The Gauhati Bank Ltd. vs Baliram Dutta and Others

Ram Labhaya, J.—This is an appeal from the decree and order of the ex-officio Sub. Judge, Tezpur, by which plaintiff''s suit was dismissed for non-payment of adjournment costs on 19th May 1948. The decree was signed on 11th February 1949.

The appeal was presented on behalf of the plaintiff (the Gauhati Bank). The suit was for recovery of Rs. 56,839/9/3. A decree for the amount claimed was prayed for against defendants 1 and 2. It was further prayed that the decree should provide that if the entire decretal amount with interest and coats was not realised from defendants 1 and 2, the unrealised amount of the decree would be recoverable from defendant 3 with consequential costs.

The suit was dismissed in the following circumstances. On 6th August 1947, defendants applied for production of certain documents by plaintiff for inspection. The Court ordered the production of the documents asked for. On the next date viz., 1st October 1947, defendant applied for the dismissal of the suit on the ground of the failure of the plaintiff to produce the documents asked for. Plaintiff applied for more time for the purpose and time was allowed till 26th, November 1947. The case again came up for hearing on 28th January 1918. The documents asked for had not been produced by the plaintiff till then. The Court ordered that the application of defendant 3 dated 1st October 1947 asking for the dismissal of plaintiff''s suit on account of non-compliance with the order of the Court be put up for hearing. This petition was heard on 7th April 1948. The learned Sub-Judge found that the plaintiff was not in a position to produce all the documents asked for and in point of fact both the parties were blame worthy. He, therefore, did not dismiss the suit, but ordered that plaintiff should produce certain specified documents and if the plaintiff Bank was not able to produce any of these documents it should make an averment to that effect in Court It was further provided in the order that in the event of its non-compliance, the suit shall be dismissed. The case was fixed for 21st April 1948.

The plaintiff did not comply with the order even by this date and asked again for extension of time for compliance. On 21st April 1948 when the came up for hearing, the Court refused to grant any more time and fixed 28th April 1948 for considering the consequences off default on plaintiff''s part. On 28th April 1948 considering that the claim was for a sum of Rs. 56,889-9-3, the Court reviewed its previous order on the condition that the plaintiff paid Rs. 25 to defendant 8 as adjournment costs. The time for producing the documents was extended till 19th May. On 19th May plaintiff produced some documents and put in an affidavit explaining the non-production of soma others.

The sum of Rs. 25 payable to defendant 3 as adjournment costs was not deposited The result was that there was only a partial compliance with the order of the Court dated 28th April 1948. The learned Sub-Judge then passed the following order:

Plaintiff files certain documents and files an affidavit regarding other documents called for Adjustment cost not paid--the suit is dismissed in terms of my above order for non-payment of adjournment costs (which the plaintiff appears unwilling to pay).

This appeal is directed against this order. It is contended that the amount duo by way of costs to defendant 3 was not deposited on the request by his counsel in conformity with a common practice by which costs are paid to the counsel for the party in whose favour the order for costs is made, It is urged further that the case was not called on 19th May 1948 and plaintiff''s counsel had no opportunity to explain why the amount had not been deposited. The suit was dismissed in the absence of plaintiff''s counsel, who learned about it next day. There is an affidavit from the pleader of the plaintiff Bank in support of the above statement of facta. This affidavit has not been contradicted.

Defendant 3 in whose favour the order of coats was made is not before the Court. The appeal is being heard ex parte against him. Defendants 1 and 2 have resisted the appeal.

The learned Counsel for defendants 1 and 2 urges that this appeal is not competent, His contention is that the order of the Court dismissing the suit merely for non-payment of costs does not amount to a decree and that no appeal lies from the order notwithstanding that a decree sheet was later on prepared. His was that the order was passed under Order 17, Rule 1.

There is considerable force in this contention. Order 17, Rule 1, Code of Civil Procedure., gives the Court the power to adjourn the hearing of the suit from time to time. The powers of the Court in this matter are very wide. It may grant adjournment on any terms that it considers fit. It is, therefore, within the competence of the Court to grant an adjournment on the condition that costs are paid on a particular date, failing which the suit shall be dismissed or defence struck off as the may be. Such a condition if imposed could also be enforced in the event of non-compliance of the order. This proposition appears to be concluded by authority.

