Research › Search › Judgment

Calcutta High Court · body

2016 DIGILAW 990 (CAL)

Santosh Promoters Pvt. Ltd. v. Intrasoft Technologies Ltd.

2016-12-09

ISHAN CHANDRA DAS, JYOTIRMAY BHATTACHARYA

body2016
Jyotirmay Bhattacharya, J.: 1. This First Miscellaneous Appeal is directed against an order dated 22nd December, 2015 passed by the Learned Civil Judge, (Senior Division), 2nd Court at Alipore in Money Suit No.11 of 2015 at the instance of the plaintiff/appellant. 2. The instant appeal was admitted for hearing on 26th June, 2016. After the appeal was admitted for hearing, an interim order was passed directing the parties to maintain status qua with regard to the possession of the parties in the suit property till the disposal of the application. 3. On the joint prayer made by the learned Counsel of the parties, we have decided to hear out this appeal on merit by dispensing with the requirement of filing paper book in this appeal as we were informed that all the papers which are necessary for disposal of the appeal are annexed to the application for vacating interim order, filed by the respondent. 4. Accordingly, we heard the learned Counsel appearing for the parties on the merit of this appeal. 5. Let us now consider the merit of the present appeal in the facts of the present case. 6. The plaintiff filed a suit for recovery of the outstanding amount to the tune of Rs.2,63,00,885/- (Rupees two crores sixty three lakh eight hundred eighty five) only due from and payable by the defendant on various heads and interest thereon @ of 24% per annum from the date of filing of the suit till recovery of the amount. Several other incidental reliefs have also been prayed for in the said suit. 7. According to the plaintiff, the defendant was a lessee in respect of the 5th floor of premises No.148 Rash Behari Avenue, Kolkata-700079, comprising of more or less 9,230 sq. ft. at monthly rental of Rs.2,49,210/- (Rupees two lakh forty nine thousand two hundred ten only) as lease rent and in addition to the monthly rent, a sum of Rs.2,43,890/- (Rupees two lakh forty three thousand eight hundred ninety) only was payable by the defendant to the plaintiff on account of infrastructure user charges per month. 8. It is also alleged by the plaintiff that apart from the monthly lease rent and the infrastructure user charges, the defendant was also required to pay service taxes on rent in view of Clause 3 of the lease agreement. 8. It is also alleged by the plaintiff that apart from the monthly lease rent and the infrastructure user charges, the defendant was also required to pay service taxes on rent in view of Clause 3 of the lease agreement. The defendant has failed to pay the service charges resulting a sum of Rs.16,89,548/- (Rupees sixteen lakh eighty nine thousand five hundred forty eight) only became due and payable by the defendant to the plaintiff as on 31st December, 2013. 9. It is also alleged that for non-payment of service taxes on rent the defendant has also incurred liability to pay interest on the said dues @ 24% per annum upto 31st March, 2015. The plaintiff calculated the statutory charges which presently stands due on the aforesaid amount at Rs.22,72,069/- (Rupees twenty two lakh seventy two thousand sixty nine) only plus interest upto the date of filing of the suit. 10. It is also stated therein that the plaintiffs made payment of Rs.8,44,744/-(Rupees eight lakh forty four thousand seen hundred forty four) only on 24th December, 2013 and a further sum of Rs.8,44,744/- (Rupees eight lakh forty four thousand seen hundred forty four) only on 28th June, 2014, in discharge of its liability to pay various payments in terms of the lease agreement. 11. Thus, defendant’s liability to pay the balance amount will continue until such payment is made. It was also alleged in the plaint that the defendant also purchased the 3rd Floor of the said premises from the plaintiff and on such purchase being made the defendant’s tenancy in respect of 5th Floor stood determined. As per the agreement, the defendant was granted a fixed period for its shifting from the 5th Floor to the 3rd Floor. The defendant could not shift from the 5th Floor to the 3rd Floor within the stipulated period. There was 54 days delay in shifting from the 5th Floor to the 3rd Floor. As a result, the defendant became liable to pay damages at the rate of Rs.2,00,000/- (Rupees two lakh) only per day as per the terms of the said agreement. There was 54 days delay in shifting from the 5th Floor to the 3rd Floor. As a result, the defendant became liable to pay damages at the rate of Rs.2,00,000/- (Rupees two lakh) only per day as per the terms of the said agreement. Since the defendant could not maintain the time limit fixed by the parties for shifting from the 5th Floor to 3rd Floor, the defendant incurred further liability to pay a sum of Rs.9,79,008/-(Rupees nine lakh seventy nine thousand eight) only on account of rent i.e. @ Rs.4,93,100/- (Rupees four lakh ninety three thousand one hundred) only per month for the period of 54 days delay together with interest @ 24% per annum compounded monthly from 5th May, 2012 upto the date of filing of the suit. Because of delay in shifting from the 5th Floor to 3rd Floor of the said premises, the defendant also incurred further liability to pay penalty @ Rs.2,00,000/-(Rupees two lakh) only per day and thus, a sum of Rs.1,08,00,000/- (Rupees one crore eight lakh) only became due and payable by the defendant to the plaintiff together with interest @ 24% per annum compounded monthly from 5th May, 2012 upto the date of filing of the instant suit. Since the defendant did not respond to the plaintiffs’ request for payment of the aforesaid dues of the defendant, the plaintiff filed the aforesaid suit for realization of the money due and payable by the defendant. 