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Union Bank of India Vs. Kokila Nitish Kotak and Others - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtMumbai High Court
Decided On
Case NumberAppeal No. 269 of 1998 in Chamber Summons No. 82 of 1997 in Suit No 4821 of 1995
Judge
Reported in1999(3)ALLMR208; 1999(3)BomCR488; (1999)2BOMLR518; 1999(2)MhLj370
ActsCode of Civil Procedure (CPC), 1908 - Order 6, Rule 17 - Order 39, Rules 6 to 10; Income Tax Act, 1961; Government of India Act - Sections 108
AppellantUnion Bank of India
RespondentKokila Nitish Kotak and Others
Appellant AdvocateS.G. Gupte and ;V.V. Warerkar, Advs., i/b ;Warerkar and ;Warerkar
Respondent AdvocateJawahar J. Thakkar, Adv.
Excerpt:
[a] letters patent - clause 15 - appeal - order allowing amendment of written statement - right accrued to plaintiff taken away - order though interlocutory a judgment - appealable.;if specific admissions were contained in the written statement, namely in paras 12, 14, 17, 18 and 32 and if the result of the impugned order was to take away the right accrued to the plaintiff as a result of those admissions, the impugned order, though interlocutory, would be a judgment within the meaning of clause 15 of the letters patent.;[b] civil procedure code, 1908 - order vi rule 17 - amendment of pleadings - benefit of admissions - denial by amendment - not permissible.;if the defendant makes an admission of any fact alleged against him, when the second defendant pleaded his case as set out in.....ordera.v. savant, j.1. heard both the learned counsel; shri gupte for the appellant/original plaintiff union bank of india, and shri thakkar for respondent nos. 1 and 2 original defendants. 2. appeal admitted. 3. filing of the paper book dispensed with shri thakkar for respondent nos. 1 and 2 waives service. 4. by consent, appeal taken up for hearing forthwith. 5. the appeal is against the order dated 19th november, 1997, passed by the learned single judge in chamber summons no. 82 of 1997 in suit no. 1821 of 1995. under the impugned order the learned judge has made the chamber summons absolute which has the result of granting several amendments to the written statement which take away the right accrued to theappellant bank as a result of several admissions given by the respondent no. 2.....
Judgment:
ORDER

A.V. Savant, J.

1. Heard both the learned Counsel; Shri Gupte for the appellant/original plaintiff Union Bank of India, and Shri Thakkar for respondent Nos. 1 and 2 original defendants.

2. Appeal admitted.

3. Filing of the paper book dispensed with Shri Thakkar for respondent Nos. 1 and 2 waives service.

4. By consent, appeal taken up for hearing forthwith.

5. The appeal is against the order dated 19th November, 1997, passed by the learned Single Judge in Chamber Summons No. 82 of 1997 in Suit No. 1821 of 1995. Under the impugned order the learned Judge has made the chamber summons absolute which has the result of granting several amendments to the written statement which take away the right accrued to theappellant Bank as a result of several admissions given by the respondent No. 2 in the suit filed by the appellant bank.

6. Suit No. 4821 of 1995 has been filed by the appellant bank for recovery of an amount of Rs. 29,24,271.50 as per the statement of account annexed at Ex. Q to the plaint with interest on the said amount at the rate of 20.50% p.a. with quarterly rests from the date of filing of the suit i.e. to say from 16th December, 1995. Prayer (b) in the plaint is for declaration in respect of the equitable mortgage of the property known as 'Kotak Villa' which was to secure the loan advanced by the bank.

7. It appears that on 15th November, 1989, the respondents applied to the appellant bank for sanction of a loan of Rs. 14,00,000/- for purchase of residential premises. On the loan being sanctioned the amount was disbursed to the respondents on 20th February, 1990. Title deeds in respect of the property mortgaged viz. the residential premises were deposited with the appellant bank. In terms of the loan transaction the appellant bank called upon the respondents to pay the outstanding dues. The respondents called to pay any amount. The appellant sent a legal notice on 24th August, 1995 calling upon the respondent to pay the amount due. On failure of the respondents to pay the amount suit was filed on 16th December, 1995.

8. Notice of Motion No. 260 of 1996 was taken out for ad-interim reliefs such as appointment of Court Receiver and injunction. On 8th November, 1996 the learned Single Judge made the motion absolute in terms of prayer (a) directing the Court Receiver, High Court, Bombay to take possession of the mortgaged property.

