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L. Mullick and Co. and ors. Vs. Binani Properties P. Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKolkata High Court
Decided On
Case NumberAppeals Nos. 170-72 of 1979 and 335(A) of 1976
Judge
Reported in[1983]53CompCas693(Cal)
ActsCompanies Act, 1956 - Sections 394, 394(2) and 559; ;Companies (Court) Rules, 1959 - Rule 84; ;Code of Civil Procedure (CPC) , 1908 - Section 146 - Order 21, Rule 16 - Order 29, Rule 1; ;West Bengal Premises Tenancy Act, 1956 - Section 13(1); ;West Bengal Premises Tenancy (Amendment) Act, 1969
AppellantL. Mullick and Co. and ors.
RespondentBinani Properties P. Ltd. and ors.
Appellant AdvocateAninda Mitra, Adv.
Respondent AdvocateS.B. Mukherjee, Adv.
DispositionAppeals dismissed
Cases ReferredShantilal Thakordas v. Chimanlal Maganlal Telwala
Excerpt:
- .....of the appellants-is that so far as defendant no. 5, namely, p. mullick & co., is concerned, the decree passed against it was only on the ground of reasonable requirement of the landlord for the purpose of building and rebuilding inasmuch as the said p. mullick & co., is admittedly a sub-tenant in respect of the disputed property and it gave notice under section 16 of the west bengal premises tenancy act, 1956, in view of section 13(2) of the west bengal premises tenancy act, 1956, no decree for ejectment as against p. mullick & co. could be passed except on the ground mentioned in section 13(1)(f), the other ground as contained in section 13(1)(g) of the said act admittedly not being applicable in this case. so the contention is that in any event the decree cannot be executed against.....
Judgment:
ORDER

(1) That all the property, rights and powers of the transferor-company specified in the first, second and third parts of the Schedule hereto and all other property, rights and powers of the transferor-company be transferred without further act or deed to the transferee-company and, accordingly, the same shall pursuant to Section 394(2) of the Companies Act, 1956, be transferred to and vest in the transferee-company for all the estate andinterest of the transferor-company therein but subject nevertheless to all charges now affecting the same [other than (here set out any charges which by virtue of the compromise or arrangement are to cease to have effect) ].

(Paragraphs 2, 3, 4, 5 and 6 are not relevant for our purpose and, as such, omitted)

SCHEDULE

PART I

(Insert a short description of the freehold property of the transferor-company)

PART II

(Insert a short description of the leasehold property of the transferor-company)

PART III

(Insert a short description of all stocks, shares, debentures and other choses-in-action of the transferor-company).'

16. The order that has been made under Section 394(2) of the Companies Act is in terms of Form No. 42. As has been stated already, the disputed property, being 81, Netaji Subhas Road, Calcutta, has not been included in any of the parts of the schedule to the order. The question, therefore, is whether the disputed property has also passed to the transferee-company, namely, Binani Investment Co. P. Ltd. It is contended by Mr. Mukherjee, learned counsel appearing on behalf of the respondent, that in spite of the fact that the disputed property has not been mentioned in the schedule to the order, still it has passed to the transferee-company. He has placed reliance on the expression ' and all other property ' in para. 1 of the order made in terms of Form No, 42. It is submitted by him that by virtue of the said expression the disputed property, which has not been mentioned in the schedule, shall be deemed to have been transferred to the transferee-company.

