Bombay High Court
Shree Raj Shrushti Residency Pvt. Ltd vs Romesh Sharma And Ors on 28 November, 2023
Author: Abhay Ahuja
Bench: Abhay Ahuja
2023:BHC-AS:35600
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 5010 OF 2022
WITH
INTERIM APPLICATION NO. 4298 OF 2023
IN
WRIT PETITION NO. 5010 OF 2022
Shree Raj Shrushti Residency Private Ltd.
A private limited company, duly incorporated
under the Indian Companies Act, 1956, having
its Registered office at Block No.1, Ground Floor,
Navyug Sagar, 183, Walkeshwar Road,
Mumbai-400 006. ... Petitioner/Applicant
Vs.
1. Shri Romesh Sharma of
Bombay Indian Inhabitant residing
At Sant Sadan Bungalow No. 10,
Union Park, Khar-Pali Hills,
Bombay-400 052.
And plot of admeasuring about
438.70 sq. Meters situated at
Ghandhigram Road, Juhu, Mumbai-400 049.
2. M/s Ramnarain Sons Pvt. Ltd.
A Company incorporated under
the Companies Act, 1956 and
having its Registered office at
State Bank of India Annex Building,
Bank Street, Fort, Bombay-400 023.
3. M/s Jayems Engineering Co. Pvt. Ltd.
a Company incorporated under the
Companies Act, 1956 and having its office at
Great Western Building, 1st Floor, 130/132,
Shahid Bhagat Singh Road, Mumbai-400 023.
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4. Expired
5. Mrs. Gayatri Vinay Parekh
having address at 14-15, D. I'LL Plazo,
Little Gibbs Road, Malabar Hill,
Mumbai-400 006.
6. Vasantrai Chhaganlal Dave
both of Bombay, Indian Inhabitants
having their office at C/o. Jaymes Engineering Ltd.
Great Western Building, 1st Floor, 130132,
Shahid Bhagat Singh Road, Mumbai-400 023 ... Respondents.
Mr. Zal Andhyarujina, Senior Advocate with Mr. Shrey Sancheti, Mr. J. A.
Khan and Mr. Bipin Joshi for Applicant/Petitioner.
Mr. G. S. Godbole, Senior Advocate with Mr. R. L. Gonsalves i/b Ms Eventa
Gonsalves for Respondents.
CORAM : ABHAY AHUJA J.
RESERVED ON : 25TH JULY, 2023
PRONOUNCED ON: 28TH NOVEMBER, 2023
JUDGMENT:
-
1. The Petitioner has filed the above Writ Petition under Article 227 of
the Constitution of India assailing the order of the Appellate Court dated
30th March, 2022, passed in Appeal No. 23 of 2022 in Exhibit No. 279 in
RAE & R Suit No. 54/176 of 1994 before the Small Causes Court, Bandra,
(the "said suit") allowing the Appeal of the original Defendant No.2.
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2. The Petitioner as the original Plaintiff has earlier filed the said suit
for eviction against the Respondents/Original Defendants in respect of suit
premises being sub plot no. 3 of Plot No. A-2, CS No. 164/2 of Vile Parle
Division along with shack and structure at Gandhigram Road, Juhu,
Mumbai-400 049 (the "said premises/suit premises/ the said property"),
admeasuring about 438.70 sq. meters, on the grounds of illegal
subletting, arrears of rent and bona fide requirement.
3. The suit was resisted by the Respondents/Original Defendants by
filing their written statement and additional written statement. The suit
was taken up for evidence. The Petitioner filed their affidavit of evidence
along with documents. The documents were, according to the Petitioner,
marked by the Trial Court and kept for cross-examination of PW-2.
4. It is the case of the Petitioner that on 4 th March, 2010 a Power of
Attorney ("first Power of Attorney") was executed by Respondent No.1 in
favour of Harish Chandar Mishra as Respondent No.1 was in judicial
custody inter alia granting Harish Chandar Mishra physical possession of
the said property and to represent the donor of the power before any
official authorities of any State/Central Government or local body, which
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may be connected and/or concerned with the suit property in any manner
and to make any statement, applications, affidavits, undertakings, etc. on
behalf of the donor in his name in respect of the said property and to deal
with all matters.
5. During the pendency of the suit, the Petitioner took out an interim
application being Exhibit No. 236 for injunction and other reliefs. The said
exhibit came up for hearing on 20th January, 2021. The Trial Court granted
an order of status-quo on 20th January, 2021, which was continued and
the application under Exhibit 236 was made absolute on 24 th September,
2021.
6. On 20th January, 2021, the learned Single Judge of the Small
Causes Court (the "Trial Court") granted status-quo till filing of the reply
in Exhibit No. 236 in the following terms :-
"In the interest of justice Both Parties Are Directed To Maintain
Status-Quo Till Filing Of Reply By Deft no.2."
