Allowed

Kerala Financial Corporation v. Mas Hotel

Kerala HC6 Feb 2020RFA/471/2004

Case brief

AI extract

What is this about?

Money suit was decreed the same day the defence was struck out under Order XI Rule 21 CPC for breach of a direction issued under Order XVI Rule 6 CPC. The appeal was allowed: the striking out was without jurisdiction, the plaintiff still had to prove its case, and the suit was remanded for fresh trial.

What did the court decide?

Appeal allowed; order in I.A No.2536/2001 striking out the defence and the judgment and decree set aside; suit remanded for fresh trial within four months; refund of the entire court fee paid on the m

Kerala Financial Corporation Vs Mas Hotel — Contract and Commercial Disputes | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MRS. JUSTICE MARY JOSEPH

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THURSDAY, THE 06TH DAY OF FEBRUARY 2020 / 17TH MAGHA, 1947

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RFA.No.471 OF 2004

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AGAINST THE JUDGMENT IN OS No.103/1998 DATED 25-06-2001 OF PRINCIPAL SUB COURT, ERNAKULAM.

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APPELLANTS/DEFENDANTS:

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1 KERALA FINANCIAL CORPORATION, REPRESENTED BY ITS DEPUTY MANAGER (LEGAL), VELLAYAMBALAM, THIRUVANANTHAPURAM.

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2 THE DISTRICT MANAGER KERALA FINANCIAL CORPORATION,KALOOR.

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BY ADVS. SRI.S.SREEKUMAR,SC,KERALA FINANCIAL COR SRI.M.M.SAYED MUHAMMED, SC, KFC SRI.M.R.VENUGOPAL, SC, KFC SRI.K.JAJU BABU,SC,KERALA FINANCIAL COR SRI.K.JAYAKUMAR (SR.) SMT.DHANYA P. ASHOKAN

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RESPONDENT/PLAINTIFF:

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M/S MAS HOTEL, NORTH RAILWAY STATION ROAD, ERNAKULAM, REPRESENTED BY ITS MANAGING PARTNER, SRI.K.M.IBRAHIMKUTTY MATHER.

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R1 BY ADV. SRI.PRAVEEN K. JOY R1 BY ADV. SRI.T.A.JOY R1 BY ADV. SRI.E.S.SANEEJ R1 BY ADV. SRI.M.P.UNNIKRISHNAN R1 BY ADV. SMT.M.K.SAMYUKTHA R1 BY ADV. SRI.N.ABHILASH R1 BY ADV. SMT.M.R.ESHRATH BAI R1 BY ADV. SMT.BEENA JOSEPH R1 BY ADV. SMT.SREELEKHA. P R1 BY ADV. SHRI.DEEPU RAJAGOPAL

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THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 2611-2019, THE COURT ON 06-02-2020 DELIVERED THE FOLLOWING:

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RFA.No.471 OF 2004 2

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C.R.

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MARY JOSEPH, J.

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- - - - R.F.A. No. 471 of 2004

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- - - - Dated this the 6^th day of February, 2020

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JUDGMENT

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The appellants are defendants in O.S No.103/1998 on the files of Principal Sub Court, Ernakulam (For short, 'the trial court'). The suit was filed before the trial court by the respondent seeking for realisation of a sum of Rs.5,89,353.78 with interest @ 18% per annum from the appellants.

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The suit was decreed by the trial court by judgment dated 25.6.2001 and a decree followed the judgment. Aggrieved by the aforesaid judgment and decree in the suit, the defendants are now before this Court in the appeal on hand.

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The contention of Sri.K. Jayakumar, the learned counsel for the appellants was that the decree and judgment passed by the trial court is illegal and infirm and therefore unsustainable. According to him, an Interlocutory Application was filed by the plaintiff before the trial court as I.A No.1495/2000 under Order XVI Rule 6 of the Code of Civil Procedure, 1908 (for short, 'C.P.C') seeking for a direction to the defendants in the suit to produce the registered

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mortgage deed dated 26.4.1971 of Ernakulam Sub Registry and the

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Statement of Accounts and Ledgers in relation to the suit transaction. The above I.A was allowed by the trial court on 31.5.2000 and direction was issued to the defendants to produce the documents summoned or to file an affidavit on 04.08.2000 stating that the documents sought for production are not available with them. Despite grant of opportunities, neither the documents summoned were produced nor the affidavit as directed by the trial court was filed.

