Sikkim High Court
M.K. Trivedi vs Ramesh Sharma on 2 May, 2022
Bench: Bhaskar Raj Pradhan
1
Mr. M. K. Trivedi vs. Mr. Ramesh Sharma
R.F.A. No. 05 of 2018
THE HIGH COURT OF SIKKIM: GANGTOK
(Civil Appellate Jurisdiction)
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SINGLE BENCH: HON'BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE
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R.F.A. No. 05 of 2018
Mr. M. K. Trivedi,
S/o Late Pandit Ramagya Trivedi,
R/o Singtam Bazar,
P.O. & P.S. Singtam, East Sikkim.
..... Appellant/plaintiff
Versus
Mr. Ramesh Sharma,
S/o Shri Pasupati Sharma Chalisey,
R/o Linkey Busty,
P.O. Linkey, Pakyong, East Sikkim
..... Respondent/defendant
Appeal under Order XLI, Rules 1 and 2 of the Code of Civil
Procedure, 1908.
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Appearance:
Mr. A. K. Upadhyaya, Senior Advocate with Ms. Rachhitta
Rai, Advocate for the Appellant/Plaintiff.
Mr. S. S. Hamal, Mr. Leada T. Bhutia and Ms. Sabina
Chettri, Advocates for the Respondent/Defendant.
Date of hearing : 25.04.2022
Date of Judgment : 02.05.2022
JUDGMENT
Bhaskar Raj Pradhan, J.
1. This is a regular first appeal filed by the plaintiff
against the judgment dated 31.08.2018 (impugned
judgment) in Money Suit No. 17 of 2015 (the suit) passed
by the learned District Judge, Special Division-I, East
Sikkim at Gangtok (the learned District Judge) deciding all
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
the issues against the plaintiff and rejecting the relief
sought for.
2. The plaint filed by the plaintiff essentially alleges that
the defendant who was a Branch Manager of Religare
Securities Private Limited (Religare), a trading company,
persuaded the plaintiff to trade his shares after opening a
demat account with Religare and transferring his equities
and commodities lying with Reliance Securities and Sushil
Finance to Religare. Certain details of monetary
transactions was alleged but without any substantial proof
thereof. It was the case of the plaintiff that thereafter, on
23.01.2015 the defendant finally agreed to return an
amount of Rs. 35 lakhs including accrued interest by
executing a memorandum of understanding (exhibit-6) and
a money receipt (exhibit-5). The plaintiff thus sought for a
decree of Rs.35 lakhs against the defendant with 10%
interest thereon.
3. The defendant filed his written statement admitting
that he was employed by Religare as Branch Manager of
the Gangtok Branch; that he worked in Religare from
07.12.2007 till 05.05.2011. He stated that Religare used to
facilitate its clients inclined to invest their money by
suggesting purchase of shares of certain companies. He
denied that he had convinced the plaintiff to open a demat
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
account with Religare or invest in shares as alleged by the
plaintiff. The defendant stated that the plaintiff had himself
visited the Religare office to open the account through the
sales team. He denied any knowledge of the deposit made
by the plaintiff with Religare. He denied that he had
influenced the plaintiff to transfer all his equities and
commodities from Reliance Securities and Sushil Finance
to open a single portfolio with Religare. He stated that the
plaintiff had prior experience in trading in shares as he was
doing so with Reliance Securities and Sushil Finance before
he started trading with Religare. He denied that he had
cheated the plaintiff. He stated that in the trading platform
every monetary transaction is done through direct bank
payment system and whenever a client purchases shares,
they deliver account payable cheques in the name of the
company and the payout is directly through RTGS in the
bank account of the client. The defendant also denied that
the plaintiff sold part of his shares valued at Rs.2,28,762/-
on 16.12.2009 and thereafter further shares valued at
Rs.7,34,723/- on 27.12.2009 on being asked by him. The
defendant further denied that he had advised and
purchased gold and silver from the money he had obtained
from sale of the plaintiff's shares. He denied that he had
assured the plaintiff that he would earn profits on his
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
trading through Nirmal Bang Securities Limited (Nirmal) or
guaranteed the principal invested would be refunded with
all profits. The defendant stated that the plaintiff had
approached the defendant to advice him in respect of
investment in share market through Nirmal. The defendant
stated that the memorandum of understanding had no
sanctity and was not enforceable as the plaintiff himself did
not desire to pursue the memorandum of understanding.
