Government of Canada vs Sanjay Madan and Ors

VIKAS MAHAJAN, J.

The present suit has been filed by the plaintiff [‘Government of Canada’] seeking, inter alia, recovery of funds and rendition of accounts relating to monies allegedly transferred from Canadian Bank Accounts to Indian Bank Accounts, which are stated to be held in the names of defendant no.1 and defendant no.2, who, it is alleged, have obtained monies through fraud from the Government of Ontario. This includes recovery of funds transferred through banking channels, along with the gains made on these funds, such as interest earned on deposits, profits from investments, and appreciation in the value of assets acquired using these funds. The plaintiff also seeks recovery of funds transferred to India through non-banking channels.

It is the case of the plaintiff that on 04.04.2023, defendant no.1 entered a guilty plea before the Ontario Superior Court of Justice, admitting to criminal charges pertaining to defrauding the Government of Ontario of millions of dollars by abusing his official position within the Ministry of Education. The defendant no.1 had further admitted having engaged in fraudulent activities and receiving secret commissions/kickbacks, during the period from 2011 to 2020.

It is stated that investigations have revealed that similar type of fraudulent activities had commenced even prior to 2011. The defendant no. 1 further admitted of transferring the proceeds of the said fraudulent activities in India, where such funds were deposited in various bank accounts held in his name and in the name of his wife, Mrs. Shalini Madan, across multiple Indian Banks, which are arrayed as defendant nos. 3 to 10 in the instant suit.

It is averred that on 27.11.2023, defendant no.2 likewise pleaded guilty to criminal charges laid by the Ontario Provincial Police, including charges related to fraud, possession, and laundering of proceeds of crime. In his plea, he is stated to have admitted to acting as an accomplice of defendant no. 1 in the fraudulent schemes. It is stated that civil proceedings arising out of the said fraudulent acts, involving defendant no. 1 and other persons, including defendant no. 2, are presently pending adjudication in Canada.

It is the case of plaintiff that the fraudulent activities were carried out through two principal schemes. The first is described as the “Support for Families Program (SFFP) Fraud”, which pertains to a scheme introduced by the Government of Ontario in 2020 to provide financial assistance to parents and guardians ‘for at-home learning expenses’ during the COVID-19 pandemic.

It is further the case of plaintiff that between April and July 2020, defendant no.1 misused his position by submitting more than 78,000 fraudulent applications under the said scheme, of which over 44,000 applications were processed, resulting in disbursement of amounts exceeding 10.8 million Canadian Dollars [‘CAD’]. These funds were then credited to the Canadian bank accounts held by defendant no. 1, Mrs. Shalini Madan, their sons, Chinmaya Madan and Ujjawal Madan, as well as to accounts operated by defendant no.1’s accomplice i.e. defendant no. 2, leading to deposits of approximately CAD 103,000 into the bank accounts opened by defendant no.2 at the instance of defendant no.1.

The second scheme is described as the “Fee for Service Consultants (FFSC) Fraud”, which is stated to be another long-running fraudulent scheme uncovered during the investigation into the ‘SFFP fraud’. It is stated that from at least 2011 until August 2020, defendant no. 1, along with other accomplices, caused the Government of Ontario to enter into contracts with certain Vendors of Record for the provision of IT service consultants, in return for which he received illicit commissions or kickbacks from such vendors or their subcontractors.

It is the case of the plaintiff that in his guilty plea, defendant no. 1 has admitted to his involvement in both, the SFFP and FFSC frauds, while defendant no.2, in his plea dated 27.11.2023, admitted to actively participating in the FFSC scheme and deriving unlawful gains therefrom. They have also admitted of utilising the proceeds of the said fraud to acquire immovable properties in India.

It is stated that on 19.10.2020, the Ontario Superior Court of Justice ordered a Mareva injunction against defendant nos. 1 and 2, freezing their assets located in Ontario, which order was subsequently extended on 29.01.2021 to cover their worldwide assets. The Mareva injunction is stated to have remained in force as on the date of institution of the present suit.

In sum and substance, it is the case of the plaintiff that a substantial portion of the funds obtained through the aforesaid fraudulent schemes has been transferred from Canada to India and deposited in bank accounts held in the names of defendant no.1 and his wife i.e., Mrs. Shalini Madan. Although certain amounts have been stated to be repatriated to Canada, a sum of at least CAD 33,345,991 remains unrecovered and are lying in India, which has necessitated the filing of the instant suit.

In the backdrop of above facts, the defendant no.1 has filed the present application under Order VII Rule 10 & 11 read with Section 151 of CPC seeking return/rejection of plaint.

At the outset, Mr. Ramesh Singh, learned Senior Counsel appearing for the applicant/defendant no.1 submits that while the present application raises various grounds for rejection including lack of disclosure of cause of action; forum non conveniens; non-maintainability of the suit under Section 84 of the CPC on account of plaintiff's lack of locus to institute the present suit against its own citizens, but he would be limiting his submissions to three core issues viz.(i) the reliefs prayed being barred by limitation; (ii) this Court lacking territorial jurisdiction to entertain the present suit; and (iii) plaintiff having abused the process of law.

On the aspect of limitation, Mr. Singh submits that the reliefs claimed are ex-facie time-barred under Article 68 and Article 91(a) of the Schedule to the Limitation Act, 1963. He substantiates by submitting that for the purpose of Article 68 and Article 91(a)of the Schedule, the starting date of limitation is the date of first discovery about misappropriated funds.

