Jammu & Kashmir High Court - Srinagar Bench
Bakshi Faiz Ahmad vs Bakshi Farooq Ahmad And Another on 18 April, 2018
Author: Tashi Rabstan
Bench: Tashi Rabstan
HIGH COURT OF JAMMU AND KASHMIR
AT SRINAGAR
...
CIMA no.08/2018 MP no.01/2018 Date of order: 18 .04.2018 Bakshi Faiz Ahmad v.
Bakshi Farooq Ahmad and another Coram:
Hon'ble Mr Justice Tashi Rabstan, Judge Appearing Counsel:
For Petitioner(s): Mr Altaf Haqani, Advocate For Respondent(s): Mr Sajad A. Mir, Advocate Whether approved for reporting? Yes/No
1. Instant Civil Miscellaneous Appeal has been preferred under and in terms of Section 104 read with Order XLIII of the Code of Civil Procedure (CPC) against Order 14th March 2018, passed by learned 3rd Additional District Judge, Srinagar (for brevity "court below") on an application for grant of ad interim relief, filed in a Civil Suit titled Bakshi Farooq Ahmad v. Bakshi Faiz Ahmad and another, and for setting aside the same, on the grounds assigned therein.
2. The case set up by appellant is that respondent no.1 instituted a Suit for declaration, partition, possession with mandatory and permanent injunction against appellant and respondent no.2 before the court below. An application for grant of ad interim relief, anent the suit, filed by respondent no.1, has been disposed of by court below vide order dated 14th March 2018. It is this order of which CIMA no. 08/2018 Page 1 of 44 appellant is aggrieved, forcing him to thump at portals of this Court with Appeal on hand.
3. I have heard learned counsel for parties at length and considered the matter.
4. Learned counsel appearing for appellant, while dilating his first limb of arguments, strenuously avers that impugned order is bad in eye of law inasmuch as Suit of plaintiff/respondent no.1 was liable to be rejected under Order VII Rule 11 CPC, more particularly when a civil court has no jurisdiction to entertain any suit or proceedings vis-à-vis any matter that is to be determined by the Tribunal or Appellate Tribunal owing to mandate of law enshrined in Sections 241 and 430 of Indian Companies Act, 2013. Learned counsel for appellant's next limb of argument is that court below has failed to appreciate that it has no jurisdiction to pass impugned order, given the fact that a Suit for grant of Permanent and Mandatory Injunction qua same property was already pending adjudication before learned 1st Additional Munsiff, Srinagar, in which an order of status quo passed, was in force. His subsequent contention is that appellant had specifically brought to the notice of court below that suit properties were partitioned amongst parties during life time and under guidance of their father - Late Bakshi Abdul Hamid in the year 1990 and therefore, Suit was not maintainable and that while respondents 1&2 had been assigned their shares by predecessor-in-interest, i.e. father CIMA no. 08/2018 Page 2 of 44 of parties, and their share is in the two separate buildings situated on higher level in the same premises and constructed in the year 1990; appellant was assigned his share in ancestral house constructed in the year 1930, which had already suffered major damage during devastating floods of 1950 followed by floods of September 2014. It was in this context that appellant had resisted application for grant of ad interim relief by claiming old building assigned to his share, requiring necessary repairs and renovations. Court below, according to learned counsel, has not taken into consideration the principle of Order II Rule 2 CPC. To bolster his submissions, learned counsel for appellant has placed reliance on judgements dated 19th July 2017 passed by the Madras High Court in C.R.P.(PD)(MD) no.775 of 2017 titled Selvarathnam v. M/s Standard Fire Words Pvt. Ltd; K.P.M. Aboobucker v. K. Kunhamoo and others 1958 AIR (Mad) 297; and Anil Gupta and others v. J.K.Gupta and others 2002 CompanyCases Vol 110 P&H 610.
5. Per contra, learned counsel for respondent no.1 states that the contention raised by appellant as regards bar of Civil Courts, is unfounded for the reason that Company Law Tribunal cannot deal with question of fact, which can only be dealt with by a Civil Court. He also insists that the company has not been sued as a legal person nor any defendant has been sued in the capacity of director/office bearer or the company, so the provisions of Companies Act, CIMA no. 08/2018 Page 3 of 44 2013, will not come into play. Qua Section 430 of the Companies Act, 2013, he asserts that it bars Civil Court to grant injunction in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act by the Tribunal or Appellate Tribunal and that in the instant case neither any order or action has been taken by Tribunal nor has any action be taken. The suit pertains to company assets viz. land, building and other assets of company besides the land underneath and appurtenant thereto, which being under the proprietorship of plaintiff/respondent no.1 because plaintiff is exclusive owner to the extent of more than 25 Marlas in addition to other shares. The suit preferred before the court below is basically a partition suit, wherein various properties have been made subject-matter of Lis, including the assets of Hotel Shangrila, which hotel is built on a proprietorship land partly in the name of plaintiff/ respondent no.1.
Earlier injunction suit relates to common approach and appellant - defendant therein admits that the property in unpartitioned and is now trying to take U-turn by mentioning in his objections to the application for interim relief. He also argues that assuming through not admitting that there is any substance in any of contentions of appellant, proper way of law must have been to file a written statement before court below as well as to argue contentions raised after the same are treated as preliminary issues. The order impugned has not been CIMA no. 08/2018 Page 4 of 44 passed in ex parte, but after hearing both sides and applying judicial mind on the basis of guidelines for grant of injunction as per catena of authorities cited therein. Despite status quo orders, appellant in gross violation thereof, had been carrying on the construction, for which contempt has already been framed against him on the basis of the report of the Commissioner as well as the Police report. To buttress his submissions, learned counsel for respondent no.1 has relied on Dhulabhai etc. v. State of MP, 1969 AIR (SC) 78; Sahara Fabrics v. Kailash and anr., 2006 (2) (Bom) (R) 377; Greeneline Transit System Pvt. Ltd v. Secy. Cum Commissioner Transport and another 2012 Supreme (Del) 2159; and N. Ramji v. Ashwath Narayan Ramji & others, 2017 Supreme (Mad) 1208.
