TMI Blog2016 (5) TMI 1606X X X X Extracts X X X X X X X X Extracts X X X X ..... os. 1 to 4 to the plaintiff which was in fact the moneys of the counter-parties dealing on the exchange as set out in para 7 (zz) of the plaint. It is pertinent that the plaintiff in para 7 (zz) of the plaint has made categorical averments that defendant Nos. 1 to 4 in collusion with erstwhile managing director of the plaintiff and some of the managerial staff who directly reported to him, have orchestrated and played a fraud on the plaintiff and counter parties to the outstanding trades, by seeking to represent and assure that the commodities held thereunder have been duly deposited in warehouses designated by the plaintiff which representations were false to their own knowledge and which were deliberately and with an intent to defraud the plaintiff and counter parties and have thereby caused the counter-parties to part their moneys and enter into outstanding trades on the basis of such fraudulent representations and assurances and further have compounded the fraud so played by refusing an access to the designated warehouses for parties of accepting commodities that were purportedly deposited and/or taken possession thereof for the purpose of sale and realization of the amounts du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iaries of such acts. It is for these reasons, the normal role of a Director in the normal course, as canvassed on behalf of the defendant Nos. 14 and 15/Appellant would not become applicable in the facts of the present case. In considering such pleas, the facts and circumstances as borne out in the pleadings in each case are required to be considered so as to determine as to whether any cause of action is made out or otherwise before exercising power as conferred under Order 7 Rule 11(a) of C.P.C. The Appellants reliance on the decision of the Supreme Court in the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla anr) [ 2005 (9) TMI 304 - SUPREME COURT ] is in support of their submission that merely because the Appellants were Directors of Defendant No. 4 Company, there cannot be any monetary liability on the Directors and the liability would be of the company. The Supreme court observed that there is no universal rule that a Director of a company would be in-charge of its day-to-day affairs. However, the Supreme Court at the same time observed that as to what was the role of the Director of a Company is a question of fact depending on the peculiar facts in each case. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim annexed as Exhibit 'U' to the plaint and for a further relief that defendant No. 20 be ordered and decreed to pay to the plaintiff a sum of Rs. 29.20 crores along with interest at 18% p.a. from the due date of payment and/or realization thereof as per prime zone agreement dated 10 February 2013. 4. As seen from the averments made in the Plaint, the Plaintiff is a company incorporated under the Indian Companies Act, 1956 which carries on business as a Spot Exchange , providing for an electronic trading platform in spot contracts in commodities on delivery basis. The Plaintiff commenced its business operations from October, 2008. The Defendant No. 1 is a trading cum-clearing member of the Plaintiff and is inter alia trading in various commodities including paddy, for itself and on behalf of its clients. Defendant Nos. 2 and 3 are proprietary firms and are related entities of Defendant No. 1 being largely controlled by the same management and/or proprietors. Defendant No. 4 is a company incorporated under the Indian Companies Act, 1956 and is a client of defendant No. 1 and is also stated to be largely controlled by defendant No. 1. Defendant No. 5 was Director of defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bank of India-Karnal Branch details of which are set out by the Plaintiff in paragraph 6(d) of the plaint. These bank accounts would demonstrate that moneys were received by defendant No. 1 towards trades entirely executed by it on the exchange platform. 7. The case of the Plaintiff is that the defendant No. 1 was trading in paddy in Haryana and Punjab and has been executing T+2 and T+25 trades on the plaintiff's exchange. (T+2 would mean trade is concluded on T day and delivery and payment would be effected on second business day from T day by selling and buying member as the case may be and for T+25 delivery and payment would be effected on the 25th business day). These contracts were governed by Bye-laws, Rules and Regulations of the plaintiffs. The defendant No. 1 continued to execute these T+2 and T+25 contracts and ledger balance of defendant No. 1 was reconciled on day-to-day basis and all obligation reports were sent to defendant No. 1 which indicate debit and credit entries. This was never disputed by the defendant No. 1 as was being routinely followed by the plaintiff which included reconciliation of ledger balance on daily basis from 6 February 2013. 8. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as such had defaulted in payment of the installment amount. The plaintiff in accordance with the bye-laws and rules of the plaintiff took further steps to declare the defendant No. 1 and other similar trading members as defaulters. 