City Centre Properties Private ... vs Prasanta Kumar Mahapatra & Ors
2021 Latest Caselaw 370 Cal/2

                     IN THE HIGH COURT AT CALCUTTA
                         Civil Appellate Jurisdiction
                                 Original Side


Present:-   Hon'ble Justice I. P. Mukerji
            Hon'ble Justice Subhasis Dasgupta.

                 IA No. GA/1/2019 (Old No.GA/490/2019)
                                  With
                            CS No. 23 of 2009
                                    In
                           APO No. 232 of 2018

                   City Centre Properties Private Limited
                                    Vs.
                     Prasanta Kumar Mahapatra & Ors.


For the Petitioner/Appellant        :      Mr.   Ratnanko Banerji, Sr. Adv.
                                           Mr.   Srijib Chakraborty, Adv.
                                           Mr.   Anurag Mitra, Adv.
                                           Mr.   Pranav Sharma, Adv.


For the Respondent                  :      Mr. Sakya Sen, Adv,

Mr. K. K. Pandey, Adv.

For the Respondent No. 2 : Mr. Aasish Chowdhury, Adv.

Ms. Urmila Chakraborty, Adv.

Mrs. Aindrila Basu, Adv.

For the Respondent Nos. : Mr. Jayanta Sengupta, Adv.

3a, 3b & 5                                 Ms. H. Nafis, Adv.

For the Respondent No. 4            :      Mr. Rudrojit Sarkar, Adv.
                                           Mr. Nikunj Berlia, Adv.

Judgment on                         :      09.04.2021




   Subhasis Dasgupta, J:-

This appeal arises from the judgment and preliminary decree dated 16th

July, 2018, in an application (GA 4050 of 2017) under Order XII Rule 6 of

the Code of Civil Procedure, declaring the shares of the heirs of late Prabhat

Kumar Mahapatra, in respect of the immovable properties, shown in the

schedule appended to the amended plaint, and further appointing a learned

advocate Commissioner to effect partition to the extent of shares declared

in the preliminary decree.

A suit for partition and administration of properties, left by the late Prabhat

Kumar Mahapatra came to be instituted in the year 2009.

The appellant company/defendant No. 6 along with the defendant No. 1

filed a written statement jointly in such suit. Besides filing the written

statement, the appellant filed an affidavit to challenge the application under

Order XII Rule 6 C.P.C. was filed.

By reason of the amendment of the plaint, the first respondent/plaintiff

restricted his claim to the three (3) immovable properties, left by his father,

late Prabhat Kumar Mahapatra, which is more fully described in the

schedule "M" of the plaint.

The learned trial court by its impugned judgment and order, granted a

preliminary decree on the alleged admission of the defendants in their

respective written statement with respect to the title of immovable

properties of late Prabhat Kumar Mahapatra, as covered in the scheduled

properties, keeping in mind that though the defendant Nos. 2a and 2b had

raised objection with regard to the representation of defendant No. 1 in the

suit by her solicitor for her mental incapacity, but no objection was ever

raised with regard to the entitlement of share of defendant No. 1.

Mr. Ratnanko Banerji, learned senior advocate for the appellant/ defendant

no. 6 company challenging the preliminary decree, made the following

submissions:

That the said three properties shown in the schedule to the plaint, though

claimed by the first respondent/plaintiff to be the properties belonging to

his late father, Prabhat Kumar Mahapatra, but the said properties were not

the properties of late Prabhat Kumar Mahapatra but belonged to the

Company. Reference was drawn to the audited balance sheets submitted

for the year 1993-1994, wherein Prabhat Kumar Mahapatra had signed the

audited balance sheets being a director of appellant company for

challenging the title of late Prabhat Kumar Mahapatra.

That there was no conspicuous and express categorical, unequivocal and

unqualified admission of appellant/defendant company admitting the title

of late Prabhat Kumar Mahapatra with respect to the three (3) immovable

properties shown in "M" schedule of the plaint, thereby justifying the

necessity of having held a trial for determination of title of the properties,

for which partition was sought for, without which preliminary decree is not

sustainable.

