JUDGMENT
Manmohan Sarin, J.
(1) By this order, I would be disposing of an application No. 1199/96 moved by the plaintiff seeking inter alia ex parte interim mandatory direction for return of the Dornier 228-202 Aircraft leased to the defendant in terms of the lease agreement dated 23-7-1994.
(2) The above application has been filed in a suit for possession, permanent and mandatory injunction under the Specific Relief Act. The above suit was instituted by the plaintiff on 3-2- 1996. The suit had come up before the Court on 5- 2-1996, when plaintiff was directed to produce proof of service of the notice of termination of the agreement and place on record documents and the correspondence, relied on in suit. On 7-2- 1996, on the apprehension of the plaintiff that the defendant would cannibalize the Aircraft and remove and/or replace valuable parts, the Court restrained the carrying out of annual maintenance by the defendant on 7-2-1996. After hearing both the parties, vide order dated 8-2-1996 and on defendant’s “No objection”, a nominee of Director General of Civil Aviation was appointed as Receiver for taking possession of the Aircraft. The pleadings were thereafter completed and arguments on the application commenced on 22-4-1996.
(3) Counsel for both the parties were heard and the matter was adjourned from time to time to enable the counsels to complete their submissions. During the course of arguments on 22-5-1996, plaintiff placed on record a copy of the power of attorney authorizing the institution of the suit by Sh. Ashok Marwaha and his affidavit in support thereof was also filed. Thereafter, the plaintiff on 24-5-1996, moved an amendment application to add an averment to the effect that Sh. Ashok Marwaha was authorized to sign, verify and institute the plaint. The orders were reserved on 24-5-1996 in I.A.I 199 of 1996.
(4) Let me set out the plaintiff’s case in brief. The plaintiff vide a lease agreement dated 23-7-1994, leased one used Dornier 228-202 Aircraft to the defendant. The lease is for a period of 60 months, having a rental of Us $20,000 payable on the first of the month. In addition to rental and other charges, the defendant was to pay Us $ 160 per hour as flying charges. The lease contract was entered into pursuant to the open sky policy of the Government of India, by which private air taxi carriers were granted licences and permitted to purchase and/or take on lease Aircrafts and operate them on specified routes. The approval’ of the Reserve Bank of India was obtained vide letter dated 10-2-1995 for the lease agreement and payment of rental and ther charges. The Aircraft was delivered on 25-2-1995 to the defendant company, who confirmed that it was in complete conformity with specifications. The first flight was carried out by the defendant on 24-3-1995.
(5) The lease agreement dated 23-7-1994 entered into is a comprehensive agreement. The lease provides for numerous contingencies, apart from the rental and other charges payable, the terms for maintenance, warranty, replacement of parts, return of Aircraft etc are set out in detail.
(6) The plaintiff’s case in brief is that the defendant has been in persistent and continuous default of its obligations under the agreement. It has failed to comply with the fundamental term, regarding payment of rental. It is averred that a sum of Us $ 291792.33 towards lease rental is due from the defendant. The plaintiff has given sufficient latitude to the defendant to make payment. Revised payment schedule was discussed and agreed to, but the defendant has neglected to pay any of the amounts admittedly due. Not a single payment has been made. Yet the defendant continues to use the Aircraft for commercial purposes to its exclusive gain and advantage. In these circumstances, the defendant was declared to be in default and the agreement was terminated vide a notice of 18-1-1996, served on the Managing Director of defendant on 2-2-1996. In terms of Clauses 17.01 and 17.02 of the agreement, the defendant was bound to pay the outstanding lease rentals and return the Aircraft immediately. The plaintiff is entitled to repossess the Aircraft. Copy of the agreement dated 23-7-1994, the notice terminating the agreement and calling upon the defendant to return the Aircraft, have been produced. Relevant correspondence and other documents on which the plaintiff relies have also been produced. The plaintiff is the lessor under the agreement, while the owner is Deutche Financial Services Holding Corporation. The plaintiff claims that attempts to repossess the Aircraft, met with resistance Hence the suit.