12. In such a suit the plaintiff filed an application for temporary injunction for restraining the opposite party and/or any other person claiming through or under them from transferring, alienating and/or otherwise encumbering the property as mentioned in the schedule of the said application to any third party in any manner whatsoever. Ad interim order of injunction was sought for in similar term in the said application. Such injunction was sought for by the plaintiff, as the opposite party was threatening the plaintiff and the other creditors to remove or dispose of its own property with the sole intention of defrauding the plaintiff and other creditors. It was also stated therein that if the opposite party succeeds in its ill motive to dispose of the schedule property then it would be very difficult for the plaintiff or the other creditors to recover the outstanding dues from the opposite parties. 13. It was also stated therein that if the opposite party succeeds in its ill motive to dispose of the schedule property then it would be very difficult for the plaintiff or the other creditors to recover the outstanding dues from the opposite parties. 13. The learned Trial Judge rejected the plaintiff’s prayer for ad interim injunction primarily on the ground of lack of urgency in the matter. While refusing to grant of ad interim injunction in favour of the plaintiff, the learned Trial Judge also held that no prima facie case was made out by the plaintiff for passing an ad interim order of injunction in his favour. 14. The legality of the said order passed by the learned Trial Judge is under challenge in this appeal. A question has cropped up in this appeal as to whether, in a suit for realization of money, injunction can be granted against the defendant restraining him from transferring his property during the pendency of the suit. 15. Let us try to find out the answer to the said question first. 16. It is argued by Mr. Pratap Chatterjee, learned Senior Counsel appearing for the appellant that in a suit for recovery of money, the Court cannot pass any order of injunction in respect of any immovable property which is not the subject matter of the suit. He further contended that injunction cannot be granted in respect of any property which is not identifiable from the schedule of the plaint. Referring to the plaint itself, Mr. Chatterjee pointed out that the plaint does not contain any schedule. He thus, argued that injunction in such a suit cannot be passed against the defendant restraining him from transferring any of his properties which is not the subject matter of the suit. 17. He, however, contended that only in suitable cases for realization of money, an order of attachment before judgment can be passed in respect of any movable or immovable property where the conditions for passing such an order as per the provision contained in Order 38 Rule 5 of the Civil Procedure Code are satisfied. He submitted that order of attachment cannot be passed against any property, be it movable or immovable property, belonging to the defendant unless the plaintiff satisfies the test as mentioned by this Hon’ble Court in the case of Premraj Mundra –Vs- Md. Maneck Gazi & Ors. He submitted that order of attachment cannot be passed against any property, be it movable or immovable property, belonging to the defendant unless the plaintiff satisfies the test as mentioned by this Hon’ble Court in the case of Premraj Mundra –Vs- Md. Maneck Gazi & Ors. reported in AIR 1951 Cal 156 which was approved by the Apex Court in the case of Raman tech and Process Eng. Co. –Vs-Solanki Traders reported in (2008)2 SCC 302 . According to him, in order to get an order of attachment before judgment, the plaintiff is not only required to establish that the defendant is trying to transfer his property with an intention to delay or defeat the plaintiff’s claim but he is required to establish that the defendant is either in insolvent circumstances or is in acute financial embarrassment and if such a defendant is allowed to transfer his property, realization of the decreetal amount in execution of the decree that may be ultimately passed in the suit will become impossible. He ultimately submits that an order of temporary injunction prohibiting transfer of the defendant’s property which is in the nature of an order of attachment before judgment should not be passed under any circumstances unless the conditions as mentioned in Order 38 Rule 5 of the Code of Civil Procedure are satisfied. 