Month: February 2018

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Facts – Appellant/plaintiffs sought a perpetual injunction to restrain the respondents from interfering with their possession of the property. Defendant made a counterclaim that property was theirs and appellant be restrained from interfering their use of the property. The plaintiff made a reply to the counterclaim set up by a defendant in order to escape ex parte judgment (Order 8 Rule 6E) and also made an application that defendant’s counterclaim is adjudicated in an independent suit (Order 8 Rule 6C). Sub ordinate judge dismissed the application.

Issue – Whether in a suit for injunction, counter-claim for an injunction in respect of the same or a different property is maintainable? Whether counter-claim can be made on the different cause of action?

Holding – Counterclaim for purposes of Order 8, Rule 6A is no longer confined to money claim or to cause of action of the same nature as an original action of the plaintiff. It need not relate to or be connected with the original cause of action or matter pleaded by the plaintiff. The only limitation is that the cause of action should arise before the time fixed for filing the written statement expires. The defendant may set up a cause of action which has accrued to him even after ‘the institution of the suit.

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Equitable right to set off is a right developed from the principle of equity. Equitable right to set off is a debtor’s right to reduce the amount of a debt by any sum a creditor owes the debtor.

Facts : The appellant Nos. 1 and 3 along with appellant No. 2 instituted suit in the High Court of Calcutta principally for a declaration that they are entitled to be paid all the commissions and other incentives payable to the agents/field officers by the defendants in respect of the transactions or business which was done in accordance with the terms and conditions of appointment of all agents of the defendant company.

After issuance of notice of the plaint which was presented on 11.8.1993, the defendants filed their written statement on 12.8.1994. Thereafter, on 7.4.1998, the defendants filed an application for amendment of the written statement.  The amendment that was sought for by the defendants was to the effect of a grant of a decree for a sum of Rs.4,19,509.43 in favour of the defendant No. 1 and a decree to enquire into the sum which is payable by the plaintiff to the defendant company. The said application was seriously opposed by the plaintiffs on the ground that such an amendment was totally impermissible and the defendants were actually introducing a counterclaim or set-off. Dissatisfied with the order of rejection an appeal was preferred and the Division Bench came to hold that the claim put forth by the defendants by way of written statement could no longer be legally recoverable at that distance of time; and that the claim could not be treated as a counterclaim and set-off as envisaged under the Civil Procedure Code.

Principle: Claim put forth in the written statement cannot be regarded as a counterclaim or a legal set-off as both are not permissible at the stage when the application to amend the written statement was filed.

Also, the provisions of the Limitation Act do not necessarily bar an equitable set-off and the provisions of Order VIII Rule 6 do not do away with the principles of equitable set-off.

It has been opined that a plea in the nature of equitable set-off is not available when the cross-demands do not arise out of the same transaction and not connected in its nature and circumstances.

When a plea in the nature of equitable set-off is raised it is not done as of right and the discretion lies with the court to entertain and allow such plea or not to do so.

SC : Tested on the aforesaid principles we are disposed to think that the Division Bench has rightly allowed the amendment on the base that the claim put forth could be treated equitable set-off, for the stand taken in the amendment can be looked upon as a part of one transaction.

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Facts – Central government is obliged to disburse a certain amount for the purpose of grant of stowing materials and related functions to Coal Company and this amount is to be used only for these stowing purposes and no other purposes.  Coal Company is obliged to pay a royalty to the Central government for extracting sand. Issue arises that due to arrears (unpaid dues) of royalty by the Coal Company, the Central government in order to recover the same has set the dues against the stowing funds.

Issue – Whether the Central Government can withhold the release of stowing assistance, which is its statutory obligation to do, for the purpose of satisfying its demand of money arising under the contractual obligation (i.e. in mining lease) incurred by the Coal Company qua it?

Holding – A plea in the nature of equitable set-off is not available when the cross-demands do not arise out of the same transaction.

Also, in this case, the court does not allow the company to get damages as stowing funds are needed for the safety of workers and not giving them would be hazardous to lives of workers and it would not be equitable.

