LAW FOR ALL

Friday, April 22, 2016

no offence is made out under Section 66 of the I.T. Act, read with Section 43. The appellant was a Director of Devi Polymers and nothing is brought on record to show that he did not have any authority to access the computer system or the computer network of the company. That apart there is nothing on record to show the commission of offence under Section 65 of the I.T. Act, since the allegation is not that any computer source code has been concealed, destroyed or altered. We have already observed that the acts of the appellant did not have any dishonest intention while considering the allegations in respect of the other offences. In the circumstances, no case is made out under Sections 65 and 66 of the I.T. Act, 2000.The High Court seems to have over looked these circumstances and has merely dismissed the petition under Section 482 of the Criminal Procedure Code on the ground that it requires evidence at a trial to come to any conclusion. We, however, find that the criminal proceedings initiated by the respondent constitute an abuse of process of Court and it is necessary to meet the ends of justice to quash the prosecution against the appellant.

REPORTABLE

IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 133 OF 2016
(Arising out of S.L.P.(Crl.) No.2554 of 2011)

|RAMESH RAJAGOPAL |Appellant(s) |

Versus

|DEVI POLYMERS PRIVATE LIMITED |Respondent(s) |

JUDGMENT

S.A.BOBDE, J.
1. We have heard learned counsel for the parties.

2. Leave granted.

3. The appellant has preferred this appeal against the judgment
passed by the Madras High Court in Criminal O.P. No. 4404 of 2010
refusing to quash the criminal proceedings initiated against him.

4. The appellant was prosecuted by the respondent under Sections
409, 468 and 471 of the Indian Penal Code (in short 'the IPC') read
with Sections 65 and 66 of the Information Technology Act, 2000 read
with Section 120(b) of the IPC. The appellant is a Director in Devi
Polymers Private Limited, Chennai which is a leader in Polyester
Moulding Compound (PMC), Sheet Moulding Compound (SMC) and Dough
Moulding Compound (DMCO) in India.

It is also manufacturing SMC and DMC moulded components for the
electrical, automotive and various other industries. The company is
also supplying SMC and DMC compounds and components to almost all the
leading electrical switch gear industries and automotive industries in
India.

5. It has three Units – A, B and C. Unit 'C' is being headed by
the appellant. It is not disputed that the Unit 'C' primarily renders
consultancy services. However, all the three Units are units of one
entity i.e. Devi Polymers Private Limited.

6. In the course of business, the appellant thought of improving
the consultancy services and apparently contacted a consultant known
as Michael T Jackson. He also contacted the regular consultants of
the Company i.e. Devi Polymers Private Limited. The consultants
apparently advised the creation of a separate entity known as Devi
Consultancy Services and accordingly, in the web page that was created
by the consultant, this name occurred. Since an invoice was raised
by the consultant Michael T Jackson in the sum of 10,857.50 US
Dollars, the said amount was paid from the funds of Devi Polymers
Private Limited amounting to Rs.5,57,207/-. The amount of Rs.17,000/-
has been paid by the Devi Polymers Private Limited to M/s Easy Link.
These amounts were paid as advised by the appellant. It is
significant that no amount has been paid or received by Unit C
separately, independently of Devi Polymers Private Limited. All this,
namely the engaging of consultants and payments to them was apparently
done at the behest of the appellant.

7. The relationship being strained between the respondent and the
appellant, who are relatives, several proceedings seem to have been
initiated in the Company Law Board pertaining to oppression and
mismanagement. As of now, it is said that the appellant's petition
for mismanagement has been dismissed but an appeal is pending. We
are, however, not concerned with those proceedings.

8. However, in the course of disputes and the pending proceedings,
the respondent initiated the instant criminal complaint against the
appellant. The main circumstances which are relied upon by the
respondent in the complaint is that in the website for Devi
Consultancy Services that was created on the advice of the consultant
is shown as a separate division independent of Devi Polymers Private
Limited. According to the complainant, this has resulted in forgery,
since there is no such thing as Devi Consultancy Services; though the
existence of Unit C of Devi Polymers Private Limited, which deal with
consultancy is not denied. The second circumstance seems to be the
payment made by the Devi Polymers Private Limited to the consultants
from their own account. The former is said to be forgery and the
latter is said to be mis-appropriation of funds and breach of trust.

9. Having given our anxious consideration to the dispute, we find
that none of the aforesaid circumstances can lead to an inference of
commission of an offence under the IPC at any rate none of the offence
alleged. As far as the website is concerned, though undoubtedly, Devi
Consultancy Services (DCS) is mentioned, it is made clear in the
website itself that DCS is a part of Devi Polymers Private Limited
which is apparent from a link which shows Devi Polymers Private
Limited, in the website itself, are shown as Devi Polymers Private
Limited, the main Company and Devi Consultancy Services as a sister
Company. Similarly, in the website of Devi Polymers Private Limited,
which was moved by the consultant, there is a link which shows that
Devi Consultancy Services is a sister concern and it is stated that
viewers may visit that site. The address of Devi Consultancy Services
is shown to be the same address as that of Devi Polymers Private
Limited. We are satisfied that there is no attempt whatsoever to
project the Devi Consultancy Services as a concern or a Company which
is independent and separate from Devi Polymers Private Limited, to
which both the parties belong. In any case it is not possible to view
the act as an act of forgery.

10. It might have been possible to attribute some criminal intent
to the projection of the Unit C as Devi Consultancy Services in the
website, if as a result of such projection, the appellant had received
any amounts separate from the Devi Polymers Private Limited, but a
perusal of the complaint shows that this is not so. Not a single
rupee has been received by the appellant in his own name or even
separately in the name of Unit C, which he is heading. All amounts
have been received by Devi Polymers Private Limited.

11. Section 463 of the Indian Penal Code defines forgery which reads
as follows:-
“463. Forgery.— Whoever makes any false documents or false
electronic record or part of a document or electronic record, with
intent to cause damage or injury, to the public or to any person,
or to support any claim or title, or to cause any person to part
with property, or to enter into any express or implied contract,
or with intent to commit fraud or that fraud may be committed,
commits forgery.”

12. It is not possible to view the contents of the website showing
the Devi Consultancy Services as a concern which is separate from Devi
Polymers Private Limited in view of the contents of the website
described above. Moreover, it is not possible to impute any intent to
cause damage or injury or to enter into any express or implied
contract or any intent to commit fraud in the making of the said
website. The appellant has not committed any act which fits the above
description. Admittedly, he has not received a single rupee or nor
has he entered into any contract in his own name on the basis of the
above website.
13. Section 468 of the IPC reads as follows:-
“468. Forgery for purpose of cheating — Whoever
commits forgery, intending that the document or electronic
record forged shall be used for the purpose of cheating,
shall be punished with imprisonment of either description for
a term which may extend to seven years, and shall also be
liable to fine.”

14. In the absence of any act in pursuance of the website by which
he has deceived any person fraudulently or dishonestly, induced any
one to deliver any property to any person, we find that it is not
possible to attribute any intention of cheating which is a necessary
ingredient for the offence under Section 468.

15. We find that the allegations that the appellant is guilty of an
offence under the aforesaid section are inherently improbable and
there is no sufficient ground of proceedings against the accused. The
proceedings have been initiated against the appellant as a part of an
ongoing dispute between the parties and seem to be due to a private
and personal grudge.

16. In State of Haryana and Ors. v. Bhajan Lal and Ors. reported in
1992 Supp(1) SCC 335, this Court laid down the following guidelines
where the power under Section 482 should be exercised. They are:-
“102. In the backdrop of the interpretation of the various
relevant provisions of the Code under Chapter XIV and of the
principles of law enunciated by this Court in a series of
decisions relating to the exercise of the extraordinary power
under Article 226 or the inherent powers under Section 482 of the
Code which we have extracted and reproduced above, we give the
following categories of cases by way of illustration wherein such
power could be exercised either to prevent abuse of the process of
any court or otherwise to secure the ends of justice, though it
may not be possible to lay down any precise, clearly defined and
sufficiently channelised and inflexible guidelines or rigid
formulae and to give an exhaustive list of myriad kinds of cases
wherein such power should be exercised.
(1) Where the allegations made in the first information
report or the complaint, even if they are taken at their face
value and accepted in their entirety do not prima facie
constitute any offence or make out a case against the
accused.
(2) Where the allegations in the first information report and
other materials, if any, accompanying the FIR do not disclose
a cognizable offence, justifying an investigation by police
officers under Section 156(1) of the Code except under an
order of a Magistrate within the purview of Section 155(2) of
the Code.
(3) Where the uncontroverted allegations made in the FIR or
complaint and the evidence collected in support of the same
do not disclose the commission of any offence and make out a
case against the accused.
(4) Where, the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer
without an order of a Magistrate as contemplated under
Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so
absurd and inherently improbable on the basis of which no
prudent person can ever reach a just conclusion that there is
sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of
the provisions of the Code or the concerned Act (under which
a criminal proceeding is instituted) to the institution and
continuance of the proceedings and/or where there is a
specific provision in the Code or the concerned Act,
providing efficacious redress for the grievance of the
aggrieved party.
(7) Where a criminal proceeding is manifestly attended with
mala fide and/or where the proceeding is maliciously
instituted with an ulterior motive for wreaking vengeance on
the accused and with a view to spite him due to private and
personal grudge.”

