Kerala High Court · 2012

P.N.RAVINDRAN, J.--------------------------------------A.S.No.385 of 1997 ---------------------------------------Dated this the 3rd day of December , 2012J U D G M E N TThe appellant is the second defendant in O.S.No.270 of 1991 onthe file of the Court of the Subordinate Judge of Kozhikkode. The firstrespondent is the plaintiff and the second respondent is the firstdefendant therein. The suit instituted by the first respondent/plaintifffor recovery of the sum of Rs.53,464.95 being the licence fee payablein respect of a shop room belonging to the plaintiff for a period of 33months commencing from 1.4.1988 and ending with 17.12.1990, withinterest and costs, was decreed by the trial court. The seconddefendant has aggrieved thereby filed this appeal. The brief facts ofthe case are as follows: 2. The first respondent/plaintiff instituted O.S.No.270 of 1991 inthe Court of the Subordinate Judge of Calicut for realisation of thesum of Rs.53,464.95 together with future interest thereon at 12% perannum from the date of suit till realisation from the defendants (theappellant and the second respondent herein). The plaintiff, the ownerof the Corporation Bus Stand Building at Kozhikkode had entrustedroom No.10 therein to the first defendant on a licence arrangementwith the obligation to pay licence fee at the rate of Rs.1,403/- per AS No.385/19972mensem, for the period from 10.1.1986 to 31.3.1988. Before the termexpired, the first defendant submitted Ext.A1(a) petition dated29.4.1987 to the Commissioner of Kozhikkode Corporation, requestinghim to transfer the licence to the name of the second defendant. Sincethe licence fee was in arrears, no action was taken on the saidapplication. It is stated that though notice was issued to both thedefendants to appear for a hearing, they did not appear. While mattersstood thus, the first defendant requested for renewal of the licenceafter remitting the arrears of licence fee and on his request, the licencearrangement was renewed for the period from 1.4.1988 to 17.12.1990on payment of 10% enhanced licence fee. The plaint proceeds to statethat even thereafter the first defendant committed default in paymentof the licence fee and in executing agreement and therefore, theofficers of the Corporation resumed possession of the shop room on17.12.1990. It is stated that though notice was issued to the firstdefendant calling upon him to remit the arrears of licence fee till17.12.1990 and to remove the goods kept in the shop room, the firstdefendant did not take steps in that regard. On these grounds theplaintiff sued for realisation of the sum of Rs.50,990/- being thelicence fee @ Rs.1,543/- per mensem for the period from 1.4.1988 to17.12.1990 and the sum of Rs.2545.95 being the interest on the said AS No.385/19973sum calculated at the rate of 12% per annum, aggregating toRs.53,464.95, together with future interest and costs from thedefendants and their assets. 3. On receipt of summons, the first defendant enteredappearance and filed a written statement dated 7.7.1992. Hecontended interalia that he had taken the shop room under a licencearrangement for the purpose of running a business, but he could notdo so and therefore, the room was lying unoccupied. He stated thatwhile matters stood thus, the second defendant approached him with arequest to hand over the shop room to him for the purpose of runninga travel agency and the second defendant submitted a letter [Ext.A1(b)] requesting the Corporation to transfer the licence to him, that thesaid request was accepted and acted upon and therefore he is notliable to pay the licence fee from that date onwards. He contended thatthe second defendant is not his partner and that he and the seconddefendant have not conducted any partnership business therein andtherefore, he is not liable to pay the licence fee as claimed. He alsocontended that if at all any amount is due towards licence fee, theremedy of the Corporation is to realise it from the second defendant.The second defendant filed a written statement dated 20.7.1992wherein he contended that he is not liable to pay any amount to the AS No.385/19974plaintiff as there is no privity of contract between him and the plaintiff.He also contended that the plaintiff has no cause of action against himand that no amount as stated in the plaint is available to be recoveredfrom him. 4. Issues in the suit were framed on 23.9.1992 and thereafterthe suit stood posted on 11.11.1992. On 11.11.1992 the suit wasadjourned for trial to 19.1.1993. On 19.1.1993 the plaintiff