Full Text
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
INTERIM APPLICATION NO. 58 OF 2025
IN
COMMERCIAL SUIT NO. 46 OF 2015
Pfizer Limited …Applicant
In The Matter Between
Pfizer Limited ...Plaintiff
Mr. Kunal Dwarkadas alongwith Ms. Reha Parkash, Ms. Kshyama Daniel instructed by Crawford Bayley & Co., Advocate for the Plaintiff.
Mr. Anirudh Hariyani alongwith Mr. Niket Jani instructed by Jani &
Parekh, Advocate for the Defendant No.4
JUDGMENT
1. The Applicant/Plaintiff is a company incorporated under the Indian Companies Act, 1913, an existing company under the Companies Act, 1956 and 2013. The Plaintiff is a company stated to be engaged in the manufacture and marketing of pharmaceuticals and consumer healthcare products.
2. The Defendant No. 1 is a partnership firm whose services were requisitioned by the Plaintiff under the carrying and forwarding agreement dated 28th September, 2010 and the amendment thereto dated 2nd April, 2012 (the “CFA Agreement”). The Defendants No. 2 to 6 are the partners of the Defendant No. 1 firm.
3. The Applicant / Plaintiff by way of the suit is seeking a money decree against the Defendants for an amount of Rs. 8,10,19,029/together with interest on the basis that the Defendants have inter alia breached the terms of the CFA Agreement., which breaches have allegedly resulted in losses to the Plaintiff.
4. It has been submitted that, unknown to the Applicant, during the pendency of the suit, on 31st March, 2016 the Defendant No. 1 firm was dissolved, on 6th October, 2021, the Defendant No. 2 passed away, and on 17th March, 2022, the Defendant No. 6 passed away. It is the case of the Applicant that these facts were known to the Defendants who are partners of the Defendant No.1 Firm and accordingly on the occurrence of each of the said incidents, although the Defendants were obligated to inform the Court about these developments at the time of the occurrences of these incidents itself, but the same was not done.
5. That it was only on 2nd August, 2024, after a considerable delay the Defendants brought the aforesaid facts to the notice of the Court pursuant to an affidavit dated 5th August, 2024 filed by Defendant no.4 pursuant to a hearing held on 2nd August, 2024 before the Court where the Defendants were directed to file an affidavit indicating as to whether the firm was a registered partnership firm or an unregistered partnership firm, the date on which the same was dissolved and the dates on which the Defendants No. 2 and 6 had passed away.
6. This Interim Application has been filed by the Applicant/Plaintiff on 18th October, 2024 seeking to amend the Plaint in the Suit inter alia to (i) to delete the name of Defendant No. 1 partnership firm viz. Shivalik Exports Corporation, submitting that the firm has been dissolved; (ii) substitute the name of the deceased-Defendant No. 2 viz. Mr. Vinod Kumar with the name of his legal heirs viz. Mr. Harsh Kumar Gupta, Ms. Kalika Garg, Ms. Preeti Garg, Ms. Varsha Agarwal, as Defendants No. 2 (a) to 2 (d) respectively; and substitute the name of the deceased Defendant No. 6 viz. Dr. Jai Hari Har Lal, with the name of his legal heir, viz. Ms. Rachna Synghal, as Defendant No. 6(a) under Order XXII Rule 4 of the Code of Civil Procedure, 1908 (“CPC”) in addition to insertion of averments in paragraphs 3 and 15 of the Plaint and consequential amendments. It has been submitted that the Defendant No. 6 has passed away on 17th March, 2022 leaving behind one son and one daughter viz. the Defendant No.5, who is already a Defendant in the Suit and the proposed Defendant No.6(a), as his only legal heirs.
7. It is the case of the Applicant/Plaintiff that owing to the circumstances beyond the control of the Applicant, the interim application has been filed with the delay of 959 days from the date of death of Defendant No. 2 and of 797 days from the date of death of Defendant No. 6. The Applicant has also filed an additional affidavit dated 20th February, 2025 to demonstrate sufficient cause for the condonation of delay in filing the Interim Application.
