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Chimanram Motilal Vs. Shankarmal Sabu - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 850 of 1946
Judge
Reported inAIR1947Bom424; (1947)49BOMLR439
AppellantChimanram Motilal
RespondentShankarmal Sabu
Excerpt:
practicenoticee of motion-amendment of plaint--whether amendment amounts to waiver of notice-quia timet action, essentials of.;the order to amend a statement of claim pending a notice of motion must as a matter of precaution be expressly made without prejudice to the notice of motion. if that is not done, the plaintiff may be considered to have waived or abandoned the notice of motion.;a passage to the above effect in daniel's chancery practice, vol. ii, p. 1357, followed.;a statement to the contrary in halsbury's laws of england, hailsham edition, vol. xviii, p. 105, § 155, not followed.;govindram v. shivnarayan, (1938) 41 bom. l.r. 545 referred to.;if the circumstances of a particular case warrant the conclusion that the plaintiff has not abandoned his notice of motion.....bhagwati, j.1. in accordance with the orders which i passed on september 20, 1946, the plaintiffs amended their plaint by incorporating therein paragraph 36-a and prayer (e1) which referred to the decision of the clearing house sub-committee dated july 31, 1946, and the letter received by the plaintiffs from the bullion exchange on september 2, 1946, intimating to the plaintiffs that as the plaintiffs had failed to pay the sums into the clearing house a resolution was passed at the joint meeting of the board and the mandal of defendant no. 2 company held that day to the effect that if the payment was not made by the plaintiffs by 12 noon on september 19, 1946, then another joint meeting would be convened at 4 p.m. on that day to take adequate steps against the plaintiffs.2. all these.....
Judgment:

Bhagwati, J.

1. In accordance with the orders which I passed on September 20, 1946, the plaintiffs amended their plaint by incorporating therein paragraph 36-A and prayer (e1) which referred to the decision of the clearing house sub-committee dated July 31, 1946, and the letter received by the plaintiffs from the Bullion Exchange on September 2, 1946, intimating to the plaintiffs that as the plaintiffs had failed to pay the sums into the clearing house a resolution was passed at the joint meeting of the board and the Mandal of defendant No. 2 company held that day to the effect that if the payment was not made by the plaintiffs by 12 noon on September 19, 1946, then another joint meeting would be convened at 4 p.m. on that day to take adequate steps against the plaintiffs.

2. All these grounds were no doubt there in the affidavit which was made by Juthalal Motilal on September 16, 1946, in further support of the notice of motion but were incorporated in the plaint in pursuance of the orders which 1 made as above. 1 may observe in passing that reply had been made to these various allegations which were contained in the affidavit of Juthalal Motilal of September 16, 1946, in the affidavits which were filed in reply by the first defendants as well as by the Secretary of the second defendants, the Bullion Exchange. There was the usual affidavit of Juthalal Motilal in rejoinder dated September 19, 1946, and these were the materials on which I was called upon by the parties to decide the notice of motion for prayer (3) thereof which was for a relief in terms of prayer (f) of the plaint.

3. When the notice of motion reached hearing on September 23, 1946, after list B was over, the Advocate General on behalf of the first defendants took up a preliminary objection. He contended that the notice of motion could not lie any longer because it was taken out on the original plaint as it stood before the amendment. No fresh notice of motion had been taken out by the plaintiffs after the plaint had been amended and he, therefore, contended that the notice of motion as taken out on the original plaint should be deemed to have been abandoned by the plaintiffs, they not having obtained leave to amend without prejudice to the pending notice of motion. In view of the circumstances which I will point out a little later, I was inclined to summarily brush aside this preliminary objection. In so far, however, as the matter involved herein was a matter of some importance and would not rest merely with my decision here, and, looking to the manner in which the parties have been fighting, might very easily be taken to the Appeal Court, I thought it advisable to hear the parties fully on this preliminary objection. This is the justification for my entertaining this preliminary objection in the manner I did and having taken considerable time of the Court in determining the same.

4. The Advocate General relied upon the passage in Halsbury's Laws of England, Hailsham Edition, Vol. XVIII, p. 105, para. 155, which says:

The amendment of the statement of claim pending notice of motion operates as an abandonment of the notice, unless the plaintiff obtains leave to amend without prejudice to the pending notice.

