Karnataka High Court
Greenfinch Projects Private Limited vs Mr. B Ankaamma Rao on 13 December, 2023
Author: H.T. Narendra Prasad
Bench: H.T. Narendra Prasad
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NC: 2023:KHC:45390
MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE H.T. NARENDRA PRASAD
MISCELLANEOUS FIRST APPEAL NO. 7475 OF 2023 (CPC)
C/W
MISCELLANEOUS FIRST APPEAL NO. 7670 OF 2023(CPC)
IN MFA 7475/2023
BETWEEN:
1. MR V MUNIRAJU
AGED ABOUT 66 YEARS
SON OF MR. S VENKATAPPA
2. MS PADMAVATHI G
AGED ABOUT 56 YEARS
WIFE OF MR. MUNIRAJU V
3. DR. SHAILAJA MUNIRAJU
AGED ABOUT 37 YEARS
Digitally signed D/O MR MUNIRAJU
by
DHANALAKSHMI
MURTHY
Location: High
4. MR. PRADEEP KUMAR M
Court of AGED ABOUT 35 YEARS
Karnataka
S/O MR. MUNIRAJU, V
5. MR. MANJUNATH M
AGED ABOUT 32 YEARS
S/O MR. MUNIRAJU V
APPELLANT Nos. 1 TO 5 ARE R/AT
NO. 4444, APPA AMMA NILAYA
MES COLONY, KONENA AGRAHARA
HAL POST BANGALORE 560 017.
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
6. MR. BALARAJU V
AGED ABOUT 58 YEARS
S/O MR. S VENKATAPPA.
7. MR. SUJATHA
AGED ABOUT 44 YEARS
W/O MR. BALARAJU V
8. MR. ROHITH B
AGED ABOUT 29 YEARS
S/O MR. BALARAJU V
9. MR. GANESH B
AGED ABOUT 26 YEARS
S/O MR. BALARAJU V
APPELLANT Nos. 6 TO 9 ARE R/AT
NO. 3 KARIYAMMANA AGRAHARA
MARATHALLI POST
BANGALORE 560 037.
10. MR. KUMAR C
AGED ABOUT 28 YEARS
S/O MR. R CHANDRAPPA
R/AT NO. 8 BHAGAVATHI NILAYA
KARIYAMMANA AGRAHARA
BELLANDUR POST
BANGALORE 560 103.
11. MR. R RAVINDRA
AGED ABOUT 61 YEARS
S/O MR. S RAMAIAH
12. MR. KRISHNA VENI
AGED ABOUT 49 YEARS
W/O SHRI RAVINDRA
13. MS. YASHASWINI R
AGED ABOUT 17 YEARS
D/O MR, RAVINDRA
MINOR REPRESENTED BY
HER MOTHER AND NATURAL
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
GUARDIAN , SMT. KRISHNAVENI
APPELLANTS No. 11 TO 13 ARE
R/ATNO.150/1, KARIYAMMANA AGRAHARA
BELLANDUR POST, VARTHU
BANGALORE-560 103
ALL ARE REPRESENTED BY
GPA HOLDER APPELLANT NO.11.
14. MR. C DASARATHA REDDY
S/O MR. CHINNAPPA, REDDY
AGED ABOUT 71 YEARS.
15. MS. PAVITHRA D
AGED ABOUT 42 YEARS
D/O MR. C DASARATHA REDDY
APPELLANTS 14 & 15 ARE
R/AT NO. 144, GURURAJA LAYOUT
LAKE ROAD, DODDANEKUNDI
BANGALORE 560 037.
16. MR. PRAVEEN
AGED ABOUT 40 YEARS
S/O MR. C DASARATHA REDDY
17. MR. PRADEEP REDDY
AGED ABOUT 37 YEARS
S/O MR. C DASARATHA REDDY
APPELLANTS No. 16 & 17 ARE R/AT
NO. 737/44, 1st MAIN
CHOWDESHWARI LAYOUT
MARATHALLI POST
BANGALORE 560 037.
18. MR. B C NAGESH REDDY
AGED ABOUT 66 YEARS
S/O SRI. CHINNAPPA REDDY
R.AT NO. 256, 6th CROSS
BEHIND THULASI THEATRE
MUNNEKOLALA EXTENSION
MARATHAHALLI POST
BANGALORE 560 037.
