Research › Search › Judgment

Madras High Court · body

2001 DIGILAW 1145 (MAD)

K. Rama Naidu v. S. K. Parthasarathy Naidu

2001-09-27

PRABHA SRIDEVAN

body2001
ORDER: “Justice is a virtue which transcends all barriers. Neither the rules or procedures nor technicalities of law can stand in its way…..Even the law bends before justice….. If the Court finds that the order was passed under a mistake…. Mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope for rectification deepening on if it is fact or law. But the root from which the power flows is the anxiety to avoid injustice….. If the Court is satisfied of the injustice then it is its constitutional and legal obligation to set it right by recalling its order. Rectification of an order thus stems from the fundamental principles that justice is above all. It is exercised to remove the error and not for disturbing finality.” The above is the extract from S.Nagaraj v. State of Karnataka S.Nagaraj v. State of Karnataka 8199394 S.C.C. 8Supp.9 595 which was referred to by a Division Bench of this Court in Baskaran v. The Commissioner of College Education 8199592 C.T.C. 513 while dealing with important features of a review application. In the same decision the following principle were also laid: “(1) If the judgment is vitiated by an error apparent on the face of the record in the sense that it is evident on a mere looking at the record without any long-drawn process of reasoning a review application is maintainable. (2) If there is a serious irregularity in the proceeding, such as violation of the principles of natural justice, a review application can be entertained. (3) If a mistake is committed by an erroneous assumption of a fact which allowed to stand would cause miscarriage of justice, then also an application for review can be entertained. It is not necessary to point out that the above principles are applicable de hors the provisions of O.46 , Rule 1 of the Code of Civil Procedure.” 2. This review petition is against the judgment in S.A.No.499 of 2001. This appeal arises out of O.S. No.5006 of 1996 filed by the first respondent herein, for dissolution of partnership and rendition of accounts. The first review petitioner was the first defendant and the second respondent was the second defendant. The main controversy is only between these persons. 3. Certain facts are not in dispute. The first review petitioner (R.P.1 in short) needed funds to purchase certain immovable properties. The first review petitioner was the first defendant and the second respondent was the second defendant. The main controversy is only between these persons. 3. Certain facts are not in dispute. The first review petitioner (R.P.1 in short) needed funds to purchase certain immovable properties. He approached respondents 1 and 2 and both of them gave him a sum of Rs.1,00,001. The purpose for which R.P.1 wanted to purchase the immovable property was to do some real estate business and realise profits. The agreement was that he would return this amount together with one fifth share in the profits realised. With the aid of the amounts given by respondents 1 and 2, R.P.1 purchased the immovable property. 4. Apprehending that R.P.1 will not abide by the understanding between them, the second respondent filed a suit for bare injunction and the first respondent filed the above suit. In this substantive suit, the second respondent, filed a written statement wherein he prayed that the first respondent's suit may be decreed as prayed for, for which he also undertook to pay the necessary Court-fee. It was the case of respondents 1 and 2, that the agreement between the three of them was a partnership agreement. That is why R.P.1 agreed to give them a share in the profits. 5. The stand of R.P.1 on the other hand, was that the amount was given as a loan and there was no partnership. He admitted the loan and also that he agreed to give a share in the profits, R.P.1 in his written statement would state that the relief of recovery of amounts advanced was barred by limitation. The suits filed by both the respondents 1 and 2 were dismissed and the first appellate Court confirmed this. Therefore, two second appeals were filed before this Court. The second appeal that arose out of the suit for bare injunction was dismissed. 6. In the other second appeal, which was for dissolution of partnership, an agreement was advanced on behalf of the respondents that if the suit documents were not found to be partnership agreements, then on the basis of the admission of R.P.1 that it was only a loan, relief should be granted. In support of this proposition reliance was placed on Firm Srinivas Ram Kumar v. Mahabir Prasad A.I.R. 1951 S.C. 177. 7. In support of this proposition reliance was placed on Firm Srinivas Ram Kumar v. Mahabir Prasad A.I.R. 1951 S.C. 177. 