ORDER
1. Third respondent-bank filed OA No. 88 of 1995 before the second respondent-Tribunal against the first and second petitioners herein (borrower and Guarantor respectively) under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (‘Act’ for short). The reliefs claimed in the said original application are.-
1.Directing petitioners herein personally to pay the amounts mentioned in Schedule ‘C’ to the application along with interest at 19.75% per annum compounded quarterly;
2.Directing sale of mortgaged immoveable property described in ‘B’ schedule as to the application; and
3.Award costs of the proceedings including the fee paid to the Tribunal and the Advocates.
2. In Schedule ‘C’ to the original application, the bank claimed two amounts i.e., a sum of Rs. 4,28,881.20 in regard to Account No. PSL/Gen. 5/1989 and a sum of Rs. 7,68,386/- due in regard to Account No. OSL/ML/155/89. The total amount claimed is Rs. 11,97,267.20.
3. The petitioners on entering appearance, made an application (IA No. II) for rejection of the Bank’s Original Application, as being barred by Rule 10 of the Debt Recovery Tribunal (Procedure) Rules, 1993 (‘Rules’ for short), which reads as follows:
“Plural remedies.–An application shall not seek relief or reliefs based on more than a single cause of action in one single application unless the reliefs prayed for are consequential to one another”.
Petitioners contended that the application was filed on two causes of action; that the Bank had averred two distinct and separate causes of action, the first in regard to a housing loan (Account No. PSL/GEN. 5/1989 for Rs. 2.00 lakhs) and the second in regard to a vehicle loan
(Account No. OSL/ML. 155/1989 for Rs. 2.5 lakhs); that the bank could not have filed a single application in regard to two separate causes of action and that the reliefs sought by the bank were not consequential to one another; that the amount claimed in respect of each of the two accounts was less than Rs. 10 lakhs and but for the fact that a single application was filed by clubbing the two claims, the Debt Recovery Tribunal would not have jurisdiction to try the original application; that the bank had deliberately clubbed two separate causes of action to bring the claims within the jurisdiction of the Tribunal and thereby avoid filing of two separate suits in a Civil Court.
4. The Tribunal has rejected IA No. II, by order dated 14-7-1997 (Annexure-B) holding that there was one security for both the loans advanced to the same borrower with the same guarantor and therefore the facts pleaded and prayer should be treated as disclosing a single cause of action. Feeling aggrieved, the petitioner has filed this petition and sought quashing of the order of the Tribunal dated 14-7-1997 (Annexure-B) and a direction to the Tribunal to reject/return the application filed by the bank under Section 19 of the Act.
5. The Bank contends that the writ petition is liable to be dismissed as not maintainable, as an alternative remedy by way of appeal was available under Section 20 of the Act. In the normal course, this petition was liable to be rejected, on the ground of availability of alternative remedy. But, as the matter involves interpretation of Rule 10 and its scope, affecting the very jurisdiction of the Tribunal to entertain the application, the petition deserves to be considered on merits and cannot be rejected at the threshold, on the ground of availability of alternative remedy.
6. In the original application filed under Section 19, the bank, after referring to the advancing of the two loans and the amounts due, has pleaded that the borrower had mortgaged her property (described in Schedule ‘B’ to the application) as security for one of the loans by depositing the title deeds and confirmed such deposit on 16-5-1989; that subsequently on 8-11-1989, the borrower addressed a letter dated 8-11-1989 confirming re-deposit of the title deeds, extending the mortgage by deposit of title deeds to the other loan also; and that thus, the two loans are covered by two mortgages created by the borrower in favour of the bank in respect of the same property. In Para XVII of the original application, the bank averred thus in regard to filing of a single application in regard to two accounts:
“The second respondent has stood guarantee for the repayment of both the loans advanced to the first respondent. Both the loans were advanced to the first respondent for her personal needs and construction of the house for her. ‘B’ schedule property is common and single security for both the loans by way of mortgage. Therefore, the two items of loan constitute for all purposes, one loan and a continuing cause of action. Further, the mortgage of ‘B’ schedule property cannot be enforced piecemeal. Under the circumstances, one single application is filed”.
[Note: Reference to first respondent and second respondent in Para XVII extracted above is to the borrower and Guarantor, who
are petitioners 1 and 2 in this writ petition].
