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Electric Construction & Equipment Company Ltd. v/s Raj Luxmi Investment & Trading Company Ltd.

    C.O. No. 4283 of 2016

    Decided On, 21 December 2016

    At, High Court of Judicature at Calcutta


    For the Petitioner: Shaktinath Mukherjee, Senior Advocate, Arpita Saha, Shounak Mitra, Advocates. For the Opposite Party: S.P. Roychowdhury, Probal Kr. Mukherjee, Senior Advocates, S.N. Dutta, Bhaskar Mukherjee, Debjani Ghosh, Advocates.

Judgment Text

Harish Tandon, J.

1. The first appellate Court while allowing an application filed by the plaintiffs/petitioners for withdrawal of the first appeal simultaneously directed the compliance of the interlocutory order passed therein which is challenged in this revisional application.

2. Shorn of unnecessary details, a suit for recovery of possession was filed by the plaintiff/opposite party against the petitioner on expiration of lease by efflux of time. The said Title Suit No. 12 of 1997 was decreed on contest and the petitioner was given 2 months time to vacate. The said judgment and decree was carried to appellate Court in Title Appeal No. 56 of 2010 and an application under Order 41, Rule 5 of the Code of Civil Procedure was moved for stay of the execution proceeding and unconditional order of stay was passed by the Appellate Court on 23rd November, 2010. The plaintiff/opposite party challenged the said order in C.O. 3565 of 2012 which came up before this Court on 4th December, 2012 wherein an order was passed directing the petitioner to deposit the monthly occupation charges at the rate of Rs. 20 lakhs with effect from November 2012 till the disposal of the application for stay.

3. A special writ petition was filed before the Supreme Court which was dismissed as the said order is interim in nature. The fact remains that the Supreme Court refused to interfere with the said order and the petitioner was directed to contest the application for stay before the First Appellate Court. The said application was disposed of by the Appellate Court determining the quantum of occupational charges at Rs. 19 lakhs per month as condition precedent. The said order was further challenged in C.O. No. 2306 of 2013 before this Court. It appears that an execution case was levied by the plaintiff/opposite party and an application was moved to proceed with the same as the condition imposed for securing the order of stay was not complied with. By order dated 9th July, 2013, the Executing Court held that there is no impediment in proceeding with the execution case as the condition for stay has not been complied with by the petitioner. The said order was further challenged before this Court in C.O. 2306 of 2013 which was disposed of on 1st August, 2014 granting unconditional stay of the execution case till August 03, 2014 provided the petitioner deposits a sum of Rs. 5 lakhs by that time. It is undisputed that the petitioner deposited a sum of Rs. 5 lakhs and further decided not to press the earlier revisional application being C.O. No. 2306 of 2013. Subsequently it was brought to the notice of the Court that the petitioners surrendered the possession to the plaintiff/opposite party on 12th August, 2014 and subsequently filed an application for withdrawal of the appeal. Immediately thereafter the plaintiff/opposite party filed an application in the said appeal claiming an occupational charges fixed at the time of granting the stay of the execution proceeding.

4. By the impugned order, the Court not only allowed the petitioner to withdraw the suit but simultaneously passed an order directing the deposit of the occupational charges in terms of the interlocutory order passed in the said appeal.

5. Mr. Shaktinath Mukherjee, the learned Senior Advocate appearing for the petitioner submits that once the appellant decided not to proceed with the appeal and prays for withdrawal thereof without any further order in the form of liberty to file afresh for the self-same reliefs, the Appellate Court went wrong in passing order for depositing of the occupational charges. According to him, if the appeal is allowed to be withdrawn, the Appellate Court has no jurisdiction to secure the implementation of the interlocutory order passed on an application for stay. In other words, he wanted to contend that it loses jurisdiction to implement the order after permitting the appellant to withdraw the appeal.

6. Per contra, Mr. S.P. Roy Chowdhury, the learned Senior Advocate appearing for the plaintiff/opposite party submits that the Court can impose conditions at the time of permitting the withdrawal of the proceeding under Order 23, Rule 1 of the Code as held by the Supreme Court in case of K.S. Bhoopathy & ors. v. Kokila & Ors; reported in (2000) 5 SCC 458. He further submits that once the right has accrued in favour of the other side unconditional withdrawal of an appeal would virtually take away such right and placed reliance upon a judgment of the Supreme Court in case of R. Ramamurthi Iyer Raja v. Rajeswara Rao reported in (1972) 2 SCC 721. He thus submits that there is no illegality and/or infirmity in the order passed by the Appellate Court and the revisional application is liable to be dismissed.

