2003 (5) TMI 356 - HC - Companies Law

Summary

Issues Involved:
1. Proper or formal parties in a complaint.
2. Privity of contract.
3. Maintainability of compensation application.
4. Concealment of material facts.
5. Necessary vs. proper parties.

Detailed Analysis:

1. Proper or Formal Parties in a Complaint:
The core issue in the petition is whether the petitioners, M/s. Kirloskar Electric Company Ltd., are proper or formal parties in the complaint filed by M/s. Utkal Solvent Extractions (P) Ltd. against M/s. Greaves Ltd. The Monopolies and Restrictive Trade Practices Commission (the Commission) held that although no relief is directly claimed against the petitioners, they are proper or formal parties because the alternator, an integral part of the DG Set, was supplied by them. The presence of the petitioners is necessary for effective adjudication of the controversies involved in the proceedings.

2. Privity of Contract:
The petitioners contended that the compensation application is not maintainable against them due to the lack of privity of contract between the parties. They argued that the DG Set was provided to M/s. Utkal Solvent Extractions (P) Ltd. by M/s. Greaves Ltd., and the petitioners are not a party to that agreement. However, the Commission observed that the alternator was an integral part of the DG Set and supplied by the petitioners, making them proper parties to the proceedings.

3. Maintainability of Compensation Application:
The Commission ruled that the compensation application filed by M/s. Utkal Solvent Extractions (P) Ltd. is maintainable against the petitioners. It noted that the main grievance was regarding the faulty alternator supplied by the petitioners. The Commission emphasized that retaining the petitioners as parties would avoid multiplicity of proceedings and ensure effective adjudication.

4. Concealment of Material Facts:
The learned counsel for respondents 2 & 3 argued that the petitioners had not approached the Court with clean hands, as they had concealed the fact that an earlier writ petition (No. 4122 of 1995) filed by them on similar grounds was dismissed by a Division Bench of the same Court. The Court emphasized that parties must disclose all material facts when seeking relief. The concealment of this material fact led to the dismissal of the petition with exemplary costs.

5. Necessary vs. Proper Parties:
The Court distinguished between necessary and proper parties. Necessary parties are those without whom no decree can be passed, while proper parties are those whose presence allows the Court to adjudicate more effectively. The Court concluded that the petitioners, who supplied the alternator, are proper parties. Their presence is necessary for a complete and final decision on the issues involved. The Court cited several precedents to support this distinction, including judgments from the Supreme Court and other High Courts.

Conclusion:
The Court upheld the Commission's decision, emphasizing that the petitioners are proper parties to the proceedings. The petitioners were found guilty of suppressing material facts and the petition was dismissed with costs of Rs. 15,000. The Court reiterated the importance of disclosing all relevant facts when seeking judicial relief and the necessity of including proper parties to avoid multiplicity of proceedings and ensure effective adjudication.