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S.R.M.A.R. Ramanathan Chettiar Vs. Annamalai Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1934Mad367
AppellantS.R.M.A.R. Ramanathan Chettiar
RespondentAnnamalai Chettiar and ors.
Cases Referred and Govindaraja Mudaliar v. Alagappa Thambiran A.I.R.
Excerpt:
.....main action. if a joinder of plaintiffs may embarrass the trial, the court interferes (order 1, rule 2). no suit shall be defeated by reason of misjoinder of parties (order 1, rule 9); for the determination of the real matter in dispute persons may be substituted (order 1, rule 10). the court may without the application of either party order the name of any party improperly joined as defendant to be struck out [order 1, rule 10 (2)]. all objections on the ground of misjoinder of parties shall be taken before the settlement of issues (order 1, rule 13). 12. where it appears to the court that any causes of action joined in one suit cannot be conveniently tried together, the court may order separate trials (order 2, rule 6). the court may at any stage order to be amended any matter in..........these defendants, any common question of law and fact would arise. at the end of his para. 44 the learned judge correctly puts the question. is the relief in respect of the same transaction? his task at this point is clearly to decide in his own mind what is the transaction alleged in the plaint, and whether the reliefs claimed are in respect of that transaction. having done this he can then refer to such rulings as are relevant to see whether they throw light upon his solution of this question of fact. but unfortunately the learned judge has no sooner stated the question than he becomes involved in a mass of reported decisions, and it is only by searching among his comments upon these decisions that one can discover what he regards the transaction to be. he says towards the end of.....
Judgment:

Jackson, J.

1. The plaintiff (appellant) sues the sixteen defendants on the following grounds. The plaintiff's father, a money-lender with branches of his business in Burma and Cochin China died on 24th April 1915 leaving a widow, defendant 5, and their son, the plaintiff, aged 3. The father's cousins were one Kamaswami Chetti and the present defendant 1. The plaintiff's guardian was his widowed mother, but she let the two cousins manage the estate; and they managed jointly till October 1918, when Ramaswami Chetti died. Then defendant 1 assumed sole management, and became de facto guardian. From the time that they assumed management the cousins acted in fraud of the plaintiff's estate, and in order to promote this fraud defendant 1 appointed sundry agents who colluded with him and participated in his breach of trust. Defendants 6 to 13 were such agents. Defendants 2 and 3 are impleaded as sons of defendant 1; defendant 4 as son of Ramaswami Chetti. The plaintiff's mother is defendant 5, and his cousin is defendant 14, also an agent. These two are said to have had no real authority or part in the transactions; and they are merely added to assist in the determination of the facts. Defendant 16 is claiming right of partition with the plaintiff and is impleaded to preclude a possible plea of non-joinder. The plaintiff prays for a decree against; defendant 1 and such other defendants as may be found jointly and severally liable for accounts, and payment of such moneys as they may be found liable to pay. Accounts are specifically demanded from defendants 1, 4, 6 to 13 (13 died after the institution of the suit and his legal representative is defendant 15).

2. Defendants 1 to 4, 8 to 12, and 15 took the plea that the suit was bad for mis-joinder or multifariousness (issue 1) and the lower Court finding this in their favour dismissed the suit. Hence the appeal. The learned Surbordinate Judge - rightly directed himself that Order 1, Rule 3 is the order governing this question of multifariousness; Ramendra Nath Bay v. Brajendra Nath Das A.I.R. 1918 Cal. 858 has been approved and followed by our Full Bench in Govindaraju Mudaliar v. Alagappa Tkambiran A.I.R. 1926 Mad. 911, and in the light of that ruling there can be no question but that Order 1, Rule 3 applies to joinder of causes of action as well as joinder of parties, The Subordinate Judge says that the learned Advocate-General who appeared before him for the defendants,

strenuously contended that Order 1, Rule 3, does not relate to joinder of causes of action.

