Sai Kommoju Durga Prasada Rao and Another. Vs. Patnala Babu Rao and Others. - Court Judgment

Excerpt:
the suit schedule property fell partly to varahalu, the father of the 1st respondent, and partly to satyanarayana. the 1st respondent got a notice, dated 01.07.2003 issued, demanding delivery of possession of the property, when the 1st appellant started asserting rights in himself. on verification, it emerged that the 1st appellant executed a gift deed on 10.04.2003, in favour of his wife, the 2nd appellant, in relation to the property. the suit was decreed. the appellants made a feeble attempt to plead that the 1st respondent transferred the property in favour of ratnayamma through ex.b.20, on 01.02.1988.   1. defendants 1 and 2 in o.s.no.860 of 2003 on the file of iii additional senior civil judge, visakhapatnam, are the appellants. they feel aggrieved by the judgment and decree passed by the trial court on 24.04.2006, and filed this appeal. the 1st respondent-plaintiff filed the suit for the relief of declaration of title and recovery of possession of the suit schedule property, r.c.c. terraced house bearing door no.46-15-12 of devangula street, dondaparthy, visakhapatnam. he has also claimed arrears of rent to an extent of rs.1,44,000/- from the respondents. 2. the brief averments in the plaint are to the effect that, late patnala lakshmayya, had three sons, by name, varahalu, satyanarayana and suryanarayana @ suribabu. the plaintiff is the son of varahalu. on the death of his first wife, lakshmayya married another woman, by name akkayyamma, who is none other than the sister of his first wife. through his second wife, lakshmayya had a son by name chinnayachari and two daughters - ratnayamma and ammaji. the 1st appellant is the fostered son of ammaji, and after her death, he started living with ratnayamma. 3. partition of the properties took place among the three sons of lakshmayya, through his first wife, in the year 1927, through a registered partition deed. the suit schedule property fell partly to varahalu, the father of the 1st respondent, and partly to satyanarayana. through a sale deed, dated 23.08.1955, satyanarayana sold his share to varahalu. thereby, the latter became the absolute owner of the entire property. varahalu died in the year 1969 and the 1st respondent succeeded to his interest. 4. the 1st respondent pleaded that since he was employed in the railways, he entrusted the management and administration of the suit schedule property, to his maternal aunt by name ratnayamma and for that purpose, he executed a general power attorney, on 04.01.1988. according to him, after the death of ratnayamma on 17.05.1999, the 1st appellant was looking after the property. the 1st respondent got a notice, dated 01.07.2003 issued, demanding delivery of possession of the property, when the 1st appellant started asserting rights in himself. 5. he found that respondents 2 to 5 (defendants 2 to 6) were in possession of part of the property, as tenants. on verification, it emerged that the 1st appellant executed a gift deed on 10.04.2003, in favour of his wife, the 2nd appellant, in relation to the property. the reply given by the 1st appellant asserting title in himself, constituted the cause of action for the 1st respondent to file the suit. 6. the suit was opposed mainly by the 1st appellant and other defendants in the suit adopted his written statement. the gist of his written statement is that after the partition took place among varahalu and his brothers, ratnayamma purchased the entire property and all the original documents pertaining to it, were handed over to her together with the property in the year 1965. she is said to have executed a registered will in the year 1972 in favour of the 1st respondent. it was also stated that the 1st respondent and his family members executed an unregistered sale deed, being ex.b.20, in favour of ratnayamma, in the year 1988. 7. on the basis of the pleadings in the suit, the trial court framed the following issues for its consideration: i) "whether the patnala ratnayamma is the owner of the property? ii) whether the ratnayamma perfected her right by adverse possession? iii) whether the will executed in favour of d.1 is true, valid and acted upon? iv) whether d2 became owner of plaint schedule by virtue of settlement deed dated 10.04.2003 executed by d1? v) whether suit is barred by limitation? vi) whether plaintiff is entitled for declaration and possession? vii) whether the plaintiff is entitled for arrears of rent? viii) whether the plaintiff is entitled for permanent injunction?" 8. the 1st respondent deposed as pw.1 and filed exs.a.1 to a.14. on behalf of the appellants, dws.1 and 2 were examined and exs.b.1 to b.20 were filed. the trial court decreed the suit as prayed for, with costs. 