Suit No.2063 of 2001

23rd February, 2015.

Petitioner Counsel: Mr. KAMAL KATHA, Mr. AKSHAY VANI
Respondent Counsel: Mr. VIBHAV KRISHNA, Mr. SHARATH PAI, Mr. RUSHABH SHETH

Cases Cited:
Mohanlal Dungarmal Futnani Vs. Vishanji Dungarmal Futnani & Ors., 2001 Cal.122 [Para 11]
S.M.K.R. Meyappa Chetty Vs. S.N. Supramanian Chetty, MANU/MN/0061/1916 [Para 12]
Y. Narasimha Rao & Ors. Vs. Y. Venkata Lakshmi & Anr., (1991) 3 SCC 451 [Para 13]
Pallav Sheth Vs. Custodian & Ors., (2001) 7 SCC 549 [Para 14]
Satyendra Narain Sinha & Ors. Vs. Pitamber Singh & Ors., AIR 1938 Patna 92 [Para 16]
The Electricity Board, U.P. State, Vs. Sheo Nath Singh & Anr., AIR 1976 Allahabad 118 [Para 16]
Gurbux Singh Vs. Bhooralal, AIR 1964 SC 1980 [Para 20]

JUDGMENT

JUDGMENT :- By an order dated 30th November 2011, this Court was pleased to frame the following two issues as preliminary issues in this suit :

(1) Whether the suit is barred by the law of Limitation?

(2) Whether the suit is barred under Section 11 of the Civil Procedure Code, 1908 since the plaintiffs had earlier filed a suit before the Court in the State of New York, Surrogate's Court, County of Nassau?

2. One Jaswant Singh Premi expired on 22nd September 1993 in New York, USA leaving behind him a last Will and Testament dated 11th July 1993. The plaintiff no.1 who is the son of the said deceased Jaswant Singh Premi was appointed as an executor under the Will. The plaintiff no.2 is the wife of the first plaintiff. The plaintiff no.3 is the daughter of the plaintiff nos.1 and 2 who, at the time of death of Jaswant Singh Premi was a minor, born on 22nd February 1993. The deceased Jaswant Singh Premi, by way of his Will, created a trust to the benefit of the plaintiff no.3. The plaintiff nos.1 and 2 are trustees of the said trust and they are suing in their capacity as executor and trustees. Defendant no.1 in his written statement in paragraphs 7 and 8 has stated that he was a nominee and hence a trustee. The defendant no.1 was the cousin of the deceased Jaswant Singh Premi and an uncle of the plaintiff no.1. The defendant no.2 is nephew of the deceased and the defendant no.3 is the banking company constituted under the provisions of Banking companies (Acquisition & Transfer of Undertaking) Act, 1980.

Defendant no.1 died on or about 3rd August 2012 and is now represented by his legal heirs and representatives. The defendant no.2 is absconding and interpol alerts are pending against him. The cause of action in short is that the defendants in collusion with each other, by the fraudulent acts of omission and commission and by deliberate fraud and suppression of the relevant documents kept the plaintiffs from having full and complete knowledge of the plaintiffs' right to the amounts which were to go for the benefit of plaintiff no.3 under the last Will and Testament of Jaswant Singh Premi and the same has been misappropriated by the defendants. The plaintiff no.3 is the true owner of the amounts and is entitled to recover the same with interest. The amounts involved are substantial. The reliefs sought in the plaint are as under :

(a) a decree against defendant no.1(a) to 3 to render full true and correct accounts in respect of Account No.FCNR 05/92-93 and/or FCNR 424/173/93 deposited by the 1st Plaintiff's father with the 3rd Defendant Bank and all accretions thereto and for or in respect of any other monies that may have been deposited be by or on behalf of 1st Plaintiff's father, Jaswant Singh Premi;

(aa) a decree against Defendant no.1(a) to 3 to render full true and correct accounts in respect of FCNR A/c. No.0756232/8/93 deposited by the 1st Plaintiff's father with the 3rd Defendant Bank and all accretions thereto and for or in respect of any other monies that may have been deposited by or on behalf 1st Plaintiff's father Jaswant Singh Premi;

