Islamic Investment Company of the Gulf (Bahamas) Ltd v Symphony Gems NV & Ors

The appellant, Mr Rajesh Kishor Mehta, is in considerable trouble. He has in this jurisdiction a summary judgment against him, given as long ago as 13 February 2002, for just over ten million dollars. He has more recently, in April 2007, been arrested in Belgium and spent a period in custody there, pending possible extradition to India where he faces potential prosecution. He took himself voluntarily to India to avoid possible extradition proceedings and, as I shall explain in due course, one of the difficulties in this case is the combination of the requirements that the English Court had made of Mr Mehta for the purposes of his attending for examination into his means in the light of the summary judgment against him, together with the requirements of the authorities including the courts in India, from where his travel is restricted in the light of his legal difficulties.

The chronology of matters goes somewhat like this. On 16 January 2007 an order was made under CPR Part 71 for an examination of Mr Mehta -- Part 71 is the part concerned with examination to obtain information from a judgment debtor. An examination hearing was fixed for 20 February 2007 but, in the light of difficulties of service, it was subsequently re-fixed for 1 May 2007. There then, on 11 April 2007, occurred the arrest of Mr Mehta in Belgium to which I have referred, as a result of which the hearing fixed for 1 May 2007 was adjourned at that time sine die. On 25 May 2007 Mr Mehta was released from custody in Belgium and his examination was subsequently re-fixed for 3 July 2007.

On 28 June 2007 that hearing was again adjourned, on this occasion due to a neck injury which Mr Mehta had suffered in custody in Belgium. That adjournment at that time was sine die, but the examination was   subsequently re-fixed for 9 October 2007. On 8 October 2007 Andrew Smith J, before whom proceedings had come, arising out of other aspects of the matter with which we are not concerned today, adjourned the hearing of the following day (9 October) and re-fixed the examination for a date at that time fixed to be not before 12 November 2007 and subsequently refixed for 27 November 2007. It was on 8 October that Mr Mehta travelled from Belgium to India to avoid possible extradition proceedings against him in Belgium.

On 26 October 2007 -- that is to say, just over one month before the hearing then fixed for 27 November 2007 -- Mr Mehta applied to the Indian court for permission to travel abroad for forty-seven days, from 10 November to 26 December 2007. He explained in his application the various businesses and litigating reasons which required him to travel abroad. They encompassed, as he told the Indian court, the hearing then fixed in London for 27 November (see paragraph 9 of his application of 26 October).

The Indian court did not manage to reach that application until 23 November 2007. On that day it granted to Mr Mehta not forty-seven days’ permission to travel but only forty days, and it fixed the forty days in question to run from 2 December 2007 to 10 January 2008. I am left to speculate as to why the Indian court fixed the forty days to start only from 2 December. On behalf of Mr Mehta, Mr Andrew Nicol QC has submitted on his behalf that this indicates the Indian court’s lack of concern for the hearing date in London on 26 November. On the other hand, at that time, as Mr Mehta had explained to the Indian court, he lacked the necessary travel documents such as a passport, and it is possible that the Indian court made a realistic estimate of the time it would take for Mr Mehta to obtain those travel documents and that otherwise it would have sought to assist the English court to maintain the fixture of 26 November. That must remain ultimately a matter of uncertainty and speculation.

In the circumstances the fixture of 27 November could not go ahead and, on 6 December 2007, Master Miller re-fixed the adjourned hearing of 27 November, this time for 31 January 2008. I am not entirely certain what Master Miller knew on that occasion -- for instance, whether Master Miller was informed of the nature of the Indian court order of 23 November -- but, at any rate, Master Miller was not informed, as I understand the matter, that, as things stood at present, Mr Mehta would not be able to be out of India beyond 10 January 2008. It may be that Mr Mehta was hoping and expecting that -- having returned to India in accordance with the Indian order by 10 January 2008 and established himself to be in good standing with the Indian court by complying with its order -- he would be able to obtain new permission to travel in order to make the re-fixed hearing of 31 January. The evidence before us does not really encompass points to this extent of detail.