3. It hardly needed the assurance of the learned Advocate-General in our Court that this is inacourate; for it would have been an unwarrantable trespass upon the time of a lower Court to argue before it that a Full Bench decision of this Court was wrong. He conceded (as indeed the Subordinate Judge also records) that Govindaraja Mudaliar v. Alagappa Thambiran A.I.R. 1926 Mad. 911 settled the matter, and the only questions before the lower Court were whether in this case there is as against the various defendants any right to relief in respect of the same transaction, and whether, if separate suits were brought against these defendants, any common question of law and fact would arise. At the end of his para. 44 the learned Judge correctly puts the question. Is the relief in respect of the same transaction? His task at this point is clearly to decide in his own mind what is the transaction alleged in the plaint, and whether the reliefs claimed are in respect of that transaction. Having done this he can then refer to such rulings as are relevant to see whether they throw light upon his solution of this question of fact. But unfortunately the learned Judge has no sooner stated the question than he becomes involved in a mass of reported decisions, and it is only by searching among his comments upon these decisions that one can discover what he regards the transaction to be. He says towards the end of para. 50 it is

the assumption by defendant 1 and his brother of the position of manager, and the subsequent sole management of defendant 1;

and again in para. 60:

The only thing that connects defendants together is that defendant 1 is said to have appointed defendants 6 to 13 as agents for the plaintiff's estate.

4. On that finding, issue 1 could be determined without any reference to reported cases. No one could contend that reliefs claimed against defendants 6 to 13 arose out of the transaction of the two brothers assuming management, or defendant 1's appointment of agents. But the transaction as disclosed in the plaint is that originally defendant 1 and his brother, and then defendant 1 alone proceeded to embezzle the plaintiff's estate and were aided and abetted by defendants 6 to 13 who connived at the breach of trust. Suppose a Municipal Chairman along with sundry bill collectors and clerks were to be charged for embezzling Municipal funds. The mere fact that the Chairman had appointed the subordinates would not warrant joinder, but if they had connived with the Chairman, then they could be jointly charged as persons committing the same offence or its abetment in the course of the same transaction. They need not each be responsible for the whole transaction. Speaking no doubt of plaintiffs but in terms which will equally apply to defendants, Vaughan Williams, L.J., observes in Stroud v. Lawson (1898) 2 Q.B. 44

I do not think that the whole of a transaction must be involved in each of the causes of action joined.

5. The rest of the passage is cited by the Subordinate Judge in his para. 52. The oases, Universities of Oxford and

Cambridge v. George Gill & Sons (1899) 1 Ch. 55 and Saccharin Corporation Ltd. v. Wild (1903) 1 Ch. 410, cited in paras. S3 and 57 throw no light on the matter and were not cited before us in this connexion by the learned Advocate-General. From Thompson v. London County Council (1899) 1 Q.B. 840, the Subordinate Judge in para. 55 bas deduced the self-evident proposition that injury to the plaintiff does not by itself render every act by which he was injured the same transaction. To revert to the municipal illustration, every one who had caused loss to the Municipality, say in one calendar year, could not be tried simultaneously. There must be a joint tort, as explained in Bullock v. London General Omnibus Co. (1907) 1 K.B. 260. The Subordinate Judge himself finds that Thomas v. Moore (1918) 1 K.B. 264, has no bearing on the facts of this case it is relevant in another connexion as will be seen below); and that Beck, In re (1918) 87 L.J. Ch. 335 affords him no help. At the end of twenty-seven pages of analysis, which must have given the learned Judge considerable trouble, he arrives at the correct conclusion that the question whether joinder is proper or not has to be determined with reference to the facts of each case; and he should have come to this determination before he let himself be submerged by reported cases.

