Calcutta High Court (Appellete Side)
Fertiliser Corporation Of India ... vs Indian Explosive Private Limited & Anr on 30 March, 2016
Author: Jyotirmay Bhattacharya
Bench: Jyotirmay Bhattacharya
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLAE SIDE
Present:
The Hon'ble Justice Jyotirmay Bhattacharya
AND
The Hon'ble Justice Ishan Chandra Das
F.A. 417 of 2009
With
CAN 5056 of 2009,
CAN 2253 of 2016,
CAN 2168 of 2016
And
CAN 2169 of 2016
Fertiliser Corporation of India Limited
Versus
Indian Explosive Private Limited & Anr.
For the Appellant : Mr. Saptangsu Basu, Adv.
: Mr. Biswarup Bhattacharya, Adv.,
: Mr. Anil Dhar, Adv.,
: Mr. Somnath Roy, Adv.
For the Respondent No.1 : Mr. Aniruddha Chatterjee, Adv.,
: Mr. S. Nag, Adv.
: Mr. A. Hussain, Adv.,
: Mr. S. Chakraborty, adv.
Heard on : 10.03.2016
Judgement on : 30th March, 2016
Jyotirmay Bhattacharya, J.: -
This first appeal is directed against the judgment and decree dated 3rd March, 2009 passed on admission by the learned Civil Judge (Senior Division) 1st Court at Alipore in Title Suit No.46 of 2006 at the instance of the defendant/appellant.
We will have to assess the correctness of the impugned judgment and decree in the light of the provision contained in Order 12 Rule 6 of the Civil Procedure Code. The provision contained in Order 12 Rule 6 of the Civil Procedure Code is much more comprehensive than the provision contained in Order 12 Rule 1 of CPC. Though it is true that the jurisdiction to pass a decree on admission under Order 12 Rule 6 of the Civil Procedure code is discretionary and the Court may in suitable circumstances, refuse to grant a decree on admission in favour of the plaintiff. However, the Court cannot refuse to grant a decree on admission when the admission of the plaint case made by the defendant is clear, unambiguous and explicit. Such admission can be gathered either from the pleading of the parties or from any other sources i.e. documentary evidence or oral evidence of the parties. As a matter of fact, use of the expression "otherwise" in Order 12 Rule 6 of the Civil Procedure Code is very much significant as by use of such expression "otherwise" jurisdiction of this Court to pass a decree on admission is not restricted only to the admission made by the defendant in his pleading.
The original provision contained in Order 12 Rule 6 of the Civil Procedure Code was amended in 1976 for the purpose of shortening litigation and to give speedy relief to the deserving party and as such the scope and/or ambit of this provision cannot be narrowed down by giving any interpretation to the said provision which is not in consonance with the object of such amendment.
Keeping in view the provision of Order 12 Rule 6 of the Civil Procedure Code and the scope and ambit of its operation we will have to consider as to whether the learned Trial Judge was justified in passing a decree in the facts of the present case. For proper appreciation of the legality of the impugned judgment let us now give a short background of this litigation.
The plaintiff/respondent filed a suit for declaration that the claim of the plaintiff on account of refund of advance of Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two) is a secured claim and the plaintiff is entitled to be treated as a secured creditor of the defendant No. 1 for all purposes in respect of the said advance of Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two) with an alternative prayer for passing a decree for declaration that the defendant No.1 is holding the sum of Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two) entrusted for and on behalf of the plaintiff and a decree for a sum of Rs.5,27,62,236/-(Rupees five crorores twenty seven lakhs sixty two thousand two hundred thirty six) in favour of the plaintiff and against the defendant and a decree for interest amongst other incidental reliefs. Those reliefs were claimed by the plaintiff on the basis of the following cause of action pleaded in the plaint:-
The plaintiff company is a manufacturer of explosive. For manufacture of explosive, the plaintiff has to procure raw materials from various sources. Ammonium nitrate which is the principal raw material for the manufacture of explosive was/is generally procured from the Public Sector Fertilizer Companies. The defendant No. 1 was the principal supplier of such raw material to the plaintiff. When the defendant No.1 company failed to supply such raw material to the plaintiff because of the financial crisis it was suffering in its business, a tripartite deal and/or agreement was entered into amongst the plaintiff, defendant No.1 and the defendant No.2. By the said tripartite agreement it was agreed between the parties that the price of the coal which would be supplied by the defendant No.2 to the defendant No.1 company will be paid by the plaintiff to the defendant No.2 and the defendant No.1, in its turn would supply to the plaintiff melt ammonium nitrate and the defendant No.l will adjust receivable amount from the plaintiff company for the price of ammonium nitrate melt supplied by it against the amount payable by it to the defendant No.2 against the coal, purchased by the defendant No.1 from the defendant No.2. Though the said arrangement was continuing between the parties for some time but the said arrangement ultimately had to be discontinued as the defendant No.1 faced difficulties in continuing its production due to break down of synchronize gas compressor and other financial problem. Under this