Holding

Order 1 Rule 3 and Order 2 Rule 3 together allow joinder of parties and causes of action, permitting the plaintiff to appeal against a decree against one defendant and to obtain a decree against the other, and an adverse inference under Section 114 of the Evidence Act is proper when a party abstains from the witness box.

Summary

The plaintiff, a registered money lender, sued the appellant and his father (defendant 2) for recovery of a loan advanced through a cheque drawn on the plaintiff’s bank account. The trial court decreed only against the father, holding that the appellant had not approached the plaintiff and that the father was not his agent. On appeal, the High Court modified the decree, holding both defendants jointly and severally liable and the plaintiff appealed the decree against the father. The appellant challenged the High Court’s jurisdiction to modify the decree and argued that the plaintiff could not appeal, and also contended that no adverse inference should be drawn as he did not appear as a witness. The Supreme Court held that Order 1 Rule 3 and Order 2 Rule 3 of the CPC permit joinder of parties and causes of action, allowing the plaintiff to appeal against a decree passed against one defendant and to seek a decree against the other, and that an adverse inference under Section 114 of the Evidence Act was proper against the appellant. Consequently, the appeal was dismissed.

Issues considered

Whether the plaintiff can appeal a decree passed against one defendant while seeking a decree against another under Order 1 Rule 3 and Order 2 Rule 3 of the CPC.
Whether the High Court was justified in modifying the trial court decree to hold both defendants jointly and severally liable.
Whether an adverse inference under Section 114 of the Evidence Act can be drawn against a party who does not appear as a witness.
Whether the father (defendant 2) can be treated as an agent of the plaintiff (defendant 1).

Legislation cited

Code of Civil Procedure, 1908s. Order 1 Rule 3, s. Order 2 Rule 3
Indian Evidence Act, 1872s. Section 114

Subjects

joinder of partiesjoinder of causes of actionCivil Procedure Codeadverse inferenceEvidence Act Section 114money lenderagencyappeal jurisdiction

Judgment

ISWAR BHAI C. PATEL@ BACHU BHAI PATEL A
v.
HARIHAR BEHARA AND ANR.

MARCH 16, 1999

[S. SAGHIR AHMAD AND M.B. SHAH, JJ.) B

Civil Procedure Code, 1908 :

Or. 1 R. 3 and Or. 2 R. ~Joinder of parties and causes of action-Ob-
ject of-Held, reading of both Or. 1 R. 3 and Or. 2 R.3 together indicated C
that the question of joinder of pa1ties involved joinder of causes of ac-
tion-The basic principle is that when the causes of action are joined the
parties are also to be joined.

Or. 1 R. 3 and Or. 2 R. 3 read with Section 96-Appeal lies against one
of two defendants against whom suit not decreed-Prayer in suit showing that D
decree claimed against the defendants jointly or severally-Suit decreed
against only one defendant-Appeal filed against the second defendant before
the High Court-Held, High Court was fully justified in decreeing the suit in
its entirety and passing a decree against the other defendant also-Orissa
Money Lenders Act, Section 8.
E
Evidence Act, 1872, Section 114--R. 2 advancing a loan to the appel-
lant at his instance by way of a cheque from the bank account of R. 1, a
money lender, whose account R. 2 was authorised to operate-Cheque en-
cashed by appellant-Not controverted by the appellant-Appellant not enter-
ing into the witness box nor presented himself for cross-examination-Held, F
an adverse presumption had to be drawn against the appellant on the basis
of principles contained in illustration (g) of Section 114-Evidence--Doctrine
of adverse presumption.

R. 1/PlaintitT was a registered money lender who used to advance
loan through a current account in a bank through his father R. 2, who was G
authorised to operate the bank account of R. 1. The appellant was Defen-
dant·1 in a suit against recovery on loans along with damages. When the
plaintiff's money lending licence got expired, he did not get it renewed.
Meanwhile the authority of R. 2 to operate the bank account continued. R.
2 on the request of the appellant, issued a cheque to him and the same was H
1097
1098 SUPREME COURT REPORTS (1999] 1 S.C.R.
A encashed by the appellant. Later on, when appellant failed to return back
the said amount to R. 2 in spite of repeated reminders, a suit filed by R.
1 against the appellant and R. 2. The Trial Court dismissed the suit
against the appellant but decreed it against R. 2 primarily on the ground
that the appellant had not approached R. 1 directly for the money and that
B R. 2 could not be treated as the agent of R. 1. In appeal, the High Court
modified the decree and decreed the suit against the appellant as well as
against R. 2. Hence this appeal.
.
It was contended by the appellant that R-1 had no right to appeal in
the High Court as the Trial Court had already decreed the suit which was
c his prayer in the suit.

