ALBAHAR SHIPPING COMPANY, MANGALORE v. KARNATAKA STATE FINANCIAL CORPORATION, MANGALORE BRANCH
1998-06-05
H.N.TILHARI
body1998
DigiLaw.ai
H. N. TILHARI, J. ( 1 ) THIS revision under Section 115 of the CPC arises from the judgment and order dated July 3, 1993 delivered by B. Padmaraj, District Judge, dakshina Kannada, dismissing the appeal filed by the revisionist-applicant from the judgment and order dated 16-4-1993 passed by the Principal civil Judge, Mangalore, on LA. No. II rejecting the application for temporary injunction in Original Suit No. 24 of 1992. In the affidavit filed in support of the application, it has been contended that without following the due procedure of law as laid down by the Karnataka Public moneys (Recovery of Dues) Act, 1979, the 1st defendant i. e. , respondent 1-The Karnataka State Financial Corporation intends to sell the applicant's property mentioned in the schedule to the application and the 3rd defendant i. e. , the Special Tahsildar of the Karnataka State Financial corporation has got the notice published on 7-1-1992 whereby sale of applicants' property mentioned in Schedule has been proposed by auction it had been alleged that notification and proposed auction for sale under recovery proceedings is illegal. According to the case of the plaintiffs, defendant had no right to cause sale of the property of the applicants without due procedure laid down. It had also been stated that no show-cause notice has been issued as contemplated under the Karnataka public Moneys (Recovery of Dues) Act, 1979 to the plaintiffs. It has been asserted that the house which is sought to be sold is the residential house in which almost 20 persons of the family are residing and if the house property is sold, the plaintiffs-applicants and the members of their family will be rendered without roof and subject to hardship. To this application, objection was filed on behalf of the Corporation denying the allegations. It was contended that no prima facie case is there for grant of injunction as well as no irrepairable injury or uncalled for injury is going to be caused. The learned Trial Judge referring to the defendant's written statement observed that it discloses that the plaintiffs knew that they were found, due some amounts after seizure of the vehicle belonging to them and they made payment to get it released.
The learned Trial Judge referring to the defendant's written statement observed that it discloses that the plaintiffs knew that they were found, due some amounts after seizure of the vehicle belonging to them and they made payment to get it released. So it further opined that the plaintiffs were found due with reference to amounts to the defendants and when the amount was not paid, and after the seizure of the vehicle, when it was lost due to sinking, defendant 1 had no other way except to proceed for initiating recovery proceedings under the Land Revenue Act for sale of the property. He further opined that it appears that it is not the first time that notice being published for sale of plaint schedule property instead earlier the proceedings were taken and property was brought for sale by publication under Section 2, the plaintiff-applicants made payment to the 1st defendant. So it held that in these circumstances before initiating these proceedings, notices were issued to the plaintiff-appellants and had knowledge for initiation of proceedings for recovery of dues. It has been stated that the plaintiff has not made payment of the amount due. So fixing of sale by 1st defendant cannot be said to be illegal and it cannot be said that no notice was served on the plaintiff before initiation of proceedings. It held that the proceedings initiated by the 1st respondent for sale is valid and claim in the application is without merits. It held, as such, there is no prima facie case. Learned Munsiff further opined that a sum of Rs. 26,85,206-34 ps. in respect of loan amount was found due by the plaintiffs towards defendants by 20-6-1992 and an amount of Rs. 3,82,774-00 in respect of another loan. He was also to pay ffuture interest at the rate of 20%. He held that if money of the Financial Corporation is withheld, then it may cause injury to the Corporation in running its public interest business. He held that the plaintiff has enjoyed the money without repayment of the said amount, so he had no prima facie case and balance of convenience was not in his favour. On appeal being filed, the learned District Judge also held that.
