Dipak Kumar Himatsingka & Ors vs Rakesh Himatsingka & Ors on 19 April, 2011

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Calcutta High Court

Dipak Kumar Himatsingka & Ors vs Rakesh Himatsingka & Ors on 19 April, 2011

Bench: Bhaskar Bhattacharya

                                          1


                       IN THE HIGH COURT AT CALCUTTA
                           Civil Appellate Jurisdiction
                                  (Original Side)

Present:
The Hon'ble Mr. Justice Bhaskar Bhattacharya
                  And
The Hon'ble Mr. Justice Sambuddha Chakrabarti


                             A.P.O.T. No.486 of 2010
                               C.S. No.450 of 1998


                        Dipak Kumar Himatsingka & Ors.
                                       Versus
                           Rakesh Himatsingka & Ors.



For the Appellant:                    Mr. Abhrajit Mitra,
                                      Mrs.Jayshree Kajania.


For the Respondent Nos.1 to 5:        Mr. Ranjan Deb.


For the Respondent No.18:             Mr. Surajit Nath Mitra,
                                      Mr. Dipak Jain.


Heard on: 22.02.11

Judgment on: 19th April, 2011.

Bhaskar Bhattacharya, J.:

This appeal under Clause 15 of the Letters Patent is at the instance of the plaintiffs and is directed against order dated 10th August, 2010 passed by a learned Single Judge of this Court by which His Lordship dismissed an application filed by the appellants containing the following reliefs: 2

"a) A Receiver/Special Officer be appointed over and in respect of the said premises more fully described in annexure "I" and be directed to do the following:-

i) Forthwith make inventory of the said premises more fully described in annexure "I" above and submit a report as to the nature, character and user of the said premises;

ii) Take actual physical possession of the entirety of the said premises and retain possession thereof until disposal of the suit;

iii) Realise all moneys due and/or owing by way of transfer/development of the said premises;

b) Injunction restraining the respondents, their men, agents, servants, sub-ordinates and/or agents from dealing with, disposing of, transferring and/or in any manner creating any third party interest or changing the nature and character of the said premises more fully described in annexure "I" in any manner whatsoever;

c) The respondents be directed to render true and faithful accounts of all money received by and/or in the name of the respondent No.18, or otherwise through the development/sale of the said premises more fully described in annexure "I" and direction upon the concerned respondents to deposit all such money received by them in this Hon'ble Court with the Receiver/Special Officer as may by directed by the Hon'ble Court;

      d)     Ad-interim order in terms of prayers above;

      e)     Such further and/or other order or orders be passed and/or direction

or directions be given as to this Hon'ble Court may deem fit and proper."

Being dissatisfied, the plaintiffs have come up with the present appeal. The appellants before us filed in the Original Side of this Court a suit being C.S. No.450 of 1998 thereby praying for the following reliefs:

"(a) Declaration that all the assets and properties mentioned in Annexure "F" hereto are joint properties of the plaintiffs and the defendant Nos.1 to 5;

(b) Decree for adjudication and determination of shares of the plaintiffs and the defendants No.1 to 5 in the said joint family properties and allotment accordingly;

(c) Declaration that the businesses of the defendants Nos.6 to 39 and 54 to 59 are the business of the Joint Hindu Family and all the assets and properties of the said defendants are that of the said Joint Hindu Family;

(d) Declaration that the shares held by defendant Nos.1 to 39 and 54 to 59 in the defendant Nos.6 to 39 and 54 to 59 are the assets of the 4 Himatsingka Joint Hindu family of which Late Bhagwati Prasad Himatsingka was the Karta;

(e) Partition of the properties set out in Annexure "F" hereto and such other properties as may be found by this Hon'ble Court liable to be partitioned by metes and bounds in such manner whatsoever as to this Hon'ble Court may deem fit and proper and allotment thereof to the respective parties in accordance with their shares in severalty;

