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2004 DIGILAW 1079 (MAD)

Chokhani International v. Pachiappan Enterprises

2004-08-16

V.KANAGARAJ

body2004
ORDER :- The above Civil Revision Petition is directed against the fair and decretal order dated 1-10-2002 made in I.A. No. 7851 of 2002 in O.S. No. 1183 of 2000 by the Court of III Additional City Civil Judge, Chennai. 2. Tracing the history of the above Civil Revision Petition coming to be filed, it comes to be known that the respondent herein has filed the suit in O.S. No. 1183 of 2000 before the lower Court as against the revision-petitioner for recovery of a sum of Rs. 6,57,315,20 together with interest at 18% p.a. on Rs. 4,67,840/-from the date of plaint till the date of realisation and for costs. 3. It further comes to be known that pending the suit, the petitioner herein has filed the Interlocutory Application in I.A. No. 7851 of 2002 under Order 37, Rule 3 of CPC praying to grant leave to the defendant to file its written statement and contest the case on merits and since the said petition was dismissed by the Court below, the petitioner/defendant has come forward to file the above civil revision petition on grounds as brought forth in the grounds of revision. 4. On the part of the petitioner/defendant, it would be argued that the mandatory provision of serving a copy of the plaint and the enclosures along with summons has not been complied with even though the summons was received on 26-7-2000 by the defendant-company at New Delhi; that the defendant-company also entered appearance on 25-8-2001; that the defendant-company has been kept in dark regarding the suit claim and that they have got triable issues and on such grounds, would pray to grant leave to the defendant to file the written statement and contest the suit on merits. 5. During arguments, the learned counsel appearing on behalf of the petitioner would submit that the respondent should have obtained permission from the Bombay High Court prior to filing the suit since a Receiver was appointed by the Bombay High Court regarding all the properties of the petitioner-company; that in the counter filed by the revision-petitioner in the petition filed by the respondent/plaintiff before the lower Court for attachment before judgment, it has been very clearly stated that the revision-petitioners are the protectors and custodians of the property. At this juncture, the learned Senior Counsel for the petitioner would cite a judgment of the Honourable Apex Court delivered in Everest Coal Company Pvt. Ltd. v. State of Bihar, reported in AIR 1977 SC 2304 wherein it has been held : "............When a Court puts a Receiver in possession of property, the property comes under Court custody, the Receiver being merely an officer or agent of the Court. Any obstruction or interference with the Court's possession sounds in contempt of that Court. Any legal action in respect of that property is in a sense such an interference and invites the contempt penalty of likely invalidation of the suit or other proceedings. But, if either before starting the action or during its continuance, the party takes the leave of the Court, the sin is absolved and the proceeding may continue to a conclusion on the merits. In the ordinary course, no Court is so prestige-conscious that it will stand in the way of a legitimate legal proceeding for redressal or relief against its Receiver unless the action is totally meritless, frivolous or vexatious or otherwise vitiated by any sinister factor. Grant of leave is the rule, refusal the exception. After all, the Court is not, in the usual run of cases, affected by a litigation which settles the rights of parties and the Receiver represents neither party, being an officer of the Courts. For this reason, ordinarily the Court accords permission to sue, or to continue. The jurisdiction to grant leave is undoubted and inherent, but not based on black-letter law in the sense of enacted law. Any litigative disturbance of the Court's possession without its permission amounts to contempt of its authority; and the wages of contempt of Court in this jurisdiction may well be voidability of the whole proceeding. Equally clearly, prior permission of the Court appointing the Receiver is not a condition precedent to the enforcement of the cause of action. Nor is it so grave a vice that later leave sought and get before the decree has been passed will not purge it. If, before the suit terminates, the relevant Court is moved and permission to sue or to prosecute further is granted, the requirement of law is fulfilled. Of course, failure to secure such leave till the end of the lis may prove fatal. If, before the suit terminates, the relevant Court is moved and permission to sue or to prosecute further is granted, the requirement of law is fulfilled. Of course, failure to secure such leave till the end of the lis may prove fatal. "Since the principle is based on contempt of Court, statutory follow-up actions are carved out as exceptions (suits under O. 21, R. 63). Likewise, where no relief is claimed against the Receiver. Similarly, whether the Receiver was appointed in a collusive suit or the order itself was unjustified are beside the point. The property being in custodia legis, the Court's leave, liberally granted is needed. It is the Court appointing the Receiver that can grant leave. If a suit prosecuted without such leave culminates in a decree, it is liable to be set aside." Citing the above judgment, the learned counsel for the petitioner would pray to allow the above civil revision petition setting aside the fair and decretal order passed by the lower Court. 