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2015 DIGILAW 1978 (BOM)

Brenda Nazareth Menezes v. Andre de Menezes

2015-08-24

C.V.BHADANG

body2015
Judgment Admit. Learned Counsel for the respondents waives service. Heard finally with consent. 2. By this appeal, the appellants (original respondent nos.1, 2, 4 and 5) are challenging the order dated 29/07/2015 passed by the learned Civil Judge, Senior Division, Panaji in Civil Miscellaneous Application No.38/2015/A in Inventory No.57/2015/A. By the impugned order, the learned Trial Court has directed sealing of the office premises as stated in prayer (I)(b) and had ordered listing of the articles. 3. The brief facts are that the present respondent nos.1 and 2 have initiated Inventory Proceedings of the estate leavers Cosme de Menezes and his wife Maria Renee Menezes. The dispute is between the descendents of Cosme de Menezes from his first marriage on the one side and the descendents born out of second marriage of Cosme de Menezes with the appellant no.1, Brenda Menezes on the other. The case made out before the Trial Court is that the succession of estate of said Cosme, during first marriage is reflected in Agreement dated 06/11/1998, which is styled as Memorandum of Understanding (MOU). By the said MOU, deceased Cosme was granted exclusive ownership of CFL Pharmaceutical Ltd and M/s. Menezes Pharmaceutical (a Partnership Firm). Cosme died on 06/11/2013. His first wife Maria predeceased him on 16/05/1978. Cosme was suffering from Cancer since the year 2006. His condition deteriorated since October, 2012. On account of this, he was suffering from mental delirium and was disoriented as to time, place or person. Thus, according to the respondents, Cosme was incapable of managing his personal property. The appellant no.1, his second wife, was in a dominating position and got the transfers done from deceased Cosme to the benefit of her children, thereby depriving the respondents, who are the children from first marriage. (Cosme remarried with appellant no.1 on 24/10/1981.) According to the respondents, the share of the second wife and the children born out of the said marriage, is governed by Article 1235 of Portuguese Civil Code (Portuguese Code, for short). It is the material case of the respondents that they have reasonable grounds to believe that there are manipulations done by the appellants as follows :- “8(a). Change of the share-holding pattern in contravention of provision of Section 108 to 112 of the Companies Act, 1951, i.e. without following the procedure prescribed under the law to effect the transfer of shares. Change of the share-holding pattern in contravention of provision of Section 108 to 112 of the Companies Act, 1951, i.e. without following the procedure prescribed under the law to effect the transfer of shares. (b) Addition of directors on the board of the companies without following the provisions of Companies Act. (c) Unauthorised withdrawal/misappropriation of funds from company accounts and personal accounts of the deceased Cosme Menezes.” 4. The details of the said manipulations are set out in paragraph 9(a) to 9(za) of the application. It was in these circumstances that the Inventory Proceedings along with an application under Articles 429 and 430 of the Portuguese Code came to be preferred before the learned Civil Judge, Senior Division. In the application under Articles 429 and 430 of the Portuguese Code, the respondents sought for following material reliefs :- I. Direct the sealing of the premises mentioned below:- (a) 104A Vainguinim Valley, Dona Paula, Taleigaon 403001 Goa, (b) 5th Floor Dempo Tower, EDC Patto Plaza, Panaji 403001 Goa, specifically the areas mentioned below : (i) The work area/ cabin of the late Mr. Cosme's de Menezes (marked in red in the plan annexed as Annexure M) (ii) The work area/ cubicle of Helen Furtado secretary to the Late Mr. Cosme de Menezes (marked in blue in the plan annexed as Annexure M) (iii) The work area/ cubicle of Mr. Wilfred Dias, former PA to late Mr. Cosme de Menezes (marked in yellow in the plan annexed as Annexure M) II. Upon sealing, if time permits, on the same day enlistment of movables, shares, documents of the different companies be made or otherwise the same may be done or completed on the subsequent working days. III. Ad-interim, ex-parte relief in terms of prayer (I) and (II). 5. It appears that on 24/07/2015, a show cause notice was issued to the appellants and the matter was fixed on 29/07/2015. On that day, the learned Trial Court passed the following order :- “Respondents except Respondent no.6 are served and have sought time. Heard Ld. Senior Counsel Shri M. S. Usgaocar along with Adv. Ramani for the applicant. Prayer I(b) is granted. Prayer I(a) is partly granted where only listing of the articles shall be done. Prayer II is granted. Advocates Rui Gomes Pereira and Adv. Heard Ld. Senior Counsel Shri M. S. Usgaocar along with Adv. Ramani for the applicant. Prayer I(b) is granted. Prayer I(a) is partly granted where only listing of the articles shall be done. Prayer II is granted. Advocates Rui Gomes Pereira and Adv. M. P. Mulgaonkar are appointed as Court Commissioners to oversee the sealing of the premises and listing by the Bailiff of the Court to be done today on 29/7/2015 and listing on 30/07/2015 and to continue till completed. Three sets of copies to be furnished to the Court of Inventory carried out by the Bailiff of the Court in the presence of the said 2 Advocates. S/O 4/8/2015 at 10.00 a.m.” 6. Feeling aggrieved, the appellants are before this Court. 