He submits that it is the admitted position in the plaint that knowledge of alleged transfer of illegal funds to the bank accounts in India was received by plaintiff between 22.10.2020 and 18.12.2020. Thus, the present suit ought to have been filed on or before 18.12.2023, and the same having been filed on 15.05.2025, makes it prima facie barred by limitation.

He submits that the repatriation of CAD 6,897,995 from the bank accounts in India cannot extend the period of limitation under Section 19 of the Limitation Act, 1963 as said repatriation was done by October 2020. He further submits that even subsequent Settlement Agreement dated 10.03.2025 cannot revive the claims, firstly, because by the date of settlement, the period of limitation for recovery had already expired; secondly, the payment under the said settlement was to be credited in terms of a restitution order passed in a criminal matter, but not on account of alleged debt to be recovered by the plaintiff.

He submits that even prayer for rendition of accounts is barred both under Article 4 or under Article 113 of the Schedule to the Limitation Act. He submits that for the purpose of Article 4 if defendant no.1 is presumed to be agent of plaintiff, the period of limitation would start when the neglect or misconduct became known to the principal/plaintiff, and for applicability of residuary Article 113, period of limitation would commence when right to sue accrues. He submits that in both the scenarios, the alleged misconduct or right to sue, the limitation would start running from 22.10.2020 - 18.12.2020 i.e. when the alleged misconduct had occurred or right to sue had accrued. Reliance in this regard is placed on the decision of Hon’ble Supreme Court in Sankar Dastidar v. Banjula Dastidar (Smt) and Anr., (2006) 13 SCC 470.

Apropos the second ground, Mr. Singh argues that this Court lacks territorial jurisdiction to entertain the present suit as the entire cause of action has arisen out of India. He submits that according to the averments in the plaint, the entire structural matrix of the alleged misappropriation took place in Canada. Even, the alleged amount of CAD 40,243,986 is stated to have been allegedly transferred from plaintiff’s bank accounts in Canada into defendant nos.3 to 10 Banks. Thus, entire facts which have to be proved by the plaintiff to succeed in the present suit originates in Canada.

He submits that the factum of alleged siphoned money finding its way into the banks in India is merely incidental and not integral to be proved to obtain a decree of recovery of amount as prayed for in the present suit, which is in the nature of disgorgement.

Alternatively, Mr. Singh submits that even if a minuscule fraction of the cause of action is assumed to have arisen within the jurisdiction of this Court, this Court must decline to exercise its jurisdiction invoking the doctrine of forum non-conveniens, as the absolute ‘centre of gravity’ of the dispute, including all primary documentary evidence and key witnesses are situated in Canada. He placed reliance on – (i) Kusum Ingots & Alloys Ltd. vs UOI & Anr., (2004) 6 SCC, and (ii) Sterling Agro v. UOI and Ors., (2011) SCC OnLine Del 3162.

Lastly, regarding the third ground i.e. abuse of process of law, Mr. Singh submits that present suit is liable to be dismissed by this Court in exercise of its inherent power under Section 151 CPC as the present suit is an abuse of the process of the Court.

He substantiates this plea by contending that the plaint itself discloses that for recovery/disgorgement of alleged misappropriated amount, which includes amount claimed in the present suit, both civil and criminal proceedings are pending in Canada. Accordingly, present suit is nothing but an attempt to re-litigate the very same issue, which amounts to an abuse of the process of law. In support of this submission, he has placed reliance on the judgment of the Supreme Court in K.K. Modi v. K.N. Modi & Ors., (1998) 3 SCC 573.

On these grounds, Mr. Singh submits that the present suit, which seeks recovery of CAD 33,354,991 along with rendition of accounts against defendant nos. 3 to 10 Banks, is fundamentally untenable and liable to be rejected at the very threshold.

Per contra, Mr. Nakul Dewan, learned Senior Counsel for non-applicant/plaintiff strongly opposes the instant application by submitting at the outset that the rejection of the plaint is sought solely by defendant no.1 in respect of reliefs sought against him, whereas distinct and independent reliefs have also been claimed against the other defendants as well, which include – (i) a decree for rendition of accounts against defendant nos. 3 to 10 Banks; (ii) various injunctive reliefs against defendant no.11/RBI qua repatriation of funds; and (iii) a decree praying for interest. He, therefore, submits that allowing the application filed by defendant no.1 would entail rejection of plaint in part, which is not permissible in law. Reliance in this regard is placed on Madhav Prasad Aggarwal and Anr. v. Axis Bank Ltd. and Anr., (2019) 7 SCC 158.

Further while relying upon Vinod Infra Developers Ltd. v. Mahaveer Lunia & Ors., 2025 SCC OnLine SC 1208, Mr. Dewan contends that selective severance of reliefs is impermissible where different causes of action are independently pleaded and founded on distinct facts.

On the issue of limitation, Mr. Dewan submits that chronology pleaded in the suit demonstrates that the cause of action did not arise at a single isolated moment but evolved through successive discoveries, compelled disclosures, admissions, judicial findings and forensic reconstruction, given the sophisticated and well-structured nature of defendant nos.1 and 2’s fraud.

He submits that the plaint and its accompanying documents must be read as a whole rather than selectively. According to Mr. Dewan, whole reading of the plaint would clearly demonstrate that sophisticated, complex, and layered fraud of siphoning public monies under the SFFP and the FFSC Schemes in Canada was uncovered progressively through continuous and extensive forensic investigations, interviews, and wiretaps.

He submits that although initial irregularities appeared in late 2020, the nature and extent of fraud was unknown, given that a large number of bank accounts had been opened and several documents had been fabricated and ultimately, the suit was filed supported by KPMG India Report dated 07.01.2025, which provided an in-depth analysis of the movement of funds to India.

