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CASE NO.:

Appeal (civil) 446 of 2007

PETITIONER:

PREM LALA NAHATA & ANR

RESPONDENT:

CHANDI PRASAD SIKARIA

DATE OF JUDGMENT: 02/02/2007

BENCH:

S.B. SINHA & P.K. BALASUBRAMANYAN

JUDGMENT:

J U D G M E N T

(Arising out of SLP(C) No.23272 of 2005)

P.K. BALASUBRAMANYAN, J.

Leave granted.

1. The appellants are the plaintiffs in C.S. No. 29 of

2003 filed on the original side of the Calcutta High Court.

They are mother and daughter. They together sued the

respondent, the defendant, for recovery of sums allegedly

due to them from him. Appellant No.1 sought recovery of

a sum of Rs. 10,93,863/- with interest thereon and

appellant No. 2 sought recovery of a sum of

Rs.10,90,849/- with interest. Their claims were based on

transactions they allegedly had with the respondent

herein, through Mahendra Kumar Nahata, the husband of

appellant No.1 and father of appellant No.2. In essence,

the claim of appellant No. 1 was that a sum of Rs. 5 lakhs

had been lent by her to the respondent and the same had

not been repaid and the same was liable to be repaid with

interest and damages. The case of appellant No. 2 was

also that she had lent a sum of Rs. 5 lakhs to the

respondent and the same along with interest and damages

was due to her. It was their case that the transactions

had been entered into through Mahendra Kumar Nahata,

and that through Nahata, they have had prior dealings

with the respondent. They had averred thus in paragraph

4 of the plaint:

"The said Nahata in his usual course of

business was known to the Defendant for

many years and sometime in April, 2000

while acting on behalf of the Plaintiffs, the

said Nahata at the request of Defendant

had duly arranged for two loans of

Rs.5,00,000/- to be lent and advanced by

each of the Plaintiffs to the Defendant and

this Suit has been brought to recover the

said loans with interest and special

damages arising from the Defendant's

failure to repay the said loans within the

stipulated date therefor as is stated more-

fully hereinafter."

The respondent not having repaid the money and having

repudiated their claim by filing suits against them, the

suit for recovery of the amounts was being filed.

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2. The respondent had earlier filed two suits for

recovery of amounts allegedly due from the appellants.

Money Suit No. 585 of 2001 was instituted by the

respondent against appellant No. 2 herein claiming

recovery of certain amounts after setting off the amount of

Rs. 5 lakhs taken from appellant No. 2. He had accepted

that Rs. 5 lakhs had been paid by the appellant but

pleaded that it was not a loan, but it was as part of a

business transaction set out in that plaint. The

respondent had also filed Money Suit No. 69 of 2002

against appellant No.1 herein for recovery of certain

amounts on the same basis and after setting off the sum

of Rs.5 lakhs alleged to have been paid by her. The suits

were filed in the City Civil Court at Calcutta. The said

suits were pending when the appellants together

instituted their suit C.S. No. 29 of 2003. Their suit, as

noticed, was on the basis that the sums of Rs. 5,00,000/-

each paid by them to the respondent were by way of loans.

3. The appellants moved A.L.P. No. 10 of 2003 on

the original side of the Calcutta High Court invoking

clause 13 of the Letters Patent read with Section 24 of the

Code of Civil Procedure (for short "the Code") seeking

withdrawal of Money Suit No. 585 of 2001 and Money Suit

No. 69 of 2002 for being tried with C.S. No. 29 of 2003 on

the plea that common questions of fact and law arise in

the suits and it would be in the interests of justice to try

and dispose of the three suits together. Though the

respondent resisted the application, the court took the

view that it would be appropriate in the interests of justice

to transfer the two suits pending in the City Civil Court at

Calcutta to the original side of the High Court for being

tried and disposed of along with C.S. No. 29 of 2003 filed

by the appellants. The said order for withdrawal and

joint trial became final.

