Makhan Lal Harnarain v. Karamchand Thaper And Bros. Pvt. Ltd.
2004-06-22
VISHNUDEO NARAYAN
body2004
DigiLaw.ai
JUDGMENT Vishnudeo Narayan, J. 1. This appeal at the instance of the plaintiffs appellant has been preferred against the impugned judgment and decree dated 21-6-1989 and 5-7-1989 respectively passed in Money Suit No. 175 of 1974/52 of 1988 by Sri Udaykant Thakur, 4th Subordinate Judge, Dhanbad whereby and whereunder the suit of the plaintiffs-appellant was dismissed. 2. The plaintiffs-appellant had filed the said money suit for realisation of Rs. 2,69,570.63 paise along with pendente lite and future interest @12% per annum against the defendants -respondent on the basis of the Hundies detailed in Schedule A of the plaint. 3. The case of the plaintiffs-appellant (hereinafter referred to as the plaintiffs), in brief is that the plaintiffs are a partnership firm registered under the Indian Partnership Act and also registered under the provisions of Section 4 of the Bihar Moneylenders Act, 1938 and they carry on business as bankers, general merchants and commission agents. It is alleged that defendant- respondent No. 1 was the managing agent of several companies detailed in paragraph 3 of the plaint and for the facilities of financing the business of all their companies, the defendant No. 1 had entered into financial arrangement with the plaintiffs on terms of business upon the basis of a letter of personal guarantee dated 12-9-1959 executed by Karam Chand Thaper, Son of Lala Mansa Ram Thaper, the then managing director of defendant No. 1. The said Karamachand Thaper died on 29-3-1962 and after his death his son i.e. defendant No. 2 as managing director of defendant No. 1 with the sanction of the Board of Directors passed by a resolution of the Board of Directors in the meeting of the Board held on 28-12-1964 executed a deed of continuing guarantee on 4-1-1965 on terms and conditions mentioned therein and as per the terms of the said guarantee dated 4-1-1965 the plaintiffs were to advance to defendant No. 1 such sum of money as defendant No. 1 may from time to time require subject to the maximum total outstanding limit of Rs.
6,50,000/- only against Hundies after deducting discount @ (.35 percent of the Hundi amount and the Hundi shall be honoured by defendant No. 1 on their Calcutta office and if the same is honoured within 48 hours of presentation no interest will be payable in respect thereof and if the Hundi is honoured by defendant No. 1 within a week of presentation, interest shall be payable in respect of the Hundies not honoured within 48 hours @ 9% per annum from the date of presentation to the date of the Hundi being honoured. It is alleged that in terms of the business between the plaintiffs and defendant Nos. 1 and 2 coming on from last several years, the plaintiffs used to make weekly payment to collieries managed by defendant No. 1 to meet their weekly and monthly payments to worker against Hundi issued by the Central office, Bhowra payable by their head office at Calcutta and in course of the said business transaction the plaintiffs had made the cash payments to different collieries under the management of defendant No. 1 to the extent of Rs. 2,12,500/- against Hundies detailed in Schedule A of the plaint. The further case of the plaintiffs is that the Hundies detailed in Schedule A at the foot of the plaint were not retired by the defendant No. 1 on presentation and in spite of repeated demands the defendant Nos. 1 and 2 have not paid the amount due under the said Hundies and defendant No. 2 as per the terms of the continuing guarantee given by him as per the document dated 4-1-1965 is also personally liable to pay the dues under the said Hundies. It is further alleged that the defendants have not retired the Hundies concerned on the pretext that consequent upon the coming into force of the Coking Coal Mines (Emergency provisions) Ordinance, 1971 on 16-10-1971 their accounts with the bankers pertaining to coking coal mines stood frozen rendering them helpless in the matter of retirement of the plaintiffs Hundies. It is further alleged that the Nationalisation of the coking coal mines under the Coking Mines (Nationalisation) Act, 1972, however, does not absolve the defendants from the liabilities to the plaintiffs under the said Hundies.
It is further alleged that the Nationalisation of the coking coal mines under the Coking Mines (Nationalisation) Act, 1972, however, does not absolve the defendants from the liabilities to the plaintiffs under the said Hundies. Further case of the plaintiffs is that, the plaintiffs, however, preferred their claim before the Commissioner of payment under the provisions of the Coking Coal Mines (Nationalisation) Act, 1972 and their claim applications are still pending and they apprehend that there would be inordinate delay in the disposal of the numerous applications lodged by the claimants before the said Commissioner and further the total amount of the money credited to the account of the Coking Coal Mines concerned at the disposal of the Commissioner of payments for disbursement being too meagre and insufficient to meet the total amount of all the claims preferred, the prospect of the plaintiffs dues being realised from the Commissioner appears to be too slender and remote and thus the plaintiffs cannot wait indefinitely and get their claim time barred and hence the plaintiffs had filed the present suit. It is further alleged that the plaintiffs shall withdraw their claim applications pending before the Commissioner if their dues are paid in the meanwhile by the defendants and conversely, the plaintiffs will give due credit to the defendants for any payment that may be received from the Commissioner of payments. 4. Separate written statements were filed on behalf of defendant respondent No. 1 as well as defendant respondent No. 3. 5.
4. Separate written statements were filed on behalf of defendant respondent No. 1 as well as defendant respondent No. 3. 5. The case of defendant-respondent No. 1, inter-alia, is that the suit of the plaintiff is barred by the principle of res-judicata and the suit of the plaintiff is also not maintainable under the provisions of The Coking Coal Mines (Emergency Provisions) Ordinance 1971 and The Coking Coal Mines (Nationalisation) Act, 1972 and the Civil Court has no jurisdiction to adjudicate the present suit in view of the fact that the plaintiffs have filed claim applications before the Commissioner of Payments which is the only forum for preferment of claims against erstwhile owners as laid down under the Coking Coal Mines (Nationalisation) Act, 1972 (hereinafter referred to as the said Act) and it is not a fact that defendant No. 1 was the managing agent of M/s. Oriental Coal Ltd. and M/s. Tentulia Khas Colleries Ltd. and East Chora Colliery Company Ltd. rather defendant No. 1 was the managing agent of Companies mentioned in Sub-clause A to D of paragraph 3 of the plaint till 30-4-1970 and defendant No. 2 had stood as a guarantor but not in respect of collieries in which the defendant No. 1 was managing agent till 30-4-1970. It is also alleged that so far the alleged letter of guarantee dated 4-1-1969 is concerned, the defendants deny that it was ever agreed that Hundies would be drawn in their Calcutta office or that the plaintiff will be getting any amount towards any interest save and except what is payable under the law. It is also alleged that Hundies worth of Rs. 4,13,500/- were drawn on 7-10-1971 in the name of Oriental Coal Company Ltd. and Tentulia Khas Collieries Ltd. and out of which the plaintiff had received payment of three Hundies namely, Hundi No. WC/CO/ 14092 for Rs. 80,000/- drawn on Oriental Coal Company Ltds Bhowra colliery as well as Hundi No. WC/CO/14093 for Rs. 70,000/-on 16-6-1972 drawn on Bhowra colliery and Hundi No. WC/CO/14097 for Rs. 51,000/- on 16-6-1972 drawn at Central office and thus a sum of-Rs. 2,10,000/- was received by the plaintiff from Bharat Coking Coal Ltd. and as such the allegation that there were Hundies drawn to the extent of Rs. 2,12,500/- as alleged therein are not at all true and correct.
