IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS TUESDAY, THE 29TH SEPTEMBER 2009 / 7TH ASWINA 1931 FAO.No. 95 of 2003() -------------------- OS.304/1995 of SUB COURT, MANJERI .................... APPELLANT/PETITIONER/PLAINTIFF: --------------------------------------------------- MARATT RUBBER LIMITED (A COMPANY REGISTERED UNDER THE COMPANIES ACT) HAVING ITS REGISTERED OFFICE AT 6TH MILE BHANNARGATTA ROAD, BANGALORE, REPRESENTED BY ITS MANAGING DIRECTOR, M.K. MARATTUKALAM, S/O. LATE KUNCHERIA. BY ADV.MR.A.P.CHANDRASEKHARAN, SENIOR ADVOCATE SMT.PRABHA R.MENON SRI.M.KRISHNAKUMAR RESPONDENT(S): RESPONDENTS/DEFENDANTS: -------------------------------------- 1. J.K. MARATTUKALAM, S/O. LAE KUNCHERIA T. MARATTUKULAM, TANA, MAMPAD P.O., MALAPPURAM DISTRICT. 2. K.K. MARATTUKALAM, S/O. LATE KUNCHERIA T. MARATTUKULAM, TANA, MAMPAD P.O., MALAPPURAM DISTRICT. 3. T.K. MARATTUKALAM, S/O. LATE KUNCHERIA T. MARATTUKULAM, DESIGNED INDIA, DEVARAJ URS ROAD, MYSORE CITY. 4. U. MOOSA, S/O. UMMASTHOOR RAYIN, MALABAR HOUSE, CHUNGATHARA AMSOM DESOM, MALAPPURAM DISTRICT. FAO.95/03 5. E. MOHAMMED, S/O. MAMMED, MANNARGHAT HOUSE, VALLUVANBRAM DESOM, POOKKOTTUR AMSOM, MALAPPURAM DISTRICT. ADV. SRI.N.L.KRISHNAMOORTHY FOR R4&5 SRI.K.LAKSHMINARAYANAN FOR R4&5 SRI.K.M.SATHYANATHA MENON FOR R1 THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 29/09/2009, THE COURT ON 29/09/2009 PASSED THE FOLLOWING: K.M.JOSEPH & M.L.JOSEPH FRANCIS, JJ. ``````````````````````````````````` F.A.O. No. 95 OF 2003 ``````````````````````````````````` Dated this the 29th day of September, 2009 J U D G M E N T Joseph, J. The appellant calls in question the common order passed in I.A.Nos.1091/1998, 757/2001 and 813/2002. Before we proceed to consider the order, it is necessary to refer certain facts. The appellant is the plaintiff in a suit for injunction and alternatively for recovery of possession on the strength of title. The subject matter of the suit is 76 acres of rubber estate which, according to the appellant, is owned by them as per the order of the High Court in a Company Petition. According to the respondents, the property became the subject matter of certain agreements executed by the former Chairman of the Company. Pending the suit, the appellant filed an application for interim injunction. The proceedings culminated in order dated 13-09-1996 in C.M.A.No.234/96 by which this Court found it to be a fit case where a receiver has to be appointed. It is accordingly that FAO.95/2003 : 2 : respondents 4 and 5 were appointed as joint receivers. In the order, it is stated that the receivership should be for a period of one year from 13-09-1996. It is subject to certain conditions. The Court also directed the trial court to dispose of the suit finally as early as possible, at any ate, within one year from the date of receipt of a copy of that judgment. Still further, it is not in dispute that in C.M.P.No.2135/1998 in C.M.A.No.234/1996, a Division Bench of this Court passed the following order:- “ This court by the order dated 20.5.1998 directed respondents 4 and 5 to make available necessary data regarding the difference in the price of rubber in order to re-fix the security amount as ordered by this court earlier. Both sides agreed before this court that the present arrangement of respondents 4 and 5 functioning as Receivers can continue till the disposal of the suit. Of course, there was some dispute regarding the amount to be deposited annually by the Receivers. It was in that background this court directed respondents 4 and 5 to furnish data in support of reduction of the security amount. Pursuant to the said order, respondents 4 and 5 produced certain FAO.95/2003 : 3 : documents to galvanize their points. The counsel has invited our attention to document number 6 wherein the price of rubber per kilogram was shown as Rs.26.50 as on December 1997. The said document also shows some upward rise in the prices from January 1998 onwards. In January 1998 the price of rubber per Kg. is shown as Rs.26.50. The counsel for the petitioner however disputes the above contention of respondents 4 and 5. In the reply affidavit filed on behalf of the petitioner it is stated that the price of rubber was Rs.40.50 per kilogram as on 31.3.1997. The reply affidavit further reveals that on 8.6.1998 the price of rubber was Rs.36/- per kilogram. From the rival contentions, it can be seen that this court cannot totally depend upon the data now given by the parties. The market fluctuations cannot have any certainty; it may change from time to time. Considering the fact that there