M/S. Sadi Ram Sheo Shankar vs Madan Lal & Others
2000 Latest Caselaw 653 Del

ORDER

K.S. Gupta, J.

1. This Order will govern the disposal of I. A. Nos. 9487/97 and 8049/98. I.A. 9487/97 under Order xxxvII Rule 3(7) read with section 151 CPC and Section 5 of the Limitation Act has been filed by defendant No. 3 seeking condensation of 46 days delay in entering appearance. I. A. 8049/98 under Order xxxvII Rule 2(3) and section 151 CPC has been filed by the plaintiff seeking passing of decree for the suit amount against the defendants. It is alleged that although defendant No. 3 was served with summons on 20th September, 1995, it entered appearance only on 15th November 1995. Defendants 1 & 2 were served by publication on 27th June, 1998, still defendant No. 1 has not entered appearance till date.

2. As is manifest from the order dated 3rd February 2000 the counsel of the plaintiff was asked to show how this suit against defendant No. 3 is maintainable under Order xxxvII CPC. I have heard Sh. Surindra M.Mittal for plaintiff and Sh. Kailash Gambhir for defendant No. 3 on the point of maintainability of suit under the provisions of Order xxxvII CPC as also on both the said I. As.

3. Suit was filed under Order xxxvII CPC by the plaintiff for recovery of Rs. 30,91,453/- alleging that it is a registered partnership firm carrying on business as grain merchant and commission agent and Shyam Sunder Gupta who has signed and verified the plaint and instituted this suit, is one of the partners of the firm. Defendant No.1 is the proprietor of M/s. Kissan Trading Co. and M/s. M.K.B. & Co. carrying on business as grain merchant at Barnala (Punjab). Defendant No. 2 is a broker dealing in food grains. On the guarantee of defendant No. 2 the defendant No.1 sold 5960 bags of wheat allegedly booked by him from Barnala for destinations in south under 8 Railway receipts bearing Nos. 116088, 116089, 116090, 116091, 116092, 116094, 116095 & 116096, all dated 18th August 1992 to the plaintiff for Rs. 19,98,665/- He also received that amount Rs. 4 lakhs in cash, a cheque for Rs.1.30 lakhs and 5 bank drafts for the total amount of Rs.14,68,665/- which were got encashed by him through the bankers at Barnala. On receipt of the amount the defendant No. 1 endorsed said Railway receipts issued by defendant No. 3 in favour of the plaintiff. It is alleged that the plaintiff sold through defendant No. 2 the consignments covered by the said RRs to different persons carrying business in Andhra Pradesh and Tamil Nadu. RRs alongwith the bills and other relevant documents were thereafter sent to the buyers through State Bank of Mysore, Naya Bazar, Delhi. It is further stated that when after expiry of normal transportation period the consignments did not reach the destinations in Andhra Pradesh and Tamil Nadu, on enquiries it was revealed that in fact no consignments covered by the said RRs were entrusted for transportation to the Railways at Barnala and RRs were issued in collusion with the Station Superintendent, Chief Goods Superintendent and senior officers of defendant No. 3 then posted at Barnala. Thereafter, the plaintiff got a notice dated 18th September 1992 issued to defendant No. 3 and others. It is alleged that defendants No. 1 on being repeatedly asked by the plaintiff to refund the said amount issued 10 post dated cheques for Rs. 2 lakhs each bearing Nos. 875004, 875005, 875006, 875007, 875008, 875009, 875010, 875011, 875012 and 875013 dated 30th September 1992, 15th October 1992, 30th October 1992, 15th November, 1992, 30th November 1992, 15th December 1992, 30th December 1992, 15th January 1993, 30th January 1993 and 15th February 1993 respectively drawn on Punjab National Bank, Barnala. However, on presentation these cheques were returned with the remark 'insufficient funds'. In the meantime on being pressurised by defendant No. 2 defendant No. 1 gave in cash Rs. 3 lakhs on 2nd November 1992 to the plaintiff against a receipt. Plaintiff was thus constrained to report the matter to PS Lahori Gate Delhi on 10th May 1993 and the case is being investigated by Police. Plaintiff also got notices issued through counsel to defendants 1 & 3. It is asserted that defendant No. 3 is vicariously liable to pay the amount to the plaintiff firm alongwith defendants 1 & 2. Suit amount of Rs. 30,91,453/- includes interest @ 21% p.a. upto 15th August 1995.

Sub Rule (2) of Rule 1 of Order 37 xxxvII which is relevant, runs as under:-

"Subject to the provisions of sub-rule (1), the Order applies to the following classes of suits, namely:-

(a) suits upon bills of exchange, hundies and promissory notes;

(b) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest, arising-

(i) on a written contract, or

(ii) on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty; or

(iii) on a guarantee, where the claim against the principal is in respect of a debt or liquidated demand only."

4. It may be noticed that as per the averments made in plaint the liability for payment of suit amount is sought to be fastened against defendant No. 3 on the ground of alleged collusion and connivance between defendant No. 1 and the Station Superintendent, Chief Goods Superintendent and senior officers, then posted at Barnala Railway station in issuing 8 Railway receipts in question without having been entrusted the consignments covered by them. Based on these averments the present suit obviously does not fall in any of the categories enumerated in said sub rule (2) of Rule 1 of Order xxxvII CPC. Suit as framed is thus not maintainable under Order xxxvII CPC against defendant No.3. Decision in The Union of India Vs. Firm Laxminarain Harnarain, AIR 1963 Rajasthan 62, relied on behalf of the plaintiff has no applicability to the issue on hand. There was no necessity for defendant No. 3 to have filed aforesaid I. A. 9487/97, nor suit can be decreed against defendant No. 3 under Order xxxvII Rule 2(3) CPC in I.A. 8042/98 as claimed by the plaintiff.

5. As regards decreeing the suit against defendants 1 & 2 in I.A.8042/98, from the order dated 11th September 1998 it may be seen that defendants 1 & 2 were found to be served by publication and affixation on the notice board. This order further notices that defendant No. 1 was yet to be served by affixation on his last known address and summons was, therefore, ordered to be issued for the date already fixed in the case. None of the orders passed subsequent to the order dated 11th September 1998 suggest that defendant No. 1 was actually served by affixation on his last known address. It will not be out of place to state that I.A.7881 and 7862/98 filed by defendant No. 2 came to be dismissed in default by the order dated 16th September 1998. I.A.7881/98 pertained to seeking permission for entering appearance while I.A.7862/98 under section 5 of the Limitation Act related to condensation of delay in filing I.A.7881/98. Despite defendant No. 1 having not entered appearance after service by publication and defendant No. 2 having not applied for restoration of both the said I.As, the suit cannot be decreed against them it being an ordinary suit qua them also. Both the aforementioned I.As. stand disposed of accordingly.

Written statement be filed by defendant No. 3 within four weeks. Prima facie, in view of the provisions of section 79 CPC suit against General Manager, Northern Railways, Baroda House, New Delhi, defendant No.3, seems to be not legally tenable.

Summons be issued afresh to defendants 1 & 2 returnable on 2nd September 2000. Process fee and registered AD covers be filed within a week.