Calcutta High Court
Salkia Estate Development Pvt. Ltd vs Pratap Properties Ltd. & Another on 3 April, 2008
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
GA No. 2625 of 2006
GA No. 2713 of 2006
EOS No. 8 of 2006
IN THE HIGH COURT AT CALCUTTA
EXTRAORDINARY ORIGINAL CIVIL JURISDICTION
SALKIA ESTATE DEVELOPMENT PVT. LTD.
-Versus-
PRATAP PROPERTIES LTD. & ANOTHER
For the Plaintiff: Mr. Surajit Nath Mitra, Adv.,
Mr. Arindam Mukherjee, Adv.,
Mr. I. Karfa, Adv.
For the Defendant No. 1: Mr. Ashok Banerjee, Sr. Adv.,
Mr. Partha Sarathi Sengupta, Adv.,
Mr. Shyamal Sarkar, Adv.
For the Defendant No. 2: Mr. Jayanta Mitra, Sr. Adv.,
Mr. Debangshu Basak, Adv.,
Mr. R.M. Barik, Adv.
For the Pro interesse suo Mr. Anindya Mitra, Sr. Adv.,
applicant: Mr. Joydeep Kar, Adv.,
Mr. Srenik Singhvi, Adv.,
Mr. Prabir Banerjee, Adv.
For the Receiver: Mr. Joy Saha, Adv.
Hearing concluded on: March 31, 2008.
BEFORE
The Hon'ble Justice
SANJIB BANERJEE
Date: April 3, 2008.
SANJIB BANERJEE, J. : -
These are two applications in a suit transferred from the Howrah court.
The plaintiff's application, GA No. 2625 of 2006, is for an injunction restraining
the defendants from disturbing the receiver's possession of the suit property in
Howrah. GA No. 2713 of 2006 is an application in pro interesse suo by one Pratik
Marketing (P) Limited complaining of the receiver having dispossessed it from a
part of the suit premises and seeking restoration of its possession.
The context of the two applications and the conflicting rights asserted
cannot be appreciated without going back a considerable distance in time. The
present plaintiff is not the person who instituted Title Suit No. 12 of 1986 before
the Civil Judge, Senior Division, Second Court, Howrah. The plaintiff took over
the rights of the original plaintiff and had itself substituted in place and stead of
the original plaintiff.
The narration of events has to begin with a reference to Suit No. 85 of 1984
filed before this Court wherein the plaintiffs' claim in such suit was discharged
upon satisfaction in that regard being recorded by an order of November 27,
1991. The plaintiffs in the 1984 suit carried on business under the name and
style of "Himalayan Trade Links" (hereinafter referred to as Himalayan).
Himalayan had given a loan to Katihar Jute Mills Limited, the first defendant in
the 1984 suit (hereinafter referred to as Katihar). Morgan Walker & Company
Limited, the second defendant in the 1984 suit (hereinafter referred to as
Morgan), had guaranteed repayment of the loan obtained by Katihar from
Himalayan. Himalayan sued both the principal debtor and the guarantor in the
1984 suit.
Morgan gave the guarantee on Katihar's behalf against a counter guarantee
furnished by Pratap Properties Limited, the first defendant in this suit
(hereinafter referred to as Pratap), and an equitable mortgage created by Pratap
of some of its properties by deposit of title deeds relating thereto with Morgan.
Shortly upon Himalayan seeking to press its claim against Katihar and Morgan,
Morgan sought to enforce the mortgage created by Pratap by instituting Title Suit
No. 12 of 1986 in the court of the Second Civil Judge, Senior Division, at Howrah
with the primary relief claimed being one for a decree for Rs.70 lakh odd, about
the amount of the claim made by Himalayan in the 1984 suit. It is this Howrah
suit which has been transferred to this Court.
The substituted plaintiff in this suit, Salkia Estate Development Pvt.
Limited (hereinafter referred to as Salkia or the plaintiff), entered into an
agreement with Morgan for discharging Morgan's debt to Himalayan. Salkia made
an application in the other suit in November, 1991 for it to be recorded that the
decretal debt of Himalayan had been fully and finally settled and satisfied on the
terms and conditions mentioned at paragraph 7 of Salkia's application. The order
of November 27, 1991 passed on such application records Salkia's assertion that
it had entered into an agreement with Morgan by which Salkia had agreed to
acquire Morgan's liability to Himalayan in consideration for assignment of
Morgan's rights against Pratap on the counter guarantee and mortgage. The
order further records that Himalayan had agreed to accept Rs.20 lakh in full and
final settlement of its claim under the decree against the defendants in the suit
and that Salkia had paid such sum of Rs.20 lakh to Himalayan.
By the time Salkia sought to step into Morgan's shoes and discharge
Himalayan's debt on account of Morgan's guarantee furnished for the benefit of
Katihar, Katihar had gone into liquidation and the 1984 suit proceeded, with
leave under Section 446 of the Companies Act, against the official liquidator
representing Katihar.
By the application made by Salkia in November, 1991, it required the court
to record the satisfaction of the decree of September 2, 1988 passed in the 1984
suit and for Salkia to be assigned whatever rights Morgan had to recover the
amount from the official liquidator. In addition, Salkia sought to have certain
other terms recorded, affecting Pratap. The order of November 27, 1991 noticed
that Morgan had filed a suit against Pratap in Howrah, but declined to record the
terms involving Pratap that Salkia desired should receive the imprimatur of
court, on the ground that no notice had been given to Pratap.
