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Abdul Rehman Vs. Dhere Bai and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtRajasthan High Court
Decided On
Case NumberS.B. Civil Regular Ist Appeal No. 64 of 1978
Judge
Reported in1979WLN162
AppellantAbdul Rehman
RespondentDhere Bai and anr.
DispositionAppeal dismissed
Cases ReferredBombay Enamel Works v. Purshottam
Excerpt:
civil procedure code - section 105--district granting conditional leave to defend suit--order modified in revision in, high court and merged in order of high court--held, it cannot be attacked in appeal under section 105.;the order of the learned additional district judge, sirohi dated january 21, 1978, granting conditional have to defend the suit, merged in the order of this court passed in revision on february 3, 1978 when the revision was partly allowed and the order of the lower appellate court was modified, the necessary consequence is that the order granting conditional leave to defend the suit by the learned additional district judge vide his order dated january 21, 1978, because final, for, it merged in the order of this court dated february 3, 1978.;that order is not open to..........him. this application was opposed by the plaintiffs by filing a reply on september 14, 1977. the learned additional district judge vide his order dated january 21, 1978 reached the conclusion that the grounds on which the defendant wanted an unconditional leave to defend the suit did not disclose any substantial defence and that they were frivolous and vexations. he, however, granted leave to the defendant to defend the suit on the condition that he should furnish bank guarantee in respect of the amount in suit, interest and costs of a nationalised bank within a fortnight of his order dated january 21, 1978. in the order, it was also mentioned that in case the defendant failed to furnish the bank guarantee, as ordered, within the afore mentioned time, the plaintiffs shall be entitled.....
Judgment:

S.K. Mal Lodha, J.

1. This a defendant's first appeal against the judgment and decree of the Additional District fudge, Sirohi dated April 24, 1978 passed in Civil Original Suit No. 9 of 1977.

2. The plaintiff-respondent No. 1 is the wife of plaintiff respondent No. 2. The plaintiff-respondents instituted a suit for Rs. 21,488.50 paise against the defendant-appellant on May 20, 1977 in the court of the Additional District Judge, Sirohi. The suit was based on a promissory note dated September 1, 1972, which is alleged to have been executed by the defendant against the outstanding amount of Rs. 14,001/- stipulating to pay interest at the rate of Rs. 1/- per cent per mensem. It was averred that Rs. 13,501/- were due from the defendant to plaintiff No. 1 on account of principal after deducting Rs. 500/-, which was paid by the defendant on June 27, 1974. According to the plaintiff's a sum of Rs. 7980/- was outstanding on account of interest and Rs. 750 were claimed on account of notice expenses and telegram charges. It was mentioned in para 6 of the plaint that plaintiff No. 1 is the original creditor, but as plaintiff No. 2 is plaint ff No. 1's Mukhtiar, Khas and, therefore he was being impleaded as plaintiff No. 2. The plaintiffs obtained summons for the defendant under the provisions of Order XXXVIX, Rule 2, CPC and this summons was served on defendant's son on June 24, 1977. Thereafter, the plaintiffs obtained summons for judgment in a summary suit under Order XXXVII, Rule 3, CPC. This summons was issued on July 23, 1977 for the hearing of August 3, 1977. On August 3, 1977, the trial court ordered that the summons should be served personally on the defendant. The defendant submitted an application on August 18, 1977 supported by an affidavit for leave to defend. It was infer alia, stoned in that application that the defendant has not received any consideration mentioned in the pronote, that he did not have any dealing with plaintiff No. 1, that the transaction was 'Benami' and that the plaintiff No. 2 had remained he Advocate in various matters and as he was yielding great it flounce over him he got the pronote executed by him (defendant-appellant) in favour of his wife plaintiff No. 2. He prayed in the application which was supported by an affidavit that there were triable issues under Order XXXVII, Rule 3(5) CPC unconditional leave to defend the suit may be granted to him. This application was opposed by the plaintiffs by filing a reply on September 14, 1977. The learned Additional District Judge vide his order dated January 21, 1978 reached the conclusion that the grounds on which the defendant wanted an unconditional leave to defend the suit did not disclose any substantial defence and that they were frivolous and vexations. He, however, granted leave to the defendant to defend the suit on the condition that he should furnish bank guarantee in respect of the amount in suit, interest and costs of a nationalised bank within a fortnight of his order dated January 21, 1978. In the order, it was also mentioned that in case the defendant failed to furnish the bank guarantee, as ordered, within the afore mentioned time, the plaintiffs shall be entitled to a decree as per their suit.

