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Mathuralal and ors. Vs. Chiranji Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberCivil Revn. No. 261 of 1956
Judge
Reported inAIR1962Raj109
ActsCode of Civil Procedure (CPC) , 1908 - Sections 2(2) and 115 - Order 23, Rule 1
AppellantMathuralal and ors.
RespondentChiranji Lal and ors.
Appellant Advocate Nauratan Mal, Adv.
Respondent Advocate Chand Mal, Adv. for Respondent No. 2
DispositionRevision allowed
Cases ReferredPooran Chand v. Babu Ram
Excerpt:
- - it is now well established that he cannot be allowed to withdraw his suit so as to deprive the defendant of any right that may have accrued to him......of three years. the respondents' right is therefore barred by limitation.8. it was held by the learned judges of the madras high court that the observations in air 1914 pc 66 should be strictly confined to cases where the appeals are dismissed for want of prosecution and should not be applied to a case where the appeal is formally brought before the court for disposal and is. finally disposed of by an order dismissing it with costs. it was observed that in such a case the order of the appellate court supersedes the order of the court appealed against and time begins to run under article 181 from the date of the order passed in the appeal. jackson j. in his judgment observed:--'no doubt if the court had been so disposed it might simply have recorded: 'leave granted to withdraw,' and.....
Judgment:
ORDER

Jagat Narayan, J.

1. This is a revision application against an order of the Civil Judge Banswara dated 21-11-55 dismissing a suit for dissolution of partnership and rendition of accounts in which a preliminary decree had been passed on the application of the plaintiff under Order 23 Rule 1 (i) C.P.C. and against his subsequent order dated 18-6-56 refusing to review his earlier order.

2. The facts which have given rise to this application are these. Chiranji Lal respondent No. 1 instituted a suit tor dissolution of partnership and rendition of accounts against the four applicants Mathuralal, Nanalal, Manaklal and Babulal and the remaining three respondents Maganlal, Karulal and Sujanmal on 28-1-53 in the court of the Civil Judge Banswara. A preliminary decree was passed in the suit on 16-8-54. Only Maganlal defendant appealed against this decree. The appeal was dismissed by the District Judge on 18-4-55. Maganial filed a second appeal in the High Court which was withdrawn by him on 26-4-56 and was dismissed as having been withdrawn.

3. Under the preliminary decree a lawyer was appointed as commissioner to go into the accounts and submit a report in order to enable the court to pass a final decree. On 22-2-55 this commissioner submitted a report expressing his inability to arrive at a definite finding with regard to the matters referred to him on account of his lack of experience of accounting. On 20-4-55 the plaintiff and the defendants filed an application praying that four persons named therein be appointed as arbitrators to decide the remaining disputes. On this application the learned Civil Judge referred the case to these four arbitrators. One of these arbitrators Shri Heera Lal had to go away in connection with the treatment of his wife. The remaining arbitrators were unable to act in his absence.

On 1-10-55 the learned Civil Judge accordingly passed an order that the parties should either nominate another arbitrator in place of Shri Heera Lal or show cause why the reference should not be superseded and the case disposed of by the court. 21st October 1955 was fixed as the next date of hearing. On 21-10-55 the learned counsel for the parties stated that they had not been able to take instructions from their clients and prayed for an adjournment. The court thereupon fixed 28-11-55 as the next date in the case.

4. On 21-11-55 Chiranji Lal plaintiff appeared before the learned Civil Judge and presented an application the material portion of which is to the following effect:--

'(1) The case was referred to the arbitrators 6 months ago, but they have not given any decision. The time for submission of the award has passed. I do not want that this time should be extended. I pray, that the reference be superseded.

(2) From the report of the commissioner who was appointed to go into the accounts in this case it is clear that he has expressed his inability to report the extent to which each of the partners was liable. In the suit which I filed I alleged that Maganial and Mathuralal were liable for the whole amount, but keeping in view the report of the commissioner I do not wish to proceed further in the matter. I accordingly present this application under Order 23 Rule 1 for withdrawing the suit. I do not wish to pay costs to any defendant.'

