Rajesh Kumar Pandey & Anr vs Shankar Seal & Anr

The Court : This appeal is directed against an order dated 19th July, 2016 passed in an application filed by the plaintiffs for judgment on admission on the basis of an agreement dated February 23, 2015 and the letter issued by the first defendant on June 23, 2015. The plaintiffs are the son and widow of one Tapan Kumar Seal, deceased. The plaintiffs claim that the first plaintiff and his father held 17% interest each in an unregistered partnership firm by the name of Narasingha Paper House with two other relatives of the father holding 1/3rd each in the firm. According to the plaintiffs, following the death of their predecessor-in-interest and the huge debts faced by the firm, the plaintiffs wanted to come out of the firm. The agreement of February 23, 2015 recorded that there were ongoing disputes between the partners of the firm. Clause 2 of such agreement provided as follows:

"2. Mr. Rajesh Kumar Pandey and Ritesh Pandey, son of Sri Amar Nath Pandey are sympathetic to the cause of Shankar Seal, for which he has initiated the above mentioned legal proceeding. Out of that sympathy, Mr. Rajesh Kumar Pandey and Ritesh Pandey have agreed to pay part of his legal expenditure. Once the dispute is settled out of Court, Shankar Seal will withdraw the above mentioned Section 9 and Section 11 litigations. In return of the favour by Mr. Rajesh Pandey and Ritesh Pandey to meet his legal expenses, Shankar Seal has agreed to transfer the above mentioned share in the partnership firm Narasingha Paper House for a payment of Rs.25 lacs only, after the legal dispute is settled."

The plaintiffs claim that a cheque for Rs.25 lakh was prepared and duly made over by the defendants to the plaintiffs in terms of the second clause of the agreement of February 23, 2015. However, according to the plaintiffs, prior to the date of maturity of the post-dated cheque issued to the plaintiffs, the first defendant called upon the plaintiffs to not present the cheque for encashment. The exact words of the letter dated June 23, 2015 addressed by the first defendant to the plaintiffs should be seen:

"This has reference to our preceding communications with regards to the mentioned subject and our sincere commitment regarding payment vide one post dated Cheque issued in your favour by me amounting to Rs.25,00,000/-(Twenty Five Lakhs) Drawn on Canara Bank Bhowanipore Branch dated 1.07.15.

I hereby request you not to present the said post dated cheque for encashment to the bank as due to my financial contingency I am unable to make the said payment as of now.

I further request your good self to hold back the said cheque and do not present the said cheque before the bank till further notice.

Hope you will appreciate to understand my problem and act accordingly."

The plaintiffs claim that in view of the said agreement and the categorical admission of the defendants' liability as evident from the letter of June 23, 2015, the plaintiffs are entitled to a decree on such admission."

In the affidavit-in-opposition the defendants categorically stated that the plaintiffs have not performed their obligation and some payments were made to the plaintiffs on account of legal expenses. Thereafter the defendants discovered that the partnership firm was in a much worse condition than the impression in such regard given to them by the plaintiffs. The learned Single Judge allowed the application on the following reasoning:

"To begin with, the defendants have not disputed either the agreement of February 23, 2015 or the issuance of the letter dated June 23, 2015. The excuse proffered in the letter was that the first defendant was facing "financial contingency" and was "unable to make the said payment as of now." Even after the cheque was issued and closer to the date thereof, there was no assertion of any claim by the defendants or either of them against the plaintiffs. In any event, it is unclear as to whether the defendants could have set off any claim they may have had against the plaintiffs against a post-dated cheque already issued to the plaintiffs. Even otherwise, there is no document from which it would be evident that the defendants made any claim on the plaintiffs or either of them whether in respect of any dues or on account of the alleged poor financial condition of the partnership firm. Even after the issuance of the said letter of June 23, 2015, there was no allegation of the plaintiffs not being entitled to receive the consideration for the plaintiffs surrendering their interest in the firm in favour of the defendants."

This order is under challenge.

In order to succeed in an application for judgment upon admission, the admission has to be categorical and unequivocal. In the instant case, the agreement shows that the defendants have agreed to pay a sum of Rs.25 lakhs to the plaintiffs as a condition for the plaintiffs agreeing to withdraw all the legal disputes with an undertaking that the plaintiffs, on payment of the said sum, would transfer their right, title and interest in the partnership firm in favour of the defendants. In the affidavit-in-opposition, the defendants have categorically stated that although a post-dated cheque was issued in favour of the plaintiffs, but the reciprocal obligation of the plaintiffs have not been discharged as the plaintiffs have failed to transfer their shares in the partnership firm in favour of the defendants. The defendants, however, are in a difficulty at this stage to explain the contents of the letter dated June 23, 2015 where apparently there is no mention of the failure on the part of the plaintiffs to discharge their obligation under the agreement. At this stage, we are only concerned with the pleadings along with the documents disclosed by the parties in order to ascertain whether the admission is unequivocal and unconditional. On the basis of the pleadings, it cannot be said at this stage, that the defendants were unable to make out a defence as neither in the affidavit-in-reply nor in the plaint or the petition in support of the application for judgment on admission, any document has been disclosed by the plaintiffs/petitioners showing that they had transferred their shares in favour of the defendants.

Under such circumstances, order dated November 13, 2017 directing the entire decretal amount to be deposited with the Registrar, High Court, Original Side, is confirmed and shall continue till the disposal of the suit. The Registrar, Original Side shall keep the said fixed deposit renewed from time to time till the disposal of the suit.

Upon payment of costs of 500 Gms. to the plaintiffs, the defendants shall file written statement within two weeks from date. The department shall not accept the written statement without the proof of payment. In default of either of the two conditions, the order under challenge shall immediately revive.

The aforesaid directions are peremptory.

Accordingly, the appeal stands disposed of.