Limitation is a mixed question of fact and law, requiring evidence for determination; dismissal under Order VII Rule 11 CPC cannot occur without proper pleadings.

JUDGMENT :

(PRANAV TRIVEDI, J.)

1. By way of the present writ petition, the petitioner seeks to invoke the extra-ordinary jurisdiction of this Court under Article 227 of the Constitution of India read with Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as ‘the Code’) and further seeks to challenge the order dated 29.6.2024 passed by the Presiding Officer, Commercial Court and Principal Senior Civil Judge, Vadodara (hereinafter referred to as ‘the Commercial Court’) below Exh-59 in Commercial Civil Suit No. 5 of 2020, whereby the application of the present petitioner under Order VII Rule 11 of the Code came to be rejected.

2. The brief facts giving rise to the filing of the present writ petition is that the present petitioner is the original defendant No.1 in Commercial Civil Suit No. 5 of 2020 filed before the learned Commercial Court. The Commercial Civil Suit was instituted by the plaintiff- respondent No.1 (hereinafter referred to as ‘the respondent’) praying for a decree of recovery to the tune of Rs.1,69,41,044.49 jointly and severally against the present petitioner and other defendants of the Suit. Further prayer was also made for the interest on the amount of recovery. It was the case of the petitioner that the respondent while instituting the commercial suit, had clearly stated that the cause of action for filing of the suit arose on 5.6.2015. However, the suit was instituted in the year 2020, which came to be numbered as Commercial Civil Suit No. 5 of 2020.

3. Along with the written statement filed on 28.3.2022, the petitioner has also filed an application under the provisions of Order VII Rule 11 of the Code below Exh-59 praying for rejection of the plaint. The contention raised by the petitioner was that the respondent-original plaintiff had instituted a suit which was clearly barred by period of limitation, more particularly Article 18 of the Limitation Act, 1963 and, therefore, the plaint was deserved to be rejected under Order VII Rule 11(d) of the Code. It was also the case of the petitioner that there was no cause of action to institute the suit at the relevant point of time and, therefore, the plaint deserves to be rejected under the provisions of Order VII Rule 11(a) of the Code as well.

4. The respondent in its reply Exh-64 raised the contention that the first cause of action arose for filing of the suit on 5.6.2015 when the respondent- original plaintiff was assigned the work at various sites which was carried out and thereafter bills were raised on 15.6.2015. The further cause of action arose on 1.10.2015 when the plaintiff had completed the work and sent the bill to the petitioner-original defendant. Thereafter, cause of action arose on 16.7.2015 when the defendant had submitted Tax Deduction at Source (TDS) deposit challans and mentioned that they had paid total amount of Rs.61,39,582/- and deducted tax deduction at source of Rs.61,397/- for the transaction. Further, the cause of action also arose on 1.7.2017 when the respondent –original plaintiff came to know about the fraud perpetrated by the defendant by reverting the Tax Deduction at Source credit actually shown and which was connected with payment obligation of Rs.61,39,582/-, shown as amount paid/ credited to the plaintiff towards part payment.

5. Therefore, according to respondent-original plaintiff, it was the case of continuing cause of action due to accounting and tax fraud committed on the part of the respondent and the plaintiff had no occasion to know about the actual effect of the fraudulent accounting till it came into light on 1.7.2017 by way of intimation under Section 154 of the Income Tax Act. The respondent- original plaintiff, thus, contended that the cause of action finally arose on 1.7.2017 and the suit was instituted on 27.1.2020, which was well within the period of limitation.

6. Pursuant to the arguments canvassed by both the parties and taking into consideration the contention raised by both the parti