Gujarat High Court
Van Oil Petroleum Ltd vs Mv Denali (Imo No 8438016) on 3 May, 2018
Author: R.M.Chhaya
Bench: R.M.Chhaya
C/AS/12/2018 IA ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CIVIL APPLICATION (OJ) NO. 1 of 2018
IN
R/ADMIRALITY SUIT NO. 12 of 2018
==========================================================
MV DENALI (IMO NO 8438016) Versus VAN OIL PETROLEUM LTD ========================================================== Appearance:
MR AS VAKIL for the PETITIONER(s) No. MR SAURABH SOPARKAR, SENIOR ADVOCATE ASSISTED BY MS PAURAMIB SHETH for the RESPONDENT(s) No. ========================================================== CORAM: HONOURABLE MR.JUSTICE R.M.CHHAYA Date : 03/05/2018 IA ORDER
1. By way of this application, the applicant who is original defendant has prayed for rejection of the plaint under Order 7 Rule 11 (a)(d) of the Code of Civil Procedure, 1908 and has also prayed for cost in favour of the applicant.
2. The parties are described as per their position in the original suit.
3. The plaintiff has preferred the present suit for following claims Sr. Particulars Amount (In No. USD)
1. Principal Amount due as 975,600 per the invoice Page 1 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER
2. Interest 326,965
3. Legal Costs 20,000 Total Amount Receivable 1,322,565 United States Dollars One Million Three Hundred TwentyTwo Thousand Five Hundred Sixty Five only.
ADD : 5% interest per annum on principal claim of USD 975,600 from the date of the present suit till its payment and/or realization.
4. This Court by an order dated 06.04.2018 passed an order of arrest of the defendant vessel and the present application is filed as indicated hereinabove, for rejection of the plaint as provided under Order 7 Rule 11 (a)(d) of the CPC.
5. Heard Mr. Apurva Vakil, learned advocate for the applicantdefendant and Mr. Saurabh Soparkar, learned senior advocate assisted by Ms. Paurami B. Sheth for opponentplaintiff.
6. Mr. Vakil, learned counsel appearing for the defendant has contended as under
1) That as stated in the plaint, the plaintiff company is incorporated under laws of British Virgin Islands. Mr. Vakil, learned counsel for the defendant has further taken this Court through the averments made in the plaint, more particularly paras 3, 6, 7, 10, 11 and 24.
2) Mr. Vakil contended that in para 3 of the plaint, the plaintiff has mentioned that the Page 2 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER plaintiff provided bunkers to the vessel MV Denali formerly known as MV MariePaule. It was pointed out that as stated in para 3 of the plaint, it is the case of the plaintiff that the said vessel was supplied bunkers at the request of the said vessel through the Allied Maritime INC, who were authorised representatives of erstwhile owners of the vessel, i.e., Citrus Shipping Corp. Mr. Vakil contended that the plaintiff has stated that the vessel has undergone change in name and ownership with a sole aim to defeat plaintiff's claim and claims of other identically situated creditors.
3) It was further contended that as averred in para 6 of the plaint, it is clearly mentioned by the plaintiff that the bunkers were supplied as per the contract on or around 18.01.2012.
4) Mr. Vakil further pointed out the averments made in para 7 of the plaint and contended that the plaintiff has relied upon three clauses pertaining to lien, arbitration and applicable law as provided in the contract which is also annexed at AnnexureD to the suit.
5) Mr. Vakil pointed out that even in para 11 of the plaint, the plaintiff has clearly mentioned that on 29.02.2012, the erstwhile Page 3 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER owners of the vessel acknowledged and admitted the outstanding amount for supply of bunkers to the defendant vessel.
6) Mr. Vakil, referring to the emails dated 29.03.2012 at Exhibit F to the suit contended that as per the record as it stands today, the last date of acknowledgment is 29.03.2012 and also referred to the earlier correspondences which is on record dated 27.03.2012, 07.03.2012, 07.03.2012, 01.03.2012, 29.02.2012.
7) Mr. Vakil contended that plaint is ex facie time barred. Mr. Vakil contended that when the order dated 06.04.2018 was passed by this Court, it was not brought to the notice that the cause of action even as stated in the plaint has arisen in the year 2012 and therefore, the suit is barred by limitation.