(7) It would be pertinent to notice the averment made in para 10 of the plaint, wherein plaintiff states that it is constrained to file the present suit for recovery of possession of the Aircraft under the Specific Relief Act and return of Aircraft in terms of the lease agreement as well as permanent injunction against the defendant restraining the use of the Aircraft. It is further averred that the agreement, having been terminated, the defendant has no right to use or operate the Aircraft or to retain its possession but is required to return the same under Articles 17 and 20 of the Lease Agreement. The plaintiff has valued the suit for the purposes of Court fee at Rs. 5,05,000.00 in respect of possession under the Specific Relief Act and paid Court fee of Rs.7300.00 . The suit is valued for the purposes of injunction at Rs. 500.00 and appropriate Court fee is claimed to have been paid.
(8) The prayers made in the plaint are not happily worded. A decree directing the return of the Aircraft to the plaintiff in terms of Article 17 and 20 of the lease agreement is sought. Further a decree for mandatory and permanent injunction commanding the defendant to discharge its obligation to return the Aircraft in terms of the lease agreement. A decree for permanent injunction restraining the defendant from operating, flying or utilizing the Aircraft in any manner whatsoever and from damaging the said Aircraft etc. The defendant has filed its written statement contesting the suit and raising a number of preliminary objections to the maintainability of the suit as instituted and framed. Parties were also permitted to file list of events as well as additional documents..
(9) Before dealing with the objections to the maintainability, of the suit, which I shall separately deal with, let me notice the defendant’s case as set out on merits. The defendant’s case is that its Managing Director Sh. V. Madan was induced to abandon his lucrative consultancy business by the representative of the plaintiff one Sh. Ashok Marwaha, who led the plaintiff on the garden path to set up the present venture. The defendant’s Managing Director claims to have liquidated his assets and those of his relatives and friends, to set up the present air tax service on the assurance that the plaintiff would supply two Dornier Aircraft in very good, reliable and dependable condition on very reasonable terms. The defendant claims to have signed on the dotted line the agreement that was presented to him for signatures with aplomb and fanfare amidst video cameras and flags of the countries being displayed. The defendant assails the agreement as completely one sided and containing the unconscionable terms, which deserve to be severed from the rest. The defendant claims that the Aircraft supplied was a .defective one, which resulted in the same being grounded for 130 days from 19-4-1995 to 30-1-1996. The Aircraft had major defects, technical Rmi conductors becoming -unserviceable, Cockpit Voice-Recorder not working, radar not working, batteries being unserviceable and snag in the landing gears. The defendant in addition is sough t to be foisted with liability to the tune of Us $ 127084, for replacement of unserviceable parts, which the defendant is not liable to pay. It is claimed that as a result of Aircraft being grounded for so many days, bookings were cancelled, passengers had to be accommodated in hotels and the defendant was subjected to losses. It is further claimed that the monthly rental agreed was Us $ 10,000 and not Us $ 20,000. The receipt of notice of termination of the notice is denied. It is claimed that termination is unlawful as the plaintiff has failed in its obligation with regard to supply of a dependable and reliable, good Aircraft and instead had supplied a defective rather junk Aircraft, which required heavy replacement of parts. The plaintiff also did not supply the history cards and list of components as required.
(10) Mr. R.P. Bansal, Senior Counsel in his inimitable style summarizes the defendant’s case by saying that it had entered into a contract for acquiring a milk yielding cow, while in its place a dead goat has been supplied. Mr. Bansal also criticizes various provisions of the agreement which are completely one sided and claimed to be unconscionable. It was also urged by Mr. Bansal that the plaintiff had not come to the Court with clean hands and had concealed from the Court that it had already encashed the bank guarantee for Us $ 1,00,000. Further there was a sum of Us $ 45623 kept in Escrow Account, which would be available to the plaintiff as soon as the tax clearance were obtained. It was urged nothing was due and payable to the plaintiff. On the other hand, if rentals were correctly computed at Us $ 10,000 P.M. and credit was given for the period the Aircraft remained grounded, it is the plaintiff who would owe money to the defendant for the losses caused. Not- withstanding the foregoing, Mr. Bansal argued that the defendant’s Managing Director who had started a new venture and staked his entire career and life savings, was still willing to give a fair trial to the venture, provided the plaintiff would not hinder the operation for sometime and give time to the defendant company to recover its losses and then attempt to make the venture successful and meet the plaintiff’s claims.