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• Consolidation of suits is a Judge made technique devised ex debito justicia. The fountain source of power in Section 151 of the Code of Civil Procedure which provides saving of inherent power of court-the guiding force and paramount consideration being achieving the ends of justice and preventing abuse of the process of the court.
• The object behind consolidation is to avoid multiplicity of suits or proceedings, to eliminate chances of conflicting decisions on the same point, to prevent delay and to avoid unnecessary costs and expenses.
• When two suits having been filed the matter in issue in the later suit is also directly and substantially in issue in a previously instituted suit between the same parties. Either party may by placing reliance on S. 10 CPC, seek a stay of the subsequent suit or by placing reliance on S. 151 of the Civil Procedure Code seek stay of earlier suit on account of the latter instituted suit being wider in its scope and impact on the issues arising for decision in the earlier instituted suit. In appropriate cases, the court may instead of staying one of the two suits direct consolidations of the two suits.
• Broadly speaking, if consolidation is likely to create complications at the trial or may prejudice rights of the parties either because the issues are not all common or because the parties are not common, the Court may not consolidate the suits. Consolidation may be preferred to stay in the court may deem it expeditious and advantageous to do so.
• When the parties file suits against each other, though arising out of the same cause of action Consolidation would be expedient and advisable because of the identity of the cause of action and of the evidence likely to be adduced.
• If the trial of two suits was likely to lead to a conflict of decisions on the same point it was a very important consideration to be kept in view for deciding the question of consolidation even without the consent of parties.
• If the parties and the issues in the two suits are common, though different reliefs have been claimed, the consolidation of suits would result in the two suits losing their distinct entity; for all practical purposes after consolidation the two suits would be treated as one capable of being disposed of by one judgment and one decree.
• Though the circumstances warranting an exercise of jurisdiction in favour of consolidation may be available yet the court may decline to consolidate the suits or the trial thereof. If the party opposing the consolidation may be able to demonstrate prejudice to, his case by consolidation.
• The jurisdiction to consolidate the suits can be exercised by the court only when the two suits are before it. if the suit is pending before different courts and a party may be desirous of seeking consolidation then its appropriate remedy is to move the High Court or the District Court, as the case may be, for transferring the two suits in one court.

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FACTS:

The Plaintiff has filed for Leave of the court under section 80(2) and a defendant has filed an application for rejection of the plaint. The trial court rejected the application of the defendant for rejection of the plaint. Then the defendant appealed to the high court, High court has also upheld the decision of the trial court. But, the High Court noted that application regarding the issuance of notice under sec 80(2) filed by the plaintiff was pending before the Trial Court and yet applications praying for rejection of the plaint by the defendant had been heard and rejected by the Trial Court.  The High court, therefore, presumed that since the leave under section 80(2) was not rejected by the trial court, so it might be granted. Yet no order was passed by the Trial Court, but the High Court presumed that the leave has been granted to the plaintiff, so High court also upheld the decision of the trial court and granted the leave under section 80(2).

ISSUE: Whether there can be any presumption with regard to grant of the application filed under Section 80(2) of the CPC, even if no order was passed on the said application.

RATIO:

• If an application has been filed under Section 80(2) of the CPC, the Court should consider the facts and take a look at the circumstances in which the leave was sought for filing the suit without issuance of notice under Section 80(1)
• For the purpose of determining whether such an application should be granted, the court is supposed to give a hearing to both the sides and consider the nature of the suit and urgency of the matter before taking a final decision.
• By merely filing of an application, it should not be presumed that the application is granted. If such a presumption is accepted, it would mean that the court has not to take any action in pursuance of such an application and if the court has not to take any action, then we fail to understand as to why such an application should be filed.

HOLDING:

• The court, therefore, comes to the conclusion that mere filing of an application under Section 80(2) of the CPC would not mean that the said application was granted by the trial court. The court should look at the matter, apply its mind and then it should pass the order.
• The court then has quashed and set aside the judgement of both Trial court and High court and found that there was no urgent and immediate urgency was there, which has constrained the plaintiff from issuing the notice to the defendant.

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FACTS: Plaintiff here is private contractor and defendant is government The plaintiff had filed an application for dispensing of the notice under section 80 of C.P.C in Trial Court.    The Trial court ordered the relief to the plaintiff without notice to the defendant under Section 80(2). The said order has been challenged by the defendants contending that there was no notice served and alleged that the case does not fall under subsection 2.

ISSUE: Whether or not the suit filed by the plaintiff was maintainable because of the alleged non-compliance with the provision of section 80 C.P.C?

RATIO:

• From a joint reading of sub-sections (1) and (2) of Section 80, the legislative intent is clear, service of notice under sub-section (1) is necessary with the exception of where urgent and immediate relief is to be granted by the Court, in such cases a suit against the Government or a public officer may be instituted, yet with the leave of the Court.
• Leave of the Court is a condition precedent. Such leave must be taken before the institution of a suit without serving notice. This restriction on the exercise of power by the Court has been imposed, so, the Court cannot grant relief, whether between interim or otherwise, with the exception of after giving the Government or a public officer a reasonable opportunity of showing cause in respect of relief prayed for in the suit.

Holding:

• In its reply, the defendant had not raised any objection to the urgent and immediate relief contended by the plaintiff. So, the court found that the defendant has waived off his right to raise an objection.
• So, the court is of the opinion that the order passed by the subordinate judge was not beyond his jurisdiction and the matter should not be remanded back to the Subordinate Judge for reconsideration.

