Bombay High Court
World Trade Centre vs Canara Bank on 6 December, 2012
Bench: A.M. Khanwilkar, R.Y. Ganoo
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 5702 OF 2010
ITC Limited,
an existing company within the
meaning of the Companies Act, 1956
and having its registered office at
Virginia House, 37, J.L.Nehru Road,
Kolkatta 700 071
and its branch office at
World Trade Centre,
18th Floor, Centre I,
Cuffe Parade, Mumbai 400 005 .. Petitioner
v/s.
1. Canara Bank,
a body Corporate constituted
by the Banking Companies
(Acquisition and Transfer of
Undertakings) Act, 1970
(5 of 1970) in its capacity as
Principal Trustee of
Canbank Mutual Fund,
represented through
Shri S.N.Kanthakumar,
Executive Director,
Canara Bank,
112, J.C.Road,
Bangalore 560 002
2. P.V.Malya,
Indian Inhabitant, having
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address at Flat No.003,
"Sowmya Springs",
Opp. M.N.Krishnarao Park.
Basavangudi,
Bangalore 560 004.
3. B. Ramani Raj,
An Indian Inhabitant,
having his address at 121 (Old No.65)
Santhome High Road,
Chennai 600 028.
4. H.S.Ghia,
M/s. M.M.Nissim & Co.,
having address at
Barodawala Mansion,
"B" Wing, 3rd Floor,
81 Dr. Annie Besant Road,
Worli, Mumbai 400 018.
5. A.N.Shanbhag,
an Indian Inhabitant,
having his address at
11/2nd Floor, Mohini Mansion,
Behind Gurukrupa Hotel,
Near D.S.High School,
Sion, Mumbai 400 022.
6. M.S.Nayak,
an Indian Inhabitant,
being General Manager of
Canara Bank, having his
office at 112, J.C.Road,
Bangalore 560 002. ..Respondent nos.1 to 6
(Original Plaintiffs)
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7. Shrenik Jhaveri, of Bombay,
Indian Inhabitant, carrying on
business as Share Broker at
R-510, Totunda Building,
5th Floor, Stock Exchange Tower,
Dalal Street, Bombay 400 023. ..Respondent No.7
(Original Defendant No.1)
8. The Official Assignee as the
Assignee of the estate of
Mr.Pallav Sheth, Insolvent in
Insolvency Petition No.49 of 1996
High Court, Mumbai 400 032. ..Respondent No.8
9. The Custodian,
appointed under the Special Court
(Trial Offences relating to transactions
in Securities) Act, 1992, having his
Mumbai Office at 9th Floor,
Nariman Point, 227,
Vinay K. Shah Marg,
Nariman Point,
Mumbai 400 021 ..Respondent No.9
(Original Defendant No.5)
Mr.N.H.Seervai, Sr. Advocate a/w. Mr.Ranbeer Singh, Anupam Surve
and Vinayak Vengurlekar i/b. M/s. Crawford Bayley & Co. for the
Petitioner.
Mr.Pradeep Sancheti, Sr. Counsel i/b. Mulla and Mulla for the
Respondent Nos.1 to 6.
CORAM : A.M.KHANWILKAR &
R.Y.GANOO, JJ.
JUDGMENT RESERVED ON : 02.11.2012
JUDGMENT PRONOUNCED ON : 06.12.2012
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JUDGMENT (PER R.Y.GANOO, J.). :
1. Rule.
2. Rule made returnable forthwith. Learned Senior Counsel Mr.
Pradeep Sancheti waives service on behalf of respondent nos.1 to 6.
Presence of respondent nos.7, 8 and 9 is not necessary to hear and
dispose of this petition finally.
3. By consent, petition is taken up for final hearing.
4. In this petition, the petitioner has prayed that the order dated
18.3.2010 in Misc. Civil Application No.142 of 2009 passed by the
Special Court constituted under the Special Court (Trial of Offences
relating to The Transactions in Securities) Act, 1992 (For short Special
Court) be quashed and set aside. In terms of prayer clause (b) it is
prayed that order dated 10.10.2005 passed by the Special Court
constituted under the Special Court in Chamber Summons No.2 of
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2005 and Order dated 26.6.2006 passed by the very Special Court in
Chamber Summons No.6 of 2006 in Suit No.5 of 2002 be set aside.
