Calcutta High Court
Magan Mal Sethia & Anr vs Pijush Saha on 4 March, 2015
Author: Soumen Sen
Bench: Soumen Sen
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
Present :
The Hon'ble Justice Soumen Sen
G.A.No.106 of 2015
C.S.No.112 of 2011
Magan Mal Sethia & Anr.
Vs.
Pijush Saha
For the Plaintiffs : Mr. Reetobrato Mitra,
Mr. Rudrajit Sarkar,
Mr. Aditya Kanodia
For the Defendant No.1 : Mr. Amitava Das,
For the Defendant No.2 : Mr. Sabyasachi Sen,
Mr. Aniruddha Mitra
For the Defendant No.3 : Mr. Abhrajit Mitra, Sr. Adv.,
Mr. Debnath Ghosh,
Mr. Soumya Roychowdhury
Heard on : 04.02.2015, 09.02.2015, 11.02.2015,
18.02.2015
Judgment on : 4th March, 2015
Soumen Sen, J.:- An application for addition of party and
amendment of the plaint is being opposed by Shree Venkatesh Films Pvt.
Ltd., the proposed defendant No.3.
The learned Counsel for the original defendant as well as the
proposed defendants invited this Court to decide the matter without
affidavits.
In or about 16th May, 2011, the plaintiff filed a suit against the
respondent, namely, Pijush Saha praying, inter alia, for decree for a sum
of Rs.30,86,844/- and a decree of perpetual injunction restraining the defendant, his men, agents, servants, assigns, successor-in-interest, successor-in-office and/or each one of them from selling, transferring, alienating, mortgaging, hypothecating and/or creating any third party interest in any manner whatsoever in respect of the rights of the film "Kella Fate" in any manner whatsoever.
The plaintiff contended that the defendant approached the plaintiff for a loan of Rs.25 lacs for production of the Bengali Film "Kella Fate". It was represented that the defendant would be requiring Rs.25 lacs to complete the production of the said Film. The defendant assumed to refund the loan with interest at the rate of 18 per cent per annum within three months from the date of release of the said film and in any event by March 31, 2011. On such representation, the plaintiff agreed to lend and advance a sum of Rs.25 lacs.
In consideration of the plaintiff having agreed to grant such loan, the defendant executed a Memorandum of Agreement on January 11, 2010, securing the claim of the plaintiff by assigning full rights of the Film for screening in all satellite channels of India and overseas Cable T.V. and all other T.V. Channels for marketing and screening in other forms of video and audio. The defendant assured and confirmed that the said rights were not assigned in favour of anyone.
The plaintiff relying upon the aforesaid representation and believing it to be true extended the financial assistance.
It was provided in the said agreement that in the event of default in repayment of loan with interest, the plaintiff would be entitled to sell the said right to any party or person for realization of the amount due and payable by the defendant to the plaintiff.
On an interlocutory application being taken out by the plaintiff being G.A. No.1516 of 2011, an order was passed on 19th May, 2011 injuncting the respondent/defendant, his men, agents, servants, assigns, successor-in-interest and successor-in-office and/or each one of them from selling, transferring, alienating, mortgaging, hypothecating or creating any third party interest in any manner whatsoever and by any means whatsoever in respect of the aforesaid rights in relation to the Film "Kella Fate" in any manner whatsoever.
During the pendency of the said proceeding, the respondent appeared and submitted that the respondent was willing to settle the suit. The matter was adjourned for sometime.
