9911796707
TMI Blog1991 (2) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the meaning of the Companies Act, 1956. On the request of defendants No. 1 to 5, the plaintiff on 26-6-1979 established an irrevocable Letter of Credit for US $6,10,900/- (equivalent to about ₹ 50,00,000/-) for import of PVC Resins in favor of one M/s. Bentrex and Co., Singapore. This Letter of Credit was expressly made subject to the terms of Uniform Customs and Practice for Documentary Credits (1974 Revision), International Chamber of Commerce Publication No. 290. Negotiation of the documents under the Letter of Credit was permitted through any bank at Singapore. It was also provided in the said Letter of Credit that the negotiating bank was to claim reimbursement from the New York Branch of the Plaintiff. Such reimbursement, however, was required to be made with the certificate of the negotiating bank that the terms of the credit had been fulfillled. The beneficiaries M / s. Bentrex and Company drew a Singh Draft for an amount of US $6,10,74O.00 on 1-9-1979 and presented the same with other documents to defendant No. 6 at Singapore, being their bankers, for negotiation. On 4-9-1979, defendant No.6, after negotiating the said documents, dispatched the original and dup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1% per annum from 5-9-79 till 30-8-82 ₹ 41,93,114.23 Total ₹ 91,58.48O.08 3. In the alternative to the interest, plaintiff also claimed a sum of ₹ 41,93,114.23 as damages as mentioned in the plaint. The plaintiff, therefore, wanted a decree against defendant No. 6 and in the alternative against defendants No. 1 to 5. 4. Defendant No. 6 for the first time was represented on 16-11-1982 by Mr. Ashok Sagar, Advocate. Thereafter Mr. T. M. Ansari appeared for this defendant. The plaintiff filed an application (I.A.3199/82) u/S. 20(b) of the Code seeking leave of the court to file the suit against defendant No. 6 in Delhi. This was allowed by order dated 19-4-1983. While the proceedings in the suit were being held by the Deputy Registrar, on none of the hearings before him did any body appear for defendant No. 6, in spite of the fact that dates for filing documents and for admission and denial thereof had been fixed. On 29-4-1985 the suit was directed to be listed in court for framing of issues, for 21-5-1985. On this date again, since nobody appeared for defendant No. 6, proceedings were directed against this defendant ex parte. Issues were framed on 6-8-1985 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether there is sufficient cause for condo nation of delay in filing the application for setting aside the ex parte decree by defendant No. 6? 10. Parties led evidence by means of affidavits. 11. It appears that defendants 1 to 5 were having dealings with the plaintiff bank earlier to the opening of the Letter of Credit in the present suit. Defendants No. 1 to 5 contended that they had deposited with the plaintiff bank title deeds of certain immovable property and also a fixed deposit receipt of the value of ₹ 76,000.00 by way of pledge. This fixed deposit receipt was further pledged in connection with the opening of the Letter of Credit in the present suit. The plaintiff, however, contended that the title deeds of the property and the fixed deposit receipt were all to be kept as security for whatever amount was due to the plaintiff from defendants No. 1 to 5. Then dispute arose in a suit filed by the plaintiff against defendants No. 1 to 5 in the court of District Judge for recovery of an amount of ₹ 51,440.16. This amount was claimed as difference in exchange rate and some interest according thereon. The defendants in that suit wanted return of their securitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these two applications should be taken up for consideration after the decision in the two applications subject matter of the present order, 1, therefore, leave these two applications at that. 15. Defendant No. 6 has filed the affidavits of (1) Mr. Kalam Singh, a court clerk working in the office of the J.B. Dadachanji Co., a firm of lawyers who were engaged by defendant No. 6, to show that he did not notice the case on the daily cause list of the court as no name of the advocate of the firm appeared therein. But this was after Mr. Kalam Singh joined this firm which was in May 1986; (2) Mr. Swapan Kumar Sahoo, Filing Clerk in the office of J. B. Dadachanji Co., who said that since the case was not noticed in the cause list the concerned advocate who was handling the matter was not informed; (3) Mr. Dalip Dwarka Das Udeshi, duly Constituted Attorney of defendant No. 6 and also a partner of the firm M/ s. Crawford Bayley Company, Solicitors and Advocates, Bombay, as to why no enquiry was made on behalf of defendant No. 6 as to the stage/ progress of the suit; and (4) Mr. Ravinder Narain, Advocate and partner of M/ s. J. B. Dadachanji and Co., who said that it was Mr. T. M. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was a court recess from 27-3-1988 to 3-4-1988. Present application (I.A. 1655/88) was immediately filed on 4-4-1988 duly supported by his affidavit and the affidavit of Mr. Ravinder Narain, Mr. Kalam Singh and Mr. Swapan Kumar Sahoo. The application u/ S. 5 of the Limitation Act was also filed the same day. Mr. Udeshi said that prior to the letter dated 7-3-1988 of the Advocates of the plaintiff, defendant No. 6 had no intimation about the passing of the ex parte decree and he said in the firm of M / s. Crawford Bayley Co. this matter was solely looked after by him. He said considering the fact that at earlier stages the suit was being hotly contested by defendant No. 6 it could not be said that there was any intentional non-appearance by defendant No. 6 when the proceedings were taken ex parte or when the ex parte decree was passed against this defendants. He said non-appearance of defendant No. 6 was bona fide and that conduct of the case was left with J. B. Dadachanji Co. Advocates on its behalf and whatever was possible for the conduct of the case by defendant No. 6 it was done, first appointing M / s. Crawford Bayley Co. as the Constituted Attorney and then engaging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit Period of Time from which period begins Limitation to run. 123. To set aside a decree passed Thirty days The date of the decree or where the ex parte or to rehear an appeal summons or notice was not duly decreed or hear ex parte. Served, when the applicant had knowledge of the decree. Explanation:............ In the present case, since the summons of the -suit had been duly served on defendant No. 6 and it had been appearing to defend the suit, the application for setting aside the ex parte decree had to be filed within thirty days of the date of the decree. This not having been done the second application u/ S. 5 of the Limitation Act had been filed pleading sufficient cause for not filing the first application under O. 9, R. 13 of the Code within the period of limitation prescribed. Dr. Ghosh who appeared for the plaintiff submitted that the approach of the court in setting aside ex parte decree may be liberal but once such an application is barred by limitation, plaintiff gets a vested right and ordinarily the decree shall not be set aside unless sufficient cause is proved. He said in case this court comes to the conclusion that the applications are to be all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the normal course as per procedure prescribed. Mr. Gupta referred to various decisions of the Supreme Court and High Courts if a client should suffer on account of the negligence of his lawyer. Mr. Gupta said that in the circumstances of the present case, while setting aside the ex parte judgment and decree, the court should not impose any terms, especially regarding payment of decretal amount into court as that could be done only in exceptional circumstances. He said, it was not defendant No. 6 who wanted to prolong the trial or that its defense in the suit was in any way frivolous. He, however, submitted that in case the ex parte judgment and decree were set aside defendant No. 6 would not press the issue of jurisdiction and would contest the suit on the basis of the issues already framed. Lastly, he said, that continued absence of counsel for defendant No. 6 on all the dates was not quite relevant inasmuch as the counsel was not aware of the dates of hearing even though negligent and had he the notice of hearing then the default in non-appearance continuously would have been rectified. To support has plea that there was sufficient cause for setting aside the ex parte decree, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, therefore, whole of the decree has to be set aside. He said, decree only means an adjudication of the rights of the parties and it does not mean that any formal drawing up of a decree would be necessary. Lastly, Dr. Ghosh said that the decision of a single Judge of this Court in Civil Revision (C.R. No. 556/88) would not be res judicata as defendant No. 6 was not a party in those proceedings. He said provisions of S. 11 of the Code were inapplicable. 24. Mr. Khanna also strongly condemned the conduct of the case by defendant No. 6 and said that absence of the defendant on all the dates of hearing was not only intentional but deliberate as well. He said this was so because defendant No. 6 had no case. He said affidavits filed by defendant No. 6 in support of its case did not at all inspire confidence and they were false to an extent. Mr. Khanna said that no plea was raised that the decree which was in favor of defendants 1to 5 should also be set aside and merely because inconsistent decrees might result was no ground to set aside the whole of the decree. He also said that present proceedings were covered by the judgment of the single Judge of this Court in Civil Revision afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gories. No responsible person in the firm was looking after this case and it was left to be followed up by Court Clerk. No one in the firm appears to have ever checked the progress of the case when various dates were fixed either before the Deputy Registrar or in the Court. No proper diary of case file is shown to have been maintained. The affidavits filed in support of the plea are said to have been filed on the basis of the record, but what is that record, has not been explained. These affidavits, to my mind, are just value less. I do not find any sufficient cause at all explained by defendant No. 6 for its lawyers not to have appeared in court on the dates fixed. But then that is not the end of the matter. The law, as it stands today, is that the negligence of the lawyer appears to be irrelevant and if it is shown that the party has done everything possible for the conduct of the case by engaging a lawyer and giving him instructions, it cannot be denied justice on account of the negligence of its lawyer. Perhaps the law compounds the negligence of the lawyer at the cost of the other party as well. In Rafiq v. Munshilal, , the Supreme Court was considering the question of restora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressions sufficient cause and held that this expression was adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice and that being the life-purpose for the existence of the institution of the Courts. The court laid down six principles of which I find the following principles to be relevant in this case :- 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a case would be decided on merits after hearing the parties. 