Dismissing the appeal with costs, this Court.

HELD : 1.1. 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 cause:; of
D action inasmuch as when the plaintiff frames his suit,. he impleads pers ~ns
as defendants against whom he claims to have a cause of action. Joinder of "
causes of action has been provided for in Order 2 Rule 3. These 1two <C
provisions if read together indicatt:: that the question of joinder of parties i
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 action against
E him and when causes of action are joined, the parties are also joined.
[1103-C; 1102··GJ
2. In the instant case, the appellant has abstained from the witness
box and had not made any statement on oath in support of his pleading set
out in the written statement. 1\n adverse inference has, therefore, to be
F drawn against him under clause (g) of Section 114 of the Evidence Act. .,
Since it was specifically stated by respondent No. 2 in his 'statement on oath
-.:
that it was the instance of the appellant that he had issued the cheque on
the account of respondent No. 1 and the appellant, admittedly, had en-
cashed that cheque, an inference has to be drawn against the appellant that
G what he stated in the written statement was not correct. In these dr-
cumstances, the High Court is fully justified in decreeing the suit of respon-
dent No. 1 in its entirety and passing a decree against the appellant a1so.
[1106-H; 1107-A-B]

H 230;
Sardar Gurbakhsh Singh v. Gurdial Singh and Anr., AIR (1927) JPC,
Kirpa Singh v. Ajaipal Singh & Ors., AIR (1930) Lah. 1; Martand \
l.B.C.PATELv. HARIHARBEHARA[S.SAGHIRAHMAD,J.] 1099

..... ;;.. Pandharinath Chaudhari v. Radhabai Klishnarao Deshmukh, AIR (1931) A
Born 97; Bishan Das v. Gurbakhsh Singh & Anr., AIR (1934) Lah. 63; Puran
Das Che/a v. Kaltar Singh & Ors., AIR (1934) Lah. 398; Devji Shivji v.
Karsandas Ramji & Anr., AIR (1954) Pat 280; Gulla Kltaragjit Caipenter v.
Narsingh Nandkishore Rawat, AIR (1970) M.P. 225; Pranaballav Saha &
Anr. v. Smt. Tulsibala Dassi & Anr., AIR (1958) Cal. 713; Arjun Singh v.
B
Virender Nath & Anr., AIR (1971) All. 29; Bhagwan Dass v. Bhishan Chand
-- > & Ors., AIR (1974) Punj. & Har. 7, approved.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1417 of
1982.

From the Judgment and Order dated 8.11.78 of the Orissa High
c
Court in F.A. No. 147 of 1970.

S. Misra for R.S. Jena for the Appellant.

Krishnan Venugopal, D. Ranganathan, UdayTiwari and P.H. Parekh
D
" for the Respondents.
~

t The Judgment of the Court was delivered by

S. SAGHIR AHMAD, J. The appellant was defendant No. 1 in a suit
fileq by respondent No.1 for recovery of a sum of Rs.7,000 together with E
damages (Rs.1400) in the Trial Court which was dismissed as against him
but was decreed against the second defendant, namely, respondent No.2
who, incidentally, also is the natural father of respondent No.1 whe was
subsequently adopted by his maternal grandfather.

~ Respondent No.1 had a current account in the Central Bank of India F
Limited, Sambalpur Branch which was also operated by his natural father,
>
namely, respondent No.2.

According to the facts set out in the plaint, respondent No.1 was
registered as a money lender in October, 1958 and in that capacity he used
to advance loan through his natural father to different persons out of his G
account in the Bank which, as pointed out above, was also operated by his
natural father. On the expiry of the licence, he did not get it renewed but
:==a;
the authority of his natural father (defendant No.2) to operate the account
<'
continued and taking advantage of this authority, defendant (respondent)
No.2, on the persuasion of the appellant, issued a cheque for Rs.7,000 on H
1100 SUPREME COURT REPORTS [1999] 1 S.C.R.
A the current account ·of 1espondent No.1 on 29.4.1964 which was encashed x r
by the appellant. This amount was not paid back by the appellant in spite
of repeated demands and, therefore, the suit was filed both against the
appellant as also respondent No.2 who had issued the cheque to the
appellant.

