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State Bank of India Vs. Sakow Industries Faridabad (Pvt.) Ltd., New Delhi - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Misc. No. 49-M of 1975
Judge
Reported inAIR1976P& H321
ActsCode of Civil Procedure (CPC) , 1908 -Sections 22, 23(3) and 151
AppellantState Bank of India
RespondentSakow Industries Faridabad (Pvt.) Ltd., New Delhi
Appellant Advocate R.K. Chhibbar, Adv. and; A.K. Sib, Adv. of; Sandersons
Respondent Advocate T.S. Doabia, Adv.
DispositionPetition allowed
Cases ReferredDatt Singh v. Tej
Excerpt:
.....by single judge in a writ petition filed under article 226 of the constitution of india. in a writ application filed under articles 226 and 227 of constitution, if any order/judgment/decree is passed in exercise of jurisdiction under article 226, a writ appeal will lie. but, no writ appeal will lie against a judgment/order/decree passed by a single judge in exercising powers of superintendence under article 227 of the constitution. - with the petitioner-bank lying in the godowns of the said company at rajpur and khaikhli in the state of west bengal and at 36, indus-trial-cum-housing estate, farida'bad, aa security for the repayment of the loans. winding up started somewhere in 1971 and the transfers were made to the plaintiff company in the year 1972, which clearly shows that it..........of persistent demands made by the petitioner-bank.2. in order to realise the loans, the petitioner-bank filed a civil suit in the high court at calcutta in its ordinary civil jurisdiction for the recovery of a sum of rs. 53,05,463.02 against the said-company and the two guarantors, namely, shri s. p. mehta and mrs nirmala dcvi mehta (suit no. 542 of 1972-- state bank of india v. sakow industries (private) ltd.). the high court appointed two receivers on november 24, 1972, to take possession of the godowns of the said-company. the receivers succeeded in taking possession of the godowns at rajpur but were not allowed to take possession of the godown at khaikhli. they however, did not attempt to take possession of the godowns at faridabad. the aforesaid suit was filed in the high court at.....
Judgment:
ORDER

Ajit Singh Bains, J.

1. The State Bank of India has filed the present application under Sections 22 and 23(3) read with Section 151 of the Code of Civil Procedure for transfer of Suit No. 844 of 1972 pending in the Court of the Subordinate Judge 1st Class, Ballabhgarh, to the Court of the Subordinate Judge at Alipore, District 24 Parganas (West Bengal). It is alleged in the application that the petitioner-Bank through its Ballyguange Branch at Calcutta advanced to one Messrs. Sakow Industries (Private) Limited (hereinafter referred to as the 'said Company') various types of loans amounting to about Rs. 53 lakhs for the Industrial units of the said Company in Calcutta in the State of West Bengal and Faridabad in the State of Haryana. The said loans also included the loans advanced to Messrs. Tochi and Asa-vari carrying on business at 36, Indus-trial-cum-Housing Estate, Faridabad, These concerns were owned by Shri S. P-Mehte, who is Director of the said Company, All the liabilities of the loans were taken over by the said Company later on, It is also alleged in the petition that the loans advanced to the said Company were personally guaranteed by its two Directors, namely, Shri S. P. Mehta and Shri' mati Nirmala Devi Mehta (wife of Shri S. P. Mehta). The said Company alsopledged, hypothecated, charged its goods machinery, produce, merchandise, bills and book-debts etc. with the petitioner-Bank lying in the godowns of the said Company at Rajpur and Khaikhli in the State of West Bengal and at 36, Indus-trial-cum-Housing Estate, Farida'bad, aa security for the repayment of the loans. The said-Company also agreed to mortgage with the petitioner-Bank their lands and buildings at 36, Industrial-cum-Hous-ing Estate, Faridabad as security. It was also agreed upon that if the said Company does not abide by the financial discipline regarding the repayment of the aforesaid loans, the petitioner-Bank shall be entitled to call for the entire amount of loans including interest and other charges accrued thereon and to take physical possession of all the goods, produce, stocks, merchandise etc. The whole amount advanced to the said-Company by the petitioner-Bank amounted to about Rs. 53 lakhs. Not a single penny out of the loans advanced was returned by the said-Company in spite of persistent demands made by the petitioner-Bank.