4. While matters stood thus, the respondent

herein, the defendant in C.S. No. 29 of 2003, made an

application G.A. No. 4458 of 2003 praying that the plaint

in C.S. No. 29 of 2003 be rejected under Order VII Rule 11

of the Code on the ground that the cause of action of each

of the appellants, the plaintiffs in that suit, did not

emanate from any common source and there was no

interdependence or nexus between the causes of action

put forward by the respective plaintiffs in the suit and that

there was no common foundation for the right to relief

claimed by them. It was pleaded that the appellants, the

plaintiffs could not have joined as plaintiffs in one suit in

terms of Order I Rule 1 of the Code and could not have

united their independent causes of action in the same suit

in terms of Order II Rule 3 of the Code. It was submitted

that there was not only misjoinder of parties but there was

also misjoinder of causes of action. It was on this basis

that the prayer for rejection of the plaint under Order VII

Rule 11(d) of the Code was made. The appellants, the

plaintiffs, resisted the application. They contended that

the claim of the plaintiffs emanated from the dealings at

the instance of Nahata, husband of plaintiff No.1 and

father of plaintiff No.2 with the defendant and that there

was no defect of misjoinder of causes of action in the suit.

They submitted that the plaint was not liable to be

rejected under Order VII Rule 11(d) of the Code.

5. The trial judge on the original side, considered

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the question whether the plaint filed by the appellants was

liable to be rejected under Order VII Rule 11(d) of the Code

on the basis that the suit appeared from the statements in

the plaint to be barred by any law. The learned Judge

took the view that there was no law barring a suit in

which there was misjoinder of parties or a misjoinder of

causes of action, though, of course, for the purposes of

convenience, a court would avoid the misjoinder of causes

of action or misjoinder of parties. But on the basis of

such a defect, the plaint could not be rejected by invoking

Order VII Rule 11(d) of the Code since it could not be held

that a suit which suffers from the defect either of

misjoinder of parties or misjoinder of causes of action or

both, is barred by any law. Thus, the application filed by

the respondent herein, the defendant in C.S. No. 29 of

2003, was dismissed.

6. The respondent purported to file an appeal

challenging that order under clause 15 of the Letters

Patent. The Division Bench held that the suit was bad for

misjoinder of causes of action and hence the trial court

was not justified in not invoking Order VII Rule 11(d) of

the Code and in not rejecting the plaint. The Division

Bench, did not reject the plaint, but, gave the appellants

an opportunity to elect to proceed with the present suit at

the instance of one of them and thus confine the plaint

claim to one of them and the transaction relied on by that

plaintiff. Aggrieved by this decision of the Division Bench

this appeal has been filed by the plaintiffs.

7. Though arguments were addressed on the

maintainability of the appeal filed by the respondent

before the Division Bench under clause 15 of the Letters

Patent, (in which one of us, Balasubramanyan, J. finds

considerable force) counsel for the appellant fairly brought

to our notice the decision in Liverpool & London S.P. & I

Association Ltd. Vs. M.E. Sea Success I and another

(2004 (9) SCC 512) to which one of us (Sinha J.) was a

party, which has taken the view that an appeal under

clause 15 of the Letters Patent lies even in a case where

the trial judge refuses to accede to the prayer of a

defendant to reject a plaint under Order VII Rule 11 of the

Code. Of course, that was a case where the rejection was

sought under Order VII Rule 11 (a) of the Code on the

basis that the plaint did not disclose a cause of action.

For the purpose of this case, we accept the position

enunciated therein. We also do not think it necessary to

consider whether there is any distinction between prayers

for rejection sought under clause (a) of Rule 11 of Order

VII of the Code and clause (d) of Rule 11 of Order VII of the

Code and we proceed on the basis that the Letters Patent

Appeal under clause 15 filed by the respondent herein was

maintainable.

8. But it is a different question whether a suit

which may be bad for misjoinder of parties or misjoinder

of causes of action, is a suit barred by law in terms of

Order VII Rule 11(d) of the Code. The Code of Civil

Procedure as its preamble indicates, is an Act to

consolidate and amend the laws relating to the procedure

of the Courts of Civil Judicature. No doubt it also deals

with certain substantive rights. But as the preamble

vouchsafes, the object essentially is to consolidate the law

relating to Civil Procedure. The very object of

consolidation is to collect the law bearing upon the

particular subject and in bringing it upto date. A

consolidating Act is to be construed by examining the

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language of such a statute and by giving it its natural

meaning uninfluenced by considerations derived from the

previous state of the law.

