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TMI Blog2017 (3) TMI 1893X X X X Extracts X X X X X X X X Extracts X X X X ..... these filings. In 2003 Messer Holdings filed Appeal No. 855 of 2003 and demanded disclosure of the Settlement Agreement. 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. Even after holding that the prayers 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. Application disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of 2008 and the suit itself is of that year. The controversy is about prayers (q) to (u) and these are the only ones I need to address: "(q) That this Hon'ble Court be pleased to declare that the Plaintiff is the beneficial owner of the suit shares being 75001 shares in the 1st Defendant company, more particularly described in the schedule annexed as Exhibit A hereto and is entitled to legal ownership thereof; (r) That the Defendant Nos. 1 to 10 be directed by a mandatory order and injunction of this Hon'ble Court to carry out all acts, deeds and things and extend all cooperation necessary to secure registration of the suit shares aggregating to 75001 shares in the 1st Defendant Company, more particularly described in Exhibit A hereto in the name of the Plaintiff; (s) That this Hon'ble Court be pleased to declare that the purported reversion/transfer of the suit shares being 75001 shares in the 1st Defendant Company, more particularly described in the schedule annexed as Exhibit A hereto by Defendant No. 10 to Defendants Nos. 2 to 9 under the purported Agreement dated 5th December 2002 is illegal, null and void and of no legal effect; (t) That this Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 2002. Messer Holdings says that this reversion is wholly illegal and unlawful. 7. The first prayer is for a declaration of Messer Holdings' beneficial ownership of these 75,001 shares of Bombay Oxygen. The next prayer asks for an order to permit registration of these shares. The next two prayers seek a declaration that the 5th December 2002 Settlement Agreement is null, void and that it be delivered up for cancellation. 8. Clearly, the suit is for a declaration of Messer Holdings' interest in title to these shares and consequential prayers of injunction etc. Thus, to be in time, at least for these reliefs, the suit would have to be brought within the prescribed period of limitation from the date when the right to sue first accrued or, at any rate, when the right to sue accrued to Messer Holdings, the Plaintiff. It says limitation must computed in respect of all four prayers from the date when it received a copy of the Settlement Agreement of 5th December 2002. Admittedly that date is 14th October 2005. The suit was filed on 23rd April 2008. 9. The Plaintiff led evidence on the preliminary issue. Some documents were marked and they led the oral evidence of one Mr KK Dh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether this knowledge gave rise to a cause of action or, in the words of the Limitation Act, a 'right to sue'. For this, a few dates and events are necessary. The record itself is by now sprawling and runs into several hundred if not several thousand pages. I will confine myself to these dates as are immediately necessary. C. LITIGATION HISTORY & BACKGROUND 13. On 12th May 1995 Griesheim, a company in the international Hoechst Group, entered into a Share Purchase and Cooperation Agreement ("SPCA") with Goyal Gases, then known as Goyal Gases Limited. Griesheim agreed to take up equity in Goyal Gases. It did so. The name of the company was changed to the present name, Goyal MG Gases Pvt Ltd. The Agreement provided that Goyal Gases would from that point on be a member of Griesheim Group. Griesheim first acquired 30% of Goyal Gases' equity. This was later increased to 49%. The Agreement provided for a gradual reduction as well, and the Agreement was to continue till Griesheim or its successors-in-law reduced their equity holdings in Goyal Gases to 25%. 14. Two years later, on 27th June 1997 Griesheim entered into a Share Purchase Agreement ("SPA") ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim order was continued. 18. Griesheim's nominees on the Board of Directors of Bombay Oxygen continued till 30th September 1999. Disputes arose between Griesheim and Ruias regarding the appointment of one or more of Griesheim's nominations to Bombay Oxygen's board. 19. On 20th January 2000, Messer Holdings was incorporated in the British Virgin Islands as Griesheim's wholly owned subsidiary. The avowed purpose of setting up Messer Holdings was to settle the parallel dispute between Griesheim and Goyal Gases without violating the right of first refusal clause 6.1 in Grieshem's SPA with the Ruias. The intention was to transfer the 75,001 shares to Messer Holdings since Clause 6.1 allowed a transfer to a company in the Hoechst Group. This would not have been, the parties were advised, in violation of the restraint order of the Supreme Court passed on 18th December 1998. At the time Griesheim held 51% of Messer Holdings' equity. The remaining 49% was controlled by Goyal Gases through one of its subsidiaries, Morgan Trade and Commerce Ltd. 20. On 24th January 2000, the Ruias filed Chamber Summons No. 80 of 2000 to amend their suit No. 2499 of 1999. They s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of service of the Chamber Summons, or at any rate from the date of the order, Messer Holdings knew or must be deemed to have known of the Ruias' claim to the 75,001 suit shares. 