Supreme Court of India
STANDARD CHARTERED BANKversusANDHRA BANK FINANCIAL SERVICES LTD & ORS.
- Citation
- 2015 INSC 618
- Decided
- 28 August 2015
- Disposal
- Appeal(s) allowed
- Bench
- V GOPALA GOWDA
Holding
The limitation period for a conversion suit under Article 91(a) begins when the plaintiff first acquires specific knowledge of the identity of the person in possession of the specific movable property; in this case that date was 7 November 1992, so the suit is not barred.
Summary
Standard Chartered Bank (SCB) bought 17% NPCL bonds from Andhra Bank Financial Services Ltd (ABFSL) and later discovered that the bonds had been misappropriated by broker Hiten P. Dalal and Canara Bank Mutual Fund (CMF). SCB filed a suit for conversion and amended it to implead Dalal and CMF, but the Special Court held the suit barred by limitation under Article 91(a) of the Limitation Act, 1963. The Supreme Court interpreted "first learns" to require specific knowledge of the identity of the person possessing the movable property, and found that SCB first learned of the conversion at a meeting on 7 November 1992. Consequently, the limitation period began on that date, not on earlier dates suggested by the respondents, and the suit was not time‑barred. The Court set aside the Special Court’s limitation finding, allowed the appeal, awarded the principal sum of Rs 50,18,61,250 with interest at 6% per annum from 10 January 1996, and ordered costs.
Issues considered
- The meaning of "first learns" under Article 91(a) of the Limitation Act, 1963.
- Whether Article 91(a) applies to the NPCL bonds as specific movable property.
- The correct date from which the limitation period for a conversion suit should commence.
- Whether the suit filed by SCB is barred by limitation.
- Entitlement to interest and costs under the CPC.
Legislation cited
- Code of Civil Procedure, 1908s. Section 34
- General Clauses Act, 1897s. Section 3(36)
- Indian Evidence Act, 1872s. Section 159, s. Section 160
- Limitation Act, 1963s. Article 91(a)
- Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992
Subjects
Limitation ActArticle 91(a)first learnsconversionspecific movable propertysecurities scamNPCL bondsinterest awardamendment of suitspecific denial
Judgment
[2015] 14 S.C.R. 993
STANDARD CHARTERED BANK A
v.
ANDHRABANK FINANCIAL SERVICES LTD &ORS.
(Civil Appeal Nos. 9540-9541 of 2010)
B
AUGUST 28, 2015
[V.GOPALAGOWDAAND R. BANUMATHI, JJ.]
Special Court . (Trial of Offences Relating to
Transactions in Securities) Act, 1992 - Limitation Act, 1963
- Article 91 (a)- Securities Scam in Bombay Stock Exchange C
in 1992 - Transaction occurring as part of the same scam -
Appellant-SCB filed suit against respondent no. 1-ABFSL for
recovery of principal amount, representing the consideration
paid by appellant to respondent no. 1 against purchase of
17% NPCL bonds - Subsequently, appellant filed application. D
for amendment of the suit and to include Hiten P. Dalal and
Canara Bank Mutual Fund (CMF) as party respondents and
to file claim against the said respondents (respondent nos.
2 to 10) in the alternative to the claim preferred by appellant
against respondent no. 1 - The Special Court constituted E
under the 1992 Act came to the conclusion that appellant-
. sea had succeeded in proving that they had purchased 17%
taxable NPCL bonds; that Hiten P. Dalal had not succeeded
in proving that he was the owner of the suit bonds, and that
appellant-SCB was entitled to file a suit for conversion against F
Hiten P. Dalal and CMF - The Special Court, however,
declined to grant any relief to the appellant on the ground
that the suit was barred by limitation - Meaning of the term
"first learns" as provided under Article 91 (a) of the Limitation
Act- Date on which the period of limitation starts running for G
institution of suit against the respondent Nos. 2-10- Held:
The suit bonds in the instant case were specific moveable
property to which Article 91 (a) of the Limitation Act applies-
Article 91 (a) of the Limitation Act stipulates that the period of
H
993
994 SUPREME COURT REPORTS [2015] 14 S.C.R.
A limitation shall start running from the date when the person
'first learns' about the conversion of the moveable property-
/( is difficult to construe the word "first learns" without attributing
to it certain degree of knowledge - The knowledge must be
of the identity of a specific person in whose possession the
B bonds are and that he acquired the possession of the said
bonds under an arrangement, which in law would constitute
wrongful conversion - On facts, the amendment to thE1 suit to
implead CMF and Hiten P. Dalal was effected on 20. 10. 1995
vide a Chamber Summons - The case of the appellant is
C that it was during a meeting held on 07.11.1992 that they first
learnt that the suit bonds had been misappropriated by Hiten
P. Dalal and given to CMF - It is manifestly clear from
examination of the deposition of PW-3 and PW-4 that a
meeting did in fact occur on 07.11.1992- The Special Court
D erred in coming to the conclusion that no meeting occurred
on 07. 11. 1992 -A perusal of the record prepared by PW-3,
makes it amply clear that it was during this meeting on
07.11.1992 that CMF first admitted to SCB regarding the
dummy sale involving the 9% NPCL bonds and 17% NPCL
E bonds·- Thus, a meeting did in fact take place in the office of
CMF on 07.11.1992, and that it was on this date that
appellant-SCB found out about the dummy transaction that
had taken place between CMF and Hiten P. Dalal regarding
the 9% and 17% NPCL bonds - The period of limitation would
F start running only on 07.11.1992 - The period of limitation
according to Article 91 (a) of the Limitation Act for filing a suit
for compensation for conversion of property is three years
from the date on which the person having the right to
possession of the property learns in whose possession it is -
G Accordingly, finding of fact recorded by the Special Court
that the suit was barred by limitation set aside - Appellant
entitled for decree of suit claim of the principal amount
adjudged as on the date of the institution of the suit-Appellant
a/so entitled to interest pendente lite and future interest -
H This transaction can be termed as a commercial transaction
STANDARD CHARTERED BANK v. ANDHRA BANK 995
FINANCIAL SERVICES LTD.
and s.34 CPC confers discretionary power upon this Court A
to award interest at appropriate rate on the suit claim of the
appellant- The suit in the instant case was instituted before
the Special Court on 27.11.1992, but the respondent nos.2-
10 were brought-on record as parties to the suit by way of an
amendment, which was allowed on 10. 01. 1996 :- Therefore, B
it would be appropriate to award interest from the above said
date during pendency of the proceedings before the Special
Court and this Court and also for future rate of interest at 6%
per annum till the date of realisation - Respondent nos. 2-10
directed to pay the adjudged principal sum of C
Rs.50, 18,61,250.00 along with interest at the rate of 6% per
annum from 10.01.1996 till the date of realisation with suit
costs throughout for having converted the suit bonds - The
above respondents shall be jointly and severally liable to
pay the same to the appellant. D
Standard Chartered Bank v. Andhra Bank Financial
Services Ltd. (2006) 6 SCC 94 : 2006 (2) Suppl.
SCR 1; K.M Talyarkhan v. Gangadas Dwarkadas
(1935) ILR 60 Born 848; Sarai Kamini Das v.
Nagendra Nath Pal AIR 1926 Cal 65; Hari Mohan E
Dalal v. ParameshwarShau AIR 1928 Cal 646;
Lewis Pugh Ewans v. Ashutosh Sen & Ors. AIR
1929 PC 69; K.S Nanji and Company v.
Jatashankar Dossa & Ors. AIR 1961 SC 1474:
1962 SCR 492; Ba/raj Taneja v. Sunil Madan F
(1999) 8 sec 396 : 1999 (2) suppl. scR 258 -
referred to.
Case Law Reference
2006 (2) Suppl. SCR 1 referred to Para 7 G
(1935) ILR 60 Born 848 referred to Para 13
AIR 1926 Cal 65 referred to Para 14
AIR 1928 Cal 646 referred to Para 14
AIR 1929 PC 69 referred to Para 17
H
•
996 SUPREME COURT REPORTS [2015] 14 S.C.R.
A '1962 SCR 492 referred to Para 18
1999 (2) Suppl. SCR 258 '
referred to Para 27
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
9540-9541 of 201 0
B From the Judgment and Order dated 13.07.201 O and
07 .10.2010 of the Special Court of Mumbai constituted under
the Special Court (Trial of offences relating to Transactions in
Securities) Act, 1992 in Suit No. 6of1994.
Ram Jethmalani, Sr. Adv., Ms. Parul Shukla, Mahesh
c Agarwal, Rishi Agrwala, E. C. Agrawal a, Sha shank Manish,
Advs. for the Appellant.
Rohit Kapadia, Pradeep Sancheti, Sr. Advs., Anupam
Lal Das, Ms. Sunita Dutt, Shrinivas Deshmukh, Siddharth
Thacker, Shashank Trivedi, Anupam Lal Das, Subramonium
D Prasad, Ms. V. D. Khanna, Karanjawala & Co., Advs. for the
Respondents.
The Judgment of the Court was delivered by •
V. GOPALA GOWDA, J. 1. The Securities Scam that
shook the Bombay Stock Exchange in 1992 took place 23
E years ago, yet the Banks and Financial Institutions that were
impacted as a result of the scam continue to litigate to recover
their rightful damages. The present appeals filed under Section
10 of the Special Court (Trial of Offences Relating to
Transactions in Securities)Act, 1992 arise out of a transaction
F which occurred as a part of the same scam, which have been
filed against the impugned judgment and order dated
13.07.2010, as modified by the order dated 07.10.2010 in
Suit No. 6 of 1994, passed by the Special Court, Bombay,
constituted under the above Act.