was notpresent. There was also no representation on behalf of the plaintiff.Defendants 1 and 2 were present. The suit was therefore dismissed fordefault by order passed on 19.1.1993. Aggrieved thereby the plaintifffiled I.A.No.712 of 1993 on 20.2.1993 under Order IX rule 9 of theCode of Civil Procedure. On that application notice was ordered to thedefendants on 29.3.1993 and the application was posted to 7.6.1993.There was no sitting on that day and the application was posted to14.6.1993. Since steps were not taken to serve notice on thedefendants, fresh notice was ordered to the defendants on 14.6.1993with the hearing date fixed as 9.7.1993. On 9.7.1993, the seconddefendant entered appearance. Since the first defendant had not beenserved, the trial court directed fresh steps to be taken and posted theapplication to 2.8.1993. Since the notice issued to the first defendantwas returned unserved, on 2.8.1993 the trial court again directed AS No.385/19975fresh steps to be taken and posted the application to 26.8.1993 forreturn of the notice issued to the first defendant and for counteraffidavit of the second defendant. On 26.8.1993 the plaintiff wasabsent and there was also no representation on behalf of the plaintiff.Since steps had not been taken to serve notice on the first defendantthe trial court directed fresh steps to be taken and posted theapplication to 28.9.1993 for return of the notice issued to the firstdefendant and the counter affidavit of the second defendant. On28.9.1993, at the request of the learned counsel for the plaintiff, thetrial court adjourned the application to 21.10.1993 for return of thenotice issued to the first defendant and the counter affidavit of thesecond defendant. On 21.10.1993 since steps had not been taken toserve notice on the first defendant, the application was adjourned to11.11.1993. On 11.11.1993 it was adjourned to 2.12.1993 andthereafter to 1.1.1994. On 1.1.1994 there was no sitting and theapplication was adjourned to 22.1.1994. On that day the seconddefendant filed his counter affidavit to I.A.No.712 of 1993. Since stepshad not been taken to serve notice on the first defendant, the trialcourt directed fresh notice to be issued to the first defendant andposted the application to 15.2.1994. Since steps had not been taken,when the application came up for hearing on 15.2.1994, the trial court AS No.385/19976directed fresh steps to be taken to serve notice on the first defendantand the application was posted to 17.3.1994. On that day process feewas paid, and therefore, the trial court directed the application to beposted to 29.3.1994 to await return of the notice issued to the firstdefendant. On 29.3.1994 it was adjourned to 1.6.1994. On 1.6.1994since notice had not been served on the first defendant, the trial courtdirected fresh steps to be taken to serve notice on the first defendantand posted the application to 24.6.1994. Since steps had not beentaken when the application came up for hearing on 24.6.1994, the trialcourt adjourned the application to 21.7.1994 with a direction to takesteps to serve notice on the first defendant. When the applicationcame up for hearing on 21.7.1994, since steps had not been taken toserve notice on the first defendant, I.A.No.712 of 1993 was dismissedas against the first defendant. It was thereafter adjourned to23.8.1994, later to 3.10.1994, 28.10.1994, 30.11.1994 and11.1.1995. On 11.1.1995 it was adjourned to 15.2.1995 andthereafter to 22.3.1995. On that day I.A.No.712 of 1993 was heardand orders reserved. Orders were passed on 25.3.1995 allowingI.A.No.712 of 1993. The order reads as follows:This is an application under Order IX rule 9 of the Code ofCivil Procedure to restore the suit to file which was dismissed fordefault on 19.1.1993. AS No.385/19977The suit is for recovery of license fee due from thedefendants. According to the petitioner the counsel of theplaintiff was in another court when the suit listed to 19.1.1993was called. It is stated that the factum of listing was not noticedby the counsel. It is also stated that the name of the counselwas wrongly shown in the special list published. The second defendant alone filed counter. No seriouscontention is rasied in the counter except denying theallegations. It has to be noted that wrong showing of the nameof the plaintiff's counsel should not depriving the plaintiff to seekremedy. Hence there is sufficient ground made out, accordinglythe petition allowed. 