ORDER
1. This revision arises out of the order dated 6-4-2001 in CMA No. 15 of 2001 on the file of the Court of the 1st Additional Chief Judge. City Civil Court, Secunderabad, allowing the appeal filed by the respondents – plaintiffs against the order dated 8-2-2001 in IA No,t954 of 2000 in OS No. 1556 of 2000 on the file of the Court of XI Junior Civil Judge, City Civil Courts, Secunderabad.
2. For the sake of convenience the parties would hereinafter be referred as they are arrayed in the trial Court.
3. The plaintiffs (respondents 1 to 6) filed OS No. 1556 of 2000 against the revision petitioner (2nd defendant) and the 7th respondent (1st defendant) seeking a decree of perpetual injunction restraining them (defendants) and their men from interfering in any manner with their possession and enjoyment of the suit schedule property, i.e., western wing of the 1st floor of “May Fair” building, bearing Municipal No.1-8-303/34, S.P.Road, Secunderabad, (hereinafter called the suit property) especially from locking the door way leading to the suit property, and filed IA No.1954 of 2000 therein seeking an interim injunction against the defendants during the pendency of the suit. On behalf of both the defendants K.K.Sharma, the power of attorney of the 2nd defendant (revision petitioner) filed his counter-affidavit. Thereafter, Mukund Kakani filed his counter-affidavit captioning it as the counter-affidavit on behalf of the 1st defendant (7th respondent), fully supporting the case of the plaintiffs. Before the trial Court (Court of Junior Civil Judge) on behalf of plaintiffs Exs.Al to A6 were marked on behalf of the 2nd defendant (revision
petitioner) Exs.B6 and B12 were marked and on behalf of Mukund Kakani, representing the 1st defendant, Exs.B1 to B5 were marked. The learned Junior Civil Judge by his order dated 8-2-2001 dismissed the said IA. Aggrieved thereby the plaintiffs filed CMA No. 15 of 2001 before the Court of the 1st Additional Chief Judge, City Civil Court, Secunderabad, which was allowed by the order under revision. Hence, this revision by the 2nd defendant.
4. The case, in brief, of the plaintiffs is that the suit property stands in the name of plaintiffs 1 to 3 jointly. During 1990-91, first defendant, a private limited company with two Directors, viz., 2nd defendant and Mukund Kakani, obtained office accommodation in the suit property on sharing basis, on an annual rent of Rs.30,000/ – which was being enhanced from time to time and by 1997-98 the rent was Rs.90,000/-per annum. Since by 30-11-2000 the arrears of rent due from the 1st defendant was Rs.2,40,000/-, Mukund Kakani as and so as Director incharge of the ! st defendant, by his letter dated 30-11-2000 surrendered possession of the tenancy rights of the office accommodation of the 1st defendant in the suit property on 30-11-2000, undertaking to settle the rent account at a later date. In view of the internal disputes between the 2nd defendant and Mukund Kakani, about which plaintiffs came to know subsequently only, 2nd defendant seems to have approached the police and had on 26-12-2000 high handedly obstructed the staff of the plaintiffs concern from entering into the suit property by blocking their access. Hence the suit for injunction.
5. K.K.Sarma, power of attorney ofthe 2nd defendant, on behalf of the 2nd defendant and also representing the 1st defendant, filed his counter-affidavit dated 18-1-2001 on 19-1-2001, inter alia alleging that 2nd defendant got the 1st defendant incorporated as a private limited
company under the Provisions of the Companies Act with its registered office at Ashoknagar, ‘May Fair Complex’ of which the suit property is a part constructed by the 1st plaintiff. Mukund Kakani, Ghanshyam Jaju, who is the Managing Partner of the 1st plaintiff and a relative of Mukund Kakani are also share holders of the 1st defendant. At the time of construction of ‘May Fair Complex’, 2nd defendant paid substantial amounts to the 1st plaintiff, for purchase of office space in its 1st and 2nd floors and spent about Rs.16 lakhs for interior decoration, furniture, fixtures, etc., of the suit property on behalf of the 1st defendant and shifted the administrative office of the 1st defendant into the suit property in 1989. Since 2nd defendant was looking after the affairs of other companies he entrusted the affairs relating to bank transaction, etc., of the 1st defendant to Mukund Kakani, and came to know during October, 2000 that Mukund Kakani was misappropriating the amounts of the 1st defendant and floated various companies like Godavari Drugs, etc.. with the help of Ghanshyam Jaju with the profits earned by the 1st defendant and started carrying on the operations of Godavari Drugs Limited and other sister concerns from the suit property, where the administrative office of the 1st defendant is situated, and requested therefore Mukund Kakani to produce accounts books etc., of 1st defendant for verification, who gave evasive answers and postponed settlement of various issues, and did not even attend the requisition meeting of the Board of Directors of 1st defendant fixed on 22-12-2000. In the extraordinary meeting of 1st defendant held on 29-12-2000 in the suit property since he (K.K Sarma) was inducted as a Director of the 1st defendant, Mukund Kakani in collusion with the plaintiffs by creating a letter addressed to his wife showing that possession of the suit property was surrendered to her, filed the suit and with the help of the employees of Godavari Drugs Limited and
other unsocial elements, removed some files and documents belonging to the 1st defendant with a view to destroy them. The furniture, fixtures, fittings belonging to the 1st defendant are still in the suit property. Since 2nd defendant, in his personal capacity, purchased office space from the 1 st plaintiff under an agreement of sale and paid substantial amount towards sale consideration, by creating a letter of surrender written by Mukund Kakani in favour of his wife plaintiffs are trying to throw out the 2nd defendant from the suit property under the guise of the suit. Rent was being paid only because title did not pass on to 2nd defendant, though he paid substantial amount of the sale consideration. Mukund Kakani, who is a partner of the 1st plaintiff and Director of the 1st defendant, used to fix, and enhance the rents on his own without any resolution of the Board of Directors of 1st defendant. So, the petition has to be dismissed.
