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M/S. Mc. Adams Chemicals Manufacturing Company, 70-b, Viralimalai Road, Edamalaipattipudur, Trichy, Represented by Its Managing Partner and Four Others Vs. P. Nagaraun and Another - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberC.R.P. No. 1284 of 1999
Judge
Reported in2000(4)CTC751
ActsCode of Civil Procedure (CPC), 1908 -- Sections 151 -- Order 39, Rule 2A -- Order 41, Rule 5(2); Indian Partnership Act 1932 -- Sections 41
AppellantM/S. Mc. Adams Chemicals Manufacturing Company, 70-b, Viralimalai Road, Edamalaipattipudur, Trichy,
RespondentP. Nagaraun and Another
Appellant Advocate Mr. S. Gopalaratnam, Senior Counsel for ;M/s. S.S. Vijayakumar
Respondent Advocate Mr. T.R. Rajagopalan, Senior Counsel for ;Mr. K.S. Sunder
Cases Referred and Fakir Mohideen v. Habibunnisa (died) and
Excerpt:
commercial - status quo - section 151 and order 39 rule 2a and order 41 rule 5 (2) of code of civil procedure, 1908 and section 41 of indian partnership act, 1932 - revision petition against judgment of additional district judge - petitioner contended that action of not honouring cheques by bank after order of status quo amounted to violation of order of interim injunction - order of interim injunction according to petitioners was that 2nd petitioner be permitted to operate bank accounts as before - term 'as before' could at best be interpreted to mean that 2nd petitioner could operate bank account on behalf of 1st petitioner in accordance with prevailing mandate given at earliest point of time - in absence of proper signatures bank fully justified in not honouring cheques - revision.....order1. this civil revision petition has been preferred against the judgment and decree made in c.m.a.112 of 1996 dated 5.8.1998 by the ii additional district judge, trichirapalli, setting aside the decretal order and order of the principal subordinate judge, trichirapalli dated 8.11.1996 passed in i.a.no.828 of 1996 in o.s.no.499 of 1996.2. the first petitioner is a partnership firm represented by the second petitioner in his capacity as its managing partner and the three other petitioners claim to be the partners of the first petitioner firm, or a perusal of the pleadings, the following facts emerge. the first petitioner consisted of thirteen partners and a suit came to be laid at the instance of the petitioners in o.s.499 of 1996 against the rest of the partners for a declaration to.....
Judgment:
ORDER

1. This Civil Revision Petition has been preferred against the judgment and decree made in C.M.A.112 of 1996 dated 5.8.1998 by the II Additional District Judge, Trichirapalli, setting aside the decretal order and order of the Principal Subordinate Judge, Trichirapalli dated 8.11.1996 passed in I.A.No.828 of 1996 in O.S.No.499 of 1996.

2. The first petitioner is a Partnership firm represented by the second petitioner in his capacity as its Managing Partner and the three other petitioners claim to be the partners of the first petitioner firm, OR a perusal of the pleadings, the following facts emerge. The first petitioner consisted of thirteen partners and a suit came to be laid at the instance of the petitioners in O.S.499 of 1996 against the rest of the partners for a declaration to declare as null and void, the purported removal of the second petitioner from the position and status as Managing Partner of the first petitioner firm by defendants 2 to 10 and consequential relief of permanent injunction against them to restrain them from trespassing into the suit firm and from interfering in any manner with the running of the firm by the second petitioner as Managing Partner. The relief of declaration claimed in the suit was to the effect that the purported withdrawal of the power to operate the bank accounts by the second petitioner by defendants 2 to 10 by addressing a letter to defendants 11 and 12, who are the respondents herein, as null and void and for consequential permanent injunction against defendants 2 to 10 from interfering with the operation of the bank accounts of the respondents herein by the second petitioner on behalf of the first petitioner. It is significant to point out here and now that in the interlocutory application made in the said suit in I.A.691 of 1996 in O.S.499of 1996 by the present petitioners, the respondents herein were not made as parties.

3. The specific prayer of the petitioners in I.A.691 of 1996 in O.S.499 of 1996 was to the following effect:

'to grant temporary injunction restraining the respondents (defendants 2 to 10), their men and agents from trespassing into under mentioned property namely, factory premises and interfering with the second petitioner's day today running of the first petitioner firm including operation of bank accounts with defendants 11 and 12 (State Bank of India, SIB Division, Cantonment, Trichy-1) and the Tamil Nadu Mercantile Bank Limited, Tiruchirapalli) on behalf of the first petitioner/first plaintiff firm as before Managing Partner till the disposal of the suit and also grant an ex parte interim injunction to that effect till the disposal of this application.'

4. Be that as it may, the defendants 2 to 10 in O.S.499 of 1996 filed O.S.505 of 1996 for dissolution of the first petitioner firm and for appointment of a receiver and also for certain other reliefs. I.A.No.692 and 693 of 1996 was moved in O.S.505 of 1996 which was filed by the defendants 2 to 10 as plaintiffs, in O.S.505 of 1996 seeking interim orders for appointment of a Receiver and for appointment of a Commissioner to inspect the suit property and prepare a statement of stock position.

