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2006 Supreme(Cal) 719
High Court Of Calcutta
Aniruddha Bose, J.
BASUDEO KHAITAN - Appellant
Versus
MADAN LAL PERIWAL - Respondent
C. S. 243 Of 2003
Decided On : 11/21/2006
A.P.AGARWAL, ASHIS CHAKRABORTY, DHRUBO GHOSH, P.K.DAS, Pratap Chatterjee
In order to maintain a suit with multiple plaintiffs, there must be a right to relief in respect of, or arising out of, the same act or transaction or series of acts or transactions, and if separate suits were brought, any common question of law or fact would arise.
Headnote:
CIVIL PROCEDURE - Multifariousness, Misjoinder of Plaintiffs, and Misjoinder of Causes of Action - Suit for refund of deposits made with partnership firm - Whether maintainable - Whether misjoinder of plaintiffs and causes of action - Interpretation of Order 1 Rule 1 and Order 2 Rule 3 of the Code of Civil Procedure (CPC).
Fact of the Case:
Plaintiffs, members of the Khaitan family, deposited money with the defendant partnership firm at the instance of the first defendant, who was entrusted with the duty to mediate a family dispute. The deposits were made on the understanding that they would be refunded with interest upon conclusion of the mediation or in case the mediation failed. The plaintiffs filed a suit for refund of the deposits, alleging that the mediation process failed and the defendants failed to refund the money.
Finding of the Court:
The court held that the suit was maintainable and that there was no misjoinder of plaintiffs or causes of action. The court found that the deposits were made pursuant to a common understanding among the parties, which was evidenced by a memorandum of understanding signed by the plaintiffs and the proforma defendants. The court also found that the cause of action of the plaintiffs was failure on the part of the defendants to refund the amount deposited with the second defendant, which arose out of a single source or had a common root.
Issues: 1. Whether the suit was maintainable in light of the alleged multifariousness, misjoinder of plaintiffs, and misjoinder of causes of action. 2. Whether the deposits were made pursuant to a common understanding among the parties. 3. Whether the cause of action of the plaintiffs arose out of a single source or had a common root.
Ratio Decidendi: 1. The court held that the suit was maintainable as the plaintiffs had a right to relief in respect of the same act or transaction, and if they brought separate suits, common questions of law or fact would have arisen. 2. The court found that the deposits were made pursuant to a common understanding among the parties, which was evidenced by a memorandum of understanding signed by the plaintiffs and the proforma defendants. 3. The court held that the cause of action of the plaintiffs was failure on the part of the defendants to refund the amount deposited with the second defendant, which arose out of a single source or had a common root.
Final Decision: The court dismissed the petition filed by the defendant partnership firm seeking dismissal of the suit on the grounds of multifariousness, misjoinder of plaintiffs, and misjoinder of causes of action.
( 1 ) THE instant interlocutory motion has been taken out by the petitioner under Rule 11 (d) of Order 7 of the Code of Civil procedure ("code" in short) for dismissal of the suit on the grounds of multifariousness, misjoinder of plaintiffs and misjoinder of causes of action. The suit out of which present proceeding arises was instituted by the plaintiffs, being six individuals and an incorporated company claiming decree for a sum of Rs. 56,12,250/ -. The first defendant is an individual, whereas the second defendant, being the petitioner herein is a partnership firm, of which the second, third, fourth, fifth and the sixth defendants have been described as partners. Fifteen other individuals have also been impleaded in the suit as proforma defendants. The plaintiff Nos. 1 to 6 and the proforma defendants appear to be members of different branches of the same family, and had equity holding in two limited companies.
( 2 ) THE case of the plaintiffs is that there was a dispute among the family members and the first defendant was entrusted with the duty to mediate and settle the dispute. The decision of the disputing groups was expressed in a memorandum of understanding signed by almost all the plaintiffs and proforma defendants and this instrument is dated 16th May, 2004, a copy of which has been made Annexure "b" to the plaint. The plaintiff Nos. 1 to 6 had deposited the aforesaid sum of money with the second defendant at the instance of the first defendant, on the latter's representation that the partnership firm was under his management and control. In pursuance of such mediation process, the plaintiffs and the proforma defendants had sold their respective holdings in two companies, being Selimbong Tea Co. Ltd. and Seeyok Tea Co. Ltd. and deposited the sale proceeds with the second defendant. This deposit as has been pleaded in the plaint was made with the understanding that on conclusion of the mediation, and in the event the mediation process failed, the money so deposited would be refunded with a specified rate of interest. In the memorandum of understanding, the plaintiff nos. 1, 2, 3, 4 and 6 as also majority of the proforma defendants were signatories.
( 3 ) MR. Das, learned Senior Counsel appearing for the petitioner submitted that the plaintiffs had deposited diverse amounts with the defendant No. 2 and the claim of each plaintiff is also in respect of the sum of money they had deposited individually. The memorandum of understanding dated 16th may, 1994 does not refer to any deposits having been made by the parties with the second defendant. Moreover, the fifth and the seventh plaintiffs (Vimal Securities Limited) were not parties or signatories to the memorandum of understanding and the seventh plaintiff could not be said to be a part of the Khaitan family either. Mr. Das argued that each individual plaintiff was seeking to enforce his individual claim against the second defendant in respect of independent transactions and such claim could not be made in a single suit. The right to relief of the plaintiff were not in respect of, nor the same did arise out of the same set or set of acts and transactions. The case of the petitioner is also of misjoinder of causes of action, as the plaintiffs and the defendants are separate in this case, and the claim of the plaintiffs are based on separate transactions.
( 4 ) MR. Das relied on the following authorities in support of his submissions: 1. An unreported judgement of this Court in the case of Margo Trading and Six Ors. vs. Own Credit Private Ltd. , delivered on 30th October, 1995 in Suit No. 242 of 1995. 2. A decision of an Hon'ble Division Bench of this Court in the case of chandi Prasad Sikaria vs. Premlata Nahata, reported in 2005 (4) CHN 664.
( 5 ) ALTERNATIVE submission of Mr. Das is that even if the suit could be maintained by the plaintiff Nos. 1 to 6, the seventh plaintiff ought to be struck out from array of the plaintiffs as the said plainti
