IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE P.BHAVADASAN FRIDAY, THE 25TH MARCH 2011 / 4TH CHAITHRA 1933 AS.No. 647 of 1994() ----------------------------- OS.23/1984 of ADDITIONAL SUB COURT,KOLLAM .................... APPELLANT(S): PLAINTIFF -------------------------------------- C.SIVADASAN, KOOTTIL HOUSE, SAKTHIKULANGARA, QUILON. BY ADV. SRI.K.C.JOHN SRI.K.K.JOHN SRI.BENNY CHERIAN RESPONDENT(S): DEFENDANTS 1 TO 4 ---------------------------------------------------------- 1. THE NEW INDIA ASSURANCE COMPANY LTD., HEAD OFFICE, THE NEW INDIA ASSURANCE BUILDING 87, M.G.ROAD, FOR BOMBAY 400 023. 2. THE NEW INDIA ASSURANCE COMPANY LTD., T.C. 24/267, IIND FLOOR NEAR SPENCER JUNCTION, P.B. NO.41, TRIVANDRUM 695 001. 3. THE NEW INDIA ASSURANCE CO. LTD., QUILON BRANCH. 4. THE CENTRAL BANK OF INDIA REPRESENTED BY THE MANAGER, SAKTHIKULANGARA, QUILON. R1 TO R3 BY SRI.MATHEWS JACOB, SENIOR ADVOCATE R1 TO R3 BYADV. SRI.P.JACOB MATHEW BY ADV. SRI.M.P.R.NAIR, SRI.GEORGE.K.JOSEPH SRI.JOSEPH.J.THERATTIL THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 25/02/2011, ALONG WITH AS NO. 331 OF 1996 THE COURT ON 25/03/2011 DELIVERED THE FOLLOWING: tss THOTTATHIL B. RADHAKRISHNAN & P. BHAVADASAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - A.S. Nos. 647 of 1994 & 331 of 1996 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 25th day of March, 2011. C.R. JUDGMENT P. Bhavadasan,J. Two suits, namely, O.S. 23 of 1984, which was a suit for recovery of money and O.S.134 of 1984, which too was a suit for recovery of a debt due to the Bank were jointly tried and disposed of by a common judgment. O.S. 23 of 1984 was dismissed and O.S. 134 of 1984 was decreed. O.S. 134 of 1984 was by the fourth defendant in O.S. 23 of 1984 was directed against the plaintiff and three others including the Insurance Company, who is the third defendant in O.S.23 of 1984. O.S.23 of 1984 was to recover money on the basis of an insurance policy issued by the third defendant in the suit. A.S. 647 of 1994 arises out of the judgment and decree in O.S.23 of 1984 and A.S.331 of 1996 arises from O.S.134 of 1984. Since O.S.23 of 1984 was A.S.647/94 & 331/1996. 2 treated as the leading case, parties and facts are referred to as they are available in the said suit. 2. “Santhoshkumar”, a fishing vessel owned by the plaintiff in O.S.23 of 1984, hypothecated to the fourth defendant Bank, and insured with the third defendant, hit the bottom of the sea on 21.4.1981. The plaintiff, on the terms of the insurance policy, laid a claim for money due on the policy. The Insurance Company repudiated the claim. That necessitated the suit by the owner of the vessel. 3. The defence of the Insurance Company was that the accident had not occurred as alleged by the plaintiff and he has concealed the true version of the incident. According to them, as per the investigations conducted by them through various agencies, have yielded convincing reports that the story put forward by the plaintiff is untrue. Since the version of the plaintiff is not as it had occurred, A.S.647/94 & 331/1996. 3 they had denied their liability to pay any amount to the plaintiff. The fourth defendant Bank in the meanwhile instituted a suit for recovery of money due on the loan advanced by them for the fishing vessel, which was also hypothecated to them. 4. As already stated, the suits were tried jointly. The evidence consists of the testimony of P.Ws.1 to 10 and documents marked as Exts.A1 to A24 series from the side of the plaintiff. The contesting defendants examined D.Ws.1 to 4 and had Exts. B1 to B31 marked. Exts. X1 to X3 were marked as third party exhibits. The trial court on a consideration of the materials before it came to the following conclusions: i) The true version of the incident in which the vessel had capsized has not been put forward by the plaintiff. A.S.647/94 & 331/1996. 4 ii) There was serious doubt regarding the manner in which the accident had occurred. iii) Versions given by the witnesses examined on behalf of the plaintiff were contradictory and inconsistent. iv) It was found that it was due to negligent acts of the crew that the incident might have occurred. On the basis of these findings, the claim of the plaintiff as against the Insurance Company was rejected. As far as the other suit was concerned, the trial court came to the conclusion that the Bank is entitled to realize the amount claimed by them in O.S. 134 of 1984. 