7. This was accepted by this Court and while the findings of the Courts below regarding the relief for dissolution of partnership was confirmed, a decree was granted for recovery of a sum of Rs.1,00,000 together with one fifth share in the profits along with interest and R.P.1 was directed to render accounts. It is against this, the review has been filed. 8. Mr. A.A. Lawrence, learned counsel for the review petitioner submitted that the judgment suffers from an error apparent on the face of the records. He pointed out to the defence raised by R.P.1 that the claim was barred by limitation. In para No.17 of the written statement, R.P.1 had clearly stated that the relationship between the parties was that of a creditor and a debtor and the debit was barred by limitation. He also submitted that the relief was granted on the basis that there was an admission by R.P.1, where as it is clear that R.P.1 had not made any unconditional admission. He had merely stated that it was a debt, but a debit that was time barred and therefore, this statement made in defence cannot be construed as an admission and relief cannot be granted on that basis. He also submitted that no relief shall be granted contrary to the pleadings. When persistently the respondents 1 and 2 had stuck to their stand that it was only a partnership agreement and not a loan, it was not open to this Court to grant them a relief as though the amount advanced was a loan. The learned counsel submitted that even though the trial Court had given a finding that the transaction was a loan transaction both the respondents had attacked this finding as erroneous and maintained that the relationship between the parties was only in the nature of a partnership. He also submitted that though this question of limitation had not been argued, at that time since, it is a question of pure law and since the error also states in the face, this Court shall review the judgment on that basis. He relieved on several judgments to support his case. (1) Jamna Kuer v. Lal Bahadur A.I.R. 1950 F.C. 131; (2) Jagjivandas Bikhabhai v. Sumanbhai Narottamdas A.I.R. 1967 Guj. He relieved on several judgments to support his case. (1) Jamna Kuer v. Lal Bahadur A.I.R. 1950 F.C. 131; (2) Jagjivandas Bikhabhai v. Sumanbhai Narottamdas A.I.R. 1967 Guj. 1 (3) Ram Surat v. Shitla Prasad A.I.R. 1978 All. 270; (4) Mt.Rukhambai v. Ganpatrao Mt.Rukhambai v. Ganpatrao A.I.R. 1982 Nag. 177 (5) Debi Sahai-Gulzari Mal of Delhi v. Basheshar Lal-bansi Dhar A.I.R. 1928 Lah. 919; (6) Karim v. Abdul Rahiman Karim v. Abdul Rahiman A.I.R. 1935 Bom. 353; (7) Firm Sriniwas Ram Kumar v. Mahabiar Prasad Firm Sriniwas Ram Kumar v. Mahabiar Prasad A.I.R. 1951 S.C. 177; (8) Messrs. Trojan and Co. v. RM.N.N. Nagappa Chettiar Messrs. Trojan and Co. v. RM.N.N. Nagappa Chettiar A.I.R. 1953 S.C. 235; (9) Om Prakash v. Ram Kumar 8199191 S.C.C. 441. 9. Mr. G. Subramanian, learned senior counsel made his submissions for the second respondent and they adopted by the first respondent. First he submitted that the admission made by R.P.1 was not a qualified one. R.P.1 had categorically acknowledged and admitted that what was granted was a loan. This point of limitation ought to have been urged when the second appeal was argued but was not. It is not open to R.P.1 to seek review of the order on this basis. Even on facts, it was urged that the suit was not barred by limitation. The agreement between the parties was that R.P.1 would purchase the suit property with the funds given by respondents 1 and 2 and return it to them with one fifth share in the profit realised. The learned Senior counsel would further submit that the question of realising profits would rise only after R.P.1 had purchased the suit properties and done real estate business with the same. The right to recover the amount would made profits out of the sale of the same. In this case the suit property was purchased by R.P.1 only on 27.9.1990, and he had agreed to sell to third parties sometime in January, 1991. Since both the suits had been filed within three years from that date, the suits were not time barred. In para No.32, R.P.1 had stated that the principal and due share of profits can be received only at the time when the final sale deed is executed. Since both the suits had been filed within three years from that date, the suits were not time barred. In para No.32, R.P.1 had stated that the principal and due share of profits can be received only at the time when the final sale deed is executed. Therefore, according to the learned senior counsel it does not lie in the mouth of R.P.1 to now say that the suit is barred by limitation. he referred to the decision reported in Shanmugasundra Nadar v. Tamil Nadu Housing Board 