(f) Discovery and enquiry and direction upon the defendants No.1 to 5 to disclose on oath all the dealings and transactions in respect of shares in the defendant Nos.6 to 39 and 54 to 59 on or after 9th April, 1997;

(g) Transfer of shares held by the defendant Nos.1 to 39 and 54 to 59 in the defendant Nos.6 to 39 and 54 to 59 on or after 9th April 1997, be declared illegal, null and void and the defendants be directed to deliver up all transfer deed so that the same may be adjudged void and be cancelled;

(h) Perpetual injunction restraining the defendants and each one of them from claiming any right, title or interest in the properties, immoveable and movable belonging to the Joint Hindu Family except all members of the said joint Hindu Family now disrupted in 5 accordance with their respective shares as this Hon'ble Court may deem fit and proper;

(i) Perpetual injunction restraining the defendants and each one of them from alienating or transferring any of the assets of the said Joint Hindu Family or any part thereof or removing any of the books, documents and/or any other papers of the said joint Hindu Family and its assets including books, records and documents of the defendant companies;

(j) Transfer of the shares of the plaintiff in M/s. Shree Cooperative Housing Society Ltd., be declared illegal, null and void and documents in this regard be cancelled;

(k) Declaration that the plaintiff No.1 & 4 are the owners of 2 (two) and 3 (three) shares respectively in M/s. Shree Cooperative Housing Society Limited as mentioned in paragraph 47(ix) hereinabove;

(l) Rectification of the Register of Members and other records of the defendant No.51 for the purpose of recording the plaintiff No.1 & 4 as members of the defendant No.51 having 2(two) and 3(three) shares respectively and for deleting the transfer of the said shares to the defendant Nos.1 & 3;

(m) The defendants be directed to deliver up all documents of transfer of shares in Shree Cooperative Housing Society Limited so that the 6 same may be adjudged void and may be cancelled and shares be returned to the plaintiffs;

(n) perpetual injunction restraining the defendant No.1 or any other defendant from surrendering or encumbering or in any manner dealing with the tenancy right in respect of room No.92, on the fourth floor of premises No.6, Old Post Office Street, Calcutta-

700001;

(o) A scheme be framed control and management of the public trusts referred to in paragraph 39 herein as per the respective shares of the parties herein so determined;

(p) Receiver;

(q) Injunction;

(r) Costs;

(s) Such further or other reliefs as the Honourable Court may deem fit and proper;"

The case made out by the appellants in the aforesaid suit may be summed up thus:

a) The plaintiffs and defendant Nos.1 to 5 are all Hindus governed by the Mitakshara School of Hindu Law. The plaintiffs and those 7 defendants are all descendants of one late Prabhu Dayal Himatsingka.

b) Prabhu Dayal Himatsingka was engaged in business activities along with his brothers. His family was originally settled in Dumka and had business in Dumka. Gradually, Himatsingka family of which Prabhu Dayal Himatsingka was a coparcener, started business of large scale in Assam and promoted Jorhat Electric Supply Limited, Assam Plywood Limited, Bharat Plastic Limited, Himatsingka Timber Limited, Himatsingka Mills Ltd., Himatsingka Motor Works Ltd., etc. The father and brother of Prabhu Dayal Himatsingka were in active management of the aforesaid family business.

c) In the year 1960, a partition took place amongst Prabhu Dayal Himatsingka and his brothers, and Prabhu Dayal Himatsingka received his share in the assets of the joint family and thereafter, Prabhu Dayal Himatsingka became the head of his branch and he continued the joint family of his branch as Karta.

d) In course of time, the Himatsingka family promoted various companies of which Prabhu Dayal Himatsingka was the Karta. The equity shares in the name of different members of Himatsingka family were acquired out of the dividends and salaries received from India Carbon Limited and joint family funds.

e) The affairs of those companies were controlled and managed by Bhagwati Prasad Himatsingka as the managing member and representative of the said joint family as nominated by Prabhu Dayal Himatsingka, the Karta of the said joint family.

