Calcutta High Court
Randhir Singh Bhutoria & Anr vs Food Corporation Of India on 2 February, 2015
Author: Debangsu Basak
Bench: Debangsu Basak
C.S. No. 261 of 1999
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
Randhir Singh Bhutoria & Anr.
Vs.
Food Corporation of India
For the Plaintiffs : Mr. Sakya Sen, Advocate
Mr. Touseef Khan, Advocate
Mr. C.K. Saha, Advocate
For the Defendant : Mr. Supriyo Basu, Sr. Advocate
Mr. Kamal Kr. Chatterjee, Advocate
Mr. P.K. Banerjee, Advocate
Hearing concluded on : January 27, 2015
Judgment on : February 02, 2015
DEBANGSU BASAK, J.
The plaintiffs seek to recover arrears of rent from the defendant in this suit along with interest.
The plaintiffs are trustees of Chandmal Religious Trust. The plaintiffs being attracted by an advertisement for construction of godowns for the purpose of storage of foodgrains and fertilizers and grant of lease in respect thereof issued by the defendant, submitted quotations offering their land at Alamgunj, Burdwan. The defendant accepted such offer. Two lease agreements were entered into between the Trust and the defendant one on November 12, 1976 and the other on June 4, 1979. The said Trust constructed eight several godowns and gave the same on lease to the defendant. The defendant took possession of such godowns.
Under the lease agreements the Trust was to pay the municipal taxes. The Bengal Municipal Act, 1932 underwent amendments subsequent to deeds of lease. By reason of such amendments the defendant became liable to pay 50 per cent of the municipal tax and 100 per cent of the surcharge. The defendant however contended that it was not liable to pay the municipal tax and surcharge in spite of such amendment to the Bengal Municipal Act, 1932. The then trustees of the Trust filed two writ petitioners before this Hon'ble Court. Both the writ petitions were disposed of by one judgment and order dated June 24, 1996. The then trustees filed two appeals F.M.A.T. No. 1977 of 1996 and F.M.A.T. No. 1978 of 1996. The appeals were disposed of by a judgment and order dated April 24, 1998. The Appeal Court held, inter alia, that the defendant was liable to pay the occupier's share of the taxes and surcharges. According to the plaintiffs, in terms of the judgment and order dated April 24, 1998 they are entitled to recover a sum of Rs.27,77,866.20p. along with interest from the defendant.
The defendant is contesting the instant suit. The defendant has filed a written statement in the suit. The defendant contends that, this Hon'ble Court has no jurisdiction to try the suit. The defendant claims that the instant suit has not been properly instituted. The defendant contends that the claim of the plaintiffs is barred by the laws of limitation. The defendant, however, does not deny that it had paid the sum of Rs.27,77,866.20p. on account of the plaintiffs as municipal taxes. The defendant, however, denies that the plaintiffs are entitled to recover such sum from the defendant.
The issues in the instant suit were settled by the Order dated September 16, 2004. Eight issues were settled by such order. Two additional issues were framed by the Order dated July 19, 2012. The ten issues for trial of the instant suit are as follows:-
1. Has this Court jurisdiction to try the suit in view of the arbitral provisions in the agreement?
2. Have the plaintiffs any cause of action to the suit?
3. Is the suit barred by limitation?
4. Is the suit barred by non-joinder of necessary parties?
5. Is the lease agreement dated 4th June, 1979 still subsisting and binding upon the parties?
6. Is the defendant liable to pay the Municipal taxes and commercial surcharges?
7. Are the plaintiffs entitled to recover the claim of Rs.29,89,979.43 from the defendant?
8. To what relief or reliefs are the plaintiffs entitled?
9. Does this Court has the jurisdiction to try and entertain the suit?
10. Does the suit disclose any cause of action to have arisen outside the district of Burdwan?
The first, ninth and tenth issues relate to the jurisdiction of the Court to try the suit. These issues are, therefore, taken up first for consideration.