7. Thereafter, on 10th February, 2021, the learned Single Judge of the
Small Causes Court adjourned the matter for reply till 22 nd February, 2021.
On 22nd February, 2021, the Single Judge passed a direction under Exhibit
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No.236 inter alia stating "Reply not filed keep for arguments. Adjourned
for Hrg. in 236". On 9th March, 2021, Respondent No.1 filed an
application being Exhibit No. 252 for setting aside the "No Reply" order
dated 22nd February, 2021. On 7th April, 2021, the Single Judge extended
the order of status-quo till the decision was passed under Exhibit No.236
i.e. the status-quo application in the following terms:-
" In The Interest of Justice Order Below Ex. 236 Is Extended
Till Decision of Ex.236 on Merit"
8. On 26 July, 2021, the Single Judge allowed the Respondents to file
a reply setting aside the No Reply order, subject to costs of Rs.2,000/- as
under :-
"App Is Allowed Sub. To Cost Of Rs.2000/-. To Be Paid To Plff
On or Before 09-08-2021"
9. On 9th August, 2021, reply was filed to the status-quo application
viz. Exhibit No. 236, which was taken on record as Exhibit No. 265 on 2 nd
September, 2021.
10. A Power of Attorney dated 2 nd September, 2021 ("Second Power of
Attorney"), came to be executed by Respondent No.1 in favour of Mr.
Taizun Nisar Hassonjee, inter alia to have physical possession of the said
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property and to represent any Office/Authorities of the State/Central
Government or local body, which may be connected and / or concerned
with the said property, in any manner whatsoever, and to make any
statement, application, undertaking, etc. and on behalf of the donor and
in his name in respect of the Suit Property or to deal with all matters. The
said Power of Attorney also stated that the averments/contents in the said
irrevocable Power of Attorney have been explained in vernacular language
and after admitting it as correct the same had been signed. Clauses 1 and
9 of the said Power of Attorney are usefully quoted as under:-
"1. To have physical possession of my "said property" and to
represent me before any office/authorities of my state/Central
Govt. or local body which may be connected and / or concerned
with the "said property" in any manner whatsoever and to make
any statement, applications, affidavits, undertakings, etc and on
my behalf and to my name in respect of our said property or to
deal with all matters.
9. That the averments/contents this irrevocable Power of
Attorney have been read over and explained in my vernacular
language and after admitting it as correct have signed the same.
AND whereas I hereby agree to ratify and confirm all and
whatever other acts may said Attorney shall lawfully do execute
or perform or cause to be done, executed or performed in
connection with the said property under and by virtue of the
deed not withstanding no express powers in that behalf is
hereunder provided"
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11. On 24th September, 2021, an order was passed under Exhibit No.
236 inter alia granting temporary injunction from dispossessing or altering
the suit property, which is usefully quoted as under :-
"22. Plaintiff no.2 has prima facie pointed out that it has right
to preserve the suit premises till decision of the suit. Plaintiff
no.2 has also pointed out that Defendant no.2 has from time to
time made additions and alterations of permanent nature in the
suit premises since beginning, so it has right to preserve the suit
premises, being landlord. Thus, Plaintiff no.2 has shown that it
has prima facie, balance of convenience, lies in its favour as
well as it will suffer irreparable loss. If Defendant no.2 is not
restrained. Therefore, considering all these aspects, I answer
Point No.1 to 3 in the affirmative."
12. It is the case of the Petitioner that by execution of Power of Attorney
dated 2nd September, 2021 by the Respondent No.1 in favour of Taizun
Nisar Hassonjee, the order of status-quo dated 20 th January, 2021 was
violated. Mr. Andhyarujina, learned Senior Counsel for the Petitioner/
Original Plaintiff No. 2, would submit that as there was contravention of
the status-quo order dated 20th January, 2021, passed below Exhibit No.
236, which was later extended till decision of Exhibit No. 236 on 7 th April,
2021 and allowed on 24th September, 2021, Petitioner was constrained to
take out Exhibit No. 279 for striking off defence of the
Respondent/original Defendant No.2. The said application viz. Exhibit No.
279 was resisted by the Respondent by filing Affidavit in reply to which
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rejoinder was filed by the Petitioner. Paragraph 7 of the Respondent's reply
is usefully quoted as under:-
"7. With reference to paragraph 6: it is true that, the Defendant
No.2, has executed Power of Attorney dated 2.9.2021. I crave
leave to refer to and rely upon the said Power of Attorney,
when produced. I say that, in the month of September, 2021, I
was unavailable to act, as the Constituted Attorney of the
Defendant No.2 on account of my personal commitments. The
defendant No.2 was required to challenge the order dated
25.8.2021 passed on Application Exhibit 259, by filing Revision
Application, before the Hon'ble Appellate Bench of this Hon'ble
Court. Since the said Revision Application was to be filed,
expeditiously, and as I was not available, and the defendant
no.2 was not able to personally attend to the filing of the said
application, he executed Power of Attorney, in favour of Mr.
