Pranava City Complex Private ... vs Gyan Traders Limited
2023 Latest Caselaw 2842 Cal/2

                    IN THE HIGH COURT AT CALCUTTA
                   (Ordinary Original Civil Jurisdiction)
                              ORIGINAL SIDE


Present:

The Hon'ble Justice Krishna Rao



                             IA No: GA 2 of 2022

                              In CS 61 of 2021


                   Pranava City Complex Private Limited
                                   Versus
                          Gyan Traders Limited



            Mr. Suman Dutt
            Mr. Rohit Banerjee
            Ms. Shrayashee Das
                                             ... For the petitioner/plaintiff.

            Mr. K. Thakker
            Mr. Rishabh Kankani
            Mr. Anurag Bagaria
            Ms. Riya Debnath
                                            ... For the respondent/defendant.

Hearing Concluded On : 06.09.2023

Judgment on : 09.10.2023

Krishna Rao, J.:

1. The defendant has filed the present application for addition of parties

as defendants in the C.S. No. 61 of 2021.

2. The plaintiff has filed the suit against the defendant for recovery of

money.

3. Mr. K. Thakker, Learned Advocate for the defendant submits that one

Raju Patni who was carrying on business as stock broker and also

other businesses through several companies and are controlled by him,

including Sagittarians Credit Capital Private Limited. The defendant

being a non-banking financial company had several transactions with

Mr. Raju Patni or the companies controlled by him in the past in course

whereof Mr. Raju Patni had secured the confidence of the directors of

the plaintiff.

4. Mr. Thakker submitted that in the month of March' 2018, Mr. Raju

Patni met the Director of the defendant, namely, Mr. Sanjeev Bubna

with the proposal to assist transfer of funds by plaintiff company and

the plaintiff company is controlled by one Shri K.R. Pradeep to

Sagittarian, controlled by Raju Patni through the defendant as conduit.

The defendant was told that Mr. K.R. Pradeep was a promoter of well-

known Kare Group with various companies including promoter-director

of Lakshmi Vilas Bank.

5. Mr. Thakker submitted that Mr. Patni represented that the transfer of

funds will be shown as loan on paper and the amount of the funds to

be provided by the plaintiff company will carry interest at the rate of 9%

per annum and the said funds would be passed on by the defendant

company to Sagittarian ostensibly as loan and would carry interest at

the rate of 11% per annum thereby giving the defendant company a

margin profit of 2% of the amount of fund handled.

6. Mr. Thakker submitted that Mr. Raju Patni represented that the project

will be completed within the financial year ending 31st March, 2021

during which Sagittarian would transfer the amount of funds handled

by the defendant company with interest at the rate of 11% per annum

and the defendant company upon receipt of the said amount will pass

on the amount after retaining 2% margin of profit back to the plaintiff

company which would be shown on record as repayment of loan. He

submitted that the plaintiff company K.R. Pradeep confirmed that the

plaintiff company would not demand repayment until the defendant

company receives the funds from Sagittarian.

7. Mr. Thakker submitted that Mr. Patni explained that the amount

received by his company from the plaintiff company was in excess of 24

crores and the banker of the plaintiff company was objecting to such

over exposure and insisting on immediate reduction thereof. To reduce

the exposure of Mr. K.R. Pradeep and his companies from the plaintiff

group to Sagittarian, Mr. Raju Patni and Mr. K.R. Pradeep devised a

scheme to route money through other companies known to Mr. Patni to

act as coundit and recycling of funds. He submits that the scheme was

to get the over exposure of the plaintiff to Sagittarian reduced

substantially by recycling its own fund.

8. Mr. Thakker submitted that as per the assurance of Mr. Patni which

confirmed by Mr. K.R. Pradeep on behalf of the plaintiff company, the

defendant agreed to the said proposal and a tripartite agreement was

entered between the plaintiff company, Sagittarian and the defendant.

