w w w . L a w y e r S e r v i c e s . i n

Karnataka Bank Limited, Head Office At Kankanadi, Mahaveer Circle, Mangalore v/s (1) Messrs Dasprakash Paradise, Vivekananda Road, Yadavagiri, Mysore, Represented Herein By Its Receivers Viz., K. Ramvittaldas, K. Gangaprasad; (2) K. Balkrishna Rao; (3) K. Narayana Das; (4) K. Vijaya Das; (5) K. Madhwamuni Das; (6) K. Ramavittal Das; (7) Karnataka State Industrial Investment and Development Corporation Limited (Ksiidc), Cunningham Road, Bangalore, Reprresented By Its Managing Director; (8) Canara Bank, Mysore Main Branch Road, Represented By Its Manager; (9) Syndicate Bank, K.R. Circle, Mysore, Represented By Its Manager; (10) Asha; (11) Vikram, (12) Vishwanath, (13) Madhavi, Ananthapadmanabha Ballal; (14) Kamala

Company & Directors' Information:- INDUSTRIAL INVESTMENT BANK OF INDIA LIMITED. [Under Liquidation] CIN = U65923WB1997GOI083429

Company & Directors' Information:- THE KARNATAKA BANK LIMITED [Active] CIN = L85110KA1924PLC001128

Company & Directors' Information:- KARNATAKA ROAD DEVELOPMENT CORPORATION LIMITED [Active] CIN = U45209KA1999SGC025497

Company & Directors' Information:- THE MYSORE INDUSTRIAL BANK LIMITED [Active] CIN = U65191KA1920PLC000083

Company & Directors' Information:- INDUSTRIAL DEVELOPMENT AND INVESTMENT CO PVT LTD [Active] CIN = U65990MH1941PTC003300

Company & Directors' Information:- K V DEVELOPMENT AND INVESTMENT CO PVT LTD [Active] CIN = U65922MH1979PTC021155

Company & Directors' Information:- VIKRAM INVESTMENT COMPANY LIMITED [Active] CIN = U65993WB1970PLC040749

Company & Directors' Information:- BANK OF MYSORE LIMITED [Dissolved] CIN = U99999KA1913PLC000001

Company & Directors' Information:- R N B J INVESTMENT AND DEVELOPMENT PVT LTD [Strike Off] CIN = U65990MH1982PTC028451

Company & Directors' Information:- S P INVESTMENT AND DEVELOPMENT COMPANY PVT LTD [Strike Off] CIN = U67121ML1988PTC003133

Company & Directors' Information:- PARADISE INDUSTRIAL INVESTMENT LIMITED [Strike Off] CIN = U65922UP1989PLC010449

Company & Directors' Information:- PARADISE (INDIA ) PRIVATE LIMITED [Strike Off] CIN = U52190DL1996PTC078310

Company & Directors' Information:- BANGALORE PARADISE PRIVATE LIMITED [Under Process of Striking Off] CIN = U55101DL2012PTC231135

Company & Directors' Information:- KAMALA BANK LTD [Strike Off] CIN = U65923WB1949PLC015505

Company & Directors' Information:- VIKRAM INVESTMENT CORPORATION LTD [Strike Off] CIN = U74999WB1919PLC003375

Company & Directors' Information:- KARNATAKA INDUSTRIAL PRIVATE LIMITED [Strike Off] CIN = U29222KA1974PTC002711

Company & Directors' Information:- THE BANK OF MANGALORE LIMITED [Amalgamated] CIN = U99999KA1931PLC001066

Company & Directors' Information:- THE BANGALORE SYNDICATE PRIVATE LIMITED [Strike Off] CIN = U00063KA1947PTC000510

Company & Directors' Information:- ASHA INDUSTRIAL CORPN PRIVATE LIMITED [Under Process of Striking Off] CIN = U51909GJ1960PTC000948

Company & Directors' Information:- BANK OF KARNATAKA LIMITED [Amalgamated] CIN = U99999KA1901PLC000935

Company & Directors' Information:- THE MYSORE SYNDICATE PVT LTD [Strike Off] CIN = U74110KA1952PTC000742

Company & Directors' Information:- THE MYSORE INDUSTRIAL LIMITED [Strike Off] CIN = U99999KA1928PLC000151

Company & Directors' Information:- KARNATAKA INDUSTRIAL COMPANY LIMITED [Strike Off] CIN = U33130KA1916PLC000063