6. In fact it is difficult to understand why many of these cases were cited at all for the purpose of ascertaining whether the relief is in respect of the same transaction. But some time here and considerable time below has been occupied in explaining the genesis and development of the English rule of procedure (Order 16, Rule 4, Rules of the Supreme Court) which corresponds to our Order 1, Rule 3; and the cases may have been cited rather in that connexion. It is a matter more germane to the lecture-hall than to the Court, and since in India we have the clear rule for our own procedure there is no need to discuss the growth of the English rules. Wailis, J., as he then was, has also deprecated the importation of English decisions into the discussions of this question in Ayyathurai Bavuthan v. Santhu Meera Bavuthan (1903) 31 Mad. 452. As regards the phrase 'same transactions,' the learned Advocate-General has called our attention to Hannay & Co. v. Smurthwaite (1893) 2 Q.B. 412 where Lord Esher finds that the conduct of the owners with regard to loading and conveyance of certain bales is one transaction. So far it would be parallel with the alleged conduct of defendant 1 in defrauding the minor. In Smurthwaite v. Hannay (1894) A.C. 494, when this case came up on appeal in the House of Lords, Lord Hersohell observed:

The consignments were delivered in the same ship and were goods of the same description. I cannot see that this makes the transaction one....

7. But he does not say, 'I cannot see that the conduct of the owners makes the transaction one' and therefore Lord Esher stands unoontradicted. The learned Advocate-General is disposed to adopt as the definition of a transaction a group of facts so connected as to be referred to by a single name; and both conduct on the voyage, and embezzlement of the minor's estate would fall within this definition. Of the other oases cited before us Frankenburgh v. Great Horseless Carriage Co. (1900) 1 Q.B. 504, Drincqbier v. Wood (1899) 1 Ch. 393, turn on the issue of a prospectus, and Campania Dansinena de Carnes Congeledas v. Houlder Brothers & Co. (1910) 2 K.B. 354, on damage to frozen meat, and none of these cases helps to the decision whether the fraud of a trustee and his abettors amounts to a transaction. We find the transaction or series of transactions out of which this case arises to be the scheme of embezzlement in which defendant 1, the father of defendant 4 and defendants 6 to 13 are said to have connived, and if separate suits were brought against the respective defendants one common question at least would arise. Did defendant 1 ever intermeddle with the estate? Assuming, as we must assume at this preliminary stage that the intermeddling is true, the next question is in what manner the relief should be sought. It is not disputed that a minor may elect to sue a fraudulent trustee either for damages or for an account; of Darmer v. Fortescue 26 E.R. 875, Hicks v. Sallitt 43 E.R. 307 and Hoivard v. Earl of Shrewsbury (1874) 17 Eq 378, but it is argued that defendants 6 to 13 are either the agents of defendant 1, and as such not accountable to the cestui que trust, or are the direct agents of the plaintiff who can be sued no doubt for account, but can never be sued all together in the same suit. Bui this argument overlooks the main allegations in the plaint. Defendant 1 acted in a fraud of the plaintiff's estate and defendants 6 to 13 connived at that fraud. In these circumstances the cestui que trust can certainly call upon the agent who fraudulently mixed himself up with a breach of trust for an account (Lewin on Trusts, Edn, 13, pp. 203-4, and p. 471 'derivative titles from a trespasser'), Ramendra Nath Roy v. Brajendra Nath Das A.I.R. 1918 Cal. 858 Cal. and Sour v. Ashwell (1893) 21 Q.B. 394, where a person has assumed either with or without consent to act as trustee, he must discharge himself by accounting to his cestui que trust and again

person where he has knowingly assisted a nominated trustee in a fraudulent disposition of property will be treated as if he were an exparte trustee

and again p. 403,

the proper suit is...by the cestui que trusts against both the trustees and their agent seeking to make both liable.

All parties to a breach of trust are equally liable; there is between them no primary liability. Wilson v. Moore 39 E.R. 629 at p. 637.

