Date : 20/10/2023

Relevance: GS Paper 2- Polity

Keywords: NCLAT, Show Cause Notice, NCLT, IBBI

Context-

In a recent development, the Supreme Court (SC) initiated Contempt of Court Proceedings against two individuals serving on the National Company Law Appellate Tribunal (NCLAT). These members were served show cause notices for delivering a verdict in the Finolex Cables case, despite specific instructions from the SC to uphold the existing state of affairs in the matter.

Case Overview:

• Background: The Supreme Court (SC) had instructed the scrutinizer to announce the Annual General Meeting results of Finolex Cables. The SC also directed the National Company Law Appellate Tribunal (NCLAT) to deliver its judgment after being informed of the meeting's outcome.
• NCLAT's Alleged Disregard: Contrary to the SC's directive, NCLAT purportedly issued its judgment without acknowledging the SC's orders, prompting concerns about the functioning of the National Company Law Tribunal (NCLT) and NCLAT.
• SC's Reaction: Chief Justice of India (CJI) expressed worries regarding the tribunals' operations, citing this case as an illustration of their challenges. The SC expressed dissatisfaction with NCLAT's handling, emphasizing that NCLAT should have adhered to the SC's instructions.

Contempt of Court:

Definition: Contempt of court aims to safeguard judicial institutions from motivated attacks and unwarranted criticism. It serves as a legal tool to penalize those undermining the court's authority.

Legal Basis:

• Contained in Article 19(2) of the Indian Constitution, limiting freedom of speech and expression.
• Article 129 grants Supreme Court power to punish contempt, and Article 215 confers the same on High Courts.
• The Contempt of Courts Act, 1971, provides statutory support for these principles.

Types of Contempt:

• Civil Contempt:
  As per Section 2(b) of the Contempt of Courts Act of 1971, civil contempt is defined as the deliberate disobedience of any judgment, decree, direction, order, writ, or any other process issued by a court. It also includes the intentional violation of an undertaking given to a court.


• Criminal Contempt:
  

  According to Section 2(c) of the Contempt of Courts Act of 1971, criminal contempt encompasses the publication (through spoken or written words, signs, visible representation, or any other means) of any matter or the commission of any act that:

  • (i) Scandalizes or tends to scandalize, or undermines or tends to undermine the authority of any court, or
  • (ii) Biases, interferes with, or tends to interfere with the proper course of any judicial proceeding, or
  • (iii) Interferes with, tends to interfere with, obstructs, or tends to obstruct the administration of justice in any other manner.

Exceptions:

• Fair Reporting: Fair and accurate reporting of judicial proceedings does not constitute contempt.
• Criticism: Fair criticism of a judicial order post its disposal is permissible.

Punishment:

• The Contempt of Court Act (1971) stipulates imprisonment up to six months, a fine of Rs 2,000, or both for offenders.
• The 2006 amendment introduced "truth and good faith" as a defense.
• Punishments are imposed if the action significantly interferes or tends to interfere with the due course of justice.

Contempt Laws in Democratic Societies: Striking a Balance"

• In democratic societies, the relevance of contempt laws has been a topic of debate. Historically, the power to punish for contempt was severe and lacked adequate safeguards for the accused, raising concerns about its compatibility with India's constitutional framework. In a democracy, the fundamental principle is the supremacy of the people, rendering all authorities, including the judiciary, as their servants.
• Contrastingly, many countries consider contempt jurisdiction outdated and employ it sparingly. For instance, in the United States, contempt is not used to silence discussions on judges or legal matters due to the First Amendment's protection of free speech, particularly for the media.
• The concept of criminal contempt in India, rooted in the British era, emerged from the belief that the king could do no wrong. However, this power has sometimes been wielded arbitrarily, raising questions about judicial overreach. In a free society, criticism of the judiciary is natural, especially considering the significant powers judges possess. Just as decisions of other branches of government are subject to scrutiny, judicial decisions are also open to criticism.
• The key criterion to determine contempt is whether an act makes the judges' functioning impossible or extremely difficult. If it doesn't, even harsh criticism does not qualify as contempt. Contempt laws should serve the purpose of enabling the court to function, not stifling criticism. There is a growing consensus that legislative amendments are needed to redefine criminal contempt and strike a balance between freedom of expression and the judiciary's need for impartiality and fearlessness.
• The judiciary must navigate this delicate balance, embracing a mature and open-minded approach to criticism. By doing so, the judiciary can inspire public confidence, reinforcing the belief that justice, as Lord Atkin aptly stated, is not a virtue confined to seclusion but a principle that thrives in the open discourse of a democratic society.

Way Forward:

• Protecting Freedom of Speech: Recognizing freedom of speech as a fundamental right, any restrictions imposed by the contempt of court law should be minimal and carefully balanced.
• Legitimacy of Judicial Institutions: Contempt laws should only impose restrictions necessary to uphold the legitimacy of judicial institutions.
• Clear Guidelines: Superior courts should establish clear rules and guidelines for initiating criminal contempt proceedings. These guidelines should adhere to principles of natural justice and fairness to ensure a just legal process.

Source - Indian Express