Madras High Court
Codeyco S.P.A vs V.K.Enterprises on 9 March, 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 09.03.2022
CORAM:
THE HON'BLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY
A.No.2866 of 2021
in
C.S.(Comm. Div) No.337 of 2020
Codeyco S.P.A.
Having registered office at:
Santa Croce sull'Arna,
Vicolo del Grano
Italy
Represented by its Authorized Signatory
Mr.Arun Janakiraman ... Applicant/Plaintiff
Vs.
1. V.K.Enterprises,
AL-111, 3rd Street, Anna Nagar,
Chennai-800 040
Also at,
No.18, 2nd Floor, Thiruneermalai Road,
Ngalkeni, Chrompet-600 044.
2. Saleem Shahul Meeran
Partner. V K Enterprises,
Having office at:
AL-111, 3rd Street, Anna Nagar,
Chennai-800 040
3. Reddy Laxma Bobbala
Partner, V K Enterprises
Having office at:
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1/8
AL-111, 3rd Street, Anna Nagar,
Chennai-800 40.
4. Vahida Banu
Partner, V K Enterprises,
Having office at:
AL-111, 3rd Street, Anna Nagar,
Chennai-800 040.
5. Karuna Devi,
Partner, V K Enterprises,
Having office at:
AL-111, 3rd Street, Anna Nagar,
Chennai-800 040. ... Respondents/Defendants
Prayer : This application is filed under Section XIV Rule 8 of O.S.Rules read
with Section 151 of the Code of Civil Procedure, 1908 praying to direct the
Respondents/Defendants to disclose by way of Affidavit the details of all the
assets, immovable and movable properties and / or shares owned by the
Respondents/Defendants, their Bank Account details/statements.
For Applicant : Ms.Deepika Murali
For Respondents : Mr.V.Kuberan for M/s.Rank Associates
ORDER
In a suit for recovery of a sum of Rs.2,04,80,180.40 along with
interest thereon at 18% p.a, the plaintiff has filed this application under
Section 151 of the Code of Civil Procedure 1908 (the CPC), seeking a
complete list of the assets of the respondents.
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2. The applicant asserts that the first defendant is a partnership firm
and that defendants 2 to 5 are the partners thereof. According to the
plaintiff, the written statement filed by the defendants does not satisfy the
requirements of the CPC as applicable to commercial disputes. On such basis,
the plaintiff asserts that the defendants do not have a valid defence to the
suit claim. The plaintiff further asserts that it reasonably apprehends that the
defendants would alienate, encumber or otherwise dispose of their assets and
frustrate the endeavour of the plaintiff to realize its dues. The present
application is filed in these facts and circumstances.
3. In order to establish that the plaintiff has a strong prima facie
case, the plaintiff refers to a sale agreement between the plaintiff and Kem
Finishes. The plaintiff also refers to several invoices raised between
22.02.2016 and 20.12.2017 by its predecessor-in-interest, Kemiter srl, on the
first defendant. The plaintiff draws reference to the e-mail correspondence
from it to the defendants seeking payment towards invoices and, in
particular, the plaintiff relies upon an e-mail of 24.10.2019 from Kem
Finishes India Private Limited.
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4. The plaintiff points out that goods were supplied to the first
defendant by its predecessor-in-interest, Kemiter srl, to the first defendant,
and that the first defendant was represented by the second and third
defendants for purposes of these transactions. It is stated that a merger took
place between the plaintiff and Kemiter srl, and that the plaintiff is the
resulting entity or transferee in the merger. Consequently, it is stated that
the receivables of Kemiter srl became the receivables of the plaintiff.
5.With regard to the maintainability of the application, the plaintiff
relies upon a judgment of the Hon'ble Supreme Court in Rahul S Shah v.
Jinendra Kumar Gandhi [2021 (4) KHC 148 (SC)] (Rahul S.Shah). In particular,
the plaintiff relies upon paragraph 42 (9) of the order of the Hon'ble Supreme
Court, wherein it was held as follows:
“In a suit for payment of money, before
settlement of issues, the defendant may be required
to disclose his assets on oath, to the extent that he is
being liable in a suit. The Court may further, at any
stage, in appropriate cases during the pendency of the
suit, using powers under Section 151 CPC, demand
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security to ensure satisfaction of any decree.”
The plaintiff also points out that the above judgment of the Hon'ble Supreme
Court was followed in two subsequent cases by the Hon'ble Kerala High Court.
6. The defendants refute the above contentions and raise several
objections to the application. The first objection is on the ground of
misjoinder of parties. The defendants assert that neither the second nor third
defendant are partners of the first defendant. Therefore, it is contended
that a joint and several decree cannot be prayed for against the second and
third defendants. The second objection is on the ground that there is no
privity of contract between the first defendant and the plaintiff. All the
invoices on which the suit claim is founded were issued by Kemiter srl.
According to the defendants, the plaintiff has failed to produce sufficient
evidence to establish that it is entitled to step into the shoes of Kemiter srl
and maintain the suit. The third objection is on the ground of limitation. The
defendants contend that the plea of limitation was expressly raised in
paragraph 10 of the written statement filed by defendants 1, 4 and 5. With
specific reference to paragraph 10 of such written statement, the defendants
contend that it was stated therein that several of the invoices are barred by
limitation. In addition, the plaintiff's assertion that there was a running
account between the parties was
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expressly denied. In light of these
objections, the defendants contend that the plaintiff has failed to establish
the primary requirement under Order XXXVIII Rule 5 of CPC of establishing a
strong prima facie case. Consequently, it is contended that the present
application is a roving inquiry, which is untenable at the pre-decree stage.
7. Upon considering the submissions of parties, the first question
that arises for consideration is with regard to the maintainability of the
application. The sheet anchor of the plaintiff's case is the judgment of the
Hon'ble Supreme Court in Rahul S Shah. In Paragraph 42(9) thereof, which
was relied upon by the plaintiff, the Supreme Court held that “the defendant
may be required to disclose his assets on oath to the extent that he is being
liable in a suit”. Two aspects are noticeable: first, the liability should be
established prima facie; secondly, it is discretionary. Therefore, the question
to be examined is whether this is an appropriate case for exercise of such
discretion.
8. As indicated above, the defendants have raised several defences
and the defence of limitation is of particular significance. The defendants
contended that the invoices were raised on dates extending from 22.02.2016
to 20.12.2017, and that several of the claims arising therefrom are barred by
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limitation. This contention merits consideration and cannot be brushed aside.
In addition, the defendants have raised the issue of misjoinder of parties with
specific reference to defendants 2 and 3 on the ground that they are not
partners of the first defendant with whom the relevant transactions took
place. This contention is also not baseless. While the defendants also contend
that the suit is not maintainable at the instance of Codeyco S.P.A., it appears
prima facie that Kemiter srl merged with Codeyco S.P.A. However, no
definitive conclusions can be drawn at this juncture on this issue and the
plaintiff would be required to adduce evidence in course of trial.
9. In view of the multiple defences raised by the defendants, which
cannot be disregarded as baseless and go to the root of the matter, this is not
an appropriate case for the exercise of discretion, at this juncture, to direct
the defendants to disclose assets. Therefore, A.No.2866 of 1021 is dismissed
without any order as to costs.
09.03.2022
Index : Yes
kal
https://www.mhc.tn.gov.in/judis
SENTHILKUMAR RAMAMOORTHY J.,
kal
A.No.2866 of 2021
in
C.S.(Comm. Div) No.337 of 2020
09.03.2022
(½)
https://www.mhc.tn.gov.in/judis
