* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 21st November, 2012
+ O.A. No.23/2012 in C.S.(OS) 466/2009
SHRI VINAY KUMAR & ANR. ..... Plaintiffs
Through Mr. Gurinder Pal Singh and Mr.
Mahendra Pratap, Advocates
versus
B.K. JEWELLERY HOUSE MARKETING LTD.
& ORS. ..... Defendants
Through Mr. Gaurav Mitra and Mr. Pratik
Malik, Advocates
+ O.A. No.24/2012 in C.S.(OS) No.467/2009
SHRI SAJID JABBAR ..... Plaintiff
Through Mr. B.K. Jha, Advocate
versus
B.K . JEWELLERY HOUSE MARKETING LTD.
& ORS. ..... Defendants
Through Mr. Gaurav Mitra and Mr. Pratik
Malik, Advocates
+ O.A. No.25/2012 in C.S.(OS) No.468/2009
SHRI ANAND SHANKER ..... Plaintiff
Through Mr. B.K. Jha, Advocate
versus
B.K. JEWELLERY HOUSE MARKETING LTD.
& ORS. ..... Defendants
Through Mr. Gaurav Mitra and Mr. Pratik
Malik, Advocates
CS(OS) Nos.466, 467 & 468 & 2009 Page 1 of 12
CORAM
HON'BLE MS.JUSTICE HIMA KOHLI
HIMA KOHLI, J. (Oral)
1. The present Chamber Appeals have been filed by the defendants No. 1 to 3 praying, inter alia, for setting aside the order dated 30th January, 2012 passed by the learned Joint Registrar rejecting their applications under Order VIII Rule 1 CPC wherein condonation of delay of 254 days was sought in filing the written statement.
2. The facts that are relevant to adjudicate upon the present Chamber Appeals in all the three cases are identical. While the plaintiffs in the three cases are different, the defendants are common. The stand of the defendants No. 1 to 3 as taken in their applications for condonation of delay in filing the written statements was that defendants No. 2 & 3, Directors of the defendant No. 1 company, were arrested in a criminal case and sent to judicial custody in July, 2009. Defendants No. 2&3 continued to remain in judicial custody till 26th September, 2011. The present suits were instituted by the plaintiffs sometime in March, 2009 and the reliefs sought therein are identical, namely, for directions to the defendants to deposit the amount of tax deducted at source with the Income Tax Authority or in CS(OS) Nos.466, 467 & 468 & 2009 Page 2 of 12 the alternative, to direct recovery of the said amount from the defendants.
3. A perusal of the order sheets reveals that summons were issued in the present suit on 13th March, 2009 and appearance was entered on behalf of defendants No. 2 & 3 on 22nd October, 2009. On 10th February, 2010, counsel for the defendants No.1 to 3 had submitted that the plaintiffs had not supplied him with a copy of the plaint despite directions to the said effect issued on an earlier date. As none had appeared on behalf of the plaintiffs on the said date, further opportunity was granted to the plaintiffs to furnish a copy of the paper book to the defendants and the defendants were given four weeks' time thereafter to file their written statements. It was also observed that the plaintiffs had not filed the process fee and were not taking the court proceedings seriously and as a result, they were burdened with costs and the matter was adjourned to 30th July, 2010 for completion of pleadings.
4. On 30th July, 2010, none had appeared on behalf of the plaintiffs, nor were the defendants 4 & 5 served. Even the costs that were imposed upon the plaintiffs on 10.2.2010, were not deposited. On the said date, counsel for the defendants No. 1 to 3 had submitted that the plaintiffs had not furnished a copy of the paper book to him CS(OS) Nos.466, 467 & 468 & 2009 Page 3 of 12 and as a result, the written statements could not be filed. In view of the non-appearance of the plaintiffs, the Joint Registrar had proceeded to place the matter before the Court on 19th November, 2010.
5. It is an admitted position that a copy of the plaint was finally furnished by the counsel for the plaintiffs to the counsel for defendants No. 1 to 3 on 19th November, 2010. The period of 30 days prescribed in the CPC for filing the written statement, if reckoned from the aforesaid date, would have expired on 19th December, 2010. The extended period of 90 days if reckoned from 19th November, 2010, would have expired on 17th February, 2011. However, defendants No. 1 to 3 filed the written statement through a newly engaged counsel only on 30th August, 2011.