(ac) a decree against Defendants no.1(a) to 3 to render full true and correct accounts in respect of Account Nos.(i) FCNR 0677213/2/93-94, (ii) 0677255/33/93-94, (iii) FCNR 0677249/27/93-94, (iv) FCNR 0676537/31/92, (v) FCNR 0676541/35/92, (vi) FCNR 0676571/70/92-93, (vii) FCNR 0677258/34/93-94, (viii) FCNR 0773134/93-94 and (ix) FCNR 0773739/5/93-94 deposited by the 1st Plaintiff's father with the 3rd Defendant Bank and all accretions thereto and for or in respect of any other monies that may have been deposited by on or behalf of 1st Plaintiff's father Jaswant Singh Premi;

(b) a decree against Defendants no.1(a) to 3 in the sum of US Dollars 4,11,817.87 with interest thereon at 12% per annum from 4th February 1994 as per particulars annexed hereto and marked Exhibit 'I, being the amount of the said deposit and accretions thereto and/or as and by way of damages for loss caused to the Plaintiffs by the Defendant nos.1(a) to 3;

(ba) a decree against Defendant No.1(a) to 3 in the sum of US$ 560,813.27 with interest thereon at 12% per annum from January 27, 1994 as per particulars annexed hereto and marked Exhibit 'I-1', being the amount of the said deposit and accretions there and/or as and by way of damages for loss caused to the Plaintiffs by the defendant Nos.1(a) to 3;

(bb) a decree against Defendant Nos.1(a) to 3 in the sum of US$ 1,827,743.38 and GBP 5,057.19 with interest thereon at 12% per annum from August, 1994 as per particulars annexed hereto and marked Exhibit 'I-2' being the amount of the said deposit and accretions and/or as and by way of damages for loss caused to the Plaintiffs by the Defendant Nos.1(a) to 3.

3. It is the case of the defendants that the suit is barred by limitation and also hit by principles analogous to res-judicata.

4. A further background of certain other proceedings that was taken by the plaintiffs is necessary to be mentioned to appreciate the issues in the matter :

Sometime on 19th January 1994, the plaintiff nos.1 and 2 received a letter from defendant no.3 addressed to Jaswant Singh Premi giving the details of account No.0000424/173/93 which was up for renewal. This indicated that defendant no.3 was not aware of the demise of Jaswant Singh Premi. In June 1994, the plaintiffs applied for Probate of the Will in New York, County Nassau, USA. This was because when the plaintiffs made enquiry with defendant no.3, though defendant no.3 initially disclosed certain details, the plaintiffs were advised that unless they obtain a letter of administration (LOA) from a competent Court in India, the plaintiffs will not be entitled to get further details or to deal with the Bank. Under Section 228 of the Indian Succession Act, 1925 and form 107 of the Bombay High Court (OS) Rules, the plaintiffs had to first obtain a Probate from the competent Court in USA. The plaintiffs, therefore, applied for Probate in USA and after obtaining the Probate, filed proceedings in Bombay and obtained LOA on 27th February 1997. The petition filed was Probate Petition No.713 of 1996. In the said petition, on an application taken out by the plaintiffs for disclosure of details relating to the accounts with defendant no.3 that the deceased Jaswant Singh Premi had, this Court by two orders dated 24th December 1997 and 14th January 1998, directed defendant no.3 to disclose details of all accounts of the deceased Jaswant Singh Premi had.

In July 1998, while giving inspection, defendant no.3 suddenly stopped giving inspection and informed the plaintiffs that the details that were being sought, all were old accounts and hence the bank cannot give inspection or provide details.

It is the case of the plaintiffs that during the course of inspection, they found too many grey areas and loopholes and the bank became cautious and did not give inspection. Some of the issues which alarmed the plaintiffs and made the defendant no.3 stop giving inspection were (a) the name of defendant no.2 was added to all the accounts on 12th October 1993 whereas Jaswant Singh Premi died on 22nd September 1993, (b) there was a letter addressed by defendant no.1 on 4th February 1994 to defendant no.3 instructing renewal of one of the accounts and also instructing that the accounts be issued in the name of defendant no.2 since the other account holder Jaswant Singh Premi had expired and (c) a copy of the Power of Attorney executed by defendant no.2 in favour of defendant no.1 and the Death Certificate of Jaswant Singh Premi were annexed to the said letter.

