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Punjab High Court · body

2021 DIGILAW 1885 (PNJ)

Boss Computers Private Limited v. Sachit Passi

2021-12-06

RAJBIR SEHRAWAT

body2021
Judgment Mr. Rajbir Sehrawat, J. :-This petition has been filed under Article 227 of the Constitutionof India for setting aside the order dated 16.9.2021, passed by the Civil Judge(Junior Division), Dera Bassi, vide which the plaintiff company is required toaffix ad-valorem Court fee on sale consideration of Rs.22 crores, in order toimpugn the legality or seek cancellation of the sale deed dated 31.7.2019. 2.Broadly pleaded facts are; that the petitioner company entered intoan agreement dated 28.2.2019 to sell the agriculture land comprising in KhasraNo. 1514/1017 (2 bigha 7 biswe min North), 1515/1018 (2 bigha 11 biswe),1518/1021 (3 bigha 9 biswe) and 1022 (4 bigha 9 biswe), 1024/1 (1 bigha 16biswe), 935/1, 935/2, 935/3 measuring (1 bigha and 7 biswe), total 15 bigha 19biswe (approximately 4 acres) situated at Village Dayalpura, Sub TehsilDerabassi, District SAS Nagar in favour of respondent No.3. Theconsideration; allegedly agreed for the said sale; was Rs.28 crores. The targetdate of execution of the sale deed was fixed to be 5.8.2019. As per the terms ofthe agreement to sell, the entire sale consideration was to be paid to thecompany through bank transactions and not by cash. The sale deed regardingthe said land was executed on behalf of the petitioner on 31.7.2019. Theamount of Rs.22 crores is stated to have been paid to the petitioner company inits account by bank transactions. Now the suit has been filed by the petitionercompany seeking declaration that the agreement to sell dated 28.2.2019 and thesale deed dated 31.7.2019, purportedly executed by the plaintiff in favour ofthe respondent No.3 and further, the mortgage of the said land by respondentNo.3; is null and void and the same needs to be cancelled. In alternate, it isalso prayed that the respondents be directed to pay the deficient/unpaid amountof sale consideration. Still further, the injunctions have been sought in theplaint. 3.On receipt of the notice, respondent No.3 filed an applicationunder Order 7 Rule 11 CPC; seeking rejection of the plaint on the ground ofnon-disclosure of cause of action, as well as, for non-payment of proper courtfees. After considering the respective arguments of the parties, the trial Courthas held that the suit/plaint discloses the cause of action. Therefore, the plaintas such, cannot be rejected. However, the trial Court has further ordered that ad-valorem Court fees is required to be paid on the plaint; because thepetitioner, who is the executant of the sale deed, is seeking cancellation of thesame. Therefore, the plaintas such, cannot be rejected. However, the trial Court has further ordered that ad-valorem Court fees is required to be paid on the plaint; because thepetitioner, who is the executant of the sale deed, is seeking cancellation of thesame. It is against that order, that the present petition has been preferred. 4.While arguing the case, the counsel for the petitioner hassubmitted that the agreement to sell was for an amount of Rs.28 crores. Theagreement specifically stipulates the entire sale consideration shall be paidthrough Bank and that the sale deed, if any, was to be executed by all thedirectors of the company jointly; and not severally. Hence, the sale deedshould have been executed by all the directors or by a person duly authorisedby all such directors who were signatories to the agreement to sell. In thepresent case, there was no valid resolution on behalf of the company either toexecute the sale deed or to authorise the person, who is purported to havesigned the sale deed, to execute the same in favour of respondent No.3.Therefore, the company cannot be taken as an executant of the sale deed.Hence, the petitioner company is not required to pay the ad-valorem court fees.The counsel has further submitted that the possession of the land is with thepetitioner company. Therefore, the petitioner is not even seeking possession inthe plaint. Since the petitioner is not seeking possession, therefore, the ad-valoremcourt fees is not required to be paid. The counsel for the petitioner hasalso submitted that the agreement to sell stipulated the sale consideration to beRs. 28 crores, whereas, the sale deed shows the consideration having been paidas Rs. 22 crores. Even a reference of the agreement to sell has not been madein the sale deed. This also shows that the person executing the sale deed infavour of the respondent No.3, deliberately manipulated the things and he wasnever authorised by the company to execute the sale deed. To support hiscontention that since the petitioner is not the executant of the sale deed and isnot seeking possession of the suit property, therefore, it is not required to paythe ad-valorem court fees, the counsel for the petitioner has relied upon thejudgment rendered in the case of ‘Suhrid Singh @ Sardool Singh v. RandhirSingh and others, (2010) 12 SCC 2087’. To support hiscontention that since the petitioner is not the executant of the sale deed and isnot seeking possession of the suit property, therefore, it is not required to paythe ad-valorem court fees, the counsel for the petitioner has relied upon thejudgment rendered in the case of ‘Suhrid Singh @ Sardool Singh v. RandhirSingh and others, (2010) 12 SCC 2087’. While