Calcutta High Court
Dr. Prabir Kumar Pal & Another vs Dr. Dilip Choudhury & Others on 22 August, 2017
Equivalent citations: AIR 2018 (NOC) 169 (CAL.)
Author: Biswanath Somadder
Bench: Biswanath Somadder
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
Original Side
Present :
THE HON'BLE MR. JUSTICE BISWANATH SOMADDER
AND
THE HON'BLE MR. JUSTICE SANKAR ACHARYYA
APDT 24 OF 2016
(GA 2655 of 2016)
Dr. Prabir Kumar Pal & Another ..... Appellants
Vs.
Dr. Dilip Choudhury & Others ..... Respondents
with APDT 29 OF 2016 (GA 2759 of 2016) Dr. Santanu Tathagata Pal ..... Appellant Vs. Dr. Dilip Choudhury & Others ..... Respondents with APDT 38 OF 2016 Dr. Sanjukta Ray (Pal) ..... Appellant Vs. Dr. Dilip Choudhury & Others ....... Respondents All arising out of G.A. No. 202 of 2016 C.S No. 23 of 2015 For the Appellant : Mr. Ranjan Bachawat, Senior Advocate, with Mr. S. Sengupta Mr. Syamantak Banerjee Mr. Sarosij Dasgupta Mrs. Subhra Das, Advocates in APDT 24 of 2016 Mr. Pratap Chatterjee, Senior Advocate, with Mr. Suman Dutt Mr. Saunavo Basu, Advocates in APDT 29 of 2016 Mr. Ranjan Bachawat, Senior Advocate, with Mr. S. Sengupta Mrs. Subhra Das, Advocates in APDT 38 of 2016 For the Respondents : Mr. Syama Prosad Sarkar, Senior Advocate, with Mr. Ashok Kr. Awasthi Mr. Aishwarya Kr. Awasthi Mr. Adil Rashid, Advocates for the respondent no.1 Mr. Ramesh Sharma Mr. Sourav Kr. Mukherjee Mr. B. C. Dhara Mr. Debdeep Sinha, Advocates for respondent no.8 in APDT 24 of 2016 and respondent no.9 in APDT 29 of 2016 and APDT 38 of 2016.
Heard on : 22.09.2016, 28.09.2016, 21.11.2016, 05.12.2016, 08.12.2016, 15.12.2016, 19.12.2016, 10.01.2017, 11.01.2017, 25.01.2017, 08.02.2017, 14.02.2017, 23.02.2017, 01.03.2017, 02.03.2017, 15.03.2017, 22.03.2017, 29.03.2017, 10.04.2017, 12.04.2017, 19.04.2017, 03.05.2017, 15.05.2017, 14.06.2017, 21.06.2017, 03.07.2017, 05.07.2017, 07.08.2017 & 08.08.2017.
Judgement on : 22.08.2017 The Court :
A judgement dated 26th July, 2016 on admission and decree drawn up thereon, in respect of a Commercial Suit, being C.S. 23 of 2015, passed by a learned Single Judge of this High Court in G.A. 202 of 2016 has been challenged in all these three appeals.
Respondent no. 1 in each of these three appeals is the plaintiff in C.S. 23 of 2015. In that suit, respondent no.1 / plaintiff filed G.A. no. 202 of 2016 for passing of a decree on admission in his favour.
As per the cause title of the plaint of C.S. 23 of 2015, the defendant no. 1 is a company, defendant nos. 2 to 6 are private individuals, defendant no. 7 is a Trust, defendant no. 8 is a company and defendant no. 9 is a registered society. Among the said defendants, defendant no. 2 is the appellant in APDT 29 of 2016, defendant nos. 3 and 4 are appellant nos. 1 and 2 respectively in APDT 24 of 2016 and defendant no. 5 is the appellant in APDT 38 of 2016. Respondent no.1 / plaintiff prayed for a decree for Rs.4,76,35,178/- against defendants nos. 1 to 8 and other reliefs. Respondent no.1 / plaintiff, however, did not pray for any relief against defendant no. 9.