6. Mukund Kakani had on 22-1-2001 filed his counter-affidavit purporting to be on behalf of the 1st defendant, entirely supporting the case of the plaintiffs and countering the averments in the counter-affidavit filed by K.K.Sarma on behalf of defendants.
7. The point for consideration is whether the respondents are entitled to the injunction sought?
8. It is an admitted fact that Mukund Kakani plaintiffs 2 and 3, and Ghanshyam Jaju, Managing Partner of the 1st plaintiff are all very closely related and that plaintiffs 1, 4 to 6 are their family concerns. The only outsider in this case is the 2nd defendant. As stated earlier, though the counter-affidavit of K.K.Sarma dated 18-1-2001 was filed with the heading ‘counter-affidavit filed on behalf of the respondents1 with the rubber stamp ‘for Helical Tubes and Ducts Private Limited’, (1st defendant), surprisingly Mukund Kakani filed his counter-affidavit
on 22-1-2001 as though it is the counter-affidavit filed on behalf of the 1st defendant, entirely supporting the contentions of the plaintiffs and denying the allegations in the counter-affidavit filed by K.K.Sarma. It is also very pertinent to note that 1st plaintiff is a firm, but not a company incorporated under the provisions of the Companies Act. It is well known that a firm, unlike a company, is not a body corporate, and is not a legal person as such, and is not different from its partners. It consists of the individual partners for the time being, each representing the others as their agent. A company, being a body corporate, is in an artificial person and is different firm its members and share holders constituting it, unlike a partnership. Therefore, 1st plaintiff is not different from its partners and so all partners of the 1st plaintiff should be deemed to be plaintiffs in the suit. It is only by virtue of Rule 1 of Order 30, CPC a firm can maintain a suit in its name, though it is a suit by all the partners of the firm. Similarly, property purchased or standing in the name of the firm belongs to all the partners and not to the ‘firm’ as such, because firm is not a ‘person’. From Ex.A1 it is seen that Ghanshyam Jaju, Mukund Kakani and Kamala Jaju are the partners of the 1st plaintiff and are residents of House No.1-8-211 at Penderghot Road, Secunderabad. In fact, Ghanshyam Jaju, Managing Partner of 1st plaintiff, 3rd plaintiff who is the wife of Mukund Kakani, are also shown as residents of H.No.1-8-211, Penderghot road, Secunderabad, in the plaint also. Therefore, it is clear that apart from being a partner of the 1st plaintiff, Mukund Kakani along with his wife, 3rd plaintiff, is living in the same house in which Ghanshyam Jaju i.e., Managing Partner of the 1st plaintiff is residing. In para 3 of the plaint, it is stated that plaintiffs 4 to 6 (i.e., M/s Godavari Drugs, Godavari Capitals Limited and M/s Godavari Homes Limited represented by the Director Ghanshyam Jaju), are the family concerns of Ghanshyam Jaju, Managing
Partner of the 1st Plaintiff. Therefore the affidavit of Mukund Kakani, who is staying in the same house as that of the Managing Partner of 1st plaintiff, and who also is a partner of the 1st plaintiff, filed after the affidavit of K.K.Sarma, power of attorney of the 2nd defendant, was filed entirely supporting the case of the plaintiffs, has to be taken into consideration with great care and caution, and cannot be accepted on its face value, more so when there is a categorical averment in the plaint that differences cropped up between Mukund Kakani and 2nd defendant the only Directors of the I st defendant.
