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Sri Saravana Chit Fund Co., Firm Periakulam Through Its Managing Partner S. Jaimulladeen Vs. Sekudeen Son of K. Sikkendar Rowther at Pallivasal them, thenkarai, Periakulam and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1981)1MLJ437
AppellantSri Saravana Chit Fund Co., Firm Periakulam Through Its Managing Partner S. Jaimulladeen
RespondentSekudeen Son of K. Sikkendar Rowther at Pallivasal them, thenkarai, Periakulam and ors.
Cases ReferredCharles Samuel v. Board of Trustees
Excerpt:
.....formal defect, or (b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of the suit or part of the claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of the claim. the abovesaid rules clearly vests the court with the power to permit withdrawal of a suit with liberty to file a fresh suit in respect of the very same subject-matter if the suit fails by reason of some formal defect. there is absolutely no finding as to whether the suit failed for a formal defect or not. this failure to discuss has vitiated the order of the court below and as such the..........to recover a sum of rs. 3,150 with interest from the respondents herein. the plaintiff, which is a chit fund company, had the first defendant as its member. the first defendant joined chit no. 21-group which is for a total sum of rs. 5,000. this amount is payable in 25 instalments at the rate of rs. 200 per month. in the second instalment, the first defendant bid at the auction on 15th march, 1976, and received the amount. after doing so, the first defendant executed a pronote for rs. 4,600 for the future 23 installments. this was on 2nd april, 1976. according to the petitioner, the first defendant paid rs. 1,400 for instalments nos. 3 to 9 and rs. 50 for the 10th instalment. later, he defaulted from 13th september, 1976. hence, the plaintiff came forward with the present suit demanding.....
Judgment:
ORDER

P.R. Gokulakrishnan, J.

1. This revision arises out of an order passed in I. A. No, 679 of 1971 in A. S. No. 18 of 1978.

2. The short facts leading to the filing of the application I. A. No. 679 of 1978 are as follows: The petitioner in this interlocutory application, as the plaintiff, filed the suit O. S. No. 229 of 1977, on the file of the District Munsif's Court, Periakulam, to recover a sum of Rs. 3,150 with interest from the respondents herein. The plaintiff, which is a chit fund company, had the first defendant as its member. The first defendant joined Chit No. 21-group which is for a total sum of Rs. 5,000. This amount is payable in 25 instalments at the rate of Rs. 200 per month. In the second instalment, the first defendant bid at the auction on 15th March, 1976, and received the amount. After doing so, the first defendant executed a pronote for Rs. 4,600 for the future 23 installments. This was on 2nd April, 1976. According to the petitioner, the first defendant paid Rs. 1,400 for instalments Nos. 3 to 9 and Rs. 50 for the 10th instalment. Later, he defaulted from 13th September, 1976. Hence, the plaintiff came forward with the present suit demanding the sum of Rs. 3,150 towards principal and Rs. 259.35 towards interest. Defendants 2 and 3 are the legal representatives of the guarantor for the first defendant who was no other than the wife of the first defendant.

3. The first respondent-first defendant contended that it is true that he executed a promissory note for 4,600 for the future 23 instalments, that the plaintiff is not entitled to claim the entire amount in one lump sum, that each instalment has a separate cause of action, that the plaintiff ought to have filed the suit only for the defaulted subscriptions and not for the entire suit amount and that the suit is premature. During arguments it was contended that the suit is not maintainable since no notice under Section 25 of the Chit Fund Act has been given. According to the first defendant, such a notice is mandatory and the failure to issue such a notice will result in the dismissal of the suit.

4. The trial Court, holding that the suit ought to have been filed for the defaulted subscriptions only upto 20th July, 1977 and that the suit is not maintainable for want of notice under Section 25 of the Chit Fund Act, dismissed the suit. Aggrieved by the judgment and decree of the trial Court, the plaintiff filed an appeal A. S. No. 18 of 1978 before the Additional Subordinate Judge at Dindigul. In that appeal, the plaintiff filed I. A. No. 679 of 1978 praying for permission to withdraw the appeal with permission to file a fresh suit on the same cause of action. In support of that application, the petitioner has averred that his suit has been dismissed for want of notice under Section 25 of the Chit Fund Act, that the petitioner must be permitted to file a fresh suit on the same cause of action after issuing a notice to the first respondent under Section 25 of the Chit Fund Act and that if such permission is not given irreperable loss and hardship will be caused to the petitioner. The Subordinate Judge, Dindigul, who heard this interlocutory application filed under Order 23, Rule 1, Civil Procedure Code, following the decision reported in Charles Samuel v. Board of Trustees (1978) 2 MLJ 243. came to the conclusion that this is not a fit case in which the dis-creation under 'Order 23, Rules 1 and 2, Civil Procedure Cods,' should be exercised. Hence he dismissed the application with costs. Aggrieved by the order passed by the learned Subordinate Judge, the plaintiff in O. S. No. 229 of 1977 has filed the present revision petition.

