Calcutta High Court
Ubs Switzerland Ag vs Dpp Securities Private Limited & Ors on 2 May, 2025
IN THE HIGH COURT AT CALCUTTA
ORIGINAL SIDE
COMMERCIAL DIVISION
Present:
The Hon'ble Justice Krishna Rao
GA No. 2 of 2023
With
GA (Com) No. 4 of 2024
In
CS (Com) No. 516 of 2024
(Old No. CS 129 of 2023)
UBS Switzerland AG
Versus
DPP Securities Private Limited & Ors.
Mr. Abhrajit Mitra, Sr. Adv.
Mr. Rachit Lakhmani
Mr. Arnab Sardar
Mr. Srinivas Chatti
Ms. Aishwarya Wagle
Mr. Advait Shukla
... for the plaintiff.
Mr. Chayan Gupta
Mr. Sayantan Chatterjee
Mr. Mr. A.K. Dey
2
Mr. Bhaskarmoy Dey
... for the defendant nos. 1 to 3.
Mr. Pourush Bandyopadhyay
Mr. Ashutosh Singh
... for the defendant no. 4.
Hearing Concluded On : 07.03.2025
Judgment on : 02.05.2025
Krishna Rao, J.:
1. The defendants have filed an application being G.A. No. 2 of 2023
praying for rejection of plaint and dismissal of suit on the ground that
the suit filed by the plaintiff is barred by limitation.
2. The plaintiff has filed an application being G.A. (Com) No. 4 of 2024 to
amend the plaint filed in C.S. (Com) No. 516 of 2024.
3. Mr. Chayan Gupta, Learned Advocate representing the defendant nos.
1 to 3 submits that the plaintiff's cause of action is ex-facie barred by
limitation. He submits that by a letter dated 14th March, 2018, the
plaintiff has demanded his claim from the defendant no.1 which is the
subject-matter in the present suit.
4. Mr. Gupta submits that though the defendant no.1 has not committed
any fraud as alleged by the plaintiff but even if it is assumed that the
allegation made by the plaintiff is true even than all the alleged fraud
was discovered by the plaintiff on 14th March, 2018 as the plaintiff had
given the exact particulars of alleged facts in the said letter.
5. Mr. Gupta submits that 14th March, 2018 is the starting point of
limitation and on that day, the plaintiff had full knowledge of all the
alleged fraud which the defendant no.1 had purportedly perpetrated on
the plaintiff by taking possession of the goods without allegedly making
payment. He submits that the plaintiff had given full particulars of all
contracts, bill of lading, nature of goods and the price and demanded
the price of such goods from the defendant no.1 and also threatened to
take legal action against the defendant no.1 in the event the defendant
no.1 did not make payment by 23rd March, 2018.
6. Mr. Gupta submits that from the letter dated 14th March, 2018, it is
established that the plaintiff did not have only hints and clues of the
alleged fraud but had full particulars of the same.
7. Mr. Gupta submits that in view of the order passed by the Hon'ble
Supreme Court in Suo Motu Writ Petition No. 3 of 2020, the period
from 15th March, 2020 till 28th February, 2022 stood excluded and thus
the plaintiff was left with 364 days on and from 1st March, 2022 to
institute the present suit inasmuch as a period of 2 years and 1 day
had elapsed from the date of accrual of the period of limitation got
suspended. He submits that the period of limitation for the plaintiff was
till 27th February, 2023.
8. Mr. Gupta submits that the plaintiff sought to present the plaint on
22nd February, 2023 without exhausting the mandatory provision of
pre-institution mediation under Section 12A of the Commercial Courts
Act, 2015 but this Court refused to grant leave for dispensation of the
provision of Section 12A of the Act. He submits that the suit was not
allowed to be presented, thus there is no suit in the eye of law.
9. Mr. Gupta submits that limitation period for filing of suit expired on
27th February, 2023. He submits that the plaintiff has initiated pre-
institution mediation process on 15th March, 2023 i.e. after the expiry
of the period of limitation. The plaintiff has obtained failure report of
mediation on 8th June, 2023 and the plaintiff has filed the present suit
on 5th July, 2023 after the delay of 129 days.
10. Mr. Gupta relied upon the judgment in the case of Consolidated
Engineering Enterprises Vs. Principal Secretary, Irrigation
Department and Others reported in (2008) 7 SCC 169 and submitted
that plaintiff cannot get the benefit of Section 14 of the Limitation Act,
1963. He submits that the Section only comes into effect when the
plaintiff has been prosecuting a civil proceeding in a Court. He further
submits that it is not the case of the plaintiff that the there was a defect
of jurisdiction or other cause of like nature in such Civil Court that the
plaintiff may get the benefit of Section 14 of the Limitation Act, 1963.
