Bhai Analjit Singh vs M/S. Mitsui & Co. Ltd. & Ors.
2008 Latest Caselaw 2305 Del

                                Reportable
                 IN THE HIGH COURT OF DELHI AT NEW DELHI

                                +FAO (OS) No.433/2008

                                                     Date of Hearing: 14.11.2008
                                                    Date of Decision: 19.12.2008

#Bhai Analijit Singh                                  .....Appellant
!                                         Through: Mr. B.B. Sawhney, Sr. Advocate
                                          with Mr.Amit Kumar Singh

                       Versus

$M/s. Mitsui & Co. Ltd. & Ors.                          .....Respondents

                                          Through Mr.Sandeep Sethi, Sr. Advocate
                                          with Ms.Sangeeta Bhati, Ms.Ruchi Gaur
                                          and Mr.Prabhat Kumar for respondent No.1
                                          Mr.Sanjeev Puri, Sr. Advocate with
                                          Mr.Gyaltsen for respondent Nos.4(a),
                                          4(b) and 4(c)

CORAM :-
*THE HON'BLE MR.JUSTICE A.K.SIKRI
THE HON'BLE MR. JUSTICE MANMOHAN SINGH

       1.Whether Reporters of Local papers may be allowed to
         see the Judgment?
       2.To be referred to the Reporter or not?
       3.Whether the judgment should be reported in the Digest?

A.K. SIKRI, J.

:

1. The respondent No.1 herein is the plaintiff in CS(OS) No.593/1999 filed

for recovery of money against three persons, namely, Bhai Manjit

Singh, defendant No.1(respondent No.2 herein), Bhai Mohan Singh,

Karta of Bhai Mohan Singh HUF, defendant No.2 and Bhai Manjit Singh

HUF, defendant No.3 (respondent No.3 herein). During the pendency

of the suit Bhai Mohan Singh (defendant No.2) passed away and in

these circumstances, the plaintiff moved application under Order XXII

for substituting his legal representatives. Legal representatives named

in these applications are the appellants herein as well as the

respondents No.4(a) to 4(c) herein. This application has been allowed

by the learned Single Judge vide orders dated 16.9.2008. The

opposition of this application by the appellant herein [defendant

No.2(d)] has been repelled. Not satisfied, the appellant has challenged

that order in this appeal. It is not in dispute that the appellant as well

as the respondents No.4(a) to 4(c) are the legal representatives of the

deceased defendant No.2. The opposition of the appellants for

impleadment was on the ground that the cause urged in the plaint qua

defendant No.2 constituted a personal claim, which was extinguished

and did not survive on the passing away of defendant No.2. Therefore,

his legal representatives could not be substituted in his place. For

appreciating this contention and the manner in which it is dealt with by

the learned Single Judge, it would be necessary to take note of the

averments made in the suit on the basis of which cause is founded

against the defendants and in particular against second defendant,

since deceased.

