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2004 DIGILAW 926 (JHR)

Indian Oil Corporation v. Shiv Shankar Singh

2004-09-09

body2004
JUDGMENT Narendra Nath Tiwari, J. 1. In this writ application the petitioner has prayed for quashing the order dated 12.3.2004 passed in Execution Case No. 13 of 2000 whereby petition filed by the petitioner under Order XXI, Rule 99 read with Rule 101 of CPC has been rejected holding the same not maintainable. 2. Admittedly, the petitioner was not a party to the arbitration award dated 1.6.2000 which was sought to be executed in Execution Case No. 13 of 2000 in the Court of Sub-Ordinate Judge, 1st Court, Dhanbad. 3. The petitioners case is that the petitioner is a Corporation, a Government Company, and it had a retail outlet at Belchari in Dhanbad District. In the year 1995, the petitioner-company had allotted retail outlet to respondent No. 2, Ammlal Kisku under the Scheduled Tribe category, on certain terms and conditions described in the letter of offer dated 4.9.1995. Respondent No. 2 is merely a licensee to run the said retail outlet. It was stipulated in term No. 18 that the respondent No. 2 shall not deliver possession to any other person of the said outlet situate over the land taken on lease for 30 years from the respondent No. 1, Mr. Shiv Shankar Singh by a registered indenture of lease dated 31.12.1996. It was also the term that respondent No. 2 shall not induct any partner. The further case is that a complaint was received in the Ministry of Petroleum and Natural Gas which was followed by an inquiry. It was found in the inquiry that the respondent No. 2, in violation of the terms and conditions of the lease agreement, entered into a partnership and executed a power-of- attorney in favour of the respondent No. 1 giving him a right to operate the business. The petitioner-company thereupon directed respondent No. 2 to revoke the said power-of-attorney given in favour of the respondent No. 1 and to freeze the bank account which was being operated jointly by the respondent Nos. 1 and 2 under an agreement of partnership. Thereafter respondent No. 2 submitted an affidavit confirming that the same will not be repeated in future. The company had then given further opportunity to the respondent No. 2, as he is a member of Scheduled Tribe. However, dispute arose between the respondent Nos. 1 and 2 under an agreement of partnership. Thereafter respondent No. 2 submitted an affidavit confirming that the same will not be repeated in future. The company had then given further opportunity to the respondent No. 2, as he is a member of Scheduled Tribe. However, dispute arose between the respondent Nos. 1 and 2 in respect of the said partnership which led to a reference petition under Section 11 of the Arbitration and Conciliation Act, 1996 before the Patna High Court, which was registered as Request Case No. 2 of 1998. In the said case, an order was passed to refer the dispute to arbitrator. In the said arbitration proceeding the respondent No. 2 did not appear. Even after the reference, the respondent No. 2 did not bring relevant facts to the notice of the arbitrator and an award (Annexure-3) dated 1.6.2000 was passed in collusion. The claim of the respondent No. 1 was that he had entered into a partnership with the respondent No. 2 for carrying business in Petrol, Diesel, Lubricants and likes under the name and style of M/s. Kisku @ K. Automobiles by virtue a deed of partnership dated 19.1.1997 and for which respondent No. 2 provided land and the respondent No. 1 invested a. sum of Rs. six lakhs by way of working capital. The respondent Nos. 1 and 2 had obtained registration certificate under the Bihar Sales Tax Act and the outlet was operated by the said partnership firm from 19.1.1997 to 30.6.1997. During the said period the business of the firm flourished and registered a record sale of Rs. 1,41,24,640.61 p. resulting into a net profit of Rs. 1,68,356.29 p. The respondent No. 2, however, started depriving the respondent No. 1 of his share in the profit, which led to the said dispute. The arbitrator subsequently rendered the award in favour of the respondent No. 1 and a sum of Rs. 22,53,983/- was awarded to the respondent No. 1 which included the amount invested by him, profit upto 30.3.2000 at the rate of Rs. 21,000/- per month and interest at the rate of 10% per annum on the capital from 19.1.1997 to 30.3.2000 and the said amount of Rs. 22,53,983/-was held recoverable by respondent No. 1 from respondent No. 2. 