Hindusthan Motors Limited v. National Insurance Company Limited
2009-01-30
ASHIM KUMAR BANERJEE, KISHORE KUMAR PRASAD
body2009
DigiLaw.ai
Judgment :- (1) The Judgment of the Court was delivered by : Banerjee, J.-On June 25,1987 the appellant filed a suit as against the respondents, inter alia, praying for a decree for Rs, 7,07,70,835.00 against the respondent No. 1 along with interest and other reliefs. According to the appellants, the plaint was defective, as such the writ of summons could not be lodged with Sheriff of Calcutta within fourteen days from the date of filing of the suit as required under Rule 6 Chapter VIII of the High Court Rules, Original Side, Calcutta. The appellant did not take any step contemporaneously for service of the writ of summons upon the respondent No. 1 by lodging the same with Sheriff of Calcutta. It was contended on behalf of the appellants that despite filing of the suit they had been negotiating with the respondent No. 1 for an amicable settlement. Hence, they could not take any contemporaneous step in the suit. In 1992 the appellant filed a writ petition, inter alia, asking for recall and/or cancellation of notice dated March 3, 1992 issued by the Senior Divisional Manager of the respondent No. 1. In the writ petition the appellant disclosed the factum of filing of the suit. They, however, contended that in view of the subsequent development the suit had become infructuous. They undertook to withdraw the suit and proceed with the writ petition which according to them, was comprehensive in nature. The learned Single Judge by judgment and order dated September 7, 2001 in C.O. No. 8118(W) of 1992 dismissed the writ petition. While doing so, His Lordship observed as follows :- "Since the other reliefs are virtually relating to grant of claim of the petitioners arising out of fire took place in the petitioners premises along with the interest, this Court is not inclined to adhere anything in respect thereto sitting in the writ jurisdiction but behaving like fact finding Court. Such type of claim cannot be entertained under the writ jurisdiction. It has to be adjudicated by a regular Civil Court or forum to come to a definite conclusion in this regard. On that score, Mr. P. K. Mallick, learned Senior Counsel for the petitioner, addressing before the Court fairly submitted that such relief cannot be granted under the writ jurisdiction as rightly pointed out by the Court and a suit is already existing in between the parties.
On that score, Mr. P. K. Mallick, learned Senior Counsel for the petitioner, addressing before the Court fairly submitted that such relief cannot be granted under the writ jurisdiction as rightly pointed out by the Court and a suit is already existing in between the parties. But the relief as primarily made hereunder is not for the same but for cancellation, revocation, withdrawal or recalling of the impugned notice on 3.3.92 as aforesaid to which there cannot be any embargo in proceeding with the same under the writ jurisdiction." (2) In 1998 the appellant filed an application before the learned Master for extending the returnable date of the writ of summons. Paragraph 4 of the said petition is quoted below :- "Your petitioner states that the said defects were subsequently rectified by the Advocate-on-Record of your petitioner. Under Rule 6 of Chapter VIII of the High Court. Original Side Rules, unless an extension of time is obtained, the writ of summons is to be delivered to the Sheriff within 14 days from the filing of the plaint for the purpose of effecting service on the defendants. Since that period expired, the writ of summons are still lying with the Department of this Honble Court and has not been lodged with the Sheriff for service." (3) The learned Master extended the time as prayed for. No step was taken despite such order being passed. (4) In 2002 the appellant filed another application of the like nature and prayed for extension of the returnable date. Paragraph 5 of the said application being relevant herein is quoted below :- "On an application filed by your petitioner learned Master, Original Side of this Honble High Court was pleased to pass an usual Order dated 23rd December, 1998 directing the Department to issue the Writ of Summons extending the returnable date of the Writ of Summons and giving liberty to the Sheriffs Department to accept the Writ of Summons for service etc. However, in view of pendency of certain other litigation your petitioner was advised not to take further steps in the suit for some time. Your petitioner craves leave to refer to and rely upon proceedings of the above litigations, if necessary." (5) The learned Master allowed the said application. The said writ of summons was ultimately served upon the respondent No. 1 on July 11, 2002.