5. The suit thereafter stood posted for trial to 31.3.1995 and onthat day it was adjourned to 20.6.1995. On that day there was nositting and the suit was adjourned to 15.7.1995. On 15.7.1995, it wassubmitted on behalf of the plaintiff that it has no oral evidence toadduce.The file produced by the plaintiff was marked by consent asExt.A1. After the second defendant was examined as DW-1, evidencewas closed on 15.7.1995 and the suit was posted to 18.7.1995 forhearing. On 18.7.1995 both sides were heard. By judgment deliveredon 21.7.1995, the suit was decreed allowing the plaintiff to recover thesum of Rs.53,463.95 with interest @ 12% per annum from the date ofsuit till realisation from the defendants. The first defendant thereuponfiled I.A.No.3575 of 1995 to correct the decree and judgment. By AS No.385/19978order passed on 28.2.1996, the trial court allowed the application andamended the decree and judgment by clarifying that the suit continuesto be dismissed as against the first defendant and that the decree isonly against the second defendant. The second defendant has,aggrieved by the amended decree and judgment dated 28.2.1996 inO.S.No.270 of 1991, filed this appeal.6. I heard Smt.Dhanya, learned counsel appearing for theappellant, Sri.K.D.Babu, learned counsel appearing for the firstrespondent and Sri.Jayesh Mohankumar, learned counsel appearing forthe second respondent. Smt.Dhanya, learned counsel appearing forthe appellant contended that as the suit stood dismissed against thefirst defendant on 19.1.1993 and I.A.No.712 of 1993 filed by theplaintiff to restore the suit to file was dismissed as against the firstdefendant on 21.7.1994, the trial court erred in decreeing the suit asagainst the second defendant. The learned counsel contended that asthe application filed by the plaintiff under Order IX rule 9 of the Codeof Civil Procedure to restore the suit stood dismissed as against thefirst defendant on 21.7.1994, the trial court erred in allowingI.A.No.712 of 1993 and in setting aside the order dismissing the suitfor default. She contended that the order passed by the trial court on21.7.1994 on I.A.No.712 of 1993 is illegal and is liable to be set aside. AS No.385/19979The learned counsel for the appellant also contended that as the suitstood dismissed against the first defendant who according to theCorporation was the licensee of the shop building, the trial court couldnot have passed a decree against the second defendant holding himliable for the plaint claim. The learned counsel also assailed the findingentered by the trial court on issues 2 to 6 and contended that theevidence on record does not lend support to the finding that both thedefendants are liable for the plaint claim. The learned counsel for theappellant also invited my attention to the decision of a learned singleJudge of the High Court of Orissa in Ratnakar Ray v. Kulamoni Roy(AIR 1951 Orissa 266) in support of her contention that I.A.No.712 of1993 could not have been allowed in part as against the seconddefendant. 7. Per contra, Sri.K.D.Babu, learned counsel appearing for thefirst respondent contended that the mere fact that the suit stooddismissed on 19.1.1993 and I.A.No.712 of 1993 filed by the plaintiff toset aside the order dismissing the suit for default stood dismissed asagainst the first defendant on 27.1.1994, is not a reason to hold thatthe suit could not have been proceeded with as against the seconddefendant and therefore, no exception can be taken to the orderpassed by the trial court on 21.7.1994 restoring the suit to file. The AS No.385/199710learned counsel for the first respondent also contended that theappellant who did not challenge the order dated 25.3.1995 allowingI.A.No.712 of 1993, cannot now contend, as the said order hasattained finality, that the said order should not have been made or thatI.A.No.712 of 1993 should have been dismissed. The learned counselalso contended relying on Ext.A1(a) petition dated 29.4.1987submitted by defendants 1 and 2, Ext.A1(c) petition dated 19.12.1987submitted by the second defendant and Ext.A1(d) office note dated11.5.1988, that the second defendant was in occupation of thepremises as a partner of the first defendant and therefore, he cannotbe heard to contend that he was not in occupation of the premises orthat the liability to pay the licence fee is that of the first defendant. 