5. As regards A.S. 331 of 1996, which arises from O.S. 134 of 1984 is concerned, there is not much to be said in favour of defendants 1 to 3 in that suit. It is the fact that the vessel was hypothecated to the Bank and the Bank had A.S.647/94 & 331/1996. 5 advanced money on that basis. It is also not in dispute that the first defendant and guarantors had defaulted payment due from them. 6. The main dispute is regarding the issues involved in A.S.647 of 1994. There, the appellant, who is the plaintiff in O.S. 23 of 1984, claims that the findings of the trial court regarding the accident is baseless and contrary to the evidence on record. 7. After hearing both sides, it is felt that the following issues arise for consideration: i) Whether the suit is bad for mis-joinder of causes of action or mis-joinder of parties? ii) Whether the court fee paid is proper? iii) Whether the finding of the trial court that the Insurance Company is not liable since the accident A.S.647/94 & 331/1996. 6 had not occurred in the manner as alleged by the plaintiff sustainable? iv) What, if any, are the reliefs to be granted to the parties? 8. Learned counsel appearing for the appellant pointed out that there was no reason as to why the version given by the plaintiff could not be accepted. Even assuming that the story of rain and wind put forward by the plaintiff in O.S.23 of 1984, which were the causes for the accident were not acceptable, still the Insurance Company was liable under the terms of the policy. It is significant to notice, according to learned counsel that the investigators of the Insurance Company were also not able to ascertain the actual cause for the accident, but the only version given by the investigators is that it might not have occurred as alleged by the plaintiff. That, according to learned counsel, is insufficient to repudiate the policy. The trial court had come A.S.647/94 & 331/1996. 7 to the conclusion that in all probability, it was the negligence on the part of the crew that could have caused the accident. Assuming it to be so, still, the Insurance Company will be liable going by the terms of the policy. Learned counsel for the appellant placed considerable reliance on Section 55 of the Marine Insurance Act. As regards the contention that the suit filed by the plaintiff in O.S.23 of 1984 is bad for mis-joinder of parties and cause of action, learned counsel pointed out that even assuming it to be so, that is not a ground to dismiss the suit. There is a distinction between non-joinder and mis-joinder of parties. The suit may be bad for non-impleadment of necessary parties. That may be fatal. But as far as mis-joinder of parties and causes of action are concerned, the court has the option to direct the plaintiff to file separate suits or to go on with the trial of the suit. It is the discretion of the court. In support of his case, learned counsel for the appellant relied on the decision reported in Prem Lala Nahata v. Chandi Prasad (2007 (1) A.S.647/94 & 331/1996. 8 K.L.T. 910). As regards the contention regarding the deficiency in the court fee raised by the counsel for the respondent, counsel for the appellant contended that the court fee payable is to be ascertained with reference to the date of the suit and not with reference to the date of appeal. If that be so, the court fee paid is proper. Learned counsel relied on the decision reported in Usha v. Food Corporation of India (1997(1) K.L.T. 264). Learned counsel went on to point out that it could not be said that the suit is bad for mis-joinder of causes of action or mis-joinder of parties. If as a matter of fact, the plaintiff in O.S. 23 of 1984 succeeds in his attempt to make the Insurance Company liable, then as far as the Bank is concerned, the Insurance Company may be in the position of a garnishee. Therefore it could not be said that there was no connection between the two causes of actions. At any rate, according to learned counsel, the trial court was not justified in non-suiting him on the basis of the finding that A.S.647/94 & 331/1996. 9 the accident had occurred in a different manner. As long as it is not established that it was due to the deliberate act of the owner of the vessel or his crew, the Company is liable. 