9 are parties to
 the proceedings and were equally bound by the said
 orders. They are therefore directly guilty of

¶455

 :95:

¶456

 contempt.

¶457

 139. In any event they undoubtedly aided and
 abetted the breach of the order dated 25.10.2005.
 They received the benefits of the resolutions passed
 in contempt of the orders of this Court. They too
 refuse to part with the same. In other words they
 too refuse to purge the contempt. One who aids and
 abets the breach of a court order obstructs the
 course of justice and is guilty of contempt.

¶458

 140. Halsbury’s Laws of England Fourth Edition
 Vol.9 paragraph 85 at page 51 reads as under :-

¶459

 "85. Aiding and abetting breach
of order. A stranger to an action
 who aids and abets the breach of a
 court order obstructs the course
 of justice, and is guilty of
 contempt punishable by committal.
 The punishment is inflicted, not
 for a technical infringement of
 the order, but for aiding and
 abetting others in setting the
 court at defiance."

¶460

 141. There is a reference in Halsbury’s Laws of
 England to the Judgement of the Court of Appeal in
 Seaward V/s. Paterson (1897) 1 Ch. 545.
 Proceedings were taken to commit one Murray who was
 not a party to the action either first or last.

¶461

 :96:

¶462

 That Murray knew of the injunction was admitted.

¶463

 The Court of Appeal unanimously held that though he
 may not have been bound by the injunction, he was
 bound like other members or the public, not to
 interfere with, and not to obstruct the course of
 justice. The case against Murray was held to be one
 of aiding and abetting others in setting up the
 court’s defiance and deliberately treating the
 orders of the court as unworthy of notice. In such
 cases the court would not allow its process to be
 set at naught and treated with contempt. Thus
 although Murray was not a defendant in the action
 and was not a person against whom the injunction had
 been granted he was committed for contempt as
 despite the fact that he knew about the injunction
 he aided and abetted in committing a breach of it.

¶464

 142. In S.N.Bannerjee & Anr. V/s. Kuchwar & Co.
AIR 938 PC 295, the Privy Council noted the above
 judgment and endorsed the principle that persons
 could be held liable for contempt if they aid or
 abet the breach of an order.

¶465

 143. In Babulal V/s. Municipal Corporation, Ratlam
(2005) 13 SCC 101, the Supreme Court remanded a
 matter where the High Court proceeded on the basis

¶466

 :97:

¶467

 that a person not a party to the original
 proceedings cannot be proceeded against for
 contempt. The Supreme Court observed that the issue
 is a debatable one having regard to the law on the
 issue particularly in S.N. Bannerjee V/s. Kuchwar
 & Co. (supra).

¶468

 144. We are in respectful agreement with the
 judgement of the Court of Appeal. We are bound by
 the judgment of the Privy Council. In the present
 case in fact Respondent Nos.8 & 9 are parties to the
 action and bound by the injunction. The case
 against them is stronger. There can therefore be no
 hesitation in holding them guilty of contempt.

¶469

 145. We are of the view that a person who aids or
 abets the breach of a court order is also guilty of
 contempt punishable by committal. In the Notice of
 Motion however no prayer has been sought for the
 detention of Respondent Nos.8 & 9 or any of their
 officers in civil prison. There is nothing however
 that restrains the court from passing any of the
 other orders which have been sought in the Notice of
 Motion even though the same may affect Respondent
 Nos.8 & 9.

¶470

 :98:

¶471

 146. To hold otherwise would lead to the orders
 such as the order dated 25.10.2005 being rendered
 redundant. The entire effect of such orders could
 be circumvented by only some of the shareholders
 attending the meeting, passing a resolution in
 violation of the injunction and granting the benefit
 thereof to others. This would permit the
 beneficiaries of the resolution to contend that no
 action should be taken against them for they did not
 participate in the illegality. If we accept such
 arguments, it would render all such orders nugatory,
 redundant and ineffective.

