Beruflich Dokumente
Kultur Dokumente
Ltd Limited
& Anr.
CASE NAME - DCM International Limited & Anr. V. M/s Wonder Wear Pvt. Ltd Limited &
Anr.
[CS (OS) 1193 -1999]
Table of Contents
FROM PLAINTIFF SIDE...................................................................5
I. BRIEF OF PLEADINGS..................................................................5
GENERAL DETAILS:...............................................................................5
FACTS OF THE CASE:............................................................................6
LIMITATION PERIOD..............................................................................8
VALUATION OF SUIT FOR THE PURPOSE OF COURT FEES.........................9
JURISDICTION......................................................................................9
PRAYER...............................................................................................9
Claims made by the Plaintiffs...............................................................................9
The present suit was filed for recovery of Rs. 2,65,76,439/- in the High Court at
New Delhi on the 25th of May 1999 which asked for an ad-interim order against
the defendants.
The suit prayed for an ex-party ad-interim order restraining the defendants from
selling, transferring or alienating/parting with possession of properties.
Incorporation of the Company:
Both the companies were duly incorporated under the Indian Companies Act,
incorporation.
Both the companies forming Plaintiffs combined together in filling this suit as
by defendants No. 2 on behalf of the defendant no. 1 via letter dated 12.02.1996.
PLAINTIFF NO. 1- The suit was filed through the Company Secretrary and
Principal Officer who had been authorised to institute a suit, verify and file the
plaint, affidavits and all other interim applications by the Board of Directors via a
Plaintiffs: The second Plaintiff was engaged in the business of leasing anf
giving on hire-purchase various equipments and in extending inter-corporate
loans and finances. The first Plaintiff was engaged in International Trade and
Investments.
Defendants: The first defendant used to operate its business of export through
the second defendant. Both defendants combined together for procuring
business from abroad and for procuring finances to execute the overseas
orders.
Negotiations for financing the export commitments of the Defendant No. 1
commenced when the written proposal in the form of The financing of export
turnover to M/s Wonder Wear Private Limited, was received by the
Defendant no. 2 from the Plaintiff no. 2 via a Letter dated 12.02.1996.
They came to an arrangement that Plaintiff no. 1 would finance the export by
60% of the export value together with 12.5% of duty draw back amount as and
order. The terms were to be strictly complied with by the defendant No. 1.
The memorandum of understanding was executed between the Plaintiff no. 1
and Defendant no. 1 on 16.02.1996. The memorandum of understanding
the total value and the balance was to be passed to Defendant No.1.
According to the terms and the conditions the Plaintiff no. 1 was entitled to
receive the export proceeds to the extent of 60% of the letter credit value along
with the 4% of the Export turnover. Additionally the 4% of the 12.5% duty
1,38,21,145.
The contract as whole is evidenced by the documents exchanged between
parties.
The defendants could not repay the full amount and hence they acknowledged
the liability amount along with the interest which is Rs. 1,31,14,457.82 along
with the interest levied of 2% per month with effect from 01.09.1996.
The amount to be paid is Rs. 2,65,67,439, jointly and severally by the
defendants.
The Plaintiffs are to be paid from the defendants who are not in good financial
shape. The Plaintiff has a business of financing, leasing and commercial
companies. They deal in international Trade and Investments hence have
LIMITATION PERIOD
Cause of action arose on these events
Firstly, on multiple occassions when the defendant no. 1 took to repay the Plaintiff the
agreement.
The cause of action still subsisted and is continued when was filed.
Hence, suit was within time period.
Valuation of suit has been assessed at Rs. 2,65,67,439 (Two crore sisty five lakhs sixty
seven thousand four hundred thirty nine), so this suit is maintable before Honblre
Decree of recovery for the amount with interest on the princiapal against the
defendants.
Charge an interest per month along with recovery of the decreed amount.
Permanent injunction on alientaion, selling or otherwise against the defendants.
Costs of suit is claimed.
APPLICATION
NO.
5689/1999,
ON
25.05.1999
The plaintiffs prayed from Honble court to pass an ad-interim injunction in favour of
the plaintiffs and against the defendants from thereby restraining the defendants from
(1)from Selling/Transferring/Parting with possession of Assets, (2) from carrying
business operations/ alternatively furnish details of complete business transactions
institutions.
