HON’BLE SRI JUSTICE G. BHAVANI PRASAD A.S.No.1728 of 1988
JUDGMENT:
This appeal is directed against the judgment and decree in O.S.No.259 of 1981 on the file of the I Additional Subordinate Judge, Kakinada dated 09.03.1988.
The factual background for the appeal is that the deceased – first appellant filed the suit for recovery of a sum of Rs.20,000/- with subsequent interest and costs alleging that she was the agent of the defendant under an agreement dated 05.04.1974 to sell the goods indented by the plaintiff which the defendant shall supply subject to the security deposit with the defendant. The sale of stocks was agreed to be on commission basis at the prices marked by the defendant and the premises was taken by the plaintiff on lease from one Srinivasa Rao. The expenses for running the business had to be borne by the plaintiff and the plaintiff deposited about Rs.50,000/- with the defendant for supply of stocks. The quantum of sales effected by the plaintiff caused envy to the defendant and as there was no harmonious relationship between the parties, the plaintiff terminated the agency by a notice dated 16.12.1979. The plaintiff was forced to file O.S.No.957 of 1979 on the file of the I Additional District Munsif Court, Kakinada for injunction restraining the defendant from interfering with the premises and stock in trade of the plaintiff and an ex parte injunction was granted in favour of the plaintiff in I.A.No.1902 of 1979 on 19.12.1979. The defendant also filed an application in I.A.No.1904 of 1979 for an injunction against the plaintiff restraining her from opening the shop and carrying on any business and obtained injunction on 31.12.1979 maliciously.
The injunction was intended to cause enormous loss to the plaintiff including loss of business, earning of profits, payment of rents and salaries to the employees and causing disrepute. The ex parte injunction granted in I.A.No.1902 of 1979 was vacated preventing the plaintiff from carrying on any trade or avocation in her premises. When the plaintiff moved for interim stay of operation of the order of injunction in I.A.No. 1904 of 1979, the defendant opposed the same and it was dismissed. When the plaintiff preferred CMA.No.3 of 1980, the defendant protracted the proceedings and, ultimately, CMA.No.3 of 1980 filed by the plaintiff was allowed on 26.04.1980. The order had become final, against which the defendant did not take any further proceedings and, hence, the suit for recovery of damages to a tune of Rs.40,000/- at about Rs.3,000/- per month from 31.12.1979 to 26.04.1980. The plaintiff also offered by a memo seeking the defendant to take away the stock outstanding on 31.12.1979 and the defendant did not take the stock which is lying idle in a damaged condition. The defendant filed O.S.No.62 of 1980 for rendition of accounts etc. Hence the suit.
The defendant resisted the suit contending that the shop was opened in about 1967 for which the plaintiff was appointed as manager upon mutually agreed terms and conditions embodied in the agreements executed between the parties from time to time. The plaintiff was only the manager and custodian of the shop of the defendant and the lease of the premises was taken for the benefit of the defendant, benami in the name of the plaintiff. The shop was always run under the name of the defendant and the commission was fixed taking into account all the expenses for running the shop. While so, the defendant had Rs.55,000/- with it to the credit of the plaintiff as security deposit and suddenly the plaintiff designed to claim herself to be the owner of the shop in pursuance of which scheme, she filed O.S.No. 957 of 1979 with false allegations and obtained ex parte injunction in I.A.No. 1902 of 1979. Hence the defendant was forced to file I.A.No. 1904 of 1979 for temporary injunction and the injunction obtained was not malicious or invalid. Though CMA.No. 3 of 1980 was allowed on the ground that temporary injunction cannot be issued at the instance of the defendant, but as the defendant filed O.S.No. 62 of 1980 separately, the result of the CMA.No. 3 of 1980 was not pursued any further. Alleged damages of Rs.40,000/- at about Rs.3,000/- p.m. are false and there was no bona fide offer to the defendant to take back the stocks. Hence the defendant sought for dismissal of the suit with costs.
On such pleadings, the trial Court framed appropriate issues:
i. Whether obtaining of interim injunction in I.A.No.1904 of 1979 was malicious intending to prevent the plaintiff from carrying on her business?
ii. Whether the plaintiff has any right to carry on such business with the stock in trade of the defendant after termination of the agency?
iii. Whether the plaintiff suffered any damages?
iv. Whether the defendant is liable for the same?
During trial PWs.1 and 2 and DW.1 were examined and Exs.A.1 to A.12 and Ex.B.1 were marked.
