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J.B. Ross and Co. Vs. C.R. Scriven and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in34Ind.Cas.235
AppellantJ.B. Ross and Co.
RespondentC.R. Scriven and ors.
Cases ReferredAmritnath v. Dhunpat Singh
Excerpt:
civil procedure code (act v of 1908), order ix, rule 6, order viii, rules 3, 5, order xxxvii, rule 2, order xli, rules 23, 25 - suit, first hearing of--ex parte decree, passing of, without evidence jurisdiction--order viii, rule 5, scope of--admission by non-traverse--verified plaint, whether legal evidence--penal code (act xlv of 1860), sections 191, 193--breach of contract--unliquidated damages, suit for--strict proof of claim, necessity of, even when undefended--hight court--power to remand case. - lancelot sanderson, c.j.1. this is an appeal by the defendants in this case, j. b. ross & co., against the judgment which was given by the learned judge in the court below in favour of the plaintiffs under these circumstances: the action was brought for unliquidated damages arising upon an alleged breach of contract, which was made between the plaintiffs and the defendants. the damages claimed were based upon the ordinary rule, viz., the difference between the contract price and the market price at the time the contract ought to have been performed. the summons was served, but the defendants did not enter appearance within the time specified in the summons, nor did they put in a written statement of defence within the time mentioned in the summons. thereupon, the case was put upon the.....
Judgment:

Lancelot Sanderson, C.J.

1. This is an appeal by the defendants in this case, J. B. Ross & Co., against the judgment which was given by the learned Judge in the Court below in favour of the plaintiffs under these circumstances: The action was brought for unliquidated damages arising upon an alleged breach of contract, which was made between the plaintiffs and the defendants. The damages claimed were based upon the ordinary rule, viz., the difference between the contract price and the market price at the time the contract ought to have been performed. The summons was served, but the defendants did not enter appearance within the time specified in the summons, nor did they put in a written statement of defence within the time mentioned in the summons. Thereupon, the case was put upon the list of undefended cases, and it came before the learned Judge in due course. Then an application was made to the learned Judge on behalf of defendants for leave to appear and defend. The application was based upon the ground that the gentleman representing the defendant firm had been away and that he had sent a telegram which was not delivered to his attorney in the way it had been sent, and that through that mistake the attorney understood that he had no instructions to defend, whereas, as a matter of fact, the defendant had given instructions to his attorney to appear; and the result was that no steps were taken to defend the suit. The learned Judge having refused the defendants leave to appear, proceed -ed to give judgment for the plaintiffs without hearing any. evidence, for the full amount claimed; and the question which has been raised in this appeal is, whether the learned Judge was entitled so to do.

2. Now, I am of opinion, inspite of the ingenious and able argument which has been addressed to us by Mr. Buckland on behalf of the plaintiffs, that the learned Judge had no jurisdiction to make the decree which he in fact did.

3. The fundamental principle is that the plaintiff, when he comes to Court, must prove his case, and he must prove it to the satisfaction of the Court. There are certain rules, made under the powers of the Civil Procedure Code, expressly limited to certain cases in which proof, in the ordinary sense of the word, by the plaintiff of his case is dispensed with, and those rules are contained in Order XXXVII, Rule 2, of the Civil Procedure Code. That is a rule which is limited to bills of exchange, hundis or promissory notes, and it provides that All suits upon bills of exchange, hundis or promissory notes may, in case the plaintiff desires to proceed hereunder, be instituted by presenting a plaint in the form prescribed; but the summons shall be in Form No. 4 in Appendix B or in such other form as may be from time to time prescribed.' Then it goes on to provide in Clause (2) that 'In any case in which the plaint and summons are in such forms, respectively, the defendant shall not appear or defend the suit unless he obtains leave from a Judge as hereinafter provided so to appear and defend; and, in default of his obtaining such leave or of his appearance and defence in pursuance thereof, the allegations in the plaint shall be deemed to be admitted, and the plaintiff shall be entitled to a decree for any sum not exceeding the sum mentioned in the summons', and so on. Now this rule created an exception to the ordinary fundamental rule to which I have referred; and, in my opinion, one of the reasons why that exception was made was because of the special nature of the documents mentioned in that rule, namely, negotiable instruments such as bills of exchange, hundis or promissory notes. It is a procedure which is somewhat analogous to the procedure under Order III, Rule 6, of the rules which are applicable to England, but it is of a much more limited nature: and, it is only in a case of that limited nature, such as where the plaintiff sues upon bills of exchange, &c.;, and in respect of which he files his verified plaint, and the defendant asks for leave to appear and defend, but fails to obtain it, that the allegations in the plaint shall be deemed to be admitted. As far as I am aware, in the rules which are applicable to this Court there is no other provision under which proof by the plaintiff, in the ordinary course, as we understand it, in support of his claim, can be dispensed with.