5. By order dated 17.9.1996, the trial Court passed a common order in I.A.691 of 1996 in O.S.499 of 1996 and I.A.Nos.692 and 693 of 1996 in O.S.505 of 1996. In I.A.691 of 1996, the trial Court granted an order of interim injunction restraining the defendants 2 to 10 from trespassing into the property described therein, namely, factory premises and from interfering with the second petitioner's day to day running of the first petitioner firm including operation of bank accounts with defendants 11 and 12 (State Bank of India, SIB Division, Cantonment, Trichy and Tamil Nadu Mercantile Bank Limited, Tiruchirapalli) on behalf of the first petitioner firm, as before us Managing Partner till the disposal of the suit. After the passing of the above said order on 17.9.1996, on behalf of the first petitioner, a communication was sent on 19.9.1996 to the first respondent which was received by the first respondent on the same day intimating the first respondent about the grant of injunction. In the said communication, it was stated that the Court had given a direction to the bank to permit the Managing Partner the second petitioner herein to operate the bank accounts as before with a request to comply with the direction of the Court. On the very same day, an advocate notice was also sent to both the banks in which it was claimed that pursuant to the order of injunction granted by the Court on 17.9.1996, the respondents were bound to comply with the said order by allowing the second petitioner to operate the bank accounts on behalf of the petitioner as before. It was also stated therein that the banks prevented the second petitioner from operating the bank accounts pursuant to the letter dated 30.7.1996 written by defendants 2 to 10.

6. Subsequent to the grant of the order of interim injunction, at the instance of defendants 2 to 10, an application in I.A.No.778 of 1996 in O.S.499 of 1996 was moved for grant of stay of operation of order dated17.9.1996 made in I.A.No.691 of 1996 for a period of three months to enable them to prefer an appeal under Order 41 Rule 5(2) of C.P.C. In the said application on behalf of the respondents 2 to 10, their counsel made an endorsement on 19.9.1996 requesting the Court to order status quo to be maintained as on the date of suit, while on behalf of the petitioners herein, their teamed counsel made an endorsement to the effect that the status quo as on that day should be directed to be maintained. Irrespective of the above stated endorsements, the trial Court passed an order on 19.9.1996 to the following effect:

'both directed to maintain status quo till 26.9.1996, and the application to be called on that day.' On 26.9.1996 the petition in I.A.778 of 1996 was closed since it was represented to the Court that certified copies had already been received by the parties.

7. In the mean while, after the order of the status quo was made on 17.9.1996, the second defendant addressed a communication to all the partners intimating about the dissolution of the firm as per the terms of the partnership deed. Further, the fourth defendant one V. Chellamuthu sent a communication dated 20.9.1996 to the first respondent herein intimating to the effect that an order of status quo anti had been passed by the trial Court in I.A.778 of 1996 on 19.9.1996. The said communication appeared to have been delivered in the Office of the first respondent around 10.00 a.m. on 20.9.1996. However by yet another communication of the same date, the said fourth defendant enclosed the copy of status quo order passed by the Court on 19.9.1996 to the first respondent. Besides on behalf of the first petitioner, a communication was addressed to the first respondent on 21.9.1996 expressing their anguish in not permitting the second petitioner from operating the bank accounts on behalf of the first petitioner firm. A reference was made in the said communication about the Senior Manager's promise to communicate on the next day about the banks decision in permitting them to operate the bank accounts after discussing with the legal officer of the bank and that till that date namely 21.9.1996, no communication was received from the Senior Manager of the bank about the said issue. On behalf of the petitioners yet another application in I.A.799 of 1996 in I.A.691 of 1996 in O.S.499 of 1996 was taken out to communicate the order of injunction dated 17.9.1996, made in I.A.691 of 1996 to the respondents herein. Pursuant to the said application, by order dated 27.9.1996, the order of interim injunction, dated 17.9.1996 was communicated to the respondents herein. In the said communication, it was stated that the said communication was being sent to the first respondent as per order dated 26.9.1996 in I.A.796 of 1996 for implement (implementation).

8. While the matters stood thus, one cheque dated 19.9.1996 issued on behalf of the first petitioner, signed by the second petitioner in his capacity as Managing Partner and one another partner called Mr. Dorai Singh, for the value of Rs.1,00,000 in favour of M/s. Sri Balaji came for collection through Indian Bank to the first respondent. It came for collection on 23.9.1996 to the clearing section of the first respondent The first respondent returned the said cheque on the ground that 'dispute among partners, withdrawal not permitted.' Similarly another cheque of identical nature dated 19.9.1996issued in favour of one M/s.Pure Chem Products Private Limited for a value of Rs.50,000 forwarded through the second respondent was received in the clearing section of the first respondent on 28.9.1996. That cheque was also returned by the first respondent for the very same reason on 28.9.1996. One other cheque dated 27.9.1996 for a value of Rs.30,000 issued in favour of one Thiru A. Balasubramanian carrying identical entries for a value of Rs.30,000 was presented in the Branch of the first respondent and the same was returned by the first respondent on 27.9.1996 itself on the very same ground, and another self cheque of identical nature for Rs.90,000 was also returned by the first respondent for the very same reason on 28.9.1996.

9. Two other communications which are also relevant for the purpose of deciding this Civil Revision Petition, are the one dated 30.7.1996 addressed by defendants 2 to 10 to the second respondent intimating the second respondent about the withdrawal of the powers conferred on the second petitioner from operating the bank accounts from the first petitioner firm and the other dated 23.8.1996, which is a certificate issued by the first respondent to the effect that a comprehensive credit facilities was being enjoyed by the first petitioner since 1982, that the conduct of their account was satisfactory till 30.7.1996 on which date, the operation of the account was stopped under instructions from 8 of the 14 partners.