7. I have heard Shri Sardessai, the learned Senior Counsel for the appellants and Shri Lotlikar, the learned Senior Counsel for the respondents. 8. It is submitted by Shri Sardessai, the learned Senior Counsel for the appellants that the impugned order is passed without granting sufficient opportunity of hearing to the appellants. It is submitted that on 29/07/2015, on account of the short notice, the appellants had engaged a Lawyer, only to seek an adjournment. However, the learned Trial Court without granting such opportunity, had passed the drastic order of sealing of the official premises. It is submitted that the impugned order is unreasoned and is vitiated on account thereof. It is submitted that a drastic order of sealing cannot be passed, without granting reasonable and sufficient opportunity of hearing and unless reasons are articulated, which would indicate that the Court was prima facie convinced of necessity to pass such an order. It is submitted that the application dated 13/07/2015 was moved before the Court only on 24/07/2015, which would indicate that there was no urgency. It is further submitted that unless and until the Court comes to the conclusion that the very purpose of granting the relief would be frustrated unless an ad interim order in the nature thereof, is immediately granted, no such order could have been passed. It is submitted that the impugned order does not show the satisfaction of the Court on this aspect. It is submitted that on 24/07/2015, the Trial Court had granted 30 days time to the appellants to file reply. Thus, there was no need to pass an ad interim order of such a drastic nature. 9. It is submitted that the impugned order does not show the satisfaction of the Court on this aspect. It is submitted that on 24/07/2015, the Trial Court had granted 30 days time to the appellants to file reply. Thus, there was no need to pass an ad interim order of such a drastic nature. 9. The learned Senior Counsel has then submitted that even otherwise the grounds of apprehension as stated in paragraph 8(a) and (b) of the application, would not be sufficient to pass an order for sealing/ listing. It is submitted that change of shareholding pattern allegedly in contravention of Sections 108 to 112 of the Companies Act as also the addition of Directors on the Board of Companies in breach of the provisions of the Companies Act, would not justify an order of sealing. It is submitted that even so far as the ground of unauthorised withdrawal/ misappropriation of funds from the Company Account and personal account of the deceased Cosme Menezes is concerned, (as per paragraph 8(c)), the same would obviously be evidenced in the form of banking transactions and would not necessitate an order of sealing. The learned Senior Counsel would submit that apart from this, the transfers are effected with the knowledge of the respondents. The learned Senior Counsel has referred to a copy of the e-mail dated 29/04/2014 in this regard, in which there was a request for authorisation to execute the banking transaction by RTGS. He, therefore, submitted that the impugned order be set aside. Reliance is placed on the decision of the Supreme Court in the case of Secretary and Curator, Victoria Memorial Hall Vs. Howrah Ganatantrik Nagrik Samity and others, reported in (2010)3 SCC 732 , in order to submit that necessity to assign reasons is fundamental in justice delivery system, in order to ensure clarity, objectivity, transparency and fairness in decision making process. 10. On the contrary, it is submitted by Shri Lotlikar, the learned Senior Counsel for the respondents that looking to the nature of the proceedings, there has to be an element of surprise otherwise the very purpose of listing is frustrated, if the adversary indulges in misappropriation/ removal of the movables, etc. It is submitted that still the Trial Court had thought it fit to issue a show cause notice. It is submitted that still the Trial Court had thought it fit to issue a show cause notice. It is submitted that the very nature of an ad interim order does not presuppose recording of detailed reasons, particularly, when delay may defeat the very purpose of granting such relief. The learned Senior Counsel has placed reliance on the decision of the Supreme Court in the case of State of Haryana and others Vs. M.P. Mohala, reported in (2007)1 SCC 457 , in order to submit that the judgment or order in such a case has to be read in the light and in the context of the pleadings of the parties. In other words, it is submitted that the pleadings on the basis of which the said order is passed, can be considered in support of such an order. It is submitted that merely because the Trial Court has not recorded reasons, would not be sufficient to set aside such an order. The learned Senior Counsel strenuously urged that the fact that the Trial Court has not recorded reasons should not prejudice a party, particularly when the pleadings would justify passing of such an order. The learned Senior Counsel would submit that the impugned order was necessary to prevent future dissipation. The learned Senior Counsel has referred to Articles 429 and 430 of the Portuguese Code in this regard. It is submitted that the execution of the bond would not be necessary in this case. It is submitted that where there is a reasonable apprehension of concealment or dissipation of any property, movable or immovable or even the documents, the imposition of seals can be applied for and granted. 