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Lalbhai Popatlal Shah Vs. the Central Bank of India Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtGujarat High Court
Decided On
Judge
Reported in(1962)3GLR52
AppellantLalbhai Popatlal Shah
RespondentThe Central Bank of India Ltd. and ors.
Cases ReferredTribhovandas Narotamdas v. Abdulally Hakimji Paghdivala and Ors.
Excerpt:
- .....the opponent no. 1. this was the only ground which was urged in the application. the order of the learned judge shows that he held that this was a misconception because the petitioner was being examined in his capacity as a party-defendant and not as a witness of the opponent no. 1. though the learned judge held this to be so it appears that the arguments before him proceeded on a different footing also. the arguments were that after the adjudication order the petitioner had lost the right of the conduct of the suit and the only person who could represent the petitioner was the receiver and if the latter did not choose to examine the petitioner as a witness the petitioner had independently no right of his own to examine himself as a witness. it is on this basis that the application was.....
Judgment:

N.M. Miabhoy, J.

1. This revision application is directed against the order dated 10-2-1960 passed by the learned 5th Joint Civil Judge (Senior Division) Ahmedabad on an application Ex. 246 in Jurisdiction Civil Suit No. 229 of 1951. The petitioner Lalbhai is one of the defendants in this and two other suits. All these three suits are filed by three banking companies and with the consent of the parties all the three suits are consolidated and evidence is being recorded in the Jurisdiction Suit No. 229 of 1951. According to the learned Civil Judge the suits were filed to recover the amounts advanced by the Banks on the hypothecation of goods by the insolvent (petitioner-defendant No. 4). The suits were instituted in 1951. Besides the petitioner there were certain other defendants in all the three suits but it is not necessary for the purposes of the present application to mention those defendants or the interests which they have in the suits. One of the defendants was Rasiklal Popatlal Shah a brother of the petitioner and he appears as opponent No 3 in this petition. During the pendency of those three suits these two brothers Lalbhai and Rasiklal were adjudicated insolvents. Thereupon plaintiffs made applications in their respective suits for bringing the receiver on the record It is said that the applications were made under Order 22 rule 10 Civil Procedure Code. By these applications the receiver was added as 3 partydefendant. However the two insolvents Lalbhai and Rasiklal continued to be on the record as party-defendants too. The hearing of the suit began on 18th January I960. The opponent No. 1 examined two witnesses. It closed its evidence on 8th February 1960. some other defendants did not choose to lead any evidence and then came the turn of the present petitioner to state whether he intended to lead any evidence or not. The petitioner entered into the witness-box for being examined as a party-defendant. After he had been examined-in-chief for some time the receiver presented the application Ex. 246 from the order below which the present revision application arises. That was a short application and was made on the footing that the petitioner was being examined as a witness by the opponent No. 1. This was the only ground which was urged in the application. The order of the learned Judge shows that he held that this was a misconception because the petitioner was being examined in his capacity as a party-defendant and not as a witness of the opponent No. 1. Though the learned Judge held this to be so it appears that the arguments before him proceeded on a different footing also. The arguments were that after the adjudication order the petitioner had lost the right of the conduct of the suit and the only person who could represent the petitioner was the receiver and if the latter did not choose to examine the petitioner as a witness the petitioner had independently no right of his own to examine himself as a witness. It is on this basis that the application was decided by the learned Judge. He agreed with the contention of the receiver and held that the petitioner was not entitled to give evidence as a party-defendant independent of the receiver. It is against this order that the present revision application is directed and the question for consideration is whether the order passed by the learned Judge is sustainable. Prima-facie the order appears to be unsustainable.

