M/S Vinedale Distilleries ... vs M/S Adnan Investments ...
2009 Latest Caselaw 5030 Del

*           THE HIGH COURT OF DELHI AT NEW DELHI

%                                            Judgment Reserved on: 03.12.2009
                                             Judgment delivered on: 07.12.2009

                              IA Nos. 15247/2009 & 15249/2009 in
                              CS(OS) No. 775/2009

M/S VINEDALE DISTILLERIES LTD.                              ..... Plaintiff

                      vs.


M/S ADNAN INVESTMENTS CONSULTANTS                           ....Defendant


                              IA Nos. 15229/2009 & 15231/2009 in
                              CS(OS) No. 776/2009

M/S VINEDALE DISTILLERIES LTD.                              ..... Plaintiff

                      vs.


M/S B.D.A. BREWERIES & DISTILLERIES LTD.                    ....Defendant


Advocates who appeared in this case:

For the Plaintiff/
        Non-applicant : Mr A K Thakur with Mr Rajiv Arora, Advocates for A K
                      Aggarwal Group.
                      Mr Ashwini K Mata, Sr Advocate with Mr Rishi Agarwala &
                      Ms Manmeet Sethi for S K Aggarwal Group.
For the Defendant/
        :Applicant    : Mr Chetan Sharma, Sr. Advocate with Mr Amit Sibal &
                      Sanjay S Chhabra, Advocates for the applicants/defendants.


CORAM :-
HON'BLE MR JUSTICE RAJIV SHAKDHER

1.

Whether the Reporters of local papers may be allowed to see the judgment ? Yes

2. To be referred to Reporters or not ? Yes

3. Whether the judgment should be reported in the Digest ? Yes

RAJIV SHAKDHER, J

1. By this order, I propose to dispose of the captioned applications being four in

number by a common order. IA No. 15247/2009 in suit no. 775/2009 and IA No.

15229/2009 in suit no. 776/2009 have been filed by the defendants under Order 14

Rule 1 read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter

referred to as „CPC‟). The prayers in the two applications are identical. The prayers

being:

(i)      Fresh/additional issues be framed

(ii)     Defendants be permitted to file evidence by way of affidavits in terms of order

dated 27.08.2008 passed in suit no. 1514/1994 and other connected suits.

1.1 Similarly, in IA No. 15249/2009 in suit no. 775/2009 and IA No. 15231/2009

in suit no. 776/2008 filed by the defendants under Section 22 read with Section 151 of

the CPC; the defendants have sought the following reliefs:

(i) Direct trial of the suits, that is, suit no. 775/2009 and 776/2009 along with suit

no. 1514/1994.

(ii) Allow the defendants to file additional evidence by way of affidavits in support

of its case.

2. The present applications arise in the background of the following facts:

2.1. The entire dispute between the warring parties is with respect to the control of

the plaintiff, i.e., M/s Vinedale Distilleries Ltd. (hereinafter referred to as the

„Vinedale‟). The parties, contesting various proceedings with a view to gain control

over Vinedale, are the Chhabaria Group and the Aggarwal Group comprising of two

brothers, namely, S K Aggarwal and Anil Aggarwal. In these proceedings the plaintiff

is the Aggarwal Group while the defendants are the Chhabaria Group. I have

described these accordingly. There are some disputes even between S K. Aggarwal

and Anil Aggarwal. It appears that till 31.03.1987 the plaintiff/Aggarwal Group

controlled the Vinedale. The Plaintiff/Aggarwal Group ceded some part of the control

to a corporate entity by the name of Shaw Wallace & Company. Ltd. (hereinafter

referred to as „Shaw Wallace‟) by permitting them to purchase 51% of the

shareholdings in Vinedale through its subsidiary companies Aronova and Mahadev.

Resultantly, the Aggarwal Group was left with 49% shares in the Vinedale. This

position obtained till 31.03.1991.

2.2. It appears that in March, 1991 Shaw Wallace transferred their 51%

shareholding in Vinedale to the Plaintiff/Aggarwal Group through the medium of four

investment companies controlled by them at the relevant point in time, namely,

Deccan Securities Pvt. Ltd., Chamunda Holdings Pvt. Ltd., Yogeshwara Holdings Pvt.