G The relevant facts which are required for us to appreciate
the rival legal contentions are stated in brief hereunder:
2. The National Power Corporation Limited (hereinafter
"NPCL") issued bonds of two series in December, 1991.
H These were the 9% tax-free bonds and 17% taxable bonds.
On 26.02.1992, the said bonds were allotted by NPCL to the
•
STANDARD CHARTERED BANK v. ANDHRA BANK 997
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
Andhra Bank Financial Services Limited (hereinafter A
"ABFSL"), respondent no. 1 herein. On the same day, ABFSL
sold the 17% taxable bonds of the face value of Rs. 50 crores
to the appellant-Standard Chartered Bank (hereinafter "SCB").
The total amount payable to Af?FSL was Rs.48,02,50,000/-
which was paid by way of Pay Order on the same day. A B
Banker's Receipt No. 23727 was issued to the appellant by
the ABFSL acknowledging the said payment. The receipt also
stated that the delivery of the bonds would be done later.
3. On 26.02.1992, SCB sold 17% bondsofthefacevalue
of Rs. 50 crores to ANZ Grind lays Bank (hereinafter "ANZ"). C
SCB issued a Bank Receipt No. 1939 to ANZ in lieu of the
actual possession of the bonds. On 27 .02.1992, ABFSL
forwarded the original letter of allotment to SCB and sought
the return of the Banker's Receipt No: 23727. On the same
date, SCB returned the Banker's Receipt No. 23727 to D
ABFSL. SCB states that as against the return of the said Bank
Receipt, it only received a photocopy of the original letter of
allotment. On 27.02.1992, Hiten P. Dalal, a broker who was
acting in a large number of securities transactions of banks
and financial institutions obtained the possession of the said E
original letter of allotment and delivered it to Canara Bank
Mutual Fund (hereinafter "CMF"). On 17.03.1992, CMF sold·
the 17% NPCL bonds of the face value of Rs. 50 crores to
SCB. CMF issued a Receipt No. 2767 to SCB Bank in lieu of
the original letter of allotment. According to SCB, when the F
Securities Scam came to limelight in May, 1992, the officers
of SCB conducted an investigation of its records and found
that SCB did not possess the original letter of allotment but
had only its photocopy with it. .On 09.10.1992, SCB wrote a·
letter to NPCL stating that as the suit bonds had been issued G
to ABFSL, which had further confirmed that the same has been
sold to SCB and therefore, the letter of allotment from CMF
may be disregarded. NPCL informed SCB on 06.11.1992 that
since there was a dispute of ownership of the suit bonds
between SCB and CMF, the matter should be resolved H
998 SUPREME COURT REPORTS [2015] 14 S.C.R.
A between SCB and CMF and that it would take the necessary
action only after such resolution.
4. On 20.06.1992, SCB filed a First Information Report
against the broker Hiten P. Dalal and requested the Central
Bureau of Investigation to inquire into the scam perpetrated
B on SCB by Hiten P. Dalal.
5. On 27 .11.1992, SCB filed Suit No. 6 of 1994 against
ABFSL for the recovery of the principal amount of
Rs.48,02,50,000.00, representing the consideration paid by
SCB to ABFSL against the transaction of purchase of 17%
C NPCL bonds of the face value of Rs. 50 crores.
6. Pursuant to the FIR dated 20.06.1992, the CBI filed a
charge sheet on 16.06.1995. On 20.10.1995, SCB filed an
application for amendment of the suit and to include Hiten P.
D Dalal and CMF as party respondents and to file claim against
the said respondents in the alternative to the claim preferred
by SCB against ABFSL.
7. It is pertinent to mention at this stage that a suit was
filed in relation to the 9% bonds, which culminated in the
E judgment of this Court in the case of Standard Chartered
Bank v. Andhra Bank Financial Services Ltd. 1 In the present
suit relating to the 17% bonds,. the learned Special Court
framed and answered the following issues for its consideration:
,----
Issues Answer
F Between PLAINTIFFS and CMF
1. Whether the suit as against In the
Defendants No. 3-10 (CMF) is affirmative
barred by limitation
i 2. Whether the Defendant No. 2 (H~en In the
G P. Dalal) in collusion with one of the negative
employees of the Plaintiff (viz.
Santosh Mulagaonkar) fraudulently
misappropriated the Suit LOA as
alleqed in para 6A (iii) of the Plaint? I ...
H 1
(2006) 6 sec 94
STANDARD CHARTERED BANK v. ANDHRA BANK 999
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
~
3. Whether the Plaintiffs were In the A
unaware that the series of negative
transactions involving CMF, ANZ,
ABFSL and the Plaintiffs
themselves were "based on the
very same Letter of Allotment" as B
alleged in para 7 of the plaint?
.
4. Whether the Plaintiffs prove that In the
they had purchased 17% taliable affirmative
NPCL Bonds on 25th
c
February, 1992 of the FV of Rs. 50
crores from ABFSL or acquired any
title to the Suit LOA as alleged by
the Plaintiffs in para 5 of the Plaint?
D
5. Whether the Plaintiffs prove that In the
CMF chose to issue its BR with a negative
view to conceal the alleged
"misappropriation" of Bonds as
alleged in para 7D and 7E of the
Plaint? E
6. Whether the Plaintiffs prove that on In the
09.04.1992 there was a "hole" affirmative
pertaining to the transactions of
26.02.1992 between the SCB and F
ABFSL as alleged in para 7H of the
Plaint?
7. Whether the Plaintiffs prove that In the
the dealers of the Plaintiffs entered affirmative G
into a dummy transaction dated
10.04.1992 with the ABFSL to
cover up the said "hole" as alleged
in para 7(1) of the Plaint?
H
1000 SUPREME COURT REPORTS [2015] 14 S.C.R.
A ·--·· ·-··
8. Whether CMF have converted
the bonds/ Letter of Allotment as
alleged in para 6A & 7(k) of the
l In the
affirmative
Plaint?
B -----
9. Whether the Suit transaction and In the
the transactions referred to in negative
para 7 (a), 7(f) and 7(g) of the
Plaint reflect that the same were
c fictitious transactions for funding
and/or they were transactions
involving difference between the
; actual rate (as transacted) and
the derived rate as alleged in
para 25 and 27 of the further
D Written Statement?
c-,c~c-c----- · ------t· - --
10. If the answer to the above issue •In the
is in the affirmative whether sudi negative
I transactions are illegal and/or
E , opposed to the public policy?
i
11. Whether the contention that the In the
transactions are opposed to affirmative
public policy is barred by the
F principles of res judicata and or
constructive res judicata having
regard to the judgment of the
Special Court dated 13.03.1995
in Suit No. 13 of 1994 and the
G decision of the Supreme Court in
CA 4456/95 dated 301h October
2001 and in CAs Nos. 2275 &
2276 dated 051h May 2006?
H
STANDARD CHARTERED BANK v. ANDHRA BANK 1001
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
- A
12. Whether Hiten P. Dalal was the Does not
broker for ABFSL in the alleged suit Arise
transaction and ABFSL handed over
the original Letter of Allotment to HPD
as alleged in para 6 (c) and 11(a) of B
the Plaint?
13. Whether SCB are stopped from In the
making any claim as alleged in para 2 affirmative
read with 'para 14 of the Written
Statement of CMF? ·c
' 14. Whether CMF proves that it had on In the
27th February, 1992 purchased the negative
17% NPCL bonds through Hiten P.
Dalal who was allegedly acting as a D
mercantile agent of SCB and/or
ABFSL for consideration in good faith
and without notice as alleged in
paragraph 11 of the Written
Statement of the said Defendant? E
15: Whether the transactions under the In the
15% arrangement were transactions negative
of HPD and not of SCB and HPD was
entitled to deal with bonds at his
F
discretion as alleged in para 7(g) of
CMF's Written Statement?
16. Whether CMF'S allegations that In the
transactions under 15% arrangement affirmative
were transactions of HPD, are barred G
-by res judicata by the judgment of the
Special Court in Suit No. 13/94 dated
13.03.1995 and the decision of the
H
1002 SUPREME COURT REPORTS [2015] 14 S.C.R.
A Supreme Court in CA No. 4456 of In the
1995 dated 30.10.2001 as !'llleged in affirmative
para 7(L) (i) to 7(L)(v) of the Plaint
and denied in paras 32, 33 and 34 of
the additional Written Statement and
B by the judgment of the Supreme
Court dated 05.05.2006 in Appeal
from Suit No. 11 of 1996 as alleged in
paras 7(L)(vii) to 7(L)(xv) of the
Plaint?
c 17. Whether CM F's allegation that the i In the
transactions of the Plaintiff under the I affirmative
15% arrangement were actually
transaction of Hiten P. Dalal, is barred
by constructive res judicata as
D alleged in para 7(L)(v) of the Plaint
and denied in para 36 of the
additional Written Statement?
18. Whether the issue of payment of In the
consideration by the CMF for affirmative
E acquisition of bond on 27.12.1992 is
barred by virtue of the principles of
res judicata as alleged in para 11 (e)
of the Plaint?
F 19. Whether the Defendants Nos. 3-10 In the
are jointly and severally liable to pay ! negative
to SCB the sum of Rs. i
55,26, 16,438.36 as per the particulars
of the Claim together with further
interest· on principle sum of Rs.
