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CASE NO.: Appeal (civil)  8505 of 2001

PETITIONER: Scotts Engineering, Bangalore

RESPONDENT: Rajesh P. Surana & Ors

DATE OF JUDGMENT: 26/02/2008

BENCH: H.K. SEMA & MARKANDEY KATJU

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO.8505 OF 2001 WITH C.A.No.8506 of 2001 and C.A.No.8507 of 2001.   

H.K. SEMA,J  

1.              This appeal is preferred by defendant No.6 against  the judgment and order dated 25.4.2001 passed by the High  Court of Madras in O.S.A.Nos.131 of 1998 and 55 of 1999. 2.              We have heard the parties.  3.              The facts are cumbersome.  We may, however,  briefly refer to few facts for the purpose of disposal of this  appeal. 4.              A ship vessel M.V. Sagar owned by respondent No.1  was swept and washed ashore and grounded offshore near  Madras Fishing Harbour as a result of several cyclonic storms.   All efforts of respondent No.2 herein to refloat the vessel failed,  it was abandoned and became a wreck. Since the crew and  Master of the vessel were not paid their wages, they filed an  admiralty suit in the Madras High Court being C.S.No.57 of  1995.  The Court ordered the arrest of the vessel.  Respondent  No.2 through their agent respondent nos. 3 and 6 entered into  a negotiation with the appellant for sale of the ship and finally  entered into a Memorandum of Agreement counter-signed by  defendant No.5 who was the owner’s representative under  which the appellant was required to pay a sum of Rs.75 lacs  forthwith and balance consideration amount of Rs.1.50 crores  was to be paid by 28.4.1995.  On 18.4.1995 the appellant paid  a sum of Rs.75 lacs and, therefore, he filed an application  no.2136 of 1995 arising out of C.S.No.57 of 1995 seeking leave  to intervene in the matter as he had already purchased the  vessel and also made the payment.  The prayer was allowed.   After the crew and Master of the said vessel were paid their  wages, the suit was dismissed on satisfaction and the order of  arrest was vacated.  However, before the appellant could  perform his part of the contract and pay the balance  consideration amount of Rs.1.50 crores in terms of  Memorandum of Agreement dated 17.4.1995 it appears  another suit was instituted in the High Court being  O.A.No.491 of 1995.  The High Court has restrained the owner  and its agent from alienating or encumbering the said vessel  in any manner to a third party.  Therefore, the appellant was  unable to perform his part of contract and could not pay the  remaining consideration amount of Rs.1.50 crores to the  owner.  

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5.              In the interregnum, many orders were passed and it  has come to this Court several times, with which we are not  really concerned.   6.              Suffice it to say that the real controversy relates to  the decree dated 8.6.1998 passed by the Single Judge of the  Madras High Court in C.S.No.1151 of 1995.  In the said suit  the appellant-defendant No.6 was not arrayed as a party.   However, on being application filed by the appellant, he was  added as defendant No.6.  It is not disputed that the decree  was passed after impleading the appellant-defendant No.6 as a  party respondent.   The operative portion of the decree reads  as under:- "In the result, the plaintiff is given a decree for  a sum of Rupees Ninety Five lakhs with 24%  per annum from 04.07.1995 till payment and  also the proportionate costs and the decree is  granted against the defendants 1 to 5."

7.              The Division Bench of the High Court having  noticed in paragraph 8 of the judgment that the 6th defendant  became a party to the suit instituted by the plaintiff on his  own initiative and even after he was added as a party, the  plaintiff did not claim any relief against the 6th defendant.  The  High Court also noticed the suit as originally framed only  against defendants 1 to 5 who were the owners of the vessel,  the local agent of the owner, the managing Director of the  company which owned the vessel and has its registered office  at Bangladesh.  The High Court also noticed that the prayer  made by the plaintiff in the suit was for a joint and several  decree against defendants 1 to 5 for the payment of Rs.122  lakhs which the plaintiff claimed to be due to him.  Having  recorded such a finding the High Court reversed the decree  passed by the Single Judge. 8.              It is in these circumstances contended by Dr.Rajeev  Dhawan, learned senior counsel for the appellant that there  was no privity of contract within the plaintiff and defendant  no.6 and the decree was not against defendant no.6 \026  appellant herein.   He further submitted that the Court cannot  go behind the decree and the Division Bench was in error in  reversing the findings of the learned Single Judge.  9.              We are of the view that the contention of Dr.  Dhawan has substance.  The suit filed by the plaintiff  originally was against defendants 1 to 5.  The appellant  became a party to the suit instituted by the plaintiff- respondent herein on his own initiative.  Even after the  appellant was arrayed as defendant no.6 the plaintiff did not  care to amend the plaint except making the appellant as  defendant no.6.  No relief was claimed against defendant no.6.   In fact the relief prayed for in the suit was against defendants  1 to 5 jointly and severally.  The learned Single Judge passed  the decree against defendants 1 to 5.  These are all undisputed  facts.  10.             Mr.A.T.M. Sampath learned counsel appearing for  the plaintiff-respondents referred to the orders passed by this  Court dated 13.9.1996 and 2.12.1996 where this Court,  amongst others, directed the appellant to deposit the security.   The aforesaid orders passed by this Court were interim orders  with regard to security deposit sought to be imposed on the  appellant so as to make him a surety for the suit amount.  The  suit was finally decreed.  We are not concerned with the  interim directions passed by this Court.  11.             For the reasons aforestated we are of the view that  the Division Bench was not justified in holding that the sum of

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Rs.1 crore should be paid over to the plaintiff to the extent to  which the decree has remained unsatisfied.    This appeal is,  accordingly, allowed.  The order of the High Court is set aside.   The Decree of Single Judge is restored.  No costs.  

C.A.No.8506 of 2001 and C.A.No.8507 of 2001.

12.             In view of the order passed in C.A.No.8505 of 2001,  these appeals filed by the plaintiff, are devoid of merits and  are, accordingly, dismissed.  No costs.