We find that the High Court ought to have exercised its power under
Clause (1), (3) and (5) of the above said judgment.

17. In Madhavrao Jiwajirao Scindia and Ors. v. Sambhajirao
Chandrojirao Angre and Ors., reported in (1988) 1 SCC 692, this Court
observed as follows:-
“7. The legal position is well settled that when a
prosecution at the initial stage is asked to be quashed, the test
to be applied by the court is as to whether the uncontroverted
allegations as made prima facie establish the offence. It is also
for the court to take into consideration any special features
which appear in a particular case to consider whether it is
expedient and in the interest of justice to permit a prosecution
to continue. This is so on the basis that the court cannot be
utilised for any oblique purpose and where in the opinion of the
court chances of an ultimate conviction are bleak and, therefore,
no useful purpose is likely to be served by allowing a criminal
prosecution to continue, the court may while taking into
consideration the special facts of a case also quash the
proceeding even though it may be at a preliminary stage.”

18. This Court in Janata Dal v. H.S. Chowdhary and Ors., reported in
(1992) 4 SCC 305, observed as follows:-
“132. The criminal courts are clothed with inherent power
to make such orders as may be necessary for the ends of justice.
Such power though unrestricted and undefined should not be
capriciously or arbitrarily exercised, but should be exercised
in appropriate cases, ex debito justitiae to do real and
substantial justice for the administration of which alone the
courts exist. The powers possessed by the High Court under
Section 482 of the Code are very wide and the very plenitude of
the power requires great caution in its exercise. Courts must be
careful to see that its decision in exercise of this power is
based on sound principles.”

We reiterate the same caution having found that this is an appropriate
case for the exercise of such powers.

19. The entire law on the subjects was reviewed by a three Judges
Bench of this Court in Inder Mohan Goswami and Anr. v. State of
Uttaranchal and Ors., reported in (2007) 12 SCC 1 vide paragraphs 23
to 39. Thereafter, the law was reiterated in R. Kalyani v. Janak C.
Mehta and Ors. reported in (2009) 1 SCC 516 vide paragraphs 15 and 16.

20. In all the cases the principle that the accused must be relieved
from the prosecution, even if the allegations are taken at their face
value and accepted in their entirety do not constitute any offence has
been upheld, and thereafter in Umesh Kumar v. State of Andhra Pradesh
and anr., reported in (2013) 10 SCC 591.

21. As regards the commission of offences under the Information
Technology Act, 2000 the allegations are that the appellant had, with
fraudulent and dishonest intention on the website of Devi Consultancy
Services i.e. www.devidcs.com that the former is a sister concern of
Devi Polymers. Further, that this amounts to creating false
electronic record. In view of the finding above we find that no
offence is made out under Section 66 of the I.T. Act, read with
Section 43. The appellant was a Director of Devi Polymers and nothing
is brought on record to show that he did not have any authority to
access the computer system or the computer network of the company.
That apart there is nothing on record to show the commission of
offence under Section 65 of the I.T. Act, since the allegation is not
that any computer source code has been concealed, destroyed or
altered. We have already observed that the acts of the appellant did
not have any dishonest intention while considering the allegations in
respect of the other offences. In the circumstances, no case is made
out under Sections 65 and 66 of the I.T. Act, 2000.

22. The High Court seems to have over looked these circumstances and
has merely dismissed the petition under Section 482 of the Criminal
Procedure Code on the ground that it requires evidence at a trial to
come to any conclusion. We, however, find that the criminal
proceedings initiated by the respondent constitute an abuse of process
of Court and it is necessary to meet the ends of justice to quash the
prosecution against the appellant.

23. Accordingly, the appeal succeeds. The prosecution is quashed.

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

........................J.
(AMITAVA ROY)

New Delhi,
April 19,2016

Tuesday, April 19, 2016

the absence of visible injury on the body per se does not militate against the otherwise unambiguous medical opinion that the death was due to asphyxia. Breaking of bronchial tube is understandably a finding in endorsement of the above cause of death. Absence of visible injuries on the dead body, therefore as such, does not cast any doubt about the homicidal death of Jagram. This is also authenticated by the medical opinion that death had occurred between 12.6.1996 and 15.6.1996, i.e. during the interval between the abduction of the deceased and the detection of his dead body. “This lays down the general rule that in a criminal case the burden of proof is on the prosecution and Section 106 is certainly not intended to relive it of that duty. On the contrary, it is designed to meet certain exceptional cases in which it would be impossible, or at any rate disproportionately difficult for the prosecution to establish facts which are ‘especially’ within the knowledge of the accused and which he could prove without difficulty or inconvenience. The word ‘especially’ stresses that it means facts that are pre-eminently or exceptionally within his knowledge.”

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE
JURISDICTION

CRIMINAL APPEAL NO. 365 OF 2013

CHAMAN AND ANOTHER …APPELLANTS

VERSUS

STATE OF UTTRAKHAND …RESPONDENT
WITH
CRIMINAL APPEAL NO. 597 OF 2013

J U D G M E N T

AMITAVA ROY, J.

The appeals assail the judgment and order dated 11.6.2012,
rendered by the High Court of Uttrakhand, Nainital in Criminal Appeal No.
111 of 2004, affirming the conviction of the appellants under Sections
302,364 r/w 34 IPC. For the offence under Section 302 r/w 34 IPC, the
appellants have been sentenced to undergo imprisonment for life and fine of
Rs. 5000/- each and for the offence under Section 364 r/w 34 IPC, they have
been sentenced to suffer rigorous imprisonment for seven years and fine
of Rs. 5000/- each. Sentence of imprisonment in default of fine has also
been awarded. The trial court had convicted and sentenced the appellants
in identical terms.

2. We have heard Mr. V. Shekhar, learned senior counsel for the
appellants – Chaman and Sukhbeer in Criminal Appeal No. 365 of 2013, Mr.
P.K. Dey, learned counsel for the appellant – Rakesh Kumar @ Mota in
Criminal Appeal No. 597 of 2013 and Mr. Jatinder Kumar Bhatia, learned
counsel for the State.

3. The genesis of the prosecution case is traceable to the F.I.R. lodged
on 12.6.1996 by Rajo Devi, widow of the deceased Jagram, addressed to the
Station In-charge, Police Station Cleamantown, Dehradun. She alleged in
the FIR that prior to the date of incident i.e. 12.6.1996, the appellants
Chaman, Rakesh @ Mota and Sukhbeer along with two associates had come to
their residence in search of her son Vinod, who they alleged was involved
in the murder of the son of Chaman. As Vinod was not available there, they
went back. They returned on the date of the incident at about 11 A.M.,
when she along with her husband and daughters Bina and Manju were present
in the house. The appellants again enquired about Vinod and as he was not
present in the house, they took away her husband Jagram with them. The
informant stated that the appellants had come in a jeep bearing No. UP 015
5330 and had forced her husband in the said jeep and had taken him away.
She expressed apprehension that due to the impression of the appellants
that her son Vinod was involved in the murder of the son of Chaman, they
would eliminate her husband, Jagram. She mentioned as well in the FIR that
at the time of the incident, her daughters Bina and Manju raised alarm, but
the people of the locality did not intervene.

