H. Liakath Ali and Another vs Karaikal Municipality

S. S. Subramani, J.—Plaintiffs in O.S.No. 31 of 1992, on the file of Principal District Munsif''s Court, Karaikal, are the appellants before

this Court.

Appellants have filed the suit to declare that fixation of compensation was not in accordance with Article 7 of the lease deed dated 14.5.1957

and granting a mandatory injunction against the defendant to constitute a Committee in accordance with directions issued by the court and for

costs.

In the plaint it is stated that the site and land comprised in R.S.No. 49/7 at T.S.No. 95 in Ward E. Block No. 10 Karaikal is a municipal land

and the appellants'' predecessor late Hameed Maricar took permission from the Municipality for construction of a theatre, and, as per the lease

agreement dated 14.5.1957, a cinema theatre was constructed. As per the lease deed, the lease is for a period of 29 years, and the lease amount

was Rs. 331.88 per month. Article 7 of the lease deed provides that at the time of expiry of the lease, the commune shall have right to take

possession of the immovable property used as cinema theatre. The price of the building shall be fixed by a Commission comprised of the Mayor,

Proprietor of the cinema theatre, Members of the Municipal Council designated by the Municipal Assembly, a delegate of the Director of P.W.D.

and the Delegate of the Chief of Contribution Department. Article 8 further says that all disputes that may relate to the lease shall be judged by

ordinary Civil Court. It is the case of the plaintiffs that the original lessee Hameed Maricar died on 28.12.1978 and the term of the lease expired on

31.12.1986. The appellants became the owners of the theatre and their rights as lessee was also recognized by the Municipality. At the time when

the lease expired, the Special Officer constituted a Committee to decide the value of the building. It is said that subsequently the matter was

unilaterally decided and the Commissioner entrusted the work of assessment to the Public Works Department. P.W.D. has assessed the cost of

construction without reference to the value of the building. It is said that the present value of the building will be more than Rs. 9 1/2 lakhs. But, at

the same time, the Municipal Engineer has submitted a Report fixing the value of the theatre as Rs. 4,37,979. The value estimated by the plaintiffs is

at Rs. 7,87,795. Another estimate was also made by the Public Works Department, fixing the value of the cinema house at Rs. 6,45,469. While

so, plaintiffs received a notice from the Commissioner of the Municipality that they have deposited a sum of Rs. 5,20,009 in the Indian Overseas

Bank, Karaikal, being the value of the building. It is the plaintiffs'' case that the said deposit is not valid and is not based on any detailed valuation.

On receipt of notice, plaintiffs sent a reply stating that they are not accepting the valuation and they wanted the valuation to be fixed as per the

agreement dated 14.5.1957 for which the suit was filed.

In the written statement, it is contended that the suit is not properly valued. On 12.12.1985, the committee consisting of the Special Officer,

Commissioner, Karaikal Municipality, Assistant Engineer from Public Works Department and the Tahsildar from the Revenue Department and the

owner of the theatre, namely, the plaintiffs met for the purpose of deciding the value of the theatre structure and they valued the structure at Rs.

4,38,000. But the plaintiffs wanted to engage some technical persons for computing the value of the structure, and the owner of the building came

forward with a valuation of Rs. 8,00,000 for the theatre. The committee met on 19.12.1985 and decided to refer the matter to the Government.

Plaintiffs also agreed to refer the question of valuation of the theatre to the Government of Pondicherry and hence they are bound to accept the

valuation fixed by the Government. As per the decision of the Committee, the Government directed the P.W.D. to value the building and the same

was valued at Rs. 6,45,461. The Government remitted the matter back to the Principal Engineer, P.W.D., Pondicherry, to assess the value of the

buildings on 1.1.1986 and fixed the value at Rs. 5,20,009. Deducting the land rent for a period of 4 1/2 years, the amount due as compensation

was fixed at Rs. 5,18,599, and a cheque was sent for that amount, and plaintiffs also accepted the same under protest. They are not entitled to get

any amount by way of solatium as in the case of land acquisition.

On the above pleadings, trial court took oral and documentary evidence, and finally it came to the conclusion that the suit as framed is not

maintainable. The trial court held that the valuation of the plaint is not correct. Since the plaintiffs have received the amount deposited by the

defendant, even though under protest, the suit can only be for recovery of the difference in the value of the building and not for a mandatory

injunction to appoint a valuer as per the agreement. It was further found that the suit is bad for non-joinder of necessary parties. It also came to the

conclusion that the valuation made by the department is proper. The suit was dismissed.