8. A servant is as liable as his master in the case of a wrong-doer when the doctrine that the possession of an agent is the possession of a principal has no application : Shareland v. Mildon 67 E.R. 997. Obviously then it would not be a pure suit for account as between principal and agent. But it is next contended that supposing the charge of fraud breaks down, the plaintiff will then proceed against these-various agents on the contractual basis. The reiterated insistence in the plaint that the accounting should be 'along: with' defendant 1 makes it unlikely that this was ever the plaintiff's intention, and now we have the assurance of his learned advocate that this apprehension is illusory. The suit against all the defendants must stand or fall on the allegation that defendant 1 was committing fraud at which they or those whom they represent connived. It cannot therefore be said that this case is bad for misjoinder be cause it will develop into a mere suit, against disconnected agents for account. : They are sued for account each as a fraudulent trustee since the plaintiff has elected to seek equitable relief in this manner instead of bringing a suit for damages. Once (assuming the facts to be true) it is-established that the plaintiff has a legitimate cause of action against the defendants, which justifies his demand for equitable relief by way of accounting, and it is also established that there is a transaction or series of transactions which would justify the joinder of these causes of action in one suit, then the only practical consideration is whether it would be more convenient for the defendants to be joined in one trial, or severally relegated to separate trials. At first blush it may seem surprising that the plaintiff did not leave this for the defendants to decide, and petition the Court to allow an amendment to that effect if defendants so desired.

9. But the solution is not quite so simple as this. Wyllis v. Ellice 67 E.R. 1264, which is-authority for plaintiff's suing defendant 1 in equity as bailiff, guardian or trustee is also authority for the dismissal of the suit if other persons who entered on the estate are not joined as parties, (Cf. Order 31, Rule 2, Civil P.C.). The learned Advocate-General was prepared to argue that this rule would not apply to the facts of this case, but nevertheless, to put it no higher, the plaintiff would undoubtedly subject himself to the risk of the rule being cited against him if he failed to join defendants 6 to 13 with defendant 1 and the suit might then have been held bad not for misjoinder but for nonjoinder.

10. Dextrum Scylla latus, laevum implacata Charybdis.

11. Therefore the only course open to the plaintiff was to abide the decision of the Court before he applied, if at all, for amendment. This seems to have been recognized by the parties at the time of the trial. When it became incumbent upon the defendants under Order 13, Rule 1, to produce the documents upon which they relied, the learned Advocate-General moved that the question of misjoinder should be taken up as a preliminary issue and he could then produce his documents. And the Court agreed that it was only after the question of misjoinder was settled one way or the other, that the real hearing would begin. Of course, if they liked, the defendants could have duly filed their documents at the first hearing, and could then have fought out issue 1 whether the suit is bad for misjoinder as part of the main action. Instead of this, they refrained from filing documents, and insisted that the hearing of issue 1 should be only a preliminary skirmish. To argue afterwards that this was the main action is scarcely consistent. It is a surprising argument that to dismiss a suit for multifariousness is the normal course. At this preliminary stage the function of the Court is simply to see that the pieces are set up right for a fair game. It is not necessary to argue whether in extreme oases the Court has the power to dismiss a suit for misjoinder, because to anyone who has imbibed the spirit of our Code of Procedure the Court's duty is abundantly clear. If a joinder of plaintiffs may embarrass the trial, the Court interferes (Order 1, Rule 2). No suit shall be defeated by reason of misjoinder of parties (Order 1, Rule 9); for the determination of the real matter in dispute persons may be substituted (Order 1, Rule 10). The Court may without the application of either party order the name of any party improperly joined as defendant to be struck out [Order 1, Rule 10 (2)]. All objections on the ground of misjoinder of parties shall be taken before the settlement of issues (Order 1, Rule 13).

