Athota Anjaiah vs State Bank of India Kandukur and Another

These are all the petitions involving common questions in different suits comprising of similar I.As. Therefore, they are being heard together and are being disposed of by means of this common order.

The applications were filed under Order 8(A) read with Section 151 C.P.C. by some applicants to implead the 2nd respondent - A.P. Irrigation Development Corporation, Ongole (for short ''the A.P.I.D.C.) called third party in the suit and those applications were dismissed. The ground for filing such applications is that in a loan transaction between the plaintiff- the State Bank of India, Kandukur and Ihe respective defendants, they claim that they did not receive the entire amount and the AP1DC was to subsidise some portion of the loan for which they are entitled to be reimbursed and therefore they sought for the third party proceedings under Order 8(A). It was resisted both by the plaintiff in the suits and also the proposed third party.

The learned Munsif, after hearing both the sides and after examining certain aspects held that there was no liability between the defendants and the proposed third party and actually, the liability exists between the plaintiff and the respective defendants themselves. He also held that the matter did not come within (he implications of Order 8(A) CPC as third party proceedings and therefore dismissed the applications to implead the A.P.I.D.C. as the third party.

Mrs. Kour, the learned advocate for the petitioners raised a common ground by way of contention that in view of the clear affidavits filed in support of the applications, there was scope for indemnification by way of reimbursement of the amount which the defendants did not receive or to have been reimbursed by the A.P.I.D.C. by virtue of some scheme and therefore the learned Munsif was not right in dismissing the applications.

Mr. Srinivas, the learned advocate for the plaintiff in the suits and the Respondent No. 1 herein has very seriously contended that the learned Munsif was right in coming to such conclusion since there is not even a scrap of paper produced to prove such a liability of indemnity or the right to be reimbursed such amount which the defendants sought by filing the application Smt P. Bala Rani, the learned standing Counsel for the 2nd respondent APIDC has with equal vehemence and strength tried to support the orders under revisioa

This Court on hearing the learned advocates feels that none of their contentions can be accepted to pass the order in these revision petitions.

Order 8(A)-Third party proceedings was newly incorporated. It is a code in itself It has its own parameters and legal implications. Where a defendant in a suit sets up the claim against such a party called third party stating the nature and the grounds of the claim, has to file a notice into the Court with a copy of the plaint and such a notice be served on the third party according to the rules relating to summons. When such a notice is served on such a third party under Rule-I, by virtue of Rule 2 he shall be deemed to/be a party in the suit as if he was already a party to the suit against whom a claim had been made in the suit. Therefore, there was no question of impleading such a third party as a party to the suit in Ihe manner the learned Munsif has done it. Similarly, there was no reason for the petitioners to seek impleading of such a party as a party to the suit except to follow the procedure stated above. By virtue of Rules 3 and 4, a defaulting third party will suffer the consequences of default regarding which the order can be recalled with the leave of the Court under the proviso to Rule 4. The order of the teamed Munsif appears as if he was dealing with an application under Order 1 Rule 10C.P.C.

While referring to the decision in Rangaswami Gounder Vs. Ramaswami Gounder, the ingredients of the provision has been examined to hold that the case did not fall within Order 8A CPC. In the considered opinion of this Court, that stage did not arise as the petitioners themselves had chosen a wrong procedure in seeking impleading of such a party which is alien to Order 8(A) and Rules 1 and 2 of C.P.C. It is only after the stages of 1 to 4 of the Order 8A are passed, and after the third party enters appearance, the defendant on his behalf may apply to the Court for directions regarding contribution or indemnity and at that stage the Court will hold an enquiry between such parties and pass appropriate orders under Sections 5. If such an order is passed under Rule 5 of Order 8(A), then the third party will get a right to seek the leave to defend such directions under Rule 6 of Order 8(A) and any liability regarding the claims between the defendant and the third party will be decided. Thereupon, the questions Between the co-defendants will have a bearing and relevancy under Rule 8 of Order 8(A) without prejudicing (he right of the plaintiff against the defendant. If necessary, even further parties can be added by virtue of Rule 9. The other Rules of Order 8(A) are not relevant to be considered in this petition. The learned Munsif in total forgetting of these implications of the provisions has passed an order in the manner not expected of and thereby exceeded his jurisdiction in dealing with the matter and practically disposed of the matter under Rule 5 and Rule 8 of Order 8(A) when such stage has not been reached. The learned Munsif has passed the orders as if the application for impleading the party was rejected for the purpose of Order 1 Rule 10 CPC. In fact, there in no scope for impleading any party in such proceedings in the manner known either under Order 1 or under Order 1 Rule 10 CPC or in any other manner within the procedure contemplated in the Court.

The orders under revision are not only illegal but also exercise of excess jurisdiction and cannot be sustained.

The apprehension of Mr. Srinivas that the plaintiff may be prejudiced by allowing the third parry to come on record in the absence of establishing such an indemnity or right to be reimbursed has no basis in view of the implication of Rule 8 of Order 8(A) and also the general law binding the parties of the consequences entertained between the parties to a suit. That need not be emphasised in this case and should be left open.

Now that the impugned orders are going to be set at naught, the learned Munsif and the parties are directed to follow the appropriate procedure for the benefit of all.

Mrs. Kour, submits that a notice has already been filed under Order 8(A) Rule 1 which is admitted to be served on the third party as per the submission made by the learned standing Counsel and therefore the 2nd respondent APIDC shall be deemed to be a party to the proceedings under Order 8(A) Rule 2 of C.P.C. regarding which no further order is necessary. Now the petitioners shall be entitled to seek directions under Rule 5 of Order 8(A) CPC and thereafter the parties to the suit may be permitted to act according to the provisions and the Court shall pass appropriate orders in the light of the observations made above and after giving opportunity to all the persons who are going to be effected by such an enquiry.

The revision petitions are allowed accordingly. There shall be no order as to costs.