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
19. MR. C RAJENDRA
AGED ABOUT 62 YEARS
S/O MR. CHINNAPPA REDDY
R/AT NO. 57, DEVARABISANAHALLI
NEAR SREENIVASA
MEDICALS, BANGALORE 560 103.
APPELLANT Nos. 14 TO 19 ARE REPRESENTED BY
GPA HOLDER APPLLANT NO.17
...APPELLANTS
(BY SRI. DHYAN CHINNAPPA SENIOR COUNSEL FOR
SRI. SUNDARA RAMAN M V.,ADVOCATE &
SMT. NIKITA GANESH, ADVOCATE)
AND:
1. MR B ANKAMMA RAO
SON OF MR. VEERAIAH
AGED ABOUT 50 YEARS
RESIDING AT NO. 1/727, 9TH LINE
PANDARIPURAM
CHILAKALURIPETA
GUNTURU DISTRICT
ANDHRA PRADESH.
REPRESENTED HEREIN BY HIS
POWER OF ATTORNEY
MR. SIVA SANKAR P
SON OF MR. SRINIVAS RAO
AGED ABOUT 40 YEARS
RESIDING AT LINGARAOPALEM
EDLAPADU MANDAL
GUNTUR DISTRICT
ANDHRA PRADESH - 522 234.
2. BHOOMIKA INFRABUILD PRIVATE LIMITED
A COMPANY INCORPORATED
UNDER THE COMPANIES ACT 1956
HAVING ITS REGISTERED OFFICE AT
NO. 823, 1st FLOOR
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
11th MAIN , 2nd CROSS
HAL II STAGE, INDIRANAGAR
BANGALORE 560 008
REPRESENTED HEREIN BY ITS DIRECTOR.
3. MR. P ANJANEYA REDDY
S/O MR. PAPAIAH
AGED ABOUT 67 YEARS
R/AT NO. 20/2
CAMBRIDGE CROSS ROAD
HALASURU BANGALORE 560 008.
4. GREENFINCH PROJECTS PRIVATE LIMITED
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT 1956
HAVING ITS REGISTERED OFFICE AT
NO. 18/2A, AND 2B, KEMPAPURA
YAMLUR, KEMPAPURA MAIN ROAD
BANGALORE 560 037
REPRESENTED HEREIN BY ITS DIRECTOR.
5. MR. ARJUN ANJANEYA REDDY
S/O MR. P ANJANEYA REDDY
AGED ABOUT 33 YEARS
RESIDING AT NO. 83 1st MAIN ROAD
VARSOVA LAYOUT, C V RAMAN NAGAR
BANGALORE 560 093.
6. MR. HARSHAVARDHAN ANAJANEYA REDDY
S/O MR. P ANJANEYA REDDY
AGED ABOUT 36 YEARS
R/AT NO. 83, 1st MAIN ROAD
VAROSOVA LAYOUT, C V RAMAN NAGAR
BANGALORE 560 093.
7. MR. R SUDHAKAR
AGED MAJOR
HAVING HIS PALACE OF WORK
AT NO. 823, 1st FLOOR
11th MAIN , 2nd CROSS
HAL II STAGE, INDIRANAGAR
BANGALORE 560 008.
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
8. MR. C KONDAPPA
S/O SHRI CHIKKA KONDAPPA
AGED ABOUT 59 YEARS
R/AT VENKATAPURA VILLAGE
CHIKKAMALUR POST
MADUGIRI TALUK
TUMKUR DISTRICT 572 132.
9. MR. R CHANDRAPPA
AGED ABOUT 64 YEARS
S/O MR. S RAMAIAH
10. MS. PADMA
AGED ABOUT 52 YEARS
W/O MR. R CHANDRAPPA
11. MS. KAVYASHREE C
AGED ABOUT 30 YEARS
D/O SHRI R CHANDRAPPA
12. MR. KARTHIK C
AGED ABOUT 28 YEARS
S/O MR. R CHANDRAPPA
R 9 TO R12 ARE R/AT NO. 8
BHAGAVATHI NILAYA
KARIYAMMANA AGRAHARA
BELLANDUR POST
BANGALORE 560 103.