f) During the lifetime of Prabhu Dayal Himatsingka, his son, namely, Gajanand Himatsingka along with his children through his second wife separated from the Joint Family and received their share in the assets and properties of the Joint Hindu Family. In the circumstances, in or about March, 1973 the Joint Hindu Family came to be comprised of the said Prabhu Dayal Himatsingka and his two grandsons, namely, Bhagwati Prasad Himatsingka and Anirudha Kumar Himatsingka and their respective branches.

g) All the manufacturing concerns and companies were kept under the control of and remained within the said Joint family of which Prabhu Dayal Himatsingka continued to be the Karta. Some trading companies/business were allotted to Gajanand Himatsingka and Mahendra Kumar Himatsingka on their separation from the said Joint Hindu Family.

h) The shares of the family companies were held by the said joint family in the names of such members of the family as was decided by Prabhu Dayal Himatsingka in consultation with Bhagwati Prasad Himatsingka and the funds of the same came from the common pool. 9

The managing brain of all the aforesaid companies was Bhagwati Prasad Himatsingka and in the matter of policy, advice, as and when necessary, was taken from Prabhu Dayal Himatsingka. Bhagwati Prasad Himatsingka used to put those of his sons or relations in charge of the aforesaid companies as was decided by him from time to time. All the aforesaid companies were made under the control and centrally managed by Bhagwati Prasad Himatsingka. The central control office was located at 4th Floor, 6 Old Post Office Street, from where the affairs of the family companies were controlled by Bhagwati Prasad Himatsingka as guided by Prabhu Dayal Himatsingka during his lifetime.

i) The dividends received in the names of various members of the aforesaid family-companies and other companies were generally transferred to M/s. Bhagwati Prasad Mahendra Kumar, and on record, such transfers were shown as loan. The rate of interest for such ostensible loan was decided by Late Bhagwati Prasad Himatsingka in such manner as would be conducive to reduce the overall tax-burden of the family.

j) The share certificate of the aforesaid joint family companies issued in the name of various members of the family were all kept in one room known as "Depository" situated on the 3rd Floor of the Temple Chamber, at 6 Old Post Office Street, Calcutta-1 and one Hemanta 10 Kumar Chatterjee was put in charge of the said Depository by Bhagwati Prasad. M/s. D Basu & Co. was appointed as Auditor of as many of the family-companies as they could officially take up having regard to the number as imposed by the Institute of Chartered Accountants.

k) The offices of most of the joint family companies were located at the same place, i.e. the 4th Floor, Temple Chambers, 6 Old Post Office Street, Calcutta-1, which was taken on tenancy in the names of Bhagwati Prasad Himatsingka, Anirudha Kumar Himatsingka and upon whose death, the same was transferred in the name of his wife, Usha Himatsingka, and subsequent to her death, in the name of Rakesh Himatsingka, Himatsingka Timber Limited and India Carbon Limited.

l) The directors of all the family-companies are substantially common and all the family members have executed powers of attorney in favour of Bhagwati Prasad Himatsingka.

m) Apart from the immovable properties, which belonged to the said Joint Hindu Family, the defendant Nos.6 to 26 and 32 to 39 had in their names several investments in the form of shares, warrants and other investments, which included the shares held by those companies in each other. All such shares were acquired out of the funds belonging to the Joint Hindu Family and held for the benefit of 11 the Joint Hindu Family and its coparceners and their respective branches as trustee for the benefit of the Joint Hindu Family.

n) The plaintiffs and defendant Nos.1 to 5 also have shares registered in their own names in the defendant Nos.6 to 39, the various family- companies, and such share holding is held by the plaintiffs and the defendant Nos.1 to 5 for the benefit of coparceners in the said Joint Hindu Family.

o) The defendant Nos.6 to 24 and 32 to 39 are, at all material times, the family concerns of the Himatsingka family and were formed or acquired as and are in reality different limbs of one single entity, i.e. the said Joint Hindu Family.