6. The J&K Code of Civil Procedure was first published in 1873 A.D. (Samvat 1930 Bikrami). It was amended in the 1896 A.D. (Samvat 1953) on the pattern of the Indian Civil Procedure Code enacted in 1882. Later in the year 1920 A.D. (Samvat 1977 Bikrami), J&K State adopted almost verbatim Indian Civil Procedure Code, 1908 A.D. with certain additions or deletions of minor nature. Amendments made in Indian Code in the year 1978 were adopted in the year 1983 as also amendments to Indian Code in the year 1999 were adopted in the year 2009 by Act VI of 2009. The J&K Code of Civil Procedure, Samvat, 1977, (1920), as sanctioned by Maharaja came into force on 1st day of Baisakh, 1978 (Bikrami). It consolidated and CIMA no. 08/2018 Page 5 of 44 amended laws relating to procedure of courts of civil judicature. The Code is mainly divided into two parts, namely, Sections and Orders. While main principles are contained in Sections, detailed procedures qua matters dealt with by Sections are specified in Orders. Civil Procedure Code is a complete Code itself. Once proceedings are initiated thereunder, rights and remedies emanating therefrom have to be looked into and all other manners and/or procedures are impliedly prohibited. In the present case, provisions of Order II Rule and Order VII Rule 11 of the Code, as claimed by learned counsel for petitioner, play pivotal role. Order II Rule 2 of the Code envisages that every suit shall include the whole of claim which plaintiff is entitled to make in respect of cause of action, but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.
7. As fervently urged by learned counsel for appellant, if a plaintiff fails to make a claim, which he is entitled to make in respect of cause of action in first suit, then he is precluded from doing the same in a second suit in respect of the claim so omitted. As asserted by learned counsel, applying the rule to facts of present case, subsequent Suit for Declaration and Injunction is barred under Order II Rule 2 CPC, because it relates to same property. The cause of action arose from the same date when earlier suit was filed and no new cause of action had arisen in favour of plaintiff/respondent no.1, entitling him to file a fresh suit.
CIMA no. 08/2018 Page 6 of 44He also asserts that the relief of declaration, as implored for by plaintiff/respondent no.1 in second suit, was available to him when he filed earlier Suit and he omitted the same without obtaining permission of the Court and, therefore, second suit for declaration and injunction is barred under Order II Rule 2 CPC.
8. To counter aforementioned arguments advanced by learned counsel for appellant, the learned counsel for respondent no.1 has submitted that the provisions of Order II Rule 2 CPC have no applicability to the facts and circumstances of the present case. Order II Rule 2 CPC, according to him, is based on principle that no one should be vexed twice for the one and same cause. The rule does not preclude a second suit based on a distinct and separate cause of action. According to the learned counsel for the plaintiff / respondent no.1, and rightly so, provisions of Order II Rule 2 CPC do not attract or apply to present case, inasmuch as neither of two suits arise out of same cause of action, for, a cause of action for instituting a Suit for Permanent and Mandatory Injunction is distinct from cause of action for a Suit for Declaration. It is the right and its infringement and not ground or origin of right and its infringement that constitute cause of action. Earlier suit has not yet been decided on merits by the court concerned and is still pending adjudication. The law does not require a plaintiff to claim all causes of action, which it may have against defendant in respect of corpus or subject matter of the suit.
CIMA no. 08/2018 Page 7 of 44It does not require that when a single transaction gives rise to two separate causes of action they should all be contained in one suit. The Suit for Permanent and Mandatory Injunction is for quia timet action - the same was based on the apprehension of the plaintiff therein that defendants therein had been harbouring intentions of causing injury and invoked jurisdiction of court concerned to prevent defendants from doing so. Cause of action was one for injunction alone, which was ripe for enforcement at that relevant point of time. It has been claimed that in second suit, filed on a different cause of action, institution of first suit and its pendency has not been suppressed or concealed by plaintiff/respondent no.1 before the court below. He has further proceeded to say that provision of Order II Rule 2 CPC, does not place any restriction or limitation on the exercise of the Court's power and it does not either expressly or necessarily provide that power under Order II Rule 2 should be exercised at a particular stage only. Learned counsel has also insisted the relief of Declaration is a different and distinct relief from the relief of permanent injunction restraining defendants from doing certain acts. This Suit for Declaration is, therefore, not barred under Order II Rule 2 CPC. Commenting upon the decisions cited by the learned counsel for the appellant/defendant, learned counsel for the plaintiff/respondent no.1 has strenuously argued that each CIMA no. 08/2018 Page 8 of 44 case has to be decided on the facts of that very case. The facts of different cases cannot be the same.
9. As far as legal position is concerned, it is well known that Order II Rule 2 CPC is based on salutary principle that a defendant or defendants should not be twice vexed for the same cause by splitting claim and reliefs. To preclude plaintiff from so doing it is provided that if he omits any part of the claim or fails to claim a remedy available to him in respect of that cause of action he will thereafter be precluded from so doing in any subsequent litigation that he may commence if he has not obtained prior permission of the court. But the Rule does not preclude a second suit based on a distinct cause of action. Sub-rule (3) of Rule 2 provides that a person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs, but if he omits, except with the leave of the Court, to sue for all such reliefs he shall not afterwards sue for any relief so omitted.
10. In the present case, a glimpse of record, in the form of annexures, placed with the memo of appeal, divulges that earlier suit (Annexure P-4 to memo of appeal) filed by plaintiff/respondent no.1, being File no.249/F, is Suit for Permanent and Mandatory Injunction. That suit was filed on 30th November 2017. At the time of filing of that suit, the case set up by respondent no.1 was that plaintiff and defendants were joint owners in possession of land measuring about 09 kanals along with several residential CIMA no. 08/2018 Page 9 of 44 houses situated at Sonawar Bagh, Srinagar and that on death of their parents, the property devolved upon them, which was yet to be partitioned and even residential houses existing on premises were jointly insured in the name of the parties. The cause of action that has been shown in the earlier suit to have arisen is that defendant no.1 dumped some building material on spot and undertook earth filling, raising level of the ground at some places and construction of garages and also construction of drainage in the common areas which belongs to plaintiff also and plaintiff had never consented for the same. It is claimed by respondent no.1 in earlier suit that cause of action has accrued to him a few days before when defendants dumped building material on spot and started illegal construction of the drain and garage on the common area shared by the parties. The relief sought for by respondent no.1 in his first suit by plaintiff/respondent no.1 is, therefore, advantageous to be reproduced infra:
a) A decree for permanent injunction be passed in favour of the plaintiff and against the defendants whereby the defendants be permanently restrained from raising any sort of construction including the construction of drain on the joint land at sonwar Srinagar.
b) A decree for permanent injunction be also passed in favor of the plaintiff whereby the defendants be restrained from raising the level of the ground at any point/area of the joint land situated at Sonwar Bagh Srinagar.
c) A decree for mandatory injunction be also passed whereby the defendant no.1 be restrained from renting out or creating any charge over any portion of the joint property at sonwar bagh srinagar inherited by the parties.CIMA no. 08/2018 Page 10 of 44
11. Petitioner - defendant no.1, filed Written Statement to first Suit of respondent no.1. Amongst other preliminary objections, petitioner in his Written Statement, has strongly insisted that "the pleadings of the plaintiff disclose that the property according to him is unpartitioned and as such the plaintiff should have directly filed the suit for partition with a consequential relief and as such suit in the present form is not maintainable". Petitioner in written statement admitted that they have a common approach leading to various properties/residential houses in the premises/area measuring 09 kanals.