5. Few facts necessary for the purpose of disposal of this writ
petition are as under:
The present respondent nos.1 to 6 filed original Suit No.4169 of
1994 on the original side of this Court for diverse prayers concerning
894705 shares in the erstwhile company by name ITC Bhadrachalam
Paper Boards Ltd. The said suit was transferred to the Debt Recovery
Tribunal for decision. On account of creation of the Special Court, the
proceedings then pending in the Debt Recovery Tribunal were re-
transferred to the Special Court for decision in accordance with law
and was re-numbered as Suit No.5 of 2002 (Special Court). In the
said suit, the present respondent no.7 was original defendant no.1.
Present respondent nos.1 to 6 were the plaintiffs. The present
respondent no.8 is the official assignee of the estate of Mr. Pallav Seth.
Said Mr.Pallav Seth was defendant no.2 in the said suit. The petitioner
were impleaded as defendant no.4 and present respondent no.9 was
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impleaded as defendant no.5.
6. The respondent nos.1 to 6 took out Chamber Summons No.2 of
2005 for amendment of the plaint. This amendment was sought by the
respondent nos.1 to 4 to bring on record the fact that the transaction of
funding between original defendant nos.1, 2 and 4 was false and not a
real transaction and the said transaction was put forth as a disguise to
the transaction of purchase of 8 lakh shares by the Respondent Nos.1
to 6. Significantly, the present petitioner had not filed an affidavit in
reply to the aforesaid Chamber Summons. The learned Special Judge
then attending to the said Chamber Summons granted the same by
order dated 10.10.2005. The plaint was amended as per the schedule
to the Chamber Summons.
7. Respondent nos.1 to 6, on or about 8.6.2006 took out Chamber
Summons No.6 of 2006 praying that the petitioner as defendant no.4
be ordered and directed to disclose the documents set out in Annexure
I to the said Chamber Summons. The respondent nos.1 to 6 sought
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inspection of the documents set out in Annexure I and photostat copies
of the said documents. This Chamber Summons was allowed by order
dated 26.6.2006 and both the aforesaid prayers were granted.
8. Respondent nos.1 to 6, thereafter took out Chamber Summons
No.2 of 2008 for striking of defence of the petitioner. By order dated
18.3.2010 the said Chamber Summons No.2 of 2008 was dismissed.
9. The petitioner i.e. the original defendant no.4, under Section
151 of the Code of Civil procedure took out Misc. Application No.142
of 2009 in August 2009 and prayed the order dated 10.10.2005 passed
by this Court in Chamber Summons No.2 of 2005 and order dated
26.6.2006 passed in Chamber Summons No.6 of 2006 in the Suit No.5
of 2002, are non-est in law, and that the Chamber Summons No. 2 of
2008 having been taken out in furtherance of those two chamber
summons are also invalid and non-est. The petitioner by prayer clause
(b) also prayed that the Respondent Nos.1 to 6 have abused the process
of this Hon'ble Court by fraudulently obtaining the above two orders
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dated 10.10.2005 and dated 26.06.2006 in Chamber Summons No.2 of
2005 and Chamber Summons No.6 of 2006 respectively and that the
petitioner have disentitled themselves from seeking any relief in this
Suit from this Hon'ble Court. So far as this prayer clause (b) of the
Misc. Application No.142 of 2009, learned Senior Counsel Mr.
Seervai, appearing on behalf of the petitioner had stated before the
Special Court that the petitioner are not pressing the relief in terms of
prayer clause (b) of the Misc. Application. Such an observation is
found in paragraph 11 of order dated 18.3.2010 which is as follows:
"Mr.Seervai, the learned Counsel appearing on behalf of the applicant
submits that he does not press for relief claimed by Defendant no.4 in
prayer clause (b) of the application."
10. The Special Court before whom this Misc. Civil Application
No.142 of 2009 was filed, heard and decided the said Misc.
Application. By Order dated 18.3.2010 the Special Court rejected the
said application. As stated earlier, by this petition, the petitioner are
praying that this Order dated 18.3.2010 be quashed and set aside in
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addition to the orders passed in Chamber Summons No.2 of 2005 and
Chamber Summons No.6 of 2006.
11. Learned Senior Counsel Mr.Seervai, appearing on behalf of the
petitioner has taken us through the entire record. He pointed out that
while taking out the Chamber Summons No.2 of 2005, respondent
nos.1 to 6 had made averments in the affidavit in support of the
Chamber Summons in such a way, that they suppressed the report
submitted by the police in the criminal case and mis-represented to the
Special Court that the facts disclosed in the schedule of Chamber
Summons came to their knowledge two days prior to taking out the
chamber summons. According to learned Senior Counsel Mr. Seervai,
the investigation report dated 30.3.1995 was submitted in 1995 itself
and it was within the knowledge of the respondent nos.1 to 6.
