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Bank of Baroda Vs. Prakash Warehouse and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtDelhi High Court
Decided On
Case NumberSuit Appeal No. 465 of 1978
Judge
Reported in[1981]51CompCas609(Delhi); ILR1980Delhi962
ActsCode of Civil Procedure (CPC), 1908 - Order 1, Rule 3; Court Fees Act, 1870 - Sections 17
AppellantBank of Baroda
RespondentPrakash Warehouse and ors.
Advocates: J. Lal and; A.K. Mata, Advs
Excerpt:
.....emphasis here is on the causes of action. it is a condition precedent to the applicability of the rule that defendants must be jointly liable in respect of each and every one of the causes of action sought to be joined. these two orders and rules thus strike a balance between the fundamental concepts that multiplicity of suits should be avoided and that the trial of suit should not be embarrassed by simultaneous investigation of totally unconnected controversies.; as regards order 1 rule 5 which envisages that every defendant need not be interested in all the reliefs claimed, the same comes into operation only if the requirements of order 2 rule 3 and order 1 rule 3 are otherwise satisfied.; in so far as the current and loan accounts were concerned, the plaintiff could have joined..........and the loan account were concerned, the plaintiff could have joined together the two causes of action defendants no. 1 to 4 were jointly concerned with both of than. ' they involved common questions, and the single suit has avoided multiplicity of proceedings. however, defendant no. 5 is not, in any manner, concerned with these two accounts and, thereforee, has no common interest with the other defendants about .them. his liability, if any, is confined to the cash-credit account and this was a distinct transaction or series of transactions from the other two accounts, and there was no nexus between them. there is no question of fact and law involved in this account which can be treated as common with the other two accounts. it must, thereforee, be held that the joining of the cause.....
Judgment:

D.R. Khanna, J.

(1) This suit brought by the Bank of Baroda against the five defendants for the recovery of Rs. 4,17,729.85 p., has arisen in the following circumstances :

(2) A current account was got opened by defedant No. 1 firm, of which defendants No. 2 to 4 are partners, with the plaintiff on 8-4-1975. Defendant No, 5 had then introduced defendants No. 2 to 4 to the plaintiff. On the basis of this account, the plaintiff is- seeking a decree of Rs. 3.15,722.04 p. against defedant No. 1 and its partners. This large liability has resulted as the defendant-firm had been overdrawing.

(3) Another account known as cash-credit account, was got opened by defendant No. 1 with the plaintiff on 22-4-1975. This had drawal facility of Rs. 25,000.00 . Defendant No. 5 had stood as guarantor for this account and had executed a document in this direction on 19th April, 1975. On the basis of this account the plaintiff claims a decree for Rs. 40,133.51 p. against all the defendants including defendant 'No.'5.'

(4) A third account styled as loan account, was opened by defendant No. I with the plaintiff on 14-6-1975, and the credit facility allowed in this was for Rs.40,000.00 . A sum of Rs. 61,874 is claimed due and payable by the defendant-firm on the basis of this account.

(5) The total of all these amounts due came to Rs. 4,17,729.85 p. for which a decree is claimed in the suit against defendants No. 1 to 4. However, the relief against defendant No. 5 is restricted to Rs. 40,133.51 p. out of this amount, as he had stood guarantor for the second account only styled as cash-credit account.

(6) Defendants No. 1 to 4 are ex-parte in this suit. Defendant No. 5 alone is contesting the suit. This defendant raised in his written statement a preliminary objection about the misguide of cause of action and the defendants. The suit was also pleaded to be not properly valued for purposes of court-fee.

(7) Consequently, the following issues on which adjudication has been sought first, were, inter alia, framed :

'1. Whether the present suit against defendant No. 5 is bad for misguide of causes of action If so, to what effect OPD-5.

2.Whether proper court-fees has not been paid by the plaintiff Of Parties.'

(8) The sum and substance of the case of defendant No. 5 on issue No. I is that he had stood guarantor with respect to cash-credit account only which had credit facility of Rs.25,000.00 , and, thereforee, his liability, it at all, can' be confined to this account only. The amount under this account claimed by the plaintiff is Rs. 40,133.51 and the suit to this extent is triable by the District Court. So far as the other two accounts are concerned, it is pointed out that this defendant has absolutely nothing to do, nor the plaintiff is claiming any relief qua him on their basis. The three accounts were the. result of separate independent transactions by the other defendants with the plaintiff and they were not inter-linked or mutually dependent .on each other. Each account thus, it is contended, gave rise to separate cause of action in favor of the plaintiff. Defendant No. 5, however, is in no manner interested or concerned with the other two accounts, and. A thereforee, his impleading defedant in so far as the suit concerned those accounts, was patently had and unwarranted. The suit on this ground is, thereforee, stated to suffer from multifariousness.

(9) From the side of the plaintiff, on the other hand, it is asserted that the three accounts provided an overall facility to defendants No. 1 to 4 to obtain over-drafts from the plaintiff, and thus there was an inter-link between them. Reference has been made to Order I Rule 5 of the Code of Civil Procedure Code, in order to show that it is not necessary that evey defendant should be interested in all the reliefs claimed in any suit against him.