He held that the plaintiff has enjoyed the money without repayment of the said amount, so he had no prima facie case and balance of convenience was not in his favour. On appeal being filed, the learned District Judge also held that. "therefore, from the materials on records, I do not find any prime facie case for granting the discretionary relief of injunction or case or special equity in the form of preventing irretrievable injustice between the parties, has been made out". The Appellate Court observed that, as per the initiation of proceedings a sum of Rs. 30,67,980-34 ps. had become due and the respondent-corporation issued notice to the appellants i. e. , the present revisionists did not care to make the payments and hence the Corporation left with no alternative. So after having recorded these findings, the lower Appellate court dismissed the appeal. Feeling aggrieved from the order of the lower Appellate Court, the plaintiffs have come up in revision before this court under Section 115 of the CPC. ( 2 ) SRI B. S. Patil, learned Counsel for the petitioners submitted that the Court has gone into the question of prima facie case on illegal presumption as if trying to find out whether the plaintiffs' suit on merits is to be decreed or not. Learned Counsel contended that prima facie case means if there is any triable case which cannot be dismissed or rejected on technical grounds, if the pleadings reveal that there is a case triable and the case cannot be thrown out on the technical ground and limitation, then it may be said prima facie case made out. Learned Counsel contended that if house is sold, petitioners will suffer irrepairable loss. They will be left with no shelter or roof and so loan recovery by sale of any hypothecated property should be stayed or direction should have been given prohibiting the sale of house pending the decision of the suit and so balance of convenience is in favour of the applicants.
They will be left with no shelter or roof and so loan recovery by sale of any hypothecated property should be stayed or direction should have been given prohibiting the sale of house pending the decision of the suit and so balance of convenience is in favour of the applicants. Learned counsel contended that by making erroneous approach to the question of prima facie case and holding that no prima facie case has been made out on an issue not warranted by law, the Court has acted illegally in holding that there was no prima facie case as well as coupled with other aspects of the matter keeping in view the provisions of the Constitution of India. He contended that before initiating recovery proceedings, notice should have been given keeping in view the principles of natural justice and fair play. Because, every action which has got a tendency of civil consequences of depriving a person of his right, those proceedings should be taken or order should be passed after following the principles of natural justice which are not done. So initiation of proceedings are illegal and null and void and so these questions have to be tried. He contended that certificate issued under Section 3 (1) of the Karnataka Public moneys (Recovery of Dues Act), 1979 should have been issued only after issue of notice. He contended that no notice was issued to the petitioners before issue of certificate by the Deputy Commissioner. ( 3 ) THESE contentions of the learned Counsel for the revisionist-applicant have been hotly contested on behalf of respondents by Sri D. S. Joshi. Sri Joshi contended that in a revision under Section 115, the applicant has to make out a case of jurisdictional error on the part of the trial Court in passing the impugned order. He further submitted that no doubt there is power conferred under CPC to Civil Court to grant temporary injunction, but before granting temporary injunction, the court has to consider whether there is prima facie case and it has to adjudge balance of convenience of the parties. He submitted that on this point, the Trial Court has recorded its findings on the facts and circumstances of the case and they are the pure and simple findings of fact and they need not be interfered with.
He submitted that on this point, the Trial Court has recorded its findings on the facts and circumstances of the case and they are the pure and simple findings of fact and they need not be interfered with. He submitted that the applicant has got no equity in his favour as he has not repaid the amount and really amount due is Rs. 30,67,980-34 ps. and if he deposits atleast 50% of the amount due so for, the respondent may defer the auction of the house of the applicants. Learned Counselalso contended that it is wrong to say that no notice was issued before initiation of proceedings and invited my attention to Annexure-R5 which has been filed along with the counter affidavit. ( 4 ) I have applied my mind to the contentions raised by the Learned Counsels for the parties. There cannot be any dispute that the jurisdiction of this Court under Section 115 is confined to jurisdictional error namely exercise of jurisdiction not vested or illegal usurpation of jurisdiction not vested, illegal refusal to exercise jurisdiction vested or in cases where the Court is shown to have acted illegally or with material irregularity in exercise of jurisdiction, this Court may interfere under section 115 provided the applicant makes out a case that if the order is allowed to continue, it has a tendency to cause irrepairable loss or injury and injustice to the party affected. I may refer to one more category which comes out from clauses (a), (b) and (c) which has also been expressed and laid down by their Lordships of the Privy Council and their lordships of the Supreme Court, where the Court below by giving a wrong decision on a question of fact touching the jurisdiction either usurps the jurisdiction not vested or refuses to exercise jurisdiction vested as laid in Jaychandlalbabu v Kamalaksha Chaudhury , as well as in the case of Chaube Jagdish Prasad and Another v Ganga Prasad chaturvedi. Their Lordships of the Supreme Court in Chaube Jagdish prasad's case, supra, have further been pleased to observe that.
