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1944 DIGILAW 117 (CAL)

Provash Chandra Dutta v. Santhal Pargana Electric Supply Corporation Ltd.

1944-05-30

body1944
JUDGMENT 1. The Court: This is an appeal from an order of Edgley, J., dismissing a suit pursuant to r. 35 of Ch. X of the Original Side Rules of this Court. The Plaintiff is the Appellant and is a director of the 1st Defendant company. In the suit he purports to sue on his own behalf and on behalf of all the share-holders of the Company, except four of the Defendants who are also directors of the company. 2. The suit was instituted on September 25, 1940. The reliefs sought are: to restrain the Defendants, which would mean both the Defendant company and the other Defendants including the director Defendants, from holding or allowing to be held a meeting of the share-holders fixed for September 30, 1940; and to direct the Defendant Company to hold a meeting of the share-holders after compliance with the provisions of the Indian Companies Act and the company's Articles of Association. 3. In para. 10 of the plaint it is alleged that the 2nd, 3rd, 4th and 5th Defendants, who are directors of the company had signed a report in which it was falsely and fraudulently stated that some of the other directors did not sign without assigning any reason, and, in para. 11, allegations of fraudulent suppression are made out. 4. on December 21, 1940, the Defendants' 1935). (2) 46 O. W. N. 653 (19-12). written statement was filed. Since that date the Plaintiff has taken no step whatever to prosecute the suit. 4. On August 12, 1943, this Court gave not to the Plaintiff pursuant to r. 35 of Ch. 10 of the Original Side Rules, the terms of which are hereunder given. 5. On August 19 following, the matter came before Edgley, J. There was no affidavit filed on behalf of the Plaintiff explaining why he had taken no step to procecute the suit but Learned Counsel, apearing on his be half, stated that the Plaintiff was then ready to proceed to trial. Nevertheless Edgley, J., directed the suit to be dismissed. This appeal is against the learned Judge's order of dismissal. R. 35 of Ch. Nevertheless Edgley, J., directed the suit to be dismissed. This appeal is against the learned Judge's order of dismissal. R. 35 of Ch. X provides as follows: Suits and proceedings which have not appeared in the Prospective List within six months from the date of institution, may be placed before a Judge in Chambers, on notice to the parties or their attorneys, to be dismissed for default, unless good cause is shown to the contrary, or be otherwise dealt with as the Judge may think proper. Pursuant to this rule the Court gave notice to the Plaintiff that there had been default within the contemplation of the rule, and a week later the suit having been posted before Edgley, J., he directed its dismissal. 6. There must have been ample time, during the week intervening between receipt of the notice and the suit appearing in the list, for an affidavit to have been filed, either by the Plaintiff, or by some gentleman who could properly testify on his behalf, giving the reasons why no step had been taken by the Plaintiff for a period approaching three years. No such affidavit was filed. 7. It has been pointed out that, amongst other allegations in the plaint, there are charges of fraud against directors of a public limited liability company which charges, and his claims in the suit, the Plaintiff took no step to have tried during a period approaching nearly three years. 8. On behalf of the Appellant it was strenuously argued that unless his conduct amounts to an abuse of the process of the court, or unless it is in the public interest that the suit should not be tried and, conversely, that it is in the interest of the public that the suit should be tried, therefore, the order of dismissal should be set aside. 9. Reference was made to two decisions- one by the Judicial Committee on appeal from this Court, the other by the Appellate court in an appeal from the Original Side of this Court. 10. In Kumar Srinivas Prasad Singh v. Keshava Prasad Singh L. R. 63 I. A. 12: s. c. 40 C. W. N. 321 (1935) a suit for a long time had been pending and the Plaintiff took no step to bring it on for hearing. 