Andhra HC (Pre-Telangana)
Shaik Muneeruddin vs Karnataka Power Corporation Ltd., Rep. ... on 26 July, 1994
Equivalent citations: 1994(3)ALT127, 1995 A I H C 898, (1994) 2 LS 70 (1994) 3 ANDH LT 127, (1994) 3 ANDH LT 127
ORDER S. Parvatha Rao, J.
1. This revision petition is preferred by the applicant in LA. No. 1269 of 1992 in O.S. No. 718 of 1991 on the file of the learned II Additional Judge, City Civil Court at Hyderabad questioning the order dated 7-7-1993 dismissing the said LA.
2. The 1st respondent herein is the plaintiff and the 2nd respondent is the defendant in the said O.S. No. 718 of 1991. The 1st respondent filed the suit seeking to recover a sum of Rs. 3,85,500/- with future interest at 18% per annum as the 2nd respondent bank failed to pay the sum of Rs. 3,00,000/- covered by bank guarantee No. 2 of 1988 given by it at the instance of the petitioner. The bank guarantee was issued on 5-2-1988 and originally it was valid till 23-3-1989. At the instance of the 1st respondent the validity of the bank guarantee was extended by the 2nd respondent bank from time to time and lastly till 31-12-1989. The amount claimed by the 1st respondent includes Rs. 85,500/- being interest claimed at 18% per annum on the guaranteed sum of Rs. 3,00,000/ - from 1-1-1990 to 31-7-1991. It is the case of the 1st respondent that the bank guarantee was invoked before its validity expired on 31-12-1989 and as the bank failed to honour the bank guarantee it is entitled to recover the guaranteed sum of Rs. 3,00,000/- together with interest from 1-1-1990 at 18% per annum. 3. The petitioner sought to implead himself as 2nd defendant in the said O.S. No. 718 of 1991. It is his case that he entered into a contract with the 1st respondent herein on 6-2-1988 for purchasing and lifting the coal mill reject from Raichur Thermal Power Station and that at his instance the 2nd respondent herein gave the bank guarantee for the sum of Rs. 3,00,000/-. His case in sum is that the 1st respondent invoked the bank guarantee improperly and contrary to its terms and that if any decree is issued in favour of the 1st respondent in the suit he would be the real affected party because the bank would appropriate his deposit lying with it and recover the entire decretal amount from him. He also states that he filed a suit O.S. No. 12 of 1990 on the file of the Vacation Judge at Raichur for restraining the 1st respondent from encashing the bank guarantee, that subsequently the said suit was transferred to the Court of Civil Judge and that the same is pending. Though the petitioner herein stated that injunction was granted restraining the 1st respondent from encashing the bank guarantee, the 1st respondent in its counter-affidavit in I.A. No. 1269 of 1992 has stated that on appeal the said injunction was vacated and that in spite of the 2nd respondent agreeing to pay the guaranteed sum on the vacation of the injunction, it has not yet paid any amount.
4. The 1st respondent has opposed the said LA. contending that if the petitioner is aggrieved he should initiate appropriate independent proceedings against the 1st respondent and that the transactions and inter se claims between the petitioner and the 1st respondent-Corporation are not relevant or necessary for the disposal of the suit laid by the 1st respondent for the recovery of the guaranteed amounts from the 2nd respondent.
5. The learned Additional Judge has dismissed the LA. on the basis that the issue involved in the suit is only whether the 2nd respondent bank is liable to pay the suit amount to the 1st respondent with interest; that for the disposal of the question involved in the suit the presence of the petitioner is not essential; that if the petitioner is impleaded the scope of the suit would be enlarged; that the presence of the petitioner before the Court in the suit is not necessary for effectual and complete adjudication of the question involved in the suit and that, therefore, the petitioner is neither necessary nor a proper party to the suit. He also observes that if really any loss is sustained by the 1st respondent recovering the amount claimed by it from the 2nd respondent, the petitioner can seek appropriate reliefs against the 1st respondent by instituting a separate suit.