Company & Directors' Information:- MYSORE INVESTMENT CORPORATION LIMITED [Strike Off] CIN = U99999KA1943PLC000331

Company & Directors' Information:- INDUSTRIAL DEVELOPMENT SYNDICATE LIMITED [Dissolved] CIN = U99999MH1942PLC007615

Company & Directors' Information:- ASHA INDUSTRIAL CORPORATION PRIVATE LIMITED [Not available for efiling] CIN = U99999MH1960PLC011640

    Ma-208/2003 (Ia-10 In Oa-479/1995-Drt, Bangalore)

    Decided On, 14 October 2004

    At, Debt Recovery Appellate Tribunal At Chennai


    P.R. Krishnan, M/s C.T. Selvam, Murtaza, Krishnamurthy, M/s Sreekrishnan Associates, P. Sreenivasulu

Judgment Text

The Order of the Court was as follows :

1. This Miscellaneous Appeal is filed by the appellant/Karnataka Bank Ltd./Defendant No.7 being aggrieved by the Order dated 22.10.2003 passed by the Learned PO of DRT, Bangalore, in IA No.10 in OA-479/1995. By the impugned Order the Ld. PO rejected the application made by the appellant Karnataka Bank/Defendant No.7 praying for transposing them as Co-plaintiff No.3 alongwith the Co-plaintiffs No.1 & 2 Canara Bank and Syndicate Bank in the OA/Suit filed by them against the defendants 1 to 6 for the purpose of enforcing their claim against the defendants. It was this application which came to be rejected by the Ld. PO by a reasoned Order dated 22.10.2003. Hence the appeal by Karnataka Bank Ltd.

2. I have heard Mr. P.R. Krishnan holding for Mr. C.T. Selvam, Advocate for the appellant Karnataka Bank Ltd. and Mr. Murtaza, Advocate for respondents No.1 to 6 and 10 to 14, Mr. Krishnamurthy, Advocate for respondent No.8 Canara Bank and Mr. P. Sreenivasulu, Advocate for respondent No.9 Syndicate Bank. I have also gone through the proceedings including the Suit proceedings filed by the original two plaintiffs namely, Canara Bank and Syndicate Bank in the Court of Civil Judge at Mysore, being Suit O.S. No.320/1993 against defendants No.1 to 6 and Others (which came to be transferred to DRT, Bangalore, subsequently upon the establishment of DRT), Written statement filed by defendant No.7 as also the Written Statements filed by other defendants, compromise petition filed by the second applicant (Syndicate Bank) and defendants No. 1 to 6, so also the objections filed by the 7th defendant to the compromise petition and the impugned Order and, in my view, the Ld. PO has not committed any error in passing the impugned Order.

3. Case of defendant No.7/present appellant Karnataka Bank Ltd. is that Original defendants No. 1 to 6 namely, M/s. Dasprakash Paradise and Others were its debtors. This averment is strongly resisted by the borrower defendants. According to the appellant Karnataka Bank, on the mortgaged security for the enforcement of which Suit was filed originally by Canara Bank and Syndicate Bank, the Karnataka Bank has first charge, that there is a pari passu agreement dated 25.6.1985, that came to be concluded between applicant No.1 Canara Bank, applicant No.2 Syndicate Bank and appellant/defendant No.7 Karnataka Bank Ltd., and another Financial Institution/Defendant No.8 on one hand and the debtors on the other. It appears that after the matter lingered in the Court for many years, applicants No.1 & 2 on the one hand and the debtors on the other hand arrived at some compromise and the compromise was filed by the parties in the DRT, Bangalore. Thus, there was end of the litigation in sight. But at this juncture, defendant No.7 objected for the compromise. The said D7 namely, Karnataka Bank Ltd., also made an application praying that the said Bank be transposed as co-plaintiff in the OA alongwith the other two plaintiffs who had already filed their OA claiming the amount lent by them to the defendants.

4. Both the original plaintiff Banks and the defendants opposed the said application made by defendant No.7/Karnataka Bank Ltd.

5. Contention of the original plaintiffs namely, Canara Bank and Syndicate Bank was that originally when they filed the Suit against the defendants, D7 Karnataka Bank Ltd., who now wants to be transposed as co-plaintiff alongwith Canara Bank and Syndicate Bank, declined to join them. The Advocates for the original plaintiffs vehemently argued that now that they have entered into compromise and are getting some money towards their claim amount, D7 cannot be allowed to be transposed as plaintiff alongwith them. It is their contention that since the claim of D7 is not included in the said OA, claim of D7 cannot be adjudicated in the same plaint as it is and that the claim of D7 is time barred.