The trial Court rendered the impugned judgment noting that the plaintiff took the premises on lease from one V.Sesha Satyanarayna for carrying on the business as the agent of the defendant on the agreed terms and conditions. The strained relationship between the parties was noted to have led to the litigation and the plaintiff was noted to have been prevented from carrying on any business in the premises due to the order in I.A.No. 1904 of 1979. The trial Court noted that the defendant did not dispute the agreement dated 05.04.1974 and under the agreement the shop was run and bills were issued in the name of the defendant by the plaintiff who had to appropriately account for the business from time to time. The trial Court also noted that CMA.No.3 of 1980 (CMA.No.5 of 1980) was allowed with costs vacating the interim orders on 26.04.1980 and it had become final. The trial Court further noted that it is for the plaintiff to prove that the defendant obtained the interim injunction maliciously and such malice can only be inferred from the facts and circumstances of each case and cannot be the subject of direct evidence. With reference to the precedents on the aspect, the trial Court observed that injury need not necessarily mean injury to person or property but also may be injury to reputation etc. The trial Court further observed that if there was no malice or want of reasonable and probable cause in obtaining an interim injunction, a suit for damages is unsustainable. When the injunction is not without jurisdiction, it cannot be considered unlawful and when being issued by a Court against a party, such a proceeding cannot be considered malicious and even the assumption of any action with malice will not straight away justify a claim for damages unless it is proved that the action was initiated without a reasonable and probable cause. The trial Court thus concluded that the plaintiff has to therefore prove the liability of the defendant in tort for damages and for malicious prosecution and the plaintiff must plead and prove all the necessary ingredients including malicious abuse of the process of the Court and the actual damages suffered.
The trial Court went on to note the admissions of the husband of the plaintiff as PW.1 about the nature of the business and noted that in fact PW.1 and his wife were awarded prizes being the highest sellers for 1978-79 in the anniversary function of the defendant at Vijayawada on 10.11.1979. The trial Court further observed that the plaintiff and some shop-keepers at Nellore and Amalapuram conspired together to institute similar proceedings and the plea taken by the defendant about the attempt by the plaintiff to appropriate the stock and business of the defendant for herself was considered reasonable and probable on the facts and circumstances of the case. The trial Court observed that when PW.1 did not specifically allege in the evidence about any malice or absence of reasonable or probable cause in filing I.A.No.1904 of 1979, the plaintiff cannot sustain the claim for damages. The trial Court also observed that it was admitted that even while the plaintiff was selling the stock of the defendant and was taking commission, the name of the shop was changed into Metro Shoe Company on 15.12.1979 unilaterally by which time the stock worth Rs.50,000/- to Rs.60,000/- belonging to the defendant was with the plaintiff. It was also noted that admittedly the plaintiff sold the stock worth Rs.12,000/- to Rs.13,000/- from out of stock of the defendant from 15.12.1979 till the date of interim injunction in I.A.No.1904 of 1979. These unilateral actions of the plaintiff were considered by the trial Court to be providing reasonable and probable cause for the defendant to initiate action under I.A.No.1904 of 1979. The trial Court further went on to note that the defendant filed O.S.No.62 of 1980 for rendition of accounts and has not preferred any appeal and noted that CMA.No.3 of 1980 was allowed on the ground of absence of any damage or wastage to the property of the defendant due to change of signboard of the shop. The trial Court, apart from observing absence of any malice, also noted that the evidence of the partners of the defendant is clear about the disentitlement of the plaintiff to appropriate the stock of defendant and sell the same as if it belonged to her. With reference to the evidence of DW.1 about the actual damages, the trial Court observed that the oral and documentary evidence produced by the plaintiff appears to be disclosing manipulation of Exs.A.6 to A.9, accounts unsupported by any vouchers or the oral evidence of any person who has maintained such accounts. PW.2 was observed to be a person working under the plaintiff as a part-time accountant since long and the non-examination of the employees to whom salaries were allegedly paid was also taken adverse note of. The accounts were noted to be not containing any signatures or stamps of the auditor or the Income Tax authorities to indicate genuineness and, hence, the trial Court concluded that the actual suffering of damages by the plaintiff was also not proved. Consequently, the trial Court dismissed the suit with costs.
The deceased - first appellant filed the appeal alleging that the trial Court should have appreciated the tenability of claim for damages based on wrongful, illegal and malicious act of the defendant in obtaining injunction against the plaintiff without any reasonable and probable cause. The trial Court had also gone wrong in not accepting the claim of the actual damages sustained.
The first appellant died during the pendency of the appeal and appellants 2 and 3 were brought on record as the legal representatives of the deceased - first appellant.
Sri V.L.N.G.K.Murthy, learned counsel for the appellants, and Sri V.Raghu, learned counsel for the respondent, are heard.