10. The plaintiff has averred that the defendant No. 1 on behalf of itself and on behalf of its clients had admittedly entered into outstanding trades and was liable to pay the amounts that had fallen due thereunder along with interest at 18% p.a. from due dates until payment and/or realization thereof. Defendant Nos. 1 to 4 had acted upon the outstanding trades received benefits thereunder and caused the plaintiff exchange as also the various counter party investors to act in furtherance of the outstanding trades and the same are therefore, binding upon the defendant Nos. 1 to 4 and thus are estopped from disputing the liability thereunder. It is averred that Defendant Nos. 5 to 16 being directors and share holders and defendant Nos. 1 and 4 respectively were in-charge of and responsible for the affairs of defendant Nos. 1 to 4 and as such they are also liable to jointly and/or severally pay the amounts due from the defendant Nos. 1 to 4 to various c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the plaintiff exchange. The defendant Nos. 5 to 16 as Directors/shareholders are in effective control of defendant Nos. 1 to 4 and are therefore in charge of the day-to-day affairs of defendant Nos. 1 to 4. Further inquiries by Economic Offences Wing indicates that persons in-charge of defendant Nos. 1 to 4 have utilized the moneys and that with ulterior motives and are seeking to defeat the claim of the plaintiffs. It is therefore, necessary, expedient and in the public interest as well as interest of all the stake holders that the claim of the plaintiff is required to be secured by restraining the defendant Nos. 5 to 16 from dealing with, disposing of or transferring or creating any third party rights or encumbering the property in possession and in control of the consortium of banks in any manner whatsoever. 12. The defendant Nos. 5 to 16 have equally benefited from the defaults that have occurred on the exchange platform. The plaintiff states that the defendant Nos. 5 to 16 and directors of defendant Nos. 1 to 4 have also benefited from the moneys deposited in the bank accounts of the defendant Nos. 1 to 4 and that the defendant Nos. 1 to 4 are in fact simply vehicles to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble Court in accordance with prayer (f) above; m. An injunction restraining Defendant Nos. 1 to 16, their agents, representatives from dealing with, selling, transferring, alienating creating third party rights, in respect of and/or encumbering their movable/immovable properties/assets mortgaged/charged which may be disclosed as in possession and/or control of various Banks in any manner whatsoever; (p) An order appointing the Court Receiver, High Court, Bombay, with all powers under Order 40 Rule 1 of the Civil Procedure Code, of the assets of the Defendant Nos. 1 to 16 and such assets as may be disclosed and found including the power to take possession of the same and also with the power to the Court Receiver to sell the same and deposit the sale proceeds in this Hon'ble Court/make payment of the sale proceeds to the Plaintiff; r. an order appointing the Plaintiff as Agent of the receiver and permitting the Plaintiff to auction the various commodities as available in the said warehouse/property as mentioned in Exhibit AA and appropriate the amounts therefrom towards the said outstanding amount due from the Defendant Nos. 1 to 16 to the Plaintiff. s. pending h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate structure and identities of Defendant Nos. 1 to 4 for their own personal gain and are the real beneficiaries of the defaults that have occurred on the exchange platform. ... ...... 7. (zz)... ... ... The Defendant Nos. 5 to 16 are the Directors and shareholders of Defendant No. 1 and 4 respectively and are in charge of and responsible for the affairs of the Defendant No. 1 to 4, and as such, they are also liable to jointly and/or severally pay the amounts due from the Defendant Nos. 1 to 4 to the various counter-party investors under the Outstanding Trades. In any event, Defendant Nos. 1 to 4 in collusion with the erstwhile Managing Director of the Plaintiff and some of the managerial staff who directly reported to him have orchestrated and played a fraud on the Plaintiff and the counter-parties to the Outstanding Trades by seeking to represent to and assure them that the commodities sold thereunder had been duly deposited in the warehouses designated by the Plaintiff, which representations were false to their own knowledge and which were deliberately and with an intent to defraud the Plaintiff and the counter-parties, and have thereby caused the counterparties to the Outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets in their control and possession and therefore exhaust the monies and/or their assets in such manner to defeat the claim of the Plaintiff's Exchange. The Defendant Nos. 5 to 16, as Directors/Shareholders/Company Secretary, are in effective control of Defendant Nos. 1 to 4 and are therefore in charge of the day to day affairs of the Defendant