8198892 L.W. 567 in which the power to review was dealt with. 10. Four documents are relevant. (a) Ex.A-1, dated 28.9.1987, is a document executed by R.P.1 acknowledging receipt of a sum of Rs.1,00,001 from the first respondent wherein he has agreed to repay the said amount after the property is plotted out, sold and profits realised. The share of the profits agreed to be given to the first respondent was one fifth. (b) The next document is Ex.A-2, dated 8.8.1988. This has been executed by R.P.1 in favour of the first respondent in which Ex.A-1 is referred to. It is stated therein that as and when the properties are sold R.P.1 would deduct a sum of Rs.10,75,000 out of the gross profits and return the sum of Rs.1,00,001 together with one fifth share in the profits. (c) Next document is Ex.A-3, dated 16.4.1988. This is a receipt signed by R.P.1 acknowledging the payment of Rs.1,00,001 from the second respondent. (d) The next document is Ex.A-4. This is also dated 16.4.1988 and executed by R.P.1 in favour of the second respondent. In this document, there is a reference to the suit property and it is stated therein that this sum of Rs.1,00,001 has been taken to purchase the suit property and after purchase it would be sold in plots and the amount will be returned after realization of profits together with one fifth share in the profits. Therefore, a reading of Exs-1 to 4 would show that the liability to repay the amounts advanced arises only after the suit property is purchased, sold and R.P.1 has realised profits. Therefore, a reading of Exs-1 to 4 would show that the liability to repay the amounts advanced arises only after the suit property is purchased, sold and R.P.1 has realised profits. In fact, while in his written statement in para 27 it is stated thus: “In as much as the plaintiff had advanced money to this defendant as a loan transaction at the best the plaintiff could have filed a suit for the return of the money at the appropriate forum, and within the period of limitation.” In para No.33, this is what the revision petitioner would say: “The plaintiff and the second defendant knew very well about the agreement of sale deed 5.1.1991 entered into between this defendant and the intending purchasers. Further the plaintiff has agreed to receive the principal loan amount of Rs.1,00,000 and his due share of profits of Rs.5,000 (Rupees five thousand only) at the time when the final sale deed is executed by this defendant in favour of the intending purchasers. Similarly, the second defendant also agreed to receive the total sum of Rs,1,05,000 (Rupees one lakh and five thousand only) towards principal loan amount and share of profits at the time when the final sale deed is executed.” This would indicate that R.P.1 is complaining that the respondents have made a premature claim. A claim may be premature or belated, but not both. In the counter filed by R.P.1 in this Court on 20.6.1991, he had stated thus: “I am ready to give one fifth profit of his share which the plaintiff is legally entitled to get as his share of profit amount.” 11. There is also a reference in the counter that R.P.1 had entered into an agreement of sale of the suit property for a sale consideration of 11 lakhs in the month of January, 1991. The suit property itself was purchased by R.P.1 only 12.3.1990 by document No.1759 of 1990 in the office of the Sub-Registrar, Ambattur. In his evidence R.P.1 as D.W.3 has stated as follows: 12. In the second appeal, this Court rejected the case of the respondents 1 and 2 that there existed a partnership, but found from the documents that the relationship was that of a debtor and creditor; that there is an agreement to return the loan advanced together with one fifth share in the profits. In the second appeal, this Court rejected the case of the respondents 1 and 2 that there existed a partnership, but found from the documents that the relationship was that of a debtor and creditor; that there is an agreement to return the loan advanced together with one fifth share in the profits. This conclusion was arrived at on the basis of the construction of the documents and the finding of the trial Court that the relationship was that of a creditor and debtor. It was held in the second appeal that though the case of a loan was not pleaded it was an alternative case which the respondents 1 and 2 could have made but did and it was admitted by R.P.1 in the written statement that he could not say that he was taken by surprise since on the basis of the pleadings, the trial Court had framed an issue as to whether the transaction was a loan transaction and held that it was a loan. The first appellate Court Judge held that: “In the light of the elucidation of the foregoing factual aspects it is very clear that there is no