IN THE HIGH COURT OF KERALA AT ERNAKULAM
FAO.No. 95 of 2003()
1. MARATT RUBBER LIMITED (A COMPANY
... Petitioner
Vs
1. J.K. MARATTUKALAM, S/O. LAE KUNCHERIA
... Respondent
2. K.K. MARATTUKALAM, S/O.
3. T.K. MARATTUKALAM, S/O. LATE KUNCHERIA
4. U. MOOSA, S/O. UMMASTHOOR RAYIN,
5. E. MOHAMMED, S/O. MAMMED,
For Petitioner :SRI.A.P.CHANDRASEKHARAN (SR.)
For Respondent :SRI.N.L.KRISHNAMOORTHY
The Hon'ble MR. Justice K.M.JOSEPH
The Hon'ble MR. Justice M.L.JOSEPH FRANCIS
Dated :29/09/2009
O R D E R
K.M.JOSEPH & M.L.JOSEPH FRANCIS, JJ.
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F.A.O. No. 95 OF 2003
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Dated this the 29th day of September, 2009
J U D G M E N T
Joseph, J.
The appellant calls in question the common order
passed in I.A.Nos.1091/1998, 757/2001 and 813/2002. Before
we proceed to consider the order, it is necessary to refer
certain facts. The appellant is the plaintiff in a suit for
injunction and alternatively for recovery of possession on the
strength of title. The subject matter of the suit is 76 acres of
rubber estate which, according to the appellant, is owned by
them as per the order of the High Court in a Company
Petition. According to the respondents, the property became
the subject matter of certain agreements executed by the
former Chairman of the Company. Pending the suit, the
appellant filed an application for interim injunction. The
proceedings culminated in order dated 13-09-1996 in
C.M.A.No.234/96 by which this Court found it to be a fit case
where a receiver has to be appointed. It is accordingly that
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respondents 4 and 5 were appointed as joint receivers. In the
order, it is stated that the receivership should be for a period
of one year from 13-09-1996. It is subject to certain
conditions. The Court also directed the trial court to dispose
of the suit finally as early as possible, at any ate, within one
year from the date of receipt of a copy of that judgment. Still
further, it is not in dispute that in C.M.P.No.2135/1998 in
C.M.A.No.234/1996, a Division Bench of this Court passed the
following order:-
” This court by the order dated
20.5.1998 directed respondents 4 and 5 to
make available necessary data regarding the
difference in the price of rubber in order to
re-fix the security amount as ordered by this
court earlier. Both sides agreed before this
court that the present arrangement of
respondents 4 and 5 functioning as Receivers
can continue till the disposal of the suit. Of
course, there was some dispute regarding the
amount to be deposited annually by the
Receivers. It was in that background this
court directed respondents 4 and 5 to furnish
data in support of reduction of the security
amount. Pursuant to the said order,
respondents 4 and 5 produced certain
FAO.95/2003
: 3 :documents to galvanize their points. The
counsel has invited our attention to document
number 6 wherein the price of rubber per
kilogram was shown as Rs.26.50 as on
December 1997. The said document also
shows some upward rise in the prices from
January 1998 onwards. In January 1998 the
price of rubber per Kg. is shown as Rs.26.50.
The counsel for the petitioner however
disputes the above contention of respondents
4 and 5. In the reply affidavit filed on behalf
of the petitioner it is stated that the price of
rubber was Rs.40.50 per kilogram as on
31.3.1997. The reply affidavit further reveals
that on 8.6.1998 the price of rubber was
Rs.36/- per kilogram. From the rival
contentions, it can be seen that this court
cannot totally depend upon the data now
given by the parties. The market fluctuations
cannot have any certainty; it may change from
time to time. Considering the fact that there
is a reduction in the price of rubber, we feel
that some indulgence by this court is
necessary in the ends of justice. After all
respondents 4 and 5 have to furnish security
for the yield of rubber that may be received
from the property in question. Therefore, we
order that respondents 4 and 5 shall furnish
security deposit for the amount of Rs.5 lakhs
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for the period from 13.9.1997 to 12.9.1998.
