Punjab-Haryana High Court
Shri Avtar Krishan Puri, Managing ... vs Shri R.L. Sharma And Ors. on 26 July, 1994
Equivalent citations: (1994)108PLR117
JUDGMENT G.C. Garg, J.
1. M/s Devi Das Gopal Krishan limited is a Company incorporated under the Companies Act Defendants No. 2 to 7 are the Directors of the Company. The registered office of the Company is situated at Jammu. The Company has three units for extracting mustard oil from oil seeds. One unit is located at the Moga in the State of Punjab, the second is located at Bahadurgarh in the State of Haryana and the third unit is at Damtal m the State of Himachal Pradesh. The company used to sett mustard oil under the trade mark 'P'. The unit of the Company at Moga is looked after defendant No. 2 whereas the unit at Bahadurgarh is looked after by defendant No. 3 and 4 whereas defendant Nos. 5 to 7 look after the registered office of the Company at Jammu. The company had been granted a certificate of authorisation in the year 1964 for selling mustard oil manufactured by it under the provisions of the Agricultural Produce (Grading and Marking) Act, 1937 and the Rules framed thereunder. The Company had been authorised to use Agmark label or Agmark replica on the packages made by it and thereby it was authorised to sell mustard oil with the trade mark 'P' having a replica or label of Agmark. This certificate of authorisation is renewed from time to time and is valid even today. The Rules provide that the Company must have a trained. Chemist duly approved by the competent authority of the Central Government to supervise Agmark grading before the product is labelled by a label or replica of Agmark. Shri. R.L. Sharma, plaintiff in this case had been duly trained and approved by the Central Government to work as Chemist in the manufacturing unit of the company, namely, M/s. Devi Dass Gopal Krishan located at Moga. Services of Shri R.L. Sharma cannot be terminated by the Company without prior approval of the Agricultural Marketing Advisor or any other Officer authorised by the Central Government nor can his resignation be accepted except by the Central Government It is the duty of the approved Chemist that he shall strictly follow the instructions issued for inspection, sampling, analysis, packing, making and sealing of articles and to maintain the grading record in the prescribed manner to ensure timely submission of specified periodical returns. He is also responsible for the safe custody and proper accounting of Agmark labels and Agmark replicas etc. The Chemist is also a nominee of the Company under the Prevention of Food Adulteration Act and is thus, criminally liable if the products are sold by the Company without Agmark label or the products are of impure quality.
2. Plaintiff, Shri R.L. Sharma, the Chemist working in the manufacturing unit of the Company at Moga, filed a suit in the civil court at Moga against the Company and its Directors alleging that it came to his notice that some of the defendants were resorting to mal-practices and selling oil packages with the trade mark of 'P' only and without having Agmark label or Agmark replica on them, without his knowledge and thereby causing loss to the Government of India and in violation of the Rules. This act of the defendants is putting the plaintiff in danger of being criminally prosecuted. Along with the plaint, the plaintiff also filed an application under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure restraining the defendants from selling or packing for sale mustard oil having 'P' trade mark without Agmark replica/label.
3. The trial court at Moga to whom the suit was assigned for disposal rejected the plaint under Order 7 Rule 11 of the Code as in the opinion of the trial Judge, necessary parties had not been impleaded as defendants and notice under Section 80 of the Code had not been issued before the institution of the suit. As a consequence, the application for temporary injunction was also dismissed by order dated January 24,1994.
4. The plaintiff, feeling aggrieved by the order of the trial court, filed appeal before the learned District Judge. He also filed an application for grant of temporary injunction, along with the appeal, making the same prayer as was made before the trial court.