He submits that in the meanwhile defendant no.1 had also entered into a partial agreement vide Minutes of Settlement dated 06.03.2025, which was approved on 24.04.2025, under which he gave his unconditional consent to the forfeiture and repatriation of INR 65.9 crores [11.1 million CAD] from his Indian bank accounts, representing a partial portion of CAD 33,345,991 still outstanding.

He further submits that given the discovery of fraud was progressive in nature coupled with the fact that the fraud was layered over several bank accounts (with several documents being fabricated by the defendant nos.1 and 2), which could not have been discovered without a comprehensive forensic analysis, the facts to a large extent were discovered and unravelled with the forensic report of KPMG dated 07.01.2025. The suit was filed within 4 months of the receipt of this Report. He submits all these facts, which made plaintiff to file the instant suit in 2025, have been set out in paragraphs relating to cause of action and limitation in the plaint.

He submits that Section 17 of the Limitation Act, 1963 postpones the commencement of limitation until plaintiff discovers the fraud, or could with reasonable diligence have discovered it. Limitation begins only when the plaintiff has knowledge sufficient to enable him to seek his remedy in Court. He submits partial knowledge of fraud, where defendant no.1’s conduct prevents it from becoming full knowledge, does not suffice to commence limitation. Reliance in this regard is placed on Pallav Sheth v. Custodian & Ors., (2001) 7 SCC 549.

He submits that defendant nos.1 and 2 have made several acknowledgments in writing in terms of section 18 of the Limitation Act, 1963, which is clear from (i) the agreed statement of facts signed by defendant no.1 dated 04.04.2023; (ii) the forfeiture orders dated 04.04.2023; (iii) letters dated 15.02.2024 and 25.03.2024 addressed by defendant no.1 and (iv) Minutes of Settlement dated 06.03.2025, approved on 24.04.2025. These documents extend the corresponding limitation to sue, in terms of section 18 of the Limitation Act,1963.

He submits that it is settled law that an acknowledgment need not be accompanied by a promise to pay, need not specify the exact amount due, and need not be express; it is sufficient if the statement indicates the existence of a subsisting jural relationship and an intention to admit it, which intention may be inferred from the circumstances. Reliance in this regard is placed on Dena Bank v. C. Shivakumar Reddy and Anr., (2021) 10 SCC 330 and Asset Reconstruction Co.(India) Ltd. v. Bishal Jaiswal and Anr., (2021) 6 SCC 366.

He submits that in any event whether these documents satisfy the requirements of a valid acknowledgment under Section 18 is itself a matter for trial and cannot be conclusively determined at the stage of Order VII Rule 11 CPC.

He submits that for recovery/disgorgement of present nature and rendition of accounts, the limitation accrues in terms of Article 113 of the schedule to the Limitation Act, which employs the phrase ‘when the right to sue accrues’, which is different from provisions like Articles 58, 59, and 104 which use word ‘first accrues’, therefore, the period of limitation for the purpose of Article 113 would be differently computed depending upon the last day when the cause of action therefor arose.

He submits that in cases involving fraud, the accrual of course of action under Article 113 must necessarily be read in conjunction with section 17 of the Limitation Act, 1963. The right to sue cannot be said to accrue until the fraud is discovered in the sense contemplated by that provision. Applying this to the present case, the cause of action, as pleaded, can be meaningfully asserted only when (i) the forensic link between the Canadian fraud and specific Indian balances is reconstructed, and (ii) plaintiff came in possession of material capable of being produced in legal proceedings. This was possible only with the KPMG report dated 07.01.2025.

He submits that the issue of limitation constitutes a mixed question of fact and law which cannot be decided under Order VII Rule 11.

He submits that application filed by defendant no.1 does not set out or mention the applicability of any particular Article of the Limitation Act, 1963. He submits that during arguments, Mr. Singh has relied upon Articles 4, 68 and 91(a). It is contended by Mr. Dewan that Mr. Singh’s reliance on Articles 4, 68, and 91(a) is misconceived for the following reasons:

In response to the challenge regarding territorial jurisdiction and the doctrine of forum non conveniens, Mr. Dewan argues that the plea of forum non conveniens itself presupposes that this Court possesses the requisite jurisdiction to try the suit, meaning thereby, it cannot form a ground for non-suiting the plaintiff or rejecting its plaint under Order VII Rule 11.

He submits that in the present case, territorial jurisdiction is uncontrovertibly established under Section 20(c) for following reasons: (i) proceeds from the fraud are retained in identified Indian accounts of defendant no.1 at ten branches of the banks located in New Delhi; (ii) rendition of accounts and repatriation directions can only be granted by an Indian court; and (iii) Canada is not a reciprocating territory under Section 44A CPC, therefore, a Canadian decree cannot be executed directly in India and a fresh suit on the original cause of action is necessary. Reliance in this regard is placed on Marine Geotechnics LLC v. Coastal Marine Construction and Engineering Ltd., 2014 SCC OnLine Bom 309.

He further submits that doctrine of forum non conveniens does not apply to civil suits governed by Section 20 of the CPC, where even part of the bundle of essential facts conferring jurisdiction is sufficient. Indubitably, material components of a transaction, including fund transfers, occurred within the jurisdiction of this Court (with banks located within the jurisdiction of this Court). Consequently, this Court is competent to entertain the suit. Reliance in this regard is placed on the following decisions (i) Horlicks Ltd. and Anr. v. Heinz India (Pvt.) Ltd., 2009 SCC OnLine Del 3342, and (ii) Tata Chemicals Ltd. v. Puro Wellness Pvt. Ltd., 2019 SCC OnLine Del 7605, which in turn relies upon Horlicks (supra).

