Bala Srinivas Rao Namburi vs M/S Nsl Sugars Limited
2021 Latest Caselaw 1512 Tel

 THE HONOURABLE SRI JUSTICE M.S. RAMACHANDRA RAO

                                     AND
      HONOURABLE SRI JUSTICE T.AMARNATH GOUD

                 Civil Revision Petition No.481 of 2021

Between:

Bala Srinivas Rao Namburi,
S/o.Rama Sastrulu Namburi,
Aged : 44 years; Occ : Consultant,
R/o.H.No.1530, Pegasus - A, Meenakshi
Sky Lounge, Kothaguda, Hitechs Road,
Hyderabad.
                                             ...Petitioner / Defendant / Petitioner

                                      And

M/s. NSL Sugars Limited,
having its Corporate Office at
NSL Icon, 4th floor, D.No.8-2-684/2/A,
Road No.12, Banjara Hills, Hyderabad -
500 034, and having its registered office at
#60/1, 2nd Cross, Residency Road,
Bangalore - 560025, rep. by its
Authorised Signatory Mr. Y. Madhu Babu.
                                             ...Respondent / Plaintiff / Respondent

Date of Judgment pronounced on : 02.06.2021

HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO And HONOURABLE SRI JUSTICE T.AMARNATH GOUD

1. Whether Reporters of Local newspapers : Yes/No May be allowed to see the judgments?

2. Whether the copies of judgment may be marked : Yes to Law Reporters/Journals:

3. Whether His Lordships wishes to see the fair copy : Yes/No Of the Judgment?

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                                                                    crp_481_2021

THE HONOURABLE SRI JUSTICE M.S. RAMACHANDRA RAO AND

HONOURABLE SRI JUSTICE T.AMARNATH GOUD

Civil Revision Petition No.481 of 2021

% 02.06.2021

# Bala Srinivas Rao Namburi, S/o.Rama Sastrulu Namburi, Aged : 44 years; Occ : Consultant, R/o.H.No.1530, Pegasus - A, Meenakshi Sky Lounge, Kothaguda, Hitechs Road, Hyderabad.

...Petitioner / Defendant / Petitioner

And

$ M/s. NSL Sugars Limited, having its Corporate Office at NSL Icon, 4th floor, D.No.8-2-684/2/A, Road No.12, Banjara Hills, Hyderabad -

500 034, and having its registered office at #60/1, 2nd Cross, Residency Road, Bangalore - 560025, rep. by its Authorised Signatory Mr. Y. Madhu Babu.

...Respondent / Plaintiff / Respondent

< GIST:

> HEAD NOTE:

!Counsel for the Petitioner           :   Sri R. Sushanth Reddy

^Counsel for the respondent           : Sri A. Venkatesh

? Cases referred

1.      (2006) 3 SCC 634
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                                                              crp_481_2021

HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO AND HONOURABLE SRI JUSTICE T. AMARNATH GOUD

Civil Revision Petition No.481 of 2021

ORDER: (Per Hon'ble Sri Justice M.S. Ramachandra Rao)

This Civil Revision Petition is filed under Article 227 of the

Constitution of India challenging the order dt.19.01.2021 passed in

Interlocutory Application No.522 of 2020 in O.S.No.252 of 2020 on

the file of XXVI Additional Chief Judge, City Civil Court,

Hyderabad.

2. The petitioner in the Revision is defendant in the above suit.

The plea of the respondent/plaintiff in the plaint

3. The respondent / plaintiff filed the said suit against petitioner

for a perpetual injunction restraining petitioner from making false,

frivolous, defamatory and derogatory accusations and allegations

against it by way of and in the form of letters, representations, e-mails

and any other medium of communication.

4. In the above suit, it is the contention of respondent that it is a

Company incorporated under the Companies Act, 1956 having range

of business activities, and the petitioner who was its Chief Financial

Officer from 01.04.2017 to 12.04.2019, and who had signed a Non-

Disclosure Agreement dt.02.06.2017, was under an obligation to

maintain secrecy in respect of sensitive information relating to the ::4:: MSR,J & TA,J crp_481_2021

respondent-Company which would come to his knowledge during the

course of his employment.

5. It contended that it discovered that petitioner had committed

breach of trust and committed large-scale financial irregularities,

misappropriated crores of rupees of money belonging to respondent

and committed breach of trust, defrauded and cheated the respondent.

