Vipul Gupta & Ors. vs Robin Gupta & Ors.
2017 Latest Caselaw 5438 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                     Judgment delivered on: 26.09.2017
+      CS(OS) 281/2011

VIPUL GUPTA & ORS                                             ..... Plaintiffs

                          versus

ROBIN GUPTA & ORS                                           ..... Defendants

Advocates who appeared in this case:
For the Plaintiff         :        Mr. Raj Shekhar Rao, Mr. Atul
                                   Sharma, Mr. Nitesh Jain and Ms.
                                   Yamini Khurana, Advs.
For the Defendants        :        Mr. Anupam Srivastava and Mr.
                                   Arjun Saxena, Advs.

CORAM:
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
                              JUDGMENT

26.09.2017

SANJEEV SACHDEVA, J. (ORAL)

I.A. No. 13901/2016 (for condonation of delay) This is an application on behalf of defendant seeking condonation of delay in filing reply to O.A. 126/2016.

For the reasons stated in the application, the application is allowed. Reply is taken on record.

The application is disposed of.

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OA No.126/2016

1. This is a Chamber Appeal, filed by the plaintiffs, impugning order dated 16.05.2016, passed by the Joint Registrar on an application (IA No.3736/2016), filed by the defendants under Order XI Rules 12 & 14 of the Code of Civil Procedure, whereby the joint registrar has directed the plaintiff to produce on oath the documents asked for in paragraph 5 of the application.

2. For the sake of completeness, the documents sought for in the paragraph 5 are extracted herein below:-

a) Copies of tax returns and bank statements of all bank accounts of Mr. Vipul Gupta and Mrs. Monisha Gupta in India, USA and other country(ies), since 1995 to 2010 filed by them;

b) Copies of balance sheets filed by Mr. Vipul Gupta and Mrs. Monisha Gupta, since 1995 to 2010.

3. By the impugned order, the Joint Registrar has held that the documents are relevant to show whether there is a misappropriation or siphoning off the funds and assets of the plaintiff. The Joint Registrar was of the view that the documents are capable of throwing light on the controversy.

4. The Plaintiffs by the present Suit seeks a decree against the defendants for payment of a sum of Rs.2 crores as damages on ==========================================================

account of a defamatory statement made by the defendants and a further restraint on the defendants from making defamatory allegations against the plaintiffs.

5. As per the plaint, the defendants have made defamatory allegations against the plaintiffs with regard to siphoning off the funds from Company named Sunair Hotels Ltd. and investing in the properties abroad.

6. The alleged defamatory paragraph, as per the plaintiff, is an averment made by the defendants in the Company Petition being CP 35(ND) of 2010, filed by the defendants against the plaintiffs, wherein, in paragraph 6.19 it is contended as under:-

"6.19 A list of properties acquired after 1995 i.e. after Sunair Hotel became operative and was solely under the direct control of respondents with details and the description of the property along with its location, measurement, date of acquisition as well as the approximate value is enumerated hereunder:

Properties purchased by Mr. xxxx & Mr. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Gupta Vipul & Monisha 4 Bedrooms, Year built 1974 786 PEARLWOOD WAY Area: 1968 sq. ft.

SAN JOSE OA 95123 Seller: Sanchez Jr. Domingo Date: 04/25/2005 Value: $ 721,500

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It is further pertinent to mention that the respondent no. 2 (Mr S P Gupta father of Mr Vipul Gupta, Plaintiff No.1) has also acquired other properties in India and abroad. It is pertinent to mention that till the year 1995 the respondent no. 2 did not have adequate means to acquire any properties. It is preliminary and wholly after 1995 when the respondent no. 2 got the absolute possession of the Sunair Hotels. That the respondent no. 2 slowly and gradually over the periods siphoned off the funds from the accounts of the respondent no. 1 company (Sunair Hotels Ltd). It is pertinent to note that while the three bedroom apartment at College Viiie, USA has been acquired by Vipul Gupta in April, 2004, the four bedroom apartment in San Jose OA has been acquired in year 2005, the said acquisition substantiates the fact that the respondent no. 2 in collusion with the other respondents has been siphoning funds and investing in properties abroad."