The recording sought by Salkia that Morgan's interest in the counter
guarantee furnished by Pratap stood transferred and assigned in its favour, is
deemed to have been refused by the order as the same would have affected
Pratap's rights whether in the Howrah suit (now this suit) or otherwise. Similarly,
the recording that Salkia sought of the assignment in its favour of the mortgage
by Pratap to Morgan, was also not recognised by the order of November 27, 1991.
The other matter referred to in the sixth clause of paragraph 7 of Salkia's
application, that Morgan stood discharged as guarantor to Himalayan, was
recorded and accepted by court as this was not a matter affecting Pratap.
Salkia applied to be substituted in place of Morgan in this suit. The
Howrah court allowed Salkia's application under Order XXII Rule 10 of the Code
of Civil Procedure, 1908 on July 14, 1992. Long afterwards, the second defendant
applied to be impleaded in the suit, claiming to be a lessee of the immovable
property, or a part thereof, mortgaged by Pratap in favour of Morgan. The pro
interesse suo applicant, Pratik Marketing (P) Limited (hereinafter referred to as
Pratik) also attempted to clamber on board but its application under Order I Rule
10 of the Code ultimately failed.
There are two sets of conspiracy theories that have been bandied. Pratik
says that the plaintiff and the first defendant are really one entity and a dormant
suit and a dead interlocutory order therein have been resurrected to keep Pratik
at bay and illegally snatch possession of a part of the property through the
instrumentality of the receiver. The second defendant echoes the sentiment,
suggesting that it is only the second defendant's presence in the suit that has
spoilt the plaintiff and the first defendant's party in their mala fide attempt to
gobble up the property to the prejudice of the rights of the second defendant and
others who are not parties to the suit. There is a distinct slant that the second
defendant betrays towards Pratik in the short submission made on his behalf.
The plaintiff, however, alleges that the connivance is between the first defendant
and Pratik, who between them seek to usurp the valuable property without so
much as a by-your-leave to the plaintiff and in complete disregard of its rights as
the mortgagee.
On August 23, 1986 a receiver was appointed in this suit by the Howrah
court. Order no. 15, by which the appointment was made, records in its material
part as follows:
"Sri Pranab Kumar Biswas, Advocate of this Court is appointed as
Receiver in respect of the mortgaged properties mentioned in the schedule
of (the) plaint. The Receiver so appointed shall take possession of the said
properties and collect the monthly rents from the tenants inducted in the
said mortgaged properties and deposit the said amount in Court regularly."
A writ of possession was issued by the Howrah court on September 3, 1986
directing Pratap to make over possession of the suit property to the receiver. It
appears that around the time that the receiver was appointed some godowns in a
portion of the suit premises collapsed due to torrential rains and there were
casualties. Pratap has relied on newspaper reports in support of the assertion
and Pratik has subsequently admitted that a number of godowns gave way under
heavy showers rather than being razed by any devastating fire that Pratik had
initially alleged in its application.
The order of appointment of receiver fell for consideration of the Howrah
court on a petition filed by the original plaintiff seeking directions on the receiver
for protecting the mortgaged properties. In order No. 23 made on December 23,
1986, the Howrah court recorded that on perusal of the order of appointment of
receiver, "it appears to me that the Receiver is appointed to take charge of the
property in question for the purpose of collecting the rent." The court then
observed that the receiver was not in a position to collect any rent from the
tenants in view of some order passed by the High Court. The court, however,
directed that the receiver "so appointed" was to carry out order no. 15 of August
23, 1986.
On February 7, 1987 a memorandum was executed by Pratap and Pratik
agreeing to develop 70 cottahs of land at the suit premises that had opened up
following the collapse of the godowns during the previous monsoon. It is evident
from such document that Pratap was concerned at the mounting dues of the
mortgagee (then Morgan, the original plaintiff). In its first clause the said
memorandum required Pratik to pay a sum of Rs.25 lakh on account of Pratap to
Morgan for Morgan to release the equitable mortgage for the purpose of
developing the property. Such payment was to be treated as an advance to
Pratap.
Two agreements were entered into between Pratap and Pratik in pursuance
of the memorandum of February 7, 1987. Pratik refers to the first of the two
agreements which records that Pratap had obtained sanction for construction of
buildings at the 70-cottah plot of covered area of 19639 sq.ft. which Pratap had
submitted for revision to the Howrah Municipal Corporation. Clause 2(d) of the
first agreement provides that upon sanction of the plan or earlier, Pratap would
remove the occupants from the land or obtain the occupants' cooperation in such
manner that the buildings could be constructed thereon without any delay or
extra cost. It is the second sentence of the clause that Pratik emphasises:
"The developer (Pratik) in the mean time will take over possession of
the vacant area and start reconstruction so as to facilitate shifting of the
occupants in terms of these presents."
Pratik was also obliged to demolish the existing buildings and structures,
which were left ruined by the rains of the previous season, and appropriate the
debris thereof.
Clause B(e) of the recital to the second of the agreements records as
follows:
"B. ...
