Lumino Industries Ltd. Vs. Fedders Lloyd Corporation Ltd. and anr. - Court Judgment

SooperKanoon Citationsooperkanoon.com/1158258
CourtKolkata High Court
Decided OnJul-25-2014
JudgeDEBANGSU BASAK
AppellantLumino Industries Ltd.
RespondentFedders Lloyd Corporation Ltd. and anr.
Excerpt:
g.a no.2159 of 2013 c.s.no.117 of 2013 in the high court at calcutta ordinary original civil jurisdiction original side lumino industries ltd.versus fedders lloyd corporation ltd.& anr. b e f o r e: the hon’ble justice debangsu basak dated, the 25 july, 2014. appearance: mr.abhrajit mitra, sr.adv.ms.r.kajaria, adv.mr.s.p.mukherjee, adv.mr.soumabha ghose, adv.for the plaintiff. mr.krishna raj thakkar, adv.mr.sudhasatva banerjee, adv.ms.b.kaur, adv.for the defendant no.1. the court:- the suit was for recovery of money and for permanent injunction restraining invocation of bank guarantee. in such suit two applications were filed by the plaintiff. in the firs.application being ga no.1104 of 2013 the plaintiff sought for relief with regard to attachment before judgment as well as injunction restraining invocation of the bank guarantee. interim orders were passed in such applications. in the firs.application in addition to the primary reliefs prayed for, the plaintiff sought appointment of receiver for the purpose of operating the bank accounts of the defendant no.1. during the pendency of the firs.application a second application was filed by the plaintiff, this time seeking an order of injunction on the defendant no.1 from receiving any export benefits and a receiver/special officer to collect the export benefits and make over the same to the plaintiff. the present application was moved ex parte on july 25, 2013 and an interim order was passed. the interim order was subsequently extended from time to time. by the order dated august 14, 2013, the court recorded that, the counsel for the defendant no.1 had informed the court on august 5, 2013 that the matter would be settled and such no further order was passed. learned counsel for the defendant no.1 was found absent when the application was taken up for hearing. a member of the bar was appointed receiver to collect the export benefits from the office of the director general of foreign trade. directions for affidavits were given on august 19, 2013. in spite of directions for affidavits, the defendants did not file any affidavit. mr.abhrajit mitra, learned senior advocate for the plaintiff, contends that the order dated august 14, 2013 which appointed the receiver to collect the export benefits should be continued. the receiver should be directed to implement such order. he submits that in terms of the agreement between the parties, his client is entitled to 19.75% of the export benefits. he referred to the second clause 3.2 of the contract as well as clause 7 under the heading modality of purchase order to be released to lumino industries against world bank contract and submits that, proportion can be found from the worksheet with the contract. he also refers to clause 10 of the contract which relates to warranty. he submits that, since the present application is one for appointment of receiver, the principles of order 38 rule 5 of the code of civil procedure, 1908 will not apply. he contends that, under the contract both the plaintiff and the defendant no.1 are entitled to apply and receive money. two different clauses of the contract entitle the plaintiff and the defendant no.1 to make such application individually. consequently, according to him, the money receivable on account of contract from the government is in medio and, therefore, requires protection. he relies on the decision reported at air1955madras, 430 (t.krishnaswamy chetty-vs-c.thangavelu chetty and ors ).air1989kerala 312 (arun agencies, mattancherry-vs-st. antony’s oil mill and ors.) and (1994) 1 cal. lt - 337 (hc) [lalchand chhaganmull-vs-bengal warehouse and construction pvt.ltd.].and submits that, since the property involved in the instant suit being the money receivable on account of duty draw backs and other benefits from the government is in medio, it is just and proper that the receiver should be appointed for the purpose of collecting the same. he refers to order 40 rule 1 of the code of civil procedure and submits that a receiver can be appointed in respect of any property which has relevance to the suit in contrast to a receiver in respect of property in dispute as laid down under order 39 rules 1 and 2 of the code of civil procedure, 1908. he highlights the absence of the affidavit by the defendant no.1 and submits that, in absence of such affidavit the statements made in the petition should be taken to be true and correct. he relies on the decision reported in air1973sc627[controller of court of ward, kolhapur and anr.-versus g.n.ghorpade and ors.).paragraph 12 for such proposition. he, therefore, submits that, the fact that the plaintiff is entitled to proportionate payment of the duty draw backs receivable by the defendant no.1 is not in dispute. two parties are entitled to apply for such duty draw backs and, therefore, in order to prevent scramble between the plaintiff and the defendant no.1 for such money a receiver is required to be appointed. mr.k.r. thakkar, learned advocate for the defendant no.1 submits that there are no materials in the petition warranting appointment of receiver. he submits that, the plaintiff has filed a previous application, which contains a prayer for appointment of receiver. in the present application the plaintiff claims that, the earlier application was for invocation of the bank guarantee only. in this regard he refers to paragraph 3 of the application. referring to paragraph 3 of the application he submits that, the plaintiff is guilty of suppression of material facts. the reliefs prayed for in the earlier application are not before the court. the reliefs prayed for in the earlier application would demonstrate that, the earlier application was not limited to invoke the bank guarantee