Delhi District Court
F.S. Chauhan vs . National Thermal Power Corporation ... on 31 October, 2018
1
F.S. Chauhan vs. National Thermal Power Corporation Limited
IN THE COURT OF VIVEK KUMAR AGARWAL, CIVIL JUDGE 07,
CENTRAL DISTT., TIS HAZARI COURTS, DELHI
Civil Suit No: 340/16
CNR No. :- DLCT03-000185-2002
Date of Institution: 16.05.2002
Date of Decision: 31.10.2018
F.S. Chauhan
22 C, Pocket A, SFS Flats,
Mayur ViharIII, Delhi110096. ...................Plaintiff.
Versus
1. National Thermal Power Corporation Limited
through its Chairman & Managing Director
Core7, SCOPE Complex, Lodhi Road, New Delhi110003.
2. The Chairman & Managing Director,
NTPC Ltd., Core7, SCOPE Complex,
Lodhi Road, New Delhi110003.
............Defendants.
SUIT FOR RECOVERY OF AMOUNT OF INDEMNITY UNDER
ARTICLE 69 OF THE ARTICLES OF ASSOCIATION OF THE
DEFENDANT COMPANY ALONGWITH INTEREST AND
DAMAGES
Civil Suit No: 340/16 (Vivek Kumar Agarwal)
CJ07(C)/THC/Delhi
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F.S. Chauhan vs. National Thermal Power Corporation Limited
Present: None.
JUDGMENT:
1) The present suit has been filed for commanding the defendants to settle the claim of Rs.7371/ dt. 01.04.99 of the plaintiff against advance amount of Rs. 6,700/ and to pass a decree in favour of the plaintiff and against the defendants for a sum of Rs. 59,500/ towards the principal amount of indemnity plus a sum of Rs. 21,420/ towards the interest payable up to the date of filing this suit plus a sum of Rs. 5000/ incurred by the plaintiff in pursuing the matter with the defendants plus Rs. 14,000/ as compensation for the other losses and damages suffered by the plaintiff up to the date of filing this suit totaling ot Rs. 99,920/ alongwith the cost of this suit including the court fee affixed and appropriate interest from the date of this suit to the date of decree and further interest on the amount of decree from the date of decree to the date of its execution.
Plaintiff's version :
2) Succinctly, the case of plaintiff is that he is an officer of defendant no. 1 company designated as its Manager w.e.f. 01.01.1992 and the company in compliance of Section 201 of Companies Act had declared its own obligations of indemnifying its Directors, Managers and Officers under article 69 of Articles of Association. It is further pleaded that on 22.12.1997 a memorandum of charge was served upon some executives of the company namely Brij Kishore Gupta, Sr. Assistant Manager and Brij Kishore, Sr. Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 3 F.S. Chauhan vs. National Thermal Power Corporation Limited Manager in regard of forgery of a document by him vide which the plaintiff was replaced from job of R & R (coordinator) and a departmental inquiry was conducted against Brij Kishore, in which the plaintiff was cited as a witness. Consequent to the said inquiry, departmental punishment/ penalty was imposed upon said executives. That one of the aggrieved persons had filed a complaint u/s 156 (3) Cr. P.C. in the court of ACJM, Ghaziabad against the group of executives namely G.P. Singh, Y.N.P. Singha, P.S. Soman, Brij Kishore, M.P.S. Pir and Brij Kishore Gupta for commission of misconduct and order was passed to register the case against them and to investigate the matter on 29.08.1998 in complaint no. 67 of 1996. That said Brij Kishore, challenged the said order in Hon'ble High at Allahabad vide Criminal Misc. application no. 3688 of 1998 filed u/s 482 Cr.P.C. on behalf of said accused persons titled as "G.P. Singh & Ors. vs. State of UP" and plaintiff was impleaded as respondent no. 3, however, company was not impleaded. It is stated that thereby plaintiff incurred a liability, not only to defend himself but also to defend the interest and action of defendant company in discharge of his duties and therefore, he became entitled to be indemnified by defendant company under Article 69, however, the defendant company provided the money and services of advocates to the accused applicants. Thereafter, the plaintiff moved an office note dt. 23.02.1999 for consideration through proper channel with request for being provided with legal assistance, cost and expenses for contesting the case in High Court of Allahabad and thereafter, a Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 4 F.S. Chauhan vs. National Thermal Power Corporation Limited Deputy General Manager of company forwarded the said office note and also sanctioned advance payment of Rs. 6,700/ to the plaintiff for meeting the expenses in connection with the same. That said amount was spent by the plaintiff in expenses of boarding/ lodging / TA/DA etc. under the rules of company and he submitted claim of Rs. 7,371/ dt. 01.04.1998 in the prescribed format alongwith relevant bills/ vouchers in original alongwith the request for another advance payment for next hearing to his controlling officer on 01.04.1998 under office memo dt. 01.04.99 and same was duly acknowledged in the office of DGM of defendant company and fact of receipt was also entered on the receipt diary / register. It is pleaded that thereafter said DGM and Controlling officer of plaintiff failed to provide any further advance payment but did not raise any objection to the claim of the plaintiff and therefore, the plaintiff became entitled to reimbursement of the expenses of Rs. 671/ incurred by plaintiff in excess of said amount of advance. That plaintiff kept on pursuing his office note dt. 23.02.1999 in contesting the said case with several reminders but defendant no. 2 neither returned the said note with his approval / remarks nor paid any further cost and expenses incurred by plaintiff. That ultimately, vide order dt. 17.05.1999 Hon'ble High Court of Allahabad rejected the Criminal Misc. application and therefore, defendant company again became liable under article 69 to indemnify the plaintiff for all the expenses but the defendants failed to comply the same and also failed to convey the decision on the plaintiff's note dt. 23.02.1999. In addition to claim of Rs.
