IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH FRIDAY, THE 17TH SEPTEMBER 2010 / 26TH BHADRA 1932 WP(C).NO. 4486 OF 2010(O) ------------------------------------------ AGAINST THE ORDER DATED 29/01/2010 IN IA 178/2010 IN CMA.8/2010 OF II ADDL.DISTRICT COURT,ERNAKULAM OS.235/2009 OF SUB COURT, MUVATTUPUZHA (IA 3268/09) .................... PETITIONER(S): ---------------------- ELDHO, S/O.SLEEBA, CHEMMAIA HOUSE, MALAYIDAMTHURUTH KARA, KIZHAKKAMBALAM VILLAGE, KUNNATHUNADU TALUK. BY ADV. SRI.M.C.CHERIAN SRI.M.A.THOMAS KUTTY SMT.SARAMMA CHERIAN SMT.ASHA CHERIAN SRI.P.M.SANEER RESPONDENT(S): ------------------------ MANUAL, S/O.JACOB, PEECHAPPILLIL HOUSE, THEKKEPUNNAMATTOM KARA, KADAVOOR VILLAGE, KOTHAMANGALAM TALUK. ADV. SRI.PEEYUS A.KOTTAM FOR R1 THIS WRIT PETITION (CIVIL) HAVING BEEN HEARD ON 17/09/2010 ALONG WITH W.P(C) NO.21130 OF 2010 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P.JOSEPH, J. ==================================== W.P(C) No. 4486 of 2010 and W.P(C) No.21130 of 2010 ==================================== Dated this the 17th day of September, 2010 J U D G M E N T Parties to the Writ Petitions are referred to as petitioner and respondent as in W.P(C) No.4486 of 2010. 2. These Writ Petitions concern running of a metal crusher unit in a property having an extent of 1.33 acres. It is not disputed that the said 1.33 acres together with the metal crusher unit and the building where it is housed belong to the respondent-defendant and for the purpose of running the said unit he obtained licence from the local authority and a no objection certificate from the Pollution Control Board. At that time petitioner-plaintiff and respondent-defendant entered into an agreement on 18.08.2005, not disputed, a licence agreement as per which petitioner was permitted to run the metal crusher unit for a period of 10 (ten) years from the date of agreement and for the said purpose use the property and the building subject to the terms and conditions stated therein. Petitioner was to pay Rs.16,000/- per month as licence fee for the first five years and at W.P(C) Nos.4486 & 21130 of 2010 -: 2 :- the rate of Rs.18,000/- per month for the remaining 5 years. It was also agreed that loan availed by the respondent on the security of property from the Kerala Financial Corporation (for short, “the KFC”) was to be paid by the respondent and if on account of any failure to pay installments the KFC wanted to proceed against property involved it will be open to the petitioner to pay installments and adjust the same towards licence fee payable. Agreement further provided that in case there was default in payment of licence fee for a period of three months the licence would stand automatically cancelled. Petitioner- licensee was granted the right to withdraw from the licence on giving three months’ notice in advance. Electricity and other charges for running the unit was to be paid by petitioner (licensee). Respondent received Rs.7,00,000/- from petitioner as security for due performance of the terms of the agreement. Petitioner ran the unit for some time. While so petitioner filed O.S.No.235 of 2009 in the court of learned Sub Judge, Muvattupuzha for decree for a prohibitory injunction to restrain respondent from trespassing into the suit property or interfering with his running the unit. Petitioner alleged that he learnt that W.P(C) Nos.4486 & 21130 of 2010 -: 3 :- with an eye to get more profit respondent is about to hand over the unit to some other person or sell the property and thus interfere with his enjoyment of the licence for the period for which it was granted. Along with the suit petitioner filed an application for the issue of a commission. Advocate Commissioner inspected the property on 11.12.2009 at about 4.00 p.m. and reported that he found certain persons engaged in operating the unit who according to the petitioner was his employees. Commissioner found a quarters (meant for the stay of employees) on the side of the building situated in the property made of hollow bricks and tin sheets. Petitioner filed I.A. No.3268 of 2009 for an order of temporary injunction. Respondent filed counter affidavit to that application admitting execution of the agreement of licence on 18.08.2005 but contending that as agreed between the parties licence agreement was cancelled as per agreement dated 23.11.2009 and at that time compensation payable to the petitioner for premature termination of licence was assessed at Rs.2,00,000/- and together with the security deposit of Rs.7,00,000/-, respondent gave two cheques to the petitioner for Rs.9,00,000/-. According W.P(C) Nos.4486 & 21130 of 2010 -: 4 :- to the respondent, petitioner has no right, interest or possession of the property since execution of the cancellation agreement dated 23.11.2009. He claimed that he is in possession and enjoyment of the property since the cancellation agreement dated 23.11.2009. He filed objection to the report of Advocate Commissioner claiming that employees found engaged in running the unit were his employees. Learned Sub Judge considered I.A. No.3268 of 2009 and held that in