13. MR. KONDANDARAMA REDDY
AGED ABOUT 68 YEARS
S/O MR. CHINNAPPA REDDY
R.AT NO. 744/93, 2nd CROSS
BEHIND THULASI THEATER
MUNNEKOLALA EXTENSION
MARATHALLI POST, BANGALORE 560 037
...RESPONDENTS
(BY SRI.C.K.NANDA KUMAR, SENIOR COUNSEL FOR,
SRI.RAGHURAM CADAMBI., ADVOCATE FOR C/R1:
SRI. D.R. RAVISHNAKR SENIOR COUNSEL FOR
SRI. SARAVANA S, ADVOCATE FOR R2 & R3)
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
THIS MFA IS FILED UNDER ORDER 43 RULE 1(r) R/W
SECTION 151 OF CPC, AGAINST THE ORDER DATED
13.10.2023 ON I.A.NOS.1 AND 2 IN OS.NO.5628/2023 ON THE
FILE OF THE XII ADDITIONAL CITY CIVIL AND SESSIONS
JUDGE, BENGALURU CCH-27, ALLOWING THE I.A.NOS.1 AND 2
FILED UNDER ORDER 39 RULE 1 AND 2 R/W SECTION 151 OF
CPC.
IN MFA 7670/2023
BETWEEN:
1. GREENFINCH PROJECTS PRIVATE LIMITED
A COMPANY INCORPORATED
UNDER THE COMPANIES ACT 1956
HAVING ITS REGISTERED OFFICE AT
NO 18/2A AND 2B, KEMAPURA
YAMALUR, KEMPAPURA MAIN ROAD
BANGALORE 560037
REP HEREIN BY ITS DIRECTOR.
2. MR ARJUN ANJANEYA REDDY
S/O P ANJANEYA REDDY
AGED 33 YEARS
R/O NO 83, 1ST MAIN ROAD
VARSOVA LAYOUT
C V RAMAN NAGAR
BANGALORE 560093
3. MR. HARSHAVARDHAN ANJANEYA REDDY
AGED ABOUT 36 YEARS
S/O P ANJANEYA REDDY
AGED ABOUT 33 YEARS
R/O NO 83, 1ST MAIN ROAD
VARSOVA LAYOUT
C V RAMAN NAGAR, BANGALORE 560093
...APPELLANTS
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
(BY SRI. UDAY HOLLA, SENIOR COUNSEL FOR
SRI. IRFANA NAZEER, ADVOCATE AND
SMT. SANJANA UMESH, ADVOCATE)
AND
1. MR. B ANKAAMMA RAO
SON OF MR VEERAAH
AGED ABOUT 50 YEARS
R/AT NO 1/727, 9TH LINE
PANDARIPURAM, CHILAKALURIPETA
GUNTURU DISTRICT, ANDRA PRADESH.
REPRESENTED HEREIN BY HIS
POWER OF ATTORNEY
MR SIVA SANKAR P
SON OF MR SRINIVAS RAO
AGED ABOUT 40 YEARS
R/AT LINGARAAOPALEM
EDLAPADU MANDAL
GUNTUR DISTRICT
ANDHRA PRADESH 522234.
2. BHOOMIKA INFRABUILD
PRIVATE LIMITED
A COMPANY INCORPORATED
UNDER THE COMPANIES ACT
1956 HAVING ITS REGISTERED
OFFICE AT NO 823, 1ST FLOOR
11TH MAIN, 2ND CROSS
HAL II STAGE, INDIRANAGAR
BANGALORE 560008.
3. MR P ANJANEYA REDDY
S/O MR PAPAIAH
AGED ABOUT 67 YEARS
R/O NO 20/2, CAMBRIDGE CROSS ROAD
HALASURU, BANGALORE 560008
4. MR R SUDHAKAR
AGED MAJOR
HAVING HIS PLACE OF WORK AT
NO 823, 1ST FLOOR
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
11TH MAIN, 2ND CROSS
HAL II STAGE, INDIRANAGAR
BANGALORE 560008.
5. MR C KONDAPPA
SON OF SRI CHKKA KONDAPPA
AGED ABOUT 59 YEARS
RESIDING AT VENKATAPURA VILLAGE
CHIKKAMALUR POST, MADUGIR TALUK
TUMKUR DISTRICT 572132.
