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The Balrampur Sugar Co. Vs. Chalachhitra Bharati and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtKolkata High Court
Decided On
Case NumberSuit No. 549 of 1980
Judge
Reported inAIR1981Cal23
ActsCode of Civil Procedure (CPC) , 1908 - Order 40, Rule 1
AppellantThe Balrampur Sugar Co.
RespondentChalachhitra Bharati and ors.
Appellant AdvocateGautam Chakraborty and ;Pradip Ghose, Advs.
Respondent AdvocateR.L. Sinha, Adv.
DispositionApplication dismissed
Excerpt:
- .....of injunction restraining the defendants from collecting any box office collection at the said cinema hall and also from exploiting or exhibiting the said film 'chadmabeshi'. 2. the petitioner's case is that the defendants nos. 2 and 3 are the partners of the defendant no. 1, the petitioners have been carrying on business as financier and merchants, on 4th of may, 1977 the petitioner lent and advanced a sum of rs. 2,25,000/- to the defendants on in-inter alia, the following terms and conditions : (i) the said sum would carry interest at the agreed rate of 18% per annum; (ii) the defendants would repay the said sum in ten equal monthly instalments, the first of such instalments would be paid after a period of eight months. in default of payment of any two instalments the entire.....
Judgment:
ORDER

Padma Khastgir, J.

1. This application has been taken out by the plaintiff for appointment of a Receiver over the box office collection at the Cinema Hall called 'Opsara Hall' with a direction to the Receiver to hand over to the petitioner all such collections in pro tanto satisfaction of the petitioner's claim against the defendant; also for an order of Receiver over the film 'Chadmabeshi' an order of injunction restraining the defendants from collecting any box office collection at the said Cinema Hall and also from exploiting or exhibiting the said film 'Chadmabeshi'.

2. The petitioner's case is that the defendants Nos. 2 and 3 are the partners of the defendant No. 1, The petitioners have been carrying on business as financier and merchants, On 4th of May, 1977 the petitioner lent and advanced a sum of Rs. 2,25,000/- to the defendants on in-inter alia, the following terms and conditions :

(i) The said sum would carry interest at the agreed rate of 18% per annum;

(ii) The defendants would repay the said sum in ten equal monthly instalments, the first of such instalments would be paid after a period of eight months. In default of payment of any two instalments the entire amount of the balance money would become due and payable;

(iii) As security for the due repayment the defendants agreed to secure the plaintiff, by way of first and paramount charge on the film called 'Chadmabeshi' and all positive and negative prints, first and paramount charges on the box office collection of the said film 'Chhadmabeshi' and equitable mortgage would be created of Cinema Hall In Howarh known as 'Opsara Hall'.

3. The money was duly paid in the month of May, 1977 but nothwithstanding repeated demands the defendants failed and neglected to make any payment apart from a sum of Rs. 32,168.98 p. and Rs. 4343.31 p. which were received from Sri Bishnu Pictures Private Limited on behalf of the defendants,

4. The present suit has been filed for a decree for Rs. 3,23,239.88 p. with interim and further interest at the rate of 6% and also for a declaration that the said film 'Chadmabeshi' with all its positive and negative prints are charged for due repayment; a decree for realisation of the proceeds of the said box office collection in respect of the said film 'Chadmabeshi' at the 'Opsara Hall' and for other consequential reliefs.

5. Mr. Gautam Chakraborty appeared with Mr. Pradip Ghose in support of this application.

6. Mr. R.L. Sinha opposed this application.

7. It is the case of the Respondents that Shib Narayan Dutta is the sole proprietor of the Cinema Hall known as 'Opsara Hall' and the defendants Nos. 1 and 3 have no interest in the said cinema. According to the Respondent, the document dated 4th May, 1977, containing various terms and conditions agreed to by and between the parties have not been duly stamped as required under Indian Stamp Act; hence the plaintiff cannot utilize the said document as the said agreement dated 4th May, 1977 bears a non-judicial stamp of Rs. 2/- only. But, according to the Respondent, the said document comes within the definition of 'mortgage' as defined by the Stamp Act, 1889 and accordingly required to be stamped under Article 40 Sub-section (A) of the schedule to the said Act; hence the requisite amount of stamp duty payable on the said document under the said article would come to Rs. 43,956/- approximately. It is the case of the respondent that the said document not being duly stamped cannot be looked into or admitted in evidence for any purpose whatsoever. It is the Respondent's further case that box office collections by exhibiting film is an interest in the immovable property; hence it requires registration under Clause 17 of the Registration Act as, according to the Respondent, this purports or operates to create, declare or assign right, title and interest of an immovable property. It is the definite case of the Respondent that the exhibitor's share of the box office collection from the said Opsara Cinema Hall is the usufruct of the immovable property; hence the same should be treated as an immovable property. The said document also creates equitable mortgage on the said Cinema Hall and accordingly that requires registration. The said agreement has also been entered into in violation of Section 27(2) of the Urban Land (Ceiling and Regulation) Act of 1976. According to the Respondent, the said document dated 4-5-1977, creates a mortgage and it does not record a mortgage already created in favour of the petitioner in the past. The entire transaction is indivisible; hence it cannot be taken advantage of by the petitioner without having it properly registered and without paying the necessary Court fees on it.