9. Learned counsel appearing for the respondents in her well prepared and well presented, persuasive arguments pointed out that the suit is bad for mis-joinder of cause of action and mis-joinder of parties. According to the learned counsel, the cause of action of the plaintiff in O.S.23 of 1984 against the Insurance Company is distinct and independent of the cause of action against the Bank and there are no common issues in the suits Two causes of action are distinct and independent and the suit ought to have been dismissed on that ground. It was highly irregular and improper on the part of the lower court to hold that the trial of the suit should go on in the above circumstances. Even if the lower court was inclined to proceed with the suit, learned counsel went on to say that the plaintiff should have A.S.647/94 & 331/1996. 10 been put to election. That was also not done. The finding of the court below that the suit is not bad for mis-joinder of parties and causes of action cannot be sustained. In support of her contention, learned counsel relied on the decisions reported in Ishwar Bhai C.Patel v. Harihar Behera ((1999) 3 SCC 457), Dwarke Prasad v. Kishan Lal (AIR 1986 Allahabad 174), (1994(3) CCC 542) and H.P.S.I.D. Corporation Ltd. v. Gobind Pharm Chem Pvt. Ltd. (AIR 2007 H.P. 3). 10. It was also contended on behalf of the Insurance Company that the court fee paid in O.S.23 of 1984 is quite inadequate. While court fee had been paid for the amount due from the Insurance Company, as regards the second prayer, which relates to an injunction restraining defendants 4 to 7, the Bank and the revenue authorities, from proceeding against the plaintiff in O.S.23 of 1984 for realisation of the amount due from him, the suit was valued A.S.647/94 & 331/1996. 11 only at Rs.150/- and court fee was paid only as per Section 27(c) of the Kerala Court Fees and Suits Valuation Act. Infact the plaintiff should have paid court fee for the amount that is sought to be recovered by the Bank by resorting to revenue recovery proceedings. On that ground also, the suit is bad. It was then contended that the trial court was fully justified in declining to grant relief to the plaintiff in O.S.23 of 1984 against the Insurance Company. It is very evident from a scrutiny of the evidence in the case that the version given by the plaintiff for the mishap of the vessel is totally untrue and is highly suspicious. The story put forward at the evidence stage is different from the one contained in the pleadings and the investigators deputed by the Insurance Company have categorically found that the accident had not occurred as alleged by the plaintiff. According to the learned counsel, the burden is on the plaintiff to show that the act, which led to the sinking of the vessel was due to the perils covered by the policy and the Insurance Company was A.S.647/94 & 331/1996. 12 liable for the loss. There is absolute want of evidence in this regard. Learned counsel emphasized that a careful reading of the evidence will show that the whole affair was a stage managed one so as to secure amount from the Insurance Company to wipe off the debt due to the Bank. The trial court was able to see through the game played by the plaintiff and according to the learned counsel no interference is called for with the judgment and decree of the trial court dismissing O.S.23 of 1984. 11. We shall first deal with the contention relating to mis-joinder of cause of action and mis-joinder of parties. This issue was infact raised before the trial court also. The court below was of the opinion that even assuming that there is mis-joinder of cause of action and parties, that is not a ground to dismiss the suit. The finding is very vehemently attacked by the learned counsel for the respondent before this court. Learned counsel referred to the relevant A.S.647/94 & 331/1996. 13 provision in the Code of Civil Procedure and pointed out that the suit could not have been proceeded with. 12. It will therefore be useful to refer to the relevant provisions. Order I Rule 3 reads as follows: “3. Who may be joined as defendants.- All persons may be joined in one suit as defendants where- (a) any right to relief in respect of, or arising out of, the same act or transaction or series of acts or transactions is alleged to exist against such persons, whether jointly, severally or in the alternative; and (b) if separate suit were brought against such persons, any common question of law or fact would arise.” Order I Rule 3-A reads as follows: “3-A. Power to order separate trials where joinder of defendants may embarrass or delay trial.- Where it appears to the Court A.S.647/94 & 331/1996. 