12. As concerns second suit (Annexure P-1 to the appeal), examination thereof unveils it is, inter alia, for declaration, partition by metes and bounds of various properties, indicated and shown in paragraph 03 of the suit. Respondent no.1 has even disclosed in paragraph 20 that he has earlier filed a Suit for Permanent and Mandatory Injunction against petitioner. In that view of matter, second Suit for Partition is not based on same cause of action. As has been observed by the Privy Council in Mohammad Khalil Khan v. Mahbub Ali Mian, AIR 1949 PC 78, that it is the right and its infringement and not the ground or origin of right and its infringement, which constitute cause of action. There is a distinction between cause of action and right of action.
13. What does the expression 'cause of action' as used in Order II of the Code of Civil Procedure connote? An all embracing CIMA no. 08/2018 Page 11 of 44 definition of the term 'cause of action' is not to be easily found. It may mean one thing for one purpose and something different for another depending; for example, on the question whether the principle of res judicata applies or whether an amendment of pleading is permissible or whether a pleading is good upon demurrer and so on. 'Cause of action' has sometimes been defined as being the fact or facts which establish or give rise to a right of action, the existence of which affords a party a right to judicial relief. The facts, which comprise cause of action, are those which, if traversed, the plaintiff is obliged to prove in order to obtain a judgment, or those facts which defendant would have right to traverse, or as observed in Whitfield v. Aetna, (1906) 205 US 489, "a cause of action is the reverse of a defence, which is defined as whatever tends to diminish the plaintiff's cause of action or to defeat recovery in whole or in part"; or as laid down in Emory v. Hazard Powder Co., (22 SC 476) "a cause of action arises where there has been an invasion of a legal right without justification or sufficient cause"; or that a cause of action is that single group of facts which is claimed to have brought about an unlawful injury to plaintiff and which entitles him to relief. It consists of a right belonging to one person and some wrongful act or omission by another by which that right has been violated. It has been variously stated that a "cause of action" cannot exist without concurrence of a right, a duty, and default and is subject of an action. It has also been CIMA no. 08/2018 Page 12 of 44 defined as subject of an action, or "the wrong for which the law prescribes a remedy".
14. While dealing with the connotation of the term "cause of action" the Supreme Court in A.K. Gupta and Sons v. Damodar Valley Corporation, AIR 1967 SC 96, observed that "The expression 'cause of action' in the present context does not mean 'every fact which it is material to be proved to entitle the plaintiff to succeed' as was said in Cooke v. Gil, (1873) 8 CP 107 (116), in a different context for if it were so, no material fact could ever be amended or added and, of course, no one would want to change or add an immaterial allegation by amendment. That expression for the present purpose only means a new claim made on a new basis constituted by new facts. Such a view was taken in Robinson v. Unicos Property Corpn. Ltd., 1962-2 All ER 24, and it seems to us to be the only possible view to take. Any other view would make the rule futile."
15. The words "new case" have been understood to mean 'new set of ideas'. [See: Dorman v. J. W. Ellis and Co. Ltd., 1962- 1 All ER]. The term "cause of action", however, for the purpose of Order II CPC, means "cause of action", which gives occasion for and forms the foundation of the suit. [See: Sidramappa v. Rajashetty, AIR 1970 SC 1059; and Gurbax Singh v. Bhooralal, AIR 1964 SC 1810].
16. There is, however, a 'distinction between 'cause of action' and the 'right of action'. These terms are not synonymous and interchangeable. A right of action is a right to presently CIMA no. 08/2018 Page 13 of 44 enforce a cause of action a remedial right affording redress, for the infringement of a legal right belonging' to some definite person; a cause of action is the operative facts which give rise to such right of action. Right of action does not arise until performance of all conditions precedent to the action and may be taken away by running of the statute of limitations, through an estoppel, or by other circumstances which do not affect cause of action. There may be several rights of action and one cause of action and rights may accrue at different times from the same cause.
17. "Cause of action" should also be distinguished from 'remedy' which is the means or method, by which cause of action or corresponding obligation is effectuated and by which a wrong is redressed and relief obtained. The one precedes and gives rise to the other, but they are separate and distinct from each other and are governed by different rules and principles. The "cause of action" is the obligation, from which springs the "action", defined as the right to enforce an obligation. A "cause of action" arises when that which ought to have been done is not done or that which ought not to have been done is done. The essential elements of a "cause of action" are, thus, existence of a legal right in plaintiff with a corresponding legal duty in defendant, and a violation or breach of that "right or duty" with consequential injury or damage to plaintiff for which he may maintain an action for appropriate relief or reliefs. The right to maintain an action depends upon existence of a CIMA no. 08/2018 Page 14 of 44 "cause of action" which involves a combination of a right on the part of plaintiff and violation of such right by defendant. The duty on part of defendant may arise from a contract or may be imposed by positive law independent of contract, it may arise of contractus or ex delicto. A "cause of action" arises from invasion of plaintiff's right by violation of some duty imposed upon defendant in favour of plaintiff either by voluntary contract or by positive law.
18. The scheme of Order II of the Code of Civil Procedure suggests that provision of Rule 2 is applicable to a given state of facts wherefrom plaintiff seeks different kinds of reliefs but all of which kinds of relief spring from the same state of facts and, therefore, are connected with the same subject of action. Rule 3 authorises joinder of causes of action which also arise from the same transaction or from transactions connected with the same subject of action.
19. Rule 2 of Order II, Civil Procedure Code however, prohibits splitting up of a cause of action. No precise rule can, however, be formulated for determining what makes the entire cause of action; it depends upon the facts of a particular case. However, one of the principal tests of identity of causes is said to be the identity of essential facts; if the same evidence will support both actions there is deemed to be but one cause of action. There would be no identity of causes if some of the evidence is the same in both action but the subject-matter is essentially different. Whether the case falls within or out of the rule against CIMA no. 08/2018 Page 15 of 44 splitting, depends upon whether wrong for which redress is beseeched is same in both actions and not upon whether different grounds of relief for the same wrong are set forth. Thus, even where plaintiff is entitled to several forms and kinds of relief there may be only one cause of action. The rule, however, does not require that distinct causes of actions, each of which would authorise independent relief be presented in a single suit.
20. In order that a plea of a bar under Order II Rule 2 (3) CPC should succeed, defendant, who raises plea, must make out
(l) that second suit was in respect of the same cause of action as that on which previous suit was based; (2) that in respect of that cause of action plaintiff was entitled to more than one relief and (3) that being thus entitled to more than one relief plaintiff, without leave obtained from the Court, omitted to sue for the relief for which the second suit had been filed. Unless there is identity between cause of action on which earlier suit was filed and that on which claim in later suit is based there would be no scope for application of the bar.