4. Reliance was placed by the learned Counsel who argued this case for the plaintiffs, upon two points. He said that there was evidence in this case and that the evidence consisted in the plaint which was verified in accordance with the rules of the Court, and he relied first upon Order VIII, Rule 5.

5. In my judgment Order VIII, Rule 5, does not apply to this case at all. That rule says, ' Every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability: Provided that the Court may in its discretion require any fact...to be proved otherwise than by such admission.' I think it is clear from the wording of that rule that it is only intended to apply to a case where a pleading has been put in by the defendant, and I think the short answer to the learned Counsel's argument on that point is that the rule is not intended to apply to a case where the defendant has not put in a written statement. It should be noted that in this case where the claim is for unliquidated damages, even if a written statement had been put in, it would not have been necessary for the defendants to deny specifically the damages: it would have been quite sufficient if they had pleaded generally to the damages, and in that case even though all other material facts were admitted in the defence, there would still have been the necessity for some enquiry to be made either by the Court which heard the case, or by the Official Referee or some other person to whom the Court might refer the enquiry, to ascertain the amount of damages to which the plaintiffs would be entitled.

6. The other point is that if the learned Counsel was not right in relying on Order VIII, Rule 5, still there was some evidence in the case, because the plaint in itself constituted evidence, inasmuch as it had been verified in accordance with the rules of the Court.

7. Speaking for myself, I am not prepared to accede to that argument. First of all, I think the rule is that the plaintiff must give the best evidence he can; and, if the plaintiff were alive and could come to Court, it would be necessary for him to prove his case by producing evidence in the ordinary and well-recognised way, and I should have thought that the Court would not be justified in allowing the plaint to be put in as evidence of the facts on which he wished to rely. It is to be pointed out that the plaint is not verified by an affidavit: it is simply verified either by the signature of the party or parties or by some person who is authorised to verify on his or their behalf. But it is said by Mr. Buckland that Section 191 of the Indian Penal Code shows that the plaint ought to be considered as evidence in the case; and there it was that I think he showed considerable ingenuity in advancing the argument which he did in favour of the plaintiffs. I am bound to say that I do not think that the argument is a good one, and for this reason. The point is, that the plaint is evidence because it is to be verified in accordance with the rules. If we look at Section 191 of the Indian Penal Code, we find this: 'Whoever...being bound by law to make a declaration upon any subject, makes any statement which is false, and which he either knows or believes to be false, or does not believe to be true, is said to give false evidence.' Therefore he argues that inasmuch as the plaintiff, if he verified a statement in his plaint which he either knew or believed to be false, might be proceeded against under Section 193, because he would have been taken to have given false evidence, his plaint ought to be considered as evidence in the case. The answer to that is this. I think that the object of the Legislature is pretty clear. First of all the object of the rule insisting upon the verification of the plaint is clear, namely, that it was thought desirable to insist upon some guarantee that a false or totally trivial claim should not be put before the Court. There would be no such guarantee by simply requiring a man to make a verification of the claim, unless there was some sanction. Mr, Buckland says that the sanction is Section 191. I think it is clear that Section 191 was framed in the way in which it stands for this reason. It was the obvious intention of the Legislature to bring such a case, namely, the verification of statements in the pleadings by a person who knew them to be untrue, within Section 193. Section 193 deals with the case of a man intentionally giving false evidence and the method the Legislature employed for bringing such case as I have referred to, within Section 193 was to say that if a man, being bound by law to make a declaration upon any subject, makes any statement which is false to his knowledge he shall be deemed to give false evidence. The words are, he is said to give false evidence,' and those words are employed simply for the purpose of bringing the case within Section 193, and for no other purpose With great deference to the learned Counsel, I think it would be unreasonable to conclude from that section that it was ever intended that a plaint which has got the usual verification by the plaintiff could be adopted by a Court of Justice as sufficient proof of the facts which are contained in the plaint.

