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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.