51,000/- on 16-6-1972 drawn at Central office and thus a sum of-Rs. 2,10,000/- was received by the plaintiff from Bharat Coking Coal Ltd. and as such the allegation that there were Hundies drawn to the extent of Rs. 2,12,500/- as alleged therein are not at all true and correct. It is alleged that Hundies were drawn in the name of different colliery companies and they were being honoured by the colliery companies and owing to sudden hand over of the colliery belonging to Oriental Coal Company Ltd. and Tentulia Khas Collieries Ltd. under the provisions of The Coking Coal Mines (Emergency Provisions) Ordinance, 1971 on 17-10-1971, the colliery accounts were freezon by the Custodian appointed under the said Ordinance and as such Hundies were not honoured and thereafter the plaintiff got payments of the Hundies drawn on 7-10-1971 amounting to Rs. 2,10,000/- and they should have persuaded defendant No. 3 to make payment of the balance amount as the Hundies were pledged documents and the plaintiff was entitled to recover the amount against coal bills or realisation of price realised by the custodian during the period of management i.e. between 7-10-1971 and 30-4-1972 and the plaintiff having not taken any steps to recover the balance sum from defendant No. 3 is now debarred from claiming any amount from this defendant and so far defendant No. 2 is concerned he will be deemed to have been discharged of the surety owing to inaction, omissions and commissions and negligence of the plaintiff in not taking proper steps for recovery of its dues from the custodian appointed by the central Government or from the defendant No. 3 who acted as custodian from 12-1-1972 to 30-4-1972.
It is also alleged that defendant No. 2 is not at all liable for the alleged sum claimed by the plaintiffs and the alleged guarantee was for the period upto 30-4-1970 when as managing director of the managing agent/ or secretaries and treasurers of the managing agent, defendant No. 2 agreed to stand as surety but with the taking over of the mines the defendant No. 2 ceased to be surety inasmuch as the collieries, for which the Hundies were drawn, vested in the Central Government free from all encumbrances and any of the defendants or the defendant No. 2 had no right to operate the bank account and/or to arrange for payment, if any, and the defendant No. 2 is not personally liable for the alleged claim of the plaintiff. The further case of the defendant is that the plaintiff has filed claim before the Commissioner of Payments appointed under the said Act and when the claim applications were pending before the Commissioner of Payments, the dues of the plaintiffs could easily be recovered from the amount payable to the owners of the collieries and it is false to say that the amounts awarded against the colliery are Very meagre or insufficient to meet the alleged claim of the plaintiff. It is also alleged that when the plaintiff had taken recourse to filing claim applications before the Commissioner of Payments under the said Act, the present suit cannot proceed as the said Act is a complete code by itself and it overrides the provisions of the other laws in view of Section 28 of the said Act lastly it has been alleged that the alleged Hundies were drawn in the name of Oriental Coal Company Ltd. and Tentulia Kas Collieries Ltd. and the plaintiff has deliberately suppressed these facts and defendant No. 3, Bharat Coking Coal Ltd. alone is liable to pay the alleged dues of the plaintiffs and defendant Nos. 1 and 2 are not at all liable to satisfy the claim of the plaintiff. 6. The case of defendant No. 3, Bharat Coking Coal Ltd., inter alia, is that defendant No. 3 has got no concern or liability in respect of the Hundies of the plaintiffs and it has got no liability to make payment to the plaintiffs in respect of the alleged claim.
6. The case of defendant No. 3, Bharat Coking Coal Ltd., inter alia, is that defendant No. 3 has got no concern or liability in respect of the Hundies of the plaintiffs and it has got no liability to make payment to the plaintiffs in respect of the alleged claim. It is alleged that the defendant No. 3 cannot be sued for the past liability of the owner of the colliery which accrued prior to 1-5-1972. The defendant No. 3 in accordance with the provisions of the Coking Coal Mines (Nationalisation) Act, 1972 closed and balanced the account of the colliery as on 30-4-1972, and prepared statements of account in respect of all income receipts and disbursements and expenditures relating to the colliery in question for the "period of management" i.e. from 17-10-1971 to 30-4-1972, which have been duly audited by the competent auditors appointed under the provisions of the said Act. Such statements of account have been delivered to the Commissioner of Payments, and also to the owner, in terms of the provisions of the said Act. The defendant No. 3 has or had no liability to the plaintiff in respect of the amount claimed in the plaint or to any part thereof, and no decree can be passed against the defendant No. 3. 7. In view of the pleadings of the parties the trial Court has framed the following issues for adjudication:-- (i) Has the plaintiff any cause of action of the present suit? (ii) Is the suit maintainable? (iii) Is the suit barred by law of limitation? (iv) Is the suit bad for misjoinder of parties? (v) Is the suit barred under the provisions of coal Mines (Nationalisation) Act, 1971? (vi) Is the suit barred under the provision of Bihar Money Lenders Act? (vii) Is the plaintiff entitled to a decree as claimed for? (viii) To what relief or reliefs, if any, the plaintiff is entitled to? 8. In view of the oral and documentary evidence on the record the learned trial Court while deciding the issue Nos. 2 and 7 has held that the plaintiff had filed claim cases bearing Nos.
(vii) Is the plaintiff entitled to a decree as claimed for? (viii) To what relief or reliefs, if any, the plaintiff is entitled to? 8. In view of the oral and documentary evidence on the record the learned trial Court while deciding the issue Nos. 2 and 7 has held that the plaintiff had filed claim cases bearing Nos. 3233 of 1973, 3234 of 1973, 3235 of 1973, 3236 of 1973 and 3232 of 1973 before the Commissioner of Payments in respect of the Hundies detailed in Schedule A of the plaint and all those claim cases were allowed by the commissioner of Payments and awards in respect thereof were also prepared and the claim of the plaintiff stands satisfied and thus the plaintiff stands debarred to file the present suit and the suit of the plaintiff is equally not maintainable. It has also been held that the plaintiff if dissatisfied and aggrieved by the order of Commissioner of Payments had the right to prefer an appeal within the period of 60 days from the date of the order to the principal Civil Court of original jurisdiction within the local limits of whose jurisdiction the coking coal mine is situated and the plaintiff having not exercised that right cannot now agitate the matter in the civil suit. It has also been held that there are two remedies in respect of his rights and the plaintiff has chosen one remedy and, therefore, he cannot have recourse to another remedy and the plaintiff is debarred from filing the suit in the Civil Court in this case in view of the fact that he had filed claim petitions before the Commissioner of Payments in respect of his dues. It has also been held that the suit of the plaintiff is also barred by the principle of res-judicata. Lastly it has been held that the suit of the plaintiff is not maintainable and the Civil Court has no jurisdiction to entertain the suit. In view of the finding aforesaid the learned trial Court has dismissed the suit of the plaintiffs. 9. Assailing the impugned judgment it has been submitted by the learned counsel for the plaintiffs that the learned court below has misconstrued the provisions of the Coking Coal Mines (Nationalisation) Act, 1972 and has erred in dismissing the suit of the plaintiff.