6. It contended that thereafter the respondent conducted a detailed

enquiry through an internal enquiry committee constituted on

05.04.2019 which gave a report on 16.04.2019 finding the petitioner

guilty of commission of financial irregularities and embezzlement of

funds to the tune of Rs.5.72 crores in the respondent-Company, and

also guilty of transmitting confidential data of the respondent to third

parties.

7. It also alleged that when the petitioner was questioned on

05.04.2019 by the said Committee, the petitioner admitted his guilt

and when asked to put the same in writing, he sent his resignation

through e-mail and left the respondent-Company.

8. It is contended that the audit committee of the Board of the

respondent and its sister concern conducted an internal enquiry and

also appointed a Chartered Accountant Firm by name Sagar and

Associates (Chartered Accountants) and got conducted special audits

of the respondent and its sister concern, and the said auditors have

also submitted a report on 17.04.2019.

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9. It alleged that it appointed a Retired District Sessions Judge as

an internal enquiry officer to conduct an unbiased domestic enquiry,

but the petitioner did not come forward to attend the said enquiry in

spite of being given ample opportunity and the enquiry officer

submitted enquiry report on 23.10.2019 holding the petitioner guilty

of misconduct and financial irregularities.

10. It contended that it lodged a police complaint on 18.04.2019

before the Banjara Hills Police Station, Hyderabad and an FIR

No.308/19 dt.19.04.2019 was also registered by the said police against

petitioner for offences under Sections 408 and 420 of I.P.C., and the

same was pending investigation.

11. It also stated that petitioner was arrested on 23.04.2019 and

remanded to judicial custody by the III Additional Chief Metropolitan

Magistrate, Hyderabad, and later the petitioner secured bail and got

released on 06.05.2019.

12. It also contended that petitioner committed similar offences in

the sister concern and another complaint dt.09.05.2019 was also filed

before the Banjara Hills Police Station, Hyderabad against the

petitioner, and since the police failed to register a case, a private

complaint was lodged before the III Additional Chief Metropolitan

Magistrate, Hyderabad, and the matter was referred under Section

156(3) Cr.P.C. to the Police Station, Banjara Hills to register an FIR

and investigate the matter; and subsequently, a Crime No.602/2019

dt.05.07.2019 for offences under Sections 406, 408 and 420 I.P.C.

were registered and a charge-sheet was also filed on 12.10.2019.

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13. Reference is also made to a complaint dt.18.05.2019 by the

respondent to the Dy. Secretary, Disciplinary Directorate, Institute of

Chartered Accountants of India against petitioner for fraud committed

by him, and also to a complaint dt.19.07.2019 before the Special

Judge for Economic Offences, Nampally, Hyderabad for the offences

under the penal provisions of the Companies Act and C.C.No.150 of

2019 being registered against petitioner.

14. Another C.C.No.11 of 2019 was registered against petitioner

on the basis of complaint dt.26.07.2019 filed by the sister concern of

the petitioner by the Special Judge for Economic Offences, Nampally,

Hyderabad.

15. Reference is also made to FIR No.581 of 2019 filed before the

Cyber Crime Police Station, C.C.S., Hyderabad against petitioner for

offences punishable under Section 66 R/w Section 43 of the

Information Technology Act, 2008.

16. It further contended that after having been found guilty of

committing various offences, the petitioner started employing black-

mailing tactics against the respondent with an intention to pressurize

the respondent to withdraw the cases, and the petitioner started

defaming the respondent, its promoters, Managing Directors and

Board Directors with a dishonest and mala fide intention to bring

down their reputation in the eyes of several Banks and Financial

Institutions and other public bodies, and it has also filed

CCSR.No.8185/2019 before the XII Additional Chief Metropolitan ::7:: MSR,J & TA,J crp_481_2021

Magistrate, Kukatpally, Hyderabad alleging that petitioner committed

offences under Sections 499 and 500 of I.P.C.

17. It further alleged that petitioner, with an intention of maligning

the reputation of the respondent-Company and its sister concern sent a

letter dt.27.06.2019 to the Central Vigilance Cell, Reserve Bank of

India alleging bank fraud, financial irregularities, various false

accusations, derogatory and defamatory allegations which were also

false, and petitioner also sent a letter dt.27.06.2019 to various

Government Bodies, Statutory Authorities and Public Offices with the

sole aim and intention of harassing and arm-twisting the respondent so

that the respondent would withdraw the cases and stop pursuing legal

remedies.

