Karnataka High Court
Samara India Advisors Private Limited vs Anand Kumar Panchapagesan on 19 February, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
-1-
NC: 2024:KHC:6858
WP No. 20517 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION No. 20517 OF 2023 (GM-CPC)
BETWEEN:
1. SAMARA INDIA ADVISORS PRIVATE LIMITED.,
A COMPANY REGISTERED UNDER THE
COMPANIES ACT, 1956
BEARING CIN U74140MH2006PTC332070,
HAVING ITS REGISTERED OFFICE AT LEVEL-18
BIRLA AURORA, DR. ANNIE BASANT ROAD,
WORLI, MUMBAI-400030.
REPRESENTED BY ITS AUTHORISED REPRESENTATIVE
MR. VIKRAM RANJAN AGARWAL.
...PETITIONER
(BY SRI C.K. NANDAKUMAR, SENIOR COUNSEL FOR
SRI P. CHINNAPPA, ADVOCATE)
AND:
Digitally signed
by VALLI
MARIMUTHU 1. ANAND KUMAR PANCHAPAGESAN,
Location: High S/O A. PANCHAPAGESAN,
Court of AGED 56 YEARS,
Karnataka
PROPRIETOR,
ASCENDIA STRATEGIC ADVISORY SERVICES,
HAVING OFFICE AT:
IF AKME HARMONY, AMBALIPURA,
BELLANDUR,
BENGALURU-560102.
2. BLUE BELLA INTEGRATED FACILTY SERVICES PRIVATE
LIMITED.,
(NOW AMALGAMATED INTO SMS INTEGRATED FACILITY
SERVICES PRIVATE LIMITED)
A COMPANY REGISTERED UNDER
-2-
NC: 2024:KHC:6858
WP No. 20517 of 2023
THE COMPANIES ACT, 1956
BEARING CIN U55101MH1996PTC303090
HAVING ITS REGISTERED OFFICE AT:
FL-203 COMPAQ, SECTOR 4, BUILDING 05,
MAHALAXMI NAGAR, NERE, PANVEL,
NAVI MUMBAI-410206.
REPRESENTED BY ITS DIRECTORS.
3. SMS INTEGRATED FACILITY SERVICES
PRIVATE LIMITED.,
(PREVIOUSLY KNOWN AS SANJAY MAINTENANCE
SERVICES PRIVATE LIMITED)
A COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
BEARING CIN U74999MH2000PTC125538,
HAVING ITS REGISTERED OFFICE AT :
FAIR MOUNT, UNITS No.2201 AND 2202
PLOTS NO.4, 5, AND 6, SECTOR 17,
SANPADA, NAVI MUMBAI-400705.
REPRESENTED BY ITS DIRECTORS.
4. JOLLY KOCHERY,
MAJOR IN AGE,
CHIEF EXECUTIVE OFFICER AND DIRECTOR,
SMS INTEGRATED FACILITY
SERVICES PRIVATE LIMITED,
HAVING OFFICE AT: KPT HOUSE,
PLOT NO.41/13,
SECTOR 30, VASHI,
NAVI MUMBAI-400703.
5. MATTHEW KOCHERY,
MAJOR IN AGE
DIRECTOR,
BLUE BELL INTEGRATED FACILITY SERVICES
R/AT 402-403, SEARS TOWERS,
GOTRI-SEVASI ROAD,
NEAR NARMADA CANCAL,
SEVASI, VADODARA,
GUJARAT-391101.
6. DORESWAMY PALANISWAMY,
MAJOR IN AGE
CHIEF FINANCIAL OFFICER AND DIRECTOR,
SMS INTEGRATED FACILITY
SERVICES PRIVATE LIMITED.,
-3-
NC: 2024:KHC:6858
WP No. 20517 of 2023
HAVING OFFICE AT KPT HOUSE,
PLOT NO.41/13, SECTOR 30,
VASHI, NAVI MUMBAI-400703.
