Dismissed

M/S. Projects & Equipments Corporation Ltd. v. Debts Recovery Tribunal, Ernakulam

Kerala HC18 Jul 2019OP (DRT)/4/2018

Case brief

AI extract

What is this about?

The High Court of Kerala issued an original execution petition to set aside an order of the Debt Recovery Appellate Tribunal allowing impleadment as a defendant in DRT where the bank creditor sought no relief against the company.

What did the court decide?

Impugned Order P10 of DRAT allowing impleadment set aside; liberty granted to 3rd respondent to call petitioner as witness.

M/S. Projects & Equipments Corporation Ltd. Vs Debts… — Execution and Attachment | Kerala HC (2019)

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-CR-

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN

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THURSDAY, THE 18TH DAY OF JULY 2019 / 27TH ASHADHA, 1941

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OP (DRT).No.4 of 2018

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AGAINST THE ORDER/JUDGMENT IN OA 67/2005 of DEBT RECOVERY TRIBUNAL, ERNAKULAM

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PETITIONER:

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M/S. PROJECTS & EQUIPMENTS CORPORATION LTD. (A GOVERNMENT OF INDIA ENTERPRISES), HANSALAYA, 15, BARAKHAMBA ROAD, NEW DELHI-110001, REPRESENTED BY ITS BRANCH MANAGER, CHENNAI SRI.GOWRI SANKAR.

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BY ADVS. SRI.V.B.UNNIRAJ SMT.K.SEEMA SMT.P.ANITHA SMT.R.S.GEETHA

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RESPONDENTS:

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1 DEBTS RECOVERY TRIBUNAL, ERNAKULAM HOUSING BOARD BUILDINGS, PANAMPILLY NAGAR, ERNAKULAM, KOCHI-682016, REPRESENTED BY ITS REGISTRAR.

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2 STATE BANK OF INDIA (FORMERLY STATE BANK OF TRAVANCORE) VAZHUTHACAUD BRANCH, THIRUVANANTHAPURAM-695014, REPRESENTED BY ITS CHIEF MANAGER.

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3 KERALA STATE CONSTRUCTION CORPORATION LTD. REGISTERED OFFICE AT 14/1374, THYCAUD, THIRUVANANTHAPURAM-695014.

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4 STATE OF KERALA GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, REPRESENTED BY ITS CHIEF SECRETARY, PIN-695001.

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BY ADVS.

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SRI.M.V.THAMBAN SC. KSCC LTD.

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OTHER PRESENT:

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SRI.SUNILNATH-GP, SRI.R.S.KALKURA-SC

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THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 18.07.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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OP (DRT).No.4 of 2018

-CR-

J U D G M E N T

Though not directly, the principles of Dominus Litis and its adjunct aspects are drawn for examination in this case.

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As is now well known, Dominus Litis is the person to whom a litigation belongs. Blacks Law Dictionary defines this latin phrase as the “Master of a Suit” - the person who is really and directly in control and responsibility of the lis.

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This principle has been called for evaluation in this case because, interestingly, the 3^rd respondent herein, who is the defendant in an Original Application before the Debts Recovery Tribunal, filed by the 2^nd respondent - Bank, seeks that the petitioner be impleaded as an additional defendant therein; and that the Tribunal issue the Award only against them, even though the Bank seeks no such relief and in fact, does not support the impleadment.

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First, an apercus of the facts presented:

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The petitioner, which is stated to be a Public Limited Company, impugns Ext.P10 order issued by the Debts Recovery Appellate Tribunal, Chennai (DRAT for short), as per which, they have been ordered to be impleaded as a defendant in an Original Application preferred by the State Bank of Travancore (presently the 'State Bank of India') before the Debts Recovery Tribunal, Ernakulam (hereinafter

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OP (DRT).No.4 of 2018

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DRT for brevity), against the 3^rd respondent - Kerala State Construction Corporation Ltd. (KSCC for short), seeking recovery of certain amounts allegedly due from them under a Bank Guarantee.