9, The sheet anchor of the case of the plaintiffs is ExA2, a letter dated 30-11-2000 said to have been given by Mukund Kakani, as Director of the 1st defendant, in favour of the 3rd plaintiff who is his wife. From the order of the trial Court and the order under revision it is seen that the contention before them was that 3rd plaintiff is the landlady of the 1st defendant in respect of the suit property, and so the 1 st defendant, can always surrender possession of the suit property to her through Mukund Kakani. Neither the plaint nor the affidavit filed in support of IA No.1954 of 2000 contain an averment that 3rd plaintiff let out the suit property to the 1 st defendant. In fact Mukund Kakani also did not allege in his affidavit that since his wife is the landlady of the 1st defendant, he had surrendered possession of the suit property to her on behalf of the 1st defendant. The allegation in the plaint reads as though plaintiffs 1 to 3 inducted the 1st defendant into possession of the suit property as their tenant. So, plaintiffs 1 to 3, but not 3rd plaintiff alone, are the lessors or landlords of the 1st defendant in respect of the suit property. Therefore, Mukund Kakani, as a partner of the 1st plaintiff, also would be one of the landlords of the 1st defendant. 1st defendant being a company incorporated under the provisions of the Companies Act is, no doubt,
a juristic person, and is different from its two Directors Mukund Kakani and 2nd defendant and the other share holders. It being a juristic person cannot act on its own and somebody has to act on its behalf. Therefore whether the action of Mukund Kakani allegedly surrendering possession of the suit property on behalf of 1st defendant, as its Director is binding on the defendants or not is the short point which falls for consideration for disposal of this revision.
10. The contention of Ms. Anasuya, learned Counsel for 2nd defendant, is that Ex.A2 is brought into existence by Mukund Kakani in collusion with his wife the 3rd plaintiff, to defraud defendants and that as matter of fact there is no surrender of possession of suit property since all the office furniture, fixtures, etc., worth several lakhs belonging to the I st defendant are still there in the suit property and therefore defendants, more particular the 2nd defendant who is a Director of the 1st defendant, cannot be restrained from entering into the suit property. It is her contention that Mukund Kakani, brought Ex.A2 into existence subsequently after 2nd defendant gave a police report about the loss of office files, account books etc., belonging to the 1st defendant, and so the order under revision is not sustainable. The contention of Sri Venugopal, learned Counsel for the plaintiffs, is that since 1st defendant was unable to pay huge arrears of rent, Mukund Kakani, who admittedly has been looking after the management of the 1st defendant, thought it prudent to surrender possession of the suit property to the landlady-3rd plaintiff, and 3rd plaintiff accepted the surrender and inducted other tenants into the suit property, and when 2nd defendant high handedly tried to enter into possession of the suit property by bringing unsocial elements, plaintiffs had to file this suit, and contended that since the appellate Court gave cogent reasons for its conclusions, there
are no grounds to interfere with the order under revision. The contention of Sri Satish appearing on behalf of Mukund Kakani who, claiming to be representing the 1 st defendant, is that the fact that 3rd plaintiff happens to be the wife of Mukund Kakani can have no bearing on a decision in the case, because Mukund Kakani was acting as Director of 1st defendant, but not as the husband of the 3rd plaintiff, in the best interests of the 1st defendant. It is his contention that since there was pressure for enhancement of rent and since more than Rs.2,40,000/- is due to 3rd plaintiff as arrears of rent from the 1st defendant, Mukund Kakani, as Director incharge of the affairs of 1st defendant, thought it prudent to secure accommodation at a cheaper rate for housing the administrative office of the 1st defendant, and took a decision to surrender the suit property and to shift the administrative office to a new premises and acted accordingly. He contended that as per Article 54 of the Articles of the Association of the 1st defendant, i.e., (Ex.B5) Mukund Kakani, as Director incharge of the affairs of the company or the acting Managing Director, has every right to take a decision to surrender possession of the suit property and that no resolution of the Board of Directors is necessary to shift the Administrative Office of a Company.
11. As contended by Sri Satish, on behalf of Mukund Kakani, it is true that no resolution of the Board of Director is necessary for shifting Administrative Office of a Company, as in the case of a Registered Office. But, the question in this case would be whether the Administrative Office of the 1 st defendant was shifted from the suit property and when it was shifted.