...RESPONDENTS
(BY SRI CHINTAN CHINNAPPA, ADVOCATE FOR R1;
Vide order dated 02.02.2024 notice to
R2 To R6 is dispensed with)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE AND
QUASH THE IMPUGNED ORDER DATED 7.1.2023 PASSED BY THE
HONBLE LXXXIX ADDL. CITY CIVIL AND SESSIONS JUDGE
(COMMERCIAL COURT, CCH-90) AT BENGALURU ON IA NO.4 IN COM.
OS No. 309 OF 2018 (ANNEXURE-A), AND CONSEQUENTLY, ALLOW
IA No.4 FILED UNDER ORDER I RULE 10(2) READ WITH SECTION
151 OF THE CODE OF CIVIL PROCEDURE, 1908, THERE BY
DELETING/STRIKING OUT THE NAME OF THE PETITIONER FROM THE
ARRAY OF PARTIES IN COM. O.S. NO.309 OF 2018.
THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
This petition by defendant No.2 in Com. O.S.No.309/2018
is directed against the impugned order 07.01.2023 passed on
I.A.No.4 whereby, the application filed by the
petitioner/defendant No.2 under Order I Rule 10(2) of CPC
seeking deletion/striking out the name of the
petitioner/defendant No.2 from the array of parties to the suit
was rejected by the Trial Court.
2. Heard learned counsel for the petitioner and learned
counsel for respondent No.1.
NC: 2024:KHC:6858
3. A perusal of the material on record would indicate that
respondent No.1/plaintiff instituted the aforesaid suit against
the petitioner/defendant No.2 and other defendants seeking the
following reliefs;
" i) Directing the defendants to jointly and/or
severally pay the Plaintiff a sum of
Rs.4,19,00,000/- (Rupees Four Crores Nineteen
Lakhs only) along with interest at the rate of 18%
p.a. till the date of repayment.
ii) Permanent injunction restraining the
Defendant No.2 i.e. Samara Capital from making
any further investments in Defendant No.3 i.e. SMS
Integrated Facility Services Pvt. Ltd.
iii) Permanent injunction restraining the
Defendant No.3 i.e. SMS Integrated Facility
Services Pvt. Ltd. from acquiring/merging with the
Defendant No.1 i.e. Blue Bell or its business or
taking over the clients and contracts of the
Defendant No.1 i.e. Blue Bell through mutual
consent or otherwise.
iv) Permanent Injunction restraining the transfer
of any further shares of the Defendant No.3, either
directly or indirectly, to any third parties, including
but not limited to the Defendant Nos.1, 2, 4 to 6.
NC: 2024:KHC:6858
v) Grant any other appropriate relief(s) as this
Hon'ble Court may deem fit and proper in the
interests of justice and equity."
4. In addition to filing of written statement and contesting
the suit, petitioner/defendant No.2 filed the instant application
seeking deletion/striking out the name of the
petitioner/defendant No.2 from the array of parties to the suit
on various grounds and on the ground that the suit was not
maintainable as against the petitioner/defendant No.2 and as
such, the petitioner/defendant No.2 was neither a proper or
necessary party to the suit and no useful purpose would be
served by continuing the petitioner/defendant No.2 to remain in
the array of parties and the name of the petitioner/defendant
No.2 may be deleted/struck off from the array of parties to the
suit. The said application having been opposed by respondent
No.1/plaintiff, the Trial Court proceeded to pass the impugned
order rejecting the said I.A. by holding as under;
"REASONS
07. POINT No.1: The Defendant No.2 has filed IA No.4
under Order I Rule 10(2) read with section 151 CPC
praying the Court to strike out the name of Defendant
No.2 from the array of parties, in the interest of justice
and equity.
NC: 2024:KHC:6858
08. Mr.Vikram Agarwal, the CFO and Authorized signatory
of defendant No.2 has sworn to an affidavit in support of
IA.No.2. The present application is being filed to delete
his name from the array of parties as he is neither a
necessary nor a proper party to the present action. This
application has been made without prejudice to his rights
to file his written statement on the merits of the
captioned suit.