He submits that Canadian criminal convictions, the Restitution Order, and the partial forfeiture proceedings in Canada are not directly and substantially the same subject matter as the present suit for recovery of specific Indian-held balances, rendition of accounts from Indian banks, and RBI-approved repatriation. Further, the pendency of foreign proceedings does not bar an Indian court from entertaining a suit. Reliance in this regard is placed on Magotteaux Industries Pvt. Ltd. & Ors. v. AIA Industries Ltd., ILR (2009) 3 Delhi 22.

He submits that the present suit, in contrast, seeks recovery of the balance CAD 33,345,991 lying in specifically identified Indian bank accounts, together with rendition of accounts against defendant nos.3 to 10 banks; mandatory injunctions against Indian financial institutions, and; RBI approval of repatriation. The reliefs are distinct, territorially specific, and cannot be obtained from a Canadian court. The Ontario Superior Court itself, in both the guilty plea proceedings and the Restitution Order, expressly preserved the Crown’s right to pursue further civil recovery. He submits that a suit that pursues reliefs no foreign court could grant, and that is expressly preserved by the foreign court's own order, cannot be characterised as “re-litigation” or an abuse of process.

In rejoinder, Mr. Singh submits that for the purpose of Article 68 and Article 91(a) of the Schedule to the Limitation Act, 1963 the starting date is the date of first discovery about the misappropriated funds. He submits that as per para 157 of the plaint, the said date is October 22–23, 2020, as on the said dates ‘two bank statements were obtained and reviewed, and plaintiff first discovered that illegal funds were transferred to bank accounts in India.

He further submits that plaint in prayer (c) itself seeks rendition of account in form of complete bank statements from defendant nos.3-10 banks from 01.01.2011. In that view of the matter, the justification for filing the suit only after obtaining complete information about the misappropriated money transferred in the Indian bank accounts, is ex facie misconceived/self-defeating.

He submits that relief sought in prayer (c) further demonstrates that present suit has been filed without having complete knowledge and information regarding the extent of monies misappropriated and transferred in India. In fact, KPMG Report itself records that future investigation is ongoing. In other words, KPMG Report dated 07.01.2025 is not conclusive. Given this position, plaintiff could have very well filed the present suit earlier, when, as per its own pleaded case and documents filed, it had the information regarding the figure of substantial misappropriated amount having been transferred to the Indian bank accounts.

He submits that justification of filing the instant suit this late is also misconceived for two reasons. Firstly, the very same plaintiff initiated civil proceedings in Canada in October of 2020 itself and continue to amend its plaint. The same could have been done here as well. Secondly, the Decree for recovery sought for in the present suit is not completely in line with KPMG Report, which records that current whereabouts of CAD 27.9 Million out of CAD 40.2 Million, is not known.

He submits that filing of the civil proceedings in Canada in October, 2020, itself shows the knowledge of fraud having come to the notice of the plaintiff at least in October, 2020 itself.

He submits that whatever documents on which attention of the Court has been drawn for showing applicability of Section 18 of the Limitation Act, 1963 are no acknowledgement in terms of the said Section for the reason that whatever has been recorded in the said documents are for the purpose of compounding of criminal offence.

He submits that Indian banks where the alleged misappropriated amount have actually been transferred and stashed is not a relevant fact/circumstances/cause of action for the purpose of grant of a decree of recovery of alleged misappropriated money against defendant no.1. The location of the banks may be relevant for executing the decree in terms of prayer (a) but is not relevant for passing of the decree in terms of prayer (a). Furthermore, he submits that even the factum of money lying in Indian bank accounts is an incidental fact and not a material fact.

He submits that the fact that a decree granted by Court in Canada cannot be executed in terms of Section 44A CPC is not a relevant factor for according territorial jurisdiction to the Indian Courts when, otherwise no material cause of action for grant of decree in terms of prayer (a) has arisen in India.

As regards doctrine of forum non conveniens, Mr. Singh submits that the doctrine applies vis-a-vis foreign forum, even though it may not be applicable when two domestic forums are involved. He submits in the present facts and situation, the doctrine shall be appliable in view of the fact that the Courts in Canada (i.e. a foreign forum) are more appropriate Court of competent jurisdiction to decided the lis. Reliance in this regard is placed on Horlicks (supra).

I have heard learned senior counsel for the parties and have perused the record.

The principal objection of defendant no.1/applicant as to the lack of territorial jurisdiction of this Court, and the alternative submission that even if the small part of cause of action has arisen within the jurisdiction of this Court, the doctrine of forum non-conveniens ought to be invoked in this case, as the appropriate forum is the forum in Canada, needs to be addressed first.

In the event, defendant no.1/applicant succeeds on this count, the logical consequence thereof would be the return of plaint and the question of entertaining other objections with regard to limitation and abuse of process of law would not arise.

The law is well settled that the objection as to territorial jurisdiction under Order VII Rule 10 CPC has to be appreciated by way of demurrer, which means that it has to be seen taking all the averments made in the plaint on its face value. In other words, such objection has to be considered limited to the averments made in the plaint as well as the documents filed by the plaintiff, whereas the defence set up by the defendant is irrelevant at that stage.

