Research › Search › Judgment

Rajasthan High Court · body

2017 DIGILAW 1943 (RAJ)

Official Liquidator of M/s Jaipur Spinning & Weaving Mills Ltd. v. Podar Mills Ltd.

2017-08-31

SANJEEV PRAKASH SHARMA

body2017
ORDER : 1. This application has been filed under Rule 9 of the Company (Court) Rules, 1959 readwith Section 151 CPC, 1908 for consolidation and joint trial of S.B. Company Application No.75/2013 alongwith S.B. Company Application No.21/1988; titled as O.L. of M/s. Jaipur Spinning & Weaving Mills Ltd. Vs. M/s. Podar Mills Ltd. & Ors. 2. Extensive arguments were heard on behalf of both the sides. Applicant-OL submits that the Company Application No.75/2013 has been preferred by the OL wherein it has been prayed that the respondents be directed to handover peaceful, lawful & vacant possession of the property let out to it by the lease deed dated 30.12.1964 and subsequently on modified lease deed dated 23.08.1968 further it is prayed to allow the OL to sell/auction the properties after valuation in terms of the directions issued by this Court in its judgment dated 07.12.2007. It has also been prayed in the said application to declare the transactions executed by the Poddar Mills Limited in favour of respondent Nos.7, 5 and 6 as null and void. Permission has also been sought to take possession of the property with the help of District Magistrate in terms of Clause (1A) and (1B) of the provision of Section 456(1) of the Companies Act, 1956. 3. OL also submits that there is another application No.21/1988 pending before this Court wherein directions have been sought to take actual possession of the property from the respondents therein in terms of the lease deed dated 30.12.1964 and modified lease deed dated 23.08.1968. Respondent Nos. 5, 6 and 7 of S.B. Company Application No.75/2013 are not parties in S.B. Company Application No.21/1988. 4. It is stated by the learned Counsel for the OL that as the issues involved in both the Company Applications are similar and relate mainly to the respondent- Poddar Mills Limited; for the purpose of convenience; avoiding multiplicity, examining the evidence which may be common for disposal of both the applications and to avoid any prejudice to the parties consolidation ought to be allowed. 5. Learned Senior Counsel Shri Ajeet Kumar Sharma appearing for Poddar Mills Limited objects to the consolidation application and submits that the lease deed executed by the Jaipur Spinning and Weaving Mills Limited in favour of the Poddar Mills was executed for an area of 56,629 sq. 5. Learned Senior Counsel Shri Ajeet Kumar Sharma appearing for Poddar Mills Limited objects to the consolidation application and submits that the lease deed executed by the Jaipur Spinning and Weaving Mills Limited in favour of the Poddar Mills was executed for an area of 56,629 sq. yards for a period of 99 years by registered lease deeds dated 30.12.1964 and 23.08.1968. The said lease deed was granted much prior to the order of liquidation in respect of the Jaipur Spinning i.e. prior to 02.12.1983. It is therefore submitted that the OL is bound by these lease. It is stated that the Poddar Mills Limited has no objection to both the Company Applications Nos. 75/2013 and 21/1988 being taken for trial together. However, joint trial of the same is objected as the Company Application No. 21/1988 was filed pursuant to notice dated 17.02.1988 and the ground for termination is non-payment of rent, failure to pay taxes and building and house tax and failure to keep the demise premises insured and the ground taken in application No.75/2013 are completely different relating to challenge of unauthorised transfer rights in favour of respondent Nos.5, 6 and 7 without permission from Jaipur Spinning Mills Limited. Another ground taken is with regard to non-user of lease deeds for setting up of textile mills. Moreover, the Company Application No.75/2013 has been directed to be tried as a suit for conveyance by this Hon’ble Court vide order dated 10.12.2015 and, therefore, since the grounds are not same nor they are common parties and the issues are also not same, the consolidation could not have been done. 6. Mr. Ashok Mehta, Sr. Counsel appearing for the parties in Company Application No.75/2013 submits that while their application for impleadment as a party in the Company Application No.21/1988 is being opposed by the OL, the OL is seeking consolidation of the two Company Applications. It is submitted by him that two suits for eviction cannot be consolidated even if they are essentially between the same parties. 7. Having noted the submissions, it would be useful to examine the precedential law in this regard. The learned Counsel for the OL has relied on 2004(3) SCC 85 M/s. Chitivalasa Jute Mills Vs. It is submitted by him that two suits for eviction cannot be consolidated even if they are essentially between the same parties. 7. Having noted the submissions, it would be useful to examine the precedential law in this regard. The learned Counsel for the OL has relied on 2004(3) SCC 85 M/s. Chitivalasa Jute Mills Vs. M/s. Jaypee Rewa Cement wherein facts were that one Willard India filed a suit against Jaypee Rewa in the Civil Court praying for a decree of Rs.48,00,630/- with interest and costs. According to Willard India, as alleged in the plaint, the claim is for the price of the goods supplied and not paid, and for interest thereon for the period of non-payment. Another Suit was filed by. Jaypee Rewa against Chitivalasa Jute Mills (a Division of Willard India Limited), in different Civil Court praying for a decree of Rs.45,25,514/- with interest and costs. According to Jaypee Rewa, the jute bags were supplied by the defendant from time to time against which payment were also made from time to time. However, some of the jute bags were found either defective or not of ISI standards and were, therefore, rejected. Jaypee Rewa had also supplied cement to a sister concern of the defendant. Deducting the value of the jute bags which were rejected and taking into account the price of the cement supplied, there was an excess payment of Rs.44,08,625/-. It was held as under: “12. The two suits ought not to be tried separately. Once the suit at Rewa has reached the Court at Visakhapatnam, the two suits shall be consolidated for the purpose of trial and decision. The Trial Court may frame consolidated issues. The Code of Civil Procedure does not specifically speak of consolidation of suits but the same can be done under the inherent powers of the Court flowing from Section 151 of the CPC. Unless specifically prohibited, the Civil Court has inherent power