9. Based on this understanding, we can consider

the respective positions of Order I and Order II in the

scheme of things. Order I deals with parties to a suit and

provides who may be joined as plaintiffs and who may be

joined as defendants. It also deals with the power of the

Court to direct the plaintiffs either to elect with reference

to a particular plaintiff or a particular defendant or to

order separate trials in respect of the parties misjoined as

plaintiffs or defendants. It also gives power to the Court to

pronounce judgment for or against one of the parties from

among the parties who have joined together or who are

sued together. The order also specifies that a suit shall

not be defeated by reason of the misjoinder or non-joinder

of parties, so along as in the case of non-joinder, the non-

joinder is not of a necessary party. The Code also gives

power to the Court to substitute the correct person as a

plaintiff or add parties or strike out parties as plaintiffs or

defendants, at any stage, if it is found necessary.

10. Order II deals with frame of suits. It provides

that every suit shall be framed as far as practicable so as

to afford ground for final decision upon the subjects in

dispute and to prevent further litigation concerning them.

It is also insisted that every suit shall include the whole of

the claim that a plaintiff is entitled to make in respect of

its subject matter. There is a further provision that the

plaintiff may unite in the same suit several causes of

action against the same defendant and plaintiffs having

causes of action in which they are jointly interested

against the same defendant, may unite such causes of

action in the same suit. It provides that objection on the

ground of misjoinder of causes of action should be taken

at the earliest opportunity. It also enables the Court,

where it appears to the Court that the joinder of causes of

action may embarrass or delay the trial or otherwise cause

inconvenience, to order separate trials or to make such

other order as may be expedient in the interests of justice.

11. Thus, in a case where a plaint suffers from the

defect of misjoinder of parties or misjoinder of causes of

action either in terms of Order I Rule 1 and Order I Rule 3

on the one hand, or Order II Rule 3 on the other, the Code

itself indicates that the perceived defect does not make the

suit one barred by law or liable to rejection. This is clear

from Rules 3A, 4 and 5 of Order I of the Code, and this is

emphasised by Rule 9 of Order I of the Code which

provides that no suit shall be defeated by reason of non-

joinder or misjoinder of parties and the court may in

either case deal with the matter in controversy so far as it

regards the rights and interests of the parties actually

before it. This is further emphasised by Rule 10 of Order

I which enables the court in appropriate circumstances to

substitute or add any person as a plaintiff in a suit.

Order II deals with the framing of a suit and Rule 3

provides that save as otherwise provided, a plaintiff may

unite in the same suit several causes of actions against

the same defendant and any plaintiffs having causes of

actions in which they are jointly interested against the

same defendant may unite such causes of action in the

same suit. Rule 6 enables the Court to order separate

trials even in a case of misjoinder of causes of action in a

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plaint filed.

12. After the amendment of Order XVI Rule 1 in

England, it was held by the Court of Appeal in England in

Thomas Vs. Moore [(1918) 1 K.B. 555] thus:

"Whatever the law may have been at the

time when (1894) A C 494 was decided,

joinder of parties and joinder of causes of

action are discretionary in this sense, that

if they are joined there is no absolute right

to have them struck out, but it is

discretionary in the Court to do so if it

thinks right."

The Privy Council in Mahant Ramdhan Puri Vs.

Chaudhary Lachmi Narain [A.I.R. 1937 Privy Council 42]

pointed out:

"It is desirable to point out that under the

rules as they now stand, the mere fact of

misjoinder is not by itself sufficient to

entitle the defendant to have the

proceedings set aside or action dismissed."

Of course, their Lordships were speaking in the context of

Section 99 of the Code. Their Lordships referred to the

above quoted observation of the Court of Appeal in

Thomas Vs. Moore (supra) in that decision. It is therefore

clear that a suit that may be bad for misjoinder of causes

of action is not one that could be got struck out or rejected

by a defendant as a matter of right and the discretion

vests with the court either to proceed with the suit or to

direct the plaintiff to take steps to rectify the defect. In

fact, the Privy Council in that case noticed that the suit

was bad for misjoinder of causes of action. It further

noticed that the trial judge had in spite of the

complications created thereby, tried and disposed of the

suit satisfactorily. Therefore, there was no occasion for

the court to dismiss the suit on the ground of misjoinder

of causes of action at the appellate stage.

