9911796707
TMI Blog2017 (3) TMI 1893X X X X Extracts X X X X X X X X Extracts X X X X ..... ....................... 42 A. THE PRELIMINARY ISSUE 1. This judgment disposes of the following preliminary issue framed under Section 9A of the Code of Civil Procedure, 1908 ("CPC") on 25th August 2016: "Whether any of the reliefs claimed are barred by limitation?" 2. The attempt by the Plaintiff, made till the very end, to suggest that limitation cannot be a preliminary issue being a mixed question of fact and law must be rejected out of hand in view of the Supreme Court decision in Foreshore Co-operative Housing Society Ltd v Praveen D Desai & Ors. (2015) 6 SCC 412 The correctness of Foreshore was questioned in Jagdish Shyamrao Thorve v Shri Mohan Sitaram (Special Leave Petition (C) No. 22438 of 2015, order dated 17th August 2015), and the matter was directed to be placed before the Hon'ble the Chief Justice of India for constituting a larger Bench, that reference has not yet been answered. Consequently, Foreshore continues to hold the field. I did not permit the Plaintiffs' counsel to argue to the contrary, and I cannot possibly accept their argument that I should follow the earlier Supreme Court decision in Gunwantibai Mulchand Shah & Ors v Anton Elis Farel & Ors. (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit shares or have any beneficial interest therein;" 4. To understand how the suit lies, I should explain the array of parties. The 1st Defendant ("Bombay Oxygen") is a public limited company. It deals in industrial gases. Its shares are listed on the Bombay Stock Exchange. Defendants Nos. 2 to 9 are individuals and entities within the Shyam Ruia family ("Ruias"). Defendant No. 10 ("Griesheim") is a German Company. It was previously known as Messer Griesheim GmbH. Defendant No. 12 is a company with which Bombay Oxygen has apparently entered into a Development Agreement. That is covered by the remaining prayers that are within time. Defendant No. 13 is the Union Bank of India in whose favour Defendant No. 12 has apparently created a mortgage. We are not in the present proceedings under Section 9A concerned with Defendants Nos. 12 and 13. Defendant No. 11 ("Goyal Gases") is also an Indian Company. Griesheim holds 49% of the equity of Goyal Gases. The rest is held by the Suresh Goyal family and group. The Plaintiff ("Messer Holdings") is a company incorporated in the British Virgin Islands. It is a subsidiary of Griesheim, which holds 51% of its equity. The remaining 49% in Messer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e very shares. This was not some mere idle claim of which Messer Holdings could think to take no notice. Messer Holdings was aware of both Suits. It was sought to be joined to the 2000 suit by an amendment and it was made a Defendant to the second suit filed in 2001 by the Ruias. It sought impleadment itself. I will examine the claims in these Suits, but it seems to me that irrespective of the fact that both Suits were later held by the Supreme Court to be utterly frivolous, that subsequent decision cannot alter the fact that the two suits nonetheless represented a very real, eminent and proximate infringement of, or, at any rate, a clear and unequivocal threat to Messer Holdings' rights in respect of these shares. I cannot accept Mr Sreegesh's argument that no suit was necessary by Messer Holdings until such time as there was written documentation between Griesheim and the Ruias, and Messer Holdings was made aware of this. It is equally impossible to accept his submission that there can ever be a class of civil suits to which no limitation applies. I have also rejected as untenable his submission that the mere filing of a suit is no more than a claim and that though, by vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not apply to any sale of the shares by Griesheim to a company from its parent group, the Hoechst Group. 