According to learned Senior Counsel Mr. Seervai, the respondent
nos.1 to 6 had the notice of the contents of the said report and while
obtaining the orders dated 10.10.2005 and 26.6.2006, they suppressed
the fact that they had known about the transaction which is sought to
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be brought on record by amendment and that his how the respondent
nos.1 to 6 practiced fraud on the court and that is how the orders were
secured by the respondent nos.1 to 6. Learned Senior Counsel Mr.
Seervai, therefore, submitted that if respondent nos.1 to 6 have secured
impugned orders by practicing fraud on the Special Court, said orders
cannot be sustained. In support of this proposition, he relied on the
following judgments:
i) S.P.Chengalvaraya Naidu vs. Jagannath & Ors. reported in
1994(1) SCC 1.
ii) MCD vs. State of Delhi & Another, reported in (2005) 4 SCC 605.
iii) A.V.Papayya Sastry and Ors. vs. Govt. of A.P. and Ors. reported
in (2007) 4 SCC 221.
iv) S.J.S. Business Enterprises (P) Ltd. vs. State of Bihar and Ors.
reported in (2004) 7 SCC 166.
12. Learned Senior Counsel Mr. Seervai took us through the order
dated 18.3.2010 and submitted that the view taken by the Special
Court that the amendment was necessary to replicate the facts stated
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in the written statement of defendant no.4, filed in 2002 is not correct
and that taking such a view is an error apparent on the face of the
record. He further submitted that the respondent nos.1 to 6 have
falsely contended that the amendment sought was necessary in order to
disprove the contentions raised by the petitioner in their written
statement. According to him, when the alleged contentions of the
petitioner in relation to "Pledge Transaction" were known to
respondent nos.1 to 6, 10 years back on the basis of the report dated
30.3.1995, then the aforesaid stand taken by the respondent nos.1 to 6
was untenable. It was submitted by learned Senior Counsel Mr.
Seervai that respondent nos.1 to 6 deliberately did not annex the report
in order to see that the Court does not come to know the date on which
the report was available to respondent nos.1 to 6.
13. Learned Senior Counsel, Mr. Seervai further submitted that
according to the petitioner the real purpose of amendment was to set
up a new case against the petitioner and plead that the petitioner
cannot and ought not to be permitted to rely upon the funding
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transaction to claim title to the said shares. It was submitted by
learned Senior Counsel Mr. Seervai that the respondent nos.1 to 6
dishonestly, fraudulently and by suppressing correct facts sought to use
"the filing of the written statement of the petitioner as an opportunity
to better their case".
14. Learned Senior Counsel Mr. Seervai further submitted that the
order dated 10.10.2005 proceeds on the footing that two days prior to
the filing of the Chamber Summons, respondent nos.1 to 6 came to
know about the relevant facts on the basis of which Chamber
Summons No.2 of 2005 was taken out. He submitted that respondent
nos.1 to 6 claim that they were not knowing the facts at the time of
filing of the suit whereas in the affidavit in support of the Chamber
Summons No.2 of 2005 taken out by the respondent nos.1 to 6,
respondent nos.1 to 6 have admitted that they came to know the
relevant facts during the course of investigation of criminal complaint.
According to learned Senior Counsel Mr. Seervai, the explanation for
belated filing of Chamber Summons is based on falsehood amounting
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to fraud on the Special Court. According to him, on this count, the
reliefs sought by the respondent nos.1 to 6 should not have been
granted by the learned Special Court in favour of Respondent Nos.1 to
6.
15. Learned Senior Counsel Mr. Seervai further took us through the
text of the order dated 10.10.2005 where it is observed as follows " the
plaintiff further alleges in the affidavit in support of the Chamber
Summons that the plaintiffs came to know about these facts only
recently i.e. two days prior to the filing of the Chamber Summons and
therefore he seeks amendment". Learned Senior Counsel Mr. Seervai
submitted that if according to respondent nos.1 to 6 this observation
made by the Special Court while deciding Chamber Summons No.2 of
2005 was incorrect, it was necessary for the respondent nos.1 to 6 to
take steps to correct order dated 10.10.2005. He submitted that such a
correction should have been done by the very Special Court who
passed the order dated 10.10.2005. In support of this submission, he
relied upon the judgment in case of:
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(i) State of Maharashtra vs. Ramdas Shrinivas Nayak and Anr.,
reported in (1982) 2 SCC 463
(ii) Jagvir Singh & ors. vs. State (Delhi Admn.) reported in (2007) 5
SCC 359.
