Smt. Kamlesh Kohli v. Escotrac Finance & Investment Ltd., (SC) BS121793
SUPREME COURT OF INDIA

Before:- K.T. Thomas and M.B. Shah, JJ.

Civil Appeal No. 5725 of 1999 @ SLP (C) No. 13217 of 1998). D/d. 5.10.1999.

Smt. Kamlesh Kohli and Another - Appellants

Versus

Escotrac Finance & Investment Ltd. and Others - Respondent

For the Appellants: - Mr. Manoj Swarup, Ms. Lalita Kohli for M/s Manoj Swarup & Co., Advocates.

For the Respondents: - Mr. H.N. Salve, Sr. Advocate (Ms. Pratibha Singh),for Maninder singh, Advocates.

Civil Procedure Code, 1908, Order 37, Rule 4 - Summary suit - Leave to defend granted to defendant No. 3 - Plea that when leave was granted to defendant No. 3 leave should have been granted to defendants 1 and 2 to avoid inconsistent decrees - Not tenable - No bar under Civil Procedure Code to pass decree against some defendants - Code nowhere prescribes that decree against some of the defendants to a suit cannot be passed or that if the suit is dismissed qua one defendant it is required to be dismissed against other defendants too.

[Para 7]

JUDGMENT

M.B. Shah, J. - Respondent-Companies filed civil suit against Kamlesh Kamal & Company (defendant No. 1), Smt. Kamlesh Kohli, wife of Shri J.N. Kohli (defendant No. 2) and Shri Rajiv Kohli, son of Shri J.N. Kohli (defendant No. 3) for recovery of Rs. 85, 62,500/- on the basis of Memorandum of agreement dated 19th November, 1992. It was alleged that Smt. Kamlesh Kohli had been holding a membership ticket of Delhi Stock Exchange and had been carrying on business in the name of Kamlesh Kamal & Company (defendant No. 1). She approached the plaintiffs to provide finance for 'Badla' transactions in or about March/April, 1992. As on 10th September, 1992, a sum of Rs. 3.02 crore was due and payable by the defendants. On 21st September, 1992, plaintiffs filed Writ Petition No. 3324 of 1992 in the Delhi High Court against Delhi Stock Exchange impleading defendant No. 2 and J.N. Kohli, her husband as party respondents. The matter was settled between the parties by an agreement dated 19th November, 1992. In view of the agreement between the parties, the Court permitted withdrawal of the said petition. It is stated that payment of Rs. 65 lakhs was made to the plaintiffs on the basis of the said agreement. As the defendants after payment of first instalment did not pay any amount the plaintiffs issued notice dated 6th July, 1993 calling upon defendant Nos. 2 and 3 to pay the remaining amount with interest within 15 days of the receipt of the notice. As the defendants repudiated their liability, the summary suit under Order 37 C.P.C. was instituted on 5th November, 1993.

2. In the said suit, defendants filed I. A. No. 10145 of 1994 under Order 37 Rule 4 C.P.C. to grant leave to defend unconditionally. The learned Single Judge arrived at the conclusion that the contentions that defendants have absolutely no defence; that they have put forth the plea of no consideration; and that the second defendant was not a party to the agreement and that there were other circumstances to be established and, therefore, leave should be granted, are without any substance. The Court, therefore, dismissed the application for leave to defend by judgment and order dated Ist May, 1997 and decreed the suit for a sum of Rs. 85, 62,500/- with simple interest @ 15% p.a. from the date of the suit till the date of the payment.

