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1992 DIGILAW 50 (PAT)

Choudhury Trading Company v. South Jharia Colliery

1992-02-11

R.N.SAHAY

body1992
JUDGMENT R. N. Sahay, J This is an appeal by the plaintiff, a registered firm. It arises out of an action for recovery of Rs. 4,43,800/ as compensation and or damages for breach of contract entered between the plaintiffs and the respondent No 1 to 6. Respondent No. 1 South Jharia Colliery was registered partnership firm having its head office at 26A, Fern Road in the City of Calcutta. It had one office at Hirapur in the District of Dhanbad. Respondents Nos. 2 to 6 were the partners of the firm. Respondents No.7 M/S Bharat Coking Coal Limited is a Govt. Company to whom the liabilities of the firm has been transferred in terms of the Coking Coal Mines (Nationalisation) Act, 1972. 2. Before nationalisation, the respondent Nos. 1 to 6 were owner and proprietors of South Jharia Colliery. The appellant was appointed sole selling agent for all kinds of coal or coke raised and manufactured by respondent Nos. 1 to 6 at their south Jharia Colliery. The terms and conditions of the agency agreement was incorporated in a deed of agreement executed by and between the parties on 21.12.1986. The said agreement has been annexed as Annexure-l to the plaint. It is the case of the appellant that respondent nos. 1 to 6 committed diverse breaches and contraventions of the terms of the aforesaid agreement. The appellant had advanced a huge amount of Rs.3,83,405.14 paise from time to time up to 31.3.1971 and all these transactions were recorded in the accounts of the plaintiff maintained and kept regularly in the ordinary course of business. In terms of the agreement, the appellant was entitled to receive all the payment for value of the Coal and Coke to be sold and despatched by the plaintiff on and from 21st November, 1969 including M/S Hindustan Steel Limited. The defendants however in breach of the agreement started despatching coal and coke directly to the parties and brought about a situation it became impossible for the appellant to function as the sole selling agent in the aforesaid colliery. 3. It appears that the parties arrived at a settlement on 1.4.1971 whereby the sole selling agency was t0 be terminated with effect from 31.3.1971 and the money advanced aforesaid on 31.3.1971 was to be confirmed and/or acknowledged by the defendants by his letter dated 1.4.1971. 3. It appears that the parties arrived at a settlement on 1.4.1971 whereby the sole selling agency was t0 be terminated with effect from 31.3.1971 and the money advanced aforesaid on 31.3.1971 was to be confirmed and/or acknowledged by the defendants by his letter dated 1.4.1971. The outstanding dues to the appellant was to be liquidated and/or to be paid off by supplying coal to the appellant to the tune of Rs. 25,000/- on the said South Jharia Colliery at the market rate or to pay the said sum to the legal tender agreement. It was further stipulated in the said agreement dated 1.4.1971 that in case the defendant nos. 1 to 6 failed to comply with any of the terms of the settlement the Sole Selling Agency was to revive. The appellant, in view of the settlement intimated to M/s Hindusthan Steel Limited to make direct payment to respondent Nos. 1 to 6. On 30.6.1971 the dues of the appellant worked out at Rs. 3,89,619.98 paise which was confirmed and/or acknowledged by respondent Nos. 1 to 6 by letter dated 1.7.1971. As on 16.10.1971 the dues was Rs. 3,27,523,21 which was also confirmed and/or acknowledged by letter dated 16.10.1971 According to the appellant respondent Nos. 1 to 6 failed to abide by and/or fulfil the terms of the settlement dated 1.5.1971 by not paying the amount of Rs. 25,000/- monthly or supplying coal of the value of the said amount as agreed and in terms of the settlement, the agreement dated 23.12.1969 again revived on 2.6.1971. 4. Thereafter, the events took a turn with the Union of India promulgating an Ordinance entitled 'Coking Coal Mines (taking over management) Ordinance 1971 on 16.10.1971 which was taken effect from 17.10.1971. The appellant in terms of the provisions in the aforesaid Ordinance brought entire facts and circumstances aforesaid to the notice of the custodian General and custodian Area General Managers and other Officers of the Union of India and requested them to abide with the terms and conditions of the agreement dated 23.12.1971 which was bonafide and genuine transaction between the parties but neither onerous nor prejudicial to the interest of the colliery nor it was declared to be so by any of the officers of the Union of India. The authorities did not pay any heed to the repeated request of the appellant. The authorities