11. Mr. Gupta relied upon the judgment in the case of Raghwendra
Sharan Singh Vs. Ram Prasanna Singh (Dead) by Lrs. reported in
(2020) 16 SCC 601 and submitted if the plaint is ex-facie barred by
limitation, the Court in exercise of power under Order VII Rule 11(d) of
the Code of Civil Procedure, 1908 can reject the plaint.
12. Mr. Abhrajit Mitra, Learned Senior Advocate representing the plaintiff
submits that limitation starts to run only upon the plaintiff having
definite and clear knowledge of the facts constituting the fraud; and not
from the time when the plaintiff merely had some hints and clues
which, if followed up, might have led to a complete knowledge of the
fraud. In support of his submissions, Mr. Mitra relied upon the
judgments in the case of:
i. Biman Chandra Datta Vs. Promotha Nath
Ghose reported in AIR 1922 Cal 157.
ii. Chaitanya Das Benerji Vs. Ranjit Pal
Chaudhuri reported in AIR 1938 Cal 263.
iii. Raghubar Narayan Singh Vs. Pacific
Bank Limited reported in 1960 SCC OnLine
Cal 220.
13. Mr. Mitra submits that the letter dated 14th March, 2018 was on
suspicion that the defendant no.1 had taken the goods from the
defendant no. 4. He submits that a bare perusal of the letter will show
that the plaintiff had come to know form its logistics provider that
goods had been removed. The said information was hearsay and a mere
hint and the plaintiff had no clear knowledge. He submits that the
defendant in its reply dated 23rd March, 2018, stated that the matter
was "sub-judice before Indian Courts". The defendant no.1 did not admit
that it had removed the goods.
14. Mr. Mitra submits that the plaintiff has made complaint to the police
on 6th April, 2018 only against the defendant no.4 "apprehending" that
goods were removed by the defendant no.4 from the designated
warehouses. He submits that the said complaint was based on
apprehension of removal of goods as plaintiff was denied entry into the
warehouses.
15. Mr. Mitra submits that on 16th May, 2018, the West Port Police station
registered FIR against all the defendants as they all are suspected of
fraud involving removal of goods from the warehouse as per preliminary
inquiry of the police.
16. Mr. Mitra submits that on 1st October, 2019, the plaint of C.S. No. 30 of
2018 filed by the defendant no.1 was served upon the plaintiff along
with C.S. No. 28 of 2018 and C.S. No. 29 of 2018. The said suits were
filed by the defendant no.1 against Vincom on the allegation of shortfall
in supply of goods and in the said suits, the plaintiff has also been
impleaded as a defendant. He submits that in the suits filed by the
defendant no.1, it was admitted at paragraphs 29 and 30 that the
defendant no.1 had taken the goods forming subject-matter of the
instant suit. Mr. Mitra submits that the said statements confirmed fully
that the defendants jointly defrauded the plaintiff by misappropriating
the goods. Mr. Mitra submits that limitation of filing of the instant suit
starts from 1st October, 2019 when the plaintiff has received the copy of
plaint of the suit filed by the defendant no.1, thus the suit is within the
limitation period.
17. Mr. Mitra submits that whether the plaintiff has definite knowledge as
contended by the defendant no.1 is a question of fact which is to be
decided in trial. In support of his submissions, Mr. Mitra relied upon
the judgment in the case of Salim D. Agboatwala and Others Vs.
Shamalji Oddhavji Thakkar and Others reported in (2021) 17 SCC
100.
18. The issue in the present application whether the suit is ex-facie barred
by limitation and liable to be dismissed without going for trial?
19. The defendant no.1 has mainly relied upon the letter dated 14th March,
2018, issued by the plaintiff to the defendant no.1 and argued that
from the said letter, it reveals that the plaintiff had the knowledge of
the alleged fraud but the plaintiff has not filed the suit within the
prescribed period of three (3) years from 14th March, 2018. The
contention raised by the plaintiff that the plaintiff had no clear and
definite knowledge of the fact which constituted the fraud.