In view of the finding aforesaid the learned trial Court has dismissed the suit of the plaintiffs. 9. Assailing the impugned judgment it has been submitted by the learned counsel for the plaintiffs that the learned court below has misconstrued the provisions of the Coking Coal Mines (Nationalisation) Act, 1972 and has erred in dismissing the suit of the plaintiff. It has been submitted that Civil court has jurisdiction to adjudicate the claims of the plaintiffs in spite of the fact that the plaintiff has preferred the claims before the Commissioner of Payments appointed under the said Act and defendant No. 2 was the guarantor of the plaintiff for repayment of the loan advanced by the plaintiff to defendant No. 1 and there is no specific provision in the said Act for grant of the relief to the plaintiff against defendant No. 2. The defendant No. 1 is a private limited company and as a general rule the director or managing agent is not personally liable for the claims against the said private limited company subject to the contract to the contrary and here in this case Ext. 3 is a personal guarantee executed by defendant No. 2 in favour of the plaintiff for the repayment of the loan advanced by the plaintiff defendant No. 1 and in view of the personal guarantee as per Ext. 3, the defendant No. 2 is liable to satisfy the claims of the plaintiff and the learned Court below has, therefore, errect in holding that the Civil Court has no jurisdiction to adjudicate the suit. It has also been submitted that the learned Court below has also erred in holding that the claim of the plaintiff is barred by the principle of res-judicata and the suit is thus not maintainable. It has been contended that explanation 8 of Section 11 of the CPC has no application in this suit as it was inserted by way of amendment w.e.f. 1-2-1977 whereas the suit was instituted in the year 1974 and the said amendment has no retrospective operation.
It has been contended that explanation 8 of Section 11 of the CPC has no application in this suit as it was inserted by way of amendment w.e.f. 1-2-1977 whereas the suit was instituted in the year 1974 and the said amendment has no retrospective operation. In support of his contention reliance has been placed upon the ratio of the case of Gupteswar Prasad Singh v. Allahabad Bank (1988 BLT (Rep) 181 read with the judgment dated 10-11-1994 of the Division Bench of this Court in F. A. No. 48 of 1977 (R) (East Agarpathara Colliery Company (P) Ltd. v. United Commercial Bank) tied up with F. A. No. 287 of 1979 (R) (United Commercial Bank v. The East Ganoodih Colliery Company (P) Ltd.) Further reliance has been placed upon the ratio of the case of The Bank of Bihar Ltd. v. Dr. Damodar Prasad AIR 1969 SC 297 and Industrial Finance Corporation of India Ltd v. Cannanore Spinning & Weaving Mills Ltd. AIR 2002 SC 2841 . Viewed thus, the impugned judgment is unsustainable. 10. In contra it has been submitted by the learned counsel for the defendant respondents that the plaintiff preferred his claim by filing applications before the commissioner of Payments for realisation of the amount of Hundies along with interest detailed in Schedule A of the plaint and those claims applications were numbered as claim cases No. 3233 of 1973, 3234 of 1973, 3235 of 1973, 3236 of 1973 and 3232 of 1973 and there are documents on the record brought by the defendants coupled with the admission of the plaintiff himself that those claim cases were allowed in favour of the plaintiffs and award was prepared and payment was also made in terms of the award and thus the claim of the plaintiffs stands satisfied so far as the Hundies detailed in Schedule A of the plaint are concerned and if the plaintiff was dissatisfied with the order of the commissioner of payment he had the option to prefer an appeal within a period of 60 days from the date of the decision in the principal Civil Court of original jurisdiction within the local limits of whose jurisdiction the Coking Coal Mine is situated in terms of Section 23(10) of the said Act.
It has also been submitted that after filing the claim cases before the Commissioner of Payments, the plaintiff without waiting for the decision in the said claim cases filed this title suit and before the disposal of the said title suit by the trial Court the awards of the Commissioner of Payments were made in the aforesaid cases. It has also been submitted" that where there are two distinct forums for the redressal of the grievance of the plaintiff and he has moved one of the forums for redressal of the grievance, then the plaintiff had no right to move the other forum for the same purpose and the learned trial Court has rightly held on this score that the suit of the plaintiff is not maintainable. In support of his contention reliance has been placed upon the ratio of the case of Hoti Lal and etc. v. State of U.P., AIR 2002 Allahabad 257 : 2002 All LJ 1964. It has also been submitted that on the appointed day i.e. 1-5-1972 as per Section 4 of the said Act right, title and interest of the owners in relation to the coal mines specified in the first schedule shall stand transferred to and vested absolutely in the Central Government free from all encumbrances and the claim of the plaintiff based on the Hundies are in respect of the period prior to the appointed day and under the scheme of the said Act compensation was earmarked for the coking coal mines in the First Schedule of the said Act and accordingly fund was placed with the Commissioner of Payments for the purpose of disbursing the amount payable to the owner of such coking coal mines.
Commissioner of Payments was appointed and every person having a claim against the owner of the coking coal mines had a right to prefer such claim before the Commissioner of Payments within 30 days from the specified date as per provision contained under Section 23 of the said Act and the Commissioner of Payments shall after such investigation as may in his opinion be necessary and after giving the owner of the coking coal mines an opportunity of refuting the claim and after giving the claimant a reasonable opportunity of being heard in writing admit or reject the claim in whole or in part and any investigation before the Commissioner shall be deemed to be a judicial proceeding and the Commissioner of Payments shall be deemed to be a Civil Court. It has also been submitted that the Commissioner of Payments after proper investigation into the matter allowed the claims of the plaintiffs based on the Hundies detailed in Schedule A of the plaint along with interest and the order of the Commissioner of Payments had already reached its finality in the absence of any appeal having been preferred by the plaintiffs against its order and, therefore, the claim of the plaintiffs in this suit stands barred by the principle of res-judicata and the learned Court below has rightly held so in the impugned judgment. In support of his contention reliance has been placed upon the ratios of the case of State of U.P. v. Nawab Hussain, (1977) 2 SCC 806 : AIR 1977 SC 1680 , Sulochana Amma v. Narayanan Nair, AIR 1994 SC 152 and Rajendra Kumar v. Kalyan (dead) by L.Rs., AIR 2000 SC 3355. It has also been contended that defendant No. 2, L.M. Thapar was the managing director of defendant No. 1 and defendant No. 1 and the plaintiff No. 1 have entered into financial arrangement and for the continuation of the said financial facilities as per the resolution of the Board of Directors of defendant No. 1, whereby defendant No. 2 as managing director of the Company was requested to give and execute a personal guarantee in favour of plaintiff No. 1 for agreeing to encash Hundies of defendant No. 1 to the enhanced limit of Rs. 6,50,000/- as per Ext.
6,50,000/- as per Ext. 4 and in pursuance of that resolution defendant No. 2 executed a document dated 4-1-1965 of continuing guarantee in which it has been stated that in the event of defendant No. 1 failing to pay the dues of the plaintiff No. 1 as per terms of the business, defendant No. 2 shall pay the dues and on his failure so to do the plaintiff No. 1 will be at liberty to proceed against him personally and his person and property shall be liable for the dues of the plaintiff No. 1 and in view of the resolution of the Board of Directors of defendant No. 1, the continuing guarantee making defendant No. 2 personally liable for the dues of plaintiff No. 1 cannot be viewed or construed as a personal guarantee in his individual capacity for dues of plaintiff No. 1 and when the coking coal mines for which Hundies were drawn vested in the Central Government free from all encumbrances then in that case it shall be deemed that the said guarantee has become infructuous and thus defendant No. 2 cannot be personally liable for the dues, if any, of the plaintiffs which remained unpaid in spite of the awards made in favour of the plaintiff by the Commissioner of Payments. Lastly it has been contended that the Civil Court has no jurisdiction in the facts and circumstances of this case to adjudicate the claim of the plaintiffs and the learned trial Court has rightly dismissed the suit of the plaintiffs and there is no illegality in the impugned judgment. 11. Following points arise for adjudication in this appeal :-- (i) Whether the plaintiff is entitled to realise Rs. 2,69,570.73 P together with pendente lite and future interest @ 12% per annum from the defendants and specially from defendant No. 2 in view of the document of continuing guarantee executed by him making him personally liable for the same? (ii) Whether the plaintiff is entitled to realise the said amount from defendant No. 2 in the existence of a special forum for the redressal of his claim? (iii) Whether the claim of the plaintiff is barred by principle of res judicata? (iv) Whether the Civil Court has jurisdiction to adjudicate the suit of the plaintiff in the existence of a special forum for redressal of his claim? 12.