09. The plaintiff has filed the present suit alleging breach
of Letter of Engagement dated 01.10.2015 under which
the plaintiff was engaged by defendant No.1 as its
consultant to assist and advise it, inter alia, in respect of
attracting private equity investment for fund infusion into
defendant No.1. As per the agreement, in consideration of
the advisory/ consultancy services of the plaintiff, the
plaintiff would be entitled to receive payment of
professional fees by way of a monthly retainer fee and in
addition thereto a success fee if defendant No.1 received
funding from private equity investors and if defendant
No.1 successfully acquired target companies.
10. As per the averments in the Plaint, the defendant
No.2 has been sought to be made jointly and severally
liable towards the Plaintiff for breach of the terms of the
Agreement in as much as the Defendants changed the
investment structure in a manner so as to prevent the
Plaintiff from being paid his dues under the Agreement. In
furtherance of the aforesaid, the Plaintiff has sought the
following reliefs inter alia as against defendant No.2:
i. "Directing the Defendants to jointly and/or
severally pay Plaintiff INR 4,19,00,000/-
(Rupees Four Crores Nineteen Lakhs Only) with
interest at 18% pa till date of repayment along
with interest at the rate of 18% p.a. till the date
of repayment;
ii. ...permanent injunction restraining the
defendant No.2 i.e. Samara Capital from making
any further investments in Defendant No:3 i.e.
SMS Integrated Facility Services Pvt., Ltd.,
iii.
NC: 2024:KHC:6858
iv. Permanent injunction restraining
Defendant No.3 i.e SMS Integrated Facility
Services Pvt Ltd. their agents, servants or any
persons claiming through or under them in any
manner whatsoever whether directly/indirectly
from transferring any further shares of
Defendant No.3 to any third parties including
but not limited to Defendant Nos. 1,2, 4 to 6."
11. As elaborated hereinafter that the Plaint is manifestly
vexatious, merit less and does not disclose a clear right to
sue Defendant No.2 for want of cause of action. The
entire claim of the plaintiff is based upon the Agreement
which has been executed only between Defendant No.1
and the Plaintiff. Neither is Defendant No:2 is a party to
the said agreement nor has it accepted (whether
expressly or implidely) to be bound by any of the
obligations therein. Therefore, none of the provisions of
the Agreement are binding on Defendant No:2.
Accordingly, in the absence of privity of contract (whether
express or implied) between the Plaintiff and Defendant
No.2, the defendant No:2 cannot be held jointly/severally
liable towards the Plaintiff.
12. In order to overcome the aforesaid, the Plaintiff has
sought to create a cause of action against Defendant No:2
by alleging that (at paragraph 26 of the Plaint) that the
professional fees of the Plaintiff under the Agreement was
paid by Defendant No:3 at the behest of Defendant No:2
on 25 April 2017. Apart from this being an entirely
unsubstantiated bald averment, the documents on record,
as annexed to the plaint reveal that the plaintiff himself
raised the said invoice in the name of Defendant No.3 and
that the same was satisfied entirely by Defendant No:3.
13. In the circumstances of the present case, it is wholly
apparent that on a plain and meaningful reading of the
Plaint, the real grievance of the Plaintiff is clearly against
Defendant No:1 with whom it has executed the
agreement. Even the correspondence on record regarding
the payment of the professional fees of the Plaintiff in
accordance with the Agreement is preliminary between
the Plaintiff and Defendant No:4 (erstwhile MD of
Defendant No:1). Thus, it is evident that the filing of
present suit against defendant No:2 is entirely an abuse
of the process of the law and the same ought not be
NC: 2024:KHC:6858
condoned by the Court. No case has been made out by
the Plaintiff for the impleadment of Defendant No:2 in the
disputes between the Plaintiff and Defendant No:1.
Furthermore, defendant No:2 is neither a necessary nor a
proper property to the present proceedings and the
present suit is entirely misdirected towards Defendant
No.2.
14. The present application has been filed bona fide and
the balance of convenience lies in favor Defendant No:2
Grave prejudice will be caused to Defendant No:2 if the
present application is not allowed.