6. Mr. Murtaza, Advocate appearing for respondents No.1 to 6 also very vehemently opposed the prayer of D7 to be transposed as co-plaintiff alongwith Canara Bank and Syndicate Bank. He has supported the impugned Order.

7. Learned Advocate Mr. P.R. Krishnan appearing for the appellant Karnataka Bank Ltd., relied upon provisions of Section-21(2) of the Limitation Act and has submitted that when the defendant has to be transposed as plaintiff, bar of limitation does not come in the way, that Sub-clause (2) of Section-21 is an exception to the general provision contained in Clause (1) of Section-21 of the Limitation Act.

8. Section-21 of the Limitation Act can be reproduced below for the sake of convenience :-

"21. Effect of substituting or adding new plaintiff or defendant -

(1) Where after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party:

PROVIDED that where the Court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith, it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.

(2) Nothing in sub-section (1) shall apply to a case where a party is added or substituted owing to assignment or devolution of any interest during the pendency of a suit or where a plaintiff is made a defendant or a defendant is made a plaintiff."

9. Advocate Mr. Murtaza appearing for respondents 1 to 6, so also Advocate Mr. Krishnamurthy appearing for respondent No.8 Canara Bank and Advocate Mr. P. Sreenivasulu appearing for respondent No.9 Syndicate Bank disputed this position and submitted that the claim of defendant No.7 was indeed time barred and that acknowledgement allegedly given by defendants on which Karnataka Bank was relying for the purpose of saving limitation was not as per the provisions of Section-18 of the Limitation Act. It is also submitted by them that defendant No.7 himself abandoned his right against defendant No.1 borrower by declining to join the applicants in the OA as co-applicant and also by not relying upon the admission made by D7 in its Written statement filed in the OA. Defendant No.1 in its Written Statement had only made a statement of fact that apart from the plaintiffs No.1 & 2 Canara Bank and Syndicate Bank, Karnataka Bank Ltd., Mysore, and Karnataka State Industrial Investment and Development Corporation Ltd. (KSIIDC) also financed the hotel project of defendant No.1. It is this averment which according to the Advocates appearing for the Canara Bank and the Syndicate Bank, so also according to the Advocate appearing for the original defendants, is not an acknowledgement within the meaning of Section-18 of the Limitation Act.

10. The reason for not joining the original plaintiffs in the OA filed by them, as given by defendant No.7 also is very curious. As per the Written statement given by Defendant No.7, the defendant No.7 has stated in para-12 as follows :-

"The pari passu agreement dated 25.6.1985 signed by defendants 2 to 6 is an acknowledgement of liability and the period of limitation for a suit for sale of the mortgaged property being 12 years a suit on the joint mortgage will not be barred by limitation till 25.6.1997. Hence the filing of the suit could have been postponed to await the constitution of the Tribunal as per the Central Act passed for the purpose of claims of Banks for recovery of dues exceeding Rs.10 lakhs on payment of a nominal court fee only and heavy expenditure of court fee of several lakhs of rupees on the suit could be avoided. However, the Plaintiffs thought otherwise and filed the suit and this defendant is consequently constrained to claim the amounts due to this defendant in this suit."

11. Thus, defendant No.7 Karnataka Bank Ltd., shirked and declined to join the plaintiffs originally when Suit was filed by them against the defendants. D7 wanted to save on Court fees and now that consent terms have been filed by and between the parties, D7 wants to be impleaded/transposed as co-plaintiff to make its claim and to get its share. Thus, now participating in the consent terms the mute question is whether this is possible and whether this is permissible. In my view, it is not for several reasons. If one looks at the Original Suit filed in the Civil Court, it will be clear that the claim made therein is only with respect to the claims of the two Banks namely, Canara Bank and Syndicate Bank. Ad valorem Court fee has been paid accordingly by these two plaintiffs with respect to their claim. Now, D7 wants to be added as plaintiff No.3 in that Suit after a long gap of more than ten years. The plaint cannot remain the same if defendant No.7's claim is also to be included therein. It will require marathon amendment. Since the Suit was filed by the respondent Banks No.8 & 9 on mortgage, the limitation period was of 12 years. Even as per the calculations of D7, the limitation period was available to D7 upto 1997. But D7 did not choose to file any independent Suit against the defendants nor at that point of time they approached the Court and made the application for transposing them from defendant to plaintiff, as they have made now. Original two plaintiff Banks and defendants have now arrived at compromise. Their claim is being settled. As far as claim of D7 is concerned, it is very much disputed by the defendants. That has to be adjudicated upon.