partnership business between the plaintiff and the defendants and the transaction between the plaintiff and defendants is nothing but a loan transaction.” [Italics supplied] Therefore, this Court concluded that the amounts that were advanced as loan must be returned as agreed. For this purpose reliance was placed on Firm Srinivas Ram Kumar v. Mahabir Prasad A.I.R. 1951 S.C. 177 that when there was an admission by the defendant in his pleadings no injustice can possibly result if the alternative relief is granted. As to the question of limitation it is seen from the aforesaid paragraph that the suit property itself was purchased only on 12.3.1990 and the agreement with the proposed purchaser was entered in January, 1991 for a sum of Rs.11,00,000. Therefore, the respondents 1 and 2 will be entitled to claim return of the sum of Rs.1,00,000 advanced together with the one fifth share of profits within three years from the date on which R.P.1 has realised profits. At any rate, their right to recover the amount does not arise until R.P.1 purchased the property. The suit was file don 26.4.1991 well within time. So the claim is not barred as regards the first respondent. The second respondent only filed an injunction suit. At any rate, their right to recover the amount does not arise until R.P.1 purchased the property. The suit was file don 26.4.1991 well within time. So the claim is not barred as regards the first respondent. The second respondent only filed an injunction suit. But he filed his written statement in the other suit claiming the substantive relief. This written statement is dated 30.10.1992, also within three years from the date of agreement by R.P.1, with third parties, that is January, 1991 and also within three years from the date on which R.P.1 purchased the property, which is 12.3.1990. R.P.1 had agreed to return the amounts only after he purchased the suit property and plotted it out and realised profits there from. Therefore, the suit is definitely not barred by limitation. 13. Now, we shall look at the decisions relied on by the learned counsel for the revision petitioner. In Jamna Kuer v. Lal Bahadur A.I.R. 1950 F.C. 131 the Federal Court held that where there is an error apparent on the face of the record, whether the error occurred by reason of the counsel's mistake, it is not a circumstances which can affect the exercise of Court's review jurisdiction. There is no quarrel with this proposition, but none of these circumstances has been made out in this case. 14. In Jagjivandas Bikhabhai v. Sumanbhai Narottamdas A.I.R. 1967 Guj. 1 the Gujarat High Court held that though it was well-settled that a plaintiff who fails to establish his case can yet get a decree on the case of the defendant, he would not be entitled to get the relief if his claim was barred by limitation. This decision only reinforce the case of the respondents 1 and 2. In the instance it is already been demonstrated that the suit is not barred by time. This decision does not come to the aid of R.P.1. 15. In Ram Surat v. Shitla Prasad A.I.R. 1978 All. 270 the Allahabad High Court held that where an important piece of evidence was missed to be considered review was maintainable. This decision also does not help R.P.1. 16. In Mt. Rukhambai v. Ganpatrao Mt.Rukhambai v. Ganpatrao A.I.R. 1982 Nag. 177 it was held that an omission to notice a particular provision of law is a satisfactory ground for entertaining an application for review. This decision also does not help R.P.1. 16. In Mt. Rukhambai v. Ganpatrao Mt.Rukhambai v. Ganpatrao A.I.R. 1982 Nag. 177 it was held that an omission to notice a particular provision of law is a satisfactory ground for entertaining an application for review. As already stated the question of limitation is only in favour of respondents 1 and 2. 17. In Karim v. Abdul Rahiman Karim v. Abdul Rahiman A.I.R. 1935 Bom. 353 it was held that though a plea of limitation is taken for the first time in an appeal though not taken in trial Court the lapse is not material and the appellate Court must consider it. It has been considered in favour of respondents 1 and 2. 