9. sri s.rajan, learned counsel for the appellants, submits that there was hardly any evidence in support of the plea of the 1st respondent, since no other witnesses were examined and still the trial court decreed the suit. he contends that the very fact that the 1st respondent was not in possession of the property, for decades together, nor his name was found anywhere in the connected records, discloses that the property was under possession and enjoyment of ratnayamma as owner. learned counsel further submits that the appellants have placed before the trial court, voluminous documentary evidence to establish that ratnayamma purchased the suit schedule property from the original owners, including the father of the 1st respondent and that there was no basis for the claim in the suit. 10. sri p.bhaskar mohan, learned counsel for the 1st respondent, on the other hand, submits that the appellants admitted that part of the suit schedule property fell to the share of varahalu, the father of the 1st respondent, in the family partition, that was effected through ex.b.7, in the year 1927, but have not substantiated their plea that it was sold in favour of ratnayamma. he contends that the very fact that a gpa, being ex.a.5, dated 01.02.1998, equivalent to ex.b.1, was executed by the 1st respondent, nearly six decades thereafter, discloses that he continued to exercise the ownership rights, upon the property. he further submits that the item of property said to have been purchased by ratnayamma, under ex.b.8, was different from the suit schedule property and that a futile effort was made to rely upon ex.b.20, an unregistered sale deed dated 01.02.1988, which was rightly held by the trial court, as inadmissible in evidence. 11. the relationship between the contesting parties is not disputed. common ancestor, late patnala lakshmayya, had three sons through his first wife and the 1st respondent is the son of one of them, by name varahalu. through his second wife, lakshmayya had one son and two daughters. the first appellant is the fostered son of one of daughters, by name ammaji, and after her death, he was residing with another daughter ratnayamma. the 1st respondent pleaded that part of the suit property has fallen to the share of his father and the other half was purchased way back in the year 1955 by his father from satyanarayana, another son of lakshmayya and that he succeeded to the entire property. he filed the suit for declaration of title and recovery of possession, when the appellants 1 and 2 started asserting title in themselves. the suit was decreed. 12. in view of the submissions made by the learned counsel for the parties, the following points arise for consideration: i) whether the 1st respondent proved his title to the suit schedule property? ii) whether the suit schedule property was acquired in any manner by late ratnayamma and if so, iii) whether the suit schedule property has devolved upon the 1st appellant by operation of will ex.b.10? since the right claimed by the 2nd appellant on the basis of ex.b.6, a gift deed, dated 10.04.2003, would depend upon the answer to the points framed above, it is not necessary to deal with the same independently. point no.(i) 13. the pedigree of the family of patnala lakshmayya was presented by the 1st respondent. the partition among the three sons of lakshmayya, through his first wife, was in a way proved by the appellants, when they filed ex.b.7 - registered partition deed, dated 18.12.1927. the appellants did not dispute the fact that one of the sons, satyanarayana sold his share in the suit schedule property, to his brother varahalu, through ex.b.8 in the year 1955. even this was proved by the 1st respondent, by filing the document. once they did not dispute that the 1st respondent is the son of varahalu, nothing more was needed for the 1st respondent to prove his title to the property. the appellants could have non- suited the 1st respondent, only by pleading the transfer of title to the property from varahalu, in accordance with law or by taking the plea of adverse possession and by establishing it. with the filing of exs.b.7 and b.8 by the appellants, it stood established that the father of the 1st appellant was the absolute owner of the property and being the class-i heir, the 1st respondent succeeded to his estate. if any doubt existed as to the continued enjoyment and the title by the 1st respondent in respect of the property, that stood removed with the filing of the original power of attorney executed by the 1st respondent in favour of ratnayamma, for administration thereof. incidentally, the original of the g.p.a. is filed as ex.b.1 by the appellants. therefore, it can safely be held that the 1st respondent proved his title to the suit schedule property. point nos.