8. Therefore, I am of opinion that the two grounds upon which the learned Counsel has relied cannot be upheld.

9. Before I conclude my judgment, I would like to say one word, from the general point of view. Of course, if we had found in the rules or in the Statutes any provision giving the learned Judge a jurisdiction to deal with the case in the way he has done, we should have been bound to follow it. But I cannot myself help saying that it would be undesirable if a suit such as this were adjudicated upon without any evidence in the real sense of the word given by the plaintiff, where claim is for unli undated damages. The learned Counsel, in the course of his argument when I put the question to him, had to admit that in a very large number of cases where the claim is for unliquidated damages, the damages are inflated. It may be that in some cases they are intentionally inflated, but in most cases they are quite unintentionally inflated. The question of the proper measure of damages is one of the most difficult questions that a Court of Justice has to deal with and in many cases of unliquidated damages, the amount which is put in the statement of claim is found to be wrong when the case comes to be investigated, and the amount of damages to which the plaintiff is actually entitled is different from that which the plaintiff has inserted in his plaint. Therefore, it shows the desirability and necessity in such cases, when the defendant does not appear, that the plaintiff should be called upon to prove all the material facts which are necessary for the proof of his case, that is, not only the cause of action upon which he relies but also the actual amount of damages which he has in fact sustained, I think that if this course is not pursued, injustice may be done.

10. The appeal is, therefore, allowed.

11. With regard to costs of the appeal I do not see any reason for interfering with the ordinary rule that costs should follow the event. Therefore, the appeal is allowed with costs.

12. The facts upon which the defendants rely have been verified by an affidavit, and the learned Counsel for the plaintiffs frankly admitted that he had no reason to suppose that they were not as stated in the affidavit.

13. Therefore, I think that this case should be remanded for hearing and that the defendants should have leave to put in a written statement of defence, and to call such evidence as they may think desirable, in support of their case. With regard to the costs of the application for stay of execution, in my judgment each party should pay his own costs.

Woodroffe, J.

14. In my opinion, no decree can legally be given in any case without evidence except in cases of suits governed by the provisions of Order XXXVII of the Civil Procedure Code. According to Rule 2, Sub-rule 2, of that Order in default of obtaining leave to appear and defend or of appearance and defence in pursuance thereof, the allegations in the plaint shall he deemed to be admitted, and the plaintiff shall be entitled to a decree for any sum not exceeding the sum mentioned in the summons. This, in my opinion, is strong evidence of the intention of the Legislature that it is only in such cases that the allegations in the plaint should be deemed to be admitted and amount to proof on which a decree may be founded when there is no written statement and the defendant does not appear.

15. The procedure in this country is not that which prevails in England. In my experience the practice sought to be upheld by the respondents has not hitherto prevailed in this Court where it has always been the practice in undefended cases to take evidence as defined in the Evidence Act, viz., oral statements of witnesses and documents proved before the Court. The cursus curix may be looked at when interpreting the terms of the Civil Procedure Code. There is, in my opinion, nothing in the decision [Galstaun v. Hutchison 15 Ind. Cas. 279 : 39 C. 789 : C.W.N. 945], to which I was a party and in which judgment was also delivered by the late Chief Justice, which justifies the contention which has been advanced by the respondent before us. In this case the plaintiff gave evidence and proved his claim but a question of stamp arose. The defendant entered appearance but did not file a written statement. The Code, however, is clear. The case does not fall under Order XXXV 11; for the suit was based upon an alleged breach of contract claiming unliquidated damages.

