BHAI ANALIJIT Vs. MITSUI AND CO LTD

JUDGEMENT

(1.) THE respondent No. 1 herein is the plaintiff in CS (OS) No. 593/1999 filed for recovery of money against three persons, namely, Bhai Manjit singh, defendant No. (respondent No. 2 herein), Bhai Mohan Singh, Karta of Bhai Mohan Singh HUF, defendant No. 2 and Bhai Manjit Singh HUF, defendant No. 3 (respondent No. 3 herein ). During the pendency of the suit bhai Mohan Singh (defendant No. 2) passed away and in these circumstances, the plaintiff moved application under Order XXII for substituting his legal representatives. Legal representatives named in these applications are the appellants herein as well as the respondents No. 4 (a)to 4 (c) herein. This application has been allowed by the learned Single Judge vide orders dated 16. 9. 2008. The opposition of this application by the appellant herein [defendant No. 2 (d)] has been repelled. Not satisfied, the appellant has challenged that order in this appeal. It is not in dispute that the appellant as well as the respondents No. 4 (a) to 4 (c) are the legal representatives of the deceased defendant No. 2. The opposition of the appellants for impleadment was on the ground that the cause urged in the plaint qua defendant No. 2 constituted a personal claim, which was extinguished and did not survive on the passing away of defendant No. 2. Therefore, his legal representatives could not be substituted in his place. For appreciating this contention and the manner in which it is dealt with by the learned Single Judge, it would be necessary to take note of the averments made in the suit on the basis of which cause is founded against the defendants and in particular against second defendant, since deceased.

(2.) IT is alleged by the plaintiff that the plaintiff was interested in purchasing a property in New Delhi and through broker it was introduced" to defendant No. 1, who showed his interest in selling property bearing No. 61, Golf Links, New Delhi. Defendant No. 1 also represented that he was fully competent to enter into the negotiations. Plaintiff was informed that the property in question was in the name of Bhai Mohan Singh HUF of which defendant No. 1 is a member and defendant No. 2 is the Karta. Certain other representations were made regarding family settlement between the parties as per which, the aforesaid property came to the share of defendant No. 1, though this was not recorded in the records of the Landdo. Defendant No. 1 informed that he was duly authorized and competent to deal with the property in question. Defendant No. 2 also issued letter dated 2. 2. 1996 whereby the plaintiff was informed that defendant No. 1 was irrevocably authorized by the defendant No. 2 to deal with the property in question. It was also stated that in that letter by the defendant No. 2 that the plaintiff should make payment of sale consideration to the defendant No. 3 and the agreement to sell as well as the sale deed would be executed by the defendant no. 2. Both defendants No. 1 and 2 assured the plaintiff that the property was free from all encumbrances and defendant No. 1 was fully authorized and entitled to deal with the property and the title deeds of the property would be made available to the plaintiff. Memorandum of Understanding dated 3. 2. 1996 was also executed between the parties, inter alia, stating that an agreement of sale with respect to the said property would be executed on or before 28. 2. 1996 after the plaintiff and its advocates were satisfied about the title of the defendant No. 1 to the property in question. Total consideration agreed for the property in question was to be Rs. 16 crores and it was further agreed that 10% of that amount, i. e. , Rs. 1. 6 crores would be paid by the plaintiff to the defendant No. 2 as token money/part payment against the aforesaid consideration. The manner in which balance payment was to be made was also recorded. The plaintiff accordingly paid a sum of Rs. 1. 60 cores as token money/advance/part payment to defendant no. 1 by cheque drawn in favour of defendant No. 3. However, when the relevant documents pertaining to the property were demanded for examination, it transpired that the said property was, in fact, mortgaged to defendant No. 4 bank against a loan of Rs. 2. 25 crores. Defendant No. 1 also failed to satisfy the plaintiff about its title to the property and the property was not free from encumbrances as well. In these circumstances, the plaintiff called off the deal and sent notice dated 1. 2. 1999 to defendants No. 1 to 3 calling upon them jointly and severally to refund the advance money together with interest/compensation/damages. As the money was not refunded, suit was filed stating that defendants No. 1 to 3 were jointly and severally liable to pay the amount along with interest @ 18% per annum. In the plaint there are further allegations against defendant No. 2. It is alleged that defendants No. 1 and 2 deliberately concealed and suppressed the material fact regarding the mortgage of the said property. Defendant No. 2 supported defendant No. 1 in his plans to deceive the plaintiffs and both defendants No. 1 and 2 jointly and severally played fraud on the plaintiff and cheated it by misappropriating the total amount of Rs. 1. 60 crores.

(3.) THE submission of the learned counsel for the appellant while contesting the application for bringing the LRs on record, before learned single Judge as well as before us, was that on an overall reading of the suit averments it would be manifest that defendant No. 2 was sought to be fastened with liability on the ground that he made misrepresentation and played fraud upon the plaintiff in connivance with defendant No. 1. It was argued that at best these constituted personal allegations and did not survive the death of the person. The learned Single Judge repelled this contention in the following manner:-