Despite his permission to leave India from 2 December 2007, as a result of various difficulties first in obtaining his travel documents and then actually in departing the country -- and there was one abortive attempt to fly out of Mumbai Airport which did not work because the immigration authorities at the airport had not been informed of the dispensation given by the Indian authorities to an Interpol red alert previously made against him -- it was not until 22 December that Mr Mehta was able to begin the travels for which he had sought permission to leave India. In those circumstances Mr Mehta applied, albeit not until 9 January 2008, to the Indian court to re-fix the period of allowed travel of forty days to run not from 2 December (which was the current order of the Indian court) but only from the date of his departure from India on 22 December; thus to run not to 10 January 2008 which was the original order, but to 31 January 2008. It so happens, as a matter of coincidence, that a period of forty days from departure on 22 December takes the period of travel up to 31 January. It is not that Mr Mehta was (simply by reworking an extended period of travel of forty days) deliberately putting it out of his power to be in London on the day on which he had to return to India.

Nevertheless, the question did arise, as Mr Mehta’s most recent evidence to the English Court shows, as to whether he could ask the Indian court -- could and should ask the Indian court -- to extend its forty-day permission to run not only from 22 December 2007, but beyond 31 January 2008 so as to encompass the need for him to be in London on that day. Thus, he would need to ask for some forty-one or forty-two days’ leave of absence from India. However, Mr Mehta’s Indian law advice, to which he has or will shortly depose, when he has transformed (if he has not already done so) his witness statement into an affidavit, was that Mr Mehta should not attempt to try the Indian court’s patience by requesting not only his travel permission to run from 22 December but also to be for more than a period of forty days. It will be recalled that his original application had been for forty-seven days (he was only allowed forty days) and perhaps it was also in the mind of his Indian lawyers that reference to the London hearing of 27 November did not lead to the Indian court’s grant of travel dispensation in such a way as to encompass Mr Mehta’s presence in London on that day, since he was not allowed to leave until 2 December. I have dealt with that matter.

In Mr Mehta’s new application to the Indian court for an extension of his travel permission, Mr Mehta put it in this way that, not having been able to leave the country until 22 December 2007:

“…consequently all the obligations of the Applicant pertaining to his business and litigations abroad had to be rescheduled and accordingly, the Applicant is required to continue his travel and stay abroad up to 31 January 2008.”

That is not entirely correct. In fact his obligations pertaining to litigation abroad required him to be in London on 31 January 2008 itself and it is possible that Mr Mehta could, consistently with his Indian lawyer’s advice, have found a polite way of requesting the Indian court to extend its consideration -- both to Mr Mehta but also as a matter of comity to the English court -- by allowing him a little more than forty or forty-one days. At any rate it is Mr Mehta’s evidence that, on his Indian lawyer’s advice, he did not think it wise to trespass upon the Indian court’s patience to that extent.

Now, Mr Mehta’s new application of 9 January 2008 was not reached by the Indian court until 22 January 2008. On that day Mr Mehta was still outside India and had technically been in breach of the Indian court’s order since 10 January. However, on that day the Indian court granted Mr Mehta permission to stay abroad until 31 January 2008, as had been requested. By then he had made plans to return to India, which he reached on 23 January 2008. Until 22 January the Indian court had not extended time for him to be abroad. As of the previous day he would have been in breach of the Indian court order and, as it was, he was temporarily in breach of that order between 10 and 22 January. However, Mr Mehta says that he was advised by his Indian lawyers that, with his application in place as of 9 January, he would not be in breach if the Indian court conceded his application. He therefore took that risk by returning to India only on 23 January.

In the meantime, the re-fixed hearing of 31 January was fast looming and Mr Mehta had done nothing whatsoever to prepare for that until, at any rate, close to the last moment, on 29 January, when he gave instructions to his London solicitors Byrne and Partners, with the assistance of a letter from his Indian lawyers Hariani and Co of the same date, to request the judgment creditor -- Islamic Investment Company of the Gulf (Bahamas) Limited -- to adjourn the 31 January hearing on the basis that Mr Mehta had to be in India on that day. Consent was not forthcoming and therefore on the following day, 30 January 2008, Byrne and Partners took out an application to apply for an adjournment of the hearing of 31 January 2008 on the basis of the evidence constituted by the letter from Hariani and Co.

