Orissa High Court
Pradeep Chandra Deo & Anr vs Union Of India & Ors. .... Opposite Party ... on 25 February, 2025
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 2811 of 2020
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
Pradeep Chandra Deo & Anr. .... Petitioner(s)
-versus-
Union of India & Ors. .... Opposite Party (s)
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr. S.K. Padhi, Sr. Adv.
along with his associates
Mr. Anindya Kumar Mishra, Adv.
For Opposite Party (s) : Mr. Gopal Jain, Sr. Adv.
along with associates
Mr. Manoj Ku. Mishra, Sr. Adv.
along with associates
Mr. Prasanna Kumar Parhi, DSGI,
Mr. Satya Sindhu Kashyap, CGC
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-12.02.2025
DATE OF JUDGMENT:-25.02.2025
Dr. S.K. Panigrahi, J.
1. The instant Writ Petition has been preferred under Article 226 of the
Constitution of India arraying several Government authorities, as well
as directors and shareholders of one M/s Bonai Industrial Company
Designation: AR-CUM- SR. SECRETARY
Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
Limited (BICO) (hereinafter, "the Company" or "Opp. Party No.8")
with a prayer inter alia as follows;
‚<.To issue rule NISI calling upon the opposite parties to
show cause as to why a Writ/Writs in the nature of the
Certiorari and/or Mandamus or any other Writs shall not be
issued quashing Annexure-26 of the Writ Petition and
directing the O.P. No.6, Serious Fraud Investigation Office, to
conduct an enquiry in the right earnest and if the Opposite
parties fail to show cause or show insufficient cause the
Hon'ble Court may further be pleased to make the said rule
absolute.‛
I. FACTUAL MATRIX OF THE CASE:
a) The case as sought to be canvassed by the Petitioners herein is that
they claim to be legal heirs of one Late Kumar Harishchandra Deo, who
is alleged to have 500 shares of the Company i.e. Opposite Party No. 8
M/s Bonai Industrial Company Limited (hereinafter referred to as the
"Company"). The said Late Kumar Harishchandra Deo is stated to
have died in the year 1970. The Petitioners i.e the alleged legal heirs
allege that Opposite Parties No. 9-15 herein have fraudulently usurped
the shares as well as the directorship of Late Kumar Harishchandra Deo
in the Opposite Party No. 8 Company.
b) The said Company was incorporated under the Indian Companies Act,
1913 on 06.10.1939. There were 9 registered shareholders in the
Company wherein Late Kumar Harish Chandra Deo was holding 500
shares from out of the total of 925 shares. In course of time, new Articles
of Association was adopted under the Companies Act, 1956 and at the
time of formation of the Company, there were three founder Directors.
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
It is contended that Late Kumar Harishchandra Deo having 500 shares
in the Company as one of the founder Directors of the Company had
never transferred or alienated his share/ shares in favour of any one at
any given point of time.
c) It is further stated that vide Special Resolution in the General Body
meeting held on 03.04.1959, the Ex-Ruler of Bonai had granted lease for
operation of certain iron and manganese ore mines. The mining
operations were being undertaken by the Company. At the time of
death of Late Kumar Harishchandra which took place on 8.05.1970 the
predecessor in interest of the Opp. Parties herein one Sita Ram Rungta
had already entered his name in all the officials records and documents
as the Director of the Company in substitution of Kumar Harishchandra
although he had never transferred or alienated his 500 shares which
was held in the Company. Thus, it is stated that inclusion of the name of
Opposite Parties No. 9-15 as the Directors of share holders of the
Company is wholly illegal, void, inoperative and based on false
representation. It has been further stated by the petitioners that taking
advantage of the difficulties of Late Harishchandra Deo an illegal
fraudulent board resolution carrying the date 17.03.1970 was apparently
filed before the mining authorities which listed others as the directors of
the company and that the name of Late Harishchandra Deo had been
surreptitiously removed as a director by this sham resolution.
d) The Petitioner alleges that they for the first time came to know about the
change in the ownership and capturing of the affairs and business of the
Company in the year, 2009 after the appointment of Shah Commission.
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
The Petitioners then searched for the documents and obtaining the same
from the Competent Authorities, came to know all about the fraud,
mischief etc. played by the Opp. Parties No 9 to 15.
e) It is further stated that the Petitioners received information from the
Directors of Mines as well as from the report of the Commission set up
in 2009 that these Opp. Parties No 9 to 15 and their predecessors in
interest by influencing various public authorities / functionaries have
fraudulently managed to get the name of Late Harishchandra as one of
the Directors substituted before the Registrar of Companies without his
consent.
f) The Petitioners further state that in order to unearth the fraud
committed, the petitioner and legal heirs of Late Harishchandra Deo
filed various RTI applications before the ROC, Cuttack. One such RTI
application was filed by one Anup Kumar Singh Deo (one of the
successors of Late Harishchandra Deo) with the office of the ROC on
21.08.2013 requesting information regarding the shares of Late
Harishchandra Deo. The CPIO of RoC cuttack replied stating that the
information sought is public in nature and may be accessed in the
official website under Section 610 of the Companies Act 1956 on
payment of fees. It also mentioned that the RTI applicant may approach
the concerned company for the required information. However no such
information was available on the website.
g) A show cause notice was issued by the ROC Cuttack to the Company
under Section 234 (1) of the Companies Act 1956 requiring the company
to furnish the certified copy of register of members, board's minute
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
book, name and addresses of the shareholders from 1965 till the date of
notice, copy of resolutions regarding allotment of shares, return of
allotment.
h) Thereafter, one Raj Krishna Singh Deo, one of the successors of the Late
Harishchandra Deo family filed another RTI application with the ROC,
Cuttack dated 13.12.2013 seeking copy of a reply filed by the company
and further steps taken by the ROC, in the event no reply was provided
by the company. However the ROC vide letter number ROC/ RBI/ 2014/
1629 dated 15.01.2014 rejected the same. Thereafter, the applicant filed
appeal against the rejection order and was allowed by the first appellate
authority vide order dated 25.08.2014 directing the CPIO to decide the
matter afresh keeping in view the provisions relating to third party
information and other applicable provisions. The CPIO office,
thereafter, issued a letter bearing number ROC/RBI/ 2014/ 3017 dated
15.01.2014 stating to the applicant that the office of the ROC has sought
the information from the company vide its letter dated 25.08.2014 to
which the company declined to furnish any information.
i) Similar RTI applications were filed by another member of the same
family one Pushpashree Devi with the office of the ROC, Cuttack on
11.06.2014 relating to the same transfer of shareholding of Late
Harishchandra Deo. The CPIO rejected the application vide letter
number ROC/ RTI/ 1025 dated 26.06.2014 following which the first
appellate authority allowed the appeal and directed the CPIO to
provide available information and dispose of the matter without any
further delay vide order dated 17th/ 18th September, 2014. The petitioner
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
states that the same order was not adhered to and the applicant had to
physically visit the ROC Cuttack on 18.12.2014 for inspection of public
documents of the company but the same was not available in the office
of the ROC Cuttack.
j) Subsequently, in order to bring the fraud to light the petitioners sought
for an inspection of the register of members and the annual returns in
terms of Section 163 of the Companies Act, 1956. The inspection were
sought to be conducted by one BR Patnaik, however, the company did
not allow the inspection.
k) The petitioners filed a representation before Opp. Party No.1 with a
prayer to direct, Opp. Party No.6 to investigate following which the
matter was referred to the Opp. Party No.6 to cause an inquiry into the
grievance petition. However the Opp. Party No.6 without conducting
any independent inquiry referred the matter to the ROC vide letter
dated 20.12.2017 for necessary action at their end.
l) The ROC, Odisha, vide letter ROC/ COMT/ 2018/3274 dated 16.01.2018
intimated to the petitioners that since matter similar to their complaint
dated 12.11.2017 and referred to it by SFIO has been dealt with earlier
no further investigation is warranted in the present case.