He also relied upon a passage in Daniel's Chancery Practice, Vol. II, p. 1357, which says:

An order to amend a statement of claim made pending a motion for an injunction, or for a receiver, should as a matter of precaution be expressed to be made without prejudice to the notice of motion, otherwise the plaintiff may be considered to have waived it and be ordered to pay the defendant costs of the motion.

I am bound to point out at this juncture that the statement of the position as it is enunciated in Halsbury's Laws of England, Vol. XVIII, 155, p. .1.05, is not exactly the same as is enunciated in Daniel's Chancery Practice, Vol. II, p. 1357. While those who compiled the passage in Halsbury's Laws of England put it as an absolute proposition that the amendment of the statement of claim pending notice of motion operates as an abandonment of the notice, Daniel's Chancery Practice does not put it so absolutely. It only says that the order to amend a statement of claim pending a notice of motion should as a matter of precaution be expressly made without prejudice to the notice of motion, If that were not done, the plaintiff may be considered to have waived the notice of motion. This, in my opinion, is an enunciation of a proposition which is different from what has been enunciated in Halsbury's Laws of England.

5. The Advocate General relied upon three cases which have been referred to in the note (f) at p. 105 in Halsbury's Laws of England, Vol. XVIII, as in support of the proposition which has been enunciated there. The first, case was Gouthwaite v. Rippon. (1838) 1 Beav. 54 In that case it was held that a motion for injunction and receiver was irregular where the plaintiff amends his bill between the time of giving notice of moving and the time of bringing on the motion. The Master of the Rolls there allowed the objection which had been taken that the motion was irregular, the notice having been given on a record which no longer existed and that on the existing record no notice of motion had been given. This is the only report and there is nothing further to indicate as to what was the position which obtained in that suit or the notice of motion taken out therein. It does not appear if there was or there was no opportunity to the objecting party to reply to the bill as amended. There is also nothing to show whether the objection was sustained by reason of any particular inconvenience which would be caused to the party objecting in. meeting the notice of motion on the bill which had been amended. The second case was Smith v. Dixon (1864) 12 W.R. (Eng.) 934 . There also after a notice of motion for a receiver the plaintiff, on the defendant putting in a plea, had amended his bill. He had endeavoured to bring on his motion again after the amendment, and it was contended that there was no notice of motion before the Court. It was submitted on behalf of the pleading defendant that the plaintiff by amending his bill had put an end to the motion, and Stuart v. C. expressed his opinion that the plaintiff having amended his bill the notice was gone. I have to offer the same remarks in the case of this opinion also as I did in the matter of the earlier opinion of the Master of the Rolls in Gouthwaite v. Rippon. The third case, which was relied upon by the Advocate General, was the case of The London & Blackwall Railway Co. v. The Limehouse District Board of Works (1856) 8 K. & J. 128 . In this case, however, before the notice of motion for injunction, which was argued actually before the Court, the plaintiffs had previously given a similar notice of motion and had afterwards amended their bill and then had given that notice of motion which was argued. It was ordered that the plaintiffs must pay the costs occasioned by the notice of motion which they gave before amending their bill as of an abandoned motion. In this case it was clear that after the amendment of the bill a fresh notice of motion had been given by the plaintiffs. That was the notice of motion which had been dealt with. The earlier notice of motion had not been brought on or argued and it was rightly treated as an abandoned motion. If that was so, the Court felt itself bound to award to the pleading defendant the costs of such an abandoned motion. In my opinion it is as a result of all these three cases that the proposition has been enunciated in Daniel's Chancery Practice, Vol. II, p. 1357, in the form which I have mentioned above. If a plaintiff amends his bill or statement of claim, he would be prima facie deemed to abandon the notice of motion which he has based on the bill or the statement of claim which was originally filed in Court, and if he wanted to bring on before the Court a notice of motion on the amended bill or statement of claim, he should, either when he made the application for amendment or when lie amended his bill or statement of claim, have done so without prejudice to the notice of motion which was pending based on the original bill or statement of claim, or abandoned the old notice of motion and taken out a fresh notice of motion based on the amended bill or statement of claim. These are, however, prima facie considerations, as Daniel's Chancery Practice puts it. It should be done as a matter of precaution, otherwise the plaintiff may be considered to have waived it and be ordered to pay to the defendant the costs of the notice of motion which was based on the original bill or statement of claim as unamended. There is, however, in my opinion, no justification for the absolute manner in which the proposition has been enunciated in Halsbury's Laws of England, Vol. XVIII, p. 105, 155. The result, therefore, in my opinion, is that if the circumstances of a particular ease warrant that conclusion, the Court is not fettered in holding that under the circumstances of the particular case the plaintiff should not be considered to have waived or abandoned the notice of motion which had been taken out earlier on the bill or statement of claim as unamended. This, as I conceive it, is the true position in law, and if the matter were res integra, I would certainly express it as my definite opinion on the point. The difficulty is, however, created by a judgment of a Court of co-ordinate jurisdiction here, which is reported in Govindram v. Shivanarayan. (1938) 41 Bom. L.R. 545 In that suit a notice of motion was taken out by the plaintiffs for a receiver on February 7, 1938, and while the notice of motion was pending for hearing the plaintiffs by leave of the Court amended the plaint on June 17, 1938, by adding a further or alternative ground of attack. The first defendant therein tendered on June 22, 1938, an affidavit in reply on the notice of motion, and the plaintiffs tendered an affidavit in rejoinder. Defendant No. 1 then raised a preliminary objection that the notice of motion had been abandoned by reason of the subsequent amendment of the plaint. The position came on for consideration before Somjee J. The authorities which were cited before me were all cited before the learned Judge. The learned Judge considered both the passages, one from Halsbury's Laws of England. Vol. XVIII, p. 105, 155, and the other from Daniel's Chancery Practice, Vol. II, p. 1357, which I have above referred to. It does not appear to have been pointed out to him in what different manners both these passages had enunciated the proposition based on the very same cases which were cited there as well as here, and the learned Judge took both these passages in Halsbury's Law of England and Daniel's Chancery Practice, as establishing the proposition as it was advanced before him that by reason of the amendment of plaint the old notice of motion must be deemed to have been abandoned. Whatever my opinion to the contrary may be, as I have already stated above, I am not inclined in this particular ease and on the facts before me to disagree with the same even though, if it were necessary to do so I would go to the length of doing it, because the distinction which obtains between the enunciation of the proposition in Halsbury's Laws of England, Vol. XVIII, p. 105 155, and Daniel's Chancery Practice, Vol. II, p. 1357, was neither brought before the notice of the learned Judge nor was considered by him as I have done above.