10. In the above stated circumstances, an application was moved in October, 1996 in I.A.828 of 1996 in I.A.No.691 of 1996 in O.S.499 of 1996, as against the respondent herein praying the trial Court to punish the respondents for the wilful act of disobedience of the order of injunction made in I.A.No.691 of 1996 by putting them in Civil prison for maximum period of three months. It is averred in the affidavit filed in support of the said application, about the various developments that took place between 17.9.1996 and 28.9.1996 and stating that the second petitioner was unable to operate the bank accounts as a result of the persistent disobeyal of the order of the trial Court by the respondents. It was contended that the dishonour of the cheques issued by the second petitioner amounted to wilful disobedience of the order of the trial Court dated 17.9.1996 and therefore they were liable to be punished. The said application was filed under Section 94(c), Rule 2(A) and under Order 39, Rule 2(A) read with Section 151, C.P.C. The said application was resisted by the respondents herein.

11. The first respondent filed a counter statement, inter alia contending, that the said respondent was not a party to the injunction application in I.A.No.691 of 1996, that on receipt of the communication dated 30.7.1996 from the defendants 2 to 10, it was informed in writing to the parties about freezing of the accounts of the first petitioner in view of the dispute between the partners, that inspite of the said information having been made available to the petitioners, they did not implead the respondents herein as party respondents in the application for injunction in I.A.No.691 of 1996, that in the account opening form of the first petitioner, it has been categorically stated that the bank accounts should be operated by the second petitioner along with any one of the following persons namely R. Pandian, S. Tamil Selvi or Mrs.A.L. Firoz or any of the two persons above named namely, R. Pandian, S. Tamil Selvi and Mrs. A.L. Firoz, that the various cheques referred to under paragraph 5 of the affidavit filed in support of I.A.No.891 of 1996 were all signed by the second petitioner and one another person by name Dorai Singh, as one of the authorised persons, that between 19.9.1996 and 25.9.1996, irrespective of the order of interim injunction dated 17.9.1996, status quo was ordered to be maintained by the trial Court, that in the absence of a specific direction directing the defreezing of the bank accounts, the first respondent acted bona fide with a view to safe guard the interest of the bank and that even in the written statement, the first respondent expressed that they would abide by the orders of the Court. In the additional counter filed on behalf of the first respondent, it was further contended that by a communication dated 19.9.1996, the sixth defendant in the suit informed the bank about their move for staying the operation of the order of injunction dated 17.9.1996, that it was also informed to them about the order of status quo granted on 19.9.1996, which was to be in operation till 26.9.1996, that the said sixth defendant also requested the bank not to honour any cheque or permit the plaintiff to operate the account, failing which threatened with legal action against the bank, that subsequently, the fifth defendant also informed the bank about the order of status quo dated 19.9.1996, that the order of the injunction was served on the first respondent only on 28.9.1996, that in the mean time, the second defendant issued notice under Section 41 of Indian Partnership Act about the dissolution of the firm from 18.9.1996, that as on 23.9.1996 when the cheques were sought to be cleared, partnership firm was not in existence by virtue of the notice issued by the second respondent under Section 41 of Partnership Act, that that was the status prevailing when orders were passed on 19.9.1996 in I.A.No.778 of 1996 directing the maintenance of status quo, that in any case, the accounts were frozen as early as on 30.7.1996 which status was being maintained by the bank on the date of presentation of the cheques, that in those circumstances, the first respondent was obliged not to honour the cheques, that it was never the intention of the first respondent to disobey the order dated 17.9.1996 or to take sides with any of the parties, and that in any case, if the first respondent misconstrued the order while returning the cheques, no motive can be attributed against the first respondent It was also contended that, on 27.9.1996, the advocate for the respondent in I.A.No.691 of 1996 sent a notice to the first respondent raising serious objections for paying any of the cheques drawn by the second petitioner along with a partner other than those whose names were mentioned in the account opening forms. Ultimately, the first respondent came forward with a plea that in the event of the Court coming to the conclusion that the action of the first respondent amounted to violation of its order, the Court should accept its unconditional apology.

12. At the instance of the second respondent, identical counter was filed. The second respondent, however, did not file any additional counter as has been done by the first respondent.

13. The trial Court came to the conclusion that after the expiry of the order of status quo on 26.9.1996, the return of the cheques by the respondent as evidenced by Exs.P.1 to P.3 on the ground of dispute between the partners was only a lame excuse offered by the respondents, that the return of the cheques dated 27.9.1996 and 28.9.1996 when they were presented in person was also in deliberateviolation of the order of the Court in I.A.No.691 of 1996 and therefore there was no scope for showing any lenience to the respondents. The trial Court by referring to Clause 8(a) of the partnership deed, came to the conclusion that as per the clause contained therein, the Managing Partner either in his individual capacity or along with any other partner was entitled to operate the bank accounts and in such circumstances, the cheques presented for collection signed by the second petitioner along with other partner by name Dorai Singh was in order and therefore the action of the respondent in not honoring the above said cheques amounted to violation of the Order of interim injunction dated 17.9.1996. So holding, the trial Court imposed a punishment of three months imprisonment and thus allowed the application in I.A.No.828 of 1996.