(e) Certain buildings and structures on a portion of the said premises
have fallen down and the debris thereof is still lying on the premises and
the Owner has negotiated and/or is negotiating with the tenants and/or
occupants of the adjoining portion in the said premises and hopes to have
vacated approximately the area mentioned in the Second Schedule hereto
and marked in yellow borders on the plan being Annexure 'A' hereto and
hereafter called "the first Portion" which is expected to be developed under
Phase One hereinafter mentioned and the Owner has assured the
Developer that there would be no difficulty or dispute concerning the
immediate development of the first portion in Phase One in terms hereof:"
According to Pratik, clause 3 of the second agreement would show that
Pratik was to come into possession of the land shortly after the execution of the
agreement:
"3. With (within?) 3 months from the date hereof the Owner (Pratap)
shall -
a) either make the said premises and/or the First Portion free from all
encumbrances otherwise reasonably satisfy the Developer that by the
Developer paying the amounts and fulfilling its obligations as
mentioned herein the first portion would become free from
encumbrances in favour of Morgan Walker and a title thereof can be
passed on to the flat buyers; and proper deeds will be executed in
this respect;
b) deliver vacant possession of the first portion to the Developer and
reasonably satisfy the Developer that it can proceed with the
development of the first portion in terms hereof."
By end-May, 1987 a power of attorney was executed on behalf of Pratap
and in favour of Pradip Kumar Sureka and Saroj Chamria, two directors of
Pratik. Such power of attorney recorded that Pratap did "nominate, constitute
and appoint" Pratik and/or its said directors as Pratap's "true and lawful
attorney ... to do exercise, execute and perform all or any of the (several) acts,
deeds, matters and things jointly and/or severally" as detailed in the document.
The first clause of the grant permitted the attorneys "to enter into, hold and
defend possession of the said premises and every part thereof and also to deliver
possession of parts of the said premises or any undivided share therein and also
to manage, maintain and administer the said premises and all buildings and
constructions thereon and every part thereof." There are wide powers granted to
Pratik or its directors under the relevant document, including the authority to
ward off and prohibit trespassers on the premises and to proceed against
trespassers whether by action or otherwise and to abate all nuisance at the said
premises.
All these details need to be referred to as Pratik insists that following the
agreements and the power of attorney, it came to be in possession of the 70-
cottah plot within the suit premises and Salkia and Pratap are vociferous in their
assertion that Pratik neither had possession of any part of the land nor can
Pratik demonstrate that it was in possession of any part of the suit premises for
its grievance as to dispossession to be taken seriously. Salkia says that in view of
the order appointing the receiver to take possession of the entire property, Pratik
could not have obtained possession of any part thereof. Pratap says that the
documents only express Pratik's right to be in possession but what Pratik is
required to show now is that it was in possession before being allegedly
dispossessed by the receiver. Pratap contends that by an order of December 22,
1987 passed by the Howrah court in this suit, the receiver was given liberty to
appoint durwans and the police was directed to render assistance to the receiver
for the preservation of the property:
"Inspector-in-charge, Golabari P.S. is directed to render all police
help if required by the Receiver, Sri P.K. Biswas, Advocate in the matter of
discharging his work in relation to the mortgaged properties. Inform the
receiver and the Inspector-in-charge of Golabari P.S. accordingly.
Receiver, Sri P.K. Biswas is permitted to appoint two durwans for
protecting of the mortgaged properties provided that the petitioner is to pay
month by month and regularly a sum of Rs.1,000/- to the Receiver for the
remuneration of two durwans."
Pratap also relies on a further order passed in this suit on February
29,1988 requiring Pratap to submit a list of tenants/occupiers at the suit
property to the receiver. The receiver filed the list furnished by Pratap in court
and Pratik's name does not appear therein. The order dated February 29, 1988
provides:
"The petition dated 27.2.88 is put up for hearing. Ld. lawyers of both sides
are present. Ld. lawyer for the defdt. submits that the Receiver appointed
by the Court is realising rents from persons who are not tenants but sub-
tenants or occupiers and thereby giving some statutory rights to the
persons who are illegal occupants of the same. Ld. lawyer for the pltff
submits that the submission made by the ld. lawyer for the defdt. is
absolutely wrong and has no basis. Ld. lawyer for the pltff also submits
that the defdt. side should be directed to give a list of such sub-tenants
from whom the Receiver is recovering rents. The ld. lawyer for the defdt. is
directed to submit such a list of the tenants or sub-tenants if there be so
before the Court within a month and thereby enlighten the Court regarding
the genuineness of his submission. It is also submitted by the ld. lawyer
for the pltff that the defdt side has not acted as per the order of the Court
on 20.11.87. The defendant side is therefore directed to give the honour to
the order of the Court passed on 20.11.87. In default the submissions of
the ld. lawyer of the defdt. shall be rejected in future.
Ld. Receiver is directed to give an account before the Court regarding
the actual amount received or recovered by him from the occupiers of the
disputed property within a fortnight from this day. It is seen that lot of
water has flown down to the river Ganges since the inception of the suit
and lot of submissions have been made by both sides regarding mis-use
and mis-utilisation of the property referred to in the suit. Therefore to get a
clear cut picture of the entire disputed property both the sides are directed
to help the Court to give the actual picture of the property in dispute. The
defdt. side is therefore directed to file a detailed petition wherefrom the
Court can come to a decision regarding the mis-doings of the ld. Receiver
as has been alleged by them. Ld. lawyer for the defdt. side should give a list
containing the names of tenants/sub-tenants within 7 days from this day.
After hearing both the side the ld. Receiver is also directed not to act
any illegal way and to act in such a way so that the interest of the property
which has been entrusted to him may be kept secured.
Ld. Receiver is directed not to realise the rent from such persons
which shall change the nature and character of the suit property.
To 30-3-88 for report of the ld. Receiver."