In Sewratan Vs. Kristo Mohan Shaw and Others, the order was to the following effect:

If the money is not paid by 1st June, the suit will be dismissed with costs.

It was held that

a farther order was necessary by the Court before the suit was dismissed, but the Court would not be bound to pass the order of dismissal.

It is clear from this decision that it was recognised that the Court had the power to dismiss the suit if the order as to the payment of costs was not complied with.

In East Indian Railway Company Vs. Jit Mal Kallo Mal, it was laid down that if payment of costs is made a condition precendent to the adjournment granted to the defendants and the order provides that if costs are not paid, the defence will be struck off, it is open to the Court to strike off the defence and proceed ex parte when the costs are not paid as directed.

In Raju Chettiar v. Ramakkal A.I.R.1941 Mad. 437 : (199 I. C. 790) the learned Judge referring to Clause (2) of O.17, Rule 1, observed as follows:

It is clear from sub-r. (2) that the Court is given ample discretion as regards the conditions subject to which it may adjorun the hearing of the suit in so far as the costs occasioned by the adjournment are concerned. I am not prepared to say that when the Court finds a plaintiff constantly defaulting in being ready for the trial, it will not be justified in directing the payment of the day costs as a condition precedent to the further hearing of the suit. When such a condition is inserted in the order it is valid and could be enforced by the dismissal of the suit.

The same view was taken in AIR 1940 158 (Nagpur) where the learned Judge followed East Indian Railway Company Vs. Jit Mal Kallo Mal,

The learned Counsel for the appellant has not cited any authority against this view. It is obvious that in these circumstances the Court was fully competent to order as it did on 28th April 1948 that the suit will be dismissed if the plaintiff did not pay Rs. 25 as adjournment costs to defendant 3. It Could also enforce this condition by dismissal of the suit as it later on did on 19th May 1949.

The learned Counsel for the plaintiff-appellant has contended that the order of 19th May 1948 dismissing the suit for plaintiffs de. fault is covered by Order 17, Rule 3, Civil P.C.

I find myself unable to accept this contention. The two orders dated 28th April and 19th May 1948 read together leave no room for doubt that the Court was not proceeding under Order 17, Rule 3. Assuming that the circumstances of the case also attracted the applicability of Order 17, Rule 3, there can be no doubt that the Court was not bound to take action under Order 17, Rule 3. It could adopt any alternative course that was open to it. In these circumstances to dismiss the suit only for default on the part of the plaintiff-appellant was possible. The Court had the power to pursue this course. But the Court has not indicated in express terms that it was proceeding under Order 17, Rule 1. In these circumstances the determination of the question whether it proceeded under Order 17, Rule 1 or under Order 17, Rule 3, would depend on the circumstances of the . These circumstances have been stated above. They do not even remotely suggest that the Court had Order 17, Rule 3 in mind. It dismissed the suit merely on the ground of plaintiff''s default in the payment of the cost. This fact was emphasised in the order. There is absolutely nothing in the order to indicate that the Court proceeded to decide the suit on the merits. If the Court had intended to dispose of the suit on its merits, there would have been at least this statement that the suit is dismissed for want of evidence. Again, defendant 8 had claimed compensation from the plaintiff on the ground that the suit against him was passed on false and vexatious grounds. The point was in issue. He would have had an opportunity of substantiating his claim if the Court had proceeded on the merits.

There is also another significant fact. Plaintiff''s pleader was not present on 19th May 1948 when the suit was dismissed. The documents called for along with an affidavit were produced that day. But the suit was not dismissed at that time. It was apparently put up later. The affidavit from the pleader of the plaintiff is to the effect that the case was not called and it was dismissed in his absence. The affidavit remains uncontradicted. The order also does not indicate that any of the defendants was present. This circumstance also points to the conclusion that the Court did not proceed under Order 17, Rule 3 as suggested by the learned Counsel for the plaintiff appellant. In fact, there is nothing in the circumstances of this case to show that the dismissal of the suit was ordered by the Court after proceeding on the merits under Order 17, Rule 3.