4.When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice, being done because of a non-deliberate delay. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 28. In the initial stages this case was contested quite vigorously by defendant No. 6, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the court by S. 5. 31. Could a lawyer take his client for a ride on a spacious plea of his negligence, is a question which does not fall for consideration in view of the law as prevailing now. In Rafiq v. Munshi Lai (supra), the Supreme Court directed the imposition of cost to be recovered from Advocate who absented himself. This I will consider at the time of setting the terms for setting, aside the ex parte decree. In one of the cases before me I had occasion to remark though not finally expressed that a lawyer should take up only as many cases which he can reasonably do in the best tradition of the profession. The occasion for this arose when a lawyer for getting an ex parte order set aside filed a statement showing that he had as many as 25 matters listed in various courts. Courts are not commercial institutions dispensing costs. In this case ex parte decree was passed on March 10, 1987 and when now I set aside the decree the clock will be set back for four years. In some cases it may be true that for negligence of a lawyer the party should not suffer, but that cannot be a uniform rule. Party must also suffer for engaging such a lawyer and the party can have its remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.e. defendants No.1 to 5 or defendant No. 6 is liable to the plaintiff and to what extent. The plaintiff further submits that if separate suits are brought against defendants Nos.1 to 5 and defendant No. 6 common question of law and fact would arise and that it has a right to relief against the defendants Nos.1 to 5 or defendant No. 6 in the alternative. The plaintiff has, therefore filed this composite suit as it is entitled to do under O. 1, R. 7 of the Civil Procedure Code. 17. The plaintiff submits that the plaintiffs rights and contentions and remedies against defendants Nos.1 to 5 as herein mentioned and vice-versa. 34. Rule 8 of under: O. 1of the Code is as under:- When plaintiff in doubt from whom redress is to be sought where the plaintiff is in doubt as to the person from whom he is entitled to obtain redress, he may join two or more defendants 1n order that the question as to which of the defendants is liable, and to what extent, may be determined as between all parties. 35. Issue No. 7, framed in the suit, may also be reproduced herein again :- Whether the claim of the plaintiff lies in the alternative, i.e., one against defendant No. 6 and in the al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f read as a whole discloses that the plaintiff will be satisfied with either of the reliefs claimed, he cannot be allowed to appeal, if one of the reliefs is granted. Some of these cases are: Ramesh Chandra Chandiok v. Chuni Lal Sabharwal (dead) by his legal representatives and other, ; Union of india v. Garbhu Sao, ; Sint. Sunder Bai (died) by L. R. Kishorilal v. Anandi Lal died and after him Smt. Mohaniwali AIR 1983 Allahabad 23; Velayudhan Nair Gopalan Nair v. Ayyappan Pillai Madhavan Pillai, ; and Manickam alias Manickavasagam v. Ramaswamy Gounder, 1981 (Vol. 1) Mad LJ 163. In Sakku Bai Ammal v. R. Babu Reddiar, , even the appeal was held to be incompetent where the plaintiff had been granted alternative relief. 4O. Now in collateral proceedings between the plaintiff and defendants 1 to 5 in another suit, a learned single Judge of this Court in Civil Revision No. 556/ 88 decided on August 31, 1989 and relying on the decisions in Ghannu Mal v. Bawa Sant Das, 1939 (Vol. 18) Indian Cases 327, and Radhashyarn Choudhury v. Gourinath Roy , observed that on the application under O. 9, R. 13 of the Code filed by defendant No. 6 the decree qua defendants 1 to 5 could not be set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. The question that arises for consideration is of considerable importance. If the decree has to be set aside against the other defendants as well. Further can it be set aside only as regards those defendants against whom the decree is passed and cannot be set aside respecting those defendants 1n whose favor the decree is, i.e., the suit against them has been dismissed. The arguments of defendants 1 to 5, of course, is that the decree against all or any of the defendants can be set aside only if it is against all or any one of them and if the decree is in favor of any of the defendants 1t cannot be set aside under the proviso to R. 13 of O. 9. To me it appears that would be giving too literal a meaning to the proviso and it unnecessarily that way limits the scope and effect of the proviso which has to be given a meaningful interpretation for the ends of justice. The words as against cannot always be read as against and the words as against can also mean, when compared with . In support of his submission Mr. Khanna relied upon a full bench decision of the Assam High Court in. Khagesh Chandra v. Chandra Kanta Barua AIR 1954 Assam 183. This is a majority judgment. In this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f no narrower interpretation, and when the decree is of such a nature that proper relief cannot be given to the applying defendant without setting aside the decree against other defendants (no matter in what shape it existed), the decree may be set aside as against the other defendants also. 42. In Ghannu Mal v. Bawa Sant Das, 1913 (Vol. 18) Indian Cases 327 (Punjab Chief Court). there were two defendants and suit was