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Thereupon, an Interlocutory Application as I.A No.2536/2001 was filed by the plaintiff, seeking to strike out the defence. The application was firstly entertained by the trial court on 02.06.2001 and posted for objection and hearing to 14.06.2001. On 14.06.2001, though objection was filed, the application was posted for hearing to 15.06.2001. On 15.06.2001, the application was heard and posted for orders to 18.06.2001. After several postings, ultimately on 25.06.2001, a detailed order was passed in the Interlocutory Application, allowing the same. On the very same day, the suit was also decreed.

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It is urged by the learned counsel that the plaintiff has moved I.A No.1495/2000 under Order XVI Rule 6 C.P.C and not

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under Rule 12 or 15 of Order XI C.P.C. According to him, only when an application was filed under Rule 2, 12 or 15 of Order XI C.P.C respectively for submission of interrogatories, discovery or inspection of documents and when orders were passed allowing the applications, for willful non-compliance of those alone, Order XI Rule 21 C.P.C shall be invoked by the court to strike out the defence. According to him, the application filed in the case on hand is under Order XVI Rule 6 C.P.C and the direction to produce the documents, even if not complied with, that does not confer power on the court to invoke jurisdiction under Order XI Rule 21 C.P.C. Therefore, the learned counsel has contended that the order passed by the court below in I.A No. 2536/2001, filed under Order XI Rule 21 C.P.C, striking out the defence is without jurisdiction. According to him, the judgment and decree passed by the trial court also suffers from illegality in the context and being unsustainable is liable to be reversed.

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The contention secondly advanced by the learned counsel was that even in a case where the defence was struck out legally, that would not hamper the right of the defendants to cross examine the plaintiff. In the case on hand, after striking out the defence vide

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order passed in I.A No.2536/2001 on 25.06.2001, the trial court allowed the suit without any opportunity being granted to the defendants to cross examine the plaintiff. According to the learned counsel, for that reason also, the judgment and the decree passed by the trial court is infirm.

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It is contended thirdly that evenif the defence was struck out, that would not absolve the plaintiff from proving his case by adducing reliable and cogent evidence. In the case on hand, by an order passed in I.A No.2536/2001 on 25.06.2001, striking out defence, the trial court has proceeded to pass the judgment and decree in the suit on the very same day, blindly accepting the pleadings and the claim for money as such, without letting the plaintiff to discharge his burden to adduce evidence on the basis of his pleadings raised in the plaint. According to him, by doing so, the trial court has exceeded its jurisdiction and that by itself will form a sufficient ground for this Court to reverse the judgment and decree under challenge.

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It is contended by the learned counsel lastly that written statement was filed by the defendants in the suit raising contentions sufficiently earlier and on the basis of those, issues had also been

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framed by the trial court. According to him, issues have been framed and documents have been produced by the plaintiff with a view to mark those in evidence. In the context, the trial court ought to have permitted the plaintiff to file proof affidavit and to let the documents produced by him marked in evidence. Opportunity must have also been given to the defendant to cross examine the plaintiff based on the proof affidavit filed by him and the documents marked in evidence.

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According to the learned counsel, the trial court did not grant any opportunity to the defendant to adduce evidence and mark the documents produced in evidence. The trial court did not even permit the defendants to cross examine the plaintiff. Even on a glance at the judgment under challenge, it is noticed that the trial court failed to advert to any of the contentions of the defendants and the documents produced by them, while passing judgment in favour of the plaintiff. In the above circumstances, the judgment and decree under challenge will not sustain and are liable to be interfered with.

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The learned counsel for the appellants/defendants has also relied on Satyadhyan Ghosal and others Vs. Deorajin Debi (Smt) and Another [AIR 1960 (SC ) 941], M/S Babbar Sewing

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Machine Co. Vs. Trilok Nath Mahajan [(1978 KHC 620)= (AIR 1978 SC 1436), Ismail Pillai Mohammed Haneefa Vs. Mohammedali Vaidyan Ibrahim Kunju Vaidyan [(2007 (3) KHC 228)=(2007 (3) KLT 503)] and Chinappan Vs. Ramachandran [(1989 KHC 2192)=(AIR 1989 Mad. 314)] to rest the above contentions.

