1. This is an appeal from a decree in a contested suit wherein the learned trial Judge did not allow counsel for the defendant to cross-examine the witness who came to prove the plaintiff's case. The decree, however, was sought to be maintained on diverse grounds by counsel for the respondent and hence it is necessary to examine the facts of the case and what transpired before the learned trial judge on the day when the suit was called on for hearing and decreed.
2. The case made in the plaint is as follows: The plaintiff is a manufacturer of cables and other electrical goods. Between March, 1955 and February, 1956 it supplied goods to one F. & C. Osier (India), Ltd., and one S. B. Trading Co. Private, Ltd., and large sums of money became due and payable to the plaintiff from the said companies. On or about September 5, 1956 the defendant, a director of both the said companies, in consideration of the plaintiff allowing and continuing to extend to the said companies the said credit, guaranteed in his personal capacity the payment of such amounts upto Rs. 11,00,000 and Rs. 15,00,000, respectively, that might be due to the plaintiff in its accounts with the said companies. The letters of guarantee, dated September 5, 1956 were annexed to the plaint. On September 26, 1957 F. & C. Osier (India) Ltd. became indebted to the plaintiff in the sum of Rs. 11,37,707/3/3 while S. B. Trading Co. Private, Ltd. became so indebted in the sum of Rs. 15,34,252/15/-. On September 26, 1957, the defendant in consideration of the plaintiff having deferred the filing of suits against the said Companies for the recovery of the amounts due and by way of supplementing the letters of guarantee, dated September 5, 1956, executed a further letter of guarantee whereby he acknowledged his liability to the plaintiff in respect of the dues of the said Companies and guaranteed payment of the same. A copy of the said letter is also annexed to the plaint On May 1, 1958. i.e., the date of the filing of the suit the plaintiff's dues from F. & C. Osler (India), Ltd. was Rs. 11,42,041.25 nP and from S. B. Trading Co. (Private), Ltd. Rs. 15,09,282.09 nP. The claim against the defendant was, however, limited to Rs. 26,00.000 in terms of the letter of guarantee.
3. The letters of September 5, 1956 go to show that in case the said two Companies failed to pay their dues the executant H.D. Mundra would remain liable to make payment to the plaintiff upto Rs. 11,00,000 in respect of the dues from F. & C. Osler (India), Ltd. and up to Rs. 15,00,000 in respect of dues from S. B. Trading Co. (Private), Ltd. the letter of September 26, 1957 the defendant purported to confirm the indebtedness of the principal debtors as mentioned above and in his capacity as guarantor to pay diverse sums of money in stated instalments towards reduction of his liability whereupon the plaintiff was to release certain securities deposited by S. B. Trading Co. (Private), Ltd. with the plaintiff to secure the latter's indebtedness.
4. The defendant filed his written statement on July 8, 1958. By it he admitted that the plaintiff had from time to time supplied electrical goods to the two named Companies and further admitted having executed the two letters, dated September 5, 1956 and the one, dated September 26, 1957. Except for this, the defendant did not make any admission with regard to the claim of the plaintiff. In particular he denied having guaranteed any payment to the plaintiff for any consideration as alleged or at all. He did not admit that the sums of Rs. 11,37,707/3/3 and Rs. 15,34,252/15/- had become due from the two Companies to the plaintiff as alleged. He pleaded further that after execution of the letter, dated September 26, 1957 the earlier letters, dated September 5, 1956 had become inoperative. He also stated that on or about March 14, 1958 the plaintiff had amicably settled its claim against the said two Companies by reason whereof the defendant became absolved from liability, if any, to the plaintiff. The defendant did not admit that the sums of Rs. 11,22,041.28 nP and Rs. 15,09,252,09 nP had become due to the plaintiff on the date of the institution of the suit
5. The suit came on for hearing on January 29, 1964 when after counsel for the plaintiff had opened his case in part counsel for the defendant prayed for leave to amend the written statement. The learned Judge was not satisfied that 'any such amendment arose as late as at that stage' and refused the oral application of counsel for the defendant. The Court minutes record that 'Mr. Ghose did not raise any issue in view of the fact that amendment of the written statement had been refused'. Counsel for the plaintiff then called his witness and examined him in chief. He tendered the two letters, dated September 5, 1956 and the one, dated September 26, 1957. He also tendered two other letters from the two companies, dated May 22, 1957. The Court minutes record
'Mr. Ghosh asks for permission to cross-examine and is not allowed to cross-examine the witness inasmuch as the Court has passed the following order:
The Court: Mr. B. K. Ghosh not having raised any issue I do not think he is entitled to cross-examine this witness. It appears to me that the entire thing is admitted in the written statement and as no issue has been raised upon the case made out by defendant in the written statement I decide that the defendant is not entitled to cross-examine. Mr. B. K. Ghosh argues and concludes
Mr. Sankar Ghosh prays for a decree.
