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TMI Blog2022 (4) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Upon a reading of the plaint it emerges that the plaintiffs are shareholders in the defendant no.4 Company, RC Healthcare Private Limited. The defendant no.5, SpectraRC Medicare Private Limited and the defendant no.6, Sight Avenue Private Limited, are companies having the same registered office as the defendant no.4 Company. The defendant no.1, Dr. Suraj Munjal and the defendant no.2, Dr. Ashita Munjal, are shareholders in the defendant no.4 Company. The defendant no.1 is also a director and shareholder of the defendant no.5 and the owner of the trade name 'The Sight Avenue', used by the defendant no.6. The defendant no.2 is also a shareholder of the defendant no.6. The defendant no.3, Mr. Daya Shanker Sharma, is a former director and shareholder of the defendant no.5. 4. The suit has been filed by the plaintiffs, inter alia, seeking mandatory and permanent injunction against the defendants no.1, 2, 3, 5 and 6, restraining them from passing off and violating the registered trademark and trade names of the defendant no. 4 Company, which owns and runs a famous eye hospital by the brand and trade name of 'Spectra Eye' at E-82A, Greater Kailash, Part-I, Delhi since 2009 and numer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of similar reliefs, which are subject matters of present plaint. The said company petition is still pending. The plaintiffs and the defendant no. 7 are represented by the same counsel in various proceedings and are supporting each other in the present suit as well as in the proceedings before the NCLT. (iii) In the aforesaid company petition, the defendant no. 7 has filed an application being C.A. No. 147/2020 (page 447 of the defendants' documents), seeking exactly the same reliefs, which have been sought in the present suit by the plaintiffs. The factum of the filing of this application has been concealed by the plaintiffs in the present suit. (iv) The present suit has been filed only because the defendant no. 7, the petitioner in the aforesaid company petition, could not succeed in getting the reliefs before the NCLT. (v) In the aforesaid company petition, the management of the defendant no.4 Company was bestowed upon the defendant no.1 by means of the consent order dated passed on 4th October, 2017, which was slightly modified on 9th November, 2017, is still in force. (vi) In this regard, reliance is placed on the judgments in Vikram Jairath and Ors. Vs. Middleton ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso to Section 16 of the CPC, as the reliefs claimed are capable of being enforced through personal obedience of the defendant no.1, who admittedly works for gain in Delhi. Reliance in this regard is placed on the judgment in Shivnarayan (Dead) By Legal Representatives Vs. Maniklal (Dead) Through Legal Representatives and Ors., (2020) 11 SCC 629. (ii) The present suit would be maintainable before this Court even if one of the suit properties falls within the territorial jurisdiction of this Court. In this regard reliance is placed on Section 17 of the CPC read with Section 39(1)(c) of the CPC. (iii) Even otherwise, the present suit is maintainable before this Court as part of the cause of action has arisen in Delhi. Reliance in this regard is placed on Section 20 of the CPC. The cause of action for filing the present suit arises from siphoning off of funds from the bank accounts of defendant no.4 Company held in Delhi, siphoning off of the business of the defendant no.4 Company, which operates out of Delhi, and infringement/passing off the trademarks owned by the defendant no.4 Company, by adopting deceptively similar marks by the defendants at Delhi. (iv) While considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2019) 7 SCC 158 and Roop Lal Sathi Vs. Nachhattar Singh Gill, (1982) 3 SCC 487. 12. On the question of concealment and no cause of action arising, the senior counsel for the plaintiffs has made the following submissions: (i) Objections with regard to concealment cannot be a ground for rejection of the plaint under Order VII Rule 11 of the CPC. This is without prejudice of the contention of the plaintiffs that there has been no concealment. (ii) The cause of action for filing the present suit are subsequent facts, which either occurred at a later point of time or came to the knowledge of plaintiffs at a later point of time after filing of the petition before the NCLT. (iii) The present suit is a derivative suit filed on behalf of the plaintiffs to protect the interests of the defendant no.4 Company. Reliance in this regard is placed on the judgment in Starlight Real Estate (Ascot) Mauritius Limited & Anr. Vs. Jagrati Trade Services Private Limited & Ors., 2015 SCC OnLine Cal 6583. 