Delhi District Court
Jitender Garg vs Yajesh Kumar Garg & Others on 16 November, 2009
IN THE COURT OF SH. RAKESH KUMAR SHARMA, ADDITIONAL
DISTRICT JUDGE03 (NE), KARKARDOOMA COURTS, DELHI
Civil Suit No. 31/08
Jitender Garg Versus Yajesh Kumar Garg & Others
ORDER
1. By this order, I shall dispose of the application U/o 7 Rule 11 CPC for rejection of the plaint filed by Defendants No.1 to 3 and shall also decide the following preliminary issue framed on 07.11.2009: "Whether the suit as framed is maintainable? OPP".
2. Brief facts of the case are that the plaintiff has filed the present suit for permanent and mandatory injunction against the defendants. It is stated in the plaint that the father of the plaintiff Shri Om Parkash Gupta purchased Hotel Abodana out of his own funds and the funds raised from the relatives including the plaintiff. The shares of the hotel were allotted to the parties according to their contributions. Thus, 8000 shares stood in the name of the plaintiff. Certain shares were also purchased in the names of defendants no.1 and 2 separately, who were also appointed as the Directors of the Company M/s. Abodana Hotel Private Ltd. by the father of the plaintiff to look after the business and management of the hotel. As the status of the family was Joint Hindu Family, the share certificates of the plaintiff were in the custody of his father till his death and, thereafter, in the custody of defendants no.1 to 3. Defendants no.1 1 to 3 in conspiracy with the Chartered Accountants of the Hotel forged the signatures of the plaintiff and fraudulently got the above said 8000 shares transferred in the name of defendant no.3, which is evident from the annual return of the hotel for the year 199899. On 16.2.2000, the plaintiff issued a notice to defendants No.1 and 2 demanding his shares. As no response was received, two reminders stating that the defendants have conspired and fraudulently got transferred the shares of the plaintiff in the name of defendant no. 3 were sent, but no replies were received by the plaintiff. The plaintiff also filed a complaint dated 17.11.2000 in the Office of the Deputy Commissioner of Police, (Crime Branch), Economic Wing, Delhi. When no action was taken by the police on the complaint, the plaintiff approached the Hon'ble High Court and, thereafter, Crime Branch started investigation. The plaintiff also filed a complaint in the Shahdara Police Station on 23.01.2002. During the investigation, the signatures on the Sale Deed and sample signatures of the plaintiff and defendants no.1 to 3 were sent to CFSL. The defendants started pressuring the plaintiff and threatened to eliminate him and his family with the result that the plaintiff was constrained to compromise the matter vide compromise dated 07.12.2001. In terms of the compromise, the plaintiff withdrew his writ petition before Hon'ble High Court. After the compromise, the plaintiff came to know that as per the CFSL report, signatures of the plaintiff on the documents were found forged. The plaintiff lodged another complaint with police 2 station Shahdara on 12.12.2001 regarding the threats extended by the defendants on account of which the compromise dated 07.12.2001 was executed by the plaintiff. As per Section 108 of the Companies Act, transfer of shares can be effected only on execution of the Transfer Deed. Even at the time of compromise, the plaintiff did not sign any Transfer Deed in favour of the defendants. Hence, the present suit. The prayer in the plaint is as follows: "a) a Decree for Mandatory Injunction in favour of plaintiff and against the defendants directing therewith the defendants that 8000 shares existing in the name of plaintiff before the deed of cheating and forgery committed by defendants 1,2 and 3 as established by the Report of C.F.S.L. (Annexed as X along with plaint) be restored in the name of the plaintiff cancelling thereby all transfer transactions made after 15.10.1998 and Registrar of Companies, Jawahar Lal Nehru Stadium, New Delhi may also be directed to amend the record accordingly by incorporating the name of the plaintiff as holder of 8000 shares of the firm M/s. Hotel Abodana Pvt. Ltd. in place of defendant No.4, 5 and 6.
b) a Decree of Permanent Injunction in favour of the plaintiff and against the defendant No.4,5 and 6 not to sell, transfer the 8000 shares came to them through Defendant No.3 on the basis of above stated forged and fake 3 transaction established by the report of C.F.S.L. (Annexed as AnnexureX along with the plaint) to any other person considering the forged and fake and bogus transaction made by defendant no.3 on 15.10.1998.
c) Any other order (s) or Direction (s) which this Hon'ble Court may deem fit and proper in the facts or circumstances may also be passed in favour of the plaintiff and against the defendant to meet the ends of justice."