17. The scheme of amalgamation provides for the transfer of the entire undertaking of the Binani Properties P. Ltd; to the Binani Investment Company P. Ltd. Further, the scheme provides, inter alia, that the undertaking of the Binani Properties P. Ltd. shall include all rights, powers, authorities and privileges and all properties, movable or immovable of whatever nature, etc. The scheme of amalgamation, therefore, clearly shows that it was agreed between the parties that all properties of the transferor-company would vest in the transferee-company. The scheme of amalgamation has been sanctioned by the company court and an order for the transfer has been made under Section 394(2) of the Companies Act. In our opinion, in the facts and circumstances of the case, particularly in the face of the scheme of amalgamation, there can be no room for doubt that the said order under Section 394(2) will include all the properties of the transferor-company, As soon as it is proved that any property to which the transferor-company had title at the time such an order under Section 394(2) was made, the property shall, by virtue of the said order, be deemed to havebeen transferred to the transferee-company. It is true that the disputed property has not been specifically mentioned in the schedule to the order, but the expression ' and all other property ' is wide enough to include any property not mentioned in the schedule. It is, however, contended on behalf of the appellants that as the disputed property has not been mentioned in the schedule, it did not pass to the transferee-company. The question whether a particular property has been transferred or not depends upon the facts and circumstances of each case. We are unable to accept the contention of the appellants that as the property has not been mentioned in the schedule, that will not be covered by the order of transfer. In certain cases, particularly where the scheme of amalgamation provides for the amalgamation of the undertaking of the transferor-company in part with that of the transferee-company, the non-mention of a property in the schedule will be of some consequence. But where, as in the present case, the amalgamation is of the entire undertaking, the scheme of amalgamation providing for the transfer of all properties, both movable and immovable, of any nature whatsoever, it is difficult to hold that the non-mention of a particular property in the schedule belonging to the transferor-company will keep the property outside the scope of the order of transfer under Section 394(2). So, on a proper construction of the order in the context of the facts and circumstances of the case, we hold that even though the disputed property was not mentioned in the schedule to the order under Section 394(2), it was covered by the said order and, consequently, it stood transferred to the transferee-company. There was, therefore, no necessity for rectification of the order.

18. The learned counsel for the appellants has placed much reliance on the decisions of the Supreme Court in Peirce Leslie and Co. Ltd. v. Miss Violet Ouchterlony Wapshare : [1969]3SCR203 and in Narendra Bahadur Tandon v. Shankar Lal [1982] 52 Comp Cas 62 ; : [1980]2SCR821 . In these decisions, it has been held by the Supreme Court that after a Corporation is dissolved, the property of the Corporation passed to the government by escheat or as bona vacantia. These two decisions, in our opinion, have no application to the facts and circumstances of the case, as we have already held that the disputed property had passed to the transferee-company by virtue of the order passed by the company court under Section 394(2) of the Companies Act, although the disputed property was not mentioned in the schedule to the order. In the said two decisions of the Supreme Court, there was no question of amalgamation of one company with another, but the company in question was dissolved and, accordingly, it was held that the property of the company passed to the government by escheat or as bona vacantia. In the instant case, however, the position of the transferee-company, that is, the Binani Investment Co. P.Ltd., was analogous to that of an heir of a deceased person. The question of escheat arises only when a person dies without leaving any heir. After an order under Section 394(2) was made and after the presentation of the certified copy of the order to the Registrar, the Binani Properties P. Ltd. stood dissolved and the transferee-company, that is, Binani Investment Co. P. Ltd., stepped into the shoes of the transferor-company. In our opinion it is difficult to apply the principle of bona vacantia or escheat in view of the existence of the Binani Investment Co. P. Ltd. with ;which the entire undertaking of the Binani Properties P. Ltd. was amalgamated. The contention of the appellants is misconceived and cannot be accepted.

19. Even assuming that the order under Section 394(2) did not include the disputed property as it was not mentioned in the schedule to the order, the question is whether after the rectification of the order and consequent inclusion of the disputed property in the schedule, the disputed property passed to the transferee-company with effect from the date the other properties of the company stood transferred to the transferee-company in view of the said order before it was rectified, in other words, whether the order of rectification would take effect from the date the original order was.passed, that is, September 17, 1970. It is argued on behalf of the appellants that unlike an amendment of pleadings, the amendment of an order does not take effect from the date of the order when it was initially made. It is also urged that the court should not have entertained such an application for rectification, for the disputed property was neither mentioned in the scheme of amalgamation, nor was it mentioned in the application for the sanction of the scheme. Accordingly, it is contended that there was no question of clerical or arithmetical error in the order that was required to be amended or rectified and the court should not have entertained such an application for rectification.