That letter, a brief one-page letter, set out the essential facts namely, that Mr Mehta had originally been given permission to travel abroad for forty days from 2 December and that on an application for an extension of time to return to India:

“…the Court was pleased to grant the same only up to 31 January, 2008 as he was required here [India] for the purpose of investigation.”

That letter was not strictly accurate. It was of course accurate to the extent that Mr Mehta only had permission to be out of India until 31 January 2008, but the impression that it would have given the reader was that the reason why Mr Mehta had to be back in India by 31 January was that he was then required to be in India for the purpose of investigation. The fuller facts, which have only emerged in the last week or so as a result of further evidence put before the court by Mr Mehta, are to the effect which I have stated earlier in this judgment.

On the next day, 31 January, Mr Mehta was of course not in London. He did not appear before the court officers for his examination. The position was explained before the court officers. There was no adjournment granted by them and the matter then -- in the ordinary way pursuant to Part 71 -- came before the duty judge, who was Bean J that day, for the purposes of an application by Islamic Investment Company for a suspended order of committal. The way that CPR 71.8 appears to contemplate matters working is that if a person against whom an order for examination had been made under Part 71.2 had failed to attend the court or had otherwise refused to comply with his obligations under order, then the matter would be referred to a High Court or Circuit judge and that that judge “may” -- see rule 71.8(2) -- make a committal order against that person. Rule 71.8(4) provides that if a committal order is made the judge will direct that the order shall be suspended provided that the person attends court at the time and place specified in the order and otherwise complies with the terms of that order and the original order and that, if the person fails to comply with any term upon which the committal order is suspended, he shall be brought before a court to consider whether the committal order should be discharged. So, what the rule contemplates is that there may be a committal order; that that committal order, if made, will be suspended; that it will be discharged if the debtor complies with the order then made and any outstanding order, but that if the order is not complied with there will not be automatic enforcement of the committal order but that the debtor should be brought before a judge to consider whether the committal order should be enforced or whether it should, in the words of the rule, be discharged.

This matter was brought before Bean J that day. Bean J made an order in the terms of Rule 71.8. That order was made on a standard form of document which reflects the circumstances and the wording of the rule. We have no transcript of the appearance before Bean J. We are told that it was a ten-minute appearance. There is some evidence before us from Mr Benjamin Bruton of the respondent’s solicitors to say that Mr Brown, who was the court officer in question before whom Mr Mehta should have appeared for examination, had appeared before Bean J -- Mr Bruton speaking on information and belief -- and had taken Bean J through the documents which Mr Brown (the court officer) had, including Mr Mehta’s application for an adjournment of 30 January and the letter from Hariani and Co. The judge made the suspended order for committal -- that order being for committal for twenty-eight days’ imprisonment if it were to be enforced.

The order involved a re-fixed hearing of 11 March 2008 -- that is today -- and Mr Mehta has been able to come to London for the hearing today. He has been here, we are told, since the end of last month and has managed to obtain, on this occasion, permission to travel out of India for a six-month period. We do not know the details of that. So he has complied with the order for his appearance today. He is at this very moment appearing before the court officers for examination. He has further complied, at any rate nominally in making an affidavit as ordered, responding to an order that he provide certain information in writing.

So, automatically, under the terms of the order, the suspended order for committal falls to be discharged, and that is common ground -- so much so that, on behalf of the respondents, Mr Anthony Trace QC submits that this appeal (Mr Mehta’s appeal from the order of Bean J) is entirely academic and unnecessary. He nevertheless was inclined, at the beginning of this hearing, to accept the suggestion from my Lord, Tuckey LJ, that it was not as academic as all that, because if, as Mr Mehta submits, the (albeit suspended) order for committal should never have been made in the first place then Mr Mehta is entitled to have this court say that.

Mr Trace, with notable brevity, submits that there are six (I counted seven) reasons why Bean J was right to make the order that he did make, in the light of the fact Mr Mehta had, plainly and on the necessary criminal burden of proof, showed himself to be not only in contempt of court -- that is common ground (Mr Nicol accepts that Mr Mehta has been in contempt of court) -- but also in such contumacious contempt of court as to justify an order for committal, suspended or otherwise.

