Kranti Mohan Guruprasad Mehra and another v. Fatehchand Vasuram Behal
1981-03-27
V.S.KOTWAL
body1981
DigiLaw.ai
JUDGMENT - Kotwal V.S. J.- The plaintiff, respondent, was one of the partners along with the 1st appellant, that is the 1st defendant in the suit along with certain other persons in a partnership firm which was dealing in textiles and the concern was known in the mercantile world as Bhuvaneshwari Silk Mills. This partnership firm came to be dissolved on August 25, 1977 by a deed of dissolution with the net result that under the settlement, the plaintiff had become the owner of the power-looms 16 in number which were initially a part of the partnership property. First in all 25 looms were put in operation by the partnership firm and 8 looms had been entrusted to the 1st defendant under the said settlement. On October 5, 1977, the plaintiff and the 1st defendant recorded a separate agreement of hire purchase in respect of 8 out of the said looms with the consideration fixed at Rs. 1,20,000 under a stipulation that the same should be discharged by payment of monthly installments of Rs. 2,500 with interest at 18 per cent on the unpaid amount. The monthly installments were to be paid on or before the 10th day of every month, and it was to commence from November 10, 1977. The agreement contained several other clauses which are normally incorporated in a hire purchase agreement. Under clause 5, the plaintiff had a right to terminate the agreement with or without notice and to retake and resume the possession of the looms, ii there was a default of payment of 3 installments, and further it gave a right to the plaintiff even to construct or erect a brick wall in the shed where the looms were installed right from the beginning in such a manner so that the said 8 looms could be separated from the other looms belonging to the 1st defendant. On the date of the agreement, a cheque for Rs.
On the date of the agreement, a cheque for Rs. 2500 towards the initial payment under the agreement was given, and it was claimed that the said cheque bounced and was dishonoured, and no further payments towards installments had ever been paid meaning thereby that in spite of this specific agreement executed between the parties, it had not been honored by one party who had taken the looms on hire, and thereby committed the breach, and according to the plaintiff's contention, he was vested with the rights ex-facie to proceed against the defendants for the purpose of resuming the property. The agreement also stipulated that in case the contract had to be terminated on account of lapse on the part of the defendants, then a certain amount of damages was required to be paid as contained in the condition in clause 6 under which the hirer was obliged to pay to the owner the stipulated hire including interest up to the date of such determination including the apportioned hire for any broken period of the month and 40 per cent of the balance of total unpaid hire as mentioned in clause 3 as compensation for extra depreciation in the value of the said looms. In view *of the lapse committed by the defendants, the plaintiff filed Suit No. 596 of 1979 in the City Civil Court for Greater Bombay canvassing all these contentions and ultimately claiming various relief's. The first was regarding the declaration to the effect that the said agreement had been validly terminated or determined and that the plaintiff was the owner of the said looms in question whereas the 1st defendant be declared to have no concern whatsoever with the same. Rendering of the accounts of the business carried by the 1st defendant on the basis of the said looms as from August 1, 1977 was the subject-matter of the other relief. The plain-tiff also asked for a decree for the profits which had been earned by the defendant from the said date and for which purpose, the accounts were sought to be taken. A decree for damages was also asked for.
The plain-tiff also asked for a decree for the profits which had been earned by the defendant from the said date and for which purpose, the accounts were sought to be taken. A decree for damages was also asked for. The other important relief claimed was that the 1st defendant himself or through his servants and agents be restrained permanently from interfering with the plaintiff's possession of the said 8 looms and also from preventing the plain-tiff from erecting a brick wall in the said shed. Interim relief's were also claimed to the effect of asking for an interim injunction on the same lines and also asking for the appointment of Receiver with further stipulation that either of the parties may be permitted to function the looms as an agent of the Receiver. The suit came to be filed on February 5, 1979. A notice of motion was taken out by the plaintiff for claiming interim relief on the lines suggested earlier; no ad-interim relief was granted, but the Trial Court felt that the necessity of issuing notice to the other side and the question was deferred till then, except appointment of Receiver and the incidental relief, though the more prominent relief of injunction was not granted. Even though a specific plea was raised on behalf of the defendants visa is lack of jurisdiction in the said Court with a further application and a motion to decide that question of jurisdiction at the threshold, the Trial Judge declined to uphold that contention and felt that he could well decide the said question along with the notice of motion, on its own merits simultaneously. The Trial Judge felt that he had pecuniary jurisdiction” to entertain the suit, and he also felt that in substance, the suit was not one for possession. He also negatived the defendants' contention that the court-fee of Rs. 30 was insufficient as essentially it was a suit for recovery of possession and the value of the property on the showing of the plaintiff himself was worth Rs. 1,20,000 and the further contention was that even on the basis of the stipulations in the agreement vis-a-vis the quantum of damages and the amounts payable to the plaintiff, it would still exceed the pecuniary jurisdiction of the said Court.