13. On the question of the non-payment of Court fees, the senior counsel for the plaintiffs has made the following submissions: (i) It has specifically been stated in the plaint that at this sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the suit. 16. At the outset, it is relevant to set out the prayers in the plaint with regard to the reliefs as prayed for in the present suit: "In the facts and circumstances mentioned above, it is therefore most respectfully prayed that this Hon'ble Court be pleased to decree the present suit and grant the following reliefs: A. Declare that the pecuniary advantage and assets identified to have been gained by the Contesting Defendants individually or severally by siphoning off the monies and/ or by diverting business from the Defendant No.4 Company and hence, are in law, the assets of the Defendant No. 4 Company, and consequential reliefs and/ or directions in relation thereof for bringing the siphoned monies and/or assets back to the fold of the Defendant No. 4 Company may be passed for, including but not limited to: a. Plot No. 243P, Sector 38, admeasuring 420 square meters, Gurugram, Haryana purchased by Defendant No. 1 vide Sale Deed dated 20.06.2017 for an amount of INR 2,35,00,000/- (Rupees Two Crores Thirty Five Lakhs Only); b. Entire 8th Floor, MPD Towers, DLF Phase V, Gurugram purchased by Defendant No. 1 vide Sale Deed 21.01.2018 for an amount of INR 15,38,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e marks, tradenames, devices, brands owned by the Defendant No. 4 having all or some of the distinctive features which form an integral part of the registered trademark owned by the Defendant No. 4, for business other than that of the Defendant No. 4 which would otherwise amount to infringement of the Plaintiffs' statutory and common law rights; F. Direct the Defendants No. 1, 2, 3, 5 and 6, its proprietors, partners, promoters, directors, servants, principal officers, dealers, distributors, agents, franchisees and/ or any one acting for or on their behalf to deliver all the infringing material bearing the marks, tradenames, devices, brands which are identical or deceptively similar to or are a colourable imitation or substantial reproduction of the marks, tradenames, devices, brands owned by the Defendant No. 4 having all or some of the distinctive features which form an integral part of the registered trademark, for business other than that of the Defendant No. 4; G. Rendition of accounts in respect of businesses, relating to, akin to or similar to, the business of the Defendant No. 4 Company by using the tradename, brand name, goodwill of the Defendant No. 4 including th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : "16. Suits to be instituted where subject-matter situate.- Subject to the pecuniary or other limitations prescribed by any law, suits- (a) for the recovery of immovable property with or without rent or profits, xxxx xxxx xxxx (d) or the determination of any other right to or interest in immovable property, xxxx xxxx xxxx shall be instituted in the Court within the local limits of whose jurisdiction the property is situate: Provided that a suit to obtain relief respecting, or compensation for wrong to, immovable property held by or on behalf of the defendant may, where the relief sought can be entirely obtained through his personal obedience, be instituted either in the Court within the local limits of whose jurisdiction the property is situate, or in the Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain. Explanation. -In this section "property" means property situate in 1[India]. 17. Suits for immovable property situate within jurisdiction of different Courts. - Where a suit is to obtain relief respecting, or compensation for wrong to, immovable pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l jurisdiction of this Court. 22. Furthermore, one of the properties in respect of which the reliefs have been claimed in the present suit, is located in Greater Kailash, Part-I, Delhi, which lies within the territorial jurisdiction of this Court. Therefore, in terms of Section 17 of CPC, the present suit has been validly instituted before this Court. In this regard, reference may be made to the observations of the Supreme Court in Shivnarayan (Deceased) By Lrs. (supra), as relied upon by the plaintiffs, with regard to Sections 16 and 17 of the CPC, which are set out as under: "33. Sections 16 and 17 CPC are part of the one statutory scheme. Section 16 contains general principle that suits are to be instituted where subject-matter is situate whereas Section 17 engrafts an exception to the general rule as occurring in Section 16. 34. From the foregoing discussions, we arrive at the following conclusions with regard to ambit and scope of Section 17 CPC: 34.1. The word "property" occurring in Section 17 although has been used in "singular" but by virtue of Section 13 of the General Clauses Act it may also be read as "plural" i.e. "properties". 