On 25th June, 2011, the petitioners were informed that an interlocutory application in G.A. No.1757 of 2011 in connection with C.S.131 of 2011 was appearing in the list under the heading "Adjourned Motion" wherein the firm of the respondent was impleaded as the first respondent. The petitioners being aware of the said proceeding and on enquiries being made came to know that on 17th of June, 2011, an interim order was passed with regard to the self-same film. The petitioners, thereafter, appeared in the said proceeding and on the basis of the submission made on behalf of the petitioner, the Hon'ble Judge taking interlocutory motion directed G.A.No.1516 of 2011 to be heard along with G.A. No.1757 of 2011. The advocate-on-record of the proposed defendant No.2 who was the plaintiff in the said suit supplied copies of the pleadings by a letter dated 25th June, 2011. Thereafter, by an order dated 1st August, 2011, the parties were directed to exchange affidavits and both the applications were directed to be listed to be heard together. On a perusal of the pleading in the other suit it transpired that Sushovan Ghosh sought to rely upon an agreement dated March 24, 2010, whereby it claimed to have acquired certain rights in respect of the Bengali Film "Kella Fate" having advanced certain sums of money to the respondent. The sixth defendant, namely, Shree Venkatesh Films Pvt. Ltd. also relied on an agreement dated 12th March, 2010 and claimed to have acquired certain rights in respect of the said Bengal Film "Kella Fate". The sixth defendant also claimed to have released DVD and CD in respect of the said Bengal Film "Kella Fate" in terms of the said purported agreement dated 12th March, 2010.
The purported agreement dated 12th March, 2010 appears to have been entered into with Prince Entertainment, a partnership firm, in which Piyush Saha, Parimal Chandra Saha, Gouri Saha and Kakoli Saha were the partners. The producer of the film is Pijush Saha.
The plaintiff contended that the said agreements dated 12th March, 2011 and 24th March, 2011 are both sham, void, invalid and bad in law. It is contended that having regard to the agreement entered into between the plaintiff and the defendant, the said defendant could not have entered into any agreement touching or concerning the rights in respect of the Bengal Film which has already been under the agreement dated 11th January, 2010 and the petitioners are the first owners of the copyright in respect of the said film.
During the pendency of the said applications, on 5th January, 2015, the petitioner received a notice from the proposed added defendant No.2 wherefrom it transpired that the said proposed defendant No.2 is seeking to withdraw C.S.No.131 of 2011 on 7th January, 2015. It further transpired that some arrangement was entered into between the defendant and the proposed defendants by reason whereof the proposed defendant No.2 is seeking to withdraw its suit in which an order of injunction was subsisting against the Venkatesh Films Pvt. Ltd.
The instant application has been filed on 8th January, 2015 seeking amendment and addition of party.
Mr. Reetobroto Mitra, learned Counsel appearing on behalf of the petitioners submits that the protective umbrella the plaintiffs were enjoying during the pendency of the proceedings would be lost in view of the fact that Susovan Ghosh has now withdrawn the suit in which Venkatesh Films Pvt. Ltd. is also a party and unless the said defendants are added in this proceeding, the same would cause irreparable loss and prejudice. It is submitted that it is an admitted position that the agreements on which Susovan Ghosh and Venkatesh Films Pvt. Ltd. have relied in asserting their claims over and in respect of their Bengali Film are all subsequent to the agreement entered into between the plaintiffs and producer of the film. It is submitted that the amendment of pleadings being procedural in nature, the same should be liberally granted and the said amendment has now become necessitated for proper adjudication of the right of the plaintiffs over and in respect of the said films in which the presence of the defendants are necessary.
It is submitted that in the amendment, the plaintiff has not made any inconsistent pleas, nor the plaintiff has resiled from any admission, although under certain circumstances, inconsistent pleas are permissible provided they are not mutually exclusive. In the plaint, it is stated that under the Memorandum of Agreement, the defendant granted full local right of the said film for screening in all satellite channels of India and overseas Cable T.V. and all other T.V. Channels for marketing and screening in other forms of video and audio.
In the proposed amendment, the plaintiffs have stated that the right of the plaintiffs being paramount in nature and the right having transferred in favour of the plaintiff prior to the purported agreements entered into by the defendant Nos.2 and 3, the defendant Nos.2 and 3 cannot claim any better right, title or interest than what the defendant No.1 had on the respective date of the said two agreements dated March 12, 2010 and March 24, 2010.
