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Kerala State Electricity Board, Vydhyuthi Bhavanam, Pattom, Represented by Its Secretary & Another v/s M/s. C.K. Thomas & Co., Kollam, Represented by Its Duly Constituted Power of Attorney holder, Cinu.P. Thomas & Others

    IA. No. 4 of 2021 In RFA. No. 105 of 2019

    Decided On, 10 February 2022

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE ANIL K. NARENDRAN & THE HONOURABLE MR. JUSTICE P.G. AJITHKUMAR

    For the Applicants: M/s. T. Krishnanunni (Senior) along with Vinod Ravindranath, A. Meena, M.R. Mini, Ashwin Sathyanath, Rohit Nandakumar, Advocates. For the Respondents: M/s. V. Ajakumar & Sidharth A. Menon, Advocates.



Judgment Text

Ajithkumar, J.

1. This is an application filed by the applicants-appellants under Order I, Rule 10(1) of the Code of Civil Procedure, 1908 for substitution of appellant No.1, the Kerala State Electricity Board, Vydyuthi Bhavanam, Pattom, PIN–695004, Thiruvananthapuram, represented by its Secretary' by 'the Kerala State Electricity Board Ltd., Vyddyuthi Bhavanam, Pattom, PIN– 695004, Thiruvananthapuram, represented by Secretary (Administration)'.

2. The applicants-appellants would contend that by virtue of G.O.(Ms) No.37/2008/PD dated 25.09.2008, the functions, properties, interests, rights, obligations and liabilities of the Kerala State Electricity Board were vested with the State Government and subsequently by a re-vesting Scheme promulgated by G.O.(P) No.46/2013/PD dated 31.10.2013, the functions, properties, interests, rights, obligations and liabilities of the erstwhile Kerala State Electricity Board, which stood vested with the Government of Kerala have been re-vested with the Kerala State Electricity Board Ltd.

3. The respondent filed the suit, O.S.No.102 of 2015 before the I Additional Sub Judge, Thiruvananthapuram, against the Kerala State Electricity Board and others and, the decree in the suit is under challenge in this appeal. The Electricity Board along with the 2nd appellant, preferred this appeal. In view of the re-vesting of functions properties, interests, rights, obligations and liabilities of the Kerala State Electricity Board, with the Kerala State Electricity Board Ltd., the appellants contends, it is peremptory that the substitution as prayed for is allowed.

4. The respondent-company filed a counter affidavit, through its Managing Partner. He contended that the application is not maintainable. The respondent points out that in view of paragraph 8 in G.O.(P) No.46/2013/PD dated 31.10.2013, the suits and proceedings pending as on the said G.O. alone could be continued. Since Kerala State Electricity Board was not in existence on the date of filing of this appeal, the substitution as sought cannot be allowed. If allowed, it will have the effect of bringing a new party in the place of a nonexistent establishment on the date of filing of the appeal, which is a process not known to law. Accordingly, the respondent seeks to dismiss the application.

5. Heard the learned counsel appearing for the applicants-appellants and the learned counsel appearing for the respondent.

6. On a perusal of Annexure I, which is a copy of G.O. (P) No.46/2013/PD dated 31.10.2013, it can be seen that the functions, properties, interests, rights, obligations and liabilities of the Kerala State Electricity Board were first vested with the Government of Kerala in escrow and later re-vested with the Kerala State Electricity Board Ltd. on its creation. The process was enabled under the provisions of the Electricity Act, 2013. Paragraph Nos.7 and 8 of Annexure I read thus,

'7. Rights and obligations of third parties restricted.-

Upon the transfer being effected in accordance with the provisions of the Act and this Scheme, the rights and obligations of all persons shall be restricted to the Transferee. In case anything contrary to the above is found contained in any deed, documents, instruments, agreements or arrangements which such person has with the Government or Kerala State Electricity Board/Board, the same will continue as such, and the third party shall not claim any rights or interest against the State Government or erstwhile Kerala State Electricity Board/Board, except those contained in such deed, documents, instruments, agreements, arrangements, etc.

8. Pending suits, proceedings, etc.- (1) All proceedings of whatever nature by or against the erstwhile Board or the Kerala State Electricity Board pending on the date of the transfer shall not abate or discontinue or otherwise in any way prejudicially affected by reason of the transfer under this Scheme and the proceedings shall be continued, prosecuted and enforced by or against the Transferee;

(2) The proceedings covered under sub-clause (1) above shall be continued in the same manner and to the same extent as it would or might have been continued, prosecuted and enforced by or against the erstwhile Board or Kerala State Electricity Board as if the transfer specified in this Scheme had not been made.'

