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2006 DIGILAW 420 (CAL)

HINDUSTAN PAPER CORPORATION LTD. v. KALPATARU AGRO FOREST ENTERPRISES (P) LTD.

2006-07-14

BHASKAR BHATTACHARYA, DEBASISH KAR GUPTA

body2006
BHASKAR BHATTACHARYA, J. ( 1 ) THIS mandamus appeal is at the instance of the respondents in a writ application under Article 226 of the Constitution of India and is directed against the order dated 25th january, 2006, passed by a learned single Judge of this Court by which His Lordship passed an interim order of injunction restraining the present appellants from recovering any sum out of the outstanding dues of the writ petitioner except that they would be entitled to keep in a separate account a sum of Rs. 2,25,000/- to the credit of the suit filed by them. ( 2 ) IN the writ application, the respondent No. 1 prayed for the following relief: "a) A writ in the nature of Mandamus commanding the respondents and/or their subordinates and/or their agents to act and proceed strictly in accordance with law and forbear themselves from giving any effect and/or further effect of the impugned decision as communicated by the letter dated 21-6-2006 issued by the Deputy General manager (Forest) for and on" behalf of the respondent no. 1 and as affirmed by the letter dated 8-11-2005, and directing the said respondents to rescind, recall, cancel and/ or withdraw the said letter dated 21-6-2005 and consequently directing the respondent authorities to release all the payments against the supply of bamboo under the purchase order dated 26-8-2005 and other dues to the petitioner forthwith; b) A Writ in the nature of Mandamus directing the respondent authorities not to impose any liability whatsoever upon the petitioner on the ground of Risk Purchase for the balance quantity under the Work order dated 1-6-2004; c) A Writ in the nature of prohibition prohibiting the respondent authorities from proceeding against the petitioner for penalizing them on the ground of their failure to supply the full ordered quantity under the work Order dated 1-6-2004; d) A writ in the nature of certiorari calling upon the respondents to certify and transmit the records pertaining to this case, so that conscionable justice may be rendered by passing orders in terms of prayer (a), (b)and (c) and also by setting aside the quashing the impugned notice dated 21-6-2005 and the letter dated 8-11-2005 issued by the in-charge (Commercial), HPCL; e) Rule NISI be issued in terms of prayer (a), (b), (c) and (d) above; f) Interim Order staying the operation of the impugned notice dated 21-6-2005 issued by the Deputy General Manager (Forest), hpcl and directing the respondent HPCL to make payment of the dues of the petitioner against the supply made under the purchase Order dated 26-8-2005 on such terms and conditions as may be deem fit and proper without prejudice to the rights and contention of the respective parties; g) Ad-interim order in terms of prayer (f) above; h) Any of the Writ or Writs, Order or orders and/or direction or directions as this hon'ble Court may deem fit and proper; i) Costs of and incidental in this application and your petitioner, as in duty bound, shall ever pray;" ( 3 ) THE case made out by the writ petitioner was that although undisputedly a specific amount of Rs. 18,83,000/- was due and payable to the writ petitioner by the appellant for supply of various goods, the appellant has taken decision to adjust an amount of Rs. 18,83,000/- was due and payable to the writ petitioner by the appellant for supply of various goods, the appellant has taken decision to adjust an amount of Rs. 17,21,945/- allegedly payable as liquidated damages for non-supply of goods by the writ petitioner to the appellant in respect of another transaction and according to the writ petitioner, the appellant being a "state" within the meaning of article 12 of the Constitution of India could not deprive the writ petitioner of the legal dues on the alleged plea of adjustment of rs. 17,21,945/ -. ( 4 ) IN connection with the aforesaid writ application, the writ petitioner prayed for ad interim order of injunction restraining the appellants from enforcing the aforesaid decision of adjustment and to make payment of the dues of the writ petitioner against the supply made under purchase order dated 26th August, 2005. ( 5 ) THE said prayer for interim injunction was resisted by the present appellant contending that although a sum of Rs. 18,83,000/- was undisputedly due and payable to the writ petitioner for supply of various goods out of one transaction, as the appellant has suffered damages to the extent of Rs. 17,21,945/- for the inaction and failure on the part of the writ petitioner for performing its obligation in respect of another transaction, they are entitled to adjust the said amount towards such dues. It was, further, contended that the present appellants, prior to the institution of the present writ application, had already filed a suit in the appropriate Civil Court at Assam for declaration that they were entitled to such adjustment and the same was pending: The territorial jurisdiction of this Court was also questioned by raising a specific plea that no part of clause of action had arisen within the territorial limit of this Court. ( 6 ) THE learned single Judge, by the order impugned, has come to the conclusion that the writ petitioner has made out a strong prima facie case to have an order of injunction and, thus, granted the aforesaid order. ( 7 ) BEING dissatisfied, the appellants have come up with the present mandamus appeal. ( 8 ) MR. ( 6 ) THE learned single Judge, by the order impugned, has come to the conclusion that the writ petitioner has made out a strong prima facie case to have an order of injunction and, thus, granted the aforesaid order. ( 7 ) BEING dissatisfied, the appellants have come up with the present