Delhi High Court
Anil Rai vs Vinay Rai on 23 October, 2008
Author: S.Ravindra Bhat
Bench: S. Ravindra Bhat
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Reserve : 14.08.2008
Pronounced on : 23.10.2008
+ IA No. 4533/2006 IN CS (OS) 294/2006
ANIL RAI ..... Plaintiff
Through : . Mr. Arvind Nigam, Mr. Naveen Chawla,
Mr. Maninder Singh, Mr. Sandeep Mittal,
Advocates
versus
VINAY RAI ..... Defendant
Through : Mr. Ashok Desai, Mr. Kailash Vasudev,
Sr. Advocates with Mr. Mohit Dogra,
Mr. Jaiyesh Bakshi, Ms. Sonali Jaitley,
Advocates.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
1. Whether the Reporters of local papers
may be allowed to see the judgment?
2. To be referred to Reporter or not?
3. Whether the judgment should be
reported in the Digest?
S.RAVINDRA BHAT, J.
*
1. This order will dispose of IA No. 4533/2006 preferred under Order 7 Rule 11 of the Code of Civil Procedure, 1908, for rejection of the plaint. The brief facts necessary for the present purposes are as follows.
IA 4533/2006 IN CS (OS) 294/2006 Page 1
2. The plaintiff is a member of the Rai family, comprising his father, mother, two sisters and the defendant, his brother. The plaintiff avers that in January 2000 disputes arose between him and the defendant, after which due to intervention of family members, the parties orally entered into a family arrangement on 7th February 2000. However, on 19.03.2000 the parties agreed to modifications in the terms of settlement, which was reduced to writing in the form of „Rai Family Agreement‟. The details of the family arrangement, and steps taken by the parties, to effectuate it, are as follows, according to the plaintiff:
RAI FAMILY AGREEMENT STEPS IN IMPLEMENTATION 1. Anil Rai will get Usha Drager, Usha 1. Usha Group Company transferred
Amorphous, IILM, and Rai School as his 32,24,800 shares by it in Usha Dranger (P) personal property, which he may keep, for Ltd. to RKKR Infotech (P) Ltd., a company either himself or gift to the daughters or controlled by the Plaintiff‟s family on 29th anybody else except to any one of Varun, January, 2001. Amit or Anand in which case it will be equally shared between the three. 2. Usha Group Company transferred 34,90,000 shares held by it in Usha Amorphous Metals Ltd. to RKKR Infotech (P) Ltd. on 29.01.2001, a company controlled by the Plaintiff‟s family.
3. IILM and Rai School have also continued to remain under the control of the Plaintiff‟s family.
2. Properties worth Rs. 25 crores will be Properties worth Rs. 25 Crore were put in a trust to be managed by Anil transferred to the Plaintiff‟s family by the Rai/Malvika Rai with Aarti and Ahladini Defendant (as confirmed by his hand as the beneficiaries. This again either may written note of Feb., 2002) as under:
IA 4533/2006 IN CS (OS) 294/2006 Page 2 go to them at the time of their marriage or be kept under trust as security for them for (i) Pappankala Chawla property consisting life. However, in case it goes to Varun, of land is owned by four Companies, Amit or Anand it will be shared equally namely, M/s Dimsy Food and Chemicals among them. Pvt. Ltd. Dwarka Properties Pvt. Ltd. Delhi Cylinder and Tranding Pvt. Ltd. and Venue Video Pvt. Ltd. Shares of these companies were subscribed/transferred between November 2002 and February 2004 by/and in favour of the entities of the Plaintiff‟s family.
(ii) The Gurgaon property consisting of land owned by M/s. Usha Cooperative House Building Society Ltd. After the family settlement in March 2000, members of the Society belonging to Usha Group had resigned and employees of IILM Group had taken over the membership and management of the Society. This is clearly evident from the minutes of the general body meeting of the Society held on 17.12.2001 whereby elections of the new managing committee had been conducted under the supervision of Dr. M.C. Gupta of Usha Group and new managing committee was elected from the then members.
(iii) Possession of Plot No. B-II/56, Mohan Cooperative Industrial Estate had been given to the Plaintiff‟s family and is owned by Burr Brown Communication Pvt. Ltd.
IA 4533/2006 IN CS (OS) 294/2006 Page 3 whose shares were transferred in favour of the Plaintiff‟s family.