6(1) The prayer in the application is for a direction to the borrower and guarantor to pay the amounts due under the two accounts (in all Rs. 11,97,267.20 with interest and costs) and failing payment for sale of the mortgaged property for realisation of the total amount due. The application is thus for enforcement of the mortgage.
6(2) Reliance is placed by the Bank on Section 67A of the Transfer of Property Act, 1882, which mandates the mortgagee to bring a single suit on several mortgages to contend that a single application could be filed, if the amounts advanced under two different accounts are secured by mortgage of a single property.
7. Two questions arise for consideration: (i) What is ’cause of action’ or ‘single cause of action’? (ii) Whether the application violates Rule 10?
8. The expression ’cause of action’ is not defined in any enactment. It has different meanings in different contexts or in different circumstances. Its meaning may be restricted, wide, compendious, contractual or contextual. As Justice Mahmood exclaims “the expression ’cause of action’ has always unfortunately had a signification which cannot be called precise or definite” in Narsingh Das v Mangal Dubey. The following accepted and recognised definitions will illustrate the diversity of its meaning:
(a) The expression ’cause of action’ has one meaning in relation to the basis of a claim and another in relation to the jurisdiction of the Court. The former is the restricted and the latter is the wider meaning of cause of action. In the restricted sense it includes facts constituting the infringement of the right and is thus the cause which is the foundation of the suit. In the wider sense, it includes the facts constituting the right itself — Jaharlal Pagalia v Union of India.
(b) The expression ’cause of action’ has been compendiously defined to mean every fact which will be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved — Read v Brown?,
(c) ‘Cause of action’ refers to the grounds set forth in the plaint, that is the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour — Mt. Chand Koer v Partab Singh.
(d) A ’cause of action’ may be defined in general terms to be a legal right, invaded without justification or sufficient excuse. Upon such invasion, a cause of action arises, which entitles the party injured to some relief by the application of such remedies as the laws may afford. But the cause of action, and the remedy sought, are entirely different matters. Though one precedes and gives rise to the other, they are separate and distinct from each other, and are governed by different rules and principles – 53 Ame. Reports 730.
9. These diverse definitions and meanings make it clear that the words ‘single cause of action’ used in Rule 10 should be interpreted in the context in which they are used. They are used in the context of regulating the manner of filing applications before the Tribunal for recovery of amounts due to Banks and Financial Institutions. The words ‘seeking relief or reliefs based on more than a single cause of action’ make it clear that they are used in relation to the basis of the claim and not the jurisdiction of the Court/Tribunal. So interpreted, ‘single cause of action’ would refer to the bundle of facts constituting the right and infringement, relating to a transaction or a series of transactions governed by the same contract, agreement or arrangement. For example if the Bank grants a bill discounting facility to a specified limit to a borrower governed by a single set of loan documents (which may include a Bill Discounting Agreement, an on-demand promissory note for the Bill discounting limit and a guarantee) the acts or transactions of discounting several Bills under the said facility and the claim for the amount due on dishonour of several of such discounted bills will form a ‘single cause of action’, as they relate to a single facility governed by a common set of loan documents, even though by applying a narrower meaning, it is possible to say that each discounting of a bill and dishonour thereof gives rise to a different cause of action. Similarly when a Bank extends an overdraft facility governed by a set of loan documents (Overdraft Agreement, Promissory Note, Guarantee, etc.), though each transaction of drawing from the account may, by itself, amount to a cause of action, the word ‘single cause of action’ in the context and sense in which it is used, will include the series of overdrafts/transactions in the overdraft account, and the non-payment of the ultimate balance in the account. The reason is obvious. Even though each transaction in the account furnished a proximate cause, the real cause or the foundation is the agreement between the parties under which the bank agrees to lend or extend a certain facility, subject to a set of conditions. Without the said agreement, the series of transactions would not have taken place or permitted to take place at all.
10. Let me now examine whether the claim for recovery of the aggregate of the amounts due in the two accounts, provides a ‘single cause of action’, in the light of the above principles. The housing loan is governed by housing loan documents executed by the borrower. The car loan is governed by car loan documents executed by the borrower. They are two separate and distinct loans given at different points of time, governed by different contracts, though the lender-Bank and the borrower is the
same and the relief claimed is a single relief, that is, to enforce the mortgages to recover the aggregate of the amounts due in both the accounts. A single relief does not mean a single cause of action. Nor does several reliefs necessarily signify several causes of action. There can be several reliefs based on a ‘single cause of action’ and a single relief based on several causes of action. The non-payment of the amounts due in two accounts secured by two mortgages gives rise to two separate causes of action. Merely because the relief claimed is common or single, it does not mean that the application is based on a single cause of action. The Bank’s application is therefore based on more than a single cause of action.