20. In the notice dated 14th March, 2018, the plaintiff has called upon the
defendant no.1 to pay the purchase price by 23rd March, 2018 failing
which the plaintiff will take further steps or legal actions available to
the plaintiff without any further notice. On receipt of the said notice,
the defendant no.1 had sent a reply to the plaintiff's notice dated 14th
March, 2018 intimating that the defendant no.1 had no mutual
contract with the plaintiff and requested the plaintiff to contract
Vincom Commodities Ltd. for the queries of the plaintiff. In the said
reply, the defendant no.1 also informed the plaintiff that the subject-
matter is sub-judice before Indian Courts. After receipt of reply from
defendant no.1, the plaintiff immediately made complaint to the police
authority against the defendant no. 4 on 6th April, 2018. On the basis
of the complaint of the plaintiff, the West Port Police Station, Kolkata
initiated preliminary inquiry and on the basis of the preliminary
inquiry, the police has registered a case against the defendant no.1 and
its associates companies and the defendant no. 4 being FIR No. 88 of
2018 for the alleged offence under Sections 419/420/409/
467/471/120B of the Indian Penal Code, 1860.
21. It is the contention of the plaintiff that the plaintiff received copy of the
Civil Suit filed by the defendant no.1 against Vincom wherein the
plaintiff is also one of the defendant and in the said suit, the defendant
no.1 has expressly admitted that the defendant no.1 had received the
goods and on receipt of the copy of the plaint and after going through
the contents of the plaint, the plaintiff definitely came to know that the
defendant no. 1 has committed fraud upon the plaintiff along with the
other defendants.
22. Sections 17 and 18 of the Limitation Act, 1963, reads as follows:
"17. Effect of fraud or mistake.-- (1)
Where, in the case of any suit or application for
which a period of limitation is prescribed by this
Act,--(a) the suit or application is based upon the
fraud of the defendant or respondent or his agent;
or
(b) the knowledge of the right or title on which
a suit or application is founded is concealed
by the fraud of any such person as
aforesaid; or
(c) the suit or application is for relief from the
consequences of a mistake; or
(d) where any document necessary to establish
the right of the plaintiff or applicant has
been fraudulently concealed from him,
the period of limitation shall not begin to run
until the plaintiff or applicant has discovered the
fraud or the mistake or could, with reasonable
diligence, have discovered it; or in the case of a
concealed document, until the plaintiff or the
applicant first had the means of producing the
concealed document or compelling its production:
Provided that nothing in this section shall
enable any suit to be instituted or application to be
made to recover or enforce any charge against, or
set aside any transaction affecting, any property
which--
(i) in the case of fraud, has been purchased for
valuable consideration by a person who
was not a party to the fraud and did not at
the time of the purchase know, or have
reason to believe, that any fraud had been
committed, or
(ii) in the case of mistake, has been purchased
for valuable consideration subsequently to
the transaction in which the mistake was
made, by a person who did not know, or
have reason to believe, that the mistake
had been made, or
(iii) in the case of a concealed document, has
been purchased for valuable consideration
by a person who was not a party to the
concealment and, did not at the time of
purchase know, or have reason to believe,
that the document had been concealed.
(2) Where a judgment-debtor has, by fraud or
force, prevented the execution of a decree or order
within the period of limitation, the court may, on the
application of the judgment-creditor made after the
expiry of the said period extend the period for
execution of the decree or order:
Provided that such application is made within
one year from the date of the discovery of the fraud
or the cessation of force, as the case may be.
18. Effect of acknowledgment in
writing.-- (1) Where, before the expiration of the
prescribed period for a suit or application in respect
of any property or right, an acknowledgment of
liability in respect of such property or right has
been made in writing signed by the party against
whom such property or right is claimed, or by any
person through whom he derives his title or
liability, a fresh period of limitation shall be
computed from the time when the acknowledgment
was so signed.
(2) Where the writing containing the
acknowledgment is undated, oral evidence may be
given of the time when it was signed; but subject to
the provisions of the Indian Evidence Act, 1872 (1
of 1872), oral evidence of its contents shall not be
received.
Explanation.-- For the purposes of this
section,--
(a) an acknowledgment may be sufficient though
it omits to specify the exact nature of the
property or right, or avers that the time for
payment, delivery, performance or
enjoyment has not yet come or is
accompanied by refusal to pay, deliver,
perform or permit to enjoy, or is coupled
with a claim to set off, or is addressed to a
person other than a person entitled to the
property or right,
(b) the word "signed" means signed either
personally or by an agent duly authorised
in this behalf, and
(c) an application for the execution of a decree
or order shall not be deemed to be an
application in respect of any property or
right."
