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2020 (10) TMI 596 - HC - Companies LawOwnership of shares - time limitation to claim ownership - The applicant, it appears, discovered, in and about April-June 1997 (after a gaop of about 4 years), that its name, as the shareholder of the Company, does not find mention in the annual return filed by the Company with the ROC. - whether the plaintiff could have filed a suit for declaration claiming a right in the subject 500 shares, based on the allegation that it was defrauded, given the aforementioned events? HELD THAT:- The period of limitation provided in Article 59 of the 1963 Limitation Act [which is 3 years] can commence only when the fraud was discovered in line with the provisions of Section 17 of the said Act. The expression “first become known to him” appearing in Article 59 in the context of an action filed based on a fraud employed by the defendant could only mean when the fraud was first discovered or could have been discovered by the plaintiff by employing reasonable diligence. It is important to bear in mind as to whether fraud in actuality has been committed or not can only be known after a pleading, in that behalf, is made which is tested, based on evidence led by parties - it is only when the fraud got unravelled in August-September 2010 could the material particulars as to how the fraud was employed have been pleaded as is the requirement under Order VI Rule 4 of the CPC. The date concerning the discovery of fraud is crucial as the limitation under Article 59 in line with Section 17 of the 1963 Limitation Act would commence only from that date. The argument that fraud with reasonable diligence could have been discovered earlier is untenable in the instant case as there nothing on record to demonstrate that the plaintiffs were aware of the fact that the stamps affixed on the transfer deeds produced in Court were not printed around the same time when the transfer deeds were purportedly executed. The suit is prima facie within limitation. The plaint cannot be rejected on the ground of limitation without testing the averments made in the plaint and the documents appended thereto at the trial. Whether or not the transfer deeds concerning 260 shares are genuine documents? - HELD THAT:- Section 17 of the 1963 Limitation Act [which is pari materia to Section 18 of the 1908 Limitation Act], embody the fundamental principles of justice and equity, whereby, a party should not be prevented, from taking recourse to legal proceedings, when certain facts and materials are deliberately concealed from it. The opposite party, which has acted fraudulently, should not be allowed to use the statute of limitation as a shield where fraud is employed. Therefore, to close the instant suit, at this juncture, by allowing the captioned application, would cause, to my mind, serious impediment in the examination that the Court would be called upon to conduct about the genuineness of the documents-in-issue i.e. the transfer deeds. The prayer made in the captioned application lacks merit and hence deserves to be dismissed - application dismissed.
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