Gujarat High Court
Haren J Doshi vs Prataprai Gaurishanker Trivedi ... on 27 July, 2018
Author: Biren Vaishnav
Bench: Biren Vaishnav
C/SCA/8757/2008 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 8757 of 2008
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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HAREN J DOSHI
Versus
PRATAPRAI GAURISHANKER TRIVEDI (ABETED)
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Appearance:
MR ARPIT A KAPADIA(3974) for the PETITIONER(s) No. 1
MR DEVANG J JOSHI(5345) for the PETITIONER(s) No. 1
DELETED(20) for the RESPONDENT(s) No. 1,10,11,15
MR AR THACKER(888) for the RESPONDENT(s) No. 5
MR TUSHAR L SHETH(3920) for the RESPONDENT(s) No. 4,5,6,9
MS ASHA H BRAHMBHATT(6107) for the RESPONDENT(s) No. 2,3
MS VARSHA BRAHMBHATT(3145) for the RESPONDENT(s) No. 9
NOTICE SERVED BY DS(5) for the RESPONDENT(s) No. 18
RULE SERVED(64) for the RESPONDENT(s) No. 12,13,16,17,19,4,5,6,7
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CORAM: HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 27/07/2018
CAV JUDGMENT
1. The original defendant no. 11 in Regular Civil Suit No. Page 1 of 17 C/SCA/8757/2008 CAV JUDGMENT 787 of 2000 is before this Court challenging the order dated 14.05.2008 passed by the learned Additional District Judge and Presiding Officer, Fast Track Court No. 11, Rajkot. By the aforesaid order passed below Ex. 38 in Civil Misc. Appeal No. 45 of 2007, the learned Judge dismissed the application of the appellant filed under the provisions of Order 41 Rule 27 of the Code of Civil Procedure, 1908 ('the Code' for short).
2. The respondents no. 1 to 7 in this petition are the original plaintiffs and the rest of the respondents are original defendants no. 8 to 19. The original plaintiffs have filed Regular Civil Suit No. 787 of 2000 before the Court of Civil Judge, Senior Division, Rajkot against the defendants. It is the case of the plaintiffs that they along with the defendants have incorporated a partnership firm in the name and style of 'M/s. Coronation Motors' by a partnership deed dated 14.11.1985. It is their case that they have built sheds in the Madhapar Industrial Area in Plot No. 8 of Revenue Survey No.
111. That such sheds and offices are given on rent and the rent is being collected by the defendants no. 6, 9 and 10. It is the plaintiffs' grievance that the defendants partners are not giving accounts of the rents collected and are not maintaining books of accounts. That the books of accounts are in their possession and as a result of mismanagement of such accounts, they prayed for a declaration that the partnership at will be dissolved. The suit also prayed for rendering of accounts of partnership; that an inventory be made of the goods and the furniture and other belongings of the partnership and the defendant partners be restrained from selling them. The plaintiffs further prayed that the defendants be restrained from collecting rent from the Page 2 of 17 C/SCA/8757/2008 CAV JUDGMENT properties of the partnership which were let out and such rent be deposited in the Court.
2.1 The suit was filed on 29.06.2000. The defendants appeared and filed their written statements. Application Ex. 5 was filed by the plaintiffs along with one application at Ex. 79. The trial court by an order dated 01.09.2003 allowed the applications restraining the defendants from parting with the movable properties such as furniture etc. and restraining the defendants from collecting the rents with a further direction that the tenants deposit the rent of the properties let out in the trial court.
2.2 The plaintiffs, on 11.05.2006, filed an application under the provisions of Order 40 Rule 1 of the Code requesting the Court to appoint a Receiver. According to the applicants, as the orders were passed below applications Exs. 5 and 79 directing the tenants to deposit the rent in Court, though such orders were passed, the defendants were appropriating the rent collected towards their incomes and therefore in order to see that the properties are managed and the rents are collected, a Receiver be appointed. The defendants filed a reply objecting to the applications, however, the Court by its order dated 12.04.2007 allowed such application holding that it was in the interest of the partnership in order to prevent mismanagement of funds that a Receiver be appointed. The Court observed that for the property of Revenue Survey No. 111 one Shri Chandrakant N. Parekh be appointed as Receiver to collect rent from the properties let out.
