IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 20/08/2009 CORAM THE HON'BLE MR.JUSTICE K.CHANDRU APPLICATION No.1416 of 2009 AND O.A.NOS.961 AND 962 OF 2008 IN C.S.NO.804 OF 2008 ORDER
Application No.1416 of 2009 is filed by the defendant, seeking for the rejection of plaint in terms of Order 7 Rule 11 in C.S.No.804 of 2008.
2.The respondents are the plaintiffs. They have filed the suit in C.S.No.804 of 2008 for a judgment and decree, declaring that the compromise decree entered into between Srinivasan, Govindaswamy and the third party purchasers in consonance of the compromise decree passed in C.S.Nos.487 of 1998, 84 of 2002 and 920 of 2004, dated 15.2.2006 is null and void and not binding on the plaintiffs and also for a consequential permanent injunction restraining the defendants from interfering with the plaintiffs’ peaceful running of business and their tenants in ‘C’ schedule property which forms part of A and B schedule property and also for a permanent injunction restraining the defendants from alienating or encumbering A to C schedule properties to third parties.
3.It was stated that on 15.2.2006, a compromise decree was passed in C.S.Nos.487 of 1998, 84 of 2002 and 920 of 2004, by which the defendant had got a right over the suit properties. It is questioned by the plaintiffs by their various lease deeds. It is the plaintiffs, who are in possession of the suit properties. The fact that defendant had preferred Rent Control proceedings in the year 2008 against the plaintiffs, which are pending on the file of the XIII Small Causes Court, Chennai for eviction, shows that the plaintiffs are in continuous possession of the suit properties. The defendant was disturbing the possession of the plaintiffs and also intending to sell the suit properties. Hence the suit was filed.
4.Pending the suit in O.A.No.961 of 2008, the plaintiff/applicant sought for an order of interim injunction restraining the defendants from alienating or encumbering the A to C schedule properties. In O.A.No.962 of 2008, an interim injunction was also sought for restraining the defendant from interfering with the peaceful running of business in C schedule property, which forms part of A and B schedule properties.
5.In A.No.4144 of 2008, an order of interim stay of all further proceedings in Rent Control proceedings mentioned in D schedule preferred by the respondent/defendant on the file of the XIII Small Causes Court, Chennai was also sought for.
6.In all these applications, a common counter affidavit was filed by the respondent/defendant. The respondent/defendant have also taken out an application in A.No.1416 of 2009 for rejecting the plaint as noted already.
7.It was stated by the respondent/defendant that the suit itself is not maintainable, since the prayer is to set aside the decree on the ground that the compromise on which a decree was passed was not lawful. Order 23 Rule 3-A clearly prohibits any such suit. The applicants/plaintiffs are not parties to the compromise decree and they are not vested with any right of ownership of the suit properties. They cannot file the suit for declaration that compromise decree was null and void. It was also stated that the suit is barred by the provisions of CPC. The applicants/plaintiffs are also parties to Rent Control proceedings. The applicants are entitled to challenge the title of the respondent/defendant in respect of the property in Door Nos.809 to 812, Anna Salai, Chennai in Rent Control proceedings itself. A further prayer that the eviction proceedings pending in the Small Causes Court would be stayed is a gross abuse of process of law.
8.It was stated that the suit property mentioned in A schedule is situated at Door Nos.808, 809, 810, 811-L and 812-L, Mount Road, Chennai originally belonged to one Mouna Gurusamy. He executed a Will on 7.3.1948. The suit A schedule property is given to his grandson G.D.Narendran, who was then a minor. A probate, dated 6.2.1957 was granted on the basis of the Will and codicil. Durai Pandian, the father of G.D.Narendran was appointed as the executor of the estate. Subsequently, G.D.Narendran became major and the A schedule property is vested with him absolutely in terms of the Will. The said G.D.Narendran filed an application in A.No.1882 of 1963 in C.S.No.18 of 1962 before this Court, seeking permission to deal with A schedule property. By an order, dated 18.11.1963, this Court held that Narendran being the life estate holder, need not seek permission to deal with the property in which he has a life estate. It is open to him being the life estate holder to alienate any item of property belonging to the estate absolutely or mortgage any property of the estate of late Mouna Gurusamy.