11. The learned Senior Counsel has then relied upon the decision of the learned Single Judge of the Calcutta High Court in Binod Kumar Gupta and others Vs. Rajendra Prosad Shukla, reported in AIR 2003 Cal 68 , in which an order granting ad interim ex-parte injunction was refused to be interfered with, as the order, neither demonstrated that it was passed without jurisdiction or in exercise of jurisdiction, with material irregularity. The learned Senior Counsel was at pains to point out that the impugned order would not be vulnerable only on account of lack of reasons, particularly in the context of the nature of the controversy and the reasonable apprehension of dissipation. 12. The learned Senior Counsel was at pains to point out that the impugned order would not be vulnerable only on account of lack of reasons, particularly in the context of the nature of the controversy and the reasonable apprehension of dissipation. 12. I have considered the rival circumstances and the submissions made. 13. The main thrust of the challenge on behalf of the appellants is that the impugned order is bereft of any reasons whatsoever. There cannot be any dispute with the proposition that the Courts in appropriate circumstances have discretion to grant ad interim reliefs, which can even be passed ex-parte. However, it hardly needs to be stressed that such a discretion is a judicial one, to be exercised in the fact and circumstances of each case. Before passing of such an order, the Court has to be satisfied that the very purpose of granting such relief is likely to be frustrated, if ad interim relief is not granted. A bare perusal of the impugned order would show that the same lacks such a satisfaction being recorded by the Trial Court in this case. Undoubtedly, an order of sealing of the premises official or otherwise, is a drastic order. An attempt was made on behalf of the respondents to show on the basis of a sketch of the office premises, showing the portions namely “Cosme's Cabin”, “Helen's work place” and “Wilfred's work place” (exhibit H), in order to submit that the portion, which is sealed, is minimal, as compared to the entire office premises. Prima facie, I am not impressed by the said submission. The legality or otherwise of the order cannot be decided on the basis of extent to which it operates, particularly when it is an order directing sealing of the premises. Thus, it is not possible to accept that only because the order directs sealing of a minimal part of the entire office premises, would be sufficient to sustain the same. 14. Article 431 of the Portuguese Code, to the extent relevant, reads thus :- “Article 431. The applicant shall satisfy the Court about his interest and indicate the grounds for the relief. After production and examination of the evidence, the judge shall grant preventive measures if he is satisfied that if no relief is granted, the interest of the applicant runs serious risk. The applicant shall satisfy the Court about his interest and indicate the grounds for the relief. After production and examination of the evidence, the judge shall grant preventive measures if he is satisfied that if no relief is granted, the interest of the applicant runs serious risk. In the order, which directs the imposition of the seal and the enlisting, the judge shall appoint one valuer and a depository. Paragraph 1 :..... Paragraph 2 :.... Paragraph 3 : Before ordering the imposition of seals and enlisting, the judge may call for the say of the person who is in occupation or possession of the properties if he is of the view that such hearing will not defeat the ends of justice. ” 15. The learned Senior Counsel for the appellants also submitted that the impugned order does not show that the Court had appointed one valuer and a depository. Be that as it may, apart from the said aspect, it is clear that before such preventive measures are granted, the judge has to be satisfied on the basis of material that, if no relief is granted, the interest of the applicant “runs a serious risk”. As noticed earlier, the impugned order lacks recording of such satisfaction. It is trite that such a satisfaction has to be objective in nature, which would presuppose that it is based on the pleadings and the material produced. 16. Now let us examine the submission that even where such reasons are absent, the ad interim order can be sustained by looking into the pleading on the basis of which such order is prayed for. Reliance is placed on the decision of the Supreme Court in the case of M.P. Mohala (supra). That case arose out of rejection of a review application by the High Court. It has been held in para 19 as under :- “A judgment as is well-known must be read in its entirety. The judgment of a court must also be implemented. But what would be the effect of a judgment must be considered from the reliefs claimed in the writ petition as also the implications thereof which has to be deciphered from reading the entire judgment. A judgment may also have to be read on the touchstone of pleadings of the parties.” As a general principle, this would depend upon fact and circumstances of each case. A judgment may also have to be read on the touchstone of pleadings of the parties.” As a general principle, this would depend upon fact and circumstances of each case. For instance, there may be a case, where the Court records a finding that delay would defeat the very purpose of granting relief, but does not advert to the pleadings of the parties or records detailed reasons. Here is a case, where the Trial Court has given absolutely no reasons or has even failed to record the satisfaction. However, an attempt