18. By reading the pleadings made out by the plaintiff in the plaint as well as in the injunction application, he submitted that even if the averments made out in the plaint as well as in the injunction application are accepted as true and correct at this stage of consideration of the plaintiff’s prayer for ad interim injunction still then, these allegations are so vague and indefinite, that no Court should pass any order of injunction prohibiting transfer of the defendant’s property during the pendency of the suit. 19. Mr. Aniruddha Chatterjee, learned advocate appearing for the appellant refuted such submission of Mr. Pratap Chatterjee, learned Senior Counsel. Relying upon an unreported decision of the learned Single Judge of this Court in the case of Dilip Chowdhury (Dr.) –Vs- Pratishruti Projects Ltd. he Contended that passing of mareva injunction is not unknown to Indian judiciary. Reading the said judgment of this Hon’ble Court, Mr. Pratap Chatterjee, learned Senior Counsel. Relying upon an unreported decision of the learned Single Judge of this Court in the case of Dilip Chowdhury (Dr.) –Vs- Pratishruti Projects Ltd. he Contended that passing of mareva injunction is not unknown to Indian judiciary. Reading the said judgment of this Hon’ble Court, Mr. Chatterjee, submitted that the concept of passing of mareva injunction which was originated from the English Court has also been borrowed by this Hon’ble Court and applying the said principle, this Court held in the said decision that mareva injunction can be granted in suitable cases in India. 20. Mr. Pratap Chatterjee, learned Senior Counsel refuted such contention of Mr. Anirudha Chatterjee by submitting that the principle which was originated from the English court regarding passing of mareva injunction is not applicable in India as provision relating to attachment before judgment which is incorporated under the Order 38 of Civil Procedure Code under which the Indian Courts can pass an order of attachment before judgment is unknown to the English Court under which the English Court can pass an order of attachment before judgment. 21. Let us now consider the substance of such contention of the learned Counsel appearing for the parties. Even assuming that the principle relating to grant of Mareva injunction which was originated from the English Court is not applicable here but still then we cannot be oblivious of the provision contained in Order 39 Rule 1(b) of the Civil Procedure Code which authorizes the civil court to pass an order of temporary injunction for restraining the defendant from transferring any property which the defendant intends to transfer to defraud his creditors during the pendency of the suit for realization of money, even though the property in respect of which an order in the form of injunction is sought for, is not directly and/or indirectly involved in the suit. To understand the true implication of Order 39 Rule 1(b) of the Civil Procedure Code, it will be profitable for us to set out the said prevision hereunder which runs as follows:- “Where in any suit it is proved by affidavit or otherwise that the defendant threatens, or intends to remove or dispose of his property with a view to defraud his creditor, the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property or dispossessing of the plaintiff or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit as the Court thinks fit, until the disposal of the suit or until further orders”. 22. If we consider the provision contained in Order 39 Rule 1 of Civil Procedure Code as a whole which is the source of grant of temporary injunction then it appears to us that though passing of an order of temporary injunction is respect of non-suit property is not permissible under order 39 Rule 1(a) and 1(c) of the Civil Procedure Code but the Court’s power to pass temporary injunction in respect of any property which is not the subject matter in dispute, is recognized under order 39 Rule 1(b) of the Civil Procedure Code and such power can be exercised only when the Court finds in a suit for realization of money, the defendant intends to transfer his properties to defraud his creditors. 23. Mr. P Chatterjee the learned Senior Counsel appearing for the respondent also contended that even if passing of an order of injunction in respect of any property which is not the subject matter of the suit is recognized under Order 39 Rule 1(b) of Civil Procedure Code, but still then the court according to him, cannot pass any such injunction order unless the tests for passing an order of attachment before judgment as contemplated under order 38 Rule 5 of the Civil Procedure Code are satisfied. 24. We are unable to accept such contention of Mr. Chatterjee the learned Senior Counsel of the respondent as there are marked distinction between those two provisions which operate in their respective fields and which are distinctly different from each other. 25. 24. We are unable to accept such contention of Mr. Chatterjee the learned Senior Counsel of the respondent as there are marked distinction between those two provisions which operate in their respective fields and which are distinctly different from each other. 