First Appeal No.53 of 2014,First Appeal No.69 of 2014

11th December, 2014.

Petitioner Counsel: Mr. S.G. DESSAI, Sr. Adv. with Mr. G. TELES
Respondent Counsel: Mr. V.A. LAWANDE

Cases Cited:
Nanalal Zaver Vs. Bombay Life Assurance Co. Ltd., 1950 Bom.L.R. (Volume LII) SC 745 [Para 9,20,21]
Wali Mohammed (Dead) by LRs. Vs. Rahmat Bee (Smt) & Ors., 1999(2) ALL MR 453 (S.C.)=(1999) 3 SCC 145 [Para 9,20,23]
State Bank of Travancore Vs. Kingston Computers India Private Limited, (2011)11 SCC 524 [Para 10,13]
Bangalore Turf Club Limited Vs. Regional Director, Employees’ State Insurance Corporation, 2009 ALL SCR 1474=(2009) 15 SCC 33 [Para 10,21,23]
Dale and Carrington INVT. (P) Ltd. Vs. P.K Prathapan & Ors., (2005)1 SCC 212 [Para 10]
Satish and Company Vs. S. R. Traders, 1997(4) ALL MR (JOURNAL) 58=(1997)1 ALT (Cri.)696 [Para 10,13]
M/s. Fomento Resorts and Hotels Ltd. Vs. Dr. Amilcar Cunha Souza & Anr., W.P. No.48/2009, Dt.24/06/2010 [Para 10,13]
V. Narsimha Aiyangar, official Vs. The Official Assignee of Madras, (1931) 60 M.L.J. 280 [Para 10,22,23]
T. Arivandandam Vs. T. V. Satyapal & Anr., (1997) 4 SCC 467 [Para 15]
M/s. Crescent Petroleum Ltd. Vs. ‘MONCHEGORSK’ & Anr., 2000(3) ALL MR 714=AIR 2000 Bombay 161 [Para 15]

JUDGMENT

U. V. Bakre, J. :- This common judgment shall dispose of both the appeals since they involve common facts and questions of law. By consent of the parties, the present appeals are taken up for final adjudication at the stage of admission itself.

2. Heard Mr. Dessai, learned Senior Counsel appearing on behalf of the appellants and Mr. Lawande, learned Counsel appearing on behalf of the respondent.

3. These appeals are directed against the order dated 17/12/2013 passed by the learned Civil Judge, Senior Division, Panaji (trial Court, for short) in Special Civil Suits No. 23/2010/B and 24/2010/B.

4. The appellants are the defendants whereas the respondent is the plaintiff in the said suits. Parties shall, hereinafter, be referred to as per their status in the said suits.

5. The plaintiffs have filed the said suits for eviction of the defendants from the suit property respectively described in each suit; for recovery of arrears rent, damages, etc. The plaintiffs claim to be the owners of the suit properties and that since each plaintiff was one of the then directors of defendant no. 1-Company, at the request of defendant no. 1, he had agreed that after acquisition of the suit property, the same would be leased out by him to the defendant no. 1, for five years. The plaintiffs further allege that accordingly, the suit property, in each case was leased to the defendant no. 1 vide registered Lease Deed dated 26/10/2004. Alleging breach of covenants contained in the Lease Deed on account of non-payment of rent and on account of subletting the suit property by the defendant no. 1 to the defendant no. 2, the plaintiffs filed the said suits.

6. The defendants filed their written statement thereby denying the case of the plaintiffs. The defendant no. 1 had filed a counter claim, in each suit, for declaration that the plaintiff holds the suit property in trust for defendant no. 1; for a direction to the plaintiff to execute a conveyance in respect of the suit property in favour of the defendant no. 1 and to do all acts, deeds and things that may be necessary to perfect the title of the defendant no. 1 in respect of the suit property; for permanent injunction and for recovery of money, being amount misappropriated by him for personal use.

7. The plaintiff, in each suit, filed an application under Order VII, Rule 11 of the Code of Civil Procedure (CPC) for rejection of the said counter claim filed by the defendant no. 1, on the ground that the same does not disclose cause of action; that the same is barred by law of limitation; and that the trial Court did not have territorial jurisdiction to entertain the same. The defendant no. 1 filed reply to the said application. Parties filed written arguments before the learned trial Court besides making oral submissions.

