M/S Cygnus Medicate Pvt. Ltd. ... vs Bank Of Maharashtra & Ors
2014 Latest Caselaw 5195 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

                                               Pronounced on: 16th October, 2014

+       I.A. 17231/2014 (Order XXXIX Rules 1 & 2 CPC) in
        CS(OS) 2714/2014

        M/S CYGNUS MEDICATE PVT. LTD. THROUGH
        MR. DINESH BATRA                                                ..... Plaintiff
                                Through:     Mr. Dinesh Agnani, Senior Advocate
                                             with Mr. Gaurav Bahl, Advocate

                                versus

        BANK OF MAHARASHTRA & ORS               ..... Defendants
                    Through: Mr. S.B. Singh, Advocate for Mr.
                             Navin Thakkar, Advocate for D-1.
                             Mr. R.K. Dhawan, Advocate, Mr. S.T.
                             Srinivasan, Advocate, Ms. Richa
                             Dhawan, Advocate & Ms. Shweta
                             Joshi, Advocate for D-2 to 4.

        CORAM:
        HON'BLE MR. JUSTICE G.P. MITTAL

1.

This suit for declaration with consequential relief of permanent and

mandatory injunction has been filed by the Plaintiff against the

Defendants on the basis of averments that Defendants no.3 and 4

approached Dr. Dinesh Batra (initially Dr. Dinesh Batra, the Plaintiff

in the suit, during the course of submission on I.A.17231/2014 the

learned counsel for the Plaintiff sought amendment in the memo of

parties and M/s. Cygnus Medicate Pvt. Ltd. became the Plaintiff

through Dr. Dinesh Batra, which is taken on record) to provide

management services to run Bensups Hospital belonging to Defendant

no.2 Trust. The Plaintiff company and Defendant no.3 on behalf of

Defendants no.2 and 4 to 8 entered into a Medical Services

Agreement(MSA) dated 22.09.2011 and letter containing terms and

conditions under which the Plaintiff was to run the hospital.

According to the Plaintiff, Defendant no.2 was entitled to an amount

of Rs.20,00,000/- per month or 8% of the gross monthly revenue. The

agreement was to run for a period of 18 years at the option of the

Plaintiff with a lock-in period of three years. According to the

Plaintiff, Bensups Hospital was in disarray. State of affairs of

Bensups Hospital as given in para 9 of the plaint are extracted

hereunder:

"9. That at the time of signing the MSA and handing over possession of the hospital, the defendants were:-

A. not having mandatory registration with DHS, B. Not designated ward for Economic Weaker sections, C. Hospital was having no OPD facility for EWS, D. Casualty and ICU wards were working with 99% Ayurvedic and Unani doctors, E. New born ICU was without any doctors, F. Before MSA and LETTER the hospital admissions were barely 70-80 in a month, that too without proper OPD and intensive care facilities, G. No minimum wages criteria was followed, H. No international patients were treated at the hospital, the hospital was virtually defunct,

I. The Magnitude of mismanagement at the hospital can be adjudged that immediately before taking over of the hospital by the Plaintiff, in the year 2011, Trust was adopting the dangerous practice of reusing the syringes whereas disposable syringes are mandatory."

2. According to the Plaintiff, it made great effort in reviving the hospital

as a result of which the improvements as stated in para 10 of the Plaint

were made.

3. It is the case of the Plaintiff that as per clause 8.1 and 8.2 of MSA,

Defendants were to provide completion certificate of the hospital

which has not been done. As per clause 8.9.1, the Defendants were to

ensure filing of Income Tax Returns and to deposit the TDS deducted

from the Consultant/Outsourcing Agency, etc. etc.

4. The learned Senior Counsel for the Plaintiff has urged that Defendants

no.3 and 4 had previously entered into a MSA dated 13.07.2011 with

another company and an MSA dated 22.09.2011 was entered between

the Plaintiff and the Defendant no.3 without disclosing the said MSA

dated 13.07.2011 entered into by Defendant no.2 with another

company. The Plaintiff has urged that some acts of mismanagement,

interference with the running of the hospital and siphoning of the

revenue from the account of Bensups Hospital, were also used to be

done by the Defendants.

