9911796707
TMI Blog2017 (4) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... y the GVL to BWL by increasing the share capital of BRC and allotting those additional shares to GVL at a premium of ₹ 48/- per share with clear understanding that the same would be returned to BWL at a price of ₹ 158/- per equity share. The various clauses in the MOU conveys a definite intention of the parties that such amount is secured by nominating a person in the board of directors of the BRC by GVL. The matter took the different turn when the GVL wanted to have a full control of the BRC as BWL failed to buy back those shares within the stipulated time. Various meetings are called by the BRC and applications are pouring in on every such action for protection and preservation of the rights of the respective parties. From time to time the Court passes interim orders which are still operative. There is no difficulty in molding the relief under the changed circumstances even if the rights of the parties are crystallized at the time of institution of the suit. The interim orders are passed in aid of the final relief to protect and preserve the rights of the parties. This Court is unable to accept the submission of Mr. Mitra that the Court cannot pass an interim or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the defendants thereunder from revoking, canceling or terminating the registered user agreement dated February 25th, 2008 as modified by the agreement dated February 26th, 2010 and a letter of undertaking dated February 26th, 2010 issued by Bengal Waterproof Ltd. (BWC), the defendant no. 1 therein and mandatory injunction directing all the defendants therein to execute supplementary agreement to registered user agreement incorporating three clauses as agreed in a letter of undertaking dated February 26th, 2010 and other consequential reliefs in the form of specific performance of an agreement dated February 25th, 2010. C.S. 156 of 2011 is filed by BWC along with two persons claiming to be controlling, administering and managing the affairs of the BWL for declaration that the board meetings held on 24th May, 2011 and 4th June, 2011 by Bihar Rubber Company Ltd. (BRC), the defendant no. 1 therein are illegal, null and void. A further declaration was sought that all forms and returns pertaining to BRC and notice dated 17th June, 2011 be declared void, delivered up and cancelled. The consequential relief in the form of an injunction is further sought restraining the defendants ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference share of ₹ 100/- and 47,000/- equity shares of the same value and the paid up share capital of the BRC was ₹ 28,56000/- divided into the 28,560 equity shares of ₹ 100/- each. Pursuant to the discussion the shareholders of BRC in extraordinary general meeting held on 25th February, 2010 resolved to increase the authorized share capital to ₹ 2,00,00000/- by issuing 1,97,000 equity shares of ₹ 100/- each in addition to the existing shares. It was agreed that BRC shall issue the said increased equity shares at a premium of ₹ 48/- per share to GVL within five working days from the date of the execution of the said M.O.U and all follow up actions shall be taken in respect thereof. To secure the aforesaid amount the GVL was permitted to nominate one person to act as a Chief Finance Officer in BRC and all the bank accounts of the said company shall be operated jointly in which the said Chief Finance Officer shall be one of the secondary. All the meetings of the board of directors of the BRC shall be held in presence of the said Chief Finance Officer and remain binding on the parties. The capital so generated in BRC by issuing the preferentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and terms and conditions embodied in memorandum of agreement and supplementary agreement including the user agreement, which this Court feels, are the matter to be decided after full-fledged trial. Several, interlocutory applications are taken out by the respective plaintiffs of both the suits for interim reliefs and the orders are being passed from time to time. The first application which was filed by the GVL in its suit being G.A. 1054 of 2011 for an order of injunction restraining BWL, CWL, BRC and other three defendants being the directors of the BWL from revoking, canceling and terminating the registered deed of agreement dated February 25th, 2008 as modified by the agreement dated February 26th, 2010 and an undertaking of even date and / or changing the capital structure of the BRC and other reliefs which are sought in the plaint (C.S. No. 76 of 2011). The said application was moved on 13th April, 2011 and an ad interim order of injunction was passed restraining the defendants therein from issuing any further shares in BRC and / or from changing the capital structure thereof in any manner whatsoever. However, the Court found that the differences may be resolved by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter issuance of the interim order in G.A. 1054 of 2011 on 13th April, 2011 and 11th May, 2011, an application was taken out by BWL being G.A. 1840 of 2011 in C.S. 76 of 2011 alleging the taking over of the management and control of the BRC by GVL, which would be evident from the letters issued on 8th June, 2011 through the General Manager. It is alleged therein that the GVL