14. Against the Order of the trial Judge, the respondents herein filed C.M.A.No.112 of 1996, and the Appellate Court was of the view that the dishonour of the cheques between 19.9.1996 and 26.9.1996 were covered by the Order of Status quo passed in I.A.No.771 of 1996. As far as the dishonour of the cheques subsequent to 26.9.1996 were concerned, it was held that inasmuch as the said cheques were not issued by the persons who were originally authorised to issue the cheques, no fault can be found with the action of the respondents. The appellate Court also took note of the subsequent development in and by which, this Honourable Court while dealing with the suit for dissolution in an appeal proceeding was pleased to observe that the dissolution of the firm stated to have come into existence on 18.9.1996 was approved and if that was the position on 18.9.1996 as observed by this Hon'ble Court, there was every justification in the stand taken by the respondents in refusing to honour the cheques presented by the second petitioner along with one other partner by name Dorai Singh on behalf of the first petitioner. The Appellate Court also took note of the fact that the respondents were answerable to the public and when the respondents acted in the interests of their constituents, it cannot be said that there was any deliberate violation of the orders of the Court. The Appellate Court thus allowed the appeal and set aside the orders of the trial Court.

15. Aggrieved against the order of the Appellate Court, the petitioners came forward with this civil revision petition. Sri S. Gopal Ratnam, learned senior counsel appearing for the petitioner contended that the first appellate Court committed a serious irregularity in interfering with the order of the lower Court, that the lower appellate Court failed to appreciate that the respondents when once were fully aware of the order of injunction granted by the trial Court committed a clear violation of the said order by not honoring the cheques issued at the instance of the petitioners which were returned by the first respondent subsequent to 26.9.1996. The learned senior counsel contended that when once the trial Court ordered 'status quo' to be maintained, the respondents ought to have maintained the status quo that was prevailing prior to 30.7.1996 inasmuch as the order of interim injunction dated 17.9.1996 restored the said position and which alone would have been the proper implication of the order of the trial Court in directing the parties to maintain status quo. The learned senior counsel therefore contended that the action of the respondents in returning the cheques presented subsequent to thegrant of the order of interim injunction dated 17.9.1996 and the order of status quo dated 19.9.1996 would clearly amount to violation of the orders of the trial Court. The learned senior counsel submitted that the order of the lower appellate Court in concluding that the respondents stopped honoring the cheques issued by the petitioners even prior to the order of status quo dated 19.9.1996 was not sustainable. The learned senior counsel further pointed out that the decision of the lower Court in stating that since operation of the bank account was brought to a stand still even prior to 30.7.1996, the dishonouring of the cheques after the order of status quo would not amount to violation of the order of the Court was erroneous. The learned senior counsel also contended that the finding reached by the appellate Court to the effect that the copy of the order of interim injunction was communicated only on 28.9.1996 and that there was no material to show that the said order was communicated to the respondents on any date proper to 28.9.1996 was not correct. The learned senior counsel pointed out that immediately after the grant of the order of interim injunction by letter dated 19.9.1996, the respondents were duly informed about the order of interim injunction granted by the trial Court, that the first respondent received the said communication on 19.9.1996 itself at 12.30 p.m. as per the endorsement made in the said letter, and that legal notice was also issued about the grant of the order to both the respondents on the same date namely 19.9.1996 and therefore the finding to the contrary was liable to be interfered with. The learned senior counsel further contended that the reliance placed by the lower appellate Court on the subsequent order passed by the Honourable High Court about the dissolution of the very firm itself was highly erroneous, in as much as the lower Appellate Court ought to have restricted the consideration relating to violation of the order of the Court with reference to the situation that was prevailing as on the date of alleged violation and not based on the subsequent developments. The learned counsel therefore contended that even if subsequently the conclusion reached by the Hon'ble High Court was to the effect that the dissolution of the firm had come into effect even as on 18.9.1996 the same will not validate the action of the respondents in respect of the violation of the order of interim injunction complained of. The learned counsel therefore contended that the order of the lower appellate Court was liable to be set aside and the order of the trial Court should be restored.

16. The Additional Advocate General appearing on behalf of the respondents by drawing the attention of the Court to the operative portion of the order of the trial Court, contended that the order of injunction was only as against defendants 2 to 10, in that they alone were restrained from interfering with the operation of the bank accounts by the petitioners. The learned Additional Advocate General submitted that the bank was not made a party to the said order in I.A.No.691 of 1996 and therefore there was no justification in complaining that the respondents violated any of the orders of the Courts below. The learned counsel by pointing out that at the instance of the petitioners, the communication of the grant of interim injunction dated 17.9.1996 was mooted through an application dated 23.9.1996, that that communication was directed to be made by the trial Court only on 27.9.1996 and that the said order dated 27.9.1996 was served on the first respondent only on 28.9.1996, and in such circumstances, the complaint of the petitioner that there was violation of the order of the Court belowwas without any basis. The learned Additional Advocate General further contended that by virtue of the action of the respondents, it cannot be concluded that there was wilful disobedience of the orders of the Court. The learned Additional Advocate General submitted that by a communication dated 18.9.1996 one of the partners of the first petitioner firm intimated about the dissolution of the firm and that even as per the communication of the first petitioner dated 19.9.1996 to the first respondent, the information given to the first respondent bank was that the Managing Partner should be permitted to operate the bank accounts as before. The learned Additional Advocate General would therefore contend that the manner in which the Managing Partner was operating the bank accounts prior to the filing of the suit as well as the injunction application had therefore to be gone into and if that factor was probed, it would show that as per the mandate given to the bank, the indisputable position was that the Managing Partner could operate the bank only along with the defendants 2, 5 and 7 and in the circumstances when the various cheques issued by the Managing Partner signed along with other person by name Dorai Singh, though he was also a partner, as the same was not in accordance with the mandate given to the bank.it cannot be held that the first respondent violated the order of interim injunction granted by the trial Court.

