Full Text
HIGH COURT OF DELHI
Date of Decision: 17th July, 2019.
SUDIMA INTERNATIONAL PVT. LTD. ..... Plaintiff
Through: Mr. Rajiv B. Samaiyar, Adv.
Through: none.
JUDGMENT
1. Allowed, subject to just exceptions.
2. The application stands disposed of. CS(COMM) 56/2018 & IA No.1207/2018 (for condonation of 730 days delay in filing).
3. The plaintiff, claiming to be incorporated under the laws of Singapore, has instituted this suit for recovery of Rs.2,39,80,432/- from the defendant company, incorporated under the laws of India, pleading that (i) the defendant had imported three consignments of timber from the plaintiff in the month of May, 2011; (ii) all the three consignments were dispatched by the plaintiff on 26th May, 2011 and invoices for USD 127533.21, USD 150378.05 and USD 166582.36 were raised by the plaintiff on the defendant; (iii) though the defendant collected the goods shipped by the plaintiff but failed to make the payment within the due dates of 10th October, 2019:DHC:3434 2011, 26th September, 2011 and 19th October, 2011; (iv) a total amount of USD 444493.64 equivalent to Rs.2,39,80,482/- is due from the defendant to the plaintiff; (v) a legal notice dated 3rd May, 2013 was got issued by the plaintiff to the defendant; (vi) the plaintiff, in May, 2013 learnt that the defendant had filed a reference to Board for Industrial and Financial Reconstruction (BIFR); (vii) on 2nd July, 2013, the plaintiff moved an application before the BIFR, under Section 22(1) read with Section 18 of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), for permission to institute suit for recovery of Rs.2,39,80,432/- from the defendant or in the alternative for inclusion of the said claim in any scheme of rehabilitation proposed of the defendant; (viii) however on 30th September, 2014, on account of non-appearance of the counsel for the plaintiff, the said application was dismissed for non-prosecution; (ix) the plaintiff, on 3rd December, 2014 moved another application before BIFR for the same reliefs as claimed in the earlier application; (x) however the SICA was repealed on coming into force of the Insolvency and Bankruptcy Code, 2016 and on which repeal the plaintiff became entitled to file the suit; and, (xi) the period during which the reference of the defendant to BIFR was pending has to be waived off for calculating the limitation period and the suit is within time.
4. The suit was accompanied with an application under Section 15(2) of the Limitation Act, 1963, for condonation of delay of 730 days in institution thereof.
5. The suit and the application came up before this Court first on 25th January, 2018 and on 12th February, 2018, notice only of the application for condonation of delay in filing of the suit was ordered to be issued to the defendant.
6. Notice issued to the defendant remained unserved inspite of several opportunities with the reports that the premises of the defendant were found locked or of “left the premises”. Finally, vide order dated 16th October, 2018 the application of the plaintiff to serve the defendant by publication was allowed. Publication has been effected. None appears for the defendant.
7. The plaintiff, along with the plaint has inter alia filed before this Court copies of the first and second applications filed by plaintiff before the BIFR and copies of the orders dated 7th November, 2013, 30th September, 2014 and 15th February, 2014 of the BIFR.
8. The counsel for the plaintiff, in support of the application under Section 15(2), has argued (i) that the Notice of Protest dated 9th November, 2012 was issued by the plaintiff to the defendant and the limitation for filing a suit for recovery is to be counted therefrom; (ii) that the limitation for filing the suit was thus till 9th November, 2015; and, (iii) that the SICA was repealed on 1st November, 2016 and the present suit filed on 22nd November, 2017 and re-filed on 11th December, 2017, 19th December, 2017, 18th January, 2018 and 20th January, 2018, is within time as the limitation for filing the suit was up to March, 2018.
9. I am unable to understand the basis on which the counsel for the plaintiff is claiming that the cause of action for institution of this suit accrued on 9th November, 2012. The plaintiff, in paras 6,7&8 of the plaint, while referring to each of the three consignments has pleaded that the copies of invoice, Bills of exchange and letter of exchange and letter of credit were presented through Indian Overseas Bank, Cannaught Place, New Delhi; the defendant, on 27th August, 2011, 16th August, 2011 and 16th August, 2011 accepted the documents presented by the plaintiff for three consignments respectively and “collected the goods shipped by the plaintiff and undertake to give buyer credit as and when it falls due for the payment. The defendant had to make payment of the goods to the plaintiff being negotiated period. However the defendant did not make payment to the plaintiff on due date”. The plaintiff, in para 11 of the plaint, has pleaded “that as per the terms of letter of credit, the defendant had to make payment to the plaintiff company within due date as mentioned in the documents”. The plaintiff, in para 13 of the plaint, has pleaded “the due dates of the said bills were 10.10.2011, 26.09.2011 & 19.10.2011”. Finally, the cause of action paragraph 25 of the plaint is as under:-
10. The three invoices dated 26th May, 2011, against the column “Payment terms” mention “DA 70 DAYS FROM NEGOTIAION”, “DA 60 DAYS FROM NEGOTIAION” and “DA 45 DAYS FROM NEGOTIAION” respectively.
11. The plaintiff has also filed letter dated 16th August, 2011 of the defendant to the Indian Overseas Bank accepting the two invoices for USD 166582.38 and USD 150378.05 and another letter dated 27th August, 2011 accepting the documents accompanying the invoice for USD 127533.21 and assuring payment on the due dates.
