M/S Chakradar Auto Udyog (P) Ltd. & ... vs Engineering Export Promotion ...
2010 Latest Caselaw 5796 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                     CS(OS) NO.760/2008

                                           Date of Decision : 21.12.2010

M/s Chakradar Auto Udyog (P) Ltd. & Anr.    ......Plaintiffs
                        Through: Mr.R.S.Parmar         proxy
                                   counsel.

                                     Versus

Engineering Export Promotion Council     ...... Defendant
                        Through: Mr.Amit         Chaddha,
                                  Sr.Advocate         with
                                  Mr.Sandeep   Mahapatra,
                                  Advocate.

CORAM :
HON'BLE MR. JUSTICE V.K. SHALI

1.     Whether Reporters of local papers may be
       allowed to see the judgment?                           YES
2.     To be referred to the Reporter or not ?                NO
3.     Whether the judgment should be reported
       in the Digest ?                                        NO

V.K. SHALI, J.

IA No. 5046/2008

1. This order shall dispose of IA bearing no. 5046/2008 filed by

the plaintiff under Section 14 of the Limitation Act, 1963 read

with section 151 CPC for exclusion of time from 25.08.2003

to 27.02.2007 being reckoned towards the total period of

limitation for filing the suit for recovery.

2. Briefly stated the facts of the case are that this is a suit for

recovery of Rs.23,30,994/- along with the interest @ 10 % per

annum from 05.10.1994 till the date of refund i.e.

26.10.2001. In the application under Section 14 of the

Limitation Act the total amount shown is Rs.58,09,488/-. It

is alleged in the plaint that the plaintiff no. 2 who is the

Director of the plaintiff no. 1 company was exporting auto

parts to foreign country under the Import Export Policy of the

Government of India in the year 1983. There was a scheme

known as International Price Reimbursement Scheme under

which the exporters were entitled to certain benefits by way of

reimbursement for having exported the auto parts. It is

alleged that the plaintiffs had earned and were paid an

amount of Rs.1,05,47,320/- under the said scheme for the

calendar year 1990-92. On 19.08.1994 a case bearing no.

RC 3(S)/94/CBI/SB was registered against the plaintiff no. 2

under Section 420/468/471 read with Section 120 B IPC for

having drawn a benefit of Rs.23,30,994/- to which allegedly

he was not entitled. The plaintiff no. 2 was arrested. He was

granted bail on the condition that he shall repay that alleged

wrongful benefit of Rs.23,30,994/- having been drawn by him

to the complainant. The plaintiff deposited a sum of

Rs.23,30,994/- by way of installments, and accordingly, the

plaintiff was released on regular bail on 12.10.1994. The

plaintiff no. 2 underwent the trial and was acquitted on

22.06.2001. The CBI preferred an appeal against the

judgment of acquittal dated 22.06.2001 which was also

dismissed, and therefore, it is alleged that the judgment of

acquittal dated 22.06.2001 attained finality.