What Pratap suggests is that notwithstanding the agreements of May 15,
1987 and the power of attorney within a fortnight thereof, Pratik did not enter
upon possession of any part of the 70-cottah portion of the suit premises. Pratap
cites a letter of June 6, 1988 received from Pratik complaining of the viability of
the project and seeking a revision of terms. Pratap insists that by such letter
Pratik abandoned the agreements of May 15, 1987.
Pratik, on the other hand, refers to a string of agreements with the
erstwhile occupants at parts of the 70-cottah plot by which the erstwhile
occupants surrendered their rights and acknowledged that Pratik was to be
deemed to have been put in possession by the erstwhile occupants. Such
agreements are all of 1996, and contain, inter alia, the following four typical
clauses:
"1. The Assignor has agreed to assign and transfer his right interest and
entitlement in the Godown marked 14 admeasuring 3900 sq.ft. in the
ground floor of the Premises No. 26 Kishanlal Burman Road, to the
assignee and/or its nominee and the assignee has agreed to accept such
assignment of the same on the terms and conditions hereinafter
contained."
"3. After signing of this agreement and after receipt of the consideration
money as aforesaid, the Assignor shall forthwith cease to have any right
interest or entitlement whatsoever in the said godown space and all such
rights interest etc. enjoyed by him shall stand assigned/transferred to the
assignee and/or its nominee.
"4. It is further declared and confirmed by the parties hereto that with
the signing of this agreement the physical delivery of possession of the said
godown space shall be deemed to have been given by the Assignor to the
Assignee and accepted as such by the Assignee.
"5. The Assignor agrees to execute such further documents and/ or
agreement as may be necessary and appropriate to give effect to this
agreement both in letter and spirit."
But between Pratik's letter of September 6, 1988 and the autumn of 1996
when Pratik entered into agreements for assignment with some of the erstwhile
tenants or occupiers of the godowns which had collapsed, two major events took
place. Morgan's debt to Himalayan, the original creditor, was discharged by
Salkia whereupon Salkia slipped into Morgan's shoes and as plaintiff in this suit.
The plaintiff's application for appointment of a receiver in the suit, which
appeared to have been disposed of by the order dated August 23, 1986, was
taken up by the Howrah court and rejected for non-prosecution on November 29,
1994. The order, however, did not specifically discharge the receiver.
In the opening paragraph of its application, Pratap begins with the two
agreements of May 15, 1987. The second paragraph refers to the power of
attorney and at paragraph 3, Pratik claims it took possession of various portions
of premises no. 25, Kishanlal Burman Road, Salkia from the tenants "as an when
the said tenants delivered possession of the said premises as well as from ...
Pratap ..." The copies of five agreements of 1996 find reference at paragraph 3 of
the application and the agreements appear at pages 118, 122, 125, 128 and 131
of the application.
Paragraph 4 of Pratik's application is the link between the various
agreements referred to in the previous three paragraphs and Pratik's claim of
exclusive possession of 70 cottahs of open space at the said premises:
"4. Your petitioners state that there was a huge fire in or about 1996
and some of godowns were gutted by fire. Your petitioner demolished the
remaining burnt out structures and an area of 70 cottahs of land became
open space. Your petitioner erected boundary walls around the said open
space of 70 cottahs and affixed an iron gate for entry. Your petitioner had
put a padlock on the said Iron Gate. Your petitioner had built temporary
office space inside the boundary wall enclosing vacant space and protected
by Iron Gate. Your petitioner had posted durwans for the purpose of safety
and security of the said premises. The said durwans were performing their
job of security guards since prior to 1996. A copy of the site plan as
annexed to the agreements dated May 15, 1987, is annexed hereto and
marked "D"."
Pratik then refers to a telephone line being installed in its name at the said
premises in February, 2000 for which Pratik claims to have paid bills till May,
2006. A letter of December 4, 1996 said to have been issued by Pratap, is
referred to at the seventh paragraph of Pratik's application and the document
appears at page 136 thereof. The letter makes interesting reading:
"Sub: Delivery of possession.
We are pleased to note that according to our earlier letters dated May 20,
1987 and September 4, 1987, you have removed the debris of the collapsed
godowns and have taken possession thereof by erecting boundary walls
thereof.
We are further pleased to note that you have negotiated with five tenants
and got surrendered their tenancies in respect of their respective godowns,
presently collapsed.
We have also negotiated with three tenants whereby the said tenants
surrendered their respective godowns.
Still, there are four tenants to be negotiated for surrender of tenancy,
which is requested to be done, expeditiously in the interest of the
development of property.
Present status of surrendered tenancy is accordingly mentioned in a
separate sheet, attached herewith.
Since you are in possession of the vacant portion of the property, you are
requested to take all measures for safety and security, which is entirely at
your risk.
Expecting the surrender of tenancies of the remaining tenants and
development of the project, at earliest."
According to Pratik, there was a threat of breach of peace at the said
premises in 1999 which prompted one of Pratik's directors, Saroj Kumar
Jhunjhunwalla, to file an application under Section 144(2) of the Criminal
Procedure Code before an executive magistrate at Howrah. Pratik relies on the
report of May 10, 1999 filed by the Golabari Police Station in such proceedings,
recording that Pratik was in possession of the property whereat Vinod Kumar
Chamaria and Vijay Kumar Chamaria, directors of Pratap, were creating
disturbance. The police report is part of Annexure 'G' to the application and at
page 142 of the application the following is recorded by the sub-inspector:
"The O.P.s could not produce any document relating to its
possession at the time of enquiry.