(iii) Whether the claim of the plaintiff is barred by principle of res judicata? (iv) Whether the Civil Court has jurisdiction to adjudicate the suit of the plaintiff in the existence of a special forum for redressal of his claim? 12. In view of the pleadings of the parties and the evidence oral and documentary on the record the following facts are admitted facts :-- Plaintiff No. 1 M/s. Makhan Lal Har Narayan @ Hari Narayan is a partnership firm registered under the Indian Partnership Act and it carried the business as bankers, general merchants and commission agents having its office at Jharia in the District of Dhanbad and it also stands registered under the provisions of Section 4 of Bihar Moneylenders Act, 1938. Ext. 1 and Ext. 2 are referred to in respect thereof. Defendant No. 1 M/s. Karamchand Thapar and Brothers (P) Limited is a company duly incorporated under the Indian Companies Act and its registered office is at Calcutta and its Central Office is at Bhowra, Jharia in the District of Dhanbad. Defendant No. 1 was the managing agent/secretaries and treasurers of the several companies detailed in Schedule A and Schedule B of Ext. 3 and a reference to that has been made in Paragraph 3 of the plaint. For the facilities of financing business of all their companies, defendant No. 1 had entered into financial arrangements with the plaintiffs firm on terms of business upon the basis of a letter of guarantee dated 12-9-1959 executed by Karamchand Thapar, who was the then managing director of defendant No. 1 and on his death his son defendant No. 2 became managing director of the defendant No. 1 and with the sanction of the Board of Directors passed by a resolution in the meeting of the Board held on 28-12-1964 (Ext. 4) Defendant No. 2 executed a deed of guarantee dated 4-1-1965 in respect thereof in favour of the plaintiff No. 1. The said deed of guarantee is Ext. 3. Schedule C of Ext. 3 is relevant which runs thus :-- Terms of Business ; "1. You will advance to M/s. Karamchand Thapar and Brothers (P) Limited such sum of money as they may from time to time require, subject to the maximum total outstanding limit of Rs. 6,50,000/- against Hundies after deducting the discount @ 0.35 P Percent of the Hundi amount. 2.
3 is relevant which runs thus :-- Terms of Business ; "1. You will advance to M/s. Karamchand Thapar and Brothers (P) Limited such sum of money as they may from time to time require, subject to the maximum total outstanding limit of Rs. 6,50,000/- against Hundies after deducting the discount @ 0.35 P Percent of the Hundi amount. 2. The Hundi shall be drawn by M/s. Karamchand Thapar and Brothers (P) Limited on their Calcutta Office and if the same be honoured within 48 hours of presentment, no interest shall be payable in respect thereof. 3. The Hundies shall be honoured by M/s. Karamchand Thapar and Brothers (P) Limited, within a week of presentment, interest shall be payable in respect of Hundies not honoured within 48 hours @ 9% per annum from the date of presentment to the date of the Hundies being honoured." There is also a stipulation in Ext. 3 that in the event of the said M/s. Karamchand Thapar and Brothers (P) Limited failing to pay the dues as per terms of business, defendant No. 2 shall pay to plaintiff No. 1 dues at Jharia and on his failure so to do plaintiff No. 1 will be at liberty to proceed against him personally and his person and property shall be liable for its dues. In course of the said business transaction plaintiff No. 1 had made cash payments to different collieries under the management of defendant No. 1 to the extent of Rs. 2,12,500/- as against Hundies, detailed in Schedule A of the plaint and in this connection Ext. 6, 6/D, 6/A, 6/C and 6/B are referred to and the Hundies marked Ext. 6, 6/D and 6/A are dated 7-10-1971 whereas the Hundies Ext. 6/C and 6/B are dated 9-10-1971 and 16-10-1971 respectively. The aforesaid Hundies were not retired by defendant No. 1 on presentation and defendant Nos. 1 and 2 have also not paid the amount due under the said Hundies. The Coking Coal Mines (Emergency Provisions) Ordinance, 1971 came into force on 16-10-1971 and the management of the coking coalmines was taken over under the provisions of the said Ordinance from the appointed date mentioned under the said ordinance which is 17-10-1971 and thereafter coking coal mines were nationalized and it vested in the Central Government under the provisions of Section 4 of the said Nationalisation Act.
The plaintiffs preferred its claim in respect of the unpaid amount of the Hundies aforesaid before the Commissioner of Payments under Section 23 of the said Nationalisation Act and their claim petitions were registered as Claim Case No. 3234/1973, 3233/ 1973, 3232/1973, 3235/1973 and 3236/ 1973. All the aforesaid claim cases were allowed by the Commissioner of Payments and award was prepared in favour of the plaintiff and cheques were issued for payment by the Commissioner of Payments. Claim Case No. 3234/1973 is in respect of Hundi bearing No. WC/CO/14095 dated 7-10-1971 for Rs. 50,000/- (Ext. 6/D) and the order of the Commissioner of Payments in respect thereof is dated 7-10-1982 (Ext. A) whereby and whereunder the claim of the plaintiff of Rs. 50,000/- was allowed along with simple interest @ 9% thereon from 7-10-1971 to 30-4-1972 and thereafter simple interest on the principal sum till the date of payments at the rate accruing on the amount deposited by the Commissioner of Payments under Section 12 read with Section 24A of the said Act and it will rank at 5th priority being unsecured debt and a cheque of Rs. 12,882/- only was issued in pursuance of the order aforesaid on 5-9-1984 in favour of the plaintiff. Claim Case No. 3233/1973 is in respect of Hundi No. WC/CO/14094 dated 7-10-1971 for Rs. 55,900/- (Ext. 6). The Commissioner of Payments vide its order dated 27-4-1981 (Ext. A/1) allowed the claim of the plaintiff amounting to Rs. 78,830/- which includes Rs. 22,930/- as interest @ 4% per annum on the principal amount from 1-5-1972 to the date of the order. However, cheque was issued in favour of the plaintiff for a sum of Rs. 11,824.50P only on 5-9-1984, in view of the fact that the admitted claim of Rs. 78,830/- has been abated in equal proportion due to amount being insufficient in terms of Section 24 of the said Act. Claim Case No. 3232/1973 is in respect of Hundi No. WC/CO/15107 dated 16-10-1971 for Rs. 5,000/- (Ext. 6/B) and Commissioner of Payments vide its order dated 6-2-1979 (Ext. A/2) allowed the claim of the plaintiff amounting to Rs. 5225/- which includes Rs. 225/- being the amount of interest from the month of November, 1971 to 30-4-1972. However, future interest was not allowed. In pursuance of the order aforesaid cheque was issued in favour of the plaintiff for a sum of Rs.
