State Bank Of India vs Sanjeev Malik
1996 Latest Caselaw 187 Del

JUDGMENT

M. Jagannadha Rao, C.J.

(1) ADMIT.

(2) These two appeals have been preferred by the plaintiff, the State Bank of India, against orders passed by the learned Single Judge returning the respective plaints in the two suits under Order 7, Rule 10 Civil Procedure Code for presentation before the Court at Gurgaon, observing that the Bank can seek exclusion of lime under Section 14 of the Limitation Act.

(3) As the point arising in the two appeals (each of which arise out of a separate suit) is common, it is sufficient to take up the facts as they arise in FAO(OS) 39/95. That Fao arises out of Suit 1086/84. The suit is for recovery of Rs. 7,20,337.39. (FAO(OS) 40/95 arises out of Suit 1087/84 and that is for recovery of Rs. 7,98,247.37).

(4) In Suit 1086/84, the 1st defendant is Mr. Inder Raj Malik (Sole Proprietor of M/s Ruby which is engaged in wrist-watch business). Mr. Sanjiv Malik s/o Mr. J.R. Malik, Mrs. Malik,and Mr. Anil Malik are the defendants 2 to 4, being son, wife, & son respectively of late Mr. J.R. Malik. The factory of the defendant is located at 6/9 Kirti Nagar, New Delhi. From 1979, the State Bank of India was giving financial assistance under cash-credit facilities. On 11.4.1979, cash- credit was given upto Rs. 2 lakhs limit with 2-1/2% below Sbi advance rate. Security was given by Shri Janak Malik (now deceased) by letter dated 11.4.1979 and promissory note was also forwarded on same date payable to J.R. Malik & Sanjiv Malik and order by M/s Ruby for Rs. 2 lakhs with interest at 2-1/2% below Sbi rate by letter dated 11.4.1979. In the event of default the guarantor Mr. J.R. Malik was liable. The said pronote was endorsed by Mr. J.R. Malik and Sanjiv Malik in favour of the plaintiff Bank. The defendant, for the purpose of securing the loan facility, hypothecated his goods with the Bank. The value thereof is Rs. 7,12,447.00. The 1st defendant also created an equitable mortgage in favour of the Bank by depositing at Kirti Nagar Branch on 11.1.1980, title deeds of the property at Gurgaon of Jsisa Tyres (P) Ltd, having its head office at New Delhi together with a copy of resolution of the Board of that company dated 11.11.1980, to secure the loan granted to M/s Kaveri & M/s Ruby.

(5) Later the cash credit was extended to Rs. 4 lakhs under agreement dated 5.9.1991, interest was agreed at 1/2% below Sbi rate subject to maximum 16% per annum with quarterly rests. This loan was secured by J.R. Malik & Sanjiv Malik (2nd defendant) by letter dated 5.9.1991, pronote by M/s Ruby in favour of J.R. Malik & Sanjiv Malik etc. Further mortgage was created by deposit of title deeds of properties enumerated in para 8 of the plaint belonging to defendants 1 to 4 at Gurgaon.

(6) On 31.12.1982, defendant I executed a balance confirmation slip for Rs. 5,82,068.73. Thereafter, there was default, demand by plaintiff by registered letter dated 21.1.1983, the plaint dated 1.6.1984 is for Rs. 7,20,337.39, for a preliminary mortgage decree under Order 34, Rules 4,5,6 for sale of the mortgaged property at Gurgaon and personal decree against defendants 1 to 4 plus further interest at 15% + 3% on the above amount, based on title deeds of defendants 1 to 4 deposited with the Bank.

(7) In other words, the Bank filed the suit in the Delhi High Court, on its Original Side, seeking a personal decree against defendants 1 to 4, who are residents of Delhi and for a decree for sale of the mortgaged property which was located in Gurgaon, belonging to defendants 1 to 4, outside the Jurisdiction of Delhi High Court.

(8) Written statement was filed by defendants 1 to 4 dated 3.10.1985, raising various questions, mainly of fact, denying the transactions.