The Court: I am satisfied with the evidence adduced in this suit on behalf of the plaintiff. There will be a decree for 26 lacs of rupees in favour of the plaintiff. Interest on judgment on 26 lacs of rupees at six per cent and costs.'
6. It appears to me that the learned Judge had gone wrong in disallowing cross-examination of the witness. It is an elementary principle of law that no evidence which has not been subjected to cross-examination can be used against anybody against whom it is sought to be tendered unless cross-examination is declined. Under Chapter 14, Rule 3 of the Original Side Rules
'where a suit is heard ex parte against any defendant, such defendant may be allowed to cross-examine in person, the plaintiff's witnesses, and to address the Court.'
The position of a defendant who appears through counsel cannot be any worse merely because he does not take part in the framing of issues.
7. The first question to which we have to address ourselves is how were the issues to be framed and in particular whether it was the duty of counsel for the defendant to raise issues and whether on his failure to do so the framing of issues dispensed with. So far as the Original suit of this Court is concerned the practice is for counsel of the parties to be ready with draft issues which according to them arise on the pleadings. These are placed before the learned trial Judge after the opening of the case by counsel for the plaintiff and a perusal of the relevant documents.
The learned judge then frames the issues himself or settles them on the basis of the drafts handed up by making necessary alterations and amendments therein. Probably this is based on the English Practice and Order 33, Rule 1 of the Rules of Supreme Court in England by which 'the parties may be directed to prepare issues and such issues shall, if the parties differ, be settled by the Judge.' So far as our Code of Civil Procedure is concerned Order 14, Rule 1 lays down that issues arise when a material proposition of fact or law is affirmed by one party and denied by the other and Sub-rule 5 provides that
'at the first hearing of the suit the Court shall after reading the plaint and the written statement if any, and after such examination of the parties as may appear necessary, ascertain upon what material propositions of fact or of law the parties are at variance, and shall thereupon proceed to frame and record the issues on which the right decision of the case appears to depend.'
Under Sub-rule 8
'nothing in this rule requires the Court to frame and record issues where the defendant at the first hearing of the suit makes no defence,'
Order 49 of the Code of Civil Procedure does not except the application of the provisions of Order 14 to any Chartered High Court in the exercise of its ordinary or extra-ordinary civil jurisdiction. Consequently the provisions of Order 14 of the Code of Civil Procedure must be observed in the trial of any suit before the High Court in its original jurisdiction. Counsel for the defendant was certainly not justified in the attitude taken by him in his refusal to help in the framing of the issues but that did not absolve the Court from framing issues unless it was satisfied that the defendant did not want to make any defence. The Court minutes do not lend itself to the construction that counsel for the defendant did not raise any issues because there was no case to contest. Inasmuch as the defendant had in his written statement merely acknowledged the execution of the three letters without admitting the plaintiff's claim more than one issue arose on the pleadings and the learned trial Judge should have directed his attention to the settling of the same. It was argued by counsel for the plaintiff that the effect of not raising any issues implied the abandonment thereof and a number of decisions was cited on this point. The case of Nagappa v. Siddalingappa, AIR 1919 Mad 698 was one where the defendant did not raise any question as to the execution of a mortgage in a suit upon it and no issue was framed with reference to this point. It was observed by the Madras High Court that
'an omission to raise an issue on a question of fact implies an abandonment of that question by the party interested.'
This decision can have no application to the facts before us. It would appear that there was no denial of execution of the mortgage in the written statement in the Madras case and consequently no issue could arise. Moreover the observations must be limited to a case where a number of issues arise on the pleadings but counsel for the defendant do not think it fit to raise some of them while raising others. In such a state of affairs it can rightly be said that counsel appearing on behalf of the defendant abandoned some issues which arose on the pleadings. In Devarajulu Naidu v. Kondammal, AIR 1925 Mad 427 the factum of the execution of a Will was not challenged in the trial Court probably because of the reason that the Will was registered. Krishnan, J. refused to raise an issue for the first time in the High Court as to the factum of the Will and called for a finding thereon from the lower Court. The learned Judge said that
'if there was anything wrong with the issues framed, it was for the defendants then and there to have applied to the trial Court to amend the issues and put them right; nothing of that sort was done.'