According to him taking no steps to correct the order dated 10.10.2005
speaks volumes about the conduct of the respondent nos.1 to 6 and that
they are bound by the statement so recorded.
16. Learned Senior Counsel Mr. Seervai took us through the proviso
to Order VI Rule 17 of Code of Civil Procedure as amended by Act
No.22 of 2002 being an amendment to the Code of Civil procedure.
He submitted that the amendment could be granted if the Court comes
to the conclusion that despite due diligence the party could not have
raised the matter before the commencement of the trial. It was
submitted by learned Senior Counsel Mr. Seervai that in view of the
judgment in the case of Salem Advocate Bar Association T.N. vs.
Union of India reported in (2005) 6 SCC 344, the proviso curtails
the discretion available to the Judge to allow amendment at any stage
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and if the application is filed after commencement of the trial it is to be
shown by the plaintiffs that inspite of due diligence, said amendment
could not have been applied for earlier. He submitted that the court
was wrong in accepting the explanation for delay in taking out the
chamber summons, particularly when the trial had commenced and the
respondent nos.1 to 6 had notice of the various facts which were
sought to be brought on record by amendment.
17. Learned Senior Counsel Mr. Seervai submitted that respondent
nos.1 to 6 have sought to introduce /incorporate a case disputing the
title of the petitioner in respect of the shares in question by assailing
the funding transaction. According to him, the amendment sought in
Chamber Summons No.2 of 2005 was time barred as per the
provisions of Section 3 and Article 137 of the Limitation Act, 1963.
According to him, the petitioner could not argue at the time of hearing
of the Chamber Summons No.2 of 2005 that the amendment was time
barred on account of the fraud practiced by the respondent nos. 1 to 6
on the Court. He submitted that the learned Special Court erred in
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rejecting the stand of the petitioner that cause of action for amendment
was the police report and not content of written statement filed by
defendant no.4. He further submitted that the Special Court erred in
noting this as additional justification for the amendment. Learned
Senior Counsel Mr. Seervai further submitted that the order dated
18.3.2010 in Misc. Application No.142 of 2009 is contrary to the order
dated 18.3.2010 in Chamber Summons No. 2 of 2008 decided by the
very Special Court. He also submitted that the finding rendered by the
Special Court that Misc. Civil Application is filed belatedly is contrary
to the record.
18. Based on the aforesaid submissions, learned Senior Counsel Mr.
Seervai prayed that the writ petition be allowed.
19. Mr. Pradeep Sancheti, learned Senior Counsel appearing on
behalf of the respondent nos.1 to 6 supported the orders dated
18.3.2010, 10.10.2005 and 26.06.2006 respectively. He pointed out
that it was not open for the petitioner to take out Misc. application so
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as to have order dated 10.10.2005 quashed as the petitioner were well
aware of order dated 10.10.2005 and that the petitioner did not file any
proceeding challenging the said order. Same argument was advanced
in so far as order dated 26.6.2006 passed in Chamber Summons No.6
of 2006.
20. Mr. Pradeep Sancheti, learned Senior Counsel for respondent
nos.1 to 6 submitted that the present petitioner had not filed affidavit
in reply to the Chamber Summons No. 2 of 2005 thereby raising
various contentions. According to him, in the absence of affidavit in
reply to the Chamber Summons No. 2 of 2005 the petitioner are
estopped from raising various grounds as regards order dated
10.10.2005. He submitted that the Special Court, while deciding the
Chamber Summons No.2 of 2005 considered the case of respondent
nos.1 to 6 as set out in the affidavit in support of the Chamber
Summons and exercised the discretion in favour of respondent nos.1 to
6 and granted amendment. According to him, the Special Court before
whom the Misc. Application No.142 of 2009 was filed has considered
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all the aspects and has rightly rejected the contentions raised in Misc.
Application No.142 of 2009 and that is how the order dated 18.3.2010
was passed in a way confirming the order dated 10.10.2005. Same
submission was advanced in so far as order dated 26.6.2006 passed by
the earlier Special Court in Chamber Summons No.6 of 2006.