Your petitioner craves leave to refer to and rely upon proceedings of the above litigations, if necessary." (5) The learned Master allowed the said application. The said writ of summons was ultimately served upon the respondent No. 1 on July 11, 2002. (6) On September 18, 2002 the respondent No. 1 approached the learned Single Judge for dismissal of the suit on the ground that no step has been taken contemporaneously to serve the writ of summons which was ultimately done on third application being made in 2002 being G. A. No. 3820 of 2002. The application was opposed by the appellant. Appellant contended before His Lordship that once the writ of summons was served after the time being extended by the learned Master the provision of Order 9 Rule 5 would have no application and the suit was not liable to be dismissed. His Lordship rejected such contention and dismissed the suit. (7) It was also contended that since the writ of summons had already been served upon the respondent No. 1 they would get ample opportunity to defend the suit on merit. The learned Single Judge, however, negated the contentions raised by the appellant. His Lordship was pleased to observe that due to non-service the right accrued in favour of the respondent No. 1 which stood "snatched" by that process and would amount to injustice. His Lordship ultimately held as follows :-"In the instant case, following the same view I am of the opinion that the right of the petitioner was crystallised and such valuable right accrued by virtue of the failure on the part of the plaintiff to take steps in the suit. The learned Master cannot pass such order and extend the time for service of the fresh summons without giving an opportunity to the petitioner of being heard. Such action of the Master destroys the valuable right of the petitioner, therefore, a violation of natural justice. The same cannot also be entertained. Therefore, in my opinion, the order so passed by the Master is also bad in law. I further do not find any cogent ground made out by the plaintiff for extension of returnable date of the writ either before me or before the learned Master for such extension.
The same cannot also be entertained. Therefore, in my opinion, the order so passed by the Master is also bad in law. I further do not find any cogent ground made out by the plaintiff for extension of returnable date of the writ either before me or before the learned Master for such extension. Hence, in my opinion both the orders passed by the Master dated 23.9.1998 and 25.6.2002 are set aside and the application so filed by the petitioner for dismissal of the suit is allowed." (8) Hence, this appeal by the appellant. (9) Mr. Abhrajit Mitra, learned Counsel appearing for the appellant being ably assisted by Mr. Sakhya Sen, learned Counsel, contended as follows :-(i) The suit was filed in 1987. Even then the parties had been trying for an out of Court settlement. Such attempt ultimately failed in 1992 resulting in a writ proceeding. (ii) In the writ petition the appellant was advised to the extent that the suit had become infructuous and contended as such. However, the learned Single Judge while disposing of the writ petition observed that the claim of the appellant would be considered in the pending suit. Hence, the averment made in the writ petition by the appellant was of no consequence. (iii) Once the learned Single Judge while disposing of the writ petition observed that the claim of the appellant would be considered in the pending suit and ultimately dismissed the writ petition the dismissal of the suit would amount to non-suiting the appellant and depriving the appellant, from consideration of their valuable claim on merits. (iv) Admittedly there had been latches on the part of the appellant on the issue of service of writ of summons. Once the writ of summons was served and the respondent No. 1 entered appearance in the suit the latches stood waived and/or condoned. (v) The provision of Order 9 Rule 5 would apply in a case where step was not taken for service of the writ of summons which came unserved, Such provision could not be applied for dismissal of the suit when the writ of summons was lodged for service at a belated stage and was ultimately served upon the respondent No. 1.