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Per contra , Sri.P.Praveen, the learned counsel for the plaintiff contended that though I.A No.1495/2000 was filed under Order XVI Rule 6 read with Section 151 C.P.C, the trial court has passed an order in the application as if it was filed under Order XI Rule 12 C.P.C . According to him, in the event of passing of order by the trial court under Order XI Rule 12 C.P.C it must only be taken as a case where the real provision intended to be invoked has been misquoted by the party.

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The learned counsel has invited this Court's attention to the Forms appended to C.P.C. According to him, if an order was passed in I.A No.2536/2001 by taking it as one filed under Order XVI Rule 1 or 5 C.P.C, the summons ought to have been issued to the witness in Form No.13 of Appendix-B. According to the learned counsel, if the application was filed under Order XI C.P.C, the order must have been passed by the trial court for issuance of notice in Form No.1 of

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Appendix-C. According to him, the factum that summons was issued in Form No.1 of Appendix C itself indicates that the application was filed under Order XI C.P.C.

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Relying on Kulwant Singh Vs. Jagir Singh and Others [Civil Revision No.4648/2009 of High Court of Punjab and Haryana at Chandigarh], it is contended by the learned counsel that the factum that the petitioner has titled his application under a wrong provision is irrelevant when it incorporates in it all relevant particulars for a consideration under the real provision meant to be invoked. According to the learned counsel, though I.A No.1495/2000 was filed by the petitioner/plaintiff under Order XVI Rule 6 C.P.C, the trial court having chosen to consider it as one filed under Order XI Rule 12 C.P.C and pass orders therein on that premise, there is nothing wrong in the court opting to exercise jurisdiction under Order XI Rule 21 C.P.C. It is submitted on the contrary that since the order passed by the trial court in I.A No.1495/2000, was also to the effect of directing the defendants to discover the documents and produce the same for inspection, non-compliance thereof will empower the court to invoke jurisdiction under Order XI Rule 21 C.P.C.

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According to the learned counsel, despite granting more

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than six opportunities, the defendant failed to produce the documents

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called for or to file an affidavit stating that the documents are not available with him for production. Even in the counter affidavit filed in I.A No.2536/2001, the stand taken by the defendants was that the documents summoned are available with them. But, they did not produce those even after availing several opportunities. Therefore, the defendants have willfully and purposefully disobeyed the order passed by the trial court in I.A No.1495/2000. According to the learned counsel, non-production of the documents despite directions issued by the court several times tantamount to willful and deliberate default and accordingly it was canvassed that the order striking out the defence passed by the trial court in I.A No.2536/2001 does not call for interference and is only to be confirmed. Sri.P.Praveen, the learned counsel has also relied on Muncipal Corporation of the City of Ahamedabad Vs. Ben Hiraben Manilal [(1983) 2 SCC 422)] to support his contention that, the exercise of a power, if there is indeed power, will assume validity under a proper provision conferring jurisdiction, even if the provision quoted is different or wrong.

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It is contended by the learned counsel secondly that the court below has decreed the Suit in favour of the plaintiff, for the reason that the defence taken by the defendant has been struck out. According to him, once the defence has been struck out, the court

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seized of the case is empowered to pass a judgment in favour of the plaintiff and the trial court is perfectly justified in the case on hand in resorting to that mode of action.

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In Kulwant Singh 's case relied on by the learned counsel, the Punjab and Haryana High Court held as follows :

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“ A perusal of the application dated 01.07.1995 shows that it discloses suit number; the date of the decree; date and nature of decree as well as the particulars of appeal filed. Such application is signed and verified as well. Therefore, in fact, the application dated 01.07.1995 satisfies the requirements of Order 21 Rule 11(2) CPC, though it is titled as an application under Order 21 Rule 32 CPC.” 17. The learned counsel has also invited this Court's attention to

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the ratio laid by the Constitutional Bench in Union of India v. Tulsi Ram [(1985) 3 SCC 501], which was relied on by Punjab and Haryana High Court in Kulwant Singh 's case supra, which is also extracted hereinbelow :

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“It is also well settled that where a source of power exists, the exercise of such power is referable only to that source and not to some other source under which were that power exercised, the exercise of such power would be invalid and without jurisdiction. Similarly, Civil Revision No.4648 of 2009(6) if a source of power exists by reading together two provisions, whether statutory or constitutional, and the order refers to only one of them, the validity of the order should be upheld by construing it as an order passed under both those provisions. Further, even the mention of a wrong provision or the omission to mention the provision which contains the source of power will not invalidate an order

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where the source of such power exits. …....”

