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2004 DIGILAW 6 (CAL)

MAGMA LEASING LIMITED v. JINDAL STEELS PRODUCTS

2004-01-07

JAYANTA KUMAR BISWAS

body2004
JAYANTA KUMAR BISWAS, J. ( 1 ) THE plaintiff is Civil Suit No. 35 of 1998 has taken out this application dated September 19th, 2003; it has been taken out for the following reliefs:" (a) The offer made by Bharat Steel Syndicate to purchase the said equipments be directed to be accepted by the learned Receiver; (b) The sale of the equipments to Bharat Steel Syndicate be confirmed by this Hon'ble Court; (c) The Receiver be directed to pay the purchase price to Magma Leasing Limited and Magma Leasing Limited be directed to appropriate the same in pro tanto satisfaction of its dues; (d) Upon delivery of possession of the said equipments to the purchase (sic) the Receiver be discharged; (e) Cost of this application be paid by the respondents; (f) Such further or other order or orders as to this Hon'ble Court may deem fit and proper. "the facts as appear from the application and the affidavits filed in connection therewith are these. In January 1998 the plaintiff filed Civil Suit No. 35 of 1998 in this Court against the defendants. It was filed, inter alia, (a) for a decree of Rs. 20,50,617-27p; and (b) for a decree for directing the defendants to deliver possession of the equipment hired out by the plaintiff to them under the agreement dated June 30th, 1993. In the pending suit the plaintiff filed an application (G. A. No. 383 of 1998) for appointment of receiver, judgment on admission, and sale of the equipment. By an order dated February 19th, 1998 a receiver was appointed to take symbolic possession of the equipment; by another order dated November 12th, 1998 the defendants were directed to furnish security in the sum of Rs. 20,56,000/ -. As the defendants failed to furnish the security, by order dated December 22nd, 1998 the receiver was directed to take physical possession of the equipment. Then by judgment dated July 15th, 2002 such application was allowed. ( 2 ) THE judgment dated July 15th, 2002 pronounced in the suit is reproduced below:"this is an application praying for various interlocutory reliefs including the judgment upon admission and also appointment of the Receiver. Having heard Mr. Saha and Mr. Menon, learned Counsel for the parties, I do not find any defence in the affidavit in opposition. The dues of the plaintiff are more or less admitted. Having heard Mr. Saha and Mr. Menon, learned Counsel for the parties, I do not find any defence in the affidavit in opposition. The dues of the plaintiff are more or less admitted. So there is no difficulty to pronounce a judgment as prayed for in the petition. The machines and equipments admitted were leased out to the defendants for their business. It appears and submitted by Mr. Menon that business of the defendants has been stopped. Therefore, there is no use of keeping these machines and instruments in unused condition. At the interim stage I find that an order was passed on 19th February, 1998 whereby the Receiver has been appointed. Therefore, this application succeeds. There will be an order in terms of prayer (a ). Accordingly, there will be a decree for a sum of Rs. 20,50,000/ -. The Receiver already appointed is directed to take possession of the machines. Accordingly, there will be also an order in terms of prayers (f) and (g ). As far as the Salt Lake property is concerned the Receiver shall not do anything else until and unless the application (or pro intern esso is disposed of. The plaintiff will be entitled to interim interest and interest on judgment @ 10% p. m. The sale of the machines shall be effected after making valuation of the properties by advertising in the newspapers once in "the Statesman" and once in the "bartaman. " Costs and expenses for the purpose of sale and valuation shall be borne at the first instance by the plaintiff/petitioner. Decree by drawn up expeditiously. Affidavit in Reply filed to day in Court be kept on record. Receiver and all parties are to act on a Xerox signed copy of the minutes of this order on the usual undertaking. "on July 11th, 2002 a sale notice was published in two newspapers. It was published for sale of the machines and equipment. Now this application has been made stating that in response to the sale notice the receiver received only one offer, and the receiver's acceptance of the sole offer may be confirmed with a direction to the receiver to pay the sale proceeds to the plaintiff towards pro tanto satisfaction of its dues. Now this application has been made stating that in response to the sale notice the receiver received only one offer, and the receiver's acceptance of the sole offer may be confirmed with a direction to the receiver to pay the sale proceeds to the plaintiff towards pro tanto satisfaction of its dues. Defendants 1, 2 and 5 are contesting this application, and they have filed an opposition dated October 31st, 2003, it has been replied to by the plaintiff by affidavit dated November 17th, 2003. ( 3 ) THE contesting defendants have stated that the sale in question cannot be confirmed, as it had been conducted without making proper valuation of the machines and equipment, and the conditions of sale had also not been properly