According to him, the Special Court, having granted both the Chamber
Summons and having rejected the stand of the petitioner in the Misc.
Application No.142 of 2009, there is a concurrent finding in favour of
the respondent nos.1 to 6 and this Court in exercise of writ jurisdiction
should not interfere therewith.
21. On the point of limitation raised by the petitioner, Mr. Pradeep
Sancheti, learned Senior Counsel, submitted that the question of
limitation was not raised by the petitioner before the Special Court
while arguing Chamber Summons No.2 of 2005, before the Special
Court. According to him, it is not now open for the petitioner to raise
the question of limitation. He submitted that, even otherwise the
provisions of Section 3 and Article 137 of the Limitation Act, 1963
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cannot be applied to determine whether taking out the chamber
summons in the year 2005 was beyond the period of limitation.
According to him, the chamber summons was granted considering all
the facts and the law involved and the said order was confirmed by the
Special Court by deciding Misc. Application No.142 of 2009 in favour
of respondent nos.1 to 6. He, therefore, submitted that the point of
limitation should be rejected.
22. Mr. Pradeep Sancheti, learned Senior Counsel relied upon the
judgment in the case of V.C.Shukla vs. State through C.B.I. reported
in 1980 SCC (Cri) 695. He had drawn our attention to para 20 of the
said judgment to submit that the orders dated 10.10.2005, 26.6.2006
and 18.3.2010 are interlocutory orders and are passed by the Special
Court itself and that the said orders have been passed after considering
the record. He, therefore, submitted that the orders impugned in this
writ petition are interlocutory orders and should not be interfered with.
23. Mr. Pradeep Sancheti, learned Senior Counsel appearing on
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behalf of the respondent nos.1 to 6 also relied upon the judgment in
the case of Surya Dev Rai v.s Ram Chander Rai & Ors. reported in
(2003) 6 SCC 675. He took us through para 38 and by relying upon
the said judgment he submitted that this court should not interfere in
the impugned orders in exercise of writ jurisdiction.
24. Mr.Pradeep Sancheti, learned Senior Counsel, also relied upon
the judgment in case of Satyanarayan Hegde & Ors. vs. Mallikarjun
Bhavanappa Tirumale reported in AIR 1960 SC 137. He read to us
para 17 of the said judgment to point out as to what does not constitute
an error apparent on the face of record. By relying upon the aforesaid
judgment he submitted that the contention of the petitioner that while
passing orders impugned in this petition, the Special Court committed
error apparent on the face of the record should not be accepted. Lastly,
he submitted that orders impugned in this petition have been properly
passed and therefore no interference is required in the said order and
that the petition is required to be dismissed with costs.
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25. We have considered the entire record i.e. the pleadings in the
suit, chamber summonses, and Misc. Application No.142 of 2009. We
have also perused the various judgments relied upon by the respective
Senior Counsel. Having considered the text of the plaint, as also the
affidavit in support of Chamber Summons No.2 of 2005, it is clear that
respondent nos.1 to 6 took out aforesaid chamber summons in view of
averments made by the petitioner in their written statement which
came to be filed on 19.7.2002. Surely, the respondent nos.1 to 6
thought it fit to take out the aforesaid chamber summons in order to
put up their case about the stand which was taken up by the petitioner
in their written statement. The respondent nos.1 to 6 have in their
affidavit in support of the chamber summons clearly stated that
respondent nos.1 to 6 had also filed criminal complaint in respect of
the transaction governed by the present suit and that during the course
of investigation by the police authorities, certain facts came to their
light after the suit was filed. It is pertinent to note that the suit was
filed in the year 1994, whereas the Investigation Report under Section
202 of Code of Criminal Procedure was filed in the year 1995. This
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will therefore support the stand of the respondent nos.1 to 6 that
certain facts which surfaced in the course of investigation came to
their knowledge only after the filing of the suit. A perusal of the
affidavit in support of the chamber summons indicates that the
respondent nos.1 to 6, after filing of the report did not move the court
to amend the plaint, however, it is only when the present petitioner
filed their written statement, the respondent nos.1 to 6 thought of
amending the plaint. Reading the affidavit in support of the chamber
summons it is clear that the transaction relating to suit shares between
the original defendant nos.1 and 2 and the petitioner was not disclosed
to respondent nos.1 to 6 by the petitioners and it is only when the said
transaction was disclosed in terms of their written statement,
respondent nos.1 to 6 thought of making their stand clear by seeking
amendment of the plaint. Learned Special Judge has rightly observed
in the order dated 18.3.2010 that the chamber summons No.2 of 2005
was taken out to replicate the averments made by the petitioner in their
written statement. So far as the police report is concerned, it will have
to be noted that the said police report was submitted to the concerned
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learned Special Judge in 1995 under Section 202 of Cr.P.C. and that
the said report was not binding on any party as the said report could be
used by the court attending to the said complaint for the purpose of
deciding whether the process should be issued or not.