9. In the plaint the appellant has referred to the request made by the respondents for grant of term Loan of Rs. 14,00,000/- to enable them to purchase the residential premises. After the loan was sanctioned an amount of Rs. 13,70,000/- was paid to the respondents. The respondents executed a power of attorney in favour of the appellant as also an undertaking to create the mortgage in respect of the residential premises. The correspondence between the parties would show that the liability of the respondent is admitted. The respondents have also executed a promissory note on 26th March, 1993, for a sum of Rs. 17,48,605.50 which is annexed at Ex. K to the plaint. The plaint refers to the advocate's notice dated 7th August, 1995 calling upon the respondents to pay the amount of Rs. 26,52,360.50/-. The plaintiff also refer to the fact that repayment of the aforesaid amount with interest was secured by the equitable mortgage of the property being a row house known 'Kotak Villa'. In the circumstances the plaint prays for a decree in the sum of Rs. 29,24,271.50/- with interest at the rate of 20.50% per annum with quarterly rests from the date of filing of the suit till payment or realisation. There is also a prayer for declaration that the aforesaid dues were secured by the equitable mortgage of the property known as 'Kotak Villa'.

10. On 31st December, 1996 the second respondent husband of the first respondent filed the written statement. In the written statement so filed, the second respondent categorically admitted the claim of the bank as also the fact that equitable mortgage has been created in favour of the bank. He also admitted that he had no other saleable assets excepting the mortgaged property to pay off the claim of Rs. 29,24,271,50/-. The specific admissions contained in paras 12,14,17, 18 and 32 may be reproduced below since underthe impugned order the learned Judge has permitted complete deletion of the said paras 12, 14, 17, 18 and 32.

'12. Defendants had created equitable mortgage in favour of Union Bankof India.

14. Defendants have addressed letter dated 25-7-1994 and 18-3-1994 to the Society to mark lien of the plaintiffs over premises known as 'Kotak Villa'.

17. Respondent No. 2 does not have any other easily saleable asset to pay off the sum of Rs. 29,24,271.50 claimed by the plaintiffs prays that the said 'Kotak Villa' be sold off by public auction by Court Receiver and the amount payable to Union Bank of India, be paid off by Court Receiver defendant No. 2. Further prays that till the possession of Kotak Villa is handed over to auction purchaser the defendant Nos. 1 and 2 be allowed to use and occupy said Kotak Villa as agent of the Court Receiver without payment of royalty and security.

18. As the defendant No. 2 is admitting the claim of the plaintiffs as prayed in prayer (a) of the plaint, defendant No. 2 is not denying other allegations of the plaint specifically line by line, all other allegations of the plaintiff are hereby denied. However as the claim of plaintiff is being admitted by defendant No. 2 as prayed in terms of prayer (a) of the plaint and as defendant No. 2 has no objection if the said amount is realised by sale of Kotak Villa as prayed for by the plaintiff in prayer (g) the decree in terms of prayer (a) and (g) to this extent be kindly passed on admission. According to defendant No- 2 the market value of said Kotak Villa is Rs. 1,97,00,000/-approximately and defendants have agreed to deposit in Court the sum of Rs. 19,00,000/- in Suit No. 4281 of 1995 and therefore defendant No. 2 prays that the said sum of Rs. 19,00,000/- be deposited in Court or with Court Receiver and the balance amount be paid over to the defendants.

32. Defendant therefore prays that suit of the plaintiff be decreed onadmission in terms of prayers (a) and (g) as submitted above.'

11. It will be clear from the above quoted paras in the written statement that in the first place, in para 12 the second defendant admitted that he had created an equitable mortgage in favour of the bank. Secondly in para 14 he admitted that they had addressed letters on 25th July, 1994, and 18th March, 1994, to the society to mark a lien of the bank over the premises known as 'Kotak Villa'. Thirdly, in para 17 defendant No. 2 admitted that he did not have any other easily saleable assets to pay off the claim of Rs. 29,24,271.50. The second defendant categorically prayed that till possession of Kotak Villa was handed over to the auction purchaser defendant Nos. 1 and 2 may be allowed to occupy the said premises as agents of the Court Receiver without payment of royalty and security. Fourthly in para 18, the second defendant admitted the claim of the plaintiff bank specifically in terms of prayer (a) of the plaint. Prayer (a) of the plaint may be reproduced below;

'(a) that the defendants be ordered and decreed to pay to the plaintiffs jointly and severally a sum of Rs. 29,24,271,50/- (Rupees Twenty Nine Lakh Four Thousand Two hundred and Seventy One and Paise Fifty only) as per the statement of account annexed and marked as exhibit 'Q' to the plaint with interest on the said sum of Rs. 29,24,271.50 at the rate of 20.50 per cent per annum with quarterly rests from the date of the filing of the suit till payment or realisation.'

