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2019 DIGILAW 295 (CAL)

Siddhartha Mitra v. India Steam Laundry (P) Ltd.

2019-02-28

SAHIDULLAH MUNSHI

body2019
JUDGMENT : 1. This is an application for injunction filed by the plaintiff. Leave was granted to move for an ex parte interim injunction on ground of urgency and threat of change of nature and character of the suit property by or at the instance of Mr. Kar’s clients, the defendant nos. 10, 11 and 12, the purchaser of a property from Mr. Saha’s client, the defendant nos. 5 and 6. The subject matter of the suit is a Registered Deed of Conveyance executed by Mr. Saha’s client in favour of Mr. Kar’s client on 14th May, 2011, thereby causing transfer of a land on which the defendant no.1, company has its Dry-cleaning business for a long period of time in its capacity as a lessee under Mr. Saha’s clients for a period of over 50 years since 1947. On 21st January 2019 when the application was moved it was pointed out before this Court that by virtue of the sale of the property in question under the registered deed dated 14th May, 2011, the petitioners would be seriously affected if the purchaser of the property under the said deed creates any third party interest or changes the nature and character of the suit property. It was further submitted before this Court that while a second appeal was pending before this Court arising out of the suit filed by the owner/landlord, of defendant no. 1 of which the petitioners are minority shareholders, the second Appellate Court although protected the interest of the company defendant no. 1, who was a tenant under the defendant nos. 5 and 6, protected by an order of status quo which was passed in the second appeal (S.A. 265 of 1981 being Annexure E at page 86 of the application) on 11th September, 1992. It was further submitted that the interim order which was passed on 11th September, 1992 is still in force. It is profitable to set out the said order; “Let the application for injunction come up for hearing two weeks after the long vacation. The appellants-petitioners will serve copy of the application on the learned Advocate for the respondents-opposite parties. In the meantime both parties will maintain status quo as on today”. 2. It is profitable to set out the said order; “Let the application for injunction come up for hearing two weeks after the long vacation. The appellants-petitioners will serve copy of the application on the learned Advocate for the respondents-opposite parties. In the meantime both parties will maintain status quo as on today”. 2. On a misconceived impression that the order of status quo passed by the Second Appellate Court was subsisting and since the present suit relates to the self-same property which was also subjudice in the second appeal, this Court passed an ex parte order to protect the interest of the plaintiffs. Subsequently, the defendant nos. 5, 6 and defendant nos. 10, 11 and 12 appeared through their respective Counsels and prayed for vacating the said ad interim order of injunction. However, since the hearing could not be completed this Court extended the said order till 28th February, 2019. 3. Mr. Saha, appearing for respondent nos. 5 and 6 submits that the plaintiffs are none but the share-holders of the said company, the defendant no.1 and has got no greater interest than the tenancy, which was created in favour of the company by his clients. The property has now been transferred by Mr. Saha’s client in favour of respondent nos. 10, 11 and 12. It is not disputed that the property belonged to Mr. Saha’s client and who transferred the property in 2011 by a registered Deed of Conveyance in favour of the defendant nos. 10, 11 and 12, i.e., Mr. Kar’s clients. Mr. Saha submits that the plaintiff cannot claim more title than their right of tenancy. Mr. Saha’s client filed a suit for ejectment of the tenant and that suit failed holding that the property in suit has already vested to the State of West Bengal, since 1st Baisakh, 1362 B.S. by operation of Estate Acquisition Act. There is no dispute from either side that the property is vested to the State and the order passed in the said suit has been carried to the first appeal by the defendants in that suit and the first appeal was allowed in part and judgment and decree passed in the suit was modified by the First Appellate Court. A second appeal being S.A. No. 265 of 1981 is pending. A second appeal being S.A. No. 265 of 1981 is pending. The First Appellate Court while allowing the appeal in part held that the defendant in that suit became a non-agricultural under tenant within the meaning of Section 3(1)(b) of the West Bengal Non-agricultural Tenancy Act, 1949 and the plaintiffs were non-agricultural tenants within the meaning of Section3(1)(a) of the said Act. Mr. Kar appearing for the defendant nos. 10, 11, 12 submits that his client has purchased the property by Registered Deed of Conveyance way back in 2011 and he has not taken any steps till now to act on the basis of the said deed. Mr. Saha and Mr. Kar both submit that the facts and circumstances which have been disclosed in the application for injunction do not warrant for issuing an ad interim order of injunction. Mr. Saha submits that the qualification for getting an ad interim injunction is not available within the four corners of the injunction application. Mr. Saha cited before this Court the following decisions:- (1) (1993) 3 SCC 161 (Shiv Kumar Chadha v. Municipal Corporation of Delhi & Ors.) (2) (1994) 4 SCC 225 (Dr. Arvind Gupta v. Securities and Exchange Board of India & Ors.). 