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IN THE HIGH COURT OF CALCUTTA
Soumen Sen, Siddhartha Roy Chowdhury, JJ.
Tata Chemicals Limited - Appellant
Versus
Kshitish Bardhan Chunilal Nath And Others - Respondent
APO 128 of 2021 & IA. No. GA 1 of 2021 with CS. No. 50 of 2019 with APO. No. 129 of 2021 & IA. No. GA 1 of 2021 with CS. No. 51 of 2019
Decided On : 28-09-2022
The Court held that the claim of the appellant is not an unascertained sum and sounds in damages. The Court also held that the appellant is entitled to some protection till the suit is decided.
Fact of the Case:
Tata Chemicals Limited (appellant) filed two suits for recovery of money against Kshitish Bardhan Chunilal Nath (respondent No. 1) and Ashok Kumar Saha (respondent No. 1) for excess credit notes issued in favor of their dealers. The appellant claimed that the respondents had received excess credit notes amounting to Rs.31.77 crores, which was in excess of the credit to which they were entitled. The respondents contended that the claim was an unascertained sum and sounded in damages, and that no order of injunction could be granted. The trial court vacated the interim order of injunction initially passed in favor of the appellant.
Finding of the Court:
The Court held that the claim of the appellant is not an unascertained sum and sounds in damages. The Court also held that the appellant is entitled to some protection till the suit is decided.
Issues: Whether the claim of the appellant is an unascertained sum and sounds in damages.
Ratio Decidendi: The Court held that the claim of the appellant is not an unascertained sum and sounds in damages. The Court also held that the appellant is entitled to some protection till the suit is decided. The Court relied on the following principles: * An injunction is a judicial proceeding operating in personam where-under a party is required to do, or refrain from doing, any particular act. * The discretion of the Court to grant a temporary injunction is subject to the fulfilment of the following considerations: * existence of a prima facie case as pleaded, necessitating protection of plaintiff's rights by issue of a temporary injunction; * when the need for protection of plaintiff's rights is compared with or weighed against the need for protection of defendant's rights or likely infringement of defendant's rights, the balance of convenience tilting in favour of plaintiff; and * clear possibility of irreparable injury being caused to plaintiff if the temporary injunction is not granted. * In order to secure the ends of justice, the court has inherent jurisdiction to issue temporary injunctions in circumstances which are not covered by the provisions of Order 39 CPC.
Final Decision: The Court allowed the appeals and restored the interim order passed on July 17, 2019. The Court also confirmed the interim order passed at the time of admission of the appeal on April 30, 2021.
JUDGMENT
Soumen Sen, J. - By consent of the parties, both the appeals and the applications are taken up together for consideration in view of the similarity of issues involved in both the appeals and applications and are disposed of by this common judgment.
2. TATA Chemicals Limited is the appellant in both the appeals.
3. In APO 128 of 2021, respondent No. 1 is a partnership firm of which respondents Nos. 2 to 4 are partners and respondent No.5 was the Deputy Manager (Accounts) of the Appellant.
4. In APO 129 of 2021, respondent No.1 Ashok Kumar Saha is the sole proprietor of Ashok Sales Agency and Respondent No. 2 was the Deputy Manager (Accounts) of the Appellant. Deputy Manager (Accounts) of the appellants is the common respondent in both the appeals.
5. For the sake of convenience, TATA Chemicals Limited shall be referred to as "TATA," Kshitish Bardhan Chunilal Nath as 'KBCN', Ashok Kumar Saha as ASA and Sudip Kumar Singh shall be referred to as 'SKS'.
6. The appellant is aggrieved by the order dated 16th March, 2021 by which the interim order of injunction initially passed on July 17, 2019 restraining the respondents from transferring, alienating and/or creating any third party interest in respect of the properties mentioned in annexure "M" in GA No. 725 of 2019 and Annexure "R" in GA No. 733 of 2019 respectively was vacated.
7. The interim order was vacated at the final hearing of the injunction application by a subsequent bench on the ground that the claim of the plaintiff in both the matters is for an uncertained sum and is essentially a claim on account of damages for the alleged wrongdoing of the defendants in its dealings and transactions with the plaintiff and for such an un- ascertained and un-liquidated amount for damages no order of injunction could be granted.
8. TATA has assailed this order dated 16th March, 2021 and has prayed for the restoration of the order dated 17th July, 2019.
9. Before we consider the respective submissions made on behalf of the parties, it is necessary to briefly state the facts.
10. We first briefly summarize the facts in APO 128 of 2021.
11. TATA is, inter alia, engaged in manufacturing and marketing of chemicals and fertilizers. TATA has a wide network of dealers throughout the country to facilitate the sale of its products. KBCN and ASA were distributors/dealers of TATA and had a long standing business relationship.
12. TATA, from time to time as a part of their sales promotion, had introduced and extended incentives and/or benefits to its dealers by way of discounts and/or rebates by issuing price circulars in respect of bulk fertilizers. In both the suits the appellant claims that by reason of wrongful, collusive and illegal acts of the dealers in connivance with SKS the plaintiff has suffered huge losses and damages to the extent of illegal credit obtained by the dealers in their dealings with the plaintiff/appellant on account of sale and purchase of fertilizers supplied during the financial year 2014-15 to 2017-18. The appellant has quantified such loss and damage in both the suit representing the illegal credit obtained by both the dealers during the aforesaid period.
13. The appellant has stated that in order to promote sales it used to give rebates/discounts marked as 'credit' to KBCN. The amount of the rebate was predetermined in price circulars issued by the appellant from time to time.
14. Price circulars are notified and supplied to the sales manager as and when they are issued by the appellant who then informed the sale executives of the relevant regions of such price circulars. The appellant has never given any extra discount or rebates in any other mode or manner other than those clearly specified in the price circulars. SKS, the respondent no.5, was the Deputy Manager (Accounts) of the appellant who used to calculate and extend the benefit of rebate/discount to KBCN. The credit notes were issued based on price circulars. All the transactions were managed through the Systems Appl
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