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According to the petitioner, they had earlier entered into a contract with KSCC, under which certain works were to be completed by them in the country of Libya; but that on account of violation of the conditions under it, they were constrained to invoke a Bank Guarantee, issued by the Bank in favour of the KSCC to secure the terms of the said contract, which had been honoured by the Bank. According to them, the Bank, thereafter, filed Original Application No.67 of 2005 before the Debts Recovery Tribunal, Ernakulam against the KSCC to recover the amounts paid by them under the Bank Guarantee, wherein, KSCC attempted to implead them as a necessary party, which was initially allowed, but subsequently vacated. They say that this was challenged by the KSCC before the DRAT by filing M.A.No.6 of 2014 and that their impleadment has been now ordered by the said Tribunal through Ext.P10 order. The petitioner says that Ext.P10 has been issued without proper application of mind and without considering any of the relevant facts and therefore, that the said order be set aside.

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I have heard Smt.Anitha P, appearing on behalf of the petitioner; Sri.R.Reji, appearing on behalf of the 3^rd respondent;

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OP (DRT).No.4 of 2018

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Sri.R.S.Kalkura, learned standing counsel appearing for respondent No.2 - Bank and learned Government Pleader, Sri.Sunil Nath, appearing for the 4^th respondent.

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When I examine Ext.P10, which is impugned in this writ petition, it becomes ineluctable that the DRAT has allowed the application, merely holding that impleadment of the petitioner in the O.A will “ultimately help in effective adjudication of the matter and it may absolve the Appellant also from his financial liability”(sic). No other reasons are discernible from the order allowing the impleadment and I am afraid that it cannot obtain support in law, particularly when the Bank does not have any claim against the petitioner nor do they seek any Award or order against them.

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Pertinently, the Original Application has been filed solely against the KSCC and the Bank has only sought an Award against them and not against the petitioner. Therefore, even if the petitioner is impleaded on the party array, I fail to comprehend what benefit it would obtain to the KSCC because, a Recovery Certificate can be issued only against the person/entity against whom a relief has been sought for by the Bank . The KSCC's attempt to implead the petitioner appears to be to create a defence that they are not responsible for the debt and that it is the petitioner who should pay the same. This plea certainly can be taken by them in the Original

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OP (DRT).No.4 of 2018

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Application and prove it, by calling the petitioner as a witness, if it is so permissible, or through such other legally sanctioned methods; rather than seeking to bring them on the party array as an additional defendant, against whom, in any case, the Bank seeks no relief, thus disabling the DRT from issuing any orders/Award against them in the Original Application.

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I therefore, completely fail to understand how the Debts Recovery Tribunal could have allowed the application for impleading the petitioner, through an order like Ext.P10, merely stating that the impleadment of the petitioner will ultimately help in the adjudication of the matter.

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Further, even though the provisions of the Code of Civil Procedure may not be fully applicable to the proceedings before the DRT or the DRAT, I will be justified in considering whether the provisions of Order I, Rule 10 of CPC, would permit the course adopted by the DRAT. The impugned order shows that the DRAT has not adverted to this and this is vital because had it done so, the impleadment may not have been allowed by it because, as it is clear from the manner of this provision, a Court has to first decide whether the liability, based on which the plaintiff seeks a decree, is to be answered by someone else other than the defendant; but where it is expressly conceded that the Bank does not have any such case and

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OP (DRT).No.4 of 2018

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that they do not want to claim any amount against anyone else, they cannot be forced to fight against a party, who they do not want to array as a defendant, unless there is a compulsion in law.

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I do not need to say anything further about this because, these principles have been lucidly, but firmly, established by the Hon'ble Supreme Court of India in Kasturi v. Iyyamperumal and others [(2005) 6 SCC 733], though the observations in paragraphs 16 and 18, which is as below:

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That apart, from a plain reading of the expression used in sub-rule (2) Order 1 Rule 10 CPC “all the questions involved in the suit” it is abundantly clear that the legislature clearly meant that the controversies raised as between the parties to the litigation must be gone into only, that is to say, controversies with regard to the right which is set up and the relief claimed on one side and denied on the other and not the controversies which may arise between the plaintiff-appellant and the defendants inter se or questions between the parties to the suit and a third party. In our view, therefore, the court cannot allow adjudication of collateral matters so as to convert a suit for specific performance of contract for sale into a complicated suit for title between the plaintiff-appellant on one hand and Respondents 2 and 3 and Respondents 1 and 4 to 11 on the other.