G 48,02,50,000.00 @ 20% per annum
from 28th November, 1992 till
payment and/or realisations?
\-------------------+-------
20. What relief? As per
H Order
STANDARD CHARTERED BANK v. ANDHRABANK 1003
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
A
Between PLAINTIFFS AND HPD
1. Whether the Plaint fails to disclose In the
any cause of action against HPD as affirmative
alleged in para 1 of the Written
Statement of HPD?
2. Whether the suit is barred by In the B
limitation as against Defendant No.2 affirmative
as alleged in para 2 of the Written
Statement of Defendant No. 2
3. Whether the allegations of HPD that In the
the Letter of Allotment was lent to him affirmative c
on 27th February, 1992 and/or that he
purchased the same on 9th May, 1992
in the circumstances and manner set
out in para 4 of his written statement
are barred by res judicata as alleged D
in para 68 of the Plaint?
4. Whether Hiten P. Dalal is jointly and In the
severally liable along with CMF to pay negative
to SCB the sum of Rs.
55,26, 16,438.36 as per the particulars E
of claim together with further interest
on principal sum of Rs.
48,02,50,000.00 @ 20% p.a. from
28th November, 1992 till payment
and/or realisation? F
5. Whether SCB is entitled to any relief In the
and if, what? negative
G
As can be seen from the above table with regard to the issues
framed by the learned Special Court, it came to the conclusion
that SCB has succeeded in proving that they had purchased
~7% taxable NPCL bonds. The learned Special Court also
found that Hiten P. Dalal had not succeeded in proving that he H
1004 SUPREME COURT REPORTS [20j5] 14 S.C.R.
A was the owner of the suit bonds, and that SCB was entitled to
file a suit for conversion against Hiten P. Dalal and CMF.
8. The learned Special Court, on appreciation of the
pleadings and evidence produced before it, however, declined
to grant any relief to the appellant on the ground that the suit
8 was barred by limitation. The amendment to the suit to implead
CMF and Hiten P. Dalal was done on 20.10.1995. The learned
Special Judge held:
"The period of limitation had started running from
c either 18.03.1992 and further from 23.05.1992. The
amendment application for impleading defendant
Nos. 2 to 10 was filed on 20.10.1995 and,
therefore, if the period of limitation is calculated
from 18.03.1992 or 23.05.1992, the said period
D expires either on 18.03.1995 or 23.05.1995. I have
already given my reasons as to why 07.11.1992
cannot be treated as a date on which the Plaintiffs
came to know about the conversion by Hiten P.
Dalal in favour of CMF, and therefore, the Plaintiffs
E in my view have miserably failed in filing the suit
within a period of limitation."
9. On the issue of limitation, the main question that the
learned Special Court had to answer as to whether the provision
of Article 91 (a) of the Limitation Act, 1963 (hereinafter "the
F Limitation Act") would apply to the instant case. To answer that
question, the learned Special Court had to interpret the
meaning of the phrase "first learns". The contention raised
before the Special Court by the learned senior counsel for the
defendants was that the word "learn" cannot be construed as
G complete knowledge for the reason that if the legislature had
intended to use the word knowledge as in Articles 56 to 59, it
would have done so. It was submitted that the word
"knowledge" cannot be given to the word "learn" in Article 91
of the Limitation Act. The learned Special Court had to decide
H
STANDARD CHARTERED BANK v. ANDHRA BANK 1005
FINANCIAL SERVICES LTD. [V. GOPALAGOWDA, J.]
whether the period of limitation will be ascertained from A
07 .11.1992 as contended by the plaintiff, or the three earlier
dates 18.03.1992, 10.04.1992 or 23.05.1992. The learned
Special Court after examining the pleadings and evidence on
record came to the conclusion that the period of limitation
cannot be said to have started running on 07.11.1992 as the B
plaintiff had not succeeded in establishing the happening of
any meeting on that cfate. The learned Special Court came to
the conclusion that the period of limitation for institution of the
suit started running on 18.03.1992 as that was the date of the
transaction between ABFSL and ANZ. The Special Court also C
held that the next date when the plaintiff could have possibly
found out about the conversion of the bonds was 23.05.1992
as that was the date on which Hiten P. Dalal had himself
informed the plaintiffs of the conversion of ihe suit bonds during
a meeting. D
10. The learned Special Court thus, while accepting the
fact of conversion of the bonds in question, dismissed the suit
as against Hiten P. Dalal and CMF as the said amendment
was barred by limitation. Hence the present appeals are filed
by the appellants urging various grounds. E
11. We have heard Mr. Ram Jethmalani, the learned
senior counsel on behalf of tl")e appellant and Mr. Rohit Kapadia
and Mr. Pradeep Sancheti, the learned senior counsel on
behalf of the respondents. On the basis of the factual F
circumstance and evidence on record produced before the
Special Court and also in light of the rival factual and legal
contentions raised by the learned senior counsel for both the
parties, we have broadly framed the issues which would require
our consideration. Since the only issue in contention before G
us is that of limitation, we shall restrict our attention to that only.
The main legal questions which arise in this case are-
1. What is the meaning of the term "first learns" as
provided under Article 91 (a) of the Limitation Act,
H.
1006 SUPREME COURT REPORTS [2015] 14 S.C.R.
A 1963, and whether the said provision would apply to
the facts of the present case?
2. Whether 07 .11.1992 is the date on which the period
of limitation starts running for institution of suit against
the respondent Nos. 2-10, or is it an earlier date?
B 3. What order?
Answer to Point 1:
12. We need to examine the provision of Article 91 (a) of
the Limitation Act to understand the issue at hand.Article 91 (a)
C of the Limitation Act reads thus:
-- - T ' i - - ------·-
Description of Suit Period of Time from which
Limitation period begins to
run
1-=-c-=------.,,,---- ~----+---------,
D 91.For compensation,- Three When the person'
years having the right
a) For wrongfully taking or to the possession
detaining any specific of the property
movable property lost, or first learns in
acquired by theft, or whose
E dishonest misappropriation, I! possession it is.
or conversion
~----------~---~
(emphasis laid by this Court)
13. Mr. Ram Jethmalani, the learned senior counsel
F appearing on behalf of the appellant, contended that while
construing Article 91 (a) of the Limitation Act, Column 1 and
Column 3 of Article 91 (a) have to be read in conjunction with
one another. He further contended that the knowledge required
under Article 91 (a) is knowledge of some definite person who
G can be identified and against whom effective reliefs for
restoration of property in question can be obtained. The
knowledge must be such that as would afford to a claimant a
cause of action against the party to be sued. The learned senior
counsel further contended that mere suspicion, surmise or
H conjecture is not knowledge. The belief must almost be certain.
STANDARD CHARTERED BANK v. ANDHRA BANK 1007
FINANCIAL SERVICES LTD. [V. GO PALA GOWDA, J.]
The court must find that the plaintiff had, on credible evidence, A
reached a fair conclusion about the existence of a cause of
action against an identifiable defendant. The learned senior
counsel placed reliance upon the case of K.M Talyarkhan v..
. Gangadas Dwarkadas 2 , delivered by Justice Rangnekar of
the Bombay High Court in which it was held as under: B
"the words whose possession means the
possession of some definite person who can be
identified and against whom effective relief for
restoration of the property in question can be
obtained." C
14. The learned senior counsel further contended that
reference to 'the person in possession' in column 3 of Article
'J1(a), indicates that the knowledge is one which must be of
such person who on the information derived can reasonably
be sued. The learned senior counsel placed reliance on three D
judgments for the same. The first was the case of Muthu
Koraki Chetty & anr. v. Mahamad Madar Amma/ & ors.
(supra), wherein it was held as under:
"Therefore, in my opinion the true rule deducible from
these various decisions of the Juridical Committee is E
this: that subject to the exemption, exclusion, mode of
computation and excusing of delay, etc., which are
provided in the Limitation Act, the language of column 3
Schedule 1 should be so interpreted as to carry out the
true intention of the legislature, that is to say, by dating F
the cause of action from a date when the remedy is
available to the party."
The learned senior counsel also placed reliance on the case
of Sarat Kamini Das v. NagendraNath Pa/3 decided by the G
judicature of Calcutta High Court wherein it was held as under:
"In such a case at the time when the cause of action
arises there is no person capable of suing upon it,
2 (1935) ILR 60 Born 848
3
AIR 1926 Cal 65 H
1008 SUPREME COURT REPORTS [2015] 14 S.C.R.
A the statute does not run: similarly it is necessary
that there shall ne a person to be sued; and it is
also necessary that the cause of action should not
be completed, that is all the facts must have
happened which are material to be proved in order
B to entitle the Plaintiff to succeed. This should of
course be borne in mind in interpreting the intention
of the legislature as expressed in the Articles of the
Act itself, or rather in such of them as admit of a
consideration of the question as to when a cause
c of action arises."
The learned senior counsel on behalf of the appellants further
placed reliance on the case of Hari Mohan Dalal v.
Parameshwar Shall', wherein Chief Justice Rankin authoring
a full bench judgment had held as under:
D "The old English statute of Limitation had been
content to prescribe the period by putting as the
limits so many years after the cause of action. The
Indian legislature endeavor in detail by the
Limitation Act to state in the third column of the
E Schedule, the event which is to be taken as
completing a cause of action that is the date from
the time begins to run. The language of this column
of the schedule should in general, if not indeed
always, be so interpreted as to carry out the true
F intention of the legislature, that is to say, to date the
cause of action from the date on which the remedy
is available to the party."
