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Whether Judgment of High Court shall remain Precedent if said Judgment is Stayed by Supreme Court?

IN THE HIGH COURT OF CALCUTTA

G.A. No. 102 of 2018 and C.S. No. 152 of 2017

Decided On: 30.01.2019

Bahubali Promoters Private Limited

Vs.

Shyam Sel & Power Limited

Hon’ble Judges/Coram: Moushumi Bhattacharya, J.

Citation: 2019(1) RCR(Rent) 386

1. This is an application filed by the defendant for stay of the suit till the disposal of the appeal filed by the defendant before the Division Bench of this Court by which the execution proceedings was directed to be stayed unconditionally for a period of two weeks and the defendant was directed to deposit the occupational charges of the suit premises in a certain manner directed by the Appeal Court.

2. The background of the present suit is this. The plaintiff filed an Ejectment suit in 2010 before the learned City Civil Court for a decree of recovery of possession against the defendants (Shyam Engineering Company Pvt. Ltd., defendant no. 1 and Shyam Sel Limited defendant no. 2) in connection with an office space on the first floor of premises situated at Ganesh Chandra Avenue, Kolkata. The plaintiff’s case was that the defendant no. 1 tenant had sub-let the suit premises to the defendant no. 2. The defendants contested the suit taking the defence that the defendant no. 1 was a lawful tenant. By a final judgment and decree dated 22nd September 2015, the learned City Civil Court held that the defendant no. 1 cannot be accepted as a tenant and is a sub-lessee without the consent of the plaintiff landlord. The defendant no. 2 (before the City Civil Court) preferred an appeal from such decree before this court together with a stay of population of the judgment. By an order dated 13th July 2016, the Division Bench of this court was pleased to direct that all further proceedings in the execution case would remain stayed unconditionally for a period of two weeks subject to the defendant depositing arrear rent up to June 2016, at the rate of last paid rent together with decretal costs in the executing court.

3. In July 2017, the plaintiff filed the instant suit for recovery of money on account of mesne profit along with interest from 8th July 2014 till 7th July 2017. As part of the cause of action pleaded, the plaintiff stated that the defendant is continuing in possession of the suit premises as a trespasser and the defendant has no right to remain in occupation of the suit premises. The plaintiff filed an application for appointment of a Commissioner to determine the mesne profit which was dismissed by an order dated 17th July 2017 wherein it was observed that the decree passed by the learned City Civil Court had been stayed in the appeal and the outcome of the suit would depend upon the findings of the Appellate Court.

4. The instant application was filed by the defendant immediately thereafter for stay of the suit. It should be stated that the defendant before this court was earlier known as Shyam Sel Ltd., the defendant no. 2 before the Ld. City Civil Court.

5. Mr. Jishnu Chowdhury and Mr. Subhashish Sengupta learned counsel for the defendant/applicant submits that the instant suit is liable to be stayed under Section 10 of the Code of Civil Procedure, 1908 as the suit is hit by the principles of Res-Subjudice. According to him, the issue before this court in the instant suit is directly and substantially in issue in a previously instituted suit between the same parties under the same title where such suit is pending in the same and/or any other court having jurisdiction. Counsel submits that the status of the defendant as a tenant/sub-tenant without the consent of the landlord which was decided by the learned City Civil Court was under consideration before the Division Bench of this court in appeal. Counsel emphasises that an appeal is a continuation of the suit and relies on the definition of mesne profits under the CPC and contends that mesne profit applies to a person who is in wrongful possession of the property. Therefore, to determine the mesne profit (as claimed by the plaintiff in the instant suit), the first and foremost question which would have to be decided is whether the defendant is in wrongful possession of the suit premises. In the instant case, the learned City Civil Court has come to a conclusion that the defendant is liable to be evicted which was stayed by the Division Bench subject to the defendant paying occupational charges under the provisions of the CPC. According to counsel, it is clear that the decision on the issue of tenancy would depend upon the final adjudication of the appeal before the Division Bench of this Court. Counsel urges that the suit should not proceeded with since there may be a conflict of decisions and further that a lower judicial forum should defer to the decision of a higher judicial forum. Counsel relies on Sagar Shamsher Jung Bahadur Rana & Anr. Vs. The Union of India & Ors. reported in MANU/DE/0073/1978 : AIR 1979 Delhi 118, for the proposition that an appeal is a continuation of the suit. He reiterates that the findings of the learned City Civil Court are not pending on this court and that the issues/grounds of appeal are directly and substantially identical with the present suit. In such circumstances, counsel seeks stay of the hearing of the instant suit.