23. In the case of Chaitanya Das Banerji (supra), the Hon'ble Division
Bench of this Court held that:
"As regards the contention of the learned
advocate for the respondent that the plaintiff's
claim is barred under Art. 62 of the Indian
Limitation Act, the position is this:--After the
auction-purchase by the plaintiff, defendant No. 1
went on receiving rent from the plaintiff for the
tenure on the footing that the plaintiff has acquired
good title to the tenure by his auction-purchase. He
suppressed from the plaintiff the fact that before
the execution was started by him defendant No. 2
had lost her right to the tenure and that defendant
No. 3 was the real tenant of the tenure. Assuming
that Art. 62 of the Indian Limitation Act applies to
the case, from the facts of this case it is clear that
the plaintiff is entitled to the benefit of s. 18 of the
Indian Limitation Act. It was argued on behalf of
the respondent that the fraud of defendant No. 1, if
any, became known to the plaintiff when the
written statement in the suit was filed by the
plaintiff. The learned Munsif has rightly pointed out
that the plaintiff had then no definite and clear
knowledge of the facts constituting the fraud and
that the mere fact that some hints and clues
reached the plaintiff, which, if followed up, might
have led to a complete knowledge of the fraud was
not enough. It does not appear that this finding of
the trial Judge has been expressly reversed by the
lower appellate Court. From the facts and
circumstances disclosed in the present case, there
cannot be any doubt that the plaintiff is entitled to
have the period of limitation extended in view of the
provisions of s. 18 of the Limitation Act."
24. In the case of Biman Chandra Datta (supra), the Hon'ble Full Bench
of this Court held that:
"4. Section 18, in 80 far as it applies to the
case before us, provides that where any person
having a right to institute a suit, has, by means of
fraud, been kept from the know ledge of such right
or of the title on which it is founded, the time
limited for instituting a suit against the person
guilty of the fraud shall be computed from the time
when the fraud first became known to the person
injuriously affected thereby. It may be observed
that this is not precisely identical with the
provisions of Section 26 of the Real Property
Limitation Act, 1833, which makes time run from
the date when the fraud is, or with reasonable
diligence might have been, first known or
discovered. This distinction was possibly not
brought to the notice of the Court in Bisbee Solomon
v. Abdool Aztez 8 C. L. Rule 169 : 6 C.687 : 3 Ind.
Dec. (n. C.)446, The principle is, perhaps, best
stated in the words of Westbury, L. C" in Rolfe v.
Gregory(1865) 4 De G. J. 576 : 3. Cas. 274 : 11 Jur.
(n. s.) 98 : 12 L. T. 162 : 13 W. K. 855 : 46 E E.
1012 PC : 146 R Rule 463. "When the remedy is
given on the ground of fraud, it is governed by this
important principle, that the right of the party
defrauded is not affected by lapse of time, or,
generally speaking, by anything done or omitted to
be done, so long as he remains, without any fault
of his own, in ignorance of the fraud that has been
committed." This was quoted with approval by Lord
James in delivering the opinion of the Judicial
Committee in Built Goal Mining Co.V. Qsborre
(1899) A. C. 351 : 68 L. J. P. C.49 : 50 L. T 440 : 47
W.R. 545 : 15 T.L.R. 257., where he added: the
contention on behalf of the appellants that the
Statute is a bar utiles the wrongdoer is proved to
have taken active measures in order to prevent
detection is opposed to Common sense as well as
to the principles of equity." To this must be added
further the valuable statement by Lord Hobhousa
in Bahimbhoy Habibbhoy v. Gkarles Agnew Turner
(4) : "When a man has committed a fraud, and has
got property thereby, it is for him to show that the
person injured by his fraud and suing to recover
the property has had clear and definite knowledge
of those facts which constitute the fraud at a time
which is too remote to allow him to bring the suit."
The true position then is that where a suit is on the
face of it barred, it is for the plaintiff to prove in the
first instance the circumstances which would
prevent the Statute from having its ordinary effect.
A person who, in such circumstances, desires to
invoke the aid of Section 18, must establish that
there has been fraud and that by means of such
fraud he has been kept from the knowledge of big
right to sue or of the title where on it is founded.
Once this is established, the burden is shifted on to
the other side to show that the plaintiff had
knowledge of the transaction beyond the period of
limitation. Such knowledge must be clear and
definite knowledge of the facts constituting the
particular fraud ; as Lord Hob house points out, it
is not sufficient for the defendant to show that the
plaintiff had some clues are hints which, perhaps,
if vigorously and acutely followed up, might have
led to a complete knowledge of the fraud. These
principles have been repeatedly applied, as for
instance, in Nath Singh v. Jedha Singh (7),
Narayan Sahu v. Mohant Damodar Das 16 Ind.