(11) Parties also filed their respective Statement of Accounts and have addressed me thereon. Learned counsel for the plaintiff in reply submitted that the Domier Aircraft is one of international repute and infact about 60 of the said Aircrafts were being used by the Indian Airforce, Coast Guards, Indian Navy and Jagsons Airways, successfully and without any difficulty. The said Aircraft was manufactured by the group which manufactures Merceedes Benz Car also. Learned counsel also submitted that the plea raised by the defendant of having been misled by undue influence and misrepresentations to enter into an agreement were wrong. There had been elaborate discussions and deliberations prior to entering into the agreement. Drafts of the lease deed was also circulated. The plea of undue influence, mispresentation and fraud was totally devoid of any merit. As regards the Aircraft, learned counsel pointed out that the Aircraft had been certified as air worthy by the Director General Civil Aviation. It was denied that there were any defects in Aircraft. The reasons for grounding of the Aircraft were totally attributable to business reasons and snags that were avoidable and had occurred on account of the defendant’s failure to procure and stock recommended spares as also to maintain the Aircraft properly. However, the plaintiff purely as a gesture of goodwill and with a view to help the defendant to overcome its difficulties, gave credit for two months rent, though the same was not admissible under the terms of the agreement. As regards the monthly rental, it was submitted that reduction in the rent from Us $ 20,000 to Us $ 10,000 was to come into the effect, if the defendant had procured and taken on lease two Dornier Aircraft. The condition precedent that had been agreed for reduction in the rental to Us $ 10,000, never came into being and therefore, there was no question of the rental being concluded at Us $ 10,000 P.M. The defendant relied on a Fax dated 27-10-1995, purported to have been sent by plaintiff agreeing to reduction in rental of Us $ 10,000. The plaintiff claims the same to be a forgery and has pointed out discrepancies therein. Learned counsel also referred to correspondence in particular appearing at page 15 and 72 of the documents, which referred to a joint technical audit that had been carried out to determine and ascertain the reasons for the grounding of the Aircraft pursuant to its.credit as aforesaid had been given. Reference was made to the minutes of meeting dated 25-10-1995 appearing at page 71 as well as a letter dated 1-12-1995, to urge that as a result of the joint technical audit, the flight cancellation for technical reasons were found to be for 24 days which included the grounded days that had been caused on account of the failure of the defendant to keep minimum stocks of spares and follow instructions. The said letter also dealt with and explained that the rental continued to be Us $ 20,000.
(12) Learned counsel for the plaintiff has drawn my attention to some of the dates on which the defendant claimed that the Aircraft remain grounded e.g-12-7-1995 to 16-7-1995 and on 28-7- 1995 to 31-7-1995. The log books revealed that on the contrary the Aircraft had been flown on the said dates.