5. Learned District Judge entertained the appeal and granted temporary injunction by his order dated January 29,1994, which injunction is continuing till today. The matter remained pending before the learned District Judge for some time and injunction was not vacated though such a prayer had been made by the present petitioner, who were respondents before the District Judge. The appeal was ultimately heard and allowed by order dated March 26, 1994. Learned District Judge came to the conclusion that the suit was not such which could be thrown out at the out set and that the trial court should not have been in a hurry to throw the plaint. It should have summoned the defendants, called upon them to file written statement and if felt necessary, should have framed a preliminary issue and then rendered decision thereon, whether the plaint was or was not liable to be rejected in terms of Order 7 Rule 11 of the Code. Before coming to this conclusion, learned District Judge noticed various contentions of the learned counsel for the parties but expressed no opinion thereon, and perhaps rightly, as the expression of such opinion might have prejudiced the mind of the trial court to whom the case was remanded for disposal. While disposing of the appeal, learned District Judge restrained the respondents therein, from sealing or packing for sale mustard oil having 'P' trade mark without Agmark replica/label till further orders. It was observed that the said order will lapse the moment an order contrary to this was passed by the trial court after taking written statement. reply to application for grant of temporary injunction and hearing the parties on the merits of the application. The trial court to whom the suit had been entrusted for disposal was directed to decide the injunction matter by fixing day to day hearing and at any rate, by April 15, 1994. The trial Judge was left free to take any view which may seen to him reasonable, just' and proper in view of exigencies of the case and the facts placed before hint. In view of the order passed by the learned District Judge, the suit is now pending in the court of learned Subordinate Judge at Moga for disposal, including the application for grant of temporary injunction.
6. Petitioners, who are defendants 5 to 7 in the suit and are incharge of the head office of the Company at Jammu, feeling aggrieved by the order dated March 26, 1994 passed by learned District Judge have filed the present revision petition.
7. Learned counsel for the petitioners, who are the. only contesting defendants in the suit, vehemently argued that the plaintiff; who is only a Chemist in one of the units of the Company, had no locus standi to file the Suit and the suit does not disclose any cause of action. It was submitted that the plaintiff purposely did not implead Union of India as a party to the suit and gave wrong address of the defendant-Company so as to invoke the jurisdiction of the civil court at Moga. Learned counsel for the petitioners further submitted that learned District Judge granted ad interim injunction on January 29, 1994, without even recording that the plaintiff was likely to suffer injury in case the ad interim in- ¦ junction was not granted. Learned District Judge allowed the injunction to continue till the disposal of the appeal despite an application moved by the , petitioners for vacation of the same. Learned counsel went on to argue that even at the time of disposal of the appeal, injunction was allowed to continue, till the disposal of injunction application by the trial court without reference to any fact . on record which could justify the continuation thereof. Learned counsel in support of his submission referred to Shiv Kumar Chadha v. Municipal Corporation of Delhi and Ors., Judgment Today 1993 (3) S.C. 238 to highlight that a duty was cast on the court to record reasons while granting injunction without notice to the opposite party and that the non-compliance of the requirement of proviso to Rule 3 of Order 39 of the Code vitiates the order. Learned counsel also referred to Section 41(j) of the Specific Relief Act to highlight (hat the injunction could not be granted as the plaintiff had no personal interest.
8. Reference was also made to Court on its own motion v. State of Haryana, (1990-2) 98 P.L.R. 14 and Morgan Stanely Mutual Fund v. Kartick Das, Judgment Today 1994(3) S.C. 654.
9. Shri H.L. Sibal, Senior Advocate, learned counsel appearing on behalf of defendants 2 to 4, the Directors of the Company, other than the petitioners took the stand that the injunction had been rightly granted by the learned District Judge after noticing all the contentions that were raised before him and this Court also did not grant any stay while admitting the revision petition. Learned counsel submitted that injunction has continued for few months and when the matter is before the trial court for its consideration on the application under Order 39 Rules 1 and 2 of the Code, this Court should refrain from interfering, and expressing any opinion., Learned counsel for the respondents highlighted that if the District Judge had expressed any opinion on the principles governing the grant of temporary injunction, the very purpose of asking the trial court to decide the injunction application on its merits would have been frustrated as the trial Court would have felt bound by that opinion.
10. Mr. H.L. Sibal, on being pointedly asked if he had a right to be heard to support the order granting injunction in favour of the plaintiff, did not refer to any rule or law in that behalf. His submissions have, however, been noticed as these were also pressed into service by Mr. Patwalia, learned counsel appearing for the plaintiff-respondent.