Cas. 464 PC : 16 C. W. N. 894. Arjun Las v.
Qunendra Nath (8), Jottndra Mohun Baiv.
Brojendra Kumar Botta 24 Ind. Cas 249 PC : 19 C.
W. N. 553. and Lokenath V. Ohintamoni Tripathi
16Ind. Cas. 547. The cases most nearly in point
are the decisions in Avancha Lahshminarasamma
v. Avancha Lakshamma 21 Ind. Cas. 394 : 25 M. L.
J. 531 : 14 M. L. T. 826 : (1913) M. W.N. 806. and
Lakhpat Pandey v. Jang Bahadur Pandey 40 Ind.
Cas. 37. where the plaintiff had, without
knowledge of the defendant, recovered from a
stranger money jointly payable to the plaintiff and
the defendant, and bad concealed from the
defendant the fact of such realization. The only
question is, what is the position of the parties in the
present case when tested in the light of these
principles.
5. It has been conclusively established in this
litigation, notwithstanding the allegation of the
defendant to the contrary, that the disputed money
belonged not to him but to his niece and had been
fraudulently misappropriated by him. The true
character of the transaction between him and his
niece was specially within his knowledge, and he
has taken full advantage of her death to set tip a
false claim, with impunity if he could. The fraud of
concealment of the true state of facts has been
persevered in by him, not only up to the time of the
present suit, but also during its progress. The
burden consequently lies heavily upon him to
establish not that the plaintiff had clues and hints
which, if vigorously and acutely followed by him,
might, perhaps, have led him to a complete
knowledge of the fraud, but that the plaintiff had
clear and definite knowledge of the facts which
constituted the fraud, at a time anterior to the
period of limitation. From this point of view, the
defendant is in an inextricable difficulty. In the first
place, he did not set up such a defence in his
written statement, for the obvious reason that such
a defences, even if taken as an alternative, won 11
have seriously imperiled the success of his
substantial defence that the claim was unfounded
and he himself had committed no fraud. In the
second place he did not adduce evidence to
substantiate Each an alternative defence, He is
thus inevitably constrained to rely upon isolated
fragments from the evidence adduced by the
plaintiff to enable him to discharge the burden of
proof. It is not surprising that examined from this
standpoint his position proves untenable. He
contends that the plaintiff had knowledge of the
deposit and withdrawal early in 1912 : but this is
clearly insufficient. The account stood in his name
coupled with the statement that the deposit had
been made on behalf of his niece. He alone could
consequently operate on the account. The
withdrawal by him was thus 9 not necessarily an
act tainted by fraud Indeed, he has nowhere
asserted that he entertained a fraudulent intention
at that time to misappropriate the sum in fact, he
alone would have to withdraw the mm from the
Bank before he could make it over to the rightful
owner. We have thug no allegation by the
defendant, much less any proof by him, as to the
precise time when he committed the fraud. Apart
from this, he has throughout committed the fraud
and has not only assured the plaintiff but has also
maintained in Court that the money belonged to
him and not to his case. On the ether and, the
plaintiff has given his sworn testimony that it was
not till the 25th March 19.5, that he obtained from
he authorities of the Bank definite information as to
the details of the transaction. There is thus no
escape from the conclusion that the plaintiff is,
prima facie, entitled to the benefit of Section 18,
while the defendant has neither aligel nor proved
fasts which would exclave the operation of that
provision. This raises finally the question whether
the defendant should now be allowed an
opportunity to set up and establish gush a"
defence; the answer, in our opinion, must be in the
negative. The position he would have to take up
would be contradictory to what has been hitherto
his defence; and he cannot" now reasonably ask to
be permitted to assert that he has been guilty of
fraud and that the plaintiff has been in full
possession of the material facts for more than three
years prior to the suit.