This security deposit shall be made in two
equal monthly instalments, the first
instalment being payable on 29.7.1998. The
other terms and conditions issued by this
court on 13.9.1996 will continue to operate.”
It would appear that the matter received the attention of the
Apex court and it is common case that the suit still remains
pending. We got a report from the court in which it is stated
that the Supreme Court has stayed the proceedings and after
the dismissal of the S.L.P. in 1999, the present FAO was filed
and the records were called for by letter dated 14-08-2003.
Since the records were not available, the Sub Court could not
proceed with the suit, it is stated.
2. I.A.No.1091/1998 was an application filed by the
appellant seeking directions for realisation of Rs.5 lakhs from
the joint receivers. I.A.No.757/2001 was an application to
strike off the defence of respondents 4 and 5 on account of
non compliance with the order of the Court. I.A.No.813/2002
was an application filed by the appellant to direct respondents
4 and 5 to continue to deposit at the rate of Rs.5 lakhs every
year from 13-09-1998 onwards.
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: 5 :
3. I.A.No.812/2002, the order in which is not
challenged in this appeal, was an application for conditional
attachment of the property of respondents 4 and 5. The court
below rejected I.A.Nos.1091/1998, 757/2001 and 813/2002.
I.A.No.812/2002 was allowed.
4. We heard learned senior counsel appearing for the
appellant Sri.A.P.Chandrasekharan, learned counsel
appearing for respondents 4 and 5 Sri.K.Lakshmi Narayanan,
besides Sri.K.M.Sathyanatha Menon appearing on behalf of
the 1st respondent. The learned senior counsel for the
appellant would essentially canvass before us the correctness
of the order passed by the lower court in I.A.No.813/2002. He
would point out that by the first order, namely, order dated
13-09-1996, respondents 4 and 5 had been appointed as joint
receivers. They were called upon to deposit Rs.8 lakhs. They
deposited Rs.8 lakhs. Subsequently, respondents 4 and 5 had
a case that the amount of Rs.8 lakhs to be deposited was on
the higher side. They made a complaint. They were asked to
produce material. It is on the basis of material produced
apparently that by order dated 29-06-1998 this Court reduced
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the amount from Rs.8 lakhs to Rs.5 lakhs. He would point out
that there was failure on the part of respondents 4 and 5 to
deposit Rs.5 lakhs for the period from 13-09-1997 to 12-09-
1998. It is the further case stated that they ought to have
continued the deposit in a sum of Rs.5 lakhs for every year
they were in possession as joint receivers. It is common case
that by order dated 10-04-2001 in I.A.No.214/1999,
respondents 4 and 5 were moved from receivership. The
operative portion of the said order reads as follows:-
” 9. In the circumstances, defendants
4 and 5 are removed from receivership. The
plaintiff shall file affidavit or petition
informing about his willingness to function as
receiver. If such petition or affidavit is not
filed, further necessary arrangements shall
be made for management of the property.
Defendants 4 and 5 are directed to deposit
security amount of 5 lakhs on or before 30-
05-2001 or without delay as the court further
directs. If the amount is not deposited,
appropriate orders shall be passed for
recovery of the defaulted amount of Rs.5
lakhs. Defendants 4 and 5 shall handover
possession of the property as per further
directions from the court. They shall also
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furnish reports and accounts in court.”