6. MR V MUNIRAJU
AGED ABOUT 66 YEARS
SON OF MR S VENKATAPPA
7. SMT PADMAVATHI G
AGED ABOUT 56 YEARS
WIFE OF MR MUNIRAJU V
8. DR SHAILAJA MUNIRAJU
AGED ABOUT 37 YEARS
DAUGHTER OF
SHRI MUNIRAJU V
9. MR PRADEEP KUMAR M
AGED ABOUT 35 YEARS
SON OF MR MUNIRAJU V
10 . SRI MANJUNATH M
AGED ABOUT 32 YEARS
SON OF MR MUNIRAJU V
R6 TO R10 ARE R/AT NO 4444, APPA AMMA NILAYA
MES COLONY, KONENA AGARAHARA
HAL POST, BANGALORE 560017.
11 . SHRI BALARAJU V
AGED ABOUT 58 YEARS
SON OF MR S VENKATAPPA
12 . SMT SUJATHA
AGED ABOUT 44 YEARS
WIFE OF MR BALARAJU V
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
13 . SHRI ROHITH B
AGED ABOUT 29 YEARS
SON OF MR BALARAJU V
14 . MR GNANESH B
AGED ABOUT 26 YEARS
SON OF MR BALARAJU V
R11 TO R14 TO ARE R/AT NO 3
KARIYAMMANA AGARAHARA
MARATHAHALLI POST
BANGALORE -560037.
15 . SHRI R CHANDRAPPA
AGED ABOUT 64 YEARS
SON OF MR S RAMAIAH
16 . SMT PADMA
AGED ABOUT 52 YEARS
WIFE OF MR R CHANDRAPPA
17 . SMT KAVYASHREE C
AGED ABOUT 30 YEARS
DAUGHTER OF SHRI R CHADNRAPPA
18 . SHRI KUMAR C
AGED ABOUT 28 YEARS
SON OF MR R CHANDRAPPA
19 . SHRI KARTHIK C
AGED ABOUT 28 YEARS
SON OF MR R CHANDRAPPA
R15 TO 19 ARE R/AT NO 8
BHAGAVATHI NILAYA
KANIYAMMANA AGRAHARA
BELLANDURU POST
BANGALORE 560103
20 . SHRI R RAVINDRA
AGED ABOUT 61 YEARS
SON OF MR S RAMAIAH
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
21 . SMT KRISHNA VENI
AGED ABOUT 49 YEARS
WIFE OF SHRI RAVINDRA
22 . MS YASHASWINI R
AGED ABOUT 17 YEARS
DAUGHTER OF MR RAVINDRA
MINOR REPRESENTED BY HER
MOTHER AND NATURAL GUARDIAN
SMT KRISHNA VENI
R20 TO R22 ARE R/T NO 150/1
KARIYAMMA AGRAHARA
BELLANDUR POST
VARTHUR, BANGALORE 560103.
23 . SHRI C DASARATHA REDDY
AGED ABOUT 71 YEARS
SON OF MR CHINNAPPA REDDY
24 . SMT PAVITHRA D
AGED ABOUT 42 YEARS
DAUGHER OF MR C DASARATHA REDDY
R23 AND R24 R/T NO 144
GURURAJA LAYOUT, LAKE ROAD
DDODANEKKUNDI, BANGALORE 560037
25 . SHRI PRAVEEN
AGED ABOUT 40 YEARS
SON OF M C DASARATHA REDDY
26 . SHRI PRADEEP REDDY
AGED ABOUT 37 YEARS
SON OF MR C DASARATHA REDDY
R25 AND R26 ARE R/AT NO 737/44
1ST MAIN CHOWDESHWARI LAYOUT
MARATHAHALLI POST
BANGALORE 580037
27 . MR KODANDARAMA REDDY
AGED ABOUT 68 YEARS
SON OF MR CHINNAPAP REDDY
RESIDING AT NO 744/93
24TH CROSS, 2 BEHIND THULASI
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
THEATRE, MUNNEKOLALA
EXTENSION, MARATHAHALLI POST
BANGALORE 560037.