(vi) Assuming there had been latches on the pan of the appellant in proceeding with the suit substantive right of the appellant for having consideration of their valuable claim on merits could not be taken away on the plea of procedural latches. (10) In support of his contention Mr. Mitra relied on the following decisions :-(i) AIR 1993 SC, Page 2525 (Siraj Ahmad Siddiqui v. Shri Prem Nam Kapoor) (ii) AIR 2003 SC, Page 189 (Salem Advocate Bar Association, Tamil Nadu v. Union of India) (iii) 2005, Volume - IV, SCC, Page 480 (Kailash v. Nanhku and Ors.) (iv) AIR 2006 SC, Page 269 : (2006)1 WBLR (SC) 777 (Uday Shankar Triyarv. Ram Kalewar Prasad Singh and Anr.) (11) Mr. Mitra lastly contended that the learned Single Judge relied upon the decision in the case of State Bank of India v. Tarit Appliances Pvt. Ltd. and Ors. reponed in 1994, Volume - II, Calcutta High Court Notes, Page 161 where in an identical situation the learned Single Judge relied on a judgment of the Allahabad High Court reported in AIR 1981, Allahabad, Page 400 (Sri Nath Agrawal v. Sri Nath) which was subsequently overruled by the Apex Court in the case of Siraj Ahmad Siddiqui (Supra). Hence, the entire premise on which the judgment impugned was based upon, was wrong. (12) Mr. Mitra prayed for setting aside of the judgment and order of the learned Single Judge. (13) Mr. Soumen Sen, learned Counsel appearing for the respondent No. 1 while opposing the appeal contended as follows :-(i) The suit was filed in 1987. The appellant themselves contended in their subsequent applications for extension of the returnable date that they were advised not to take any step in the suit. In the writ petition the appellant undertook to withdraw the suit and took a chance for consideration of the identical relief before the writ Court. Being unsuccessful therein the appellant was thus not entitled to proceed further in the suit. (ii) Assuming that the appellant was entitled to proceed even after the dismissal of the writ petition in 2001 step was not taken contemporaneously and the writ of summons was ultimately served on July 11, 2002.
Being unsuccessful therein the appellant was thus not entitled to proceed further in the suit. (ii) Assuming that the appellant was entitled to proceed even after the dismissal of the writ petition in 2001 step was not taken contemporaneously and the writ of summons was ultimately served on July 11, 2002. Hence, the learned Judge following the earlier precedents rightly dismissed the suit holding that valuable right accrued in favour of the respondent No. 1 due to non-service of the writ of summons could not be taken away by curing the defect which was not permissible in law. In support of his contention Mr. Sen cited the following decisions :-(i) AIR 1954 Cal, Page 360 (Shaw and Company v. B. Shamaldas and Co.) (ii) 61 Cal WN, Page 212 (Laxmi Trading v. Shriram Gobindnarain) (iii) 1976, Volume -1, Cal LJ Page 98 (Badrilal Daga v. The Howrah Industries and Ors.) (iv) 1993, Volume - II, SCC, Page 185 (Salil Dutta v. T. M. and M. C. Private Limited) (v) 1994, Volume - II, Cal HN, Page 161 (State Bank of India v. Tarit Appliances Private Limited and Ors.) (vi) 99, Cal WN, Page 789 (Salimar Paints Limited v. Smt. Asoka Deb and Anr.) (vii) 2006, Volume -III, Cal LT, Page 230 (Shrikant Mantri and Ors. v. Radheshyam Chotia and Ors.) (viii) Unreported judgment dated 18.04.2007 passed by learned Trial Court, Honble Division Bench of Calcutta High Court and Honble Supreme Court of India in Steel Authority of India Ltd. v. McKinnon Mackenzie and Company Limited and Anr. (14) Mr. Sen prayed for dismissal of the appeal. (15) To deal with the controversy let us first consider the decisions cited by the parties. (16) Mr. Sen heavily relied on the decisions of the learned Single Judge in the case of State Bank of India v. Tarit Appliances Private Limited and Ors, (Supra). The said decision was based upon the Allahabad High Court judgment which was overruled by the Apex Court referred to above. Mr. Sen relied on the Supreme Court decision in the case of Salil Dutta (Supra). In the said case the Ejectment suit filed by the plaintiff came up for hearing after seven years of institution. Before the final hearing the defendant filed two interlocutory applications. These two applications were directed to be heard at the time of final hearing.