That the assets of appellant/defendant company could no be made part of

the subject matter of the partition for distribution amongst the heirs of late

Prabhat Kumar Mahapatra. The shareholders were not the owners of the

properties and assets belonging to the company, at best the personal

shares held by late Prabhat Kumar Mahapatra in the appellant's company

might be liable for distribution amongst the heirs of late Prabhat Kumar

Mahapatra, according to their entitlement.

Reliance was placed by Mr. Banerji on a decision reported in AIR 1955 SC

74 rendered in the case of Bacha F. Guzdar, Bombay Vs. Commissioner

of Income Tax, Bombay, that the concept of partners is not akin to

shareholders in a company, as the company is a separate juristic entity

distinct from the shareholders. In Halsbury's Laws of England, Vol. 6

(3rd Edn.), Page- 234, the law regarding the attributes of shares is stated

as follows:

"A share is right to a specified amount of the share capital of a company

carrying with it certain rights and liabilities while the company is a going

concern and in its winding up. The shares or other interest of any member

in a company are personal estate transferable in the manner provided by its

articles, and are not of the nature of real estate."

That the learned trial judge ought not to have granted the preliminary

decree without enquiring into the title of the three (3) immovable properties

shown in the schedule, as there was no categorical admission of title.

Mr. Banerji relied on a decision reported in (2019) 20 SCC 425, delivered

in the case of Hari Steel and General Industries Limited & Anr. Vs.

Daljit Singh & Ors., on the trite principle that no amount of evidence

would be of any help, in the absence of pleading and foundation in the

written statement.

That the alleged admission, sought to be capitalised by the first

respondent/plaintiff must be conscious, specific, clear, categorical and

unequivocal in order to reveal the deliberate act of the party making such

admission, thereby revealing his intention to be bound by it. In the absence

of a clear admission of title, the learned trial judge was under an obligation

to exercise his judicial discretion, keeping in mind that the judgment on

admission is a judgment without trial, therefore, unless the admission is

clear, unambiguous and unconditional, the discretion vested to the learned

trial judge ought not to have been exercised, so as to deny the valuable

right of the appellant/defendant no.6 to contest the claim for obtaining a

judgment on admission under Order XII Rule 6 C.P.C. Mere giving a look to

a solitary statement in the written statement, would not be itself sufficient

to infer even the admission of the appellant/defendant no.6 with respect to

the title of the properties, shown in schedule, allegedly claimed to be

belonging to late Prabhat Kumar Mahapatra.

That the title to the properties shown in the schedule of the plaint whether

the properties belonged to the erstwhile owner namely late Prabhat Kumar

Mahapatra or not ought to have been determined before granting

preliminary decree, which should not have been left to be determined by

the learned Commissioner.

Reliance was placed by Mr. Banerji, on a decision, reported in 1909 (10)

CLJ 503, delivered in the case of Satya Kumar Banerjee Vs. Satya

Kirpal Banerjee & Ors., where the law was laid down that all questions

involving the title of the parties and their right to any relief are judicial in

character and must be determined by the court, and such determination

must be made in the interlocutory decree before any partition is made or

directed.

Emphasis was further made by Mr. Banerji, citing a further decision

reported in (1910-11) 15 CWN 375, delivered in the case of Upendra Nath

Banerjee & Anr. Vs. Umesh Chandra Banerjee that the determination of

the question whether certain properties are the joint properties of the

parties or the exclusive properties of any of them, cannot be delegated by

the Judge to the Commissioner for partition, and thus the necessity of

conducting a trial was focused.

That the learned trial judge neither considered the written statement filed

by the appellant company jointly with the defendant no. 1, nor advanced

any reasons for consideration of the written statement filed by the appellant

company as an admission. The impugned judgment and order is thus,

without any application of mind for not offering any reasons so as to obtain

hallmark of a judicial order granting a preliminary decree on admission.