28. MR B C NAGESH REDDY
AGED ABOUT 66 YEARS
SON OF SRI CHINNAPPA REDDY
RESIDING AT NO 256, 6TH CROSS
BEHIND THULASI THEATRE
MUNNEKOLALA EXTENSION
MARATHAHALLI POST
BANGALORE 560037
29. MR C RAJENDRA
AGED ABOUT 62 YEARS
SON OF MR CHINNAPPA REDDY
R/AT NO 57, DEVARABISANAHALLI
NEAR SREENIVASA MEDICALS
BANGALORE 560103
...RESPONDENTS
(BY SR. C.K. NANDA KUMAR, SENIOR COUNSEL FOR
SRI. RAGHURAM CADAMBI, ADVOCATE FOR R/R1 )
THIS MFA IS FILED UNDER ORDER 43 RULE 1(r) R/W
SECTION 151 OF CPC, AGAINST THE ORDER DATED
13.10.2023 PASSED ON I.A.NOS.1 AND 2/2023 IN
OS.NO.5628/2023 ON THE FILE OF THE XXII ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE, CCH-27, BENGALURU,
ALLOWING THE I.A.NO.1 AND 2 FILED UNDER ORDER 39 RULE
1 AND 2 R/W SECTION 151 OF CPC.
THESE APPEALS, COMING ON FOR ORDERS, THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
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MFA No. 7475 of 2023
C/W MFA No. 7670 of 2023
JUDGMENT
1. These two appeals are arising out of the common
order dated 13.10.2023 passed by XII Addl. City Civil
Judge, Bengaluru on I.A.Nos.1 and 2 filed under Order 39
Rule 1 and 2 of CPC in O.S.No.5628/2023. Hence, they are
clubbed together, heard and finally disposed of by this
common judgment.
2. For the sake of convenience, the parties are referred
to as per their ranking before the Trial Court in the suit.
3. MFA No.7475/2023 is filed by the appellants-
defendant Nos.8 to 16, 20, 22 to 24, 25 to 28, 30 and 31.
MFA No.7670/2023 is filed by the appellants-defendant
Nos.3, 4 and 5 challenging the order dated 13.10.2023
passed by XII Addl. City Civil Judge, Bengaluru on
I.A.Nos.1 and 2 filed under Order 39 Rule 1 and 2 of CPC
in O.S.No.5628/2023, whereby the Trial Court has allowed
the applications filed by the plaintiff.
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4. The plaintiff filed the suit i.e., O.S.No.5628/2023
before the Trial Court seeking for following reliefs:
A. Declare that the Deed of Cancellation of Joint
Development Agreement dated: 17.03.2022,
registered as Document No. BNS-1-18535-2021-22
before the Sub-Registrar, Banaswadi, is fraudulent,
illegal, and not binding on the plaintiff and the first
defendant;
B. Declare that the Joint Development Agreement
dated: 17.03.2022, registered as Document No.
BNS-1-18538-2021-22 before the Sub-Registrar,
Banaswadi, is fraudulent, illegal, and not binding on
the plaintiff and the first defendant;
C. Declare that the Deed of Revocation of General
Power of Attorney dated:17.03.2022, registered as
Document No.BNS-4-1079-2021-22 before the Sub-
Registrar, Banaswadi, is fraudulent, illegal, and
binding on the plaintiff and the first defendant;
D. Grant a decree of permanent injunction
restraining the second to fifth defendants from in any
manner interfering with the development of the
schedule Property by the plaintiff and the first
defendant in terms of the Joint Development
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Agreement dated: 11.01.2019 and General power of
Attorney dated: 11.01.2019.
E. Grant such other and further relief's as may be
just and necessary, including costs of the suit
5. Along with the plaint, the plaintiff filed I.A.No.1
under Order 39 Rule 1 and 2 of CPC seeking to restrain
the defendants, their partners, employees, henchmen or
any persons claiming through them from in any manner
selling, alienating, leasing or creating any third party
interest over the suit schedule 'A' to 'E' properties.
