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2000 DIGILAW 176 (JK)

State Bank Of India v. Upjit Singh

2000-08-31

O.P.SHARMA

body2000
1. This appeal is directed against the order dated: 24.11.99 passed by the First Additional District Judge (Bank Cases) Jammu whereby suit for recovery of Rs. 1,05,899.95 has been dismissed under Order 10 Rule 4. Order 10 Rule 4 reads as under :- "4. Consequent of refusal or inability of pleader to answer-(1) Where the pleader of any party who appears by a pleader or any such person accompanying a pleader as is referred to in rule 2, refuses or is unable to answer any material question relating to the suit which the court is of the opinion that the party whom he represents ought to answer, and is likely to be able to answer if interrogated in person, the court may postpone the hearing of the suit to future day and direct that such party shall appear in person on such day. (2) If such party fails without lawful excuse to appear in person on the day so appointed, the court may pronounce judgment against him, or make such order in relation to the suit as it thinks fit." 2. Whether the court was justified in applying this rule in the peculiar facts and circumstances of the case is the only question to be answered in this appeal. The appellant challenges the order impugned on the ground that it is against law because the dispute if any was only with regard to the rate at which the interest was payable and also whether it was simple or compound interest. 3. The contention of Mr.Razdan appearing for the appellant is that discrepancy pointed out could be resolved by framing the issues and giving the parties reasonable opportunity to produce evidence. The statement of account according to him has been properly verified and there is a presumption in favour of its correctness. It could not have been rejected merely on the basis of the assertions made by defendant. Similarly, the contradictions with regard to the rate of interest and whether simple or compound interest was payable could also be established only if issues were framed. Further the order impugned does not indicate the nature of contradictions found by the court requiring clarification. Mr.Rakesh Gupta on the other hand submits that court had adjourned the case on a number of times to allow the plaintiff to appear and clarify the contradictions. Further the order impugned does not indicate the nature of contradictions found by the court requiring clarification. Mr.Rakesh Gupta on the other hand submits that court had adjourned the case on a number of times to allow the plaintiff to appear and clarify the contradictions. The trial court, it appears, has taken a narrow view of Order 10 without appreciating its scope. Order 10 Rule 2 reads as under: - "(2) At any subsequent hearing, the court may orally examine any party appearing in person, or present in court, or any person able to answer any material question relating to the suit, by whom such party or his pleader is accompanied." The mandate of Rule is that the court may orally examine a person in the court or his pleader to answer any material question relating to the suit. It appears, the court found some contradictions in the pleadings and on 11/08/1999 passed the following order: - "After finding contradiction and variation in the pleadings, documents and the amount advanced as loan by the plaintiff-bank, the learned counsel for the parties were directed to produce parties or their representatives in the court for oral examination in order to elucidate the matter in controversy between the parties on 05.05.99. The defendants are appearing in the court but nobody appeared on behalf of the plaintiff-bank for examination. Learned counsel for the plaintiff has sought one more opportunity for producing the representatives of the plaintiff-bank. The final opportunity is granted for producing the representatives of the plaintiff-bank for oral examination on next date of hearing failing which an Order 10 Rule 4 Sub-Rule 2 of CPC shall be passed. Defendants present in the court are also directed to appear on the next date of hearing." 4. The First infirmity in the order is that the contradictions have not been indentified either in this order or in the order dated: 05/05/1999. The order dated: 05/05/1999 indicates that the pleadings were not clear being contradictory to the documents. So for what purpose plaintiff was asked to produce the representatives is not disclosed in any of these orders. In the course of argument an attempt was made to find out the contradictions, noticed by the court but nothing substantial came out. Much was said about the rate of interest claimed and agreed. So for what purpose plaintiff was asked to produce the representatives is not disclosed in any of these orders. In the course of argument an attempt was made to find out the contradictions, noticed by the court but nothing substantial came out. Much was said about the rate of interest claimed and agreed. However, as per clause (6) of the Article of Agreement for minimum term loan the borrower had agreed to pay interest at the rate of 2.50% above the State Bank of India advance rate with a minimum of 15.50% per annum rising and falling therewith subject to enhancement. The plaintiff has, however, claimed the same rate of interest with quarterly (sic) rest instead of per annum and this is one of the contradictions pointed out by Mr. Gupta appearing for the respondents. Assuming that there is a contradiction, the plaintiff had to be given chance to prove whether the interest claimed is covered by clause (6) of the Article of Agreement because it provides for enhancement of the rate of interest also. The agreement further mentions that in case of default compound interest at the aforesaid rate could be charged. Whether there is a default or not is also a question of fact. The court, however, sealed the right of the plaintiff to prove these facts. It has while passing the impugned order ignored the mandate of order 14 in terms of which material propositions of fact asserted by one party are denied by the other, these become subject of distinct issues. Since the parties are at variance with regard to the rate of interest, the only course open to the trial court was to join them to issues. 5. Moreover, Sub-rule (2) of Rule 4 Order 10 does not mandate outright dismissal of the suit as is evident from its plane language. The court has either to pronounce the judgment or make such order in relation to the suit as it thinks fit. Assuming that the plaintiff had not complied the order passed under Rule 2 of Order 10, it had to examine whether suit could be decreed if the parties were not at variance on other points. In case, they were at variance, issues were to be framed and decided. Since issues could have been framed even without seeking any clarification, the court has acted without jurisdiction in dismissing the suit. In case, they were at variance, issues were to be framed and decided. Since issues could have been framed even without seeking any clarification, the court has acted without jurisdiction in dismissing the suit. This is neither the object nor purpose of Rule 4. 6. For the aforesaid reason, this appeal is allowed, the judgment and decree impugned set aside, and the suit is restored to its original number. The trial court will frame the issues and decide the case afresh. The counsel for the parties undertake to appear before the trial court on 30.09.2000.