12. Ex,B3 balance sheet as on 31 -3-2000, relating to the 1st defendant for the year 1999-2000, shows that a sum of Rs.1,80,000/-was due and payable by the 1st defendant as
rent. It also shows that the written down value of the furniture and fixtures was Rs.1,89,175/- and the real value as Rs.8,96,307/-. It is relevant to mention that there is no averment either in the plaint or in the affidavit filed in support of his IA No. 1954 of 2000 that any of plaintiffs had spent some amount for fixtures or for furnishing the suit property. But, significantly, Mukund Kakani, obviously to explain away the statement in the counter-affidavit filed by K.K.Sarma, while admitting the spending of about Rs.8.5 lakhs towards furniture and fixtures for the period 1987-88 to 1990-91 alleged in para 8 of his affidavit that that amount includes the expenditure for Asia Coffee Limited floated by 2nd defendant, and that the 2nd defendant pressurised him to show the entire expenditure in the books of account of 1 st defendant, and that he obliged the 2nd defendant to have cordial relationship with 2nd defendant and for the smooth running of the 1st defendant company. Though the question whether the said averment is true or not, need not be considered for deciding this petition the same is adverted to only to show the attitude of Mukund Kakani in this case. The fact remains that Mukund Kakani had shown that a sum of more than Rs.8 lakhs was spent for the furnishings and decoration of the office of the 1st defendant in the suit property from about 10 years prior to filing of the suit, and that the written down value thereof by 30-3-2000, was Rs.1,189,175/-.
13. Ex.B12 Directors’ report to the share holders of the 1st defendant, prepared by Mukund Kakani on 5-9-2000, filed before the Registrar of Companies on 30-11-2000 and registered by him on 15-12-2000, shows that the 20th Annual General Meeting of the members of the 1st defendant was called for and held on 30-9-2000 at 11-00 a.m., at May Fair Complex, SP.Road. In para 9 of the his affidavit, Mukund Kakani alleged:
“I further submit that in the year 2000 after signing the latest balance sheet for the year, on 5-9-2000 the 2nd respondent started acting detrimental to the interests of the 1st respondent company with illegal motives. Having come to know that the deponent herein had almost made the 1st respondent debt free company, the 2nd respondent with motive to take over the management of the company had got issued a notice through one of the share holders Sri K.K. Sarma
From what date after 5-9-2000, 2nd defendant started “acting detrimental to the interests” of the 1st defendant, and what those detrimental acts are, are not either adverted to or explained or stated in his affidavit by Mukund Kakani. Since 2nd defendant promoted the 1st defendant company, without prima facie material it is difficult to believe that 2nd defendant acted detrimental to the interests of 1 st defendant company after signing the balance sheet on 5-9-2000. If those alleged detrimental started before 30-9-2000, the same would have been discussed in the General Body Meeting held on 30-9-2000. Significantly as to when he realised that the rent being paid for the suit property is very high, and that the Administrative Office can be shifted to some other cheaper place, is not stated in his affidavit by Mukund Kakani, Since, the Annual General Body Meeting of the 1st defendant was held on 30-9-2000, if before that date the said realisation came to Mukund Kakani, he would have, as any ordinary prudent Director of a Company, discussed the issue in that General Body Meeting. What are the circumstances that forced or prompted him after 30-9-2000, to come to a decision that it would be prudent to surrender the lease hold right of the suit property are not even stated in his affidavit by Mukund Kakani. What is stated in para 6 of the affidavit filed in support of IA No. 1954 of 2000, is:
“By the end of March, 2000 the respondents were due Rs. 1,80,000/-towards arrears of rent. By 30-11 -2000, the arrears mounted to Rs.2,40,000/-. Therefore Sri Mukund Kakani, Director incharge of the 1st respondent surrendered possession/tenancy rights of the office accommodation on 30-11-2000 undertaking to settle rent account at a later date.”
There is not even a whisper either in the plaint or in the above affidavit that there was a demand for enhancement of rent by the plaintiff or that the rent being paid by the 1st defendant is less than the market rate, or the rent being paid by the other tenants in ‘May Fair’ complex. But, surprisingly, Mukund Kakani in para 5 of his affidavit stated :
“due to financial constraints the 1st respondent company got indebted to the tune of Rs.2-4 lakhs lower a time and the amount indebted is as on 30-11-2000. There was demand from the 3rd petitioner for increase in rent of the premises. Since this was not in the interest of the company, it was thought fit to surrender the premises rather than increasing the rent and thereby incurring additional losses. Therefore, this issue was discussed among the Directors and thereafter the said premises was surrendered to the 3rd petitioner under letter dated 30-11-2000. The 3rd petitioner had acknowledged the deliver of the possession.”
(Underlining mine).
And towards end of para 17 of the said affidavit it is stated-
“…..in the earlier times also
where the company had shifted its administrative office from time to time there was no written notice given to the Directors. It was decided by the Directors in a meeting and the said act was implemented by the deponent in the capacity of Director incharge…..”