He would point out that respondents 4 and 5 even after the
date of the said order continued to be in possession. He would
submit that at any rate respondents are bound to deposit the
sum of Rs.5 lakhs every year at least till the date of the order,
namely 10-04-2001. It is pointed out that despite the direction
in the aforesaid order to respondents 4 and 5 to deposit
security amount of Rs.5 lakhs on or before 30-05-2001, it was
observed in its breach by respondents 4 and 5. Accordingly,
I.A.No.813/2002 and other I.As. were necessitated. Therefore,
according to him, it is a bounden duty of respondents 4 and 5
to deposit at the rate of Rs.5 lakhs. He would point out that a
perusal of the second order, namely order dated 29-06-1998,
would show that both parties agreed that respondents 4 and 5
will continue as receivers till disposal of the suit. Accordingly,
in so far as the suit itself is pending, he would submit that in
so far as respondents 4 and 5 have not given up possession
even after order dated 10-04-2001, they are bound to deposit
at the rate of Rs.5 lakhs for every year they are in possession.
5. Learned counsel for the 4th and 5th respondents, on
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the other hand, would point out that the order of the court
does not warrant any interference. According to him, even
going by the second order, the direction to deposit the amount
of Rs.5 lakhs was limited to the period from 13-09-1997 to 12-
09-1998. He would submit that actually respondents 4 and 5
did not derive any income. According to him, it was totally
unprofitable. He would further point out that by judgment
dated 01-09-1996, this Court had articulated certain
conditions. He would submit that if respondents 4 and 5
defaulted in paying the amount, the consequences flowing
from the same were clearly provided for. If there is breach on
the part of respondents 4 and 5, it is unambiguously
mentioned that the joint receivers shall automatically cease to
have right to be in possession and management of the
property and the Managing Director of the Company,
Sri.K.M.Marattukulam, shall be entitled to function as receiver
thereafter and the court shall put him in possession of the
properties if an application to that effect is made.
Accordingly, he would submit that it was sensing that the
property may not yield any income as such, the
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appellant/plaintiff desisted from making any application in
terms of the said condition. According to him, respondents 4
and 5 cannot be called upon to deposit any amount. He would
submit that these are all matters to be decided after evidence
is adduced as observed by the court below. He would also
have a case that respondents 4 and 5 were not in possession
after default is committed. He would submit that as far as the
recovery of Rs.5 lakh which is ordered by order dated 10-04-
2001 is concerned, the court below has allowed the
application for conditional attachment and that said order has
become final. He would submit that there is no scope in any
interference.
6. Learned counsel appearing on behalf of the first
respondent would point out certain orders passed by the
Karnataka High Court as also one order passed by this Court
in an attempt to contend that the plaintiff should be
discountenanced by virtue of his conduct falling short of
standards expected of a person seeking equitable relief. He
would, therefore, submit that these aspects may be borne in
mind by this Court.
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7. Going by the order dated 13-09-1996, respondents
4 and 5 were appointed as joint receivers for a period of one
year. Apart from various conditions, it is clear that should
there be default in payment of the instalment amounts.,
respondents 4 and 5 will cease to be receivers and the
appellant can apply to be put in possession. We further
notice that in the same condition, the court has specifically
provided that the court shall also pass appropriate orders for
recovery of the defaulted amount from respondents 4 and 5.
This Court contemplated the disposal of the suit within a
period of one year. It is later on when order dated 29-06-1998
was passed, the court would appear to countenance the
agreement of parties about the arrangement that respondents
4 and 5 will continue till the disposal of the suit. Thereafter,
taking note of the complaints of respondents 4 and 5
regarding the market fluctuations, the Court directed as
follows:-
” Therefore we order that respondents
4 and 5 shall furnish security deposit for the
amount of Rs.5 lakhs for the period from 13-
09-1997 to 12-09-1998. This security
deposit shall be made in two equal monthly
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instalments, the first instalment being
payable on 29-07-1998. The other terms
and conditions issued by this Court on 13-
09-1996 will continue to operate.”
