R.P. MAHAJAN Vs. RALSON

JUDGEMENT

(1.) THIS is revision against the order of Civil Judge (Junior Division), Ludhiana dated 20.5.1999 whereby she refused to allow the prayer of the petitioners (defendants 5 to 9) for direction to the respondents-plaintiffs to furnish better particulars required in the case.

(2.) RALSON (India), Ralson Nagar, G.T. Road, Ludhiana through its Managing Director, Shri Sanjiv Pahwa and its Liaison Officer Jawahar Lal and two others filed suit for the recovery of Rs. 3.27 crores i.e. Rs. 1.63 crores as principal plus Rs. 64 lacs as interest and Rs. 1 crore as damages against Union of India, through Secretary, Ministry of Finance, New Delhi and other defendants and for declaration that the amounts described and detailed in the heading of the plaint which include the amount of FDRs, Indira Vikas Patras, NSCs are the ownership of the plaintiff-company and for declaration that the properties i.e. Kothi No. 225, Green Park, Near Bus Stand, Jullundur and plot situated at Kabul Singh Nagar in the name of R.P. Mahajan and his wife Smt. Sneh Lata Mahajan had been purchased with the funds misappropriated by R.P. Mahajan by withdrawing the amount from the account of the plaintiff company bearing No. 31 with Punjab National Bank, Dhandari Kalan, Ludhiana fraudulently and illegally and that the said two properties are liable to be appropriated towards the dues of the plaintiff company by sale or otherwise and for the grant of permanent injunction restraining the Union of India and others defendant Nos. 1 to 4 from releasing the FDRs, Indira Vikas Patras, NSCs and cash amount recovered by them from the possession of R.P. Mahajan during income tax raid and police investigation to anybody except the plaintiff company as it is the plaintiff company which is entitled to receive the amount of FDRs, Indira Vikas Patras, NSCs along with cash amount from Union of India and others defendant Nos. 1 to 4 and for mandatory injunction directing the Punjab National Bank, Dhandari Kalan, Ludhiana to release the amount of Rs. 2.50 lacs lying deposited with them and attached under the orders of the police authorities in favour of the plaintiff company and further directing the Union of India and the Director of Income Investigation, Chandigarh defendant Nos. 1 and 2 to release the FDRs seized by them from the house of R.P. Mahajan and his wife Sneh Lata Mahajan defendant Nos. 5 to 6 at Jalandhar along with amount of Rs. 42,000/- in cash and NSCs in favour of the plaintiff. It was alleged in the plaint that the plaintiff company is a limited company incorporated under the Companies Act carrying on business in the manufacturing of cycles, rickshaw tyres and tubes and other cycles parts besides carbon black and also deals in import and export. R.P. Mahajan was appointed Financial Controller-cum-Company Secretary of the plaintiff company on 28.11.85 at a monthly salary of Rs. 3,000/- vide appointment letter dated 28.11.85. His function was to manage and control the finance, bank accounts and supervise the accounts of the company and was answerable to the management of the company. Shri Om Parkash Pahwa was earlier the Managing Director of the plaintiff company. On 15.2.91, Shri Om Parkash Pahwa expired. Shri Sanjiv Pahwa took over as Managing Director of the company when he was only 24 years old. He was not at well versed with the intricacies of the company affairs especially finance. R.P. Mahajan was already looking after and handling the finances of the company. Sanjiv Pahwa began deposing faith in him. Sanjiv Pahwa had to remain out of Ludhiana in connection with the affairs of the company. In his absence, R.P. Mahajan exercised complete control over the financial matters of the company. With the passage of time, R.P. Mahajan won over the faith and confidence of the other Directors as well. Shri Sanjiv Pahwa used to sign blank letter heads, blank cheque books which remained in the custody of R.P. Mahajan due to inexperience and also due to his pre-occupation. On 15.7.91, there was brutal attack on Sanjiv Pahwa by some terrorist group and that was also the reason for his signing blank letter heads etc. Shri Sanjiv Pahwa remained unhurt but it created fear in his mind that his presence at Ludhiana might cost him his life. This incident benefited R.P. Mahajan and he strenthened his grip on the affairs of the company with greater vigour. His mother Smt. Krishna Pahwa was also attacked. Both