Delhi High Court
Kimsukh Krishna Sinha vs Sudipti Estates And Ors. on 24 May, 2016
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) No. 197/2010
% 24th May, 2016
KIMSUKH KRISHNA SINHA ..... Plaintiff
Through: Mr. Gaurav Mitra, Mr. Pratik Malik and
Mr. Rudra Nath Sharma, Advocates.
versus
SUDIPTI ESTATES AND ORS. ..... Defendants
Through: Mr. B.B. Gupta, Sr. Advocate with Mr.
Udyan Srivastava, Advocate for D-1, 5
and 7.
Mr. Yoginder Handoo, Advocate for D-6.
Mr. Aditya Shankar and Ms. Meghna
Mishra, Advocates for D-8, 9 and 10.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not? Yes
VALMIKI J. MEHTA, J (ORAL)
I.A.Nos. 7018/2010 (u/O VII R 11 CPC by D-2 to 4 and 7), 7115/2010 (u/O
VII R 11 CPC by D-1) & 7116/2010 (u/O VII R 11 CPC by D-8 to 10 CPC)
1.
These are applications filed by all the 10 defendants in the suit
except defendant nos. 5 and 6 for rejecting the suit plaint and dismissing the
suit. I.A No.7115/2010 filed by the defendant no.1 is for dismissal of the suit
on the ground of the suit being barred by limitation, and therefore, counsel for
the defendant no.1 prays for treating the application of defendant no.1 also
under Order XII Rule 6 of the Code of Civil Procedure, 1908 (CPC) and which
oral prayer is allowed. In fact if the suit is held to be time barred against
defendant no.1, the suit will also have to be held to be time barred against the
other defendant nos. 2 to 10 by application of Section 3(1) of the Limitation
Act, 1963.
2. Plaintiff by this suit seeks recovery of a sum of Rs.31,09,50,000/-
alongwith pendente lite and future interest against a total of ten defendants.
Memo of parties in the suit is as under:-
"IN THE MATTER OF:
KIMSUKH KRISHNA SINHA
Having its office at 39, Ground Floor,
Indraprakash Building, 21 Barakhamba Road,
New Delhi-110001 .... PLAINTIFF
VERSUS
1. SUDIPTI ESTATES (Sic: SUDIPTI ESTATES PVT. LTD.)
Registered Office at:
1E, Jhandewalan Extension
New Delhi
2. ARUN KUMAR BHAGAT
Director
M/s. Sudipti Estates Pvt. Ltd.
1E, Jhandewalan Extension
New Delhi
Also at:
R/o- 104/77, Silver Oaks Apartments,
DLF City, Phase-I, Gurgaon-122002
3. VIPEN JINDAL
Director
M/s. Sudipti Estates Pvt. Ltd.
1E, Jhandewalan Extension
New Delhi
Also at:
R/o.-Flat No.7157,
Block: D-7, Vasant Kunj,
New Dehi.
4. PURAN CHAND SACHDEVA
Director
M/s Sudipti Estates Pvt. Ltd.
1E, Jhandewalan Extension
New Delhi
5. PRAVEEN KUMAR (EARLIER NO.4)
Authorized Signatory
M/s. Sudipti Estates Pvt. Ltd.
1E, Jhandewalan Extension
New Delhi
Also at:
B-13/12, DLF City, Phase-I,
Gurgaon-122002, Haryana
6. PRADEEP SINGH (EARLIER NO.5)
Authorised Representaive
M/s. Sudipti Estates Pvt. Ltd.
1E, Jhandewalan Extension
New Delhi
Also at:
Apartment 1B75,
Wellington Estate, DLF (Opp. DLF Golf Course)
Phase-V, Gurgaon
Haryana
7. JAI PRAKASH GAUR
Authorized Signatory
M/s Sudipti Estates Pvt. Ltd.
