Karnataka High Court
The National Small Industries ... vs M/S. Mysore Lamp Works Limited on 10 December, 2025
Author: V Srishananda
Bench: V Srishananda
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NC: 2025:KHC:52278
CRP No. 125 of 2014
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF DECEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE V SRISHANANDA
CIVIL REVISION PETITION NO. 125 OF 2014 (RES)
BETWEEN:
1. THE NATIONAL SMALL INDUSTRIES
CORPORATION LTD.,
THE COMPANY REGISTERED UNDER
THE COMPANIES ACT 1956
WHOLLY OWNED BY THE GOVERNMENT OF INDIA
HAVING ITS REGD. OFFICE AT
NSIC BHAVAN, OKHLA INDUSTRIAL ESTATE
NEW DELHI-110 020
ITS BRANCH AT NO.C-424
PEENYA 1ST STAGE BEHIND PEENYA
POLICE STATION, BANGALORE-58
REP. BY ITS SENIOR BRANCH MANAGER
SRI.M.L.PRAKASH
...PETITIONER
(BY SRI. S KRISHNASWAMY., ADVOCATE)
Digitally signed by
HEMALATHA A AND:
Location: HIGH
COURTOF
KARNATAKA 1. M/S MYSORE LAMP WORKS LIMITED
OLD TUMKUR ROAD
MALLESHWARAM WEST
BANGALORE-560055.
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NC: 2025:KHC:52278
CRP No. 125 of 2014
HC-KAR
2 M/S SUPERSTARS
114, SRI VITHALDAS CHAMBERS
16, BOMBAY SAMACHAR MARG
FORT, MUMBAI-400 023
A PARTNERSHIP FIRM REP. BY ITS
PARTNER SRI.RAM BHATIA.
3. SRI RAM BHATIA
HINDU, MAJOR
114, SIR VITHALDAS CHAMBER
16, BOMBAY SAMACHAR MARG
FORT, MUMBAI-400 023
...RESPONDENTS
(BY SRI. KRISHNAMURTHY, SENIOR COUNSEL FOR
SMT. APARNA N, ADVOCATE FOR R2 & R3:
R1 IS SERVED)
THIS CRP IS FILED UNDER SECTION 116(1)(A) OF CPC
PRAYING TO SET ASIDE THE ORDER DATED: 18.02.2010
PASSED IN OS. NO. 8444/2001 ON THE FILE OF IX
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AT
BANGALORE (CCH-5) DISMISSING THE SUIT OF
PETITIONER/PLAINTIFF AS AGAINST RESPONDENTS NO.2 AND
3 AND REMIT THE MATTER TO THE TRIAL COURT FOR
RECONSIDERATION IN ACCORDANCE WITH LAW IN THE
INTEREST OF EQUITY AND JUSTICE.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE V SRISHANANDA
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CRP No. 125 of 2014
HC-KAR
ORAL ORDER
Heard S.Krishnaswamy, learned counsel for the petitioner and Sri G.Krishnamurthy, learned Senior Counsel for the respondent Nos. 2 and 3.
2. Plaintiff in OS No.8444/2001 is the revision petitioner, challenging the order on memo dated 04.02.2010.
3. The facts in the nutshell are as under:
Plaintiff filed the suit for recovery of money from the defendants. Plaintiff being the company registered under the Companies Act, wholly owned by the Government of India, had extended the facility of bill discounting to the first defendant for the supply of goods to be made by the second defendant in favour of the first defendant. As and when such materials are supplied by the second defendant, the bill discounting facility could be adjusted and bill discounting facility was for a fixed sum.
4. First defendant had agreed for the said facility and on account of non-payment of the amount by the first -4- NC: 2025:KHC:52278 CRP No. 125 of 2014 HC-KAR defendant in respect of the bill discounting facility, suit came to be filed.
5. During the pendency of the suit, a memo came to be filed on 04.02.2010. Contents of the memo is extracted, which reads as under:
"1) It is submitted that the Plaintiff-NSIC filed 14 civil suits against M/s Mysore Lamp Works Ltd and others for Rs. 1,60,88,558/ together with further interest @ 19.5% p.a (including additional interest@ 3% p.a) and service charges at 0.08% for every block of one week from the date of suit till realization with cost of the suit.
2) The following are the 14 suits - 1) O.S.7838/2001, 2) O.S.7869/2001, 3) O.S. 7870/2001, 4) O.S.7915/2001, 5) O.S.7924/2001,
6) O.S.8254/2001, 7) O.S.8257/2001, 8) O.S. 8279/2001, 9) O.S.8280/2001, 10) O.S.8325/2001,
11) O.S.8326/2001, 12) O.S. 8433/2001, 13) O.S. 8468/2001, 14) O.S 8444/2001.
3) That in the proposal submitted by the defendant-
M/s Mysore Lamp Works Ltd, the proposal which was considered by the Plaintiff-NSIC under the specific terms and conditions stipulated as under: -5-
NC: 2025:KHC:52278 CRP No. 125 of 2014 HC-KAR
a) The Mysore Lamp Works Ltd shall pay Rs.1,07,00,000/- (Rupees One Crore Seven Lacs Only) towards full and final settlement of the liability of Mysore Lamp Works Ltd only and the other defendants shall be liable to pay the balance amount together with interest till realization.
4) In terms of the settlement, M/s Mysore Lamp Works Ltd has paid Rs. 1,07,00,000/- (Rupees One Crore Seven Lacs Only) towards full and final settlement against them with liberty to the Plaintiff-
NSIC to continue its suits against the remaining defendants for the balance outstanding and further interest accrued thereon till realization along with cost.
