M/S Kotak Securities Limited vs Smt. Sangeeta Gupta
2022 Latest Caselaw 4933 MP

                                   01

     IN THE HIGH COURT OF MADHYA PRADESH
                  AT GWALIOR ..
                          BEFORE
             HON'BLE SMT. JUSTICE SUNITA YADAV

                  ON THE 6th OF APRIL, 2022

                FIRST APPEAL No. 85 of 2014

 Between:-
  M/S KOTAK SECURITIES LIMITED
  MANAGER MR. KUNAL KOTHARI
  27 BKC C-27, G BLOCK BANDRA
  KURLA COMPLEX BANDRA EAST,
  MUMBAI (MAHARASHTRA)
                                                .....APPELLANT
 (BY SHRI ABHISHEK SINGH BHADOURIA, ADVOCATE)

 AND

   SMT. SANGEETA GUPTA W/O SHRI
   MAHESH KUMAR , AGED ABOUT 44
   YEARS, OCCUPATION: HOUSEWIFE
   INFRONT OF PURUSHOTTAM DAS
1.
   AGARWAL BHAWAN DAS SHOE
   COMPANY DAHI MANDI,DAULA
   (MADHYA PRADESH)

   MAHESH KUMAR GUPTA S/O SHRI
   RAJ KUMAR GUPTA 169/2,NEW
   COLONY BIRLA NAGAR,GWALIOR
2. AT      PRST.DAHI    MANDI
   DAULATGANJ,LASHKAR (MADHYA
   PRADESH)

   AUTHORISED MANOJ AGRAWAL
   M/S KOTAK SECURITY LTD. DAL
3. BAZAR     TIRAHA   LASHKAR
   (MADHYA PRADESH)

   BRANCH MANAGER LAXMI BAI
   MAHILA NAGRIK SAHAKARI BANK
4. KAMPOO         ROAD,LASHKAR
   (MADHYA PRADESH)

   BRANCH   MANAGER    GWALIOR
   CITIZEN   SAKH   SAHAKARITA
5. MARYADIT BELOW OF GWALIOR
   KAMBAL KENDRA,NAYA BAZAR
   LASHKAR (MADHYA PRADESH)
                                              .....RESPONDENTS
                                         02

  (BY SHRI R.K. SONI, ADVOCATE FOR RESPONDENTS NO.1 AND 2)

This appeal coming on for hearing this day, the court passed the

following:

                          JUDGMENT

The present appeal under Section 96 of the Code of Civil

Procedure is preferred by the appellant against the judgment and

decree dated 25/09/2013 passed by IInd Additional District Judge,

Gwalior (M.P.) in Civil Suit No.15-A/2012 whereby the civil suit

filed by respondents No.1 and 2 for declaration and refund of amount

of shares is decreed.

The facts in brief to decide the present appeal are that the

plaintiff/ respondent no. 1 and 2 filed the present suit stating therein

that they were having Demat bearing account No.11121826 with the

appellants and some shares were purchased in the above said account

without obtaining written instructions from the plaintiffs/respondents.

It was further alleged that the appellants/defendants informed the

respondents No.1 and 2/plaintiffs that their shares had been sold by

them by an amount of Rs.85,837/-. However, the amount was not

received by the respondents No.1 and 2/plaintiffs. It was further

pleaded that the respondents No.1 and 2/plaintiffs had filed a

complaint under Section 12 of the Consumer Protection Act before

the District Consumer Forum, Gwalior and the same was registered as

Case No.217/2010. and the same was dismissed by the Consumer

Forum, Gwalior vide order dated 27/09/2010 as time barred.

The appellant/defendant No.1 as well as respondents No.3, 4

and 5 were proceeded as ex-parte. Respondents No.5/defendant No.4

submitted his written statement and pleaded that the suit was time

barred and the plaintiffs did not paid the Court fee in accordance with

law and prayed to dismiss the suit.

The trial Court framed the issues and recorded the evidence of

Mahesh Kumar Gupta (PW-1) and Purushottam Das Agrawal (PW-2)

and decreed the suit in favour of plaintiffs by the judgment and decree

impugned.

Learned counsel for the appellants has argued that the trial

Court committed grave error in passing the impugned judgment and

decree without examining the actual facts and circumstances of the

case and the trial Court ignored the issue of limitation. He has further

submitted that the respondent No.1/plaintiff No.1 who is the account

holder was not examined as witness before the trial Court. Therefore,

adverse inference should be drawn against the plaintiffs. Despite

being the documents filed by the plaintiffs were incomplete and the

relevant document were not filed by the plaintiffs the trial court

illegally decreed the suit. The trial Court has not even considered the

contents of the documents. Therefore, prays to set aside the impugned

judgment and decree passed by the trial Court.

