Delhi High Court
Shri Vinay Kumar & Anr. vs B.K. Jewellery House Marketing ... on 21 November, 2012
Author: Hima Kohli
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 21st November, 2012
+ O.A. No.23/2012 in C.S.(OS) 466/2009
SHRI VINAY KUMAR & ANR. ..... Plaintiffs
Through Mr. Gurinder Pal Singh and Mr.
Mahendra Pratap, Advocates
versus
B.K. JEWELLERY HOUSE MARKETING LTD.
& ORS. ..... Defendants
Through Mr. Gaurav Mitra and Mr. Pratik
Malik, Advocates
+ O.A. No.24/2012 in C.S.(OS) No.467/2009
SHRI SAJID JABBAR ..... Plaintiff
Through Mr. B.K. Jha, Advocate
versus
B.K . JEWELLERY HOUSE MARKETING LTD.
& ORS. ..... Defendants
Through Mr. Gaurav Mitra and Mr. Pratik
Malik, Advocates
+ O.A. No.25/2012 in C.S.(OS) No.468/2009
SHRI ANAND SHANKER ..... Plaintiff
Through Mr. B.K. Jha, Advocate
versus
B.K. JEWELLERY HOUSE MARKETING LTD.
& ORS. ..... Defendants
Through Mr. Gaurav Mitra and Mr. Pratik
Malik, Advocates
CS(OS) Nos.466, 467 & 468 & 2009 Page 1 of 12
CORAM
HON'BLE MS.JUSTICE HIMA KOHLI
HIMA KOHLI, J. (Oral)
1. The present Chamber Appeals have been filed by the
defendants No. 1 to 3 praying, inter alia, for setting aside the order
dated 30th January, 2012 passed by the learned Joint Registrar
rejecting their applications under Order VIII Rule 1 CPC wherein
condonation of delay of 254 days was sought in filing the written
statement.
2. The facts that are relevant to adjudicate upon the present
Chamber Appeals in all the three cases are identical. While the
plaintiffs in the three cases are different, the defendants are common.
The stand of the defendants No. 1 to 3 as taken in their applications
for condonation of delay in filing the written statements was that
defendants No. 2 & 3, Directors of the defendant No. 1 company,
were arrested in a criminal case and sent to judicial custody in July,
2009. Defendants No. 2&3 continued to remain in judicial custody till
26th September, 2011. The present suits were instituted by the
plaintiffs sometime in March, 2009 and the reliefs sought therein are
identical, namely, for directions to the defendants to deposit the
amount of tax deducted at source with the Income Tax Authority or in
the alternative, to direct recovery of the said amount from the
defendants.
3. A perusal of the order sheets reveals that summons were issued
in the present suit on 13th March, 2009 and appearance was entered
on behalf of defendants No. 2 & 3 on 22nd October, 2009. On 10th
February, 2010, counsel for the defendants No.1 to 3 had submitted
that the plaintiffs had not supplied him with a copy of the plaint
despite directions to the said effect issued on an earlier date. As none
had appeared on behalf of the plaintiffs on the said date, further
opportunity was granted to the plaintiffs to furnish a copy of the
paper book to the defendants and the defendants were given four
weeks' time thereafter to file their written statements. It was also
observed that the plaintiffs had not filed the process fee and were not
taking the court proceedings seriously and as a result, they were
burdened with costs and the matter was adjourned to 30th July, 2010
for completion of pleadings.
4. On 30th July, 2010, none had appeared on behalf of the
plaintiffs, nor were the defendants 4 & 5 served. Even the costs that
were imposed upon the plaintiffs on 10.2.2010, were not deposited.
On the said date, counsel for the defendants No. 1 to 3 had submitted
that the plaintiffs had not furnished a copy of the paper book to him
and as a result, the written statements could not be filed. In view of
the non-appearance of the plaintiffs, the Joint Registrar had
proceeded to place the matter before the Court on 19th November,
2010.
5. It is an admitted position that a copy of the plaint was finally
furnished by the counsel for the plaintiffs to the counsel for
defendants No. 1 to 3 on 19th November, 2010. The period of 30
days prescribed in the CPC for filing the written statement, if reckoned
from the aforesaid date, would have expired on 19th December, 2010.
The extended period of 90 days if reckoned from 19th November,
2010, would have expired on 17th February, 2011. However,
defendants No. 1 to 3 filed the written statement through a newly
engaged counsel only on 30th August, 2011.