Civil Suit No: 340/16 (Vivek Kumar Agarwal)
CJ07(C)/THC/Delhi
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F.S. Chauhan vs. National Thermal Power Corporation Limited 7371/, the plaintiff also incurred expenditure of Rs. 41,540/ as detailed above in the prayer clause. It is further stated that the plaintiff had to borrow money on interest @ 12 % p.a. in lieu of not getting the payment of indemnity from the defendant company and therefore, the plaintiff is also entitled to get the interest @ 12% on the total amount of Rs. 59,500/ from 17.05.1999 to the date of filing of the suit, which comes to Rs. 21,420/.
3) It is further pleaded that the wages of plaintiff were also withheld from July 1999 to 22.11.2000 and therefore, he was in dire need of money, however, defendants did not release the amount and caused irreparable loss to the plaintiff for which he claims amount of Rs. 14,000/. That instead of giving decision on the office note of plaintiff, defendants caused a notice dt. 16.05.01 served on the plaintiff for recovery of Rs. 6,700/ from salary of plaintiff, which was replied by him. That the defendants could not deny the receipt and entry of his claim dt. 01.04.1999 and even then served another notice dt. 16.01.02 on the plaintiff to recovery of said amount Rs. 6,700/. That plaintiff also served a notice dt. 04.02.02 on defendant no. 2, which was not replied and hence, the present suit.
Defendants' version :
4) Upon notice being issued, the defendants appeared before the court and contested the suit by filing the joint WS, in which preliminary objections are taken that suit is bad for misjoinder of parties as defendant no. 2 being the Chairman and MD of defendant no. 1 has no personal liability for acts of the company. Again that the present Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 6 F.S. Chauhan vs. National Thermal Power Corporation Limited court has no territorial jurisdiction to entertain the suit as cause of action, if any, arose at Dadri or at Patna, where the plaintiff was posted. Again that suit is also barred by limitation as being filed beyond three years. In reply on merits, it is admitted that the plaintiff was employee of defendant no. 1 and was designated as Manager, however, it is stated that the services of plaintiff were dismissed vide order dt. 21.06.2002 passed by disciplinary authority of NTPC. Again, the averments regarding Section 201 and Article 69 are also admitted as being matter of record, however, it is stated that the Article 69 does not come into play in the present case.
5) In reply to averments to para no. 5 of the plaint, it is stated that the departmental inquiry has no relevancy with the alleged cause of action. It is admitted that one Rewati had filed an application u/s 156(3) Cr.P.C., however, it is stated that same was dismissed vide order dt. 06.06.1996 passed by concerned ACJM and however, vide order dt. 22.08.1998 passed by concerned Ld. ASJ, order was passed for registration of case and for investigation of the matter. It is further admitted that one Brij Kishore, charge sheeted by defendant company had challenged the said order in Hon'ble High Court of Allahabad, however, it is clarified that since defendant no. 1 company was not necessary party, it was not impleaded and that respondent no. 1 was State of UP, respondent no. 2 was Rewati and respondent no. 3 was the plaintiff. The prayer clause of the said application has also been reproduced. Further, it has been denied that the plaintiff incurred a liability to defend anyone including Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 7 F.S. Chauhan vs. National Thermal Power Corporation Limited himself or/and defendant no. 1 company in discharge of his bonafide duty and therefore, he became entitled to be indemnified under Article 69. It is stated that prayer in the criminal misc. application clearly shows that the no relief was sought against the plaintiff. It is further stated that the plaintiff was duly admitted by the then DGM vide letter dt. 05.04.1999 that since NTPC was not a party and the work was not an official work, it was not possible to sanction tour advance to the plaintiff in the said case. Again, it is submitted that the plaintiff has failed to give details regarding the controlling officer and to whom the alleged office note was forwarded. It has been denied for want of knowledge that the plaintiff spent the amount of Rs. 6700/ and that he had submitted any claim of any amount stating that the allegation is vague and contradictory. It is further stated that the document, if any entered on 01.04.1999 of receipt diary/ register were taken back by plaintiff on 13.04.1999. It is averred that the plaintiff on several occasions reminded that he had not submitted the requisite TA Bill for Rs. 6700/ withdrawn by him, however, he had not submitted that the same and therefore, the plaintiff is liable to refund the amount of Rs. 6700/.
6) It is further denied that any order was passed in favour of plaintiff and that defendant no. 1 company became liable to the plaintiff for defending against the Criminal misc. application. It is also denied that the defendants failed to record or convey their decision on the plaintiff's alleged note and rather it is stated that plaintiff himself has annexed a copy of letter dt. 05.04.1999, issued by the then Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 8 F.S. Chauhan vs. National Thermal Power Corporation Limited DGM, whereby plaintiff was informed the decision of defendant no. 1 company. It is further denied for want of knowledge that plaintiff incurred an expenditure of Rs. 41,540/ and Rs. 5000/ and Rs. 3000/ as well as Rs. 9960/ as alleged by plaintiff. It is submitted that expenditure, if any was not incurred in official capacity and not in discharge of official duty. Regarding the question of wages of plaintiff from July99 to November 2000, it is submitted that matter was subjudice before court of one ADJ, Delhi in civil suit filed by the plaintiff. Lastly, it is stated that the notice dt. 16.05.01 was served upon the plaintiff for recovery of amount of Rs. 67,000/ and request has been made to dismiss the suit with heavy costs.
7) In pursuance of WS, rejoinder was filed on behalf of plaintiff, in which allegation of WS denied and averments of plaint are reiterated.
8) Thereafter, one original document filed by plaintiff was admitted on behalf of defendants and was marked as Ex. P1 for sake of future reference and from pleading of the parties, following issues were framed vide order dt. 27.05.2003:
1) Whether the plaintiff is entitled to recover the amount with cost and interest etc. as prayed for from the defendants? OPP
2) Relief, if any.