8. Learned Trial Court held that thought there was provision under Order 8 Rule 6C of CPC for exclusion of counter claim, however, the provision of Order VII Rule 11 was still applicable to the counter claim. The trial Court further held that Section 10 of the Limitation Act was not applicable to the plaintiff who was not a trustee and, therefore, the limitation cannot be said to be excluded by virtue of Section 10 of the Limitation Act. The trial Court held that the specific averment in the counter claim showed that the subject matter of the same pertained to the year 2004-2005 and that the criminal complaint, which was filed made it clear that the facts were to the knowledge of the defendant no. 1 prior to the filing of the counter claim, which had been filed in the year 2011 and, therefore, the counter claim was barred by Law of Limitation. Consequently, the counter claim filed by the defendant no. 1 came to be rejected, in both the suits. These orders are impugned in the present appeals.

9. Mr. Dessai, learned Senior Counsel for the defendants submitted that they had filed the counter claim, in terms of Section 10 of the Limitation Act under which there is exclusion of the limitation period and therefore there was no need to specifically mention the date of cause of action. He submitted that in so far as the rejection of the plaint under Order VII, Rule 11 of C.P.C. is concerned, the plaint has to be meaningfully read. He read out paragraphs 24 and 28 of the counter claim in Special Civil Suit No. 23/2010 and paragraphs no. 28 and 32 of the counter claim in Special Civil Suit no. 24/2010 and submitted that relevant pleadings were made in the counter claims for application of Section 10 of the Limitation Act. He further submitted that the plaintiffs in both the suits were directors of the defendant no. 1 and that the Directors of the Company are trustees and therefore, Section 10 of the Limitation Act is applicable to them. He also contended that even otherwise Section 10 does not speak about trustees within the meaning of Indian Trust Act. According to him, therefore, Section 10 includes constructive trustees also. Learned Counsel further submitted that the counter claim has been filed under Order VIII, Rule 6A and that there is provision for exclusion of the counter claim under Rule 6C and, therefore, Order VII, Rule 11 of C.P.C. is not applicable. Learned Senior Counsel relied upon the following judgments :

(i) Nanalal Zaver Vs. Bombay Life Assurance Co. Ltd, [1950 Bombay Law Reporter (Volume LII) SC 745]

(ii) Wali Mohammed (Dead) by LRs Vs. Rahmat Bee (Smt) and others, [(1999) 3 SCC 145] : [1999(2) ALL MR 453 (S.C.)]

10. On the other hand, Mr. Lawande, learned Counsel appearing for the plaintiff submitted that there is no resolution authorising Mr. Manuel Paully D,Souza to file the appeals nor there is any statement in the appeal memos about the same. He submitted that in the absence of resolution, the appeals are not maintainable. He further submitted that admittedly the suits were barred by limitation and therefore exemption under section 10 of the Limitation Act had been claimed. He vehemently submitted, with regard to Section 10 of the Limitation Act, that the Directors of Company cannot be taken to be trustees. He pointed out the provision of Order VII, Rule 1(e) of CPC and contended that there was nothing in the counter claims to show as to when the cause of action had arisen. According to the learned Counsel, in terms of Article 58 of the Limitation Act, the period of limitation for seeking declaration is three years. He submitted that a perusal of paragraph 6 of the counter claim in suit no. 23/2010 and paragraph 10 of the counter claim in suit no. 24/2010 revealed that the cause of action had arisen on 05/03/2006, but the counterclaim was filed on 17/02/2011. He submitted that the property was not vested in the defendant no. 1. According to him, the question of limitation was not a mixed question of law and fact, in these particular cases. He further submitted that the provision of Order VII, Rule 11 of C.P.C. has nothing to do with the Provisions of Order VIII, Rule 6C of CPC. Learned Counsel relied upon the following judgments :

(i) State Bank of Travancore Vs. Kingston Computers India Private Limited, [(2011)11 SCC 524]

(ii) Bangalore Turf Club Limited Vs. Regional Director, Employees' State Insurance Corporation, [(2009) 15 SCC 33] : [2009 ALL SCR 1474]

(iii) Dale and Carrington INVT. (P) Ltd. Vs. P.K Prathapan and others, [(2005)1 SCC 212]

(iv) Satish and Company Vs. S. R. Traders, [(1997)1 ALT (Cri.)696] : [1997(4) ALL MR (JOURNAL) 58]

