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1994 DIGILAW 268 (MAD)

New Bank of India, now known as and merged with Punjab National Bank Kilpauk Branch, Madras represented by its Manager v. The Official Assignee, High Court, Madras, representing N. Pathmanathan

1994-03-10

MISHRA, S.M.ALI MOHAMED

body1994
Judgment :- S.M. ALI MOHAMED, J. 1. This appeal under Cl. 15 of the Letters Patent, is preferred against the order of the learned single judge made in Application No. 3433 of 1993 in C.S. No. nil dated 23.8.1993. 2. The appellant/plaintiff, New Bank of India filed a suit on the original side of the High Court for recovery of a sum of Rs. 1,36,000/- with interest thereon against (1) Official Assignee, High Court, Madras, representing N. Pathmanathan, Insolvent in I.P. No. 96 of 1991 Proprietor of P.P.K.V. Natarajan and Sons and (2) Tmt. Thangathurai Achi and filed an Application No. 3433 of 1993 before the trial court to grant permission/leave to sue the Official Assignee, High Court, Madras in the above proceedings. The learned single judge dismissed the above application for leave to sue the Official Assignee in the above proceedinhgs. Aggrieved by the above order, the appellant/plaintiff has preferred this appeal. 3. The learned single judge has summarised the respective plendings of the appellant/plaintiff and the first respondent first defendant as follows: “The applicant in their affidavit contends as follows:— The plaintiff bank has advanced monies to one Mr. N. Pathmanathan, Propreietor of P.P.K.V. Natarajan and Sons. The loan was guaranteed by the second defendant who created an equitable mortgage on her landed property as an additional security. The borrower gave a primary security of the hypothecated stocks and also book debt of his firm. The plaintiff has to file a suit against the said borrower and the guarantor for getting a charge on the hypothecated stocks and book debts. Mr. N. Pathmanathan has been declared as an insolvent in I.P. No. 96 of 1991 in this Court. The Official Assignee has taken charge of his assets including the hypothecated stocks and book debts over which the plaintiff has the first charge and therefore, the appellant has to necessarily file a suit against the Official Assignee. Hence, the application for leave to sue the Official Assignee. The Official Assignee in his counter, has stated as follows:— The loan was granted by the bank and the second defandant created an eduitabte most gage on her landed property as an additional security, apart from the borrower furnishing security of the hypthecated stocks and book debts of his firm. Hence, the application for leave to sue the Official Assignee. The Official Assignee in his counter, has stated as follows:— The loan was granted by the bank and the second defandant created an eduitabte most gage on her landed property as an additional security, apart from the borrower furnishing security of the hypthecated stocks and book debts of his firm. The plaintiff is not secured creditor in respect of the property of the insolvent N. Pathmanathan who was adjudicated as an insolvent on 7.11.1991 in I.P. No. 96 of 1991. The applicant is not entitled to commence any suit or other legal proceedings except with the leave of this Court during the pendency of the insolvency proceedings. The Official Assignee has taken possession of the movables and other goods belonging to the insolvent and sold them in public auction. If there is any true owner of the goods which have become divisble among the creditors of the insolvent, they may prove the value of such goods. There cannot be a personal decree against the Official Assignee while exercising his duty under the orders of this Court. As against the insolvent is concerned, it is only a money suit and the plaintiff claims a charge upon the hypthocated goods which were already taken possession from the insolvent. The Official Assignee has nothing to do with the mortgage of the second defandant. No notice under S. 80 C.P.C. was served upon the Official Assignee. Leave to sue, therefore, cannot be granted and has to be dismissed”. 4. On the above pleadings and the contention of the respective parties, the learned single judge held that the plaintiff bank cannot file a suit against the Official Assignee and that no notice under S. 80 of Civil Procedure Code was given by the plaintiff to the Official Assignee the institution of the suit and as such, the suit was not maintainable. 5. It is contended by Mr. Surana, learned counsel for the appellant that the above findings of the learned single judge are not sustainable in law. 5. It is contended by Mr. Surana, learned counsel for the appellant that the above findings of the learned single judge are not sustainable in law. Learned counsel for the appellant cited a Division Bench ruling of Bombay High Court reported in Damodar Jagiwan v. Govindji Jivabuai (A.I.R. 1923 Bombay 392) and a ruling of this court in The Official Assignee of Madras v. Vedanarayana Naicker (1938-1-M.L.J. 92 = 47 L.W. 46) and contended that upon the facts and circumstances of the case, no notice under S. 80 of Civil Procedure Code is necessary before institution of the suit. On the other hand, the Official Assignee contended that the impugned order of the learned judge is in accordance with law and as such, the appeal ought to be dismissed by this court. 