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Maratt Rubber Limited (A Company vs J.K. Marattukalam on 29 September, 2009

Kerala High Court
Maratt Rubber Limited (A Company vs J.K. Marattukalam on 29 September, 2009
       

  

  

 
 
  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.

            ```````````````````````````````````
                    F.A.O. No. 95 OF 2003
            ```````````````````````````````````
        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

FAO.95/2003
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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

FAO.95/2003
: 4 :

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.

FAO.95/2003
: 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

FAO.95/2003
: 6 :

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

FAO.95/2003
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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

FAO.95/2003
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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

FAO.95/2003
: 9 :

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.

FAO.95/2003
: 10 :

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

FAO.95/2003
: 11 :

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,

FAO.95/2003
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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

FAO.95/2003
: 13 :

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

FAO.95/2003
: 14 :

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

FAO.95/2003
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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

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