B The appellant, in his written statement, pleaded that there was no
relationship of debtor and creditor with respondent No.I as the amount
was advanced personally by defendant (respondent) No.2 and, therefore,
respondent No.1 had no right to institute a suit against him specially wh.en
respondent No.2 while advancing the money to him had not acted as agent
C of respondent No.I. The appellant also raised the plea of Section 8 of the
Orissa Money Lenders Act and contended that since respondent No.1 was
not a registered money lender on the date on which the amount of Rs.7,000
was advanced to him as loan, the suit was not maintainable as the amount
was advanced in the course of regular money lending business. It was also
D pleaded that since some dispute had arisen between the appellant and
defendant (respondent) No.2 with regard to the adjustment of the
appellant's dues against respondent No.2, the latter, namely, respondent
No.2 got the suit filed through his s0n on false pleas.

Respondent No.2, in his separate written statement, pleaded that he
E was very close to the appellant who dealt in tobacco business and whenever
he was in need of money, he would approach respondent No.2 for financial
help and respondent No.2 would lend him the money required by the
appellant. It was pleaded that on 29th of April, 1964, the appellant had
approached respondent No.2 for payment of a sum of Rs.7,000 for a short
p period and, therefore, respondent No.2 issued a cheque for that amount iii
favour of the. appellant on that day on the current account of respondent
No.I in the Central Bank of India Ltd., Sambalpur Branch. When respon-
dent No.1 came to know of this transaction, he demanded repayment of
the amount but the appellant instead of paying the amount to respondent
No.1, proposed to set off his own dues against respondent No.2. It wa:;
G pleaded that since the appellant had withdrawn the amount from respon·
dent No.l's acc:ount through a cheque duly issued to him by respondem
No.2, he was liable to pay the amount to respondent No.I.

The suit was decreed by the Trial Court only against respondent No.2
H for a sum of Rs.8,400 but was dismissed as against the appellant on the
I.B.C. PATEL v. HARIHAR BEHARA[S. SAGHIRAHMAD,J.] 1101

...,,,. ground that the appellant had not approached.respondent No.1 nor had A
respondent No.1 advanced the amount of Rs.7,000 to the appellant. The
Trial Court was of the opinion that the case of agency was not made out
and respondent No.2 could not be treated to be the agent of the appellant.
It was found that the transaction in question was directly entered into by
the appellant with respondent No.2 and respondent No.1 was in no way B
involved at any stage in that transaction. The High Court, in appeal,
..... modified the decree passed by the Trial Court and decreed the suit against
}
both the defendants, namely, the present appellant as also respondent
No.2. It is against this judgment that the present appeal has been filed.

The contention raised by the learned counsel for the appellant is that c
the respondent No.1 had no right to institute an appeal in the High Court
as the Trial Court had already decreed the suit. It is contended that though
the decree was passed only against respondent No.2 and not against the
appellant, it was wholly in consonance with the prayer made by respondent
No.l himself in his plaint in which he had claimed a decree either against D
... the present appellant or against respondent No.2. Since the suit was
decreed against respondent No.2, there was no occasion to file an appeal
t against that decree in the High Court.

Para 9 of the plaint, a copy of which was placed before us, reads as
under:-
E

"9. Plaintiff prays for a decree of Rs. 8,400 with costs of suit against
both the defendants, to be realised - severally from either of the
defendants, with interest pendentilite and future at the rate of 7
PC. per annum." F
~

>- The relief clause of the plaint extracted above would show that respondent
No.1 had claimed a decree for a sum of Rs.8,4GO against both the defen-
dants so that it could be rnalised from both the defendants or from either
of them. This was a legitimate and reasonable prayer. Since defendant
(respondent) No.2 had advanced the amount in question to the appellant G
on the account of respondent No.1, both of them, namely, the appellant
and respondent No.2 were jointly and severally liable to pay that amount
---;.. to respondent No.1. Having claimed a decree against both lhe defendants,
the plaintiff (respondent No.1) put it in the plaint that a decree be passed
against both the defendants so that the decretal amount may be realised H
1102 SUPREME COURT REPORTS [1999] 1 S.C.R.
A from either of the defendants.
Since the Trial Court had decreed the suit only against respondent
No.2 and not against the appellant, it was open to respondent No.l, in this
situation, to invoke the jurisdiction of the appellate court for decreeing the
suit even against the appellant.
B
This can be viewed from another angle. .....
Order 1 Rule 3 provides as under:-

"R.3. Who may be joined as defendants.
c 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;
D and

(b) if separate suits were brought against such persons, any
common question of law or fact would arise." t