Reference in this regard may be had to the decision of the Division Bench of this Court in M/s RSPL Ltd. v. Mukesh Sharma & Anr., 2016 SCC OnLine Del 4285, wherein relying upon the decision of Hon’ble Supreme Court in Exphar SA and Another v. Eupharma Laboratories Ltd. and Another, (2004) 3 SCC 688, following pertinent observations were made:

(emphasis supplied)

Section 20(a) of the Code of Civil Procedure, 1908 specifically provides that every suit shall be instituted in a court within the local limits of whose jurisdiction the defendant(s), at the time of commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain. Whereas, Section 20(c) provides that a suit may be instituted in a Court within the local limits of whose jurisdiction, the cause of action has wholly or partly arisen.

Ergo, in order to determine its territorial jurisdiction, this Court needs to see two things: One, whether any of the defendants, at the time of commencement of the suit, actually and voluntarily resided or carried on business or personally worked for gain, within the local limits of this Court; Second, whether any cause of action, wholly or in part has arisen within the local limits of this Court; and for that, this Court has to peruse the relevant paragraphs in the plaint as regards the cause of action/territorial jurisdiction, that too, as noted above, only by way of demurrer.

It is settled law that a cause of action means every fact, which, if traversed, would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, it is a bundle of facts, which taken with the law applicable to them gives the plaintiff a right to relief against the defendant^{11.Swamy Atmananda & Ors. v. Sri Ramakrishna Tapovanam & Ors., (2005) 10 SCC 51}. Reference in this regard may be had to the decision of the Hon’ble Supreme Court in South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises (P) Ltd., (1996) 3 SCC 443, wherein the Hon’ble Supreme Court had articulated the above proposition in the following words:

(emphasis supplied)

It is equally settled that for considering the plea for rejection of plaint under Order VII Rule 11(d) CPC, the averments made in the plaint alone have to be seen assuming the same to be correct. The Court cannot at that stage examine the defence put forth by the defendant in the written statement or the documents annexed thereto.

It is in the light of above settled legal proposition apropos jurisprudence governing both return and rejection of plaint, the averments made in the plaint with regard to the arising of cause of action, territorial jurisdiction and limitation, assumes relevance, and the same are reproduced herein below for ease of reference:

(emphasis supplied)

For ascertaining whether this Court has the territorial jurisdiction in terms of Section 20 CPC, the relevant averments in the plaint, which are reproduced herein above, would reveal that it has been pleaded therein that the bank accounts used by defendant nos.1 and 2 for transfer of illegally obtained funds have been maintained with the defendant banks which are located within the territorial limits of this Court i.e. Delhi. It is further pleaded that the investigation conducted by the plaintiff has also revealed that the alleged illicit funds transferred to Indian bank accounts can be traced in Delhi. Indubitably, reading of plaint as a whole would reveal that the part of cause of action involving transfer of funds has occurred within the territorial jurisdiction of this Court, which furnishes to the plaintiff a right to claim relief against the defendants, therefore, this Court has the territorial jurisdiction to entertain and adjudicate the present suit.

That apart, a specific prayer for passing a preliminary decree for rendition of accounts against defendant nos.1 to 10, which includes the banks/financial institutions [i.e. defendant nos.3 to 10] situated within the territorial jurisdiction of this Court, has also been made in the Suit. Even the relief has specifically been claimed against defendant no.11/RBI for approving foreign remittance of funds from Indian bank accounts held by defendant nos.1 and 2 to the plaintiff. Since the said defendants nos. 3 to 11 are carrying on their businesses within the local limits of this Court, in that view of the matter as well, this Court would have the territorial jurisdiction to entertain the present suit against the defendant nos. 3 to 11.

It has also been argued on behalf of the plaintiff that Canada is not a reciprocating territory in terms of Section 44A CPC^{22.Section 44A. Execution of decrees passed by Courts in reciprocating territory.- (1) Where a certified copy of a decree of any of the superior Courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India as if it had been passed by the District Court.}, which position has not been disputed on behalf of the defendant no.1. Reciprocating territory as per Section 44A means any country or territory outside India, which the Central Government may, by way of notification in the Official Gazette, declare to be a reciprocating territory and 'Superior Courts' in relation to such a territory for the said Section. This Court can take judicial notice of the fact that the Central Government has in exercise of the powers conferred upon it by Explanation I^{33.Explanation I .-"Reciprocating territory" means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section; and "superior Courts", with reference to any such territory, means such Courts as may be specified in the said notification.} to Section 44A has declared by way of separate Gazette notifications approximately 12 countries to have reciprocal arrangement with India, but Canada has not been so notified.

The law is well settled that a decree or a judgment of a foreign country which has not been declared as a “Reciprocating Territory” by the Central Govt. is not executable in India.^{44.1998 SCC OnLine Del 743 : Formosa Plastic Corporation Ltd. v. Ashok Chauhan & Ors.} The learned Single Judge of Bombay High Court in Marine Geotechnics LLC. v. Costal Marine Construction and Engineering Ltd., (2014) SCC OnLine Bom 309, observed that since the decree of court in a non-reciprocating foreign territory cannot be executed, the party possessing such a decree has two options – either to file a suit in the domestic Indian court of competent jurisdiction premised on such foreign decree or a suit based on the original underlying cause of action, or on both. The relevant extract from the said decision is reproduced herein below for ready reference:

(emphasis supplied)

This Court also in Century Metal Recycling Private Limited v. Sachin Chhabra & Ors. 2017 SCC OnLine Del 12582, in the context of foreign judgment from a non-reciprocating territory, observed that though a suit can be filed in India based on such judgment but still the plaintiff will have to show that the cause of action therefor accrued within the territory of India, jurisdiction whereof is invoked or that the defendant, at the time of commencement of suit, actually and voluntarily resides or carries on business or personally works for gain within the said territory. The relevant extract of the decision reads thus:

(emphasis supplied)

Reference may also be beneficially had to the decision in Elis Jane Quinlan & Ors. v. Naveen Kumar Seth, 2026 SCC OnLine Bom 1011, wherein it was observed as under:

(emphasis supplied)

As can be seen from the above, since India does not have a reciprocal treaty with Canada, the decree obtained by the plaintiff in Canada would not be executable in India. Even after obtaining the decree from Canada, the plaintiff will still have to file a suit in Delhi where the monies transferred by defendant no.1 to his various accounts maintained with defendant nos. 3 to 10 banks is stated to be lying, either based on such a decree or on the basis of underlying original cause of action, or both. In that view of the matter as well, no useful purpose will be served by asking the plaintiff to first obtain a decree from Canada, and then to file a suit in Delhi; rather it would be waste of time and effort when eventually the suit has to be filed within the territorial jurisdiction of this Court, again showing that the cause of action has arisen in Delhi or at the time of commencement of suit, defendants actually and voluntarily resides or carries on business or personally works for gain within Delhi.

Now adverting to the contention of the applicant/defendant no.1 that this Court is forum non-conveniens, therefore, the suit may not be entertained, it is to be noted that it is a trite law that the doctrine of forum non-conveniens does not apply to the civil suits in India which are governed by the provisions of CPC. Such a doctrine can though be invoked in an anti-suit injunction filed in the domestic Court in respect of a foreign forum, however, the present is not such a case.

The law in this regard has been exposited by the Division Bench of this Court in Horlicks (supra). The relevant extract from the said decision reads thus:

(emphasis supplied)

As can be seen from above, the plaintiff is always the dominus litis and so long as the Court has jurisdiction to try a suit, a party cannot be non-suited. A suit has to be governed by the CPC. The principle of forum non-conveniens in a suit governed by provisions of CPC applies only in respect of foreign forum and that too in an exceptional circumstance, when a suit is filed as an anti-suit injunction to prevent a proceeding in the foreign forum from becoming vexatious and oppressive. The said principle has no applicability in the suits filed in the domestic forums in India as they are governed by the CPC, although the writ courts under Article 226 of the Constitution may refuse to exercise jurisdiction in appropriate cases invoking the doctrine of forum non-conveniens. Even in the context of foreign forums as well, the principle of forum non-conveniens has been held to be the other side of the coin of the doctrine of anti-suit injunction.

In light of the above exposition, this Court is of the considered view that since it is not an anti-suit injunction, therefore, the doctrine of forum non-conveniens cannot be invoked in the present case. Accordingly, the alternative plea of forum non-conveniens as articulated by the defendant no.1/applicant is also rejected.

Insofar as defendant no.1/applicant’s objection that the suit is barred by limitation is concerned, it is to be noted that the plaintiff has sought to invoke Section 17 of the Limitation Act, 1963 (hereinafter ‘the Act’) to contend that the period of limitation would commence only from the date the fraud was discovered, which occurred progressively, as last as on 07.01.2025, when KPMG LLP (Canada) furnished its Madan Investigation Report for India providing critical evidence of flow of funds from Canada to Indian Bank accounts during the relevant period.

To appreciate the controversy as to limitation, it would be apposite to reproduce Section 17 of the Limitation Act, which deals with the effect of fraud or mistake and reads thus:

(emphasis supplied)

In Pallav Sheth (supra) the Hon’ble Supreme Court had an occasion to consider the import and scope of Section 17 of the Limitation Act. The relevant observation of the Court reads thus:

(emphasis supplied)

Reference may also advantageously be had to the decision of the Hon’ble Supreme Court in Saranpal Kaur Anand v. Praduman Singh Chandhok and Ors., 2022 8 SCC 401, wherein the Court while construing the provisions of Section 17 of the Act made the following relevant observations:

(emphasis supplied)

Clearly, the time starts running from the date of knowledge of the fraud/mistake; or the plaintiff could have first known or discovered the fraud or mistake by exercising reasonable diligence. It is thus, manifest that Section 17(1) of the Limitation Act does not protect a party at fault for failure to exercise reasonable diligence when the circumstances demand such exercise and on exercise of which the plaintiff/applicant could have discovered the fraud.

Indubitably, the questions that whether the documents or material had been fraudulently concealed by the defendant no.1 from the plaintiff or the plaintiff had the means to know the fraud or the plaintiff had exercised reasonable diligence, are not only relevant considerations, but the same are questions of fact.

However, in the context of plea of limitation raised in terms of Order VII Rule 11(d) what is significant is to examine, are the averments made in the plaint. The relevant averments which are germane for the issue reads thus:

(emphasis supplied)

Once the plaintiff has specifically pleaded that the forensic report dated 07.01.2025 of KPMG LLP (Canada) provided critical evidence of the flow of funds from Canada to Indian bank accounts during the relevant period and that it only upon receipt of said report, the plaintiff was able to fully comprehend the nature and extent of the fraud, which provided the necessary particulars to initiate the present suit for injunction, recovery of the remaining sums, and rendition of accounts, at this stage there is no reason not to accept the same. Such an averment becomes a mixed question of law and fact that cannot be decided summarily at this threshold stage under Order VII Rule 11 CPC. Therefore, the plaint cannot be rejected at this stage holding that the suit is ex facie barred by limitation.

