Tibrewala Realtors Pvt. Ltd vs Kesar Trading Co. Pvt. Ltd. And ...
2021 Latest Caselaw 4200 Cal

AD. 5.

August 11, 2021.

MNS/tbsr

C. O. No. 1437 of 2020 with CAN 1 of 2020 (Via video conference)

Tibrewala Realtors Pvt. Ltd.

Vs.

Kesar Trading Co. Pvt. Ltd. and others

Mr. Jayanta Kumar Mitra, Mr. Arindam Banerjee, Mr. Kaushik Banerjee, Ms. Rashmita Sen, Mr. Abhishek Agarwas

... for the petitioner.

Mr. Biswajib Ghosh, Ms. Sudipta Paul

...for the opposite party nos. 1 and 2.

Mr. Jewel Biswas

...for the opposite party nos. 3 to 5.

Mr. Anirban Roy, Mr. Sanjib Seth

...for the opposite party no. 7.

Re: CAN 1 of 2020(Section 5 application)

While moving the application under

Section 5 of the Limitation Act, 1963 (in short

1963 Act), for condonation of delay in filing the

revisional application, learned senior counsel for

the petitioner contends that the petitioner was not

at fault in any manner for the delay occasioned in

presenting the revision.

By placing reliance on a list of dates,

learned senior counsel contends that the matter

was initially challenged before this Court vide

C.O. No. 1554 of 2016, which was disposed of by

a co-ordinate Bench by its order dated August 17,

2017, wherein the learned single Judge refused

to entertain the application under Article 227 of

the Constitution of India preferred against the

same impugned order, as challenged herein, on

the ground that an alternative remedy was

available to the petitioner. It was further

enumerated in the said judgment that by making

"reversionary amendment in the revisional

jurisdiction which was prevalent earlier and when

there is curtailment in such provision and despite

such curtailment the instant nature of

interlocutory order was well-revisable under

Section 115A of the Code".

It is submitted that, pursuant to such

observation, the petitioner approached the District

Court with a revisional application under Section

115A of the Code of Civil Procedure. However,

after pendency of the same for a considerable

period, an objection was taken by the opposite

party no. 7 that the District Court did not have

jurisdiction to take up the revisional application, in

view of the valuation of the suit being higher than

the pecuniary jurisdiction of the District Court.

According to the petitioner, taking a cue

from such submission, the petitioner withdrew the

revisional application and preferred the current

application under Section 115 of the Code before

this Court.

It is submitted by learned senior counsel

that the delay occasioned was due to the

aforesaid developments, over which the petitioner

had no control, as such.

Learned senior counsel, in support of the

proposition that the courts ought to be liberal

while adjudicating applications for condonation of

delay, places reliance on the judgements

reported at AIR 1987 SC 1353 (Collector, Land

Acquisition, Anantnag and Ors. Vs. Katiji and

Ors.) and AIR 1998 SC 3222 (N. Balakrishnan

Vs. M. Krishnamurthy). It is contended that, in

the absence of any mala fides and/or deliberate

negligence on the part of the petitioner, the court

ought to condone the delay in preferring the

revisional application, particularly, since the

petitioner has a strong prima facie case on merits

in the revisional application itself.

Learned counsel appearing for the

opposite party no. 7, places reliance on a

judgment reported at (2010) 8 SCC 685 (Balwant

Singh (Dead) Vs. Jagdish Singh and others),

in support of the proposition that even if the term

"sufficient cause" in Section 5 of the 1963 Act has

to receive liberal construction, it must squarely fall

within the concept of reasonable time and proper

conduct of the party concerned. The purpose of

introducing liberal construction, it was held,

normally is to introduce the concept of

"reasonableness" as understood in its general

connotation. The Supreme Court went on to

observe that the expression "sufficient" means

adequate enough, as much as may be necessary

to answer the purpose intended and embraces no

more than that which provides a plentitude which,

when done, suffices to accomplish the purpose

intended in the light of existing circumstances and

when viewed from the reasonable standard of

practical and cautious men. The party is to show

that besides acting bona fide, it had taken all

possible steps within its power and control and

had approached the court without any

unnecessary delay.

Learned counsel for the opposite party no.

7 next cites a judgment reported at (1999) 1 Cal

LT (HC) 480 (Amiya Kumar Basu Vs. Pankaj

Kr. Chakraborty & Ors.), and argues that a co-

ordinate Bench of this Court, in the said case,

took note of the provisions of Sections 115 and

115A of the Code and, on a comparison of the

two, came to the specific conclusion that the

District Court has jurisdiction to entertain

revisional applications irrespective of valuation

under Section 115A of the Code and that the

jurisdiction of the District Court was concurrent

with that of this court under Section 115.