It is thus seen that it is Mukund Kakani only, but not the plaintiffs, that stated that there was a demand for enhancement of rent by 3rd plaintiff, who as per the allegations in the plaint, is only a co-owner of the suit property. A reading the underlined portion of the affidavit of Mukund Kakani extracted above, shows that there was a discussion among the Directors of the 1st defendant. If there was a consensus between the two Directors of the 1st defendant why would 2nd defendant object shifting? It is also significant that the date on which the issue was discussed by the Directors is not mentioned in the affidavit of Mukund Kakani. In tune with the contention of Mukund Kakani and not the case projected by the plaintiffs in the plaint, in Ex.A2 there is a recital that “since it is not possible to pay on par with the rents that are being paid by the other tenants in the same building”, lease hold right of the suit property is being surrendered. As alleged in the affidavit of Mukund Kakani if there was a decision of the Director of the 1st defendant to surrender the tenancy 15 days notice, as contemplated by Section 106 of Transfer of Property Act, would have been given by the 1st defendant. It is to be noted that no ordinary prudent landlord would accept surrender unexpectedly, and without notice from the tenant. Since in para 6 of the affidavit in support of IA No.1954 of 2000 extracted above and in the affidavit of Mukund Kakani extracted above also it is stated that the arrears of rent as on 30-11-2000 was Rs.2,40,000/- and since Mukund Kakani alleged in his affidavit that in view of those arrears a decision was taken, to surrender the tenancy the inference that can be drawn would be that the alleged decision and discussion of the Directors of 1st defendant took place only on 30-11-2000, and was immediately implemented by Mukund Kakani on 30-11-2000 without even a day’s delay, which is difficult to believe or accept.
14. In Ex.A2, it is mentioned that vacant possession was taken on 1-12-2000 by the 3rd plaintiff. It is the specific case of Mukund Kakani that he had taken another premises on lease for locating the Administrative Office of the 1st defendant at Ranigunj under the original of Ex.B1, which is dated 21-12-2000. Will any ordinary prudent long-standing tenant surrender possession of the demised premises without securing an alternative accommodation and then look for accommodation? The answer would have to be ‘no’ because in cases of voluntary surrender, normally, a tenant would not surrender possession without securing an alternative accommodation. Ex.Bl shows that possession of the premises was handed over on that day i.e., 21-12-2000, and that tenancy will commence from 1-1-2001, which clearly shows that possession of the premises covered by Ex.B1 was taken over only on 21-12-2000. If Ex.A2 were to be true and genuine, from where did the Administrative Office of the 1st defendant work, and where were the records of 1st defendant kept from 1-12-2000 to 21-12-2000? Significantly Mukund Kakani did not explain in his affidavit as to where the files and documents, account books etc., of the 1st defendant were kept and from where he was transacting the affairs of the 1st defendant between 1-12-2000 to 21-12-2000. It is very easy to bring into existence a document like Ex.A2 at any time by Mukund Kakani and 3rd plaintiff. In the above circumstances, prima facie, it is difficult to believe that 1st defendant surrendered possession of the suit property on 1-12-2000, as mentioned in Ex.A2.
15. It is no doubt true that in the absence of a contract to the contrary, if the tenant does not remove the fixtures before vacating the demised premises the landlord would be entitled to those fixtures as per Section 108(h) of Transfer Property Act. But no ordinary prudent lessee would of his
own accord and volition voluntarily and willingly surrender possession of the tenanted premises leaving valuable fixtures and even without claiming some amount from the landlord, even if they are not removable. If they are removable, he would remove the fixtures and furnishings and take them away. As stated above, even as per EB3 balance sheet of the 1st defendant, which admittedly was got prepared by Mukund Kakani himself, shows that the written down value of the fixtures was over Rs.1,80,000/-by 31-3-2000. As per the averments in the plaint, the 1st defendant was running its office along with other offices in the suit property. From the sketch of the suit property filed with the plant and marked as Ex.A6, and the averments in the plaint, it has to be inferred that the furnishings, fittings, etc., made by the 1st defendant were for the entire suit property and not in a portion thereof, more so because there is no averment in the plaint or the affidavit filed in support of this IA that plaintiffs 4 to 6 spent some amount for furnishing the suit property. It is well known that the market value of a property would be more than its written down value shown in the income tax returns. So, as any ordinary prudent Director incharge of the affairs of the 1st defendant, when he wanted to surrender possession of suit property, and when instances are galore of tenants squatting on the demised premises without even paying rent driving the landlords to Courts and making all sorts of efforts to retain possession, would not Mukund Kakani as an ordinary prudent man voluntarily, surrendering tenancy right insist on the landlords setting off at least a portion, it not the entire written down value of the fixtures and furnishings left behind, towards the arrears of rent due and payable by the 1 st defendant for the suit property. No ordinary prudent tenant would leave the fittings, furnishings and fixtures of the value of nearly rupees two lakhs, and undertake to pay the arrears of over Rs.2 lakhs, even without
making a request to set off at least a part of the value of the fixtures etc., left behind. Therefore, Mukund Kakani leaving the furnishings and fittings etc., whose written down value itself is more than Rs.1,80,000/-by 31-3-2000, surrendering possession and undertaking to pay entire arrears of rent even without making a request to set off some amount, is highly improbable, and cannot be said to be an act of an ordinary prudent Director incharge the affairs of a company. If he had really done so he should have done it only because he is a partner of the 1st plaintiff, and since the 3rd plaintiff is his wife, and therefore cannot but be said to have acted against the interests of the 1st defendant. If the demised property with such fixtures, etc., were elsewhere, and Mukund Kakani were to surrender possession of such property he, definitely, would not have surrendered possession, voluntarily leaving valuable fixtures and furnishings as he allegedly had done in respect of the suit property, on behalf of the 1st defendant.