8. The Defendant No. 4 had filed reply earlier on December 28, 2024 opposing the interim application to the extent that the Applicant seeks to implead proposed Defendants No. 2 (a), (b) (c) and 6(a) without first issuing a pre-impleadment notice to them and without making them party to the interim application.
9. It is to be noted that there is no objection as regards amendment of the plaint and proceedings with respect to deletion of the name of the Defendant No.1 partnership firm viz. Shivalik Exports Corporation as admittedly the said firm has been dissolved.
10. I have heard the learned Counsel at length and also considered the rival contentions. The hearing of this Application was concluded on May 5, 2025 and the order was reserved with liberty to the Counsel to place on record written submissions within a period of two weeks from re-opening. Written Submissions on behalf of the Applicant have been filed on 16th June, 2025 and on behalf of Respondent were e-filed on 17th June, 2025 and a physical copy was filed on 18th June, 2025.
11. There is no dispute that the application seeks substitution of the legal representatives of the deceased Defendants No. 2 and 6 and that the application is under Order XXII of the CPC and not under Order I Rule 10 of the CPC, where the words used are joined and added and that the court does not have power under Order I Rule 10 to substitute the heirs in legal representatives of the deceased Defendant since Order I rule 10 of the CPC and Order XXII Rule 4 of the CPC are fundamentally distinct and the two provisions deal with different eventualities and contingencies. It would therefore not be necessary for this Court to deal with the arguments and decisions submitted by the Learned Counsel for the parties relating to Order I Rule 10 of the CPC.
12. It is settled law that Order XXII rule 1 of the CPC provides that when a party to a suit passes away, the suit will not abate if the right to sue survives. The procedure for bringing on record the legal representatives of a deceased Plaintiff and a deceased defendant are provided in Rules 3 and 4 respectively of Order XXII. Sub-Rules 3 and 4 of Order XXII of the CPC stipulate that the Suit automatically abates when an application to substitute the legal representatives of a deceased party is not filed within the prescribed limitation period of 90 days from the date of death as stipulated by Article 120 of the Limitation Act 1963. In the event the Plaintiff obtains knowledge of the death of a Defendant after the aforesaid period of 90 days and the suit has already abated, the remedy available is to file an application under Sub-Rule 9 of Order XXII seeking to set-aside the abatement, the limitation period for which is stipulated in Article 121 of the Limitation Act which allows a period of 60 days to file such an application. From a reading of Articles 120 and 121 of the Limitation Act, it emerges that the total time-frame to file an application for substitution of legal heirs and to set-aside the abatement is 150 days viz. 90+60. Between the 1st and the 90th day after the death, the suit does not automatically abate; between the 91st and the hundred and 50th day after the death, the suit stands abated and the Plaintiff therefore must seek to set-aside the abatement in addition to seeking substitution. On the hundred and 51st day, however, this remedy becomes time-barred and consequently any request to set-aside the abatement must be accompanied by request under Section 5 of the Limitation Act seeking condonation of delay for filing such an application. Sub-Rule 3 of Rule 9 of Order XXII of the CPC expressly stipulates that the provisions of Section 5 of the Limitation Act shall apply to such an application under Sub-Rule 9 of Order XXII seeking to set-aside the abatement. This procedure is to be followed in order to substitute legal heirs and to set-aside abatement.