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That apart, there is another principle which cannot also be forgotten. The appellant, who has filed the instant suit for specific performance of the contract for sale is dominus litis and cannot be forced to add parties against whom he does not want to fight unless it is a compulsion of the rule of law, as already discussed above. For the reasons aforesaid, we are, therefore, of the view that Respondents 1 and 4 to 11 are neither necessary parties nor proper parties and therefore, they are not entitled to be added as proper parties and therefore they are not entitled to be added as party-defendants in the pending suit for specific performance of the contract for sale.

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OP (DRT).No.4 of 2018

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In the afore circumstances, I have no other option but to set aside Ext.P10 order; however, leaving liberty to the 3^rd respondent to invoke and pursue their all defences and methods available to them, including by calling the petitioner - company as a witness in the Original Application, if it is so permissible; reiteratingly clarifying and that nothing contained in this judgment will be construed to trammel such rights in any manner whatsoever.

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This original petition is thus ordered.

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Sd/-

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DEVAN RAMACHANDRAN JUDGE

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OP (DRT).No.4 of 2018

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1-	TRUE COPY OF THE ADDRESSED BY THE STATE BANK OF TRA	LETTER DATED 30/06/1986 RESPONDENT NO.3 TO THE THEN VANCORE.
EXHIBIT P2-	TRUE COPY OF THE THE DELHI HIGH CO	ORDER DATED 14/09/1987 PASSED BY URT IN SUIT NO.1659 OF 1986.
EXHIBIT P3-	TRUE COPY OF THE BANK AGAINST THE THE DEBT RECOVERY	O.A.NO.67 OF 2005 FILED BY THE RESPONDENT NOS.3 AND 4 BEFORE TRIBUNAL ERNAKULAM.
EXHIBIT P4-	TRUE COPY OF I.A. RESPONDENT NO.3 B	NO.2037/2007 FILED BY THE EFORE THE TRIBUNAL.
EXHIBIT P5-	TRUE COPY OF THE NO.1 TRIBUNAL IN	ORDER PASSED BY THE RESPONDENT I.A.NO.2037/2007.
EXHIBIT P6-	TRUE COPY OF THE PETITIONER IN EXT	COUNTER AFFIDAVIT FILED BY THE .P5 APPLICATION.
EXHIBIT P7-	TRUE COP OF I.A.N PETITIONER BEFORE	O.2445 OF 2009 FILED BY THE THE RESPONDENT NO.1.
EXHIBIT P8-	TRUE COPY OF THE	ORDER IN I.A.NO.2445/2009.
EXHIBIT P9-	TRUE COPY OF THE M.A.NO.6/2014.	MEMORANDUM OF APPEAL IN
EXHIBIT P10-	TRUE COPY OF THE M.A.NO.6/2014 PAS APPELLATE TRIBUNA	ORDER DATED 08/05/2017 IN SED BY THE DEBT RECOVERY L.
EXHIBIT P11-	TRUE COPY OF THE DELHI HIGH COURT	ORDER PASSED BY THE HON'BLE IN RFA(OS)NO.45 OF 2003.
EXHIBIT P12-	TRUE COPY OF THE THE HON'BLE HIGH OF 2008.	ORDER DATED 20/09/2012 PASSED BY COURT OF DELHI IN FAO(OS)NO.351

M/S. Projects & Equipments Corporation Ltd. v. Debts Recovery Tribunal, Ernakulam

Case brief

What is this about?

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M/S. Projects & Equipments Corporation Ltd. v. Debts Recovery Tribunal, Ernakulam

Case brief

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