Itc Hotels Ltd. & Ors. vs Abp Pvt. Ltd. & Ors.
2017 Latest Caselaw 148 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     Date of decision: 10th January, 2017

+                               CS(OS) No.575/2004

       ITC HOTELS LTD. & ORS.                     ..... Plaintiffs
                    Through: Mr. Rajiv Nayar, Sr. Adv. with Mr.
                              L.K. Bhushan and Mr. Anirudh Arun
                              Kumar, Advs.

                                Versus

       ABP PVT. LTD. & ORS.                             ..... Defendants
                     Through:         Mr. Darpan Wadhwa, Mr. Arijit
                                      Mazumdar, Mr. Arunabha Deb, Mr.
                                      Akshay Chandna, Advs. for D-1&2.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

IA No.9343/2007 (of all the three defendants under Section 10 of the
CPC).

1.

The counsel for the defendants states that the costs imposed on 28 th

November, 2016 shall be paid in the course of the day.

2. The counsel for the defendants/applicants states that the appeal

preferred against the order dated 3rd August, 2016 dismissing the application

of the defendants under Order VII Rule 11 of the Code of Civil Procedure,

1908 (CPC) is coming up before the Division Bench in February, 2017 and

the hearing of this application be deferred awaiting the outcome of the

appeal.

3. The senior counsel for the plaintiffs opposes, drawing attention to the

order dated 28th November, 2016 where it has already been observed that

without an order of stay of proceedings before this Bench, the pendency of

the appeal cannot be a ground for adjournment, to keep this suit of the year

2004 alive.

4. I am today also of the view that pendency of the appeal would have

no bearing on the hearing of this application. Rather, after hearing the

counsels it appears that the Division Bench at the time of hearing of the

appeal against the order of dismissal of application under Order VII Rule 11

of the CPC, should also have before it the order on this application.

5. The counsels have been heard.

6. The three plaintiffs namely ITC Hotels Limited (since merged with

ITC Limited), International Travel House Limited, and Fortune Park Hotels

Ltd. have instituted this suit against ABP Private Limited, Shri Aveek Sarkar

and Shri Bijit Kumar Basu for recovery of damages/compensation for

defamation and for a direction to the defendants to withdraw the allegedly

defamatory article from their website www.telegraphindia.com and for

permanent injunction to restrain the defendants from re-producing the said

article.

7. Though issues were framed in the suit as far back as on 2 nd March,

2012 but I am told that no evidence has been led in the suit till now.

8. The defendants/applicants seek stay of proceedings in this suit under

Section 10 of the CPC, and on which issue no. (vi) with onus on the

defendants has also been struck, on the ground of Mr. Yogesh Chander

Deveshwar and ITC Limited, prior to the institution of this suit, having

instituted a suit in the High Court of Calcutta against the same three

defendants as in this suit, for recovery of damages/compensation for

defamation from the same news article appearing in the newspaper „The

Telegraph‟ published by the defendants on 10th April, 2004 and for

permanent injunction restraining the defendants from publishing any other

article defaming the plaintiffs therein.

9. The counsel for the defendants/applicants has argued (i) that the

allegedly defamatory article was with respect to the conduct of Mr. Yogesh

Chander Deveshwar in his capacity as the Chairman of Indian Institute of

Management, Calcutta (I.I.M.C.); (ii) that though it was the contention of

the defendants in the application under Order VII Rule 11 of the CPC which

was dismissed vide order dated 3rd August, 2016 that the plaintiffs cannot

have a cause of action for defamation from an article relating to Mr. Yogesh

Chander Deveshwar but the said contention was rejected by this Bench and

appeal whereagainst is pending before the Division Bench; (iii) that Mr.

Yogesh Chander Deveshwar being himself the plaintiff in the suit before the

Calcutta High Court, if the Calcutta suit is dismissed, this suit has to be

necessarily dismissed and cannot survive; (iv) that though the three plaintiffs

have also instituted this suit on the cause of action of being part of the ITC

Group of which Mr. Yogesh Chander Deveshwar was the Chairman but,

though at the time of institution of this suit the three plaintiffs were different

legal entities from the plaintiffs in the Calcutta suit but during the pendency

of the suits plaintiff no.1 herein ITC Hotels Ltd. has merged with ITC

Limited which is the plaintiff no.2 in the Calcutta suit and thus now the

plaintiff no.1 in this suit and the plaintiff no.2 in the Calcutta suit are the

same; (v) a comparison of the plaint in the Calcutta suit and before this

Court would show that the pleadings in both suits are substantially identical;

(vi) and the plaintiffs in this suit are also claiming through Mr. Yogesh

Chander Deveshwar who is himself the plaintiff in the Calcutta suit.

10. Reliance has been placed on (i) National Institute of Mental Health

& Neuro Sciences Vs. C. Parameshwara (2005) 2 SCC 256; (ii) C.L.