18. It also made a detailed reference to the contents of letter

dt.27.06.2019 written by petitioner against itself and its officials,

which was sent to the Dy. Director, Serious Fraud Investigation Office

(SFIO), to the Secretary, Ministry of Corporate Affairs, Government

of India, New Delhi, to the Regional Director and the Registrar of

Companies, Hyderabad, to the Deputy Commissioner of Income Tax,

Mangalore, and to the Superintendent of Central Bureau of

Investigation, Hyderabad, etc.

19. It also alleged that petitioner gave another letter dt.27.06.2019

to Commissioner of Hyderabad, GST Commissionerate, Hyderabad,

to Assistant Commissioner of Commercial Taxes (Koppa & Aland

Units), to Assistant Commissioner of GST and Central Excise,

Bhokardan, Jalna, and to the Regional Director, Corporate Bhavan, ::8:: MSR,J & TA,J crp_481_2021

R.R. District, Hyderabad making false and defamatory allegations

which were also scandalous and malicious.

20. It also referred to another letter dt.16.08.2019 written by

petitioner to the Central Vigilance Commission at New Delhi making

similar allegations and letter dt.15.08.2019 to the Secretary, NCALT

alleging fraud and financial irregularities committed by the

respondent.

21. It also referred to the letter dt.01.08.2019 written by petitioner

to the Director / Head, Banking Securities and Fraud, CBI, repeating

false allegations of alleged banking fraud and financial irregularities

said to have been committed by respondent, and other correspondence

addressed to C.B.I. and G.S.T. Authorities, C.B.C., etc.

22. It also contended that it had adopted a 'Whistle-Blower' Policy

in the 127th Board meeting held on 28.08.2014 and under the said

policy, the petitioner in his capacity as C.F.O. should have notified the

audit committee or the Board or the notified vigilance officer of the

respondent, but he did not do so, and it is therefore clear that

petitioner was not writing these letters with clean hands and it shows

that he is a bona fide Whistle-Blower.

23. It also alleged that the tactics adopted by petitioner to brow-beat

it and harass it was only to cover up his financial crimes committed

while in the service of respondent, and there was clearly ill-will and

antipathy against respondent since it had initiated criminal

proceedings against the petitioner; and the allegations contained in the ::9:: MSR,J & TA,J crp_481_2021

letters addressed by petitioner were false and defamatory with the sole

aim and intention of wrecking vengeance and harming the

respondents and to tarnish the reputation and goodwill of respondent,

which was built up over the past 20 years.

24. It therefore filed the suit in November, 2020 against petitioner

for a perpetual injunction restraining petitioner from making false,

frivolous, defamatory and derogatory accusations and allegations

against it by way of and in the letters, representations, e-mails and any

other medium of communication stating that unless such injunction is

granted, there is no way to stop the petitioner from tarnishing its

reputation.

IA No.522 of 2020 filed by petitioner under or.Vii Rule 11 CPC to reject plaint

25. Thereafter, petitioner filed Interlocutory Application No.522 of

2020 in O.S.No.252 of 2020 under Order VII Rule 11 of C.P.C. to

reject the plaint.

26. While defending his conduct during the employment as C.F.O.

with the respondent and his resignation on 12.04.2019, it is alleged

that the intention of respondent was to harass him by filing several

criminal cases and complaints against him. The petitioner insisted

that the financial records of the respondent-Company would disclose

the nature, scale and complexity of the fraud committed by the

respondent which requires investigation by specialized agency and so

he was justified in addressing letters to various agencies to unearth the

fraud committed by respondent.

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                                                             crp_481_2021

27. He then contended that the suit is barred by law under Section

41 of the Specific Relief Act, 1963 which directs that an injunction

cannot be granted to restrain any person from instituting or

prosecuting any proceeding in a criminal matters; that the plaint seeks

such injunction to restrain the petitioner from making defamatory

accusations against the respondent, Statutory Bodies, Government

Bodies, Public Officers; and so the plaint should be rejected by

applying Order VII Rule 11 (d) of C.P.C. read with Section 41 (d) of

the Specific Relief Act, 1963.