did not pay any heed to the repeated request of the appellant. The Ordinance was latter substituted by Coking Coal Mines (Nationalisation) Act, 1972 and the Bharat Coking Coal Limited, respondent no. 7 was given charge of the Collieries so nationalised which included South Jharia Colliery. It is the case of the appellant that the agreement dated 23.12.1969 was binding on respondent no. 7 and the appellant made untiring efforts to impress upon the officers of the defendant no. 7 that they are "entitled to Act, as the Sole Selling Agent of the colliery untill and unless the agreement is declared to be enerous to the interest of colliery. As a matter of fact, during the period of taking over Management after nationalisation of Coking Coal Mines. the respondent no. 7 continued and allowed to Sole Selling agents to function as also appointed due selling agent. The action on the part of respondent no. 7 in allowing the appellant to continue as Sole Selling agent in terms of the agreement dated 23.3.1969 has been characterised as is highly arbitrary, illegal, unconstitutional, malafide and Act, of bad faith. The appellant filed its claim before the Commissioner of Payment appointed under the Provisions of Coking Coal Mines (Nationalisation) Act, 1973 and submitted that the order of attachment be issued on compensation payable to the defendant Nos. 1 to 6 to the tune of the value of the suit, as otherwise the appellants dues are likely to be defeated. The appellants in these premises invoked the jurisdiction of the court claiming Rs. 4,43,800/- being dues of the appellants. The details of the claim are mentioned in the Schedule of the plaint. 5. The South Jharia Colliery, respondent No.1 admitted the claim of the plaintiff in its written statement that as per the books account dated 16.10.1971 balance of Rs.3,27,523. 21 paise shown as credit balance. Ext. 2/C is the letter of respondent no.1 acknowledging the debt. The trial court has also found that Rs. 3,27,523.21 paise as outstanding due against the respondent No.1 as on 1.10.1971. The trial court however, dismissed the suit on the following grounds: (a) The loan advanced to the respondents was Money lending transaction and since the appellant has no money lending licence, the suit was barred under the Provisions of Bihar Money Lender's Act. (b) The agreement between the appellant and respondent Nos. The trial court however, dismissed the suit on the following grounds: (a) The loan advanced to the respondents was Money lending transaction and since the appellant has no money lending licence, the suit was barred under the Provisions of Bihar Money Lender's Act. (b) The agreement between the appellant and respondent Nos. 1 to 6 was in contravention of Rule 37 of the Mineral Concession Rule, 1960, since there was no approval of the State Govt. the appellant could not take any advantage from the provisions contained in Section 65 of the Indian Contract Act. (c) Under the provisions of Coking Coal Mines (Nationalisation Act), 1972, the Bihar Coking Coal Limited respondent no. 7 nor the Union of India, respondent no. 8 were liable for the liability created by the earst-while owner. The suit against the respondent Nos. 1 to 6 was not maintainable because the appellant had filed a claim before the Assistant Commissioner for payment which was latteron withdrawn. 6. The finding of the learned Subordinate Judge that the transaction in question was a money lending transaction is un-sustainable since this finding was recorded on mere assertion in the written statement of respondent Nos. 1 to 6 without producing any evidence. It is extremely surprising as to how the learned Subordinate Judge recorded this finding in absence of any evidence. 7. The finding of the learned Subordinate Judge that the agreement was void on account of contravention of Rule 37 of the Mineral Concession Rule is equally absurd and un-sustainable. The appellant was only appointed as sole selling agent of the Colliery and had nothing to do with raising of coal. There was no question of any lease. In Chief Inspector of Factories Vs. Karamchand Thapar: A.I.R. 1967 SC 838 it was held by the Supreme Court that a raising contract may not be a lease and, therefore, contractor cannot be held to be a lessee. 