A/2) allowed the claim of the plaintiff amounting to Rs. 5225/- which includes Rs. 225/- being the amount of interest from the month of November, 1971 to 30-4-1972. However, future interest was not allowed. In pursuance of the order aforesaid cheque was issued in favour of the plaintiff for a sum of Rs. 783.75P only in view of the fact that the admitted claim of Rs. 5225/- has abated in equal proportion due to amount being insufficient in terms of Section 24 of the said Act. Claim Case No. 3235/1973: is in respect of Hundi No. WC/CO/14096 dated 7-10-1971 for Rs. 40,600/- (Ext. 6/ A). The Commissioner of Payments vide its order dated 30-4-1979 (Ext.A/3) allowed the claim of the plaintiff for Rs. 48,967/- which includes therein a sum of Rs. 2367/- being the amount of interest. The plaintiff as per the petitions dated 1-4-1989 has admitted to have received Rs. 48,967/- aforesaid from the Commissioner of Payments. There is further admission in the said petition that Claim Case No. 3236/1973 has been allowed by the Commissioner of Payments. The Claim Case No. 3236/1973 is in respect of Hundi No. WC/CO/15102 dated 9-10-1971 for Rs. 55,000/- (Ext.6/C) and the plaintiff has admitted to have received a sum of Rs. 57,766.55P as per the order of the Commissioner of Payments and the amount of Interest being Rs. 2766.55P stands included therein. Thus the plaintiffs had received a sum of Rs. 1,32,223.25P in respect of his claims as per orders of the Commissioner of Payments referred to above during the pendency of this, suit and by giving a set off of the said amount as per the averments made in the plaint, the claim of the plaintiff now remains only in respect of Rs. 1,37,347.48P only. 13. Point No. (iv) : In the case of Bharat Coking Coal Limited v. United Commercial Bank and Anr., 1988 BLT (Rep) 344 it has been observed by the Single Bench of this Court which runs thus :-- "It is true that Section 9 of the Code of Civil Procedure provides that the Civil Courts shall have jurisdiction to try all suits of civil nature except those which are barred expressly or by necessary implications.............
It would be manifest that under the Nationalisation Act although no provision has been made expressly barring the jurisdiction of the Civil Courts, the legislature in its wisdom did not think it necessary to do so as the provisions are so explicit and clear that no other inference can be arrived at, but to hold that the jurisdiction of the Civil Court is barred by necessary implication. If that be so, it must be held that the suit instituted by the plaintiff was not maintainable." Prior to that a Single Bench of this Court in the case of Gupteswar Prasad Singh (supra) has observed which runs thus :-- "That under Section 23 of the Nationalisation Act, provisions have been made whereunder parties having any claim against the erstwhile owner of a coal mine which has vested under the provisions of the Nationalisation Act may prefer a claim before the Commissioner of Payments and the Commissioner of Payments, if the claim is allowed, shall pay keeping in view the provisions of that section, to the claimants out of compensation which was deposited by the Central Government with the Commissioner of Payments in respect of coal mine in question............... From the scheme of Section 23 of the Nationalisation Act, it will appear that payment, if any, is to be made out of the available fund deposited with the Commissioner of Payments of the coal mine in question. The section has classified different debts in different classes. Some classes of debts will have priority over the other classes of debts. The amount deposited as compensation in respect of the colliery in question may be even insufficient to meet all the debts in full or in part. If a claim is allowed by the Commissioner of payments, for the purpose of recovery of amounts allowed, the claimant shall have to wait for disposal of all the claim cases and shall receive the amount, if any, in terms of Section 23 of the Nationalisation Act for the purpose of recovery of any money allowed by the Claims Commissioners, a claimant cannot pursue any property other than the compensation deposited with the Commissioner of Payments............................................................ .... Jurisdiction of Civil Court will not (sic) inferred ordinarily. Any statute ousting jurisdiction must expressly provide that or the provision must be such that from which by necessary implication, exclusion must (sic) followed.
.... Jurisdiction of Civil Court will not (sic) inferred ordinarily. Any statute ousting jurisdiction must expressly provide that or the provision must be such that from which by necessary implication, exclusion must (sic) followed. As noticed above, Section 23 of the Nationalisation Act has created a forum for entertaining claim against the erstwhile owner of a coal mine. The claimant in that case must satisfy himself, in the event the claim is allowed, with whatever he receives from out of the compensation deposited with the Commissioner of Payments. A creditor of the erstwhile owner if does not prefer any claim or if he preferred, fails to prove his claim shall be excluded from the disbursements made by the Commissioner. There is no provision in the Nationalisation Act which expressly or by necessary implication, ousts the jurisdiction of the civil Court.................. Right to recover the debt by a creditor has been created under the general law and not under the Nationalisation Act. The rule is if a right is created under a statute, a person must seek relief before the forum created under that statute. That is not the provision here. Forum under Section 23 is an additional forum. For all these reasons, it must be held that Civil Court has jurisdiction to entertain the suit." It appears that the ratio of the case of Gupteswar Prasad Singh (Supra) was not brought to the notice of the Bench at the time when the judgment in M/s. Bharat Coking Coal Limited (supra) was rendered. In view of the two inconsistent decision of this court the matter was referred to the larger Bench in the case of East Agarpathara Colliery Company (P) Ltd. v. United Commercial Bank and Anr. (F. A. No. 48 of 1977 (R)) tied up with the case of United Commercial Bank v. East Ganoodih Colliery Company (P) Ltd. (F. A. No. 807 of 1979 (R)) and the moot question involved in both the appeals is as to whether in view of the provision of the Coking Coal Mines (Nationalisation) Act, 1972, the jurisdiction of Civil Court to entertain claim of creditors and others is barred.
The Division Bench of this Court in paragraph 9 of its judgment has settled the controversies in respect thereof and has thus observed :-- "We are, therefore, of the view that the decision of this Court in Gupteswar Prasad Singhs case reported in 1988 BLT 181 holds the field. The subsequent decision of learned Single Judge, reported in 1988 BLT 344 cannot be treated as a binding precedent and must be ignored by the Bench deciding these appeals. Obviously, if the matter is taken in appeal to a superior Court this question may be urged, if so advised. We do not wish to decide this question ourselves. We only declare that the decision reported in 1988 BLT 344 (AIR 1989 Patna 153) Coking Coal Ltd. v. United commercial Bank not to be treated as a binding precedent." In view of the ratio of the Division Bench referred to above it has now become settled that forum under Section 23 of the said Act is an additional forum and it does not oust the jurisdiction of the Civil Court under the general law and the suit before the Civil Court is maintainable and besides that the liability of the erstwhile owner of a coal mine does not cease due to vesting of coal mines. The learned Court below has, therefore, erred in coming to the finding that Civil court has no jurisdiction to adjudicate the suit of the plaintiff and thus it is not maintainable and the said finding of the learned trial Court cannot be sustained. This point is, therefore, decided in favour of the plaintiffs. 14. Point Nos. (i), (ii), and (iii): All these three points are taken together for the sake of convenience as they are interconnected. It will admit of no doubt that for the facilities of financing business of all their companies defendant No. 1 had entered into financial arrangements with plaintiff No. 1 on terms of business upon the basis of letter of guarantee dated 4-1-1965 executed by defendant No. 2 in favour of plaintiff No. 1. The said deed of guarantee is Ext. 3 in this case. It is relevant to mention here that defendant No. 2 is the managing director of defendant No. 1. There is a stipulation in Ext. 3 that in the event of defendant No. 1 failing to pay the dues as per terms of business incorporated in Ext. 3.