8) Mr. Vakil further contended that as provided under section 11 of the Limitation Act, 1963, (hereinafter referred to as "Limitation Act"
for the sake of brevity), the Limitation Act as is applicable in India, i.e., the country of the forum would apply on the applicability of the principles of lex fori and therefore, it was contended that as provided under Article 15 of Schedule I to the Limitation Act, the limitation as provided under the Limitation Act would be 3 years. Mr. Vakil Page 4 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER contended that as the last acknowledgment is dated 29.03.2012 and hence, the suit is time barred.
9) Mr. Vakil has relied upon the following judgments
1. Muthukakni Mudaliar Vs. Akdappa Pillai, 1955 Madras 96(FB)
2. R.A. Dickie & C. (Agencies) Ltd. vs. The Municipal Board, Benares & Anr., AIR 1956 Cal 216
3. Rm.Ar.Ar.Rm.Ar. Ramanathan Chettiar & Ors Vs. K.M.O.L.M. Somasundaram Chettiar & Ors., AIR 1956 Madras 527 Relying on the aforesaid judgements, it was contended that as per the applicability of section 11 of the Limitation Act, which would apply, the suit is time barred.
10) Mr. Vakil contended that even if the contention raised in plaint is examined and even as stated in para 24 in particular, even if English Limitation Act, 1980 is applied, the present suit is filed on 06.04.2018 and the last acknowledgment is dated 29.03.2012 and therefore also the last date available under English law would be 28.03.2018 and therefore, admittedly, the plaint is ex facie time barred.
11) Referring to the contentions raised in para 24, para 2 as well para 4 of the plaint, it Page 5 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER was contended that there is no mention of the applicability of the Limitation Act and only for the first time, in reply to the present application, the plaintiff has tried to put a new case by referring to section 17 of the Act, which is diagonally opposite to what is stated in the suit.
12) It was further contended by Mr. Vakil that mere clever drafting would not give limitation to the suit and the plaintiff has merely stated fraud without any basis which has been considered as main reason for passing the order of arrest even by this Court as is evident from para 2 of the order dated 06.04.2018.
13) Mr. Vakil has contended that as provided in Order 7 Order 7 Rule 11 (a)(d), this Court can look into such issue at the threshold and nip the bud and has to look only at the plaint and the documents. However, it was contended that while deciding the application under Order 7 Rule 11, the Court should not look to the averments made in the reply or written statement and the averments are made with an attempt to improve, which is not permissible.
Mr.Vakil has relied upon the following judgments to buttress his argument
1) (1977) 4 SCC 467 - T. Arvidandam v. T.V. Satyapal & Anr.
Page 6 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019C/AS/12/2018 IA ORDER 2) (1998) 2 SCC 70 - ITC Ltd. Vs. Debts
Recovery Appellate Tribunal & Ors.
3) (2003) 1 SCC 557 - Saleembhai & Ors. v. State of Maharastra & Ors.
4) (2004) 3 SCC 137 Sopan Sukhdeo Sable & Ors. v. Assistant Charity Commissioner & Ors.
5) (2016) 14 SCC 275 R. K. Roja Vs. U.S. Rayudu & Anr.
Referring to the aforesaid judgments, it was contended by Mr. Vakil that in facts of the case, the suit is ex facie time barred.
14) On the aforesaid ground, it was contended by Mr. Vakil that the plaint is ex facie time barred. It was contended that plaintiff while approaching this Court has stated in para 24 of the plaint that they are governed by English Limitation Act and even if that is considered, the suit is beyond the period of 6 years as provided under section 5 of the said Act. Mr. Vakil contended that as such, the suit is governed by section 11 of the Limitation Act and Article 15 provides for 3 years and therefore, the suit is time barred.
15) It was contended by Mr. Vakil that effort of the plaintiff in the plaint to say that the change of ownership is to deprive the plaintiff from recovery of its maritime claim, Page 7 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER if read closely, the same would not save the limitation. It was contended that it is not stated in the plaint about alleged fraud and applicability of section 17 of the limitation act and for the first time it is pleaded in reply to the present application. It was further contended that averments of fraud are made in context of the change of ownership and submissions were focused on maritime claim alone and not Limitation Act and the plea of section 17 of the Limitation Act is not averred in the plaint.
