R.M. Savant, J.@mdashRule, with the consent of the parties made returnable forthwith and heard.
2. The above Writ Petitions filed by two sets of Petitioners take exception to the Order dated 6.6.2009 passed by the learned Civil Judge Senior Division, Panaji, by which order the applications under Order XXXIX Rule 2A and Order XXXIX Rule 2 and 7 filed by the Petitioners in Writ Petition No. 600/2009 and other three companion matters came to be dismissed while the applications under Order XXXIX Rule 11 came to be granted and the defences of the Petitioners in Writ Petition No. 558/2009 and three companion matters came to be struck off.
3. The facts which are relevant for the adjudication of the above two sets of Writ Petitions can briefly be stated thus:
4. The Petitioners in Writ Petition Nos. 600/2009, 602/2009 and 603/2009 have filed Special Civil Suit Nos. 7/2000/A, 14/2000/A and 21/2000/A against the Respondents herein whereas the Petitioners in Writ Petition No. 601/2009 which is the sister concern of the Petitioners in Writ Petition No. 600/2009 has filed Special Civil Suit No. 8/2000/A against the said Respondents. All the aforesaid four suits have been filed to recover various sums of monies from the Respondents as set out in each of the plaints. Initially the Petitioners filed an application being CMA No. 19/2000/A in suit No. 7/2000/A seeking relief by way of attachment before judgment and furnishing security. In the said application ad-interim order dated 9.2.2000 came to be passed by the Civil Judge restraining the Respondents from creating further interest in the iron ore lying at its Kudnem stockyard at Kudnem. In the said suit another application was filed being CMA No. 50/2000/A, which came to be filed seeking a temporary injunction on the ground that despite the orders passed on the application for attachment before judgment the Respondents had sold the iron ore to M/s Kudnem Mineral Processing Company Private Limited, a sister concern of the Respondents and the same had been done to defeat the ex-parte order dated 9.2.2000 passed in the said suit. It was the case of the Petitioners that the said transaction was nothing but a sham transaction and that the act of removing the said iron ore was intended to defraud the Petitioners. The said application being CMA No. 50/2000/A was considered by the learned Civil Judge Senior Division who declined to grant ad-interim relief to the Petitioners resulting in the Petitioners'' filing Civil Revision Application No. 83/2000 in this Court. The said Civil Revision Application was disposed of by a learned Single Judge of this Court on 31.3.2000 by recording the statement made on behalf of the Respondents that they would not dispose of and/or alienate in any manner whatsoever the assets described in the Schedule to the said order till the disposal of the CMA No. 50/2000/A. Accordingly, an injunction was granted by this Court in the above terms. From the point of view of the present Petition, one of the assets mentioned in the said Schedule at item No. 6, was the residential bungalow ''Laxmi Prasad'' with the plot of land being H. No. 436, Miramar, Panaji Goa, is relevant. Another asset included in the said Schedule was item No. 2 therein which was a 966 C Caterpillar Wheel Loader. Despite the said order dated 31.3.2000 since the Respondents had removed one of the Schedule items i.e. Wheel Loader out of the jurisdiction of this Hon''ble Court in September, 2000, the Petitioners filed MCA No. 480/2000 in the said disposed CRA for contempt of the said order dated 31.3.2000 which MCA was disposed of by this Court by order dated 18.1.2001 wherein this Hon''ble Court had directed the Respondents not to remove any of the Schedule items out of the jurisdiction of this Court till the disposal of the applications filed by the Petitioners before the Trial Court.
5. The said applications were thereafter considered by the Trial Court and by a common order dated 13.3.2001, the Trial Court was pleased to reject the CMA No. 19/2000/A for attachment before judgment and in so far as CMA No. 50/2000/A, was concerned granted injunction restricted to only the machinery. The Petitioners aggrieved by the said order dated 13.3.2001 filed Appeals From Order Nos. 27 and 28 of 2001 in this Court which were both disposed of by this Court by order dated 11.5.2001 and the order dated 13.3.2001 passed by the Trial Court was set aside and the matters were remanded back to the Trial Court to be decided afresh in terms of the observations made therein. However, pending such disposal by the Trial Court, the earlier order dated 31.3.2000 as varied by order dated 18.1.2001 passed in CRA No. 83/2000 was to operate.