8. I have considered the submissions made at the Bar by learnedcounsel appearing on either side. I have also gone through thepleadings and the materials on record. The case set out by the plaintiffis that the first defendant to whom shop room No.10 was entrustedunder a licence arrangement had committed default in payment of thelicence fee, that at his request, on payment of arrears of licence fee forthe period ending with 31.3.1988, the licence was renewed for theperiod from 1.4.1988 to 31.3.1990, but he did not execute anagreement and pay the enhanced licence fee and thereupon, an order AS No.385/199711was passed evicting him from the premises and it was implemented on17.12.1990 by taking over possession from the second defendant andan employee who was found in the premises. It was also alleged in theplaint that the second defendant is a partner of the first defendant.The second defendant had in Ext.A1(a) petition dated 29.4.1987submitted to the Commissioner of Kozhikkode Corporation requestedfor transfer of the licence to his name. In that petition the firstdefendant had stated in categorical terms that he has entrusted theshop to the second defendant and requested that the licence may betransferred to his name. The first defendant had in Ext.A1(a)representation stated that the second defendant is his partner and thathe and the second defendant are running the establishment known as“Daya Travels and Agencies”. Ext.A1(b) notice dated 4.1.1988discloses that on Ext.A1(a) application an enquiry was proposed to beheld on 7.1.1988 and that it was issued having regard to the requestmade by the second defendant in Ext.A1(c) letter dated 19.12.1987.Ext.A1(b) notice also discloses that the first defendant was called uponto remit the arrears of licence fee for the period ending with31.3.1990. The plaintiff has in paragraph 3 of the plaint averred inpositive terms that arrears of licence fee for the period ending with31.3.1988 was paid and the licence was again renewed in the name of AS No.385/199712the first defendant for the period from 1.4.1988 to 31.3.1990. Asstated earlier, a reading of the plaint discloses that the licensee wasthe first defendant and not the partnership firm of which he was apartner. Therefore the mere fact that the second defendant had beenput forward as a partner in Ext.A1(a) application dated 29.4.1987 filedby the parties for transfer of the licence in the name of the seconddefendant is by itself not a reason to hold that the licence wastransferred to the second defendant, in the absence of any avermenton the side of the plaintiff or evidence to prove the fact that therequest in Ext.A1(a) application was granted. The plaintiff has forreasons best known to it, not produced any document to show that therequest made in Ext.A1(a) petition dated 29.4.1987 was granted andthe licence was transferred in the name of the second defendant. Onthe other hand, the case set out by the plaintiff is that though thelicence was renewed in favour of the first defendant for the periodfrom 1.4.1988 to 31.3.1990 he did not execute a licence arrangementand continued in occupation without paying the licence fee and thatultimately the Corporation took a decision to cancel the licence and toresume possession and that possession was resumed on 17.12.1990. 9. From the pleadings and the materials on record, it has to benecessarily held that the licensee was the first defendant and not the AS No.385/199713second defendant. Though the first defendant had along with Ext.A1(a)petition dated 29.4.1987 produced a copy of the partnership deed, thesaid document has not been marked. That apart, as stated earlier, theplaintiff has not recognised the second defendant or the partnershipfirm as the licensee. The consistant case of the plaintiff is that the firstdefendant is the licensee, that the licence was renewed in his name onhis discharging the arrears, that he did not execute the licencearrangement or pay the licence fee though he continued to be inoccupation and therefore, a decision was taken to evict him from thepremises and he was evicted and possession taken on 17.12.1990.Though in chief examination the second defendant examined as DW1had deposed that room No.10 of Kozhikode Bus Stand Building was notgiven to him under a licence arrangement, in cross-examination hehad admitted the fact that he was running a travel agency known asDaya Travel Agency in room No.10 of Kozhikode Bus Stand Building inpartnership with the first defendant. He had also admitted the factthat he had submitted Ext.A1(a) application dated 29.4.1987 fortransfer of the licence to his name. He had also admitted the fact thatthe officials of the Corporation resumed possession of the building on17.12.1990 and sealed it. It is thus evident that though the plaintiffhas not proved that the second defendant was