On the other hand, learned counsel for respondents No.1 and 2

has argued that the impugned judgment and decree is passed in

accordance with law. He has further argued that the trial Court has

considered the oral as well as documentary evidence and passed the

judgment in accordance with law that is not be interfered.

Heard learned counsel for the parties on I.A.No.1141/2018 an

application under Order 41 Rule 27 filed by the appellant for taking

documents as additional evidence on record as well as on merits of

the case and perused the material available on record.

I.A.No.1141/2018, for taking additional evidence/documents on

record is filed stating therein that the documents Annexure A/1 which

is the agreement between the respondents and the appellant, Annexure

A/2 which is the reply filed by the appellant before National Stock

Exchange and the copy of the bank cheque showing details along-

with ledger account details in respect to the amount deposited in the

account of respondents, are of paramount importance for the

adjudication of the dispute. The appellant never got an opportunity to

bring these documents on record as he was proceeded ex-parte before

the trial Court. The documents are undisputed and necessary to fairly

adjudicate the dispute between the parties. Therefore, they may be

taken on record.

On perusal of the aforementioned documents, it appears that

they are necessary and relevant to adjudicate the dispute between the

parties. The decision of Hon'ble Supreme Court in the case of Sanjay

Kumar Singh Vs. State of Jharkhand [2022 SCC Online SC 292]

held that "the appellate court may permit additional evidence, where

the additional evidence sought to be adduced removes the cloud of

doubt over the case and the evidence has a direct and important

bearing on the main issue in the suit and interest of justice clearly

renders it imperative that it may be allowed to be permitted on

record, such application may be allowed. Even, one of the

circumstances in which the production of additional evidence under

Order 41 Rule 27 CPC by the appellate court is to be considered is,

whether or not the appellate court requires the additional evidence so

as to enable it to pronouncement judgment or for any other

substantial cause of like nature. As observed and held by this Court in

the case of A.Andisamy Chettiar v.A.Subburaj Chettiar, reported in

(2015) 17 SCC 713, the admissibility of additional evidence does not

depend upon the relevancy to the issue on hand, or on the fact,

whether the applicant had an opportunity for adducing such evidence

at an earlier stage or not, but it depends upon whether or not the

appellate court requires the evidence sought to be adduced to enable

it to pronounce judgment or for any other substantial cause. It is

further observed that the true test, therefore, is, whether the appellate

court is able to pronounce judgment on the materials before it without

taking into consideration the additional evidence sought to be

adduced."

In the present case, since the documents are not disputed by the

respondents, therefore, no additional evidence is required to prove

them. Consequently, in the light of the law laid down in the cases

cited as above, I.A.No.1141/2018 is allowed and the documents are

taken on record.

Learned counsel for the respondents vehemently argued that

the defendants No.1 and 2 sold the shares in dispute, contrary to the

terms and conditions of the agreement between the

appellant/defendant and the respondent no. 1 and 2, without prior

written permission. However, the said agreement in which the terms

and conditions are defined was not filed by the plaintiff before the

trial Court. Surprisingly, without even going though the document,

the trial Court reached the conclusion that prior written permission is

required for selling the shares. The perusal of the agreement

(Annexure A-1) which was filed with the application under Order 41

Rule 27 of CPC reveals that as per its clause six, written permissions

are not required for carrying out the business and instructions may be

issued telephonically. The plaintiff-Sangeeta has not been examined

as a witness to prove her case even after filing the affidavit of

examination in chief under Order 18 rule 4 of CPC. The trial court

decreed the suit without having gone through the documents filed on

behalf of her which were incomplete as well.

The perusal of the document Exhibit P/18, reveals that the

Cheque No.978579, amounting Rs.85,837.03/- was issued in favour

of respondent No.1/plaintiff-Sangeeta Gupta by the appellant herein.

It is also apparent that the seal of Laxmi Bai Mahila Nagrik Sahkari

Bank Maryadit, Gwalior is there on the said cheque. The letter of

HDFC Bank Limited dated 12/06/2008 (Exhibit P/19) also reveals

that the said bank in response to query raised by the appellant

informed that bearing Cheque No.978579 amounting Rs.85,837.03/-

was presented by Laxmi Bai Mahila Nagrik Sahkari Bank Maryadit,

Gwalior which was paid on 26/05/2005. The aforementioned

documents Exhibit P-18 and Exhibit P-19 and the content therein

reveal that the appellant had issued the printed cheque bearing no.