13. The Hon’ble Supreme Court has clearly highlighted this procedure in the case of Om Prakash Gupta alias Lallowa (now deceased) & Ors v. Satish Chandra (now deceased)1. Para 11 of the said decision which is relevant is usefully quoted as under: “11. Rule 1 of Order XXII, CPC provides that when a party to a suit passes away, the suit will not abate if the right to sue survives. In instances where the right to sue does survive, the procedure for bringing on record the legal representative(s) of the plaintiff/appellant and the defendant/respondent are provided in Rules 3 and 4, respectively, of Order XXII. The suit/appeal automatically abates when an application to substitute the legal representative(s) of the deceased party is not filed within the prescribed limitation period of 90 days from the date of death, as stipulated by Article 120 of the Limitation Act, Civil Appeal No. 13407 of 2024, Judgment dated 11th February 2025
1963. It could well be so that death of a defendant/respondent is not made known to the plaintiff/appellant within 90 days, being the period of limitation. Does it mean that the suit or appeal will not abate? The answer in view of the scheme of Order XXII cannot be in the negative. In the event the plaintiff/appellant derives knowledge of death immediately after the suit/appeal has abated, the remedy available is to file an application seeking setting aside of the abatement, the limitation wherefore is stipulated in Article 121 and which allows a period of 60 days. Therefore, between the 91st and the 150th day after the death, one has to file an application for setting aside the abatement. On the 151st day, this remedy becomes time-barred; consequently, any application seeking to set aside the abatement must then be accompanied by a request contained in an application for condonation of delay under Section 5 of the Limitation Act in filing the application for setting aside the abatement. Thus, the total time-frame for filing an application for substitution and for setting aside abatement, as outlined in Articles 120 and 121 of the Limitation Act, is 150 (90 + 60) days. The question of condonation of delay, through an application under Section 5 of the Limitation Act, arises only after this period and not on the 91st day when the suit/appeal abates. From our limited experience on the bench of this Court, we have found it somewhat of a frequent occurrence that after abatement of the suit and after the 150th day of death, an application is filed for condonation of delay in filing the application for substitution but not an application seeking condonation of delay in filing the application for setting aside the abatement. The proper sequence to be followed, therefore, is an application for substitution within 90 days of death and if not filed, to file an application for setting aside the abatement within 60 days and if that too is not filed, to file the requisite applications for substitution and setting aside the abatement with an accompanying application for condonation of delay in filing the latter application, i.e., the application for setting aside the abatement. Once the court is satisfied that sufficient cause prevented the plaintiff/appellant from applying for setting aside the abatement within the period of limitation and orders accordingly, comes the question of setting the abatement. That happens as a matter of course and following the order for substitution of the deceased defendant/respondent, the suit/appeal regains its earlier position and would proceed for a trial/hearing on merits. Be that as it may.”
14. Mr. Hariani, learned Counsel has fairly submitted that a simple prayer for bringing legal representatives on record without specifically praying for setting aside of an abatement may in substance be construed as a prayer for setting aside abatement and that this Application be construed as one also seeking to set aside the abatement of the Suit in so far as, the Defendants No.2 and 6 are concerned. Mr. Hariani refers to the decision of the Hon’ble Supreme Court in the case of Mithailal Dalsangar Singh V. Annhabai Devram Kini[2].
15. However, Mr. Hariani submits that an application to set-aside the abatement cannot be allowed as a matter of right or in a routine manner and the legal representatives are permitted to challenge the reasons given by the Applicant for setting aside the abatement/condone the delay in filing the interim application as a valuable right has been secured on the abatement of the Suit. Learned Counsel submits that when a suit or appeal abates a very valuable right accrues to the other party and such a right is not to be ignored or interfered with lightly. Mr. Hariani, has relied upon the decision of the Hon’ble Supreme Court in the case of Union of India v. Ram Charan[3] as well as upon the decisions of the Hon’ble Supreme Court in the cases of Bhagwan Swaroop and Others v. Mool Chand and Others[4], Balwant Singh (dead) v. Jagdish Singh and Others[5] as well as the decision of the Hon’ble Supreme Court in the case of Perumon Bhagvathy Devoswom v. Bhargavi Amma (Dead) by LR’s and Others[6] in support.