is a reduction in the price of rubber, we feel that some indulgence by this court is necessary in the ends of justice. After all respondents 4 and 5 have to furnish security for the yield of rubber that may be received from the property in question. Therefore, we order that respondents 4 and 5 shall furnish security deposit for the amount of Rs.5 lakhs FAO.95/2003 : 4 : for the period from 13.9.1997 to 12.9.1998. This security deposit shall be made in two equal monthly instalments, the first instalment being payable on 29.7.1998. The other terms and conditions issued by this court on 13.9.1996 will continue to operate.” It would appear that the matter received the attention of the Apex court and it is common case that the suit still remains pending. We got a report from the court in which it is stated that the Supreme Court has stayed the proceedings and after the dismissal of the S.L.P. in 1999, the present FAO was filed and the records were called for by letter dated 14-08-2003. Since the records were not available, the Sub Court could not proceed with the suit, it is stated. 2. I.A.No.1091/1998 was an application filed by the appellant seeking directions for realisation of Rs.5 lakhs from the joint receivers. I.A.No.757/2001 was an application to strike off the defence of respondents 4 and 5 on account of non compliance with the order of the Court. I.A.No.813/2002 was an application filed by the appellant to direct respondents 4 and 5 to continue to deposit at the rate of Rs.5 lakhs every year from 13-09-1998 onwards. FAO.95/2003 : 5 : 3. I.A.No.812/2002, the order in which is not challenged in this appeal, was an application for conditional attachment of the property of respondents 4 and 5. The court below rejected I.A.Nos.1091/1998, 757/2001 and 813/2002. I.A.No.812/2002 was allowed. 4. We heard learned senior counsel appearing for the appellant Sri.A.P.Chandrasekharan, learned counsel appearing for respondents 4 and 5 Sri.K.Lakshmi Narayanan, besides Sri.K.M.Sathyanatha Menon appearing on behalf of the 1st respondent. The learned senior counsel for the appellant would essentially canvass before us the correctness of the order passed by the lower court in I.A.No.813/2002. He would point out that by the first order, namely, order dated 13-09-1996, respondents 4 and 5 had been appointed as joint receivers. They were called upon to deposit Rs.8 lakhs. They deposited Rs.8 lakhs. Subsequently, respondents 4 and 5 had a case that the amount of Rs.8 lakhs to be deposited was on the higher side. They made a complaint. They were asked to produce material. It is on the basis of material produced apparently that by order dated 29-06-1998 this Court reduced FAO.95/2003 : 6 : the amount from Rs.8 lakhs to Rs.5 lakhs. He would point out that there was failure on the part of respondents 4 and 5 to deposit Rs.5 lakhs for the period from 13-09-1997 to 12-09- 1998. It is the further case stated that they ought to have continued the deposit in a sum of Rs.5 lakhs for every year they were in possession as joint receivers. It is common case that by order dated 10-04-2001 in I.A.No.214/1999, respondents 4 and 5 were moved from receivership. The operative portion of the said order reads as follows:- “ 9. In the circumstances, defendants 4 and 5 are removed from receivership. The plaintiff shall file affidavit or petition informing about his willingness to function as receiver. If such petition or affidavit is not filed, further necessary arrangements shall be made for management of the property. Defendants 4 and 5 are directed to deposit security amount of 5 lakhs on or before 30- 05-2001 or without delay as the court further directs. If the amount is not deposited, appropriate orders shall be passed for recovery of the defaulted amount of Rs.5 lakhs. Defendants 4 and 5 shall handover possession of the property as per further directions from the court. They shall also FAO.95/2003 : 7 : furnish reports and accounts in court.” He would point out that respondents 4 and 5 even after the date of the said order continued to be in possession. He would submit that at any rate respondents are bound to deposit the sum of Rs.5 lakhs every year at least till the date of the order, namely 10-04-2001. It is pointed out that despite the direction in the aforesaid order to respondents 4 and 5 to deposit security amount of Rs.5 lakhs on or before 30-05-2001, it was observed in its breach by respondents 4 and 5. Accordingly, I.A.No.813/2002 and other I.As. were necessitated. Therefore, according to him, it is a bounden duty of respondents 4 and 5 to deposit at the rate of Rs.5 lakhs. He would point out that a perusal of the second order, namely order dated 29-06-1998, would show that both parties agreed that respondents 4 and 5 will continue as receivers till disposal of the suit. Accordingly, in so far as the suit itself is pending, he would submit that in so far as respondents 4 and 5 have not given up possession even after order dated 10-04-2001, they are bound to deposit at the rate of Rs.5 lakhs for every year they are in possession. 