(v) Judgment of the High Court of Bombay at Goa, dated 24/06/2010 in W. P. No. 48/2009 (M/s. Fomento Resorts and Hotels Ltd. Vs. Dr. Amilcar Cunha Souza and another)

(vi) V. Narsimha Aiyangar, official Vs. The Official Assignee of Madras, [(1931) 60 M.L.J. 280]

11. Mr. Dessai, learned Senior Counsel, in rejoinder, pointed out that along with the Vakalatnama filed in both the appeals, there is a resolution produced by the defendants which duly authirises said Manuel Paully D'Souza to file the appeals and, therefore, it is false to allege that there is no resolution. He further submitted that the applications filed by the plaintiff for rejection of counter claims did not contain several propositions now advanced by the learned Counsel for the plaintiff. He submitted that the date of cause of action is required to be mentioned for the purpose of knowing whether the suit was within limitation and that such a defect is curable.

12. We have gone through the material on record. We have considered the submissions advanced by the learned Counsel for the parties and we have also considered the judgments relied upon by both the parties.

13. The first question that arises for consideration is whether the appeals are not maintainable for want of resolution empowering Mr. Manuel Paully D,Souza to file the appeals. In the case of "Satish and Co.", [1997(4) ALL MR (JOURNAL) 58] (supra), the complaint under Section 138 of the Negotiable Instruments Act (N. I. Act, for short) was filed by M/s Satish and Company, through its Manager. The High Court of Andhra Pradesh observed that the powers of the Manager are slightly different from that of the Managing Director of a Company. The powers of a Manager may be traced either to his appointment order or to specific authorisation given to him regarding a particular aspect or aspects of the business. It has been held that on the basis of designation that one is Manager, it cannot be inferred that he has all the powers of the firm or a Company or any corporate body, including the power to file the complaint. It has been held that even if the Company is the complainant represented by its Manager, such Manager shall necessarily be an authorised Manager so that the Magistrate can take cognizance of the offence. Insofar as the ratification of the defect or regularisation of the irregular proceedings at a later stage, is concerned, it was held that in terms of section 142 of the N.I. Act, another duly authorised complaint could be filed in time i.e. within one month from the date of cause of action but the letter of authorisation filed after one year cannot be taken as proper ratification of the action initiated, because if it is taken that on the date of the said authorisation letter (filed after one year), a duly constituted complaint is filed, it would be barred by limitation of one month prescribed by Section 142 of the N.I. Act. The above decision is not applicable to the present cases since the present cases are not complaints under Section 138 of the N. I. Act and here the defect, if any, can be ratified. By order dated 24/06/2010, in W.P. No. 48/2009 (supra), the learned Single Judge of this Court (N. A. Britto, J.) has held that in the absence of resolution of the Board of Directors of the petitioner Company in favour of Company Secretary to file the petition, or to sign or verify the same, the petition cannot be entertained. The petition, therefore, was dismissed. The present are not writ petitions, but are First Appeals. Learned Counsel for the plaintiff had not taken any such objection in the main suits, in which the counter claims were signed and verified by the same Shri Manuel Paully D'Souza. An appeal is a continuation of the suit. In the case of "State Bank of Travancore" (supra), 'A' had filed a suit on behalf of the respondent-Company as its authorised signatory against the appellant. However, the respondent had not produced any evidence to prove that 'A' was appointed as Director of the Company or that there was any resolution by Board of Directors of respondent-Company authorising 'A' to file suit against appellant. A letter of authority was issued by 'R', in his capacity as Chief Executive Officer of the Company authorising 'A' and there were resolutions authorising 'R' to operate bank account. It was held that the letter of authority issued by 'R' was nothing but a scrap of paper as no resolution was passed by Board of Directors delegating its powers to 'R' to authorise another person to file suit on behalf of the Company. It was held that the suit was rightly dismissed by trial Court. The above case was decided on merits and the plaint in the above case was not rejected under Order VII, Rule 11 of CPC. In the present appeals, along with Vakalatnama of the Advocate, the defendants have filed before this Court, a certified true copy of the resolution dated 20/04/2011, passed by the Board of Directors of the defendant no. 1 thereby authorising said Shri Manuel Paully D'Souza to appear for and on behalf of the Company before police or other authority or before any Court, criminal or civil, including without limitation, courts of first instance or appellate courts and revisional courts, in order to initiate or prosecute criminal and civil cases (including ancillary, incidental or consequential proceedings) against ex-directors of Far Pavilion Tours and Travels Private limited named therein for offences mentioned therein and also against other known or unknown persons involved in the said offences and in this regard to sign, verify and file criminal complaints, FIRs, claims, plaints, writ petitions, written statements, rejoinders, replications. Vakalatnamas, affidavits, papers and documents as may be necessary, in the name of and on behalf of the Company and generally to do all acts, deeds or things as may be necessary or proper for the purpose mentioned above. A notarised true copy of the letter of authority dated 21/04/2010 given to said Manuel Paully D'Souza by the defendant no. 2 and accepted by him has also been produced. Still, if any irregularity is there, then the same can be rectified. Hence, it would not be proper to say that the appeals are not maintainable for want of resolution of authorisation.

