Delhi District Court
Sh. Mahinder Kumar Gupta vs M/S United Spirits Ltd on 31 October, 2018
IN THE COURT OF SH. M.P. SINGH, ADDITIONAL DISTRICT
JUDGE03 (CENTRAL), TIS HAZARI COURTS, DELHI
CS No. 94/17
New CS No. 1937/17
Sh. Mahinder Kumar Gupta
S/o Late Lala Hans Raj Gupta
R/o 16, Mathura Road,
Jangpura B, New Delhi ......Plaintiff
Versus
1. M/s United Spirits Ltd.
(through its Managing Director)
UBI Tower Lever 6
24, Vittal Mallya Road UB
Banglore 560001, Karnataka
2. Sh. Shivraj Gupta (deleted from array of parties on 11.10.2010)
r/o 23, Ishwar Nagar, Delhi
3. Sh. Jayant Gupta (deleted from array of parties on 11.10.2010)
r/o 23, Ishwar Nagar, Delhi .....Defendants
SUIT FOR DECLARATION, RESTITUTION OF PROPERTY,
MANDATORY INJUNCTIONS AND DAMAGES
Suit first filed on (with deficient court fees/ objections) : 31.05.1991
Suit refiled on : 20.07.1991
Judgment pronounced on : 31.10.2018
JUDGMENT
1. On 24.05.1996 the following issues came to be framed:
1. Whether the plaintiff is the owner of the shares? OPP
2. Whether the defendants have not willfully and deliberately withheld the shares of the plaintiff? OPD CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 1 of 20 pages
3. Whether the defendants Nos. 1 to 3 have not committed a breach of trust by returning the shares to the persons other than the plaintiff? OPP
4. Whether the plaintiff is entitled to the return and restitution of all the shares alongwith the accretions thereto? OPP
5. Whether the suit is bad for nonjoinder of the parties? OPD
6. What amount is the plaintiff entitled to? OPP
7. To what rate of interest is the plaintiff entitled to? OPP
8. Relief.
2. On 25.05.2010 following two additional issues were framed:
1. Addl. Issue no.1 Whether the suit of the plaintiff is time barred? OPP
2. Addl. Issue no.2 Whether suit of the plaintiff is barred by estoppel, waiver and acquiescence? OPP
3. Vide Order dt. 28.10.2010, additional issue no.1 qua limitation was taken up as a preliminary issue. On 30.03.2017 Ld. Predecessor of this Court held that the 'issue of limitation will be deciding (sic.
decided) only after taking the evidence.' Order dt. 30.03.2017 came to be challenged before Hon'ble Delhi High Court and vide order dt. 13.07.2017 this Court was directed to hear the counsels and then adjudicate on the preliminary issue.
4. Relevant facts, as set out in the plaint, may now be taken note of:
I) In 1983 late Hansraj Gupta (plaintiff's father) bought few shares of M/s Central Distillery & Breweries Ltd. in the name M/s Hansraj Gupta Pvt. Ltd. Money for purchase of these shares were paid out of funds of M/s Hansraj Gupta Pvt. Ltd.
II) Shivraj Gupta, one of the sons of late Hansraj Gupta, fraudulently transferred these shares in the name of his wife CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 2 of 20 pages Pushpa Gupta. Fraud played by Shivraj Gupta was made easy as late Hansraj Gupta had bought the shares on blank transfer forms. Transfer of shares enabled Shivraj Gupta to further his controlling interest in M/s Central Distillery & Breweries Ltd. to the detriment of the other legal heirs of late Hansraj Gupta, and particularly, the plaintiff.
III) M/s Central Distillery & Breweries Ltd., though a public limited company, is essentially a closely held company wherein majority of the shares were held by the members of late Hansraj Gupta's family. Late Hansraj Gupta's family controlled about 80% of its shares and the rest by the outsiders. Over the years, plaintiff managed to buy shares held by outsiders. Plaintiff over a period of time bought shares numbering 10,061, which included 9,705 equity shares and 346 deferred shares. These transfers were made in plaintiff's favour on transfer deeds. Between May 1986 and August 1986 plaintiff lodged/delivered these shares to M/s Central Distillery & Breweries Ltd. for carrying out the requisite ministerial act of amending its register of members so as to reflect the change in ownership in the said shares. The said shares numbering 10,061 were lodged with M/s Central Distillery & Breweries Ltd. in batches.
