Shoes East Ltd. vs Shri Jainender Jain And Shri ...
2002 Latest Caselaw 1316 Del

JUDGMENT

Dr. Mukundakam Sharma, J.

1. By this order I propose to dispose of the applications registered under Order 7 Rule 11 CPC read with Order 23 Rule 1 Sub-rule 4 CPC being IA No. 1722/2002 in Suit No. 1506/2001 filed on behalf of some of the defendants and also IA No. 1312/2002 in Suit No. 1508/2001 under Order 23 Rule (1)(4) CPC filed on behalf of some of the defendants. The plaintiff herein is common in both the suits. The applications are also similar in nature and, therefore, both the applications are disposed of by this common order.

2. The plaintiff herein earlier filed two suits before the Additional District Judge, which were registered as Suit No. 40/2001 and Suit No. 41/2001. The plaints of the said suits are annexed with the applications, which are under consideration.

3. The following reliefs were prayed for by the plaintiff in suit No. 40/2001 and the same are extracted here as they are relevant for the purpose of consideration of the application

"(i) A Decree of Declaration in favor of the Plaintiff Company and against the Defendants thereby declaring that the auction held on 28/1/2000 of the property bearing No. SFS-15, DSIDC Industrial complex, Nangloi, Delhi in favor of the Defendants No. 1 to 3 by the Recovery Officer is illegal, unfair, null and void and of no effect in law.

(ii) A Decree of Permanent Injunction in favor of the Plaintiff Company and against the Defendants thereby restraining the Defendants, their servants, agents, employees, officers, representatives, assignees or anybody claiming through them or on their behalf from getting the lease deed executed and registered in their favor from DSIDC and further from alienating, transferring, selling, mortgaging, letting, part with the possession or otherwise creating any third party interest of any nature whatsoever in the suit property bearing No. SFS-15, DSIDC Industrial Complex, Nangloi, Delhi."

4. Similarly, the following reliefs were prayed for by the plaintiff in suit No. 41/2001, which are extracted for the convenience:-

"(i) A Decree of Declaration in favor of the plaintiff company and against the Defendants thereby declaring that the auction held and conducted on September 27, 2000 as also on September 30, 2000 of the suit goods machinery in favor of the Defendants No. 1 to 3 is bad, unfair, illegal, null and void and of no effect in law.

(ii) A Decree of Permanent Injunction in favor of the plaintiff company and against the Defendants thereby restraining the Defendants, their servants, agents, employees, officers, representatives and/or anybody claiming through them or on their behalf from in any manner whatsoever alienating, transferring, selling, mortgaging, letting, parting with the possession or otherwise creating third party interest of any nature whatsoever in respect of the suit goods and the machinery.

5. Both the suits were listed before the Additional District Judge on 6.2.2001. The Additional District Judge ordered for registration of the suits and after hearing the counsel appearing for the plaintiff issued summons in both the suits and directed issuance of notice on the interim applications to the defendants. However, no injunction was granted by the Additional District Judge on the said date and only issued notice on the said injunction application. On 14.2.2001, counsel for the plaintiff made a statement that the plaintiff would be withdrawing the suit on the ground that there are some technical defects and sought for an adjournment to seek instructions from the plaintiff. There was no statement of the counsel that he would seek liberty to file a fresh suit. On 16.2.2001, when the suit was again listed before the Additional District Judge, it was again stated by the counsel appearing for the plaintiff that there are some technical infirmities in the suit and, therefore, he has instructions to withdraw the suit. Even on that day also no prayer was made that liberty be granted to the plaintiff to file fresh suits on the same cause of action. The suit was accordingly dismissed as withdrawn. Therefore, before the defendants could be served, the aforesaid suits were withdrawn by the plaintiff. Thereafter the plaintiff filed the present suits in this court with the following reliefs:

" SUIT NO. 1506/2001

i. A decree of Declaration in favor of the Plaintiff Company and against the defendants thereby declaring that the auction of the suit property, being raw material, stocks as also the plant and machinery lying in the premises bearing No. SFS-15, DSIDC Industrial Complex, Nangloi, New Delhi, held on 30.1.2000 by the Recovery Officer is illegal, unfair, null and void and of no effect in law.

ii. A Decree for Mandatory Injunction inter alia directing the Recovery Officer being Defendant No. 14 herein to re-auction the suit property being the raw material, stocks as also the plant and machinery lying at SFS-15, DSIDC Industrial Complex, Nangloi, New Delhi in the most genuine and fair manner.

" SUIT No. 1508/2001

i. A decree of Declaration in favor of the Plaintiff Company and against the defendants thereby declaring that the auction of the suit property, being Industrial Shed No. SFS-15, DSIDC Industrial Complex, Rohtak Road, New Delhi, held on 28.1.2000 by the Recovery Officer is illegal, unfair, null and void and of no effect in law.

ii. A Decree for Mandatory Injunction inter alia directing the Recovery Officer being Defendant No. 12 herein to re-auction the suit property being the Industrial Shed No. SFS-15, DSIDC Industrial Complex, Rohtak Road, New Delhi in the most genuine and fair manner.

6. After service of summons and notice on the defendants, the defendants have entered appearance and the aforesaid applications have been filed by some of the defendants praying for dismissal of the suits on the ground that the suits are barred under the provisions of Order 23 Rule 1 Sub-rule (3) and (4) CPC.