(13) I have carefully considered the rival contentions as well as perused the correspondence referred to and the agreement terms. The defendant from the date of the Aircraft being leased has not made any payment towards rental as per the lease agreement i.e. Us $ 20,000. The contingency in which the rental was to be reduced to Us $ 10,000 did not come into existence. The plaintiff in an attempt to continue with the lease, had earlier given a revised schedule for payment to the defendant which was also not adhered to. The defendant as per the minutes of 25-10-1995 i.e. revised schedule was to make payment of Us $ 48,200 by October, 1995 which was not made. The plaintiff vide its letter of 1-12-1995 called upon defendant to make payment immediately of Us $ 84,990 which was also not made. Besides the plaintiff with a view to redress the defendants’ grievances had given a credit for two months rental, which would more than compensate the defendant for the alleged defects in the Aircraft, which the joint technical audit found to have grounded the Aircraft for 24 days. As regards replacement of unserviceable parts, the same is in accordance with the terms of the agreement. Regarding the plea that defendant had been induced by misrepresentation, undue influence to enter into the agreement, having unconscionable terms, the same appears to be devoid of substance and merit. The lease agreement was admittedly signed on 23-7- 1994. The Aircraft was delivered in February, 1995. The defendant had more than adequate time to protest if he had any reservations with regard to any of the terms or conditions of the agreement. Infact there is an element of contradiction, in as much as the defendant submits that he is still willing to work the agreement and give it a fair trial. This is despite all the claims of the Aircraft being junk and not a reliable one. Infact, the defendant made no payment on signing of agreement. As per the defendant’s own version Us $ 1,94,232 were due as on 30-1-1996 against which defendant seeks to adjust the Bank Guarantee amount of Us $ 10,000, which was encashed and Us $ 45623 in Escrow Account and lease rental for grounded days. The only payment made by the defendant is in the Escrow Account which cannot be released to plaintiff till defendant obtains permission from Central Board of Direct Taxes. The plaintiff in these circumstances, when the rentals and other charges continued to mount and remain outstanding was justified in encashment of the bank guarantee for Us $ 1,00,000. The encashment of bank guarantee was in accordance with terms and conditions of the agreement. The same cannot be regarded as a valid tender. It was rather a payment in sufferance. I, therefore, hold the defendant to be prima facie in default of the fundamental terms regarding pay- ment of rent and other charges. Termination of the agreement would, therefore, be lawful.
(14) Let us now consider the objections as to the maintainability of the suit as well as the question whether an interim mandatory direction at this stage should be given permitting the plaintiff to repossess the Aircraft.
(15) Learned counsel for the defendant argued that the suit was yet to be tried and granting of the relief of possession of the Aircraft would amount to decreeing the suit without trial. Learned counsel for the defendant also argued that the defendant had set up a defense which needed trial and consideration and evidence to be led. Further that the plaint as filed suffered from serious incurable defects. It was no plaint in the eyes of Law. In this connection, Learned counsel pointed out that the plaint did not even state as to who was instituting the plaint, and how he derived the authority to institute the said plaint. There was no resolution of the Board of Directors authorizing institution of the suit or authority in favour of signatory to the plaint to institute the suit. The verification was also not in accordance with law and amounted to no verification. The identity of the person verifying the plaint is not disclosed. Learned counsel for the plaintiff submitted that the plaintiff has produced on record a power of attorney dated 1-3- 1996, issued in favour of Sh. Ashok Marwaha, who had signed and instituted the plaint. The said power of attorney ratifies all acts done by the said attorney. Further that an amendment application I.A. No. 5000/96 had been filed to include the averment that the plaint was being instituted by Sh. Ashok Marwaha, who had been authorized by a competent officer to sign and verify the plaint and all other applications with regard to the suit. The power of attorney dated 1-3-1996 that has been filed is issued by the Vice President, Finance and Vice President, Corporate and General Affairs of the plaintiff. Plaintiff has also filed on record an earlier power of attorney dated 18-1-1996 in favour of Sh. Ashok Marwaha that had been issued by Ppa K.G. Kolenda Ppa B. Moldenhauer on behalf of the plaintiff. The plaintiff has placed on record a letter dated 28-5-1996 setting out that the power of attorney in favour of the authorized signatories is published in commercial register maintained under the German Commercial Code. Counsel for the defendant has pointed out that the power of attorney dated 1-3-1996 and the earlier power of attorney dated 18-1-1996 are issued by different persons. He claims that the said documents are false and manipulated ones.