has acted with ulterior motive to take over the management and control the BRC and also misappropriating the shares which was kept as collateral security for the money lent and advance. An order of injunction was sought restraining the GVL from making any allegations as contained in the said letter or similar allegations and also from interfering with the business activities of the BWL, CWL and BRC. The Court did not pass any ad interim order when the said application was moved but directed the exchange of affidavits by the parties. While the aforesaid applications were pending an interim order and directions for affidavits were passed, another application being G.A. 2697 of 2011 is taken out by BWL in C.S. 156 of 2011 alleging that despite the interim order passed in the aforesaid applications, the GVL is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected all the interlocutory applications to be listed at adjourned motion on 2nd November, 2011 and further directed the parties to complete the affidavits in the meantime. Against the said order dated 30th September, 2011 by which the Co-ordinate Bench directed the meeting to be convened for the purpose of adjournment, an intra court appeal was filed before the Division Bench which was eventually dismissed. Pursuant to the said leave being granted to convene the meeting the representative of the BWL attended the same and it was recorded on a sheet of paper that the meeting was adjourned till 16th November, 2011. The authorized representative of BWL raised a point in the said meeting that the same is defective being coram non judis as only two share holders were present whereas the five members are required to form the coram. The extract of the resolution was subsequently came to the notice of the BWL on 18th October, 2011. An application being G.A. 3230 of 2011 was filed by the BWL challenging the notice dated 12th October, 2011 by which the meeting was scheduled to be held on 16th November, 2011 on the aforesaid allegations for an order of injunction against the GVL and the BRC n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only. The Court appointed the Special Officer to ensure that all sale proceeds are deposited in accounts of the BRC held with the State Bank of India under the supervision of the Special Officer and the accounts of the BRC should be prepared on quarterly basis to be furnished to the Advocate on Record of the appearing parties. The said order dated 10th June, 2012 was assailed before the Division Bench in APOT 33 of 2012 which came up for final disposal on 6th February, 2012. The Division Bench observed that the direction to deposit the entire sale proceeds received or receivable in the account of the BRC with the State Bank of India without any clarification as to the withdrawal for day to day running of business, appears to be harsh as it would cause impediment in the smooth running of the business. The said order was modified by the Division Bench to the extent that the Chief Finance Officer shall act as Joint Special Officer to see that the deposit of sale proceeds and other amount are deposited in the State Bank of India for the time being and BRC will be entitled to withdraw the amount from the said account as and when necessary for the purpose of running of the business. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be corroborated by the fact that in fact the time was extended. In support of the aforesaid contention he placed reliance upon a judgment of the Supreme Court in case of M/s Hind Construction Contractors Vs- State of Maharashtra reported in AIR 1979 SC 720, McDermott International Inc. Vs- Burn Standard Co. Ltd. Ors. reported in (2006) 11 SCC 181 and Arosan Enterprises Ltd. Vs- Union of India reported in (1999) 9 SCC 449. Mr. Saha ardently submitted that the two cheques covering the value of the shares allotted to the GVL in terms of the said MOU was tendered and upon refusal thereof, the BWL instituted a suit for such reliefs. He, thus, submitted that any action taken during the pendency of the suits can be taken note of by the Court and the appropriate order may be passed in furtherance of the final relief claimed in the suit under the changed circumstances and therefore there is no fetter on the part of the Court to mould the relief necessitated by the subsequent events. To buttress the aforesaid submission, the reliance is placed upon a judgment of the Supreme Court rendered in case of Gaiv Dinshaw Irani Ors. Vs- Tehmtan Irani Ors. reported in (2014) 8 SCC 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gathered therefrom. Admittedly, the BRC was a subsidiary of the BWL and the later is the registered owner of the trademark Duckback . The BRC was allowed to use the said trademark by a registered user agreement dated 28th August, 1972, which was extended and renewed from time to time. The last registered user agreement was entered into on 25th February, 2008 for a period of 10 years, which may be extended for further term as may be agreed. It is also not in dispute that the CWL is the holding company of BWL and BRC and both the later companies were in need of urgent financial support to discharge there liabilities. The MOU dated 26th February, 2010 was entered into to give the financial support to those companies and in order to secure the money so invested, it was agreed that the