On this application the lawyers representing six of the defendants noted that they did not wish to claim any costs. The application for withdrawal was signed by Chiranji Lal plaintiff personally and purported to be on his behalf.

It was however signed by Maganial also. The court made a note on this application that it was presented by Chiranjilal, and Maganial and by Sarva Shri Surya Karan, Sukh Lal and Durga Shankar Vakils. On the same day the court passed an order to the following effect:--

'The plaintiff has presented an application that he wishes to withdraw this suit and that he does not wish to ask for permission to bring a fresh suit. The suit is accordingly dismissed under Order 23, Rule 1. Parties shall bear their own costs...The appointment of arbitrators is superseded.'

This order was signed by the plaintiff and Maganial personally and by the lawyers representing 6 of the defendants. It may be mentioned here that Mathuralal applicant No. 1 was the defendant who was neither present personally nor represented on 21-11-55 when these proceedings of withdrawal took place. Nor did he have any notice that any application for withdrawal will be made on 21-11-55. His lawyer Shri Chhaganlal however appeared before the learned Civil Judge on 28-11-55 which was the date fixed for hearing in this case on 21-10-55 and he was shown the order of the learned Civil Judge dismissing the suit on 28-11-55.

5. On 17-2-56 Mathuralal, Nanalal, Manaklal and Babulal defendants who are the applicants in the present revision application filed a petition for the review of the order dated 21-11-55 under Order 47 Rule 1 and Section 151 Civil Procedure Code. In this application it was alleged that none of these applicants consented to the withdrawal of the suit and that as a preliminary decree had been passed in this suit for rendition of accounts and dissolution of partnership and rights had accrued in favour of the defendants the suit could not be withdrawn by the plaintiff. The ground taken in the application was that as the case had been referred to arbitrators it could not be withdrawn by one of the parties alone.

The learned Civil Judge however refused to review his order and rejected the application on 18-6-56. He held that the bar to the withdrawal of a suit under Order 23 Rule 1 after the passing of the preliminary decree was only applicable in a case in which permission to file a fresh suit was sought. He found that Mathuralal had no knowledge of the application for withdrawal of the suit and did not consent to the withdrawal. He was however under the impression that Mathuralal could not be said to be prejudiced by the dismissal of the suit as he had not made any counter claim in the suit. So far as the question of the suit being under arbitration was concerned he held that he had sufficient power to supersede the reference. The application has been contested on behalf of Maganial respondent only. A preliminary objection is taken that the order of the learned Civil Judge dated 21-11-55 was a decree within the meaning of Section 2(2) C.P.C. and an appeal lay against it and consequently a revision application is not competent.

6. The argument of the learned counsel for the respondent is that as the court considered the question of the award of costs there was an adjudication within the meaning of Section 2(2) C.P.C. and the order of the court amounts to a decree. Reliance is placed on the observations made in Jujisti Mahapatro v. Magata Patro, AIR 1933 Mad 442. 'Decree' is defined as the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit. Under the order of the court dated 21-11-55 there was no judicial determination with regard to any of the matters in controversy in the suit. Right of costs is not a vested right and an order in respect thereof is not a decree.

7. The case relied upon by the respondent is distinguishable. A preliminary decree for sale was passed on 12th December 1921 fixing 6 months for payment of decretal amount. An appeal was filed by the judgment-debtor. After some of the respondents were served the appeal itself was withdrawn and the court passed the order

'Appeal is withdrawn. It is dismissed with costs. The costs will be proportionate.'

The above order was passed On 21-1-24. On 21-1-27 the decree-holder applied for the passing of the final decree. Relying on the decision of the Privy Council in Chandri Abdul Majid v. Jawahir Lal, AIR 1914 PC 68 the District Judge held that as there was no judicial determination by the appellate court the right to apply for final decree accrued on 12-6-22 and the time for filing the application for final decree expired on 12-6-25. The High Court held that Article 181 of the Limitation Act was applicable to the case before them under which time begins to run when the right to apply accrues. The Privy Council case also arose out of an application for a final decree for sale of the mortgaged property. It was held to be governed by Clause (2) of Article 179 of the Limitation Act of 1877 under which where there has been an appeal time ran from the date of the final decree or order of the appellate court.

