Important points
1. Where prayer in suit was decree against two defendants so that it could be executed against both or either of them but suit was decreed against only one of the defendants and dismissed against the other, the plaintiff could invoke the jurisdiction of the appellate Court for getting the suit decreed the suit against that defendant also.
2. If a defendant does not enter into witness box to make statement on oath in support of his pleadings set out in the written statement an adverse inference would arise that what he had stated in written statement was not correct.

Headnote:(i) Code of Civil Procedure, 1908-Section 99/100 read with Order 1 Rule 3-Appeal-Maintainability of-Suit laid against two defendants-Defendant No. 2 father of plaintiff allegedly advanced loan from plaintiff’s bank account to Defendant No. 1-D-1 was authorised to operate Bank account of plaintiff-Decree sought for against both the defendants-Trial Court decreed suit as against D-2 and dismissed as against D-1-Appeal thereagainst-D-1’s plea that appeal not maintainable as suit was decreed against D-1-Not tenable-Prayer in suit was against both defendants so that it could be realised from both or from either of them-Prayer legitimate and reasonable -Since trial Court decreed suit against D-2 only plaintiff could invoke jurisdiction of appellate Court for decreeing suit against D-1.
       Held : The relief clause of the plaint extracted above would show that respondent No. 1 had claimed a degree for a sum of Rs. 8,400/- against both the defendants so that it could be realised from both the defendants or from either of them. This was a legitimate and reasonable prayer. Since defendant (respondent) No. 2 had advanced the amount in question to the appellant on the account of respondent No. 1, both of them, namely, the appellant and respondent No. 2 were jointly and severally liable to pay that amount to respondent No. 1. Having claimed a decree against both the defendants, the plaintiff (respondent No. 1) put it in the plaint that a decree be passed against both the defendants so that the decretal amount may be realised from either of the defendant. Since the trial Court had decreed the suit only against respondent No. 2 and not against the appellant, it was open to respondent No. 1, in this situation, to invoke the jurisdiction of the appellant court for decreeing the suit even against the appellant. (Paras 8 and 9)
       This can be viewed from another angle. Order 1 Rule 3 requires all persons to be joined as defendants in a suit against whom any right to relief exists provided that such right is based on the same act or transaction or series of acts or transactions against those persons whether jointly, severally or in the alternative. The additional factor is that if separate suits were brought against such persons, common questions of law or fact would arise. The purpose of the Rule is to avoid multiplicity of suits. This Rule, to some extent, also deals with the joinder of causes of action inasmuch as when the plaintiff frames his suit, he impleads persons as defendants against whom he claims to have a cause of action. Order 1 Rule 3 and Order 2 Rule 3 if read together indicate that the question of joinder of parties also involves the joinder of causes of action. The simple principle is that a person is made a party in a suit because there is a cause of action against him and when causes of action are joined, the parties are also joined. (Paras 11, 12 and 13)
       Now, the respondent No. 1 in his plaint had pleaded that from his current account in a bank which was authorised to be operated by his father, namely, respondent No. 2 also, an amount of Rs. 7,000/- was lent by a cheque to the appellant. Since the money had reached in the hands of the appellant, though not directly through respondent No. 1 but via his father, he had a cause of action against both the defendants, namely, the appellant and respondent No. 2 both of whom were, therefore, impleaded as defendants in the suit particularly as it was one transaction in which both were involved. In this situation, therefore, if the suit was dismissed against one of them by the trial Court, respondent No. 1 had the right to file an appeal against the person against whom the suit was dismissed, notwithstanding that it was decreed against the other. (Para 14)
       (ii) Code of Civil Procedure, 1908-Order 1, Rule 3 and Order 2, Rule 3-Joinder of parties-Order 1 Rule 3 to some extent deals with joinder of causes of action-Order 1 Rule 3 and Order 2 Rule 3 if read together indicates that question of joinder of parties also involves joinder of causes of action. (Paras 11, 12 and 13)
       (iii) Indian Evidence Act, 1872 -Section 114-Presumption of facts-Money suit-Suit against two defendants-Defendant No 2 was authorised to operate plaintiff’s Bank account-Plaintiff used to advance loan to through D-2-D-2 according to plaintiff advanced loan to Defendant No 1-D-1’s plea that D-2 advanced money not as agent of D-1 and it was a personal loan and there being no debtor and creditor relationship between D-1 and plaintiff suit against him was not competent-D-2 deposed that he had no money and he advance amount from Bank account of plaintiff at the instance of D-1 to pay amount from plaintiff’s account-D-1 did not enter witness box to deny statement of D-2-Adverse presumption has to be drawn that what he had stated in written statement was not correct-Appellate Court justified in decreeing suit against D-1 also.
       Held : Admittedly defendant No. 1 had an account in the Central Bank of India Limited, Sambalpur Branch which his father, namely, respondent No. 2, was authorised to operate. It is also an admitted fact that it was from this account that the amount was advanced to the appellant by respondent No. 2. It has been given out in the statement of respondent No. 2 that when the appellant had approached him for a loan of Rs. 7,000/-, he had explicitly told him that he had no money to lend whereupon the appellant had himself suggested to advance the loan from the account of respondent No. 1 and it was on his suggestion that the respondent No. 2 issued the cheque to the appellant which the appellant, admittedly, encashed. This fact has not been controverted by the appellant who did not enter the witness box to make a statement on oath denying the statement of defendant (respondent) No. 2 that it was at his instance that respondent No. 2 had advanced the amount of Rs. 7,000/- to the appellant by issuing a cheque on the account of defendant (respondent) No. 1. Having not entered into the witness box and having not presented himself for cross-examination, an adverse presumption has to be drawn against him on the basis of principles contained in illustration (g) of Section 114 of the Evidence Act. (Para 16)
       The appellant had abstained from the witness box and had not made any statement on oath in support of his pleading set out in the written statement. An adverse inference has, therefore, to be drawn against him. Since it was specifically stated by respondent No. 2 in his statement on oath that it was at the instance of the appellant that he had issued the cheque on the account of respondent No. 1 in the Central Bank of India Ltd., Sambalpur Branch, and the appellant, admittedly, had encashed that cheque, an inference has to be drawn against the appellant that what he stated in the written statement was not correct. In these circumstances, the High Court was fully justified in decreeing the suit of respondent No. 1 in its entirety and passing a decree against the appellant also. (Para 24)