¶472

 147. In the circumstances, we hold that the said
 resolutions dated 27.03.2006 and 31.03.2006 are
 contrary to and in breach of the order dated
 25.10.2005. We also hold that the disobedience by
 each of the Respondents of the order dated
 25.10.2005 was wilful and deliberate. The contempt
 was aggravated first by fact that though an apology
 is mentioned in each of the Respondent’s affidavits,
 the same does not appear to be a genuine expression
 of regret, as there was not only no offer to purge
 the contempt but a resistance to do so. The
 contempt was further aggravated by the Respondents
 having done what they did only shortly before the

¶473

 :99:

¶474

 appeal reached hearing. They clearly did so in an
 attempt to present the court with a fait accompli.
 The contempt was also aggravated by the nature of
 the conduct of the Respondents, especially by
 Respondent Nos.1, 2 & 3 before us.

¶475

 148. This brings us to the prayers in the Notice of
 Motion.

¶476

 149. In prayer (a), the appellant seeks an order
 striking out the defences of the Respondents under
 Order 39, Rule 11 of the CPC (Maharashtra
 amendment), which reads as under:-

¶477

 "BOMBAY, DADRA AND NAGAR HAVELI-GOA, DAMAN
 AND DIU.-In Order XXXIX, after the existing
 Rule 10, add the following rule with marginal
 note as new Rule 11 and its marginal note:-

¶478

 "11. Procedure on parties, defying orders of
 Court and committing breach of undertaking to
 the Court.-Where the Court orders any party
 to a suit or proceeding to do or not to do a
 thing during the pendency of the suit or
 proceeding, or where any party to a suit or
 proceeding gives any undertaking to the Court
 to do or to refrain from doing a thing during
 the pendency of the suit or proceeding, and
 such party commits any default in respect of
 or contravenes such order or commits a breach
 of such undertaking, the Court may dismiss
 the suit or proceeding, if the default or
 contravention or breach is committed by the
 plaintiff or the applicant, or strike out the
 defences, if the default or contravention or
 breach is committed by the defendant or the
 opponent.

¶479

 :100:

¶480

 (2) The Court may, on sufficient cause being
 shown and on such terms and conditions as it
 may deem fit to impose, restore the suit or
 proceeding or may hear the party in defence,
 as the case may be, if the party that has
 been responsible for the default or
 contravention or breach as aforesaid makes
 amends for the default or contravention or
 breach to the satisfaction of the Court:
 Provided that before passing any order under
 this sub-rule notice shall be given to the
 parties likely to be affected by the order to
 be passed." (1-10-1983) and (1-4-1987)"

¶481

 150. Mr.Chinoy submitted that the provisions of
 Order 39, Rule 11 are mandatory. The question is
 however no longer res-integra. It is concluded by
 the Division Bench Judgement of this Court in
 Ramavatar V/s. Mulchand (2004) Mah. L.J.1 where it
 is held that the provisions are directory and not
 mandatory. The Division Bench inter-alia held as
 follows :-

¶482

 "Under Order 39, Rule 11(1) of the Code of
 Civil Procedure the consequence of dismissal
 of suit or striking out the defence follows
 where there is default in compliance of order
 of the Court or breach of an undertaking by
 the plaintiff or the defendant, as the case
 may be. The provision of Order 11, Rule 21
 having been held to be directory in M/s.
Babbar Sewing Machine Co. by the three Judge
 Bench of the Supreme Court, we have no
 hesitation in holding that for the selfsame
 reasons sub-rule (1) of Rule 11 of Order 39 of
 Code of Civil Procedure as introduced in
 Maharashtra by Bombay Amendment has to be held
 directory and the discretion exercisable by
 the Court in passing the order under sub-rule
 (1) of Rule 11 of Order 39 has to be in
 consonance and in conformity with the legal
 position laid down by the Supreme Court in

¶483

 :101:

¶484

M/s. Babbar Sewing Machine Co. In other
 words, the power of dismissal of suit or
 striking out the defence, as the case may be,
 under Order 39, Rule 11(1) of Code of Civil
 Procedure should be exercised for adequate
 reasons where the defaulting party fails
 ultimately in complying with the order of the
 Court of the undertaking; where the default
 is wilful and the conduct of the defaulting
 party contumacious and that results in causing
 substantial or serious prejudice to the
 opposite party."