Thus, the contention of the learned senior counsel appearing
G on behalf of the appellant, Mr. Ram Jethmalani is essentially
that Column 3 of Article 91 (a) must be read with Column 1. It
leads to the indisputable contention that knowledge must be
of the identity of a specific person in whose possession the
bonds are and that he acquired the possession of the said
H 4
AIR 1928 Cal 646
STANDARD CHARTERED BANK v. ANDHRA BANK 1009
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
bonds under an arrangement, which in law would constitute A
wrongful conversion.
15. On the other hand, the learned senior counsel
appearing on behalf of the respondents, Mr. Rohit Kapadia
and Mr. Pradeep Sancheti contend that Article 91 (a) of the
Limitation Act is not applicable to the facts of the instant case B
as it is applicable only to "specific movable property" and that
bonds are not specific movable property but chose in action.
Chose in action is not a thing and is not capable of being
possessed. The learned senior counsel placed reliance on
the case of Standard Chartered Bank v. Andhra Bank C
Financial Services Ltd & Ors. 5 wherein it was held as under:
" ...... a chose in action is not a thing, as, by
definition, it is not in the possession of someone,
but that possession has to be acquired by some
joint which is why it is called a chose-in-action." D
The learned senior counsel contends that Article 91 (a) of the
Limitation Act deals with specific movable property which is
capable of being possessed. Thus, movable property to be
covered under the purview of Article 91 (a) must fulfill two E
criteria. Firstly, it must be specific, and secondly, it must be
capable of being possessed.
16. We are unable to agree with the contention of Mr.
Rohit Kapadia and Mr. Pradeep Sancheti, the learned senior
counsel appearing on behalf of the respondents. The suit F
bonds in the instant case are movable properties which are
capable of being possessed. The definition of the term
movable property can be found in Section 3(36) of the General
Clauses Act, 1897 which reads thus-
G
"movable property, shall mean property of every
description, except immovable property."
A reading of the sub-Section of the above provision makes it
clear that everything that is not immovable is movable, and
' (2006) 6 sec 94, para 84 H
1010 SUPREME COURT REPORTS [2015] 14 S.C.R.
A thus the suit bonds in the instant case are specific moveable
property to which Article 91 (a) of the Limitation Act applies.
17. Mr. Rohit Kapadia and Mr. Pradeep Sancheti, the
learned senior counsel appearing on behalf of the
respondents, further contend that conversion for the purpose
8 of Article 91 (a) cannot be divided into 'honest conversion' and
'dishonest conversion'. The learned senior counsel placed
reliance on the case of Lewis Pugh Ewans v. Ashutosh
Sen & Ors. 6 in which it was held that:-
"Article 48 alone refers to conversion and their
c · lordships can see no .ground for a splitting up
conversion into two clauses, one dishonest and the
other no dishonest."
The learned senior counsel appearing on behalf of the
0 respondents contend that the distinction sought by SCB on
the nature or degree of knowledge is no distinction in the eyes
of law and is of no consequence so far as "first learns" as it
appears under Article 91 (a) of the Limitation Act, 1963.
18. We are unable to agree with this contention advanced
E by the learned.senior counsel on behalf of the respondents. A
perusal of Article 91 (a) of the Limitation Act shows that it is
meant to apply to specific movable property. It further stipulates
that the period of limitation shall start running from the date
when the person 'first learns' about the conversion of the
F moveable property. While it is true that the word used in the
said Article is "first learns" and not knowledge, it is difficult to
construe the word "first learns" without attributing to it certain
degree of knowledge. The degree or the extent of knowledge
is the subject matter of controversy in the instant case. The
G Article 91 (a) of the Limitation Act was the subject matter of
controversy also in the case of K.S Nanji and Company v.
Jatashankar Dossa &Ors. 7 wherein the terms of the Article
were interpreted by this Court as under:
6
AIR 1929 PC 69
H 7
AIR 1961SC1474
STANDARD CHARTERED BANK v. ANDHRA BANK 1011
FINANCIAL SERVICES LTD. [V. GO PALA GOWDA, J.]
"The article says that a suit for recovery of specific moveable A
property acquired by conversion or for compensation for
wrongful taking or detaining of the suit property should be filed
within three years from the date when the person having the
right to the possession of the property first learns in whose
possession it is. The question is, on whom the burden to prove B
the said knowledge lies? The answer will be clear if the article
is read as follows: A person having the right to the possession
of a property wrongfully taken from him by another can file·a
suit to recover the said specific moveable property or for
compensation therefore within three years from the date when C
he first learns in whose possession it is.. Obviously where a
person has a right to sue within three years from the date of
his coming to know of a certain fact, it is for him to prove that
he had the knowledge of the said fact on a particular date, for
the said fact would be within his peculiar knowledge." D
(emphasis laid by this Court)
The provision of Article 91 (a) of the Limitation Act thus demands
two things. First is knowledge on the part of the plaintiff, and
second, that the said fact be within his peculiar knowledge.
We agree with the contention advanced by Mr. Ram Jethmalani, E
the learned senior counsel on behalf of the appellant, that the
term ''first learns" places a burden of knowledge which is rather
specific in nature. Thus, the knowledge must be of the identity
of a specific person in whose possession the bonds are and
that he acquired the possession of the said bonds under an F
arrangement, which in law would constitute wrongful
conversion. The knowledge of a specific person against whom
the suit can be instituted is what is crucial here. A mere
suspicion or a whisper of knowledge is not enough for the
period of limitation to start running. Point number 1 is thus, G
answered accordingly.
Answer to Point No; 2
19. Now that we have estahlished that the burden of proof
on the plaintiff as to the degree of knowledge is that of specific H
1012 SUPREME COURT REPORTS [2015) 14 S.C.R.
A knowledge with regard to a specific person in whose
possession the bonds were, we turn to determine the fact as
to when did the period of limitation start running for the
institution of the amendment to implead the respondent nos.
2-10 in the instant case. The period of limitation according to
B Article 91 (a) of the Limitation Act for filing a suit for
compensation for conversion of property is three years from
the date on which the person having the right to possession of
the property learns in whose possession it is. The amendment
to the suit to implead CMF and Hiten P. Dalal was effected on
C 20.10.1995 vi de a Chamber Summons. The case of the
appellant is that it was during a meetirig held on 07 .11.1992
that they first learnt that the suit bonds had been
misappropriated by Hiten P. Dalal and given to CMF. The
learned Special Court came to the conclusion that the plaintiff
D (appellant herein) had failed to establish the happening of a
meeting on 07 .11.1992 for three reasons. Firstly, that if the
appellant knew of the transaction between Hiten P. Dalal and
CMF on 07.11.1992, then they should have been impleaded
as parties in the suit filed by the appellant on 27 .11.1992, and
E that the appellant has not given any reason as to why they were
not impleaded as parties on 27 .11.1992 itself. Secondly, that
no reference has been made about this meeting by Mr. Kalyan
Raman, PW-1, in his deposition, who at the time had been
deputed from Andhra Bank to ABFSL, who was also alleged
F to have been present at the meeting. Thirdly, that even Mr.
David Loveless PW-4, Director of Security and Investigations,
Office of the Specie.I Representatives of India (OSRI) does
not make any reference to this meeting. The learned Special
Court further held that the defendants (respondents herein)
G have, on the basis of the evidence on record, established that
the plaintiff had knowledge about possession of the bonds at
least on 18.03.1992 or 23.05.1992.
20. Mr. Ram Jethmalani, the learned senior counsel on
behalf of the appellant, contends that the period of limitation
H
STANDARD CHARTERED BANK v. ANDHRA BANK 1013
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
started running on 07.11.1992, and that the finding of the A
learned special court that no meeting took place on that date
is perverse for the reason that it is contrary to legal evidence
on record and therefore deserves to be set aside. The learned
senior counsel placed reliance on the deposition of Mr.
Srinivasan, PW-3, deputed to the Office of the Special B
Representatives in India for the Standard Chartered Bank,
which reads as under:
" ... I say that to the best of my recoilection, these
documents were wepared by me as a record of
what transpired on 07 November, 1992 and a c
confirmation thereof in respect of the transactions
mentioned in the documents therein referred. When
I prepared these documents, facts mentioned
therein were fresh in my memory. Having now
refreshed my memory on the basis thereof I say D
that to the best of my recollection, the said
documents are a record of what transpired at the
said meeting mentioned therein.
In view of the fact thatthe said document at Exh.A
E
was not signed by me, one Mr. Sanjeev Ch ugh from
SCB, in or about early 1996 inquired from me as
to whether the copy of the minutes (being Exh. A
hereto) forwarded by him to me at the time had in
fact been prepared by me and whether they
F
accurately reflected what had transpired at that
meeting. I confirmed to the said Mr. Sanjeev Ch ugh
that this was indeed the position. Mr Chugh asked
me to confirm the same to the bank in writing.
Accordingly, on 11 March 1996 I addressed a letter
G
dated 11 March 1996 to SCB (Exh. B hereto) inter
alia stating that due to inadvertence I had not signed
the note at the relevant time and confirmed that the
original of the said note which was with the bank
reflected a true and accurate statement of what had
H
1014 SUPREME COURT REPORTS [2015] 14 S.C.R.
A transpired on 07 November 1992 and further
confirmed that the bank may refer to and rely upon
the same in any legal proceedings as it may deem
appropriate ......... "
The learned Special Court had disregarded the testimony of
B PW-3 Srinivasan in the following terms:
'The evidence of PW-3 Srinivasan itself does not
inspire confidence since though he was a member
of the investigation team, he does not remember
c anything else about the transaction of the Plaintiffs
except the circumstances under which he has
signed the letter of confirmation- Exh 02-2."
