Quaderabad Housing Estate Limited Vs. G.K.Moinuddin Chowdhury and others, 1 LNJ (2012) 551

Case No: First Appeal No. 49 of 2008

Judge: M. Enayetur Rahim,

Court: High Court Division,,

Advocate: Md. Abdul Quayum,,

Citation: 1 LNJ (2012) 551

Case Year: 2012

Appellant: Quaderabad Housing Estate Limited

Respondent: G.K.Moinuddin Chowdhury and others

Delivery Date: 2010-07-21

HIGH COURT DIVISION
(Civil Appellate Jurisdiction)
 
Mr. Farid Ahmed, J.
And
M. Enayetur Rahim, J.

Judgment
21.07.2010
 
Quaderabad Housing Estate Limited
...Appellant
Vs.
G.K.Moinuddin Chowdhury and others
...Respondents
 
Code of Civil Procedure (V of 1908)                                               
Order VII, rule 11
Arbitration Act (I of 2001)
Section 7
A suit can be proceeded splitting up the plaint against those defendants, against whom the cause of action exist. It is admitted in the plaint that regarding 56 transfer deeds and plots of schedule ‘B’ an arbitration took place and award had already been passed on those disputes against which an Arbitration Miscellaneous case has been filed before the learned District Judge, Dhaka which is pending. But with regard to 21 deeds out of 77 transfer deeds of schedule ‘B’ to the plaint and plots relating thereto, were not referred to the Arbitration Tribunal and the award has got no manner of connection with the said 21 transfer deeds for which the suit is very much maintainable regarding those 21 transfer deeds. Hence the plaint cannot be rejected as a whole. An application for rejecting the plaint can be filed before submitting written statement......(17 to 20)
 
Ismat Zerin Khan –Vs-The World Bank and others, 11 MLR (AD)58; Syed Masud Ali and others –Vs- Md. Asmatullah & others 32 DLR (AD) 39; Balwant Singh–Vs- The State Bank of India and others, AIR 1976, Punjab & Haryana, (Full Bench)316;Mst. Chandani –Vs- Rajasthan State and others, AIR 1962, Rajasthan 36; Jobeda Khatun –Vs- Momtaz Begum and others 45 DLR (AD)31;P.R. Sukeshwala and another –Vs- Dr. Devadatta V.S. Kerkar and another AIR 1995, Bombay,  227; Fisheries Research Institute and others –Vs- Mr. Bhuyain Ltd and others 4 BLC,126;Gutte–Vs- Punno AIR 1963, Madhya Prodash 96; Bangladesh Power Development Board and others –Vs- Md. Asaduzzaman Sikder 8 MLR (AD),241; Khandkar Abul Hussain –Vs- Government of the People’s Republic of Bangladesh and others 54 DLR 467; Abdul Jalil and other –Vs- Islami Bank and Bangladesh 20 BLD (AD)278, ref.

Mr. Abdul Quayum, Advocate
---For the Appellant.
Mr. Shah Md. Khasruzzaman, Advocate
---For the Respondent No. 1
Mr. A. Z. M Mohiuddin, Advocate
---For the Respondent Nos. 2, 8, 10, 13, 17, 43 & 50.
 
First Appeal No. 49 of 2008
 
Judgment
M. Enayetur Rahim, J:
 
          Plaintiff has preferred this appeal being aggrieved by the judgment and decree dated 06.11.2007 passed by the learned Joint District Judge, 3rd Court, Dhaka in Title Suit No.19 of 2007 rejecting the plaint of the suit under the provision of order VII Rule 11(d) of the Code of Civil Procedure, read with section 7 of the Arbitration Act, 2001.
 
2.     Plaintiff appellant instituted Title Suit No. 19 of 2007 in the 3rd Court of Joint District Judge, Dhaka impleading the present respondents as defendants for a declaration that the deeds of transfer described in the schedule-B to the plaint are void illegal, inoperative and not binding upon the plaintiff and for recovery of khas possession of the land described in the schedule to the plaint after evicting the defendants No. 2-83.
 
