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2000 DIGILAW 363 (ORI)

ORISSA MINING CORPORATION LTD. AND GOVERNMENT OF ORISSA v. M/S ASHOK TRANSPORT AGENCY

2000-07-19

B.P.DAS

body2000
JUDGMENT : B.P. Das, J. - These two revisions, one at the instance of the Orissa Mining Corporation Ltd. (for the sake of brevity referred to as 'O.M.C.') and the other at the instance of Government of Orissa, arise out of order dated 9-2-98 passed in Execution Case No. 50 of 1994 on the file of the Civil Judge (Senior Division), Bhubaneswar and they were heard analogously and are disposed of by this common judgment. 2. Brief facts giving rise to the revisions may be stated thus: M/s. Ashok Transport Agency, a registered partnership firm, brought a Money Suit bearing- M.S. No 491 of 1986 against M/s. O. M. C. Alloys Ltd. for realisation of Rs.3,90,210|-with interest, both pendente Lite and future. The suit was decreed ex parte by judgment dated 12-11-91. For realisation of the decretal dues, execution vide Execution Case No. 50 of 1994 was levied arraying M/s. O. M. C. Alloys Ltd., O. M. C. Limited and Government of Orissa as judgment-debtors. The case of the plaintiff-decree bolder is that O.M.C. Alloys Ltd. a subsidiary of O.M.C. Ltd. was engaged in production of charge-chrome exclusively meant for export. During pendency of the suit Government of India in the Ministry of Law and Justice by its order dated 30-8-91 permitted merger of O.M.C. Alloys Ltd- with O.M.C. Ltd.. Thereupon Government of Orissa promulgated Ordinance No. 8 of 1991, notified in Orissa Gazette on 24-9-91 by which right, title and interest of the Company in relation to charge-chrome division stood transferred and vested in State Government as provided under Clause 3 of the said Ordinance. A few days after the vesting, the State Government transferred the said charge-chrome division to TISCO. Since the State Government took over charge-chrome division of the O.M.C. Alloys Ltd. it is liable to pay the decretal dues to th'e plaintiff and in the changed circumstances as stated above, for realisation of the same it levied execution arraying O.M.C. Alloys Ltd., O.M.C. Ltd. and Government of Orissa as judgment-debtors. On being noticed, O.M.C. Ltd, and Government of Orissa filed objections challenging the executability of the decree as against them. Their main contention was that merger of O.MC. On being noticed, O.M.C. Ltd, and Government of Orissa filed objections challenging the executability of the decree as against them. Their main contention was that merger of O.MC. Alloys Ltd. with O.M.C. Ltd. and subsequent taking over the charge-chrome division of the O.M.C. Ltd. by the State Govern ment having taken place prior to the decree and the plaintiff having not added them as defendants in the suit, is not entitled under law to execute the ex parte decree obtained against O.M.C. Ltd. the present petitioner. 4. The learned executing court upon hearing the parties and after referring to the relevant clauses of the Ordinance No. 8 of 1991 held the execution proceeding to be maintainable against all the judgment-debtors. It is against that order of the learned court below, two separate revisions are filed. 5 Admittedly, the ex parte judgment was passed on 12-11-1991 and the decree was signed on 30-11-1991, but the merger of opposite party No. 2 with the O.M.C. was-held on 30-8-1991. On 24-9-1991, the State Government by virtue of Ordinance took over Orissa Mining Corporation Alloys Ltd. vide the Orissa Mining Corporation (Acquisition and Transfer of Charge Chrome Division) Ordinance No. 8 of 1991 dated 27-9-91 and three days after such acquisition, the State Government sold the opposite party No. 2 to TISCO. 6. According to the petitioner as per Clauses 12 and 13 of the Ordinance No. 8 of 1991 dated 24-9-1991 any contract entered into by the O.M.C. Alloys (Charge Chrome Division), which has been vested in the State Government from the appointed day or immediately thereafter shall cease to have any effect, unless such contract is ratified in writing by the State Government or the other Company to which it has been vested. As per Clause 5 of the Ordinance all liabilities of the O.M.C. Alloys Ltd. shall be the liabilities of the State Government. Thus, the Orissa Mining Corporation Ltd. has filed the Civil Revision No. 64 of 1998 contending therein that it has no liability whatsoever. That apart as the Orissa Mining Corporation Ltd. is not