.* HIGH COURT OF DELHI : NEW DELHI
I.A. No. 12421/2007 in CS(OS) No.1768/2007
Reserved on: 25th August, 2009
% Decided on: 31st August, 2009
MRS. BHAVNA A. PATEL & ANR. ...... Plaintiffs
Through : Ms. Pratibha M. Singh with
Mr. Sudeep Chatterjee, Advs.
Versus
MR. KRISHNAMURTHY VENKATRAMAN
VAIDYANATHAN ....Defendants
Through : Mr. Sudhir Chandra Aggarwal, Sr.
Adv. with Ms. Ishani Chandra, Adv.
Coram:
HON'BLE MR. JUSTICE MANMOHAN SINGH
1. Whether the Reporters of local papers may No
be allowed to see the judgment?
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported
in the Digest? Yes
MANMOHAN SINGH, J.
1. The plaintiffs filed the present suit for permanent injunction, damages etc. against the defendants which is pending before this court.
2. The plaintiff No.1 is a Director of plaintiff No.2 company which manufactures clocks and deals with health care products and is one of the leading FMCG companies in India under the brand name AJANTA.
3. Defendant No.2, Colgate-Palmolive (India) Limited, is a public limited company incorporated under the Indian Companies Act, CS (OS) No.1768/2007 Page 1 of 5 1913. Defendant No.4, Colgate Palmolive Company is a company incorporated according to the laws of the State of Delaware, U.S.A. Defendant No.1 is the Vice President Legal, Company Secretary and whole-time Director of the defendant No.2 in India and defendant No.3 is the Director of the defendant No.4 in U.S.A. It is alleged that the defendants started imitating the plaintiffs website and is causing impediments and hindrances in the smooth conduct of the plaintiffs business.
4. During the pendency of the suit, the defendants filed the present application praying that defendants No.1 and 3 be deleted from array of parties. It is submitted that defendants No.1 and 3 are independent professionals on the Board of Defendants No.2 and 4 respectively and they discharge their duties in accordance with the constitution of the companies. Thus, no one officer alone or independently makes decisions for the entire company. Defendants No.1 and 3 are not personally involved in instituting any proceeding against the plaintiffs or against any third party. The said defendants are just employees of their respective companies. Thus, the plaintiffs cannot sustain a suit of this nature independently against the officers of the defendant companies and the plaint fails to establish the act or acts of the said officers which justify institution of a suit against them.
5. Per contra, it is contended by the plaintiffs that defendants No.1 and 3 are responsible for the day-to-day working and Corporate Governance of the defendants No.2 & 4 respectively and thus are important decision makers. The issues raised in the present case, come CS (OS) No.1768/2007 Page 2 of 5 completely under the everyday control and management of the arrayed defendants. The defendant No.1 is the Constituted Attorney of the Colgate and is well aware of all the judicial orders. He specifically has knowledge of the various acts complained of by the plaintiffs in the present case and is therefore, a necessary party. It is further contended that when the defendants themselves have made the plaintiffs' director as the defendant No.1 in three of the suits filed by them, they now cannot claim that the defendants No.1 and 3 discharge their duties in accordance with the constitution of the companies and are thus not necessary party to the present suit.
6. It is submitted that the defendant No.1 is the Company Secretary and the whole-time director of the defendant No.2 and the defendant No.3 is the Chairman of Nominating and Corporate Governance Committee of the defendant No.4. These two defendants are solely responsible for the functioning and Corporate Governance of the defendants No.2 & 4 and are thus necessary and proper party to the present suit.
7. It is settled law that a necessary party is one without whom no order can be made effectively. The only reason which makes it necessary to make a person a party to an action is that he should be bound by the result of the action and the question to be settled.
8. In the case of Hindustan Lever Limited vs. Lalit Wadhwa & Anr.; 2007 (35) PTC 377 (Del) it was observed by this Court in para 33 as under :
"33......The company is a juristic person and CS (OS) No.1768/2007 Page 3 of 5 wherein the infringement of the patent has been alleged against the company, its officers would not normally become personally liable in a civil action. A reading of the plaint shows that no clear or specific averment has been made against the defendant No.1 about his role in the alleged infringement of plaintiff's patent. In my view, defendant No.1 is neither necessary nor a proper party to the suit and consequently he is liable to be deleted from the array of defendants."
9. During the hearing of this application, the learned counsel for the plaintiff states that she has no objection if name of defendant No.3 is removed from the array of the parties.
10. In the instant case, as the company against whom the plaintiffs makes a claim in the suit is already a party to the suit, whatever action has been taken by the defendant no.1 on behalf of defendant No.2 company is taken as its employee/officer and not in his personal capacity. Defendant No.1 will not be personally liable against the alleged infringement by the plaintiffs. Moreover, no specific averment has been made by the plaintiffs in the plaint against defendant Nos.1 and 3 respectively. I agree with the submission of the learned senior counsel for the defendant that defendants No.1 and 3 are independent professionals on the Board of Defendants Nos.2 and 4 respectively and they discharge their duties in accordance with the constitution of the companies.
11. In the result, the application of the defendants is hereby allowed. Defendant Nos. 1 and 3 be deleted from the array of the parties. Amended memo of parties be filed within 2 weeks. CS (OS) No.1768/2007 Page 4 of 5
The application is disposed of.
MANMOHAN SINGH, J AUGUST 31, 2009 SD CS (OS) No.1768/2007 Page 5 of 5