(16) Learned counsel for the defendant relied on M/s. Nibro Limited Vs. National Insurance Co. Ltd reported at in support of his contention that the authority to institute a suit on behalf of company is not a technical matter. It has far reaching effect and authorization to institute the suit by Board of Directors and authorization is required to be given to a Director, Principal Officer or Secretary.
(178) Learned counsel for the plaintiff cited and relied on the decision of Seth Kripal Chand Vs. Traders -Bank Ltd. reported at Air 1954 J & K 45 and All India Reporters Ltd Vs. Rama Chandra reported at 1961 Bombay 292. In the first case, the Court allowed an application for amendment by which Bank was allowed to plead that the action of the manager in signing and verifying the plaint had been ratified by a resolution of the Board of Directors. The second authority is cited to support the contention that the defects in presentation of the plaint, signing and verifying are not fatal and these can by cured after institution. Even oral authorization by a duly empowered authorized Director under the Articles of Association to another person to sign. and verify the plaint could be valid. I am of the view that in the instant case, the plaintiff shall have to prove that the plaint has been signed, verified and instituted by a duly authorized person. The authorizations, powers of attorney will have to be proved. The amendment application will have to be considered. The plaintiff cannot be non suited at this stage. The objections can be considered during trial. Having regard to the nature of the suit and the attendant circumstances and the relief sought, these objections should not come in the way of granting of interim relief to advance the interest of justice.
(18) Interim relief even if it is similar to the final relief which is sought in the suit, can be granted in special circumstances and appropriate cases. Reference may be usefully made to the observations of the Apex Court in Dorab Cawasji Warden Vs. Coomi Sorab Warden and Others reported at 1990 S.C. 867, wherein the Apex Court considered the grant of. mandatory direction to the purchaser to vacate the premises i.e. a joint family dwelling house. The Apex Court after noticing few English decisions observed that ‘The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it .to a party .who succeeds or would succeed may equally cause great injustice or irreparable harm, courts have evolved certain guidelines. Generally stated these guidelines are: (1)The plaintiff has a strong case for trial. This is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction. (2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money. (3) The balance of convenience is in favour of the one seeking such relief. Being essentially an equitable relief the grant of refusal -of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the Court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive or complete or absolute rules, and there may be exceptional circumstances needing action, applying them as pre-requisite for the grant or refusal of such injunctions would be a sound exercise.
Similarly in Indian Cable Company Limited Vs. Smt. Sumitra Chakraborty reported at 1985 Calcutta 248 the Court while dealing with the case of a landlady who had taken possession of the tenanted premises during the continuance of the tenancy, wrongfully and by abuse of the criminal process, directed restoration of possession. The Court observed that : In my opinion, the principle on the point as it emerges on review of the authorities thereon is that if a court is called upon to grant any relief on any interlocutory application which when granted would mean granting substantially the relief claimed in the suit, the court will be very slow and circumspect in the matter of granting any such prayer. It is indeed true that such a relief should be granted only in exceptional cases. Though exercise of such a discretion should be limited to rare and exceptional cases, still at the same time no court should think, as has been the view taken by the learned Subordinate Judge, that in law there is any absolute bar to the court granting such a relief. In deserving cases, the court should not hesitate to come in aid of litigant and uphold the cause of justice by granting such a relief. What is that rare and exceptional case is must be left to the discretion of the Court. Reference may also be made to the decision of Ramamoorthy,J in Suit No. 334A/95 and I.As.1111/95, 1112/95, 2121/95 and 4109/95 wherein the learned Judge having found that the respondent has had the benefit of Aircrafts but not complied with terms of the agreement, directed the respondent to return the Aircrafts. This was a case wherein there was an arbitration agreement. An application had been made in the said proceedings before the Court for appointment of an Arbitrator and the said direction was given in an interim application by the Court.