22,53,983/- was awarded to the respondent No. 1 which included the amount invested by him, profit upto 30.3.2000 at the rate of Rs. 21,000/- per month and interest at the rate of 10% per annum on the capital from 19.1.1997 to 30.3.2000 and the said amount of Rs. 22,53,983/-was held recoverable by respondent No. 1 from respondent No. 2. In the award the arbitrator also suggested for appointment of a receiver to run the business of petrol pump till realisation of the awarded amount. The petitioner contended that the award and appointment of receiver in absence of the petitioner is improper and unsustainable. The execution proceeding was levied on the basis of the said award being Execution Case No. 13 of 2000. The executing Court appointed one Sri Mahadeo Pandit, an Advocate of Dhanbad as Receiver. On coming to know about the said appointment of receiver the petitioner-company filed a petitioner under Order XXI, Rule 99 read with Rule 101 of CPC in the executing Court 1st Subordinate Judge, Dhanbad. The said petition was registered as Misc. Case No. 21 of 2004. It was contended that the petrol pump belonged to the petitioner-company and there cannot be any partnership agreement between the respondent Nos. 1 and 2 in respect of the same. The petitioner-company has only given licence to the award debtor to operate the said business, in Scheduled Tribe category. The company cannot be compelled to hand over the possession of the petrol pump to a third person or to a receiver. The award has been illegally passed for realisation of the awarded sum from the business of the petrol pump directing the petitioner-company to cooperate. According to the petitioner, an action is being taken for terminating the dealership of the award debtor and in that view execution case is not maintainable and is liable to be dismissed. 4. A rejoinder to the said petition was filed on behalf of the award holder, stating therein that the petition under the provisions of Order XXI, Rule 99 read with Rule 101 CPC is not at all maintainable and the same has been filed at the instance of the respondent No. 2 in order to delay the recovery of the awarded sum. It was stated that when the objection was filed on behalf of the respondent No. 2 in the execution case, it was rejected by the Court. It was stated that when the objection was filed on behalf of the respondent No. 2 in the execution case, it was rejected by the Court. The instant petition was got filed by him through the said company and as such the said application is by way of a sheer mala fide, collusive and deliberately filed with ulterior intention. It was stated that earlier, an objection was filed under Section 47 of CPC by the award debtor which was dismissed after hearing. Against the said order Civil Revision No. 308 of 2003 (R) was filed in the High Court which was also dismissed by order dated 23.7.2003. On 20.9.2003 an order was then passed for realisation of the awarded amount in favour of the award holder. By order dated 12.3.2004 Sri Mahadeo Pandit, Advocate, Dhanbad was appointed receiver, in accordance with the term of the award, to run the business of the respondent No. 2 till the realisation of awarded sum. The petitioner has granted a licence to the award debtor to do the said business of the petrol pump. The petitioner has nothing to do with the dispute of partnership between the respondent Nos. 1 and 2 or with the said award and appointment of the receiver for realising the awarded sum by running the said business. 5. The executing Court on consideration of the facts, material on record and the provision of law observed that the claimant respondent has been held to be entitled to the awarded sum and in view of the Award the said sum is to be realised for the opposite party award debtor from his firm. The receiver has been appointed to run the business of the said firm-the petrol pump. The appellant petitioner has granted licence to the award debtor for the business of petrol pump. By appointment of receiver to run the said business, there is no question of dispossession of the company petitioner. The Court below then held that the provision of Order XXI, Rule 99 read with Rule 101 is not at all attracted in the instant case and the said application is not maintainable. By the impugned order the Court below thus rejected the petitioners said petition. 6. Mr. The Court below then held that the provision of Order XXI, Rule 99 read with Rule 101 is not at all attracted in the instant case and the said application is not maintainable. By the impugned order the Court below thus rejected the petitioners said petition. 6. Mr. V. Shivnath, learned counsel appearing on behalf of the petitioner submitted that while passing the impugned order, the Court below has illegally exercised its jurisdiction and the said order is vitiated in law. According to the learned counsel, the petitioner is the actual owner of the petrol pump and the respondent No. 2 is only a licensee. By the appointment of the receiver to run the said business, the petitioner will be dispossessed from the petrol pump, which is the property of the petitioner company. According to the learned counsel. Order XXI, Rule 99 provides that where a person other than the judgment debtor is dispossessed of immovable property by the holder of a decree for the possession of such property, or where such property has been sold in execution of a decree by the purchaser, he may make an application to the Court complaining of such dispossession. According to him, where any such application is made the Court has to adjudicate upon the application in accordance with provision contained therein. According to him, Rule 101 of Order XXI of CPC provides that all questions including question relating to right, title and interest in property arising between the parties to a proceeding on an application under Rule 97 and Rule 99 or their representatives, and relevant to the adjudication