3. Felling aggrieved by the older dated January 21, 1978, the defendant submitted a revision petition to this Court, which was registered as S.B. Civil Revision No. 41 of 1978, When the revision petition came up for admission before this Court, Mr. Kewal Chand, appeared on behalf of the plaintiffs This Court, after hearing learned Counsel for both the parties, passed the following order on February 3, 1978:

Heard learned Counsel for both the parties. Mr. Mehta appearing for the petitioner urges that the condition of Bank guarantee imposed upon the petitioner would work out harshly against the defendant petitioner. It is net possible to interfere with that order in the revisional jurisdiction. Although if such a request would have been made before the trial Court, it might have been reasonably considered. It vas then urged by the learned Counsel for the petitioner that the time allowed by the trial court for furnishing the Bank guarantee is too short and should be extended, as the amount involved is considerable.

The learned Counsel appearing on behalf of the non-petitioner has no objection in extending the time allowed to the petitioner for furnishing the Bank guarantee. The petitioner is allowed three months time to furnish the Bank guarantee in terms of the order passed by the learned Addition District Judge, Sirohi, which is modified only to this extent that insted of 15 days, the petitioner will have three months time from the date of that order to furnish the requisite bank guarantee. The revision application is partly allowed and the order passed by the learned trial court is modified as mentioned above. The parties are left to bear their own costs.

4. The defendant did not furnish any bank guarantee within the time allowed by this Court, while disposing of the aforesaid revision petition on February 3, 1978. Three months time; was allowed to the defendant for furnishing bank guarantee from January 21, 1978, As the defendant failed to furnish the bank, guarantee within the time allowed by this Court, the learned Additional District Judge under Order XXXVIX, Rule 3(6), CPC decreed the suit of the plaintiffs by his judgment dated April 24, 1978 for Rs. 21, 481/- with costs and further allowed interest on the principal amount of Rs 13,501/- from the date of the suit i.e. May 20, 1977 to the date of the decree i.e. April 24, 1978. He, however, did not award future interest.

5. Against the judgment and decree of the learned Additional District Judge dated April 24, 1978, the defendant has come up in appeal to this Court as aforesaid.

6. I have heard Mr. R.K. Shah for the appellant & Mr. P.R. Singhvi for the respondent and have also carefully gone through the record of the case.

7. Mr. Shah, learned Counsel for the appellant challenged the order of the learned Additional District Judge dated January 21, 1978 and submitted that d& the grounds taken by the defendant raised triable issue the defendant should have been granted an unconditional leave to defend the suit and as the condition of furnishing bank guarantee was onerous it because impossible for the defendant to comply with it and submit his writ ten-statement after the expiry of the period fixed for furnishing the bank guarantee. Learned Counsel elaborated his argument that such being the partition, the defendant was virtually denied the opportunity to contest the suit institute by the plaintiffs and as the order dated January 21, 1978 granting leave to defend the suit on furnishing bank guarantee has affected the decision of the suit on merit, the judgment and decree passed by the learned, Additional District Judge are not sustainable. In other words he submitted that the judgment and decree are bad in law because, in the facts and circumstances of the case, the condition for furnishing the bank guarantee could not be imposed. According to the learned Counsel, he is entitled to challange the order of the learned Additional District Judge dated January 21, 1978, though a revision against that order was preferred and it was partly allowed. Learned Counsel contended that the order of the learned Additional District Judge imposing condition of bank guarantee was not interfered with by this Court, as it was not possible to interfere with that order in the rivisional jurisdiction and therefore, the order of this Court dated February 1978, would not operate as a bar in challanging the order of the learned Additional District Judge dated January 21, 1978.

Order XXXVI, Rule 3(5) CPC reads as under:

(5) The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitled to him to defend, apply on such summons for leave to defend such suit and leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just:

Provided that leave to defend shall not be refused unless the Court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or, vexatious:

Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendants in Court.