Mr. Sen relied on the Supreme Court decision in the case of Salil Dutta (Supra). In the said case the Ejectment suit filed by the plaintiff came up for hearing after seven years of institution. Before the final hearing the defendant filed two interlocutory applications. These two applications were directed to be heard at the time of final hearing. The defendant took a plea that he was not present as his Advocate advised him that he need not be present at the hearing as before the final hearing those two pending applications would have to be disposed of. When the matter came up for hearing neither the Advocate nor the client appeared before the Court and suffered ex parte decree. In this back drop, the Apex Court observed that it would not be fair to shift the blame on the Advocate solely, The Apex Court observed that by engaging Advocate litigant could not claim absolute immunity from the latches on their part. The Apex Court after considering the situation involved in the said observed, "putting the entire blame upon the advocate and trying to make it out as if they were totally unaware of the nature or significance of the proceedings is a theory which cannot be accepted and ought not to. have been accepted". Relying upon this decision Mr. Sen contended that the plea of Advocates latches could not give immunity to the plaintiff from their latches. We are unable to accept such contention. In the present case, the suit was filed in 1987. The parties initially tried for an out of Court settlement. However, the appellant could not demonstrate any such evidence after one or two years of institution. The writ petition was filed in 1992 when the appellant made a composite grievance including their claim made in the suit. In 2001 when the writ petition was heard the learned Judge observed that the claim would be considered in the civil suit. Hence, the stand of the appellant in their writ petition that they would withdraw the suit in case the writ petition was considered by the Court in its entirety became insignificant. It could thus not be said that the appellant was not in the know that the steps were not being taken by their Advocate in the suit.
Hence, the stand of the appellant in their writ petition that they would withdraw the suit in case the writ petition was considered by the Court in its entirety became insignificant. It could thus not be said that the appellant was not in the know that the steps were not being taken by their Advocate in the suit. From the application for extension of the returnable date it would be clear that such fact would be evident. Hence, we are of the view that it was not a case of latches. It was a strategy and/or a decision taken by the appellant that they would not take any step in the suit as according to them the suit had became infructuous. The respondent also did not take any step for dismissal of the suit earlier. They v/ere all along aware of the pendency of the suit, at least from 1992 when the writ petition was filed. When the learned Single Judge observed in His Lordships judgment that the claim would be considered in the civil suit the respondent did not make any grievance against that part of the order. On a plain reading of the judgment and order of the Writ Court it appears that the learned Judge rather gave implied liberty to the plaintiff/ appellant to proceed with their claim made in their writ petition in the pending suit. Hence, in our view, the latches, if any, prior to 2001 stood waived; firstly because of the implied liberty granted by His Lordship; secondly because of the respondents not taking any contemporaneous step either for dismissal of the suit or for cancellation of the liberty so granted by His Lordship. The learned Single Judge, however, did not approach the problem from this angle. (17) The judgment and order of the learned Single Judge is based upon two premises i.e. (i) in the writ petition the plaintiff categorically stated that the suit had became infructuous and they intentionally did not take any steps for service of the writ of summons ; (ii) because of non-service right had accrued in favour of the defendant which could not be jeopardised by curing the defect. His Lordship observed that no cogent ground was assigned by the plaintiff for extension of the returnable date of the writ petitioners in the application which resulted the order of extension passed by the Master.