The summary of the objection filed by the plaintiff:
15. The Defendant Nos. 2, 3, 5 and 6 ("Applicants") have
filed near-identical applications seeking a common prayer
of being struck off from the array of parties, on the
ground that they are neither proper nor necessary parties
to the instant suit. Owing to the common averments
made by the said parties, the Plaintiff, for the sake of
brevity, prefers to file a consolidated statement of
objections.
16. At the outset, the applications preferred by the
Applicants are wholly mischievous and frivolous as the
same have been filed solely to delay adjudication of the
application for injunction. Further, the Applicants are
aware of the fact that they would be required to disclose
particulars of the transaction in their written statements
and during evidence and to avoid the said burden the
Applicants are attempting to be struck off from the array
of the parties. The applications ought to be dismissed in
limine.
17. The Plaintiff categorically denies all averments made
by the Applicants in their respective applications and the
affidavits accompanying them save and except what
forms a matter of record, or has been admitted by the
Plaintiff herein. The applications under reply are a result
of an apparent non- application of mind. The instant suit,
contrary to the averments of the Applicants is not one
merely for recovery of professional fees payable to the
Plaintiff from the defendant No.1 vides Letter of
Engagement dated 01 October 2015. For the sake clarity,
NC: 2024:KHC:6858
the prayers sought for in the plaint are extracted herein
below'.
i. Directing the Defendants to jointly and/or
severally the Plaintiff pay sum a of
Rs.4,19,00,000/- (Rupees Four Crores
Nineteen Lakhs only) along with interest at
the rate of 18% p.a. till the date of
repayment;
ii. Permanent Injunction restraining the
transfer of any further shares of the
Defendant No.3, either directly or indirectly,
to any third parties, including but not limited
to the Defendant Nos. 1, 2, 4 to 6;
iii. Permanent injunction restraining the
Defendant No.2 i.e. Sarnara Capital from
making any further investments in Defendant
No. 3 i.e. SMS Integrated Facility Services
Pvt. Ltd.
iv. Permanent injunction restraining the
Defendant No.3 i.e. SMS Integrated Facility
Services Pvt. Ltd. from acquiring/merging
with the Defendant No. 1 i.e. Blue Bell or its
business or taking over the clients and
contracts of the Defendant No. 1 i.e. Blue Bell
through mutual consent or otherwise;
V. Grant any other appropriate relief(s) as
this Hon'ble Court may deem fit and proper
in the interests of justice and equity."
18. From a reading of the aforementioned prayers, it is
apparent that the instant suit has a wider scope, contrary
to what the Applicants have attempted to make out in
their applications. The plaintiff has not only sought to
recover his fee from each of the Defendants but has also
claimed damages against each of them, jointly and/or
severally for causing the breach. Further, the plaintiff has
specifically sought to restrain the transfer of shares of the
Defendant No. 3 to any third parties, including but not
limited to the Defendant Nos. 1, 2, 4 to 6. The Plaintiff
has also sought for a specific prayer of permanent
injunction to restrain the Defendant No. 2 i.e. Samara
- 10 -
NC: 2024:KHC:6858
Capital from making any further investments in Defendant
No. 3 i.e. SMS Integrated Facility Services Pvt. Ltd and to
restrain the Defendant No. 3 i.e. SMS Integrated Facility
Services Pvt. Ltd from acquiring/merging with the
Defendant No. 1 i.e. Blue Bell or its business or taking
over the clients and contracts of the Defendant No. 1 i.e.
Blue Bell through mutual consent or otherwise. For the
aforementioned prayers to be granted, the Applicants
need to be parties and also participate in the suit. Hence,
they are proper and necessary parties.
19. It is the specific case of the Plaintiff that the
Defendants/Applicants have acted in concert so as to
circumvent and sideline him. The Defendants/ Applicants
have intentionally amended /restructured the transaction
in such a manner so as to bypass their obligations to the
plaintiff, though the Plaintiff was the catalyst for
transaction, which brought each of the parties together
Systematically setup for them. Each of the Applicants play
a key role in the transaction and the plaintiff's
involvement, efforts and contractual rights are well within
their knowledge. The role played by the Applicants in the
transaction is elucidated herein below:
Defendant No.2-
- The Defendant No. 2, Samara India
Advisors Pvt. Ltd., is the private equity firm
which was introduced by the Plaintiff to the
other Defendants.