I.A.No.2 is filed under Order 39 Rule 1 and 2 of CPC
seeking to restrain the defendants, their partners,
employees, agents or any persons claiming through them
from in any manner altering the nature of the suit
schedule property, pending disposal of the suit. The
appellants herein had appeared before the Trial Court on
caveat. The Trial Court after hearing the plaintiff and
appellants herein, by impugned order dated 13.10.2023
allowed the said applications and restrained the defendant
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Nos.3 to 5 and 8 to 31 from putting up any construction in
the suit schedule property and also restrained them from
alienating in any manner or creating third party interest
over the suit schedule property, pending disposal of the
suit. Being aggrieved by the same, the present appeals
have been filed.
6. Mr.Dhyan Chinnappa, learned senior counsel
appearing for defendant Nos.8 to 16, 20, 22 to 24, 25 to
28, 30 and 31 and Mr.Uday Holla, learned senior counsel
appearing for defendant Nos.3 to 5 have raised the
following contentions:
a) The suit filed by the plaintiff is not maintainable.
Defendant No.1, Company has two Directors, namely,
plaintiff and defendant No.2. Plaintiff has only 22% share
in the company. The shareholder has right only to claim
the dividend. They have no right over the property of the
company. They contended that if there is any dispute
between the directors, shareholders or between the
company, the only remedy available is to approach the
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National Company Law Tribunal under Sections 241 and
242 of the Companies Act, 2013.
b) The defendant No.1, Company has entered into a
Joint Development Agreement (for short 'JDA') dated
11.01.2019 with the appellants in MFA No.7475/2023, who
are the landlords. The defendant No.1, Company has not
made any development in the property. The defendant
No.2, who is the Director of the defendant No.1, Company
and holding 78% share in the company, has entered into a
'Deed of Cancellation of JDA', dated 17.3.2022 with the
landlords to cancel the JDA dated 11.1.2019. Thereafter,
defendant No.3, Company has entered into JDA dated
17.3.2022 with the landlords and they have invested
huge amount for the development of the property and
they have also applied for obtaining plan approval from
the competent authority. They further contended that
defendant No.2, Company has no money for development
of the property. As per the Balance sheet available on
website, it is clear that the defendant No.1, Company has
no money to develop the property. The plaintiff has not
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made out any prima-facie case and the balance of
convenience also lies in favour of the appellants herein.
The Trial Court without considering the same, has erred in
allowing the applications.
c) In the applications filed by the plaintiff under Order
39 Rule 1 and 2 of CPC, specific allegation has been made
against defendant No.2, who is the Director of the
defendant No.1, Company. It is alleged that defendant
No.2 has played fraud on defendant No.1, Company and
also on the plaintiff. The Trial Court without issuing any
notice to defendant Nos.1 and 2, has passed the impugned
order and disposed of the applications filed by the plaintiff.
In support of their contentions, they have relied upon the
following decisions:
• ICP Investments (Mauritius) Ltd. -v- Uppal
Housing Pvt. Ltd. & Ors. (2019 SCC Online Delhi
12371)
• Bacha F. Guzdar -v- Commissioner of Income
Tax (AIR 1955 SC 74)
With the above contentions, they sought for allowing
the appeals.
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7. Mr.D.R.Ravishankar, learned senior counsel
appearing for defendant Nos.1 and 2 has raised following
contentions:
a) In the plaint, entire pleadings is related to allegations
against defendant No.2 that he has played fraud on the
company and by colluding with the landlords, he has
cancelled the JDA dated 11.1.2019. Even in the
applications filed by the plaintiff under Order 39 Rule 1
and 2 of CPC, the plaintiff has reiterated the plaint
averments regarding the allegation made against the
defendant No.2 that he has played fraud on the company.
The Trial Court has also given a finding that defendant
No.2 has played fraud on the defendant No.1, Company
and also on the plaintiff. This finding is given by the Trial
Court without giving any notice to defendant Nos.1 and 2.
Therefore, the impugned order is unsustainable.
b) The defendant No.2 is the Director of defendant
No.1, Company and he is holding major share in the
company. For the first time, certain documents i.e.,
Balance Sheet of the defendant No.1, Company has been
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placed before this Court to show that the defendant No.1,
Company has no money to develop the property and
therefore, as a Director of the company, defendant No.2
had cancelled the JDA dated 11.1.2019 vide 'Deed of
Cancellation of JDA', dated 17.3.2022 for the benefit of the
defendant No.1, Company.
c) Plaintiff is holding only 22% share in the company. If
the plaintiff has any grievance against the company or its
directors or the shareholders, his remedy is only before
the National Company Law Tribunal (for short 'NCLT') and
he is not entitled to maintain a suit.
