advocatemmmohan

My photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

WELCOME TO MY LEGAL WORLD - FOR KNOWLEDGE IN LAW & FOR LEGAL OPINIONS - SHARE THIS

Saturday, August 9, 2014

Suit for Declaration , Mandatory Injunction and for accounts and permanent injunction against companies , firms and immovable properties of Hindu Joint family - Trial court granted interim injunction order for not to sale and directed to submit audit reports regularly before the court - High court dismissed the injunction order as the suit is not maintainable against company properties and firms( even though corporate veil was lifted in partition suits as per Apex court) and as the suit is bad for non-joinder of necessary parties and dismissed the I.A. stating that when the main relief can not be granted, no interim injunction should be given - Apex court held that we are of the opinion that while dealing with a matter relating to vacation of order of temporary injunction, it was not open for the High Court to give a finding on the main issue relating to maintainability of the suit and the family settlement reached between the parties. = CIVIL APPEAL NO. 7174 OF 2014 (Arising out of SLP(C) No.9914 of 2012) BABU LAL & ORS. … APPELLANTS VERSUS M/S VIJAY SOLVEX LTD. & ORS. … RESPONDENTS = 2014 -Aug.part – http://judis.nic.in/supremecourt/filename=41811

Suit for Declaration , Mandatory Injunction and for accounts and permanent injunction against companies , firms and immovable properties of  Hindu Joint family - Trial court granted interim injunction order for not to sale and directed to submit audit reports regularly before the court - High court dismissed the injunction order as the suit is not maintainable against company properties and firms( even though corporate veil was lifted in partition suits as per Apex court) and as the suit is bad  for non-joinder of necessary parties and dismissed the I.A. stating that when the main relief can not be granted, no interim injunction should be given - Apex court held that we are of the opinion that  while dealing  with  a  matter  relating  to  vacation  of  order   of   temporary injunction, it was not open for the High Court to  give  a  finding  on  the main  issue  relating  to  maintainability  of  the  suit  and  the   family settlement reached between the parties. =

Plaintiffs/appellants-Babulal  and   others   filed   a   suit   for
declaration, mandatory  injunction,  rendition  of  accounts  and  permanent
injunction against the defendants/non-applicants =
Interim Injunction
 Resultantly,  the  application  of  the  plaintiffs-
appellants for temporary  injunction  against  the  non-applicants  and  the
counter temporary  injunction  application  filed  on  behalf  of  the  non-
applicants were partly allowed and it was ordered that till the decision  of
the original suit:-
1. The applicants and non-applicants  no.1  to  31  and  the  non-applicants
no.36 to 43 shall not sell/transfer the immovable  properties  as  mentioned
in Schedule “Ka” to “Cha” and nor shall they create any  substantial  charge
on the said properties.
2.    The Companies/Partnership firms controlled and run by the  parties  of
which the details have been given in Schedule “Ka” to “Cha”  regarding  them
the  audited  accounts  of  income  and  expenditure  half   yearly/annually
whichever is got done in the normal sequence shall be presented before  this
Court.
Apart from this the other prayers which have been made  by  both  the
parties are rejected. =
Reliance Natural Resources Ltd. v. Reliance Industries Ltd. (2010) 7  SCC  1
and in the case of Sangram Singh P. Gaekwad  and  others  v.  Shantadevi  P.
Gaekwad (D) Through LRs. & Ors. (2005) 11 SCC 314 and submitted that  though
a company incorporated under the Companies  Act  is  a  body  corporate,  in
certain situations, its corporate veil can be lifted and that the  suit  for
partition could be filed against companies also.
C.M.A.
    The High Court by impugned judgment and order dated 14th  March,  2012
observed as follows:
”6………It is also significant to note that the plaintiffs have  impleaded  the
companies, partnership firms and proprietary concerns and HUFs as the  party
defendants, and the said companies and firms have also  been  shown  as  the
properties or the assets of the HUF in the schedule  'Gha'  annexed  to  the
plaint.
This court fails to understand as to how  the  companies  which  are
incorporated under the Companies Act  having  perpetual  seal  and  separate
entity could be the assets of the HUF as alleged by the  plaintiffs  and  as
to how the companies could  be  divided  by  metes  and  bounds  by  way  of
partition as prayed for in the suit.
The plaintiffs in the  suit  have  also
prayed for mandatory injunction seeking  direction  against  the  defendant-
companies alongwith other defendants to  act  upon  the  family  settlement,
alleged to have taken place on 20.12.2007  between  the  Niranjan  Lal  Data
Group and Babu Lal Data Group, and have also sought  the  direction  against
the said companies to execute the documents and handover the  possession  of
the properties of the said companies and firms etc.
This  court  also  fails
to understand as to how the alleged family settlement between the NLD  Group
and BLD Group would be binding to the defendant companies and  firms,  apart
from the issue as to whether the alleged document dated 20.12.2007 could  be
called a family settlement.
Under the circumstances this  court  finds  much
substance in the submission made by the learned counsel for  the  appellants
that the suit filed by the plaintiffs is not only  bad  for  mis-joinder  of
parties and of causes of action,  but  also  for  non-joinder  of  necessary
parties and that the suit in the present form would not be  maintainable  in
the eye of law.