2.3 The defendant no. 11 - present petitioner challenged Page 3 of 17 C/SCA/8757/2008 CAV JUDGMENT this order of the Court appointing a Receiver by filing Civil Misc. Appeal No. 45 of 2007. Such appeal was filed on 30.04.2007. During the course of the arguments in the said appeal, the appellant on 09.05.2007, by an application at Ex. 12 produced 7 documents on record. Amongst the documents so produced, were show cause notice issued by the Collector dated 12.05.1987 to the partnership firm with regard to the breach of conditions on which such land was allotted. Also on record was produced the order of the Collector appropriating the land in favour of the State as a result of such a breach of conditions. When such documents were produced, the plaintiffs during the course of arguments who were respondents in the appeal, objected to such documents being produced in the appeal when they were not part of the record before the trial court.
2.4 The defendant no. 11 - petitioner herein, therefore, preferred an application Ex. 38 on 18.12.2007 under provisions of Order 41 Rule 27 of the Code seeking permission of the Appellate Court in the Misc. Appeal to produce such documents on record. In the application so filed, it was the case of the applicants that these documents namely the show cause notice etc. issued to the partner Shri Niranjan Gaurishankar Trivedi and the proceedings thereunder came to the notice of the applicants when their advocate Shri Daftari brought such documents to their notice which were lying in their office files. Such documents were not available at the earlier point of time and having come to know of such documents which were already brought on record of the appeal at Ex. 12, the documents may be permitted to be produced as evidence in the appeal. The applicant further Page 4 of 17 C/SCA/8757/2008 CAV JUDGMENT stated that when the application Ex.12 producing such documents was filed, the original plaintiffs did not object to such an application. The documents were essential for the outcome of the issue and were therefore germane to the dispute and would suggest that no attempt was made by the partners to salvage the possession of the land. The documents, therefore, were essential and important to decide the dispute and accordingly be brought on record.
2.5 By the impugned order, the learned Appellate Court after taking into consideration, the arguments of the respective advocates rejected such application. In the opinion of the Court, the application under Order 41 Rule 27 of the Code filed to produce such documents was misconceived. Interpreting the provisions of Order 41 Rule 27 of the Code, the Appellate Court observed that when there is no order of the trial Court rejecting permission to bring such documents on record, or when it was their case that the documents were not available inspite of exercise of due diligence, such permission could not be granted. The Appellate Court further observed that when such documents were produced below Ex. 12, no such permission was sought for and only when the respondents in the appeal objected to such production, the applicant in order to fill up the lacuna made such application. Moreover, the documents which are sought to be produced could be produced before the trial Court at the stage of evidence, and when the appeal is only against the order appointing a Receiver, permission to produce such documents would delay the hearing of the appeal. The documents were available to the appellant even before the institution of the suit which were not produced and it is not his case that they Page 5 of 17 C/SCA/8757/2008 CAV JUDGMENT were not in his possession. The application on such grounds was rejected. This order is the subject matter of challenge before this Court.
3. Shri Chinmay Gandhi, learned advocate appearing on behalf of the petitioner has submitted that the order of the learned Appellate Court rejecting the application is bad. Drawing my attention to the averments made in the application, Shri Gandhi submitted that the reading of such application makes it clear that the documents which were sought to be brought on record were not within his knowledge or could not even after the exercise of due diligence be produced by him. He further submitted that by way of Ex. 12, the documents were already on record in the appeal and therefore no prejudice will be caused to the plaintiffs - respondents in appeal if such documents are brought on record.
