The main legal point established in the judgment is that the question of limitation is a mixed question of fact and law, and the plaint cannot be summarily rejected based on the cause of action and limitation in the context of a breach of trust alleged by the plaintiffs.

R. Subbiah, J.

This appeal is preferred against the order of a learned single Judge of this Court dated 10.03.2008 in an application filed by the appellant herein under Order VII Rule 11 of C.P.C.for rejecting the plaint filed by the respondents herein on two grounds, namely, (i) the claim as disclosed in the plaint is hopelessly barred by limitation; and (ii) there is no cause of action at all to file a suit against the defendants.

2. The facts, which led to file the application under Order VII Rule 11 of C.P.C., are as follows:

The appellant herein is the 1st defendant in the suit. The 1st respondent/1st plaintiff is a Private Limited Company and the 2nd respondent/2nd plaintiff is one of the shareholders of the 1st plaintiff company. Defendants 1 to 5 in the suit are related companies promoted by one Mr. G.Venkateswaran. The said G.Venkateswaran was also one of the Directors of the 1st Plaintiff company for some time during the period from 1987 to 1990. Defendants 1 to 5, along with another related entity, possessed 7, 80,000 shares in M/s.Shaw Wallace Company Limited. The said shares were seized by the Commissioner of Income Tax in a raid conducted by the Income Tax Department in the premises of G.Venkateswaran and his group of companies. Hence, the said Venkateswaran approached the Directors of the 1st plaintiff company, stating that defendants 1 to 5 were the lawful owners of 7, 80,000 shares of Shaw Wallace Company, which were seized by the Income Tax Department and the Income Tax Department would sell these seized shares by coercive process unless income tax due of Rs.380 lakhs was paid by 30.11.1987. Further, the said Venkateswaran informed the plaintiffs/respondents that such sale by the Income Tax Department would result only in fire sale value being realised and hence, he requested the plaintiffs to buy these shares at Rs.85/- per share totaling to Rs.663 lakhs approximately. The 1st Plaintiff and G.Venkateswaran for himself and on behalf of his group of companies, namely, defendants 1 to 5, discussed the issue and finally it was agreed by the 1st plaintiff that a sum of Rs.380 lakhs would be paid for the specific purpose of discharging the claim of the Income Tax Department made against them, so that the said shares might become freehold and capable of being transferred to the 1st plaintiff thereafter. Accordingly, the plaintiffs and the said Venkateswaran entered into an agreement for sale of shares on 011. 1987, under which 7,80,000 shares of Shaw Wallace Company Limited, which were in the seisin of the Income Tax Department, were agreed to be purchased by the 1st plaintiff for a total consideration of Rs.663 lakhs. Pursuant to the agreement, the 2nd plaintiff/2nd respondent arranged for funds and paid the amount on 30.l1.1987 by way of pay order in favour of the income tax department for the release of 7, 80,000 Shaw Wallace shares from the custody of the Income Tax Department for the purpose of proceeding with the transfer of the said shares in favour of the plaintiffs. After the payment of the said amount only, the plaintiffs came to know that the said Venkateswaran and his group of companies were lawful owners of only 1, 74,399 shares, but not of the entire 7, 80,000 shares as represented by G.Venkateswaran originally. Hence, the grievance of the respondents/ plaintiffs is that the money entrusted with defendants 1 to 5 and the said G.Venkateswaran were not applied for the purpose for which they were entrusted, namely, release of the entire 7,80,000 shares but only 1,74,399 shares were released. Therefore, there was a breach of trust committed by G.Venkateswaran and his group of companies. Subsequently when G.Venkateswaran was contacted on 16.09.1989, the parties made an approximate to draw up an account for the breach of trust committed by defendants 1 to 5 and Mr.G.Venkateswaran and a sum of Rs.1, 800 lakhs was arrived at as a sum payable to the 1st plaintiff. However, neither G.Venkateswaran no