ARJUNAN Vs. NARAYANAN NAIR

JUDGEMENT

(1.) THE plaintiff in O. S. No. 111 of 1958 on the file of the Sub -Court, Trivandrum is the petitioner in the Civil Revision Petition. He entered into a contract to construct a building for the respondent -defendant on a site belonging to the defendant. The suit has been laid for the balance amount due to the petitioner for the construction of the building. A few days prior to the filing of the said suit the respondent filed another suit, O.S. No. 683 of 1958, in the court of the Munsiff of Trivandrum for realisation of amounts alleged to have been overdrawn by the petitioner under the same contract. This suit had been transferred to the Subordinate Judge's Court and renumbered as O. S. No. 14 of 1959 to be tried jointly with O. S. No. 111 of 1958. The defendant in O. S. No. 111 of 1958 filed C.M.P. No. 1153 of 1959 for security for costs in the suit under Order XXV Rule (I) C.P.C. The only material allegation in the petition was that the plaintiff was possessed of no property and in case the suit was dismissed with costs, it was not possible for the defendant to realise his costs. This allegation not having been seriously controverted in the counter -affidavit of the plaintiff, the lower court directed the plaintiff to furnish security for all costs incurred and likely to be incurred in the suit by the defendant. The plaintiff has filed the above Civil Revision Petition against this order. The only reason given by the learned Subordinate Judge for allowing the petition is the apprehension of the defendant that he may not be able to recover his costs in case the suit is dismissed. The learned Judge observes:

(2.) IN the present case the position is stronger in favour of the plaintiff. The plaintiff's suit is in the nature of a cross -suit or cross -claim to the defendant's earlier suit, both being based on the same contract. In such a case the court should be more reluctant to direct security for costs. In New Fenix etc. De Madrid v General Accident etc. Assurance Corporation Ltd., (1911(2) K. B. 619) it was laid down that it was for the Court to consider, in the exercise of its discretion, whether, having regard to the circumstances of the particular case, the cross -claim must be treated as made, substantially by way of defence to the action or whether it must be regarded as being in the nature of an independent claim made in respect of matters foreign to that action. The latter case may be one for security for costs but in the former security should not ordinarily be ordered. In the present case the petitioner's action being in the nature of a cross -suit or cross -claim arising out of the same transaction, no security for costs should have been ordered. It is thus clear that, in the present case, the lower court has not exercised the discretion vested in it under Order XXV Rule 1(1) C.P.C. in a judicially proper manner. I, therefore, allow the Civil Revision Petition and set aside the order of the lower court. The respondent will pay the costs of the petitioner.