6. The reason why I do not see any substance in this preliminary objection raised by the Advocate General is that by the very order made by Chagla J. on June 25, 1946, he reserved to the plaintiffs, after the decision of the clearing house sub-committee was pronounced, leave to apply for an injunction in the very notice of motion restraining the second defendant company, the Bullion Exchange, from taking the threatened disciplinary action in the event of a notice in that behalf having been given by the Bullion Exchange to the plaintiffs. The learned Judge there in express terms gave to the plaintiffs liberty to bring on the very notice of motion on further and fresh materials which might come into existence later on on the decision being given by the clearing house sub-committee adverse to the plaintiffs. It was open to Chagla J. at that time on the objection which had been taken by the second defendants, the Bullion Exchange, in paragraph 2 of the affidavit of their secretary, viz. 'I submit that the plaint discloses no cause of action for the reliefs claimed', to have dealt with this objection and to have dismissed the notice of motion straightaway against the Bullion Exchange having regard to the fact that there was no averment in the plaint at all which would ever justify any relief in terms of prayer (f) of the plaint. The learned Judge, however, did not choose to do so. It does not appear also that any such point was urged by counsel for the second defendants, the Bullion Exchange, before him at the hearing of the notice of motion on June 25, 1946. Under these circumstances the learned Judge reserved to the plaintiffs leave to bring on the very notice of motion on fresh and further materials. When the decision of the clearing house sub-committee was given adverse to the plaintiffs and the Bullion Exchange gave notice to the plaintiffs on September 2, 1946, that in default of the plaintiffs making the necessary payment within the time mentioned therein a further meeting would be held on September 19, 1946, to consider what action should be taken against the plaintiffs, the cause of action did arise to the plaintiffs to bring on this notice of motion, the very notice of motion which was argued before Chagla J. on June 25, 1946, and which he had expressly reserved liberty to the plaintiffs to bring on under the fresh circumstances which had later arisen. An affidavit was filed on September 16, 1946, by Juthalal Motilal in further support of the notice of motion so that the plaintiffs could bring on before the Court the notice of motion for prayer (3) thereof, viz. the relief in terms cf prayer (f) of the plaint. When this affidavit was made the second defendants through their secretary filed an affidavit in reply. In that affidavit the various allegations which had been made by Juthalal Motilal in his affidavit of September 16, 1946, were traversed and no point was ever taken that there was any technical flaw or defect in the notice of motion which was thus sought to be brought on before the Court. These were the further and fresh materials on which the notice of motion was brought on before me and it was in order to regularise the whole thing, in order to see that the very materials in this affidavit of Juthalal Motilal dated September 16, 1946, should be incorporated in the plaint that I ordered Mr. Banaji to amend his plaint. The amendment of the plaint was with a view to regularise the whole proceeding, to set the house in order, so to say, and was not an amendment of the bill or statement of claim which could be said to be within the meaning of the authorities which we relied upon by the Advocate General in support of his preliminary objection. If necessary I would go to the length of holding that by reason of the second defendants through their secretary having replied to the affidavit of Juthalal Motilal and also by reason of the first defendants, the parties concerned in the decision given by the clearing house sub-committee, also having replied to this affidavit, they come within the ruling of Somjee J. in Govindram v. Shivnarayan, that they having tendered the affidavit in reply to the affidavit of Juthalal Motilal of September 16, 1946, to which the plaintiffs submitted the affidavit in rejoinder, the defendants should be deemed to have waived the objection, if any, to the notice of motion which was thus brought on before me. Under the circumstances I am of opinion that the preliminary objection taken by the Advocate General does not lie. I said as much in the course of the arguments of the notice of motion and asked Mr. Banaji to proceed with the argument on the merits.

