(1) This revision petition is directed against an order of the Principal District Munsif, Eluru given on 13th July, 1965. It arises in the following circumstances.
(2) The respondent-plaintiff instituted a suit for recovery of a sum of Rs. 2952.42 alleging that to be due on account of purchase of gunnies. The petitioner who is the defendant contended in his written statement that one attayya of Pentapadu has been the agent of the plaintiff. The defendant used to place orders for gunnies through the said Rattayya and also make payments to the plaintiff through the said Rattayya. The defendant contended that on 12-6-64, he paid the amount of Rs. 2500 to the said Rattayya to be paid to the plaintiff. That amount was not credited by the plaintiff in his accounts.
(3) Before the suit went to trial, the defendant filed an application under Order 8-A, Civil Procedure Code to implead Rattayya as a third party defendant. It was contended in the application that if the plaintiff does not give credit to the amount which the defendant paid to Rattyya, the defendant would be entitled to recover it with interest from Rattyyaa. The defendant therefore thinks that he has a right of indemnity in respect of that amount against Rattayya.
(4) This application was resisted both by the plaintiff as well as by Rattyya in their counters. The trial court dismissed the petition merely on the ground that the suit is ripe for trial and if Rattayya is impleaded as a party, there will be a lot of avoidable delay in the suit. The learned Munsif observed that if the present claim of the petitioner is genuine he can file a fresh suit against Rattayya. It was also observed that the petitioner did not pay any court-fees. It is this view of the District Munsif that is now challenged in this revision petition.
(5) It was contended by the learned counsel for the petitioner Mr. I. V. Rangacharya that the trial court did not make any enquiry as is visualised by Order 8-A and was not justified in dismissing the petition on grounds mentioned in the order. He further contended that Rattayya has to indemnify the defendant. The petition filed by the defendant therefore falls within the purview of Rule 1 of Order 8-A.
(6) In order to appreciate the implications of this argument, it is necessary to read Rule 1 of Order 8-A, C. P. C. That rule is in the following terms.
'Where a defendant claims to be entitled to conQ&1om or indemnity against any person not already a party to the suit (hereinafter called a third party), he may, by leave of the Court, issue a notice (hereinafter called a third party notice) to that effect, sealed with the seal of the claim. Such notice shall be filed into Court with a copy of the plaint and shall be served on the third party according to the rules relating to the service of summons.'
(7) A close and analytical reading of R. 1 would make it abundantly plain that in order to attract the provision of Rule 1, it is necessary to obtain leave of the court to issue a third party notice. Before granting leave, the court will naturally be entitled to see whether the claim of the defendant that he is entitled to indemnity against any person not already a party to the suit is valid. It is only after it is satisfied that the defendant is entitled to indemnity against any person that the Court will grant leave to him to issue a third party notice to that effect. How that notice is to be served upon the third party is mentioned in the latter part of Rule 1. I am not concerned with that in this revision petition. It is true that Rule 1 does not make any reference to the fact whether the court would be entitled to issue any notice to the third party before it grants leave to issue notice under Rule 1. It cannot however be disputed that in order to grant or refuse to grant leave the Court can issue a notice to the third party and upon hearing him and other parties who are already on record may decide as to whether it is a fit case in which leave to issue a third party notice can be granted.
There is no prohibition in the Civil Procedure Code for adopting any such procedure. I do not therefore consider that there was anything wrong in the trial Court issuing a notice to third party before it considered the application asking leave to issue a thirdly party notice filed by the defendant. That notice issued by the trial court to the third party is certainly not a notice contemplated by R. 1 of O. 8-ce will be issued only after the Court grants leave and will be issued in accordance with the mode prescribed in R. 1. Undisputedly, the notice was not issued in the manner in which it was contemplated by R. 1. Notice of the application only was given to the third party. He therefore filed a counter and the trial Court after hearing the third party as well as the parties to the suit dismissed the application. It is true that the leave sought by the application is refused under R. 1, but the order has necessarily that effect. It cannot be an order passed under R. 5 as was argued before me. Rule 5 relates to a subsequent stage and that stage in this case had not arrived.