The points for consideration are:
1. Whether the action of the respondent in obtaining injunction in I.A.No.1904 of 1979 is vitiated by malice or absence of reasonable and probable cause?
2. Whether the plaintiff established the extent of damages suffered due to such action of the defendant?
3. To what relief ?
Point (1):
The principles governing the action based on malicious prosecution and consequently claiming damages are well settled and they are extracted in extenso in the impugned judgment.
It is seen from the allegation in the plaint itself that the ex parte order of interim injunction granted in favour of the plaintiff in I.A.No.1902 of 1979 in O.S.No.957 of 1979 was vacated and interim injunction granted in I.A.No.1904 of 1979 by the trial Court was confirmed on merits which was then subjected to appeal in CMA.No.3 of 1980. It is thus clear that a competent Civil Court found on merits, in pursuance of a prima facie adjudication, that the defendant was entitled to seek the injunction sought for in I.A.No.1904 of 1979. The plaintiff’s husband as PW.1 in the suit, while reiterating the contentions, admitted the factual background and admitted that the plaintiff was only an agent of the defendant for running the business as per the agreed terms and conditions on commission basis and could not have claimed ownership of the stock in trade supplied by the defendant. PW.1 also admitted that the plaintiff removed the name board of the shop on 15.12.1979 without informing the defendant and he also admitted that the registered notice said to have been given was subsequently issued on 16.12.1979. The admission of PW.1 is also that the plaintiff appropriated the entire stock in the shop for herself towards the deposited amount due to her and the commission due upto that date on 15.12.1979 itself, obviously without information to the defendant and without giving any notice to it. The name of the shop was changed and the business was carried on further by the plaintiff under the name of Metro Shoe Company without settling her transactions with the defendant as per the terms and conditions of the contract of agency. The daily statements of sales and sales amounts were not sent to the defendant after 15.12.1979 even according to PW.1 and, therefore, if the defendant sought for an injunction against the plaintiff in I.A.No.1904 of 1979, the defendant cannot be said to be having absolutely no reasonable and probable cause or to be acting with malice. The differences in running the agency being admitted, the parties having different perception about the reasons for the failure of the contractual obligations cannot by itself be termed as an indication of any malice and the trial Court had, in fact, concurred with the perception of the defendant as seen from the confirmation of the injunction granted in I.A.No.1904 of 1979.
While it is not necessary to replicate the elaborate reasons assigned by the trial Court for its conclusions, it cannot be in dispute that mere approach to a judicial forum for relief cannot by itself be the basis for any action on malicious prosecution unless something more is positively established for such claim for damages and the order of the Judicial Tribunal on merits cannot be considered to provide the basis for an action for malice. When PW.1 did not specifically allege that the defendant acted without any reasonable or probable cause or that the defendant acted with malice and PW.2 was examined only with reference to the accounts during the relevant period and when DW.1 on behalf of the defendant positively denied the allegations about the intentions behind I.A.No.1904 of 1979, any assumptions of malice or absence of reasonable and probable cause cannot be considered to be probablised merely because the proceedings ended in favour of the plaintiff in CMA.No.3 of 1980 (CMA.No.5 of 1980). Though the injunction in force would have interfered with running the business by the plaintiff, on the own admissions of PW.1 about the contract of agency between the parties admittedly subsisting till 15.07.1979 and the manner in which the plaintiff attempted to put an end to such a relationship by taking control of the stock in trade of the defendant in her possession, the grievance of the defendant cannot be considered totally unjustified and, therefore, the conclusion of the trial Court of the absence of malice or absence of reasonable and probable cause cannot be deviated from.
Point (2):
The trial Court gave elaborate reasons which need no replication as to why any proof of actual damages suffered by the plaintiff cannot be considered to be forthcoming. In the absence of probablising authenticity and genuineness of the accounts with reference to any verification by the income tax authorities or sales tax department or any other officials and in the absence of any indication of verification or scrutiny of accounts by any auditor, the accounts could not have been acted upon by the Civil Court. Even otherwise when there were no vouchers in support of the accounts and the persons who prepared the accounts were not examined, the uncorroborated version of PW.1 and the equally interested version of PW.2 could not have been taken as the basis for the proof of any actual damages. When the plaintiff admittedly carried on business under the name and style of Metro Shoe Company with the stock in trade supplied by the defendant and there was no proof of closure of the shop in obedience to the interim order of injunction, the conclusion of the trial Court in this regard also cannot be considered wrong and, consequently, this point has to be answered against the appellants.
Point (3):
In view of the conclusions on points 1 and 2, the appeal has to fail and is, accordingly, dismissed without costs.
G. BHAVANI PRASAD, J Date:29.06.2010 usd