Andhra HC (Pre-Telangana)
Patta Appalanarasamma vs Principal Subordinate Judge, ... on 23 November, 2000
Equivalent citations: 2001(1)ALD301, 2001(1)ALT358
JUDGMENT
1. This is a revision petition under Article 227 of the Constitution of India at the instance of the second defendant in OS No.253 of 1997 on the file of the Principal Subordinate Judge, Visakhapatnam (hereafter called 'the trial Court'). The petitioner is aggrieved by the orders passed by the trial Court in IANo.325 of 1997 in OS No.253 of 1997 dated 10-4-1997. By the said order, the trial Court directed the petitioner and the third respondent herein to furnish third party security to the money claimed in the suit by the second respondent within 15 days from the date of the order failing which the petitioner and the third respondent were restrained from contesting the suit and filing the written statements.
2. Briefly the facts leading to filing of this revision petition are as follows: the parties are called by their status in the suit in OS No.253 of 1997. The plaintiff (second respondent herein) filed a suit for recovery of money with interest and for permanent injunction restraining the defendants (petitioner and the third respondent herein) from lifting 200 tons of material from the mining site and for mandatory injunction directing the defendants to supply the material as per the agreement dated 15-4-1994. The agreement dated 15-4-1994 is executed between the plaintiff and the first defendant. As per the agreement, the plaintiff allegedly agreed to supply 3600 tons of dressed China Clay Lumps of export quality per annum commencing from 1st July, 1994 at the rate of Rs.460/- per ton at the mining she. After entering into the agreement, the plaintiff procured supply orders from Germany and New Zealand. On 6-10-1996, the plaintiff placed orders with the first defendant for supply of 200 tons of the above-said material and paid an amount of Rs.92,000/- in addition to the amount of Rs.2-00 lakhs allegedly paid by the plaintiff as advance. The material was kept ready at the mining site. However, the plaintiff could not lift the material as the defendants objected to the same. The plaintiff's efforts to settle the matter with the defendants amicably proved futile and after waiting for 4 months, he filed the suit. Along with the main suit, an Interlocutory Application under Order XXXIX, Rules 1 and 2 of the Civil Procedure Code 1908 (CPC) being IA No.325 of 1997 was filed praying the trial Court for an ad interim injunction restraining the defendants from interfering with the lifting of 200 tons of material from the mining site. The Court below, by an order dated 10-4-1997, ordered status quo by way of an ad interim ex parts measure.
3. The second defendant filed counter-affidavit inter alia denying any agreement between the plaintiff and the first defendant and also demurring the jurisdiction of the trial Court to entertain the suit. She denied receipt of Rs.2-00 lakhs as repayable advance as well as receipt of Rs.92,000/-when the plaintiff allegedly placed orders in October, 1996.
4. The trial Court, having considered the prima facie case and balance of convenience with reference to the documents produced before it and the allegations made in the pleadings, came to the conclusion that prima facie there is no specific case to grant the relief of temporary or mandatory injunction in favour of the plaintiff. Accordingly, the trial Court refused the relief observing as under:
"The relief asked for by the plaintiff in the main suit is a suit for recovery of money is sufficient and it can be compensated by way of damages to be awarded by the Court against the respondents, if necessary. Damages will be given in lieu of injunction, if necessary, when the plaintiff establishes its legal right and the actual or threatened violation from the respondents on it. There is no actual or threatened violation on the part of the respondents on the petitioner is proved. There is no such evidence even prima facie on behalf of the petitioner-plaintiff. Therefore, the petitioner is not entitled for the relief of injunction as it is a discretionary relief. As I have already observed that instead of granting injunction, the Court can award damages, if the plaintiff proves its case in the suit."
5. While thus dismissing 1A No.325 of 1997, the trial Court directed the defendants to furnish third party security on pain of forfeiting the right to defend the suit and filing written statements.
6. Shri V.S.R. Murthy, learned Counsel for the second defendant submits that the trial Court had no jurisdiction to entertain the suit, that the petitioner is not bound by the agreement entered into between the first defendant and the plaintiff and that in any event under Order XXXIX of CPC, no power inheres the trial Court to order third party security in lieu of denial of injunction. To substantiate his contentions, the learned Counsel for the petitioner relied on the judgments of this Court in Gopala Rao v. Kabhaiah, 1974 ALT 239 and M. Venkateswara Rao v. Sub-Judge, Kothagudem, Khammam, .