21. A Bench of this Court in a case titled Deepak Jain v. Jain Nagar Welfare Society reported in 2008(1) JKJ HC 305, while discussing the impact of the provisions of Order II Rule 1 has held that the provisions would have no application to the cases where plaintiff bases his suit on separate and distinct cause of action and chooses to relinquish one or the other of them. In such cases, it is CIMA no. 08/2018 Page 16 of 44 always open to plaintiff to file fresh suit on the basis of a distinct cause of action, which he may have so relinquished. It was also held that it does not require that when a transaction or right gives rise to several causes of action, they shall all be combined in one suit. The principle underlying the provisions of Order II Rule 2 of the Code is that the plaintiff is not allowed to split relief arising out of the same cause of action by filing separate suits. No one should be vexed twice by splitting the claim and splitting the remedies. However, it is not envisaged that a suit should include also the reliefs in the first instance in respect of cause of action, which arises subsequent to the filing of the suit, giving foundation for new proceedings. If subsequent cause of action gives rise to new reliefs or for additional reliefs, which he can claim, the filing of subsequent proceedings in respect of subsequent cause of action claiming similar reliefs, along with additional reliefs or on additional grounds is not barred. When two suits are based on different causes of action, bar under Order II Rule 2 CPC would not apply. Regard being had to Birla Cement Works v. State of Rajasthan, AIR 2000 Raj 251 (DB); Ramesh Bhalotia v. Lalit Kumar Bhalotia, AIR 2001 Pat 174; and Sham Lal v. Mathi, AIR 2002 HP 66.
22. Filing of second suit, it has been held by the Supreme Court in Civil Appeal no.3777 of 2018 (arising out of SLP (C) no.13256 of 2014) titled Sucha Singh Sodhi (D) Thr. LRs v. Baldev Raj Walia & anr, (judgment dated 13th April 2018) CIMA no. 08/2018 Page 17 of 44 is not hit by Order II Rule 2 of the Code of Civil Procedure and is maintainable for being tried on merits. In the said case as well, stand taken before the Supreme Court was that relief that plaintiff claimed in second suit was available to him for being claimed in previous suit on the causes of action pleaded in previous suit against defendant. The Supreme Court held that cause of action to claim a relief of permanent injunction and the cause of action to claim a relief of specific performance of agreement, are independent and one cannot include the other and vice versa, in the following words:
"27. In our opinion, the sine qua non for invoking Order 2 Rule 2(2) against the plaintiff by the defendant is that the relief which the plaintiff has claimed in the second suit was also available to the plaintiff for being claimed in the previous suit on the causes of action pleaded in the previous suit against the defendant and yet not claimed by the plaintiff.
28. Therefore, we have to examine the question as to whether the plaintiff was entitled to claim a relief of specific performance of agreement in the previous suit on the basis of cause of action pleaded by the plaintiff in the previous suit against the respondents/ defendants in relation to suit property.
29. In other words, the question that arises for consideration is whether Sucha Singh (original plaintiff) could claim the relief of specific performance of agreement against the respondents/ defendants in addition to his claim of permanent injunction in the previously instituted suit?
30. Our answer to the aforementioned question is in favour of the plaintiffs (appellants) and against the defendants (respondents). In other words, our answer to the aforementioned question is that the plaintiff could not claim the relief of specific performance of agreement against the defendants along with the relief of permanent injunction in the previous suit for the following reasons.
31. First, the cause of action to claim a relief of permanent injunction and the cause of action to claim a relief of specific performance of agreement are independent and one cannot include the other and vice versa.CIMA no. 08/2018 Page 18 of 44
32. In other words, a plaintiff cannot claim a relief of specific performance of agreement against the defendant on a cause of action on which he has claimed a relief of permanent injunction.
33. Second, the cause of action to claim temporary/permanent injunction against the defendants from interfering in plaintiff's possession over the suit premises accrues when defendant No.1 threatens the plaintiff to dispossess him from the suit premises or otherwise cause injury to the plaintiff in relation to the suit premises. It is governed by Order 39 Rule 1 (c) of the Code which deals with the grant of injunction. The limitation to file such suit is three years from the date of obstruction caused by the defendant to the plaintiff (See - Part VII Articles 85, 86 and 87 of the Limitation Act).
34. On the other hand, the cause of action to file a suit for claiming specific performance of agreement arises from the date fixed for the performance or when no such date is fixed, when the plaintiff has noticed that performance is refused by the defendant.... xxxxx xxx
36. This Court in Rathnavathi & Another vs. Kavita Ganashamdas (2015 (5) SCC 223) had the occasion to examine this very question on somewhat similar facts in detail. This Court after taking into account the earlier decisions of this Court which dealt with this question held in Paras 22 to 31 that bar contained in Order 2 Rule 2 of the Code on such facts is not attracted against the plaintiff so as to disentitle him from filing the subsequent suit to claim specific performance of agreement against the defendants in relation to the suit property.
37. We apply the law laid down in the case of Rathnavathi (supra) and hold that the suit filed by the original plaintiff for specific performance of agreement against the respondents (defendants) is not barred by Order 2 Rule 2 of the Code and is held maintainable for being tried on merits.
38. This takes us to examine another question as to whether in the absence of any permission/liberty granted by the Trial Court to the plaintiff at the time of withdrawing the previous suit filed for permanent injunction, the plaintiff was entitled to file the suit for specific performance of agreement against the defendants in relation to the suit property?
39. In our considered opinion, this question does not now survive for consideration in the light of what we have held above. In any event, keeping in view the law laid down by this Court in Gurinderpal vs. Jagmittar Singh (2004) 11 SCC 219, the question is answered against the respondents.
40. In somewhat similar facts, the question arose before this Court in Gurinderpal's case (supra), namely, if the order granting CIMA no. 08/2018 Page 19 of 44 permission to withdraw the suit under Order 23 Rule 1(3) of the Code does not specifically mention the fact of granting liberty to the plaintiff to file a fresh suit, whether filing of fresh suit would be hit by Order 2 Rule 2 of the Code?
41. This Court (three Judge Bench), speaking through Justice R.C. Lahoti (as His Lordship then was), held that filing of the second suit is not hit by Order 2 Rule 2 of the Code and is maintainable for being tried on merits......
xxxxx xxxx
43. In our considered opinion, reading of the statement of the original plaintiff (Sucha Singh) coupled with the permission granted by the Court to withdraw the suit satisfies the requirement of Order
23 Rule 1 (3) of the Code. It certainly enabled the plaintiff to file a fresh suit, namely, the civil suit for claiming specific performance of the agreement against the defendants. In our view, the Court was entitled to take into consideration the statement made by the original plaintiff (Sucha Singh) for withdrawing the suit and filing it afresh and his statement could be made a part of the order for granting permission to withdraw the civil suit and file a fresh suit as was held in the case of Gurinderpal (supra).
