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Supreme Court: Even if the plea of limitation is Not set up as a defence, the Court has to dismiss the suit if it is Barred by limitation.

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CASE TITTLE:S. SHIVRAJ REDDY(DIED)THR HIS LRS. AND Anr V S. RAGHURAJ REDDY AND OTHERS

CASE NO: CIVIL APPEAL OF 2024(Arising out of SLP(Civil) No(s). 23143-23144 of 2016)

ORDER ON: May 16, 2024

QUORUM: J. B.R. GAVAI and J.SANDEEP MEHTA

FACTS OF THE CASE:

The present appeal is preferred for assailing the judgment Dated 27th March, 2014 passed by the Division Bench of High Court of Judicature of Andhra Pradesh at Hyderabad.

The facts leading to the present appeal in question is that, Respondent/plaintiff, along with defendants And deceased M. Balraj Reddyhad constituted a partnership firm, namely “M/s Shivraj Reddy & Brothers. Further Respondent/plaintiff instituted original suit, Seeking relief of dissolution of the firm and rendition of accounts,wherein, The learned II Additional Chief Judge, City Civil Court, Hyderabad, allowed the original suit filed by respondent/plaintiff and passed a decreedeclaring the firm to be Dissolved and directed defendant Nos. 2 to 4 to tender accounts of The firm from the year 1979 onwards till October, 1998 and Further, granted liberty to respondent/plaintiff to file a Separate application seeking appointment of an Advocate Commissioner for taking accounts of the firm and for other Appropriate reliefs.Being aggrieved, defendant No.1 and 2  preferred Appeal before the High Court of Judicature of Andhra Pradesh at Hyderabad.wherein, the Learned Single Judge of the High Court vide judgment Allowed Appeal on the ground that the earlier case was barred by limitation as one of the partners in Subsisting partnership firm, Shri M. Balraj Reddy expired in 1984, Therefore the firm stood dissolved immediately on the death of the Partner. Since the original suit was filed in 1996, it was barred by Limitation. Aggrieved by the decision of learned Single Judge, respondent/plaintiff preferred LPA before the learned Division Bench of the High Court, which allowed the appeal and set aside the judgment dated passed by the Learned Single Judge, observing That the plea of limitation was never raised during the pleadings in The trial Court and learned Single Judge ought not to have dealt With that issue at all. Being aggrieved, appellants have preferred The present appeal by special leave.

LEGAL PROVISIONS:

Section 42 of the Partnership Act, 1932 talks about Dissolution on the happening of certain contingencies

CONTENTIONS OF APPELLEANT:

The appellant through their counsel urged that the Suit was filed by respondent/plaintiff for dissolution of thefirm and for the rendition of accounts in the year 1996.The counsel further referred to the partnership deed dated 25th April, 1978, Whereby submitted that the firmwas constituted and urged at a partnership at will. The counsel also drew the attention Of the Court to Section 42 of the Partnership Act, 1932, Further the counsel submitted that as per Section 42(c) of the Act, the death of a partner leads to automatic dissolution of the Firm.the counsel submitted that Shri M. Balraj Reddy i.e. Partner No. 3 in The firm admittedly expired in the year 1984 and consequent to his Death, the firm stood dissolved automatically. The counsel further urged that it is settled law that it is the duty of theCourt to dismiss any suit instituted after the prescribed period of Limitation, although limitation has not been set up as a defenceAnd thus, the learned Division Bench erred in allowing LPA  and interfering with the judgment passed by the learned Single Judge on the basis that the plea Of limitation was never raised during the pleadings and thus, the counsel On these grounds, urged Thatthe decree passed by the Learned trial Court to dissolve the firm and Directing the partners to tender the accounts being  upheld is ex facie Illegal, and therefore, deserves to be quashed and set aside.

CONTENTIONS OF THE RESPONDENT:

The Respondent through their counsel submitted that there is documentary Evidence on record to show that the firm continued To exist and its business activities continued even after the death Of Shri M. Balraj Reddy. The counsel therefore, urged that the contentions Put forth by the learned counsel for the appellants that the firm Stood dissolved automatically on the death of Shri M. Balaraj Reddy is misconceived. The counsel  further contended that the issue of limitation was never Raised before the trial Court and thus, the same could not have Been allowed to be taken at the first appellate stage. On these Grounds, the counsel sought dismissal of the appeal.