In the said para 18 of the written statement defendant No. 2 further conceded to the decree in terms of prayer Clauses (a) and (g) on admission. Prayer (g) of the plaint is reproduced below;

'(g) that in the event of the defendants committing default in payment of the amount mentioned in prayer (a) above on or before such date of redemption the property known as 'Kotak Villa' having three self contained flats, bearing Nos. 1, 2 and 3 respectively and situate at plot No. 36, Samarth Nagar, 3rd Cross Road. Lokhandwala Complex, Andheri (West), Bombay 400 058 as more particularly described in Exhibit 'H' hereto be ordered to be sold and the net sale proceeds thereof be paid to the plaintiffs in or towards the satisfaction of the plaintiffs claim in the suit.'

12. In the written statement filed by the second respondent-husband of the first respondent there is an admission of the fact that the amount of Rs. 13,70,000/- was borrowed as a term Loan for purchase of the flat; that the promissory note was executed for the said amount. Paras 1 to 11, 13, 15 and 16 open with the words, 'It is true that'. There is virtually an admission in the correspondence of the liability to the tune of Rs. 26,52,360.50/- demanded under the notice dated 7th August, 1995. There is also an admission of the creation of an equitable mortgage and the fact that the second defendant did not have any other easily saleable assets and therefore the mortgaged property 'Kotak Villa' be sold by public auction and amount be paid to the plaintiff. There are specific averments to this effect in paras 16, 17 and 18 of the written statement.

13. Apart from the above quoted paras 12, 14, 17, 18 and 32 of the written statement which are permitted to be completely deleted under the impugned order the learned Judge has permitted further amendment by defeating certain portion in para 26. The same is set out in Exh. 1 to the Chamber Summons. The material portion deleted from para 26 is as under :---

'There was an equitable mortgage in favour of Union Bank of India, in respect of the said Kotak Villa and that.'

14. There is further deletion permitted from para 31 of the original writtenstatement which read as under :

'31. Defendant No. 2 denies that defendant No. 2 is not ready and willing to perform his part of contract. Defendant No. 2 denies that defendant No. 2 has failed to. complete the formalities of equitable mortgage of the said property. Defendant denies that defendant No. 2 has committed the breach of the Contract. Defendant No. 2 says that defendant No. 2 has not disposed off the said three flats of Kotak Villa but had made only proposal to Mr. Diwan Rahul Nanda and before selling the said Kotak Villa the prior permission, security and to sell through Court Receiver by public auction the said Kotak Villa offer, realisation of the dues lawfully payable to Union Bank of India. Defendant No. 2 therefore prays that to this extent the suit of the plaintiff be decreed in terms of prayer (a) and (g) of the plaint and as the market value of the premises is nearly Rs. Two crores out of the balance amount the sum of Rs. 19,00,000/- be deposited in Court and further balance amount be paid over to defendant Nos. 1 and 2 in equal proportion.'

What has been permitted to be deleted from the said para is stated in parasIII, IV and V of Exhibit 1 to the Chamber Summons which reads as under :

'III. The following sentence appearing in the second, third and fourth lineof Original Para No. 31 be allowed to be deleted.

Defendant No. 2 denies that defendant No. 2 has failed to complete the formalities of equitable mortgage or the said property.'

IV. The following words appearing in 22nd and 23rd line of Original ParaNo. 31 be allowed to be deleted.

'In respect of Union Bank of India'

(V) The following sentences appearing in of the plaintiff as well as appropriate authority under Chapter XXC of Income Tax Act, 1961 would have been obtained. The defendant No. 2 would have definitely incorporated in the written agreement to be executed between Mr. Diwan Rahul Nanda and the defendant No. 2 the term and condition that Mr. Diwan Rahul Nanda shall directly pay to Union Bank of India the amount payable to the said bank and that said agreement would be subject to the permission from Union Bank of India and appropriate authority. The said proposal was already conveyed to Mr. Diwan Rahul Nanda. Without compliance with the above requirement the sale could not have been completed because the title deeds except share certificate were lying with Union Bank of India in respect of Union Bank of India. Defendant No. 2 denies that defendant No. 2 has engineered to dispose off the mortgage security. The Court Receiver is already appointed in respect of Kotak Villa and defendants have no objection if the Court Receiver takes symbolic possession forthwith of said Kotak Villa and allows defendant No. 1 and 2 to use and occupy Kotak Villa as agent of the Court Receiver without royalty and original para No. 31 from 25th line onwards to the end of para 31 and starting with the words.