Reference in this regard may had to the decision of Hon’ble Supreme Court in P.V. Guru Raj Reddy v. P. Neeradha Reddy (2015) 8 SCC 331, wherein it was observed that the conditions precedent to terminate a civil action at the threshold are stringent, more so when rejection of plaint is sought on the ground of limitation. It was further held that when plaintiff claims that he gained knowledge of the essential facts giving rise to cause of action, at a particular point of time, the same has to accepted. The relevant portion of the decision reads thus:

(emphasis supplied)

Likewise, in Chhotanben v. Kirtibhai Jaikrushnabhai Thakkar, (2018) 6 SCC 422, it was pointed out that the date on which the plaintiffs gained knowledge of essential facts is relevant for deciding as to whether the suit is barred by limitation or not. Such a plea, it was held, becomes a triable issue and hence the suit cannot be thrown out at the threshold.

There is another facet to the question of limitation. It has been contended on behalf of the defendant no.1 that the suit of the plaintiff shall be governed by the limitation period as prescribed under Article 4, 68 and 91(a) of the Act. To appreciate the submissions on behalf of defendant no.1 / applicant, relevant it would be to set out the said Articles from the Schedule to the limitation, which reads thus:

Article 4 is applicable to the suits by principals against agents for neglect or misconduct. The present suit is not a suit filed by the principal against its agent for any alleged neglect or misconduct. Rather, it is the plaintiff’s pleaded case that defendant no.1 was working as Sr. Govt. official with Government of Onterio, and has allegedly committed fraud, making it clear that there was neither principal-agent relationship between the plaintiff and defendant no.1 nor suit has been filed alleging misconduct or neglect on part of defendant no.1. Likewise, it is also not the case of defendant no.1 that he was working as agent for the plaintiff. Further, since the present suit inter alia seeks recovery of monies obtained through fraud, Article 4 would not apply to the present suit.

Article 68 of the Schedule of the Act in Part VI titled as “suits relating to movable properties” provides limitation period of three years in case of suit filed for ‘specific movable property’ lost, or acquired by theft, or dishonest misappropriation or conversion. Whereas, Article 91(a) in Part VII titled as “suits relating to tort” of the Schedule provides limitation period of three years for the suit claiming compensation for wrongfully taking or detaining any ‘specific movable property’ lost or acquired by theft or dishonest misappropriation, or conversion.

Incidentally, both the Articles 68 and 91(a) use the expression ‘specific movable property’. A Coordinate Bench of this Court in K. K. Sharma v. M/s. City Bank and Anr., 2015 SCC OnLine Del 12283 observed that Article 68 of the Act has no application to monies as the same applies only to movable properties and not monies. The relevant paragraphs from the said decision reads thus:

(emphasis supplied)

The applicant/defendant no.1 has not pointed out any other specific Article from the Schedule of the Act which would apply to the subject matter of the present suit viz. recovery of fraudulently transferred money to Indian Banks and rendition of accounts by such banks in respect of such money, and in the prima facie opinion of this Court their exists none.

It is trite that if a suit is not covered by any specific Article under the Schedule to the Act, then it would fall within the realm of residuary Article viz. Article 113. The said Article prescribes the limitation period of three years for filing any suit for which no period of limitation is provided elsewhere in the Schedule and the limitation period for filing such a suit begins to run “when the right to sue accrues”.

The Hon’ble Supreme Court in Union of India and Others v. West Coast Paper Mills Ltd. and Another, (2004) 2 SCC 747, had an occasion to examine the expression “when the right to sue first accrues” as used in Article 58 in contradistinction to the expression “when the right to sue accrues” used in Article 113 of the Act. For ready reference, Articles 58 and 113 of the Act are reproduced herein below:

The Hon’ble Supreme Court noting the distinction between expressions used in Articles 58 and 113 observed that in case of Article 113, the period of limitation would be reckoned from the date on which cause of action arose first. However, under Article 113, the limitation would be reckoned from the ‘last day’ when the cause of action arose. The relevant extract from the said decision reads thus:

(emphasis supplied)

Again, in Shakti Bhog (supra) the Hon’ble Supreme Court relying upon the decision in West Coast (supra) had drawn distinction between the language used in Article 113 vis-à-vis with other Articles in the first division of the Schedule i.e. Article 58, 59 and 104 to observe that to read expression “first” would tantamount to rewriting the provision and doing violence to the legislative intent. It was explicitly laid down that in cases governed by Article 113, what is required to be noted is - “when the right to sue accrues” (and not when the right to sue “first” accrues). The relevant extract from said decision reads thus:

(emphasis supplied)

The Division Bench of this Court in O.P. Khandelwal v. Steel Authority of India, 2024 SCC OnLine Del 6664 relying upon the decision in Shakti Bhog (supra) held that where Article 113 of the Act is invoked, the period of limitation would be reckoned from the date on which the cause of action last arose. The relevant para 23 of the said decision reads thus:

(emphasis supplied)

The plaintiff has specifically averred that the cause of action has inter alia arisen on 07.01.2025 when the KPMG LLP (Canada) furnished its investigation report for India, which provided critical evidence of the flow of funds from Canada to Indian Bank accounts during the relevant period. It is further stated in explicit terms that the investigation report prepared by KMPG LLP (Canada) has been instrumental in unveiling the vast scope of fraud perpetrated by defendant nos. 1 and 2 and in tracing the diversion of funds originating in Canada. It is upon receipt of the report, the plaintiff was able to fully comprehend the nature and extent of the fraud, thereby providing necessary particulars to initiate the present suit. The plaintiff has further pleaded that cause of action also arose on 24.04.2025, when the Ontario Superior Court of Justice approved settlement in the civil proceedings under which defendant no.1 has consented to the forfeiture of INR 65.9 Crore from his Indian Bank accounts, which is part of CAD 33,345,991 to be recovered by the plaintiff.