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The decisions cited by the learned counsel for the respondent and discussed supra have no application in the context of the case for the reason that, non-quoting of a proper provision is not only the issue involved. A glance at I.A. No.1495/2000 would reveal that the petition was titled under Order XVI Rule 6 read with Section 151 C.P.C. Paragraph 2 of the affidavit filed by the petitioner in support of the above application, is also relevant in the context and is extracted hereunder;

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“2. The defendants had filed a written statement refuting our claim. This Hon'ble Court has also framed the issues to be decided in the case. In order to decide those issues, ie. to substantiate our claim and to refute the defendants plea we are producing herewith few documents. These documents are absolutely essential to decide the various issues involved in the case. There is absolutely no willful laches or negligence on our part in not producing these documents earlier. Unless these documents are received in evidence the plaintiff will be put to great prejudice and loss. If these documents are brought before this court, the same would clearly establish the correctness of the plaint claim. The production of those documents is therefore absolutely essential to decide the various issues involved in the case. Unless these documents are called for, the plaintiff would not be able to effectively establish their case or in other words to corroborate the evidence already produced by the plaintiff before this Hon'ble Court.

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Hence in the interest of justice it is respectfully prayed that this Hon'ble Court be pleased to direct the defendants to produce the mortgage deed dated 26.04.1971 and also the accounts/ledgers maintained by them during the relevant period particularly containing the folios of the plaintiff”.

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It is stated in the extract above that the mortgage deed

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dated 26.04.1971 and the accounts/ledgers maintained by the

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defendants are relevant to corroborate the claim of the plaintiff in the suit and therefore a direction was sought to be issued in the application filed, to the defendants to produce those documents. The stage of the suit in which the application for production of documents filed is crucial as the source of the power is derivable from that context alone. When viewed in the manner the only source which confers power on the court to issue direction for production of

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documents in the context on hand is Order XVI Rule 6 C.P.C.

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Order XVI Rule 6 provides for issuance of summons to a

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witness for production of documents. It reads:

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Order XVI - Summoning and attendance of witnesses

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“6. Summons to produce document.- Any person may be summoned to produce a document, without being summoned to give evidence; and any person summoned merely to produce a document shall be deemed to have complied with the summons if he causes such document to be produced instead of attending personally to produce the same.”

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Order XVI specifically deals with summoning and attendance of witnesses after settling of the issues. Order XVI is directed by the Code to be invoked not later than 15 days after settlement of issues. Or in other words, the provision is meant to be invoked after settlement of issues and prior to the court proceeds to try the case. Whereas Order XI speaks about discovery and inspection

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of documents and the provision is meant to be invoked much earlier

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to settlement of issues and not afterwards. It is apposite in the context to refer to Rules 2, 12 and 15 of Order XI C.P.C., which are extracted hereinbelow;

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“2. Particular interrogatories to be submitted.- On an application for leave to deliver interrogatories, the particular interrogatories proposed to be delivered shall be submitted to the Court and that court shall decide within seven days from the day of filing of the said application. In deciding upon such application, the Court shall take into account any offer, which may be made by the party sought to be interrogated to deliver particulars, or to make admissions, or to produce documents relating to the matters in question, or any of them, and leave shall be given as to such only of the interrogatories submitted as the Court shall consider necessary either for disposing fairly of the suit or for saving costs.”

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“12. Application for discovery of documents.- Any party may, without filing any affidavit, apply to the Court for an order directing any other party to any suit to make discovery on oath of the documents which are or have been in his possession or power, relating to any matter in question therein. On the hearing of such application the Court may either refuse or adjourn the same, if satisfied that such discovery is not necessary, or not necessary at that stage of the suit, or make such order, either generally or limited to certain classes of documents, as may, in its discretion, be thought fit:

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Provided that discovery shall not be ordered when and so far as the Court shall be of opinion that it is not necessary

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either for disposing fairly of the suit or for saving costs. ”

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“15. Inspection of documents referred to in pleadings

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or affidavits.- Every party to a suit shall be entitled at or before the settlement of issues to give notice to any other party, in whose pleadings or affidavits reference is made to any document or who has entered any document in any list annexed to his pleadings, to produce such document for the inspection of the party giving such notice, or of his pleader, and to permit him or them to take copies thereof; and any party not complying with such notice shall not afterwards be at liberty to put any such document in evidence on his behalf in such suit unless he shall satisfy the Court that such document relates only to his own title, he being a defendant to the suit, or that he had some other cause or excuse which the Court shall deem sufficient for not complying with such notice, in which case the Court may allow the same to be put in evidence on such terms as to costs and otherwise as the Court shall think fit.”