13. It is well understood that procedure is the

handmaid of justice and not its mistress. The Scheme of

Order I and Order II clearly shows that the prescriptions

therein are in the realm of procedure and not in the realm

of substantive law or rights. That the Code considers

objections regarding the frame of suit or joinder of parties

only as procedural, is further clear from Section 99 of the

Code which specifically provides that no decree shall be

reversed in appeal on account of any misjoinder of parties

or causes of action or non-joinder of parties unless a

Court finds that the non-joinder is of a necessary party.

This is on the same principle as of Section 21 of the Code

which shows that even an objection to territorial

jurisdiction of the Court in which the suit is instituted,

could not be raised successfully for the first time in an

appeal against the decree unless the appellant is also able

to show consequent failure of justice. The Suits Valuation

Act similarly indicates that absence of pecuniary

jurisdiction in the Court that tried the cause without

objection also stands on the same footing. The

amendment to Section 24 of the Code in the year 1976

confers power on the Court even to transfer a suit filed in

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a Court having no jurisdiction, to a Court having

jurisdiction to try it. In the context of these provisions

with particular reference to the Rules in Order I and Order

II of the Code, it is clear that an objection of misjoinder of

plaintiffs or misjoinder of causes of action, is a procedural

objection and it is not a bar to the entertaining of the suit

or the trial and final disposal of the suit. The Court has

the liberty even to treat the plaint in such a case as

relating to two suits and try and dispose them off on that

basis.

14. Order VII Rule 11 (d) speaks of the suit being

"barred by any law". According to the Black's Law

Dictionary, bar means, a plea arresting a law suit or legal

claim. It means as a verb, to prevent by legal objection.

According to Ramanatha Aiyar's Law Lexicon, 'bar' is that

which obstructs entry or egress; to exclude from

consideration. It is therefore necessary to see whether a

suit bad for misjoinder of parties or of causes of action is

excluded from consideration or is barred entry for

adjudication. As pointed out already, on the scheme of

the Code, there is no such prohibition or a prevention at

the entry of a suit defective for misjoinder of parties or of

causes of action. The court is still competent to try and

decide the suit, though the court may also be competent

to tell the plaintiffs either to elect to proceed at the

instance of one of the plaintiffs or to proceed with one of

the causes of action. On the scheme of the Code of Civil

Procedure, it cannot therefore be held that a suit barred

for misjoinder of parties or of causes of action is barred by

a law, here the Code. This may be contrasted with the

failure to comply with Section 80 of the Code. In a case

not covered by sub-section (2) of Section 80, it is provided

in sub-section (1) of Section 80 that "no suit shall be

instituted". This is therefore a bar to the institution of the

suit and that is why courts have taken the view that in a

case where notice under Section 80 of the Code is

mandatory, if the averments in the plaint indicate the

absence of a notice, the plaint is liable to be rejected. For,

in that case, the entertaining of the suit would be barred

by Section 80 of the Code. The same would be the

position when a suit hit by Section 86 of the Code is filed

without pleading the obtaining of consent of the Central

Government if the suit is not for rent from a tenant. Not

only are there no words of such import in Order I or Order

II but on the other hand, Rule 9 of Order I, Rules 1 and 3

of Order I, and Rules 3 and 6 of Order II clearly suggest

that it is open to the court to proceed with the suit

notwithstanding the defect of misjoinder of parties or

misjoinder of causes of action and if the suit results in a

decision, the same could not be set aside in appeal, merely

on that ground, in view of Section 99 of the Code, unless

the conditions of Section 99 are satisfied. Therefore, by no

stretch of imagination, can a suit bad for misjoinder of

parties or misjoinder of causes of action be held to be

barred by any law within the meaning of Order VII Rule

11(d) of the Code.

