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Delhi District Court

Vide This Order vs . on 9 November, 2015

                 IN THE COURT OF SH. VINOD KUMAR MEENA, 
           CIVIL JUDGE ­ 13 (CENTRAL), TIS HAZARI COURTS, DELHI


CS No. 42/15


               NISHITIKA INVESTMENTS & FINANCE PVT. LTD. 

                                                VS. 

                                         AMRIT KAUR


                       APPLICATION FOR CONDONATION OF DELAY


1.          Vide this order, I shall dispose of the application for condonation
of delay which has been filed by the plaintiff along with plaint.


2­          Before proceeding ahead with deciding the present application,
the Court deem it fit to mention here the fact as averred by the plaintiff in
plaint. 


3­          It   is   pleaded   by   the   plaintiff   that   the   plaintiff   company   is  in
business of dealing of shares and stock brokers and the defendant no.1 is
the illegal occupier of the shares of the plaintiff as the defendant no. 1 had
not paid any consideration amount to the plaintiff against the transactions
of the shares. It is subsequently pleaded by the plaintiff in the plaint that the
plaintiff   had   delivered   /   transferred   12,500   shares   of   M/s   Virtual   Global
Education   Ltd.   having   face   value   of   10   each   on  17.04.2004  to   the

CS No.  42/15 
Nishitika Investments & Finance Pvt. Ltd. vs. Amrit Kaur                             Page 1 of 7
 defendant   no.1   and   the   defendant   no.1   assured   that   he  would  pay   the
amount of the face value of these shares to the plaintiff or return back the
shares. It is also pleaded by the plaintiff in the plaint that the plaintiff found
in the last year that the defendant no.1 had  not made the payment of face
value   of   the   shares.   Accordingly,   present   suit   is   filed   for   seeking   the
declaration that the transfer receipt / certificate dt 25.02.2004 be declared
as null and void and the defendant no.1 be directed to return the shares to
the plaintiff.


4­          Through   the   present   application   the   plaintiff   has  sought  the
condonation  of delay in filing present suit. It   is   submitted   by   the   Ld.
Counsel   for   the   plaintiff   that   the   present   application   for   condonation   of
delay   be   disposed   of   as   allowed   as   the   plaintiff   company   was   having
sufficient reason as the company was not aware about  the default of the
payment on the part of the defendant no.1.    


5­          Per   contra   it   is   submitted   by   the   Ld.   Counsel   for   the
defendant/respondent   that   present   application   is   hopelessly   time   bared

and has been filed without any basis. It is further submitted by the Ld. Counsel defendant that the suit has been filed almost after eight years when the cause of action first arose. It is further submitted by the Ld. Counsel for the defendant that application be disposed of as dismissed and plaint be rejected under order 7 Rule 11 CPC.

6­ After hearing the submissions of both the parties and after going CS No. 42/15 Nishitika Investments & Finance Pvt. Ltd. vs. Amrit Kaur Page 2 of 7 through the contents of the application and reply to the application, it is observed by the Court that admittedly the impugned transaction w.r.t the delivery/transfer of the impugned shares had occurred on 25.02.2004 or at the almost on 17.04.2014 as per the pleadings of the plaintiff. It is the contentions of the plaintiff that the defendant has not made the payment w.r.t the impugned share. It is again pertinent to mention here that the present suit has been filed for decree of declaration thereby seeking declaration that the transfer receipt/transfer certificate dated 25.02.2004 (by which the plaintiff transferred the impugned shares in favour of the defendant no.1) be declared as null and void. So the present suit is filed for declaration. The limitation period for filing the suit for declaration has been provided in part III of Schedule in the Limitation Act 1963. Article 58 in the schedule of Limitation Act is the relevant article w.r.t the facts of the present suit. Article 58 of Limitation Act provides that to obtain any other declaration, a suit must be filed within 3 years when the right to sue occrues. Accrual of the right to sue for the plaintiff can be said only when there is a infringement or atleast a clear and unequivocal threats to infringe that right by the defendant. In the present suit, the plaintiff has pleaded that the defendant no.1 had not made the payment, and the documents, pertains to the transfer of impugned shares, be declared null and void. The limitation period for recovery of the amount expired at the most on 18.04.2007 and if it is deemed that right to sue first accrued on 18.04.2007 then the suit might have been filed at the most on 19.04.2010; however, the present suit has admittedly filed on 28.02.2015 i.e. almost after 5 years from the date when the limitation period expired.