7. On the aforesaid grounds, it was contended by Mr. Vakil that the application deserves to be allowed and the suit deserves to be rejected as the same is ex facie time barred.
8. Per contra, Mr. S.N. Soparkar, learned senior counsel appearing for the plaintiff contended that the application is not maintainable and is liable to be dismissed. It was contended by Mr. Soparkar that the question of limitation is mixed question of law and fact and till the evidence is led, such determination is not possible.
9. Referring to contents of para 24 of the plaint, it was contended by Mr. Soparkar that the bunkers were supplied as per the contract and parties had agreed to be governed by law of England. It was further contended that exclusion Page 8 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER of any other law is clearly provided and the parties have voluntarily chosen to the law of England and there is an express agreement between the parties and more particularly as provided under clause 22 (1) of the contract. It was further contended that whether the limitation act of England would apply or Indian Limitation Act would apply is a question which requires to be determined after leading of evidence.
10. It was contended by Mr. Soparkar that the judgments relied upon by the learned counsel for the defendant to canvass the argument of lex fori are not applicable and the same would also require leading of evidence. It was contended by Mr. Soparkar that neither parties are residents of India and as such, both of them are resident of foreign country. Referring to the Equasis report which is on record, it was contended that they are not located in India and such a factor would be a fact and law and could not be adjudicated at this stage. It was further submitted that the judgment of the Madras High Court in the case of Muthukakni Mudaliar (supra) is in context with section 13 of the old limitation act and the same would not apply to the case on hand. It was also submitted that the judgments of Calcutta High Court in the case of RA. Dickie and Co. (Agencies) Ltd. (supra) and Madras High Court in the case of Rm.Ar.Ar.Rm.Ar.
Page 9 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019C/AS/12/2018 IA ORDER Ramanathan Chettiar (supra) also deal with other aspect of special law of limitation and its impact of saving clause and the judgment of the Madras High Court is in relation to the exclusion of time. Mr. Soparkar contended that therefore, in the facts of this case, it is not correct to state that English law would not apply and it is a mixed question of law and fact which can be determined only at the time of trial.
11. Mr. Soparkar in order to further buttress his argument on the aspect that it is a mixed question of law and fact and evidence is required and has relied upon the judgments in the case of Ramesh B. Desai and Ors. Vs. Bipin Vadilal Mehta and Ors. Reported in (2006) 5 SCC 638, Balasaria constructions (P) Ltd. Vs. Hanuman Seva Trust and Ors. Reported in (2006) 5 SCC 658, Satti Paradesi Samadhi and Pillayar Temple vs. M. Sankuntala (Dead) Through Legal Representatives and ors. Reported in (2015) 5 SCC 674 as well as judgment of the Supreme Court reported in (2015) 7 SCC 749. It was reiterated by Mr. Soparkar that the said aspects are required to be tried and ex facie it cannot be said that the suit is barred.
12. It was contended that the plaintiff has pleaded fraud in the reply to the present application and the date of knowledge of fraud is a matter Page 10 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER of evidence and today, it cannot be said that it is barred by limitation and it will have to be tried and cannot be decided in this application.
13. On the aforesaid grounds therefore, it was contended by Mr. Soparkar that the application deserves to be dismissed and the suit cannot be termed as having being filed beyond the period of limitation.
14. Mr. A.S. Vakil, learned counsel appearing for the defendant in further arguments referred to the judgments of the Apex Court in the case of N.V. Srinivasa Kurthy and Ors. Vs. Mariyamma (Dead) by proposed Lrs. and Ors. reported in (2005) 5 SCC 548 and Popat and Kotecha Property vs. State Bank of lndia Staff Association reported in (2005) 7 SCC 510 and submitted that the aforesaid two judgments are referred and relied upon by the Apex Court in the judgment of Balasaria constructions (P) Ltd.(supra). Mr. Vakil contended that in the judgment of Popat and Kotecha Property (supra), considering the facts of that case, the Hon'ble Supreme Court has come to the conclusion that the plaint is not liable to be rejected.
