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2013 DIGILAW 106 (CAL)

Ruby General Hospital limited v. Sarkar Soumitra & Company

2013-02-18

SOUMITRA PAL

body2013
JUDGMENT : - In these two revisional applications under Article 227 of the Constitution of India, the petitioners have challenged the order no. 3 dated 24th January, 2013 passed by the learned District Judge, Alipore in Misc. Appeal No. 36 of 2013 (Sarkar Soumitra & Anr -vs- Girish Neelam & Associates & Ors.). 2. It is submitted by Mr. Partha Sarathi Sengupta, learned advocate for the petitioners in C.O.494 of 2013 that though the learned Civil Judge (Junior Division) 1st Court, Alipore in his order dated 18th January, 2013 declined to grant ad-interim injunction as the plaintiffs failed to satisfy the Court that there was urgency in the matter on the ground that the cause of action arose on 24th September, 2012, however the first Appellate Court while passing an interim order of injunction did not at all consider the fact that the appellant had failed to satisfy that there was urgency in the matter more so as the memo of appeal did not contain specific grounds. In support of his submission reliance has been placed on the judgments of the Apex Court in Shiv Kumar Chadha -vs- Municipal Corporation of Delhi: J T 1993 (3) SC 238; Morgan Stanley Mutual Fund – vs- Kartick Das : 1994 (4) SCC 225 ; The Secretary & Curator, Victoria Memorial Hall –vs- Howrah Ganatantrik Nagrik Samity : (2010) 3 SCC 732 and on the judgment of the High Court in Supratik Ghosh –vs- M/s. Pasari Housing Development Pvt. Ltd. : 2000 (1) CHN 614 . 3. Mr. Kapoor, learned senior advocate appearing for the petitioner in C. O.479 of 2013 supporting the stand taken by the petitioner in C. O. 494 of 2013 and referring to the prayers in the plant has submitted that as the plaintiff is not a shareholder but an auditor of the company whose appointment was validly terminated under the provisions contained in the Companies Act, the suit itself is not maintainable and while passing the order of injunction as the provisions contained in Order 39 sub-rule (3) were not adhered to by the first Appellate Court, necessary directions may be passed setting aside the order under challenge. 4. Mr. 4. Mr. P. C. Sen, learned senior counsel appearing on behalf of the respondents supporting the impugned order submits that since removal of the auditor was not in accordance with the provisions contained in Section 190, 224(1) and (2) and 225 of the Companies Act and was ex-facie illegal, the order is valid in law. In support of his contention reliance has been placed on the judgments of the Supreme Court in Estralla Rubber –vs- Dass Estate (P) Ltd. : (2001) 8 SCC 97 and on the judgment of the High Court in NEPC Micon Ltd. –vs- Magma Leasing Ltd. & Anr. : 1999 (1) CHN 617 . 5. In order to appreciate the issue, it is necessary to set out the order under challenge which is as under: “ The record is put up today on the prayer of the appellants. The application u/o 39, rules 1 and 2 read with section 151 of the Code of Civil Procedure is moved. Heard the learned advocates for the appellants. Perused the injunction application along with all the annexures thereto. Considered. Issue notice upon the respdt nos. 1 and 2 to show cause within 10 days of its service thereof as to why they shall not be so restrained as prayed for. On perusal of the injunction application and the documents annexed herewith, I find that there is a strong prima facie case in favour of the appellants. Hence, I am inclined to pass an order of interim injunction in favour of the appellants in respect of the Schedule of the property restraining the respdts. from acting or functioning as a statutory Auditor of the proforma respdt no. 3 with effect from 01-04-2003 as on this day for a limited period till 22-02-13. Appellants are directed to comply the provision of U/o 39 rules 3 (a) & 3(b) of the Code of Civil Procedure. Requisites are to be filed at once. To 22—2-13 for S/R of notice.” 6. In this context, it is also appropriate to refer to the order dated 18th January, 2013 passed by the learned Civil Judge (Junior Division) 1st Court at Alipore, which is extracted hereunder: “The Plaintiff files a petition under order 39 Rule 1 and 2 C. P. Code for temporary injunction and an order of ad-interim injunction restraining the defendant Nos. 1 and 2 from acting/functioning as in Statutory Auditor of the Proformation- Defdt. 