circumstances, the parties again negotiated to help the plaintiff company financially so that the defendant No.1 company can restart and continue its operation with the financial help to be given by the plaintiff. In the process of helping the defendant No.1 to restart and continue its operation, the plaintiff had advanced huge amount of money to the defendant No.2 for and on behalf of the defendant No.1. In consonance with the aforesaid arrangement and acting upon undertaking of the defendant No.1 to supply the said raw materials to the plaintiff, a sum of Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two)was paid by the plaintiff to the defendant No.2 but the defendant No.1 failed to resume its supply of raw materials to the plaintiff and thus the said sum of Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two) still remains unrecovered and unadjusted from the defendant No.1 company which received the supply of coal from the defendant No.2 against the advance received from the plaintiff. By a letter written by the plaintiff on 23rd April, 2002, the plaintiff requested the defendant No.1 for refund of the said advance of Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two). The defendant No.1 duly received the said letter and in reply thereto the defendant No.1 in its letter dated 29th April, 2002 addressed to the plaintiff admitted its liability unequivocally and categorically for refund of the said sum of Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two). Ultimately defendant No.1 company went into BIFR and it was declared as a sick company. The BIFR had recommended winding up of the company under the provision of Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. But ultimately such recommendation was not accepted by the Hon'ble Delhi High Court which by its order dated 26th November, 2002 remanded the matter to BIFR for its reconsideration of having of the Jodhpur Mining Unit of the defendant No.1 company as a separate entity and also consider hiving of other units, including Sindri unit of the defendant No.1, company in case proposals in this regard were received by BIFR within a reasonable period of time.
While considering the case of the defendant No.1, BIFR did not take into account the dues of the plaintiff from the defendant No.1 on account of refund of advance of Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two) along with interest and further since the defendant No.1 failed to discharge its liability to pay the said dues to the plaintiff even though it admitted its liability to the plaintiff, the instant suit was filed by the plaintiff.
The Defendant No.1 appeared in the said suit and filed written statement by making evasive denial of the plaint case. Though the said defendant denied that its cash flow was critical and strain as alleged but execution of the tripartite agreement between the plaintiff and the defendant No.1 and the defendant No.2 was not denied by the defendant. Though liability to refund the plaintiff's claimed amount was denied by the defendant evasively but payment of the aforesaid amount by the plaintiff to the defendant No.2 on behalf of the defendant No.1 for supply of coal by the defendant No.2 to the defendant no.1 was not categorically denied by the said defendant. Neither the receipt of the demand notice sent by the plaintiff to the defendant No.1 on 23rd April, 2002 was denied by the defendant nor the defendant denied sending of its letter dated 29th April, 2002 to the plaintiff and thereby admitted its liability for refund of the said sum of Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two) to the plaintiff. Reference of the defendant No.1 company to BIFR and declaration of its sickness by the BIFR and the subsequent proceeding arising there from before the Hon'ble High Court at Delhi were not denied by the defendant No.1 specifically in its written statement.
In these set of facts, the plaintiff company filed an application under Order 12 Rule 6 of the Code of Civil Procedure inviting the learned Trial Judge to pass a decree on admission in favour of the plaintiff. The defendant No.1 contested the said application by filing written objection without making any attempt to explain away the admission which was made by the said defendant in its letter dated 29th April, 2002 regarding mentioning of its unpaid dues amounting to Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two) in its books of account and/or its liability to refund the said amount to the plaintiff as the said defendant failed to supply ammonia nitrate melt of equal value to the plaintiff.
When in these set of facts, the learned Trial Judge passed a decree on admission in favour of the plaintiff, we do not find any justifiable reason to interfere with such judgment and/or decree passed by the learned Trial Judge on admission by relying upon the judgment citied by Mr. Saptangsu Basu the learned Senior Counsel, appearing for the defendant No.1/appellant wherein it was held that passing of a decree on admission under Order 12 Rule 6 of the Civil Procedure Code is not mandatory and the Court in it discretion may refuse to pass a decree on admission when the party which makes certain admission of the plaintiff's claim successfully explained away its admission and prove that its admission is not clear and unambiguous or it requires trial on evidence for passing a decree in favour of the plaintiff. The decisions which were cited by Mr.Saptangsu Basu, learned Senior Counsel are mentioned hereunder.