Tandon Vs. Prem Pal Singh Rawat AIR 1978 Del 221; (iii) Sagar

Shamsher Jung Bahadur Rana Vs. Union of India AIR 1979 Del 118; (iv)

Arjies Aluminim Udyog Vs. Sudhir Batra AIR 1997 Del 232; and, (v)

Mehta Gandhi & Associates Vs. Shree Pipes Ltd. ILR 1989 Del 94 to

contend (a) that the object of Section 10 is to prevent the courts from

simultaneously trying two parallel suits/trials and to avoid recording of

conflicting findings; (b) that there need not be identity of issues; and, (c) that

the words "matter in issue" do not mean entire subject matter must be the

same but mean that all disputed material questions in the subsequent suit

should be directly and substantially in issue in the previous suit.

11. On enquiry, it is informed that issues have not been struck in the

Calcutta suit as yet.

12. I have in the order dated 3rd August, 2016 of dismissal of the

application of the defendant under Order VII Rule 11 of the CPC

observed/held that a perusal of the amended plaint in this suit shows the plea

of the plaintiffs to be that due to long association and involvement of

Yogesh Chander Deveshwar with the plaintiff companies, the defamation of

Yogesh Chander Deveshwar is defamation of the plaintiffs as well and that

the question whether a corporate entity can be so closely associated with an

individual so as to suffer any loss / damages on account of defamation, even

if not of the said corporate entity but of the said individual, is a question of

fact which cannot be decided at the stage of Order VII Rule 11 of the CPC.

Of course the said observation/finding is the subject matter of pending

appeal.

13. The counsel for the defendants/applicants having argued that if Mr.

Yogesh Chander Deveshwar fails in the Calcutta suit, this suit would also

have to be dismissed, I have enquired from the counsel for the

defendants/applicants whether the same would be true in converse also i.e. if

the Calcutta suit is decreed, whether a decree would follow in this suit also.

14. The counsel for the defendants/applicants states that a decree would

not follow in this suit inasmuch as the question of whether the defamation of

Mr. Yogesh Chander Deveshwar found in Calcutta suit amounts to

defamation of the plaintiffs herein also and if so, what should be the

quantum of damages and other reliefs which the plaintiffs are entitled to,

will have to be put to trial in the present suit.

15. I have yet further enquired from the counsel for the

defendants/applicants as to what is the principle for applicability of Section

10 of the CPC; whether Section 10 can be held to apply only when the

decision of previously instituted suit in one way would constitute res

judicata in subsequent suit or whether the condition for its applicability is

that decision in the earlier suit, whatever it may be, would be res judicata

qua the subsequent suit.

16. The counsel for the defendants/applicants states that though the latter

proposition may be correct but in the peculiar facts of this case, without the

said condition being satisfied also there should be a stay of proceedings in

this suit awaiting the outcome of the Calcutta suit; if not under Section 10 of

the CPC, then under Section 151 of the CPC. It is argued that else, the

purpose of Section 10 of CPC would be defeated.

17. Per contra, the senior counsel for the plaintiffs has argued (i) that the

scheme of amalgamation of ITC Hotels Limited plaintiff no.1 in the suit as

originally filed, with ITC Limited being the plaintiff no.2 in the suit at

Calcutta, provided for ITC Limited to be entitled to continue the

proceedings by or against ITC Hotels Limited; (ii) that ITC Limited is now

pursuing this suit on the cause of action which had accrued to ITC Hotels

Limited and which cause of action has not disappeared on the amalgamation

of ITC Hotels Limited with ITC Limited and that if on the date of institution

ITC Hotels Limited was entitled to sue independently from ITC Limited,

that cause of action would survive the merger; (iii) that the plaintiffs

no.1,2&3 in the present suit thus continue to be different entities and have

filed this suit asserting their independent rights; (iv) that a defamatory act

can give rise to multifarious causes of action and each party claiming to be

defamed can assert its independent right; (v) that for invocation of Section

10 of the CPC it is essential that the finding in the previously instituted suit

shall constitute res judicata and once it will not constitute res judicata, the

question of application of Section 10 does not arise; (vi) Section 151 of the

CPC cannot be invoked once a provision for stay of proceedings has been

made under Section 10 of the CPC.

18. The senior counsel for the plaintiffs, besides distinguishing the

judgments cited by the counsel for the defendants/applicants, has also

referred to Booth Vs. Briscoe 1877 QBD 496 to support that there can be

separate causes of action from a tort and each of the persons claiming can

take separate action, and order dated 17th November, 2009 of the Supreme

Court in Special Leave Petition (Civil) No.7997/2008 titled MKJ

Developers Ltd. Vs. Greenacre Holdings Ltd. to canvass that for

applicability of Section 10 it is essential that the parties to the two actions

are same. It is argued that in the present case Section 10 cannot be invoked

as the parties to the two suits are different.

19. I have considered the aforesaid contentions and also perused the

written submission on record of both the counsels on the said application.

