1 IN IN IN THE HIGH COURT OF JUDICATURE OF BOMBAY THE HIGH COURT OF JUDICATURE OF BOMBAY THE HIGH COURT OF JUDICATURE OF BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION SUIT NO.1854 OF 1979 1(a) Ajit Dattatraya Devel. ) (b) Smt.Usha Dattatraya Deval ) (c) Sunil Dattatraya Devel ) All of Mumbai, Indian Inhabitants ) residing at 4/5 Ambekar Nagar, ) Chunabhatti (East), ) Bombay-400 022. ) ) 2. Pramila Nandkishore Mehta,an Indian, ) Inhabitant of Bombay, aged about 52 yrs.) Occ.Housewife/business, residing at ) ‘Jupiter’, Flat No.301, Plot No.41, ) Cuffe Parade, Colaba, Bombay-5. ) ) 3. Ira Shubha Bhattacharya, an Indian ) Inhabitant of Bombay, aged about 26 yrs.) Occ.Service/business, residing at ) Dattaguru Bldgs.,Bungalow C/8, ) Deonarpada Road, Bombay-88. ) ) 4. Koovappadi Venkatachalam Krishna Swami) an Indian, Inhabitant of Bombay, aged ) about 35 years, Occ.Business, residing ) at Rita Villa, J.B.Nagar, Andheri East, ) Bombay-59. ) ) 5. Ajay Rasiklal Shah, an Indian, ) Inhabitant of Bombay, aged about 22 yrs.) Occ.Business,residing at Reva Apartments) Flat No.173, Near Mahalaxmi Temple, ) Bombay-26. ) ) 6. Radhakisan Mohansingh Bajaj, an ) Indian, Inhabitant of Bombay aged about ) 50 years, Occ.Business, residing at ) Surya Apartments, B, 1st floor, Flat ) No.902, Warden Road, Bombay-26. ) ) 7. Dayalsingh Mohansingh Bajaj, an ) Indian, Inhabitant of Bombay, aged about) 45 years, Occ.Business, residing at ) Navjeevan Kuteer, C Building, Fourth ) Floor, Altamount Road, Bombay-26. )..Plaintiffs. V/s. 2 1. Union of India, through the Secretary) to the Government, Ministry of Defence, ) Department of Defence Production, ) Government of India, having its office ) at the Central Secretariat, New Delhi. ) ) 2. M/s.Mazgaon Dock Ltd., an incorporated) company, having its registered office at) Dockyard Road, Mazgaon,Bombay-400010. ) ) 3. M/s.Alcock Ashdown Company Ltd.,also ) an incorporated company, having its ) registered office at 16-Bank Street, ) Fort, Bombay-400 023. )..Defendants. Mr.Deepan Merchant a/w. Mr.Nikhil Salian i/b. P.Mehta & Mithi & Co. for Plaintiffs. Mr.S.R.Rajguru for Defendant No.1. Mr.Sunip Sen a/w. Mr.Kunal Damle for Defendant No.2. CORAM: CORAM: CORAM: A.M.KHANWILKAR,J A.M.KHANWILKAR,J A.M.KHANWILKAR,J DATE DATE DATE : DECEMBER 12, 2008. : DECEMBER 12, 2008. : DECEMBER 12, 2008. JUDGMENT JUDGMENT JUDGMENT : : : 1. The Plaintiffs have filed this Suit claiming jointly and severally sum of Rs.15 Lakhs with interest thereon at the rate of 18% per annum by way of damages from the Defendants for forcible dispossession and demolition of the shed, which was in their occupation as tenants without following due process of law. 2. Briefly stated, the Plaintiffs assert that by an agreement of Lease dated 1st November, 1961, the Defendant No.3 leased out the property admeasuring 671 sq.yards alongwith building/structure/shed 3 thereon situated at Magazine Street to the three partnership firms namely, (1) M/s.Hazari Silk Mills (2) M/s. Elite Chemical Industries (3) M/s. Modi Desai Industries. The firms M/s. Elite Chemical Industries and M/s.Modi Desai Industries are referred to as associate firms of M/s. Hazari Silk Mills. According to the Plaintiffs, they were in peaceful occupation of the demised premises since 1961. It is stated that although the lease period expired, the Plaintiffs continued to occupy the demised premises and their possession was protected as statutory tenant by virtue of provisions of Bombay Rent Act, as was in force at the relevant time. It is the Plaintiffs’ case that the Plaintiffs could have been dispossessed from the demised premises by the Defendant No.3 or any one claiming through or on behalf of the Defendant No.3-landlord only by following due process of law. It is stated that the Defendants however, issued notice to the Plaintiffs on 19th August, 1975 terminating tenancy of the Plaintiffs and called upon the Plaintiffs to vacate the demised premises within two weeks. This action of the Defendant No.3 was founded on the authority derived under the provisions of Alcock Ashdown Company Limited(Acquisition of Undertakings) Act, 1973. The said act was enacted on 14th December, 1973. Upon promulgation of the said act, all the 4 undertakings and properties of the Defendant No.3 company stood transferred to and vested in the Central Government i.e. 1st Defendant. The properties of the said company vested in the Government freed and discharged from any trust, obligations, mortgages, charges, liens or any other encumbrances affecting the same. By virtue of section 9 of the Act, 2nd Defendants were appointed as Manager of the 1st Defendant. In exercise of power conferred under the said Act, the Defendants issued notice of termination of tenancy to the Plaintiffs on 19th August, 1975, as the premises and undertakings of the said company were required for