4. This information was registered as FIR No. 250 of 1996 and in course
of the investigation, on 15.6.1996 at about 1400 hours, one Amar Singh
informed the Police Station Chandpur, District Bijnour that a decomposed
dead body, 3/4 days old, had been detected in a jungle between Cehla and
Ismailpur. This information was recorded and inquest of the dead body was
conducted in presence of panch witnesses, whereafter the body was
dispatched for post-mortem examination. At that stage, the dead body was
unidentified. It was found to be decomposed with maggots. No visible
injury was noticed on the dead body. The appellant Chaman was arrested on
3.7.1996, who thereafter led the police to the jungle at Village Cehla,
within the jurisdiction of P.S. Chandpur, District Bijnour from where a
rope, as shown by him, was recovered from bamboo bushes. According to the
prosecution, the appellant Chaman also showed to the police, the place in
the jungle where Jagram had been killed by hanging him by that rope from a
tree. The rope was seized vide recovery memo and the site plan of the
place of occurrence as indicated by the appellant Chaman, was prepared.

5. The dead body, on the completion of inquest, was sealed and was
brought to the District Hospital, Bijnour for autopsy. On the basis of the
evidence collected in the course of investigation, charge-sheet was
submitted against the appellants – Chaman, Rakesh Kumar @ Mota, Sukhbeer,
Ghanshyam @ Bundu, Tofique and Ashok under Sections 302/364/201 IPC. The
case being exclusively triable by the Court of Sessions was committed to
the Court of Additional Sessions Judge, Fast Track (IV), Dehradun. Charge
was framed under Sections 147, 201/302/364 r/w 149 IPC, to which the
accused persons pleaded “not guilty” and claimed to be tried.

6. The prosecution examined ten witnesses, whereafter the statements
of the accused persons were recorded under Section 313 Cr.P.C.. All of
them stood by their denial in their statements. On the conclusion of the
trial, the trial court acquitted accused Ghanshyam, Tofique and Ashok of
all the charges. It acquitted appellants as well, of the charges under
Sections 147, 201 r/w 149 IPC but convicted them, under Sections 302/364
r/w 34 IPC and sentenced them as above.

7. The High Court, by the verdict impugned, affirmed the sentence and
conviction recorded by the trial court.

8. Mr. Shekhar, learned senior counsel for the appellants- Chaman and
Sukhbeer has at the threshold dismissed the case of the prosecution as
motivated and concocted and to buttress this plea, has drawn the attention
of the Court to a letter dated 15.4.1996, addressed by one Surender @
Baniya, a detenue in District Jail, Bijnour to the Superintendent of
Police, Bijnour, U.P. hinting at a plot to kill, the appellant Chaman who
is a witness in the case of the murder of his son. The learned senior
counsel sought to impress upon the court on the basis of this document,
that the appellant Chaman in particular, was thus falsely implicated in the
case of alleged abduction and murder of Jagram. Apart from emphatically
contending that there was an apparent confusion in the information as to
the type of the vehicle in which the appellants had visited her house, Mr.
Shekhar has endeavoured to discredit the prosecution case, for the omission
to examine the scribe of the FIR, who admittedly had penned the same on the
disclosures of the informant Rajo Devi. According to the learned senior
counsel, the discrepancy in the description of the rope allegedly
recovered, being led thereto by the appellant Chaman and the one produced
in the court, did conclusively belie the prosecution case.

9. Mr. Shekhar laboured to emphasise that this anomaly is writ large
from the testimony of PW4, Constable Nardev Singh who identified the rope
produced in the court to be made of plastic whereas PW10 S.I. Ramesh
Chander Sharma, the Investigation Officer in categorical terms, had deposed
that the seized rope was made of jute and that it was not a nylon rope.
Mr. Shekhar further urged, that admittedly though the dead body was
decomposed and some portions of the abdomen and lower half were missing, no
visible injury was noticed thereon and particularly on the neck and thus
the prosecution version of death by asphyxia, as opined by the doctor,
effected by the rope recovered, was wholly untrustworthy. The learned
senior counsel, while questioning the identification of the appellants, has
also cast aside the prosecution case to be wholly improbable as well.

10. While generally endorsing the above contentions, Mr. P.K. Dey,
learned counsel for the appellant Rakesh Kumar @ Mota, has urged that the
FIR, lodged within 45 minutes of the incident, is too prompt in point of
time, having regard to the nature of the incident complained of and in
reality is ante timed to falsely implicate the appellant –Rakesh Kumar in
the case. According to the learned counsel, not only the prosecution case
is inherently unbelievable, in absence of any endeavour whatsoever by the
family members to resist the alleged abduction of Jagram and the non-
intervention of residents of the otherwise densely populated neighbourhood,
the acquittal of the three co-accused, who allegedly had accompanied the
appellant, is destructive of the sub stratum of the prosecution case. This
is more so, as the accused-appellant and their companions were unarmed. Mr.
Dey has argued, that not only the discrepancy in the description of the
rope recovered and produced in the court, renders the prosecution case
highly doubtful, in absence of identification of the dead body and any
perceptible nexus between the offence of murder of Jagram and the
appellants, their conviction, if sustained, would be a travesty of justice.
The learned counsel underlined the contradictions in the statements of PW6,
the Doctor and PW5-Rakesh about the state of the body before the autopsy
and also maintained that in absence of any evidence of coordination between
the police stations at Dehradun and Bijnour over the detection of the dead
body, the despath thereof and its identification, the prosecution could not
establish that the dead body was that of Jagram. Inviting the attention
of this Court to the evidence of PW5- Rakesh, the son of the deceased who
stated to have come to learn about the abduction of his father 4/5 days
prior to the recovery of the dead body, the learned counsel has insisted
that such a statement being a part of the same transaction enfolding the
alleged abduction of the deceased and recovery of the dead body, it is res
gestae and thus demolished the version in the FIR as well as the testimony
of the informant to that effect. Mr. Dey has urged as well that as the
factum of the identification of the dead body to be of Jagram, as made by
his son PW5 Vinod, had not been put to the appellants, in the course of
their statements under Section 313 Cr.P.C., this incriminating circumstance
could not have been taken note of and acted upon in support of the charge.

11. Per contra, learned counsel for the State has maintained that the
testimony of PW1–Rajo Devi, the informant, PW2- Manju, the daughter of the
deceased, PW4 Constable Nardev Singh, the seizure witness of the rope, PW5
Rakesh, son of the deceased who identified the dead body, PW6 Dr. A.K. Kaul
who had performed the post-mortem examination and PW10 S.I. Ramesh Chander
Sharma in particular has proved the charge against the appellants beyond
all reasonable doubt and thus the conviction and sentence as recorded by
the trial court and affirmed by the High Court does not merit any
interference.

12. The learned counsel for the State has asserted that as the
abduction of the deceased has been convincibly proved by PWs 1 and 2 and
that Jagram had met a homicidal death immediately thereafter, there was a
rebuttable presumption of guilt against the appellants and as they had
failed to offer any explanation whatsoever, as to how they had dealt with
Jagram while he was in their custody, their conviction is sustainable in
law and on facts. He referred, in particular to Section 106 of the Indian
Evidence Act, 1872 to reinforce this plea and also relied upon the
decision of this Court in State of State of W.B. vs. Mir Mohammad Omar and
others, (2000) 8 SCC 382.

13. The arguments advanced and the materials on record have received our
due attention. Concurrent findings of facts, notwithstanding, having
regard to the conviction and sentence as recorded, we have traversed the
evidence available to the extent essential for the present adjudication.

14. The facts narrated in the FIR dated 12.6.1996, in our estimate, are
of sufficient clarity regarding the dual visits of the appellants to the
house of the deceased in search of his son Vinod. The contents thereof do
not admit any doubt that the appellants along with two others had come in a
jeep, the number whereof had been provided in the FIR, on the date of the
incident at about 11 A.M. and had taken away with them the deceased, father
of Vinod in presence of the informant- Rajo Devi, his daughters Bina and
Manju. There is a clear averment that though the daughters raised alarm
and that the people of the locality were present, no body did come forward
to prevent the abduction. The omission on the part of the people in the
neighbourhood to intervene per se, in our opinion, does not detract from
the truthfulness of the report made which admittedly had been done within
the shortest possible time. Though the FIR was written by one H.S. Verma,
his non-examination as well is of no adverse bearing on the prosecution
case. The letter by Surender, a detenu in the District Jail, Bijnour
hinting at the plot to kill Chaman also, in our comprehension, is not of
any definitive significance.