3. I need not go into the contentions of the defendants in their W.S. except to note that they have contended that the suit is barred by the principles of promissory estoppel in view of the compromise dated 7.12.2001 and that the suit is barred by limitation. These pleas have also been taken by defendant no.1 to 3 in their application U/o. 7 Rule 11 CPC.
4. Needless to say, the contentions are denied by the plaintiff, who in his replication submitted that the suit is covered U/s. 17 of the Limitation Act.
5. Counsel for defendants no.1 to 3 relied upon the following authorities in support of his contentions:
(a) (2007) 5 Supreme Court Cases 614 titled as Hardesh Ores Private Ltd. Vs. Hede and Company,
(b) 156 (2009) DLT 685 (DB) titled as Jyotika Kumar Vs. Anil Soni, and 4
(c) (2008) 4 Supreme Court Cases 594 titled as Anathula Sudhakar Vs. P. Buchi Reddy.
6. I have heard counsels for the parties and have also gone through the record as well as the authorities relied upon by the counsel for defendants no.1 to 3.
7. Section 38 of the Specific Relief Act (hereinafter "the Act") pertains to perpetual injunction and Section 39 of the Act pertains to mandatory injunction. The provisions are as follows : "38. Perpetual injunction when granted.(1) Subject to the other provisions contained in or referred to by this Chapter, a perpetual injunction may be granted to the plaintiff to prevent the breach of an obligation existing in his favour, whether expressly or by implication. (underlining by me) (2) When any such obligation arises from contract, the Court shall be guided by the rules and provisions contained in Chapter II.
(3) When the defendant invades or threatens to invade the plaintiff's right to, or enjoyment of, property, the Court may grant a perpetual injunction in the following cases, namely :
(a) where the defendant is trustee of the property for the plaintiff;
(b) where there exists no standard for ascertaining the actual damage caused, or likely to be caused, by the invasion; 5
(c) where the invasion is such that compensation in money would not afford adequate relief;
(d) where the injunction is necessary to prevent a multiplicity of judicial proceedings.
39. Mandatory injunctions.When, to prevent the breach of an obligation, it is necessary to compel the performance of certain acts which the Court is capable of enforcing, the Court may in its discretion grant an injunction to prevent the breach complained of, and also to compel performance of the requisite acts." (underlining by me)
8. Section 2 (a) of the Specific Relief Act is as follows : "2. Definitions. In this Act, unless the context otherwise requires,
(a) "obligation" includes every duty enforceable by law;...."
9. It is clear from the provisions that an injunction can be granted in favour of the plaintiff only when the defendants are under a duty towards the plaintiff enforceable by law to do or to refrain from doing the acts complained of by the plaintiff. As noted above, in the plaint itself, it is the case of the plaintiff himself that on the date of filing of the suit, the share transfer certificate in respect of shares in the present suit bears signatures purported to be those of the plaintiff. Although, it is claimed in the plaint that the signatures are forged, but no declaration has been sought by the plaintiff that those signatures 6 are forged. Without seeking the relief of such declaration, it is not permissible for this Court to go into the question whether the signatures on the share transfer certificates are forged or not and, thus, since the signatures are purported to be of the plaintiff, the defendants cannot be directed to return the same to the plaintiff or not to transfer the same to any other person. The suit as framed (i.e. without seeking the relief of declaration as above) is, therefore, not maintainable and is liable to be dismissed on this ground alone.
