T.T. Hamsa Koya v. Calicut Corporation and K.P. Unnikrishnan

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN** **MONDAY, THE 3RD DAY OF DECEMBER 2012/12TH AGRAHAYANA 1934** ## **AS.No. 385 of 1997 ( )** ## **-----------------------** **AGAINST THE ORDER/JUDGMENT IN OS.NO.270/1991 OF III ADDL.SUB COURT, KOZHIKODE** **....** ## **APPELLANT(S):(2ND DEFENDANT):** **----------------------------------------------------** **T.T.HAMSA KOYA, S/O.IMBICHAMMU, RESIYA MANZIL, MATHOTTAM, KOZHIKODE TALUK, KOZHIKODE DISTRICT.** **BY ADV. SRI.A.V.M.SALAHUDIN** ## **RESPONDENT(S):(PLAINTIFF AND 1ST DEFENDANT):** **-------------------------------------------------------------------------------** **1. CALICUT CORPORATION REPRESENTED BY ITS COMMISSIONER (NOW SECRETARY) NAGARAM AMSOM AND DESOM, KOZHIKODE TALUK.** **2. K.P.UNNIKRISHNAN, S/O.GOPALAN, RESIDING AT POYYERI HOUSE, PANTHEERANKAVU, KODAL AMSOM AND DESOM OF KOZHIKODE TALUK, KOZHIKODE DISTRICT.** - **R1 BY ADV. SRI.K.D.BABU,SC,KOZHIKODE CORPORATION R2 BY SRI.A.P.CHANDRASEKHARAN,SENIOR ADVOCATE BY ADVS. SMT.PRABHA R.MENON SRI.KPG.MENON R2 BY ADV. SRI.JAYESH MOHANKUMAR** **THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 03-12-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Kss** ## **P.N.RAVINDRAN, J.** **-------------------------------------A.S.No.385 of 1997** **--------------------------------------Dated this the 3[rd] day of December , 2012** ## **J U D G M E N T** The appellant is the second defendant in O.S.No.270 of 1991 on the file of the Court of the Subordinate Judge of Kozhikkode. The first respondent is the plaintiff and the second respondent is the first defendant therein. The suit instituted by the first respondent/plaintiff for recovery of the sum of Rs.53,464.95 being the licence fee payable in respect of a shop room belonging to the plaintiff for a period of 33 months commencing from 1.4.1988 and ending with 17.12.1990, with interest and costs, was decreed by the trial court. The second defendant has aggrieved thereby filed this appeal. The brief facts of the case are as follows: 2. The first respondent/plaintiff instituted O.S.No.270 of 1991 in the Court of the Subordinate Judge of Calicut for realisation of the sum of Rs.53,464.95 together with future interest thereon at 12% per annum from the date of suit till realisation from the defendants (the appellant and the second respondent herein). The plaintiff, the owner of the Corporation Bus Stand Building at Kozhikkode had entrusted room No.10 therein to the first defendant on a licence arrangement with the obligation to pay licence fee at the rate of Rs.1,403/- per AS No.385/1997 2 mensem, for the period from 10.1.1986 to 31.3.1988. Before the term expired, the first defendant submitted Ext.A1(a) petition dated 29.4.1987 to the Commissioner of Kozhikkode Corporation, requesting him to transfer the licence to the name of the second defendant. Since the licence fee was in arrears, no action was taken on the said application. It is stated that though notice was issued to both the defendants to appear for a hearing, they did not appear. While matters stood thus, the first defendant requested for renewal of the licence after remitting the arrears of licence fee and on his request, the licence arrangement was renewed for the period from 1.4.1988 to 17.12.1990 on payment of 10% enhanced licence fee. The plaint proceeds to state that even thereafter the first defendant committed default in payment of the licence fee and in executing agreement and therefore, the officers of the Corporation resumed possession of the shop room on 17.12.1990. It is stated that though notice was issued to the first defendant calling upon him to remit the arrears of licence fee till 17.12.1990 and to remove the goods kept in the shop room, the first defendant did not take steps in that regard. On these grounds the plaintiff sued for realisation of the sum of Rs.50,990/- being the licence fee @ Rs.1,543/- per mensem for the period from 1.4.1988 to 17.12.1990 and the sum of Rs.2545.95 being the interest on the said AS No.385/1997 3 sum calculated at the rate of 12% per annum, aggregating to Rs.53,464.95, together with future interest and costs from the defendants and their assets. 