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High Court Of Himachal Pradesh
KAMLESH SHARMA,SURINDER SARUP
EASTERN IMPEX CORPORATION - Appellant
Versus
S.W.RUBEER WORKS PVT.LTD. - Respondent
Regular First Appeal Nos. 72 and 73 of 1989
Decided On : 11/17/1998
COMPANY - WINDING UP - SUIT FOR RECOVERY OF DEBT - MISJOINDER OF PARTIES AND CAUSES OF ACTION - WHETHER SUIT BAD FOR MISJOINDER - INTERPRETATION OF ORDER I, RULES 3, 3-A, 5, 6 AND 9, C.P.C. - JURISDICTION OF COURT - WHETHER SUIT BELOW PECUNIARY JURISDICTION OF COURT - INTERPRETATION OF SECTION 446(2) OF THE COMPANIES ACT, 1956 - NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTIONS 93, 100 AND 118 - WHETHER NOTICE OF DISHONOUR NECESSARY - WHETHER PRESUMPTION UNDER SECTION 118 OPERATES ONLY IN FAVOUR OF OR AGAINST PARTIES TO NEGOTIABLE INSTRUMENT OR THEIR PRIVIES - WHETHER ONUS OF PROVING WANT OF CONSIDERATION IS ON THE DRAWER OF A NEGOTIABLE INSTRUMENT.
Fact of the Case:
The plaintiff-bank filed a suit for recovery of different amounts from Hypine Carbons Ltd. along with other defendants. The case of the plaintiff-bank was against various sets of defendants, as set out in paragraph 7 of the plaint. The suit was contested only by defendants No 4, 5, 10, 11 and 13. It was directed and ordered to be proceeded ex-parte against the remaining defendants by an order dated 29.5.1980, because the said defendants did not appear despite service.
Finding of the Court:
The Court held that the suit is not bad for mis-joinder and Issue No.1 has been correctly decided in the impugned judgment under appeal. The Court also held that the learned Single Judge has rightly held that the suit is not bad for mis-joinder and Issue No.1 has been correctly decided in the impugned judgment under appeal. The Court further held that the learned Single Judge has rightly come to the conclusion that the hundi in question-Ex. P-3 on record, having been accepted by defendant No.4 on behalf of defendant No. 5, no notice was necessary in the present case, which is the precise argument raised before us by the learned Counsel for the appellants. The Court also held that there is no escape from the conclusion, as has been rightly drawn by him in the impugned judgment, while answering issue No. 8 in favour of the plaintiff-bank.
Issues: 1. Whether the suit is bad for mis-joinder? 2. Whether the suit is within time? 3. Whether this Court has territorial jurisdiction to entertain the suit? 4. Whether defendants No.10 and 11 are not liable to pay the amount of Hundi Ex. P-17? 5. If Issue No. 4 is found against defendants No.10 and 11, to what amount of interest is the plaintiff entitled on the amount of this Hundi? 6. Whether the letter Ex. P-2 written by defendants No.10 and 11 to the plaintiff Bank was without consideration and the defendants are not liable to pay the amount of the sale proceeds of the goods mentioned in this letter to defendant No.1? 7. If issue No.6 is found against defendants No.10 and 11, to what amount is the plaintiff entitled to on account of the sale proceeds of the goods and interest, as mentioned in letter Ex. P-3 ? 8. Whether the acceptance of Hundi Ex. P-3 for payment by defendants No. 4 and 5 was without consideration and as such they are not liable to pay the amount thereof ? 9. If issue No. S is found against defendants No. 4 and 5, to what amount the plaintiff is entitled on account of interest on the amount of Hundi Ex. P-3 ? 10. Whether and if so to what relief is the plaintiff entitled against the other defendants ?
Ratio Decidendi: 1. Order I, Rules 3, 3-A, 5, 6 and 9, C.P.C. should receive liberal interpretation. To hold otherwise would defeat the ends of justice. 2. In order to succeed in its claim against any of the contesting defendants, the plaintiff-bank had to establish the contract contained in its agreement dated December 18, 1972, with the first defendant. As regards the contesting defendants, it was also necessary for the plaintiff-bank to prove some additional facts peculiar to them. Further, that would not mean that there was no such community of interest so as to necessitate the filing of separate suits qua each one of them by the plaintiff-bank. 3. The suit giving rise to these appeals i.e. Civil Suit No. 72 of 1979, was filed in the month of October of the year i.e. 1979. It was finally disposed of by the learned Single Judge vide the impugned judgment in 1989 i.e. 10 years later. The present appeals have been pending since then. Now to re-open the entire matter on the question of misjoinder of the suit, as is sought to be argued before us on behalf of the appellants, would tantamount to opening virtually a Pandoras box. 4. Irrespective of valuation of the suit, this Court and this Court alone has the jurisdiction to try it on account of Section 446(2) of the Companies Act5 1956 in view of the order made by this Court putting the first defendant in liquidation in Company Petition No.1 of 1977. 5. When a promissory note is dishonoured by non-payment, the holder thereof must give notice that the instrument has been so dishonoured to all other parties whom he seeks to make severally liable thereon, and to some one of several parties whom he seeks to make jointly liable thereof. The proviso thereof says that "nothing in this Section renders it necessary to give notice to the maker...... or acceptor .....”. 6. In a suit, upon an instrument which has been dishonoured, the Court shall, on proof of the protest, presume the fact of dishonour, unless and until such fact is disproved.
