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IN THE HIGH COURT OF JUDICATURE AT MADRAS
K. RAVICHANDRABAABU, J.
Sarala Vasu & Others - Petitioners
Versus
M/s. Belair Corporation Private Limited, (Formerly known as M/s. Belair Enterprises Private Limited), Represented by its Managing Director Aravind Srinivasan & Others - Respondents
Application Nos. 2371 & 2372 of 2013 in C.S.No. 224 of 2012
Decided On : 01-07-2015
Companies Act, 1956 – Sections 433 and 434 – Suit for recovery – Jurisdiction – Both these applications for rejection of the plaint, are independently filed by the first and second defendants in the suit. The first defendant is the husband and the second defendant is the wife of the first defendant. – The first respondent in both the applications, is the plaintiff, who filed the above suit for recovery of a sum of Rs.2,74,60,403/- together with interest on Rs.1,98,23,969/- at the contract rate i.e. at 12% per annum or at a rate to be fixed by the Court from the date of plaint till the date of realisation. – Held, Counsel appearing for the applicants/defendants, again in support of the contention that the endorsement (acknowledgement) made by the applicants/defendants cannot be construed as the acknowledgement of liability. In that case, the question before the Bombay High Court was as to whether the issuance of Form-C under the Companies Act, 1956, was an acknowledgement of liability. – Further, a perusal of the said decision shows that the said issue was raised in a petition filed under Sections 433 and 434 of the Companies Act, 1956 for winding up of the respondent-Company therein. – It has been held therein that an inference cannot be drawn that execution and issuance of Form-C by the purchaser impliedly reflects on the question of payment of purchaser to the seller in respect of the transactions referred to therein, even though the said Form-C is issued. – Facts and circumstances of the above said case are totally different and distinguishable to the case on hand, more particularly, on the fact that the acknowledgement under dispute was made admittedly by the first defendant herein on the accounts furnished by the plaintiff-Company, and therefore, this Court, at this stage, cannot conclude that such endorsement/acknowledgement is not an acknowledgement of liability. – Counsel appearing for the first respondent/plaintiff relied on the decision of the Supreme Court reported in 2014 (2) CTC 199 (SC) (Surjit Kaur Gill Vs. Adarsh Kaur Gill), wherein, the Apex Court observed that the issue of limitation is always a mixed question of fact and law, and therefore, it could not be a ground for rejection of the plaint. – Court is of the view that the plaint cannot be rejected on the ground raised by the applicants/defendants, in view of the fact that such issue of limitation being a mixed question of law and fact, has to be gone into and decided only after conducting the trial. – Applications Dismissed
Both these applications for rejection of the plaint, are independently filed by the first and second defendants in the suit. The first defendant is the husband and the second defendant is the wife of the first defendant. The first respondent in both the applications, is the plaintiff, who filed the above suit for recovery of a sum of Rs.2,74,60,403/- together with interest on Rs.1,98,23,969/- at the contract rate i.e. at 12% per annum or at a rate to be fixed by the Court from the date of plaint till the date of realisation.
2. The case of the plaintiff, in short, is as follows:
The defendants are the husband and wife, forming part of one unit and are carrying on the business of buying shares, for which purpose, they executed loan agreements on 07.04.2004 and 01.12.2004 in favour of the plaintiff for funding the defendants to enable them to purchase the shares in their favour and for their benefits. The loan amount is repayable in full on demand at the plaintiff's absolute discretion. The transaction took place from 2004 to 2008, which is evident from the bank statement of the defendants. On 25.10.2008, the amount due by the defendants to the plaintiff was confirmed in writing. The amount due as on 31.08.2011 works out to Rs.2,48,39,019/- insofar as the second defendant is concerned. The amount due by the first defendant to the plaintiff as on 31.08.2011 works out to be Rs.26,21,384/-. Thus, the suit is filed for a total sum of Rs.2,74,60,403/- with interest as stated above.
3. The defendants have filed the above applications for rejection of the plaint on the grounds that the suit is barred by limitation, that there is mis-joinder of cause of action in filing the suit, and that the jurisdiction to file the present suit is vested exclusively before the Court at Mumbai.
4. Though these applications are filed raising the above said grounds, Mr.A.K.Mylsamy, learned counsel appearing for the applicants/defendants submitted that the applicants are confining the applications only on the ground of limitation and they are giving up and not pressing the other two grounds. By contending so, learned counsel appearing for the applicants/defendants made his submissions as follows:
(a) Admittedly, the first respondent/plaintiff claimed that the transactions were made between 2004 and 2008, whereas the suit came be filed only on 27.09.2011, mainly placing reliance on the so-called acknowledgement of liability given by the first defendant on 25.10.2008. Such acknowledgement was only conditional acknowledgement, as the first defendant has signed on 25.10.2008 by specifically stating, "subject to verification and confirmation". Such being the conditional acknowledgement, in the absence of further confirmation by the defendants, such acknowledgement cannot be construed as an acknowledgement of liability within the meaning of Section 18 of the Limitation Act.
(b) The last transaction between the parties took place on 25.7.2008, by which the plaintiff made the payment to the defendants, each, a sum of Rs.20 lakhs. Thereafter, no transaction had taken place. Therefore, the suit filed before this Court on 27.09.2011 is barred by limitation.
In support of the above submissions, he relied on the following decisions:
(i) 1906 (8) Bom.L.R. 501 = (Bombay High Court) (Maniram Vs. Seth Rupchand);
(ii) 1919 (37) MLJ 353 = (Madras High Court) (Narayanaswamy Mudali Vs. Gangadhara Mudali and another);
(iii) AIR 1921 Madras 464 = 1921 (14) LW 148 = 1921 (41) MLJ 217 = 1921 MWN 475 (Madras High Court) (Subbarama Aiyar Vs. A.P.T.Veerabadra Pillai), and
(iv) 2006 (70) SCL 52 (Bom) (Bombay High Court) (In Re: Reunion Electrical Mfrs. (P) Ltd).
5. Per contra, Mr.V.Prakash, learned Senior Counsel appearing for the first respondent/plaintiff contended as follows:
(a) The question of limitation is a mixed question of law and fact, and therefore, the plaint cannot be rejected merely based on the contention of the defendants that the suit is barred by limitation. What is
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