RAJU JHURANI Vs M/S. GERMINDA PVT. LTD.
Bench: ALTAMAS KABIR,J. CHELAMESWAR
Case number: C.A. No.-005886-005886 / 2012
Diary number: 7440 / 2007
Advocates: SHOBHA Vs
LAWYER S KNIT & CO
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REPORTABL E
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.5886 OF 2012 (Arising out of SLP(C)No.10362 of 2007)
Raju Jhurani … Appellant
Vs.
M/s Germinda Pvt. Ltd. … Respondent
J U D G M E N T
ALTAMAS KABIR, J.
1. Leave granted.
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2. An interesting point has been raised in this
Appeal as to whether the provisions of Order 2 Rule
2 of the Code of Civil Procedure (CPC) would have
any impact on a proceeding under Sections 433, 434
and 439 of the Companies Act, 1956.
3. This Appeal is directed against the judgment
and order dated 14th August, 2006, passed by the
Calcutta High Court in A.C. No.54 of 2005
dismissing the Appeal on the ground that in the
absence of any specific finding whatsoever as to
the rate of rent and the period of default
committed by the respondent-tenant, the proceedings
under the Companies Act, 1956, for winding-up was
not maintainable.
4. The Appellant herein as landlord filed a suit
for eviction against the respondent company on the
ground of default in making payment of the rents
and also on grounds of reasonable requirement, in
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the City Civil Court at Calcutta, under the
provisions of the West Bengal Premises Tenancy Act,
1956. The same was registered as Ejectment Suit
No.201 of 1999. The said suit was decreed only on
the ground of default, but only upon recording that
notice under Section 13(6) of the aforesaid Act had
been duly served and that the ground of default had
been proved, the Trial Court decreed the suit.
There was no finding whatsoever as to the period of
default in the said judgment.
5. After the passing of the decree, as the
Respondent did not hand over vacant possession of
the suit premises, the Appellant put the decree
into execution and pursuant thereto vacant
possession of Flat No.10-D in the 10th Floor and car
parking space No.4 in the ground floor of the
premises No.28-B, Shakespeare Sarani, Calcutta, was
made over to the Appellant through Court Bailiff on
22nd February, 2002. Having obtained vacant
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possession of the suit premises, the Appellant
issued notice to the Respondent Company demanding
payment of arrears of rent, Corporation taxes, etc.
but without yielding any result. Consequently, the
Appellant had no other option, but to file a
winding-up petition before the concerned Company
Court for payment of arrears of rent amounting to
Rs.7,22,381/- from the month of June, 1998, till
August, 2004 at the rate of Rs.12,650/- per month,
together with interest amount of Rs.8,92,211/- at
the rate of 18% per annum. The learned Single Judge
(Company Affairs) dismissed the winding-up petition
on the ground of the alleged bar of Order 2 Rule 2
CPC as well as the observations made that the
Appellant could approach any other appropriate
forum with regard to the claim raised by him in the
winding-up petition and that no summary order could
be passed since the relationship between the
parties had already been terminated.
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6. The Division Bench dismissed the Appeal filed
by the Appellant herein on the ground that the
winding-up petition was not maintainable as there
was no admitted arrears of rent for any particular
period and there was no ascertained amount due in
respect of which a winding-up order could be
passed. The Appellate Court, however, also observed
that the Appellant as the petitioning creditor
would be entitled to claim the amount of arrears
claimed by him in an appropriate proceeding before
the appropriate forum.
7. Questioning the said order of the Division
Bench dismissing the appeal, learned Advocate, Ms.
Shobha, urged that both the learned Single Judge,
as well as the Division Bench, proceeded on an
erroneous interpretation of the provisions of Order
2 Rule 2 CPC and Sections 433, 434 and 439 of the
Companies Act, 1956. Ms. Shobha contended that the
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eviction suit had been decreed only on the ground
of default, since under the West Bengal Premises
Tenancy Act, 1956, there is no provision for a
decree for recovery of rents. In fact, in the
absence of any provision in the Act, the Court
could not have made any decree towards the rents
payable by the Respondent-tenant to the Appellant-
landlord. However, although, the default period or
the rate of rent had not been computed by the Trial
Court, the Trial Court had found that the
Respondents had defaulted in payment of rent from
the month of June, 1998. It was submitted that in
order to ascertain the dues on the basis of the
aforesaid finding, was only a matter of calculation
and mathematics and could be easily ascertained. A
proceeding for winding-up would, therefore, be
maintainable in respect of the debts, which the
Company was unable to pay.
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8. On the question of the bar under Order 2 Rule 2
CPC, Ms. Shobha submitted that the same relates to
suits which were required to include the whole of
the claim which the Plaintiff was entitled to make
in respect of the cause of action, with liberty to
relinquish any portion of his claim to bring the
suit within the jurisdiction of any Court, but
having so relinquished such claim or portion
thereof, the Plaintiff would no longer be entitled
to sue in respect of the portion so omitted or
relinquished. Ms. Shobha also pointed out that
Clause (3) of Rule 2 of Order 2 also prohibits a
person from suing for any relief which may have
been omitted by the Plaintiff, except with the
leave of the Court. In contradistinction to the
above, the provisions of Section 439 of the
Companies Act, 1956, provide for an application to
be made to the Court for the winding-up of the
Company to be presented by a petition, subject to
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the provisions indicated in the Section. Ms. Shobha
pointed out that the proceedings under Section 439
not being a suit, but a Petition, the provisions of
Order 2 Rule 2 CPC would not be attracted since the
bar indicated therein is with regard to suits. On
the basis of such distinction, Ms. Shobha submitted
that the learned Single Judge had wrongly
interpreted the provisions of Order 2 Rule 2 CPC in
holding that the winding-up petition filed by the
Appellant for recovery of its arrear rents/dues was
not maintainable in law.
