Col. Kalyan Singh (Retired) vs M/S Wimpy International Ltd. & ...
2014 Latest Caselaw 5405 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                             Judgment reserved on : 24th July, 2014
%                     Judgment pronounced on : 31st October, 2014

+                     I.A. No.14348/2008 in CS(OS) 1432/2004

       COL. KALYAN SINGH (RETIRED)                  ..... Plaintiff
                     Through Mr.Chayan Sarkar, Adv. with
                              Mr.Bipul Kedia and Mr.Ankur
                              Kumar, Advs.

                           versus

       M/S WIMPY INTERNATIONAL LTD. & ORS.    ..... Defendants
                     Through Mr.Manav Gupta, Adv. with
                             Ms.Prabhsahay Kaur and
                             Ms.Esha Dutta, Advs.

       CORAM:
       HON'BLE MR.JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. By this order I propose to decide I.A. No. 14348/2008 filed by the defendant under Order 7 Rule 10 and 11 read with Section 151 CPC for seeking return/rejection of the plaint.

2. Plaintiff had filed a suit for declaration and injunction against the defendants. He sought declaration of agreement dated 1st December, 1988 executed between the plaintiff and Capt. H.S. Bajaj and M/s Goodwill Foods (P) Ltd. and of other documents as null and void. The plaintiff sought a decree of permanent injunction against defendant Nos.1, 2, 3 and 5 restraining them from parting away with

possession of the suit property. It was also prayed that defendant No.4 be restrained from giving any permission for transferring/selling of the suit property in favour of any other person through defendant Nos.1, 2 and 3.

3. During the pendency of the suit, the plaintiff had passed away on 7th March, 2009. The legal representatives of deceased plaintiff were brought on record by order dated 22nd October, 2010.

4. It has been stated that in the year 1979 a partnership firm by the name of M/s Freezo Freezing Complex had applied for allotment of the suit property i.e. land bearing No. 245, Udyog Vihar, Dhoondahera, Gurgaon, Haryana measuring 19516.60 Sq. Mtrs. from defendant No.4.

5. In pursuance thereof, defendant No.4 (HSIDC) had agreed to allot the said land to M/s Freezo Freezing and thereafter the said land had been sold by way of a registered Sale Deed dated 25th February, 1983 executed in favour of M/s Freezo Freezing.

6. The present application has been filed by the defendant Nos.1 and 2 on two grounds i.e. this Court lacks territorial jurisdiction to try the suit as the suit property i.e. property bearing No.245, Udyog Vihart, Dhoondahera, Gurgaon, Haryana, is situated in Gurgaon and the suit is barred by limitation as the suit is for seeking declaration of invalidity of the agreement dated 1st December, 1988, but has been filed in the year 2004 whereas the prescribed period in this regard is 3 years as per the Limitation Act.

7. It is stated in the application that though the plaintiff sought to invoke the territorial jurisdiction of this Court in para 27 of the plaint

for the reason that the defendant No.1 is a registered company located in Delhi and defendant No.5 also works for gain in Delhi and therefore the cause of action has arisen in Delhi, but this Court would not have territorial jurisdiction as this is a suit in substance for determination of right/interest in an immovable property outside the jurisdiction of this Court in view of Section 16(d) CPC. It has been stated that the suit is at a preliminary stage and objection with regard to territorial jurisdiction was taken even on earlier occasions.

8. With regard to limitation, it is argued that it is legal issue which can be raised at any stage and in case this Court finds on the face of pleading and documents that the suit filed by the plaintiff is time barred, no separate application is required.

9. In the reply to the said application, it has been stated by the plaintiff that this Court has territorial jurisdiction and the said fact is not denied in the written statement. It is stated that the documents in question including the impugned agreement dated 1st December, 1988 were executed at Delhi. Defendant No.1 has its registered office at Delhi and defendant No.5 also works for gain in Delhi and the cause of action has arisen in Delhi. It is stated the suit was instituted in the year 2004 and the written statement itself was filed by the defendant No. 1 in February, 2005. The application is an afterthought and has been moved simply to harass the plaintiff and to delay the proceedings. The objection had not been taken at the earliest possible opportunity, therefore cannot be allowed at a subsequent stage.

It is also stated that the plaintiff is not claiming any relief with regard to the suit property but only for declaration of certain documents as illegal and void. The plaintiff has also sought permanent injunction against the defendant No.1 who can be compelled by personal obedience that he should not deal with the suit property on the basis of the alleged documents. It is denied that the suit in substance is a suit regarding determination of right to or interest in immovable property situated in Gurgaon.

10. It is denied that the suit is barred by limitation since the alleged documents do not confer any title on the defendant and the defendant threatened to misuse those documents. This compelled the plaintiff to file the suit and so the suit is within time.

