APHC010200152024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3329] THURSDAY,THE NINETEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA CONTEMPT CASE NO: 2318/2024 Between: 1. M/S NESTOR PHARMACEUTICALS LIMITED, HAVING ITS REGISTERED OFFICE AT G-1, ASHOKA ESTATE, 24, BARAKHAMBA ROAD, NEW DELHI - 110001. REPRESENTED BY ITS AUTHORISED SIGNATORY MR. SANJEEV SHARMA ...PETITIONER AND 1. SRI M TIRUMALA KRISHNA BABU IAS, S/O NOT KNOWN TO THE PETITIONER, R/O NOT KNOWN TO THE PETITIONER SPECIAL CHIEF SECRETARY, STATE OF ANDHRA PRADESH, DEPARTMENT OF MEDICAL AND HEALTH, SECRETARIAT,VELGAPUDI, GUNTUR, ANDHRA PRADESH. 2. MR D MURLIDHAR REDDY IAS, S/O NOT KNOWN TO THE PETITIONER, R/O NOT KNOWN TO THE PETITIONER, VICE CHAIRMAN AND MANAGING DIRECTOR, ANDHRA PRADESH MEDICAL SERVICES AND INFRASTRUCTURE DEVELOPMENT CORPORATION, AN ENTERPRISE OF GOVERNMENT OF ANDHRA PRADESH, PLOT NO.9, SURVBEY NO.49, IT PARK, MANGALGIRI, GUNTUR DISTRICT ANDHRA PRADESH - 522503. 3. MR SANDIP SHAH, MANAGING DIRECTOR S/O NOT KNOWN TO THE PETITIONER, R/O NOT KNOWN TO THE NV,J CC.No.2318 of 2024 2 PETITIONER, GENERAL MANAGER, DRUGS, M/S CYANOPHARMA PRIVATE LIMITED, 115/C, INDUSTRIAL ESTATE, POLOGROUND, INDORE, MADHYA PRADESH. 4. G LAKSHMISHA, S/O GANGA MUTHAIAH,AGED ABOUT 40 YEARS, R/O NOT KNOWN TO THE PETITIONER, VICE CHAIRMAN AND MANAGING DIRECTOR, ANDHRA PRADESH MEDICAL SERVICE AND INFRASTRUCTURE DEVELOPMENT CORPORATION, AN ENTERPRISE OF GOVERNMENT OF ANDHRA PRADESH, PLOT NO.9,SURVBEY NO.49,IT PARK, MANGALAGIRI,GUNTUR DISTRICT,ANDHRA PRADESH-522503. R 4 IMPLEADED AS PER COURT ORDER DATED 01/10/2024 VIDE IA NO-1 OF 2024 IN CC NO-2318 OF 2024 ...CONTEMNOR(S): Petition under Sections 10 to 12 of Contempt of Courts Act 1971 praying that in the circumstances stated in the affidavit file herein the High Court may be pleased to may be pleased to punish the Respondents/Contemners under Sections 10 to 12 of the Contempt of Courts Act for willful disobedience and deliberately violating the Order dated 04.04.2024 passed by this Honble Court in I.A.No.1 of 2024 in W.P.No.7883 of 2024, and to pass Counsel for the Petitioner: 1. VIVEK CHANDRA SEKHAR S Counsel for the Contemnor(S): 1. ANUP KOUSHIK KARAVADI 2. S APPADHARA REDDY 3. VENKATA REDDY CHITTEM (SC FOR APMSIDC) 4. S PRANATHI NV,J CC.No.2318 of 2024 3 THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA CONTEMPT CASE No.2318 of 2024 This Court made the following ORDER 1. This Contempt Case has been filed complaining the willful disobedience in implementing the Order dated 04.04.2024 passed by this Court in I.A.No.1 of 2024 in W.P.No.7883 of 2024. 2. Learned counsel for the petitioner submits that this Court passed interim orders on 04.04.2024 suspending the operation of purchase order dated 06.02.2024. Therefore, the respondent Nos.2 and 3 shall not proceed with the purchase order. But in the instant case the respondent Nos.2 and even though the purchase order was suspended, they proceeded further and the 3rd respondent supplied the material pursuant to the purchase order dated 06.02.2024 and the 2nd respondent received the same and distributed the same and the said action of Respondent Nos.2 and 3 is deliberate violation of interim orders of this Court. As such they are liable for punishment under Sections 10 and 12 of the Contempt of Courts Act, 1971 (for short “the Act, 1971”). NV,J CC.No.2318 of 2024 4 3. Learned counsel further submits that the interim order passed by this Court neither vacated nor modified till 17.10.2024. Therefore, the interim orders dated 04.04.2024 are in existence and enforceable till final orders. Admittedly, in the present case the writ petition was dismissed on 18.10.2024, against which a Writ Appeal No.897/2024 was also preferred and the same was dismissed at the admission stage on 17.11.2024. He further asserts that even the violation of interim orders which are in force for specific period such violation is liable for contempt as per ratio laid down by the Hon’ble Apex Court in Samee Khan vs. Bindu Khan1 wherein the Hon’ble Apex Court observed as under: “12. But the position under rule 2A of Order 39 is different. Even if the injunction order was subsequently set aside the disobedience does not get erased. It may be a different matter that the rigour of such disobedience may be toned down if he order