¶485

 151. The test laid down by the Division Bench
 clearly applies in the present case in view of the
 above findings. If in circumstances such as the
 present case the court does not invoke its powers
 under Order 39, Rule 11, it is difficult to see in
 which case it ought to do so.

¶486

 152. We however refrain from exercising our powers
 by striking out the defences in view of Mr.Chagla’s
 statement albeit towards the conclusion of the
 hearing, made before us on 04.08.2006.

¶487

 Mr.Chagla stated that the Respondents would be
 willing to deposit the newly issued shares in court
 and that the allottees thereof would not claim any
 right, title or interest therein till the hearing of
 the suit. He stated that the Respondents are
 willing that the shares would abide by the final
 result of the suit. He stated that the cancellation

¶488

 :102:

¶489

 of the shares would not enure to anyone’s benefit as
 the same would lead to HDFC recalling the loan. The
 entire project would be adversely affected thereby.

¶490

 153. Mr.Chagla appears only for Respondent Nos.5, 6
 & 7. The remaining Respondents stated that they
 have no objection to Mr.Chagla’s suggestion.

¶491

 154. Though we have not accepted this suggestion
 and do not consider it as purging the contempt, we
 will, despite our reservations, assume that the
 Respondents perceive it genuinely to be an
 expression of regret and a valid mode of purging the
 contempt. In the circumstances, only in view of
 this statement, we refrain from striking out the
 defences of the Respondents.

¶492

 155. By prayer (b), the appellant seeks an order
 attaching the property of the Respondents under
 Order 39, Rule 2A of the CPC. It is not necessary
 to grant this relief as we intend setting aside and
 annulling the resolutions.

¶493

 156. In prayer (c), the appellant has sought the
 detention of Respondent Nos.1 to 3, 6 & 7 in civil
 prison for a term not exceeding three months under

¶494

 :103:

¶495

 Order 39, Rule 2A of the CPC.

¶496

 157. Counsel request us to permit them to peruse
 the judgment to enable them to address us on the
 issue of punishment. Accordingly on the issue of
 punishment the matter is adjourned to 24.11.2006 at
 3.00 p.m.

¶497

 158. In prayer (d), the appellant has sought an
 order setting aside and/or declaring as null and
 void the resolutions dated 27.03.2006 and
 31.03.2006.

¶498

 159. The Respondents did not question the

¶499

 jurisdiction of the court to set at naught
 transactions entered into in contempt of an order of
 the court. They merely contended that the facts and
 circumstances of the case did not warrant setting at
 naught the resolutions and the allotment of shares
 pursuant thereto. It is not necessary therefore for
 us to consider in any detail the judgements cited by
 Mr.Chinoy in this regard. Indeed there can be no
 doubt whatever regarding the court’s power to do so
 in a proper case. To hold otherwise would set at
 naught the orders of the Court. [See Century Flour
 Mills V/s. S. Suppiah, AIR 1975 Madras 270 (Full

¶500

 :104:

¶501

 Bench), Sujit Pal V/s. Prabir Kumar Sun, AIR 1986
 Calcutta 220 (DB)]. The judgements were affirmed by
 the Supreme Court in Union of India V/s. Kirloskar
Pneumatics Co. Ltd., 1996 4 SCC 453.

¶502

 160. Mr.Chinoy submitted that the resolutions
 having been passed in breach of the order of
 injunction dated 25.10.2005 are void and not merely
 voidable. The Court in such circumstances is bound
 to annul the transaction. He cited several
 judgements in support of the submission. It is a
 submission with far reaching consequences especially
 for bona-fide third parties without notice. It is
 not necessary for us to consider this extreme
 proposition as we intend setting aside the
 resolution and annulling all acts consequent thereto
 anyway.