15. Mr. Vakil further referring to para 7, 14,16, 16 and 19 of the judgment of the Apex Court in the case of Ramesh B. Desai (supra) contended that it is apparent from the reading of the said judgment that the same is on demurrer. It was Page 11 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER however further contended that it becomes apparent from reading that the plaint can be rejected and on the contrary, the Hon'ble Supreme Court has observed that it can be done if it is apparent. Mr. Vakil further contended that even the judgment of the Apex Court in the case of Satti Paradesi Samadhi and Pillayar Temple (supra) is on facts of this case. Relying upon the judgment of this Court in the case of State of Gujarat vs. Gangaben Polabhai reported in 2007 (2) GLR 921, it was contended by Mr. Vakil that this Court has taken a view that the plaint can be rejected on the ground of limitation.
16. Mr. Vakil further contended that for the first time in reply to the application in para 3, allegation of fraud is made, however, it is not shown that how section 17 would apply and the same is not in support of limitation. It was contended by Mr. Vakil that in the entire plaint fraud is not pleaded and even in the cause of action, it is not stated by the plaintiff that it has arisen because of fraud. Referring to contents of the plaint and more particularly para 24, it was contended by Mr. Vakil that it is specifically pleaded that the cause of action has arose in 2012. It was reiterated that in the entire plaint fraud is not pleaded and therefore, the contention of fraud cannot be accepted as correct and in law, the plaint can Page 12 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER be rejected. Mr. Vakil further contended that in the whole suit and more particularly in the cause of action, fraud is not alleged. It was contended that in the plaint the case of the plaintiff is that the vessel has undergone change in name and ownership with a sole aim to defeat the plaintiff's claim and claims of other identically situated creditors and that the said registered owners of vessel are alteregos and has only stated that only incorporated with an intention to defraud their creditors, however, in the cause of action, no fraud is alleged and the cause is nonpayment of price of bunkers supplied to the vessel. It was contended by Mr. Vakil that it is not alleged discovery of alleged fraud which has given cause to the plaintiff to file this suit and in the plaint, there is no mention of fraud. It was alleged by Mr. Vakil that in para 24 of the plaint, the plaintiff could have pleaded fraud, further by clever drafting clear and apparent attempt is made to improvise the case which now cannot be done and it is apparent from the plaint that fraud is not the cause of action. It was therefore contended that in the entire suit, there is no plea of fraud and therefore, the contention that same requires evidence to be adduced is not sustainable and cannot be accepted. It was contended that no part of cause of action is based on fraud, however, in cause of action, it is clearly stated that same has Page 13 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER arisen in 2012.
17. Mr. Vakil further contended that even if the question which law would be applied, even if it is considered that the English law would apply according to the version of the plaintiff in the plaint, even if it is taken as it is, the period of 6 years would expire on 28.03.2018, whereas the plaint is filed on 06.04.2018 and therefore, ex facie, the suit is beyond the time of limitation. It was contended that there is no further acknowledgment and therefore, even assuming that English law would apply, the suit is time barred. Mr. Vakil has further relied upon the judgment of the Apex Court in the case of Alcon Electronics Pvt. Ltd vs. Celem S.A. of FIS 34320 Roujan, France & Ors. reported in (2017) 2 SCC 253, A.S.K. Krishnappa Chettiar & Ors. vs. S.V.V. Somiah & Ors. reported in AIR 1964 SC 227, Kunstoffen lndustrie Volendam (KIVO) C.V. vs. Ashok K. Chauhan & Ors. reported in 2009 SCC Online Delhi 158 (Delhi High Court) and BNP Paribas (Suisse) SA & Ors. vs. Atit Omprakash Agarwal & Anr. reported in 2017 SCC Online Bom 9063 (High Court of Bombay) to buttress his argument.
18. It was contended by Mr. Vakil that solely relying upon the averments made in the plaint, none of the three submissions advanced by the plaintiff make the plaint within limitation. It Page 14 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER was contended that it is not that every case has to come for trial, however, ex facie, it can be very well concluded that suit is beyond time in the present case and the same can be rejected as prayed. On the aforesaid, it was contended that the application deserves to be allowed as prayed for.