23. On 9th August 2000 Griesheim and Goyal Gases jointly applied to the Arbitral Tribunal for a consent Award. The application recorded that the process of transfer of the Bombay Oxygen shares to Messer Holdings was complete and that Griesheim had received full consideration. Griesheim agreed that until the shares were registered to Messer Holdings, Griesheim would hold them shares in trust. The Arbitral Tribunal passed a consent Award on 21st September 2000. The consent Award was in the terms mentioned earlier, but it also records that Griesheim would give necessary approvals and authority to Messer Holdings to implement the Award including taking steps to register the suit shares. Griesheim delegated these powers and rights in respect of these shares to Messer Holdings. 24. On 6th October 2000, Griesheim filed Notice of Motion No. 2933 of 2000 in the Ruias' suit No. 2499 of 1999. It sought leave to implement and enforce the consent Arbitral Award. At about the same time, on 10th November 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on restraining the defendant No. 1, 3 and 4 from: (i) acting in pursuance of the Share Purchase Agreement dated 23rd June 1997; (ii) exercising any rights in respect of the said 75,001 shares (in particular voting rights in connection therewith) and/or from receiving any dividends, rights in respect of the same; (iii) exercising any rights including its beneficial ownership in, to, upon or in respect of the said 75,001 shares; (i) that the Defendants be restrained by permanent order and injunction of this Hon'ble Court from transferring and/or registering and/or taking any steps to transfer and/or register the said 75,001 shares in the name of any person or persons firm or body corporate including 1st and/or 3rd and/or 4th Defendants, without the consent of the Plaintiffs; (j) that the 1st Defendant be ordered and decreed to deliver/return to the respective plaintiffs the said 45,001 shares together with all accretions thereto from 23rd June 1997 on such terms as this Hon'ble Court directs; (k) for the purpose aforesaid the 1st Defendant be ordered and decreed to do and perform all acts, deeds, matters and things and to execute all documents, deeds and writings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue duplicate shares in the name of the Plaintiffs (iv) for a permanent order and injunction restraining the Defendants from transferring and/or registering and/or taking any steps to transfer and/or register the said 75,001 shares in the name of any person or person, firm or body corporate including the 1st and/or 3rd and/or 4th defendants without the consent of the plaintiffs; (v) for a permanent order and injunction restraining defendant nos 1, 3 and/or 4 and 5 from exercising any rights, including as beneficial owner in, to, upon or in respect of the said 75,001 shares. a(1)(i) In the alternative and in the event of prayer (b) not being granted that it be declared that the negative covenant in Clause 6.1 of the agreement dated 23rd June 1977 being Ex. 'B' hereto is binding on the Defendants: (a)(1)(ii)(b) that the Defendants by themselves their agents and servants be restrained by a perpetual order and injunction of this Hon'ble Court from (i) committing breach of clause 6.1 of the Agreement dated 23rd June 1977 being Exh. 'B' hereto; (ii) transferring or selling or alienating the legal and/or beneficial interest in the shares of Defendant No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Holdings itself filed Chamber Summons No. 455 of 2002 seeking its impleadment in the Ruias' first suit No. 2499 of 1999. Till this time the Ruias' application for impleading Messer Holdings had not been allowed. Messer Holdings did not diligently prosecute this Chamber Summons. It was dismissed for non-prosecution on 6th June 2006. That matters little; what matters is that it knew of a clear threat to its title and therefore sought impleadment. 30. On 13th March 2003, a raft of interim applications were on board and were called out. There were Notices of Motion by Goyal Gases, Grieshem, Ruias and Messer Holdings. Counsel for the Ruias said that as between the Ruias and Griesheim the disputes had been settled. This is the third critical date. Messer Holdings today contends that the terms of the settlement were undisclosed and remain undisclosed for several years thereafter and that neither Ruias nor Griesheim produced the Settlement Agreement. It seems to me, however, that the statement made to Court was sufficient to constitute a direct threat to the right claimed by Messer Holdings. This could no longer be termed a mere claim or an ambiguous threat. Ruias and Griesheim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s its own