From a perusal of the pleadings in the present Writ Petition, it
seems that the Petitioners and others have approached authorities
including the Registrar of Companies (ROC) and the said Authority
which after application of mind seems to have arrived at a conclusion
that no illegalities as attributed are made out against the Opposite
Parties herein. It is this finding by the ROC which formed the
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
substratum of the grievance of the Petitioners herein. At least, on a
cursory reading of the Petition that is how the grievance has been
packaged, however, there is more to it than it meets the eye.
II. PETITIONERS' SUBMISSIONS:
2. Ld. Sr. Counsel S. K. Padhi appearing for the Petitioners contends that
through the present Writ Petition, the Petitioners have only sought for a
direction to Opp. Party No.6 to conduct an inquiry on the fraudulent
transfer of shares of Late Harishchandra Deo. He contended that all the
suits filed by some of the family members of the Petitioners were
dismissed only on the ground that the Civil Court did not have
jurisdiction to decide on the subject matters of dispute and the same
could only be raised before the appropriate authority under the
Companies Act, 2013. It is also contended that the family members of
Late Harishchandra Deo had the knowledge about the fraud only after
the appointment of the Shah Commission in the year 2009. Further, after
that they have approached several statutory authorities to uncover the
fraud. They have relied on various letters i.e. 13/14.8.2013 written to the
Registrar of Companies; letter dated 15.12.2014 to the Registrar of
Companies; 8.10.2012 to the Opp. Party No. 8 Company; letter dated
26.02.2010 to the Deputy Director of Mines and all of them seeking
various clarifications and information with regard to the change of
ownership of the Company. It was also submitted that the Petitioners
uncovered the fraud committed upon Late Harishchandra Deo vide
resolution dated 17.03.1970 by which he seems to have been removed
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
from the directorship of the company. It is this action primarily of
illegal share transfer of the said Late Harishchandra Deo which the
petitioners submit ought to be the subject matter of investigation by
serious fraud investigation office.
3. Thereafter, the Ld. Sr. Counsel further contended that the suit and all
the appeals emanating therefrom were primarily dismissed on the
ground that the Civil Court was not competent and did not have the
jurisdiction to decide the issues raised in the plaint and the same can be
prosecuted under the Companies Act, 2013.
4. Insofar as the civil suit by Anil Kumar Singh Deo is concerned, it has
been submitted that the ratio in the CMP 861 of 2016 and 1133 of 2016
preferred by the Company against the continuation of Civil Suit No. 18
of 2015 was that the suit had already become infructuous as the lease in
question had expired by efflux of time. It was also contended that SLP (
C) No. 19252 of 2022 arising out of the final judgement and order dated
10.03.2022 in CMP No. 861 of 2016 was dismissed as withdrawn giving
liberty to the petitioner. Thereafter, even in the review application that
was preferred by the petitioners was dismissed on technical grounds. It
is submitted that there has not been any suppression of facts by the
petitioners as some of these developments have taken place after filing
of the present petition, hence, the present petitioners they are not
required to disclose the same. Insofar as the public interest litigations
filed by third party strangers were concerned it was submitted that the
petitioners had no knowledge of the same and that they could not be
taken to task for the same. It is again submitted that the PILs were filed
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
by dubious persons and the Opp. Party No. 8 Company should not be
allowed to take advantage of the same to evade investigation of fraud as
alleged in the present petition. It has also been submitted that civil suits
filed by the other relatives of the petitioner have no bearing on the
present case and hence we are not required to be mentioned.
5. The Ld. Senior Counsel for the petitioner also relies on the response of
the Registrar of Company which while disposing of the impugned
order states ‚if you find aggrieved that the shares has been transferred
fraudulently you may approach the appropriate forum for redressal‛. It was
thus submitted that neither was there any suppression of facts nor were
the issues raised in the present petition barred by Res Judicata.
III. SUBMISSIONS BY OPPOSITE PARTIES
6. Heard Mr Gopal Jain, Senior Advocate and Mr Manoj Mishra Senior
Advocate appeared for Opposite Party No. 8, Ms. Gayatri Patra for
Opposite Party No 3 and Mr. Prasanna Ku. Parhi, DSGI and
Satyasindhu Kashyap for Opposite Party No. 1. The arguments that
have been advanced can be broadly divided into the following (a) The
petition is barred by huge delay and latches. (b) The petition in its
present form ought to be rejected at the threshold as the same
tantamount to an abuse of process of law as the petitioners are guilty of
having suppressed material facts, especially, the fact that multiple
petitions have been filed on the same subject matter and arising out of
the same cause of action which have been rejected in their challenge by
various Courts including this Court and the Hon'ble Supreme Court. (c)
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
The issues raised here between the same parties, same subject matter
and thus they are grossly barred by Res Judicata at the issues raised in
the present petition are in pith and substance the same as have already
been raised in the plaint and other proceedings.
IV. ISSUES FOR CONSIDERATION:
7. In view of the aforesaid discussion this Court proceeds to formulate the
following issues that fall for consideration. (A) Whether or not the
present petition is barred by delay and latches. (B) Whether or not the
present petitioners are guilty of suppression of material facts and
continuance of the present petition would tantamount to an abuse of
process of law. ( C) Whether the issues raised in the present petition are
barred by Res Judicata.
V. ANALYSIS:
(A) WHETHER OR NOT THE PRESENT PETITION IS BARRED BY
DELAY AND LATCHES.
8. The Petitioners herein have filed the present Writ Petition on 22.01.2020,
and have prayed for quashing of Annexure-26, which is dated
16.01.2018 i.e. after a lapse of more than 2 years of the said order so
impugned. The impugned order issued by the Registrar of Companies,
Cuttack states therein that similar typed of complaints have been
received by it earlier pursuant to which the office of regional director,
had carried out inspection under Section 209 of the Companies Act,
2013. It was stated therein that as the inspection has already been done
on similar complaints earlier, no further action was required to be taken
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
in the matter. Lastly, it was mentioned that in case the petitioner felt
aggrieved that the shares had been transferred fraudulently they may
approach the appropriate forum for a redressal.
9. Another contention raised is that the writ petition raises questions
which partake purely of a private law character and on that count also
the petition is not maintainable. The entire basis of the Petitioners' case
is that they claim to be legal heirs/ successors-in-interest of one Late
Kumar Harishchandra Deo, who is alleged to have held 500 shares and
was a 54% shareholder of the Company, and he died in 1970. The
Petitioners case is also that the predecessors-in-interest of the Opposite
Parties No. 9-15 have fraudulently usurped the shares / directorship of
the said Late Kumar Harishchandra Deo in the Opposite Party No. 8
Company. It is seen that the grievance arises out of letter dated
16.01.2018. The allegation made or the information sought for therein
relates to the alleged fraud conducted with regard to the illegal share
transfer of one Late Harishchandra Deo which admittedly occurred
prior to the year 1970. A bare perusal of this grievance shows that the
Petitioners' imaginary claim, is hopelessly barred by delay and laches,
inasmuch as the Late Kumar Harischandra Deo is stated to have died in
the year 1970, and the writ petition has been filed in the year 2020. Thus,
ex facie, the entire claim of alleged fraud, even if taken at face value, is
hopelessly barred by delay and laches as it is several decades old.
10. The Opp. Party No. 8 Company was formed being incorporated under
the Indian Companies Act, 1913 on 06.10.1939 having its registration
No.15-000246 of 1939-40. Therefore, the allegation of illegal constitution
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
of the OPP. Party no. 8 Company i.e., M/s BICO is not correct. None of
the authorities has ever found to be committing fraud by the Opp. Party
Nos.9 to 15. It is forthcoming from the response of the competent
authorities i.e. ROC that similar such other petitions have been filed
before and response thereto had already been given that no illegalities
had been found with regard to the allegations made. That being a case,
no interest of justice would be sub-served to flog a dead horse after the
efflux of 55 years. The substratum of the dispute relates to illegal share
transfer and the same has been litigated and reagitated time and again
and no useful purpose will be served in oppressing the opposite parties
herein. The only addition in the present petition is to create a "cause of
action" seems to be that certain RTI applications have been made by
various parties and no suitable response has been received with regard
to them which seems to be more like an afterthought which has been
introduced to create a fresh cause of action in order to make the present
petition maintainable.