6. Mr. Rudraman Bhattacharyya, learned counsel appearing for the plaintiff and opposing the application submits that the previous suit filed before the learned City Civil Court was a suit for ejectment of the defendant from the premises in question and had been decreed in favour of the plaintiff on 22nd September, 2015. The defendant filed an appeal from the said decree in which a conditional order of stay was passed by the appeal court only in respect of the stay of execution proceedings. Counsel urges that the provisions of Section 10 of the CPC cannot apply to the instant case since the matter in issue in this suit is not directly of substantially in issue in the previous suit as the cause of action of eviction is entirely different from the cause of action for mesne profits. Counsel relies on Bhartia Electric Steel Co. Ltd. Vs. Buddha Dev Bose reported in MANU/WB/0462/2005 : (2006) 2 CHN 1 in which a Division Bench of this court held that since the earlier suit had been decreed only on the ground of default in payment of rent, the appellant (defendant in that case) continued to be a tenant till the passing of a decree and the cause of action for claiming mesne profit did not accrue when the suit was filed for eviction as envisaged under Section 10 of the CPC. Counsel relies on Santosh Kumar Ghosh and Ors. Vs. Sachindra Nath Mukherjee and Anr. reported in MANU/WB/0353/1958 : 62 CWN 759 wherein it was held that an obligation to pay mesne profits arises from a cause of action which is completely different form the obligation to restore possession of the immovable property to the rightful owner. Counsel relies on a decision of the Kerala High Court in Food Corporation of India Vs. Mohammed Kunhi reported in MANU/KE/0549/2008 : (2009) 3 KLT 627 for the proposition that “matter in issue” under Sections 10 and 11 of the CPC can be adopted while interpreting the expression “some matter in issue” in Section 14 of the Limitation Act. Counsel further relies on Pijush Kanti Chowdhury Vs. State of West Bengal & Ors. reported in MANU/WB/0077/2007 : (2007) 3 CHN 178 and Niranjan Chatterjee and Ors. Vs. State of West Bengal and Ors. reported in MANU/WB/0141/2007 : (2007) 3 CHN 683, both Division Bench decisions of this court wherein it was held that an order of stay in a pending appeal (before the Supreme Court in both the decisions) does not amount to any declaration of law but is only binding upon the parties to the said proceedings. The observations of the Supreme Court in Shree Chamundi Mopeds was considered in the latter in relation to the effect of a interim order staying the operation of an order under challenge and the distinction between quashing of an order and stay of operation of an order.

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7. I have considered the submissions of counsel appearing for the defendant (the applicant who is asking for a stay of suit) and the plaintiff. The point for adjudication in the instant case is whether a subsequent suit for mesne profits can be stayed under Section 10 of the CPC on the ground that the relief sought therein is a matter directly and substantially in issue in a previous suit for eviction between the same parties. For answering this question, four documents would be of relevance. First, the previous suit filed in the learned City Civil Court; the judgment in the previous suit and the order passed by the Division Bench of this court on 13th July, 2016, the present suit filed in this court by the plaintiff/respondent. Let us now consider these documents.

8. The plaint in the earlier suit before the City Civil Court describes the suit as one for recovery of possession with a claim for a decree for recovery of khas possession of the suit premises against the defendant. No other relief has been claimed in the earlier suit. The cause of action pleaded for claiming the relief is a notice issued under Section 6 (4) of the West Bengal Premises Tenancy Act, 1997 for vacating and delivery up of the suit premises. The plaint states that the defendant no. 1 is a defaulter in payment of rent and had sub-let the suit premises to the defendant no. 2 without the consent of the plaintiff. By the judgment of the learned Judge, XIth Bench of the City Civil Court (the suit was decreed in favour of the plaintiff) on 22nd September, 2015, holding that the defendants are liable to be evicted and would have to deliver peaceful khas possession of the suit premises to the plaintiff within a certain time frame, failing which the plaintiff would be at liberty to put the decree in the execution. The reason for the decision was that the defendant no. 1 illegally sub-let the premises to the defendant no. 2 and that the notice of termination upon the defendants was legal and valid. The plaintiff thereafter filed the present suit in July 2017 for a decree for mesne profit alleged to be receivable by the plaintiff from the defendant calculated from 8th July, 2014 together with interest at 18% p.a on the principal amount. The cause of action pleaded in the plaint is that the defendant is a trespasser who is continuing in possession of the suit premises together with the fact and that the defendant has earned or could have earned a certain sum of money per diem by reasons of such occupation. The outcome of the earlier suit in the learned City Civil Court as well as the order passed in appeal by the Division Bench of this court, have been disclosed in the plaint.