7­ Coming to the present application in hand, it is observed by the court that the present application is silent about the period which is sought to be condoned. It is also pertinent to mention here that the application only provides that there was sufficient reason on the part of the plaintiff company in not filing the present suit within the limitation period. It is again pertinent to mention here that the application is totally silent about the contents which constituted 'sufficient cause' in not filing the present suit within limitation period. It is again pertinent to mention here that the plaintiff has only mentioned that the plaintiff's company was not aware about the facts that defendant no. 1 had made a default in paying the amount towards impugned shares. At this stage, court deem it fit to mention here that "sufficient cause" as mentioned under the section 5 of Limitation Act has not been defined in the Limitation Act or in any other Act, however it is trite now that the expression "sufficient cause" must receive a liberal construction, so as to advance substantial justice when no negligence or inaction or want of bona­fide is imputable to parties. It is also trite that to decide whether explanation furnished would constitute sufficient cause or not, will be dependent upon facts of each case. Now the question arises as to whether the explanation furnished/provided by the plaintiff in the application is showing that no negligence or inaction or want of bonafide can be imputed upon the plaintiff. It is provided by the plaintiff in the application the in the last year the plaintiff conducted the internal audit of accounts and found that some shareholders did not pay the share price. The explanation given by the plaintiff is not believable. It is very unlikely CS No. 42/15 Nishitika Investments & Finance Pvt. Ltd. vs. Amrit Kaur Page 4 of 7 that a private limited company has not conducted the audit of its accounts for almost more than 10 years. The explanation itself showing/suggesting the negligence/inaction/ lack of bonafide on the part of the plaintiff company. Once it is clear that the suit has been filed after a gap of more than five years when the limitation period expired and once it is clear that there was lack of bonafide on the part of the plaintiff in not filing the present suit within limitation period then the court is of the view that the suit must no be continued. At this stage, court deem it fit to mention here the relevant observation made by the Hon'ble superior courts in judgment as relied upon by the defendant to support his argument against the present application for condonation of delay. The Hon'ble Hight Court in Schender India Pvt. V/s Sirpur Paper Mils Ltd. 2010 (168)DLT 723 has observed that delay in filing of a suit cannot be condoned either under Section 5 of the Limitation Act or under Section 151 of CPC. The relevant para from Schender India Pvt. (Supra) is quoted here as under for the sake of clarity:­ "10. It may be further pertinent to mention here that although the delay which a party may cause in filing an appeal or an application can be condoned under Section 5 of the Limitation Act but Section 3 clearly bars the filing of a suit or entertaining a suit which is hit by limitation. Section 5 of the Limitation Act does not apply to the suit as the word "suit" is omitted by the legislature in the language of the said section. Therefore, delay in filing the suit cannot be condoned by invoking Section 151 of the Civil Procedure Code..."

The Hon'ble Allahabad High Court in Swami Sadguru Sharnanand Ji Maharaj V/s Hari Kumar and others 2013 (99) ALR 550 observed by that it is the duty of the court that every suit which is instituted after the prescribed period shall be dismissed. The relevant para is quoted here as under for the sake of clarity:­ "...50. In addition to the provisions of Order 7 Rule 11 C.P.C which provides for the rejection of the plaint were the suit is barred by any statute, Section 3 of the Limitation Act mandates that every suit instituted after the prescribed period shall be dismissed even though limitation has not been set up as a defence. In other words, a Court is obliged to dismiss a suit on the ground of limitation even if no plea has been raised that it is barred by limitation provided on the face of the pleadings the Court comes to the conclusion that the suit is beyond time and has not been instituted within the limitation prescribed..."

At this stage, court also deem it fit to mention here that the plaintiff has relied upon one judgment passed by the Hon'ble High Court of Delhi in M/s Texem Engineering V/s M/s Texcomash Export RFA (OS) No. 80/2009. The judgment M/s Texem (Supra) has been carefully perused and it is observed by the court that the facts of the present suit and application are distinguishable from the facts of the above mentioned judgment on the point that Texem (Supra) was pertaining to company petition and pertaining to case of continuing breach and tort as provided under Section 22 of the Limitation Act, which is not the case in the present suit/application. It is also pertinent to mention here that the plaintiff has also relied upon one judgment pronounced by the Hon'ble Supreme CS No. 42/15 Nishitika Investments & Finance Pvt. Ltd. vs. Amrit Kaur Page 6 of 7 Court titled as Ram Prakash Gupta V/s Rajiv Kumar Gupta & ors Appeal(Civil) 4626 of 2007. The judgment in Ram Prakash Gupta (Supra) is distinguishable from the facts of the present suit on the ground that the plaintiff in the above mentioned judgment was independent person and was suffering from some illness and could not appeared before the court in due time; whereas in the present suit the plaintiff is a private limited company and was duty bound to audit its account on regular basis, which the plaintiff company had failed to do for almost more than 10 years. The contention of the plaintiff company that it came to know about the default only in the last year due to internal audit of account is highly unbelievable and shows negligence/inaction/lack of bonafide on the part of the plaintiff. The plaintiff company was sleeping over its right for almost more than 10 years or at the most for almost 5 years from the period when the limitation period expired. In view of the above mentioned the court found no merit in the application of the plaintiff accordingly the application of the plaintiff is disposed of as dismissed. As the application is dismissed, the plaint is hereby rejected under Order 7 Rule 11 clause (d) of the CPC, as it is settled law that the word 'law' within the meaning of clause (d) of Order 7 Rule 11 of CPC include the limitation law as well.

8­ In view of the above mentioned application is disposed of as dismissed and plaint is rejected under Order 7 Rule 11 (d) of CPC.

Announced in the open Court 
on 09.11.2015                                          (Vinod Kumar Meena)
(Total pages 1 to 7)                                 CJ­13 (Central)/09.11.2015


CS No.  42/15 
Nishitika Investments & Finance Pvt. Ltd. vs. Amrit Kaur                               Page 7 of 7