9.It was further stated that the said order binds all and had become effective from 1963 onwards. After getting permission from this Court, G.D.Narendran executed 58 registered sale deeds, dated 18.05.1981 and 19.05.1981 and conveyed A schedule property in favour of one R.Srinivasan. The said Srinivasan purchased the property on “as is where is basis” along with the building from G.D.Narendran. He purchased the property together with the tenants who were occupying the said property in the year 1981. Subsequently, the said Srinivasan paid the deferred sale consideration mentioned in each of the 58 sale deeds and G.D.Narendran had executed valid receipts for the same. Notwithstanding the order of permission to sell the property, G.D.Narendran also affirmed in all 58 registered sale deeds that he had no male issues and in case if he has any issue, he will safeguard the title of Srinivasan to A Schedule property and perfect the same at his own cost and expenses, if so required.
10.Thus, Srinivasan became the absolute owner of A schedule property and he also obtained patta in his name. Srinivasan executed an irrevocable power of attorney in favour of the respondent/defendant’s father P.Govindasamy vide Power of Attorney dated 28.09.1989. Subsequently, the father of the respondent being desirous of selling a portion of the property to a third party, entered into an agreement. Certain disputes arose between the respondent’s father and the third party, which became the subject matter of a civil suit before this Court in C.S.Nos.487 of 1998, 84 of 2002 and 920 of 2004 and the connected applications. In these proceedings, a compromise was entered into between the parties. This Court, by an order, dated 15.2.2006, passed a judgment and decree in terms of the compromise memo.
11.By virtue of the said judgment and decree, the land ad measuring 11 grounds 1815 sq. ft. out of A schedule property was allotted to the respondent’s father P.Govindasamy. The remaining land was given to the third party purchaser. The respondent’s father subsequently executed a settlement deed, dated 26.02.2006 as document No.647/2006 and settled the entire property in favour of his wife Neelamegam, the mother of the respondent. Thereafter, the mother of the respondent registered a settlement deed, dated 27.7.2006 and settled the property in favour of the respondent. Thus, respondent/defendant had become absolute owner of the said property. He also obtained patta in his name for the entire 11 grounds 1815 sq.ft. The applicants 1 to 8 are tenants under the said property and they did not claim any ownership of the property. The respondent also stated that the present suit has been filed only to set aside the compromise decree between the parties and such a suit is not maintainable in terms of Order 23 Rule 3-A and hence the question of grant of any interim order did not arise.
12.Opposing the application for rejection of plaint, the respondents/plaintiffs have filed a counter affidavit, dated 27.04.2009. It was stated that the applicant/defendant has no locus standi to file the application as he is not the landlord of the plaintiffs’ for the suit property. The applicant/defendant has no valid right or title or interest over the suit property. The compromise decree, dated 15.02.2006 is nullity and not binding on the plaintiffs. G.D.Narendran was actually the life estate holder of the suit property covered under the Will and codicil of the testator Mounagurusamy of Neikkarapatti Zamin, Palani. The sale deed executed in favour of one Srinivasan by the said G.D.Narendran was not a valid document. P.Govindaswamy, a financier and the power agent of the purchaser Srinivasan and other third parties, purchased the suit properties and colluded together to knock down the rights of the plaintiffs. The compromise memo was entered into before this Court was a fraudulent compromise memo and based upon an incomplete sale deed. Since the said Srinivasan did not fulfill the conditions in the sale deed, the compromise memo was purely an agreement between the parties. In the compromise memo, there was no detail regarding an incomplete sale deed and the publication. The plaintiffs were the commercial occupants and tenants and are carrying on business in the suit property for more than 30 years. The applicant/defendant has no right under the compromise decree to interfere with the plaintiffs’ possession. It is only because, the plaintiffs were forced to file the suit.
13.In the injunction applications, the defendant has not filed any counter affidavit. This court has granted an interim injunction in O.A.No.962 of 2008 preventing the defendant from alienating and encumbering the suit property till 6.4.2009 based upon an undertaking given by the defendant’s counsel. It was also stated that prima facie there are no grounds to reject the plaint in terms of Order 7 Rule 11. The bar contained under Order 23 Rule 3-A CPC will not come in the way of this court examining the validity of the compromise decree and Section 109 of the Transfer of Property Act will not apply to the present case.