5. The plaintiffs had filed a suit on 9th May 2000 bearing suit No.280/2001 which was withdrawn on 10th April 2001 with the Court granting liberty to file fresh suit. The present suit was lodged on 27th April 2001.

6. On 22nd February 2011, plaintiff no.3 turned 18. Under the last Will and testament of Jaswant Singh Premi, plaintiff no.3 was to get the amounts bequeathed to her on her attaining age of 21.

7. It is the case of the plaintiffs that the suit is not barred by limitation. The suit was lodged on 27th April 2001 and their submissions are on three counts namely : (a) under Section 6 of the Limitation Act, 1963, where a person entitled to institute a suit is at the time from which the prescribed period is to be reckoned a minor then the person may institute a suit within the same period after the person becomes a major namely becomes of 18 years of age. The plaintiff no.3 attained the age of 18 on 22nd February 2011 and hence not time barred ; (b) the suit has been filed in view of a fraud played by defendant nos.1, 2 and 3 and therefore the period of limitation shall not begin to run until the plaintiffs had discovered the fraud or could with reasonable diligence have discovered it. The plaintiffs realized that there was a fraud being played by the defendants only when the bank stopped giving inspection and provide details and that happened in July 1998. Hence, the suit is within limitation; and (c) under Section 10 of the Limitation Act, 1963, even if defendant no.1 was a nominee of all the FCNR Accounts, he is only a legal representative of all the beneficiaries/legal heirs of deceased Jaswant Singh Premi and therefore, under Section 10 of the Limitation Act, any suit against such a person shall not be barred by any length of time.

8. The plaintiffs also raised a common point for all the above three counts, viz., that the period when the earlier suit No.380 of 2003 was filed and withdrawn with liberty to file fresh suit, i.e., between 9th May 2000 and 10th April 2001, should in any event be excluded.

9. On the issue of Section 11 of the Code of Civil Procedure, 1908 res-judicata, the plaintiffs submitted that the plaintiffs had filed a suit in USA against defendant no.2 which came to be withdrawn due to a settlement offered by defendant no.2. But the settlement never came through. In any event, the counsel for the plaintiffs submitted that no order of the US Court is before this Court and any judgment of US Court is also a question of fact. The defendants were given opportunity to file evidence to bring on record all documents on 22nd August 2013 and extended on 3rd October 2013, but the defendants chose not to lead any evidence. Therefore, no document can be looked into unless it proved as fact.

10. The counsel for defendant no.1, whose submissions were adopted by the counsel for defendant no.3, stated that the suit is grossly time barred on various counts : (i) the suit has been filed by defendant no.1 as executor of the last Will and Testament of Jaswant Singh Premi who died on 21st September 1993 hence the period of limitation would get over on 22nd September 1996; (2) the Probate of the Will in USA was obtained on 3rd June 1994 in which details of FCNR Accounts are mentioned and three years from that date will be 2nd June 1997; (3) the US proceedings against defendant no.2 was filed on 24th April 1996 and three years will be 23rd April 1999 when there was an ex-parte order passed on 21st June 1996 permitting plaintiff no.1 to sue for the FCNR's and three years will be 20th June 1999. These US proceedings are not brought on record and cannot be considered because despite being given opportunities, the defendants did not lead evidence to bring it on record ; (4) Probate Petition No.713/1996 was filed in Mumbai High Court in which again details of FCNR's are given and three years will get over on 19th September 1999; (5) Suit No.380 of 2001 was filed on 9th May 2000 in which details of FCNR's are mentioned. In Exhibit "A" to the said suit and Exhibit "B" to the said suit, the dates given are 4th August 1995 and 7th September 1995 and hence three years will get over on 3rd August 1998 and 6th September 1998, respectively. The counsel, therefore, submitted that the suit, from any point of view, is barred by limitation.

11. The counsel for defendant no.1 also submitted that under Section 211 of the Indian Succession Act, 1925, the property of the deceased vests on the executor and therefore, the time should commence from the date on which the limitation should get triggered and the date is the date on which Jaswant Singh Premi died, i.e., 22nd February 1993. He relied on a judgment in the matter of Mohanlal Dungarmal Futnani Vs. Vishanji Dungarmal Futnani & Ors., 2001 Cal.122 to butress this point. In my view, though this judgment re-emphasizes the legal position that the estate of the deceased vests in the executor upon the death of the testator irrespective of grant of probate or not, is not really relevant to the present case inasmuch as it does not deal with the situation where a minor is involved.

