Shakun Jaiswal vs Anand Pershad Jaiswal & Ors.
2017 Latest Caselaw 1326 Del

*
        IN THE HIGH COURT OF DELHI AT NEW DELHI
    %                          Judgment Delivered on:   10th March, 2017

+       FAO (OS) 457/2014 & Review Petition 102/2016

SHAKUN JAISWAL                                             ..... APPELLANT

                                 VERSUS

ANAND PERSHAD JAISWAL & ORS.                            ..... RESPONDENTS

+       FAO (OS) 459/2014 & Review Petition 103/2016

KARAMJIT JAISWAL                                           ..... APPELLANT

                                 VERSUS

ANAND PERSHAD JAISWAL & ORS.                            ..... RESPONDENTS

Advocates who appeared in this case:

For the Appellant:         Mr. A.S. Chandhiok, Mr. Sandeep Sethi, Sr.
                           Advocates with Mr. Amit Aggarwal, Ms Malini Sud
                           and Ms Shagun Parashar, Advocates.

For the Respondents:       Mr. Arvind Nigam, Senior Advocate with Mr.
                           Akshay Makhija with Mr. Saurabh Seth, Mr. Vikas
                           Bhadauria and Ms Amisha Gupta, Advocates for
                           Review Petitioner.
                           Mr. Vinod Goel, Advocate for R-3.

CORAM:
HON'BLE MR. JUSTICE BADAR DURREZ AHMED
HON'BLE MR. JUSTICE SANJEEV SACHDEVA

                             JUDGMENT

===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

SANJEEV SACHDEVA, J

1. Both the appeals impugned the common order dated 22.09.2014 in CS (OS) 2064/2009. FAO (OS) 457/2014 was filed by Shakun Jaiswal (defendant no. 1 in the suit) and FAO (OS) 459/2014 was filed by Karamjit Jaiswal (defendant no. 2 in the suit). Anand Pershad Jaiswal (Respondent no. 1) in both the appeals is the plaintiff in the suit. Both the appeals were disposed of by us by common Judgment dated 03.02.2016.

2. The Review Petitions have been filed by Respondent No. 1 contending that while reserving judgment, the arguments were heard only on the issue of maintainability of the appeals and arguments had to be addressed by the Review Petitioner on the merits of the appeals.

3. The subject Suit seeks a declaration thereby declaring the transfer of funds amounting to £ Sterling 86,41.735.81, US $ 2.54.589.83 and € 10,000 from the accounts belonging to late Shri L.P. Jaiswal in favour of Shakun Jaiswal (defendant no. 1) to be a fraudulent transaction and therefore null and void and further seeks a mandatory injunction for reversing the said transaction.

4. By order dated 28.02.2011, the plaint was rejected under Order 7 Rule 11 (d) of the Code of Civil Procedure, 1908 (hereinafter referred to as the CPC.). The order rejecting the plaint was challenged ===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

by the respondent no. 1. A Division Bench of this court set aside the order dated 28.02.2011 and the suit was restored. The decision of the Division Bench was impugned by the appellants herein before the Supreme Court. The Supreme Court by order dated 23.04.2013 dismissed the Special Leave Petition and while dismissing the petitions clarified that it was open to the appellants herein to raise all available pleas in the written statement including the pleas relating to limitation, court fees and maintainability of the suit. It was directed that the trial be concluded as expeditiously as possible and preferably within two years from the date of the passing of the said order.

5. Thereafter, the written statement and replication were filed and the following issues were settled on 14.02.2014: -

(i) Whether the suit as framed by the plaintiff is properly valued for the purpose of court fees?

(ii) Whether the suit is liable to be rejected under Order 7 Rule 11(a) and (d)CPC?

(iii) Whether the suit is barred by limitation? OPD.

(iv) Whether the plaintiff has the locus to maintain the present suit? OPD.

(v) Whether the suit as framed is maintainable in view of the proviso to Section 34 of the Specific Relief Act, 1963? OPD.

(vi) If the answer to issue Nos. (i) to (v) or any of them ===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

is in the negative, whether the plaintiff is entitled to a declaration, as prayed for?

(vii) Whether the plaintiff is entitled to a decree of mandatory injunction, as prayed for?

(viii) Whether the suit is barred by principles analogous to res judicata? OPD-1.

(ix) Whether the plaintiff is estopped from filing the present suit for declaration in view of the undertaking given by the plaintiff before the Company Law Board? OPD-1.

Issues no. (i) and (ii) were treated as preliminary issues.

6. Respondent No. 1/Plaintiff filed two applications (i) IA No. 19226/2013 under Order 7 Rule 14 read with Order 13 Rule 1 CPC seeking to place additional documents on record and (ii) IA No. 5416/2014 under Order 14 Rule 5 seeking to strike out issue no. (v) and to vary the direction treating issues (i) and (ii) as preliminary issues.