9) Thereafter, some objections were filed by the plaintiff against admission of documents filed by the defendant, however, same were dismissed by Ld. Predecessor of the court vide order dt. 21.04.08. Subsequently, the review application was also filed on Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 9 F.S. Chauhan vs. National Thermal Power Corporation Limited behalf of plaintiff, which was dismissed as withdrawn vide order dt. 19.01.10 and thereafter, from pleading of the parties, following issues were framed vide order dt. 19.01.2010 :
1) Whether the written statement has been filed by Sh. A.K. Sinha (corrected v.o.d. 08.10.2010) without having any power of attorney in his favour given by the defendant? (OPP)
2) Whether the suit is bad for misjoinder of parties? (OPD)
3) Whether this Court has no territorial jurisdiction to try the present suit? (OPD)
4) Whether the suit is barred by limitation? (OPD)
5) Whether the plaintiff is entitled to an order directing the defendant to settle the claim of Rs. 7,371/ of the plaintiff as mentioned in prayer clause? (OPP)
6) Whether the plaintiff is entitled to recovery of Rs. 99,920/ alongwith cost of the suit from the defendants as prayed for in the prayer clause? (OPP)
10) It is made clear that as the detailed issues including the issues framed previously were settled again by the Ld. Predecessor of the court, the issues settled on 19.01.10 are taken into consideration and only these issues were pressed by both the counsel at the final stage.
11) To prove his case the plaintiff himself stepped into witness box as PW1 by tendering his affidavit Ex. PW1/A. He tendered detailed calculation of the amount claimed as Ex.PW1/B, inter office memo no. ERHQ/F & A dated 16.01.2002 was already Ex.P01. The Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 10 F.S. Chauhan vs. National Thermal Power Corporation Limited document marked Ex.PW1/A could not be endorsed earlier on 01.03.2011 and the same was marked as Ex.PW1/C as per order dated 19.08.2013. Thereafter evidence of the plaintiff was closed by plaintiff himself on 17.09.14.
12) On the other hand to controvert the claim of the plaintiff and to prove their case, Sh. Onkar Nath, Sr. Manager (HR) of the defendant no.1 stepped into witness box as DW1. This witness was not cross examined as none had appeared on behalf of plaintiff on the said date i.e. 07.11.16 and thereafter, defendant evidence was closed by him vide statement dated 07.11.2016. Matter was adjourned for final arguments, however, on 14.12.16, an application u/s 114 CPC was filed on behalf of plaintiff, which was withdrawn by him on 29.07.18 and another application u/o 18 Rule 17 CPC for recall of DW1 filed. Said application was allowed vide order dt. 01.02.18. DW1 was completely cross examined on 25.07.18. During his cross examination some documents were also placed on record, which were tendered as DW1/PA to DW1/PD, DW1/X and DW/PX. Thereafter, evidence was closed on behalf of defendants by the counsel.
13) Arguments advanced by the plaintiff in person, who is also an advocate and again counsel for the defendants have been heard. The plaintiff also filed his written submissions as well as rejoinder submissions. Same have been throughly perused and again file has been minutely perused and my issue wise findings with reasons thereof are as under : Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 11 F.S. Chauhan vs. National Thermal Power Corporation Limited ISSUE No. 1
14) The burden of proof to prove this issue was upon the plaintiff, however, during the final arguments, the counsel for plaintiff stated at bar he does not want to press the same as this is not of much consequence at this stage. Accordingly, this issue is decided in negative as not being pressed.
ISSUE No. 215) The burden of proof to prove this issue was upon the defendant. It is argued by counsel for defendant that plaintiff has impleaded the Chairman and Managing Director of defendant no. 1 as defendant no. 2 in the present suit without any cause of action. It is submitted that the defendant no. 2 is not responsible for acts and liabilities of defendant no. 1 company and again there are no allegations against defendant no. 2 and therefore, the suit is bad for misjoinder of parties.
16) On the other hand, the plaintiff has failed to specify, why he impleaded defendant no. 2 in the present suit, though he has no relief sought against defendant no. 2. As reflected from para no. 13 of the plaint, he had also served a notice dt. 04.02.02 upon defendant no. 2, however, it is settled proposition in law that a Chairman or Managing Director of a company is not responsible for acts and liabilities of the company and therefore, undoubtedly, the suit of the plaintiff is bad for misjoinder of parties as defendant no. 2 was unnecessarily impleaded in the present suit. Accordingly, Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 12 F.S. Chauhan vs. National Thermal Power Corporation Limited issue no. 2 is decided against the plaintiff and in favour of defendant no. 2.
ISSUE No. 317) The burden of proof to prove this issue was again upon the defendant. It is argued by counsel for defendant that as refelected from para no. 5 of the plaint, the proceedings in which regard indemnification has been sought either took place at Ghaziabad or at Allahabad in UP. Again, the plaintiff while working with defendant no. 1 company was either posted at Dadri or at Patna and therefore no cause of action arose in Delhi to make the territorial jurisdiction of the present court. It is further submitted that as alleged in para no. 15 of the plaint, the residence of defendant no. 2 at Delhi can not create the jurisdiction in Delhi. The counsel for defendant has further relied upon the authority of "M/s. Patel Roadways Limited, Bombay vs. M/s. Prasad Trading Company" AIR 1992 SC 1514 and it is argued that as per the law laid down in the said authority, it has been clarified that the parties can not confer the jurisdiction on the court where a corporation has its principal office. Again reliance is also placed upon the authority of "Pramod Kumar Gupta vs. Skyline Chemicals" 2001 AIHC 3553.
18) On the other hand, it has been argued by plaintiff that as the principal office of defendant no. 1, is at Lodhi Road, New Delhi and again as the residence of defendant no. 2 is also of Lodhi Road, New Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 13 F.S. Chauhan vs. National Thermal Power Corporation Limited Delhi, the present court has territorial jurisdiction to entertain the suit as per Section 20 CPC.