11. Even otherwise the present petition raises disputed question of facts
thus a Writ Court not the appropriate remedy, especially given the fact
that the Companies Act is a self-contained Code and in relation to
matters therein, there is a specific bar from other Courts entertaining
pleas which are the subject matter of the said Act. However, in the
present scenario this Court deems it fit to go into other issues as well
and does not incline to reject the present petition on the ground of
maintainability alone.
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(B) WHETHER OR NOT THE PRESENT PETITIONERS ARE GUILTY
OF SUPPRESSION OF MATERIAL FACTS AND CONTINUANCE
OF THE PRESENT PETITION WOULD TANTAMOUNT TO AN
ABUSE OF PROCESS OF LAW.
12. In order to decide the present issue at hand, it is deemed appropriate to
first understand the backdrop of the other proceedings and the nature
of the challenge therein. It is even more relevant given the fact that there
is a commonality of the parties involved and that the subject matter
relates to a dispute with regard to the share transfer of Late
Harishchandra Deo. What is also required to be seen that while
invoking the Writ jurisdiction of this court whether the petitioners have
indeed suppressed any material facts as has been alleged vehemently by
the Ld. Counsels appearing for the opposite parties.
Civil Suit by Smt. Rajshree Devi (Sister of Petitioner No. 1)
13. The prayer urged by the Plaintiffs in CS No.18 of 2015 sought
declaration that (a) Late Kumar Harishchandra Deo had right, title and
interest over 500 share hold right in the Company (b) the plaintiff and
the defendant Nos.15 to 38 therein (which includes both the Petitioners
herein) have jointly acquired the right, title and interest in place of Late
Harishchandra Deo (c )partition of the shares amongst the plaintiff and
defendant Nos.15 to 38 (d) decree for permanent injunction be passed
restraining the defendant Nos.2 to 10 from exercising the right of
ownership over the operation and management of Company and ( e)
decree for grant of mesne profits
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
14. The array of parties shows that one Rajshree Devi is the Plaintiff.
Pradeep Chandra Deo (The Petitioner No.1 herein) is Defendant No. 15;
Bijay Laxmi Devi (The Petitioner No.2 herein) is Defendant No. 24. It is
pertinent to note at this juncture that both Petitioners Nos. 1 & 2 ought
to have disclosed such a material fact which involved a determination
of their rights and which was already in their knowledge as they were
actively participating and pursuing the suit and later on the appeals
therefrom. The said fact ought to have been placed on record in the
present Writ Petition which essentially bases the substratum of their
right to information based on the fact that they actually have a right to
own the shares in the company in question.
15. In the said suit Ld. Trial Court identified 4 broad grounds of challenge.
The first ground of challenge being whether the suit had been properly
valued or not. The second was whether the suit was the plaint was
liable to be rejected for mis-joinder and non-joinder of parties. The third
issue framed was whether the plaint should be rejected for non-
disclosure of the cause of action in the plaint. The fourth ground of
challenge was whether limitation being a mixed question of law and
fact could be considered in a petition under Order 7 Rule 11 of the CPC.
16. The Ld. Trial Court came to a finding that the suit was barred under
Clause (d) of Order 7 Rule 11 of the CPC and was therefore "barred by
law" to entertain such a plaint. It thus held that the same was a ground
for rejection of the plaint. The relevant portion of the finding of the Ld.
Trial Court is as follows;
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
‚Keeping in mind the ratios decided in the decisions
cited (supra) by the learned counsel for the Defendant No.1,
this court is of the considered view that the jurisdiction
initially vest with the Tribunal or Court under the Companies
Act but not with this Court under u/s 9 of the CPC.
Accordingly, the Court also holds that the present suit also
comes under the Clause (d) of Order 7 Rule 11 of the CPC
being barred by the Companies Act.‛
17. On the question of limitation, the Ld. Trial Court held that in the
pleadings itself the plaintiff had specifically averred that vide letter
dated 31.12.2009 he came to know about the alleged usurpation of
shares. The period of limitation even as per the case averred would start
to begin from the date of discovery i.e. 31.12.2009 and that the suit
ought to be filed within 3 years therefrom. Thus, the suit having been
filed in 2015 would be barred by limitation. Therefore having rendered
such findings the Ld. Trial Court proceeded to reject the Plaint of the
Plaintiffs under Order 7 Rule 11 of the CPC on 23.07.2015.
RFA 25 of 2015 (18.7.2022)
18. The aforesaid order dated 23.7.2015 passed in the Civil Suit was carried
in appeal in RFA 25 of 2015. The Ld. Court framed 7 issues to decide the
lis at hand. Out of the 7 issues, Issue No. (vi) and Issue No. (vii) were
decided in favour of the defendants therein. Issue No. (vi) dealt with the
question as to whether the plaint was barred by law and on that ground
it ought to be rejected under Order 7 Rule 11 of CPC. This issue was
dealt with in two parts. The first part being the issue of determination of
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
the date for the computation of limitation. The Ld. Court below
returned a finding that;
‚<.Scrutiny of the above said averments made in the plaint,
establish the fact that the plaintiff has clear and categorical
knowledge regarding the fraud alleged since 2.01.2010 on the
receipt of reply from the Director of the Company and that
admittedly the period of limitation being 3 years computed
from that day has already expired way back on 2.01.2013. But,
the present suit having been filed in the year 2015 is barred by
limitation and that issuance of legal notice on 8.05.2013 to
Defendant No. 1 and receipt of reply dated 24.8.2013 and
submission of Hon'ble Mr. Justice M.B. Shah Commission
Report in the month of October 2013 are not relevant for
computing the period of limitation.‛
19. The second part being the issue that the same was barred by law. It was
held that until the register of members of the suit company is suitably
rectified by the competent authority, the right, title and interest if any,
of the plaintiff over the 500 shares of Late Harish Chandra Deo could
not be decreed by the court. It was held that as the situation was
squarely covered under Section 59 of the Companies Act, 2013 and that
the jurisdiction of the civil court was ousted by law.
20. Lastly, qua Issue No. (vii) it was also held that the right of the plaintiff
to sue being barred by the law of limitation and the plaintiff had no
surviving cause of action to bring the suit. In view of the same, the
Addl. District Judge, Bonai vide order dated 18.07.2022 confirmed the
order passed by the Ld. Civil Judge (Senior Division) Bonai rejecting the
plaint in C.S. 18 of 2015 under Order 7 Rule 11 of the CPC.
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Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
21. This Court while entertaining an appeal under Section 100 of the CPC
which impugned the aforesaid order dated 18.07.2022 framed four
broad issues namely, as to whether (a) suit at the instance of plaintiff is
not maintainable; (b) suit is barred by limitation; ( c) the suit is barred
by law contained in Section 59 and 430 of the Companies Act, 2013 and
(d) suit as laid for reliefs claimed contravenes the provisions of Order 1
Rule 1 and 3 and also Rule 9 of the CPC. Having framed such issues for
determination this Court came to the conclusion that from a meaningful
reading of the plaint itself it is evident that the suit was barred by
limitation. It also came to a conclusion that such grievance as set out in
the plaint or at least sought to be made out thereunder, squarely comes
within the ambit of Section 59 of the Companies Act, 2013. It was
further held that in view of the provisions contained in Section 430 of
the Companies Act, 2013 the jurisdiction of the Civil Code stands ousted
and thus the rejection of plaint being barred by operation law was
justified. Resultantly, the appeal under Section 100 of the CPC was
dismissed by this court and the judgement and decree passed by the
Trial Court as well as the First Appellate Court were confirmed. As on
date, no appeal has been filed against the said Judgment dated
15.02.2023 and hence, the same has attended the finality and the
Petitioners have no right in law to the shares so claimed.