3. The plaintiff no. 2 filed an application for the refund of the

amount of Rs.23,30,994/- which was disposed of on

13.08.2001 by the learned Magistrate, directing the CBI to

refund the aforesaid amount. It is observed that so far as the

question of payment of interest on the said amount is

concerned, the plaintiff no. 2 shall be at liberty to file a civil

suit or take such other appropriate remedy as may be

available. It is alleged that despite this order the amount

was not refunded to him and he filed second application for

the refund of the said amount. This was disposed of on

27.08.2001 by the Trial Court. Still the amount was not

refunded to the plaintiff no. 2, as a consequence of which he

was constrained to file a Civil Crl. (Main) 369/2001 in High

Court which was allowed vide order dated 16.10.2001 with

the direction to the CBI to refund that amount within two

weeks. The cheque of Rs.23,30,994/- is stated to have been

received by the plaintiff on 29.10.2001. Since the plaintiff

had a grievance that he ought to have been given interest on

the aforesaid amount, he gave a notice dated 07.03.2003, and

thereafter, filed a writ on 25.08.2003. On 26.08.2003, the

High Court issued a notice on the said writ petition limiting it

to the question of maintainability. After the pleadings were

completed, the writ petition was withdrawn by the plaintiff

no. 2 on 27.02.2007 with liberty to take such recourse as

may be available to him in law. Accordingly, the writ petition

was dismissed. It is after the dismissal of the writ petition

that the plaintiffs have chosen to file the present suit for

recovery of the aforesaid amount as interest calculated @ 10%

from 1994 till 29.10.2001 when the amount was refunded to

him along with the pendente lite and future interest. Along

with the suit an application under Section 14 of the

Limitation Act has been filed for excluding the period spent by

the plaintiff from 25.08.2003 to 27.02.2007 from being taken

into consideration from the total period of three years for

filing the suit for recovery.

4. The application has been opposed by the defendant on the

ground that the aforesaid period cannot be excluded under

Section 14 of the Limitation Act because the ingredients of

Section 14 are not satisfied as the plaintiff was not pursuing

his remedy bonafide. It is contended that the plaintiff was

specifically directed by the learned Magistrate vide order

dated 13.08.2001 that the plaintiff may file a civil suit or may

take such other remedy as may be permissible in law for the

interest yet the plaintiff no. 2 chose to file a writ petition

which clearly shows lack of bonafide on his part. It is also

stated that even if the period of 25.08.2003 to 27.02.2007 is

excluded still the suit of the plaintiff is hopelessly barred by

time.

5. I have heard the learned counsel for the parties. The learned

counsel for the plaintiff has placed reliance on the following

judgments in order to claim the benefit under Section 14 of

the Limitation Act. State of West Bengal Vs. Satyanarayan

Rice Mill AIR 1985 CAL 391, Rameshwar Lal Vs. Municipal

Council, Tonk & Ors. (1996) 6 SCC 100, Union of India Vs.

West Coast Paper Mills Ltd. & Ors. AIR 2004 SC 3079,

Consolidated Engg. Enterprises Vs. Principal Secy.

Irrigation Deptt. & Ors. Civil Appeal No. 2461/2008 @ SLP

(C) No. 10311/2005 and Shakti Tubes Ltd. Vs. State of

Bihar & Ors. (2009) 1 SCC 786.

6. The law regarding Section 14 of the Limitation Act has been

subject matter of interpretation by the Apex Court in number

of cases and the plaintiff no. 2 himself has cited

Consolidated Engg. Enterprises (Supra) wherein it has

been laid down in para 12 as under:

" Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said Section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service:

(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party;

(2) The prior proceeding had been prosecuted with due diligence and in good faith;

(3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature;

(4) The earlier proceeding and the latter proceeding must relate to the same matter in issue and;

(5) Both the proceedings are in a court.

The policy of the Section is to afford protection to a litigant against the bar of limitation when he institutes a proceeding which by reason of some technical defect cannot be decided on merits and is dismissed. While considering the provisions of Section 14 of the Limitation Act, proper approach will have to be adopted and the provisions will have to be interpreted so as to advance the cause of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of limitation in cases of mistaken remedy or selection of a wrong forum. On reading Section 14 of the Act it becomes clear that the legislature has enacted the said section to exempt a certain period covered by a bona fide litigious activity. Upon the words used in the section, it is not possible to sustain the interpretation that the principle underlying the said section, namely, that the bar of limitation should not affect a person honestly doing his best to get his case tried on merits but failing because the court is unable to give him such a trial, would not be applicable to an application filed under Section 34 of the Act of 1996. The principle is clearly applicable not only to a case in which a litigant brings his application in the court, that is, a court having no jurisdiction to entertain it but also where he brings the suit or the application in the wrong court in consequence of bona fide mistake or law or defect of procedure. Having regard to the intention of the legislature this Court is of the firm opinion that the equity underlying Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy, in a wrong court, should be excluded."

7. There is no dispute about the proposition which has been laid

down by the Supreme Court in the judgment relied upon by

the plaintiff but the question which arises for consideration is

whether the time which is spent by the plaintiff in the instant

case before a writ court, can be excluded from the total period

of three years within which the suit for recovery has to be

filed. For this purpose, the plaintiff no. 2 has to show to the

Court that the writ petition was being prosecuted by him with

due diligence and in good faith. The writ petition filed by the

plaintiff in the instant case was for recovery of interest, will be

treated as a civil proceeding in terms of the judgment of

Satyanarayan Rice Mill (supra) relied upon by the plaintiff.