(ii) and (iii)  notwithstanding the fact that the 1st respondent proved his title, he could have recovered possession, if only there did not exist any formidable factor, such as acquisition of any rights by the appellants or their predecessors, such as by way of transfer or adverse possession. the record does not disclose that any valid transfer inter vivos has taken between the 1st respondent or any other person. the appellants made a feeble attempt to plead that the 1st respondent transferred the property in favour of ratnayamma through ex.b.20, on 01.02.1988. admittedly, it is an unregistered document and the trial court has rightly held the same as inadmissible in evidence. no legal consequences flow from it. 14. the appellants could have taken the plea of adverse possession, but for the fact that they have specifically pleaded that ratnayamma purchased the property. added to that, ratnayamma was appointed as power of attorney under ex.b.1 by the 1st respondent. an agent much less his/her legal representative can never be permitted to plead any rights adverse to the interests of the principal. as a matter of fact, there is nothing on record to disclose that ratynayamma had ever asserted any rights over the property, in herself. it is only the 1st appellant that made an attempt in this regard. when the possession of the property by ratnayamma cannot be treated to be adverse, to the interest, of the 1st respondent, the question of the 1st appellant claiming through ratnayamma, that too, under a will, taking the plea of adverse possession, does not arise. therefore, the inescable conclusion is that the 1st respondent was entitled to recover the possession of the property. 15. the will said to have been executed by ratnayamma in favour of the 1st appellant is hardly of any use, unless the executrix had an independent title to the property. therefore, the second point is also answered against the appellants and in favour of the 1st respondent. 16. though the 1st appellant is said to have executed a gift deed, being ex.b.6, on 10.04.2003, in favour of his wife, the 2nd appellant, in respect of the property. it is already held that the 1st respondent did not derive any title to the property and he cannot convey a better title to his wife, the 2nd appellant. in addition to that, it was elicited from the 1st appellant as dw.1 that there are no documents to show that ratnayamma purchased the plaint schedule property from the father of the 1st respondent, and that the will marked as ex.b.10 is in respect of a different item of property. he admitted that the property mentioned therein i.e. house bearing no.46-15-11 has fallen to the share of ratnayamma. he was not entitled to lay any claim to the suit schedule property, on the basis of the said document. 17. viewed from any angle, this court does not find any merits in the appeal and it is accordingly dismissed. on a request made by the learned counsel for the appellants, three months time is granted to them to put the 1st respondent in possession of the suit property, subject to payment of rents. 18. there shall be no order as to costs through out.averi id t/- 6. kaveri india ltd. 42,524/- 7. surana strips ltd. 1,26,288/-  1,40,611/- 8. surana strips ltd. 22,500/- 9. surana strips (tube) ltd. 3,01,415/-  92,762/- 10. surana strips (tube) ltd. 5,600/- __________  16,51,423/-  _________ yours faithfully, for surana strips ltd. sd/- m.ravi shankar general manager (operations)" 10. it is also contended by the learned counsel appearing for the petitioner that rw-1-g.p.surana admits of the liability of the respondent to the petitioner. what is disputed by the respondent is only with regard to the quantum of amount. according to the learned counsel, transport of goods of the respondent company through the transport provided by the petitioner firm is not in dispute, in which case the respondent company is bound to pay the freight charges. it is contended by the learned counsel that the petitioner has not concealed any material facts with regard to exercise of lien over the material entrusted for transport towards freight charges. the petitioner informed the respondent with regard to release of the consignment, on payment of the freight charges and despite repeated reminders to the respondent, the respondent did not choose to pay the freight charges and thereby, compelled the petitioner firm to retain the consignment. 