(9) Certain orders passed by this Court in Order 1, Rule 10 and Order 6, Rule 17 applications relating to sureties, M/s Jsisa Tyres & Co. have now to be referred to. The appellant Bank filed I.A. 6627/85 on 10.10.1985 for certain clarificatory amendment and for impleading M/s Jsisa Tyres (P) Ltd who are said to have earlier created the equitable mortgage with regard to property, at Gurgaon as security for loan to 1st defendant. That I.A. was opposed by M/s Jsisa Tyres (P) Ltd on the ground that the Delhi High Court had no jurisdiction to entertain suit for sale of property at Gurgaon which were under mortgage. A learned Single Judge allowed amendment on 5.9.1985 as claimed in paras 3 & 5 of the I.A. but refused to implead M/s Jsisa Tyres (P) Ltd. On appeal the Bank's appeals FAO(OS) 271/89 (and FAO(OS) 272/91) against the order refusing to implead M/s Jsisa Tyres (P) Ltd were dismissed as the mortgaged properties were outside Delhi and in view of Section 16(C) CPC. The appeals of defendants 1 to 4 stating that amendment applications are also not maintainable for the same reason, were allowed.

(10) As the Division Bench held in its order dated 29.10.1991 that Delhi Court had no jurisdiction to pass a mortgage decree against properties of the sureties at Gurgaon, the Bank entertained an apprehension that Delhi Court might decline to pass a mortgage decree against the properties which, according to it, were mortgaged by defendants 1 to 4. Hence, it decided to continue the suit for personal decree at Delhi which, if withdrawn, would be time-barred and to seek leave to withdraw the relief for seeking a mortgage decree at Gurgaon.

(11) Hence, the Bank filed the present I.A. 5840/92 on 1.10.1992 in Suit 1086/84 under Order 23, Rule 1 (3) Civil Procedure Code read with Section 151 Cpc, for permission to withdraw the suit in so far as it related to the sale of the mortgaged property and at the same time proceed with the present suit at Delhi for the personal remedy.

(12) The defendants 1 to 4 filed a reply on 26.9.1994 contending that the withdrawal of the suit partially was not permissible, that this Court is not seized of the matter as it had no jurisdiction over the property and was precluded from passing any order "except for return of the plaint". It was contended that the Bank could not pursue the property remedy at Gurgaon and the personal remedy at Delhi. The claim was indivisible. Order 23, Rule 1 Civil Procedure Code was not attracted to alternative claims. The order of the Division Bench dated 29.10.1991 meant to the effect that amendment application could not be dealt with by the Delhi High Court, would mean that even the application under Order 23, Rule 1 Civil Procedure Code would not be maintainable in the Delhi Court.

(13) The learned Single Judge, however, accepted that Delhi High Court had jurisdiction so far as the enforcing of personal liability was concerned. Even so, he felt that "it will not be sound exercise of jurisdiction conferred by Order 23, Rule 1(3) Civil Procedure Code to permit the plaintiff to withdraw apart of the claim ... It will be conducive to speedy trial to have all the issues tried only once before one Court, qua all the five defendants, which can only be done by a Court at Gurgaon." Having so held, the learned Judge "returned" the entire plaint under Order 7, Rule 10 for presentation to proper Court at Gurgaon, observing "IN so far as the question of limitation is concerned, plaintiff can bank upon Section 14 of the Limitation Act and seek from the Gurgaon Court exclusion of time lost in prosecuting the suit before this Court. This would also satisfy the spirit of observations made by the Division Bench".

(14) The learned Judge,therefore, instead of permitting withdrawal of the claim under Order 23, Rule 1 Civil Procedure Code in part as prayed, returned the entire plaint under Order 7,Rule 10 leaving the appellant to present the entire plaint to the Court at Gurgaon both for personal remedy as well as the property remedy against defendants 1 to 4.