(10) In my opinion, the controversy raised depends upon the interpretation of the provisions contained in Order I Rule 3 and Order 2 Rule 3 of the Code of Civil Procedure. The former is to the following effect : ,

'R.3. Who may be joined as defendants : All persons may be joned in, one suit as defendants where (a) any right to relief in respect of, or arising out of, the same act or transaction or series of acts or transactions is alleged to exist against such persons, whether jointly, severally or in the alternative and

(B)if separate suits were brought against such persons, any common question of law or fact would arise.' Order 2 Rule 3 is in the following terms : 'R. 3. joinder of causes of action.

(1)Save as otherwise provided, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendants, jointly; and any plaintiffs having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite such causes of action in the same suit..

(2)Where causes of action arc united, the jurisdiction of the Court as regards the suit shall depend on the amount or value of the aggregate subject-matters at the date of instituting the suit.'

(11) These two Orders and Rules really deal with the same problem from two different standpoints. The former makes provision in what circumstances different persons can be imupleaded as defendants in the same suit. Under this, the requirements of both the provisions contained in clauses (a) and (b) must co-exist. Firstly, it should be shown that the right to relief in respect of the same act or transaction or series of act; or transactions exists against the persons imp leaded as defendants jointly, severally or alternatively. There must be some common link or nexus. Secondly, it must also be shown that the case is one where if separate suits were .instituted against the dsfendants, any common question of law or fact would arise. It is enough if there is one question common to all defendants which is of sufficient importance in proportion to the rest of the action. In case, thereforee, one of the defendants is not, in any manner, involved in certain matters about which relief is claimed against the other defendants, and there is no common question of fact and law in which he is jointly 'interested with' them, then his impleading cannot be sustailied A right to relief cannot be said to arise out of the same act or transaction if the case against each defendant is entirely distinct or separate in its subject-matter from that of the other defendants.

(12) The scope of Order 2 Rule 3, however, is confined to uniting' in the same suit of several causes of action against the Same defendant or same defendants jointly. The emphasis here is (MI the causes of action. It is a condition precedent to the applicability of the Rule that the defendants must be jointly liable in respect of each and every one of the causes of action sought to be joined.

(13) A suit against several defendants on causes of action accrude against each of them separately and in respect of which they are not jointly liable, is had for misjoinder. However, even in cases not strictly falling under these provisions, recourse to order I Rule 3 is still permissible if the several causes of action are so connected with the same act or transaction or series of acts or transaction, as to give rise to a common question of law or fact at the trial.

(14) These two Orders and Rules thus strike a balance between the fundamental concepts that multiplicity of suits should be avoided and that the trial of suits should not be embarrassed by simultaneous investigation of totally unconnected controversies.

(15) As regards Order I Rule 5 which envisages that every defendant need not be interested in all the relief claimed, the same comes into operation only if the requirements of Order 2 Rule 3 and Order I Rule 3, arc otherwise satisfied.

(16) With this.background of the state of law, it Is apparent from the narration of facts above that so far as the current account' and the loan account were concerned, the plaintiff could have joined together the two causes of action defendants No. 1 to 4 were jointly concerned with both of than. ' They involved common questions, and the single suit has avoided multiplicity of proceedings. However, defendant No. 5 is not, in any manner, concerned with these two accounts and, thereforee, has no common interest with the other defendants about .them. His liability, if any, is confined to the cash-credit account and this was a distinct transaction or series of transactions from the other two accounts, and there was no nexus between them. There is no question of fact and law involved in this account which can be treated as common with the other two accounts. It must, thereforee, be held that the joining of the cause of action with respect to the cash-credit account and the resultant impleading of defendant No. 5 in this suit is bad and cannot be sustained. The plaintiff must, thereforee, separate that subject-matter from the rest of the suit. Normally the choice should be left over to the plaintiff to decide which particular action he is inclined to pursue in the suit. However, the relief claimed under the cash-credit account is plainly triable by the District Court, and, thereforee, cannot be brought in the High Court. It is this part of the action, thereforee, which has to be separated from the present suit and pursued in the Court concerned in accordance with law. The rest of the suit on the basis of the current and loan accounts against defendants No. I to 4 shall proceed. In case of limitation difficulty, the plaintiff E can drop defendant No. 5. This suit on' the basis of all the three accounts can then proceed.

(17) Defendant No. 5 will be entitled to costs which are. assessed at Rs. 200.00

(18) As regards issue No. 2. since the present suit embraces two distinct subjects, the plaint is chargeable with the aggregate amount of fees to which the plaints in suits embracing separately each of such subjects would be liable under the Court Fees' Act'. This is made clear in Section 17 of that Act. The plaintiff in this connection conceded that separate court-fee should be computed on each of the subject-matters' Thus the relief claimed under the current account should be separately valued and so also the relief under the loan account. However, now when the subject-matter relating to the cash-credit account may have to be separated, the court-fee already paid may more than suffice the requirements if the other two reliefs are separately valued. No further court-fee may,, thereforee, be filed. However, it may have to be filed if defendant No. 5 is decided to to be dropped.

(19) The suit being ex-parte against defendants No. 1 to 4, the plaintiff is directed to produce ex-parte evidence against them in terms of the above order on March 31, 1980. Before that, the plaintiff may bring on record which of the two aforesaid courses, it decides- to adopt.


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