6. Accompanying the written statements of the defendants No.1 &
3, were three separate applications filed under Order VIII R. 1 CPC,
seeking condonation of delay of 254 days. The main ground taken by
the defendants No. 1 to 3 for seeking condonation of delay was that
the defendants No. 2 & 3, who were the directors of the defendant
No.1 company were in judicial custody during the relevant period and
though they had engaged a counsel to represent them in the present
proceedings, the said counsel had misrepresented the correct facts to
them.
7. The aforesaid applications were opposed by the plaintiffs on the
ground that even if the defendants No. 2 & 3 were in judicial custody,
their fathers, i.e., defendants No. 4 & 5 herein were well aware of the
present proceedings and they were duly represented through a
counsel and could have taken necessary steps to protect the interests
of all the defendants, more so, when they are the founders of the
defendant No. 1 company and were aware of its day to day affairs.
Another ground taken on behalf of the plaintiffs to oppose the
applications was that the contention of defendants No. 1 to 3 that in
the month of July, 2011 they had deputed one Sh. Arvind Kumar, an
employee of defendant No. 1, to enquire about the status of the suit
and he had informed them that the written statements had not been
filed within the prescribed period and that thereafter they had sought
a legal opinion from another counsel and then filed the written
statements, could not be accepted as the defendants No.1 to 3 had
failed to annexe the affidavit of the said gentleman to this effect with
the applications for condonation of delay.
8. After examining the stands of the respective parties and
considering the relevant case law, the learned Joint Registrar arrived
at the conclusion that the defendants No. 1 to 3 had failed to furnish
sufficient cause for seeking condonation of delay of 254 days in filing
the written statements. As a result, their applications for condonation
of delay were rejected. Aggrieved by the aforesaid rejection order,
the present Chamber Appeals have been filed by the defendants No.1
to 3.
9. The main plank of the arguments urged by the learned counsel
for the defendants is that the Joint Registrar had erred in accepting
the submissions made on behalf of the plaintiffs that the defendants
No.4 & 5 were the founders of the defendant No.1 company and they
were involved in the day-to-day affairs of the said company. He
submits that the defendants No.4 & 5 are not connected with the
defendant No.1 company at all as they are neither its shareholders
nor Directors and merely because the defendants No. 2 & 3 happen to
be their sons, that in itself cannot be treated as a ground to disallow
the applications for condonation of delay filed by the defendants No. 1
to 3, particularly, when the defendants No. 2 & 3 who are the only
directors of the defendant No.1 company had admittedly remained in
judicial custody from July 2009 to 26th September, 2011.
10. It is relevant to note that it was during the very same period
that the plaintiffs in all the three suits were also in judicial custody in
the same case and their lack of diligence in prosecuting the present
suits is ascribed to the said fact.
11. Learned counsel for the defendants No. 1 to 3 submits that
while passing the impugned order, the Joint Registrar had failed to
appreciate the fact that the defendants No. 2&3 had remained in
judicial custody even at the time when the written statements finally
came to be filed on 30th August, 2011 and if they were really not
interested in defending the present proceedings or they wanted to
protract the suits, then they would have taken steps to file the written
statements only after being released from judicial custody, which is
not the case here.
12. He further submits that Mr. Arvind Kumar was earlier working
as a manager of the defendant No. 1 company but after the said
company went into losses and its business almost wound up, he was
requested to assist the defendants No. 1 to 3 in
prosecuting/defending the various litigations that had cropped up due
to disputes inter se the plaintiffs in the three suits and the defendants
as also with third parties.
13. Learned counsel for the plaintiffs opposes the present Chamber
Appeals and submits that if the contents of the applications filed by
defendants no.1 to 3 for condonation of delay is compared with the
grounds that have been taken in the Chamber Appeals, it will be
apparent that the stand that has now been taken by the defendants is
at variance to the one taken before the Joint Registrar. He submits
that the defendants cannot be permitted to change their defence in
the appeals when they had not based their case for condonation of
delay on the said grounds before the learned Joint Registrar.
14. The Court has heard the counsels for the parties and carefully
considered their submissions in the light of the averments made in
the applications filed by the defendants under Order VIII R 1 CPC and
the impugned order dated 30th January, 2012 passed by the learned
Joint Registrar.