IV) M/s Central Distillery & Breweries Ltd. for one reason or other refused to register the transfer of shares owned by plaintiff in the register of members. It was for the first time vide its letter dt.
31.07.1986 that M/s Central Distillery & Breweries Ltd. informed the plaintiff its decision not to register the transfer of shares in his name. In this letter, there was a reference to a letter dt. 02.07.1986 which plaintiff never received. Plaintiff vide his letter CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 3 of 20 pages dt. 05.12.1986 demanded restitution/return of the shares lodged by him for registration with M/s Central Distillery & Breweries Ltd. Plaintiff avers that M/s Central Distillery & Breweries Ltd. held the property comprised in the said shares in its capacity as his (plaintiff's) bailee/trustee. If M/s Central Distillery & Breweries Ltd. were to refuse, it is averred, to register the transfer of shares in plaintiff's name, then it was bound by a statutory duty and contractual obligation of bailee/trustee of the said shares and return the same to plaintiff. Plaintiff avers that formality of registration or nonregistration of these shares numbering 10,061 did not in any way alter his ownership over them as it already stood vested in him. He invokes Article 32 of Articles of Association of M/s Central Distillery & Breweries Ltd. to press home his point that the shares ought to have been returned to him. This Article 32 reads as follows, "All instruments of transfer which shall be registered shall be retained by the company, but may be destroyed upon the expiration of such period as the Board may from time to time determine. Any instrument of transfer which the Board declines to register shall (except in any case of fraud) be returned to the person depositing the same. "
V) Against the refusal of M/s Central Distillery & Breweries Ltd. to register the transfer of shares in his name, plaintiff preferred an appeal before Company Law Board (for short 'CLB') under section 111, Companies Act. Similarly, M/s Central Distillery & Breweries Ltd. too made a reference to CLB under section 22A, Securities Contract and Regulation Act to seek conformation of its decision in refusing to register transfer of shares in plaintiff's names. CLB vide a common order dt. 25.03.1988 upheld refusal of CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 4 of 20 pages registration on the technical ground of noncancellation of stamps on the instruments of transfer as required under section 12, Indian Stamp Act. CLB was of the view that this amounted to insufficient compliance of section 108, Companies Act. CLB vide its order dt. 25.03.1988, however, gave liberty to plaintiff to affix proper stamps on the transfer deed and get the same adjudicated by an appropriate authority so as to enable him to lodge proper instrument of transfer as required by law.
VI) Relying on the CLB order dt. 25.03.1988 plaintiff again approached M/s Central Distillery & Breweries Ltd. for return of his shares and instruments of transfer lodged by him to enable him to rectify the deficiency in stamping. Despite several reminders M/s Central Distillery & Breweries Ltd. refused and/or ignored his requests.
VII) Plaintiff for the first time 'after 03.06.1988' became aware and was intimated that Sh. Shivraj Gupta and Sh. Jayant Gupta had fraudulently returned the said shares numbering 10,061, that were in their absolute possession and control, with the transfer forms to the original transferors (numbering about 86).
VIII) Plaintiff avers that M/s Central Distillery & Breweries Ltd. was bound to transfer the dividend into a special account on his (plaintiff's) behalf; that the company was also bound to keep in abeyance any offer of rights shares and any issue of fully paid up bonus shares in relation to 10,061 shares owned by him; and that section 206A, Companies Act squarely applied as transfer of 10,061 shares had been refused to be registered by the company.