On enquiry the O.P.s in favour of Vinod Kr. Chamaria and Vijoy
Kumar Chamaria creating disturbances, . annoyance ... in peaceful
possession of the petitioner.
As such I pray that proceedings U/s 144(2) Cr.P.C. may kindly be
drawn against the O.P.s for restraining and interfering to the said plots."
Pratik says that as a counter-blast a director of Salkia instituted
proceedings under Section 144(2) of the Criminal Procedure Code wherein the
police report of September 14, 1999 claimed that Pratik was in exclusive
possession of the property. Pratik says that the attempt by Salkia or Pratap to
disturb its possession at the said premises was pursuant to Pratap's attempt on
April 21, 1999 to terminate the agreement by notice. Pratik instituted title suit
no. 66 of 1999 in the Howrah court challenging the cancellation of the agreement
and seeking permanent injunction restraining Pratap from entering into any
development agreement in respect of the said premises with any other.
On an interlocutory application in Pratik's suit of 1999, the Howrah court
directed the parties to maintain status quo with regard to possession. Pratap
sought vacating of the order of status quo made on May 5, 1999 in Pratik's suit
of 1999 and failed. It transpires that Salkia is also a party to the suit but Salkia
claims that it had no inkling until recently of the suit having been filed and had
not been served the writ of summons or given notice of any of the interlocutory
proceedings, including the appeal or revision from interlocutory orders. Salkia, of
course, was impleaded at a later stage, Pratik saying that its application of
September 22, 1999 for adding Salkia as a defendant in that suit was ultimately
allowed on June 29, 2004 as Salkia chose not to contest despite service and
Pratap's resistance on Salkia's behalf was disregarded. Pratik's interlocutory
application and Pratap's vacating application were disposed on January 21, 2006
against which an appeal was unsuccessfully preferred by Pratap.
It is in the summer of 2006 that the matters flared up. Irrespective of the
order in which they happened, there was Pratap's revisional application before
this Court arising out of its failed appeal in Pratik's injunction application in the
suit of 1999; there was a suit filed by Pratap claiming that the letter of December
4, 1996 that Pratik relied on was forged and not issued by Pratap; rival
complaints were lodged with the police as to possession of the premises; the
receiver took charge of the suit premises in pursuance of order nos. 200 and 201
passed in this suit in 1999; Pratik claimed that it had been wrongfully
dispossessed by the receiver; and, this suit was transferred to this Court.
Pratik has questioned the conduct of the receiver. It cites the order of
November 29, 1994 by which the plaintiff's application for appointment of
receiver stood dismissed for default. Pratik alleges collusion between Salkia and
Pratap and says that the connivance would be evident from order no. 189 passed
in this suit on July 12, 1999 on an application for recalling order no. 161 of
November 29, 1994 by which the receiver application stood dismissed. It appears
from the order of July 12, 1999 that Pratap invited the court to recall the order of
dismissal and submitted that the order of dismissal was made inadvertently. The
application for recalling the order dated November 29, 1994 was disposed of by
an order no. 192 of July 22, 1999 when the Howrah court held that the order of
dismissal should not be recalled and the appointment of the receiver which was
cancelled by the order of dismissal should not be modified. By such order the
receiver was "directed to hand over the charge of the property positively by
5.8.99."
Salkia carried the order of July 22, 1999 in revision before this Court which held that the order of November 29, 1994 was passed by oversight and set it aside. Following the High Court order the Howrah court made an order on September 9, 1999 on an application filed by the receiver. Pratik says that it is unusual for a receiver to apply for orders and questions the receiver's assertion, as recorded by court, that the receiver had appointed security guards on the ground that the receiver appeared to be overzealous. Pratik complains that in the order of September 9, 1999 recording the receiver's contention that Pratik's security guards obstructed the receiver's guards, there was evidence of Pratik being in possession of the premises. Pratik points to the Judge's recording of the receiver's version that when the receiver visited the suit premises on August 25, 1999 he found no name on a gate but in course of his subsequent visit on August 30, 1999 he found Pratik's name and some activity around a brick-built wall with Pratik's security guards claiming that Pratik was in possession.
The order of September 9, 1999 noticed the receiver's charge that the police authorities had not rendered any assistance despite the earlier direction of December 12, 1987, expressed anguish at the police conduct and directed the police to assist the receiver to remove the security guards and the boards of Pratik from the mortgaged property.
Another order followed on September 13, 1999 on the strength of the receiver's report filed on the same day and directions being sought by the receiver on the basis of two letters of September 9 and September 10, 1999 issued on behalf of Pratik to the receiver. It appears from order no. 201 of September 13, 1999 that the Judge called for the records in Pratik's suit (TS No. 66 of 1999) and opined that it was "clear that up till 7.6.99 there was nothing showing the possession of pltff. in T.S. 66/99 viz. Pratik Marketing (P) Ltd. over the suit property as because from the ptn. of receiver dt. 7.9.99 and thereafter informing the same to the local P.S. Golabari on 28.8.99 and lastly on 4.9.99." The Judge concluded that there was no evidence of Pratik's possession and accordingly the receiver should comply with the order of September 9, 1999 "without giving any importance to the 3rd party's petn. i.e. Pratik Marketing (P) Ltd. who has primafacially (sic, prima facie) no possession over the suit property up to 25.8.99 ..." Such orders of September 9, 1999 and September 13, 1999 and the receiver acting thereon, albeit some seven years later, have been seriously questioned by Pratik as to their propriety and legality.
