Parasmal Chordia vs Rajalakshmi Ammal and Another

Veeraswami, J.—This petition is directed against an order of the Subordinate Judge of Cuddalore dismissing an application of the petitioner

made under Order 8-A, Rule 1, Civil P. C. The suit was laid on a promissory note said to have been executed by the defendant who is the

petitioner, on 21-6-1964. He resisted the suit on the ground that the promissory note was not supported by consideration, and also maintained that

the plaintiffs son had executed an agreement or varthamanam of 4-7-1964, admitting that the promissory note was not supported by consideration

and that, in case, it was successfully enforced, he would indemnify the defendant. Evidently, on the basis of the last averment, the defendant took

out the application under Order 8-A for third party notice to the son of the plaintiff. The application was dismissed by the Subordinate Judge, by

placing reliance on Uthaman Chettiar v. Thiagaraia Filial, 68 Mad LW 810 : AIR 1956 Mad 155 Panchapakesa Ayyar. J. was of the view, in that

case, that the third party notice procedure should not be applied to suits on negotiable instruments.

With due respect to the learned Judge the limitation placed by him does not appear to be justified by the language of Rule 1 of Order 8-A. The

order relates to third party procedure and the first rule says that where a defendant claims to be entitled to contribution from or indemnity against

any person, not already a party to the suit, he may, by leave of the Court, issue a notice, called a third party notice, to that effect. That simply

means that where in a suit the defendant, in case the plaintiff succeeds, is entitled to indemnity from a third party, who has not been already brought

on record, he is entitled to ask for a third party notice. There is nothing in the rule suggesting that it has no application to suits on negotiable

instruments.

It is urged that the rule is applicable only to a claim of indemnity arising out of the same transaction or a transaction entered into simultaneously

with the transaction sought to be enforced in the suit. The answer is Rule 1 itself contains no such limitation. Nor does the reason of the rule

demands such a limitation. The rule is conceived for the benefit of a defendant who, if defeated in respect of, a claim against him, is entitled to

reimbursement by way of indemnity. In such a case the policy of the rule is that the defendant need not be driven to a fresh suit to put indemnity

into operation. That, in my view, should be the approach to the procedure for third party notice,

The further contention for one of the respondents is that Order 8-A itself will be attracted only in cases where a defendant admits liability on the

main transaction sued upon. Support is sought to be derived, for this contention, from Rule 3 of Order 8-A. This rule only states that if the third

party desires to defend himself he may do so; but, if he does not enter appearance, he shall be deemed to admit the validity of the decree against

the defendant and his own liability to indemnity to the extent claimed in the third party notice. This does not mean that Rule 3 limits the scope of

Rule 1 so as to make it applicable only to cases where the suit claim is admitted.

Learned counsel for the petitioner urged that suits on negotiable instruments being of a simple character, by admitting third party procedure it

should not be complicated and from this standpoint, the view of 68 Mad LW 810 : AIR 1956 Mad 155 , is the correct one. As it seems to me, it

is the same or similar point as the one I have already adverted to earlier. Ramachandra Iyer, J., as he then was, in P.S. Pattabhiraman and Others

Vs. Ganapathy Kannappa Mudali and Others, referred to 68 Mad LW 810 : AIR 1956 Mad 155 and interpreted it in such a way as to practically

emasculate Its effect. What seems to me is that Ramachandra Iyer, J. in the context, did not feel inclined to accept the view of Panchapakesa

Aiyar, J. in 68 Mad LW 810 : AIR 1956 Mad 155 . This is clear from the observations of Ramachandra Iyer, J. himself in that judgment, to wit,

there is nothing in the language of Rule 1 of Order 8-A to forge any such limitation to its scope.

Conceived, as it is, for the benefit of the defendant, as I had already stated, all that is necessary for the application of third party procedure is

whether if the plaint claim is allowed the defendant has a claim, in that event, for indemnity by reason of such claim being allowed, from a third

party. If that requisite is satisfied, the Court will not be justified, on any extraneous ground, from refusing third party procedure. Counsel for the

proposed third party urged that on the terms of the Varthamanam if the suit promissory note was found to be without consideration it would be

dismissed, and in that case, no question of indemnity would arise. But, counsel fails to take note of the fact that if the suit is decreed and the

Varthamanam is found to be true and the claim for indemnity can be based on that, the defendant would be entitled to a decree for indemnity as

against the third party.

The petition is allowed with costs. One set.