COURTS ANALYSIS AND JUDGEMENT:

The court on giving thoughtful consideration to the Submissions advancedand having gone through the Impugned judgment and the material placed on record.The court opined that theReasoning given by the learned Division Bench while dismissing LPA, that the learned Single Judge ought not to have considered the question of limitation as the defendants did Not choose to raise the plea of limitation in the trial Court is erroneous.The court further opined that  Law in this regard has been settled by this Court Through a catena of decisions. Therefore, the court also  referedjudicial precedents and Thus, the court observed that it is a settled law that even if the plea of limitation is Not set up as a defence, the Court has to dismiss the suit if it is Barred by limitation.The court also observed thefact that the firm was a partnership at will, is not in dispute. It Is also not disputed that one of the partners of the firm, namely,Shri M. Balraj Reddy expired in the year 1984. This event leaves No room for doubt that the partnership would stand dissolved Automatically on the death of the partner as per Section 42(c) of The Act, The court further observed that  A fervent pleathat the firm continued to exist even after the death Of Shri M. Balraj Reddy, and the business activities were continued By the firm.therefore the court opined that, Even if it is assumed for the sake of argument that the Partners were carrying on the business activities after the death of Shri M. Balraj Reddy, there cannot be any doubt that the firm Stood dissolved automatically in the year 1984 as mandated under Section 42(c) of the Act unless and until there was a contract Between the remaining partners of the firm to the contrary. The court further observed that There Is of course, no such averment by the respondents, further business Activities even if carried on by the remaining partners of the firm after the death of Shri M. Balraj Reddy, would be deemed to be Carried in their individual capacity in the circumstances noted Above.The court opined that the period of limitation for filing a suit for rendition of Account is three years from the date of dissolution.Hence in  the present Case, the firm dissolved in year 1984 by virtue of death of Shri M. Balraj Reddy and thus, the suit could only have been instituted Within a period of three years from that event. Indisputably, the Suit came to be filed in the year 1996 and was clearly time-barred, Therefore,the court opined that  learned Single Judge was justified in accepting theAppeal and rejecting the suit as being Hopelessly barred by limitation. As a consequence, the court opined that the impugned judgment passed by the Division Bench in LPAdoes not Stand to scrutiny and the court hereby reversed and set aside, the court further allowed the appeal accordingly.

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Delhi High Court no requirement for separate notice to each of the Trustees of the accused to make them Vicariously liable to be proceeded against in terms of Section 138 Of the NI Act

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CASE TITTLE:HARPREET SAHNI & ANR. V. SHRICHAND HEMNANI and Anr

CASE NO:CRL.M.C. 6094/2022 & CRL.M.A. 23877/202

ORDER ON:15.05.2024

QUORUM:JUSTICE NAVIN CHAWLA

FACTS OF THE CASE:

The above  petitions have been filed under Section 482 of the Code Of Criminal Procedure, 1973 challenging the Order dated 20.12.2019 passed by the learned Metropolitan Magistrate, Delhi  herein, under Section 138 of the Negotiable Instruments Act, 1881, As these petitions had common questions of law and facts, these are being considered and disposed of by Way of this common judgment.