4. Both the decisions is on the same line and the Hon’ble Apex Court lays down that Court should be very cautious in passing an ex parte interim order and it is not desirable to protect the interest of the plaintiff alone by granting ad interim injunction so as to cause prejudice to defendants. Paragraph 30 to 35 of the decision in Shiv Kumar Chadha (supra) is relevant for our purpose. Paragraphs 30 to 35 are as follows:- “30. It need not be said that primary object of filing a suit challenging the validity of the order of demolition is to restrain such demolition with the intervention of the court. In such a suit the plaintiff is more interested in getting an order of interim injunction. It has been pointed out repeatedly that a party is not entitled to an order of injunction as a matter of right or course. In such a suit the plaintiff is more interested in getting an order of interim injunction. It has been pointed out repeatedly that a party is not entitled to an order of injunction as a matter of right or course. Grant of injunction is within the discretion of the court and such discretion is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the court that unless the defendant is restrained by an order of injunction, an irreparable loss or damage will be caused to the plaintiff during the pendency of the suit. The purpose of temporary injunction is, thus, to maintain the status quo. The court grants such relief according to the legal principles – ex debito justitiae. Before any such order is passed the court must be satisfied that a strong prima facie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him. 31. Under the changed circumstance with so many cases pending in courts, once an interim order of injunction is passed, in many cases, such interim orders continue for months: if not for years. At final hearing while vacating such interim orders of injunction in many cases, it has been discovered that while protecting the plaintiffs from suffering the alleged injury, more serious injury has been caused to the defendants due to continuance of interim orders of injunction without final hearing. It is a matter of common knowledge that on many occasions even public interest also suffers in view of such interim orders of injunction, because persons in whose favour such orders are passed are interested in perpetuating the contraventions made by them by delaying the final disposal of such applications. The court should be always willing to extend its hand to protect a citizen who is being wronged or is being deprived of a property without any authority in law or without following the procedure which are fundamental and vital in nature. But at the same time the judicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches the court. 32. But at the same time the judicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches the court. 32. Power to grant injunction is an extraordinary power vested in the court to be exercised taking into consideration the facts and circumstances of a particular case. The courts have to be more cautions when the said power is being exercised without notice or hearing the party who is to be affected by the order so passed. That is whey Rule 3 of the Order 39 of the Code requires that in all cases the court shall, before grant of an injunction, direct notice of the application to be given to the opposite-party, except where it appears that object of granting injunction itself would be defeated by delay. By the Civil Procedure Code (Amendment) Act, 1976, a proviso has been added to the said rule saying that “where it is propose to grant an injunction without giving notice of the application is proposed to grant an injunction without giving notice of the application to the opposite-party, the court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay..." 33. It has come to out notice that in spite of the aforesaid statutory requirement, the courts have been passing orders of injunction before issuance of notices or hearing the parties against whom such orders are to operate without recording the reasons for passing such orders. It is said that if the reasons for grant of injunction are mentioned, a grievance can be made by the other side that court has prejudged the issues involved in the suit. According to us, this is a misconception about the nature and the scope of interim orders. It need not be pointed out that any opinion expressed in connection with an interlocutory application has not bearing and shall not affect any party, at the stage of the final adjudication. Apart from that now in view of the proviso to Rule 3 aforesaid, there is not scope for any argument. When the statue 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. 34. Apart from that now in view of the proviso to Rule 3 aforesaid, there is not scope for any argument. When the statue 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. 34. The imperative nature of the proviso has to be judged in the context of Rule 3 of Order 39 of the Code. Before the proviso aforesaid was introduced, Rule 3 said “the court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite-party”. The proviso was introduced to provide a condition, where court proposes to grant an injunction without giving notice of the application to the opposite-party, being of the opinion that the object of granting injunction itself shall be defeated by delay. The condition so introduced is that the court “shall be defeated by delay. The condition so introduced is that the court “shall record the reasons” why an ex parte order of injunction was being passed in the facts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law must be informed why instead of following the requirement of Rule 3, the procedure prescribed under the proviso has been followed. The party which invokes the jurisdiction of the court for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the court about the gravity of the situation and court has to consider briefly these factors in the ex parte order. We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the