Taizun Nisar Hassonjee, with identical powers as to have been
conferred upon me, under the earlier Power of Attorney,
Interpretation of paragraph No.1 of the said Power of Attorney,
dated 2.9.2021, which is reproduced in paragraph No.6 of the
Application is a complete sinister, false, misleading and
misconceived, interpretations of power. The Plaintiffs are well
aware that, the Defendant No.2 has to regularly stay at Delhi
and is not able to come to Mumbai frequently. It is, therefore,
necessary to permit his respective Constituted Attorneys,
including myself to have physical possession of the suit
premises and we have the keys of the suit premises, not as a
matter of right but, for the protection and safeguarding of the
suit premises. The said Constituted Attorneys are not claiming
any rights whatsoever in respect of the suit premises and are
holding the suit premises, for and on behalf of the Defendant
No.2 as his agents, only for the purpose of protecting the suit
premises."
(emphasis supplied)
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13. On 20th January, 2022, the Small Causes Court inter alia struck off
the defence of Respondent No.1 i.e. the written statement and additional
written statement filed by Respondent No.1, under Order 39 Rule 11 of
the Civil Procedure Code, 1908, interalia for the following reasons:-
"19. In this background, question requires consideration is
whether Defendant no.2 has committed breach of order or not?
It is a matter of record that status quo order has been passed
on 20/01/2021 in presence of both the parties and therefore
Application (Exh 236) is decided on 24/09/2021 on merit after
hearing both sides, Defendant no.2 has clearly stated in clause
no.1 of second POA executed on 24/08/2021 and
registered/notarized on 02/09/2021, that Taizun Nisar
Hassonjee is placed in physical possession of the suit premises.
Therefore, as per Section 91 of the Indian Evidence, Act, 1872,
documentary evidence, excludes oral statement as regards,
contents in written documents are concerned. Thus, it is clear
that Defendant no.2 fully knowing that status order dated
20/01/2021 is in existence, still he placed Taizun Nisar
Hassonjee in physical possession of the suit premises. This
activity amounts to willful default and breach of status quo
order.
20. Learned advocate for Defendant no.2 submitted that
order dated 24/09/2021 below Application (Exh.236) is
challenged before Hon'ble Appellate Bench, Small Causes
Court in Appeal No.174 of 2021. This aspect is totally different
because what is required to see is that whether at relevant time
either party commits breach or contravene order of the Court.
As discussed above, the plaintiffs have satisfactorily pointed
out that defend No.2 has committed breach of order dated
20/01/2021, which is confirmed on 24/09/2021. Therefore,
defence of defend no.2 is liable to be struck out as per
provisions of Order XXXIX Rule 11 of the C.P. C. Hence,
considering all these aspects, I answer point number one in the
affirmative."
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14. Being aggrieved by the order dated 20 th January, 2022, the
Respondents filed an Appeal No. 23 of 2022 challenging the same inter
alia on the following grounds:-
"(E) The Learned Trial Judge ought not to have taken
cognizance of the false, misleading, misconceived, interpretation
of the 2nd Power of Attorney by the Appellant.
(L) The Learned Trial Judge erred in not appreciating the
statement made by the department in the affidavit in reply that
neither of the Constitution returnees are claiming any rights
whatsoever, in respect of the suit premises, or any part.
(M) The Learned Trial Judge Heard in not taking due
cognizance of the statement, made in the affidavit in reply, that
the Constituted Attorneys were permitted to have physical
possession of the suit premises, and to have the keys of the suit
premises, not as a matter of right, but for protecting and
safeguarding the suit premises.
(R) The Learned Trial Judge erred, in not appreciating the
solemn statement of the Deponent. That the defendant No.2,
has not conferred any rights to the constitute attorneys under
the said Power of Attorney.
(X) The Learned Trial Judge erred in not appreciating that the
provisions of Order 39 Rule 11 are applicable in Maharashtra is
directory and not mandatory and hence the Learned Trial Judge
ought not to have used her discretion against the
Appellant/Defendant No.2 in light of the facts of this case."