alone. in fact apart from seeking an injunction restraining the invocation of the bank guarantee, the firs.application sought reliefs with regard to attachment before judgment as also appointment of receiver. he submits that, the suit is essentially one for money claim. the accounts between the parties are not settled as on date. the proportion at which the plaintiff and the defendant no.1 will share the duty draw backs receivable from the state authorities and the quantum thereof are yet to be decided. there are expenses incurred by the defendant no.1 beyond those noted in the worksheet of the contract those expenses would alter the proportions of sharing also. therefore, reconciliation of accounts is essential between the parties prior to arriving at a finding that a particular amount is due and payable to the plaintiff by the defendant no.1 on account of duty draw back or otherwise. he sought to distinguish the judgments cited on behalf of the plaintiff by submitting that, the fact and scenario in the three cases justified appointment of a receiver. the facts of this case, according to him, did not warrant appointment of a receiver. he submits that in the instant case, according to the version of the plaintiff itself, there is no question of duty draw back being in medio. he refers to the averments made in the application and submits that, it is the case of the plaintiff that the defendant no.1 has applied for the export benefits in question. in this regard he refers to paragraph 5 of the application. it is not the case of the plaintiff that, the plaintiff has also applied for the same export benefits and, therefore, the money receivable as duty draw back is in medio. i have considered the rival contentions of the parties and the materials on record. the suit is for recovery of money claim and perpetual injunction restraining the invocation of bank guarantee involved. in such suit the plaintiff, as noted above, has filed the petition with regard to release of invocation of bank guarantee thereof. in the firs.application the plaintiff apart from seeking injunction of invocation of bank guarantee has also prayed for an order of attachment before judgment as well as appointment of a receiver for the purpose of operating the bank account of the defendant no.1. both the parties before me placed the copy of the firs.application. in the firs.application prayer [i].is for appointment of a receiver/special officer for the purpose of operating the bank account of the defendant no.1. the relief with regard to such receiver, according to mr.thakkar, only means that the plaintiff is seeking operation of the bank account of the defendant no.1 so that the money receivable by the plaintiff can be paid from out of the bank account of the defendant no.1. the money claim of the plaintiff is yet to be ascertained. the ratio and the proportion at which the plaintiff and the defendant no.1 will share the receipts of the duty drawback are yet to be decided. the contract between the parties required interpretation. the version of the defendant is that there are expenses which are not tabulated in the contract itself and that such expenses were made in terms of the contract and, therefore, requires to be taken note in the account of the parties for the purpose of calculating the actual receivable by the plaintiff from the defendant no.1. therefore, according to the defendant no.1, accounts between the plaintiff and the defendant no.1 are required to be reconciled. the question that arises in the instant case is whether or not the amount of money claimed to be receivable by the plaintiff to the defendant no.1 and which, according to me, is yet to be adjudicated upon and pronounced finally, is in medio as suggested by the plaintiff. the plaintiff claims that, the entitlement of the two parties to apply for and received the duty drawbacks from the appropriate authorities makes the money receivable by the plaintiff to be in medio. however, such case is not made out in the petition itself. the petition proceeds on the basis of the defendant no.1 is in the process of applying and receiving the duty drawbacks. therefore, according to the plaintiff’s case, there is no conflicting application before the appropriate authority making the sum receivable as duty drawbacks to be in medio. the authorities cited by mr.mitra speaks of the power of court to appoint a receiver even in a money suit where the property is in medio. in the facts and circumstances of the instance case, i do not find that the claims of the plaintiff to be receivable from the defendant no.1 in medio warranting a receiver to be appointed at this stage. the sum receivable by the plaintiff is yet to be adjudicated upon. so far as the contention of the plaintiff is concerned, that since the defendant no.1 has not used any affidavit, the allegations made in the petition are to be taking as true and correct, the defendant no.1 did not endeavour to place any material beyond the pleadings available on record. it is the submission on behalf of the defendant no.1 that, the materials on record including the pleadings of the plaintiff taken to be true and correct did not make out a case for appointment of a receiver and particularly when the plaintiff has suppressed a prayer for appointment of receiver in the earlier application and prayer for attachment before judgement. even if the plaintiff is not guilty of suppression the fact that the plaintiff sought to suggest in paragraph 3 of its application that the previous application was limited to injunction only when there are other prayers.should be fatal to the application on the ground that the plaintiff has made a suggestion as to a material fact knowing the same to be false. in such circumstances, i dismiss g.a.no.2159 of 2013. all interim orders passed in this application are vacated. the receiver appointed stand discharged without any requirement to file any accounts in the suit. no order as to costs. (debangsu basak, j.) snn/sb1.
Judgment:

G.A No.2159 of 2013 C.S.No.117 of 2013 IN THE HIGH COURT AT CALCUTTA ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL SIDE LUMINO INDUSTRIES LTD.Versus FEDDERS LLOYD CORPORATION LTD.& ANR.

B E F O R E: The Hon’ble Justice DEBANGSU BASAK Dated, the 25 July, 2014.

Appearance: Mr.Abhrajit Mitra, Sr.Adv.Ms.R.Kajaria, Adv.Mr.S.P.Mukherjee, Adv.Mr.Soumabha Ghose, Adv.For the plaintiff.

Mr.Krishna Raj Thakkar, Adv.Mr.Sudhasatva Banerjee, Adv.Ms.B.Kaur, Adv.For the defendant no.1.

The Court:- The suit was for recovery of money and for permanent injunction restraining invocation of bank guarantee.

In such suit two applications were filed by the plaintiff.

In the fiRs.application being GA No.1104 of 2013 the plaintiff sought for relief with regard to attachment before judgment as well as injunction restraining invocation of the bank guarantee.

Interim orders were passed in such applications.

In the fiRs.application in addition to the primary reliefs prayed for, the plaintiff sought appointment of Receiver for the purpose of operating the bank accounts of the defendant no.1.

During the pendency of the fiRs.application a second application was filed by the plaintiff, this time seeking an order of injunction on the defendant no.1 from receiving any export benefits and a Receiver/Special Officer to collect the export benefits and make over the same to the plaintiff.

The present application was moved ex parte on July 25, 2013 and an interim order was passed.

The interim order was subsequently extended from time to time.

By the order dated August 14, 2013, the Court recorded that, the counsel for the defendant no.1 had informed the Court on August 5, 2013 that the matter would be settled and such no further order was passed.

Learned Counsel for the defendant no.1 was found absent when the application was taken up for hearing.

A member of the Bar was appointed Receiver to collect the export benefits from the Office of the Director General of Foreign Trade.

Directions for affidavits were given on August 19, 2013.

In spite of directions for affidavits, the defendants did not file any affidavit.

