Allowed

Shri. Kailashchandra Kasturilal Sodhi v. M/S. Varuna Agencies

Karnataka HC17 Nov 2023RFA/328/2021

Case brief

AI extract

What is this about?

High Court allowed appeal in a money recovery suit. It held that Res Judicata issues mixed with law and fact could not be treated as a preliminary issue. The trial court's dismissal was remitted for fresh adjudication on all merits within six months.

What did the court decide?

Impugned judgment and decree set aside; matter remitted to trial court for fresh adjudication on all issues including Res Judicata; parties to appear on 11.12.2023 without further notice; court fees r

Shri. Kailashchandra Kasturilal Sodhi Vs… — Contract and Commercial Disputes | Karnataka HC (2023)

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NC: 2023:KHC:41322 RFA No. 328 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17^TH DAY OF NOVEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR REGULAR FIRST APPEAL NO. 328 OF 2021 (MON)

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BETWEEN:

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SHRI. KAILASHCHANDRA KASTURILAL SODHI S/O LATE KASTURILAL SODHI, AGEDA BOUT 78 YEARS,

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SMT RAJANI K SODHI SINCE DEAD REPRESENTED BY SHRI KAILASCHANDRA KASTURILAL SODHI, W/O SRI KAILASHCHANDRA K SODHI, AGED ABOUT 74 YEARS.

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RESIDING AT NO.6A, CAUVERY APARTMENTS, RESIDENCY ROAD, CONVENT ROAD, BANGALORE-560 025.

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Digitally signed by VANDANA S Location: HIGH COURT OF KARNATAKA

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…APPELLANTS (BY SRI.ANIL BAJAJ .,ADVOCATE) AND: 1. M/S. VARUNA AGENCIES A PARTHERSHIP FIRM HAVING ITS OFFICE AT OM SHIVAM COOPERATIVE HOUSING SOCIETY LIMITED, PLOT NO.2, OPP. CIGARETE FACTORY, CHAKALA, SHARA ROAD, ANDHERI (EAST) MUMBAI 400 099. ALSO AT NO.217, 2^ND FLOOR, BIRYA HOUSE, 365, PERIN NARIMAN STREET, FLORT MUMBAI 40001, REP BY ITS MANAGING PARTNER.

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MRS MEERA W/O LATE SURESH KOTIAN, AGED ABOUT 64 YEARS, M/S VARUNA AGENCIES,

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MS SAVERA D/O LATE SURSH KOITIAN, AGEDA BOUT 35 YEARS, PARTNER,

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MS SHAMIKA D/O LATE SURSH KOTIAN, AGEDA BOUT 33 YEARS, PARTNER M/S VARUNA AGENCIES,

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DEFENDANTS NO. 2-4 ARE R/A NO.701, 3^RD FLOOR, AMARTANI SEVEN-B, NEAR OLD NAGARDAS ROAD, OPP. PINKS CINEMA, ANDHERI EST, MUMBAI 400 069.

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…RESPONDENTS

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(BY SRI.M. RAJASHEKAR, ADVOCATE FOR R-2 TO R-4)

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THIS RFA IS FILED UNDER SEC.96 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED: 26.06.2020 PASSED IN OS.NO.7337/2012 ON THE FILE OF THE XXX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU, DISMISSING THE SUIT FOR RECOVERY OF MONEY.

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THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal filed by the unsuccessful plaintiffs under O.S.No.7337/2012 dated 26.06.2020, is directed against the impugned judgment and decree passed by the XXX Addl. City Civil and Sessions Judge, Bengaluru City, whereby issue No.3 framed by the Trial Court as in the suit was treated as a preliminary issue and answered against the appellant – plaintiff and in favour of the respondents 2 to 4 – defendants 2 to 4

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NC: 2023:KHC:41322 RFA No. 328 of 2021

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thereby culminating in the impugned judgment and decree passed by the Trial Court which dismissed the suit, filed by the appellant – plaintiff.

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Heard learned counsel for the appellants – plaintiffs and learned counsel for the respondents – defendants and perused the material on record.

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The material on record discloses that the appellants – plaintiffs instituted the aforesaid suit against the respondents – defendants for recovery of sum of Rs.10,16,350/- together with interest @ 18% per annum and for other reliefs. In the said suit, the respondents 2 to 4 – defendants 2 to 4 entered appearance and filed their written statement interalia disputing the various claims and contentions urged on behalf of the plaintiffs.

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It was also contended that the suit was barred by principles of Res Judicata and Order 2 Rule 2 CPC. Based on the pleadings, the Trial Court framed the following issues:

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“1. Whether the plaintiffs prove that the 1^st Defendant Firm represented by one late Suresh Kotian as its Managing partner had borrowed a sum of Rs.6,80,000/- from them through four cheques dated 12.10.2009 and 16.11.2009 for development and expansion of its business?

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NC: 2023:KHC:41322 RFA No. 328 of 2021

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2. Whether the plaintiffs further prove that the defendants No.2 to 4 being the partners of 1^st Defendant Firm are liable to repay the said loan borrowed by the 1^st Defendant Firm along with interest at the rate of 18% per annum?