(iv) Possession of Plot No. B-II.91, Mohan Co-operative Industrial Estate, New Delhi, has been given to the Plaintiff‟s family.
(v) Possession of Plot No. B-II.92, has been given to the Plaintiff‟s family.
Agreement to sell was also executed on 17.10.2001 by RKKR Udyog in favour of RKKR Infotech (P) Ltd. and General Power of attorney executed.
(vi) Possession of Plot No. B-II.93, has been given to the Plaintiff‟s family.
Agreement to sell was also executed on 16.10.2001 by Usha Spinning & Weaving Mills Ltd. in favour of RKKR Infotech (P) Ltd. and General Power of Attorney executed.
(vii) In case of land and building at Usha Plaza, M.I. Raod, Jaipur, the same has been sold under an Agreement to Sell to Ram Krishan Kulwant Rai Education Society for which part consideration has been paid, and the rest of the property has been gifted to the Society of the Plaintiff‟s family. The property is having built up area of 2506 sq. ft. as follows out of which possession of 447 sq. ft. in basement has been handed over to the society promoted by the Plaintiff‟s family and area of 1612 sq. ft.
has been occupied by a tenant for which IA 4533/2006 IN CS (OS) 294/2006 Page 4 symbolic possession had also been given to Society promoted by the Plaintiff‟s family for which lease was expiring on 16.10.2004 Therefore on expiry of lease the tenant wrote to the Society of Plaintiff‟s family vide their letter dated 4th June 2004 (Ref.
No.AO/JPR/006/001) asking for renewal, which was replied by the society of Plaintiff‟s family vide its letter dated 26.06.04 stating that the Society intended to use the premises for its own purposes and asked for vacation by 16.10.04. The tenant i.e. UAE Exchange and Financial Services Ltd. further wrote on 13.07.04 (Ref. No. UAEFS/2600/Lease-011/04) stating that they were willing to vacate the mezzanine Floor and agreed to pay for area of 1050 sq. ft. at enhance rate @ Rs. 28622.50 P.M. In response to their letter, Society again wrote on 24.07.04 for not agreeing for renewal.
The tenant aggrieved due to non-renewal approached. The Usha Housing Development Company Ltd. and in collusion with it entered into an agreement and is still continuing to occupy the premises premises. Society promoted by the Plaintiff‟s family has filed a Suit which is pending in the Addl. District Judge-II, Civil Court Jaipur in respect of this property.
(vii) Similarly, possession of property IA 4533/2006 IN CS (OS) 294/2006 Page 5 located at Usha Niketan, D-76, Ghiya Marg, bani Park, Flat Nos. 104 to 107, 207, 304 to 307 and 404 at Jaipur having a total area of 11425 sq. ft. has been handed over to the Society promoted by the Plaintiff‟s family which was transferred under an Agreement to sell for which part consideration has been paid and the balance has been gifted to the Society promoted by the Plaintiff‟s family.
(ix) Possession of Commercial flat located in Usha Preet Complex at 138/42, Malviya Nagar, Bhopal (M.P.) admeasuring 5063 sq. ft. has been given out of which 2040.78 sq. ft. is occupied by the Society promoted by the Plaintiff‟s family and balance area has been occupied by different tenants.
Pursuant to family agreement, two of the five tenants had started paying rent to the Society promoted by the Plaintiff‟s family and the other tenants are neither paying to Plaintiff nor to defendant. Recently the two tenants namely Inline Medical and Sagar Infotech have also stopped paying rent to the Society promoted by the Plaintiff‟s family, payment has been made for part of the amount under an Agreement to Sell and the rest of the balance had been gifted to the Society promoted by the Plaintiff‟s family.
It is most respectfully submitted that now, in an attempt to resile out of the above agreement, the Defendant has sought to IA 4533/2006 IN CS (OS) 294/2006 Page 6 initiate cases of recovery of amounts against the Society by issuing notices in July, 2005.
(x) Flat Nos. 309 and 311 at Ansal Chamber-1, Bhikaji Cama Place, New Delhi valued at Rs. 51 lakhs have been sold under an Agreement to Sell to a Society promoted by the Plaintiff‟s family and the entire consideration with respect to the said flats has been paid.
(xi) Property located at Plot No.20, Sector 11, Belapur, Ne Mumbai of which defendant had identified 25549 sq. ft. built up area in the building known as Usha Chambers as the share of Plaintiff family for which the defendant subsequently billed to a company of the Plaintiff family amounting of Rs. 64,16,428/- vide letter dated 10.01.2004.