The preliminary decree for sale was passed on 12th May 1890 by the Subordinate Judge. It was confirmed by the High Court on 8th April 1893. Against the decree of the High Court appeal to the Privy Council was admitted but was dismissed for want of prosecution on 13th May 1901. On 11-6-1909 an application for final decree for sale was made. It was argued before the Privy Council that the decree which was sought to be enforced had been constructively turned into a decree of the Privy Council by virtue of the dismissal of the appeal on 13th May 1901 and that therefore the period of limitation was 12 years from 13th May 1901 under Article 180 of the Limitation Act of 1877 which corresponds to Article 183 of the present Limitation Act. This contention was rejected by theis Lordships of the Privy Council with the following observation:--

'The order dismissing the appeal for want of prosecution did not deal judicially with the matter of the suit and could in no sense be regarded as an order adopting or confirming the decision appealed from. It merely recognised authoritatively that the appellant had not complied with the conditions under which the appeal was open to him. and that therefore he was in the same position as if he had not appealed at all. To put it shortly, the only decree for sale that exists is the decree, dated the 8th April, 1893, and that is a decree of the High Court of Allahabad. The operation of this decree has never been stayed, and there is no decree of His Majesty in Council in which it has become merged. The period of limitation applying to the enforcement of it at all material times was therefore a period of three years. The respondents' right is therefore barred by limitation.

8. It was held by the learned Judges of the Madras High Court that the observations in AIR 1914 PC 66 should be strictly confined to cases where the appeals are dismissed for want of prosecution and should not be applied to a case where the appeal is formally brought before the court for disposal and is. finally disposed of by an order dismissing it with costs. It was observed that in such a case the order of the appellate court supersedes the order of the court appealed against and time begins to run under Article 181 from the date of the order passed in the appeal. Jackson J. in his judgment observed:--

'No doubt if the Court had been so disposed it might simply have recorded: 'Leave granted to withdraw,' and then the appellant would be in the same position as if he had not appealed at all; but when the Court went further and considered the award and distribution of costs it, is difficult to see how it has not expressed an adjudication and therefore passed a decree.'

9. With the highest respect I am unable to agree that an order with regard to costs can be regarded as an adjudication with regard to a matter in controversy in the suit. At any rate the above Madras decision can only be regarded as an authority for the proposition that if an appeal is preferred against a preliminary decree and it is withdrawn and thereafter the court passes an order that the appeal was dismissed as withdrawn time under Article 181 would run from the date of such an order of the appellate court.

10. It may be mentioned here that such cases were generally held to be governed by Article 179 of the Limitation Act of 1877 Clause (2) of which ran as follows:

'Time from which period begins to run:

(Where there has been an appeal) the date of the final decree or order of the appellate court.' The view generally taken by the High Courts was that although an order which did not amount to a judicial determination of any of the matters in controversy in the suit cannot be regarded as a decree of the appellate court it can be regarded as a final order of the appellate court within the meaning of Clause (2) of the above article inasmuch as it has the effect of finally disposing of the appeal. This clause was amended in the present Limitation Act, the corresponding clause of which, now contained in Article 182 runs as follows : '(Where there has been an appeal) the date of the final decree or order of the Appellate Court, or the withdrawal of the appeal.'