This application was followed by an affidavit as a proof of what has been stated in the
application above, under the seal of the oath commissioner, High Court of Delhi (as
per section 139, CODE OF CIVIL PROCEDURE 1908).
the court had not ordered for the same on the previous hearing.
Under the inherent powers of the court the application was filed for a condonation of
delay. In fact, section 151 was invoked repeatedly.
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be served.
According to the reports of the process-serving agency the defendant kept out of the
statement whereas the court had to proceed ex-parte in case of first defendant.
The defendants have not appeared even to assist the court.
The court decreed for winding up of the company and appointment of official
liquidator.
The court grants an ex parte decree of recovery of suit amount in favor of the plaintiff.
This application was followed by an affidavit as a proof of what has been stated in the
application above, under the seal of the oath commissioner, High Court of Delhi (as
per section 139, CODE OF CIVIL PROCEDURE 1908).
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ON 03.08.2007.
The application was filed as a response to the application of the defendant to strike
parties in the suit as it is the proper party for the suit of recovery.
The second defendants were not only a medium or a channel of conversation. They
were in constant touch with plaintiff no. 2. It was acting as an agent to defendant no.
1. Thus the liability of the agent exists with the liability of the principal.
TO
THE
REPLY FILED
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BY THE
RESPONDENTS/
DATED
27.05.1999-
The court ordered for issue of summons in the suit to the defendants by (1) ordinary
process (2) by registered post.
ORDER: II DATED 12.07.1999
The summons to defendant remains un-served. The court ordered for issue of fresh
notice for service of summons to the defendant again by (1) ordinary process (2) by
registered post. The court asked for process fee and registration covers to be filed
within 5 days from that date.
The court also passes an order of restriction from selling, transferring or alienating
and parting with the possession of any of its assets up to the next date of hearing.
The reply for defendants statement was to be filed within 8 weeks by order of the
court.
The court also gave four weeks time for moving a fresh application for substituted
service of summons to Defendant no. 1.
The court also gave four weeks time for moving a fresh application for substituted
service of summons to Defendant no. 1.
Mentioned that the defendant no. 2 had already filed the written statement.
ORDER: V DATED 22.11.1999
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The court shall furnish the address to the registry along with the required process fee
for issue of notice and summons to the defendant no. 1 on his last address mentioned
in the plaint.
The court shall furnish the address to the registry along with the required process fee
for issue of notice and summons to the defendant no. 1 on his last address mentioned
in the plaint.
ORDER: VIII DATED 17.8.2000
The court allowed the plaintiff to serve the defendant through newspaper considering
the previous two services failed.
The court asked for a Dasti for publication named Priyavani to be given to the
counsel for Plaintiff.
ORDER: IX DATED 1.11.2000
The court said that the defendant be served summons in Statesman as Priyavani is
no newspaper.
The court allowed the plaintiff to serve the defendant through newspaper considering
the previous two services failed.
The interlocutory application is filed for in terms of previous order of the court. The
plaintiff could not get the publication in times hence must get it done next time.
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The notice on the Defendant No. 1 had been served but still there was not one that had
appeared for the Defendant.
The notice on the Defendant No. 1 had been served but still there was not one that had
appeared for the Defendant.
Thus the court had decided to precede ex-parte as the defendant still did not appear.
No documents had been submitted for admission and denial by any of the parties.
The court mentioned that the stage for admission and denial is complete.
The court granted another four weeks for filing the documents for filling the
replication.
The court has fixed the next date for admission and denial of the documents.
ORDER: XVII DATED 18.07.2002
The replication to the written statement of the Defendant No. 2 was not filed.
ORDER: XVIII DATED 14.01.2003
The court gave last opportunity for filing a replication in the next four weeks.
The court also gave last opportunity to file original documents within four weeks.
The court instructed the parties to remain present for the purpose of admission and
denial.
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The court gave last opportunity for filing a replication in the next four weeks.
The court also gave last opportunity to file original documents within eight weeks.
The court instructed the parties to remain present for the purpose of admission and
denial.
ORDER: XX DATED 16.09.2003
The court valued the suit for the purpose of pecuniary jurisdiction at the value more
than Rs. 20 lakhs. The replication was sough to be filed within the next four weeks as
the last opportunity given by the court.