Space No. Floor Area 38 GF 341 39 GF 368 301 to 311 3rd Floor 9536 407 4th Floor 3826 507 5th Floor 3826 IA 4533/2006 IN CS (OS) 294/2006 Page 7 607 6th Floor 3826 707 7th Floor 3826 25549 sq.ft.
The possession of this property has been held by the Defendant due to non payment of the bill by Plaintiff owing to dispute on the amount raised in the bill by the Defendant spent for development of the share of property of the Plaintiff‟s family.
3. Properties worth 15 crores will be Plot No.1 and 88 MCIE, New Delhi, land at given to KR (Shri Kulwant Rai) and BR Daulatabad and Chattarpur Farm and a one (Smt. Bimla Rai) which will be in trust to thousand square yard plot behind Mohan the five grand children (Varun, Amit, Cooperative Industrial Estate of Aarti, Anand and Ahladini) equally after approximate values of Rs. 4.75 crores are in them. the name of Shri Kulwant Rai and Smt. Bimla Rai and will be retained by them.
Properties for the balance amount, however have not been transferred by the defendant so far.
4. Cash of Rs. 10 crores will be given to The said amounts have not been transferred both Mr. Kulwant Rai and Mrs. Bimla Rai by the Defendant. to be spent by them as they like and gifted by them as they like in the course of their life and afterwards.
5. The house will remain 1/3 each To implement this Clause, 42801 shares of between Mr. Kulwant Rai, the Defendant one of the three co-owner company, namely and the Plaintiff and after Mr. Kulawant Allied Finance Pvt. Ltd. were transferred in IA 4533/2006 IN CS (OS) 294/2006 Page 8 Rai and Mrs. Bimla Rai it will be 50.50 favour of the family trust of the Plaintiff‟s between the Plaintiff and the Defendant. family on 6th October 2001. As regards the second company, viz., New Peak Real Estate (P) Ltd., 99% shares were purchased by M/s Bimla Rai, mother of the parties and wife of Shri Kulwant Rai, is the sole beneficiary. Physical custody of the records of the company is with the Defendant which is to handed over. Similarly, the property is being enjoyed by way of three co-tenancies as mentioned in the clause.
6. Apart from the exclusion made in point Mr. Anand Rai, son of the Plaintiff had not 1,2,3,4,5 above everything else (including joined the business of the company as he all companies, assets, properties, liabilities, was completing his studies. Now that his businesses, investments, trusts etc.) will be studies are getting completed in May 2006, shared 1/3rd each between Varun, Amit he is to join the business as 1/3rd partner as and Anand as equal partners. provided in this clause.
7. VR will be Chairman and CEO of the The Defendant has been incomplete control Group in the next 7-10 years. The of the management and affairs of the group management control of the Group will be business. with him. When he retires, Varun will take over as the next Chairman.
8. It is agreed that a minimum of Rs. 10 Time for implementation has not come. crores each will be spent on the weddings However, the Plaintiff‟s family has, in view of the two girls. A security or pledge of of the conduct of the Defendant trying to assets for the same amount may be kept if resile out of this agreement, requested him necessary so that in case one does not pay to create the security/pledge as provided for that money, then those assets may be sold in the Agreement. for marriage expenses.
9. Anand as a partner will be a part of the Time for implementation has not arrived as top management of the Group whenever he Mr. Anand Rai till now was completing his IA 4533/2006 IN CS (OS) 294/2006 Page 9 joins the business. studies and had not joined as a partner.
However, now that his studies are coming to an end even this clause needs to be implemented.
10. AR will be responsible on behalf of the The Plaintiff carried out the functions of PR Group for Public Relations, liaison with and liaison as requested by the Defendant. the Government, Politics and Press. He In order to maintain family peace and give a may also run the electronics division as free hand to the Defendant, the plaintiff did part of the Group if he so desires. Anil Rai not interfere in the day-to-day functioning will continue as Co-Chairman as long as of the Group Companies. However, this is Vinay Rai is Chairman. not a waiver of this term but only an attempt to avoid any conflict.