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Rules 2, 12 and 15 speak about interrogatories proposed to be delivered, discovery and inspection of documents referred to in the pleadings or affidavit on applications being filed, for the respective purposes.

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Order XI Rule 21 speaks about consequences of violations of directions issued under Rules 2, 12 and 15 CPC and is extracted hereinbelow:

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“21. Non-compliance with order for discovery.-

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(1) Where any party fails to comply with any order to answer

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interrogatories, or for discovery or inspection of documents, he shall, if a plaintiff, be liable to have his suit dismissed for want of prosecution, and, if a defendant, to have his defence, if any, struck out, and to be placed in the same position as if he had not defended,

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and the party interrogating or seeking discovery or inspection may apply to the Court for an order to that effect, and an order may be made on such application accordingly, after notice to the parties and after giving them a reasonable opportunity of being heard.

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(2) Where an order is made under sub-rule (1) dismissing any suit, the plaintiff shall be precluded from bringing a fresh suit on the same cause of action.”

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When the provisions extracted above are viewed in the backdrop of the recitals in the affidavit filed in I.A. No.1495/2000 extracted supra, it is clear that the source of power sought to be exercised by the Court is referable only to Order XIV Rule 6 and not to Rules 2, 12 or 15 of Order XI C.P.C. The stage at which the application was filed is also referable to the source of power sought by the applicant to be exercised by the court. Undoubtedly, the application was filed after settlement of the issues. Therefore, the decisions referred to supra have no relevance in the context and those won't help the defendant in any way to support the argument advanced by him.

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It is clear from Order XI Rule 21 CPC that only when a party fails to comply with directions issued to answer interrogatories or for discovery or inspection of documents, he shall, if a plaintiff, be liable to have his suit dismissed for want of prosecution, and if a

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defendant, to have his defence, if any, struck out and be placed in the

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same position as if he had not defended the case. Therefore, the power under Order XI Rule 21 C.P.C is strictly meant to be invoked only in the three situations enumerated under Rules 2, 12 and 15 of Order XI C.P.C and cannot be invoked in any other context. In the case on hand, it appears from the records of the case that the defendant has filed written statement raising contentions contrary to those raised by the plaintiff and based on those, issues have also been settled by the court. Therefore, I.A No.1495/2000 having been preferred after settlement of the issues, seeking for issuance of a direction to the defendants to produce the documents mentioned therein for enabling the court to adjudicate the various issues settled in the case, it cannot be said that the title of the application was mis-quoted by the petitioner as Order XVI Rule 6 C.P.C, as contended by him. The party applying for the relief being the master of the same and once he has opted to file it under a provision, it is improper for the court to pass orders in it by treating it as one filed under a different provision. Neither in the affidavit filed in I.A No.1495/2000 nor in the petition supporting the same, prayer was not made by the petitioner seeking for discovery or inspection of documents as contemplated under Rules 12 or 15 of Order XI C.P.C.

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The order passed in I.A No.1495/2000 on 31.05.2000 was only to the effect; “Heard. For documents or affidavit”. Despite grant of several opportunities to produce the documents, the defendant failed to comply with the same. He neither produced the documents called for nor filed an affidavit as directed by the court. Thereupon, the I.A was closed on 16.03.2001 after recording the factum. On 29.05.2001, I.A No.2536/2001 was filed under Order XI Rule 21 C.P.C to struck out the defence. The I.A was posted for filing objection to 14.06.2001. Objection was filed on 14.06.2001 and I.A was posted for hearing to 15.06.2001. I.A was heard on that day and was posted for passing orders to 18.06.2001. Thereafter the I.A was posted successively to 21.06.2001 and 25.06.2001. Ultimately on 25.06.2001, the court has passed an order in the application striking out the defence for the reason that there was willful and deliberate default on the part of the defendant to comply with the directions repeatedly issued by the court in I.A No.1495/2000 to produce documents. On 25.06.2001 itself, judgment was also passed in O.S No.103/1998, granting a decree in favour of the plaintiff.