As such, it is contended by learned

counsel that, irrespective of the submission made

on behalf of the opposite party no. 7 before the

District Court, the present revisionist petitioner

was the dominus litis as far as the revisional

application was concerned and ought not to have

withdrawn the application under Section 115A at

such a belated stage, thereby taking the risk of

approaching a court of concurrent jurisdiction for

the same remedy.

Next placing reliance on sub-sections (3)

and (4) of Section 115A of the Code, learned

counsel places stress on the ingredient of law

that where any proceeding for revision is

commenced before the District Court, the

decision of the District Court on such proceeding

shall be final and no further proceeding by way of

revision shall be entertained by the High Court or

any other Court. As such, it is argued that the

time of commencement of such a revisional

application before the District Court is the

decisive factor in deciding whether the High Court

could exercise its concurrent power under

Section 115 of the Code, even after the petitioner

took recourse to Section 115A of the Code. It is

further submitted that sub-section (4) of Section

115A specifically restricts any further application

by the same party from being entertained by

either the High Court or the District Court if a

revision has been preferred before the other

alternative forum. Hence, there being a specific

bar in law, the ignorance of law of the petitioner

could not be a ground for condonation of delay

within the contemplation of Section 5 of the 1963

Act, merely on the basis of a submission made on

behalf of the opposite party no. 7 before the

District Court.

Upon considering the submissions of the

parties, it is appreciable that the learned counsel

for the opposite party no. 7 has raised an

extremely interesting question as to whether the

revisionist petitioner herein lacked bona fides

inasmuch as it was within the knowledge of the

petitioner at the relevant juncture, regarding the

existence of sub-sections (3) and (4) of Section

115A of the Code.

Upon a conjoint reading of sub-sections (3)

and (4), it is evident that the first of the said sub-

sections clearly stipulates that where any

proceeding for revision is commenced before the

District Court, the decision of the District Court in

such proceeding shall be final and no further

proceeding by way of revision shall be

entertained by the High Court or any other Court.

Hence, contrary to the submission of opposite

party no. 7, the relevant juncture is not the

commencement of the revisional application but if

and when a decision is taken thereon by the

District Court.

Sub-section (4) of Section 115A of the

Code only elaborates the scope of sub-section (3)

and restricts any further application by the same

party to the alternative forum, which has to be

read in the light of sub-section (3).

In such view of the matter, the argument of

the opposite party no. 7, that the present revision

under Section 115 of the Code is not

maintainable in law, although interesting, is not

tenable in the eye of law.

Moreover, the opposite party no. 7 itself

took the objection before the District Court as

regards the maintainability of the revisional

application before the said court on the ground of

pecuniary jurisdiction. Although such point was

erroneous in law and the plaintiff should have

been wiser in not following such erroneous legal

advice, it is not for the opposite party no. 7 to take

advantage of its own wrong, since it ought not to

be permitted to blow hot and cold at the same

time regarding the objection as to lack of

jurisdiction of the District Court. Such conduct of

the opposite party no. 7 negates any negligence,

if at all, on the part of the petitioner. Even if there

was negligence of sorts, the same was due to the

misleading objection taken by the opposite party

no. 7 and cannot be held to be deliberate on the

part of the petitioner.

That apart, the co-ordinate Bench of this

Court, in its order passed in the previous

application under Article 227 of the Constitution,

instead of converting the revisional application to

one under Section 115 of the Code, particularly in

view of the usual practice in this Court to describe

such applications under Article 227 of the

Constitution to fall under the civil revisional

jurisdiction, and specifically directing the

petitioner to approach the District Court under

Section 115A of the Code, it cannot at all be said

that the petitioner was at fault in following such

observations. The 'fault', if any, was on our part

and the same cannot be shifted upon the

petitioner.

In such view of the matter, as the petitioner

has made out a sufficient case for the delay

occasioned in preferring the present revisional

application, CAN 1 of 2020 is allowed, thereby

condoning the delay in filing C. O. No. 1437 of

2020 and entertaining the said revisional

application for being heard.

There will be no order as to costs.

Re: C.O. 1437 of 2020

The present revisional application is

directed against an order whereby the plaint filed

by the plaintiff/petitioner under Order VII Rule 11

of the Code of Civil Procedure was rejected.

Learned senior counsel appearing for the

petitioner argues that the plaint does not disclose

a cause of action and is palpably barred by law.