Their Lordships of the Supreme Court in Chaube Jagdish prasad's case, supra, have further been pleased to observe that. "there are two classes of cases dealing with the power of Tribunal, (1) Where the Legislature entrusts the Tribunal with jurisdiction including the jurisdiction to determine whether the preliminary state of facts on which exercise of its jurisdiction depends exists; and (2) Where the Legislature confers jurisdiction on such Tribunals to proceed in a case where certain state of facts exists or is shown to exist. The difference is that in the former case, the Tribunal has power to determine the facts giving it jurisdiction and in the latter case it has power only to see that a certain state of facts exists". Their Lordships, thereafter, referred to paragraph 19, the Privy Council's decision of Jayachandlal Babu's case, supra and also observed:"but if on the other hand it decides jurisdictional fact erroneously and thereby assumes jurisdiction not vested in it or deprives itself of jurisdiction so vested, then power of interference under Section 115 of the CPC becomes operative". ( 5 ) HERE, in the present case Order XXXIX, Rule 1 jurisdiction is conferred on the Court to grant temporary injunction. Order XXXIX, Rule 1 reads as under:"rule 1. Cases in which temporary injunction may be granted. Where in any suit it is proved by affidavit or otherwise (a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or (b) that the defendant threatens, or intends, to remove or dispose of his property with a view to defrauding his creditors, (c) that the defendant threatens to disposses the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit, the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property (or dispossession of the plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit) as the Court thinks fit until the disposal of the suit or until further orders".
( 6 ) A reading of Order XXXIX, Rule 1 reveals that wherein any suit the property in dispute is in danger of being wasted, damaged or alienated by any party to the suit, as per clause (a) the Court may grant an order of temporary injunction restraining such act. The Court has got jurisdiction to grant temporary injunction to maintain status quo between the parties. What is the meaning of prima facie case". This Court has considered the expression "prima facie case" in the case of Nagaraj v Krishna. In paragraph 12 it has been observed;""prima facie case has always got to be distinguished from prima facie title. Prima facie case really means that there is a case which requires trial and the case is not the one based on erroneous or vexatious grounds. In an earlier decision in the case of Krishna Moorthy v Bangalore turf Club, this Court has observed, "the traditional theory underlying the grant or refusal of interlocutory injunction has always been that the Court abstains from expressing any opinion upon the merits of the case until the hearing, but acts merely to minimise the sum total of irrepairable damage to the litigants". This Court depricated the tendency as has been adopted by the Courts in deciding the case on merits at the stage of motion for interim injunction. Hon'ble Justice K. Jagannatha Shetty observed that. "i am constrained to make these observations because, the lower court in this case has virtually decided the case while granting interlocutory injunction. Such practice, if I may add, is wholly undesirable", (vide para 8 ibid)SO prima facie case means the case which requires trial and the pleas raised by the plaintiff call for an answer and if there is any case in which the case should be answered, the case requires trial and decision. No doubt, there are many pleas raised in the present case which required to be answered, whether the proceedings under Section 3 of Karnataka public Moneys (Recovery of Dues) Act, 1979 were initiated according to law, whether any notices were required to give before the initiation of proceedings by the respondents, if not, its effect, whether it has been given or not and if not what is the effect of the proceedings whether initiation of recovery proceedings are, as such, bad or not? these are the material questions which are required to be decided.