7.    So far  as  merits  of  the  case  are  concerned,  according  to  the
respondents-plaintiffs, all the properties mentioned in the  Schedules  'Ka'
to 'Chha' annexed to the plaint, were purchased  from  the  nucleus  of  the
joint family properties, and as per the family  settlement  dated  20.12.07,
the said properties were required to be divided amongst the  family  members
of the plaintiff No. 1 and the defendant Nos.1 to 9.
In this regard,  it  is
pertinent to note that the entire suit of the plaintiffs is based on the so-
called family settlement which had allegedly taken  place  between  the  NLD
group and BLD group on 20.12.07.
From the bare perusal of the said  document
it transpires that it is the minutes of the meeting  of  Data  Group  Family
dated 20.12.07, which was signed by Mr. Vijay Data for  NLD  Group  and  Mr.
Babu Lal Data for BLD Group. Apart  from  the  fact  that  there  is  not  a
whisper in the said document that the corpus of the companies  mentioned  in
the said document was provided by the  HUF  or  that  the  other  properties
mentioned in the said document were the HUF properties,  the  said  document
has also not been signed by the other coparceners of the alleged HUF  except
by Mr. Vijay Data and Mr. Babu Lal Data.
Such a document by  no  stretch  of
imagination could be said to be a family settlement. However, even if it  is
believed to be a family settlement, and even if it is  held  that  the  same
was not required to be signed by all the coparceners,  then  also  there  is
nothing on the record to suggest that it was  a  memorandum  prepared  after
the family arrangement which had already been made earlier, not required  to
be registered. ………….

“9.   In this regard it is pertinent  to  note  that  though  the  concerned
defendants had raised contentious issues as regards the  maintainability  of
the suit, mis-joinder of parties and of causes  of  action,  suppression  of
material facts by the plaintiffs etc., the lower court  has  not  considered
the same and has held that the plaintiffs had established  the  prima  facie
case in their favour.
In the opinion of this court such  a  finding  of  the
lower court in the impugned order is not only erroneous but  also  perverse.
When the suit on the face of it suffered from  the  mis-joinder  of  parties
and of causes of action and was not prima facie tenable in the eye  of  law,
the lower court has committed serious error of  law  and  facts  in  holding
that the plaintiffs had established a prima facie case.
If  the  plaintiffs
were not entitled to the final reliefs  in  the  suit,  they  could  not  be
granted temporary injunction as  prayed  for  during  the  pendency  of  the
suit.”
Apex court held that
we are of the opinion that  while
dealing  with  a  matter  relating  to  vacation  of  order   of   temporary
injunction, it was not open for the High Court to  give  a  finding  on  the
main  issue  relating  to  maintainability  of  the  suit  and  the   family
settlement reached between the parties.
8.    In view of the finding aforesaid, we are inclined  to  interfere  with
the judgment and order dated 14th March, 2012 passed by the  High  Court  of
Judicature for Rajasthan,  Bench  at  Jaipur  in  S.B.  Civil  Misc.  Appeal
No.2218 of 2011 etc. We, accordingly, set aside the  impugned  judgment  and
remit back the matter to the  High  Court  for  its  fresh  disposal   after
hearing the parties.