so far as execution of cancellation agreement dated 23.11.2009 is disputed by the petitioner it required expert opinion to enter a decision on I.A.No.3268 of 2009. Accordingly it was directed that petitioner shall take steps to send the disputed document to the expert for opinion. Parties, in the meantime were directed not to run the metal crusher unit. Petitioner was not satisfied with that order and took up the mater in appeal before learned Additional District Judge, Ernakulam in C.M.A. No.8 of 2010. In that appeal petitioner filed I.A. No.178 of 2010 for stay of operation of order of learned Sub Judge (directing parties not to operate the unit). That application was resisted by respondent. Learned Additional District Judge observed after a perusal of the admitted W.P(C) Nos.4486 & 21130 of 2010 -: 5 :- signature of petitioner in the agreement dated 18.08.2005 with the disputed signature in the cancellation agreement dated 23.11.2009 to form an opinion whether signatures are apparently similar, no expert opinion is required and that the court could do that under Section 73 of the Indian Evidence Act (for short, “the Act”). After perusing the admitted and disputed signatures learned Additional District Judge opined that disputed signature appeared to be similar to the admitted signature in the agreement dated 18.08.2005. Learned Additional District Judge refused to stay operation of the order passed by learned Sub Judge and dismissed I.A. No.178 of 2009. The C.M. Appeal was later disposed of in the light of disposal of of I.A. No.178 of 2010. Thus as per the decisions of the courts below neither parties are permitted to run the metal crusher unit. Petitioner has challenged the order of learned Sub Judge on I.A. No.3268 of 2009 and the order of learned Additional District Judge on I.A. No.178 of 2010 (in C.M.A. No.8 of 2010). Later W.P(C) No.4486 of 2010 was amended to incorporate a challenge to the judgment of learned Additional District Judge in C.M.A. No.8 of 2010. Respondent filed W.P(C) No.21130 of 2010 seeking permission to run the metal W.P(C) Nos.4486 & 21130 of 2010 -: 6 :- crusher unit for himself until disposal of the suit. In that Writ Petition he claimed that he has availed a loan of Rs.6,00,000/- from the KFC on the security of property involved. There was default in payment of loan and hence at the instance of the KFC revenue recovery proceeding is initiated and notice has been served on him by the Tahsildar for attachment of the property. It is stated that more than Rs.8,00,000/- is due to the KFC. He has to pay the amount to avoid attachment and sale of the property. Hence respondent requested that he may be permitted to run the metal crusher unit. He also stated that he is the licensee of the metal crusher unit, no objection certificate granted by the Pollution Control Board stands in his name and he is entitled to run the metal crusher unit. Petitioner has filed a counter affidavit in W.P(C) No.21130 of 2010 disputing claim of respondent and asserting that if at all the unit is to be worked he is the most competent person to do so since admittedly licence has been granted on 18.08.2005 permitting him to run the unit until 2015. 3. Learned Senior Advocate appearing for petitioner has argued that the question whether parties have entered into cancellation agreement dated 23.11.2009 is to be decided after W.P(C) Nos.4486 & 21130 of 2010 -: 7 :- expert opinion on the disputed agreement is obtained. Learned Additional District Judge was not correct in observing that the disputed signature in the cancellation agreement dated 23.11.2009 appeared to be similar to the admitted signature of petitioner in the licence agreement dated 18.08.2005. According to the learned Senior Advocate, learned Additional District Judge should not have ventured to form an opinion regarding genuineness of the disputed signature by resort to naked eye examination even under Sec.73 of the Act. It is also argued by learned Senior Advocate that when once cancellation agreement dated 23.11.2009 was not proved respondent has no right to unilaterally cancel the agreement dated 18.08.2005 as per which petitioner was entitled to run the unit till 2015. Learned Senior Advocate contended that when the agreement provided the manner of its termination, be it by efflux of time provisions of Indian Easements Act regarding termination of licence would not apply and parties would be governed by the terms of agreement itself. Reliance is placed on the decision of this Court in Philomina v. Executive Officer (1987 [2] KLT 89). Learned Senior Advocate would contend that Section 64 of the W.P(C) Nos.4486 & 21130 of 2010 -: 8 :- Easements Act would come into operation only when the period of licence has expired and the licensee asked for compensation. According to the learned Senior Advocate since respondent has permitted petitioner to run the metal crusher unit until 2015 petitioner is entitled to do so until the period of licence expired by efflux of time. It is contended by learned counsel for the respondent (petitioner in W.P(C) No.21130 of 2010) that respondent being