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3. Whether the defendants prove that the suit is hit by principles of Res-Judicata and also u / O 2 R 2 of CPC.,?

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4. Whether the suit is barred by limitation?

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5. Whether the plaintiffs are entitled for recovery of a sum of Rs.10,16,350/- as prayed with interest at the rate of 18% per annum?

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6. What Order or decree?”

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As can be seen issues framed by the Trial Court, issue

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No.3 related to maintainability of the suit on the ground Res Judicata and Order 2 Rule 2 CPC. Subsequently, when the matter was posted for trial, the respondents 2 to 4 – defendants 2 to 4 filed an application I.A.No.5 under Order 14 Rule 2(2) of CPC to treat issue No.3 as a preliminary issue. The said issue No.3 was ordered to be treated as a preliminary issue by the Trial Court vide Order dated 09.11.2018, pursuant to which the Trial Court recorded oral and documentary evidence of both sides on the said preliminary issue No.3.

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Thereafter, the Trial Court heard both sides and proceed to pass the impugned order answering issue No.3 in favour of the respondents 2 to 4 and against appellants – plaintiffs and consequently dismissed the suit as not maintainable.

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Aggrieved by the impugned judgment and decree passed by the Trial Court under the impugned order dated 09.11.2018, treating issue No.3 as a preliminary issue and the impugned order passed by the Trial Court answering issue No.3 against the appellants, the appellants – plaintiffs are before this court by way of the present appeal.

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A perusal of the material on record including the impugned judgment and decree will indicate that there are several disputed / complicated / complex questions / issues of law and fact that arise for consideration between the parties as born out from the pleadings of the parties on all aspects of the matter including the plea of res-judicata which is a mixed question of law and fact.

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Under these circumstances, the only question that arises for consideration is as to whether the Trial Court was justified in treating issue No.3 as a preliminary issue and answering the same

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in favour of the respondents 2 to 4 – defendants 2 to 4 and there by dismissing the suit as not maintainable.

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In this context, it is relevant to state that it is trite law that issue regarding Res Judicata involving disputed questions and law and fact cannot be treated as a preliminary issue as held by the Apex Court in SATHYANATH AND ANOTHER V/S. SAROJAMANI

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– (2022) 7 SCC 644.

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In the instant case, while it is the specific assertion of the appellants – plaintiffs that the respondents 2 to 4 are the wife and children of one Suresh Kotian who was a Managing Partner of defendant No.1 – M/s. M/s. Varuna Agencies, which had borrowed sums of money from the appellants – plaintiffs, the said contention as regards Suresh Kotian being the Managing Partner / Partner of M/s. Varuna Agencies and the allegations that the said firm and Suresh Kotian had borrowed sums of money from the appellant is seriously disputed by the respondents 2 to 4 – defendants 2 to 4.

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It is therefore clear that there exists a serious dispute of fact as regards the right of the appellants – plaintiffs to put forth the suit claim is against the respondents 2 to 4 – defendants 2 to 4 and the alleged liability of the respondents 2 to 4 to answer the claim of

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the appellants – plaintiffs and consequently the said dispute which stands covered by preliminary issue No.3 in the light of the judgment and decree passed in O.S.No.4111/2010 dated 25.08.2012 and confirmed by this court in RFA No.1742/2012 gives rise to mixed / disputed question of law and fact would necessarily involve a full fledged trial and the Trial Court would have to render

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findings on all issues including the issue No.3 regarding Res Judicata and the bar of the suit under Order 2 Rule 2 of CPC as held in the aforesaid judgment of the Apex Court.

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Under these circumstances, I am of the considered opinion that the Trial Court fell in error in treating issue No.3 as a preliminary issue and answering the same in favour of the respondents 2 to 4 without considering other issues and consequently, the impugned judgment and decree passed by the Trial Court deserves to be set aside and the matter remitted back to the Trial Court for reconsideration afresh and for disposal in accordance with law by adjudicating upon all issues including issue No.3 in accordance with law.

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In the result, I pass the following:

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ORDER

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i) Appeal is hereby allowed.

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ii) Impugned judgment and decree dated 26.06.2020 passed in O.S.No.7337/2012 by the XXX Addl. City Civil and Sessions Judge, Bengaluru City is hereby set aside.

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iii) The matter is remitted back to the Trial Court for reconsideration afresh on all issues in accordance with law.

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iv) The Trial Court is directed to hear both sides and provide both parties an opportunity to adduce oral and documentary evidence in support of their respective claims and dispose of the suit on merits by recording findings, on all issues in accordance with law, within a period of six months from the date of receipt of a copy of this order.

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v) All rival contentions on all aspects of the matter are kept open and no opinion is expressed on the same.

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vi) Parties undertake to appear before the Trial Court on 11.12.2023 without awaiting further notice from the Trial Court.

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vii) Registry is directed to refund the entire court fee of Rs.62,945/- paid on the memorandum of appeal back to the

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appellant forthwith in view of Section 64 of the Karnataka Court Fees and Suit Valuation Act.

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