LexSTANDARD CHARTERED BANK versus ANDHRA BANK FINANCIAL SERVICES LTD & ORS.
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[2015] 14 S.C.R. 993 STANDARD CHARTERED BANK v. ANDHRABANK FINANCIAL SERVICES LTD &ORS. (Civil Appeal Nos. 9540-9541 of 2010) AUGUST 28, 2015 [V.GOPALAGOWDAAND R. BANUMATHI, JJ.] A B 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 993 H 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.
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