His Lordship observed that no cogent ground was assigned by the plaintiff for extension of the returnable date of the writ petitioners in the application which resulted the order of extension passed by the Master. His Lordship relied on Order 9 Rule 5 of the Code of Civil Procedure to dismiss the suit. (18) Order 9 Rule 5 is a provision where a suit is liable to be dismissed in case the plaintiff does not take any step to serve the writ of summons on the defendant when it comes back unserved meaning thereby it is second stage of attempt to serve the writ of summons. Our High Court Rules do not specifically contemplate a situation where the Court is to dismiss the suit when no step at all is taken for service of the writ of summons. We are in agreement with Mr. Mitra that Order 9 Rule 5 may not be strictly applicable in the instant case. However, this is a situation worst than the situation contemplated in Order 9 Rule 5. Hence, it would be a proposition that the suit could be dismissed in a situation contemplated under Order 9 Rule 5 and could not be dismissed if the situation is worst than what was contemplated in the said provision. Such proposition would be ridiculous. Hence, following the inherent power we are of the view that the Court can dismiss a suit if no step is taken by the plaintiff having the carriage of proceeding. To that extent we fully agree with His Lordship that the Court has inherent power to dismiss a suit in case steps are not taken in the suit by the plaintiff. (19) Question now remains, if the Court can dismiss a suit for latches on the part of the plaintiff in taking steps in the suit can the Court condone such latches being satisfied with the cause which prevented the plaintiff from taking any such steps ? Our answer would be "yes". In this regard let us consider the latest Apex Court decision in the case of Salem Bar Association (Supra). In the said case the Apex Court considered the provision of Order 7 Rule 11 Clause (e) and (f). Such provision was incorporated enabling the Court to reject a plaint when it fails to comply with the provisions of Order 7 Rule 9.
In the said case the Apex Court considered the provision of Order 7 Rule 11 Clause (e) and (f). Such provision was incorporated enabling the Court to reject a plaint when it fails to comply with the provisions of Order 7 Rule 9. The Apex Court observed that such was the enabling provision and the Court should ordinarily give an opportunity for rectifying such detect meaning thereby, for procedural latches the Court should not dismiss the suit as a matter of course without giving an opportunity for curing the defect. In a recent decision of the Apex Court in the case of Uday Shankar Triyar (Supra) the Apex Court considered the provision of Order 41 Rule 1 which obligates the appellants Advocate to sign the Memorandum. The Apex Court observed that "non-compliance did not entail automatic rejection without giving an opportunity to rectify such defect". (20) Considering the Apex Court decisions referred to above we are of the view that when the Court has power to dismiss the suit for procedural irregularity the Court should have equal power to condone such delay by giving opportunity to the plaintiff for curing such defect. The basic concept, in our view, is that procedural latches should not take away the substantive right of a litigant, be it his own latches or be it latches on the part of his Advocate. (21) In the instant case when the suit was filed in 1987 it was the duty of the Advocate for the plaintiff to take steps for service of the writ of summons. At the same time the litigant was also equally responsible for taking such steps. When a litigant approaches the Court of Law by making his grievance he is equally responsible for taking all procedural steps so that Court can come to a logical conclusion on merit. No litigant should be allowed to burden the Court record by filing a litigation and then keeping it pending for eternity by intentionally making it defective. Such proceedings must be dismissed to lessen the Courts burden and such power is derived by the Court from the inherent power granted under the Code of Civil Procedure. If the present matter being the prayer for dismissal of the suit made by the defendant was heard by us prior to 2001 we would have agreed with the learned Single Judge while allowing the prayer of the defendant.
If the present matter being the prayer for dismissal of the suit made by the defendant was heard by us prior to 2001 we would have agreed with the learned Single Judge while allowing the prayer of the defendant. (22) The learned Single Judge while disposing of the writ petition granted an implied liberty to the plaintiff to proceed with their suit and the defendant did not object contemporaneously. The writ of summons in the present suit was served in 2002. From the record it appears that the judgment of the learned Single Judge was delivered in the writ proceeding on September 7, 2001 and the writ of summons was served on July 11, 2002. Hence it appears that the writ of summons was served nine months after the delivery of the said judgment. Such delay cannot be said to be "inordinate" and we wish to condone the same. (23) The learned Single Judge observed, right had accrued in favour of the defendant because of non-service. We are unable to appreciate such observation of His Lordship. The respondent/defendant is a Government company which rejected the claim of the appellant/plaintiff on merits that prompted the appellant/plaintiff to file the suit. According to the defendant the plaintiff had no claim at all which could be enforced against them. We are unable to find out what right they had acquired by dint of non-service of summons. We also feel that it would have been better if the defendant company being a Government company did not take such plea before the Court of Law when they very often approach the Court for condonation of delay in approaching the Court. With deepest regard we have for His Lordship, we are unable to agree with His Lordship on that score. (24) The cases cited by Mr. Sen mostly relate to cases where writ of summons were not at all served. In the case of Badrilal Daga (Supra) the learned Single Judge observed that Court was empowered to condone the delay and direct fresh summons to be issued if it was satisfied with the causes shown, The learned Single Judge in the case of Steel Authority of India (Supra) also acknowledged such power of the Court. His Lordship, however, refused to exercise such power as the facts, according to His Lordship, did not deserve such exercise.
