The Punjab & Haryana High Court has delivered a stern rebuke against a judgment debtor who exploited a court-sanctioned settlement to sell property and then refused to pay the decree amount, holding that such conduct constitutes wilful contempt of court. The judgment reaffirms that judicial orders, especially those granting relief on conditional terms, must be honored in letter and spirit.
Background & Facts
The Dispute
The petitioner, Sukhdev Singh, and the respondent, Subegh Singh, are brothers embroiled in a civil dispute over a debt of Rs. 48,15,000. The petitioner filed a suit for recovery, which was decreed in his favor by the Trial Court on 16.10.2018, awarding Rs. 48,15,000 with 12% interest from 26.09.2011 until filing, 6% pendente lite interest, and future interest until realization. The respondent appealed, leading to RSA No. 379 of 2022 before this Court.
Key Facts
- On 01.08.2018, the petitioner (plaintiff) made a sworn statement before the Trial Court, agreeing to a compromise: he would accept Rs. 44 lakh from the respondent in exchange for withdrawing all pending litigation, including the cheque case before the Additional Sessions Judge.
- The petitioner stated he would take an oath at the Gurudwara Sahib in Masrai on 02.08.2018 and, upon receipt of Rs. 44 lakh via RTGS, would withdraw the appeal and release the respondent from all liabilities.
- On 13.08.2018, the respondent (defendant) confirmed the terms, agreeing that if he failed to pay Rs. 44 lakh within one and a half months, the original decree of Rs. 48,15,000 with interest would revive.
- On 28.05.2024, this Court disposed of RSA No. 379 of 2022 and the revisions, taking note of the compromise and permitting the respondent to sell 1.5 acres of land (out of 33 kanal 4 marlas) to raise funds, provided the sale proceeds were used to satisfy the decree.
- The Court specifically directed the Executing Court to vacate the attachment on the 1.5 acres and required the respondent to inform the Executing Court of the exact khasra number to be sold.
- A cheque of Rs. 5,00,000 was handed over to the petitioner on 07.06.2024, which was accepted.
- The respondent sold the 1.5 acres of land via registered sale deeds dated 13.09.2024 but did not deposit any portion of the sale proceeds with the petitioner or the Court.
- The petitioner filed the present contempt petition on grounds of wilful disobedience of the order dated 28.05.2024.
Procedural History
- 16.10.2018: Trial Court decreed suit for Rs. 48,15,000 with interest.
- 01.08.2018: Petitioner’s compromise statement recorded.
- 13.08.2018: Respondent’s confirmation of compromise recorded.
- 28.05.2024: High Court disposed of RSA No. 379 of 2022, permitting sale of 1.5 acres subject to deposit of proceeds.
- 13.09.2024: Respondent sold 1.5 acres of land.
- 14.10.2024: SLP No. 22960 of 2024 dismissed by Supreme Court.
- 13.10.2025: High Court ordered respondent to file affidavit explaining why he should not be punished for contempt.
- 15.01.2026: Order passed granting respondent time to deposit sale proceeds.
- 09.03.2026: Correction made: reference to "half acre" corrected to "1.5 acres".
- 23.02.2026: High Court dismissed respondent’s application to recall order dated 15.01.2026.
- 06.04.2026: Respondent sought time to pay Rs. 18 lakh; adjourned to 16.04.2026.
- 16.04.2026: Judgment delivered.
Relief Sought
The petitioner sought punishment of the respondent for wilful contempt of court under Section 2(b) of the Contempt of Courts Act, 1971, for violating the order dated 28.05.2024 by selling the property and refusing to deposit the sale proceeds.
The Legal Issue
The central question was whether the respondent’s conduct - selling property released by court order on the condition of depositing proceeds, and then refusing to pay any amount - constitutes wilful disobedience amounting to contempt of court.
Arguments Presented
For the Petitioner
The petitioner argued that the respondent deliberately exploited the Court’s leniency by obtaining release of attachment on the strength of a court order conditioned on payment, then sold the property and retained the proceeds. This, he contended, was a calculated attempt to frustrate the decree and undermine judicial authority. The petitioner relied on the clear terms of the compromise recorded in court and the express conditions in the order dated 28.05.2024.
For the Respondent
The respondent, appearing in person, did not dispute the sale or non-payment but sought to condition the payment of Rs. 18 lakh on withdrawal of the execution petition. He claimed he was willing to pay but only if the petitioner withdrew the case. He also cited a pending contempt appeal before the Division Bench, seeking to delay enforcement.
The Court's Analysis
The Court examined the sequence of events and the explicit conditions attached to the order dated 28.05.2024. It noted that the release of the 1.5 acres was not a gratuitous act but a conditional relief granted to facilitate compliance with the decree. The respondent’s conduct was not merely non-compliance but active subversion: he sold the property, received the proceeds, and then refused to honor the quid pro quo.
"The respondent has shown scant respect to the orders passed by this Court. This Court has repeatedly granted him long rope since 15.01.2026, unfortunately, the same has been misconstrued as weakness of the Court."
The Court rejected the respondent’s attempt to equate partial payment with compliance. The order required full satisfaction of the decree through deposit of sale proceeds - not partial payments contingent on withdrawal of execution. The Court emphasized that the respondent’s willingness to go to jail rather than pay demonstrated a deliberate defiance of judicial authority.
The Court also dismissed the relevance of the pending appeal before the Division Bench, noting that the appeal was adjourned on the respondent’s own request and did not operate as a stay on the contempt proceedings. The Court held that contempt proceedings are independent and serve to uphold the dignity of the Court, irrespective of pending appeals.
The Verdict
The respondent was found guilty of wilful contempt of court. He was sentenced to undergo imprisonment for three months. However, in view of his advanced age and the pendency of his appeal, the sentence was suspended for two weeks, until 29.04.2026, to allow him to seek remedies. The respondent was required to deposit the Rs. 18 lakh cheque with the Court immediately, and the execution petition remains active.
What This Means For Similar Cases
Contempt Is Not a Last Resort
- Practitioners must treat court orders with conditional relief as binding obligations, not negotiating tools.
- Wilful non-compliance after obtaining benefit under a court order will attract contempt, even if the underlying decree is under appeal.
- Courts will not tolerate strategic manipulation of judicial leniency.
Sale Proceeds Must Be Handed Over, Not Withheld
- When a court permits sale of attached property to satisfy a decree, the proceeds are held in constructive trust for the decree-holder.
- Retaining sale proceeds without depositing them constitutes a direct violation of the court’s directive.
- Partial payment or conditional payment (e.g., "I’ll pay if you withdraw") does not cure contempt.
Judicial Patience Has Limits
- Repeated adjournments and extensions granted to a contemnor do not waive the right to punish.
- Courts may impose immediate imprisonment even where appeals are pending, if the contempt is clear and deliberate.
- The pendency of an appeal does not automatically stay contempt proceedings unless expressly stayed by a competent court.