(15) The State Bank of India has come up in appeal contending that, if in law it is entitled to continue this suit for obtaining a personal remedy against the mortgagors at Delhi, it is to be permitted to do so and that it cannot be compelled to have the plaint returned in toto - a relief which it has not claimed in this I.A. The Bank also contends that, in that event, it has a right to withdraw the plaint in part under Order 23, Rule 1 Cpc so far as mortgage relief is concerned, with leave to approach the Court at Gurgaon for a mortgage decree. The Bank also contends that it cannot be compelled to seek assistance of Section 14 of the Limitation Act so far as the personal remedy at Gurgaon is concerned, if it is barred as on today.

(16) On the other hand, learned counsel for the respondents-defendants submit that the order passed by the learned Judge is correct and does not warrant any interference.

(17) At the outset, it is important to notice that the learned Judge has accepted that the Delhi Courts have jurisdiction to grant a personal decree for money against defendants to 4. The problem arises only because of Section 16 of the Code of Civil Procedure which says that a suit on mortgage can be filed only in the Court within whose local limits the property is situate. But then, can a Court before which a plaint is filed have power to order return of the whole plaint even if the Court has jurisdiction to give relief in part ?

(18) That question must obviously depend upon the provisions of Order 7, Rule 10 Cpc read with Sections 15 to 20. We have stated that for a money decree, a suit against the defendants 1 to 4 lies at Delhi in view of Section 20(a) because the defendants 1 to 4 reside within the jurisdiction of this Court. But properties being at Gurgaon, Section 16 comes into play and a mortgage decree cannot be passed at Delhi. To cover such a peculiar situation, there is unfortunately no specific provision. For example, Section 17 permits suits to be Filed in Court within whose jurisdiction part of the suit property is located even if some properties are outside its jurisdiction. Section 20(b) provides for leave to be granted where some defendants are within jurisdiction and some are not. But what should be done if Delhi Court has jurisdiction to grant personal decree and not property decree and, if plaint is withdrawn in total, suit for personal decree will be barred now ?

(19) Before we try to seek a solution, we shall first have to deal with the question whether it is necessary to return the whole plaint even in regard to the relief of personal decree claimed which is within jurisdiction of Delhi Court. Now the reason given by the learned Judge here is that it is more convenient at least for the defendant to contest the claim in one Court than in different Courts. In Rakhalraj vs. Ranjan , a Division Bench of the Calcutta High Court took the view that for purposes of Order 7, Rule 10 Cpc, the Court in which a suit is instituted has no power to return the plaint for presentation to another Court on the ground that it is more advantageous to the defendant to have the suit tried in another Court.

(20) We shall now deal with the question whether the plaint can be returned in toto even if the Court has jurisdiction to grant relief in part. In Shankar vs. Balkrishna , a Division Bench of the Bombay High Court held that where a plaint is filed in a Court having no jurisdiction to try different causes of action, and the Court decides that it can deal with only one of the causes of action set out in the plaint, then it should retain the plaint and strike out from the plaint that part which it holds is beyond its jurisdiction and then the plaintiff can file another suit in the proper Court as to that cause of action so struck off. The learned Judges held "BUT,it is not competent for the Court in such a case to return the plaint for presentation to the proper Court for causes of action beyond jurisdiction and to proceed on a certified copy of the plaint for causes of action within the jurisdiction".