dismissed against one defendant and an ex parte decree was passed against the second defendant. This defendant applied for setting aside the ex parte decree against him. The lower court set aside the decree against the first defendant as well. The Punjab Chief Court held that this order was manifestly wrong and prejudicial to the first defendant as the proviso to R. 13 did not apply to the case of a defendant against whom the suit had been dismissed on the merits without appeal by the plaintiff. The report does not show as to in which capacity the two defendants had been sued. In Radhashyam Choudhury v. Gourinath Roy, AIR 940 Cal. 9, the plaintiff had sued four persons for rent. There were two set of defendants, one set comprised of defendants 1 to 3 and the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emaining. The court was, of course, concerned with the case which fell in the third class and the question was whether in such a case the court had jurisdiction to set aside the decree passed in favor of some defendants on merits, while setting aside the ex parte decree passed against the other defendants. After dealing with two earlier cases of the court which took different views and also considering the full bench Assam case and other cases, the Court observed as under (at page 808; 1969 ALJ:- We agree with the view taken in these cases that the proviso to O. IX, R.13 does not empower the court to set aside a decree dismissing the suit on merits against a defendant, on an application under O. IV, R. 13 by another defendant against whom the decree has been passed ex parte. Further, on the facts of the case before us, it is clear that, though on paper, the decree passed by the trial court is one decree, in substance, it amounts to two decrees one in favor of defendants 1 to 5 and the other against defendants Nos. 6 and 7. The reliefs, which the plaintiffs prayed for against these two sets of defendants, were separate and distinct reliefs. There can be no difficulty in setting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view that ordinarily an ex parte decree can, and should, be set aside only against the defendant applying. But if a decree is indivisible, or where the liabilities of the defendants as set out in the plaint are not separable, the decree in view of the proviso to O. IX, R. 13, CPC. may be set aside in to and not in part. This bench decision of the court, it appears, was not referred to in the case of Ziley Singh v. Munshi, (1969 All LJ 804). There are other cases, which are cited at the bar wherein it was held that if the decree was one and indivisible it might be set aside against the order defendants also notwithstanding that the suit had been dismissed against such other defendants on merits. I will, however, refer to one such case and that is of the Bombay High Court in Vasant Jaiwantrao Mahajan v. Tukaram Mahadaji Patil AIR 1960 Bom. 485. In this case the court observed that the proviso to O. 9, R. 13 contemplated cases where the decree was of such a nature that it could not, be set aside against one defendant only and that it was the nature of the decree that was the determining factor and not the reasons behind the decree. The court held as under (at page Bom. 487; AIR 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is held that defendant No. 6 failed to perform its functions well and did not observe due care in negotiating the documents submitted by the beneficiary, then in that case defendant No. 6 might not be discharged from its liability. Moreover, Issue No. I related to the question whether defendant No. 6 complied with the terms of the Letter of Credit and Issue No. 2 related to the question whether defendant No. 1 wrongly failed to retire the documents presented to the plaintiff. If reference is made to the findings of the judgment now sought to be set aside, the court observed that for the reasons recorded first issue was decided in favor of the plaintiff and at the same time held on issue No. 2 that in view of the decision of issue No. 1 defendants 1 to 5 were justified in refusing to retire the documents. To my mind this is one indivisible finding, namely, that since defendant No. 6 is liable, therefore, defendants 1 to 5 are not liable. There is substance in the argument of Dr. Ghosn that this indivisible finding would be decree is defined in S. 2(2) of the Code. I have already held that suit in the alternative is maintainable and plaintiff could not have filed a n appeal against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant No. 6. I do not think I should order that cost should be recovered from the counsel for defendant No. 6 as done by the Supreme Court in Rafiq v. Munshi Lal (supra). This will be for defendant No. 6 and its counsel to decide as to who bears the cost. 5O. As noted somewhere above, as of today the decretal amount would be over ₹ 1.50 crores and now that judgment and decree is being set aside the clock will be set back by almost five years. I, therefore, impose cost of ₹ 25,000/- on defendant No. 6, this being conditional, out of which ₹ 15,000/- shall be payable to the plaintiff and ₹ 10,000/ - to defendants 1 to 5. I further direct that the trial will henceforth proceed from the stage of framing of issues. No further issue on the preliminary objections raised by defendant No. 6 in his written statement shall be allowed. In fact it was conceded by Mr. Gupta that suit may be tried on the basis of the issues already framed. Defendant No. 6 has raised a preliminary objection that suit is barred by limitation without, however, giving any particulars as to how it is so. This objection is, therefore, overruled. Trial will proceed with utmost expedition. 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