can be made in the present case to examine the impugned order in the context of the pleadings. Before doing that, I would hasten to add that I do not propose to examine the pleadings in depth as I propose to send the matter back to the Trial Court for deciding it afresh, in accordance with law. Therefore, I do not propose to record any binding conclusion, lest it may prejudice one or the other party. However, prima facie, it does appear that the case made out in paragraphs 8(a) and (b) of the application are regarding the change of shareholding pattern and addition of Directors. The ground in paragraph 8(c) is about the alleged unauthorised withdrawal/misappropriation of funds from the Companies Account and personal account of the deceased Cosme Menezes. It needs to be stated that sealing can be justifiably granted in order to prevent/avert an attempt of dissipation/removal of movables or otherwise. Thus, the order of sealing has to have nexus with the object, which it seeks to achieve and order should demonstrate that sealing was necessary for the said purpose. This is not to suggest that the Court would be required to examine the facts in depth and record detailed reasons. Brief reasons indicating application of mind on this aspect, would be sufficient, but the necessity to have such reasons would undoubtedly exist. In the case of Secretary and Curator, Victoria Memorial Hall (supra), the Hon'ble Supreme Court considered its earlier decision in the case of State of Orissa Vs. Dhaniram Luhar, reported in 2004 V. 5 SCC 568 and State of Rajasthan Vs. Sohan Lal, reported in 2004 V. 5 SCC 573 and held thus in paragraph 40 : “40. It is a settled legal proposition that not only administrative but also judicial order must be supported by reasons, recorded in it. Dhaniram Luhar, reported in 2004 V. 5 SCC 568 and State of Rajasthan Vs. Sohan Lal, reported in 2004 V. 5 SCC 573 and held thus in paragraph 40 : “40. It is a settled legal proposition that not only administrative but also judicial order must be supported by reasons, recorded in it. Thus, while deciding an issue, the Court is bound to give reasons for its conclusion. It is the duty and obligation on the part of the Court to record reasons while disposing of the case. The hallmark of an order and exercise of judicial power by a judicial forum is to disclose its reasons by itself and giving of reasons has always been insisted upon as one of the fundamentals of sound administration justice -delivery system, to make known that there had been proper and due application of mind to the issue before the Court and also as an essential requisite of principles of natural justice. "The giving of reasons for a decision is an essential attribute of judicial and judicious disposal of a matter before Courts, and which is the only indication to know about the manner and quality of exercise undertaken, as also the fact that the Court concerned had really applied its mind." [Vide State of Orissa Vs. Dhaniram Luhar, (2004) 5 SCC 568 ; and State of Rajasthan Vs. Sohan Lal & Ors. (2004) 5 SCC 573 ].” 17. In Binod Kumar Gupta (supra), the challenge was to an ad interim order of injunction granted ex-parte, directing the parties to maintain status-quo as regards the said property till the disposal of the application for temporary injunction. Para 10 of the judgment would show that the Court had found that the impugned order cannot be termed as “absolutely unreasoned order”. It was found that although the impugned order did not contain reasoning in so many words, supported by adequate facts, satisfaction about existence of a prima facie case and that the matter seemed to be of emergent one, was there, which was sufficient compliance of the basic requirements of the provisions of Order XXXIX, Rule 3 of C.P.C. in substance. Thus, on facts of that case, it was found that the impugned order did not show exercise of jurisdiction with material irregularity, requiring interference under Section 115 of the C.P.C. In my humble opinion, the facts would be distinguishable. Thus, on facts of that case, it was found that the impugned order did not show exercise of jurisdiction with material irregularity, requiring interference under Section 115 of the C.P.C. In my humble opinion, the facts would be distinguishable. At the cost of repetition, it needs to be stated that brief reasons, showing such a satisfaction, would be a sine qua non for sustaining such an order. 18. Before parting with final order, it would be necessary to deal with one more submission advanced on behalf of the respondents. It was submitted by the learned Senior Counsel for the respondents that before this Court granted stay to the exercise of listing, part listing is already done. It was submitted that the said report may be called and perused and the contents of the same would support that sealing is necessary. I do not propose to go into this aspect, particularly when the matter is being sent back to the Trial Court, for deciding the application afresh. 19. In the result, the Appeal is allowed. (i) The impugned order dated 29/07/2015 is hereby set aside. (ii) The matter is sent back to the learned Trial Court. (iii) The parties to appear before the Trial Court on 04/09/2015. (iv) The learned Trial Court shall decide the application as expeditiously as possible and preferably within a period of one week from 04/09/2015, after granting opportunity of hearing to the parties and in accordance with law. (v) Rival contentions of the parties are kept open. (vi) In the circumstances, there shall be no order as to costs.