8. The parties argued at length and referred to various decisions.

9. In the suit filed against the defendants it would appear that the plaintiff has asked for a money decree as also for a declaration of charge over the box office collection of the Cinema Hall 'Opsara' at Howrah and for exhibition of the film 'Chadmabeshi'. Leave under Order 2 Rule 2 of the Civil Procedure Code has been obtained for the purpose of enforcing the mortgage created in respect of the said Cinema Hall in favour of the plaintiff.

10. Section 2(17) of the Stamp Act defines that 'Mortgage deed includes every instrument whereby for the purpose of securing money advanced, and to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers or creates to, or in favour of another, a right over or in respect of specified property.'

11. According to Mr. Sinha, this definition includes not only the immovable property but also it includes pawn or pledge of moveables. The definition does not make any difference between a legal and equitable mortgage. The word property is used in a wide and mere generic sense and embraces every kind of property whether moveable or immovable. In order to determine whether a document is a mortgage and answers the definition of a mortgage deed as per Section 2(17), the crucial question is whether there has been a transfer or creation of a right over or in respect of specified property by one person in favour of another. If such right is created the document is a mortgage. Where title deeds are deposited by way of equitable mortgage, a memorandum merely stating the purpose for which they are deposited is not an agreement for a mortgage and it need not be stamped. But a document which constitutes a bargain of a mortgage by deposit of title deeds and creates further rights in favour of the mortgagee, such as a right to appoint a Receiver and to require the execution of a mortgage in the English form, is a mortgage deed within the meaning of this clause. Hence it is the Respondent's case that Article 40 (A) is attracted and the document should have contained the necessary stamp.

12. Section 17(1)(b) of the Registration Act provides that 'any non-testamentary instrument which purports or operates to create, declare, assign, limit or extinguish whether in present or in future any right, title or interest, whether vested or contingent, of the value of Rs. 100 and upwards, to or in immoveable property shall be registered.'

13. Section 2(6) of the Registration Act defines the immoveable property as follows :

The Immoveable property includes land, building, hereditary allowances, rights to wages, rights to lights, fisheries or any other benefit to arise out of land, things attached to the earth or permanently fastened to anything which is attached to the earth but not standing timber, growing crops and grass.

14. Section 49 of the Registration Act provides that no document which is required to be registered under Section 17 shall be received as evidence of any transaction affecting such property or conferring such power unless it is registered.

15. According to Mr. Sinha, the box office collection is a benefit arising out of exhibition of the film 'Chhadmabeshi' at the Cinema Hall 'Apsara'; hence it is a benefit arising out of land and if it is a benefit arising out of land it requires registration under the Registration Act, hence the documents being not properly registered under the Registration Act this Court cannot look into the document for any purpose. Moreover, according to Mr. Sinha, the document has not been properly attested as the document has been only attested by one person and not by two persons as required under Section 50. Where an equitable mortgage has already been created but only there is a memorandum regarding such past transaction then the position would have been different. But here it would appear from the letter written on 4th May, 1977 that such equitable mortgage has been created by the instrument itself. According to Mr. Sinha, this is one transaction which includes the charge on the film, charge on the box office collection of the film, charge on the box office collection of exhibition of the film at the Cinema Hall 'Opsara' and lastly mortgage of the cinema hall 'Opsara' itself -- all these securities are created for only one single consideration, that is, the loan of Rupees 2,25,000/- given by the plaintiff to the defendants. Hence it is one cause of action and it cannot be reversed. As it is a document which requires proper stamp and registration and as both these requirements have not been complied with this Court should not look into the said document and pass any order relying on the said document. Moreover according to Mr. Sinha, the necessary permission under Section 27(1) of the Urban Land Ceiling Act has not been obtained from the Competent Authority. Hence the plaintiff cannot take any advantage of the said document.

16. As stated earlier, it would appear that Mr. R.L. Sinha has opposed this application mainly on three grounds. First of all according to him this document falls within the definition of Section 2 Sub-section (17) of the Indian Stamp Act.