This Rule requires all persons to be joined as defendants in a suit
E against whom any right to relief exists provided that such right is based on
the same act or transaction or series of acts or transactions against those
persons whether jointly, severally or in the alternative. The additional
factor is that if separate suits were brought against such persons, common
questions of law or fact would arise. The purpose of the Rule is to avoid
F 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 for in Order 2 Rule 3 which provides
G as under:-
"R.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
H same defendants jointly; and any plaintiffs having causes of action
LB.C. PATEL v. HARIHAR BEHARA [S. SAGHIR AHMAD, J.] 1103

. .l>. in which they are jointly interested against the same defendant or A
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 df pend on the amount or value of

- ..
the aggregate subject-matters at the date of instituting the suit."

These two provisions, namely, Order 1 Rule 3 and Order 2 Rule 3 if
read together indicate that the question of joinder of parties also involves
B

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 action against him and
when causes of action are joined, the parties are also joined.
c
Now, the respondent No.l in his plaint had pleaded that from his
current account in a bank which was authorised to be operated by his
father, namely, respondent No.2 also, an amount of Rs.7,000 was lent by a
cheque to the appellant. Since the money had reached in the hands of the D
"'
appellant, though not directly through respondent No.1 but via his father,
he had a cause of action against both the defendants, namely, the appellant
·• and respondent No.2 both of whom were, therefore, impleaded as defen-
dants in the suit particularly as it was one transaction in which both were
involved. In this situation, therefore, if the suit was dismissed against one
E
of them by the Trial Court, respondent No.1 had the right to file an appeal
against the person against whom the suit was dismissed, notwithstanding
that it was decreed against the other.

Learned counsel for the appellant next contended that the Trial
,. Court was justified in recording a finding that it was a transaction which F
had taken place directly and personally between respondent No.2 and the
>
appellant in which respondent No.1 had, at no stage, figured and, there-
fore, the suit was decreed only against defendant (respondent) No.2 and
not against the appellant. It is also contended that the Trial Court was
justified in recording a finding that the case of "agency" was not established
--f
_j and the High Court was not justified in upsetting that finding. This c~n- G
tention too has no merit.
--,.. Admittedly defendant No.1 had an account in the Central Bank of
India Limited, Sambalpur Branch which his father, namely, respondent
No.2, was authorised to operate. It is also an admitted fact that it was from H
1104 SUPREME COURT REPORTS [1999] 1 S.C.R.

A this account that the amount was advanced to the appellant by respondent
No.2. It has been given out in the statement of respondent No.2 that when
the appellant had approached him for a loan of Rs.7,000/-, he had explicitly
told him that he had no money to lend whereupon the appellant had
himself suggested to advance the loan from the account of respondent No.1
B and it was on his suggestion that th.e respondent No.2 issued the cheque
to the appellant which the appellant, admittedly, encashed. This fact has
not been controverted by the dppellant who did not enter the witness box
to make a statement on oath denying the statement of defendant (respon- .
,j
dent) No.2 that it was at his instance that respondent No.2 had advanced
the amount of Rs. 7,000 to the appellant by issuing a cheque on the account
C of defendant (respondent) No.1. Having not entered into the witness box
and having not presented himself for cross- examination, an adverse
presumption has to be drawn against him on the basis of principles con-
tained in illustration (g) of Section 114 of the Evidence Act.

As early as in 1927, the Privy Council in Sardar Gurbakhsh Si11gh v.
D Gurdial Si11gh and A11other, AIR (1927) Privy Council 230, took note of a
practice prevalent in those days of not examining the parties as a witness
in the case and leavmg it to the other party to call that party so that the
other party may be treated as the witness of the first party. Their Lordships
of the Privy Council observed as under:-
E
"Notice has frequently been taken by this Board of this style of
procedure. It sometimes takes the form of a manoeuvre under
which counsel does not call his own client, who is an essential
witness, but endeavours to force the other party to call him, and
so suffer the discomfiture of having him treated as his, the other
F party's, own witness. .. '-

This is thought to be clever, but it is a bad and degrading """
practice. Lord Atkinson dealt with the subject in Lal Ku11war v. ~
Chiranji Lal (1), calling it "a vicious practice, unworthy of a ...--
high-toned or reputable system of advocacy." t
G I-
t
..-
They further observed as under:-

"But in any view her non-appearance as a witness, she being ~
present in Court, would be the strongest possible circumstance
H going to discredit the truth of her case." L
l-
I.B.C.PATELv. HARIHARBEHARA[S.SAGHIRAHMAD,J.] 1105

..,, >., Their Lordships also took note of the High Court finding which was A
to the following effect:-

"It is true that she has not gone into the witness box, but she
made a full statement before Chaudhri Kesar Ram, and it does
not seem likely that her evidence before the Subordinate Judge
would have added materially to what she had said in the statement." B
~
~
They observed:-
.... "Their lordships disapprove of such reasoning. The true object
to be achieved by a Court of justice can only be furthered with
propriety by the testimony of the party who personally knowing c
the whole circumstances of the case can dispel the suspicions
attaching to it. The story can then be subjected in all i~s particulars
to cross-examination."