The judgment clearly shows that whatever be the reason counsel for the defendant did not at the trial stage challenge the factum of the Will. In Venkata Narasimha Naidu v. Bhashyakarlu Naidu, ILR 22 Mad 538 the question was whether the learned vakil for the defendant was authorised to abandon an issue as to the impartibility of a certain estate. The learned Judges of the Madras High Court took the view that a vakil appointed to conduct a case on behalf of his client has the power to ask for an issue or to abandon an issue, to get a witness summoned or to dispense with his evidence. All these are cases of clear abandonment of certain issues but a party who in circumstances like those in this case fails to take part in framing issues cannot be said to have abandoned all issues. As against these our attention was drawn to several cases where it has been held that it is the duty of the Court to frame issues namely Hooriya v. Munna AIR 1956 Madh Bha 56 and Dandy Swami Jagannath Asram v. Srijib Nyayatirtha, 48 Cal WN 635. In my opinion, it is unnecessary to refer to these cases in any detail as Order 14, Rule 1 must be complied with.
8. It was next argued that the judgment of the trial Judge could be upheld on other grounds namely that there was an admission in the pleadings which though mentioned in the Court minutes was not referred to in the judgment. It was contended that it was open to the respondent under the provisions of Order 41, Rule 22 to support the decree on this ground. In my view, Order 41, Rule 22 has no application at all. That rule provides that
'any respondent, though he may not have appealed from any part of the decree, may not only support the decree on any of the grounds decided against him in the Court below, but take any cross-objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the Appellate Court * * *'.
In support of his contention counsel for the respondent referred to the Full Bench judgment in G. C. Venkata Rao v. K. Satyanarayanamurthy AIR 1943 Mad 698. This case makes it abundantly clear that it is open to the Court of Appeal to maintain the decree appealed from on a ground decided against the respondent even though he did not take any cross-objection. With respect it appears to me that the judgment of Krishnaswami Ayyangar, J. puts the matter very lucidly. The learned Judge pointed out that the reason for the rule was that the respondent had no right of appeal from a decision, however, erroneous if it was in his favour and he might find himself in a difficult situation if he was obliged to remain content with supporting the decision on the only point or points on which he had succeeded without resorting to the others on which he had tailed. In my opinion, this judgment illustrates the clear words of Order 41, Rule 22 indicating that the decision may be supported on a ground which had been raised but not accepted by the trial Court. From the Court minutes it does not appear that the plaintiff had contended before the learned trial Judge that it was entitled to a decree on admission. There is no reference to it in the judgment itself.
9. It was next argued that even though there may be no reference to it in the judgment appealed from if we find a clear admission of the liability of the defendant in his pleading we should maintain the decision on that ground. No doubt Courts of Appeal have from time to time adjudicated on points not canvassed before the trial Court. But this power is never exercised unless the case is very clear and free from any doubt, As was said by 'Lord Herscheli in The Tasmania, (1890) 15 AC 223, at p. 225
'A point *** not taken at the trial, and presented for the first time in the Court of Appeal, ought to be most jealously scrutinised * * * A Court of Appeal ought only to decide in favour of an appellant on a ground there put forward for the first time, if it be satisfied beyond doubt, first, that it had before it all the facts bearing upon the new contention as completely as would have been the case if the controversy had arisen at the trial; and next, that no satisfactory explanation could have been offered by those whose conduct is impugned if an opportunity for explanation had been afforded them in the witness box.'
Here before the Court can hold that the defendant was liable on the letters of guarantee at the date of the trial it has to be satisfied that the amounts alleged to be due from the companies had not been paid at the date of the suit and were still outstanding at the date of the trial. The defendant by his written statement did not admit that any moneys were due from the said companies and if the evidence of the witness is excluded, as indeed it must be, there is nothing before the Court on which it can hold that the defendant was still liable to the plaintiff in the amount of Rs. 26,00,000.
10. Lastly, it was contended that the absence of issues is not a point which has been taken in the grounds of appeal and cannot be urged in defeating the plaintiff's claim. It is true that no ground of appeal has been taken about the non-settlement of the issues but this does not matter. The most vital ground is that the learned Judge erred in passing the decree without giving an opportunity to the defendant to cross-examine the witness of the plaintiff and as I have already held that if the oral evidence be not accepted no decree could have been passed.
11. In the result, the appeal must be allowed and the decree of the trial Judge set aside. We remand the case to the trial Court for trial after framing necessary issues. If the plaintiff desires to rely on the evidence already recorded the witness examined must be allowed to be cross-examined by the defendant, otherwise the same is not to be taken into consideration. Normally in a case like this we would have directed the parties to pay and bear their own costs of the appeal in view of the fact that they alone were not to be blamed for what had happened in the trial Court. But in view of the time taken up before us in the attempt to maintain an indefensible decree we direct the respondent to pay the costs of this appeal. Certified for two Counsel.
12. I agree.