Vidarbha Ceramics Pvt. Ltd. ... vs Anupama Daga D/O Vivek Daga And ...
2021 Latest Caselaw 8323 Bom

                                                  38- CRA 14.2021 Judgment.odt




          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                   NAGPUR BENCH AT NAGPUR

            CIVIL REVISION APPLICATION NO. 14 OF 2021

1) Vidarbha Ceramics Private
  Limited, a company registered
  under the Companies Act, 1956
  having its registered office at 5,
  Temple Road, Civil Lines,
  Nagpur - 440010
                                           .. Applicants
2) Adarsh Shriratan Daga,
  aged about 52 years,
  occ. Business, resident of 5,
  Temple Road, Civil Lines,
  Nagpur - 440010

                 Versus

1) Anupama Daga d/o Vivek
  Daga, aged about 23 years,
  occ. Student, resident of 1831,
  3rd Floor, ATS Green Village,
  T-18, Sector 93-A,
  Expressway, NOIDA

2) Maharashtra Industrial
                                          .. Respondents
  Development Corporation,
  Head Office : "Udyog Sarathi",
  Marol Industrial Area,
  Mahakali Caves Road,
  Andheri(East),Mumbai-400093
  Regional office, DIC Bldg.,
  5th Floor, Civil Lines,
  Nagpur - 440001, through its
  Regional Officer.



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                                                                 38- CRA 14.2021 Judgment.odt




Mr. Masood Shareef, Advocate for applicants.
Mr.S.V.Bhutada with Mr.Yash Maheshwari and Mrs.R.S.Sirpurkar,
Advocates for respondent No.1.
Mr. A. D. Sonak, Advocate for respondent No.2.

                                     CORAM :     MANISH PITALE, J.

DATED : 23rd June, 2021

ORAL JUDGMENT

Hearing was conducted through Video Conferencing

and the learned counsel agreed that the audio and visual quality was

proper.

(2) The Civil Revision Application is heard finally with

the consent of learned counsel for the rival parties.

(3) By this revision application, the applicants (original

defendants No.2 and 3) have challenged order dated 20/03/2021,

passed by the Court of Joint Civil Judge, Junior Division, Nagpur,

whereby, an application (Exh.10) for rejection of plaint filed under

Order VII Rule 11 of the Code of Civil Procedure (CPC) has been

rejected.

(4) The applicants have approached this Court with the

basic contention that in the present case, the respondent No.1 (original

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plaintiff) has indulged in clever drafting and creating of an illusion of

cause of action, in order to claim that the suit for injunction filed by

her is maintainable before the Court below.

(5) According to the applicants, the reliefs claimed by

the respondent No.1 are to be agitated before the National Company

Law Tribunal (NCLT) under the provisions of the Companies Act, 2013

and that in fact, such a petition filed prior in point of time to the

aforesaid suit before the NCLT is pending consideration. It is

contended in the application for rejection of plaint that the effect of

Section 430 of the Companies Act, is that the suit filed by the

respondent No.1 is barred by law and that therefore, the plaint ought

to be rejected.

(6) The Court below in the impugned order has taken

note of the fact that the aforesaid petition filed before the NCLT on

behalf of the respondent No.1 is indeed pending and yet the

application filed by the applicants herein has been rejected on the

ground that the parties in the two proceedings i.e. the suit filed before

the Court below and the petition pending before the NCLT are

different in nature and the prayers are also different.

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                                                             38- CRA 14.2021 Judgment.odt




(7)                      Mr. Masood Shareef, learned counsel appearing for

the applicants submits that the Court below committed a grave error in

passing the impugned order and that the observations made therein

are not borne out by the material on record and the admitted facts that

emerge from the record.

(8) The learned counsel for the applicants invited

attention of this Court to the contents of the company petition dated

02/01/2021, filed on behalf of the respondent no.1 herein. It was

submitted that the grievance of the respondent No.1 pertains to

alleged mismanagement of a trust fund created for the benefit of the

respondent No.1 in the backdrop of a matrimonial dispute between her

parents. The trust fund was allegedly created, so that the maintenance

of respondent No.1 could be taken care of and that the estranged

parents of respondent No.1 would be the trustees.

