In the present case, the state of pleadings in the suit being what it is, the
court cannot agree with the defendant‟s contention that the action is time barred.
May be, in regard to some claims, the suit could be time barred; however, the
court cannot, at this pre-trial stage, undertake a detailed scrutiny. Another cardinal
rule which guides courts is that the plaint cannot be rejected in part, if it contains
multiple causes of action. Assuming that claims to some causes might be barred,
the existence of others which may be established at the trial stage should impel
the court to tread softly. For these reasons, the plea of limitation cannot be
accepted.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Pronounced on : 23.10.2008
ANIL RAI Vs VINAY RAI
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
S.RAVINDRA BHAT, J.
This order will dispose of IA No. 4533/2006 preferred under Order 7 Rule 11 of
the Code of Civil Procedure, 1908, for rejection of the plaint. The brief facts necessary
for the present purposes are as follows.
2.
The plaintiff is a member of the Rai family, comprising his father, mother, two
sisters and the defendant, his brother. The plaintiff avers that in January 2000 disputes
arose between him and the defendant, after which due to intervention of family members,
the parties orally entered into a family arrangement on 7th February 2000. However, on
19.03.2000 the parties agreed to modifications in the terms of settlement, which was
reduced to writing in the form of „Rai Family Agreement‟. The details of the family
arrangement, and steps taken by the parties, to effectuate it, are as follows, according to
the plaintiff:
RAI FAMILY AGREEMENT
STEPS IN IMPLEMENTATION
1. Anil Rai will get Usha Drager, Usha 1.
Usha
Group
Company
transferred
Amorphous, IILM, and Rai School as his 32,24,800 shares by it in Usha Dranger (P)
personal property, which he may keep, for Ltd. to RKKR Infotech (P) Ltd., a company
either himself or gift to the daughters or controlled by the Plaintiff‟s family on 29th
anybody else except to any one of Varun, January, 2001.
Amit or Anand in which case it will be
equally shared between the three.
2.
Usha Group Company transferred
34,90,000 shares held by it in Usha
Amorphous Metals Ltd. to RKKR Infotech
(P)
Ltd.
on
29.01.2001,
a
company
controlled by the Plaintiff‟s family.
3.
IILM and Rai School have also
continued to remain under the control of the
Plaintiff‟s family.
2. Properties worth Rs. 25 crores will be Properties worth Rs. 25 Crore were
put in a trust to be managed by Anil transferred to the Plaintiff‟s family by the
Rai/Malvika Rai with Aarti and Ahladini Defendant (as confirmed by his hand
as the beneficiaries. This again either may written note of Feb., 2002) as under:
go to them at the time of their marriage or
be kept under trust as security for them for (i) Pappankala Chawla property consisting
life. However, in case it goes to Varun, of land is owned by four Companies,
Amit or Anand it will be shared equally namely, M/s Dimsy Food and Chemicals
among them.
Pvt. Ltd. Dwarka Properties Pvt. Ltd. Delhi
Cylinder and Tranding Pvt. Ltd. and Venue
Video Pvt. Ltd. Shares of these companies
were
subscribed/transferred
between
November 2002 and February 2004 by/and
in favour of the entities of the Plaintiff‟s
family.
(ii)
The Gurgaon property consisting of
land owned by M/s. Usha Cooperative
House Building Society Ltd.
After the
family settlement in March 2000, members
of the Society belonging to Usha Group had
resigned and employees of IILM Group had
taken
over
the
membership
and
management of the Society. This is clearly
evident from the minutes of the general
body meeting of the Society held on
17.12.2001 whereby elections of the new
managing committee had been conducted
under the supervision of Dr. M.C. Gupta of
Usha Group and new managing committee
was elected from the then members.
(iii) Possession of Plot No. B-II/56, Mohan
Cooperative Industrial Estate had been
given to the Plaintiff‟s family and is owned
by Burr Brown Communication Pvt. Ltd.
IA 4533/2006 IN CS (OS) 294/2006
Page 3
whose shares were transferred in favour of
the Plaintiff‟s family.
(iv) Possession of Plot No. B-II.91, Mohan
Co-operative Industrial Estate, New Delhi,
has been given to the Plaintiff‟s family.
(v)
Possession of Plot No. B-II.92, has
been given to the Plaintiff‟s family.