Mr. Mitra has referred to the decisions of the Hon'ble Supreme Court in Gautam Sarup Vs. Leela Jetly & Ors. reported at 2008 (7) SCC 85 and Biswanath Agarwalla Vs. Sabitri Bera & Ors. reported at 2009 (15) SCC 693 and submitted that in the said decisions, it has been categorically held that inconsistent pleas can be allowed so long as they are not mutually destructive.
It is submitted that Section 21 of the Limitation Act, 1963 permits the Court to include a new plaintiff or defendant if such mistake is made in good faith under such circumstances the Court may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on an early date. It is submitted that the plaintiff has disclosed the reason for impleading the proposed defendant Nos.2 and 3.
The learned Counsel has referred to the decision of the Hon'ble Supreme Court in Karuppaswamy and Others Vs. C. Ramamurthy reported at 1993(4) SCC 41 and a decision of the Patna High Court in Chunchun Chaudhary Vs. State of Bihar and Others reported at AIR 1989 Patna 34 and submitted that the aforesaid decisions clearly recognize that in an appropriate case the Court is empowered to direct that the party would be deemed to have been impleaded from an early date provided the mistake in not impleading him can be said to have been made in good faith. This right, according to the learned Counsel, was not available under the Old Law, namely, provisions of Section 22 of the Limitation Act, 1908.
Per contra, Mr. Abhrajit Mitra, learned Senior Counsel appearing on behalf of the proposed defendant No.3 submitted that this application cannot be allowed for the following reasons:-
(i) The claim against the proposed defendant No.3 is barred by the laws of limitation.
(ii) In the application for amendment and addition of party there are inconsistent pleadings.
(iii) Mortgage of movables are not permissible in law.
It is submitted on behalf of Shree Venkatesh Films Pvt. Ltd. that the cause of action against the proposed defendant No.3 arises soon after 25th June, 2011 when pursuant to the observation made by the learned single Judge, the Advocate-on-record on behalf of Susovan Ghosh supplied the pleadings in respect of C.S.131 of 2011. It is submitted that the Court as a general rule should decline amendments if a fresh suit on the amended claim would be barred by limitation on the date of application. In this regard, the learned senior Counsel has referred to the decisions of the Hon'ble Supreme Court in Voltas Limited Vs. Rolta India Limited reported at 2014 (4) SCC 516 and T.N. Alloy Foundry Co. Ltd. Vs. T.N. Electricity Board & Ors. reported at 2004 (3) SCC
392. It is submitted that it was incumbent upon the plaintiff on receiving the pleadings in connection with C.S.131 of 2011 to apply for the reliefs claimed now within a period of three years from the date on which such pleadings were supplied, i.e., June 25, 2011. The plaintiffs have filed this application beyond a period of three years. Hence, the suit against Shree Venkatesh Films Pvt. Ltd. is barred by limitation. It is argued that the withdrawal of the suit by Susovan Ghosh is immaterial and inconsequential in deciding the instant application filed by the plaintiff.
It is argued that the plaintiffs in the original plaint have claimed that the defendant secured the loan by granting full rights of the said film for screening whereas in the amended plaint, a claim is made that the plaintiffs have become the owners of the copyright. It is submitted that such plea being inconsistent the amendment could not be allowed. In this regard, reference was made to Smt. Jayasri Gua (Nee Ghosh) Vs. Smt. Sukla Ghosh reported at AIR 2012 Cal 237. It is further submitted that even if it is assumed that any security is created by giving the rights of the films in question moveable of mortgagee is unknown in law and, accordingly, no amendment could be allowed by which the plaintiffs seek to enforce the right as a mortgage over the moveable assets.
