{"id":51847,"date":"2000-05-23T00:00:00","date_gmt":"2000-05-22T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-bank-of-india-vs-ms-glavkosmos-ors-on-23-may-2000"},"modified":"2016-07-11T06:04:50","modified_gmt":"2016-07-11T00:34:50","slug":"state-bank-of-india-vs-ms-glavkosmos-ors-on-23-may-2000","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-bank-of-india-vs-ms-glavkosmos-ors-on-23-may-2000","title":{"rendered":"State Bank Of India vs M\/S. Glavkosmos & Ors. on 23 May, 2000"},"content":{"rendered":"
Delhi High Court<\/div>\n
State Bank Of India vs M\/S. Glavkosmos & Ors. on 23 May, 2000<\/div>\n
Equivalent citations: 2000 VAD Delhi 634<\/div>\n
Author: V Sen<\/div>\n
Bench: V Sen<\/div>\n<\/p>\n
<\/pre>\n
ORDER<\/p>\n
 Vikramjit Sen, J. <\/p>\n
1.     In  the case of ONGC Vs. Collector of General Excise, 1992  Supp.  (2) SCC 432 the Apex Court had observed that it had “on more than one  occasion pointed out that Public Section Undertakings of Central Government and  the Union  of  India should not fight their litigations in  Court  by  spending money  on  fees  of counsel, court fees, procedural  expenses  and  wasting public  time.  Courts are maintained for appropriate  litigations.  Court’s time  is not to be consumed by litigation which are carried on either  side at  public  expenses from the source.  Notwithstanding  these  observations repeated  on a number of occasions, the present cases appear to be  an  instance of total callousness. The letter of October 3, 1988, indicated  that the  Cabinet Secretary was looking into the matter. That has not  obviously been  followed  up. As an instance of wasting public time and  energy  this matter  involves  a principle to be examined at the  highest  level”.  Five years  later the Court explained this decision in Steel Authority of  India Ltd.  Vs.  Life Insurance Corporation of India & Ors., ,
\nholding that the previous directions for the constituting of a High Powered Committee  to resolve disputes between the Public Sector  Undertakings  and the  Government  of India was still the need of the hour so  that  needless consumption  of time and waste of public funds could be avoided.  The  Apex Court had recorded the following observations :\n<\/p>\n
     “The  object of issuing direction in those matters was to  decide the  fiscal disputes in case of major policy matters to save  the public money and Court’s valuable time, and disputes could amicably  be  settled between the Public Sector  Undertaking  and  the Government  of India or the State Governments. The intention  was not to resolve the disputes like eviction of a Company or  Public Undertaking  under Public Premises (Unauthorised Occupants)  Act; such petty disputes are not directed to be dealt with by the high level  officers whose duty and time is of very  important  nature otherwise.  Under  these circumstances, the High  Court  has  not committed any error warranting interference.”\n<\/p>\n
2.   Keeping  the facts of the case in perspective, the dispute now  raised by  the Indian Space Research Organisation (ISRO) by means  of  application under  Order  1 Rule 10 of the Code of Civil Procedure is  a  typical  case falling within the proscription of the ONGC ruling. The proceedings  should have  been  halted at the threshold and the application  should  have  been heard  only post obtainment of the Cabinet Committee Clearance. Since  this objection  had not been voiced at that stage, and arguments were  heard  in extensio, I think it appropriate to decide the application on merits.\n<\/p>\n
     Very  briefly  stated, the relevant facts are that the State  Bank  of India  (SBI)  had initiated a suit for the recovery of  Rs.  6,98,24,219.12 (Rupees  Six  Crores Ninety Eight Lakhs Twenty Four  Thousand  Two  Hundred Nineteen  and Twelve paise only) stated to have been paid by it by  mistake to Defendant No.1, Messers Glavkosmos. The provisions of Section 72 of  the Contract Act have been relied upon by the Plaintiff.\n<\/p>\n
3.   On  the  first hearing itself i.e. on 20.11.1996,  an  injunction  was issued  restraining the movement of moneys of Defendant No.1 into the  coffers of its Bankers namely, Bank of Rajasthan Ltd, Defendant No.2.  Shortly thereafter,  on  9.12.1996,  on a fresh application  being  initiated,  the Project Director, GSLV, ISRO, was also restrained from transferring, debiting or otherwise parting with the funds of Defendant No. 1 lying with  ISRO to the extent of the money claimed in the suit. After hearing the arguments of  the parties my learned brother, K. Ramamoorthy, J. directed the  Plaintiff to receive from ISRO the sum of Rs.6,98,24,219.12 plus interest at the rate of 24 per cent per annum on Rs. 4.8 crores from the date of the plaint till 30.9.1998. Till this money was received by the Plaintiff, the  learned Judge  continued the operation of the interim orders passed earlier.  These orders  were passed on 7.10.1998. The annals of the litigation do  not  end here  since  the  controversy was carried to the portals  of  the  Division Bench.  Significantly  the  applicant ISRO participated  in  the  appellate hearings. On 16.12.1998 the following order was passed:\n<\/p>\n