p) The aforesaid Prabhu Dayal Himatsingka died intestate on June 1, 1991 and by reason of the same, the share of the said Prabhu Dayal Himatsingka in the Joint Hindu Family assets, properties and business vested in and devolved in favour of Bhagwati Prasad Himatsingka and the plaintiff No.1 in equal share.

q) The said Bhagwati Prasad died on April 9, 1997 leaving his last Will dated November 18, 1996 whereby he bequeathed all his assets and properties in favour of the plaintiff No.1 and the defendant No.1 in equal share.

r) Subsequently to the death of said Bhagwati Prasad Himatsingka, the defendant No.1 in collusion and conspiracy with the other defendants purported to deal with the assets and properties of the Joint Family and to conduct the affairs of the defendant-companies and to deal with the interest therein to the detriment of the Joint Hindu Family. The particulars of which were given in details in the plaint.

s) Various disputes and differences arose between the plaintiff No.1 and the defendant No.1 and their respective branches in relation to the management, control and administration of all the assets, properties and business of the said Joint Family and by reason thereof, the plaintiffs tried for amicable partition of the same and in the month of June, July and August, 1997 several meetings and discussions were held for amicable partition, in which the defendant No.1 also participated and pretended to express his willingness for amicable settlement and consequently, a family settlement on the basis of a document was prepared and signed by him on August 18, 1997.

t) The distribution proposed in the said family settlement was contrary to what was agreed in principle and is also wholly inequitable to the plaintiff No.1 and his branch comprising of the plaintiff Nos. 2 to 4 and the defendant No.1 has sought to deprive the plaintiffs of their legitimate share and interest in the assets.

u) Even thereafter, attempts were made to bring a settlement and in purporting to act as aforesaid, the defendant Nos.1 to 5 in collusion and conspiracy with other defendants except the defendant Nos.49 and 50 were denying and/or interested to deny the plaintiffs' legal character and/or right in the property. The defendant Nos.1 to 5 in collusion and conspiracy with other defendants except the defendant Nos.49 and 50 were dealing with and were threatening to deal with the assets and properties belonging to the Joint Family and hence the suit was filed claiming the reliefs.

After the filing of the aforesaid suit, the plaintiffs came up with an application for injunction restraining the defendants from dealing with or transferring the share of the parties and on such application and interim order was passed restraining the parties from transferring their shares and the said order of injunction is still continuing.

In the year 2009, however, the plaintiffs came up with a fresh application for injunction, as indicated above, on the allegation that the defendants were trying to develop the properties of the Joint Family which is standing in the name of Assam Plywood Limited, the defendant No.18 and thus, prayed for injunction and appointment of a receiver as mentioned above.

The said application was opposed by the defendants and their contention was that the plaintiffs were not entitled to get any interim order of injunction inasmuch as the decision of developing the properties was taken by the Board of Directors of the said company and as such, the claim of the plaintiffs for any right in the property owned by the company is not maintainable.

As indicated earlier, the learned Single Judge by the order impugned has come to the conclusion that the plaintiffs failed to prove any prima facie case to have an order of injunction restraining the defendant No.18 from developing the property which had started long back in the year 2005.

Being dissatisfied, the plaintiffs have come up with the present appeal. Before entering into merit, we should keep in mind the scope of investigation at the instance of an appellate Court dealing with an appeal against a discretionary order like temporary injunction, appointment of receiver etc. It is now settled law that in such an appeal, the Appellate Court generally does not interfere with the discretion exercised by the Trial Court unless it appears that while exercising such discretion, the learned Trial Judge has wrongly applied the principles for grant of such discretion or unless it is established that such discretion has been unreasonably or capriciously exercised. In dealing with such an appeal, the appellate Court would not be justified in interfering with the discretion under the appeal solely on the ground that if it considered the matter at the trial stage, it might have come to a contrary conclusion. (See Uttar Pradesh 15 Co-operative Federation Ltd. vs. Sunder Bros. Delhi reported in AIR 1967 SC

249). In a subsequent case of Manjunath Anandappa Urf Shivappa Hansi vs. Tammanasa and others, reported in AIR 2003 SC 1391, the Apex Court reiterated the aforesaid principles which are required to be followed while hearing an appeal against a discretionary order by observing that "an appellate power interferes not when the order appealed is not right but only when it is clearly wrong. The difference is real, though fine."

