P. Kanthammal vs D.S. Rajalakshmi

Balakrishna Ayyar, J.—On 17-12-1957, two persons named Kanthammal atid Kuppuswami Chetti, executed a promissory note for Rs.

10,000, in favour of one Ispahani. On 13-12-1950, Ispahani endorsed the note without recourse to one Rajalakshmi. Thereafter, Rajalakshmi

instituted C. S. No. 64 of 1951 on the file of this court to recover the money due on the promissory note. At this time, a sum of Rs. 4500 lay to the

credit of the first defendant in C. S. No. 42 of 1945 on the file of this court. On 4-3-1952, Rajalakshmi applied for attachment before judgment of

this amount and attachment was ordered on 5-3-1952.

But, by some mischance, the money was paid out to Kanthamma. Thereupon, Rajalakshmi applied to the court that a direction should be issued to

Kanthammal to bring back the money. An order was accordingly made by Panchapakesa Ayyar J. who directed Kanthammal to bring back that

money. Against that order an appeal (O S. A. No. 146 of 1952) was filed. But that appeal was dismissed. On 29-1-1954, Ramaswami J. after

hearing both the parties, confirmed the ex parte order of attachment that had been mode by this court on 5-3-1952.

C. S. No. 64 of 1951 was transferred to the City Civil Court, where it was numbered as O. S. No. 1694 of 1955. On 1-11-1955, Mr.

Timmalpad, the Second Assistant Judge of that court decreed the suit with costs against Kuppuswami Chetti but dismissed it with costs against

Kanthammal. In paragraph 20 of the judgment, he observed,

My finding on issue 2 is that Ex. A-l was transferred in the name of the plaintiff at the instance of the first defendant, on the understanding that the

plaintiff would realise the money only from the second defendant and that therefore the plaintiff is not entitled to any decree against the first

defendant on the promissory note Ex. A-l. The first defendant had no objection to a decree being passed against the second defendant.

Here it may be explained that the case of the first defendant at the trial was this. She admitted that she had executed the promissory note, but the

consideration was advanced only to Kuppuswiimi Chelti. He was the person really liable to pay the amount. The promissory note was deposited in

court in pursuance of an order made by the court in C. M. P. No. 6932 of 1949 in O. S. A. No. 57 of 1949. When that appeal was compromised

and in pursuance of the terms of the compromise, the promissory note was directed to be handed over to Nagiah or a nominee of his Nagiah owed

money to the first defendant. He, therefore, directed Ispahani to endorse the promissory note to the plaintiff who could collect the money from the

second defendant and pay it over to the first defendant.

After the suit was dismissed as against her, Kanthammal filed I. A. No. 395 of 1955 on the file of the City Civil Court, claiming a sum of Rs.

1000 as compensation from Rajalakshmi u/s 95 C. P. G. The learned Assistant Judge dismissed the application. From that order Kanthammal has

preferred the present appeal.

Section 95(1) C. P. C. provides Inter alia for two classes of cases in which compensation may be ordered to be paid to a defendant, where an

attachment has been effected at the instance of a plaintiff. One is that the attachment must have been applied for on insufficient grounds. The other

is where (a) the suit of the plaintiff fails and (b) it appears to the court that there was no reasonable or probable ground for instituting the suit. It

appears from the order appealed from that the case was argued only on the basis that the suit of the plaintiff had failed and that there was no

reasonable or probable ground for instituting that suit.

Though it does not appear that there was an abandonment of the case in so far as it could be rested on the ground that the attachment had been

applied for on insufficient grounds, that aspect of the matter was not argued before that court. The learned Assistant Judge took the view that on

the findings of Mr. Tirumalpad who had tried the suit, it could not be said that the person who had instituted the suit was Rajalakshmi.

He, therefore, dismissed the application. The finding of Mr. Tirumalpad was to the effect that Rajalakshmi was not a holder in due course and that

the endorsement of the promissory note had been taken in her name in pursuance of an understanding between her and Kanthammal. It was also

clear to him that it was Kanthammal herself who was responsible for instituting the suit. It was she who had paid the court fee and had engaged

counsel and was actually responsible for the institution of the suit.