Long before it claims to have been dispossessed, Pratik was aware of the orders of September 9, 1999 and September 13, 1999 and challenged such orders in FMAT No. 3386 of 1999 filed before this Court. On the appeal being received an order was made on October 13, 1999 that any action taken by the receiver pursuant to the orders under appeal, would abide by the result of the appeal or any order that may be passed on the application for stay of the impugned order. The receiver was directed to submit a comprehensive report.
Around the same time, in October 1999, Pratik filed TS No. 168 of 1999 in the Howrah court against Pratap seeking specific performance of two agreements of May 15, 1987 and permanent injunction on the same lines as claimed in its earlier suit, TS No. 66 of 1999.
Pratik did not press FMAT No. 3386 of 1999 which was directed against the orders of September 9 and September 13, 1999. The appeal and the connected applications being CAN No. 8211 of 1999 and CAN No. 8279 of 1999 were dismissed on January 4, 2000 upon this Court recording the submission of counsel appearing for Pratik "that he has received instructions from his clients not to proceed with appeal."
Pratap says that Pratik can no longer complain of being dispossessed as it did not pursue the appeal and thereby accepted the orders of September 9 and September 13, 1999. Pratap claims that Pratik was never in possession of any part of the suit premises and the fact that the receiver had a gate or wall whitewashed to erase Pratik's name therefrom would not amount to Pratik being dispossessed. Two other proceedings launched by Pratik for the same purpose as the present are cited by Pratap to suggest that Pratik's application in pro interesse suo merits summary rejection. Pratik has, indeed, instituted contempt proceedings being CPAN No. 1103 of 2006 on August 18, 2006 and CAN 6267 of 2006 later in the year, both on the Appellate Side of this Court in Pratap's revisional application arising out of the order of injunction passed in Pratik's TS No. 66 of 1999 by which Pratap has been restrained from entering into any development agreement in respect of the said property. The charge in such petitions by Pratik is that the receiver acted in derogation of the order of status quo subsisting in Pratap's revisional application being CO No. 2212 of 2006. Pratap has referred to another contempt petition, CPAN No. 1265 of 2006, in its affidavit but the parties have not alluded to such application in course of the hearing. Pratik insists that the application in pro interesse suo can proceed regardless of judgment having been reserved in the two other proceedings of similar import.
Pratik cites a decision reported at 58 CWN 193 (Rebati Ranjan Chakrabarty & anr. v. Umaprasanno Mukherjee) to suggest that its appeal from the orders dated September 9 and September 13, 1999 was not maintainable and the fact that such appeal was withdrawn without any reservation would bar another appeal being filed under Order XXIII of the Code but would not stand in the way of the application that it has filed in this suit. Pratik refers to a judgment reported at 2007 (1) CHN 80 (Venkateshwar Fiscal Services private Limited v. Bagla & Co.) to urge that an application in pro interesse suo is merely in defence and not an aggressive action. Pratik's argument is that the abandonment of its challenge to the orders of September 9 and September 13, 1999 notwithstanding, it is entitled to an order now upon being dispossessed by a receiver without Pratik being a party to the proceedings and otherwise than under due process of law.
The point that Pratik makes is that its dispossession was contrary to the principles of natural justice, in Pratik not being heard. Pratik also refers to a judgment reported at (2007) 7 SCC 65 (Kandapazha Nadar v. Chitraganiammai) where the Supreme Court held that an order permitting withdrawal of suit without leave to file afresh does not bar the original plaintiff from taking a defence in a second round of litigation in respect of the subject matter relating to the suit which was withdrawn. It was held that Order XXIII Rule 1(3) precludes the plaintiff from filing a fresh suit and does not operate as res judicata.
Pratik also refers to the affidavits filed on behalf of Salkia, Pratap and the receiver to demonstrate that all of them deny that Pratik had been dispossessed. Pratik suggests that it has shown that it was in possession and that now it is not in possession and the collective denial of Salkia, Pratap and the receiver should prompt Court either to hold that Pratik continues to be in possession or to restore Pratik's possession.
Salkia has referred to a judgment reported at (2000) 1 SCC 742 (Usha Harshadkumar Dalal v. ORG Systems) for the principle is that a receiver is obliged to protect the property over which he is appointed and it was in recognition of such obligation that the receiver petitioned the Howrah court which culminated in the orders of September 9 and September 13, 1999 being made. In the Supreme Court case it was held that summary proceedings would lie to oust a trespasser who had interfered with the receiver's possession. But even if the proceedings were to be summary as Salkia suggests and the summary proceedings could be accommodated in the suit in which the receiver was appointed, it would require notice to the person sought to be evicted.
The next judgment relied upon by Salkia is one reported at (2004) 7 SCC 203 (Fargo Freight Limited v. Commodities Exchange Corporation). Paragraphs 4, 5 and 21 of the report have been placed in support of the contention that despite a party not having notice it would be bound by an order of court. The proposition cannot be doubted but it is also of some significance that the person sought to be bound by the order in that case was a party to the proceedings.