25. Let us now try to find out the distinction between the provisions under order 39 Rule 1(b) of Civil Procedure code and the provision contained in Order 38 Rule 5 of the Code of Civil Procedure. 26. At the very outset, we like to mention here that that those two provisions operate in different fields altogether. Order 38 Rule 5 of the Civil Procedure Code contemplates post decree consequences. While dealing with such an application, the Court is required to find out first as to whether there is strong possibility of passing a money decree in favour of the plaintiff. If the court is satisfied that there is every possibility of passing a money decree in favour of the plaintiff, then only the court can pass any order of attachment before judgment provided the Court is satisfied that the defendant is either trying to dispose of whole or any of his property or is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court, with an intent to obstruct or delay the execution of any decree that may be passed against him. Reading the said provision as a whole, we are of the view, that order of attachment before judgment cannot be passed by any Court unless the Court is satisfied about the conditions as mentioned above. 27. Simultaneously if we consider the provisions contained in Order 39 Rule 1(b), of the Civil Procedure Code we find that while passing an order of injunction, the Court is not required to find out as to whether there is every possibility of passing a decree in favour of the plaintiff in the suit. While considering the application for temporary injunction, the Court is only required to ascertain as to whether a prima facie case has been made out by the plaintiff in the suit. Prima facie case means an arguable case meaning thereby that a reasonable dispute is raised before the Court which the Court is required to resolve ultimately in the suit. A prima facie case is distinguishable from a full-proof case. Prima facie case means an arguable case meaning thereby that a reasonable dispute is raised before the Court which the Court is required to resolve ultimately in the suit. A prima facie case is distinguishable from a full-proof case. When the Court finds that a prima facie case is made out by the plaintiff then the Court passes an order of injunction so that the ultimate relief which is claimed by the plaintiff in this suit is not frustrated and the decree which may be passed in the suit will remain unexecutable. 28. Apart from making out a prima facie, the plaintiff is also required to prove that if the balance of convenience and inconvenience is weighed, that will be in favour of grant of injunction, and if injunction is not granted, the plaintiff will suffer irreparable loss and injury. 29. Again the order of attachment before judgment will continue even after the suit is decreed in favour of the plaintiff and re-attachment of the attached property in execution is not needed in view of Order 38 Rule 11 & 11A of the Civil Procedure Code. However, the order of attachment before judgment will stand withdrawn on furnishing security by the defendant or with the dismissal of the suit as per the provision contained in Order 38 Rule 9 of the Civil Procedure Code. 30. Order of temporary injunction is essentially different from the order of attachment before the judgment as it losses its force with the disposal of the suit, be it decreed or dismissed. Its operation cannot be extended beyond the disposal of the suit. 31. Thus, we hold that the Court’s power to grant temporary injunction cannot be treated at par with its power to pass an order of attachment before judgment under Order 38 Rule 5 of the Code of Civil Procedure. Thus, while passing an order of temporary injunction, post decree consequences need not be considered by the Court, but while passing an order of attachment before judgment, the Court has to consider the post decree consequences. As such the standard of proof in case of attachment before judgment is higher then the standard of proof necessary to be discharged in case temporary injunction is sought for. 32. As such the standard of proof in case of attachment before judgment is higher then the standard of proof necessary to be discharged in case temporary injunction is sought for. 32. Keeping the aforesaid distinction between those two provisions of the Civil Procedure Code, in mind, we have considered the pleadings of the plaintiff made out in the plaint as well as in the injunction application. On reading the said plaint we have found that the plaintiff has claimed a money decree on the allegation that the defendant is not only liable to pay arrear rent and/or infrastructure user charges and service tax on rent but it has also claimed damages for the delay in shifting from the 5th Floor to the 3rd Floor of the said premises at a rate as prescribed under the contract. The monetary claim of the plaintiff is mostly ascertainable with reference to the contract as the contract itself specifies the rate of rent payable by the defendant in respect of its 5th Floor tenancy per month and the rate of infrastructure user charges payable by the defendant in respect of its 5th Floor tenancy and its liability to pay interest on such unpaid dues when of the defendant commits default in payment of rent/infrastructure user charges. Again the liability to pay damages for the delay in shifting from the 5th Floor to the 3rd Floor is also capable of quantification with reference to the contract. 