General Motors, Secunderabad v. Ad-age Outdoor Adverising, Hyderabad
2002-02-04
ELIPE DHARMA RAO
body2002
DigiLaw.ai
ELIPE DHARMA RAO, J. ( 1 ) THIS Civil Revision Petition is directed against the order dated 20-6-1998 passed in i. A (SR)No. 2561 of 1998 in O. S. No. 820 of 1995 by the learned XI Junior Civil/ assistant Judge, City Civil Court, secunderabad, whereby the learned Junior civil Judge has returned the application to the petitioner for presentation after the disposal of the case, before proper Court, having pecuniary jurisdiction. The said application was filed by the petitioner herein under Order 39 Rule 3-A (A. P. High Court amendment in 1959) read with Section 151 of the Code of Civil Procedure (for brevity the Code), to determine and call upon the respondent-plaintiff to furnish security to the tune of Rs. 29. 45 lakhs as damages for the loss and injury sustained by the petitioner by reason of the interim injunction obtained by the respondent-plaintiff in i. A. No. 913 of 1995. While returning the said application, the Court below has observed that it has no pecuniary jurisdiction to entertain such application and even it has got pecuniary jurisdiction the application can be entertained only on payment of required Court fee for the relief sought for by the petitioner on the value which he claimed as damages. The said application if entertained, it will oust the pecuniary jurisdiction of the Court. It was further observed that under Rule 3-A of Order 39 of the Code, the said application has to be made and damages be determined after disposal of the suit. ( 2 ) THE respondent - plaintiff filed the suit for perpetual injunction restraining the petitioner - defendant and his agents from removing and interfering with the erection of hoardings and electrical fittings and maintenance thereof and they also filed i. A. No. 913 of 1995 for interim injunction for the same relief during pendency of the suit under Order 39 Rules 1 and 2 of the Code which was accordingly ordered on 13-7-1995 by the Court below and the respondent - plaintiff is carrying on the business of displaying and advertising the products of its customers. It is alleged that under the guise of interim injunction, the respondent - plaintiff has given a go-by to its obligations under the said agreement to pay monthly charges to the petitioner and thus the respondent - plaintiff has committed breach of agreement.
It is alleged that under the guise of interim injunction, the respondent - plaintiff has given a go-by to its obligations under the said agreement to pay monthly charges to the petitioner and thus the respondent - plaintiff has committed breach of agreement. It is also averred that using the suit property for hoarding beyond the period of the agreement, without paying the agreed charges, is nothing but abuse of the process of law and depriving the rights of the petitioner-defendant. Therefore, the defendant filed the instant petition under order 39 Rule 3-A of the Code to determine damages payable to the petitioner- defendant. ( 3 ) MOW the learned Counsel for the petitioner-defendant has contended that the court below has failed to exercise its jurisdiction manifestly vested in it under the provisions of the Code which resulted in miscarriage of justice; that the Court below has grossly erred in not realizing the result and consequential failure of justice causing irreparable loss to the petitioner, who is entitled under law for determination, quantification 6f the damages which are required to be awarded and, therefore, prayed to allow the revision. ( 4 ) ON the other hand, the learned Counsel for the respondent - plaintiff submitted that the Court below has rightly rejected the application on the ground. if lack of pecuniary jurisdiction and payment of the Court fee inasmuch as the value of the relief sought for in the application is more than Rs. 50,000/ -. It is also submitted that even though the plaintiff has Obtained interim injunction, he paid the rents in terms of the agreement. ( 5 ) TO appreciate the rival contentions of the learned Counsel for the parties, I have gone through the material placed on record. It is pertinent to note that Rules 3-A and 3-B were inserted to Order 39 of the Code by the andhra Pradesh High Court by way of amendment in the year 1959. Before examining the aspect of maintainability of the said application filed under Rule 3-A of order 39 of the Code, let us have a glance at the other provisions of the Code having a bearing on the subject of furnishing security by the party who obtains temporary injunction during pendency of the suit.