Learned senior counsel places reliance on

several paragraphs of the plaint, in particular

paragraph nos. 3, 4, 5, 8, 9, 10 and 11, along with

the reliefs prayed for, in support of his

submissions.

Learned counsel further submits that, as

per the pleadings of the plaintiff himself, the

petitioner was initially one of the directors of the

Keshore Trading Company Private Limited and

later on resigned from the directorship of the said

company. Admittedly, the defendant no. 2

remained a director of the said company. It is

further averred in the plaint that there was no full

and final settlement of accounts of the assets of

the company. However, the plaint goes on to

assert that the plaintiff as well as the defendant

no.2 were co-shares in respect of the suit

property, which are, evidently, the assets of the

company itself.

In paragraph no. 8 of the plaint, it has been

alleged that the defendant no. 2 has sold the suit

properties claiming to be the absolute owner

thereof and the plaintiff admitted the execution of

a deed of sale, challenging the same on the

grounds that it is illegal, void, ultra vires and not

binding upon the plaintiff and defendant no. 7. In

paragraph 11, however, the plaintiff claims to be

a co-sharer in respect of the suit property in his

individual capacity and have claimed such a

declaration in the suit, pertaining to 2/3rd share of

the properties as well as the movable assets of

the defendant no.1- company and have also

sought partition of such property.

Learned senior counsel contends, by

placing reliance on a judgment reported at AIR

1977 Supreme Court 2421( T. Arivandandam Vs.

T. V. Satyapal and another), in support of the

proposition that such vexatious and meritless suit

should be nipped in the bud. Learned counsel

further argues that, even on the basis of the plaint

pleadings, the suit is not maintainable in law, nor

does the plaint disclose any cause of action for

the reliefs claimed therein.

While controverting such submissions,

learned counsel for the opposite party no. 7

argues that the present revision is not

maintainable in the eye of law, in view of the

previous presentation of an application under

Section 115A of the Code of Civil Procedure

before the District Court, challenging the same

impugned order. By placing reliance on sub-

sections (3) and (4) of Section 115A of the Code

(as amended in West Bengal), learned counsel

submits that since a proceeding for revision was

commenced before the District Court, no further

proceeding could be initiated before this court or

any other court.

That apart, learned counsel submits that

the petitioner prayed, in the application under

Order VII Rule 11 of the Code, for rejection of the

plaint only against the defendant no. 3. It is

contended that a plaint cannot be partially

rejected, as is well-settled in law.

That apart, the petitioner has alleged in the

application for rejection of plaint that the suit

should be dismissed for "want of cause of action".

However, want of cause of action cannot be a

ground for rejection of the plaint. Only if no cause

of action is disclosed, can the plaint will be

rejected within the purview of Order 7 Rule 11 of

the Code. The court at such stage cannot go into

the merits of the matter to explore whether any

cause of action has actually been made out.

That apart, no specific bar of law exists to

preclude the plaintiff/opposite party no. 7 from

filing the suit. The general premise of the

petitioner's arguments, both in the court below as

well as this court, is that the suit is barred by

company law. Such vague allegation cannot be

lead to the rejection of a plaint.

Moreover, it is argued that the plaint

cannot be labelled as 'vexatious' from any

perspective.

Upon considering the submissions of

learned counsel for the parties, the validity of the

interpretation of sub-sections (3) and (4) of

Section 115 of the Code, as projected by the

opposite party no. 7, ought to be tested on the

anvil of law.

Although it is stipulated in sub-Section (3)

that, where any proceeding for revision is

'commenced' before the District Court, the

decision of the District Court on such proceeding

shall be final and (additionally) no further

proceeding by way of revision shall be

entertained by the High Court or any other court,

such expression should be interpreted in totality

and a stray phrase cannot be culled out therefrom

for being construed independently.

Sub-Sections (3) and (4), read as a whole,

clearly indicate that the bar envisaged therein is

in respect of the revisionist petitioner shopping

forums by exploring different courts having

concurrent jurisdiction. The clear intention of the

Legislature, as evident from the language of sub-

Section (3) of Section 115A, is that if there is any

conclusive finality by way of an order being

passed by one of the forums having concurrent

jurisdiction, the revisionist-petitioner cannot go

back and take a second chance before a different

forum exercising concurrent power of revision.

That apart, the specific term "entertained"

as used in sub-Section (3) of Section 115A, can

only signify a High Court taking up the revisional

application for being heard on merits, upon being

prima facie satisfied that there is an arguable

question involved.

In the present case, there was no scope of

entertaining the revisional application before the

withdrawal of the similar application under

Section 115A of the Code from the District Court.

