Punjab Small Industries & Exports Corporation Ltd. Chandigarh & Anr. v. Raghav Spinfab Private Ltd.Amritsar & Ors.

This is defendants' second appeal challenging the judgement and decrees of the courts below, whereby suit of plaintiff- respondent No.1 for permanent injunction restraining the appellants from cancelling the allotment of disputed plot with further prayer of mandatory injunction was decreed. As per the averments made in the suit, in response to an offer made by respondent No.4 for allotment of industrial plots on leasehold basis in Industrial Focal Point Expn.Amritsar under off-the-shelf scheme, plaintiff respondent applied for allotment of a plot measuring 5000 sq.yards for setting up a textile unit in the name of Raghav Synthetics Limited, now known as Raghav Spinfab Pvt.Ltd., Amritsar. Respondent No.4 vide its letter dated 09.12.1994 intimated the plaintiff-respondent regarding the RSA No.3951 of 2009(O & M) 2 approval of the Allotment Committee for the allotment of plot to it and further advised respondent No.1 to approach the appellants for necessary action. The Registrar of Companies vide their letter dated 28.12.1994 allotted the name of the company to respondent No.1 as Raghav Spinfab Pvt.Ltd.instead of Raghav Synthetics Limited because of non-availability of the name earlier demanded by the plaintiff-Company. Accordingly, respondent No.1 informed the appellants to effect the necessary change in their records. It is the further case of the plaintiff-respondent that a sum of Rs.1,40,000/- was further deposited with the appellant on 06.05.1995 as 20% cost of the plot towards the earnest money which was duly acknowledged by the appellant vide receipt No.12758 dated 17.05.1995. Subsequently, appellant issued allotment letter No. PSIEC/EW/EO/Allot/5677 dated 07.06.1995 and allotted plot No.432 Expn. Measuring 5000 square yards at Industrial Focal Point Expn.Amritsar on 99 years leasehold basis. Respondent No.4, through its Chief Co-ordinator vide its letter dated 25.08.1995 directed the appellant to hand over the possession of the plot to the appellant. Co-ordinator of appellant vide its letter dated 19.06.1996 conveyed the appellants its approval for change of the name of respondent No.1 from Raghav Synthetics Pvt.Ltd.to Raghav Spinfab Pvt.Ltd.as decided in their meeting held on 06.06.1996. Respondent No.1 again requested to accord their approval of the change in the name of the company so that the project is taken in hand as per schedule and the future payments are made. However, appellant paid no heed to plaintiff's genuine demand and instead of accepting the same threatened to cancel the plot. Respondent No.1 further deposited a sum of Rs.4,20,000/- by way of bank draft but appellant neither accorded their approval for the change of their name nor delivered the possession of the plot nor executed the lease deed. Hence the suit. Upon notice, appellant appeared and contested the suit by RSA No.3951 of 2009(O & M) 3 filing written statement raising various preliminary objections. On merits, it was admitted that application for allotment of plot was made in the name of M/s Raghav Synthetics Pvt.Ltd.and the plot was also allotted in the aforesaid name vide letter dated 07.06.1995. It was further admitted that allottee company vide its letter dated 04.07.1995 had requested the appellant for change of name of M/s Raghav Synthetics Pvt.Ltd.to M/s Raghav Spinfab Pvt.Ltd.after the allotment of the plot and any change of lease rights in favour of respondent No.1 was not allowed, at any stage. The demand was made from M/s Raghav Synthetics Pvt.Ltd.in whose name the allotment was made and the demand in question was also made from the allottee company. Since, no change in constitution could be permitted until the clearance of arrears or defaulted amount/outstanding dues against the plot, the allottee company was advised accordingly. However, the allottee company neither deposited the defaulted amount nor took any steps for implementation of their project. It was further stated that after payment of 30% initial down payment, the allottee was to take possession from the Sub-Divisional Engineer of the appellant from the date of issuance of allotment letter. However, the allottee failed to take timely possession. Subsequently, their request for possession and change in name could not be accepted due to failure of the allottee to clear the defaulted amount. Other averments were denied and a prayer for dismissal of the suit was made. Replication was filed in which the averments of written statement were denied and that of plaint were reiterated. From the pleadings of the parties, the following issues were framed:

1. Whether the plaintiff firm was allotted the plot?OPP

2. If issue No.1 is proved whether the plaintiff is entitled to permanent injunction as prayed for?OPP

3. Whether the plaintiff is entitled to the change of RSA No.3951 of 2009(O & M) 4 name?OPP

4. If issue No.3 is proved whether the plaintiff is entitled to mandatory injunction as prayed for?OPP

5. Whether the plaintiff has no locus standi to file the present suit?OPD

6. Whether the suit is barred by limitation?OPD

7. Relief. After hearing both the sides, trial Court decided issues No.1 to 4 against the plaintiff-respondent and in favour of appellants. Issues No.5 and 6 were decided against the appellants. Resultantly, the suit was dismissed. Aggrieved therefrom, the plaintiff-respondent filed an appeal before the Lower Appellate Court which was accepted vide impugned judgement and decree dated 27.04.2009. While accepting the appeal, the Lower Appellate Court found that the plaintiff-respondent who was earlier known as Raghav Synthetics Pvt.Ltd.was allotted plot in question vide letter dated 07.06.1995 (Ex.PW1/15). The execution of the lease deed and possession of the suit plot could not take place as name of the allottee company was changed to Raghav Spinfab Pvt.Ltd.which was approved by the defendant-authorities vide letter dated 19.06.1996(Ex.PW1/19) and on approval of the change of name the plaintiff-respondent was entitled to the allotment and execution of lease deed and possession etc.from that date. Resultantly, the appellants were restrained from cancelling the allotment of suit plot and were directed to execute the lease deed in favour of respondent No.1 as per terms and conditions in the allotment letter Ex.PW1/15 dated 07.06.1995 and hand over possession thereof to him. Not satisfied from the aforesaid judgement and decree of the Lower Appellate Court, defendant No.2 has filed the instant appeal. RSA No.3951 of 2009(O & M) 5 At the outset, learned counsel for the appellants has vehemently argued that while decreeing the suit, First Appellate Court failed to appreciate the terms and conditions of the allotment letter. As per the rules and terms and conditions of the allotment letter, change in the name of company cannot be allowed without clearance of the dues or without compliance of the due procedure. However, allottee company failed to deposit the outstanding amount and, therefore, the appellants had a right to cancel the allotment of the plot in question. On the basis of the aforesaid arguments, learned counsel for the appellants submitted that the following substantial questions of law arise in this appeal for consideration of this Court:

1. Whether the judgement and decree passed by learned 1st Appellate Court is liable to be set aside being perverse being against the oral as well as documentary evidence led by the appellant/defendant?

2. Whether the judgement and decree passed by learned 1st Appellate Court is liable to be set aside while not appreciating the terms and conditions of the allotment letter, which go to the root of the matter?

3. Whether the judgement and decree passed by learned 1st Appellate Court is liable to be set aside while not considering the letter dated 25.10.1995 Ex.PW1/5? I have heard learned counsel for the appellants and perused the impugned judgement and decree of the Lower Appellate Court. It is not in dispute that plot in question was allotted to the plaintiff-respondent in the name of M/s Raghav Synthetics Pvt.Ltd.vide letter dated 07.06.1995(Ex.PW1/5). It is also not in dispute that on allotment, the appellant had accepted the initial amount of earnest money etc.as per the terms and conditions of the aforesaid allotment letter from RSA No.3951 of 2009(O & M) 6 respondent No.1 which was known as Raghav Spinfab Pvt.Ltd. It may also be mentioned that respondent No.1 had applied to the competent authority to approve the name of the company i.e.Raghav Synthetics Pvt.Ltd. However, the said name was not approved by the Registrar of Companies as the same was not available and instead the company was allotted the name of Raghav Spinfab Pvt.Ltd.vide letter dated 28.12.1994 issued by the competent authority. It is also not in dispute that respondent No.4 had approved the change of name of the company in the allotment letter and vide letter dated 25.08.1995 and has also directed the appellants, herein, to handover the possession. Moreover, there is no evidence to hold that these were separate entities. In fact, there is no dispute regarding the constitution of the company of the allottee. The dispute is merely to change the name of the allottee company. The appellants, at no stage, have questioned the allotment in favour of allottee. Not only this, allottee, as early as on

09.12.1994 intimated to the appellant for change of name and the same was approved by the Government through its competent authority, respondent No.4, who had approved the allotment. Thus, the appellant, who is an extended arm of the Government of Punjab has raised a hyper technical objection. It is not the case of appellant that after approval by them on 19.06.1996, the respondent was ever issued any notice etc.for his failure to execute the lease deed or not complying with the terms and conditions. The appellant-corporation which is an instrumentality of the State, is, in fact executing the scheme floated by the State of Punjab through respondent No.4 and in fact, even the initial allotment in favour of plaintiff-respondent was approved by respondent No.4. It may also be noticed that on issuance of letter dated 19.06.1996 (Ex.PW1/19) approving the change of name from Raghav Synthetics Pvt.Ltd.to Raghav Spinfab RSA No.3951 of 2009(O & M) 7 Pvt.Ltd.by the appellant, the objections raised by the appellant lost its significance and the respondent was entitled to the suit plot as per the terms and conditions enshrined in the allotment letter dated 07.06.1995 (Ex.PW1/15) and the consequential benefits flowing from the same. It is settled law that First Appellate Court has jurisdiction under Section 96 of the CPC to hear the appeal on questions of law and facts and decide the appeal by giving reasons in support of the findings. Reference can be made to a judgement of the Hon'ble Supreme Court in Madhukar & Ors. vs.Sahga Ram & Ors. AIR 2001 SC 2171 Thus, no interference is called for in the impugned judgement and decree, which is based on proper appreciation of evidence. No substantial question of law, as argued, arises. Dismissed.

07.09.2010 (RAKESH KUMAR GARG) JUDGE