Tag Archives: Civil Dispute

Party Sought to be Impleaded – Must Have a Direct Interest in the Subject Matter of Litigation

It is trite that the question of addition of parties under Order I Rule 10(2) is not one of the initial jurisdiction of the Court but of a judicial discretion which has to be exercised in view of the facts and circumstances of a particular case. Under the provisions of Order I Rule 10(2), the Court is empowered to direct that a person be added as party to the suit, if his presence in court is necessary in order to enable the court to adjudicate all the questions involved in the suit effectively and completely. The real test to determine whether a party is a necessary party to the suit is, whether in the absence of the person sought to be impleaded as a party to the suit, the controversy raised in the suit cannot be effectively and completely adjudicated. It is also well recognised that the expression “to settle all questions” employed in sub-rule (2) of Rule 10 of Order I receives a liberal and wide interpretation so as to facilitate the adjudication of all the questions pertaining to the subject matter of the suit. The jurisdictional condition is that the party sought to be impleaded must have a direct interest in the subject matter of litigation in contra-distinction to a commercial interest. Obviating multiplicity of proceedings is also one of the objects of the said provision. Jayashree Chandrakant Thite v. Padmavati Mohanlal Parekh, Chamber Summons No. 1359 of 2000 in Suit No. 2231 of 1986, Decided on February 7, 2020.

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In case of More than One Cause of Action – Order 2 Rule 2 CPC Will Not Apply

        It is undoubtedly true that the law does not compel a litigant to combine one or more cause of action is a suit. It is open to a plaintiff, if he so wishes, however to combine more than one cause of action against same parties in one suit. However, it is undoubtedly true that the embargo in Order 2 Rule 2 CPC will arise only if the claim, which is omitted or relinquished and the reliefs which are omitted and not claimed, arise from one cause of action. If there is more than one cause of action, Order 2 Rule 2 CPC will not apply. It is undoubtedly also true that Order 2 Rule 2 CPC manifests a technical rule as it has the effect of posing an obstacle in the path of a litigant ventilating his grievance in the Courts. But there is an equally important principle that no person shall be vexed twice on the same cause of action. Pramod Kumar v. Zalak Singh, (2019) 6 SCC 621.

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Suit for – Declaration of Title and Possession

Observing that in a suit for declaration of title, the respondent-plaintiffs are to succeed only on the strength of their own title irrespective of whether the appellants-defendants have proved their case or not, in Union of India v. Vasavi Coop. Housing Society Ltd., (2014) 2 SCC 269, it was held as under: “It is trite law that, in a suit for declaration of title, the burden always lies on the plaintiff to make out and establish a clear case for granting such a declaration and the weakness, if any, of the case set up by the defendants would not be a ground to grant relief to the plaintiff.” Jagdish Prasad Patel v. Shivnath,  (2019) 6 SCC 82.

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Breach of Trust – With Mens Rea

Though the contract is of a civil nature, if there is an element of cheating and fraud, it is always open for a party in a contract, to prosecute the other side for the offences alleged. In S.W. Palanitkar v. State of Bihar, (2002) 1 SCC 241 it was held that every breach of contract may not result in a penal offence, but in the very same judgments, it was further held that breach of trust with mens rea gives rise to a criminal prosecution as well. In a given case, whether there is any mens rea on the part of the accused or not is a matter which is required to be considered having regard to the facts and circumstances of the case and contents of the complaint etc.         In Anil Mahajan v. Bhor Industries Ltd., (2005) 10 SCC 228, it has been held that where there exists a fraudulent and dishonest intention at the time of the commission of the offence, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. D R Lakshman v. State of Karnataka, (2019) 9 SCC 677.

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Mere Breach of a Promise – Does Not Constitute the Offence of Criminal Breach of Trust

The law clearly recognizes a difference between simple payment/investment of money and entrustment of money or property. A mere breach of a promise, agreement or contract does not, ipso facto, constitute the offence of the criminal breach of trust contained in Section 405 Indian Penal Code without there being a clear case of entrustment.         In the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent inducement and mens rea. The mere inability of a party to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. The legislature intended to criminalise only those breaches which are accompanied by fraudulent, dishonest or deceptive inducements, which resulted in involuntary and inefficient transfers, under Section 415 Indian Penal Code. Satishchandra Ratanlal Shah v. State of Gujarat, (2019) 9 SCC 148.

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Summons – Object of

Indeed, mentioning of the specific “day, year and time” in the summons is a statutory requirement prescribed in law (Civil Procedure Code) and, therefore, it cannot be said to be an empty formality. It is essentially meant and for the benefit of the defendant because it enables the defendant to know the exact date, time and place to appear in the particular court in answer to the suit filed by the plaintiff against him.

       If the specific day, date, year and the time for defendant’s appearance in the court concerned is not mentioned in the summons though validly served on the defendant by any mode of service prescribed under Order 5, it will not be possible for him/her to attend the court for want of any fixed date given for his/her appearance.

       The object behind sending the summons is essentially threefold-first, it is to apprise the defendant about the filing of a case by the plaintiff against him; second, to serve the defendant with the copy of the plaint filed against him; and third, to inform the defendant about actual day, date, year, time and the particular court so that he is able to appear in the court on the date fixed for his/her appearance in the said case and answer the suit either personally or through his lawyer. Auto Cars v. Trimurti Cargo Movers Pvt. Ltd., (2018) 15 SCC 166.

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Non-Arbitrable Disputes

Ordinarily every civil or commercial dispute whether based on contract or otherwise which is capable of being decided by a Civil Court is in principle capable of being adjudicated upon and resolved by arbitration “subject to the dispute being governed by the arbitration agreement” unless the jurisdiction of the Arbitral Tribunal is excluded either expressly or by necessary implication.
In Booz-Allen and Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532, the Hon’ble Apex Court set down certain examples of non-arbitrable disputes such as:
(a) Disputes relating to rights and liabilities which give rise to or arise out of criminal offences;
(b) Matrimonial Disputes relating to divorce, judicial separation, restitution of conjugal rights and child custody;
(c) Matters of Guardianship;
(d) Insolvency and Winding Up.
(e) Testamentary matters, such as the grant of probate, letters of administration and succession certificates; and
(f) Eviction or tenancy matters governed by special statutes where a tenant enjoys special protection against eviction and specific courts are conferred with the exclusive jurisdiction to deal with the dispute.
(g) The enforcement of a mortgage has been held to be a right in rem for which proceedings in arbitration would not be maintainable. In Vimal Kishore Shah v. Jayesh Dinesh Shah, 2016 (119) ALR 428, the Hon’ble Apex Court added a seventh category of cases, namely, disputes relating to trusts, trustees and beneficiaries arising out of a trust deed and Trust Act.

In Skypak Courier Ltd.v. Tata Chemicals Ltd., 2000 (40) ALR 255, it was held that the existence of an arbitration clause will not be a bar to the entertainment of a complaint by a forum under the Consumer Protection Act, 1986, since the remedy provided under the law is in addition to the provisions of any other law for the time being in force. Hindustan Petroleum Corporation Ltd. v. Kamalkant Automobiles, 2017 (123) ALR 369.

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Quashing of Complaints – Principles of

The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings are:
(i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused.
For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.
(ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm or where the allegations are absurd and inherently improbable.
(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.
(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.
(v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.” Binod Kumar v. State of Bihar, (2014) 10 SCC 663.

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