6. Accompanying the written statements of the defendants No.1 & 3, were three separate applications filed under Order VIII R. 1 CPC, seeking condonation of delay of 254 days. The main ground taken by the defendants No. 1 to 3 for seeking condonation of delay was that the defendants No. 2 & 3, who were the directors of the defendant No.1 company were in judicial custody during the relevant period and though they had engaged a counsel to represent them in the present proceedings, the said counsel had misrepresented the correct facts to CS(OS) Nos.466, 467 & 468 & 2009 Page 4 of 12 them.
7. The aforesaid applications were opposed by the plaintiffs on the ground that even if the defendants No. 2 & 3 were in judicial custody, their fathers, i.e., defendants No. 4 & 5 herein were well aware of the present proceedings and they were duly represented through a counsel and could have taken necessary steps to protect the interests of all the defendants, more so, when they are the founders of the defendant No. 1 company and were aware of its day to day affairs. Another ground taken on behalf of the plaintiffs to oppose the applications was that the contention of defendants No. 1 to 3 that in the month of July, 2011 they had deputed one Sh. Arvind Kumar, an employee of defendant No. 1, to enquire about the status of the suit and he had informed them that the written statements had not been filed within the prescribed period and that thereafter they had sought a legal opinion from another counsel and then filed the written statements, could not be accepted as the defendants No.1 to 3 had failed to annexe the affidavit of the said gentleman to this effect with the applications for condonation of delay.
8. After examining the stands of the respective parties and considering the relevant case law, the learned Joint Registrar arrived at the conclusion that the defendants No. 1 to 3 had failed to furnish CS(OS) Nos.466, 467 & 468 & 2009 Page 5 of 12 sufficient cause for seeking condonation of delay of 254 days in filing the written statements. As a result, their applications for condonation of delay were rejected. Aggrieved by the aforesaid rejection order, the present Chamber Appeals have been filed by the defendants No.1 to 3.
9. The main plank of the arguments urged by the learned counsel for the defendants is that the Joint Registrar had erred in accepting the submissions made on behalf of the plaintiffs that the defendants No.4 & 5 were the founders of the defendant No.1 company and they were involved in the day-to-day affairs of the said company. He submits that the defendants No.4 & 5 are not connected with the defendant No.1 company at all as they are neither its shareholders nor Directors and merely because the defendants No. 2 & 3 happen to be their sons, that in itself cannot be treated as a ground to disallow the applications for condonation of delay filed by the defendants No. 1 to 3, particularly, when the defendants No. 2 & 3 who are the only directors of the defendant No.1 company had admittedly remained in judicial custody from July 2009 to 26th September, 2011.
10. It is relevant to note that it was during the very same period that the plaintiffs in all the three suits were also in judicial custody in the same case and their lack of diligence in prosecuting the present CS(OS) Nos.466, 467 & 468 & 2009 Page 6 of 12 suits is ascribed to the said fact.
11. Learned counsel for the defendants No. 1 to 3 submits that while passing the impugned order, the Joint Registrar had failed to appreciate the fact that the defendants No. 2&3 had remained in judicial custody even at the time when the written statements finally came to be filed on 30th August, 2011 and if they were really not interested in defending the present proceedings or they wanted to protract the suits, then they would have taken steps to file the written statements only after being released from judicial custody, which is not the case here.
12. He further submits that Mr. Arvind Kumar was earlier working as a manager of the defendant No. 1 company but after the said company went into losses and its business almost wound up, he was requested to assist the defendants No. 1 to 3 in prosecuting/defending the various litigations that had cropped up due to disputes inter se the plaintiffs in the three suits and the defendants as also with third parties.
13. Learned counsel for the plaintiffs opposes the present Chamber Appeals and submits that if the contents of the applications filed by defendants no.1 to 3 for condonation of delay is compared with the CS(OS) Nos.466, 467 & 468 & 2009 Page 7 of 12 grounds that have been taken in the Chamber Appeals, it will be apparent that the stand that has now been taken by the defendants is at variance to the one taken before the Joint Registrar. He submits that the defendants cannot be permitted to change their defence in the appeals when they had not based their case for condonation of delay on the said grounds before the learned Joint Registrar.
14. The Court has heard the counsels for the parties and carefully considered their submissions in the light of the averments made in the applications filed by the defendants under Order VIII R 1 CPC and the impugned order dated 30th January, 2012 passed by the learned Joint Registrar.