26. Learned Senior Counsel Mr. Seervai had highlighted the factum
of fraud practiced by respondent nos.1 to 6 by relying upon the
observations in para 2 of the order dated 10.10.2005 passed in
Chamber Summons No.2 of 2005. The said observations are "The
plaintiffs further alleges in affidavit in support of the chamber
summons that the plaintiff came to know about these facts only
recently i.e. two days prior to filing of the chamber summons and
therefore he seeks amendment". We have perused the affidavit in
support of the Chamber Summons No.2 of 2005. We could not note
any assertion made by the respondent nos.1 to 6 that came to know
about the facts referred to in the chamber summons came to their
knowledge two days prior to filing of the chamber summons. It was
submitted by learned Senior Counsel Mr. Seervai that respondent nos.1
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to 6 through their Counsel, in the course of arguments must have
stated that the respondent nos.1 to 6 came to know about the facts
mentioned in the schedule of the chamber summons two days prior to
taking out of the chamber summons. We are not inclined nor we must
investigate now as to how the learned Special Court has mentioned the
portion quoted above in para 2 of his order. In our view, it was not
necessary for respondent nos.1 to 6 to move the learned Special Judge
for correction of the said part of the order particularly because the
chamber summons was granted and the amendment was carried out.
Further, the petitioner did not challenge the said decision, which it
could have. It is only now, perhaps, on the basis of renewed advise,
the petitioner wants to reopen the correctness of the said decision by
raising bogey of fraud played on the court by the plaintiffs.
27. We have perused the text of paragraph 3 of the affidavit dated
15.10.2008 filed in support of the Chamber Summons No.2 of 2008.
The contents of the said affidavits were relied upon by the petitioner to
claim that respondent nos.1 to 6 had practiced fraud upon the Court by
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not disclosing that they were aware of the various facts concerning suit
shares on account of contents of the police report. We have gone
through the affidavit dated 19.7.2005 filed in support of the Chamber
Summons No.2 of 2005. In the said affidavit in para 3, the respondent
nos.1 to 6 have stated as follows:
"I say that the plaintiffs had also filed a criminal
complaint against the defendant nos.1 and 2 for cheating
and forgery. I say that during the investigation of the
Criminal Complaint the plaintiffs learnt that the
Defendant no.4 had allegedly explained to the Police
Authorities that the said Share Certificate of 8,00,000
was mortgaged by them with the Defendant Nos.1 and 2
to raise a loan in May 1991 and the same was
subsequently returned to the defendant no.4 upon
repayment of the alleged loan by the Defendant No.4 to
the Defendant Nos.1 and 2. I say that the plaintiffs
amended the plaint and brought these alleged
transaction on the record. It is pertinent to note that in
the first Written Statement the Defendant No.4 has stated
that the said share certificate was always in its
possession."
28. We are not inclined to accept the argument advanced by learned
Senior Counsel Mr. Seervai that respondent nos.1 to 6 were fully
aware of the developments concerning the said shares on the basis of
the report and that they while taking out Chamber Summons No.2 of
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2005 suppressed this fact. The respondent nos.1 to 6 have no doubt in
para 3 of the affidavit in support of Chamber Summons No.2 of 2005
admitted that they came to know about certain facts in the course of
investigation. Once it is noted that the amendment was necessary on
account of the stand of the petitioner concerning the said shares, the
stand of petitioner that respondent nos.1 to 6 practiced fraud on the
court will have to be rejected. The learned Special Judge who decided
the Misc. Application by order dated 18.3.2010 has taken a correct
view of the matter. On this finding, the judgments in case of
S.P.Chengalvaraya Naidu vs. Jagannath & Ors.,(supra) MCD vs. State
of Delhi & Another, (supra) A.V.Papayya Sastry and Ors. vs. Govt. of
A.P. and Ors.(supra) and S.J.S. Business Enterprises (P) Ltd. vs. State
of Bihar and Ors. (supra) would not be applicable to the facts of this
case. It is required to be noted that since respondent nos.1 to 6 were
the plaintiffs in the aforesaid suit, they were the best to judge as to
what averments would suit their requirements ultimately to seek the
decree in the suit. Even if it is accepted that the respondent nos.1 to 6
were knowing the various facts on account of the text of the report of
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police investigation, still the non mentioning of certain facts soon
thereafter cannot be considered as objectionable conduct/ default on
the part of the respondent nos.1 to 6. From the affidavit in support of
the Chamber Summons No.2 of 2005 it is clear that it is only when the
petitioner mentioned various facts in the written statement concerning
the said shares, the respondent nos.1 to 6 thought it fit to amend the
plaint ultimately to see that their case is strengthened for the purposes
of getting a decree as prayed for.