3. On receipt of summons, the first defendant entered appearance and filed a written statement dated 7.7.1992. He contended interalia that he had taken the shop room under a licence arrangement for the purpose of running a business, but he could not do so and therefore, the room was lying unoccupied. He stated that while matters stood thus, the second defendant approached him with a request to hand over the shop room to him for the purpose of running a travel agency and the second defendant submitted a letter [Ext.A1 (b)] requesting the Corporation to transfer the licence to him, that the said request was accepted and acted upon and therefore he is not liable to pay the licence fee from that date onwards. He contended that the second defendant is not his partner and that he and the second defendant have not conducted any partnership business therein and therefore, he is not liable to pay the licence fee as claimed. He also contended that if at all any amount is due towards licence fee, the remedy of the Corporation is to realise it from the second defendant. The second defendant filed a written statement dated 20.7.1992 wherein he contended that he is not liable to pay any amount to the AS No.385/1997 4 plaintiff as there is no privity of contract between him and the plaintiff. He also contended that the plaintiff has no cause of action against him and that no amount as stated in the plaint is available to be recovered from him. 4. Issues in the suit were framed on 23.9.1992 and thereafter the suit stood posted on 11.11.1992. On 11.11.1992 the suit was adjourned for trial to 19.1.1993. On 19.1.1993 the plaintiff was not present. There was also no representation on behalf of the plaintiff. Defendants 1 and 2 were present. The suit was therefore dismissed for default by order passed on 19.1.1993. Aggrieved thereby the plaintiff filed I.A.No.712 of 1993 on 20.2.1993 under Order IX rule 9 of the Code of Civil Procedure. On that application notice was ordered to the defendants on 29.3.1993 and the application was posted to 7.6.1993. There was no sitting on that day and the application was posted to 14.6.1993. Since steps were not taken to serve notice on the defendants, fresh notice was ordered to the defendants on 14.6.1993 with the hearing date fixed as 9.7.1993. On 9.7.1993, the second defendant entered appearance. Since the first defendant had not been served, the trial court directed fresh steps to be taken and posted the application to 2.8.1993. Since the notice issued to the first defendant was returned unserved, on 2.8.1993 the trial court again directed AS No.385/1997 5 fresh steps to be taken and posted the application to 26.8.1993 for return of the notice issued to the first defendant and for counter affidavit of the second defendant. On 26.8.1993 the plaintiff was absent and there was also no representation on behalf of the plaintiff. Since steps had not been taken to serve notice on the first defendant the trial court directed fresh steps to be taken and posted the application to 28.9.1993 for return of the notice issued to the first defendant and the counter affidavit of the second defendant. On 28.9.1993, at the request of the learned counsel for the plaintiff, the trial court adjourned the application to 21.10.1993 for return of the notice issued to the first defendant and the counter affidavit of the second defendant. On 21.10.1993 since steps had not been taken to serve notice on the first defendant, the application was adjourned to 11.11.1993. On 11.11.1993 it was adjourned to 2.12.1993 and thereafter to 1.1.1994. On 1.1.1994 there was no sitting and the application was adjourned to 22.1.1994. On that day the second defendant filed his counter affidavit to I.A.No.712 of 1993. Since steps had not been taken to serve notice on the first defendant, the trial court directed fresh notice to be issued to the first defendant and posted the application to 15.2.1994. Since steps had not been taken, when the application came up for hearing on 15.2.1994, the trial court AS No.385/1997 6 directed fresh steps to be taken to serve notice on the first defendant and the application was posted to 17.3.1994. On that day process fee was paid, and therefore, the trial court directed the application to be posted to 29.3.1994 to await return of the notice issued to the first defendant. On 29.3.1994 it was adjourned to 1.6.1994. On 1.6.1994 since notice had not been served on the first defendant, the trial court directed fresh steps to be taken to serve notice on the first defendant and posted the application to 24.6.1994. Since steps had not been taken when the application came up for hearing on 24.6.1994, the trial court adjourned the application to 21.7.1994 with a direction to take steps to serve notice on the first defendant. When the application came up for hearing on 21.7.1994, since steps had not been taken to serve notice on the first defendant, I.A.No.712 of 1993 was dismissed as against the first defendant. It was thereafter adjourned to 23.8.1994, later to 3.10.1994, 28.10.1994, 30.11.1994 and 11.1.1995. On 11.1.1995 it was adjourned to 15.2.1995 and thereafter to 22.3.1995. On that day I.A.No.712 of 1993 was heard and orders reserved. Orders were passed on 25.3.1995 allowing I.A.No.712 of 1993. The order reads as follows: This is an application under Order IX rule 9 of the Code of Civil Procedure to restore the suit to file which was dismissed for default on 19.1.1993. AS No.385/1997 7 The suit is for recovery of license fee due from the defendants. According to the petitioner the counsel of the plaintiff was in another court when the suit listed to 19.1.1993 was called. It is stated that the factum of listing was not noticed by the counsel. It is also stated that the name of the counsel was wrongly shown in the special list published. The second defendant alone filed counter. No serious contention is rasied in the counter except denying the allegations. It has to be noted that wrong showing of the name of the plaintiff's counsel should not depriving the plaintiff to seek remedy. Hence there is sufficient ground made out, accordingly the petition allowed. 