The first issue with regard to ouster of jurisdiction of the Court to try the suit in view of the arbitral provisions in the agreement has not been pressed at the hearing of the suit by the defendant.
In such circumstances the first issue is answered in the affirmative and in favour of the plaintiffs.
On the ninth and the tenth issues the learned Counsel for the plaintiffs contends that the defendant has its principal place of business within the jurisdiction of this Hon'ble Court. The plaintiffs also contend that one of the lease agreements was executed in Kolkata within the jurisdiction of this Hon'ble Court. In support of the contention that this Hon'ble Court has jurisdiction reliance is place on 2006 Volume 11 Supreme Court Cases page 521 (Jindal Vijayanagar Steel (JSW Steel Ltd.) v. Jindal Praxair Oxygen Co. Ltd.) and 1999 Volume 2 Supreme Court Cases page 446 (Food Corporation of India v. Evdomen Corporation).
Learned Counsel for the defendant contends that this Hon'ble Court has no jurisdiction to try the instant suit. He contends that the subject matter of the suit is recovery of rent and/or municipal taxes in respect of a property situate outside the jurisdiction of this Hon'ble Court. According to him, the suit is one for land and, therefore, the plaintiffs cannot institute the instant suit before this Hon'ble Court in Clause 12 of the Letters Patent, 1865. In support of his contention learned Counsel for the defendant relies upon two unreported judgments delivered in Award Case No. 48 of 1994 dated July 11, 1994 (Union of India v. Ocean Faith Shipping Ltd.) and Suit No. 868 of 1987 dated March 21, 1990 (Shri Gopal Shaw v. The Food Corporation of India & Anr.). He also relies upon 100 Calcutta Weekly Notes page 322 (In Re : Calpro Food (Pvt.) Ltd.) In Food Corporation of India (supra) it has been held that Sections 16, 17, 20 and 120 of the Code of Civil Procedure, 1908 do not apply to a High Court established by the Letters Patent, 1865. Under Clause 12 of the Letters Patent, 1865, a place where the defendant or each of the defendants where there are more than one, at the commencement of the suit, carry on business would be the place where the Court would have jurisdiction.
In Jindal Vijayanagar Steel (JSW Steel Ltd.) (supra) it has been held that the provisions of Clause 12 of the Letters Patent, 1865 are required to be considered to determine the jurisdiction of Bombay High Court. It further holds that under Clause 12 of the Letters Patent, 1865 the Bombay High Court would have jurisdiction to entertain and try an arbitration petition even if no cause of action had arisen within its jurisdiction, provided the respondent has an office at Mumbai.
The two Single Bench decisions cited on behalf of the defendant however do not assist the defendant. In Shri Gopal Shaw (supra) a suit for recovery of godown rent was found not to be within the jurisdiction as no part of the cause of action for such suit had arisen within the local limits of this Hon'ble Court. In Ocean Faith Shipping Ltd. (supra) the learned Single Judge followed the ratio as laid down in Shri Gopal Shaw (supra).
Calpro Food (Pvt.) Ltd. (supra) has held in a writ petition that although a part of the cause of action for the writ petition had arisen within the jurisdiction of the Court, the Court may refuse to exercise its jurisdiction keeping in view the fact that the cause of action which had arisen within the jurisdiction of this Court is a marginal one. The instant suit is not founded merely on the basis that a part of the cause of action of the suit had arisen within the jurisdiction of this Hon'ble Court. The plaintiffs invoke the jurisdiction of this Court in its ordinary original civil jurisdiction under Clause 12 of the Letters Patent, 1865 in view of the situation of the principal office of the defendant within the territorial jurisdiction of the Original Side of this Hon'ble Court.