Notice of Motion No. 2933 of 2000 filed in Ruias' first suit No. 2499 of 1999 seeking leave to enforce the ICC arbitral consent Award of 21st September 2000 between Goyal Gases and itself. It was that Award which held that the suit 75,001 shares were vested in Messer Holdings and that it was Messer Holdings that was the beneficial owner of these suit shares. Messer Holdings was a party by then to both Suits filed by Ruias. It could not have been unaware of this order. There is a compilation placed before me. A copy of this order is included in that compilation from pages 102 onwards (SA Bobade J, as he then was). Griesheim, Goyal Gases were both before the Court. There appears to have been a typographical error which was corrected on 2nd May 2003. It is not in doubt that Messer Holdings filed Appeal No. 855 of 2003 against the order of 26th March 2003. 34. There is, at about this time, a piece of evidence and that is an entry on the US Securities Exchange Commission ("SEC") website about the Ruias reverting, transfer or purchase these very 75,001 shares of Bombay Oxygen. This is the subject matter of the cross- examination on the preliminary issue and I wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s quo. In view of that the suit was adjourned sine die on 13th July 2014. 40. On 19th April 2016 the Supreme Court delivered a detailed judgment saying that the Ruias' two Suits were infructuous. The Special Leave Petitions were, therefore, dismissed. Some observations of the Supreme Court are important. These are set out below, noting that the Supreme Court decision referred to three Suits: "SUIT-I" is a reference to Goyal Gases' separate Civil suit filed in the Delhi High Court; "SUIT-II" is a reference to the Ruias' suit No. 2499 of 2999; and "SUIT-III" is a reference to the Ruias' second suit No. 509 of 2001. The judgment sets out the relevant prayers in the Ruias' second suit, the amendments to the first suit and the relevant portions of Settlement Agreement of 5th October 2012. There is also a reference to "SUIT-IV", namely, the present suit No. 2410 of 2008 (paragraph 26). By this time, Goyal Gases had withdrawn its suit in the Delhi High Court. That left "SUIT-II" (suit No. 2499 of 1999), "SUIT-III" (suit No. 509 of 2001), and "SUIT-IV" (i.e., the present suit). Paragraphs 32 to 40 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han Ruia & Ors v Messer Griesheim GmbH & Ors. (ii) Civil suit No. 509 of 2001 titled Shyam Madan Mohan Ruia & Ors v Messer Griesheim GmbH & Ors." As a matter of fact, during the course of hearing of these SLPSs also, both RUIAS and MGG supported the case of each other in opposing these SLPs filed by MHL and GGL. 33. As a consequence of the settlement dated 5.12.2002, RUIAS claim title in 75001 shares of BOCL through MGG. We have already noticed, the said 75001 shares were initially acquired by MGG from RUIAS and the public under AGREEEMNT-II. But, so far the names of RUIAS are not entered in the registers of BOCL, as the holders of the share because of the various interim orders mentioned earlier. 34. However, GGL and MHL dispute the title of MGG to the said 75001 shares. According to GGL and MHL, by the settlement dated 5.12.2002 MGG had itself lost its title over the said shares as it had already transferred its title in the said shares in favour of MHL pursuant to the consent award dated 21.9.2000. 35. The existence of title in MGG in the said 75001 shares cannot be disputed by either GGL or MHL, at least, till the date of the consent award, i.e., 21.9.2000 becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the other defendants (GGL & MHL etc.) and the prayers regarding the physical custody of the shares. (There is no whisper in the plaints of either suit II or III, of MGG having had obtained the custody of the share certificates either from RUIAS (of 45001 shares) or from the public (of 30000 shares).) As already noticed from the settlement dated 5.12.2002, MGG and RUIAS are uncertain about the whereabouts and custody of 75001 shares! Of BOCL which were initially acquired by MGG. (See paras 6 and 7 of the settlement dated 5.12.2002 extracted at page 20 supra). RUIAS having entered into settlement dated 5.12.2002 knowing fully well that MGG was not going to give custody of the above-mentioned 75001 shares, purported to purchase the said shares and agreed not to prosecute the SUITS-II and III against MGG. In such a case, continuing the suits either against GGL or MHL or its agents etc. only for the custody of the shares, in our opinion, is without any cause of action on the part of the RUIAS. The prayers in SUIT-II and III in this regard are: "(ii) that the defendant Nos. 1, 3, 4 and 5 be ordered and decreed to deliver/return to the respective plaintiffs 75,001 shars togeth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the BOCL as holders of the said shares is a matter for RUIAS to explore. (There is no prayer in the Suits II and III seeking the declaration of title of RUIAS based on the settlement dated 05.12.2002 - for that matter, there is no whisper about the said settlement!). However, such an