Mridangraj Hiralal Suchak v. Bank of Baroda

Judgment

1. Heard the learned counsel appearing on behalf of the Petitioner and the Respondent.

2. The Petitioner is the Original Plaintiff and the Respondent -Bank of Baroda is the Original Tenant- Defendant. The Petitioner is aggrieved by the order passed by the Lower Appellate Court dated 6.1.2011 in application filed by the Respondent granting stay to the execution and operation of the judgment and decree passed in Misc. Notice No. 909 of 1993 in L.E. Suit No. 291 /1338 of 1983 subject to the condition of depositing an amount of Rs.60,00,000/- in the Court and furnishing bank guarantee for the remaining amount. 2 (WP 1560 of 2011)

3. By consent of parties, the matter is taken up for final hearing at the stage of admission.

Brief facts are as under: The Plaintiff filed the suit in the year 1983 bearing L.E. Suit No.291/1338 of 1983 for eviction against the Respondent in the Small Causes Court at Mumbai alleging breach of the leave and licence agreement. The Plaintiff had given his premises admeasuring about 2255 sq.ft. situated at C.P. Tank Circle, Mumbai on leave and licence basis to the Defendant – Bank of Baroda and on account of breach of conditions of the said leave and licence agreement, the said suit was filed. The Trial Court decreed the suit by its judgment and order dated 27th February, 1992. The Trial Court while passing the decree, awarded mesne profit to be paid by the Respondent Bank to the Petitioner on account of its wrongful possession.

5. The said judgment and decree was challenged in appeal by the Bank before the Division Bench of the 3 (WP 1560 of 2011) Small Causes Court. The appeal was dismissed and the order of the Trial Court was confirmed. The Respondent, therefore, filed writ petition in this Court which was also summarily dismissed. The Respondent handed over the vacant possession of the suit premises on 30th July,

1993. The Petitioner preferred an application for quantification of mesne profit and the said application was allowed by judgment and decree dated 9th June,

2010. By the said order, the Court directed the Respondent to deposit the decretal amount of the mesne profit along with interest at the rate of 6% p.a. which approximately comes to Rs.1,71,09,283/-. Since the Respondent Bank failed to pay the decretal amount along with interest, the Petitioner took out an execution application. The Respondent filed an appeal against the judgment and decree passed by the Trial Court on mesne profit application and also filed an application for stay of the said execution. A reply was filed by the Petitioner to the said application. The Appellate Court admitted the 4 (WP 1560 of 2011) appeal and passed the impugned order directing the Bank to deposit an amount of Rs.60,00,000/- in the Court and to furnish bank guarantee for the remaining amount.

6. Initially a stay was granted by the Appellate Court and directed the Respondent to deposit an amount of Rs.40,00,000/- and furnish the bank guarantee for the balance amount. This order was challenged by the Petitioner in this Court by filing a Civil Revision Application. The said Civil Revision Application was disposed of by passing a speaking order and it directed that the order of the Appellate Court of the Small Causes should be treated as an ad-interim order. Thereafter, the matter was again argued at length and the impugned order thereafter, was passed.

7. Shri Kapadia, the learned Senior Counsel appearing on behalf of the Petitioner submitted that no reasons had assigned by the Learned Judge while granting stay to the execution or decree. It was 5 (WP 1560 of 2011) submitted that though a discretion was vested in the Appellate Court to consider an application for stay of money decree, the said discretion had to be exercised judiciously and special reasons had to be assigned while granting stay to the money decree. He submitted that though this fact was accepted by the Appellate Court in the impugned order while granting stay to the judgment and order of the Trial Court, no reasons had been assigned. Reliance was placed by the learned counsel for the Petitioner on the judgment of the Apex Court in the case of Malwa Strips Private Limited vs. Jyoti Limited [(2009)2 Supreme Court Cases 426). It was submitted that the Petitioner- Original Plaintiff was entitled to enjoy the fruits of the said decree and he ought to have been permitted to withdraw the amount on furnishing adequate security. It was submitted that the Trial Court had awarded interest at the rate of 6% only from the date of judgment and decree and no interest was awarded. It was submitted that, therefore, the impugned order was 6 (WP 1560 of 2011) liable to be set aside and the directions should be granted to the Respondent Bank to deposit the entire amount and permit the Petitioner to withdraw the amount on furnishing security.