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9. In the appeal filed from the decree passed by the City Civil Court, a Division Bench of this court by an order dated 13th July, 2016 was pleased to direct stay of all further proceedings in the Ejectment Execution Case No. 1 of 2016 filed by the plaintiff which was pending before the Registrar, City Civil Court. The relevant portion of the order passed by the Division Bench is required to be set out;

“After hearing the learned counsel appearing for the parties and after considering the materials on record, we are of the view that justice will be sub-served if we pass a conditional order of stay of further proceedings of the said execution case till the disposal of the appeal.

We, thus, direct that all further proceedings of the said execution case will remain stayed unconditionally for a period of two weeks from date and if, in the meantime, the defendant no. 2/appellant deposits all arrear rent up to June 2016, if there be any, at the rate of last paid rent together with decretal cost in the Executing Court, the interim stay will continue till the disposal of the appeal subject to compliance of the further conditions as follows………… ”

The direction is prefaced by the stand of counsel for the appellant (the applicant/defendant before me) for restraining the plaintiff from putting the decree passed by the City Civil Court in execution. The order shows that besides stay of the Execution Case, no other questions were gone into and the Division Bench, in fact, imposed certain conditions for grant of stay of the decree, in default of which the interim order would stand vacated and the plaintiff would be at liberty to proceed with the execution.

10. “Mesne profits” under section 2(12) of the CPC has been described as those profits which a person in wrongful possession of the property in question actually received or might with ordinary diligence have received from such property, together with interest on such profits. In the facts of this case, the previous suit was one for delivery of Khas possession simpliciter. This relief was granted to the plaintiff by the City Civil Court which the plaintiff proceeded to put into execution. This means that the execution was restricted to the defendants (there were two defendants before the City Civil Court) and recovery of possession of the suit premises by the plaintiff. The earlier suit was filed in 2010 and passed on a notice of eviction dated 20th January, 2005. In the present suit, the plaintiff has claimed mesne profits calculated on and from 8th July, 2014 as well as from 8th July, 2017 until recovery of possession of the suit premises from the defendant. The date from which mesne profit has been claimed in the present suit is important as the decree of the City Civil Court was passed on 22nd September, 2015 by which it was held that the defendants were liable to be evicted. The period of calculation of mesne profit in the present suit starts at least four years after the earlier suit was filed by the plaintiff. Facts apart, the cause of action pleaded in the present suit is that despite obtaining a decree for eviction in September 2015, the defendant has continued to be in possession of the suit premises as a trespasser which has entitled the plaintiff to claim damages and mesne profit. The question before this court is whether a claim in the present suit, namely, a claim for mesne profits can be said to be a matter in issue in the previous suit where the claim for recovery and possession of the suit premises.

11. The decision cited by Mr. Chowdhury for the expression “matter in issue” must be seen in the facts of that case which involved a previous suit for the recovery of money on the basis of an equitable mortgage against two individuals who had allegedly created a mortgage by deposit of title deeds in respect of a particular property in New Delhi. The later suit was filed by the plaintiff (who had filed the earlier suit) for recovery of money by sale of the mortgaged property against the same defendants (as in the earlier suit) and for declaration that the right to recover the mortgage-debt from the defendants takes priority over the right of the Union of India. In explaining what the words “matter in issue” in Section 10 of the CPC means the Delhi High Court was of the view that matter in issue would imply all disputed material questions in the subsequent suit which are directly and substantially in question in the previous suit. But having regard to the disputes in both the suits filed in that case, the court was of the view that except the amount of mortgage money claimed in both the suits being different, the questions in dispute in all other aspects in the later suit were the same as those in the previous suit. Further, in that case the previous litigation was pending and was at the stage of appeal while the later suit was at the stage of trial. Therefore, Sagar Shamsher cannot be equated with the instant case.