That in the supplementary affidavit submitted by the appellant company,

there was a disclosure of tenancy agreement, being executed by

appellant/defendant company in favour of Indian Oil Corporation, dated

1st April, 2006, wherein the appellant/defendant company represented

itself to be the owner of the properties, let out to Indian Oil Corporation,

which is of course one of the three (3) immovable properties, mentioned in

the schedule to the plaint, and it could not be taken into account by the

learned trial court, while granting preliminary decree.

Upon raising such submissions, the appellant/defendant company

proposed for setting aside the impugned judgment and order.

Per contra, Mr. Sakya Sen, learned advocate representing the first

respondent/plaintiff, challenged the appeal advancing the following

submissions:

That the written statement filed by the appellant would by itself reveal that

there was no dispute with regard to the title of late Prabhat Kumar

Mahapatra, in respect of three (3) immovable properties, shown in schedule

"M" to the plaint, and no controversy was there with regard to the shares of

heirs of late Prabhat Kumar Mahapatra.

The claim of the appellant/company, as to its entitlement to the assets of

the company being irrelevant, would not require any adjudication, when

apparently there was categorical and unequivocal admission of

appellant/defendant, as regards title of the Prabhat Kumar Mahapatra.

Incidentally reliance was drawn from Sub-Paragraph (XII) of Paragraph 2(n)

of written statement of appellant/defendant company, wherein the

appellant company itself admitted taking a specific averment that the

inherited properties apart, all other properties acquired by late Prabhat

Kumar Mahapatra were his self acquired properties, which according to

first respondent, would be sufficient enough to estop the

appellant/defendant company from challenging the title of late Prabhat

Kumar Mahapatra with respect to the three (3) properties, shown in the

plaint.

The case of the first respondent/plaintiff claiming partition, found its basis

from the disclosure made in the Paragraph-3 of the amended plaint,

wherein it was averred that Prabhat Kumar Mahapatra during his lifetime

purchased three (3) properties, mentioned in the schedule of the plaint, out

of his own income, being a businessman, who established and promoted

several companies, and one of such company is "City Centre Properties

Private Limited/appellant company," which was promoted as family

company, and incorporated as such on 15th July, 1966.

That properties, mentioned in 54, Forest Park, Bhubaneshwar, Odisha, was

let out to Indian Oil Corporation by the appellant company, with the

knowledge of 1st respondent. Such letting out would not itself deprive the

respondent no.1/plaintiff from having his share to the extent of his

entitlement in respect of properties, left by his late father, for the apparent

admission of appellant/defendant no.6 in its written statement as regards

the title of his late father to the properties, as tenancy could be created

without being owner of property, and appellant/company had nothing to do

with the ownership and title of such property. Late Prabhat Kumar

Mahapatra executed a lease of property in favour of the

appellant/defendant company, and the appellant being a lessee of the

demised property could not be allowed to dispute the title of Prabhat Kumar

Mahapatra over the said property. The appellant/company being a lessee of

the demised properties, there left no hurdle to pass a preliminary decree

declaring the shares of late Prabhat Kumar Mahapatra on apparent

admission of title, revealed from the written statement of

appellant/defendant company.

That though, appellant/defendant company might be in possession in

respect of one of the properties, mentioned in the schedule to the plaint,

but the partibility of such property being a subject of decision, could be well

taken in a proceeding before the learned Commissioner of partition,

appointed for the purpose. Paragraph-5 of the written statement of

appellant/company having dealt with the admission of title individually

with the description of immovable properties, shown in the schedule of the

plaint there left nothing to dispute with the admission of title of properties,

and thus, such paragraph of written statement was much stressed upon to

infer even the admission of title.

That by reasons of such admission of title, found in the relevant

paragraphs of written statement, the balance sheet, relied upon by the

appellant, not being document of title, would be without any significance.

