Eviction of Tenants by Police Force

Justice Katju

Justice Markandey Katju and Justice Gyan Sudha Mishra in M/s Ram Prakash Sharma v. Baulal (D) by LR's has issued general directions in all cases where the tenants do not vacate the premises in eviction cases despite granting time by the Court or despite furnishing an undertaking to the Court. The short order reads as follows;

"Heard learned counsel for the parties. In the facts and circumstances of the case, time to vacate the premises in question is extended till 31st August, 2011 and if the tenants do not vacate on or before the said date, they will be evicted by police force. We further make it clear that when this Court allows the petition/appeal of the landlord or dismisses the petition/appeal of the tenant and grant some time to vacate the premises in question and if the tenant does not vacate within the time granted, the tenant shall be evicted by police force. This is a general direction we are passing because we are coming across several cases where the tenants are not vacating the premises in question despite granting time by this Court or despite furnishing an undertaking to this Court with a result that the landlord has to initiate contempt proceedings or any other proceedings. 

Hence, we give a general direction that when tenant's petition/appeal is dismissed and he is given time to vacate then on the expiry of that time, he will be evicted by police force if he does not vacate of his own.

If any extension of time to vacate is desired, that application should be filed well in advance. The Interlocutory Application is allowed accordingly.

'Affidavits' under Order XIX of Code of Civil Procedure : Supreme Court Directions

Justice Ganguly

The Supreme Court in Amar Singh v. Union of India and Others, has issued directions to the courts registry to carefully scrutinize all affidavits, petitions and applications and reject those which do not conform to the requirements of Order XIX of the Code of Civil Procedure and Order XI of the Supreme Court Rules. The Supreme Court has highlighted the importance of affidavits in this judgment and has discussed various judicial pronouncements on the aspect. The relevant extracts of the aforesaid judgment are reproduced hereinbelow;

12. The provision of Order XIX of Code of Civil Procedure, deals with affidavit. Rule 3 (1) of Order XIX which deals with matters to which the affidavit shall be confined provides as follows: 

"Matters to which affidavits shall be confined. - (1) affidavits shall be confined to such facts as the deponent is able of his own knowledge to prove, except on interlocutory applications, on which statements of his belief may be admitted; provided that the grounds thereof are stated."

13. Order XI of the Supreme Court Rules 1966 deals with affidavits. Rule 5 of Order XI is a virtual replica of Order XIX Rule 3 (1). Order XI Rule 5 of the Supreme Court Rules is therefore set out: "Affidavits shall be confined to such facts as the deponent is able of his own knowledge to prove, except on interlocutory applications, on which statements of his belief may be admitted, provided that the grounds thereof are stated."

14. In this connection Rule 13 of Order XI of the aforesaid Rules are also relevant and is set out below:

"13. In this Order, `affidavit' includes a petition or other document required to be sworn or verified; and `sworn' includes affirmed. In the verification of petitions, pleadings or other proceedings, statements based on personal knowledge shall be distinguished from statements based on information and belief. In the case of statements based on information, the deponent shall disclose the source of this information."

15. The importance of affidavits strictly conforming to the requirements of Order XIX Rule 3 of the Code has been laid down by the Calcutta High Court as early as in 1910 in the case of Padmabati Dasi v. Rasik Lal Dhar [(1910) Indian Law Reporter 37 Calcutta 259]. An erudite Bench, comprising Chief Justice Lawrence H. Jenkins and Woodroffe, J. laid down:

"We desire to impress on those who propose to rely on affidavits that, in future, the provisions of Order XIX, Rule 3, must be strictly observed, and every affidavit should clearly express how much is a statement of the deponent's knowledge and how much is a statement of his belief, and the grounds of belief must be stated with sufficient particularity to enable the Court to judge whether it would be sage to act on the deponent's belief."

