Rajasthan High Court - Jaipur
Devi Sahai Mittal & Ors vs Sita Ram Agrawal & Ors on 14 December, 2013
Author: Bela M. Trivedi
Bench: Bela M. Trivedi
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR 1. CIVIL MISC. APPEAL NO.5086/08. DEVI SAHAI MITTAL & ORS. APPELLANTS. VS SITA RAM AGARWAL & ORS RESPONDENTS. WITH 2. SB CIVIL MISC. APPEAL NO.3056/10. RAJ. FINANCIAL CORPORATION LTD. APPELLANT. VS SITA RAM AGARWAL & ORS RESPONDENTS. DATE OF JUDGMENT : 14TH DECEMBER, 2013. HON'BLE MS. JUSTICE BELA M. TRIVEDI IN SBCMA NO. 5086/08 Mr. Ashok Mehta, senior counsel with Mr. Devendra Sharma for the appellants. Mr. A.K. Sharma, senior counsel with Mr. Rachit Sharma for the respondent No.1. Mr. Anuroop Singhi with Mr. Saurabh Jain for the respondent No.3-RFC. IN SBCMA NO. 3056/10 Mr. Anuroop Singhi with Mr. Saurabh Jain for the appellant. Mr. Ashok Mehta, senior counsel with Mr. Devendra Sharma and . Mr. A.K. Sharma, senior counsel with Mr. Rachit Sharma for the respondents. JUDGMENT BY THE COURT :
1. Both the appeals arise out of the impugned order dated 25.10.08 passed by the Addl. District Judge (Fast Track) No.3, Jaipur City, Jaipur (hereinafter referred to as 'the trial court') in the T.I. Application NO. 129/08, and, therefore were heard simultaneously and this common judgment is being passed.
2. The SBCMA No. 5086/08 has been preferred by the appellants Devi Sahai Mittal & Ors., whereas the SBCMA 3056/10 has been preferred by the appellant Rajasthan Financial Corporation Ltd. The appellants of the SBCMA No. 5086/08 are the defendant Nos. 1,2 and 4, the respondent No.1 is the plaintiff, and the respondent Nos. 2 to 4 are the defendant Nos. 5,6 and 3 respectively in the suit. For the sake of convenience the parties shown in the SBCMA No. 5086/08 shall be referred as such hereinafter. The trial court vide the impugned order dated 25.10.08 had partly allowed the T.I. Application of the respondent No.1-plaintiff and had restrained the appellants i.e. the defendants Nos. 1,2 and 4 from transferring, alienating or creating charge over the disputed premises and had restrained the respondent No.2-defendant No.5 from taking any action in respect of the disputed plot and further restraining the respondent No.3-defendant No.6, RFC from auctioning or selling the disputed plot pending the suit.
3. The short facts giving rise to the present appeal are that the respondent No.1-plaintiff has filed the suit seeking declaration, accounts, mesne profits in respect of the respondent No.4-defendant No.3 partnership firm, and cancellation of lease deed in respect of the disputed plot, against the appellants and the respondent Nos. 2 to 4 alleging interalia that the plaintiff was the proprietor of the firm called M/s. S.R. Industries and that the RIICO had allotted him a plot bearing No. E-412 at Vishwakarma Industrial Area, Jaipur admeasuring 4000 sq. meters on 25.4.72. Since the plaintiff was working in the Bank and had no financial resources to set up the industry, he had entered into a partnership with the appellant No.1-defendant No.1 Shri Devi Sahai Mittal by executing the partnership deed on 7.8.73 in the name of M/s. S.R. Industries i.e. the respondent No.4. The said partnership firm was also got registered under the Partnership Act with the Registrar of Firms. As per the said partnership deed, the defendant No.1 had 90% share and the plaintiff had 10% share in the profits of the firm. According to the respondent No.1-plaintiff, the said partnership firm was continuing and was never dissolved, however the appellant No.1 had converted the said firm into a private limited company on 14.2.94, forging the document of dissolution and showing the appellant Nos. 1 and 2 to be the Directors of the said company. As per the further case of the plaintiff, the lease deed in respect of the plot in question was transferred in the name of the said company i.e. the appellant No.3 on 29.3.94 without cancelling the previous lease deed by the respondent No.2. Since the said company had taken the loan of Rs. 29.70 lacs from the RFC, mortgaging the said disputed property and since the said company did not pay the outstanding amount of loan, the RFC had taken over possession of the said premises on 4.6.97. According to the respondent No.1-plaintiff, the respondent No.2-RIICO on 26.8.96 had illegally cancelled the lease deed originally issued in his favour and hence the plaintiff had filed an appeal before the Competent Authority under RIICO Disposal of Property Rules, 1979, which appeal was dismissed on 6.9.97. The plaintiff had challenged the said order of Competent Authority by filing the Writ Petition being SBCWP No. 3562/97, which came to be dismissed on 2.6.05. The DB Special Appeal filed against the said order of the learned Single Judge, was also dismissed on 11.1.08 on the ground of availability of alternative remedy. The plaintiff therefore had filed the suit thereafter on 3.7.08 claiming various reliefs. The respondent No.1-plaintiff had also filed an application under Order XXXIX Rule 1 and 2 of CPC seeking temporary injunction against the defendants in the suit.
