Debt Recovery Appellate Tribunal - Madras
Karnataka Bank Ltd. vs Dasprakash Paradise And Ors. on 14 October, 2004
Equivalent citations: I(2005)BC126
ORDER
Pratibha Upasani, J. (Chairperson)
1. This miscellaneous appeal is filed by the appellant/Karnataka Bank Ltd./defendant No. 7 being aggrieved by the order dated October 22, 2003, passed by the learned presiding officer of the DRT, Bangalore, in I. A. No. 10 in O. A. No. 479 of 1995. By the impugned order the learned presiding officer rejected the application made by the appellant/Karnataka Bank/defendant No. 7 praying for transposing them as co-plaintiff No. 3 along with co-plaintiffs Nos. 1 and 2, Canara Bank and Syndicate Bank in the original application suit filed by them against defendants Nos. 1 to 6 for the purpose of enforcing their claim against the defendants. It was this application which came to be rejected by the learned presiding officer by a reasoned order dated October 22, 2003. Hence the appeal by Karnataka Bank Ltd.
2. I have heard Mr. P. R. Krishnan holding for Mr. C. T. Selvam, advocate for the appellant-Karnataka Bank Ltd. and Mr. Murtaza, advocate for respondents Nos. 1 to 6 and 10 to 14, Mr. Krishnamurthy, advocate for respondent No. 8, Canara Bank and Mr. P. Sreenivasulu, advocate for respondent No. 9, Syndicate Bank. I have also gone through the proceedings including the suit proceedings filed by the original two plaintiffs namely, Canara Bank and Syndicate Bank in the court of the Civil Judge at Mysore, being Suit O.S. No. 320 of 1993 against defendants Nos. 1 to 6 and others (which came to be transferred to DRT, Bangalore, subsequently upon the establishment of DRT). Written statement filed by defendant No. 7 as also the written statements filed by other defendants, compromise petition filed by the second applicant (Syndicate Bank) and defendants Nos. 1 to 6, so also the objections filed by the seventh defendant to the compromise petition and the impugned order and, in my view, the learned presiding officer has not committed any error in passing the impugned order.
3. The case of defendant No. 7/present appellant-Karnataka Bank Ltd. is 3 that original defendants Nos. 1 to 6 namely, M/s. Dasprakash Paradise and others were its debtors. This averment is strongly resisted by the borrower defendants. According to the appellant Karnataka Bank, on the mortgaged security for the enforcement of which the suit was filed originally by Canara Bank and Syndicate Bank, the Karnataka Bank has a first charge, that there is a pari passu agreement dated June 25, 1985, that came to be concluded between applicant No. 1-Canara Bank, applicant No. 2-Syndicate Bank and appellant/defendant No. 7, Karnataka Bank Ltd., and another financial institution/defendant No. 8 on the one hand and the debtors on the other. It appears that after the matter lingered in the court for many years, applicants Nos. 1 and 2 on the one hand and the debtors on the other hand arrived at some compromise and the compromise was filed by the parties in the DRT, Bangalore. Thus, there was end of the litigation in sight. But at this juncture, defendant No. 7 objected to the compromise. The said defendant No. 7 namely, Karnataka Bank Ltd., also made an application praying that the said bank be transposed as co-plaintiff in the original application along with the other two plaintiffs who had already filed their original application claiming the amount lent by them to the defendants.
4. Both the original plaintiff banks and the defendants opposed the said application made by defendant No. 7/Karnataka Bank Ltd.
5. The contention of the original plaintiffs namely, Canara Bank and Syndicate Bank was that originally when they filed the suit against the defendants, defendant No. 7, Karnataka Bank Ltd., who now wants to be transposed as co-plaintiff along with Canara Bank and Syndicate Bank, declined to join them. The advocates for the original plaintiffs vehemently argued that now that they have entered into a compromise and are getting some money towards their claim amount, defendant No. 7 cannot be allowed to be transposed as plaintiff along with them. It is their contention that since the claim of defendant No. 7 is not included in the said original application, the claim of defendant No. 7 cannot be adjudicated in the same plaint as it is and that the claim of defendant No. 7 is time-barred.
6. Mr. Murtaza, advocate appearing for respondents Nos. 1 to 6 also very vehemently opposed the prayer of defendant No. 7 to be transposed as co-plaintiff along with Canara Bank and Syndicate Bank. He has supported the impugned order.