IX) M/s Central Distillery & Breweries Ltd. later amalgamated with CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 5 of 20 pages M/s Maharashtra Distillery Ltd. and which later merged with M/s United Spirits Ltd. (the present defendant).
arose on 31.07.1986 X) Plaintiff states that cause of action first when shares were refused to be registered; that cause of action again arose again when CLB passed an order on 25.03.1988 upholding refusal to register the shares; that cause of action arose on 03.06.1988 when M/s Central Distillery & Breweries Ltd.
intimated the plaintiff that it had returned the shares to the original transferors; that cause of action further arose when defendant did not intimate transfer of dividend relating to 10,061 shares into a special account under section 205A, Companies Act nor intimated keeping in abeyance the offer of right shares and issue of fully paid up bonus shares as required both under the law and under provisions of Companies Act, 1956; that this obligation is a continuing obligation as transfer of shares continue to be on the register of the company and the obligation being of continuing nature, a fresh cause of action accrues day to day in his favour.
5. On these averments, plaintiff seeks the following reliefs:
(a) Declare that defendants violated plaintiff's ownership in the shares at Annexure A, inter alia, by denying physical control therein and further in the Rights Shares, Bonus Shares and dividends arising thereon on account of non return of such property and violation of obligation to keep in abeyance the entitlements flowing therefrom;
(b) Declare that defendants no. 1 to 3 Central Distillery & Breweries Ltd. committed a breach of trust and violated section 22A, Securities Contract Regulation Act, 1956 read with the listing Agreement maintained with Delhi Stock Exchange Ltd. in not returning the shares refused to be transferred by the company to plaintiff;
(c) Declare that defendants no. 1 to 3 committed a breach of CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 6 of 20 pages duty/ obligation of a bailee of the shares, lodged as per Annexure A for registration with the company, with malafide intention and contrary to provisions of Companies Act, 1956 so as to defraud the plaintiff of the dividend, Rights Shares and Bonus Shares arising and accruing thereon;
(d) Declare that plaintiff is entitled to return and restitution of all the shares listed in Annexure A with the accretions thereto, the dividends and all other benefits attaching to these shares, or duplicate shares and Rights Offers and bonus securities and dividend warrants in lieu thereof.
(e) Decree that defendants no. 1 to 3 are liable to pay a sum of Rs. 5,00,000/ as damages for losses occasioned to plaintiff on account of loss of special property in the shares and stamp duty thereon traded in low volumes and are not freely available in the market and on account of the loss of rights and control after plaintiff's property occasioned by nonreturn of share certificates;
(f) Decree the cancellation of the original share certificates as per Annexure A and the bonus shares, Rights Shares/entitlements and dividend warrants attached thereto not physically handed over to the plaintiff and further decree the issue of duplicate share certificates as per Annexure A along with any rights shares or entitlements or bonus shares or dividend warrants and their delivery to the plaintiff together with the full costs of obtaining the executed share transfer forms and stamp duty for transfer thereof;
(g) Decree that the 1st defendant is liable to register the original or duplicate shares as per Annexure A Rights shares and entitlement and bonus shares attached thereto in the plaintiff's name upon the issue and delivery thereof to the plaintiff and the defendant no. 1 be itself constituted the transfer agent for these shares in view of the malafide and deliberate loss of the share transfer forms by the defendant no. 1 and non return of the same to the plaintiff;
(h) Pass a mandatory injunction and direction to defendant no. 1 to credit the dividend earned and / or to be earned in respect of the shares listed in the Annexure A and / or accretions thereto in a Special Account on behalf of the plaintiffs, earning interest @ 15% p.a. or such higher rate, CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 7 of 20 pages as is applicable to commercial over - draft loans and further direct that the same be handed over to the plaintiff;
(i) Issue a mandatory order and direction directing the 1 st defendant to keep in abeyance plaintiff's bonus shares/rights shares as were and are the entitlement of the plaintiff's till the nonregistration of the plaintiff's shares in abeyance in view of the breach of their bailees' obligation of returning the property lodged with them for transfer and not transferred;
(j) Issue an order of injunction restraining defendants no. 1 to 3 from recording any vote on the said shares at Annexure A or any accretions thereon contrary to the wish and desire of the plaintiff at any General Body/Annual General Meeting of the Company and that any notices of such meetings issued by the 1st defendant company along with their proxy forms be directed to be forwarded to the plaintiff for enabling lodgment of such proxies with the 1 st defendant company in time;
(k) Direct the 1st defendant company to issue all notices, copies of the balance sheets and other statutory records, as are the entitlement of a shareholder to be handed over from time to time, to plaintiff till disposal of the suit and record of the plaintiff upon rectification of the share transfer forms/resubmission of the share transfer forms.