Agreement to sell was also executed on
17.10.2001 by RKKR Udyog in favour of
RKKR Infotech (P) Ltd. and General Power
of attorney executed.
(vi)
Possession of Plot No. B-II.93, has
been given to the Plaintiff‟s family.
Agreement to sell was also executed on
16.10.2001 by Usha Spinning & Weaving
Mills Ltd. in favour of RKKR Infotech (P)
Ltd. and General Power of Attorney
executed.
(vii) In case of land and building at Usha
Plaza, M.I. Raod, Jaipur, the same has been
sold under an Agreement to Sell to Ram
Krishan Kulwant Rai Education Society for
which part consideration has been paid, and
the rest of the property has been gifted to
the Society of the Plaintiff‟s family. The
property is having built up area of 2506 sq.
ft. as follows out of which possession of
447 sq. ft. in basement has been handed
over to the society promoted by the
Plaintiff‟s family and area of 1612 sq. ft.
has been occupied by a tenant for which
symbolic possession had also been given to
Society promoted by the Plaintiff‟s family
for which lease was expiring on 16.10.2004
Therefore on expiry of lease the tenant
wrote to the Society of Plaintiff‟s family
vide their letter dated 4th June 2004 (Ref.
No.AO/JPR/006/001) asking for renewal,
which was replied by the society of
Plaintiff‟s family vide its letter dated
26.06.04 stating that the Society intended to
use the premises for its own purposes and
asked for vacation by 16.10.04. The tenant
i.e. UAE Exchange and Financial Services
Ltd. further wrote on 13.07.04 (Ref. No.
UAEFS/2600/Lease-011/04)
stating
that
they were willing to vacate the mezzanine
Floor and agreed to pay for area of 1050 sq.
ft. at enhance rate @ Rs. 28622.50 P.M. In
response to their letter, Society again wrote
on 24.07.04 for not agreeing for renewal.
The tenant aggrieved due to non-renewal
approached. The
Development Company
Usha
Ltd.
Housing
and
in
collusion with it entered into an agreement
and is still continuing to occupy the
premises premises.
Society promoted by
the Plaintiff‟s family has filed a Suit which
is pending in the Addl. District Judge-II,
Civil Court Jaipur in respect of this
property.
(vii)
Similarly, possession of property
located at Usha Niketan, D-76, Ghiya Marg,
bani Park, Flat Nos. 104 to 107, 207, 304 to
307 and 404 at Jaipur having a total area of
11425 sq. ft. has been handed over to the
Society promoted by the Plaintiff‟s family
which was transferred under an Agreement
to sell for which part consideration has been
paid and the balance has been gifted to the
Society promoted by the Plaintiff‟s family.
(ix) Possession of Commercial flat located
in Usha Preet Complex at 138/42, Malviya
Nagar, Bhopal (M.P.) admeasuring 5063 sq.
ft. has been given out of which 2040.78 sq.
ft. is occupied by the Society promoted by
the Plaintiff‟s family and balance area has
been
occupied
by
different
tenants.
Pursuant to family agreement, two of the
five tenants had started paying rent to the
Society promoted by the Plaintiff‟s family
and the other tenants are neither paying to
Plaintiff nor to defendant. Recently the two
tenants namely Inline Medical and Sagar
Infotech have also stopped paying rent to
the Society promoted by the Plaintiff‟s
family, payment has been made for part of
the amount under an Agreement to Sell and
the rest of the balance had been gifted to the
Society promoted by the Plaintiff‟s family.
It is most respectfully submitted that now,
in an attempt to resile out of the above
agreement, the Defendant has sought to
initiate cases of recovery of amounts
against the Society by issuing notices in
July, 2005.
(x)
Flat Nos. 309 and 311 at Ansal
Chamber-1, Bhikaji Cama Place, New
Delhi valued at Rs. 51 lakhs have been sold
under an Agreement to Sell to a Society
promoted by the Plaintiff‟s family and the
entire consideration with respect to the said
flats has been paid.
(xi) Property located at Plot No.20, Sector
11,
Belapur,
Ne
Mumbai
of
which
defendant had identified 25549 sq. ft. built
up area in the building known as Usha
Chambers as the share of Plaintiff family
for which the defendant subsequently billed
to a company of the Plaintiff family
amounting of Rs. 64,16,428/- vide letter
dated 10.01.2004.