2. It is alleged by the plaintiff that the plaintiff was interested in

purchasing a property in New Delhi and through broker it was

introduced to defendant No.1, who showed his interest in selling

property bearing No.61, Golf Links, New Delhi. Defendant No.1 also

represented that he was fully competent to enter into the

negotiations. Plaintiff was informed that the property in question was

in the name of Bhai Mohan Singh HUF of which defendant No.1 is a

member and defendant No.2 is the Karta. Certain other

representations were made regarding family settlement between the

parties as per which, the aforesaid property came to the share of

defendant No.1, though this was not recorded in the records of the

L&DO. Defendant No.1 informed that he was duly authorized and

competent to deal with the property in question. Defendant No.2 also

issued letter dated 2.2.1996 whereby the plaintiff was informed that

defendant No.1 was irrevocably authorized by the defendant No.2 to

deal with the property in question. It was also stated that in that letter

by the defendant No.2 that the plaintiff should make payment of sale

consideration to the defendant No.3 and the agreement to sell as well

as the sale deed would be executed by the defendant No.2. Both

defendants No.1 and 2 assured the plaintiff that the property was free

from all encumbrances and defendant No.1 was fully authorized and

entitled to deal with the property and the title deeds of the property

would be made available to the plaintiff. Memorandum of

Understanding dated 3.2.1996 was also executed between the parties,

inter alia, stating that an agreement of sale with respect to the said

property would be executed on or before 28.2.1996 after the plaintiff

and its advocates were satisfied about the title of the defendant No.1

to the property in question. Total consideration agreed for the

property in question was to be Rs.16 crores and it was further agreed

that 10% of that amount, i.e., Rs.1.6 crores would be paid by the

plaintiff to the defendant No.2 as token money/part payment against

the aforesaid consideration. The manner in which balance payment

was to be made was also recorded. The plaintiff accordingly paid a

sum of Rs.1.60 cores as token money/advance/part payment to

defendant No.1 by cheque drawn in favour of defendant No.3.

However, when the relevant documents pertaining to the property

were demanded for examination, it transpired that the said property

was, in fact, mortgaged to defendant No.4 bank against a loan of

Rs.2.25 crores. Defendant No.1 also failed to satisfy the plaintiff about

its title to the property and the property was not free from

encumbrances as well. In these circumstances, the plaintiff called off

the deal and sent notice dated 1.2.1999 to defendants No.1 to 3 calling

upon them jointly and severally to refund the advance money together

with interest/compensation/damages. As the money was not

refunded, suit was filed stating that defendants No.1 to 3 were jointly

and severally liable to pay the amount along with interest @ 18% per

annum. In the plaint there are further allegations against defendant

No.2. It is alleged that defendants No.1 and 2 deliberately concealed

and suppressed the material fact regarding the mortgage of the said

property. Defendant No.2 supported defendant No.1 in his plans to

deceive the plaintiffs and both defendants No.1 and 2 jointly and

severally played fraud on the plaintiff and cheated it by

misappropriating the total amount of Rs.1.60 crores.

3. The submission of the learned counsel for the appellant while

contesting the application for bringing the LRs on record, before

learned Single Judge as well as before us, was that on an overall

reading of the suit averments it would be manifest that defendant No.2

was sought to be fastened with liability on the ground that he made

misrepresentation and played fraud upon the plaintiff in connivance

with defendant No.1. It was argued that at best these constituted

personal allegations and did not survive the death of the person. The

learned Single Judge repelled this contention in the following manner:-

"9. No doubt, there are certain averments in the plaint, which point to culpability of the second defendant. However, the Court cannot lose sight of the fact that a common written statement was filed by all the defendants; in para 7 of that written statement, the defendants aver as follows:

"Acting upon the said MOU the defendants did not deal with the said property and maintained status quo for (a) keeping the property vacant despite many offers for its lease at high rates of rent, (b) not entering into even discussion with other prospective buyers who were keen to purchase the property."

It is again averred as follows:

"..........the answering defendants are even now prepared and agree to the plaintiff making payment direct to defendant No.4 bank against the outstanding loan and retrieving from the bank the title deeds of the property in order to complete the sale transaction as agreed between the parties, in terms of the MOU dated 3rd February, 1996."

10. Apart from the above averments, the materials on record which include a letter written by the second defendant are indicative of his role and involvement in the transaction. In these circumstances, the Court is un-persuaded by the submission on behalf of the legal representative 2(d) who has not even chosen to file a reply for more than a year that the

suit abated so far as the second defendant was concerned. The other legal representatives have not field any reply, opposing the application."