15. Thus, when one considers Order VII Rule 11 of

the Code with particular reference to Clause (d), it is

difficult to say that a suit which is bad for misjoinder of

parties or misjoinder of causes of action, is a suit barred

by any law. A procedural objection to the impleading of

parties or to the joinder of causes of action or the frame of

the suit, could be successfully urged only as a procedural

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objection which may enable the Court either to permit the

continuance of the suit as it is or to direct the plaintiff or

plaintiffs to elect to proceed with a part of the suit or even

to try the causes of action joined in the suit as separate

suits.

16. It cannot be disputed that the court has power

to consolidate suits in appropriate cases. Consolidation is

a process by which two or more causes or matters are by

order of the Court combined or united and treated as one

cause or matter. The main purpose of consolidation is

therefore to save costs, time and effort and to make the

conduct of several actions more convenient by treating

them as one action. The jurisdiction to consolidate arises

where there are two or more matters or causes pending in

the court and it appears to the court that some common

question of law or fact arises in both or all the suits or

that the rights to relief claimed in the suits are in respect

of or arise out of the same transaction or series of

transactions; or that for some other reason it is desirable

to make an order consolidating the suits. (See Halsbury's

Laws of England, Volume 37, paragraph 69). If there is

power in the court to consolidate different suits on the

basis that it should be desirable to make an order

consolidating them or on the basis that some common

questions of law or fact arise for decision in them, it

cannot certainly be postulated that the trying of a suit

defective for misjoinder of parties or causes of action is

something that is barred by law. The power to consolidate

recognised in the court obviously gives rise to the position

that mere misjoinder of parties or causes of action is not

something that creates an obstruction even at the

threshold for the entertaining of the suit.

17. It is recognised that the court has wide

discretionary power to control the conduct of proceedings

where there has been a joinder of causes of action or of

parties which may embarrass or delay the trial or is

otherwise inconvenient. In that situation, the court may

exercise the power either by ordering separate trials of the

claims in respect of two or more causes of action included

in the same action or by confining the action to some of

the causes of action and excluding the others or by

ordering the plaintiff or plaintiffs to elect which cause of

action is to be proceeded with or which plaintiff should

proceed and which should not or by making such other

order as may be expedient. (See Halsbury's Laws of

England, Vol. 37, paragraph 73). Surely, when the

matter rests with the discretion of the court, it could not

be postulated that a suit suffering from such a defect is

something that is barred by law. After all, it is the

convenience of the trial that is relevant and as the Privy

Council has observed in the decision noted earlier, the

defendant may not even have an absolute right to contend

that such a suit should not be proceeded with.

18. The Division Bench has mainly relied on an

unreported decision of a learned Single Judge of the same

High Court in Margo Trading & Six others vs. Om Credit

Private Limited, a copy of which was provided for our

perusal. On going through that decision it is seen that the

learned Judge has not adverted to or considered Rule 9 of

Order I or its effect on the aspect of misjoinder of parties

and has also not given due importance to the effect of the

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other provisions in that Order. Nor has the learned judge

given due importance to the effect of the rules in Order II

and in particular to Rule 6. We find that there have been

very many decisions of the same High Court on the aspect

of misjoinder of parties or of causes of action. But it is

difficult to say that any of those decisions has taken the

view that a plaint was liable to be rejected under Order VII

Rule 11(d) of the Code on such a defect being pointed out.

On the other hand, in Harendra Nath Vs. Purna Chandra

[A.I.R. 1928 Calcutta 199] the Division Bench quoted from

Payne Vs. British Time, Recorder Co. LTd. [(1921) 2

K.B. 1], the following passage:

"Broadly speaking, where claims by or

against different parties involve or may

involve a common question of law or fact

bearing sufficient importance in proportion

to the rest of the action to render it

desirable that the whole of the matters

should be disposed of at the same time the

Court will allow the joinder of plaintiffs or

defendants, subject to its discretion as to

how the action should be tried."

and continued:

"This is a good working rule for practical

purposes and, applying it to the present

case, it seems to us clear that the action as

framed is justified by O.1, Rr.1 and 3, Civil

P.C. Looking at the matter, however, from

the point of view of O.1, R.2, we are of

opinion that the trial of the suit as laid is

likely to be somewhat embarrassing,

especially as some of the questions that will

arise so far as property A is concerned, will

have no bearing upon the claim as regards

properties B, C, D and E and also because

the question of costs, in so far as the deity

is concerned will arise, which, if possible,

must be kept separate from these which the

plaintiff will incur or be entitled to recover

in his personal capacity.