(19) Let us consider the present case in the light of the observations made by the Apex Court. The defendant is admittedly in breach of the fundamental of terms regarding payment of rental and other applicable charges. In fact the defendant from the commencement of the lease has not paid any rental. The defendant had been given credit for two months rental for the days on which Aircraft was grounded, which the plaintiff claims was a gesture of goodwill. The defendant was given revised schedule of payment, which it again failed to meet. The termination of the agreement was lawful and justified. The defendant is bound under the terms of the agreement to return the Aircraft which it has not done. The defendant cannot be permitted to use and operate the Aircraft. The defendant on the one hand assails the agreement as unconscionable and having been obtained by misrepresentation and undue influence. On the other hand it describes the Aircraft as defective and piece of junk .but wants to operate the Aircraft and give it a fair trial. The plaintiff has thus especially a strong prima facie case justifying the return of the aircraft.
(20) Notwithstanding the protest of the plaintiff, during the course of the arguments, I had put to the defendant ‘s counsel whether defendant would clear the outstandings and give a definite plan tor-payment. The defendant’s response was that it would deposit around Us $ 30,000 and make efforts to clear the outstandings in future if it was allowed to operate the Aircraft without any hinderance. There was no commitment with regard to the furnishing of the bank guarantee which is required during the currency of the contract for a sum of Us $ One lac. The plaintiff on its part was clear that the business confidence has been shattered by repeated defaults and the defendant had gone to the extent of deriding the plaintiff’s Aircraft in press. Plaintiff only wanted repossession of the Aircraft in terms of the agreement. The Director General of Civil Aviation, whose nominee had been appointed as a Receiver has already addressed a communication to the Registrar of this Court expressing the difficulty being faced and the lack of infrastructure to look after the Aircraft and seeking to be relieved of the said obligation. It is stated that they do not have the manpower to carry out the maintenance and upkeep of the Aircraft. The trial of the suit would take considerable time and in case the Aircraft is left in disuse, it would deteriorate burdening the plaintiff with extra liability.
(21) Considering the above facts and circumstances, this is a fit case where interim mandatory directions for return of the Aircraft to the plaintiff are called for. The plaintiff would otherwise suffer irreparable injury. The balance of convenience is also in favour of the plaintiff. In these circumstances, I direct that the nominee of the Director General of Civil Aviation, who had been made the Receiver to handover the Aircraft Dornier 228-202 to the plaintiff or its authorized representative.
(22) As the plaintiff is being given possession at the interim stage, it shall not alienate or dispose of the Aircraft or take it outside the country during the currency of suit, without the leave of the Court. The plaintiff shall be free to operate or lease the Aircraft. Certain directions are also called for to provide for the eventuality of the plaintiff either not prosecuting the suit or ultimately failing in the suit. In either of the events, the defendant may be entitled to restitution for the unexpired portion of the lease. The plaintiff, therefore, shall furnish a security of Rs.75 lakhs to the satisfaction of the Registrar to secure the restitution of the Aircraft within ten days for the above eventualities.
(23) It would also be expedient to give directions with regard to the objection taken by the defendant on the valuation of the suit and the Court fee paid by the plaintiff. I find that this is a suit where the plaintiff is seeking in substance, repossession of the Aircraft pursuant to termination of the lease agreement. The suit is essentially one of repossession of movable property, even though the reliefs in the nature of mandatory and permanent injunction have also been sought. The suit would fall within Section 7(iii) of Court fees which is as under:- "(III)In suits for movable property other than money where the subject matter has a market value according to such value at the date of presenting the plaint." The plaintiff in my view is accordingly bound to pay Court fee at the market value of the Aircraft. The plaintiff is therefore, directed to pay Court fee on the market value of the Aircraft as on the date of institution. Let the Court fee be paid within a period of ten days and shall therefore, file a certificate from Registered Valuers giving the market value of the Aircraft in question on the date of institution of suit as verified by the Director General Civil Aviation and make up this deficiency in Court fee within ten days. (24) The interim directions given with regard to the possession of the Aircraft being handed over to the plaintiff by the Receiver shall come into effect on the plaintiff having furnished the security as well as making payment of the Court fee as aforesaid.