16. Sri Venugopal, on behalf of plaintiffs, contended, and very rightly, that plaintiffs are not concerned with the contentions regarding the meetings of the first defendant company, as it is unnecessary for disposal of this case, and since the case of the plaintiffs rests on Ex.A2 and since the doctrine of indoor management applies. Sri Satish, raised various contentions with regard to the extraordinary meeting of the 1 st defendant called on the notice issued by K.K.Sarma and the induction of K.K.Sarma in the Board of Directors, by referring to the various provisions of the Companies Act, which are also referred to in the order under revision. All those contentions have no relevance for a decision in this case, more so because a suit in respect thereof admittedly is pending. So, I am not going into the question whether the induction of K.K.Sarma as a Director of the 1st defendant is valid or not in this revision. But, I am not able to refrain from
adding that all the contentions raised by Sri Satish establish that all is not well between Mukund Kakani and 2nd defendant, and that each is trying to over reach the other. This fact also strengths the doubt being entertained by me about the genuineness of Ex.A2.
17. Article 54(2) (c) and (e) of the Articles of Association (Ex.B5) relied on by Mr. Satish in support his contention that as Director incharge of the affairs of 1st defendant, Mukund Kakani, has power to surrender possession is, prima facie, unacceptable, because Article 54(2) reads:
“The Managing Director, shall without prejudice to the generality of the powers conferred by these presents have and exercise, subject to the supervision and control of the Board of Directors and subject to the provisions and restrictions contained in the Act, in respect thereof, the following powers namely :
……………………….
It is thus clear that the powers of the Managing Director are subject to the supervision and control of the Board of Directors. In fact, that must be the reason why, Mukund Kakani alleged in his affidavit, extracted above, the issue of surrender was discussed by the Directors. By the date of Ex.A2, there were only two Directors to the 1st defendant, i.e., Mukund Kakani and 2nd defendant. It is the specific case of 2nd defendant that with a view to defraud him, Mukund Kakani must have brought Ex.A2 into existence and that possession of suit property in fact was not surrendered by the 1st defendant. It is the case of Mukund Kakani that he surrendered possession. Thus, out of the two Directors, one Director i.e., Mukund Kakani, who is the husband of the 3rd plaintiff and a partner in the 1st defendant, is supporting the contention of the plaintiffs 1 to 3 that he (Mukund Kakani) as Director of the 1st
defendant surrendered possession, whereas 2nd defendant is denying the said fact. The factum of surrender, in the circumstances above stated, has to be proved by acceptable evidence at the time of trial. The rents being received by the other tenants of 1st plaintiff in ‘May Fair complex’ would be a matter of record in the shape of account books and income tax returns. Similar is the case of rents being paid by plaintiffs 4 to 6 also. Unless documentary evidence is adduced the question as to the rents being paid by other tenants in ‘May Fair complex’ cannot be decided.
18. In the order under revision, the learned appellate Judge by making a reference to the averments in para 5 of the counter-affidavit of K.K. Sarma that Mukund Kakani was looking after the maintenance of accounts and bank transactions of the company, and taking into consideration the fact that Mukund Kakani alleged that he took a premises at Ranigunj at a very low rate on 21-12-2000, after vacating the suit property on 30-11-2000, and the fact that the 2nd defendant gave a police report about the missing of the files, held at page 25 of the order under revision that the 2nd defendant practically admitted that the administrative office of the 1st defendant was shifted to Al Karoom Trade Centre subsequent to 30-11-2000, and held at page 26 of the order under revision that the 1st defendant never claimed that:
“they have left any fixtures or furniture or other fittings in the schedule premises. Even if it is taken, without admitting, that the above fittings are left in the schedule premises, the 1st respondent at the most can seek the permission of the Court or the landlord to permit them to take them away”.