is subsequently set aside. for what purpose the property is to be attached in the case of disobedience of the order of injunction? Sub-rule (2) provides that if the disobedience or breach continues beyond one year from the date of attachment the court is empowered to sell the property under attachment and compensate the affected party from such sale proceeds. In other words, attachment will continue only till the breach continues or the disobedience persists subject to a limit of one year period. If the disobedience ceases to continue in the meanwhile the attachment also would cease. Thus even under Order 39 Rule 2A the attachment is a mode to compel the opposite party to obey the order of injunction. But detaining the disobedient party in civil prison is a mode of punishment for his being guilty of such disobedience.” 1 1998 SCC OnLine SC 570 NV,J CC.No.2318 of 2024 5 4. He also relied upon the judgment of High Court of Telangana at Hyderabad in Dr. D. Karunakar Reddy and others vs. G. Sandeep and others2 wherein it is observed thus: “9.xxxxxx. The respondents No.1 and 2 were represented by their counsel and the order was passed in the Open Court in the presence of all the parties. Therefore, it cannot be said that the interim order was not communicated to the parties. xxxxxx. The ground taken by the respondents that they were not aware of the detailed order till 08.05.2023 until it was dispatched by the Court, is not acceptable. In the case of Balwantbhai Somabhai Bhandari vs. Hiralal Somabhai Contractor, relief upon by the leraned counsel for the petitioners, the Hon’ble Supreme Court has culled out the principles as under: 40. xxxxx 41. xxxxx 42. xxxxx 43. The following conditions must be satisfied before a person can be held to have committed civil contempt: (i) there must be a judgment, decree, direction, order, writ or other process of a court; (ii) there must be disobedience to such judgment, decree, direction, order, writ or other process of a court; and (iii) such disobedience of the judgment, decree, direction, order, writ or other process of a court must be willful [Patel Rajnikant Dhulabhai vs. Patel Chandrakant Dhulabhai, (2008) 14 SCC 561]. 5. Therefore, learned counsel for the petitioner submits that the respondents are liable for contempt under Sections 10 and 12 of the Act, 1971. 6. On the other hand, learned counsel for respondents filed counter affidavits on behalf of Respondent Nos.2, 3 and 4. The counter filed by the Respondent Nos.2 and 4 is one and the same, wherein it is stated that the writ petition itself was 2 2024 SCC OnLine TS 1007 NV,J CC.No.2318 of 2024 6 dismissed by way of final orders on 18.10.2024 assailing the orders passed in writ petition filed Writ Appeal No.897/2024, wherein the Division Bench of this Hon’ble Court dismissed the appeal at the admission stage. Therefore, in view of the dismissal of the writ petition and writ appeal, the action of the respondent cannot be found fault with and there is no offence alleged to have been committed by the respondent since the interim orders itself is merged with the final orders. 7. Reply-cum-counter filed by the Respondent No.3 wherein it is stated as under: “5. It is humbly submitted that upon perusal of record Respondent No.3 herein learnt that, after receipt of the notices in the writ petition, the Unofficial Respondent therein in the W.P.No.7883 of 2024, has filed its detailed Counter Affidavit along with Vacate Stay Petition on 25.04.2024 vide I.A.No.3 of 2024 and contested the Writ Petition. 6. It is humbly submitted that on the date of filing the vacate stay petition in the writ petition i.e., 25.04.2024, the petitioner herein also filed a Contempt Case without giving any notice to this respondent and same is numbered as Contempt Case bearing C.C.No.2318/2024 before this Hon’ble Court seeking to punish the respondents therein, for willful disobedience and deliberately violating the orders of this Hon’ble Court dated 04.04.2024 passed in I.A.No.1 of 2024 in W.P.No.7883 of 2024. 