16. The decree has been sought to be justified by an application of Rule 5, Order VIII of the Civil Procedure Code, and by the argument that verification of pleadings dispenses with evidence. As all pleadings in this Court are verified this latter contention is simply a re-statement of the argument that a decree can be given on pleadings without evidence in undefended cases. This contention is a novel one. Verification does not, in my opinion, dispense with evidence. But it is merely a form of giving authenticity to the pleadings. The object of the verification of the plaint is to fix on the plaintiff the responsibility for the statements which it contains and to afford a guarante of his good faith. See the case of Basdeo v. John Smidt 22 A. 55 at p. 60 : A.W.N. (1899) 172. Verification in my opinio is not evidence on which a suit can be decreed, whether the adversary does or does not appear. Because a false verification may be the basis of a prosecution unde Section 193 of the Penal Code and comes with' in the definition of 'false evidence' for the purposes of the Penal Code, it does no make a verification evidence on which a decree can be founded in a civil suit.

17. Moreover, for evidence on which a decree can be founded in a civil suit under Order XIX of the Code the Court may allow facts to be proved by affidavit, but the Code expressly stipulates that the affidavit must be confined to facts within the personal knowledge of the deponent, except in cases of interlocutory applications on which he is permitted to speak to his own belief. This knowledge, by no means always exists in the case of verification of pleadings; and the present case is an illustration in point--the plaint having been verified by the attorney of the plaintiffs who states that the allegations in the plaint are based on information received by him and believed by him to be true.

18. It is then said that under Order VIII, Rule 5, this procedure can be justified. This rule, in my opinion, has obviously no application. Order VIII is headed, as appears from the title of the Chapter, 'Written statement and set-off,' and the rule assumes existence of a pleading of the defendant; for it states 'that every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be. not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability.' This section is really a rule of construction of the defendant's pleading. It cannot be said that a fact is admitted until one looks at the written statement. This rule does not apply where there is no written statement at all. The law says, as a rule of construction, that if there is a written statement and the fact as alleged in the plaint is not denied, then the written statement must be so construed as to be taken to have admit-teA such allegation. The rule does not, in my opinion, justify the passing of a decree on no evidence where there is no written statement.

19. Under Order IX, Rule 6, where the plaintiff appears and the defendant does not appear when the suit is called on for hearing, then if it is proved that the summons was duly served the Court may proceed ex parte, 'Proceed ex parte' means 'proceed to take and determine evidence' and 'this is what the summons in the suit says. The summons does not say that on failure to appear the plaintiff is entitled to a judgment by default, but on the defendant's failure to appear the case will be heard and determined ex pane, that is, in his absence by the taking of evidence.

20. In my opinion, the decree having been made without evidence cannot be supported. As the plaintiff did not tender any evidence, strictly speaking the suit should be dismissed. But Mr. Langford James, who appears on behalf of the appellants, does not insist on this or contend that we have no power to remand. So I need not discuss this question.

21. The decree will, therefore, be set aside and the case will be remanded in order to be re-heard after giving the defendants an opportunity of filing a written statement and of adducing evidence. The circumstances on which reliance is placed as entitling the defendants to defend the suit are not contested.

22. In my opinion the appellant is entitled to his costs of this appeal.

Mookerjee, J.

23. I am clearly of opinion that there has been no trial of this suit in conformity with the procedure prescribed by the Legislature, and that the decree in favour of the plaintiffs cannot possibly be supported. Mr. Buckland, who has made a strenuous endeavour to support the decision under appeal, has conceded that the procedure adopted for the trial of this suit is novel; but he has argued that novelty did not necessarily indicate departure from law. This may be conceded. But when recourse is had to a novel procedure, which has escaped the attention of generations of Judges, if the legality of the procedure is called in question, the matter undoubtedly deserves careful scrutiny.

24. The very brief history of this litigation which involves a sum of over Its. 17,000, may be stated in a few words. On the 24th January 1916, the plaintiffs lodged the plaint in this Court for recovery of Its. 17,578-13-8 from the defendants as liquidated damages for breach of a contract alleged to have been made on the 21st December 1914. Summons is said to have been served upon one of the partners of the defendant firm on the 10th February 1916. The suit came on for trial on the 13th March 1916. Up to that stage, the defendants had not entered appearance or filed a written statement; but Mr. Gregory appeared on that day on their behalf and asked for leave to defend. Leave was peremptorily refused. The plaintiffs, however, did not adduce any evidence; and the following order was thereupon recorded: 'Judgment for the amount claimed, 6 per cent, on decree. Costs on scale No. 1.' We are now invited to set aside this decree as not founded on any legal evidence.

