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Hiralal Bablisa Shroff Vs. Ramdas Purshottamdas - Court Judgment

LegalCrystal Citation
SubjectCivil;Commercial
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 652 of 1959
Judge
Reported inAIR1961Bom284; (1961)63BOMLR169
ActsPresidency Small Cause Courts Act, 1982 - Sections 17 and 18
AppellantHiralal Bablisa Shroff
RespondentRamdas Purshottamdas
Appellant AdvocateB.A. Pandya, ;M.I. Patel and ;B.S. Purohit, Advs.
Respondent AdvocateV.T. Gambhirwalla, Adv.
Excerpt:
.....for amendment was made on 11th march 1959. mr. if plaintiffs wanted to base their suit on their not being ordinary commission agents but pucca adatias of the defendant in the transactions in suit, that should have been clearly stated in the original point itself......plaintiffs case that the defendant had acquiesced in any manner in the institution of the present suit, leave would be necessary under section 18(c) of the act. such leave was obtained by the plaintiffs on the basis of the plaint filed on 18th august 1955. under clause 12 of the letters patent of the bombay high court, leave has to be first obtained to sue inter alia in case the cause of action arises in part within the local limits of the ordinary original civil jurisdiction of this highcourt; and it is well settled that such leave affects the very foundation of the jurisdiction and must be obtained before the institution of the suit, and the leave granted must be confined to the cause or causes of action set forth in the plaint at the time when the leave was granted and the plaint.....
Judgment:

1. This is a revision application against the order of the Court of Small Causes at Bombay refusing the petitioners' application for amendment of their plaint. On 18th August 1955 the petitioners filed Suit No. 2272/11476 of 1955 in the Court of Small Causes at Bombay against the defendant Opponent to recover a sum of Rs. 2703-1-0 inclusive of interest. It was alleged in the plaint that the plaintiffs had acted as commission agents in respect of certain transactions with the defendant and in connection with those transactions there was an account of the defendant In the account books of the plaintiffs. At the foot of the said account, there remained a balance of Rs. 2,435-3-0 due and payable by the defendant to the plaintiffs and the particulars of that account were annexed to the plaint. The defendant, according to the plaintiffs, failed and neglected to pay the said balance in spite of repeated demands and ultimately plaintiffs, through their advocate's letters dated 8th December 1954 and 22nd March 1955, called upon the defendant to pay the said balance with interest thereon, but the defendant failed and neglected to pay the same or any part thereof. As regards the cause of action, it was stated that the plaintiffs acted as commission agents in Bombay, the orders were placed in Bombay, the transactions were carried out in Bombay and the part payments were also made in Bombay and the balance due by the defendant was also payable in Bombay and, therefore, the cause of action arose in Bombay; but as the defendant resides and carries on business at Raipura in Burhanpur, Madhya Pradesh, leave of the Court was asked for. As regards limitation, paragraph 9 of the plaint staled that plaintiff's claim was in time and was not barred by the law of limitation, as the same was saved due to the last payment made by defendant by Havala on 6thNovember 1953. The plaintiffs, therefore, prayed that a decree should be passed in their favour against the defendant for a sum of Rs. 2703-1-0 and costs thereon and professional costs and interest on Rs. 2435-3-0 from the date of the filing of the suit till judgment.

2. The defendant filed his written statement on 21st September 1955 and resisted the suit on several grounds. But it is not necessary to state the defences at the present stage. It appears that on 20th January 1958, plaintiff was examined and on the same day the suit was referred to the commissioner for taking accounts, and it seems that on 26th January 1958 the Commissioner commenced his work and submitted his report on 31st January 1959. Objections were taken to the commissioner's report both by the plaintiffs as well as the defendant. On 11th March 1959, plaintiffs filed the present application for amendment of the plaint, principally in two respects, viz., (1) They wanted in paragraph 2 of the plaint to add after the words 'commission agent', the explanation 'i.e. Pucca Adatia'; and (2) they wanted to add in paragraph 3 of the plaint, after striking out the words 'commission agency' the words 'at the foot of the said open, current and mutual account'. It appears clearly, therefore, that plaintiffs desired that their claim to recover the amount was to be on the basis of the transactions entered into with them by the defendant not merely as commission agents but as Pucca Adatias; and, secondly, they wanted the account subsisting between them to be described as an open, current and mutual account,

3. This application for amendment was resisted on three grounds. In the first instance, it was contended that no leave of the Court had been granted for the amended cause of action, secondly, that the amendment would change the relationship between the parties from that of an ordinary Adatia to a Pucca Adatia; and, thirdly, that the amendment would raise questions of limitation.