10. In Kumar Srinivas Prasad Singh v. Keshava Prasad Singh L. R. 63 I. A. 12: s. c. 40 C. W. N. 321 (1935) a suit for a long time had been pending and the Plaintiff took no step to bring it on for hearing. Upon the matter coming before a Judge sitting on the Original Side he directed its dismissal pursuant to r. 36, which corresponds to r. 35 of Ch. X. His decision was upheld by the Appellate Court. The matter then proceeded to the Judicial Committee. In that case large interests were involved and considerable sums of money had been utilised towards the costs already incurred. In the course of the judgment, which was delivered by Lord Thankerton, it was observed, at p. 22, as follows: Rule 36 is mainly conceived in the public interest as the Defendants will usually be able to force progress under r. 7. Every litigant has the right to have his case heard and disposed of, but that right must not be abused, even though the Defendant, for reasons of his own, is not anxious to complain of the Plaintiff's delay. But the Court is not entitled to deprive the litigant of this right, except on clearly ascertained grounds, and to the exclusion of grounds which rest only on suspicion. 11. In the present suit the Defendants did not cause it to be placed in the Prospective List hut their Lordships of the Privy Council did not express the opinion that the omission of a Defendant to take steps to have a suit brought to trial is a ground which entitles a Plaintiff to avoid an order of dismissal or to have such order set aside. A Defendant frequently is well-advised-as it has been (said-"to let sleeping dogs lie." A Plaintiff should prosecute his suit with proper diligence and, if he genuinely wishes to have it tried, he takes the necessary steps for it to be done. It is not the paramount duty of a Defendant to do this. A Defendant frequently is well-advised-as it has been (said-"to let sleeping dogs lie." A Plaintiff should prosecute his suit with proper diligence and, if he genuinely wishes to have it tried, he takes the necessary steps for it to be done. It is not the paramount duty of a Defendant to do this. At page 25 of the report their Lordship further observed: In view of the nature and history of the case, and the large amount of costs already incurred, along with the Appellant's readiness to proceed forthwith to trial, their Lordships do not think that the public interest is sufficiently involved to lead to the deprival of the v Appellant's right as a litigant, and they are of opinion that he should be allowed to proceed, bat on terms as to the period within which he is to have the suit entered on the Prospective List, failing which the suit will be dismissed. 12. The other authority upon which Mr. Banerjee, on behalf of the Appellant, relied is Dawoodayal Kothari v. Shibnath Roy Burman 46 C. W. N. 663 (1942). In that case there was considerable lethargic conduct on the part of the Plaintiff and, as a consequence, the suit was placed in the Special List after notice had been given by the Court, pursuant to r. 35 of Ch. X. Upon the suit coming before the learned Judge sitting in Chambears it was dismissed. Unlike in the present case, the dismissal was followed up by an application in review to the learned Judge to restore the suit which was supported by an affidavit giving an explanation for the Plaintiff's delay. The learned Judge dismissed the application and refused to reinstate the suit. An appeal was preferred from the order of refusal. In the course of his judgment, Derbyshire, C. J., at p. 655, observed as follows: At the same time it is a most serious matter in a country which is governed by the rule of law to deny one of His Majesty's subjects the right of prosecuting his claim according to law, and that is what a dismissal in this case means. Later the learned Chief Justice observed: I hesitate to lay down any rule and I doubt whether any rule can be laid down except perhaps this that before a Court, under this rule, deprives a litigant of his right to prosecute his claim, the Court should be satisfied that to do otherwise would be to permit an abuse of the process of the Court But I do not say that that is exhaustive. One test as to whether there is an abuse of the process of the Court is to challenge the hesitating or laggard Plaintiff to Bet down his case at once and proceed according to the rules. Here the Plaintiff offered to do BO, but only of coarse when summoned by the Court. 13. The learned Chief Justice then expressed the opinion that, in that case, the order of dismissal should be set aside and the suit set down for trial. 14. Before proceeding further I desire to refer to one further observation of the Judicial Committee in Kumar Srinivas Prosad Singh's case L. R. 63 I. A 12: s. c. 40 C. W. N. 321 (1935) case. This appears at p. 19 of the report and is as follows: It is clear that the appellant must satisfy this Board that both the Courts below have failed to exercise their discretion properly. Unless the Appellant succeeds in [that task, this Board will not be willing to disturb the conclusions of the Courts below. 