15. On 25th August 1998 Griesheim paid the entire consideration of Rs 13.04 crores to Ruias. Griesheim's nominees were appointed to Bombay Oxygen's board. Griesheim took over the management of Bombay Oxygen. Goyal Gases moved the Delhi High Court against Griesheim from getting any shares in Bombay Oxygen, saying this violated the non-compete clause in the 1995 SPCA between Griesheim and Goyal Gases. Goyal said this on the basis that Griesheim's investment in Bombay Oxygen constituted a violation of the non-compete clause. By its order dated 18th December 1998, the Supreme Court permitted Griesheim to purchase and pay for additional shares of Bombay Oxygen acquired from the public but restrained Griesheim from getting these shares registered in its name. By a later order dated 8th February 1999 the Supreme Court held that since Ruias had been paid, the question of ownership and registration would be decided in arbitration proceedings between Griesheim and Goyal Gases. By this time, Griesheim had paid for 45,001 shares of Bombay Oxygen purchased from the Ruias and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00, accepting the undertaking by Griesheim that it would abide by Clause 6.1 of the SPA, this Court disposed of the Ruias' Notice of Motion No. 1804 of 1999. It directed Griesheim and Goyal Gases not to implement or enforce any arbitral Award without leave of the Court. The parties were left at liberty to adopt appropriate proceedings to enforce their respective rights. 21. On 13th March 2000, Griesheim and Goyal Gases agreed on the broad terms of a settlement of their disputes (then pending arbitration) relating to the 75,001 equity shares of Bombay Oxygen. Messer Holdings contends that in terms of this understanding Griesheim undertook to transfer these 75,001 shares of Bombay Oxygen to Messer Holdings for a consideration of DM 10 million equivalent to Euro 5,112,918.82. Griesheim agreed to deliver the actual share scrips of Bombay Oxygen to Messer Holdings with duly executed transfer and proxy forms. The terms of this understanding were concluded on 13th March 2000. On 20th May 2000, Griesheim is said to have delivered the physical share scrips for 75,001 shares of Bombay Oxygen to Messer Holdings along with share transfer forms. On 8th August 2000, Messer Holdings paid DM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ruias filed Notice of Motion No. 392 of 2001 seeking a restraint against, and again this is important, Goyal Gases and Messer Holdings from exercising any rights as the beneficial owners of these shares. 26. This would be an opportune moment to consider the precise reliefs that the Ruias sought in these two Suits. These are the reliefs in Ruias' suit No. 509 of 2001: "(a) for a declaration that the Share Purchase Agreement dated 23rd June 1997 is liable to be rescinded; (b) for an order of this Hon'ble Court directing the said Share Purchase Agreement dated 23rd June 1997 be rescinded; (c) that in the alternative to prayers (a) and (b) above, for a declaration that the Share Purchase Agreement dated 23rd June 1997 was voidable and has been validly avoided by the Plaintiffs; (d) that in the alternative to prayers (a), (b) and (c) above, for a declaration that the Share Purchase Agreement dated 23rd June 1997 was terminable by the Plaintiffs and has been validly terminated by the Plaintiffs; (e) that in the alternative to prayers (a), (b), (c) and (d) above, for a mandatory order and direction by this Hon'ble Curt, directing the 1st Defendant to offer the 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Defendants (by that time which included Messer Holdings) from exercising any beneficial rights in respect of those 75,001 shares. For completeness, here are the prayers in the first suit No. 2499 of 1999: (a)(i) For a declaration that the acquisition of the said 30,000 shares pursuant to the public offer is illegal, null and void and of no legal effect whatsoever. (ii) For a permanent order and injunction restraining the defendants from exercising any rights in respect of the said 30,000 shares including and in particular voting rights; (b)(i) for a declaration that the said agreement dated 23rd June 1997 (Exhibit -B hereto) stands validly terminated and/or avoided. (b)(ii)(a) that it be declared that Defendant Nos. 3 to 5 have no right, title or interest of any nature whatsoever in (b)(ii)(b) that in the alternative to prayer (b)(ii) this Hon'ble Court be pleased to order and direct the Defendant Nos 1 and 3 to 5 to deliver to the respective Plaintiffs 45001 shares of Defendant No. 2 as also to return to the respective members of the public the 35000 shares; (ii) that the defendant Nos. 1 3, 4 and 5 be ordered and decreed to deliver/return to the respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o; (v) procuring any breach of the provisions of clause 6.1 of the said Share Purchase Agreement dated 23rd June, 1977 being Ex. 'B' hereto; (b1)(a) In the alternative and in the event of prayer (b) not being granted and in the event of it being held that the said agreement is void, defendant Nos. 1, 4 and 5 be ordered and decreed to deliver/return to the respective Plaintiffs the said 45001 shares together with all accretions thereto from 23rd June 1977 on such terms of this Hon'ble Court may direct. (b) For the purpose aforesaid defendants Nos. 1, 4 and 5 be ordered and decreed to do and perform all acts, deeds, matters and things and to execute all documents, deeds and writings in furtherance thereof. 