to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. Consolidation of suits is ordered for meeting the ends of justice as it saves the parties from multiplicity of proceedings, delay and expenses. Complete or even substantial and sufficient similarity of the issues arising for decision in two suits enables the two suits being consolidated for trial and decision. Consolidation of suits is ordered for meeting the ends of justice as it saves the parties from multiplicity of proceedings, delay and expenses. Complete or even substantial and sufficient similarity of the issues arising for decision in two suits enables the two suits being consolidated for trial and decision. The parties are relieved of the need of adducing the same or similar documentary and oral evidence twice over in the two suits at two different trials. The evidence having been recorded, common arguments need be addressed followed by one common judgment. However, as the suits are two, the Court may, based on the common judgment, draw two different decrees or one common decree to be placed on the record of the two suits. This is how the Trial Court at Visakhapatnam shall proceed consequent upon this order of transfer of suit from Rewa to the Court at Visakhapatnam.” 8. He also relies on 2007(1) SCC 97 - State Bank of India Vs. M/s. Ranjan Chemicals Ltd. & Anr. Wherein Supreme Court in para 10 & 11 held as under :- “10. A joint trial can be ordered by the court if it appears to it that some common question of law or fact arises in both proceedings or that the right to relief claimed in them are in respect of or arise out of the same transaction or series of transactions or that for some other reason it is desirable to make an order for joint trial. Where the plaintiff in one action is the same person as the defendant in another action, if one action can be ordered to stand as a counter claim in the consolidated action, a joint trial can be ordered. An order for joint trial is considered to be useful in that, it will save the expenses of two attendance by counsel and witnesses and the trial judge will be enabled to try the two actions at the same time and take common evidence in respect of both the claims. If therefore `the claim made by the Company can be tried as a counter claim by the Debt Recovery Tribunal, the Court can order joint trial on the basis of the above considerations. It does not appear to be necessary that all the questions or issues that arise should be common to both actions before a joint trial can be ordered. It does not appear to be necessary that all the questions or issues that arise should be common to both actions before a joint trial can be ordered. It will be sufficient if some of the issues are common and some of the evidence to be let in is also common, especially when the two actions arise out of the same transaction or series of transactions. 11. A joint trial is ordered when a Court finds that the ordering of such a trial, would avoid separate overlapping evidence being taken in the two causes put in suit and it will be more convenient to try them together in the interests of the parties and in the interests of an effective trial of the causes. This power inheres in the Court as an inherent power. It is not possible to accept the argument that every time the Court transfers a suit to another court or orders a joint trial, it has to have the consent of the parties. A Court has the power in an appropriate case to transfer a suit for being tried with another if the circumstances warranted and justified it. In the light of our conclusion that the claim of the company in the suit could be considered to be a claim for set off and a counter claim within the meaning of Section 19 of the Act, the only question is whether in the interests of justice, convenience of parties and avoidance of multiplicity of proceedings, the suit should be transferred to the Debt Recovery Tribunal for being tried jointly with the application filed by the bank as a cross suit. Obviously, the proceedings before the Debt Recovery Tribunal could not be transferred to the civil Court since that is a proceeding before a Tribunal specially constituted by the Act and the same has to be tried only in the manner provided by that Act and by the Tribunal created by that Act. Therefore, the only other alternative would be to transfer the suit to the Tribunal in case that is found warranted or justified it.” 9. Having heard all the Counsel and the law as laid down by the Apex Court, this Court finds that the law in this regard is well settled. Therefore, the only other alternative would be to transfer the suit to the Tribunal in case that is found warranted or justified it.” 9. Having heard all the Counsel and the law as laid down by the Apex Court, this Court finds that the law in this regard is well settled. The power of the Court to consolidate suits in appropriate cases is available and for the said purpose facts of the case are required to be looked into, as has been noted above. Both the applications seek possession of the lease property by the OL. Although, application No.75/2013 is said to have been separate from that of Company Application No.21/1988, essentially the prayer is same. Similar set of evidence have to be examined in both the cases. As the Court had already passed an order to try Company Application No.75/2013 as a suit vide order dated 10.12.2015, I see no reason to not try and decide Company Application No.21/1988 as a suit by consolidating both of them and try them together. The objection of the respondents therein having entitlement which may have occurred during the intervening period, can always be looked into and examined together. I agree with the submission of the learned Counsel for the OL that for the purpose of convenience, avoiding multiplicity and evidence being almost common in both the applications, consolidation of suit is the best solution. Both the learned Sr. Counsel for the respondents have not been able to show any prejudice which may be caused on account of the passing of the order to any of their parties. I also find that if consolidation is allowed, the applications can be decided and disposed of without unnecessary delay. 10. In the circumstances, it is deemed fit and proper to order a joint trial of the two actions and try two cases together and the Company application No.21/1988 shall be decided as a suit in terms of the order passed by this Court on 10.12.2015 in the Company Application No.75/2013. 11. Both the applications shall be consolidated on one date of hearing and same shall be heard and decided in accordance with the aforesaid observations. 12. No costs.