16. This position was subsequently affirmed by Constitution Bench of this Court in State of Bombay v. Purushottam Jog Naik, AIR 1952 SC 317. Vivian Bose, J. speaking for the Court, held:

"We wish, however, to observe that the verification of the affidavits produced here is defective. The body of the affidavit discloses that certain matters were known to the Secretary who made the affidavit personally. The verification however states that everything was true to the best of his information and belief. We point this out as slipshod verifications of this type might well in a given case lead to a rejection of the affidavit. Verification should invariably be modelled on the lines of Order 19, Rule 3, of the Civil Procedure Code, whether the Code applies in terms or not. And when the matter deposed to is not based on personal knowledge the sources of information should be clearly disclosed. We draw attention to the remarks of Jenkins, C. J. and Woodroffe, J. in Padmabati Dasi vs. Rasik Lal Dhar 37 Cal 259 and endorse the learned Judges' observations."

17. In Barium Chemicals Limited and another v. Company Law Board and others, AIR 1967 SC 295, another Constitution Bench of this Court upheld the same principle:

"The question then is: What were the materials placed by the appellants in support of this case which the respondents had to answer? According to Paragraph 27 of the petition, the proximate cause for the issuance of the order was the discussion that the two friends of the 2nd respondent had with him, the petition which they filed at his instance and the direction which the 2nd respondent gave to respondent No. 7. But these allegations are not grounded on any knowledge but only on reasons to believe. Even for their reasons to believe, the appellants do not disclose any information on which they were founded. No particulars as to the alleged discussion with the 2nd respondent, or of the petition which the said two friends were said to have made, such as its contents, its time or to which authority it was made are forthcoming. It is true that in a case of this kind it would be difficult for a petitioner to have personal knowledge in regard to an averment of mala fides, but then were such knowledge is wanting he has to disclose his source of information so that the other side gets a fair chance to verify it and make an effective answer. In such a situation, this Court had to observe in 1952 SCR 674: AIR 1952 SC 317, that as slipshod verifications of affidavits might lead to their rejection, they should be modelled on the lines of O. XIX, R. 3 of the Civil Procedure Code and that where an averment is not based on personal knowledge, the source of information should be clearly deposed. In making these observations this Court endorse the remarks as regards verification made in the Calcutta decision in Padmabati Dasi v. Rasik Lal Dhar, (1910) ILR 37 Cal 259."

18. Another Constitution Bench of this Court in A. K. K. Nambiar v. Union of India and another, AIR 1970 SC 652, held as follows:

"The appellant filed an affidavit in support of the petition. Neither the petition nor the affidavit was verified. The affidavits which were filed in answer to the appellant's petition were also not verified. The reasons for verification of affidavits are to enable the Court to find out which facts can be said to be proved on the affidavit evidence of rival parties. Allegations may be true to knowledge or allegations may be true to information received from persons or allegations may be based on records. The importance of verification is to test the genuineness and authenticity of allegations and also to make the deponent responsible for allegations. In essence verification is required to enable the Court to find out as to whether it will be safe to act on such affidavit evidence. In the present case, the affidavits of all the parties suffer from the mischief of lack of proper verification with the result that the affidavits should not be admissible in evidence."

19. In the case of Virendra Kumar Saklecha v. Jagjiwan and others, [(1972) 1 SCC 826], this Court while dealing with an election petition dealt with the importance of disclosure of source of information in an affidavit. This Court held that non-disclosure will indicate that the election petitioner did not come forward with the source of information at the first opportunity. The importance of disclosing such source is to give the other side notice of the same and also to give an opportunity to the other side to test the veracity and genuineness of the source of information. The same principle also applies to the petitioner in this petition under Article 32 which is based on allegations of political motivation against some political parties in causing alleged interception of his telephone. The absence of such disclosure in the affidavit, which was filed along with the petition, raises a prima facie impression that the writ petition was based on unreliable facts.