7. The argument on the merits of this notice of motion, however, is not such plain sailing for Mr. Banaji. The basis of the relief which he pressed for against the Bullion Exchange is that Rule 28 of the Rules of Business of the Bullion Exchange is ultra vires the Bullion Exchange, that the decision given by the clearing house sub-committee is illegal and void and not binding on the plaintiffs, that (if the plaintiffs did not make payment of the amounts which they were ordered to pay to the various parties under the decision of the clearing house sub-committee including defendants No. 1, the Bullion Exchange would take steps to have the plaintiffs declared defaulters and if the plaintiffs were declared defaulters irretrievable harm would be caused to their interests. It is therefore urged that the Bullion Exchange, the second defendants, should be restrained from taking any disciplinary action against the plaintiffs. There is no doubt that substantial questions have got to be investigated at the hearing of this suit, but that is not enough. Whatever may be the considerations which will be urged at the final hearing of this suit on behalf of both the parties, the fact remains that Rule 28 was one of the Rules of Business of the Bullion Exchange, subject to which the transactions between the various parties had been effected, the delivery order which was issued by the first defendants for delivery of 122 silver bars was handed over by the Bullion Exchange to the plaintiffs also under the rules and regulations of the Bullion Exchange and whatever steps were taken by the Bullion Exchange were taken in accordance with those Rules and Regulations, subject to which all the transactions had been entered into by the respective parties. If prima facie considerations are of any avail they are prima facie against the plaintiffs and in favour of the defendants. This, however, I do not consider as conclusive of this notice of motion. As I stated earlier there is at least one possibility which is an essential condition of the Bullion Exchange taking the disciplinary action against the plaintiffs. The third step in the argument of the plaintiffs in order that they may sustain this application for injunction against the Bullion Exchange is that if they did not pay the monies to the Bullion Exchange to the credit of various parties in accordance with the decisions given by the clearing house sub-committee, the Bullion Exchange would take disciplinary action against the plaintiffs, a result which would be brought about only by the action of the plaintiffs themselves. If the plaintiffs paid the monies to the Bullion Exchange to the credit of the various parties, the Bullion Exchange would certainly not take any action against the plaintiffs in the exercise of the disciplinary jurisdiction which it has undoubtedly got under the Rules and Regulations of the Bullion Exchange. As Kania J. observed in the judgment of the Appeal Court dated March 28, 1946 .