The mere entries in the balance sheet, signed by late Prabhat Kumar

Mahapatra, could not be allowed to be relied upon to contradict the title of

late Prabhat Kumar Mahapatra with respect to the three (3) immovable

properties, mentioned in the plaint.

The judgments referred by the appellant though being on established

proposition of law, but the same would not be applied in the facts and

circumstances of this case.

That since, the learned trial court simply declared the shares of the heirs of

late Prabhat Kumar Mahapatra to the extent of 1/4th share each pursuant

to the averment made in Paragraph-42 of the plaint, claiming distribution

of shares amongst the heirs of late Prabhat Kumar Mahapatra, upon

sensing the apparent categorical and unqualified admission of title of

defendants in their respective written statement, and that being the

position, any exercise for relegating this appeal to trial, as proposed to be

held by appellant in this case, would be unnecessary, and prolong the

instant litigation.

Learned advocate representing respondent no. 2, 3a, 3b, 4 and 5 supported

the stand taken by respondent no. 1/plaintiff that no illegality was

committed by learned trial court in granting a preliminary decree for the

apparent admission of title, found in the written statement of defendants.

Attempt was made by respondent nos. 3a, 3b and 5 to distinguish the

judgment, rendered in the case of Upendra Nath Banerjee (supra)

submitting that the same would not be applicable in the given set of facts

on the simple score that such ratio requiring determination of the question

whether certain properties are the joint properties of the parties, or the

exclusive properties of any of them cannot be delegated by a Judge to the

Commissioner for partition came to be decided prior to the Code of Civil

Procedure 1908 being enacted, and during the pre-enactment period of

Code of Civil Procedure, the question of granting preliminary decree was

neither conceived, nor even contemplated.

According to such contesting respondents to the appeal, Commissioner of

Pleader would be simply obliged to decide the dispute, as regards the

distribution of extent and proportion of share amongst the heirs, and as

such no title of the properties was left to be decided by the Commissioner,

as contended by the appellant/company.

We were addressed in this appeal to decide the sustainability of preliminary

decree being granted by the learned trial court upon rendering a judgment

on admission under Order XII Rule 6 C.P.C.

The fight between the parties claiming partition was with respect to three

(3) immovable properties, shown in the schedule to the plaint. The

appellant/company by filing a written statement, jointly with the defendant

no. 1, proceeded to answer the claim of the respondent no. 1/plaintiff.

The learned trial court granted the preliminary decree having found

admission of title, mentioned in the respective written statement of

defendants. Though the respondent/plaintiff referred to some of the

paragraphs in the written statement of appellant/defendant company to

reveal the admission of title, but for ascertainment of categorical,

unambiguous and unconditional admission, the learned trial court was

under an obligation to consider each and every averments contained in the

written statement of the appellant/defendant company, even to infer

admission of title of the properties, if it was a deliberate, conscious act of

appellant/defendant company making such admission.

It is so necessary that the learned trial court should reveal in its judgment

that it duly exercised its discretion judicially to find out clear, unambiguous

and unconditional admission.

There is nothing reflected in the order under appeal that the learned trial

court had even taken into account the points raised in the written

statement filed by appellant company.

When the appellant/defendant company responding to the summons being

issued by the court, furnished its written statement jointly with defendant

no. 1, the learned trial court ought to have returned a decision in terms of

the averments contained in the relevant paragraphs of the written

statement of appellant/defendant company, disputing with the title of the

properties.

No reasons whatsoever were assigned by learned trial court for not making

consideration of the written statement, and the affidavit furnished by the

appellant/defendant company.

Merely giving an isolated look at some of the paragraphs of written

statement, filed by the appellant/defendant company, would not be

sufficient enough in the given facts of this case to reveal the admission of

title of the properties, allegedly owned by late Prabhat Kumar Mahapatra.