1E, Jhandewalan Extension
New Delhi
Also at:
B-13/12, DLF City, Phase-I,
Gurgaon-122002, Haryana
8. DLF LIMITED
DLF Centre, Sansad Marg,
New Delhi-1100017
9. DLF HOME DEVELOPERS LIMITED
DLF Centre, Sansad Marg,
New Delhi-1100017
10. DLF ESTATE DEVELOPERS LIMITED
Shopping mall,
Arjun Marg,
DLF City, Phase-I
Gurgaon-122002 ....DEFENDANTS"
3. As per the plaint, plaintiff had title rights in the two properties
stated in para 5 of the plaint. The first property is land measuring 361 Kanal
and 13 Marla situated at Village Bandhwari, Tehsil, Sohna, District Gurgaon,
Haryana. The second property is land comprising of 44 Kanals and 11 Marla
situated at Village Bandhwari, Tahsil, Sohna, District Gurgaon, Haryana.
Rights in these properties were transferred by the plaintiff to the defendant no.1
for a total sum of Rs.34,27,31,188/- and which amount was received by the
plaintiff from defendant no.1 through six cheques signed by defendant nos.5
and 7 namely Sh. Praveen Kumar and Sh. Jai Prakash Gaur. The details of such
payments are as under:-
Sr. No. Amount (in Rs.) Cheque No. Date Drawn on
1. 3,75,89,000/- 578767 14.09.2006 ICICI Bank, Sushant
Lok, Gurgaon
2. 6,04,12,500/- 578765 14.09.2006 ICICI Bank, Sushant
Lok, Gurgaon
3. 7,48,40,625/- 578770 18.09.2006 ICICI Bank, Sushant
Lok, Gurgaon
4. 6,82,17,188 578778 21.09.2006 ICICI Bank, Sushant
Lok, Gurgaon
5. 7,09,59,375/- 578776 21.09.2006 ICICI Bank, Sushant
Lok, Gurgaon
6. 3,07,12,500/- 578787 28.09.2006 ICICI Bank, Sushant
Lok, Gurgaon
Total 34,27,31,188/-
4. The case of the plaintiff is that he was defrauded by the defendants
because amounts which were received by the plaintiff in cheques from
defendant no.1 of Rs. 34,27,31,188/-, he paid over the same in cash to the
defendant no.1 through duly signed receipts of defendant nos. 5 and 6, and
which was done because defendants promised to get funds invested in projects
of the DLF group companies inasmuch as defendant no.1 company is a group
company of the DLF group. The plaintiff further pleads that after the defendant
no.1 took over the possession of the properties sold by the plaintiff to the
defendant no.1, defendant nos.5 and 6 under a well planned modus operandi
and calculated conspiracy lured the plaintiff to reinvest the moneys received
with defendant no.1 company so that in the fresh lands acquired the DLF group
would carry out development in collaboration with the plaintiff. The plaintiff
further pleads that after receiving moneys from the plaintiff, defendants no.2, 3,
5 and 6 started avoiding the plaintiff and neglected the demands of the plaintiff
for procurement of the proposed lands and execution of the sale deeds in his
favour by the DLF group companies. Plaintiff further pleads that when
defendants were not coming forward, plaintiff somehow managed to have a
personal meeting with defendant nos. 5 and 6 on 01.12.2006 when plaintiff
insisted for the documents relating to the progress of the project, but defendant
nos. 5 and 6 refused straight away and in fact defendant nos. 5 and 6 threatened
the plaintiff from following the matter any further by telling the plaintiff that he
would have to face dire consequences as defendants enjoyed immense political
and muscle clout being big builders. Plaintiff further pleads that having left
with no option he sent a Legal Notice dated 25.1.2007 to defendants no.1, 2, 3,
5 and 6 (wrongly pleaded in plaint to all defendants), which was received by
these defendants, but these defendants neither repaid the monies advanced to the
defendant no.1 company nor replied to the legal notice. Plaintiff then pleads
that he has been duped by the defendant no.1 and its Directors whereby plaintiff
filed a complaint under various Sections of the Indian Penal Code, 1860 (IPC)
and the Code of Criminal Procedure, 1973 resulting in FIR bearing no.
249/2007 under Section 420 IPC against defendant nos. 1 to 3, 5 and 6 at Police
Station Connaught Place, New Delhi. The investigating officer however filed a
final report cancelling the complaint. Plaintiff challenged this in the competent
court, but the court declined the prayer of the plaintiff for further investigation
and which order was challenged by the plaintiff by filing a petition before this
Court which was said to be pending at the time of filing of the suit. Plaintiff
therefore pleads the aforesaid cause of action for filing of the suit for recovery
of moneys which arose in August, 2006 and also on 25.1.2007, 9.1.2010 and
16.1.2010 when plaintiff sent legal notices to the defendants but the defendants
failed to pay the amounts claimed.