5. In the application under Order XXXIX Rules 1 and 2 read with

Section 151 CPC, the Plaintiff prays for following interim relief:

"It is therefore, respectfully prayed that this Hon'ble Court by means of ex parte ad interim injunction order may be pleased to:

A. Restrain the defendants no.2 to 8 their members, trustees, successors, agents, servants, associates etc. etc. from forcefully dispossessing plaintiff, company and its officials from the hospital and further be restrained from entering into the hospital and from interfering into the day to day functioning at Bensups Hospital including interfering in the operation of the Operative Account bearing no.60106969773 maintained at Bank of Maharashtra, Dwarka Branch in terms of the Clause 9(i) of the Letter dated 22/09/11;

B. Direct the defendant no.1 to ensure compliance of the directions contained herein above in prayer A;

C. Defendant no.2 to 8 may be directed to comply with the statutory compliances of income tax and issue TDS certificates quarterly within time;

D. The Defendants, theirs agents, assigns, representatives, officers, directors, employees or any other person on behalf of the Defendant No.2 to 8 be restrained from disseminating any false, frivolous and defamatory notices against the Company, it directors/promoters, employees and electronic media or otherwise;"

6. The learned Senior Counsel for the Plaintiff, however, presses for

prayer (A) at the time of hearing on arguments on the application.

7. The application has been strongly opposed by Mr. R.K. Dhawan,

Advocate for Defendants no.2 to 4. It is submitted that the Plaintiff

has filed an application under Section 9 of the Arbitration and

Conciliation Act, 1996 (the Act) and has obtained certain ex parte

orders. It is urged that despite directions by this Court to the learned

Additional District Judge to decide the application under Section 9 of

the Act expeditiously, it was not done. Ultimately, Defendant no.3

had to file a civil suit CS(OS)292/2013 seeking declaration inter alia

that the MSA dated 22.09.2011 was sham, illegal, null and void and

was obtained by fraud and misrepresentation and undue influence and

coercion by the Defendants in that suit which included the Plaintiff

herein and Dr. Dinesh Batra. It is matter of record that an application

under Section 8 of the Act was filed in the civil suit which was

dismissed by Hon'ble Mr. Justice Jayant Nath by an order dated

09.12.2013. The petition under Section 9 of the Act also came to be

dismissed by the learned Additional District Judge by an order dated

07.08.2014.

8. The learned counsel for the Defendants has urged and taken me

through the pleadings in CS(OS)282/2013 to urge that Dr. Dinesh

Batra was a director in the Plaintiff company as well as in the M/s.

Altius Healthcare Pvt. Ltd. and that he fraudulently initially obtained

the MSA dated 13.07.2011 between Defendant no.2 and M/s. Altius

Healthcare Pvt. Ltd. and subsequently MSA dated 22.09.2011 between

Defendant no.3 and the Plaintiff. It is urged that it was because of the

fraudulent acts committed by Dr. Dinesh Batra that the President of

Defendant no.2 Trust was falsely involved in a criminal case and it

was only during pendency of the said criminal case that Defendant

no.3 was coerced to enter into the MSA dated 22.09.2011. It is urged

that the fraudulent acts committed by Dr. Dinesh Batra have been

detailed in para 7 of the plaint in CS(OS) 292/2013. It is also urged by

the learned counsel for the Defendants no.2 to 4 that although the

Plaintiff during the hearing of an SLP 3129/2014 assured for

expeditious disposal of CS(OS) 292/2013, but instead of cooperating

in the trial of the earlier said suit has filed this suit seeking interim

relief. Learned counsel for Defendants no.2 to 4 urges that the

Plaintiff ought to have filed a counter claim in the earlier suit instead

of filing this suit.

9. Acts of fraud committed by the Plaintiffs have been mentioned in para

7 of CS(OS) No.292/2013 which led the Court to entertain the suit and

dismiss the application under Section 8 of the Arbitration &

Conciliation Act.

10. A perusal of MSA reveals that a large number of obligations have

been placed upon Defendant no.2 Trust which are to be performed

through the trustees. Admittedly, Defendant no.2 Trust on its part has

terminated the MSA dated 22.09.2011 by a legal notice dated

07.09.2012. It is to be seen even if the termination of agreement is not

in accordance with the terms whether the Plaintiff can still insist on

enforcement of the MSA or can only seek damages. In view of this, I

am not inclined to grant an interim injunction in favour of the Plaintiff

without having the pleadings of the parties on record.

CS(OS) 2714/2014

Written statement be filed within 30 days. Rejoinder, if any,

within two weeks thereafter.

List before the Joint Registrar for completion of pleadings and

admission/denial of documents on 25.11.2014.

(G.P. MITTAL) JUDGE OCTOBER 16, 2014 pst