The petition obviously was at the initial stage, a stage where the Court was considering the question of granting or refusing to grant leave contemplated by Rule 1 of Order 8-A. No further enquiry than hearing the parties could have been made in view of the facts of this case. I do not therefore think that the argument of the learned counsel can be allowed to prevail that the order suffers from infirmity inasmuch as it dismissed the application without making any enquiry. The decision relied upon by the learned Advocate Venkatachalapathi v. Suryaprakash Rao, 1957 Andh LT 470: (AIR 1957 Andh-Pra 939) is not inconsistent in any manner with what I have said.
(8) More important than the procedural question is the question whether the petition filed for the issue of a third party notice falls within the ambit of Rule 1 of Order 8-A. In order to attract Rule 1. It is necessary for the defendant to show that he is entitled to indemnity against Rattayya. The contract of indemnity is defined in Section 124 of the Indian Contract Act. That definition is in the following terms.
'A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called 'contract of indemnity.''
That there is no express contract of indemnity is not in dispute. The1u1U uld of course be an implied contract of indemnity. Does such a contract arise from the facts alleged by the defendant in this case? I have no shadow of doubt that even if the facts mentioned by the defendant are found too be correct, it does not constitute an implied contract of indemnity. Either Rattayya is an authorised agent of the plaintiff or is not. If he is an authorised agent, who was, as is alleged by the defendant, authorised to place orders of gunnies and receive money from the customers, any payment made to Rattayya would be a valid discharge even against the plaintiff and no question of indemnity in such a case would arise. If no the other hand it is found that Rattayya ceased to be an agent or was not an authorised agent at all and yet representing himself as an authorised agent of the plaintiff collects some amount from the defendant the defendant undoubtedly will have a cause of action against Rattayya.
But that would not be on the basis of any contract of indemnity express or implied. He gets that cause of action on the ground that Rattayya had falsely represented as the agent of the plaintiff and wrongfully collected money from the defendant. I fail to understand how any question of indemnity visualised by Section 124 of the Indian Contract Act can arise in such circumstances. The mere fact that Rattayya was not the agent at the time of payment and was not authorised to collect the amount from the defendant does not create between them the contractual relationship whereunder Rattayya will have to indemnity the defendant. The defendant has a right in such a case always to proceed against Rattayya under Section 235 of the Contract Act.
(9) That this view is correct is supported by a decision of the Madras High Court in Ramaswami Pillai v. Angammal, : AIR1962Mad243 . In that case the defendant had alleged that he paid some amount in the discharge of the debt to the plaintiff's husband and filed an application under Order 8-A to implead as a third party the husban1??1' the application S. Ramachandra Iyer, C.J. observed:
'In the instant case, the payments have been made by one person a debtor to another (the husband of the creditor) believing in his representation that he had the necessary authority to bind another (wife). This will be a plain case of procuring money by false pretenses. The claim is not therefore one on any indemnity express or implied and the provisions of O. 8-A of the C.P.C will not apply.'
I am therefore clearly of the view that the petition filed by the defendant does not come for the above said reason within the purview of Order 8-A and was therefore rightly rejected under Rule 1 of that order. The effect of that order is that the Court refused to grant leave to issue a third party notice contemplated by that rule. It is true that the trial Court did not refuse to grant leave on the ground as stated by me. The grounds on which the petition was dismissed by the trial court undoubtedly are untenable. If the defendant brings his case within the four corners of Rule 1 of Order 8-A., the court will have to issue a notice unless there are justifiable grounds to refuse to grant leave. Merely because if a third party notice is issued, it might cause delay in disposing of the suit can hardly be a ground for refusing the leave. No question of any payment of court-fees by the first defendant can arise at this stage. I have no manner of doubt that the reasons given by the trial court of dismissing the petition are unsatisfactory and not tenable, but since I reach the conclusion that there was no procedural defect in passing the order and that the petition filed by the defendant does not come within the purview of Rule 1 of Order 8-A, I think the trial court reached the conclusion correctly and rightly rejected the application and refused to grant leave. Although I reach the same conclusion I reach it through a different route.
(10) The revision petition is therefore dismissed. There will be no order as to costs.