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True that the defendant has willfully and deliberately disobeyed the direction issued by the trial court in I.A No.1495/2000.

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But the failure to comply with the direction issued by the court being in an application under Order XVI Rule 6 C.P.C, it will not confer jurisdiction on the court to act under Order XI Rule 21 C.P.C. It is unambiguous on a reading of Order XI Rule 21 C.P.C, that invocation of the power thereunder to struck out defence is statutorily restricted to the three situations contemplated under Rules 2, 12 or 15 of Order XI C.P.C. When willful and deliberate default to comply with a direction issued by the court under any of the provisions of C.P.C other than the three stated above, there is a clear bar for invocation of jurisdiction by the court under Order XI Rule 21 C.P.C.

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In the case on hand, the defendant undoubtedly is liable for willful and deliberate default in complying with a direction issued by the court under Order XVI Rule 6 C.P.C. But, for that willful default, the trial court is not empowered by the Code to invoke the jurisdiction to strike out the defence under Order XI Rule 21 C.P.C. The trial court by passing an order in I.A No.2536/2001 under Order XI Rule 21 C.P.C has undoubtedly exceeded its jurisdiction. In fact the trial court has struck out the defence of the defendant, which it ought not to have done in the context of the case when issues were already settled. The direction sought for by the petitioner vide I.A

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No.1495/2000 was for production of documents or filing affidavit by the defendant, juncture of those with the case records is inevitable for a proper adjudication of the issues settled by it. The application being filed after settlement of issues and the documents called for not being produced despite directions issued by order passed by the court in the application, the trial court has no other alternative than to adjudicate on the issues, as if the documents were nonexistent. The trial court was not empowered to strike out the defence of the defendant as done by it in the case on hand. Therefore, the plaintiff ought not to have filed I.A No.2536/2001 under Order XI Rule 21 C.P.C, since filing of one such in the context on hand is absolutely impermissible under the Code. The defendant in the case on hand has not committed any willful and deliberate default in the matter of compliance of any directions issued under Rules 2, 12 or 15 C.P.C so as to empower the trial court to invoke the jurisdiction under Order XI Rule 21 C.P.C and thereby to pass an order, striking out the defence of the defendants in I.A No.2536/2001 .

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It is made clear from the records of the case that the issues have already been settled. Therefore, the only option left for the trial court is to proceed with the trial in the case. Once the issues have

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been settled, parties to the litigation must be permitted to adduce evidence on the basis of those. In the case on hand, the trial court ought not to have struck out the defence, rather it ought to have let the parties to adduce evidence. Only when evidence is adduced by the parties supportive of their pleadings, the court will be able to discharge its duty of adjudication of issues framed by it. The Court undoubtedly has transcended its jurisdictional limits while striking out the defence in the context of the case on hand.

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Going by the judgment under challenge, it is seen that in paragraph 4, the following issues were framed by the trial court;

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“1) Whether the rate of interest claimed by the defendant Corporation is sustainable?

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2) Whether the plaintiff has failed to credit any payments made by the plaintiff?

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3) Whether the amount demanded by the defendant Corporation dated 30.12.1995 was correct?

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4) Whether the plaintiff is entitled to get any amount as claimed in the plaint?

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5) Reliefs and costs?”

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Paragraph 5 of the judgment under challenge is also

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extracted hereunder;

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“5. The plaintiff filed I.A.No.1495/2000 seeking production of a document from the custody of the defendants. In spite of repeated adjournments for production of the documents sought

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for or filing affidavit as directed, those were not produced. Hence, the plaintiff filed I.A.2536/2001 to invoke Order XI rule 21 C.P.C for striking out the defence. After giving sufficient opportunity to the defendant, the petition is allowed. Hence, the suit is to be decreed as if the defendant has no contest.”