4. The said application was resisted by the appellants-defendants contending interalia that the plot in question was initially allotted by the RIICO to the proprietary firm of the plaintiff namely M/s. S.R. Industries, however since the plaintiff was working in the State Bank of Bikaner & Jaipur, he had entered into the partnership with the defendant No.1 for the purpose of development of the industry by executing the partnership deed. According to the appellants-defendants, as per Clause 9 of the partnership deed, the plot allotted by the RIICO had stood transferred to the newly constituted partnership firm. Thereafter, one more partner i.e. Smt. Usha Singh was taken up in the said firm on 1.6.76 and the partnership deed was accordingly amended. It was further contended that on 25.7.76, the plaintiff had withdrawn himself from the said partnership and Smt. Usha Singh had also thereafter given notice on 23.7.79 for dissolution of the firm, and she also retired from the firm. Thereafter, the defendant No.1 took the defendant No.2 as the partner in the said firm and the said firm had made a request to the RIICO to allot additional land adjacent to the plot in question. The RIICO therefore executed a fresh lease deed for the plot No. E-142 total admeasuring 5995 sq. meters on 29.9.93. According to the appellants-defendants, subsequently the said partnership firm was converted into a company i.e. defendant No.4 which was duly incorporated under the Companies Act, with the defendant Nos. 1 and 2 as the Directors, and the said change in the constitution of the firm was also intimated to the RIICO vide the letter dated 5.3.94. The RIICO accordingly issued amended lease deed in favour of the defendant No.4 Company. It was further contended by the appellants-defendants that the RFC had sanctioned the loan in favour of the said company to the tune of Rs. 29.70 lacs on 16.5.94, however due to financial constraints, the company could not repay the loan amount and, therefore the RFC had taken the possession over the premises on 4.6.97. The appellants subsequently having repaid about Rs. 29 lacs to the RFC, the possession was restored to the appellants-defendants on 20.5.08. According to the appellants-defendants, since the huge amount was still outstanding towards the dues to the RFC, the appellants were required to sell out part of the disputed plot.
5. The respondent No.2-defendant No.5 and the respondent No.3-defendant No.6 had also filed their respective replies, resisting the T.I. Application filed by the respondent No.1-plaintiff. The trial court after hearing the learned counsels for the parties had partly allowed the said T.I. Application vide the impugned order.
6. It has been vehemently submitted by the learned senior counsel Mr. Ashok Mehta for the appellants that the respondent No.1-plaintiff had remained silent for about 20 years after having left the partnership firm in 1976 and had raised the disputes though the original lease deed executed in favour of the proprietary firm was cancelled by the RIICO. He further submitted that after the retirement of the respondent NO.1 from the partnership firm in the year 1976, the constitution of the firm was changed from time to time and the said firm was subsequently converted into the private limited company within the knowledge of the respondent NO.1. According to him the said changes were also intimated to the RIICO from time to time and the RIICO had also allotted the additional land adjacent to the plot in question by executing the fresh lease deed on 29.9.93 for the area of 5995 sq. meters. Mr. Mehta further submitted that though the suit filed by the respondent NO.1 suffered from the delay, latches and acquiescences, even as per the original partnership deed, he had only 10% share in the profits. He also submitted that the part of the disputed premises was required to be sold out to repay the outstanding dues of the RFC, for which permission was also granted by the High Court while disposing of the SBCWP No. 14348/09 filed by the appellant No.3-company.