28. He also claimed that he is entitled to protection under the

Witness Protection Scheme, 2018. According to him, complaints

made to lawful authorities regarding offences committed by any

person cannot amount to defamation and they are protected by law.

29. He also contended that there is no cause of action to file the

suit, and on that ground also the plaint is also required to be rejected.

He alleged that unless all the investigations regarding the complaints

made by the petitioner against the respondent are dismissed by the

competent Courts, there is no cause of action to approach the Court

for grant of injunction.

The order dt.19.1.2021 in IA No.522 of 2020

30. By order dt.19.01.2021, the Court below dismissed the said I.A.

31. It held that the plaint disclosed a cause of action to file the

suit. There is no legal bar for filing the suit and the suit is within

limitation.

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32. It noted that the respondent in para no.4 of the plaint had

pleaded the definite cause of action for filing the suit, and the

petitioner's contention that the respondent would not get a cause of

action until the petitioners' letters are decided to be false, frivolous

would not apply to a suit for perpetual injunction.

The present CRP

33. Challenging the same, the present Civil Revision Petition is

filed.

34. Heard Sri R.Sushanth Reddy, counsel for petitioner, and

Sri A. Venkatesh, counsel for respondent.

35. The counsel for petitioner contended that the Court below erred

in rejecting Interlocutory Application No.522 of 2020 in O.S.No.252

of 2020 even though there is no cause of action to file the suit and the

suit is barred by limitation and there is a bar contained under Section

41(b) of the Specific Relief Act, 1963 to entertain the suit.

36. On the other hand, the counsel for respondent refuted the above

contentions and supported the order passed by the Court below.

37. As rightly held by the Court below, the bar under Section 41(b)

and (d) of the Specific Relief Act, 1963 for grant of injunction is only

to restrain any person from instituting or prosecuting any proceeding

in a Court not subordinate to that from which the injunction is sought

[Clause (b) of Section 41] or to restrain any person from instituting or

prosecuting any proceeding in a criminal matter [Clause (d) of Section

41].

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38. The respondent in the suit has not sought any restraint on

petitioner from instituting or prosecuting any proceeding in a Court

not subordinate to the XXVI Additional Chief Judge, City Civil Court,

Hyderabad where the suit was filed nor did he seek to restrain

petitioner from instituting or prosecuting any proceeding in a criminal

matter. Therefore, prima facie, the bar under Section 41(b) or (d) of

the Specific Relief Act, 1963 is not attracted.

39. Coming to the issue of cause of action which the petitioner

claims not to be in existence, in para no.IV of the plaint, the

respondent had explained in detail how there is cause of action for the

respondent to file the suit. Reference was made to petitioner's conduct

in addressing letters dt.27.06.2019 and 17.08.2019 to various Public

Institutions and Authorities. Therefore, it cannot be said that there was

cause of action to file the suit.

40. We do not agree with the contention of the petitioner that till

the correctness of the allegations leveled against the petitioner are

examined, the petitioner should be permitted to continue to make such

allegations damaging the reputation and goodwill of the respondent in

business circles.

41. Secondly, the plea of bar of limitation also cannot be

countenanced because for a suit for injunction the residuary Article

113 of the Limitation Act, 1963 would apply and the cause of action

for the said relief arises when the right to sue accrues and the ::13:: MSR,J & TA,J crp_481_2021

limitation period prescribed is 3 years from the date when such right

accrues (See Gunwantbhai Mulchand Shah vs. Anton Elis Farel1).

42. Therefore, taking into account the fact that letters were

addressed by petitioner to various authorities from June, 2019

onwards, the suit filed in November, 2020 cannot be said to be beyond

time.

43. In this view of the matter, we do not find any error of

jurisdiction in the order passed by the Court below refusing to reject

the plaint under Order VII Rule 11 C.P.C.

44. Accordingly, the Civil Revision Petition fails and it is

dismissed. No costs.

45. As a sequel, miscellaneous petitions pending if any in this

Revision, shall stand closed.

____________________________ M.S.RAMACHANDRA RAO, J

_____________________ T. AMARNATH GOUD, J

Date: 02.06.2020 LR Copy to be marked : Yes B/o.

Ndr

(2006) 3 SCC 634