Ltd and Deccan Holdings Pvt. Ltd. (hereinafter collectively referred to as "Investment

Companies"). Resultantly, the entire shareholding of Vinedale was owned and

controlled by the aforementioned four investment companies. The point of dispute

commences from this stage onwards. It is claimed by the defendants/Chhabaria Group

that the entire shareholdings of Vinedale were purchased by them from the four

investment companies through the medium of Sanman Distributors Pvt. Ltd.

(hereinafter referred to as „Sanman‟) against a valuable consideration. The

plaintiff/Aggarwal Group, on the other hand, disputes this position.

2.3. The aforesaid dispute, which relates to the control of the Vinedale, has led to

the institution of the following proceedings:

(i) Suit No. 1514/1994, titled Vinedale Distilleries Ltd & Ors vs Satish Kumar

Aggarwal & Ors. This suit was originally filed in the Bombay High Court and was

numbered as suit no. 307/1993. To be noted, this suit was instituted at the behest of

the defendants/Chhabaria Group.

(ii) Suit No. 244/1997, titled Vinedale Distilleries Ltd. & Ors. Vs Sanman

Distributors Ltd. & Ors. This suit was originally instituted in the City Civil Court in

Secunderabad, at which point in time it was numbered as suit no. 389/1994. This suit

is a recovery suit filed at the behest of the plaintiff/Aggarwal Group.

(iii) Suit No. 775/2009, titled Vinedale Distilleries Ltd. & Ors. vs M/s Adnan

Investment Consultants. This suit was also filed in the City Civil Court at

Secunderabad, and was originally numbered as suit no. 376/1994. This suit was also

instituted at the behest of the plaintiff/Aggarwal Group.

(iv) Suit No. 776/2009, titled Vinedale Distilleries Ltd. & Ors. Vs M/s BDA

Breweries & Distilleries Ltd. This suit was also filed in the city civil court at

Secundarabad, and was originally numbered as suit no. 400/1994. This suit was also

instituted at the behest of the plaintiff/Aggarwal Group.

3. As would be evident from the above, in all the aforementioned four suits the

plaintiff is Vinedale. However, the first suit, i.e., suit no. 1514/1994, as indicated

above, is a suit which is instituted by the defendants/Chhabaria Group, while the

remaining three suits, i.e., suit nos. 244/1997, 775/2009 and 776/2009 have been filed

by the plaintiff herein, i.e., Aggarwal Group. It is not disputed that suit no. 1514/1994

was transferred to this Court by virtue of the order of the Supreme Court.

4. In the background of the aforesaid facts it is contended by the

defendants/Chhabaria Group that since they have paid valuable consideration to

acquire 100% shareholding of the four investment companies through Sanman, they

are in control of Vinedale. In order to demonstrate this they have averred that all

relevant documents such as the original share-certificates of Vinedale as well as that of

four investment companies alongwith their respective statutory records are in

possession of Sanman.

5. As against this the plaintiff/Aggarwal Group allege that Shaw Wallace, which

was in control of Vinedale w.e.f. 19.03.1988, siphoned huge amounts of money from

Vinedale to their seven sisters concern, namely, M/s Cruckshank & Co. Ltd., Sanman;

Tracstar Investments Pvt. Ltd., BDA Brewery & Distilleries Ltd. (hereinafter referred

to as „BDA‟), Budgam Finance & Investments, Adnan Investment Consultants and

International Tyres Ltd. The extent of the amount siphoned by Shaw Wallace from

Vinedale, according to the plaintiff/Aggarwal Group, is a sum of Rs 8,38,12,337/-. It

is to recover a part of the siphoned amount that the plaintiff/Aggarwal Group have

instituted the aforementioned three suits, in the first instance in the City Civil Court at

Secunderabad - being suit nos. 224/1997, 775/2009 and 776/2009. This aspect,

however, is refuted by the defendants/Chhabaria Group. They have set up a defence

that monies had been paid to an entity by name of Kumar Liquors & Beers Pvt. Ltd.