15. On 30th March, 2022, the Appellate Court allowed the appeal and
set aside the order of striking off defence inter alia holding that there was
no order of status-quo on 2nd September, 2021 and moreover by execution
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of Power of Attorney dated 2 nd September, 2021, the Defendant No. 2 had
not transferred any right, title and interest in the suit property and
therefore, the question of striking off defence of Defendant No. 2 did not
arise and that the Trial Court had erred in coming to the conclusion that
by executing the Power of Attorney, the Defendant No. 2 had given
possession of the suit premises to Mr. Taizun Nisar Hassonjee in
contravention of the order of status-quo and thereby setting aside the
order of the Trial Judge, striking off the defence.
16. It is against this appellate order that the Petitioner has filed the Writ
Petition for the following relief :-
(b) That this Hon'ble Court be pleased to call for the records
and proceedings of Appeal No. 23 of 2022 in Exhibit No. 279 in
RAE & R Suit No. 54/176 of 1994, CR No. 41, Small Causes
Court, Bandra Branch, Mumbai and after going through the
propriety, tenability and legality thereof be further pleased to set
aside and or quash the impugned the Judgment and order dt.
30/3/2022 passed in Appeal No. 23 of 2022 in Exhibit No. 279
in RAE & R Suit No. 54/176 of 1994, CR No. 41, Small Causes
Court, Bandra Branch, Mumbai"
and pending the hearing and final disposal of the Writ Petition the
Petitioners have filed the Interim Application for deposit of the Power of
Attorney dated 2nd September, 2021 in this Court and that the Respondent
No. 1 and/or his agents be restrained from acting upon the Power of
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Attorney dated 2nd September, 2021 in any manner whatsoever and for
Court Receiver and Public Caution Notice in respect of the suit property.
17. I have heard the learned Senior Counsel for the parties and
considered the rival contentions.
18. Mr. Andhyarujina, firstly takes this Court through the array of
parties and submits that the Petitioner herein is Shri Raj Shrusti Residency
Pvt. Ltd. who is the owner of the said premises. The Petitioner had filed
the said eviction suit No. RAE & R Suit No. 54/176 in the Small Causes
Court at Bandra against one Romesh Sharma. It is submitted that the said
Romesh Sharma is an illegal occupant on the suit property, who acquired
possession of the suit property from Respondents No.4 and 5 vide Leave
and License Agreement dated 1st March, 1986. Thereafter by an
Agreement of Sale dated 24th May, 1986. Ms. Ramnarain Sons Pvt. Ltd.
viz. the Original Plaintiff No.1 and Original owner of the Suit property,
who vide by Deed of Assignment dated 29 th September, 2014 assigned the
suit property to the Petitioner. The suit has also been filed against the
Respondent No.3-Ms. Jayems Engineering Company Private Limited, who
was the original tenant of the suit property through its Proprietor Kimatral
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Khushalani, who passed away on 22nd June, 1969. The petition is also filed
against Respondent No.4, who had been deleted as she had expired. The
Respondent No.5 is Mrs. Gayatri Vinay Parekh and Respondent No.6 is
Vasantrai Chhaganlal Dave, who is the executor and trustee of Kimatral
Khushalani i.e. Respondent No.3 - proprietors' estate vide Will dated 15 th
May, 1969.
19. Learned Senior Counsel for the Petitioner, would submit that the
Petitioner is not only seeking setting aside of the Appellate Court's order
but also a stay on the Power of Attorney on 24 th August, 2021 executed by
the Respondent No.1 in favour of Mr. Taizun Nisar Hassonjee and
registered/notarized on 2nd September, 2021, on the ground that the same
is in violation of the order of status-quo dated 20 th of January, 2021 passed
by the Trial Court.
20. Mr. Andhyarujina, would submit that the basis for taking out the
application for striking off the defence is the Power of Attorney dated 2 nd
September, 2021 referred to in Exhibit No. 279. Learned Senior Counsel
would submit that a plain reading of the Power of Attorney and
particularly clauses no. 1 and 9 indicate that Mr. Taizun Nisar Hassonjee
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has been granted possession of the said property and that the Power of
Attorney is an irrevocable Power of Attorney and the deponent has agreed
to ratify the acts referred to in the Power of Attorney as well as not
referred in the Power of Attorney. Learned Senior Counsel has drawn the
attention of this Court to the Clauses 1 and 9 in the said Power of
Attorney. It is submitted that the conduct of the Respondent no. 1 is
required to be taken into consideration. The modus operandi of
Respondent No.1 suggests that the Respondent No.1 is delaying the
matter, despite the suit being expedited by this Court. That under the
pretext of the Power of Attorney, the Respondent No.1 is attempting to
deal with the suit property with a view to create complications in the
matter. Mr. Andhyarujina, would submit that judicial notice of the contents
of the Power of Attorney is required to be taken.