2014 -Aug.part – http://judis.nic.in/supremecourt/filename=41811


                                                        REPORTABLE


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 7174 OF 2014
                   (Arising out of SLP(C) No.9914 of 2012)

BABU LAL & ORS.                              … APPELLANTS

                                   VERSUS

M/S VIJAY SOLVEX LTD. & ORS.                 … RESPONDENTS

                                    WITH

C.A. NO.7175 OF 2014 (@ SLP(C)No.10363/2012)

C.A. NOs.7195-7201 OF 2014 (@ SLP(C)Nos.18158-18164/2012)

C.A. NO.7177 OF 2014 (@ SLP(C)No.18420/2012)


                               J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J.


      Leave granted.
2.    In these appeals the appellants have challenged  the  common  judgment
and order dated 14th March, 2012 passed by the High Court of Judicature  for
Rajasthan, Bench at Jaipur in S.B. Civil Misc. Appeal No. 2218 of 2011  etc.
 By the impugned judgment, the High Court modified the interim  order  dated
10th February, 2011 passed by the  Additional  District  Judge  No.3  Jaipur
Metropolitan Magistrate, Jaipur (hereinafter referred  to  as,   “the  Lower
Court”)  in  Civil        Misc. Case No.36/2010,  whereby  the  Lower  Court
partly  allowed  the  application  of  the  appellants-original   plaintiffs
seeking temporary injunction under Order XXXIX Rule 1,2  of  CPC.  The  High
Court  set  aside  the   temporary   injunction   granted   in   favour   of
plaintiffs/appellants by the Lower Court and  confirmed  that  part  of  the
order  requiring   production   of   audited/unaudited   accounts   of   the
companies/partnership firms run by the parties.
3.    The present appeals arise from the following sequence of facts.
        Plaintiffs/appellants-Babulal  and   others   filed   a   suit   for
declaration, mandatory  injunction,  rendition  of  accounts  and  permanent
injunction against the defendants/non-applicants. The  Lower  Court  noticed
that the properties which the plaintiffs presented in the Schedules “Ka”  to
“Cha” are basically immovable properties, companies  and  partnership  firms
regarding which  both  the  parties  have  claimed  ownership.  Taking  into
consideration that the dispute between the  parties  has  arisen  after  the
year 2007 and the cases are pending before the Company Law Board  and  if  a
restraint is not imposed upon the transfer of the  aforesaid  properties  it
will lead to multiplicity of litigation and the  parties  will  entangle  in
litigation, the Lower Court observed that  plaintiffs/appellants  have  made
out partially a prima facie case and held  that  the  issue  of  balance  of
convenience   and    irreparable    loss    are    in    favour    of    the
plaintiffs/appellants.  Resultantly,  the  application  of  the  plaintiffs-
appellants for temporary  injunction  against  the  non-applicants  and  the
counter temporary  injunction  application  filed  on  behalf  of  the  non-
applicants were partly allowed and it was ordered that till the decision  of
the original suit:-
1. The applicants and non-applicants  no.1  to  31  and  the  non-applicants
no.36 to 43 shall not sell/transfer the immovable  properties  as  mentioned
in Schedule “Ka” to “Cha” and nor shall they create any  substantial  charge
on the said properties.
2.    The Companies/Partnership firms controlled and run by the  parties  of
which the details have been given in Schedule “Ka” to “Cha”  regarding  them
the  audited  accounts  of  income  and  expenditure  half   yearly/annually
whichever is got done in the normal sequence shall be presented before  this
Court. Apart from this the other prayers which have been made  by  both  the
parties are rejected.