Keeping in view that the plaintiff has pleaded cause of action on 07.01.2025 as well as on 24.04.2025, besides on various other dates viz., 22-23 October, 2020; 27-28 October, 2020; 07 December, 2020; 18 December, 2020; 08 January, 2021; 29 January, 2021, 13 February, 2021; 18 February, 2021, 08 June, 2021; 07 April, 2022; 04 April, 2023; 27 November, 2023, therefore, the suit cannot be said to be ex facie barred by limitation, in light of the law exposited in West Coast (supra); Shakti Bhog (supra), and; O.P. Khandelwal (supra), warranting rejection of plaint at the stage of Order VII Rule 11 CPC. However, the question as to whether any cause of action arose on 07.01.2025 and on 24.04.2025 as well as on other alleged dates is a question of fact, which cannot be decided at this threshold stage.

As this Court has come to the conclusion that the suit is not ex facie barred by limitation, the plea taken on behalf of plaintiff that acknowledgments made by defendant nos.1 and 2 would also extend the period of limitation in terms of Section 18 of the Act, pales into insignificance for the time being and accordingly, the same is not being adverted to at this stage.

Next, it was argued on behalf of the applicant/defendant no.1 is that the present suit amounts to abuse of the process of law. The argument is predicated on the assertion that for the recovery / disgorgement of allegedly misappropriated amount, which includes the amount claimed in the present suit, similar civil proceedings are pending in Canada. On the other hand, the plaintiff has inter alia taken a stand that the proceedings in the Canadian Court are criminal proceedings and the restitution order of CAD 47,462,649 is a criminal procedure order of compensation, and further partial forfeiture and repatriation of assets in Canada was to the limited extent, whereas in contrast, the present suit seeks recovery of the balance CAD 33,345,991 lying in specifically identified Indian Bank accounts. Having regard to the rival stand taken by the parties, this also appears to be a disputed question of fact for which the provision of Section 151 cannot be invoked at this stage.

The submission is misconceived also for the reason that an Explanation^{55.Explanation. -The pendency of a suit in a foreign Court does not preclude the Courts in [India] from trying a suit founded on the same cause of action.} to Section 10 CPC explicitly provides that the pendency of suit in foreign Court does not preclude the Courts in India from trying the suit founded on the same cause of action. Reference in this regard may be had to the decision of the Division Bench of this Court in Magotteaux Industries Pvt. Ltd. (supra) wherein in the context of anti injunction suit, it was observed as under:

(emphasis supplied)

Before parting, apt would it be to deal with the decisions relied upon on behalf of applicant/defendant no.1. The defendant no.1 has relied on the decision in Sankar Dastidar (supra) to buttress the contention that the suit is barred by limitation. The said decision dilates on the applicability of Articles 68, 69 and 91 of the Act. This Court has already held that Articles 68 and 91 are applicable only to ‘specific movable properties’ which does not include monies. Similarly, plain reading of Article 69 shows that it also sets a limitation period of three years for a suit to recover "other specific movable property" and not for monies. Therefore, the reliance placed by defendant no.1/applicant on the said decision is of no avail.

Similarly, the reliance placed by the defendant no.1/applicant on the decisions of the Hon’ble Supreme Court in Kusum Ingots (supra) and Sterling Agro Industries Limited (supra) is misplaced. In both the said decisions, it was observed that even if part of cause of action has arisen, within the territorial jurisdiction of a particular High Court, still the High Court can refuse to entertain the writ petition invoking the principle of forum conveniens. Incidentally, both these decisions were rendered in the context of writ petitions under Article 226 of the Constitution, where High Courts have discretion not to entertain the writ petition invoking the principle of forum conveniens, whereas the present is not a writ petition. It is also not an anti-suit injunction, to which the principle of forum non conveniens may apply only qua foreign forum.

Reverting to the decision in Bhagat Singh Bugga (supra), it is noted that said decision is a pre-independence Calcutta High Court decision related to grant of anti-suit injunction and scope of Section 10 of the CPC as it then stood. It is not an authority dealing with return of plaint under Order VII Rule 10 or on grounds of forum non conveniens or rejection of plaint under Order VII Rule 11 of CPC. Further, in that case no such issue pertaining to a suit already pending/decided before a foreign Court was involved nor Explanation to Section 10 which expressly provides that the pendency of a suit in a foreign Court is no bar to a suit in an Indian Court, was under consideration. Therefore, reliance placed on Bhagat Singh Bugga(supra) is misconceived.

As regards the Modi Entertainment Network (supra), suffice it to say that the Apex Court in the said decision was dealing with the question of grant of anti-suit injunction restraining the proceedings in a foreign forum, therefore, the principles laid therein would not be applicable to the present case, which is not an anti-suit injunction.

In K.K. Modi (supra), the Hon’ble Supreme Court specifically observed that it is an abuse of process of the Court and contrary to justice and public policy for a party to re-litigate the same issue which has already been tried and decided earlier against him. Though, there is no quarrel to this proposition of law, however, as noted above, explanation to Section 10 specifically provides that pendency of a suit in a foreign court does not preclude the Courts in India from trying a suit founded on the same cause of action. Thus, this decision will also not help the cause of the applicant.

Under the circumstances discussed herein above, the application is devoid of merit. The same is accordingly dismissed.