Oriental Bank Of Commerce vs Sri Mohan Gupta
1997 Latest Caselaw 1064 Del

ORDER

IA Nos. 6832/94 & 9038/94 & Suit No.550/94

1. This order will dispose of IA No.6832/94- by the defendant under Order 7 Rule 11 CPC for rejection of the plaint on the ground that averments in the plaint do not disclose cause of action giving rise to a triable issue for a mortgage suit under Order 34 CPC and IA No.9038/94 by the plaintiff under Order 6 Rule 17 CPC for amendment of the plaint with a view to convert the mortgage suit into an ordinary suit for recovery of money with other consequential changes in the plaint.

2. The facts relevant for the disposal of the applications are as under:

The plaintiff bank filed the present mortgage suit for the recovery of sum of Rs. 18,26,014.22 besides pendente lite and future interest, against the defendant, an Officer in its Establishment Branch at the Head Office, mainly on the pleas that: during the course of his employment with the plaintiff bank, while dealing with the staff's vouchers for travelling allowance, medical/hospitalization bills etc., he made certain interpola- tions in the record of the bank and committed certain acts of forgery; opened fictitious accounts in the name of claimants; drew cheques in their names, got them encashed through fictitious accounts and embezzled a sum of Rs. 16,47,356.29 paise, which amount it is claiming through this suit as its own money. (paras 1 to 6 of the plaint). In the plaint it is also averred that the defendant had obtained housing and car loans from the plaintiff bank thereby adding to his liability towards the bank. It is claimed that the defendant created an equitable mortgage of his immovable property in favour of the bank as also hypothecated the car purchased by him with the bank and for the recovery of the amount so embezzled and loaned, the plaintiff has filed the present mortgage suit. Para 24 of the plaint, spelling out the cause of action for the suit read as follows:

"The cause of action arose on different dates of the loaning transaction starting from 1979 till the end. Such dates are not being reproduced herein with a view to avoid repetition which have been mentioned in the foregoing paragraphs. The cause of action finally arose on 22-1-1994 when the plaintiff bank came to know all the evil designs and criminal acts committed by the defendant in defrauding the plaintiff bank with a colossal amount of money. The cause of action is still continuing and shall continue to arise till the defendant repays the entire outstand- ings to the plaintiff bank".

3. From the above, it is evident that the suit pertains to both the amounts, namely, the amount allegedly embezzled and the amount advanced as housing and car loans.

4. On being served with the summons, the defendant filed his written statement. While denying any misappropriation he also raised preliminary objection regarding maintainability of the suit under Order 34 CPC, alleg- ing that the documents mortgaging the property when housing loan was raised were being used deliberately and mischievously for the recovery of the amount, allegedly embezzled by the defendant, for which no mortgage was created in favour of the bank. However, before filing the written statement on 22nd September 1994, the defendant filed the afore-noted application under Order 7 Rule 11 CPC on 11th July 1994, wherein it is averred that on the grant of housing and car loans, the plaintiff bank itself started deducting monthly instalments from the salary of the defendant in accordance with the repayment schedule, fixed as per agreement for the aforesaid loans and the said regular deductions were continuing without any protest from the defendant even at the time when the present suit was filed and, thus, there was no occasion for the bank to file a suit for the recovery of the loaned amount. It is also pleaded that infact in the month of December 1993, the defendant himself wrote a letter to the plaintiff-bank seeking its permission to deposit the entire outstanding amount in respect of the said two loans but, instead of acceding to the said request, the plaintiff filed the present suit. It is thus, asserted that there was no cause of action for filing the suit for recovery of the housing/car loans as the monthly instalments were being deducting by the plaintiff bank. As regards the suit for recovery of amount allegedly misappropriated by the defendant, it is pleaded that not only the issue was subjudice in the criminal court, the recovery of the alleged embezzled amount could not be effected by means of mortgage suit under Order 34 CPC. It is, thus, prayed that on both the counts there being no cause of action for the suit as framed, the plaint deserve to be rejected.

5. In its reply to the application filed on 22nd September, 1994, except for highlighting the alleged massive fraud committed by the defendant, nothing has been stated which could show that any of the averments in the plaint disclose a cause of action for filing a mortgage suit. There is no reply even to the stand of the defendant that he had offered to repay the balance housing and car loans in one instalment. However, simultaneously, on 28th September, 1994, the plaintiff filed IA No.9308/94 seeking leave to amend the plaint to convert the mortgage suit into an ordinary suit.

6. I have heard learned counsel for the parties.

7. While conceding that the recoveries sought to be effected in the suit related to two distinct causes of action, Mr. R.S.Sharma, learned counsel for the plaintiff, has strenuously urged that there is no prohibition in law in the two causes of action being united together and, thus, it cannot be said that the plaint does not disclose any cause of action. He submits that the suit as framed could not proceeded with as an ordinary recovery suit after the plaintiff's application for amendment of the plaint is allowed. He, however, candidly admits that the amount allegedly embezzled by the defendant could not provide the cause of action for filing a mort- gage suit. In support of his contention that two distinct causes of action could be united, learned counsel has placed reliance on a Bench decision of this Court in M/s. Jay Industries Vs. Nakson Industries , wherein it has been held that the Code of Civil Procedure contemplates joinder of causes of action and it is permissible and upto the plaintiff to unite in the same suit several causes of action against the same defendant.