6. On remand the Trial Court by its common order dated 5.9.2001 granted interim relief in all the Civil Misc. Applications filed by the Petitioners and VMCPL in all the four suits. Accordingly, the Respondents in all four suits were ordered to furnish security for the various sums which were the subject matter of the said four suits. In addition thereto the Trial Court also ordered the conditional order of attachment of the mining machinery of the Respondents and also the shares held by the Respondents in M/s. Vilman Packagings Pvt. Ltd. A conditional attachment of the residential bungalow of the Respondents being House No. 436, at Miramar, Panaji Goa, was also levied. By the said order dated 5.9.2001 an injunction also came to be passed restraining the Respondents from parting with possession and/or transferring the mining machinery and the said residential bungalow. The Respondents aggrieved by the said order dated 5.9.2001 filed Appeals From Order being Nos. 57/2001 to 61/2001 in this Court a learned Single Judge of this Court dismissed the said Appeals by a common judgment dated 13.12.2001. The learned Single Judge while dismissing the Appeals observed that though the relief by way of attachment was a harsh remedy, however, circumstances were such that the imposition of this remedy was substantiated. He further observed that in the said circumstances the order of attachment before judgment passed under Order XXXIX Rule 5 of CPC was justified. The learned Judge by further observing that he did not find any reason to interfere with the impugned order dismissed the said Appeals. Aggrieved by the said order dated 13.12.2001 by which Appeals From Order filed by the Respondents came to be dismissed. The Respondents filed SLP Nos. 2832/2002, 2833/2002, 2834/2002 and 2837/2002 respectively in the Hon''ble Supreme Court of India. The said Special Leave Petitions were allowed by the Hon''ble Supreme Court by order dated 19.4.2002 by setting aside the attachment of the properties of the Respondents, however in so far as the injunction is concerned, the same was upheld by the Hon''ble Supreme Court so as to secure the interest of the Petitioners. The Hon''ble Supreme Court directed the Petitioners to give an undertaking before the Trial Court that they would not part with the shares of M/s Vilman Packagings Pvt. Ltd., residential bungalow of the Respondents being House No. 436, at Miramar, Panaji Goa, and the mining machinery. In terms of the order of the Hon''ble Supreme Court, the Defendant Nos. 1 and 2 filed undertakings in the Trial Court in the four suits in the following terms:
We (1) Shri Vassudeva Guiri Quenim, proprietor of M/s V.G. Quenim and (2) Smt. Vilasini V. Quenim, the Defendants herein undertake before this Hon''ble Court that we will not part with the shares of M/s Vilman Packaging Pvt. Ltd., House No. 436, at Miramar, Panaji and the mining machinery.
Therefore, after the disposal of the Special Leave Petitions in the Supreme Court, there was an injunction operating against the Respondents restraining them from parting with possession or transferring the said residential bungalow as also the Respondents had given undertakings that they would not part with the shares of M/s Vilman Packaging Pvt. Ltd., House No. 436 at Miramar, Panaji Goa, and the mining machinery.
7. It appears that after the said undertakings were furnished, the Petitioners found that sometime on or about 20.11.2007 the said residential bungalow of the Respondents being House No. 436 at Miramar, Panaji Goa, was demolished by the Respondents, and therefore, the very subject matter of the injunction order and undertaking to the Court was rendered non-existent. The said act clearly amounted to a wilful breach of the said undertaking given by the Respondent No. 1 in all four suits as also the breach of the injunction order dated 5.9.2001 which was confirmed by the Trial Court and also by the Hon''ble Supreme Court.
8. It was also found that the Respondents had made an application to the Inspector of Survey and Land Records, City Survey, Panaji Goa, seeking amalgamation of the property bearing Chalta No. 11 of PT Sheet No. 116 on which house No. 436 stood prior to its demolition and property bearing Chalta No. 15 of PT sheet No. 116 which was adjacent property as one survey number. The said amalgamation was not granted by the Revenue Authority, however by an order dated 13.12.2006 passed by the North Goa Planning and Development Authority, permission was granted to the Respondent No. 1(e) to construct a residential bungalow and for the amalgamation of the said 2 plots as if it was open and vacant plot and whilst seeking the said construction licence the said bungalow was not shown as existing on the said plot and on that basis the Respondent No. 1(e) obtained construction licence on 2.4.2007. By the said acts of the Respondents, the very identity of the plot on which the said House No. 436 was situated and which was the subject matter of the injunction and undertaking given by the Respondents was lost.
9. In view of the said acts of the Respondents which according to the Petitioners were contumacious as the Respondents had wilfully and deliberately flouted the orders passed in the said suits as also the undertakings given by them pursuant to the order of the Hon''ble Supreme Court, the Petitioners filed applications being CMA Nos. 26/2007/A to 29/2007/A in the said four suits under Order XXXIX Rule 2A and 11 for breach of injunction and undertakings and for striking off their defences. The Petitioners also filed applications for injunction being CMA Nos. 31/2007/A to 34/2007/A under Order XXXIX Rule 2 and Rule 7. In so far as the application under Order XXXIX Rule 2-A and 11 it was a common application and based on the same facts, the Petitioners were seeking action under the said two provisions. To the said applications, the Respondents filed replies which were identical. The Respondents in the said reply contended that the Petitioners had not made out any case for their defence being struck off or for breach of injunction. It was the case of the Respondents that by an injunction operating against them they were only restrained from parting with possession or alienating the property to a third party and that the demolition of the said bungalow was carried out by them on a bonafide interpretation of the said order and that they never intended to disobey any order of injunction of this Court passed against them or commit any breach of the undertaking given by them.
