JUDGMENT B. K. Roy and O. Bhatt. JJ.
1. Whether for the non-payment of the Bill of a closed connection telephone of a Public Limited Company, the telephone of the wife of the Managing Director of that Company, which is under liquidation, can be disconnected by the Telecom Authority by invoking Rule 433 of the Indian Telegraph Rules?, is the short question for our adjudication in this writ petition.
2. Firstly the prayer for the petitioner. Her prayer is to quash the order dated 26.12.1990 and the direction as contained in the letter dated Agra 1.6.1991 addressed to the petitioner of the Account Officer (T. R.) Agra Telephones, Agra (respondent No. 2) as contained in Annexures-5 and 11 respectively.
2A. The relevant part of the order, as contained in Annexure-5, reads thus-
"Sub--Disconnection of Phone No. 61743 Kindly disconnect Phone No. 61743 in lieu of 0/- dues of Closed connection No. 73579."
2B. The substance of the communication made vide the letter as contained in Annexure-11 is that she is requested to deposit the due amount of Rs. 3,455 in regard to Telephone No. 73579, failing which the connection of her Telephone No. 61743 can be disconnected and that it is expected that she will not give such an opportunity to the Department.
3. The petitioner's case is as follows--Agra Construction Company Ltd.. Agra, was a Public Limited Company having its Branch Office at Sanjay Place, Agra. Telephone No. 73579 belongs to the said Company. The telephone bills of the aforementioned telephone of the company were regularly paid except the bill of March, 1989, to the tune of Rs. 3,455. On account of nonpayment the aforesaid Bill that telephone was disconnected on 8.6.1989. The company went into liquidation. A Receiver was appointed over its properties by the Delhi High Court. The husband of the petitioner was Managing Director of the Company. The petitioner is living at 36. Baghfarzana, Agra, having her independent telephone bearing No. 61743 at her aforementioned residence in her own name. She has been regularly paying bills of her telephone but for non-payment of the dues of the Company's Telephone No. 73579 the order/communication as contained in Annexures-5 and 11 have been made even though she has nothing to do with the company. Therefore, no coercive action should have been taken against her by the telephone authorities. Their action is against the very concept of law relating to Private Limited companies and accordingly, the impugned order and communication are liable to be quashed.
4. On 25.7.1991 the following order was passed by the Bench :
"A notice of this petition has been served on the learned senior standing counsel. List this petition for admission on the expiry of a month by which the respondent may file counter-affidavit.
Meanwhile the first respondent is directed to restore the Telephone standing in the name of the petitioner, namely, telephone No. 61743 within a week of the date on which a certified copy of this order is submitted before the respondent Nos. 1 and 2 provided that there are no dues outstanding against the petitioner with respect to this telephone.
Sd./- A. N. Varma, J.
Sd./- R. K. Gulati, J."
5. A counter affidavit was filed on 27.1.1999 by the respondents along with an application for its acceptance after condoning the delay. It has been sworn by the Assistant Account Officer, the Telecom District Mahanagar, Agra and following facts have been stated :
Telephone No. 73579 was disconnected on 8.6.1989 for default in payment of the Bills. Notices for recovery were sent to the husband of the petitioner Sri Satish Chandra Chaturvedi, who was the Managing Director of the Company, who vide his letters dated 3.5.1990 and 12.5.1990 requested to adjust the outstanding dues against the O.Y.T. deposit of Rs. 8,000 made by the Company. Accordingly, a sum of Rs. 6,000 was adjusted but a sum of Rs. 3,445 still remained to be recovered. Sri R. N. Bhatia, a retired officer of the petitioner Corporation, was appointed Receiver at the instance of the Company. It is admitted that Telephone No. 61743 was provided in the name of the petitioner at 36, Bagh Farzana, Agra. Telephone No. 61743 was disconnected on 26.12.1990 and not earlier. Under the rules, the respondents are well within their legal powers to disconnect the telephone of the petitioner since she is wife of Sri S. C. Chaturvedi who has been enjoying that telephone. The telephone of a wife can be legally disconnected against the dues of her husband under the Rules. It has been held to that effect as per the recent Judgment dated 25.11.1986 in Zarina Begum v. General Manager, Madras, of a learned single Judge of the Madras High Court. The writ petition is, thus devoid of merit and is liable to be dismissed.