In reply, Mr. Reetobrato Mitra, the learned Counsel appearing on behalf of the plaintiffs referred to the decision in Co-operative Hindusthan Bank Ltd. & Anr. reported at AIR 1932 Calcutta 524 and United Bank of India Vs. The New Glencoe Tea Co. Ltd. reported at AIR1987 Cal 143 for the proposition that under Indian Law there can be a valid mortgage of movables though such a mortgage may be different from such mortgage at English Common Law or under Bills of Sales Act. To this, Mr. Abhrajit Mitra responded by saying that such a mortgage when not accompanied by delivery of possession is still operative save and except against bona fide purchasers without notice. The proposed defendant No.3 being a bona fide purchaser without notice would not be bound by any arrangement entered into between the plaintiffs and the defendant No.1.
In the instant case, the plaintiff has invited this Court to construe Order 1 Rule 10(5) of the Code of Civil Procedure and Section 21 of the Limitation Act, 1963 in a beneficial manner and after taking into consideration the orders passed in the earlier proceedings. It appears from the record that the plaintiffs in order to protect their rights intervened in C.S. 131 of 2011. The two suits along with interlocutory applications were taken up for hearing by the learned single Judge as would appear from the order dated 1st August, 2011 in view of the fact that the two suits were related in the sense that the subject matter of the two suits was a Bengali film by the name of "Kella Fate".
The plaintiffs in the previous suit claimed exclusive rights over the film and so does the plaintiff (Susovan) in the subsequent suit. One of the defendants (Shree Venkatesh Films Pvt. Ltd.) in the subsequent action also claimed exclusive rights over and in respect of the film. The observations made by the learned single Judge in the order dated 1st August, 2011 are relevant to appreciate the present application:-
"At the initial stage, the pleadings were required to be exchanged between the parties to the two actions but no opportunity was given to parties to the earlier suit to deal with the pleadings of the parties to the subsequent suit and vice versa. Since what is really in issue is as to which of the three main parties has the rights in respect of the film and as to whether there are any residual rights to be exploited either by the first owner of the copyright therein or by the two other claimants thereto, it is necessary that the parties to the second suit, except the common defendant, be permitted to deal with the petition filed by the plaintiffs in the earlier suit and the plaintiffs in the earlier suit use a reply thereto. It will also be open to the plaintiffs in the earlier suit to deal with the cases of the plaintiff and the sixth defendant in the subsequent suit and the plaintiff and the sixth defendant will be having a right to file replies thereto.
Such exercise should be completed within a fortnight from date. In other words, the cross affidavits-in-opposition should be filed within a week from date and the replies thereto may be filed before the matter is taken up on August 17, 2011. Each of the parties will be entitled to the full set of pleadings in the other suit to be supplied on usual terms in course of the day."
Prior thereto on 17th June, 2011, an order of injunction was passed against Venkatesh Films from exercising any further rights in respect of the film till disposal of the application being G.A. No.1757 of 2011.
On 19th January, 2015, an order was passed permitting Susovan Ghosh to withdraw the suit with the rider that in the facts and circumstances of the case, the interim order dated 17th June, 2011, restraining Shree Venkatesh Films Pvt. Ltd. from exercising any further rights over the film will be deemed to be operative in the suit filed by the plaintiffs of the instant suit for a period of six weeks from date to enable the plaintiffs to get the same order in the instant suit. This order is not under challenge.
The petitioner has filed this application on the basis of a notice received from the Advocate-on-record of Susovan expressing his desire to withdraw his suit.
The application for addition of party and consequential amendment has to be considered in the light of the orders passed in the earlier proceedings. Had the interlocutory motion of Susovan Ghosh been alive and the order that Susovan Ghosh was enjoying continued the plaintiffs in the instant suit might not nave felt any necessity to file any application since the right of the plaintiff was adequately protected. The adjudication of respective rights over the said films in the earlier proceedings could not take place in view of withdrawal of suit by Susovan. The plaintiffs were waiting for the outcome of the pending applications. The plaintiffs in the said proceeding have independently asserted their rights and were enjoying the protection under the order dated June 17, 2011. The said protection was extended by the order dated 19th January, 2015.