public purpose. In response, the Plaintiffs on 14th October, 1975 wrote letter to the 2nd Defendants and Ministry of Defence asserting their tenancy rights. It is the contention of the Plaintiffs that they had become statutory tenants of the company since they were in use and occupation of the premises since 1961 and they were regularly paying rent to the said Company. In this letter the Plaintiffs expressed their willingness to vacate the premises if they were given alternative premises. It is the case of the Plaintiffs that without offering any alternative premises or occupation and without any order of Court of competent jurisdiction to vacate, the Defendants on the morning of 28th October, 1976 took forcible 5 possession of the demised premises and after throwing out the Plaintiffs, started demolishing the suit structure. It is the Plaintiffs’ case that the Plaintiffs were not only forcibly driven out of the demised premises, but their belongings such as plants and machineries, articles, goods etc. were dumped in adjoining shed in the said compound. According to the Plaintiffs, on account of this unauthorised unilateral and unconstitutional act of the Defendants, the Plaintiffs have suffered damages due to loss of place of business, permanent extra monthly outgoings on the premises, stoppage of business, destruction of items, decay, breaking-up etc. of the machineries and the like and of transportation and reerection which according to the Plaintiffs works out to almost Rs.19,42,689/-. The break-up of the loss so incurred by the Plaintiffs is detailed in Exh.‘A’ to the Plaint. Nevertheless, the Plaintiffs have restricted their claim for recovery of amount towards damages only in the sum of Rs.15 Lakhs in the present Suit. 3. The Defendant No.2 has filed Written Statement not only raising issue of maintainability of Suit as presented by the Plaintiffs, but also refuted allegations in the Plaint that the Plaintiffs were forcibly dispossessed from the demised premises 6 and the premises were demolished or dismantled without authority of law. According to the Defendants, the Plaintiffs voluntarily and at their free will agreed to vacate the demised premises and handed over quiet and peaceful possession thereof to the 1st Defendant through Defendant No.2(as Manager). It is stated that M/s. Hazari Silk Mills themselves requested the Defendants to render assistance in trying to secure alternative premises from the Government of Maharashtra or the BPT and showed willingness to vacate demised premises. According to the Defendants, however, the Defendants were not obliged to secure alternative premises for the Plaintiffs, but still that assistance was offered to the Plaintiffs. It is the case of the Defendants that on promulgation of the Act of 1973, the demised premises stood transferred to and vested in the Central Government and freed and discharged from any encumbrances affecting the same. By virtue of section 5 of the Act, any person in possession of the undertakings or properties of the company was liable to deliver possession thereof to the Central Government forthwith and failure to do so entail punishment by way of imprisonment and/or fine. In substance, the Defendants assert that no tenancy or any other rights or interest or claim exist in the demised premises, as the same came to an end and or 7 extinguished or ceased to subsist upon promulgation of the Act. For that reason, the Plaintiffs were not entitled for relief of damages at all. It is the Defendants’ case that on or about 28th October, 1976 M/s. Hazari Silk Mills vacated the said premises voluntarily, peacefully and quietly and possession thereof was taken by the Defendants on behalf of the 1st Defendant. 4. To buttress this plea, the Defendants rely on the communication exchanged with the Plaintiffs, which would indicate that Hazari Silk Mills had voluntarily vacated the demised premises and sought assistance of the Government and Defendants for acquisition of alternative accommodation, which assistance was extended to the Plaintiffs though it was not a condition to vacate the demised premises. It is the case of the Defendants that it is only after plaintiffs vacated the premises, the same were dismantled. According to the Defendants, this relevant facts though within the knowledge of the Plaintiffs have not been disclosed in the Plaint, for which reason, the Plaintiffs should be non-suited at the threshold. Besides, the Defendants have adverted to the fact that the Defendants had offered temporary alternative premises to the Plaintiffs, which was occupied by them after vacating the demised premises. 