reiterating the earlierargument, the counsel for the petitioner has submitted that under theCompanies Law, the company is supposed to act through resolutions. In thepresent case, there is no resolution presented, either at the time of execution ofthe sale deed; or now even with the application filed by the respondents underOrder 7 Rule 11 CPC. Nor the copy of such a resolution has been sent to theRegistrar of Companies, as required under the Companies Act. Hence, theorder passed by the Court below is totally without any legal warrant.Accordingly, the order deserves to be set aside. Moreover, the Court fees is thematter between the plaintiff and the Court, therefore, the defendant could nothave even filed the application under Order 7 Rule 11 CPC. 5.Replying to the arguments raised by the counsel for the petitioner,learned senior counsel for respondent No.3 has submitted that the sale deed hasbeen executed by none other than the petitioner company itself. The petitioneris a statutory entity under the Companies Act. The property was owned by thecompany and not by any director. The sale deed has been executed by thecompany through a person, who was, undisputedly, the director of the companyat the relevant time. The counsel has further submitted that even the plaintfiled by the petitioner company shows that on the date of execution of the saledeed, the person who claims to represent the petitioner company in this suit,was not even a director. Referring to the paragraphs No. 1.1, 1.4 and 1.5 of theplaint, the counsel for the respondents has submitted that it is the pleaded caseof the petitioner itself that from 1.5.2019 till 5.6.2020, the defendants No.1 and2 were the only directors and in-charge of the affairs of the company. Theperson who claims to represent the company now, re-joined as a director onlyon 5.6.2020; along with respondents No.1 and 2. However, in the meantime,the sale deed already stood executed on 31.7.2019. It is one of the directors,who were in position on the date of execution of the deed, who has executedthe sale deed. Theperson who claims to represent the company now, re-joined as a director onlyon 5.6.2020; along with respondents No.1 and 2. However, in the meantime,the sale deed already stood executed on 31.7.2019. It is one of the directors,who were in position on the date of execution of the deed, who has executedthe sale deed. The other director had attested the resolution of the company,which was produced before the Sub Registrar qua authorising the executingdirector to execute the sale deed in favour of the respondent No.3. Hence, thesale deed was duly executed by the authorised person. It is further submittedthat even if the resolution of the company was not there, still the sale deed ispurported to have been executed by the company only. Hence, the companyhas to be taken as the executant. To reiterate his argument, the counsel for therespondent has referred to the payments of the amount of sale consideration toshow that the entire amount of Rs. 22 crores had been deposited/transferred inthe account of the company through bank transactions. Hence, there is nodoubt that the sale deed was executed by the plaintiff company only. Hence,the company was required to pay the ad-valorem court fees to file its suit. Thecounsel for the respondents, by referring to Para 10 (V) of the plaint, has alsosubmitted that the plaintiff company has even admitted in the plaint thatpossession of the land sold in favour of the respondents is with therespondents. Hence, this is an admission of the fact that the property has beenduly sold by the company. The petitioner company; though may not havesought possession in the present plaint, however, that was a ploy only to avoidpayment of court fees. Otherwise, once it is admitted by the plaintiff that thepossession is with the defendant, then a suit simpliciter for declaration of thesale deed as void is not even maintainable. Supplementing his argument, thecounsel for respondents has further submitted that although theplaintiff/petitioner has challenged the agreement to sell, however, even theprayer in the plaint clearly shows that it is claiming even the difference of theamount paid by the respondents and as claimed to have been mentioned in thesame agreement to sell. This also leaves no doubt that it is the company who isthe executant of the sale deed and it is even ratifying the sale deed by claimingthe difference of the sale consideration. This also leaves no doubt that it is the company who isthe executant of the sale deed and it is even ratifying the sale deed by claimingthe difference of the sale consideration. 