Full Judgment Text
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY PETITION NO.375 OF 2008
Haresh P. Jashnani, .
Karta of Haresh P. Hashnani HUF ...Petitioner
V/s.
Satco Securities & Financial Services L. ...Respondent
Mr.J.P. Sen with Ms.Neeta Solanki i/b M/s.Kiran Jain
& Co. for the Petitioner.
Mr.Simil Purohit with Mr.Gaurav Joshi i/b M/s.Purohit
& Co. for the Respondent.
.
CORAM : S.J. VAZIFDAR, J
DATED : 4TH APRIL, 2009.
:
ORAL JUDGMENT
1. The facts pertaining to the merits of this
case are identical to the facts in Company Petition
No.751 of 2007. I have today passed an order in
Company Petition No.751 of 2007.
2. In addition thereto, in this case, the
company has raised the defence of limitation.
3. The transactions in securities pertain to the
period between 9.2.2005 to 18.3.2005. The petition
was filed on 3.4.2008 i.e. after a period of more
than three years. Mr.Sen, however, relied upon the
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ledger maintained by the company for the period
1.4.2005 to 31.3.2006.
4. The first item in this ledger account is
dated 1.4.2005. This however is the opening balance.
Considering the nature of the account in this case it
is a moot point as to whether the ledger can be said
to constitute an open mutual and current account
within the meaning of Article 1 of the Limitation Act.
I will assume that the question whether an opening
balance constitutes "the last item admitted or proved
as entered in the account" within the meaning of that
expression in Article 1 of the Limitation Act, 1963 is
an arguable point.
5. Mr.Sen also submitted that this ledger
account was an enclosure to a letter addressed by the
company dated 7.7.2005 and therefore constituted an
acknowledgement of liability within the meaning of
Section 18 of the Limitation Act. This submission is
well founded. In paragraph 4 of the letter, it is
stated as follows :-
"We may point out to you that in the said
claim, we have already given credits in
respect of the amounts claimed by the
complainant in the present complaint as seen
from the ledger copy enclosed as Annexure-I."
6. Section 18 of the Limitation Act, 1963 reads
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as under :-
"18. Effect of acknowledgment in writing. -
(1) Where, before the expiration of the
prescribed period for a suit or application
in respect of any property or right, an
acknowledgment of liability in respect of
such property or right has been made in
writing signed by the party against whom such
property or right is claimed, or by any
person through whom he derives his title or
liability, a fresh period of limitation shall
be computed from the time when the
acknowledgment was so signed.
(2) Where the writing containing the
acknowledgment is undated, oral evidence may
be given of the time when it was signed; but
subject to the provisions of the Indian
Evidence Act, 1872 (1 of 1872), oral evidence
of its contents shall not be received.
Explanation. - For the purposes of this
section, -
(a) an acknowledgment may be sufficient
though it omits to specify the exact nature
of the property or right, or avers that the
time for payment, delivery, performance or
enjoyment has not yet come or is accompanied
by refusal to pay, deliver, perform or permit
to enjoy, or is coupled with a claim to set
off, or is addressed to a person other than a
person entitled to the property or right,
(b) the word "signed" means signed either
personally or by an agent duly authorised in
this behalf, and
1. an application for the execution of a
decree or order shall not be deemed to be an
application in respect of any property or
right."
7. The question is whether the letter dated
7.7.2005 read with Annexure-I referred to therein and
enclosed therewith constitutes an acknowledgement in
writing signed by the party i.e. the company, as
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required by section 18 of the Limitation Act, 1963.
8. When a document incorporates by reference the
contents of another document it in effect adopts what
is stated therein as its own. Incorporation by
reference is often resorted to in the formation of
contracts including adopting arbitration clauses
contained in the document incorporated. It is quite
obvious and only logical that in such cases what the
party in effect intended to do and did was to rewrite
the contents of the earlier document in the later
signed document. Such contents thereby become a part
of and must be read into the signed document.
9. If a document or the contents thereof which
constitute an acknowledgement of liability are
incorporated by reference in a document which is
signed, the latter document satisfies the requirements
of section 18. This of course is if the former
unsigned document constitutes an acknowledgement of
liability and the party intended incorporating the
contents or at least the relevant contents thereof in
the latter document. It is not necessary that the
contents of the incorporated document are reproduced
or set out verbatim in the latter document. It is
sufficient if that was the intention.
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10. A mere reference in one document to another
would not necessarily evince an incorporation thereof
or an intention to incorporate the same in the later,
referring document. That would depend upon the nature
of the document in and the facts of, the case.
11. In the present case there is a clear
intention on the part of the company to incorporate
the contents of the Annexure-I referred to therein in
the letter dated 7.7.2005. This intention is clear
from paragraph 4 of the letter I have set out earlier
and especially the words "as seen from the ledger copy
enclosed as Annexure-I." (emphasis supplied) Paragraph
4 in effect incorporates the contents of Annexure-I in
the letter dated 7.7.2005.
. If indeed the Petitioner’s case on merits is
well founded and the defence of the company regarding
the clubbing of the said thirty two accounts is not
accepted, this letter read with Annexure-I thereto
would constitute an acknowledgement of liability as
the annexure is incorporated therein. The
acknowledgement therein would therefore be one in
writing and signed by the company.
12. In the circumstances, the following order is
passed :-
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i). The Company is directed to deposit in this
Court a sum of Rs.3,88,462/- on or before 31.7.2009.
ii). Upon the amount being deposited, the same
shall be invested in a nationalized bank initially for
a period of one year and thereafter for like periods
of one year each.
iii). In the event of the amount being so deposited
and in the event of the Petitioner filing a suit
within twelve weeks from the date of the Petitioner’s
advocate being informed of the same in writing, the
amount shall stand transferred to the credit of that
suit. The Petitioner shall be at liberty to make an
application in the suit for withdrawal of the amount.
iv). In the event of the suit not being filed as
aforesaid, the petition shall stand dismissed and the
amount with interest thereon shall be refunded to the
Respondent - Company.
v). In case of failure on the part of the Company
to deposit the amount as aforesaid, the Petition shall
stand admitted and to be advertised in Free Press
Journal, Maharashtra Times and Maharashtra Government
Gazette. The Petitioner to deposit an amount of
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Rs.10,000/- with the Prothonotary and Senior Master of
this Court within four weeks from the date of default.
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