2. In order to realise the loans, the petitioner-Bank filed a civil suit in the High Court at Calcutta in its ordinary civil jurisdiction for the recovery of a sum of Rs. 53,05,463.02 against the said-Company and the two guarantors, namely, Shri S. P. Mehta and Mrs Nirmala Dcvi Mehta (Suit No. 542 of 1972-- State Bank of India v. Sakow Industries (Private) Ltd.). The High Court appointed two Receivers on November 24, 1972, to take possession of the godowns of the said-Company. The Receivers succeeded in taking possession of the godowns at Rajpur but were not allowed to take possession of the godown at Khaikhli. They however, did not attempt to take possession of the godowns at Faridabad. The aforesaid suit was filed in the High Court at Calcutta on November 23, 1972, whereas the said-Company changed its registered office from 10, Middleton Row, Calcutta, to 13, Lower Range, Calcutta, on November 16, 1972. As the new registered office of the said-Company did not fall within the original side territorial jurisdiction of the Calcutta High Court, the said-Company raised an objection regarding the jurisdiction of the Calcutta High Court and the petitioner-Bank, in view of the said objections, withdrew the aforesaid suit from the Calcutta High Court with liberty to file a fresh suit on the same cause of action against the defen-dants in a proper forum vide order of the High Court dated December 18, 1972. During the interval that elapsed between the withdrawing of the suit from the High Court and filing of the fresh suit in the Alipore Court, it was found by the petitioner-Bank that the said-Company had broken the locks of the petitioner-Bank from their godowns at Khaikhli in breach of loan agreements and put the locks of one Messrs. Sakow Trading and Industrial Corporation, a sister partnership concern of the said Company having its Head Office at 10, Middleton Row, Calcutta. The persons interested in the said-Company started carrying on their unit at 36, In-dustrial-cum-Housing Estate, Faridabad, in a different name of Messrs. Sakow Industries (Faridabad) Private Limited with a view to defraud the petitioner-Bank of the huge amount due from the said-Company. It is also alleged that the Directors of Sakow industries (Faridabad) 'Private Limited are related to the Directors of the said-Company. This fact is not even denied in the written statement filed on behalf of the respondent in this application. A fresh suit was also filed by the petitioner-Bank in Alipore Court on January 13, 1973, against the said-Company, that is, Messrs. Sakow Industries (Private) Limited, its two guarantors, namely, Shri S. P. Mehta and Mrs. Nirmala Mehta, and the two new concerns, namely, Sakow Trading and Industrial Corporation and Sakow Industries (Faridabad) Private Limited who claimed themselves to be the lessees and owners of all the securities of the petitioner-Bank as mentioned above. The Alipore Court also appointed the same Receivers, who were earlier appointed by the Calcutta High Court as Receivers, in this case also, both the Receivers tried to take possession of the godowns at Khaikhli and also made an attempt to bake possession of the godowns at Faridabad, but they were prevented to take possession by the plaintiff-Company and Messrs. Sakow Trading and Industrial Corporation. Messrs. Sakow Industries (Faridabad) Private Limited (hereinafter referred to as the plaintiff-Company) filed a suit in the Court of the Subordinate Judge Ist Class, Ballabhgarh (Suit No. 844 of 1972, now No. 63 of 1974) for permanent injunction to the effect that the petitioner-Bank be restrained permanently from in-terfering in the peaceful possession of the premises mentioned in the plaint, that is 36, Industrial-cum-Housing Estate, Faridabad. In the plaint, it is mentioned that the entire premises and buildings at 36,Industrial-cum- Housing Estate have been taken by the plaintiff-Company on long lease for a period of twenty years through a registered lease deed dated July 11, 1972 from the said-Company. It is further averred that the plaintiff-Company has bought the machineries, manufacturing rights, fittings and fixtures from the previous owners for a valuable consideration.

3. The petitioner-Bank filed its written statement on April 21, 1973, and controverted all the allegations made in the plaint. It was specifically mentioned in the written statement that the present suit was filed in collusion with Messrs. Sakow Industries Private Limited with mala fide intentions to deprive the petitioner-Bank of its securities lying at 36, Industrial-cum-Housing Estate Faridabad. It is .also alleged by the petitioner-Bank that the liquidation proceedings were initiated against Messrs. Sakow Industries Pvt. Ltd. in the High Court at Calcutta being Company Petition No. 88 of 1971 and the said liquidation operations culminated in the winding up order passed by the Calcutta High Court on July 23, 1973. In view of the winding up order mentioned above, it was found that the lease granted in favour of the plaintiff-Company by Messrs. Sakow Industries Private Limited and the transfer of all other machineries etc. in favour of the plaintiff-Company was void eb initio under the provisions of Sections 531A and 536 of the Companies Act as the liquidation proceedings were initiated much before the alleged lease end transfer of machineries etc. on July 11, 1972, in favour of the plaintiff-Company.