25. It is an elementary principle, which forms the basis of all legal procedure, that no litigant is entitled to obtain relief from a Court of Justice unless he establishes to the satisfaction of the Court that his claim is well founded. Tested in the light of this principle, how does the claim of the plaintiffs stand? They examined no witnesses; how did they then profess to have established their claim to the satisfaction of the Trial Judge? The judgment itself does not throw any light on this point. But Mr. Buckland has invoked the assistance of two doctrines, viz., first, the principle of admission by non-traverse, and, secondly, the principle that allegations in a plaint duly verified form legal evidence, whereon a judgment may properly be based.

26. As regards the first branch of this contention, the principle invoked is embodied in Rule 5 of Order VIII of the Code of Civil Procedure, and is expressed in these terms: 'Every allegation of fact in the plaint, if not denied specifically or by necessary implication or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted, except as against a person under disability, provided that the Court may in its discretion require any fact so admitted to be proved otherwise than by such admission.' The plain reading of the rule, which is really a rule of construction of pleadings, is that it is limited in its application to cases where there is in fact a pleading of the defendant. Mr. Buckland contended that it was not logical to distinguish between cases where there is a pleading by the defendant and cases where there is no pleading by the defendant. We are not concerned, however, with the question whether the principle embodied in Rule 5, which, I may observe parenthetically, was for the first time introduced into the Code of this country in 1908 [Musammat Anundmoyee Chowdhoorayan v. Sheeb Chunder Roy 9 M.I.A. 287 at pp. 291, 302 : 2 W.R. 19 : 1 Suth. P.C.J. 485 : 1 Sar. P.C.J. 854 : 19 E.R. 750.], can or cannot be defended on logical grounds; we have to apply it as we find it framed by the Legislature, and, in my opinion, its very phraseology shows that it has no application to the present case. Apart from this, the plaintiffs have to overcome an additional difficulty, because Rule 3 lays down that 'it shall not be sufficient for a defendant in his written statement to deny generally the grounds alleged by the plaintiff, but the defendant must deal specifically with each allegation of fact of which he does not admit the truth, except damages.' This rule is based on Order XIX, Rule 17, of the rules of the Supreme Court of England. That rule must be read with Order XXI, Rule 4, which is in these terms: 'No denial or defence shall be necessary as to damages claimed or their amount; but they shall be deemed to be put in issue in all cases, unless expressly admitted.' Although there is no provision in our Code corresponding to Order XXI, Rule 4, of the Rules of the Supreme Court of England, I think we can legitimately put the same construction upon Order VIII, Rule 3, as has been put in England upon Order XIX, Rule 17. That interpretation will be found explained by Mr. Justice Hawkins in the case of Wood v. Earl of Durham 21 Q.B.D. 501 at p. 508 : 57 L.J.Q.B. 547 : 59 L.T. 142 : 37 W.R. 222. It is plain that in the present case, even if the defendants had entered appearance and filed a written statement, it would not have been obligatory upon them to plead specifically as to the amount of damages; and merely because they did not appear, they cannot be in a worse position than what they would have occupied if they had appeared and filed a written statement. I may add that if the contention of the respondents were to prevail, the provisions of Order XXXVII which are applicable to special classes of negotiable instruments,would be entirely superfluous. If what is contended by the respondents is well founded and can be legitimately done in all classes of cases, why should the Legislature provide a special procedure in Order XXXVII? I, therefore, hold without hesitation that the plaintiffs are not entitled to succeed on the basis of implied admission of their claim by the defendants.