19. No other or further submissions were made by learned counsel appearing for the parties.
20. Before considering the submissions made by the learned counsel appearing for the parties, it would be appropriate to refer to the relevant contentions and submissions made in the plaint, which are essential to be noted for deciding the present controversy "3. The Plaintiff's entitlement to the outstanding sums arise by reason of the Plaintiff having provided bunkers to the vessel MV DENALI (IMO No. 9438016) (exname MV MariePaule). The said vessel was supplied bunkers at the request of the said vessel through Allied Maritime INC, who were authorized representatives of erstwhile owners of the vessel i.e. Citrus Shipping Corp. Thereafter, to defeat the claim of the Plaintiff, the vessel has been changed the name and ownership twice:
a. MV Ermis, during February 2014 registered owner of the vessel was Ermis Trading SA.
b. MV Dena/i, since December 2015 registered owner of the vessel is Denali Shipping LP.Page 15 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019
C/AS/12/2018 IA ORDER It is submitted that the vessel has undergone change in name and ownership with sole aim to defeat plaintiff's claim and claims of other identically situated creditors. The said registered owners of the vessel are alteregos and enjoy identity and commonality of interest and functional integrity with each other, and are in law and effect, one entity, only incorporated with an intention to defraud their creditors. The same is evident from the Equasis Report. It is submitted that even otherwise the Vessel MV Denali (IMO No. 9438016) (exname MV MariePaule) is in rem responsible for the outstanding payments of the plaintiff towards supply of bunkers which were used by her during her voyages.
"10. The Plaintiff submits that all the transaction documents read along with the General Terms and Conditions of Supply together constitute the agreement between the Plaintiff and the Vessel M V DENALI (IMO No. 9438016) (exname M V MariePaula) and/or master and/or owners and/or charterers and or managers and/or operators and/or anyone authorized by the owners.
11. On 29th February 2012, the erstwhile owners of the vessel acknowledged and admitted the outstanding amount for the supply made and assured the Plaintiff that the payments will be shortly made. They also informed the Plaintiff that due to financial difficulties the company was unable to pay the outstanding. A copy of the email trail dated 29the February 2012 till 29th March 2012 is produced herewith.
24. No part of the cause of action is barred by limitation as the cause of action arose in 2012, when the invoice for supply of bunkers fell due. The Plaintiff's General Terms and Conditions for sale of Page 16 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER the Maritime Fuel provides that the supply was governed by English Law. The English Limitation Act, 1980, Section 5 provides that "An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued". Under the law governing the terms of supply, the Plaintiff is entitled to proceed against the Defendant Vessel."
21. In view of the aforesaid submissions and contentions raised in the plaint, which is the base case of the plaintiff, it is evident that in para 3 of the plaint, it is averred by the plaintiff that the defendant vessel was supplied bunkers at the request of the said vessel through its authorized representatives and in order to defeat the claim of the plaintiff, the vessel has undergone change of ownership twice. It is also evident from the contention raised in para 10 of the plaint as well as taking into consideration other averments made in the plaint that the claim which is made in the present suit is based on the supply of bunkers to the defendant vessel on general terms and conditions of supply more particularly as averred in para 10 of the plaint. Relying upon the email dated 29.03.2012, the plaintiff has contended that the erstwhile owners of the vessel have acknowledged and admitted the outstanding amount for supply made and assured the plaintiff that the payments will be shortly made. The said categorical statement made in para 11 of the plaint Page 17 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER therefore clearly establishes the fact that the last date of acknowledgment of the dues by erstwhile owners is dated 29.03.2012. There is nothing in the plaint as well as the documents to show that any subsequent acknowledgment is made by the erstwhile owners of the defendant vessel. Therefore, the last date of reckoning to determine the limitation aspect would be 29.03.2012. Even in para 24 of the plaint, while describing the cause of action, the plaintiff has based its claim that the cause of action arose in 2012, which can safely be read as 29.03.2012 as on the said date, last acknowledgment was made by the erstwhile owners and the cause of action has arisen on the basis of the invoice for supply of bunkers which fell due. Therefore, even if it is considered that as both the parties are foreign parties and keeping aside the aspect of lex fori as argued by Mr. Vakil, learned counsel for the defendant and applying English Limitation Act, 1980, as averred in para 24 of the plaint, the period of limitation is 6 years.
22. The plaint, if read as it is, as observed hereinabove, the acknowledgment of debt made by erstwhile owners was lastly on 29.03.2012 and even the document which is referred to at Exhibit F also clearly establishes the fact of such acknowledgment. Even if 29.03.2012 is taken into consideration as the last date of Page 18 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER reckoning for determining the period of limitation, the period of 6 years as per section 5 of the English Limitation Act, 1980, would expire on 28.03.2018. Admittedly, the plaint was registered before this Court on 06.04.2018 and therefore, it is beyond 28.03.2018 and thus, beyond the period of limitation prescribed even under section 5 of the English Limitation Act. The aforesaid conclusion can be culled out merely by bare reading of the averments made by the plaintiff in the plaint itself and therefore, the suit is time barred as rightly averred by the defendant.