Before examining the aspect of maintainability of the said application filed under Rule 3-A of order 39 of the Code, let us have a glance at the other provisions of the Code having a bearing on the subject of furnishing security by the party who obtains temporary injunction during pendency of the suit. ( 6 ) SECTION 95 of the Code contemplates compensation for obtaining arrest, attachment or injunction on insufficient grounds and it reads as under:". . . . . (1) Where, in any suit in which an arrest or attachment has been effected or a temporary injunction granted under the last preceding section (a) it appears to the Court that such arrest, attachment or injunction was applied for on insufficient grounds, or (b) the suit of the plaintiff fails and it appears to the Court that there was no reasonable or probable ground for instituting the same, the defendant may apply to the Court, and the Court may, upon such application, award against the plaintiff by its order such amount, not exceeding fifty thousand rupees, as it deems a reasonable compensation to the defendant for the expense or injury (including injury to reputation) caused to him. Provided that a Court shall not award, under this section, an amount exceeding the limits of its pecuniary jurisdiction. (2) An order determining any such application shall bar any suit for compensation in respect of such arrest, attachment or injunction. . . . " ( 7 ) A bare reading of this provision, makes it clear that when the plaintiff has obtained an order of arrest, attachment or injunction against the defendant and it appears to the Court that he obtained such an order on insufficient grounds or that where the suit of the plaintiff fails and it appears to the Court that there was no reasonable or probable ground for instituting the same, on application made by the defendant, the Court may, on such application, award compensation not exceeding Rs. 50,000/- which it deems as reasonable compensation to the defendant for the expenses including injury to reputation. The said ceiling of Rs. 50,000/- was enhanced from Rs. 1,000/- by way of amendment Act, 1999. ( 8 ) THE next relevant provision of law with regard to furnishing of security by the party who obtained temporary injunction is order 25 Rule 2 of the Code.
The said ceiling of Rs. 50,000/- was enhanced from Rs. 1,000/- by way of amendment Act, 1999. ( 8 ) THE next relevant provision of law with regard to furnishing of security by the party who obtained temporary injunction is order 25 Rule 2 of the Code. Order 25 of the code contemplates security for costs. Rule 2 of Order 25 reads as under:". . . . . . . 2. Effect of failure to furnish security: (1) In the event of such security not being furnished within the time fixed, the court shall make an order dismissing the suit unless the plaintiff or plaintiffs are permitted to withdraw therefrom. (2) Where a suit is dismissed under this rule, the plaintiff may apply for an order to set the dismissal aside, and, if it is proved to the satisfaction of the Court that he was prevented by any sufficient cause from furnishing the security within the time allowed, the Court shall set aside the dismissal upon such terms as to security, costs or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit. (3) The dismissal shall not be set aside unless notice of such application has been served on the defendant. . . . . . . "so according to Rule 2 of Order 25 of the code, when the plaintiff does not furnish security within time fixed by the Court, the court is empowered to dismiss the suit. ( 9 ) THE next analogous provision of the Code is Order 39 Rules 1 and 2 of the Code. Order 39 provides the case in which temporary injunction may be granted. Rule 1 reads as under:". . . . . . . .
( 9 ) THE next analogous provision of the Code is Order 39 Rules 1 and 2 of the Code. Order 39 provides the case in which temporary injunction may be granted. Rule 1 reads as under:". . . . . . . . 1 (1) 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, or (c) that the defendant threatens to dispossess 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 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. (2) The Court shall, while granting a temporary injunction to restrain such act or to make such other order for the purposes of staying and preventing the wasting, damaging, alienation, sale removal or disposition of property or dispossession of the plaintiff, or otherwise, causing injury to the plaintiff in relation to any property under disposition in the suit under sub-rule (1), direct the plaintiff to give security or otherwise, as the Court thinks fit. "rule 2 of Order 39 reads as under:". . . . . . . . 2 (1) In any suit for restraining the defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not, the plaintiff may, at any time after the commencement of the suit, and either before or after judgment, apply to the Court for a temporary injunction to restrain the defendant from committing the breach of contract or injury complained of, or any breach of contract or injury of a like kind arising out of the same contract or relating to the same property or right.
