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Judgment
Bhaskar Bhattacharya, J.—By this application the Plaintiff has prayed for judgment and decree on admission for a sum of Rs. 20,32,000.00 and interest on admission at the rate of Rs. 18% p.a.
The Plaintiff has been described as a partnership firm within the meaning of Partnership Act, 1932 having its head office at No. 5, Dr. Rajendra Prasad Sarani, Calcutta- 700 001. The Defendant is a company incorporated under the Companies Act.
The case made out by the Plaintiff may be summarized thus:
a) In the month of March 1985 the Defendant company through its officers approached the Plaintiff to lend and advance a sum of Rs. 2,00,000.00 lakh to the Defendant as the company was in urgent need for funds and required the said amount for its business purposes.
b) Relying upon the aforesaid representation of the Defendant, the Plaintiff agreed to lend and advance a sum of Rs. 2,00,000.00 lakh to the Defendant on condition that the said sum would be repaid to the Plaintiff with interest calculator the rate of 18% p.a. Pursuant to the said agreement between the parties, the Plaintiff forwarded two cheqs of Rs. 1,00,000.00 lakh each which were encashed the Defendant and the monies were appropriated for its benefit.
c) The Plaintiff duly maintained an open running continuous account in the name of the Defendant for the monies after taking into cannot it accrued interest and the relevant income tax calculations deposited by the Defendant with the income tax authorities.
d) The Defendant from time to time deposited income tax deducted at source from the interest accrued for the years ending March 31, 1991 to March 31, 1998 and sent the Plaintiff the copies of such tax deduction at source certificates.
e) Inspite of admitting and acknowledging its liability to repay the said sum of Rs. 2,00,000.00 lakh with interest at the rate of 18% p.a., the Defendant failed, neglected and refused to make any payment to the Plaintiff.
f) According to the agreement between the parties the amount due and owing as on February 29, 2000 to the Plaintiff from the Defendant is a sum of Rs. 20,32,900.00 as per following particulars:
Particulars
Principal sum Interest at the rate of 18% per annum from March 31, 1985 to February 29, 2000 compounded annually after credit given for T.D.S. Rs. 2,00,000/-R$. 18,32,900/-
Total Rs. 20,32,900/-
g)An alternative case was made by the Plaintiff to the effect that the Plaintiff did not intend to advance the said sum to the Defendant gratuitously and the Plaintiff was entitled to compensation in respect thereof which the Plaintiff reasonably assessed at Rs. 20,32,900.00.
Along with the present application, the Plaintiff has annexed the tax deduction certificates at source u/s 203 of the Income Tax Act, 1961 issued by the Defendant company. It appears from page 32 of the present application that on March 31, 1998 the Defendant deposited Rs. 22,907.00 being 10% of the amount of interest payable by the Defendant. The said certificate further indicates that interest paid or credited is shown as Rs. 2,29,073.00. It appears from the account annexed at page 30 of the application that total amount payable by the Defendant to the Plaintiff as on March 31, 1998 comes to Rs. 15,01,703.00 after taking into account the T.D.S. deposited by the Defendant as per certificate annexed at page 31 of the application mentioned above.
In the affidavit-in-opposition, although the Defendant has alleged that the accounts shown at pages 27 to 30 do not bear any signature of any of the officers or person of the Defendant and those have been described as ''manufactured'' and ''fabricated'', as regards the accounts shown in pages 21 to 26 of the previous years and the certificates issued by the Defendant annexed at pages 31 to 37 no specific denial has been made disputing the authenticity of those documents. It has been, however, clarified that by issuing tax deduction at source certificate the Defendant did not admit or acknowledge any liability by recording the amount of interest calculated at the alleged contractual rate on the alleged sum. But the fact that such T.D.S. certificate was sent by the Defendant to the Plaintiff was not denied.
At the time of hearing, Mr. B.K. Chatterjee, the Learned Counsel appearing on behalf of the Defendant has vehemently contended that in the absence of any materials showing that the Plaintiff firm is a registered partnership firm and the names of partners of the firm as on the date of the institution of the suit are shown to be partners in the Register of firms as required u/s 69 of the partnership Act, the present suit is not maintainable.
In view of such defence taken by the Defendant, this Court permitted the Plaintiff to file supplementary affidavit annexing certificate of registration showing that the Plaintiff firm is a registered one and that the names of partners had been shown in the Registrar of Firms as partners of the firm on the date of presentation of the plaint.
Although the firm has been shown to be registered one but the second requirement was not complied with as it appears from the certified copy of the certificate produced by Mr. Chatterjee.
Under the aforesaid circumstances, Mr. Protap Chatterjee, the Learned Counsel appearing on behalf of the Plaintiff by placing strong reliance upon the decision of the Supreme Court in the case of M/s. Raptakos Brett and Co. Ltd. Vs. Ganesh Property, contends that the Plaintiff having also made an alternative claim u/s 70 of the Contract Act, the Plaintiff is entitled to get a decree as it wants to enforce the law of land by which the Defendant is bound to return the said amount along with interest as compensation for enjoying the said amount.
