Delhi High Court - Orders
K.N Rao & Anr vs M/S Composite Securities Ltd & Ors on 14 July, 2021
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
Digitally Signed By:DINESH
SINGH NAYAL
Signing Date:15.07.2021 17:40:11
$~A-5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RSA 42/2020
K.N RAO & ANR. ..... Appellants
Through: Mr. Karan Lahiri and Mr. Vinayak
Mehrotra, Advocates.
(M:9999093362)
versus
M/S COMPOSITE SECURITIES LTD & ORS ..... Respondents
Through: None.
CORAM:
JUSTICE PRATHIBA M. SINGH
ORDER
% 14.07.2021
1. This hearing has been done through video conferencing. CM APPL.8316/2020 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of.
RSA 42/20203. The present second appeal has been filed challenging the judgment dated 22nd October, 2019 by which the District Judge has upheld the judgment of the Trial Court dated 23rd December, 2014 dismissing the suit for declaration and recovery filed by the Appellants/Plaintiffs (hereinafter, "Plaintiffs").
4. The case of the Plaintiffs is that they had entrusted certain shares with Respondent No.2/Defendant No.2 (hereinafter, "Defendant No.2"), which were illegally mis-appropriated/converted by the said Defendant and the value of the shares was not paid to the Plaintiffs.
5. The submission of Mr. Karan Lahiri, ld. counsel for the Plaintiffs is that in the present case, the Trial Court has come to the conclusion that RSA 42/2020 Page 1 of 3 Digitally Signed By:DINESH SINGH NAYAL Signing Date:15.07.2021 17:40:11 Defendant No.2 had, in fact, mis-appropriated the sale proceeds from the shares of the Plaintiffs. However, the Trial Court rejected the suit on the ground that the same is barred by limitation. This judgment of the Trial Court has been upheld by the impugned judgment of the Appellate Court. The finding relied upon by ld. counsel for the Plaintiffs reads as under:
"25. Defendant no.2 has taken plea that the amount claimed by the plaintiffs has already been given/paid to them and nothing has to be given/paid to them but no evidence has been led on behalf of the defendant no.2 to prove that the amount claimed by the plaintiffs i.e. Rs.1,15,400/- was paid him to them. Therefore, it is declared that the defendant no.2 has appropriated the sale proceeds of the shares of the plaintiffs. The relief regarding declaration against the defendant no.2, as prayed is accordingly decided."
6. It is further submitted that there is a clear question of law that arises in this case, inasmuch as after the shares were initially handed over to Defendant No.2, he sold the shares between June and August, 2003 vide three different transactions. However, knowledge of the said sale was acquired by the Plaintiffs only on 30th July, 2005. According to ld. Counsel, limitation only runs from the date of knowledge, as per Article 68 of the Schedule to the Limitation Act, 1963, which deals with dishonest mis- appropriation of movable property or conversion of movable property or movable property lost, or acquired by theft. Ld. counsel also relies upon Article 4 to argue that Defendant No.2 was an agent of the Plaintiffs and the limitation for any suit against an agent for misconduct or neglect arises from RSA 42/2020 Page 2 of 3 Digitally Signed By:DINESH SINGH NAYAL Signing Date:15.07.2021 17:40:11 the date when knowledge is acquired of the misconduct or neglect by the agent. He submits that the plaint is based on the plea that Defendant No.2 and the Plaintiffs were in a fiduciary capacity with each other. Accordingly, the issue of limitation has been wrongly decided by the Trial Court as well as the Appellate Court.
7. After hearing ld. Counsel for the Plaintiffs, this Court is of the opinion that the following substantial question of law arises in the present case:
Whether the suit is barred by limitation?
8. Issue notice to the Respondents. Notice may be served through email as also through any other mode that may be available. The Appellants/Plaintiffs are also permitted to obtain dasti notice and serve the same through courier, if so advised.
9. List before the Registrar on 26th August, 2021 for completion of pleadings.
10. List before Court on 4th October, 2021.
11. Considering that this is a second appeal, no pleadings need to be filed by the parties. However, the trial court record relating to the suit, being Suit No. 567/12 titled Mr. K.N. Rao & Anr. v. Composite Securities Ltd. & Ors., as also the appeal, being RCA No. 61244/2916 titled Mr. K.N. Rao & Anr. v. Composite Securities Ltd. & Ors., shall be summoned by the Registry from the Civil Judge, Senior Division, Central District, Tis Hazari Courts, Delhi and ADJ-11 (Central), Tis Hazari Courts, Delhi, respectively. The same shall be scanned and tagged with the electronic court record. Parties are permitted to obtain copies of the electronic court record.
PRATHIBA M. SINGH, J.
JULY 14, 2021/dk/T RSA 42/2020 Page 3 of 3