This decision has since been relied upon practically by all the High
D
Courts. The Lahore High Court in Kirpa Singh v. Ajaipal Singh and Others,
AIR (1930) Lahore 1, observed as under:-
-f

"It is significant that while the plaintiffs put the defendant in the
witness-box they themselves had not the courage to go into the
witness-box. Plaintiffs were the best persons to give evidence as to E
the "interest" possessed by them in the institution and their failure
to go into the witness-box must in the circumstances go strongly
against them."

This d.ecision was also relied upon by the Bombay High Court in
" Martand Pandharinath Chaudhari v. Radhabai Krishnarao Deshmukh, AIR F
>- (1931) Bombay 97, which observed as under:-

"It is the Munden duty of a party personally knowing the facts and
circumstances, to give evidence on his own behalf and to submit
to cross-examination and his non-appearance as a witness would
be the strongest possible circumstance which will go to discredit
G
the truth of his case."
~-.,.
.
The Lahore High Court in two other cases in 1934, namely, Bishan
J Das v. Gurbakhsh Singh and Another, AIR (1934) Lahore 63(2) and Puran
Das Chela v. Kartar Singh and Others, AIR (1934) Lahore 398 took the H
./
1106 SUPREME COURT REPORTS (1999] 1 S.C.R.
A same view. ,.. ...
A Division Bench of the Patna High Court in Devji Shivji v. Karsan-
das Ramji and Another, AIR {1954) Patna 280, relying upon the decision
of the Privy Council in Sardar Gurbakhsh Singh v. Gurdial Singh and
Another (supra) and the Madhya Prades4 High Court in Gulla Kharagjit
B Carpenter v. Narsingh Nandkishore Rawat, AIR (1970) Madhya Pradesh 225
have also taken the same view. The Madhya Pradesh High Court also relied '<
upon the following observation of the Calcutta High Court in Pranballav i
Saha & Allr. v. Smt. Tulsibala Dassi & Anr., AIR {1958) Cal. 713 :-

"The very fact that the defendant neither came to the box
c herself nor called any witness to contradict evidence given on oath
against her shows that these facts cannot be denied. What was
prima f acie against her became conclusive proof by her failure to
deny.

D "The Allahabad High Court in Arjw1 Singh v. Virender Nath and
Another, AIR {1971) Allahabad 29, held that :- '

"the explanation of any admission or conduct on the part of a party t
must, if the party is alive and capable of giving evidence, come
from him and the court would not imagine an explanation which
E a party himself has not chosen to give."

It was further observed that:-

"If such a party abstains from entering the witness box it must give

F
rise to an inference adverse against him.
.
A Division Bench of the Punjab & Haryana High Court also in
-'\
Bhagwan Dass v. Bhishan Chand and Others, AIR (1974) Punjab &
Haryana 7, drew a presumption under Section 114 of the Evidence Act that
if a party does not enter into the witness box, an adverse presumption has
to be drawn against that party.
G
Applying the principles stated above to the instant case, it would be
found that in the instant case also the appellant had abstained from the
x·---r
witness box and had not made any statement on oath in support of his
pleading set out in the written statement. An adverse inference has, there-
H fore, to be drawn against him. Since it was specifically stated by respondent
I

I.B.C. PATEL v. HARIHAR BEHARA [S. SAGHIR AHMAD, J.) 1107

No.2 in his statement on oath that it was at the instance of the appellant A
that he had issued the cheque on the account of respondent No.l in the
Central Bank of India Ltd., Sambalpur Branch, and the appellant, admit-
tedly, had encashed that cheque, an inference has to be drawn against the
appellant that what he stated in the written statement was not correct. In
these circumstances, the High Court was fully justified in decreeing the suit
B
.... of respondent No.l in its entirety and passing a decree against the appel-
lant also.

For the reasons stated above, we find no merit in this appeal which
is dismissed with costs.

R.K.S. Appeal dismissed. c