admittedly the owner of land and metal crusher unit and the licence and other records standing in his name, on the face of it he is entitled to run the metal crusher unit until the controversy is determined by the learned Sub Judge. Learned counsel states that learned Additional District judge was justified in forming a prima facie opinion as to the genuineness of the disputed signature in the cancellation agreement dated 23.11.2009 for a decision on I.A. No.3268 of 2009 and that finding cannot be called in question. It is also contended by learned counsel that at any rate even if cancellation agreement dated 23.11.2009 is kept aside for the time being from consideration, fact remained that respondent has repudiated the licence in his counter affidavit to I.A.No.3268 of 2009 and that W.P(C) Nos.4486 & 21130 of 2010 -: 9 :- amounted to an implied revocation of the licence as provided under Sec.61 of the Act in which case petitioner was not entitled to file a suit to restrain respondent-licensor from re-possessing the property. It is argued that right of petitioner if there is a premature termination of licence is only to sue for damages. Reliance is placed on the decision of Division Bench of this Court in Trivandrum Golf Club v. State of Kerala ( 2010 [2] KLT 996. 4. As I stated there is no dispute regarding the agreement dated 18.08.2005. There is also no dispute regarding the relationship between parties – licensee and licensor, respectively. No doubt as per the agreement dated 18.08.2005 period of licence is fixed as 10 years (to expire in the year 2015). It is while so that respondent came up with the cancellation agreement dated 23.11.2009. True learned Sub Judge said that to form an opinion whether the said agreement was executed by petitioner expert opinion is required and the relevant documents are forwarded to Forensic Science Laboratory for opinion. But I am not persuaded to think that the court was precluded, for the purpose of deciding a prima facie W.P(C) Nos.4486 & 21130 of 2010 -: 10 :- case from looking into the disputed and admitted documents to find whether the disputed signature was similar to the admitted signature. For the purpose of forming a prima facie satisfaction that course was open to the learned Additional District Judge and Sec.73 of the Act also does not stand against that. That provision only said that the decision shall not be based merely on comparison made by the court. This Court in Trivandrum Golf Club v. State of Kerala (supra) has taken the view that even when there is premature termination of the licence by the licensor, licensee cannot maintain a suit for permanent prohibitory injunction against the licensor to continue enjoyment of the licence till the expiry of its period and that remedy open to the licensee is to sue for damages for premature revocation of the licence. True it is premature for me to decide that issue at this stage since the matter has to be decided by the trial court at the time of final disposal of the suit. But while considering who among the contestants is entitled to run the metal crusher unit I am to bear in mind that at least by the statement in the counter affidavit to I.A. No.3268 of 2009 respondent has repudiated the licence agreement and pleaded that petitioner is not a licensee W.P(C) Nos.4486 & 21130 of 2010 -: 11 :- since 23.11.2009 and thus a revocation of the licence could be implied. But I am not pronouncing final verdict on that issue in this proceeding. 5. It is not advisable to keep the metal crusher unit idle till the controversy is finally settled. By that time the machine will be spoiled. It should be operated. Then the question is which of the parties can be entrusted with running of the metal crusher unit? Respondent admittedly is the owner of property and the metal crusher unit The building where it is housed also belong to the respondent though petitioner has a case that he has put up additional structures and going by the report of the Advocate Commissioner there is a quarters for the employees but made of hollow bricks and tin sheets. It is also true that Advocate Commissioner has reported that at the time of his inspection on 11.12.2009 the unit was being operated by certain persons who claimed to be employees of petitioner which of course is disputed by the respondent. Question whether those employees are of petitioner or respondent and who was in actual possession of the property immediately after (alleged) termination of the licence on 23.11.2009 are matters required to W.P(C) Nos.4486 & 21130 of 2010 -: 12 :- be decided after trial. Fact remains that in the counter statement filed by the respondent in answer to I.A. No.3268 of 2009 he has taken up a plea that petitioner has no right, interest or possession of the suit property and unit after 23.11.2009. In other words respondent has repudiated right of petitioner. 