3. Against the said judgment and decree, Appeal No. FAO (OS) 197 of 1997 was filed by the mother, Smt. Kamlesh Kohli and Appeal No. FOA (OS) 160 of 1997 was filed by the son, Rajiv Kohli. Before the Division Bench of the High Court, it was not disputed that mother was the sole proprietor of defendant No. 1 firm and that Memorandum of agreement was signed by Rajiv Kohli as constituted attorney of defendant Nos. 1 and 2. It was also not disputed that other and son were living together. It was also admitted that in pursuance of the Memorandum of agreement Smt. Kamlesh Kohli had signed the cheque in the sum of Rs. 65 lakhs which was given to the plaintiffs. In the appeals, it was contended before the Court on behalf of Smt. Kamlesh Kohli that her son was only attorney for prosecuting the writ petition and that he had no authority to enter into the agreement dated 19th November, 1992. The Court rejected the said contention by holding that, to say the least, the plea is wholly misconceived, mala fide and abuse of the process of law and may even amount to contempt of the Court. The Court further observed that such dishonest and convenient pleas deserve to be severely condemned. Accordingly, appeal No. FAO (OS) 197 of 1997 filed by Smt. Kamlesh Kohli was dismissed with costs quantified at Rs. 22,000/- payable to plaintiffs.

4. In appeal No. FAO (OS) 160 of 1997 filed by Rajiv Kohli (son), the Court granted unconditional leave to defend as it was averred by the plaintiffs in reply to the application for leave to defend that he was arrayed only as a proforma party and no relief was claimed against him personally.

5. Against the said judgment and decree, the defendant Nos. 1 and 2 have preferred this appeal.

6. Learned counsel for the appellant submitted that when leave to defend was granted to defendant No. 3, it ought to have been granted to the appellants otherwise there would be inconsistent decrees. He submitted that the suit was for recovery of composite amount and, therefore, once leave to defend was granted to defendant No. 3, the Court ought to have granted leave to defend, to the remaining defendants, i.e. the present appellant. He further submitted that considering the defence raised by defendant No. 2, this was a fit case for grant of leave to defend.

7. There is no substance in the contentions raised by the learned counsel for the appellant. Civil Procedure Code nowhere prescribes that decree against some of the defendants to a suit cannot be passed or that if the suit is dismissed qua one defendant it is required to be dismissed against other defendants too. Order 1 Rule 6 makes the position clear by providing that plaintiff may at his option join as parties to the same suit all or any of the persons severally, or jointly and severally, liable on any one contract including parties to bills of exchange, hundies and promissory notes. Therefore, even presuming that defendant No. 3 was jointly and severally liable to pay the amount specified in the Memorandum of agreement it was optional for the plaintiff to join him as party defendant. In the present case, however, that is not the situation because plaintiff has specifically averred that defendant No. 3 is joined as formal party. Further Order 8 Rule 5 and 10, Order 9 Rule 11 and Order 15 Rule 2 makes the position clear by providing that decree can be passed against the defendant who has not filed the written statement or who remains absent or who is not at issue with the plaintiff on any question of law or of fact. The said provisions are clear and unambiguous requiring no further elucidation, which read thus :-

8. Learned Counsel further submitted that this is a fit case in which Court ought to have granted leave to defend. In our view, the High Court rightly arrived at the conclusion that defence, is on the face of it, dishonest and mala fide. The reason is not too far to find out because in a writ petition filed by the plaintiffs, a memorandum of agreement was arrived at, which was duly signed by the plaintiffs and Smt. Kamlesh Kohli as well as Rajiv Kohli as attorney of Smt. Kamlesh Kohli. The Division Bench of the High Court, after recording the presence of constituted attorneys of the parties and considering the Memorandum of agreement accompanied by application containing Annexures A and B, permitted the plaintiffs to withdraw the writ petition. The plaintiffs acted upon the said agreement and withdrew the petition. The defendant also acted upon the said agreement and paid Rs. 65 lakhs to the plaintiff. In view of these facts it is unreasonable to permit the defendant to raise an illusory contention that the said settlement is not binding on her. Therefore, the Court rightly rejected the application of defendant Nos. 1 and 2 for grant of leave to defend.

9. In the result, the appeal is dismissed with costs quantified at Rs. 10,000/-.

Appeal dismissed.