We, accordingly, set aside the orders

passed by both the Courts below and direct

that the plaint be treated as comprising two

suits: one at the instance of the plaintiff as

shebait of the deity Nandadulal Thakur in

respect of property A and the other at the

instance of the plaintiff in his personal

capacity in respect of the properties B, C,

D, and E, and the two suits be separately

tried."

The legal position in an identical situation as ours has

been considered by a learned judge of that Court in

Assembly of God Church Vs. Ivan Kapper & Anr. [2004

(4) Calcutta High Court Notes 360]. The learned judge has

held that a defect of misjoinder of parties and causes of

action is a defect that can be waived and it is not such a

one as to lead to the rejection of the plaint under Order VII

Rule 11(d) of the Code. As we see it, the said decision

reflects the correct legal position. The decision in Margo

Trading (supra) does not lay down the correct law. The

decision of this Court in Mayar (H.K.) Ltd. & Ors. Vs.

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Owners & Parties, Vessel M.V. Fortune Express & Ors.

[(2006) 3 S.C.C. 100] does not touch on this aspect and is

concerned with a case of suppression of material facts in a

plaint.

19. In the case on hand, we have also to reckon with

the fact that the suits filed by the respondent against the

respective appellants based on the transactions combined

together by the appellants, have already been withdrawn

for a joint trial with the present suit, C.S. No. 29 of 2003.

In those two suits, the nature of the transaction the

respective appellants had with the respondent have to be

decided after trial. In the present suit, the appellants are

claiming the payments which also form the basis of the

claim of the respondent against the respective appellants

in his two suits. In the present suit, C.S. No. 29 of 2003,

all that the appellants have done is to combine their

respective claims which are in the nature of counter

claims or cross suits to the suits filed by the respondent.

The ultimate question for decision in all the suits is the

nature of the transactions that was entered into by the

respondent with each of the appellants and the evidence

that has to be led, in both the suits, is regarding the

nature of the respective transactions entered into by the

respondent with each of the appellants. To a great extent,

the evidence would be common and there will be no

embarrassment if the causes of action put forward by the

appellants in the present suit are tried together especially

in the context of the two suits filed by the respondent

against them and withdrawn for a joint trial. In the case

on hand, therefore, even assuming that there was a defect

of misjoinder of causes of action in the plaint filed by the

appellants, it is not a case where convenience of trial

warrants separating of the causes of action by trying them

separately. The three suits have to be jointly tried and

since the evidence, according to us, would be common in

any event, the Division Bench was in error in directing the

appellants to elect to proceed with one of the plaintiffs and

one of the claims. We do not think that on the facts and

in the circumstances of the case one of the appellants

should be asked to file a fresh plaint so as to put forward

her claim. Even if such a plaint were to be filed, it will be

a clear case for a joint trial of that plaint with the present

suit and the two suits filed by the respondent. In any

event, therefore, the Division Bench was not correct in

interfering with the decision of the learned single judge.

The effect of withdrawal of the two suits filed by the

respondent against the appellants for a joint trial has not

been properly appreciated by the Division Bench. So, on

the facts of this case, the decision of the Division Bench is

found to be unsustainable and the course adopted by it

unwarranted.

20. We are of the view that on the facts and in the

circumstances of the case and the nature of the pleadings

in the three suits that are now before the Original Side of

the Calcutta High Court, it would be just and proper to try

them together and dispose them of in accordance with law

for which an order has already been made. A joint trial of

the three suits based on the evidence to be taken, in our

view, would be the proper course under the

circumstances.

21. We therefore allow this appeal and reversing the

decision of the Division Bench restore the decision of the

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learned single judge. We request the learned single judge

of the High Court to try and dispose off the three suits

expeditiously in accordance with law.