3.     Plaintiff’s case, in short, is that the plaintiff Quaderabad Housing Estate Ltd. is a Private Limited Company duly registered at the office of Register Joint Stock Companies and the plaintiff company was framed to carry on business on real state, building, apartment and other business. The properties descried in schedule ‘A’ to the plaint were purchased by late Abdul Qader Chowdhury, Abdul Momin Chowdhury, Abdul Barek Chowdhury and Abdul Barek and sons limited on different dates and years from the rightful owners and possessors. After such purchase they mutated their respective names in the office of the Revenue Authority, paid rent and got rent receipts. Subsequently amicable agreement was made between them and according to the said amicable agreement Abdul Momin Chowdhury got the landed properties described in schedule-‘A’ to the plaint.  Abdul Momin Chowdhury also purchased some properties, which form part of the schedule-‘A’ property. He also amalgamated his own purchased property with that of the inherited properties and for better and more beneficial use of the properties he desired to form a Real Estate Business and Alhaj Abdul Momin Chowdhury was made the Managing Director of the Company. The power of issuing allotment of plot, receipt of consideration, execution, registrations of document absolutely vest with the Managing Director Mr. Abdul Momin Chowdhury. The Articles of Association of the company do not empower any other Director to transfer the properties of the Real Estate. Mr. G. K. Moinudddin Chowdhury, the defendant No.1 is the eldest son of Alhaj Abdul Momin Chowdhury. He was not promoter director or a share holder of the Real Estate Company. The defendant No.1 was adopted a Director of the Real Estate Company on 28.08.1996 on allotment of 1000 shares. As per internal management of all the companies, business of the family was amicably arranged. The defendant No.1 was given responsibility of Qaderabad Housing Estate to look after the affairs of the company to manage, maintain, and prevent encroacher/ trespassers. He was also assigned to procure buyers of the plots, negotiate sale and he would introduce the buyers with the Managing Director and duly inform the buyers terms and conditions. The buyers have to pay the price as per terms of the memorandum and Articles of Association to the Managing Director and the Managing Director used to receive consideration, execute and register due conveyance of sale. Many plots have sold in the aforesaid manner. The defendant No.1 was not and is not empowered to transfer or execute any document of transfer. The Managing Director is the only person to execute the deed of transfer. The defendant No.1 in violation of the terms and conditions of the Memorandum of Article of Association transferred the plots numbering 54 secretly to different persons. He in collusion with buyers executed the deeds of transfer without the knowledge of the Managing Director. He received the consideration money, executed and registered deeds of sale in favour of the defendants No.2–55(b) illegally using the name of the company. The transfer, execution of the documents of the transfer and registration are all illegal, voids inoperative and collusive. The company is not bound by the illegal and unauthorized acts of defendant No.1. The defendants No.2-55(b) have not acquired any right, title and interest by virtue of those illegally created documents. The plaintiff company does not recognize them as purchasers/ allottees of the plots. When this forgery was detected the Managing Director, other Directors of the company became bewildered. In order to save the reputation of the plaintiff company and also to resolve the misunderstanding the dispute was referred to the Arbitration of 2(two) gentlemen namely Mr. Abdul Gafur Mazumder and Mr. Wahidar Rahman by a written reference dated 06.02.2006. The Arbitrators were to give the award within a period of 04.05.2006. The Arbitrators committed gross misconduct and gave a biased award and legalized the illegal acts of the defendant No.1 and the plaintiff company became prejudice. Against the said award the Managing Director and other Directors of the company have filed Arbitration Miscellaneous Case No. 764 of 2006 before the District Judge, Dhaka for setting aside the award dated 04.05.2006. The defendant No.1 during the period of arbitration proceedings and from the date of award till date also transferred 54 plots to the defendants No. 2-55(b). The plaintiff company was not a party to the arbitration agreement, the share holders of the plaintiff company and other companies referred the dispute for arbitration. The defendant No.1 has not honoured the award. He has been selling the plots of the company beyond the alleged award. He has not taken any step to transfer his shares of the plaintiff company and other companies to his father Alhaj Abul Momin Chowdhury. He has been flouting the terms of the award. The defendant No.1 has sold the properties by executing and registering sale deeds. The registered sale deeds can be cancelled only by a decree of the competent civil court. The arbitration proceeding ended with the award. The Managing Director of the Company on various dates cautioned the members of the Public not to purchase property/ plots from defendant No.1 by publishing public notices in the daily news papers. He also wrote letters to the Sub-Registrar, Mohammadpur, Chairman RAJUK, Assistant Commissioner (Land), Chairman House Building Finance Corporation and requested not to deal with the forged and collusive transfer made by the defendant No.1 in collusion with other defendants. The schedule land measuring total area 214.373 (Katha) as transferred by the defendant No.1 to the other defendants by the deeds as described in schedule-‘B’ to the plaint are void, illegal inoperative and not binding on the plaintiff company and liable to be cancelled. A cloud has been cast upon the title of the plaintiff company by the creation of schedule-‘B’ sale deeds.
 