22. It is a pertinent to notice at this juncture that while the suit was decreed
on 23.7.2015 against the petitioners herein on and they had filed the
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Date: 28-Feb-2025 18:04:39
Writ Petition sometime in the year 2020. As on that date, at time of filing
of the present Writ Petition, they had no right over the shares in
question which had been decided against them. Such a material fact
where the petitioners themselves were parties ought to have been
brought to the notice of this Court. Non-disclosure of the same raises
grave doubts as to the bona fide of the present petitioners.
Civil Suit by Anil Kumar Singh Deo
23. Similarly another matter, relates to one of the purported legal heirs of
Late Kumar Harishchandra Deo, one Anil Kumar Singh Deo (who was
Defendant No.32 in Civil Suit No.18 of 2015) had approached the civil
court against the company and its directors in Civil Suit No. 02 of 2016
before the Court of Civil Judge (Sr. Division) Bonai, Sundargarh
wherein once again the same relief was sought on the same cause of
action. The same was challenged by the Company under Article 227 of
the Constitution against the continuation of the said Suit before this
Court being C.M.P. No.861/2016 & C.M.P.No.1133/2016. After hearing
the parties in C.M.P. No. 861/2016, this Court on 10.03.2022 dismissed
the suit as no more maintainable. Aggrieved by the order dated
10.03.2022 passed by this Court, the said Anil Kumar Singh Deo filed
SLP(C) No. 19252/2022 before the Supreme Court. On 11.11.2022, the
Petitioner therein sought permission to withdraw the said SLP with
permission to file a review before the High Court. Accordingly, the SLP
was dismissed as withdrawn on 11.11.2022 without expressing any
opinion on the maintainability of a review petition. Thereafter, a Review
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Petition No. 328 of 2022 was filed by said Anil Kumar Singh Deo against
the order dated 10.03.2022 passed in C.M.P. No. 861 of 2016. This Court
after hearing the parties, dismissed the Review Petition as an abuse of
process and imposed costs of Rs.20,000/- vide its judgment dated
31.07.2023. Still not satisfied, the Petitioner - Anil Kumar Singh Deo
preferred an SLP against the judgment / order dated 31.07.2023 before
the Supreme Court vide SLP (Civil) Diary No. 45079/2023 which was
also dismissed by the Supreme Court vide order dated 18.03.2024.
24. It thus appears that the litigation initiated by Anil Kumar Singh Deo,
one of the other purported legal heirs of Late Kumar Harishchandra
Deo was dismissed right up to the Supreme Court. The said litigation,
like the one initiated by Smt. Rajshree Devi, being initiated on the same
grounds and cause of action, has thus attained finality.
Earlier Writ Petition by Bijaylaxmi Deo (Petitioner No. 2 in the present
case)
25. In 2017 an earlier Writ Petition was filed by Smt. Bijaylaxmi Deo
(Petitioner No.2 in this petition) being W.P.(C) No. 9693/2017 before this
Court raising similar issues. The said Writ Petition was dismissed as
withdrawn vide this Court's order dated 09.10.2017 with a liberty to
approach such other appropriate authorities available in law for
redressal of grievances. The prayer in the said writ petition was to
restore the share of Late Harishchandra Deo in Opp. Party No. 8
Company who had 500 shares out of 950 shares which had been
fraudulently transferred to the Opp. Parties Nos. 6 to 12 therein and to
issue appropriate direction to induct the petitioner therein as a
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shareholder in the company as the successor in interest of Late
Harishchandra Deo. The declaration that has been made by the
petitioners herein is that ‚However the matter was before this Hon'ble Court
in of W.P. (C) No. 9693 of 2017, disposed of on 09/10/2017, and at the instance
of some other persons CMP No. 861 of 2016 and CMP NO. 1133 of 2016 are
pending before this Hon'ble court.‛
26. What is interesting to note at this juncture is that all the parties who
have been embroiled in litigation and has been discussed herein, are in
fact the third generation of the Late Harishchandra Deo and it is the
admitted case of the so called successors in interest that the change in
the constitution of the board of directors of the company had taken
place during the lifetime of the Late Harishchandra Deo and that his
children never litigated the same.
Convoluted History of vexatious Public Interest Litigations
27. While the matters stood thus, a spate of unscrupulous litigants sprang
into action which sought to rake up the issue of the transfer of
shareholding of the present Opp. Party No. 8 Company. One such PIL
being W.P. (C) PIL No. 16719 of 2020 had filed by 11 so-called PIL
Petitioners, being Rup Ranjan Panda &Or Vs. Union Of India &Ors.
before this Court.
28. It was pointed out during the course of the hearing that the contents of
the aforesaid PIL i.e. W.P. (C) PIL No. 16719 of 2020 and the present
W.P.(C). NO. 2811/2020 are almost identical, although Petitioners are
different. It was further pointed out that there were starking similarity
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in the Annexures in W.P.(C) PIL No. 16719 of 2020, and the instant Writ
Petition giving an identical character and that they even containing the
signature of Petitioner No.1 of the instant writ petition i.e. Pradeep
Chandra Deo even though he was not a petitioner in W.P. (C) PIL
No.16719 of 2020. These facts are hard for this Court to ignore as they
give rise to serious doubts as to the bona fide of the present Petitioners.
The aforesaid W.P. (C) PIL No. 16719 of 2020 was also dismissed as
withdrawn vide order dated 21.07.2020 passed by this Court.
29. Subsequently, another PIL being W.P. (C) PIL No.33158 of 2021 was
filed before this Court by 10 Petitioners being Ashribad Pattnaik & Ors.
Vs. Union Of India &Ors. The contents of the two PILs i.e. W.P. (C) PIL
No. 16719 of 2020 (by Rup Ranjan Panda &Ors.) & W.P. (C) PIL No.
33158 of 2021 (by AshirbadPattnaik&Ors.) were again almost identical,
although Petitioners were different.
30. This Court while noticing the same, and after hearing the Petitioners
dismissed the W.P. (C) PIL No. 33158 of 2021 citing it to be an abuse of
process with costs of Rs.50,000/- and cautioned the Advocate therein for
the Petitioner in the above PIL vide its Judgment dated 02.12.2021, the
concluding part of the judgment is as follows:
‚9. With the above observations, the present writ petition
stands dismissed.
10. We would have ordinarily observed something against the
counsel appearing in the case. However, keeping in view the
early stages of his career, we refrain from commenting upon
his conduct except to advise him to be careful in future and not
be a party to such a litigation initiated by unscrupulous
litigants.
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The Registry is also directed to stringently comply with the
rules as indicated hereinabove while dealing with Public
Interest Litigations so as to prevent valuable judicial time from
being wasted and prevent certain unscrupulous elements from
weaponizing petitions in courts of law.
11. We feel constrained to direct the petitioners (10 in number)
to deposit cost of Rs.5,000/- each (totaling Rs.50,000/-) before
the Orissa High Court Bar Association Advocates Welfare
Fund positively within four weeks from today, failing which
Collector, Keonjhar shall proceed to recover the same as arrears
of land revenue and ensure the deposit of the recovered amount
as stated hereabove.‛
31. Impugning the aforesaid judgment of this Court in the above PIL ,the
Petitioners therein preferred SLP(C)No.8637 of 2022 and Diary
No.12976 of 2022 before the Supreme Court which was pleased to
dismiss the above Petitions with cost of Rs.25,000/- on 9.09.2022.The
relevant portion of the order passed by the Supreme Court is as
follows;
‚Having heard senior counsel appearing on behalf of the
petitioners, we see no reason to entertain the Special Leave
Petitions. The High Court was entirely justified in coming to
the conclusion that the petition was filed after suppressing the
fact that an earlier petition filed by the same advocate had been
dismissed as withdrawn. The subsequent petition contains
substantially the same averments. The Special Leave Petitions
are an abuse of process. We accordingly dismiss the Special
Leave Petitions with costs quantified at Rs.25,000, which shall
be paid to the Supreme Court Bar Association within four
weeks.‛
(Emphasis Supplied)
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32. The next PIL being W.P. (C) PIL No. 1416 of 2021 was filed before this
Hon'ble Court by 14 Petitioners being Neelakantha Tripathy & Ors. Vs.
