1 MNM IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CHAMBER SUMMONS NO. 620 OF 2008 IN SUIT NO. 4695 OF 2000 RICOH India Limited ...Plaintiff Vs. RPG Enterprises Ltd. & Anr. ...Defendants Mr. Suneet Tyagi with Ms. Vaidehi Naik i/b. Singhania & Partners for the Plaintiff Mr.B.A.D’Lima for Defendant No.1 Mr. Cyrus Ardeshir with Mr. Uttam i/b. Pardiwalla & Co. for Defendant No.2 CORAM : SMT. ROSHAN DALVI, J. DATED : 8TH APRIL, 2010 P.C. : 1. The Chamber Summons is taken out by the Defendant No.2 for striking off his name from the Suit on the ground of mis-joinder of parties. It is argued on his behalf that no cause of action is disclosed against him and hence his joinder in the Suit amounts to mis-joinder and in fact, the plaint itself is required to be rejected as against him. 2 2. The Suit is filed in respect of a certain payment stated to have been made by the Plaintiff as an advance payment to the Defendant No.1 which was not substantiated from the records of the Plaintiff. The Plaintiff asked for the particulars from the Defendant No.1. The Plaintiff was required to address 4 letters in that behalf to the Defendant No.1 dated 22 nd June 1998, 29 th July 1998, 5 th January 1999 and 28 th April 2000 before which the Defendant No.1 replied to the Plaintiff. 3. The Plaint sets out the relationship between the parties to the Suit which is not disputed. The Defendant No.2 was an employee of the Plaintiff prior to which he was an employee of one Joint Venture Company (JVC) between the Plaintiff and the Defendant No.1. The Defendant 2 tendered his resignation as an employee of the Company to the Plaintiff on 9 th May 1998. This was received and acknowledged on 25 th May 1998 in a letter of that date under which his resignation was accepted. The Defendant No.2 was to be relieved from his service with the Plaintiff at the end of the day on 25 th May 1998. 4. It is the Plaintiff’s case that after the Defendant No.2 resigned from the service of the Plaintiff he joined the service of the Defendant No.1. It is stated on behalf of the Defendant No.2 that he has since left the service of the Defendant No.1 also. What is material is that the Plaintiff was with the Joint Venture Company (JVC) of the Plaintiff and Defendant No.1 and after his employment for a short period with the Plaintiff he joined the service of the Defendant No.1. Upon this admitted position the case of the Plaintiff 3 against the Defendants, if any, made out in the plaint has to be seen. 5. Paragraph 7 of the plaint shows averments of the Plaintiff that after the Plaintiff took over the management from the RPG Group of Defendant No. 1, the Plaintiff noticed certain manipulations done by it in the records of its JVC. One of the manipulations form the cause of action in this Suit. That is a payment of Rs.20 lakhs paid by the JVC to the Defendant No.1 on 21 st October 1997 as an advance payment without giving any details of any transactions or without providing any supporting documents as evidence for such advance. Since the Plaintiff was to recover that amount from the Defendant No.1 Company under its agreement with the Defendant No.1 the Plaintiff made inquiries under the aforesaid letters. The Defendant No.1 did not reply the letters written from 22 nd June 1998 until it at last it sent its reply on 22 nd May 2000, about 2 years thereafter. This correspondence had begun soon after the resignation of Defendant No.2 was tendered and accepted. 6. The reply of the Defendant No.1 dated 22 nd May 2000 referred to certain “internal communication dated 12 th May 1998 addressed to Mr. R. Bhide and the reply given by Mr. R. Bhide vide his communications were marked to us”. Mr. Bhide is Defendant No.2. The reply of Defendant No.1 to the Plaintiff’s letters explains why the amount was given as advance payment by the JVC which was taken over by the Plaintiff, to the Defendant No.1. The Plaintiff has refuted the reason given by the Defendant No.1 as the valid reason for which the advance payment was made. Since the reply of the Defendant No.1 related to the internal communication between the 4 Plaintiff and its employee, Defendant No.2, the Plaintiff has averred in para 11 not only that the reasons stated in the reply for the payment made was false, but the Plaintiff was not even aware of such letters written as internal communication by and between the Plaintiff and Defendant No.2. The Plaintiff has averred that no such letters were found on record of the JVC available with the Plaintiff. A very poignant averment in para 11 of the plaint as that it is beyond the Plaintiff’s imagination that the copy of the internal communication would be marked to an outsider i.e. Defendant No.1. 7. The Plaintiff has further averred in para 10 that the Defendant No.2 who was initially employed with JVC and later with the Plaintiff and still later with Defendant No.1 was “a RPG Person/Loyalist” and accordingly there are chances that the Defendant No.1 in association with the Defendant No. 2 could have procured and produced documents (though the dates of the letters mentioned in para 12 are incorrect). 8. Consequently, it is seen that though the transaction, if any, for payment of advance, if any, required to be made or not made by the Plaintiff to the Defendant No.1 was or was not with regard to the reasons stated by Defendant No.1 in its letter dated 22 nd May 2000, it is the Plaintiff’s case that the transaction with the Defendant No.1 seeks to pass off as valid a transaction under an agreement between the Plaintiff and Defendant No.1 under letters procured and produced by the two Defendants acting in association with one another. 5 9. It may be mentioned that whereas the Plaintiff did not know why the payment of Rs.20 lakhs was made on 17 th October 1997 to the Defendant No.1, the Defendant No.1 has informed the Plaintiff that it was made as and by way of licence fee payable by the Plaintiff to the Defendant No.1 for the use of the mark and Logo “RPG” under an agreement between the parties dated 4 th April 1994. The Plaintiff has refuted the agreement all together. The payment is stated to have made an advance payment. The Defendant No.1 has claimed that an earlier part payment of Rs.8.6 lakhs was also made. The advance payment of Rs.20 lakhs was a further part payment. The total agreement was for Rs.30 lakhs and the Defendant No.1 has called upon the Plaintiff to pay Rs.10 lakhs as licence fee and charges still remaining unpaid under their reply letter dated 22 nd May 2000 which makes the mention of the internal correspondence between the Plaintiff and Defendant No.2. 