(l) For costs; and
(m) For such further and other relief/s as the nature and
circumstances of the case may require.
6. Since the preliminary issue is to be decided essentially on the pleas founded in the plaint, averments in the written statement are not being taken note of.
7. The findings on the preliminary issue (Additional Issue no. 1) are as follows:
8. Insofar as the relief of declaration is concerned, in terms of Article 58, Limitation Act, 1963 the period of limitation is 3 years and the time from which this period begins to run is when the right to sue 'first' CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 8 of 20 pages accrues. In the plaint, plaintiff himself avers that cause of action had 'first' accrued on 31.07.1986 when the company refused to register the shares. Therefore, when on 31.07.1986 company refused to register the shares in plaintiff's name, the time had begun to run for the reliefs of declarations. This was the 'first' accrual of right to sue. This act of the company was a final act and it was not a recurring act. In Khatri Hotels (P) Ltd. vs. Union of India, (2011) 9 SCC 126 the following passage occurs, "30. While enacting Article 58 of the 1963 Act, the legislature has designedly made a departure from the language of Article 120 of the 1908 Act. The word 'first' has been used between the words 'sue' and 'accrued'. This would mean that if a suit is based on multiple causes of action, the period of limitation will begin to run from the date when the right to sue first accrues. To put it differently, successive violations of the right will not give rise to fresh cause of action and the suit will be liable to be dismissed if it is beyond the period of limitation counted from the day when the right to sue first accrued."
This ratio decidendi was followed in L.C. Hanumanthappa vs. H.B. Shivkumar, (2016)1 SCC 332. And at any rate, even if we count the period of limitation from 05.12.1986 (in response to plaintiff's latter dt. 05.12.1986 the company had refused to return/restitute the shares to him) the reliefs of declarations are hopelessly time barred (suit having been filed in May - July 1991). Even if this Court were to take the most charitable view and count the period of limitation from 25.03.1988 (on 25.03.1988 CLB passed the order holding that for want of stamp duty, shares can not be registered in plaintiff's name), yet the suit is hopelessly time barred. Given the extant law that limitation under Article 58, Limitation Act begins to run when the right to sue 'first' accrues, the argument that cause of action is a continuing one on the CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 9 of 20 pages anvil of section 22, Limitation Act has to be turned down. Further, there are decisions to hold that section 22, Limitation Act applies to continuing wrongs and not to a continuing right and so a pure declaratory suit under section 34, Specific Relief Act can be brought when plaintiff's right to any property is first denied and to such a suit section 22, Limitation Act will have no application {see Krishnan vs. Annaji, AIR 1930 Bom 61}.