7. Sri D. V. Seetharama Muthy, learned Counsel for the plaintiff submits that the agreement was entered into in Visakhapatnam by the duly constituted power of attorney of the second defendant and, therefore, the same is binding on her. He further submits that as per the provisions of Section 16 of CPC, a suit would lie at a place where the agreement is entered into. Lastly he submits that the trial Court does not suffer from inherent lack of jurisdiction. The learned Counsel, however, is not able to justify the order of the trial Court insofar as the same forfeits the right of defence of the defendants in default of compliance with the condition of furnishing security.
8. Sri S. V.R. Subrahmaniyam, learned Counsel for the first defendant submits that the second defendant executed an irrevocable power of attorney in favour of the first defendant, that his client acted on behalf of the second defendant and, therefore, the contention that there is no privity of contract between her and the plaintiff is baseless.
9. The point that arises for consideration is whether the trial Court has jurisdiction to entertain the suit and pass interlocutory order which is challenged now.
10. There cannot be any doubt that if the matter is within the territorial and pecuniary jurisdiction of the trial Court, the Court shall have necessary power to pass interlocutory orders. In this case, the petitioner initially filed a writ petition seeking a writ of prohibition restraining the trial Court from proceeding with the suit filed by the plaintiff and later chose to convert the same into a petition under Article 227 of the Constitution of India. As one of the grounds in opposition of IA No.325 of 1997, the petitioner raised the question of jurisdiction besides raising other grounds. In a case like this, when a suit is laid for recovery of money for breach of contract and injunction, the petitioner ought to have filed an application under Order XIV, Rule 2 of CPC requesting the Court to decide the issue of jurisdiction as a preliminary issue. Though a ground is raised in the counter in IA No.325 of 1997, the petitioner did not choose to file an application under Order XIV, Rule 2 of CPC. Therefore, at this stage, I deem it appropriate not to decide the question of jurisdiction though it is raised by the petitioner herein. It is open to the petitioner to file appropriate application before the trial Court to decide the issue as a preliminary issue in which event the trial Court shall take up the application and decide the preliminary issue with reference to the provisions of the A.P. Scheduled District Act, 1874 and the A.P. Agency Rules.
11. The next question is whether the impugned order suffers from an error in exercise of jurisdiction. While exercising the discretionary jurisdiction under Order XXXIX of CPC, the endeavour of the Court should be to ensure status quo of the rights and liabilities of the contesting parties before the Court. Towards this, it is open to the Court either to direct the parties to maintain status quo or to specifically injunct either of the parties from doing any act. The disobedience of an order passed under Order XXXIX of CPC entails in contempt of Court. The Court in certain circumstances is also empowered to direct the party to deposit the suit money in the Court. Rule 10 of Order XXXIV of CPC reads as under:
"Deposit of money, etc., in Court :--Where the subject-matter of a suit is money or some other thing capable of delivery and any part thereto admits that he holds such money or other thing as a trustee for another party, or that it belongs or is due to another party, the Court may order the same to be deposited in Court or delivered to such last-named party, with or without security, subject to the further direction of the Court."
For the exercise of power under Rule 10 of Order XXXIX of CPC, the conditions required are that the suit should be one for money or suit for delivery of thing capable of delivery and that a party to the said suit should admit that he holds such money or other thing as a trustee for another party and that it belongs to another party. The Court then only can order to deposit the same in the Court or deliver to such last-named party with or without security. Except Rule 10, there is nothing in Order XXXIX, which empowers the Court to direct the defendants to furnish third party security. Whereas under the provisions of Order XXXVII and Order XXXVI11 of CPC, there are adequate powers vested in the trial Court to order the defendants or another party, as the case may be, to furnish third party security for the suit claim. The clear distinction as contained in Order XXXVII or Order XXXVIII of CPC on one hand and Order XXXIX of CPC on the other cannot be lost sight of while passing orders to furnish third party security.
12. In this case, the trial Court has categorically recorded a finding that there is no prima facie case in favour of the plaintiff and that being a suit for damages for breach of contract, in my considered opinion, the trial Court erred in exercising jurisdiction under Order XXXIX, Rules 1 and 2 of CPC. Therefore, the order of the trial Court insofar as it directs the defendants to furnish third party security on the pain of forfeiting the right of defence including filing of written statement certainly results in miscarriage of justice. In such an event, exercising power of supervision and superintendence under Article 227 of the Constitution of India, this Court cannot sit back and uphold any contentions as to the existence of alternative remedy under Order XLIII of CPC and reject such application under Article 227 of the Constitution of India.
13. Accordingly, the CRP is allowed giving liberty to the petitioner to raise appropriate objection by filing an application before the trial Court. There shall be no order as to costs.