4. As mentioned above, the submission of the learned counsel for the

appellant remained the same. Mr. Sawhney, learned senior counsel

appearing for the appellant, emphasized that the agreement was

essentially between the plaintiff and the defendant No.1 and money

was also paid to defendant No.1 and 3 even as per the averments

made in the plaint. The defendant No.2 was arrayed as party and

decree prayed against him only on the ground that defendant No.2

gave assurances that property was free from encumbrances and

further that defendant No.1 was fully authorized to deal with the said

property. These assurances, if turned out to be false, amounted to civil

wrong, which could be attributed to defendant No.2 personally. Cause

of action was clearly pleaded against defendant No.2 on the aforesaid

allegation which was manifest from the reading of paras 11 and 12.

Therefore, the alleged liability of the defendant No.2 would only be

tortuous and not contractual. The learned counsel argued that it was

settled position in law that right to sue for tort survives only (i) in case

of a deceased plaintiff, if the estate has thereby suffered damage; and

(ii) in case of a deceased defendant, if there has thereby been benefit

or accretion to the estate.

5. He also submitted that since the money was not received by the

respondent No.2, its estate was not benefitted and thus, there was no

additional benefit/accretion to own monies or estate of the defendant

No.2, which is the prerequisite for impleading LRs of such wrong doer

on his death. Learned counsel also made fervent plea that in any case,

cost of Rs.60,000/- should not have been imposed. Mr.Sethi, learned

senior counsel appearing for the respondent No.1/plaintiff, on the

other hand, submitted that the appellant/defendant No.2(d) and the

other impleaded legal heirs of the deceased defendant No.2 are

necessary and proper parties to the suit for the purpose of effectively

adjudicating the disputes between the parties. The learned Single

Judge has rightly allowed the impleadment of the LRs of the deceased

defendant No.2 after correct appreciation of the facts and law involved

in the present case and the appeal of the appellant must fail for the

following amongst other reasons:-

(i) The MOU dated 3.2.1996 was entered into with defendant

No.1 to the suit for the purchase of property bearing

No.61, Golf Links which stood in the name of the deceased

defendant No.2. The part payment of Rs.1.60 crores was

made to defendant No.1 and 3 to the suit in respect of the

said property upon the instructions of the deceased

defendant No.2 and as such the deceased defendant No.2

would have been equally liable to refund the monies of

the plaintiff.

(ii) The plaintiff holds defendant Nos.1 to 3 jointly and

severally liable for refund of plaintiff's monies/dues.

Deceased defendant No.2 would be equally liable to the

plaintiff for the refund of the monies fraudulently

extracted from it by the defendants. A decree if passed by

this Court in favour of the plaintiff and against defendant

Nos.1 to 3 would be equally executable against the estate

of the deceased defendant No.2, hence the necessity of

impleading the LRs of the deceased defendant.

(iii) Further, it is respectfully submitted that the deceased

defendant no.2 has at no point of time disassociated

himself from the transaction in question. The defendants

have filed a joint written statement to the plaint wherein

no denial of his involvement in the transaction has been

made by the deceased defendant. No application has ever

been moved by the deceased defendant for striking off his

name from the array of parties for lack of cause of action.

Therefore, it is necessary that the LRs of the deceased

defendant be impleaded for the proper adjudication of the

suit. Further, no reply to the application for impleadment

of LRs was filed by the appellant/defendant for over a year

after issuance of notice objecting to their impleadment in

the suit.

(iv) Section 306 of the Succession Act, 1925, lays down the

causes of action that do not survive against his executors

or administrators after the death of a person. In terms of

the said section, only causes of action for defamation,

assault or other personal injuries and cases where after

the death of the party, the relief sought could not be

enjoyed or grant of which would be nugatory are causes

that would not survive after the death of a person. The

reliance of the appellant on the maxim action personalis

moritur cum persona is completely misplaced and

untenable. The case of the plaintiff/respondent does not

fall under any of the cases discussed in the aforesaid

section and the appellant is, thus, a necessary and proper

party to the suit.

6. We have given our due consideration to the aforesaid submissions

made by counsel for both the parties. We have also minutely gone

through the averments made in the plaint in order to see the nature of

allegations leveled against the defendant No.2 and the basis on which

he was impleaded in the suit as defendant and decree sought against

him.