It was argued that the plaintiffs would suffer irreparable injury if they are declared defaulters. For that the remedy lies in their own hands. The plaintiffs could have paid the amount, which according to them was unlawfully demanded of them, under protest, or they could have allowed the bars to be sold on the footing that they did not pay the proper price according to the contracts and paid the deficit under protest. If that deficit was paid, there would arise no occasion for the Exchange to declare them defaulters.

This, in my opinion, is the true position. It is not open to the plaintiffs to say that if they did not comply with the particular demand or requisition of the Bullion Exchange the Bullion Exchange would take disciplinary action against them. It would be easy for them, without causing any irreparable loss or irretrievable injury to themselves, to comply with the demand of defendants No. 2. The plaintiffs are admittedly multi-millionaires. It is not even suggested in the affidavits in support of the notice of motion that there would be the slightest inconvenience caused, to them in the matter of payment of the money. In fact Mr. Banaji offered to the Court that his clients would deposit the monies in Court or pay them to the Bullion Exchange under protest if the Bullion Exchange either agreed not to pay or were restrained from paying over the monies which were thus paid to them under protest to the various parties concerned. This ground of inconvenience therefore does not exist. The remedy lies in their own hands. They are welcome to take it. If they do so, the Bullion Exchange will certainly not take any disciplinary action against them.

8. It was therefore urged at the tail end, if I may call it, of the affidavit of Juhtalal Motilal dated September 16, 1946, that there would be considerable inconvenience to them if the payments were made to the parties concerned by the Bullion Exchange. Paragraph 7(d) of the affidavit of Juthalal Motilal states;

That the business in Bullion Exchange is of a speculative, character particularly in the abnormal times. If any of the persons to whom several lacs of rupees are directed to be paid under the said decisions of the Sub-Committee are unable to repay to the plaintiffs the large amounts which the plaintiffs shall be compelled to pay under the said awards will be lost to them and the plaintiffs will suffer irreparable loss and damage. As against this hardship, the plaintiffs claim sums amounting to several lacs of rupees in all the above suits and the same are absolutely unsecured and unprovided for. The result will be that if an injunction is not granted as prayed for by the plaintiffs the various persons in whose favour the said awards have been made will walk away with their moneys and leave the plaintiffs to the uncertainties and difficulties of recovering their dues from them in the future.

As regards the claims in the suit they are no doubt unsecured and unprovided for. There is nothing in law by which the Court could secure or provide for these claims which have been made by the plaintiffs. If any case arises for an application under O. XXXVIII of the Civil Procedure Code the plaintiffs will be really welcome to do so on proper materials being placed before the Court in that behalf. Except for that, certainly the claims have got to be determined and decreed before any thing can be done in favour of the plaintiffs.

9. As regards the other suggestion which has been made with regard to the payment which may be made by the plaintiffs to the Bullion Exchange to the credit of the various parties, that the parties might take away the monies on their being paid the several sums by the Bullion Exchange and that the plaintiffs then would be left to the uncertainties and difficulties of recovering their dues from them in the future, it is based merely on the speculative character particularly in abnormal times of the business on the Bullion Exchange. It cannot be denied that the business on the Bullion Exchange in the main is of a speculative character. On the other hand, it has been definitely averred in the various affidavits which have been filed on behalf of the various parties in whose favour the clearing house sub-committee has given the decisions that they are people of substance, several of them owning immoveable properties and there is not the slightest ground for any apprehension that if the decision of the suit or suits were in favour of the plaintiffs the monies which the plaintiffs pay out to them through the Bullion Exchange would not be forthcoming at the proper time. The uncertainties and difficulties of recovering their dues are always there facing the plaintiffs even though they obtain a decree against the defendants. 'What the Court has got to see is whether there is any reasonable ground of apprehension at the time when the application is made before it. The only thing which Juthalal Motilal has been able to say in his affidavit dated September 19, 1946, is in paragraph 6 thereof:

As regards the substance and worth of the various persons referred to therein, I am not aware of all the facts relating thereto.