left for Delhi and handed over the control and charge to R.P. Mahajan. In their absence, R.P. Mahajan used to deal with the finances and accounting and other day-to-day affairs of the company. R.P. Mahajan for the purpose of operating the bank accounts and for the smooth running of the plaintiff company used to obtain the signatures of Sanjiv Pahwa Managing Director and Smt. Krishna Pahwa Director of the company on blank cheque, blank transfer advices and on the blank letter heads of the company who used to sign in good faith. In mutshell, R.P. Majahan was exclusively handling the affairs of the company. In the income tax raid which was conducted at Jalandhar at the residence of R.P. Mahajan, income tax authorities recovered the FDRs the details of which together with the amount have been given in Para 5 of the plaint. Apart from the FDRs, the income tax authorities also recovered NSCs valuing Rs. 1.25 lacs and cash amount of Rs. 42,000/-. Blank cheques, blank transfer advices, blank letter heads of the plaintiff company signed by Sanjiv Pahwa and Krishna Pahwa were also recovered. In this raid, some blank cheques signed by Ramesh Lal were also recovered. On account of this heavy recovery from the house of R.P. Mahajan by the income tax authorities, the plaintiff company became extremely conscious and they started investigating into the account of the plaintiff company including the bank accounts etc. which had been under the control of R.P. Mahajan. Investigation revealed that R.P. Mahajan had misapropriated huge amounts of the plaintiff company which was not less than Rs. 1.63 crores. It was an act of criminal breach of trust on the part of R.P. Mahajan. Plaintiff company cross checked all the bank accounts especially with the Punjab National Bank, Dhandari Kalan, Ludhiana and tried to tally them with their books of accounts kept by the company and it was found that though huge amounts have been withdrawn from the plaintiff company but not even a single entry was there in the books of accounts of the plaintiff company. On further investigation, it was defected that it was all the handi work of R.P. Mahajan and one Jasvir Singh who is Finance Manager and one Ramesh Lal, the then employee of the plaintiff company. Case F.I.R. No. 230 dated 7.12.92 was registered at PS Focal Point, Ludhiana under Sections 406, 467, 471, 420, 408 read with Section 120-B I.P.C. During investigation, the police recovered a sum of Rs. 40,58,412/- from R.P. Mahajan along with Indira Vikas Patras worth Rs. 9.10 lacs. A private complaint was also filed against R.P. Mahajan by the plaintiff company under Sections 406, 468, 471, 120-B I.P.C. Amount of Rs. 40,48,412/- recovered by the police during investigation belonged to the plaintiff company. This amount was released to the plaintiff company on Spudari by the court. R.P. Mahajan by misusing the blank cheques and blank transfer advices etc. signed by Sanjiv Pahwa and his mother in good faith and handed over to R.P. Mahajan for operating the bank account and for smooth running of the plaintiff company, handed over and signed by the Managing Director and other directors of the plaintiff company illegally and stealthily withdrew sum of Rs. 1,29,47,500/- and got prepared pay orders in the name of fictitious firms and got prepared FDRs of the said amount in the name of the said fictitious firms. In fact the said firms are fictitious firms/companies. R.P. Mahajan and his wife purchased properties out of the amounts withdrawn by R.P. Mahajan from the accounts of the plaintiff company in their names or in the names of their kith and kin. Details of these properties have been mentioned in the plaint.

(3.) CIVIL Judge (Junior Division), Ludhiana declined this prayer of the petitioner i.e. defendant Nos. 5 to 9. Learned counsel for the petitioner has submitted that how could they furnish written statement till the details of FDRs etc. are furnished. It has been submitted that for the fair determination of the matter, the court should have called upon the plaintiff company to furnish better particulars. It has been submitted that the court should use the provisions of Order 6 Rule 5 C.P.C. effectively so that when the pleadings of any party do not furnish the necessary details which are required for the fair determination of the matter, the necessary details are got furnished and the matter is determined in a fair and just manner. Order 6 Rule 5 C.P.C. lays down as under :-