court or the authority concerned to record reasons before exercising power vested in them. We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the court or the authority concerned to record reasons before exercising power vested in them. In respect of some of such provisions it has been held that they are required to be complied with but non-compliance therewith will not vitiate the order so passed. But same cannot be said in respect of the proviso to Rule 3 of Order 39. The Parliament has prescribed a particular procedure for passing of an order of injunction without notice to the other side, under exceptional circumstances. Such ex parte orders have far-reaching effect, as such a condition has been imposed that court must record reasons, before passing such order if it is held that the compliance with the proviso aforesaid is optional and not obligatory, then the introduction of the proviso by the Parliament shall be a futile exercise and that part of Rule 3 will be a surplusage for all practical purposes. Proviso to Rule 3 of the Order 39 of the Code, attracts the principle, that if a statute requires a thing to be done in a particular manner, it should be done in that manner or not all. This principle was approved and accepted in well-known cases of Taylor v. Taylor and Nazir Ahmed v. Experor. This Court ahs also expressed the same view in respect of procedural requirement of the Bombay Tenancy and Agricultural Lands Act in the case of Ramchandra Keshav Adke v. Govind Joti Chavare. 35. As such whenever a court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed. But any such ex parte order should be in force up to a particular date before which the plaintiff should be required to serve the notice on the defendant concerned. In the Supreme Court Practice 1993, Vol. But any such ex parte order should be in force up to a particular date before which the plaintiff should be required to serve the notice on the defendant concerned. In the Supreme Court Practice 1993, Vol. 1, at page 514, reference has been made to the views of the English Courts saying: “Ex parte injunctions are for cases of real urgency where there has been a true impossibility of giving notice of motion..... An ex parte injunction should generally be until a certain day, usually the next motion day.....” 5. Mr. Deb, learned Senior Advocate appearing for the plaintiff/petitioner submits that the action of the defendant nos. 5 and 6 came to his client’s knowledge only on 2nd March, 2016 and 10th May, 2016, as has been stated in paragraph 15 of the application. In paragraphs 15 of the application it has been disclosed by the plaintiff/petitioner that only from some averments made in CRR No. 3753 of 2015 being Annexure-H at page 94, the plaintiffs have come to learn about the alleged deed of transfer by Mr. Saha’s client which was executed and registered on 14th May, 2011. Mr. Saha’s client has also made an advertisement in the newspapers which is also annexed to the injunction application. His client intended to sell the property and invited objections from interested persons, if any, to which objection was also issued on behalf of the plaintiffs. Mr. Deb submits that despite requests made to Mr. Saha’s client to produce a copy of the deed for inspection, no answer was given. The said letter which was written on behalf of the plaintiffs on 10th May, 2016 is on record at page 110 of the application. Mr. Deb submits that since no copy was supplied, they were unable to take any steps against the said deed and, ultimately, they applied for certified copy from the Registrar of Assurances and which was delivered to his client on 9th October, 2018. Therefore, after obtaining the certified copy he has rushed to this Court to file the suit and prayed for ex parte injunction on 21st January, 2019. 6. Question also raised by defendants whether the plaintiffs have got locus standi to file the suit not being directly affected by the deed of transfer. Mr. Therefore, after obtaining the certified copy he has rushed to this Court to file the suit and prayed for ex parte injunction on 21st January, 2019. 6. Question also raised by defendants whether the plaintiffs have got locus standi to file the suit not being directly affected by the deed of transfer. Mr. Deb submitted that his clients being the minority share-holders of the company-defendant, who is the tenant of the property and who is directly affected by the transfer of the property in question, he has every right to protect the interests of the company by filing a suit and injunction. In support of such submission he has relied on the following decisions:- (1) (2009) 1 Comp LJ 361 (Bom) (Nirad Anilal Mehta v. Genelec Ltd.) (2) 52 C.W.N. 188 (Rameswara Prosad Bajoria & Ors. v. Satya Charan Law & Ors.) 7. The judgments have been placed to argue that the minority shareholder even can come forward to protect the interest of the company if the company does not come forward to protect his interest and interest of the shareholders. This proposition is not at all disputed. The decisions are based on “derivative action”. When a company is negligent to protect the interest of the company whether minority shareholders can come forward to protect the interest of the company, is a matter to be adjudicated. However, it appears from those decisions that the suit proceedings can be maintained when the internal management of the company is in distress. Therefore, even if those decisions are taken into consideration, situation does not alter. The second point which is raised in this case that this Court while passing the interim order, was mislead by the order of status quo which was passed on 11th September, 1992. The order itself shows that the application for injunction was directed to appear two weeks after the long vacation in that year and in the last sentence