3. The plaintiff avers that the details would disclose that family arrangement was partially executed and implemented by both the parties and the have been taking benefits thereunder. He states that, the defendant has developed malafide intentions and is now trying to dispute the validity of the arrangement. He states that by notice dated 26.10.2005, the company controlled by the defendant sought to cancel the agreement to sell executed between the parties in pursuance of the family arrangement and sought possession of the premises at Bani Park, Jaipur. Further at the instance of the defendant, some promoter members working for him and who had earlier resigned from the Usha Co-Operative House Building Society, Gurgaon lodged a complaint on 6.9.2005 in the office of the Asst. Registrar of Co-Operative Societies, Gurgaon against the present office bearers of the plaintiff‟s family. Similarly, it is averred that the defendant through the Group Company is also seeking to challenge share transfers in Usha Drager Pvt. Ltd. and Usha Amorphous Metals Pvt. Ltd., which were affected in discharge of the obligations IA 4533/2006 IN CS (OS) 294/2006 Page 10 under the agreement. The plaintiff further avers that the due to tensions created by the defendant in the residential home of the parties and forced his mother and wife to file a suit before this Court, being CS (OS) No. 1158 of 2005, seeking demarcation of separate portions for themselves separate from the defendant.
4. The plaintiff also states that having taken advantage of the said family arrangement the defendant cannot now to resile from it. The arrangement remains partially executable, and that he has performed his part of the obligations. It is stated that the defendant in the aforementioned suit, in his written statement has denied the validity of the said agreement. The defendants had therein contended that the agreement was a mere proposal and was just a „wish list‟, and never acted upon. The plaintiff also avers about the statement before the Settlement Commission under Section 245 of the Income Tax Act, 1961, wherein he spelt out the manner in which he proposed to perform his obligation under the arrangement. The plaintiff states that since the family has interests in various trusts, in which the he and his family members are beneficiaries, the defendants in order to defeat the rights of the plaintiff under the family arrangement may dispose of properties. He further states that no accounts have been rendered in relation to properties and business being nagged by the defendant. Therefore, the plaintiff urges the Court to pass an order of mandatory injunction directing the parties to give full effect to the family arrangement of 19.03.2000 and also a permanent injunction restraining the defendant from creating third party interests in the aforesaid properties or in any manner dealing with suit properties.
5. The defendant in his application has taken the following grounds, urging the rejection of the plaint. At the outset, he denies that document of 19.3.2000 relied by the IA 4533/2006 IN CS (OS) 294/2006 Page 11 plaintiff was only a wish list and was not to be acted upon by the parties. He relies on the statement made by the plaintiff before the Settlement Commission, where he had allegedly admitted that the document of 19.3.2000 was only a wish list. It is submitted that the suit is liable to be dismissed on this ground alone.
6. It is next submitted that the suit is time barred since it seeks to enforce the so-
called family arrangement dated 19.3.2000 by filing the suit on 14.2.2006. As per Article 54 of the Limitation Act, 1963 the limitation period for filing a suit for specific performance is three years from the date fixed for performance, or, if no such date is fixed, when the plaintiff has the notice that the performance is refused. In this regard it is submitted that, although the arrangement was never to be acted upon, there was no specific date fixed for the performance. Moreover, as per the admission of the plaintiff before the Settlement Commission on 10.4.2002, the instrument was a wish list and not to be acted upon; that, it is submitted served as notice of denial of validity of the instrument.
7. The defendant further states that the suit has been improperly valued for the purposes of court fee and jurisdiction and is accordingly liable to be rejected. It is submitted that the plaintiff has quantified his money claim in the minimum sum of Rs. 65 crores, but has valued the suit for the relief of mandatory injunction for a paltry sum of Rs. 21 lacs, which goes to show that the suit has been grossly undervalued for the purpose of court fee.
8. It is also submitted by the defendant that not leave to file the present suit was sought in the previous suit CS (OS) No. 1158/2005. Therefore, the suit is also liable to rejected under Order 7 Rule 11 (d). Additionally, in the prayer the defendant also urges that suit be rejected on the ground that the beneficiaries of the alleged arrangement have IA 4533/2006 IN CS (OS) 294/2006 Page 12 not been impleaded and that the agreement itself is void as being opposed to pubic policy under Section 23 of the Indian Contract Act, 1872.
