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IN THE HIGH COURT OF DELHI
Prathiba M. Singh, J.
Lars Villing - Appellant
Versus
Anil Kanodia - Respondent
C.R.P. 29 of 2021 & CM Appl. 10391 of 2021
Decided On : 01-09-2021
A defendant cannot be dismissed from a suit based on claims of limited capacity without evidence to determine their proper status in contractual disputes, as established by prior engagement and documentation.
Headnote:(A) Civil Procedure Code, 1908 - Order VII Rule 11 and Order I Rule 10 - Revision petition challenging dismissal of application for deletion from array of parties - Plaintiff alleging defendant's involvement in negotiations and potential fraud - Court held defendant a proper party despite claims of only being an employee of defendant company; evidence on this issue required for final determination. (Paras 4, 11-13, 10-14)
Facts of the case:
Plaintiffs filed suit against several defendants for recovery of money and alleged fraud involving a commercial arrangement; defendant Villing was claimed to be actively involved.
Findings of Court:
Court acknowledged the need for evidence to establish defendant's proper party status and ordered trial court to adjudicate this issue.
Issues: Whether defendant Villing was a proper party to the suit and jurisdiction of the court.
Ratio Decidendi: The court determined that evidence must be presented in a trial to ascertain defendant Villing's role and liability as a proper party.
Result: Petition disposed of; trial court instructed to proceed with evidentiary hearings.
JUDGMENT
Prathiba M. Singh, J. (Oral)--This hearing has been done through video conferencing.
2. The present petition has been filed challenging the impugned order dated 24th September, 2020 passed by the ld. District and Sessions Judge, South East District, Saket Courts, New Delhi (hereinafter, "Trial Court") in CS DJ No. 8047/2016. By the impugned order, an application filed by the Petitioner herein/Defendant No. 1 in the suit (hereinafter, "Defendant No.1") under Order VII Rule 11 of the CPC r/w Order I Rule 10 of the CPC has been dismissed.
3. The brief background is that a suit for recovery of money, damages and interests was filed by the Respondents herein/Plaintiffs (hereinafter "Plaintiffs") seeking recovery of a sum of Rs. 33,04,205/- along with interest @ 18% from the Defendants in the suit. The suit has been instituted against three Defendants i.e., Mr. Lars Villing- Defendant No. 1 (Wilhelmshaven, Germany), M/s Alba Metall Nord GmbH - Defendant No. 2 and Mr. Amit Taneja- Defendant No. 3 (Met Globe India Pvt Ltd). The allegation in the suit is that a commercial arrangement was negotiated between the Plaintiffs and the Defendant No. 2, which is a German company, in which the Defendant No. 1- Mr. Villing was an active participant, and there was fraud and embezzlement of funds. The claim of the Plaintiffs in the suit specifically against Mr. Villing is that there is one Proforma Invoice and a Sales Contract, both of which have been placed on record, wherein Mr. Villing is shown as the specific person to whom the same is addressed, on behalf of Defendant No. 2- Company.
4. The Trial Court, vide order dated 24th September 2020, had deleted Defendant No.3 from the suit. However, the application for deletion from the array of parties, filed by Defendant No. 1 - Mr. Villing, has been rejected by the Trial Court, vide the impugned order dated 24th September 2020. The reasoning given by the Trial Court in the impugned order is that Mr. Villing was the person who negotiated the terms of the commercial arrangements with the Plaintiffs. The letter dated 28th September, 2016, that was addressed by the Defendant No. 2 Company to the Court, after service, was also considered by the court to recognise that Mr. Villing is an employee of Defendant No. 2 and had been representing the Defendant No. 2, and its business, in India. The court held that as the Defendant No.2 was negotiating through its employee - Defendant No.1 i.e., Mr. Villing, he would be the proper party to the suit. Accordingly, his application for deletion was rejected. The relevant extracts of the findings of the Trial Court read as under:
"11. In the plaint, the plaintiffs have disclosed the capacity of the defendant No. 1 as being the one, who negotiated the terms of the contract on behalf of the defendant No. 2 with the plaintiffs. It would be pertinent to refer to Letter dated 28.09.2016 that was addressed by the defendant No. 2 to the Court after the service of the suit was effected, wherein it was mentioned that defendant No. 1 Sh. Lars Villing is 100% employee of the defendant No. 2 and handled the export business to India. So, this may be noted for further communication. As per the defendant No. 2 itself, it is the defendant No. 1, its employee who has been representing the defendant No. 2 and was responsible for the conduct of business of the defendant No. 2 in India.
12. Ld. Counsel for the plaintiffs had made a reference to the two proforma invoices which alone are witnesses to the contract between the parties. In one of the proforma invoice, the name of the concerned person is Sh. Lars Villing, while in the other it is Sh. Anke Frieda Bahring. Moreover, these proforma invoices have been issued on and on behalf of the defendant No.2.
13. The defendant No. 2 was negotiating through its employee defendant No. 1 and though it would not make defendant No. 1 liable in the personal capacity but he is definitely a proper party as defendant No. 2 was being rep
