AI Structured Summary
Not yet generated for this judgment
Judgment
Rajesh Tandon, J.—Heard Sri A.K. Joshi counsel for the appellant and Sri S.K. Jain counsel for the respondents.
Present appeal has been preferred against the judgment and decree dated 8.8.2006 passed by the Additional District Judge, Dehradun.
Briefly stated the plaintiff M/S Vigyan Chemical Industries filed a suit for the recovery of Rs. 90,4000/- along with interest @ 24% from 1.3.1988 to 22.9.1992 and thereafter at the rate of 2% per month. During the pendency of the suit the unit has been taken over by the Orissa State Financial Corporation u/s 29 of the State Financial Corporation Act. Immediately thereafter the plaintiff moved application 6oB on 11.2.1993. The said application 60B was allowed and the Orissa State Financial Corporation was added as party in the suit as defendant No. 4 on 6.12.1994.
The defendant No. 4 has filed the written statement. None appeared on behalf of defendants No. 1 to 3, and the suit proceeded ex parte against them. The suit was decreed for the recovery of Rs. 84,1270/-. The defendant No. 1 to 3 neither preferred any application for setting aside the said decree nor filed any appeal against the said judgment. The defendant No. 4 (appellant) preferred an appeal against the said judgment which as registered as Civil Appeal No. 182 of 2001. During the hearing of the appeal before the Additional District Judge, the appellant has raised the issue of limitation and has submitted that the suit was barred by limitation. The appellate court has framed the issue to the effect as to "whether the suit is time barred" on 28.4.2005 and fixed 5.5.2005 for hearing.
The plaintiff moved application 47Ga before the appellate court and has submitted that the appellate court was competent to decide the said issue but the same would take away the right of appeal of the parties as such the application 47 Ga was allowed on 18.7.2005 and the matter was sent to the trial Court for decision on issue No. 10. The trial court has decided issue No. 10 regarding limitation in negative vide order dated 22.3.2006. The appellant has filed the appeal against the said order which was registered as RM Appeal No. 28 of 2006, which was also decided along with Civil Appeal No. 182 of 2001. The Civil appeal was dismissed by the lower appellate court vide judgment and decree dated 8.8.2006. Feeling aggrieved the defendant No. 4- appellant has filed the present appeal.
The appeal was admitted on the following substantial question of law:
Whether the suit was barred by period of limitation under the provisions of Section 21 of the Limitation Act, in the light of the fact that the appellant shall made a party in the suit in the year 1994 and by that time, the suit was barred by the period of limitation.
The suit was proceeded ex parte against the defendant No. 1 to 3. Appellant- Defendant No. 4 was impleaded in the suit after impleadment application moved by the plaintiff as the defendant No. 4 Orissa State Financial Corporation has taken over the properties of defendant No. 1 M/S Manorama Chemical Works. The contention of the counsel for the appellant is that as the appellant was impleaded as party to the suit on 6.12.1994, therefore, the limitation will be counted from the date of cause of action till 6.12.1994, and as such the suit against the defendant No. 4 is barred by limitation. The goods were supplied to the defendant No. 1 on 29.7.1985 and thus cause of action having accrued on that date, the suit was filed on 29.2.1988 and thus the suit was within limitation against defendant No. 1 (respondent No. 2 in the present appeal).
The appellant-defendant No. 4 has taken over the properties of M/S Manorama Chemicals, under the State Financial Corporations Act, 1951 and thus the appellant was acting as a trustee of defendant No. 1. In that view of the matter if the suit was not barred by limitation against the defendant No. 1, (respondent No. 2) it cannot be said to be barred by time against the trustee of the defendant No. 1 (respondent No. 2).
The plaintiff has filed application 226-C before the trial Court u/s 21 of the Limitation Act, which was allowed on 5.11.2005. Thus under the proviso of Section 21(1) of the Limitation Act it will be presumed that defendant No. 4 was a party to the suit since the date of institution of the suit.
Section 21 of the Limitation Act reads as under:
Effect of substituting or adding new plaintiff or defendant. -
(1) Where after the institution of a suit, a new plaintiff or, defendant is substituted or added, the suit shall, as regards him be deemed to have been instituted when he was so made a party:
Provided that where the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.
(2) Nothing in Sub-section (1) shall apply to a case where a party is added or substituted owing to assignment or devolution of any interest during the pendency of a suit or where a plaintiff is made a defendant or a defendant is made a plaintiff.
Thus the impleadment of defendant No. 4 was made under the proviso of Section 21(1) and as such the suit against the defendant No. 4 was not barred by time. Apex Court in the case Ramalingam Chettiar Vs. P.K. Pattabiraman and Another, has observed as under:
Learned counsel for the respondent referred to the proviso to Section 21 of the Limitation Act and on the strength thereof argued that even if the application for impleadment of the State of Tamil Nadu was allowed on 11-10-1979 the said order has to be understood as if impleadment of Defendant 2 was with effect from the date of filing the suit There is no substance in the argument. Section 21 of the Limitation Act contemplates two situations - one under the substantive provision which provides that where after filing of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been brought on the day when he was added or substituted as a party in the suit. The second situation contemplated under the proviso to the substantive provision is where the court is satisfied that a new plaintiff or defendant was omitted to be added or substituted due to a mistake in good faith, the court may direct that the suit, as regards the newly-added or substituted party, shall be deemed to have been instituted on any earlier date. Thus, under the proviso, if the court is satisfied, it can direct that the suit, as regards newly-added or substituted plaintiff or defendant, shall be deemed to have been instituted on an earlier date. In such a case, the court after substituting or adding a party in the suit is required to pass a separate/further order that the suit, as regards the newly-added defendant or plaintiff, shall be deemed to have been instituted with effect from the date the suit was laid. Merely adding or substituting a plaintiff or defendant by the court is not enough. In the absence of any order that the impleadment of newly-added or substituted party shall take effect from the date of institution of a suit, the period of limitation so far as the newly-added or substituted (sic ) shall run from the date of their impleadment in the suit.
In the present case the plaintiff has moved application (paper No. 226-C) u/s 21(1) of the Limitation Act, which was allowed by the trial Court on 5.11.2005 and order has been passed that after impleadment of defendant No. 4, it shall be presumed that he has been party to the suit since the date of institution of the suit i.e. 29.2.1998. The order dated 5.11.2005 has attained finality and was never challenged.
Thus in view of above, I find that the suit against the appellant was not barred by limitation. The substantial question of law is decided in favour of the plaintiff and against the appellant.
The appeal lacks merit and is hereby dismissed with costs.