33. However, the extent of liability of the defendant to pay service charges on rent can be ascertained by the Court, only after some additional exercise is made by the Court in course of hearing of the suit. The exact liability which the defendant is required to bare on such account can be ascertained by the Court, only when the parties lead their evidence in support of their respective claims with suit. Before passing decree, the Court will have to find out the proportionate liability of the defendant on such head as per the said agreement. The amount of money payable by the defendant on this accounts is variable amount which varies from time to time depending upon the rate levied by the Municipal authority on account of service charge on rent from time to time. Thus, we find that the major part of the liability of the defendant is ascertainable with reference to the agreement itself. Thus, we find that the major part of the liability of the defendant is ascertainable with reference to the agreement itself. The amount which is claimed by the plaintiff from the defendant on account of rent, infrastructure user charges and damages for delay in shifting is a substantial amount. If the Court finds that the defendant intends to transfer his property being the 3rd Floor of the said premises and leaves the jurisdiction of the Court with the sale proceeds, to defraud the plaintiff, the Court should not hesitate to pass temporary injunction restraining the defendants from transferring his property during the pendency of the suit. In the instant case, we find that the plaintiff stated in the plaint that the defendant was trying to transfer the said property to a stranger with the sole intention of defrauding the plaintiff and the other creditors. If the pleading of the plaintiff as a whole is considered, we are of the view that a prima facie has been made out by the plaintiff for going to trial. If the defendant is allowed to transfer his property as mentioned in the schedule of the temporary injunction application during the pendency of the suit with an intent to defraud the plaintiff to whom the defendant is liable to pay such huge amount, it will not be wise for the Court to refuse to grant ad interim injunction as in case, ad interim injunction is refused and the plaintiff succeeds in transferring the suit property during the pendency of the suit, then the object of granting injunction under Order 39 Rule 1(b) will be defeated in the instant case. 34. We are of the view that all the three tests for grant of temporary injunction are satisfied in the instant case. As such the learned Trial Judge was not justified in refusing to grant ad interim injunction in the facts of the present case. The impugned order thus, stands set aside. 35. The defendant is thus, restrained from transferring and/or alienating and/or creating any third party interest in the property mentioned in the schedule of the temporary injunction application and/or parting with possession thereof till the disposal of the plaintiff’s application for temporary injunction. 36. The impugned order thus, stands set aside. 35. The defendant is thus, restrained from transferring and/or alienating and/or creating any third party interest in the property mentioned in the schedule of the temporary injunction application and/or parting with possession thereof till the disposal of the plaintiff’s application for temporary injunction. 36. Leave is granted to the defendant to file objection against the plaintiff’s application for temporary injunction within two weeks from date, reply if any, be filed by the plaintiff/petitioner within one week after re-opening of the Court, after the Christmas vacation. 37. We request the learned Trial Judge to make all endeavour to dispose of the plaintiff’s application for temporary injunction by the end of February, 2017. 38. It is further made clear that while disposing of the plaintiff’s application for temporary injunction, the learned Trial Judge is free to decide the said application on its own merit and in accordance with law and without being influenced by any of the observations made hereinabove which are made by this Court for the purpose of disposing of this appeal which is directed against an order of refusal to grant an ad interim injunction only. 39. The appeal is thus allowed. 40. Since we have disposed of the appeal, no further order need be passed on the application for injunction. 41. The application for interim injunction filed in connection with this appeal is thus deemed to be disposed of. 42. Urgent Photostat certified copy of this order, if applied for, be supplied to the Learned advocate for the appellants immediately