28. These are important because this is the point in time on which Messer Holdings was aware in the clearest possible way of the Ruias' claim to the same shares. This was no idle claim or boast. This was a court proceeding. If it succeeded, Messer Holdings' rights would have been infringed. The suit itself represented the clearest and most unambiguous threat to Messer Holdings' rights. The question will be whether or not Messer Holdings was boun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Settlement, whatever they may have been, were entirely irrelevant. The fact of the settlement between Ruias and Griesheim was sufficient and, I am unable to see how Messer Holdings could treat this as not affecting it. It was also possible for Messer Holdings to file a substantive suit seeking a declaration -- as indeed it only now does -- of its entitlement to these shares and saying that any settlement or agreement to the contrary between Ruias and Griesheim was not binding on it. 31. At this stage, I must also note that the settlement between the Ruias and Griesheim is dated 5th December 2002. Messer Holdings maintains that it was not given a copy of this document till 14th October 2005. As we shall see, that date is largely immaterial. 32. On 17th March 2003, Goyal Gases filed an Affidavit in Ruias' first suit No. 2499 of 1999 asking for a disclosure of the terms of this Agreement or a production of that document. This again is significant because 49% of Messer Holdings was controlled by Goyal Gases through his wholly owned subsidiary, Morgan Trade & Commerce Limited. 33. Messer Holdings accepts even before me today that Ruias throughout canvassed their case that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n what the Ruias and Griesheim was saying all along, viz., that the Ruias and Griesheim had retained their SPA and the 75,001 suit shares reverted to Ruias. The fact that in the Settlement Agreement Ruias gave up their case of violation of the SEBI Regulations is largely irrelevant. In any case, it furnishes Messer Holdings no cause of action distinct, separate or independent of that which arose earlier. 36. On 5th December 2005, Messer Holdings filed a Notice of Motion in its Appeal now saying that since there was a Settlement Agreement Ruias' suit was infructuous and was liable to be dismissed. The Ruias opposed this Notice of Motion. They also filed a Chamber Summons to amend their first suit No. 2499 of 1999 by adding a prayer for delivery of the 75,001 shares from Messer Holdings, Goyal Gases and Mr Suresh Goyal, the Chairman and Managing Director who was now joined as Defendant No. 5. The Ruias invoked the Settlement Agreement of 5th December 2002. The Chamber Summons was allowed on 8th June 2011. The Ruias filed a substantially similar Chamber Summon no. 712 of 2007 in their second suit No. 509 of 2001. 37. On 4th August 2008 Ruias entered into a Development Agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IAS would be in violation of Clause 6.1 of the AGREEMENT- II. Coming to SUIT-III, RUIAS want to wriggle out of the AGREEMENT-II and therefore, the various alternative prayers! in substance seeking to nullify the acquisition of 75001 shares by MGG under AGREEMENT-II. (Prayers (a) to (f) of suit-III (see para 17 supra)). They also rely upon the events subsequent to 23.06.1997 - transactions between GGL and MGG etc. and seek various prayers which are already noticed. (Prayer (b) to (k) of suit III (see para 17 supra)). Having filed SUIT-III, RUIAS once again amended the SUIT-II enlarging the scope of the suit. Whether such amendments are legally tenable or not is a question to be examined from the point of view of the principles governing the law on the question of joinder of causes of action etc. Apart from that the continuance of the SUIT-II and SUIT-III simultaneously raises too many questions regarding their maintainability. However, in our view, such questions need not be examined because RUIAS and MGG entered into an agreement dated 05.12.2002 the gist of which is noticed earlier at para 20 (supra). By the said agreement, RUIAS also agreed not to prosecute SUITS-II and III i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of their title in the SUITS-II and III filed by the RUIAS. In a bid to establish their title MHL filed SUIT-IV. (See prayer (q) in SUIT IV (extracted at para 26 supra)). The right of MHL, if any, will have to be decided in the said suit. Until the said suit is decided, we do not see any ground in law on which either GGL or MHL can object to the transfer of the shares in favour of RUIAS pursuant to the settlement dated 5.12.2002. 