mandamus appeal. ( 8 ) MR. Chatterjee, the learned senior advocate appearing on behalf of the appellants vehemently contended before us that his clients having already taken decision of adjustment of the dues and also having already filed a civil suit against the writ petitioner over the aforesaid dispute, the present writ application ought not to have been entertained by this Court and consequently, the learned single Judge should not have restrained his clients from recovering any sum out of the outstanding dues of the writ petitioner except a sum of Rs. 2,25,000/-when his clients have already adjusted the aforesaid amount and such action is the subject-matter of a pending civil suit in a competent Court. ( 9 ) MR. Mitra, the learned senior advocate appearing on behalf of the writ petitioner-respondent has, on the other hand, opposed the aforesaid contention of Mr. Chatterjee and has contended that in the facts of the present case the learned Trial judge rightly granted the interim order of injunction during the pendency of the writ application. Mr. Mitra contends that the appellant had no right to claim adjustment of the admitted dues payable to his client in respect of other transaction between the parties particularly when in the agreement itself there is specific clause of penalty in case of even a breach of the agreement and that amount cannot exceed more than Rs. , 2,25,000/-, as pointed out by the learned single Judge. Mr. Mitra contends that in the facts of the present case the learned, Trial judge rightly granted the order of injunction. ( 10 ) AFTER hearing the learned counsel for the parties and after going through the materials on record we find that admittedly on the date of the institution of the writ application, the appellants had already filed a suit for declaration that they were entitled to, adjust a sum of Rs. 17 lakh and odd towards, the admitted dues of the writ petitioner out of another transaction between the same parties. 17 lakh and odd towards, the admitted dues of the writ petitioner out of another transaction between the same parties. ( 11 ) IN the case before us, the sum and substance of the claim of the writ petitioner is that the respondent authority cannot adjust the aforesaid amount of Rs. 17 lakh and odd towards the admitted dues of the writ petitioner payable out of a different transaction. Whether the appellant can do so or not can be decided in the long run but the effect of the order of injunction granted by the learned Trial Judge is that the appellant is restrained from giving effect to the said decision already made which is the subject-matter of a pending civil suit; in other words, the appellant has been virtually directed to pay the entire amount after keeping aside a sum of Rs. 2,25,000/- by depositing the said amount in the pending suit. ( 12 ) IN our view, apart from the other question whether the present writ application is maintainable when a suit covering the same subject-matter is already pending between the parties, the claim of the writ petitioner being purely monetary claim, at this stage, an ad interim order of injunction cannot be granted, the effect of which is to direct the appellant to pay the amount notwithstanding the fact that the writ petitioner has not filed any suit claiming the said money and a suit filed by the appellants for adjudication of such dispute is pending before a Court of competent jurisdiction. ( 13 ) EVEN in a pure money suit, if the plaintiff makes a strong prima facie case, at the most, the plaintiff is entitled to get an order of attachment before judgment if the conditions mentioned in Order 38 of the code of Civil procedure are present but law does not provide for granting an "ad interim decree" directing the defendant to make payment of money in favour of the plaintiff before decision on merit. Instead of filing the present writ application, if the writ petitioner filed a suit in regular forum praying for simple recovery of money, the second suit would have been stayed or a Superior Court would pass analogous hearing of both the suits. Instead of filing the present writ application, if the writ petitioner filed a suit in regular forum praying for simple recovery of money, the second suit would have been stayed or a Superior Court would pass analogous hearing of both the suits. ( 14 ) IN such a situation, in our view, the learned Trial Judge could not pass the interim order as granted here by compelling the appellant to pay the money due to the writ petitioner before decision on merit as otherwise the appellant would take the risk of facing contempt. ( 15 ) WE, therefore, find that while granting the ad interim order of injunction, the learned single Judge did not follow the well-accepted principles which are required to be followed while passing an interim order of this nature. The learned Trial Judge ought to have followed the well-settled principle that existence of a prima facie case alone cannot be a ground for passing virtually an order of mandatory injunction directing the payment of money when law does not provide any direction for making payment of money before decision on merit. ( 16 ) WE, therefore, set aside the order impugned and direct the learned Trial Judge to here out the writ application-as expeditiously as possible. The learned Trial Judge will dispose of the writ application positively within one month from the date of communication of this order. If the respondent fails to file affidavit-in-opposition within a week from today, they will not be entitled to pray for extension of the time to file affidavit-in-opposition as the time fixed by the learned trial Judge has long expired. ( 17 ) THE appeal is, thus, allowed and the order impugned is set aside with the aforesaid observations. ( 18 ) IN the facts and circumstances, there will be, however, no order as to costs. Appeal allowed. .