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1996 DIGILAW 463 (KAR)

NATIONAL CO-OPERATIVE BANK LIMITED, BANGALORE v. C. V. S. TRADING COMPANY, BANGALORE

1996-08-08

M.F.SALDANHA

body1996
M. F. SALDANHA, J. ( 1 ) THE short point involved in this civil revision petition as demonstrated by the learned counsel who represents the petitioners is that having regard to the special facts and circumstances of the case, that the petitioners had every right to request that they should be impleaded as formal parties to the suit. The learned counsel who represents the petitioner-bank points out that there is documentary evidence on record to indicate that the property which is the subject-matter of the attachment which has been prayed for, has been mortgaged not once, but twice to the bank and that the bank has advanced a sum of Rs. 7. 5 lakhs against this very property. He therefore, submits that under these circumstances, the bank had approached the trial court with the limited application that it should be added on as a formal party as the property which was sought to be attached in that proceeding was a security with the bank. ( 2 ) THE respondents' learned Advocate submits that this is a simple suit for recovery of money and that it is true that the plaintiff did apply for attachment of the property as the plaintiff was keen on ensuring that some security should be there. He submits that in the dispute between the plaintiff and the defendants, that the bank is an absolute stranger and that the bank has virtually nothing to do with the cause of action before the court. He also submits that the solitary plea put forward by the bank, namely that the property has been twice mortgaged to the bank and. that therefore, the bank has a claim vis-a-vis that property does not execute any prejudice because, even if a decree is passed or anything else happens to the property, the first lien of the bank will always remain intact. The learned Advocate submits that in this background, the trial court has carefully considered all aspects of the matter and considered it totally unnecessary for the bank to be impleaded even as a formal party. He also draws my attention to the fact that when the impleading application was made, that the defendants recorded their no objection and that this is obviously because, they are colluding with the bank. He therefore submitted that no interference is called for vis-a-vis the Order in question. He also draws my attention to the fact that when the impleading application was made, that the defendants recorded their no objection and that this is obviously because, they are colluding with the bank. He therefore submitted that no interference is called for vis-a-vis the Order in question. ( 3 ) NORMALLY, I would have had no hesitation in upholding the submissions canvassed on behalf of the respondents, but this court needs to take cognizance of the fact that when an application is made by a third party for being impleaded, that the solitary principle on which the court would examine the application emanates from the question as to whether the applicant has a locus standi to prefer such an application in so far as even if the applicant is not directly concerned with the subject-matter of the dispute, whether there can be any prejudice caused to the applicants as a result of orders that may come to be passed in the proceedings, or furthermore, whether a situation could arise whereby the applicant would have to unnecessarily institute further proceedings only because the applicant was not heard in this case, and it could result in multiplicity of litigation. These are basically the principles that one would require to apply and viewed at from this angle, there is no dispute about the fact that the property in question is subject to a lien in this proceeding. A substantial amount of money has been advanced by the bank against that very property which the bank is virtually holding as security against the loan. If the property therefore, is subject to an attachment, it also means that it is quite imminent that the property could also be ordered to be sold. In either of these eventualities, there can be no dispute about the fact that the interests of the bank would be jeopardized and that the bank therefore, has every right to be represented before the court so that it has notice of the orders that may come to be passed in the proceedings and furthermore, so that the bank could make its submissions before the court before any orders that are adverse to the interests of the bank are passed. In this background therefore, the trial court had obviously overlooked these aspects of the case which it is essential for a court to take notice of. In this background therefore, the trial court had obviously overlooked these aspects of the case which it is essential for a court to take notice of. ( 4 ) I do not visualise any prejudice being caused to the parties if the bank is impleaded as a formal defendant because, the bank is in no way concerned with the subject-matter of the main dispute and its limited interest is only with regard to the property that has been attached. The Order passed by the trial court is accordingly set aside. It is directed that the petitioner-bank be impleaded as a formal defendant to. The proceedings. ( 5 ) THE petition succeeds to this extent. No Order as to costs. the interim Order, if any, to stand vacated. --- *** --- .