36. What exactly is the procedure which RUIAS are required to follow to effectuate the transfer of shares pursuant to the settlement dated 5.12.2002 is for RUIAS to explore. Because during the long pendency of the instant litigation there is a considerable change in the law regarding the procedure governing the transfer of shares in companies by virtue of amendments in the Companies Act 1956 and the advent of the Depositories Act 1996 etc. We make this observation because the 75001 shares acquired by MGG pursuant to AGREEMENT-II could not be registered in the name of MGG (See para 7 and 11(a) of the settlement dated 5.12.2002 extract at para 20 supra) because of the various interim orders passed by various Courts at different stages in SUITS-I, II and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any cause of action and an abuse of the judicial process. Therefore, these SLPs filed by MHL and GGL purportedly aggrieved by the impugned orders passed in the various applications filed in the two suits filed by RUIAS become infructuous. Therefore, the said SLPs arising therefrom are dismissed. 38. The consequent factual position would be: (i) the legal rights acquired (whatever they are) by MGG in 45001 shares of BOCL purchased from RUIAS pursuant to AGREEMENT-II should revert back to RUIAS unless it is found that the purported transfer of 45001 shares by MGG pursuant to the consent award dated 21.09.2000 in favour of MHL created any right or interest in favour of MHL. Such a claim of MHL can only be examined in SUIT-IV filed by MHL. (ii) Another 30000 shares were acquired by MGG from the public pursuant to AGREEMENT-II MGG purported to transfer them by virtue of the settlement dated 05.12.2002 in favour of RUIAS. If either GGL or MHL has any claim over those shares, such a claim must be made and established by them in accordance with law, but not in the suits filed by RUIAS. In order to establish such a claim, MHL already filed SUIT- IV to which both GGL and MGG are par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tations and suppression of facts. Each and every party is guilty of one or the other of the above- mentioned misconducts. It can be demonstrated (by a more elaborate explanation but we believe the facts narrated so far would be sufficient to indicate) but we do not wish to waste any more time in these matters." 42. The Supreme Court ended with this admonition: "44. This case should also serve as proof of the abuse of the discretionary Jurisdiction of this Court under Article 136 by the rich and powerful in the name of a 'fight for justice' at each and every interlocutory step of a suit. Enormous amount of judicial time of this Court and two high Courts was spent on this litigation. Most of it is avoidable and could have been well spent on more deserving causes. This Court in Ramrameshwari Devi & Others v Nirmala Devi & Others, (2011) 8 SCC 249 observed at para 54; "54. While imposing costs we have to take into consideration pragmatic realities and be realistic as to what the defendants or the respondents had to actually incur in contesting the litigation before different courts. We have to also broadly take into consideration the prevalent fee structure of the lawyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 13.5 crores. Additionally, Defendant No. 10 acquired 30,000 shares in the said Company from he open market for a consideration of Rs.9 crores and thus acquired a total of 75001 shares (suit shares) in the said Company. In order about August 2000 Defendant No. 10 further transferred the entire lot of suit shares (75001 shares) to the Plaintiff for a consideration of 10 million DM (equivalent to Euro.51,12,918.82) and delivered to the Plaintiff the original share certificates and duly executed documents of transfer in respect thereof. The Plaintiff was, however, unable to lodge the suit shares for transfer with the said Company on account of extensive disputes between the parties to this suit culminating in litigation and the passing of restraint orders which have been referred to more particularly hereinafter.