19) Heard. The question of jurisdiction in the present case is covered within the scope of Section 20 CPC. For ready reference, the provision is reproduced herein as under:
"20. Other suits to be instituted where de- fendants reside or cause of action arises:- Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction :--
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain;
or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the de- fendants who do not reside, or carry on busi- ness, or personally work for gain, as afore- said, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
Explanation:- A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place."
20) Now, in Hakam Singh v. M/s. Gammon (India) Ltd., [1971] 3 SCR Page 314 it was held that "corporation" referred to in Section 20 meant Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 14 F.S. Chauhan vs. National Thermal Power Corporation Limited not only a statutory corporation but also a company registered under the Indian Companies Act. It was also held that it is not open to the parties by agreement to confer jurisdiction on any court which it did not otherwise possess under the Code.
21) Again, perusal of the authority of Patel Roadways (supra) provides that the cope of Section 20 CPC has been discussed at length by Hon'ble Apex Court and relevant paragraphs are reproduced herein as under : Clauses(a) and (b) of Section 20 inter alia refer to a court within the local limits of whose jurisdiction the defendant inter alia "carries on business". Clause (c) on the other hand refers to a court within the local limits of whose jurisdic- tion the cause of action wholly or in part arises. It has not been urged before us on behalf of the appellant that the cause of action wholly or in part arose in Bombay. Conse- quently clause (c) is not attracted to the facts of these cases. What has been urged with the aid of the Explanation to Section 20 of the Code is that since the appellant has its principal office in Bombay it shall be deemed to carry on business at Bombay and consequently the courts at Bombay will also have jurisdiction. On a plain reading of the Explanation to Section 20 of the Code we find an apparent fallacy in the aforesaid argument. The Explanation is in two parts, one before the word "or" occurring between the words "office in India" and the words "in respect of" and the other thereafter. The Explanation applies to a defendant which is a corporation which term, as seen above, would Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 15 F.S. Chauhan vs. National Thermal Power Corporation Limited include even a company such as the appellant in the instant case. The first part of the Explanation applies only to such a corporation which has its sole or principal office at a particular place. In that event the courts within whose jurisdiction the sole or principal office of the defendant is situate will also have jurisdiction inasmuch as even if the defendant may not be actually carrying on business at that place, it will "be deemed to carry on business" at that place because of the fiction created by the Explanation. The latter part of the Explanation takes care of a case where the defendant does not have a sole office but has a princi- pal office at one place and has also a subordinate office at another place. The words "at such place" occurring at the end of the Explanation and the word "or" referred to above which is disjunctive clearly suggest that if the case falls within the latter part of the Explanation, it is not the Court within whose jurisdiction the principal office of the defendant is situated but the court within whose jurisdiction it has a subordinate office which alone shall have jurisdic- tion "in respect of any cause of action arising at any place where it has also a subordinate office".
....We would also like to add that the interpretation sought to be placed by the appellant on the provision in question renders the explanation totally redundant. If the intention of the legislature was, as is said on their behalf, that a suit against a corporation could be instituted either at the place of its sole or principal office (whether or not the corporation carries on business at that place) or at any other place where the cause of action arises, the provisions of clauses (a), (b) and (c) Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 16 F.S. Chauhan vs. National Thermal Power Corporation Limited together with the first .part of the explanation would have completely achieved the purpose. Indeed the effect would have been wider. The suit could have been instituted at the place of the principal office because of the situation of such office (whether or not any actual business was carried on there). Alternatively, a suit could have been instituted at the place where the cause of action arose under clause (c) (irrespective of whether the corpora- tion had a subordinate office in such place or not). This was, Therefore, not the purpose of the explanation. The explanation is really an explanation to clause (a). It is in the nature of a clarification on the scope of clause (a) viz. as to where the corporation can be said to carry on business. T'his, it is clarified, will be the place where the principal office is ituated (whether or not any business actually is carried on there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the corporation is not located there) so long as there is a subordinate office of the corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for the purposes of clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business. If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be carrying on Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 17 F.S. Chauhan vs. National Thermal Power Corporation Limited business, the disjunctive "or" will not be there. Instead, the second part of the explanation would have read "and in respect of any cause of action arising at any place where it has a subordinate office, also at such place".
22) In the case of Pramod (Supra), the judgment of Patel Roadways was reiterated and it was held as follows:
"In view of the specific observations of the Supreme Court that Explanation relates to clauses (a) and (b) and not to clause
(c), this court has the territorial jurisdiction as cause of action has arisen in Delhi as the defendant approached the plaintiff in Delhi and appointed him as its Agent at Delhi and as per terms and conditions of the agreement, the commission was also payable at Delhi."
23) In view of this legal position, let me advert to the facts of the present case. It is not in dispute that the subordinate office of defendant no.1 was at Dadri where the plaintiff was also working and therefore, it is Section 20 (a) CPC, which is applicable in the present case and as laid down by Hon'ble Apex Court, the plaintiff had to file the suit in the jurisdiction of the concern court at Dadri only and therefore, the present court has no territorial jurisdiction to entertain the suit in any manner. Accordingly, this issue again is decided against the plaintiff and in favour of defendant no. 1. Regarding defendant no. 2, it is important to observe that the suit is bad for misjoinder of defendant no. 2 as discussed above.
Civil Suit No: 340/16 (Vivek Kumar Agarwal)
CJ07(C)/THC/Delhi
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F.S. Chauhan vs. National Thermal Power Corporation Limited ISSUE No. 4
24) The burden of proof to prove this issue was again upon the defendant. It is argued that the bill in question as alleged by plaintiff was dt. 01.04.1998 as mentioned in para no. 5 (vii) of the plaint and that even if, the same is taken to be dt. 01.04.1999 as pressed by plaintiff, suit is barred by limitation as being filed on 16.05.02, beyond the period of three years. It is submitted that the cause of action had arisen in favour of plaintiff on 05.04.1999, when the letter was issued by the DGM of defendant no. 1 to plaintiff, vide which his request for sanction of tour advance was declined and even if, the period of limitation is counted from the said date, suit is barred by limitation.
