Calcutta High Court Original Side: Important orders and judgments of October 2019

Subhro Prokas Mukherjee

A summary of important judgments and orders passed by the Principal Bench of the Calcutta High Court on the Original Side, for the month of October.

Burden of proof in insurance law

Sethia Oils v. National Insurance Company [Civil Suit 99/2019]

The plaintiff’s suit was decreed, with the Calcutta High Court holding that it is a well-settled principle of law that in case of a breach of a term of a contract of insurance, the insurer raising the instance of breach of the contract is required to prove the breach independently. The insurer cannot simply set its case in cross-examination and must lead evidence independently.

In the present case, the defendant insurance company did not lead any evidence but merely relied on cross-examination of the plaintiff’s witness. Relied upon Delhi High Court judgment in M/s. ICICI Lombard General Insurance Company Ltd. Vs Suresh Mehta & Anr., which in turn relied on Lakshmi Chand v. Reliance General Insurance (2016), Narcinva V Kamat v. Alfredo Antonio Deo Martins, and National Insurance Company v. Swaran Singh.

Service law

Abhishek Mukherjee v. Board of Trustees, Kolkata Port Trust WP No. 441/2018

Following Anjan Bhattacharya v. Registrar General, High Court, Kolkata & Ors, the disciplinary proceedings initiated against a employee-doctor of the respondent Port was quashed by the High Court as the Port was not competent to investigate and enquire into the professional conduct of the petitioner as there were better legislation covering the field and Port’s regulations related to general employment conduct.

In the present case, the doctor was charged with the act of ordering the injection of insulin/KCL leading to a patient’s death. Following Balbantrai Ratilal Patil v. State of Maharashtra, it was further held that because there were no specific provisions restricting payment to an employee during the suspension, s/he was entitled to receive full salary during the period of suspension.

Specific Performance and concept of equity’s darling

Saraf Projects Pvt. Ltd. v. Rawalwasia Tubes Pvt. Ltd. & Ors. in CS 299/2012

Injunction application failed as it was filed much after the civil suit and no injunction can be granted against the rightful owner of property particularly in favour of a person who has not been able to establish any legal right in respect of the property. The Calcutta High Court affirmed the judgment in Mahadeo Savlaram Shelke & Ors. v. Pune Municipal Corporation & Anr. reiterated as regards Section 19 of the Specific Relief Act.

The defendants are “equity’s darling” as per English law i.e. bona fide purchaser of property for value without notice of any rival claim. The plaintiff, in this case, might have been taken for a ride by the original defendant and thus its remedy lies against the original defendant and not the added defendants. Since specific performance against the original defendant is no longer possible, the plaintiff may claim damages against the former, if it deems fit. Section 14 of the Specific Relief Act does not aid the present plaintiff as it has not been able to prove substantial interest. 

Order XII Rule 6 of CPC –  Judgment upon admission

Balmer Lawrie & Company Limited v. Ravishankar Ramchandran & Ors.CS. No. 59/2018

Judgment upon admission allowed by the Calcutta High Court where it held that it was settled law that for the exercise of discretion of the Court under Order XII Rule 6 of the Code, the admission must be unequivocal and such admission may be in the pleadings or elsewhere. It was further reaffirmed that a defendant contesting an application under Order XII Rule 6 of the Code can explain his/her admission.

The petitioner’s claim for judgment upon admission is based on the instrument dated March 18, 2016, executed by them. However, the defendant took no action to annul the said instrument despite claiming that the instrument was a product of coercion and could not explain as to why it did not object to earlier deduction of payments.

Order 7 Rule 11 of CPC and Law of Limitation

Merlin Projects Limited v. Pawan Kumar Agarwal CS 369/2014

The Calcutta High Court allowed an Order 7 Rule 11 application as it sought to introduce a new case altogether while the cause of action was time-barred. Following the Supreme Court’s judgments in C. Natarajan v. Ashim Bai & Anr., Nandkishore Lalbai Mehta v. New Era Fabrics, Popat and Kotecha Property v. State Bank of India Staff Association, Sopan Sukhdeo Sable v. Assistant Charity Commissioner, the High Court stated that the principles guiding the exercise of powers under Order 7 Rule 11 (a) would be defeated if the court was required to conduct a full fact-finding exercise to determine the question of limitation.

It is only in certain cases that evidence needs to be adduced to determine an Order 7 Rule 11 application and not all cases. Following the Supreme Court’s judgment in Colonel Shrawan Kumar Jaipuriyar @ Sarwan Kumar Jaipuriyar v. Krishna Nandan Singh, the Court further held that no cause of action was made out as specific performance could not be allowed for an agreement which had ceased to exist.

Specific Relief Act 1963, Stamp Act

Shivshankar Resources Limited & Others v Shyama Enclave C.S.No.262 of 2001

Ascertaining whether the plaintiffs could avail of the ‘ready and willing’ argument as contained in Section 16 of the Specific Relief Act 1963, the Division Bench stated that the stated argument could be adopted by the appellants (in another appeal before it) even if they were not parties before the First Appellate Court. The High Court reiterated that being ‘ready and willing’ would include one’s financial capacity to perform the contract. The onus to prove the same was on the person asserting the same as per Section 101 of the Indian Evidence Act 1872.

While the Court has a discretion in passing a decree of specific performance as per Section 20 of the Specific Relief Act 1963, the condition precedent for the same is the plaintiff demonstrating continuous readiness and willingness. In the present case, Section 36 of the Stamp Act was invoked to state that when an instrument has been admitted in evidence, the ground that the instrument has not been duly stamped cannot be called into question at any stage of the suit thereafter.

Section 11 of the Arbitration and Conciliation Act 1996

Shri Arun Kumar Bhunia v. Badal Midya AP No. 402/2018

While rejecting a Section 11(6) application, the High Court noted that while it is true that the respondent before it (claimant before the Tribunal) had unilaterally appointed the Tribunal in breach of the arbitration agreement, it was equally true the petitioner before it (defendant before the Tribunal) had filed pleadings. Only after the respondent filed its evidence before the Tribunal, the petitioner filed a Section 12(3) application before the Tribunal which was rejected.

Citing Antrix Corporation v. Devas (2014) 11 SCC 560, the High Court stated that the petitioner could not invoke arbitration for a second time. Be that as it may, the petitioner was still at liberty to challenge the rejection of its Section 13 application as it was still empowered to move a Section 34 petition. This was because from a conjoint reading of Sections 21 and 11 (6) (a) of the Act of 1996, a valid notice under Section 21 of the Act of 1996 for referring the disputes between the parties to the arbitration was a condition precedent for the commencement of a valid arbitral proceeding. 

Subhro Prokas Mukherjee is an advocate practising in Delhi. He would like to thank his chamber senior Mr. Gourab Banerji (Senior Advocate) for his constant encouragement and motivation at initiating this series. Last but not the least, the author wishes to acknowledge that the idea of recording this series came from Dr. Amit George.