23. In Ramesh B. Desai (supra), the Hon'ble Apex Court has considered the plea of demurrer is raised by the contesting respondent. While referring to the provisions of Order 7 Rule 11 of the Code of Civil Procedure and more particularly clause (d) thereof, the Hon'ble Apex Court has observed thus "14. The principle underlying Clause (d) of Order VII Rule 11 is no different. We will refer here to a recent decision of this Court rendered in Popat and Kotecha Property vs. State Bank of India Staff Association (2005) 7 SCC 510 where it was held as under in para 10 of the report: "10. Clause (d) of Order 7 Rule 7 speaks of suit, as appears from the statement in the plaint to be barred by any law. Disputed questions cannot be decided at the time of considering an application filed under Order 7 Rule 11 Page 19 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER CPC. Clause (d) of Rule 11 of Order 7 applies in those cases only where the statement made by the plaintiff in the plaint, without any doubt or dispute shows that the suit is barred by any law in force."
16. It was emphasized in para 25 of the reports that the statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11 CPC. The principle is, therefore, well settled that in order to examine whether the plaint is barred by any law, as contemplated by sub rule (d) of Order VII Rule 11 CPC, the averments made in the plaint alone have to be seen and they have to be assumed to be correct. It is not permissible to look into the pleas raised in the written statement or to any piece of evidence. Applying the said principle, the plea raised by the contesting respondents that the Company Petition was barred by limitation has to be examined by looking into the averments made in the Company Petition alone and any affidavit filed in reply to the Company Petition or the contents of the affidavit filed in support of Company Application No. 113 of 1995 filed by the respondents seeking dismissal of the Company Petition cannot at all be looked into.
15. Paragraphs 14 and 21 of the Company Petition read as under: "14. Even the action on the part of respondent Nos. 2 and 3 to use company's funds would amount to fraud on the statute. They have clearly played fraud on Section 77 of the Act and it is also settled law that the party who has committed fraud could not be allowed to retain the fruits of the fraudulent action perpetrated by them.
Page 20 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019C/AS/12/2018 IA ORDER On this principle also status quo ante should be restored so that respondent Nos. 2 and 3 do not get benefit of the fraud played upon the statute."
"21. The petitioners further say that though the share transfers were effected in the year 1982, the petitioners could not have detected the fraud earlier, but they came to know about the fraud in detail when the specific criminal complaint was filed by some interested persons, the office bearers of the Union of the Company before the Criminal Court at Narol and they came to know by or about in the month of May, 1987. Hereto annexed and marked Annexure I is the copy of the said complaint. Thereafter they enquired into the matter and collected whatever additional material available. Petition No. 1 gave notice dated 14.6.1987. However, respondents 2 to 11 wasted too much time in correspondence and thereafter this petition is filed immediately."
19. A plea of limitation cannot be decided as an abstract principle of law divorced from facts as in every case the starting point of limitation has to be ascertained which is entirely a question of fact. A plea of limitation is a mixed question of law and fact. The question whether the words "barred by law" occurring in Order VII Rule 11(d) CPC would also include the ground that it is barred by law of limitation has been recently considered by a two Judge Bench of this Court to which one of us was a member (Ashok Bhan J.) in Civil Appeal No. 4539 of 2003 (Balasaria Construction Pvt. Ltd. vs. Hanuman Seva Trust and others) decided on 8.11.2005 and it was held: "8. After hearing counsel for the Page 21 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER parties, going through the plaint, application under Order 7 Rule 11(d) CPC and the judgments of the trial court and the High Court, we are of the opinion that the present suit could not be dismissed as barred by limitation without proper pleadings, framing of an issue of limitation and taking of evidence. Question of limitation is a mixed question of law and fact. Ex facie in the present case on the reading of the paint it cannot be held that the suit is barred by time."
This principle would be equally applicable to a Company Petition. Therefore, unless it becomes apparent from the reading of the Company Petition that the same is barred by limitation the petition cannot be rejected under Order VII Rule 11(d) CPC."