State of Odisha & Ors. Yet again the said PIL bore stark resemblance to
the earlier ones. The most glaring similarity being that annexures of
W.P. (C) PIL No. 16719 of 2020 and W.P. (C) PIL No. 1416 of 2021 are
entirely identical containing the signature of Petitioner No.1 of the
instant writ petition i.e. Pradeep Chandra Deo, even though he was not
a petitioner in either of the PILs.
33. This Court vide its order dated 22.09.2022 dismissed the Writ Petition
No.1416 of 2021 and IA No.12110 of 2022, again with cost of
Rs.1,40,000/-The relevant part of the judgment is as follows;
‚10. In the present case, while seeking permission to withdraw
the writ petition, the petitioners have prayed for liberty to file
fresh writ petition particularly when this Court vide Judgment
dated 2ndDecember, 2021 dismissed W.P.(C) No. 33158 of
2021 : AshirbadPattnaik and Others Vrs. Union of India and
Others, which is identical in nature with that of the present
case stands already dismissed. Such a liberty if granted would
be to invite and encourage unscrupulous busy bodies to
approach this Court. Time and again to espouse their own
hidden and motivated personal interest so this Court feels it
expedient in the interest of justice to impose at least nominal
costs to discourage filing of such petitions. Accordingly, the
Court directs the 14 petitioners to deposit a sum of Rs.10,000/-
per each Petitioner as costs (14 X Rs.10,000/- = Rs.1,40,000/-)
with the Orissa High Court Bar Association Advocates'
Welfare Fund positively within four weeks from today, failing
which the Secretary of the High Court Bar Association would
move an application before the Collector, Keonjhar, who shall
proceed to recover the same as arrears of land revenue and
ensure deposit of the recovered amount as stated above.
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11. In view of the above, the writ petition being W.P.(C)
No.1416 of 2021 and I.A. No. 12110 of 2022 are dismissed
with costs, as determined here above.‛
34. It is thus clear that the conduct of Petitioners in the instant writ petition
has been dubious and approached the court with unclean hands and
have sought to abuse of the process of law. And as such they cannot be
permitted to perpetuate an endless cycle of re-litigation on exactly the
same subject matter, more so by suppressing such material information.
35. The present Writ Petition raises issues that have already been
adjudicated upon multiple times by courts of competent jurisdiction, at
various stages, including the Hon'ble Supreme Court. Therefore, by
way of the present writ petition, the Petitioners are seeking to re-agitate
and re-litigate matters which already stand finally decided.
36. In fact, this Court cannot ignore the fact the Petitioners might be in
cahoots with other setup unscrupulous persons who have earlier
agitated the self-same issue guised as "public interest petitions".
Although a party is never precluded from raising genuine claims in
collusion with others are indulging in blatant forum-shopping and are
taking recourse to multiple parallel proceedings for the same subject
matter. It is well-settled that re-litigation of the same matter itself
amounts to an abuse of the process of law and ought to be nipped at the
bud.
37. It is shocking to note that some documents containing the signature of
Petitioner No. 1 forms part of the PILs referred to hereinabove. A
submission has been made that the pleadings in the instant Writ
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petition and annexures in W.P. (C) PIL No. 16719 of 2020, and the
instant writ petition are identical and some of the documents even
contain the signature of Petitioner No.1 of the instant Writ Petition i.e.
Pradeep Chandra Deo even though he was not a petitioner in W.P. (C)
PIL No.16719 of 2020. It is also submitted that the direction sought in
the present Writ Petition is similar to the ones sought in the PILs. It is
shocking that a litigant can dare not only suppress such material facts
from the courts but there seems to be a blatant disregard for the rule of
law. Time and again similar Writ Petitions are being filed successively
in this court where only the name of the petitioners are changed from
time to time and the pleadings are kept identical. This fact, in fact, has
been noted earlier by this court in its earlier orders in the PILs as
referred to herein above. This Court in the given factual backdrop is
constrained to hold that not only has there been a suppression of
material facts but, in fact, there are persons who seem to be relentless in
their pursuit to oppress Opposite Party No.8 company for reasons best
known to them. Such a fact cannot be lost sight of and is a matter of
grave concern and needs to be dealt with sternly.
38. Another contention raised by Mr Jain Ld. Sr. Counsel for the Opp. Party
No. 8 Company is that the Petitioner's reliance on the Report of the
Justice M.B. Shah Commission of Inquiry in the writ petition is also
completely misplaced, inasmuch as the said Report has been specifically
eschewed by the Supreme Court in its judgment dated 02.08.2017 in
W.P. (C) No. 114 of 2014 (Common Cause vs. Union of India) wherein,
the Supreme Court held that it would not stricto sensu rely on the Shah
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Commission Report, or base any of its conclusions on the Shah
Commission Report, in view of the fact that the Commission had not
complied with Sections 8B and 8C of the Commissions of Inquiry Act,
1952. This contention need not be gone into as the Petitioners only case
is that they came to know of the alleged illegal share transfer only upon
the formation of the Commission in 2009. Thus, it seems that the
reference to the formation of the commission has been done to justify
the starting point and cause of action in the litigation and nothing more.
39. In the case of Prestige Lights Ltd. v. SBI1 it was held that in exercising
power under Article 226 of the Constitution of India the High Court is
not just a court of law, but is also a court of equity and a person who
invokes the High Court's jurisdiction under Article 226 of the
Constitution is duty-bound to place all the facts before the Court
without any reservation. If there is suppression of material facts or
twisted facts have been placed before the High Court then it will be
fully justified in refusing to entertain a petition filed under Article 226
of the Constitution. This Court referred to the judgment of Scrutton, L.J.
in R. v. Kensington Income Tax Commissioners [(1917) 1 KB 486 (CA)] , and
observed: (Prestige Lights Ltd. case [(2007) 8 SCC 449] , SCC p. 462, para
35)
‚In exercising jurisdiction under Article 226 of the
Constitution, the High Court will always keep in mind the
conduct of the party who is invoking such jurisdiction. If the
applicant does not disclose full facts or suppresses relevant
materials or is otherwise guilty of misleading the court, then
(2007) 8 SCC 449
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the Court may dismiss the action without adjudicating the
matter on merits. The rule has been evolved in larger public
interest to deter unscrupulous litigants from abusing the
process of court by deceiving it. The very basis of the writ
jurisdiction rests in disclosure of true, complete and correct
facts. If the material facts are not candidly stated or are
suppressed or are distorted, the very functioning of the writ
courts would become impossible.‛
40. In the case of K.D. Sharma v. SAIL2 the Court held that the jurisdiction
of the Supreme Court under Article 32 and of the High Court under
Article 226 of the Constitution is extraordinary, equitable and
discretionary and it is imperative that the petitioner approaching the
writ court must come with clean hands and put forward all the facts
before the Court without concealing or suppressing anything and seek
an appropriate relief. If there is no candid disclosure of relevant and
material facts or the petitioner is guilty of misleading the Court, his
petition may be dismissed at the threshold without considering the
merits of the claim. The same rule was reiterated in G.
Jayashree v. Bhagwandas S. Patel3.