21. The learned senior counsel further contends that the
said finding of the learned special court ignores the provision
D of Sections 159 & 160 of the Indian Evidence Act, 1872
(hereinafter "the Evidence Act"). It is contended that the
Evidence Act recognizes that human memory is fallible and
after some time, it may become totally blank about a transaction
of long ago. Sections 159 and 160 of the Evidence Act are
E quoted hereunder:
"159. Refreshing memory: A witness may, while
under examination, refresh his memory by referring
to any writing made by himself at the time of the
transaction concerning which he is questioned, or
F so soon afterwards that the Court considers it likely
that the transaction was at that time fresh in his
memory. The witness may also refer to any such
writing made by any other person, and read by the
witness within the time aforesaid, if when he read it
G he knew it to be correct."
"160. Testimony to facts stated in document
mentioned in Section 159-A witness may also
testify to facts mentioned in any such document as
H
STANDARD CHARTERED BANK v. ANDHRA BANK 1015
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.)
is mentioned in section 159, although he has no A
specific recollection of the facts themselves, if he
·is sure that the facts were correctly recorded in the
document."
22. It is further contended by Mr. Ram Jethmalani, the
learned senior counsel on behalf of the appellant, that Mr. B
Srinivasan, PW-3, was called to depose in the year 2009 for a
transaction that took place in November 1992. Thus, it would
be perfectly reasonable for him to claim that he remembers
practically nothing unless reminded by the contemporaneous
document of 1992 of which, he had once before been reminded C
in 1996. The learned senior counsel further contends that no
suggestion was put to him at the time of his cross examination
regarding any bribery or inducement on behalf of the CMF. No
suggestion was also put to him that the letter dated 11.03.1996
was not written by him. It was further not suggested to him that D
no such meeting happened on 07 .11.199~.
23. The learned senior counsel for the appellant further
contends that the respondent CMF in their Written Statement
before the Special Court never denied the happening of the E
meeting on 07.11.1992. Para 12 of the Written Statement
reads thus:-
" ......this Defendant denies that S.R Ramaraj
stated to CBI on 07. 11.1992 or at any time that
Defendant No.2 had a dummy transaction with the F
Fund or that the details of the said alleged
transactions came to light only during the
proceedings in Misc. Petition No. 81of1995."
24. The learned senior counsel further contends that
because even the respondent CMF never denied the G
happening of the meeting on 07.11.1992, the learned Special
Court erred in coming to the said conclusion, which is contrary
to the pleading and evidence on record. ·
H
1016 SUPREME COURT REPORTS (2015] 14 S.C.R.
A 25. We agree with the contention advanced by the
learned senior counsel on behalf of the appellant, Mr. Ram
Jethmalani with regard to the meeting on the above date:
26. There needs to be specific denial by a witness as to
the suggestion regarding the happening of a meeting for the
B Special Court to arrive at the conclusion that the meeting did
nottake place. Order VIII Rule 5 of the_ Code of Civil Procedure,
1908 deals with this aspect, which is reproduced hereunder:
"Order VIII Rule 5 - Specific denial:
(1) Every allegation offact in the plaint, if not denied
c specifically or by necessary implication, or stated
to be not admitted in the pleading of the defendant,
shall be taken to be admitted except as against a
person under disability ......... "
D It is a settled position of law that if an allegation made in the
plaint is not specifi9ally denied in the written statement, it is
treated as admitted, as was also held by this Court in the case
of Ba/raj Taneja v. Sunil Madan 8•
27. In the instant case, it is evident from the affidavit of
E Mr. Srinivasan, PW-3 that the meeting happened on
07 .11.1992, the relevant part of which is extracted hereunder:
" ... I say that to the best of my recollection, these
documents were prepared by me as a record of
F what transpired on 07 November. 1992 and a
confirmation thereof in respect of the. transactions
mentioned in the documents therein referred. When
I prepared these documents, facts mentioned
therein were fresh in my memory. Having now
G refreshed my memory on the basis thereof I say
that to the best of my recollection, the said
documents are a record of what transpired at the
said meeting mentioned therein."
(emphasis laid by this Court)
H • (1999) a sec 396
STANDARD CHARTERED BANK v. ANDHRA BANK 1017
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
He further stated in his cross examination conducted by the A
counsel for the defendant no. 2 Hiten P Dalal that:
" ...... I say that I have no personal knowledge of the
transaction which is mentioned in Exhibit A, i.e office
note dated 7/11/1992 annexed to the affidavit in
lieu of evidence. I say that my memory has faded B
and I cannot recall why the meeting mentioned in
the office note dated 7/11 /1992 marked as Exh A
was held. I do not recall the circumstances under
which the said meeting took place. I do not recollect
whether I had checked the records of the SCB c
pertaining to contents of this office note. I do not
recollect whether I had checked the record before
mentioning the contents of the said note ...... I say
that we were responsible officers of the Bank and
whatever transpired in the meeting was mentioned D
in the office note that was prepared after the
meeting was over.............. .
I say that the meeting which is referred to in note
dated 7/11/1992 was not called by me and normally
E
I did not. call or convene such meetings. I do not
recollect who asked me to attend this meeting
dated 7/11 /1992 since it was 16 years back. I say
that to the best of my knowledge, I could not know·
persons who were present in the meeting prior to
F
7/11/1992. I cannot say whether I was asked to
attend the said meeting because it was an important
meeting ...... I saythatto the best of my memory, I
was called to Canbank Mutual Fund's office to
attend the meeting dated 7/11/1992. I say that it
G
only out of my memory I say so and 1 do not have
any record in support thereof."
(emphasis laid by this Court)
28. At no point of time was the suggestion put to him
regarding the meeting itself not happening. Further, on the H
1018 SUPREME COURT REPORTS [2015] 14 S.C.R.
A suggestion that the fact that he did not originally sign the
documents of the Minutes of the Meeting held on 07.11.1992
shows that he had a fraudulent intention, his response was:
"I say that the words "at the relevant time" mentioned
in second line of letter at Exhibit-B to my affidavit of
B evidence, pertain to 1992. I say that in 1996, I would
have recollected that I have not signed the note and
therefore, I have mentioned in the said Exhibit-B
that I have inadvertently not signed the said note.!
say that there was no compulsion in me to sign the
c said note which is at Exhibit-A to my affidavit in lieu
of evidence in 1992. I say that it seems that it was
a specific request was made from the bank, and,
as a result, I did not ask any question as to whether
the signature on the note was required or not. I say
D that to the best of my knowledge when I have
mentioned "original of the said note" in letter at
Exhibit B dated 11/3/1996 annexed to my affidavit
in evidence, I have referred to the original office
note at Exhibit-A annexed to my affidavit of
E evidence.
I stand by whatever I have said in my affidavit in lieu
of evidence." ·
(emphasis laid by this Court)
F On a careful examination of the above deposition of Mr.
Srinivasan, PW-3, it becomes clear that a meeting in fact,
took place on 07 .11.1992. Mr. Srinivasan has stated in his
deposition that he prepared a document, Exh. A, which is the
minutes of the meeting which took place on that date.
G According to this meeting, Mr. Ramaraj of Divisional Manager
of CMF, Mr. Kalyan Raman, Senior Vice President of ABFSL,
Mr. Bhupinder Kumar and Mr. Azad of the CBI and Mr. N.
Srinivasan of the SCB were present. Mr. Srinivasan further
stated in his deposition that he had inadvertently forgotten to
H
STANDARD CHARTERED BANK v. ANDHRABANK 1019
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.)
· sign the document prepared by him which contained the A
minutes of the meeting. On 11.03.1996, he signed a document,
produced before us as Exh. B, in which he has stated:
"I have perused lhe attached note dated 7
November 1992. prepared by me. I have
inadvertently not signed the said note at the relevant B
time. I now confirm that the original of the said note
which is now in possession of the bank is true and
accurate and the bank may refer to and rely upon
the same in any legal proceedings as it may deem
appropriate." c
(emphasis laid by this Court)
A careful examination of the testimony of Mr. Srinivasan, PW-
3, reveals t.hat a meeting did take place on 07 .11.1992.
Despite a lengthy cross examination conducted by the counsel D
for the respondents, at no point of time the suggestion was put
to him regarding the not happening of the meeting itself. The
deposition of Mr. Srinivasan not only confirms the happening
of the meeting on 07 .11.1992, but also throws light on the
members present at the meeting, as well as the events that
transpired at the said meeting. E ·
Apart from the testimony of Mr. Srinivasan, the evidence
of one other witness who was examined also conclusively
establishes the occurrence of the meeting on 07 .11.1992. That
is the deposition of Mr. David Loveless, PW-4, who was F
appointed as the Director of Security and Investigations, Office
of the Special Representatives for India (OSRI) in August 1992.