29. We have perused the order dated 10.10.2005 passed in Chamber
Summons No.2 of 2005. The learned Special Judge has positively
mentioned in the said order that the petitioner have not filed affidavit
in reply to Chamber Summons No.2 of 2005. If the petitioner chose
not to file any affidavit in reply, nor challenged the order passed in the
said chamber summons, the various points raised by the petitioner to
object to the grant of Chamber Summons could not have been raised
by taking out Misc. Application No.142 of 2009 by raising bogey of
fraud played by the plaintiffs on court. It appears that in order to
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overcome events after grant of the Chamber Summons No.2 of 2005
the petitioner took out Misc. Application No.142 of 2009. The point
of limitation raised by the petitioner in Misc. Application could have
been raised by the petitioner in the course of hearing of the said
chamber summons. The petitioner have not raised the said point of
limitation. The Special Court which granted the said Chamber
Summons has considered the various arguments which were raised
before it by the petitioner and for reasons recorded in Order dated
10.10.2005, the said Chamber Summons was granted. The learned
Special Judge attending to the Misc. Application has also considered
all the points involved and has rejected the stand of the petitioner on
the question of limitation. We have considered the text of the
amendment as mentioned in the schedule to the Chamber Summons
No.2 of 2005. A perusal of the same would go to show that the
respondent nos.1 to 6 wanted to add the various paragraphs contained
in the schedule to the chamber summons in order to strengthen their
case. Similarly, the respondent nos.1 to 6 wanted to refute the case of
the petitioner as stated in the written statement. It is pertinent to note
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that by said amendment no additional reliefs were sought. The learned
Special Judge has, while passing the order dated 18.3.2010 arrived at a
conclusion, after considering the text of the written statement and the
text of the schedule of the chamber summons that, the chamber
summons was taken out to refute the stand of the petitioner taken in
the written statement. We are in agreement with this view taken by the
learned Special Judge while passing the order dated 18.3.2010. In our
view, the provisions of Section 3 and Article 137 of the Limitation Act,
1963 would not be applicable to the facts of this case inasmuch as, if
certain paragraphs are to be added in the plaint to clarify the stand of
plaintiffs on certain facts which have emerged in the suit, the
provisions of Section 3 and Article 137 of the Limitation Act would
have no application. The learned Special Judge deciding the Misc.
Application has rightly rejected the contention of the petitioner that the
amendment taken out by the respondent nos.1 to 6 was beyond the
period of limitation. Apart from the aforesaid discussion, it is required
to be noted that the petitioner filed a written statement on 19.7.2002
and took up a specific stand as contained in the written statement
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about the suit shares. It is to be noted that the Chamber Summons
No.2 of 2005 was taken out in July 2005. The respondent nos.1 to 6
thought it appropriate to take out the said Chamber Summons No.2 of
2005 on account of the averments in the written statement which was
filed in the year 2002. Hence, even if it is accepted that the provisions
of Article 137 of the Limitation Act, 1963 are attracted, the respondent
nos.1 to 6 have taken out the chamber summons within three years
from the filing of the written statement.
30. We have noted the argument of learned Senior Counsel
Mr.Seervai, based on the provisions of Order VI Rule 17 of Code of
Civil Procedure as amended by Amendment Act of 22 of 2002. We
have also perused the judgment in the case of Salem Advocate Bar
Association vs. Union of India (Supra). It is true that the Chamber
Summons No.2 of 2005 was taken out after the trial had commenced.