10. It was further averred in the said reply that the said residential bungalow has not been demolished precisely or otherwise to defeat any decree which may eventually be passed by the Trial Court. It was further averred that the demolition of the said residential bungalow would not in any way defeat or prejudice any decree if at all passed against the Respondents. The Respondents further stated that they have the financial wherewithal to satisfy any claim which would be made against them by the Decree. The Respondents without prejudice to their contention offered to give Bank Guarantee for the sum equivalent to the estimated value of their residential bungalow as may be reasonably determined by the Trial Court.
11. The Respondents also filed an additional affidavit in the said proceedings wherein the said offer of giving Bank Guarantee of the estimated value of the old residential bungalow was restated. The Respondents in the said additional affidavit ventured to tender an unconditional apology and further undertook to the Trial Court that the possession of the new bungalow, along with two plots which are being constructed upon shall not be parted with nor encumbered in any manner in favour of any third party nor any interest will be created in favour of any third party, pending the said suit.
12. The said two sets of applications filed by the Petitioners being CMA Nos. 26/2000/A to 29/2000/A for action under Order XXXIX Rule 2-A and Order XXXIX Rule 11 of the CPC and CMA Nos. 31/2000/A to 34/2000/A for injunction under Order XXXIX Rule 2 and Order XXXIX Rule 7 were considered by the Trial Court and by a common order dated 6.6.2009, the applications for taking action under Order XXXIX Rule 2-A came to be dismissed. The application under Order XXXIX Rule 11 came to be granted and resultantly, the defence of the Respondents i.e. Defendants in the said suit came to be struck off and the application under Order XXXIX Rule 2 and 7 came to be dismissed.
13. Aggrieved by the said common order dated 6.6.2009 the above two sets of Petitions have been filed by the above two sets of Petitioners being the Plaintiffs and Defendants in the said four suits. The Petitioners in Writ Petition No. 600/2009 and the companion matters are aggrieved by that part of the order whereby the application under Order XXXIX Rule 2-A and the application under Order XXXIX Rule 2 and 7 came to be dismissed whereas the Petitioners in Writ Petition No. 558/2009 and companion matters are aggrieved by that part of the order allowing the applications under Order XXXIX Rule 11 striking off their defences.
14. The Trial Court in the impugned order seems to have accepted the submissions advanced on behalf of the Respondents that Order XXXIX Rule 2-A could not be invoked by the Respondents in the other suits namely Special Civil Suit Nos. 8/2000, 14/2000 and 21/2000, in view of the fact that the injunction was operating only in Special Civil Suit No. 7/2000/A, this can be gathered from the fact that the Trial Court has accepted the contention advanced on behalf of the Respondents i.e. Defendants in the said suits which is reflected in paragraph 3 of the impugned order, wherein the Trial Court has observed as follows:
Ld. Sr. Counsel Shri Freedum Devetre along with ld. Advocate Shri E. Dias argued on behalf of the Plaintiff and also filed written submissions and the various decisions cited by him have been reproduced in the said arguments. Ld. Sr. Counsel Shri V. Nadkarni along with ld. Advocate Shri Y. Nadkarni argued on behalf of the Defendants and also filed written submissions along with various citations. Ld. Sr. Counsel Shri Nadkarni contended that injunction has been granted only in Special Civil Suit No. 7/2000/A and orders under Order 38 have been passed in all the suits and being so as rightly pointed out by him the applications under Order 39 Rule 2(a) filed in Special Civil Suit No. 8/2000, 14/2000 and 21/2000 are not maintainable.
15. The Trial Court has also observed that there can be no dispute about the demolition of the bungalow, however the Trial Court did not accept the explanation given by the Respondents that they demolished the bungalow on a bonafide interpretation of the said order of injunction. The Trial Court also did not accept the apology tendered by the Respondents as according to the Trial Court the said apology was not an act of contrition or repentance but was a conditional apology. The Trial Court also held that the Defendants have wilfully violated the undertaking given by them to the Trial Court and that the case of the Respondents that they bonafidely complied with the undertaking given by them restraining them only from parting with possession to a third party or alienating to a third party could not be accepted. The Trial Court further held that the case of the Respondents that they have not parted with possession cannot be accepted since after the demolition one cannot be in possession of the said demolished house. The Trial Court also observed in view of the amalgamation of the plot the very identity of the plot No. 3 in which the suit house No. 436 was situated was lost. In so far as the striking off defences was concerned under Order XXXIX Rule 11, the Trial Court observed that if the conduct of the Defendants is totally dishonest or amounts to wilful attempt to disregard the order of the Court or breach an undertaking the defence can be struck off.