Nos. 1 to 4. It is submitted that the enquiry by the EOW clearly indicates that the persons in charge of Defendant Nos. 1 to 4 have utilized the monies for their own ulterior motives thereby seeking to defeat and defraud the claim of the Plaintiff. This is clearly borne out by the fact that the EOW has recently arrested Mr. Surender Gupta, as noted above. It is submitted that in light of this fact a clear case for protection of the monies siphoned off by Defendant Nos. 1 to 4 is made out, particularly in light of the various news reports/statements made by the officers of the EOW investigating the matter. Hereto annexed and marked Exhibit BB and CC are the copies of the said newspaper articles. The Plaintiff therefore submit that it is necessary, expedient and in the interest of the public as well as in the interest of justice that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of Defendant Nos. 1 to 4. Without prejudice to the above, the Plaintiff states that the Defendant Nos. 1 to 4 are in fact simply vehicles to perpetuate the illegalities which were conceived by Defendant Nos. 5 to 16 and which illegalities were of the sole benefit of Defendant Nos. 5 to 16. 16. The Defendant Nos. 14 and 15's case is that the above averments lack credible details so as to seek a relief against defendant Nos. 14 and 15 and defendant No. 4 company. It was contended that defendant Nos. 14 and 15 are nominee Directors. A meaningful reading of the plaint would clearly reveal that the grievances of the plaintiff are principally against Defendant No. 1, the Defendant No. 4 on whose behalf Defendant No. 1 executed various trades, on the Plaintiff's exchange and Defendant No. 5 who is the Managing Director of Defendant No. 4 and Director of Defendant No. 1, and Defendant Nos. 12 and 13 who were the Directors and whole-time Director of defendant No. 4 and defendant No. 16 who is the Company Secretary of defendant No. 4 company and not against defendant Nos. 14 and 15. Defendant No. 14 contended that the plaintiff did not disclose as to how defendant No. 14 had u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the case in the plaint against Defendant Nos. 14 and 15 was of fraud and collusion and siphoning of fund. It is observed that substantial reliefs are prayed against the defendants jointly and severally to pay the Plaintiffs the amounts as claimed in the suit. As regards the contentions on the part of defendant Nos. 14 and 15 that the averments in the plaint against these Defendants including allegation of fraud are vague and not specific and have also been rejected. It is observed that there submissions are not borne out from holistic reading of the plaint. As regards immunity as claimed by Defendant No. 15 under the provisions of the International Finance Corporation (Status, Immunities and Privileges) Act, 1958, the learned Single Judge has observed that the case being of a fraud, the question of immunity as a bar under the provisions of the Act, cannot be a issue to be decided in an application under Order 7 Rule 11(a) of C.P.C. 19. On the above background, we have heard Mr. Iqbal Chagla learned senior counsel for defendant No. 14/appellant in Appeal (Lodging) No. 32 of 2015 and Dr. V.D. Tulzapurkar learned senior counsel for defendant No. 15 in Appeal (Lodging) No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi) 89 ; Bishundeo Narain Anr. v. Seogeni Rai Ors. (AIR 38 1951 Supreme Court 280); Liverpool London S.P. 1 v. M.V. Sea Success Land Anr. (2004)9 SCC 512. 21. On the other hand on behalf of Respondent No. 1/plaintiff Dr. Saraf would submit: (i) that the contentions as urged on behalf of the appellants are wholly misconceived as the plaint is required to be read as a whole which makes it clear that the defendant Nos. 14 and 15 are necessary parties in the light of the claim as made out in the suit. (ii) Plaintiffs have clearly set out particulars of fraud. All assertions of the plaintiff against the defendants including the appellants can be proved in the suit. (iii) Plaintiffs have clearly averred in the plaint as regards the breach of trust and that the appellants were responsible for the day-to-day affairs as directors of defendant No. 4. (iv) Plaintiffs have clearly averred that appellants are the beneficiaries of fraud and thus the reliefs in respect of the property are categorically prayed for in the suit. (v) Defendant Nos. 14 and 15 submitting that being nominee Directors they have no liability, cannot be accepted as though nominal directors, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the torts. This is clear from several averments of connivance between the defendants and the joint and several liability arising for payment as claimed by the Plaintiff's in making the suit claim. 