running the business in AS No.385/199714partnership with the first defendant, the second defendant has incategorically terms admitted the fact that he was running the businessin room No.10 in partnership with the first defendant and thatpossession of the shop room was taken over by the Corporation on17.12.1990. The presence of the second defendant in the shop roomand his occupation are thus made out. 10. Then the only question is whether he could be held liable topay the licence fee in the absence of a formal license arrangementexecuted by him or a decision by the Corporation transferring thelicence to his name. The second defendant was admittedly inoccupation of the premises. He had admitted the fact that he wasrunning a business therein along with the first defendant as hispartner. He has thus admitted the fact that he was in occupation ofthe premises. Therefore, notwithstanding the fact that a formal licencearrangement had not been entered into between the plaintiff and thesecond defendant, as the second defendant was in occupation of thepremises belonging to the Corporation, I am of the opinion that theCorporation was entitled to recover from him damages for use andoccupation. Therefore the mere fact that a formal license arrangementhad not been entered into between the Corporation on the one handand the second defendant on the other or between the Corporation AS No.385/199715and defendants 1 and 2, is not a reason to hold that the seconddefendant cannot be held liable to pay damages for use andoccupation. The court below was therefore perfectly right in holdingthat the second defendant is also liable for the plaint claim. 11. That takes me to the question whether in view of the factthat suit stood dismissed against the first defendant on 19.1.1993 andI.A.No.712 of 1993 to set aside the order dismissing the suit fordefault stood dismissed as against the first defendant on 21.7.1994,the plaintiff is disentitled from proceeding with the suit. The suit wasdismissed on 19.1.1993 for non appearance of the plaintiff on thatday. Both the defendants were present on that day. While the firstdefendant had contended that he is no way liable for the plaint claimand that if at all any amount is due, it is due from the seconddefendant, the second defendant had contended that he is in no wayliable for the plaint claim. When the application to set aside the orderdismissing the suit for default came up for consideration on 21.7.1995,on noticing that in spite of repeated directions, notice had not beenserved on the first defendant, the court below dismissed theapplication as against the first defendant. The order passed by thecourt below on 21.7.1994 dismissing I.A.No.712 of 1993 has attainedfinality. The plaintiff has not challenged that order. However, AS No.385/199716notwithstanding that order, the suit was initially decreed as againstboth the defendants. The decree and judgment were amended byorder passed on 28.2.1996 on I.A. No.3575 of 1995 filed by the firstdefendant. In the nature of the claim made in the plaint and thedefence put forward by the defendants and having regard to the reliefprayed for in the plaint, the trial court could not have in my opinion,set aside the order dismissing the suit for default (as was done in theinstant case on 21.7.1994 when I.A. No.712 of 1993 was allowed) asagainst the second defendant alone. A learned single Judge of theOrissa High Court considered a similar issue in Ratnakar Ray v.Kulamoni Roy (AIR 1951 Orissa 266) and held as follows:4. So far as the present order is concerned, it is clear,however, that there is nothing to show that defts.1, 2, 8and 12 did not appear on the date fixed. It is conceded byMr.Misra frankly enough that very rightly as it appears fromthe materials that defts. 1, 2, 3 and 12 were not called outby the Ct. at the time when the suit was taken up forhearing. In these circumstances, it is difficult to say thatthey did not appear. Besides the statement of Mr.Misra wedo not find anything on record to show that these defts.had been called upon and that either they did not respondor refused to take any steps in the case or anything of thekind. Appearance does not mean physical appearance bythe defts. themselves or their pleader. If appearance hadany meaning it is this that the party concerned must be inreadiness to see to the progress of the suit or the defencein such a manner as he thinks beat in his own interest. Thedefts. may have nothing further to do according to theirparticular line of defence until the actual hearing of the