(2) The Court may by order grant such injunction, on such terms as to the duration of the injunction, keeping an account, giving security, or otherwise, as the Court thinks fit. . . . . "having regard to these provisions of law and with a view to provide security to the defendant or a party which suffers loss or damage, by virtue of grant of temporary injunction and to safeguard the interests of such affected persons, the High Court of andhra Pradesh, thought it appropriate to insert the following analogous provisions i. e. Rule 3-A and 3-B:". . . . . . 3-A: In any case where a temporary injunction is granted the court, may, at the time of the order, or at any time during the pendency of the injunction, call upon the applicant to furnish security for the amount of damages that the Court may determine as payable by the party obtaining the injunction to the other party as compensation for any injury or loss that may be sustained by the latter by reason of the injunction. 3-B: The Court, shall, on application made after the disposal of the suit, determine the amount payable under rule 3-A and make an order awarding it to the applicant. . . . . "the Rule Committee of this Court has observed that insertion of Rule 3-A will make it possible to the Court to prescribe giving security while granting injunction under Order 39 Rules 1 and 2 of the Code; whereas Section 95 of the Code empowers the Court to award reasonable compensation to the defendant in a suit in which an arrest, attachment has been effected or temporary injunction granted and it appears to the Court that such arrest, attachment or temporary injunction was applied for on insufficient grounds or where the suit failed and it appears to the Court that there was no probable or reasonable grounds for instituting the same. As can be seen from Rule 3-A, it is only for the Court, on its own motion at the time of granting injunction or during the pendency of the injunction, to call upon the applicant to furnish security; but whereas under order 25 Rule 2, the Court can either on its own motion or on the application of the defendant, order the plaintiff to give security. Same is the position under Sec. 95 of the Code.
Same is the position under Sec. 95 of the Code. ( 10 ) THE above discussion manifests the position that under Rule 3-A of Order 39, the court may on its own motion either at the time of granting injunction or during pendency of the injunction, call upon the applicant to furnish security for the amount of damages that the Court may determine as payable by the party obtaining the injunction as compensation for any injury or loss that may be sustained by the latter by reason of the injunction; whereas Rule 3-B contemplates that on application made after the disposal of the suit, the Court shall determine the amount payable under rule 3-A and make an order awarding such compensation to the applicant. ( 11 ) THEREFORE, in the present case, the I. A. (SR) filed under Rule 3-A is not maintainable for the reasons that Rule 3-A does not contemplate filing of application by a party to determine the damages, but the power was given to the Court, at the time of granting temporary injunction or at any time during pendency of the injunction to suo motu call upon the applicant to furnish security for the amount of damages that may be determined as payable by the party obtaining such injunction, as compensation for the injury or loss that may be sustained by the latter, by reason of the injunction, whereas the present I. A. was filed to direct the respondent-plaintiff to furnish security in a sum of Rs. 29. 45 lakhs as damages, sustained by virtue of temporary injunction granted by the Court. Evidently, the petitioner has no right to file such an application under Rule 3-A inasmuch as it is for the Court to exercise such a power. Under Rule 3-B, on application made after the disposal of the suit, the Court shall determine the amount payable under the preceding Rule and make an order awarding it to the applicant. It is also relevant to mention here that after assessment is made by the Court on application of the party, after disposal of the suit, in terms of Rule 3-A, it makes an order awarding it to the applicant.
It is also relevant to mention here that after assessment is made by the Court on application of the party, after disposal of the suit, in terms of Rule 3-A, it makes an order awarding it to the applicant. Therefore, it is for the Court to call upon the plaintiff to furnish security for the amount of damages that may be determined, as payable by the party obtaining injunction to the other party, as compensation for any injury or loss that may be sustained by the latter, by reason of the injunction granted at the time or during the pendency of the injunction. For the aforementioned reason the application filed by the petitioner is not maintainable in law. ( 12 ) THE observation of the Court below that if the said application is entertained, it will oust the jurisdiction of the Court is not correct, inasmuch neither Court fee is prescribed nor any ceiling is prescribed under Rule 3-A and 3-B of Order 39. As contemplated under Section 95 when once it is held that the above said application is not maintainable under Rule 3-A of Order 39, the question of payment of Court fee by the petitioner - defendant does not arise. After determination of quantum of compensation payable to the party under Rule 3-A, who suffered damages by virtue of grant of temporary injunction, the Court can award the said compensation to the party. The power to determine and award compensation is left to the Court. Further the Court can take the assistance of the parties in determining the compensation payable to the party and award of the same to the party. Rule 3-A contemplates to direct the party to furnish security for the amount of damages payable by the party who obtained injunction to the other party as compensation for any injury or loss that may be sustained by the party by the reason of injunction, whereas the power conferred under Rule 3-B can be exercised after disposal of the suit, and that on application made by the other party, the Court shall determine the amount payable under rule 3-A and make an order awarding the amount so determined from the security directed to be furnished under Rule 3-A to the applicant. Any order passed under rule 3-A or 3-B of Order 39, is appealable under Order 43 Rule l (r) of the Code.
