Case: Hanu Motel Pvt. Ltd. and Anr Vs. Uttar pradesh financial Corporation Ltd. and Anr

19. Having heard the learned counsel for the parties, in our opinion, the orders passed by the High Court cannot be sustained. It is clear that the suit was filed by two plaintiffs as early as in April, 2001. Plaintiff No. 1 was the Company and plaintiff No. 2 - Ram Raj Singh was shown to be a Director. An application under Order XXXIX of the Code was filed wherein interim relief was granted. Appeal against Order was filed by the Corporation and only in August, 2002, a Miscellaneous Application was filed by Ram Raj Singh to delete his name alleging that he had not singed the plaint and he was fraudulently described and shown as plaintiff No. 2 in the suit. It is unfortunate that the High Court decided the matter without hearing the present appellants, i.e. appellant No. 1-Company and appellant No. 2-Avdesh Kumar whose impleadment application was allowed on December 14, 2002 by the High Court and the High Court was, therefore, aware that he was very much on record. The learned counsel for the appellants is also right in contending that the High Court virtually decided the matter on the basis of one sided version of Ram Raj Singh who had alleged that fraud was committed against him. This is clear from what is stated by the High Court. 20. The High Court while disposing of the appeal inter alia observed; "The plaintiff No.2 in the suit is practicing advocate of the Lucknow Courts and is present in the Court. He made statement at Bar that he did not file any suit. The suit was filed by resorting to impersonation. He did not make signatures on the plaint and the affidavit. The plaintiff No.1 has not been arrayed through any of its Directors. The plaintiff No.2 has also not been mentioned in the array of parties to be the Director of the Company. In view of the statement made by Sri Ram Raj that he ha snot filed the suit in question and he is not prosecuting the suit, the suit is liable to be dismissed on behalf of plaintiff No.2 and the suit also cannot proceed on behalf of plaintiff No.1, as the Company ha snot been arrayed as party through any Director. Therefore, the suit is liable to be dismissed. Consequently the impugned order has merged in the order of dismissal of suit, which has rendered the appeal as infructuous. The appeal is dismissed accordingly as having become infructuous". 21. Granting liberty to Ram Raj Singh to take legal recourse against those persons who had played fraud upon him, the Court proceeded to state; "However, Shri Ram Raj, advocate is at liberty to take legal recourse against those persons who have played fraud upon him. Sri Ram Raj, advocate and learned counsel for the appellant have submitted that a fraud has been played to abuse the process of law, therefore, this Court may order the CBI to register a case against company and its Directors and investigate as to who has played fraud. Having regard to the seriousness of the fraud played, we direct the S.P., CBI to investigate the matter personally and prosecute the person who is found guilty in investigation. Record of the Civil Suit No.111 of 2001 shall be kept in sealed cover and shall be handed over during the course of investigation to S.P., CBI". 22. The counsel submitted that had an opportunity been afforded to the appellants, they could have shown that it was not correct that Ram Raj Singh had not signed the plaint or fraud had been committed by the Company or any officer of the Company. According to the learned counsel, on the contrary, CBI made the inquiry and submitted the report wherein it was specifically observed that Ram Raj Singh was not right when he asserted that he had not singed the plaint and that fraud was committed. According to CBI, it was Ram Raj Singh who had filed the suit, was shown as plaintiff No. 2 and it was his signature in the proceedings. 23. In our opinion, the learned counsel for the appellants is also right in contending that when present appellant No. 2 Avdesh Kumar was impleaded in December, 2002 as party and was very much on record in Appeal against Order, opportunity ought to have been afforded to him as to whether the Appeal from Order had become infructuous and whether the suit would not survive. To us, it appears that the High Court followed an easy path unknown to law when it rejected Review Petition on May 28, 2003 by recalling the order passed on December 11, 2002 virtually rectifying the order passed on May 6, 2003. In our considered opinion, the High Court ought to have extended an opportunity of hearing before passing order dated May 6, 2003 as also dated May 28, 2003 to appellant No.1-Company as well as to appellant No.2-Avdesh Kumar. 24. As to the report of CBI and prima facie case found against Ram Raj Singh in the investigation undertaken, it would not be appropriate to state anything one way or the other. Since we are of the view that both the orders passed by the High Court are liable to be set aside only on the ground of non-observance of natural justice, the matter should be remanded to the High Court for fresh disposal in accordance with law. Observations made by this Court may adversely affect one or the other party and it is not appropriate to express any such opinion. We are, however, convinced that both the orders dated May 06, 2003 and May 28, 2003 passed by the High Court are liable to be set aside. 25. In the result, both the appeals are allowed. Orders dated May 06, 2003 and May 28, 2003 are hereby set aside. The matters are remanded to the High Court for fresh decision in accordance with law after giving opportunity of hearing to all the parties.26.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]. In our opinion, the learned counsel for the appellants is also right in contending that when present appellant No. 2 Avdesh Kumar was impleaded in December, 2002 as party and was very much on record in Appeal against Order, opportunity ought to have been afforded to him as to whether the Appeal from Order had become infructuous and whether the suit would not survive. To us, it appears that the High Court followed an easy path unknown to law when it rejected Review Petition on May 28, 2003 by recalling the order passed on December 11, 2002 virtually rectifying the order passed on May 6, 2003. In our considered opinion, the High Court ought to have extended an opportunity of hearing before passing order dated May 6, 2003 as also dated May 28, 2003 to appellant No.1-Company as well as to appellant No.2-Avdeshto the report of CBI and prima facie case found against Ram Raj Singh in the investigation undertaken, it would not be appropriate to state anything one way or the other. Since we are of the view that both the orders passed by the High Court are liable to be set aside only on the ground of non-observance of natural justice, the matter should be remanded to the High Court for fresh disposal in accordance with law. Observations made by this Court may adversely affect one or the other party and it is not appropriate to express any such opinion. We are, however, convinced that both the orders dated May 06, 2003 and May 28, 2003 passed by the High Court are liable to be setthe result, both the appeals are allowed. Orders dated May 06, 2003 and May 28, 2003 are hereby set aside. The matters are remanded to the High Court for fresh decision in accordance with law after giving opportunity of hearing to all the parties.