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points summarized:

When a suit is filed against multiple defendants with a prayer for a decree that can be executed against either or both, and the suit is decreed against only one defendant, the plaintiff has the right to invoke the jurisdiction of the appellate court to get the decree extended to the other defendant as well (!) .
An adverse inference may be drawn against a defendant who does not enter the witness box to make a statement on oath in support of his pleadings, suggesting that the statement in the written statement may not be correct (!) (!) .
The relief sought in a suit must be legitimate and reasonable, especially when it involves claims against multiple defendants for a sum that can be recovered from either or both of them (!) .
The joinder of parties and causes of action is governed by procedural rules that aim to prevent multiplicity of suits and ensure that all related parties and causes of action are considered in a single proceeding (!) (!) .
When a plaintiff claims a right of relief against multiple defendants arising from a single transaction, and the suit is dismissed against one defendant but decreed against another, the plaintiff can still appeal to include the dismissed defendant in the decree (!) (!) .
The principles of adverse inference under evidence law allow for the presumption that a statement not denied or contradicted by a party who has not appeared for cross-examination may be taken as incorrect (!) .
The practice of not examining a party who has relevant knowledge and leaving it to the opposing party to call that party as a witness is viewed negatively, as it weakens the credibility of the case and can lead to adverse inferences (!) .
The procedural provisions support that a person who has a cause of action or rights arising from the same act or series of acts should be joined as a party, and causes of action can be united in a single suit to avoid multiple proceedings (!) (!) .
A party's failure to testify on oath and the absence of cross-examination can lead to an inference against that party, reinforcing the importance of personal testimony in establishing facts (!) .
The overall judgment confirms that procedural and evidentiary principles favor allowing a plaintiff to seek relief against all relevant parties involved in a transaction, and adverse inferences are justified when parties abstain from giving evidence on oath (!) (!) .