17. According to Mr. Sinha Section 2(17) envisages not only immoveable properties but also movable properties. Hence according to Mr. Sinha Article 40 (a) of the Stamp Act would apply and as the instrument has not been properly stamped the same document is inadmissible under Section 35 of the Stamp Act which provides that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person or shall be acted upon unless suchinstrument is duly stamped. Hence Mr. Sinha submitted forcefully that this document without being properly stamped cannot be looked into. This submission of Mr. Sinha is of substance, but I am inclined not to decide this submission at this stage and leave the parties to agitate this point at the time of trial of the suit, Secondly, Mr. Sinha's submission is that under Section 2(6) of the Registration Act immoveable property includes land, building, hereditary allowances, rights of ways, light, ferries, fisheries or any other benefit arising out of the land and things attached to earth or permanently fastened to anything which is attached to the earth but not standing timber, grown crops nor grass. Section 17 Sub-section (1) (b) makes provision for documents which require compulsory registration. Under Section 17(1)(b) any non-testamentary instrument which purports or operates to create, declare, assign, limit or extinguish whether in present or in future any right, title at interest whether vested or contingent of the value of 100/- rupees and upwards to or in immoveable property requires compulsory registration. According to Mr. Sinha this instrument and/or agreement relates to and creates right, title and interest on an immoveable property, value whereof is more than 100 rupees, hence it is compulsorily registrable under the Registration Act. This instrument suffers from the said defect. Hence under Section 49 of the Registration Act it cannot be received in evidence as evidence of any transaction affecting such property. According to Mr. Sinha by the said instrument not only a mortgage has been created in respect of immoveable properties but also moveable properties. By projecting the film 'Chhadmabeshi' at the Cinema Hall 'Apsara' according to Mr. Sinha creates right and/or interest in the cinema hall, as according to him it is a benefit arising out of the landed property. The definition as given in the Registration Act is far too wide to include such a case. Under the Transfer of Property Act it amounts to a charge in respect of an immoveable property. Hence it requires registration.

18. From the perusal of the agreement as also from the letter dated 4th of May, 1977 it would appear that the agreement was entered on 4th May, 1977 whereunder the title deeds have been deposited by the defendant to the plaintiff for the purpose of creating an equitable mortgage for due repayment of the sum of Rs. 2,25,000/- together with the interest at the rate of 18 per cent. Hence it should appear that the mortgage was created by the said instrument and not by any independent agreement earlier thereto. In the prayers portion of the plaint filed herein the plaintiff has asked for a declaration of charge over the film 'Chhadmabeshi' with all positive and negative print, box office collection in respect thereof as also the said cinema hall 'Opsara' and also for a decree for the realisation of the said sale proceeds of the said box office collection of the film 'Chhadmabeshi' displayed at the said Opsara Cinema Hall, Hence Mr. Sinha strongly feels that the instrument not being properly stamped under the Stamp Act and not being registered under the Registration Act, this Court cannot look into the said document and use it as evidence of the said transaction. Under Clause 7 it has been provided that the plaintiff would be at liberty to realise their outstanding dues from the exhibitors' share of box office collection of the said cinema hall 'Apsara' which would be a first and paramount charge in favour of the financiers. Hence it amounts to an income from the immoveable property. Taking all these factors into consideration it will indicate that a right has been created in respect of an immoveable property the value whereof would be more than Rupees 100/-. Hence it is compulsorily registrable. Both the parties cited various cases laying down the principles and the circumstances under which an instrument would be required to be stamped and which would be required to be compulsorily registrable under the Registration Act. There can be no dispute as to the principles as laid down in those cases. However, I feel that although there is great substance and force in the submissions made by Mr. R.L. Sinha on behalf of the respondents on the point of registration and also on the point of putting the requisite stamp under the Court-fees Act I would leave the parties to agitate these points at the time of the trial of the suit.

19. According to Mr. Sinha this is a document which has been executed for one single consideration, that is, the loan transaction of a sum of Rs. 2,25,000/- for which a charge has been created on the film, on the box office collection of the film exhibited at the Cinema Hall 'Apsara' and the mortgage of the cinema hall 'Apsara' in favour of the plaintiff. Hence this document has been entered into in respect of one cause of action and it cannot be severed. Hence no part of the document can be taken advantage of. If it is indivisible then none of its clauses can be taken advantage of. An agreement to give up rights in property on certain conditions must be registered and is inadmissible in evidence even in so far as it relates to moveable property. The admission of execution of the said documents makes no difference as oral evidence to prove the contents of the said documents would also be inadmissible. If a document is indivisible and is not registered even then it would be inadmissible in respect of the moveables if the document is one and indivisible there being no separate transaction concerning the moveable property. Hence the document being not registered cannot be taken advantage of, The question as to when the equitable mortgage was created also becomes relevant for consideration as it is the case of the respondents that such equitable mortgage was created by the instrument itself which does not record a past transaction but creates the mortgage which would be evidenced from the letter dated 4th of May, 1977.

20. Although a particular instrument may be hit by Section 35 of the Stamp Act and S, 49 of the Registration Act but a party can always sue the borrower on the original consideration -- Here the defendants have admitted in unambiguous and clear language about their liability to repay the plaintiff the loan that they have taken from the plaintiff, there is no dispute whatsoever as to that transaction. But in a case of a plain and simple monetary transaction the plaintiff is not entitled to and ask for appointment of a receiver as a matter of course until and unless some grounds have been made out in the petition itself. From the averments made in the petition it would appear save and except a bald statement that it is fit and proper and just and convenient that a receiver should be appointed no grounds for appointment of a receiver have been made out in the petition. Moreover in view of serious challenge being made to the said document being not properly stamped under the Stamp Act and not being registered under the Registration Act the plaintiff cannot take advantage of the document whereby a charge has been created in favour of the plaintiff over the film 'Chhadmabeshi' as also the box office collection. In the absence of proper averments being made in the petition for appointment of a receiver I am of the view that no order should be passed on this application. Hence I pass no order on this application, Costs of this application would be costs in the cause.


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