(9) According to the respondent No.1, the defendant

No.3, who happens to be her uncle, is responsible for surreptitious and

clandestine transactions, the result of which is misuse and

misappropriation of the trust fund, which is prejudicial to the interest

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of respondent No.1. There are allegations made that all the companies

owned by the family are being mismanaged and that the defendant

No.3 (i.e. petitioner No.2 herein) has been illegally transferring shares

to the detriment of the respondent No.1. In fact a specific allegation is

made that 4800 shares of the respondent No.1 have been illegally

transferred, allegedly at the behest of the original defendant No.3.

(10) On the basis of such pleadings in the company

petition, the respondent No.1 has sought the following reliefs.

"RELIEF SOUGHT

In view of the facts mentioned above the petitioner prays for the following reliefs :

(a) pass an appropriate order, relief, directions under Section 241 and 242 of the Companies Act, 2013 to bring an end to the aforesaid acts of oppression and mismanagement perpetrated by the respondents and for necessary orders and reliefs in respect thereto, including as prayed :

(b) pass an appropriate order declaring the transfer of shares of the petitioner in favour of respondent no.3 - Vandana Daga and Adarsh Daga HUF (represented by respondent no.2 - Adarsh Daga) as null and void.

(c) pass an appropriate order declaring respondents no.2 and 3 as unfit to continue as directors of the respondent no.1

- Company.

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                                                            38- CRA 14.2021 Judgment.odt




       (d)    pass an appropriate order restraining the respondent

nos.2, 3 and/or 4 or any person acting through them to transfer sale or create any kind of interest in the property of the respondent no.1 Company at Plot no.F-13, MIDC Industrial Area, Hingna, Nagpur.

(e) pass an order under Section 59 of the Companies Act directing the respondent no.5 to rectify the register of the respondent no.1 Company by including petitioner's name against the 4800 shares owned by her.

(f) Award cost for the petition.

(g) Pass such other order or grant such other relief as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case."

(11) The respondent No.1 has also sought interim

prayers in the said company petition which read as follows :-

" INTERIM PRAYERS

(a) Pass an ex-parte interim order, to be confirmed after notice, restraining the respondent nos.2, 3 and/or 4 any person acting through them to transfer sale or create any kind of interest in the property of the respondent no.1 Company at Plot no.F-13, MIDC Area, Hingna, Nagpur ;

(b) Pass an ex-parte interim order, to be confirmed after notice, restraining the Respondent No.2 and Respondent No.3 from alienating, charging, mortgaging and selling any of their shares, securities, fixed assets, immovable assets as the case may be, held and owned by them either individually

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or with associations of other without the leave of this Hon'ble Tribunal.

(c) Pass an ex-parte interim order, to be confirmed after notice, restraining the Respondent No.1, 2, 3 and 4 from transferring their shareholding in Respondent No.1 company to any third party or creating any third party rights or interest in Respondent No.1 company in any manner.

(d) Pass an ex-parte interim order, to be confirmed after notice, directing investigation in the affairs of the Respondent No.1 Company qua the management handled by the Respondent No.2 and Respondent No.3.

(e) Pass an ex-parte interim order, to be confirmed after notice, appointing administrator to take control of the assets and affairs of Respondent No.1 Company.

(f) Pass any other interim orders that are deemed expedient by this Hon'ble Tribunal;

(g) Direct that no shareholders and board meetings of respondent no.1- company be held without the permission of this Hon'ble Tribunal till the disposal of the Petition.

(h) Pass such other and/or further Order/directions which this Hon'ble National Company Law Tribunal may deem fit and proper in the facts and circumstances of the present case."

(12) In this backdrop, the learned counsel for the

applicants invited attention of this Court to the contents of the plaint

filed on behalf of the respondent No.1, before the Court below. The

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contents thereof show that allegations identical to those made in the

company petition, have been made in the plaint, while claiming relief

of injunction. This is manifest from the contents of the plaint from

paragraphs 5 to 14. It is brought to the notice of this Court that

thereafter in the plaint, there are certain allegations made against the

original defendant No.1 (respondent No.2 herein) in order to foist

jurisdiction on the Court below. According to the learned counsel for

the applicants, this is an illustration of clever drafting and the

respondent No.1 is seeking to maintain a suit, which is completely

barred under Section 430 of the Companies Act.