24. However, considering the facts of the case on hand, as observed hereinabove, on examining whether the plaint is barred by any law sic. limitation law, even if the averments made in the plaint alone are seen and assumed to be correct, then even at the stage of application under Order 7 Rule 11 of the CPC, it can be held that the plaint is barred by limitation as it is apparent from the bare reading of the averments made in the plaint in the case on hand as observed hereinabove. Therefore, even applying the ratio laid down by the Apex Court in the case of Ramesh B. Desai (supra), the present suit is barred by limitation. Even in the case of Balasaria Constructions (P) Ltd. (supra), the Supreme Court has considered the aspect of Order Page 22 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER 7 Rule 11 qua the limitation on the facts of the said case.
25. Even as held by the Apex Court in the case of Madanuri Sri Rama Chandra Murthy vs. Syed Jalal reported in (2017) 13 SCC 174, a plaint can be rejected under Order 7 Rule 11 of CPC if conditions enumerated in the said provision are fulfilled. The Apex Court has observed thus "7. The plaint can be rejected under Order VII Rule 11 if conditions enumerated in the said provision are fulfilled. It is needless to observe that the power under Order VII Rule 11, CPC can be exercised by the Court at any stage of the suit. The relevant facts which need to be looked into for deciding the application are the averments of the plaint only. If on an entire and meaningful reading of the plaint, it is found that the suit is manifestly vexatious and meritless in the sense of not disclosing any right to sue, the court should exercise power under Order VII Rule 11, CPC. Since the power conferred on the Court to terminate civil action at the threshold is drastic, the conditions enumerated under Order VII Rule 11 of CPC to the exercise of power of rejection of plaint have to be strictly adhered to. The averments of the plaint have to be read as a whole to find out whether the averments disclose a cause of action or whether the suit is barred by any law. It is needless to observe that the question as to whether the suit is barred by any law, would always depend upon the facts and circumstances of each case. The averments in the written statement as well as the contentions of the defendant are wholly immaterial while considering the prayer of the defendant for rejection of the plaint. Even when, the Page 23 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER allegations made in the plaint are taken to be correct as a whole on their face value, if they show that the suit is barred by any law, or do not disclose cause of action, the application for rejection of plaint can be entertained and the power under Order VII Rule 11 of CPC can be exercised. If clever drafting of the plaint has created the illusion of a cause of action, the court will nip it in the bud at the earliest so that bogus litigation will end at the earlier stage."
26. It would be appropriate to refer to the judgment of this court in the case of Kanjibhai Bhagwanjibhai Patel v. Nanduben Shamjibhai Sorathiya through P.O.A. Dharmesh P. Trivedi & Ors. reported in 2013(1) GLR 51. This Court while considering the plea of section 17, relying upon the judgment of the Apex Court in the case of N.V. Srinivasan Murthy v. Mariyamma (Dead) by proposed L.Rs. Reported in AIR 2005 SC 2897 as well as decision of Apex Court in the case of Bhupendrabhai Hasmukhbhai Dalwadi v. Deceased Savitriben Ganumal Krishnani reported in 2010(3) GLH, 596 has clearly held that considering the averments in the plaint, it is found that the suit is time barred and the plaint and the suit can be rejected in exercise of power under order 7 Rule 11 of the CPC.
27. The contention raised by the learned counsel for the plaintiff that limitation is a mixed question of law and fact and as relied upon the ratio laid down by the Apex Court in the case of Page 24 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER Satti Paradesi Samadhi and Pillayar Temple (supra) are on different factual matrix. Considering the ratio laid down by the Apex Court in the case of Balasaria constructions (P) Ltd. (supra), which in fact is referred to and relied upon by the Apex Court in the later judgment of Ramesh B. Desai(supra), there is no absolute bar in considering an application under Order 7 Rule 11 and if the plaint itself clearly establishes the fact as averred by the plaintiff that the suit is barred by limitation, the plea of the other side under Order 7 Rule 11 (a)(d0 can be considered and allowed by this Court. However, if it is apparent from the plaint itself, as in the case on hand, the suit is filed after expiry of 6 years even if English Limitation Law is applied, such plea can be considered as without referring to any other aspect, from the plaint itself, it can be culled out that the plaint is registered and suit is filed after a period of six years. This Court in the case of State of Gujarat vs. Gangaben Polabhai reported in 2007(2) GLR 921, has clearly held that when it appears from the very pleadings for undisputed facts from the plaint, the plaint can be rejected even at the pretrial stage.