Today, for the first time, the revisional application

was heard for the purpose of admission and

adjudication. Prior to that, it was accompanied by

an application for condonation of delay under

Section 5 of the Limitation Act, 1963, which

precludes any presumption that the revisional

application was entertained, since the revisional

application remained non est in the eye of law till

the application for condonation of delay was

allowed.

Since the condonation application has

been allowed only today, when the revisional

application under Section 115A stands withdrawn

long back, there was no question of prior

entertainment of the revisional application by this

Court. Hence, the same has been entertained

and heard only today, which obviates the bar

stipulated in Section 115A sub-Section (3) of the

Code.

As regards the merits of the matter,

irrespective of the stray phrase in the prayer

portion of the application under Order VII Rule 11

that the plaint should be rejected in respect of

defendant no. 3, such statement cannot be taken

out of context to mean that the petitioner prayed

for partial rejection of the plaint. There is ample

scope of multiple interpretations of the said

statement, one being that the application was

filed only by the defendant no. 3, which might

have prompted the said defendant to couch the

prayer in such language.

That apart, the language employed in an

application under Order VII Rule 11 of the Code

cannot be relevant for the purpose of a

consideration by the court under the said

provision. Order VII Rule 11 of the Code of Civil

Procedure permits the court, even suo motu, to

reject a plaint. An application under the said

provision can, at best, be for the purpose of

drawing the attention of the court to a particular

irregularity. Thus, the said contention of the

opposite party no. 7, regarding partial rejection

being sought, cannot be accepted.

On a plain and meaningful reading of the

plaint in its totality, it is evident from the entire

pleadings that the plaintiff admitted that the suit

property was purchased by one Keshore Trading

Company Private Limited, which is a company,

being an independent juristic entity in the eye of

law. Basic corporate jurisprudence demands that

a company has to be treated as an independent

juristic person, distinct and different from its

directors, in their individual capacities.

In view of the opposite party no. 7 having

claimed himself to be an erstwhile director of the

company, the plaintiff, ex facie, does not have

any locus standi to claim ownership of the assets

of the company, immovable and/or movable.

Nowhere in the plaint has the plaintiff

stated how he became an owner of the suit

property in his individual capacity, independent of

his directorship of the company-in-question. That

apart, even if such claim was made, it would be

mutually exclusive with the other pleading in the

plaint, to the effect that the suit properties are

assets of the company and belong to the

company. The two stands are mutually exclusive

and cannot be juxtaposed to give rise to a bundle

of facts which can be termed, in unison, as

"cause of action" for the reliefs claimed in the suit.

It is axiomatic in company jurisprudence

that the directors of a company cannot claim to

be the owners of the assets of the latter, which is

a separate juristic entity.

Moreover, there cannot arise any question

of seeking partition in respect of such assets by

one of the ex-directors of the company and/or

even any present director thereof, in their

individual capacity.

As far as the first relief claimed in the plaint

is concerned, the same, shorn of the other reliefs

(which have already been held above to be not

maintainable), would tantamount to a standalone

negative declaration, which cannot stand in law

on its own footing. Such being the case, the suit

was ex facie filed mala fide and with the

vexatious intention to harass the defendants.

As such, the suit should be nipped in the

bud by rejecting the plaint instead of compelling

the defendants to go on litigating unnecessarily

and indefinitely on a harassive cause of action.

Moreover, the revisionist petitioner is

justified in contending that the plaint does not

disclose a cause of action, at least for the reliefs

claimed in the plaint and, hence, is barred under

Order VII Rule 11 of the Code. That apart, the

proposition that a company is a juristic entity, is a

basic, axiomatic and cardinal principle of

corporate jurisprudence, which has been

reflected in manifest manner in the entire

Companies Act, 2013 as well as its previous

version of 1956.

Even otherwise, it is well-settled that no

relief can be granted on mutually exclusive claims

made by the plaintiff.

Keeping in view the above discussions, the

plaint in Title Suit No. 231 of 2011 ought to have

been rejected. The trial court refused to exercise

jurisdiction vested in it by law in rejecting the

petitioner's application under Order VII Rule 11 of

the Code instead.

Accordingly, C. O. No. 1437 of 2020 is

allowed, thereby rejecting the plaint of Title Suit

No. 231 of 2011 pending before the Civil Judge

(Senior Division), Third Court at Howrah.

Interim orders, if any, passed in the

present proceeding and/or the suit, thus, stand

automatically vacated.

There will be no order as to costs.

Urgent photostat certified copies of this

order, if applied for, be made available to the

parties upon compliance with the requisite

formalities.

(Sabyasachi Bhattacharyya, J.)