10. It is humbly submitted that in fact, Respndent No.3 herein was formerly the Managing Director of M/s. Cyano Pharma Private Limited. However, Respondent No.3 tendered resignation from this position on 05.03.2021, and since then, has had no connection or involvement with the company. The resignation was duly accepted on 05.03.2021, and the same was communicated to the Registrar of Companies. As a result of said resignation, Respondent NO.3 has not executed any Vakalatnama in relation to the above-mentioned Writ Petition Furthermore, Respondent No.3 has not signed or endorsed the Counter Affidavit (vacate Stay Petition) or the Additional Counter Affidavit NV,J CC.No.2318 of 2024 7 filed on behalf of M/s Cyano Pharma Private Limited, which is the 3d respondent in the Writ Petition. Despite of said fact, in captioned Contempt Case No.2318/2024, the Petitioner in Captioned Case / Writ Petitioner have erroneously included Respondent No.3 herein, based on a previous association with M/s Cyano Pharma Private Limited. The petitioner herein intentionally filed this contempt case in order to threaten this respondent in personal capacity though the petitioner is aware that the respondent herein is not concerned authority. 11. In the said circumstances it is humbly submitted that Respondent No.3 has had no involvement in affairs or day to day activities or association with the company since 05.03.2021 and considering that the resignation was accepted on 05.03.2021 the inclusion of Respondent No.3 herein in the captioned case is unwarranted and improper.” 8. Learned counsel for Respondent Nos.1, 2 and 4 submits that this Court passed interim directions on 04.04.2024 suspending the purchase order dated 06.02.2024 and by the time of the orders of this Court the 2nd respondent herein placed purchase order on 06.02.2024 and received the majority of the material much before the interim orders of this Court. On perusal of the purchase order, it is in relation to emergency medicine to cater the emergency needs of the public. Therefore, the respondents cannot stop the supply of emergency medicine in view of the interim orders without making alternative arrangements. Immediately the 3rd respondent filed vacate stay petition on 25.04.2024 itself seeking to vacate the interim orders since the supply of emergency medicine and life saving medicine cannot be discontinued due to the public interest. If the supply of NV,J CC.No.2318 of 2024 8 emergency medicine was stopped, it will be jeopardized the public interest at large. After filing the counter-affidavit by the Respondent Nos.2 and 4 in writ petition and after hearing the matter, this Court passed final orders on 18.10.2024 dismissing the writ petition on merits by observing that the writ petition is not maintainable. Therefore, the interim orders dated 04.04.2024 were merged with the final orders, as such the interim orders cannot be enforced much less cannot be canvassed that the respondents committed contempt in violation of the interim orders of this Court. He relied upon the following judgments of Hon’ble Apex Court. 1. Amarjeet Singh and others vs. Devi Ratan and others3 2. Prem Chandra Agarwal and another vs. Uttar Pradesh Financial Corporation and others4 9. He argued that in the above judgments the Hon’ble Apex Court held that once final order is passed, all the interim orders in the writ petition merged into the final orders and interim orders ceased to exist. Therefore basing upon the interim orders contempt cannot be invoked under Sections 10 and 12 of the Act, 3 (2010) 1 Supreme Court Cases 417 4 (2009) 11 Supreme Cout Cases 479 = 2009 SCC OnLine SC 881 NV,J CC.No.2318 of 2024 9 1971. Therefore the present Contempt Case is liable to be dismissed. 10. Learned counsel for 3rd respondent specifically argued that the 3rd respondent immediately filed vacate stay petition on 25.04.2024 by way of I.A.No.3 of 2024 and once the vacate is filed till the disposal of the vacate petition or writ petition the interim orders always subject to further orders of this Court. 11. It is settled law that once the vacate petition is filed the petitioner neither alleged violation of interim orders nor canvassed the action of the respondent are liable for contempt under Sections 10 and 12 of the Act, 1971. He further asserts that the 3rd respondent is not a proper and necessary party for contempt proceedings since the 3rd respondent resigned from the responsibilities of the 3rd respondent on 05.03.2021 and the same was accepted by the Board of 3rd respondent and the same was registered and recorded with Registrar of Companies, Hyderabad. Therefore, no contempt can be initiated against the respondent No.3 as the Respondent No.3 is not a proper and necessary party to represent the 3rd respondent Company. Therefore the present contempt petition liable to be dismissed against the Respondent No.3. NV,J CC.No.2318 of 2024 10 12. Heard learned counsel for all the parties and perused the material on record. 