In other words, Mr. Chatterjee contends that the Defendant having admitted by issuing tax deduction certificate at source that the amount advanced to him is not gratuitous, the Plaintiff is entitled to the claim the amount with compensation even if it is assumed that the Plaintiff has failed to prove the requirements of Section 69(2) of the Partnership Act. Mr. Chatterjee thus contends that for the purpose of recovery of the amount on the basis of alternative claim made in the plaint, the provision of Section 69(2) of the Partnership Act does not stand in the way.
In the case of Raptakos Brett and Company Ltd. v. Ganesh Property Supra the Plaintiff, a partnership firm, filed a suit for eviction of the Defendant on the allegation that on the expiry of lease of 21 years, the Defendant having not vacated the premises it was entitled to get recovery of possession. In such a suit, the plea taken by the Defendant was that the Plaintiff firm having failed to prove the requirements of Section 69(2) of the Partnership Act, the suit was not maintainable. In this connection it will be necessary to quote paras. 2 and 3 of the plaint of the said suit as noted below:
The said lease dated 16th March, 1964 in respect of the suit-premises terminated by efflux of time on the expiry of 15th March, 1985 but the Defendant has failed and neglected to quit, vacate and deliver up peaceful possession of suit premises to the Plaintiff as required under the covenant of the said lease and law of land;
The Plaintiff in this suit seeks to recover from the Defendant khas possession of the suit premises which the Defendant has failed to vacate and is in wrongful occupation thereof. The Plaintiff also claims and seeks to recover mesne profits or damages @ Rs. 200/- per day or at such rate as the learned Court may determine, from 16th March, 1985 till recovery of khas possession.
While considering the aforesaid plea taken by the Defendant, the Apex Court made the following observations:
A conjoint reading of these clauses in the lease deed with the averments in para. 2 of the plaint, therefore, clearly indicate that the Plaintiff had sought to enforce through Court, amongst others its right to get restoration of the peaceful possession of the suit premises from the Defendant arising from the alleged breach of these relevant covenants on the part of the Defendant on the expiry of the lease period. If the averments in para. 2 had rested at this stage, Shri Nariman would have been perfectly justified in submitting that the Plaintiff was trying to enforce solely its right arising out of the erstwhile contract. However, the very same paragraph proceeds further and states in the last line thereof that the Defendant had not vacated the premises under the law of the land. This raises the moot question whether the plaint as framed is based on two causes of action or only on one solitary cause of action as submitted by Shri Nariman, learned Senior Counsel for the Appellant/Defendant. Dr. Singhvi, learned Senior Counsel for the Plaintiff at the outset submitted that the recitals in paragraph 2 regarding the covenants was by way of a historical fact and the suit is purely based on the law of the land, namely, the Common Law as well as Section 108(q) read with Section 111(a) of the Property Act. While Shri Nariman for the Appellant took an entirely opposite stand by submitting that these very recitals in paragraph 2 show that the suit is based solely on the right arising from the alleged breach of covenant by Defendant and the reference to law of the land is by way of abundant caution. As we shall see hereinafter, neither of these extreme covenants can be countenanced. Turning to paragraph 3 it is no doubt true as submitted by Dr. Singhvi for the Respondent that the Plaintiff has clearly stated that it is seeking to recover possession from the Defendant as the Defendant failed to vacate and is in wrongful occupation of the premises. The words ''wrongful occupation of the premises'' according to Dr. Singhvi show that the Plaintiff was alleging in clear terms that the Defendant was in un-authorised occupation of the premises after the termination of the contract. Placing reliance on a number of decisions of this Court it was submitted by Dr. Singhvi that on the expiry of the period of tenancy the erstwhile tenant in the absence of any evidence of tenancy by holding over has to be treated as a tenant at sufferance akin to a trespasser and, therefore, the averments in paragraph 3 of the plaint clearly show that the suit was for enforcing the legal right arising from any law or under any relevant provision of the Property Act and the suit cannot be said to be based on any covenant of the erstwhile lease which was dead and gone by efflux of time. In this connection, strong reliance was placed by Dr. Singhvi in the latter part of paragraph which indicated that the Plaintiff was seeking to recover mesne profits or damages @ Rs. 200/- per day which had nothing to do with the erstwhile lease rent fixed under the contract. According to Dr. Singhvi this averment clearly indicated that the Plaintiff treated the Defendant to be in unlawful possession and hence the claim for damages. On the other hand Shri Nariman learned Senior Counsel for the Appellant submitted that the term ''wrongful occupation'' as found in paragraph 3 when read in the light of paragraph 2 would indicate that according to the Plaintiff, Defendant was in breach of covenant of handing over of peaceful possession on expiry of lease as enjoined on the Defendant under the contract of lease and that ''wrongful occupation'' due to alleged breach of contract was different from ''unlawful occupation''. In our view, this hyper-technical submission of Shri Nariman cannot be countenanced as there is no real distinction between the terms ''wrongful occupation'' and ''unlawful occupation''. Whatever is unlawful cannot be said to be rightful and would necessarily be wrongful. In Concise Oxford Dictionary, 7th Edition, the term ''wrongful'' is defined at page 1246 as under:
Characterized by unfairness or injustice; contrary to law:(of person) not entitled to position etc. occupied.