15. PW1-Rajo Devi, in unequivocable terms, stated on oath that on the
date of the incident at 11 A.M., the appellants and two other persons,
whose names were not known to her, had come in a car with curtains. They
searched for her son Vinod and when he was not found, they picked up her
husband Jagram, pushed him in the car and took him away. She identified
the appellants and other accused persons in the court to be the kidnappers
of her husband. She stated as well, in terms of the FIR filed, that the
appellants had visited her house 15 days prior to the date of the incident
looking for her son Vinod, disclosing it to her that they suspected that he
was involved in the murder of the son of Chaman. The witness also deposed
that thereafter she along with her two daughters Bina and Manju and son-in-
law, had visited the Bijnour mortuary and had identified the dead body of
her husband.

16. PW2- Manju, daughter of the deceased testified in the same lines as
of her mother. She identified the appellants who along with two others had
come in a car to their house on the date of the incident. She reiterated
the purpose of the visit of the appellants and their companions as
disclosed by them and confirmed that they had similarly come to their house
in search of Vinod 15 days prior to the date of incident. She mentioned
about the presence of her sister Veena in the house at the time of the
incident. She was categorical in the matter of identification of the
accused persons.

17. PW4 Constable Nardev Singh deposed that the appellant Chaman led
the police to recover the rope whereby Jagram was hung from the tree. He
stated that the appellant Chaman not only identified the tree but also led
the police to the rope which was recovered from the bush in the jungle.
He identified the rope in the court to be one of plastic. In cross-
examination, this witness clarified that the jungle was not on a thorough
fare. He stated that he was unaware as to why in his statement under
Section 161 Cr.P.C., the recovered rope was described to be a “jute rope”
(suthli).

18. PW5 Rakesh, son of the deceased on oath deposed that he recognized
the dead body of his father at District Hospital Mortuary, Bijnour, after
it was taken out from the sealed cloth before the post-mortem examination.
He stated that he came to know about 4/5 days before, that appellant Chaman
had called his father and had taken him away.

19. PW6 Dr. A.K. Kaul who had performed the autopsy, testified that the
dead body was then in an advanced stage of decomposition and maggots were
present on it. He stated that some body parts like middle stomach and left
thigh were missing and that it appeared that it had been nibbled by
animals. He mentioned that there was no apparent injuries on the dead
body of the deceased but opined that the cause of death might be asphyxia.
He stated as well that there was no mark of rope on the body but added that
bronchial tube was broken. According to him, death had occurred between
12.6.1996 to 15.6.1996.

20. PW7 Shakoor Khan was a witness to the recovery and inquest of the
dead body. PW8 S.I. Charan Singh had prepared the inquest report of the
dead body. PW9 Amar Singh had detected the dead body of an unknown person
lying in the jungle between Cehla and Ismailpur. The dead body was 3/4
days old and he had informed of this fact in writing to the Police Station
Chandpur.

21. PW10 S.I. Ramesh Chander Sharma, the Investigating Officer narrated
the steps taken by him in the course of investigation. He stated about the
recovery of the rope from the bamboo bushes of the place of occurrence,
being led thereto by appellant Chaman and the preparation of the memo of
seizure thereof. He admitted in his cross-examination that the place from
where the rope was recovered was accessible to all. He mentioned that the
rope recovered was a jute rope and not a nylon rope.

22. A perusal of the statements of the accused persons recorded under
Section 313 Cr.P.C. reveal that comprehensive questions pertaining to
abduction and murder of Jagram by them, detection of his decomposed dead
body, post-mortem thereof with the cause of death and the recorded
statement of appellant Chaman leading to the discovery of the rope
involved, were put to them so as to fully enable them to explain all the
incriminating circumstances appearing against them in the evidence adduced
by the prosecution.

23. An analytical evaluation of the materials on record does not admit
of any doubt of the successive visits of the appellants on the turn of 15
days to the house of the deceased in search of Vinod whom they suspected
was involved in the murder of the son of the appellant Chaman. There is
nothing to disbelieve PWs 1 and 2 that the appellants, on the date of the
incident, had come in a jeep and as they did not find Vinod in the house,
they abducted Jagram, who was later on found dead within 3/4 days
therefrom in a nearby jungle. Though the incident took place in the broad
day light and the daughters did raise alarm, the mere non-intervention by
the persons in the locality, in our opinion, in the face of the otherwise
overwhelming and consistent testimony of the mother and the daughter does
not discredit the prosecution case. Noticeably, the PWs 1 and 2 were
steadfast in the matter of identification of the three appellants, not only
at the time of the incident but also thereafter in court. According to
them, the appellants were of the village Ismailpur and thus their
identification was not difficult for them. Admittedly the FIR was lodged
with due promptness, thus obviating the possibility of any embellishment.
To reiterate, non-examination of the scribe of FIR does not render the
prosecution case untrustworthy in the attendant facts and circumstances.

24. The irrefutably proved circumstance against the appellants is that
they had visited the house of the deceased twice within a span of fifteen
days, on each occasion in search of his son Vinod and ultimately on the
date of the incident had forcibly taken him away, only thereafter to be
found to have died a homicidal death in an unnatural setting. The fact of
recovery of the rope, being led thereto by the appellant Chaman is
admissible in evidence against the appellants. The discrepancy about the
texture of the rope, the seizure thereof having otherwise been proved, is
not of much significance. PW4 Constable Nardev Singh, who was associated
with the procedure of seizure of the rope had identified the same in the
court. In our opinion, nothing much turns on the mismatch in the
description thereof as has been sought to be emphasised on the basis of his
statement to this effect under Section 161 Cr.P.C. The dead body has been
identified by the informant wife in presence of her daughters and sons-in-
law as well as the son PW5 as is evident from the evidence on record.

25. The motive for the offence is also discernible in the facts of this
case and for that matter, from the disclosures made by the appellants for
their visits in search of Vinod, who they believed, was involved in the
murder of the son of the appellant Chaman. The pleas based on res gestae
and the perceived omission to bring to the notice of the appellants, the
factum of identification of the dead body, in the face of the consistent,
cogent and coherent evidence on record, do not commend for acceptance. The
statement of PW2 that he came to know about the abduction after 4/5 days
can by no means be one in course of the transaction encompassing the
incident to attract the doctrine of res gestae.

26. Significantly, the proved abduction of the deceased from his house
by the appellants is per se a criminal offence and carries with it a much
higher degree of sinister culpability compared to any phenomenon of “last
seen together”, simpliciter. Further the deceased being in the custody of
the appellants after his abduction on 12.6.1996, it was within their
special knowledge as to how he had been dealt with by them thereafter
before his dead body was found in a decomposed state in a nearby jungle.
No explanation is forthcoming in any form in this regard from the
appellants.

27. This Court in State of West Bengal (supra) in a somewhat similar fact
situation, where the deceased was abducted by the accused persons and
thereafter his mangled body was found, held that the pristine rule that the
burden of proof is on the prosecution to prove the guilt of the accused
should not be taken as a fossilised doctrine as if it admits of no process
of intelligent reasoning. It was enunciated that the doctrine of
presumption is not alien to the above rule, nor would it impair the temper
of the rule qua the purport of presumption of fact as a rule in the law of
evidence. It was observed thus:

“Presumption of fact is an inference as to the existence of one fact from
the existence of some other facts, unless the truth of such inference is
disproved. Presumption of fact is a rule in law of evidence that a fact
otherwise doubtful may be inferred from certain other proved facts. When
inferring the existence of a fact from other set of proved facts, the court
exercises a process of reasoning and reaches a logical conclusion as the
most probable position. The above principle has gained legislative
recognition in India when Section 114 is incorporated in the Evidence Act.
It empowers the court to presume the existence of any fact which it thinks
likely to have happened. In that process the court shall have regard to the
common course of natural events, human conduct etc. in relation to the
facts of the case.”

28. Adverting to the facts, this Court ruled that as the prosecution had
succeeded in establishing that the deceased had been abducted by the
accused, they alone knew what happened to him until he was with them and if
he was found murdered in a short time, after the abduction, the permitted
reasoning process would enable the court to draw the presumption that the
accused had murdered him. It was held that such inference can be
disrupted, if the accused would tell the Court what else had happened to
the deceased at least until he was in their custody.

29. Referring to Section 106 of the Evidence Act, it was propounded that
the said section was not intended to relieve the prosecution of its burden
to prove the guilt of the accused beyond reasonable doubt, but would apply
to cases where prosecution had succeeded in proving facts from which a
reasonable inference could be drawn regarding the existence of certain
other facts, unless the accused, by virtue of his special knowledge
regarding such facts, succeed to offer any explanation, to drive the court
to draw a different inference.