The facts leading to the present petition in question is that The above complaint cases have been originally filed by the respondent, It was alleged That the accused nos.3 to 10 came in contact of the Respondent and represented and assured them about their position,based on their representation, the respondent have extended loans to the accused, in the joint name of accused no.1-Mother’s Pride Punjabi Bagh and the accused no.2-Presidium Eduvision Trust. It is alleged that the accused were to pay interest at the rate of 19.5% per annum on the loan amount for the period of the loan. It is alleged that till the month of June, 2018, accused nos.1 to 10 paid interest on the said loan, however, thereafter they defaulted in payment of interest,  It is claimed that on 01.12.2018, when the respondent deposited the cheques issued by the accused nos.1 to 10 for repayment of the loan, the same were dishonoured with the remark „Funds Insufficient‟. It is averred that the respondent  thereafter issued respective legal notices  to the accused nos.1 to 10 to repay the cheque(s) amount, however, the same was not paid. The respondent in the original complaint also pleaded and made similar allegations,however  It appears that in the pre-summoning evidence, the respondent(s) summoned the Manager of Axis Bank, Rajouri Garden, Delhi as a witness before the learned Trial Court to Give the pre-summoning evidence on the Bank Account Maintained by the accused no.2 therein, that is, Presidium Eduvision Trust, with the said bank. It is stated that the official from the Axis Bank appeared before the Learned Trial Court and placed all the account related records,The respondent(s) claimed  that for the first time, the respondent(s), from the Trust Deed and the Account Opening Form of the Presidium Eduvision Trust, came to know That the said Trust had three Trustees, that is, the petitioners Herein and the accused no.9 in the Complaint cases. The Respondent(s) claimed that these Trustees were fully involved in The subject transaction, however, had concealed that they were The Trustees of the accused no.2 Trust. The respondent(s) then filed an application under Section 319 of the Cr.P.C. praying for impleadment of the petitioners as additional accused in the Complaint cases. The respondent(s further claimed that as notice under Section 138 of the NI Act has been served on the Trust through its Trustees, hence the requirement of Proviso (b) to Section 138 of the NI Act hasbeen duly complied with, by the respondent. The said application was allowed by the learned Trial Court by the Impugned Order, and the Trust and its three Trustees have been summoned as accused in the Complaint Cases filed by the respondent. .The petitioners have filed the present petitions being aggrieved Of the said Order which summons the petitioners as accused in the Above Complaint Cases.

LEGAL PROVISIONS:

Section 138 of the NI penalizes the dishonour of any cheque which has been issued in the discharge of the whole or part of “any debt or other liability”

Section 141 of the NI Act talks about the offences by company

CONTENTIONS OF PETITIONER:

The petitioners through their counsel  submits that for Maintainability of a complaint under Section 138 of the NI Act read With Section 142 of the NI Act, service of notice under Proviso (b) to Section 138 of the NI Act on the accused is mandatory. The counsel further submits That in the Complaint Cases, admittedly, the alleged demand notice Dated 28.01.2019 was not addressed to the petitioners in their Individual capacity. Counsel further  submits that, therefore, the complaint(s)Against the petitioners are not maintainable and the petitioners cannot Be summoned in the same. In support, the counsel places reliance on the Judgments of  supreme Courts in Ashok Shewakramani & Ors. V. State of Andhra Pradesh & Anr.,and the judgment of The High Court of Gujarat in Somesh Sarjivan Jain v. State of Gujrat & Anr

The counse further submits that merely by amending the complaints and Now, in the relevant paragraphs, making averments against inter alia The petitioners, and by merely changing the number of the accused, the Respondent(s) cannot be said to have satisfied the requirements of  Section 141 of the NI Act. The counsel further  submits that, therefore, even otherwise The Complaint Cases, as against the petitioners, are liable to be Dismissed.

CONTENTIONS OF THE RESPONDENT:

The respondents through their counsel Submits that the Trust (the accused no.2 in the Complaint Cases) had Been issued the legal/demand notice dated 28.01.2019, to be served Through its Trustees. The respondent(s) were not aware of the Trustees Of the said Trust till the deposition of the official of the Axis Bank.counsel further Submits that though the respondent(s) had dealt with the petitioners, They were not aware of their status as Trustees of the accused the counsel further  submits that the notice addressed to the Trust through its Trustees,Is sufficient notice to the Trustees themselves in their individual Capacity as well. In support, the counsel also  placed reliance on the judgment of the Supreme Court in Kirshna Texport & Capital Markets Ltd. V. Ila A. Agrawal & Ors. .Placing reliance on the judgment of the Supreme Court in Hardeep Singh v. State of Punjab & Ors., the counsel further  Submits that the purpose of Section 319 of the Cr. P.C. is to ensure that the real culprit should not get away unpunished. The counsel further submits that Once it is discovered that the petitioners are the Trustees of the Accused no.2 Trust and are also alleged to be involved in the alleged Transactions with the respondent(s), they are liable to be proceeded Against in terms of Section 141 of the NI Act.the counsel submits that the Purpose of Section 319 of the Cr. P.C. is to address such a situation. Counsel  also placed reliance on the judgment of the High Court of Madras in Abraham Memorial Educational Trust v. C. Suresh Babu,, to contend that under Section 141 of the NI Act, all the Trustees of a Trust would be equally liable to be Proceeded against under Section 138 of the NI Act.