16. Mr. Hariani, would submit that therefore an application to setaside abatement of the suit and condone the delay and substitute the legal representatives is not to be allowed mechanically or in a routine manner. Mr. Hariani, has submitted that when the Plaintiff is seeking condonation of delay of 959 days and 797 respectively it has to make out sufficient cause for condoning the delay in filing the interim application. That the question of sufficient cause may be gone into only in the presence of the party who will be affected by the same; and in this case the legal representatives of the deceased Defendants No. 2 and 6 are the affected parties. Learned Counsel therefore submits that AIR 1964 SC 215 the proposed legal representative are entitled to be given notice of an application to set-aside the abatement and to bring such legal representatives on record so that he/she can oppose such application.
17. Mr. Dwarkadas, learned Counsel for the Applicant-Plaintiff on the other hand would submit that the delay of 959 days from the death of Defendant No.2 and of 797 days from the date of death of Defendant No. 6 (which learned Counsel submits has been calculated while omitting the applicable statutory limitation period of 150 days) is entirely beyond the control of the Applicant. Mr. Dwarkadas has submitted that under Order XXII Sub Rule 2 of Rule 4 any person made a party following the procedure under Order XXII may make any defense appropriate to his character as legal representative. Mr. Dwarkadas has submitted that therefore, no pre-impleadment notice is required in the case of substitution of legal heirs. Learned Counsel has also submitted that no separate application is required for setting aside of abatement or for condonation of delay under Order XXII Rule 4 of the CPC or Section 5 of the Limitation Act. Mr. Dwarkadas has also submitted that even if the application for substitution of legal heirs is not happily worded, such as if prayer to condone the delay is not found in the prayer clause the same is only technicality and a liberal and meaningful construction and interpretation must be given to such averments. Mr. Dwarkadas would submit that the Applicant has filed an Additional Affidavit dated February 20, 2025 which places on record the facts and circumstances demonstrating the sufficient cause for condonation of delay.
18. However, since Mr.Hariani, learned Counsel has fairly submitted that even if there is no prayer for setting aside the abatement the present Application inter alia seeking to bring legal heirs of the deceased defendants No.2 and 6 can be construed as one also seeking to set aside the abatement, in view of the decision of the Hon’ble Supreme Court in the case of Mithailal Dalsangar Singh V. Annhabai Devram Kini (supra), this Court is of the view that it would not be necessary to add to the submissions made by Mr.Dwarkadas. However, paragraph 8 of the said decision is usefully quoted as under: “8. Inasmuch as the abatement results in denial of hearing on the merits of the case, the provision of abatement has to be construed strictly. On the other hand, the prayer for setting aside an abatement and the dismissal consequent upon an abatement, have to be considered liberally. A simple payer for bringing the legal representatives on record without specifically praying for setting aside of an abatement may in substance be construed as a prayer for setting aside the abatement. So also a prayer for setting aside abatement as regard one of the plaintiffs can be construed as a prayer for setting aside the abatement of the suit in its entirety. Abatement of suit for failure to move an application for bringing the legal representatives on record within the prescribed period of limitation is automatic and a specific order dismissing the suit as abated is not called for. Once the suit has abated as a matter of law, though there may not have been passed on record a specific order dismissing the suit as abated, yet the legal representatives proposing to be brought on record or any other applicant proposing to bring the legal representatives of the deceased party on record would seek the setting aside of an abatement. A prayer for bringing the legal representatives on record, if allowed, would have the effect of setting aside the abatement as the relief of setting aside abatement though not asked for in so many words is in effect being actually asked for and is necessarily implied. Too technical or pedantic an approach in such cases is not called for.”
19. It has been submitted on behalf of the Applicant that in the facts of this case, in view of the cause of action and the case set out in the Plaint, the right to sue the original Defendants No. 2 and 6 has survived against not only the remaining original Defendants but also against the heirs of the original Defendants No. 2 and 6, who were admittedly the erstwhile partners of the original Defendant No. 1 partnership firm at the relevant time.