5. In the subject application being I.A. No.7115/2010 filed by the
defendant no.1 it is pleaded that the suit is clearly barred by limitation because
plaintiff pleads fraud as per paras 17 to 19 of the plaint and of the plaintiff
sending a Legal Notice dated 25.1.2007 to the defendants and it is quite clear
from the contents of this Legal Notice dated 25.1.2007 that the plaintiff has
come to know of the fraud prior to 25.1.2007 when the legal notice was issued,
and since the suit is filed on 25.1.2010, the suit is therefore barred by limitation
because cause of action for three years under Article 113 of the Limitation Act
arose prior to the sending of the Legal Notice dated 25.1.2007 which talks of
plaintiff having come to know of the fraud prior to 25.1.2007 and hence the suit
had to be filed maximum by 24.1.2010.
6. On behalf of defendant nos. 2 to 4 and 7 and the defendant nos. 8
to 10, who have filed I.A Nos. 7018/2010 and 7116/2010 respectively, it is
argued that the plaint is deliberately confusingly made because plaintiff at his
convenience at different places in the plaint refers to defendants either jointly or
to only some of the defendants being defendant nos. 1, 5, 6 and 7, and at other
places to defendants no.5 and 6 or defendants no.5 and 7, however, a closer
reading of the plaint shows that effectively no cause of action is pleaded as
against any of the defendants except defendant nos. 1, 5 and 6. It is pleaded that
a reading of the plaint essentially only shows that it is the defendant no.1
company which admittedly received the monies from the plaintiff as per the
plaint and hence the liability to return the monies is only of the defendant no.1
along with defendants no.5 and 6 on account of the cause of action of collusion
being pleaded against defendant nos. 5 and 6. It is pleaded that even if such
collusion exists qua these defendant nos. 5 and 6, the suit itself qua all the
defendants will be barred by time as the suit is time barred on account of
arguments as raised on behalf of defendant no.1. On behalf of defendant nos. 8
to 10 companies, it is also argued that they were nowhere in the picture and
legal entities cannot be said to be in collusion with defendant nos. 5 and 6 to
defraud the plaintiff. It is also pleaded that in fact there are no averments of a
legal cause of action as against defendant nos. 2, 3, 4 and 7 to 10.
7. To decide the issues urged on behalf of the defendants let me at
this stage reproduce extensively the relevant paras of the plaint relied upon by
the plaintiff to argue that the plaint discloses a cause of action and the suit is not
barred by limitation, inasmuch as, it is these paras which will show as to
whether cause of action is pleaded against defendant nos. 2 to 4 and 7 and also
the defendants no.8 to 10 and as to whether at all the suit is barred by limitation
against all the defendants. The relevant paras of the plaint are paras 3, 4, 7, 10,
11, 15, 16, 17, 18, 19, 20, 21 and 25 and which paras read as under:-
"3. That Defendant nos. 2, 3, 4, 5, 6 and 7 are the Directors/Authorised
Signatories/Authorised Representatives of the Defendant no.1
Company and have at all times acted on behalf of the Defendant
no.1 Company.
4. As per the memorandum and articles of association, the Defendant
no.9 and 10 are the promoters and initial subscribers to the equity
shares of the Defendant no.1 Company. It is submitted that the
Defendant no.9 and 10 are companies that are group companies of
the Defendant no.8 group. It is stated and submitted that it is
Defendant no.8 is the group that holds and controls all the
Defendants above mentioned.
xxxxx
xxxxx
7. That upon the afore-said invitation, the Plaintiff visited office of the
Defendants in the first week of September, 2006 situated at
Shopping Mall, Arjun Marg, Phase-I, Gurgaon, Haryana. During
the discussions, the Defendant no.5 apprised and represented to the
Plaintiff that he is the Director and Authorised Signatory of the
defendant no.1 Company. The Defendant no.5 in order to lure and
gain the confidence of the Plaintiff further apprised that the
Defendant no.1 was one of the group companies of DLF Group (one
of the leading real estate developer in the country) and further
claimed and represented that he was also in the board of many DLF
Group Companies including the Defendant no.1 Company and also
on the board of DLF Estate Developers Ltd. (one of the promoters
of the Defendant no.1 Company), and in that context the Defendant
no.5 showed copies of a number of documents in support of his
afore-said claim. During the course of interaction at the said office,
the Defendant no.5 also introduced Defendant no.6 to the Plaintiff
who was already present there.