20. It may be that an order, whether it is by way of amendment or not, takes effect from the date it is passed. The contentions as made above on behalf of the appellants do not appeal to us. When by an amendment of the order no change is effected, but the amendment only clarifies the order, such clarification or rectification will undoubtedly take effect from the date the order was passed as if it was already there in the order. In the instant case, the order having directed the transfer of all other properties, the rectification of the order that was made was by way of clarification of the order by the inclusion of the disputed property in the schedule. In the circumstances, we hold that the order of rectification is virtually an order of clarification of the order passed under Section 394(2) of the Companies Act. Such an order of rectification by way of clarification not having made any change in the order will take effect from the date the order was originally made. In the view which we take, we are unable toaccept the contention of the appellants that after the expiry of two years from the date of dissolution of the transferor-company, there could not be any order of rectification. We are also satisfied that there was a bona fide mistake on the part of the respondent in not including the disputed property in the schedule to the scheme of amalgamation or in the application for sanction of the scheme of amalgamation. There is no reason not to accept the contention of the respondent that in the schedule to the order along with premises No. 31, Strand Road, Calcutta, that has been mentioned, the disputed property should have been mentioned inasmuch as the valuation of the said premises as shown in the schedule also includes the valuation of the disputed property. At the instance of the appellants, the respondent has produced before us the balance-sheets of the transferee-company for different years. The value of the disputed property stated to have been included within the value of the premises No. 31, Strand Road, Calcutta, appears to be borne out from the balance-sheets. Surely, it was not the intention of the parties to the scheme of amalgamation that the disputed property should vest in the State of West Bengal by escheat and so the disputed property was not included in the scheme. On the contrary, it was the clear intention that all assets and properties including the disputed property would be transferred to the transferee-company which, as stated already, is manifestly clear from the terms of the scheme of amalgamation. In the circumstances, there can be no doubt that there was a bona fide mistake in not mentioning the disputed property in the schedule to the scheme of amalgamation and, consequently, it was not included in the order under Section 394(2). There is no substance in the contention of the appellants that the disputed property was not included in the scheme of amalgamation mala fide with an ulterior motive.

21. The maintainability of the execution petition has also been challenged on the ground that it was not supported by an affidavit of competency. There is no rule that when a company is the decree-holder and puts the decree in execution, the execution petition should be supported by an affidavit of competency. Order 29, Rule 1 of the CPC provides that in suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case. Except the said provision there is no provision in the CPC providing that the execution petition shall be supported by an affidavit of competency. In our opinion, in view of Order 29, Rule 1, it will be sufficient if an execution petition is verified by the secretary or any director or other principal officer of the company. Even assuming that an affidavit of competency is necessary, more than one such affidavit have been filed in the instant case in support of the execution petition. On October 10, 1969,Baldeodas Pugalia, one of the directors of the Binani Properties P. Ltd., the original decree-holder, verified the execution petition. On the same day, he also 'filed an affidavit in support of the execution petition. In para. 1 of the affidavit, it has been stated by him categorically that he is authorised and competent to sign and affirm the tabular statement and also the affidavit on behalf of the plaintiff-decree-holder. There can be no doubt that the said affidavit is an affidavit of competency. It is not necessary to refer to other affidavits of competency which have all been referred to by the learned judge, for one affidavit of competency is quite sufficient. There is, therefore, no substance in the contention of the appellants that as the execution petition is not supported by an affidavit of competency, it is not maintainable.