settled by the receiver. It is their further case that the machinery and equipment would fetch at least Rs. 4,00,000/ -. The plaintiff in its reply has disputed the correctness of the allegations made by the contesting defendants. The plaintiff has stated in reply that the single offer of Rs. 87,000/- was accepted by the receiver with consent of representatives of the defendants. ( 4 ) THE plaintiff has also filed an affidavit dated December 10th, 2003 to bring on record the notice of motion dated February 10th, 1998 taken out by it in connection without application (G. A. No. 383 of 1998) for judgment on admission. The prayers made in the notice of motion dated February 10th, 1998 read as follows:" (a) The respondents and each one of them be directed to furnish security in a sum of Rs. 20,50,000/- in cash or in kind to the satisfaction of the learned Registrar of this Hon'ble Court within a period to be fixed by this Hon'ble Court; (b) In default of furnishing the said security the property namely premises No. AD85 situated at Saltlake City, Sector-I, Calcutta-700 064 belong (sic) to the respondents be attached and sold; (c) A judgment on admission be passed against the respondents and a decree as prayed for be drawn up in accordance with the said judgment on admission; (d) A decree be passed in favour of the petitioner for a sum of Rs. 20,50,617. 27 along with further interest on judgment @ 2. 20,50,617. 27 along with further interest on judgment @ 2. 5% per annum in accordance with the judgment on admission to be passed herein: (e) A receiver be appointed over and in respect of premises No. AD85, Saltlake City, Sector-I, Calcutta-7000064; (f) The receiver to be appointed herein be directed to take possession of the machine morefully specified in Schedule I to the agreement for lease dated 30th June, 1996 being annexure " " (sic) hereto; (g) The receiver to be appointed herein be directed to take possession of the said machine and to sell the same either by public auction or by private treaty and hold the sale proceeds thereof until further orders of this Hon'ble Court; (h) The receiver to be appointed herein be further directed to take possession of the said premises No. AD85, Saltlake City, Sector-I, Calcutta-700 064 and to make inventory of the articles and moveables lying thereat and to sell the same and to hold the sale proceeds thereof (sic) until (sic) further orders of this Hon'ble Court; (i) Ad-interim orders in terms of prayers above; (j) Such other or further order or orders as to this Hon'ble Court may deem fit and proper. "in course of hearing of his application it transpired that in terms of the judgment on admission dated July 15th, 2002 neither any decree was drawn up, nor the plaintiff ever applied for execution of the decree following such judgment. When the position was pointed out, the learned Counsel for the plaintiff submitted that in view of the judgment dated July 15th, 2002 it was not necessary for the plaintiff to make any application for execution of any decree, as the receiver was directed to take possession of the machines and sell the same. He submitted that in view of the decisions in the cases of: (1) Hiralal Patni v. Loonkaran Sethiya and Ors, AIR 1962 SC 21 ; and (2) S. M. AR. Ramaswami Chettiar v. S. M. A. M. RM. Ramaswami Chettiar, AIR 1964 Madras 39, in the facts and circumstances of this case no execution case was required to be initiated for execution of the decree passed in favour of the plaintiff by the judgment on admission pronounced on July 15th, 2002 in that suit. Ramaswami Chettiar v. S. M. A. M. RM. Ramaswami Chettiar, AIR 1964 Madras 39, in the facts and circumstances of this case no execution case was required to be initiated for execution of the decree passed in favour of the plaintiff by the judgment on admission pronounced on July 15th, 2002 in that suit. ( 5 ) RAMASWAMI's case (supra) has been relied on the contend that under Order 40 Rule 1 of the Code of Civil Procedure, 1908 a receiver can be appointed either before or after the decree is passed in a suit. While I find nothing new in this proposition, I, however, find that in Ramaswami's case it was found that the suit in which the receiver was appointed was pending, as final decree was yet to be passed therein. I do not think this decision helps the plaintiff in this case in any manner. ( 6 ) HIRALAL Patni's case (supra) has been relied on in support of the contention that the Court has power to continue the receiver already appointed in the suit, ever after the final decree, if exigencies of the case so require. No doubt this is exactly one of the propositions laid down by the Supreme Court in Hiralal Patni's case while deciding the question of tenure of a receiver appointed in a case; but I fail to see again how such proposition helps the plaintiff in the present case. ( 7 ) IN this case we are not concerned with the question whether the receiver previously appointed could be directed to continue even after the judgment on admission was pronounced. We are rather concerned with the question whether without putting the decree into execution the plaintiff is entitled to realise the decreed amount or any part thereof with the help of this Court. ( 8 ) THE plaintiff filed the suit (a) for a decree for Rs. 