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1954 DIGILAW 21 (KER)

Thommen Pyli v. Ouseph

1954-01-29

GOVINDA PILLAI, VITHAYATHIL

body1954
Judgment :- 1. Plaintiff is the appellant in this second appeal. Plaintiff is the liquidator of the Gothuruthy Educational and Industrial Company Limited. That company started a kuri in which one Augustinju, the predecessor¬in-interest of the defendants, joined one-fourth ticket. After the death of Augustinju, the defendants paid subscriptions for the kuri and they bid one-eighth ticket. For payment of the future subscriptions they executed a kuri security bond, Ext. A, on 5.12.1103 charging the plaint schedule properties. The bond contained the usual acceleration clause by which the executants undertook to pay the whole future subscriptions in a lump if default was committed in the payment of any one instalment. Subscriptions were paid only till the 23rd instalment, and default was committed from the 24th instalment which fell due on 10.10.1108. The starter, company, sent a registered notice on 1.11.1112 demanding future subscriptions in a lump. But the Cochin Kuri Proclamation dated 29.11.1111, which was further extended by Proclamation V of 1112, prohibited the company from suing for the whole future subscriptions. Paragraph 2 of the proclamation provided: "Starters of Kuries shall institute suits against defaulting prized subscribers only for the actual amounts due on account of defaulted instalment or instalments, and such suits shall be instituted in the court of original jurisdiction where a suit for the entire amount claimable on account of the default according to the terms of the kuri security bond will lie. If the defaulting subscriber pays into court, before the suit comes up for evidence, the amount sued for together with court costs, the suit shall be dismissed and the amount paid into court will be handed over to the plaintiff. If the defaulting subscriber does not so pay into court such amounts, the plaintiff may apply to the court, on paying the necessary court fee, to convert the suit into a suit for the full amount due to him according to the terms of the kuri security bond sued upon in which case a decree for such amount shall be passed." Accordingly, the company instituted a suit as O.S. No. 731 of 1118 of the District Munsiff's Court of Ernakulam against the defendants. Ext. I is the copy of the plaint in that case. On the date of that suit 13 instalments were in arrears, i.e., those from 10.10.1108 to 10.6.1118. Ext. I is the copy of the plaint in that case. On the date of that suit 13 instalments were in arrears, i.e., those from 10.10.1108 to 10.6.1118. 'A' valuation in the plaint covered the amount due for those 13 instalments and interest thereon. The amount due for all the 18 instalments from 10.10.1108 till the termination of the kuri was shown in the'B' valuation in the plaint. As enjoined by the Proclamation, the plaintiff asked for a decree for the amount covered by the 'A' valuation in case the defendants would deposit the same before the suit came up for evidence. There was also a prayer that in case the amount covered by the 'A' valuation was not deposited by the defendants before the suit came up for evidence the plaintiff might be allowed to pay court fee on the additional amount covered by the "B" valuation and might be given a decree for the whole amount. The first defendant in the case contended that there was no default in the payment of subscriptions and that subscriptions had been paid till the 39th instalments. The trial court found that subscriptions were in arrears from the 24th instalment. Since the question whether there was default in the payment of subscriptions was in dispute between the parties the plaintiff did not pay court fee on the additional amount covered by the 'B' valuation. The trial court gave a decree for the amount covered by the 'A' valuation. Defendants 1 and 5 preferred an appeal from the decree while the plaintiff filed a cross-appeal praying for a decree for the whole amount covered by the 'B' valuation in the plaint. The plaintiff also paid court fee on the additional amount claimed by him. The District Court dismissed both the appeal and the cross-appeal. This is what was stated in the judgment about the cross-appeal: "As the plaintiff-company did not take any steps to convert the suit from one for the amount shown under the 'A' valuation to one for the amount shown under the 'B' valuation the suit remained as one only for the defaulted amounts and the appeal can only be against the decree for a suit of that nature. So this court cannot pass a decree as now prayed for by the plaintiff-company as practically it will be passing a decree in appeal against a suit of a different nature than the one which was before the lower court." Consequently, the plaintiff filed the present suit for the five instalments due from 10.10.1118 till the termination of the kuri. The suit was field on 7.12.1122. 2. Defendants 1 and 5 contested the suit. They contended that the suit was barred by res judicata and also under O. II R. 2(2) of the Code of Civil Procedure. It was further contended that the suit was barred by limitation. The trial court held that the suit was not barred by res judicata or limitation, but that it was barred under O. II, R.2(2) of the Code of Civil Procedure. The suit was accordingly dismissed without costs. The appeal filed by the plaintiff was also dismissed. The lower appellate court also was of opinion that the suit was barred under O. II R. 2(2) CPC. 3. The question for decision in this second appeal is whether the suit is barred under O. II R. 2(2) CPC O. II R. 2 sub-r.2 reads: "Where a plaintiff omits to sue in respect of, or intentionally relinquishes any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished." It cannot be disputed that since the plaintiff