Mr. S.K. Sikka And Anr. vs Hindustan Papers Corporation ...
2006 Latest Caselaw 232 Del

JUDGMENT

Sanjay Kishan Kaul, J.

1. The suit has been filed for declaration that the judgment and decree dated 18.4.1987 passed by the Civil Judge and JMFC Court, Srirangpatnam, confirmed by the High Court of Karnataka in appeal RFA No.673/1987 dated 15.8.1987 be decreed to be ineffective and non-executable as having been obtained by fraud perpetuated by defendant No.2 and in collusion with defendant No.3.

2. The plaintiff No.1 is the sole proprietor of plaintiff No.2. Defendant No.1 is the public sector undertaking and defendant No.2 is the subsidiary of defendant No.1. Defendant No.2 is stated to have gone into liquidation.

3. The subject matter of the suit is stated to be a commercial transaction for purchase of certain equipment entered into between defendant No.2 in 1978 and at M/s Sutherland (Equipment and Processes) Limited to United Kingdom which entity is stated to have been dissolved in July, 1991. The purchase order dated 25.7.1978 was placed by defendant No.2 on M/s Sutherland and defendant No.2 opened a Letter of Credit.

4. The plaintiff claims that defendant No.2 and M/s Sutherland perpetuated a fraud as the documents were negotiated not in accordance with the international practices. The dispute relates to the transaction and the claim was filed in Srirangpatnam for Rs.20 lakhs plus interest at the rate of 18% per annum by defendant No.2. The plaintiffs were also arrayed as defendants. M/s Sutherland was proceeded ex-parte in the suit and it is stated that the entire liability has been fastened on the plaintiff.

5. It is also relevant to note that against the order of the Karnataka High Court, Civil Appeal No. 3320/1998 was filed which also stands disposed of by an order of the Supreme Court on 22.4.2004 by modifying and reducing the claim.

6. The plaintiff claims that the decree passed by the Civil Judge is not executable and the orders are stated to be suffering from inherent lacuna.

7. A perusal of the order of the apex court shows that the plaintiff was held to be the agent of M/s Sutherland and the plea raised in the plaint of there being direct transaction between defendant No.2 and M/s Sutherland has not been accepted. The goods supplied were found not to be in order and the suit was filed for specific performance of contract or, in the alternative, for damages. The suit was contested by the plaintiff herein. The decree was passed against the plaintiff in the capacity of an agent of the foreign party. The Supreme Court found that the plaintiffs had acted as agents and on the basis of appreciation of evidence in the trial court and the High Court, had found that the plaintiffs had facilitated the playing of a fraud on the respondents. The plaintiffs were thus held liable and in view of the provisions of Section 233 of the Indian Contract Act, the defendants were held entitled to recover either from the principal or the agent. The decretal amount was reduced from Rs.13,52,095/- to Rs.5,93,820/- along with interest at the rate of 18% per annum from 22.4.1980 till date of payment.

8. The plaintiffs seek declaration for nullifying the judgments of the trial court, High Court of Karnataka as well as the apex court on the alleged ground of fraud and further decree for a sum of Rs.55.15 lakhs towards cost and harassment and mental agony, court fee paid by the plaintiff, interest accrued thereon, legal, administrative and traveling expenses is claimed for.

9. A perusal of the plaint thus shows that the issues sought to be raised in the plaint were in fact raised before the competent court where the plaintiffs herein contested the suit. The plaintiffs not only lost before the trial court but also before the appellate court. The apex court considered the matter and reduced the claim of the plaintiff.

10. In my considered view, such a plaint is not maintainable.

11. Order 7 Rule 11 of the Code of Civil Procedure (hereinafter referred as "the said Code") deals with rejection of the plaint and reads as under:

11. Rejection of plaint. Â- The plaint shall be rejected in the following cases :-

(a) where it does not disclose a cause of action;

(b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so;

(d) where the suit appears from the statement in the plaint to be barred by any law;

(e) where it is not filed in duplicate.

(f) where the plaintiff fails to comply with the provisions of rule 9;

Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature for correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.

12. In my considered view, the plaint neither discloses the cause of action nor is maintainable in law. The plaint is barred by law since it seeks a declaration that the judgment of the apex court is not binding on the parties and no recovery should be made in terms of the judgment of the apex court. The apex court has in fact modified the decree and it is not within the purview of this court to declare the said decree as null and void. The claim for damages arose only on account of the fact that the plaintiffs were not liable for the amount which has not been found sustainable by the apex court.

13. The present plaint is clearly an attempt only to evade the execution of the decree modified by the apex court and is thus a clear abuse of the process of law. Merely because a plaint is filed, summons are not liable to be issued in normal course without perusal of the plaint and verification whether such a plaint would be maintainable. If such a plaint is not maintainable, then the plaint is liable to be rejected under Order 7 Rule 11 of the Code.

14. I am fortified by the views expressed by the Supreme Court in K.K. Modi v. K.N. Modi and Ors., where it was observed as under:

43. The Supreme Court Practice 1995 published by Sweet & Maxwell in paragraphs 18/19/33 (p.344) explains the phrase "abuse of the process of the court" thus:

This term connotes that the process of the court must be used bona fide and properly and must not be abused. The court will prevent improper use of its machinery and will in a proper case, summarily prevent its machinery from being used as a means of vexation and oppression in the process of litigation.... The categories of conduct rendering a claim frivolous, vexatious or an abuse of process are not closed but depend on all the relevant circumstances. And for this purpose considerations of public policy and the interests of justice may be very material.

44. One of the examples cited as an abuse of the process of the court is relitigation. It is an abuse of the process of the court and contrary to justice and public policy for a party to relitigate the same issue which has already been tried and decided earlier against him. The reagitation may or may not be barred as res judicata. But if the same issue is sought to be reagitated, it also amounts to an abuse of the process of the court. A proceeding being filed for a collateral purpose, or a spurious claim being made in litigation may also in a given set of facts amount to an abuse of the court. Frivolous or vexatious proceedings may also amount to an abuse of the process of the court especially where the proceedings are absolutely groundless. The court then has the power to stop such proceedings summarily and prevent the time of the public and the court from being wasted. Undoubtedly, it is a matter of the court's discretion whether such proceedings should be stopped or not; and this discretion has to be exercised with circumspection. It is a jurisdiction which should be sparingly exercised, and exercised only in special cases. The court should also be satisfied that there is no chance of the suit succeeding.

15. The plaint is rejected and the suit is dismissed.

IA No. 10172/2005 (Under Order 39 Rules 1 & 2 CPC)

16. Dismissed.