entitlement if any should be subject to the result of the SUIT-IV. 40. We make it clear that we are not deciding by this order, the existence or otherwise of any right or its enforceability in the 75001 shares of BOCL in favour of either MHL or GGL. It is open to the to establish their right in SUIT-IV. The defendants in the SUIT-IV are at liberty to raise every defence available in law and fact to them." (Emphasis added) 41. The Supreme Court then opined that an examination of the various questions raised in the Special Leave Petitions was unnecessary. In paragraph 43 it said thus: "43. The net effect of all the litigation is this. For the last 18 years, the litigation is going on. Considerable judicial time of this country is spent on this litigation. The conduct of none of the parties to this litigation is wholesome. The instant SLPs arise out of various interlocutory proceedings. Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the three parties i.e. GGL, MGG and RUIAS. The said amount is to be paid to National Legal Services Authority as compensation for the loss of judicial time of this country and the same may be utilized by the National legal Services Authority to fund poor litigants to pursue their claims before this Court in deserving cases." D. PLEADINGS AND EVIDENCE 43. The point before me is not the merits or demerits of any of either of these Suits filed by the Ruias. It is not even a question on merits or demerits of the present suit. The only question I am called on to answer is whether the reliefs "q" to "u" in the present suit are within time. This will turn necessarily on an assessment of the relevant portions of the Limitation Act and as assessment of the correct starting point of limitation. 44. Before I proceed to this, however, there are two portions of the present plaint to which reference must be made. The first is paragraph 5. The amendments in paragraph 5 are shown in square brackets and italicized in the following extract. "5. The present suit has been necessitated, inter alia, on account of a purported reversion or transfer of the suit shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff and without informing this Hon'ble Court whose jurisdiction was invoked by Defendant Nos. 2 to 9 in two suits pending before this Hon'ble Court (more particularly mentioned hereinafter) is illegal, unlawful, fraudulent and amounts to a nullity. The Plaintiff submits that the Plaintiff is the beneficial owner in respect of the suit shares, the transfer as between transferor and transferee, i.e., Defendant No. 10 and the Plaintiff admittedly being complete. The Plaintiff has paid a consideration of 10 million DM (equivalent of Euro 51,12,918.82 [which is equivalent to INR 22.5 Crores consideration was paid on 8th August 2000] for the purchase of the suit share and is in possession of the original share certificates along with duly executed transfer deed in respect thereof. The Plaintiff submits that the Plaintiff is entitled to exercise all rights of beneficial ownership in respect of the suit shares and has the right to acquire legal title thereto. However, Defendant Nos. 2 to 9 and 10 are unlawfully and wrongfully depriving the Plaintiff of the said rights, inter alia, by claiming a purported reversion or transfer of the suit shares by Defendant No. 10 to Defendant Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assets of the said Company, namely the liquid gas manufacturing entity and the gaseous oxygen, nitrogen and acetylene manufacturing and/or marketing entities would be hived off to two newly incorporated companies by the name of Bombay Oxygen Gases Ltd and Bombay Oxygen Acetylene Ltd. It was clear to the Plaintiff that the object of hiving off these assets of the Defendant No. 10 company was to reduce the Company to a shell and substantially deplete/render worthless the suit shares which the Plaintiff is rightfully entitled to. A copy of the relevant extract from the website of the Bombay Stock Exchange is annexed hereto as EXHIBIT "BB' & "CC"." 46. The only pleading as to limitation is in paragraphs 14 and 14A of the suit. The whole of paragraph 14A was added by amendment. The amended portions in paragraph 14 are shown in square brackets and italicized. "14. No part of the suit is barred by the law of limitation. The contents of purported reversion of the suit shares in favour of Defendant Nos. 2 to 9 on 5th December 2002 on the premise that the earlier transfer in favour of the plaintiff is void and unenforceable was discovered by the Plaintiff on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d DM 10 million, equivalent to Euro 51,12,918.82 approximately to Defendant No. 10 as consideration for purchase of the suit shares. A copy of the letter dated 8th August 2000 by the Defendant No. 10 to the Plaintiff confirming receipt of DM 1,00,00,000/-, equivalent to Euro 51,12,918.82 from the Plaintiff as consideration for 75,001 shares of Bombay Oxygen Corporation Ltd. At Serial No. 13 along with the compilation of documents the letter dated 8th August 2000 is produced. The same be taken on record and marked as Exhibit. The plaintiff company secured valid and absolute title over the said 75001 shares of defendant No. 1 company and consequently plaintiff became the beneficial and legal owner of such shares. After conveying the suit shares to the plaintiff Company defendant No. 11 had no title, right or interest over the suit shares." 