1988 PLP 606 (CLC)

" ....In the circumstances I feel that the examination of some evidence will be necessary and it will also be further necessary for the plaintiff to be examined in consequence of the framing of this issue." . Pursuance to the above orders of the Court both the appellants examined themselves in support of their case and were cross‑examined; whereas the respondent No.4 examined one Ashiq Hussian Kureshi,, an Assistant from the Office of Registrar Joint Stock Companies, Karachi, who in turn was cross‑examined by the learned counsel for the appellants. After hearing the arguments of the parties on the above‑noted preliminary issue the learned single Judge passed the impugned judgment on 2‑9‑1968 thereby holding that the suit was clearly barred by limitation and, consequently, dismissing it with costs, the learned single Judge further observed in the impugned judgment as under:‑ "

27. Before parting with this judgment it may be mentioned that for the consideration of the issue of limitation the question of the frame of suit was also considered, as that question, apart from being a question of law, was inextricably linked with the determination of that issue."

16. We have heard Mr. Salahuddin, learned counsel for the appellants. He made the following submissions: (i) That the learned single Judge was not legally competent to go into the question of frame of the suit while deciding the sole preliminary issue on the point of limitation; (ii) That while holding that the relief of declaration in respect of properties mentioned in Schedule 'A' and 'B' without their being a prayer for possession of those properties, the learned single Judge failed to appreciate that it was not so pleaded by the respondents and hence the decision on the point was outside the pleadings of the parties; (iii) That the learned single Judge erred in overlooking the fact that in a case based on fraud, the entire transaction was to be looked at and a few discrepancies in the statements of the appellants in their deposition were not sufficient to destroy the facts stated in paras. 3 to 19 of the plaint; (iv) That the learned single Judge failed to appreciate that the period of limitation started from 23‑3‑1965 when the appellants saw an advertisement in newspaper 'Morning News' that their shares were to be auctioned by the Industrial Urban Cooperative Bank not any time earlier than that as is elaborately mentioned in paras. 3 to 19; (v) That the learned single Judge further failed to appreciate that section 18 of the Limitation Act was manifestly applicable to the facts of the case and that Article 91 of the Limitation Act was irrelevant to the facts of the case. The case was, the counsel so contended, covered by Article 120 of the Limitation Act and hence the suit was well within time; (vi) The counsel submitted that the learned single Judge erred in holding that section 39 of the Specific Relief Act was applicable to this case; whereas it was a case plainly falling under section 42 of the Specific Relief Act. The suit for declaration was thus properly maintained inasmuch as the title in the property did not pass to the purchaser. The counsel, therefore, prayed that the case may be remanded for decision on merits.

17. The solitary issue involved in this appeal, as stated above, is as to whether the suit was barred by limitation. The appellants' case is that section 18 of the Limitation Act, 1908 (hereinafter referred to as 'the Act' is applicable to the facts of this case and since the appellants came to know of the fraud committed upon them by the respondents for the first time on 23‑5‑1965 when the appellants saw an advertisement in newspaper (Morning News) that their shares were to be auctioned by the Industrial Urban Cooperative Bank on 29‑3‑1985. The case of the respondents, on the other hand, before the learned single Judge was that Article 91 of the Act is applicable to the instant case. The learned single Judge after recording the evidence of the appellants and hearing the counsel for the parties has held that Article 91 of the Act was applicable to the suit and hence it was already barred by limitation. Before proceeding further to consider the above‑noted contentions raised by the learned counsel for the appellants it would, I think, be proper if section 18 and, Article 91 of the Act are reproduced hereunder:‑ Section 18 reads:‑ "

18. Effect of fraud.‑‑ Where any person having a right to institute a suit or make an application has, by means of fraud, been kept from the knowledge of such right or of the title on which it is founded, or where any document necessary to establish such right has been fraudulently concealed from him, the time limited for instituting a suit or making an application‑‑ (a) against the person guilty of the fraud or accessor thereto, or (b) against any person claiming through him otherwise then in good faith and for a valuable consideration, shall be computed from the time when the fraud first became known to the person injuriously affected thereby, or, in the case of the concealed document, when the first had the means of producing it or compelling its production." Article 91 reads as under:‑ "

91. To cancel or set???????????????????????????????????????????????????? Three years when the facts entitling aside an instrument not????????????????????????????????????? the plaintiff to have the instrument otherwise provided for.???????????????????????????????????? cancelled or set aside become known ??????????? to him."

