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PETITIONER: UTTAM SINGH DUGAL & CO.LTD.

       Vs.

RESPONDENT: UNIED BANK OF INDIA & ORS.

DATE OF JUDGMENT:       08/08/2000

BENCH: S.R.Babu, J.Auguat, Shivaraj V. Patil

JUDGMENT:

RAJENDRA BABU, J.  :

     This  petition is filed against the judgment passed by the  High Court of Calcutta affirming a decree passed by the learned  Single  Judge  of  the  High Court  for  a  sum  of Rs.1015.50  lakhs  on  application  of  the  respondent  for judgment  upon admission as provided under Order XII, Rule 6 of  the  Code of Civil Procedure.  The facts leading to  the suit are as follows:

     Transorient  Engineering  Company Ltd.   subcontracted construction  of  students dormitories/dining hall for  the University  of  Baghdad,  Iraq.   Respondent Nos.   1  to  3 functioned  as  consortium  to  finance  the  said  project. Certain  disputes  having  arisen   petitioner  filed  suits against  the  respondent  Banks that the debits  raised  are illegal  etc.   Indian Overseas Bank (IOB) filed a suit  for recovery  of  certain sums of money and an application  made therein  under Chapter XIII-A of the Original Side Rules and the High Court of Calcutta rejected the same and Respondents 1  and  3  Banks  and E.C.G.C.  were also  impleaded  by  an amendment  in  the said suit.  Respondent No.1 filed a  suit for  recovery  of  certain sum of money with  certain  other reliefs  and  in  that suit, application for  judgment  upon admission  was allowed.  Appeal thereon being  unsuccessful, this petition is filed.

     The  application  filed  by  Ist  respondent-Bank  for judgment  on admission covers only a part of the suit claim. The Ist respondent-Bank relied upon (I) Balance Sheet of the petitioner  for year ending 31st March, 1989 with  reference to  Schedules C, D and E;  (ii) Minutes of the meeting of  Board of Directors held on 30th May, 1990 which  noticed the  discussion  at  the meeting and issues  that  could  be deemed to have been settled as result thereof.  (iii) letter dated  4th  June,  1990  communicating  the  resolution  and minutes of the meeting of the Board of Directors held on May 30,  1990.  In the said minutes in the meeting held on  30th May,  1990,  it was mentioned as follows:- IT WAS  RESOLVED THAT :

     In   consideration  of  the   United  Bank  of  India, Connaught  Circus  Branch, New Delhi, having agreed  to  the continuation  of the previously sanctioned aggregate  credit limits  amounting to Rs.17.45 crores and in consideration of

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the  Bank  having  agreed to continue the operation  of  the various  borrowing accounts with outstanding dues, as stated hereinbelow  in detail, the Company agrees to duly execute a fresh  set  of  documents  as required  by  the  Bank  there against.

     That Mr.  Harcharan Singh Dugal, the Managing Director of  the  Company be and is hereby authorised to execute  the said  documents  and  the official seal of  the  Company  be affixed thereon.

     It  is  also  resolved that the Company  disputes  the amount  of Rs.3,08,01,000 debited to its Cash Credit Account on   01.08.89   which   along   with  interest   stands   at Rs.3,60,62,579 as on 31.03.90.

     That  the company accepts its liability as per details stated hereinbelow:

     Natures  Present Sanctioned Amount Due (Rs.  In lakhs) (Rs.  In lakhs)

     Cash  Limit/OD  65.00 101.16 Inland  Guarantee  401.31 23.18  Baghdad  Guarantee  1082.60 793.73  Jordan  Guarantee 209.30  101.85  Term  Loan 5.00 Nil Loan Account  Nil  16.88 --------- ---------- 1745.07 1036.80 ======= =======

     That,  also due to fluctuations in Exchange Rate there has  been  difference in amount due under  Jordan  Guarantee amounting  to  about Rs.21 lakhs which is not  reflected  in details shown above.