25. In the case of Raghubar Narayan Singh (supra), the Hon'ble Division
Bench of this Court held that:
"45. It is thus clear that section 18
contemplates a different kind of fraud. But as I
have pointed out already, the attitude of non-co-
operation adopted by the directors, their refusal
and avoidance of explanation of the suspicious
entries and the irregularities complained of
prevented the liquidator from having definite
knowledge of his right to proceed under section
235. Being an auditor and an accountant he had
no doubt the special skill and experience of
detecting fraud in relation to the accounts and
affairs of a company, but having regard to the
voluminous nature of the accounts of the bank
extending over a period of eight years it is
reasonable to presume that without some co-
operation or assistance of the directors or officers of
the bank it was not possible for the liquidator to
acquire any definite knowledge about the
fraudulent conduct of the directors or about the
irregularities in the transactions, within a short
period of time. It was argued by the learned
Counsel for the appellant that section 235 being a
statutory right there could be no question of
concealing such right from the liquidator and
section 18, of the Limitation Act is therefore not
attracted to such a case. But it is to be pointed out
that unless the liquidator has knowledge that he or
the company has a cause of action against the
directors to proceed under section 235, it cannot be
said that he has knowledge of his right to make an
application under section 235."
26. Section 18 of the Limitation Act provides that when a person having a
right to institute a suit has by means of fraud been kept from the
knowledge of such right or of the title on which it is founded, the time
limited for instituting a suit against the person guilty of the fraud shall
be computed from the time when the fraud first became known to the
person affected thereby. When a person has committed a fraud and has
got property thereby it is for him to show that the person injured by his
fraud and suing to recover the property had clear and definite
knowledge of those facts which constitute the fraud, at a time which is
too remote to allow him to bring the suit. Therefore, if the plaintiff
desires to invoke the aid of Section 18 of the Limitation Act, he must
establish that there has been fraud and that by means of such fraud he
has been kept from the knowledge of his right to sue or of the title
whereon it is founded.
In the present case, the plaintiff has issued notice to the defendant
no.1 on 14th March, 2018 alleging that the plaintiff know from logistic
services that the defendant no.1 taken possession of the goods and
called upon the defendant no. 1 to pay the purchase price failing which
the plaintiff will take further steps or legal actions. The defendant no. 1
has sent reply to the plaintiff but the defendant no. 1 has not stated
that the defendant no. 1 has taken possession of the goods but on the
other hand, it was informed to the plaintiff to contract with Vincom
Commodities Limited and also informed that the subject-matter is sub-
judice before the Indian Courts.
27. It is the specific case of the plaintiff that the plaintiff came to know
about the clear and definite knowledge of the fraud on 1st October,
2019, on receipt of the copy of the plaint in connection with C.S. No. 30
of 2018 filed by the defendant no.1 against Vincom in which the
plaintiff is also one of the defendant and in the said suit at paragraphs
29 and 30 admitted that the defendant no.1 has taken the goods. The
defendant no.1 has prayed for the following reliefs in the said suit:
"a) Declaration that the plaintiff is not liable to
make any further payment to the defendant no. 1
in terms of the contracts;
b) A decree for a sum of Rs. 1,06,00,000/- as
pleaded in paragraph 47 hereinabove;
c) Interim interest and interest upon judgment
@ 18% per annum;
d) Perpetual injunction restraining the
defendant nos. 2 and 3 from demanding any
money from the plaintiff in respect of the
transactions of the defendant no. 1 with the
plaintiff;
e) Receiver;
f) Injunction;
g) Attachment;
h) Costs;
i) Such further and/or other reliefs."
28. The contention of the defendants that period of limitation of filing of the
suit by the plaintiff expired on 29th May, 2022, taking into account of
the time period extended by the Hon'ble Supreme Court in the Suo
Muto Case reported in (2022) 3 SCC 117 during the period of Covid-
19. Initially, the plaintiff has filed the suit on 22nd February, 2023 but
this Court has not allowed presenting the suit without going through
the process of pre-institution mediation. The plaintiff has filed an
application before the Mediation Centre on 15th March, 2023. The
Mediation Failure Report was filed on 8th June, 2023, and on 21st June,
2023, the plaintiff has filed the suit and on 5th July, 2023, this Court
admitted the plaint. The defendants alleged that the suit is admitted
after the limitation period of 403 days.
29. The plaintiff raised the contention that the plaintiff has issued the letter
dated 14th March, 2018 without any clear and definite knowledge of the
fraud committed by the defendant no.1. The plaintiff initiated an FIR on
16th May, 2018 and lock down declared on 14th March, 2020, thus
before Covid-19, 1 year 9 months and 28 days was elapsed. In the
meantime, the plaintiff has received copy of plaint filed by the
defendant no.1 on 1st October, 2019, thus after receipt of the copy of
plaint till 14th March, 2020, the plaintiff consumed 5 months and 14
days. If the period of limitation is taken from 1st October, 2019 i.e. from
the date of receipt of copy of plaint filed by defendant no.1 wherein the
defendant no.1 has admitted that he has taken the goods in that case,
the plaintiff has consumed two (2) months and 14 days till 14th March,
2020. The plaintiff has filed the first suit on 4th February, 2023 but the
Court has not admitted the said plaint, thus from 1st March, 2022 till
4th February, 2023, the plaintiff has consumed 11 months and 3 days.