Salkia next relies on a decision reported at AIR 1967 SC 1 (Naresh Shridhar Mirajkar & anr. v. State of Maharashtra & anr.) to counter Pratik's argument that the appeal that it withdrew was not maintainable in the first place. Salkia says that since Pratik understood that its rights were affected by the orders of September 9 and September 13, 1999 an appeal therefrom was its only remedy and the withdrawal thereof precludes Pratik from canvassing its cause in subsequent proceedings. In the same vein a judgment reported at (2002) 7 SCC 46 (Prakash Narain Sharma v. Burmah Shell Coop. Housing Society Limited) is cited for the principle that if a judicial order is not invalid on the face of it, it has to be implemented.
The last judgment relied upon by Salkia is one reported at (1999) 1 SCC 81 (Upadhyay & Co. v. State of U.P.) where applying the principle of Order XXIII Rule 1, the Supreme Court held that upon a special leave petition being withdrawn without leave to file afresh a subsequent special leave petition would not lie. Salkia contends that since the subject matter of Pratik's withdrawn appeal was that it was in possession and was entitled to remain so, that the receiver implemented the order would not permit Pratik to, in effect, question the order upon its alleged dispossession.
The principles involved in an application in pro interesse suo find place in the two decisions placed by Pratap. In the judgments reported at AIR 1925 Cal 681 (Sreedhar Chaudhury v. Nilmoni Chaudhury & ors.) and AIR 1972 Cal 345 (Central Bank of India v. Srish Chandra Guha & anr.) the exacting diligence that the Court demands of such an applicant has been recognised:
"... I should have been glad to assist the mortgagees who claim a title paramount by making an order for their examination pro interesse suo, but for the reasons about to be given I must refuse the present application. My reasons are two in number. In the first place, there is the suit in the Dhanbad Court, where the mortgagees' rights will have to be established, and there is also suit in this Court instituted by the receiver in which no summons has yet been served; and in the second place, an examination pro interesse suo is never made unless the applicant shows diligence, and in this case the applicants have not shown diligence. The applicants cannot be allowed now to come into this suit by petition for examination pro interesse suo laying by the suit which they had begun in the Dhanbad Court to obtain the same relief. As the Master of the Rolls (Plumer, M.R.) said in Brooks v. Greathed, (1820) 1 Jac. and Walk. 176, "it would not be consistent to give to the applicants that on petition, which they had themselves sought by another remedy". The conclusion, therefore, to which I have regretfully come, on the facts of this case, is that I must refuse the present application. As I have said, there is undoubted power in the Court to make such an order, as has been asked for; such orders have been made from very early times, although it is perfectly true that the Court has exercised the power very sparingly and only in vary special cases and under special conditions [See Motivahu v. Premvahu ((1892) 16 Bom. 511); Mahomed v. Zoharra ((1889) 17 Cal. 285)]. ..." (AIR 1925 Cal 681 at p. 683) "9. A proceeding in pro inter esse suo is not provided for either in the Code of Civil Procedure or in the Rules of the Original Side of this Court. This is a procedure imported into this country from England. In order to do justice to a person, the Court allows that person to come in and be examined as to his title to the goods or property over which the Court has appointed Receiver in a proceeding between persons other than the said person. That is done so that no person may suffer because of any order that may be passed by the Court. It is the right in such a proceeding of that person who claims to be the owner of the goods or property to be examined as to his title to the said goods or property. It is in that sense a personal right of that person only. That person cannot in my opinion in such a proceeding ask the Court to examine some other person with regard to that person's right or title in the goods or property over which the Court has appointed a Receiver."
"11. ... A summary procedure in the form of an application in pro inter esse suo be resorted to or allowed to be resorted to only by a party who shows the utmost diligence. See Sreedhar Chaudhury v. Nilmoni Chaudhury, 41 Cal LJ 197 at p. 201 = (AIR 1925 Cal 681). An examination pro interesse suo is never ordered unless the applicant shows diligence."
(AIR 1972 Cal 345 at p. 347) The first aspect is whether the applicant gets a look-in upon his unreserved renunciation of the appeal from the orders dated September 9 and September 13, 1999. The prejudice argument notwithstanding, the orders of September 9 and September 13, 1999 cannot be fastened on Pratik despite its contemporaneous knowledge thereof. It was not a party to the proceedings in which the orders came to be made. The merits of its claim in its suit were assessed without its knowledge. Till the time that Pratik withdrew the appeal, no steps had been taken in derogation of any right that Pratik claimed.
The matters that a party urges in any proceedings are not immune to question upon such proceedings being withdrawn. Order XXIII mandates that a party which has withdrawn the proceedings may not bring similar proceedings to agitate that which has earlier been abandoned. The fact that a party cannot found a subsequent action on the matters urged and abandoned do not add any sheen to the legality or propriety of such matters, but merely robs such party of the right to launch a further challenge thereto. If a party was not bound by an order and yet challenged it in a superior forum and subsequently gave up the challenge, it may not make the order binding on it. For the character of the order is decided at the time of its pronouncement and a waiver of the challenge cannot be equated to the acceptance of the order or its efficacy. There is no issue estoppel in respect of the matters urged and abandoned, there is only an embargo on a further similar challenge by the same party.
An application in pro interesse suo is, in a sense, an action in defence to bring to the notice of the court that its orders or the receiver's action on its orders are in derogation of a title that the applicant asserts and that such title was not earlier open to question in the proceedings in which the order was made. If Salkia or Pratap were to launch a suit founded on the orders of September 9 and September 13, 1999, Pratik would not be precluded from questioning of propriety thereof in its defence. That appears to be the import of Order XXIII Rule 1(4) of the Code and the test therefor.