9. Ld. Counsel for plaintiff invited attention of this court to paragraph 15 of the plaint wherein it is stated 'plaintiff for the first time 'after 03.06.1988' became aware and was intimated that Sh. Shivraj Gupta and Sh. Jayant Gupta had fraudulently returned the said shares numbering 10,061 with the transfer forms to the original transferors (numbering about 86) that were in their absolute possession and control.' He thus argued that limitation would begin to run 'after 03.06.1988'. Thus argument is a meritless one for multiple reasons. Firstly, it bears repetition to state that limitation under Article 58, Limitation Act begins to run when the right to sue 'first' accrues. Right to sue 'first' accrued to plaintiff on 31.07.1986, or at any rate on 05.12.1986 and in any event on 25.03.1988. Plaintiff himself in his plaint, in the paragraph qua the different dates when the cause of action accrued, has averred that cause of action 'first' arose on 31.07.1986 when the company refused to register the shares and it further arose on 25.03.1988 when CLB upheld the decision not register the shares in his name. Secondly, in the very same paragraph concerning the different dates when the cause of action arose plaintiff makes an averment, "The cause of action arose on 3.6.1988 when the Defendant No.1 Company intimated that it had returned the shares to CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 10 of 20 pages the original transferors." Therefore, there is a positive averment in the plaint that it was on 03.06.1988 that plaintiff had knowledge that defendant company had transferred the shares to original transferors and the cause of action arose on 03.06.1988. And this averment is against an entirely vague averment in paragraph 15 of the plaint that plaintiff for the first time 'after 03.06.1988' became aware of this. The question to be asked is what does the plaintiff mean by 'after 03.06.1988' and this is more so when he himself states, "The cause of action arose on 3.6.1988 when the Defendant No.1 Company intimated that it had returned the shares to the original transferors." Thirdly, 'after 03.06.1988' is as vague as it can be. 'After 03.06.1988' may as well mean 04.06.1988 or 03.06.2018 or 03.06.2019 or even eternity. Fourthly, plaintiff cannot be allowed to make an extremely vague averment and then go about taking undue advantage of the same. To do so would essentially mean that 'after 03.06.1988' is such a date which in plaintiff's scheme of things has not arrived as yet. And thus, extending this logic, such a date when the cause of action accrues 'after 03.06.1988' may not have even dawned as yet. Fifthly, this argument is not tenable from another perspective. Supposing the company had not returned the shares to the original transferors and instead retained the same with itself, would the plaintiff, in such an event, take the position that the cause of action for him never accrued and that he has no grievance against the defendant company and further that he had no reason to sue the defendant company notwithstanding the fact that it had refused to register the shares in his name and also to return the same to him? Certainly not. Refusal to register the shares and to return the shares to him was ipso facto sufficient to set in motion the cause of action as also the period of limitation. This can be viewed from another CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 11 of 20 pages angle. Say, if the company were to decide in year 2050 that the shares must now be returned to original transferors. In such an event, would limitation be kept in abeyance or in suspended animation till year 2050 so far as the allegedly illegal acts of refusal to register the shares and to return the same were concerned and the plaintiff would not file the suit till year 2050? Certainly not. Sixthly, for the plaintiff his pleas to register the shares and/or to return the same to him was actually not contingent on whether the company on a subsequent date decided to transfer the same to original transferors. As to whether the company on the subsequent date treated the same a waste paper or transferred the same to original transferors was actually no cause of action in plaintiff's scheme of things as the cause of action had already occurred when company refused to register the shares and / or when it refused to return the same to him. Therefore, for these multiple reasons the plea that limitation commenced 'on 03.06.1988' and / or 'after 03.06.1988' when the company returned the shares to the original transferors is actually not correct and is actually a ruse. That apart, even if this Court were to take the date as 03.06.1989 when the limitation commenced, yet the suit would be time barred as the suit in this case is taken to have been filed on 20.07.1991 when it was refiled. This aspect would be dealt with in later part of this judgment.
10. Plaintiff next claims damages of Rs. 5 lacs on account of loss of special property comprised in the shares. This relief too is hopelessly time barred. In terms of Article 91 of Limitation Act the limitation would be three years. Plaintiff right from the very inception was aware of the fact that defendant company was allegedly wrongfully detaining his shares and it had in fact refused to return / restitute the same to him contrary to the mandate of Article 32 of Articles of Association.
CS No. 94/17New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 12 of 20 pages Right from the very inception, plaintiff was also aware of identity of defendant company that had allegedly wrongfully retained his shares. He was aware of all these facts on 31.07.1986, or at any rate on 05.12.1986 or in any event on 25.03.1988. Given this, relief of damages of Rs. 5 lacs on account of loss of special property (suit filed in May - July 1991) is hopelessly time barred. To such a relief, section 22, Limitation Act would not apply {see the decision of Sankar Dastidar vs. Banjula Dastidar, AIR 2007 SC 514}. On similar footing the relief of return / restitution of the shares allegedly wrongfully withheld too would be time barred {see Articles 68 and 69, Limitation Act} and to the same, on the anvil of Sankar Dastidar (supra), section 22 of Limitation Act would not apply.