10. Even otherwise, the limitation period laid down by the Limitation Act for seeking any declaration is three years. As per article 56, the limitation period for a suit to declare the forgery of an instrument issued or registered is three years and it starts to run from the date when the issue or registration becomes known to the plaintiff. Similarly, as per article 58 of the Limitation Act, for a suit to obtain any declaration other than those mentioned in article 56 and 57, the limitation period is three years from the date when the right to sue first accrues.
11. On my direction, the plaintiff filed a list of dates and events, which contains the following : "23.8.1999 The Plaintiff got issued the certified copies of the annual returns of Hotel Abudana from the office of ROC for the year 199899 and 19992000 which fact came into the knowledge of the plaintiff that 8000 shares of the plaintiff of Hotel Abudana were found transferred on 5.10.1998 7 in the name of Neeta Garg in the annual return for the year 19992000 filed by the Respondents No. 1 and 2 with the ROC. (Page 51 of paper book)." (underlining by me)
12. It is clear that the plaintiff came to know about the transfer of the shares in the name of defendant no. 3 on 23.08.1999. Hence, the limitation period for filing a suit for declaration that the signatures of the plaintiff on the share transfer certificate are forged started on 23.08.1999. The present suit was filed on 12.12.08. Clearly, no such declaration can be sought by the plaintiff now, much less granted to him. The suit is liable to be dismissed on this ground also.
13. Further, para 3 (H) of the plaint is as follows : "H. That the Plaintiff on 1622000 issued a notice to the Defendant No. 1 & 2 to demand his shares. No response was received by the Plaintiff after which the Plaintiff send two reminder stating that the Defendants have conspired themselves and fraudulently got transferred the shares of the Plaintiff in the name of Defendant No. 3, but all the Plaintiff did not received any reply." (underlining by me)
14. It is clear from this para of the plaint itself that even assuming (in favour of the plaintiff) that the cause of action for filing a suit for declaration did not arise on 23.08.99, it certainly arose before 16.02.2000 when the plaintiff came to know about the transfer of the shares in the name of defendant no. 3. Even from this date, the suit is barred by Limitation. The suit is liable to be dismissed on this 8 ground also.
15. Still further, the list of dates and events filed by the plaintiff also contains the following : "17.11.2000 Although the plaintiff had got knowledge of fraud from the annual return, he lodged a complaint with DCP (Crime Branch) E.O.W. against Respondents No. 1 to 3 and their Chartered Accountant Shri R.K. Soni regarding forgery of 8000 shares of Hotel Abudana (page 5859 of paper book) and after that plaintiff got the knowledge from the police that a forged share transfer deed dated 15.10.98 was prepared by Respondents No. 1 to 3 in connivance with the chartered accountant of the hotel Abudana who witnessed the same and got transferred 8000 shares of the plaintiff by forging the signature of the plaintiff for a sale consideration of Rs. 2.0 Lacs in the name of Respondent No. 3. Whereas, the copy of annual return of Hotel Abudana is showing the transfer of 8000 shares of the plaintiff in the name of Neeta Garg on 5.10.98 and the family settlement deed dated 23.10.98 (at para 5 (c) states that the plaintiff is receiving all the shares and debentures in his name on 23.10.98 which fact clearly proves that till 23.10.98 the 8000 shares of the plaintiff of Hotel Abudana were in illegal custody of R1 and 2." (underlining by me)
16. It is clear that the plaintiff, on his own showing, got 9 knowledge of forgery/fraud from the annual report itself i.e. on 23.08.99. In any case, he came to know about the alleged fraud and forgery on 17.11.2000. Even from this date, the suit is barred by limitation and is liable to be dismissed on this ground also.
17. The list of dates and events filed by the plaintiff also contains the following : "Feb/March, 2001 The plaintiff got published in newspapers regarding forged transfer of his 8000 shares of Hotel Abudana. (Annexure5)." (underlining by me)
18. It is clear from the above that as long back as in February/March not only the plaintiff was aware about the forgery, he also got published this fact in the newspapers. Even from here, the suit is barred by limitation and is liable to be dismissed on this ground also.
