Ram Chand and Sons Sugar Mills (P) Ltd. vs Kanhaya Lal Bhargava and Another

Shamsher Bahadur, J.—This is a rule at the instance of Messrs Ram Chand & Son''s Sugar Mills (Private) Limited of Bara Banki, directed against the order of the Subordinate Judge. 1st Class. Delhi, striking off its defence under the provisions of Section 151 of the Code of Civil Procedure.

A suit was brought by Kanhaya Lal Bhargava. the first Respondent, as far back as 27th of April, 1962, for recovery of a sum of Rs. 45.112.94 Paise against the Petitioner company and one Ram Sarup. It appears that the shareholders of the company are relations of each other and its registered office is in Bara Banki in the State of Uttar Pradesh. Apparently, this case has not progressed very far and is still in its preliminary stages. An application was filed by the Plaintiff-Respondent under Order 11, Rule 21, read with Order 29, Rule 3 of the Code of Civil Procedure, on 27th of October, 1964. in which it was prayed that the defence of the Defendant-company be struck off or in the alternative Shri Jugal Kishore, permanent Director of the company, should appear in Court. Notice of this application was given to the counsel for the Defendant company and he filed a reply on 23rd of November, 1964. An order was made on 3rd of December, 1964, that "as regards the request under Order 29, Rule 3, for requiring Shri Jugal Kishore alleged permanent Director of the Respondent-Defendant in the Court to be present to answer material questions relating to this suit, ... I think it would be proper if Shri Jugal Kishore is directed to be present before this Court. Accordingly, Defendant is directed to produce Shri Jugal Kishore in the Court on the 14th of December, 1964. The counsel for the company stated on the next date of hearing that c he had not been able to contact his client and another opportunity was given at his request to produce Jugal Kishore on 6th of January, 1965. A medical certificate was produced and a further date was fixed for the production of Jugal Kishore. On 18th of January, 1965, he was still stated to be 13,1 and could not be produced on that date. A final opportunity was granted to the Defendant-company through its counsel to produce Jugal Kishore on 3rd of February, 1965, on which date neither Jugar Kishore was present nor a medical certificate was produced. Still an adjournment was granted for 18th of February, 1965, when a telegram was received by the Court that a medical certificate was being sent. Thereafter the proceedings were adjourned to 22nd of February, 1965, when further extension was sought. On 25th of February, 1965, no medical certificate was produced and the Petitioner was asked to show cause why its defence should not be struck off. The case was adjourned to 16th of March, 1965 and again to 1st of April, 1965, for arguments and Jugal Kishore was still absent. After hearing the arguments, the learned Judge struck off the defence of the Petitioner under the provisions of Section 151 of the CPC and from this order, Messrs Ram Chand and Sons have come in revision to this Court.

Order 29 of the CPC deals with suits by or against corporations, and under Rule 3:

The Court may, at any stage of the suit, require the personal appearance of the secretary or of any director, or other principal officer of the corporation who may be able to answer material questions relating to the suit.

That the Court has undoubted power to summon Jugal Kishore who is a Director of the company admits of no doubt, nor is there doubt on the question that there was a willful disregard of the order of the Court, which seems to have been left with no other option but to adopt the drastic course which it has in striking off the defence of the recalcitrant Defendant. It is well to remember that Section 151 of the CPC is very widely worded and to repeat its language:

Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the-ends of justice or to prevent abuse of the process of the Court.

For about four months Jugal Kishore did not appear in Court in spite of orders to this effect although the counsel for the company had undertaken to produce him. It is futile to argue, as has been done by the learned Counsel for the Petitioner before me, that it was not in its power to compel Jugal Kishore to appear in Court. Jugal Kishore is a Director of the company and is consequently under its control. The company cannot be heard to say that one of its Directors does not obey the orders of the Court. The consequences of the default have to be visited on the company and no one else. Jugal Kishore is not a party to the suit and he cannot be penalised in any manner.