4.     The defendant-respondent No.1 after entering into the suit filed an application under Order VII Rule 11 (d) of the Code of Civil Procedure read with section 7 of the Arbitration Act, 2001 for rejection of the plaint of the suit stating, inter alia, that on mere reading and going through the plaint it becomes clear that the plaintiff company categorically admitted in paragraph-9 of the plaint that the Managing Director and other Directors of the company to resolve misunderstanding amongst themself referred the disputes to the Arbitration of 2 Arbitrator namely Mr. Abdul Gafur Majumder and Mr. Wahidur Rahman by a written reference dated 06.02.2006 (Memorandum of understanding) and the said Arbitrators gave an award on 04.05.2006. It also admitted that on behalf of the present plaintiff company the Managing Director and other Directors of the company have already filed Arbitration Miscellaneous Case No.764 of 2006 in the Court of District Judge, Dhaka for setting aside the award and said Miscellaneous Case is still pending. It was further stated in the said application that from the averments made in the plaint the plaintiff admitted that the Managing Director and the others Directors of the plaintiff company were the parties to the Arbitration agreement dated 06.02.2006 as well as the award dated 04.05.2006 and the defendant No.1 was the other party of the same Arbitration agreement and award. The subject matter and or determining issues of the said Arbitration agreement and award as well as the subject matter and or determining issues of the present suit are same and that the present suit arising out of the same disputes, which have already been amicably settled and resolved by the family settlement acknowledged by both the parties through execution of a Memorandum of Understanding and or Arbitration agreement on 06.02.2006, followed by an award dated 04.05.2006 regarding the same schedule of deeds of transfer and plots and other related maters as it is most pertinently evident from the copy of the award filed by the plaintiff company through firisty. The instant suit is neither maintainable nor entertainable in its present from and nature and the jurisdiction of the same is barred under section 7 of the Arbitration Act (Salishi Ain) 2001 and hence the plaint of the present suit is liable to be rejected. It was also stated in the application that a fruitless litigation can not allowed to be continued for ends of justice and thus the plaint of the instant suit was liable to be rejected under section 151 of the Code of Civil Procedure.
 