21. Mr. Andhyarujina, would further submit that it is wrong on the part
of the Appellate Court to say that there was no order of status-quo on 2 nd
September, 2021. That the Appellate Court has failed to consider the
provisions of Order 39 Rule 11. Learned Senior Counsel refers to
paragraphs 18 and 19 of the order dated 20 th January, 2022 of the Trial
Court striking off the defence of the Defendants and submits that there is
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a clear finding of willful default of the status-quo order. Learned Senior
Counsel submits that the same has been fully considered and an order has
been passed on the point, whereas the Appellate Court has failed to
consider the same. Mr. Andhyarujina, relies upon the Division Bench
decision of this Court in the case of Tejram Gulab Hazare and Ors Vs.
State of Maharashtra and Ors.1 to submit that the expression status-quo
implies the existing state of things at any given point of time. Learned
Senior Counsel would submit that it is obvious that the status-quo cannot
mean anything else except the status-quo as existing when the order was
passed. It implies that the situation as on the date of the order is to be
preserved.
22. Learned Senior Counsel submits that this view was earlier
propounded by the Hon'ble Supreme Court in the case of Messrs Bharat
Coking Coal Limited Vs. State of Bihar and Ors. 2 Learned Senior Counsel
would submit that the proper course for the Defendants would have been
to approach the Court, if there was any doubt, before executing the Power
of Attorney dated 2nd September, 2021. That like the Hon'ble Supreme
Court in the case of Messrs Bharat Coking Coal Limited Vs. State of Bihar
1 2010 (6) Mh. L. J.
2 1987 (Supp) SCC 394
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and Ors. (supra), this Court should deprecate the conduct of the
Respondent No.1 of executing the Power of Attorney dated 2 nd September,
2021 in favour of Mr. Taizun Nisar Hassonjee inter alia granting him
physical possession of the suit property, despite the status-quo order.
23. Learned Senior Counsel submits that the grantor of the Power of the
Attorney as well as the grantee are not having clean antecedents. From the
events which have happened since the date of Power of Attorney, it is
apparent that the Respondent No.1 is contemplating to deal with, dispose
of and create third party rights on the basis of the Power of Attorney.
Learned Senior Counsel would submit that the Trial Court had already
passed an order maintaining status-quo against the Respondent No.1, but
with a view to wriggle out of the said order the Respondent No.1 is trying
to misuse the Power of Attorney. Learned Senior Counsel submits that the
Applicant has downloaded the position and relevant information about the
suit property from the google website, which reflects the location of Tricon
of whom the Power of Attorney holder, Mr. Taizun Nisar Hassonjee, is a
director. Learned Senior Counsel would submit that from the documents
annexed to the proceedings, it is a newspaper published fact that the
Respondent No.1 has linkages to the mafia world and now after issuance
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of such Power of Attorney virtually a free hand has been given to him in
respect of the subject property. That from the conduct of Respondent No.
1, it is very clear that they want to misuse the machinery of this Court, so
that the Petitioners to get ensnared in petty issues such as inspection of
pleadings etc.
24. Learned Senior Counsel would therefore submit that this Court not
only set aside the order dated 30 th March, 2022 but also stay the Power of
Attorney by restraining the Respondent No.1 and/or his agents from
acting upon the said Power of Attorney dated 2nd September, 2021 and
also direct that the same be deposited in this Court. Learned Senior
Counsel would submit that in order to protect the property this Court also
consider appointing the Court Receiver, High Court Bombay with all
powers under Order XL Rule 2 of the Code of Civil Procedure, 1908, in
respect of the said property.
25. On the other hand, Mr. Godbole, learned Senior Counsel for the
Defendants would submit that every breach of an order should not give
rise to an action under Order 39 Rule 11 of the CPC. Learned Senior
Counsel would submit that the power under Order 39 Rule 11 is directory
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and not mandatory. Learned Senior Counsel relies upon a Division Bench
decision of this Court in the case of Ramavatar Surajmal Modi Vs.
Mulchand Surajmal Modi3. Learned Senior Counsel submits that both the
Powers of Attorney are similar and concurrent. The first Power of Attorney
to Mr. Harish Chandar Mishra is in fact not revoked. Learned Senior
Counsel refers to the reply filed by the first Power of Attorney holder viz.
Shri Harish Chandar Mishra to Exhibit No. 279 and submits that since the
first Power of Attorney holder was not available on account of his personal
commitments, and since Defendant No.2, viz. Respondent No. 1 was
expeditiously required to challenge the order dated 25 th August, 2021,
passed on Application Exhibit No. 259, by filing Revision Application
before the Appellate Bench and also since Defendant No. 2 was not
personally available, the second Power of Attorney was required to be
executed in favour of Mr. Taizun Nisar Hassanjee on 2 nd September, 2021
with identical powers. That Defendant No. 2 was required to regularly
stay at Delhi and unable to come frequently to Mumbai, therefore, it was
necessary to permit his respective Constituted Attorneys to have physical
possession of the suit properties and the keys thereto not as a matter of
right but for the protection and safeguarding of the suit property. That the
3 2004 (2) Mh. L. J.
