w w w . L a w y e r S e r v i c e s . i n



Shiva Jute Mills Pvt. Ltd. v/s Pearl Studios Pvt. Ltd. & Another


Company & Directors' Information:- PEARL STUDIOS PRIVATE LIMITED [Active] CIN = U74900DL2009PTC190348

Company & Directors' Information:- SHIVA MILLS LIMITED [Active] CIN = L17111TZ2015PLC022007

Company & Directors' Information:- SHIVA MILLS LIMITED [Active] CIN = U17111TZ2015PLC022007

Company & Directors' Information:- SHIVA CORPORATION (INDIA) LIMITED [Active] CIN = U15532RJ1998PLC015036

Company & Directors' Information:- SHIVA MILLS LIMITED [Active] CIN = U17111TZ2011PLC016848

Company & Directors' Information:- THE JUTE CORPORATION OF INDIA LIMITED [Active] CIN = U17232WB1971GOI027958

Company & Directors' Information:- S M JUTE PRIVATE LIMITED [Active] CIN = U17232WB2005PTC102039

Company & Directors' Information:- B STUDIOS PRIVATE LIMITED [Strike Off] CIN = U92190TN2008PTC069343

Company & Directors' Information:- G S JUTE PRIVATE LIMITED [Active] CIN = U17119WB1997PTC082830

Company & Directors' Information:- PEARL LIMITED [Strike Off] CIN = U74899DL1985PLC035536

Company & Directors' Information:- R L JUTE MILLS PRIVATE LIMITED [Active] CIN = U17120WB2010PTC145200

Company & Directors' Information:- SHIVA JUTE MILLS PRIVATE LIMITED [Active] CIN = U17119WB2010PTC154235

Company & Directors' Information:- PEARL CO PVT LTD [Active] CIN = U65999WB1929PTC006333

Company & Directors' Information:- PEARL INDIA PRIVATE LIMITED [Strike Off] CIN = U17212DL1998PTC097356

Company & Directors' Information:- B & B STUDIOS PRIVATE LIMITED [Strike Off] CIN = U74900WB2011PTC159234

Company & Directors' Information:- B K STUDIOS PRIVATE LIMITED [Active] CIN = U74900TN2016PTC103836

Company & Directors' Information:- M K B JUTE PVT LTD [Strike Off] CIN = U17232WB2006PTC109492

Company & Directors' Information:- M R T STUDIOS PRIVATE LIMITED [Active] CIN = U74900KA2013PTC070105

Company & Directors' Information:- E M V E STUDIOS PRIVATE LIMITED [Active] CIN = U74120TG2015PTC101995

Company & Directors' Information:- Q STUDIO'S PRIVATE LIMITED [Strike Off] CIN = U72200TN2009PTC074028

Company & Directors' Information:- D A STUDIOS PRIVATE LIMITED [Active] CIN = U74210TG2011PTC073602

Company & Directors' Information:- E. D. STUDIOS PRIVATE LIMITED [Under Process of Striking Off] CIN = U72300UP2014PTC065161

Company & Directors' Information:- N R K JUTE MILLS PRIVATE LIMITED [Strike Off] CIN = U17232AP2003PTC040612

Company & Directors' Information:- SHIVA AND CO PVT LTD [Strike Off] CIN = U51909KL1934PTC001030

Company & Directors' Information:- PEARL MILLS LIMITED [Dissolved] CIN = U99999MH1912PTC000349

    C.O. No. 541 of 2019

    Decided On, 31 July 2019

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE SABYASACHI BHATTACHARYYA

    For the petitioner: Kumarjit Banerjee, Sanchari Chakraborty, Siksha Agarwal, Advocates. For the Opposite Parties: Kuldip Mallik, A.K. Upadhyay, S.E. Huda, R.K. Khanna, Advocates.



Judgment Text

1. The brief facts of the case are as follows:

2. On July 30, 2009, the opposite party no.2 Infinity Infotech Parks Ltd., a lessee in respect of the suit premises, entered into an agreement of sub-lease with opposite party no. 1, Pearl Studios Pvt. Ltd.

