1 caf1944 ssp IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELATE JURISDICTION CIVIL APPLICATION NO.1944 OF 2011 IN FIRST APPEAL ST.NO.13091 OF 2011 M/s.Srushti Raj Enterprises & Anr. ...Applicants vs. BEST CFS Pvt.Ltd. ...Respondent Mr.B.D.Joshi i/b Mr.V.S.Paradkar for the applicants Mr.Navin Parekh i/b Mr.A.M.Saraogi for the respondent no.1 CORAM : A.S.OKA,J. DATE : OCTOBER 13, 2011 P.C.: 1 Heard learned counsel for the applicants and the learned counsel for the first respondent. The prayer is for condonation of delay of 2 years and 43 days in preferring the First Appeal. The challenge in the Appeal is to the consent decree dated 20th February 2009. The Appeal along with this Application has been filed on 4th May 2011. The learned counsel for the applicants has invited the attention of the Court to the averments made in the application as well as averments made in the additional affidavit filed for explaining the delay. He pointed out that after verification of the accounts, the applicants realized that the respondents have played fraud while obtaining signatures on the consent terms with an evil design to extort the amount of Rs.3 crores and 41 lacs though nothing was payable by the applicants. He 2 caf1944 submitted that thereafter, the applicants were advised to file a Notice of Motion before the Trial Court for setting aside the decree. On legal advice, accordingly Notice of Motion was filed and on 20th April 2011, Notice of Motion was dismissed on the ground that the same is not maintainable. He pointed out that thereafter, the applicants again sought legal opinion and were advised to prefer an appeal in this Court. He pointed out that certified copy of the decree was applied for on 20th April 2011 and the same was ready on 29th April 2011. He pointed out that appeal along with the present application was immediately filed on 4th May 2011. He also invited the attention of the court to the reply filed by the applicants to the contempt Notice of Motion taken out by the first respondent. He placed reliance on the decision of the Apex Court in case of Coal India Limited and another vs. Ujjal Transport Agency and others [(2011) 1 SCC 117]. He also relied upon the decision of this Court in case of M/s.Savita Sadi Centre & Others Vs. Bank of Baroda [1998 (2)Bombay Cases Reporter 532]. He submitted that due to incorrect advice received by the applicants they had filed a Notice of Motion before the same Court and after rejection of the Notice of Motion immediately the applicants have approached this Court. He submitted that after the fraud was detected in May 2010, the applicants have taken appropriate steps. The learned counsel for the first respondent opposed the application for condonation of delay. 2 It must be borne in mind that the first applicant is a limited company and the second 3 caf1944 applicant is the private limited company. There is no dispute that the applicants have signed the consent terms on the basis of which the impugned consent decree was passed on 20th February 2009. 3 In the present application for condonation of delay, though there is absolutely no explanation whatsoever for the long delay of 2 years and 43 days, this Court by way of indulgence has permitted the applicants to file an additional affidavit to explain the delay. It must be borne in mind that the reply filed by the first respondent shows that the Notice of Motion was taken out by the first respondent-plaintiff being Contempt Notice of Motion no.1523 of 2009 for taking action against the applicants for committing contempt of the impugned decree. The said Notice of Motion was taken out by the original plaintiffs in September 2009. There is a reply filed to the said Notice of Motion by the applicants on 30th November 2009. It will be necessary to make a reference to what is stated in paragraph 9 of the said reply. In paragraph 9 the applicants have stated thus : 9 With reference to para nos.11 and 12, I say that the alleged information more particularly mentioned in Letter dated 23rd April 2009, is false and that after getting the said Consent Terms signed, the plaintiffs had evil designs to extort amount from the Defendants by taking advantage of the said Consent Terms drafted by the plaintiffs. I say that the Plaintiffs are not entitled to take inspection of the accounts 4 caf1944 maintained by the Defendants. I say that after getting the terms of the said Consent Terms being explained on its careful reading, the Defendants came to know that the Plaintiffs have deliberately and intentionally drafted the Consent Terms by incorrectly recording the amounts thereunder and that as such the Defendants had sent papers to their legal advisor for giving advise in relation to the said Consent Terms and that accordingly a Letter dated 4th May 2009 was address by the Defendants to the Plaintiffs. 