xxxxx
xxxxx
10. That besides the above, the Defendant nos. 5 and 6 also represented
to Plaintiff that they are aware of some other pieces of land which
they would procure in favour of Plaintiff at a much cheaper rate and
thus, under a calculated design, the said Defendants induced
Plaintiff to part with his ownership rights over the said properties.
The Defendant nos. 5 and 6 further represented that as the
Defendant no.1 being a real estate development company and also
part of the renowned DLF group, they would facilitate an agreement
between the promoters of the Defendant no.1 Company i.e., the
DLF group and Plaintiff wherein Plaintiff would contribute the land
proposed to be acquired by him through the efforts of the
Defendants out of the consideration receivable by him for the
transfer of his rights in the above mentioned properties and upon the
fresh lands so acquired, the DLF group would carry out
development in collaboration with Plaintiff.
11. That the Defendants their malafide intention and design represented
to Plaintiff that the money so paid to them as against the validity
executed receipts shall be utilized towards procurement of land in
the name of Plaintiff and that the land so procured would be
subjected to joint development by Plaintiff and the DLF Group or
by the Contractors/Sub-Contractors to be nominated/engaged by
Plaintiff or the DLF Group as may be mutually decided and the
DLF Group will also provide its brand name, business and
marketing support etc., to the proposed project thereby yielding
huge returns from the said developed project which shall be
beneficial for all the parties concerned.
xxxxx
xxxxx
15. That in accordance with the above understanding, the Defendant
No.1 made payment of a total sum of Rs. 34,27,31,188/- in parts to
Plaintiff through six cheques which were duly signed by Defendant
no.5 together with Defendant no.7. The details of the said payments
cheques are as under:-
Sr. Amount (in Cheque Date Drawn on
No. Rs.) No.
1. 3,75,89,000/- 578767 14.09.2006 ICICI Bank,
Sushant Lok,
Gurgaon
2. 6,04,12,500/- 578765 14.09.2006 ICICI Bank,
Sushant Lok,
Gurgaon
3. 7,48,40,625/- 578770 18.09.2006 ICICI Bank,
Sushant Lok,
Gurgaon
4. 6,82,17,188 578778 21.09.2006 ICICI Bank,
Sushant Lok,
Gurgaon
5. 7,09,59,375/- 578776 21.09.2006 ICICI Bank,
Sushant Lok,
Gurgaon
6. 3,07,12,500/- 578787 28.09.2006 ICICI Bank,
Sushant Lok,
Gurgaon
Total 34,27,31,188/-
16. That as and when Plaintiff received an account payee cheque from
the Defendant No.1 Company duly signed by Defendant No.5 and 7
towards sale consideration in respect of transfer of his rights in the
said properties, Plaintiff immediately arranged the cash against the
realisation/credit and handed over the same to Defendant no.1
through Defendant nos. 5 and 6 against duly stamped receipts issued
by Defendant no.6 on behalf of Defendant no.1 for the purpose of
procuring/purchasing the proposed lands in pursuance of the
understanding as stated above. The details of the cash given to
Defendant no.5 and 6 acting on behalf of the Defendant no.1
Company are as under:-
Sr. No. Amount (in Rs.) Date of Receipt Status/Remarks
1 9,50,000/- 14.09.2006 In cash
2 2,86,00,000/- 18.09.2006 In cash
3 74,85,240/- 19.09.2006 In cash
4 3,71,64,760/- 21.09.2006 In cash
5 2,08,31,240/- 22.09.2006 In cash
6 7,18,47,000/- 25.09.2006 In cash
7 6,81,21,000/- 27.09.2006 In cash
8. 2,94,84,000/- 10.10.2006 In cash
9. 4,64,66,760/- 16.10.2006 In cash
Total 31,09,50,000/-
17. That after receiving the funds in cash to the tune of
Rs.31,09,50,000/-(Rupees Thirty One Crores Nine Lacs and Fifty
Thousand Only) and execution of the said Sale -Deeds in favour of
Defendant no.1 and taking over the possession of the said
properties, the Defendant nos.2,3,5 and 6 under a well planned
modus operandi and calculated conspiracy started avoiding Plaintiff
on one pretext or the other. Whenever Plaintiff tried to reason it out
with the said Defendants to do the needful as promised, assured and
undertaken, the Defendants deliberately started neglecting the
genuine and legal demands of Plaintiff regarding procurement of the
proposed lands and execution of the Sale-deeds in his favour and to
get executed the necessary collaboration/development agreements
thereof with the DLF Group.