7. The learned advocate Mr. P. R. Krishnan appearing for the appellant-Karnataka Bank Ltd., relied upon provisions of section 21(2) of the Limitation Act and has submitted that when the defendant has to be transposed as plaintiff, the bar of limitation does not come in the way, that sub-clause (2) of section 21 is an exception to the general provision contained in clause (1) of section 21 of the Limitation Act.
8. Section 21 of the Limitation Act can be reproduced below for the sake of convenience :
"21. Effect of substituting or adding new plaintiff or defendant.-
(1) Where after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party :
Provided that where the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith, it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.
(2) Nothing in sub-section (1) shall apply to a case where a party is added or substituted owing to assignment or devolution of any interest during the pendency of a suit or where a plaintiff is made a defendant or a defendant is made a plaintiff."
9. Advocate Mr. Murtaza appearing for respondents Nos. 1 to 6, so also advocate Mr. Krishnamurthy appearing for respondent No. 8, Canara Bank and advocate Mr. P. Sreenivasulu appearing for respondent No. 9, Syndicate Bank disputed this position and submitted that the claim of defendant No. 7 was indeed time-barred and that acknowledgement allegedly given by the defendants on which Karnataka Bank was relying for the purpose of saving limitation was not as per the provisions of section 18 of the Limitation Act. It is also submitted by them that defendant No. 7 himself abandoned his right against defendant No. 1 borrower by declining to join the applicants in the original application as co-applicant and also by not relying upon the admission made by defendant No. 7 in its written statement filed in the original application. Defendant No. 1 in its written statement had only made a statement of fact that apart from plaintiffs Nos. 1 and 2, Canara Bank and Syndicate Bank, Karnataka Bank Ltd., Mysore, and Karnataka State Industrial Investment and Development Corporation Ltd. (KSIIDC) also financed the hotel project of defendant No. 1. It is this averment which according to the advocates appearing for the Canara Bank and the Syndicate Bank, so also according to the advocate appearing for the original defendants, is not an acknowledgement within the meaning of section 18 of the Limitation Act.
10. The reason for not joining the original plaintiffs in the original application filed by them, as given by defendant No. 7 also is very curious. As per the written statement given by defendant No. 7, defendant No. 7 has stated in para. 12 as follows :
"The pari passu agreement dated June 25, 1985, signed by defendants Nos. 2 to 6 is an acknowledgement of liability and the period of limitation for a suit for sale of the mortgaged property being 12 years a suit on the joint mortgage will not be barred by limitation till June 25, 1997. Hence the filing of the suit could have been postponed to await the constitution of the Tribunal as per the Central Act passed for the purpose of claims of banks for recovery of dues exceeding Rs. 10 lakhs on payment of a nominal court fee only and heavy expenditure of court fee of several lakhs of rupees on the suit could be avoided. However, the plaintiffs thought otherwise and filed the suit and this defendant is consequently constrained to claim the amounts due to this defendant in this suit."
11. Thus, defendant No. 7, Karnataka Bank Ltd., shirked and declined to 1 join the plaintiffs originally when the suit was filed by them against the defendants. Defendant No. 7 wanted to save on court fees and now that consent terms have been filed by and between the parties, defendant No. 7 wants to be impleaded/transposed as co-plaintiff to make its claim and to get its share. Thus, now participating in the consent terms the mute question is whether this is possible and whether this is permissible. In my view, it is not for several reasons. If one looks at the original suit filed in the civil court, it will be clear that the claim made therein is only with respect to the claims of the two banks namely, Canara Bank and Syndicate Bank. Ad valorem court fee has been paid accordingly by these two plaintiffs with respect to their claim. Now, defendant No. 7 wants to be added as plaintiff No. 3 in that suit after a long gap of more than ten years. The plaint cannot remain the same if defendant No. 7's claim is also to be included therein. It will require marathon amendment. Since the suit was filed by the respondent-banks Nos. 8 and 9 on mortgage, the limitation period was of 12 years. Even as per the calculations of defendant No. 7, the limitation period was available to defendant No. 7 up to 1997. But defendant No. 7 did not choose to file any independent suit against the defendants nor at that point of time they approached the court and made the application for transposing them from defendant to plaintiff, as they have made now. The original two plaintiff banks and defendants have now arrived at a compromise. Their claim is being settled. As far as the claim of defendant No. 7 is concerned, it is very much disputed by the defendants. That has to be adjudicated upon.