14. The next point for determination is whether the counter claims were liable to be rejected under Rule 11 of order VII of CPC, as time barred.

15. Order VII Rule 11 of C.P.C. provides for the cases in which the plaint shall be rejected. As per clause (a) of said Rule 11, the plaint shall be rejected where it does not disclose the cause of action and as per clause (d) thereof the plaint shall be rejected where the suit appears from the statement in the plaint to be barred by any law. It should be kept in mind that the power to reject the plaint should be exercised in exceptional circumstances and the Court cannot take into account any material beyond the plaint. In the case of "T. Arivandandam V/s T. V. Satyapal and Anr.", reported in (1997) 4 SCC 467, the Apex Court has held that if on a meaningful, not formal, reading of the plaint it is manifestly vexatious and merit less, in the sense of not disclosing a clear right to sue, the Court should exercise its power under Order VII Rule 11 of the Code taking care to see that the ground mentioned therein is fulfilled. In the case of "M/s. Crescent Petroleum Ltd. Vs. 'MONCHEGORSK' and another" reported in AIR 2000 Bombay 161 : [2000(3) ALL MR 714], this Court has held thus:-

"It is settled law that the plaint can be rejected as disclosing no cause of action if the Court finds that it is plain and obvious that the case put forward is unarguable. The phrase "does not disclose a cause of action" has to be very narrowly construed. Rejection of the plaint at the threshold entails very serious consequences for the plaintiff. This power has, therefore, to be used in exceptional circumstances. The court has to be absolutely sure that on a meaningful reading of the plaint it does not make out any case. The plaint can only be rejected where it does not disclose a cause of action or where the suit appears from the statements made in the plaint to be barred by any provision of the law. While exercising the power of rejecting the plaint, the Court has to act with utmost caution. This power ought to be used only when the Court is absolutely sure that the plaintiff does not have an arguable case at all. The exercise of this power though rising in civil procedure, can be said to belong to the realm of criminal jurisprudence and any benefit of the doubt must go to the plaintiff, whose plaint is to be branded as an abuse of the process of the Court. This jurisdiction ought to be very sparingly exercised and only in very exceptional cases. The exercise of this power would not be justified merely because the story told in the pleadings was highly improbable or which may be difficult to believe."

16. It is true that in terms of Order VII, Rule 1(e), the plaint should mention the date of cause of action. The object of Order VII Ruler 1 and the intention behind requirement of the particulars mentioned thereunder is to present a full picture with sufficient details of the cause of action so as to make the opposite party understand the case. The necessity to state specifically as to when the cause of action arose is for the purpose of enabling the Court or the opposite party to ascertain as to whether the suit is or is not barred by limitation. However, this is procedural. The defect, if at all, is there can be rectified by an amendment. In the present case, the defendants have pleaded that the cause of action for the counter claim is covered by Section 10 of the Limitation Act and, therefore, the reliefs are not barred by time.

17. In paragraphs 24 and 28 of the counter claim, respectively in Special Civil Suits No. 23/2010 and 24/2010, the defendant no. 1 has, inter alia, pleaded as under :