30. The following observations by this Court in the context of above
legal provision in Shambhu Nath Mehra vs. State of Ajmer AIR 1956 SC 404
was adverted to with approval.

“This lays down the general rule that in a criminal case the burden of
proof is on the prosecution and Section 106 is certainly not intended to
relive it of that duty. On the contrary, it is designed to meet certain
exceptional cases in which it would be impossible, or at any rate
disproportionately difficult for the prosecution to establish facts which
are ‘especially’ within the knowledge of the accused and which he could
prove without difficulty or inconvenience. The word ‘especially’ stresses
that it means facts that are pre-eminently or exceptionally within his
knowledge.”

31. Proof beyond reasonable doubt, as has been held in a plethora of
decisions of this Court, is only a guideline and not a fetish and that
someone, who is guilty, cannot get away with impunity only because truth
may suffer some infirmity when projected through human processes as has
been observed in Inder Singh and another vs. The State (Delhi
Administration) (1978)4SCC161. A caveat against exaggerated devotion to
the rule of benefit of doubt to nurture fanciful doubts or lingering
suspicion so as to destroy social defence has been sounded by this Court
in Gurbachan Singh vs. Satpal Singh and others (1990)1SCC 445. It has been
propounded that reasonable doubt is simply that degree of doubt which would
permit a reasonable and a just man to come to a conclusion. It has been
underlined therein that reasonableness of doubt must be commensurate to the
nature of the offence to be investigated.

32. Judged by the above touchstone of reasonableness of doubt in
evaluating the facts and circumstances of the present case, we are clear in
our mind that the complicity of the appellants in the offences with which
they have been charged, has been convincingly proved as required in law.

33. It is patent from the evidence of the doctor conducting the post-
mortem examination that the cause of death is asphyxia. PW6 – Dr. A.K.
Kaul has indicated as well in his statement on oath that the bronchial tube
of the deceased was broken. Having regard to the decomposed state of the
dead body, at the time when the post-mortem was conducted, the absence of
visible injury on the body per se does not militate against the otherwise
unambiguous medical opinion that the death was due to asphyxia. Breaking
of bronchial tube is understandably a finding in endorsement of the above
cause of death. Absence of visible injuries on the dead body, therefore
as such, does not cast any doubt about the homicidal death of Jagram.
This is also authenticated by the medical opinion that death had occurred
between 12.6.1996 and 15.6.1996, i.e. during the interval between the
abduction of the deceased and the detection of his dead body.

34. On a anxious consideration of the entire gamut of the facts of the
case and the principles of law evolved, we are, thus of the unhesitant
opinion that the concurrent convictions and the sentences based thereon,
as recorded by the trial court and the High Court, do not warrant any
interference in the present appeals. The appeals are, thus dismissed.

……..……………………..….J.
(S.A. BOBDE)

……..……………………..….J.
NEW DELHI (AMITAVA ROY)
APRIL 19, 2016.

It is a settled principle of law that jurisdiction of Court under Section 11 of the Act is limited and confine to examine as to whether there is an arbitration agreement between the contracting parties and, if so, whether any dispute has arisen between them out of such agreement which may call for appointment of arbitrator to decide such disputes. Once it is held that disputes had arisen between the parties in relation to agreement which contained an arbitration clause for resolving such disputes, the Court should have made reference to the arbitrator leaving the parties to approach the arbitrator with their claim and counter- claim to enable the arbitrator to decide all such disputes on the basis of case set up by the parties before him. In this case, we find that the learned Single Judge did exceed his jurisdiction on this issue and hence interference to this extent is called for.

Non-Reportable
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4095 OF 2016
(ARISING OUT OF SLP(C) NO.10868/2016)
(@ SLP(C)…..CC 6652/2016)

Rajesh Verma Appellant(s)

VERSUS

Ashwani Kumar Khanna Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.
1) Delay in filing special leave petition is condoned. Leave granted.
2) This appeal is filed against the final judgment and order of the High
Court of Delhi at New Delhi dated 03.12.2015 and 19.02.2016 in Arbitration
Petition No. 434 of 2015 and I.A. No. 754 of 2016 in Arbitration Petition
No. 434 of 2015 respectively whereby the learned Single Judge of the High
Court allowed Arbitration Petition No. 434 of 2015 and dismissed I.A. No.
754 of 2016 in Arbitration Petition No. 434 of 2015 seeking change of the
named arbitrator.
3) In order to appreciate the short issue involved in the appeal, it is
necessary to state few relevant facts.
4) The appellant is an owner/landlord of the shop measuring 153.58 sq.
feet situated at 1729, Gali No. 5, Govind Puri Extension, Kalkaji, New
Delhi-110019 whereas the respondent was the appellant's tenant of the shop
in question at a monthly rent of Rs.175/- since July 1977.
5) On 31.10.2014, the appellant and the respondent claimed to have
entered into an agreement whereby it was inter alia agreed that the
appellant on respondent's vacating the shop would demolish the shop and
construct the new one in its place on or before 31.03.2015 and then sell
the new shop to the respondent for a total consideration of Rs.42,00,000/-.
The agreement further stipulated that the respondent has paid a sum of
Rs.32,00,000/- by way of advance to the appellant in cash towards the sale
consideration and balance amount of Rs.10,00,000/- was to be paid by the
respondent to the appellant at the time of execution of the sale deed.
Clause 14 of the agreement contained arbitration clause for making
reference to the sole arbitrator in the event of any dispute arising
between the parties in relation to the agreement in question.
6) The disputes arose between the parties in relation to implementation
of the terms of the agreement, which led to exchange of notices between
them by making allegations and counter allegations by both against each
other regarding committing of breaches of the agreement. Eventually, the
respondent (tenant) filed an arbitration petition being Arbitration
Petition No. 434 of 2015 under Section 11 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as “the Act”) before the
Delhi High Court (Single Judge) out of which this appeal arises praying
therein for appointment of sole arbitrator for resolving the disputes which
had arisen between them. It was inter alia alleged that since Clause 14 of
the agreement provided for appointment of sole arbitrator for deciding the
disputes arising out of the agreement between the parties and when disputes
have arisen between them, the matter should be referred to the sole
arbitrator for his decision as provided in the agreement. The arbitration
petition was contested by the appellant (owner/landlord) as non-applicant
by denying the allegations made in the petition. However, the learned
Single Judge by order dated 03.12.2015 allowed the petition and appointed
one Shri Ashok Chhabra, Advocate as sole arbitrator to decide the disputes.
It is against this order of the learned Single Judge, the owner/landlord
has filed this special leave to appeal.
7) Heard Mr. Praveen Chaturvedi, learned counsel for the appellant and
Mr. Vivek Sharma, learned counsel for the respondent.
8) Mr. Praveen Chaturvedi, learned counsel for the appellant, urged two
points in support of his submission. In the first place, he urged that the
learned Single Judge while allowing the petition exceeded his jurisdiction
under Section 11 of the Act because he virtually proceeded to decide the
main disputes itself by recording findings on such issues in Paras 9 and 10
of the impugned order. It was his submission that the findings recorded in
Paras 9 and 10 and all such observations made in the impugned order, which
touched the merits of the controversy, should, therefore, be set aside
leaving the arbitrator to decide all such disputes in accordance with law
in arbitration proceedings on its merits depending upon the stand taken by
the parties before the arbitrator.
9) His second submission was that the learned Single Judge having
allowed the petition should have sought party’s consent for nominating the
arbitrator and in any case, according to learned counsel, any retired judge
would have been more preferable for appointment to act as an arbitrator in
place of any lawyer.
10) Learned counsel for the respondent, however, supported the impugned
order and urged that no interference is called for in the impugned order.
11) Having heard the learned counsel for the parties and on perusal of
the record of the case, we find some force in the submissions urged by
learned counsel for the appellant.
12) We have perused the impugned order and find that in Paras 9 and 10,
the learned Single Judge has elaborately discussed the issues touching the
merits of the controversy relating to the agreement. In our considered
opinion, a discussion much less with such elaboration on factual issues was
wholly uncalled for and should not have been made. Indeed, it was not
necessary for the learned Single Judge to have recorded any finding on
merits while making reference to the arbitrator under Section 11 of the
Act.
13) It is a settled principle of law that jurisdiction of Court under
Section 11 of the Act is limited and confine to examine as to whether there
is an arbitration agreement between the contracting parties and, if so,
whether any dispute has arisen between them out of such agreement which may
call for appointment of arbitrator to decide such disputes.
14) Once it is held that disputes had arisen between the parties in
relation to agreement which contained an arbitration clause for resolving
such disputes, the Court should have made reference to the arbitrator
leaving the parties to approach the arbitrator with their claim and counter-
claim to enable the arbitrator to decide all such disputes on the basis of
case set up by the parties before him. In this case, we find that the
learned Single Judge did exceed his jurisdiction on this issue and hence
interference to this extent is called for.
15) We, accordingly, observe that the arbitrator while deciding the
disputes between the parties in arbitration proceedings would not, in any
manner, be influenced by any finding, observations made by the learned
Single Judge in the impugned order and nor would make any reference of the
findings while deciding the case.
16) Now so far as the appointment of sole arbitrator made by the learned
Single Judge is concerned, in view of the reservation expressed by the
appellant regarding the choice of an advocate arbitrator by the High Court,
we feel that it is just and proper that a retired Judge should be appointed
in his place as an arbitrator to resolve the disputes.
17) We, accordingly, appoint Shri Justice M.L. Mehta (Rtd.) as the sole
arbitrator to decide the disputes, which have arisen between the parties in
relation to the agreement in question. The arbitrator would be at liberty
to settle the terms for deciding the dispute such as fees and expenses etc.
18) Needless to say, the arbitration proceedings be completed
expeditiously.
19) In the light of foregoing discussion, the appeal succeeds and is
allowed in part. Impugned order is modified to the extent indicated above.