Any order passed under rule 3-A or 3-B of Order 39, is appealable under Order 43 Rule l (r) of the Code. Therefore, while inserting the above Rules, this Court has taken care of any prejudice that is likely to cause to the party and proposed to direct to furnish security for the damages caused to the party who suffered by virtue of the grant of injunction or during the pendency of the injunction in the suit, and simultaneously taken care to provide appeal under clause (r) of Rule 1 of Order 43. ( 13 ) THE above provisions of law inserted in Order 39 of the Code by the A. P. Amendment in 1959, with an object to safeguard the interest of the party for award of compensation for the injury or loss, that may be sustained by reason of the injunction granted by the Court. As seen from the facts and circumstances of the case, though the petitioner - defendant has brought to the notice of the Court below that the respondent - defendant has suffered injury, by virtue of the temporary injunction granted by it in the above suit, keeping in view the objects and reasons for insertion of rule 3-A and 3-B to Order 39, the Court below has failed to exercise the power vested in it, in the interest of justice. If once the party has sustained injury or loss by virtue of the grant of temporary injunction or pendency of the temporary injunction granted by the Court below in the said suit, the Court should have exercised the above said power and determined the compensation payable to the petitioner - defendant and directed the respondent - plaintiff to furnish security, which shall be determined payable to the petitioner - defendant. Therefore, the Court below is directed to determine the damages payable to the petitioner - defendant towards injury and loss sustained by the petitioner - defendant by virtue of the grant of temporary injunction and call upon the respondent - plaintiff to furnish security. Therefore, after disposal of the suit, on application made by the petitioner - defendant, compensation may be awarded, if the Court below comes to the conclusion that the petitioner - defendant has sustained injury or loss, by virtue of the above said injunction. ( 14 ) UNDER Section 95, the Legislature, in its wisdom has fixed a ceiling of rs.
Therefore, after disposal of the suit, on application made by the petitioner - defendant, compensation may be awarded, if the Court below comes to the conclusion that the petitioner - defendant has sustained injury or loss, by virtue of the above said injunction. ( 14 ) UNDER Section 95, the Legislature, in its wisdom has fixed a ceiling of rs. 50,000/- as compensation payable for the loss, injury or damage whereas no such ceiling is prescribed under Rule 3-A and 3-B of Order 39. Therefore, the trial Court should have considered the fact when it was brought to the notice of the Court that by virtue of grant of temporary injunction or pendency of the temporary injunction in the above suit, the petitioner - defendant suffered injury and damages and should have fixed the compensation payable to the petitioner - defendant and called upon the respondent - plaintiff to furnish such security and after disposal of the suit, on application made by the petitioner - defendant, the trial Court should have determined the amount of compensation payable to the petitioner - defendant and passed an order awarding the same. If the compensation determined by the trial Court exceeds the pecuniary jurisdiction for which it is competent to grant under law, then the petitioner - defendant will be at liberty to claim the balance of the compensation from the appropriate Court, in accordance with general principal of law. ( 15 ) THEREFORE, the trial Court is directed to consider and pass appropriate orders while exercising the power conferred under rule 3-A of Order 39 CPC, within a period of three months from the date of receipt of copy of this order. ( 16 ) WITH these directions, the Civil Revision Petition stands disposed of. No order as to costs.