In view of the authoritative pronouncement of the Supreme Court in Food Corporation of India (supra) and Jindal Vijayanagar Steel (JSW Steel Ltd.) (supra) a jurisdiction of a Chartered High Court is determined by the provisions of Clause 12 of the Letters Patent, 1865. By virtue of Section 120 of the Code of Civil Procedure, 1908 the provisions of Section 20 of the Code of Civil Procedure, 1908 do not apply to a Chartered High Court exercising ordinary original civil jurisdiction. Therefore, under Clause 12 of the Letters Patent, 1865 this Court would have jurisdiction over the subject matter if the defendant has an office within the ordinary original civil jurisdiction of this Hon'ble Court at the time of institution of the suit regardless of the fact that no cause of action has arisen within the original civil jurisdiction of this Hon'ble Court.
The defendant has its principal office in the State of West Bengal lying and situate with the ordinary original civil jurisdiction of this Hon'ble Court. Therefore, in terms of the Clause 12 of the Letters Patent, 1865 since the defendant indisputably has its principal place of business for the State of West Bengal lying and situate within the ordinary original civil jurisdiction of this Hon'ble Court, the ninth issue has to be answered in the affirmative and in favour of the plaintiffs.
In view of the affirmative answer given to the ninth issue, nothing would turn on the answer to the tenth issue. Even if no cause of action had arisen outside the district of Burdwan, this Court has the jurisdiction to try and entertain the suit in view of the defendant having its office within the ordinary original civil jurisdiction of this Hon'ble Court.
In any event, the witness of the plaintiffs has established that one of the lease agreements has been executed at the office of the defendant within the jurisdiction of this Court. Therefore, a part of the cause of action of the suit had arisen outside the district of Burdwan and within the jurisdiction of this Court. The tenth issue is, therefore, answered in the affirmative and in favour of the plaintiffs.
The plaint discloses a cause of action. The claim of the plaintiffs is based on unpaid rent. The quantum of rent is remained unpaid as being decided between the parties in the writ petition by the Division Bench. Such arrears have not been cleared by the defendant. The second issue is, therefore, answered in the affirmative and in favour of the plaintiffs.
On the third issue learned Counsel for the plaintiffs relies upon Sections 14 and 15 of the Limitation Act, 1963. It is submitted on behalf of the plaintiffs that, the Bengal Municipal Act, 1932 was amended in 1982. By the amendment introduced in 1982, the defendant as the lessee became liable to pay a portion of the municipal taxes and 100 per cent of the surcharges. Since the defendant had failed to comply with their statutory obligations the then trustees had filed tow writ petitions in 1986. These writ petitions ultimately resulted in the judgment and order dated April 24, 1998 being Exhibit 'F'. By the judgment and order dated April 24, 1998, the liability of the defendant to pay the plaintiffs crystallized. The Division Bench allowed the then trustees to realize the amount payable by the defendant. The defendant had filed an application for clarification of Exhibit 'F'. Exhibit 'F' was clarified by stating that the amount payable by the defendant on account of municipal rates and taxes is Rs.27,77,866.20p. Exhibit 'H' is the Order dated April 4, 2000. The instant suit has been filed in 1999 well within the period of limitation.
Learned Counsel for the defendant refers to paragraphs 14 and 15 of the plaint. He submits that, the plaintiffs could have executed the judgment and order of the Division Bench being Exhibit 'F' and Exhibit 'H'. They did not choose to do so. Therefore, the plaintiffs are not entitled to the protection of Sections 14 and 15 of the Limitation Act, 1963. The Court which had passed the judgment and order being Exhibits 'F' and 'H' did not lack any jurisdiction to pass such orders. In fact, such orders are executable.
By Exhibit 'F' the Division Bench had disposed of two appeals preferred against two orders of the Trial Court passed in two writ petitions. The then trustees of the Trust had applied under Article 226 of the Constitution of India seeking relief against the defendant with regard to the non-payment of arrears rent as well as municipal rates and surcharges. By Exhibit 'F' the Division Bench found that the defendant was statutorily liable to pay half portion of the municipal taxes and 100 per cent surcharge in view of the amendment introduced to the Bengal Municipal Act, 1932. It has also been held that such statutory liability would prevail over Clause 12 of the lease agreement. The then trustees were granted liberty to realize the amount payable by the defendant. An amount had been quantified in Exhibit 'F'. The defendant filed an application for clarification of Exhibit 'F' which is marked as Exhibit 'G'. The plaintiffs had, thereafter, filed the present suit in 1999. The clarification application of the defendant being Exhibit 'G' was disposed of by a judgment and order dated April 4, 2000. This order has been marked as Exhibit 'H'. Exhibit 'H' demonstrates that the defendant has been directed to pay Rs.27,77,866.20p.