He further submitted that as per the agreement, the plaintiff has

transferred an amount of Rs. 2 crore on 12th March, 2018 and further

Rs.1 crore on 13th March, 2018 to the defendant and the defendant had

transferred an amount Rs. 3.15 crores to Sagittarian. He further

submitted that out of 3.15 crore, an amount of Rs. 15 lacs was the

repayment of previous loan. He further submitted that Raju Patni

informed the defendant that Sagittarian transferred an amount of Rs. 3

crores to the plaintiff.

9. Mr. Thakker submitted that in the year' 2020, the plaintiff has made a

criminal complaint and on the basis of which the CID has initiated a

criminal case and started investigation. During the investigation, Mr.

Bubna, the Director of the defendant, Raju Patni as well as K.R.

Pradeep were interrogated by the CID and on completion of

investigation, the CID has submitted report that the case is of civil in

nature. Mr. Thakker submitted that as per the report of the CID also

the name of Raju Patni, Sagittarian Credit Capital Private Limited,

Pranava Electronics Pvt. Ltd. and K.R. Pradeep also reflected in the

transactions but the plaintiff has not made the said company and

persons as party to the suit as they are the proper party to the suit for

proper adjudication of the suit.

10. Mr. Thakker submitted that the defendant has also filed another

application being G.A. No. 3 of 2023 praying for extension of time to file

written statement along with written statement with counter claim and

in the counter claim, the defendant has made the above mentioned

company and persons as party-defendant to the counter claim and

thus the Company and the persons are required to be added as

defendant in the suit for effective adjudication of the suit alongwith

counter claim.

11. Mr. Thakker relied upon the judgment report in (1995) 3 SCC 147

(Anil Kumar Singh -vs- Shivnath Mishra Alias Gadasa Guru) and

submitted that a person may be added as a party-defendant to the suit

though no relief may be claimed against him/her provided his/her

presence is necessary for a complete and final decision on the question

involved in the suit. Such a person is only a proper party as

distinguished from a necessary party.

12. Mr. Thakker relied upon the judgment reported in 1996 (1) KLJ 722

(Sarojini Amma & Ors. -vs- Dakshyani Amma & Ors.) and submitted

that the defendant had made the Raju Patni, Sagittarian, Pranava

Electronics Pvt. Ltd. and K.R. Pradeep in the counter claim and they

are the proper party for adjudication of that suit and counter claim.

13. Mr. Thakker relied upon the judgment reported in 2007 (6) Mh.LJ 127

(Teofilo Barreto -vs- Sadashiva G. Nasnodkar & Ors.) and submitted

that under Order I, Rule 10 of the Code of Civil Procedure, 1908 at the

instance of the defendant, additional parties could be impleaded to the

counter claim.

14. Mr. Suman Dutt, Learned Advocate representing the plaintiff submitted

that the plaintiff has lent a sum of Rs. 3 crores to the defendant which

have been confirmed by the defendant through reconciliation of

accounts and is undisputed facts. There are TDS Certificate on record

to endorse the fact that the loan was granted to the defendant at the

rate of 9% per annum. The documents bears the signature of the

authorized representative of the defendant and also bears the stamp of

the company. He submits that regarding involvement of Mr. K.R.

Pradeep, Raju Patni and their companies in the transaction of loan are

untrue and incorrect.

15. Mr. Dutt submitted that the plaintiff had lodged a complaint on 17th

October, 2020, before the Officer-in-Charge, Electronics Complex Police

Station, New Town and on receipt of the complaint, a case under

Sections 406/420/467/468/471/120B of the Indian Penal Code, 1860,

against the accused persons were initiated including the Director of the

defendant. The police has filed final report and the plaintiff has also

filed "Narazi" petition against the said report and the matter is pending

for adjudication before the Court of Learned Magistrate.

16. Mr. Dutt submitted that the plaintiff has filed the suit for recovery of

money lent and advance and the burden is on the plaintiff to prove the

case and the defendant cannot seek for addition of parties on the

ground that it needs assistance of the parties to prove his defense.