The learned trial court is supposed to give a decision after accepting the

written statement of the appellant/defendant company for reaching its

logical conclusion so as to grant a preliminary decree.

Assigning of reasons being a hallmark of an order passed in exercise of

judicial authority, it would always be desirable to offer reasons, while

coming to a conclusion.

In the impugned judgment and preliminary decree dated 16th July, 2018,

since there has been non-consideration of the written statement, filed by

the appellant/defendant company, without offering any justified reasons,

the same is not sustainable.

Having considered the controversy raised over the properties, mentioned in

the schedule of the plaint to its title, and bearing in mind the nature and

peculiarity of averments, contained in the written statement of

appellant/defendant company, disputing the title of late Prabhat Kumar

Mahapatra, from whom the heirs claimed their 1/4th share each, all

questions raised by appellant/defendant company involving the title of the

parties, and the proposed reliefs sought ought to have determined by the

learned trial court, before granting any preliminary decree under Order XII

Rule 6 C.P.C.

We thus found strong force in the argument, advanced by Mr. Banerji,

appearing for the appellant.

There arises the necessity of ascertaining title of properties, with respect to

which partition has been sought for, before granting a preliminary decree.

Since, the appellant/defendant company claimed its exclusive title over the

scheduled properties, the determination of the question, whether the

properties actually are the exclusive properties of the parties proposing

partition, or of some other person, as claimed by appellant/defendant

company, in our considered view, is obligatory.

Ascertainment of the title of properties appears to be pre-requisite prior to

effecting a preliminary decree, while rendering a judgment on admission

under Order XII Rule 6 of C.P.C.

The impugned judgment and the preliminary decree dated 16th July, 2018,

for the reasons as aforesaid, cannot be allowed to stand, and the same is

accordingly set aside.

The application for judgment on admission (GA No. 4050 of 2017) is

dismissed.

The properties and extent to which they belonged to late Prabhat Kumar

Mahapatra and the share of the parties in them are to be determined on

trial leading to a preliminary decree. This appeal is allowed to the above

extent.

The connected application [GA No.1 of 2019 (Old GA NO. 490 of 2019)] is

accordingly disposed of.

(SUBHASIS DASGUPTA, J.)

I. P. MUKERJI, J.-

I fully concur with the reasoning and conclusion reached by my learned

brother, Dasgupta, J. I would like to add a few words of my own.

Under Order XII Rule 6 of the Civil Procedure Code, the court has the

power to deliver judgment on the basis of an admission. This admission

has to be clear, unambiguous and unequivocal. The admission should not

be attached with any condition or a narration which might admit of two

different interpretations or two equally plausible opinions one of which is

contrary to the admission or might qualify the admission made. The

admission should be such that the opinion that the court reaches on the

basis of such admission is the only reasonable opinion that can be formed.

Whether there is an admission or not can be ascertained under Order XII

Rule 6 from not only the pleadings but from any other source whether oral

or in writing. Therefore, the learned trial court under Order XII Rule 6 was

not confined to the written statement but was also obliged to examine any

other document to satisfy itself whether there was an admission.

On a perusal of the written statement filed jointly by the respondent

no.2/defendant No. 1 and appellant/defendant no.6, there is no doubt in

my mind that the statements made therein are substantially vague,

convoluted and often contradictory with one another. In fact, I do not find

any clear cut admission that the three properties belonged to the late

Prabhat Kumar Mahapatra (father of Prasanta Kumar Mahapatra).

In fact, a combined reading of the following averments in the affidavit-in-

opposition to the application under Order XII Rule 6 and the written

statement suggest the opposite:-

"3.(d) Properties shown in the Schedule to the plaint are claimed by the

plaintiff/petitioner to be the properties belonging to late Prabhat Kumar

Mahapatra. However, the said properties are the assets of the defendant no.

6 as duly reflected in its balance sheets including the balance sheets which

are signed by late Prabhat Kumar Mahapatra himself while acting as a

director of the defendant no. 6 company."