5. Learned counsel for the 4th and 5th respondents, on FAO.95/2003 : 8 : the other hand, would point out that the order of the court does not warrant any interference. According to him, even going by the second order, the direction to deposit the amount of Rs.5 lakhs was limited to the period from 13-09-1997 to 12- 09-1998. He would submit that actually respondents 4 and 5 did not derive any income. According to him, it was totally unprofitable. He would further point out that by judgment dated 01-09-1996, this Court had articulated certain conditions. He would submit that if respondents 4 and 5 defaulted in paying the amount, the consequences flowing from the same were clearly provided for. If there is breach on the part of respondents 4 and 5, it is unambiguously mentioned that the joint receivers shall automatically cease to have right to be in possession and management of the property and the Managing Director of the Company, Sri.K.M.Marattukulam, shall be entitled to function as receiver thereafter and the court shall put him in possession of the properties if an application to that effect is made. Accordingly, he would submit that it was sensing that the property may not yield any income as such, the FAO.95/2003 : 9 : appellant/plaintiff desisted from making any application in terms of the said condition. According to him, respondents 4 and 5 cannot be called upon to deposit any amount. He would submit that these are all matters to be decided after evidence is adduced as observed by the court below. He would also have a case that respondents 4 and 5 were not in possession after default is committed. He would submit that as far as the recovery of Rs.5 lakh which is ordered by order dated 10-04- 2001 is concerned, the court below has allowed the application for conditional attachment and that said order has become final. He would submit that there is no scope in any interference. 6. Learned counsel appearing on behalf of the first respondent would point out certain orders passed by the Karnataka High Court as also one order passed by this Court in an attempt to contend that the plaintiff should be discountenanced by virtue of his conduct falling short of standards expected of a person seeking equitable relief. He would, therefore, submit that these aspects may be borne in mind by this Court. FAO.95/2003 : 10 : 7. Going by the order dated 13-09-1996, respondents 4 and 5 were appointed as joint receivers for a period of one year. Apart from various conditions, it is clear that should there be default in payment of the instalment amounts., respondents 4 and 5 will cease to be receivers and the appellant can apply to be put in possession. We further notice that in the same condition, the court has specifically provided that the court shall also pass appropriate orders for recovery of the defaulted amount from respondents 4 and 5. This Court contemplated the disposal of the suit within a period of one year. It is later on when order dated 29-06-1998 was passed, the court would appear to countenance the agreement of parties about the arrangement that respondents 4 and 5 will continue till the disposal of the suit. Thereafter, taking note of the complaints of respondents 4 and 5 regarding the market fluctuations, the Court directed as follows:- “ Therefore we order that respondents 4 and 5 shall furnish security deposit for the amount of Rs.5 lakhs for the period from 13- 09-1997 to 12-09-1998. This security deposit shall be made in two equal monthly FAO.95/2003 : 11 : instalments, the first instalment being payable on 29-07-1998. The other terms and conditions issued by this Court on 13- 09-1996 will continue to operate.” 