The learned Judge has relied on the analogy of Order 10, Rule 4, Order 3, Rule 1 and Order 9, Rule 12 of the Code of Civil Procedure. Under Order 10, Rule 4 if the pleader of any party refuses or is unable to answer any material question renting to the suit which the Court is of opinion that the party whom he represents ought to answer, the Court may call upon the party to-appear in Court and may pronounce such order as it thinks fit. Under Order 3, Rule 1, a party may appear in Court by a recognised agent or a pleader. Rule 12 of Order 9 says that:

Where a Plaintiff or Defendant, who has been ordered to appear in person, does not appear in person, or show sufficient cause to the satisfaction of the Court for failing so to appear, he shall be subject to all the provisions of the foregoing rules applicable to Plaintiffs and Defendants, respectively, who do not appear.

It is manifest that the consequences for non-production of Jugal Kishore have to be visited on no one else but the Petitioner-company whose Director he admittedly is No Court can have its lawful orders flouted with impunity. Jugal Kishore was bound to answer questions under the provisions of Order 29, Rule 3. The provisions of Section 151 of the Code of Civil Procedure, in my view enable a Court to deal with a situation of this kind by passing an order for striking out the defence. Reference may be made to East Indian Railway Company v. Jit Mal Kallu Mal ILR 47 All. 638, where a suit was adjourned at the instance of the Defendant on the condition that the Defendant paid the costs of the adjournment within a prescribed period and not having done so, it was held by Mukerji, J., that the Court was justified in striking off the defence and proceeding with the suit ex parte. It may be observed that the payment of costs may be enforced in other ways besides an order to strike out the defence of the intransigent party. It cannot, therefore, be argued, as has been done by Mr. Sehgal for the Petitioner in this case, that the failure of the Petitioner to produce Jugal Kishore could have been deailt with by a lighter penalty than the one which is involved in striking out the defence. That is really not the issue. The point to determine is whether the Court has acted in the exercise of its jurisdiction. The order may be harsh and somewhat drastic but that does not justify this Court in revision to interfere with it. In a Madras decision of Venkatacharyulu v. Manchala Yesobu AIR 1932 Mad. 263 , the Court ordered the Defendant to deposit the amount in Court at the same time warning him that on failure to do so, his defence would be struck off and this order was upheld in revision by Sundaram Chetty, J., on the ground that the order was within the jurisdiction of the Court in the exercise of its inherent powers u/s 151 although it was not the only order which the Court could pass under the circumstances of the case. Likewise, it cannot be acceptably urged in this case that the Court could have dealt with the Petitioner in a manner different from the one it actually adopted. It is well to point out that in the original application on which the order has been made the prayer was that the defence should be struck off and in the order passed on the 25th of February, 1965, it was reiterated why the defence of Defendant No. 1 should not be struck off. Thus, there was no element of surprise in the order passed by the learned Judge and even on the two opportunities provided on 16th of March and 1st of April, 1965, the Petitioner-company did not care to put in Jugal, Kishore. Even now when I put it to the counsel for the Petitioner that Jugal Kishore may be produced on an early date before the Court below, he demurred on the ground that it was not within the power of the company to compel its Director to appear in Court. In the circumstances, I am of the opinion that the Court resorted to the right measure in dealing with the situation with which it was confronted. It was observed by a Division Bench of Somayya and Rajamannar, JJ., in R.T. Ramayya Servai Vs. R. Sama Ayyar and Others, , that it is very doubtful whether Section 151 would apply to a case where the defence was struck off under the provisions of Order 11, Rule 21, which deals with non-compliance with the order for discovery. The ruling of this decision, however, cannot be construed to mean that the Court in the exercise of its jurisdiction u/s 151 is devoid of the power to make an order for striking out the defence in suitable oases. Moreover, the exercise of jurisdiction u/s 115 of the CPC is discretionary and the High Court is not bound to interfere merely because the order passed by the subordinate Court is erroneous.

I would, therefore, dismiss this petition for revision with costs.