4. In order to 'bring the aforesaid facts on record, the petitioner-Bank then moved an application for an amendment of its written statement in the Court of the Subordinate Judge 1st Class, Ballabh-garh, which was allowed by the Court vide its order dated September 5, 1975. The amended written statement was filed and the case was adjourned to December 8, 1975, for replication and framing of issues. The petitioner-Bank also filed a suit against the said-Company in liquidation for specific performance of the contract to create an equitable mortgage in favour of the petitioner-Bank on May 16, 1975, in the High Court at Calcutta and the suit is still pending there. It is in this situation that the present application has toeen filed.

5. Mr. Chhibbar, the learned counsel for the petitioner-Bank, has urgedthat the common questions of fact and law arise in both the cases--one pending in Ballabhgarh Court and the other pending in Alipore Court; that the entire amount of loans were granted by the petitioner-Bank through its Ballyguange Branch at Calcutta; that the entire evidence to be led by both the parties is available at Calcutta only and that the Ballabhgarh suit was filed by the plaintiff-Company mala fide to harass the petitioner-Bank as a counterblast and to prevent the Receivers from taking possession of the go-downs of the said-Company. I find merit Jn what the counsel for the petitioner-Bank states. About 53 lakhs of rupees are due from the said-Company to the petitioner-Bank and the aforesaid facts reveal that the said-Company is adopting one method or the other to delay the litigation and to prevent the Receivers from taking possession and the petitioner-Bank to realise its amount due and to hampef the realisation of the debts by the petitioner-Bank. The assets were transferred by the said-Company to the plaintiff-Company after its liquidation. The liquidation took place earlier. Admittedly, the notice in this case has also been served on the opposite party by the petitioner-Bank before moving the present application, as required under Section 22 of the Code of Civil Procedure. Moreover, this application has also been moved before the final settlement of issues in the suit at Ballabhgarh.

6. Mr. Doabia, the learned counsel for the respondent-Company, states that Section 22 is strictly not applicable in the present case as the plaintiff-Company could not file the suit in Calcutta and that the issues were also framed earlier and now only additional issues are to, be framed. I do not find any merit in either of these contentions. Although some preliminary issues were framed, but after, the filing of the amended written state-ment, an opportunity was given to file the replication and it was only then that the final issues were to be framed. Strictly speaking, even if Section 22 may not be applicable, it is a case where about fifty-three lakhs of rupees are due from the said Company. The Directors of the said Company and of the plaintiff-Company are inter-related. This fact is not denied in their return. The reply given in the return is evasive with regard to the other allegations in the transfer application.Most of the facts are denied for want of knowledge. There is no clear-cut denial.Moreover, the assets of the said Company were leased to the plaintiff Company dur-ing liquidation proceedings which is forbidden under Section 531A of the Companies Act. Winding up started somewhere in 1971 and the transfers were made to the plaintiff Company in the year 1972, which clearly shows that it was all mala fide in order to create hinderances for the petitioner-Bank to realise debts and to delay the litigation also. The present suit seems to be filed by the plaintiff Company in connivance with the said Company and the purpose seems to be the same. In all the cases pending in Calcutta and Faridabad Courts, same questions of law and fact are involved, parties are also the same, although a little different name is given but the name Sakhow Industries is common in both the suits- and the Directors of both these Companies are intimately related to each other, which fact is not denied as stated earlier. In such a situation, I find that it would be in the interest of justice if the case is transferred from the Court at Faridabad to the Court at Calcutta having jurisdiction in the matter. It is, however, pertinent to reproduce Section 23(3) of the Code of Civil Procedure which is in the following terms:--'Where such Courts are subordinate to different High Courts, the application shall be made to the High Court within the local limits of whose jurisdiction the Court in which the suit is brought is situate.'

7. The plain reading of this Section shows that in a situation like the present, High Court can order transfer of the case to some other Court under the different High Court. Moreover, under Section 151 of the Code of Civil Procedure every court has the inherent jurisdiction to pass any order to meet the ends of justice. In Pragji Soorji and Co. of Bombay v. Kalu Mal Shori Mal and Co. of Amritsar, AIR 1924 Lah 306, it has been held that the inherent powers under Section 151 of the Code of Civil Procedure can be used for the purpose of preventing or remedying grave abuses. Same view has been taken in Datt Singh v. Tej-datt Singh, AIR 1934 All 14. In the peculiar circumstances of the present case, as the facts enumerated reveal, it would meet the ends of justice and prevent the abuse of the process of the Court if the case pending in the Ballabgarh Court is transferred to the Court at Calcutta in which the connected matter is pendingbetween the petitioner-Bank and the said' Company.

8. For the reasons recorded above,this petition is allowed with costs andSuit No. 844 of 1972 (now No. 63 of 1974)pending in the Court of the SubordinateJudge Ist Class, Batlabhgarh, is transferred to the Court at Calcutta in which theconnected case between the petitioner-Bank and the said Company is pending.Counsel fee Rs. 300.


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