8. On the one hand, learned senior counsel for the appellant would contend that the reasonable way of interpretation of these orders would be that the court contemplated respondents 4 and 5 to continue as joint receivers till the disposal of the suit and also taking note of the fact that the court heeded to the complaint of respondents 4 and 5 that the amount of Rs.8 lakhs which is fixed under the judgment was on the higher side and the amount was reduced to Rs.5 lakhs, this Court should come to the conclusion that respondents 4 and 5 were under the obligation to continue to Rs.5 lakhs not only for the period from 13-09-197 to 12-09- 1998 but they were to continue to deposit the said amount of Rs.5 lakhs at least till 10-04-2001 when the court removed them from receivership. He posed the question as to the effect of the suit prolonging for a long period and its effect on the rights of the appellant/plaintiff should the suit be ultimately decreed. He would complain that in such an event, FAO.95/2003 : 12 : the appellant would not get any relief for no fault. On the other hand, learned counsel for the first respondent would point out that at any rate, the order dated 29-06-1998 in express terms limited the liability to deposit Rs.5 lakhs to the period from 13-09-1997 to 12-09-1998. He would submit that the said fact has been factored into order dated 10-04-2001 and further taken care of by the order in I.A.No.812/02 by which conditional attachment has been ordered. 9. The court below has taken note of the contention of the respondents that they were not able to pay the amount ordered to be deposited and the income from the property is meagre which is why they filed in I.A.No.214/99. It is further reasoned that whether the respondents failed to pay the amount willfully or not is the matter which can be decided after taking evidence. No evidence is adduced as of now, it is noted and, therefore, it is stated that a conclusion could not be arrived at as to failure to pay the amount willfully. It is stated that there is no dependable evidence to hold that the failure on the part of respondents 4 and 5 to deposit the amount is wilful. It is stated that the consequence of failure to deposit is FAO.95/2003 : 13 : referred to in the order itself and if the plaintiff was eager to get possession and prevent loss, he could have filed application to be appointed as receiver which was not done by him. The records reveal the appellant did not express willingness to act as receiver so far. It is stated that if respondents 4 and 5 were not receivers, the only amount which the plaintiff can claim is for damages in view of the removal from receivership in 2001. There is no data at present to hold that what is the mesne profit, it is stated. 10. It is clear that this Court contemplated that the suit will be disposed of within a period of one year. It is for the reason that the court by order dated 13-09-1996 appointed the receivers for a period of one year. No doubt, by order dated 29-06-1998, taking note of the view of the parties, the receivers were to continue till the disposal of the suit. Further we note that the court ultimately contemplated the suit will come to an end as contemplated by it within the stipulated time. It would appear that for this reason in the operative part of the order dated 29-06-1998 the court specifically provided the security amount to be deposited for a period FAO.95/2003 : 14 : from 13-09-1997 to 12-09-1998 to be Rs.5 lakhs. There is no order expressly fixing the sum of Rs.5 lakhs to be the security amount for the period after 12-09-1998. In view of the circumstances prevailing namely, the contemplation of the court that the suit itself will be disposed of within a time limit, we find it is unable to accept the contentions of the learned senior counsel for the appellant that even for the period after 12-09-1998 it must be taken that this court contemplated that respondents 4 and 5 have to deposit Rs.5 lakhs. No doubt, it is only by order dated 10-04-2001 that respondents 4 and 5 stood actually removed from receivership. 11. But, as to what is the amount which respondents 4 and 5 are to account for are all matters which we feel are better decided after evidence is adduced by the parties. We notice that the court had rejected I.A.No.813/02. While we make it clear that there is no order as such by this Court fixing the amount to be paid after 13-09-1998 as Rs.5 lakhs, we also leave open I.A.No.813/02 and this I.A. will be taken up after the evidence is adduced and appropriate orders passed thereon. Taking note of the long pendency of the matter, we FAO.95/2003 : 15 : direct that the court below will take up the suit itself and dispose of the same, as early as possible, at any rate, within six months from the date of receipt of a copy of this judgment. Send back the records immediately. The appeal is disposed of as above. Sd/- (K.M.JOSEPH, JUDGE) Sd/- (M.L.JOSEPH FRANCIS, JUDGE) aks // True Copy // P.A. to Judge