NEDUNGADI BANK, LTD Vs. OFFICIAL ASSIGNEE OF MADRAS

JUDGEMENT

(1.) In this suit the plaintiff is the Official Assignee, representing the estate of Dumaine & Co., who have been adjudged insolvents. Dumaine & Co., it appears, were exporters of groundnuts, and in the course of their business they pledged a large quantity of groundnuts to the Nedungadi Bank, who are the defendants, received loans on these groundnuts, sold the groundnuts to various persons in other countries and had them shipped by the defendants, who received the bills of lading and the bills of exchange drawn on the purchasers and applied the proceeds of the bills of exchange after getting them discounted by another bank towards the repayment of the loans they had made to Dumaine & Co., crediting the balance to Dumaine & Co. The Official Assignee in this suit alleges that the defendants have not accounted for 7,169 bags of groundnuts and prays that they may be delivered to him or their value, about Rs. 1,59,000, or in the alternative that this sum of Rs. 1,50,000 may be paid to him as damages for conversion. The defendants after some delay put in their written statement. The plaintiff applied for an order for particulars, which was made by the Master. Eventually, when this matter came up before the learned Chief Justice on 15 November, 1929, the particulars, had not been given in full, and the plaintiff applied that the defendants should be dealt with for contempt or that their defence should be struck out. The learned Chief Justice made an order that their defence should be struck out. The present appeal is against that order.

(2.) Mr. Doraiswami Aiyar, who appears for the defendants, contends first that the learned Chief Justice had no jurisdiction to make that order, and secondly that it was not in the circumstances a proper order to make. It will be convenient to deal with the question of jurisdiction first.

(3.) Rule 5 of Order 6, Civil Procedure Code, provides that a further and better statement of the nature of the claim or defence or further and better particulars of any matter stated in any pleading may in all cases be ordered, upon such terms, as to costs and, otherwise, as may be just. Mr. Doraiswami Aiyar contends that that rule does not empower the Court to strike out the defence of the defendant if he does not give particulars when ordered to do so under the rule; and he has asked us to contrast that rule with Rule 21 of Order 11, Civil Procedure Code, which provides that, where any defendant fails to comply with any order to answer interrogatories, or for discovery or inspection of documents he shall be liable to have his defence struck out. Mr. Doraiswami Aiyar argued that the penalty of having the defence struck out is explicitly provided for in Rule 21 of Order 11, but that it is not mentioned in Rule 5 of Order 6, and that, he urges, is very significant. There is a contrast between the two rules. But, as Mr. Grant who appears for the plaintiff has pointed out, Order 11 does not deal with pleadings, and, therefore, it may have been thought necessary that, if the penalty for failure to answer interrogatories or to give discovery or inspection was to be provided in the shape of striking out pleadings, it should be explicitly set out, though that might not be necessary in an order dealing with pleadings and their amplification by particulars. It is interesting to notice that both Rule 5 of Order 6 and Rule 21 of Order 11, Civil Procedure Code, correspond to Rules of the Supreme Court in England. There is just the same contrast between Rule 21 of Order 31 and Rule 7 of Order 19 of the Rules of the Supreme Court as there is between Rule 21 of Order 11, and Rule 5 of Order 6 of our Code, and yet the contrast was not held by the Court of Appeal to be of any significance in Davey V/s. Bentinck (1893) 1 Q.B.D. 185 which dealt with the dismissal of a suit for failure to give particulars and is equally applicable to striking out a defence for failure to give particulars. In that case a plaintiff was ordered to give particulars and a further order was made that, if he did not do so within a certain date, the suit would be dismissed. It was argued that Rule 7 of Order 19 of the Rules of the Supreme Court, corresponding to Rule 5 of Order 6, Civil Procedure Code, did not justify the dismissal of the suit because it only provided for particulars being called for upon such terms as to costs and otherwise as might be just, and the contention was that the terms could only be in respect of costs or some incidental matter. The Court of Appeal did not accept that contention. They held that under the Rules of the Supreme Court a condition might be added to the order for particulars that, if they were not given by a certain date, the suit should be dismissed. In this case it happened that, when the Master made an order for particulars, he fixed a date for those particulars to be given ; but he did not say in so many words that, if the particulars were not given by that date, the defence would be struck out. Does that really make any difference in the matter? Mr. Doraiswami Aiyar's contention is that, because that threat was not added to the order, the defendants may take up the position that they were not warned that their defence would be struck out. But, if we examine the matter, I do not think that the absence of the threat or warning really makes any serious difference except in one respect. If the Master had said "Particulars must be given within a certain time, otherwise the defence will be struck out," except on an appeal from his order there might have been great difficulty in extending the time for giving particulars; but, as he fixed the time without any such penalty being explicitly added, the Court of course could have extended the time. There is no doubt about that. As a matter of fact on appeal Eddy, J., did not extend the time. I understand that, when the matter came up before the learned Chief Justice on 15 November, 1929, an oral application was made to him that he should extend the time. Undoubtedly that could have been done. But, when a time was fixed and the defendants disregarded it, they knew that they did so at their peril. The time might be extended: the time might not be extended. And, if the time was not extended, what would be the result? The particulars, which the Master had found necessary and which Eddy, J., on appeal had found necessary for the case, would not have been given. That means that the written statement of the defendants was an incomplete, insufficient and ineffective defence, and the result would simply be that the position of the defendants would be practically equivalent to that of a defendant who had put in no defence. If that is the correct way of viewing the matter, when the learned Chief Justice did not extend the time any further, the position was that the defendants had not put in a proper defence, and the case would naturally and properly go to the undefended board. Does it make any difference that the learned Chief Justice has added the words. "I should strike out the defendants defence," which do not appear in Rule 5 of Order 6 of the Code. To my mind it makes no difference whatever. There is only one Indian case which has been quoted before us, dealing directly with this matter, Gauri Shankar V/s. Musammat Manki Kunwar (1923) I.L.R. 45 A. 624. In that case a Bench of the Allahabad High Court considered what the procedure in such a matter should be and gave directions to subordinate Courts how they should act in connection with orders for particulars. In the judgment of the learned Judges it is said that "Subordinate Judges should, when ordering particulars to be given, order the party in default to pay a specified sum of costs to the other side for the costs occasioned by the application, such payment should be made on or before the delivery of the particulars. If the order is disobeyed and the plaintiff is in default, he should have his action stayed, and, if the defendant is in default, his defence should be struck out". That appears pretty clear. But it has been suggested that what the learned Judges meant is only that, if the order for payment of costs is disobeyed, the defence of the defaulting party should be struck out. Let us examine that for a minute. What is contended is that, should the Court order particulars to be given and also order the defendant to pay costs at the time of filing his particulars, if he gives the particulars only but does not pay the costs, then his defence is to be struck out. Surely, a fortiori, if he does not give the particulars at all, the learned Judges would be of opinion that his defence should be struck out. I have no doubt that the learned Judges held the view that, when a defendant has been ordered to give particulars by a certain time and does not give them by that time or within the extended time, if there is an extension, his defence should be struck out. With that opinion I agree. That being so, it appears to me that the learned Chief Justice certainly had jurisdiction to make the order which he has made in this case.