7. Paragraph No.7 in Annexure I implies that all existing rights and liabilities of all persons are restricted to the transferee. 'Transferee' is defined in Clause (u) of Paragraph No.2 in Annexure I as 'the Kerala State Electricity Board Limited'. When the respondent claims that money is due from the Kerala State Electricity Board as per the decree impugned in this appeal, by operation of paragraph No.7 in Annexure I, the claim necessarily binds the transferee, i.e., the Kerala State Electricity Board Ltd.

8. The learned counsel appearing for the petitioner relying on Bal Niketan Nursery School v. Kesari Prasad [AIR 1987 SC 1970] and Premier Poly Processors L.L.P. v. LRs.of Modi Lal and others [AIR 2020 Rajasthan 191] contended that the Kerala State Electricity Board Ltd. came into being as a successor in interest of the 1st appellant and the substitution is only an obvious corollary and liable to be allowed.

9. The learned counsel appearing for the respondents, on the other hand, would contend that pending proceedings alone are saved as per paragraph No.8 in Annexure I and, therefore, the present appeal is not saved. It is further contended that as on the date of filing of the appeal, the 1st appellant did not exist and such a non-existent entity cannot be substituted for, a proceedings in respect of a dead person is a nullity. In the light of the provisions of Section 21 of the Limitation Act, the appeal filed in the name of a non-existent establishment cannot be made legal by a substitution. The appeal would get barred by the law of limitation. The learned counsel placed reliance in Joginer Singh and others v. Krishnan Lal and others [1977 (1) P&H 181] and Ramprasad Dagaduram v. Vijayakumar Motilal Hirakhanwala and others [AIR 1967 SC 278] to fortify his contentions.

10. Section 21 of the Limitation Act contemplates that if a plaintiff or defendant is added or substituted, the suit as regards him shall be deemed to have been instituted when he was so made a party. The said provision applies only when a new party is added or substituted. Sub-section (2) of Section 21 reads:

'(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.'

11. In Ramprasad Dagaduram (supra) a suit for redemption of mortgage was instituted by the plaintiff claiming him to be the adopted son of the deceased mortgagor. On finding that he had no right, children of the deceased mortgagor got impleaded; one as plaintiff on substitution and two other children as additional defendants. In that factual situation the Apex Court held that the substitution and addition of totally new party under the provisions of Order I Rule 10 of the Code attracts the mischief of Section 21 of the Limitation Act, 1963 (Section 22 of the Limitation Act, 1908).

12. From Annexure I it is quite clear that the Kerala State Electricity Board Ltd. is the successor establishment to which all functions, properties, interests, rights, obligations and liabilities of the Kerala State Electricity Board stand vested. Therefore, the substitution here is, on account of devolution of interest to the successor organization and cannot have the effect of adding a new party. This is a situation covered by subsection (2) of Section 21 of the Limitation Act and the decision in Ramprasad Dagaduram (supra) can have no application. Therefore, the contention of the learned counsel for the respondent in that regard is untenable.

13. It is next contended that the Kerala State Electricity Board was not in existence on the date it had filed this appeal and as the appeal being a new proceedings, it is not maintainable. Therefore, in such an appeal, substitution is also not possible.

14. The suit was filed in 2005. But the decree was passed only in 2018. The Kerala State Electricity Board ceased to exist on 31.10.2013. However, retaining the Board as a defendant the respondent obtained the decree. If the contention of the learned Counsel for the respondent is accepted, the decree becomes one against a dead person and hence a nullity.

15. In Saila Bala Dassi v. Nirmala Sundari Dassi [AIR 1958 SC 394] the Apex Court has considered the right to continue an appeal by a successor in interest who was not a party to the suit. It was held that the right to file an appeal carried with it the right to continue an appeal which had been filed by the person under whom the appellant claimed and on this basis a purchaser from the appellant under a purchase made prior to the appeal was brought on the record of the appeal. Paragraph 7 in the judgment reads thus,