5.     The plaintiffs filed written objection against the said application denying the material statement made on it stating, inter alia, that the defendant No.1 obtained an illegal and biased award. He was barred from selling any of the property. But he did not comply with the terms of the award. He has also transferred 21 plots after filing of the suit. The plaintiff has clear cause of action for cancellation of documents and since the defendant No.1 committed fraud and for that the cause of action has been clearly stated in paragraph 12 of the plaint. The disputes referred to the Arbitrators by the majority directors against the defendant No.1 the plaintiff Housing Estate Ltd. was not a party in the arbitration agreement. Moreover, the alleged arbitration agreement concluded by an illegally obtained award dated 04.05.2006. The present suit has been filed on 05.10.2006. The proceeding was not pending at the time of institution of the suit. The Arbitration Miscellaneous Case No.764 of 2006 has been filed by Mr. Abdul Momin Chowdhury and other Directors for setting aside the award and this Miscellaneous Case is not an appeal and not continuation of the disputes and as such the suit is maintainable and the application under order VII rule 11(d) for rejection of the plaint of the suit is liable to be rejected.
 
6.     The learned Joint District Judge after hearing the said application by the order dated 06.11.2007 allowed the application under order VII rule 11(d) read with section 7 of the Arbitration Act, 2001 and rejected the plaint of the suit holding that in view of the provision of section 7 of Arbitration Act, 2001 the suit is barred.
 
7.     Against the said judgment and decree the plaintiff has preferred this appeal before this Court.
 
8.     Mr. Abdul Quayum, learned Advocate of the plaintiff appellant submits that the learned Joint District Judge erred in law in rejecting the plaint of the suit inasmuch as he failed to consider and appreciate the purport and scope of order VII rule 11 of the Code of Civil Procedure. He further submits that before filing written statement the rejection of the plaint on the ground of maintainability of the suit is not permissible in law. In this connection he refers the case of Ismat Zerin Khan –Vs-The World Bank and others, reported in 11 MLR (AD) Page-58. Mr. Quayum admitting the provision of section 7 of the Arbitration Act, 2001 submits that the subject matter of disputes which referred to the arbitration can not be the subject matter or issues in the present suit and same is barred under the said law. But he extraneously argues that the subject matter of dispute or issue with regard to the properties and plots of schedule-‘B’ to the plaint, which were not referred to the arbitration, in respect of those properties and plots and deeds of transfer the present suit is very much maintainable and the learned Joint District Judge in rejecting the plaint of the suit as a whole failed to consider and appreciate this legal aspect of the present suit. The learned Advocate drew our attention to schedule-‘B’ to the plaint, where description of the sale deeds and plot members, which sought to be cancelled have been mentioned and submits that from the said schedule it is evident that 77 sale deeds in respect of 77 plots have been mentioned but the arbitration took place with regard to 56 plots only and as such the sale deeds and plots which were not the subject matter or issue in arbitration proceeding, the suit is vary much maintainable in respect of those sale deeds and plots. In support of his contention he referred the case of Syed Masud Ali and others –Vs- Md. Asmatullah & others reported in 32 DLR (AD) page 39, where their lordships held that the plaintiffs suit to the extend of 2nd schedule land was dismissed as not maintainable but they may proceed with regard to the 1st schedule land if the plaintiff is so desired to proceed. He also refers the case of Balwant Singh–Vs- The State Bank of India and others, reported in AIR 1976, Punjab & Haryana, (Full Bench) Page-316 and the case of Mst. Chandani –Vs- Rajasthan State and others, reported in AIR 1962, Rajasthan Page-36. In those cases it was held that plaint disclosed cause of action in respect of particular claim against some of the defendants, the plaint can not be rejected in its entirety.
 