25) On the other hand, the plaintiff has argued that the defendants themselves have admitted in the written statement that the said letter was dt. 01.04.1999 and again in his rejoinder in para no. 5(v), 6 and 8, he has clarified that the said letter was dt. 01.04.1999 and that the letter issued by DGM of defendant was dt. 05.04.1999. It is further submitted that the cause of action in favour of plaintiff arose on 17.05.1999, when the defendant company failed to pay the amount of indemnity to the plaintiff after the final order of Hon'ble High Court dt. 17.05.1999, placed on record as Ex. PW1/Mark DA.
26) Heard. It is to observe that by way of present suit, the plaintiff has sought two reliefs as mentioned in the prayer clause. Firstly, for commanding the defendants to settle the claim of Rs. 7371/ dt. 04.01.1999 against advance amount of Rs. 6700/ and secondly, seeking recovery of Rs. 99,920/ as expenses incurred by him in Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 19 F.S. Chauhan vs. National Thermal Power Corporation Limited pursuing the matter and the interest and compensation amount. Now even if, at this stage, without going into the dispute that the claim dt. 01.04.1999 was submitted by the plaintiff with the defendant or not, the version of plaintiff is taken to be true, the suit of the plaintiff with respect to said relief is certainly beyond the period of limitation of three years. It is not the case that the second relief of recovery of Rs. 99,920/ has been sought by the plaintiff in continuation of his claim of Rs.7371/ dt. 01.04.1999 and therefore, both the reliefs are severable and therefore, the plaintiff can not take the plea that the period of limitation was extended by order of Hon'ble High Court dt. 17.05.1999. Moreover, as specified in para no. 5(vii) of the plaint, allegedly the plaintiff had spent amount of Rs. 6700/ and had submitted his claim of Rs. 7371/ dt. 01.04.1999 (wrongly typed as 01.04.1998) under his office memo dt. 01.04.1999 and therefore, it was a separate claim of the plaintiff and has nothing to do with the further claim of the plaintiff. Again, as rightly pointed out by counsel for defendants, the cause of action had also arisen in favour of plaintiff by issuance of letter dt. 05.04.1999 by the DGM of defendant no. 1, vide which the request of the plaintiff for advance sanction was declined. The present suit has been filed on 16.05.02 only and therefore, the first relief claimed by way of present suit is barred by limitation.
27) The issue no. 4 is disposed off accordingly.
ISSSUE No. 528) The burden of proof to prove this issue was upon the plaintiff. It is argued by the plaintiff that admittedly he was the employee of the Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 20 F.S. Chauhan vs. National Thermal Power Corporation Limited defendant no. 1 designated as Manager and again, as per article 69(ii) of Memorandum of Association of defendant no. 1 company, every Manager or officer of the company is entitled for indemnification incurred by him in defending any proceeding, whether civil or criminal, in which judgment is given in his favour. Plaintiff has advanced his arguments at length regarding his entitlement and his claim submitted with the defendant no. 1. Firstly, the attention of the court is drawn towards the admissions to the averments of para no. 5 of the plaint made by the defendants. It is argued that in para no. 11 of WS, the defendant had alleged about the recovery of Rs. 6700/ from the plaintiff and said averment is in nature of admission to the claim of the plaintiff. It is submitted that in the WS, the plea has been taken that if any document was submitted by the plaintiff on 01.04.1999, same was taken back on 13.04.1999, however, no such plea was previously taken in the notice dt. 16.01.02, issued by defendants and they can not be allowed to take this plea at the subsequent stage. It is argued that the defendants failed to examine the concerned controlling officer, who could have proved the version of the defendants in this regard and also failed to produce the original register. Attention is drawn towards the document Ex. DW1/X, wherein at serial no. 210, the IOM regarding legal and administrative expenses given by the plaintiff has been mentioned and it is argued that below the said entry, a entry has been manipulated on behalf of defendants that same was taken back on 13.04.1999 by the plaintiff. It is contended that firstly there is no signature of plaintiff on the said entry and Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 21 F.S. Chauhan vs. National Thermal Power Corporation Limited secondly, there was no such practice in the office of defendant no. 1 to return any document in this manner and rather, there should have been a separate entry of return in a separate register, however, the defendants failed to prove the same. It is further argued that the plaintiff had also sent interoffice memo and reminders to the concerned officer of defendant no. 1 on the subsequent dates and they have not been disputed by the defendants, which clearly shows that the defendants had duly received the said claim, however, did not take any decision on the same and rather manipulated the entry in the dispatch register. Regarding the admissibility of these documents, the plaintiff has referred to Section 114(g) of Indian Evidence Act and it is stated that as the defendants withheld the best evidence, adverse inference should be drawn against them. Again reliance is also placed on authority of "Marwari Kumhar and Others vs. Bhagwanpuri Guru Ganeshpuri and Another"
AIR 2000 SC 2629 and it is argued that as the contents of the documents placed on record by the plaintiff have not been denied on behalf of defendants, they are deemed to be admitted.
29) The plaintiff has further drawn the attention of the court towards the cross examination of DW1 wherein he was confronted with the document Ex. DW1/X and it was put up him that he had not produced the complete copy of the register. It is further argued that said witness had no concern with the Dadri office of defendant no.
1 and was posted at office of Patna only and therefore, his testimony can not be relied upon. Again that he has clearly admitted that the order was passed by Hon'ble High court regarding Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 22 F.S. Chauhan vs. National Thermal Power Corporation Limited which the indemnification has been sought. Accordingly, it is submitted that the plaintiff is duly entitled for settlement of his claim.