34.2. The expression "any portio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the defendants has placed reliance on the judgment of the Supreme Court in Harshad Chiman Lal Modi (supra), to contend that the proviso to Section 16 of the CPC cannot be interpreted so as to enlarge the scope of main provisions of Section 16. 25. There is no quarrel with the proposition of law that a proviso cannot be given a wide interpretation so as to the defeat the main provisions. However, it has specifically been noted in Harshad Chiman Lal Modi (supra) that the proviso would apply, if the relief sought in the suit can be obtained through the personal obedience of the defendant. In fact, in the same judgment in paragraph 13, the Supreme Court has specifically noted that Section 17 of the CPC supplements Section 16 of the CPC and in effect is another proviso to Section 16. 26. The only contention made by the counsel for the contesting defendants in this regard is that Section 17 of the CPC inherently cannot apply in suits for possession. In my view, there is no basis for said contention and the same is rejected. 27. The counsel for the contesting defendants has also placed reliance on the judgment of the Division Bench of this Court in Vipul Infrastructure Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended on behalf of the contesting defendants that most of the reliefs sought under the present plaint lie within the domain of the NCLT under Sections 241 and 242 of the Companies Act and, therefore, in terms of the bar under Section 430 of the Companies Act, this Court is debarred from granting such reliefs. In fact, a Company Petition bearing CP No. 227/2017 has already been filed before the NCLT by the defendant no.7, who is acting in concert with the plaintiffs herein. In this regard, prayers A, C, D, and J are those prayers in respect of which, the contesting defendants have contended that the jurisdiction of this Court is barred. 35. At this stage, it is deemed prudent to reproduce the reliefs as prayed for in the Company Petition bearing CP No.227/2017 as follows: "75. In the facts and circumstances of the present case, the Petitioner respectfully pray that this Hon'ble Board be pleased to: A. Declare that all actions done by Dr. Suraj Munjal as stated in Paras 50 - 58 during his tenure as a director are oppressive against the Petitioner and other shareholders and amount to mismanagement of the Respondent No. 1 Company under Section 241 and 242 of the Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights between the parties and can only be decided in a civil suit. The relevant observations of the Supreme Court in paragraphs 29 and 31 are reproduced below: "29. It is also not disputed that the High Court in the pending civil suit passed an order maintaining the status quo concerning shareholding and other properties. Because of the status quo order, shares have to be held in the name of Mrs Aruna Oswal until the suit is finally decided. It would not be appropriate given the order passed by the civil court to treat the shareholding in the name of Respondent 1 by NCLT before ownership rights are finally decided in the civil suit, and propriety also demands it. The question of right, title, and interest is essentially adjudication of civil rights between the parties, as to the effect of the nomination decision in a civil suit is going to govern the parties' rights. It would not be appropriate to entertain these parallel proceedings and give waiver as claimed under Section 244 before the civil suit's decision. Respondent 1 had himself chosen to avail the remedy of the civil suit, as such filing of an application under Sections 241 and 242 after that is nothing but an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 11(d) CPC cannot be pursued only in respect of one of the defendant(s). In other words, the plaint has to be rejected as a whole or not at all, in exercise of power under Order 7 Rule 11(d) CPC. Indeed, the learned Single Judge rejected this objection raised by the appellant(s) by relying on the decision of the Division Bench of the same High Court. However, we find that the decision of this Court in Sejal Glass Ltd. is directly on the point. In that case, an application was filed by the defendant(s) under Order 7 Rule 11(d) CPC stating that the plaint disclosed no cause of action. The civil court held that the plaint is to be bifurcated as it did not disclose any cause of action against the Director's Defendant(s) 2 to 4 therein. On that basis, the High Court had opined that the suit can continue against Defendant 1 company alone. The question considered by this Court was whether such a course is open to the civil court in exercise of powers under Order 7 Rule 11(d) CPC. The Court answered the said question in the negative by adverting to several decisions on the point which had consistently held that the plaint can either be rejected as a whole or not at all. The Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the partial rejection of the plaint is permissible, in view of the categorical observations of the Apex Court in Madhav Prasad Aggarwal and Anr. (supra), no reliance can be placed on the said judgments. 