20. Admittedly, there has been a delay of 959 days from the date of death of the Defendant no.2 and 797 days from the date of death of the Defendant no.6 and even if the calculation of the number of days has omitted the applicable statutory limitation of 150 days, there has been, in the facts of this case, a delay of more than 150 days in preferring the Interim Application for bringing the legal heirs of the said deceased Defendant on record or rather substituting them in place and stead of the said Defendants. As regards the said Defendants no.2 and 6, the Suit has abated, and therefore, the abatement would have to be set aside. However, since the period of 150 days has elapsed, as discussed above, unless the delay is condoned, the abatement cannot be set aside.
21. However, though the Applicant has sought to make out a case for sufficient cause for the delay, it is pertinent to note that the Applicant has not even notified the proposed Defendants of this Interim Application. The Hon'ble Supreme Court in the case of Bhagwan Swaroop and Others vs. Mool Chand and Others (supra) has observed that when a Suit or an Appeal abates, a very valuable right accrues to the other party and such a right is not to be ignored or interfered with lightly in the name of doing substantial justice to the party, as depriving a party of a lawful right created in the interest of administration of justice in the absence of good grounds results in injustice to the party concerned. That, for doing justice to the parties, the Courts have consistently held that whenever sufficient cause is shown by a party at default in making an application for substitution, abatement will have to be set aside as the good cause shown for explaining the delay in making the application is sufficient justification to deprive the other party of the right that may accrue to the other party as a result of the abatement of the Suit or appeal. Paragraph 15 of the decision is usefully quoted as under:
22. In this connection, it is also pertinent to refer to the decision of a Single Judge of this Court at Nagpur in the case of Kanis Fatima and Another vs. Mohd. Habib and Another[7] where this Court had observed that in a case where a Suit has abated, without notice to the parties, who are sought to be impleaded as legal representatives under Order XXII of the CPC and who have a legal right to object and for hearing, the said legal representatives cannot be impleaded without issuance of notice as want of notice in such proceedings goes to the root of the matter.
23. In this view of the matter, without notifying the legal heirs / representatives of the deceased Defendants / proposed Defendants of the Interim Application seeking to substitute them as Defendants, neither the submissions made by Mr. Dwarkadas on there being sufficient cause can be considered at this stage, nor the abatement in my view, can be set aside. AIR 1976 Bom 303
24. Mr. Dwarkadas has also submitted that under Order XXII Sub Rule 2 of Rule 4 any person made a party following the procedure under Order XXII may make any defense appropriate to his character as legal representative. It is true that under Order XXII Sub Rule 2 of Rule 4 any person made a party following the procedure under Order XXII gets the opportunity for filing of a written statement, but in the present case as the Suit has abated, that facility in my view is not available as a valuable right has accrued in favour of the legal heirs/representatives as held above and therefore, the decisions relied upon by Mr.Dwarkadas, learned Counsel in support of his contention that preimpleadment notice would not be necessary, would be of no assistance as the legal heirs/representatives to be brought on record would have to be heard on sufficient cause.
25. In view of the above discussion, the following order is passed: ORDER
(i) In the cause title of the Suit the name of the Defendant no.1 be deleted and consequential amendments be carried out within a period of two weeks.
(ii) As regards the amendment to delete the Defendant no.2 viz. Mr.
Vinod Kumar and to add in his place the legal heirs mentioned in paragraph 2 of the schedule of the application as well as to delete the name of the Defendant no.6 viz. Dr.Jai Hari Har Lal and to add in his place the legal heirs mentioned in paragraph 3 of the schedule and the consequential amendments as sought for, let within a period of four weeks, notice of this application along with certified true copy of the application along with complete set of pleadings be served upon the proposed Defendants as contained in paragraphs 2 and 3 of the schedule and an appropriate affidavit of service be filed.
(iii) The proposed Defendants are at liberty to file reply within a period of two weeks after receipt of the notice along with the true copy of the Interim Application. Rejoinder, if any, in two weeks thereafter.
(iv) List the Interim Application on 10th September 2025.