7. It is pertinent to note that the defendants had earlier also filed an application being IA 6583/2013 (under Order XI rule 12) seeking a direction to the plaintiff to produce several documents including the above referred documents.

8. By order dated 02.12.2013, the Joint Registrar had allowed the application and directed the plaintiffs to produce the documents. However, on a Chamber Appeal filed by the plaintiffs, by order dated 03.03.2016, this Court had allowed the Chamber Appeal of the plaintiffs with regard to the said documents on the ground that the defendants had not pleaded a cause of action as to why the said documents were relevant to the matters in question. The defendants ==========================================================

were given liberty to file a fresh application making out a clear and correct cause of action for the directions to be issued with regard to the said documents.

9. Consequent to the liberty granted, the defendant filed the subject application being IA 3736/2016 averring as under:-

"6. That the above mentioned documents are in the possession of the Plaintiffs and the other Respondents, and have not been filed on record by the Plaintiffs. It is submitted that the document mentioned in point a) in para 5 above will elucidate the financial transactions undertaken by Mr. Vipul Gupta and Mrs. Monisha Gupta from 1995 - 2010 and aid to prove the misappropriation as alleged by the Defendants. It is reverently submitted that the Plaintiffs, before the Hon'ble Company Law Board, did not have did not have the adequate means to acquire any properties till 1995 and that the same will be evidenced through the documents, sought for by the Defendant.

7. That it is submitted that the Plaintiffs in collusion with the other Respondents, acquired complete control and possession of M/s Sunair Hotel Limited in 1995 and slowly & gradually siphoned off the funds from M/s Sunair Hotel Ltd., by virtue of which siphoning, the Plaintiffs purchased a property in San Jose CA in the year 1974. It is so submitted that the document mentioned in point b) in para 5 above i.e. the balance sheet will explicitly reveal the existence of such and any other real estate owned by Mr. Vipul Gupta and Mrs. Monisha Gupta, on the asset side, which will furthermore aid to prove the existence of properties owned and purchased by them in the USA.

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8. That the above mentioned documents are pertinent to prove the misappropriation and siphoning of funds and assets undertaken by the Plaintiffs. It is submitted that the above mentioned documents are in the continuous custody and possession of the Plaintiffs and the same are not produced by them, as they are capable of shedding light on the controversy at hand and that the Defendants will be incapable of proving the same without the aid and support of the documents, as mentioned.

9. That the above mentioned documents are integral for adjudicating the dissension in the present suit. Further, the said documents are in possession of the Plaintiff and therefore, there is no alternative remedy for the production of the same, except the present Application."

10. It is the case of the defendant that the plaintiffs have siphoned off funds from a Company called Sunair Hotels Ltd. and from the said funds purchased a property in the United States. It is contended that the said documents are relevant to establish that there was siphoning of the funds and purchase of the property in the United States of America.

11. Learned counsel for the appellant has contended that the defendant have filed this application to make a roving and fishing enquiry and the said documents are not relevant for the purposes of fully and completely adjudication of the suit.

12. It is contended that the suit pertains to a defamatory statement

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made by the defendants and the defence of the defendants is that the statement made was true and, as such, "truth" has been pleaded as a defence to the defamatory statement.

13. On the pleadings of the parties, the following issues were framed on 08.11.2011:

"1. Whether the defendants have defamed the plaintiffs by making defamatory averments in CP 350(ND) of 2010, by writing letters to Sh. Rashid Alvi, Member of Parliament and by publically making defamatory allegations against them, as alleged in the plaint? (OPP)

2. If Issue No.1 is proved, whether the plaintiffs are entitled to damages, and if so, from whom and what amount? (OPP)

3. Relief"

14. Perusal of the pleadings as well as the issues framed shows that the issue, in the present case, is as to whether the statements made by the defendants are defamatory or not.

15. The defendants have contended that the plaintiffs have siphoned off the funds from M/s. Sunair Hotels Ltd. The defendant, by the subject application is seeking for production of the income tax returns, bank statement of all accounts of the plaintiffs in India, United States of America and other countries since 1995 to 2010 as well as balance sheets filed by them since 1995 to 2010.

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16. Since the allegation of the defendant is that the plaintiff has siphoned off the funds from M/s. Sunair Hotels Ltd., what would be relevant would be the documents and the financials of M/s. Sunair Hotels Ltd.