7. By order dated 22.09.2014, IA No. 19226/2013 under Order 7 Rule 14 read with Order 13 Rule 1 CPC seeking to place additional documents on record has been allowed and IA No. 5416/2014 under Order 14 Rule 5 seeking to strike out issue no. (v) and to vary the direction treating issues (i) and (ii) as preliminary issues has been partly allowed. While the prayer seeking deletion of issue (v) has been

===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

dismissed, the direction treating issues (i) and (ii) as preliminary issues has been recalled.

8. By our common judgment dated 03.02.2016 in both the appeals, we had done three things. (i) held the appeals to be maintainable, (ii) dismissed the appeals in so far as they challenged the order dated 22.09.2014 in IA No. 19226/2013 under Order 7 Rule 14 read with Order 13 Rule 1 CPC, taking the additional documents on record and (iii) allowed the appeals with regard to order dated 22.09.2014 in IA No. 5416/2014 whereby the direction treating issues

(i) and (ii) as preliminary issues was recalled and the said issues were directed to be decided along with other issues.

9. The Review applications have been filed stating that the Review Petitioner seeks review of our final judgment dated 03.02.2016 to the extent it allows the appeals of the Appellants in respect of I.A. No. 5416/2013. The Review Petitioner has thus accepted our Judgment dated 03.02.2016 in so far as it (i) rejects the objection of the Review Petitioner with regard to maintainability of the appeals and (ii) dismisses the appeals to the extent of challenge by the appellants to order dated 22.09.2014 in IA No. 19226/2013 under Order 7 Rule 14 read with Order 13 Rule 1 CPC, taking the additional documents on record. We may also note that the Appellants have not sought any review of the Judgment dated 03.02.2016 in so far as it ===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

dismisses their appeals with regard to challenge to order dated 22.09.2014 in IA No. 19226/2013 under Order 7 Rule 14 read with Order 13 Rule 1 CPC, taking the additional documents on record.

10. The contention of the Review Petitioners is that in the first round, arguments had been heard only on the issue of maintainability and the judgment dated 03.02.2016 has not only decided the issue of maintainability but also on merits.

11. Since the order reserving judgment noted that arguments were heard on the issue of maintainability of the appeals, we have heard the arguments both on the review petitions as also on merits of the appeals to the extent it challenges order dated 22.09.2014 in IA No. 5416/2014 whereby the direction treating issues (i) and (ii) as preliminary issues was recalled and the said issues were directed to be decided along with other issues. So our judgment dated 03.02.2016, in these appeals, in so far as it holds (i) the appeals to be maintainable and (ii) dismisses the challenge to order dated 22.09.2014 in IA No. 19226/2013, being unchallenged is maintained and not being commented upon.

12. When issues were framed on 14.02.2014, the learned single judge after framing the issues passed the following order:

"2. Out of these issues, issue Nos. (i) and (ii) are the ===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

issues which can be decided without directing the parties to adduce evidence as preliminary issues. The learned senior counsel for the defendant Nos. 1 and 5 and the learned counsel for the defendant No. 2 state that they would like issue Nos. (i) and (ii) to be considered as preliminary issues. The learned senior counsel for the defendant Nos. 1 and 5 has stated that de hors the issues, his application under Order 7 Rule 11 CPC may be considered and similar prayer has been made by the learned counsel for defendant No. 2.

3. I have considered the submissions. So far as the consideration of the applications filed by the defendant Nos. 1 and 2 are concerned, the issues raised in the said application are covered by two preliminary issues in respect of which the case is being set down for hearing.

4. List the matter for hearing on the preliminary issues on 25.03.2014. All the pending applications shall also be considered on the next date of hearing."

13. On 14.02.2014, when issues were framed, the learned single judge, after hearing submission of the parties came to a conclusion that the issues (i) and (ii) were issues which could be decided without directing parties to adduce any evidence. The issues were treated as preliminary issues.

14. Issues (i) and (ii) framed on 14.02.2014 read as under:

"(i) Whether the suit as framed by the plaintiff is properly valued for the purpose of court fees?

===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

(ii) Whether the suit is liable to be rejected under Order 7 Rule 11(a) and (d) CPC?"

15. Order 14 rule 2 of the Code of Civil Procedure reads as under:

"2. Court to pronounce judgment on all issues (1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub-rule (2), pronounce judgment on all issues.

(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to--

(a) the jurisdiction of the Court, or

(b) a bar to the suit created by any law for the time being in force,

and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue."