9.     On the other hand Mr. Shah Md. Khasruzzaman, learned Advocate appearing on behalf of the defendant respondent No.1 submits that the application under order VII rule 11 of the Code of Civil Procedure is very much maintainable before filing the written statement and he submits that at any stage of the suit the application under the said order is entertainable and maintainable. It is at all not necessary to wait for filing of the written statement and in support of his said contention he refers the case of Jobeda Khatun –Vs- Momtaz Begum and others reported in 45 DLR (AD) Page-31 and the case of P.R. Sukeshwala and another –Vs- Dr. Devadatta V.S. Kerkar and another reported in AIR 1995, Bombay, Page 227. Mr. Zaman further submits that the learned Joint District Judge considering the provision of section 7 of the Arbitration Act, 2001 rightly rejected the plaint of the suit holding that the suit is barred under the provision of section 7 of the Arbitration Act, 2001 and it is now settled principle of law that where the parties to a dispute have pursued arbitration proceeding resulting in an award, none of them can after the award is made, get rid of it by ignoring the same. He referring the paragraph-9 of the plaint argues that the plaintiff admitted that to resolve misunderstanding they referred the dispute to the arbitration of 2(two) gentlemen by a written reference dated 06.02.2006 and award has been passed on the selfsame disputes and thus the suit or the same issue/ dispute is not maintainable and the Trial Court did not commit any error or illegality in rejecting the plaint. He also submits that the suit can not be proceeded for part claim/claims by split up the plaint as argued by the learned Advocate of the appellant. Mr. Khasruzzaman, to substantiate his argument referred the case of Fisheries Research Institute and others –Vs- Mr. Bhuyain Ltd and others reported in 4 BLC, Page-126, the case of Gutte -Vs- Punno reported in AIR 1963, Madhya Prodash Page-96 and the case of Bangladesh Power Development Board and others –Vs- Md. Asaduzzaman Sikder reported in 8 MLR (AD), Page-241. In those cases it has been held that the subject matter of the arbitration proceeding, where ultimately an award was given, on the same cause of action, the Civil Suit is barred under the Arbitration Act and the plaint was rejected under Order VII Rule 11 of the Code of Civil Procedure.  
 
10.   Mr.A.Z.M. Mohiuddin, the learned Advocate appearing for the respondent Nos. 2, 8, 10, 13, 17, 43 and 50, though the said respondents did not file any application under order VII rule 11 of the Code of Civil Procedure before the trial Court, adopting the legal submission of the learned Advocate of the respondent No.1 submits that Mr. Alhaj Abdul Momin Chowdhury, the Managing Director of the plaintiff company is the father of the defendant No.1 and the father and sons with an ill motive for illegal gain and to harass the purchaser defendants collusively instituted the present suit. He also refers the decisions cited by Mr. Zaman.
 
11.   Heard the learned Advocate of the respective parties, perused the impugned judgment and decree, the relevant documents before us.
 
12.   In view of the submission of the learned Advocate of the respective parties moot question before us is that whether the plaint of the present suit be rejected as a whole or the suit can be proceeded splitting up the plaint against some of the defendants, against whom the cause of action exist.
 
13.   The facts of the case of Syed Masud Ali and other versus Md. Asmatullah and others reported in 32 DLR (AD) Page-39, as referred by the learned Advocate of the plaintiff appellant, was that a Title Suit was filed in the Court of Munsif challenging the enrolment of Waqf in view of Sections 50 and 102 of the Waqf Ordinance, 1962. In the said suit the plaintiff divided the suit properties under two schedules and had claimed ownership and possession over both of them. With regard to the first schedule plaintiff sought a declaration of his title but with regard to the 2nd schedule he prayed not only title to the land but for nullification of the enrolment made by the Administrator of Waqfs. The defendant entered appearance in the said suit and before filing written statement raised the question of competency of the suit and the trial Court and High Court Division in revision concurrently held against the defendant that is refused to reject the plaint. Appellate Division in appeal considered whether the said suit regarding 2nd schedule land was competent. Appellate Division allowed the said appeal in part and set aside the decision of the High Court Division and trial Court and held to the effect:
 
“The plaintiff’s suit to the extent of 2nd schedule land is dismissed as not maintainable but the suit may proceed with regard to the first schedule land of the plaint if the plaintiff so desire to proceed.”
 
14.   In the case of Khandkar Abul Hussain –Vs- Government of the People’s Republic of Bangladesh and others reported in 54 DLR page 467, a Division Bench of the High Court Division has held:
 
“When two distinct causes founded on distinct and separate allegations are brought before the Court and if one cause is clearly barred under any provision of law the court is authorized under the law and can legitimately try other cause for granting relief which is not related to the barring provision”.
 