[Because of such restraint orders passed in the suits instituted by the Defendant No. 2 to 9, the plaintiff company could not exercise the rights emanating from suit shares till 19th April 2016. By the Judgment dated 19th April 2016 the Hon'ble Supreme Court has dismissed the suit No. 2 499 of 1999 and suit No. 509 of 2001 instituted by Defendant No. 2 to 9 as being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been acquired by Defendant No. 10 but were not transferred to their name in view of Court Orders restraining such transfer. In a separate Notice of "Share Holding Pattern" as on 31/12/2002 posted on the said Website, it was also claimed by Defendant No. 1 that as of 31st December 2002, the 30,000 shares acquired by Defendant No. 10 from public shareholders could not be transferred in the name of Defendant No. 10 in view of various Court Orders but the same had been sold/ transferred to the promoters of the said Company (Defendant No. 1), and that the said shares continued to stand in the name of the Original shareholders. Likewise the Plaintiff learned from the U.S. Securities and Exchange Commission website that under an Agreement dated 5th December 2002, Defendant No. 10 had reverted/ transferred/ sold the suit shares to Defendant Nos. 2 to 9. A copy of the relevant extract from the U.S. Securities and Exchange Commission website is annexed and marked as Exhibit- "AA" hereto. The Plaintiff was shocked to learn of these developments which were stated to have taken place as far back as December 2002 but were altogether suppressed from the learned single judge who disposed of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28th September 2005, a copy of the Agreement dated 5th December 2002 was handed over to defendants No. 2 to 9 to the plaintiff and it was upon receipt of the said Agreement, the plaintiff came to know about the contents thereof, which gave rise to the filing of the present suit. Cause of action further arose when the plaintiff on or about April 2008 came to know about the purported development agreement in respect of the property at Mumbai and thus the suit is within limitation." 47. The parties went to trial on the preliminary issue on this basis. The Plaintiff's led evidence of one Mr KK Dhar. He filed an Affidavit of Evidence dated 10th October 2016. He is one of Messer Holdings' Directors. He then sets out what suit is for. He sets out some history of the litigation, broadly in accordance with what I have said about. In paragraphs 10 and 11 of his Affidavit of Evidence this is what he says: "10. I say and affirm that the original share certificates in respect of the suit shares were handed over by Defendant No. 10 vide its letter dated 20th May 2000 to the Plaintiff along with the requisite transfer documents and a Power of Attorney giving the Plaintiff the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He saw this because, according to him, he was at the office of Morgan Trade & Commerce Limited on the day when these shares were delivered. In answer to paragraph 12 he confirmed that he saw these on 20th May 2000. He was not however aware whether these shares were ever lodged with Bombay Oxygen. He did however say that he was present when Griesheim offered to settle its disputes with Goyal Gases without infringing Clause 6.1 of the SPA. This offer of Settlement, according to Mr Dhar, in answer to Question 20 was in late-1999 or early-2000. Present at this meeting, amongst others, were Mr Suresh Goyal of Goyal Gases and others. All these negotiations took place at the offices in New Delhi of Morgan Trade & Commerce Limited and which are apparently also the registered office of the Goyal Gases. The cross-examination continued on 19th January 2017 (it began the previous day on 18th January 2017). On that day he said that he used to represent one Beach Side Limited and that this limited company was a Director of Messer Holdings. He served on Messer Holdings' Board as a representative of Beach Side Limited but he himself was not party to any decision between Griesheim and Goyal Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action at all. It is only when this document surfaced, he submits, that Messer Holdings "apprehended" that the said Settlement Agreement between Defendant No. 10 and Defendants Nos. 2 to 9 if left outstanding would emerge as an insurmountable obstacle to the Plaintiffs' right over the suit shares "including its right to lodge the said certificate for registration notwithstanding that the physical share certificates and duly filled transfer forms continue to remain with the Plaintiff". This was information it obtained only on 14th October 2015. According to him, the Ruias' first suit No. 2499 of 1999 in this Court only sought enforcement of Clause 