suitbegins, which in fact, had never begun. As I have alreadysaid that to the knowledge of the Ct. these defts. had never AS No.385/199717been set down ex parte. Under the circumstances and onthe facts it is not clear that the order of dismissal as againstthese defts. can be taken to be one under Order 9, Rule 8.Conceding that this order was against them as one underOrder 9, Rule 3, the pltfs. must make it clear whether theywant to have the order of restoration effectively passedagainst them. That they do so want appears from theirown petn. in which they implead them as opposite parties.If the suit had not been set down ex parte against themand if they were going to be bound by the order ofrestoration that had been passed, I do not understand howany order affecting them could be passed in their absence.Some support is prayed in aid from the absence of aprovision in the terms or the like of sub-r(2) of R.9 of theOrder from R.4. But that does not necessarily mean that inany default under Order 9, Rule 3 restoration can be had inthe absence of the opposite parties. There may be a casein which deft, has not at all appeared or having appearedhas not filed any defence. In such cases it is quite possiblethat the Ct in its discretion, may say that no notice isnecessary to be served upon him in the matter ofrestoration, as he must be served again after the suit isrestored to its file. But what about the case in which thedeft, had entered into contest, and had put the pltf. toproof of his case? In these cases certainly the dismissalpltf's suit, be it under whatever provision of the Code, givesrise to a valuable right in his favour. It is difficult toconceive that they can be deprived of that right withoutbeing heard. It may be said even without restoration thepltf. has a right to fresh suit on the same cause of action.It may be so, but that does not answer the deft's cause. Itmay be for the purpose of a fresh suit lot of money isnecessary by way of payment of court fees and the pltf.may not be able to institute a fresh suit. There is alwaysmany a slip between cup and lip. Under the circumstances,the right to prevent restoration of the suit is no doubt avaluable right. 12. It was held that in view of sub rule (2) of order IX of theCode of Civil Procedure, the application for restoration of the suit which AS No.385/199718was dismissed for default could not have allowed without notice to thedefendants who had appeared on the date on which the suit stooddismissed for default. I am in respectful agreement with the opinion ofthe learned single judge in Ratnakar's case referred to above. In theinstant case, I.A.No.712 of 1993 was dismissed as against the firstdefendant as per order passed on 21.7.1994 for the reason that thefirst defendant had not been served. The court below could not havein the absence of the first defendant allowed I.A.No.712 of 1993 andrestore the suit to file. The order passed by the court below inI.A.No.712 of 1993 on 21.7.1994 setting aside the order dismissingthe suit for default cannot therefore in my opinion, be sustained. 13. I shall next consider the question whether it is open to theappellant to challenge the validity of the order passed by the courtbelow on 21.7.1994 on I.A.No.712 of 1993 in this appeal. Thequestion whether interlocutory orders passed in a suit can bechallenged in an appeal from the decree was considered by the ApexCourt in Sathyadhyan Ghosal and Others v. Smt.Deorajin Debiand Another (AIR 1960 SC 941) Referring to sub section (2) ofsection 105 of the Code of Civil Procedure, the Apex Court held that aninterlocutory order which had not been appealed from either becauseno appeal lay or even though an appeal lay an appeal was not taken AS No.385/199719can be challenged in appeal from the final decree or order. In thelight of the authoritative pronouncement of the Apex Court on thepoint, the mere fact that the second defendant had not challenged theorder passed by the court below on 21.7.1994 on I.A.No.712 of 1993restoring the suit to file, notwithstanding the fact that the applicationstood dismissed as against the first defendant by order passed on20.2.1993, will not in my opinion stand in the way of the seconddefendant from canvassing the correctness of that order in this appealfiled from the decree in the suit. For the reasons stated above, I allow the appeal, reverse thedecree and judgment of the Court of the Subordinate Judge ofKozhikode in O.S.No.270 of 1991 and dismiss the suit. No costs. P.N.RAVINDRAN, (JUDGE)rkc/vps AS No.385/199720 AS No.385/199721