In the transaction that is presently
contemplated the Defendant No. 2 will invest
(Sanjay Maintenance SMS) through its own
investment company Launcelot Holdings
-Certain payments made to the plaintiff were
by the Defendant No. 2 through Defendant
No. 3.
-The Defendant No.2 acted in concert with
the other Defendants to circumvent and
sideline the plaintiff.
Defendant No. 3:
- 11 -
NC: 2024:KHC:6858
The Defendant No.3, SMS Integrated Facility
Services Pvt. Ltd. (Previously Sanjay
Maintenance Services Pvt. Ltd.) is the target
company in the contemplated investment.
Defendant No.3 will be merged with
Defendant No. 1 company.
Defendant No.3 have common shareholders
and Directors with Defendant No. 1.
The Defendant No. 4 who was the Chief
Executive Officer of Defendant No. 1 (Blue
Bell Integrated) is also the Director of
Defendant No.3. The Defendant No.6 who
was the Chief Financial Officer of Defendant
No.1 (Blue Bell Integrated) is also the Chief
Financial Officer of Defendant No.3.
Certain payments made to the plaintiff were
by the Defendant No.2 through the
Defendant No.3.-
The Defendant No.2 acted in concert with the
other Defendants to circumvent and sideline
the plaintiff.
The Defendant No. 3 admits in its application
under reply (para 6) that the payment to the
plaintiff was made by it upon an invoice being
raised by the Plaintiff.
The Defendant No.5 (Matthew Kochery) was
the shareholder and Director/Promoter of the
Defendant No.1 company. The Defendant
No.5 is also the signatory of the Letter of
Engagement with the Plaintiff. The Defendant
No.5 was fully aware of the transaction
between the parties and the Plaintiff's
involvement. The Defendant No.5 continues
to play an active role in the investment
transaction and the merger between
Defendant No.3 and Defendant No.1
- 12 -
NC: 2024:KHC:6858
companies. The Defendant No.5 acted in
concert with the other Defendants to
circumvent and sideline the plaintiff. The
Defendant No.5 was and continues to be in
charge of the day to day operations of the
Defendant No.1 company.
Defendant No.6-
The Defendant No.6 (Doreswamy
Palaniswamy) was the Chief Financial Officer
of Defendant No.1 (Blue Bell Integrated) and
is also the Chief Financial Officer of
Defendant No.3. The Defendant No.6 was
fully aware of the transaction between the
parties and the Plaintiff's involvement. The
Defendant No.6 continues to play an active
role in the investment transaction of the
Defendants and the merger between
Defendant No.3 and Defendant No.1
companies. The Defendant No.6 acted in
concert with the other Defendants to
circumvent and sideline the plaintiff. The
Defendant No.6 was and continues to be in
charge of the day to day operations of the
Defendant No.1 and 3 companies.
20. It is not the case of the Plaintiff that the Applicants
herein are parties to the Letter of Engagement. However,
the Plaintiff has specifically averred that the Applicants
have acted in concert so as to induce a breach of the
Letter of Engagement. The Defendants have conspired
and intentionally withheld information regarding the
Aggregate Consideration and changed/restructured the
investment transaction with a view to avoid the
obligations under the Engagement Letter. This has caused
immense prejudice and irreparable injury to the Plaintiff.
Hence, the instant suit.
21. In view of the circumstances as disclosed above, the
application under reply may be dismissed with cost.