17. The learned Additional Advocate General submitted that the stand of the bank made in paragraph 5 of its counter dated 18.10.1996 was therefore perfectly in order and the order of the lower appellate Court was also fully justified. The learned Additional Advocate General further pointed out that in the above stated circumstances, when the respondent bank acted in the interests of their constituents, also being answerable to the public at large, cannot be stated to have violated any specific direction of the Court below so as to complain of disobedience. As regards the freezing of the accounts by the bank was concerned, the learned Additional Advocate General pointed out that on behalf of the petitioners, it was mentioned about the stoppage of the operation of bank accounts subsequent to 30.7.1996 and therefore the petitioners cannot now be permitted to complain of non intimation of freezing of accounts by the respondents.

18. Mr.T.R. Raja Raman, learned counsel for the second respondent contended that in the interests of the constituents of the second respondent bank and being answerable to the public at large, no exception can be taken to the action of the second respondent in not permitting the petitioners to operate the bank accounts subsequent to 30.7.1996 and that during the period when the status quo order was in operation i.e. between 19.9.1996 and 26.9.1996 as the status quo as on that day was non operation of the bank account, the respondent was justified in returning the cheque presented during that period.

19. On behalf of the petitioners, the Judgment reported in P. Khader Ovilliah and 2 others v. Maruthavadivu and another, 1997 (3) L.W. 476, was cited for the proposition that even a stranger to the order can be held to be guilty of contempt The learned counsel relied upon Tayabbhai, M. Bagasarwillah v. Hind Rubber Industries Pvt., : [1997]2SCR152 for the proposition that even if ultimately when the Civil Court came to the conclusion that it had no jurisdiction toentertain the suit, the disobedience of the earlier interim injunction can be taken note of and the patties can be punished for violation of the said interim orders. The learned counsel also relied upon Thamayanthi Devi Anipkipakar v. A. Tharmalingam and others, 1997 (3) L.W. 183 for the proposition that even if one was not made a patty to the proceedings, still the said party would be bound by the order passed by the Court.

20. The sequence of events leading to the filing of the application on behalf of the petitioners for violation of the order of interim injunction dated 17.9.1996 are as under. The defendants 2 to 10 issued a communication dated 30.7.1996 in their capacity as partners of the first petitioner firm intimating the bank about the withdrawal of powers conferred on the second petitioner by virtue of the partnership deed dated 1.6.1992 to operate the bank accounts on behalf of the first petitioner firm and therefore, none of the cheques signed by the Managing Partner either individually or jointly with another partner should not be honoured. When the second petitioner was confronted with such a situation, he filed O.S.No.499 of 1996 in August, 1996 for permanent injunction and for a declaration to declare as null and void the purported removal of the second petitioner from his position and status as Managing Partner of the first petitioner firm at the instance of defendants 2 to 10. Along with the said suit, the petitioners also filed I.A.No.691 of 1996, the petitioners prayed for an order of temporary injunction restraining the defendants 2 to 10 from trespassing into the schedule property namely the factory premises and also from interfering with second petitioners day to day running of the first petitioner firm including operation of bank accounts with the respondents herein on behalf of the first petitioner firm pending disposal of the suit In the said I.A.No.691 of 1996, orders were passed by the trial Court on 17.9.1996 to the effect that the respondents in the said LA. namely defendants 2 to 10 should be restrained from interfering with the petitioner's right to operate the bank accounts. It is also specifically mentioned in the order dated 17.9.1996 that the petitioners could operate the bank accounts as mentioned in the partnership deed as before and on that basis, interim order was granted. In the mean time, by a communication dated 23.8.1996, the respondents herein issued a certificate to the effect that the first petitioner firm was enjoying comprehensive credit facilities with them since 1982, that from 30.7.1996 the operation of the accounts was stopped under instructions from eight of the fourteen partners to stop the operation of the account. By a communication dated 18.9.1996, the second defendant issued a dissolution notice expressing dissolution of the first petitioner firm. The said communication was sent to all the partners of the firm as well as the respondents herein. After the order of interim injunction dated 17.9.1996, by letter dated 19.9.1996, the second petitioner intimated to the first respondent herein on behalf of the first petitioner about the order of interim injunction granted by the trial Court and requesting first respondent herein to comply with the direction of the Court and thereby permit him to operate the accounts as before. It was also stated therein that a cheque dated 19.9.1996 for the value of Rs.50,000 issued in favour of M/s.Pure Chem Products Private Limited to be accepted and honoured. The said communication dated 19.9.1996 was received by the first respondent on the same date around 12.30 p.m. On the very same date, legal notices were issued on behalf of the petitioners to both the respondents herein intimating about the order of interim injunction granted by the lower Courtwherein the respondents requested to permit the second petitioner to operate the bank accounts on behalf of the first petitioner in his capacity as Managing Partner as before. In the said legal notice, the freezing of the bank accounts pursuant to the letter dated 30.7.1996 as issued by the respondents 2 to 10 was also noted. On 18.9.1996, an application for suspension of the order of injunction was moved by defendants 2 to 10 under Order 41, Rule 5(2) and under Order 39, Rule 3, CPC. In the said application in I.A.No.778 of 1996, after hearing both sides, order was passed on 19.9.1996 to the effect 'both directed to maintain status quo till 26.9.1996, call on same day.'