12. Where it appears to the Court that any causes of action joined in one suit cannot be conveniently tried together, the Court may order separate trials (Order 2, Rule 6). The Court may at any stage order to be amended any matter in any pleading which may embarrass the trial (Order 6, Rule 16). The Court may at any stage of the proceeding allow either party to amend his pleadings (Order 6, Rule 17). It was argued that under this last rule a Court can only allow upon application. Obviously the initiative must come from the party. A Court cannot compel an amendment, Venkatachala Chetti v. Narayana Iyer (1913) 19 I.C. 672, and will not draft it itself. But a Court should not prevent what it is empowered to allow; and having regard to the circumstances of this case, and the evident understanding between the parties that only its frame was under consideration, that the real hearing of the suit had non-begun, the Court should undoubtedly have given the plaintiff an opportunity to elect, as soon as it had decided that the plaint in its present form was unsustainable. The whole trend of the leading English cases is towards liberality in this respect;. Scrutton, L.J. observes:

The result of the later decisions is that you must look at the language of the rules and construe them liberally, and where there are common questions of law or fact involved in different causes of action you should include all parties in one action. Payne v. British Time Recorder, Co. (1921) 2 K.B. 1.

13. The whole of Scrutton, L.J.'s remarks on p. 16 have a very close bearing upon, our case. And along with this may be read a summary of the whole matter by the same learned Judge leading to the same conclusion in Harwood v. Statesman Publishing Co. (1929) 141 L.T. 54. Cf. Thomas v. Moore (1918) 1 K.B. 555, . In Frankenburg v. Great Horseless Carriage, Co. (1900) 1 Q.B. 504, the Judge in Chambers after a finding of misjoinder of defendants gave the plaintiff 10 days in which to decide if he would split up his plaint into several actions and against this order the plaintiff appealed. The Master of the Rolls observes, p. 509:

It would be a startling novelty and a most deplorable thing for our practice and procedure if such actions as these could be summarily disposed of and stopped in this way. Certainly we have no authority for doing anything of the-kind. There is no single case which cornea anywhere near it, and I will not be the first to undo and unsettle what has been the established practice for years. Substantial justice would be sacrificed to a wretched technicality.

14. These citations suffice to dispel any illusion that in England dismissal on account of multifariousness is the normal course, and the Indian oases are not otherwise. We gave the plaintiffs time to consider their position; Afzal Shah v. Lachmi Narain A.I.R. 1918 All. 525, (of 40 All). Where a suit has been directed against a number of defendants; and the allegations in the plaint disclose that the causes of action against the several defendants are not only separable but separate it is not permissible fore Court of law to dismiss the suit. Substantial justice should in no case be allowed to be sacrificed to a wretched technicality : AIR1930All180 . When a Court is of opinion, that a suit is bad for multifariousness, it ought to give the plaintiff an opportunity to amend his plaint and to elect.... Patna High Court 1928 in Limaye, K.V. v. J.K. Watve : AIR1924Pat65 , which is specially relied upon by the learned Sub-Judge (para. 108) although the appellate Court declined to interfere with the trial Court's discretion it observed (p. 84 ad im):

the proper course for the Court of first instance to have adopted would have bean to have returned the plaint for amendment: cf. Janokinath Mookerjee v. Bamrunjun Ohuckerbutty (1879) 4 Cal. 949 and Gur Prasad v. Gur Prasad A.I.R. 1914 Cal. 795.blockquote>15. Cases can no doubt be found which have been dismissed for multifariousness; the lower Court cites several in its judgment, and as observed at the outset of this discussion, no one denies that the Court has the power of dismissal; but enough has been said to show that its power generally should be exercised with a liberal discretion; and in this case there can be no question but that plaintiff should have been allowed to elect. The learned Sub-Judge records in his para. 96 that the learned advocate for the plaintiff never represented that in case the Court found the suit bad for multifariousness he should have been given this opportunity. He tells us, and this is not traversed by the other side, that he directed the attention of the Court top. 459 of Mulla'a Commentary on the Civil procedure Code (Edn. 9), where it is observed that the Court may direct the plaintiffs to elect. Probably all that the Sub-Judge means is that he had received no application; but, as already pointed out, until the Court decided that there was mis joinder the plaintiff might well find a legal difficulty in separating the defendants and bringing several suits. We have no hesitation in finding that the lower Court should have given the plaintiff an opportunity to elect, and if we found the suit bad for multifariousness we should have ordered to that effect.