Mr Trace’s six or seven reasons are as follows. First, whereas Mr Mehta’s first application to the Indian court had referred to the need for him to be in London on 27 November, his second application had said nothing about the need to be in London on 31 January. On the contrary, as I have indicated, it seemed to suggest to the Indian court that the extension of his travel permission to 31 January would permit him to fulfil all of his court obligations abroad. Secondly, Mr Trace submits that nothing had been said to Master Miller on 6 December 2007 (when the date of 31 January 2008 was fixed) to suggest that that date would be a difficult or impossible one. Thirdly, Mr Trace relies upon the breach, or nominal or possible breach, of Mr Mehta under the Indian court’s order until time for him to be abroad was extended on 22 January 2008. Fourthly, Mr Trace complains about the fact that Mr Mehta had done nothing until a very late stage (that is to say until 29 January) to warn the courts or the respondents of the looming problem in relation to 31 January. Fifthly, Mr Trace complains -- although there is evidence from Mr Mehta as to the advice tendered to him from his Indian lawyers about how to approach the Indian court for his request for an extension of his travel permission (forty days from 22 December 2007) – that there is no evidence before us directly from the Indian lawyers. Sixthly, Mr Trace complains about the terms of the Hariani and Co letter of 29 January to which I have already referred: he submits that that letter gives a false impression. Seventh and finally, he submits that the case made of advice from Indian lawyers that Mr Mehta should confine his requests of the Indian court to a later period of forty days -- and could not go so far as to ask the Indian court for an extra day or two beyond on 31 January -- should be regarded as fanciful.

He therefore submits that it is as plain as day that this court can be sure -- as indeed, he submits, Bean J in his turn could be sure -- that Mr Mehta was contumacious. In answer to that, Mr Nicol submits, equally briefly, as follows: as to the first point that the reason why nothing was said as to the hearing in London on 31 January in Mr Mehta’s renewed application to the Indian court was because he was following his Indian lawyer’s advice not -- if I may put it in this way -- to push his luck beyond 31 January. Secondly, as for nothing being said to Master Miller, the point there made is that it was too early to speak then because, although he did not have permission for 31 January, he could perhaps gain that permission, having established his good credentials with the Indian court by returning in time, following compliance with their first forty-day order. As for the third point, any breach under the original Indian court’s order, that was put right by the extension given by the Indian court on 22 January and in this respect Mr Mehta was again following the advice of his Indian lawyers that all would be well, provided his application was before the Indian court. Although there is no formal evidence to that effect before this court, it does appear from the Indian court’s grant of Mr Mehta’s further permission (and this time six months’ permission) that the Indian court has certainly not held that possible or nominal breach against Mr Mehta.

Fifthly, as for there being no further letter from Mr Mehta’s legal advisers before this court, that should not, in itself, put Mr Mehta into contempt if his evidence is otherwise credible. Sixthly, as to the Hariani and Co letter, Mr Trace submits that it was accurate as far as it went; it did not give, of course, the full story and, therefore, against the background of the full story that we now know it could be said that it left much unsaid but that, nevertheless, for the reasons already given on Indian law advice, that was as much as Mr Mehta felt that he could ask of the Indian court.

The same response is, in effect, made to Mr Trace’s seventh point, that it would not have been too much to ask for one extra day or so. In that respect Mr Trace emphasises, as he is entitled to do, as far as it goes, that the Indian court had not been all that helpful before, either in granting the forty-seven days that had been originally requested or in encompassing in their first order the hearing fixed in London for 27 November.

The question for us on this appeal against the order of Bean J is essentially this, and that is whether Bean J was right in being satisfied on the criminal burden of proof that Mr Mehta, on 31 January, was not only in contempt of court, which of course he was, but was contumaciously so and in such a way as to entitle the court, as a matter of justice, to impose upon him an order of committal; in effect an order that he be held in custody in prison for twenty-eight days unless he was able to obtain a discharge of that order by complying with the further order that he appear for examination today.

In my judgment, Bean J was not entitled to make that order on that day. Despite the evidence of Mr Bruton, it must remain a little uncertain as to how clearly the matter could be put before Bean J within a ten-minute hearing. We are told that the Hariani and Co letter was before the court. I have to say for myself that, brief as it is, in the light of that letter Bean J should have paused for some considerable thought as to whether he should impose a committal order upon Mr Mehta in the light of the information that the Indian court had only been prepared to grant permission for Mr Mehta to be outside India up to 31 January 2008.