8. On the other hand, the learned counsel appearing on behalf of the Respondent Bank submitted that the discretion was vested in the Lower Appellate Court to consider the application for granting stay to the judgment and decree and the said discretion had been exercised by the Court and the Bank had being directed to deposit Rs.60,00,000/- in the Court and furnishing bank guarantee for the remaining amount. It was submitted that under the circumstances, therefore, this Court should not interfere with the impugned order while exercising its writ jurisdiction under Article 227 of the Constitution of India. He submitted that he had taken instructions from the bank and it was submitted that the statement which was made on the last date regarding consent being granted by the Bank to withdraw the 7 (WP 1560 of 2011) contractual rate has agreed between the parties and he was informed by the Bank that in fact, the contractual rate had been paid during the pendency of the suit. He, however, submitted that an amount of Rs.10,00,000/- may be allowed to be withdrawn by the Petitioner without furnishing security and the hearing of the suit may be expedited. It was then submitted that the appeal had been admitted on merits. The bank has a very good case and there was every possibility that the Respondent Bank would succeed in the appeal. It was submitted that the Respondent was a nationalized bank and money deposited in the bank was public money and it was, therefore, urged that if a direction was given to deposit the entire amount in the Court, the Bank would be deprived from using this money for the purpose of lending it to its customers. The learned counsel for the Respondent Bank then relying on the judgment of the Apex Court in the case of Sihor Nagar Palika Bureau vs. Bhabhlubhai Virabhai & Co. [2005) 4 Supreme Court 8 (WP 1560 of 2011) Cases 1] and more particularly paragraphs 7 and 8 of the said judgment. He submitted that in the said case, the Appellant was a statutory body constituted and governed under the provisions of the Gujarat Municipalities Act, 1963 and a decree was passed against the appellant and the High Court admitted the appeal and directed the appellant to deposit an amount of Rs.8,78,925/- with 8% interest. He submitted that the Apex Court had observed that the appeal had been admitted and the Appellant had made out a strong case for hearing of the appeal on merits and the Supreme Court further observed that the public interest would be better served by the amount being retained by the appellant during the pendency of the appeal. He also relied on the judgment of the Apex Court in the case of State of Maharashtra and Anr. Vs. M/s. Super Max International Pvt. Ltd. & Ors. [2009(5) ALL MR 1001 (Supreme Court). IN the said case, he invited my attention to paragraph 48 of the said judgment, wherein observation was made by the 9 (WP 1560 of 2011) Apex Court that if the Court finds it just and expedient that the amount should be paid to the decree holder, it must be careful to make payment to him on terms so that in case the final decision goes in favour of the tenant, the payment should be made to him without any undue delay or complications. He was distinguished the judgment on which the reliance was placed by the learned counsel for the Petitioner.

9. After having heard both the counsel at length, in my view, perusal of the order clearly indicates that no reasons have been given by the Lower Appellate Court while granting stay to the execution of the decree. It was shown in the order that the learned Judge has noted the Judgment of the Apex Court in Malwa Strips Private Limited (supra) and have also noted that unless exceptional case is made out, stay cannot be granted. After noting the submissions made by both the counsel, the Lower Appellate Court has observed as under: “Now the appeal has been filed and it will take 10 (WP 1560 of 2011) some time to dispose of the entire appeal. As stated by the respondent in para. 4(c) of affidavit in reply the total decretal amount as per the respondent is Rs.1,71,09,238/-. Therefore, taking into consideration the facts of the case, the quantum of decretal amount and previous order passed in Misc. Application which was for a limited period, we are of the opinion that stay cannot be granted subject to following condition. Hence we answer point under consideration, accordingly and proceed to pass following order.” Thus, while granting stay to the execution of money decree, no reasons whatsoever have been assigned. In the case of Malwa Strips Private Limited (supra), the Apex Court has noted the amendment made to Rule 1 of Order 41 by section 87 of Act 104 of 1976. Whereby Sub-rule 3 was inserted in Rule 1. The Apex Court also took into consideration the explanation which was added to Sub-Rule 1 of Rule 5 of Order 41. Thereafter, the Apex Court observed that though the word “shall” had been used in Order 41 Rule 1(3) CPC, the same was not mandatory in character and, therefore, it had to be read as directory. Thereafter, the Apex Court 11 (WP 1560 of 2011) in the said judgment quoted the observations made by the Rajasthan High Court in the case of Rajasthan SEB v. Ram Deo [AIR 1999 Raj 264] and also another judgment of the Apex Court in the case of Sihor Nagar Palika Bureau v. Bhabhlubhai Virabhai & Co. [(2005) 4 SCC1] more particularly paragraph 6 of the said order. It also referred to another decision of the Apex Court in the case of B.P. Agarwal v. Dhanalakshmi Bank Ltd. [(2008) 3 SCC 397] and finally in paragraph 14, the Apex Court observed as under: “14. Even if the said provision is not mandatory, the purpose for which such a provision has been inserted should be taken into consideration. An exceptional case has to be made out for stay of execution of a money decree. The parliamentary intent should have been given effect to. The High Court has not said that any exceptional case has been made out. It did not arrive at the conclusion that it would cause undue hardship to the respondent if the ordinary rule to direct payment of the decretal amount or a part of it and/or directly through the judgment-debtor to secure the payment of the decretal amount 12 (WP 1560 of 2011) is granted. A strong case should be made out for passing an order of stay of execution of the decree in its entirety.” The Apex Court, therefore, very clearly has laid down after taking into consideration the amended sub- rule (3) in Rule 1 Order 41 and explanation added to sub- rule 1 of Rule 5 of Order 41 that an exceptional case has to be made out for stay to the execution of the decree. It was further observed that the parliamentary intent should have been given effect to. It also observed that the High Court had not come to the conclusion that the undue hardship to the respondent if the ordinary rule to direct payment of the decretal amount or a part of it and/or directly through the judgment-debtor to secure the payment of the decretal amount is granted. It further observed that a strong case is made out for passing an order of stay of execution of the decree in its entirety. The Lower Appellate Court even though this judgment was before it, has not given any reasons whatsoever 13 (WP 1560 of 2011) while granting stay. It has only increased the amount which was directed to be deposited at an ad-interim stage from Rs.40,00,000/- to Rs.60,00,000/-. From the submissions made by the Respondent, prima facie case is made out. Under these circumstances, in my view, the Lower Appellate Court clearly has committed an error of law which is apparent on the face of record and, therefore, this Court while exercising writ jurisdiction under Article 227 of the Constitution of India can interfere with the said order which has been passed by the Lower Appellate Court.