(hereinafter referred to as „KLBL‟). KLBL which was a „super distributor‟ in the

State of Maharashtra, was required to carry out sale, promotion and marketing activity

in consultation with BDA. For these purposes KLBL was paid a fee which had

various components. It is the say of the defendants/Chhabaria Group that a certain

amount of fee was unutilized and it was agreed that KLBL shall refund the unutilized

amounts to BDA and its assigns through the medium of Vinedale.

6. In sum and substance the defence of the defendants/Chhabaria Group, as

regards the allegation of siphoning of the amount, is that, these were really refund of

unutilized sale promotion funds received from KLBL. It is the submission of the

defendants/Chhabaria Group that the recovery suits by the plaintiff/ Aggarwal Group,

i.e., suit nos. 244/1997, 775/2009 & 776/2009 came to be filed only when a stand was

taken by them that if amounts had been siphoned from Vinedale why is that no action

had been instituted to recover the amount.

6.1 To be noted, it is not disputed by the plaintiff/Aggarwal Group that the three

recovery suits, in which recoveries of various amounts is sought, falls well short of the

amount alleged to have been siphoned, which is a sum of Rs 8.38 crores.

7. What is also not disputed is that after suit no. 1514/1994 was transferred from

Bombay High Court to this Court, in 1996 one of the three recovery suits, filed by the

plaintiff/Aggarwal Group, being suit no. 244/1997 was transferred by the Supreme

Court from Secunderabad to this court. Both parties have been unable to place before

me a copy of the order of the Supreme Court. However, counsels for both parties did

not dispute this aspect of the matter. It is also not disputed that, by an order dated

07.10.1996 passed in Transfer Petition No. 319/1996, suit no. 775/2009 (original suit

no. 376/1994) was transferred by the Supreme Court for trial by this court along with

suit no. 1514/1994. The prayer in the said transfer application being no. 319/1996 was

as follows:

"transfer O.S. No. 376 of 1994 pending in the court of III Additional Judge, City Civil Court, Secunderabad (Vinedale Distilleries Ltd vs M/s Sanman Distributors Pvt. Ltd.) to Delhi High Court for being heard and tried alongwith Suit No. 1514 of 1994 (Vinedale Distilleries Ltd & Ors.

Vs Satish Kumar Agarwal & Ors.) (Original Suit No. 307 of 1993 as filed in Bombay High Court); and....."

7.1 In respect of the prayer made the order passed by the Supreme Court dated

07.10.1996 was as follows:

"Heard counsel for the parties, transfer petition is ordered as prayed for."

7.2 Similarly the other suit, i.e., 776/2009 (Original suit no. 400/1994) was

transferred by the Supreme Court vide order dated 22.07.2008 passed in Transfer

Petition No. 221/2008. The prayer in the Transfer Petition and the operative part of

order dated 22.07.2008 read as follows:

Prayer in TP No. 221/2008:

"Transfer O.S. No. 400 of 1994 pending in the court of III Additional Judge, City Civil Court, Secunderabad (M/s Vinedale Distilleries Ltd. vs M/s Sanman Distributors Pvt. Ltd.) to Delhi High Court; and ..."

Operative part of order dated 22.07.2008:

"Since we have been informed by Mr E.C. Agarwala that OS No. 400/1994, which is being transferred, is at the stage of evidence, we would further request the Delhi High Court to take up the said suit from the said stage and dispose of the same expeditiously in terms of this order. Transfer petition is allowed. There will be no order as to cost."

8. Thereafter several orders have been passed by this Court in suit no. 775/2009

and 776/2009. The crucial order is order dated 01.05.2009. This order amongst others

was also passed in suit nos. 775/2009 and 776/2009. I will revert back to this order.

However, it is quite clear that on applications being: IA No. 7560/2009 in suit no.

775/2009 and IA No. 7583/2009 in suit no. 776/2009; two separate orders of even date

have been passed on 29.05.2009. Similarly, orders were also passed on 11.09.2009 in

suit no. 775/2009 and suit no. 776/2009. The order dated 11.09.2009, however, was a

common order.