8 However, since the Plaintiffs refused to vacate the said temporary premises, the Defendants had to resort to action by issuance of show-cause notice dated 21st September, 1976 under the provisions of Public Premises Eviction Act. It is only on taking recourse to that action as a counterblast, the Plaintiffs have filed the present Suit on 23rd October, 1979. The Defendants assert that the assumption of the Plaintiffs that the Plaintiffs are protected by virtue of provisions of Bombay Rent Act is misplaced, as the said Act had no application to the demised premises at the relevant time. Besides, the question of resorting to action of eviction under Public Premises Eviction Act did not arise, as the Plaintiffs themselves vacated the same voluntarily and willingly and shifted themselves to temporary alternative premises offered to them in the same compound. 5. On the basis of pleadings filed by the parties, my Predecessor proceeded to frame following issues on 30th March, 1998 namely: "1. Do plaintiffs prove that on 28th October, 1976 defendant No.2’s Manager demolished the suit structure and thereby caused damage to the plaintiffs? 2. Do they prove damages set out in Exhibit A to the plaint? 9 3. Whether defendants prove that suit property has been vested in defendant No.1? 4. Does defendant No.2 prove that plaintiffs voluntarily vacated the premises as contended in their written statement? 5. Are plaintiffs entitled to recover Rs.15 lacs with interest ? if so, at what rate ? 6. What decree or order ?" 6. The Plaintiffs, to make good their stand, chose to examine only one witness namely, Plaintiff No.4 Koovappadi Venkatachala Krishna Swami. In the affidavit dated 16th October, 2003 in lieu of examination in chief, the case made out in the plaint is more or less reiterated. During his evidence, documents produced have been marked as Exh.P-1 to P-20 and Exh. D-21. The Defendants have not examined any witness. ISSUE ISSUE ISSUE NOS.1,2 and 4: NOS.1,2 and 4: NOS.1,2 and 4: 7. Reverting to Issue Nos.1,2 and 4, first question that needs to be addressed is whether the Plaintiffs have proved that on 28th October, 1976 Defendant No.2 Manager forcibly demolished the suit structure. In paragraph-7 of the plaint, it is stated that without instituting any legal proceedings, the Defendants resorted to obtain 10 forcible possession of the said premises. It is further stated that pursuant thereto, Officers, servants and labourers of the Defendants led by one Dara K. Parakh, who were equipped with necessary means of demolishing buildings such as cranes, cutters, welding sets and crowbars, descended, all of a sudden, on the morning of 28th October, 1976 on the Plaintiffs said premises. It is further stated that in the course of the said day and some succeeding days, those persons razed the suit premises to the ground. The Defendants in the Written Statement have not disputed the fact that demolition of the said premises commenced from 28th October, 1976. However, the Defendants have controverted the allegation that they had tried to take forcible possession of the suit premises as alleged or at all. The Defendants denied that they or their officers or servants or labourers of Dara Parakh or any one else took forcible possession of the said demised premises or committed any act with the motive alleged by the Plaintiffs. It is the case of the Defendants that demolition of the premises commenced only after M/s.Hazari Silk Mills/Plaintiffs had vacated the premises voluntarily and allowed the Defendants to come in possession thereof. Second Defendant further asserts that after the premises came in possession, said defendants acted in relation thereto in such a 11 manner as the Defendants found fit and proper under instructions of first defendants. In other words, the case of the Defendants is that the Plaintiffs(Hazari Silk Mills) moved out of the said premises voluntary and willingly and occupied temporary alternative shed offered in the said compound. Thus, it was not a case of forcible dispossession or unilateral action of the Defendants of demolition of the suit structure. 8. Going by the stand taken by the parties, the Plaintiffs’ witness as aforesaid has more or less reiterated the case made out in the plaint. Going by the stand taken by both the sides, it is obvious that the demolition of the suit structure commenced on 28th October, 1976 on instructions of Defendant No.2/Manager. The question is whether it was a case of forcible dispossession and unilateral action taken by the Defendants as asserted by the Plaintiffs, in particular, paragraph-7 of the plaint. Although the Plaintiffs have examined Plaintiff No.4, it is unsafe to rely on his evidence for the reasons which I would presently elaborate. This witness has been cross-examined at length. In the cross-examination he has candidly accepted that the documents on which reliance was placed by the Plaintiffs were not issued under his signature. What is relevant to note is 12 that this witness concedes that the assertions made by him in the examination in chief were not on the basis of