48. He then goes on to narrate the history of this litigation. In paragraph 20, he says only this: "20. I say that Plaintiff Company came across a declaration made by Griesham on the website of U.S. Security Exchange Commission that during the year 2000 Griesham reverted transferred the said 75001 shares to Ruias." 49. I note tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sser Holdings by one Mr HS Rao and one Mr Madhukar. Mr Dhar himself approved the draft plaint and its amendments. Most importantly in answer to Question 57 he said that he himself did not see the declaration on the SEC website; Madhukar did, and told him about it. The Plaintiff never led the evidence of Madhukar. Indeed Mr Dhar says that he is not familiar with the SEC website (Question 58). He has also not personally seen the Bombay Stock Exchange website referred to in paragraph 7(xxxiv) of the plaint. Mr Dhar also spoke of a corporate announcement that Messer Holdings made on 26th April 2005. He could not however mention the date of the corporate announcement, nor the date of the SEC declaration. He had also no knowledge whether these websites of SEC and Bombay Stock Exchange were seen by anybody at the Plaintiff before 2005. He himself did not ask any person to check this. He said he was only informed by Madhukar about these websites (Question 66). He was also shown an Affidavit dated 17th March 2003 made by one Mr Ajit Shukla. He could not recollect it. He also had no recollection of an Affidavit made on 11th April 2002 by Mr Rao. I will come to both of these momentarily. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares. In his fashioning of the case, the Ruias' submission that the initial transfer of Bombay Oxygen's shares to Griesheim was vitiated by misrepresentation was wholly irrelevant as was the Ruias' contention that this transfer violated applicable SEBI Regulations. In any case, it was not until 26th April 2005 that Messer Holdings learnt from the US SEC and the Indian BSE Websites of Griesheim having assigned its rights in these shares to Ruia family members. None of this, says Mr Sreegesh, is of consequence. It does not even matter that Dhar has not been able to prove the statements about the SEC website and BSE website filing or noting, or that this is clearly excluded by the rule against hearsay -- Dhar cannot possibly depose to the correctness of what he was told but only, at best, to what he was told. He admits, as we have seen, that he himself never once saw either of these websites and never verified their contents. He was only told of these contents by Madhukar. None of this, says Mr Sreegesh, is of the slightest importance. It is only once the Settlement Agreement was disclosed that Messer Holdings realized that if left unchecked, that Messer Holdings would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply: "17. Effect of fraud or mistake.-- (1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act,-- (a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or (b) the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or (c) the suit or application is for relief from the consequences of a mistake; or (d) where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him, the period of limitation shall not begin to run until plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have discovered it; or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production: Provided that nothing in this section shall enable any suit to be instituted or application to be made to recover or enforce any charge against, or set aside any transaction affecting, any property which-- (i) in the case of fraud, has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itlement to the shares. Without that declaration none of the other prayers can possibly follow. 62. Mr Kapadia says that the right to sue first arose when Messer Holdings' alleged beneficial right was challenged. This happened in two ways. First, by an independent assertion with no reference to Messer Holdings at the time when Ruias filed their first suit No. 2499 of 1999 on 20th April 1999. The second challenge arose when Messer Holdings was named, and this happened twice. The first was in August 2000 when the Ruias sought to implead Messer Holdings as Defendants to their first suit No. 2499 of 1999. The second when the Ruias filed their second suit No. 509 of 2001 on 5th February 2001 to which Messer Holdings was a party. This sought to rescind the SPA of 23rd January 1997 between Griesheim and the Ruias; and Griesheim was the source of Messer Holdings' title to the suit shares. Messer Holdings claims to have acquired beneficial rights in the shares when it received the share scrips and duly filled transfer forms. This was on 20th May 2000. According to Messer Holdings it is from this date that it had rights in these shares. Ruias' impleadment of Messer Holdings both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een Griesheim and members of Ruia family. The Stock Exchange filing is of the September 2002 quarter. The filing is set out at pages 269-271 of the present suit. The relevant portion is set out at pages 269-270. The entry at page 270 shows that the 30,000 shares acquired by Griesheim from public stand in the name of the original shareholders. 