at all a necessary party in the proceeding, no claim can be laid against the O.M.C.. Apart from that, the counsel for the Orissa Mining Corporation Ltd. stated that in the case of State of Orissa Vs. That apart as the Orissa Mining Corporation Ltd. is not at all a necessary party in the proceeding, no claim can be laid against the O.M.C.. Apart from that, the counsel for the Orissa Mining Corporation Ltd. stated that in the case of State of Orissa Vs. Klockner and Company and Others, the Apex Court has already decided the issue in question that in view of Ordinance No. 8 of 1991, all the liabilities or O. M. C. Alloys Ltd. have been taken over by the State Government. Thus, any contract entered into by the said O. M. C. Alloys Ltd. is not enforceable as against the present petitioner, i.e., Orissa Mining Corporation Ltd. The learned counsel for State of Orissa, who is the petitioner in C. R. No. 117 of 1998, submitted that the State of Orissa may be successor in interest of O. M. C. Alloys (Charge Chrome Division) taken over by the Government of Orissa under Ordinance 8 of 1991, But it cannot held to be liable as it was not a party in the suit. 7. Section 6(2) of the Ordinance No. 8 of 1991 reads as, follows : "Where the right, title and interest of the Charge Chrome Divisions of the Company is vested under Subsection (1) in any other Company, the other Company shall, on and from the date of such vesting, be deemed to have become the owner in relation to the Charge Chrome Division and all rights and liabilities of the State Government in relation to such Division shall, on and from the date of such vesting, be deemed to have become the rights and liabilities of the other Company." Hence, as per the counsel for the petitioner, by the time decree was passed, the Charge Chrome Division has already been sold to TISCO and the decree holder failed to bring TISCO on record in the suit and further submitted that the Execution Case cannot proceed against the Government which was not a party in the suit, because sub-section (1) of section 80, C. P. C. lays down a mandatory provision with regard to issuance of prior notice to the State and its functionaries before institution of the suit which is subject to the provisions contained in subsection (2) thereof. Non-service of such notice renders the suit non-maintainable and vitiates the decree. 8. Non-service of such notice renders the suit non-maintainable and vitiates the decree. 8. In course of hearing, the learned counsel for opposite party No. 1 draws my attention to a decision of Patna High Court, reported in AIR 1935 Pat 488 (Mahanth Harihar Gir v. Karulal and others), wherein it has been held that the intention of Order 22, Rule 10, C. P. C. seems to be that though it is desirable the party having a present interest in the litigation should be before the Court, yet the litigation is not to become infructuous, if such a party is not brought before the Court. It has further Held in the said decision that where after the passing of a preliminary degree, but before the decree was made' absolute, the defendant relinquished his interest in favour of another, but did not inform the Court or the decree-holder of the relinquishment and also held that the decree was not nullity against the person in whose favour the relinquishment was made. Similarly, in a decision reported in A. I. R. 1963 KANT 16 (Bombay State Road Transport'and another v. Narayan Pandurang Kamath), a suit was filed against Bombay State Road Transport Corporation for damages for injury caused to the passenger due to accident of the Bus being driven by the driver of the Corporation, and the same was decreed and the Corporation preferred an appeal. During pendency of appeal the States of Bombay and Mysore were reorganised and the area where bus was plying came within the State of Mysore. By Clause 8 of the Bombay State Road Transport Order read with section 34 of the Road Transport Corporation Act, management of Corporation was transferred to Mysore Government Road Transport-Department and it was decided that Mysore State Road Transport Department should be substituted in place of Bombay State Road Transport Corporation. At this juncture it is profitable to quote the provision under Order 22, Rule 10, C. P. C. Order 22 Rule 10, C. P. C. is quoted hereunder : "Or. 22, Rule 10--Procedure in case of assignment before final order in suit-- (1) In other cases of an assignment, creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the Court, be continued by or against the person or upon whom such interest has come or devolved. 