3.1 Shri Gandhi further submitted that such documents were germane to the issue and would throw light on the fact that a partner namely one Shri Niranjan Trivedi was issued notices for breach of conditions by the Collector which could show the mismanagement at the hands of the plaintiffs. Such documents, therefore, were necessary to be brought on record which could help him in the trial Court pronouncing the judgement on the issue involved in the suit.
3.2 Shri Gandhi further contended that the observation of the learned Judge that production of such additional documents will delay the appeal is misconceived. The order, therefore, is erroneous and unsustainable and deserves to be Page 6 of 17 C/SCA/8757/2008 CAV JUDGMENT quashed and set aside.
3.3 In support of his submissions, Shri Gandhi relied on a decision in the case of Jayaramdas and Sons vs. Mirza Rafatullah Baig and Others reported in AIR 2004 SC 3685. Drawing my attention to paragraphs no. 8 & 9 of the judgement, it was submitted by Shri Gandhi that when the documents were already on record by way of Ex. 12, their formal production could not have been refused particularly when they had a material bearing on the crucial issue arising from decision between the parties. Shri Gandhi relied on another decision of the Apex Court in the case of Wadi vs. Amilal reported in JT 2002(6) SC 16 to contend that the documents which throw light on the germane issue were necessary to be produced. Reliance was also placed on a decision of the Apex Court in the case of Billa Jagan Mohan Reddy & Another vs. Billa Sanjeeva Reddy & Others reported in 1994(2) GLH 160 in support of his submission that even at the stage of arguments documents which were otherwise not in possession ought to have been permitted to be produced.
3.4 Shri Gandhi further relied on the decision of this Court rendered in the case Uttamsingh Jodhsingh Ahaluwalia vs. Jagzitkaur Giansingh Ahaluwalia and Another reported in 2008 (1) GLH 646 to contend that when it was evident that when the documents were not available even after exercising due diligence and there was substantial cause to produce the same, the Court ought to have exercised discretion in favour of the applicant since the production of such documents would Page 7 of 17 C/SCA/8757/2008 CAV JUDGMENT enable the Court not only to pronounce judgement but also would advance substantial cause. Reliance was further placed on the decision in the case of Haryana State Industrial Development Corporation vs. M/s. Cork Manufacturing Co. reported in AIR 2008 SC 56 in support of the same submission.
3.5 Mr. Gandhi also relied on yet another decision of the Apex Court in the case of Jaipur Development Authority vs. Smt. Kailashwati Devi reported in AIR 1997 SC 3243. According to him, the learned Court ought not to have rejected the application only on the ground that such evidence was not produced in the trial Court. He further relied on a decision of this Court in the case of (The) Oriental Fire and General Insurance Co. Ltd. vs. Madhuben Shanabhai and Others reported in 2007(3) GLH 7 in support of his submission that when the production of documents does not amount to reopening of the dispute and when it does not cause prejudice to the parties, in order to advance substantial cause, the documents ought to have been permitted to be brought on record.
4. Shri A.R. Thacker, learned advocate has appeared on behalf of the respondent no. 5 - one of the original plaintiffs. The only submission which Mr. Thacker made was that if the provisions of Order 41 Rule 27 of the Code are read closely, it is borne out that only in a case when an appeal arises from a decree, such production of additional evidence by way of an application is permissible. In the case on hand, the appeal is under the provisions of Order 43 of the Code, i.e. an appeal Page 8 of 17 C/SCA/8757/2008 CAV JUDGMENT pending interim proceedings and therefore, the provisions of Order 41 Rule 27 of the Code are not applicable to appeals filed against interlocutory orders. In support of this submission, Mr. Thacker has relied on a decision rendered by the Orissa High Court in the case of Pawan Kumar Bhawsinka vs. Santosh Kumar Bhawsinka and Others reported in 2005 AIHC 3612 and a decision of the Rajasthan High Court in the case of Ganpat Lal vs. Basti Ram reported in 1988(2) RajLR 27.