7. Upon hearing the respective submissions, the point which hinges for consideration is whether the Appellate Court may pass an order to secure the compliance of the conditions put forth at the time of passing the order of stay of an execution proceeding under Order 41, Rule 5 of the Code while granting permission to withdraw the appeal.

8. Before proceeding to deal with the aforesaid point, it would be relevant and profitable to quote the provisions contained under Order 41, Rule 5 of the Code which runs thus:

"R.5. Stay by Appellate Court.- (1) An appeal shall not operate as a stay of proceedings under a decree or order appealed from except so far as the Appellate Court may order, nor shall execution of a decree be stayed by reason only of an appeal having been preferred from the decree; but the Appellate Court may for sufficient cause order stay of execution of such decree.

Stay by Court which passed the decree.- (2) Where an application is made for stay of execution of an appealable decree before the expiration of the time allowed for appealing therefrom, the Court which passed the decree may on sufficient cause being shown order the execution to be stayed.

(3) No order for stay of execution shall be made under sub-rule (1) or sub-rule (2) unless the Court making it is satisfied-

(a) that substantial loss may result to the party applying for stay of execution unless the order is made;

(b) that the application has been made without unreasonable delay; and

(c) that security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him.

(4) Subject to the provision of sub-rule (3), the Court may make an ex parte order for stay of execution pending the hearing of the application.

(5) Notwithstanding anything contained in the foregoing sub-rules, where he appellant fails to make the deposit or furnish the security specified in sub-rule (3) of rule 1, the Court shall not make an order staying the execution of the decree."

9. It is apparent from the meaningful reading of the said provision that the Appellate Court may stay the execution of a decree only upon recording the sufficient reasons. It further appears therefrom that mere filing an appeal shall not operate as stay of the proceeding under a decree or order appeal from, as a matter of right though the appeal is a statutory right but the order of stay can only be granted by the Appellate Court on sufficient grounds.

10. One of the sufficient grounds for stay of the execution in an appeal against the decree for eviction is dispossession during the pendency of an appeal. Since the said provision specifically provides that mere filing an appeal shall not operate as stay of the execution proceeding, the appellate Court may impose conditions either in the form of security or otherwise. The Supreme Court in case of Atmaram Properties Pvt. Ltd v. Federal Motors (P) Ltd. reported in (2005) 1 SCC 705 categorically laid down that an equilibrium is to be maintained so far as the rights of the parties are concerned at the time of granting the order for stay of the execution proceeding in relation to the decree of such nature. It is further held that there is no fetter on the part of the Appellate Court in imposing conditions in the form of deposit of the occupational charges at the prevalent market rate.

11. It is, therefore, apparent from the language employed under Order 41, Rule 5 of the Code and the ratio laid down in the above noted decision that the order passed therein is restricted to stay of the execution proceeding and neither creates any right in favour of the decree holder to such amount nor it takes away the right of the appellant in maintaining the said appeal. The Apex Court in the said decision was conscious of such proposition of law which would discern from the penultimate paragraph of the said judgment where the decree holder was not permitted to withdraw the said amount in excess of the contractual rent.

12. The said order has no bearing on the merit of the appeal nor the observation has any impact on the merit thereof. It is only to strike the balance of the rights of the parties that in the event, the appeal succeeds the possession of a judgment-debtor should be sufficiently protected. The conditions imposed in an order is not executable in the sense that the default of its compliance attracts vacation of order of stay. In this regard, once the Court imposed the conditions for stay of the execution proceeding, the non-compliance would automatically vacate the said order and it would be open to the decree-holder to proceed with the execution proceeding irrespective of the fact that an appeal against the decree is pending before the Appellate Court. I do not see any other proposition of law which can be attributed to it and, therefore, the Appellate Court can not pass an order implementing the said condition imposed at the time of granting stay of the execution proceeding.

13. The judgment of the Supreme Court in case of K.S. Bhoopathy (Supra), as relied upon by Mr. Roy Chowdhury, is not pointer to an issue involved in the instant revisional application. In the said report, an application for withdrawal of the suit was filed before the Appellate Court after the adjudication having made by the trial Court. A suit for injunction against the defendant no. 1 and 2 from establishing and running the flour mill in the property of the plaintiff and restraining the defendants from disturbing the plaintiff exclusive user of the pathway land in between the property and plaintiff and the aforesaid defendant, was decreed holding inter alia that the plaintiff have an exclusive right of user on a pathway and the defendants were restrained from establishing a flour mill on their property. The Appellate Court modified the decree relating to the pathway holding that the plaintiffs therein have no exclusive right of user and it is all along intended to be used as a common pathway. Though second appeal was filed before the High Court but before the same was admitted, an application was filed by the plaintiff/appellant seeking leave to withdraw a suit with a permission to file afresh.