21. The fourth defendant in the suit sent a communication to the first respondent on 20.9.1996 stating that the trial Court ordered 'Status quo Ante' in I.A. No.778 of 1996 on 18.9.1996 however on the very same day, the said fourth defendant sent another communication along with the xerox copy of order of status quo passed by the trial Court. It transpires that on 26.9.1996, the petition in I.A.No.778 of 1996 was closed by the trial Court on the footing that the certified copies of the orders of interim injunction had already been received by the parties. Two other communications also emanated from the first petitioner firm namely on 21.9.1996 to both respondents directing them to obey the orders of the Court by honoring the cheques presented by them. On 23.9.1996, an application was filed on behalf of the petitioners before the trial Court to communicate the order of injunction granted in I.A.No.691 of 1996 dated 17.9.1996 to the respondents herein and on the basis of the said application, an order was passed on 27.9.1996 officially communicating the order of interim injunction for implementation. The said order is stated to have been served on the respondents on 28.9.1996. It is claimed that a cheque dated 19.9.1996 for the value of Rs.50,000 drawn on first respondent herein was issued in favour of M/s.Pure Chem Products Private Limited that the said cheque was rooted through the second respondent and that the sum was returned with an endorsement 'dispute among partners, withdrawal not permitted'. The said endorsement was made on 28.9.1996. It is also claimed that another cheque dated 19.9.1996 for the value of Rs.1,00,000 was issued to M/s.Sri Balaji, drawn on first respondent which was rooted through Indian Bank for realisation, that the said cheque was also returned by the first respondent with the very same endorsement. It was in those circumstances, I.A.No.828 of 1996 was moved on behalf of the petitioners to punish the respondents herein for the wilful act of disobedience of the orders of injunction in I.A.No.691 of 1996 by committing them to Civil prison for a maximum period of three months.

22. The basis for moving the Court by way of I.A.828 of 1996 for punishing the respondents was the dishonour of the following cheques issued on behalf of the first petitioner by the second petitioner along with the third petitioner i.e.

i) cheque (No.210939 dated 19.9.1996) for Rs.50,000 issued and drawn on Tamil Nadu Mercantile Bank Limited, Tiruchirapalli;

ii) cheque (No.210938 dated 19.9.1996) issued and drawn on Tamil Nadu Mercantile Bank Limited, Tiruchirapalli for Rs.1,00,000 in favour of M/s. Sri Balaji;

iii) Cheque No.610723 dated 19.9.1996 for Rs.1,00,000 drawn on Stale Bank of India, SIB Division, Cantonment, Trichy in favour of M/s. Sri Balaji;

iv) Cheque No.610725 dated 27.9.1996 for Rs.30,000 was returned with endorsement in the Memorandum 'Dispute among partners, with drawal not permitted by 11th defendant';

v) Cheque No.610726, dated 28.9.1996 for Rs.90,000 was returned with endorsement in the memorandum 'dispute among partners, withdrawal not permitted by 11th defendant';

vi) Cheque No.610721 dated 19.9.1996 for Rs.50,000 was returned by 11th defendant on 28.9.1996;

vii) Cheque No.610724 dated 27.9.1996 for Rs.30,000 was returned by 11th defendant on 28.9.1996;

viii) Cheque No.210941 dated 27.9.1996 for Rs.40,000 was not accepted by 12th defendant;

ix) Cheque No.210942 dated 28.9.1996 for Rs.50,000 was not accepted by 12th defendant.

23. The first respondent filed a counter and additional counter to the application in I.A.No.828 of 1996 contending that the respondents herein were not made as parties to the application in I.A.No.691 of 1996, that on receipt of objection from defendants 2 to 10 dated 30.7.1996, the operation of the bank accounts was already frozen, that no action was taken for de-freezing the said account, that as per the mandate given to the bank, the operation of the accounts can be carried out by the second petitioner only along with the defendants 2,5 and 7, that in the cheques issued subsequent to the order of interim injunction, containing the signatures of the second petitioner and third petitioner were not in accordance with the approved mandate given to the bank, that as between 19.9.1996 and 26.9.1996, the prevailing status quo was non operation of the bank accounts of the first petitioner firm, that there was no specific direction in the order dated 17.9.1996 in I.A.No.691 of 1996 to the effect that the respondents should allow the operation of bank accounts, that the order of interim injunction served on the first respondent was only on 28.9.1996, that by virtue of the notice given by the Second 28.9.1996, defendant under Section 43(1) of the Partnership Act for dissolution of the first petitioner firm, the status quo as on that day was non existence of the firm itself, that in any event, the action of the first respondent was done in good faith and unintentional and that an unconditional apology tendered on its behalf should be accepted. The second respondent also filed an identical counter affidavit.

24. While dealing with such a situation, I feel it worthwhile to refer to certain dictums of our High Court as well as the Hon'ble Supreme Court so as to reach a proper conclusion in this proceedings. It is well settled that in respect of an order of interim injunction, when disobedience is complained of, the knowledge of passing of order of interim injunction itself was sufficient and that one cannot claim that even though he had the knowledge of the grant of interim order, the violation came to be committed well before service of copy of the said order of interim injunction. Reference can be had to the Judgments of the Hon'ble Supreme Court Hoshiar Singh and another v. Gurbachan Singh and others, : AIR1962SC1089 which was also followed by a learned Judge of this Court in T.V. Murugan v. The Management, Madura Coats Ltd, by Mr. Justice S. Padmanabhan, Cont.A.No.93 of 1982 dated 21.12.1982.

'It is now settled law that in the case of an order of injunction, which is prohibitive in nature, actual service of the order of the party is not necessary and that it will be sufficient if there is proof that the party had knowledge of the order aliunde.........'