issued a notice demanding the whole subscriptions in a lump there arose a cause of action for the whole amount. The plaintiff has no case that he subsequently waived his right to claim the consolidated amount. But the question is whether the Cochin Kuri Proclamation prevented him from suing for the whole amount. The first part of Paragraph 2 of the Proclamation prohibits the starters of kuries from instituting such a suit. The Proclamation says: "Starters of kuries shall institute suits against defaulting prized subscribers only for the actual amounts due on account of defaulted instalment or instalments." The subscriptions due for the last five instalments were not amounts due on account of defaulted instalments on the date when Ext. I suit was instituted. The plaintiff could not, therefore, institute a suit for that amount. I suit was instituted. The plaintiff could not, therefore, institute a suit for that amount. It was not a case of the plaintiff omitting to sue in respect of a portion of his claim or of his intentionally relinquishing any such portion. 4. The further question is whether the plaintiff was bound under the Proclamation to apply to the court to convert the suit into one for the full amount due to him and to pay court fee on the additional amount; in other words, whether the second part of paragraph 2 of the Proclamation is mandatory or only permissive. That part of the paragraph reads thus: " If the defaulting subscriber does not so pay into court such amounts, the plaintiff may apply to the court, on paying the necessary court fee, to convert the suit into a suit for the full amount due to him according to the terms of the kuri security bond sued upon, in which case a decree for such amount shall be passed." We do not think that the wording of this part of the Proclamation warrants the interpretation sought to be put upon it by the defendants viz., that the provision contained there in is mandatory and not permissive. The words used are "the plaintiff may apply to the court... " In the first part of the paragraph which prohibits the instituting of suits for the full amount the word used is 'shall'. We find no reason to hold that the word 'may' used in the second part of the paragraph has the same meaning as 'shall' used in the first part. The literal meaning of the latter part of the paragraph is that the plaintiff will have the option to apply to the court to convert the suit into a suit for the full amount on payment of the necessary court fee. The Proclamation also says that in case the plaintiff applies for the purpose and pays the necessary court fee a decree shall be given for the full amount. The sentence 'in which case a decree for such amount shall be passed' indicates that the provision allowing the plaintiff to apply to the court for converting the suit is only permissive and not mandatory. 5. The sentence 'in which case a decree for such amount shall be passed' indicates that the provision allowing the plaintiff to apply to the court for converting the suit is only permissive and not mandatory. 5. It is true that in Krishna Kammathi v. Bank of Cochin Limited (38 Cochin 285) there are some observations which go to support the argument that the second part of paragraph 2 of the Proclamation is mandatory and that, unless the plaintiff applies to the court to convert the suit in the manner provided in that part, a subsequent suit for the amount not claimed in the first suit would be barred under O. II R. 2(2) CPC. But this question did not arise for consideration in that case. The question that was decided in that case was whether the second suit filed more than three years after the accrual of the cause of action, i.e., after the date of the notice demanding payment of the full amount, would be barred by limitation. The suit in that case was one based on an unregistered kuri bond. It was held that the Proclamation would not save limitation and that the second suit was barred by limitation. In this case, no question of limitation can arise since the present suit, which is one based on an hypothecation bond, was instituted within twelve years from the date of the notice demanding payment of the full amount. In the circumstances, we do not think that Krishna Kammathi v. Bank of Cochin Limited (38 Cochin 285) can be regarded as an authority for the position that the latter part of paragraph 2 of the Cochin Kuri Proclamation contains a mandatory provision and that the starter of a kuri is bound to apply to the court to have the suit converted into one for the full amount and to pay the necessary court fee. So long as the first part of the paragraph prohibited the plaintiff from instituting a suit for the full amount of subscriptions and so long as the second part of the paragraph did not compel him to apply to the court to convert the suit into one for the full amount and to pay the necessary court fee, there can be no justification for holding that the omission to apply to the court for converting the suit in the manner provided by the Proclamation and to pay the necessary court fee will disentitle the plaintiff to institute a fresh suit for the amount of subscriptions that fell due after the date of the first suit. We, therefore, hold that the present suit is not barred under O. II R. 2(2) CPC. 6. So far as the plea of res judicata is concerned what was held by the appellate court in Ext. I suit was that the suit in that case could be regarded only as one for the defaulted subscriptions since court fee was paid in the trial court only for that amount. It was on that ground that the cross-appeal filed by the plaintiff was not allowed. In the circumstances, it cannot be said that the present suit is barred by res judicata. 7. In the result, we set aside the judgments and decrees of the courts below and allow the second appeal with costs in all the courts. Allowed.