18. A bare reading of section 18 makes it absolutely clear that in order to bring their case within the preview of this section the appellants had to establish that they were, consequent to the fraud perpetuated upon them, kept from the knowledge of having a right to institute suit or where any documents necessary to establish such right have been fraudulently concealed from them. If it is found that the respondents were guilty of fraud then the time limit for instituting the suit shall be computed from the time when the fraud first became known to the person injuriously affected thereby, namely, the appellants in the instant case. The appellant's contention is that the cause of action for the suit out of which this appeal has arisen accrued to the appellants when they "for the first time realised the suit significance of the fraud played on them". See para. 23 of the plaint). Section 18 of the Act does not, firstly, speak of the realization of the` full significance of the fraud. Secondly, it may be noted here that in pare 10 of the plaint it is specifically pleaded that the respondents No.l to 4 through misrepresentation, fraud and undue influence got a Deed of Assignment dated 15‑8‑1960 executed in favour of the Company. Here I may pause a little to point out that the so called Deed of Assignment dated 15‑8‑1960 (Annexure G' to the plaint) is in fact an Agreement of Assignment. This agreement of Assignment has been executed only by appellant No.l whereas in this very paragraph 10 it is averred that it was done by taking advantage of the fact that Rs.20,000 were outstanding against the appellant No.l. Further averments made in this para, to the effect that this document (Deed of Assignment dated 15‑8‑1960) is void as it pertains to immovable property which cannot be assigned or transferred except by a Registered Deed are thus based on self‑assumed fact of the Agreement of Assignment being taken as Deed of Assignment. Now with regard to the floating of the Company it was mentioned in para. 12 of the plaint that the respondents No. l to 3 floated it whereas the appellant No.l in his deposition before the learned single Judge clearly stated that "a private company was formed with his son as the Resident Director, the factory was mutually valued at Rs.70, 000" . The Memorandum and Articles of Association of the Company are signed by both the appellants. The shares allocated to the Directors as per Memorandum and Articles of Association of the Company are also shown in para 11 of the plaint by the appellants themselves. The allegation of undue influence and fraud allegedly exerted and perpetuated by the respondent No.4 in concert with Ali Hasan Manghi, the Chairman of the National Commercial Bank Ltd; on account of the Clifton Aerated Water Company, the partnership concern, in-debited to the National Commercial Bank Limited, could not be believed more particularly in view of the fact that the appellants belonged to a business community and were actually engaged in business for the last many years. It is the common feature of a business concern to obtain a loan either from the private parties or banks as and when it is so considered necessary for the purposes of doing the business. The mere fact of taking the loan of Rs.10,000 from the above‑named bank could not lead to the irresistible conclusion as has been sought to be pleaded by the appellants, that it was with ulterior motive as pleaded in the plaint. The learned single Judge, I do not feel hesitant to say so with respect, has rightly observed:‑ After all both the plaintiffs belonged to business community, made their living from business and it must be presumed that they had sufficient experience of commercial dealings". The plea of so‑called undue influence has, in my opinion, been for valid and cogent reasons repelled by the learned single Judge and I do not find any good reasons to take a different view in this behalf.