16. Though all the aforesaid findings and observations have been recorded by the Trial Court in so far as application under Order XXXIX Rule 2-A is concerned though the same has been dismissed, the Trial Court has not recorded any reasons as to why the case of the Petitioners cannot be accepted and why no action under Order XXXIX Rule 2-A is required to be taken. The Order further discloses that in so far as the application under Order XXXIX Rule 2-A is concerned, the Trial Court has not taken it to its logical conclusion either by recording reason why action is required to be taken under Order XXXIX Rule 2-A or why action is not required to be taken under Order XXXIX Rule 2-A. Moreso in the instant case when the Trial Court has dismissed the said application. In the absence of the said reasons, one is at a loss to understand as to what has weighed with the Trial Court in rejecting the said application under Order XXXIX Rule 2-A.
17. In so far as the application under Order XXXIX Rule 2 and 7 is concerned, the Trial Court has not even adverted to the application in the order. The order also does not give any reasons as to why the said application under Order XXXIX Rule 2 and 7 has been rejected. Only in the operative part of the impugned order one can find that the said application has been rejected by the Trial Court as otherwise in the body of the said order there is not a whisper as regards the said application.
18. The learned Counsel for the parties were heard in respect of the challenge in so far as rejection of the application under Order XXXIX Rule 2-A is concerned and application under Order XXXIX Rule 2 and 7. The learned Counsel for the Petitioners Shri G. Joshi in Writ Petition No. 600/2009 and companion Petitions contended that in view of the finding recorded by the Trial Court that there was a breach of the injunction and the undertaking given by the Respondents, this Court should intervene and take action against the Respondents under Order XXXIX Rule 2-A. The learned Counsel submitted that in view of the findings recorded by the Trial Court, it was satisfied that there was wilful breach of undertaking and though the injunction was operating only in Special Civil Suit No. 7/2000/A, the undertakings were given in all the four suits and therefore the Respondents were liable for being proceeded with under Order XXIX Rule 2-A. The learned Counsel further submitted that the conduct of the Respondents has been persistently contumacious as the facts of the case disclose and therefore there was all the more reason for the Trial Court to proceed against the Respondents under Order XXXIX Rule 2-A. The learned Counsel further submitted that the offer given by the Respondents of securing the Petitioners was only after the Respondents were found out violating the said injunction order and the undertaking and therefore the said offer could not be accepted. The learned Counsel however fairly conceded that the Trial Court has not recorded any reasons as to why application under Order XXXIX Rule 2-A has been dismissed nor the Trial Court has taken the issue to its logical conclusion moreso, when it has recorded the findings which it has recorded in the said impugned order.
19. On the other hand, learned Senior Counsel Mr. V.B. Nadkarni supported the order and tried to justify the dismissal of the application under Order XXXIX Rule 2-A by contending that the Trial Court has accepted his contention that the application under Order XXXIX Rule 2-A would not lie in the said suits as the injunction was operating only in Special Civil Suit No. 7/2000/A. The learned Counsel further submitted that Order XXXIX Rule 2-A cannot be invoked as the same does not cover an undertaking furnished to the Court. The learned Counsel sought to rely upon the judgment of a learned Single Judge of this Court reported in
20. The learned Senior Counsel also fairly submitted that there are no reasons mentioned in the order as to why the application under Order XXXIX Rule 2-A has been rejected. The learned Senior Counsel however submitted that though no reasons have been mentioned as to why the application under Order XXXIX Rule 2-A has been rejected, the reasons could be gathered from the order itself.
21. Having heard the learned Counsel and having perused the order in so far as aspect of Order XXXIX Rule 2-A and Order XXXIX Rule 7 is concerned, in the light of the observations made herein above namely that the Trial Court in so far as application under Order XXXIX Rule 2-A is concerned has not recorded any reasons as to why the said application was dismissed and in view of the fact that the Trial Court after recording the findings as mentioned hereinabove has not taken the said issue to its logical conclusion. In my view in so far as the application under Order XXXIX Rule 2-A is concerned the matter would have to be remanded back to the Trial Court for a de novo considerations.