5. Shri Sunit Shah, learned advocate has appeared for the respondents no. 6, 7 & 9. Shri Shah has invited my attention to the provisions of Order 40 Rule 1 of the Code. According to Shri Shah, where it appears to the Court to be just and convenient, the Court may by order appoint a Receiver of any property whether before or after a decree.
5.1 Taking me to the averments made in the plaint, it was Shri Shah's contention that it was the case of the plaintiffs that the partnership at will needed to be dissolved and accordingly a declaration was sought. That the partners i.e. the plaintiffs and the defendants had lands on which sheds and offices were given on rent. It was the case of the plaintiffs that the defendants were collecting rent and not appropriating them towards the partnership. That the defendants were not maintaining proper books of accounts and that the plaintiffs did not have unhindered access to the accounts. The prayer in the suit therefore was that not only the partnership be dissolved but pending such exercise the immovable properties such as furniture and inventories be not sold and that the defendants be restrained from collecting Page 9 of 17 C/SCA/8757/2008 CAV JUDGMENT rent and such rent be deposited in the Court.
5.2 Shri Shah further pointed out that the Court had by orders below Exs. 5 and 79 granted an injunction in favour of the plaintiffs. The tenants were directed to deposit the rent in the Court in respect of the partnership properties. The defendants were restrained from collecting rent. In order to protect the property of the partnership firm pending the suit and prevention of injury to such property and to see that the rents so collected are not misappropriated, a Receiver was appointed on an application so made below Ex. 125. The Receiver was merely a rent collector.
5.3 Drawing my attention to the documents which were sought to be brought on record by the application, Shri Shah pointed out that these were show cause notices dated 12.05.1987, the order of the Collector declaring that the land be appropriated towards the State and the subsequent order regularizing the possession of land. Drawing my attention to the contents of these documents, Shri Shah contended that these documents were not entirely unknown to the applicants. The order dated 01.03.2000 which was sought to be brought on record was marked to one of the defendants namely defendant no. 9 who was the family member of the petitioner - defendant no. 11.
5.4 Shri Shah further on reading of the application below Ex. 38 submitted that from reading of paragraph 1 of the application it was evident that the appeal was filed on 30.04.2007. What is attributed to the applicant's knowledge is that it was the advocate who pointed out the existence of Page 10 of 17 C/SCA/8757/2008 CAV JUDGMENT such documents which itself is not a plausible explanation. The averments in the application suggest that the applicant had unhindered access to the files which were lying in their office. It was therefore not a case of not having found the documents in exercise of due diligence.
5.5 Shri Shah therefore submitted that the order of the Appellate Court which rejected the application was in accordance with law. The Court found that even when the application Ex. 12 was made, no permission was sought. Appeal was filed in April 2007. Ex. 12 was filed in May 2007 and suddenly after 7 months, in December 2007 did the appellants invoke the provisions of Order 41 Rule 27 of the Code.
5.6 Lastly, Shri Shah submitted that the applicant had not challenged the orders below Ex. 5 & 79. That orders had become final. The production of documents was not essential to decide the dispute of the legality of the order of appointment of the Receiver. Such documents may be relevant for the outcome of the controversy in the suit and therefore the Appellate Court has rightly observed that they could form part of evidence before the trial Court. In deciding the legality of the order below Ex. 125 such documents were not necessary.