12. Moreover, the conduct of D7/appellant Bank herein, is absolutely blameworthy. When original plaintiffs filed their Suit to recover their monies, this third Bank namely, Karnataka Bank Ltd. declined to join them giving reason of heavy Court fees, which actually could have been shared by the three Banks. But at that time, the 7th defendant kept its tent separate. They did not prosecute their claim. They kept quiet for more than ten years. Their claim became time barred even as per their own calculations in the year 1997. Then, they suddenly woke up from their slumber and possibly tried to find out a way to come out of this situation. Therefore, this device of transposing themselves as co-plaintiff in the Suit. No explanation about why they waited for such a long time is forthcoming. Their conduct in approaching the Tribunal at this stage is questionable.

13. Defendant No.7/appellant Bank have relied upon Sub-section (2) of Section-21 of the Limitation Act. But it is to be remembered that Sub-section (2) applies to cases where claim of a person transposed as plaintiff can be sustained on the plaint as originally filed or where person remaining as plaintiff after transposition can sustain his claim against transposed defendant on the basis of plaint as originally filed. This is what the Hon'ble Supreme Court has said in the case of Mukesh Kumar & Others Vs. Col. Harbans Waraich & Ors., reported in (1999) 9 Supreme Court Cases Page-380. In the present case at hand, such is not the position. Claim of the intending plaintiff who wants to be transposed as such cannot be sustained on the plaint as originally filed by the first two plaintiffs. Therefore, the appellant Bank cannot take shelter behind Sub-section (2) of Section-21 of the Limitation Act. For application of Sub-section (2), it is necessary that the Suit as filed originally should remain the same after the transposition of the plaintiff and there should be no addition to its subject matter. By impleading D7 as plaintiff there will be an addition to the subject matter; the plaint will not remain in its original form and it may not be said that D7's claim would be sustainable as per the plaint which had been originally filed. Therefore, this contention of the appellant Bank's Advocate has to be rejected.

14. It appears that in the Written Statement filed by D7 in the Suit, some claim was made by them against the defendants. It needs to be further mentioned that as per The Karnataka Court Fees And Suits Valuation Act, 1958, no Court fee is paid upon the same. In para-16 of the said Written Statement, D7 has prayed for decree in favour of the plaintiffs (Canara Bank and Syndicate Bank) and D7 & D8 jointly for recovery of the amount due to them alongwith future interest etc. to be recovered from defendants No.1 to 6 and by sale of hypothecated plant and machinery etc The decree which is prayed is a joint decree. It is also mentioned in the last para of the said Written Statement that the original two plaintiffs had already paid the Court fee which was actually in excess and, therefore, defendant No.7's claim also be decreed alongwith defendant No.8 (KSIIDC Ltd.).

15. This is the conduct of defendant No.7. When they were asked to be joined as co-plaintiffs by the first two plaintiffs namely, Canara Bank and Syndicate Bank, D7 declined; in the Written statement, prayer is made to decree D7's claim. But no Court fee is paid giving a reason that the two plaintiffs who are the original plaintiffs had paid Court fee. Thus, without paying a single farthing towards the State revenue and though their claim is to be adjudicated because it is disputed by the defendants, D7 wants to be a party to the consent terms because original plaintiffs No.1 & 2 were able to settle their claims with the defendants. In this way, D7 wants to take all the advantage without suffering any inconvenience or loss. This is the conduct of the appellant Bank and this is the vigilance and alertness in prosecuting their claim. After remaining dormant for more than ten years, suddenly they have woken up and somehow by hook or crook they want their share in the claim, which has not been adjudicated. There is no compromise between D7 and original defendants No.1 to 6, who are the borrowers. But still D7 wants to sneak into the domain of compromise entered into by original plaintiffs with original defendants No.1 to 6.

16. In view of the aforesaid discussion, in my view, the Ld. PO of DRT, Bangalore, has not committed any error. The Ld. PO's Order, therefore, will have to be upheld and the appeal will have to be dismissed. Accordingly, following Order is passed.

17. Miscellaneous Appeal MA-208/2003 is dismissed.