these are the material questions which are required to be decided. It has not been shown that the suit could be dismissed as frivolous or without jurisdiction or as not maintainable. So if there has been a case which has to be tried, what would be the final result is a different matter. But if a case is to be tried, it means prima facie case is made out. When a subordinate Court proceeds to determine the question of fact devoid of the basic principles of law on which it has to be decided as well as by misquoting while deciding that question, then decision on that question of fact may be said as if contrary to the basic principles while deciding the question. That decision may be said to suffer from illegality or irregularity. But mere prima facie case is no ground to grant temporary injunction. Equity and balance of convenience should always be taken note of and conduct of the party has to be looked into. It has also been ruled out in Assistant Collector of Central Excise, Chandan Nagar, west Bengal v Dunlop India Limited and Others , that merely because prima facie case has been made out, jurisdiction of court is not there to grant temporary injunction or in a suit of recovery proceedings without examining the question of balance of convenience on one hand if it is asserted that if the house is sold out, the applicant and members of his family may be rendered homeless. Under the head of "fundamental right to live", the right of the person to protection and shelter from the vagaries of nature can also be said to be enshrined. In the case of a public interest oriented companies when they run their business in the interest of the public and they advance loan, they advance it for the purpose that persons may utilise it for the purpose of their business and return so that it may also help other needy persons. So the person who is taking money on loan is expected to pay back that amount. Any way in this case it has been pointed out that carriage vessel had drowned in the sea. The applicant had suffered loss.
So the person who is taking money on loan is expected to pay back that amount. Any way in this case it has been pointed out that carriage vessel had drowned in the sea. The applicant had suffered loss. If the house is sold and his business is lost, he will be nowhere, but on the other hand the necessity of the Corporation also have to be kept in mind. Looking to the circumstances, learned Counsel for the respondents graciously submitted that if the applicant is prepared to pay or deposit the sum of Rs. 13,00,000/-, the company may think of withdrawing the notice and recovery proceedings itself. This approach of the learned Counsel appears to be justice oriented and has to be appreciated. At this stage, the learned Counsel for the applicants submitted that some extension period may be given and the amount of Rs. 13,00,000/- which was due on 1996 so far is concerned he may be allowed to deposit to the extent of 50% of that amount in the extended period. The amount which has been due as per certificate in 1996 equity requires the applicant to deposit. He may be allowed to deposit the same in two instalments or three instalments. Considering the circumstances, I think it proper that the order of the court below, in such circumstances, be set aside. Really, there has been a jurisdictional error on the part of Courts below while deciding the question of balance of convenience as the Courts below did not apply the mind to the difficulties likely to be caused on the applicant i. e. , petitioner on his house being sold and he being rendered homeless and being deprived of roof and shelter, keeping in view human consideration. ( 7 ) THUS the revision is to be allowed and is allowed subject to the conditions mentioned hereinafter. The orders impugned are set aside and the relief of temporary injunction is hereby granted in favour of the plaintiff-revision petitioner and against the respondents restraining the respondents from selling the house or the schedule property of the plaintiff/applicants pending the decision of the suit subject to the condition that the applicants deposit initially within three months a sum of Rs. 5,00,000/- and thereafter he makes a further deposit of another sum of Rs. 5,00,000/- within a period of next six months from the date of first deposit.
5,00,000/- and thereafter he makes a further deposit of another sum of Rs. 5,00,000/- within a period of next six months from the date of first deposit. The balance amount of rs. 3,00,000/- or more i. e. , out of sum so far due as per the certificate or notice, the remaining balance should be deposited within a further period of eight months from the date of second deposit. Thus, the total amount of Rs. 13,00,000/- in every case shall be deposited within a period of 18 months from today. If this condition is fulfilled, temporary injunction order will continue and will be operative. In case of breach of these conditions of deposit or failure to deposit the entire amount within this period of 18 months, the injunction order shall automatically stand vacated unless for some specific, sufficient reason this Court considers it to give further some more time for compliance. The Trial Court is expected to expedite the hearing of the case and if possible the suit may be decided, in every case, within a period of two years and not more. The revision is thus finally disposed of as allowed to this extent. --- *** --- .