Space No.
Floor
Area
38
GF
341
39
GF
368
301 to 311
3rd Floor
9536
407
4th Floor
3826
507
5th Floor
3826
IA 4533/2006 IN CS (OS) 294/2006
Page 7
6th Floor
607
3826
7th Floor
707
3826
25549 sq.ft.
The possession of this property has been
held by the Defendant due to non payment
of the bill by Plaintiff owing to dispute on
the amount raised in the bill by the
Defendant spent for development of the
share of property of the Plaintiff‟s family.
3.
Properties worth 15 crores will be Plot No.1 and 88 MCIE, New Delhi, land at
given to KR (Shri Kulwant Rai) and BR Daulatabad and Chattarpur Farm and a one
(Smt. Bimla Rai) which will be in trust to thousand square yard plot behind Mohan
the five grand children (Varun, Amit, Cooperative
Industrial
Estate
of
Aarti, Anand and Ahladini) equally after approximate values of Rs. 4.75 crores are in
them.
the name of Shri Kulwant Rai and Smt.
Bimla Rai and will be retained by them.
Properties for the balance amount, however
have not been transferred by the defendant
so far.
4. Cash of Rs. 10 crores will be given to The said amounts have not been transferred
both Mr. Kulwant Rai and Mrs. Bimla Rai by the Defendant.
to be spent by them as they like and gifted
by them as they like in the course of their
life and afterwards.
5.
The house will remain 1/3 each To implement this Clause, 42801 shares of
between Mr. Kulwant Rai, the Defendant one of the three co-owner company, namely
and the Plaintiff and after Mr. Kulawant Allied Finance Pvt. Ltd. were transferred in
Rai and Mrs. Bimla Rai it will be 50.50 favour of the family trust of the Plaintiff‟s
between the Plaintiff and the Defendant.
family on 6th October 2001. As regards the
second company, viz., New Peak Real
Estate (P) Ltd., 99% shares were purchased
by M/s Bimla Rai, mother of the parties and
wife of Shri Kulwant Rai, is the sole
beneficiary. Physical custody of the records
of the company is with the Defendant which
is to handed over. Similarly, the property is
being enjoyed by way of three co-tenancies
as mentioned in the clause.
6. Apart from the exclusion made in point Mr. Anand Rai, son of the Plaintiff had not
1,2,3,4,5 above everything else (including joined the business of the company as he
all companies, assets, properties, liabilities, was completing his studies. Now that his
businesses, investments, trusts etc.) will be studies are getting completed in May 2006,
shared 1/3rd each between Varun, Amit he is to join the business as 1/3rd partner as
and Anand as equal partners.
7.
provided in this clause.
VR will be Chairman and CEO of the The Defendant has been incomplete control
Group in the next 7-10 years.
The of the management and affairs of the group
management control of the Group will be business.
with him.
When he retires, Varun will
take over as the next Chairman.
8.
It is agreed that a minimum of Rs. 10 Time for implementation has not come.
crores each will be spent on the weddings However, the Plaintiff‟s family has, in view
of the two girls. A security or pledge of of the conduct of the Defendant trying to
assets for the same amount may be kept if resile out of this agreement, requested him
necessary so that in case one does not pay to create the security/pledge as provided for
that money, then those assets may be sold in the Agreement.
for marriage expenses.
9. Anand as a partner will be a part of the Time for implementation has not arrived as
top management of the Group whenever he Mr. Anand Rai till now was completing his
joins the business.
studies and had not joined as a partner.
However, now that his studies are coming
to an end even this clause needs to be
implemented.
10. AR will be responsible on behalf of the The Plaintiff carried out the functions of PR
Group for Public Relations, liaison with and liaison as requested by the Defendant.
the Government, Politics and Press. He In order to maintain family peace and give a
may also run the electronics division as free hand to the Defendant, the plaintiff did
part of the Group if he so desires. Anil Rai not interfere in the day-to-day functioning
will continue as Co-Chairman as long as of the Group Companies. However, this is
Vinay Rai is Chairman.
not a waiver of this term but only an
attempt to avoid any conflict.
3.