7. Admitted facts are that the advance payment of Rs.1.60 crores was

given by the plaintiff to the defendant No.1 by cheque drawn in favour

of the defendant No.3. Though it was earnest money/token money

against the intended sale of the property bearing No.61, Golf Links,

New Delhi, suit is not for specific performance but for refund of this

money which was predicated on the allegation that it transpired later

that the property in question was mortgaged to the defendant No.4

bank against a loan and the defendant No.1 had failed to satisfy the

plaintiff about its title to the property which was not free from

encumbrances as well. Thus, the plaintiff wants refund of the

aforesaid amount of Rs.1.60 crores after it cancelled the deal. Though

this money was given with interest to defendants No.1 and 3, reason

for impleading defendant No.2 and seeking decree against him also

was that it was on the representation of defendant No.2 that such a

deal was negotiated by the plaintiff with defendant No.1. The

allegations/averments qua defendant No.2 in the plaint are of

following nature:-

"6. xxxxx In this regard a letter dt. 2.2.1996 was also issued to the Plaintiff by Defendant No.2 whereby the Plaintiff was informed that Defendant No.1 was irrevocably authorized by Defendant No.2 to deal with the property in question. A copy of the letter dated 2.2.1996 is being annexed herewith as ANNEXURE/P-1. Defendant No.2 vide the said letter further asked the Plaintiff to make the payment of the sale consideration to Defendant no.3 and informed that the Agreement to Sell and Sale Deed would be executable by Defendant No.2. Defendants No.1 and 2 assured the Plaintiff that the property was free from all encumbrances and Defendant No.1 was fully authorized and entitled to deal with the property and that the title deeds to the property would be made available to the Plaintiff xxxxx Defendant Nos.1 and 2 further assured the Plaintiff that they would satisfy the Plaintiff about the title of the Defendant No.1 to the said property before an Agreement for Sale is executed by the parties.

11. That Defendant No.1 and Defendant No.2 deliberately concealed and suppressed a material fact regarding the property having been mortgaged with Defendant No.4 Bank thereby making the Plaintiff part with an amount of Rs.1.6 crores. The Defendants made a factually incorrect representation to the Plaintiff about the title and marketability of the property in question with the mala fide intention of defrauding the Plaintiff of its money xxxxx Whereas Defendant No.1 and Defendant No.2 knew very well that the property in question stood mortgaged to defendant No.4 and would not be released without clearing the bank loan in spite this they entered into an MOU for the sale of the property with the plaintiff and induced the Plaintiff through false representation to part with a substantial sum of money as token/advance amount. Defendant No.1 made specific representation in the MOU that he would be able to pass on a clean and marketable title to the Plaintiff free from all encumbrances. Therefore, Defendant No.1 made representations to the Plaintiff which were false to his knowledge and Defendant No.2 knowingly supported Defendant No.1 in its plans to deceive the Plaintiff xxxxx

12. That Defendant Nos.1 and 2 have jointly and severally played fraud on the Plaintiff and cheated it and have also misappropriated the total amount

have failed to satisfy the Plaintiff about title and interest of the property and have also failed to refund the sum of Rs.1.60 crores paid by the Plaintiff to Defendant No.3 for the benefit of Defendant No.1, hence the Plaintiff is left with no other alternative but to institute the present suit."

8. Elsewhere also, similar allegations are made against the defendant

No.2. All these allegations are in the nature of purported fraud played

by defendant No.2 along with defendant No.1 by suppressing the

material fact regarding the property having been mortgaged and

defendant No.1 not having clear title. Otherwise, most of the

pleadings relate to deal between the plaintiff on the one hand and

defendant No.1 on the other hand and payment by the plaintiff to the

defendant No.1. Therefore, admittedly, in so far as the contractual

deal is concerned, it was primarily between the plaintiff and defendant

No.1 or for that matter, defendant No.3. The defendant No.2 came

into picture for limited purpose of making certain representations on

the basis of which, the plaintiff supposedly acted upon. We, therefore,

find force in the submission of the learned counsel for the appellant

that the plaintiff sought to implicate the defendant No.2 and recovery

of money from him on the basis of purported tortuous acts committed

by him which were not under the realm of contract.