24. In the context of these issues, the provisions of Order 1 of the Code of Civil Procedure, 1908 need to be noted which pertains to parties to a suit. Order I Rule 3 is as regards who may be joined as defendant and reads thus: 3. Who may be joined as defendants - All persons may be joined in one suit as defendant where a) any right to relief in respect of, or arising out of the same act or transaction or series of acts or transactions is alleged to exist against such persons whether jointly, severally or in the alternative and b) if separate suits were brought against such persons any common question of law or fact would arise. Order I Rule 3 makes it clear that when a right to relief arises out of same act or transaction or series of acts or transactions which the plaintiff would allege to a extent against such persons whether jointly or severally then such persons can be joined as defendants in one suit. This position is made explicit from sub-rule (b) whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contend that plaint is liable to be rejected qua these defendants as it does not disclose cause of action and more particularly for the reason that there are no material particulars in the plaint to show any connivance, collusion, fraud as alleged to be committed by these defendants as regards the transactions of Defendant No. 1 on the plaintiffs exchange. In this regard learned Senior Counsel for the appellants urge that under the provisions of Order 6 Rule 4, it is an obligation on the plaintiff to give particulars of fraud when a case of fraud and breach of trust is pleaded in the plaint. It is submitted that these can be the averments against the defendant No. 1 or for that matter against the defendant No. 4 but it can never be a case against these defendants who were the nominee Directors of defendant No. 4. 27. In this context, learned Senior Counsel for the appellants have drawn our attention to averments in the plaint to submit that these are sweeping averments sans particulars. The approach of the Court when confronted with the issues as raised on behalf of the appellants would be to consider as to whether any cause of action arises against defendant Nos. 14 and defenda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agerial staff who directly reported to him, have orchestrated and played a fraud on the plaintiff and counter parties to the outstanding trades, by seeking to represent and assure that the commodities held thereunder have been duly deposited in warehouses designated by the plaintiff which representations were false to their own knowledge and which were deliberately and with an intent to defraud the plaintiff and counter parties and have thereby caused the counter-parties to part their moneys and enter into outstanding trades on the basis of such fraudulent representations and assurances and further have compounded the fraud so played by refusing an access to the designated warehouses for parties of accepting commodities that were purportedly deposited and/or taken possession thereof for the purpose of sale and realization of the amounts due from defendant Nos. 1 to 4 under outstanding trades. It is categorically averred that defendant Nos. 1 to 4 have acted upon these outstanding trades received benefits thereunder and that defendant Nos. 1 to 4 are estopped from disputing the same and/or its liability thereunder. It is further averred that defendant Nos. 5 to 16 are directors and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and/or are seeking to defeat and defraud the claim of the plaintiffs. This was borne out by the fact that the Economic Offences wing had arrested Mr. Surendra Gupta Managing Director of defendant No. 1. 30. Thereafter, in para 15 of the plaint, the plaintiff have averred that defendant Nos. 5 to 16 have clearly benefited from the defaults that have occurred on the exchange platform and that defendant Nos. 5 to 16 as shareholders and directors of defendant Nos. 1 to 4 have benefited from the moneys deposited in the bank accounts of defendant Nos. 1 to 4. and that defendant Nos. 1 to 4 were in fact simply vehicles to perpetuate the illegalities which were conceived by defendant No. 5 which illegality was for the sole benefit of defendant Nos. 5 to 15. Accordingly on this factual background, the plaintiffs have prayed for reliefs in prayer clauses (a), (c), (f), (h), (m), (n), (p), (r) and (s) against defendant Nos. 14 and 15/appellants. 31. From the reading of the plaint, thus it is borne out that although a contract was between the plaintiff and defendant No. 1, defendant Nos. 2 to 4 had also a role to play in the transactions being related companies of defendant No. 1. The de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plaintiff. The case of the plaintiff that these acts of defendants committing fraud on the plaintiff's exchange could not have occurred without the knowledge and active participation of the defendants. 32. The case of the plaintiff is also that the amounts siphoned by defendant Nos. 1 to 4 again by playing fraud on the plaintiff has been deposited in the bank account of the defendant Nos. 1 to 4 and defendant No. 5 to 16 Directors and shareholders of defendant Nos. 1 to 4. It is the case of the plaintiff that in fact defendant Nos. 1 to 4 are simply vehicles to perpetuate illegalities conceived at the hands of defendant Nos. 5 to 16. It is thus, the case of the plaintiff that defendant Nos. 1 to 4 along with defendant Nos. 5 to 16 are responsible for large-scale illegalities and thus defendant Nos. 14 and 15 become necessary parties to the suit. It is clearly the plaintiff's case that defendant Nos. 5 to 16 (includes Appellants) have utilised the corporate structure and identity of defendant Nos. 1 to 4 for their own personal gains and are real beneficiaries of the defaults that have been committed on the Plaintiff's exchange platform. 