15. A perusal of the applications for condonation of delay filed by the defendants No. 1 to 3 reveals that the ground taken by them for seeking condonation of delay was twofold. Firstly, it was submitted that the earlier counsel who was engaged by the applicants was instructed to appear in the present proceedings and file a written statement but he had abruptly stopped appearing and had not disclosed the correct facts to them and as the defendants No.2 & 3 were in judicial custody at that time, they had remained unaware of the orders that were passed in the present case including the fact that the time prescribed in the statute to file the written statements had CS(OS) Nos.466, 467 & 468 & 2009 Page 8 of 12 expired. The second ground taken by the defendants was that it was only when they had deputed an officer of the defendant No. 1 company, Sh. Arvind Kumar in the month of July, 2011 to verify the status of the present cases, that they were apprised of the fact that the written statements had not been filed and their right to do so stood closed and immediately thereupon, a new counsel was engaged on 19th August, 2011 who had then inspected the court records, prepared the written statement and forwarded the same to the defendants in jail for their perusal and signatures and thus, the written statements came to be finally filed on 30th August, 2011.
16. As noted above, the records reveal that neither of the parties have been really diligent in prosecuting/defending the present proceedings. There has been gross default on the part of the plaintiffs in filing the process fee and taking steps to serve the defendants with the summons in the suit and after their appearance, with the paper book. While the defendant No.2 & 3 were represented through counsel on 22nd October, 2009, the complete set of the paper book came to be served on the counsel for the defendant No.1 to 3 on 19th November, 2010. The explanation offered by the learned counsel for the plaintiffs for the lack of diligence is that the plaintiffs were also in judicial custody in that duration. Similarly, the defendants No. 1 to CS(OS) Nos.466, 467 & 468 & 2009 Page 9 of 12 3 have also not been vigilant in defending the present suits. After service of the paper book on 19th November, 2010, they filed their written statement as late as on 30th August, 2011. The explanation offered for the delay remains the same, that they were also in judicial custody in that duration.
17. A closer look at the written statements filed by the defendants No. 1 to 3 reveals that the same were sworn by the defendants No.2 & 3 on 29th August, 2011 while they were still in jail and their signatures have been attested by the Deputy Superintendent, Central Jail, Tihar. Thus, the submission made by the counsel for defendants No. 1 to 3 that the defendants No. 2 & 3 were incarcerated at the time when the written statements came to be prepared and filed, is borne out from the records. It is also not disputed by the other side that the defendants No.2 & 3 had remained in judicial custody for almost a month thereafter, till 26th September, 2011. In other words, when the written statements came to be filed by the defendants No.1 to 3, defendants No.2 & 3 had yet to be released from judicial custody.
18. In such circumstances, when both the parties are found to be equally responsible in causing delay in the progress of the suit, it would be unfair and iniquitous to disallow the written statements filed CS(OS) Nos.466, 467 & 468 & 2009 Page 10 of 12 by the defendants to be taken on record by declining to condone the delay. It is also relevant to note that learned counsel for the defendants No.1 to 3 has submitted in the course of arguments that the defendants No.2 & 3 are the only two Directors and shareholders of the defendant No.1 company and therefore, it cannot be treated to be a case where the defendants No.4 & 5 had any role to play in the affairs of defendant No. 1 in any capacity. The defendant No.1 company is a separate legal entity and it could only have acted through the defendants No.2 & 3 who were in judicial custody at the relevant time. Simply because defendants No.4 & 5 are the fathers of defendants No.2 & 3, or they were witnesses to an agreement executed between the plaintiff and the defendants No.1 to 3 cannot be taken to mean that they had the authority to file the written statements on behalf of the defendant No.1 company.
19. When all the aforesaid facts and circumstances are considered collectively, this Court is inclined to allow the present appeals. Accordingly, all the three Chamber Appeals are allowed and the order dated 30th January, 2012 is set aside. The delay on the part of the defendants No.1 to 3 in filing the written statements is condoned. However, taking into consideration the fact that the suit proceedings have got protracted due to the belated filing of the written statements CS(OS) Nos.466, 467 & 468 & 2009 Page 11 of 12 by the defendants No.1 to 3, to balance the equities, it is deemed appropriate to mulct the said defendants with costs of `30,000/- collectively payable by them to the plaintiffs in each case, within two weeks from today. It is made clear that in case the costs as imposed are not paid within the stipulated time, then, the order dated 30th January, 2012 shall automatically stand revived.
20. The present appeals are disposed of.
(HIMA KOHLI)
NOVEMBER 21, 2012 JUDGE
rs/rsk
CS(OS) Nos.466, 467 & 468 & 2009 Page 12 of 12