6.1 of the SPA and, in an interim proceedings, Notice of Motion No. 1804 of 1999, sought to restrain Griesheim and Goyal Gases from breaching this clause. He submits that the transfer of shares as between Griesheim and Messer Holdings was complete once the share certificates with their duly filled in transfer forms were handed over to the transferee. Vasudev Ramchandra Shelat v Pranlal Jayanand Thakar & Ors, AIR 1974 SC 1728; KN Narayanan & Anr v Income Tax Officer, C-Ward & Anr, (1984) 55 Comp Cas 182 (Ker). On that lodgement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R WHICH THERE IS NO PRESCRIBED PERIOD Description of suit Period of Limitation Time from which period begins to run 113. Any suit for which no period of limitation is provided elsewhere n this Schedule. Three years When the right to sue accrues." 56. He cites much authority in support of his proposition that Gouranga Sahu & Ors v Bhaga Sahu & Anr, AIR 1976 Ori 43 (para7); National Sports Club of India & Ors v Nandlal Dwarkadas Chhabria & Ors, 1997 (30) Bom.C.R. 565 (para 25); Gunwantbhai Mulchand Shah & Ors v Anton Elis Farel & Ors, AIR 2006 SC 1556 (para 13); and Union of India v West Coast Paper Mills Ltd & Anr, AIR 2004 SC 1596 (para 20). if seen like this, the cause of action arose only as recently as on 22nd January 2007 when the Ruias filed Chamber Summons No. 1579 of 2007 in their first suit No. 2499 of 1999 seeking delivery of the 75,001 shares from Messer Holdings and Goyal Gases. 57. He then submits that even otherwise the suit is within time if only because the declaration is what he describes as a "offshoot" of the Settlement Agreement dated 5th December 2002. Up to the time of disclosure of the Settlement Agreement dated 14th October 2005 all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od for execution of the decree or order: Provided that such application is made within one year from the date of the discovery of the fraud or the cessation of force, as the case may be." 59. He submits that the knowledge of the fraud must be knowledge of the date of the Settlement Agreement of 5th December 2002. This date is 14th October 2005 and hence the suit is within time. 60. I have understood these submissions to mean that despite knowledge of the two previous Suits by the Ruias, Messer Holdings was no obligation to bring the suit because the Ruias did not seek delivery of the shares in specie, and, second, because the first suit No. 2499 of 1999 was nothing but a bare denial of Messer Holdings' or its predecessor's rights. It furnished no cause of action. The only cause of action lies in the Settlement Agreement itself and it is only this document that impedes Messer Holdings' rights. He also says that though not a party to the Settlement Agreement, Messer Holdings is entitled in law to have it 'rescinded' and 'delivered up for cancellation'. 61. Mr Kapadia contests all these submissions and propositions. He urges me to look at the frame of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the shares. It appeared before the learned Single Judge and applied for a disclosure of the Settlement Agreement. This was in an Affidavit dated 17th March 2003 filed by one Mr Ajit Shukla on behalf of Messer Holdings in suit no. 2499 of 1999. This Affidavit is at pages 100-101 of the compilation. This shows that Messer Holdings knew of the Agreement between Griesheim and the Ruias as early as 2003 (not October 2005 or April 2005). They may not have known terms of that Agreement but they certainly knew of it. Dhar claiming ignorance of this Affidavit is of no avail to the Messer Holdings. 65. At the time when Messer Holdings applied in the Ruias second suit No. 509 of 2001 for relief in respect of the shares, the response by the Ruias on Affidavit was to say that Messer Holdings had to file its own suit if it claim any rights to the shares. 66. I believe Mr Kapadia is right when he says that the test for the date of knowledge has to be the knowledge of the infringement or the overt threat to the right or the title. 