5. Mr. Sarvabhauman, the learned Counsel for the petitioner, took me through the decision reported in Charles Samuel v. Board of Trustees (1978) 2 MLJ 243. and also the unreported decision rendered by Varadarajan, J., in Sri Meenakshisundareswarar Devasthanam, Madurai v. Irulayee Ammal and 3 Ors. S. A. No. 2325 of 1975. In the judgment reported in Charles Samuel v. Board of Trustees (1978) 2 MLJ 243, of a learned Single Judge of our High Court, it has been clearly observed that the grant of leave to withdraw a suit is always a matter of discretion of the Court and each case has to depend on the facts arising in that case. No doubt in that decision, the learned Judge has not permitted the petitioner to withdraw the suit under Order 23, Rules 1 and 2, Civil Procedure Code, even though the suit was dismissed for want of proper notice. Varadarajan, J., in S. A. No. 2325 of 1975, after referring to various decisions, finally observed:

In the present case the plaintiff's title to the suit properties is not in dispute. It was only contended that the defendants are in possession of the properties as its tenants. In these circumstances it is not possible to say that it is not open to the plaintiff to terminate the tenancies and seek to evict the defendants. The relief of possession could not be given to the plaintiff in the present action having regard to the fact that no notice of termination of tenancies has been given. It will not be in the interests of justice to dismiss the suit once and for all on the technical defect of not issuing a notice of termination of tenancies. Therefore, I am of the opinion that this is a fit case in which leave to withdraw the suit with liberty to file a fresh suit after termination of the tenancies has to be granted to the petitioner in the civil miscellaneous petition.

In the present case, there is no dispute with regard to the executing of the promissory note. The objection taken is that the suit is premature in as much as some of the instalments have not become due. Another objection taken is that the suit is defective because notice under Section 25 of the Chit Fund Act has not been given. As observed by Varadarajan, J., it will not be in the interests of justice to dismiss the suit once and for all on the technical defect of not issuing a notice under Section 25 of the Chit Fund Act and also on the fact that the suit is premeature. In my view, no pre-judice will be caused to the respondent if the leave sought for is granted, since the dismissal of the suit was on a formal technical defect Order 23, Rule 1, Civil Procedure Code, states:

(1) At any time after the institution of a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon a part of his claim:

* * * * * *(3) Where the Court is satisfied...

(a) that a suit must fail by reason of some formal defect, or

(b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of the suit or part of the claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of the claim.

The abovesaid Rules clearly vests the Court with the power to permit withdrawal of a suit with liberty to file a fresh suit in respect of the very same subject-matter if the suit fails by reason of some formal defect. It also requires the Court to find out whether there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter or for part of the claim. As I have already observed, the suit has been dismissed for a formal technical defect of want of notice under Section 25 of the Chit Fund Act. No doubt, the trial Court has also held that the claim for all the instalments payable is premature except for certain instalments. The Subordinate Judge, Dindigul, who has disposed of the interlocutory application has not at all considered the provisions of Order 23, Rule 1(3), Civil Procedure Code. There is absolutely no finding as to whether the suit failed for a formal defect or not. He has also not discussed as to whether there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the very same subject-matter. This failure to discuss has vitiated the order of the Court below and as such the sub-Court has not exercised the jurisdiction vested in it by law. I am convinced that the suit has been dismissed for a formal defect and for that, the parties should not suffer. If the permission for the withdrawal with liberty to file a fresh suit is not granted, there will be miscarriage of justice, since the first respondent himself admits liability under the promissory note executed by him.

6. In these circumstances, the revision petition is allowed without costs. The result is the petitioner herein is permitted to withdraw the suit with liberty to file a fresh suit on the same cause of action.


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