6. It is argued on behalf of petitioner that though it is stated in the cancellation agreement that cheque for Rs.9,00,000/- was given to the petitioner, evidence on record shows that as on the date those cheques were allegedly given to the petitioner, respondent had no sufficient funds in his account as revealed by the statement of account produced by petitioner in this proceeding. In answer to that, it is contended by the respondent (in the trial court) that he tried to deposit necessary funds in his account on 23.11.2009 after execution of the cancellation agreement but he could not do so since banking time was over and when he was about to deposit necessary funds in the account the next day at about 9.00 a.m. he was informed by petitioner over telephone that he is not prepared to go by the cancellation agreement dated 23.11.2009 and demanded more compensation than already agreed to and given W.P(C) Nos.4486 & 21130 of 2010 -: 13 :- by the cheques. Therefore he did not deposit the amount. Learned Additional District Judge appears to have formed an opinion that petitioner had collected details of bank account of respondent which indicted that he was in custody of the cheques allegedly given by respondent. That observation does not appear to be correct since according to the petitioner he had only obtained a copy of the bank account collected by the police in connection with the criminal case. Assuming so, it requires evidence to decide whether respondent had given the cheques to the petitioner or not. Respondent has offered to deposit the sum of Rs.9,00,000/- in the trial court in case he is permitted to run the metal crusher unit. 7. Petitioner has produced certain documents in W.P(C) No.4486 of 2010 in support of his claim. One is the photocopy of licence to run the metal crusher unit admittedly standing in the name of respondent. The other is receipt for payment of electricity charges issued by the Kerala State Electricity Board for payment of electricity charges after 23.11.2009. As per agreement dated 18.08.2005 petitioner was to pay electricity charges. Hence the mere fact that electricity charge was paid by W.P(C) Nos.4486 & 21130 of 2010 -: 14 :- the petitioner even after 23.11.2009 cannot confer him with any right or preference over the claim of respondent. Property including the metal crusher unit belong to the respondent and licence for running the unit and no objection certificate from the Pollution Control Board stands in the name of respondent. Hence the only person competent to run the metal crusher unit on the face of the contention of respondent that he is no more inclined to permit petitioner to run the unit is the respondent himself. If on the licence that stands in the name of respondent, petitioner is permitted to run the unit and there is violation of conditions of licence, respondent as the licensee may even have to face criminal prosecution. If petitioner, in the background of strained relationship is permitted to run the unit belonging to the respondent, there could be no proper supervision of the manner of user of the unit. If the unit remains idle, it will get rusted and damaged. Respondent has also to discharge liability of the KFC. In these circumstances I am inclined to think that of the two, respondent is most suited, competent and entitled to run the unit. Hence until disposal of the suit I am inclined to permit respondent to run the metal crusher unit. But that shall be subject to W.P(C) Nos.4486 & 21130 of 2010 -: 15 :- conditions. Resultantly, these Writ Petitions are disposed of in the following lines: W.P(C) No.21130 of 2010 is allowed as follows: A) The order of learned Sub Judge on I.A. No.3268 of 2009 as confirmed by the learned Additional District Judge in C.M.A. No.8 of 2010 is modified in the following lines. B) Petitioner in W.P(C) No.21130 of 2010 (respondent in W.P(C) No.4486 of 2010) is permitted to run the metal crusher unit situated in the suit property until disposal of the suit subject to the following conditions: (i) Petitioner (in W.P(C) No.21130 of 2010 shall deposit Rs.9,00,000/- in a Nationalised Bank of his choice for a period of two years in the name of learned Sub Judge, Muvattupuzha and produce the Fixed Deposit Receipt in the said court. W.P(C) Nos.4486 & 21130 of 2010 -: 16 :- (ii) Petitioner (in W.P(C) No.21130 of 2010 shall not during the pendency of the suit cause any alteration to the existing structures in the suit property. (iii) Petitioner (in W.P(C) No.21130 of 2010 shall not grant licence in favour of any other person to run the metal crusher unit until disposal of the suit. (iv) Learned Sub Judge shall issue formal order granting permission to the petitioner (in W.P(C) No.21130 of 2010) to run the metal crusher unit on his producing the Fixed Deposit Receipt referred to above in that court. (iv) In case respondent (petitioner in W.P(C) No.4486 of 2010) wishes to withdraw the sum of Rs.9,00,000/- deposited by petitioner (in W.P(C) No.21130 of 2010) it will be open to him to file proper application in the Sub Court and W.P(C) Nos.4486 & 21130 of 2010 -: 17 :- learned Sub Judge may pass appropriate orders in the matter subject to appropriate conditions and on proper security. C) In the light of the order passed in W.P(C) No.21130 of 2010, W.P(C) No.4486 of 2010 is closed. THOMAS P. JOSEPH, JUDGE. vsv