Please let me know if you need further elaboration or specific legal advice based on this case.

Judgment

S. Saghir Ahmad, J.-The appellant was defendant No. 1 in a suit filed by respondent No. 1 for recovery of a sum of Rs. 7,000/- together with damages (Rs. 1400/-) in the trial Court which was dismissed as against him but was decreed against the second defendant, namely, respondent No. 2 who, incidentally, also is the natural father of respondent No. 1 who was subsequently adopted by his maternal grandfather.

2. Respondent No. 1 had a current account in the Central Bank of India Limited, Sambalpur Branch which was also operated by his natural father, namely, respondent No. 2.

3. According to the facts set out in the plaint, respondent No. 1 was registered as a money lender in October, 1958 and in that capacity he used to advance loan through his natural father to different persons out of his account in the Bank which, as pointed out above, was also operated by his natural father. On the expiry of the licence, he did not get it renewed but the authority of his natural father (defendant No. 2) to operate the account continued and taking advantage of this authority, defendant (respondent) No. 2, on the persuasion of the appellant, issued a cheque for Rs. 7,000/- on the current account of respondent No. 1 on 29.4.1964 which was encashed by the appellant. This amount was not paid back by the appellant in spite of repeated demands and, therefore, the suit was filed both against the appellant as also respondent No. 2 who had issued the cheque to the appellant.

4. The appellant, in his written statement, pleaded that there was no relationship of debtor and creditor with respondent No. 1 as the amount was advanced personally by defendant (respondent) No. 2 and, therefore, respondent No. 1 had no right to institute a suit against him specially when respondent No. 2 while advancing the money to him had not acted as agent of respondent No. 1. The appellant also raised the plea of Section 8 of the Orissa Money Lenders Act and contended that since respondent No. 1 was not a registered money lender on the date on which the amount of Rs. 7,000/- was advanced to him as loan, the suit was not maintainable as the amount was advanced in the course of regular money lending business. It was also pleaded that since some dispute had arisen between the appellant and defendant (respondent) No. 2 with regard to the adjustment of the appellant’s dues against respondent No. 2, the latter, namely, respondent No. 2 got the suit filed through his son on false pleas.

5. Respondent No. 2, in his separate written statement, pleaded that he was very close to the appellant who dealt in tobacco business and whenever he was in need of money, he would approach respondent No. 2 for financial help and respondent No. 2 would lend him the money required by the appellant. It was pleaded that on 29th of April, 1964, the appellant had approached respondent No. 2 for payment of a sum of Rs. 7,000/- for a short period and, therefore, respondent No. 2 issued a cheque for that amount in favour of the appellant on that day on the current account of respondent No. 1 in the Central Bank of India Ltd., Sambalpur Branch. When respondent No. 1 came to know of this transaction, he demanded repayment of the amount but the appellant instead of paying the amount to respondent No. 1, proposed to set off his own dues against respondent No. 2. It was pleaded that since the appellant had withdrawn the amount from respondent No. 1’s account through a cheque duly issued to him by respondent No. 2, he was liable to pay the amount to respondent No. 1.

6. The suit was decreed by the trial Court only against respondent No. 2 for a sum of Rs. 8,400/- but was dismissed as against the appellant on the ground that the appellant had not approached respondent No. 1 nor had respondent No. 1 advanced the amount of Rs. 7,000/- to the appellant. The trial Court was of the opinion that the case of agency was not made out and respondent No. 2 could not be treated to be the agent of the appellant. It was f

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1999 Supreme(SC) 318

Cases Referred (4)