20,50,617-27p; and (b) for a decree for directing the defendants to deliver possession of the equipment hired out by the plaintiff to them under the agreement dated June 30th, 1993. On February 19th, 1998 a receiver was appointed to take symbolic possession of the equipment. In terms of order dated December 22nd, 1998 the receiver took physical possession of the equipment. On contest the judgment on admission was pronounced on July 15th, 2002. The judgment was that there would be a decree for Rs. On February 19th, 1998 a receiver was appointed to take symbolic possession of the equipment. In terms of order dated December 22nd, 1998 the receiver took physical possession of the equipment. On contest the judgment on admission was pronounced on July 15th, 2002. The judgment was that there would be a decree for Rs. 20,50,000/-; and the receiver would sell the equipment and hold the sale proceeds. The decree was directed to be drawn up. There is nothing on record to show that the decree was drawn up and signed. The plaintiff as the decree-holder did not initiate any proceeding for execution of the decree. On the contrary it has filed this application for confirmation of sale of the equipment by the receiver in terms of the judgment, and also for payment of the sale proceeds to it towards pro tan to satisfaction of its dues. ( 9 ) IN my view, the present application is utterly misconceived. After pronouncement of the judgment and passing of the consequent decree the plaintiff is not entitled to approach the Court passing the decree for execution of such decree without following the procedure laid down in Order 21 of the Code of Civil Procedure, 1908. In this case the plaintiff was required to follow the procedure laid down in Chapter XVII of the Original Side Rules of this Court, since the decree was passed by this Court in exercise of its ordinary original civil jurisdiction. Admittedly, the plaintiff has not initiated any execution proceeding. The suit terminated with the pronouncement of the judgment and passing of the decree, but the receiver appointed during pendency of the suit was directed to continue. This, however, does not mean that without initiating an execution proceeding the plaintiff can apply in the terminated suit for an order to confirm the sale and direct the receiver to pay the sale proceeds to it towards part satisfaction of the decree. It would have been a different thing, had the receiver come for necessary order regarding sale of the equipment. The whole thing lacks in transparency. The suit was for decree for recovery of a specified sum as well as for delivery of specific movable properties--stated to have been hired out to the defendants. Why the movable properties should now be sold by the receiver at the instance of the plaintiff has remained a mystery. The whole thing lacks in transparency. The suit was for decree for recovery of a specified sum as well as for delivery of specific movable properties--stated to have been hired out to the defendants. Why the movable properties should now be sold by the receiver at the instance of the plaintiff has remained a mystery. The procedure adopted by the plaintiff is not recognised by the law. This Court will be within its powers to direct sale of the properties in execution of the decree, provided it can issue process against the same. In the absence of an execution application it has not been possible even to ascertain such elementary thing. The receiver was evidently directed to continue to protect the interests of both the parties; and particularly to ensure that during the period between the date of passing of the decree and the date of its being put into execution neither of the parties could do any mischief by dealing with the properties. ( 10 ) IT appears that the order dated December 22nd, 1998 was, in effect, an order passed under Rules 6 and 7 Order 38 of the Code of Civil Procedure, 1908; and the receiver appointed by order dated February 19th, 1998 was directed to act as the attaching officer. It was an attachment before judgment; it was followed by the subsequent decree passed in favour of the plaintiff. As a result, had the plaintiff put the decree into execution, it would not have been necessary for it to apply for a reattachment of the properties (i. e. the equipment ). But without making an application for execution of the decree it is not entitled to file an application in the terminated suit for confirmation of sale of the attached properties by the receiver (i. e. the attaching officer), and for payment of the sale proceeds to it towards payment of the decreed dues. On facts, I find that there is absolutely no question of sale of the attached properties, when no execution application has been made by the plaintiff as yet; an order for such sale could be passed only in terms of rules contained in Chapter XVII of the Original Side Rules of this Court in a duly initiated execution proceeding. ( 11 ) FOR the foregoing reasons, I find that this application is utterly misconceived; and hence it is hereby dismissed. ( 11 ) FOR the foregoing reasons, I find that this application is utterly misconceived; and hence it is hereby dismissed. On facts, I am not inclined to make any order for costs in favour of the defendants. Application dismissed. .