20. In case of M/s Sukhwinder Pal Bipan Kumar and others v. State of Punjab and others, [(1982) 1 SCC 31], a three Judge Bench of this Court in dealing with petitions under Article 32 of the Constitution held that under Order XIX Rule 3 of the Code it was incumbent upon the deponent to disclose the nature and source of his knowledge with sufficient particulars. In a case where allegations in the petition are not affirmed, as aforesaid, it cannot be treated as supported by an affidavit as required by law. (See para 12 page 38)

21. The purpose of Rules 5 and 13 of the Supreme Court Rules, set out above, has been explained by this Court in the case of Smt. Savitramma v. Cicil Naronha and another, AIR 1988 SCC 1987. This Court held, in para 2 at page 1988, as follows: "...In the case of statements based on information the deponent shall disclose the source of his information. Similar provisions are contained in Order 19, Rule 3 of the Code of Civil Procedure. Affidavit is a mode of placing evidence before the Court. A party may prove a fact or facts by means of affidavit before this Court but such affidavit should be in accordance with Order XI, Rules 5 and 13 of the Supreme Court Rules. The purpose underlying Rules 5 and 13 of Order XI of the Supreme Court Rules is to enable the Court to find out as to whether it would be safe to act on such evidence and to enable the court to know as to what facts are based in the affidavit on the basis of personal knowledge, information and belief as this is relevant for the purpose of appreciating the evidence placed before the Court, in the form of affidavit...."

22. In the same paragraph it has also been stated as follows:

"...If the statement of facts is based on information the source of information must be disclosed in the affidavit. An affidavit which does not comply with the provisions of Order XI of the Supreme Court Rules, has no probative value and it is liable to be rejected..."

23. In laying down the aforesaid principles, this Court in Smt. Savitramma (supra) relied on a full Bench judgment in Purushottam Jog Naik (supra).

24. In the instant case, the petitioner invoked the extraordinary writ jurisdiction of this Court under Article 32, without filing a proper affidavit as required in terms of Order XIX Rule 3 of the Code. Apart from the fact that the petitioner invoked Article 32, the nature of the challenge in his petition is very serious in the sense that he is alleging an attempt by the government of intercepting his phone and he is further alleging that in making this attempt the government is acting on extraneous considerations, and is virtually acting in furtherance of the design of the ruling party. It is, therefore, imperative that before making such an allegation the petitioner should be careful, circumspect and file a proper affidavit in support of his averment in the petition.

25. In our judgment, this is the primary duty of a petitioner who invokes the extraordinary jurisdiction of this Court under Article 32.

...

65. This court wants to make one thing clear i.e. perfunctory and slipshod affidavits which are not consistent either with Order XIX Rule 3 of the CPC or with Order XI Rules 5 and 13 of the Supreme Court Rules should not be entertained by this Court.

66. In fact three Constitution Bench judgments of this Court in Purushottam Jog Naik (supra), Barium Chemicals Ltd. (supra) and A.K.K. Nambiar (supra) and in several other judgments pointed out the importance of filing affidavits following the discipline of the provision in the Code and the said rules.

67. These rules, reiterated by this Court time and again, are aimed at protecting the Court against frivolous litigation must not be diluted or ignored. However, in practice they are frequently flouted by the litigants and often ignored by the Registry of this Court. The instant petition is an illustration of the same. If the rules for affirming affidavit according to Supreme Court were followed, it would have been difficult for the petitioner to file this petition and so much of judicial time would have been saved. This case is not isolated instance. There are innumerable cases which have been filed with affidavits affirmed in a slipshod manner.

68. This Court, therefore, directs that the Registry must henceforth strictly scrutinize all the affidavits, all petitions and applications and will reject or note as defective all those which are not consistent with the mandate of Order XIX Rule 3 of the CPC and Order XI Rules 5 and 13 of the Supreme Court Rules.

"An Action at Law is not a Game of Chess" : Supreme Court Raps Amar Singh

Source : Indlaw

The Supreme Court today lifted its five-year-old gag order restraining print and electronic media from publishing and broadcasting contents of taped telephone conversations of former Samajwadi Party leader Amar Singh with politicians and Bollywood stars.