16. It remains to consider special pleas which were advanced on behalf of defendant 4, and also on behalf of defendants 8, 11 and 15. It is argued by Mr. Varadaohari that even admitting that defendants 1 and 6 to 13 are liable to account either as tort-feasors or agents his client, defendant 4, fills neither part. His father may have been liable, but he took no part in the transaction. The terms of Order 1, Rule 3, are rather broader than that 'relief in respect of the same transaction.' The plaintiff has sought relief from defendant 4 by way of accounting, and Mr. Srinivasa Ayyangar concedes that possibly when the suit has passed beyond this preliminary stage that relief may be found to be misconceived. But at present we are dealing with the plaint as it stands, and since plaintiff is demanding a relief from defendant 4 arising out of this transaction his joinder seems to be proper. It is difficult to see bow it would convenience him to be relegated to a separate suit, and in any case it seems that he would wish to be impleaded in this suit. Because in para. 18 (6) of the plaint it is stated that moneys from the plaintiff's firms were sent to defendant 4's firm under the direction of defendant 1; and it does not seem clear at this stage of the case that this is a matter of banking. It is possible that defendant 4's firm is accused of wrong, fully absorbing into its assets, assets which belonged to the plaintiff. Quite apart from the ultimate decision upon the merits of the claim against defendant 4 we are not prepared to find at this stage that he is improperly joined. This accords with Mahomed Ali Sultan v. Abdul Khasi (1910) 9 I.C. 565, which runs very much on all fours with our case.

17. On behalf of defendants 8, 11 and 15, it is argued that their agencies are widely separable in time and place, and it is not reasonable to suppose that there is one transaction or even a series of transactions. It is no fault of the plaintiff that his firm has wide ramifications or that his minority was of long duration. The only logical period to adopt would seem to be from the death of plaintiff's father up to the date of suit. If shorter periods were taken the division would be quite arbitrary, and there would be every risk of overlapping. And it is to be noted that in the course of the profuse argument that has ranged round this preliminary issue no one has ever suggested that the defendants would find it more convenient to be relegated to several suits. Their sole object has to defeat the suit for multifariousness, not to reconstitute it upon some more rational scheme. We see no reason therefore to treat defendants 4, 8, 11 and 15 differently from the other defendants; and find as regards all of them that there is no misjoinder.

18. Accordingly the appeal is allowed with costs as against defendants 1 to 4, 8 to 12 and 15 here and in the lower Court. Defendant 6 claims costs in this appeal - his claim can abide the determination of the suit when it will be considered on its merits by the lower Court. The lower Court must proceed with the suit. Since the principal counsel engaged come from Madras there may be inevitable delays; but there should be no delay in the filing of documents. Order 13, Rule 1 is peremptory and the misunderstanding which led to its being disregarded is a regrettable feature of this case. In our Court as in the lower Court the learned Advocate-General confines himself to registering a protest that Govindaraja Mudaliar v. Alagappa Thambiran A.I.R. 1926 Mad. 911 is wrongly decided. The Full Bench decision is as binding upon our Bench as it was upon the Subordinate Judge, and since it was pronounced almost ten years ago nothing has arisen to shake its validity. On the contrary the Bombay High Court which once held a different opinion is now aligned with Calcutta and Madras, Bhagwan Gokulji and Co. v. Balhu : AIR1982Bom1 , and even if we were so disposed we could hardly ask for a reference to an. other Full Bench merely on the ground that all these Courts is our opinion bad failed to appreciate the law, especially when in mere questions of procedure the rule that usually prevails is stare decisis. This is not to imply that we our selves have seen reason to doubt the ruling. The point has not been argued before us, and Govindaraja Mudaliar v. Alagappa Thambiran A.I.R. 1926 Mad. 911, unless it is reversed by a superior Court, must stand as the accepted law.


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