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Facts: – A plaint was rejected by the trial Court, and in appeal, that order was reversed by the Appellate Court, which directed the trial Court to proceed with the suit. It is therefore against this order of the appellate court that the appeal has been filed.
The plaint was rejected by the trial Court after issues had been framed by it. So the order is clearly wrong. Under Order 14, Rule 1, Civil. Procedure Code, issues are framed at the first hearing of the suit i.e. after the suit has been admitted under Order 7, Rule 9, Civil Procedure Code. When a suit has been admitted under Order 7, Rule 9, Civil Procedure Code, it cannot be rejected under Order 7, Rule 11, Civil Procedure Code.
Issue: – At what stage can the courts reject a plaint? Can it be rejected post framing of the issues
Holding: – A plaint cannot be rejected after the issues are framed. It is also clear from Order 9, Civil Procedure Code, that after summons are served on the defendants, the suit can be dismissed but the plaint cannot be rejected. The lower appellate Court was therefore right in setting aside the order of rejection of the plaint,
Thus, on the whole, we are satisfied that the trial court was right in returning the plaint to the plaintiff for being presented to the proper court. We, therefore, affirm the order returning the plaint.
In this case, there was a conflict between application of section 16 and 20. It was then said that section 20 is subject to the limitations of section 16 and therefore when section 16 is applicable, section 20 will not be relied upon.

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Facts: – In this case basically the appeal was filed against the order of rejection of plaint against the appellant.

The appellant-Society, the owner of the property entered into an Agreement for Sale of the property in favor of one S. Velayutham – 2nd defendant in the suit on the condition that the transaction should be completed within 6 months after obtaining clearance from Income Tax and other departments and also received an amount of Rs. 5 lakhs as an advance.

Issue: – Whether the Judge of the High Court was justified in ordering rejection of the plaint?

Holding: – Power under Order VII Rule 11 of the Code can be exercised at any stage of the suit either before registering the plaint or after the issuance of summons to the defendants or at any time before the conclusion of the trial.   In view of Order VII Rule 11(a) and 11(d), the Court has to satisfy that the plaint discloses a cause of action and does not appear to be barred by any law.

In the absence of any cause of action shown against the defendant, the suit cannot be preceded either for specific performance or for the recovery of money advanced. Therefore the judge rightly rejected the plaint for non-disclosure of the cause of action.

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Facts: Begum Sahib, the plaintiff, is the daughter of the Mehar Sajeda Sultan. The defendants are her siblings and their children. The mother apparently made an oral will before her death in Delhi in the presence of the defendants because of which certain actions were taken by her siblings regarding the property. Now she has prayed for the following;

“(a) Pass a decree of declaration declaring the oral Will dated 1.1.1995 allegedly made by Her Highness Begum Mehar Taj Sajida Sultan was never made;

(b) to pass a decree of partition in favour of the plaintiff in respect of her entitled share in view of the Islamic Personal (c) Pass a decree of rendition of account in respect of the earnings of the above-mentioned properties w.e.f. June, 2000 until filing of the present suit;

Issue: Is Delhi the proper jurisdiction for the institution of the present suit while the properties are situated in the district of Gurgaon and thereby doesn’t the plaint need to be returned under Order 7 Rule 10?

The plaintiff argued that since the alleged oral declaration was made at Delhi which is reason for this suit, the plaintiff has the necessary cause of action to file the suit in Delhi under the Proviso to section 16 of the code and the court has jurisdiction to entertain it

The defendants raised an objection to the jurisdiction of the trial court. They pleaded that the main relief sought in the plaint was for partition of the properties situate in Gurgaon, not falling within the jurisdiction of Delhi court and the declarations sought for are also related to the said properties and in the light of Section 16(b)and (d) of the Code of Civil Procedure (for short ’the Code’), the jurisdiction to entertain the suit was with the concerned court in the State of Haryana and hence the plaint was liable to be rejected. Counsel further submitted that the proviso to Section 16 of the Code had no application since this was not a case where mere personal obedience to the decree would result in an effective decree. He further pointed out that Section 20 of the Code will have no application in a case where Section 16 squarely applies since Section 20 was only a residuary provision.

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Facts:- The Appellant had instituted a suit inter alia for permanent injunction, infringement of trademark, damages, against the Respondents claiming to be engaged in the field of printed matter, paper articles, newspapers, periodicals, comic books and a lot of other girly shit. According to the Appellant they are the proprietor of Archie Comic Publication Inc. and own the “ARCHIE” trademark with its variations.

The Respondents are allegedly involved in the business of manufacturing and selling kids wear under the said trademark.

Issue:-  In the plaint it is nowhere averred that the Appellant is having its office anywhere in India. Thus, from the pleadings it is evident that the Appellant has no place of work in India; THEREFORE the Respondents moved an application under Order 7 Rule 11 for rejection of the plaint urging that the Court of Delhi had no jurisdiction, as neither the Appellant carries on his work or personally works for gain at Delhi nor the Respondents reside or carry on business nor any cause of action has arisen in Delhi. The Appellant filed an application under Order 6 Rule 17 to add some pointers against the respondent.

Holding:-This case talks about amendment of a plaint and states if the plaint discloses incomplete facts then an opportunity for amendment can be given to the plaintiff however if the plaint completely fails to disclose any of the facts then such amendment of a plaint cannot be given.

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