16. Order 14 rule 2 CPC empowers the court to try an issue of law as a preliminary issue where the issue relates to jurisdiction of the court or relates to a bar to the suit created by any law, if, in the opinion of the court, the suit or any part thereof may be disposed of on

===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

such issue only.

17. On 14.02.2014, after hearing the parties, the learned Single Judge formed an opinion that issues (i) and (ii) were issues which could be decided without directing the parties to adduce evidence and treated them as preliminary issues. Issue (i) is with regard to valuation of the suit and the payment of court fees. Issue (ii) is whether the plaint is liable to be rejected under order 7 rule 11(a) & (d).

18. Order 7 rule 11 deals with rejection of Plaint. Sub rule (a) stipulates that the plaint shall be rejected where it does not disclose a cause of action and sub rule (d) stipulates rejection of the plaint where the suit appears from the statement in the plaint to be barred by any law.

19. Clearly if the said issues are decided in favour of the Appellants/Defendants, the suit can be disposed of.

20. By the impugned order, the learned single judge has modified the order dated 14.02.2014 to the extent that issues no. (i) and (ii) would not be treated as preliminary issues and would be decided along with other issues. The primary reason stated in the impugned order is that the order of the Supreme Court dated 23.04.2013 had to be given effect to. The contention of the respondent no. 1 that since the Supreme Court had directed the trial to be conducted and ===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

expedited the same implied that the suit had to proceed for trial under all circumstances was accepted by the learned Single Judge.

21. The learned senior counsel for the appellants contended that the said application was, in fact, an application seeking review of the order, whereby the court while framing issues had directed that the issues no. (i) and (ii) be treated as preliminary issues. In this circumstances, it is contended that the issues involved in the appeals is as to the jurisdiction of the learned Single Judge in passing the impugned order and reviewing the order dated 14.02.2014 and not placing the application before the same learned Judge who had passed the order.

22. The Supreme Court by order dated 23.04.2013 inter alia held "We expect the trial Judge to conclude the trial as expeditiously as may be possible and preferably within two years from the date of production of the order of this Court. The parties are directed not to seek unnecessary adjournments. Needless to say that observations made by the Division Bench in the impugned order concerned only consideration of the application made under Order VII Rule 11 of the Code of Civil Procedure, 1908 and these observations shall have no bearing in consideration of the pleas that may be raised by the petitioners-defendants in the written statement which obviously will be decided in accordance with law on the basis of evidence and the ===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

submissions that may be made at the time of hearing of the suit."

23. The order of the Supreme Court dated 23.04.2013, permitted the defendants to raise all issues in the written statement and directed that the trial be expedited. The direction of the Supreme Court that pleas that may be raised by the Appellants/defendants in the written statement would be decided in accordance with law on the basis of evidence and the submissions that may be made at the time of hearing of the suit, does not imply that the court has to necessarily undertake the process of the trial if the suit can be disposed of on a preliminary issue. The said direction does not imply that the trial has to be conducted irrespective of the fact that trial may not be necessary in the facts and circumstances of the case. In case the suit can be disposed on a preliminary issue, the court is not to necessarily set down the suit for trial merely because the trial in the suit has to be expedited. The direction that trial is expedited, would come into effect in case there is a requirement of trial and the suit is set down for it.

24. The Written Statements were filed and issues framed after the order of the Supreme Court. The learned Single Judge on the basis of the pleadings and submissions of the counsel framed the issues and formed an opinion that no evidence was required on issues (i) and (ii) and treated them as preliminary issues.

25. We are of the view that the learned Single Judge has erred in ===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &

allowing the said application and varying the direction of treating the issues (i) and (ii) as preliminary issues.

26. In view of the above, the impugned order dated 22.09.2014 to the said extent is set aside. Issues (i) and (ii) are treated as preliminary issues, as originally directed by order dated 14.02.2014. The pendency of the consideration of the said issues before the court does not entail that the proceedings of trial that have been set in motion are to be stalled. The trial shall proceed irrespective of the pendency of the decisions on Issues (i) and (ii). In the event, the court decides Issues (i) and (ii) in favour of the defendants, there would be no necessity of continuing with trial any further and the suit can be disposed of based on the decision of issues (i) and (ii).

27. Thus the appeals, in so far as they challenge order dated 22.09.2014 in IA No. 5416/2014 (under Order 14 Rule 5 CPC), varying the direction treating issues (i) and (ii) as preliminary issues, are allowed. I.A. No. 5416/2014 in CS(OS) 2064/2009 is dismissed. The Review Petitions are disposed of accordingly. The parties shall bear their own costs.

SANJEEV SACHDEVA, J.

March , 10 2017/HJ BADAR DURREZ AHMED, J.

===================================================================== FAO(OS) 457/2014 & Review Petition 102/2016 &