14.The defendant has also filed Rent control proceedings on the ground of demolition and reconstruction. The RCOPs are contested by plaintiffs and tenants. It was also stated that one Arun, who was running his business in the name and style of Super Enterprises as lessee under the 7th plaintiff H.Kanniyalal, colluded with the defendant and the defendant has filed RCOP No.60 of 2008 against him for eviction. The plaintiffs under various lease deeds and sale deeds have become lessees under Vummuddiars Manufacturing Co. Pvt. Ltd. The plaintiffs are lessees and have put up superstructure of shops and are doing business for many years. They have also got electricity connection. The application filed by them for staying the rent control proceedings was bona fide and they have right to seek for declaration. It was also stated that Srinivasan is not the absolute owner of the suit property and is a benami of one Govindasamy as his power of attorney agent dated 28.9.1981.
15.The respondents/plaintiffs have also filed O.A.Nos.961 and 962 of 2008 and A.No.4144 of 2008. The contention in the applications in O.A.Nos.961 and 962 of 2008 that there was an undertaking given by the respondent/defendant. However, it is contrary to the records as noted by this court, by its order, dated 10.06.2009.
16.The respondent/defendant has also filed a common counter affidavit, opposing the grant of any interim order in the present case.
17.Mr.Krishnasrinivas of M/s.S.Ramasubramaniam Associates, learned counsel appearing for respondent/defendant, gave a list of rent control proceedings pending before Small Causes Court. In RCOP No.55 of 2008 relating to Sarvamangal Textiles (fourth plaintiff), the RCOP was allowed on 14.7.2008 and an eviction has also been ordered. Similarly, in RCOP No.62 of 2008 filed against Tirupathi Enterprises (8th plaintiff), the maintainability issue regarding landlord tenant was decided and preliminary objection raised by the 8th plaintiff was overruled. He filed RCA and that was also dismissed on 5.2.2009 and the matter is pending before the Rent Controller. Likewise, the RCOP No.63 of 2008 relating to 6th plaintiff, Creative Books, was allowed on 19.12.2008 and no appeal was filed till date of the list. In all the cases, the plaintiffs are only tenants in the suit premises.
18.The respondent/defendant has also enclosed in the typed set various counter statements filed in the RCOP proceedings and various orders including the decision on maintainability of the landlord tenant issue by the Rent Controller.
19.Mr.Krishnasrinivas learned counsel for the applicant/defendant contended that the plaint will have to be rejected in the light of Order 7 Rule 11, since the suit itself is an abuse of process of court. Inasmuch as the contentions raised by the plaintiffs were rejected by the Rent Control Court, they cannot urge once again the same issue before this court by way of a civil suit.
20.In this context, he relied upon a judgment of the Supreme Court in M/s.East India Corporation Ltd. Vs. Shree Meenakshi Mills Ltd. reported in AIR 1991 SC 1094. In that judgment, the provisions of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 was examined and while examining Section 10(1), second proviso, the Rent Controller has power to decide the status of landlord. In paragraphs 8 and 9, it has been observed as follows:
“8.What is stated in the second proviso to S.10(1) is the sole circumstance in which the Civil Court is invested with jurisdiction in matters of eviction. But this jurisdiction cannot be invoked otherwise than as stipulated in the second proviso. This means that the condition precedent to the exercise of jurisdiction by a Civil Court is that the tenant should have denied the title of the landlord or claimed right of permanent tenancy and the Controller should, on such denial or claim by the tenant, reach a decision whether such denial or claim is bona fide. Upon such decision, the Controller must record a finding to that effect. In that event, the landlord is entitled to sue for eviction of the tenant in a Civil Court. Where these conditions are satisfied, the Civil Court will have jurisdiction to pass a decree for eviction on any of the grounds mentioned in S.10 or Ss.14 to 16, notwithstanding that the Court has found that the tenant’s denial of the landlord’s title does not involve forfeiture of the lease, or, his claim of right of permanent tenancy is unfounded. Except to this limited extent, the jurisdiction of the Civil Court in matters of eviction of a tenant is completely barred and the jurisdiction in such matters is vested in the tribunals set up under the statute.
