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2002 DIGILAW 373 (BOM)

Jayanti Gobindram Jagtiani & another v. Ilac Limited

2002-04-16

J.G.CHITRE

body2002
JUDGMENT - J.G. CHITRE, J.:---This writ petition pertains to the year 1988. Inspite of notice of hearing having been served on the respondents and that a copy of this petition was served on the Official Liquidator, the Official Liquidator of Ilac Limited refused to participate in the hearing of this writ petition by telling the Advocate of the petitioners that they should file a petition for venting out their grievances before the Bench of the Gujarat High Court where the winding up proceeding is going on in context with respondent No. 1 company which is under the process of winding up. As this petition pertains to the year 1988, this petition has been finally heard and is being decided by this judgment finally treating the respondents ex parte in view of the facts mentioned above. 2. Mr. Bharucha, Counsel appearing for the petitioners, submitted that Single Bench of Small Causes Court dismissed Rgular Eviction Suit No. 1182/4122 of 1979 holding that if the said petition is allowed and respondent Ilac Limited has been evicted from the suit shop, there would be greater hardship to the said respondent in comparison to the petitioners. The petitioners are also assailing the judgment and order passed by the Division Bench of Small Causes Court which dismissed their appeal which was meant for challenging the said judgment and order passed by the Single Bench of Small Causes Court. Mr. Bharucha submitted that now since the company has gone in liquidation and winding up proceeding is going on, the point of hardship to the respondents loses all its significance. In this context, he pointed out that the Single Bench of Small Causes Court had pointed out that the petitioner No. 2 Mrs. Savitri Mohanlal Thacker did not have the sufficient experience and knowledge of conducting the business of preparing and selling ready-made dresses for which she wanted to have the vacant possession of the suit shop. While advancing his submissions on this point, he made reference to the observations made by the learned Single Judge which have been accepted, upheld by the Division Bench of Small Causes Court which dismissed the appeal referred by the present petitioners. 3. While advancing his submissions on this point, he made reference to the observations made by the learned Single Judge which have been accepted, upheld by the Division Bench of Small Causes Court which dismissed the appeal referred by the present petitioners. 3. Shri Bharucha also submitted that it is not necessary for the petitioners to file a petition in Gujarat High Court before the Bench which is dealing with the winding up proceedings in connection with the liquidation and winding up of the respondent No. 1 limited company because so far as the present matter is concerned, no assets belonging to such company has been involved. He submitted that had there been a point touching the liquidation of assets of the respondent company, then there could have been some meaning to the opinion expressed by the Official Liquidator and Assignee appointed by the Bench of the Gujarat High Court having session over the said liquidation proceedings. In support of his submissions, he placed reliance on the judgment of the Single Bench of the Punjab and Haryana High Court in the matter of (Harbans Lal Sharma v. Chemical Vessels Fabricators Pvt. Ltd.)1, reported in 1989 Company Cases (P H) 507. 4. There would be no bar of the pendency of the winding up proceedings before the Gujarat High Court for hearing and deciding this writ petition because for hearing and deciding this writ petition, this Court would not be touching any of the aspects which is concerned with such winding up proceedings, liquidation proceedings, because the hearing and deciding this writ petition would be totally dependent on considering whether the requirement put forth by the present petitioners for evicting respondent No. 1 limited company was genuine and bona fide. This Court has to consider whether the respondent No. 1 company would be put to suffer more hardship than the petitioners in case such eviction order is passed. This Court would be also required to consider whether the petitioners would be required to face more hardship than the respondent if the order evicting the respondent No. 1 requires to be passed. Thus, this Court ignores the opinion which has been conveyed by the said Official Liquidator and Assignee appointed by Gujarat High Court to the Counsel of the petitioners. Pendency of such proceeding in any High Court would not touch such point of comparative hardship per person. 5. Thus, this Court ignores the opinion which has been conveyed by the said Official Liquidator and Assignee appointed by Gujarat High Court to the Counsel of the petitioners. Pendency of such proceeding in any High Court would not touch such point of comparative hardship per person. 5. This Court upholds the submissions of Shri Bharucha appearing for the petitioners, for the reasons stated hereunder. 