3. Subsequently, the opposite party no. 1 inducted one Mahuaa Media Private Limited as a further sub-lessee.

4. By a tripartite agreement dated October 5, 2013, between the said Mahuaa Media, the opposite party no. 1 and the petitioner, Mahuaa assigned its sub-lease under Pearl Studios to the present petitioner, namely, Shiva Jute Mills Pvt. Ltd.

5. Both the said agreements contained various provisions regarding the payments to be made by the respective sub-lessees. Subsequently, upon a dispute having arisen as to the outstanding payments, the matter was referred to an arbitrator in the month of July, 2014, between the opposite parties, without impleading the petitioner.

6. In the year 2016, the petitioner filed a suit for specific performance of the agreement dated October 5, 2013 and consequential reliefs. Upon an injunction application being moved in the said suit, the trial court passed an ex parte ad interim order directing both parties to maintain status quo as regards possession, nature and character of the suit property as on that date. Such status quo was extended from time to time.

7. In the year 2017, the petitioner filed an application for being added as a party to the arbitral proceeding, which was rejected in December, 2018.

8. Meanwhile, in the month of September, 2018, the petitioner alleged that the opposite parties disconnected the petitioner's electric connection to the B schedule property of the plaint and made an application for restoration of such electric connection, alternatively a direction upon the WBSEDCL to give electric connection in the B schedule property in the name of the plaintiff. Vide order dated January 10, 2019, the said restoration application was dismissed on contest, against which the present application under Article 227 of the Constitution of India has been preferred.

9. Learned counsel for the petitioner argues that although the objection as to the agreement dated October 5, 2013 being insufficiently stamped and unregistered was raised by the opposite parties in the court below, the trial court left the said question open to be decided at the time of trial since the petition-in-question was for restoration of electricity and not connected with the issue of impoundment. However, for abundant caution, learned counsel argues on the said question as well. It is submitted that since the first limb of the proviso to Section 49 of the Registration Act exempts registration of a contract in suits for specific performance, for the purpose of being admissible in evidence, there was no bar for the court below to act on the unregistered agreement. In this context, learned counsel cites two decisions, reported respectively at (2010) 5 SCC 401 [S. Kaladevi vs. V.R. Somasundaram and others] and at (2018) 7 SCC 639 [Ameer Minhaj vs. Dierdre Elizabeth (Wright) Issar and others].

10. As far as Section 35 of the Stamp Act is concerned, it is argued that there was no bar in passing an injunction order or granting restoration of electricity even on an insufficiently stamped document, although the question of impoundment would arise once the document is tendered in evidence at the peremptory hearing stage.

11. In support of such proposition, learned counsel cites a division bench judgment reported at (2009) 4 CHN 415 [GTZ (India Private Limited) vs. Power Electronic Engineers & Ors.] as well as another division bench judgment reported at (2010) 4 CHN (Cal) 18 [Gopal Kumar Bhalotia & Anr. vs. Anirudh Trade and Agencies Pvt. Ltd. & Anr.]. In both the said judgments, it was held that failure to stamp a document properly does not affect the validity of the transaction embodied in the document. It was further held that injunction cannot be refused simply because the agreement was executed on insufficiently stamped paper. The trial Judge, at the injunction stage, could demand sufficient amount of security to safeguard the interest of the State revenue.

12. It is next argued that the status quo order passed by the trial court was blatantly violated by the opposite parties, in particular by opposite party no. 2 and therefore, restoration of electric connection was a matter of right for the petitioner. Such prayer could not be refused on the ground of insufficiency of stamp, as rightly held by the trial court, which could be relevant at the time of hearing of the suit. It is pointed out from paragraph no. 11 of the affidavit-in-opposition to the restoration application, filed by the opposite party no. 2, that disconnection of electricity was admitted by the opposite party no. 2 and as such, the court ought to have been strict in seeing to it that its order was duly complied with and honoured.

13. In any event, it is argued, the trial court could not direct payment of the entire amount alleged to be due but could at best restrict payment to the charges due from the electric meter-in-question as per usage of the sub-lessee, being the petitioner. The petitioner relies on clause V of the agreement between the opposite parties dated July 30, 2009 and clause 10.1(b) of the assignment agreement dated October 5, 2013, by virtue of which the petitioner claims its rights, in this regard.