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Constituted Attorneys are not claiming any rights whatsoever in respect of
the suit property and are holding the suit property for and on behalf of
Defendant No. 2 as his agents only for the purposes of protecting the suit
property. Learned Senior Counsel relies upon the decision of the Hon'ble
Supreme Court in the case of M/s Babbar Sewing Machine Company Vs.
Trilok Nath Mahajan4, which was also relied upon by the Division Bench of
this Court in the case of Ramavatar Surajmal Modi Vs. Mulchand Surajmal
Modi (supra) and submits that as in the present case, where the default is
not willful or the conduct of the party responsible for the default is not
contumacious and there is reasonable explanation for default, this Court is
not obliged to exercise the power under Order 39 Rule 11 (1) of the CPC
to impose a serious penalty such as striking off the defence against the
party responsible for default. Learned Senior Counsel would submit that
sub-Rule (2) which gives a discretion to the Court that even after the
order contemplated under sub Rule (1) of Rule 11 has been passed, upon
sufficient cause being shown by the party responsible for the default or
contravention or breach and such party makes amends for the default or
contravention or breach to the satisfaction of the Court, the Court may
restore the suit or hear the defence on such terms and conditions as it
4 (1978) 4 SCC 188
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deems fit. Learned Senior Counsel urges this Court to consider the
decision of the Hon'ble Supreme Court in the case of M/s Babbar Sewing
Machine Company Vs. Trilok Nath Mahajan (supra) and apply Order 39
Rule 11 (1) as directory using discretion and not mandatorily as there has
been no obstinacy or contumacy on the part of the Defendants or willful
attempt to disregard the order of the Court. Learned Senior Counsel
submits that the rule of striking off of defence should be worked with
caution and used only as a last resort only in extreme cases, which is not
the case here.
26. The Trial Court has considered whether Defendant No.2 has
committed breach of the status-quo order or not. In paragraph 19 of the
Order dated 20th January, 2022, it has observed that the status-quo order
was passed on 20th January, 2021 in the presence of both the parties and
thereafter, the application under Exhibit No. 236 was decided on 24 th
September, 2021 on merits after hearing both the sides. That the
Defendant No.2 has stated in Clause 1 of the Power of Attorney executed
on 24th August, 2021 and registered / notarized on 2 nd September, 2021
that Mr. Taizun Nisar Hassonjee is placed in physical possession of the said
premises. The Small Causes Court has cited Section 91 of the Indian
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Evidence Act, 1872 to observe that since documentary evidence excludes
oral evidence, as regards contents in written documents are concerned, it
was clear that Defendant No. 2 was fully aware of the existence of the
status-quo order dated 20th January, 2021 and despite that placed Mr.
Taizun Nisar Hassonjee in physical possession of the said property.
Observing thus, the Small Causes Court held that the said act clearly
amounted to willful default and breach of status-quo order. Accordingly, in
view of the provisions of Order 39 Rule 11 of the CPC, the defence of
Defendant No.2 put forth in written statement and additional written
statement was struck off.
27. The Appellate Court on the same set of facts has come to a
conclusion that on the date of execution of the second Power of Attorney,
no status-quo order was in force. It is observed from the dates set out in
the paragraph 9 of the Appellate Court's order that the date of 7 th April,
2021, which extended the order of status-quo below Exhibit No. 236, has
not been taken into consideration by the Appellate Court, while arriving at
the said conclusion that there was no order of status-quo in force on the
date of execution of the second Power of Attorney. Obviously, therefore,
the Appellate Court order clearly appears to be erroneous on this finding
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that there was no order of status-quo on the date of execution of the
second Power of Attorney dated 2nd September, 2021. The Appellate Court
has thereafter gone ahead and compared the two Powers of Attorney and
observed in paragraph 22 that since the words used are "to have
possession" and not "put in possession", there is a difference, which means
Mr. Taizun Nisar Hassonjee is to act as an agent and has possession of the
suit premises on behalf of Defendant No.2. That the Power of Attorney is
not an instrument of transfer and also nowhere the same suggests that it is
an instrument of transfer of right, title, interest, possession in the suit
premises. The word "to have possession" cannot be read in isolation and
therefore, the Appellate Court expressed its opinion that Defendant No.2
had not transferred any possession in the name of Mr. Taizun Nisar
Hassonjee. That the Defendant No. 2 had only appointed Mr. Taizun Nisar
Hassonjee as a Power of Attorney holder and he has been given the right
to have possession of the suit premises to make statements, applications,
undertaking, etc. on his behalf and to his name in regard to the suit
premises or to deal with all the matters on his behalf.