5. The suit thereafter stood posted for trial to 31.3.1995 and on that day it was adjourned to 20.6.1995. On that day there was no sitting and the suit was adjourned to 15.7.1995. On 15.7.1995, it was submitted on behalf of the plaintiff that it has no oral evidence to adduce.The file produced by the plaintiff was marked by consent as Ext.A1. After the second defendant was examined as DW-1, evidence was closed on 15.7.1995 and the suit was posted to 18.7.1995 for hearing. On 18.7.1995 both sides were heard. By judgment delivered on 21.7.1995, the suit was decreed allowing the plaintiff to recover the sum of Rs.53,463.95 with interest @ 12% per annum from the date of suit till realisation from the defendants. The first defendant thereupon filed I.A.No.3575 of 1995 to correct the decree and judgment. By AS No.385/1997 8 order passed on 28.2.1996, the trial court allowed the application and amended the decree and judgment by clarifying that the suit continues to be dismissed as against the first defendant and that the decree is only against the second defendant. The second defendant has, aggrieved by the amended decree and judgment dated 28.2.1996 in O.S.No.270 of 1991, filed this appeal. 6. I heard Smt.Dhanya, learned counsel appearing for the appellant, Sri.K.D.Babu, learned counsel appearing for the first respondent and Sri.Jayesh Mohankumar, learned counsel appearing for the second respondent. Smt.Dhanya, learned counsel appearing for the appellant contended that as the suit stood dismissed against the first defendant on 19.1.1993 and I.A.No.712 of 1993 filed by the plaintiff to restore the suit to file was dismissed as against the first defendant on 21.7.1994, the trial court erred in decreeing the suit as against the second defendant. The learned counsel contended that as the application filed by the plaintiff under Order IX rule 9 of the Code of Civil Procedure to restore the suit stood dismissed as against the first defendant on 21.7.1994, the trial court erred in allowing I.A.No.712 of 1993 and in setting aside the order dismissing the suit for default. She contended that the order passed by the trial court on 21.7.1994 on I.A.No.712 of 1993 is illegal and is liable to be set aside. AS No.385/1997 9 The learned counsel for the appellant also contended that as the suit stood dismissed against the first defendant who according to the Corporation was the licensee of the shop building, the trial court could not have passed a decree against the second defendant holding him liable for the plaint claim. The learned counsel also assailed the finding entered by the trial court on issues 2 to 6 and contended that the evidence on record does not lend support to the finding that both the defendants are liable for the plaint claim. The learned counsel for the appellant also invited my attention to the decision of a learned single Judge of the High Court of Orissa in **Ratnakar Ray** v. **Kulamoni Roy** (AIR 1951 Orissa 266) in support of her contention that I.A.No.712 of 1993 could not have been allowed in part as against the second defendant. 7. Per contra, Sri.K.D.Babu, learned counsel appearing for the first respondent contended that the mere fact that the suit stood dismissed on 19.1.1993 and I.A.No.712 of 1993 filed by the plaintiff to set aside the order dismissing the suit for default stood dismissed as against the first defendant on 27.1.1994, is not a reason to hold that the suit could not have been proceeded with as against the second defendant and therefore, no exception can be taken to the order passed by the trial court on 21.7.1994 restoring the suit to file. The AS No.385/1997 10 learned counsel for the first respondent also contended that the appellant who did not challenge the order dated 25.3.1995 allowing I.A.No.712 of 1993, cannot now contend, as the said order has attained finality, that the said order should not have been made or that I.A.No.712 of 1993 should have been dismissed. The learned counsel also contended relying on Ext.A1(a) petition dated 29.4.1987 submitted by defendants 1 and 2, Ext.A1(c) petition dated 19.12.1987 submitted by the second defendant and Ext.A1(d) office note dated 11.5.1988, that the second defendant was in occupation of the premises as a partner of the first defendant and therefore, he cannot be heard to contend that he was not in occupation of the premises or that the liability to pay the licence fee is that of the first defendant. 