2006 Supreme(Cal) 371
High Court Of Calcutta
Bhaskar Bhattacharya, Debasish Kar Gupta
JOYDEB CHANDRA DEY - Appellant
Versus
SUKUMAR CHANDRA DEY - Respondent
C. S. 302 Of 1997
Decided On : 06/28/2006
A.DUTTA, ABHRAJIT MITRA, AJOY KUMAR CHATTERJEE, DIPAK KUMAR BASU, Jayanta Kumar Mitra, PRATAP CHATTERJI, SAKYA SEN
A court cannot pass a decree on the basis of a valuation report in a suit for declaration and injunction, where no written statement or counterclaim has been filed by the defendants.
Headnote:
DECREE ON COMPROMISE - SUIT FOR DECLARATION AND INJUNCTION - DEFENDANTS' APPLICATION FOR DECREE ON BASIS OF VALUATION REPORT - NO WRITTEN STATEMENT OR COUNTERCLAIM - COURT CANNOT PASS DECREE - ORDER 23 RULE 3 OF THE CODE OF CIVIL PROCEDURE.
Fact of the Case:
Plaintiffs filed a suit for declaration, permanent injunction, and mandatory injunction against seven defendants. No written statement was filed by the defendants, but a valuer was appointed in interlocutory proceedings, and the valuation report was accepted. The defendants then filed an application for a decree on the basis of the valuation report, which was granted by the trial court.
Finding of the Court:
The court held that the trial court erred in passing a decree on the basis of the valuation report in a suit for declaration and injunction, where no written statement or counterclaim had been filed by the defendants. The court noted that, under Order 23 Rule 3 of the Code of Civil Procedure, a suit can be compromised only on the basis of a lawful agreement in writing, signed by the parties. In this case, there was no such agreement, and the defendants had not filed any counterclaim.
Issues: 1. Whether a court can pass a decree on the basis of a valuation report in a suit for declaration and injunction, where no written statement or counterclaim has been filed by the defendants? 2. Whether a suit can be compromised on the basis of a past agreement, not even ratified after the institution of the suit?
Ratio Decidendi: 1. A court cannot pass a decree on the basis of a valuation report in a suit for declaration and injunction, where no written statement or counterclaim has been filed by the defendants. 2. A suit can be compromised only on the basis of a lawful agreement in writing, signed by the parties. A past agreement, not even ratified after the institution of the suit, cannot be the basis for a compromise.
Final Decision: The court allowed the appeal and set aside the decree passed by the trial court. The matter was remanded back to the trial court for disposal of the suit in accordance with the provisions of the Code of Civil Procedure.
( 1 ) THIS Letters Patent appeal is at the instance of the plaintiffs in a suit for declaration, permanent injunction and mandatory injunction and is directed against the judgment and decree dated 8th March, 2002, passed by a learned Single Judge thereby passing a decree in terms of prayer (a) of an application filed by the defendant Nos. 1 and 2 by accepting the report given by a valuer appointed in the proceedings.
( 2 ) THE plaintiffs, six in number, filed a suit being Suit No. 302 of 1997 before the Original Side of this Court against seven different defendants thereby praying for the following relief:"a) Perpetual injunction restraining the defendants from taking part in administration of the company and/or deal with any of the assets and properties of the company. b) Perpetual injunction restraining the defendant Nos. 1 and 2 from holding themselves out as directors or officers of the company. c) Mandatory injunction direction the defendant Nos. 1 and 2 to render true and faithful accounts of the dealings and transactions entered into by them in relation to the defendant No. I/company and decree for such sums as may be found due and payable upon such enquiry. d) Mandatory injunction directing the defendant Nos. 1 and 2 to hand over all books and records of the company to the plaintiffs and especially the plaintiff No. 1. e) Declaration that the defendant Nos. 1 and 2 have ceased to be directors of the company. f) Declaration that the shareholding pattern of the company is as mentioned in paragraph 7 hereinabove. g) An administrator be appointed for the purpose of calling a general meeting for transacting, inter alia, the following business : i) Election of Directors; ii) Reconstruction of the Books of Accounts; iii) Completion of necessary statutory and legal formalities, h) Perpetual injunction restraining the defendants from obstructing the smooth running of the company as also functioning of the plaintiffs as majority shareholders of the company and the functioning of the plaintiff no. 1 as Managing Director of the company : i) Receiver; j) Injunction; k) Costs; l) Such further or other reliefs. "
( 3 ) IT appears from record that in the suit, no written statement was filed by either of the defendants but on the basis of interlocutory applications, joint-receivers were appointed over the suit-property and in course of interlocutory proceedings, several applications were filed including one for appointment of a valuer for assessing the valuation of the subject-matter of the dispute. The valuer appointed by the Court gave a report and an appeal was preferred against such report of the valuer but the said appeal was dismissed and the valuation-report given by the valuer was accepted by the Appellate Court.
( 4 ) SUBSEQUENTLY, Sukumar Chandra Dey, the defendant No. 1 and Basudeb chandra Dey, the defendant No. 2 of the said suit, filed an application before the learned Trial Judge thereby praying for the following relief:a) A decree be passed on the basis of the report of the said Surveyor and Valuer which has since been confirmed by the Hon'ble Appeal court. b) Mr. S. N. Pal, be appointed as Receiver to take over the possession of all the assets and properties immediately as mentioned in his reports dated 26th February, 2000 and 13th March, 2000. c) Mr. S. N. Pal as Receiver be directed to allot the said properties and assets to the parties in accordance with an order in compliance with the said report. d) Ad interim orders in terms of prayers (a), (b) and (c) above. e) Such other and further order or orders be passed and/or direction or directions be given as to this Hon'ble Court may deem fit and proper. f) Costs in this application be paid by the plaintiffs.
( 5 ) ULTIMATELY, the learned Trial Judge, by the judgment and decree impugned herein, has allowed such application thereby directing that there should be a decree in terms of prayer (a) mentioned above in the application filed by the d