22. From the materials available on record it is clear that
the Plaintiff has specifically stated at paragraph No:26 of
the plaint that ... The first payment as a payment for the
initial Advisory Services rendered by the Plaintiff, and the
- 13 -
NC: 2024:KHC:6858
second payment would be for all the residual services
(Advisory and otherwise) rendered for the private equity
and the acquisition Transactions. On the belief that he
would be paid in full for the services rendered in terms of
the Engagement Letter, the Plaintiff raised an invoice on
the Defendant No.1 on April 03, 2017 for a sum of
Rs.40.25 lakhs. The said invoice was paid by the
Defendant No.2 through the Defendant No.3 (post
acquisition) on 25 April 2017." The plaintiff has furnished
copy of Invoice dated: April 03, 2017, Statement of Bank
Account, and TDS statement as per Document No:13, 14,
and 15 respectively.
23. The Plaintiff has initially sought for the following
reliefs as against defendant No:2:
ii. Permanent Injunction restraining the
transfer of any further shares of the
Defendant No. 3, either directly or indirectly,
to any third Parties, including but not limited
to the Defendant Nos. 1, 2, 4 to 6;
iii. Permanent injunction restraining the
Defendant No.2 i.e. Sarnara Capital from
making any further investments in Defendant
No. 3 i.e. SMS Integrated Facility Services
Pvt. Ltd.
24. In view of orders passed on IA No.9 dated 30.07.2022
the plaintiff has deleted defendant No.1 and
consequentially deleted plaint prayer No.ii. Permanent
Injunction restraining the transfer of any further shares of
the Defendant No. 3, either directly or indirectly, to any
third parties, including but not limited to the Defendant
Nos. 1, 2, 4 to 6;
25. The defendant No:2 has not refuted the averments
made and relief sought by the plaintiff against it by
placing cogent materials. The materials available on
record shows that the presence of defendant No:2 is very
much essential for the effective and complete adjudication
of the matter in dispute. I am of the opinion that the
defendant No:2 has not made out a case so as to
allow I.A.No:4. Accordingly, Point No. 1 is answered in the
NEGATIVE.
- 14 -
NC: 2024:KHC:6858
26. Point No.2: In view of the discussion made and
findings on Point No.1, I pass the following;
ORDER
IA No.4 filed by the defendant No:2 under
Order I Rule 10(2) r.w.s. 151 CPC is hereby
dismissed.
The parties are directed to bear their
respective costs.
5. Learned Senior counsel for the petitioner/defendant No.2
would submit that the impugned order is illegal, arbitrary and
contrary to the law laid down by the Delhi Court in the following
judgments;
i) Modicare Limited vs. Gautam Bali and
others [ 2019 SCC OnLine Del 10511];
ii) INOX Leisure Limited vs. PVR Limited
[MANU/DE/1062/2020].
6. Per contra, learned counsel for respondent No.1 submits
that there is no merit in the petition and the same is liable to
be dismissed.
7. A perusal of the material on record including impugned
order would indicate that the Trial Court has taken note of the
fact that there are certain averments by respondent
- 15 -
NC: 2024:KHC:6858
No.1/plaintiff against the petitioner/defendant No.2, which are
disputed by the petitioner/defendant No.2 which would require
adjudication only after full-fledged trial.
8. In my opinion and in the facts and circumstances of the
instant case, in particular, pleadings of the parties, rival
contentions, the questions/issues as to whether the
petitioner/defendant No.2 is a proper or necessary party and
whether the suit against the petitioner/defendant No.2 is
maintainable or not would necessarily have to be decided only
after full-fledged trial since the same involves mixed/disputed
questions of facts and law.
9. Under these circumstances, I am of the view that the
impugned order passed by the Trial Court cannot be said to
occasioned failure of justice warranting interference by this
Court in exercise of its jurisdiction under Article 227 of the
Constitution of India as held in the case of Radhey Shyam
and others vs. Chhabbi Nath and others 1.
(2015) 5 SCC 423
- 16 -
NC: 2024:KHC:6858
10. Hence, the following:
ORDER
i) Writ Petition is hereby disposed off without
interfering with the impugned order.
ii) All rival contentions on all aspects of the matter
including questions/issues as to whether the
petitioner/defendant No.2 is a proper or necessary
party and whether the suit against him is
maintainable or not are kept/left open to be decided
by the Trial Court and no opinion is expressed on
the same.
Sd/-
JUDGE
MV