"It is apparent from the above stated facts and circumstances that the Plaintiff in furtherance and in pursuance of his dishonest intention and design to cause wrongful loss to Defendant No. 1 and unlawful gain to himself acquired the suit property using the funds of Defendant No. 1 in his individual name. Thereafter, the Plaintiff adopted the device of entering into a Lease Deed with Defendant No. 1 in respect of the suit property, the lease rental for the first year being identical to the equated monthly installment payable in respect of the bank loan (which was well in excess of the balance consideration) taken by the Plaintiff. It is submitted that the funds of Defendant No. 1 were employed and the Lease Deed entered into without any resolution having been passed in this behalf by the Board of Directors of Defendant No. 1. It is submitted that in doing so, the Plaintiff acted in breach of his fiduciary duty as a Director of Defendant No. 1. As such, the Plaintiff in law holds the suit property in trust for Defendant No. 1. It is respectfully submitted that Defendant No. 1 is entitled to a declaration from this Hon'ble Court that the suit property is held in trust by the Plaintiff on behalf of Defendant No. 1. Defendant No. 1 is also entitled to a Judgment and Decree directing the Plaintiff to transfer the suit property in favour of Defendant No. 1 and to do all acts, deeds and things as may be necessary to perfect Defendants No. 1's title to the suit property.

18. Further in paragraphs 28 and 32 of the counter claim, respectively in the said Special Suits No. 23/2010 and 24/2010, the defendant no. 1 has pleaded as under :

"Defendant No. 1 states that the Plaintiff was the director of Defendant No. 1 and as such Director in control and in charge of the funds of Defendant No. 1 for the purpose of carrying the business of Defendant No. 1. The Plaintiff was thus acting in a fiduciary capacity and was bound to protect the interest of Defendant No. 1. The Plaintiff during his Directorship mis-appropriated and/or siphoned off the funds of Defendant No. 1 for the acquisition of the suit property, for payment of alleged lease rentals to the Bank by way of equated monthly installments and for personal use and thereby gained pecuniary advantages and entered into dealings which were in his own interests whilst being adverse to the interests of Defendant No. 1. The Plaintiff is thus bound to hold the suit property and the monies for the benefit of Defendant No. 1. Defendant No. 1 is thus the true owner of the suit property. A portion of the amounts so defalcated have been converted into the suit property as aforesaid. The Plaintiff being in a fiduciary position, is liable to account to Defendant No. 1 for the suit property and for the amounts siphoned off and hold the same in trust for the plaintiff. It is submitted that the cause of action for the present suit is covered by the provisions of Section 10 of the Limitation Act, 1963. The reliefs sought herein are therefore not barred by time.

19. Section 10 of the Indian Limitation Act provides as under :

"10. Suits against trustees and their representatives.- Notwithstanding anything contained in the foregoing provisions of this Act, no suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof, or for on account of such property or proceeds, shall be barred by any length of time.

Explanation.-For the purposes of this section any property comprised in a Hindu, Muslim or Buddhist religious or charitable endowment shall be deemed to be property vested in trust for a specific purpose and the manager of the property shall be deemed to be the trustee thereof."

20. Thus, the property has to be vested in a person in trust for any specific purpose. The Section does not state that such trust should be as defined in the Indian Trust Act. In the present cases, the defendant no. 1 is not a trust but a company and the plaintiff was one of the Directors of the defendant no. 1. There was a specific pleading in the counter claims that the plaintiff was holding the suit property and the monies for the benefit of and in trust for the defendant no. 1. In the case of "Nanalal Zaver" (supra), the Hon'ble Supreme Court has held that it is well established that the Directors of Company are in a fiduciary position vis-a-vis the Company and must exercise their power for the benefit of the Company. It is observed that if the power to issue further shares is exercised by the Directors not for the benefit of the Company, but simply and solely for their personal aggrandisement and to the detriment of the Company, the Court shall interfere and prevent the Directors from doing so. It has been held that the very basis of the Court's interference in such a case is the existence of relationship of a trustee and of cestui que trust as between the Directors and Company. In the case of "Wali Mohammed (dead) by LRs", [1999(2) ALL MR 453 (S.C.)] (supra), in the Wakf property comprising of graveyard and tombs, father of the respondent had permitted to construct a house in the graveyard for performing Fateha at the tombs and providing hukka tobacco to Fakirs gathering thereat. Subsequently, father of the respondent donated the said house to the respondent. Mutawalli of the graveyard and tombs had sued the respondent for recovery of the possession of the said house. The Apex Court held that in view of the explanation to Section 10 of the Limitation Act, the respondent's father, who was managing the property, has to be "deemed" to be a trustee in whom the properties vested specifically and in as much as respondent was a Company and was not a transferee for valuable consideration. It was held that Section 10 of the Limitation Act applied and possession could be recovered from the defendant without any limitation as to time.

