Quashes Special Court order, StanChart’s securities-scam suit within limitation; Interprets Limitation Act
SC sets-aside Special Court’s order that dismissed Standard Chartered Bank’s (appellant) suit alleging diversion of bonds (sold to appellant by National Power Corporation Ltd), by a broker to Canara Bank Mutual Fund (CMF), on the ground that it was barred by limitation; Interprets Article 91(a) of Limitation Act, applicable in instant case, which states that period of limitation in case of wrongful detaining of ‘specific movable property’ is 3 years starting from the time when person having right to possession ‘first learns’ in whose possession it is; Observes that “first learns” in the above stated provision places a burden of knowledge, knowledge must be of identity of specific person in whose possession bonds are which were acquired by wrongful conversion, holds that, “a mere suspicion or a whisper of knowledge is not enough for the period of limitation to start running”; Going through statements of witnesses and documents placed on record, notes that a meeting was held on November 7, 1997 when appellant came to know about dummy transaction between broker & CMF and suit was filed (adding CMF & broker as respondents) on Oct 20, 1995, which was within limitation period; Thus, rejects Special Court’s observation that there was no such meeting held and appellant came to know about the transaction much earlier, holds that “finding recorded by the learned Special Court is erroneous both in fact and in law”; Rejects respondents contention that Article 91(a) was not applicable as bonds were not specific movable property but chose-in-action, peruses definition of the term movable property under General Clauses Act and holds that bonds were movable properties, capable of being possessed; Relies on SC ruling inK.S Nanji and Company v. Jatashankar Dossa & directs respondents to pay principal amount of Rs 50 cr with interest:SC
The order was passed by Justice V. Gopala Gowda and Justice R. Banumathi
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