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It is clear that the plaintiff was not permitted to adduce

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evidence in the case on hand. Instead, an order was passed in I.A No.2536/2001 on 25.06.2001 and the said order formed the very basis for decreeing the suit. Apart from a short discussion that direction issued by the court in I.A No.1495/2000 was not complied with and I.A No.2536/2001 was allowed for that reason, no discussion on merits of the case was there in paragraph 5 of the impugned judgment. The issues framed were also not answered. It is also found from the judgment that the trial court failed to apply its mind to the provision under which and the stage at which I.A. No.1495/2000 was filed by the plaintiff, prior to invoking jurisdiction under Order XI Rule 21 CPC to pass orders in I.A. No.2536/2001 and consequently decreeing the suit. Therefore, this Court has no hesitation to hold that the trial court has erred in invoking the jurisdiction under Order XI Rule 21 CPC and striking out the defence of the defendants in the case on hand. The trial court ought to have found that the direction issued being one for production of document in an application filed

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by the plaintiff under Order XVI Rule 6 CPC, the failure of the defendant, even if amounts to willful disobedience, will not empower it to strike out the defence.

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In the case on hand the trial court has settled the issues. Therefore, it ought to have answered all the issues as contemplated under Rule 2 of Order XIV CPC which is extracted here under:

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“ 2. Court to pronounce judgment on all issues .- (1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub-rule(2), pronounce judgment on all issues.

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(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof maybe disposed of on an issue of law only, it may try that issue first if that issue relates to-

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(a) the jurisdiction of the Court, or

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(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue.” (Emphasis supplied).

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The above provision says that once issues are framed by

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the court, it is bound to answer all those. Even though a preliminary issue of maintainability is raised and found against, the court shall

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not refrain from answering other issues raised in the case. It is imperative for the court even in a case where the defence is struck out legally, to proceed with the trial and it ought not to have dismissed

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the suit as if the plaintiff's claim in the suit is unchallenged. Even if

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the defence is struck out, the plaintiff has to discharge his burden to establish his case by adducing evidence. He must file an affidavit swearing to his pleadings and mark the documents produced by him in evidence and for that, necessary opportunity must have been provided by the trial court. Though the defence of the defendant was struck out, himself having not been declared ex-parte, must be granted with opportunity to cross examine the plaintiff on the facts sworn to in the affidavit and also to raise challenges against the documents marked in evidence.

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In the case on hand, the defence has been struck out illegally vide order dated 25.06.2001 passed in I.A No.2536/2001 and the judgment and decree under challenge were passed on its basis, without the trial being proceeded with. As already stated, the order was passed in I.A No.2536/2001 on 25.06.2001 and on the very same day, the judgment and decree under challenge was also passed. Therefore, the defendant was denied with opportunity to challenge the order in I.A No.2536/2001 independently. Therefore, the plaintiff cannot be heard to contend that the order in I.A No.2536/2001 has become final due to non-challenge of the same by the defendant. Since order in the I.A and judgment under challenge were passed on

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the same day, the aggrieved party is also empowered under Section 105 C.P.C to take the same as a ground of challenge in the appeal.

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The above views taken by this Court are well fortified by the decisions relied on by the learned counsel for the appellant and referred to supra. In Chinnappan 's case, the Madras High Court has laid the dictum :

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“ 4. xx xx xx Order 11 R.21, CPC to the extent to which that provision is relevant on the facts of this case, states that where any party fails to comply with any order to answer interrogatories, or for discovery or inspection of documents, he shall, if a defendant, have his defence, if any, struck out, and to be placed in the same position as if he had not defended, and the party interrogating or seeking discovery or inspection may apply to the court for an order to that effect, and an order may be made on such application accordingly, after notice to the parties and after giving them a reasonable opportunity of being heard. It is thus seen that the remedy of having the defence of a defendant struck out would arise only when he fails to comply with an order to answer interrogatories or for discovery or inspection of documents and not in other cases. ”

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In Ismail Pillai 's case, this Court held :

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“ The order strucking off the defence show that the Trial Court did not consider the relevant aspects at all. The order without a finding that defendant was guilty of obstinacy or contumacy or willfully disregarded the order of the Court such an order could not have been passed, even if R.21 of O.11 of the Code applies. Even if the strucking off the defence was justifiable, which in fact was not, denial of an opportunity to cross examine the witness examined by plaintiff was illegal. Even when the defence was struck off, defendant is entitled to cross examine the witnesses examined on the side of the plaintiff, though it will not enable him to lead evidence. ”

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This Court has also held :