6. Section 446 and section 537 of the Companies Act, 1956 would come in play only if the liquidation proceedings pending or one which is to be initiated happens to be revolving around the assets owned by such company. In the present matter, the Official Liquidator and Assignee who has been appointed by Gujarat High Court has not even whispered about 'good-will" which could have come in play even for the sake of argument. When the Official Liquidator and Assignee does not even think of such item, this Court has no hesitation in coming to the conclusion that keeping in view the nature of the matter which this Court is hearing and deciding, it is not necessary for the petitioners to go and appeal to the Bench of Gujarat High Court dealing with the said winding up proceedings. The present petition is directed towards the prayer for evicting respondent No. 1 from the suit shop where the respondent No. 1 was conducting and running a retail sale shop. Now the said company has been under-going the liquidation and winding up process. Therefore, there would not be any necessarity of considering the hardship which the Single Bench of Small Causes Court has pointed out. When the said limited company has ceased to exist and is under-going a process of winding up, there is no question of the said limited company conducting and running a retail sale shop in the suit premises-shop. 7. In this context, the observations made by the Single Bench of the Small Causes Court will have to be considered. The learned Judge has pointed out that the plaintiff No. 2 was a practicing lawyer. But after she gave birth to a child, she stopped practicing. 7. In this context, the observations made by the Single Bench of the Small Causes Court will have to be considered. The learned Judge has pointed out that the plaintiff No. 2 was a practicing lawyer. But after she gave birth to a child, she stopped practicing. The learned Judge has also pointed out that thereafter she was working as a part-time lecturer in a law college near Churchgate and, therefore, it would have been very difficult for her to attend her such assignment, job as well as this new assignment of running a shop where she wanted to sell ready-made dresses which have been tailored and manufactured. The learned Judge pointed out that her majority time of the day would be consumed in maintaining her domestic affairs as a house wife and allotting time to her part-time service in law college. Mainly considering this aspect of the possible difficulties of plaintiff No. 2, the learned Judge concluded that the bona fide requirement put forth by both the plaintiffs was not sufficient enough to be considered for the purpose of evicting respondent No. 1 from the suit shop. 8. The learned Judge also pointed out that both the plaintiffs were not claiming sufficient knowledge of tailoring such dresses and selling them in the shop. Furthermore, the said Court pointed out that the lady member from whom plaintiff No. 2 was to obtain the necessary know how of the said trade, was not examined. That non-examination of Sheela Bablani was taken to be important default on the part of the plaintiffs in proving their genuine and bona fide requirement of the suit shop. The learned Judge had also pointed out that though plaintiff No. 1 might have been having sufficient funds to enable his wife to start the said business, on account of the lack of experience and knowledge in that branch of the trade, the said requirement could not be called to be genuine and bona fide. 9. For the purpose of deciding this petition, it is necessary to point out that the same sort of attitude has been adopted by the Appellate Bench which dismissed the appeal filed by the petitioners. 9. For the purpose of deciding this petition, it is necessary to point out that the same sort of attitude has been adopted by the Appellate Bench which dismissed the appeal filed by the petitioners. When this Court is called on to deal with that aspect of the approach adopted by those two courts, this Court finds it necessary to deal with those observations made by those two courts in context with the evidence adduced by both the petitioners and their pleadings which were put forth for getting respondent No. 1 evicted from the suit shop. 10. It is not necessary in all cases that before starting a new business which does not require the expertise of high grade, a person should have sufficient experience and know-how of such trade or business. If it happens to be a business of selling readymade tailored dresses, one can get it tailored, stitched and prepared by hiring an independent agency well versed with that aspect of the business. Such person may engage such tailors in the shop or in the premises where such readymade dresses are to be tailored, stitched and are to be made readymade for sale in the shop. In the present case, the plaintiffs pointed out that plaintiff No. 2 was to take the help of Sheela Bablani in that context. Sheela Bablani may be friend of plaintiff No. 2. But non-examination of Sheela Bablani was not to be taken to be death nail to the case of the plaintiffs and was not sufficient enough to pluck out the soul from their contention of genuine and bona fide requirement of the suit shop. The evidence adduced by the plaintiffs on that count was sufficient when that was not shattered by the respondents proving the falseness behind it. 11. The learned Judge has pointed out the judgment of the M.P. High Court in respect of the provisions of M.P. Rent Act wherein the provisions are not stricter as they are as indicated by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short Bombay Rent Act). 