14. It is further argued that in view of pendency of the arbitral proceeding to ascertain the actual outstanding dues, no direction for payment could be made at this juncture by the court.

15. Learned counsel for the petitioner argues further that the scope of interference under Articles 226 and 227 of the Constitution is to be used sparingly, in case of grave injustice or failure of justice. Mere errors of fact or law cannot be grounds for such interference unless such error is manifest and apparent on the face of the proceedings, such as when based on clear ignorance or utter disregard of provisions of law and in case of grave injustice or gross failure of justice being occasioned.

16. Learned counsel for the opposite party no. 2 contends that status quo was granted on the basis of the agreement of assignment dated October 5, 2013, which was insufficiently stamped and unregistered. The said document had not been relied on by the petitioner for a mere collateral purpose but was the basis of the suit for specific performance and the connected prayer for injunction. As such, the said agreement had to be impounded before the trial court could rely on the same, either in granting status quo or in directing restoration of electricity connection. It is argued that, since the initial ad interim order of status quo was passed ex parte behind the back of the opposite parties, there was no scope for the opposite parties to take such objection at that juncture and as such the court ought to have permitted the opposite parties to raise the said question at the time of deciding the application for restoration of electric connection, being practically the first opportunity for the opposite parties for raising such objection.

17. Learned counsel cites the judgment reported at (2011) 14 SCC 66 [SMS Tea Estates Private Limited vs. Chandmari Tea Company Private Limited], for the proposition that if a document is not duly stamped, Section 35 of the Stamp Act debars it from being acted upon, unless the same is first impounded. Such principle was applicable even if the arbitration clause was incorporated in an agreement which itself was insufficiently stamped.

18. Regarding the liability of the petitioner to make payments, it is submitted that such liabilities were comprised of dues as contemplated in the parent agreement as well as the assignment agreement. Such liabilities were clearly specified in the written objection of the opposite party no.2 to the restoration application and amounted to Rs.3,11,06,607/-approximately. Learned counsel relied in this respect on clauses VI and IX of the parent agreement dated July 30, 2009, which concerned the covenants of the sub-lessee with the sub-lessor. Placing the said clauses, learned counsel submits that the sub-lessee was to pay the charges for air-conditioning facilities, electricity charges for electricity consumed and also for running AHU at actual rate as per the sub-meter installed for the said sub-demised space, demand charges of the WBSEDCL, as well as dues of the sub-lessor, the latter finding place in clause XIII.

19. Further placing clause III of the sub-lessor's covenants with the sub-lessee, it is argued that in the event of default by the sub-lessee to make such payments and failure to remedy such default within sixty days from notice in writing to that effect, the sub-lessor was entitled to determine the sub-lease and to enter upon and take possession of the sub-demised space, without prejudice to other rights of the sub-lessor to suspend and terminate all services, including disconnection of electricity supply and recovery of damages.

20. Placing clause III of the covenants between the sub-lessor and sub-lessee with each other, it is submitted that if there was a default by the sub-lessee, the sub-lessor would also be entitled to obstruct or prevent the sub-lessee from using and/or carrying on business from the sub-demised space.

21. Next placing clause 10.1(b) of the assignment agreement dated October 5, 2013 relating to transfer of leasehold rights of the opposite party no. 1, it was submitted that the transferee therein (the present petitioner) would undertake payment of entire outstanding monthly lease rent, monthly maintenance and service charges, electricity charges, air-conditioning charges, water charges and various other costs and charges whatsoever as be settled and found payable to the sub-lessor Infinity (opposite party no.2).

22. Clause 11.1 provided that the transferee (petitioner) agreed to pay the said various outstanding dues along with settled amounts of premium respectively to Mahuaa and Pearl as per clauses 9 and 10 of the said agreement, as condition of transfer/assignment in favour of the petitioner.

23. As such, it is argued that in view of the huge liabilities already accrued in favour of the opposite party no. 2, the petitioner was not entitled to electricity at all and the trial court was justified in refusing restoration of electric connection.

24. Learned counsel for the opposite party no. 2 next argues that the agreement dated October 5, 2013 was not binding on the opposite party no. 2, who was the superior landlord, since the opposite party no. 2 was not a party to the said agreement.