15.   In the said case it has also been held:
 
”The Subordinate Judge could have split up the suit for trying the second cause which is for damages for defamatory statement and for implicating the plaintiff in a false case.”
 
16.   In the case of Mst. Chandani -Vs- Rajasthan State and other, reported in AIR 1962 Rajasthan, Page-86 it has been held:
 
“The plaint shall be rejected where the suit appears from the statement in the plaint to be barred by any law; that rule, however, would be attracted into its full application where the suit as a whole would be so barred, and different considerations may reasonably arise where such a suit happens to be barred against some of the defendants but may still be good, against the others.”
 
17.   In view of the above proposition of law we have no hesitation to hold that a suit can be proceeded splitting up the plaint against those defendants, against whom the cause of action exist.
 
18.   In the instant case the plaintiff in the plaint admitted that with regard to 56 deeds of transfer and plots of schedule-‘B’ arbitration took place on the basis of a mutual agreement; an award has already been passed on those disputes/issues and challenging the said award Arbitration Miscellaneous Case No.764 of 2006 filed by the plaintiff before the learned District Judge, Dhaka is still pending. This admission of the plaintiff from a plain reading of the plaint appears to us that the suit with regard to 56 deeds of transfer and plots of schedule-‘B’ is barred by the provision of section 7 of the Arbitration Act, 2001. But 21 deeds out of 77 deeds of transfer of schedule-‘B’ to the plaint and the plots relating to said 21 sale deeds were not referred to the Arbitration tribunal as per the Arbitration agreement dated 06.02.2006 and the award dated 04.05.2006 has got no manner of relation/ connection with the said 21 deeds of transfer and as such the suit is very much maintainable with regard to those 21 deeds of transfer and plots. Thus the learned Joint District Judge erred in law in rejecting the plaint of the suit as a whole.
 
19.   The submission of Mr. Quayum relying the decision reported in 11 MLR (AD) Page-58 that the application under order 7 rule 11 is not maintainable before filing the written statement is not applicable in the instant case. In the case of Abdul Jalil and other -Vs- Islami Bank and Bangladesh reported in 20 BLD (AD) Page-278, it has been held:
 
“A plaint may be rejected under Order 7 Rule 11 of the Code merely on a plain reading of the plaint but in exceptional circumstances the Court may invoke its inherent jurisdiction and can throw the plaint out in limini. The plea of implied bar should be decided on evidence unless the fact disclosed in the plaint clearly indicate that the suit is not maintainable. In exceptional cases recourse may be taken even under section 151 of the Code.”      
 
20.   From the said judgment it also appears to us that in the suit the defendant did not file any written statement and on behalf of the defendant the argument was made that written statement had not been filed by the defendant, despite that the Appellate Division has taken the above view. Further it appears from the case of Syed Masud Ali and other -Vs- Md. Asmatullah and others reported in 32 DLR(AD), Page-39, which was cited by Mr. Quayum, that in the said case before filing the written statement defendant raised the question of competency of the suit. As such the submission of Mr. Quayum that before filing the written statement the application under order 7 rules 11 (d) is not maintainable is not tenable in law.
 
21.   Having discussed as above we find merit in the appeal. The appeal is allowed-in-part. The judgment and decree dated 06.11.2007 is hereby modified to the effect that the suit will proceed with regard to 21 sale deeds and plots out of 77 sale deeds and plots of schedule-‘B’ to the plaint, which were not referred to the Arbitration tribunal as per agreement dated 06.02.2006 and not the subject matter and or issue of the award dated 04.05.2006. The plaintiff is at liberty to amend the plaint for getting appropriate relief from civil Court. However, there is no order as to costs.  
 
        Send down the lower Court records at once.
 
Ed.