9. In the background of the aforesaid facts and circumstances the learned counsel

for the defendants/Chhabaria Group, who have moved the captioned applications,

have submitted that in view of orders passed by the Supreme Court dated 07.10.1996

and 22.07.2008, the consolidation of suit nos. 775/2009 & 776/2009 is no longer in

issue. It is also submitted that if there was any doubt, it has been set at rest by this

court vide its common order dated 01.05.2009 passed in suit no. 775/2009 and

776/2009. Therefore, it is the defendants/Chhabaria Groups‟ submission that:

(i) their prayer for consolidated trials of suits No. 775/2009 & 776/2009 with suit

no. 1514/2009 is really a formal request.

(ii) if their submission with regard to the first aspect of the matter is accepted, i.e.,

that suit no. 775/2009 and 776/2009 stands consolidated with suit no. 1514/1994 then,

this Court is empowered to frame issues even at this stage if the necessary facts and

circumstances obtain.

(iii) in so far as the permission to file documents is concerned it is submitted that

permission has already been accorded by this court vide its order dated 01.05.2009.

By the said order four weeks time was granted to file additional documents in suit nos.

775/2009 & 776/2009 amongst others. It is submitted that a set of documents was

filed on 28.05.2009; since they were photocopies, and the originals had to be obtained,

an application was moved being IA No. 7560/2009 in suit no. 775/2009 for seeking

extension of time by a further five weeks w.e.f. 30.06.1999 (when the original four

weeks granted vide order dated 01.05.209 came to an end) for the purposes of filing of

originals of the documents was moved on 29.05.2009. An identical application being

IA No. 7583/2009 was filed in suit no. 776/2009 for securing leave to file originals of

the documents evidently filed on 28.05.2009. It is their contention that the

plaintiff/non-applicant cannot object to the filing of originals of those documents

whose photocopies was filed within the stipulated four weeks accorded by this Court

vide order dated 01.05.2009. It is further contended that the court had allowed filing

of additional documents; a request which was not opposed by the plaintiff/Aggarwal

Group, as is evident from the order dated 29.05.2009. To be noted this order was

passed in IA No. 7560/2009 in suit no. 775/2009.

(iv) As regards the additional issues, which the defendants/Chhabaria Group now

want the court to frame; it was stressed that they referred to material issues both of

fact and law, which require court‟s consideration. A list of the proposed issues

primarily dealing with the allegations of the amounts having been siphoned has been

placed before me, apart from three other issues with respect to non-joinder of

necessary parties, the issue with regard to the present suit as framed being liable to be

dismissed under the provisions of Order 2 Rule 2 of the CPC and lastly, limitation.

While three out of four proposed issues are common to both suit nos. 775/2009 &

776/2009, the proposed issue with respect to limitation is raised for consideration only

in suit no. 776/2009.

10. As against this, Mr Mata, learned senior counsel, on behalf of the plaintiff/

Aggarwal Group has submitted that there is no order consolidating suit no. 775/2009

and suit no. 776/2009. In order to buttress his submission he has placed reliance on

the order of the Supreme Court dated 22.07.2008. The learned senior counsel has laid

great stress on the observations of the Supreme Court that this Court should proceed

with suit no. 776/2009 from the stage of evidence at which it was placed at a point in

time when the transfer petition was moved before the Supreme Court, and proceed to

dispose of the suit accordingly. It is the learned senior counsel‟s contention that order

dated 01.05.2009 cannot improve the situation. The other submissions are premised

on acceptance of the first submission made by Mr Mata. It is submitted by Mr Mata

that if the suits cannot be consolidated then surely there is no case for casting

additional issues in suit nos. 775/2009 and 776/2009. It is the contention of the Mr

Mata that the nature of suit no. 1514/1994, which broadly deals with as to who is in

the control of Vinedale, is quite different from the nature of suit no. 775/2009 and

776/2009, which are the suits instituted to recover money siphoned from Vinedale; in

that sense, neither a consolidation is called for nor is there any commonality of issues.