An application in pro interesse suo is ordinarily decided on affidavit evidence. The applicant asserts a title, offers himself to be examined as to his title and seeks a discharge of that which is his and has been bound by an order in proceedings to which he is not a party. For a court to take heed and get into a side-show, so to say, that is not in aid of the reliefs in the suit, the court demands ruthless candour and uncompromising diligence. It is a court's action, generally through a receiver, that is on trial and the court does not push the stranger to the action to launch independent proceedings if it sees that it is its action, or its receiver's, that has occasioned any prejudice to the stranger- applicant. The court's concern is to right a wrong done to an outsider to the lis. The stranger cannot style his application as a plaint. The application is his pleading and evidence, rolled into one. It has to contain the whole truth, nothing but the truth and conceal nothing at all.
This applicant does not offer to have its possessory title examined. Even if that is ignored in the wake of its robust assertions and the seriousness with which Salkia and Pratap have treated the application, it brings no assuring evidence as to its possession. True, it is a vacant land or a land with some odd structure that the parties fight over, where possession is difficult to demonstrate, but to accept the extraordinary version that Pratik presents requires considerably more than what it brings. If motive may be found in Salkia and Pratap ganging up to dislodge Pratik, to take umbrage at the receiver's conduct in filing reports and independently seeking directions as to the preservation of the property would
- however undesirable they may ordinarily be - call for more exceptional material than what Pratik puts on display. And then, Pratik's version of things is laced with gaps that Pratap springs up to fill in with facts Pratik may have been embarrassed to recite.
Pratik glosses over nearly a decade as it leapfrogs from paragraph 2 to paragraph 3 of its application. The immediate link in the opening words of paragraph 4 appear to be misleading and Pratik now accepts that there was no devastating fire in 1996 that led to the godowns collapsing, but they had caved in following the rains of 1986. Pratik's agreements of May, 1987 speak of the rains and the ruins at the suit premises thereupon. Pratik omits to mention the trifling matter of its letter of September 6, 1988 where it claimed that the project was unviable. There may be a just explanation for the letter having been issued, but it needed to be mentioned and explained.
The five agreements with the erstwhile occupants that Pratik relies on, merely recognise Pratik to be deemed to be in possession. Pratap is not a party to any of the agreements. Pratik does not respond to a query as to how police reports filed in proceedings under Section 144(2) of the Criminal Procedure Code would have a lasting bearing in a civil matter where possession is in dispute. The letter of December 4, 1996 is so overwhelmingly suited to Pratik's cause that to ungrudgingly accept it would be to negate the constant skirmishes that Pratik engaged in with Pratap and Salkia. That the letter is also the subject matter of challenge in an independent suit may not rob it of its virtue if it could otherwise have been justified. Finally, since a receiver was in possession and an order of injunction runs with the appointment of the receiver, even if the legality of Pratik's possession is not questioned, the factum thereof has to be more clearly shown than what Pratik has been able to establish here.
Pratik's amnesia for the period immediately preceding the execution of the agreements with the occupiers may not have been faulted if it remembered to mention all that happened immediately after the five agreements. But again, there is a pattern to Pratik's application. It hops from May, 1987 to October, 1996 between paragraphs 2 and 3, skips from 1996 to 1999 between paragraphs 7 and 8 and jumps from 1999 to 2006 between paragraphs 14 and 16. In course of its hop it forgot its letter of September 6, 1988; in its skip from 1996 to 1999 it left out the memorandum of understanding of January 22, 1997; and, in its jump it missed the mention of sundry other matters that overtook the parties.
It is the memorandum of January 22, 1997 that may be the key. For it is not the same Pratik which is the applicant now as the one that signed the agreements of May 15, 1987. The company remained the same, its mind and face changed. The Jhunjhunwalla who signed the memorandum of understanding of January 22, 1997 with Pratap for developing the property through the instrumentality of JJ Griha Nirman Pvt. Limited is one of the persons behind the new Pratik as he came to be a director of Pratik in April, 1998 and in course of a year the Chamria and the Surekas of the Pratik of yore made way for one Asish Ruia, who has affirmed Pratik's present application. Ruia's loss of memory as to the previous application in pro interesse suo filed in this suit before the Howrah court in December, 1999 (it appears between pages 102 and 108 of Pratap's affidavit) may be excused, but not the failure to refer to the memorandum of understanding of January 22, 1997 which required Griha Nirman, with the Jhunjhunwalla at its helm, to pay a sum in excess of Rs.1.35 crore then to Salkia to have the property released from the mortgagee's clutches. The sundry other payments under such memorandum made for a total payout bill of Rs.2.83 crore which was a sizable improvement on what Pratik was required to expend under the May 15, 1987 agreements. And that, as Pratap suggests, may have been the reason for the flurry of activities in 1999.
Pratik's application being GA No. 2713 of 2006 fails. But that is not to say that Pratik was not or was not entitled to be in possession. It only reflects on Pratik having failed to establish, on a test of balance of probabilities in summary proceedings, that it was in possession and that it was the receiver who dispossessed it.
The plaintiff's injunction application, GA No. 2625 of 2006, calls for no further order as the receiver is in possession. Such application is disposed of without any order as to costs.
Pratik will pay costs assessed at 2000 GMs each to Salkia and Pratap and 1000 GMs to the receiver.
Urgent certified photostat copies of this judgment, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(Sanjib Banerjee, J.) Later:
Pratik prays for a stay of operation of the order which is declined.
(Sanjib Banerjee, J.)