In the mediation process, the plaintiff has consumed 1 month and 5
days from 11th February, 2023 to 15th March, 2023. Non-starter report
was issued on 8th June, 2023 and the plaintiff filed the present suit on
21st June, 2023, thus the plaintiff has consumed 13 days for filing of
suit after receipt of non-starter report.
30. The defendant has relied upon Section 26 of the Code of Civil
Procedure, 1908 and contended that the first suit filed by the plaintiff
on 22nd February, 2023, cannot be treated as suit as the same was not
allowed to be presented.
31. Mr. Gupta relied upon the judgment in the case of Raghwendra
Sharan Singh (supra) wherein the Hon'ble Supreme Court held that:
"9. Now, so far as the application on behalf
of the original plaintiff and even the observations
made by the learned trial court as well as the High
Court that the question with respect to the
limitation is a mixed question of law and facts,
which can be decided only after the parties lead
the evidence, is concerned, as observed and held
by this Court in Sham Lal, N.V. Srinivasa
Murthy as well as in Ram Prakash Gupta,
considering the averments in the plaint if it is found
that the suit is clearly barred by law of limitation,
the same can be rejected in exercise of powers
under Order 7 Rule 11(d) CPC."
32. The plaintiff has not prayed for taking into consideration of period of
limitation from 22nd February, 2023 to 8th June, 2023 spend for
mediation. It is the specific case that the plaintiff came to know about
clear and definitely fraud on 1st October, 2019 and suit is presented on
21st June, 2023, thus, from 1st October, 2019 to 14th March, 2020 i.e.
the date of declaration of Lockdown during Covid-19, the plaintiff has
consumed 5 months and 14 days from 15th March, 2020 to 1st March,
2022, the limitation period is to be excluded and thus question of
consideration of Section 26 of CPC does not arise.
33. The plaint can be rejected under Order VII, Rule 11 of the Code of Civil
Procedure, 1908, if conditions enumerated in the said provision are
fulfilled. It is needless to observe that the power under Order VII, Rule
11 can be exercised by the Court at any stage of the suit. The relevant
facts which need to be looked into for deciding the application are the
averments of the plaint only. If an entire and meaningful reading of the
plaint, it is found that the suit is manifestly vexatious and meritless in
the sense of not disclosing any right to sue, the Court should exercise
power under Order VII, Rule 11 of the Code of Civil Procedure, 1908.
Since the Power conferred on the Court to terminate civil action at the
threshold is drastic, the conditions enumerated under Order VII, Rule
11 to the exercise of power of rejection of plaint have to be strictly
adhered to. The averments of the plaint have to be read as a whole to
find out whether the averments of the plaint disclose a cause of action
or whether the suit is barred by any law.
34. It is well settled position that the cause of action for filing of the suit is
bundle of facts. The factum of the suit being barred by limitation,
ordinary, would be a mixed question of facts and law. In the present
case the plaintiff in paragraphs 15 to 36 of the plaint has described
about the circumstances of filing of the case and the plaintiff has
explained about the dates of the incidents of taking over the goods by
the defendant no.1. All the facts narrated by the plaintiff with regard to
point of limitation are required to be decided during trial by framing an
issue.
35. The plaintiff has filed another application being G.A. (Com) No. 4 of
2024 praying for amendment in the plaint by incorporating the facts of
the case filed by the defendant no.1 being C.S. No. 30 of 2018 and to
disclose the plaint of the said case in the present suit as Annexure "A-
37". It is admitted by the plaintiff that the plaintiff has received the
copy of the plaint filed by defendant no.1 being C.S. No. 30 of 2018 on
1st October, 2019. The plaintiff has filed the present suit on 21st June,
2023 and the same was presented and admitted on 5th July, 2023.
Admittedly, at the time of filing of the present suit by the plaintiff, the
plaintiff was in possession of the copy of the plaint filed by the
defendant no.1.