6. We are of the view that there is force in the contention of Mr. Surana, leanred counsel for the appellant, that upon the facts and circumstances of the case, there is no need to issue a notice under S. 80 of Civil Procedure Code to Official Assignee and the suit instituted by the plaintiff is maintainable. As there is a Division Bench ruling of this court on this aspect of the matter, we do not propose to refer to the rulings of other High Courts. In the case of Official Assignee of Madras v. Vedanarayana Naicker (1938-I-M.L.J. 92 at 97 = 47 L.W. 46) a Division Bench of this Court presided over by the then Chief Justice Honourable Mr. Alfred Henry Lionel Leach and Honourable Mr. In the case of Official Assignee of Madras v. Vedanarayana Naicker (1938-I-M.L.J. 92 at 97 = 47 L.W. 46) a Division Bench of this Court presided over by the then Chief Justice Honourable Mr. Alfred Henry Lionel Leach and Honourable Mr. Justice Varadachariar, held as follows: “Turning now to the second contention of the learned advocate for the appellant, S. 80 of the Code of Civil Procedure provides that no suit shall be instituted against the Secretary of State for India in Council, or against a public officer in respect of any act purporting to be done by such public officer in his official capacity, until the expiration of two months next after notice in writing has been, in the case of the Secretary of State in council, delivered to, or left at the office of, a Secretar y to the Local Government or the Collector of the District, and in the case of a public officer, delivered to him or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims. The section also states that the plaint shall contain a statement that such notice has been so delivered. For the purpose of dealing with this argument we will take it that the correspondence which passed prior to suit did not give the notice requi red by this Section, and it is common ground that the Official Assignee is a ‘Public Officer’ within the meaning of the section. In the course of the arguments we were referred to a number of cases decided by the Calcutta High Court and by the Bombay High Court. The Calcutta High Court has for many years taken the view that this Section applies to cases founded on contract as well as to cases in tort. The Bombay view has been that the section only applies to action founded on tort. But the position has been clarified by a recent decision of their Lordships of the Privy Council in Revati Mohan v. Jatindra Mohan Ghosh (1934) 66 M.L.J. 506 = 39 L.W. 504) and it is now settled that the section covers cases both in contract and in tort. This decision also shows that in the present case, the Official Assignee in executing the deed of release was not doing an act in his Official capacity. This decision also shows that in the present case, the Official Assignee in executing the deed of release was not doing an act in his Official capacity. Further, the suit is not against him in respect of any act done by him in that capacity. In the case mentioned above, a common manager of an estate appointed under the Bengal Tenancy Act, 1885, executed with the sanction of the Court, a mortgage which provided for repayment of the debt on a specified date. Before that date he died and another manager was appointed. The debt not having been paid, the mortgagee without giving notice, sued the new manager to enforce the mortgage. Their Lordships held that notice was not necessary under S. 80 because assuming that a common manager is a public o fficer, the suit was not for an act purporting to be done in his official capacity. Failure to pay the debt when due, was not an ‘illegal omission’ so as to be an ‘act’. Sir George Lowndes delivered the judgement and at page 475 of the report he observes: ‘It is also different to see how mere omission to pay either interest or principal could be an act purporting to be done by the manager in his official capcity. The mortgage imposed no personal liability upon the manager, but merely provided that, if payment was not made, the mortgagee would be entitled to realise his dues by sale through the Court, and this was all that the appellant sought by his suit. The manager for the time being no doubt had an option to pay in order to save the sale, but failure to exercise an option is not in any sense a breach of duty. The appellant made no claim against the first respondent personally. He was there only as representing the estate of which the sale was sought. In their Lordships opinion, such a suit is not within the ambit of S. 80 and no notice of suit was required.’ In the case before us the claim against the Official Assignee was not a claim against him personally, but a claim against him as representative of the estate of Janaki Ammal, throughout the case he merely occupied the position as the representative of that estate. Therefore, we hold that no notice was required to be given under section 80 to the Official Assignee before the suit was instituted. Consequently, we consider that it was properly launched.” 7. Section 80 of Civil Procedure Code after amendment by Act 104 of 1976 is as follows: “80 Notice : Save as otherwise provided in sub-Section (2), no suit shall be instituted against the Government (including the Government of the State of Jammu and Kashmir) or against a public Officer in respect of any act purporting to be done by such public officer in his official capacity, until the expiration of two months, next after notice in writing has been delivered to, or left at the office of- a) in the case of a suit against the Central Government, (except where it relates to a railway), a Secretary to that Government: b) in the case of a suit against the Central Government where it relates to a railway, the General Manager of that railway: c) in the case of a suit against the Government of the State of Jammu and Kashmir, the Chief Secretary to that Government