44. In our view, therefore, this submission urged by the learned counsel for the respondents has no merit.
45. Learned counsel for respondent No.2 (defendant No.2) then addressed the Court on the merits of the suit. We are afraid, we cannot go into any question relating to the merits of the controversy involved in the suit. It is for the Trial Court to now proceed to try the suit on merits and decide the suit in accordance with law.
46. In view of the foregoing discussion, we cannot concur with the reasoning and the conclusion arrived at by the Trial Court and the High Court which wrongly allowed the application filed by respondent No.2 (defendant No.2) under Order 7 Rule 11 of the Code and, in consequence, dismissed the appellants' (plaintiffs') suit as being barred by the provisions of Order 2 Rule 2 of the Code."
23. The Supreme Court in above Sucha Singh Sodhi (D) Thr.
LRs v. Baldev Raj Walia & anr, also held that "we cannot go into any question relating to the merits of the controversy involved in the suit. It is for the Trial Court to now proceed to try the suit on merits and decide the suit in accordance with law". Be that as it may, appeal on hand lacks in merit.
CIMA no. 08/2018 Page 20 of 4424. In subsequence of above discussion, let us have a glance of Companies Act, 2013 and provisions contained therein. The Companies Act 2013 is an Act of the Parliament of India on Indian Company Law, which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company. The Act of 2013 is divided into 29 chapters containing 470 sections as against 658 Sections in the Companies Act, 1956 and has 07 Schedules. The Act has replaced The Companies Act, 1956, in a partial manner, after receiving the assent of the President of India on 29th August 2013. The Act came into force on 12th September 2013 with few changes like earlier private companies maximum number of member was 50 and now it will be 200. A new term of "one-person company"
is included in this Act that will be a private company and with only 98 provisions of the Act notified. A total of another 184 sections came into force from 1st April 2014.
25. Section 3 of Act of 2013 provides that that a company may be formed for any lawful purpose by: seven or more persons, where company to be formed is to be a public company; two or more persons, where company to be formed is to be a private company; or one person, where company to be formed is to be One Person Company that is to say, a private company, by subscribing their names or his name to a memorandum and complying with the requirements of this Act in respect of registration. However, memorandum of One Person Company shall indicate name of other CIMA no. 08/2018 Page 21 of 44 person, with his prior written consent in prescribed form, who shall, in the event of subscriber's death or his incapacity to contract become member of company and written consent of such person shall also be filed with Registrar at the time of incorporation of One Person Company along with its memorandum and articles. Provided further that such other person may withdraw his consent in such manner as may be prescribed: Provided also that the member of One Person Company may at any time change the name of such other person by giving notice in such manner as may be prescribed: Provided also that it shall be the duty of the member of One Person Company to intimate the company the change, if any, in the name of the other person nominated by him by indicating in the memorandum or otherwise within such time and in such manner as may be prescribed, and the company shall intimate the Registrar any such change within such time and in such manner as may be prescribed: Provided also that any such change in the name of the person shall not be deemed to be an alteration of the memorandum. A company formed under sub-section may be either a company limited by shares or a company limited by guarantee or an unlimited company.
26. Section 58 of Act of 2013 envisages that if a private company limited by shares refuses, whether in pursuance of any power of company under its articles or otherwise, to register transfer of, or transmission by operation of law of CIMA no. 08/2018 Page 22 of 44 right to, any securities or interest of a member in the company, it shall within a period of thirty days from date on which instrument of transfer, or intimation of such transmission, as the case may be, was delivered to company, send notice of refusal to transferor and transferee or to person giving intimation of such transmission, as the case may be, giving reasons for such refusal. Subsection (2) of Section 58 envisions that without prejudice to subsection (1) of Section 58, securities or other interest of any member in a public company shall be freely transferable; provided that any contract or arrangement between two or more persons in respect of transfer of securities shall be enforceable as a contract. Subsection (3) of Section 58 provides that transferee may appeal to Tribunal against refusal within a period of thirty days from the date of receipt of notice or in case no notice has been sent by company, within a period of sixty days from the date on which instrument of transfer or intimation of transmission, as the case may be, was delivered to company. Subsection (4) of Section 58 says that if a public company without sufficient cause refuses to register transfer of securities within a period of thirty days from the date on which instrument of transfer or intimation of transmission, as the case may be, is delivered to company, transferee may, within a period of sixty days of such refusal or where no intimation has been received from company, within ninety days of delivery of instrument of transfer or intimation of CIMA no. 08/2018 Page 23 of 44 transmission, appeal to the Tribunal. Subsection (5) of Section 58 provides that the Tribunal, while dealing with an appeal made under subsection (3) or subsection (4) of Section 58 of Act of 2013, may, after hearing parties, either dismiss the appeal, or by order either direct that transfer or transmission shall be registered by company and the company shall comply with such order within a period of ten days of receipt of order; or direct rectification of register and also direct company to pay damages, if any, sustained by any party aggrieved. Subsection (6) of Section 58 says that if a person contravenes order of Tribunal, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.
27. Section 59 of Act of 2013 provides that if name of any person is, without sufficient cause, entered in register of members of a company, or after having been entered in register, is, without sufficient cause, omitted therefrom, or if a default is made, or unnecessary delay takes place in entering in register, fact of any person having become or ceased to be a member, person aggrieved, or any member of the company, or company may appeal in such form as may be prescribed, to Tribunal, or to a competent court outside India, specified by Central Government by notification, in respect of foreign members or debenture holders residing outside India, for rectification of the CIMA no. 08/2018 Page 24 of 44 register. Subsection (2) of Section 59 envisages that the Tribunal may, after hearing parties to appeal under subsection (1) of Section 59 of Act of 2013 by order, either dismiss appeal or direct that transfer or transmission shall be registered by company within a period of ten days of receipt of order or direct rectification of records of depository or register and in latter case, direct company to pay damages, if any, sustained by party aggrieved.
Subsection (3) of Section 59 of Act of 2013 envisions that provisions of Section 59 shall not restrict right of a holder of securities, to transfer such securities and any person acquiring such securities shall be entitled to voting rights unless voting rights have been suspended by an order of the Tribunal. Subsection (4) of Section 59 of Act of 2013 provides that where transfer of securities is in contravention of any of the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992) or Act of 2013 or any other law for the time being in force, the Tribunal may, on an application made by depository, company, depository participant, holder of securities or Securities and Exchange Board, direct any company or a depository to set right the contravention and rectify its register or records concerned. Subsection (5) of Section 59 of Act of 2015 instructs that if any default is made in complying with the order of the Tribunal under section 59, company shall be punishable with fine which CIMA no. 08/2018 Page 25 of 44 shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees, or with both.