The Special Court which decided the Chamber Summons No.2 of
2005 as well as the Special Court which decided the Misc. Application
have accepted the explanation as to why the chamber summons was
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required to be taken out after the trial had commenced. It is not
possible to take a different view on the said point in this proceedings
after having rejected the argument of any fraud played on the court.
It is pertinent to note that the present suit was filed in 1994. The
provisions of Order VI Rule 17 of Civil Procedure Code as amended
by Amendment Act of 22 of 2002 would be applicable to the suits
which are filed on or after the date when the Amendment Act 22 of
2002 came into force. ig The amendment application i.e. Chamber
Summons No.2 of 2005 was filed concerning the suit which was filed
in the year 1994 and therefore the arguments advanced by learned
Senior Counsel Mr. Seervai based on the provisions of Order VI Rule
17 as amended by the Amendment Act of 22 of 2002 is rejected. This
view is based on the judgment in the case of State Bank of Hyderabad
v/s. Town Municipal Council reported in (2007) 1 SCC 765.
31. The Special Court passed order dated 26.6.2006 in Chamber
Summons No.6 of 2006 directing the petitioner to disclose the
documents mentioned in Annexure "1" to the Chamber Summons.
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Petitioner were directed to give inspection of the said documents and
provide copies of the same to Respondent Nos.1 to 6. Perusal of order
dated 26.6.2006 shows that the Special Court passed the order as it
was of the view that the Respondent Nos.1 to 6 must get inspection of
said documents and copies thereof in the interest of justice.
Independent of view taken by Special Court while passing impugned
order dated 18.3.2010 we are of the view that the Special Court has
exercised its discretion in proper manner. The said order does not
require any interference.
32. Having considered the order dated 10.10.2005 as well as the
order dated 26.6.2006 in Chamber Summons No.6 of 2006 and in
particular the order dated 18.3.2010 in Misc. Application No.142 of
2009, we are not inclined to accept the argument advanced by learned
Senior Counsel Mr. Seervai that the Special Court which passed the
later order has committed error apparent on the face of the record. In
our view, the Special Court, while passing the order has considered all
relevant points and the material which was placed before it.
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33. The order dated 10.10.2005 and 26.06.2006 were passed in the
two chamber summons which were taken out by the respondent nos.1
to 6. A perusal of those orders show that the said orders are in the
nature of interlocutory and discretionary orders. In view of the
judgment cited by learned Senior Counsel Mr. Pradeep Sancheti in the
case of V.C.Shukla vs. State (Supra), we are not inclined to interfere in
the said orders. The petitioner knew the order dated 10.10.2005 as
well as 26.06.2006. The petitioner did not make any grievance about
the said orders till filing of the Misc. Application No.142 of 2009 and
though the Misc. Application is styled as Application under Section
151 of the Code of Civil Procedure, the contents of the said application
are in the nature of a review of orders dated 10.10.2005 and
26.06.2006. On account of the contents of the said application, the
Special Court was persuaded to hear and dispose of the said
application. The Special Court has dealt with the said application in
detail and has passed an order dismissing the same. We are inclined to
treat the order dated 18.3.2010 as an interlocutory order as the said
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order was passed by the very Judge who was to decide the main suit.
In view of the exposition contained in judgment in the case of Surya
Dev Rai (supra), on which reliance was placed by learned Senior
Counsel Mr. Pradeep Sancheti on behalf of respondent nos.1 to 6, we
are not inclined to interfere in the said order in exercise of writ
jurisdiction.
34. It is required to be noted that amendment to the plaint was
granted as per order dated 10.10.2005 passed in Chamber Summons
No.2 of 2005. The plaint was amended and the petitioner filed
supplementary written statement on 27.1.2006. Chamber Summons
No.6 of 2006 taken out for inspection of the documents was allowed
on 26.6.2006. The petitioner did not challenge these two orders before
the appropriate forum. However, was advised to file Misc. Application
No.142 of 2009 leveling unsubstantiated allegations of fraud played on
the court. A bare perusal of these relevant dates would go to show that
the petitioner filed Misc. application definitely at a belated stage and
only to protract the trial. The Special Court, while passing order dated
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18.3.2010 has referred to this aspect in para 29 of the said order. We
are not inclined to take a different view than the one which has been
taken by the learned Special Judge on this point.
35. For the reasons mentioned aforesaid, we are inclined to hold that
the writ petition is required to be dismissed.
36. Accordingly, the petition is dismissed with costs.
[R.Y.GANOO, J.] [A.M.KHANWILKAR, J.]
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