5) Since M/s Mysore Lamp Works Ltd has paid the settled dues in terms of settlement, they approached the Plaintiff to withdraw the suit against the defendant no-1, ie Mysore Lamp Works Ltd only and continue the suits against remaining defendants.
6) The proportionate amount received in this case is Rs. 18,55,109/-(Rupees Eighteen lakhs fifty-five thousand one hundred and nine only) and therefore the Plaintiff prays leave of this Hon'ble Court to continue the suit against the other defendants to recover the balance with cost of the suit. -6-
NC: 2025:KHC:52278 CRP No. 125 of 2014 HC-KAR It is therefore prayed that the Hon'ble Court be pleased to dismiss the suit against defendant No-1 and permit the plaintiff to continue the suit against defendant No-2 in the interest of equity and justice."
6. A letter dated 13.07.1999, signed by the partner of M/s. Superstars, who is the third defendant, is placed on record. Contents of the said letter is extracted below for ready reference.
"Dear Sir.
We understand that the National Small Industries Corporation Ltd. (NSIC) has sanctioned a limit to M/s. The Mysore Lamp Works Ltd. under Bill Financing Scheme for covering purchase of supplies required for their use and the limit is to be availed of for making such purchases exclusively from small scale manufacturers. In this context, we have since sold Electrical fittings manufactured by us at a total cost of Rs.5,05,735/- (cost+ applicable taxes) to The Mysore Lamp Works Ltd. as have drawn a bill
(s) on M/s. The Mysore Lamp Works Ltd. as detailed below, which has been duly accepted by them. We have drawn/endorsed the above bill (s) in favour of NSIC. We hereby authorise M/s. The Mysore Lamp Works Ltd. to lodge the above bill (s) with you for -7- NC: 2025:KHC:52278 CRP No. 125 of 2014 HC-KAR discounting on our behalf. You may kindly discount the said bill (s) at the applicable rate of discount and credit the net proceeds thereof by demand draft payable to us at 114, Sir Vithaldas Chambers, 16, Bombay Samachar Marg, Mumbai - 400 023 after deducting your charges for remittance and postage.
2. As required under the Scheme, we hereby certify that the above said bill (s) endorsed by us in your favour for the purpose of discounting have arisen out of bonafide commercial transaction relating to sales of indigenous Electrical fittings manufactured by us and sold on Credit. We also certify that we are an industrial concern in the small scale sector. We further certify that the Supplies covered by the bill (s) have been despatched by us to the Purchaser on 31.05.99. Relative invoice (s) indicating the date(s) of delivery of the relative Bills & Delivery challans and also a certificate in the prescribed format as required under the Scheme are enclosed.
3. We further certify that the Supplies covered by the undernoted bill (s) have not been financed under any other schemes of financial institutions/ banks.
4. We confirm that NSIC will be under no obligation to present the bills for payment on due -8- NC: 2025:KHC:52278 CRP No. 125 of 2014 HC-KAR dates and notwithstanding the non-presentation in case the payment is not made by M/s. The Mysore Lamp Works Ltd. on due dates, we will remain liable on the said bills as principal debtors.
5. We also agree that we shall have no objection to NSIC advising our bankers of sanction of the above mentioned Bills financing facility.
Yours faithfully For SUPERSTARS Partner"
7. Having heard the arguments of both sides, this Court perused the material on record meticulously.
8. On such perusal of the material on record, it is seen that, learned trial Judge has dismissed the memo by impugned order.
9. Operative portion of the trial court order reads as under:
"The memo is dismissed. Consequently taking note of settlement arrived at by the plaintiff and the 1st defendant and the suit as against 2nd and 3rd defendant is also dismissed."-9-
NC: 2025:KHC:52278 CRP No. 125 of 2014 HC-KAR
10. In the usual course, if the memo filed by the plaintiff is dismissed, seeking dismissal of the suit against the defendant No. 1 alone, by sheer logic, the suit should have been continued against all the defendants. Irrespective of the validity of the settlement, the trial Court ought to have proceeded to record findings on the issues which are already been framed in the suit.
11. Further, when once the issues are framed, Order XX Rule 5 contemplates a mandatory duty on the trial Court to record findings on all issues.
12. It is one thing that if the trial Court has accepted the memo and then dismissed the suit. But, having dismissed the memo, the only course that was left open for the trial Court was to proceed with the suit in accordance with law. Having not done so, impugned order has resulted in miscarriage of justice and needs to be set aside.
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NC: 2025:KHC:52278 CRP No. 125 of 2014 HC-KAR
13. Having said so, since there is no order on merits of the matter with regard to the contentions raised by defendant Nos. 2 and 3 on the question of memo, and also having regard to the letter said to have been written by defendant No. 2, signed by the partner, who is the third defendant, veracity of the same is disputed by defendant Nos.2 and 3, the trial Court is bound to consider the memo on merits, in accordance with law.
14. Therefore, following order:
ORDER
(i) Revision petition allowed.
(ii) Impugned order dated 18.02.2010 passed in O.S.No.8444/2001 is set aside.
(iii) Matter is remitted to the trial Court for fresh disposal, in accordance with law, on the memo.
(iv) It is made clear that this Court has not expressed any opinion on the merits of the matter and parties are at
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NC: 2025:KHC:52278 CRP No. 125 of 2014 HC-KAR liberty to canvass their respective contentions, in accordance with law, afresh.
(v) Parties shall appear before the trial Court on 06.01.2026, without further notice.
Sd/-
(V SRISHANANDA) JUDGE CM List No.: 1 Sl No.: 0