41. In the backdrop as narrated hereinabove this Court holds that the
Petitioners have dishonestly not disclosed the above material facts in
the present writ petition. The Petitioners have abused the process of law
by suppressing the aforesaid litigations. It is well-settled that writ
remedy is an equitable remedy and since the Petitioners have not
approached the court with clean hands it is appropriate that their
(2008) 12 SCC 481
(2009) 3 SCC 141
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challenge deserves to be rejected. The law on the subject is well settled
in a series of judgements of the Hon'ble Supreme Court in the cases of
Dalip Singh vs. State of U.P. &Ors4.; Officers Federation through its
President and Ors. vs. Union of India and Ors5; Kishore Samrite vs.
State of U.P. &Ors6. ; All India State Bank V. Chandrasekaran&Anr. vs.
The Administrative Officer &Ors7.; Amar Singh vs. Union of India
&Ors8..
(C) WHETHER THE ISSUES RAISED IN THE PRESENT PETITION
ARE BARRED BY RES JUDICATA/ CONSTRUCTIVE RES
JUDICATA:
42. The Hon'ble Supreme Court recently in the case of Celir LLP Vs Sumati
Prasad Bafna & Ors9 has exhaustively dealt with the principle of Res
Judciata/ Constructive Res Judicata and has propounded the
"Henderson principle" as a corollary of Constructive Res-Judicata. It is
therein been recognized that the is intrinsically tied to "issue estoppel"
and "cause of action estoppel". The relevant passages from the
aforesaid judgement dealing with the proposition make for profitable
and delightful reading. The relevant passages are extracted
hereinbelow;
‚135. The 'Henderson Principle' is a foundational doctrine in
common law that addresses the issue of multiplicity in
(2010) 2 SCC 114
(1990) 2 SCR 493)
(2013) 2 SCC 398
(2012) 10 SCR 603
(2011) 7 SCC 69
2024 SCC Online SC 3727
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litigation. It embodies the broader concept of procedural
fairness, abuse of process and judicial efficiency by mandating
that all claims and issues that could and ought to have been
raised in a previous litigation should not be relitigated in
subsequent proceedings. The extended form of res-
judicata more popularly known as 'Constructive Res Judicata'
contained in Section 11, Explanation VII of
the CPC originates from this principle.
136. In Henderson v. Henderson, [1843] 3 Hare 999, the
English Court of Chancery speaking through Sir James
Wigram, V.C. held that where a given matter becomes the
subject of litigation and the adjudication of a court of
competent jurisdiction, the parties so litigating are required to
bring forward their whole case. Once the litigation has been
adjudicated by a court of competent jurisdiction, the same
parties will not be permitted to reopen the lis in respect of
issues which might have been brought forward as part of the
subject in contest but were not, irrespective of whether the
same was due to any form of negligence, inadvertence,
accident or omission. It was further held, that principle of res
judicata applies not only to points upon which the Court was
called upon by the parties to adjudicate and pronounce a
judgment but to every possible or probable point or issue that
properly belonged to the subject of litigation and the parties
ought to have brought forward at the time. The relevant
observations read as under:--
‚‚In trying this question I believe I state the rule of the
Court correctly when I say that, where a given matter
becomes the subject of litigation in, and of adjudication
by, a Court of competent jurisdiction, the Court requires
the parties to that litigation to bring forward their whole
case, and will not (except under special circumstances)
permit the same parties to open the same subject of
litigation in respect of matter which might have been
brought forward as part of the subject in contest, but
which was not brought forward, only because they have,
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from negligence, inadvertence, or even accident, omitted
part of their case. The plea of res judicata applies, except
in special cases, not only to points upon which the Court
was actually required by the parties to form an opinion
and pronounce a judgment, but to every point which
properly belonged to the subject of litigation, and which
the parties, exercising reasonable diligence, might have
brought forward at the time. *<+‛‛
137. The above proposition of law came to be known as the
'Henderson Principle' and underwent significant evolution,
adapting to changing judicial landscapes and procedural
requirements. The House of Lords in Johnson v. Gore Wood &
Co, [2002] 2 A.C. 1, upon examining the 'Henderson
Principle' authoritatively approved it with the following
observations:--
(i) Lord Bingham of Cornhill integrated the principle
with the broader doctrine of abuse of process and held that
the bringing of a claim or the raising of a defence in later
proceedings which ought to have been raised earlier will
not always be hit by this principle, but rather will apply
where such point is sought to be raised as an additional or
collateral attack on a previous decision and the bringing
forth of such ground amounts to misusing or abusing the
process of the court or as a means for unjust harassment
of a party. The relevant observations read as under:--
‚‚Henderson v. Henderson abuse of process, as
now understood, although separate and distinct from
cause of action estoppel and issue estoppel, has much in
common with them. The underlying public interest is
the same : that there should be finality in litigation and
that a party should not be twice vexed in the same
matter. This public interest is reinforced by the current
emphasis on efficiency and economy in the conduct of
litigation, in the interests of the parties and the public
as a whole. The bringing of a claim or the raising of a
defence in later proceedings may, without more,
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amount to abuse if the court is satisfied (the onus being
on the party alleging abuse) that the claim or defence
should have been raised in the earlier proceedings if it
was to be raised at all. I would not accept that it is
necessary, before abuse may be found, to identify any
additional element such as a collateral attack on a
previous decision or some dishonesty, but where those
elements are present the later proceedings will be much
more obviously abusive, and there will rarely be a
finding of abuse unless the later proceeding involves
what the court regards as unjust harassment of a
party. It is, however, wrong to hold that because a
matter could have been raised in earlier proceedings it
should have been, so as to render the raising of it in
later proceedings necessarily abusive. That is to adopt
too dogmatic an approach to what should in my
opinion be a broad, merits-based judgment which takes
account of the public and private interests involved
and also takes account of all the facts of the
case, focusing attention on the crucial question
whether, in all the circumstances, a party is misusing
or abusing the process of the court by seeking to raise
before it the issue which could have been raised before.
As one cannot comprehensively list all possible forms
of abuse, so one cannot formulate any hard and fast
rule to determine whether, on given facts, abuse is to be
found or not *<+‛'
(ii) Lord Millett construing the Principle held that it
does not belong to the doctrine of res-judicata in the
strict sense but rather was analogous to the doctrine,
as it goes a step further to encompass even those
proceedings that either culminated into a settlement or
issues which had never been adjudicated previously in
order to protect the process of the court from abuse and
the defendant from oppression. The relevant
observations read as under:--
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'‚As the passages which I have emphasised indicate,
Sir James Wigram V-C did not consider that he was
laying down a new principle, but rather that he was
explaining the true extent of the existing plea of res
judicata. Thus he was careful to limit what he was
saying to cases which had proceeded to judgment, and
not, as in the present case, to an out of court
settlement. Later decisions have doubted the
correctness of treating the principle as an application of
the doctrine of res judicata, while describing it as an
extension of the doctrine or analogous to it < But
these various defences [res judicata, issue or cause of
action estoppel] are all designed to serve the same
purpose : to bring finality to litigation and avoid the
oppression of subjecting a defendant unnecessarily to
successive actions. While the exact relationship
between the principle expounded by Sir James Wigram
V-C and the defences of res judicata and cause of action
and issue estoppel may be obscure, I am inclined to
regard it as primarily an ancillary and salutary
principle necessary to protect the integrity of those
defences and prevent them from being deliberately or
inadvertently circumvented.
In one respect, however, the principle goes further than
the strict doctrine of res judicata or the formulation
adopted by Sir James Wigram V-C, for I agree that it is
capable of applying even where the first action
concluded in a settlement. Here it is necessary to
protect the integrity of the settlement and to prevent
the defendant from being misled into believing that he
was achieving a complete settlement of the matter in
dispute when an unsuspected part remained
outstanding.