22. It is not possible to accept the contention of the learned Counsel for the Petitioners that this Court sitting in its Writ jurisdiction under Article 227 of the Constitution of India should intervene and take action against the Respondents for the breach of injunction and undertaking in the light of the finding recorded by the Trial Court. In my view the Writ jurisdiction of this Court under Article 227 of the Constitution of India, cannot be extended to grant such a relief to the Petitioners in respect of their applications under Order XXXIX Rule 2-A in the absence of any reasons, recorded by the Trial Court. Moreso in view of the fact that the Trial Court after recording the findings that it has recorded in the impugned order did not deem it fit to record its reasons one way or other either for initiating action under Order XXXIX Rule 2-A or dismissing the said application under Order XXXIX Rule 2 A, but has merely recorded in the operative part that the application under Order XXXIX Rule 2-A has been dismissed. In so far as the application under Order XXXIX Rule 2 and 7 as mentioned in the earlier part of the order, the Trial Court had not even adverted to the said application much less recorded any finding. In the teeth of the material which was placed on record by the Petitioners, it was incumbent on the Trial Court to record its reasons as to why the said application under Order XXXIX Rule 2 and 7 is rejected. Having not done so in my view the remand in respect of the said application is also warranted.
23. Now coming to the application under Order XXXIX Rule 11, the Trial Court has allowed the said application of the Petitioners/Plaintiffs and thereby struck off the defences of the Respondents/Defendants in the said suit. This has resulted in the Defendants filing Writ Petition No. 558 of 2009 to 561 of 2009 assailing that part of the order. The parties would therefore be referred to as per their status in the aforesaid four Petitions. The Trial Court has not recorded separate reasons in the impugned order as to why the defences have to be struck off but has observed in the penultimate paragraph of the impugned order that the defence of the Defendants can be struck off under Order XXXIX Rule 11, if the conduct of the Defendants is totally dishonest or amount to wilful disregard to the order of the Court or breach of an undertaking. The Trial Court as mentioned above has recorded a finding in the impugned order that the Respondents have wilfully violated the undertaking given by them to the Court and therefore probably in that view of the matter the Trial Court deemed it fit to strike off the defences.
24. I have heard the learned Senior Counsel Shri V.B. Nadkarni for the Petitioners i.e. the original Defendants and Shri G.R. Joshi, for the Respondents i.e. the original Plaintiffs in Writ Petition No. 558/2009 and companion Petitions. The learned Senior Counsel submitted that in the same manner as the applications under Order XXXIX Rule 2-A and application under XXXIX Rule 2 and 7, there are absolutely no reasons given by the Trial Court as to why the defences of the Defendants have been struck off. The learned Counsel submitted that the Trial Court is vested with a discretion under Order XXXIX Rule 11 which discretion according to the learned Senior Counsel has to be exercised by following certain guiding principles. The learned Counsel submitted that the power under Order XXXIX Rule 11 is directory and not mandatory and it is only if the Court is satisfied and only as a last resort that the defences have to be struck off. The learned Counsel relied upon a Division Bench judgment of this Court reported in 2004(2) MLJ 1 in the matter of Ramavatar Surajmal Modi v. Mulchand Surajmal Modi, paras 7 and 8 of the said judgment are material and are reproduced herein under:
7. Rule 11 of Order 39 as introduced by the Bombay amendment provides for a procedure on parties defying orders of the Court and/or committing breach of any undertaking to the Courts. We are concerned with the question whether Sub-rule (1) of Rule 11, Order 39 leaves no discretion on the Court and that it obliges the Court to visit the defaulting party with the penalty prescribed therein irrespective of the circumstances that default is not wilful or the conduct of the party responsible for the default is not contumacious or there is reasonable explanation for default. The meaning and intention of the rule making authority must govern, and these are to be ascertained not only from the phraseology of the provision but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other. Inter-alia the Courts have applied the test whether the object of the provision will be defeated or furthered by holding the provision mandatory or directory. Let us not forget that the dismissal of suit or proceeding or striking out the defence of a defendant for noncompliance of the Court''s order or breach of an undertaking is a serious and grave consequence. By making provision of serious penalty of dismissal of suit or striking out the defence against the party responsible for default, the rule making authority did not intend to leave no discretion to the Court. The object of the provision of Order 39, Rule 11(1) is not defeated if it is held to be directory as the Court can in its discretion for adequate reasons visit the defaulting party with the penalty envisaged therein. On the other hand if the provisions is held mandatory, the Court ''shall'' be left with no discretion and peremptorily shall