18. In Messrs. Trojan and Co. v. RM.N.N. Nagappa Chettiar Messrs. Trojan and Co. v. RM.N.N. Nagappa Chettiar A.I.R. 1953 S.C. 235 the Supreme Court held that the decision of a case cannot be based on grounds outside the pleadings of the parties and without an amendment the Court cannot grant the relief not asked for. In the instant case, the written statement sets out the case of loan and both the Courts accepted it. 19. In Om Prakash v. Ram Kumar 8199191 S.C.C. 441 the Supreme Court held that the plaintiff cannot place new cause of action on plea of defendant unless he amends the plaint or files separately. No new cause of action has been placed, the basis of loan is found in the same suit documents Exs.A-1 to A-4. So this decision will not help. 20. In the decision reported in Shanmugasundra Nadar v. Tamil Nadu Housing Board 8198892 L.W. 567 relied on by the learned senior counsel on the other hand the following paragraphs are relevant. “(iii) when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred, for, the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay (Vide: Collector, Land Acquisition, Anantnog v. Mst Kariji Land Acquisition, Anantnog v. Mst Kariji A.I.R. 1987 S.C. 1353. This Court wrongly preferred technical consideration). This Court wrongly preferred technical consideration). …The power to review is a restricted power which authorises the Court to look through the judgment not in order to substitute a fresh or second judgment but in order to correct it or improve it because some material which it ought to have considered had escaped consideration or failed to be placed before it for any other reason or because it suffers from a patent error which cannot be sustained by any process of reasoning. The Court cannot under cover of review arrogate to itself the power to decide the case over again because it feels then that the assessment of evidence etc., done formerly was faulty or even incorrect. An erroneous view of evidence or law is not a ground for review. A wrong exposition of the law, a wrong application of the law and failure to apply the correct law have been held to be not sufficient for review. If the Court was aware of what it was doing, even if the decision was erroneous, no review lies.” 21. In this case while deciding the second appeal this Court was aware that the relief that was granted was not what the plaintiff has asked for. But yet, it was granted since the defendant had admitted it and both the parties were aware of this alternative case between them. Further and more importantly the two Courts of fact found it was a loan. The relief was also granted because on the oral and documentary evidence placed before the Court it was evident that the receipt of loan was admitted. The liability to repay the one fifth share of profits was also not disputed, on the other hand it was categorically acknowledged. It was clear that the review petitioner after taking advantage of the loan given by the respondents 1 and 2 and after enriching himself with the aid of the said loan should be made to return it as per the agreement and as admitted by him in the interest of justice. [Italics given] 22. As held by the learned Judge in the decision relied on behalf of the respondents when substantial justice and technical consideration are pitted against each other substantial justice deserves to be preferred. [Italics given] 22. As held by the learned Judge in the decision relied on behalf of the respondents when substantial justice and technical consideration are pitted against each other substantial justice deserves to be preferred. It is not open to the revision petitioner to say that injustice has been done to him because he has been made to replay what he owes to the respondents 1 and 2. The question of limitation was not urged at the time of second appeal. Since the question of limitation is one of law, the review petitioner was permitted to advance this plea to show that there was an error apparent. The scope of review is limited yet this question has been dealt with in detail only to show that the suit is not barred by limitation and that the judgment does not need to be rectified: and there is neither “injudiciousness nor arbitrariness in the approach”. R.P.1 has not pointed out to the existence of either the provisions ofO.47 , Rule 1, C.P.C. or the three principles spelt out in para No.1 of the judgment. 23. The question regarding respondents 1 and 3 waiving their right to plead that it is a loan transaction is not a question that falls for review. In the judgment under review it has been held that this relief is inconsistent with the pleadings and yet the relief was granted, for the reasons already stated above. The R.P.1's complaint, as voiced by the counsel appears to be that the respondent's claim would have been settled had they only waited, but they chose to go to Court. However, what is owed, must be paid, there can be no hedging. The records, without delving deep, reveal the case of a loan which is not time-barred. The pleadings of R.P.1, his evidence and the factual findings of the Courts below were borne in mind and the alternative relief was granted inspite of the inconsistent pleadings of the respondents 1 and 2 in order to do justice and the anxiety to avoid injustice. 24. In these circumstances, there is no need for review. The review petition is therefore, dismissed with costs of Rs.5,000. S.S. ----- Petition dismissed.