COURTS ANALYSIS AND JUDGEMENT:

On hearing both the parties and considering the legal provisions, the court observed that the  only plea of the petitioners is the Lack of notice under Proviso (b) to Section 138 of the NI Act and the Purported lack of pleadings in the Complaint Cases against the Petitioners herein in their individual capacity. The court also observed that As far as the lack of notice under Proviso (b) to Section 138 of The NI Act is concerned,  the said Provision requires notice to be sent to the ‘drawer’. Admittedly Notice(s) in the present Complaint Cases has been sent to the drawer,That is, the accused no.2-Trust.  The court also referred few judicial presidents.The court further considered that  There is no requirement for separate notice(s) to be Issued to each of the Trustees of the accused   to make them Vicariously liable and to be proceeded against in terms of Section 138 Of the NI Act read with Section 141 of the NI Act. The court further observed that the notice having Been served on the Trust through its Trustees, all the Trustees are Deemed to have been duly served with the legal/demand notice(s), Thereby meeting the requirement of Proviso (b) to Section 138 of the NI Act.As far as the plea of the learned counsel for the petitioners that The respondent(s) has merely changed the number of the accused in the Complaints and there is a lack of necessary pleadings in the complaint Cases in this regard, therefore the court opined that there is  no merit in the same. Therefore the court opined that, the above averments are sufficient for the purpose Of attracting Section 141 of the NI Act against the petitioners. Even Otherwise, in their capacity as Trustees of the accused no. 2, the Petitioners are officers in charge of the Trust. The petitioners shall Have to lead their defence under Section 141 of the NI Act, in case they are to escape their liability as the Trustees of the accused no.2-Trust, who is the drawer of the cheque(s) in question. Therefore the court opined that Such defence is Not to be considered by this Court or the learned Trial Court at this Stage, Hence . In view of the above, the court opined that there is no merits in the present petitions and , accordingly, dismissed the present petition.

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Fraud under Section 23(1) of Senior Citizens Act Limited to Violation of Transferor’s Upkeep Condition, Cannot Extend to Civil Law Fraud: Karnataka High Court

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Case title: Jayashankar and the Assistant Commissioner and Ors. 

Case no: Writ appeal No. 339 of 2023 (GM-RES)

Dated on: 24th April, 2024

Quorum: Hon’ble Justice Mr. N.V. Anjaria and Hon’ble Mr. Justice Krishna S Dixit.

Facts of the case: 
Under Section 4 of the Karnataka High Court Act, 1961 the writ appeal was directed against a judgement and order of a learned counsel dated on 03.03.2023 passed in a writ petition No. 12226 of 2020, dismissing the petition. There was an order passed under 23(1) of the maintenance and welfare of parents and senior citizens Act, 2007. The tribunal had declared that the registered gift deed dated 28.01.2014 was liable to be treated as cancelled as the transfer of property was void. The complainant K.V Nanjappa aged nearly hundred stated that the ancestral property is being partitioned but the complainant has retained one house, certain sites and 5acres of land. It was stated that the younger son of the complainant Jayashankar took the complainant to the Taluka office by misrepresentation saying that his presence is needed for a pension case and instead he got registered the document from the complainant in his favour. The complainant recently learned that his younger son Jayashankar had gotten the property registered without his knowledge. The complainant stated that he did not execute such gift deed to his son. The Tribunal declared that the registered Gift Deed dated 28.01.20214 to be cancelled as transfer of the property is void. The Original Petition was filed under Section 4 of the Karnataka High Court 1961 to set aside the Order dated 06.01.2014 passed by the President of the Maintenance and Welfare of Parents and Senior Citizens Tribunal. On Appeal, the Learned Single Judge observed that the Gift Deed was unequivocal and the property was gifted provided the Appellant took care of the father. The Petitioner was found to be not taking care and hence the condition of the Gift Deed was breached and the said finding by the Assistant Commissioner under the Maintenance and Welfare of Parents and Senior Citizens Act,2007 was based on the admission of the Appellant that his father is not residing with him. This Writ Appeal is filed under Section 4 of the Karnataka High Court Act, 1961, to set aside the impugned Order dated 03.03.2023 passed by the Learned Single Judge in WP 12226 of 2020.