With the above contentions, he sought for allowing
the appeals.
8. Mr.C.K.Nanda Kumar, learned senior counsel
appearing for plaintiff has raised the following counter
contentions:
a) The plaintiff filed the suit on behalf of him and the
defendant No.1, Company. Defendant No.2 is the Director
of the Company and he has played fraud against the
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company as well as on the plaintiff. By colluding with the
landlords and without any authority of law, defendant No.2
has cancelled the JDA dated 11.1.2019. Hence, he
contended that the cancellation of JDA dated 11.1.2019
vide 'Deed of Cancellation of JDA', dated 17.3.2022 and
entering into a second JDA dated 17.3.2022 with the
landlord has been challenged in the suit on the ground of
fraud. Therefore, his remedy is only before the Civil Court.
The NCLT cannot decide the allegation of fraud made
against the parties.
b) Initially, the defendant No.2 was the Director in
defendant No.1, Company and also in the defendant No.3,
Company. Later, he resigned from defendant No.3,
Company. The other Directors of defendant No.3,
Company are none other than his sons. To favour
defendant No.3, Company, defendant No.2 colluded with
the landlords and cancelled the JDA dated 11.1.2019.
Therefore, the plaintiff has filed the suit before the Trial
Court.
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c) Even though in the suit, the relief of injunction is
sought against all defendants, but the Trial Court has
granted injunction only against defendant No.3 to 5 and 8
to 31 and no injunction has been granted against
defendant Nos.1 and 2. Since defendant Nos.1 and 2 have
no grievance before this Court, they are not aggrieved
parties. He further contended that defendant Nos.1 and 2
have not filed any appeal before this Court challenging the
impugned order dated 13.10.2023 passed by the Trial
Court. Without challenging the said order, they cannot
contend before this Court that the finding given by the
Trial Court will affect their right and that they have not
been heard.
d) The appellants-defendants, for the first time, have
taken up a contention before this Court that defendant
No.1, Company is a loss making company and that the
company has no money to develop the property. There is
no any such contention or pleading raised before the Trial
Court.
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e) As per Section 242(e) of the Companies Act, 2013,
only the termination, setting aside or modification, of any
agreement entered into between the company and the
managing director, any other director or manger can be
challenged before the NCLT. In the case on hand, the
agreement in challenge is between the landlords and the
defendant No.3, Company. They are neither directors nor
shareholders of the company. Therefore, the plaintiff has
rightly approached the Civil Court. In support of his case,
he has relied upon the following decisions:
• Starlight Real Estate (ASCOT) Mauritius Limited
and Ors. -v- Jagriti Trade Services Ltd. And Ors. (AIR
2018 Cal 173)
• Nirad Amilal Mehta -v- Genelec Limited and
Ors. (2008 (6) Bom CR 499)
• Vijay Chhibber and Others -v- Delhi Gymkhana
Club Ltd. (2019 SCC Online Del 2010)
f) The applications filed by the defendants under Order
7 Rule 11 of CPC for rejection of plaint on the ground of
maintainability, has also been rejected by the Trial Court
and it has attained finality.
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g) After hearing the parties and considering the
materials available on record, the Trial Court has rightly
allowed the applications filed by the plaintiff and there is
no error in the impugned order.
With the above contentions, he sought for dismissal
of the appeals.
9. Heard the learned senior counsel for the parties.
Perused the impugned order, appeal papers and also
documents produced along with the appeal memo.
10. It is not in dispute that the defendant No.1, Company
has two Directors, namely, plaintiff and defendant No.2.
Plaintiff is holding 22% share and defendant No.2 is holding
78% share in the company. It is also not in dispute that
defendant No.1, Company had entered into JDA on
11.1.2019 with the defendants/appellants in MFA
7475/2023, who are landlords.
11. The case of the appellants/defendants is that after
the JDA dated 11.1.2019, the defendant No.1, Company
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has not developed the property. Defendant No.2, who is
the Director of the Company cancelled the said JDA dated
11.1.2019 vide 'Deed of Cancellation of JDA' on
17.3.2022. Thereafter, the defendant No.3, Company
entered into another JDA on 17.3.2022 with the appellants
in MFA No.7475/2023, who are the landlords.