10. In the present case, it was strenuously urged by the learned counsel appearing on behalf of the Respondent that in the application for mesne profit, the only evidence which was adduced by the Petitioner- Original Plaintiff was the Ready Reckoner and reliance was placed on the said Ready Reckoner for the purpose of arriving at the market value. It is submitted that no other documents were produced. It was submitted that 14 (WP 1560 of 2011) the said Ready Reckoner is of the year 1990, whereas the period of mesne profit, which was claimed for the period from 1990 to 1993. It was, therefore, submitted that, the bank had very strong case of succeeding in the appeal.

11. On the other hand, Shri Kapadia, the learned counsel appearing on behalf of the Petitioner submitted that the bank had bothered to produce any documents in support of the case. It was submitted that it was always open for the bank to produce the agreements which was executed by the Bank with respect to the other branches in the area. It was submitted that on the other hand, the Petitioner had claimed Rs.10 crores as mesne profit and the Trial Court had granted Rs.1.77 crores together with interest at the rate of 6%.

12. In my view it will not be appropriate to make any observation on merits of the appeal. The fact remains that though the decree was obtained by the Petitioner in 1993, the Petitioner has not been in a position to enjoy the fruits of the decree regarding mesne 15 (WP 1560 of 2011) profit for the past 17 years. The purpose for inserting sub-Rule (3) to Rule 1 of Order 41 of CPC was to ensure that stay to the execution of the money decree should not be granted without asking to deposit or to furnish the security for the decretal amount to the judgment-debtor unless an exceptional case is made out for grant of stay. In the present case the Respondent is a nationalized bank and, therefore, no financial hardship would be caused to the bank if the amount deposited in the Court is allowed to be withdrawn by the Respondent subject to conditions imposed by this Court.

13. During the course of the submissions, the learned counsel appearing on behalf of the Respondent, after taking instructions from the Bank, has fairly stated that the Petitioner may be permitted to withdraw Rs.10,00,000/- without furnishing any security. In my view, it would be appropriate if the order passed by the Lower Appellate Court is partly modified and the Petitioner is permitted to withdraw an amount of 16 (WP 1560 of 2011) Rs.10,00,000/- without furnishing any security and Rs. 50,00,000/- on furnishing adequate security to the satisfaction of the Trial Court. Since the decree was passed in favour of the Petitioner in 1993 and since last 17 years, he was not in a position to enjoy the fruits of the said decree, it would be appropriate if the hearing of the appeal is expedited. The Lower Appellate Court, therefore, is directed to hear and dispose of the appeal as expeditiously as possible and in any case, within a period of six months. Writ petition is disposed of in the aforesaid terms. (V.M. KANADE J.)