RICHARDSON AND CRUDDAS LTD Vs. HARIDAS MUNDHRA

JUDGEMENT

(1.) This is an application by the plaintiff company for condonation of delay in making this application or for extension of time to make this application, for setting aside the abatement of this suit, if any. for substitution of the heirs and legal representatives of the deceased defendant No. 6, Rai Bahadur Manturam Tapuria and for amendment of the plaint end other reliefs,

(2.) The defendant No. 6, Rai Bahadur Manturam Tapuria died on June 24, 1966 leaving his wife, Sm. Suniti Tapuria end two sons. Motilal Tapuria and Kasfai-nath Tapuria as his heirs and legal representatives. This application has been made on December 24. 1971- The question in this application is whether after such a length of time the Court will grant the pravers of the petitioner by setting aside the abatement and substituting the heirs and legal representatives of tile deceased defendant No. 6. It is necessary to set out certain facts relating to the suit and this application, in order to decide whether the prayers should be granted or not. The plaintiff company carries on business, niter alia, as structural and mechanical engineers. The defendants including the deceased defendant No. 6 were the directors and/or those who purported to act as directors of the plaintiff company. There were various proceedings including proceedings under the Indian Companies Act. in respect of the affairs of the plaintiff company. There was an application under Section 397 of the Companies Act 1956 and on December 9. 1957 Sir D. N. Mitra was appointed the Special Officer by this Court On April 23, 1958 Sir D. N. Mitra's appointment as Special Officer was confirmed by this court and the directors of the plaintiff company were discharged by the order of this Court. In December 1958 audit of the accounts was ordered by the Special Officer and on the report of the auditors as received by the Special Officer, the present suit was instituted on September 12, 1960 against the directors, and/or those, who purported to act as directors of the plaintiff company. The claim in the suit is for loss and damages suffered by the plaintiff company and payment of compensation for Rs. 40.35 lakhs and for Rs. 8,07.000/-and also for several other sums being Rs. 19,85,806/-. Rs. 12,003/- and Rs. 10 lakhs for failure and neglect to maintain proper vouchers and accounts end for wrongful withdrawal of moneys and/ or alleged loans and advances taken from the plaintiff company. After the suit was filed on April, 18, 1962. a scheme proposed by the Special Officer was approved by this Court. On July 1. 1962, the scheme was given effect to and the Special Officer was discharged and the Board of Directors was reconstituted with Sir D. N. Mitra as Chairman, by an order passed by this Court. Sir D, N. Mitra who was acting as Chairman of the Board of Directors by an order of this Court, died on December 31. 1966. It so happened that before the death of Sir D. N. Mitra on June 24, 1966 the defendant No. 6. died, and due to the sudden death of Sir D. N. Mitra. the previous Chairman of the Board of Directors, the management of the company could not function properly and the death of the defendant No. 6 remained unnoticed. On February 21, 1967 Shri Rabindra Nath Sen, Chartered Accountant and Senior Accountant of Messrs. Price Waterhouse, Pit & Co., was appointed as Chairman of the Board of Directors of the plaintiff company by an order passed by this Court. It is stated in the petition, that the new Chairman of the Board of Directors. Rabindra Nath Sen, after taking the control and management of the plaintiff company missed through oversight the information about the death of the defendant No. 6, Rai Bahadur Manturam Tapuria, It is the case of the petitioner company that very recently on November 15. 1971 the plaintiff discovered at a conference held with the counsel that this suit cannot proceed against the defendant No. 6. without bringing the heirs and legal representatives of the defendant No. 6 on record and without moving an application for setting aside the abatement, if any. Thereafter, on November 30. 1971 summons was taken out for the substitution of the names of the heirs and legal representatives of the deceased defendant No. 6 after setting aside the abatement, if any. Thereafter, on or about December 2. 1971. the Solicitors for the defendants informed the petitioner's Solicitors that one of the sons qf defendant No. 6, namely. Motilal Tapuria also died on April 27, 1968 leaving Sm. Mohini Tapuria, Debi Prosad Tapuria, Sm. Monorama Birla Krishna Mohta and Sm. Madhurika Maheswari as his heirs and legal representatives, Thereafter, this summons was taken out on December 24, 1971. Mr. Ashim Ghose learned counsel for the petitioner, submitted before me that the Chairman of the Board of Directors who was appointed by this court in an application under Sections 397 and 398 of the Companies Act made mistake in that he by oversight missed the fact that the defendant No. 6 died and the reason for delay in making this application for substitution of the heirs of the defendant No. 6, was due to this mistake. It was submitted that only in the conference with counsel which was held on November 15, 1971. this mistake was detected. It was also argued that it was a mistake by the Chairman of the Board of Directors, who was an officer appointed by this court? or in other words, it is a mistake of the Court or an officer appointed by the Court, and the plaintiff company should mot suffer due to such a mistake. The learned counsel for the petitioner cited before me, (Jagannath Singh v. Ram Naresh Singh), Where the maxim "an act of court should not harm any person" is quoted and it was held that the omission to mention the case correctly in the cause list was a mistake of the court itself and some indulgence was. therefore, shown to the party who has been misled by this erroneous entry. There is a decision to the same effect. (Province of West Bengal v. Surya Kanta Jana) where the oft-quoted observations of Lord Cairnes in (Rodser v. Compteir d' Escompete De Paris) LR (3) PC 465 at 475 are repeated-

(3.) This application is opposed by Mr. Hiranmoy Dutta. on behalf of the proposed defendant No. 6 (a) Sm. Suniti Tapuria and 6 (b) Kashi Nath Tapuria end by Mr. Anindya Mitra, who is appearing for -- proposed defendant No. 6 (c) Sm. Monorama Birla. Mr. Hiranmoy Dutta invited my attention to several paragraphs of the affidavit of Kashi Nath Tapuria affirmed on January 31, 1972, where it was stated that in or about 1963 there was a partition and Administration Suit in this court between Kashi Kanta Tapuria and Manturam Tapuria & Ors. In that suit all disputes were referred to arbitration. There was an award made in or about June, 1964. By the award the members of the joint family stand disrupted on or from December 1963. It was submitted that Motilall Tapuria sepa-rated himself from the joint family consisting of himself and his parents before the death of Manturam Tapuria. and as such is not entitled to claim any share of the property left by Monturam Tapuria. It was submitted that Motilall Tapuria was in law neither an heir nor legal representative of Manturam Tapu-ria. It is also stated that in or about December 16, 1957. the State Bank of India instituted a suit in this court being suit No. 2027 of 1957 (State Bank of India v. Richardson and Cruddas Ltd. against the plaintiff. In that suit on or about September 21. 1966 an application was made by the State Bank of India regarding the death of Mantu- ram Tapuria and substitution of Kashi Nath Tapuria and his mother Suniti Tapuria and the said Motilall Tapuria was made. It was further stated that on or about April 5, 1967 in the presence of the Attorney of the petitioner Richardson & Cruddas Ltd. in suit No. 2027 of 1957 the order was passed recording the death of Manturam Tapuria. or in other words it was stated that on April 5, 1967 the plaintiff had knowledge that Manturam Tapuria died. Mr, Hiranmoy Dutta placed before me the decision in. (Union of India v. Ram-charan). It was held by the Supreme Court that-