36. In paragraph 29 of the plaint, the plaintiff has stated as follows:
"29. In October, 2019, copies of the above
referred Civil Suit filed by the Defendant no. 1 in
the Calcutta High Court on February 16, 2018
against vincom and the Plaintiff herein, were
formally served upon the Plaintiff. The Civil Suit
has been filed by Defendant No. 1 claiming from
vincom, certain alleged notional losses purportedly
suffered by them for non-delivery of the entire
contracted quantity of the goods due to which
losses were suffered since the price of the
commodity fluctuated. The defendant No. 1 has
also claimed a perpetual injunction against the
Plaintiff to restrain them from seeking payment for
the Goods. It is pertinent to note that in the Civil
Suit, the Defendant No. 1 has expressly admitted to
having received the Goods."
37. Order XI, Rules 1 to 6 of the Code of Civil Procedure, 1908 as amended
under the Commercial Courts Act, 2015 reads as follows:
"O.XI. R.1. Disclosure and discovery of
documents.-- (1) Plaintiff shall file a list of all
documents and photocopies of all documents, in its
power, possession, control or custody, pertaining to
the suit, along with the plaint, including:--
(a) documents referred to and relied on by the
plaintiff in the plaint;
(b) documents relating to any matter in
question in the proceedings, in the power,
possession, control or custody of the
plaintiff, as on the date of filing the plaint,
irrespective of whether the same is in
support of or adverse to the plaintiff's case;
(c) nothing in this Rule shall apply to
documents produced by plaintiffs and
relevant only--
(i) for the cross-examination of the
defendant's witnesses, or
(ii) in answer to any case set up by the
defendant subsequent to the filing of
the plaint, or
(iii) handed over to a witness merely to
refresh his memory.
(2) The list of documents filed with the plaint
shall specify whether the documents in the power,
possession, control or custody of the plaintiff are
originals, office copies or photocopies and the list
shall also set out in brief, details of parties to each
document, mode of execution, issuance or receipt
and line of custody of each document.
(3) The plaint shall contain a declaration on
oath from the plaintiff that all documents in the
power, possession, control or custody of the
plaintiff, pertaining to the facts and circumstances
of the proceedings initiated by him have been
disclosed and copies thereof annexed with the
plaint, and that the plaintiff does not have any
other documents in its power, possession, control or
custody.
Explanation.-- A declaration on oath under
this sub-rule shall be contained in the Statement of
Truth as set out in the Appendix.
(4) In case of urgent filings, the plaintiff may
seek leave to rely on additional documents, as part
of the above declaration on oath and subject to
grant of such leave by Court, the plaintiff shall file
such additional documents in Court, within thirty
days of filing the suit, along with a declaration on
oath that the plaintiff has produced all documents
in its power, possession, control or custody,
pertaining to the facts and circumstances of the
proceedings initiated by the plaintiff and that the
plaintiff does not have any other documents, in its
power, possession, control or custody.
(5) The plaintiff shall not be allowed to rely on
documents, which were in the plaintiff's power,
possession, control or custody and not disclosed
along with plaint or within the extended period set
out above, save and except by leave of Court and
such leave shall be granted only upon the plaintiff
establishing reasonable cause for non-disclosure
along with the plaint.
(6) The plaint shall set out details of
documents, which the plaintiff believes to be in the
power, possession, control or custody of the
defendant and which the plaintiff wishes to rely
upon and seek leave for production thereof by the
said defendant."
38. The plaintiff has neither prayed for leave to disclose the plaint of C.S.
No. 30 of 2018 nor has the plaintiff explained why the plaintiff has not
disclosed the said document at the time of filing of the suit though the
same was in possession of the plaintiff. The plaintiff by way of
amendment intent to bring the said document on record.
39. In paragraph 29 of the plaint, the plaintiff has already stated about the
suit filed by the defendant no. 1 and in the said paragraph, the plaintiff
has categorically taken the stand that the defendant no.1 has admitted
that the defendant no.1 has received the goods.
40. This Court finds that only to bring the copy of the plaint filed by the
defendant no.1 being C.S. No. 30 of 2018 in the record of this case, the
plaintiff has sought for amendment but the plaintiff has not prayed for
leave to disclose the said documents and also not disclosed any reason
as to why the plaintiff has not disclosed the said plaint at the time of
filing of the suit though the same was in possession of the plaintiff.
41. In view of the above, this Court did not find any merit on the
application filed by the plaintiff being G.A. No. 4 of 2024.
42. G.A. No. 2 of 2023 and G.A. (Com) No. 4 of 2024 are dismissed.
(Krishna Rao, J.)