12. No probate is required for an executor to sue but we have also to take into account Section 6 of the Limitation Act. The counsel for defendant no.1 relied on judgment of the Bombay High Court in the matter of S.M.K.R.Meyappa Chetty Vs. S.N. Supramanian Chetty, MANU/MN/0061/1916 to submit that the executor is a representative of the Testator.

13. The counsel also relied on a judgment of the Apex Court in the matter of Y. Narasimha Rao & Ors. Vs. Y. Venkata Lakshmi & Anr., (1991)3 SCC 451 to submit that under Section 74(1)(iii) of the Indian Evidence Act, documents forming the acts or records of the acts of public judicial officers of a foreign country are public documents and under Section 76 read with Section 77 of the Indian Evidence Act, certified copies of such documents may be produced in proof of their contents. In my view, it does not help the case of defendant no.1 in the current proceedings. In the said judgment the Apex Court has also held that under Section 86 of the Indian Evidence Act there is presumption with regard to the genuineness and accuracy of such certified copy only if it is also certified by the representative of our Central Government in or for that country in the manner in which it has been certified is commonly in use in that country for such certification. There is no such certification whatsoever. Therefore, none of the documents relating to the American proceedings can be considered.

14. On the issue of fraud, it was submitted that fraud has to be first established. The Apex Court in the matter of Pallav Sheth vs Custodian & Ors., (2001) 7 SCC 549 has, in paragraphs 47 and 48, held as under :

47 Section 17 of the Limitation Act, inter alia, provides that where, in the case of any suit or application for which a period of limitation is prescribed by the Act, the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of the defendant or his agent (Section 17(1)(b)) or where any document necessary to establish the right of the Plaintiff or Applicant has been fraudulently concealed from him (Section 17(1)(d)), 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. These provisions embody fundamental principles of justice and equity, viz, that a party should not be penalised for failing to adopt legal proceedings when the facts or material necessary for him to do so have been wilfully concealed from him and also that a party who has acted fraudulently should not gain the benefit of limitation running in his favour by virtue of such fraud.

48 The provisions of Section 17 of the Limitation Act are applicable in the present case. The fraud perpetuated by the Appellant was unearthed only on the Custodian receiving information from the Income Tax Department, vide their letter of 5th May, 1998. On becoming aware of the fraud application for initiating contempt proceedings was filed on 18th June, 1998, well within the period of limitation prescribed by Section 20. It is on this application that the Special Court by it's order of 9th April, 1999 directed the application to be treated as a show cause notice to the Appellant to punish him for contempt. In view of the abovestated facts and in the light of the discussion regarding the correct interpretation of Section 20 of the Contempt of Courts Act it follows that the action taken by the Special Court to punish the Appellant for contempt was valid. The Special Court has only faulted in being unduly lenient in awarding the sentence. We do not think it is necessary, under the circumstances to examine the finding of the Special Court that this was a continuing wrong or contempt and, therefore, action for contempt was not barred by Section 20.

In my view, a fraud can be established only at the trial and not at the interim stage.

15. I have gone through the pleadings and considered the arguments of the opposing counsels. In my view, the suit is not barred by limitation and is not hit by the principles analogous to res-judicata, i.e., Section 11 of the Code of Civil Procedure. On limitation, when one reads the plaint as a whole though plaintiff no.1 has described his role as an executor and trustee and plaintiff no.2 as trustee, the whole purpose of filing this suit is as a trustee is for plaintiff no.3. Plaintiff no.3 was a minor and I would say an infant of 7 months when Jaswant Singh Premi died. If plaintiff no.3 herself had to institute a suit, she could have instituted the suit after she attained 18 which would be in the year 2011. The suit has been lodged on 27th April 2001. If we have to accept the submissions of the counsel for defendant no.1 that the executor should have filed the suit within three years and not having done, the plaintiff no.3 cannot take advantage of her status as a minor, then, in that case, Section 6 will be rendered redundant. The submissions of counsel for defendant no.1 that the executor need not have waited for obtaining Probate is also not acceptable, because, the beneficiary of the Will is a minor who turned 18 only in 2011, 10 years after the suit was lodged. If there was no minor involved, the said situation might have been different.