7. However, the learned senior counsel Mr. A.K. Sharma for the respondent No.1-plaintiff submitted that there being number of triable issues involved in the suit, and the findings recorded by the trial court being not perverse, this court should not interfere with the impugned order. According to him the order passed by the RIICO cancelling the original lease deed of the respondent NO.1 being arbitrary and illegal, the same was challenged by the respondent NO.1 by filing the writ petition before this court, however since disputed questions of facts were involved in the writ petition, the court had not entertained the same. He further submitted that the RIICO had also taken actions against its concerned officers who had committed irregularities and illegalities in making allotment of additional land to the appellants, without cancelling the original lease deed executed in favour of the respondent No.1, and under the circumstances, the trial court had rightly granted the injunction in respect of the disputed plot.
8. The learned counsel Mr. Anuroop Singh for the respondent No.3-RFC, who is appellant in the other SBCMA No. 3056/10, submitted that the RFC had advanced loan to the appellant No.3-company after verifying necessary documents and more particularly the lease agreement dated 29.9.93 executed by the RIICO allotting the plot NO. E-142 admeasuring 5995 sq. meters. According to him, the said plot alongwith plant, machinery and building was mortgaged with the RFC and therefore the RFC had taken over possession of the same, on the appellants having failed to pay the outstanding dues of the RFC. Of course the said possession was restored to the appellants on 20.5.08, on the appellants having paid the principle amount, however huge outstanding amount is due towards interest amount, for which part of the disputed premises was required to be sold out. According to him the RFC should not be made to suffer for the disputes between the appellants and the respondent No.1.
9. In the instant case, it appears that the plot in question being No. E-142 admeasuring 4000 sq. meters was initially allotted by the RIICO to M/s. S.R. Industries, of which the respondent No.1 was the proprietor, on 18.4.72. However, since the respondent No.1 was serving in the SBBJ, he entered into a partnership with the appellant No.1 Devi Sahai on 7.8.73. According to the partnership deed, the appellant No.1 had 90% share and the respondent No.1 had 10% share in the profits. It further appears that the said partnership firm was reconstituted by adding new partner Smt. Usha Singh on 1.6.76. However, thereafter on 25.7.76, the respondent No.1-plaintiff allegedly retired from the said firm. According to the appellants, the appellant No.2 was added as partner and then the said partnership firm was converted into a company. The said allegations have been challenged by the respondent No.1-plaintiff in the suit. Be that as it may, the said issues would be a matter of evidence to be appreciated by the trial court at the time of trial. Nonetheless, it appears that the respondent No.1-plaintiff did not participate in the business of the said firm since 1976 to 1996 i.e. for a period of about 20 years. There is nothing on the record to suggest that he had ever taken any interest in the business of the said firm or he was paid any share in the profits of the firm during the said period. There is no explanation coming forth from the respondent No.1-plaintiff as to why he was not involved in the affairs of the partnership firm, if according to him he was continued as the partner, and if such firm was continued till the filing of the writ petition in 1997. Even if it is presumed that in the year 1996 the respondent No.1 had filed the appeal before the Competent Authority under the RIICO and the same having been dismissed, he had filed the writ petition in the year 1997 and that also having been dismissed, had preferred DB Special Appeal and that also having been dismissed had filed the suit in the year 2008, then also the respondent No.1-plaintiff had miserably failed to explain his non-participation in the business of the appellants for about 20 years. The trial court under the circumstances should not have granted the injunction in favour of the respondent No.1-plaintiff who had suddenly woken up from his slumber after 20 years. It is needless to say that the relief of injunction is an equitable relief and the delay always defeats equity. The party who slept over his rights for a number of years cannot claim equitable relief in the court of law.
10. In the opinion of the court, the respondent No.1-plaintiff having failed to establish any prima facie case in his favour, the trial court had committed a gross illegality in entertaining the T.I. Application filed by him which suffered from gross delay, laches and acquiescences on the part of the plaintiff. It is also pertinent to note that respondent No.1-plaintiff even if he succeeds in the suit had only 10% share in the profits of the firm, though the said firm prima facie had ceased to exist and was converted into private limited company long back. It is also pertinent to note that the RFC having advanced loan in favour of the said company i.e. appellant No.3, was entitled to sell part of the disputed plot which was mortgaged to it, for recovery of its dues and the trial court could not have restrained the RFC from auctioning or selling the part of the said plot merely because the respondent No.1-plaintiff had raised certain disputes with the appellants-defendants. The impugned order passed by the trial court being ex-facie illegal and perverse, the same deserves to be set aside.
11. In that view of the matter, the impugned order dated 25.10.08 is set aside. Both the appeals stand allowed accordingly.
(BELA M. TRIVEDI) J.
MRG All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.
M.R. Gidwani PS-cum-J