19. Further, the list also contains the following : "20 March, 2001 The Investigation Officer of Crime Branch took specimen signatures of plaintiff on 20.03.2001 and also seized the alleged share transfer deed from the possession of Respondent No. 1 to 3 and took the specimen signatures of Respondent no. 1 to 3 on 22.3.2001. (Page 15 29 of paper book)"
20. It is clear that in any case, the plaintiff came to know about the forgery on 20.03.01. Even from this date, the suit is still barred by limitation and is liable to be dismissed on this ground also. 10
21. Further, the case of the plaintiff is that the matter was compromised on 07.12.01. A copy of the compromise has been placed on record by the plaintiff himself. The compromise specifically records the statement of the plaintiff that ".....Accordingly, I have left no claim against 8,000/ shares, more specifically detailed in my said complaint dated 17.11.2000 in any manner........". It is clear that by this compromise, the plaintiff agreed that he shall not have any claim in respect of the shares after the said compromise dated 07.12.01. The suit is in respect of these 8,000 shares only. Hence, there cannot be no doubt that after the compromise dated 07.12.01, the plaintiff was left with no right/title/interest in the shares and thus has no cause of action to file the present suit. The suit is liable to be dismissed on this ground also.
22. Although in the plaint it has been alleged that the plaintiff was forced to sign the compromise, again, no declaration has been sought by the plaintiff that the compromise was obtained by force and hence, the same is not binding. Even otherwise, as noted above, as per the Limitation Act, the limitation period for seeking declaration of any kind is three years. There cannot be any doubt that the cause of action for seeking declaration that the compromise was obtained forcibly from the plaintiff clearly arose on 07.12.08 itself. Admittedly, no suit for such declaration has been filed by the plaintiff so far, and hence, no such declaration can, now, be granted to the plaintiff. In the absence of any such declaration sought, it has to be held that the 11 suit is not maintainable in view of the compromise. The suit is liable to be dismissed on this ground also.
23. No only this, in the list of dates and events, it is case of the plaintiff himself that as per the compromise, he withdrew the Criminal Writ Petition filed before Hon'ble Delhi High Court on 09.01.02. This clearly shows that no plea that the compromise was got signed by him forcibly was taken by him before Hon'ble Delhi High Court even after more than a month of signing the compromise. Further, the list filed by the plaintiff himself contains the following : "March, 2002 The plaintiff filed a criminal complaint against Respondent No. 1 to 3 and chartered accountant for cheating, forgery and criminal breach of trust and for not withdrawing the case of damages as per compromise dated 07.12.2001, which is now pending disposal before Ld. A.C.M.M. Shri Lokesh Kumar Sharma, Karkardooma and now fixed for 8.9.2009 titled as Jitender Kumar Garg Vs. Yajesh Kumar Garg and others." (underlining by me)
24. It is clear that no only the plaintiff did not raise any grievances about the compromise being got signed from him forcibly, he sought to enforce the compromise dated 07.12.01. This also shows that in any case, the plaintiff was aware of the alleged forgery in March, 2002. Hence, it is clear that the contention of the plaintiff that he was forced to sign the compromise dated 07.12.01 is false to his knowledge. In any case, the suit regarding the declaration about 12 the forged signatures of the plaintiff on the share transfer certificate is barred by limitation.
25. Counsel for the plaintiff contended that the suit is covered U/s. 17 of the Limitation Act. The provision is as follows: "17. Effect of fraud or mistake.(1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act,
(a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or
(b) the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or
(c) the suit or application is for relief from the consequences of a mistake; or
(d) where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him;
the period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have discovered it; or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production:
Provided that nothing in this section shall enable any 13 suit to be instituted or application to be made to recover or enforce any charge against, or set aside any transaction affecting, any property which
(i) in the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know, or have reason to believe, that any fraud had been committed, or
(ii) in the case of mistake, has been purchased for valuable consideration subsequently to the transaction in which the mistake was made, by a person who did not know, or have reason to believe, that the mistake had been made, or
(iii) in the case of a concealed document, has been purchased for valuable consideration by a person who was not a party to the concealment and, did not at the time of purchase know, or have reason to believe, that the document had been concealed.