18. That when the Defendants were not coming forward, Plaintiff some
how managed to have a personal meeting with Defendant nos. 5 and
6 on 01.12.2006 at about 07.45 P.M at City Club, Gurgaon and in
the meeting the Defendant nos. 5 and 6 further gave false assurances
to the Plaintiff that they are in the process of procuring the proposed
land and very soon the said lands shall be transferred in the name of
the Plaintiff. When Plaintiff insisted that the documents relating to
progress of the matter be shown to him, the Defendant nos. 5 and 6
straight away refused to provide the said documents and told
Plaintiff that the defendants have their own working system which
is also prevalent under the other DLF Group Companies also and
there is no requirement for showing any document whatsoever.
When Plaintiff still insisted that the commitments be honoured as
earliest possible, the Defendant nos. 5 and 6 threatened Plaintiff to
desist from following the matter any further, otherwise Plaintiff
would have to face dire consequences as the Defendants being
builders they enjoy immense political and muscle clout and were
having sufficient influence in the police machinery also.
19. That having no option left, Plaintiff was constrained to send a legal
notice dated 25.01.2007 to the Defendants and which the same was
duly received by the defendants. However, the Defendant neither
repaid the monies as advanced to the Defendant no.1 Company by
the Plaintiff towards procurement of land nor have replied to the
legal notice dated 25.01.2007.
20. It may not be out of place to mention herein that Plaintiff also filed
a complaint under section 200 read with section 190 of the Code of
Criminal Procedure 1973 and in which an FIR bearing no. 249 of
2007 was registered under section 420 of IPC against the Defendant
No.1 to 3, 5 and 6 at Police Station Connaught Place. That the
investigating officer filed a final report, whereby cancelling he
complaint of the Plaintiff. That the Plaintiff filed as application for
further investigation as the investigating officer ignored certain vital
facts in order to give benefit to the Accused therein. That the
concerned court declined the prayer for further investigation, and
the said order has been challenged by the Plaintiff by filing a
petition before this Hon‟ble Court and in which the prosecution has
been directed to file status report and the same is listed on
04.03.2010.
21. That having being duped by the Defendant no.1 and its directors and
authorized representatives/signatories under the continuing
protection of the influence, wealth and enormous power of the
Defendant no. 8 and concerned with the potential devastating
consequences of such dubious entity being allowed to operate on the
stock exchange and have uncontrolled access to extraordinary sums
of public monies, the Plaintiff was compelled to address a letter
dated 04.06.2007 to the market watchdog, Securities and Exchange
Board of India (SEBI) who vide its letter dated 25.06.2007 informed
the Plaintiff that the complaint of the Plaintiff has been forwarded to
the said Defendants for a suitable reply. The Defendant No. 8, vide
its letter dated 11.07.2007 addressed to the Plaintiff, clearly denied
the allegations and denied its association with the Defendant No.1
Company. At this, the Plaintiff again sent a representation dated
19.07.2007 to SEBI but again the same was forwarded by SEBI to
the said Defendant no. 8 for their comments vide its letter dated
27.08.2007. In response to the same, the Defendant no. 8 vide their
reply dated 28.09.2007 again reiterated its stand as taken in the
earlier reply and denied its association with the defendant No.1.
xxxxx
xxxxx
25. That the cause of action for filing of the suit arose in August 2006
when the Defendants approached the Plaintiff for discussing
business propositions. It further arose in September 2006 when the
Plaintiff met the Defendant no.5 and 6 at their offices and when the
Plaintiff was misrepresented and made to believe that the lands
would be developed in accordance with the collaboration between
the Plaintiff and other group company of the Defendants. It further
arose on 25.01.2007, 09.01.2010 and 16.01.2010 when the Plaintiff
through its counsels sent legal notices to the Defendants and despite
receipt of the same the Defendants failed to pay the amounts as
mentioned in the legal notice."