     A  copy  of the aforesaid resolution was sent  to  the plaintiff with the following note as indicated in the letter dated 4th June, 1990:  a) We do not confirm the debit entry of  Rs.3,60,62,579/- representing your share of the  invoked guarantee with interest upto 31.3.90 which has been effected by  you  unauthorisedly against the illegal payment made  by the  Indian  Overseas Bank.  We are enclosing a copy of  the reply  given  to the Legal Notice received by us from  them. The  reply is self-explanatory.  You will agree that  before effecting  the  said  payment  consisting of  such  a  large amount, a reference ought to have been made to us.

     b)  The  loan account of Janpath Branch  amounting  to Rs.4,03,820  is not accepted and is totally denied.  We have repaid  your  Janpath  Branch the Convertible was  loan  for Baghdad  along  with  interest in full.  The debit  in  your ledger is on account of the Janpath Branch not giving effect to the reduced interest rate as directed by the Reserve Bank of  India.  At their request a copy of the RBI circular  was given to them and had also been sent to you.

     c)  That  fresh  documents are  executed  against  the consideration  of  permitting us to operate  the  sanctioned limits  there  against  as they stand.  The debit  entry  of Rs.3,60,62,579 and entries for interest thereon will have no bearing  on the actual amount due as confirmed by us in  our Board Resolution.

     d)  Almost  two  years ago an  unofficial  freeze  was imposed  on  our Inland Guarantee limits for  reasons  never communicated  to us.  Thus, you had denied fresh  Guarantees for  Bid  Bonds  etc.   to  tender for  new  works  and  the

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companys  huge fleet of Construction equipments and trained personnel  perforce thereby remained idle since the last one and a half year.

     The  petitioners  filed an affidavit-in-opposition  to contend  that:  1.  That the defendant No.1s suit is barred by  limitation;   2.  That the resolution dated 30.5.90  was passed  subject  to  a condition that the  inland  guarantee limit  would  be resumed and that as the condition  was  not fulfilled,  the  resolution  was no binding;  3.   That  the defendant  No.1s suit was liable to be stayed under Section 10  CPC  because  the matter in issue in the suit  was  also directly  and  substantially in issue in the previous  suits filed  by others 4.  That the suit of the defendant No.1  is bad for misjoinder of parties.

     The  defendants  further  contended that,  insofar  as resolution  dated  30.5.90 and a letter dated  4.6.1990  are concerned,  they are to the effect that they are matters  of record  and  save what are matters of record and  save  what would appear from the letter dated 30.5.1990 all allegations to   the   contrary  are  disputed   and  denied.    It   is categorically   denied  that  there  is  any  admission   of liability  by the first respondent to the Petitioner to  the extent  of  Rs.10,15,80,090  as on 30th March 1990  or  that since  the said alleged admission of the liability the claim of  the  Petitioner  has increased and it is now  more  than Rs.24 crores, as wrongly alleged, if at all.

     At  the  time of hearing it appears it was  contended: 1.   that  the  amount  claimed by the  plaintiff  from  the defendants  was part of the consortium agreement under which the  Indian Overseas Bank, United Bank of India and the EXIM Bank  agreed  to  advance money to defendant No.  1  in  the proportion  of 50:25:25.  It was stated that Indian Overseas Bank has filed a suit against the defendants for recovery of all  the amounts advanced by the consortium to the defendant No.1  and that suit was still pending, therefore, they  were estopped  from  filing that suit and making  an  independent claim  against  the  defendant No.1.  2.  That in  the  suit filed  by Indian Overseas Bank an application had been moved by the Indian Overseas Bank for final judgment under Chapter XIII-A  on the basis of the same documents which were sought to  be  relied upon by the plaintiff.  The trial  judge  had rejected  the  same.   3.   That   payments  had  been  made subsequent  to  the admission and loan was recalled only  in 1993 just prior to the filing of the suit.  4.  That several claims  have  been included in the suit in respect of  which another  suit  has been filed in the Madras High Court  and, therefore, the amount could not be recovered.  5.  The claim of  the  plaintiff had been covered by a  counter  guarantee issued  by  the Export Credit Guarantee Corporation and  the extent  of payment made by it to the plaintiff and the  suit was  for  the  reason not maintainable at  the  instance  of defendant  No.  1.  6.  That the defendants in the suit  had filed  a  separate suit in which he had claimed for  certain reliefs  which would nullify the claim made by the plaintiff in the suit.

     The  learned  trial  judge  found  that  there  is  an unequivocal  admission of the contents of the documents  and what  is denied is the extent of admission and the  increase of the liability admitted.  The learned trial judge took the view  that  the pre-requisites of Order XII, rule 6 CPC  had

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been  satisfied in this case and that on a plain reading  of the  resolution of the Board dated 30.5.90 there could be no doubt  that the Petitioner had made a clear, unambiguous and unconditional  acknowledgement of its liability to the Bank. The language of the resolution would show that the extent of the admission in the resolution is for Rs.10,15,80,000/-, if not  for Rs.10,36.80 lakhs.  The figure of Rs.1015.80  lakhs is  firm  admission  being  the   figure  arrived  at  after deducting Rs.21 lakhs claimed by the defendants by reason of fluctuation  of  the exchange rate and that was  the  amount claimed  by the Petitioner in the suit.  This admission made in  the course of the Board of Directors resolution had not been    explained    by     the      Petitioner    in    the affidavit-in-opposition but on the other hand had reiterated the  same.  The arguments raised before the trial court were considered  to  be contrary to the pleadings raised  in  the case.  Therefore, the application was allowed.