have to dismiss the suit where the plaintiff is responsible for the default or to strike off the defence when the defendant is guilty of default even though the default is not found wilful or conduct of such party not obstinate or contumacious. In our considered view, the provision in Sub-rule (1) merely vests power in the Court to dismiss the suit or proceeding where the default is by the plaintiff and strike off the defence of the defendant where the defaulter is the defendant. It does not obligate to do so in every case of default. This is further fortified by the provision contained in Sub-rule (2) which gives a discretion to the Court that even after the order contemplated under the sub- rule (1) of Rule 11 has been passed, upon sufficient cause being shown by the party responsible for the default or contravention or breach and such party makes amend for the default or contravention or breach to the satisfaction of the Court, the Court may restore the suit or hear the defence on such terms and conditions it deems fit. If the Court has power to restore the party to the same position even after the adverse order has been passed under Sub-rule (1) of Rule 11 if the case is made out under Sub-rule (2), the provision of Sub-rule (1) has to be held to be directory and not imperative. The provision in the nature of Sub-rule (2) leaves no manner of doubt the intention of the rule making authority that the provision of Sub-rule (1) of Rule 11 is directory and that by such provision power has been vested in the Court to dismiss the suit or proceeding where the plaintiff is in default or striking off the defence of the defendant, where defendant is responsible for the default. Unfortunately, neither in Ratnakar D. Patade nor in Smt. Asha M. Joshi, the learned Judges adverted to Sub-rule (2) of Rule 11 and its effect. The Supreme Court in
14. Even assuming that in certain circumstances the provisions of Order XI, Rule 21 must be strictly enforced, it does not follow that a suit can be lightly thrown out or a defence struck out, without adequate reasons. The test laid down is whether the default is wilful. In the case of a plaintiff, it entails in the dismissal of the suit and, therefore, an order for dismissal ought not be made under
Order XI, Rule 21, unless the Court is satisfied that the plaintiff was wilfully withholding information refusing to answer interrogatories or by withholding the documents which he ought to discover. In such an event, the plaintiff must take the consequence of having his claim dismissed due to his default, i.e. by suppression of information which he was bound to give : Denvillier v. Myedrs (1883) WN 58. In the case of the defendant , he is visited with the penalty that his defence is liable to be struck out and to be placed in the same position as if he had not defended the suit. The power for dismissal of a suit or striking out of the defence under O XI, R 21, should be exercised only where the defaulting party fails to attend the hearing or is guilty of prolonged or inordinate and excusable delay which may cause substantial or serious prejudice to the opposite party.
16. An order striking out the defence under
Order XI, Rule 21 of the Code should, therefore, not be made unless there has been obstinacy or contumacy on the part of the defendant or wilful attempt to disregard the order of the Court. The rule must be worked with caution, and may be made use of a last resort Mulla''s CPC 13th Ed., Vol.1, p. 581, Khajah Assenoolla Joo v. Khajah Abdool Aziz ILR (1883) Cal.923; Banshi Singh v. Palit Singh (1908) Cal.L.J.295; Allahabad Bank Ltd.''s Ganpat Rai ILR 11 Lah.209 : AIR 1929 Lah 750; Haigh v. Haigh, (1885) 31 Ch. D. 478 and Twycroft v. Grant (1975) WN 201.
24. The principle governing the Court''s exercise of its discretion under Order XI, Rule 21, as already stated, is that it is only when the default is wilful and as a last resort that the Court should dismiss the suit or strike out the defence, when the party is guilty of such contumacious conduct or there is a wilful attempt to disregard the order of the Court that the trial of the suit is arrested. Applying this test, it is quite clear that there was no wilful default on the part of the Defendant of the Court''s order under Order XI, Rule 18(2) for the production of documents for inspection, and consequently, the order passed by the trial Court on 23rd May, 1967, striking out the defence of the defendant must be vacated, and the trial must proceed afresh from the stage where the defendant was not permitted to participate.
8. The aforesaid position of law was laid down by the Apex Court in respect of Order 11, Rule 21 of the Code of Civil Procedure. Order 11, Rule 21 reads thus:
21. Non-compliance with order for discovery. --(1) Where any party fails to comply with any order to answer interrogatories, or for discovery or inspection of documents, he shall, if a plaintiff, be liable to have his suit dismissed for want of prosecution, and, if a defendant, to have his defence, if any, struck out, and to be placed in the same position as if he had not defended, and the party interrogating or seeking discovery or inspection may apply to the Court for an order to that effect, and (an order may be made on such application accordingly, after notice to the parties and after giving them a reasonable opportunity of being heard.)
(2) Where an order is made under Sub-rule (1) dismissing any suit, the plaintiff shall be precluded from bringing a fresh suit on the same cause of action.