In the case before us, the plaintiffs prayed for a declaration that the entire suit properties including the Assam Plywood Limited, the defendant No.18, was the joint property of the Hindu Joint Family of which the plaintiffs and the defendants No. 1 to 5 were the members and that the defendants No.1 to 5 in collusion with each other were trying to develop the property standing in the name of the defendant No.18 which was really the joint family property and to create the interest of the third parties therein and thus, there should be an order of injunction restraining the defendants including the defendant No.18 from developing the property.

The learned Single Judge, as it appears from the order impugned, has taken note of the fact that the company is the prima facie owner of the property sought to be developed and that the decision to develop the property was taken long back. We agree with the learned Single Judge that the plaintiff had knowledge of the fact that the company had taken decision to develop its properties and at that time, the plaintiffs did not raise any objection. The 16 plaintiffs claiming to be the "co-sharers" of the property allegedly owned by the Hindu Joint Family could easily take step earlier when the company took its decision to develop the property. No plausible explanation has been given by the plaintiffs for their inaction till the year 2009 when the decision to develop the property was taken in the year 2006 and such facts are indicated in the Annual Report of the company for the years 2006- 2008. It appears that the plaintiffs claim to be the owners of 57625 numbers of shares of the company constituting 16.02% of the share capital of the company and thus, it is expected that the plaintiffs had full knowledge of such decision. At least, the balance sheets of the company for the years 2006 to 2008 which are public documents reflect that the company was in the process of developing the property at Ulubari. It is, therefore, absurd to suggest that the plaintiffs did not know about the project of development till October, 2009 when the project had substantially advanced. If the company for its best interest has taken such decision, the present forum is not the appropriate platform for raising the objection at the instance of the share holders having 16.02% shares in the company and that too after long three years when the project is in full suing. The property is question, it is needless to mention, has all along been shown as the property of the company and the plaintiff has in no point of time claimed to be the co-shares as a member of the Hindu Joint Family. Thus, the plaintiffs failed to prove any prima facie case at least as regards the property owned by the defendant no. 18 in general or with regard to the property at Ulubari in particular.

The balance of convenience and inconvenience is also in favour of refusing the prayer. If we now stop the project which is in the midway and ultimately, if the suit is dismissed as regards the property of the defendant No.18 is concerned, there will be huge cost escalation of the project and the company would suffer huge loss. On the other hand, if the suit succeeds, having regard to the huge amount of other properties involved in the suit, the loss if any of the plaintiff at all, can be compensated, by appropriate order at the time of final disposal of the suit.

The learned Single Judge, in our opinion, rightly applied the well-settled tests which are required to be applied in taking decision in this type of matter and thus, we find that the decision taken by the learned Single Judge was correct and there is no reason to interfere with the just discretion exercised by the learned Single Judge.

We make it clear that our observations made above are all prima facie for the purpose of disposal of the present appeal arising out the order refusing injunction and it is needless to mention that such finding will have no binding effect on the learned Trial Judge at the time of hearing of the suit.

Appeal is thus dismissed.

In the facts and circumstances, there will be, however, no order as to costs.

(Bhaskar Bhattacharya, J.) I agree.

(Sambuddha Chakrabarti, J.) Later:

Photostat certified copy of this judgment be made available to the parties within a week from today.

(Bhaskar Bhattacharya, J.) I agree.

(Sambuddha Chakrabarti, J.)

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