2. (i) It is pertinent to note that at the time of his death, Prabhat Kumar

Mahapatra did not possess any shares in the City Centre Properties Pvt. Ltd.

being Defendant no. 6 herein, Defendant no.7, Defendant no.8 and Carfax

Investments Pvt. Ltd. and as such the plaintiff cannot seek any inheritance in

such respect. Thus under no circumstances, can the shares in these

Companies be said to belong to Late Prabhat Kumar Mahapatra or the

Companies themselves be described as a proprietorship concern of the said

Prabhat Kumar Mahapatra."

"(xi) Without prejudice.................. It is denied that the properties of the

companies can be said to be joint family property. No documents have been

disclosed to show that the properties in question or any of them at any stage

was regarded or treated by anyone as joint family property. Nor have those

been so treated for tax purposes at any stage."

5. With reference to paragraphs 2 to 4 of the plaint it is stated state that

there is no premises at 27, Free School Street, Kolkata - 700 087. In any

event, a leasehold property cannot be a subject matter of partition as there is

no partiable interest in the property. The property situated at 10A, Lee Road,

Kolkata - 700 020 is a two storied building and the first floor together with

common passage and common amenities belongs to the said father during

his lifetime and after his death it is being exclusively and illegally controlled

by the defendant no.2. It is stated that Prabhat Mahapatra was never the

owner of the ground floor flat at 10A, Lee Road, Kolkata - 700 020. The

premises mentioned in 54, Forest Park, Bhubaneshwar - 751009 has been

let out to Indian Oil Corporation by the City Centre Properties Pvt. Ltd. and

contrary allegations are denied and disputed."

"7. With reference............The allegation of the family Companies and that

the rights of the Companies are subject to equitable consideration as

specifically alleged in paragraph 15 is incorrect and untenable. The

Companies are not in the nature of partnership and the rights of the

shareholders are not subject to equitable consideration as alleged by the

plaintiff. A Company does not recognize any concept of their being a trust

created in respect of the share of a living person. The individual

shareholdings of the family members are to be found in the Register of

members of each of such members."

13. With reference........that the plaintiff is not entitled to 1/4th share in any

of the properties mentioned in paragraph 42 of the plaint. Inasmuch as, the

Plaintiff did not have any right, title and interest as a coparcener in any of

the properties accordingly."

In paragraph 3(d) of the affidavit-in-opposition of these defendants to the

judgment of admission application (GA 4050 of 2017), it has been

categorically stated that all the three immovable properties belonged to the

company. A copy of the balance sheet for the year 31st March, 1993 has

been annexed. A schedule to it describing the Company's fixed assets

specifies that those three properties were included in them. The same is

also true as regards the balance sheet of the year ending 31st March, 1994.

With regard to 27, Mirza Galib Street, the affidavit-in-opposition asserted

that the land was leased out to the respondent no. 6 by late Prabhat Kumar

Mahapatra on 1st January, 1967 for 25 years. The company constructed a

building on it. The lease was further extended by 25 years on 10th August,

1991.

There are no reasons in the impugned judgment dated 16th July, 2018 as

to why his lordship thought that there was an admission on the part of the

answering defendants that the said properties belonged to late Prabhat

Kumar Mahapatra.

Before pronouncing a preliminary decree the court has the power to even

investigate the title of the properties to ascertain whether it at all belonged

to the person from whom the title is claimed. Thereafter, comes the

question of determination of the shares of the parties to the partition suit.

The court might adopt any course of action permissible in law to ascertain

such title. In this kind of a case the title could not have been declared on

the basis of alleged admissions. It could only have been determined and

declared on the basis of a trial leading to a preliminary decree.

The operative part of my order is identical to the one made by my learned

brother.

Urgent certified copy of this judgment, if applied for, be given to the

appearing parties as expeditiously as possible upon compliance with the all

necessary formalities.

(I. P. MUKERJI, J.)