11. Plaintiff next claims a decree of cancellation of original share certificates etc. Article 59, Limitation would govern this and the limitation for this is three years. Under this Article, limitation would begin to run from the date when the facts entitling the plaintiff to have the instrument cancelled first became known to him. In the case at hand, all such facts were within plaintiff's knowledge on 31.07.1986, or at any rate on 05.12.1986 or in any event on 25.03.1988. Given this, this relief (suit filed in May - July 1991) too is hopelessly time barred. This relief of cancellation cannot be treated to be a recurring cause of action by any stretch of imagination for the purposes of section 22, Limitation Act.
12. Plaintiff next claims several mandatory injunctions. These reliefs are again time barred. Plaintiff had knowledge of alleged wrongful retention of the shares on 31.07.1986, or at any rate on 05.12.1986 or in any event on 25.03.1988. To sue for mandatory injunctions in May -
CS No. 94/17New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 13 of 20 pages July 1991 on facts that were in plaintiff's knowledge more than 3 years ago would not be tenable and would be time barred.
13. Ld. Counsel for plaintiff argued that limitation was a mixed question of facts and law. There can certainly be no quarrel with this argument. In this case too it is mixed question of facts and law. The facts for deciding this issue of limitation have been culled out from the plaint and the law under the Limitation Act has been applied. That apart, in the case at hand, the several dates for deciding this issue of limitation are itself set out in the plaint and the plaintiff cannot possibly make an about turn from it. He cannot possibly lead any evidence contrary to what he has averred in his plaint. He cannot supply any other date to the facts as set out in the plaint. In the case at hand, even the plaintiff would not dispute the dates that he has written in his plaint. Therefore, it is difficult to comprehend that when there is absolutely no dispute as to the dates when defendant company refused to register and to return the shares, why should the court proceed to defer the decision on the aspect of limitation and instead proceed to take evidence. In this context, reliance placed upon the decision of Ramesh B. Desai vs. Bipin Vadilal Mehta & Anr., (2006)5 SCC 638 by plaintiff's counsel is misplaced. This is for the reason that a reading of this judgment would show that facts as to when limitation had commenced in Ramesh B. Desai (supra) were itself in dispute. That apart, in the case at hand, this preliminary issue is being decided against plaintiff on the plea of demurrer; that is on the assumption that averments in the plaint are correct. Thirdly, in paragraph 19 of Ramesh B. Desai (supra) there is an observation, "Therefore, unless it becomes apparent from the reading of the company petition that the CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 14 of 20 pages same is barred by limitation the petition cannot be rejected under Order 7 Rule 11 (d) CPC." Therefore to say that in all matters, come what may, the issue of limitation must be decided after taking evidence would not be correct. Where from the very averments in the plaint a suit is ex facie time barred, I do not think that a court would still insist on a trial in order to decide the issue of limitation.