10.1 It is, therefore, contended by Mr Mata that no permission whatsoever ought to

be granted to the defendants to file additional documents. Mr Mata, however, does not

object to filing of affidavits by way of evidence by the witnesses which the

defendants/Chhabaria Group wishes to produce in suit no. 775/2009 and 776/2009. It

is the contention of Mr Mata that a voluminous set of documents is purported to be

filed by the defendants/Chhabaria Group only to delay the trial in suit no. 1514/1994.

The learned counsel further contends that in suit no. 1514/1994, two witnesses have

already been examined, and what remains is the cross-examination of the third

witness, i.e., Mr Shyam Luthria (PW3). It is contended that if permission as sought

for by the defendants/Chhabaria Group is granted then it would not only set the clock

back but it would also give an unfair advantage to the defendants/Chhabaria Group as

the plaintiff/Aggarwal Groups have already cross-examined two witnesses which

includes Mr Jain (PW2), who purportedly was maintaining the records of Sanman,

which is one of the four investment companies which controls Vinedale.

REASONS

11. I have heard the learned counsel for the parties. It is quite clear that the dispute

between the two groups, i.e., the plaintiff/Aggarwal Group and the defendants/

Chhabaria Group pertains to control of Vinedale. The defendants/Chhabaria Group

have taken a stand that they came to control Vinedale as the shares in the four

investment companies were transferred in favour of Samnan for a valuable

consideration. In these circumstances, the defendants/Chhabaria Group has sought to

place on record before court from time to time documents to show that not only did

they pay the requisite consideration to the plaintiff/Aggarwal Group for acquisition of

the shares in the four investment companies which control Vinedale, but also

documents to show that on account of the transfer of the controlling shareholding of

Vinedale in favour of Sanman, they came to possess the records of both Vinedale and

Sanman which includes books of accounts, minutes book of Board of Directors,

Register of Members, shareholders and also records pertaining to various assets.

11.1 As against this, the plaintiff/Aggarwal Group in the three recovery suits, i.e.,

suit nos. 244/1997, 775/2009 and 776/2009 have set up a case that no consideration

flowed from Sanman to the plaintiff/Aggarwal Group for acquisition of the said

shares. It is the stand of the plaintiff/Aggarwal Group that the purported financial

transactions, reflected in the book of accounts of the concerned parties, are in

substance refund of money which Shaw Wallace had siphoned from Vinedale.

11.2 In my view, the stand taken by both groups, i.e., defendants/Chhabaria Group

and the plaintiff/Aggarwal Group are inextricably linked. It is perhaps in that context

that in 1996 one of the three recovery suits filed by the plaintiff/Aggarwal Group, i.e.,

suit no. 244/1997, was consolidated with suit no. 1514/1994. As I have indicated

above, this position is not disputed. In this context, it would perhaps also be relevant

to note that by an order dated 07.10.1996, passed in transfer petition no. 319/1996, the

Supreme Court had allowed a prayer made by the defendants/Chhabaria Group that

suit no. 775/2009 (originally suit no. 376/1994) be heard and tried with suit no.

1514/1994. The prayer and order dated 07.10.1996 have already been extracted by me

hereinabove. Therefore, as regards the consolidation of suit no. 775/2009, I have no

doubt. In so far as suit no. 776/2009 is concerned, the transfer petition bearing no.

221/2008 was allowed by the Supreme Court vide its order dated 22.07.2008.

However, it is sought to be contended by the plaintiff/Aggarwal Group that the said

order of the Supreme Court dated 22.07.2008 did not consolidate the suit no.

776/2009. I have already extracted the relevant portion of the order hereinabove. Mr

Mata has, as observed above, laid stress on the fact that since at that point in time

when the order was passed by the Supreme Court in the transfer petition, the suit was

at the stage of evidence, the Supreme Court only directed that the said suit no.