The plaintiff avers that the details would disclose that family arrangement was
partially executed and implemented by both the parties and the have been taking benefits
thereunder. He states that, the defendant has developed malafide intentions and is now
trying to dispute the validity of the arrangement. He states that by notice dated
26.10.2005, the company controlled by the defendant sought to cancel the agreement to
sell executed between the parties in pursuance of the family arrangement and sought
possession of the premises at Bani Park, Jaipur. Further at the instance of the defendant,
some promoter members working for him and who had earlier resigned from the Usha
Co-Operative House Building Society, Gurgaon lodged a complaint on 6.9.2005 in the
office of the Asst. Registrar of Co-Operative Societies, Gurgaon against the present office
bearers of the plaintiff‟s family. Similarly, it is averred that the defendant through the
Group Company is also seeking to challenge share transfers in Usha Drager Pvt. Ltd. and
Usha Amorphous Metals Pvt. Ltd., which were affected in discharge of the obligations
under the agreement. The plaintiff further avers that the due to tensions created by the
defendant in the residential home of the parties and forced his mother and wife to file a
suit before this Court, being CS (OS) No. 1158 of 2005, seeking demarcation of separate
portions for themselves separate from the defendant.
4.
The plaintiff also states that having taken advantage of the said family
arrangement the defendant cannot now to resile from it. The arrangement remains
partially executable, and that he has performed his part of the obligations. It is stated that
the defendant in the aforementioned suit, in his written statement has denied the validity
of the said agreement. The defendants had therein contended that the agreement was a
mere proposal and was just a „wish list‟, and never acted upon. The plaintiff also avers
about the statement before the Settlement Commission under Section 245 of the Income
Tax Act, 1961, wherein he spelt out the manner in which he proposed to perform his
obligation under the arrangement. The plaintiff states that since the family has interests in
various trusts, in which the he and his family members are beneficiaries, the defendants
in order to defeat the rights of the plaintiff under the family arrangement may dispose of
properties. He further states that no accounts have been rendered in relation to properties
and business being nagged by the defendant. Therefore, the plaintiff urges the Court to
pass an order of mandatory injunction directing the parties to give full effect to the family
arrangement of 19.03.2000 and also a permanent injunction restraining the defendant
from creating third party interests in the aforesaid properties or in any manner dealing
with suit properties.
5.
The defendant in his application has taken the following grounds, urging the
rejection of the plaint. At the outset, he denies that document of 19.3.2000 relied by the
plaintiff was only a wish list and was not to be acted upon by the parties. He relies on the
statement made by the plaintiff before the Settlement Commission, where he had
allegedly admitted that the document of 19.3.2000 was only a wish list. It is submitted
that the suit is liable to be dismissed on this ground alone.
6.
It is next submitted that the suit is time barred since it seeks to enforce the so-
called family arrangement dated 19.3.2000 by filing the suit on 14.2.2006. As per Article
54 of the Limitation Act, 1963 the limitation period for filing a suit for specific
performance is three years from the date fixed for performance, or, if no such date is
fixed, when the plaintiff has the notice that the performance is refused. In this regard it is
submitted that, although the arrangement was never to be acted upon, there was no
specific date fixed for the performance. Moreover, as per the admission of the plaintiff
before the Settlement Commission on 10.4.2002, the instrument was a wish list and not to
be acted upon; that, it is submitted served as notice of denial of validity of the instrument.
7.
The defendant further states that the suit has been improperly valued for the
purposes of court fee and jurisdiction and is accordingly liable to be rejected. It is
submitted that the plaintiff has quantified his money claim in the minimum sum of Rs. 65
crores, but has valued the suit for the relief of mandatory injunction for a paltry sum of
Rs. 21 lacs, which goes to show that the suit has been grossly undervalued for the
purpose of court fee.
8.
It is also submitted by the defendant that not leave to file the present suit was
sought in the previous suit CS (OS) No. 1158/2005. Therefore, the suit is also liable to
rejected under Order 7 Rule 11 (d). Additionally, in the prayer the defendant also urges
that suit be rejected on the ground that the beneficiaries of the alleged arrangement have
not been impleaded and that the agreement itself is void as being opposed to pubic policy
under Section 23 of the Indian Contract Act, 1872.
9.