The said deed of guarantee is Ext. 3 in this case. It is relevant to mention here that defendant No. 2 is the managing director of defendant No. 1. There is a stipulation in Ext. 3 that in the event of defendant No. 1 failing to pay the dues as per terms of business incorporated in Ext. 3. Defendant No. 2 shall pay to plaintiff No. 1 dues at Jharia and on his failure so to do plaintiff No. 1 will be at liberty to proceed against him personally and his person and properties shall be liable for its dues. The Board of directors of defendant No. 1 passed a resolution in the meeting of the Board held on 28-12-1964 whereby and whereunder defendant No. 2, the managing director of the company was directed to give and execute a personal guarantee in favour of plaintiff No. 1 for their agreeing to encash Hundies of the company to the enhanced limit of Rs. 6,50,000/-. This resolution is Ext. 4. In pursuance of the said resolution defendant No. 2 executed the deed of continuing guarantee on 4-1-1965 (Ext.3) in favour of plaintiff No. 1. The terms of continuing guarantee incorporated in Ext. 3 aforesaid runs thus :-- "And I hereby agree that-- (a) This continuing guarantee shall remain in force unless I revoke it, as to future transactions by one months prior notice to you in writing. (b) In the event of my death, God forbid, this letter of continuing guarantee shall not stand revoked but shall remain in force for two months thereafter as regards future transactions. (c) Any variance made in the terms of business laid down in the Schedule C hereto, even though made without my prior approval shall not discharge me as to transactions subsequent to the variance. (d) This letter of continuing guarantee shall remain in full force in spite of any change in the Constitution of your firm and in spite of your guarantee to M/s. Karam Chand Thapar and Brothers (P) Limited time or any of the indulgence to pay their dues.
(d) This letter of continuing guarantee shall remain in full force in spite of any change in the Constitution of your firm and in spite of your guarantee to M/s. Karam Chand Thapar and Brothers (P) Limited time or any of the indulgence to pay their dues. (e) In the event of the said M/s. Karam chand Thapar and Brothers (P) Limited, failing to pay your dues as per terms of business, I shall pay your dues at Jharia and on my failure so to do, you will be at liberty to proceed against me personally and my person and property shall be liable for your dues." The deed of guarantee (Ext. 3) was forwarded to plaintiff No. 1 on 9-1-1965 vide Ext. 5. In course of the said business transactions plaintiff No. 1 had made cash payments to different collieries under the management of defendant No. 1 to the extent of Rs. 2, 12, 500/- as against the Hundies of defendant No. 1 detailed in Schedule A of the plaint and these Hundies are Ext. 6 series and the aforesaid Hundies were not retired by defendant No. 1 on presentation and neither defendant No. 1 nor defendant No. 2 has also paid the amount under the said Hundies. In the meantime, The Coking Coal Mines (Emergency Provisions) Ordinance, 1971 came into force on 16-10-1971 and the management of the coking coal mines was taken over by the Central Government under Section 3 of the said Ordinance w.e.f. the appointed date i.e. 17-10-1971 as its management has vested in the Central Government from the appointed date. The said ordinance has been replaced by The Coking Coal Mines (Emergency Provisions) Act, 1971. Thereafter coking coal mines were nationalized and it vested in the Central Government free from all encumbrances under the provisions of Section 4 of Coking Coal Mines (Nationalisation) Act, 1972 w.e.f. 1-5-1972. All the Hundies in question are prior to the vesting of the management in the Central Government.
Thereafter coking coal mines were nationalized and it vested in the Central Government free from all encumbrances under the provisions of Section 4 of Coking Coal Mines (Nationalisation) Act, 1972 w.e.f. 1-5-1972. All the Hundies in question are prior to the vesting of the management in the Central Government. P. W. 1, Bhagwati Prasad Agarwal, a partner of the plaintiff No. 1 firm, has deposed in paragraph 3 of his evidence that there was a business transaction between plaintiff No. 1 and defendant No. 1 and plaintiff No. 1 is to finance the business of defendant No. 1 and defendant No. 2 was the guarantor of defendant No. 1 in respect of the transaction between defendant No. 1 and the plaintiff No. 1. He has further deposed that defendant No. 1 used to draw Hundies which the plaintiff No. 1 used to honour it and used to make payment against the said Hundies. He has further deposed that the amount of five Hundies is due with defendant No. 1 and they have not retired those five Hundies. Other two witnesses of the plaintiff are formal witnesses who have proved some documents. No oral evidence has been brought on behalf of defendants. The plaintiff No. 1 in view of the provision of Section 23 of the said Act preferred their claims vide claim Cases No. 3234/1973, 3233/1973, 3232/1973, 3235/ 1973 and 3236/1973 before the Commissioner of Payments in respect of the unpaid amount of the Hundies in question which were allowed and awards were made in favour of plaintiff No. 1 and cheques were also issued by the commissioner of Payments in favour of plaintiff. However, the full claim of the plaintiff No. 1 was not paid in view of the fact that the loan amount under the Hundies aforesaid was an unsecured debt being lowest under the priority as per the provision of the said Act and the plaintiff had received a sum of Rs. 1,32,223.25 Ps. in all in respect of his claims as per orders of the commissioner of Payments during the pendency of the suit and by giving a set off of the amount, the claim of the plaintiff is still outstanding in respect of Rs. 1,37,347.48 P. I have detailed in respect thereof in paragraph 12 above.
1,32,223.25 Ps. in all in respect of his claims as per orders of the commissioner of Payments during the pendency of the suit and by giving a set off of the amount, the claim of the plaintiff is still outstanding in respect of Rs. 1,37,347.48 P. I have detailed in respect thereof in paragraph 12 above. A contract of guarantee is a contract to perform the promise or discharge the liability of a third person in case of his default. It is needless to say that a guarantee is a promise to answer for the payment of some debt or the performance of some duty, in case of the failure of another party, who is in the first instance liable to such payment or performance. A contract of guarantee may be made by a company by writing under its common seal or on behalf of a company by any person acting under its authority, expressed or implied. The directors of the company may bind themselves personally by a guarantee which they sign or adopt. It is well settled proposition of law that the liability of the surety is co-extensive with that of principal debtor unless it is otherwise provided by the contract. A creditor may proceed against the surety even if he may have relief against the principal debtor in some other proceedings. In the case of Bank of Bihar Ltd. (supra) the Apex Court has thus observed :-- "Under Section 128, save as provided in the contract, the liability of the surety is coextensive with that of the principal debtor. The surety thus becomes liable to pay the entire amount. His liability is immediate. It is not deferred until the creditor exhausts, his remedies against the principal debtor. In the absence of some special equity the surety has no right to restrain an action against him by the creditor on the ground that the principal is solvent or that the creditor may have relief against the principal in some other proceedings. Likewise where the creditor has obtained a decree against the surety and the principal, the surety has no right to restrain execution against him until the creditor has exhausted his remedies against the principal.................................... It was the duty of the surety to pay the decretal amount. On such payment he would be subrogated to the rights of the creditor under Section 140.