The dismissal of the suit on plaintiff''s default to deposit; costs not being a dismissal on the merits, would not create any bar to the institution of a fresh suit u/s 11, Code of Civil Procedure. This view finds support from Shaik Sahib v. Mahomed, 13 Mad. 510, wherein it was held that an order dismissing a plaintiff''s suit for nonpayment of a fee for Commissioner was not a decision on the merits and therefore did not bar a fresh suit on the same cause of action u/s 13 (now Section 11) of the Code. This view prevailed in Han Ram v. Lalbai 26 Bom. 637 : (4 Bom. L. R. 262) also. In this case, the suit was dismissed for failure to give security for costs of the suit. The order now before us, therefore, is not covered by the definition of the decree as given in Section 2 (2), Code of Civil Procedure. The learned Counsel for the appellant has not even contended that the order would be covered by the definition of the decree and has not cited any authority in support of it. His case only was that the order should be taken to have been passed under Order 17, Rule 3 and this aspect of the matter has been dealt with above.

In AIR 1943 149 (Nagpur) however, a decision not cited at the Bar, Digby J; held that the order dismissing a suit for nonpayment of adjournment costs was covered by the definition of the decree as contained in Section 2 (2), Code of Civil Procedure., and that an appeal was competent from such an order. In that case the suit was dismissed in the presence of the parties on the ground that plaintiff was unable to pay the costs of adjournment. The payment was a condition precedent to the suit-proceeding. An application for restoration of the suit was put in by the plaintiff On this the Court ordered that its order dismissing the suit was an order under Order 17, Rule 1, and agreed to restore the suit on. payment of Rs. 22 as costs to the other side. The sum of Rs. 22 was offered to the defendant''s counsel in pursuance of this order, but he refused to accept it. He presented a petition of revision against the order of the learned Judge agreeing to restore the suit on payment of the adjournment costs. The question raised in the revision petition was that an appeal should have been preferred from the order of dismissal which was treated as analogous to an order of dismissal resulting from the application of Order 17, Rule 3. From the respondent''s side the contention put forward was that no appeal was competent and an application for restoration u/s 161 was the only remedy. The learned Judge noticed that the definition of the decree given in the CPC excluded the dismissal of: a suit for default from its scope. He interpreted the word ''default'' in this definition as limited to such defaults which were specifically dealt; with by the Code. He had no authority in support of the view he took and he could refer only to Sewratan Vs. Kristo Mohan Shaw and Others, in which it was assumed that if adjournment coats were not paid by a certain date as ordered, and the suit was dismissed for default an appeal would lie.

With great respect, I am unable to agree with the view taken by the learned Judge in this case. The definition of the decree expressly excludes any order of dismissal for default. The word ''default'' in this definition is not limited in its operation nor has it been qualified in any way. If it is held that the default in the definition refers to cases of default specifically dealt with in the Code, it would be reading something into the definition which is not contained therein Besides, even if we assume that an order of dismissal for default of a kind not specifically dealt with by the Code was not meant to be excluded u/s 2 (2) (b), before such an order could be characterised as a decree, it is necessary that it should amount to a formal expression of an adjudication which so far as the Court expressing it conclusively determined the rights of the parties with regard to all or any of the matters in controversy in the suit. The learned Judge of the Nagpur High Court did not consider whether an order dismissing a suit for default for non-payment of adjournment costs could be treated as an adjudication which conclusively determines the rights of the parties with regard to all or any of the matters in controversy. He merely found that a default in the payment of costs was not excluded from the definition of the decree. He did not consider whether the positive qualifications of a decree are present in such an order. In my opinion these qualifications are completely lacking. A plaintiff institutes a suit. He is ordered to do a certain thing, viz., payment of costs. the payment of coats is made a condition precedent to the further prosecution of the suit. He fails to pay the costs and the suit is dismissed. There is no judicial determination of the matters which were in controversy in the suit. The plaintiff in such a case is not permitted to prosecute the suit. His position would be that of a person who has not instituted a suit at all. The suit, though dismissed, has not been disposed of on the merits. This view finds support from Abdulla Asghar Ali v. Ganesh Das A.I. R.1983 P.C. 68 : (60 cal. 662).