4. These objections prevailed with the learned trial Judge, who dismissed the plaintiffs' application for amendment. This revision application is, therefore, filed against the said dismissal of the application for amendment.

5. The first objection that was raised to the granting of amendment was that plaintiffs had obtained leave on a cause of action which is substantially different from the cause of action which would be disclosed if the plaint were allowed to be amended. It is not disputed that leave of the Court was necessary in the present case, under section 18 of the Presidency Small Cause Courts Act (XV of 1832), which will hereafter be referred to as the Act. The defendant in the present case resides at Burhanpur in Madhya Pradesh and since it is not the plaintiffs case that the defendant had acquiesced in any manner in the institution of the present suit, leave would be necessary under section 18(c) of the Act. Such leave was obtained by the plaintiffs on the basis of the plaint filed on 18th August 1955. Under clause 12 of the Letters Patent of the Bombay High Court, leave has to be first obtained to sue inter alia in case the cause of action arises in part within the local limits of the ordinary original civil jurisdiction of this HighCourt; and it is well settled that such leave affects the very foundation of the jurisdiction and must be obtained before the institution of the suit, and the leave granted must be confined to the cause or causes of action set forth in the plaint at the time when the leave was granted and the plaint cannot be amended so as to alter the cause of action. See Rampratap Samruthroy v. Premsukh Chandmal ILR 15 Bom. 93. In tny view, the principle of this ruling must also apply to a leave granted by the Small Causes Court under Section 18 of the Act, under which the jurisdiction of the Court is still more restricted. Under Section 18(b) of the Act, the Small Cause Court shall have jurisdiction to try suits of a civil nature when the subject-matter does not exceed Rs. 3000 and all the defendants, at the time of the institution of the suit, actually and voluntarily reside, or canny on business or personally work for gain, within the local limits of its jurisdiction which by virtue cf Section 17 means the local limits for the time being of the ordinary original Civil jurisdiction of the High Court. Under Section 18(a) of the Act, leave, however, has to be granted for reasons to be recorded by the Court in writing before the institution of the suit, if the cause of action has arisen, either wholly or in part, within the local limits ot the jurisdiction of the Small Cause Court. Under See. 18(c; of the Act, if any of the defendants at the time of the institution of the suit, actually or voluntarily resides, or carries on business or personally works for gain, within such local limits, while the others do not then also leave of the Court has to be obtained before the institution of the suit, unless, of course, the defendants who do not so reside or carry on business acquiesce in such institution. In my view, therefore, the principle of the ruling in the case of ILR 15 Bom 93 must also apply to the Court of Small Causes and it would not be open to that Court to grant leave for amendment of the plaint in respect of a substantially different cause of action which was not considered by the Court when granting the original leave. As was observed by Mr. Justice Telang in the aforesaid case,

'the grant of leave under Clause XII of the Letters Patent, is a judicial act, which must be held to relate only to the cause of action disclosed in the plaint as presented to the Court at the time of the grant'.

Such leave, ho further proceeded to observe,

'which affords the very foundation of the jurisdiction, is not available to confer jurisdiction in respect of a substantially different cause of action which was not judicially considered at the time it was granted; that in respect of such a different cause of action, leave under clause XII cannot be granted after the institution of the suit; and, that, therefore, the Court cannot try such different cause cf action, except in another suit duly instituted.'