11. learned counsel appearing for the respondent submits that the petitioner, having accepted the transport of the goods for delivery to the consignee, failed to handover the goods to the consignee and thereby, committed breach of the contract and the petitioner being a defaulting party cannot be permitted to contend that the goods came to be retained in exercising lien towards freight charges. he would also contend that the signatory to ex.p-7 letter dated 15.11.2001 is not an authorized signatory on behalf of the respondent company and therefore, the contents therein do not bind the respondent company. in a way, the contention of the respondent is that the respondent never accepted the liability as projected in ex.p-7 letter. he would also submit that the respondent at the earliest point of time disputed the liability under reply notice dated 29.5.2003, copy of which has been exhibited as ex.p-10. since the very liability is in dispute, the question of neglecting to pay does not arise. in support of his submissions, reliance has been placed on the decisions of the supreme court in pradeshiya industrial & investment corporation of u.p v. north india petrochemicals ltd.1, mediquip systems (p) ltd. v. proxima medical system gmbh2, ahmedabad electricity company limited, ahmedabad v. sanghi spinners (india) ltd.3 12. the petitioner is engaged in the business of transport of goods of the customers, as per the orders placed by them from time to time. the respondent belongs to surana group of industries. there are about 10 companies belonging to surana group of industries. all the companies transported their goods by engaging the transport service of the petitioner firm. the petitioner firm retained two consignments of 70 boxes of jointing kits under l.r.no.28587 dated 11th october 2001 and 70 boxes of jointing kits booked under l.r.no.02588 dated 11th october 2001 as a lien in exercise of its right to recover freight charges. the above-referred two consignments related to m/s. p.m.telecom, which is one of the companies of surana group. apart from the above-referred two consignments, the petitioner firm also retained plastic isolated copper wire sent by the respondent company for being delivered to paramount cables, new delhi. 13. section 433 of the companies act says that a company may be wound up by the court- (a) if the company, has, by special resolution, resolved that the company be wound up by the court; (b) if default is made in delivering the statutory report to the registrar or in holding the statutory meeting; (c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year (d) if the number of members is reduced, in the case of a public company, below seven and in the case of a private company, below two; (e) if the company is unable to pay its debts; (f) if the court is of opinion that it is just and equitable that the company should be wound up. 14. from the above, it follows that (1) there must be a debt; and (2) the company must be unable to pay the same. the supreme court in catena of decisions has held that an order under section 433 (e) of the companies act, 1956 is discretionary. there must be a debt due and the company must be unable to pay the same. a debt under this section must be a determined or a definite sum of money payable immediately or at a future date and that inability being referred in the expression "unable to pay its debts" in section 433 of the companies act should be taken in the commercial sense and that the machinery for winding up will not be allowed to utilize merely as a means for realization of debts due from the company. 15. rules as regards the dismissal of winding up petition based on disputed claims are stated by the supreme court in madhusudan gordhandas v. madhu woollen industries private limited4. the supreme court held that if the debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company. the principles on which the court acts are:- (i) that the defence of the company is in good faith and one of substance; (ii) the defence is likely to succeed in point of law; and (iii) the company adduces prima facie proof of the facts on which the defence depends for invoking the relevant provisions, i.e., section 433(e) read with section 434(1)(a) of the act in relation to winding up of a company on the ground of its inability to pay its debt, what is necessary is that despite service of notice by the creditor, the company which indebted in a sum exceeding one lakh rupees then due, failed and/or neglected to pay the same within three weeks thereafter or to secure or compound for it to the reasonable satisfaction of the creditor. failure of the company to pay the agreed interest or the statutory interest would come within the purview of the word "debt". further section 433(e) of the companies act does not state that the debt must be precisely a definite sum. it is not a requirement of law that the entire debt must be definite and certain. 