17. Mr. Dutt submitted that the action in question or its result shall

neither affect the rights of the proposed parties nor bind them. The

question to be settled in this suit can effectually and completely be

settled between the parties to the suit and in absence of any further

persons. He submits that the plaintiff has already filed an application

being G.A. No. 1 of 2021, inter alia, seeking judgmental admission and

the defendant has already filed affidavit-in-opposition and in the said

opposition, the defendant has taken the same plea but at the belated

stage, the defendant has filed the present application.

18. Mr. Dutt submitted that the defendant has not filed written statement

till the filing of the present application and at the mid of hearing of the

present application, the defendant has filed an application being G.A.

No. 3 of 2023 praying for extension of time to file written statement

alongwith counter claim. The application filed by the defendant is not

on board and this Court has not taken up for hearing of the same, thus

the contention raised by the defendant that the defendant can implead

party in the counter claim is not the subject-matter of this application

and the same can be decided at the appropriate stage when the

application filed by the defendant will be taken up for hearing.

19. Mr. Dutt submitted that the plaintiff has made out a simple case of

recovery of money against the defendant as the plaintiff has lent and

advanced money to the defendant but the plaintiff is not concerned

whether the defendant had facilitated to the other parties.

20. Mr. Dutt further submits that the parties which the defendant prays for

impleading in the present suit are neither the proper parties nor the

necessary parties for adjudication of the present suit. He submits that

as per the case made out by the defendant at the best, they may be the

witness of the defendant but not the necessary party for adjudication of

the suit filed by the plaintiff.

21. Mr. Dutt relied upon the the judgment reported in (1992) SCC 524

(Ramesh Hirachand Kundanmal -vs- Municipal Corporation of

Greater Bombay and Others) and submitted that it cannot be said

that the main object of the rule is to prevent multiplicity of actions

though it may incidentally have that effect. He submits that the person

to be joined must be one whose presence is necessary as a party. What

makes a person a necessary party is not merely that he has relevant

evidence to give on some of the questions involved; that would only

make him a necessary witness.

22. Mr. Dutt relied upon the judgment reported in (1964) 2 SCR 567/ AIR

1964 SC 11 (Laxmidas Dayabhai Kabrawala -vs- Nanabhai

Chunilal Kabrawala and Others) and submitted that the Code of

Civil Procedure, 1908 prescribes the contents of a plaint and it might

very well be that a counter-claim which is to be treated as a cross-suit

might not conform to all these requirements but this by itself is not

sufficient to deny to the Court the power and the jurisdiction to read

and construe the pleadings in a reasonable manner. If, for instance,

what is really a plaint in a cross-suit is made part of a written

statement either by being made an annexure to it or as part and parcel

thereof, though described as a counter-claim, there could be no legal

objection to the Court treating the same as plaint and granting such

relief to the defendant as would have been open if the pleading had

taken the form of a plaint.

23. Mr. Dutt relied upon the judgment reported in 2022 SCC OnLine SC

1026 (Satyender and Others -vs- Saroj and Others) and submitted

that the parties to whom the defendant intending to add as party to the

suit are not having any claim against the plaintiff and the plaintiff is

not having any claim against the said parties. He further submits that

till date no written statement has been brought on record and thus at

this stage question of acceptance of counter claim does not arise.

24. Heard the learned Counsel for the respective parties, perused the

materials on record and the judgment relied by the parties. The plaintiff

has filed the suit for recovery of money of Rs. 3,81,69,340/- along with

interest. As per the case of the plaintiff, the defendant had approached

the plaintiff and sought for accommodation loan for a sum of Rs.

3,00,00,000/- and the defendant has also offered interest at the rate

9% per annum. As per agreement between the parties, the plaintiff lent

an advance of a total sum of Rs. 3,00,00,000/- to the defendant by

transferring the said amount by way of RTGS on 12th March, 2018 and

13th March, 2018. Since after receipt of the amount, the defendant

defaulted in making payment of interest and accordingly the plaintiff

had issued notice to the defendant for payment of the loan amount

along with interest but the defendant has not paid the said amount and

accordingly the plaintiff has filed the present suit.