Mr Kailash Vasudev, learned Senior counsel for the plaintiff submitted that the
averments in the plaint and the documents, taken together, point to the suit being time
barred. He contended that the plaintiff was aware that the family settlement upon which
the suit is primarily founded, was executed in the year 2000. The plaintiff became aware
that the defendant was unwilling to take steps towards its implementation, as according to
him, the document was a mere wish list, containing pious hopes which the parties
expected would mature; it did not contain any mutual obligations. This position of the
defendant was made known in communications and e-mails to the plaintiffs, addressed as
early as in the year 2002; the same are part of the record. Therefore, the suit should have
been filed within the period of three years, reckonable from that time. However, the suit
has been filed in February, 2006, and is time barred. Therefore, applying the principle
underlying Order 7, Rule 11, CPC, the court should reject the plaint. Reliance was placed
on the judgments of the Supreme Court, reported as Hardesh Ores (P) Ltd. v. Hede &
Co.,(2007) 5 SCC 614, N.V. Srinivasa Murthy v. Mariyamma, (2005) 5 SCC 548 and T.
Arivandandam v. T.V. Satyapal
1977 (4) SCC 467, for the proposition that clever
drafting of pleadings by a litigant should not obscure the real nature of the action, and the
court should exercise its power to nip patently hopeless or frivolous litigation in the bud,
by exercising its power to reject the plaint, at any stage. In this case, submitted counsel,
the plaint averments, which included the list of documents filed along with the suit,
showed that the alleged cause of action arose as early as in 2002; the suit therefore was
clearly time barred.
10.
It was next contended that the court should also reject the suit for the reason that
parties necessary for an effective adjudication of the disputes have all not been
impleaded. Counsel urged that the plaintiff seeks injunctive relief to effectuate a
settlement and understanding, which involves transfer of shares; the plaintiff has not even
disclosed the defendant‟s extent of shareholding in each company. Besides, the company,
being an independent juristic entity, is a necessary party in whose absence effective and
full adjudication of all disputes is impossible. The suit is, therefore, barred for non-
joinder of necessary parties, and therefore, has to be rejected.
11.
Counsel also submitted that the plaintiff has grossly undervalued the reliefs in the
suit. He relied on the documents, particularly the family settlement, placed on record by
the plaintiff, and contended that a reasonable and fair estimate of the share claimed in the
various assets are substantial, and over Rs. 700 crores. The plaintiff should therefore,
have valued them correctly, instead of valuing the reliefs only having regard to the
pecuniary jurisdiction of the court. The court should not accept the plaintiff‟s valuation,
which is intentionally depressed, to avoid paying proper court fee. Counsel relied on the
decisions reported as .....
12.
It was also urged that this court should reject the plaint, because the plaintiff did
not seek leave of the court to file the second suit, fully knowing that the subject matter of
this suit could have well been incorporated in the previous suit. Not having done so, the
plaintiff cannot now be heard saying that the suit is not barred; applying the principles
embedded in Order II Rule 2, this court should not entertain the present suit.
13.
Mr. Arvind Nigam, learned counsel, on the other hand, submitted that the
application should be rejected. Adverting to the defendant‟s plea of limitation, it was
urged that the suit was filed within the period of time prescribed. Counsel urged that the
parties to the family settlement understood it to be binding, and even acted on it. He
referred to Para 6 of the plaint and submitted that the court, while considering whether a
suit is filed within the period of limitation, has to see all the pleas in the plaint, as well as
the documents filed along with it. In this case, the plaintiff had urged, clearly, that steps
to effectuate the settlement were taken by both parties on various dates; the defendant,
notwithstanding his e-mail communication of 2002, continued to effectuate the settlement
through various acts, either himself, or through others; the categorical repudiation of his
liabilities was expressed in 2005; reckoned from then, the present suit is filed within the
period of limitation.
14.
