LexKORES (INDIA) LTD. versus BANK OF MAHARASHTRA AND ORS.
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A
KORES (INDIA) LTD.
v.
BANK OF MAHARASHTRA AND ORS.
NOVEMBER 16, 2006
B
[H.K. SEMA AND P.K. BALASUBRAMANYAN, JJ.]
Practice and procedure-Non-impleading of necessary party in appea/-
Effect-High Court had passed order in favour of a party-That party not
impleaded in appeal-Passing order in the absence of that party that may
C prejudice him or may interfere with the working of the order passed by the
High Court-Held, not proper-On facts, High Court asked lessee to pay
additional sum other than amount agreed in the lease deed, to Citibank-
On appeal by lessee, Citibank not impleaded-Held, appellant could have
challenged its obligation to pay anything more, however by not impleading
D Citibank who might be affected by decision, precluded itself from raising that
challenge.
lnterlocuto1y order-Appeal against-Litigant not bound to appeal
against every interlocut01y order passed against him-He can wait until the
final order is passed and in appeal against that final order challenge all
E orders leading to the final order and affecting that decision.
'J' leased out its industrial undertaking to appellant-lessee for a term
of 11 years on an annual rent of Rs.20 lakhs. A sum of Rs.11 lakhs was paid
as security by the appellant and every year a sum ofRs.1 Jakh therefrom was
to be adjusted towards Rs.20 lakhs payable. 'J' had borrowed funds from
F respondent-bank. On its failure to repay the borrowed sum, respondent-bank
filed recovery suit before High Court. Respondent-Bank also moved an
application for appointment of receiver for the properties of 'J'. This
application was rejected by Single Judge. Meanwhile 'J' had entered into an
arrangement with 'Citi Bank' for liquidation of its loan by directing the
G appellant to pay the amount of Rs.20 lakhs to that Bank.
Respondent-bank filed an appeal before Division Bench of High Court.
By an interim order, Division Bench appointed a receiver, and also directed
the receiver to appoint the appellant as his agent in respect of the property.
Subsequently, Division Bench confirmed the order appointing the receiver.
H
98
•
KORES {INDIA) LTD. 1-. BANK OF MAHARASHTRA
99
The order also directed that the appellant should continue to pay to the A
receiver who in turn would pay over the said amount to 'Citi Bank' and that
the receiver should separately fix and collect royalty in respect of the plant
and machinery.
The receiver got the valuation done by the valuer and accepted the
B
written down value suggested by the valuer but reduced the royalty to about
10% of the written down value and fixed it at Rs.8,46,000/- and directed that
a sum of Rs. 70,000/- per month had to be paid by the appellant towards royalty
for the plant and machinery in addition to the sum of Rs. 20 lakhs payable for
the immovable property.
The fixation of royalty was challenged by the appellant before the c
Division Bench, whereby it directed that the appellant could question the
amount of royalty fixed by the court receiver before the Single Judge. The
appellant thereupon moved the Single Judge and questioned the direction to
pay royalty at all and further questioned the quantum. Meanwhile, the suit
was transferred to the Debts Recovery Tribunal.
D
The Tribunal rejected the application of the appellant challenging the
liability imposed on it for paying royalty at Rs. 70,000/- per month. On the
aspect of liability, the Tribunal opined that the appellant having acquiesced in
the order of the Division Bench regarding liability, the same could not be
questioned and the challenge had to be limited to the quantum and having E
considered the approach made by the receiver it held that there was no reason
to interfere with the quantum of royalty fixed as payable. The appellant
unsuccessfully challenged that order before the Appellate Tribunal and the
High Court. Hence the present appeal.
Partly allowing the appeal, the Court
F
HELD: 1. 'Citi Bank' to whom the sum of Rs. 19 lakhs was payable by
. '
the appellant described as rent of the immovable property by the order of the
High Court, has not been impleaded in this appeal. It is therefore not possible
to pass any order in this appeal that ma) prejudice Citi Bank or that may G
interfere with the working of the order passed by the High C(lurt in favour of
'Citi Bank'. This aspect may have relevance while considering some of the
contentions raised on behalf of the appellant. [I 04-A-BJ
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