The defendant had denied that he had embezzled any
amount of the plaintiff. He stated that the plaintiff had
suffered losses due to his own speculations and with the
connivance of one S.B. Subba pressurized the defendant to
sign on the money/share receipt as well as the
memorandum of understanding. He denied that he had, on
23.01.2015, agreed to return Rs.35 lakhs along with the
interest thereon within six months of the memorandum of
understanding. He stated that the memorandum of
understanding and the money receipt were executed by the
defendant on immense pressure, force, coercion and undue
influence. It was stated that the defendant was arrested by
sadar police on 07.01.2015 in Sadar P.S. Case No.08/2015
under section 420/406 of Indian Penal Code, 1860 (IPC) on
the false complaint of Mr. S.B. Subba and he was released
on bail on 09.01.2015. The defendant pleaded that
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
stringent condition was imposed on him and the plaintiff
taking advantage of it blackmailed him by firstly lodging
the complaint and thereafter making him sign the
memorandum of understanding under coercion. He prayed
for dismissal of the suit.
4. The plaintiff examined himself, Shashi Shashank
Trivedi, Shambu Kumar Ray, Rajeev Ranjan Trivedi and
Abhimanyu Tiwarey. The defendant examined himself and
Dharni Sharma.
5. The learned District Judge examined the issues
whether the plaintiff was entitled to recover a sum of Rs.35
lakhs from the defendant; whether the memorandum of
understanding dated 23.01.2015 was executed between the
plaintiff and the defendant and whether the money/share
receipt dated 23.01.2015 was executed by the defendant in
great detail. He concluded that the plaintiff's claim was not
supported by any documentary proof. He further doubted
the manner in which the money receipt and the
memorandum of understanding got to be signed. He held
that the witnesses to the money receipt and the
memorandum of understanding had not identified their
signatures thereon. He noted the conflicting stand taken by
the plaintiff and his witnesses. He held that the plaintiff's
witnesses Rajeev Ranjan Trivedi and Abhimanyu Tiwari
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
have themselves belied the claim of the plaintiff regarding
the execution of the memorandum of understanding. The
learned District Judge held that the money receipt and the
memorandum of understanding have no sanctity and
therefore of no consequence. Thus, the learned District
Judge held that the plaintiff was not entitled to recover
Rs.35 lakhs from the defendant.
6. Heard the learned Counsel for the parties. Mr. A. K.
Upadhyaya, learned Senior Counsel for the plaintiff who is
in appeal before this court submitted that the entire suit is
based on the money receipt and memorandum of
understanding which documents have not been denied by
the defendants. Mr. S. S. Hamal, learned Counsel on the
other hand submitted that the plaintiff had failed to
establish his case.
7. A perusal of the written statement does indicate that
there had been interactions between the plaintiff and the
defendant and there had been some dealings. However, it
is seen that none of the documents produced by the
plaintiff and exhibited establishes his case. Exhibit-1
reflects the plaintiff's transactions in Nirmal. Exhibit-2 is
once again the statement of holding of the plaintiff in
Religare. Exhibit-3, which has not been proved in the
manner required, purports to be declaration by the
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
defendant stating that he had purchased from one Pasupati
Sharma and deposited the demand draft of Rs.1 lakh for
the plaintiff as short margin payment. Exhibit-4 purports
to be a correspondence between the plaintiff and Nirmal for
closure of his account alleging that the defendant had
failed to release the required sums of money. Exhibit-4
however, was also not proved in the manner required. The
certified copies of the money receipt and memorandum of
understanding, although exhibited, were not proved. In
fact, the records reveal that the plaintiff had not even
identified his signature in the memorandum of
understanding leave alone identifying the signature of the
defendant and the witnesses. Similarly, the plaintiff
exhibited the money receipt but did not identify the
signature or the handwriting therein. None of the witnesses
to the memorandum of understanding or the money receipt
also identified their signatures thereon. In cross-
examination the plaintiff admitted that he had no
documentary proof to substantiate the allegations he had
made against the defendant. He admitted that he used to
purchase shares of different companies. He admitted that
he had not made any complaint before any authority after
06.08.2012 till 23.01.2015. He denied the suggestion that
he had forced the defendant to put his signature on the
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
money receipt and the memorandum of understanding. He
admitted that the witnesses to the money receipt and the
memorandum of understanding were his relatives. He also
admitted that he had lodged the First Information Report
(FIR) before the CID Police, Gangtok on 12.09.2015 and one
criminal case was pending before the learned Chief Judicial
Magistrate. He further admitted that at the time of
execution of the money receipt and memorandum of
understanding the defendant was released on bail.