     “CMs. 3822 & 4270\/98 in FAO(OS) 290\/98<\/p>\n
     Mr. Nigam states that without prejudice to the rights and contentions of the appellant, as an interim measure, the appellant will      have  no objection if a sum of Rs. 5,90,40,000\/- is withdrawn  by respondent No.1 State Bank of India. Counsel further submits that rupees  equivalent  to US 2,10,000\/- may be  withdrawn  from  the account  of appellant with respondent No. 2 and the balance  from ISRO  from whom some amount are payable to the appellant.  It  is
\n     ordered  accordingly. We also direct that the order under  appeal by  the  Bank would cover the amount of Rs.5,90,40,000\/-  so  received by State Bank of India. As an interim measure the impugned order in appeal is modified in the above terms. We are,  however, not  inclined  to grant the stay of proceedings in the  suit.  On payment so made, the interim orders dated 20th November, 1996 and 9th  December, 1996 passed in the suit shall stand vacated.  Considering the nature of controversy as also the fact that we  have declined to stay further proceedings in the suit, we direct  that the  appeal  may be listed for hearing at Item  No.1  subject  to part-heard  on  5th April, 1998. A copy of this  order  be  given dasti to counsel for the parties.”\n<\/p><\/blockquote>\n
4.   In  the  application it has been pleaded by ISRO that it  had  entered into a supply contract with GLAVKOSMOS, and had been making payments to the latter form time to time. While the applicant ISRO was making  arrangements for the payment of US $ 4.3 million (approx. Rs.15.50 crores) it  obtained, on  11.12.1996,  knowledge of the injunction passed by this  court.  It  is pleaded by ISRO that so far as it is concerned all payments due under  this contract  totalling  Rs. 60.31 crores has been remitted  to  Glavkosmos  in full.  In strictly complying with the orders passed by the Division  Bench, ISRO paid the balance amount due to Defendant No.1, Glavkosmos, but in this process  has incurred an additional burden of Rs.1,24,70,534.88 because  of variations in the exchange rate, “solely on account of the Court case filed by SBI against M\/s. Glavkosmos over the double payment purportedly made  by them  to M\/s. G.K.” It is further averred “that in event of  Glavkosmos  or SBI  winning  the case, it is likely that these parties to  the  litigation would claim for payment of interest on the amount withheld upto the date of the judgment …. ISRO’s liability is limited only to the amount withheld”. Thereafter  the following prayers are made, which are  reproduced  verbatim since, on a plain reading, the application for impleadment has been  initiated  for purposes of the other reliefs, all of which are not  directly  in issue  in  the present suit. These reliefs are palpably of  a  nature  that would be prayed for in a separate suit but without payment of the advalorem fees that would be immediately attracted.\n<\/p>\n
     “1. It is therefore, respectfully prayed that this Hon’ble  Court may  be  pleased  to implead the Union of India  in  the  present proceedings.\n<\/p><\/blockquote>\n
     2.  Decree  for payment of Rs.1,24,70,534.88  (Rupees  one  crore a     twenty  four lakhs seventy thousand five hundred and thirty  four and paise eighty eight only) to the imp leader (ISRO) by the State Bank  of India, towards refund of the excess amount paid by  ISRO in Indian Rupees to M\/s. GK, Russia on account of delayed payment to M\/s. GK and the consequent exchange rate variation, caused  by the  order dated 9.12.96 passed by the Hon’ble Court in the  case filed by SBI against M\/s. GK over the double payment.\n<\/p><\/blockquote>\n
     3. A decree restraining SBI and M\/s. GK, as the case may be  from claiming  payment of any interest from ISRO on the  amount  withheld  and  subsequently released and upto the  date  of  judgment inasmuch  as ISRO had with-held the amount solely  in  compliance with the court’s order dated 9.12.96 and would have released  the payments to GK on the due date but for the court’s order.\n<\/p><\/blockquote>\n
     4. Cost of suit be awarded in favour of imp leader (ISRO).\n<\/p><\/blockquote>\n