It was the duty of the surety to pay the decretal amount. On such payment he would be subrogated to the rights of the creditor under Section 140. The security would become useless if rights against the surety could be so easily cut down." In any event the right conferred upon the plaintiff No. 1 as creditor in terms of the deed of guarantee cannot but be stated to be an independent right which stands recognized by the statute and thus cannot in any manner be whittled down without a just cause. Here in this case the contract of guarantee is not a contract regarding the primary transaction but it is an independent transaction containing independent and reciprocal obligations and it is on principal to principal basis and by reasons wherefor the statute has provided both the creditor and the guarantor some relief as specified between Section 130 to 141 of the Contract Act. The creditor had three sources of repayment i.e. the creditor may sue the principal debtor, sell the securities on the basis of which the loan has been advanced; or sue the surety that is the guarantor. All these remedies may be exercised at any time simultaneously or contemporaneously or successively or not at all. It is relevant to state here that the liability of the guarantor cannot but be stated to be a strict liability and even if the principal debtor is discharged from his liability unless such discharge is through the act of the creditor without the consent of the surety, the creditors right of action against the surety is preserved. A bare perusal of the provisions of the said Act will indicate that there is no discharge of the liability of the principal debtor leave alone that of the surety and the liability of the principal debtor does not in any way come to an end neither that of the guarantor.
A bare perusal of the provisions of the said Act will indicate that there is no discharge of the liability of the principal debtor leave alone that of the surety and the liability of the principal debtor does not in any way come to an end neither that of the guarantor. The said Act only deals with the liability of a company which is nationalized and there is no provision therein which in any way affect any liability of a guarantor who is bound by the deed of guarantee executed by it and thus the right of the plaintiff No. 1 to recover money from defendant No. 2 who stood guarantor arises out of the terms of the deed of guarantee which is not in any way superseded or brought to a naught merely because the plaintiff No. 1 would not be able to recover money from the principal debtor i.e. defendant No. 1. It. may here be added that even as a result of the said Act the liability of the principal debtor does not come to an end. It is only the mode to recover which is referred to in the said Act. The factual matrix of the case of I. F. C. I. Ltd. (supra) is similar to a great extent of the present case. Paragraphs 44 and 45 of the judgment rendered in the case of I. F. C. I. Ltd. (supra) are relevant. For proper appreciation I quote the relevant excerpt from the aforesaid paragraphs which runs thus :-- "............................................ the Nationalisation Act came into force in the year 1974 by reason of which the assets of a debtor company stand vested in the State. In terms of the provisions of Nationalisation Act there was appointed a Commissioner of Payments and by reason of the factum of the appellant herein being a secured creditor, lodged its claim before the commissioner of Payments in its entirety. The Commissioner of Payments, however, in terms of the provisions of the Nationalisation Act itself allowed a major portion of the claim but as regards the remainder, expressed its inability to pass any order and the remainder or the balance of the claim stands out to be the subject matter of the present proceedings................
The Commissioner of Payments, however, in terms of the provisions of the Nationalisation Act itself allowed a major portion of the claim but as regards the remainder, expressed its inability to pass any order and the remainder or the balance of the claim stands out to be the subject matter of the present proceedings................ The doctrine of frustration as envisaged in terms of Section 56 of the Contract Act does not and cannot have any manner of; application in the contextual facts. It is on the failure of the principal debtor to pay the entire sum due, the guarantee stands invoked-the Contract of Guarantee has no co- relation with that of the Nationalisation Act neither is dependent thereon. It is an independent contract and in all fairness has to be honoured to fulfil the contractual obligation between the surety and the creditor............................. .............................. On the factual score, a Civil Suit stands filed and thereafter the claim was preferred before the Commissioner of Payments in terms of the Nationalisation Act. The right of a claimant to proceed before the commissioner and to file a suit to recover the amount due to him cannot, in our view on the perusal of the Statute be taken away, though the Claimant would not be entitled to recover any amount at both the ends. The amount paid by the Commissioner would stand reduced to the extent of payment by the Commissioner. The filing of the Civil Suit thus is not barred as has been contended by Mr. Anand that once the claim stands paid, though partially, question of proceeding with the suit would not arise." In view of the ratio of the Apex Court in the case of I. F. C. I. Ltd. (supra) which I have quoted above, the ratio of the case of Hoti Lal (supra) relied upon by the learned counsel for the defendants has no application in the given facts of this case. Thus the plaintiff is entitled to realise a sum of Rs. 1,37,347.48P. being the remainder of the dues from defendant No. 1 and defendant No. 2 jointly or severally along with interest at the contractual rate of 9% per annum from the date of filing of the suit till its realisation.
Thus the plaintiff is entitled to realise a sum of Rs. 1,37,347.48P. being the remainder of the dues from defendant No. 1 and defendant No. 2 jointly or severally along with interest at the contractual rate of 9% per annum from the date of filing of the suit till its realisation. However, the plaintiff is not entitled to realise the said amount from defendant No. 3 in view of the fact the collieries in question have vested in the Central Government free from all encumbrances under the provisions of the said Act. 15. Section 11 of the Code of Civil Procedure mandates that no Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a formal suit between the same parties or between parties under whom they or any of them claim, litigating under the same title in a Court competent to try such subsequent suit or in a suit in which issue has been subsequently raised and has been heard and finally decided by the said court. Explanation VIII of Section 11 aforesaid mandates that an issue heard and finally decided by a Court of limited jurisdiction, competent to decide such issue, shall operate as res judicata in a subsequent suit, notwithstanding that such Court of limited jurisdiction was not competent to try such subsequent suit or the suit in which such issue has been subsequently raised. Explanation VIII of Section 11 aforesaid has been inserted by virtue of the amendment by Amending Act 1976 w.e.f. 1-2-1977 and it provides that the decision of a Court of limited jurisdiction on an issue within the competence of such court would operate as res judicata in a subsequent suit, notwithstanding its lack of competence to try the subsequent suit. In the case of Rajendra Kumar (supra) it has been observed that Explanation VIII of Section 11 aforesaid inserted by Amending Act, 1976 had retrospective application and applied to all suits pending on the date of the enforcement of the Amending Act and the doctrine of res-judicata or constructive res judicata predominantly is a principle of equity, good conscience and justice and it would neither be equitable nor fair nor in accordance with the principles of natural justice that the issue concluded earlier ought to be permitted to be raised later in a different proceeding.
In the case of State of U. P. (supra) it has been observed by the Apex court which runs thus :-- The principle of estoppel per res judicata is "the broader rule of evidence which prohibits the reassertion of a cause of action". This doctrine is based on two theories : (i) The finality and conclusiveness of judicial decisions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) The interest of the individual that he should be protected from multiplication of litigation. It therefore serves not only a public but also a private purpose by obstructing the reopening of matters which have once been adjudicated upon. It is thus not permissible to obtain a second judgment for the same civil relief on the same cause of action, for otherwise the spirit of contentiousness may give rise to conflicting judgments of equal authority, lead to multiplicity of actions and bring the administration of justice into disrepute. It is the cause of action which gives rise to an action and, that is why it is necessary for the courts to recognize that a cause of action which results in a judgment must lose its identity and vitality and merge in the judgment when pronounced. It cannot therefore survive the judgment, or give rise to another cause of action on the same facts. This is what is known as the general principle of res judicata. But it may be that the same set of facts may give rise to two or more causes of action. If in such a case a person is allowed to choose and sue upon one cause of action at one time and to reserve the other for subsequent litigation, that would aggravate the burden of litigation. Courts have therefore treated such a course of action as an abuse of its process. This is therefore another and an equally necessary and efficacious aspect of the same principle, for it helps in raising the bar of res judicata by suitably construing the general principle of subduing a cantankerous litigant.