The parties are bound by the judgment and order dated April 24, 1998 being Exhibit 'F' as modified by the judgment and order dated April 4, 2000 being Exhibit 'H'. Exhibit 'F' allows the trustees of the Trust to recover the amount quantified to be payable by the defendant to the plaintiffs. The plaintiffs as trustees of the Trust have filed the instant suit within three years of Exhibit 'F'.
Section 14 of the Limitation Act, 1963 allows a party to take benefit of the period of time during which such party was proceeding bona fide in a forum to grant the relief for lack of jurisdiction or otherwise. In the instant case, the then trustees of the Trust had moved two writ petitions complaining of non-payment by the defendant. These two writ petitions ultimately were disposed of in appeal by Exhibit 'F' as modified by Exhibit 'H'. The plaintiffs therefore were proceeding bona fide in a forum to realize their claims against the defendant. Such forum found the defendant to be liable and allowed the trustees of the Trust to initiate proceedings for recovery. The parties are bound thereby.
By Exhibit 'F' the plaintiffs were allowed by the Appeal Court to recover the amount from the defendant. The suit is pursuant to such permission. The period of time consumed from the date of filing of the writ petition till April 24, 1998 being the judgment of the Appeal Court, Exhibit 'F' therefore stands excluded. On such exclusion, the claim of the plaintiffs is within the period of limitation. In any event, the entirety of the claim of the plaintiffs is not barred by limitation even if the benefits of Sections 14 and 15 of the Limitation Act, 1963 are not available to the plaintiffs. Even in such a scenario a portion of the claim of the plaintiffs is within the period of limitation.
In such circumstance, the third issue is answered in the negative and against the defendant.
On the fourth issue learned Counsel for the defendant contends that, the Trust is not the plaintiff. Two persons claiming to be trustees have instituted the instant suit. In such circumstances, in absence of the Trust the suit is barred by non-joinder of necessary party. The Trust is a necessary party and is not the plaintiff in the suit.
Learned Counsel for the plaintiffs submits that the two plaintiffs are the present trustees. There were two trustees of the Trust at the institution of the suit. He refers to various questions and answers given by the witness of the plaintiffs in this regard.
Relying on All India Reporter 1954 Supreme Court page 5 (Gopal Krishanji Ketkar v. Mahomed Jaffar Mohamed Hussein & Anr.) he submits that, a de facto trustee can sue on behalf of the Trust. He relies upon All India Reporter 1984 Delhi page 145 (Duli Chand v. M/s. Mahabir Pershad Trilok Chand Charitable Trust, Delhi) and submits that one trustee can sue on behalf of the Trust if adequately authorised in respect thereof. The learned Counsel for the plaintiffs relies upon Order 1 Rule 9, Order 31 Rule 1 and Section 13 of the Indian Trusts Act, 1882 in support of the contention that the instant suit is not barred by non-joinder of the Trust. He refers to the cause title and submits that, the plaintiffs have claimed to be trustees of the Trust.
In Gopal Krishanji Ketkar (supra) the Supreme Court has held that a 'de facto' manager or a trustee 'de son tort' can sue on behalf of the Trust and for its benefit to recover properties and monies in the ordinary course of management.
In Duli Chand (supra) the Delhi High Court has held that a Trust is not a legal entity. All trustees in law are owners of the property. The Trust is not a corporation which has a legal existence of its own. A Trust in this sense is not a legal entity. It is the trustees which are the legal entities.