8.(i) A reading of the aforesaid paras show that the plaintiff at his own
convenience uses the expression defendant or defendants or defendant no.1 with
defendant nos.5, 6 and 7 or one or more of defendants with defendants nos. 5, 6
and 7 etc etc. There are no averments whatsoever against defendant nos. 8 to 10
companies and which companies being legal entities in any case could not have
been guilty of collusion with individuals being the defendant nos. 5 to 7.
Therefore, the plaint is liable to be and is accordingly rejected for lacking cause
of action against defendant nos. 8 to 10. Also, as per the discussion hereinafter
contained the suit will also have to be time barred as against defendant nos. 8 to
10 assuming a cause of action is pleaded against defendant nos. 8 to 10.
(ii) Like no cause of action has been pleaded against defendant nos. 8
to 10 companies, it is seen that there is no cause of action pleaded even against
defendant nos. 2 to 4 and 7 except for the averments made in para 3 of the plaint
that these defendant nos.2 to 4 and 7 are Directors/authorized
signatories/authorized representatives of the defendant no.1 company. There
are no averments as required by law or pleading exists in the plaint for any
alleged collusion between defendant nos. 2 to 4 with defendant nos. 1 and 5 to 7
for defrauding the plaintiff. By making generalized vague averments of the
plaintiff to his convenience using the expression „defendants‟ generally in
certain paras of the plaint would not mean that the legal cause of action is
pleaded against defendant nos. 2 to 4 and 7. The plaint does not show as to any
illegal and false representations being made by the defendant nos.2 to 4 and 7 to
lure the plaintiff and which has resulted in plaintiff being defrauded as claimed
by the plaintiff.
(iii) In my opinion the plaint does not disclose a legally required to be
pleaded cause of action against the defendants no.2 to 4 and 7 (as also
defendants no.8 to 10) for the following reasons:-
(A) Para 3 of the plaint pleads defendants no.2 to 7 as the
Directors/authorized signatories/authorized representatives of the
defendant no.1 company and which averment does not amount to
collusion and conspiracy by these defendants as they cannot be held
to be in collusion to defraud the plaintiff by merely being Directors
or authorized signatories or authorized representatives of the
defendant no.1 company.
(B) At best luring and defrauding of the plaintiff would be by
defendants no.5 and 6 only, and this becomes clear from the reading
of paras 7, 8, 9, 10, 18 to 20 and 23 of the plaint.
(C) Plaintiff pleading „defendants‟ as an omnibus term in para 11
of the plaint will not amount to pleading a legal cause of action
against all the defendants and reference of defendants in para 11 of
the plaint be taken as reference only to defendants no.5 and 6 and if
reference is taken to other defendants then such a pleading falls foul
of Order VI Rule 4 CPC as no particulars of how defendants other
than defendants no.5 and 6 have duped the plaintiff is not pleaded in
para 11 or for that matter in other paras of the plaint.
(D) Defendant no. 7 by merely being a signatory to the receipts
of receiving moneys for defendant no.1 company will not mean that a
legal cause of action would stand pleaded against defendant no.7
inasmuch as Order VI Rule 4 CPC requires detailed pleading when
the issue is of fraud and no detailed pleading is found as to how
defendant no.7 is guilty of allegedly duping the plaintiff in collusion
and conspiracy with defendant nos. 5 and 6 and any other defendant.
(E) On a meaningful, and not a formal, reading of the plaint, the
same shows only that duping of plaintiff is allegedly and only by the
defendants no.5 and 6.
(F) Vague and generalized averments of plaint be not allowed to
be a valid and legally required cause of action and which is otherwise
mandatorily to be found to exist in the plaint.
(iv) Therefore, no cause of action is found to be pleaded against
defendant nos. 2 to 4 and 7 and the suit plaint is liable to be and is accordingly
rejected as against defendant nos. 2 to 4 and 7. Also, the suit plaint as
hereinafter discussed will also have to be taken as time barred as against
defendant nos. 2 to 4 and 7.