.……...................................J.
[J. CHELAMESWAR]

………..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi,
April 19, 2016.
-----------------------
9

This case, in our view, is a classic example of the abuse of the judicial process by unscrupulous litigants with money power, all in the name of legal rights by resorting to half-truths, misleading representations and suppression of facts. Each and every party is guilty of one or the other of the above-mentioned misconducts. It can be demonstrated (by a more elaborate explanation but we believe the facts narrated so far would be sufficient to indicate) but we do not wish to waste any more time in these matters.This case should also serve as proof of the abuse of the discretionary Jurisdiction of this Court under Article 136 by the rich and powerful in the name of a ‘fight for justice’ at each and every interlocutory step of a suit. Enormous amount of judicial time of this Court and two High Courts was spent on this litigation. Most of it is avoidable and could have been well spent on more deserving cases.=This Court in Ramrameshwari Devi & Others v. Nirmala Devi & Others, (2011) 8 SCC 249 observed at para 54; “54. While imposing costs we have to take into consideration pragmatic realities and be realistic as to what the defendants or the respondents had to actually incur in contesting the litigation before different courts. We have to also broadly take into consideration the prevalent fee structure of the lawyers and other miscellaneous expenses which have to be incurred towards drafting and filing of the counter-affidavit, miscellaneous charges towards typing, photocopying, court fee, etc.” We therefore, deem it appropriate to impose exemplary costs quantified at Rs.25,00,000.00 (Rupees Twenty Five Lakhs only) to be paid by each of the three parties i.e. GGL, MGG and RUIAS. The said amount is to be paid to National Legal Services Authority as compensation for the loss of judicial time of this country and the same may be utilized by the National Legal Services Authority to fund poor litigants to pursue their claims before this Court in deserving cases.

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CIVIL) NOS. 33429-33434 OF 2010

Messer Holdings Ltd. … Petitioner

Versus

Shyam Madanmohan Ruia & Others … Respondents

WITH

SPECIAL LEAVE PETITION (CIVIL) NOS. 23088-23090 OF 2012

J U D G M E N T

Chelameswar, J.

1. Messer Griesham GmbH, a German Company (hereinafter referred to as
“MGG”) entered into a Share Purchase and Cooperation Agreement (hereinafter
referred to as AGREEMENT-1) with the shareholders of an Indian company
called Goyal Gases Ltd. (hereinafter referred to as “GGL”) on 12.5.1995.
By virtue of the said agreement, MGG purchased 30% of equity shares of GGL.
Subsequently, MGG increased its shareholding in GGL to 49%. Clause 9 of
the AGREEMENT-1 reads:

“ 9. NON-COMPETITION CLAUSE

GGL and all Goyal Group companies will cooperate in the Indian market with
right to first refusal basis/with MGG and will not for the duration of this
cooperation support in any way directly or indirectly - the activities of
MGG’s competitors with regard to gas business. MGG will give written
information to GGL about every business opportunity it plans to take in the
Indian market in regard to industrial gases and related business and GGL
may decide if it wants to participate in it (right of first refusal). In
case GGL does not within a period of two months after receiving MGG’s
notice declare in writing that it is willing and able to participate in the
planned business, MGG is free to proceed with this business on its own.
However, MGG will give due consideration to the interest of GGL being its
group company. Such new business which MGG undertakes should be business
of gas supply of few major dedicated customers only and not to general
market supply.”

2. In a company known as BOMBAY OXYGEN CORPORATION LIMITED (hereinafter
referred to as the ‘BOCL’) majority shares were collectively held by a
group of persons known as RUIAS (we understand that they belong to one
family). On 23.6.1997, MGG entered into another Share Purchase Agreement
(hereinafter referred to as AGREEMENT -II) with RUIAS. By the said
agreement MGG agreed (i) to purchase 45001 shares of BOCL from RUIAS, and
(ii) also to acquire another 30000 shares of BOCL from the open market
which would make MGG the majority shareholder of BOCL (creating a
controlling interest). Clause 6.1 of AGREEMENT-II reads;

“6.1 Right of First Refusal:

With effect from the date this Agreement becomes effective, neither party
shall sell any shares in the Company held or acquired by it without first,
offering the Shares to the other party. The offer shall be in writing and
shall set out in the price and other terms and conditions. If the offeree
does not agree to purchase the Shares so offered the offerer shall be free
to sell the Shares to any person (other than a competitor of the offeree),
but at the same price and on the same terms as offered to the offeree.
This right of first refusal does not apply to any sale of shares by the
purchaser to a company of the Hoechst Group. In a company directly or
indirectly controlled by or under direct or indirect common control with
the Hoechst Group. For the purposes of this definition “control” means
ownership, directly or indirectly or more than 50 percent of the issued and
outstanding voting stock or ownership interest of the Company.”

3. Pursuant to the AGREEMENT-II, MGG made a public announcement on
27.6.1997 disclosing its intention to acquire 30000 shares of BOCL from
public as required under Chapter-III of the Securities and Exchange Board
of India (Substantial Acquisition of Shares and Takeovers) Regulations,
1997 (hereinafter referred to as the ‘REGULATIONS 1997) framed in exercise
of the powers conferred by Section 30 of the Securities and Exchange Board
of India Act, 1992 (hereinafter referred to as the “SEBI Act”)

4. GGL protested (in writing) against the attempt of MGG to
independently acquire shares of BOCL saying that it would amount to breach
of Clause 9 of the AGREEMENT-I. Some correspondence took place between both
the Companies in this regard. Eventually, both the Companies entered into
AGREEMENT-III on 8.11.1997 whereunder it was agreed that out of 75001
shares of BOCL to be acquired by MGG under AGREEMENT-II, 50000 shares will
be acquired in the name of GGL and only 25001 will be acquired in the name
of MGG.

5. RUIAS came to know of the AGREEMENT-III. By their letter dated
5.5.1998 they informed MGG that they were not agreeable for the proposal of
MGG and GGL jointly purchasing the shares of the BOCL. In view of the said
development, MGG informed GGL on 7.5.1998 that MGG was terminating
AGREEMENT-III. Thereafter, MGG proceeded to acquire 75001 shares of the
BOCL on its own and paid an amount of Rs.13.5 crores to the RUIAS towards
the value of 45001 shares.

SUIT-I IN THE HIGH COURT OF DELHI by GGL etc.

6. On 26.8.1998, GGL filed a Civil Suit No.1810/98 (hereinafter referred
to as “SUIT-I”) in the High Court of Delhi against MGG for the enforcement
of Clause 9.1 of AGREEMENT-I and for other reliefs:

Cancel the letter of offer dated 6.8.1998 made by the defendant for 20%
equity shares of Bombay Oxygen Corporation Ltd. and/or

Cancel the share purchase agreement dated 23.6.1997 whereby the defendant
has sought to purchase 30% +1 equity shares of Bombay Oxygen Corporation
Ltd. and/or

A decree of permanent injunction restraining the defendant from taking any
steps in pursuance of the letter of offer dated 6.8.1998 for 20% equity
shares of Bombay Oxygen Corporation Ltd. and the share purchase agreement
dated 23.6.1997 for purchase of 30%+1 equity shares of Bombay Oxygen
Corporation Ltd. in violation of the non-competition clause of the
agreement dated 12.5.1995 and/or

A decree of permanent injunction restraining the defendant from acquiring
any shares in Bombay Oxygen Corporation Ltd. on its own and without the
participation of plaintiff.