19. Likewise the plea of fraud committed upon them by the respondents No. 1 to 4 in making the appellants agreeable to the incorporation of the Company is equally unsustainable, firstly, for the same reasons as given hereinabove. Besides, the undertaking given to the appellants that the appellant No.l will be appointed as a Chairman of the Company and appellant No. 2 as the Resident Director were actually fulfilled and this fact has been clearly admitted by the appellants in their depositions before the Court. The plea of the appellants that they, signed the various documents without knowing their nature as they did not know English, in which these documents were written, stands belied by their own admissions made during cross‑examination. The learned single Judge has dealt with this aspect of the case quite satisfactorily and in a convincing manner in his impugned judgment and here also I do not find any plausible and convincing reason to disagree with him. I may, however, add that no doubt the documents are written in English but it is difficult to believe the version of the appellants that they signed them without knowing their real import and nature. Regarding the execution of Agreement of Assignment the appellant No.2 in his deposition has stated that 'on the next day my father (namely, appellant No.l) got it read over by somebody and learnt that this Deed included the term regarding the payment of Rs.1000 per month. This factory, according to the Deed, was to be assigned in the name of Multiple Industries Limited'. Both the appellants have then clearly‑ deposed about the constituents of the Company and in the respective shares of the Directors. The appellant No.2 has further admitted that he was one of the Directors of the Company, that until few months before the filing of the suit he had been working as Director of the Company and looking after the production side of the factory. He has also admitted that his father was the Chairman of the Board of Directors of the Company and that his election as Chairman was done at the meeting called before five days after the Deed of Assignment was executed. He has admitted the signatures of his father, the appellant No.l, on Ex. II as Chairman of the Company. The appellant No.l has further admitted that he used to get only Rs.100 per month from the Company and that he at times used to purchase materials for the Company. With regard to the value of the assets of the dissolved partnership concern of Clifton Aerated Water Company the appellant No.2 has clearly admitted that "it is correct that the defendants had accepted our quotation of Rs.70,000 as the price of the Company". He has also admitted to have pledged his shares of Multiple Industries Limited with Industrial Urban Cooperative Bank by way of a security against loan. Although then he tried to wriggle out of it by stating that "in fact these shares were pledged by the defendants without my knowledge" . Having admitted that it was correct that he had issued a cheque in favour of National Commercial Bank Ltd. for Rs.27000 so as to adjust his overdraft with the said bank, he stated that he failed to repay the said loan to the said bank who, as a result auctioned his shares and recovered the amount. In view of the above noted admissions there is no escape from the conclusion that the stand taken by the appellants in the plaint which is contrary to the above admissions is unbelievable. The plea of the appellants taken in the plaint to the effect that the various documents filed along the plaint were signed by them on account of undue influence, fraud and misrepresentation made by the respondents No.l to 4 cannot be believed as correct. The learned single Judge has elaborately dealt with this aspect of the case as well and I feel myself in complete agreement with his reasonings as given in paragraph 20 of the impugned judgment.

20. The objection raised by the learned counsel for the appellants to the effect that the learned single Judge was not legally competent to go into the question of frame of the suit while deciding the above‑noted preliminary issue on the point of limitation, it may be noted that the occasion to do so arose to the learned single Judge because of the argument advanced by the learned counsel for the appellants before the learned single Judge that apart from seeking the cancellation of the Deed of Assignment dated 15‑8‑1960, the appellants had also sought a declaration that they were the owners of properties mentioned in Schedule 'A' and 'B' of the plaint and therefore the suit was governed by Article 120 of the Limitation Act. At any rate if that contention of the learned counsel for the appellants is ignored then the finding recorded by the learned Single Judge would assume the characteristic of the academic discussion of the matter. But if it is urged on behalf of the appellants that the said plea was valid then no objection can be legitimately taken to the course adopted by the learned single Judge. Consequently, I do not find any substance in this grievance of the appellants.

21. Under the aforesaid facts and circumstances of the case and for the reasons recorded hereinabove I do not find any merit in this appeal and dismiss it accordingly with no orders as to costs. S.Q./‑A‑177/K??????????????????????????????????????????????????????????????????????????????????????????????????????????? Appeal dismissed.