28. Holding that there was no status-quo order on 2 nd September, 2021
and the Power of Attorney dated 2 nd September, 2021 has not transferred
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any right, title and interest in the suit premises, the Appellate Court held
that there was no question of striking off defence of Defendant No.2 and
the order of the Trial Court was set aside.
29. Both the learned Senior Counsel have put forth their points of view
with great erudition. There can be no doubt that an order of status-quo by
a Court implies the existing state of things at the given point of time when
the order was passed and when such an order is passed, the parties are
obliged to preserve the situation as on the date of the order. Both the
decisions, Messrs Bharat Coking Coal Limited Vs. State of Bihar and Ors.
(supra) as well as Tejram Gulab Hazare and Ors Vs. State of Maharashtra
and Ors.(supra), cited on behalf of the Petitioner clearly supports this rule.
It has been brought out before this Court that the Appellate Court was not
aware of the order dated 7 th April, 2021, extending the order below
Exhibit No. 236. The second Power of Attorney has been executed on 2 nd
September, 2021, whereby Mr. Taizun Nisar Hassonjee has been granted
power by the Respondent No.1 to "have" physical possession of the said
property, which is after 7th April, 2021, when the status-quo order was
extended. Therefore, it cannot be said, as observed by the Appellate Court
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above that there was no status-quo order on the date on which the second
Power of Attorney was executed. It has been noted above that the
Appellate Court does not appear to have taken into consideration the date
of 7th April, 2021 of the extension of the status-quo order. Status quo, as
held by this Court in the case of Tejram Gulab Hazare and Ors Vs. State of
Maharashtra and Ors.(supra) while relying upon the decision of the
Hon'ble Supreme Court in the case of Messrs Bharat Coking Coal Limited
Vs. State of Bihar and Ors.(supra), means the existing state of things at
any given given point of time and cannot mean anything else except that
state as existing when the order was passed. Status quo implies that the
situation as on the date of the order is to be preserved. On 20 th January,
2021 both sides were directed to maintain status quo which was extended
on 7th April, 2021 till the decision was passed in Exhibit 236 which was
made absolute on 24th September, 2021. The second Power of Attorney
was executed on 2nd September, 2021 which is during the subsistence of
the status quo order. Therefore clearly there was a breach of the order of
status quo. Although, it would, therefore, have been appropriate for this
Court to remand the matter back to the Appellate Court for consideration
of the said order and decide the appeal denovo, however, as already much
time has elapsed, this Court considers it appropriate to decide the matter
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here itself keeping in mind that the status-quo order was in fact in place
when the second Power of Attorney was executed.
30. However, the striking off of defence of a Defendant for non
compliance of a Court's order or breach of an undertaking is a serious and
grave consequence. A Division Bench of this Court in the case of
Ramavatar Surajmal Modi vs. Mulchand Surajmal Modi (supra) observed
that by making provision of serious penalty of striking off the defence
against the party responsible for default, the rule making authority did not
intend to leave no discretion to the Court. That, the object of the provision
of Order 39, Rule 11(1) is not defeated if it is held to be directory as the
Court can in its discretion for adequate reasons visit the defaulting party
with the penalty envisaged therein and that if the provision was held
mandatory with no discretion to the Court, that could lead to striking off
the defence even when the default was not found to be wilful or conduct
of such party not obstinate or contumacious. As observed by the Divsion
Bench of this Court, the provision does not obligate the Court in every
case of default of a Defendant to strike off the defence. Pertinently Sub-
rule (2) gives a discretion to the Court that even after the order
contemplated under Sub-rule (1) of Rule 11 has been passed, upon
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sufficient cause being shown by the party responsible for the default or
contravention or breach and such party makes amend for the default or
contravention or breach to the satisfaction of the Court, the Court may
restore the suit or hear the defence on such terms and conditions it deems
fit. That, if the Court has power to restore the party to the same position
even after the adverse order has been passed under Sub-rule (1) if a case
is made out under Sub-rule (2), the provision of Sub-rule (1) has to be
held to be directory and not imperative. The Hon'ble Supreme Court in
case of M/s. Babbar Sewing Machine Company vs. Trilok Nath Mahajan
(supra), as also noted by the Division Bench of this Court, held that the
power of dismissal of suit or striking the defence under Order 11 Rule 21
of the Code of Civil Procedure should be exercised only where a defaulting
party fails to attend the hearing or is guilty of prolonged or inordinate and
inexcusable delay which may cause substantial or serious prejudice to the
opposite party. Relying upon the findings of the Hon'ble Supreme Court in
paragraph 14 of the Hon'ble Supreme Court's decision, the Division Bench
of this Court held that Sub-Rule (1) of Rule 11 of Order 39 of CPC to be
directory and the discretion exercisable by the Court while passing an
order under Sub-rule (1) of Rule 11 of Order 39 CPC has to be in
consonance and in conformity with the decision laid down by the Hon'ble
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Supreme Court in the case of M/s.Babbar Sewing Machine Company vs.