15. In the present appeal, therefore, unless it is shown that Edgley, J., wrongly exercised the discretion vested in him or failed to exercise it properly, this Court should not interfere with the order which the learned Judge made. 16. The present suit was filed on 25th September, 1940. Except for an interlocutory application issued on 27th September 1940 and which received disposal on 3rd December, 1940, for an injunction to prevent, pending the hearing of the suit, the Defendants from holding a meeting of the share-holders of the company which had then been arranged, the Appellant did nothing whatever after the institution of the suit. He made no application to obtain discovery and inspection of documents, which one would have thought, especially in a case of this sort, is most necessary. He made no application to obtain discovery and inspection of documents, which one would have thought, especially in a case of this sort, is most necessary. Learned Counsel, appearing on behalf of the Appellant, when dealing with this failure by the appellant, stated that, since the Defendants made no application for discovery, the Appellant was thereby entitled to use any document in his possession without having previously offered the Defendants' inspection of it. That is not an excuse, in my view, which is open to the Appellant for not taking, what must have been, a most necessary step. 17. Before the matter came before Edgley, J., notice was given to the Appellant a week previously but he was not disposed to furnish, in an affidavit, an explanation why he had allowed the suit to remain on the file and to become almost moribund and the reasons for his dilatoriness in not seeking to have it brought to trial. 18. It was stated to Edgley, J., as I have mentioned previously, by Learned Counsel for the Appellant, that his client was then ready to go to trial. I have no doubt that the Learned Counsel was so instructed; had he not been I am sure that no such statement would have been made. But greater attention and value would have been paid to a statement upon oath to this effect by the Plaintiff himself. The instructions to Learned Counsel, I regret to say, were incorrect. This is, as he stated, a representative suit inasmuch as it is brought by one share-holder on behalf of himself and the other share-holders of the company, except a few specified persons. In these circumstances, before the suit can receive disposal, an application must be made and granted pursuant to Or. 1 r. 8 L.R. 63 IndAp 12: s.c. 40 C.W.N.321 (1935) of the CPC which provides that " where there are numerous persons having the same interest in one suit, one or more of such persons may, with the permission of the Court, sue or be sued, or may defend, in such suit, on behalf of or for the benefit of all persons so interested..........." An application under this rule can be made before, or subsequent to, the institution of a suit but it has never been made in the present case. Until an order is made under this rule the suit is not ready for trial. In connection with this matter it is relevant to point out that an affidavit was filed in the course of the interlocutory proceedings by fourteen share-holders of the company denying that the Plaintiff had their authority to sue and objecting to the institution of the suit on their behalf. 19. Returning to r. 35, it provides that when there is default, as it envisages, then the suit is to be placed before the Judge in Chambers for one purpose, and that purpose is for it to be dismissed unless good cause is shown to the contrary, or be otherwise dealt with as the Judge may think proper. 20. In my view no good cause or any cause has been shown against the dismissal of the suit and I can find nothing which would have justified the learned Judge in the Court below dealing with it otherwise than by dismissal. Each case must depend upon its own facts and circumstances. In this case, they are different from those in the suit which was before their Lordships of the Privy Council; none of the circumstances are present here, which are, given at p. 25 of the report in Kumar Srinivas Prosad Singh's case L.R. 63 IndAp 12: s. c. 40 C.W.N.321 (1935) and which caused the Judicial Committee to set aside the order of dismissal. The present case is also to be distinguished from Dawoodayal Kothari's case 46 C. W. N. 653 (1942) which received disposal by an Appellate Bench of this Court; in that case there was an affidavit giving reasons for the delay; in the present case there is neither an affidavit nor any statement explaining the Plaintiff's conduct. There was no application before us to receive an affidavit; whether such application would have been successful matters not; but if an affidavit had been made it would have indicated that the Plaintiff was prepared to place on oath the reasons for his dilatory conduct. I can see nothing which, in the public interest, requires the suit to be tried. 21. I can see nothing which, in the public interest, requires the suit to be tried. 