Mr.Abhrajit Mitra, learned Senior Advocate for the plaintiff, contends that the order dated August 14, 2013 which appointed the Receiver to collect the export benefits should be continued.

The Receiver should be directed to implement such order.

He submits that in terms of the agreement between the parties, his client is entitled to 19.75% of the export benefits.

He referred to the second clause 3.2 of the contract as well as clause 7 under the heading Modality of Purchase Order to be released to Lumino Industries against world bank contract and submits that, proportion can be found from the worksheet with the contract.

He also refers to clause 10 of the contract which relates to warranty.

He submits that, since the present application is one for appointment of Receiver, the principles of Order 38 Rule 5 of the Code of Civil Procedure, 1908 will not apply.

He contends that, under the contract both the plaintiff and the defendant no.1 are entitled to apply and receive money.

Two different clauses of the contract entitle the plaintiff and the defendant no.1 to make such application individually.

Consequently, according to him, the money receivable on account of contract from the Government is in medio and, therefore, requires protection.

He relies on the decision reported at AIR1955Madras, 430 (T.Krishnaswamy Chetty-Vs-C.Thangavelu Chetty and Ors ).AIR1989Kerala 312 (Arun Agencies, Mattancherry-Vs-St.

Antony’s Oil Mill and Ors.) and (1994) 1 Cal.

LT - 337 (HC) [Lalchand Chhaganmull-Vs-Bengal Warehouse and Construction PVT.Ltd.].and submits that, since the property involved in the instant suit being the money receivable on account of duty draw backs and other benefits from the Government is in medio, it is just and proper that the Receiver should be appointed for the purpose of collecting the same.

He refers to Order 40 Rule 1 of the Code of Civil Procedure and submits that a Receiver can be appointed in respect of any property which has relevance to the suit in contrast to a Receiver in respect of property in dispute as laid down under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908.

He highlights the absence of the affidavit by the defendant no.1 and submits that, in absence of such affidavit the statements made in the petition should be taken to be true and correct.

He relies on the decision reported in AIR1973SC627[Controller of Court of Ward, Kolhapur and Anr.-versus G.N.Ghorpade and Ors.).paragraph 12 for such proposition.

He, therefore, submits that, the fact that the plaintiff is entitled to proportionate payment of the duty draw backs receivable by the defendant no.1 is not in dispute.

Two parties are entitled to apply for such duty draw backs and, therefore, in order to prevent scramble between the plaintiff and the defendant no.1 for such money a Receiver is required to be appointed.

Mr.K.R.

Thakkar, learned Advocate for the defendant no.1 submits that there are no materials in the petition warranting appointment of Receiver.

He submits that, the plaintiff has filed a previous application, which contains a prayer for appointment of Receiver.

In the present application the plaintiff claims that, the earlier application was for invocation of the bank guarantee only.

In this regard he refers to paragraph 3 of the application.

Referring to paragraph 3 of the application he submits that, the plaintiff is guilty of suppression of material facts.

The reliefs prayed for in the earlier application are not before the Court.

The reliefs prayed for in the earlier application would demonstrate that, the earlier application was not limited to invoke the bank guarantee alone.

In fact apart from seeking an injunction restraining the invocation of the bank guarantee, the fiRs.application sought reliefs with regard to attachment before judgment as also appointment of Receiver.

He submits that, the suit is essentially one for money claim.

The accounts between the parties are not settled as on date.

The proportion at which the plaintiff and the defendant no.1 will share the duty draw backs receivable from the State Authorities and the quantum thereof are yet to be decided.

There are expenses incurred by the defendant no.1 beyond those noted in the worksheet of the contract those expenses would alter the proportions of sharing also.

Therefore, reconciliation of accounts is essential between the parties prior to arriving at a finding that a particular amount is due and payable to the plaintiff by the defendant no.1 on account of duty draw back or otherwise.

He sought to distinguish the judgments cited on behalf of the plaintiff by submitting that, the fact and scenario in the three cases justified appointment of a Receiver.