2. Having regard to the facts of the case the petitioner still continues to be a party-defendant and though he continues to be so it appears to be almost shocking that he should be denied the privileges of a party-defendant. But the argument which is urged in support of this order is that this order flows as a natural consequence from the order of adjudication and it is contended that the moment such an order is made the petitioner loses all his rights in respect of the aforesaid suits and he cannot enforce any rights as a party-defendant. In support of this contention reliance is placed upon the case Tribhovandas Narotamdas v. Abdulally Hakimji Paghdivala and Ors. reported in 39 Bombay 568. In this case a suit was filed by a landlord against his tenant. The tenant during the pendency of the suit was adjudged to be an insolvent. On this happening the official assignee was brought on the record as a party-defendant. The suit was for a declaration that a certain lease had been forfeitled by the tenant by reason of certain breaches of various convenants committed by the opponent. The official assignee was not inclined to contest this suit. On this the insolvent contended before the Court that he was entitled to contest the suit. The plaintiff objected to this course. The ultimate order which was passed by the Court was dismissal of the suit against the insolvent. This order was passed on the ground that no cause-of-action at present survives against the first defendant and that the suit against him ought to be dismissed at once. Later on the learned Judge observes: The only person at present who possesses any interest whatever in this property from the point of view of the plaintiff in the present suit is not the first defendant but the official assignee. It is therefore a case in which the first defendant is being wrongly sued in the events that have happened and not a case in which it is necessary that the official assignee should be made a party-defendant. In my judgment this case is not of any assistance in deciding whether the impugned order is a proper order or not. In the present proceedings no motion has been made either by any of the plaintiffs or the receiver to delete the name of the petitioner from the record as a party-defendant. In fact in this Court when I asked a question whether the plaintiffs or the receiver wanted the name of the petitioner to be deleted I was not in a position to get a definite answer from the learned Advocates appearing in the case. In the aforesaid reported case the observations reproduced above were made in the context of a prayer for the dismissal of the case against the defendant No. 1. Such is not the case here. In the present case the petitioner continues to be on the record. But it is contended that though he may be on the record the effect of the adjudication order has been that he cannot defend the aforesaid suits.

3. I am unable to follow as to how the aforesaid conclusion should necessarily follow without examining the plaint itself and without having a full-dressed hearing on this subject and this task can be undertaken by the Court only after a prayer is made by the plaintiffs or by the receiver that having regard to the facts of the present case the suit does not survive against the petitioner and that it can survive against the receiver only. The broad proposition that in all cases where a defendant is adjudged to be an insolvent he ceases to have any further interest in the suit cannot be accepted as a true proposition. Whether such a result follows or not depends upon the nature of the suit. For example if the suit is based on an allegation of a breach of contract or the commission of a tort and if damages are being claimed against the insolvent then the suit would survive against the insolvent and in such a case it stands to reason that the insolvent would have all the rights and privileges which any defendant has. If any of the other parties contends that the effect of the adjudication order was that the cause-of-action against the petitioner did not survive then a proper prayer to that effect should have been made and the matter followed to its logical consequence viz. that the name of the petitioner should have been deleted from the record of the case. So long as such an order is not passed and so long as the petitioner remains a party on the record I tail to understand how he could be denied the privileges and rights of a party-defendant. It may be that to-day there may be an order against the petitioner adjudicating him an insolvent. But he might obtain a discharge or the order of adjudication may be annulled. If he is retained as a party-defendant and if a decree happens to be passed against him then I can envisage that in future any decree passed against the petitioner may be sought to be enforced by the parties concerned against the petitioner. So long as this risk remains and that risk is bound to remain so long as defendant No 4 continues to be on the record as a party 1 cannot subscribe to the view that the petitioner does not have the right of examining himself or of leading himself or of cross-examining the opposite party.

4. Under the circumstances the way in which the order has come to be passed and specially having regard to the fact that the order has come to be passed whilst the petitioner is still retained as a party-defendant on the record of the case 1 have no hesitation whatsoever in holding that the order of the learned Judge was unjustified. The result of the order will be that the petitioner will be denied the right of presenting his case to the learned Judge. In my opinion the learned Judge has committed a material irregularity and the consequence of that order has been that injustice has been done to the petitioner which requires the interference of this Court. It is quite clear that if the petitioner is denied the right of examining himself and leading such evidence as he is entitled to as a party-defendant then having regard to the fact that the suits are heavily contested and are pending hanging fire since last ten years it is probable that if the matter goes to the higher Court and the wrong is sought to be remedied there the necessary evidence which the petitioner intends to lead may not then be available or by lapse of time the evidence may not be presented in that fresh form which: the petitioner will be in a position to do at the present stage. The matter was admitted by this Court and is hanging fire in this Court since some time and if I were not to interfere at this stage on the ground that the matter is at an interlocutory stage in my judgment a further wrong is likely to be done inasmuch as the petition was admitted and rule issued and the suits were delayed on that account. Under the circumstances in my judgment the rule should be made absolute. No order as to costs.


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