'The Court Receiver is already.............' and ending with the words 'inequal proportion' be allowed to be deleted.'

15. After deleting the above stated portions which in our view takes away the right which had accrued to the appellant on the basis of several admissions made by defendant No. 2 on behalf of both the defendants, the impugned order permits addition of para (31-A) to (31-H) in the written statement which read as under :

'(31-A) Defendant No. 2 states that defendants had met Mrs. A.A. Patel (C.M. Recovery) and as per discussions with her defendants had sent to Union Bank of India, the loan repayment proposal was sent to Mrs. A.A. Patel of Union Bank of India. The said letter was addressed on 18-8-1994. It was proposed that the amount of Rs. 22,50.000/-was to be repaid alongwith the interest upto September, 1994 as informed by Mrs. A.A. Patel that defendants. It was agreed by Mrs. A.A. Patel that defendants should make to Union Bank of India down payment of Rs. 5,00,000/- within two months from the security and to sell through Court Receiver by public auction the said Kotak Villa offer realisation of the dues lawfully payable to Union Bank of India. Defendant No. 2 therefore prays that to this extent the suit of the plaintiff be decreed in terms of prayer (a) and (g) of the plaint and as the market value of the premises is nearly Rs. Two crores out of the balance amount the sum of Rs. 19,00,000/- be deposited in Court and further balance amount be paid over to defendant Nos. 1 and 2 in equal proportion.'

What has been permitted to be deleted from the said para is stated in paras III, IV and V of Exhibit 1 to the Chamber Summons which reads as under :

'III. The following sentence appearing in the second, third and fourth lineof original para No. 31 be allowed to be deleted.

'Defendant No. 2 denies that defendant No. 2 has failed to complete the formalities of equitable mortgage or the said property.'

IV. The following words appearing in 22nd and 23rd line of original paraNo. 31 be allowed to be deleted.

'In respect of Union Bank of India'

V. The following sentences appearing as date of acceptance of the proposal by Union Bank of India acceptance of the proposal by Union Bank of India and the balance amount of Rs. 17,50,000/- was to be said by defendants in 30-9-1994 was to be frozen at Rs. 22,50,000/- and no further interest was to be charged for the repayment period.

(31-B). In October 1994, Defendants met Mrs. A.A. Patel once again and at that time Mrs. A.A. Patel asked defendants to increase the down payment to Rs. 6,00,000/- instead of Rs. 5,00,000/- as she would be able to convince the management of Union Bank of India to accept the said proposal if more than 25% of the outstanding amount was being paid by way of down payment. Defendants agreed to the suggestion of Mrs. A.A. Patel but defendants would be able to pay first twelve installments of Rs. 55,000/- each and balance amount after the down payment and 12 said installments would be paid in 18 equal installments. Mrs. A.A. Patel agreed to the same. In November, 1994, the defendants met Mr. Bangera, Assistant General Manager, Regional Office Bombay (South), Union Bank of India, for the first time and he suggested that once again the said proposal be given in writing. In these circumstances the letter dated 24-11-1994 was addressed by defendants to Union Bank of India, Nepean Sea Road Branch, Bombay 400 006.

(31-C) Defendant No. 2 therefore submits that Union Bank of India had agreed to accept the sum of Rs. 22,50,000/- being the amount due as on 30-9-1994 and Union Bank of India had agreed not to charge any further interest and Union Bank of India, had agreed to accept the sum of Rs. 22,50,000/- in installments.

(31-D) In these circumstances, defendant No. 2 submits that the claim of Union Bank of India as stated in the plaint is much more than the amount agreed to be received from defendants by Union Bank of India. Various amounts paid by the defendant were not taken into consideration. Penal interest was charged. The compound interest was charged. In these circumstances it was agreed that final amount payable by defendants to Union Bank of India was Rs. 22,50,000/ -. These facts are recorded in letter dated 4-11-1994. The said letter has been personally delivered to Union Bank of India who has acknowledged the receipt of the same. The said letter was misplaced and therefore the defendants were not able to forcefully assert the above contentions. Under mistaken impression the defendants agreed to pay to Union Bank of India the amount claimed in the plaint of Suit No. 4821 of 1995. Union Bank of India till today has not denied the statements made by defendants in letter dated 24-11-1995. Union Bank of India till today has not denied the statements made by defendants in letter dated 24-11-1994. Defendant No. 2 submits that defendants are entitled to withdraw the admission if they are made under incorrect impression or because of mistake in calculation. Before the passing of the decree the said admissions can be withdrawn at any stage by giving proper explanation. These facts were also recorded in letter dated 6-1-1997 addressed to Court Receiver.

