Sartaj Sahni vs Naresh Talwar & Ors
2020 Latest Caselaw 508 Del

$~66
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                           Date of decision: 27th January, 2020
+        CM (M) 96/2020, CM APPLs. 3286/2020 & 3287/2020
       SARTAJ SAHNI                                          ..... Petitioner
                             Through:     Mr. Sidharth Chopra, Mr. Nitin
                                          Sharma and Mr. Yatinder Garg,
                                          Advocates. (M:9999064036)
                             versus

       NARESH TALWAR & ORS                               ..... Respondents

                   Through:               Mr. Madhav Khurana, Ms. Tanya
                                          Khare and Ms. Arushi, Advocates.
                                          (M:9810376255)
       CORAM:
       JUSTICE PRATHIBA M. SINGH
       Prathiba M. Singh, J.(Oral)

1. The Petitioner/Plaintiff - Dr. Sartaj Sahni filed a suit for declaration and permanent injunction before the Original Side of this Court in respect of his shareholding in QH Talbros Limited which is a company having its registered office at 400, Udyog Vihar, Phase III Gurgaon- 122016. The prayer sought in the suit is as under:

"28. In light of the submissions made herein above it is humbly prayed before the Hon'ble Court to be pleased to decree the suit in terms of the following: i. Hold and declare that the Extra Ordinary General Meeting held on 27th April 2013 is illegal and therefore the resolutions to increase the share capital is null and void. ii. Hold and declare that the Rights Issue on 9th May 2013 is illegal and thus is set aside.

iii. Hold and declare by way of consequential relief that

the Plaintiff is a shareholder holding 7.14% shares and make all necessary changes to the records of the Defendant No. 4 Company to reflect that the shareholding of the Plaintiff as 7.14% including payment of dividend as per above mention shareholding as also payment of arrears fair.

iv. Pass an order of permanent injunction restraining the Defendants from making any changes in the shareholding of the Defendant No.4 Company without duly informing the Plaintiff under law at the address notified by the Plaintiff to the Defendant No. 4 Company, i.e. W-80 Greater Kailash 11, New Delhi.

v. Any other and further relief which this Hon'ble Court may deem in the facts and circumstances of this case."

2. The suit was initially listed on 8th August, 2014 on which date an ex- parte ad-interim order was passed to the following effect:

"... Let the plaint be registered as a suit. Issue summons in the suit and notice in the application to the defendants, on filing of process fee and registered AD covers within one week, returnable on 10th November, 2014.

Learned counsel for the plaintiff has referred to various paras of the plaint and documents placed on record. In view of the statement made in the plaint and documents placed on record, till the next date of hearing, the defendants shall maintain status quo on the shareholding of the plaintiff in the defendant company. Compliance of Order XXXIX Rule 3 CPC be made within one week.

Dasti."

The above interim order was thereafter modified on 15 th May, 2015 in the folowing terms:

"...

7. Having heard the counsels for the parties and carefully considering the submissions made by them, the Court Is of the opinion that the Interest of the plaintiff can be secured by directing the Managing Director of the defendant No.4/company to file an affidavit for self and on behalf of the defendant No.4/company undertaking inter alia that In the event the plaintiff succeeds In the present suit, he shall be given the benefits and effects as In May, 2013, including the rights, issues, dividend, etc., subject to his completing all requisite formalities.

8. The aforesaid affidavit shall be filed within two weeks from today, with an advance copy to the other side and the defendants No.3 & 4 shall remain bound by the said affidavit. It is however, clarified that the scheme of arrangement that is pending before the Company Judge, Punjab & Haryana High Court, if sanctioned, shall apply across the board to all the shareholders, including the plaintiff herein. It may be clarified that this order is being passed to ensure that the pending scheme of arrangement submitted by the defendant No.4/ company before the Punjab & Haryana High Court is not impeded due to the pendency of the suit, but the same is without prejudice to the rights and contentions of the defendant No.4/company as raised in IA No. 15612/2014. ..."

Pursuant to the above order, an undertaking dated 27th May, 2015 was given by way of an affidavit of Mr. Vidur Talwar son of Mr. Naresh Talwar. The said undertaking reads as under:

"... 3. I state that without prejudice to the submission of the Defendant No. 4 in I.A No. 15612 of 2014 which has been filed by it in the present suit seeking rejection of the Plaint, I am filing the present affidavit.