12. A decision whether a matter in issue in a suit pending trial is substantially an issue in a previously instituted suit between the same parties would essentially involve both the factual aspect as well as construction of what the law intends to prevent under Section 10 of the CPC. The factual aspect would involve an enquiry into not only the identity of parties in both the suits but more important, whether the disputes or issues are materially the same. The legislative intent behind Section 10 is not only to prevent multiplicity of proceedings between the same parties but also to discourage courts from passing orders which may be in conflict with or repetitive of orders which have already been passed by another court. The object is also to deter litigants from trying their luck time and again before different courts on the same facts or making use of the court processes to obtain multiple orders on similar fact situations. An important effect of Section 10 is to prevent wastage of judicial time by ensuring that matters which have already been or are in the process of being adjudicated are not taken up for consideration simultaneously or once again in a later proceedings. The enquiry would also involve whether the plaintiff would be required to obtain leave under Order II Rule 2 of the CPC for filing the later suit between the same parties on similar questions. Such leave would be required if the cause of action or matter in issue in both the suits is the same or substantially the same. In this context, a passage from Santosh Kumar Ghosh relied upon by Mr. Bhattacharyya should be set out:

“Taking into consideration the changes introduced by the present Civil Procedure Code to the old law, there is nothing to indicate that the changes have taken away the force of the old decisions hereinbefore referred to. A claim for mesne profits is not a claim under the same obligation compelling a trespasser to restore possession. A claim for mesne profits is also not based on the same cause of action as the claim for possession. A person may be in wrongful possession but even then may not be obliged to pay mesne profits if he has not received or might not have received with ordinary diligence profits from the property in wrongful possession. The liability to pay mesne profits arises from the profits a person has or might reasonably have made by his wrongful possession. Thus the obligation to pay mesne profits arises from a cause of action completely different from the obligation to restore possession of the immovable property to the rightful owner.”

Although the said decision was concerned with whether the second suit was barred under Order II Rule 2 of the CPC, the court did not accept the contention that causes of action for recovery of possession and for mesne profits are the same. The court rejected the contention that where a claim for mesne profits was not included in a previous suit for possession of the property, a second suit for such mesne profits was barred under Order II Rule 2 of the CPC. The view taken by a learned Judge of this Court on 27th May, 1958 remains good law even after sixty years, despite numerous amendments to the CPC.

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13. There is also good basis in the contention of Mr. Bhattacharyya, for the plaintiff, that the stay granted by the Appeal Court is only restricted to execution of the decree passed by the City Civil Court that is to say that the plaintiff would be restrained from taking steps to obtain peaceful possession of the suit premises by evicting the defendants. It may be reiterated that the only prayer in the plaint filed before the learned City Civil Court was for a decree for recovery of Khas possession of the suit premises against the defendants. The order of stay therefore did not involve any declaration inter parties that the defendant is not in unauthorised occupation of the suit premises which means that the judgment of the learned City Civil Court remains and has not been stayed. In this context, it would be useful to quote a passage 3 from a Division Bench decision of this court in Pijush Kanti Chowhury;

“Therefore, the effect of the order of stay in a pending appeal before the Apex Court does not amount to ‘any declaration of law’ but is only binding upon the parties to the said proceedings and at the same time, such interim order does not destroy the binding effect of the judgment of the High Court as a precedent because while granting the interim order, the Apex Court had no occasion to lay down any proposition of law inconsistent with the one declared by the High Court which is impugned.”

A similar view was expressed in Niranjan Chatterjee, another Division Bench decision of this court.

14. Having regard to the effect of the order passed by the Appeal Court in the context of the questions in controversy in the two suits filed by the plaintiff and the reliefs claimed therein, this court is of the view that the matters in issue in the instant suit were neither directly nor substantially in issue in the suit filed by the plaintiff before the Learned City Civil Court and further that the order of stay of the execution proceedings of the previous suit do not warrant a stay of all further proceedings in the present suit.

15. G.A. 102 of 2018 is accordingly dismissed. The C.S. No. 152 of 2017 shall proceed for hearing. There shall be no order as to costs.

Urgent Photostat certified copy of this Judgment, if applied for, be supplied to the parties upon compliance of all requisite formalities.

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