(21) Obviously, the learned Judges were having in mind the provisions of Order 6, Rule 16 Civil Procedure Code which says that the Court "may, at any stage of the proceedings order to be struck out or amended any matter in any pleading - (a) which may be unnecessary, scandalous, frivolous or vexatious, or (b) which may tend to prejudice, embarrass or delay the fair trial of the suit or (c) which is otherwise an abuse of the process of the Court". In the Allahabad High Court, a similar rule was followed by Sir Shah Sulaiman and Boys Jj in Ramrup Goshain vs. Ramdhari Bhagat . It was held that the entire plaint cannot be returned. Again in Lata vs. Maha Laxmi Bai (AIR 1942 Allahabad 130), it was held that where part of the plaint was within jurisdiction and part outside, it is incorrect to return the plaint. The Court should call upon the plaintiff to amend the plaint by striking out the portion outside jurisdiction and in case the plaintiff docs not amend the plaint, the Court must dismiss the suit to the extent the suit is beyond the jurisdiction. In that context, reference was made to Order 6, Rule 16 CPC. In the Punjab Chief Court in Mathra Das vs. Hakim Singh (1912) 16 I.C. 752, it was held that if a claim is partly cognizable by a Civil Court and partly by a Revenue Court and is lodged in a Civil Court, the Court must adjudicate on so much of the claim as is cognizable by itself, treating the rest of the claim as surplusage and leaving it to the plaintiff, if so advised, to bring a fresh suit in the Revenue Court as regards so much of the claim as is cognizable by that Court. In Bhagwati vs. Gobind Dat (AIR 1917 Oudh 49) it was held that entire plaint should not be returned merely because part of the cause of action is outside the Court's jurisdiction. In that case, it was held that although the Civil Court could not grant possession, it could grant the declaratory relief claimed, namely, that the mortgage by the tenant was invalid and not binding on the landlord-plaintiff.

(22) In Govind Rao vs. Bhagwan (AIR 1956 Hyderabad 17), while dealing with a civil suit for rent and eviction and noticing that eviction could be ordered only by the Rent Controller, the High Court at Hyderbad held that so far as the relief for rent was concerned, the Civil Court could take up the matter while so far as eviction was concerned, the Court could dismiss the same for want of jurisdiction. In Sri Someswara Swami Varu vs. Sriragitam (1971)(1) AnWR 14, it was held, following the above cases, that the entire plaint could not be returned and the Civil Court rightly granted a decree in regard to certain items of property within its jurisdiction while dismissing suit with regard to other items which were in an estate formerly and which could be recovered only after Patta is obtained. The Mysore High Court in Basangouda vs. Bhairappa (1969(2) Mys. L.J. 440) has also taken a similar view. It was there held that the Civil Court could grant mesne profits,but could dismiss the suit so far as the relief of possession is concerned "on the ground that the Civil Court has no Jurisdiction to grant the relief..." The Orissa High Court in Basanta Mishra vs. Laxmi held that relief for maintenance could be granted by the Munsif Court at Sonepur while the said Court would not, because of Section 16(b), be able to grant relief of partition as the property was outside the jurisdiction. In those circumstances, Order 6, Rule 16 was to be applied and plaintiff asked to delete the relief of partition. If plaintiff fails, the Court could strike out the relief but the plaint could not be returned under Order 7, Rule 10 CPC. All these rulings would show that the entire plaint cannot be returned if the Court has jurisdiction in regard to a part.

(23) We respectfully follow the aforesaid rulings. We respectfully dissent from the decision of the Patna High Court in Secretary of State vs. Natbar Singh (AIR 1927 Patna 234), Kishori Lal vs. Ram Sunder (AIR 1921 Allahabad 193). We also dissent from the Judgment of the Gujarat High Court in Gulabchand vs. Mv Tca Society , in so far as the said Court said that the whole plaint has to be returned. '

(24) It is, therefore, clear that where the defendants reside within the jurisdiction of one Court and the mortgaged properties are within the jurisdiction of another Court and where the suit for personal remedy and remedy against the property arc brought in the former Court, the entire plaint cannot be returned for presentation before the latter court. The Court should proceed with the plaint in so far as the relief for personal decree is concerned and declare its inability to grant relief against the property outside its jurisdiction. If the whole plaint is returned, then the plaintiff - as in this case before us - will stand the risk of an application under Section 14 of the Limitation Act being dismissed and the plaintiff cannot be compelled to lake such a risk.