The Submissions :
6. Sri Pankaj Mishra, the learned counsel appearing on behalf, of the petitioner, contended that the stand taken by the respondents in the counter-affidavit is thoroughly misconceived. The petitioner is the owner/subscriber of her telephone who cannot be compelled to pay the dues of that Telephone which admittedly belonged to the company and her telephone cannot be disconnected by the Department. Significantly, no specific rule has been referred to in the counter-affidavit to support the basis of the plea of the respondents and accordingly the reliefs claimed for by the petitioner are fit to be allowed with costs.
7. Sri Parekh, learned standing counsel for the Union appearing on behalf of the respondents, on the other contended as follows--As per Rule 443, the Telecom authorities are entitled to disconnect the telephone of the petitioner and they have not committed any wrong in passing their order and communication. He relied upon a Division Bench judgment of this Court in M/s. Ajay Iron and Steel Works and another v. Union of India and others, 1999 ALR 91. He also submitted that the writ petition is fit to be dismissed.
Our Findings :
8. Rule 443 of the Indian Telegraph Rules framed under the Indian Telegraph Act, relied upon by Mr. Parekh reads thus :
"443. Default of payment.--If, on or before the due date, the rent or other charges in respect of the telephone service provided are not paid by the subscriber in accordance with these rules, or bills for charges in respect of calls (local and trunk) or phonograms or other dues from the subscriber are not duly paid by him, any telephone or telephones or any telex service rented by him may be disconnected without notice. The telephone or telephones or the telex so disconnected may, if the Telegraph Authority thinks fit, be restored, if the defaulting subscriber pays the outstanding dues and the reconnection fee together with the rental for such portion of the intervening period (during which the telephone or telex remains disconnected) as may be prescribed by the Telegraph Authority from time to time. The subscriber shall pay all the above charges within such period as may be prescribed by the Telegraph Authority from time to time."
9. Rule 2 (pp) defines a "subscriber" as follows :
"Subscriber" means a person to whom a telephone service has been provided by means of an installation under these rules or under an agreement."
10. On a conjoint reading of the aforementioned Rules, it is clear that if a subscriber commits default in payment of the Bills of his telephone, then his telephone can be disconnected. At best, it can be applicable if the subscriber owns more than one telephone. This rule cannot be invoked by the Department if the subscribers are different.
11. On the case set-forth by the respondents in the counter-affidavit. Telephone No. 74579 belonged to the Agra Construction Company Ltd. Agra, i.e., to say, the company was its subscriber. It is indeed strange then how the petitioner, who is owner/subscriber of her Telephone No. 61743, can be compelled to clear the bills of Telephone No. 73579 or else to face disconnection of her telephone.
12. In Salomon v. Salomon and Company. 1897 AC 22, it was held to the effect that a Corporation in law is equal to a natural person and has a legal entity of its own which is entirely separate from that of its shareholders ; it bears its own name and has a seal of its own ; its assets are separate and distinct from those of its members ; it can sue and be sued exclusively for its own purpose ; its creditors can not obtain satisfaction from the assets of its members ; and the liability of the members or shareholders is limited to the capital invested by them. This legal position has been approved by the Supreme Court in Tata Engineering and Locomotive Company v. State of Bihar, AIR 1965 SC 40.