28. Section 61 of Act of 2013 stipulates that a limited company having a share capital may, if so authorised by its articles, alter its memorandum in its general meeting to: increase its authorised share capital by such amount as it thinks expedient; consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares, provided that no consolidation and division which results in changes in the voting percentage of shareholders shall take effect unless it is approved by the Tribunal on an application made in the prescribed manner; (c) convert all or any of its fully paid-up shares into stock, and reconvert that stock into fully paid-up shares of any denomination;
(d) sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum, so, however, that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; (e) cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by CIMA no. 08/2018 Page 26 of 44 the amount of the shares so cancelled. Subsection (2) of Section 61 of Act of 2013 says that cancellation of shares under sub-section (1) shall not be deemed to be a reduction of share capital.
29. Section 66 of Act of 2013 says that subject to confirmation by the Tribunal on an application by the company, a company limited by shares or limited by guarantee and having a share capital may, by a special resolution, reduce the share capital in any manner and in particular, may:
extinguish or reduce the liability on any of its shares in respect of the share capital not paid up; or either with or without extinguishing or reducing liability on any of its shares, (i) cancel any paid-up share capital which is lost or is unrepresented by available assets; or (ii) pay off any paid-up share capital which is in excess of the wants of the company, alter its memorandum by reducing the amount of its share capital and of its shares accordingly, provided that no such reduction shall be made if the company is in arrears in the repayment of any deposits accepted by it, either before or after the commencement of this Act, or the interest payable thereon. Subsection (2) of Section 66 of Act of 2013 envisages that the Tribunal shall give notice of every application made to it under subsection (1) of Section 66 of Act of 2013 to the Central Government, Registrar and to the Securities and Exchange Board, in the case of listed companies, and the creditors of the company and shall take into consideration the representations, if any, made to it by CIMA no. 08/2018 Page 27 of 44 that Government, Registrar, the Securities and Exchange Board and creditors within a period of three months from the date of receipt of notice, provided that where no representation has been received from Central Government, Registrar, Securities and Exchange Board or creditors within said period, it shall be presumed that they have no objection to reduction. Subsection (3) of Section 66 says that the Tribunal may, if it is satisfied that the debt or claim of every creditor of company has been discharged or determined or has been secured or his consent is obtained, make an order confirming the reduction of share capital on such terms and conditions as it deems fit:
Provided that no application for reduction of share capital shall be sanctioned by the Tribunal unless the accounting treatment, proposed by the company for such reduction is in conformity with the accounting standards specified in section 133 or any other provision of this Act and a certificate to that effect by the company's auditor has been filed with the Tribunal. Subsection (4) of Section 66 of Act of 2013 says that order of confirmation of the reduction of share capital by the Tribunal under subsection (3) of Section 66 of Act of 2013 shall be published by the company in such manner as the Tribunal may direct. Subsection (5) of Section 66 provides that The company shall deliver a certified copy of the order of the Tribunal under sub-section (3) and of a minute approved by the Tribunal showing: (a) the amount of share capital; (b) the number of shares into CIMA no. 08/2018 Page 28 of 44 which it is to be divided; (c) the amount of each share; and
(d) the amount, if any, at the date of registration deemed to be paid-up on each share, to the Registrar within thirty days of the receipt of the copy of the order, who shall register the same and issue a certificate to that effect.
Subsection (6) of Section 66 provides that nothing in Section 66 shall apply to buy-back of its own securities by a company under section 68 of Act of 2013. Subsection (7) of Section 66 of Act of 2013 envisages that a member of the company, past or present, shall not be liable to any call or contribution in respect of any share held by him exceeding the amount of difference, if any, between the amount paid on the share, or reduced amount, if any, which is to be deemed to have been paid thereon, as the case may be, and amount of share as fixed by order of reduction. Subsection (8) of Section 66 stipulates that where name of any creditor entitled to object to the reduction of share capital under this section is, by reason of his ignorance of the proceedings for reduction or of their nature and effect with respect to his debt or claim, not entered on the list of creditors, and after such reduction, the company is unable, within the meaning of subsection (2) of section 271, to pay the amount of his debt or claim: (a) every person, who was a member of the company on the date of the registration of the order for reduction by the Registrar, shall be liable to contribute to the payment of that debt or claim, an amount not exceeding the amount which he would have been liable to contribute CIMA no. 08/2018 Page 29 of 44 if the company had commenced winding up on the day immediately before the said date; and (b) if the company is wound up, the Tribunal may, on the application of any such creditor and proof of his ignorance as aforesaid, if it thinks fit, settle a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up. Subsection (9) of Section 66 envisions that nothing in subsection (8) of Section 66 of Act of 2013 shall affect the rights of the contributories among themselves. Subsection (10) of Section 66 of Act of 2013 provides that if any officer of the company (a) knowingly conceals name of any creditor entitled to object to reduction; (b) knowingly misrepresents the nature or amount of the debt or claim of any creditor; or (c) abets or is privy to any such concealment or misrepresentation as aforesaid, he shall be liable under Section 447 of Act of 2013.
30. Section 74 of Act of 2013 stipulates that where in respect of any deposit accepted by a company before the commencement of this Act, amount of such deposit or part thereof or any interest due thereon remains unpaid on such commencement or becomes due at any time thereafter, the company shall: (a) file, within a period of three months from such commencement or from the date on which such payments, are due, with the Registrar a statement of all the deposits accepted by the company and sums remaining unpaid on such amount with the interest payable thereon CIMA no. 08/2018 Page 30 of 44 along with the arrangements made for such repayment, notwithstanding anything contained in any other law for the time being in force or under the terms and conditions subject to which the deposit was accepted or any scheme framed under any law; and (b) repay within one year from such commencement or from the date on which such payments are due, whichever is earlier. Subsection (2) of Section 74 of Act of 2013 provides that the Tribunal may on an application made by the company, after considering the financial condition of the company, the amount of deposit or part thereof and the interest payable thereon and such other matters, allow further time as considered reasonable to the company to repay the deposit. Subsection (3) of Section 74 envisages that if a company fails to repay the deposit or part thereof or any interest thereon within the time specified in Subsection (1) of Section 74 or such further time as may be allowed by the Tribunal under Subsection (2) of Section 74, company shall, in addition to payment of amount of deposit or part thereof and interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees and every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both.
CIMA no. 08/2018 Page 31 of 4431. Section 130 is worth to be seen as it says that a company shall not reopen its books of account and not recast its financial statements, unless an application in this regard is made by Central Government, Income Tax Authorities, Securities and Exchange Board, any other statutory regulatory body or authority or any person concerned and an order is made by a Court or Tribunal to the effect that:
(i) the relevant earlier accounts were prepared in a fraudulent manner; or (ii) the affairs of the company were mismanaged during the relevant period, casting a doubt on the reliability of financial statements, provided that the court or Tribunal, as the case may be, shall give notice to Central Government, Income Tax Authorities, Securities and Exchange Board or any other statutory regulatory body or authority concerned and shall take into consideration representations, if any, made by that Government or authorities, Securities and Exchange Board or body or authority concerned before passing any order under this section.