His Lordship, however, refused to exercise such power as the facts, according to His Lordship, did not deserve such exercise. The Division Bench upheld the said decision of the learned Single Judge in the case of Steel Authority of India Limited (Supra). Hence, the power of the Court to condone the latches and/or delay is unfettered, (25) Question thus remains whether in the present case the learned Judge was right in dismissing the suit. In the instant case from the facts referred to above it is absolutely clear that there had been inordinate latches and/or delay on the part of the appellant in taking steps in their suit. The Learned Judge, however, dismissed the suit on the ground that valuable right had accrued in favour of the defendant being the respondent herein. Let us examine such finding of His Lordship. In 1987 the suit was tiled. At least upto 1988 there had been some talk of settlement and/or negotiation as reflected in correspondence. In 1992 the writ petition was filed. Hence, the respondents were all along aware about the pendency of the suit. At least from 1992 they became aware because of the statement made by the appellant in the writ petition. The respondents could file an application for dismissal of the suit in long ten years instead of waiting till 2002 when the writ of summons was actually served upon them. In this regard, we may refer to the decision in the case of Shaw and Company (supra). In the said case the suit was instituted in 1950. Although the summons had been issued plaintiff did not take any step for service of the summons after it had been lodged at the Sheriffs office. Summons returned unserved by the Sheriffs office. Fresh writ of summons was ultimately issued on an ex parte order being obtained from the learned Master. The defendant was then served and they entered appearance. Upon entering appearance the defendants searched the records and filed application for dismissal under Order 9 Rule 5. The facts involved in our case are totally distinguishable from the facts involved in Shaw and Company (supra) relied on by the respondents. There, the defendant did not know about the pendency of the suit until they received the writ of summons.
Upon entering appearance the defendants searched the records and filed application for dismissal under Order 9 Rule 5. The facts involved in our case are totally distinguishable from the facts involved in Shaw and Company (supra) relied on by the respondents. There, the defendant did not know about the pendency of the suit until they received the writ of summons. They came to know about the delay and/or latches after receipt of the writ of summons and after causing searches from the department. In the case in our hand the respondents/defendants knew about the pendency of the suit for at least long ten years. Even then they accepted service of the writ of summons in 2002. Hence, the right, if any, accrued in favour of the respondents/defendant because of the delayed service of writ of summons, in our view, stood waived. (26) Considering the above, we feel that the appeal should be allowed. However, the appellant must be penalised for their latches and the defendant should be compensated with cost which is assessed by us at Rupees fifty thousand. (27) We, however, feel that the matter should be referred to a larger Bench as the judgment and order of the learned Single Judge was followed by two other Division Bench decisions in which His Lordship was a party being APO No. 16of 2008 (Steel Authority of India v. M. M. Company Limited and Anr.) dated February 20, 2008 and Srikant Mantri and Ors. v. Radheshyam Chotia and Ors. (supra). (28) Let this appeal be placed before the Honble Chief Justice for constitution of a larger Bench to decide whether the defendant had acquired any valuable right due to delayed service of the writ of summons and whether the Court in the given circumstances was entitled to condone such delay. (29) The appeal is, however, disposed of at our end on the above terms.