978579 dated 20.5.05 drawn of HDFC Bank in favour respondent no.-

1/ plaintiff and the said cheque was cleared and therefore, the fault on

the part of the appellant is not proved and he cannot be held

responsible for alleged non payment as the liability of the appellant

extinguish once the cheque was honoured.

The perusal of the record also reveals that the documents

(Exhibit P/22 dated 13/05/2008) filed by the respondents No.1 and

2/plaintiffs was incomplete and despite being incomplete it was

exhibited by the trial Court. Therefore, it is apparent that the trial

Court has not considered the contents of the documents and passed

the judgment and decree impugned.

It is not disputed that before filing this civil suit, the

respondents No.1 and 2/plaintiffs had filed a complaint under Section

12 of Consumer Protection Act before the District Consumer Forum,

Gwalior and the same was registered as Case No. 217/2010 and the

same was dismissed by the Consumer Forum Gwalior as time barred.

The respondents/plaintiffs have not challenged the findings of the

District Consumer Forum, Gwalior before the competent authority

which is the State Consumer Forum instead filed this civil suit. In

the case of AIR 1969 (Supreme Court 78), the Apex Court held that

"Where the statute gives a finality to the orders of the special

tribunals the civil Courts' jurisdiction must be held to be excluded if

there is adequate remedy to do what the civil court would normally

do in a suit."

The documents filed by the plaintiffs Exhibit P-22 reveals that

it is the letter by the appellant dated 13.5.2008. However, this

document is incomplete as the rest of the pages are missing. The

appellant herein filed the complete document along with the

application under Order 41 rule 27 which is Annexure A-2. The

content of Annexure A-2 goes to show that the respondent

No.1/plaintiff-Sangeeta Gupta had purchased ten shares of ITC on

30/05/2005 but had not paid for the same instead she had sold shares

of Centurion Bank of Punjab and few shares of ITC. It is also

apparent that all the contracts notes and quarterly statements were

regularly sent to her. It is also mentioned in the letter that plaintiff-

Sangeeta Gupta had never raised any objection on the trades

contained therein. In fact, she vide her letter dated 08/10/2005 had

signed ledger balance confirmation and confirmed the ledger balance

of Rs.499.99/-. Therefore, it is apparent that the cause of action had

already arisen in the year 2005. However, the suit is filed in the year

2011 which is barred by limitation under the provisions of Article 24

of Limitation Act because the limitation had already been expired in

the year 2008.

The perusal of agreement (Annexure A-1) reveals that the

Clause 32 of the agreement between the parties declares that any

dispute, claim or differences arising between the parties is subject to

the grievance redress mechanism of the concerned exchange and shall

be subject to the arbitration procedure as prescribed by the applicable

Exchange provisions. Consequently, this suit is not found to be

maintainable in view of the aforesaid arbitration clause. In the case of

Choloro Controls India Pvt Ltd (Supra) the Apex Court held to the

extent that even third party or the non signatory to a subsidiary

agreement and not to the principal agreement can be referred to

arbitration and if the arbitration clause is valid, the suit filed for

declaration injunction is unsustainable in law and the suit is liable to

be dismissed.

Learned counsel for the respondents has raised the objection

that since the application of the appellant/defendant to set aside the

ex-parte judgment and decree is already pending; therefore, this

appeal is not maintainable. However, the above argument is not

sustainable as the Apex Court in the case of Smt. Archana Kumar &

Anr. Vs. Purendu Prakash Mukherjee & Anr. [2000(2) JLJ 84]

held that the first appeal challenging the ex-parte decree under

Section 96(2) of CPC is maintainable even after application under

Order 9 Rule 13 of CPC for setting aside ex-parte decree was

dismissed. It is further observed by the Apex Court that the

proceeding under Order 9 Rule 13 of CPC and regular appeal can

simultaneously be prosecuted.

Consequently, in view of the above discussion as herein above,

the judgment and decree impugned is found to be perverse and

contrary to the facts and law. Therefore, the appeal is allowed and the

impugned judgment and decree is set aside.

(Sunita Yadav) Judge Monika

MONIKA SHARMA 2022.04.13 16:29:42 +05'30'