30) On the other hand, the counsel for defendants has passionately argued that the whole case of plaintiff is based upon the applicability of the provision of Article 69 of Memorandum of Association of defendant no. 1 company, however, same is not attracted in the case of plaintiff. It is argued that to attract the said provision, the plaintiff ha firstly to satisfy that he was the "Manager" as defined in Sec. 2(24) of Companies Act, which provides that management has to be of whole affairs, however, the plaintiff was manager as designated only and not of whole affairs. In this regard, he has also placed reliance upon authority of "Basant Lal & Another vs. Emperor" AIR 1918 Lahore 170. Again it is argued that the plaintiff had not pursued the criminal misc. application before Hon'ble High Court of Allahabad in discharge of his official duty but in his personal capacity. It is submitted that in his cross examination dt. 05.05.12, plaintiff has clearly admitted that in the said application, defendant no. 1 was not a party. It is submitted that the application u/s 156(3) Cr.P.C. was filed by an outsider of the company namely Rewati against some official of defendant no. 1, against whom charge sheet was issued by defendant no. 1 company and plaintiff was cited a witness to the said proceedings and at no point of time any proceedings were initiated against the plaintiff. It is submitted that even the final order dt. 17.05.1999 passed by Hon'ble High Court, placed on Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 23 F.S. Chauhan vs. National Thermal Power Corporation Limited record as Ex. PW1/Mark DA clearly provides that the plaintiff had appeared in person and was not representing NTPC/ defendant no.
1. Moreover, vide said order, the FIR filed in pursuance of the order of Ld. ASJ was sustained and accordingly in no manner, it can be said that it was in favour of the plaintiff and again he was merely a proforma party in the said application. Accordingly, it is argued that at no stretch of imagination, it can be concluded that the said order was in favour of the plaintiff and therefore, again Article 69 is not applicable in the case of plaintiff.
31) It is further contended that even if for sake of arguments, it is taken that Article 69 applies in the present case, the plaintiff has not led any evidence to establish the details of his expenses as mentioned in para no. 8 of the plaint. It is submitted that in his document Ex. PW1/B, the plaintiff has mentioned the stay of 20 days in Allahabad, however, has not provided any details of the same and again has not provided any details of the legal assistance and name of advocate, who had assisted him. It is further argued that the plaintiff has taken the plea that he had submitted the claim dt. 01.04.1999 with the defendant no. 1 and as per the record of defendant no. 1 said claim was taken back by plaintiff himself and same has been denied by the plaintiff, however, he did not make any effort to prove his version. Neither he served any notice u/o 12 Rule 8 CPC upon the defendant no. 1 to produce the complete register as alleged nor he summoned the concerned PA or DGM of defendant no. 1 to prove his version. It is submitted that it is not the plea of the plaintiff that the extract of dispatch register produced Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 24 F.S. Chauhan vs. National Thermal Power Corporation Limited before the court is not genuine. Accordingly, it is submitted that the whole case of plaintiff is false.
32) Lastly counsel for the defendants has also drawn the attention of the court towards the prayer clause of the plaint wherein two reliefs have been sought and it is submitted that as reflected from para no. 17 of the plaint, no valuation has been made qua relief of settlement of bill and therefore, the suit of the plaintiff itself is not maintainable regarding this relief. It is further submitted that though said objection was not taken in the WS and there is no issue framed to this effect, however, being issue of law can be taken into consideration by the court at any stage.
33) In rebuttal, the plaintiff has argued that the document in question Ex. DW1/PX has alreadybeen proved by plaintiff and there was no requirement to summon any witness from the office of defendant no.1 and rather the burden was upon defendant no.1 to prove that his claim was returned as being alleged by defendant no.1 only. Again regarding the plea that Article 69 is not applicable to him, it is contended that the said Article provides for indemnification to any manager or officer of the company and as plaintiff was designated as Manager, he was certainly working as an officer of defendant no.1 company. It is further submitted that the word "indemnity" means costs or losses and expenses borne by the person who was indemnified and in this regard he has also referred to Section 124 and 125 of Indian Contract Act. It is argued that Article 69 provides the duty of director of the defendant no.1 company to assess the losses or expenses incurred by the plaintiff Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 25 F.S. Chauhan vs. National Thermal Power Corporation Limited and in the said assessment not the loss of the plaintiff but the benefit of indemnifier has to be seen. It is submitted that said Article is based upon the principle of "unjust enrichment". Regarding the details of th expenses as mentioned in the document Ex. PW1/B, it is submitted that the plaintiff cannot be expected to remember all the said details and again cross examination of witness is not the test of his memory. That legal assistance not only covers the representation before the court but also the drafting of pleadings. It is further argued that defendant no.1 is also bound to indemnify the plaintiff by principle of Promissory Estoppel as the officer of defendant no.1 himself had advanced the amount of Rs. 6700/ to the plaintiff and the plaintiff believing on the same took further steps for defending the criminal misc. application before Hon'ble High Court. In this regard, reliance is also placed upon the authority of "Amrit Banaspati Co. Ltd. & Anr. vs. State of Punjab and Another" (1992) 2 SCC 411. Lastly regarding the valuation of the suit as alleged by the counsel for defendants, it is submitted that his relief for settlement of claim is only of Rs. 671/ which is covered in the relief of recovery of Rs. 99,920/ and not the separate relief. It is submitted that the whole suit is for indemnification and his reliefs cannot be separated. In this regard, he has also relied upon the authority of "S. Rm. Ar. S. Sp. Sathappa Chettiar vs. S. Rm. Ar. Rm. Ramnathan" AIR 1958 SC 245 (V 45 C 40).