(13) In order to support the contentions raised on behalf

of the applicants, the learned counsel has relied upon the judgments of

the Hon'ble Supreme Court in the case of Shashi Prakash Khemka

(dead) through legal representatives and another vs. NEPC Micon

(Now NEPC India Ltd.) and others1 and Dahiben vs. Arvindbhai

Kalyanji Bhanusali (Gajra)(D) Thr LRs and others 2 and judgment of

this Court in the case of Shankar Assana Gaddam vs. Achanak

Associates Realtors Pvt. Ltd. and others3.

1 (2019) 18 SCC 569 2 AIR 2020 SC 3310 3 2021(2)Mh.L.J. 159

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(14) On the other hand, the learned counsel for the

contesting respondent No.1, submitted that even if there were some

similarities in the pleadings in the company petition, as well as the said

suit, a proper appreciation of the pleadings from paragraph 15

onwards of the plaint would show that the respondent No.1 desired to

seek vindication of her right against the original defendant No.1 (i.e.

respondent No.2 herein) pertaining to right to be heard and her

objection being considered in accordance with law by the said

defendant in respect of the intended transfer of property by the

original defendant Nos.2 and 3 (i.e. applicants herein), which would

be detrimental to her interest.

(15) It is submitted that the respondent No.1 is seeking a

specific injunction against the original defendant No.1 from

proceeding with processing the request of the original defendant No.2

for transfer of property. It is pointed out that there is a specific

allegation regarding original defendant No.1 acting in concert with

defendants No.2 and 3, to deprive the respondent No.1 of her

legitimate rights. It is submitted that such a relief cannot be sought

successfully before the NCLT in the company petition and that

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therefore, bar under Section 430 of the Companies Act would not

apply. It was submitted that whether the respondent No.1 would

ultimately succeed in the suit and whether the suit would ultimately be

found to be frivolous, was a matter that could be decided only after

trial and that therefore, the Court below was justified in passing the

impugned order.

(16) Mr. Sonak, learned counsel has appeared on behalf

of respondent No.2, which is essentially a proforma party, insofar as

the present application is concerned.

(17) Having heard the learned counsel for rival parties

and upon perusal of the material placed on record, it would be

relevant to refer to the relevant provisions of law :-

"Section 430. Civil Court not to have jurisdiction - No civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal."

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"Section 242. Powers of Tribunal - (1) If, on any application made under section 241, the Tribunal is of the opinion -

(a) ...........

(b) ...........

(2) Without prejudice to the generality of the powers under sub-section (1), an order under that sub-section may provide for -

(a) ..........

(b) ..........

(c) ..........

(d) ..........

(e) ..........

(f) ..........

(g) the setting aside of any transfer, delivery of goods, payment, execution or other act relating to property made or done by or against the company within three months before the date of the application under this section, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference;"

(18) The learned counsel for the respondent No.1 has not

seriously disputed the fact that the said respondent can certainly hear

her grievance before the NCLT under the provisions of the said Act and

this is evident from the fact that she has already filed the aforesaid

company petition. It is relevant that the company petition was filed

prior in point of time to the suit filed before the Court below.

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                                                              38- CRA 14.2021 Judgment.odt




(19)                      A perusal of the contents of the company petition,

when compared with the contents of the plaint would show that the

grievance sought to be raised on behalf of the respondent No.1 in both

the proceedings is essentially identical. The apprehension of

respondent No.1 is on the same footing and it is an admitted position

that the above quoted final prayers and interim prayers made before

the NCLT would take care of the cause of action that has allegedly

arisen for the respondent No.1. The company petition has been

pending before the NCLT and it is submitted on behalf of the

respondent No.1 that the same could not be taken up for

consideration, because of the lock-down imposed as a consequence of

the COVID-19 pandemic.

(20) Be that as it may, the company petition is pending

and the respondent No.1 does not appear to have taken any pains or

made efforts to seek relief urgently from the NCLT. The suit for

injunction has been admittedly filed thereafter. As noted above, the

contents of the two proceedings are identical for most part and it is

only towards the end of the plaint from paragraph 15 onwards, that

the respondent No.1 has introduced the alleged role of the original

defendant No.1(respondent No.2 herein) to claim that the suit is

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maintainable for the reliefs claimed therein. A careful perusal of the