or any other officer authorised by that Government in this behalf: d) in the case of a suit against (any other State Government, a Secretary to that Government or the Collector of the district, and, in the case of a public Officer, delivered to him or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims; and the plaint shall contain a statement that such notice has been so delivered or left. (2) A suit to obtain any urgent or immediate relief against the Government (including the Government of the State of Jammu and Kashmir) of any public officer in respect of any act purporting to be done by such public officer in his official capacity, may be instituted, with the leave of the Court, without serving any notice as required by sub-Section (1); but the Court shall not grant relief in the suit, whether interim or otherwise, except after giving to the Government or public officer, as the case may be, a reasonable opportunity of showing cause in respect of the relief prayed for in the suit; Provided that the Court shall, if it is satisfied, after hearing the parties, that no urgent or immediate relief need be granted in the suit, return the plaint for presentaion to it after complying with the requirements of sub-Section (1). (3) No suit instituted against the Government or against a public officer in respect of any act purporting to be done by such public officer in his official capacity shall be dismissed merely by reason of any error or defect in the notice referred to in sub-Section (1) if in such notice:— a) the name, description and the residence of the plaintiff had been so given as to enable the appropriate authority or the public officer to identify the person serving the notice and such notice has been delivered or left at the office of the appropriate authority specified in sub-section (1), and, (b) the causes of action and the relief claimed by the plaintiff had been substantially indicated.” 8. It is no doubt true that the Official Assignee is a public officer within the definition of S. 2(17) of Civil Procedure Code, However, we are of the view that a suit to be within the ambit of S. 80 of Civil Procedure Code, the act alleged against the public Officer should be in respect of any act purporting to be done by such public officer in his official capacity in which case, S. 80 of the Civil Procedure Code gets attracted, and no suit shall be instituted against a public officer until the expiration of two months next after notice in writing has been delivered to, or left at the office and other requirements of S. 80 are complied with. As pointed out by the Privy Council in Revathi Mohan Das v. Jatindra Mohan Ghosh (1934)-66-M.L.J. 506 = 39 L.W. 504) if the Official Assignee is sued only as representing the estate of the insolvent, such a suit is not within the ambit of S. 80, C.P.C. and no notice of the suit was required. 9. In the Instant case, the suit filed by the appellant/plaintiff against the Official Assignee, is in his capacity only as representing the estate of the insolvent N. Pathmanathan in I.P. No. 96 of 1991, Proprietor of P.P.K.V. Natarajan and Sons and as such, the suit filed by the plaintiff is not within the ambit of S. 80 C.P.C. and no notice of the suit is required to be issued to the Official Assigne and we are unable to accept the view of the learned single judge to the effect that “the plaintiff bank cannot file a suit against the Offical Assignee who is an Officer of the Court for realising the amount payable by the insolvent and obtain a decree against the Official Assignee, that the Offical Assignee being a Government Servant, a notice under S. 80 C.P.C. is also necessary, and that no such notice was given by the plaintiff informing the Official Assignee that they propose to file a suit against the Official Assignee”. A persual of the plaint clearly shows that the suit is instituted by the plaintiff against the Official Assignee, High Court, Madras, representing N. Pathmanathan (Insolvent in I.P. No. 96 of 1991), Proprietor of P.P.K.V. Natarajan and Sons, for recovery of a sum of Rs. 1,36,000/- with interest thereon on the allegation that one N. Pathmanathan who has been adjudicated as insolvent borrowed money from the bank and executed a promissory note and agreement for Cash Credit facility and the said borrowing was also supported by hypothecation Deed of stocks and book debts belonging to the borrower and the second defendant had offered her immovable property by way of a mortgage deed and the suit was for recovery of money payable by the insolvent. In view of the above, the suit against the Official Assignee, the first defendant without issue of notice under S. 80 of Civil Procedure Code is maintainable. In view of the above infirmity, the order of the learned single judge is set aside and the appeal is allowed. In view of the above, the suit against the Official Assignee, the first defendant without issue of notice under S. 80 of Civil Procedure Code is maintainable. In view of the above infirmity, the order of the learned single judge is set aside and the appeal is allowed. With regard to the contention of the Official Assignee that the plaintiff is not a secured creditor in respect of the property of the insolvent N. Pathmanathan who was adjudicated as an insolvent on 7.11.1981 in I.P. No. 96 of 1991, we are of the view that it is open to the trial court to frame an issue with respect to this contention among other issues that may be framed, and dispose of the suit in accordance with law. With the above observations, the appeal is allowed. Upon the facts and circumstances of the case, there shall be no order as to costs.