8. The plaintiff and his witnesses reiterated most of what
was stated in the plaint. In cross-examination however, all
the plaintiff's witnesses accepted that much of what they
had stated in the examination-in-chief regarding the
transactions between the plaintiff and the defendant were
personally not known to them and further that there was
no documentary proof in support of the allegations.
9. The plaintiff's witnesses admitted to their proximity
with the plaintiff. Sambhu Kumar Ray admitted that he
had seen the plaintiff paying Rs.22,500/- to the defendant
in cash for depositing the same in his Religare account;
that the plaintiff used to invest in share; that he had not
seen the plaintiff giving demand draft of Rs.5 lakhs to the
defendant; that he could not say if the defendant had taken
an amount of Rs.18,45,985/- from the plaintiff; that the
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
memorandum of understanding in which he had stood as a
witness was not in the case record; that he had not seen
the defendant signing on the money receipt; that he did not
know the contents of the memorandum of understanding
and the reason for its execution; and that he did not know
where the memorandum of understanding was prepared
and signed.
10. Shashi Shanker Trivedi also admitted inter alia that
the plaintiff had given an amount of Rs.22,500/- to the
defendant through a cheque drawn in favour of Religare.
He admitted that the plaintiff used to deal in share trading
since 2008-2009. He admitted that he was not present
when the money receipt and the memorandum of
understanding were executed and therefore, he did not
know where and why it was executed.
11. Rajiv Ranjan Trivedi admitted in cross-examination he
did not know where the memorandum of understanding
was prepared and further that Abhimanyu Tiwari had not
signed on the memorandum of understanding in his
presence. He admitted that he neither knew where the
money receipt was executed by the defendant nor the
contents thereof.
12. Abhimanyu Tiwari admitted that he was not present
when the memorandum of understanding was drafted,
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
prepared and executed. He admitted that he did not know
the contents of the memorandum of understanding.
13. Neither the money receipt nor the memorandum of
understanding has been proved by the plaintiff. The
plaintiff is required to stand on his own legs by proving his
case. The burden of proof lies on the plaintiff. The plaintiff
has failed to discharge this burden even on preponderance
of probabilities and consequently this court finds nothing
illegal in the conclusion arrived at by the learned District
Judge.
14. The learned District Judge also examined as to
whether the suit filed by the plaintiff was maintainable and
whether it was barred by the law of limitation. The learned
District Judge opined that his court was clearly barred in
view of section 15 Y of the Securities and Exchange Board
of India Act, 1992 (the Act). Section 15 Y inter alia provides
that no civil court shall have jurisdiction to entertain any
suit or proceeding in respect of any matter which an
adjudicating officer appointed under the Act or a Securities
Appellate Tribunal constituted under the Act is empowered
by or under the Act to determine. This court is unable to
agree to the opinion of the learned District Judge on this
aspect. The Act was enacted to provide for establishment of
a board to protect the interests of investors in securities
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
and to promote the development of, and to regulate the
securities market. The plaintiff, however, in the present
case, was seeking to establish a case of coercion and
embezzlement by an individual who was working as
manager in Religare. The plaintiff had not made any
allegation against Religare or had made it a party
defendant. In such view of the matter it cannot be said that
the suit was in respect of any matter which an adjudicating
officer appointed under the Act or a Securities Appellate
Tribunal constituted under the Act was empowered to
determine. Consequently, although it is quite evident that
the plaintiff had failed to establish his case, it cannot be
said that the Court of the learned District Judge did not
have jurisdiction to try the suit.
15. The learned District Judge did not examine the issue
of limitation as he found that the suit was not
maintainable. The plaintiff was seeking to realize a sum of
Rs.35 lakhs from the defendant based on the memorandum
of understanding and the money receipt. The recital in the
memorandum of understanding dated 23.01.2015 provides
that the defendant shall return an amount of Rs.35 lakhs
to the plaintiff within six months of its signing. The six
months period would expire on or around 23.07.2015.
Based on the memorandum of understanding the cause of
M. K. Trivedi. vs. Ramesh Sharma
RFA No. 05 of 2018
action for pursuing the memorandum of understanding
thereon would accrue on 23.07.2015. As the plaintiff had
filed a money suit, the period of limitation would be three
years from the cause of action. The suit was filed in the
year 2015 itself and therefore, it is held that the suit was
filed within time.
16. Consequently, the impugned judgment dated
31.08.2018 is modified to the above extent. In view of the
finding that the plaintiff had failed to establish his case the
prayers as prayed for in the plaint cannot be granted. It is
accordingly so ordered.
( Bhaskar Raj Pradhan )
Judge
Approved for reporting : Yes
Internet : Yes
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