According to averments made in the plaint, defendant no. 2 is a director of defendant nos. 1 and 8. Defendant nos. 5 and 6 are also directors of defendant no. 1. Defendant nos. 3 and 4 are parents of defendant no. 2. Defendant no. 1 company was under
the control of defendant nos. 2 to 6. Defendant no. 9 used to run two medical institutions. Said institutions were facing financial and other difficulties. Defendant no. 2 representing himself and defendant nos. 1, 3, 4, 5, 6 and 8 approached the respondent no.1 / plaintiff and apprised the said respondent no.1 / plaintiff about the problems faced by the two institutions. In order to overcome such problems, a memorandum of understanding was entered into by and between defendant nos. 8 and 9 on 21st August, 2012. The defendant no. 8 agreed to assume liability for some outstanding loan of defendant no. 9 and agreed to pay Rs.40 lac in instalments by 15th October, 2012. To fulfil that commitment, defendant no. 7 / Trust was created on 6th September, 2012. In that Trust, the defendant nos. 2, 4, 6, the respondent no.1 / plaintiff and few others were appointed as trustees. Then, on representation by defendant no. 2, the respondent no.1 / plaintiff agreed to pay Rs.12.50 crores to defendant nos. 1 to 8 by 30th October, 2012 in consideration of 25% share in the management of defendant no. 9 in respect of the two institutions. Respondent no.1 / plaintiff paid Rs.2,01,00,000/- in cash on 25.08.2012 to defendant no. 1 through defendant no. 2 against receipt and respondent no.1 / plaintiff caused transfer of fund of Rs.1,31,00,000/- to the defendant no. 1 through the bankers on 28.08.2012. The respondent no.1 / plaintiff, accordingly, paid Rs.3,32,00,000/- for transferring to defendant no. 9 by defendant nos. 1 to 8 but they neglected to discharge their liability for which the defendant no. 9 terminated the agreement. Consequently, the respondent no.1 / plaintiff did not make further contribution in terms of agreement for his payment of Rs.12.50 crore and could not acquire 25% share in the management of two institutions. Fixing liability on defendant nos. 1 to 8 for breach of contract, the respondent no.1 / plaintiff filed the suit for recovery of Rs.3,32,00,000/- with damages as they failed and neglected to refund respondent no.1 / plaintiff's claimed amount of Rs,3,32,00,000/-. The plaint was verified on 28.01.2015.
In the impugned judgement, the learned Single Judge has been pleased to pass a decree in favour of the respondent no.1 / plaintiff and against defendant nos. 1 to 5 and 7 for a sum of Rs.1,68,00,000/- together with interest thereon at the rate of 9% per annum from December 27, 2012 till the date of payment with the observation, "Though there is no admission as to the interest either in the agreement of December 27, 2012 or in the pleadings or submission, but such interest has been awarded to compensate the respondent no.1 / plaintiff for the loss of value of the money". In the impugned judgement relating to respondent no.1 / plaintiff's claim of further sum of Rs.1,64,00,000/-, the findings of the learned Single Judge is that the defendant nos. 1 to 5 and 7 should also deposit with the Registrar, Original Side, a sum of Rs.1.64 crore together with interest thereon at the rate of 9% per annum from December 27, 2012 till date of such deposit, which ought to be made within a fortnight from date of the order; in default whereof, there will be a decree for such amount and such interest in favour of the plaintiff and against the same defendants.
In substance, the learned Single Judge passed decree on admission for Rs.1,68,00,000/- with interest in favour of respondent no.1 / plaintiff while conditional leave to defend the suit in favour of defendants was granted subject to their securing respondent no.1 / plaintiff's further claim of Rs.1,64,00,000/- by depositing it with interest at the rate of 9% per annum with the learned Registrar, Original Side, within a certain time-frame.
In the Original Side Rules of this High Court there is no special provision for passing a decree on admission. Applicability of general procedural law under Rule 6 of Order XII of the Code of Civil Procedure, 1908 is not excluded under the provisions of Order XLIX Rule 3 of the Code. Rule 6 of Order XII, therefore, is set out hereunder :-
"6. Judgment on admissions. - (1)Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions.