8. On the one hand, learned senior counsel for the
appellant would contend that the reasonable way of
interpretation of these orders would be that the court
contemplated respondents 4 and 5 to continue as joint
receivers till the disposal of the suit and also taking note of
the fact that the court heeded to the complaint of respondents
4 and 5 that the amount of Rs.8 lakhs which is fixed under the
judgment was on the higher side and the amount was reduced
to Rs.5 lakhs, this Court should come to the conclusion that
respondents 4 and 5 were under the obligation to continue to
Rs.5 lakhs not only for the period from 13-09-197 to 12-09-
1998 but they were to continue to deposit the said amount of
Rs.5 lakhs at least till 10-04-2001 when the court removed
them from receivership. He posed the question as to the
effect of the suit prolonging for a long period and its effect on
the rights of the appellant/plaintiff should the suit be
ultimately decreed. He would complain that in such an event,
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the appellant would not get any relief for no fault. On the
other hand, learned counsel for the first respondent would
point out that at any rate, the order dated 29-06-1998 in
express terms limited the liability to deposit Rs.5 lakhs to the
period from 13-09-1997 to 12-09-1998. He would submit that
the said fact has been factored into order dated 10-04-2001
and further taken care of by the order in I.A.No.812/02 by
which conditional attachment has been ordered.
9. The court below has taken note of the contention of
the respondents that they were not able to pay the amount
ordered to be deposited and the income from the property is
meagre which is why they filed in I.A.No.214/99. It is further
reasoned that whether the respondents failed to pay the
amount willfully or not is the matter which can be decided
after taking evidence. No evidence is adduced as of now, it is
noted and, therefore, it is stated that a conclusion could not be
arrived at as to failure to pay the amount willfully. It is stated
that there is no dependable evidence to hold that the failure
on the part of respondents 4 and 5 to deposit the amount is
wilful. It is stated that the consequence of failure to deposit is
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referred to in the order itself and if the plaintiff was eager to
get possession and prevent loss, he could have filed
application to be appointed as receiver which was not done by
him. The records reveal the appellant did not express
willingness to act as receiver so far. It is stated that if
respondents 4 and 5 were not receivers, the only amount
which the plaintiff can claim is for damages in view of the
removal from receivership in 2001. There is no data at
present to hold that what is the mesne profit, it is stated.
10. It is clear that this Court contemplated that the suit
will be disposed of within a period of one year. It is for the
reason that the court by order dated 13-09-1996 appointed the
receivers for a period of one year. No doubt, by order dated
29-06-1998, taking note of the view of the parties, the
receivers were to continue till the disposal of the suit. Further
we note that the court ultimately contemplated the suit will
come to an end as contemplated by it within the stipulated
time. It would appear that for this reason in the operative
part of the order dated 29-06-1998 the court specifically
provided the security amount to be deposited for a period
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from 13-09-1997 to 12-09-1998 to be Rs.5 lakhs. There is no
order expressly fixing the sum of Rs.5 lakhs to be the security
amount for the period after 12-09-1998. In view of the
circumstances prevailing namely, the contemplation of the
court that the suit itself will be disposed of within a time limit,
we find it is unable to accept the contentions of the learned
senior counsel for the appellant that even for the period after
12-09-1998 it must be taken that this court contemplated that
respondents 4 and 5 have to deposit Rs.5 lakhs. No doubt, it
is only by order dated 10-04-2001 that respondents 4 and 5
stood actually removed from receivership.
11. But, as to what is the amount which respondents 4
and 5 are to account for are all matters which we feel are
better decided after evidence is adduced by the parties. We
notice that the court had rejected I.A.No.813/02. While we
make it clear that there is no order as such by this Court fixing
the amount to be paid after 13-09-1998 as Rs.5 lakhs, we also
leave open I.A.No.813/02 and this I.A. will be taken up after
the evidence is adduced and appropriate orders passed
thereon. Taking note of the long pendency of the matter, we
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direct that the court below will take up the suit itself and
dispose of the same, as early as possible, at any rate, within
six months from the date of receipt of a copy of this judgment.
Send back the records immediately.
The appeal is disposed of as above.
Sd/-
(K.M.JOSEPH, JUDGE)
Sd/-
(M.L.JOSEPH FRANCIS, JUDGE)
aks
// True Copy //
P.A. to Judge
