THE HIGH COURT OF DELHI AT NEW DELHI

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Judgment delivered on: 23.10.2007

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IA No.8275/2003 & IA No.8670/2003 in CS(OS) 675/1999

M/S BANK KREISS AG

... Plaintiff

- versus -

MR ASHOK K. CHAUHAN & ORS.

... Defendants

Advocates who appeared in this case:-

For the Plaintiff

: Mr R. K. Anand, Sr. Advocate with Ms Shivani Lal,

Mr S. B. Sharma and Mr Vishv Nidhi

For the Defendant No.1

: Mr Valmiki Mehta, Sr. Advocate with Mr Vinay Garg

For the Defendant Nos.2-13: Mr Arun Mohan, Sr. Advocate with Mr Rajesh Yadav and

Mr A. P. Singh

CORAM:-

HON'BLE MR JUSTICE BADAR DURREZ AHMED

1.

Whether Reporters of local papers may be allowed

to see the judgment ?

YES

2.

To be referred to the Reporter or not ?

YES

3.

Whether the judgment should be reported in Digest ?

YES

BADAR DURREZ AHMED, J

1.

Three interesting questions arise for consideration in these

applications. They are:-

(1) Whether a merging company, upon merger with

another company and thereby ceasing to exist as an

independent entity, could be construed as having

“died” upon such merger in the context of Order 22 of

the Code of Civil Procedure, 1908?

2007:DHC:1309

(2) If yes, would a suit filed by the transferor company

abate in case no application for bringing its legal

representatives on record is filed within the stipulated

time in view of the provisions of Order 22 Rule 3 of the

Code of Civil Procedure, 1908?

(3)

Whether the transferee company, after the merger

referred to above, would be entitled to file an

application under Order 22 Rule 10 of the Code of

Civil Procedure, 1908 and seek substitution in place of

of the transferor company as a plaintiff in a suit?

The Facts:

2. The facts which give rise to these questions are few. The

present suit was filed by Bank Kreiss AG, a company incorporated in

Germany. The suit was filed on 02.03.1999. During the pendency of

the suit Bank Kreiss AG merged with and into Yapi Kredi Bank AG.

The merger deed was executed on 27.08.2001 and became effective on

09.10.2001. By virtue of the merger Yapi Kredi Bank AG took over all

the assets and liabilities of Bank Kreiss AG and as such on and from

09.10.2001, the plaintiff ( Bank Kreiss AG) ceased to exist. On

08.08.2003, the defendant No.4 filed the application (IA 8275/2003) for

dismissal of the suit on account of the non-existence of the plaintiff. All

the other defendants support this application. They submit that as the

2007:DHC:1309

plaintiff ceased to exist on 09.10.2001 and no application under Order 22

Rule 3 of the Code of Civil Procedure, 1908 (hereinafter referred to as

'the CPC') was made, the suit has abated. More specifically they state

and submit that on 09.10.2001 the plaintiff ( Bank Kreiss AG) ceased to

exist as an independent entity. This meant that the plaintiff died.

Consequently, an application ought to have been made for substituting

the legal representatives of the “deceased” plaintiff within the time

stipulated. The period prescribed under Article 120 in the Schedule to

the Limitation Act, 1963 to have the legal representative of a deceased

plaintiff made as a party, is 90 days from the date of death of the

plaintiff. Therefore, an application for making the legal representative of

the plaintiff a party could have been filed within 90 days of 09.10.2001,

that is, by 07.01.2002. No such application has been filed in the present

case and, therefore, according to the defendants the suit abated on

07.01.2002 and an order of formal dismissal of the suit as having abated

needs to be passed.

3. After the said application (IA 8275/2003) was filed on behalf

of the defendant No.4, Yapi Kredi Bank AG filed an application (IA

8670/2003) for substitution under Order 22 Rule 10 for leave of the

Court to continue the suit in its name. This application was filed on

2007:DHC:1309

11.08.2003 after the a