776/2009 be transferred to this court and it be taken up for disposal from the said

stage, i.e., from the stage of evidence at which it was at that particular point in time. I

would have no hesitation in agreeing with the submission made by Mr Mata but for

the fact that on 01.05.2009 both suits being suit nos. 775/2009 & 776/2009 amongst

others came up before this court. A bare reading of the order dated 01.05.2009 clearly

shows that the understanding of both the counsel for the plaintiff/Aggarwal Group and

the defendants/Chhabaria Group was that the said suits had to be consolidated, except

that to achieve the said purpose certain pre-requisites had to be complied with namely,

completion of pleadings, filing of additional documents and perhaps framing of

additional issues. It is contended by Mr Mata that the direction with regard to the

aforesaid aspects related to suits other than suit nos. 775/2009 and 776/2009. I may

have agreed with him, but for the fact that, pursuant to the order dated 01.05.2009

additional documents were filed by the defendants/Chhabaria Group on 28.05.2009 in

accordance with the directions issued by this court on 01.05.2009 within the time

frame of four weeks accorded to the defendants/Chhabaria Group - the

plaintiff/Aggarwal Group has neither challenged the order dated 01.05.2009 nor

sought a clarification of the said order. As a matter of fact on 29.05.2009 when

applications (being IA No. 7560/2009 and IA No. 7583/2009) were filed by the

defendants/Chhabaria Group seeking extension of time for being granted permission

to file originals of the documents which had been filed evidently on 28.05.2009,

strangely, in the application for extension of time (being IA No. 7560/2009 filed in

suit no. 775/2009), no objection was taken by the plaintiff/ Aggarwal Group. As a

matter of fact the counsel for the plaintiff/ Aggarwal Group submitted that he had no

objection to the application was being allowed. The objection was, however, taken in

IA No. 7583/2009 filed in suit no. 776/2009 which was filed by the

defendants/Chhabaria Group for the same purpose, i.e., taking extension of time for

filing originals, on the ground that suit no. 776/2009 had not been consolidated.

Reference obviously was to the order of the Supreme Court dated 22.07.2008. It was

also contended that by an order dated 01.05.2009 suit no. 776/2009 had been

erroneously clubbed (reference once again obviously was to suit no. 1514/2009) and

hence, defendants/Chhabaria Group could not be allowed to file further documents in

suit no. 776/2009. The learned Judge, while passing the order dated 29.05.2009 in the

said IA No. 7583/2009, specifically overruled both objections of the

plaintiff/Aggarwal Groups. The court was also of the view that the court is not

powerless in permitting filing of documents even after the trial has begun, if the

circumstances so permit. The court went on to say that even though the application

did not disclose the documents that the defendants/Chhabaria Group wanting to file,

the same may be filed subject to the objection of the plaintiff/ Aggarwal Group to any

particular document. The matter was posted for consideration of objections on

11.09.2009.

11.3 The order dated 29.05.2009 has also not been challenged by the plaintiff/

Aggaral Group. As a matter of fact on 11.09.2009 they raised an identical objection

and sought leave to file an affidavit raising objections in respect of the additional

documents filed in suit no. 776/2009.

11.4 In these circumstances, I am of the view that in so far as the first issue is

concerned as to whether the suit no. 776/2009 and 775/2009 should be consolidated

and tried with suit nos. 1514/1994 and 244/1997 there cannot be any debate at this

juncture as submissions to the contrary have been rejected by the predecessor Judge. I

may also refer to an order dated 27.08.2008 which this court passed in respect of suit

no. 1514/1994 and suit no. 244/1997 amongst others. There is a clear mention that

suits have to be consolidated and tried. Suit No. 244/1997 is also a recovery suit filed

by plaintiff/Aggarwal Group - on a parity of reasoning, I am of the view that suit no.

775/2009 and suit no. 776/2009 should also be consolidated. In any event, even

otherwise I am of the opinion that once one of the recovery suits, i.e., suit no.

244/1997 has been consolidated with suit no. 1514/1994, then I see no reason as to

why suit no. 775/2009 and suit no. 776/2009 cannot be tried with them. In so far as

suit no. 775/2009 is concerned the Supreme Court‟s order dated 07.10.1996 is quite

clear on the issue. As regards the suit no. 776/2009 is concerned it appears that the

plaintiff/Aggarwal Group having suffered the order dated 01.05.2009 and thereafter

the order dated 29.05.2009, there is no scope for arguing to the contrary at this

stage. This would in my view, be also in the interest of the warring groups and

shall enable this court to adhere to the direction of the Supreme Court to conduct the

trial expeditiously.