6. The learned Counsel for the petitioner relies on the decision of a Division Bench of this Court in Khaja Abdul v. Mahabub Saheb, ., and the decision of the Supreme Court in Razia Begum v. Anxvar Begum, . In both these cases the scope of sub-rule (2) of Rule 10 of Order 1 of the Code of Civil Procedure was considered. The majority judgment in Razia Begum v. Anwar Begum, case was delivered by B.P. Sinha J., for himself and J.L. Kapur J. The learned Judge observed that "the question of addition of parties under Rule 10 of Order 1 of the Code of Civil Procedure, is generally not one of initial jurisdiction of the Court, but of a judicial discretion which has to be exercised in view of all the facts and circumstances of a particular case" and that "in a suit relating to property, in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest, in the subject matter of the litigation". After reivew of the case law, the learned Judge held that" there cannot be the least doubt that it is firmly established as a result of judicial decisions that in order that a person may be added as a party to a suit, he should have a direct interest in the subject matter of the litigation whether it raises questions relating to moveable or immoveable property". Observing that there have been two currents of judicial opinion, one taking what may be called the narrower view, and the other, the wider view, the learned Judge illustrated the wider view by referring to the decision of the Madras High Court in Vydianadayyan v. Sitaramayyan, (1882) LR 5 Madras 52., and commented as follows:
"In the case of ILR 5 Mad. 52 (3), in which the wider view of the interpretation of the relevant rule, was taken, Turner, C.J., delivering the judgment of the Court, observed that the wider interpretation which enabled the Court to avoid conflicting decisions on the same question and which would finally and effectually put an end to the litigation respecting it, should be adopted. But in that case also, the party added as defendant, was interested in the subject-matter of the litigation, though there was no impediment to the Court determining the issues between the parties originally before the Court. The learned Judge, on a discussion of the English and Indian cases on the subject, came to the conclusion that a material question common to all the parties to the suit and to third parties, should be tried once for all. He held that to secure this resul t, the Court had a discretion to add parties - a discretion which has to be judicially exercised, that is, that by adding the new parties, the Court should not inflict injustice upon the parties already on the record, in the sense that they would be prejudiced in the fair trial of the questions in controversy".
7. This wider view had been accepted by a Division Bench of this Court in Khaja Abdul v. Mahabub Saheb (1 supra). The Division Bench held that in Razia Begum v. Anwar Begum (2 supra) case "the Supreme Court held that O.I.R. 10(2) requires liberal construction". The Division Bench also referred to the following passage in the judgment of Chief Justice Sir Charles Turner in Vydianadayyan v. Sitammayyan (3 supra):
"To accept the more restricted interpretation involves the addition of words which we do not find in the section, namely, 'between the parties to the suit' and there can be few, if any, questions which cannot be determined between the parties to the suit one way or other, and of which the determination, if they be material, will, as between the parries to the suit, not be final. On the other hand, the interpretation warranted by the terms would enable the Court to avoid conflicting decisions on the same question which would do injustice to a party to the suit, and finally and effectually to put an end to the litigation respecting them. No better instance of wisdom of such a rule could be afforded than is presented by the suit before the Court".
8. The Division Bench also observed that the said judgment was followed by Venkata Subbarao, J., in Secretary of State v. Murugesa, AIR 1929 Madras 443., and preferred to follow this view instead of the narrower or contrary view expressed in Vaithilinga v. Sadasiva, AIR 1926 Madras 836.
9. In the light of this legal position, I am inclined to take the view mat the petitioner's application should be allowed and that he should be impleaded as the 2nd defendant in O.S. No. 718 of 1991. It is not in dispute that the bank guarantee in question was given by the 2nd respondent herein at the instance of the petitioner in respect of the contract entered into by the petitioner with the 1st respondent. Therefore, the petitioner is having direct interest in the subject-matter of the present suit and he would be affected by the result of the suit.
10. The learned Counsel for the 1st respondent sought to rely upon a decision of the Supreme Court in Life Insurance Corporation v. Gangadhar Vishwanath Ranade, AIR 1990 SC 185. That was a matter arising out of a writ petition and the Supreme Court dealt with the contention advanced on behalf of the respondent in the writ petition (appellant before the Supreme Court) that Income Tax Officer was a necessary party in the writ petition and that in his absence no effective adjudication could be made. That argument was rejected by the Supreme Court. No question relating to any application under Rule 10(2) of Order 1 of the Code of Civil Procedure or interpretation of the said provision was involved in that case. That decision, therefore, has no relevance to the present question.
11. The order of the learned II Additional Judge, City Civil Court, Hyderabad in LA. No. 1269 of 1992 in O.S. No. 718 of 1991 dated 7-7-1993 is, therefore, set aside and the learned II Additional Judge is directed to implead the petitioner herein as the 2nd defendant in O.S. No. 718 of 1991 on his file.
12. The civil revision petition is accordingly allowed. No costs.