4.    The non-applicants preferred different miscellaneous  appeals  against
the aforesaid interim order of injunction before the High  Court.  The  non-
applicants-respondents herein made the following submissions:
(a) The suit of the plaintiffs in the present form is  not  maintainable  in
the eyes of law, inasmuch as it has been filed by  Sh.  Babulal  along  with
Saurabh Agrotech Pvt. Ltd.,  which  is  a  company  incorporated  under  the
Companies Act, two partnership firms registered under  the  Partnership  Act
jointly and  the  HUF  of  Babulal,  seeking  partition  of  the  properties
mentioned in the Schedules annexed to the plaint and that  too  against  the
set of companies, which have been shown as the assets of the HUF.
(b)    Plaintiff-Babulal  though  seeking  partition  of  the  joint  family
properties has not impleaded his own sons and other coparceners  as  parties
to the suit and has not included the properties owned  and  managed  by  the
plaintiffs in the schedules annexed to the plaint. Therefore, it was  argued
that the suit itself is bad for non-joinder  of  necessary  parties  and  of
causes of action and the suit is not tenable in the eye of law.
(c) The Lower Court  failed  to  consider  the  contentions  raised  by  the
concerned defendants and also the documents produced by them.

5.    On the other hand, learned counsel for the plaintiffs-appellants  made
the following submissions:
(a)   The Lower Court has passed  the  impugned  order  which  is  just  and
proper after considering the prima facie case, irreparable  injuries  likely
to be caused to the plaintiffs and the balance of convenience.
(b)   On 20th December, 2007, a family settlement has  taken  place  between
Niranjan Lal Data Group which belong to the defendants  and  Babu  Lal  Data
Group which belong to the  plaintiffs  and  that  the  said  settlement  was
signed by Mr. Vijay Data for Niranjan Lal Data Group and by  Babu  Lal  Data
for Babu Lal Data Group. The said settlement was also partly acted  upon  by
the defendant-Niranjan Lal and other coparceners and therefore, they  cannot
be permitted to back out from the said settlement.

      Learned counsel also placed reliance upon decisions of this  Court  in
Reliance Natural Resources Ltd. v. Reliance Industries Ltd. (2010) 7  SCC  1
and in the case of Sangram Singh P. Gaekwad  and  others  v.  Shantadevi  P.
Gaekwad (D) Through LRs. & Ors. (2005) 11 SCC 314 and submitted that  though
a company incorporated under the Companies  Act  is  a  body  corporate,  in
certain situations, its corporate veil can be lifted and that the  suit  for
partition could be filed against companies also.
      It was further contended on behalf of the  plaintiffs-appellants  that
the family settlement need not be signed by coparceners and that if  a  mere
memorandum  of  family  arrangement  was  prepared  with   regard   to   the
arrangement which had already taken place; such a document did  not  require
registration. The family settlement made by the parties bona fide by  making
fair and equitable division of the properties  amongst  various  members  of
the family must be respected.
6.    The High Court by impugned judgment and order dated 14th  March,  2012
observed as follows:
”6………It is also significant to note that the plaintiffs have  impleaded  the
companies, partnership firms and proprietary concerns and HUFs as the  party
defendants, and the said companies and firms have also  been  shown  as  the
properties or the assets of the HUF in the schedule  'Gha'  annexed  to  the
plaint. This court fails to understand as to how  the  companies  which  are
incorporated under the Companies Act  having  perpetual  seal  and  separate
entity could be the assets of the HUF as alleged by the  plaintiffs  and  as
to how the companies could  be  divided  by  metes  and  bounds  by  way  of
partition as prayed for in the suit. The plaintiffs in the  suit  have  also
prayed for mandatory injunction seeking  direction  against  the  defendant-
companies alongwith other defendants to  act  upon  the  family  settlement,
alleged to have taken place on 20.12.2007  between  the  Niranjan  Lal  Data
Group and Babu Lal Data Group, and have also sought  the  direction  against
the said companies to execute the documents and handover the  possession  of
the properties of the said companies and firms etc. This  court  also  fails
to understand as to how the alleged family settlement between the NLD  Group
and BLD Group would be binding to the defendant companies and  firms,  apart
from the issue as to whether the alleged document dated 20.12.2007 could  be
called a family settlement. Under the circumstances this  court  finds  much
substance in the submission made by the learned counsel for  the  appellants
that the suit filed by the plaintiffs is not only  bad  for  mis-joinder  of
parties and of causes of action,  but  also  for  non-joinder  of  necessary
parties and that the suit in the present form would not be  maintainable  in
the eye of law.