13. For determination of the issue involved in this Contempt Petition, it is appropriate to verify the orders dated 04.04.2024 in I.A.No.1 of 2024 in W.P.No.7883 of 2024 of this Court afresh as under: “Learned counsel for the petitioner submits that the petitioner herein selected as successful bidder pursuant the tender document No.123-8/APMSIDC/Medicine/Wing/2022-23, dated 12.09.2022 for a period of two years. Later, the petitioner entered into an agreement with the 2nd respondent on 02.11.2022. He further submits that as per the tender document, once a tenderer is declared as L1, Pos will be issued to the tenderer and the tenderer should acknowledge the PO through the e- Aushadi portal. As per Clause 12.4 of the tender conditions, the PO ought to be completed within 75 days of the order being placed. As per Clause 12.5 of the tender document, in the event of the tenderer being unable to supply the drugs within the stipulated delivery period of the PO, the tenderer must take necessary approval from the 2nd respondent for supply of drugs beyond the stipulated period. He further submits that Clause 16 of the tender document pertains to the payment provisions. As per Clause 16.2 of the tender document, the payments towards supplies will be made after completion of the supplies against the PO and within 60-90 days of submitting all the required document as per the terms and conditions of the PO. Clause 16.4 provides that payment will be made after completion of 95% of the supplies. He further submits that the petitioner has been making supplies as provided under the terms and conditions of the tender documents as well as agreement dated 02.11.2022. So far the petitioner supplied the drugs to the worth of Rs.7,89,78,577/- to the 2nd respondent, but the 2nd respondent released the amount only to a tune of Rs.2,42,78,462/-. Clause 16.2 of the tender document is extracted hereunder: “16.2. Payments towards the supply of surgical consumables will be made after completion of supplies NV,J CC.No.2318 of 2024 11 against the PO, within 60 to 90 days after submission of all required documents as per the terms and conditions of PO for bill processing. The payment will be made through AP Government Finance portal CFMS/RTGS (Real Time Gross Settlement System)/Core Banking/NEFT. The tenderer shall furnish the relevant details in original (Mandate Form) to make the payment through CFMS/RTGS/Core Banking/NEFT.” The respondents have to clear the bills within a period of 60 to 90 days after supply of the drugs as per the purchase orders. But even after lapse of 1 ½ year, the liability of the petitioner not discharged by the respondents, by which the respondents are violating the conditions under Clause 16.2 of the tender document. While things stood thus, the respondent issued purchase order for an amount of Rs.16,79,62,278/- to the petitioner. For which the petitioner requested 45 days time as per the Clause 18 of the tender document for supply of the same and also requested for early due payments as pending with the respondents. Without considering the letter addressed by the petitioner dated 08.02.2024, the 2nd respondent cancelled the purchase orders and entrusted the same to the 3rd respondent herein by providing 150 days period for such supply and at the cost of Rs.2 ½ crores, higher than the rate quoted by the petitioner. He further submits that cancelling the purchase orders of the petitioner and awarding the same to the 3rd respondent herein at higher rate as well as providing 150 days period for supply is contrary to the Clause 18 of the tender document and also contrary to the agreement dated 02.11.2022. Therefore, the purchase orders placed to the 3rd respondent is liable to be suspended. On the other hand, learned Standing Counsel for the 2nd respondent submitted the written instructions in the form of E- mail extracts and letter addressed by the petitioner dated 03.10.2023, wherein