21. In this case there is no explanation for the Appellant's failure to take any step in the suit or to have it placed in the Prospective List during a period approaching three years; when it came before the Court, upon notice under r. 35 of Ch. X, the bare statement was made, which was not correct, that he was ready for trial. No cause has been shown against its dismissal. In my opinion the dismissal of the suit by Edgley, J., was the only result which could follow from the circumstances and the facts. There is nothing to show that the learned Judge was wrong in the way he exercised his discretion or that the exercise of his discretion was anything other than perfectly correct. 22. In my view, there are no merits whatever in this appeal and it should be dismissed with costs. Certified for one Counsel. Sen, J. 23. I entirely agree. 24. Mr. Banerjee's argument seemed to be that since the Plaintiff stated before the Court that he was ready to proceed with the suit at once the Court should not have dismissed the suit under r. 35 of Ch. X. 25. He relied for this proposition of the case of Dawoodayal Kothari v. Shibnath Roy Burman 46 c. W. N. 653 (1912). Although there are certain observations in the judgment which, taken out of their context, may lead to such a conclusion, I am of the opinion this could not have been the decision in that case. Such a view would render the rule nugatory. The rule is quite clear. It says that if a suit is not brought on the Prospective List within a certain period it shall be placed before a Judge in Chambers to be dismissed for default unless good cause is shown to the contrary, or be otherwise dealt with as the Judge may think proper. It is incumbent upon the Plaintiff to show good cause why the suit has not been placed in the Prospective List within six months from the date of its institution. The mere statement of the Plaintiff that he is ready to go to trial certainly cannot amount to good cause; if good cause is not shown the suit should be dismissed. The mere statement of the Plaintiff that he is ready to go to trial certainly cannot amount to good cause; if good cause is not shown the suit should be dismissed. If good cause is shown the suit will be otherwise dealt with. 26. Mr. Banerjee contended that before a Court dismisses a suit under this rule it should be satisfied that the Plaintiff had been guilty of some abuse of the process of the Court. For that proposition he also relies upon certain observations made in the case of Dawoodayal Kothari v. Shibnath Roy Burman 46 C. W. N. 653 (1942). 27. The phrase "abuse of the process of the Court" is frequently and loosely used in matters of this description. An idea seems to prevail that, in addition to the failure of the Plaintiff to bring the suit on the prospective list without good cause for the delay, the Plaintiff must be guilty of something else which is vaguely described as "an abuse of the process of the Court", before a Court would be justified in dismissing the suit. In my opinion, r. 35 of Ch. X declares that the conduct of a Plaintiff who does not bring his suit on the Prospective List within six months and who can show no good cause for the delay constitutes an abuse of the process of the Court which renders the suit liable to dismissal. It is not necessary that any other "abuse of the process" of the Court should be established. 28. Another argument frequently made is that a suit should not be dismissed under this rule notwithstanding an unjustified delay in bringing it to trial unless "public interest is involved." For this argument reliance is placed, on a passage in the judgment of the Judicial Committee in the well-known case of Srinivas Prosad Singh v. Keshava Prosad Singh L. R. 63 I. A. 12: s. c. 40 0. W. N. 321 (1935). In my opinion this argument is based on a misconception of what the Judicial Committee has said in that case. All that was said there was that r. 36 of Ch. X of the Original Side Rules (now Rule 35) was conceived in the public interest. This only means that it is in the interest of the public that the law provides that suits must be brought promptly to trial. All that was said there was that r. 36 of Ch. X of the Original Side Rules (now Rule 35) was conceived in the public interest. This only means that it is in the interest of the public that the law provides that suits must be brought promptly to trial. Their Lordships nowhere suggested that it is incumbent on the Court before it dismisses a suit under Ch. X r. 35 to find that the delay in that particular case has affected the public interest in some peculiar manner. I entirely agree with my learned brother that in this case, far from any good cause being shown, no cause whatsoever has been shown for the delay and in the circumstances the learned Judge had no option but to dismiss the suit in accordance with the provisions of r. 35 of Ch. X of the Original Side Rules of this Court, notwithstanding the Plaintiff's readiness to go to trial at once.