14. To sum up, this court holds that this suit is time barred.
15. In order to bring about a completeness to this judgment, it is necessary to determine as to when was the suit filed. The present lis was instituted in Hon'ble High Court. Paragraph 29 of plaint mentioned that court fee payable was Rs. 7,224/. The endorsements would show that suit was first filed on 31.05.1991, albeit with deficient court fees. There is a stamp of Deputy Registrar dt. 31.05.1991 which notes, "Filed Today, Filing No........ 31 May 1991 Deputy Registrar". It is pertinent to mention here that the lis first filed on 31.05.1991 was done so with court fee of Rs. 250/ only (a court fee of Rs. 50/ and another one of Rs. 200/). And there was an application dt. 31.05.1991 of the plaintiff under sections 148, 149 and 151 of CPC stating therein, "3. That Plaintiff/Applicant most humbly states that due to paucity of time the necessary Court fee has not been affixed. The Plaintiff prays that time be given to him to affix requisite court fee in accordance with law. The Plaintiff prays accordingly." Office notings of High Court Registry is on record. It shows that there were office objections visàvis court fees. The registry noted that 'court fees payable on the declarations and other reliefs sought should be given in para 29 and the value for the purpose of the court fee should be fixed separately for each relief sought'. Office notings of the registry would suggest that on 10.07.1991 the present CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 15 of 20 pages suit was endeavoured to be refiled, but was returned with remarks, 'Return for similar reasons as in the connected matter, excepting 148 CPC appln. To be refiled within one week..... Signature (illegible) 10/7/91'. The endorsements would further show that deficient court fee (Rs. 7,300; one court fee of Rs. 5,000/, two of Rs. 1,000/ each, and one of Rs. 300/) was actually tendered on 20.07.1991 and thus, as per registry's office notings, objections were finally removed on 20.07.1991. And it was then that the suit was refiled on 20.07.1991. There is a stamp of Deputy Registrar dt. 20.07.1991 which notes, "Filed Today, Filing No........ 20 July 1991 Deputy Registrar". Relevant would it be to note here that as per RTI (Right to Information Act) response from Hon'ble High Court (copy thereof furnished by defendant's counsel), in year 1991 'High Court remained closed for summer vacations from 01.06.1991 to 05.07.1991 (both days inclusive) with the stipulation that suits, appeals, applications or other proceedings which were to be filed on the reopening day may also be substituted, preferred or made in regular course between 10:00 am to 04:00 pm from Monday the 1 st July, 1991 to Friday the 5th July, 1991 as per the convenience of the parties though for the purposes of limitation court reopens only on 06.07.1991. All these timelines can be presented in a tabular form which is as under.
Suit first filed (with deficient
court fee of Rs. 250/ only) on 31.05.1991
CS No. 94/17
New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 16 of 20 pages
01st June 1991 to Friday, the
Summer vacations in High 05th July 1991 (both days
Court inclusive); though suits,
appeals, applications or other
proceedings which were to be
filed on the reopening day may
have been substituted,
preferred or made in regular
course between 10:00 am to
04:00 pm from Monday the 1st
July, 1991 to Friday the 5th
July, 1991 as per the
convenience of the parties
though for the purposes of
limitation court reopened only
on 06.07.1991.
10.07.1991 (extended time of
Suit again endeavoured to be one week given)
filed on
Deficient court fee furnished /
Objections removed 20.07.1991
Suit refiled on 20.07.1991
16. The question is whether the suit be taken to have been filed on 31.05.1991 or on 20.07.1991. At the relevant time (year 1991) Rule 2 of Chapter 4 of Delhi High Court Original Side Rules, 1967 governed the matters visàvis scrutiny, return and refilling of plaint, petition, application or proceedings on the original side of High Court. The same reads as under:
2. Endorsement and security of documents. (a) The officer in charge of the filingcounter shall endorse the date of receipt on the plaint, petition, application or proceedings and also on the duplicate copy of the index and return the same to the party. He shall enter the particulars of all such documents in the registrar of daily filing and thereafter cause it to be sent to the office concerned for examination. If on scrutiny, the document is found to be CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 17 of 20 pages defective, such document shall, after notice for the party filing the same, be placed before the Registrar. The Registrar may for sufficient cause return the said document for rectification or amendment to the party filing the same, and for this purpose may allow to the party concerned such reasonable time as he may consider necessary.
(b) Where the party fails to take any step for the removal of the defect within the time fixed for the same, the Registrar may, for reasons to be recorded in writing decline to register the document.
(c) Any party aggrieved by any order made by the Registrar under this rule may, within fifteen days of the making of such order, appeal against it to the JudgeInChambers.