Courts have therefore treated such a course of action as an abuse of its process. This is therefore another and an equally necessary and efficacious aspect of the same principle, for it helps in raising the bar of res judicata by suitably construing the general principle of subduing a cantankerous litigant. That is why this other rule has some times been referred to as constructive res judicata which, in reality, is an aspect or amplification of the general principle." In the case of Sulochana Amma (supra) the Apex Court has thus observed :-- "The expression "the Court of limited jurisdiction" in Explanation VIII is wide enough to include a Court whose jurisdiction is subject to pecuniary limitation and other cognate expression analogous thereto. Therefore, Section 11 is to be read in combination and harmony with Explanation VIII. The result that would flow is that an order or an issue which had arisen directly and substantially between the parties or their privies and decided finally by a competent Court or tribunal, though of limited or special jurisdiction, which includes pecuniary jurisdiction, will operate as res-judicata in a subsequent suit or proceeding, notwithstanding the fact that such Court of limited or special jurisdiction was not a competent Court to try the subsequent suit. The issue must directly and substantially arise in a later suit between the same parties or their privies." Defendant No. 1 was admittedly the managing agent of the collieries detailed in paragraph 3 of the plaint and on the appointed day i.e. 1-5-1972 the right, title and interest of the owners in relation to the coal mines aforesaid have been transferred to and vested in the Central Government free from all encumbrances. The Hundies in question were in connection with the business transaction of defendant No. 1 in respect of the said coal mines and the payment in respect thereof was made by plaintiff No. 1 as per the Hundies drawn by defendant No. 1 but the said Hundies were not retired by the defendant No. 1.
The Hundies in question were in connection with the business transaction of defendant No. 1 in respect of the said coal mines and the payment in respect thereof was made by plaintiff No. 1 as per the Hundies drawn by defendant No. 1 but the said Hundies were not retired by the defendant No. 1. As per Section 10 of the said Act the owner of every coking coal mine shall be given by the Central Government in cash and in the manner specified under Section 21 for vesting in it under Section 4, the right, title and interest of the owner in relation to such coking coal mines an amount equal to the amount specified against it in the corresponding entry in the 5th column of the said schedule of the Act. The Commissioner of Payment was appointed for the purpose of disbursing the amount payable to the owner of the coking coal mines under Section 20 of the said Act, and the Central Government paid in cash to the commissioner of payments for payment to the owner of the coking coal mines a sum equal to the sum specified against the coking coal mines in the schedule of the said Act as per Section 21. Provisions have been made under Section 23 of the said Act whereunder the parties having any claim against the erstwhile owner of coal mine which has vested in the Central Government under the said Act may prefer a claim before the Commissioner of Payments and the Commissioner of Payments after investigation in writing admit or reject the claim in whole or in part of such claimants and if the claim is allowed, commissioner shall pay keeping in view the provisions of Sections 24 and 25 to the claimants out of compensation which was deposited by the Central Government with him in respect of the coal mines in question. The plaintiff has admittedly filed five claim cases in respect of the Hundies (Ext 6 series) before the Commissioner of payments.
The plaintiff has admittedly filed five claim cases in respect of the Hundies (Ext 6 series) before the Commissioner of payments. After investigation and hearing the parties the Commissioner of Payments allowed the claim of the plaintiff in full in respect of all the Hundies but since the claim of the plaintiff was of lowest priority under the scheme of the said Act, lesser amount was paid in respect of three of the Hundies by cheques in view of the provisions of Section 24 of the said Act which mandates that where a total amount of the claim admitted by the Commissioner does not exceed the total amount of the money credited to the account of a coking coal mines every such admitted claim shall rank equally among themselves and be paid in full and the balance, if any, shall be paid to the owner but there such amount is insufficient to meet in full the total amount of the admitted claims, every such claim shall abate in equal proportions and be paid accordingly and in view of the provision of Section 24 the lesser amount was paid to the plaintiff by the Commissioner of Payments in spite of the fact that full claim of the plaintiff was admitted by the Commissioner of Payments in respect of the Hundies. During the pendency of the said claim case the plaintiff had filed this suit. I have already stated above that forum under Section 23 of the said Act is an additional forum and it does not oust the jurisdiction of the Civil Court under the general law and the suit, before the Civil Court is maintainable and besides that liability of the erstwhile owner of the coal mine does not cease due to vesting of coal mines. Right to recover the debt by the creditor has been created under the general law and not under the said Act. The rule is that if a right is created under a statute, a person must seek relief before the forum created under that statute. It is needless to say that there is no such provision in the said Act. Furthermore the Commissioner of Payments has no jurisdiction to direct or order the defendant No. 1 or its guarantor defendant No. 2 to make payment to the plaintiff No. 1 in respect of the claim which could not be satisfied as per its order.
It is needless to say that there is no such provision in the said Act. Furthermore the Commissioner of Payments has no jurisdiction to direct or order the defendant No. 1 or its guarantor defendant No. 2 to make payment to the plaintiff No. 1 in respect of the claim which could not be satisfied as per its order. I have already stated above that the liability of the surety is coextensive with that of principal debtor unless it is provided by the contract to the contrary, and a creditor may proceed against the surety even if he may have relief against the principal debtor in some other proceedings and in any event the right conferred upon the plaintiff No. 1 as creditor in terms of the deed of guarantee cannot but be stated to be an independent right which stands recognized by the statutes and thus cannot in any manner be whittled down without a just cause. The right of the plaintiff to recover money from defendant No. 2 who stood guarantor arises out of the terms of the deed of guarantee which is not in any way superseded or brought to a naught merely because the plaintiff may not be able to recover money from the principal borrower that is the managing agent of the coal mine. It may here be added that even as a result of the said Act, the liability of the principal borrower does not come to an end. It is only the mode of recovery which is referred to in Section 23 of the said Act. Here in the case at hand the cause of action of the plaintiff for the claim of the due amount of Hundi is based on deed of guarantee executed by defendant No. 2 in favour of plaintiff. In this view of the matter, therefore, the principle of res judicata stated above has no application in the facts of this case. In the case of I. F. C. I. Ltd. (supra) the Apex Court has observed that right of a claim to proceed before the Commissioner of Payments and to file a suit to recover the amount due to him cannot on a perusal of the statute be taken away.
In the case of I. F. C. I. Ltd. (supra) the Apex Court has observed that right of a claim to proceed before the Commissioner of Payments and to file a suit to recover the amount due to him cannot on a perusal of the statute be taken away. The learned court below has wrongly applied the principle of res judicata in this case and his finding that the suit of the plaintiff is not maintainable as barred by res judicata is untenable. The ratio of the cases of State of U. P. (supra), Sulochana Amma (supra) therefore has no application in the facts of the case at hand. Thus I see no substance in the contention of the learned counsel of the Defendant in respect thereof. Therefore, these points are decided in favour of the plaintiff and against the defendants. 16. There is merit in this appeal and it succeeds. The appeal is hereby allowed only against defendant Nos. 1 and 2 and the impugned judgment is set aside. The plaintiff is entitled to realise a sum of Rs. 1,37,347.48 P. from defendant Nos. 1 and 2 jointly or severally along with interest at the contractual rate of 9% per annum from the date of filing of the suit till its realization. However, the plaintiff is not entitled to realise the said amount from the defendant No. 3. Parties shall bear their own costs in the facts and circumstances of this case.