(2) Whenever a judgment is pronounced under sub-rule (1), a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced."
'Admission' has been defined in section 17 of the Evidence Act as :-
"17. Admission defined. - An admission is a statement, oral or documentary or contained in electronic form, which suggests any inference as to any fact in issue or relevant fact, and which is made by any of the persons, and under the circumstances, hereinafter mentioned".
Reading the said provisions simultaneously, it can be said that a judgement on admission is a process of expeditious disposal of a civil litigation in a summary manner avoiding the rigours of prolonged procedures required to be adopted under the general civil laws. For adopting such a summary procedure, the Court must be convinced that there is no controversy between the parties to a suit on the subject matter for which a judgement on admission shall be passed. Such admission must be express, transparent, unambiguous, unconditional, unequivocal, free from any contingency and made by a competent person shouldering the liability to satisfy the demand of the plaintiff.
In a commercial suit, a simplicitor admission of a transaction only may not be sufficient enough to fasten an admission of liability of the defendant. Unless there is a clear unequivocal admission of liability by a defendant, a judgement on admission against him is not proper.
Admission by a person representing another person is an exception to general rule of admission. In a representative character, a person can make admission of liability of an another person only when the representative is specially empowered and expressly authorised for making an admission lawfully on behalf of another.
In the impugned judgement at page 3, the learned Single Judge has been pleased to observe -
"The plaintiff refers to the agreement of December 27, 2012 by which the second defendant as the Chairman of the seventh defendant Trust promised that the Trust "will be refunding back the said amount of Dr. Dilip Chowdhury's contribution i.e Rs.3.32 corers (sic. crore) with mutual settlement henceforth". There is no dispute, at least none has been raised on behalf of the second and seventh defendants, that the seventh defendant Trust was liable to pay the sum of Rs.3.32 crore to the plaintiff .....................".
In our opinion, in the backdrop of such claim of the respondent no.1 / plaintiff, clear satisfaction was required to be arrived at by the Court that the defendant no. 2 was duly authorised for making admission of any liability on behalf of defendant no. 7 Trust by all the trustees including respondent no.1 / plaintiff, his wife and two sons and that the purported admission made in the document dated December 27, 2012 is sufficient enough to consider the admission as free from doubt.
As per the deed of Trust dated 6th September, 2012, whereby the Trust (being defendant no. 7) was formed, there are thirteen trustees including respondent no.1 / plaintiff and his wife and two sons, defendant no. 2 and his mother defendant no. 4, defendant no. 6 and six others. Among the thirteen members of the Trust, the respondent no.1 / plaintiff and defendant nos. 2, 4 and 6 are parties to the suits. Other nine trustees have not been made parties. Defendant no. 2 is the Settlor of the Trust. By that deed, the defendant no. 2 has been appointed as Chairman and the respondent no.1 / plaintiff has been appointed as Vice-Chairman of the Trust. Among the trustees, Joydev Samanta, Mr. Murali P. Nair and Mr. Joydeep Karmakar have been appointed as Treasurer, Secretary and Joint Secretary, respectively, of the Trust. As per the said deed, all the trustees shall hold office till their lifetime. Power of the Board of Trustees and the trustees has been specified. Learned senior counsel for the appellants / defendants argued that in a suit against a Trust, all trustees must be made parties, which has not been done in the instant case.
In APDT 24 of 2016, appellant no.1 / defendant no. 3 has claimed that he is neither a trustee of defendant no. 7 of the suit nor is he a director or shareholder of defendant no. 1 of the suit. Both the appellants / defendant nos. 3 and 4 have claimed that they are not involved with any transaction between respondent no.1 / plaintiff, defendant no. 2 and defendant no. 7, as alleged by respondent no.1 / plaintiff and that there was no admission of the appellants / defendant nos. 3 and 4 in the suit. Appellant / defendant no.5 in APDT 38 of 2016 has denied her alleged admission to the claim made in the suit. Appellant / defendant no.2 in APDT 29 of 2016 denied alleged admission to the claim of respondent no. 1 / plaintiff in the document dated 27th December, 2012. He has appealed for looking at the document dated 27th December, 2012 as a whole.
