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Oriental Bank of Commerce Vs. Sri Mohan Gupta - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtDelhi High Court
Decided On
Case NumberRFA (OS) 121 of 1998
Judge
ActsCode of Civil Procedure (CPC) - Orders 34, 7, 6 Rules 11, 17
AppellantOriental Bank of Commerce
RespondentSri Mohan Gupta
Excerpt:
code of civil procedure (cpc) - order 34 -- loan taken by the defendant resulting in creation of an equitable mortgage. deferring consideration of ia no.9038/1994 but proceeding to consider ia no.6832/1994, vide impugned order dated 11.12.1997 the learned single judge has rejected the plaint by allowing ia no.6832/1994. as regards the mortgage, learned single judge has held that since the defendant had not defaulted on the terms of the mortgage, no cause of action had accrued to enforce the mortgage. we dismiss ia no.6831/1994......matter of the suit embraced:-a. sums allegedly defalcated by the defendants causing loss to the bank.b. loan taken by the defendant resulting in creation of an equitable mortgage.c. loan taken for purchase of a maruti car.8. it is apparent that the mortgaged suit filed under order 34 of the code of civil procedure could not embrace claims pertaining to the alleged sums defalcated and the outstanding loan amount pertaining to the maruti car in question.9. the respondent filed ia no.6832/1994 under order 7 rule 11 praying that the plaint be rejected for the reason no cause of action had accrued with respect to enforcement of the claim for mortgage. he pleaded that the monthly installments payable as per the mortgage were being deducted from his salary and there being no default in.....
Judgment:

1. Suit No.550/1994 filed by the appellant against the respondent was under Order 34 of the Code of Civil Procedure.

2. The prayer made in the suit was to pass a preliminary decree in sum of `18,26,014.22 with pendente lite and future interest @ 19.5% per annum with quarterly rest and upon failure to pay the decretal amount within the time stipulated, to sell the mortgaged property.

3. In the plaint it was averred that the defendant was an officer in the Establishment Department at the Head Office of the appellant and amongst others, was entrusted with the duty of clearing vouchers pertaining to travelling allowance, medical bills of the employees. It was further pleaded that the defendant was a Class-A Power of Attorney Holder of the Bank and was authorized to issue transfer payment orders and cheques.

4. It was alleged that the respondent devised ways and means to cheat the bank and cause illegal loss to the bank. He made interpolations in the record of the bank. He opened fictitious accounts and credited money therein after debiting the same amount from the general account of the bank. Averments were made pertaining to the modus oprendi adopted by the defendant to embezzle reimbursement towards travelling, medical and hospital charges statedly incurred by the employees.

5. Giving details of the fictitious accounts opened, amounts, deposited and surreptitiously withdrawn, it was averred that the defendant purchased Plot No.230, Block M, Bodella Residential Scheme and for which he was advanced a loan to purchase the land and effect construction thereon and that the said loan transaction was secured by way of equitable mortgage created by the defendant in favour of the bank.

6. Averments were thereafter made to a personal loan taken by the defendant to purchase a Maruti Car.

7. Suffice would it be to state that the subject matter of the suit embraced:-

A. Sums allegedly defalcated by the defendants causing loss to the bank.

B. Loan taken by the defendant resulting in creation of an equitable mortgage.

C. Loan taken for purchase of a Maruti Car.

8. It is apparent that the mortgaged suit filed under Order 34 of the Code of Civil Procedure could not embrace claims pertaining to the alleged sums defalcated and the outstanding loan amount pertaining to the Maruti Car in question.

9. The respondent filed IA No.6832/1994 under Order 7 Rule 11 praying that the plaint be rejected for the reason no cause of action had accrued with respect to enforcement of the claim for mortgage. He pleaded that the monthly installments payable as per the mortgage were being deducted from his salary and there being no default in repayment of the mortgaged loan, the mortgage could not be enforced.

10. Realizing that an ill-drafted plaint had resulted in a problem being created, the appellant filed IA No.9038/1994 under Order 6 Rule 17 CPC praying that the suit be converted into an ordinary money recovery suit and for which consequential amendments by way of pleadings in the plaint were proposed.

11. Deferring consideration of IA No.9038/1994 but proceeding to consider IA No.6832/1994, vide impugned order dated 11.12.1997 the learned Single Judge has rejected the plaint by allowing IA No.6832/1994.

12. Since the plaint was rejected, without considering on merits, IA No.9038/1994 has been dismissed.

13. The reasoning of the learned Single Judge is that a suit under Order 34 cannot embrace issues of alleged embezzlement by the defendant or recovery of the car loan amount. As regards the mortgage, learned Single Judge has held that since the defendant had not defaulted on the terms of the mortgage, no cause of action had accrued to enforce the mortgage.

14. Learned counsel for the appellant concedes that the suit was premature, and indeed no cause of action had accrued, to enforce the mortgage. The defendant was repaying the monthly installments payable under the deed of mortgage and for which the bank was deducting the amount due from the salary payable each month.

15. However, counsel states that as regards the claim for amounts defalcated by the defendant and recovery of the car loan amount the learned Single Judge ought to have first considered IA No.9038/1994. If amendments were allowed, the cause on which IA No.6832/1994 was predicated would have ceased to exist.

16. Counsel cites AIR 2003 SC 189 Salem Advocate Bar Association Tamil Nadu Vs. Union of India to bring home the point that where an application has been filed under Order 7 Rule 11 for rejection of the plaint, an opportunity should be granted to the plaintiff to take corrective action.

17. In para 16 of the decision cited it has been observed as under:-

"Our attention has been drawn to Order 7, Rule 11 to which clause (e) and (f) have been added which enable the Court to reject the plaint where it is not filed in duplicate or where the plaintiff fails to comply with the provisions of Rule 9 or Order 7. It appears to us that the said calluses being procedural would not require the automatic rejection of the plaint at the first instance. If there is any defect as contemplated by Rule 11(e) or non-compliance as referred to in Rule 11(f), the Court should ordinarily give an opportunity for rectifying the defects, and in the event of the same not being done the Court will have the liberty or the right to reject the plaint."

18. It is not doubt true that the passage quoted hereinabove pertains to clause (e) and clause (f) which were inserted in Rule 11 of Order 7 by way of Act No.22 of 2002 and relate to procedures i.e. filing of a plaint in duplicate or failure to comply with the provisions of Rule 9 of Order 7 CPC, but the principle laid down guides us that where a multifarious cause of action is pleaded in a plaint and qua one of the multifarious causes it surfaces that the cause of action has not accrued, when plaintiff seeks to amend the plaint to give up said cause, said application needs to be considered and not that the plaint be rejected first; leaving the plaintiff without a remedy.

19. We allow the appeal and set aside the impugned order dated 11.12.1997.

20. We dismiss IA No.6831/1994.

21. We restore Suit No.50/1994 as also IA No.9038/1994 for fresh adjudication.

22. At this stage we note that the claim in the suit is to pass decree in sum of `18,26,201.22 with pendente lite and future interest. Thus keeping in view the current pecuniary jurisdictions we issue a direction to the Registry that the suit which would be treated as having been revived as a consequence of the order passed by us would be transmitted to the learned District and Sessions Judge Delhi who would assign the same to a Court having competent jurisdiction.

23. The Court to which the suit is assigned would proceed to issue a notice to the defendant before proceeding ahead with the suit.

24. No costs.

25. Dasti.


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