6.Having considered the arguments of the counsel for the parties andhaving perused the record, this Court finds substance in the arguments of thecounsel for the respondents. Undisputedly, the suit property was owned by thecompany. It cannot be taken to be property of any director or even of all thedirectors jointly or severally. The sale deed has been executed in the name ofthe company. Even the person, presenting the sale deed for registration andsigning the same, is admitted to be one of the directors on the date of executionof the sale deed. Therefore, the sale deed itself proclaims to have beenexecuted by the company. Although counsel for the respondents has referred toa resolution passed by the company authorising the director signing the saledeed to execute the same but the petitioner disputes the veracity of thatresolution, however, that could be only a point to be adjudicated after takingevidence during the trial of the suit but that aspect is not relevant for thepurpose of assessment of the court fees. For the purpose of court fees, it ismore than sufficient that the plaintiff himself has pleaded in the plaint that theperson, who executed and signed the sale deed on behalf of the company, wasone of the two directors; and the other director, as on that date, has not evencome forward to dispute the same. Although the petitioner might have enteredas a director subsequently, but on the date of sale, he was, admittedly, not evena director. Therefore, he cannot claim to have any authority to insist uponsigning the sale deed. Although to draw his claim qua being a mandatorysignatory to the sale deed to be executed pursuant to the agreement to sell, thepetitioner has submitted that in the agreement to sell it was written that all thedirectors, who were signatory to the agreement to sell, would be required tosign the sale deed, however, this argument is totally irrelevant because theproperty was owned by the company and not by any directors jointly orseverally and, accordingly, only those persons would have right to sign the saledeed, who were the directors of the company on the date of sale or theirauthorised representative. Any earlier arrangement qua authority to sign thesale deed on behalf of the company is rendered totally nugatory. Although thecounsel for the petitioner has relied upon the judgment rendered by theSupreme Court in the case of Suhrid Singh (supra) and has submitted that thepetitioner was not the executant and is in possession of the property also,therefore, the court fees is not required to be paid ad-valorem, however, thisargument of the counsel for the petitioner is also liable to be noted only to berejected. The judgment cited by counsel for the petitioner is totallydistinguishable. In the said judgment, by way of example, the Supreme Courthas mentioned two brothers being co-owners and only one executing the saledeed. Therefore, the second brother has been held to be not the executant andtherefore, was held to be not liable to pay the ad-valorem court fees. However,in the present case, there was only one owner of the property. It was thecompany. The sale deed is executed by none other than the said company.Hence, the said judgment has no relevance with the facts of the present case. 7.Another aspect which has come up from the arguments of thecounsel for the parties is; that the petitioner itself has admitted that thepossession of the property had gone to the defendants pursuant to the sale deed.The difference of price, as reflected in the sale deed and as reflected in thealleged agreement to sell, has also been claimed in the plaint by the petitioneras an alternate relief. This also leaves no doubt that the petitioner companyitself perceives and accepts the sale deed as having been executed by a properperson. It is a different matter whether the mere suit for declaration andcancellation of the sale deed could have been filed by the petitioner withoutseeking relief of possession, however, the fact remains that the plaintiff itselfhas claimed cancellation of the sale deed, though by way of declaration of thesame to be null and void. 8.The argument of the counsel for the petitioner to the effect that thecourt fees is a matter between the plaintiff and the court and, therefore, thecourt should not have pass any order regarding the court fees on an applicationmoved by the respondents/defendant under Order 7 Rule 11 CPC, is also totallymis-conceived. It is obvious that the power under Order 7 Rule 11 CPC is withthe Court only. It is obvious that the power under Order 7 Rule 11 CPC is withthe Court only. However, the defendant is not estopped from bringing to thenotice of the court that the deficient court fees has been affixed by the plaintiff.By moving such an application, the defendant only initiates the power of theCourt in the nature of his public duty. Thereafter, the Court passes the orderonly if it finds the deficiency in the court fees as per the provisions of law.Hence, it is not by way of enforcement of any right of the defendant that thecourt orders for making payment of deficient court fees, rather, it is only inexercise of its public powers by the Court, though after being initiated on aninformation received from the defendant. 9.At the fag end of the argument, this has also come from both thesides that after the trial Court initially granted time for payment of the Courtfees and the same was not deposited within the time, the petitioner had movedan application for extension of the time under the said provisions and the trialCourt has granted the petitioner time upto 14.12.2021 to make good thedeficiency in court fees. The counsel for the petitioner has submitted that thepetitioner be granted some more time to make good the deficient court fees.This Court finds substance in this prayer of the counsel for the petitioner. 10.In view of the above, finding no merit in the present petition, thesame is dismissed. However, the petitioner is granted permission to make goodthe deficiency in court fees, as ordered by the trial Court, latest by 31.01.2022. 11.It is also clarified that nothing observed in the order hereinabove,would be taken as an expression on merits of the case; during the trial of thesuit.