1,20,000 and the further contention was that even on the basis of the stipulations in the agreement vis-a-vis the quantum of damages and the amounts payable to the plaintiff, it would still exceed the pecuniary jurisdiction of the said Court. On merits, the Trial Judge held that in view of the agreement coupled with the fact that no installment had been paid by the defendants, a prima facie, case had been made out by the plaintiff; that the plaintiff had a legal right covered under the agreement vis-a-vis the property in question as the property in goods had never been transferred to the defendants and there was an obvious injury to the said legal rights inasmuch as the defendants were utilising the said looms and earning profits adverse to the interest of the plaintiff. As regards the balance of convenience, the Trial Judge felt that it tilted in favour of the plaintiff. In keeping with these findings, the Trial Judge granted the notice of motion and passed an order containing several clauses. Thus, the appointment of the Court receiver was made vis-a-vis the said looms. An option was however given to the defendants when it was directed that the Receiver shall not take possession of the looms if the 1st defendant would deposit Rs. 60,000 within one month, an additional sum of Rs. 15,000, each for 3 months and Rs. 2500 per month thereafter till completing the initial consideration of Rs. 1,20,000 and the 1st defendant was also given an option along with this to give an undertaking for the interim period till the payment of the said amounts not to deal, alienate or dispose of the property in question. On the 1st defendant declining to exercise the option, the Court Receiver was to take possession of the looms in question immediately. It was further stipulated that since then, that is, from the date of the order, the 1st defendant be deemed to be functioning as the Receiver's agent and the 1st defendant was also restrained from dealing with the looms to the prejudice of the plaintiff. The order which was recorded on December 1, 1980 was challenged in appeal by the defendants. While dealing with the question of section 9A of the Code of Civil Procedure as amended after stating the facts and contentions in paragraphs 1 to 10 the Judgment proceeds: Kotwal V.S. J.-11.
The order which was recorded on December 1, 1980 was challenged in appeal by the defendants. While dealing with the question of section 9A of the Code of Civil Procedure as amended after stating the facts and contentions in paragraphs 1 to 10 the Judgment proceeds: Kotwal V.S. J.-11. Section 9A of the Code, which is the product of the amendment by the Code of Civil Procedure (Maharashtra Amendment) Act, 1970 under Maharashtra Act No. LXV of 1977 when the said section has been inserted, consists of two parts. The first sub-clause envisages that if at the hearing of an application for granting or setting aside an order granting any interim relief, including injunction and appointment of receiver made in a suit, an objection to the jurisdiction of the Court to entertain the suit is taken by any of the parties, then the Court shall proceed to determine at the hearing of such an application the issue about the jurisdiction as preliminary issue before granting or setting aside the order already granted for interim relief. Sub-clause (2) provides that in spite of the provisions contained in sub-clause (1), pending the determination of such an application vis-a-vis the claim of jurisdiction, an interim relief can be granted. . The combined reading of these two clauses of the said provisions would entail into projecting certain logical and inescapable deductions. It is contemplated that in the first instance, after filing of the suit, there comes into existence an application for interim relief. Such a prospective interim relief can be in different shape and thus can be by way of injunction, appointment of receiver or otherwise, and this last residuary clause would include other interim relief's. Either of the two situations in that behalf can be visualised. It may be that ad-interim injunction or any interim relief would be granted in a notice of motion till the service of the said notice on the other side or that this ad-interim relief may also be postponed till that time.
It may be that ad-interim injunction or any interim relief would be granted in a notice of motion till the service of the said notice on the other side or that this ad-interim relief may also be postponed till that time. The contesting party, therefore, on its appearance or any time thereafter ask for setting aside the ad-interim relief, if so granted earlier or oppose the granting of any such interim relief if not granted so far, and it is in that context that the provision contemplates an application either for granting or for setting aside an order granting any interim relief's. If a motion or an application vis-a-vis the jurisdiction of the Court to entertain the suit itself is made by the other contesting party, then it must be attended to immediately. This is obviously in consonance with the legislative intent in inserting this provision that a suit which is capable of being disposed of on the basic premise of jurisdiction, then it should be done so before any further proceeding is taken or the suit is allowed to linger and secondly, if the very foundation of the jurisdiction is brought under controversy, and if it is spelt and if the said plea is ultimately upheld, then the Court would obviously have no jurisdiction even to grant an interim relief. Such a motion can be made even at the inception, and need not be necessarily at a later stage. However, the same can be made even at the time of granting of the interim relief, and it can equally be made at the time of setting aside such an interim relief, if already granted. Once such an application or a motion is initiated by one of the parties, then the necessary obligation ipso facto devolves on the Court with the resultant consequence that the question of interim relief has got to be shelved in the back-ground, though temporarily, and to bring on the fore-front the main motion about the jurisdiction. The Court is further enjoined to proceed to hear such an application or a motion and determine the same. For that purpose, it is prescribed that the same should be treated as a preliminary issue in the suit, and it is further prescribed that this has to be done before granting of the said interim relief or if any relief so granted, then before setting it aside.