14 that any joinder of defendants may embarrass or delay the trial of the suit, the court may order separate trials or make such other order as may be expedient in the interests of justice.” Order II Rule 3 reads as follows: “3. Joinder of causes of action.- (1) Save as otherwise provided, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendants jointly; and any plaintiff having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite such causes of action in the same suit. (2) Where causes of action are united, the jurisdiction of the Court as regards the suit shall depend on the amount or value of the aggregate subject-matters at the date of instituting the suit.” Order II Rule 6 reads as follows: A.S.647/94 & 331/1996. 15 “6. Power of court to order separate trials.- Where it appears to the court that the joinder of cause of action in one suit may embarrass or delay the trial or is otherwise inconvenient, the Court may order separate trials or make such other order as may be expedient in the interests of justice.” Order II Rule 7 reads as follows: “7. Objections as to misjoinder.- All objections on the ground of misjoinder of causes of action shall be taken at the earliest possible opportunity and, in all cases where issues are settled, at or before such settlement, unless the ground of objection has subsequently arisen, and any such objection not so taken shall be deemed to have been waived.” Order II Rule 8 reads as follows: “8. Plaint to be amended.- (1) Where an objection duly taken has been allowed by the Court, the plaintiff shall be permitted to select the cause of action with which he will proceed, and A.S.647/94 & 331/1996. 16 shall, within a time to be fixed by the Court, amend the plaint suitably. (2) When the plaintiff has selected the cause of action with which he will proceed, the Court shall pass an order giving him time within which to submit the amended plaint for the remaining cause of action and for making up the court fees that may be necessary. Should the plaintiff not comply with the Court's order, the court shall proceed as provided in Rule 18 of Order VI and as required by the provisions of the Court Fees Act.” 13. Section 99 of the Code of Civil Procedure may also have some relevance in this regard. It reads as follows: “99. No decree to be reversed or modified for error or irregularity not affecting merits or jurisdiction.- No decree shall be reversed or substantially varied, not shall any case be remanded, in appeal on account of any misjoinder or non-joinder or parties or causes of action or any error, defendant or irregularity in any proceedings in the suit, not affecting the merits of the case or the jurisdiction of the Court: A.S.647/94 & 331/1996. 17 Provided that nothing in this second shall apply to non-joinder of a necessary party.” 14. Before entering into a discussion regarding the above provisions, one may refer to the decisions relied on by the learned counsel for the respondents. In the decision reported in Ishwar Bhai C. Patel's case (supra) it was held as follows: “The purpose of order 1 Rule 3 is to avoid a multiplicity of suits. This rule, to some extent, also deals with the joinder of causes of action inasmuch as when the plaintiff frames his suit, he impleads persons as defendants against whom he claims to have a cause of action. Joinder of causes of action has been provided in Order 2 Rule 3, Order 1 Rule 3 and Order 2 Rule 3 if read together indicate that the question of joinder of parties also involves the joinder of causes of action. The simple principle is that a person is made a party in a suit because there is a cause of A.S.647/94 & 331/1996. 18 action against him and when causes of action are joined, the parties are also joined.” 15. In the decision reported in Dwarke Prasad's case (supra) it was held as follows: “As for the causes of action, O.2, R.3(1) provides that a plaintiff may unite in the same suit several causes of action against the same defendants or the same defendants jointly. In the instant case, there are distinct causes of action against the co-sharers in the property in the first place and the two separate tenants on the other. These causes of action cannot be said to arise against the various defendants jointly. Therefore, O.2, R.3 does not permit a joinder of causes of action as resorted to in the present. On account, thus, of the mis-joinder, both the parties and causes of action, the action suffers from multifariousness. It is wrong to hold that since O.2, R.6 does not apply to a case, a claim for election could not be made. It is true that to attract O.2, R.6 the A.S.647/94 & 331/1996. 