In this case Abdulla Asghar Ali v. Ganesh Das AIR (SC) 1983 P. C. 68 : (60 cal. 662), their Lordships distinguished an earlier decision of the Privy Council reported in Chandri Abdul Majid v. Jawahir Lal A.I.R.1914 P. C. 66 : (36 ALL. 350). They quoted a passage from the judgment in that case which was delivered by Lord Moulton. The passage is as follows:

The chief matter of argument before this Board was a contention that the decree which it is sought to enforce had been constructively turned Into a decree of His Majesty in Council and assigned to the date of 13th May 1901, by virtue of the dismissal of the appeal for want of prosecution on that date, and that therefore the period of limitation was 12 years from 13th May 1901, by virtue of Article 180, Limitation Act, 1872. (Under Article 180, 12 years was allowed for the execution of an order of His Majesty in Council.) Their Lordships see no foundation for this contention which appears to have been the basis of the decision of the Courts below. The order dismissing the appeal for want of prosecution did not deal judicially with the matter of the suit, and could in no sense be regarded as an order adopting or confirming the decision appealed from. It merely recognised authoritatively that the appellant had not complied with the conditions under which the appeal was open to him and that therefore he was in the same position as if he had not appealed at all.

The correctness of the view enunciated in this passage was not questioned. It follows that an order dismissing a suit for want of prosecution would not be treated as a judicial determination of the matters in controversy.

In re In Re: N. Kayambu Pillai, a Full. Bench decision, it was held by their Lordships that the word ''default'' in Section 2 (2) was not confined to default in appearance alone. It included other defaults as well.

The same view was taken in AIR 1942 362 (Oudh) and it was held that the word ''default'' in the definition of the decree covered default of prosecution. I am in respectful agreement with the view taken in the above two cases for the reasons given above by me. An order of dismissal for non-prosecution according to this view does not amount to a decree even though a decree is prepared in pursuance of the order.

The authorities bearing on the interpretation of the word ''default'' as used in the definition of the expression ''decree'' are not, however, uniform.

The contrary view was taken in Syed Mohammadi Husain Vs. Mt. Chandro and Others, and Abdul Majid Mridha Vs. Amina Khatun, In Syed Mohammadi Husain Vs. Mt. Chandro and Others, it was held that the expression ''dismissal for default'' meant dismissal for non-appearance and did not cover a dismissal where the appellant''s pleader was present and expressed his inability to argue the appeal which was dismissed for non-prosecution

In Abdul Majid Mridha Vs. Amina Khatun, the learned Judges held that the expression in question did not include a dismissal for non payment of deficit court-fee. In a sense the Allahabad decision is distinguishable. In that the real question was whether the physical presence of a pleader who was unable to argue the appeal was appearance or not. The learned Judges appeared to have treated that appearance as appearance in law. This question does not arise in the present case and it is not necessary for us to decide as to whether in the circumstances of the Allahabad case the appearance of the pleader was an appearance in the eye of law or not.

In the Calcutta case it was held that an order dismissing a suit or appeal for non-payment of additional court-fees is not an order of dismissal of the suit u/s 2 (2) (b) but that it was a decision under the Court-fees Act and was appealable as a decree, On facts this case is also distinguishable. But so far as the two decisions considered above lay down that the expression ''dismissal for default'' in Clause (b) of Section 2 (2), Code of Civil Procedure., was meant to apply only to defaults as were specifically dealt with by the statute as in Order 9, with great respect to the leaned Judges I find myself unable to agree with them.

In Sewratan v. Kristo Mohan A.L.R. (9) 1922 cal. 320 : (48 cal. 902) , it was assumed that a conditional order that in default (of payment of money) the suit shall stand dismissed could not be revived in the absence of an appeal. Similarly, in Raju Chettiar alias Ramasami Chettiar and Others Vs. Ramakkal and Another, an appeal was heard and disposed of against an order dismissing a suit for payment of costs. No objection was raised to the competency of the appeal. On the other hand, in E. I. Rly. Co. v. Jitmal Kallomal AIR 1926 ALL. 280; (47 ALL. 538) and AIR 1940 158 (Nagpur) revision petitions were entertained against orders dismissing suits for default in the payment of adjournment costs. In these also no objection was taken to the competency of the petitions. These cases are of no great assistance one way or the other as the point now before us was not in question in these cases and no considered decision on it can be said to have been given.

The review of the authorities considered above seems to justify the conclusion that the weight of authority like that of reason is on the side of the view that an order dismissing a suit for non-payment of adjournment costs is not appealable either as a decree or as an order. A petition of revision against such an order would however lie and it would be open to the High Court to set aside the order where in the exercise of its revisional jurisdiction it finds that interference is called for or justified.