27. As regards the second branch of the contention, it has been argued that as the plaint was duly verified, all the allegations therein must be deemed to be evidence in favour of the plaintiffs against the defendants and should be treated as material for the basis of the judgment of the Court. In support of this contention, reliance has been placed upon the decision of the Allahabad High Court in the case of Queen-Empress v. Mehrban Singh 6 A. 626. In my opinion, that argument rests on no solid foundation. A comparison of the terms of Sections 191 and 193 of the Indian Penal Code shows that a person who makes a false affidavit is deemed to give false evidence, in order that he may be punished under Section 193 of the Indian Penal Code. Indeed, the inference may be legitimately drawn from the language used in Section 191 read with Section 193 that a verified statement would not be evidence' but for the special provision of Section 191 which has been enacted for a special purpose.

28. In this connection, reference may usefully be made to the procedure prescribed by the Legislature for the trial of a suit in which the defendant does not appear. Order IX, Rule 6, lays down that 'where the plaintiff appears and the defendant does not appear when the suit is called on for hearing then, if it is proved that the summons was duly served the Court may proceed ex parte.' The next stage is described in Order XVIII, Rule 2, which lays down that 'on the day fixed for hearing of the suit or on any other day to which the hearing is adjourned, the party having the right to begin shall state his case and produce his evidence in support of the issues which he is bound to prove.' If the contention of the respondents were well founded, the Legislature would no doubt have stated that where the defendant has not appeared, the case may be decreed on the basis of the allegation made in the verified plaint. Reference has been made in the course of argument to the decision of the Allahabad High Court in Basdeo v. John Smidt 22 A. 55 at p. 60 : A.W.N. (1899) 172, which explains the value and object of verification. 1 hat certainly does not support the contention of the respondents. A verification is required with a view to discourage, if not to prevent, the institution of false suits; the Legislature never contemplated that verified statements should be treated as evidence on behalf of the plaintiff against the defendant. This view is confirmed on an examination of the provisions of the Code as to the use of affidavits in evidence. Order XIX defines the circumstances in which affidavits may be used as evidence and specifies the limitations subject to which this is permissible. If the contention of the respondents were to prevail, the provisions of Order XIX would be superfluous. It is worthy of note that Section 9, Sub-section 2, of the Code of Civil Procedure allows an appeal from an original decree passed ex parte: it is difficult to conceive how such an appeal can be of any assistance to the defendant, if there is no evidence on the record.

29. Reference has also been made to Section 47 of the Divorce Act, which, I should have thought, was against the view put forward by the respondents. If a verified plaint could always be treated as evidence, it was superfluous to make a special prevision in the Divorce Act.

30. In my judgment, there is no possible escape from the conclusion that there is no legal evidence on the record on which the decree made in favour of the plaintiffs may be supported.

31. The question next arises, what course should now be pursued. Mr. Langford James, in my opinion, would have been perfectly justified if he had seriously pressed his contention that, as the plaintiffs are not shown to have offered or, indeed, to have been even ready with any evidence in the Trial Court, the appeal should be allowed and the suit should stand dismissed. I am reluctant, however, to adopt this course, on the present occasion, for I feel doubtful how far the conduct of the plaintiffs might or might not have been affected by the novel procedure, which, we were informed in the course of the argument, was adopted in the Trial Court. That we are entitled to remand the case for trial, is, I think, obvious. Section 564 of the Civil Procedure Code of 1882, which provided that the Appellate Court shall not remand a case for a second decision except as provided in Section 562, does not re-appear in the Code of 1908. Consequently, although there is a provision in the Code for remand in certain specified circumstances, it cannot legitimately be contended that our powers are restricted thereby and that we cannot make an order of remand if the exigencies of the case demand that such an order should be made, I am also of opinion that on remand, the defendants should have an opportunity to file a written statement; no useful purpose will be gained if this matter is left open.

32. I desire to add, finally, that great caution should be exercised when suits are heard ex parte. This observation is, in my opinion, of universal application: Amritnath v. Dhunpat Singh 8 B.L.R. 44 : 15 W.R. 503. But it applies with special force to cases of the description now before us, where unliquidated damages are claimed on the allegation that there has been a breach of contract. I entirely agree with the Chief Justice in the weighty observations he has made as to the exaggerated claims usually put forward in cases of this character, and the necessity for careful scrutiny into all such claims, before a decree is made in favour of the plaintiffs.

33. On these grounds I concur in the view that this appeal must be allowed with costs, the decree made by Mr. Justice Fletcher reversed and the case remanded for trial.


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