9911796707
TMI Blog2015 (10) TMI 2659X X X X Extracts X X X X X X X X Extracts X X X X ..... s no quarrel to the proposition of law that the temporary injunction is passed in aid of the final relief. An application for injunction is considered and decided on a well recognized three parameters, namely, existence of prima-facie case, plans of convenience and inconvenience and irreparable loss and injury. It admits no ambiguity to say that if the Court lacks inherent jurisdiction the prayer for injunction can be refused as the said order shall be a nullity. Though several provisions of SICA is placed before this Court to demonstrate that the allegations contained in the plaint can very well be agitated before the BIFR and therefore the provisions contained under Section 26 of the SICA bars the jurisdiction of the Civil Court to determine such dispute it would be too early to accept such proposition and can be said with certainty that the Civil Court’s jurisdiction is completely ousted under the said provision. It is a settled law that the Court should read the plaint a whole and not in isolated manner. This Court, therefore, cannot accept the contention of the Opposite Party at this stage that the issues involved in the suit is squarely comes when the purview of SICA so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacture of the cotton, polyester and blended yarns and for smooth running of such business took a loan from various banks. Having faced difficulty in liquidating the loans obtained from the different banks, one time settlement was arrived and to fulfill such obligations, entered into tripartite share subscriptions and shareholder s agreement with the Opposite Party No. 1. In course of implementing the terms of the said agreement disputes were raised which constrained the Petitioners to invoke the provisions contained under Section 9 of the Arbitration and Conciliation Act, 1996 before the Principal Civil Court in the District. It is not in dispute that the said proceeding ended before the Supreme Court. Subsequently, the Opposite Party No. 2 Company filed an application before the Board for Industrial and Financial Reconstruction (BIFR) and was declared sick. The BIFR while entertaining the proceeding passed an order directing the parties in the proceedings to maintain status-quo on 24.03.2014. An approach was made before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) by filing an appeal which was disposed of without modifying the order dated 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing five persons as Directors in the Board of Directors under the said agreement is unlawful and void and in clear contravention thereto. He further refers the termination clause to support his contention that the agreement shall stand terminated automatically vis- -vis the investor or the promoters if the investor ceases to hold directly or indirectly any equity shares of the company. According to him the divestation of the shares held by the Opposite Party (Investor) attracts termination of the said agreement automatically and therefore the Opposite Party No. 3 cannot claim any rights under the said agreement being not the affiliates. Attacking the impugned order Mr. Chatterjee submits that the Trial Court misconstrued the provisions contained under Section 26 of The Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as SICA) to apply a bar in entertaining a suit instituted before the Civil Court. Lastly, he submits that the judgment of the Supreme Court relied upon by the Trial Court in case of Tata Motors Ltd. Vs- Pharmaceuticals Products of India Ltd. Anr. reported in ( 2008) 7 SCC 619 has no manner of applicability in the present context a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ICA and therefore the Civil Court has no jurisdiction to pass any injunction and placed reliance upon a judgment of the Supreme Court in case of Ghamashyam Sarda Vs- M/s S.S. Trading Company reported in AIR 2015 Supreme Court 403. He thus submits that there is no infirmity and / or illegality in the order passed by the Trial Court rejecting an application for temporary injunction. 8. Mr. Dhruba Ghosh, the learned Advocate appearing for the Opposite Party No. 3 adopts the submissions of Mr. Mitra and additionally submits that after the appointment of the Directors nominated by his client the prayer for temporary injunction has virtually become infructuous. He further submits that the agreement does not prohibit the transfer of shares held by the Opposite Party No. 1 to any person and therefore it is apparent that the reliefs claimed in the suit cannot be granted in favour of the Petitioner. 9. Having heard and considered the respective submissions, undisputedly none of the parties are ad idem on the factual position that there is no restriction on transferability of the equity shares holding by the Opposite Party No. 1 under the said agreement. The dispute raised by the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the same manner as indicated in a proceeding Clause. On harmonious reading of the different Clauses including 13.4, there is no hesitation that the equity shares are freely transferable or assignable. 10. The Article of Association of the Opposite Party No. 2 Company permits the transfer of shares by the investor and the Shareholders Agreement being a private contract cannot contain a provision contrary to the Article of Association it would be apt to quote:-- 261. Shareholders Agreement (for short SHA ) is essentially a contract between some or all other shareholders in a company, the purpose of which is to confer rights and impose obligations over and above those provided by the company law. SHA is a private contract between the shareholders compared to the articles of association of the company, which is a public document. Being a private document it binds parties thereof and not the other remaining shareholders in the company. Advantage of SHA is that it gives greater flexibility, unlike the articles of association. It also makes provisions for resolution of any dispute between the shareholders and also how the future capital contributions have to be made. Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, existence of prima-facie case, plans of convenience and inconvenience and irreparable loss and injury. It admits no ambiguity to say that if the Court lacks inherent jurisdiction the prayer for injunction can be refused as the said order shall be a nullity. Though several provisions of SICA is placed before this Court to demonstrate that the allegations contained in the plaint can very well be agitated before the BIFR and therefore the provisions contained under Section 26 of the SICA bars the jurisdiction of the Civil Court to determine such dispute it would be too early to accept such proposition and can be said with certainty that the Civil Court s jurisdiction is completely ousted under the said provision. 13. In case of Tata Motors Ltd. (Supra) one of the points which felt for consideration was whether the SICA excludes the provisions of the Companies Act in the above perspective it is held that SICA being a special statute and a self contained court it would prevail over the Companies Act in case of inconsistency it is relevant to quote the following:-- 21. It was conceded by Mr. Sundaram SICA being a special law vis- vis the 1956 Act, it shall prevail over the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
