Page 1

HIMANI ALLOYS LTD. v.

TATA STEEL LTD. (Civil Appeal No. 5077 of 2011)

JULY 05, 2011 [R.V. Raveendran and A.K. Patnaik, JJ.]

[2011] 7 SCR 60

The Order of the Court was delivered by

O R D E R

R.V.RAVEENDRAN, J. 1. Leave granted.  

2. The respondent (‘TISCO’ for short) filed a suit (C.S.No.12/2003) in the  

Calcutta High Court against the appellant for recovery of a sum of  

Rs.2,02,72,505/40 in regard to supply of steel. In the said Suit, the  

respondent filed an application on 8.8.2003 praying for a decree upon  

admission for Rs.74,57,074/50 alleging that the appellant had admitted  

liability for such sum, as per minutes of the meeting held on 9.12.2000  

between representatives of respondent and appellant. The said application  

was resisted by the appellant contending that there was no such admission  

on 9.12.2000 or any other date and pointing out that what transpired on  

9.12.2000 was only a tentative agreement to have the accounts verified and  

not a final settlement or admission of liability.

3. A learned single Judge of the Calcutta High Court by order dated  

22.2.2008, granted a judgment on admission under Order 12 Rule 6 of the  

Civil Procedure Code (‘Code’ for short) for a sum of Rs.47,06,775/- in favour  

of the respondent-plaintiff, subject to respondent furnishing a bank guarantee  

for a sum of Rs.48,00,000/- in favour of the Registrar of the High Court. The  

intra appeal filed by the appellant was dismissed by the Division Bench of the  

High Court by judgment dated 22.9.2008. The said judgment is under  

challenge in this appeal by special leave.

Page 2

4. Order 12 Rule 6 of the Code provides that where admission of facts  

have been made in the pleadings or otherwise, whether oral or in writing, the  

Court may at any stage of the suit either on the application of any party or of  

its own motion and without waiting for the determination of any other question  

between the parties, make such order or give such judgment as it may think  

fit, having regard to such admissions.

5. The specific case of the respondent-plaintiff in the application was that  

at a meeting held on 9.12.2000 for reconciling the accounts as on 31.3.1999,  

the appellant admitted that a sum of Rs.74,57,074/50 was outstanding to the  

respondent and therefore it was entitled to a judgment on admission for that  

amount. The learned single Judge found that there was no such admission in  

regard to Rs.74,57,074/50 in the minutes of the meeting dated 9.12.2000. He  

however held that the minutes of the meeting dated 9.12.2000 recorded an  

admission by the appellant in respect of a sum of Rs.47,06,775/70 and  

consequently made a judgment on admission in regard to Rs.47,06,775/70  

against the appellant. The question is whether such judgment on admission  

was justified.  

6. The sum of Rs.74,57,074/50 described as the amount admitted to be  

due by the appellant, has nothing to do with appellant (Himani Alloys Ltd.). It  

is an amount that actually figures in the minutes of a meeting held on  

23.2.2001 between the representatives of the respondent and another  

company by name Himani Ferro Alloys Ltd. Thus the specific case of  

admission put forth by the respondent in its application seeking a judgment  

on admission, was found to be incorrect. The respondent did not refer to or  

rely upon any other admission, nor sought judgment in regard to any other  

admission. Once the claim of the respondent regarding admission was  

proved to be incorrect, its application for judgment on admission ought to  

have been rejected by the High Court. The High Court could not have  

embarked upon an enquiry as to whether there was some other admission  

nor given a judgment on the basis of such other admission, not pleaded by

Page 3

the respondent-plaintiff. If the respondent wanted to rely upon some other  

admission, it ought to have made a separate application, so that the appellant  

could have filed its objections to the same. That was not done.

7. Assuming that the High Court could have examined whether there was  

some other ‘admission’ in the minutes of the meeting dated 9.12.2000 relied  

on by the respondent, let us examine whether there was in fact any  

admission, on the basis of which a judgment on admission could have been  

passed. The minutes of the meeting dated 9.12.2000 no doubt starts by  

noting that the “As per Himani’s records: credit TISCO Rs.47,06,789.00”  as  

on 31.3.1999. It also records that as per TISCO’s records, as on 31.3.1999,  

the amount due by Himani(appellant) was Rs.61,49,449/30 and if three  

deductions (which were yet to be checked) were made, the amount due  

would be Rs.47,06,775/70. Thereafter, in paragraphs 3,4 and 5, there is a  

reference to both parties agreeing to provide particulars, agreeing to hold  

further discussions on 26.12.2000 and respondent agreeing to check up its  

records to find out the correctness of certain entries. Thereafter the minutes  

conclude that the “final figure will be arrived at the meeting accordingly”.  

When the minutes merely notes certain figures and states that they are  

tentative and both parties will verify the same and says that the final figure will  

be arrived at the next meeting, after discussions, we fail to understand how  

the same could be termed as an “admission” for the purpose of Order 12 Rule  

6 of the Code.

9. Another aspect regarding the minutes dated 9.12.2000 requires to be  

noticed. The Minutes do not refer to any admission by HIMANI (appellant) to  

pay any amount to TISCO (respondent). If a buyer states on 9.12.2000 that  

his account as on 31.3.1999 shows a balance of amount ‘X’  to the credit of  

the supplier, it can not be treated as an admission that the said amount ‘X’  

was due to the supplier on 9.12.2000. In a continuing account, it may be  

possible that between 31.3.1999 and 9.12.2000, there may be debits to the  

account, or ‘reveral of credits’  or ‘settlement of the account’. We therefore

Page 4

hold that there was no admission on 9.12.2000 which could result in a  

judgment under Order 12 Rule 6 of the Code.

10. It is true that a judgment can be given on an “admission” contained in  

the minutes of a meeting. But the admission should be categorical. It should  

be a conscious and deliberate act of the party making it, showing an intention  

to be bound by it. Order 12 Rule 6 being an enabling provision, it is neither  

mandatory nor peremptory but discretionary. The court, on examination of the  

facts and circumstances, has to exercise its judicial discretion, keeping in  

mind that a judgment on admission is a judgment without trial which  

permanently denies any remedy to the defendant, by way of an appeal on  

merits. Therefore unless the admission is clear, unambiguous and  

unconditional, the discretion of the Court should not be exercised to deny the  

valuable right of a defendant to contest the claim. In short the discretion  

should be used only when there is a clear ‘admission’  which can be acted  

upon. (See also Uttam Singh Duggal & Co. Ltd. vs. United Bank of India  

[2000 (7) SCC 120], Karam Kapahi vs. Lal Chand Public Charitable Trust  

[2010 (4) SCC 753] and Jeevan Diesels and Electricals Ltd. vs. Jasbir Singh  

Chadha [2010 (6) SCC 601]. There is no such admission in this case.

11. In view of the above, we allow this appeal, set aside the orders of the  

learned Single Judge and the division bench of the High Court dated  

22.2.2008 and 22.9.2008. We make it clear that we have not recorded any  

finding nor expressed any opinion in regard to the merits of the case or in  

regard to any part of the suit claim. It is possible that on evidence being led,  

the respondent is able to establish that Rs.47,06,775/70 was in fact due as on  

31.3.1999 and that it continues to be due. We request the High Court to  

dispose of the suit expeditiously.