Dismissing Singh's petition, a bench of Justices G S Singhvi and A K Ganguly vacated the apex court's interim order passed on February 27, 2006 restraining the media from making contents of the taped conversation public. 

Singh, then general secretary of Samajwadi Party, through a petition in 2006, had sought and got restraint order against publication of contents of his telephonic conversation he alleged had been taped illegally. 

He had earlier accused the Congress through its President Sonia Gandhi and private telecom operator Reliance Infocomm, of being behind the tapping but had later withdrawn his allegations against the Congress. 

But a non-government organisation (NGO), the Centre for Public Interest Litigation, through its lawyer Prashant Bhushan, had pleaded for publication of the taped contents, saying it was the right of people to know the alleged illegal dealings of public figures in the discharge of their public functions. The PIL by the NGO said this right of the people was guaranteed by the Article 19(1) (a) of the Constitution and also upheld by the apex court. 

Justice AK Ganguly, who wrote the judgement for the bench, said no case is made out against the Centre and its authorities as they were not involved in tapping Singh's telephone. 

The court, however, said Singh was at liberty to file a case against Reliance Infocomm (now Reliance Communications) for illegally tapping his phone. 

The bench had reserved its verdict on Singh's petition on March 29 after hearing him and the NGO, which had opposed his plea and sought a direction for making public all his taped conversations.

Find the entire Judgment here.

Scope of Winding Up Proceedings : The Law

Justice Kapadia

The Bench comprising Chief Justice S.H. Kapadia and K.S. Radhakrishnan, in M/s IBA Health (I) Pvt. Ltd. v. M/s Info-Drive Systems SDN. BHD. has examined the scope of jurisdiction of courts in winding up proceedings. While examining various precedents on the subject, the court held as under;

SUBSTANTIAL DISPUTE - AS TO LIABILITY 

17. The question that arises for consideration is that when there is a substantial dispute as to liability, can a creditor prefer an application for winding up for discharge of that liability? In such a situation, is there not a duty on the Company Court to examine whether the company has a genuine dispute to the claimed debt? A dispute would be substantial and genuine if it is bona fide and not spurious, speculative, illusory or misconceived. The Company Court, at that stage, is not expected to hold a full trial of the matter. It must decide whether the grounds appear to be substantial. The grounds of dispute, of course, must not consist of some ingenious mask invented to deprive a creditor of a just and honest entitlement and must not be a mere wrangle. It is settled law that if the creditor's debt is bona fide disputed on substantial grounds, the court should dismiss the petition and leave the creditor first to establish his claim in an action, lest there is danger of abuse of winding up procedure. The Company Court always retains the discretion, but a party to a dispute should not be allowed to use the threat of winding up petition as a means of forcing the company to pay a bona fide disputed debt. 

18. In this connection, reference may be made to the judgment of this Court in Amalgamated Commercial Traders (P) Ltd. v. A.C.K. Krishnaswami and another (1965) 35 Company Cases 456 (SC), in which this Court held that "It is well-settled that a winding up petition is not a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the company. A petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed, and under circumstances may be stigmatized as a scandalous abuse of the process of the court." 

19. The above mentioned decision was later followed by this Court in Madhusudan Gordhandas and Co. v. Madhu Woollen Industries Pvt. Ltd. 1971) 3 SCC 632. The principles laid down in the above mentioned judgment have again been reiterated by this Court in Mediquip Systems (P) Ltd. v. Proxima Medical Systems (GMBH) (2005) 7 SCC 42, wherein this Court held that the defence raised by the appellant-company was a substantial one and not mere moonshine and had to be finally adjudicated upon on the merits before the appropriate forum. The above mentioned judgments were later followed by this Court in Vijay Industries v. NATL Technologies Ltd. (2009) 3 SCC 527. 

20. The principles laid down in the above mentioned cases indicate that if the debt is bona fide disputed, there cannot be "neglect to pay" within the meaning of Section 433(1)(a) of the Companies Act, 1956. If there is no neglect, the deeming provision does not come into play and the winding up on the ground that the company is unable to pay its debts is not substantiated and non-payment of the amount of such a bona fide disputed debt cannot be termed as "neglect to pay" so as to incur the liability under Section 433(e) read with Section 434(1)(a) of the Companies Act, 1956. 

