H J DORAIRAJ Vs. VISWANATHA RUPA AND CO

JUDGEMENT

(1.) THIS appeal is directed against the order of Maharajan, J. , dismissing Appln. No 1200 of 1970 in C. S. No. 135 of 1967. Though the decision in the appeal does not turn upon the facts of this case, it is desirable to set out the facts for the purpose of understanding as to how this appeal arises. The appellant herein was the first defendant in C. V. 135 of 1967. A Greek ship "s. s. Stamatis", which was caught in the cyclone of November, 1966, ran aground opposite to the Marina at Madras. The appellant herein agreed to purchase the ship from Messrs. Diana Maritime corporation, the owners thereof for Rupees seven lakhs and deposited a sum of rs. 50,750/- towards the sale price. Being unable to pay the balance of the sale price, he entered into negotiations with the owners of the ship, who agreed to reduce the sale price to Rupees 3,30,000/-, as well as to adjust the deposit made by him towards the agreed sale price. He had hardly two days left for payment of the balance and therefore, he entered into a hurried agreement with the plaintiffs in the suit, whereby the plaintiffs undertook to pay the sum of Rs. 2,80,000/-to the owners of the ship on behalf of the appellant on condition that the appellant paid them a remuneration equal to 75 per cent of the amount of investment and agreed to repay the entire amount within six months time. It was also agreed between the plaintiff and the appellant that if any necessity arose, the plaintiffs should extend the time for payment by three months. The appellant also agreed on 10-7-1967 to give security by pledging the ship to the plaintiffs and executing in favor of the second plaintiff an irrevocable power of attorney for the purpose of enabling the plaintiffs to arrange for the work of breaking up the ship and dismantling the parts thereof and to recoup themselves out of the sale proceeds. One of the clauses in the agreement provided that the plaintiffs should be put in possession of the ship. Subsequently, the plaintiffs instituted the suit C. S. 135 of 1967 on the file of this court (1) for a declaration that the 's. s. Stamatis' was under a valid pledge to the plaintiffs and that the plaintiffs were entitled to sell the ship or part or parts thereof and recoup themselves the amount of advance and other amounts including the remuneration due to them under the contract dated 10-7-1967, (2) for a mandatory injunction restraining the appellant or his agents from making contracts to sell, or selling and delivering the said ship or any part or parts thereof, including the fixtures, fittings, loose materials inside the ship or dealing with the same in any manner except with the concurrence of the plaintiffs and on the terms that the price shall be paid directly into the hands of the plaintiffs, (3) for a preliminary decree against the appellant for rendition of accounts in respect of moneys received from defendants 2 and 3 or from any other parties on any transactions relating to the ship, either by way of sale price or advance and for such amounts as may be found due to the plaintiffs on taking such accounts, (4) for the costs o suit and (5) for such other relief's. In this suit, five persons were originally arrayed as defendants, including the appellant herein as the first defendant. The second defendant was impleaded because the plaintiffs came to know from a notice issued by him that the appellant had entered into a contract with the second defendant for supply of re-reliable materials as per an agreement allegedly executed on 5-7-1967. The third defendant was impleaded because it was brought to the notice of the plaintiffs that the appellant had received an advance of Rs. 30,000/- from him against the supply of non-ferrous metals which the appellant had promised to deliver to the third defendant. The collector of Customs was impleaded as the fourth defendant because he might have a prior right for duty. The fifth defendant is the Commissioner of Police, madras, and he was impleaded as the receiver of the wrecked ship under a notification issued by the Government of India under the Merchants Shipping Act, 1958.