6. Having considered the submissions of the respective parties, before deciding on the appropriateness of the order under challenge, certain dates may be relevant to be considered. The original plaintiffs - respondents herein had filed a suit for declaration of dissolution of partnership and Page 11 of 17 C/SCA/8757/2008 CAV JUDGMENT ancillary reliefs on 29.06.2000. The defendants had filed their written statements. The trial Court on an application Ex. 5 under Order 39 Rule 1 of the Code, granted an injunction as prayed for in favour of the plaintiffs on 01.09.2003. From the averments made in the application for appointment of the Receiver, it appears that initially on 28.06.2001 the Court had granted ad-interim injunction which was confirmed on 01.01.2003 by which the defendants were restrained from collecting rent and the tenants were directed to deposit the amount directly in Court. On 11.05.2006, an application was made by the plaintiff under Order 40 Rule 1 of the Code for appointment of a Receiver. After opposition from the defendants, by an order dated 12.04.2007, the Court appointed a Receiver. This order was challenged by the present petitioner by filing Civil Misc. Appeal No. 45 of 2007 on 30.04.2007. In May 2007, documents Ex. 12 were produced. The application Ex. 38 was filed on 18.12.2007.
7. The learned Judge has rejected the application under Order 41 Rule 27 of the Code. In a nutshell, what the learned Judge has observed while rejecting such application is :
(i) That it was not the case of the applicant that the documents were not available even on exercise of due diligence;
(ii) It was not the case of the applicant that the documents were produced before the trial Court and the trial Court refused production.
(iii) That even when Ex. 12 documents were produced,
no permission was sought for to produce such
documents and therefore the application was only with a Page 12 of 17 C/SCA/8757/2008 CAV JUDGMENT view to fill in the lacuna;
(iv) The suit was filed in the year 2000. The documents were existing when the suit was filed. Even then such documents were not produced before the trial Court.
However, such documents can form part of the evidence before the trial Court.
(v) That if the application is granted, the same would unnecessarily delay the hearing of the appeal.
8. The controversy between the parties is regarding settlement of accounts and relates to the dissolution of partnership. The plaintiffs and the defendants according to the case of the plaintiffs have entered into a partnership agreement. It is the case of the plaintiffs that the defendants are not rendering proper accounts of the properties let out on rent which belong to the partnership. A prayer therefore is sought for that the defendants be restrained from collecting rent and pending dissolution an injunction be granted that the defendants be restrained from collecting rent.
8.1 Ex. 5 application was allowed in favour of the plaintiffs initially by an interim order in the year 2001 and finally in the year 2003. By such orders, the tenants were directed to deposit the rent directly in Court. That order has attained finality as it is not a subject matter of challenge before the Appellate Court. Aggrieved by the continued misappropriation of rents by the defendants, the plaintiffs invoked the provisions of Order 40 of the Code and applied for an appointment of a Receiver. Reading of Order 40 of the Code makes it abundantly clear that the Court may appoint a Receiver where it appears to be just and convenient.
Page 13 of 17 C/SCA/8757/2008 CAV JUDGMENTNeedless to say that the Receiver so appointed acts purely on behalf of the Court. This order is the subject matter of a challenge in the Civil Misc. Appeal No. 45 of 2007 in which the application to lead additional evidence was made.
9. The aspect of the submission made by Shri Gandhi that the case of the applicants is covered under sub-clause (aa) of Order 41 Rule 27 of the Code, needs to be tested. When a party seeks to produce additional evidence, it has to be established that notwithstanding the exercise of due diligence such evidence was not within his knowledge or could not after the exercise of due diligence be produced by him. Reading of application Ex. 38 would indicate that the applicant attributes subsequent knowledge of these documents on the basis that he got this information from his lawyer. Paragraph no. 1 of the application also indicates that such documents were part of the files which were in his office. When such documents were located from the file, on being informed by the advocate, such documents were handed over on 09.05.2007 and they were produced below Ex. 12 of the appeal. The applicant pleads ignorance of the existence of such documents as they were not in his knowledge/possession. When the documents Ex. 12 are examined, they are notices by the Collector in the year 1987 to the plaintiff for breach of conditions pursuant to which the land was offered, an order of the Collector dated 05.01.2000 by which the allotment was cancelled and the order thereafter of 01.03.2000 in Land Appeal Case No. 373/02 by which on paying requisite premium, the possession was regularized. That order has been served on one of the defendants Shri Kartik J. Doshi, a family member of the petitioner. Therefore, it is difficult to comprehend that such Page 14 of 17 C/SCA/8757/2008 CAV JUDGMENT documents which were existing prior to the filing of the suit, were not available with the applicant - petitioner herein.