The court also gave last opportunity to file original documents within four weeks.
The court instructed the parties to remain present for the purpose of admission and
denial.
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ISSUE OF LIMITATION
Section 22 of limitation act1 says that In the case of a continuing breach of contract
or in the case of a continuing tort, a fresh period of limitation begins to run at every
moment of the time during which the breach or the tort, as the case may be, continues.
As sated earlier this suit is not barred because cause of action still subsists and is
continuing. As per Entry 40 to the First Schedule of the Limitations Act of 1963,
the period of limitation to file a suit extends to three years in case a bill of exchange
by the payer in favour of the payee is dishonoured. Also as per Section 2(c) of the Act
of 1963 a bill of exchange includes a letter of credit.
ISSUE OF JURISDICTION
Valuation of suit is assessed at Rs. 2,65,76,439/- Crore, so this suit maintainable
before Honble Delhi High court, because above 20 lacks matters, are heard by
Honble High Court in Delhi. It is also according to Section 16 of CODE OF CIVIL
PROCEDURE 1908 because cause of action has arisen in Delhi only. Since as per
Section 5 of the Delhi High Court Act of 1966, matters above 5 lacks, prior to 2003
fell within the original civil jurisdiction of the High Court and the present suit was
filed in 1999. It should however be noted that because of the amendment brought to
the Delhi High Court Act of 1966 in 2015, at present the civil jurisdiction of the High
Court on the Original side stands at Rs. 2 Crore.
Also as per Section 20 (c) of the Code of Civil Procedure, 1908 suit shall be
instituted in a court within the local jurisdiction of which the cause of action, wholly
Section 22, The Limitation Act, 1963, Continuing breaches and torts: In the case of a continuing
breach of contract or in the case of a continuing tort, a fresh period of limitation begins to run at
every moment of the time during which the breach or the tort, as the case may be, continues.
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or in part arises. In the present case the transaction had happened at New Delhi and
thus the High Court had the jurisdiction.
Also, as per Section 16 of the Code of Civil Procedure, 1908 clearly states that the
suits regarding immovable property are to be instituted in the court within whose local
jurisdiction the property is situated. The proviso to section 16, however, provides that
where a suit to obtain relief in respect of immovable property can be entirely obtained
through the personal obedience of the defendant, the suit may be instituted either
within the local limits of the court where the property is situate or in the court within
whose jurisdiction the defendant actually and voluntarily resides, or carries on
business, or personally works for gain.
COURT FEE
Section 3 of the Court Fees Act of 1870 provides for the court fees that are to be paid
when a suit is filed on the original side of the High Court. In the present case the court
fee of Rs. Rs.200 was calculated on the basis of the same.
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SECTIONS
Section 94 Supplemental proceedings: The Honble Court has used Section 94,
which talks about Supplemental Proceedings. It says that in order to prevent the ends
of justice from being, defeated the Court has powers:- (c) To grant a temporary
injunction and in case of disobedience commit the person guilty thereof to the civil
prison and order that his property be attached and sold;
(e) To make such other interlocutory orders as may appear to the Court to be just and
convenient. So in this case while using these powers ad interim and other
interlocutory order granted.
Section 151 - Saving of inherent powers of Court: In this case, court used Section
151 many times like in case of granting injunction etc for the ends of justice or to
prevent abuse of the process of the Court. Section 151 states that nothing in the Civil
Procedure Code will limit the inherent powers of the court from making orders
necessary for meeting the ends of justice or to prevent abuse of the process of the
court. The first application, by the defendants, has been under section 151, CODE OF
CIVIL PROCEDURE 1908, asking the court to condone the delay in filing of the
written statement. In my opinion, the court has rightly condoned the delay under
section 151 by exercising its inherent power, because otherwise it would have
affected the ends of justice and rights of parties to the suit.
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ORDERS
Order III: RECOGNISED AGENTS AND PLEADERS
Order 5 rule 1 - Summons: After a duly institution of a suit, a summons was issued
to the defendant to appear and answer the claim and to file the written statement of
adequate time to serve upon the summons but the summons could not be delivered.