8. I have considered the submissions made at the Bar by learned counsel appearing on either side. I have also gone through the pleadings and the materials on record. The case set out by the plaintiff is that the first defendant to whom shop room No.10 was entrusted under a licence arrangement had committed default in payment of the licence fee, that at his request, on payment of arrears of licence fee for the period ending with 31.3.1988, the licence was renewed for the period from 1.4.1988 to 31.3.1990, but he did not execute an agreement and pay the enhanced licence fee and thereupon, an order AS No.385/1997 11 was passed evicting him from the premises and it was implemented on 17.12.1990 by taking over possession from the second defendant and an employee who was found in the premises. It was also alleged in the plaint that the second defendant is a partner of the first defendant. The second defendant had in Ext.A1(a) petition dated 29.4.1987 submitted to the Commissioner of Kozhikkode Corporation requested for transfer of the licence to his name. In that petition the first defendant had stated in categorical terms that he has entrusted the shop to the second defendant and requested that the licence may be transferred to his name. The first defendant had in Ext.A1(a) representation stated that the second defendant is his partner and that he and the second defendant are running the establishment known as “Daya Travels and Agencies”. Ext.A1(b) notice dated 4.1.1988 discloses that on Ext.A1(a) application an enquiry was proposed to be held on 7.1.1988 and that it was issued having regard to the request made by the second defendant in Ext.A1(c) letter dated 19.12.1987. Ext.A1(b) notice also discloses that the first defendant was called upon to remit the arrears of licence fee for the period ending with 31.3.1990. The plaintiff has in paragraph 3 of the plaint averred in positive terms that arrears of licence fee for the period ending with 31.3.1988 was paid and the licence was again renewed in the name of AS No.385/1997 12 the first defendant for the period from 1.4.1988 to 31.3.1990. As stated earlier, a reading of the plaint discloses that the licensee was the first defendant and not the partnership firm of which he was a partner. Therefore the mere fact that the second defendant had been put forward as a partner in Ext.A1(a) application dated 29.4.1987 filed by the parties for transfer of the licence in the name of the second defendant is by itself not a reason to hold that the licence was transferred to the second defendant, in the absence of any averment on the side of the plaintiff or evidence to prove the fact that the request in Ext.A1(a) application was granted. The plaintiff has for reasons best known to it, not produced any document to show that the request made in Ext.A1(a) petition dated 29.4.1987 was granted and the licence was transferred in the name of the second defendant. On the other hand, the case set out by the plaintiff is that though the licence was renewed in favour of the first defendant for the period from 1.4.1988 to 31.3.1990 he did not execute a licence arrangement and continued in occupation without paying the licence fee and that ultimately the Corporation took a decision to cancel the licence and to resume possession and that possession was resumed on 17.12.1990. 9. From the pleadings and the materials on record, it has to be necessarily held that the licensee was the first defendant and not the AS No.385/1997 13 second defendant. Though the first defendant had along with Ext.A1(a) petition dated 29.4.1987 produced a copy of the partnership deed, the said document has not been marked. That apart, as stated earlier, the plaintiff has not recognised the second defendant or the partnership firm as the licensee. The consistant case of the plaintiff is that the first defendant is the licensee, that the licence was renewed in his name on his discharging the arrears, that he did not execute the licence arrangement or pay the licence fee though he continued to be in occupation and therefore, a decision was taken to evict him from the premises and he was evicted and possession taken on 17.12.1990. Though in chief examination the second defendant examined as DW1 had deposed that room No.10 of Kozhikode Bus Stand Building was not given to him under a licence arrangement, in cross-examination he had admitted the fact that he was running a travel agency known as Daya Travel Agency in room No.10 of Kozhikode Bus Stand