11. The learned Judge has pointed out the judgment of the M.P. High Court in respect of the provisions of M.P. Rent Act wherein the provisions are not stricter as they are as indicated by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short Bombay Rent Act). The learned Judge has pointed out that in respect of those provisions of the Rent Act it is sufficient for the landlord to prove that he has got sufficient funds to start the business and desire to start such business and to show that inspite sufficient efforts he cannot get a suitable accommodation in the part of the city where he could start such business. The learned Judge has taken trouble to point out the difference between those provisions and the provisions of the Bombay Rent Act for ousting the prayer of the present petitioners who were plaintiffs before him. In the present case, both the petitioners were having sufficient funds to start such business and they were intending to start such business and in fact they were sure in getting the help of Sheela Bablani. Unless the evidence adduced by the plaintiffs is totally false or shown to be false or shown to be motivated by obliqueness, it is not proper to reject such evidence only because it has not been corroborated by other independent witnesses. Such evidence deserves to be accepted if it is satisfying the test of truth and credibility. Both the courts below have committed the error of disbelieving that evidence and recording the finding against the petitioners that their requirement was not genuine and bona fide. It amounts to misreading of the evidence. Not only that, it amounts to ignoring the evidence which is on record. When there is no reasonable ground to disregard such evidence, the approach adopted by those two courts below would assume the nature of recording a finding which would not have been recorded by a person of reasonable attitude. When that is done by the Court whose judgment and order has been assailed, it amounts to perversity and also amounts to illegality. 12. But now on account of the respondent No. 1 limited company getting liquidated and going through the pipe line of winding up proceedings the defects pointed out by the two courts below lose their importance. When that is done by the Court whose judgment and order has been assailed, it amounts to perversity and also amounts to illegality. 12. But now on account of the respondent No. 1 limited company getting liquidated and going through the pipe line of winding up proceedings the defects pointed out by the two courts below lose their importance. The two courts below by pointing out the defects in the evidence adduced by the petitioners were further pointing out the hardship which the respondent No. 1 limited company would be suffering if the order of evicting it happens to be passed in favour of the present petitioners who were plaintiffs before the trial Court. When the company is under liquidation, there would be no question of that limited company conducting the business of retail selling shop in the suit shop. Now, the winding up proceeding is going on and Official Liquidator and Assignee had been appointed by the Gujarat High Court. That means all the assets of the respondent No. 1 limited company would be liquidated and they would be distributed among the preferential creditors, secured creditors, non-secured creditors. There would be application of doctrine of prorata distribution of assets. When that is done, where comes the question of considering the possible hardship of such licensees? 13. As it has been pointed out in above paragraphs, now in the changed circumstances also, eviction suit filed by the present petitioners deserves to be allowed when it was deserving to be allowed on the circumstances which were prevalent before respondent No. 1 Limited Company undergoing the process of liquidation and winding up. Thus, the order which was passed by the Small Causes Court dealing with the said suit which has been upheld by the Appellate Bench of the Small Causes Court happens to be incorrect, perverse and illegal. What is incorrect, perverse and illegal cannot be permitted to survive for a single moment and, therefore, this Court finds it necessary to quash it by issuing a writ of certiorari as prayed by the petitioners. Such writ stands granted in favour of the petitioners by allowing this writ petition with costs. Rule stands made absolute. Respondent Nos. 1 and 2 are hereby directed to hand over the possession of the suit shop to the petitioners as early as possible. Such writ stands granted in favour of the petitioners by allowing this writ petition with costs. Rule stands made absolute. Respondent Nos. 1 and 2 are hereby directed to hand over the possession of the suit shop to the petitioners as early as possible. The question of mesne profit deserves to be considered in the said winding up proceedings because it deals with the claim of an unsecured creditor. Parties to act an ordinary copy of this order duly authenticated by the Private Secretary of this Court. Writ petition allowed. -----