22. The next point that has been urged on behalf of the appellants is that the decree became a nullity after there had been an amalgamation of the Binani Properties P. Ltd., the decree-holder, with the Binani Investment Co. P. Ltd. and, thereafter, on the amalagamation of the latter company with the respondent, the Metal Distributors Ltd. It may be recalled that the decree for eviction that has been put into execution was passed on the ground of reasonable requirement for building and rebuilding and also on the ground of default in payment of rent. It is contended that the transferee-company, that is, either the said Binani Investment Co. P. Ltd. or the present respondent, cannot take advantage of the said requirement of the decree-holder transferor-company and seek to evict the appellants from the disputed property. It is the contention of the appellants that such requirement of the transferee-company had not been adjudicated upon under the decree, as it could not be, and so it had no locus standi to recover possession of the disputed property for the purpose of building and rebuilding. The decree for possession, the learned counsel submits, had, therefore, become a nullity and cannot be executed.

23. The above contention, in our opinion, is fallacious and does not stand to reason. In the first instance, the decree is also on the ground of default in payment of rent and, secondly, the executing court cannot go behind the decree. The decree was passed by a court of competent jurisdiction and, consequently, it was quite a valid decree. It may be that after the decree was passed the disputed property was transferred to the transferee-company, but on that ground the decree, in our opinion, had not become a nullity even though the decree was passed on the ground of reasonable requirement for building and rebuilding. It is true that the executing court can construe the decree in the light of the judgment and, if necessary, on the basis of pleadings as held in Bhavan Vaja v. Solanki Hanuji Khodaji Mansang, : AIR1972SC1371 . Such a construction can be made if the decree is vague or it is not consistent with the judgment, but wherethere is no such vagueness or inconsistency and the decree is clear, the executing court, in our opinion, will have no jurisdiction to embark upon a construction of the decree. Moreover, there is no question of the decree being a nullity under any principle of law simply because it was passed on the ground of reasonable requirement for building and rebuilding and thereafter the property in dispute was transferred. Under the West Bengal Premises Tenancy Act, 1956, when the decree is passed on the ground of building and rebuilding, the decree-holder has to comply with the provisions of the said Act regarding building and rebuilding, etc. But it cannot be said that as the property has been transferred, the decree has become a nullity.

24. Much reliance has been placed by the appellants on a decision oi the Delhi High Court in Shama Banu v. Jagdish Parshad, : AIR1975Delhi164 . In that case, during the pendency of the appeal against an order for eviction on the ground of bona fide requirement for building and rebuilding under Section 14(1)(g) of the Delhi Rent Control Act, 1958, the landlord sold his interest in the property and the new landlord was added as a party to the appeal. It was held that the new landlord could not evict the legal representatives of the tenant who died in the meantime, for the requirement of building or rebuilding was personal to the previous landlord and since he had ceased to be the owner that requirement came to an end after he had sold the property. If the new landlord wished to build or rebuild he would have to file his own eviction petition under Clause (g) and make his own claim against the tenant. He cannot claim the benefit of the original right to-sue in his capacity as the landlord. In coming to the above conclusion, the Delhi High Court relied on and followed the decision of the Supreme Court in Phool Rani v. Naubat Rai Ahluwalia, : [1973]3SCR679 , where it was held that the requirement of the landlord was his personal requirement, and that such personal cause of action must perish with the plaintiff. Phool Rani's case (supra) has since been expressly overruled in a subsequent decision of the Supreme Court in Shantilal Thakordas v. Chimanlal Maganlal Telwala, : [1977]1SCR341 . We do not, however, think that the above decision including the decision of the Delhi High Court in Shama Banu's case (supra) are relevant to the facts and circumstances of the instant case. In those cases, the transfer of the property had taken place during the pendency of the suit or appeal when the decree or order for eviction was yet to be made or had not become final and conclusive so that it could be put into execution. When during the pendency of a suit for ejectment on the ground of reasonable requirement, the landlord transfers the suit premises, the court may refuse to pass a decree for ejectment on that ground, for the requirement of the landlord or the members of his family for their own occupation or for building or rebuilding cannotbe the requirement of the transferee. The appeal court may also take into consideration the fact of transfer of the suit premises during the pendency of the appeal as a subsequent event and set aside the decree for ejectment. But where, as in the present case, the decree for eviction has become final, there is no bar to the transfer of the premises in question by the plaintiff-decree-holder and the transferee will, as discussed above, be entitled to execute the decree; and it will be beyond the jurisdiction of the executing court to question the right of the transferee to execute the decree or to embark upon an adjudication whether the transferee has reasonable requirement of the premises. If such a question is allowed to be raised or such an adjudication is allowed to be made by the executing court, there will be no end to litigation and the decree will lose the sanctity that is attached to it. There will also be a great departure from the doctrine that the executing court cannot go behind the decree. In the circumstances, apart from the fact, the decision of the Delhi High Court in Shama Banu's case : AIR1975Delhi164 , has no application to the facts of the present case. There is, therefore, no substance in the contention that after the transfer of the property in question, the decree for eviction had become a nullity.

