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TMI Blog2012 (9) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... l as financial institutions. Bangur family, a family of industrialists in the State, held the controlling block of shares. In 1992 the Board of Directors decided, for proper expansion and development, the cable division and jute division should have independent entities. They proposed a scheme of demerger. Accordingly, Fort Gloster retained the cable division and transferred the jute division to a new company named as Gloster Ltd. (hereinafter referred to as 'Gloster'). The jute division had two mills, North mill and New mill. Prior to its demerger in the year 1988 Fort Gloster entered into an agreement with Hooghly Mills Ltd. (hereinafter referred to as Hooghly), the owner of a neighboring jute mill to sell the North Mill along with vacant land attached thereto. The liability attached to the North Mill was also transferred to Hooghly. By the agreement of sale, the entire North Mill along with its assets and liabilities stood transferred to Hooghly. The physical possession was also handed over to Hooghly and since then they were carrying on business. As per the agreement for sale, the sale was subject to appropriate permission from governmental authorities. A sum of rupees One Lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied and/or modified and/or rectified by directing that not only the assets and properties, rights and interests of the Jute Division. specified in Schedule B of the said order but also all other properties, rights and interests of the Jute Division including North Mill of the transferor to and vested, without any further act or deed, in the applicant company under Section 394 (2) of the Companies Act, 1956 but subject to all charges affecting the same". Fort Gloster contested the said proceedings. Bowreah also intervened. Initially they were allowed to participate, however at the final hearing learned Judge found, they could not have any say in the matter. Learned Judge dismissed the application by holding that the North Mill was not in contemplation when the sanction was prayed for and granted. Gloster filed the appeal being A.P.O. No. 194 of 2012 without making Bowreah a party. Bowreah intervened. The Division Bench, while admitting the appeal, permitted Bowreah to make submission. However, at the time of hearing of the application, Gloster objected to their presence as according to them, the learned Judge had already held that they would not be entitled to hearing. Hence, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Hooghly in 1988. He admitted that no valuation had been done at the time of demerger. It was really a division of business between two groups on 50-50 basis as contained in the Memorandum of Understanding. He referred to page-101 of the petition where schedule of assets were appended to, that would not include North Mill. Mr. Kapoor relied on the Apex Court decision in the case of Ram Chander Vs. The State of Haryana reported in 1981 Volume- III Supreme Court page 191 equivalent to All India Reporter 1981 page-1036. Paragraph-3 was relied upon wherein the Apex Court observed, "The adversary system of trial being what it is there is an unfortunate tendency for a Judge presiding over a trial to assume the role of a referee or an umpire and to allow the trial to develop into a contest between the prosecution and the defence with the inevitable distortions flowing from combative and competitive elements entering the trial procedure". Citing the above passage Mr. Kapoor commented on the role of the learned Judge while disposing of the said application. He referred to the judgment and order impugned to say, learned Judge, instead of dealing with the arguments that was advanced by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of sanction dated May 31, 1993 was duly drawn up and there was substantial compliance of Form-42. It would need no further correction. In any event, the petitioner being the Gloster did not make any averment in the pleading as to the mistake. They approached the Court after nineteen years and the application would be grossly delayed and barred by the provisions of Article 137 of the Limitation Act. He prayed for dismissal of the appeal filed by Gloster. He did not make any comment on the other appeal. He rather indirectly supported Bowreah, claiming title over the North Mill through Hooghly. P.C. SEN : Mr. P.C. Sen, learned Senior Counsel appearing for Bowreah adopted the submissions made by Mr. Basak. Mr. Sen based his argument principally on res judicata so advanced by Mr. Basak. He took us to the agreement for sale to show that it was nothing but a concluded sale subject to further formalities being completed. He further contended that before the Arbitration Court Gloster did not take the plea of mistake. The learned Single Judge held that Gloster was not a party to the arbitration agreement between Fort Gloster and Bowreah. The scheme also did not transfer the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said mistake and approached the Court. With the leave of the other counsel, he cited the Apex Court decision in the case of Chandra Bhal Vs. The State of U.P. reported in 1971 Volume-III Supreme Court Cases page-983 and in the case of Narayanan Vs. Kumaran & Ors. reported in 2004 Volume-IV Supreme Court Cases page-26. Mr. Dhruba Ghosh, while distinguishing Chandra Bhal (supra) : Mr. Dhruba Ghosh, learned counsel dealt with the decision in the case of Chandra Bhal (supra) to say that the said decision would rather support Bowreah, not Gloster. OUR VIEW ON THE CASES CITED : The Rev. Oswald Joseph Reichel : Bishop of a Church filed a suit claiming that he was vicar of the benefice. He lost the case. Subsequently someone else was appointed Bishop. When he wanted to take charge the earlier Bishop objected contending that he was the vicar. The House of Lords affirming the decision of the Court of Appeal, held that there was an inherent jurisdiction in the Court to strike out the statement of defence as frivolous and vexatious and an abuse of the procedure, and to enter judgment for the plaintiff with a declaration and injunction as claimed. Lord Halsbury would say, "My Lords, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f res judicata. The said paragraph being relevant and is quoted below : "The principles of res judicata are of universal application as they are based on two age-old principles, namely, interest reipublicae ut sit finis litium which means that it is in the interest of the State that there should be an end to litigation and the other principle is nemo debet bis vexari, si constat curiae quod sit pro una et eademn causa meaning thereby that no one ought to be vexed twice in a litigation if it appears to the court that it is for one and the same cause. The doctrine of res judicata is common to all civilised system of jurisprudence to the extent that a judgment after a proper trial by a court of competent jurisdiction should be regarded as final and conclusive determination of the question litigated and should for ever set the controversy at rest". Our understanding of the law and its application in the present case : Let us first decide the issue of res judicata. The learned Single Judge held it in favour of Mr. Kapoor. His Lordship held that the plea of res judicata may not be applicable in the present case. To decide this question let us consider the decision of the Arbitration C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the case may be that would be a subject matter for the Civil Court to decide. It would not be proper for us to allow prayer (a) as a whole that too, after nineteen years of sanction. It would be absolutely travesty of justice if we allow such prayer under the guise of correction. We would only observe that the parties contemplated, the jute business and cable business as of 1992 would be divided between two groups of Bangurs through demerger. We would prefer to stop there. Being a Court of record, we however wish to correct the mistake that crept in the drawn up order by incorporating the words so inadvertently omitted. We thus allow prayer (a) to the extent that the order dated May 31, 1998 as drawn up be corrected by incorporating the following words, "and all other the property, rights and powers of the transferor company in jute division". The Judgment and order of the learned Single Judge stands modified accordingly. Appeals are accordingly disposed of without any order as to costs. We abundantly make it clear that our observations as contained herein including those of the learned Single Judge impugned herein must not prejudice the rights and contentions of the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X
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