9. Mr Kailash Vasudev, learned Senior counsel for the plaintiff submitted that the averments in the plaint and the documents, taken together, point to the suit being time barred. He contended that the plaintiff was aware that the family settlement upon which the suit is primarily founded, was executed in the year 2000. The plaintiff became aware that the defendant was unwilling to take steps towards its implementation, as according to him, the document was a mere wish list, containing pious hopes which the parties expected would mature; it did not contain any mutual obligations. This position of the defendant was made known in communications and e-mails to the plaintiffs, addressed as early as in the year 2002; the same are part of the record. Therefore, the suit should have been filed within the period of three years, reckonable from that time. However, the suit has been filed in February, 2006, and is time barred. Therefore, applying the principle underlying Order 7, Rule 11, CPC, the court should reject the plaint. Reliance was placed on the judgments of the Supreme Court, reported as Hardesh Ores (P) Ltd. v. Hede & Co.,(2007) 5 SCC 614, N.V. Srinivasa Murthy v. Mariyamma, (2005) 5 SCC 548 and T. Arivandandam v. T.V. Satyapal 1977 (4) SCC 467, for the proposition that clever drafting of pleadings by a litigant should not obscure the real nature of the action, and the court should exercise its power to nip patently hopeless or frivolous litigation in the bud, by exercising its power to reject the plaint, at any stage. In this case, submitted counsel, the plaint averments, which included the list of documents filed along with the suit, showed that the alleged cause of action arose as early as in 2002; the suit therefore was clearly time barred.
IA 4533/2006 IN CS (OS) 294/2006 Page 13
10. It was next contended that the court should also reject the suit for the reason that parties necessary for an effective adjudication of the disputes have all not been impleaded. Counsel urged that the plaintiff seeks injunctive relief to effectuate a settlement and understanding, which involves transfer of shares; the plaintiff has not even disclosed the defendant‟s extent of shareholding in each company. Besides, the company, being an independent juristic entity, is a necessary party in whose absence effective and full adjudication of all disputes is impossible. The suit is, therefore, barred for non-
joinder of necessary parties, and therefore, has to be rejected.
11. Counsel also submitted that the plaintiff has grossly undervalued the reliefs in the suit. He relied on the documents, particularly the family settlement, placed on record by the plaintiff, and contended that a reasonable and fair estimate of the share claimed in the various assets are substantial, and over Rs. 700 crores. The plaintiff should therefore, have valued them correctly, instead of valuing the reliefs only having regard to the pecuniary jurisdiction of the court. The court should not accept the plaintiff‟s valuation, which is intentionally depressed, to avoid paying proper court fee. Counsel relied on the decisions reported as .....
12. It was also urged that this court should reject the plaint, because the plaintiff did not seek leave of the court to file the second suit, fully knowing that the subject matter of this suit could have well been incorporated in the previous suit. Not having done so, the plaintiff cannot now be heard saying that the suit is not barred; applying the principles embedded in Order II Rule 2, this court should not entertain the present suit.
13. Mr. Arvind Nigam, learned counsel, on the other hand, submitted that the application should be rejected. Adverting to the defendant‟s plea of limitation, it was IA 4533/2006 IN CS (OS) 294/2006 Page 14 urged that the suit was filed within the period of time prescribed. Counsel urged that the parties to the family settlement understood it to be binding, and even acted on it. He referred to Para 6 of the plaint and submitted that the court, while considering whether a suit is filed within the period of limitation, has to see all the pleas in the plaint, as well as the documents filed along with it. In this case, the plaintiff had urged, clearly, that steps to effectuate the settlement were taken by both parties on various dates; the defendant, notwithstanding his e-mail communication of 2002, continued to effectuate the settlement through various acts, either himself, or through others; the categorical repudiation of his liabilities was expressed in 2005; reckoned from then, the present suit is filed within the period of limitation.
14. Counsel relied on decisions reported as Sahu Madho Das v. Mukund Ram, AIR 1955 SC 481 and Kale & Others v. Deputy Director of Consolidation, (1976) 3 SCC 119, to canvass the proposition that the Courts have generally relied on family arrangements and enforced them, overlooking trivial and technical objections. He contended, relying upon these decisions that object of such family arrangements is to protect the family from long drawn disputes and that unless, fraud is proved, courts should enforce the family arrangement. Further, courts have enforced family arrangements made honestly, even though made on the basis of error or mistake of all parties. Counsel further placed reliance on KK Modi v. KN Modi, (1998) 3 SCC 573, Hari Shankar Singhania v. Gowri Shankar Singhania, (2006) 4 SCC 658 and Manish Mohan Sharma v. Ram Bahadur Thakur, (2006) 4 SCC 416, to assert that Court must not lightly interfere with family settlements, and since these instruments are governed by special equities, they are to be enforced. Therefore, it is urged that at this stage of demurer, absent a specific plea of IA 4533/2006 IN CS (OS) 294/2006 Page 15 fraud, the Court must not reject the suit on the ground that defendant challenges the validity or existence of the family arrangement.