(25) But then, as pointed out by the Bombay High Court in Shankar vs. Balkrishna , referred to above, if the original plaint is to be retained for purpose of deciding the issue within the Court's jurisdiction and not be returned, the plaintiff cannot be asked to file the suit with regard to the other subject matter in another Court by obtaining a certified copy of the plaint in the former of these Courts. The latter Court which could pass decree against the property, could not proceed with the suit before it on the basis of a certified copy from the former Court. It is also significant that in the Bombay case the Court held that the "plaintiff can file another suit in the proper Court". A similar view was taken in Mathra Das vs. Hakim Singh (1912) 16 I.C. 752 (Punjab) above referred to. In the Mysore case, Basangouda vs. Bhairappa (1969 (2) Mys. L.J. 440) it was observed that the relief which was refused was based on the fact that the Court had "no jurisdiction" to deal with that relief.

(26) It is in the light of the above rulings that any action under Order 6, Rule 16 Cpc is to be taken. The plaintiff can be asked to amend the plaint by deleting the relief outside the jurisdiction. Failing that the Court may strike off that part of the plaint "on the ground of want of jurisdiction", which would mean that the right to that relief could be pursued in the Court having proper jurisdiction. Even if the relief outside jurisdiction is dismissed, it is a dismissal not on merits so as to become res judicata or bar action under Order 2, Rule 2. This is because the refusal to give relief is based on absence of jurisdiction. No leave of Court is necessary to file a suit in the Court having jurisdiction over the property and, in fact, the submission before us is that this Court has no jurisdiction to grant leave in regard to the relief against property. Therefore, without the grant of any leave, under Order 23, Rule 1 or Order 2, Rule 2, the plaintiff has a right, in law, to file a suit in the Court of proper jurisdiction for seeking a mortgage decree against properties at Gurgaon.

(27) We are told suits have already been filed at Gurgaon against the properties allegedly mortgaged by defendants 1 to 4.

(28) We shall refer to one more aspect arising under Order 34, Rule 14. Learned counsel for the appellant Bank has pointed out that under Order 34, Rule 14 Cpc, it is stated that where a mortgagee has obtained a decree for payment of money in satisfaction of a claim arising under the mortgage, he shall not be entitled to bring the mortgaged property to sale otherwise than by instituting a suit for sale in enforcement of the mortgages, and he may institute such suit notwithstanding anything contained in Order Ii, 2. The said Rule, in our opinion, also supports the contention of the appellant that the suit for money at Delhi and suit for sale of mortgaged property at Gurgaon could be filed separately and that Order 2, Rule 2 will not come in the way. 491 This is the position notwithstanding anything in Order 2, Rule 2 Cpc, a stated in Order 34, Rule 14 CPC. The only restriction is that if a decree is passed by this Court, and the decree is transferred for execution to Gurgaon, the property of defendants 1 to 4 at Gurgaon under the alleged mortgage cannot be sold till the mortgagors, defendants 1 to 4, are given a chance of avoiding sale under Order 34 by paying up the decretal amount. We are referring to Order 34, Rule 14 Civil Procedure Code as an additional ground to say that the suit for money decree can continue at Delhi.

(29) The next question is as to what is the order to be passed. The orders of the learned Single Judge returning the two plaints are set aside and the plaints are directed to be retimed in this Court. The suits will proceed to the extent of considering the claims for a personal decree. So far as the relief against the properties of defendants 1 to 4 allegedly mortgaged by defendants 1 to 4 is concerned, the said relief is outside the jurisdiction of this Court and can be ignored as a surplusage by the Delhi High Court and no relief for a mortgage decree need be considered here. The refusal to consider the relief against the property being based on the jurisdiction of this Court under Section 16 Cpc, the said refusal will not come in the .way of the suit for mortgage decree at Gurgaon being considered in relation to the property of defendants at Gurgaon. No leave of this Court either under Order 23, Rule 1 or Order 2, Rule is necessary for pursuing the suit already Filed at Gurgaon against the properties of defendants 1 to 4 at Gurgaon. This is subject,however, to Order 34, Rule 14 Cpc, as stated above. We,therefore, do not think it necessary to deal with the question of leave.

(30) The appeals of the Bank are allowed and disposed of as stated above.