¶503

 161. Mr.Chagla and Mr.Seervai submitted that even
 assuming that the resolutions were passed in
 contempt of the order of this court, we ought to see
 the justice of the case. According to them even
 assuming that the Respondents were guilty of
 contempt of court the justice of the case required
 that the resolutions ought not to be set aside.

¶504

 :105:

¶505

 162. At the outset we find it difficult in the
 facts and circumstances of this case to comprehend
 how the Respondents can even talk about the justice
 of the case considering their conduct through out
 including during the hearing before us.

¶506

 163. The first factor according to Mr.Chagla was
 that HDFC will recall the loan and refuse to fund
 the project if the Respondents did not increase
 their equity participation.

¶507

 164. HDFC has not stated that it refused or would
 refuse to fund the project unless the Respondents
 bring in further funds only by way of equity. As a
 matter of fact in this case HDFC has filed
 affidavits on other issues. There is however no
 affidavit from HDFC to the effect that it agreed to
 fund the project only if there was an increase in
 the equity of Respondent No.5. In other words HDFC
 has not stated that it would not have agreed to fund
 the project even if the existing shareholders had
 brought in the money otherwise, such as by way of
 loans from the promoters, existing shareholders or
 from others. Respondent No.5 was free to raise
 funds in any manner other than by committing a
 breach of the order dated 25.10.2005.

¶508

 :106:

¶509

 165. When we put this to Mr.Chagla, he responded
 by saying that Respondent Nos.1, 2, 3, 8 & 9 were in
 a worse position by subscribing to the new shares to
 such a large extent. He stated that having brought
 in the money by subscribing to the shares,
 Respondent Nos.1, 2, 3, 8 & 9 cannot now demand the
 return of the money whereas had they brought the
 money in by way of debt / loans to Respondent No.5,
 they could demand the return of the same.

¶510

 166. The explanation is not convincing. HDFC has
 nowhere stated that if the money which was paid for
 the shares had been lent to Respondent No.5, it
 would not have funded the project under any
 circumstances. Anybody familiar with banking
 transactions knows that financial institutions often
 agree to fund a venture / company upon the promoters
 bringing in a proportionate amount either by way of
 equity or by way of debt and if it is by debt, it is
 with the condition that the promoters will not
 recall their loans until the dues of the financial
 institutions are satisfied.

¶511

 167. Nothing prevented the Respondents from doing
 the same in the present case. There was no answer

¶512

 :107:

¶513

 to this from any of the counsel.

¶514

 168. Significantly none of the Respondents
 suggested that Respondent No.5 may retain the
 amounts paid towards the allotment of shares as a
 loan and that the allotment of shares be cancelled.
 This would have established their bona-fides. We
 put this to the Respondent’s counsel. They did not
 agree.

¶515

 169. They then submitted that Respondent Nos.1 to
 3, 8 & 9 had invested a large amount pursuant to the
 said resolutions. It is submitted that if the
 resolutions were set aside, these Respondents would
 suffer an enormous financial loss. They further
 submitted that the entire hotel project would also
 be affected.

¶516

 170. We are unable to agree. The loss, if any,
 has been caused by their own action. They have only
 themselves to blame. In effect the submission
 amounts to inviting us to accept that the commercial
 interests of the Respondents ought to be placed
 higher than the principle of obedience to the orders
 of this court. That cannot be. It is always open
 to the Respondents to take steps in accordance with

¶517

 :108:

¶518

 law to ensure that the project does not suffer.
 They may do so even now. If they do so, obviously
 the application will be dealt with in accordance
 with its own merits. But to permit them to take
 advantage of their own wrong would send out a wrong
 signal and adversely affect the rule of law.