8. The provisions of Order XXXVI, Rule 3(2) of the Civil Procedure Code, 1908 were examined by their Lordships of the Supreme Court in Santosh Kumar v. Moot Singh : [1958]1SCR1211 . It was observed in para 9 of the report as under:

All that we need say about them is that if the Court is of opinion that the defence is not bonafide then it can impose conditions and in not tied down to refusing leave to defend. We agree with Varadachar J, in the Madras case that the Court has this third course open to it in a suitable case But it cannot be reach the conclusion that the defence is not bonafide arbitrarily.

It will be useful here to extract a portion from para 10 of the report, which is as under:

In general, therefore, the test is to see whether the defence raises a real issue and not a sham one, in the sense one, in that, if the facts alleged by the defendant are established, there would be a good, or even a plausible, defence those facts.

9. What principles should be followed, while granting leave to defend were examined in Machalee Eng. & Manf. v. Basic Eq. Corporation 0043/1976 : [1977]1SCR1060 . Their Lordships of the Supreme Court approved the five propositions laid down by S.R. Das, J, as he then was, in Kyramoyer Dassi v. J. Chattarjee AIR 1949 Cal. 479. Is this case, learned Counsel has relied on proposition (b), which is as under:

(b) If the defendant raises a triable issue indicating that he has a fair or bonafide or reasonable defence although not a positively good defence the plaintiff is riot entitled to sign judgment and the defendant is entitled to unconditional leave to defend.

10. Learned Counsel submitted that the averments made in the plaint have been verified by plaintiff No. 1 and he Mukhtiar plaintiff No. 2. Plaintiff No. 2 in his capacity as Mukhtiar Khas submitted his affidavit dated July 9, 1977, which was submitted on July 11, 1977. The defendant submitted an application supported by an affidavit dated July 17, 1977 and in which he disclosed his defences which have already been stated in the foregoing part of this judgment. Plaintiff No. 1 did not file any affidavit in support of the reply to the application for grant of leave to defend which was submitted on September 12, 1977, signed plaintiff No alone and he only by filed the affidavit in support of it Plaintiff No. 1 did not controvert the grounds of defend raised by the defendant in his application. In these circumstances, learned Counsel urged that the grounds of defence taken by the defendant raised triable issue and, therefore, in view of the proposition (b) laid down in Kyrammoyee's case AIR 1949 Cal. 479, which was approved by their Lordships of the Supreme Court in Machalec Eng.'s case 0043/1976 : [1977]1SCR1060 , the defendant was entitled to unconditional leave to defend.

11. Mr. Shah on the basis of Sarswatiben Lallubhai Parikh and Anr. v. Kantilal Purshottamdas AIR 1964 Guj. 85, argued that a bare perusal of the affidavit of the defendant shows that triable issues did arise on the averments set out in it particularly affidavit of the defendant when plaintiff No. 1 did not file any affidavit-in-rejoinder controverting the ground contained in the application for grant of leave which was supported by the affidavit of the defendant. In Saraswatiben's case AIR 1964 Guj. 85 it was held that it was the duty of the Court to give unconditional leave to defend to the defendants, the reason being that triable issues clearly emerged on a perusal of the affidavit-in-reply filed by defendants on the summons for judgment. A summons revision was filed by the original defendant in that case against the conditional order of the trial Judge. The learned Judge allowed the revision & granted unconditional leave to defendants.

12. Mr. P.R. Singhvi, learned Counsel for the plaintiff-respondents has contended that the order dated January 21, 1978, granting conditional leave has merged in the order of the Court dated February 3, 1978 passed in revision and it operates as a bar on the general principles of res judicate and further that order cannot now, be at tacked in this appeal under Section 105 CPC.

13. The first question that, therefore, arises for my consideration in this appeal is about the effect of the order passed by this Court on February 3, 1978 in S.B. Civil Revision Petition No. 41 of 1978, which was filed by the defendant against the older of the learned Additional District Judge, dated January 21, 1978 by which he granted conditional leave to the defendant to defend the suit. It is clear from the order of this Court dated February 3, 1978 that learned Counsel appearing for the defendant (petitioner in the revision.) urged that the condition of bank guarantee imposed upon the petitioner would work out harshy against the defendant-petitioner' At that time, learned Counsel for the defendant did not raise the point that the defendant should be granted unconditional leave to defend, as from the application submitted by the defendant, which was supported by the affidavit, triable issues emerged. The learned Judge declined to interfere with that order in the revisional jurisdiction. With regard to the argument that the conditional was harsh, learned Judge observed that if such a request had been made before the trial court, it might have been reasonably considered. It was next urged by the learned Counsel for the defendant in the revision that the time allowed by the trial court for furnishing the bank guarantee was too short and should be extended, as the amount in suit was considerable To this, learned Counsel appearing for the plaintiff had no objection and therefore, the learned Judge ground three months time to the defendant to furnish bank guarantee in terms of the order passed by the learned Additional District Judge on January 21, 1978. Thus, the revision application filed by the defendant was partly allowed and the order of the learned Additional District Judge was modified. In other words, an interesting question of law crops up for consideration, namely, whether it is open to the defendant under Section 105 CPC to challenge the order of the Additional District Judge dated January 21, 1978 granting conditional leave to him to defend the suit, which was modified in revision under Section 115 by this Court vide its order dated February 3, 1978.