1. In the case of Mr. Uttam Singh Dugal & Company Ltd. Vs. Union Bank of India and Ors. Reported in AIR 2000 SCC 2740;
2. In the case of Karam Kapahi & Ors. Vs. Lal Chand Public Charitable Trust & Anr.
Reported in (2010)4 SCC 753;
3. In the case of Geo-Group Communications Inc Vs. Iol Broadband Ltd. Reported in (2010)1 SCC 562;
4. In the case of S.M Asif Vs. Virender Kumar Bajaj (2015) SCC 287.
5. In the case of Rakesh Wadhawan & Ors. Vs. Jagadamba Industrial Corporation & Ors. Reported in (2002) 5 SCC 440.
Relying upon those decisions of the Hon'ble Supreme Court Mr. Saptangsu Basu, learned Senior Counsel, appearing for the appellant submits that admission is nothing but a piece of evidence and no Court, according to him, can pass a decree on admission, without offering defendant an opportunity to explain away its admission in course of trial of the suit. He thus, invites us to set aside the judgment and decree, as according to him, such decree was passed by the learned Trial Judge on admission without giving the defendant No.1/appellant a reasonable opportunity to explain away the admission allegedly made by it, in its letter dated 29th April, 2002.
Let us now consider as to how far such contention of Mr. Basu can be accepted in the facts of the instant case.
We have already recorded the scope, ambit and sphere of operation of the provision contained in Order 12 Rule 6 of the Civil Procedure Code hereinabove. It was uniformly held in all those decisions citied at the bar that Order 12 Rule 6 of the Civil Procedure Code was amended in the year 1976 and the amended provision makes it clear that passing of the decree on admission by the Court is not mandatory as the Court in suitable circumstances may refuse to pass a decree on admission when admission is not clear and unambiguous or where admission was otherwise explained away by the party making such admission. We have already mentioned above the admission which was made by the defendant No.1 about its liability to refund the claim amount of the plaintiff in its pleading as well as in the letter written by it on 29th April, 2002 in reply to the letter written by the plaintiff to the defendant No.1 on 23rd April, 2002. Though the defendant No.1 got ample opportunity to explain away its admission in its written statement filed in the suit and/or in the objection filed by it against the plaintiff's application under Order 12, Rule 6 of the Civil Procedure Code but the defendant No.1/appellant failed to do so. On the contrary, if we consider the pleadings of the said defendant made by it, in it written statement as well as in the written objection coupled with the letters exchanged between them as referred to above, we have no hesitation to hold that the defendant failed to explain away its admission about its liability to refund the advance money amounting to Rs.4,20,41,622/- (Rupees four crores twenty lakhs forty one thousand six hundred twenty two) which the plaintiff paid to the defendant No.2 in discharge of its financial liability towards the defendant No.2 on account of supply of coal by the defendant No.2 to the defendant No.1. When on plain reading of the pleadings of the parties it appears that the defendant No.1 failed to dispute its liability to refund the said amount to the plaintiff and/or failed to explain away its admission made in its letter dated 29th April, 2002 we have no hesitation to hold that if, the learned Trial Court in such circumstances would have refused to pass a decree on admission in favour of the plaintiff then injustice would have been caused to the plaintiff. The defendant having failed to raise any issue in the suit which was required to be tried on evidence, the learned Trial Judge in our considered view was justified in passing a decree on admission in the facts of the present case.
Under such circumstances, we hold that the instant First Appeal deserves no merit for consideration.
Hence we dispose of this appeal and affirm the findings of the learned Trial Judge which he has recorded in the impugned judgment for passing a decree on admission in favour of the plaintiff with this rider that the interest rate to be paid on the decretal amount is reduced to 9% from 12% in modification of the decree passed by the learned Trial Judge.
The appeal thus, disposed of with the above modification.
We however, make it clear that the money which has already been deposited by the appellant before the learned Executing Court in pursuance of the order passed by this Court in this appeal may be withdrawn by the respondent No.1/ decree holder immediately upon compliance of the necessary formalities therefor.
Before parting with we like to mention here that having regard to the order passed by the Hon'ble Supreme Court on 26th November, 2015 in an SLP (c) No.5642- 5643/2016 arising out of an interlocutory order passed by this Court we suspend the execution of the decree for recovery of the balance part of the decretal amount till 26th August, 2016 and if in the mean time defendant No.1 failed to liquidate the decretal amount in terms of the modified decree of the trial Court, the decree of the learned Trial Judge with the above modification will become automatically executable on and from 27th August, 2016 and under such circumstances the learned Executing Court will be free to execute the said decree in accordance with law.
Let the Lower Court records, if already arrived, be sent down to the Court below immediately.
Urgent photostat certified copy of this order, if applied for, be given to the parties as expeditiously as possible.
(Jyotirmay Bhattacharya, J) I agree (Ishan Chandra Das, J)