12. The plaintiff has also filed before this Court copy of the Legal Notice dated 9th November, 2012 got issued by the plaintiff to the defendant and the same also states that the due dates for payment of invoice for USD 150378.08 was 10th October, 2011, the due date for payment of invoice for USD 166582.38 was 26th September, 2011 and the due date for payment of invoice for USD 127533.21 was 19th October, 2011 and all of which were unpaid, and demanding payment therefor. However in the subsequent notice dated 3rd May, 2013 got sent by the plaintiff to the defendant, the due dates for payment were described as on 10th October, 2011, 19th August, 2011 and 27th August, 2011, with respect to invoices for USD 150378.05, 166582.38 and 127533.21 respectively.
13. No explanation is forthcoming as to how limitation stated to be of three years, is being counted from 9th November, 2012.
14. The Schedule to the Limitation Act, in Article 15 thereof, for a suit for recovery of price of goods sold and delivered, to be paid for after the expiry of a fixed period of credit, prescribes the limitation of three years commencing from when the period of credit expires. Article 31 thereof, for a suit on a bill of exchange or promissory note payable at a fixed time after date, prescribes limitation of three years commencing from when the bill or note falls due. Article 32 provides limitation for a suit on a bill of exchange payable at sight, or after sight, but not at a fixed time, of three years commencing from when the bill is presented.
15. A perusal of the bills of exchange accompanying each of the three invoices, filed by the plaintiff, shows the same to be providing “At DA 70 DAYS FROM NEGOTIATION sight of this SECOND OF EXCHANGE (First of the same tenor and date being unpaid) pay to the order of INDIAN OVERSEAS BANK..........”. Such a bill of exchange would constitute a bill of exchange payable at a fixed time after date, within the meaning of Article 31 aforesaid and would not constitute “a bill of exchange payable at sight or after sight, but not at a fixed time”, within the meaning of Article 32 aforesaid. In fact Article 34 makes a provision for a suit on a bill of exchange or promissory note payable at fixed time, after sight or after demand, of three years commencing from when the fixed time expires.
16. Thus the limitation for the plaintiff to sue the defendant for recovery of price of goods sold, supplied and delivered, commenced running, not on 9th November, 2012 as argued by the counsel for the plaintiff, but on the due dates mentioned in the three bills of exchange, even if the suit were to be treated as for recovery of money on a bill of exchange, though the original bills of exchange have not even been produced by the plaintiff.
17. So computed on the basis of due dates pleaded in the plaint of 10th October, 2011, 26th September, 2011 and 19th October, 2011, the limitation of three years was till 10th October, 2014, 26th September, 2014 and 19th October, 2014.
18. Per Section 15(2) of the Limitation Act, in computing the period of limitation for any suit for which previous consent or sanction of any authority is required in accordance with the requirements of any law for the time being in force, the time required for obtaining such consent or sanction has to be excluded. The explanation thereto explains that in excluding the time, the date on which the application was made for obtaining the sanction and the date of receipt of the order of the authority shall both be counted.
19. Section 22 of SICA barred institution of any suit for recovery of money against a company whereagainst an inquiry under Section 16 thereof was pending or any scheme referred to under Section 17 thereof was under preparation, except with the consent of BIFR.
20. It is the plea of the plaintiff, that the plaintiff, in May, 2013 learnt that the defendant was before SICA. The record of the proceedings dated 7th November, 2013 of BIFR mentions the date of registration of the case of the defendant as 13th September, 2012 and the date of sickness of the defendant as 28th January, 2013.
21. The plaintiff, though has filed a photocopy of an application dated 10th June, 2013 under Section 22(1) of the SICA claimed to have been filed by the plaintiff for permission, but it is the plea of the plaintiff that the said application was filed on 2nd July, 2013 i.e. before expiry of limitation computed as aforesaid. However it is the own case of the plaintiff that the said application was dismissed on 30th September, 2014 and the plaintiff on 3rd December, 2014 moved another application. However by December, 2014, the limitation computed as aforesaid for filing the suit with respect to all the three invoices had expired. It is not the plea of the plaintiff that any application for restoration of the application filed on 2nd July, 2013 was filed. Thus the plaintiff, under Section 15(2) is not entitled to exclude the time w.e.f. 2nd July, 2013 and can only exclude the time w.e.f. 3rd December, 2014 which was subsequent to the expiry of limitation. Again, though the plaintiff has filed before this Court a photocopy of the second application claimed to have been filed along-with receipt dated 3rd December, 2014 of filing thereof and a copy of the proceedings of BIFR of 15th December, 2014 showing the said application to be pending on that date but there is no document to show that the said application was pending at any point thereafter.
22. The counsel for the plaintiff cannot also tell, what is the present status of the defendant i.e. whether any insolvency proceedings with respect thereto have been undertaken and/or whether it has been wound up. The said information could easily have been obtained by the plaintiff from the website of the Registrar of Companies concerned but has not been obtained. Therefrom also it appears that there is no likelihood of the plaintiff recovering any monies.
23. Be that as it may, as aforesaid, on the date when the second application for permission when the second application was filed before BIFR, for permission to sue the defendant, the limitation available to the plaintiff for institution of the suit for recovery of price of all the three invoices had lapsed and the question of giving the plaintiff benefit of Section 15(2) does not arise. The suit filed is thus palpably barred by time and the suit as well as the application are dismissed. No costs.
RAJIV SAHAI ENDLAW, J. JULY 17, 2019 „pp‟..