8. The crucial question for consideration is whether the suit against respondent Nos. 1 to 6 is barred under the Provisions of Coking Coal Mines (Nationalisation) Act, 1972. The appellant had filed a claim Under Section 23 of the Act, before the Assistant Commissioner of payment which was latter withdrawn. There is no doubt that the suit or claim against respondent Nos. 1 to 6 is barred under the Provisions of Coking Coal Mines (Nationalisation) Act, 1972. The appellant had filed a claim Under Section 23 of the Act, before the Assistant Commissioner of payment which was latter withdrawn. There is no doubt that the suit or claim against respondent Nos. 7 and 8 is not maintainable in view of Section 9 of the Act, which provides in clear terms, the liability of the owner of lessor prior to the appointed date shall not be enforceable against the Central Govt. or the Govt. Company Admittedly the liability of respondent Nos. 1 to 6 was incurred prior to the appointed date i.e. 1st May, 1972. The Subordinate Judge, therefore, was right in holding the claim of respondent Nos. 7 and 8 is not maintainable 9. The learned Subordinate Judge has held that the claim as against the respondent Nos. 1 to 6 was also not maintainable in view of Section 23 of the Nationalisation Act. Section 23 reads as follows: “Claims to be made to the Commissioner: (1) Every person having a claim against the owner of a coking coal mines or Coke even plaint shall prefer such claim before the Commissioner within thirty days from the specified date: provided that if the Commissioner is satisfied that the Claimant was prevented by sufficient cause from preferring the claim within the said period of thirty days, he may, on the expiry of the period of thirty days entertain the claim within a further period of thirty days, but not thereafter. (2).............. Section 28 of the Act, Provides: The provisions of this Act, shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to ten thousand rupees, or with both There is no express provisions in the Act, ousting the jurisdiction of the Civil Court. The Calcutta High Court in Indian Cable Co. Ltd, Vs. Lodna Colliery Co. Ltd. reported in A.I.R. 1977 Cal : 420 considered the question whether Section 23 of Coal mines (Nationalisation) Act, 1973 ousted the jurisdiction of the Civil Court. The learned single Judge referred to Cricket Club of India Ltd. Vs. The Calcutta High Court in Indian Cable Co. Ltd, Vs. Lodna Colliery Co. Ltd. reported in A.I.R. 1977 Cal : 420 considered the question whether Section 23 of Coal mines (Nationalisation) Act, 1973 ousted the jurisdiction of the Civil Court. The learned single Judge referred to Cricket Club of India Ltd. Vs. Madhav reported in (1975) 45 Com Cas 574 (Bom.) wherein the following observation have been made; "Statutory enactments, although expressed in affirmative language, are sometimes treated as having a negative implied and their provisions, though affirmative in words are not necessarily so, if they are absolute, explicit and peremptory. Every statute limiting any thing to be in one form, although it bespoken in the affirmative, yet includes in itself a negative. when there is a special affirmative power given which would not be required because there is a general power, it is always read to import the negative. Necessary implication means, not natural necessity, but so strong a probability of intention that an intention to the contrary to that which is imputed to the legislature cannot be supposed." The Calcutta High Court in this case held that the Coal Mines (Nationalisation) Act, neither directly nor by implication takes away the jurisdiction of the Civil Courts to entertain suits against the ex-owners of the collieries nationalized, and particularly so in respect of claims arising before the appointed date. In Barakar Coal Co Ltd, Vs. N. C. Mehta reported in (1977) 81 Cal WN 380 (AIR 1977 NoC 198) (Cal): it was held by a Division Bench of the Calcutta High Court that the Coking Coal Mines (Nationalisation) Act, did not take away the jurisdiction of the Civil Court. The said Act, merely laid-down the procedure for realisation of claim out of the compensation payable by the Govt. to the earst-while owners. If creditor chose not to avail of the procedure laid-down in the Act, he merely ran the risk of not being entitled to enforce his claim against money in the hands of the Commissioner. There was nothing to prevent execution of a decree against assets if any, of the earst-while owners. The decisions of Calcutta High Court (Supra) was followed by a Division Bench of Bombay High Court in M/S Oriental Coking Coal. Co. Ltd Vs. Mohab Lal Kisan Lal A. I. R. 1984 Bom. 174 10. There was nothing to prevent execution of a decree against assets if any, of the earst-while owners. The decisions of Calcutta High Court (Supra) was followed by a Division Bench of Bombay High Court in M/S Oriental Coking Coal. Co. Ltd Vs. Mohab Lal Kisan Lal A. I. R. 1984 Bom. 174 10. The argument on behalf of the appellant in the said case that Section 28 of the Coal Mines (Nationalisation) Act, 1973 ousts the jurisdiction of the Civil Court was repelled by the learned Judge in Paragraph 17 of the judgment which reads