(2) Where a judgmentdebtor has, by fraud or force, prevented the execution of a decree or order within the period of limitation, the Court may, on the application of the judgmentcreditor made after the expiry of the said period extend the period for execution of the decree or order:
Provided that such application is made within one year 14 from the date of the discovery of the fraud or the cessation of force, as the case may be." (underlining by me)
26. It is clear from the provision that in the cases of fraud the period of limitation starts from the date when the plaintiff actually discovers the fraud or could have discovered the same with reasonable diligence. In the present case, as noted above, it is the case of the plaintiff itself as per the list that he came to know about the transfer of the shares in the name of the defendant no. 3 for the first time on 23.08.99. It is specifically stated by the plaintiff that he came to know about fraud on 17.11.2000. Counted from either of the dates, the suit is barred by Limitation. Hence, the contention is rejected.
27. Counsel for the plaintiff then contended that the cause of action arose only when the CFSL report that the signatures of the plaintiff on the share transfer certificates were forged was actually filed in the court on 24.03.08, and hence, the suit is within limitation.
28. I find no force in the contention. As per the Limitation Act, the limitation period starts from the date when the right to sue "first" accrues or when the issue or the registration of the forged instrument becomes known to the plaintiff. On his own showing, the cause of action arose for the first time on 23.08.99 when the plaintiff came to know about the transfer of the shares in the name of defendant no. 3. As noted above, on his own showing, the plaintiff got published in the newspaper regarding forged transfer of his 15 shares in February/March, 2001. The contention is liable to be rejected on this ground alone. Even otherwise, the CFSL report is at best the evidence to prove factum of forgery. On his own showing, plaintiff came to know about the forgery for the first time on 26.08.1999. The cause of action does not depend upon availability of the evidence. It arises on the happening of events. As soon as the plaintiff came to know about the transfer of the shares in the name of defendant no. 3, the cause of action arose in his name for the first time. As the limitation is to be counted from the date the cause of action firstly arose, the limitation is to be counted from 23.08.1999.
There is no reason why the plaintiff, after filing the suit within the limitation period from 23.08.1999 could not get the share transfer certificates examined for forgery through an order of the Court. Hence, the contention is rejected.
29. In view of the above discussion, it is clear and accordingly held that the suit is not maintainable being without cause of action after the compromise dated 07.12.01 and also as framed i.e. without seeking necessary declarations. Hence, the same is liable to be dismissed.
30. In this view of the matter, I need not discuss the authorities relied upon by the counsel for defendant no. 1 to 3.
31. Keeping in view that even after the compromise dated 07.12.01, which was not only followed by the plaintiff in withdrawing the Criminal Writ Petition in the Hon'ble High Court, but the plaintiff 16 also sought to enforce the said compromise, I am of the view that it is a fit case where exemplary cost should be imposed upon the plaintiff. Accordingly, the suit is dismissed with a cost of Rs. 40,000/, out of which Rs. 20,000/ shall be deposited with Delhi Legal Services Authority (DLSA), Rs. 10,000/ shall be paid to defendants no. 1 to 3 collectively and the remaining Rs. 10,000/ shall be paid to defendant no. 4 to 6 collectively, within three months from today, failing which, the costs shall carry simple interest at the rate of 12% per annum from today till realization.
32. A copy of this order be sent to Secretary/InCharge DLSA for information and necessary action. File be consigned to Record Room.
Dictated to the Steno and announced in the Open Court today i.e. 16.11.09.
(Rakesh Kumar Sharma) Addl. Distt. Judge03 (NE) Karkardooma Courts, Delhi 17