19 joinder of causes of action should be such as is not bad initially on the basis of multifariousness. But then the Court ought not to lose sight of S.151, C.P.C.. In order that the ends of justice do not suffer and the action set up is not defeated due to a technical difficulty arising it was both just and incumbent upon the Court below to have accorded on its own motion and in any case on the prayer made for the plaintiff, the opportunity to make the election. The situation may have been different in case the plaintiff had failed to avail of such opportunity.” 16. The decision reported in Anil Kumar Singh's case (supra) deals with the case of necessary parties. 17. Coming back to the provisions of the CPC, Order 1 Rule 3 stipulates as to who all can be joined as defendants in a suit. Rule 3A gives ample power to the court when it finds that in a case joinder of some of the defendants may embarrass or delay the trial of the suit to A.S.647/94 & 331/1996. 20 order separate trial. Order 1 Rule 9 specifies that no suit shall be defeated by the reason of mis-joinder or non-joinder of parties. It enables the court to proceed against those persons and to grant reliefs as against those defendants. It will not be out of place here to refer to Order 1 Rule 13 also. The said provision stipulates that the objection on the ground of non-joinder and mis-joinder of parties shall be taken at the earliest opportunity. If not done, the objection will be deemed to have been waived. Coming to Order II Rule 3, that deals with joinder of causes of action. Like in the case of Order I Rule 3A, in Order II Rule 6 the court is given ample power to order separate trial when it is found that the joinder of causes of actions may embarrass or delay the trial or is otherwise inconvenient. Order II Rule 7 like Order I Rule 3 stipulates that the ground of mis-joinder of causes of action shall be preferred at the earliest possible opportunity. Order II Rule 8 provides that when the objection of the defendants regarding mis-joinder of causes A.S.647/94 & 331/1996. 21 of action is upheld, the plaintiff shall be given an opportunity to amend the plaint. 18. Coming to the facts of the case, in O.S.23 of 1984, it is true that the Insurance Company, from whom amount is claimed by the plaintiff, and the Bank, which has proceeded against the plaintiff in the suit for recovery of the amount due from him are joined as parties. It may prima facie appear that the two causes of actions are distinct, different and independent. It is also true that one is based on enforcement of a policy and the other is based on enforcement of a debt. The grievance as against the fourth defendant in O.S.23 of 1984 as highlighted in the suit is that the Bank is proceeding to recover the amount due from the plaintiff by resorting to revenue recovery proceedings. But as rightly pointed out by the learned counsel for the appellant, if the plaintiff in O.S.23 of 1984 succeeds in enforcing the liability of the Insurance Company, then the A.S.647/94 & 331/1996. 22 Insurance Company may be in the position of garnishee vis a vis the Bank. To that extent there may be some common element. 19. Defendants 1 to 3 in O.S.23 of 1984 had taken objection regarding mis-joinder of cause of action and mis-joinder of parties in their written statement. So they have complied with the statutory requirements. However, except for highlighting that the mis-joinder of cause of action and parties has caused inconvenience and hardship and even harassment to respondents 1 to 3, they are unable to show how they were prejudiced. Evidence was taken jointly and the matter was disposed of by a common judgment. A reading of the provisions already quoted leaves one in no doubt that a suit cannot be dismissed merely on the ground of mis-joinder of cause of action or parties unless it is shown that such mis-joinder has affected the merits of the case or jurisdiction of the court. It will be apposite here A.S.647/94 & 331/1996. 23 to refer to the decision reported in H.P.S.I.D. Corporation Ltd.'s case (supra). In the said case, almost an identical situation arose and being a suit against the Bank, the Insurance Company was also impleaded as a defendant in that suit. It