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F.S. Chauhan vs. National Thermal Power Corporation Limited
34) After having heard the submissions of both the parties at length, I am of the view that adjudication of this issue requires determination of three questions:
(1). Whether the suit has been properly valued, (2). Whether the Article 69 of Memorandum of Association of defendant no.1 company is applicable in the facts of the present case, (3). If question no.2 is decided in positive, whether the plaintiff had submitted his claim of Rs. 7,371/ with defendant no.1 and same was not decided by the concerned officer of defendant no.1.
35) Regarding the first question of valuation of suit, it is observed that the plaintiff has sought two reliefs by way of present suit. The first relief sought by the plaintiff is in nature of mandatory injunction and second relief is recovery of money. Now, for relief of injunction, valuation of the suit for the purpose of court fees has to be made as per paragraph (iv) of Section 7 of the Court Fees Act, 1870. Said provisions gives a right to the plaintiff to place any valuation that he likes on the relief he seeks, subject, however to any rules made under section 9 of Suit Valuation Act and the court has no power to interfere with the valuation of plaintiff. In this regard, I seek reliance upon the Authority of Commercial Aviation and Travel Company v. Vimal Panna Lal AIR 1988 SC 1636. However, this is the position when a suit simplicitor for injunction has been filed. In the present case, the plaintiff has sought two separate reliefs and therefore, he was certainly required to provide the separate valuation of suit for both the reliefs. However, on perusal of para 17 of the plaint, it is very clear that the Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 27 F.S. Chauhan vs. National Thermal Power Corporation Limited plaintiff has valued the suit only for the relief of recovery of Rs. 99, 920/ and no valuation has been made for first relief of mandatory injunction. It is made clear that the authority of Chettiar (Supra) does not help the plaintiff in any manner as the said suit was for partition of joint family properties and an account in respect of joint family assets and therefore, it was the accumulated relief and not two separate reliefs. Again the para no. 15 of the said judgment as referred by plaintiff, only provides that the valuation of suit for purpose of court fee and jurisdiction can be same and nowhere provides that the particular relief can be left without being valued. Accordingly, it is to be concluded that the suit is bad for non valuation of the suit qua first relief. First question is decided accordingly.
36) Coming to the second question regarding the applicability of Article 69, I am of the view that said provision requires thorough appreciation. For ready reference, said provision is reproduced herein as follows:
Indemnity and Responsibility
69. (i) Subject to the provision of Section 201(i) of the Companies Act, every Director, Manager, Auditor, Secretary or other officer or employee of the Company shall be indemnified by the Company against and it shall be duty of the Directors out of the funds of the Company to pay all costs, losses and expenses (including travelling expenses) which any such Director, Manager, officer or Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 28 F.S. Chauhan vs. National Thermal Power Corporation Limited employee may incur or become liable to by reason of any contract entered into or act or deed done by him or them as such Director, Manager, Officer or servant or in any other way in the discharge of his duties and the amount for which such indemnity is proved shall immediately attach as a lien on the property of the Company and have priority as between the Members over all other claims.
(ii) Subject as aforesaid every Director, Manager or Officer of the Company shall be indmnified against any liability incurred by him or them in defending any proceedings whether civil or criminal in which judgement is given in his or their favour or in which he is or they are acquitted or in connection with any application under Section 633 of the act in which relief is given to him or them by the Court.
37) On minute perusal of the said provision, I am of the view that following conditions are to be satisfied to attract the said provision:
a). That the plaintiff was working with the defendant no.1 company as director, manager or officer;
b). That any liability was incurred by the plaintiff in defending any proceeding whether civil or criminal;
Civil Suit No: 340/16 (Vivek Kumar Agarwal)
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F.S. Chauhan vs. National Thermal Power Corporation Limited
c). That such liability was incurred by him while discharging his duties;
d). That judgment of proceeding was given in his favour or
e). He was acquitted in the said proceeding or in connection with any application u/s 633 of the Companies Act, in which relief was given to him.
38. It is to further observe that undoubtedly if there are criminal proceedings, same can be defended by one person only in capacity of accused and not otherwise. In the Adversarial Criminal Justice System followed in India, there are only two parties including the prosecution or complainant and the accused and there cannot be any other third party. The said finding is further corroborated by the fact that the latter part of the said provision states "or in which he is or they are acquitted" and therefore, undoubtedly the words " that judgment of proceeding was given in his favour" are to be read in the same line by applying the principle of ejusdem generis.
39) In view of this position, let me advert to the facts of the present case to appreciate if said provisions is attract in the givens facts or not. The whole case of the plaintiff is based upon the plea that he had defendant himself as well as the defendant no.1 before Hon'ble High Court of Allahabad in Criminal Misc. application no. 3688 of 1998 filed u/s 482 Cr.P.C titled as G.P. Singh & Ors v. State of U.P. The copy of said order is placed on record as Ex. PW1/Mark DA.
Civil Suit No: 340/16 (Vivek Kumar Agarwal)
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F.S. Chauhan vs. National Thermal Power Corporation Limited Perusal of said order clearly provides that defendant no.1 was not a party in the present application and that the plaintiff namely F.S. Chauhan was respondent no.3 and had appeared in person. Accordingly, it is not the case that the said proceedings were defended by the plaintiff on behalf of defendant no.1 company as defendant no.1 was not the party to the said proceedings and moreover, this is not the case of the plaintiff that any directions were ever given to him by defendant no.1 company to pursue the said matters. Nothing has been placed on record in this regard. He could not have taken this responsibility at his own by his whims and fancies that he was discharging his official duty. Above all of this, it is important to observe that the plaintiff was not the accused in the said proceedings and merely by the fact that he was the respondent in the said application before Hon'ble High Court of Allahabad, it cannot be concluded that he was "defending the same", as discussed above. If the plaintiff was made a party in the said application, it could have been on the account of the fact that he was the witness in the departmental enquiry and the criminal proceedings were initiated with respect to the same allegations which were part of the departmental enquiry. In that situation, the plaintiff was merely a performa party in the said criminal misc. application and neither any relief was sought against him nor the order of Hon'ble High Court in the said application could have affected the plaintiff in any manner. Last but not the least, regarding the plea of promissory estopple taken on behalf of plaintiff, it is to observe that firstly the plaintiff has failed to prove specifically that Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 31 F.S. Chauhan vs. National Thermal Power Corporation Limited said amount of Rs. 6700/ was granted to him for the said criminal misc. application only and moreover, it is settled proposition of law that there cannot be any estoppel against law. When the plaintiff is not entitled for any indemnification in law, even if any amount was released by one officer of defendant no.1, the plaintiff cannot take the advantage of the principle of promissory estoppel.