25. Learned counsel next argues that the petitioner suppressed material facts in the application for restoration of electric connection, including the fact that the petitioner had applied for addition of party to the arbitral proceedings relating to the dues, which application was rejected by the tribunal on December 3, 2018 primarily on the ground of non-impoundment of the agreement dated October 5, 2013. As such, the petitioner cannot now bypass such order and rely on the agreement all the same before the trial court. Moreover, the petitioner ought not to have been permitted to take the plea of pendency of the arbitral proceedings relating to the dues, in view of its application for addition thereto having been rejected.

26. It is next argued on behalf of the opposite party no. 2 that there is nothing on record to show that the petitioner was ever in possession and enjoyment of electricity in respect of the suit property. No electric bill has been produced in support of the contention of the petitioner that it was enjoying such electricity at the suit premises.

27. Learned counsel next argues that the status quo order, which was the premise for the prayer of reconnection, did not record any status of the parties, in particular vis--vis the possession and/or alleged enjoyment of electricity by the petitioner. As such, no application for restoration of electricity could be made on the strength of such order. That apart, no complaint of disconnection was ever lodged before any authority/forum by the petitioner before filing the restoration application, thereby belying the allegation of enjoyment of electricity and subsequent disconnection.

28. Learned counsel relies on a judgment reported at AIR 1972 AP 373 [Sanjeeva Reddy vs. Johanputra Reddy], for the proposition that no part of an unstamped/insufficiently stamped document can be admitted in evidence without the same being impounded, as per Section 35 of the Stamp Act.

29. By placing reliance on (2009) 2 SCC 532 [Avinash Kumar Chauhan vs. Vijay Krishna Mishra], it is argued that there has to be impoundment under Section 35 of the Stamp Act even if the document sought to be admitted in evidence was for collateral purposes.

30. Learned counsel for the opposite party no. 1 adopts the arguments of the opposite party no. 2 on principle, particularly as regards the necessity of impounding the document-in-question.

31. Placing several provisions of the agreement dated October 5, 2013, learned counsel for the opposite party no. 1 argues that the outstanding dues as per the said agreement were not paid by the petitioner, thereby curbing the right of the petitioner to seek restoration or fresh connection of electricity to the suit premises.

32. Upon considering the submissions of both sides, it is evident from paragraph no. 11 of the affidavit-in-opposition filed by the opposite party no. 2 to the application for restoration of electricity in the court below, that the opposite party no. 2 admitted that it was constrained to disconnect electric connection to the suit premises in view of the non-payment of electricity dues amounting allegedly to Rs.3,11,06,607/-as on September 30, 2018 by the opposite party no. 1, with whom the opposite party no. 2 had entered into lease agreement. It was further admitted in the said paragraph that the opposite party no. 1 was in possession of the suit property and had been enjoying the same without payment of electricity dues, thereby compelling the opposite party no. 2 to disconnect the electric connection.

33. In view of such specific admission, the subsequent paragraphs where a question was raised as to whether the petitioner was ever in possession of the suit property, appears to be a ruse and a camouflage. Since the agreement dated October 5, 2013 was entered into between the sub-lessee of the opposite party no. 2 and the petitioner, along with an assignor Mahuaa, the opposite party no. 2 could not acquire any right to disconnect the electric supply by feigning ignorance of the said agreement.

34. The terms of the status quo order dated May 4, 2016 make it abundantly clear that the allegation of prior possession and enjoyment of the suit property was discussed and only after going through the plaint, the application and the original documents available on record, the trial court came to the opinion that the plaintiff/petitioner was able to establish a good prima facie case in its favour. The trial court also considered the urgency of the matter and granted ex parte ad interim order of injunction in the form of status quo, by directing both sides to maintain status quo as regards possession, nature and character of the suit property.

35. Disconnection of electricity on a subsequent date, despite such order protecting the possession and the character of the suit property, was blatantly against the spirit of the said order. Whatever might have been the exact physical status of the property on that date, the status quo order was passed taking into consideration and accepting the allegation of possession and enjoyment of the property by the petitioner. As such, the opposite parties cannot now challenge such position on the ground that the order of status quo did not specifically stipulate the status of the property. Whatever might have been the status, the subsequent act of disconnection of electricity violated the possessory right of the petitioner and the nature of the suit property as on the date of passing of the status quo order and there was no vagueness in the order as far as the acceptance of the plaint case was concerned. Thus, such argument of vagueness in the order cannot stand judicial scrutiny.