However this may be, the difference to which I have
drawn attention is of critical importance. It is one
thing to refuse to allow a party to relitigate a question
which has already been decided; it is quite another to
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deny him the opportunity of litigating for the first time
a question which has not previously been adjudicated
upon. This latter (though not the former) is prima facie
a denial of the citizen's right of access to the court
conferred by the common law and guaranteed by article
6 < While, therefore, the doctrine of res judicata in all
its branches may properly be regarded as a rule of
substantive law, applicable in all save exceptional
circumstances, the doctrine now under consideration
can be no more than a procedural rule based on the
need to protect the process of the court from abuse and
the defendant from oppression *<+‛'
(Emphasis supplied)
138. In Virgin Atlantic Airways Ltd. v. Zodiac Seats UK
Ltd., [2014] A.C. 160 Lord Sumption JSC further expounded
the 'Henderson Principle' as although separate and distinct
from cause of action estoppel or res judicata yet having the
same underlying public interest that there should be finality in
litigation and that a party should not be twice vexed in the
same matter. The relevant observations read as under:--
'‚The principle in Henderson v. Henderson has always
been thought to be directed against the abuse of process
involved in seeking to raise in subsequent litigation
points which could and should have been raised before.
There was nothing controversial or new about this notion
when it was expressed by Lord Kilbrandon in the Yat
Tung case [1975] A.C. 581. The point has been taken up
in a large number of subsequent decisions, but for present
purposes it is enough to refer to the most important of
them, Johnson v. Gore-Wood & Co [2002] 2 A.C. 1, in
which the House of Lords considered their effect. This
appeal arose out of an application to strike out
proceedings on the ground that the plaintiffs claim should
have been made in an earlier action on the same subject
matter brought by a company under his control. Lord
Bingham of Cornhill took up the earlier suggestion of
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Lord Hailsham of St Marylebone LC in Vervaeke
(formerly Messina) v. Smith [1983] 1 A.C. 145, 157 that
the principle in Henderson v. Henderson was ‚both a rule
of public policy and an application of the law of res
judicata‛. He expressed his own view of the relationship
between the two at p. 31 as
follows: ‚Henderson v. Henderson abuse of process, as
now understood, although separate and distinct from
cause of action estoppel and issue estoppel, has much in
common with them. The underlying public interest is the
same : that there should be finality in litigation and that a
party should not be twice vexed in the same matter. This
public interest is reinforced by the current emphasis on
efficiency and economy in the conduct of litigation, in the
interests of the parties and the public as a whole‛.‛
(Emphasis supplied)
139. Even in a common law action it was said by Blackburn,
J.:‚I incline to think that the doctrine of res judicata applies to
all matters which existed at the time of giving of the judgment,
and which the party had an opportunity of bringing before the
Court.‛ *See : Newington v. Levy, [L.R.] 6 C.P. 180 (J)].
140. The fundamental policy of the law is that there must be
finality to litigation. Multiplicity of litigation benefits not the
litigants whose rights have been determined, but those who
seek to delay the enforcement of those rights and prevent them
from reaching the rightful beneficiaries of the adjudication.
The Henderson Principle, in the same manner as the principles
underlying res judicata, is intended to ensure that grounds of
attack or defence in litigation must be taken in one of the same
proceeding. A party which avoids doing so does it at its own
peril. In deciding as to whether a matter might have been
urged in the earlier proceedings, the court must ask itself as to
whether it could have been urged. In deciding whether the
matter ought to have been urged in the earlier proceedings, the
court will have due regard to the ambit of the earlier
proceedings and the nexus which the matter bears to the
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nature of the controversy. In holding that a matter ought to
have been taken as a ground of attack or defence in the earlier
proceedings, the court is indicating that the matter is of such a
nature and character and bears such a connection with the
controversy in the earlier case that the failure to raise it in that
proceeding would debar the party from agitating it in the
future. The doctrine itself is based on public policy flowing
from the age-old legal maxim interest reipublicae ut sit finis
litiumwhich means that in the interest of the State there
should be an end to litigation and no party ought to be vexed
twice in a litigation for one and the same cause.
141. The Henderson Principle was approvingly referred to and
applied by this Court in State of U.P. v. Nawab
Hussain, (1977) 2 SCC 806 as the underlying principle
for res-judicata and constructive res-judicata for assuring
finality to litigation. The relevant observations read as
under:--
‚‚3. The principle of estoppel per rem judicatam is a rule
of evidence. As has been stated
in Marginson v. Blackburn Borough Council [[1939] 2
K.B. 426 at p. 437+, it may be said to be ‚the broader rule
of evidence which prohibits the reassertion of a cause of
action‛. This doctrine is based on two theories : (i) the
finality and conclusiveness of judicial decisions for the
final termination of disputes in the general interest of the
community as a matter of public policy, and (ii) the
interest of the individual that he should be protected from
multiplication of litigation. It therefore serves not only a
public but also a private purpose by obstructing the
reopening of matters which have once been adjudicated
upon. It is thus not permissible to obtain a second
judgment for the same civil relief on the same cause of
action, for otherwise the spirit of contentiousness may
give rise to conflicting judgments of equal authority, lead
to multiplicity of actions and bring the administration of
justice into disrepute. It is the cause of action which gives
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rise to an action, and that is why it is necessary for the
courts to recognise that a cause of action which results in
a judgment must lose its identity and vitality and merge
in the judgment when pronounced. It cannot therefore
survive the judgment, or give rise to another cause of
action on the same facts. This is what is known as the
general principle of res judicata.
4. But it may be that the same set of facts may give rise to
two or more causes of action. If in such a case a person is
allowed to choose and sue upon one cause of action at one
time and to reserve the other for subsequent litigation,
that would aggravate the burden of litigation. Courts
have therefore treated such a course of action as an abuse
of its process and Somervell, L.J., has answered it as
follows in Greenhalgh v. Mallard [[1947] All ER 255 at
p. 257+:‚I think that on the authorities to which I will
refer it would be accurate to say that res judicata for this
purpose is not confined to the issues which the court is
actually asked to decide, but that it covers issues or facts
which are so clearly part of the subject-matter of the
litigation and so clearly could have been raised that it
would be an abuse of the process of the court to allow a
new proceeding to be started in respect of them.
This is therefore another and an equally necessary and
efficacious aspect of the same principle, for it helps in
raising the bar of res judicata by suitably construing the
general principle of subduing a cantankerous litigant.
That is why this other rule has some times been referred
to as constructive res judicata which, in reality, is an
aspect or amplification of the general principle.‛‛
(Emphasis supplied)
144. From the above exposition of law, it is clear that the
'Henderson Principle' is a core component of the broader
doctrine of abuse of process, aimed at enthusing in the parties
a sense of sanctity towards judicial adjudications and
determinations. It ensures that litigants are not subjected to
repetitive and vexatious legal challenges. At its core, the
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principle stipulates that all claims and issues that could and
should have been raised in an earlier proceeding are barred
from being raised in subsequent litigation, except in
exceptional circumstances. This rule not only supports the
finality of judgments but also underscores the ideals of judicial
propriety and fairness.
145. There are, four situations where in second proceedings
between the same parties doctrine res judicata as a corollary of
the principle of abuse of process may be invoked : (i) cause of
action estoppel, where the entirety of a decided cause of action
is sought to be relitigated; (ii) issue estoppel or, ‚decided issue
estoppel,‛ where an issue is sought to be relitigated which has
been raised and decided as a fundamental step in arriving at
the earlier judicial decision; (iii) extended or constructive res
judicata i.e., ‚unraised issue estoppel,‛ where an issue is
sought to be litigated which could, and should, have been
raised in a previous action but was not raised; (iv) a further
extension of the aforesaid to points not raised in relation to an
issue in the earlier decision, as opposed to issues not raised in
relation to the decision itself.