16. rw-1 admits in chief-examination of the failure of the respondent company in paying the freight charges to the petitioner firm. for better appreciation, i may refer the relevant portion of the chief examination of rw.1 in his own words, and it reads thus:- " i state that on 11.10.2001 m/s.p.m.telecom, i.e., one of m/s. surana group of companies booked consignment of jointing kits, tsf-2 to be consigned to mtnl, sde, (sd), ghatkopar, mumbai through the petitioner firm. in each lorry 70 boxes containing the jointing kits of value of rs.6,75,192/- were transported. while so, 140 boxes under invoices bearing no.004 & 005 under the lrs no.028557 and 28588 have not been delivered to the consignee. immediately when enquired, sri pravin rajendra gupta, the partner of the petitioner firm vide its letter dated 13.11.2001 (under registered post) addressed to m/s.p.m.telecom limited stated that the consignment of 70 boxes of jointing kits booked under lrs. no.028557 and 28588 have been stored (withheld) by them as lien in exercise of rights to recover the unpaid dues of all the companies stated therein. upon receipt of the said letter, the respondent has immediately faxed a letter dated 16.10.2001 requested the petitioner to deliver the withheld material immediately, since the contract with the consignee mtnl, mumbai was time bound and if not delivered within week days from its order, the contract may be cancelled. further assured that the respondent shall issue a cheque for rs.2,00,000/- of the current date and further five cheques for the balance amount upon settlement of accounts i.e., subject to delivery of the goods of p m telecom to mtnl bombay and goods of m/s. golconda engineering to paramount communications, new delhi. instead of releasing the said material, the petitioner demanded for down payment of rs.10,00,000/- and balance in four cheques along with interest, which put loss of the contract to the respondent company. the jointing kits are used for telecom purpose and not a fast moving item in the market and with a shelf life of one year only from the date of manufacturing. thus the petitioner has high handedly withheld the entire consignment worth about rs.14,19,404/-. till this date, the said consignments have not been delivered causing loss of rs.14,19,404/- to the respondent being the cost of the material, interest loss @ 2% per month on the said money of the material under the said consignment, loss of business and huge damages" 17. it is a matter of record that the petitioner firm filed a suit against m/s. kaveri industries, one of the group companies of surana industries for recovery of the freight charges and obtained a decree. mr. ravi shankar, general manager, operations, surana strips admitted the liability of the respondent company to a tune of rs.6,11,437/- plus rs.1,00,832/- under ex.p-7 letter dated 15.11.2001. of course, the respondent disputed the authority of mr. ravi shankar to admit the liability on its behalf. the respondent company took the plea that mr. ravi shankar earlier worked as regional manager in the petitioner firm and he had no authorization on behalf of the respondent company to admit the liability on its behalf towards the petitioner firm. the respondent company entrusted the consignment of plastic isolated copper wire to the petitioner for being delivered to paramount communications situated at new delhi on 31.12.2000 and 01.11.2001. the petitioner has not delivered the material to the consignee. for the first time pw-1 came up with the theory in the cross- examination that the consignment which is required to be delivered to m/s. paramount communications met with a fire accident in transit. for better appreciation, i may refer the statement of pw-1 in cross examination in his own words and it is thus:- " we have not withheld the consignment sent to m/s.paramount communications as the consignment met with fire accident in transit". it is nowhere stated in the petition that the consignment is involved in fire accident while on transit. when once the goods are entrusted to the petitioner for transportation, he is bound to take reasonable care till delivery is affected to the consignee. according to the respondent, the worth of consignment entrusted to the petitioner for being delivered to paramount communications is rs.6 lakhs. there is a serious dispute as to whether the consignment entrusted to the petitioner is involved in the fire accident while on transit. in the given facts and circumstances, the defence raised by the respondent is a substantial one and not moonshine. it is the civil court, which is proper forum to adjudicate the claim of the petitioner firm as well as the counter claim of the respondent company. invocation of winding up proceedings, in the given facts and circumstances, is misconceived. 18. accordingly, the company petition is dismissed.