15. A perusal of the applications for condonation of delay filed by
the defendants No. 1 to 3 reveals that the ground taken by them for
seeking condonation of delay was twofold. Firstly, it was submitted
that the earlier counsel who was engaged by the applicants was
instructed to appear in the present proceedings and file a written
statement but he had abruptly stopped appearing and had not
disclosed the correct facts to them and as the defendants No.2 & 3
were in judicial custody at that time, they had remained unaware of
the orders that were passed in the present case including the fact that
the time prescribed in the statute to file the written statements had
expired. The second ground taken by the defendants was that it was
only when they had deputed an officer of the defendant No. 1
company, Sh. Arvind Kumar in the month of July, 2011 to verify the
status of the present cases, that they were apprised of the fact that
the written statements had not been filed and their right to do so
stood closed and immediately thereupon, a new counsel was engaged
on 19th August, 2011 who had then inspected the court records,
prepared the written statement and forwarded the same to the
defendants in jail for their perusal and signatures and thus, the
written statements came to be finally filed on 30th August, 2011.
16. As noted above, the records reveal that neither of the parties
have been really diligent in prosecuting/defending the present
proceedings. There has been gross default on the part of the
plaintiffs in filing the process fee and taking steps to serve the
defendants with the summons in the suit and after their appearance,
with the paper book. While the defendant No.2 & 3 were represented
through counsel on 22nd October, 2009, the complete set of the paper
book came to be served on the counsel for the defendant No.1 to 3 on
19th November, 2010. The explanation offered by the learned counsel
for the plaintiffs for the lack of diligence is that the plaintiffs were also
in judicial custody in that duration. Similarly, the defendants No. 1 to
3 have also not been vigilant in defending the present suits. After
service of the paper book on 19th November, 2010, they filed their
written statement as late as on 30th August, 2011. The explanation
offered for the delay remains the same, that they were also in judicial
custody in that duration.
17. A closer look at the written statements filed by the defendants
No. 1 to 3 reveals that the same were sworn by the defendants No.2
& 3 on 29th August, 2011 while they were still in jail and their
signatures have been attested by the Deputy Superintendent, Central
Jail, Tihar. Thus, the submission made by the counsel for defendants
No. 1 to 3 that the defendants No. 2 & 3 were incarcerated at the
time when the written statements came to be prepared and filed, is
borne out from the records. It is also not disputed by the other side
that the defendants No.2 & 3 had remained in judicial custody for
almost a month thereafter, till 26th September, 2011. In other words,
when the written statements came to be filed by the defendants No.1
to 3, defendants No.2 & 3 had yet to be released from judicial
custody.
18. In such circumstances, when both the parties are found to be
equally responsible in causing delay in the progress of the suit, it
would be unfair and iniquitous to disallow the written statements filed
by the defendants to be taken on record by declining to condone the
delay. It is also relevant to note that learned counsel for the
defendants No.1 to 3 has submitted in the course of arguments that
the defendants No.2 & 3 are the only two Directors and shareholders
of the defendant No.1 company and therefore, it cannot be treated to
be a case where the defendants No.4 & 5 had any role to play in the
affairs of defendant No. 1 in any capacity. The defendant No.1
company is a separate legal entity and it could only have acted
through the defendants No.2 & 3 who were in judicial custody at the
relevant time. Simply because defendants No.4 & 5 are the fathers of
defendants No.2 & 3, or they were witnesses to an agreement
executed between the plaintiff and the defendants No.1 to 3 cannot
be taken to mean that they had the authority to file the written
statements on behalf of the defendant No.1 company.
19. When all the aforesaid facts and circumstances are considered
collectively, this Court is inclined to allow the present appeals.
Accordingly, all the three Chamber Appeals are allowed and the order
dated 30th January, 2012 is set aside. The delay on the part of the
defendants No.1 to 3 in filing the written statements is condoned.
However, taking into consideration the fact that the suit proceedings
have got protracted due to the belated filing of the written statements
by the defendants No.1 to 3, to balance the equities, it is deemed
appropriate to mulct the said defendants with costs of `30,000/-
collectively payable by them to the plaintiffs in each case, within two
weeks from today. It is made clear that in case the costs as imposed
are not paid within the stipulated time, then, the order dated 30th
January, 2012 shall automatically stand revived.
20. The present appeals are disposed of.
(HIMA KOHLI)
NOVEMBER 21, 2012 JUDGE
rs/rsk