of the application, shall be determined by the Court dealing with the application and not by a separate suit. According to the learned counsel since the receiver has been appointed, the company petitioner will be dispossessed of the petrol pump and the remedy for the company is to file an application under Rule 99 read with Rule 101 of CPC. The learned Court below has committed serious errors of law by dismissing the said application and holding the same not maintainable. Learned counsel placed his reliance on the decision. Brahmdeo Chaudhary v. Rishikesh Prasad Jaiswal and Anr. The learned Court below has committed serious errors of law by dismissing the said application and holding the same not maintainable. Learned counsel placed his reliance on the decision. Brahmdeo Chaudhary v. Rishikesh Prasad Jaiswal and Anr. reported in (1997) 3 SCC 694 , and submitted that in case any resistance offered by an stranger occupying the decretal premises, asserting his own right must first be adjudicated upon instead of insisting upon first for handing over possession and then moving application by the appellant under Order XXI, Rule 99 of CPC. Referring to another decision Tanzeem-e-Sufia v. Bibi Haliman and Ors., reported in 2002 (3) JCR 95 (SC) : AIR 2002 SC 3083 . Learned counsel submitted that this petition was maintainable under Order XXI, Rule 99 of CPC even before the delivery of possession when the petitioner is claiming its independent right over the property and asserting possession thereof and all questions including the right, title and interest in property relevant to the adjudication should be dealt with by way of the said application and not by a separate suit. Learned counsel further advancing his argument referred the case law, J.M. Allan (Merchandising), Ltd. v. Cloke and Anr., reported in 1963 (2) All England Law Reports 258 and submitted that in the cases of the contract being illegal in its exception no action lies to recover its dues. Learned counsel submitted that the contract between the respondent Nos. 1 and 2 was against the terms of the licence and the same being unlawful, there cannot be any action to recover the same and the award of the arbitrator as such is a nullity. The said award cannot be executed and the receiver cannot be appointed for realisation of the awarded sum. Citing, KERR, on the law and practice as to receivers, 16th Edition, learned counsel urged that the Court will not, as the matter of course, appoint a receiver of the partnership assets, even where a case for dissolution is made. The Court will not appoint a receiver, unless some special ground for its interference is established and that the appointment of receiver will be made where a partner has so misconducted himself as to show that he is no longer to be trusted. There cannot be appointment of receiver where the object of the partnership is contrary to public policy. The Court will not appoint a receiver, unless some special ground for its interference is established and that the appointment of receiver will be made where a partner has so misconducted himself as to show that he is no longer to be trusted. There cannot be appointment of receiver where the object of the partnership is contrary to public policy. According to the learned counsel, there was no such situation in the instant case and the appointment of receiver itself is illegal and vitiated. 7. Mr. P.K. Sinha, learned senior counsel appearing on behalf of the respondent No. 2, on the other hand, submitted that appointment of receiver in this case is only for the limited purpose which does not at all amount to dispossession of the petitioner from any property. Relying upon Hiralal Patni v. Loonkaran Sethiya and Ors., reported in AIR 1962 SC 21 , learned counsel submitted that receiver is an officer or representative of the Court and he functions under its directions. Further, when a person is a party to the suit, the Court can direct the receiver to remove him from the possession of the property. According to the learned counsel, administration of the property by the Court through the receiver by any stretch of imagination does not amount dispossession of any third person. In the instant case the receiver has been appointed only for the purpose of running the business which was being run by the respondent No. 2 judgment awardee, till the period of the satisfaction of the award and as such the same does not amount to dispossession of the petitioner. Referring Halsburys Laws of England Vol. 32 at page 384, learned counsel submitted that a receiver appointed by the Court is in no sense an agent or trustee for the party at whose instance the appointment is made. He is an officer of the Court appointed for the benefit of all the parties to the action, and their rights inter se are not affected. Learned counsel further submitted that the respondent No. 2 is a licensee and he has been dealing with the business of the petrol pump. He is an officer of the Court appointed for the benefit of all the parties to the action, and their rights inter se are not affected. Learned counsel further submitted that the respondent No. 2 is a licensee and he has been dealing with the business of the petrol pump. The