11. It is the case of the defendant Nos.1 and 2 that the suit property was owned by the Partnership Firm which fact further gets reiterated by plaintiffs own admission in the Agreement dated 1st December, 1988 of which he is a signatory as a partner of M/s Freezo Freezing Complex wherein it has been stated that the suit property has been purchased by the defendant No.1 & 2 from M/s Freezo Freezing Complex.

12. The said agreement dated 1st December, 1988 was signed/executed by all the three partners i.e. the plaintiff, N.K. Duggal & H.S. Bajaj on behalf of M/s Freezo Freezing Complex. In the Agreement it was stated that the assets of the partnership firm including the suit property was being taken over by the defendants No.1 & 2. The suit property stood conveyed/mutated in the name of the defendant Nos.1 & 2 by defendant No.4.

13. The reliefs sought for in the present suit are merely declaratory in nature without seeking the necessary consequential reliefs in terms of Section 34 of the Specific Relief Act, 1963. It is settled law that where the plaintiff being able to seek further relief than a mere declaration of title, omits to do so, the plaintiff shall be precluded from seeking such consequential reliefs at a belated stage and the Court would reject the suit on this ground alone.

14. As far as the issue of invoking territorial jurisdiction is concerned, it is settled law that while considering the application under Order 7 Rule 11 CPC, the Court is to examine the averments made in the plaint and documents filed along with plaint. In view of averments made in the plaint, the contention of the defendant Nos. 1 and 2 cannot be accepted.

15. With regard to other objection raised in the application that the suit is barred by limitation, there is no specific prayer in the application but in the body of the application, the said objection was raised. In the matter, when the issue of limitation is a doubtful case, normally, it becomes mixed question of facts and law. But at the same time, if Court would find that on the face of averment and facts made in the plaint, the suit is time barred, then the Court can reject the plaint.

16. The plaintiff had not denied the fact that the suit property was in the name of partnership firm. The deceased plaintiff himself had admitted that he had signed the agreement dated 1st December, 1988 and he was the partner of partnership firm. The said agreement is challenged in the present suit which was filed in the year 2004 after

the expiry of 16 years. The deceased was the signatory to the agreement. Now the issue before this Court is as to whether on the face of admissions made by the deceased plaintiff himself, the suit was time barred and the plaint is likely to be rejected or not.

17. The observations of Supreme Court in the case of Commissioner of Income Tax, Madhya Pradesh Vs. Dewas Cine Corporation, AIR 1968 SC 676 are worth noting wherein the Court observed thus:

"Under the Partnership Act, 1932, property which is brought into the partnership by the partners when it is formed or which may be acquired in the course of the business becomes the property of the partnership and a partner is, subject to any special agreement between the partners, entitled upon dissolution to a share in the money representing the value of the property. When the two partners brought in the theatres of their respective ownership into the partnership, the theatres must be deemed to have become the property of the partnership. Under s. 46 of the Partnership Act, 1932, on the dissolution of-the firm every partner or his representative is entitled, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to their rights. Section 48 of the Partnership Act provides for the mode of settlement of accounts between the partners. It prescribes the sequence in which the various outgoing are to be applied and. the residue remaining is to be divided between the partners. The distribution of surplus is for the purpose of adjustment

of the rights of the partners in the assets of the partnership; it does not amount to transfer of assets.

On dissolution of the partnership, each theatre must be deemed to be returned to the original owner, in satisfaction partially or wholly of his claim to a share in the residue of the assets after discharging the debts and other obligations. But thereby the theaters were not in law sold by the partnership to the individual partners in consideration of their respective share in the residue." (Emphasis Supplied)

18. One thing immediately becomes clear from the reading of aforesaid observation of the Apex Court which is that once the property being in ownership of the partners is brought into the partnership, it becomes the property of the firm.

19. It is a matter of record that in pursuance to the Agreement dated 1st December, 1988 the assets (including the suit property) and liabilities of M/s Freezo Freezing Complex had been taken over by the defendant No.1 alongwith the liability existing towards defendant No.5 i.e. State Bank of Saurashtra and thereafter has been duly discharged by the defendant No.1.

20. The plaintiff has made an admission by way of an affidavit dated 1st December, 1988 and indemnity bond executed by him in favour of defendant No.1 (M/s Wimpy International Ltd. earlier known as M/s Goodwill foods P. Ltd.), whereby he admits that he is a partner in M/s Freezo freezing Complex and that there exist no lien over the suit property and further undertakes to indemnify the defendant Nos.1 & 2 against any loss suffered.

21. It is settled position in law that if by means of clever drafting a camouflage has been created in order to create an illusion of a cause of action, such cases should be nipped in the bud at the first hearing itself i.e. even before admitting the suit and issuing summons or any time thereafter. The judgments of the Supreme Court in the case of T. Arivandandam Vs. T.V. Satyapal, (1977) 4 SCC 467 (para 5); and Church of Christ Charitable Trust Vs. Ponniamman Education Trust, (2012) 8 SCC 706 (paras 10, 12 & 13); and Ajay Goel Vs. K.K.Bhandari, 1999 (48) DRJ 292 (paras 2, 5-8, 15) are relevant in this regard. Therefore, this Court can suo-moto exercise its powers under Order 7 Rule 11 CPC without there being a formal application for the said purpose.