33. We thus see much sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 4. An averment is made that in fact they were responsible for the day-to-day affairs of the management of defendant No. 4. Further, there is an averment in the plaint that these directors are the beneficiaries of the illegalities and fraud which is perpetuated by defendant No. 4 as also they are beneficiaries of the amounts which in fact are amounts entitled and liable to be paid to the plaintiff. We do not see as to how these averments are not sufficient to satisfy the requirement of Order 6 Rule 4 of the C.P.C. Secondly, such submissions on behalf of Defendant Nos. 14 and 15 also cannot be accepted as these submissions overlook a holistic reading of the plaint. If a holistic reading of the plaint makes out a case of fraud, siphoning of funds and such an activity is undertaken by a corporate entity like the defendant No. 4, then surely, it cannot be said that defendants and defendant Nos. 14 and 15 had no concern whatsoever for their lack of specific role and the plaint cannot be rejected for want of cause of action. 35. If we consider the statements as made in the plaint as a whole which we have noted above, it certainly demonstrates a case of fraud of a large magnitude. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention can never be a ground for rejecting the plaint and/or striking name of the defendant Nos. 14 and 15 as it can never be an absolute proposition that there can never be any action whatsoever against nominee Directors or even if Directors have played a fraud. The averments in the plaint in that regard cannot be overlooked which are of collusion/siphoning of moneys and fraud and the defendant's directors being the beneficiaries of these moneys which were liable to be paid to the plaintiffs. Reliance on behalf of the appellants on the decision of the Delhi High Court in the case of Omprakash Khetan v. Shree Keshaviya Investment Ltd., (1978 Vol.48 Company Cases 85 ) , therefore, is completely misconceived as it was not a case under Order 7 Rule 11 of the C.P.C., but it was a case under section 633 of the Companies Act which requires factual inquiry in the conduct of the Directors so as to ascertain whether the Directors have acted honestly and reasonably. This requirement under the Companies Act is quite different from the scope of the inquiry under Order 7 Rule 11 or Order 1 Rule 4 of the C.P.C. The learned single Judge has rightly rejected the contention of the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract entered by the Plaintiff with Defendant No. 1 which has given rise to the cause of action for the suit but something which is beyond the contract and involving actions of Defendant Nos. 2 to 16 which are all interconnected. The plaint pleads of a large scale and well thought-out design to cause losses to the Plaintiffs in the extensive manner as set out in the plaint. Further, the distinctive feature is that this money which is being claimed by the Plaintiff is the money which are the claims and entitlement of the other members on the exchange for whose benefit the transactions came to be entered at the Plaintiffs' exchange. The plaintiff owed an obligation to these members and their legitimate entitlement to have the goods traded on the plaintiff's exchange which except for the breach of the obligation and by a systematic mechanism of a fraud as practiced on behalf of the defendant and pleaded by the plaintiff could not be discharged. The Plaintiff was the trustee of the monies of the buyers and sellers at the exchange. It is in this context the plaint is required to be seen and held on its averments qua the reliefs claimed and the evidence led by the Plainti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btful or complicated question of law and fact. The endeavour of the Court would be to ascertain whether on the allegations a cause of action is shown and so long as the plaint discloses the same cause of action, and so raises a question, fit to be decided by a Judge. Order 7 Rule 11(a) of C.P.C. though would confer a power on the Court to reject a plaint on failure on the part of the Plaintiff to disclose a cause of action, but such power should not be exercised when averments made in the plaint and the documents upon which the reliance has been placed would disclose a cause of action. 