9. On the question of the findings of the Division
Bench that in the absence of any finding regarding
the rate of rent and the arrears due, a procedure
under Section 439 of the Companies Act was not
maintainable, Ms. Shobha urged that such an
interpretation was erroneous and based on an
incorrect understanding of the provisions of
Section 439 of the Companies Act, 1956, in relation
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to Order 2 Rule 2 CPC. Ms. Shobha reiterated that
once it had been held by the Court that the
Respondent-tenant had defaulted in payment of rent
for a particular month, viz. June 1998, it was only
a matter of calculation and mathematics to
ascertain the dues which were payable by the
Respondent-tenant to the Appellant-landlord. The
relief in the winding-up petition being
ascertainable, the Division Bench of the High Court
erred in law in holding otherwise.
10. Ms. Shobha further submitted that recognizing
the fact that the Respondent-tenant was in default
of payment of rent since the month of June, 1998,
the Division Bench had observed that the Appellant
would be at liberty to enforce his rights to the
arrear rentals before the appropriate forum. In
other words, according to Ms. Shobha, the Division
Bench recognized the right of the Appellant to
recover its dues from the Respondent-tenant, though
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not by means of a winding-up petition under Section
439 of the Companies Act, 1956.
11. On the other hand, Mr. Gaurav Mitra, learned
Advocate, appearing for the Respondent Company,
reiterated the submissions which had found favour
both with the learned Single Judge as also the
Division Bench of the High Court. It was
reiterated that the Appellant-landlord ought to
have included all the reliefs in the eviction suit
and having omitted to sue for the arrear rents, he
was no longer entitled to claim the same on account
of the bar imposed under Order 2 Rule 2 CPC. Mr.
Mitra also supported the view expressed by the
Division Bench of the High Court holding that a
winding-up proceeding was not a proper remedy for
the recovery of undetermined dues, particularly
when so many different criteria were involved in
ascertaining the amount due and/or payable by the
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Respondent-tenant to the Appellant-landlord.
Learned counsel submitted that the judgment and
order of the learned Single Judge and the Division
Bench of the Calcutta High Court did not require
any interference and the Appeal was, therefore,
liable to be dismissed.
12. Having considered the submissions made on
behalf of the respective parties, we are inclined
to accept Ms. Shobha’s submissions as far as the
provisions of Order 2 Rule 2 CPC are concerned.
Order 2 CPC deals with the frame of suits and the
various rules contained therein also refer to suits
for obtaining the reliefs of a civil nature. On
the other hand, a proceeding under Sections 433,
434 and 439 of the Companies Act, 1956, is not a
suit, but a Petition which does not attract the
provisions of Order 2 Rule 2 CPC, which deals with
suits. Ms. Shobha has submitted that the West
Bengal Premises Tenancy Act, 1956, does not make
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any provision for recovery of arrear rents and
provision has only been made under the provisions
of Section 17 for deposit of the arrear rents which
are admitted by the tenant at the time of entering
appearance and filing Written Statement in the suit
for eviction. Provision has also been made for
payment of such arrears in instalments, but there
is no provision for recovery of the arrear rents
for which a separate suit has to be filed, as has
been indicated by the Division Bench of the
Calcutta High Court.
13. Viewed in the context of what has been stated
hereinabove, we are unable to accept the second
limb of Ms. Shobha’s submissions. There are
various stages involved in deciding the amount of
rents payable and the periods of default and also
the amount to be ultimately calculated on account
of such default and the same cannot be tried in a
summary way, without adducing proper evidence. It
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is, therefore, necessary that such issues be heard
and tried in a properly constituted suit for
recovery of such dues, in which the issue relating
to the actual dues payable by the Respondent-tenant
to the Appellant-landlord can be decided.
14. We, therefore, set aside the findings of the
learned Single Judge, as also the Division Bench,
in regard to the application of the provisions of
Order 2 Rule 2 CPC to a winding-up proceeding under
the Companies Act that may be filed for recovery of
the dues payable by the Respondent-tenant to the
Appellant-landlord. We are, however, ad idem with
the Division Bench that the relief of the
Appellant-landlord, if any, in this case, will not
lie in a winding-up petition, but in a suit filed
for the said purpose, particularly when the said
relief is not available under the rent laws which
only deal with protection of tenants from eviction
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and the right of the landlords to recover the
tenanted premises on the grounds specified therein.
15. The Appeal is, therefore, allowed in part to
the aforesaid extent.
16. Having regard to the facts of the case, the
parties shall bear their own costs throughout.
………………………………………………………J. (ALTAMAS KABIR)
………………………………………………………J. (J. CHELAMESWAR)
New Delhi Dated:16.8.2012
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