15. Learned counsel appearing on behalf of the defendants submitted that valuation of the suit is correct. At the stage of filing the suit, the value of the shares in the company and the various benefits accruing to the plaintiffs were of imprecise value; therefore, the relief was given notional valuation. It was also urged that the suit was not barred by reason of Order II Rule 2, since the previous suit was not filed by the plaintiff, but his other relatives. As regards the objection of not impleading the companies was concerned, counsel submitted that no relief against the companies has been sought; the plaintiff merely seeks effectuation of the settlement, which would result in change in the pattern of the shareholding. That would be ascertained at the stage of evidence.
16. It is well settled that the court, at the stage of considering an application under Order 7, Rule 11, has to examine only the plaint averments, and the list of documents filed along with the suit. Other pleas, advanced by parties, including the pleadings in the written statement, cannot be considered by the court. The defendant‟s plea about the suit being time barred, is based on e-mail communications exchanged between the parties. No doubt, they prima facie indicate that the defendant had expressed his view that the family settlement (of which the plaintiff seeks implementation by this suit) is a mere "wish list"
and not binding upon him; also, undoubtedly that was expressed in 2002. Yet, the court cannot be unmindful of express averments in the plaint, particularly various parts of Para 6, to the effect that parties, including defendant, took steps to give effect to the settlement on various dates, in 2001 and 2004. The court cannot also ignore the dicta of the Supreme IA 4533/2006 IN CS (OS) 294/2006 Page 16 Court, in Kale v. Dy. Director of Consolidation, (1976) 3 SCC 119, where, after noticing a number of Indian and English authorities on the subject, the court observed as follows:
"The courts have, therefore, leaned in favour of upholding a family arrangement instead of disturbing the same on technical or trivial grounds. Where the courts find that the family arrangement suffers from a legal lacuna or a formal defect the rule of estoppel is pressed into service and is applied to shut out plea of the person who being a party to family arrangement seeks to unsettle a settled dispute and claims to revoke the family arrangement under which he has himself enjoyed some material benefits."
It further observed that:
"(1) The family settlement must be a bona fide one so as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family; (2) The said settlement must be voluntary and should not be influenced by fraud, coercion or undue influence;"
This position of law has been reiterated in a series of judgments, the latest one being Manish Mohan Sharma (supra).
17. The Supreme Court in Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success (2004) 9 SCC 512, while dealing with the law relating to rejection of plaint under Order 7 Rule 11 of the Code of Civil Procedure, 1908, observed as follows:
"Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed. In ascertaining whether the plaint shows a cause of action, the court is not required to make an elaborate enquiry into doubtful or complicated questions of law or fact.
So long as the claim discloses some cause of action or raises some questions fit to be decided by a judge, the mere fact that the case is weak and not likely to succeed is no ground for striking it out. The purported failure of the pleadings to disclose a cause of action is distinct from the absence of full particulars."
IA 4533/2006 IN CS (OS) 294/2006 Page 17
18. In the present case, the state of pleadings in the suit being what it is, the court cannot agree with the defendant‟s contention that the action is time barred. May be, in regard to some claims, the suit could be time barred; however, the court cannot, at this pre-trial stage, undertake a detailed scrutiny. Another cardinal rule which guides courts is that the plaint cannot be rejected in part, if it contains multiple causes of action. Assuming that claims to some causes might be barred, the existence of others which may be established at the trial stage should impel the court to tread softly. For these reasons, the plea of limitation cannot be accepted.
19. So far as the contention regarding non-joinder of the companies is concerned, the court is inclined to agree with the plaintiff‟s contentions. The test to determine whether a party is necessary or proper is whether effectual adjudication is impossible in its or their absence. Here, the absence of the companies would not hinder the trial; no relief has been claimed against anyone of them. At this stage, it appears that the plaintiff is merely asking for implementation of the family settlement whereby the share holding pattern had to be divided in a particular manner. Those aspects are details to be seen at the stage of trial, after recording evidence, not now. Likewise, the question of seeking leave from the court would have arisen if the other suit had been filed by the plaintiff; undeniably he is not plaintiff, in that case. The plea of suit being barred on that score too, has to fail.