Order 1 Rule 9 of the Code of Civil Procedure, 1908 deals with misjoinder and non-joinder of parties. In my view, the objection cannot be that of a misjoinder and non-joinder of a party. It can at best be a scenario where the plaintiffs have not been properly described, an objection more akin to Order 1 Rule 10(1) of the Code of Civil Procedure, 1908. The submission of the defendant is that, the description of the plaintiffs should have been the Trust represented by or the Trust filing the suit through its trustees as natural persons and not the trustees as natural persons claiming to represent the Trust.
Appendix- A under the heading Pleadings of the Code of Civil Procedure, 1908 and subheading (1) Titles of Suits provides that a natural person should be described first and then his capacity in relation to subject matter in the cause title, that is to say, if an executor is suing on behalf of the deceased as the executor of the deceased, the name of the executor must appear first and thereafter such executor should be described as the executor of the particular deceased.
Order 31 of the Code of Civil Procedure deals with suits by or against the trustees, executors and administrators. Rule 1 of Order 31 lays down that in all suits concerning property vested in a trustee, the trustee shall represent the persons so interested and it shall not ordinarily be necessary to make them parties to the suit. However, the Court can make them parties to the suit, if it thinks fit.
The two trustees of the Trust have filed the instant suit as plaintiffs stating that they seek to represent the Trust. The plaintiffs have established that they are the trustees of the Trust. There is no evidence to the contrary on record.
The contention of the defendant that the Trust is not properly represented, although they are in the facts of this case, can be addressed in another manner. Exhibit 'F' finds the defendant liable to the Trust. Therefore, in the event the defendant pays the plaintiffs in terms of the decree passed herein, the same would constitute payment to the Trust.
I find no merit in the objection of the defendant on this point. In such circumstances, the fourth issue is answered in the negative and against the defendant.
None of the parties addressed the Court on the fifth issue. The fifth issue need not be answered.
The sixth, seventh and the eighth issues are taken up for consideration.
It is contended on behalf of the defendant that they are not liable to pay the municipal taxes and the commercial surcharges. Referring to the various clauses of the deed of lease, it is submitted that, the parties have contracted out of the statute. Payment of future municipal rates and taxes also has been agreed to be paid by the Trust. The defendant, therefore, cannot be foisted with the liability consequent to an amendment of the statute. In support of the proposition a party contracted out of the statute reliance has been placed on 1995 Volume 1 Supreme Court Cases page 560 (Juthika Mulick & Anr. v. DR Mahendra Yashwant Bal & Ors.) and 2012 Volume 5 Supreme Court Cases page 306 (Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran).
On behalf of the plaintiffs it is contended that the liability of the defendant has been decided by Exhibit 'F' as modified by Exhibit 'H'. The defendant is, therefore, liable to pay the Trust.
The defendant was a party to the proceedings in which the judgments and orders dated April 24, 1998 being Exhibit 'F' and April 4, 2000 being Exhibit 'H' were rendered. It is not open to the defendant at this stage in a suit for recovery of the claim directed to be paid by Exhibit 'F' modified by Exhibit 'H' to contend that, the parties have contracted out of a statute. In such view, the ratio of Juthika Mulick & Anr. (supra) and Rashtriya Ispat Nigam Ltd. (supra) are not attracted to the facts and circumstances of the instant case.
The sixth and seventh issues are answered in the affirmative and in favour of the plaintiffs. The plaintiffs are entitled to a decree for a sum of Rs.27,77,866.20p. against the defendant.
On the eighth issue I find that the plaintiffs have claimed interest at the rate of 8.33 per cent per annum on and from April 24, 1998. Such rate of interest being statutory and also reasonable the plaintiffs will be entitled to a decree for interest at such rate of 8.33 per cent on the sum of Rs.27,77,866.20p. on and from April 24, 1998 until realization from the defendant.
I find that the plaintiffs have paid Court-fees of Rs.10,000/-. The plaintiffs will be entitled to a decree for costs assessed at Rs.20,000/- from the defendant.
C.S. No. 261 of 1999 is decreed accordingly.
The Department is direction to draw up and complete the decree expeditiously.
[DEBANGSU BASAK, J.]