8. An act is to be done in good faith, if it is done with due care

and attention as is enunciated in Section 2(h) of the

Limitation Act. The question which arises for consideration

is whether the plaintiff had filed the writ petition with due

care and attention and prosecuted the same with due

diligence. The answer to this query, in my opinion in the light

of averments and the orders which were passed by the Trial

Court as well as in the Writ Court, is in negative. The

plaintiff was not prosecuting his remedy with due diligence

and also not in good faith. The plaintiff is in a way indulging

in forum shopping. It is in this context that the order dated

13.08.2001 passed by the Magistrate on the application of the

plaintiff no. 2 for refund of the amount deposited by him

becomes important. The plaintiff of his own saying had filed

an application for the refund of the amount of Rs.23,30,994/-

along with the interest and the learned Magistrate vide order

dated 13.08.2001 directed the refund of the amount and

observed that so far as the interest is concerned, he ought to

file a "Civil Suit" or such other proceedings as may be

permissible in law, therefore, there was absolutely no reason

for the plaintiff no. 2 to have filed a writ petition when there

was a specific observation that the plaintiff can file a civil

suit.

9. If the submission of the plaintiff is accepted that he was well

within his right to file the writ petition in terms of the

judgment of Satyanarayan Rice Mill's case (supra) also as the

writ petition has been held to be a civil proceeding, then he

ought to have permitted the writ Court to decide the matter.

10. It may be pertinent here to mention that the plaintiff himself

has annexed a copy of the order dated 31.01.2007 passed in

the writ court wherein it has been noted by the learned Judge

that the counsel for the respondent no. 1/Engineering Export

Promotion Council, had observed that the question of grant of

interest does not arise to the petitioner no. 2 as they

themselves had not earned any interest on the amount

deposited by the plaintiff no. 2 as a condition for grant of his

bail. It was further stated by the learned counsel for the said

respondent that the amount was kept as a security by them

and that too in a current account which did not earn any

interest. After this stand having come on record in the writ

petition by way of a counter affidavit, the plaintiff no.2 on

19.02.2007 chose to withdraw the writ petition with liberty to

take such recourse as may be permissible in law. It may be

stated that the Court was not suffering from any defect of

jurisdiction to give the relief to the plaintiff no. 2 but the

plaintiff no. 2 knew fully well that after the counter affidavit

having come on record the Court would have in all probability

dismissed his writ petition, and therefore, the best course for

him was to withdraw the writ petition with liberty to take

such appropriate measure as may be permissible in law and

try his luck in a civil suit. This is the reason why the Court

has observed that the plaintiff was doing forum shopping and

was not either prosecuting his remedy with due diligence and

there was a complete lack of good faith on his part, and

therefore, he is not entitled to the benefit of Section 14 of the

Limitation Act for exclusion of the time from 25.08.2003 to

27.02.2007 as is claimed by him. Nothing prevented the

plaintiff in permitting the Court to decide the question of

grant of money which was withdrawn.

11. Even if for the sake of arguments, the plaintiff is given the

benefit of this exclusion even then the suit of the plaintiff is

barred by limitation. This is on account of the following

reasons. The cause of action clause as averred by the

plaintiff read as under:-

"The plaintiffs state that cause of action for filing the present suit accrued in favour of the plaintiffs and against the defendant firstly in 1983 when the plaintiff no. 1 was registered with the defendant as a merchant exporter under the import and export policy of the Government of India. The cause of action again accrued between 1986 to 1996 when during the relevant period the plaintiff no. 1 was entitled to the benefits/incentives for export of automobile parts as a merchant under the IPRS. It

again accrued during the calendar years 1990- 1992 when the plaintiff no. 1 had made exports and in fact the plaintiff no. 1 was paid a sum of Rs.1,05,47,320/- as benefit under IPRS. The cause of action also accrued on 19.08.1994 when the CBI arrested among other people the plaintiff no. 2 and filed a false case bearing R.C.3(S)/94-