One another relevant aspect considered by this Court while dealing with an allegation of disobedience was, that a party cannot use contempt jurisdiction as a legal thumbscrew to achieve certain purposes. In this respect, the judgment reported in Abdul Razack Sahib v. M/s.Azizunnisa Begum and others, : AIR1970Mad14 can be usefully referred to. The relevant passage reported in the said judgment is to the following effect:

'If we may use what may be considered an irrelevant expression, having regard to the high function of a Court of justice, proceedings by way of contempt of Court should not be used as a 'Legal thumbscrew' by a party against his opponent for enforcement of his claim. But that is what the petitioners have attempted in this case.'

In the judgment reported in Welfare Association of Absorbed Central Government Employees in Public Enterprises and another v. Arvind Verma and others, : AIR1998SC2862 , Their Lordships of the Hon'ble Supreme Court held that when there is a genuine doubt in construing and giving effect to the order of the Court by the alleged contemnors, their Lordships held that no contempt can be validly complained of. Similarly in Indian Airports Employees Union v. Ranjan Chatterjee and another, 1999 (2) L.L.N. 83, the Hon'ble Supreme Court has held that unless, disobedience can be construed as one of wilful disobedience, no contempt can be alleged against the party concerned.

25. Going by the above said well settled principles on contempt jurisdiction, I find that in the case on hand for reasons best known to them, the petitioners though impleaded the respondents herein as defendants 11 and 12, in the main suit specifically omitted to implead them as party respondents in the LA. for interim injunction made in I.A.No.691 of 1996. Whatever may be the reasons which weighed with the petitioners not to implead the respondents herein as parties in the injunction application, it throws considerable doubt as to whether such action was made with any specific intention. Such doubt looms large when the petitioners were fully aware about the freezing of the bank accounts by the respondents pursuant to the communication dated 30.7.1996 received from majority of the partners, yet no specific relief was sought for as against the respondents herein for de-freezing the bank accounts or for a specific direction against the respondents herein to permit the petitioners 2 to 5 to operate the bank accounts on behalf of the first petitioner firm. It is difficult to accept that the prayer in I.A.No.691 of 1996 seeking for an interim injunction to restrain the defendants 2 to 10 alone from interfering with the operation of the bank accounts by the second petitioner was made in an innocuous manner. The fact remains that in the initial stages, the respondents herein were kept in the dark by the petitioners with reference to the legal action initiated by them in respect of various aspects including the operation of bank accounts. While in the consideration of the petitioners, the operation of the bank accounts was a very vital factor, in myopinion, appropriate relief was not specifically claimed as against the respondents herein in order to set things right with reference to the operation of the bank accounts. One another aspect which is relevant for consideration is if the respondents herein had been made parties to the application for interim injunction, it would have enabled the respondents herein to put forth their submissions before the trial Court with regard to various impediments that would have come in the way in permitting the operation of the bank accounts by the second petitioner along with the other petitioners 3 to 5. It would have also enabled the respondents herein to bring to the notice of the trial Court about the mandate given by the partners of the first petitioner firm at the time of opening of the bank accounts as per which it transpires that the second petitioner could issue the cheques only along with either the second defendant, 5th defendant or the 7th defendant The above said facts unfortunately could not be dealt with by the trial Court while granting the order of interim injunction and was also not considered while dealing with the application for violation of the order in I.A.828 of 1996. Further as far as the maintenance of status quo is concerned, it is definite that as on 17.9.1996, the status that was being maintained was non operation of the bank accounts of the first petitioner firm. The said state of affairs was not in any way varied or altered in the next few days i.e. on 17.9.1996, 18.9.1996 and 19.9.1996. Admittedly on 19.9.1996, though a specific plea was made on behalf of the petitioners that 'status quo anti' namely, the status quo as on the date of filing of the suit should be ordered, at the instance of defendants 2 to 10, the stants quo as on that day, namely 19.9.1996 was sought to be maintained. Nevertheless by the order of the Court, both parties were simply directed to maintain status quo till 26.9.1996. The said order therefore would only mean that whatever status quo that was prevailing on and prior to the grant of order of interim injunction dated 17.9.1996 alone was the status quo to be maintained. If the order of the status quo were to mean, as though by virtue of the grant of the order of interim injunction, the operation of bank accounts by the first petitioner got revived, then there would be no necessity at all for the trial Court to direct the parties to maintain status quo. Therefore the status quo which was directed to be maintained and which was prevailing as on the date of the order namely 19.9.1996 was non operation of bank accounts of the first petitioner firm lying with the respondents herein. When that was the definite position as on 19.9.1996, in my view, the action of the respondents in not honoring the cheques during the period between 19.9.1996 and 20.9.1996 by the respondents cannot be characterized as in violation of the order of interim injunction dated 17.9.1996. It is also relevant to note that as on 18.9.1996, as far as the dissolution of the firm was concerned, by virtue of the notice issued by the second defendant, and as observed by this Hon'ble High Court made in the subsequent proceedings as reported in A. Nagappan and others v. M/s.Mc. Adams Chemicals Manufacturing Co., represented by its Managing Partner, : (1998)IIMLJ435 , represented by its Managing Partner this Court was of the view that it cannot be said that there was no dissolution at all as on 18.9.1996 as found by the Courts below.