The facts of this case, according to him, did not warrant appointment of a Receiver.

He submits that in the instant case, according to the version of the plaintiff itself, there is no question of duty draw back being in medio.

He refers to the averments made in the application and submits that, it is the case of the plaintiff that the defendant no.1 has applied for the export benefits in question.

In this regard he refers to paragraph 5 of the application.

It is not the case of the plaintiff that, the plaintiff has also applied for the same export benefits and, therefore, the money receivable as duty draw back is in medio.

I have considered the rival contentions of the parties and the materials on record.

The suit is for recovery of money claim and perpetual injunction restraining the invocation of bank guarantee involved.

In such suit the plaintiff, as noted above, has filed the petition with regard to release of invocation of bank guarantee thereof.

In the fiRs.application the plaintiff apart from seeking injunction of invocation of bank guarantee has also prayed for an order of attachment before judgment as well as appointment of a Receiver for the purpose of operating the bank account of the defendant no.1.

Both the parties before me placed the copy of the fiRs.application.

In the fiRs.application prayer [i].is for appointment of a Receiver/Special Officer for the purpose of operating the bank account of the defendant no.1.

The relief with regard to such Receiver, according to Mr.Thakkar, only means that the plaintiff is seeking operation of the bank account of the defendant no.1 so that the money receivable by the plaintiff can be paid from out of the bank account of the defendant no.1.

The money claim of the plaintiff is yet to be ascertained.

The ratio and the proportion at which the plaintiff and the defendant No.1 will share the receipts of the duty drawback are yet to be decided.

The contract between the parties required interpretation.

The version of the defendant is that there are expenses which are not tabulated in the contract itself and that such expenses were made in terms of the contract and, therefore, requires to be taken note in the account of the parties for the purpose of calculating the actual receivable by the plaintiff from the defendant No.1.

Therefore, according to the defendant No.1, accounts between the plaintiff and the defendant No.1 are required to be reconciled.

The question that arises in the instant case is whether or not the amount of money claimed to be receivable by the plaintiff to the defendant No.1 and which, according to me, is yet to be adjudicated upon and pronounced finally, is in medio as suggested by the plaintiff.

The plaintiff claims that, the entitlement of the two parties to apply for and received the duty drawbacks from the appropriate authorities makes the money receivable by the plaintiff to be in medio.

However, such case is not made out in the petition itself.

The petition proceeds on the basis of the defendant No.1 is in the process of applying and receiving the duty drawbacks.

Therefore, according to the plaintiff’s case, there is no conflicting application before the appropriate authority making the sum receivable as duty drawbacks to be in medio.

The authorities cited by Mr.Mitra speaks of the power of Court to appoint a Receiver even in a money suit where the property is in medio.

In the facts and circumstances of the instance case, I do not find that the claims of the plaintiff to be receivable from the defendant No.1 in medio warranting a Receiver to be appointed at this stage.

The sum receivable by the plaintiff is yet to be adjudicated upon.

So far as the contention of the plaintiff is concerned, that since the defendant No.1 has not used any affidavit, the allegations made in the petition are to be taking as true and correct, the defendant No.1 did not endeavour to place any material beyond the pleadings available on record.

It is the submission on behalf of the defendant No.1 that, the materials on record including the pleadings of the plaintiff taken to be true and correct did not make out a case for appointment of a Receiver and particularly when the plaintiff has suppressed a prayer for appointment of Receiver in the earlier application and prayer for attachment before judgement.

Even if the plaintiff is not guilty of suppression the fact that the plaintiff sought to suggest in paragraph 3 of its application that the previous application was limited to injunction only when there are other prayeRs.should be fatal to the application on the ground that the plaintiff has made a suggestion as to a material fact knowing the same to be false.

In such circumstances, I dismiss G.A.No.2159 of 2013.

All interim orders passed in this application are vacated.

The Receiver appointed stand discharged without any requirement to file any accounts in the suit.

No order as to costs.

(DEBANGSU BASAK, J.) snn/sb1.