Order 5 Rule 9A - Summons given to platiff for service: The court may give
summons to the plaintiff to give the defendant a notice in person but in this case
when the defendant was to be served he could not be as he was not available at his
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newspaper. The newspaper shall be a daily newspaper assuming which the defendant
might have access to as if in the latest scenario. The court in the current case ordered
for last resort, that is asked the parties to get an advertisement out in the newspaper.
The parties could not manage it immediately and kept delaying it. The court asked for
a Dasti to be served when the advertisement as summons had been published in the
newspaper.
includes plaint.
Order 6 Rule 2- Pleading to state material facts and not evidence: Pleading
included a statement in a concise form of the material facts on which the plaintiffs
pleading relied and did not include evidence, so they have followed this rule.
Pleading was divided into paragraphs, numbered consecutively, each allegation
being, so far as is convenient, contained in a separate paragraph. Dates, sums and
followed properly.
Order 6 rule 6 - Condition precedent: There was precedent condition on behalf of
plaintiffs that there must be no delay in the delivery. So it was not mentioned.
Order 6 Rule 9 - Effect of document to be stated: It says that wherever the
contents of any document are material, it shall be sufficient in any pleading to state
the effect thereof as briefly as possible, without setting out the whole or any part
thereof, unless the precise words of the document or any part thereof are material.
his pleader.
Order 6 Rule 15- Verification of pleadings: It was verified by the party at the
footby their own knowledge and their own information received and believed to be
true. The verification was signed by the person making it and stated the date on
which and the place at which it was signed. Plaintiff also verified the pleading while
furnishing an affidavit in support of his pleadings. Also, to mention here that as per
Section 26(2) of the Code of Civil Procedure, the requirement is that in every plaint
facts shall be proved by affidavit. Thus we can see that after the plaint there is an
affidavit, wherein the plaintiff affirms and declares that he is well conversant with the
facts as stated in the plaint, that the suit has been drafted by the counsel under the
instructions of the plaintiff, and have been read over to him. Further as per Order VI
Rule 15, the person verifying the pleadings should also submit an affidavit along with
it, and thus we can see in the present case thereafter there is an affidavit. Also, as per
sub rule 3 of this order requires that the person verifying should state the date and the
place at which it was signed. In the present case we see the plaintiff mentions the date
and the place in his verification in these terms verified in Delhi on this Xth Day of
January
Order 6 Rule 17 - Amendment of pleadings: It says that the Court may at any stage
of the proceedings allow either party to alter or amend his pleadings in such manner
and on such terms as may be just, and all such amendments shall be made as may be
necessary for the purpose of determining the real questions in controversy between
the parties, Provided that no application for amendment shall be allowed after the
trial has commenced, unless the Court comes to the conclusion that is spite of due
diligence, the party could not have raised the matter before the commencement of
trial. But in this case the pleadings were not amended.
Order 7 rule 1 - Particulars to be contained in plaint: It says that the plaint shall
contain the following particulars:-22
usually as only the plaintiff was available most of the times, thus the court had to
on account of failure to pay charges for the service of notice to the defendant.
Order 9 Rule 5 Dismissal of suit where plaintiff, after summons returned
unserved fails for (7 days) to apply for fresh summons: The suit may be dismissed
on the discretion of the court if the plaintiff is unable to file for an application of fresh
summons after the summons are left un-served. In the currrent case, the plaintiff did
file an application for fresh summons to be issues due to failure of serving summons
before the settlement of issues, all the documentary evidence in original along with its
copies along with the Written statement or Plaint. The plaintiffs in the current case
attached all the original documents with the plaint the incorporation certificate etc.
Order 14 Rule 1: Framing of Issues: In the present case, the courts could not frame
issues as the parties withdrew the suit before the court could reach conclusion. The
court although ordered multiple times for the parties to be present so that the court
may proceed to frame issues. Also when the defendant makes no defence, the court
does not have to frame issues.
Order 15 Rule 2: One of the several Defendants are not at issue: When there are
more than one defendant in a case and the parties are not at issue the court may pass a
separate decree to settle the parties and finally dispose it. Although the plaintiff claim
that the defendant no. 2 is an integral party and not just an agent but also responsible,
the defendant claims that the parties are not at issue.