     On appeal, the Division Bench noticed these very facts and  also  noted  that  discrepancy,  if  any,  between  the appellants  particulars  and the particulars in respect  of which  a  judgment was sought on admission was not made  the subject-matter  of  challenge  either in  the  affidavit-in- opposition  before  the  trial  Judge or  in  the  arguments thereof  and characterized the same as a point of accounting discrepancy which could not be raised at the stage of appeal and dismissed the same.

     Learned Counsel for the appellant contended that Order XII  Rule  6  comes  under the heading  admissions  and  a judgment  on  admission  could  be   given  only  after  due opportunity  to the other side to explain the admission,  if any,  made;  that such admission should have been made  only in  the course of the pleadings or else the other side  will not  have  an opportunity to explain such  admission;   that even  though, the provision reads that the court may at  any stage of the suit make such order as it thinks fit effect of admission,  if  any, can be considered only at the  time  of trial;  that the admission even in pleadings will have to be read  along with order VIII Rule 5(1) of CPC and Court  need not  necessarily  proceed to pass an order or a judgment  on the  basis of such admission but call upon the party relying upon  such admission to prove its case independently;   that during pendency of other suits and the nature of contentions raised  in  the case, it would not be permissible at all  to grant  the  relief  before  trial as has been  done  in  the present  case;  that the expression admissions made in the course  of  the pleadings or otherwise will have to be  read together  and  the  expression otherwise will have  to  be interpreted ejusdem generis.

     As  to the object of the Order XII Rule 6, we need not say  anything more than what the legislature itself has said when  the said provision came to be amended.  In the objects and  reasons  set  out while amending the said rule,  it  is stated  that  where  a  claim is admitted,  the  court  has jurisdiction  to  enter a judgment for the plaintiff and  to pass  a decree on admitted claim.  The object of the Rule is to  enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of  the defendant, the plaintiff is entitled. We should not unduly narrow down the meaning of this Rule as the object is to  enable  a party to obtain speedy judgment.  Where  other party  has  made a plain admission entitling the  former  to succeed,  it should apply and also wherever there is a clear

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admission  of  facts in the face of which, it is  impossible for the party making such admission to succeed.

     The  next contention convassed is that the resolutions or  minutes of meeting of the Board of Directors, resolution passed thereon and the letter sending the said resolution to the  respondent  bank  cannot amount to a pleading  or  come within the scope of the Rule as such statements are not made in  the  course  of  the pleadings  or  otherwise.   When  a statement  is made to a party and such statement is  brought before  the  Court  showing  admission of  liability  by  an application  filed under Order XII Rule 6 and the other side has sufficient opportunity to explain the said admission and if  such explanation is not accepted by the Court, we do not think  the  trial  court is helpless in refusing to  pass  a decree.   We have adverted to the basis of the claim and the manner  in  which the trial court has dealt with  the  same. When  the trial judge states that the statement made in  the proceedings of the Board of Directors meeting and the letter sent  as well as the pleadings when read together, leads  to unambiguous  and  clear  admission with only the  extent  to which  the  admission is made is in dispute.  And the  court had  a duty to decide the same and grant a decree.  We think this approach is unexceptionable.

     Before  the  trial judge, there was no  pleading  much less  an  explanation as to the circumstances in  which  the said  admission  was  made,  so as to take  it  out  of  the category  of  admissions which created a liability.  On  the other  hand, what is stated in the course of the  pleadings, in  answer  to the application filed under Order XII Rule  6 CPC,  the stand is clearly to the contrary.  Statements  had been  made  in  the course of the Minutes of  the  Board  of Directors  held  on 30th May, 1990 to which we have  already adverted  to in detail.  In the pleadings raised before  the Court,  there is a clear statement made by the respondent as to the undisputed part of the claim made by them.  In regard to  this  aspect of communicating the resolution dated  30th May,  1990 in the letter dated 4th June, 1990 what is stated in the affidavit-in-oppostion in application under Order XII Rule 6 CPC is save, what are matters on record and save what would  appear  from  the  letter dated 30th  May,  1990  all allegations  to the contrary are disputed and denied.   This averment  would  clearly mean that the petitioner  does  not deny  a word of what was recorded therein and what is denied is  the  allegation to the contrary.  The denial is  evasive and the learned judge is perfectly justified in holding that there  is  an unequivocal admission of the contents  of  the documents  and what is denied is extent of the admission but the increase in the liability is admitted.