12. The case of the plaintiff is that the cancellation of
the JDA dated 11.1.2019 by the defendant No.2 vide
'Deed of Cancellation of JDA' dated 17.3.2022, is without
authority of law. He has played fraud on the defendant
No.1, Company and also on the plaintiff. In order to favour
defendant Nos.3 to 5, he has illegally acted for
cancellation of the JDA dated 11.1.2019. Therefore, the
plaintiff has filed the suit.
13. Along with the appeal memo, the
appellants/defendants have produced the copy of the
plaint. I have gone through the same. The specific
pleading in the plaint is that the cancellation of JDA and
Deed of Revocation of Power of Attorney was neither
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brought to the notice of any key-Manager and nor to the
plaintiff for approval. Indeed, there is no approval of the
board resolution or shareholders resolution for such an
action. The defendant No.2 by playing fraud and to favour
defendant Nos.3 to 5, has cancelled the JDA.
14. Even the copy of the applications filed under Order
39 Rule 1 and 2 of CPC have also been produced along
with the appeal memo. I have gone through the same.
Similar allegations have been made against defendant
No.2 stating that he has played fraud on the defendant
No.1, Company and also on the plaintiff, and defendant
No.2 in order to favour defendant No.3 to 5, has cancelled
the JDA dated 11.1.2019. In the applications filed by the
plaintiff, injunction was sought against all the defendants.
15. The Trial Court while passing the impugned order
has not issued any notice to defendant Nos.1 and 2. The
appellants herein had appeared through their respective
counsel before the Trial Court on caveat. After hearing the
appellants herein and plaintiff, the Trial Court by
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impugned order has allowed the applications. I have
perused the impugned order. There is a clear finding by
the Trial Court in the impugned order that defendant No.2
has played fraud causing loss to the plaintiff, who has
infused huge fund and causing loss to the defendant No.1,
solely with intent to see the development of the company
of his sons. With his fraudulent act, he has cancelled the
JDA to favour defendant Nos.3 to 5.
16. The main ground on which the applications have
been allowed is on the ground that defendant No.2 has
played fraud. The Trial Court without issuing any notice to
defendant Nos.1 and 2 has passed the impugned order.
The impugned order is not an exparte injunction order.
Instead, the Tribunal has disposed of the applications after
hearing the appellants herein and plaintiff, but without
giving any opportunity to the defendant Nos.1 and 2
against whom, serious finding has been recorded by the
Trial Court.
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17. Under Order 43 Rule 1(r) of CPC, this Court has
discretionary power to pass any order, if it is required to
give justice to the parties, even though the affected
parties have not filed appeal before this Court. Since
serious allegations have been made against defendant
No.2 that he has played fraud on the company and also on
the plaintiff, I am of the opinion that defendant Nos.1 and
2 are necessary parties to be heard before passing the
final order on the applications filed under Order 39 Rule 1
and 2 of CPC.
18. Under these circumstances, I am of the opinion that
the matter requires to be remitted back to the Trial Court
for fresh consideration, after hearing the appellants
herein, plaintiff and defendant Nos.1 and 2. Hence, the
following order is passed:
ORDER
a) The appeals are allowed.
b) The impugned order dated 13.10.2023 passed by XII
Addl. City Civil Judge, Bengaluru, on I.A.Nos.1 and 2
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filed under Order 39 Rule 1 and 2 of CPC in
O.S.No.5628/2023, is set aside.
c) The matter is remitted back to the Trial Court with a
direction to the Trial Court to reconsider the
applications i.e., I.A.Nos.1 and 2 filed by the plaintiff
under Order 39 Rules 1 and 2 of CPC, afresh and in
accordance with law.
d) Parties are at liberty to move the Trial Court for pre-
poning the case.
e) Since defendant Nos.1 and 2 have appeared before
this Court through their counsel, they are directed to
appear before the Trial Court without awaiting for any
notice from the Trial Court.
f) It is made clear that the Trial Court after hearing the
parties shall pass appropriate orders in accordance with
law, without being influenced by any observations
made by this Court in this order.
Sd/-
JUDGE
DM