On 14.9.1998, GGL filed two applications seeking certain interim orders.
I.A. No.7248 of 1998 in the SUIT-I invoking Order 39 Rule 1&2 of the Code
of Civil Procedure, 1908 (hereinafter referred to as “CPC”) and OMP No. 205
of 1998 invoking Section 9 of the Arbitration & Conciliation Act, 1996
(hereinafter referred to as “A&C Act”). Interestingly the relief sought in
both the applications is substantially the same i.e., interim order
restraining the MGG from acquiring the shares of BOCL on its own. The
learned trial Judge dismissed both the applications by two separate orders
dated 22.9.1998. GGL carried the matter in intra court appeals.

7. By the appellate order dated 23.10.1998, a Division Bench of the
Delhi High Court restrained[1] MGG from acquiring the shares of the BOCL.

8. Aggrieved by the same, MGG moved this Court in Civil Appeal Nos. 728
and 729 of 1999. This Court by an interim order dated 18.12.1998 ordered
as follows:-

“Meanwhile, it will be open to the Petitioner – M/s.. Griesheim GMBH to
make payment for purchasing 10,000 (sic 30,000) shares from the public and
also to take delivery of these shares but they shall not take further steps
for the purpose of getting their names registered as shareholders in
respect of these shares.

Respondent No. 1 Goyal MG Gases Ltd is directed to nominate its Arbitrator
within a period of two weeks from today and take appropriate steps to pay
the full fees and it shall also file its claims statement within one week
thereafter.”

9. By a final order dated 8.2.1999, the said appeals were disposed:-

“Earlier by our order dated 18.12.98, we had permitted the appellant to
make payment to the shareholders. The payment having been made now custody
of those shares is with the appellant. Bombay oxygen wants to borrow
money from a bank and the appellant wants to be a guarantor on the strength
of those shares and for that reason it wants an order of this court
permitting it to do so.

We are told that two Arbitrators have already been appointed and the third
Arbitrator will be appointed within a short time. After considering the
rival submissions, we think it proper to pass the following order:

It will be open to Messer Griesheim Gmbh/the appellant to part with those
shares and keep them in custody of the concerned bank for the purpose of
entering into such a financial arrangement. It is, however, made clear
that so far as the question of registration and ownership of shares is
concerned that will have to be decided by the Arbitrators. It will be
open to the parties to approach the Arbitrators for obtaining interim
relief in that behalf.

Since the erstwhile owners of the shares have been paid their dues, they
have ceased to be owners of those shares and the beneficial interest in
them now vests in Messer Griesheim Gmbh or in Messer Griecheim Gmbh and
Goyal HG gases Limited jointly if the Arbitrators so decide. We direct
that all the disputes between the parties including the right to represent
on the board of Bombay Oxygen will now have to be decided by the
Arbitrators. If any necessity arises to approach this court, it will be
open to the parties to do so. Till any order to the contrary is passed by
the Arbitrators, our order dated 22.1.99 will continue to operate.

The appeals are disposed of accordingly.”

10. The petitioner (hereinafter referred to as ‘MHL’) in SLP(C) Nos.33429-
33434 of 2010 on hand is a company incorporated in British Virgin Islands
on 20.01.2000 by MGG and another company known as Morgan Trade and Commerce
which is a 100% owned subsidiary of GGL. The authorised share capital of
MHL is 10,000,000 DM (currency of Federal Republic of Germany) divided into
10,000,000 shares. It has two Directors, one representing MGG and the
other Morgan Trade and Commerce. Interesting feature of MHL is that the
shares of this company are bearer shares. It is an admitted case of all
the parties that the law of British Virgin Islands permits it.

11. MGG and GGL entered into a settlement[2] of their dispute (evidenced
by two documents dated 17.02.2000 and 13.3.2000) pursuant to which MGG
filed two applications (I.A.s 17 & 18 of 2000) in Civil Appeals No.728-729
of 1999, which had already been disposed of on 8.2.1999, praying that:

“(a) permit the said 75001 shares to be transferred and registered in the
name of Messer Holdings Ltd. and permit complete rights attached to these
shares to be enjoyed by Messer Holdings Ltd. pending registration of
transfer of shares and permit nominees to be appointed as Directors on the
Board of Bombay Oxygen Corporation Ltd. in accordance with law;

(b) direct that period from 23rd October, 1998 to date of order passed in
this application will be excluded in computing the period prescribed under
Section 108(1A) of the Companies Act, 1956 for the validity of the transfer
deeds.

(c) Pass such further order/orders as this Hon’ble Court may deem fit and
proper in the facts and circumstances of the present case.”

However, when the said I.As were taken up by this Court on 20th April,
2000, this Court ordered:

“Learned counsel for the applicant and respondent Nos.1 and 2 state that
dispute which was sought to be referred to the Arbitrator has been settled
between them. In view of this they want to move appropriate application to
withdraw from the arbitration proceedings. They seek time for the purpose.
List the matter on 5.5.2000.”

The only inference we can draw is that the prayers in I.As 17 & 18 of 2000
were not pressed[3].

12. Interestingly, after seeking this Court’s permission to withdraw from
the arbitration proceedings initiated earlier, MGG and GGL filed a joint
application before the arbitral tribunal on 9.8.2000 requesting the
arbitral tribunal to pass a consent award. On such an application, the ICC
Arbitral Tribunal passed a consent award on 21.9.2000, the operative
portion of which reads as follows:

“NOW THEREFORE the tribunal hereby makes the following award by consent of
the parties in terms of the Joint Application set out in Annexure “I”
hereto, which shall form part of this Award:

1(a) The 75001 shares of Bombay Oxygen Corporation Limited (BOCL)
purchased by the Respondent at a price of Rs.22.5 crores shall be held and
registered in the name of Messer Holdings Ltd. (MHL); however, for
technical and procedural reasons the shares will first be registered in the
name of the respondent and immediately thereafter the said shares will be
registered in the name of MHL as mentioned in para 2 of the Joint
Application. Complete rights attached to the 75001 shares of BOCL qua the
BOCL as well as transferos (transfer – sic) of the shares to the Respondent
(even pending registration in the name of the Respondent and/or in the name
of MHL) will be henceforth exercised by the Respondent through MHL who will
act for and on behalf of the Respondent. MHL will be authorised by Messer
Griesheim Gmbh (MCG) to delegate all or any of its powers mentioned above,
including the rights but not limited to attending general meetings of share
holders of BOCL and to vote therein and deciding and appointing nominees to
be appointed as directors on the board of BOCL.”

13. Pursuant to the consent award, sometime in the month of May 2000 MGG
handed over the shares certificate of 75001 shares of BOCL to MHL alongwith
duly filled transfer forms[4] and a power of attorney.

We are given to understand that the SUIT-I is eventually withdrawn by GGL.
It is necessary to mention here that by that time RUIAS had already filed
(on 28.4.1999) a suit inter alia against both MGG and GGL in the High Court
of Bombay.

SUIT- II IN THE HIGH COURT OF BOMBAY BY RUIAS ETC.

14. On 28.4.1999, RUIAS filed a Suit No.2499/1999 before Bombay High
Court (hereinafter referred to as SUIT-II) in substance seeking enforcement
of clause 6.1 of the AGREEMENT-II.