14. In the Board of Muslim Wakfs v. Mohammed Ayub ILR 1967 XXII 717 after noticing Nagerndra Nuth v. Sutesh AIR 1932 PC 165, Jagat Narayan, J, as he then was, observed as under:

Despite this all the High Courts are of the opinion that when a second appeal is dismissed summarily under Order XLI, Rule 11, CPC there is a manger of the decree of the lower court which, ceases to exist and that court is no longer competent to review it. The same principle should apply where a revision application against a decree is dismissed summarily.... Merely on the ground that the scope of a revision application is even narrower than the scope of a second appeal it cannot be held that there is no margen of the decree of order of the lower a court in the order of the High Court dismissing a revision application summarily.

The learned judge vas of the opinion that the appellate order of the District Judge had merged in the order of the High Court dismissing the revision application and ceased to exist, and, therefore, if could not be reviewed by then learned District Judge In Shankei v. Krisham : [1970]1SCR322 , their Lordships of the Supreme Court, in connection with the revisional power of the High Court, were pleased to make the following observations:

Now when the aid of the High Court is invoked on the revisional side it is done because it is a superior Court and it can interfere for the purpose of rectifying the error of the Court below Section 115 of the Code of Civil Procedure circumscribes the limits of that: jurisdiction but the jurisdiction which is being exercised is a part of the general appellate jurisdiction of the High Court as a superior Court. It is only of the modes of exercising power conferred by the Statute, basically and fundamentally it is the appellate jurisdiction of the High Court which is being invoked and exercised in a wider and larger sense. We do not therefore, consider that the principle of merger of orders of inferior courts in those of superior Courts would be affected or would become inapplicable by making a distinction between a petition for revision and an appeal.

After considering the order of this Court passed on February 3, 1978 in revision and the decisions reported in Board of Muslim Wakfs's ILR 1967 XXII 1717 and Shankar's case : [1970]1SCR322 , I have no doubt in my mind that the order of the learned Additionl District Judge, Sirohi dated January 21, 1978, granting conditional leave to defend the suit, merged in the order of this Court passed in revision on Feb. 3, 1978 When the revision was partly allowed and the order of the lower appellate Court was modified, the necessary consequence it that the order granting conditional leave to defend the suit by the learned Additional District Judge vide his order dated January 21, 1978, became final, for, it merged in the order of this Court dated February 3, 1978.

15. The effected of an interlocutory order passed in a suit in subsequent stages of the sane suit vas examined in Arjun Singh v. Mohindra Kumar AIR 1964 SC 991. It was held in that case that where the principle of res judicata is invoked in the some suit, the nature of the proceedings, the scope of the enquiry which the adjectival law provides for the decision being reached as well as the specific provisions made on matter touching such decision are some of the material and relevant factors to be considered before the principle is held applicable, and that one aspect of this question is that which is dealt with in a provisions like Section 105 of the Civil Procedure Code. The order granting conditional leave will be considered to have been confirmed by this Court in the revision inasmuch as this Court in the revision modified the order of the trial court only to this extent that instead of 15 days time allowed by the learned Additional District Judge, the defendant was allowed three months time from the date of that order to furnish bank guarantee. When the order granting leave to defend the suit en certain renditions was confirmed by this Court as the only point raised in regard to the merit of the order granting conditional leave was that 'it would work out harshly against the defendant,' the order of this Court would operate as res judicata in this appeal against the decree. This view of mire is supported by the decision reported in Ramsarup v. Pyare Das 0043/1974 : AIR1974Pat153 . In Ram Sarup's case 0043/1974 : AIR1974Pat153 the learned Judge distinguished Satyadhyant v. Smt. Deorajin Debi : [1960]3SCR590 & relied on Shankar's case : [1970]1SCR322 . It will be useful here to quote from para 6 of the aforesaid Ratna case AIR 1974 Pat. 153:

Learned Counsel relied upon the provisions elf Section 105 of the Code of Civil Procedure where it has been provided that where a decree is appealed from, any error, defect or irregularity in any order affecting the decision of the case, nay be set forth as a group, d of objection in the memorandum of appeal. This proposition of Saw cannot be disputed. In my opinion, if the appellants would not have come to this Court against the order the lower appellate Court dated 19-8-1968, allowing additional evidence to be taken it was open to them to challenge the correctness of the said order in this second appeal. The principles of Section 105 of the Code of Civil Procedure are as such will be of no advantage to the appellants in the present cafe in view of their having availed a remedy in this Court curler in Civil Revision No. 1025 of 1968.

In Balkishan Das v. Parmeshri Dass AIR 1963 Pun. 187, it was held that where an interlocutory order is heard on merits either is appeal or in revision the matter becomes res judicate. In Shyancharvn v. Shevajee Bhat AIR 1964 MP 235, P.V. Dixit, C.P., and K.L. Pandey, J., held that the order passed by the High Court in revision was final as regards that Court, and its correctness could not be challenged in appeal before the High, Court. In these circumstances, it is not open to the learned Counsel for the appellant to contend in this appeal that the order of the learned Additional District Judge granting conditional leave to defend the suit, is bad as the averments made in the application of the defendant raised triable issues and, therefore, he should have been permitted to defend the suit unconditionally. It follows, therefore, that that order it not open to attack in the appeal under the provisions of Section 105 ex CPC.

16. Mr. Shah placed strong reliance on the authority of the Division Bench of Bombay High Court reported in Bombay Enamel Works v. Purshottam : AIR1975Bom128 I have carefully gone through the report of that case. This decision is not of any assistance to the learned Counsel for the appellant. In that case, conditional leave to defend was granted. Against that order no revision was filed and the order granting that order leave conditionally was challenged in the first appeal. In those circumstances, it was observed as under:

Broadly speaking it would appear to us to be a correct proposition of law that in a first appeal the propriety of any interlocutory or interim order made during the proceedings in the trial court could be challenged.

In the case before me, revision was filed, it was partly allowed and the order of the learned Additional District Judge granting conditional leave was modified. Thus, the argument of the learned Counsel for the defendant that since the defendant was not granted unconditional leave to defend which he was entitled to, and, therefore, the decree passed by the learned Additional District judge on the summons for judgment for failure to comply with the conditions imposed by him in time is not sustainable in law is devoid of force, and is, consequently, rejected.

17. Learned Counsel next argued that the learned Additional District Judge committed an error when he allowed Rs. 7980/- on account of interest upto date of the suit and pondente lite interest @ 12% per annum on the principal amount. The argument of the learned Counsel in this connection was that according to the rule of Damdunat, interest recoverable at any time cannot exceed the principal. I must confess that I have not been able to appreciate this argument. However, according to Section 27 of the Rajasthan Money Lenders Act, 1963, no court can in respect of any loan, whether advanced before or after the date on which this Act comes into force, decree, on account of interest, a sum greater than the principal of the loan due on the date of decree. The Promissory Note was for Rs. 14,001/- and stipullated rate of interest mentioned in it is (sic)% per meneem. The amount of interest claimed upto the date of the suit is Rs. 7980/-. The suit was instituted on May 29, 1977. It was decreed on April 24, 1978. Section 34 CPC provides that where and in so for as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, for the date of the suit to the date of decree. Since the stimulated rate was 12% per annum, the learned Additional District Judge was therefore, right in awarding interest from the date of the institution of the suit to the date of the passing of the decree on the balance of the principal amount of Rs. 1350/-. Learned Counsel could not show how of the amount of interest awarded to the plaintiff exceeds the principal amount of Rs. 14.001/-. In my opinion this contention has also no force.

18. No other point survives for my consideration is this appeal.

19. In these circumstances, the learned Additional District Judge was right in decreeing the suit of the plaintiff under Order XXXVII, Rule 3(5) CPC.

20. The result is that this appeal has no force and it is, accordingly, dismissed with costs.


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