(31-E) Defendant states that even according to plaintiff, plaintiff sanctioned the been loan of Rs. 13,70,000/- on 28-2-1990. It is admitted by plaintiff that defendants paid to the plaintiff the sum of Rs. 1,80,220/- on 14-9-1990, Rs. 1,00,000/- on 6-4-1991, Rs. 25,000/ - on 18-4-1991 Rs. 1,32,500/- on 1-10-1992, Rs. 2,00,000/- on 11-11-1992. Thus, calculating the interest at 18.5% per annum and adjusting the amounts paid by the defendants to the plaintiff, the net amount payable as on 16-12-1995 is Rs. 18,93,061.00. The plaintiff has incorrectly stated in the plaint that the plaintiff is entitled to recover from the defendants the sum of Rs. 29,24,271.50. The statement of accounts will be relied upon as and when produced. Thus, even the amount of Rs. 22,50.000/- fixed by Union Bank of India as the amount due from the defendants in 1994 seems that amount payable by defendants therefore submit that the amount payable by defendants to the plaintiff as on 16-12-1995 with interest at 18.5% per annum was Rs. 18,93,061.00 and defendants are ready and willing to pay the said amount as per the time frame agreed in 1994 as recorded in the letter addressed by the defendants to the plaintiff. In the event of this Hon'ble Court coming to the conclusion that the amount payable by the defendants to the plaintiff is Rs. 22,50,000/- the defendants are prepared to pay to the plaintiff the sum of Rs. 22,50.000/- as per the time frame earlier and without payment of any further interest. It is just and proper to alter the time frame only to a limited extent that the first time shall be made after three months from the date of passing of the decree.

(31-F) Defendant No. 2 therefore submit that suit of plaintiff is not maintainable as it is filed for amount which is not due even according to them admitted by them later on in 1994 during discussion.

(31-G) All other contentions raised by or statements made by defendant No. 2 in any Affidavit filed in this Honourable Court or anywhere else which statements and contentions are contrary to the statements and contentions stated above are hereby withdrawn and the allegations of Union Bank of India which are contrary to the above statements and contentions are hereby denied.

(31-H) The defendant No. 2 also points out at the time of drafting is in possession of suit premises pursuant to the order passed in Suit No. 4821 of 1995 filed by Union Bank of India and as per orders passed in Suit No. 4281 of 1995 filed by Mr. Diwan Rahul Nanda.'

16. At this stage it would be necessary to peruse the reasons given in the affidavit in support of the Chamber Summons praying for amendment. The story pleaded is that the defendants had met Smt. A.A. Patel, Chief Manager of the Bank who was in-charge of the recovery and after discussion with her a proposal for repayment of the loan was made. It was proposed that defendants would repay Rs. 22,50,000/- with interest upto September, 1994. In para 5 of the affidavit in dated 22nd July, 1997 made by defendant No. 2 it is stated that 'It was agreed that final amount payable by defendants to Union Bank of India was Rs. 22,50,000/-. These facts are recorded in letter dated 24-11-1994. Then in para 6 of the affidavit of defendant No. 2 it is averred that the bank had acknowledged the receipt of the letter dated 24th November, 1994 but the letter was misplaced (presumably by the defendants) and therefore, the defendants were not liable to forcefully assert the above contention. It is then stated that under a mistaken impression the defendants had agreed to pay to the bank the amount claimed in the plaint and that theplaintiff had till that day not dented the statement made by the defendants in their letter dated 24th November, 1994. This is the spacious excuse given in paras 5 and 6 of the affidavit of the second respondent in support of the proposed amendments which takes away the right accrued to the plaintiff bank on the basis of the several admissions contained in the written statement. Surprisingly, the letter dated 24th November, 1994 was not annexed to the affidavit though several other documents have been put on record. A perusal of the correspondence between the parties commencing with the letter dated 24th November, 1994 shows that the bank had immediately replied on 22nd December, 1994 and called for certain details. This was followed by another letter by the Chief Manager of the bank issued on 13th January, 1995. Further letters were addressed by the Chief Manager Smt. A.A. Patel on 2nd February, 1995, 22nd February, 1995 and finally on 3rd March, 1995 the said Smt. A.A. Patel had conveyed regrets of the bank that the temporary over draft permitted to the respondents was not adjusted despite the assurance given by them that the same would be paid before 28th February, 1995. In view of non-co-operation of the respondents the bank regretted that it had no option but to convey to the branches concerned to initiate legal proceedings for recovery of the due both at the Nepean Sea Road, Branch as well as at the Byculla Branch.