Amendments: Objects and Reasons. --Clause 64-sub-clause (iv).-Under Rule 21, where any party fails to comply with any order to answer interrogatories or for discovery or inspection of documents, he shall, if a plaintiff, be liable to have the suit dismissed for want of prosecution; and if a defendant, to have his defence, if any, struck off, and be placed in the same position as if he had not defended. The rule further provides that a party interrogating or seeking discovery or inspection may apply to the Court for an order to that effect. The rule is being amended to provide for the passing of the order after giving notice to the plaintiff or defendant, as the case may be, and after giving him a reasonable opportunity of being heard. [Statement of Objects and Reasons ( Bill)-Gazette of India, Ext. dt. 8-4-1974, Pt.II, Section 2, p.316]
Sub-clause (v).-New Sub-rule (2) is being inserted to provide that a fresh suit would be barred when a suit is dismissed under this rule. The consequence of dismissal of suit or striking out the defence in Order 11, Rule 21 is visited as the case may where the party fails to comply with the order to answer interrogatories or for discovery or inspection of documents. Under Order 39, Rule 11(1) of the CPC the consequence of dismissal of suit or striking out the defence follows where there is default in compliance of order of the Court or breach of an undertaking by the plaintiff or the defendant, as the case may be. The provision of Order 11, Rule 21 having been held to be directory in M/s Babbar Sewing Machine Co. by the three Judge Bench of the Supreme Court, we have no hesitation in holding that for the selfsame reasons sub rule (1) of Rule 11 of Order 39 of CPC as introduced in Maharashtra by Bombay Amendment has to be held directory and the discretion exercisable by the Court in passing the order under Sub-rule (1) of Rule 11 of the Order 39 has to be in consonance and in conformity with the legal position laid down by the Supreme Court in M/s Babbar Sewing Machine Co. In other words, the power of dismissal of suit or striking out the defence, as the case may be, under Order 39, Rule 11(1) of CPC should be exercised for adequate reasons; where the defaulting party fails ultimately in complying with the order of the Court or the undertaking; where the default is wilful and the conduct of the defaulting party contumacious and that results in causing substantial or serious prejudice to the opposite party.
25. The learned Senior Counsel submitted that ultimately the suits filed by the Respondents are for recovery of monies and the question is about securing the Petitioners pending the suits. The learned Senior Counsel further submitted that the Respondents in their very first reply dated 18.10.2007 to the application filed by the Petitioners have given an offer of securing the Petitioners by furnishing a Bank Guarantee to the extent of the value of the property in question which value according to the learned Senior Counsel is much more than the claim of the Petitioners in the four suits. The learned Senior Counsel therefore submitted that the Respondents though having demolished the bungalow were ready to secure the Petitioners adequately and it was therefore incumbent upon the Trial Court to consider the said offer to make amends, and even without adverting to the said offer the Trial Court has chosen to strike off the defences of the Respondents. The learned Senior Counsel further submitted that even today the Petitioners are ready to offer the entire property admeasuring 1400 square metres and the construction which is being put up as a security for securing Petitioners'' interest in the four suits. The learned Senior Counsel further submitted that the Trial Court has not given any reasons as to why such a drastic action of striking off has to be resorted to which is one of the essential requirements before an order of striking off the defence can be passed. The learned Senior Counsel for the said purpose has relied upon a judgment of the Hon''ble Supreme Court reported in AIR SC 1981 1657 in the matter of Bimal Chand Jain v. Gopal Agarwal, wherein it is held that there is a discretion vested in the Court to strike off the defence and it does not oblige it to do so in every case of default. The Apex Court has held that it will always be a matter for the judgment of the Court to decide whether on the material before it, notwithstanding the absence of a representation under Sub-rule (2), defence should or should not be struck off. The learned Counsel also relied upon a judgment of the Hon''ble Supreme Court reported in
26. Per contra, the learned Counsel for the Respondents Shri G. Joshi, submitted that in the facts of the present case where there is a persistent contumacious conduct on the part of the Respondents, the action of striking off the defences of the Respondents was justified. The learned Counsel submitted that the Trial Court having recorded a finding that there is a wilful breach of the undertaking was justified in striking off the defences. The learned Counsel further submitted that though Modi''s case which was relied upon by both the parties has not been referred to in the judgment, the principles or guiding principles as enunciated in the said judgment have been kept in mind by the Trial Court and a finding has been recorded accordingly by the Trial Court for striking off the defences. The learned Counsel further submitted that the test of obstinacy or contumacy and also the test of default being wilful and deliberate is satisfied in the instant case. The learned Counsel further submitted that in so far as sub Rule 2 of Rule 11 on which much stress was laid by the learned Senior Counsel for the Respondents Shri Nadkarni, the question of making amends under sub Rule 2 would come only after the Court passes an order under the Order XXXIX Rule 11 as Rule 2 postulates an application being made by the Defendants thereafter and in respect of which application the other party is required to be heard. The learned Counsel therefore submitted that there was no obligation on the part of the Trial Court to consider the offer of the Respondents to make amends at the time when it was considering the instant application.