Having gone through the materials on record, we do not find any document whereby the defendant no. 2 was duly authorised by all the trustees delegating their power for making admission on behalf of the Trust for shouldering financial liability. There is no document on record to show that the appellant no.1 / defendant no.3 of APDT 24 of 2016 is any how connected with any financial transaction between respondent no.1 / plaintiff and other defendants of the suit. There is also no document to show that the appellant / defendant no.5 of APDT 38 of 2016 is any how connected with defendant no. 7 Trust. Facts may be proved by oral and/or documentary evidence and in the absence of cogent document, respondent no.1 / plaintiff may prove his case by oral evidence in accordance with law, which is possible only in case of a full-fledged trial. In the impugned judgement, the learned Single Judge has been pleased to heavily rely upon a document dated December 27, 2012 to consider it as an admission of the defendants. The said document in its entirety is set out hereunder:-
"As per the agreement dated 12th September 2012 between Smt. Reena Pal Educational Trust and ICARE Society, Smt. Reena Pal Educational Trust was committed to pay Rs.50 cores(sic. crore) to ICARE Society by 30th October 2012. Dr. Dilip Chowdhury and his two sons Mr. Aninda Chowdhary & Mr. Anupam Chowdhary, are holding three trustee members out of eleven, acquiring more than 25% equity share of the Smt. Reena Pal Educational Trust. Dr. Dilip Chowdhary was supposed to pay at least Rs.12.5 corers (sic. crore) by 30th October, 2012. He failed to keep his contribution and phase wise paid Rs.2 corers (sic. crore) 1 lac in cash and Rs. 1 corers (sic. crore) 31 lacs through RTGS to Pratishruti Projects Ltd through Dr. Santanu T. Pal, Chairman & Managing Director which is a Public Limited Company and registered under Ministry of Corporate Affairs, Govt. of India. Dr. Santanu T. Pal is also the Chairman, Principal Executive Officer & Settlor of Smt. Reena Pal Educational Trust.
For the failure of the commitment made by Dr. Dilip Chowdhary and family, we, the trustee members of Smt. Reena Pal Educational trust could not fulfill our commitment towards ICARE Society. In spite of his uneagerness to cooperate, Dr. Dilip Chowdhary showing his unwillingness to be a part of the trust in future. Doing so he wanted to realize his given amount, with couple of meetings between D. Santanu T. Pal (Chairman), Mr. Murali P. Nair & Dr. Dilip Chowdhary (Vice Chairman) mutually agreed on this matter.
We are, Smt. Reena Pal Educational Trust now have to get and equally sound Investor to proxy his vacancy to need the demand and overcome the financial crisis. As long as, we don't get a support of such a contributor rather investor. It seems very difficult to take care of Dr. Dilip Chowdhary's amount of Rs.12.5 corers (sic. crore) at the cost of taking 25% Equity Share of the Trust to overcome the financial crisis, will be refunding back the said amount of Dr. Dilip Chowdhary's contribution i.e Rs.3.32 corers (sic. crore) with mutual settlement henceforth".
This document was unilaterally signed by Dr. Santanu T. Pal as the Chairman of Smt. Reena Pal Educational Trust on December 27, 2012. In this document, failure of respondent no.1 / plaintiff to give effect to his commitment has been alleged for which defendant no. 7 could not fulfil its commitment towards defendant no. 9. It is the reason provided for execution of the said document of mutual agreement. That apart, the undertaking for refund of Rs.3,32,00,000/- to the respondent no.1 / plaintiff appears to be contingent as per apparent construction of the document. Real purport of the document, if otherwise, definitely requires to be proved in a trial. In the said document, number of trustees has been mentioned as eleven instead of thirteen, which appears in the deed of Trust dated 6th September, 2012. Apparently, defendant no. 2 represented eleven trustees including himself and respondent no.1 / plaintiff in that document. The remaining two trustees were not represented. As such, their admission is also a question for determination in trial since the document excludes the two.