4. I state that in the event of the Plaintiff succeeding in the present suit, his shareholding with all consequential

benefits and effects shall be reverted to as it was in May 2013 including the right issues, dividend etc subject to the Plaintiff completing the requisite formalities. I further state that after reverting the shareholding of the Plaintiff to as it was in May 2013, the same would undergo such changes as are proposed in the scheme of arrangement of the Defendant no. 4 that is pending before the Hon'ble Company Judge of the Punjab and Haryana High Court which, upon sanction shall apply to all the shareholders of the Defendant No. 4 including the Plaintiff"

3. The Company - QH Talbros Limited filed an application under Order VII Rule 10 CPC while the suit was pending and due to the increase in the pecuniary jurisdiction of the Delhi High Court, the suit was transferred on 7th December, 2015 to the District Court, Dwarka. The order transferring the suit reads as under:

"The plaintiff filed the suit for declaration and permanent injunction. Although it is a commercial dispute, the valuation of the suit is Rs.71,42,900/-. In view of Section 4 of the Delhi High Court (Amendment) Act, 2015 and the order passed on 24th November, 2015, the suit is transferred to the jurisdiction of District Judge (South-West), Dwarka Court. Parties to appear before the concerned Court on 25th February, 2016."

4. Thereafter, the application under Order VII Rule 10 CPC has been heard by the ld. ADJ. By the impugned order dated 8th January, 2020, the ld. ADJ has returned the plaint for lack of jurisdiction and has also vacated the interim order, hence this petition.

5. The submission of Mr. Sidharth Chopra, ld. counsel appearing for the Petitioner is that the entire allegation in the plaint is in respect of a fraud and conspiracy by the Directors i.e, Defendant No.1- 3, who are located in Delhi.

Further, the notice which was compulsorily to be served on the Petitioner/Plaintiff was allegedly dispatched from Delhi. The Plaintiff's alternate address was also in Delhi where the notices were to be served. Thus, the Delhi High Court where the suit was instituted originally, had the requisite jurisdiction and it was due to orders of this Court that the suit was transferred to the District Court, Dwarka. He, thus, submits that the issue that was to be examined by the Court was not as to whether the District Court, Dwarka had jurisdiction or not but whether the suit was filed in the proper Court i.e, in the Delhi High Court.

6. On the other hand, Mr. Khurana, ld. counsel appearing for the Respondents submits that the situs of the shares is where the registered office of the company is, which is in Gurgaon. He further submits that the proper jurisdiction for the filing of the suit was Gurgaon. The residence of the Directors would not determine the question as to whether the Delhi High Court or the District Court (SW), Dwarka had jurisdiction or not. It is submitted that the plaint has been properly returned.

7. This Court has perused the documents and the pleadings as on record. There is no doubt that the Directors of the Defendant No.4 - company reside in Delhi. The DHL tracking report also appears to suggest that the courier was done from Delhi. Thus, it cannot be said that courts in Delhi do not have jurisdiction. Initially the suit was before the High Court, so there was no question as to whether it was filed in the correct District or not, but the impugned order seems to proceed on the basis that it is filed in the wrong district. To avoid any further delay in adjudication, the Plaintiff is willing to present the plaint before the District Courts, Gurgaon. However, the question is whether Ld. ADJ ought to have vacated the interim order which

was operating in the matter, even if the plaint was being returned, as there was no adjudication on the merits of the interim order.

8. Mr. Sidharth Chopra, ld. counsel, submits that the company had given an undertaking to ensure that the status quo in respect of the shareholding ought not to be changed in the interregnum. The same should be continued. Accordingly, since an undertaking has already been given by the company pursuant to the orders passed by this Court, by one of the Directors who is in New Delhi, it is held that the company and all its Directors shall be bound by the undertaking dated 27th May, 2015 given by way of an affidavit of Mr. Vidur Talwar son of Mr. Naresh Talwar, as extracted above.

9. In view of the fact that the Defendants are held to their undertaking, the interim order already passed as also the undertaking shall remain binding on the company. Mr. Sidharth Chopra, ld. counsel at this stage submits that since the Defendants are made to be bound by the undertaking and the interim order already passed, he has no objection if the suit is now directed to be re-presented before the District Courts in Gurgaon.

10. The impugned order is accordingly modified to the extent that the plaint is returned to the Petitioner/Plaintiff for being re-presented before the appropriate District Courts in Gurgaon on or before 20th February, 2020. Until then, the interim order passed by this Court on 8th August, 2014 and modified on 15th May, 2015 as also the undertaking given by the affidavit dated 27th May, 2015 shall remain binding on the Defendants. If the plaint is re-presented, the said interim orders and undertaking shall continue till the adjudication of the suit and the Defendants are permitted to seek modification, if need be, which shall then be dealt with by way of a specific order passed by the appropriate Court, in accordance with law. However, if

the plaint is not re-presented, the interim orders and the undertaking shall come to an end on 20th February 2020.

11. With these observations the petition along with all pending applications is disposed of.

PRATHIBA M. SINGH JUDGE JANUARY 27, 2020 dj