40) In view of above said discussion, I am of the conclusion that the provision of Article 69 is not applicable in the present case of plaintiff and question no.2 is determined accordingly.
41) Now coming to the question no.3, it is to observe that firstly it was the claim of plaintiff that he had submitted the claim of Rs. 7,371/ on 01.04.1999 with the concerned DGM of defendant no.1 and that it was forwarded. Same has not been specifically denied on behalf of defendant no.1, however, specific plea was taken that if any such claim was submitted, same was taken back by the plaintiff himself on 13.04.1999. In this regard, the reliance has been placed upon the entry in the document Ex. DW1/X. Same is clearly reflected from perusal of said document, however, the plea was taken on behalf of plaintiff that it was not a genuine entry and not as per the practice of the office of defendant no. 1. Again it is the case of plaintiff that the defendants withheld the said evidence from the court and therefore, adverse inference should be drawn against them under section 114
(g) of Indian Evidence Act. It is to observe that Under Section 114 of the Evidence Act, the Court has the option; the court may or may not Civil Suit No: 340/16 (Vivek Kumar Agarwal) CJ07(C)/THC/Delhi 32 F.S. Chauhan vs. National Thermal Power Corporation Limited raise presumption on the proof of certain facts. Drawing of presumption under Section 114 (g) of Evidence Act depends upon the nature of fact required to be proved and its importance in the controversy, the usual mode of proving it; the nature, quality and cogency of the evidence which has not been produced and its accessibility to the party concerned, all of which have to be taken into account. It is only when all these matters are duly considered that an adverse inference can be drawn against the party. In this regard, reliance can be placed on the authority of Tomaso Bruno & Anr vs State Of U.P on 20 January, 2015 by Hon'ble Apex Court. In the present case, when the plaintiff questioned the entry in the extract of the receipt register/dairy produced before the court, the onus had shifted upon him only to prove the said plea and for the said purpose he could have either served the notice u/o XII Rule 8 CPC upon the defendant no.1 to produce the relevant record or could have summoned the concerned person from office of defendant no.1, who was dealing with the receipt and return of the inter office memo, when the plaintiff was serving with the defendant no.1. However, no such effort was made on behalf of plaintiff and therefore, for his own fault, he cannot be allowed to plead for drawing adverse inference against the defendants. Accordingly, I come to the conclusion that the plaintiff has failed to prove that he had submitted his claim of Rs. 7371/- with the officer of defendant no.1 and therefore, no question arises for its determination by defendant no. 1. Therefore, question no.3 is decided accordingly.
42) In view of the determination of all the three questions, discussed above, the only inescapable conclusion is that the plaintiff has failed to discharge his burden and therefore, this issue is decided against the plaintiff and in favour of defendants.
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F.S. Chauhan vs. National Thermal Power Corporation Limited ISSUE No. 6
43) The burden of proof to prove this issue was again upon the plaintiff.
However, as discussed in findings of Issue no.5, the claim of plaintiff is not maintainable as Article 69 has no application in the present case. Again, it is also important to observe that the plaintiff has claimed the amount of Rs. 99,920/ towards indemnification of his expenses allegedly incurred in defending the criminal misc. application before Hon'ble High Court of Allahabad and has provided the details of the same in his own document Ex. PW1/B, however, he has failed to provide any specific details regarding his travel of nine times to Allahabad and his stay of 20 days and regarding local convenience and his leaves and again regarding expenses incurred on stationary as well as on the legal assistance as mentioned in the said document. It is to observe that allegedly the plaintiff had submitted his claim in the year 1999 and again it is also a matter of fact that he was working as an officer as manager with the defendant no.1 company and therefore, he was certainly required to keep the record of all the travel details and other expenses, if any and he cannot be allowed to say simply that he does not remember the same. He has claimed the expenses from a public sector company and same could not have been given to him on the basis of his own vague calculations. Moreover, as discussed above the plaintiff is not entitled for indemnification of any amount in any manner. Accordingly, Issue no.6 is also decided against the plaintiff and in favour of defendants.
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F.S. Chauhan vs. National Thermal Power Corporation Limited Relief
44) In view of findings of all the above issues, suit of plaintiff is hereby dismissed. It is further pertinent to mention that the plaintiff had filed the present suit without any grounds against the defendant no.1, which is a public sector company and the litigation was dragged for more than 16 years and the defendant no.1 was compelled to spend the public funds for such a long period for defending a false suit. Accordingly, the plaintiff is also burdened with the cost of Rs. 25,000/ to be paid to the defendant no.1.
45) Decree sheet be prepared accordingly and file be consigned to Digitally Record Room after due compliance. VIVEK signed by VIVEK KUMAR AGARWAL KUMAR Date:
AGARWAL 2018.11.02
16:54:44
+0530
Pronounced in open court: (Vivek Kumar Agarwal)
Dated: 31.10.2018 Civil Judge07, Central,
Tis Hazari Courts, Delhi
Note :This Judgment contains thirty four pages and all the pages have been checked and signed by me.
(Vivek Kumar Agarwal)
Civil Judge07, Central,
Tis Hazari Courts, Delhi
Civil Suit No: 340/16 (Vivek Kumar Agarwal)
CJ07(C)/THC/Delhi