9.Significantly, the jurisdiction of the Civil Court can be invoked only where the Controller comes to a decision, and record a finding, that the denial or claim by the tenant, as aforesaid, is bona fide. If the Controller were to come to the opposite conclusion, no question of invoking the jurisdiction of the Civil Court would arise. But the decision of the Controller is concerned solely with the bona fides, and not the correctness or validity, of the denial or claim for these difficult questions of title are by the statute reserved for decision by the appropriate Civil Court which is the more competent forum in such matters. (See the principle discussed in Magiti Sasamal V. Pandab Bissoi (1962) 3 SCR 673 : (AIR 1962 SC 547)). In such an event, the Civil Court will become competent to pass a decree for eviction on any of the grounds mentioned in S.10 or Ss.14 to 16. On the other hand, if the decision of the Controller is that the tenant’s denial or claim is not bona fide, the jurisdiction of the Civil Court cannot be invoked by the landlord and the Controller will then be the competent authority to order eviction, after affording the parties a reasonable opportunity of being heard, on any one of the grounds specified under the statute, including the ground that the tenant has, without bona fide, denied the landlord’s title of claimed right of permanent tenancy. What is significant is that the decision of the Controller, duly recorded by him, as regards the bona fide denial or claim by the tenant is the condition precedent to the invocation of power of the Civil Court. Any suit instituted by the landlord for eviction of a tenant from a building falling within the ambit of the Act, otherwise than as stipulated by the section is, therefore, incompetent for lack of jurisdiction of the Court and any decree of the Court in such a suit is null and void and of no effect.”
(Emphasis added)
21.The learned counsel further placed reliance upon the decision of this court in Lourduraj Vs. Hendry reported in MANU/TN/8533/2007 and referred to the following passage found in paragraph 21, which is as follows:
“21.No doubt it is true that when there is a bona fide dispute with regard to title, then the landlord has to approach only the civil court and not the rent control court. In the present case, I do not find any bonafide dispute regarding title and therefore the landlord need not approach the civil court for getting possession of the property. As per the proviso given under Section 10(1) of the Act, 1960 where the tenant denies the title of the landlord, the controller shall decide whether the denial is bonafide and if he records a finding to that effect, the landlord shall be entitled to sue for eviction of a tenant in a civil court. But if the court finds the denial is not bonafide then it can very well proceed with the matter and pass orders on merits. As already decided by me there are enough materials to show that the denial of the present landlord’s title by the tenant is not bonafide and therefore the tenant cannot contend that the present landlord should approach only the civil court.”
22.The learned counsel also submitted that order 23 Rule 3-A is a complete bar to the suit for setting aside the compromise decree. Since the plaintiffs have been non-suited before the Rent Control forum, they should not be allowed to institute the suit and it is a clear abuse of the process of this court.
23.Per contra, Mr.T.V.Krishnamachari, learned counsel for the plaintiffs/respondents, submitted that the suit for setting aside the compromise decree is maintainable under Order 23 Rule 3-A CPC. He placed reliance upon the judgment of this court in Jaswant Chand Vs. G.V.Films Limited and another reported in (2007) 7 MLJ 217. If a compromise decree was arrived at by pressure or influence, the suit is maintainable. The consent decree is a very creature of the agreement on which it is founded and is liable to be set aside on any of the grounds which will invalidate the agreement. He also, by relying upon the same judgment, stated that a fraud unravels everything and such a decree will be amounting to an abuse of the process of the court. The courts have got inherent power to set aside the order obtained by fraud.
24.The learned counsel for the plaintiffs also placed reliance upon the judgment of the Supreme Court in Ram Chandra Singh Vs. Savitri Devi and others reported in 2004-2-LW 70 for the purpose of showing that a fraud and justice never dwell together and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. If a judgment or decree is obtained by practising fraud on the court, principles of res judicata will not apply.
25.The learned counsel also relied upon the judgment of this Court in Chitra Construction Pvt. Ltd. and another Vs. S.Subramanyan & Co. reported in (2008) 5 MLJ 126 for the purpose that if there was misrepresentation and a decree is obtained on the basis of misrepresentation, then the courts are empowered to set aside such a decree.