He has stated in his affidavit as under:
"I say that at the relevant time when the suit was
filed i.e 27 November 1992 the Bank was under G
the impression that with regard to its purchase of
17% NPCL bonds from ABFSL, plaintiff had not
received physical delivery of the bonds or Letter of
Allotment from ABFSL, but that it had received
H
1020 SUPREME COURT REPORTS [2015] 14 S.C.R.
A merely a photocopy. This was based on the records
of the Plaintiff, being the "Bank Receipts Held
Register" which reflected the receipt of a photocopy
of the original LOA. Hereto annexed and marked
as EXHIBIT "A" is a copy of the relevant extract of
B the said Register. However. on 7 November. 1992.
at a meeting which was attended inter alia by
Plaintiff's representative Mr. N Srinivasan and Mr.
R. Ramaraj of Canbank Mutual Fund, Plaintiff
became aware of the fact that the CM F claimed to
C have received the original Letter of Allotment from
Hiten P Dalal, who, it appears, had handed over
the said Letter of Allotment to CMF in order to satisfy
some alleged outstanding liabilities of HPD to the
said fund, which has arisen in respect of some
D alleged security transactions engaged in by the
CMF with HPD in November 1991."
(emphasis laid by this court)
It becomes manifestly clear from an examination of the
E deposition of Mr. Srinivasan, PW-3 and Mr. Loveless, PW-4
that a meeting did infact occur on 07.11.1992. The learned
senior counsel appearing on behalf of the respondents has
not been able to show any reason as to why the evidence
rendered by this witness should be disbelieved.
F The learned Special Court recorded the finding of fact
holding that no meeting had occurred on 07 .11.1992 on the
primary ground that neither Mr. Kannan, PW-2 nor Mr. Ramaraj,
both of whom were allegedly present at this meeting,
mentioned the happening of a meeting on 07 .11.1992 in their
G depositions. The learned Special Court erred in coming to the
conclusion that no meeting has occurred on 07 .11.1992 for
the reason that Mr. Ramaraj and Mr. Kannan, PW-2 did not
mention this meeting in their deposition, and thus, going
against the well settled principle of law of 'specific deniaf. Mr.
H
STANDARD CHARTERED BANK v. ANDHRA BANK 1021
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
Srinivasan, PW-3 and Mr. Loveless, PW-4, both specifically A
deposed as to the happening of a meeting on 07.. 11.1992.
Thus, the learned Special Court could come to the conclusion
that the meeting did not happen was only if some witness
deposed specifically that the meeting did not happen. In the
instant case, ho witness was specifically asked in the cross B
examination by the counsel for the respondents about the
happening of the meeting on 07 .11.1992. Thus, no witness
expressed in as many clear terms that the purported meeting
infact did not take place.
On the basis of the legal evidence placed on record by C
· the appellant before the Special Court.that a meeting did intact
take place on 07 .11.1992, we turn our attention to what
happened at the said meeting. The note prepared by Mr.
Srinivasan, PW-3, after the said meeting, produced as Exh.
"A" states as under: - D
"CMF says the following:
Tt)ere was an initial purchase in end 1991, by CMF
from HPD of some security against which HPD did
not deliver physicals to CMF. E
Consequently, HPD had a dummy sale/ purchase
transaction with CMF for FV Rs. 100 crs and
delivered 9% NPCL and 17% NPCL to CMF on
26.02.92. The deal slip indicates deal with ABFSL,
but difference between sale & purchase of Rs. 3 F
crores was paid to HPD directly by Andhra
Bank ...... "
A perusal of the record prepared by Mr. Srinivasan, PW-3,
makes it amply clear that it was during this meeting on G
07 .11.1992 that CMF first admitted to SCB regarding the
dummy sale involving the 9% NPCL bonds and 17% NPCL
bonds. At this point, we would like to reiterate that the learned
senior counsel appearing on behalf of the respondents have
H
1022 SUPREME COURT REPORTS [2015] 14S.C.R.
A not been able to point out any reason for us to disbelieve either
the deposition of Mr. Srinivasan, PW-3, or the documents
prepared by him, which have been placed on record.
29. Thus, we conclude that a meeting did infact take place
in the office of CMF on 07.11.1992, and that it was on this
8 date that SCB found out about the dummy transaction that had
taken place between CMF and Hiten P. Dalal regarding the
9% and 17% NPCL bonds. Therefore, the finding recorded by
the learned Special Court is erroneous both in fact and in law,
hence the same is liable to be set aside.
c
30. In light of the fact that the knowledge of the appellant
had started running on 07.11.1992, the question that now
remains to be answered is whether there was any previous
date on which it was possible that the appellant had acquired
0 knowledge of the conversion of the bonds. The learned senior
counsel appearing on behalf of the respondents, Mr. Rohit
Kapadia and Mr. Pradeep Sancheti, contend that there are
atleast three alternate prior dates on which the appellant can
be said to have acquired knowledge of the fraud perpetrated
E on it by the respondents. These dates are 18.03.1992,
10.04.1992 and 23.05.1992.
31. We have heard Mr. Ram Jethmalani, the learned
senior counsel appearing on behalf of the appellant and Mr.
Rohit Kapadia and Mr. Pradeep Sancheti, the learned senior
F counsel appearing on behalf of the respondents and have
perused the documents produced before us as evidence. We
shall examine these dates one by one in order to conclude
whether knowledge of the appellant can be construed from
any one of these dates, from which date the period of limitation
G for instituting the suit for claim against the respondents starts
running.
32. It is contended by the learned senior counsel
appearing on behalf of the respondents that the first date on
which knowledge can be attributed to the appellant. is
H
STANDARD CHARTERED BANK v. ANDHRA BANK 1023
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
18.03.1992. The learned senior counsel places .reliance on A
the second amendment to the Plaint dated October 2006 in
which it is stated:
" ......... Significantly, although, admittedly, 3rd
Defendant on 17 March 1992 had physical
possession, of the said bonds (the LOA B
representing the said bonds), 3rd Defendant
deliberately did not deliver to the plaintiffs the said
bemds and instead delivered to the Plaintiffs, 3rd
Defendant's BR bearing No. 2767. In view thereof,
Plaintiffs did not realize that the original letter of c
. allotment which has been delivered to the Plaintiffs
on 27 February 1992 was, in fact, in the possession
of 3rd Defendant as on 17 March 1992 ...... "
The learned senior counsel further places reliance on para 7E D
of the amended plaint which reads thus:
" ............ Had 3rd Defendant, delivered to plaintiffs,
against the transaction of 17 March 1992, the
original Letter of Allotment, which was in the
possession of 3rd Defendant, Plaintiffs would have .E
immediately realized the fraud that had been played
on the Plaintiffs ............ "
33. The learned senior counsel for respondent Nos. 2 to
10 contend that 18.03.1992 would be a crucial date regarding
definite knowledge of the appellant about possession of the F
bonds by CMF. CMF had specifically pleaded that it had
delivered the bonds on 18.03.1992 to the appellant and in turn
the appellant discharged its Bank Receipt No. 2767
acknowledging the same. The learned senior counsel further
places reliance on the Bank Receipt No. 2767 produced as G
Exh. P-16, dated 17 .03.1992, which contains an endorsement
"bonds delivered 1813192". According to the learned senior
counsel on behalf of the respondents that the said Bank
Receipt conclusively proves the delivery of the physical bonds
to the appellant SCB. · H
1024 SUPREME COURT REPORTS [2015] 14 S.C.R.
A 34. Mr. Ram Jethmalani, the learned senior counsel
appearing on behalf of the appellant, on the other hand
contends that in para 7E of the Plaint, it has been clearly and
specifically alleged that on 18.03.1992, the 17% NPCL bonds
were delivered directly through Hiten P. Dalal to ANZ Bank, to
B whom SCB had sold the said bonds on 26.02.1992 itself. He
further places reliance on the affidavit of Mr. S. Ramaraj,
authorized employee and agent of CMF. This affidavit was
produced in the suit before the Company Law Board. He had
stated therein:
c "Even in respect of the 17% NPCL bonds which
were subsequently sold on 17.3.1992 by the
Petitioners (CMF) to Respondent no. 4 (SCB) as
set out in para A above, the Petitioners (CMF) had
entered into the transaction through respondent no.
D 2 (HPD) who acted as the broker ......... The RBI
cheque for the net amount of Rs. 15,23,973.61
issued by Respondent no. 4 in favour of the
Petitioners was delivered to the Petitioners (CMF)
by respondent no. 2 (HPD) and likewise the BR in
E respect of the sale of 17% NPCL bonds was
delivered by the Petitioners (CMF) to respondent
no. 2 (HPD) for onward delivering to the Purchaser.
Subsequently, even when the original letter of
allotment was exchanged for the BR, the said
F exchange also had taken place through respondent
no. 2 (HPD) and/ or his servants and agents."
35. The learned senior counsel on behalf of the appellant
submits that the said affidavit states that the 17% NPCL bonds
G were purchased by CMF on 27 .02.1992 from ABFSL through
its broker Hiten P. Dalal along with 9% NPCL Bonds. Mr.
Ramaraj further said that the very same bonds were
subsequently sold by CMF to SCB, on 17.03.1992. The Bank
Receipt issued was exchanged by delivery of original LOA on
H 18.03.1992. He does not say that it was delivered to the SCB.
STANDARD CHARTERED BANK v. ANDHRA BANK. 1025
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
The learned senior counsel contends that in view of the A
averments of the affidavit of Mr. Ramaraj, the knowledge of
the bonds being delivered to the Company on 18.03.1992 is
not tenable in law. He further contends that the learned Special
Court erred in arriving· at this conclusion on facts, which is
contrary to the affidavit of Mr.Ramaraj and therefore, the said B
finding is erroneous, liable to be set aside.