In the light of that information, I do not see how Bean J was in a position to say, there and then, that a (albeit suspended) order for committal should be made against Mr Mehta. It is true that Mr Mehta had, for many years, been a judgment debtor, and of course was not in good standing with the court, but nevertheless, long and no doubt tedious for the respondents as the history of their attempts to get Mr Mehta before the court for examination has been, the fact remains that each previous appointment had been adjourned for reasons which seemed good to the court. On the first occasion, as I have said, it was because of service difficulties. On the second occasion it was because Mr Mehta was, in truth, in prison in Belgium. On the third occasion it was because of Mr Mehta’s neck injury, which the court accepted. On the next occasion it was because Mr Mehta was in India and not permitted to be out of India, and that remained the position on 31 January.

Therefore, much as one could sympathise with the respondents and indeed with the court for losing patience with Mr Mehta, nevertheless, it could not be said, as of 31 January, that he had shown himself to be contumacious. Neither could it be said that he had shown himself to be contumacious for the full panoply of reasons which Mr Trace has put, however briefly, before us. Mr Trace is only in a position to make those submissions before us today because today we know very much more, as a result of Mr Mehta’s evidence, than Bean J knew on 31 January.

Therefore it seems to me that Bean J was not in a position to make his suspended order for committal on that day. I suspect that he was encouraged to do so by what appears to be the somewhat summary nature of the provisions of Part 71.8. It is true that that Part, quite rightly and necessarily, leaves the decision of whether to make a committal order in the discretion of the judge – see CPR 71.8(2) “The judge may…make a committal order against the person” in question. Nevertheless, everything about that rule and the notes in the White Book beneath it suggest that the making of such an order is almost a matter of form, and indeed it is provided for by the fact that there is a court form -- a standard form -- providing for this type of order. It appears to be thought that no harm is done if the very excellent consequence of such an order is that on the next occasion, under the threat of this order having been made, the judgment debtor does indeed appear for examination.

The fact is, however, that an order for committal to prison (albeit suspended) has been made. It seems to me that a judge needs to be suitably cautious about making such an order in the light of evidence before the court -- whether it is of a medical kind or, as in this case, evidence from a lawyer, relating to the fact that the judgment debtor in question was not permitted to be outside a foreign country on the day in question -- which may make it inappropriate for a suspended order to be made. It may be that in such circumstances it would be appropriate for the judge in question to issue a warning that it is very likely that, if the judgment debtor does not appear on the next occasion fixed, such an order for committal may well be made on that occasion. It may be, indeed, that the rule of the court should provide for an alternative procedure from that of an immediate suspended committal order to deal with such a hybrid case.

Nevertheless, it seems to me that Bean J erred on this occasion and it may well be that that was because the information put before him was less full than, in truth, it needed to be. Since the order should not have been made on that occasion and since the order would, in any event, have been automatically discharged, it seems to me that it is not really to the point to argue the question today, retrospectively as of 31 January, albeit in the light of all the new material put before it, as to whether Mr Mehta should properly be regarded as having been contumacious.

I can fully understand Mr Trace’s submissions, based in particular upon the terms of paragraph 12 of Mr Mehta’s second application to the Indian court -- that is the one dated 9 January 2008 -- and the terms in which the Hariani and Co letter of 29 January has been written, that Mr Mehta was neither being as frank with the Indian court nor, through the Hariani and Co letter, as frank with this court as he ought to have been. I fully understand that submission. Nevertheless, if I ask myself whether, in the light of all that we now know, it has been shown to the criminal burden of proof that Mr Mehta has been contumacious with this court, I would feel that the evidence does not go quite to that extent.

In these circumstances it seems to me that it is not simply a matter of Bean’s J order being discharged -- that, as I say, is common ground -- but I think it follows that, or the reasons which I have stated in this judgment, I agree with Mr Nicol that this appeal should be allowed, so that the order should be set aside.

I agree with my Lord for the reasons he has given. The appeal should be allowed.

So do I.