receiver has to take charge of the said business of the petrol pump and not to oust the petitioner in any way, whose right, title and interest will remain intact and in the same position as it was before the appointment of the receiver. There was thus no case of dispossession or any threat of dispossession of the petitioner and the application under Rule 99 of Order XXI, CPC, was wholly misconceived, incompetent and not maintainable and the same has been rightly rejected by the Court below. Learned counsel further submitted that in order to ward-off any apprehension of the petitioner the receiver can be changed and the petitioner-company itself can be appointed and given the charge of the receiver. The learned counsel submitted that there is no legal infirmity in the order of the Court below and the same is perfectly sound and proper. Learned counsel also submitted that the decisions referred to on behalf of petitioner are not, at all applicable in the facts and circumstances of the case and none of the said decisions supports the petitioners case. 8. After hearing the submissions of the learned counsel, this Court wanted to know from the petitioners counsel, as to whether the petitioner-company is agreeable to be appointed as receiver, as proposed by the respondent No. 1. Mr. V. Shivnath, learned counsel proved for some time to take instruction from his client which was granted. On the next date of hearing. Mr. Shivnath informed that the petitioner-company is no ready to be appointed as receiver and that the case be disposed of on its merit. 9. After hearing the parties at length on facts and law and on perusing the records I find the receiver has been appointed only to run the business of the petrol pump, which was being run by the respondent No. 2 award debtor. 9. After hearing the parties at length on facts and law and on perusing the records I find the receiver has been appointed only to run the business of the petrol pump, which was being run by the respondent No. 2 award debtor. The receiver has not been asked to dispossess or displace the petitioner from any property or the petrol pump, rather the receiver would act only within the terms of the license, to run the business of the license and as such there is no question of dispossession or any threat of dispossession of the petitioner- company as the company will have the control as a licenser with all its legal rights whatever it had to the property. The executing Court has to execute the award in accordance with its terms and the grounds assailing the award are not relevant either before the executing Court or before this Court for consideration of the merit of the petition under Rule 99, Order XXI of CPC. The Court, in such case, has to confine itself within the ambit of the said provision which envisages adjudication upon the application of a person dispossessed of its immovable property by the holder of the decree for the possession of such property of where such property has been sold in execution of a decree by the purchaser thereof. The Court can entertain application under the said provision only under the said conditions and on no other grounds, though the same might be good grounds for any other legal action, provided in law. In view of the above legal position the decisions cited by the learned counsel of the petitioner are not applicable in the facts and circumstances of the instant case. In Brahmdeo Chaudhary v. Rishikesh Prasad Jaiswal and Anr., (supra) the Supreme Court has held that the right of the obstructionist in possession of the property had to be adjudicated upon and that the executing Court can not tell such obstructionist that he must first lose possession and then only his remedy is to move an application under Order XXI, Rule 99 of CPC, and pray for restoration of possession. In Tanzeem-e-Sufia v. Bibi Haliman and Ors., reported in 2002 (3) JCR 95 (SC) : AIR 2002 SC 3083 , the Apex Court has held that on an application under Order XXI, Rule 99, CPC the Court can not refuse to hear on the ground that a suit for declaration of his title and for declaration that the decree passed in title suit is not binding is pending, Here, there is no such case. The decision in 1963 (2) All England Law Reports 258, is regarding a contract which was held to be illegal in its inception and it has been held that no action lies to recover the rent in that case. In this case the contract is not held to be illegal by any Court of law and this decision has also got no application in the facts and circumstances of the instant case. 10. In my view, learned Court below has rightly held that running of business of the petrol pump by the receiver, would not in any way amount to dispossession of the petitioner-company as the receiver has to run the business of the award debtor to realise the awarded amount is accordance with the award and has rightly come to the conclusion that the provision of Order XXI, Rule 99, CPC has got no application in the instant case and has rightly rejected the said petition. I find no infirmity in the impugned order of the Court below warranting intervention, in exercise of the jurisdiction under Article 227 of the Constitution. This application is accordingly dismissed.