11(1) But, Rule 10 consists of two parts. The first part requires that the reliefer reliefs claimed in the application should be based on a single cause of action. This implies a bar on filing a single application on the basis of several causes of action. The second part of the Rule contains the exception to the said rule. It provides that where the reliefs prayed for are consequential to each other, then the application may relate to more than a single cause of action. The word ‘consequential’ means ‘happening as a direct result of an event or situation’ (Collins Cobuild English Dictionary). It is the correlative of the word ’cause’ and is the “result following in natural sequence from an event which is adapted to produce, or to aid in producing such result” (Black’s Law Dictionary). The effect of the second part of Rule 10 is that where the relief/s cannot be split, and seeking a particular relief or set of reliefs necessarily involves enforcing more than one cause of action, then it is permissible to file a single application in regard to more than a ‘single cause of action’.
11(2) The words “reliefs prayed for are consequential to one another” are not to be confused with the words “consequential reliefs”. Consequential relief is a relief which flows directly, as a natural sequence from, and incidental to, the main and substantive relief. It is not something that is claimed independently as a substantive relief. It is wholly connected to the main or substantive relief and therefore arises from the same cause of action which gives rise to the substantive relief. A consequential relief is covered by and included in the first part of Rule 10 which enables an application being filed seeking ‘relief or reliefs’ based on a ‘single cause of action’. On the other hand, the words ‘consequential to one another’ mean that each of the reliefs may be a main and substantive relief which need not flow from the other and which may be based on different causes of action, but which are connected or linked, and claiming of one necessarily involves or requires claiming of the other or vice-versa. The second part of Rule 10 therefore permits reliefs based on more than one cause of action being claimed in an application, provided they are so connected that seeking of one, requires seeking of the other, either as of necessity or on account of a statutory mandate.
11(3) A typical illustration in regard to the exception contained in the second part of Rule 10 is, where the borrower has given a common security to two separate loans, by creating two mortgages or by a single mortgage. In such an event, even though non-payment of the two loans
may give rise to two causes of action, the common relief claimed is enforcing the mortgage; and enforcement of the mortgage in regard to one loan requires enforcement of the mortgage in regard to the other loan, having regard to Section 67A of Transfer of Property Act, even though the causes of action for the two loans are different. Where different loans (furnishing different causes of action) are secured by two or more mortgages of the same property, Section 67A of the Transfer of Property Act compels the mortgagee to sue on all the mortgages in respect of which the mortgage money has become due, by bringing a single action. That is, as a consequence of seeking the relief of enforcement of the mortgage in respect of one loan (which is the subject of one cause of action), the mortgagee is required to seek the relief of enforcing the other mortgage in regard to the other loan (non-payment of which furnishes a different cause of action). Thus, the reliefs in regard to two separate loans covered by two mortgages of the same property, become consequential to one another.
11. (4) Therefore, a single original application under Section 19 to recover the amounts due under two or more accounts (giving rise to more than a single cause of action) is not barred by Rule 10, where the amounts due are covered by two or more mortgages of the same immoveable property. The position would be no different even if two or more loans are secured by a single mortgage instead of several mortgages.
12. The Bank has specifically sought enforcement of the mortgages in regard to the two accounts, by praying for sale of the mortgaged ‘B’ schedule immoveable property. Thus, the original application filed by the Bank falls under the exception provided under Rule 10 and therefore not barred by Rule 10.
13. I express no opinion on the vires of Rule 10, on the contention that it is ultra vires the Act. The validity of the Rule is not under challenge in this petition.
14. The learned Counsel for the petitioners stated that the matter is already posted for trial and as petitioners were pursuing IA No. II regarding maintainability, they have not yet filed their reply. He, therefore, submits that the petitioners may be given an opportunity to file their reply and contest the matter. Sri Aswathram, learned Counsel for the Bank submitted that he will not oppose any request made by the petitioners herein before the Tribunal seeking an opportunity to file reply statement. I am sure that if the petitioners file their reply immediately with an application to receive the same, the Tribunal will consider the same and receive it.
15. For the reasons stated above, this petition is rejected with costs of Rs. 1,000/- payable by the petitioners to the Bank.