28. Even in the judgment of the Apex Court in the case of A.S.K. Krishnappa Chettiar & Ors. (supra), it is clearly held that limitation is a Page 25 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER rule of procedure and the same cannot be extended by any analogy or reference to the proceedings. Even at the cost of repetition, it deserves to be noted that even if the last date, i.e., 29.03.2012 is taken into reckoning, the period of limitation even as per the agreement of applicability of English Limitation Act between the plaintiff and the erstwhile owners would expire on 28.03.2018. Reading of the averments in the plaint, it is an admitted position that no fraud is alleged. For the first time, in reply to the present application, in para 4(a), it is averred by the plaintiff that section 17 of the Indian Limitation Act, 1963 would apply, however, no such fraud is pleaded in the suit and as rightly contended by Mr. Vakil, the suit is based on the invoice of bunker supplied by the plaintiff to the erstwhile owners and the suit claim is also based on the invoice of the bunker dated 02.03.2012. Even while describing and stating cause of action, in para 24 of the plaint, it clearly transpires that the suit is based on the invoice for supply of bunkers fell due and the cause of action arose in 2012. Thus, taking into consideration the plaint as it is, there is no allegation of fraud at all. On one hand, the plaintiff has contended that English Limitation Act would apply and in reply to the application, they have resorted to section 17 of the Indian Limitation Act, 1963. Such plea cannot be Page 26 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER raised in a reply to the present application filed by the plaintiff.
29. Considering the factual matrix of the case on hand, from the plaint, it can be culled out that the last acknowledgment of the erstwhile owner is dated 29.03.2012 and the present suit is filed on 06.04.2018 and even by applying the English Limitation law, the suit is time barred and therefore, the present plaint deserves to be rejected under Order 7 Rule 11 of CPC.
30. In light of the aforesaid therefore, from the facts as stated in the plaint itself, it can conclusively be established that the suit is barred by limitation. On the contrary, the facts of this case clearly borne out that the suit is barred by limitation even as per the averments made in para 11 and 24 of the plaint and mere clever drafting would not give limitation to the suit. Merely by making general statement that the ownership was transferred with an intention to defraud their creditors, is without any basis and it is rightly contended on behalf of the defendant that clever drafting would not give limitation to the suit.
31. In facts of this case therefore, even the contention raised by the plaintiff that limitation being mixed question of law and fact in every case can be decided only after evidence Page 27 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER is adduced. However, as held by this Court in Kanjibhai Bhagwanjibhai Patel (supra), if from the averments of plaint itself, it can be established that the suit is beyond the time of limitation, it can be nipped in the bud and the suit can be rejected under order 7 Rule 11 and such facts does arise in the case on hand.
32. Mr. Vakil, learned counsel appearing for the plaintiff as well as the learned counsel for the parties have also raised contentions on the basis that as both the parties are foreign parties and that the present suit is filed in India and as per the principles of lex fori, Indian Limitation Act, 1963 would apply, however, in view of the aforesaid findings, it is not necessary to devolve any further on the principles of lex fori as even otherwise, by application of provisions of English Law as agreed by the parties, i.e., the plaintiff and the erstwhile owners, the suit is beyond the period of 6 years and is time barred. In view of the aforesaid therefore, the judgments referred to and relied upon above by the plaintiff and defendant on the said aspect are not necessary to be dealt with.
33. In view of the above, the application is allowed. The suit is held to be barred by limitation and the same therefore is liable to be rejected under order 7 Rule 11(a)(d) of the Page 28 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019 C/AS/12/2018 IA ORDER CPC. Resultantly, the order of arrest also stands vacated. No costs.
(R.M.CHHAYA, J) bjoy FURTHER ORDER After the order is pronounced, Ms. Paurami Sheth, learned advocate prays for stay of this order to enable her to challenge this order. The same is opposed by learned advocate Mr. A.S. Vakil. However, in facts of this case, this order is stayed till 11.05.2018.
(R.M.CHHAYA, J) bjoy Page 29 of 29 Downloaded on : Sat Aug 03 00:21:00 IST 2019