The said observation is untenable, and must have been made without keeping in view the fact that the affidavit of Mukund Kakani supporting the plaintiffs case was filed after
K.K.Sarma filed has counter-affidavit on behalf of the defendants, and therefore had to be read cautiously and cannot be taken its face value. The learned appellate Judge was also in error in assuming in para 37 of the order under revision that the case of the 2nd defendant is that 3rd plaintiff or (plaintiffs 1 to 3) have forcible evicted the 1st defendant from the suit property, 2nd defendant nowhere admitted that 1st defendant is out of possession of the suit property.
19. The following observation of the learned appellate Judge in the order under revision reading:
“the status of the 3rd petitioner as the wife of Mukund Kakani cannot be a disqualification for her to resume her own premises^ Since she or other co-owners cannot be put to hardship or trouble with the inter se dispute between Mukund Kakani and the 2nd respondent who are the Directors of the 1st respondent company”.
(Underlining mine).
Shows that the learned appellate Judge did not keep in view the fact that it is not the case of the plaintiffs that 3rd plaintiff is the exclusive owner of the suit property and that 1st plaintiff is a partnership concern in which Mukund Kakani is also a partner, and that the wife of Mukund Kakani i.e., 3rd plaintiff is only a co-owner of the suit property along with plaintiffs 1 and 2, and so Mukund Kakani, who admittedly is not friendly with the 2nd defendant, has every possibility to collude with his wife, the 3rd plaintiff and plaintiffs I and 2 with a view to put 2nd defendant to inconvenience.
20. Surprisingly inspite of K.K. Sarma alleging in para 4 of his counter-affidavit.
“Mr. Challa Rajendera Prasad paid substantial amounts to the 1st petitioner company at the time of construction of
May Pair complex for purchasing office space in the 1st and 2nd floors …..”
and in para 9 –
“….. the promoters and Directors of
the respondent company entered into agreement with the 1st petitioner herein and paid some amounts towards consideration, took the possession of the premises and put the 1st respondent company in possession of it. As the title of the property has not been transferred so far, the respondent company is paying rents to the petitioner.”
the learned appellate Judge in para 38 of the order under revision observed that the contention of 2nd defendant that there is an agreement to sell is unsupported by pleadings, obviously failing to keep in view the above averments in the counter-affidavit of K.K.Sarma filed on behalf of defendants.
21. Freeman and Lockyer v. Buckhurst Part Properties (Mongol) Limited and another, (1964) 2 WLR 618, Mohta Alloy and Steel Works v. Mohta Finance and Leasing Limited, (1997) 89 Company Cases 227, and British Thomson Hustan Company v. Fcdcrablcd European Bank Limited, 1993 (Company Cases 106), relied on by Sri Satish, on behalf of Mukund Kakani, have no relevance for a decision in this case for the reasons stated earlier. Admittedly, Mukund Kakani is one of the partner of the 1st plaintiff. 2nd plaintiff is the son of the managing partner of the 1st plaintiff and 3rd plaintiff is the wife of Mukund Kakani who is a partner of the 1st plaintiff. Mukund Kakani is also a Director in the 1st defendant company. Even according to Mukund Kakani there are disputes between him and the 2nd defendant who is the only other Director of the 1st defendant. It is difficult to believe that 3rd plaintiff, who described herself as a house-wife and is the wife of Mukund Kakani, would have acted on her
own without any guidance from Mukund Kakani, her husband. The observation of the learned appellate Judge in para 43 of the order under revision that plaintiffs being the real owners are entitled to assume that they were dealing with a person who had the authority on behalf of the 1st defendant to surrender possession of the schedule property, because Mukund Kakani was dealing with the affairs of the 1st defendant from the beginning, cannot but be said to be erroneous because plaintiffs I to 3 are not strangers to Mukund Kakani, who is a partner in 1st plaintiff. Since Mukund Kakani is the agent of other partners of 1st plaintiff as per the Partnership Act, all the partners of 1st plaintiff and the 3rd plaintiff being the wife of Mukimd Kakani can be imputed with knowledge about the running of the 1st defendant, and the disputes between Mukund Kakani and the 2nd defendant. Therefore, the ratio in the above decisions cannot be applied to the facts of this case. In the circumstances of the case the possibility of bringing Ex.A2 into existence under legal advice cannot also be ruled out.
22. The observation of the learned appellate Judge in 44 of the order under revision that Ex.B1 discloses that the 1st defendant vacated the ‘suit property’ must have been made without going through Ex.Bl, because there is no reference to the suit property, or its being vacated by the 1st defendant in Ex.B 1. After differences cropped up between him and the 2nd defendant, and after 2nd defendant issued Ex.B9 notice on the basis of Ex.B8 requisition of K.K.Sarma, it is very easy for Mukund Kakani to bring into existence a letter like Ex.A2, and later search for a premises and execute a lease deed like Ex.Bl on behalf of 1st defendant. So merely on the basis of Ex.Bl, it cannot be inferred that the office of the 1st defendant was vacated from the suit property by 21-12-2000, more so because, as stated
earlier, the affidavit of Mukund Kakani is silent as to where the administrative office of the 1st defendant was located between
1-12-2000 and 21-12-2000.