Counsel relied on decisions reported as Sahu Madho Das v. Mukund Ram, AIR
1955 SC 481 and Kale & Others v. Deputy Director of Consolidation, (1976) 3 SCC 119,
to canvass the proposition that the Courts have generally relied on family arrangements
and enforced them, overlooking trivial and technical objections. He contended, relying
upon these decisions that object of such family arrangements is to protect the family
from long drawn disputes and that unless, fraud is proved, courts should enforce the
family arrangement. Further, courts have enforced family arrangements made honestly,
even though made on the basis of error or mistake of all parties. Counsel further placed
reliance on KK Modi v. KN Modi, (1998) 3 SCC 573, Hari Shankar Singhania v. Gowri
Shankar Singhania, (2006) 4 SCC 658 and Manish Mohan Sharma v. Ram Bahadur
Thakur, (2006) 4 SCC 416, to assert that Court must not lightly interfere with family
settlements, and since these instruments are governed by special equities, they are to be
enforced. Therefore, it is urged that at this stage of demurer, absent a specific plea of
fraud, the Court must not reject the suit on the ground that defendant challenges the
validity or existence of the family arrangement.
15.
Learned counsel appearing on behalf of the defendants submitted that valuation of
the suit is correct. At the stage of filing the suit, the value of the shares in the company
and the various benefits accruing to the plaintiffs were of imprecise value; therefore, the
relief was given notional valuation. It was also urged that the suit was not barred by
reason of Order II Rule 2, since the previous suit was not filed by the plaintiff, but his
other relatives. As regards the objection of not impleading the companies was concerned,
counsel submitted that no relief against the companies has been sought; the plaintiff
merely seeks effectuation of the settlement, which would result in change in the pattern
of the shareholding. That would be ascertained at the stage of evidence.
16.
It is well settled that the court, at the stage of considering an application under
Order 7, Rule 11, has to examine only the plaint averments, and the list of documents
filed along with the suit. Other pleas, advanced by parties, including the pleadings in the
written statement, cannot be considered by the court. The defendant‟s plea about the suit
being time barred, is based on e-mail communications exchanged between the parties. No
doubt, they prima facie indicate that the defendant had expressed his view that the family
settlement (of which the plaintiff seeks implementation by this suit) is a mere “wish list”
and not binding upon him; also, undoubtedly that was expressed in 2002. Yet, the court
cannot be unmindful of express averments in the plaint, particularly various parts of Para
6, to the effect that parties, including defendant, took steps to give effect to the settlement
on various dates, in 2001 and 2004. The court cannot also ignore the dicta of the Supreme
Court, in Kale v. Dy. Director of Consolidation, (1976) 3 SCC 119, where, after noticing
a number of Indian and English authorities on the subject, the court observed as follows:
“The courts have, therefore, leaned in favour of upholding a family
arrangement instead of disturbing the same on technical or trivial
grounds. Where the courts find that the family arrangement suffers from a
legal lacuna or a formal defect the rule of estoppel is pressed into service
and is applied to shut out plea of the person who being a party to family
arrangement seeks to unsettle a settled dispute and claims to revoke the
family arrangement under which he has himself enjoyed some material
benefits.”
It further observed that:
“(1) The family settlement must be a bona fide one so as to resolve
family disputes and rival claims by a fair and equitable division or
allotment of properties between the various members of the family;
(2)
The said settlement must be voluntary and should not be influenced
by fraud, coercion or undue influence;”
This position of law has been reiterated in a series of judgments, the latest one being
Manish Mohan Sharma (supra).
17.
The Supreme Court in Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea
Success (2004) 9 SCC 512, while dealing with the law relating to rejection of plaint under
Order 7 Rule 11 of the Code of Civil Procedure, 1908, observed as follows:
“Whether a plaint discloses a cause of action or not is essentially a question of
fact. But whether it does or does not must be found out from reading the plaint
itself. For the said purpose the averments made in the plaint in their entirety must
be held to be correct. The test is as to whether if the averments made in the plaint
are taken to be correct in their entirety, a decree would be passed.
In ascertaining whether the plaint shows a cause of action, the court is
not required to make an elaborate enquiry into doubtful or complicated
questions of law or fact.
So long as the claim discloses some cause of action or raises some
questions fit to be decided by a judge, the mere fact that the case is weak
and not likely to succeed is no ground for striking it out. The purported
failure of the pleadings to disclose a cause of action is distinct from the
absence of full particulars.”
18.
In the present case, the state of pleadings in the suit being what it is, the
court cannot agree with the defendant‟s contention that the action is time barred.
May be, in regard to some claims, the suit could be time barred; however, the
court cannot, at this pre-trial stage, undertake a detailed scrutiny. Another cardinal
rule which guides courts is that the plaint cannot be rejected in part, if it contains
multiple causes of action. Assuming that claims to some causes might be barred,
the existence of others which may be established at the trial stage should impel
the court to tread softly. For these reasons, the plea of limitation cannot be
accepted.