contents of the plaint from paragraph 15 onwards would show that

much emphasis is placed on the Officers of the original defendant No.1

allegedly acting hand in glove with the applicants herein, so as to

surreptitiously transfer the property. The allegation against the

defendant No.1 is that its Officers have been stalling attempts on the

part of the respondent No.1 for getting any information as regards the

alleged attempt of the defendant No.2 to dispose of properties and that

the defendant No.1 needs to be injuncted for giving any permission or

approval to the petitioner No.1 from taking steps to dispose of the

property. It is on this basis that the prayer have been made in the

aforesaid suit. The specific prayer reads as follows :-

"(A) Permanently restrain the defendant no.1, its agents, servants, or any person acting through it from proceeding with the request of the Defendant no.2 - Vidarbh Ceramics Private Limited to sell Plot no.F-13, MIDC, Hingna, Nagpur."

(21) The essential grievance of the respondent No.1 is

eloquently stated in the company petition and repeated in the plaint

upto paragraph 15. This Court finds that the pleadings are not only

identical, but the grievance sought to be projected is also same. The

apprehension of the respondent No.1 with regard to alleged attempts

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by the applicants herein to surreptitiously dispose of the property are

also found in the company petition. It is only if such attempts have

any basis that the alleged role of the defendant No.1 for issuance of

permission or approval would arise. If the respondent No.1 is found to

be prima facie justified regarding apprehension about surreptitious

transfer of properties by the applicants, appropriate interim relief can

be granted by the NCLT. In fact, the interim prayers quoted above

made on behalf of respondent No.1 before the NCLT clearly spell out

such reliefs sought on her above. Under Section 242(2)(g) of the

Companies Act quoted above, the NCLT has power to grant such reliefs

to the respondent No.1. A perusal of the above quoted main reliefs

sought in the company petition also demonstrate that the grievance of

the respondent No.1 can be fully addressed and satisfied in the

proceedings before the NCLT.

(22) The nature of pleadings clearly show that the bar

under Section 430 of the Companies Act would operate in full force,

insofar as the aforesaid suit filed by the respondent No.1 before the

Court below is concerned. The contents of the plaint from paragraph

15 onwards are obviously a case of clever drafting, only in order to

create an illusion of cause of action, so as to foist jurisdiction on the

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Court below, while by operation of law, such a suit is clearly barred.

The Courts have recognized such situations when the plaintiff seeks to

wriggle out of a specific bar created by a special law like the

Companies Act in the present case.

(23) In this backdrop, the learned counsel for the

petitioner is justified in relying upon judgments of the Hon'ble

Supreme Court in the case of Shashi Prakash Khemka vs. NEPC

Micon(supra) and in the case of Dahiben vs. Arvindbhai (supra).

The Hon'ble Supreme Court in these judgments has clearly found that

when the relief sought by an aggrieved party can be granted by the

NCLT under Section 59 of the said Act, the bar under Section 430

thereof would fully operate. In fact, in the judgment of Dahiben vs.

Arvindbhai(supra) the Hon'ble Supreme Court has specifically referred

to the art of clever drafting of plaints, so as to create illusion of cause

of action and that if the Courts find that the plaintiffs have indulged in

such an art, it is required to be nipped in the bud, in order to put an

end to bogus litigation at the earliest.

(24) Reliance placed on recent judgment of this Court in

the case of Shankar Gaddam vs. Achanak Associates (supra) is also

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justified, because in the said judgment this Court has specifically

referred to the power available to the NCLT under Section 242(2)(g)

of the Companies Act to grant appropriate reliefs and that plaintiffs on

the basis of clever drafting cannot be permitted to knock the doors of

the Civil Court when jurisdiction is clearly barred by the operation of

law.

(25) In view of the above, it becomes clear that the Court

below committed a grave error in appreciating contentions raised on

behalf of the applicants. The observation made in paragraph 24 of the

impugned order to the effect that Section 430 of the Companies Act is

not applicable, because the parties and prayers are different in the

plaint and the company petition, is wholly erroneous and completely

unsustainable. Therefore, it is found that that the impugned order is

erroneous and it deserves to be set aside. It is found that in the

present case the plaint deserves to be rejected under Order VII Rule

11(d) of the CPC.

(26) Accordingly, the Application is allowed.

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(27)                       The impugned order is quashed and set aside and

the application filed on behalf of the applicants for rejection of the

plaint (Exh.10) is allowed in terms of the prayer made therein. No

order as to costs.

[ MANISH PITALE J. ]

KOLHE/P.A.

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