9. I once again note that this Court must not cursorily read the plaint
but the plaint must be read thoroughly and analytically. Merely because
plaintiff would seek to create an illusion of the cause of action does not mean
that this Court must find existence of a cause of action on vague and identical
averments made in the plaint qua the defendant nos. 2 to 4, 7 and 8 to 10. Court
has to nip in the bud those litigations where really no cause of action is pleaded
to exist i.e as against defendant nos. 2 to 4, 7 and 8 to 10. The Supreme Court in
its judgment in the case of T.Arivandandam Vs. T.V.Satyapal and Another
(1977) 4 SCC 467 has held that this Court must act under Order VII Rule 11
CPC to reject false suit plaints by minutely and closely examining the plaint
without being affected by illusory attempts of the plaintiff to plead a cause of
action. Accordingly, as per the ratio of the said judgment, I find that plaint only
seeks to create an illusion of a cause of action without pleading a valid legal
cause of action as against the defendant nos. 2 to 4, 7 and 8 to 10. The Supreme
Court has made it clear that there cannot be a formal reading of the plaint but
plaint has to be read in a meaningful manner so that the illusory cause of action
is not allowed to continue by continuation of the suit. I may also note that
merely because defendant nos. 2 to 4 and 7 are authorized signatories of the
defendant no.1 company would not in any manner mean that merely on account
of their being authorized signatories they are liable for the liability of the
defendant no.1 company and which defendant no.1 company is pleaded as per
the plaint to have received monies from the plaintiff and which monies the
plaintiff claims return of by way of the present suit.
10. Let me now turn to the issue as to whether the suit is barred by
limitation because if the suit is barred by limitation then the suit will be barred
by limitation as against all the defendants. It is trite that in law a cause of action
for seeking recovery and refund of monetary amounts as per the pleadings of the
present suit of plaintiff being duped and defrauded would be when the plaintiff
becomes aware of the fraud being played upon him. As per Article 113 of the
Limitation Act, a suit has to be filed within 3 years of arising of a cause of
action and in a suit pleading a cause of action of a case of fraud, the same arises
when the fraud becomes known to the plaintiff who seeks recovery of monies.
In the present case, the Legal Notice sent by the plaintiff for the first time is
dated 25.1.2007. The Legal Notice dated 25.1.2007 talks of plaintiff having
been defrauded and which knowledge thus had already come to the plaintiff
prior to issuing of the Legal Notice dated 25.1.2007 ie on or before 24.1.2007.
If we minutely and carefully read the plaint, it is found that plaintiff actually
discovered the fraud on 1.12.2006, and this becomes apparent on a reading of
para 18 of the plaint. However, even if we give a liberal interpretation to para 18
of the cause of action not arising on 1.12.2006, although this para in sum and
substance talks of defendants giving threats of dire consequences and hence of
plaintiff being defrauded, yet, the contents of para 19 of the plaint and contents
of the Legal Notice dated 25.1.2007 makes it clear that the cause of action has
accrued prior to 25.1.2007 ie on 24.1.2007 or before. The subject suit is
however filed only on 25.1.2010 i.e after three years of 24.1.2007. Subject suit
therefore filed beyond three years from 24.1.2007 is clearly barred by
limitation. Learned counsel for the plaintiff is not justified in placing reliance
on Article 47 of the Limitation Act because the said Article does not apply
when plaintiff seeks to recover amounts on the basis of fraud being allegedly
perpetrated on the plaintiff by the defendants and in which case it is Article 113
of the Limitation Act which would apply.
11. The aforesaid discussions show that no cause of action is pleaded
against the defendant nos. 2 to 4, 7 and 8 to 10, and therefore, the suit plaint is
liable to be and is accordingly rejected as against these defendants. The suit
plaint is also rejected as barred by limitation against all the defendants as the
suit had to be filed, taking as correct the cause of action of fraud being
perpetrated on the plaintiff, on or before 24.1.2007, and therefore, the suit had
to be filed on or before 24.1.2010, but since the suit has been filed on
25.1.2010, the suit is clearly barred by limitation. The suit plaint is accordingly
rejected, and dismissed on account of being time barred by applying Order XII
Rule 6 CPC, leaving the parties to bear their own costs.
MAY 24, 2016 VALMIKI J. MEHTA, J.
ib