22, Rule 10--Procedure in case of assignment before final order in suit-- (1) In other cases of an assignment, creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the Court, be continued by or against the person or upon whom such interest has come or devolved. (2) The attachment of a decree pending an appeal therefrom shall be deemed to be an interest entitling the person who procured such attachment to the benefit to sub-rule (1)." 9. On a bare perusal of the aforesaid Order 22, Rule 10 C.P.C. there is no doubt that the assignee even if does not become a party is bound by the decision against the assignor, who is already a party to the suit, but the option to become a party or let the assignor carry on the litigation rests on the assignee. This view was taken in a decision reported id Dr. Niranjan Nath Vs. Sardar Mal and Another,, 10. In the instant case, this is an admitted fact that opposite party No. 2 has been merged with the O.M.C. Ltd. and ultimately taken over by the State of Orissa, but it is also a fact that opposite party No. 2 preferred to remain ex parte and never intimated the Court that O.M.C. Alloys Ltd. has ultimately been taken over by the State of Orissa and sold to TISCO. 11. In a decision rendered by the Apex Court reported in State of Orissa Vs. Klockner and Company and Others, in paragraph 16, the following finding were recorded. "16. A conjoint reading of the clauses extracted from the take over Ordinance and the agreement between the State of Orissa and Tata Iron and Steel Co. will clearly show that the State of Orissa is the successor-in-inrerest of O. M. C. Charge Chrome Division, taken over by the Government under Ordinance 8 of 1991. In view of this clear position, it is not possible to accept the contention of the learned senior, counsel for the appellant that the State of Orissa has nothing to do with the contract entered into between the Klockner and Co. and O. M. C. in respect of which the former has initiated arbitration proceedings invoking section 3 of the Foreign Awards Act." 12. and O. M. C. in respect of which the former has initiated arbitration proceedings invoking section 3 of the Foreign Awards Act." 12. In view of the aforesaid findings of the Apex Court nothing remains to be decided here as it is conclusively decided that the State of Orissa is the Successor-in-interest of opposite party No. 2 and admittedly the opposite party No. 2 at no point of time informed the Court regarding its take over by the State Government. In another decision of the Apex Court, reported In Bhagwan Dass Chopra Vs. United Bank of India and Others, it is held as follows : "A party acquiring the rights and liabilities of another party during the pendency of adjudication proceedings under the Industrial Disputes Act is bound by all the previous proceedings and orders and cannot recall and examine any witnesses after evidence of its predecessor had been closed." 13. On reading of the judicial pronouncements and looking to the facts and circumstances of the case, the irresistible conclusion is that no liability accrued as against M/s. Orissa Mining Corporation Ltd., the petitioner in Civil Revision No. 64 of 1988 (The State of Orissa being the Successor-in-interest of opposite party No. 2 is bound by the decree). Accordingly, the Civil Revision No. 64 of 1998 is allowed. 14. The argument advanced by the learned Standing counsel is that the opposite party No. 1 failed to bring either the Orissa Mining Corporation Ltd. or State of Orissa'or TISCO after the take over Ordinance was promulgated on record and hence failure on the part of opposite party No. 1 in doing so absolves the State of Orissa from any liability accruing out of the decree and it is not bound by the decree, do not hold good. 15. As discussed above, neither the present petitioner, the State of Orissa, nor opposite party No. 2 ever brought the factum of take over of opposite party No. 2 to the notice of the trial court. Having not done so, and in view of the decision of the Apex Court in the case of State of Orissa v. Klockner and Company and others (supra), the decree cannot be nullity as against the State of Orissa. Accordingly, the revision application bearing No. 117 of 1998 is dismissed. 16. C.R.No.64/1998 allowed, C. R. No. 117/1998 dismissed. Final Result : Allowed