26.The learned counsel lastly relied upon the judgment of the Supreme Court in A.A.Gopalakrishnan Vs. Cochin Devaswom Board and others reported in (2007) 6 MLJ 751 (SC). The following passages found in paragraph 11 of the said judgment may be usefully extracted below:
“11…..Order 23 Rule 3 of C.P.C. deals with compromise of suits. Rule 3A provides that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. We are of the considered view that the bar contained in Rule 3A will not come in the way of the High Court examining the validity of the compromise decree, when allegations of fraud/collusion are made against a statutory authority which entered into such compromise. While, it is true that decrees of civil Courts which have attained finality should not be interfered lightly, challenge to such compromise decrees by an aggrieved devotee, who was not a party to the suit, cannot be rejected, where fraud/collusion on the part of officers of a statutory board is made out. …”
27.Therefore, he submitted that the suit laid is perfectly valid. For rejecting a plaint, the suit averments alone will have to be taken into account and the question of considering the defence of the defendant cannot be taken note at this stage.
28.It is necessary to refer the leading judgment of the Supreme Court in Liverpool & London S.P. & I Association Ltd. Vs. M.V. Sea success I and another reported in (2004) 9 SCC 512 regarding the scope of invocation of the power under Order 7 Rule 11 CPC. In paragraphs 139, 140, 146, 147 and 149 of the judgment, it was observed as follows:
“Rejection of plaint
139.Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed.
Cause of action
140.A cause of action is a bundle of facts which are required to be pleaded and proved for the purpose of obtaining relief claimed in the suit. For the aforementioned purpose, the material facts are required to be stated but not the evidence except in certain cases where the pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence.
“146.It may be true that Order 7 Rule 11(a) although authorises the court to reject a plaint on failure on the part of the plaintiff to disclose a cause of action but the same would not mean that the averments made therein or a document upon which reliance has been placed although discloses a cause of action, the plaint would be rejected on the ground that such averments are not sufficient to prove the facts stated therein for the purpose of obtaining reliefs claimed in the suit. The approach adopted by the High Court, in this behalf, in our opinion, is not correct.
147. In D. Ramachandran v. R.V. Janakiraman this Court held : (SCC p.271, para 8)
“It is well settled that in all cases of preliminary objection, the test is to see whether any of the reliefs prayed for could be granted to the appellant if the averments made in the petition are proved to be true. For the purpose of considering a preliminary objection, the averments in the petition should be assumed to be true and the court has to find out whether those averments disclose a cause of action or a triable issue as such. The court cannot probe into the facts on the basis of the controversy raised in the counter.”
149. In D. Ramachandran v. R.V. Janakiraman it has been held that the court cannot dissect the pleading into several parts and consider whether each one of them discloses a cause of action.
29.In the light of the same, this court is not inclined to reject the plaint at this stage. Therefore A.No.1416 of 2009 stands dismissed. No costs.
30.At the same time, the applications filed by the plaintiffs for grant of injunction in O.A.Nos.961 and 962 of 2008 are also clearly not maintainable. Considering the fact that the plaintiffs are only tenants, they cannot in the guise of the interim order, stall the landlord from collecting rents or proceeding with eviction before the Rent Control Court under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960.
31.As contended by the defendant, many of the cases have reached their finality. By using the suit and the injunction applications, the plaintiffs cannot squat over the property when they did not have any proprietorial right over the property. The plaintiffs had neither made out prima facie case nor the balance of convenience was in their favour for the grant of an interim injunction.
32.The Supreme Court vide its judgment in Morgan Stanley Mutual Fund Vs. Kartick Das reported in 1994 (4) SCC 225 in paragraph 37 laid guidelines for issuing an order in an application under Order 39 Rule 1 CPC and the same may be reproduced below:
“37.In United Commercial Bank v. Bank of India, this Court observed: (SCC pp.787-88, paras 52-53)
“No injunction could be granted under Order 39, Rules 1 and 2 of the Code unless the plaintiffs establish that they had a prima facie case, meaning thereby that there was a bona fide contention between the parties or a serious question to be tried. The question that must necessarily arise is whether in the facts and circumstances of the case, there is a prima facie case and, if so, as between whom? In view of the legal principles applicable, it is difficult for us to say on the material on record that the plaintiffs have a prima facie case. It cannot be disputed that if the suit were to be brought by the Bank of India, the High Court would not have granted any injunction as it was bound by the terms of the contract. What could not be done directly cannot be achieved indirectly in a suit brought by the plaintiffs.”
33.Therefore, the injunction applications in O.A.Nos.961 and 962 of 2008 will also stand dismissed. No costs.
34. Similarly, there is no prima facie case to stay the proceedings before the Rent Control court. Hence A.No.4144 of 2008 also stands dismissed. However there shall be no order as to costs.
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