11. Mr. Patwalia, in addition to adopting the arguments of Mr. Sibal submitted that the Union of India was not impleaded as a party to the suit as it was neither a necessary nor a proper party and that the plaintiff had a cause of action as the acts of defendants 5 to 7 have rendered him liable for prosecution under the Prevention of Food Adulteration Act and that it was his duty as a Chemist under the General Grading Marketing Rules, 1988 to ensure compliance of the conditions of certificate of Agmark granted to the Company under the provisions of Agricultural Produce (Grading and Marketing) Act, 1937. Learned counsel highlighted that prosecution has already been launched against the plaintiff because of the acts of defendant Nos. 5 to 7 inasmuch as oil with trade mark 'P' was sold without Agmark replica. Mr. Patwalia in support of his submissions placed reliance on Fertilizer Corporation Kamagar Union (Regd.) Sindri and Ors. v. Union of India and Ors., A.I.R. 1981 S.C. 344 and M/s. Punj Laloyd Pvt. Lid. v. V.P. Punj, 1994(2) All India Land Laws Reporter 82.
12. As regards the finding of the learned District Judge that the trial court acted in haste in rejecting the plaint under Order 7 Rule 11 of the Code and that it ought to have decided the matter after taking written statement from the defendants where all objections including that of territorial jurisdiction, locus standi of the plaintiff to file suit and mis-joinder and non-joinder of parties could be taken and thereafter considered the matter either by framing a preliminary issue or otherwise, learned counsel for the petitioners could not lay a serious challenge. The trial court was directed to dispose of the suit according to law and after taking note of the observations made in the order. I have not been able to persuade myself to modify or vary this part of the order. The defendants have already filed written statements wherein all possible objections have been taken. The trial court will thus, consider these matters according to law and dispose of the suit either under Order 7 Rule 11 of the Code or on the merits of the controversy raised in the suit.
13. Petitioners were proceeded ex parte before the trial court. They had moved an application for setting aside ex parte proceedings. This application is pending final disposal. Learned counsel for the respondents herein, i.e. the plain- tiff and defendants 2 to 4 have no objection to the ex parte order being set aside by allowing the application. In this situation, application for setting aside the ex parte order is allowed. Ex parte proceedings against the petitioners are set aside. This course has been adopted with a view to avoid delay in the disposal of the application under Order 39 Rules 1 and 2 of the Code now pending decision before the trial court.
14. Learned District Judge while granting ex parte temporary injunction on January 29, 1994 on an application filed by the plaintiff-appellant did not record any reason whatsoever in support of grant of the order. Various contentions were raised before the learned District Judge including the one that the plaintiff had no locus standi to file the suit. Learned District Judge has neither recorded a finding on the point of locus standi of the plaintiff nor discussed the principles governing the grant of temporary injunction before continuing the injunction till the disposal of the application by the trial court. The Supreme Court in Shiv Kumar Chadha's case (supra) has observed that when statute itself required reasons to be recorded, the court cannot ignore that requirement by saying that if reasons are recorded, it may amount to expression of opinion in favour of the plaintiff before hearing the defendants. Learned District Judge did not consider the prayer for vacation of injunction order passed on, January 29, 1994 despite the fact that the defendant-petitioners had applied for vacation of the same. Not only this, interim injunction passed was allowed to operate even after the disposal of the appeal and till such time an application moved by the plaintiff is disposed of by the trial court on its own merits. While doing so, again no reason was recorded for continuing the injunction beyond the period. of appeal. However, it is apparent from the order that the learned District Judge allowed the injunction to continue as it had directed the trial court to dispose of the injunction matter latest by April 15, 1994. Despite this direction, the trial court has not been able to dispose of the application for interim injunction till today and the matter is now stated to be listed for hearing on August 2,1994.
15. In the peculiar facts and circumstances of this case, I am of the view that no useful purpose would be served at this stage by expressing any opinion one way or the other on the controversy involved herein. In my view, the ends of justice would be met if the trial court is directed to dispose of the injunction matter on the date already fixed in the suit or within a day or two thereof. If for any reason, the plaintiff or the defendants other than the petitioners delay the disposal of injunction matter as aforesaid, the injunction already granted shall stand vacated, otherwise it would continue till the disposal of the injunction application by the trial court. It is, however, made clear that the trial court will dispose of the injunction matter on its own merits after having regard to various principles governing the grant of temporary injunction and also the question of locus standi of the plaintiff to file the suit or such other matters that the trial court may deem fit. The trial court will not have regard to any observation whatsoever, made by the learned District Judge in his order dated March 26,1994 or by this Court in this order. The revision stands disposed of with the directions and observations made above. The parties through their counsel have been directed to appear before the trial court on July 29, 1994. Copy of this order be given dasti to the counsel for the parties on payment of usual charges. No costs.