My attention was also invited on this point to the case of Foolibai v. Rampratap Samratrai ILR 17 Bom. 466 an of shot cf the earlier case of Rampratap Samruthroy ILR 15 Bom 93 decided by Telang J. In that case, the plaintiff has (had?) filed a suit against the defendant Foolibai alleging that she owned a firm and carried on business at Sihore in the territory of Bhopal. Before the suit was filed, leave was duly obtained under clause 12 of the Letters Patent. But in her written statement Fooli-bai denied that she was the owner of the Sihore firm or that she was responsible for any of its dealings with the plaintiff. She alleged that the Sihore firm had belonged to her son Poonamchand, who died leaving a daughter named Goolibai, a minor, who was still living. The plaintiff then obtained a summons calling on the defendant Foolibai to show cause why the plaint and proceedings should not be amended by adding the name of Goolibai as a party-defendant; and ultimately Goolibai came to be added as defendant. The defendant Foolibai appealed against this order adding Goofibaf as a defendant, on the ground that Goolibai could not be added without obtaining the necessary leave under the Letters Patent. Her appeal was dismissed on the ground that defendant Foolibai could not make any grievance against the order adding Gooli-bai, though it might be that Goolibai might object to the order herself, and that the case of ILR 15 Bom 93, relied upon on behalf of Foolibai did not apply inasmuch as the addition of Goolibai did not alter the original cause of action. The sequel to the case of ILH 17 Bom 468 is to be found in Rani Partab Samrathrai v. Foolibai ILR 20 Bom 767. As has been already mentioned in connection with the earlier case, Goolibai was added as a defendant in the suit filed by Rampratap Samratrai which then proceeded to hearing on merits. As regards Foolibai, it was held in the later case that Foolibai, though she was interested in the defendant's firm, could not be sued in respect of the dealings of the firm as she had only a charge on it for her maintenance. As regards the added defendant Goolibai, this court dismissed the plaintiff's suit on the ground that the leave of the Court had to be first obtained before Goolibai as owner of the Sihore firm was sued ia this Court. It appears, therefore, that the objection taken by Foolibai in the earlier ruling of ILR 17 Bom 466 though it was rejected on the ground that she could not take it on behalf of Goolibai, came to be upheld in the subsequent ruling reported in ILR 20 Bom 767. My attention was also invited to another decision reported in Motilal v. Shankarlal 41 Born LR 536 : AIR 1939 Bom 345 where it was held by Mr. Justice Kania, as he then was, that where a suit for money instituted, with leave of the Court obtained under Clause 12 of the Letters Patent, by several, persons acting as partners, is by amendment of the plaint, converted into a suit by only one of them, such suit alters the cause of action, and therefore does not lie in the absence of a fresh leave under `Clause 12 after the amendment. These cases, in my view, establish that leave to sue which is granted by the Court in respect of one cause of action will not be available to confer jurisdiction on the Court in respect of a substantially different cause of action, the reason being that the cause of action as sought to be amended was not judicially considered at the time when the first leave was granted. This principle, as I have already indicated, though it has been laid down under Clause 12 of the Letters Patent, would apply also to leave granted by the Court of Small Causes under Section 18 of the Act.