In the judgments reported in S.V. Periyasamy and Sons, by its partner v. Nadar and three others, 1997 (1) L.W.527 and Fakir Mohideen v. Habibunnisa (died) and others, 1997 (2) L.W. 734, it has been held that the subsequent events can bevalidly taken into account in the facts and circumstances of this case. If the subsequent events are thus considered, the position would be, by virtue of the operation of the provisions of the Partnership Act, the dissolution of the firm had come into effect as on 18.9.1996. Therefore viewed in that respect, the question would be as to whether it could still be said that the respondents bank had simply closed their eyes in the matter of implementation of order of interim injunction bluntly without considering any of the other allied circumstances. In other words, could it be said that the intention of the respondent banks was only to violate or disobey the order of the trial Court without anything more. In the facts and circumstances stated above, it cannot be said that the petitioners approached the Court in such an innocent manner as attempted to be portrayed before the Court. I say so because even while filing the suit as well as the application for interim injunction, the petitioners were fully aware about the legal necessity of impleading the banks as parties to the suit in order to have an effective adjudication of the case. When the petitioners were prudent enough in impleading the respondents as defendants in the suit, the non impleading of the respondents in the application only appears to be a deliberate act so as to keep the bank away from raising any protest or objection in the matter of grant of interim orders. When the petitioners either on their own wisdom or on advice wanted to obtain orders behind the back of the respondents, 1 feel that the whole intend and purpose appears to be to secure an unworkable order and attempt to impose the same upon the Bank so as to create an obligation in the bank to allow them to operate the bank account under the guise of a Court order. If really, the petitioners were genuine in their attempt to restore the operation of the bank accounts, they should have come forward with a straight forward claim as against the defendants 2 to 10 along with the respondents herein with a specific prayer to direct the respondents herein to restore the operation of the bank accounts while preventing the defendants 2 to 10 from causing any obstruction as was prevailing prior to 30.7.1996. Such a right royal course not having been adopted by the petitioners, in my view, no fault can be found with the respondents herein for the alleged violation complained of against the respondent banks. Being a banking institution they are governed by certain regulations and code of conduct to be adhered to in the matter of transaction of business. They are answerable to various public authorities such as Reserve Bank of India, and others. Moreover such banking Institutions deal with the public money and they are also answerable to their other constituents. When as a matter of fact, there were serious disputes as between the partners of the first petitioner firm, it cannot be said that the action of the respondents in not honoring the cheques, which cheques cannot also be stated to have been issued in the proper manner, would amount to wilful or in deliberate violation of the order of interim injunction dated 17.9.1996. Unfortunately, the various above factors were not noticed by the trial Court while committing the respondents to Civil prison. If the order of the trial Court dated 17.9.1996 made in I.A.691 of 1996 is construed in strict sense, it would only mean that the defendants 2 to 10 should not prevent the second petitioner from operating the bank accounts in the manner in which he was carrying it on prior to the filing of the suit or prior to the freezing of the accounts namely 30.7.1996. Admittedly there is no violation complained of as against the defendants 2 to 10 by virtue of the grant of interim injunction as stated above. If at all any violation could be thought of in the facts and circumstances of the case, it could be only against defendants 2 to 10, and an order restraining them from preventing the petitioners to operate the bank accounts cannot be construed to mean that the respondent banks should, without anything more, permit the petitioner, in particular the second petitioner to have smooth operation of the bank accounts on behalf of the first petitioner. When the operation of the bankaccount could be carried out only with the aid of the respondents herein, in all fairness, the petitioners ought to have obtained necessary order in such a manner, that too in the presence of the respondents, that the respondents were also legally bound to permit the operation of the bank accounts by the second petitioner in the manner in which he claimed to have been entitled to operate. In the absence of such a clear cut direction from the Court below, merely going by the interim injunction granted in I.A.691 of 1996, it cannot be said that the respondents herein should have taken the burden upon themselves in flagrant violation of the banking regulations and other restrictions and permit the petitioners to operate the bank accounts and thereby enlarge the scope for creating many more other complications involving other public institutions as well and also expose themselves to various other liabilities for no fault of themselves. Therefore on that score also, it cannot be held that the respondents have violated the order of interim injunction as claimed by the petitioners.

26. In any event, the order of interim injunction even according to the petitioners was that the second petitioners should be permitted to operate the bank accounts as before. As rightly contended by the learned Additional Advocate General, the terms 'as before' could at best be interpreted to mean that the second petitioner could operate the bank account on behalf of the first petitioner in accordance with the mandate that was given at the earliest point of time which was prevailing when the operation was carried on earlier prior to 30.7.1996. If that be the position, the operation of the bank account could at best be carried on by the second petitioner only along with either the second defendant or fifth defendant or seventh defendant. As far as the bank was concerned, in the absence of the signatures contained in the instruments by the second petitioner along with the above said parties, they were fully justified in not honoring the cheques issued on behalf of the first petitioner. Admittedly the various cheques with reference to which violation of Court order is complained of were all signed by the second petitioner along with the third petitioner. It is true that under the partnership deed, the power was given to the second petitioner to operate the bank accounts along with the signatures of any one of the other partners or by issuing cheques signed by two of the partners. Irrespective of the above clause contained in the partnership deed, the petitioners and the defendants 2 to 10 gave a mandate to the bank to honour their instruments only if it was signed by the second petitioner along with defendants 2 or 5 or 7 and the respondents bank were bound only by such a mandate issued on behalf of the first petitioner firm at the time of opening of the bank account. Therefore the petitioners were totally unjustified in insisting that irrespective of the above said mandate, the respondent banks should have honoured the cheques issued by incompetent persons.

Looked at from any angle, the claim of the petitioners was not justified. Therefore as rightly held by the lower appellate Court, the respondent banks cannot be held to have violated the orders dated 17.9.1996 as complained of by the petitioners and the C.R.P. therefore fails and same is dismissed with costs of Rs.3,000 payable to the respondents.


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