9.1 Moreover, it is difficult to digest the explanation that the petitioner came to know of such documents through the information of his lawyer. Reading of the contents of the application, therefore, would not satisfy the test of clause (aa) of Order 41 Rule 27 of the Code because it cannot be said that such documents were not available with the applicant even after exercise of due diligence.
10. On the submission of Shri Gandhi that these documents were germane to the issue, what needs to be seen is that the application was made in an appeal against an order appointing a Receiver. Therefore, in an interlocutory proceeding such an application was made. The matter at issue i.e. whether there was mismanagement at the hands of the partner was yet to be decided finally by the trial Court when the suit was to be heard. The learned Judge was therefore right in observing that such documents could form part of the evidence at the stage of trial. The legality of the order of appointing a Receiver could not materially change on the production of such documents and therefore such documents were not essential to decide the limited issue of appointing a Receiver. Admittedly, the Court in its discretion has appointed a Receiver which is the subject matter of challenge in the Appeal which is pending.
11. Even on the aspect of such an application been made to delay the hearing of the appeal, the time line of dates as referred to hereinabove would suggest that even after the Page 15 of 17 C/SCA/8757/2008 CAV JUDGMENT plaint was filed in the year 2000 and the interim order was made against them in 2003 such documents were not placed before the trial Court and it was only when an order of appointing a Receiver was made that the wisdom suddenly dawned on the petitioner in bringing these documents on record. The Receiver was appointed in order to carry out the ministerial act of collection of rent pursuant to an order below Ex. 5 which was final. The documents on record which were existing and were deemed to be in the knowledge of the petitioner cannot be said to be relevant for the decision in the appeal and the application therefore made after a period of 7 months from the date of Ex. 12 would clearly suggest that the intention of the petitioner was to delay or thwart the appointment of a Receiver. The Appellate Court therefore cannot be faulted at for observing that the pending appeal would also be delayed.
12. As far as the reliance placed by Shri Gandhi in the case of Jayaramdas and Sons (supra) is concerned, it was a case where the application under Order 41 Rule 27 of the Code was made to bring on record certified copies which were of the documents, copies of which were already on record. In the present case, it is not the case that the documents were already part of the record in the suit and therefore the ratio of the judgement so cited would not be applicable. Since I have held that the documents were not germane to the issue and not necessary for pronouncing the judgement, the decision in the case of Wadi (supra) shall also not be applicable. Having held that there was absence of due diligence on the part of the applicant petitioner and the application was made solely to delay the proceedings, the authority cited by Shri Gandhi to Page 16 of 17 C/SCA/8757/2008 CAV JUDGMENT support that granting of such application would advance substantial cause would also not be applicable.
14. Having considered the decision of the learned Appellate Court on merits, I have not gone into the question of whether an application under Order 41 Rule 27 of the Code would lie and be applicable to appeals filed against interlocutory orders and therefore that contention raised by Shri Thacker, learned advocate appearing on behalf of the respondent no. 5 is not being dealt with by this Court in the present proceeding.
15. Accordingly, I see no reason to interfere in the order passed by the Court below in rejecting application Ex. 38 filed by the petitioner. The order dated 14.05.2008 passed below Ex. 38 is therefore confirmed. Petition accordingly stands dismissed. Rule is discharged. Interim relief, if any, shall stand vacated.
(BIREN VAISHNAV, J) After the pronouncement of judgement, Mr. Gandhi, learned advocate appearing on behalf of the petitioner requests for extension of interim relief which is granted pending the petition. Mr. A.R. Thacker, learned counsel for the respondent strongly objects. In the interest of justice, interim relief granted is extended till 20.08.2018.
(BIREN VAISHNAV, J) DIVYA Page 17 of 17