BRC will increase the share capital and allot the same to the GVL at a premium of ₹ 48/- per share within five working days from the date of the execution. It was further agreed that the invested amount so generated in BRC shall be transferred to BWL as refundable security deposit carrying an interest at the rate of 12% per annum and the BWC shall permit the BRC to use the trademark Duckback ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eek the work undertaken remains unfinished on the expiry of the time provided in the contract such clauses would be construed as rendering ineffective the express provision relating to the time being of the essence of contract. It is no longer res integra that mere fixation of time to perform certain obligation does not ipso facto make the time an essence of the contract. The various clauses of the contact is to be read conjointly and in meaningful manner so also the intention of the parties and their conduct and actions in pursuance thereof. Apart from the same, the recitals of the agreement is also a relevant factor in this regard as held in case of Arosan Enterprises Ltd. Vs- Union of India reported in (1999) 9 SCC 449 in the following words:- 27. Mere fixation of a period of delivery or a time in regard thereto does not by itself make the time as the essence of the contract, but the agreement shall have to be considered in its entirety and on proper appreciation of the intent and purport of the clauses incorporated therein. The state of facts and the relevant terms of the agreement ought to be noticed in their proper perspective so as to assess the intent of the parties. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation under the said head of claim was only in addition to Change Orders 2, 3 and 7 to which we shall advert to a little later. 88. This Court in Hind Construction v. State of Maharashtra stated: (SCC pp. 76-77, paras 7 8) 7. that question whether or not time was of the essence of the contract would essentially be a question of the intention of the parties to be gathered from the terms of the contract. (See Halsbury s Laws of England, 4th Edn., Vol. 4, para 1179). 8. even where the parties have expressly provided that time is of the essence of the contract such a stipulation will have to be read along with other provisions of the contract and such other provisions may, on construction of the contract, exclude the inference that the completion of the work by a particular date was intended to be fundamental; (See Lamprell v. Billericay Union Exch at p. 308; Webb v. Hughes; Charles Rickards Ltd. v. Oppenheim.) In view of the proposition of law as laid down in the above reports, what emerges is that mere stipulation of time in the contract does not automatically attract the time being the essence of a contract. The time, being the essence of a contract, must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenged by the appellants before us. In ordinary course of litigation, the rights of parties are crystallised on the date the suit is instituted and only the same set of facts must be considered. However, in the interest of justice, a court including a court of appeal under Section 96 of the Code of Civil Procedure is not precluded from taking note of developments subsequent to the commencement of the litigation, when such events have a direct bearing on the relief claimed by a party or on the entire purpose of the suit, the courts taking note of the same should mould the relief accordingly. This rule is one of ancient vintage adopted by the Supreme Court of America in Patterson v. Alabama followed in Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri. The aforementioned cases were recognised by this Court in Pasupuleti Venkateswarlu v. Motor and General Traders wherein he stated that: (SCC pp. 772-73, para 4) 4. It is basic to our processual jurisprudence that the right to relief must be judged to exist as on the date a suitor institutes the legal proceeding. Equally clear is the principle that procedure is the handmaid and not the mistress of the judicial process. If a fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution of the suit yet the court has power to mould the relief in case the following three conditions are satisfied: (SCC p. 263, para 11) 11. (i) that the relief, as claimed originally has, by reason of subsequent events, become inappropriate or cannot be granted; (ii) that taking note of such subsequent event or changed circumstances would shorten litigation and enable complete justice being done to the parties; and (iii) that such subsequent event is brought to the notice of the court promptly and in accordance with the rules of procedural law so that the opposite party is not taken by surprise. 51. This Court in Rajesh D. Darbar v. Narasingrao Krishnaji Kulkarni, a matter regarding the elections in a registered society, held that the courts can mould relief accordingly taking note of subsequent events. Furthermore, in Beg Raj Singh v. State of U.P.21 while deciding on the issue of renewal of a mining lease held that: (SCC pp. 729-30, para 7) 7. A petitioner, though entitled to relief in law, may yet be denied relief in equity because of subsequent or intervening events i.e. the events between the commencement of litigation and the date of decision. The rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