     Even  without referring to the expression  otherwise in  Rule 6 of Order XII CPC, we can draw an inference in the present  case  on the basis of the pleadings raised  in  the case  in  the shape of the applications under that Rule  and the  answering  affidavit  which   clearly  reiterates   the admission.   If that is so, interpretation of the expression otherwise becomes unnecessary.

     The  learned  counsel  for the appellant relied  on  a decision  of  this  Court  in Nagubai  Ammal  &  Others  Vs. B.Shama  Rao  &  Others,  1956  S.C.R.451,  as  to  when  an admission  becomes relevant.  In Nagubai Ammal (supra) which is locus classicus on the subject states that merely because a  written  admission  made  in a  different  context,  such

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admission may not become relevant if the party making it has a  reasonable  explanation  of that.  But that  is  not  the position  in  the present case at all.  Learned counsel  for the  appellant  further adverted to the decision  in  Balraj Taneja  & Anr.  Vs.  Sunil Madan and Anr., 1999 (8) SCC  396 in  which the court was concerned with a case of the  effect of not filing a written statement and whether a decree could be  passed only on that basis.  That was a suit for specific performance  and it was held it could not be granted without even  writing  a detailed judgment and adverted  to  various provisions of Code of Civil Procedure and reference was made to  Order  XII Rule 6 by way of analogy and referred to  the dictum  in  Razia Begum V.  Sahebzadi Anwar Begum, 1959  SCR 111,  to  state that Order XII Rule 6 should be  read  along with  proviso to Rule 5 of Order 8 CPC.  In that case,  what was  noticed  was that in cases governed by Section  42  and Section  43  of Specific Relief Act, 1877, the court is  not bound  to grant declaration prayed for on the mere admission of  the  claim by the defendant if the court has  reason  to insist  upon a clear proof apart from admission.  The result of  a  declaratory  decree confers status not  only  on  the parties  but  for  generations to come and so it  cannot  be granted  on  a rule of admissions and,  therefore,  insisted upon  adducing evidence independent of the admission.   That is  not the position in the present case at all.  We fail to see  how this decision can be of any use to the  petitioner. The  decision in re Pandam Tea Co.  Ltd., AIR 1974  Calcutta 170 pertains to the manner in which the balance sheet should be  read  and has no bearing on the case.  The  decision  in Shikharchand  &  Ors.   vs.   Mst.  Bari Bai  &  Ors.,  1974 M.P.75,  is  to the effect that the Rule is wide  enough  to afford  relief not only in cases of admissions in  pleadings but  also in the case of admission de hors pleadings.  State Bank  of India vs.  M/s Midland Industries & Ors., AIR  1988 Delhi  153,  and Union of India vs.  M/s Feroze &  Co.,  AIR 1962 J & K 66 cannot have any relevance because the facts in arising cases and the present case are entirely different.

     Learned  counsel  for  the Petitioner  contended  that admissions referred to in Order XII, Rule 6 CPC should be of the  same  nature as other admissions referred to  in  other rule preceding this Rule.  Admissions generally arise when a statement  is  made by a party in any of the modes  provided under  Sections  18  to  23  of  the  Evidence  Act,   1872. Admissions  are  of many kinds :  they may be considered  as being  on  the  record as actual if that is  either  in  the pleadings  or  in answer to interrogatories or implied  from the pleadings by non-traversal.  Secondly as between parties by  agreement  or  notice.  Since we  have  considered  that admission  for  passing the judgment is based  on  pleadings itself  it  is  unnecessary to examine as to what  kinds  of admissions are covered by Order XII, Rule 6 CPC.

     We  are  not  impressed  with the  contention  of  the learned counsel for the appellant that there is no admission for  the  purpose of Order XII Rule 6 at all, nor  that  the admission  if any is conditional because we cannot spell out any   conditions  stated  therein   nor  the  dismissal   of application  filed  by Indian Overseas Bank in the suit  has any relevance.  Therefore, we are of the view that this case deserves  to be dismissed with advocates fees quantified at Rs.  10,000/-.

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