36. The learned Special Court has erroneously held that
the period of limitation for institution of the suit by the appellant
would start running on 18.03.1992, as there was no evidence
<;>n record to show that the appellant did not have knowledge C
that this was the only set of bonds which were used by NPCL
and therefore there was no question of other bonds being in
circulation. The learned Special Court further held that the
burden of proving the non existence of knowledge was on the
appellarit, and that in the absence of evidence on this point, it D
would have to be held that when the bonds were returned by
CMF to ANZ on that date itself the appellant became aware of
the possession of the bonds by CMF, and that is the date on
which the period of limitation would start running for institution
of the suit against the respondents. E
37. As has already been discussed by us in an earlier
part of this judgment, the period of limitation under Article 91 (a)
of the Limitation Act starts running on the date that the plaintiff
acquires knowledge of the identity of the person who is in F
possession of the bonds. Apart from knowledge of the identity
of the person, Article 91 (a) also requires the knowledge that
the possession of the bonds was acquired by means of
wrongful conversion.
38. The evidence of Mr. Ramaraj, as produced before G
the Company Law Board, has been grossly misinterpreted by
the learned Special Court. The affidavit of Mr. Ramaraj clearly
states that the Bank Receipt in respect of the said 17% NPCL
bonds was delivered by CMF to Hiten P. Dalal for onward
delivery to the 'purchaser'. The purchaser in this context refers H
1026 SUPREME COURT REPORTS [2015] 14S.C.R.
A to ANZ. The affidavit of Mr. Rama raj makes it amply cl~ar that
at no point of time did SCB have possession of the physical
bonds. It was Hiten P. Dalal who delivered them to ANZ. Thus,
the finding of the learned Special Court as to the date of
knowledge being 18.03.1992 is perverse and is liable to be
B set aside.
39. The next date of knowledge, as contended by the
learned senior counsel on behalf of 'the respondents, is
·10.04.1992. It was contended by the learned senior counsel
appearing on behalf of the respondents that the list of
C transactions disclosed by the SCB to the Joint Parliamentary
Committee reflects a transaction for sale dated 10.04.1992.
Jn Para 71 of the Plaint, the appellant had stated that they had
realized that there was a 'hole' or a shortfall in their Securities
Account pertaining to the transaction of 26.02.1992 between
D the appellant and ABFSL, in view of the belief of the appellant
that the said bonds under the said transaction had not been
received from ABFSL. It was further stated in the plaint that
the dealers of the appellant then entered into a dummy
transaction dated 10.04.1992 with ABFSL. In fact, the said
E purported transaction was a mere unilateral set of entries
effected in the books of the appellant and that so such
transaction took place. The learned senior counsel contends
that no evidence has been placed on record to show that this
was a dummy transaction, and that the date of knowledge
F imputed to SCB should be 10.04.1992.
40. It is further contended by Mr. Ram Jethmalani, the
learned senior counsel appearing on behalf of the appellant,
that 10.04.1992 cannot be considered to bethe date on which
G knowledge of the conversion can be said to be imputed to
SCB. He relied on the evidence of Mr. Kalyan Raman, PW-1,
who has stated thus:
"My attention has also been drawn to para 6 (c) of
the Miscellaneous Petition No. 81 of 1995 filed by
H Defendant No.3 before the Company Law Board. I
STANDARD CHARTERED BANK v. ANDHRA BANK 1027
FINANCIAL SERVICES LTD. [V. GO PALA GOWDA, J.]
say that ABFSL had not entered into any of the A
transactions mentioned in para 6(c) of the
Miscellaneous Petition No. 81of1995 with CMF
or any other party."
The learned senior counsel for the appellant contended that
this testimony. of Mr: Kalyan Raman, PW-1, who was an B
employee of ABFSL at that time, clearly establishes that there
were no transactions between SCB and ABFSL on
10.04.1992. This was the best evidence on the matter in favour
of the appellant which is conveniently omitted to be considered
by the learned Special Court while recording the finding on the C
contentious issue of limitation.
41. The learned Special Court dismissed the claim of
the respondents that 10.04.1992 could be the date on which
knowledge can be said to be imputed to the appellant on the D
ground that the respondents had not proved by leading any
cogent evidence that the appellant became aware. of the
conversion on 10.04.1992. The learned Special Court further
held that the respondents had failed to show that the said
transaction was settled against bonds for valuable E
consideration.
42. We agree with this finding of the learned Special
Court. The testimony of Mr. Kalyan Raman, PW-1, makes it
manifestly clear that no transaction took place between ABFSL
and SCB on 10.04, 1992, and thus, the question of imputing F
knowledge to the appellant on that date does not arise for the
purpose of limitation begins to run forthe appellant for institution
of the suit claim against the respondents.
43. The next date, which has been most vehemently
contended by the learned senior counsel appearing on behalf G
of the respondents, is 23.05.1992.
44. The learned senior counsel for the respondents place
reliance on para 4 of the Written Statement submitted by them
before the learned Special Court which stated: H
1028 SUPREME COURT REPORTS (2015) 14 S.C.R.
A "Further according to the Plaintiffs, they had a
meeting with various brokers, including Hiten P.
Dalal on 23.05.1992 wherein in relation to the
alleged Andhra Bank Financial transactions
relating to NPCL bonds he is alleged to have
B "admitted that he diverted the Bonds to Citibank".
Thus, on the Plaintiffs own showing, without any
manner admitting the correctness of the allegations,
in any case, latest by May, 1992 the Plaintiffs are
aware that Hiten P Dalal had traded in the said
C Bonds and in fact delivered the same Bonds to
CMF."
45. The learned senior counsel further submit that the
happening of a meeting on 23.05.1992 is an admitted fact.
During the course of the meeting, there was a specific
D discussion with regard to the NPCL bonds, of both 9% and
17%. The minutes of the meeting, produced before us as Exh.
D-2(1) state:
"On the Andhrafina transactions relating to the
NPCL bonds where SCB was provided with
E
photocopies of the bonds instead of originals, HPD
admitted that he had divereted the bonds to
Canbank ......... "
46. The learned senior counsel for the respondents further
F contend that the meeting of 23.05.1992 is a material fact, which
ought to have been pleaded by the appellant particularly since
admittedly, the appellant was informed of the conversion of
the suit bonds on that day and the alleged explanation, as to
whether the knowledge was complete or incomplete etc. ought
G to have been a part of its ple_ading.
47. The learned senior counsel on behalf of the
respondents further contend that the distancing of the appellant
from the dear knowledge about the diversion of the bonds to
CMF by Hiten P. Dalal by insisting that the said information
H
STANDARD CHARTERED BANK v. ANDHRA BANK 1029
FINANCIAL SERVICES LTD.. [V. GOPALA GOWDA, J.)
was purely informal, and that Hiten P. Dalal had even stated A
that he would deny this conversation if the SCB ever sought to
make formal use of his statement is a clear tactic of evasion.
He further contended that the minutes of the meeting do not
contain any such reservation as claimed by the appellant.
48. The learned Special Court, while arriving at the 8
conclusion on the facts pleaded and evidence on record that
23.05.1992 can also be considered to be the date from which
knowledge can be said to be imputed to the appellant
regarding the conversion of the bonds in question, relied
primarily on the evidence of Mr. Kalyan Raman, PW-1, who C
was also present at the meeting held on 23.05.1992. He has
stated in his affidavit submitted before the learned Special
Court as under:
"I further state that in view of the fact that SCB's D
investigation team headed by Mr. Wasim Saifee,
. had inter alia informed me about the missing NPCL
bonds, both Saifee and myself did inquire from
HPD, in the course of the meeting held on 23'd May
1992 as to what had really happened in respect of
E
the said transactions with ABFSL on 26'h February
1992. HPD also informed us that insofar as the
transactions wherein SCB had purchased 9%
NPCL bonds of FV 50 crores and 17% NPCL ·
bonds of FV 50 crores were concerned and in
F
respeet of which SCB had paid full consideration
but in respect of which SCB records reflected
receipt of only photocopies of the original LOA's,
that he (HPD) had diverted the said bonds to
Canara Bank."
G
49. The learned Special Court further held that Mr. Kalyan
Raman, PW-1, had also identified the minutes of the meeting
which had been placed on record. There was no mention of
the evasive response given by Hiten P. Dalal, or that he had
H
1030 SUPREME COURT REPORTS (2015] 14 S.C.R.
A stated that the said information was informal and that he would
deny this conversation if the SCB ever sought to make formal
use of this conversation. It was further held that Hiten P. Dalal
did disclose in the meeting on 23.05.1992 about diversion of
the bonds to CMF. Thus, the appellant first learnt about the
B diversion on 23.05.1992 of the suit bonds to CMF.
50. Mr. Ram Jethmalani, the learned senior counsel
appearing on behalf of the appellant, on the other hand
contends that 23.05.1992 cannot be taken to be the date on
which SCB had knowledge of the conversion of the suit bonds.
C He submits that knowledge is not mere suspicion, and that it
must be knowledge of such a nature as will enable the person
defrauded to seek a remedy in a court of law. He further
contends that the fact that appellant did not know of the role
played by Hiten P. Dalal and that this becomes amply clear
D from the FIR filed by them dated 20.06.1992. The appellant
was under the clear impression that the suit bonds had not
been received by them, and that it had only received a Bank
Receipt which had been returned toABFSL.