20. The allegedly defamatory article, though in the context of Mr. Yogesh

Chander Deveshwar in his capacity as the Chairman of I.I.M.C. having toed

the line of the Government to cut the fee of I.I.M.C., describes Mr. Yogesh

Chander Deveshwar as ITC Chairman and also attributes motives for the

action of Mr. Yogesh Chander Deveshwar in his capacity as Chairman of

I.I.M.C. to toe the line of the Government, to serve the diverse interests

ranging from tobacco and garments to packaging and information

technology in which ITC is engaged. The article also refers to the actions of

Mr. Yogesh Chander Deveshwar as Manager of ITC Hotels Ltd‟s Usha

Kiran Palace Hotel, Gwalior owned by Mr. Madhavrao Scindia and to the

role played by Mr. Yogesh Chander Deveshwar in the wedding reception of

Mr. Scindia‟s daughter in the said hotel. The article also refers to the earlier

Chairman of ITC and the role played by Mr. Yogesh Chander Deveshwar in

his removal, to grab the throne of ITC with the help of Indian financial

institutions.

21. I am of the view that for applicability of Section 10 it is essential that

the decision in the previously instituted proceedings, whichever way, should

constitute a res judicata in the latter proceedings so as to obviate the need

for the latter to proceed further. Supreme Court in National Institute of

Mental Health & Neuro Sciences Vs. C. Parameshwara (2005) 2 SCC 256

held that the fundamental test to attract Section 10 is, whether at final

decision being reached in the previous suit, such decision would operate as

res judicata in the subsequent suit. It was held that Section 10 applies only

in cases where whole of the subject matter in both suits is identical. The key

words in Section 10 were held to be "the matter in issue is directly and

substantially in issue" in the previously instituted suit. It was held that the

words used are "directly and substantially in issue" as distinct from

"incidentally or collaterally in issue". Section 10 was held to apply only if

there is identity of the matter in issue in both the suits, meaning thereby, that

the whole of the subject matter in both the proceedings is identical. Again,

in ASPI Jal Vs. Khushroo Rustom Dadyburjor (2013) 4 SCC 333 this view

was reiterated.

22. Even if it were to be believed, as contended by the counsel for the

defendants/applicants, that the dismissal of the suit at Calcutta necessarily

has to result in the dismissal of the present suit, the same would still not

attract Section 10 inasmuch as the counsel for the defendants/applicants is

unable to agree that a decree as sought in the Calcutta suit would

automatically be a decree as sought in the preset suit. It is not as if the

decree in the present suit would not follow, according to the counsel for the

defendants/applicants, only owing to quantum of damages if any awarded to

be recoverable to be determined. The counsel for the defendants/applicants

does not want to give up the other defences raised to the suit on which issues

have been framed. Once that is so, the question of the decision of the

Calcutta suit, even if be of dismissal of that suit, cannot be a ground for

staying further proceedings in the present suit.

23. I also entertain doubt whether the dismissal of the Calcutta suit would

ipso facto amount to dismissal of the present suit. The said argument of the

counsel for the defendants/applicants is premised on the dismissal being on

the ground of the article being not defamatory. Dismissal of a suit can be for

diverse reasons and merely because disposal of the suit in one particular

manner may amount to res judicata in a subsequent suit cannot, in my

opinion, be a ground for invoking Section 10.

24. As far as the invocation of inherent powers of the Court under Section

151 of the CPC are concerned, though the Courts have time and again held

(See Durgesh Sharma Vs. Jayshree (2008) 9 SCC 648 and Ram Prakash

Agarwal Vs. Gopi Krishan (2013) 11 SCC 296) that inherent powers cannot

be invoked vis-a-vis matters for which specific provision has been made in

the Code but even if the inherent powers were to be invoked, I am not

satisfied that a case for grant of stay of proceedings is made out. The Court

cannot on equitable consideration stand in the way of the plaintiff who has

approached the Court, from proceeding to prove his case. Law permits the

same only when the conditions prescribed in Section 10 are satisfied. The

Court, in my opinion, would be unjustified in staying a proceeding brought

before it, on the ground that the disposal of a previously instituted

proceeding in one of the several ways in which it may be disposed may

bring to an end the proceeding; in such a situation, in the event of the

previously instituted proceeding being disposed of in some other manner,

the proceeding would have to continue and the Court would have no way to

compensate the plaintiff whose proceedings have been so stayed, for the

delay thereby caused to such plaintiff in agitating his rights in a Court of

law.

25. I therefore do not find any merit in the application.

26. Dismissed.

CS(OS) No.575/2004.

27. Though the stage for filing of list of documents is long past gone but

by way of indulgence, both plaintiffs and the defendants are permitted to file

their additional documents if any and list of witnesses on or before 31st

January, 2017. If this opportunity is not availed, the right shall stand closed

and no application therefor shall be entertained.

28. Option of having the evidence recorded before the Court

Commissioner has been given but has not been accepted by both the

counsels.

29. The plaintiffs to file affidavits by way of examination-in-chief of all

their witnesses on or before 6th March, 2017.

30. List before the Joint Registrar on 8th March, 2017 for fixing the dates

of trial.

RAJIV SAHAI ENDLAW, J.

JANUARY 10, 2017 „pp/bs‟ (corrected & released on January 18, 2017)