25. The further contention of the appellants-is that so far as defendant No. 5, namely, P. Mullick & Co., is concerned, the decree passed against it was only on the ground of reasonable requirement of the landlord for the purpose of building and rebuilding inasmuch as the said P. Mullick & Co., is admittedly a sub-tenant in respect of the disputed property and it gave notice under Section 16 of the West Bengal Premises Tenancy Act, 1956, In view of Section 13(2) of the West Bengal Premises Tenancy Act, 1956, no decree for ejectment as against P. Mullick & Co. could be passed except on the ground mentioned in Section 13(1)(f), the other ground as contained in Section 13(1)(g) of the said Act admittedly not being applicable in this case. So the contention is that in any event the decree cannot be executed against P. Mullick & Co., as it was not passed on the ground under Section 13(1)(f) of the said Act.

26. The contention, in our opinion, is misconceived and is also factually incorrect. The decree was passed on August 10, 1966, that is, before Clause (f) of Section 13(1) of the West Bengal Premises Tenancy Act, 1956, was amended and Clause (f) was split up into Clauses (f) and (ff) by the West Bengal Premises Tenancy (Second Amendment) Act, 1969. The unamended Clause (f) contained both the grounds of ejectment, namely, reasonable requirement for building and rebuilding and also for personal occupation of the landlord. After the amendment, the ground of reasonable requirement for building and rebuilding has been placed under Clause (f) and the other ground under Clause (ff). The decree having been passed on the ground of reasonable requirementfor building and rebuilding, it is a decree that satisfies the requirement of both the amended and unamended Clause (f). So, the decree is executable against P. Mullick & Co.

27. Lastly, it is argued that the learned judge was not justified in directing the grant of police help to the decree-holder for taking delivery of possession of the disputed property. It is submitted that without complying with the provision of Order 21, Rule 97 of the CPC, such a direction for police help cannot be given. It, however, appears that on November 8, 1968, when the bailiff had been to the disputed property to effect delivery of possession, he was resisted by the judgment debtors. The bailiff had submitted a report to that effect on November 16, 1968. On November 21, 1968, Sabyasachi Mukharji J., directed the grant of police help for the purpose of executing the writ of delivery of possession. In view of the said facts, we are of the view that the direction for police help is not unreasonable.

28. Before we part with these appeals, it may be stated that it is desirable that the tabular statement should be amended by deleting the name of Binani Properties P. Ltd. and substituting in its place the name of the respondent, Metal Distributors Ltd., so as to obviate all future difficulties in executing the decree.

29. For the reasons aforesaid, we affirm the judgment and order of Salil Kumar Roy Chowdhury J., and dismiss these appeals. The respondent will be entitled to amend the tabular statement by deleting the name of the decree-holder, Binani Properties P. Ltd., and, in its place, substituting the name of the respondent, Metal Distributors Ltd.

30. In view of the facts and circumstances of the case, there will be no order for costs in any of the appeals.

Sen, C.J.

31. I agree.


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