23. The observation of the learned appellate Judge in para 47 of the order under revision that 2nd defendant cannot question the action of surrender and that Mukund Kakani is not prohibited from surrendering tenancy, only shows that he did not keep in view the averments in the affidavit of Mukund Kakani that he surrendered the tenancy right pursuant to a decision taken after a discussion among the Directors in a meeting of course without giving the date of such meeting. The sympathy expressed by the learned appellate Judge in para 49 of the order under revision towards owners of buildings, can have no relevance to this case because 1st plaintiff is a firm in which Mukund Kakani is a partner, and that 2nd plaintiff is the son of Managing Partner of the 1st plaintiff, and 3rd plaintiff is the wife of Mukund Kakani, who is at logger heads with his only other Co-Director of the 1st defendant i.e., the 2nd defendant. I must observe that the learned appellate Judge was in error in observing in Para 50 of the order under revision that the 2nd defendant admitted that the files from the suit property were already shifted to Alkareem Trade Centre, because none of the exhibits marked, nor the affidavit of K.K.Sarma on behalf of 2nd defendant, contain such an admission. In fact, in para 9 of Ex.B7, there is specific reference to purchase of portions of 1st and 2nd floor of May Fair complex. In view of the above it is clear that the finding of the learned appellate Judge in para 52 of the order under revision on point No.1 that “Mukund Kakani was absolutely justified in surrendering the possession of the suit property under Ex.A2 dated 30-11-2000” is based purely on surmises and conjectures, and is made without any evidence on record, and therefore is not sustainable and is liable
to be set aside and is set aside, and consequently the findings on points 2 and 3 framed by him, cannot but be held to be erroneous and hence are liable to be set aside and are set aside.
24. During the course of arguments it is stated that 2nd defendant filed a suit in OS No.169 of 2001 against plaintiffs 1 to 3 seeking an injunction restraining plaintiffs 1 to 3 from interfering with his possession over the suit property, and that no interim orders were passed in the said suit as the trial Court is awaiting orders in this CRP. Plaintiffs 1 to 3 being co-owners of the suit property and plaintiffs 4 to 6 being the family concerns of the plaintiffs 1 to 3 can cause any amount of inconvenience to the defendants during the pendency of these two suits. Obviously, there is a scramble for possession between the parties to the suit, each party approaching the police for protection and filing suit, for injunction against each other. A Division Bench of this Court in Ravi Lakshmaiah v. Nagamotu Lakshmi, 1971 (2) An.WR 28, held that in a petition under Order 39, Rule 1, CPC, if the Court finds that there is a scramble possession, it would be justified in appointing a receiver to manage the property during the pendency of the suit even without an application under Order 40, Rule 1, CPC by any of the parties to the suit for that purpose. As stated above the question of surrender has to be decided only after trial and both the suits have to be tried together. In the circumstances of the case, I am of the opinion that this is a fit case for appointment of a receiver to manage the suit property during the pendency of the suit for the benefit of the party who ultimately succeeds in the suit. The point is answered accordingly.
25. When the matter came up before my learned brother B. Subhashan Reddy, on 19-4-2001, he made the following
observation :
2001(4) FR-F-13
“The order under revision is a reversing one and have already admitted the revision petition. In the face of the statement made by Mr. P. Venugopal that another tenant has been inducted into the suit premises, I am unable to grant any interim order. But, in the event of CRP being allowed, it cannot come in the way of restoration of possession in favour of the revision petitioner”.
26. During the course of arguments, it is stated that none except plaintiffs 4 to 6 are in possession of the suit property after the alleged surrender of the suit property by 1st defendant. Since admittedly plaintiffs 4 to 6 are the family concerns of plaintiffs 1 to 3, the rents that are being paid by plaintiffs 4 to 6 to the landlords would be a matter of record in the shape of account books of both the lessor and lessee, and their income tax returns also which would be a guide to know the rent being paid and the market rent of the suit property.
27. In the circumstances, the revision is allowed. The order under revision is set aside. The trial Court is directed to appoint an Advocate-Receiver to manage the suit property during the pendency of the suit by collecting rents from the existing tenants in the suit property and deposit the same into the Court for the benefit of the party who succeeds in the suit after trial. The trial Court is directed to club OS No.16 of 2001 with OS No.1556 of 2000 and try both the suits and dispose them of expeditiously, uninfluenced by the observations made above, which are made only for the purpose of disposal of this CRP at any rate, before the end of December, 2001. The costs of the proceedings throughout shall abide by the result of the suit.