On the other hand, Mr. Miglani, learned counsel for the defendant, has submitted that the ratio of the said judgment is not applicable to the facts in hand inasmuch as in the present case the averments in the plaint do not disclose any cause of action giving rise to a triable issue, either for the recovery of housing/car loans-as there was no demand from the plaintiff to repay the same and infact monthly instalments were being deducted from the defendant's salary by the bank to which he never objected or for the recovery of the amount allegedly embezzled by the defendant by way of a mortgage suit as no equitable mortgage was created by the defend- ant to secure this amount. I find force in the contention of learned coun- sel for the defendant.

8. It is a trite proposition of law that while considering an application under Order 7 Rule 11 CPC, to decide the question whether the plaint dis- closes any cause of action or not, the court has to look only at the aver- ments contained in the plaint itself and not on the defense set up in the written statement. Thus, the prime question for consideration is whether any of the averments in the plaint discloses a cause of action giving rise to a triable issue in a mortgage suit under Order 34 CPC. Taking the loan amount first, for which the defendant had created an equitable mortgage in favour of the bank, there is not even a whisper in the entire plaint that there was either any default in repayment of instalments towards the said loans or the defendant had protested to such deductions from his salary or that he had failed to pay the same on demand. In the absence of any such averment, could it be said that a cause of action had arisen in favour of the bank to file a suit for the recovery of the said amount? Obviously, the answer has to be in the negative.

9. Though it is true that at this stage, the defense set up by the de- fendant in his written statement cannot be taken into account for deciding the issue in question but having found that the plaint does not disclose any cause of action for filing a suit for recovery of the loaned amount, it may be relevant to refer to a few facts disclosed in the application under Order 7 Rule 11 CPC, which in fall fairness should have been disclosed by the plaintiff in the plaint itself.

10. In the application, the defendant has alleged that vide letter dated 23rd December 1993, he had expressed his desire to repay the entire loan and had requested the plaintiff bank to permit him to deposit the entire outstanding balance in respect of the housing/car loans, but there was no response to the said letter from the plaintiff bank. In addition thereto, the defendant has also placed on record the certificates issued by the bank indicating that not only prior to the filing of the suit, but even thereaf- ter, monthly instalments towards the housing and the vehicle loans were being deducted regularly from the salary of the defendant. There is no rebuttal to these allegations. Therefore, on the date of filing of the suit, there was neither any default on the part of the defendant in re- payment of the scheduled instalments nor he had failed to repay the loans on demand by the plaintiff bank. Even ignoring these facts, which clearly show that as on the date of filing of the suit, no cause of action existed for recovery of the housing and car loans, I have no hesitation in coming to the conclusion that none of the averments in the plaint disclose any cause of action giving rise to a triable issue in the mortgage suit.

11. Coming to the second amount sought to be recovered by means of the present suit, as noted above, learned counsel for the plaintiff could not dispute that a mortgage suit would not lie for the recovery of amount allegedly embezzled by the defendant but his submission is that there being no bar to uniting the two causes of action in the same suit, the present mortgage suit at the most could be tried as an ordinary suit even in respect of loaded amounts. The contention is fallacious.

The question for consideration is whether the averments in the plaint disclose any cause of action for a mortgage suit, assuming that the two cause of action could be joined. It is not the plaintiff's case that the defendant had any point of time agreed to pay the amount allegedly embezzled by him and had secured the sum so claimed against the mortgaged property. Therefore, the amount allegedly embezzled by the defendant could obviously not provide a cause of action for filing of a mortgage suit.

12. As regards the application seedings amendment of the plaint, in my view, even in the first instance, uniting the two distinct causes of action with a view to recover both the amounts against the mortgaged property was not bona fide, the present application filed after defendant's application seeking rejection of the plaint, is an afterthought to avert the inevitable consequence of rejection of the plaint on the ground that it does not disclose any cause of action and thus, cannot be allowed.

13. It is also difficult to accept that the proposed amendment is a dif- ferent approach on the same cause of action for obtaining the same relief, as pleaded. Admittedly, the recovery of the amount allegedly embezzled by the defendant is a separate and distinct cause of action. The mortgage suit under Order 34 CPC for recovery of the amounts loaned to the defendant as housing/car loans, for which the defendant had equitably mortgaged his property in favour of the plaintiff, is a distinct cause of action as against the ordinary suit for recovery of amounts allegedly embezzled by the defendant.

14. For the foregoing reasons, I am contained to hold that the suit filed Order 34 CPC, as framed by the plaintiff, does not disclose any cause of action either with regard to the recovery of housing/car loans or the recovery of the amount allegedly embezzled by the defendant and thus, the application filed by the defendant under Order 7 Rule 11 CPC deserves to be allowed.

15. For the view I have taken it is unnecessary to deal with the decision of this Court in M/s. Jay Industries (supra) which is otherwise distinguishable on facts.

16. In the result, IA No.6832/94 is allowed and the plaint is rejected. IA No.9038/94 is dismissed. Consequently, the suit is also dismissed with no order as to costs.

IA Nos.2562/94, 12009/94, 7865/94, 8434/94 & 6493/96.

17. In view of the fact that the main suit has been dismissed, the applications seeking interim reliefs are rendered infructuous and are accordingly dismissed. Interim order dated 9th March 1994 stands vacated.