Back
High Court of Kerala
B. KEMAL PASHA, J.
Kunnoth Moidu, Director, M/s. Air Cosmos Tours & Trade Links (Pvt.) Ltd.
Versus
Mohammed Iqbal Shah Director & Others
CRP. No. 388 of 2009
Decided on: 25-09-2014
Dismissal of Third Party Claim - Code of Civil Procedure - Order VIII A Rule 8 - 1908 - Summary of Acts and Sections: The court discussed the provisions of Order VIII A Rule 8 of the Code of Civil Procedure, 1908, which allows for third party claims and the procedure for adjudication. The court emphasized the need to consider whether the suit would become more complicated and prejudicial to the plaintiff if the third party claim is entertained, and the circumstances under which such claims can be adjudicated along with the suit to avoid multiplicity of proceedings.
Fact of the Case:
The petitioner, 4th defendant in a money suit, filed a third party claim under Order VIII A of the Code of Civil Procedure against defendants 2, 3, and 5 based on indemnity bonds. The court below dismissed the claim, and the petitioner challenged the dismissal.
Finding of the Court:
The court found that the dismissal of the third party claim was erroneous and directed the court below to draft the decree and issue it to the petitioner after ensuring payment of the required court fee.
Issues: The main issue was the dismissal of the third party claim under Order VIII A Rule 8 of the Code of Civil Procedure.
Ratio Decidendi: The court emphasized the need to consider whether the suit would become more complicated and prejudicial to the plaintiff if the third party claim is entertained, and the circumstances under which such claims can be adjudicated along with the suit to avoid multiplicity of proceedings.
Final Decision: The court directed the court below to draft the decree and issue it to the petitioner after ensuring payment of the required court fee.
1. Challenging the dismissal of his third party claim under Order VIII A Rule 8 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'the Code') the Subordinate Judge's Court, Vadakara, through order dated 07.03.2009 in I.A.416/2002 in O.S.47/2001, the defeated 4th defendant has come up in revision.
2. O.S.47/2001 was a suit for money filed by the ING Vysya Bank Limited, Calicut as plaintiff against the 1st defendant company and defendants 2 to 6, who were its Directors. The 4th defendant, who is the petitioner herein, filed a written statement contending as follows:-
“This defendant confesses to a decree with a request to re-evaluate the interest claimed in the light of the Apex court judgment reported in 2001 SAR (Civil) 930. This defendant further submits that the confession of this defendant is without prejudice to a claim under Order 8 A of the Code of Civil Procedure against Defendants 2, 3 and 5 based on indemnity bonds for which leave is claimed today by separate applications. There may be a decree accordingly.”
Through the written statement, the 4th defendant has made it clear that he was about to proceed against defendants 2, 3 and 5 based on indemnity bonds executed them in his favour, by having recourse to the provisions under Order VIII A of the Code. Through separate application, leave was also sought for. Leave was granted.
3. Defendants 2, 3 and 5 in the suit are the respondents in the third party claim. According to the petitioner, defendants 2, 3 and 5 had independently executed Exts.A1 to A3 indemnity bonds dated 17.12.1996. The case of the petitioner is that the plaintiff bank had issued bank guarantee for Rs.10 lakhs to IATA by debiting the bank guarantee loan account of the 1st defendant company. One bank guarantee issued in favour of the Indian Airlines was invoked to the extent of Rs.8,134/-. The bank had adjusted an amount of Rs.2,68,148/- on 02.01.1999 from the NRNR account of the petitioner. Further, an amount of Rs.36,831/- was adjusted from his NRNR account on 16.12.1999. The petitioner paid an amount of Rs.1,00,000/-, Rs.50,000/- and Rs.25,000/- also thereby making a total payment of Rs.4,79,979/- to the loan account.
4. The petitioner had created a mortgage by depositing his title deeds relating to his dwelling house as persuaded by defendants 2, 3 and 5 for facilitating the sanction of the bank guarantee. It was because of the mortgage of his dwelling house, that the petitioner was constrained to discharge the liability to the said bank. It is the case of the petitioner that the said defendants had executed Exts.A1 to A3 indemnity bonds in their personal capacity, thereby each of them indemnifying him against all claims of the bank up to a limit of Rs.10 lakhs. Therefore, each one of defendants 2, 3 and 5 are liable to the petitioner on the indemnity bonds to an extent of 1/4th of the plaint claim. The petitioner is entitled to get 1/4th out of the total amount of Rs.4,79,979/-along with interest at 8.5% on Rs.2,87,500/- from 16.12.1999 plus 1/4th of the plaint claim.
5. Defendants 1, 2 and 3 have filed counter affidavit contending, inter alia, as follows:-
The 3rd defendant, who is the 2nd respondent herein, alone contested the third party claim. The petitioner is not entitled to have recourse to the provisions under Order VIII A of the Code and that his remedy is to file a separate suit. The entire liability of the company as such has to be taken note of and the same has to be apportioned among all the Directors.
6. It seems that apart from taking up a contention that the junction of all the Directors are necessary for deciding the liability, any specific plea of non-joinder has not been taken up by defendants 1 and 2. At the same time, the 3rd defendant has taken up a contention that the claim is bad for non-joinder of necessary parties.
7. On the side of the petitioner, the petitioner was examined as PW1 and Exts.A1 to A4 were marked. On the side of the respondents, the 3
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