It is, therefore, obvious that recitals in paragraph 3 can support the case of the Plaintiff both on the ground, if any, that the Defendant had committed breach of the covenant and therefore, it was in wrongful occupation and also equally on the ground that under law of the land, the Defendant was not entitled to continue in possession after the termination of the period of lease and, therefore, it was in unlawful or wrongful occupation. The words ''wrongful occupation'' cannot, therefore, be interpreted to mean only ''in breach of any of the terms and conditions of the contract'' and can legitimately take in its sweep unlawful occupation after the lease expired on efflux of time as per Section 111(a) of the Property Act read with Section 108(q) thereof. The restricted meaning of the term ''wrongful occupation'' as tried to be suggested by Shri Nariman cannot be accepted. On the contrary, the claim of mesne profits @ Rs. 200/ - per day as found in paragraph 3 of the plaint clearly shows that the Plaintiff treated the Defendant to be in unauthorised and illegal occupation after the efflux of time of the lease and therefore, the demand was for mesne profits at the aforesaid rate per day. That had no nexus with the rental of the premises. Turning to the cause of action paragraph 4 it is seen that it is also in general terms and refers to the situation after the expiry of 15th March, 1985 when the lease period was over. It states that the cause of action for recovery of possession arose within the territorial jurisdiction of the Court from that date and such cause of action continued subsequently thereafter. Consequently, paragraphs 3 and 4 of the plaint can be said to be equivocal and not necessarily confined to the breach of the covenant of the lease as mentioned in paragraph 2 of the plaint.
In view of the aforesaid decision of the Apex Court I am of the view that even though the claim of the Plaintiff on the basis of contract is barred for noncompliance with the requirement of Section 69(2) of the Partnership Act, the Plaintiff is entitled to get recovery of the amount advanced along with, compensation for enjoying the money under the provision of Section 70 of the Contract Act which is a ''law of the land''.
At this stage, it will not be out of place to refer to the decision of the Supreme Court in the case of Mulamchand Vs. State of Madhya Pradesh, , where the Apex Court reaffirmed the proposition of law that the provisions of Section 70 of the Contract Act can be invoked by an aggrieved party to a void contract. In my view, the same principle will apply to a contract, the enforcement of which is prohibited by institution of a suit for not fulfilling the requirements of Section 69(2) of the Contract Act (Partnership Act); in such a situation, an aggrieved party may resort to Section 70 of the Contract Act.
In the present proceedings for judgment on admission, in view of the admission of the Defendant in the documents annexed at pages 21 to 26 and 31 to 37 of the application, there is no scope of doubt that initially a sum of Rs. 2,00,000.00 lakh was advanced to the Defendant which was not given gratuitously and such amount has not been refunded. From the certificates of T.D.S. issued by the Defendant upto the period April, 1997 to March, 1998 it is clear that there is unequivocal admission of the Defendant for the dues mentioned therein. It is not the case of the Defendant that the Plaintiff paid the money gratuitously. Thus, the Plaintiff is entitled to get back the original amount of Rs. 2,00,000.00 lakh with compensation.
The next question is what will be the compensation for the aforesaid amount received and enjoyed by the Defendant. In the present case, as it appears from the T.D.S. certificates admittedly issued by the Defendant, it has admitted 18% interest per annum to be reasonable rate of interest according to the market and even claimed benefit under the Income Tax Act, 1961 on the basis of such rate of interest. Thus, the Defendant admitted by its own acts that the Plaintiff is entitled to the compensation for the money enjoyed by the Defendant at the rate of 18% per annum.
It appears that the last T.D.S. issued by the Defendant relates to a period upto March 31, 1998.
Therefore, the Plaintiff is entitled to get back Rs. 2,00,000.00 lakhs and interest on such principal at the rate of 18% per annum till March 31, 1998 even on the basis of admission.
Thus, the total amount on arithmetical calculation comes of Rs. 15,01,703.00. The Plaintiff is also entitled to get interest on judgment at the same rate of interest viz. 18% per annum. Part of the claim made in the suit is decreed accordingly on admission.
Let the suit proceed in accordance with law for the balance amount claimed in the plaint, i.e. till February, 2000.
Interim order granted earlier will continued not only till the realisation of the amount decreed but also till the disposal of the suit.