36. Arguments as regards necessity of impoundment of the agreement dated October 5, 2013 would be valid at the hearing of the suit and/or even at the final hearing of the injunction application or in any appeal which might be preferred against the ex parte ad interim order. However, once an order of status quo was subsisting and in force, the same could not be violated on legal pleas going to the root of the status quo order. Good, bad indifferent, such order, having attained finality, had to be complied with by the opposite parties and any violation of the same could not be defended on the merits of the status quo order.

37. This revision could probably have been decided on the aforementioned observations. However, since certain questions have been raised on the reliability of the agreement-in-question, those are also dealt with herein.

38. As far as the question of pendency of the arbitration in respect of the dues outstanding is concerned, the same is a valid ground for opposing the present direction to deposit any amount, particularly at the stage of restoration of electric supply.

39. The petitioner attempted to add itself as a party to the arbitral proceeding but obviously could not do so. Although the arbitrator held that insufficiency of stamp was a ground for such rejection, the same is not binding on the civil court while adjudicating an application for restoration of electric supply, having not been considered at the time of passing of the status quo order. It is obviously open to the opposite parties, as discussed above, to raise the objection as to insufficiency of stamp at any further stage of the application or any challenge to an order of temporary injunction or ad interim injunction for that matter. Yet the said ground is irrelevant, as rightly held by the trial court, for deciding an application for restoration of electric connection. Since the opposite party no. 2 admittedly violated the status order by disconnecting electric supply to the suit premises, the trial court was duty-bound to enforce its own order by directing immediate restoration of electricity supply to the suit premises. The clauses as regards payments to be made by the petitioner are the subject-matter of the arbitral proceedings between the opposite parties and might be finally decided therein.

40. Although such pendency could not ipso facto be a bar to the trial court imposing some condition of payment by the petitioner while passing an order of injunction, both in lieu of outstanding dues and as security to safeguard the interest of the State exchequer. Even the decisions cited on Section 35 of the Stamp Act by the petitioner contemplated such security amount, such a consideration could not ipso facto be a valid yardstick while deciding an application for restoration of electric supply, the disconnection of which was in violation of a status quo order of the trial court.

41. The argument, that the petitioner was never in possession/enjoyment of the suit property, cannot hold good since the agreement dated October 5, 2013, relied on by the trial court while passing the ad interim status quo order, evidences such enjoyment of possession and electricity by the petitioner. In the absence of any rebuttal to such prima facie evidence even at a subsequent stage, the court ought to have held in

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favour of the petitioner being in possession and enjoyment of electricity at the relevant juncture. Mere absence of any complaint of disconnection prior to the application for restoration of electricity being filed, before any other authority/forum, could not be a deterrent for the court to direct restoration of electricity supply to ensure the primacy and sanctity of its own order of status quo. The opposite party no. 2 could not take shelter of such legal nitty-gritties to obstruct the process of law and obfuscate the court as regards the facts of the case. Whatever might be the legal arguments advanced by the opposite parties, those become academic as far as the restoration application is concerned, in view of a palpable violation of the status quo order of the trial court by the opposite party no. 2 in admittedly disconnecting the electricity to the suit premises. 42. Thus, although the opposite parties would be free to argue and oppose the injunction application and the suit at all subsequent stages of the proceeding on all the questions raised in the present revisional application, the opposite party no. 2 has to restore electric supply to the suit premises immediately, before contesting the suit further. 43. Accordingly, C.O. No. 541 of 2019 is allowed, thereby setting aside the impugned order and directing the opposite party no. 2 to restore electric supply to the property comprised in schedule B of the plaint of Title Suit No. 448 of 2016, pending before the Civil Judge (Senior Division), Second Court at Barasat within one week from this date, failing which the petitioner will be entitled to take appropriate steps for implementation of the order of this court by police help in the court below. 44. However, it is made clear that the opposite parties will be entitled to raise all legal questions on the merits of the status quo order and the suit, as raised in the present revisional application, at all subsequent stages of the proceeding in the court below. 45. There will be no order as to costs. 46. Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.
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