it is stated that even though the respondents placed the purchase orders to the petitioner in terms of the agreements dated 12.12.2022 and 07.06.2023, the petitioner not complied with the Clause 18 of the tender document and delayed the supply for a period of 243 days as well as 419 days. In view of the said delay the present purchase orders were placed to the 3rd respondent herein. He further submits that as far as alleged violation of petitioner in respect of Clause 16 of the tender document, the petitioner already availed alternative remedy by invoking the procedure under MSME Act for recovery of the amount/dues pursuant to the said agreement. He further submits that the very agreement with the petitioner itself is cancelled by issuing notice to the petitioner, without challenging the cancellation of purchase orders vide proceedings dated 07.02.2024 and 06.02.2024 is contrary to the terms of the Agreement. He further submits that the petitioner NV,J CC.No.2318 of 2024 12 was issued E-mail notice dated 20.10.2023 directing him to produce all the pending supplies to the 2nd respondent. He further submits that in view of the cancellation of the very agreement itself, the petitioner cannot invoke the extraordinary jurisdiction of this Court for cancelation of purchase orders through this Writ Petition and the present Writ Petition is liable to be dismissed. In view of the submissions made by the learned counsel for the petitioner and the learned Standing Counsel for the 2nd respondent and on perusal of the material placed on record, it appears that the period of contract is in subsistence till September, 2024. The reply letter of the petitioner dated 20.10.2023 also indicates agreeing for supply of medicine as per purchase order within a period of 45 days. It is further observed that placing of the order to the 3rd respondent by granting a period of 150 days as well as at higher rate than the rates quoted by the petitioner is contrary to the terms of the agreement and the said action of the 2nd respondent is also causing heavy loss to the public exchequer. Therefore, there is a prima-facie case in favour of the petitioner. Accordingly, there shall be an interim direction as prayed for.” 14. On perusal of the orders of this Court dated 04.04.2024, it is clear and categorical that this Court suspended the purchase order issued by the 2nd respondent to the 3rd respondent for supply of emergency medicine on failure of supply by the petitioner even though the contract is existing in favour of the petitioner. On perusal of the purchase order and as contended by learned counsel for Respondent Nos.2 and 4 the purchase order dated 06.02.2024 was acted upon by the respondent immediately for the distribution of emergency medicine to all the stakeholder in the State of Andhra Pradesh is valid and NV,J CC.No.2318 of 2024 13 supported by the evidence filed along with the counter-affidavits. As contended by learned counsel for the petitioner that even after suspension of purchase order vide orders dated 04.04.2024 continuation receipt of material pursuant to the purchase order dated 06.02.2024 is amounts to contempt to the interregnum period i.e., till the final orders of this Court dated 18.10.2024 is not a meritorious contention for the reason that the procurement of emergency and live saving medicine was started much before the orders of this Court pursuant to the purchase order dated 06.02.2024. In view of the contention by the respondent the life saving medicine or emergency medicine cannot be stalled in view of the public interest at large. If the supply or distribution of emergency medicine was stalled, which would jeopardize the public interest since it relates life saving medicines and emergency medicines and in view of filing of vacate stay petition immediately within 15 days from the date of orders, the contention of the petitioner that even for interregnum period if the interim orders were violated they are liable for contempt is not a valid and acceptable in view of nature as explained and was involved at subject purchase order. However, on perusal of the the judgment relied upon by the petitioner as extracted above in NV,J CC.No.2318 of 2024 14 Samee Khan vs. Bindu Khan (Supra 1) and Dr. D. Karunakar Reddy and others vs. G. Sandeep and others (Supra 2), the facts and reasons mentioned therein are not applicable to the present case for the reason that here the vacate petition is filed within 15 days and the subject purchase order is involves emergency medicine and life saving medicine and if it is stalled even for few days which may jeopardize the public interest at large. Therefore, the principle laid down as relied upon by the petitioner cannot be made applicable in the present scenario. 