17. It is an admitted position that the defendant has already filed a Company Petition with regard to the said Company. The defendants contend to be the shareholders in M/s. Sunair Hotels Ltd. and thus would have all the rights that are available to a shareholder, under the Companies Act, with regard to obtaining copies and inspection of the financials of M/s. Sunair Hotels Ltd. as are available.

18. The defence of the defendant is that the statement made by the defendant is true to their knowledge. If a party pleads truth as a defence then the party has to show that when the statement was made there were facts and circumstances in the knowledge of the party by which the party was aware that the statement which the party was making was true or there was a reasonable belief based on the material and information then available that whatever was being stated was true.

19. The statement was made in the year 2010. So if the defence of the defendant is "truth" then what would be relevant would be material and evidence within the knowledge of the defendants at the relevant point of time i.e. in the year 2010, when the statement was

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made, and not material and evidence which the defendants would subsequently procure by way of an application under Order 11 Rule

21.

20. The Income Tax Returns, Bank Statements and the copies of the balance sheets of the plaintiffs, which are being sought for by the defendant, clearly were not within the knowledge of the defendants in the year 2010. So the said documents cannot form the basis of the knowledge of the defendant at the relevant point of time when such a statement was made.

21. Material and information derived from the documents, production of which is sought, cannot enure to the benefit of the defendant and cannot amount to information within the knowledge of the defendant to establish that the statement when made in 2010 was true to the knowledge of the defendants derived from some evidence and material.

22. The other contention of the defendant is that there is information available that a property had been purchased in United States of America by the plaintiffs. This contention has been denied by the plaintiffs that they own any property in the United States. It is, on the other hand, contended that the documents produced by the defendant shows that the property is owned by one Mr. Vipul Gupta and Ms. Manisha Gupta and the plaintiffs are Mr. Vipul Gupta and

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Ms. Monisha Gupta. It is contended that the defendant, while relying on the said documents, has altered the name Ms. Manisha Gupta (appearing therein) to read as 'Monisha Gupta' so as to show similarity between the names of the plaintiffs. It is contended that the plaintiffs have no concern with any such property in the United States.

23. On perusal of the pleadings as well as the documents sought, it is clear that the defendant is seeking to make a roving and fishing enquiry into the personal records of the plaintiffs which are not relevant or material for the purpose of adjudicating the issues at hand.

24. The Judgment relied on by the learned counsel for the defendant in the case of SHRI M.L. SETHI VS. SHRI R.P. KAPUR: (1972) 2 SCC 427 as well as the judgment of a coordinate Bench dated 08.01.2010 in CS(OS) 2079/2006 titled HARISH N. SALVE & ANR. VS. SPIRITUAL REGENERATION MOVEMENT FOUNDATION OF

INDIA do not advance the case of the defendants.

25. On the contrary, the said judgments also emphasise the fact that for an order to be passed under Order 11 Rule 12 of the Code of Civil Procedure the Court is to be satisfied that the documents in question are relevant for the proper adjudication of the matter involved in the Suit and such provision is not intended to enable a party to cause a roving and fishing enquiry to fish out information relevant for the disposal of the suit. The provisions are not to be utilized for harassing

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the other party but are for the purpose of helping the Court in proper adjudication of the disputes in the case.

26. Issues in the Suit were framed on 08.11.2011. The affidavit of the plaintiff's witness was tendered on 03.09.2012. Since the year 2012 till date five years have elapsed without the trial progressing, merely on the defendant moving one discovery application after the other. A period of five years has been spent merely on seeking production of documents which are not relevant for the adjudication of the disputes at hand.

27. In my view, the learned Joint Registrar has erred in holding that the documents are relevant for the purposes of adjudication of the disputes between the parties. The said documents are not relevant for the adjudication of the disputes. The defendant is seeking to make a roving and fishing enquiry into the financial records of the plaintiffs.

28. In view of the above, the impugned order dated 16.05.2016 is, set aside. IA No.3736/2016, filed by the defendants, is dismissed.

29. The Chamber Appeal is allowed. There shall be no order as to cost.

SANJEEV SACHDEVA, J SEPTEMBER 26, 2017 st

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