1 and 2 from acting/functioning as in Statutory Auditor of the Proformation- Defdt. with effect on and from the financial year beginning 1st April, 2003 in place of the pltf. on the grounds stated therein. The prayer for Ad-interim Injunction is moved today. Issue notice upon the defendant No. 1 and 2 to show cause within 10 days from service thereto as to why the prayer for temporary Injunction shall not be allowed. Perused the prayer along with the affidavit file and document submitted. Heard Ld. Advocate for the plaintiffs. This is a suit for declaration and injunction. Perused the materials available on record. From the materials available on record this Court finds that although the plaintiffs have been successful in establishing plaintiffs’ prima facie case and it is quite apparent from the documents produced by the plaintiffs but the plaintiffs have by this instant petition prayed for injunction on ad-interim basis which can be granted by the Court where the plaintiffs can satisfy the Court that there is extreme urgency in the matter. The plaintiffs failed to satisfy the Court that there is urgency in the matter as the cause of action already arose on 24.09.2012. Thus the Court finds no urgency to grant ad-interim injunction at this stage of hearing. Thus the Court does find no reason to allow the prayer of the plaintiffs. The same is refused at this stage. Plaintiffs to file requisites at once.” 7. Perusing the impugned order dated 24th January, 2013 it is evident that the first Appellate Court granted ad interim order of injunction as it found that there was strong prima facie case which the Trial Court had declined to grant as the cause of action arose on 24th September, 2012. On a reading of the said impugned order it appears that no specific reason has been given in its support. Rather a general observation has been made that it has been granted as there “is a strong prima facie case” which was “on perusal of the injunction application and the documents annexed”. That evidently there was non-application of mind is palpable as while passing the impugned order “schedule of the property” was referred to which the plaint does not contain. Rather a general observation has been made that it has been granted as there “is a strong prima facie case” which was “on perusal of the injunction application and the documents annexed”. That evidently there was non-application of mind is palpable as while passing the impugned order “schedule of the property” was referred to which the plaint does not contain. Though the Supreme Court in Morgan Stanley Mutual Fund (supra) had held that “As a principle, ex parte injunction could be granted only under exceptional circumstances” (paragraph 19) and had enumerated certain factors in which such injunction can be granted, in the instant case, however, no cogent reason, far from any specific reason, has been recorded while passing the order of injunction. In this context it is appropriate to refer to the judgment in Secretary and Curator, Victoria Memorial Hall (supra) wherein it has been held that “Absence of reasons renders the order indefensible/unsustainable particularly when the order is subject to further challenge before a higher forum”(paragraph 32). Though the Apex Court in Shiv Kumar Chadha (supra) had held that “When the statute itself requires reasons to be recorded, the Court cannot ignore that requirement by saying that if reasons are recorded, it may amount to expressing an opinion in favour of the plaintiff before hearing the defendant” (paragraph 33) and though in Supratik Ghosh (supra) it has been held that “A bare reading of Rule 3 shows that the Court shall in all cases before granting an injunction, direct notice of the application for the same to be given to the opposite party. But one exception has been made to this rule. The exception is where it appears to the Court that the object of granting the injunction would be defeated by the delay, the Court may propose to grant an injunction without giving notice of the application to the opposite party and in such event the Court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay” (paragraph 13), yet in spite of the settled principles of law, the first appellate Court chose not to give any cogent reason in support of the ad interim order passed. The principles of law laid down in paragraph 6 of the judgment in Estralla Rubber (supra) cited on behalf of the respondent furthers the case of the petitioner since if the order under challenge is sustained it would cause grave injustice as it is against the settled principles of law with regard to proviso to Order 39 Rule 3 of the Code. The judgment in NEPC Micon Ltd.(supra) is not applicable to the instant case in hand as therein the Division Bench of the High Court was considering an order passed by a learned Single Judge of the High Court in the light of the unconditional power of the High Court on its Original Side under Chapter XX Rule 3 of the Original Side Rules. 8. Therefore, as I find that the order under challenge does not contain any valid or specific reason and since the law is recording of reasons relevant to the facts of the case is sine qua non in passing such order, the Order No. 3 dated 24th January, 2013 passed by the first Appellate Court in Misc. Appeal No. 36 of 2013 (Sarkar Soumitra & Anr –vs- Girish Neelam & Associates and others) cannot be sustained and is, thus, set aside and quashed. The revisional applications are allowed. There will be no order as to costs. Urgent photostat certified copy of this order, if applied for, be furnished on priority basis.