Building in partnership with the first defendant. He had also admitted the fact that he had submitted Ext.A1(a) application dated 29.4.1987 for transfer of the licence to his name. He had also admitted the fact that the officials of the Corporation resumed possession of the building on 17.12.1990 and sealed it. It is thus evident that though the plaintiff has not proved that the second defendant was running the business in AS No.385/1997 14 partnership with the first defendant, the second defendant has in categorically terms admitted the fact that he was running the business in room No.10 in partnership with the first defendant and that possession of the shop room was taken over by the Corporation on 17.12.1990. The presence of the second defendant in the shop room and his occupation are thus made out. 10. Then the only question is whether he could be held liable to pay the licence fee in the absence of a formal license arrangement executed by him or a decision by the Corporation transferring the licence to his name. The second defendant was admittedly in occupation of the premises. He had admitted the fact that he was running a business therein along with the first defendant as his partner. He has thus admitted the fact that he was in occupation of the premises. Therefore, notwithstanding the fact that a formal licence arrangement had not been entered into between the plaintiff and the second defendant, as the second defendant was in occupation of the premises belonging to the Corporation, I am of the opinion that the Corporation was entitled to recover from him damages for use and occupation. Therefore the mere fact that a formal license arrangement had not been entered into between the Corporation on the one hand and the second defendant on the other or between the Corporation AS No.385/1997 15 and defendants 1 and 2, is not a reason to hold that the second defendant cannot be held liable to pay damages for use and occupation. The court below was therefore perfectly right in holding that the second defendant is also liable for the plaint claim. 11. That takes me to the question whether in view of the fact that suit stood dismissed against the first defendant on 19.1.1993 and I.A.No.712 of 1993 to set aside the order dismissing the suit for default stood dismissed as against the first defendant on 21.7.1994, the plaintiff is disentitled from proceeding with the suit. The suit was dismissed on 19.1.1993 for non appearance of the plaintiff on that day. Both the defendants were present on that day. While the first defendant had contended that he is no way liable for the plaint claim and that if at all any amount is due, it is due from the second defendant, the second defendant had contended that he is in no way liable for the plaint claim. When the application to set aside the order dismissing the suit for default came up for consideration on 21.7.1995, on noticing that in spite of repeated directions, notice had not been served on the first defendant, the court below dismissed the application as against the first defendant. The order passed by the court below on 21.7.1994 dismissing I.A.No.712 of 1993 has attained finality. The plaintiff has not challenged that order. However, AS No.385/1997 16 notwithstanding that order, the suit was initially decreed as against both the defendants. The decree and judgment were amended by order passed on 28.2.1996 on I.A. No.3575 of 1995 filed by the first defendant. In the nature of the claim made in the plaint and the defence put forward by the defendants and having regard to the relief prayed for in the plaint, the trial court could not have in my opinion, set aside the order dismissing the suit for default (as was done in the instant case on 21.7.1994 when I.A. No.712 of 1993 was allowed) as against the second defendant alone. A learned single Judge of the Orissa High Court considered a similar issue in **Ratnakar Ray v. Kulamoni Roy** (AIR 1951 Orissa 266) and held as follows: _4. So far as the present order is concerned, it is clear, however, that there is nothing to show that defts.1, 2, 8 and 12 did not appear on the date fixed. It is conceded by Mr.Misra frankly enough that very rightly as it appears from the materials that defts. 