M/s. S.D. and Company and Others vs The State Bank of India and Others

Mohammad Rafiq, J.—This is defendants'' first appeal filed under Sec. 96 of the Code of Civil Procedure, 1908 against the judgment & decree dt. 05/01/1991 passed by learned District Judge, Tonk whereby, the suit filed by the plaintiff-respondent-State Bank of India for recovery of loan amount has been decreed in its favour under Order 34 Rules 4 & 5 of Code of Civil Procedure. Facts of the case are that plaintiff filed a suit for recovery of Rs. 1,86,562.87 against the defendant-appellants and defendant-respondents No. 2 & 3 on the premise that the State Bank of India granted loan of Rs. 1,50,000/- to defendant-respondents No. 2 & 3 executing an agreement on 24/09/1983 in favour of the bank. The Bank further agreed to sanction loan to the extent of Rs. 2,00,000/- on cash credit facility. A guarantee agreement was also executed by defendant-respondents No. 4 & 5 in favour of defendant-respondent No. 1-State Bank of India. A second charge on the plot, buildings, machinery etc. was also created in favour of the bank.

Written-statement was filed by the defendants before the trial Court denying the averments of the plaint and execution of the documents. Plaintiff filed an application for summoning the defendants No. 2 to 4 in person for recording their statements under Order 10 Rules 1 & 2 CPC, which was allowed by the trial Court. On their putting appearance in person, the trial Court decreed the suit vide its order dt. 05/01/1991.

Shri Sagar Mai Mehta, learned Senior Advocate for the defendant-appellants submitted that the trial Court committed serious error of law in allowing the application under Order 10 Rules 1 & 2 CPC by summoning of the defendants in person. Intention of Order 10 Rules 1 & 2 CPC is to enable the Court not only to get obscure points cleared by obtaining the information from either of the parties but also, if possible, to get admissions so as to narrow down the issues in the pleadings but the rule being a penal provision, its terms have essentially to be applied strictly before the Court, which can justifiably pass an order striking off the defence. It is clear from the phraseology of the aforesaid rule that before the Court requires the personal appearance of party, it should essentially examine the party''s counsel and if it still feels that further elucidation of any point or question is necessary, it may call the party in person. In the present case, the trial Court never examined the counsel for the appellants, who remained present throughout on every date of hearing and the order requiring personal attendance of the appellants was passed without compliance of the aforesaid provision of law. It is contended that the counsel for the applicant filed an application before the trial Court showing his willingness to be examined under Order 10 Rules 1 & 2 CPC as he was required to admit/deny the documents and give statements on the points involved in the case but the trial Court did not pass any order on that application and thus committed gross illegality in passing the judgment & decree impugned in the present appeal.

Shri Sagar Mai Mehta, learned Senior Advocate argued that an application was filed under Order 6 Rule 17 CPC by the defendant-appellants seeking amendment of the written statement and the case was fixed for arguments on 24/4/1989 and was adjourned to 26/5/1989. On that date, the trial Court ordered that firstly the statements under Order 10 Rules 1 & 2 CPC will be recorded and kept the application seeking amendment of the written statement pending. Normally, a person desiring a Court to give a judgment as to any legal right or liability has to prove the facts on which right or liability is to be fastened on the other party according to the principle contained in Section 101 of the Indian Evidence Act, 1872. When plaintiff claims that defendant has taken a loan and has executed documents, he is to prove that defendant executed the same unless the defendant would have admitted that he executed the documents. In the present case, the appellants have not admitted the execution of the documents and the plaintiff was not called upon to adduce evidence to prove the documents. Despite this, the learned trial Court decreed the suit without any proof. The judgment and decree has been passed by the trial Court without framing any issue in this regard and recording of the evidence of the parties.

Shri Yashpal Garg, learned for the plaintiff-respondent has though opposed the appeal but was not in a position to show any judgment contrary to the last judgment of this Court on the point involved in the present case. Therefore, matter is considered in the light of the judgments to be referred in the foregoing paras.

This Court in Vishnu Kumar Vs. State Bank of Bikaner and Jaipur and Others, held that where the plaintiff applied under Order 10 Rules 1 and 2, for examination of the defendant as the plaintiff contended that the denial and admission of the documents by the defendant were not specific and a vague reply had been given and the party (defendant) has a duly authorized and instructed counsel appearing on their behalf, then the counsel should be initially examined under the provisions of O.10 Rr. 1 and 2 and if after that examination, the Court feels that further elucidation is still necessary, then orders could be issued under the provisions of O.10 R. 4. Where the Court passed an order under O.10 R. 4 directing the defendant to appear in person without examining the defendant''s duly authorized and instructed counsel, the order is clearly in contravention of O.10 R. 2, which is an illegal exercise of jurisdiction. This Court in taking that view has relied on its earlier judgment in Chetanram vs. Mangharam, 1956 RLW 339.

The Punjab & Haryana High Court in Shri Saraswati Spinning Mills Vs. Gheru Lal Bal Chand Abohar, held that where in a suit for recovery of money the defence of the defendant firm was struck off on the ground that the proprietor of the firm had failed to put in personal appearance in Court in spite of the order passed by the Court under Order 10 Rule 2. When specific application filed by the firm to exempt personal appearance of the Proprietor and permit its pleader, who was fully conversant with the facts of the case to be examined, was dismissed by the Court by merely observing that the pleader would not be in a position to answer the question with regard to signature of the Proprietor on disputed documents, the order striking off the defence of the firm could be said to be illegal. Mere rejection of the prayer of the firm for exemption from personal appearance of its Proprietor would not enable the Court to strike off the defence.

The Karnataka High Court in Karnataka Exports Ltd. Vs. The Mysore Iron and Steel Ltd., held that an order directing a party to appear in person can be passed only if the pleader, who represents him, has refused or is unable to answer the material questions. The Karnataka High Court has in taking that view relied on the judgment of this Court in Chetanram vs. Mangharam, ILR (1956) 6 Raj 921. The Orissa High Court in Tanima Mishra Vs. Pradeep Kumar Patnaik, held that O.10 R. 1 authorises admission or denial of a party through counsel. Court can consider and direct personal appearance of party only if counsel is not able to either admit or deny any particular question. The Jammu and Kashmir High Court in Raghnath Matoo Vs. Sita Ram held that order for personal appearance of parties can be passed only when pleader is unable to or refuses to answer material questions put by Court in the scope of Order 10 Rule 4.

In view of afore-narrated settled proposition of law, trial Court has committed serious error of law in decreeing the suit against the appellants invoking Order 10 Rules 1 & 2 read with Order 10 Rule 4(2) CPC only because the defendants failed to appear in person. Trial Court ought to have accepted application of the counsel appearing for the appellant showing his willingness to be examined under Order 10 Rules 1 & 2 CPC and to give admission or denial of the documents for showing cause. In that view of the matter, the impugned- judgment cannot be sustained. In the result, the appeal is allowed. The impugned-order dt. 05.01.1991 passed by the District Judge, Tonk is set-aside and the matter is remanded back to the District Judge, Tonk with the directions to decide Civil Suit No. 8/1986 afresh within a period of one year by not granting unduly long period to the parties for adducing evidence. The parties are directed to appear before the trial Court on 20.08.2013. The record be sent back to the trial Court forthwith.