17. As stated earlier, the proposal contained in the letter dated 24th November, 1994, was that the total amount payable i.e. was Rs. 22,50,000/- and the repayment was proposed commencing with a down payment of Rs. 6,00,000/- and further installments of Rs. 55,000/- payable per month. Admittedly, no payments were made by the respondents as per the said proposal dated 24th November, 1994. What is relevant however, to note is that the bank had written to the respondents on 13th January, 2nd February, and 22nd February, 1995 before finally rejecting the proposal on 3rd March, 1995. There is thus no merit in the excuse trotted out in paras 5 and 6 of the affidavit that the defendants were under a mistaken impression in respect of their liability to pay Rs. 22,50,000/- and that the proposal made by the defendants was not accepted by the bank. As indicated earlier, the proposal was categorically turned down in the letter dated 3rd March, 1995. As stated earlier the suit has been filed as late as on 16th December, 1995.

18. We must first deal with the preliminary objection raised by Shri Thakkar. His preliminary objection was that the impugned order is not a judgment within the meaning of Clause 15 of the Letters Patent and hence this appeal is not competent. Clause 15 of the Letters Patent reads as under :

'15. And we do further ordain that an appeal shall lie to the said High Court of Judicature at Fort Willam in Bengal from the judgment (not being a judgment passed, in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court and not being an order made in the exercise of revisional jurisdiction and not being a sentence or order passed or made in the exercise of the power of superintendence under the provisions of section 107 of the Government of India Act or in the exercise of criminal jurisdictional of one Judge of the said High Court or one Judge of any Division Court, pursuant to section 108 of the Government of India Act and that notwithstanding anything herein before provided an appeal shall lie to the said High Court from ajudgment of one Judge of the said High Court or one Judge of any Division Court, pursuant to section 108 of the Government of India Act made (on or after the 21st day of February, 1929) in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court where the Judge who passed the judgment declares that the case is a fit one for appeal but that the right of appeal from other judgments of Judges of the said High Court or of such Division Court shall he to us. Our heirs or successors in our or their Privy Council, as hereinafter provided.'

19. Shri Thakkar invited our attention to two decisions of this Court to which we must make a reference. In H. Scott v. Jitta Amichand & Co., 38 Bom LR 529, it was held that a person carrying on business in a name other than his own; cannot sue in the firm name, though he can be sued in that name. An order was passed directing substitution of the name of the sole partner constituting a firm in the title of the plaint. It was held that such an order was regulating the procedure in the suit and no appeal lay from such an order under Clause 15 of the Letters Patent.

20. In Narendrabhai Sarabhai Hatheesing and others v. Chinubhai Manibhan Seth, A.I.R. 1936 Bom 314 it was held that the order of the Court refusing to commit a person for breach of an undertaking given to the Court and embodied in the order of the Court cannot be said to be a judgment within the meaning of Clause 15 as it does not affect the merits of any question between the parties and hence was not appealable under Clause 15 of Letters Patent.

21. We do not think that the ratio of the said decisions has any application to the facts of the present case. In our view, the controversy is no longer res integra in view of the judgment of the Apex Court in Shah Babulal Khimji v. Jayaben D. Kania and another, : [1982]1SCR187 . In the said case the Apex Court has considered the judgments of various High Courts where there was a difference of opinion on what constitutes a judgment within the meaning of Clause 15 of the Letters Patent. In para 116 of the judgment at page 1816 the Apex Court has given one more instance of an interlocutory order though passed in exercise of discretion of a learned Single Judge which could still amount to a judgment within the meaning of Clause 15 of the Letters Patent. Suppose a learned Single Judge had allowed the plaintiff to amend his plaint or include a cause of action or a relief as a result of which a vested light of limitation accrued to the defendant was taken away and rendered nugatory. The Apex Court held that though such an order was purely discretionary and interlocutory, it cause gross injustice to the defendant who was deprived of the valuable right and therefore was a judgment within the meaning of Clause 15. Reliance was placed on the earlier decision in (Shanti Kumar R. Canji v. Home Insurance Co. of New York}, reported at : [1975]1SCR550 . Then in para 120 of the judgment at page 1817 the Apex Court has enlisted several interlocutory orders which could still be treated as judgments within the meaning of Clause 15. We may only reproduce the first illustration which reads as under:

'(1) An order granting leave to amend the plaint by introducing a new cause of action which completely alters the nature of the suit and takes away a vested right of limitation or any other valuable right accrued to the defendant.'

Applying the above ratio of the decision of the Apex Court, in our view if specific admissions were contained in the written statements which are reproduced earlier, namely in paras 12, 14, 17, 18 and 32 and if the result of the impugned order was to take away the right accrued to the appellant as a result of those admissions the impugned order though interlocutory would be a judgment within the meaning of Clause 15 of the Letters Patent. Thus, relying upon the ratio of the Apex Court decision in Shah Babulal Khimjt's case, we overrule the preliminary objection raised by Shri Thakkar and hold that the impugned order is a judgment within the meaning of Clause 15 of the Letters Patent.

22. Coming to the merits of the orders. It is well settled that though a defendant may take inconsistent pleas, he can not be permitted to substitute the written statement which has the result of seeking to displace the plaintiff completely from the admissions made in the earlier written statement. We may in this behalf refer to the decision of Apex Court in M/s. Modi Spinning & Weaving Milts Co. Ltd. and another v. M/s. Ladha Ram & Co., : [1977]1SCR728 . In the case before the Apex Court, the written statement contained a para which described the nature of the transaction and the fact that the plaintiff had worked as a stockiest-cum-distributor of the defendants. Later on the defendants applied for deletion of the said para and contended that the plaintiff was appointed as a mercantile agent and the plaintiff acted in that capacity in placing the orders on the defendants. The trial Court had rejected the application for amendment on the ground that repudiation of the clear admission was motivated to deprive the plaintiff of the valuable right accrued to him. The High Court had upheld that order observing that the proposed amendment introduced an entirely different case and was not permissible. The Apex Court upheld the orders rejecting the amendment and observed in para 10 of the judgment at page 681 as under:

'10. It is true that inconsistent pleas can be made in pleadings but theeffect of substitution of paragraphs 25 and 26 is not makinginconsistent and alternative pleadings but it is seeking to displacethe plaintiff completely from the admissions made by the defendantsin the written statement. If such amendments are allowed theplaintiff will be irretrievably prejudiced by being denied the opportunityof extracting the admission from the defendants. The High Courtrightly rejected the application for amendment and agreed with thetrial Court.'

23. It is thus clear that if the defendant makes an admission of any fact alleged against him, as was done in the present case, when the second defendant pleaded his case as set out in paragraphs 12, 14, 17, 18 and 32 of the written statement. In our view, it would not be permissible in law to amend the written statement which would have the result of denying the benefits of the admissions to the appellant.

24. Shri Thakkar for the respondents contended that an amendment which was procedural and which did not decide the right between the parties ought to be granted. The argument is that the result of the impugned order deleting paras 12, 14, 17, 18 and 32 of the written statement and deleting substantial part of para 31 of the written statement was merely procedural and formal. Counsel contended that deletion of the said averments did not affect the rights of the appellant bank. Further contention was that addition of paras 31-A to 31-H also did not change the nature of the controversy between the parties. Reliance was placed on the decisions to which we will make a brief reference.

25. In Jai Jai Ram Manohar Lal v. National Building Material Supply, Gurgaon, : [1970]1SCR22 , the plaintiff, who was the Manager of the Joint family and was carrying on its business under a business name, had brought a suit in the business name and when objection was taken by the defendant that the firm was unregistered and was incompetent to sue, the plaintiff applied for amendment of the plaint stating that he himself had intended to file a suit and had infact filed the suit on behalf of the family in the business name. It was in these facts that the Apex Court held that the amendment would be permissible. We do not think that ratio of the said decision has any application to the facts of the case before us.