12. Moreover, the conduct of defendant No. 7/appellant-bank herein, is absolutely blameworthy. When the original plaintiffs filed their suit to recover their monies, this third bank namely, Karnataka Bank Ltd. declined to join them giving reason of heavy court fees, which actually could have been shared by the three banks. But at that time, the seventh defendant kept its tent separate. They did not prosecute their claim. They kept quiet for more than ten years. Their claim became time-barred even as per their own calculations in the year 1997. Then, they suddenly woke up from their slumber and possibly tried to find out a way to come out of this situation. Therefore, this device of transposing themselves as co-plaintiff in the suit. No explanation about why they waited for such a long time is forthcoming. Their conduct in approaching the Tribunal at this stage is questionable.
13. Defendant No. 7/appellant-bank have relied upon sub-section (2) of section 21 of the Limitation Act. But it is to be remembered that sub-section (2) applies to cases where the claim of a person transposed as plaintiff can be sustained on the plaint as originally filed or where a person remaining as plaintiff after transposition can sustain his claim against the transposed defendant on the basis of the plaint as originally filed. This is what the hon'ble Supreme Court has said in the case of Mukesh Kumar v. Col. Harbans Waraich [1999] 9 SCC 380. In the present case, at hand, such is not the position. The claim of the intending plaintiff who wants to be transposed as such cannot be sustained on the plaint as originally filed by the first two plaintiffs. Therefore, the appellant-bank cannot take shelter behind sub-section (2) of section 21 of the Limitation Act. For application of sub-section (2), it is necessary that the suit as filed originally should remain the same after the transposition of the plaintiff and there should be no addition to its subject matter. By impleading defendant No. 7 as plaintiff there will be an addition to the subject matter; the plaint will not remain in its original form and it may not be said that defendant No. 7's claim would be sustainable as per the plaint which had been originally filed. Therefore, this contention of the appellant-bank's advocate has to be rejected.
14. It appears that in the written statement filed by defendant No. 7 in the suit, some claim was made by them against the defendants. It needs to be further mentioned that as per the Karnataka Court Fees and Suits Valuation Act, 1958, no court fee is paid upon the same. In para. 16 of the said written statement, defendant No. 7 has prayed for a decree in favour of the plaintiffs (Canara Bank and Syndicate Bank) and defendant No. 7 and defendant No. 8 jointly for recovery of the amount due to them along with future interest etc. to be recovered from defendants Nos. 1 to 6 and by sale of hypothecated plant and machinery etc. The decree which is prayed for is a joint decree. It is also mentioned in the last para of the said written statement that the original two plaintiffs had already paid the court fee which was actually in excess and, therefore, defendant No. 7's claim also be decreed along with defendant No. 8 (KSIIDC Ltd.).
15. This is the conduct of defendant No. 7. When they were asked to be joined as co-plaintiffs by the first two plaintiffs namely, Canara Bank and Syndicate Bank, defendant No. 7 declined; in the written statement, prayer is made to decree defendant No. 7's claim. But no court fee is paid giving a reason that the two plaintiffs who are the original plaintiffs had paid court fee. Thus, without paying a single farthing towards the State revenue and though their claim is to be adjudicated because it is disputed by the defendants, defendant No. 7 wants to be a party to the consent terms because original plaintiffs Nos. 1 and 2 were able to settle their claims with the defendants. In this way, defendant No. 7 wants to take all the advantage without suffering any inconvenience or loss. This is the conduct of the appellant-bank and this is the vigilance and alertness in prosecuting their claim. After remaining dormant for more than ten years, suddenly they have woken up and somehow by hook or crook they want their share in the claim which has not been adjudicated. There is no compromise between defendant No. 7 and original defendants Nos. 1 to 6, who are the borrowers. But still defendant No. 7 wants to sneak into the domain of compromise entered into by original plaintiffs with original defendants Nos. 1 to 6.
16. In view of the aforesaid discussion, in my view, the learned presiding officer of DRT, Bangalore, has not committed any error. The learned presiding officer's order, therefore, will have to be upheld and the appeal will have to be dismissed. Accordingly, following order is passed.
17. Miscellaneous Appeal M. A. No. 208 of 2003 is dismissed.