32. Section 131 of Act of 2013 provides that if it appears to directors of a company that financial statement of company or report of the Board, do not comply with provisions of Section 129 or Section 134 of Act of 2013, they may prepare revised financial statement or a revised report qua any of three preceding financial years after obtaining approval of the Tribunal on an application made by company in such form and manner as may be prescribed and a copy of the CIMA no. 08/2018 Page 32 of 44 order passed by the Tribunal shall be filed with the Registrar, provided that Tribunal shall give notice to Central Government and Income Tax Authorities and shall take into consideration the representations, if any, made by that Government or authorities before passing any order under this section, provided further that such revised financial statement or report shall not be prepared or filed more than once in a financial year, provided also that the detailed reasons for revision of such financial statement or report shall also be disclosed in the Board's report in the relevant financial year in which such revision is being made. Subsection (2) of Section 131 says that where copies of previous financial statement or report have been sent out to members or delivered to the Registrar or laid before the company in general meeting, the revisions must be confined to: (a) the correction in respect of which the previous financial statement or report do not comply with the provisions of Section 129 or Section 134 of Act of 2013 and (b) the making of any necessary consequential alternation. Subsection (3) of Section 131 of Act of 2013 says that the Central Government may make rules as to the application of the provisions of this Act in relation to revised financial statement or a revised director's report and such rules may, in particular: (a) make different provisions according to which the previous financial statement or report are replaced or are supplemented by a document indicating the corrections to be made; (b) make CIMA no. 08/2018 Page 33 of 44 provisions with respect to the functions of the company's auditor in relation to the revised financial statement or report; (c) require the directors to take such steps as may be prescribed.
33. Section 164 of Act of 2013 is again germane to be peeped. It provides that a person shall not be eligible for appointment as a director of a company, if he is of unsound mind and stands so declared by a competent court or if he is an undischarged insolvent or if he has applied to be adjudicated as an insolvent and his application is pending or if he has been convicted by a court of any offence, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence, provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be appointed as a director in any company; or if an order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force or if he has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call or if he has been convicted of the offence dealing with related party transactions under section 188 at any time during last preceding five years or if he has not complied CIMA no. 08/2018 Page 34 of 44 with Subsection (3) of Section 152. Subsection (2) provides that no person who is or has been a director of a company which has not filed financial statements or annual returns for any continuous period of three financial years; or has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more.
34. Section 430 of Act of 2013 says that no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal.
35. Qua applicability of provisions of Companies Act, 2013, it is well settled law that a serious question of fraud and collusion cannot be decided by the Tribunal in a summary proceeding. Given the relief solicited for by respondent no.1 in the Suit for Declaration, Partition and Injunction, the Tribunal has no power to decide the title of the shares in summary proceedings. Section 58 of the Companies Act, provides that rectification of register of members has to be decided by Tribunal and as per Section 430, the Civil Court CIMA no. 08/2018 Page 35 of 44 has no jurisdiction. At the same time, it is also a trite law that Tribunal has a power only to decide the issue of rectification of register of members and has no power to decide the issue of title. It is apt to mention here that as per Section 111A of the Companies Act, 1956, the Company Law Board was empowered to decide the issue of title also. The word 'title' has not been included in Section 58 of the Companies Act, 2013. Even while considering Section 111A, it was held by the Supreme Court that a seriously disputed question of title cannot be decided by the Company Court or Company Law Board. This conclusion was arrived at by the Supreme Court by taking into consideration jurisdiction of the Company Law Board being summary in nature. The procedure in National Company Law Tribunal constituted under the Companies Act, 2013, is also summary in nature.
36. From the provisions of Companies Act, 2013 and 1956, it is clear that Tribunal, or Board as the case may be, can decide only rectification of register concerning shares and connected incidental issues and matters therewith and not disputed questions of title. In the present case, a bare perusal of averments in the plaint as well as the relief sought for by respondent no.1 shows that to decide the issue raised by him vis-à-vis share(s)/title of the property in question is a disputed question of title, which can be decided by the Civil Court and the Tribunal/Company Law Board has no power to adjudicate the said issue. The CIMA no. 08/2018 Page 36 of 44 Supreme Court in Ammonia Supplies Corporation (PT) Limited v. Modern Plastic Containers (P) Ltd, 1998 (7) SCC 105, the scope of jurisdiction of the Company Court to deal with an issue of rectification in the Register of Members maintained by the Company was considered. Following Public Passenger Service Limited v. M.A. Khadar, AIR 1966 SC 489, it was held that jurisdiction under Companies Act, was summary in nature. If for reasons of complexity or otherwise, the matter could be more conveniently decided in a suit. In Standard Chartered Bank v. Andhra Bank Financial Services Limited, 2006 (6) SCC 94, it was observed that jurisdiction of Tribunal being summary in nature, a seriously disputed question of title could be left to be decided by the civil court as same being more appropriate remedy for investigation and adjudication of such seriously disputed question of title. In Luxmi Tea Company Limited v. Pradip Kumar Sarkar, 1989 Supp. (2) SCC 656, it was observed that a company did not have any discretion in rectifying its register except to require the procedure being followed.
37. Seriously disputed question of title, the Supreme Court has held, cannot be decided by the Company Law Board inasmuch as the proceeding before Tribunal constituted under Companies Act 2013 is summary in nature and seriously disputed questions cannot be decided by Tribunal. Even if the proceeding is initiated in Tribunal, the seriously disputed questions have to be relegated to the CIMA no. 08/2018 Page 37 of 44 Civil Court. If the question arises for the title of a person, in whose favour the shares are to be transferred, adjudication power may not be available to the Tribunal to exercise power under Section 58 of the Act of 2013. [See: Jai Mahal Hotels Private Limited v. Devraj Singh and others, 2016 (1) SCC 423; Union of India v. R. Gandhi, the President, Madras Bar Association, 2010 (6) SCR 857; and K. Ravinder Reddy v. Alliance Business School and others, (2016) 198 CompCas 481 (Kar)]. Insofar as judgements cited and relied upon by learned counsel for petitioner are concerned, the same are distinct and distinguish from the facts and circumstances of the present case.
38. Notwithstanding what has been discoursed and observed herein above, it would not be appropriate in the present case, at this stage, to say, observe or opine that there is a real question of dispute between parties because such issue can very well be discussed in verbose, adjudicated upon and determined before and by court below and for that matter court below is to/can frame/settle issue(s) as to whether it has jurisdiction or not to decide disputed question(s) of title etcetera, as raised by parties before it. Not only this, petitioner has also right to bring and move appropriate motion(s) before court below under Order VII Rule 11 CPC, or for that matter under and in terms of any other provisions of law relating to or governing the subject- matter of field, seeking dismissal or rejection of plaint and/or raise Preliminary Objections/Issue qua CIMA no. 08/2018 Page 38 of 44 maintainability of Suit or with respect to jurisdiction of court below in its Written Statement. In such circumstances, appeal on hand sans merit.