21. Mr. Lawande, learned Counsel for the plaintiff has not disputed the position that if the Directors are trustees, then Section 10 is applicable. According to him, however, the Directors of a Company can never be termed as trustees within the meaning of Section 10 of the Limitation Act. Learned Counsel submitted that the Judgment in the case of "Nanalal Zaver" (supra), cannot be applied to the present case. He submitted that in the case of "Nanalal Zaver" (supra), the position of Directors was considered with regard to the provision of Section 105-C of the Indian Companies Act whereas in the present case the position of the Directors with regard to Section 10 of the Limitation Act is in question. In the case of "Bangalore Turf Club Limited", [2009 ALL SCR 1474] (supra), relied upon by the learned Counsel for the plaintiff, in this regard, the Apex Court has held thus :

"7. Under various labour laws different definitions have been given to the words "industry" or "factory", etc. and we cannot apply the definition in one Act to that in another Act (unless the statute specifically says so). It is only where the language used in the definition is in pari materia that this may be possible. Hence, we are of the opinion that the decision of this Court in .Hyderabad Race Club should be reconsidered by a larger Bench. In the meantime, the respondents shall not raise any demand against the appellant- Club."

22. In the case of "V. Narsimha Aiyangar, official" (supra), one of the questions was whether the Directors of Companies under the Indian Companies Act are trustees for the purpose of Section 10 of the Limitation Act. It has been held that it is now well settled that the Directors of Company are not trustees, but they are no doubt trustees of assets which have come into their hands or which are under their control, but they are not trustees of a debt due to the Company. It has been further held that generally speaking, a person, who is not the appointed trustee and whom it is sought to affect with a trust by reason of his conduct is not a trustee at all although he may be liable as if he were, which is commonly expressed by saying that he is not an express but constructive trustee.

23. The Judgment in the case of "Bangalore Turf Club Limited", [2009 ALL SCR 1474] (supra), in our view is not applicable to the present cases, since there is no question of any definition of any words involved here. The interpretation of the expression "director of Company" is involved here. Considering the above judgments, more particularly, the Judgment in the case of "Wali Mohammed (dead) by LRs", [1999(2) ALL MR 453 (S.C.)] (supra) and in the case of "V. Narsimha Aiyangar, official" (supra), we are of the view that the trial Court will have to determine whether the defendants were constructive trustees. It is not possible to say at this stage that the defendant no. 1 does not have an arguable case at all. In paragraph 22 of the counter claim, the defendant no. 1 has specifically pleaded that the plaintiff in law holds the suit property in trust for the defendant no. 1 and has prayed for declaration that the suit property is held in trust by the plaintiff on behalf of the defendant no. 1. The defendant no. 1 has also specifically pleaded in the counter claims that the cause of action for the suit is covered by the provisions of Section 10 of the Limitation Act and the reliefs, therefore, are not barred by limitation. The defendant no. 1 in the counter claims has pleaded for a direction that the plaintiff holds the suit property, more particularly described in schedule, in trust for the defendant no. 1 and it has prayed for a direction to the plaintiff to execute a conveyance in respect of the suit property in favour of the defendant no. 1 and to do all acts, deeds and things that may be necessary to perfect the defendant no. 1's title in respect of the suit property. The Court cannot take into account any material beyond the counter claims. In view of the above, the counter claims, at this stage, do not appear to be barred by any law from the statements made therein. The learned trial Court held that Section 10 of the Limitation Act is not applicable to the case. The trial Court ought to have directed the plaintiff to file written statement to the counter claims and to take all the objections and ought to have framed the issues and if necessary could have directed that the question of limitation ought to be decided as a preliminary issue. In our view, the learned trial Court has committed error in rejecting the counter claims, at this stage only.

24. we are, therefore, of the considered view that the impugned order of rejection of the counter claims is not sustainable and, therefore, deserves to be dismissed. The point of application of Section 10 of the Limitation Act and the point whether the counter claims are barred by limitation, ought to be decided after framing of the issues and leading evidence on the said points. Hence, we pass the following :

ORDER

The appeal is allowed.

(a) The impugned order is quashed and set aside.

(b) The counter claims filed by the defendant no. 1 are restored to the file of the trial Court.

(c) The trial Court shall decide the question of limitation or exclusion of limitation under Section 10 of the Limitation Act on merits. If necessary, the trial Court may consider if the said issue should be decided as a preliminary issue.

(d) The trial court shall not be influenced by any of the observations made above by this Court. All contentions are left open.

25. Appeals stand disposed of accordingly.

Appeal allowed.