6. On the other hand, the learned counsel appearing on behalf of the respondent would submit that the respondent was not at all a party to the proceedings before the Bombay High Court. The learned counsel for the respondent would further submit that the letters show that the bills are not cleared; that the revision-petitioner falsely alleges that he has not been served with the copy of the plaint along with the summons; that even the grounds of the revision petition do not reveal either the suit number in which the Receiver was appointed or what is the actual proceeding initiated before the Bombay High Court and this respondent was totally kept in dark so far as the affidavit filed by the other side is concerned; that the revision-petitioner kept everything in secrecy; that only if the suit is filed by the Receiver, permission of the Court is necessary and not otherwise. The learned counsel would point out that in the judgment cited by the learned counsel for the revision-petitioner, the Court found triable issues and in the case in hand, no triable issues were raised by the revision-petitioner/defendant. On such arguments, the learned counsel appearing on behalf of the respondent would seek to dismiss the above civil revision petition. 7. The learned counsel would point out that in the judgment cited by the learned counsel for the revision-petitioner, the Court found triable issues and in the case in hand, no triable issues were raised by the revision-petitioner/defendant. On such arguments, the learned counsel appearing on behalf of the respondent would seek to dismiss the above civil revision petition. 7. In consideration of the facts pleaded, having regard to the materials placed on record and upon hearing the learned counsel for both, this Court is able to assess that it is an application filed on the part of the defendant in the suit under Order 37, Rule 3, CPC praying to grant leave to defend the suit since there are triable issues raised on its part and the scope for contesting the suit is wide and hence would not only claim that the respondent is to be permitted to contest the suit but also would seek to set aside the fair and decretal order passed by the lower Court refusing to grant leave. It would also be pointed out that no proper notice has been served on the petitioner so as to enable them to resist their claim or to file an application of this sort in time and even though, of late, the notice had been served, no compliance of the mandatory provisions of law in annexing the copy of the plaint and the documents annexed with the same as a result of which the petitioner/defendant was not in a position to immediately come forward to raise their voice and hence would pray to allow the above civil revision petition setting aside the fair and decretal order passed by the Court below. 8. On the other hand, on the part of the respondents it would be argued that notice has been well served in spite of which the petitioner was lethargic in coming forward to file an application of this sort in time as a result of which the decree has been passed and sale proceedings have been initiated so far as the petitioner's properties are concerned. On the part of the petitioner, it would be pointed out that in another suit filed by a third party, against the petitioner/defendant, all his properties have been attached by the Bombay High Court besides appointing a Receiver to deal with all such properties and, therefore, the execution proceedings initiated by the respondent herein is a myth since nothing is available particularly the properties sought to be attached for sale. 9. However, it would be seen that the attachment made by the Bombay High Court was an attachment before judgment and the respondent is not a party to the said proceeding so as to know as to what happened regarding the said suit proceeding at all. 10. In the above scenario, the petitioner/defendant has come forward to file an application under Order 37, Rule 3, CPC seeking to grant leave to defend the suit and the same having been stiffly resisted on the part of the respondent/plaintiff, the trial Court, in consideration of the facts and circumstances encircling the whole affair connected to the suit and the petition filed by the petitioner herein and with due opportunity for both parties to be heard and having had its own discussions, would ultimately dismiss the application filed by the petitioner herein stating that there are no triable issues for the petitioner to offer so as to grant leave to defend the suit and hence the above civil revision petition. 11. On the contrary, this Court is able to find on materials made available that two strong pleas have been taken on the part of the defendant (i) challenging the very maintainability of the suit in the facts and circumstances of the suit, and (ii) casting aspersions on the bills produced which are vital for arriving at the suit sum and, therefore, falling in line with the proposition laid down in the above judgment, it could be seen that it is not a case without any triable issue at all and hence it is only desirable to permit the petitioner/defendant to defend the suit. However, it is a long pending matter and the purpose of the suit should not also be defeated by delay and, therefore, while permitting the defendant to defend the suit by grant of leave, this Court is of the further view to issue a direction to the lower Court to expedite the trial procedure and hence the following order : In result, (i) The above Civil Revision Petition succeeds and the same is allowed. (ii) The fair and decretal order dated 1-10-2002 made in I.A. No. 7851 of 2002 in O.S. No. 1183 of 2000 by the III Additional City Civil Judge, Chennai is hereby set aside. (iii) The petition in I.A. No. 7851 of 2002 in O.S. No. 1183 of 2000 on the file of the Court of III Additional City Civil Judge, Chennai stands allowed. (iv) Consequently, the judgment and decree dated 1-10-2002 rendered in O.S. No. 1183 of 2000 by the Court of III Additional City Civil Judge, Chennai, is also set aside and restored to file for trial to be conducted. (v) The Court of III Additional City Civil Judge, Chennai is directed to expedite the trial procedure in O.S. No. 1183 of 2000, dealing with the same out of turn so as to deliver the judgment on merits and in accordance with law, at any cost within six months from the date of receipt of a copy of this order. However, in the circumstances of the case, there shall be no order as to costs. Consequently, CMP No. 19878 of 2003 is closed.