(2.) THE appellant in his answer raised several contentions, one of them being that the terms of the contract requiring him to pay 75 per cent by way of remuneration had been inserted in the contract without his own volition and under coercion. On 6-10-1967, that is to say, long before the filing of the answers by the defendants, in pursuance of Applns. Nos. 2096 of 1967 and 2157 of 1967 made by the plaintiffs, Ramamurti, J. , passed an order whereby he appointed the appellant and sri R. Padmanabhan, Advocate, as Joint Receivers of the wrecked ship. It was the appellant who invited the Court in the interests of himself and the plaintiffs and in the interests of purchasers to appoint the receivers for the purpose of complying with all the formalities of the Customs department and doing whatever might be necessary for them to selling and deliver parts of the wrecked ship. The Joint receivers were directed to file monthly statements of accounts and reports about their doings. On 21-3-1968 the learned Judge passed an order removing the appellant and his Co-Receiver from Joint Receivership and appointed Sri Krishna rao, Advocate, and the second plaintiff as Joint Receivers. Subsequently, the learned Judge, by order dated 27-4-1968, appointed Sri T. N. C. Srinivasavaradacharya, and Shri K. Sarvabhauman, as Joint Commissioners giving detailed directions to them to invite offers for the sale of the component parts of the ship. It was at this stage a Bombay firm by name Messrs. Viswanatha Rupa and Co. , appeared on the scene through their counsel and made an offer, the terms of which were contained in Ex. R-13. One pre-condition that Rupa insisted upon before his offer was accepted was that the claims of the plaintiffs, the second defendant, the third defendant and the Customs department against the appellant should be provided for out of the moneys to be advanced by Rupa and that messrs. Viswanatha Rupa and Co. , be permitted to dismantle the ship without any let or hindrance without the company getting involved in any litigation. The offer of Viswanatha Rupa and Co. , was discussed in open court and then in the chambers of the learned Judge at a number of hearings. Ultimately the parties were able to come to some agreement as per Ex. R-1 (a) dated 12-7-1968. This agreement was superseded by a fresh and final agreement as per Ex. R-1 dated 19-7-1968, which was executed by Viswanatha Rupa and the appellant.

(3.) THIS final agreement was produced into Court by both the parties and the court was celled upon to enforce the terms of that agreement. On an oral application made by Rupa, Rupa was impleaded as the seventh defendant. As per this agreement, Rupa was to dismantle, break and remove the components of the ship 's. s. Stamatis' at the price quoted in the agreement and pay for the parts so removed on the basis of actual weights at the rates quoted. Rupa also deposited rs. 5,70,000/- into Court, of which a sum of Rs. 36,000/-was to be paid to the appellant subject to the orders of the court. The appellant actually applied for and received Rs. 31,000/ -. In pursuance of the said agreement, a sum of Rs. 3,90,000/- was paid to the plaintiffs in the suit in full quit of their claim against the appellant. Likewise, the amounts due to the second defendant and the third defendant by the appellant were also paid out of the sum deposited by Rupa. Further, a sum of Rs. 1,70,000/-out of the amount deposited by Rupa was earmarked for any payment that the appellant might have to make by way of customs duty to the fourth defendant. The payment to the plaintiffs was made on 30-7-1968 in full quit. Notwithstanding this full settlement of the claim of the plaintiffs in the suit, no order was passed terminating the suit itself. But fresh disputes began to crop up between the appellant and the seventh defendant as to the meaning and construction to be put on the several clauses of the agreement ex. R-1. The court went into those disputes and passed orders from time to time adjudicating upon those disputes. Ultimately, the judgment was passed on 14-21969 which disposed of not only the suit C. S. 135 of 1967 but also a connected suit C. S. 124 of 1968, which had been withdrawn from the City Civil Court to this court. As per this judgment, the appellant was directed to pay Rs. 15,000/-by way of costs to Viswanatha Rupa and Co. The learned Judge further directed that rupa would be entitled to the value of ferrous and non-ferrous materials used or found in all the miscellaneous items and that the parties would be at liberty to apply for further directions for the fixation of the amount and payment thereof. The connected suit was dismissed by the learned Judge. It is thereafter the present application, Appln. No. 1200 of 1970, along with other applications, was filed by the appellant before this court. Application No. 1200 of 1970, which has given rise to this appeal, purports to have been preferred under Order XIV, Rule 8 of the Original Side Rules and Sections 144 and 151, C. P. Code. The prayer in this application is-