     5. Any other relief that the Hon’ble Court may deem fit.”\n<\/p><\/blockquote>\n
5.   Only the Plaintiff has filed a reply to the application, but  significantly,  it has been actively and vociferously joined in its opposition  to it also by Defendant No. 3, the Russian Bank.\n<\/p>\n
6.   In  Razia  Begum Vs. Sahebzadi Anwar Begum & Ors., ,
\nRazia  Begum had prayed for two declarations in the suit: (1) that she  was the legally wedded wife of the Defendant and (2) that she was entitled  Rs. 2000\/-  as  maintenance. An application under Order I Rule  10  C.P.C.  was filed by the applicants, claiming to be the lawful and legally wedded  wife and son. It was, inter alia, pleaded that litigation was collusive. In this
\ncontext  the Apex Court made the following observations; the second  having assumed the proportions of a jurisprudential grand norm.\n<\/p>\n
     “As  a  result of these considerations, we have  arrived  at  the following conclusions:\n<\/p><\/blockquote>\n
     (1) That the question of addiction of parties under R.10 of O.  1 of  the Code of Civil Procedure, is generally not one of  initial jurisdiction of the court, but of a judicial discretion which has to  be exercised in view of all the facts and circumstances of  a particular case; but in some cases, it may raise controversies as to  the power of the court, in contradistinction to its  inherent jurisdiction, or, in other words, of jurisdiction in the  limited sense in which it is used in Sec. 115 of the Code;\n<\/p><\/blockquote>\n
     (2)  That in a suit relating to property, in order that a  person may  be  added as a party, he should have a  direct  interest  as distinguished  from a commercial interest, in the  subject-matter of the litigation;\n<\/p><\/blockquote>\n
     (3) Where the subject matter of a litigation, is a declaration as regards  status  or  a legal character, the rule  of  present  or direct interest may be relaxed in a suitable case where the court is  of  the opinion that by adding that party, it would be  in  a better position effectually and completely to adjudicate upon the controversy.\n<\/p><\/blockquote>\n
     (4)  The cases contemplated in the last proposition, have  to  be determined in accordance with the statutory provisions of Sec. 42 and 43 of the Specific Relief Act;\n<\/p><\/blockquote>\n
     (5) In cases covered by those statutory provisions, the court  is not  bound to grant the declaration prayed for, on a mere  admission  of the claim by the defendant, if the court has reasons  to insist upon a clear proof apart from the admission.\n<\/p><\/blockquote>\n
     (6) The result of a declaratory decree on the question of status, such as in controversy in the instant case, affects not only  the parties  actually before the Court, but generations to come,  and in view of that consideration, the rule of ‘present interest’  as evolved by case law relating to disputes about property does  not apply with full force; and<\/p>\n
     (7) The rule laid down in Sec. 43 of the Specific Relief Act,  is not  exactly a rule of res judicata. It is narrower in one  sense and wider in another.\n<\/p><\/blockquote>\n
7.   It  would  be improper for this court to reflect upon or  express  any observations on the tenability of the surmises, concerns and\/or conjectures pertaining  to the liability of ISRO towards payment of interest.  It  does not  arise in the facts of the present case especially for the disposal  of the  application.  Before  moving on it cannot but be  mentioned  that  the contents  of the application and the reliefs contained therein  are  essentially  in  the nature of a plaint. The objection of Mr.  Vineet  Malhotra, learned  counsel for Defendant No. 3, to the effect that appropriate  court fees  has not been paid on the relief of the recovery of  Rs.1,24,70,534.88 underscores and highlights this impression. However, the averments made  in the  application as well as the reliefs claimed therein provide the  answer to  the  question whether to implead or not to implead. The  applicant  has itself  expressed that it is not concerned in the dispute between the  parties  to the suit, and that it has been allegedly obliquely  or  indirectly affected by the orders passed by the court, to its financial detriment.  It is  now  fairly well established that merely because a third  party  is  so affected is no ground for allowing it to be imp leaded in a suit. There must be  a  direct interest in contradistinction to a  commercial,  monetary  or financial  interest. The Plaintiff has prayed for a decree of  recovery  of Rs.  6,98,24,219.12 against Defendant No.1 on the foundation of Section  72