Final Decision: The appeals were dismissed.
Surinder Sarup, J.—This judgment will dispose of RFAs No. 72 and 73 of 1989, Eastern Impex Corporation and another v. State Bank of Patiala and another and S. W. Rubber Works Pvt Ltd. v. State Bank of Patiala and another, respectively, as they arise out of the same judgment and decree of the learned Single Judge of this Court passed in Civil Suit No. 72 of 1979 dated 27.6.1989 titled State Bank of Patiala v. Hypine Carbons Ltd. and others.
2. The facts giving rise to these appeals are that defendant No.1 Hypine Carbons Ltd. (in liquidation) was set up at Nalagarh, District Solan, for the purpose of producing and processing of activated carbon and bye-products thereof. It had applied for loan to the State Bank of Patiala, plaintiff-respondent herein, which was duly sanctioned by the latter in the form of granting some credit limits to defendant No.1 in pursuance of an agreement dated December 18, 1972. This agreement was reviewed and the necessary documents were also renewed from time to time.
3. The said defendant No.1 Hypine Carbons Ltd. had been supplying its manufactured products, already hypothecated with the plaintiff-bank to various parties with a stipulation that payment should be made for the said product directly to the plaintiff-bank. For this purpose, hundis used to be drawn up by the said parties which, in turn, used to be discounted to the plaintiff-bank.
4. A petition for winding up of defendant No.1 i.e. Hypine Carbons Ltd. (Coy. Petition No. 1 of 1977) was filed in this Court by M/s. Kuldip Industrial Corporation. This Court, while admitting the said petition, appointed a Provisional Liquidator in respect of the assets of the said defendant No.1 under Section 450 of the Indian Companies Act, 1956.
5. Since defendant No.1 had made default regarding repayments to the plaintiff-bank provided under various agreements between the parties, its manufacturing operations came to a standstill. There followed the action of re-calling the loan by the plaintiff-bank from defendant No. 1, by issuing notices to the latter, and requiring repayment of the loan amount. Moreover, the Provisional Liquidator appointed by this Court could also not make suitable arrangement for the discharge of liability of defendant No. 1 to the plaintiff-bank.
6. A Company Application No. 4 of 1978 was filed by the plaintiff-bank in the main case i.e., Coy. Petition No. 1 of 1977 containing the prayers, inter alia, (a) that it should be directed to sell the pledged/hypothecated goods immediately and in case the amount realised by their sale is more than the amount due to the plaintiff-bank, the balance may be allowed to be paid to respondent No.2, i.e. National Traders, New Delhi so that the employees of the Company are paid their wages as directed by an order of this Court dated 24.8.1977; (b) that in case the amount realised from the sale of the pledged/hypothecated goods falls short of the amount due to the plaintiff-bank, it may be permitted to file a suit for recovery of the balance amount with interest and costs by enforcing the personal guarantee of respondents N6. 3 to 5, namely, S. Sahai, Eastern Impex Corporation and K.B. Sharma all from Delhi; and (c) that a suit may be permitted to be filed against respondent No.1, i.e. Hypine Carbons Ltd. (in liquidation) as also respondents No. 6 to 12 for recovering the amount, as detailed in the said application, along with interest and costs.
7. In the above-mentioned application, M/s. Hypine Carbons Ltd. was respondent No.1 while defendants No. 2,4,6,8,10,12 and 13 were arrayed as respondents No. 6 to 12.
8. Company Application No. 4/78 was ultimately allowed by this Court by an order dated 30.5.1979. The operative part of that order reads as follows: "As such, the application is allowed and the petitioner is permitted to sell the goods pledged/hypothecated to it on behalf of respondent No.1 Company in collaboration with the Official Liquidator. Proper accounts of the goods sold and price fetche
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