27. I have heard the learned Counsel for the parties in respect of the aspect of the order concerning the application under Order XXXIX Rule 11. At the outset, it is required to be noted that the application under Order 39 Rule 2-A and application under Rule 11 was one combined application and the Petitioners in Writ Petition No. 600/2009 and companion Petitions who are the Plaintiffs in the said four suits have relied upon the same set of facts for the said two reliefs. In so far as issue of Order XXXIX Rule 11 is concerned though the Trial Court has allowed the said application, reading of the order in my view does not indicate that the Trial Court has taken into consideration the guiding principles applicable while considering an application under Order XXXIX Rule 11. Merely because the Trial Court has observed at one place that there has been a wilful breach of the undertaking by the Respondents/Defendants, would not justify the order of striking off the defence unless the Trial Court had recorded a finding that the conduct of the Respondents was such that warranted the striking off their defences. Unfortunately, the Trial Court has beyond observing at one place that the conduct of the Defendants was wilful, has not recorded clear cut findings that the tests laid down before an order of striking off the defences could be passed were satisfied. It is also pertinent to note that it is an admitted position that Modi''s case ( supra ) has been relied upon by both the parties. The judgment in Modi''s case in so far as issue of Order XXXIX Rule 11 is concerned is a defining judgment as it has been held in the said judgment that power under Order XXXIX Rule 11 is not mandatory but directory. In the said judgment reliance is placed upon the judgment of the Hon''ble Supreme Court in Babbar Sewing Machine''s case ( supra ) wherein the Apex Court was dealing with Order XI Rule 21 and wherein the Apex Court has held that in terms of the Order XI Rule 21, a serious responsibility is vested in the Court in the matter and the power is not to be exercised mechanically and that the said power is not to be exercised in every case of default.
28. In the present case unfortunately the Trial Court has failed to record the reasons that the said guiding principles as laid down by the Apex Court in Babbar''s case and by the Division Bench in Modi''s case have been satisfied. The Trial Court in fact has not even referred to Modi''s case ( supra ) though both the parties had relied upon it, as can be seen from the written submissions. The discretion which is vested in the Court has to be exercised on certain principles and not arbitrarily and therefore there was all the more reason for the Trial Court to record cogent reasons as to why the defences of the Respondents/Defendants is required to be struck off. The impugned order also does not disclose that the Trial Court had come to a conclusion that the striking off the defences was a last resort. Another aspect which is to be considered is that the Defendants were seeking to make amends by making offer of securing the Petitioners by furnishing Bank Guarantee which is mentioned in the first affidavit filed by them on 18.10.2007 and the additional affidavit filed by them in the said proceedings. Though there is merit in the submission of the learned Counsel for the Petitioners that the aspect of considering an application under Order XXXIX Rule 2 would come only after the defences are struck off, the Trial Court has not rejected the said offer on the said ground but has not even adverted to the said offer. One could have understood that after adverting to the said offer, the same was rejected by recording reasons, however, the same is not the case. As held in Bimal Chand Jain''s case ( supra ) notwithstanding that there is no representation under Sub-rule (2) the Trial Court is obliged to consider whether the defences have to be struck off. In the fact situation of the present case, where there was an offer made by the Respondents to make amends, it was all the more necessary for the Trial Court to record reasons.
There is also merit in the submission of Shri Nadkarni that the Trial Court has also wrongly recorded the submissions of the Petitioners though the submission in the written submissions of the Petitioners in paragraph 36(ii) was to the following effect:
There is no material placed on record on behalf of the Plaintiff to prove that the Defendants were consistently flouting the orders of the Court.
Instead of the word consistently the Trial Court has used the word clandestinely in the impugned order.
29. It would also pertinent to note that though the defences of the Defendants have been struck off, the application of the Plaintiffs for striking off the counter claim has not been allowed by the Trial Court, why the said relief is not granted is also not mentioned by the Trial Court. Since the order is common dealing with the application under Order XXXIX Rule 2A and Order XI as also the application under Order XXXIX Rule 2 and 7, since on the aspect of Order XXXIX Rule 2-A, and Rule 2 and 7 the matter is required to be remanded back to the Trial Court in my view, in so far as the application under Order XXXIX Rule 11 is also concerned a remand is warranted for the reasons mentioned herein above.
30. The impugned order dated 6.6.2009 therefore is quashed and set aside and the matter is remanded back to the Trial Court for denovo consideration of the applications being CMA Nos. 26/2000/A to 29/2000/A and CMA Nos. 31/2000/A to 34/2000/A filed by the Petitioners.
31. On such remand, the Trial Court is directed to consider the said applications being CMA Nos. 26/2007 to 29/2007/A and 31/2007 to 34/2007/A on their own merits and in accordance with law, uninfluenced by the instant order but having regard to the pleadings which are on record and by recording an independent finding in respect of each of the applications. The said applications to be decided on or before 28th February, 2010. Rule is accordingly made absolute in all the above petitions to the aforesaid extent with parties to bear their respective costs.