Contentions of the appellant:

The single Judge overlooked the aspect that while providing the gift deed and transfer thereunder, the Competent Authority came to the conclusion that Gift Deed was acted upon by fraud. However, there was no evidence before the Authority that the Gift deed was executed by fraud. After death of the Complainant, it came to light that the father had executed a Will and that the Respondents were not happy with the Will and lodged Complaint under Section 379,420,447,448,465,468,471 and 506 of IPC. Apart from the same the Respondents also filed OS 70/2019 to declare the registered Will as null and void. All these material aspects were disregarded by the learned single Judge to confirm the judgment and order of the Tribunal.

Issues:

Whether the Competent Authority under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 has passed order by going beyond the purview of Section 23 (1) of the Act?

Legal provisions:

Section 23 (1) of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007: Section 23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 empowers a senior citizen to approach the Maintenance Tribunal to declare a certain specific transfer of property, by way of gift or otherwise, after the commencement of the MWPSCA, as void, if in case the transfer of property was premised on the condition that the transferee shall provide for the basic amenities and physical needs of the transferor; and after the transfer got effected such transferee refused or failed to provide for such basic amenities and physical needs.

Section 379- Theft imprisonment for three years with fine or both.
Section 420- deals with act of cheating.
Section 447- criminal trespass.
Section 448- house trespass.
Section 465- punishment for forgery.
Section 468- forgery.
Section 471- using a forged document as genuine.
Section 506- punishment for criminal intimidation.

Courts analysis and judgement:

The Supreme Court in Sudhesh Chhikara Vs Ramti Devi held that for attracting Section 23(1) two conditions must be fulfilled (a) The transfer must have been made subject to the condition that the transferee shall provide the basic amenities and basic physical needs to the transferor and (b) The transferee refuses or fails to provide such amenities and physical needs to the transferor. If both the conditions are fulfilled then by legal fiction the transfer shall be deemed to have been made by fraud or coercion or undue influence and the transfer shall become voidable. The facts suggests that an obligation was there on the Appellant to take care of the Complainant father and on such condition the gift deed was executed. The said condition was breached, as per the finding of the Competent Authority and the learned single judge as well. The Appellant admitted that father was not residing with him. The Complainant had to stay at the elder son’s house. The condition of treating the Gift Deed void was satisfied and hence there is no error in the order of the single judge for confirming the Order of the Tribunal by treating the gift deed as cancelled. However, the Tribunal while ordering cancellation of the gift deed cast doubt on the execution of the Gift Deed for the reason that while executing Gift Deed the Complainant has put thumb impression on the document but at the time of filing the complaint, he has put his signature which creates serious doubts about the consent and knowledge of the Complaint with regard to execution of the Gift Deed. The aforesaid finding by the Tribunal is unwarranted and further the Tribunal has gone beyond the operational purview of Section 23 (1). The section treats the transfer of the property in a particular manner to be deemed to have been made by fraud or coercion upon breach of condition of taking care and providing basic amenities i.e; the idea of fraud or coercion in section 23 (1) is in reference to breach of condition I.e; providing basic amenities and physical needs to the senior citizen. The words fraud and coercion could not be enlarged to normal concept of fraud or coercion in civil law. To establish fraud, evidence is required to prove the facts of fraud. Tribunal is neither a civil court nor the power exercised by the Tribunal is under the provisions of the Civil Court. The powers granted under the Act is to provide effective recourse in law or maintenance and welfare of parents and senior citizens and to guarantee and recognize them their rights. The Tribunal misdirected itself in law in making observations on paragraph 13 of the Order by suggesting that the gift deed was fraudulently obtained from the complainant. The findings are beyond powers and jurisdiction of the Tribunal. Accordingly, the observations in paragraph 13 of the Order of Tribunal are not sustained and are set aside. The Judgment and order of the learned single judge is modified to the said extent and rest of the part is confirmed. Accordingly, the Writ appeal is dismissed subject to the observations and findings and modifications.

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