12. As to whether additional issues should be framed, I am of the view that no

prejudice would be caused to the plaintiff/Aggarwal Groups if the following issues are

framed in suit no. 775/2009 and suit no. 776/2009. The issues not only relate to

material aspect of fact and law but also bring to fore the controversy between the

parties.

Suit No. 775/2009

(i) Whether Shaw Wallace & Co. have siphoned Rs 10 lacs out of Rs 8,38,12,337/- from the plaintiff to the sister concerns of Shaw Wallace &Co. namely M/s Cruickshank & Co. Ltd., M/s Sanman Distributors Pvt. Ltd., M/s Tracstar Investments Pvt. Ltd., BDA Brewery & Distilleries Ltd., M/s Budgam Finance & Investments, M/s Adnan Investment Consultants & M/s International Tyres Ltd? OPP

(ii) Whether the suit as framed is liable to be dismissed for non-joinder of necessary parties? OPD

(iii)Whether the suit as framed is liable to be dismissed under Order 2 Rule 2 CPC? OPP Suit no. 776/2009:

(i) Whether Shaw Wallace & Co. have siphoned Rs 80 lacs out of Rs 8,38,12,337/- from the plaintiff to the sister concerns of Shaw Wallace &Co. namely M/s Cruickshank & Co. Ltd., M/s Sanman Distributors Pvt. Ltd., M/s Tracstar Investments Pvt. Ltd., BDA Brewery & Distilleries Ltd., M/s Budgam Finance & Investments, M/s Adnan Investment Consultants & M/s International Tyres Ltd? OPP

(ii) Whether the suit is barred by limitation? OPD

(iii)Whether the suit as framed is liable to be dismissed for non-joinder of necessary parties? OPD

(iv) Whether the suit as framed is liable to be dismissed under Order 2 Rule 2 CPC? OPP 12.1 It may be noted that the learned counsel for the plaintiff/Aggarwal Group did

not have any objection to the aforesaid issues being framed. I must, however, state

that Mr Sibal, who appears for the defendants/Chhabaria Group, in addition, wanted

the following issues to be framed in suit no. 775/2009 and 776/2009:

Suit No. 775/2009

(i) Whether the payment of Rs 10,00,000/- by cheque no. 442419 dated 25.10.1991 stands accounted for and adjusted in suit Special Suit No. 375 of 1995 in the Court of Civil Judge (Sr. Division) at Aurangabad between KLBL and BDA decided by judgment and decree dated 11.10.1999 which is binding upon the plaintiff? OPD

Suit No. 776/2009

ii) Whether the payment of Rs 80,14,577.58/- by cheque no. 442409 dated 15.11.1991 stands accounted for and adjusted in suit Special Suit No. 375 of 1995 in the Court of Civil Judge (Sr. Division) at Aurangabad between KLBL and BDA decided by judgment and decree dated 11.10.1999 which is binding upon the plaintiff? OPD

13. I am of the view that no formal issue is required to be framed in respect of

proceedings initiated by BDA to recover certain outstanding amounts from KLBL.

The fact that in those proceedings BDA has obtained a judgment and decree, is not in

issue between the parties in the present proceedings. The judgment and decree is

perhaps only an evidence to establish its case in the captioned suits. Therefore, the

prayer of the defendants/Chhabaria Group to that extent is rejected.

14. That brings me to the issue as regards permission to file additional documents.

Upon a reading of the order dated 01.05.2009 it is quite clear that

defendants/Chhabaria Group was permitted to file original documents in both suit nos.

775/2009 and 776/2009 within a period of four weeks. Mr Sibbal, learned counsel for

the defendants/Chhabaria Group has said that within the time allotted, i.e., four weeks,

photocopies of the said documents were filed by them. Since the originals had to be

placed on record, two applications being IA Nos. 7560/2009 and 7583/2009 were filed

in suit no. 775/2009 and 776/2009 respectively. It is crucial to extract prayer in the

two applications which are identical:

"In view of the aforesaid facts and circumstances, it is, therefore, most respectfully prayed that this Hon'ble Court may be pleased to modify the order dated 01.05.2009 by granting extension of time for filing original documents by another five weeks w.e.f. 30th of June, 2009 when the original four weeks granted vide order dated 01.05.2009 comes to an end: and pass any such other order/orders as this Hon'ble Court may deem just and proper under the facts and circumstances of the case to do complete justice."