43. In any event, the proceedings before the NCLT had been instituted by the defendant no.7 and not by the plaintiffs herein. Just because one of the shareholders has chosen to invoke their grievance under the provisions of the Companies Act, cannot imply that another shareholder with similar grievance cannot invoke their grievance before a Civil Court, if the jurisdiction of the Civil Court is otherwise made out. 44. In respect of the contention of the contesting defendants that the present suit, filed as a derivative suit, is not maintainable as the plaintiffs are majority shareholders in the defendant no. 4 Company, it may be relevant to note that a derivative action on behalf of a company is filed to redress a wrong done to a company by the persons in control of the company. In the normal circumstances, the company itself would have filed a suit, but is unable to do so on account of the wrong doers being in control of the company. Therefore, the concept of derivative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 147/2020 by the defendant no.7 has been supressed by the plaintiffs. As regards the alleged suppression/concealment on behalf of the plaintiffs, in the said application, interim reliefs against the respondents therein have been sought to restrain them from carrying on competing business. However, no declaratory reliefs in respect of the title of the suit properties and reliefs based on intellectual property rights have been sought. The proceedings before the NCLT and the order dated 4th October, 2017 have been duly disclosed by the plaintiffs in the plaint. In this regard, reference may be made to the documents filed by the plaintiffs, of which the company petition being CP No. 227/2017 forms a part. The judgment in Vikram Jairath (supra) is not applicable to the facts and circumstances of the present case, as in the said case the plaintiffs therein had suppressed the fact that they also instituted proceedings before the NCLT. In any event, concealment by itself cannot be a ground for rejection of the plaint under the provisions of Order VII Rule 11 of the CPC. 47. As regards the objections taken by the contesting defendants that the suit has not been valued properly for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including all its aspect. Merely because some figure has been indicated in the pleadings or correspondence exchanged between the parties in regard to renovation and furnishing of the hotel, would not determine the complete settled accounts of the partnership so as to make the plaintiffs liable to pay the ad valorem court fee on the fond hope or an estimated figure. The plaintiffs would obviously be liable to pay the court fee on final determination arrived at by the court upon true and correct rendition of accounts, as admittedly the defendants are carrying on the business, though their pleading is that the partnership has already been dissolved." To similar effect is the judgment of this Court in Vijay Singh (supra). 48. It has been specifically stated by the plaintiffs in paragraphs 82 and 83 of the plaint that at this stage, the plaintiffs are able to assign a only an estimated value to the said relief and they undertake to deposit such further Court fees, as may be payable, upon rendition of accounts. The said paragraphs 82 and 83 of the plaint are reproduced as follows: "82. That the above valuation has been done on the basis of an estimate available with the Plaintiffs on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermore, the plaintiffs have undertaken to deposit such Court fees, as be directed by this Court to be paid in respect of the reliefs being sought in the present suit. Thus, the plaintiffs would only be liable to pay the Court fees upon the final determination that is arrived by the Court, of the amounts payable after rendition of accounts. 51. The judgment in Dr. Zubair Ul Abidin & Ors. (supra) cited on behalf of the contesting defendants was in the context of the plaintiff not paying Court Fees on the estimated amount of damages in the suit. The same was not in the context of Court Fees payable on the relief of rendition of accounts and, therefore, it has no relevance in the facts and circumstances of the present case. In Meenakshisundaram Chettiar (supra), as relied upon by the contesting defendants, the Supreme Court observed that if the Court comes to the conclusion that the plaintiff has undervalued the suit, the same can be rejected under Order VII Rule 11 of the CPC. Upon applying the principles of Meenakshisundaram Chettiar (supra) and on a consideration of the entire circumstances of the case, I do not find that the estimate of the relief as given by the plaintiffs is ina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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