14. In the perspective of the aforesaid fact, the Apex Court held that withdrawal of the suit at the first or second appealate stage would result in wastage of precious time of the Court and would give blessings to unsuccessful plaintiff to avoid a decree or decrees passed against him and would further result in fresh adjudication of a controversy on a clean slate. The Apex Court noticed the distinction between an abandonment in the form of simpliciter withdrawal and the withdrawal coupled with the leave to institute a fresh suit in these words:

" Grant of permission for withdrawal of a suit with leave to file a fresh suit may also result in annulment of a right vested in the defendant or even a third party. The appellate/second appellate court should apply its mind to the case with a view to ensure strict compliance with the conditions prescribed in Order 23, Rule 1 (3) CPC for exercise of the discretionary power in permitting the withdrawal of the suit with leave to file a fresh suit on the same cause of action. Yet another reason in support of this view is that withdrawal of a suit at the appellate/second appellate stage results in wastage of public time of courts which is of considerable importance in the present time in view of large accumulation of cases in lower courts and inordinate delay in disposal of the cases."

In case of R. Ramamurthi (supra), the Apex Court held that the Court should not permit the plaintiff to withdraw the suit if the right is vested in law to the defendant by virtue of such initiation or by the conduct of the plaintiff therein. In the said report, a suit for partition was filed by the plaintiff therein and it was brought to the notice of the Court that because of the peculiar circumstances, the property is in capable of division and an application was made to sale the same by public auction. One of the co-sharers applied under Section 3 of the Partition Act to buy the share of the plaintiff. The plaintiff later on wanted to withdraw the suit and the matter ultimately reached the Supreme Court. The Apex Court held:

"It has further been emphasized that in a partition suit the plaintiff is not wholly dominuslitis and even on the assumption that Section 3 confers a privilege or an option on the shareholder who is a defendant in a suit for partition the plaintiff is debarred from defeating the exercise of that privilege or option by resorting to the device of withdrawing a suit under Order 23, Rule 1 ."

15. The cumulative effect of the aforesaid decisions clearly indicates that a distinction is to be drawn between a simpliciter withdrawal and the withdrawal coupled with the leave to file a fresh suit. It is further a trite law that if a right has vested upon the defendants under the law, such right cannot be defeated or taken away at the behest of the plaintiff by permitting him to withdraw the suit. The other aspect which this Court feels relevant is that if any advantages is derived from an interim order and to avoid any adverse order to be passed against the plaintiff where the defendants have prima facie material surfaced before the Court, the Court may impose conditions not only by imposing costs but also bringing the possession as it stood before the institution of the suit.

16. In the instant case, the petitioner suffered a decree for eviction and assailed the same before the appellate Court. He successfully dragged the proceeding at the stage of Order 41, Rule 5 of the Code and the moment, it was realised that the conditions imposed by the appellate Court cannot be complied with, a permission is sought to withdraw the said appeal. The appellant being a dominous litis may abandon the appeal and exposed itself to be evicted in terms of the decree passed by the trial court. This is certainly not a case where after an adjudication of the rights of the parties, the plaintiff wanted to withdraw the suit and bring the situation back as on the date of the institution thereof nullifying all such adjudication and wanted to start afresh as if the rights of the parties have not been determined. It would amount to erasing all the findings of the trial court and a blessings would be bestowed to start with the clean slate

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. The appellant have chosen to withdraw the appeal. The resultant effect would be that the decree passed against him shall remain binding and the consequences would follow therefrom. However, this Court cannot overlook that the plaintiff/opposite party has unnecessarily dragged the proceeding and compelled the other side to incur expenditure to defend the same. Equally the precious time of the Court in adjudicating the application for stay would go vested and, therefore, the petitioner cannot be allowed to walk freely as in his wisdom, a decision has been taken to withdraw the same. 17. In view of the observations recorded here in above, though this court finds that the order of the trial court in passing a direction for compliance of an order of stay is beyond its competence and jurisdiction, the moment, the withdrawal has been permitted, yet this Court feels that the Court is not denuded a power to impose costs to compensate the plaintiff/opposite party. 18. This Court, therefore, modifies the impugned order to the extent that the order by which the Court directed the petitioner to fulfil the conditions imposed at the time of granting the order of stay of the execution proceeding is hereby set aside. 19. The remaining portion of the order is un-interfered with subject to the payment of costs assessed at Rs. 5 lakhs. Since the said amount has been deposited by the petitioner in terms of he order of this Court in the executing court, the plaintiff/opposite party is permitted to withdraw the same without furnishing any security therefrom. The revisional application is thus disposed of. However, there shall be no order as to costs.