15. On the other hand, the principle of merger as relied upon by learned counsel for respondents in Amarjeet Singh and others vs. Devi Ratan and others the Hon’ble Supreme Court observed as under: 17. No litigant can derive any benefit from mere pendency of case in a Court of Law, as the interim order always merges in the final order to be passed in the case and if the writ petition is ultimately dismissed, the interim order stands nullified automatically. A party cannot be allowed to take any benefit of his own wrongs by getting interim order and thereafter blame the Court. The fact that the writ is found, ultimately, devoid of any merit, shows that a frivolous writ petition had been filed. The maxim "Actus Curiae neminem gravabit", which means that the act of the Court shall prejudice no-one, becomes applicable in such a case. In such a fact situation the Court is under an obligation to undo the wrong done to a party by the act of the Court. Thus, any undeserved or unfair advantage gained by a party invoking the jurisdiction of the Court must be neutralised, as institution of litigation cannot be permitted to confer any advantage on a suitor from delayed action by the act of the Court. (Vide Shiv Shankar & Ors. Vs. Board of Directors, Uttar Pradesh State Road Transport Corporation & NV,J CC.No.2318 of 2024 15 Anr., 1995 Suppl. (2) SCC 726; M/s. GTC Industries Ltd. Vs. Union of India & Ors., AIR 1998 SC 1566; and Jaipur Municipal Corporation Vs. C.L. Mishra, (2005) 8 SCC. Similarly in Karnataka Rare Earth & Anr. Vs. Senior Geologist, Department of Mines & Geology & Anr., (2004) 2 SCC 783, a similar view has been reiterated by this Court observing that the party who succeeds ultimately is to be placed in the same position in which they would have been if the Court would not have passed an interim order. In Prem Chandra Agarwal and another vs. Uttar Pradesh Financial Corporation and others (Supra 4) Hon’ble Supreme Court observed as under: “3. It is a well-settled principle that once a final order is passed, all earlier interim orders merge into the final order, and the interim orders cease to exist. In this appeal, since the final order has been passed by the High Court, obviously all interim orders passed by the High court in the same writ petition cease to exist automatically. Consequently, any direction given in the interim order dated 24.4.2004 also ceases to exist. In view of the final order passed by the High Court, the impugned interim order and any direction therein have ceased to exist. The appeal has become infructuous and is, accordingly, dismissed. 16. Learned counsel for the respondents submits that the said above judgment are squarely covered and therefore the interim order of this Court cannot be enforced. As contended by learned counsel for the Respondent No.3 the contempt itself not maintainable against the respondent No.3 who is not a proper and necessary party to the contempt case and as per the material placed along with the counter-affidavit and no reply is filed to that NV,J CC.No.2318 of 2024 16 effect by the petitioner herein. Therefore, no contempt is made out against the 3rd respondent. 17. In view of the reasons stated above and on perusal of the ratio laid down by Hon’ble Apex Court and in view of the dismissal of the W.P.No. 7883/2024, dated 18.10.2024 and in view of the fact that the vacate petition filed on 25.04.2024 vide I.A.No.3 of 2024 and also dismissal of Writ Appeal No. No.897/2024 on 17.11.2024, no contempt is made out by the petitioner and accordingly the Contempt Case is closed. As a sequel, interlocutory applications if any pending shall stand closed. _____________________________________ JUSTICE VENKATESWARLU NIMMAGADDA Date: 19.02.2026 KRK NV,J CC.No.2318 of 2024 17 THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA CONTEMPT CASE No.2318 OF 2024 Date: 19.02.2026 KRK