¶519

 171. In the case of Century Flour Mills V/s. S.
Suppiah AIR 1975 Madras 270, a Full Bench of the
 Madras High Court observed as under :-

¶520

 "8. ..............................
 "So far as F.A.F.O. No.251 of
 1973 and C.R. 875 of 1972 are
 concerned, it may be pointed out
 that the mere fact that the
 applicants had been dispossessed
 after the interim injunction order
 had been issued would not be
 enough to treat the chapter in
 regard to possession over the
 house as closed. If a person had
 been dispossessed by wilfully
 disobeying an order of injunction
 the court which issued the order
 of injunction can after
 considering the circumstances of
 each case and the conduct of the
 parties always pass such an order
 in the ends of justice as would
 undo the wrong done to the party
 in whose favour the order of
 injunction had been issued. The
 exercise of this inherent power
 vested in the court is based on
 the principle that no party can be
 allowed to take advantage of his
 own wrong in spite of the order to
 the contrary passed by the court;
 see State of Bihar v. Ushadevi,

¶521

 :109:

¶522

 AIR 1956 Pat 455 and Magna v.
 Rustam, AIR 1963 Raj.3"

¶523

 9. In our opinion, the inherent
 powers of this court under Section
 151 CPC are wide and are not
 subject to any limitation. Where
in violation of a stay order or
injunction against a party,
something has been done in
disobedience, it will be the duty
of the court as a policy to set
the wrong right and not allow the
perpetuation of the wrong doing.
In our view, the inherent power
will not only be available in such
a case, but it is bound to be
exercised in that manner in the
interests of justice. Even apart
 from Section 151, we should
 observe that as a matter of
 judicial policy, the court should
 guard against itself being
 stultified in circumstances like
 this by holding that it is
 powerless to undo a wrong done in
 disobedience of the court’s
 orders. But in this case it is
 not necessary to go to that extent
 as we hold that the power is
 available under Section 151,
 C.P.C." (emphasis supplied)

¶524

 172. The judgement and in particular the words
 emphasised was affirmed by the Supreme Court in DDA
V/s. Skipper Construction Co. (P) Ltd. (1996) 4
SCC 622. In paragraphs 17 to 21, it is held:-

¶525

 "The contemner should not be
allowed to enjoy or retain the
fruits of his contempt.

¶526

 17. The principle that a

¶527

 :110:

¶528

 contemner ought not to be
 permitted to enjoy and/or keep the
 fruits of his contempt is well
 settled. In Mohd. Idris v.
 Rustam Jehangir Babuji this Court
 held clearly that undergoing the
 punishment for contempt does not
 mean that the court is not
 entitled to give appropriate
 directions for remedying and
 rectifying the things done in
 violation of its orders. The
 petitioners therein had given an
 undertaking to the Bombay High
 Court. They acted in breach of
 it. A learned Single Judge held
 them guilty of contempt and
 imposed a sentence of one month’s
 imprisonment. In addition
 thereto, the learned Single Judge
 made appropriate directions to
 remedy the breach of undertaking.
 It was contended before this Court
 that the learned Judge was not
 justified in giving the aforesaid
 directions in addition to
 punishing the petitioners for
 contempt of court. The argument
 was rejected holding that "the
 Single Judge was quite right in
 giving appropriate directions to
 close the breach (of
 undertaking)."

¶529

 18. The above principle has been
 applied even in the case of
 violation of orders of injunction
 issued by civil courts. In Clarke
 v. Chadburm Sir Robert Megarry
 V-C observed:

¶530

 "I need not cite authority for the
 proposition that it is of high
 importance that orders of the
 court should be obeyed. Wilful
 disobedience to an order of the
 court is punishable as a contempt
 of court, and I feel no doubt that
 such disobedience may properly be
 described as being illegal. If by
 such disobedience the persons

¶531

 :111:

¶532

 enjoined claim that they have
 validly effected some charge in
 the rights and liabilities of
 others, I cannot see why it should
 be said that although they are
 liable to penalties for contempt
 of court for doing what they did,
 nevertheless those acts were
 validly done. Of course, if an
 act is done, it is not undone
 merely by pointing out that it was
 done in breach of the law. If a
 meeting is held in breach of an
 injunction, it cannot be said that
 the meeting has not been held.
 But the legal consequences of what
 has been done in breach of the law
 may plainly be very much affected
 by the illegality. It seems to me
 on principle that those who defy a
 prohibition ought not to be able
 to claim that the fruits of their
 defiance are good, and not tainted
 by the illegality that produced
 them."

¶533

 19. To the same effect are the
 decisions of the Madras and
 Calcutta High Courts in Century
 Flour Mills Ltd. v. S. Suppiah
 and Sujit Pal v. Prabir Kumar
 Sun. In Century Flour Mills Ltd.
 it was held by a Full Bench of the
 Madras High Court that where an
 act is done in violation of an
 order of stay or injunction, it is
 the duty of the court, as a
 policy, to set the wrong right and
 not allow the perpetuation of the
 wrongdoing. The inherent power of
 the court, it was held, is not
 only available in such a case but
 it is bound to exercise it to undo
 the wrong in the interest of
 justice. That was a case where a
 meeting was held contrary to an
 order of injunction. The Court
 refused to recognise that the
 holding of the meeting is a legal
 one. It put back the parties in
 the same position as they stood

¶534

 :112:

¶535

 immediately prior to the service
 of the interim order.

¶536

 20. In Sujit Pal a Division Bench
 of the Calcutta High Court has
 taken the same view. There, the
 defendant forcibly dispossessed
 the plaintiff in violation of the
 order of injunction and took
 possession of the property. The
 Court directed the restoration of
 possession to the plaintiff with
 the aid of police. The Court
 observed that no technicality can
 prevent the court from doing
 justice in exercise of its
 inherent powers. It held that the
 object of Rule 2-A of Order 39
 will be fulfilled only where such
 mandatory direction is given for
 restoration of possession to the
 aggrieved party. This was
 necessary, it observed, to prevent
 the abuse of process of law.

¶537

 21. There is no doubt that this
 salutary rule has to be applied
 and given effect to by this Court,
 if necessary, by overruling any
 procedural or other technical
 objections. Article 129 is a
 constitutional power and when
 exercised in tandem with Article
 142, all such objections should
 give way. The court must ensure
 full justice between the parties
 before it."

¶538

 173. One of the judgments relied upon by Mr.Chinoy
 in support of his contention that transactions
 entered into in breach of a prohibitory order are
 void is in the case of Keshrimal Jivji vs. Bank of
Maharashtra (2004) 7 LJ Soft 16. Though we have
 refrained from expressing our view on this

¶539

 :113:

¶540

 proposition the judgment, in the facts of this case
 especially where the rights of third parties are not
 involved certainly supports the Appellants’ case for
 an order annulling the transactions. Indeed if in
 these facts we were not to annul the resolutions we
 would be acting contrary to the Division Bench
 judgment. After referring to various judgments of
 the Supreme Court the Division Bench held :-

¶541

 26. We cannot accept Shri Naphade’s
 contention that observations of the
 Supreme Court in the case of Surjeet
 Singh should be read as restricted
 to proceedings under Order 22 Rule
 10 of C.P.C. and the same cannot be
 extended to defiance of injunction
 order issued under Order 39 Rule 1
 of C.P.C. Once the issue is placed
 on the pedestal of public policy and
 the very faith of litigants in Rule
 of law and administration of
 justice, then it is not possible to
 make the distinction or bifurcation
 suggested by Shri Naphade. It would
 mean that consequences of nullifying
 such transaction not being provided
 by the Statute, it would not lose
 its legal efficacy even if it is in
 utter disregard to or in violation
 of or breach of prohibitory order or
 order of injunction issued by a
 Court of law. It would mean that
 parties can breach and violate Court
 orders openly and with impunity and
 neither they nor the beneficiaries
 suffer any consequences. It is time
 that we recognise the principle that
 transfer of immovable property in
 violation of an order of injunction
 or prohibition issued by Court of
 law, confers no right, title or