25. The defendant has not filed written statement but during hearing of the

present application, the defendant has filed another application for

extension of time to file written stament along with counter claim and

the said application is pending. The defendant has filed affidavit-in-

opposition in the present application wherein the defendant has made

out a case that :

"On the basis of the aforesaid tripartite agreement the plaintiff made online transfer of Rs. 2 crores on 12th March, 2018 and further Rs. 1 crore on 13th March, 2018 to the petitioner. On 22nd March, 2018 the petitioner company transferred Rs. 3.15 crores to Sagittarian. Out of the said sum of Rs. 3.5 Crores, Rs. 15 Lacs was paid to Sagittarian towards repayment of a previous loan. The petitioner was informed by Mr. Raju Patni that on 12th March, 2018 and on 13th March, 2018 Sagittarian transferred an aggregate amount of Rs. 3 crores to Pranava Electronic Private Ltd. All the aforesaid transfers of amount were shown on papers as loan transactions but were actually circular transaction. The amount transferred by the plaintiff was shown as a loan carrying interest at the rate of 9% per annum and the amount transferred by the petitioner to Sagittarian was shown as a loan carrying interest at the rate of 9% per annum and the amount transferred by the petitioner to Sagittarian was shown as loan carrying interest at the rate of 11%

per annum. No document or loan agreement or any bill of exchange recording the aforesaid tripartite agreement was executed nor was any document was executed in respect of the aforesaid transactions of fund transfer."

26. As per the case of the defendant, admittedly the plaintiff had

transferred an amount of Rs. 3,00,00,000/- on 12th March, 2018 and

13th March, 2018 to the defendant and defendant had transferred an

amount of Rs. 3.15 crores to Sagittarian out of which an amount of Rs.

15 lacs was repayment of previous loan to Sagittarian. The case made

out by the defendant is that the amount received by the defendant was

circulated amongst the defendant, Sagittarian, Pranava Electronics

Private Limited and there was no transaction between the plaintiff,

Sagittarian, Pranava Electronics Private Limited or any other party

other than the defendant.

27. Addition of party means the addition of new cause of action and

widening of particular issue, the party should not be added in such

situation. The mere fact that a fresh litigation could be avoided is also

no ground. The addition of party may be allowed when it is found by

the Court that the party sought to be added is a necessary party or

proper party in whose absence the suit cannot be decided or no

effective decree can be passed.

28. The necessary party is one without whom no order can be effectively

made. The proper party is one who is necessary for the final decision of

the question involved in the proceedings. Thefeore, the addition of the

parties would depend upon the judicial power which has to be

exercised in the facts and circumstances of the particular case.

29. The parties whom the defendant is intending to add as defendant in the

suit is no way connected with respect of the transaction between the

plaintiff and the defendant. The defendant after receipt of the amount

from the plaintiff has transferred to the parties and the plaintiff is not

claiming any amount from the said parties. At best the parties which

the defendant intending to be added as defendant in the suit may

depose in the case as witness. In the case of Ramesh Hirachand

Kundanmal (Supra), the Hon'ble Supreme Court held that a necessary

party is not merely that he has relevant evidence to give evidence on

some of the questions involved, that would only make him a necessary

witness.

30. As regard the counter claim wherein the defendant has added the said

parties as party to the counter claim but in the present application, the

written statement and counter claim is not in question. The defendant

has filed separate application for extension of time to file written

statement along with the counter claim, the said application will be

decided when the defendant will move the said application before this

Court. Admittedly, at present there is neither written statement nor

counter claim is on record.

31. In view of the above, this Court is of the opinion that the parties namely

Raju Patni, Sagittarian Credit Private Limited, Pranava Electronics

Private Limited and Mr. K.R. Pradeep are not the necessary and proper

party to the suit.

32. G.A. No. 2 of 2022 is thus dismissed.

(Krishna Rao, J.)