42. As regards the contention as urged on behalf of defendant Nos. 14 and 15 that there is no cause of action against Defendant Nos. 14 and 15, inasmuch as this suit is based on a contract between the plaintiff and Defendant Nos. 1 and that the relief which is being sought against Defendant Nos. 14 and 15 is on tort and that such a relief cannot be claimed against Defendant Nos. 14 and 15 in a suit on the basis of a contract. This submission on behalf of the Appellants is not well founded. In our view, the suit is properly framed and there is no mis-joinder of causes of action. On a careful readin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropounded/The plaintiff would first have to institute a suit, against defendant 1 alone and establish a breach of contract. If he succeeded in so doing, he would then have to institute another suit against defendant 1 and the added defendants and again establish, first, the breach of the contract because the other defendants not being parties to first suit would not be bound by any decision arrived at therein; he would also have to establish conspiracy. It may be that in the second suit the added defendants may succeed in showing that there was no breach of contract. This would lead to conflicting decision on the same issue. It is to avoid such anomalies and inconsistencies that the Code has provided that one suit is permissible. It is true that the claim against defendant 1 is based on the breach of a contractual right while the claim against the other defendants is based on the breach of a common law right, but the right to relief is available in respect of both sets of defendants because the contractual right has been infringed. If it had not been infringed no question of tort would arise. In such a case one suit against all is in my opinion permissible. This view has been taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the contract has been broken and he alleges that all the defendants have joined or conspired together in causing this breach. I can see no reason why one suit against all should not be allowed. 43. Further in this context on behalf of the Appellants the reliance on the decision in Rajkot Municipal Corporation v. Manjulaben Jayantilal Nakum Ors (1997) 9 SCC 552, would not assist Defendant Nos. 14 and 15. In this case the Respondent Manjulaben had filed a Suit, claiming damages against the Municipal Corporation on the ground that the Municipal Corporation had failed in its statutory duty to check the healthy condition of trees, as her husband had died by falling of a tree which, according to Majulaben was not maintained in a healthy condition by the Municipal Corporation. It was her claim that the statutory duty of the corporation gave rise to a tortuous liability. In this context, the Suit filed by Manjulaben was decreed by the trial Court for a sum of Rs. 45,000/-. The decree was confirmed by the Division Bench in appeal. In this context, the Supreme Court in paragraph 10 of this decision made observations that tort and contract are distinguishable. It was observed that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f C.P.C. 45. The Appellants reliance on the decision of the Supreme Court in the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla anr) (2005) 8 SCC 89 is in support of their submission that merely because the Appellants were Directors of Defendant No. 4 Company, there cannot be any monetary liability on the Directors and the liability would be of the company. The Supreme court observed that there is no universal rule that a Director of a company would be in-charge of its day-to-day affairs. However, the Supreme Court at the same time observed that as to what was the role of the Director of a Company is a question of fact depending on the peculiar facts in each case. This decision arose out of the proceedings initiated under sections 141, 138 of the Negotiable Instruments Act, 1881 and in that context, the Supreme Court had made these observations that to fasten a criminal liability a specific case should be spelt out in the complaint against the person who has sought to be made liable. Parameters of the pleadings in a criminal complaint case cannot be made applicable to the facts of the present case where the issue is under Order 7 Rule 11(a) and Order 1 Rule 10(2) of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not assist the Appellants. We are in complete agreement with the contentions as urged on behalf of the Plaintiff/Respondent No. 1 that the plaint has made out a cause of action against defendants Nos. 14 and 15. The reliance on the part of the Plaintiff on the decision of the Supreme Court in the case Sopan v. Assistant Charity Commissioner (supra) in support of the proposition that the intention of the party concerned is to be gathered primarily from its tenor and terms of the pleadings taken as a whole and no pedantic approach should be adopted to defeat justice on hair-spitting technicalities, is well founded. 49. We may thus observe that the plaint in the present case contains a statement of all the material circumstances constituting fraud. It is trite law that an application under Order 7 Rule 11 read with Order 1 Rule 10 (2) can be moved at any stage of the suit. We are not persuaded to form an opinion at this stage that the averments made in the plaint are thus not sufficient for the purpose of seeking relief as claimed in the suit against Defendant Nos. 14 and 15. It also cannot be overlooked that some facts are within the special knowledge of these defendants. Thes ..... 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