\nof the Contract Act, as double payment made by mistake. In this  controversy,  the  applicant is not even obliquely concerned; it has come  into  the picture  only  incidently, as a consequence of the orders  passed  in  this suit.  This is no reason for ignoring and violating the principle that  the Plaintiff is dominus litus. If the suit is decreed it would be of no consequence  to  he  applicant. There would be no ground, in  that  event,  for Defendant  No.1 to claim any interest, because it would not be entitled  to any  money.  What appears to me to be most important is that  it  would  be illogical and wholly improper for the Court to be influenced by the consideration of ISRO being rendered vulnerable to a claim for payment of  interest  if  the  suit is rejected. In other words, if ISRO is  allowed  to  be imp leaded  all it would represent, impress and stress before the  Court  is that  the  suit should be dismissed because otherwise it  may  possibly  be rendered liable to payment of interest.\n<\/p>\n
8.   This  brings  me  to the question of the timing  of  the  application. Learned counsel for the Plaintiff and Defendant No. 3 have strongly imputed connivance between ISRO and Defendant No.1 inasmuch as the application  has been  preferred  even post disposal of the appeal of Defendant  No.1  on  a concession,  albeit without prejudice, made by Defendant No.1 who  was  the appellant,  before the Learned Division Bench. It was upon this  accusation being  voiced that the decision in the ONGC’s case (supra) came to  be  reflected  upon.  This  very application could have been  filed  three  years previously, immediately after 11.12.1996 on ISRO having gained knowledge of the  passing of the injunction orders. Having failed to do so it ought  not to  be heard at this belated stage. In these proceedings, especially  where no  explanation is forthcoming as to why it has now filed  the  application after such inordinate delay. All the more so because had the present relief been  asked for in December 1996, the alleged liability for  extra  payment having  been incurred due to variation in exchange rates between  1996  and 1999 would not have arisen at all, or would have been immediately obviated. All  that had to be done was to deposit the amount in dispute  and  thereby obtain a complete discharge.\n<\/p>\n
9.   Prima  facie,  collusion between ISRO and Defendant  No.1  appears  to exist. Learned counsel for the Russian Bank, Defendant No. 3, has supported the Plaintiff’s allegation that money has been paid twice over to Defendant No.1. Inspite of this, ISRO is speculating upon its liability to pay interest  to Defendant No.1 and thereby espousing the cause of  M\/s.  Glavkosmos
\nagainst the State Bank of India. The direct consequence of the intervention of ISRO is to buttress and support Defendant No.1’s defense that it has not received  double  payment and that further foreign  exchange  should  leave India.  This is, therefore, definitely a case which was within the  contemplation  of the Supreme Court when it made its observations in ONGC’s  case
\n(supra) and Steel Authority of India’s case (supra). One arm of the Government  is  not  expected to truncate the other – prior  clearance  from  the Cabinet Committee should have been obtained. An argument was put forward on ehalf  of  the applicant ISRO that its functioning would  be  impaired  if payments  are  not made to Defendant No. 1. There is no  justification  for this  argument been made in circumstances where the Plaintiff and  the  Defendant  No. 3, who do not have any common or joint interest,  have  joined issue  on  double payment having been made. If ISRO would  be  prepared  to countenance and be privy to the alleged double-payment it should separately petition its fountainhead of finance. There is no justification for passing the buck to the Plaintiff.\n<\/p>\n
10.  The  application  is wholly untenable in the context of the  scope  of Order  I, Rule 10. It is clearly belated, and in my view vexatious.  It  is dismissed  with  exemplary  costs  of  Rs.25,000\/-  payable  to  the  Prime Minister’s  National  Relief  Fund, (for Draught), by Demand  Draft  to  be deposited with the Registrar of this Court within fifteen days.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court State Bank Of India vs M\/S. Glavkosmos & Ors. on 23 May, 2000 Equivalent citations: 2000 VAD Delhi 634 Author: V Sen Bench: V Sen ORDER Vikramjit Sen, J. 1. In the case of ONGC Vs. Collector of General Excise, 1992 Supp. (2) SCC 432 the Apex Court had observed that it […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-51847","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nState Bank Of India vs M\/S. 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