6. The next question for consideration in the present revision is whether the amendment sought introduces a substantially different cause of action. It is contended by Mr. Pandya, learned advocateappearing on behalf of the petitioner, that the plain-tiffs had originally described the transactions as having been entered into by the defendant with the plaintiffs-firm as 'commission agents' of the defendant. As to how these transactions had taken place was described in detail in the plaint itself; and what the plaintiffs desired was to clarify the relationship between the plaintiffs and the defendant by stating that plaintiffs were Pucca Adatias of the defendant. It is also contended that a Pucca Adatia is also a commission agent, except that he has got certain additional rights which are well established. In tin's connection, Mr. Pandya relies on the ruling in Kanji v. Bhagwandas 7 Bom LK 57, which is the leading case on the subject of the incidents attaching to the Pakki adat system. That case lays down that a Pakka Adatia can allocate an up-country constituent's Order to himself, without the knowledge, consent, or permission. of the constituent and this is known as the right of allocation in the first instance. Secondly, a Pakka Adatias when he receives an order to buy or sell from an up-country constituent, he enters into a contract with a Bombay merchant. Subsequently but before the due date, the Pakka Adatia enters into a cross-contract with the same merchant on his own account and either squares the original contract or keeps the two contracts open till the due date; so that the Pakka Adatias is entitled to keep the order of the first constituent open till the due date so as to hold the said constituent bound on that date to deliver or take delivery, as the case may be. Thirdly, instead of entering into the cross-contract an his own account, the Pakka Adatia can enter into it on behalf of another constituent of his, and the same result as stated in the second incident would follow. Mr. Pandya contends that in paragraph 16 of the written statement filed by the defendant on 21st September 1955 it was stated that the plaintiffs had not effected corresponding transactions with third parties in the market and have not paid the losses arising out of such transactions; and it is urged that this defence would indicate that the defendant also realised that in the plaint what was being sought to be established was that plaintiffs were Pakka Adatias. It is further pointed out that when on 20th January 1958, the order referring the suit to the commissioner for taking accounts was made, and on 15th March 1958 when one of the partners of the plaintiffs firm, Hiralal Bablislia, was examined-in-chief, he had stated that the dealings with the defendant were on Pucca Adat terms, and Mr. Pandya contends that no objection was taken to this statement being made. But it appears that after the defendant had taken a search of the record, further defences were filed on oath on 2nd April 1958, and paragraph 1 of the supplementary defences states that the plaintiffs were appointed and they acted as commission agents of the defendant and not as Pucca Adatias. Thereafter, on 12th April 1958, in further examination-in-chief` Hiralal Bablisha was asked to state the nature of the commission agency under which the plaintiffs-firm carried out the transactions with the defendant. To this objection was raised by the learned advocate appearing on behalf of the defendant on the ground that neither the plaint nor the written statement contained any reference to the PuccaAdat; and the learned advocate on behalf of the plaintiff replied by saying that the plaintiffs had already stated that the dealings were on Pucca Adat terms, when no objection was. taken on behalf o the defendant. It appears that the learned Commissioner made a note on this that it would have to be considered whether the plaintiffs who had obtained leave to sue the defendant on a cause, of action cf simple commission agency could amend the cause of action without leave, and naturally he left that question to be decided by the Court. The Commissioner's report was submitted on 31st January 1959, and after objection had beer, raised to that report by the plaintiffs as well as the defendant, the present application for amendment was made on 11th March 1959. Mr. Pandya contends that defendant really knew that he had to meet the case of the plaintiffs that they were not merely commission agents but were Pucca Adatias, and that what was sought by the application for amendment was a clarification. That contention, in my view, is not tenable. It is true that the partner who was examined on behalf of plaintiffs was at one stage allowed to depose that the transactions were entered into on the basis of plaintiffs being Pucca Adatias. But the plaint it self describes the capacity of the plaintiffs-firm as commission agents. It is not disputed that there are important incidents of the Pucca Adat system which cannot be taken advantage' of by an ordinary commission agent. If plaintiffs wanted to base their suit on their not being ordinary commission agents but Pucca Adatias of the defendant in the transactions in suit, that should have been clearly stated in the original point itself. In my view, therefore, the amendment sought by the plaintiffs would alter the original cause of action into a substantially different cause of action. The same remark, in my opinion, would also apply to the other amendment sought, viz., that there subsisted between the plaintiffs and the defendant an open, current and mutual account. It is true that the plaint refers.; to a running account between the parties. It is also true that the plaint mentions that defendant used to make part payments from time to time by making payments to the plaintiffs' sister concern at Burhanpur and by sending Havalas. But it has to be remembered that in paragraph 9 of the plaint it is stated that the plaintiffs' claim is in time and is not barred by the law of limitation because the claim is saved due to the last payment made by the defendant by Havala on 6th November 1953. There is no reference in that paragraph to the subsistence of any open, current and mutual account between the parties. That, in my view, would also introduce a substantial alteration in the case made in the plaint. The trial Court was, therefore, right in rejecting the application filed by the plaintiffs for amendment of the plaint.

7. The result is that this revision application fails and the rule will have to be discharged with costs.

8. Revision dismissed.


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