Order 17 Rule 1 - Court may grant time and adjourn hearing: It provides power
to court to grant time and adjourn hearing. It says that the Court may, if sufficient
cause is shown, at any stage of the suit, grant time to the parties or to any of them, and
may from time to time adjourn the hearing of the suit for reasons to be recorded in
writing: Provided that no such adjournment shall be granted more than three times to
a party during hearing of the suit. The court granted more than just enough time to the
parties to file documents and replication which extended to much beyond multiple last
opportunities.
Order 17 Rule 2- Costs of Adjournments: But Honble court failed to apply Sub
rule (2) and did not impose any cost on party because this sub rule says that in every
such case the Court shall fix a day for the further hearing of the suit, and shall make
such order as to costs occasioned by the adjournment or such higher costs as the Court
deems fit.
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Order 18 Rule 1 - Right to begin: In this case plaintiff had right to begin, that is why
plaintiff began because this rule says that the plaintiff has the right to begin unless the
defendant admits the facts alleged by the plaintiff and contends that either in point of
law or on some additional facts alleged by the defendant the plaintiff is not entitled to
any part of the relief which he seeks, in which case the defendant has the right to
begin.
Order 19 Rule 3 - Matters to which affidavits shall be confined: The plaintiff had
mentioned only those facts which were in his own knowledge.
Rule 3 under Order 39 provides that the Court shall in granting injunction direct the
notice of the application for the same to the opposite party except where the object of
granting the injunction would be defeated by delay.4 One important aspect of Rule 3
of Order 39 is that under this rule a court merely decides whether to grant injunction
ex parte or after giving notice. If it decides to give notice the power is really exercised
under Rule 1 or Rule 2 of Order 39. If the court decides to pass the injunction order
without giving notice , then too the power of granting injunction really flows from the
same.5 Therefore in effect of Rule 3 merely lays down the procedure while Rule 1 and
Rule 2 together are repository of courts power.6
the property to third person that is why injunction was asked from court.
Order 39 Rule 2 - Injunction to restrain repetition or continuance of breach:
Defendants were continuously committing a breach of contract that is why plaintiffs
filed application under this rule and court orders for injunction.
Order 39 Rule 2A - Consequence of disobedience or breach of injunction: Even
after granting injunction in favour of plaintiffs, defendants did not comply with the
court order that is why plaintiff filed an application under this rules because this rule
says that order in the case of disobedience of any injunction granted or other order
made under rule 1 or rule 2 or breach of any of the terms on which the injunction was
granted or the order made, the Court granting the injunction or making the order, or
any Court to which the suit or proceeding is transferred, may order the property of the
person guilty of such disobedience or breach to be attached, and may also order such
person to be detained in the civil prison for a term not exceeding three months, unless
in the meantime the Court directs his release.
4
5
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The researcher thinks that Honble High court was correct in granting ad
interim injunction because delay in granting injunction would have failed
their case.
There was a balance of convenience lied in favour of the plaintiffs and
against the defendants and the defendants agreed at the amount of money
they owed.
In case the ad-interim injunction as prayed for will not be granted, the
plaintiffs would have suffered irreparable loss and injury which can not be
The court ordered for issue of summons more than 6 times and in multile
modes- via plantiff, registered post, courier and eventually by publication
in a newspaper. The court wasted months to proceed ex-parte. The
researcher thinks that the Honble High Court has been very linent with the
The parties in the current case eventually ended up withdrawing the suit
and it took the plaintiff 9 years to realise the futility of litigating and
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on the other hand get away with wasting the limited resources and time of
ISSUE OF ADJOURNMENTS:
The court has rightfully complied with the orders under the civil procedure
code, however, there are certain problems identified in the orders. The
court has granted so many adjournments and extended a suit which was
instituted in 1999 to the year 2002. The court never looked into whether
the matter could have been amicably settled or not. If it would have, then it
could have proceeded under section 89 of the CODE OF CIVIL
PROCEDURE 1908 and referred the matter for mediation, arbitration,
and give them to the parties for their observations and after receiving the
observation of the parties, the court may reformulate the terms of a
possible settlement and refer the same for different forms of alternate
dispute resolution such as mediation, arbitration, conciliation and judicial
settlement through Lok Adalat. Keeping in mind the delay that happens in
Courts it is imperative to resort to ADR mechanisms to end litigation
between parties at an early date. However, in the present suit, the court has
overlooked this provision.
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