'7. It is contended on behalf of the appellant that her application is maintainable under Order XXII, Rule 10 of the Civil Procedure Code, because Suit No.158 of 1935 must be considered to have been pending until the decree therein was drawn up which was in 1954, and the transfer in her favour had been made prior thereto on May 12, 1952. The decision in Lakshan Chunder Dey v. Nikunjamoni Dassi [(1923) 27 CWN 755] is relied on, in support of this position. But it is contended for the first respondent that even if Suit No.158 of 1935 is considered as pending when the transfer in favour of the appellant was made, that would not affect the result as no application had been made by her to be brought on record in the original court during the pendency of the suit. Nor could the application made to the appellate court be sustained under Order XXII, Rule 10, as the transfer in favour of the appellant was made prior to the filing of that appeal and not during its pendency. This contention appears to be well-founded; but that, however, does not conclude the matter. In our opinion, the application filed by the appellant falls within Section 146 of the Civil Procedure Code, and she is entitled to be brought on record under that section. Section 146 provides that save as otherwise provided by the Code, any proceeding which can be taken by a person may also be taken by any person claiming under him. It has been held in Sitharamaswami v. Lakshmi Narasimha [(1918) ILR 41 Mad 510] that an appeal is a proceeding for the purpose of this section, and that further the expression “claiming under” is wide enough to include cases of devolution and assignment mentioned in Order XXII, Rule 10. This decision was quoted with approval by this Court in Jugal kishore Saraf v. Raw Cotton Co. Ltd. [(1955) 1 SCR 1369] wherein it was held that a transferee of a debt on which a suit was pending was entitled to execute the decree which was subsequently passed therein, under Section 146 of the Civil Procedure Code as a person claiming under the decree-holder, even though an application for execution by him would not lie under Order XXI, Rule 16, and it was further observed that the words “save as otherwise provided” only barred proceedings, which would be obnoxious to some provision of the Code. It would follow from the above authorities that whoever is entitled to be but has not been brought on record under Order XXI, Rule 10 in a pending suit or proceeding would be entitled to prefer an appeal against the decree or order passed therein if his assignor could have filed such an appeal, there being no prohibition against it in the Code.'

16. The Apex Court in Bal Niketan Nursery School (supra) has considered the question as to when can a court allow substitution of a party under Order 1 Rule 10 of the Code in order to set right matters and to promote the cause of justice. It was held,

'13. xx xx Order 1 Rule 10 has been expressly provided in the Civil Procedure Code to meet with such situations so that the rendering of justice is not hampered. The Rule provides that if a suit has been instituted in the name of a wrong person as plaintiff or if there is a doubt as to whether the suit has been instituted in the name of the right plaintiff the court may, at any stage of the suit, if it is satisfied that the suit has been instituted due to a bona fide mistake and that is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as the court thinks just. The scope and effect of Order 1 Rule 10 has been considered in numerous cases and there is a plethora of decisions laying down the ratio that if the court is satisfied that a bona fide mistake has occurred in the filing of the suit in the name of the wrong person then the court should set right matters in exercise of its powers under Order 1 Rule 10 and promote the cause of justice. The courts have gone so far as to hold that even if the suit had been instituted in the name of a person who had no competence to file the suit, the courts should set right matters by ordering the addition or substitution of the proper plaintiff for ensuring the due dispensation of justice.'

17. We may refer to the view taken by a single Judge of the Rajasthan High Court in Premier Poly Processors L.L.P. (supra), in the context of a similar issue. In that decision, it was held that if the name of a party, as exists in the cause title, is not obliterated and the same is continued to be reflected, it will be like keeping a dead person's name in the cause title. A company's name which ceased to exist cannot be reflected in the cause title. When by operation of law, a company ceases to exist and in its place, a new entity has come into existence, there shall be a substitution.

18. Joginer Singh and others (supra) was placed reliance on by the learned counsel for the respondents to canvass the position that if a party to a suit or appeal died before institution, there cannot be substitution of his legal representatives in his place. This decision has no relevance in this case in view of the above mentioned legal principles.

19. In Jai Jai Ram Manohar Lal v. National Building Material Supply, Gurgaon [AIR 1969 SC 1267] t

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he question was, can an amendment to substitute the name of a non-existent party happened to be shown by mistake in the cause title of the suit be substituted with actual name. The observation of the Apex Court, while answering the question in the affirmative, is a guide in the instant case. It was held, 'Rules of procedure are intended to be a handmaid to the administration of justice. A party cannot be refused just relief merely because of some mistake, negligence, inadvertence or even infraction of the rules of procedure. The Court always gives leave to amend the pleading of a party, unless it is satisfied that the party applying was acting mala fide, or that by his blunder, he had caused injury to his opponent which may not be compensated for by an order of costs. However negligent or careless may have been the first omission, and, however late the proposed amendment, the amendment may be allowed if it can be made without injustice to the other side.' 20. Viewed in the light of the above principles of law, the conclusion is irresistible that the substitution as prayed for is liable to be allowed. The application is accordingly allowed. The 1st appellant 'the Kerala State Electricity Board, Vydyuthi Bhavanam, Pattom, PIN–695004, Thiruvananthapuram, represented by its Secretary' shall stand substituted by 'the Kerala State Electricity Board Ltd., Vyddyuthi Bhavanam, 10-02-2022 /True Copy/ Assistant Registrar Pattom, PIN– 695004, Thiruvananthapuram, represented by Secretary (Administration)'. Registry to carry out necessary correction in the cause title.
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