In my opinion, this allegation is as vague as vague can be. It is really tantamount to saying that he is not in a position to deny any of the allegations which have been made in the affidavits of the various parties. If he is not in a position to deny the same, I am entitled to act upon those allegations as correct. Under the circumstances I do not see any reason for any apprehension that any inconvenience would be caused in the matter of the recovery of these sums from the various parties to whom the Bullion Exchange might pay them, in the event of the plaintiffs being successful in the several suits which have been filed by them in this Court. It may be interesting in this connection to note what Chagla J. stated in the notice of motion which had been taken out by the plaintiffs in suit No. 842 of 1946. In that suit the plaintiffs had paid to the Bullion Exchange the amount which had been awarded in favour of Bisesarlal Chirawawala by the clearing house sub-committee, and the plaintiffs took out a notice of motion to restrain the Bullion Exchange from paying over the amount to Bisesarlal Chirawawala. Affidavits of the same nature as we find here were made in that notice of motion also. Bisersarlal Chirawawala had pointed out that they were parties of substance and the learned Judge there stated:

In this case the only ground suggested by the plaintiffs in their affidavit as to why an interim injunction should be granted is that if the 2nd defendants paid off the amount to the 1st defendants it would create unnecessary complication and frustrate the very object of this suit. As against this, the 1st defendants in their affidavit have pointed out that they are very substantial, that they own immoveable properties and there is no apprehension whatever that if the plaintiffs were to succeed in their suit and obtain a decree against them they would not be in a position not only to refund the amount paid by the 2nd defendants to them but to satisfy the decree; and in the affidavit in rejoinder made by the plaintiffs these averments are not controverted. Every party asking the assistance of the Court for an interim relief has got ordinarily to show that but for the granting of such a relief irreparable injury would be caused to him. It is not sufficient for him to say that the not granting of the injunction would prejudice him orcause complications or would be a matter of inconvenience.

This was the ratio adopted by Chagla J. and I fully endorse the same. On this particular point the position here is exactly analogous to the position which obtained before Chagla J. and I do not see any reason for interfering with the ordinary course of business which would be, the compliance by the plaintiffs with the demand or requisition of the Bullion Exchange or the taking by the Bullion Exchange of such steps as they may be entitled to do under their Rules and Regulations in the event of default being committed by the plaintiffs as intimated in the letter dated September 2, 1946.

10. Under the circumstances above, I do not think it necessary to discuss the decision in Draper v. British Optical Association, (1938) 1 A.E.R. 115 which was cited by the Advocate General in support of his contention that the second defendants had merely intimated that they would take such action as they may be advised against the plaintiffs in the event of default and that the plaintiff's notice of motion for an injunction restraining the 2nd defendants from taking disciplinary action against them was premature. I may only say this that it is not merely an intimation that some steps would be taken. The only construction which can be put upon the letter dated September 2, 1946, is that disciplinary action would be taken against the plaintiffs in the event of default being committed by them in the matter of the payments demanded of them in that letter and the judgment of Farwell J. in that case itself shows that (p. 119):

It is quite true that, in a proper case, the Court will determine matters of this kind in a quia timet action, but there must be before the Court, before it will entertain a quia timet action, satisfactory evidence that the defendant is threatening or intending to do that which it is said he is not entitled to do, or that which, it is said, will lead to serious damage to the plaintiff.

If necessary I would say that the present case is covered by this dictum of Farwell J.

11. Having regard to the considerations which I have mentioned above, I have come to the conclusion that the notice of motion of the plaintiffs fails and should be dismissed with costs. The costs will be the costs, as taxed, incurred after June 25, 1946. There will be two sets of costs, one of the first defendants and the other of the second defendants, the Bullion Exchange,


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