The order dismissing the suit was passed on 19th May 1948. The appeal in this case was filed on 19th March 1948. The decree sheet was signed on nth February 1949. The appeal was within time according to the view that still obtains in the Calcutta High Court, vide Sudhansu Bhusan Pandey Vs. Majho Bibi, and Sarat Chandra Nag Vs. Rati Kanta Polley and Others, This view was not followed by us in Civil Appeal No.. 31 of 1947 (The Governor-General of India in Council v. Messrs. Jesraj Tilakchand Labhchand) : (A.I.R.1950 Gau 83). But we extended the period of limitation in that appeal u/s 5 on the ground that the appellant was misled by the view prevailing In the Calcutta High Court. If the present appeal had been competent, we would have followed the same course, as this appeal was also filed before our decision in Appeal No. 31 of 1947 : (A.I.R.1950 Gau 83). The appeal would have been heard on the merits. But we have come to the conclusion that the appeal is not competent. The learned Counsel for the appellant has requested that if the appeal is held to be not competent, it may be treated as a revision. In view of the uncertain state of the law on the point as to whether an appeal was competent or not, we think the request may not be refused. We, therefore, decide to treat the appeal as a petition for revision.

The learned Counsel for the respondent has pointed out that even if the appeal is treated as a petition of revision, it would still be barred by time. The Statute does not prescribe any period of limitation for petitions of revision. The grounds on which the period of limitation would have been extended if the appeal had been competent, amply justify the condonation of delay now that the appeal has been treated as a petition of revision. The High Court has also the power to interfere on its own motion in the exercise of its discretionary powers u/s 115, Code of Civil Procedure. at any time in cases where facts justify interference. This, in my opinion is a fit case for the exercise of the revisional jurisdiction.

On the merits the order dismissing the suit ought not to be allowed to stand. The learned Sub Judge had the jurisdiction to pass the order that if costs were not paid on the due date, the suit shall be dismissed. He could also enforce this condition. But in this case he dismissed the suit in the absence of the plaintiff. The case was not called at all. This is proved by the affidavit filed on behalf of the plaintiff which remains uncontradicted. The bank, there fore, had no opportunity to explain its conduct. At a previous stage of this case when a similar default had occurred, the learned Sub-Judge gave an opportunity to the plaintiff'' to show if there was any good cause for non-compliance. The same procedure should have been followed on this occasion. If plaintiff was bound to appear on 19th May and failed to appear the more appropriate course would have been to dismiss the suit for default of appearance. It appearance was not obligatory on that date, the crushing penalty of the dismissal of the suit for Rs. 56,889-9 3 should not have been imposed without giving the plaintiff a chance to satisfy the Court that he had good reasons for non compliance. If such an opportunity had been given, the Court would have been made aware of the request from the counsel for defendant 3 for payment of costs. The Court would not have been bound to accept this arrangement and may have insisted on payment of the costs forthwith. The plaintiff could then have paid the coats. It would have also been open to the Court to accept the arrangement. The drastic step taken would have been avoided. The procedure adopted by the Court below was materially irregular and it has caused a failure of justice.

The order for payment of costs was in favour of defendant 3. The default affected him alone. There was no need for the dismissal of the entire suit even against defendants 1 and 2. In this respect also, there has been no proper or judicial exercise of discretion by the learned Sub Judge. Defendant 3, the person aggrieved by plaintiff''s default, is not now before us. He is not contesting and he is being proceeded against ex parte.

The petition is therefore allowed. The order of the learned Sub-Judge dated 19th May 1948 is set aside. The suit is restored. The case shall be remanded to the Court of the learned ex-officio Sub-Judge., Tezpur, for disposal on the merits.

Petitioner (Bank) shall pay Rs. 100 as costs to defendants 1 and 2.

Thadani, C. J.

I agree, but would add a few words.

I am content to rest my decision on the undisputed fact that the plaintiff''s advocate was not present in Court on 19th May 1948, the date on which the suit was dismissed for non-payment of the adjournment costs. Apparently the plaintiff was also absent on that date. The learned Judge then had the option of proceeding to dispose of the suit either under Order 17, Rule 2 or Order 17, R. S. Civil P.C. I think it is reasonable to say, on the facts of this case, that the learned Judge disposed of the suit under Order 17, Rule 2, and not under Order 17, Rule 3.

I am also content not to express any view, one way or the other with reference to the interpretation as put by Digby J., in the reported in AIR 1943 149 (Nagpur) on the word ''default'' occurring in Section 2 (2), Code of Civil Procedure., as it is not necessary for the purposes of our decision.