In our considered opinion, the said document is not adequate for passing of a judgement on admission without going for trial. That apart, appellant / defendant no. 3 of APDT 24 of 2016 apparently is not found linked or connected with any transaction between respondent no.1 / plaintiff and any other defendant of the suit in respect of respondent no.1 / plaintiff's claim. As such, passing of a judgement and decree on admission against him is highly prejudicial even when it is undisputed that he is the father of the defendant no.2. His independent financial interest or liability cannot merge with his son. On that ground only, the impugned judgement with decree on admission is liable to be set aside. Learned counsel for the appellants / defendant nos. 3 and 4 argued that respondent no. 1 / plaintiff filed the suit against a Trust, being defendant no. 7 and others, but out of the thirteen trustees, only four including the respondent no.1 / plaintiff are parties in the suit. Since the Trust has not been represented by all the trustees, the suit against the Trust is not maintainable and consequently, the impugned judgement and decree passed against defendant no. 7 is bad in law.
Learned counsel for the respondent no. 1 / plaintiff has argued that the defendant no. 7 in the suit was duly represented as per the doctrine of substantial representation. This is purely a debatable issue which is required to be decided before arriving at any decision about the liability of defendant no. 7 Trust, if any. In the impugned judgement, such issue has not been clearly decided. On that score also, the impugned judgement and decree passed upon adopting a summary procedure cannot be upheld.
At the time of hearing this appeal, learned senior counsel for the respondent no. 1 / plaintiff cited decisions of this High Court reported in AIR 1944 Cal 328 (2), AIR 1918 Cal 971, AIR 1926 Cal 705 and AIR 1921 Cal 584 in support of his arguments in favour of judgement on admission. None of the said citations has discussed any summary judgement on admission. As such, in these appeals against a summary judgement, ratio of those citations is not applicable. Learned senior counsel for the respondent no. 1 / plaintiff has also relied upon a decision of a Hon'ble Division Bench of Madras High Court in Dr. K. Padmanabhan and another-versus-W.S. Nisha reported in 2002-3-L.W.118 relating to a judgement on admission under Order XII Rule 6 of the Code of Civil Procedure. The said judgement relates to admission of the defendant undertaking payment through post dated cheques which he handed over to the Bailiff of Madras High Court but subsequently the cheques were dishonoured. The fact scenario in that case was not at all similar to the present suit. Therefore, the ratio of that judgement is not applicable here. Regarding ambiguity in the construction of a document, there is a finding of the Hon'ble Supreme Court in The Godhra Electricity Co. Ltd. and another-versus-The State of Gujarat and another reported in AIR 1975 SC 32, which has been cited by learned senior counsel for the respondent no.1 / plaintiff. In the present suit, the vital question is whether defendant no. 2 was vested with authority to make admission of liability on behalf of the other defendants. Without recording oral evidence, adjudication on such question on a summary basis is not proper. As such, the said reported decision also does not fortify the impugned judgement. Learned senior counsel for the respondent no. 1 / plaintiff has also cited a decision reported in (1981) 3 All England Law Reports 577 and another decision of the Supreme Court of India reported in (2005) 1 SCC 172. Both citations also do not improve the position of the respondent no. 1 / plaintiff in these three appeals.
In the light of our observations made in the foregoing paragraphs, the impugned judgement with decree on admission is liable to be set aside and is accordingly set aside. G.A. No. 202 of 2016 filed in C.S. 23 of 2015 for judgement and decree on admission is dismissed with the observation that it is not a fit case for passing of a judgement on admission. C.S. 23 of 2015 shall be placed by the department before the learned Single Judge having determination for its disposal in accordance with the general provisions of law. It is made clear that the observations made in this judgement will not stand in the way of disposal of the suit independently on its own merit by the learned Single Judge. The three appeals are disposed of accordingly. There will be no order as to costs.
Urgent photostat certified copy of this judgement and order, if applied for, be supplied to the parties on priority basis.
(SANKAR ACHARYYA, J.) (BISWANATH SOMADDER, J.)