E 51. We agree with the submission of Mr. Jethmalani, the
learned senior counsel on behalf of the appellant. The learned
Special Court erred in arriving at the conclusion that
23.05.1992 could be a date from which the appellant could be
said to have knowledge of the diversion of the suit bonds by
F Hiten P Dalal. In this context, we would turn our attention to the
evidence of PW-2, Mr. Kannan, who also stated after stating
that Hiten P. Dalal had admitted the diversion of bonds:
"In the said meeting, I pressed H.P. Dalal to furnish
me the details and particulars with regard to his
G allegations of alleged diversion to Canara Bank of
the said NPCL bonds. HPD was however evasive
and did not afford any cogent reply. I specifically
inquired from him as to the manner and
circumstances of the alleged diversion. However
H
STANDARD CHARTERED BANK v. ANDHRA BANK 1031
FINANCIAL SERVICES LTD. [V. GOPALA GOWDA, J.]
when pressed by me to give particulars and details. A
he refused to state anything further on the subject
and instead insisted thatthe said information of the
alleged diversion of the Bonds to Canara Bank was
purely informal and that he would deny his
conversation with the SCB if the SCB were to seek B
to make formal use of his statement.
...... The matter of NPCL bonds was thereafter
discussed by me with the other senior managers
of SCB but in view of the lack of any details/
particulars forthcoming from HPD and in view of c
his failure to adhere to his assurances and
commitments of delivery of stocks/ securities/
reimbursement of losses assured by him to be
delivered between 18 and 22 May 1992, it was felt
that no credence could be placed on the said D
statement made by HPD with regard to NPCL
· bontls at the relevant time."
(emphasis laid by this Court)
We also turn our attention to the cross examination of this E
witness who stated:
"You have stated that "HPD was evasive and did
not afford any cogent reply." Which of these
·statements is correct?
F
A. Both are correct
I say that the meetings which are referred to in para
17 in my evidence in earlier suit would include the
meeting dated 23'~ May, 1992.
G
... I say that HPD had admitted that he had diverted
the original letter of allotment to Canara Bank and
had not delivered the same to SCB.
I say that since he had mentioned diversion of the
bonds I thought that he might have misappropriated H
1032 SUPREME COURT REPORTS [2015] 14 S.C.R.
A the bonds. I agree that misappropriation is a serious
matter. I say that I reported this to Mr. Wasim Saifi.
He was also present in the meeting and he has
prepared this note and he told me that he would
verify the record and go further in detail and
B therefore, this fact should not be mentioned in the
office note.
How are NPCL bonds transactions a specific
instance of 'Entry Guma diya', 'Duplicate funding
hoya' and 'Duplicate funding kiya'?
c
A. I say that when Mr. HPD informed us that the original
letters of allotment were diverted to Canara Bank, I
thought that it must be falling in one of these
categories. I say I thought it would fall within one of
D these would verify the record and go further in detail
and therefore, this fact should not be mentioned in
the office note.
How are NPCL bonds transactions a specific
instance of 'Entry Gu ma diya'; 'Duplicate funding
E hoya' and 'Duplicate funding kiya'?
B. I say that when Mr. HPD informed us that the original
letters of allotment were diverted to Canara Bank, I
thought that it must be falling in one of these
categories. I say I thought it would fall within one of
F these categories because of diversion of securities."
52. In this connection, it also important to examine the
testimony of PW-4, Mr. David Loveless, who was investigating
these transactions at that time. He has expressly stated:
G "..... .I was informed that on 23 May 1992 at a
meeting held between the Plaintiff's officers and
various brokers, including inter alia HPD, the said
HPD had casually mentioned the said 17% NPCL
bonds had been diverted by him to Canara Bank.
H
I'
STANDARD CHARTERED BANK v. ANDHRA BANK 1033
FINANCIAL SERVICES LTD. [V. GOPALAGOWDA, J.]
However, I was informed by the Plaintiff's officers, A
who attended the said meeting that when HPD was
pressed to give details and particulars of the
alleged diversion and manner and circumstances
thereof, he had resisted evasively and had refused
to furnish any details and had even gone to the B
extent of stating that the information divulged by him
was purely informal and that if the Plaintiffs were to
seek to make use of thereof in any legal
proceedings, he (HPD) would deny the same.
In this connection, I say that I was subsequently c
briefed by the members of the investigation team
including Mr. Waseem Saifi as also by Mr. Kannan
who were present in the said meeting held on 23
May 1992. From the report of the said Mr. Kannan,
it was clear to me that no reliance could be placed D
upon what HPD had vaguely alleged. It was in these
circumstances that when the plaintiff originally filed
its Suit no. 6 of. 1994, on 27 November 1992,
Plaintiff confined its claim only against ABFSL,
which it believed, on the basis of its information and E
record had failed to deliver the original LOA in
respect of Rs 50 crores FV 17% NPCL bonds,
which it had sold to the Plaintiff on 25 February
1992. I was only thereafter, in the circumstances
referred to by me hereinabove that Plaintiff realized F
that the said LOA had possibly been converted by
. CMF and only thereafter upon discovering the said
fact and learning of the said conversion effect by
CMF that plaintiff took steps to amend its Plaint
and claim in the alternative, damages against CMF G·
for conversion. I further say that the said amendment
was necessitated on accounts of the facts that
emerged after the CBI had investigated the matter
H
1034 SUPREME COURT REPORTS [2015] 14 S.C.R.
A pursuant to SCB's FIR dated 20 June 1992 and
the charge sheet filed pursuant thereto, dated 16
June 1995. I further state that after filing its FIR
dated 20 June 1992, SCB was waiting for the
outcome of the CBI investigation."
B A careful examination of the deposition of these two witnesses
makes it manifestly clear that the revelation made by Hiten P.
Dalal during the meeting held on 23.05.1992, did not give the
appellant the knowledge requisite for the purpose of Article
91(a) of the Limitation Act. The revelation in contention made
C by Hiten P. Dalal was vague and he gave evasive responses
after the same and thus, it is not reasonable to expect the
appellant to believe the same and initiate legal proceedings
on the basis of the said statement.
D 53. We examined all the dates alternative dates prior to
07.11.1992 proposed by the respondents, where knowledge
could be said to be imputed to the appellant for institution of
suit against the respondents. We find no merit in the
contentions urged by the learned senior counsel for the
E respondents. The period of limitation would start running.only
on 07 .11.1992, the reasons for which we have already
elaborately stated in an earlier part of this judgment. We set
aside the finding of the learned Special Court on the
contentious issue nos.1 and 2 framed in the suit that the
F institution of the suit of the appellant against Respondents Nos.
2-10 is barred by limitation. ·
Answer to Point No. 3
54. Since we have set aside the finding of fact recorded
by the learned Special Court holding that the suit is barred by
·8 limitation, as prescribed in the Schedule to the Limitation Act,
1963 by recording the reasons in the preceding paragraphs
of this judgment and the other issues including the issue on
the merits of the claim were held in favour of the plaintiff
(appellant herein) by the learned Special Court, which have
H
STANDARD CHARTERED BANK v. ANDHRA BANK 1035
FINANCIAL SERVICES LTD. [V. GO PALA GOWDA, J.)
noi been challenged by the Respondents 2-10 by filing an A
appeal, therefore, the appellant is entitled for a decree of the
suit claim of the principal amount adjudged as on the date of
the institution of the suit. The appellant is also entitled to interest
pendente lite and future interest. This transaction can be
termed as a commercial transaction and Section 34 of the B
Code of Civil Procedure, 1908 confers discretionary power
upon this Court to award interest at appropriate rate on the
suit claim of the appellant. We have considered with regard to
the facts and circumstances of the case as to what should be
the reasonable rate of interest to be awarded on the suit claim C·
both for the period of pendente lite and for future interest and
from what date to be ordered. The suit in the instant case was
instituted before the Special Court·on 27.11.1992, but the
respondent nos.2-10 were brought on record as parties to the
suit by way of an amendment, which was allowed on D
10.01.1996. Therefore, it would be appropriate for this Court
to award interest from the above said date during pendency
of the proceedings before the Special Court and this Court
and also for future rate of interest at 6% per annum till the date
of realisation. The Particulars of Claim, marked as Exh. "E" to E
the plaint shows that the appellant had claimed 20% interest
from 26.02.1992 till 27.11.1992 at the principal sum of
Rs.48,02,50,000.00, to arrive at the amount of
Rs.55,26, 16,438.36 as the adjudged principal amount. Since
we have awarded interest at the rate of 6% per annum, we F
shall calculate the principal amount of Rs.48,02,50,000.00, on
that rate itselfforthe period from 26.02.1992 to 27.11.1992 at
that rate itself which amounts to Rs.50, 18,61,250.00 will be
the adjudged principal amount from the date of institution of
fue~~ G
55. For the foregoing reasons, we set aside the judgment
and decree of the dismissal of the suit on the question of
limitation and the suit claim as indicated herein below with
interest and costs is allowed by allowing these appeals in the
following terms:- H
1036 SUPREME COURT REPORTS [2015] 14S.C.R.
A The respondent nos.2-10 are directed to pay the adjudged
principal sum of Rs.50, 18,61,250.00 along with interest at the
rate of 6% per annum from 10.01.1996 till the date of realisation
with suit costs throughout for having converted the suit bonds.
The above respondents shall be jointly and severally liable to
B pay the same to the appellant. The appellant is permitted to
file memo costs of the suit proceedings throughout within three
weeks from the date of receipt of the copy of this judgment.
Bibhuti Bhushan Bose Appeals allowed.
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