17. It is a matter of record that the suit when first filed on 31.05.1991 had deficient court fee. Plaintiff had applied for extension of time to furnish deficient court fee on the plea that 'due to paucity of time', the same could not be affixed. High Court closed for summer vacations on 01.06.1991 and it reopened on 06.07.1991 (Saturday). There is no explanation coming forth as to why deficient court fee was not furnished on 06.07.1991. There is neither any explanation as to why the same was not furnished on 08.07.1991. Endorsement on the back pages of the subsequently furnished deficient court fee would reflect the date of 08.07.1991. This in effect means that the subsequently furnished court fee was ready on 08.07.1991. Court fee was again not furnished on 10.07.1991. It bears repetition to state that on 10.07.1991 plaintiff was granted a week's time to furnish the deficient court fee, but the needful was not done within the 'time fixed' of one week. Deficient court fee came to be furnished on 20.07.1991. Plaintiff took more than the 'time fixed' of one week for removing the defects. In terms of Rule 2(b), as noted hereinabove, where defects are not removed within the 'time fixed', the Registrar may refuse to register the document. Plaintiff took more than reasonable time to furnish the deficient court fee. Rule 13 of CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 18 of 20 pages Chapter I (High Court Rules & Orders), Vol. V specifically lays down that improperly stamped documents remain invalid unless filed through mistake and time extended for making up the deficiency. In this case at hand, no such application was moved nor any order from the Court was sought. After expiry of the time as granted by the Registrar, plaintiff never moved any application before the Court for seeking more time in refiling. He has no explanation to furnish as to why he could not furnish the Court fee within the 'time fixed' of one week. In the case at hand, the plaintiff did not furnish the court fee despite the numerous opportunities that came his way. He did not furnish the court fee on 01.07.1991 (when the registry opened), on 06.07.1991 (when court reopened), on 08.07.1991 (when court fee was ready), on 10.07.1991 (when the registry gave an extended time of a week), or within the extended time of next one week. Given the numerous opportunities that came plaintiff's way, the plea of 'paucity of time' appears to be hardly convincing and is actually one of sheer negligence. The plaintiff had no application seeking extension of time beyond the extended time of one week granted by the Registrar. Given the circumstances, this Court is of the view that the date of filing of the suit should be taken to be 20.07.1991. It is trite that so far as condonation of delay in refiling is concerned, the same has to be liberally granted so as to advance substantial justice. However, it is well settled that the applicant has to disclose some grounds to enable the court to hold that the delay deserves to be condoned. A decision on somewhat facts is that of J. L. Gugnani Vs. Krishna Estate & Ors.
2011 SCC OnLine Del 3007 : (2011)184 DLT 410. In particular, observations in paragraph 61 of this judgment may be noted, "It may be mentioned that even if the plaintiff were given extension of time and the CS No. 94/17 New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 19 of 20 pages delay in depositing the court fee was condoned, given the legal principles laid down the judicial pronouncements noticed above, the institution of the suit would have to relate to the date on which the court fee was deposited....". This Court takes the date of filing of the suit to be 20.07.1991.
18. To sum up, this preliminary issue is answered against the plaintiff and in favour of the defendant. The suit is patently time barred.
19. Inasmuch as the preliminary issue of limitation has been decided against the plaintiff, there is no need to decide the other issues. It is pertinent to mention that before CLB there was never any prayer for return of the shares. It is also pertinent to mention that even if arguendo plaintiff were to seek the benefit of section 14, Limitation Act to cover the period of CLB proceedings, yet the suit would be time barred. As already stated, the CLB proceedings had come to an end on 25.03.1988.
20. Preliminary issue (Additional Issue no.1) qua limitation is answered against the plaintiff and in defendant's favour. The suit is patently time barred. The suit stands dismissed. No order as to costs. Decree sheet be drawn up. File be consigned to record room.
ANNOUNCED IN THE OPEN MURARI Digitally signed
by MURARI
PRASAD PRASAD SINGH
COURT ON 31.10.2018 SINGH
Date: 2018.10.31
16:17:19 +0530
(M. P. SINGH)
ADJ03 (CENTRAL)
TIS HAZARI COURTS:
DELHI/31.10.2018
CS No. 94/17
New CS No.1937/17 Mahender K. Gupta V. United Spirits Ltd. Page 20 of 20 pages