¶542

 :114:

¶543

 interest in the transferee, as it is
 no transfer at all. The transferee
 cannot be allowed to reap advantage
 or benefit from such transfer merely
 because he is not party to the
 proceedings in which order of
 injunction or other prohibitory
 direction or restraint came to be
 issued. It is enough that the
 transferor is a party and the order
 was in force. These two conditions
 being satisfied, the transfer must
 not be upheld. If this course is
 not adopted then the tendency to
 flout orders of Courts which is
 increasing day by day can never be
 curbed. The Court exercises its
 powers on the foundation of respect
 and regard for its authority by
 litigating public. People would
 lose faith and respect completely if
 the court does not curb and prevent
 this tendency. The note of caution
 of the Supreme Court must be
 consistently at the back of
 everybody’s mind. Therefore, Shri
 Naphade is not right in the
 distinction which he is trying to
 make.

¶544

 174. The effect of the judgment is clear. The
 effect of the judgment on the facts of this case is
 clearer. Realizing this it was submitted that the
 judgment applies only to cases involving immovable
 property. We are unable to agree. There is nothing
 in the judgment which justifies the contention.
 There is nothing in principle or in law which even
 remotely suggests the same. The Division Bench was
 dealing with the law of injunction and the law of
 contempt, not the law of contempt involving only

¶545

 :115:

¶546

 immovable property. The ratio is general in its
 application and not limited to cases involving
 immovable properties alone.

¶547

 175. In the circumstances, we are of the view that
 the impugned resolutions ought to be set aside. It
 would however be necessary to ensure that the share
 subscription money is not utilized without orders of
 this court in appropriate proceedings. This is to
 protect the rights and interests of all the parties
 in respect thereof including the allottees of the
 new shares.

¶548

 176. The Respondents agreed that evidence be
 recorded by a Commissioner for taking evidence.
 They shall make an application in that behalf to the
 learned Judge hearing suits.

¶549

 177. In the circumstances, we pass the following
 order :-

¶550

 (a). We hold that each of the Respondents
 has willfully disobeyed and has thereby
 committed contempt of the order of this
 Court dated 25.10.2005. On the issue of
 punishment the matter is adjourned to
 24.11.2006 at 3.00 p.m.

¶551

 :116:

¶552

 (b). The Notice of Motion is made absolute
 in terms of prayer (d).

¶553

 (c).(i) Respondent No.5 is restrained
 from dealing with or utilizing the amounts
 received by it towards allotment of the new
 shares in any manner whatsoever including
 paying the same to any party or parties.

¶554

 (ii). Respondent No.5 shall within a
 period of eight weeks from today deposit
 all the amounts received by it towards
 allotment of the new shares pursuant to the
 said resolutions in court. Thereupon the
 Prothonotary & Senior Master, High Court,
 Bombay, shall invest the same in fixed
 deposits of a Nationalized Bank initially
 for a period of one year and thereafter for
 like periods of one year each.

¶555

 (iii). The parties are at liberty to
 make an application or adopt any other
 proceedings in respect of the said amounts.

¶556

 (d). Each of the Respondents shall pay the

¶557

 :117:

¶558

 costs of this Notice of Motion fixed at
 Rs.10,000/- to the Appellants within a
 period of eight weeks from today.

¶559

 178. The order is stayed for eight weeks from
 today to enable the parties to challenge the same.

¶560

 (S.J.VAZIFDAR, J.) (DR.S.RADHAKRISHNAN, J.)

Gopal L.Raheja and Anr. v. Vijay B.Raheja and Ors.

Case brief

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Gopal L.Raheja and Anr. v. Vijay B.Raheja and Ors.

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