COMMERCIALLY SOLVENT 

21. Appellant company raised a contention that it is commercially solvent and, in such a situation, the question may arise that the factum of commercial solvency, as such, would be sufficient to reject the petition for winding up, unless substantial grounds for its rejection are made out. A determination of examination of the company's insolvency may be a useful aid in deciding whether the refusal to pay is a result of the bona fide dispute as to liability or whether it reflects an inability to pay, in such a situation, solvency is relevant not as a separate ground. If there is no dispute as to the company's liability, the solvency of the company might not constitute a stand alone ground for setting aside a notice under Section 434 (1)(a), meaning thereby, if a debt is undisputedly owing, then it has to be paid. If the company refuses to pay on no genuine and substantial grounds, it should not be able to avoid the statutory demand. The law should be allowed to proceed and if demand is not met and an application for liquidation is filed under Section 439 in reliance of the presumption under Section 434(1)(a) that the company is unable to pay it debts, the law should take its own course and the company of course will have an opportunity on the liquidation application to rebut that presumption. 

22. An examination of the company's solvency may be a useful aid in determining whether the refusal to pay debt is a result of a bona fide dispute as to the liability or whether it reflects an inability to pay. Of course, if there is no dispute as to the company's liability, it is difficult to hold that the company should be able to pay the debt merely by proving that it is able to pay the debts. If the debt is an undisputedly owing, then it should be paid. If the company refuses to pay, without good reason, it should not be able to avoid the statutory demand by proving, at the statutory demand stage, that it is solvent. In other words, commercial solvency can be seen as relevant as to whether there was a dispute as to the debt, not as a ground in itself, that means it cannot be characterized as a stand alone ground. 

MALICIOUS PROCEEDINGS FOR WINDING UP 

25. We may notice, so far as this case is concerned, there has been an attempt by the respondent company to force the payment of a debt which the respondent company knows to be in substantial dispute. A party to the dispute should not be allowed to use the threat of winding up petition as a means of enforcing the company to pay a bona fide disputed debt. A Company Court cannot be reduced as a debt collecting agency or as a means of bringing improper pressure on the company to pay a bona fide disputed debt. Of late, we have seen several instances, where the jurisdiction of the Company Court is being abused by filing winding up petitions to pressurize the companies to pay the debts which are substantially disputed and the Courts are very casual in issuing notices and ordering publication in the newspapers which may attract adverse publicity. 

Remember, an action may lie in appropriate Court in respect of the injury to reputation caused by maliciously and unreasonably commencing liquidation proceedings against a company and later dismissed when a proper defence is made out on substantial grounds. A creditor's winding up petition implies insolvency and is likely to damage the company's creditworthiness or its financial standing with its creditors or customers and even among the public. 

PUBLIC POLICY CONSIDERATIONS 

26. A creditor's winding up petition, in certain situations, implies insolvency or financial position with other creditors, banking institutions, customers and so on. Publication in the Newspaper of the filing of winding up petition may damage the creditworthiness or 20 financial standing of the company and which may also have other economic and social ramifications. Competitors will be all the more happy and the sale of its products may go down in the market and it may also trigger a series of cross-defaults, and may further push the company into a state of acute insolvency much more than what it was when the petition was filed. The Company Court, at times, has not only to look into the interest of the creditors, but also the interests of public at large. 

27. We have referred to the above aspects at some length to impress upon the Company Courts to be more vigilant so that its medium would not be misused. A Company Court, therefore, should act with circumspection, care and caution and examine as to whether an attempt is made to pressurize the company to pay a debt which is substantially disputed. A Company Court, therefore, should be guarded from such vexatious abuse of the process and cannot function as a Debt Collecting Agency and should not permit a party to unreasonably set the law in motion, especially when the aggrieved party has a remedy elsewhere.