14.1 A reading of the prayer would show that modification of the order dated

01.05.2009 was sought only to the extent that the defendants/Chhabaria Group be

granted an extension of a period of five weeks for filing of original documents. There

was no prayer for filing of additional documents. Therefore, the subsequent orders

dated 29.05.2009 have to be construed in the light of the prayer made in the IA No.

7560/2009 and 7583/2009. Having done so, I am of the opinion that the

defendants/Chhabaria Group cannot, at this stage, file any other document which was

not filed within the time allotted by order dated 01.05.2009. In consonance with the

orders dated 01.05.2009 and two orders of even date 29.05.2009 the

defendants/Chhabaria Group can place on record originals of the documents which

they claim had been filed on 28.05.2009.

15. Mr Mata, learned senior counsel had also made a submission that permitting

defendants/Chhabaria Group the luxury of relying upon documents filed, pursuant to

the order dated 01.05.2009, would compromise their defence in suit no. 1514/1994. In

this regard, he had argued, as indicated above, that two witnesses have already been

examined and, therefore, the defendants/Chhabaria Group would attempt to strengthen

their case by placing reliance on these documents. In my view, this was not an

objection which was taken by the learned counsel for the plaintiff/Aggarwal Group at

the time when order dated 01.05.2009 was passed. In any event, admittedly PW3 has

not yet been cross-examined and, therefore, to shut out a party from placing any

evidence on record would not serve the interest of justice. It is really for the

defendants/ Chhabaria Group to figure out how they are going to prove the additional

documents filed on 28.05.2009 - they cannot be permitted to set the clock back. The

exercise of filing documents cannot continue interminably.

16. The prayer of the defendants/Chhabaria Group with regard to filing of affidavit

of evidence, was not objected to by Mr Mata, as in suit no. 775/2006 and 776/2009 the

defendants/Chhabaria Group have not yet filed affidavit of evidence of its witnesses.

Accordingly, as prayed for, defendants/Chhabaria Group shall be at liberty to file

affidavits by way of evidence of their witnesses in suit no. 775/2009 and 776/2009.

They shall do so within the time frame that may be set by the commissioner.

17. At one point in time submissions were made with regard to relevance of

documents which were being filed. I have refrained from commenting on the

relevance of documents filed, as this is an aspect which can be appreciated by

commissioner at the time when evidence is recorded. Both parties shall, I am sure, at

the relevant time place their point of view before the commissioner.

CONCLUSION

18. In view of the reasons given above the prayers in IA No. 15247/2009 in

CS(OS) 775/2009 and IA No. 15229/2009 in CS(OS) 776/2009 with regard to fresh/

additional issues being framed is partially allowed. The additional issues, which are

cast, are set out in paragraph 12 hereinabove.

19. The second prayer that the defendants/Chhabaria Group be permitted to file by

way of additional affidavits in terms of order dated 27.08.2008 is rejected. In the said

order there is no direction permitting the parties to file additional affidavits. The

defendants/ Chhabaria Group cannot be permitted at this point in time to lead

additional evidence.

20. In IA No. 15249/2009 in CS(OS) 775/2009 & IA No. 15231/2009 in CS(OS)

776/2009, the first prayer of consolidation of CS(OS) 775/2009 and CS(OS) 776/2009

is allowed. Defendants/Chhabaria Group is permitted to file the evidence by way of

affidavits in CS(OS) Nos. 775/2009 & 776/2009, since there is no dispute with respect

to the fact that this exercise has not been undertaken by the defendants/ Chhabaria

Group in the said suits.

21. As regards permission to file additional documents, I have already made it

clear that the defendants/Chhabaria Group shall confine themselves to the documents

filed on 28.05.2009 and their respective originals.

22. With the aforesaid directions the captioned applications are disposed of.

DECEMBER 07, 2009                                           RAJIV SHAKDHER, J
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