9. In fact, the learned Single Judge has accepted this position as is clear

from the opening sentence of para 9 of the impugned order, already

extracted above. In spite thereof, reason for impleadment of the

appellant/legal representatives of second defendant are two-fold as

given by the learned Single Judge:-

a) Filing of joint written statement by all the defendants;

b) Writing of letter by the second defendant indicative of

his role and involvement in the transaction.

10.We do not find these grounds to be relevant for impleadment of the

legal representatives of the second defendant after his death. Even

when joint written statement was filed by all the defendants, that

would not mean that the plaintiff is not bound by its own pleadings

and averments made in the plaint, as extracted above, as per which the

liability is sought to be fastened upon the defendant No.2 was under

the tort. The letter written by the second defendant indicative of his

role and involvement again shows, if at all, misrepresentation on his

part which would again be in the realm of tort. The defendant No.2

otherwise was not the beneficiary as money was given to the

defendants No.1 and 3. It is not the case of the plaintiff that estate of

the defendant No.2 has benefitted and therefore, this benefit has

percolated to his legal representatives after his demise. Therefore, the

alleged liability of the defendant No.2 would only be tortuous and not

contractual. In these circumstances, when estate of defendant No.2

has not benefitted, the action against defendant No.2 would not

survive after his death and his LRs cannot be brought on record. In M.

Veerappa v. Evelyn Sequeira and Ors., AIR 1988 SC 506 the Supreme

Court, after extracting Section 306 of the Indian Succession Act, 1925,

held that:-

".....the words "personal injuries" do not mean "injuries to the body alone but all injuries to a person other than those which cause death and that the relevant words must be read ejusdem generis with the words 'defamation and assault' and not with the word 'assault' alone."

11.It would also be of advantage to quote the observations of the Full

Bench of the Madras High Court in Rustomji Dorabji v. W.H. Nurse, AIR

1921 Mad. 1 (FB) as excerpted by the Supreme Court in the aforesaid

judgment:-

"We are therefore driven to the conclusion that the Act must be supposed to have envisaged a logically coherent class of causes of action, and that result can only be achieved by construing "personal injuries" as meaning not "injuries to the body" merely, but injuries to the person in Blackstone's sense, other than those which either cause death or tangibly affect the estate of the deceased injured person or cause an accretion to the estate of the deceased wrong doer. In effect,

we think that the words which we have to construe are ejusdem generis not merely with the last preceding word "assault", but with the two preceding words "defamation" and "assault"

(emphasis supplied)

12.On this basis the Supreme Court firmed up the legal principle as under:

"The maxim of action personalis cum moritur persona has been held inapplicable only in those cases where the injury caused to the deceased person has tangibly affected his estate or has caused an accretion to the estate of the wrong- doer .........."

xxxxx "If the entire suit claim is founded on torts the suit would undoubtably abate. If the action is founded partly on torts and partly on contract then such part of the claim as relates to torts would stand abated and the other part would survive........"

13.Provisions of Section 306 of the Succession Act would apply in the

instant case which are founded on the maxim action personalis moritur

cum persona.

14.We, therefore, allow this appeal, set aside the impugned order dated

16.9.2008 passed by the learned Single Judge and consequently,

dismiss the application of the plaintiff for bringing the LRs of the

defendant No.2 on record. Name of the defendant No.2, because of

his death, shall be deleted from the array of parties in the suit and the

suit shall proceed against defendants No.1 and 3.

                                                          (A.K. SIKRI)
                                                            JUDGE



December 19, 2008                                  (MANMOHAN SINGH)
hp.                                                     JUDGE