11. I accordingly find that there is no force in the preliminary objection raised on behalf of the respondent.

12. So far as the order passed by the learned Civil Judge is concerned it is undoubtedly erroneous. Order 23 Rule 1(1) no doubt provides that at any time after the institution of the suit a plaintiff can withdraw it. It is now well established that he cannot be allowed to withdraw his suit so as to deprive the defendant of any right that may have accrued to him. In the present case a preliminary decree for dissolution of partnership and rendition of accounts has been passed. The applicants expect that when accounts are taken they will be entitled to receive money from other parties to the suit. The Court cannot allow a plaintiff to withdraw such a suit without the consent of all the defendants. In the present case Mathuralal applicant did not consent to the withdrawal of the suit. The court could not have therefore permitted its withdrawal. The following decisions may be referred to in this connection:

Debi Chand v. Parbhu Lal, AIR 1926 All 582; Seethai Achi v. Meyappa Chettiar, AIR 1934 Mad 337; Annamalai Chettiar v. Koothappudayar, AIR 1934 Mad 485; Devsey Khetsey v. Hirji Khairaj, AIR 1942 Bom 35. In Seethai Achi's case, AIR 1934 Mad 337 the following observations were made : 'Ordinarily, when the Court finds no impediment to the dismissal of a suit after the announcement of the withdrawal of the claim by the plaintiff, it will simply say that the suit is dismissed as the plaintiff has withdrawn from it. An order as to costs will also be passed. But several exceptions have been recognised to this general rule. In suits for partition, if a preliminary decree is passed declaring and defining the shares of the several parties, the suit will not be dismissed by reason of any subsequent withdrawal by the plaintiff, for the obvious reason that the rights declared in favour of the defendants under the preliminary decree would be rendered nugatory if the suit should simply be dismissed. So also in partnership suits and suits for accounts, where the defendants too may be entitled to some reliefs in their favour as a result of the settlement of accounts, the withdrawal of the suit by the plaintiff cannot end in the mere dismissal of the suit. Similarly in suits for specific performance and administration suits, the withdrawal by the plaintiff should not necessarily lead to the dismissal of the suit, because some appropriate reliefs have to be given even in favour of the defendants. In a representative suit the Court need not dismiss the suit in spite of the withdrawal by the plaintiff, but it may add another person as a party in substitution of the plaintiff or transpose a defendant as plaintiff and direct the continuance of the suit'.

The above principles are applicable irrespective of whether or not the plaintiff seeks permission to institute a fresh suit at the time of withdrawal under Order 23 Rule 1 (2).

13. In a suit for accounts it is not necessary for a defendant to make a counter claim. The learned Civil Judge erred in thinking that because Mathuralal had not made a counter claim in the suit he could not be prejudiced by the dismissal of it.

14. Another principle which the learned Civil Judge violated by granting permission to the plaintiff to withdraw the present suit is that the court cannot permit the withdrawal of a suit which has been referred to arbitration. The reason is this. The parties had contracted to refer their dispute to the arbitrators. The reference to arbitration no doubt can be recalled by the court in certain circumstances, for example where the arbitrator misconducts himself or where the time lor making the award has expired and the court does not think it fit to grant further time. But so long as the reference stands the court has no power to pass an order which in any way affects the subject matter of the suit. If a plaintiff is permitted to withdraw his suit the effect of the order is to supersede the reference entirely and free the plaintiff from his contract to submit the dispute to arbitration. In this connection the following cases may be referred to:

Sheoambar v. Deodat, ILR 9 All 168; Pooran Chand v. Babu Ram, AIR 1938 All 56. The learned Civil Judge did not supersede the reference either on account of the misconduct of any arbitrator or on the ground that the award had not been submitted within the time granted by him. The order of supersession of the reference was a consequential order passed on the dismissal of the suit upon its being withdrawn by the plaintiff.

15. I accordingly allow the revision application and set aside the orders of the learned Civil Judge dated 21-11-55 and 18-6-56. I direct that Mathuralal, Nanalal, Manaklal and Babulal shall be transposed as plaintiffs in the suit and Chiranji Lal plaintiff shall be transposed as a defendant. Maganlal, Karulal and Sujanmal shall continue as defendants. It will however be open to the learned Civil Judge to supersede the reference in accordance with law and proceed with the preparation of the final decree himself if he thinks fit to do so. The arbitrators shall be called by the learned Civil Judge and shall be asked to proceed with the arbitration.

16. In the circumstances of the case, I direct that parties shall bear their own costs of this revision application.


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