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“ The provisions of R.21 has to be exercised with care and caution and is to be the last resort. A plaint shall not be thrown out or the defence struck off without adequate reasons. The test laid down under R.21 is whether the default is willful. If it is on the part of the plaintiff it entails in the dismissal of the suit. Such an order ought not to be made unless Court is satisfied that he was willfully withholding information, refusing to answer the interrogatories or withholding the documents which he ought to discover. In such an event, plaintiff must take the consequence of having his suit dismissed. On the other hand, if it is the case of the defendant his defence is liable to be struck off and he is to be placed in the same position as if he had not defended the suit. But it is settled legal position that Court should exercise the stringent provisions only in extreme cases, where there is contumacy on the part of the defendant or a willful attempt to disregard the order of the Court. If there was no default much less any willful default on the part of the defendant to comply with the order of the Court, Court is not to exercise the stringent power. ”

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In Sathyadhyan Ghosal 's case supra, the Apex Court has

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held :

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“ 16 . It is clear therefore that an interlocutory order which had not been appealed from either because no appeal lay or even though an appeal lay an appeal was not taken could be challenged in an appeal from the final decree or order. A special provision was made as regards orders of remand and that was to the effect that if an appeal lay and still the appeal was not taken the correctness of the order of remand could not later be challenged in an appeal from the final decision. If however an appeal did not lie from the order of remand the correctness thereof could be challenged by an appeal from the final decision as in the cases of other interlocutory orders. The second sub-section did not apply to the Privy Council and can have no application to appeals to the Supreme Court, one reason being that no appeal lay to the Privy Council or lies to the Supreme Court against an

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order of remand. ”

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In the backdrop of the discussions made and dictums referred to supra, it is held without hesitation that the trial court has erred in invoking the jurisdiction under Order XI Rule 21 C.P.C, in the case on hand. The order in I.A No.2536/2001 and the judgment and decree under challenge are only liable to be set aside. A fresh consideration of O.S. No.103/1998 by Sub Court, Ernakulam is warranted in the context and this court is inclined to remit the case thereto.

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A position was also canvassed by the learned counsel for the appellant that in the event of remand of the case to the trial court, the appellant is entitled to refund of court fee paid on the Memorandum of Appeal. The learned counsel has also drawn the attention of this Court to Section 67 of the Kerala Court Fees and Suits Valuation Act, 1959. The provision reads :

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“ 67. Refund in cases of remand .- (1) Where a plaint or memorandum of appeal which has been rejected by the lower Court is ordered to be received, or where a suit is remanded in appeal for a fresh decision by the lower Court, the Court making the order or remanding the appeal may direct the refund to the appellant of the full amount of fee paid on the memorandum of appeal; and, if the remand is on second appeal, also on the memorandum of appeal in the first Appellate Court.

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(2) Where an appeal is remanded in second appeal for a fresh decision by the lower Appellate Court, the High Court remanding the

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appeal may direct the refund to the appellant of the full amount of fee paid on the memorandum of second appeal if the remand is in second appeal.:

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Provided that, no refund shall be ordered if the remand was caused by the fault of the party who would otherwise be entitled to a refund:

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Provided further that, if the order of remand does not cover the whole of the subject matter of the suit, the refund shall not extend to more than so much fee as would have been originally payable on that part of the subject-matter in respect whereof the suit has been remanded. ”

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This Court has already decided to set aside the

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judgment. Therefore, remand of the case to the trial court is inevitable. A fresh consideration of the whole subject matter of the suit is also required and in that context, the appellant is entitled to get refund of the full amount of court fee paid on the memorandum of appeal.

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In the result, appeal stands allowed. The order passed by the trial court in I.A No.2536/2001 on 25.06.2001 and the judgment and decree passed on the same day in the suit are set aside. O.S. No.103/1998 is remanded to the trial court for consideration afresh. For the purpose, the parties to the suit shall make themselves available before the court strictly on 15.03.2020. On appearance of the parties, the trial court shall proceed to post the case for trial. Both parties must be provided with opportunity to adduce evidence to establish their respective claims. Since the order passed in I.A.

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No.2536/2001 was set aside, the trial court shall proceed to try the case. At any rate, the suit shall be tried and disposed of within a period of four months from the date of receipt of a copy of this judgment. The appellant is also entitled to get refund of the entire court fee paid by him on the memorandum of appeal.

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Sd/-

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MARY JOSEPH, JUDGE

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JJ/ttb

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//TRUE COPY// Sd/PA TO JUDGE

Kerala Financial Corporation v. Mas Hotel

Case brief

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Kerala Financial Corporation v. Mas Hotel

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