In view of the aforesaid, the decisions cited by Mr. Abhrajit Mitra that the Court should decline amendments if a fresh suit would be otherwise barred against the added party would not apply. Section 21 of the Limitation Act gives the Court a discretion to condone delay in filing the application for addition of party after the period of limitation provided the same is made bona fide and good cause is shown therefor. The object of the said Section is primarily to protect the right a party might have but action was not originally constituted properly.
The power to implead a party being Order 1 Rule 10(2) was not available to the plaintiffs under the provisions of Section 22 of the Limitation Act, 1908. However, in Section 21 of the Limitation Act, 1963, a proviso was added by which the Court is empowered to include a new plaintiff or defendant if the Court is satisfied that the omission to include such a party was due to mistake made in good faith and in such a situation may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on an early date. This change in the Limitation Act, 1963 was noticed by the Hon'ble Supreme Court in Karuppaswamy (supra). It was held in Paragraph 5 of the said report that "the proviso to sub-section (1) of Section 21 of the Act is obviously in line with the spirit and thought of some other provisions in Part III of the Act such as Section 14 providing exclusion of time of proceeding bona fide in Court without jurisdiction, when computing the period of limitation for any suit, and Section 17(1) providing a different period of limitation starting when discovering a fraud or mistake instead of the commission of fraud or mistake."
In Ramalingam chettiar Vs. Pattabiraman & Anr. reported at AIR 2001 SC 1185, the Hon'ble Supreme Court analyzed Section 21 of the Limitation Act and states:-
"6. .........S.21 of the Limitation Act contemplates two situations - one under the substantive provision which provides that where after filing of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been brought on the day when he was added or substituted as a party in the suit. The second situation contemplated under the proviso to the substantive provision is where the court is satisfied that a new plaintiff or defendant was omitted to be added or substituted due to a mistake in good faith, the court may direct that the suit, as regards the newly added or substituted party, shall be deemed to have been instituted on any earlier date. Thus, under the proviso, if the Court is satisfied, it can direct that the suit as regards newly added or substituted plaintiff or defendant shall be deemed to have been instituted on an earlier date. In such a case, the court after substituting or adding a party in the suit is required to pass a separate/further order that the suit as regards the newly added defendant or plaintiff shall be deemed to have been instituted with effect from the date the suit was laid. Merely adding or substituting a plaintiff or defendant by the Court is not enough. In the absence of any order that the impleadment of newly added or substituted party shall take effect from the date of institution of a suit, the period of limitation so far as the newly added or substituted shall run from the date of their impleadment in the suit........"
Chunchun Chaudhary (supra) also had taken note of Section 21 of the Limitation Act and Order 1 Rule 10(2) and stated that the Court has a discretion in terms of proviso under Section 21 of the Limitation Act to condone the delay in filing the application for addition of party after the period of limitation provided the same is made bona fide and good cause is shown therefor.
The primary object of Order 1 Rule 10(2) of the Code of Civil Procedure is to bring before the Court at one and the same time of the persons interested in the dispute so that all the controversies in the suit may be finally determined once and for all in the presence of the parties without delay, inconvenience and expenses of several actions, trials and inconclusive adjudication. Notwithstanding the fact that the said provision confers wide discretion but such discretion has to be exercised judicially and on sound legal principle. In Anil Kumar v. Shivnath reported at 1995 (3) SCC 147, considering the provisions of Order 1 Rule 10(2), the Hon'ble Supreme Court observed that "though the court may have power to strike out the name of a party improperly joined or added as a party either on application or without application of either party, the condition precedent is that the court must be satisfied that the presence of such party would be necessary in order to enable the court to effectually and completely adjudicate upon and settle all questions involved in the suit..... The object of the rule is to bring on record all the persons who are parties to the dispute relating to the subject matter so that the dispute may be determined in their presence at the same time without any protraction, inconvenience and to avoid multiplicity of proceedings."
The said power can be exercised on either of the two grounds:-
(a) Such person ought to have been joined, either as a plaintiff or as a defendant, but is not so joined; or
(b) Without his presence, the question involved in the suit cannot be decided finally and effectively.