IA 4533/2006 IN CS (OS) 294/2006 Page 18
20. That brings the discussion to the question of objection regarding court fee. In Tara Devi v. Thakur Radha Krishna Maharaj ((1987) 4 SCC 69) the Supreme Court observed that :
"It is now well settled by the decision of this Court in Sathappa Chettiar v. Ramanathan Chettiar (1958 SCR 1024 : AIR 1958 SC 245) and Meenakshisundaram Chettiar v. Venkatachalam Chettiar ((1980) 1 SCC 616) that in a suit for declaration with consequential relief falling under Section 7(iv)(c) of the Court Fees Act, 1870, the plaintiff is free to make his own estimation of the reliefs sought in the plaint and such valuation both for the purposes of court fee and jurisdiction has to be ordinarily accepted. It is only in cases where it appears to the court on a consideration of the facts and circumstances of the case that the valuation is arbitrary, unreasonable and the plaint has been demonstratively undervalued, the court can examine the valuation and can revise the same."
In Sujir Keshav Nayak, Appellant V. Sujir Ganesh Nayak 1992-(1)-SCC 731, after considering previous decisions reported as R. S. Jadhav Desai v. S. V. Jadhav Desai (AIR 1918 PC 188); Abdul Hamid Shamsi v. Abdul Majid ((1988) 2 SCC 575) the court upheld the plaintiff‟s right to value the suit for accounting according to his own estimate; it was also held that he has not been given the absolute right or option to place any valuation whatever in such relief. The court also noticed the previous decision in Meenakshisundaram Chettiar v. Venkatachalam Chettiar ((1980) 1 SCC 616), where it was observed that even though in suit for accounting the loss of revenue is ensured by statutory provision yet a plaintiff has a duty to give a fair estimate of the amount for which he sues. The court, after reviewing all decisions, held that:
" The law on this aspect, thus, should be taken to be as under :
(1) Where the question of court fee is linked with jurisdiction a defendant has a right to raise objection and the court should decide it as a preliminary issue.
IA 4533/2006 IN CS (OS) 294/2006 Page 19 (2) But in those cases where the suit is filed in court of unlimited jurisdiction the valuation disclosed by the plaintiff or payment of amount of court fee on relief claimed in plaint or memorandum of appeal should be taken as correct.
(3) This does not preclude the court even in suits filed in courts of unlimited jurisdiction from examining if the valuation, on averments in plaint, is arbitrary."
19. The plaintiff therefore, has ordinarily the right to value his reliefs for the purpose of court fees as well as jurisdiction. Yet, this right is not an unqualified right, since even in suits preferred in courts of unlimited jurisdiction (like the present case) the court has the right to examine if the valuation, on averments in plaint, is arbitrary. In the light of this discussion, it is necessary to see whether the valuation is appropriate, or arbitrary.
20. A bare reading of the Family settlement, and averments in the suit (described in tabular form, in Para 2 of this order, show that the sum total of assets and cash obligations involved, are approximately above Rs. 75 crores. In the circumstances, the suit valuation, for purposes of court fees, at Rs 21,00,000/- made, in the suit, is arbitrary.
It is therefore, held that the suit has not been valued properly for the purposes of court fees.
21. In the above circumstances, the plaintiff is granted four weeks time to properly value the suit, having regard to averments in the suit, and pay the requisite court fees. The application is accordingly disposed of in these terms.
OCTOBER 23, 2008 S.RAVINDRABHAT,
JUDGE
IA 4533/2006 IN CS (OS) 294/2006 Page 20
% 23.10.2008
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS (OS) 294/2006
ANIL RAI ..... Plaintiff
Through : . Mr. Arvind Nigam, Mr. Naveen Chawla,
Mr. Maninder Singh, Mr. Sandeep Mittal,
Advocates
versus
VINAY RAI ..... Defendant
Through : Mr. Ashok Desai, Mr. Kailash Vasudev,
Sr. Advocates with Mr. Mohit Dogra,
Mr. Jaiyesh Bakshi, Ms. Sonali Jaitley,
Advocates.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
List on 1st December, 2008.
OCTOBER 23, 2008 S.RAVINDRABHAT,
JUDGE
IA 4533/2006 IN CS (OS) 294/2006 Page 21