7. I have heard the counsel appearing for the parties on the aforesaid contentions raised on behalf of some of the defendants. In the Suit No. 1506/2001, the plaintiff has prayed or a decree of Declaration declaring that the auction of the suit property, being raw material, stocks as also the plant and machinery lying in the premises in the auction held on 30.1.2000 by the Recovery Officer is illegal, unfair, null and void.

8. It is necessary to mention at this stage that the aforesaid auction of the raw materials was done pursuant to the orders dated 7.1.2000 of the Supreme Court in SLP (C) 5214/1999 and dated 8.9.2000 in IA No. 9 in Civil Appeal No. 2536/2000. The Supreme Court earlier passed an order on 13.8.1999 directing sell of certain properties belonging to M/s M.S. Shoes (East), the plaintiff herein. The relevant portion of the order reads as follows:

"It appears that the ale which was directed to be held in the above said order was not held in view of the order dated 29.6.99 passed by the Presiding Officer, Debts Recovery Tribunal, New Delhi. However, the said order dated 29.6.99 has since been stayed by the Debts Recovery

of 1999 ..... We accordingly, direct that our order dated 14.5.99 directing the sale of assets should be implemented forthwith, the sale proceeds whereof shall be deposited in this Court which the Registrar (Judicial) shall deposit in a fixed deposit in a nationalised bank for a period of six months."

9. Having referred to the aforesaid earlier order, it was further ordered by the Supreme Court on 7.1.2000 that the sale would go on as per earlier directions of the Supreme Court and as scheduled and the sale proceeds thereof shall be deposited in the Supreme Court Registry.

10. In the subsequent order dated 8.9.2000, the Supreme Court held that in order that the auction-purchaser could have vacant possession of the property, a direction is issued to the Canara Bank to remove the goods and machinery within one month from the property sold. It was further held in the said order by the Supreme Court that the Canara Bank would be entitled to sell the goods and machinery under hypothecation by auction, at the cost and risk of debtors.

11. Pursuant to the aforesaid orders, the auction was carried out by the Recovery Officer and the said auction is under challenge in the present suits. As is indicated from the Reliefs extracted herein above, the earlier suits were also filed by the plaintiff wherein the first relief as prayed for in the said suits and the first relief prayed for in the present suits are identical in nature. In the said relief, the plaintiff has sought for a declaration declaring the auction to be null and void and illegal. In the present suits, the second relief that the plaintiff has prayed for is for a decree for mandatory injunction inter alia directing the Recovery Officer to re-auction the suit property being the raw material, stocks as also the plant and machinery in a genuine and fair manner. So far the second relief is concerned, it is to be noted that unless the first relief is granted, the second relief cannot be granted. Therefore, the second relief, as sought for, is entirely dependent on the grant or refusal of the first relief by this Court.

12. In the earlier suit, the plaintiff apart from relief A sought for another relief, namely, for grant of temporary injunction restraining the defendant from selling, transferring, alienating the suit property. In the said suit, no relief of ad interim injunction was granted and immediately thereafter the suit was withdrawn. While withdrawing the aforesaid suit, no liberty was prayed and availed of by the plaintiff. Although it was stated by the counsel that in view of infirmities in the suit, the plaintiff is withdrawing the suit, however it is not stated in the orders of the Additional District Judge that any such liberty to file a fresh suit was prayed for by the plaintiff. The suits were withdrawn without any liberty to file fresh suits on the same cause of action.

13. In that view of the matter, in my considered opinion, the provisions of Order 23 Rule 1(4) CPC are attracted. The relevant provisions read as follows:

"(4) Where the plaintiff -

(a) abandons any suit or part of claim under Sub-rule (1), or

(b) withdraws from a suit or part of a claim without the permission referred to in Sub-rule (3),

he shall be liable for such costs as the Court may award and shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim."

14. So far relief 'A' is concerned, in both earlier and the suits they are identical in nature whereas relief 'B' prayed for in the present suit is entirely dependent on grant of relief 'A' and, therefore, since the plaintiff had withdrawn the earlier suits without liberty to institute fresh suits in respect of the same subject matter, the present suits are barred under Order 23 Rule 1 Sub-rule 4 CPC read with Sub-rule 3 and, therefore, the plaints filed by the plaintiff in the present suits are liable to be rejected in view of provisions of Order 7 Rule 11 CPC.

15. There is another aspect, which requires attention at this stage. The present suits are filed by the plaintiff as is indicated above seeking for almost similar relies as sought for in the suits earlier filed before the Additional District Judge. However, in the present plaints, not a whisper has been made by the plaintiff about filing of the earlier suits in the court of the Additional District Judge. Since submit matters identical, it was necessary for the plaintiff to mention and disclose filing of earlier suits and its withdrawal. There is, therefore, suppression of materials facts by the plaintiff and it has not come with clean hands. This speaks volume with regard to the conduct of the plaintiff. Be that as it may, considering the entire facts and circumstances of the case and in the light of the discussion above, I pass an order rejecting both the plaints in the present two suits in terms of Order 7 Rule 11 of the Code of Civil Procedure. Both the applications are allowed and the suits stand closed.

Crl.M.(M) No. 717/2002 in Suit No. 1506/2001 and Crl.(M) M. No. 716/2002 in Suit No. 1508/2001

In view of the aforesaid order passed, counsel for the defendant states that he does not press these applications at this stage.