Subsequently however Kanthammal and Rajalakshmi fell out and therefore Rajalakshmi decided to press the case against Kanthammal also. Now,

if this finding is correct, it would mean that the person who actually instituted the suit was Kanthammal and not Rajalakshmi, and it goes without

saying that Kanthammal cannot ask for compensation as against herself. Section 95(1)(b) would therefore not apply.

Mr. Srinivasa Aiyangar, the learned counsel for the appellant, however contended that the word ""institute"" which appears in Section 95(1)(b)

should be given a more comprehensive meaning. According to him, it must be deemed that this suit was instituted by Rajalakshmi as against

Kanthammal at the time she repudiates her understanding with Kanthammal and decides to proceed with the suit against her. According to Mr.

Srinivasa Aiyangar, that would be the stage when we may properly say that Rajalakshmi had instituted the suit against Kanthammal.

He sought to support this argument by analogies drawn from situations where leave to amend a plaint is granted, I do not think that the word

institute"" occurring in Section 95(1)(b) is large enough to contain all this meaning and all these ideas. In order to get the idea which Mr. Srinivasa

Aiyangar would have introduced into this clause, it must read somewhat as follows :

The suit of the plaintiff fails and it appears to the court that there is no reasonable or Probable ground for instituting the suit or further prosecuting

the same as against a particular defendant.

But that words are not in the section. That being so, the case of the appellant cannot be brought u/s 95(1)(b).

The next question is, does it come u/s 95(1)(a)? In, order to bring the case u/s 95(1)(a), it is sufficient to show that an attachment was effected

and that the attachment was applied for on insufficient grounds. Here we are confronted by a difficulty. When on 29-1-1954, Ramaswami J.

passed an order confirming the ex parts order for attachment made, he observed.

I have heard the main application and I have not the slightest hesitation in coming to the conclusion that the plaintiff petitioner had made out a case

for attachment before judgment. This petitioner has filed the suit for a considerable amount and from the pleadings it is clear that she has a

substantial case for the defendants to meet. This first defendant has been promising payment to this plaintiff from out of the realisations in the suit C.

S. No. 42 of 1945 which has fructified in a decree for Rs. 7500 and in regard to which the sum of Rs. 7500 was deposited into court ....... There

is also no doubt that the first defendant has fallen out with the plaintiff and very bad relations are prevailing and in such circumstances, unless this

attachment before judgment is given to the plaintiff, who has got a substantial case as against which, on the limited materials before me the defence

seems to be a thin one though a triable one, the respondent would effectually be able to defeat the plaintiff and convert the decree to be obtained

by her into a paper decree by withdrawing this Rs. 7500.

On the other hand, after the trial of the suit and hearing the evidence, the learned Judge of the City Civil Court, in effect, reached the conclusion

that Rajalakshmi was only a benamidar for Kanthammal, that it was for the benefit of Kanthammal that the suit was instituted and that it was

Kanthammal who found the necessary money for instituting the suit. Now, if this conclusion is correct, it would follow that Rajalakshmi should have

made no effort, whatever to realise any money from Kanthammal, and if she sought to attach any money of Kanthammal, she was doing so, on

insufficient grounds. It was pointed out that the judgment of the City Civil Court was given after full examination of the evidence and on materials

that naturally were not placed before Ramaswami J.

Even if the opinion explained by Rarnaswami J. could be got over on this ground there would still be one difficulty in the way of Kanthammal,

the appellant. Article 181 of the Limitation Act prescribes the period of limitation for applications for which no period of limitation is provided

elsewhere and that period is three years. Time would begin to run from the dale when the eight to apply accrues. Mr. Nambiar contended that the

right of Kanthammal to apply accrued at the time the attachment was effected. On the other hand, Mr. Srinivasa Ayyangar contended that the right

to apply accrued only after the suit had been disposed of, since it was only then that it was established that the attachment had been applied for on

insufficient grounds.

Apparently, there is no authority on the point and counsel have not placed any before me. The matter therefore, is one of first impression and I am

inclined to read the words ""when the right to apply accrues"" as relating to the time when the attachment was first effected, because it is the

attachment that is the foundation of the grievance of the applicant. The attachment was effected in 1953 and the application was made in 1956, that

is to say, more than three years later. The application therefore is barred by time.

In the result, the appeal is dismissed. There will be no order as to costs.