4 Thus, the case made out by the applicants in the said reply dated 30th November 2009 to the contempt Notice of Motion is that after getting the consent terms signed, the first and second respondent had evil design to extort amount from the applicants. It is further stated that after getting the terms of the consent terms explained and after carefully reading the same, the applicants came to know that the plaintiffs have intentionally and deliberately drafted the Consent Terms by incorrectly recording the amounts therein. After realizing this fact, the applicants had sent the papers to the legal adviser for legal advice. In paragraph 6 of the said reply, it is contended that the amount of Rs.3 crores 41 lacs arrived at in the consent terms is not correct. In paragraph 6 it is stated thus : 6...I say that in fact, the accounts as mentioned in clause No.4 of the Consent Terms were never settled between the parties to the 5 caf1944 present suit and that the amounts due and payable by the Plaintiffs to the Defendants were not taken into consideration and that the amounts already paid by the Defendants to the Plaintiffs were also not taken into consideration while arriving at a figure of Rs. 3,41,00,000/-. I say that in fact, the Defendants were not liable to pay Rs. 3,41,00,000/- to the Plaintiffs as incorrectly mentioned in clause No.4 of the said Consent Terms. 5 Thus, in November 2009, even accordingly to the case made out by the applicants, they had realized that they were not liable to pay a sum of Rs.3 crores and 41 lacs which is incorrectly mentioned in clause 4 of the consent terms. Paragraph 9 clearly records that after realizing this fact, the papers were sent by the applicants to the legal advisor for legal advice. On this background, it will be necessary to test the averments made in this application and additional affidavit. In the application, there is absolutely no explanation for delay. In the additional affidavit filed to explain the delay, the only material averment is in paragraph 6 which reads thus : 6 I say that in the meanwhile on verifying the accounts, the Applicants shocked to learn in the month of May 2010 that the Respondents played fraud and falsely claimed the amount of Rs.341 lacs, in fact as per accounts, there was nothing due and payable by the Applicants to the 6 caf1944 Respondents therefore the Applicants sought legal advice from their lawyers as to what steps and remedy are available to them, challenging the consent terms as the same was obtained by the Respondents by playing fraud... 6 Thus, now in paragraph 6 of the additional affidavit, the applicants want to say that in the month of May 2010, they realized that the respondents falsely claimed a sum of Rs.3 crores and 41 lacs and in fact the said amount was not due and payable. The additional affidavit filed on 30th November 2009 discloses that when the said affidavit was filed, the applicants were aware that they were not liable to pay Rs.3 crores and 41 lacs as stated in clause (4) of the consent terms. In fact, the affidavit in reply discloses that prior to filing of the said affidavit in November 2009, the applicants had taken legal advice. On their own showing, the applicants aware of this fact prior to 30th November 2009. In the additional affidavit filed in this Court, now the applicants want to contend that for the first time in May 2010, they realised that the amount of Rs.3 crores and 41 lacs was not payable by them. However, the Notice of Motion for setting aside decree was filed belatedly in September 2010. Thus, the statement made in paragraph 6 that the applicants realized that the amount is not payable for the first time in May 2010 is far from being true as seen from their own affidavit filed in the Trial Court way back in 30th November 2009. It is pertinent to note that though at least in November 2009, the applicants were aware that they were not 7 caf1944 liable to pay the amount mentioned in clause (4) of the consent terms, the Notice of Motion for setting aside the consent decree was moved on 29th September 2010. Thus, the averments made in clause (6) of the additional affidavit show that the applicants have approached this Court by the present application with a case which is not true. Thus, the applicants have not approached this Court with clean hands and they have tried to come out with a false case that they realized that the amount was not payable for the first time in May 2010. The applicants are not lay persons. The applicants are companies registered under the Companies Act,1956. 7 It is true that a liberal approach for deciding the application for condonation of delay is contemplated. But the Court has also to adopt a justice oriented approach. In the application for condonation of delay of more than 2 years if it is demonstrated the case made out by the applicants is not true, surely the Court cannot take a liberal view and condone the delay of more than two years. The argument based on incorrect advice received in June and September 2010 cannot be accepted as affidavit in reply to the contempt Notice of Motion shows that at least in November 2009, the applicants were fully aware about the alleged fraud and they had already taken the legal advice for the same. 8 Hence, no case is made out for condonation of delay. Application is rejected. JUDGE