Aggrieved by the judgment, plaintiffs preferred A.S.No. 12 of 1994, on the file of Additional District Judge, Pondicherry at Karaikal. The lower

appellate court confirmed the decree. The findings of the lower appellate court are that the plaintiffs are not entitled to mandatory injunctions, and it

was only with the concurrence of the plaintiffs, that the P.W.D. or the Government of Pondicherry assessed the value of the building and the same

is proper. It also came to the conclusion that the plaintiffs are not entitled to have a fixation under Article 7 of the Agreement. The suit is also bad

for non-issuance of notice u/s 485 of the Pondicherry Municipalities Act before instituting the suit, and it was also found that the Government is a

necessary party. It is against the concurrent judgment, plaintiffs have preferred the above second appeal.

In the memorandum of appeal, the following questions of law have been raised:

(1) Whether the determination on the issue of court-fee by the courts below is not in accordance with the mandatory provisions contained in

Section 11(2) of the Pondicherry Court-Fees and Suits Valuation Act, 1972?

(2) Whether the view of the courts below that the suit is not maintainable without a notice u/s 485 of the Pondicherry Municipalities Act, 1973 is

correct in law?

(3) Whether the view of the courts below that the compensation amount determined by the Executive Engineer, P.W.D. was determined in

accordance with Act 7 of the lease deed Ex.A-1 is correct in law? and

(4) Whether the view of the courts below that the Special Officer of the Karaikal Municipality and the Government of Pondicherry are necessary

parties to the suit and that the suit is bad for non-joinder of necessary parties is correct in law?

When the matter came up for admission, learned Counsel for the appellant submitted that he has filed C.M.P.No. 12174 of 1997 for permission

to withdraw O.S.No. 31 of 1992, on the file of Principal District Munsif''s Court, Karaikal, with liberty to institute a fresh suit regarding the subject

matter of the said suit. In the affidavit filed in support of the said petition, it is said that the value fixed at Rs. 5,20,009 is very low and the plaintiffs

are not satisfied with the quantum of compensation fixed by the defendant-Municipality. It is said that the suit was resisted by the defendant on

various grounds, viz., (1) The suit has not been properly valued and the proper court-fee has not been paid; (2) That the suit filed without

impleading the Government of Pondicherry which is a necessary party is bad for non joinder; (3) the suit is not maintainable in view of the fact that

no notice u/s 485 of the Pondicherry Municipalities Act, 1973 was given before instituting the suit; and (4) that the compensation having been

determined and accepted by plaintiffs, though under protest, they are not entitled for the relief of mandatory injunction. These according to the

plaintiffs/appellants are formal defects which enable them to file a separate suit on the same cause of action.

On my direction, notice in the C.M.P. was asked to be served on the Government Pleader, Pondicherry, so that he may also be heard in the

matter.

I have considered the entire arguments of learned Counsel for appellants/plaintiffs. I find that they are not entitled to withdraw the suit at this

stage, for, they have not complied with Order 23, Rule 1, C.P.C. As I said already, the second appeal has not been admitted so far.

Mulla on the Code of Civil Procedure-Volume III (1997), at page 2113, commenting on Order 23, Rule 1, C.P.C. has said thus:

It has been held by the High Courts of Allahabad, Madras and Bombay, that where a plaintiff''s suit is dismissed, and he appeals from the decree,

the appellate Court has power to allow the plaintiff-appellant to withdraw from the suit with liberty to bring a fresh suit in respect of the same

subject-matter.

(Please see Sub-section (2) of Section 107, C.P.C.)

The learned author has further said thus:

...The contrary view seems to be implied in a Calcutta decision But an appellate court has no power to grant such leave before the appeal is

admitted.

[Italics supplied]

Learned Counsel for the appellants also brought to my notice a Full Bench decision of our High Court reported in Kamayya v. Papayya ILR

40 Mad. 259. an argument was taken that the power of withdrawal by an appellate Court arises only when an appeal is admitted, and there is no

certain finality about the decree in existence until the appellate court pronounces one. Further question that was raised was, whether the appellate

court itself has power to permit a suit to be withdrawn. At page 266, in the order of Reference, it was said thus:

Under Section 107, Clause (2) of the Code of Civil Procedure, the appellate court has the same powers as are conferred by the Code on the

Court of Original Jurisdiction in respect of suits. As the first court can act under Rule 1 of Order 23, when there is no subsisting decree, the

appellate court can also do the same provided it sets aside the decree of the first court as it has power to do. The appellate court''s power is

derived from the section and not by a process of substituting the word ""appeal"" for the word ""suit"" whenever it occurs in Rule 1 of Order 23, as is

suggested in the ruling under consideration.