it was mentioned by the Court that “in the meantime both parties would maintain status quo as on date.” Mr. Saha argued that the injunction which was passed in the said second appeal, expired long ago and this Court considered the said order as a consideration for grant of an ad interim order of injunction. Saha argued that the injunction which was passed in the said second appeal, expired long ago and this Court considered the said order as a consideration for grant of an ad interim order of injunction. I must say that when the wording of the order is that “in the meantime”, this does not obviously mean that for all future time this order shall remain in force and particularly when it has not been shown before this Court that the said order was sought to be renewed by the affected parties. Therefore, Mr. Saha has rightly pointed out that the order of injunction which was passed in second appeal in 1992 by no stretch of imagination can be held that the same was in force even on 21st January, 2019. 8. I am convinced that had this expired order not been placed before me perhaps I would not have granted an ex parte injunction on 21st January, 2019 and a judgment which has been cited by Mr. Saha in the case of Calcutta Corporation Teachers Association & Anr. v. Calcutta Municipal Corporation & Ors. supports the view which I have taken. 9. Mr. Deb submits that in the decision of Calcutta Corporation Teachers’ Association & Anr. (supra) Their Lordships, while dealing with a contempt proceeding, interpreted the words and expressions “in the meantime”. He submits that when there are two reasonable meaning can be given in a contempt proceeding, the one which favours the contemnor has to be accepted. According to the learned Senior Counsel, the Court, therefore, dealing with a contempt proceeding held in favour of the contemnor and interpreted the words and expressions “in the meantime” to the benefit of the contemnor. He submits that contempt is a quasi criminal proceeding and the proof which is required must be a proof beyond reasonable doubt. Therefore, the Court held and interpreted the expression in a rigid manner not liberally. According to him, if it is liberally construed, the meaning would have been till the matter appears before the Court but no answer is forthcoming as to why this was not pointed out before the Court, although, admittedly, parties passed away and substitution effected. Supporting such argument Mr. Deb further cited a decision in the case of The Aligarh Municipal Board and Ors. v. Ekka Tonga Mazdoor Union & Ors. Supporting such argument Mr. Deb further cited a decision in the case of The Aligarh Municipal Board and Ors. v. Ekka Tonga Mazdoor Union & Ors. reported in 1970 (3) SCC 98 to show that the decision cited by Mr. Saha in Calcutta Corporation Teachers Association & Anr. (supra) has no manner of application in the present case. Therefore, I have no hesitation to hold that a limited order passed in 1992 can also be held to be in force in 2019 without showing any further order extending the same. In my view, there can be no presumption of implied extension of a judicial order. 10. If the entire fact situation is taken into consideration as to how the execution of the deed can affect the interest of the defendant no.1 vis-à-vis the plaintiffs, the only apprehension the plaintiffs can perceive that they may be evicted from the suit premises because it is admitted fact that the defendant no. 1 is a tenant under respondent nos. 5 and 6 who transferred the property in favour of the defendant nos. 10, 11 and 12. So at best the maximum danger may come if the company tenant is sought to be evicted from the suit premises but when the first Appellate Court from Mr. Saha’s suit has held that the plaintiffs in the suit filed by Mr. Saha’s clients were non-agricultural tenant and the defendant no. 1 in this suit was a non-agricultural under-tenant, the present plaintiffs vis-a-vis the defendant no.1 herein cannot have any reason to apprehend that it will be evicted overnight, more particularly, when admittedly the property is vested to the State. So the apprehension expressed by the plaintiffs is not understood in the present suit. It is also apparent from the record at paragraph 15 that they had got the knowledge on 2nd March, 2016 and 10th May, 2016 but it is not understood what prevented the plaintiffs to get a certified copy of the impugned deed which, according to them, has been obtained only on 9th October, 2018. During this long period why the plaintiffs remained silent and thus their action cannot be justified. Even there is no explanation in the application the delay since October, 2018. 11. During this long period why the plaintiffs remained silent and thus their action cannot be justified. Even there is no explanation in the application the delay since October, 2018. 11. In my view, this is not sufficient for the plaintiff to argue that the plaintiffs have been able to make out a case under the provisions of Order 39 Rule 1 of Code of Civil Procedure, rather grant thereof contravenes the ratio in Shiv Kumar Chadha (supra). However, since the suit is pending and Deed of Transfer of the property under challenge on which the defendant no. 1 is a company and the plaintiffs are his share-holders has been in possession, I modify the order dated 21st January, 2019, to the extent that any action taken or any acts committed on the basis of the Deed dated 14th May, 2011, by the defendants shall be subject to the law of lis pendence and shall also be subject to the result of the injunction application. The defendants are granted liberty to file affidavit-in-opposition within three weeks; reply thereto, if any, be filed within two weeks thereafter. 12. Let this G.A. No. 172 of 2019 be listed for hearing six weeks hence under the heading “Adjourned Motion”.