1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINRY ORIGINAL CIVIL JURISDICTION Notice of Motion No..1213 OF 2006 IN SUIT NO. 3453 OF 2005 Export Credit and Guarantee Corporation Ltd. ..... Plaintiffs. Versus. Neetal Exports & Anr. ..... Defendants. Mr. Birendra Saraf alongwith Ms. Sanya Dadachanji i/by M/s. ManilalKher Ambalal &Co. for the Plaintiffs. Mr. R.S.Tripathi for Defendant No.2. CORAM : A.A. SAYED, J. DATE : JUNE 10, 2009 P.C. 1. The above Notice of Motion is taken out by the defendant No.2 essentially for the following reliefs. a) that the plaint in the above Suit No.3453 of 2005 be rejected for non-disclosure of cause of action against the Defendant No.2 above named under Order VII, Rule 11(a) of the Code of Civil Procedure, 1908 duly amended by an order of this Hon'ble Court; 2 (b) In alternative, that the name of the Defendant Nos. 2 from the above Suit No.3453 of 2005 be struck out under Order 1, Rule 10(2)of the Code of Civil Procedure, 1908 duly amended by an order of this Hon'ble Court. 2. The case of the defendant No. 2 in the Chamber Summons is that the plaint does not disclose any cause of action against the defendant No.2 and that the defendant No.2 is not a necessary and proper party and that no relief has been sought against the defendant No.2 and that the suit can be effectually and completely adjudicated between the defendant No.1 and the plaintiff, without the presence of the defendant No.2 in the suit. 3. The Notice of Motion has been opposed by the plaintiffs by filing reply.. The case of the plaintiffs in their reply is that the defendant NO.2 is necessary and proper party and the defendant NO.2 is intrinsically involved in the transaction between the plaintiff and defendant No.1 and the presence of defendant No.2 is necessary and essential for effective adjudication and decision in the suit and therefore no relief in this Notice of Motion be granted. 3 4. For determining the issues involved in the present Notice of Motion, the case of the plaintiff in the plaint would have to be considered. The case of the plaintiff is that they are Export Credit Guarantee Corporation Ltd. (ECGC) & that they entered into Export Factoring Agreement with the defendant No.1, dated 11.9.2003 and the defendant No.1 was permitted to obtain advance of finance from defendant No.2. Under this Factoring facility, the defendant No.1 made shipment to one overseas foreign buyer. The defendant No.1 thereafter raised a Bill of Exchange on the Foreign Buyer through their Bankers Bank of Baharin & Kuwait BSC i.e. Defendant No.2. The said Bill of Exchange was discounted by the defendant No.2-Bank and an amount of Rs. 19,42,454/- was advanced to the defendant No.1. The Bill was due for payment by 5th April, 2004, however, the foreign buyer did not make payment as according to them they had a counter claim. 5. In the circumstances, the defendant No.2- Bank lodged its claim for the unpaid amount with the plaintiffs on 22.4.2004 under the said Export Factoring Agreement. The amount was settled by the plaintiffs as per the Agreement. Inspite of demands, since the amount of Rs. 19,42,454/- alongwith 11% interest was not paid by the defendant No.1 to the plaintiffs, as per 4 the Agreement, the above suit came to be filed by them. 6. The learned Counsel for the defendant No.2 pointing out Order 7 Rule 11(a) of the CPC submitted that since the plaint does not disclose any cause of action against the defendant No.2, the plaint is liable to be rejected as against them. He submitted that the said Agreement was executed between the plaintiff and defendant No.1 and cause of action is based on this agreement and no reliefs have been claimed as against the defendant No.2 in the plaint. The learned Counsel submitted that the defendant No. 2 can at the highest be a witness in the suit. He submitted that defendant No. 2 is neither a necessary nor proper party. to the suit and urged that the plaint be rejected as against the defendant No.2. 7. Learned Counsel for defendant No. 2, referred to Rule 10(2) of the Code of Civil Procedure and alternatively submitted that the name of defendant No.2 be struck out from the suit as defendant No.2 has been improperly joined as party to the suit by the plaintiff. 8. The learned Counsel relied upon the Judgment of Single Judge of this Court, reported in AIR 1999 5 BOM. 401, wherein the learned Single Judge has held that since no cause of action had arisen against 3rd defendant, in that suit, the plaint was liable to be rejected under Order 7 Rule 11 of the CPC as against 3rd defendant. 9. On the other hand, the learned Counsel for the plaintiffs, pointing out the the Agreement annexed as Exhibit-A to the plaint, submitted that the entire claim arises out of the payment made by the plaintiff to the defendant No.2. He submitted that it is not as if the defendant No.2 has been added as a party defendant out of malicious intention. He also took me through various clauses in the Export Factoring Agreement, where reference has been made to "Designated Bank" viz. the defendant No.2 in the present case. The learned Counsel submitted that the presence of defendant No.2 is essential for proper and effective adjudication of the suit since the defendant No.2 has played a crucial role in the entire transaction. 10. I have heard the learned Counsel for the parties and perused the material on record, including Export Factoring Agreement, annexed as Exhibit -A to the plaint. In my view, the reliefs in Notice of 6 Motion of the defendant No.2 cannot be granted. 11. It cannot be disputed that the claim in the plaint has arisen from the monies paid by the plaintiffs to the defendant No.2 under the Export Factoring Agreement. It cannot be disputed that the defendant No. 2 had a role to play in respect of the entire transaction. In my view, for effective decision in the case, the presence of defendant No. 2 would be necessary.. The averments in the plaint clearly disclose that defendant No.2 had played a crucial and significant part in the transaction. The plaintiff is dominus litis and he has added the defendant No.2 as party defendant looking to the role played by the defendant No.2 in the said transaction. It certainly cannot be said that the defendant NO.2 has been added maliciously or that is a case of mis-joinder of the parties. Merely because no reliefs are claimed against the defendant No. 2 would not mean that the defendant No.2 cannot be joined as party defendant to the suit. 12. Insofar as the ruling cited by the learned Counsel for the defendant, in my view it is not applicable in the facts of this case since the issue in that case was involving provisions of Section 230 of the Contract Act, and the Court, considering the said 7 provision held that since the principal was already on record, the agent cannot be held personally liable and that no cause of action arose against the agent and accordingly rejected the plaint, in so far as the agent was concerned. In the present case, there is no agency involved as there is no agent and principal relationship between the plaintiff and defendant No.2 and hence, the ratio in that case is not applicable in the facts of the present case. 13. Taking overall view of the matter, in my opinion, the defendant No.2, though not a necessary party, is certainly a proper party and his presence would aid in effective disposal of the suit. 14. In light of the aforesaid discussion, the Notice of Motion is liable to be rejected and is accordingly rejected without costs. [A.A.SAYED, J.]