With due respect it seems to me that the ruling in Eknath v. Ranoji ILR 35 Bom. 261 has been misunderstood in Choragudi China Kotayya v. Raja

Varadaraja Appa Row, in that ease the District Judge gave leave under Rule 1 of Order 23, to the plaintiff before the admission of his appeal and

without notice to defendant. There was a subsisting decree of the first court which the District Judge did not and was not in a position to set aside

as the appeal had not even reached the stage of admission. The High Court was right in holding that the District Judge had no power to allow in

defendants'' favour. The language used in the High Court''s judgment must be read with reference to the facts of the case.

The reference to Eknath v. Ranoji ILR 35 Bom. 261. in the order of reference extracted above is the passage relied on by Mulla in his

Commentaries of the Code reported in ILR (1911) 35 Bom. 261.

According to me, the contention of learned Counsel for respondent seems to be correct. Only when the second appeal is admitted the suit is

reopened, and as it stands, there is a decree in favour of the defendant. The finality is taken away only when the High Court exercises the power

u/s 100, C.P.C. in coming to the conclusion that there is specific question of law which requires consideration by this Court. Till then the decree is

final. At this stage, when the court has not admitted the second appeal, it cannot invoke the powers under Order 23, Rule 1, C.P.C. Even if the

appellate court has got the power to permit withdrawal of suit, when it exercise the powers under Sections 100, 107 and 108, C.P.C., that power

could be exercised only when the court formally declares that the appeal requires consideration by this Court i.e., when substantial question of law

arises. According to me, the applicant at this stage is not proper.

Even if the court comes to the conclusion that the matter requires consideration, I do not think that in this case, the plaintiffs could be permitted

to withdraw the suit with liberty to file a fresh suit. The suit has been dismissed not only on account of the formal defects, but also on merits. The

agreement was executed between the respondent and the predecessor of the plaintiffs. The Government is not made liable for any amount that is

due to them. It is by consent of parties, the Government was authorised to fix the compensation as an arbitrator of the plaintiffs and defendant.

It is true that both the courts below have held that the suit is bad for non-issuance of statutory notice against the Municipality. But if the parties

have adduced evidence and also wanted a decision on merits, even though there is a finding that the suit is bad for non-issuance of notice, it cannot

be said that the suit is dismissed only for formal defects. The Municipality, by adducing evidence, and having not insisted on a decision on the

preliminary issue, it must be deemed to have waived that right. The prior notice is only for the benefit of the Municipality, which it could waive, and

in this case, the evidence has also been adduced by the Municipality on the merits of the claim of the plaintiffs. The decision is on more than one

point. If that be so, it cannot be said that the grounds have been made out under Order 23, Rule 1, C.P.C. The suit is bad not only for formal

defects but for other reasons also, and, therefore, the suit is liable to be dismissed. Again, the very nature of the suit was disputed by the defendant

immediately after the written statement was filed. In the written statement, it is contended that the suit for mandatory injunction is not maintainable

and the relief can only be for recovery of balance of the amount, namely, value of the building. Plaintiffs insisted and wanted a decision on that point

not only before the trial court, but also wanted to vindicate their position even before the lower appellate court. Only when both the courts below

have held that the suit as framed is not maintainable, the present application has been filed, though it was preceded by the filing of a second appeal.

Further, there is also a finding by the lower appellate court that the compensation amount fixed by the Government and deposited by

Municipality is correct, and it does not call for any interference. The amount was deposited years back, and if at this stage the plaintiffs are allowed

to institute a suit against the Municipality, their vested right of limitation is also likely to be taken away. In second appeal, the powers are always

with the court to decide whether withdrawal should be permitted, or not. The prior conduct of the parties requires serious consideration.

For the above reasons, I do not think that I should allow the C.M.P. so as to permit the plaintiffs to agitate the matter afresh. When a decision

is in favour of the defendant it should not be lightly taken away by permitting the plaintiffs to withdraw the suit.

There is one more added reason for dismissing the C.M.P., namely, only if I set aside the decree, the quest of permission will arise. For the

said purpose, on the materials placed before me, I hold that the plaintiffs do not have an arguable case before this Court. Both the courts below,

on facts, have come to the conclusion that the suit as framed is not maintainable, and the lower appellate court has also found that it was only with

the consent of the plaintiffs, the Government fixed the compensation which is now sought to be wriggled out by them and again they want to take

refuge under Clause 7 of the Agreement. The conduct of the plaintiffs was taken into consideration by the lower appellate court in coming to the

conclusion that the Government was right in fixing the compensation and the quantum fixed is also correct. These are all only questions of fact,

which cannot be interfered with in second appeal. The second appeal is, therefore, dismissed in limine. Consequently, the C.M.P. is also

dismissed.