10.It may at once be mentioned that in a contract for Rs.30 lakhs if Rs.8.6 lakhs and Rs.20 lakhs have been paid the balance amount would not be Rs. 10 lakhs. The Plaintiff has refuted the payment of Rs.8.6 lakhs in para 11 of the plaint. 11.The Defendant No.1 has surprisingly filed an affidavit in reply to this Chamber Summons and brought on record the internal correspondence between the Plaintiff and the Defendant No.2 by way of CC marked to Defendant No.1. Though the written statement of Defendant No.1 has been filed, these documents have not been referred to earlier. Mr. Tyagi on 6 behalf of the Plaintiff rightly argued that Defendant No.1 cannot rely upon those documents except which the leave of Court under Order 8 Rule 1 of the C.P.C in the Suit. 12.The Defendant No.2 submitted his resignation on 9 th May 1998. The internal correspondence shows that the Plaintiff called upon Defendant No. 2 on 12 th May 1998 to submit a detailed written report about the financial affairs of the Plaintiff during the course of his employment with the Plaintiff in view this offer to resign. It refers to 2 items, one of which is the payment of Rs.20 lakhs made to Defendant No.1 not substantiated on record by any contract or invoice. The reply of Defendant No.2 is given on 25 th May 1998, his last day in the service of the Plaintiff, inter alia showing that it was towards licence fee and charges which it became overdue for some time, the receipt for the payment of which was not obtained due to neglect of the Manager, Corporate Accounts. It is this correspondence referred to in the letter of the Defendant No.1 dated 22 nd May 2000 which the Plaintiff in paragraph 11 of the plaint stated that it was not aware of and which was not found on the record of the JVC available with the Plaintiff. 13.The Plaintiff’s averments in para 12 are rather mild and in good taste. The averments show the Defendant No.2 as a Loyalist of Defendant No.1 or an “RPG Person” and shows that there are chances that Defendants 1 and 2 would act in association and procure and produce certain documents. 14.It is the case of the Plaintiff that the Defendant No.1 has been illegally 7 withholding Rs.20 lakhs of the Plaintiff Company since 21 st October 1997 and has thereby caused loss to the Plaintiff which the Plaintiff claims that Defendants 1 and 2 are jointly and severally liable to repay. 15.In para 21 of the plaint which is the para relating to the cause of action in respect of the Suit transaction, it is averred that the cause of action to recover Rs.20 lakhs arose in favour of the Plaintiff against “the Defendants” on 21 st October 1997 when Rs.20 lakhs was paid by the erstwhile JVC to Defendant No.1 under instructions of Defendant No.2 as an advance payment. Defendant No.2, ofcourse claims that he was an employee and acted under the instructions of Board of Directors and could not have himself directed the payment that would be his defence in the Suit. The cause of action is made out against both the Defendants in respect of their separate and independent actions being the payment received by the Defendant No.1 and the payment made by the Defendant No.2 from the erstwhile JVC to Defendant No.1 whilst he remained an employee of the Plaintiff. 16.It is argued on behalf of the Defendant No.2 that the Plaint as filed does not disclose any cause of action against the Defendant No.2 and even if the Defendant No.2 did not defend the Suit no decree can be passed against the Defendant No.2. The submission is improper since the Plaintiff has alleged manipulation upon which the payment was made by the erstwhile JVC under instructions of Defendant No.2 as an advance payment. Rather than no cause of action being disclosed against Defendant No.2 and the Suit suffering from misjoinder of parties, a case of personal liability of 8 Defendant No.2 may well be brought out at the trial which is aside from any criminal liability for criminal breach of trust, misappropriation of property, fabrication of documents and the like. This is not a case of an employee acting upon the orders of his superiors simplicitor. Hence the anxiety to avoid facing the trial. The averments in the plaint alone disclose the cause of action. The defence itself may well substantiate them. 17.It need hardly be stated that after a case of the two defendants acting in association is averred, the Plaintiff may, upon the defence of the Defendants, call upon them to produce for its inspection the documents in support of such defence. Upon documents hitherto unknown, being produced, the Plaintiff would be well within his rights to amend the plaint to bring its further case on record. 18.There is more than what makes an eye. It is only upon evidence that the case of the Plaintiff that Defendant No.2 was a Loyalist or a RPG person and the case of the Plaintiff that the Defendants 1 and 2 would have acted in association to procure and produce the documents to justify the payments made would be shown. The case of the Plaintiff is indeed made in the plaint. It would be proved only at the trial. It would be a complete travesty of justice to turn a Nelson’s eye to what is disclosed though not earlier apparent when it was simply averred as the case of the Plaintiff against Defendant No.2. 19.The case for mis-joinder of the parties is, therefore, not made out. Rather Defendant No.2 is a necessary party to the Suit and would be required for 9 determination of the real controversy even between the Plaintiff and Defendant No.1. The Defendant No.2 has, therefore, been correctly joined in this Suit. The plaint cannot be struck off against the Defendant No.2. The plaint discloses a cause of action against the Defendant No.2 in paragraphs 11 and 12 thereof. The joint and several liability of both the Defendants is set out in paragraph 16 of the plaint. The cause of action has been shown in paragraph 21 of the plaint against the Defendant No.2. The judgments showing when the plaint would be rejected, relied upon by Mr. Ardeshir are not applicable to this case at all. 20.The Chamber Summons is dismissed. (SMT. ROSHAN DALVI, J.)