as follows: (i) Shri Samudra, the learned advocate for the appellant, tried to place great emphasis on Sec. 28 in support of his proposition that the provisions of the Coal Mines (Nationalisation) Act, 1973, in respect of adjudication of claims against the nationalised coal Mines, oust the jurisdiction of the Civil Court. Section 28 lays down that provisions of the Coal Mines (Nationalisation) Act, 1973, shall have effect notwithstanding anything contained in any other Jaw for the time being in force or in any instrument having effect by virtue of any Jaw other than this Act, or any other decree or order of any Court. Tribunal or other authority. This provision no doubt, gives overriding effect to the provisions of the Act, but as mentioned above there is nothing in the Act, which impliedly lays down that the claim which is not preferred to the Commissioner is extinguished or that no other remedy, except the one provided by Sec. 20, is available to the claimant. As mentioned above, the only effect of the failure of the claimant to make or prove his claim is that he is not entitled to share the amount placed at the disposal of the Commissioner for disbursement amongst the creditors. The remedy of a creditor to proceed against the property which is not vested in the Central Government by virtue of the provisions of the Act, and which continues in the hands of the owner of the coal mine is not taken away. Not only that but Sec. 7 and proviso to Sub-Section (4) of S. 19 make it abundantly clear that the liabilities in relation to the period prior to the appointed day, which have not been discharged on or before the specified date, shall be the liabilities of the owner of the coal mines. Not only that but Sec. 7 and proviso to Sub-Section (4) of S. 19 make it abundantly clear that the liabilities in relation to the period prior to the appointed day, which have not been discharged on or before the specified date, shall be the liabilities of the owner of the coal mines. The provisions of Chapter VI only make another limited remedy available to the claimant and nothing more". 11. However, a learned single Judge Mukherjee, J of this Court in M/S Bharat Coking Coal Ltd. Vs United Commercial Bank reported in A. I. R. 1989 Pat. 153 has held that suit for recovery of money advanced to the owner of Colliery prior to its nationalisation would not be maintainable against Central Govt. or the Govt. Company. I have also held that the suit is not maintainable against the respondent Nos. 7 and 8. The learned single Judge has further held that Section 23 of the Act, absolutely barred the jurisdiction of the Civil Court even in respect of claims against the owners. With great respect to the learned Judge the decisions of the Bombay High Court and Calcutta High Court were not considered by his Lordship. Only A.I.R. 1977 Cal (Noc) (Supra) was noticed but was brushed aside by observing that the ratio of the aforementioned case was open to question. In Gupteshwar Prasad Singh Vs. Allahabad Bank and ors. 1988 B.L.T. (Rep) 181, S. Roy, J, following the Calcutta decisions (Supra) has held that Section 23 of the Act, is an additional forum and it does not oust the jurisdiction of the Civil Court under the general law. Mukherjee, J, has differed from the view expressed by S. Roy J, in Gupteshwar Singh case (Supra). Judicial property demanded in such a situation the case should have been referred to a Division Bench. I am, therefore, not obliged to refer this case to a Division Bench to decide the correctness of the ratio in A.I.R. 1989 Pat. 159. This decision, in my opinion, is obiterdicta, as the only question which arose for consideration in the said case was whether the suit against the Central Govt. and Govt. Company was maintainable or not. I have taken the same view but I have no doubt the suit against earst-while owners in respect of claims prior to the appointed date is perfectly maintainable. and Govt. Company was maintainable or not. I have taken the same view but I have no doubt the suit against earst-while owners in respect of claims prior to the appointed date is perfectly maintainable. The learned Subordinate Judge was wrong in dismissing the suit against respondent Nos. 1 to 6 who had offered no evidence in support of their plea. 12. For the reasons discussed above, this appeal is allowed. The judgment and decree of the trial court is set-aside and the plaintiffs suit is decreed as against respondent Nos. 1 to 6. The plaintiffs shall be entitled to a decree for a sum of Rs. 4,43,800/- only. He shall also be entitled to interest pendente lite and fature interest @ 12% till the amount is realised. In the facts and circumstances of the case, there shall be no order as to costs. Appeal allowed.