CBI/SEB, New Delhi. It again accrued on 22.08.1994 when Shri V. K. Jain, the learned M.M. as a condition of bail required certain amounts to be deposited with the defendant. It again accrued on 22.08.1994, 25.08.1994 and 05.10.1994 when the plaintiff deposited various sums as required as a condition of bail. It also accrued on 22.6.2001 when Sh.J.P.Narain, M.M. Karkardooma, Delhi acquitted the plaintiff no.2. it also accrued on 30.8.2001 when the Trial Court by its order directed the defendant to return a sum of `23,30,994/- to the plaintiff no.2 as regards interest it was noted that the plaintiff no.2 was at liberty to file Civil Sit or opt for any other remedy. It thereafter accrued on 27.8.2001 when the Trial Court disposed of the two applications filed by the plaintiff no.2 and the defendant. It again accrued on 16.10.2001 when this Hon'ble Court in Criminal Misc.(Main) No.369/2001 directed the defendant to refund the amount due to the plaintiff no.1. It is further accrued on 29.10.2001 when the principal sum of `23,30,994/- was paid by the defendant no.1 to the plaintiff no.2. It again accrued on 7.3.2003 when the plaintiff no.2 served a lega notice claiming the amounts as per the present suit. It again arose in August 2003 when the plaintiffs filed Civil Writ Petition No.5251/2003 before this Hon'ble Court. It lastly accrued on 27.2.2007 when the plaintiffs withdrew the aforementioned writ petition with liberty to take such recourse as may be available to him under the law. The cause of action is subsisting and no part of the claim is barred by the law of limitation."

12. The plaintiff in this aforesaid para says that the cause of

action accrued to the plaintiff to file the suit for recovery on

19.08.1994 when the CBI arrested him. If that be so, the

period of limitation would start on 20.08.1994 and come to

an end on 19.08.1997 because once the period of limitation

starts Section 9 comes into picture, the same has to run

continuously unless and until some period has to be excluded

under various statutory provisions like Section 12 or 14 of the

Limitation Act or any other provision of the Act. But on

19.08.1994 when he was arrested by the CBI the cause of

action certainly cannot be said to be accrued to the plaintiff

because at the time of his arrest he had not deposited the

amount of Rs.23,30,994/- as a condition of bail which was

much later. The plaintiff no. 2 was acquitted on 22.06.2001

by Sh. J. P. Narian, the learned Metropolitan Magistrate,

Karkardooma Courts, Delhi. Once the plaintiff no.2 is

acquitted on 22.06.2001 the cause of action accrues to him

on 23.06.2001 and even if the exclusion of time spent from

25.08.2003 to 27.02.2007 is taken into consideration, still

the present suit having been filed on 04.04.2008 is beyond

the period of three years within which the suit ought to have

been filed.

13. This is on account of the following time period which may be

calculated for the purpose of limitation:-

Suit barred by limitation

22.06.2001 Date of acquittal 23.06.2001 to 1 year 22.06.2002 23.06.2002 to 1 year 22.06.2003

23.06.2003 to 2 months 2 days (63 days) 24.08.2003

28.02.2007 to 1 year 27.02.2008

11.04.2008 Date of filing of suit

28.02.2008 to 1 month 5 days (36 days) 04.04.2008

Total 3 years 3 months and 7 days

14. So far as the other judgments which have been relied upon by

the plaintiff are concerned, although there is no doubt about

the proposition laid down in the said judgments which have

been broadly enunciated therein but the facts of the present

case in the light of the reasons mentioned above do not

persuade the Court to apply the said judgments to the facts of

the present case.

15. For the reasons mentioned above, I am of the considered

opinion that the plaintiff is not entitled to the benefit of

exclusion of period of limitation under Section 14 of the

Limitation Act as prayed for, and accordingly, the application

is dismissed and even if a liberal interpretation is taken to

give the benefit to the plaintiff even then the suit of the

plaintiff is hopelessly barred by time, accordingly, the

application is dismissed and the suit of the plaintiff is held

barred by time.

V.K. SHALI, J.

December 21, 2010 KP