his personal knowledge but on the basis of record. Even if this version is to be accepted, none of the communications sent by the Plaintiffs, which have come on record would even remotely suggest that demolition of the said structure/premises was done forcibly and unilaterally on 28th October, 1976. What is pertinent to note is that this witness concedes that he is not able to tell as to what transpired on 28th October, 1976 as he was not looking after the day to day affairs of the partnership firm during that time. This witness has conceded that he was not working with Hazari Silk Mills on 1st November, 1976 and joined as its partner only on 1st July, 1978. In that sense, this witness has no personal knowledge about the events that unfolded on 28th October, 1976 and he was relying on the information made available to him by the son of Mr.Deval, partner of Hazari Silk Mils, who according to the Defendants was instrumental in handing over possession of the said premises and shifting to the temporary alternative premises in the same compound. No person who had personal knowledge of the events that unfolded of 28th October, 1976 has been examined by the Plaintiffs. Plaintiffs witness has stated that one Mr.Desai, Mr.Trivedi and Mr.Deval were 13 partners of Hazari Silk Mills prior to 1978. However, no other person or for that matter partner of Hazari Silk Mills at the relevant time in October, 1976 has been examined by the Plaintiffs. Only those persons could have deposed about events that unfolded on 28th October, 1976. Suffice it to observe that the fact asserted in paragraph-7 of the plaint of forcible dispossession or of unilateral demolition of the building has not been proved by the Plaintiffs by means of any legal evidence. 9. The next question is whether on account of such demolition it caused any loss or damage to the Plaintiffs. Insofar as the claim of damages is concerned, it will be useful to refer to paragraphs-8 and 9 of the plaint to be read alongwith Exh.A to the plaint. The case made out in the plaint about the damages caused due to demolition has been controverted by the Defendants. The Plaintiffs were expected to prove the said fact. The Plaintiffs’ witness has spoken about the same in paragraph-8 of his examination in chief. He has stated that as per his estimate aggregate damages caused to the Plaintiffs as a result of the illegal and unconstitutional act on the part of the Defendants is to the extent of Rs.45 Lakhs by buying the land in M.I.D.C. borrowing funds from M.S.F.C. and by 14 putting up construction thereon as also for the delay caused in starting the factory after two years. In paragraph-9, witness states that at the time of filing of the Suit, the amount came to Rs.19,42,689/-. However, the Plaintiffs have given up that claim and restricted it to only Rs.15 Lakhs. The witness has not given justification of the damages to the extent of Rs.15 Lakhs, as claimed by the Plaintiffs. No other witness has been examined to corroborate the fact that damages as claimed by the Plaintiffs regarding loss of business or stoppage of business and destruction of the items or decay, breaking up etc. of the machinery and the like or for that matter transportation and re-erection cost. In other words, the claim set up in Exh. A of the Plaint has not been proved by the Plaintiffs. Significantly, when the Plaintiffs’ witness was questioned during the cross-examination, he plainly admits that he has no personal knowledge. Specific question was put to this witness as to whether he would be in a position to produce any document to substantiate the claim of damages or any part thereof. Witness has expressed his inability to do so on the ground that all papers were with Mr.Deval. As a matter fact evidence in the examination-in-chief itself is short of substantiating the claim for damages. If it is so, even assuming that the 15 Plaintiffs are justified in alleging that the suit premises were demolished by force and without authority of law, the Plaintiffs have failed to establish the nature of damages and the actual liability of the Defendants to make good the same. 10. Having found that the plaintiffs have failed to prove the fact asserted by them about events unfolded on 28th October, 1976, just because the Defendants have not produced any evidence in support of their case that the Plaintiffs voluntarily vacated the premises as asserted in the Written Statement, the Plaintiffs cannot succeed in the present action. It is for the Plaintiffs in the first place to prove the facts asserted that the demolition of the suit premises was done forcibly and unilaterally on which evidence is lacking. Thus understood, Issues No.1,2 will have to be answered against the Plaintiffs and as a consequence no further finding is required on issue No.4. 