67. In the evidence and in the pleadings, Messer Holdings contends that it did not know of the SEC filings or of the BSE filings till 2005. This is demon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three years from the date when the right to sue first accrues. The difference between Article 58 and Article 113 is that the former speaks of time running from the date when the right to sue first accrues, i.e., from no later date. Mr Kapadia is also correct in saying that limitation ceases running only in two situations: on the filing of a suit, or on the grant of an anti-suit injunction. Equitable considerations are irrelevant. Siraj-ul-Haq Khan & Ors v The Sunni Central Board of Wakf UP & Ors, AIR 1959 SC 198. The Ruias' suits did not operate to bar a substantive suit for declaration of title (such as the present one) even without a disclosure of the settlement agreement. Somshikharswami Shidlingswami v Shivappa Mallappa Hosmani & Ors, Air 1924 Bom 39 An assertion by the Ruias that they were entitled to the 45,001 shares and protection in respect of all 75,001 shares, and this with notice to Messer Holdings was surely sufficient to start time running. JV Gokal Charity Trust v Contrex Pvt Ltd, 2016 SCC Online Bom 8004 70. I find Mr Kapadia's reliance on the decision of Wadsworth J in Vellayya Konar & Anr v Ramaswami Konar & Anr AIR 1939 Mad 844 to be particularly apposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only ask for a declaration that so far as he is concerned, it is not binding. 71. This is precisely the case here. Messer Holdings is a stranger to the Settlement Agreement. It is of no consequence to Messer Holdings whether that document is cancelled or not; it must get a declaration that it is not bound by that document (to which it is not a party). The case cannot, therefore, fall under Article 59 at all. The decision by Wadsworth J is not only one with which I am in most respectful agreement, but it has also been followed since. Ponnnammal & Ors v Kanthammal & Ors, AIR 1952 Mad 552, 553: "it is logically impossible for a person who is not a party to a document or to a decree to ask for its cancellation."; Sukh Lal & Ors v Devi Lal & Ors, AIR 1954 Raj 170 (Wanchoo CJ and Modi J) 72. Thus, Article 59, Mr Kapadia says, and again I think rightly, has no application at all to such a case. A stranger to an instrument or contract is unaffected by it. He may at best sue to say that it is not binding on him; but to have an instrument such as the Settlement Agreement declared void or voidable under Section 31 of the Specific Relief Act 1963 or to rescind the contract, the plaintiff mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aps even an abuse of process of the Court is not an answer; it cannot be. The Supreme Court clearly said Messer Holdings would have to establish its case in its own suit and all defences were left open. What matters is not the tenability or the chance of success of an overt challenge, but the date when that overt challenge is made. When it comes to limitation we do not look to the quality of the challenge. We look to see when that challenge was mounted. 74. It is not Article 113 or Article 59 that will apply to a suit like this. It is only Article 58. This suit should have been filed within three years of the earlier of the two dates -- 24th August 2000 or 5th February 2001. I will take the date of 24th August 2000 to be somewhat approximate. That was the date when Ruias filed a Chamber Summons seeking impleadment of Messer Holdings. Possibly the date of service on Messer Holdings was slightly later. 75. I find the submissions from Mr Sreegesh based on Mt Bolo V Koklan & Ors, AIR 1930 PC 270 Mt Rukhamabai v Lal Laxmi Narayan AIR 1960 SC 335 and Mohammad Yunus v Syed Unissa & Ors AIR 1961 SC 808 all to be against Messer Holdings. Mt Bolo, for instance, clearly says that the right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rayer clauses (x) and (y) are entirely dependent on a declaration of Messer Holdings being the owner and having beneficial interest in the suit shares in the first place. If not, it is an outsider to Bombay Oxygen. However, this is not a matter that I am required to consider in the present preliminary issue under Section 9A. All contentions must be left open in that regard, and they are. 79. The preliminary issue is disposed of in these terms. 80. Even after holding that the prayers (q) to (v) as time barred, the present suit have to be numbered as a Commercial suit. Registry is directed to have that done. All the requirements of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act 2015 will apply. Ordinarily, this would mean the application of the amended provisions of Sections 35 and 35A of the CPC (as amended by the Commercial Courts Act) and that, in turn, would mean that costs must follow the event. The proviso inserted by the amendment requires me to give reasons for not imposing costs. The only reason I can conceive, and it will have to do, for not imposing costs is the length of this litigation and, second, it seems to me that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