Trilok Nath Mahajan (supra). Summarized simply, power to strike off the
defence under Order 39 Rule 11(1) should be exercised for adequate
reasons where the defaulting party fails ultimately in complying with the
order of the Court or undertaking; where the default is wilful and the
conduct of the defaulting party is obstinate, contumacious that results in
causing substantial or serious prejudice to the opposite party.
31. Therefore, whether Order 39 Rule 11 (1) is directory or mandatory
does not require any further discussion in view of the decision of the
Hon'ble Supreme Court in the case of M/s Babbar Sewing Machine
Company Vs. Trilok Nath Mahajan (supra) which has been relied upon by
a Division Bench of this Court in the case of Ramavatar Surajmal Modi Vs.
Mulchand Surajmal Modi(supra). The penalty of striking off a defence is
indeed very harsh and such an order must be applied only in extreme
cases, where there has been obstinacy or contumacy. A party should not
be rendered defenceless unless the entire substratum of the suit has been
wiped off.
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32. In the facts of this case, as noted above, evidently, there has been a
breach of the status-quo order by the execution of the second Power of
Attorney dated 2nd September 2021. However, a perusal of the reply filed
by the first Power of Attorney holder Shri.Harish Chandar Mishra Exhibit
279, as quoted above, does not suggest that the said power has been
deliberately executed to breach the order of status quo or the conduct is
contumacious. No right, title or interest in the said property appears to
have been transferred. Since the first Power of Attorney holder was not
available on account of his personal commitments and since the
Respondent no.1 was expeditiously required to challenge the order dated
25th August, 2021 passed on Application Exhibit 259 by filing Revision
Application before the Appellate Bench and that Respondent no.1 was also
personally not available being in Delhi, the second Power of Attorney
came to be executed in favour of Mr.Taizun Nisar Hassonjee on 2 nd
September 2021 with identical powers. It has been submitted that the
physical possession as well as the keys of the suit property is not for the
purposes of conferring any right, title and interest to the Constituted
attorneys but only for the protection and safeguarding of the suit property.
In my view, therefore there appears to be a reasonable explanation that
has been offered on behalf of the Defendants for the default. No contrary
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fact has been brought to my notice. The conduct of the defaulting party
cannot be said to be contumacious or obstinate, to be visited with such a
severe consequence of striking off the defence put forth in the written
statement and additional written statement. It is a principle of law that the
rights of the parties be decided in a trial after considering the pleadings of
the plaintiff and the defendant. Striking off of the defence in the form of a
written statement will take away that valuable right of the defendant,
which the circumstances of the case as noted above do not warrant.
33. For the above reasons, the order dated 30 th March, 2022 of the
Appellate Court setting aside the order of the Trial Court dated 20th
January, 2021 striking off of the defence of the Respondent No. 1
(Defendant No.2) as contained in the written statement and the additional
written statement is upheld.
34. However, even though the breach of the order of status quo as
observed in the facts of this case is not to be visited with serious
consequences of striking off of defence, however, that does not mean that
the breach can be allowed to continue particularly in view of the restraint.
It would therefore only be fair to direct the deposit of the second Power of
Attorney as well as injunct the Respondent No.1 and/or the second Power
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of Attorney holder and/or their agents from acting in accordance with the
second Power of Attorney in any manner whatsoever.
35. Ergo, in view of the above discussion and in view of the breach of
the order of status-quo as noted above, the Respondents are directed to
deposit the second Power of Attorney dated 2nd September, 2021 in the
Small Causes Court and Respondent No. 1 and/or Mr. Taizun Nisar
Hassonjee and/or their agents, employees, servants etc. are restrained
from acting in accordance with the said second Power of Attorney in any
manner whatsoever.
36. The Trial Court to proceed with the said RAE & R Suit No. 54/176
of 1994 and to complete the trial preferably within a period of one year.
37. The Writ Petition and Interim Application accordingly stand
disposed in the above terms.
38. It is made clear that any observation on the merits of the said suit, is
only for the purposes of deciding the present Writ Petition and Interim
Application and the trial Court to decide the suit on its own merits in
accordance with law.
(ABHAY AHUJA, J.)
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Signed by: Nikita Gadgil
Designation: PA To Honourable Judge
Date: 01/12/2023 15:43:37