26. In Panchadeo Narain Srivastava v. Kum. Jyoti Sanay and another, : AIR1983SC462 , the plaintiff had described himself as a son of uterine brother of one person, Subsequently he moved an application for amendment of the plaint seeking deletion of the word 'Uterine' from the plaint and seeking to explain the admission made by him. While the trial Court had granted the application for amendment the High Court exercising revisional jurisdiction had set aside the order granting amendment. The Apex Court held that amendment seeking to explain admission given earlier ought to be granted in Akshaya Restaurant v. P Anjunappa and another, : AIR1995SC1498 the Apex Court held that even an admission can be explained by subsequent plea and the defendant could be permitted to raise inconsistent plea by way of amendment. There can be no doubt about the propositions of law laid down by the Apex Court but with respect, we do not think that these principles have any application to the facts of the present case. What has been done by the respondents is to completely retract the categoric admission contained in paras 12, 14, 17, 18, 31 and 32 of the written statement. Based on those averments, the bank is entitled to pray for a decree since the respondents admitted that they were liable to pay in terms of prayer Clauses (a) and (g) of the plaint.

27. In our view, permitting the second defendant to delete the categoric admissions in respect of his liability to pay the specific amount, rate of interest, the creation of an equitable mortgage in respect of 'Kotak Villa' would be contrary to law. We have already discussed in paras 16 and 17 above that the reasons given in the affidavit do not convince us. The story pleaded in paras 5 and 6 of the affidavit about the proposal dated 24th November, 1994, having not been considered by the Bank is far from true. The respondents' contention that they were under the mistaken impression is not supported by the correspondence on record. The proposal dated 24th November, 1994 categorically admitted the liability to the tune of Rs. 22,50,000/- and the respondents offered to make the down payment of Rs. 6,00,000/- and pay the balance of amount by monthly installments of Rs. 55,000/-. In response to this offer, the Chief Manager Smt. A. A. Patel called for certain details by her letter dated 22nd December,1994. Reminders were sent on 13th January, 1995, 2nd and 22nd February,1995. The respondents having failed to respond and having failed to adhere to the terms of the proposed settlement. Smt. Patel informed the respondents on 3rd March, 1995 that the bank regretted failure on the part of the respondents to make any payment despite assurance that the payment would be made by 28th February, 1995. In the circumstances, she directed that legal action be taken for recovery of the dues by both the branches i.e. Nepean Sea Road branch and the Byculla branch. It was after this letter was issued on 3rd March,1995 that the suit was filed on 16th December, 1995. There is thus no substance in the story pleaded in the affidavit in support of the chamber summons.

28. We may also refer to another letter dated 8th January, 1997, addressed by the Counsel for the respondents. The letter reads as under:

'Under instructions of my client Mrs. Kokila Nitish Kotak, I hereby enclose the copy of consent terms. My client has approved your draft consent terms with typographical corrections and two modifications.

We shall move the Court preferably on 13-4-1997, if you agree.'

When we turn to the consent terms which are annexed to the said letter, in para 4 of the said Consent Terms there is categoric admission of the liability in the following terms.

'The defendants hereby agree to pay to the plaintiff jointly and severally a sum of Rs. 29,04,516.50 (Rupees twenty nine lakh four Thousand Five Hundred and Sixteen and Paise fifty only) as per the statement of account annexed and marked as Exhibit-Q to the plaint with interest on the said sum of Rs. 209,04,516.50 at the rate of 20.50 per cent per annum with quarterly rests from the date of the filling of the suit till payment or realisation.'

29. In view of the above we have no doubt in our minds that the respondents have repeatedly admitted the liability to pay the debt. They have also admitted the late of interest being 20.50%. They had admitted the existence of an equitable mortgage in respect of Kotak Villa and are now trying to retract. From those admissions by seeking to delete paras 12, 14, 17, 18 some part of 31 and para 32. In our view, therefore, the impugned order adversely affects the right which had accrued to the appellant Bank. The additional pleadings incorporated in para 31-A to 31-H would also substantially change the nature of the controversy between the parties. The amendment would, therefore, defeat the claim of the appellant bank, we must, however, hasten to add that on the original pleading without the amendment being granted to the written statement, whatever be the contentions on merits available to the respective parties, the same are kept open.

30. In this view of the matter the impugned order is unsustainable. The appeal is, therefore, allowed.

31. At this stage Shri Thakkar applies for stay of operation of this order on the ground that the appellant Bank may soon apply for decree on admission. Shri Gupte for the appellant makes a statement that the appellant will not apply for decree on admission for a period of 4 weeks from today. Statement made by Shri Gupte is accepted.

32. Issuance of certified copy expedited.

33. Appeal allowed.


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