68. The evidence of Dhar on this is entirely unconvincing. He claims to have known nothing of this till he was told about these filings by Madhukar, whose evidence was not led. We do not know why. This is surely no basis on which to proceed on a mixed question of fact and law. The plaint says that the 2002 filings were ones that Messer Holdings saw on 26th April 2005. There is nothing at all to support this. There is nothing to explain why from 2002 to 2005 with all these litigations at various stages Messer Holdings did not check these filings. In 2003 Messer Holdings filed Appeal No. 855 of 2003 and demanded disclosure of the Settlement Agreement. Therefore it knew of the Settlement Agreement on that day, and it knew that the settlement was between Griesheim and the Ruias. That settlement could pertain to one thing only -- the 75001 suit sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiff and the same case under another reference as supporting the contesting defendants and both the learned Judges seem not to have grasped the difference between a suit for the cancellation of an instrument and a suit for a declaration that the instrument is not binding upon the plaintiff. Leaving aside for the moment the complication due to the fact that the plaintiff in this suit sues in a representative capacity, the distinction between the two classes of suits seems to me to be well established by the decisions. When the plaintiff seeks to establish a title in himself and cannot establish that title without removing an insuperable obstruction such as a decree to which he has been a party or a deed to which he has been a party, then quite clearly he must get that decree or deed cancelled or declared void in toto and his suit is in substance a suit for the cancellation of the decree or deed even though it be framed as a suit for a declaration. But when he is seeking to establish a title and finds himself threatened by a decree or a transaction between third parties, he is not in a position to get that decree or that deed cancelled in toto. That is a thing which can only be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The question that is before me today did not arise there. The Supreme Court said in terms that Article 59 applies in a case to set aside a contract, instrument or decree between parties inter se. In the present case, Messer Holdings' claim is not dependent on setting aside a written contract. Let us suppose for a moment, there was no written settlement contract at all, and that Griesheim and the Ruias had an undocumented oral understanding of indeterminate date. Messer Holdings would still have had to bring suit to eliminate the Ruias' claim as brought in their two suits; for those two suits presented the clearest and most unequivocal threat to Messer Holdings' claim to those very shares. The declaration, therefore, sought by Messer Holdings has nothing at all to do with the Settlement Agreement but only to do with the Ruias' direct claim to the 75,001 shares and their open threat of Messer Holdings' rival claim. For these reasons, Mr Bai Asmalbai w/o Vora Mahamad Alli v Esmailji Abdulali & Ors, AIR 1964 Guj 174; Muppudathi Pillai v Krishnaswami Pillai & Ors, AIR 1976 Mad 1. Neither dealt with a case like this one and, in any case, Muppudathi could not have h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gement of Messer Holdings' right to the shares. That is nothing but a test of 'clear and present danger', and it was made in 2000 and 2001, not only or for the first time when the Settlement Agreement was disclosed. This is not a case of mere denial of a right. For instance, if a party was to merely say that he owns a certain property, the true owner is perhaps not required to bring suit. But where a challenger files a suit against the alleged true owner and threatens his title, or otherwise acts affirmatively on his claim and mounts a clear and unequivocal threat to the other's title to that property, the true owner must of necessity bring suit. This is not a mere denial or an assertion. It is an overt threat because the challenger in such a case is seeking rights in respect of the very property in question. Mst Rukhmabai related to relinquishment deeds, trusts and whether the suit property was of a joint family or built by acquisitions of the creator of a trust. In any case, the Supreme Court there reiterated what the Privy Council said in Mt Bolo. This is, therefore, also against Messer Holdings. Mohammed Yunus reaffirms this position. 76. None of the other auth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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