related to case laws

1. SOA NATIONAL INSTITUTE OF LAW
Case Law Presentation
Pallav Sheth VS. Custodian & Or's, AIR (2001) SC 2763

2. FACTS
 The appellant was held to have committed civil contempt and sentenced to one
month’s simple imprisonment and a fine of Rs 2000 by the Special Court constituted
under the Special Court (Trial of Offences Relating to Transactions in Securities) Act,
1992.
 The Custodian appointed under the same act filed a miscellaneous application seeking
a decree for Rs 50 crores on behalf of M/s Fair growth Financial Services Limited
against the appellant.
 The Income Tax Department also conducted raids on the appellant and he admitted to
making several cash deposits amounting to Rs 2.81 crores in the bank accounts of five
companies.
 The Special Court directed the issuance of a show-cause notice to punish the
appellant for contempt, which ultimately led to his conviction.

3. ISSUE
 Whether the Special Court had the power to punish for contempt of court under
Article 215 of the Constitution of India and the Contempt of Courts Act, 1971.
 Whether Section 20 of the Contempt of Courts Act, 1971 bars the court from
initiating proceedings for contempt beyond a period of one year from the date on
which the contempt is alleged to have been committed.

4. ARGUMENTS
 The Custodian argued that the power under Article 215 of the Constitution cannot
be curtailed by Section 20 of the Contempt of Courts Act, 1971.
 The appellant contended that the impugned order cannot be sustained as it is in
conflict with the powers of the courts to punish for contempt recognized by the
Constitution.
 The appellant also argued that the period of limitation under Section 20 had expired
before the filing of the application by the Custodian, and therefore no action on such
an application could be taken by the court.

5. JUDGEMENT
 The court affirmed that the Special Court had the power to punish for contempt of
court under Article 215 of the Constitution of India and the Contempt of Courts Act,
1971.
 The court also held that Section 20 of the Contempt of Courts Act, 1971 does not
bar the court from taking action if proceedings are initiated by the filing of an
application or by the court issuing notice Suo moto within a period of one year from
the date on which the contempt is alleged to have been committed.
 The court further held that the provisions of the Limitation Act, 1963 are applicable
to Section 19 of the Contempt of Courts Act, 1971.

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