Singh Dugal & Co.Ltd. Vs. Unied Bank of India & Ors  INSC 412 (8 August 2000)
BABU & SHIVARAJ V. PATIL
RAJENDRA BABU, J. :
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:
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.
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.
application filed by Ist respondent-Bank for judgment on admission covers only
a part of the suit claim.
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.
said minutes in the meeting held on 30th May, 1990, it was mentioned as follows:-
"IT WAS RESOLVED THAT :
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 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.
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.
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.
the company accepts its liability as per details stated hereinbelow:
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:
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.
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
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.
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.
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 company's 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:
That the defendant No.1's suit is barred by limitation;
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;
That the defendant No.1's 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
That the suit of the defendant No.1 is bad for misjoinder of parties.
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.
time of hearing it appears it was contended: 1.
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.
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.
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 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.
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.
appeal, the Division Bench noticed these very facts and also noted that
discrepancy, if any, between the appellant's 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.
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'.
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 admission of facts in the face
of which, it is impossible for the party making such admission to succeed.
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.
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.
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.
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.
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.
learned counsel for the appellant relied on a 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 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 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.
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.
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.
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.
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.
we are of the view that this case deserves to be dismissed with advocates' fees
quantified at Rs. 10,000/-.