146. As part of the broader rule against abuse of process, the
Henderson principle is rooted in the idea of preventing the
judicial process from being exploited in any manner that tends
to undermine its integrity. This idea of preventing abuse of
judicial process is not confined to specific procedure rules, but
rather aligned to a broader purport of giving quietus to
litigation and finality to judicial decisions. The essence of this
rule is that litigation must be conducted in good faith, and
parties should not engage in procedural tactics that fragment
disputes, prolong litigation, or undermine the outcomes of
such litigation. It is not a rigid rule but rather a flexible
principle to prevent oppressive, unfair, or detrimental
litigation.
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149. Piecemeal litigation where issues are deliberately
fragmented across separate proceedings to gain an unfair
advantage is in itself a facet of abuse of process of law and
would also fall foul of this principle. Merely because one
proceeding initiated by a party differs in some aspects from
another proceeding or happens to be before a different forum,
will not make the subsequent proceeding distinct in nature
from the former, if the underlying subject matter or the
seminal issues involved remains substantially similar to each
other or connected to the earlier subject matter by a certain
degree, then such proceeding would tantamount to
'relitigating' and the Henderson Principle would be applicable.
150. Parties cannot be allowed to exploit procedural loopholes
and different foras to revisit the same matters they had
deliberately chosen not to pursue earlier. Thus, where a party
deliberately withholds certain claims or issues in one
proceeding with the intention to raise them in a subsequent
litigation disguised as a distinct or separate remedy or
proceeding from the initial one, such subsequent litigation will
also fall foul of this principle.
151. Similarly, where a plea or issue was raised in earlier
proceedings but later abandoned it is deemed waived and
cannot be relitigated in subsequent. Allowing such pleas to be
resurrected in later cases would not only undermine the
finality of judgments but also incentivize strategic behaviour,
where parties could withdraw claims in one case with the
intention of reintroducing them later. proceedings.
Abandonment signifies acquiescence, barring its
reconsideration in subsequent litigation. This ensures that
judicial processes are not misused for tactical advantage and
that litigants are held accountable for their procedural choices.
Parties must litigate diligently and in good faith, presenting
their entire case at the earliest opportunity.
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152. The Henderson principle operates on the broader contours
of judicial propriety and fairness, ensuring that the judicial
system remains an instrument of justice rather than a
platform for procedural manipulation. Judicial propriety
demands that courts maintain the finality and integrity of
their decisions, preventing repeated challenges to settled
matters. Once a matter has been adjudicated, it should not be
revisited unless exceptional circumstances warrant such
reconsideration. Repeated litigation of the same issue not only
wastes judicial resources but also subjects the opposing party
to unnecessary expense and harassment. judicial processes are
not merely technical mechanisms but are rooted in principles
of equity and justice.
153. Both logic and principle support the approach that the
judicial determination of an entire cause of action is in fact the
determination of every issue which is fundamental to
establishing the entire cause of action. Thus, the assertion that
the determination is only on one of the issues is flawed as it is
nothing but an indirect way of asserting that the whole
judgment is flawed and thereby relitigating the entire cause of
action once more. The effect of a judicial determination on an
entire cause of action is as if the court had made declarations
on each issue fundamental to the ultimate decision.‛
43. The Supreme Court in the case of Devilal Modi v. Sales Tax Officer,
Ratlam10, clarified and highlighted the need to extend rule of
constructive res judicata to writ proceedings. It was held that it would
not be open to the party to take one proceeding after another and urge
new grounds every time, and would be inconsistent with considerations
of public policy. The relevant observations read as under:--
AIR 1965 SC 1150
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‚8. *<+ the rule of constructive res judicata which is pleaded
against him in the present appeal is in a sense a somewhat
technical or artificial rule prescribed by the Code of Civil
Procedure. This rule postulates that if a plea could have been
taken by a party in a proceeding between him and his
opponent, he would not be permitted to take that plea against
the same party in a subsequent proceeding which is based on
the same cause of action; but basically, even this view is
founded on the same considerations of public policy, because if
the doctrine of constructive res judicata is not applied to writ
proceedings, it would be open to the party to take one
proceeding after another and urge new grounds every time;
and that plainly is inconsistent with considerations of public
policy *<+‛
44. In the case of Shankara Coop. Housing Society Ltd. v. M. Prabhakar11,
the Apex Court has held that the grounds which were available to the
parties to raise but did not raise it as one of the grounds, cannot be
raised later on and would be hit by the principles analogous to
constructive res judicata. The relevant observations read as under:--
‚89. In the present case, it is admitted fact that when the
contesting respondents filed WP No. 1051 of 1966, the ground
of non-compliance with statutory provision was very much
available to them, but for the reasons best known to them, they
did not raise it as one of the grounds while challenging the
Notification dated 11-12-1952 issued under the Evacuee
Property Act. In the subsequent writ petition filed in the year
1990, initially, they had not questioned the legality of the
notification, but raised it by filing an application, which is no
doubt true, allowed by the High Court. In our view, the High
Court was not justified in permitting the petitioners therein to
raise that ground and answer the same since the same is hit by
the principles analogous to constructive res judicata.‛
(2011) 5 SCC 607
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45. The Petitioner No. 2 herein who had petitioned this Court earlier could
have and ought to have relied upon the grounds with relation to the
applications made to the registrar of companies (between 2013 to 2015)
at the time of filing of that Writ Petition. After having not being done it
would be impermissible to allow the same petitioners to urge the said
facts which were otherwise had occurred at that point in time when that
prior Writ Petition had been filed. That being the case, the instant case is
squarely covered by the discussion here in above. The subsequent/
successive petition i.e. the present petition would be barred by the
principles of constructive res judicata by applying the "Hendersen
principle" as enunciated hereinabove.
46. From a conjoint reading of the aforesaid it emerges that both Petitioner
No. 1 and Petitioner No. 2 have tried their luck not only by way of civil
suits and appeals there from but also by filing a Writ Petition, with the
self-same prayer, before this court. In all these proceedings the
Petitioners have sought declaration of their legal rights which has
consistently been repelled by all the courts concerned on different
counts. That being stated, the common thread of the story has been kept
the same even in the present Writ Petition with the only addition being
that certain other persons have been introduced who are said to have
filed RTI applications and that the response to those applications has
been said to be unsatisfactory. It seems that the same has been done
only as a desperate measure to clutch on to the last straw available and
to somehow perpetuate this litigation endlessly. Whereas, in fact, from
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the records it emerges that all the applications in question have been
attended to as required by law by the competent authorities on different
instances and occasions. The substratum of the grievance still remains
that the petitioners are entitled to the shares of the Late Harishchandra
Deo even when more than half a dozen court order at various levels
have found to the contrary. It such scenarios which have to be dealt
with sternly and such Piecemeal litigation where issues are deliberately
fragmented, as a matter of concerted strategy, across separate
proceedings to gain an unfair advantage is in itself a facet of abuse of
process of law and would also fall foul of the Henderson Principle. In
Celir LLP (supra) it has been specifically held that merely because one
proceeding initiated by a party differs in some aspects from another
proceeding or happens to be before a different forum, will not make the
subsequent proceeding distinct in nature from the former, if the
underlying subject matter or the seminal issues involved remains
substantially similar to each other or even when connected to the earlier
subject matter by a certain degree. Such vexatious hydra headed
litigations deserve to be frowned and must be quelled.
VI. CONCLUSION:
47. In view of the discussion here in above this Court arrives at a clear and
unequivocal conclusion that the present Writ Petition is not only liable
to be dismissed at the very threshold on account of the principles
discussed and issues framed hereinabove. But also, on account of the
fact that the Petitioners have approached this court with unclean hands
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and the conduct of the petitioners herein leaves much to be desired.
This Court can only express hope that the petitioners will be well
advised not to indulge in such unbecoming practice of abusing the
process of law in the future.
48. Resultantly, the Writ Petition stands dismissed and all pending
applications are disposed of accordingly. The Petitioners are directed to
deposit a cost of Rs.20,000/- within 4 (four) weeks from today with the
Orissa High Court Bar Association Welfare Funds.
(Dr. S.K. Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 25th February, 2025