16. In the matter of Satyendra Narain Sinha & Ors. Vs. Pitamber Singh & Ors., A.I.R. 1938 Patna 92, where the issue was for execution of a decree, it was held that a minor is not precluded from applying within the statutory period of three years from his attaining majority and order in previous proceeding does not affect it. The Court held that Section 6 applies to every minor, whether he has a guardian or not and the existence of a minor competent to sue is immaterial. Under Section 6(1) of the Act, a minor is "entitled to institute a suit or make an application for the execution of a decree" within the statutory period of three years after attaining majority and it is clear that the Legislature never intended to restrict the protection given to a minor by the acts of his guardian in the matter of making an application for execution. The Court further held that where a guardian for minor applies for execution of a decree on behalf of the minor and that application is held to be barred by limitation, the minor is not precluded from applying for execution of decree within the statutory period of three years from the date of attaining majority and the orders passed in the previous execution proceedings is not binding on him. In the matter of The Electricity Board, U.P. State, Vs. Sheo Nath Singh & Anr., AIR 1976 Allahabad 118, the Court held that where the child of the deceased was a minor on the date of accident a suit for compensation filed on his behalf and for the benefit of his widowed mother during the continuation of his minority but after expiry of ordinary period of limitation will be saved under Section 6.

17. Therefore, in my view, the fact that plaintiff no.3 was a minor for whose benefit this suit has been filed, even assuming on a worse case the scenario the suit was filed by plaintiff no.1 as the executor might have been time barred, Section 6(1) will come to the rescue of the plaintiffs because it was never the intention of the Legislature to restrict the protection to the minor by the acts of his guardian.

18. Reading the plaint, as a whole, it also makes it clear that the main grievance or the cause of action is the fraud played as alleged by the defendants. The plaintiffs never imagined something was amiss until they started taking inspection pursuant to orders of this Court and suspicion was aroused when defendant no.3 stopped giving inspection. Therefore, as the last inspection was given in July 1998, under Section 17 of the Limitation Act, the 3 years period would commence from July 1998 and therefore the suit will still be within time.

19. Since, I have held in favour of the plaintiffs on these two points, there is no need to go into the 3rd point under Section 10 of the Limitation Act.

20. On the issue of res-judicata, the defendants were given an opportunity to lead evidence. However, the defendants chose not to lead evidence. The Apex Court in the matter of Gurbux Singh Vs. Bhooralal, AIR 1964 Supreme Court 1980 has held that where the plea of bar is raised by the defendants, the onus is upon the defendants to establish satisfactorily that the suit is barred and cannot be presumed merely on basis of inferential reasoning. Paragraphs 6 and 7 of the judgment read as under :

(6) In order that a plea of a bar under 0. 2. r. 2(3), Civil Procedure Code should succeed the defendant who raises the plea must make out (1) that the second suit was in respect of the same cause of action as that on which the previous suit was based, (2) that in respect of that cause of action the plaintiff was entitled to more than one relief, (3) that being thus entitled to more than one relief the plaintiff, without leave obtained from the Court, omitted to sue for the relief for which the second suit had been filed. From this analysis it would be seen that the defendant would have to establish primarily and to start with, the precise cause of action upon which the previous suit was filed, for unless there is identity between the cause of action on which the earlier suit was filed and that on which the claim in the later suit is based there would be no scope for the application of the bar. No doubt, a relief which is sought in a plaint could ordinarily be traceable to a particular cause of action but this might, by no means, be the universal rule. As the plea is a technical bar it has to be established satisfactorily and cannot be presumed merely on basis of inferential reasoning. It is for this reason that we consider that a plea of a bar under 0. 2. r. 2, Civil Procedure Code can be established only if the defendant files in evidence the pleadings in the previous suit and thereby proves to the Court the identity of the cause of action in the two suits. It is common ground that the pleadings in C.S. 28 of 1950 were not filed by the appellant in the present suit as evidence in support of his plea under 0. 2. r. 2, Civil Procedure Code. The learned trial Judge, however, without these pleadings being on the record inferred what the cause of action should have been from the reference to the previous suit contained in the plaint as a matter of deduction. At the stage of the appeal the learned District Judge noticed this lacuna in the appelllant's case and pointed out, in our opinion rightly, that without the plaint in the previous suit being on the record, a plea of a bar under 0. 2. r. 2, Civil Procedure Code was not maintainable. Learned counsel for the appellant, however, drew our attention to a passage in the judgment of the learned Judge in the High Court which read:

LP(D)ISCl-27(a) 836 "The plaint, written statement or the judgment of the earlier Court has not been filed by any of the parties to the suit. The only document filed was the judgment in appeal in the earlier suit. The two Courts have, however, freely cited from the record of the earlier suit. The counsel for the parties have likewise done so. That file is also before this Court." It was his submission that from this passage we should infer that the parties had, by agreement, consented to make the pleadings in the earlier suit part of the record in the present suit. We are unable to agree with this interpretation of these, observations. The statement of the learned Judge "the two Courts have, however, freely cited from the record of the ,earlier suit" is obviously inaccurate as the learned District Judge specifically pointed out that the pleadings in the earlier suit were not part of the record and on that very ground had rejected the plea of the bar under 0. 2. r. 2, Civil Procedure Code. Nor can we find any basis for the suggestion that the learned Judge had admitted these documents at the second appeal stage under 0. 41. r. 27, Civil Procedure Code by consent of parties. There is nothing on the record to suggest such an agreement or such an order, assuming that additional evidence could legitimately be admitted in a second appeal under 0. 41. r. 27, Civil Procedure Code. We can therefore proceed only on the basis that the pleadings in the earlier suit were not part of the record in the present suit.

(7) Learned counsel for the appellant, however, urged that in his plaint in the present suit the respondent had specifically referred to the previous suit having been for mesne profits and that as mesne profits could not be claimed except from a trespasser there should also have been an allegation in the previous suit that the defendant was a trespasser in wrongful possession of the property and that alone could have been the basis for claiming mesne profits. We are unable to accept this argument. In the first place, it is admitted that the plaint in the present suit was in Hindi and that the word 'mesne profits' is an English translation of some expression used in the original. The original of the plaint is not before us and so it is not possible to verify whether the expression 'mesne profits' is an accurate translation of the expression in the original plaint. This apart, we consider that learned counsel's argument must be rejected for a more basic reason. Just as in the case of a plea of res judicata which cannot be established in the absence on the record of the judgment and decree which is pleaded as estoppel, we consider that a plea under 0. 2. r. 2, Civil Procedure Code cannot be made out except on proof of the plaint in the previous suit the filing of which is said to create the bar. As the plea is basically founded 837 on the identity of the cause of action in the two suits the, defence which raises the bar has necessarily to establish the, cause of action in the previous suit. The cause of action would be the facts which the plaintiff had then alleged to support the right to the relief that he claimed. Without placing before the Court the plaint in which those facts were alleged, the defendant cannot invite the Court to speculate or infer by a process of deduction what those facts might be with reference to the reliefs which were then claimed. It is not impossible that reliefs were claimed without the necessary averments to justify their grant. From the mere use of the words 'mesne profits' therefore one need not necessarily infer that the possession of the defendant was alleged to be wrongful. It is also possible that the expression 'mesne profits' has been used in the present plaint without a proper appreciation of its significance in law. What matters is not the characterisation of the particular sum demanded but what in substance is the ,allegation on which the claim to the sum was based and as regards the legal relationship on the basis of which that relief was sought. If is because of these reasons that we consider that a plea based on the existence of a former pleading cannot be entertained when the pleading on which it rests has not been produced. ......"

The defendants have not cleared the test of proving such bar. Moreover, the issue of limitation is a mixed question of law and fact.

21. In these circumstances, in my view, the suit is filed within limitation and also not hit by the principles analogous to res-judicata, i.e., Section 11 of the Code of Civil Procedure. My answer to both the preliminary issues is -Negative. Costs of this application will be costs in the suit.

22. The suit to be listed on 25th March 2015 for framing of issues.

In the meanwhile, parties to file their respective affidavit of documents and also complete discovery and inspection.

Ordered accordingly.