For that purpose, it is prescribed that the same should be treated as a preliminary issue in the suit, and it is further prescribed that this has to be done before granting of the said interim relief or if any relief so granted, then before setting it aside. The application for interim relief has got to be heard and disposed of expeditiously and a further qualification is cast that in view of the objection to the jurisdiction, the matter need not be adjourned to the hearing of the suit. This and the other aspect indicated earlier manifestly suggest the legislative intent that in the first instance the objection to jurisdiction itself should be dealt with expeditiously and obviously before granting the interim relief; that it should not be responsible for lingering of the suit, and that is why it should be treated as a preliminary issue and thirdly the decision of such a preliminary issue need not be postponed to the full dressed trial on merits on other issues, and thus its hearing and adjudication is brought in advance and lastly the application for interim relief should also need not be postponed to the final hearing of the suit. 13. When sub-clause (2) comes into operation, it is not as if that the entire field for the interim relief is re-opened, but what is contemplated by that provision is that if the exigencies of the situation impress the Court that either of the sides should be protected without wasting any time, howsoever short it may be, which may be consumed for determining the said preliminary issue, then the Court may on merits grant such an interim relief as it thinks proper. There are obviously two qualifications annexed by this provision. The first is that such an interim relief, even for such an interim period is to be given only if the Court is satisfied that some protection is necessary even during the short span of time during the pendency of the application taking objection to the jurisdiction. And such concession can be bestowed in favour of the party even at the time of the motion made by the other side regarding the jurisdiction of the Court, but certainly before its determination.
And such concession can be bestowed in favour of the party even at the time of the motion made by the other side regarding the jurisdiction of the Court, but certainly before its determination. Lastly, there is a qualification or a limitation about the tenure of such an interim relief, viz., that if such an interim relief is granted, then it shall hold good and be in force only up to the moment when the application or motion vis-a-vis the jurisdiction is heard and finally decided on merits treating the same as a preliminary issue. 14. It is true that it may be permissible for the Court to adopt a composite hearing of the said preliminary issue and the interim relief and even to determine the preliminary issue at such hearing and it may even be conceivable in certain circumstances such determination on both counts by a composite order. However the governing clause remaining intact would enunciate that the adjudication of the preliminary issue would precede the decision of the interim application, the applicability of which would be insisted upon equally in such a composite hearing or even in a composite order recorded on both counts, which principle is obviously founded on the sound premise that it is only the finding or decision on the preliminary issue of jurisdiction would govern the further jurisdiction of the Court to grant the interim relief. However, in that event it cannot be underestimated that though existing in the same proceeding, both matters would run on different tracks, though parallel to each other and further more the depth of the field of either of these two items would be distinct with clear gradation.
However, in that event it cannot be underestimated that though existing in the same proceeding, both matters would run on different tracks, though parallel to each other and further more the depth of the field of either of these two items would be distinct with clear gradation. Thus, it cannot be over-looked that the scheme of the said pro-vision unmistakably indicates that the court is expected to determine the objection to jurisdiction as an issue in the suit which should be treated as a preliminary issue and having regard to the concept of the pleading, the issues arising there from and the determination of such issues on evidence and on the anvil of procedure as prescribed under the Code, it would be clear that the determination of such an issue even at that stage would be on the consideration of all aspects in which the said issue is enveloped; secondly, it would be after giving the parties a full opportunity to lead all the necessary material and the evidence as they would have done when the issue was framed at the trial and lastly the determination of such an issue even at that stage would get a label of finality in so far as that proceeding and the suit is concerned. That means it is not as if that the same issue need be re-heard in the second round, when the other issues are heard at the trial, and it is equally not as if that the first round being only a prima facie, superficial view on a tentative objection while the second round being a full-fledged, final decision or adjudication on all aspects of the merits transforming the said objection into a regular issue. The user of certain phraseology cannot be without any purpose or significance. It is this depth that is in contrast with the thinner one of the interim application for an interim relief which is to be decided essentially on the prima facie view without probing deeper in the finer shades and aspects. One tends to touch the root whereas the other remains on the surface. This difference would equally be alive even if both the matters are heard at one and the same time.
One tends to touch the root whereas the other remains on the surface. This difference would equally be alive even if both the matters are heard at one and the same time. Therefore, permissibility and desirability of such a feature of composite hearing are two separable features and the coarse to be adopted can well be left to the Presiding Judge in the context of the facts and circumstances of each case. If it is decided to consider only the said preliminary issue and to keep back for the time being the interim application, then the possibility of any irreparable harm being caused to either side can well be avoided as clause (2) takes care of such a situation under which even during this interim period till the adjudication of the preliminary issue, the Court is empowered to grant the interim relief purely on interim basis. 15. Section 9A of the Code, therefore, opens on umbrella under which exists a self-contained scheme with a definited object. I am fortified in this view by ratio of two decision of this Court in Porbunderwala v. Gulam Hussein1 and Radhakishin v. Sheila Govind Mirchandani2. [Rest of the judgment is not material for the Report]