19.
So far as the contention regarding non-joinder of the companies is
concerned, the court is inclined to agree with the plaintiff‟s contentions. The test
to determine whether a party is necessary or proper is whether effectual
adjudication is impossible in its or their absence. Here, the absence of the
companies would not hinder the trial; no relief has been claimed against anyone
of them. At this stage, it appears that the plaintiff is merely asking for
implementation of the family settlement whereby the share holding pattern had to
be divided in a particular manner. Those aspects are details to be seen at the stage
of trial, after recording evidence, not now. Likewise, the question of seeking leave
from the court would have arisen if the other suit had been filed by the plaintiff;
undeniably he is not plaintiff, in that case. The plea of suit being barred on that
score too, has to fail.
20.
That brings the discussion to the question of objection regarding court fee.
In Tara Devi v. Thakur Radha Krishna Maharaj ((1987) 4 SCC 69) the Supreme
Court observed that :
"It is now well settled by the decision of this Court in Sathappa Chettiar v.
Ramanathan Chettiar (1958 SCR 1024 : AIR 1958 SC 245) and
Meenakshisundaram Chettiar v. Venkatachalam Chettiar ((1980) 1 SCC 616) that
in a suit for declaration with consequential relief falling under Section 7(iv)(c) of
the Court Fees Act, 1870, the plaintiff is free to make his own estimation of the
reliefs sought in the plaint and such valuation both for the purposes of court fee
and jurisdiction has to be ordinarily accepted. It is only in cases where it appears
to the court on a consideration of the facts and circumstances of the case that the
valuation is arbitrary, unreasonable and the plaint has been demonstratively
undervalued, the court can examine the valuation and can revise the same."
In Sujir Keshav Nayak, Appellant V. Sujir Ganesh Nayak 1992-(1)-SCC 731, after
considering previous decisions reported as R. S. Jadhav Desai v. S. V. Jadhav Desai (AIR
1918 PC 188); Abdul Hamid Shamsi v. Abdul Majid ((1988) 2 SCC 575) the court upheld
the plaintiff‟s right to value the suit for accounting according to his own estimate; it was
also held that he has not been given the absolute right or option to place any valuation
whatever in such relief. The court also noticed the previous decision in
Meenakshisundaram Chettiar v. Venkatachalam Chettiar ((1980) 1 SCC 616), where it
was observed that even though in suit for accounting the loss of revenue is ensured by
statutory provision yet a plaintiff has a duty to give a fair estimate of the amount for
which he sues. The court, after reviewing all decisions, held that:
“ The law on this aspect, thus, should be taken to be as under :
(1) Where the question of court fee is linked with jurisdiction a defendant has a
right to raise objection and the court should decide it as a preliminary issue.
(2) But in those cases where the suit is filed in court of unlimited jurisdiction the
valuation disclosed by the plaintiff or payment of amount of court fee on relief
claimed in plaint or memorandum of appeal should be taken as correct.
(3) This does not preclude the court even in suits filed in courts of unlimited
jurisdiction from examining if the valuation, on averments in plaint, is arbitrary.”
19.
The plaintiff therefore, has ordinarily the right to value his reliefs for the purpose
of court fees as well as jurisdiction. Yet, this right is not an unqualified right, since even
in suits preferred in courts of unlimited jurisdiction (like the present case) the court has
the right to examine if the valuation, on averments in plaint, is arbitrary. In the light of
this discussion, it is necessary to see whether the valuation is appropriate, or arbitrary.
20.
A bare reading of the Family settlement, and averments in the suit (described in
tabular form, in Para 2 of this order, show that the sum total of assets and cash
obligations involved, are approximately above Rs. 75 crores. In the circumstances, the
suit valuation, for purposes of court fees, at Rs 21,00,000/- made, in the suit, is arbitrary.
It is therefore, held that the suit has not been valued properly for the purposes of court
fees.
21.
In the above circumstances, the plaintiff is granted four weeks time to properly
value the suit, having regard to averments in the suit, and pay the requisite court fees. The
application is accordingly disposed of in these terms.
OCTOBER 23, 2008
S.RAVINDRABHAT,
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