11. To complete the record it needs to be noted that the Defendants argued that the present action be thrown out at the threshold on the ground that the Plaintiffs have not disclosed all the relevant and material facts. Reliance was placed on decisions to buttress this submission. However, for the reasons 16 already recorded it is not necessary to burden this Judgment with that aspect. ISSUE ISSUE ISSUE NO.3 NO.3 NO.3 12. That takes me to the issue No.3 as to whether the Defendants prove that the suit property has been vested in the defendant No.1. This issue will have to be answered keeping in mind the provisions of the Act of 1973. On promulgation of that act, by legal fiction all the undertakings and properties of the Defendant No.3 company stood transferred to and vested in the Central Government freed and discharged from any trust, obligations, mortgages, charges, liens and any other encumbrances affecting the same. That position emerges from Section 3 read with section 4 of the Act, 1973, which reads thus. "3.3.3. Undertakings of the company to vest in Undertakings of the company to vest in Undertakings of the company to vest in the the the Central Government.- Central Government.- Central Government.- On and from the appointed day, the undertakings of the company shall by virtue of this Act, be transferred to, and shall vest in, the Central Government." "4.4.4. General effect of vesting.- General effect of vesting.- General effect of vesting.-(1) The undertakings of the company shall be deemed to include all assets, rights, powers, authorities and privileges and all property, movable and immovable, cash balances, reserve funds, investments and all other rights and interests in, or arising out of, such property as were immediately before the appointed day in the ownership, possession, power or control of the company [in relation 17 to the undertakings] whether within or outside India, and all books of account, registers and all other documents of whatever nature relating thereto. [Explanation.-For avoidance of doubt it is hereby declared that the expression ‘undertakings of the company’ does not include- (a) any debts due to the company and (b) any amounts recoverable by the company from its shareholders or directors.] (2) All property included as aforesaid in the undertakings which have vested in the Central Government under section 3 shall, by force of such vesting, be freed and discharged from any trusts, obligations, mortgages, charges, liens and other encumbrances affecting it, and any attachment, injunction or any decree or order of any court restricting the use of such property in any manner shall be deemed to have been withdrawn. (3) If, on the appointed day, any suit, appeal or other proceeding of whatever nature in relation to any business of the undertakings of the company is pending by or against the company, the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertakings of the company or of anything contained in this Act but the suit, appeal or other proceedings may be continued prosecuted and enforced by or against the company." Once the said vesting takes place, section 5 obliges the occupants of the undertakings to deliver possession and documents relating thereto. Section 5 reads thus: 18 "5.Duty "5.Duty "5.Duty to deliver possession of the to deliver possession of the to deliver possession of the undertakings undertakings undertakings and and and documents relating thereto.- documents relating thereto.- documents relating thereto.- (1) Notwithstanding any decree, judgment or order of any court or anything contained in any other law for the time being in force, the Receiver, Official Liquidator of the company or any other person, in whose possession or custody or under whose control the undertakings of the company or any part thereof may be, shall deliver possession of the undertakings of the company or such part thereof as may be in his possession, custody or control to the Central Government forthwith. (2) The Receiver, Official Liquidator or any other person who has, on the appointed day, in his possession or under his custody or control any books, documents or other papers relating to the undertakings of the company which have vested, under section 3, in the Central Government, shall be liable to account for the said books, documents or other papers to the Central Government or to such person as the Central Government may specify in this behalf. (3) The Central Government may take, or cause to be taken, all necessary steps for securing possession of the undertakings which have vested in it under section 3." Suffice it to observe that the issue no.3 will have to be answered in favour of the Defendants. ISSUE ISSUE ISSUE NO.5: NO.5: NO.5: 13. That takes me to issue No.5 as to whether the Plaintiffs were entitled to recover Rs.15 Lakhs with interest as claimed. In the earlier part of this discussion, I have found that the