1, 2, 3 and 12 were not called out by the Ct. at the time when the suit was taken up for hearing. In these circumstances, it is difficult to say that they did not appear. Besides the statement of Mr.Misra we do not find anything on record to show that these defts. had been called upon and that either they did not respond or refused to take any steps in the case or anything of the kind. Appearance does not mean physical appearance by the defts. themselves or their pleader. If appearance had any meaning it is this that the party concerned must be in readiness to see to the progress of the suit or the defence in such a manner as he thinks beat in his own interest. The defts. may have nothing further to do according to their particular line of defence until the actual hearing of the suit begins, which in fact, had never begun. As I have already said that to the knowledge of the Ct. these defts. had never_ AS No.385/1997 17 _been set down ex parte. Under the circumstances and on the facts it is not clear that the order of dismissal as against these defts. can be taken to be one under Order 9, Rule 8. Conceding that this order was against them as one under Order 9, Rule 3, the pltfs. must make it clear whether they want to have the order of restoration effectively passed against them. That they do so want appears from their own petn. in which they implead them as opposite parties. If the suit had not been set down ex parte against them and if they were going to be bound by the order of restoration that had been passed, I do not understand how any order affecting them could be passed in their absence. Some support is prayed in aid from the absence of a provision in the terms or the like of sub-r(2) of R.9 of the Order from R.4. But that does not necessarily mean that in any default under Order 9, Rule 3 restoration can be had in the absence of the opposite parties. There may be a case in which deft, has not at all appeared or having appeared has not filed any defence. In such cases it is quite possible that the Ct in its discretion, may say that no notice is necessary to be served upon him in the matter of restoration, as he must be served again after the suit is restored to its file. But what about the case in which the deft, had entered into contest, and had put the pltf. to proof of his case? In these cases certainly the dismissal pltf's suit, be it under whatever provision of the Code, gives rise to a valuable right in his favour. It is difficult to conceive that they can be deprived of that right without being heard. It may be said even without restoration the pltf. has a right to fresh suit on the same cause of action. It may be so, but that does not answer the deft's cause. It may be for the purpose of a fresh suit lot of money is necessary by way of payment of court fees and the pltf. may not be able to institute a fresh suit. There is always many a slip between cup and lip. Under the circumstances, the right to prevent restoration of the suit is no doubt a valuable right._ 12. It was held that in view of sub rule (2) of order IX of the Code of Civil Procedure, the application for restoration of the suit which AS No.385/1997 18 was dismissed for default could not have allowed without notice to the defendants who had appeared on the date on which the suit stood dismissed for default. I am in respectful agreement with the opinion of the learned single judge in Ratnakar's case referred to above. In the instant case, I.A.No.712 of 1993 was dismissed as against the first defendant as per order passed on 21.7.1994 for the reason that the first defendant had not been served. The court below could not have in the absence of the first defendant allowed I.A.No.712 of 1993 and restore the suit to file. The order passed by the court below in I.A.No.712 of 1993 on 21.7.1994 setting aside the order dismissing the suit for default cannot therefore in my opinion, be sustained. 13. I shall next consider the question whether it is open to the appellant to challenge the validity of the order passed by the court below on 21.7.1994 on I.A.No.712 of 1993 in this appeal. The question whether interlocutory orders passed in a suit can be challenged in an appeal from the decree was considered by the Apex Court in **Sathyadhyan Ghosal and Others v. Smt.Deorajin Debi and Another** (AIR 1960 SC 941) Referring to sub section (2) of section 105 of the Code of Civil Procedure, the Apex Court held that an interlocutory order which had not been appealed from either because no appeal lay or even though an appeal lay an appeal was not taken AS No.385/1997 19 can be challenged in appeal from the final decree or order. In the light of the authoritative pronouncement of the Apex Court on the point, the mere fact that the second defendant had not challenged the order passed by the court below on 21.7.1994 on I.A.No.712 of 1993 restoring the suit to file, notwithstanding the fact that the application stood dismissed as against the first defendant by order passed on 20.2.1993, will not in my opinion stand in the way of the second defendant from canvassing the correctness of that order in this appeal filed from the decree in the suit. For the reasons stated above, I allow the appeal, reverse the decree and judgment of the Court of the Subordinate Judge of Kozhikode in O.S.No.270 of 1991 and dismiss the suit. No costs. ## **P.N.RAVINDRAN,** **(JUDGE)** rkc/vps AS No.385/1997 20 AS No.385/1997 21