39. It is settled legal position that granting or refusing temporary injunction rests on the sound exercise of discretion of the Courts, and such exercise of discretion cannot be lightly interfered with by the appellate Court unless it is shown that such exercise of discretion is unreasonable or capricious. The area of interference of discretionary orders passed by the Courts below in exercise of the discretion vested in them, by the appellate Court in appeal against such orders is, although, not so much restricted as in the case of a revision still it is not as wide as the normal and ordinary appellate powers of an appellate Court in dealing the appeals, the power is indeed very much restricted in its scope. Not only this, it is trite law that the Court should consider whether prima facie case has been made out by plaintiff which needs adjudication at the trial and prima facie case should not be confused with prima facie title. While considering the question of prima facie case, it is not to be confused with prima facie title. What is required that plaintiff has to show that he has bona fide raised a substantial question, which needs to be adjudicated at the trial of the suit. The plaintiff is, thus, required to prima facie establish that in the event of non-interference by the Court, it will result in irreparable injury and substantial loss. While considering CIMA no. 08/2018 Page 39 of 44 irreparable injury, comparatively which of the parties would be put to more or substantial mischief in the event of refusal to grant a temporary injunction and if the Court considers that the subject-matter or the suit must be maintained status quo, then discretion must be exercised in favour of the party seeking temporary injunction so that the subject matter of the suit in dispute can be preserved by directing to the party to maintain status quo. Reference in this regard is made to Gopal Laxmandas Lakhani v. Krishnaben Girdharilal Lalvani, AIR 2002 Guj 398; Sukkha Singh v. Mahal Singh, AIR 2003 Raj 21.
40. Order XXXIX Rule 1 of the Code of Civil Procedure relates to cases in which temporary injunction may be granted. It envisages that where in any suit it is proved by affidavit or otherwise that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or that the defendant threatens or intends to remove or dispose of his property with a view to defrauding his creditors, 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 dispossession 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 disposal of suit or until further orders, the court may pass temporary injunction. It also provides CIMA no. 08/2018 Page 40 of 44 where in any suit it is proved by affidavit or otherwise that defendant threatens to dispossess plaintiff or otherwise causes injury to plaintiff in relation to any property in dispute in the suit, the court may grant such temporary injunction to save the Lis. The grant of ad interim injunction is in aid and auxiliary to the main relief that may be granted to a litigant in a Lis. A Bench in Latief Ahmad Bhat & anr. v. Syed Hussain & ors. 2012 (4) JKJ 809 [HC] has held that discretionary orders cannot be interfered with unless the orders are bad in law. The Court observed that Trial Court after considering all factors has held that whether the property is commercial or otherwise is a question to be gone through during trial and Trial Court had after presuming the availability of prima facie case, balance of convenience and irreparable loss with the plaintiff, passed a discretionary order which are and cannot be interfered with unless the orders on the face of it are illegal and findings recorded are perverse.
41. Appellate Court will not reassess the material and seek to reach a conclusion different from one reached by the court below while passing interlocutory injunctions. While saying so, the Supreme Court in Wander Ltd and another v. Antox India P. Ltd 1990 (Supp.) SCC 727 held:
"The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the Appellate Court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory CIMA no. 08/2018 Page 41 of 44 injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material."
42. An appeal against exercise of discretionary jurisdiction is really an appeal in principle and that is why, unlike a regular appeal, in ordinary sense, where whole evidence on record is examined anew by appellate court, what is really examined, in an appeal against exercise of discretionary jurisdiction, is legality and validity of the order and it can be set aside and should be set aside only when there is a patent error on the face of the record or the order is against established or settled principles of law. If two views are possible and a view, which is reasonable and logical, has been adopted by Trial Court, the other view, howsoever appealing, would not be allowed to be substituted in place of the Trial Court's views, which are, otherwise, reasonable and logical. [See: Radhabari Tea Company (P) Ltd. v. Mridul Kumar Bhattacharjee and others, 2010(1) GLT 189].
43. Injunction is a discretionary relief pending adjudication of the suit. Discretion has to be exercised on sound principles keeping in mind golden principles governing grant of injunction. Appeal against exercise of discretion is an appeal on principle. Appellate Court would normally not interfere with exercise of discretion if conclusion reached by Trial Court is reasonably possible based on materials on CIMA no. 08/2018 Page 42 of 44 record. [Vide: Sharmila Vijay Shetty v. Hemendra Prasad Barooah and others, (2016) 3 GLR 50].
44. The Court's interference is also necessary to protect plaintiff from species of irreparable injury before he can establish his title before Trial Court. A bare look at Order XXXIX Rule 1 CPC makes it clear that purpose and object of provision is to preserve subject matter of the suit, so that parties, claiming their rights over subject matter, have an opportunity to substantiate their respective stand and the party, at the end of trial found entitled to relief, is in a position to reap fruits of litigation. In case suit property is allowed to be wasted, damaged or alienated the trial itself shall become infructuous and purposeless. Nature of controversy, nature of suit and particular rights asserted by parties, which give rise to be triable Issue, require to be determined/adjudicated upon, on the basis of evidence in main suit. Once status of parties is in issue in a regularly instituted suit, due course of law had to be applied for determination of nature of parties' possession over property in question. [See: Tsering Narboo v. Tashi Phonchok 2009 (1) JKJ 467 (J&K); Anant Ram v. Isher Das 2010 (4) JKJ 602 (J&K); Mst Ashmi v. Ghulam Hassan Mir, 2003 (Supp) JKJ 267 (J&K); Khurshid Ahmed Bhat v. Haji Bashir Ahmed Bhat, 2009 Supp. JKJ 314 (J&K)].
45. From above it is deducible that meaning of 'status quo' is that the court is not adjudicating rights of parties finally. By passing the order of status quo, the civil court only gives CIMA no. 08/2018 Page 43 of 44 direction to parties in terms of the order passed by said court, without giving any finding on any of the issues in respect of which order of status-quo was passed and legal commutation of the word 'status quo', it implies existence state of things at the said given point of time. The Trial Court has taken into account all above aspects of matter while passing order of status quo. Having said so, impugned order, passed by court below in the present case, need not be interfered with because interference, at this stage, will disturb the whole Lis.
46. For the reasons set out herein above, the appeal on hand is devoid of any merit and is accordingly, dismissed. However, dismissal of the instant appeal would not preclude appellant from approaching court below to urge and exhort all what has been projected in the appeal on hand vis-à-vis order dated 14th March 2018 as also with regard to concluding paragraph thereof.
(Tashi Rabstan) Judge Srinagar 18th April 2018 Ajaz Ahmad CIMA no. 08/2018 Page 44 of 44