Under sub-rule(2) of Rule 10,only two classes of persons may be added as parties to a suit: (I) necessary party, i.e. a person who ought to have been joined as a party and in whose absence no decree or order can be passed; or (ii) proper party, i.e. a person, whose presence is necessary for complete and effectual adjudication of the questions involved in the suit. If a person is neither a necessary nor a proper party, he cannot be impleaded in a suit.
In Savitri Devi Vs. District Judge, Gorakhpur & Ors. reported at 1999 (2) SCC 577 in paragraph 9 the Hon'ble Supreme Court has observed:-
"9. Order I Rule 10 CPC enables the Court to add any person as a party at any stage of the proceedings if the person whose presence before the Court is necessary in order to enable the Court to effectively and completely adjudicate upon and settle all the questions involved in the suit. Avoidance of a multiplicity of proceedings is also one of the objects of the said provision in the Code."
Under Order 1 Rule 10(2) of the Code of Civil Procedure, the Court has power to implead necessary party in order to enable the Court to adjudicate effectually and completely all the questions involved in the suit. The necessity to implead the defendant Nos.2 and 3 only arose in view of the order passed by this Court directing the interlocutory applications in both the suits to be heard together after exchange of affidavits. The withdrawal of suit by Susovan has made all the difference. Moreover, it appears that the plaintiffs have prior agreement to exploit valuable rights in relation to the said Bengali Film. The Memorandum of Agreement dated 11th January, 2010 is binding on the representatives and assigns of the defendant No.1.
In the instant case, on the basis of the materials-on-record, it is evident that Susovan Ghosh and Shree Venkatesh Films Ltd. have acquired rights subsequent to the agreement entered into between the plaintiff and the defendant. The plaintiff at the time of instituting the suit was not aware of the subsequent alleged assignments in favour of Susovan Ghosh and Venkatesh Films Pvt. Ltd. The plaintiffs became aware of such subsequent assignments only after the pleadings were supplied to the Advocate-on-record of the plaintiffs. Thereafter, by reason of the order passed in the proceeding the right of the plaintiff was adequately protected. The necessity to implead Susovan and Venkatesh Films arises in view of withdrawal of suit by Susovan. Moreover, the plaintiffs and Venkatesh Films are making rival claims over and in respect of the said Bengali film. The learned Advocate on behalf of Susovan Ghosh has produced before this Court a letter dated 19th December, 2014, recording a settlement between Susovan and Prince Entertainment. It records that Sovan Films of which Susovan Ghosh is the proprietor is surrendering and relinquishing its rights over and in respect of the feature film "Kella Fathe" in favour of M/s. Prince Entertainment (P4) as Producer with effect from 19th December, 2014. The suit of Susovan was withdrawn on the basis of the aforesaid communication.
In view of the aforesaid, in my opinion, the application for addition of party and the consequential amendments in the plaint cannot be defeated on the plea of limitation.
Although the law permits mortgage of moveables and such a mortgage when not accompanied by delivery of possession is still operative, save and except, against the bona fide purchasers without notice the said question is not required to be gone into at this stage in considering the prayer for addition of party and consequential amendments of the plaint. Under such circumstances, there shall be an order in terms of (a) (b) (c) (d) and (e) of the Petition. The amendment shall be carried out within two weeks from date. A copy of the amended plaint shall be served upon the advocate-on-record of the added defendants within one week thereafter. The suit, however, shall be deemed to have been instituted against the defendant Nos.2 and 3 on and from 16th May, 2011.
The order of injunction shall continue for a period of six weeks from date or until further order whatever is earlier. This application is, accordingly, disposed of with liberty to the petitioner to apply afresh for other reliefs upon notice to the added defendants. The order of injunction passed in this proceeding is only to protect the interest of the plaintiffs which the plaintiffs have been enjoying since 1st August, 2011.
The urgent xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.
(Soumen Sen, J.)