7.    So far  as  merits  of  the  case  are  concerned,  according  to  the
respondents-plaintiffs, all the properties mentioned in the  Schedules  'Ka'
to 'Chha' annexed to the plaint, were purchased  from  the  nucleus  of  the
joint family properties, and as per the family  settlement  dated  20.12.07,
the said properties were required to be divided amongst the  family  members
of the plaintiff No. 1 and the defendant Nos.1 to 9. In this regard,  it  is
pertinent to note that the entire suit of the plaintiffs is based on the so-
called family settlement which had allegedly taken  place  between  the  NLD
group and BLD group on 20.12.07. From the bare perusal of the said  document
it transpires that it is the minutes of the meeting  of  Data  Group  Family
dated 20.12.07, which was signed by Mr. Vijay Data for  NLD  Group  and  Mr.
Babu Lal Data for BLD Group. Apart  from  the  fact  that  there  is  not  a
whisper in the said document that the corpus of the companies  mentioned  in
the said document was provided by the  HUF  or  that  the  other  properties
mentioned in the said document were the HUF properties,  the  said  document
has also not been signed by the other coparceners of the alleged HUF  except
by Mr. Vijay Data and Mr. Babu Lal Data. Such a document by  no  stretch  of
imagination could be said to be a family settlement. However, even if it  is
believed to be a family settlement, and even if it is  held  that  the  same
was not required to be signed by all the coparceners,  then  also  there  is
nothing on the record to suggest that it was  a  memorandum  prepared  after
the family arrangement which had already been made earlier, not required  to
be registered. ………….

“9.   In this regard it is pertinent  to  note  that  though  the  concerned
defendants had raised contentious issues as regards the  maintainability  of
the suit, mis-joinder of parties and of causes  of  action,  suppression  of
material facts by the plaintiffs etc., the lower court  has  not  considered
the same and has held that the plaintiffs had established  the  prima  facie
case in their favour. In the opinion of this court such  a  finding  of  the
lower court in the impugned order is not only erroneous but  also  perverse.
When the suit on the face of it suffered from  the  mis-joinder  of  parties
and of causes of action and was not prima facie tenable in the eye  of  law,
the lower court has committed serious error of  law  and  facts  in  holding
that the plaintiffs had established a prima facie case.  If  the  plaintiffs
were not entitled to the final reliefs  in  the  suit,  they  could  not  be
granted temporary injunction as  prayed  for  during  the  pendency  of  the
suit.”

7.    We have heard learned counsel for the parties  and  have  perused  the
record.  In the present case, the parties have raised  similar  pleas  which
were taken before the High Court. However, we are of the opinion that  while
dealing  with  a  matter  relating  to  vacation  of  order   of   temporary
injunction, it was not open for the High Court to  give  a  finding  on  the
main  issue  relating  to  maintainability  of  the  suit  and  the   family
settlement reached between the parties.
8.    In view of the finding aforesaid, we are inclined  to  interfere  with
the judgment and order dated 14th March, 2012 passed by the  High  Court  of
Judicature for Rajasthan,  Bench  at  Jaipur  in  S.B.  Civil  Misc.  Appeal
No.2218 of 2011 etc. We, accordingly, set aside the  impugned  judgment  and
remit back the matter to the  High  Court  for  its  fresh  disposal   after
hearing the parties.
9.    The appeals stand disposed of with aforesaid observations.

                                             ……………………………………………………………………………J.
                                     (SUDHANSU JYOTI MUKHOPADHAYA)



                                              …………………………………………………………………………J.
                                              (S.A.BOBDE)

NEW DELHI,
August 4, 2014.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.