13. In Kailash Prasad Modi v. Chief General Manager, AIR 1994 Ori 98, a Division Bench of the Orissa High Court after considering Rules 2 (pp) and 433 has held that disconnection of a personal telephone of son of an erstwhile Director of a Company on the ground of non-payment of dues of the Telephone of that Company cannot be disconnected applying Rule 433 on the ground that the Company is a Juristic person and when it is the subscriber, its liability is not transferred to its director and that in a Private Limited Company the liabilities of the directors are limited and as such they are not subscribers of the Company's telephone. We are in full agreement with the view expressed by the Orissa High Court.
14. There is no presumption in law that the property of a wife will be presumed to be the property of the husband. It is also a settled law that use by the husband of his wife's stridhan property cannot change the character of that property. (See Pratibha Rani v. Suraj Kumar, AIR 1985 SC 628). Thus, use of petitioner's telephone by her husband is of no consequence.
15. Now we come to the Division Bench decision of our own High Court, strongly relied upon by Sri Parekh. The relevant part of this judgment is as follows :
"3. It appears that petitioner No. 2, Vijay Kumar Gupta was a partner in the firm Lala Sukhdev Ram Rolling Mills and there was a telephone connection No. 348597 in the name of that firm. Obviously, since the petitioner No. 2, was a partner in the said firm, he is liable to pay the telephone bills of the firm since under Section 25 of the Partnership Act, each partner is individually and severally liable.
4. Learned counsel for the petitioner urged that the other telephone connections bearing Nos. 370077, 342619, 340440 and 371440 are in the name of petitioner and hence they could not have been disconnected for the dues against the firm Lala Sukhdev Ram Rolling Mills. We are not in agreement with this submission."
* * * * "5. The language of Rule 443 is very clear. If a person is in default in payment of telephone dues of on telephone, and if he has any other telephone connection(s) also, the other telephone connections can also be disconnected in view of Rule 443. Since the petitioner was liable to pay the dues in respect of telephone No. 348597, hence, the other four telephone connections could also be disconnected. If however, the petitioner pays the telephone bill in respect of telephone No. 348597, the other telephone connections will be reconnected forthwith, provided, he has paid the bills for those telephone connections also."
16. In Bacha F. Guzadar v. Commissioner of Income Tax, AIR 1955 SC 74, the Supreme Court held that "Partnership is merely an association of persons for carrying on business of partnership and in law the firm name is a compendious method of describing the partners. Such is, however, not the case of a company which stands as a separate juristic entity distinct from shareholders." Apparently the facts of M/s. Ajay Iron and Steel Works are entirely different from the instant case. Thus, this decision is of no help to the respondents.
17. The Judgment rendered by the learned single Judge of the Madras High Court, referred to in the counter-affidavit, has not been shown to us and thus no comment of ours is required in this regard, besides it is not binding on us.
18. As admitted in the counter-affidavit, a Receiver has been appointed in regard to the assets of the Company. We fail to appreciate as to how then the petitioner can be coerced to pay the outstanding bills of the Company's telephone which is in 'custodia legis' of the Delhi High Court.
19. In our considered view, the stand of the respondents that they can disconnect the telephone of the petitioner on account of non-payment of the bills of the Company's telephone, is thoroughly misconceived and unjustified and thus rejected. It is indeed pity that such a course has been taken by the respondents.
20. For the reasons aforementioned, we are of the view that the petitioner is entitled to the reliefs prayed for.
21. In the result, we allow this writ petition and quash the impugned order and direction as contained in Annexures-5 and 11 by grant of a writ of certiorari. The respondents are commanded not to disconnect the telephone of the petitioner provided the petitioner has not defaulted or does not default in regard to payment of bills of her aforementioned telephone number.
22. Since the petitioner has been unnecessarily and illegally coerced by respondent No. 2, she is entitled to costs, which we assess to the tune of Rs. 2.000 only to be paid by Respondent No. 2 to her.
23. The office is directed to hand-over a copy of this order within one week to Sri Parekh, learned standing counsel for the Union, for its intimation to and follow up action by the respondents.