22. By order dated 9th January, 2012 the Court earlier vacated the ex-parte interim injunction operating in favour of the plaintiff since 15th December, 2004 and held that the plaintiff is not the owner of the suit property and has got no right, title or interest therein in the following terms:

"11...It is, thus, clear that plaintiff had himself admitted that the suit property belonged to M/s Freezo Freezing Complex and thereafter assets and liabilities including the immovable property had been taken over by the defendant no.1. Be that as it may, from the agreements executed between defendant no. 4 and M/s Freezo Freezing Complex, it is clear that the plaintiff is not the owner of the suit property nor has got any right, title and interest therein.

12.... Plaintiff has filed this suit claiming himself to be the owner of the suit property. As already held above, M/s

Freezo Freezing Complex was the owner of the suit property and later on, the defendant No.1 having taken over the assets and liabilities of M/s Freezo Freezing Complex became the owner of the suit property along with the super structures on it. Thus, plaintiff, acting as an individual, had no right to challenge the ownership rights of the defendant No.1."

23. After the vacation of interim injunction by its judgment & order dated 9th January, 2012, the plaintiff alongwith his family members had instituted a suit for declaration on 30th January, 2012 before Civil Judge, Gurgaon District Court seeking a declaration that he be declared as the owner of the suit property by asserting that he is the owner of the suit property. The plaintiff had obtained a consent decree dated 1st February, 2013 from the Gurgaon District Court.

24. In the meanwhile, the appeal filed by the plaintiff bearing No. FAO [OS] No.100 of 2012 against order dated 9th January, 2012 got dismissed as withdrawn by order dated 2nd March, 2012.

25. This Court has been informed that on the strength of the said decree the plaintiff had filed another suit for eviction of the defendant No.1 from the suit property. Filing of the said suit by the plaintiff is not admitted by the plaintiff. The learned Civil Judge, Gurgaon District Court has dismissed the suit for eviction by order dated 31st May, 2014 and has further held that the said decree dated 1st February, 2013 is a nullity as being obtained by playing fraud on the said Court and is not sustainable in law. The relevant extract of the said judgment has been reproduced as hereunder:

"12. The Petitioners have deliberately concealed the judgment and order dated 09.01.2012 from this Court. The

Judgment dated 09.01.2012 clearly holds that Col. Kalyan Singh is not the owner of the suit property. As far as the consent decree in four of the Petitioner is concerned, it can be safely said that a decree obtained by collusion and by playing fraud with the Court is not sustainable in the eyes of law. No other document of ownership has been filed by Petitioner. Accordingly the present suit is not maintainable and the issues is decided in favour of respondent and against the Petitioner."

26. It is an admitted position that the possession of the suit property has since 1st December, 1988 been with the defendant No.1. A bare perusal of the reply filed by the plaintiff to the present application filed under Order 7 Rule 11 CPC as well as para 21 and prayer [b] of the present suit would show that the plaintiff admits that the possession has all along been with defendant No.1.

27. For this purpose, reliance has been placed on the judgment of the Supreme Court in the case of N.V.Srinivasa Murthy vs. Mariyamma, (2005) 5 SCC 548 (paras 10-12, 14-18), wherein the Court had observed that the mutation proceedings in the year 1994 did not give rise to a fresh cause of action as it was only in furtherance to the sale deed dated 5th May, 1953 and that it appeared to have been made as a camouflage to get over the bar of limitation. Therefore, the Court had dismissed the suit under Order 7 Rule 11 CPC.

28. After considering the abovementioned circumstances and facts of the case, this Court is of the considered opinion that the present suit is hopelessly barred by limitation as in the present case, the right to sue, if any, first accrued at the time of execution of the Agreement

dated 1st December, 1988 and handing over of the possession. However, the present suit has been filed belatedly only on 10th December, 2004 i.e. after a period of 16 years. The plaintiff and defendant Nos.1 & 2 have duly acted upon the Agreement dated 1st December, 1988 as it is evident from a bare perusal the terms of the said agreement.

29. There exists no fresh cause of action in favour of the plaintiff and it is only by means of clever drafting that a camouflage has been created in order to create an illusion of a cause of action as it is evident from a bare perusal of para 26 of the above-captioned suit wherein it has been alleged by the plaintiff that the cause of action arose in his favour on 7th December, 2004 when he himself had served a legal notice on the defendant Nos.1 & 2. The plaint is accordingly rejected being time barred.

(MANMOHAN SINGH) JUDGE OCTOBER 31, 2014