“(a)1(i) that it be declared that the negative covenant contained in Clause
6.1 of the agreement dated 23rd June 1997 being Ex. ‘B’ hereto is binding
on the Defendants;

(a)1(ii)(b) that the Defendants by themselves their agents and servants be
restrained by a perpetual order and injunction of this Hon’ble Court from

(i) committing breach of clause 6.1 of the Agreement dated 23rd June,
1997 being Ex. ‘B’ hereto;

transferring or selling or alienating the legal and/or beneficial interest
in the shares of Defendant No. 2 including those mentioned in Ex. ‘A’
hereto without first offering the same to the Plaintiffs in terms of Clause
6.1 of the Share Purchase Agreement dated 23rd June 1997, being Ex. ‘B’
hereto.

obtaining any award, decree order from any forum or court in violation of
clause 6.1 of the Share Purchase Agreement dated 23rd June 1997 being Ex.
‘B’ hereto.

making any claim before the Arbitrators or any court which if granted will
amount to a breach or violation of the provisions of Clause 6.1 of the said
Share Purchase Agreement dated 23rd June 1997, being Ex. ‘B’ hereto;

procuring any breach of the provisions of clause 6.1 of the said Share
Purchase Agreement dated 23rd June, 1997 being Ex. ‘B’ hereto;”

In the said Suit, RUIAS filed an application (Notice of Motion No.1804 of
1999) praying that MGG and GGL be restrained from committing breach of
Clause 6.1 of AGREEMENT-II. By an interim order dated 6.5.1999, MGG and
GGL were injuncted from committing breach of Clause 6.1 of AGREEMENT-II.
MGG filed an affidavit in the said application undertaking that it would
not breach Clause 6.1 of AGREEMENT-II. By an order dated 29.2.2000, Bombay
High Court disposed of the said application recording the undertaking filed
by MGG with a further direction that MGG and GGL “not to implement or
enforce any award made by the arbitrators without obtaining the leave of”
Bombay High Court:-

“The parties have agreed that for disposing of this motion in the following
terms, no reasons are necessary to be recorded.

1. Defendant No.1 stated that defendant No.1 is willing to and shall
abide by clause 6.1 of the agreement dated 23rd June 1997. Statement
accepted. In view of the statement made by defendant No.1, the following
interim order is passed against defendant No.1.

Interim Order in terms of prayer (a)(i).[5]

2. Defendant No.1 and 3 shall not act pursuant to implement or enforce
any award made by the arbitrators without first obtaining the leave of the
court and the court will consider the agreement between the plaintiffs and
defendant No.1.

3. The aforesaid order is made without prejudice to the rights, claims
and contentions of the parties.

4. The Notice of Motion is accordingly disposed off. It is clarified
that the parties are at liberty to adopt appropriate proceedings to enforce
their respective rights.

5. Parties to not (note - sic) on a copy of this order duly
authenticated by the associate of the Court.”

15. By a letter dated 31st May 2000, RUIAS intimated MGG and reiterated
on 1st June 2000, that AGREEMENT-II was terminated. Because according to
RUIAS establishment of MHL and the transfer of 75001 shares of BOCL to MHL
tantamounted to breach of clause 6.1 of AGREEMENT-II.

16. After obtaining the consent award on 21.9.2000, MGG filed an
application (Notice of Motion No.2933/2000) before the Bombay High Court in
SUIT-II seeking leave of the Court to implement and enforce the consent
award.

SUIT- III IN THE HIGH COURT OF BOMBAY

17. On 5.2.2001, RUIAS filed second Suit bearing No.509 of 2001
(hereinafter referred to as “SUIT- III”) before the Bombay High Court
praying:

“a) for a declaration that the Share Purchase Agreement dated 23rd June
1997 is liable to be rescinded;

b) for an order of this Hon’ble Court directing the said Share Purchase
Agreement dated 23rd June 1997 be rescinded;

c) that in the alternative to prayers (a) and (b) above, for a
declaration that the Share Purchase Agreement dated 23rd June 1997 was
voidable and has been validly avoided by the Plaintiffs;

d) that in the alternative to prayers (a), (b) and (c) above, for a
declaration that the Share Purchase Agreement dated 23rd June 1997 was
terminable by the Plaintiffs and has been validly terminated by the
Plaintiffs.

e) that in the alternative to prayers (a), (b), (c) and (d) above, for a
mandatory order and direction by this Hon’ble Court directing the 1st
Defendant to offer the said 75,001 shares to the Plaintiffs in accordance
with the procedure prescribed in Clause 6.1 of the Share Purchase Agreement
dated 23rd June 1997.

f) for a declaration that the acquisition of the said 30,000 shares
pursuant to the Public offer is illegal, unlawful, null and void and of no
legal effect whatsoever;

g) for a declaration that the said Agreement dated 17th February 2000
and the said Consent Award dated 21st September 2000 are not binding on the
Plaintiffs and/or Defendant No.2 and/or that the same are illegal, null and
void.

h) for a permanent injunction restraining the defendant No.1,3 and 4
from

(i) acting in pursuance of the Share Purchase Agreement dated 23rd
June 1997;

(ii) exercising any rights in respect of the said 75,001 shares (in
particular voting rights in connection therewith) and/or from receiving any
dividends, rights in respect of the same;

(iii) exercising any rights including its beneficial ownership
in, to, upon or in respect of the said 75,001 shares.

i) that the Defendants be restrained by permanent order and injunction
of this Hon’ble Court from transferring and/or registering and/or taking
any steps to transfer and/or register the said 75,001 shares in the name of
any person or persons, firm or body corporate including 1st and/or 3rd
and/or 4th Defendants without the consent of the Plaintiffs;

j) that the 1st defendant be ordered and decreed to deliver/return to
the respective plaintiffs the said 45,001 shares together with all
accretions thereto from 23rd June 1997 on such terms as this Hon’ble Court
directs;

k) for the purpose aforesaid the 1st defendant be ordered and decreed to
do and perform all acts, deeds, matters and things and to execute all
documents, deeds and writings in furtherance thereof.

18. In the said suit, RUIAS filed an application (Notice of Motion No.
392 of 2001) in substance seeking an injunction against MGG and GGL along
with MHL either from transferring the 75001 shares of BOCL in favour of MHL
or from exercising rights as beneficial owners of the said shares. In the
said suit, MHL filed an application (Notice of Motion No.534 of 2002) on
21.2.2002 seeking appointment of an administrator and receiver for the
administration of the assets of BOCL on the ground that RUIAS are causing
substantial damage to the assets of BOCL.

19. SUIT-II was amended from time to time on three occasions pursuant to
the orders of the Bombay High Court dated 22.02.2000, 04.10.2002 and
08.06.2011.

The prayer in SUIT-II after such Amendments;

“Rider-I(a)

(a) (i) For a declaration that the acquisition of the said 30,000 shares
pursuant to the public offer is illegal, null and void ab-initio and of no
legal effect whatsoever.

(ii) For a permanent order and injunction restraining the defendants from
exercising any rights in respect of the said 30,000 shares including and in
particular voting rights.

(b) (i) for a declaration that the said agreement dated 23rd June, 1997
(Exhibit –B hereto) stands validly terminated and/or avoided.

Rider-N Prayer (b)(ii)(a)

“(b)(ii)(a) that it be declared that Defendant Nos. 3 to 5 have no right,
title or interest of any nature whatsoever in respect of the 75001 shares
of Defendant No. 2”

Rider – O prayer (b)(ii)(b):

“(b)(ii)(b), that in the alternative to prayer (b)(ii) this Hon’ble Court
be pleased to order and direct the Defendant Nos. 1 and 3 to 5 to deliver
to the respective Plaintiffs 45001 shares of Defendant No. 2 as also to
return to the respective members of the public the 35000 shares;

(ii) that the 1st defendant Nos. 1, 3, 4 and 5 be ordered and
decreed to deliver/return to the respective plaintiffs the said 45,001
75,001 shares together with all accretions thereto from 23rd June, 1997 on
such terms as this Hon’ble Court directs.

(iii) for the purpose aforesaid the Ist defendant Nos. 1, 3, 4 and 5
be ordered and decreed to do and perform all acts, deeds, matters and
things and to execute all documents, deeds and writings in furtherance
thereof.

Rider-P prayer (b)(iii)(a)

“(b)(iii)(a), that in the event of the Defendant Nos. 1 and 3 to 5 failing
to deliver to the Plaintiffs the said 75001 shares of Defendant No. 2 the
same be cancelled and Defendant No. 2 be ordered and directed to issue
duplicate shares in the name of the Plaintiffs”

(iv) for a permanent order and injunction restraining the defendants from
transferring and/or registering and/or taking any steps to transfer and/or
register the said 75,001 shares in the name of any person or persons, firm
or body corporate including the 1st and/or 3rd and/or 4th defendants
without the consent of the plaintiffs.

(v) for a permanent order and injunction restraining defendant nos. 1, 3
and/or 4 and 5 from exercising any rights, including as beneficial owner,
in, to, upon, or in respect of the said 75,001 shares.

a(1)(i) In the alternative and in the event of prayer (b) not being
granted that it be declared that the negative covenant contained in Clause
6.1 of the agreement dated 23rd June 1977 being Ex. ‘B’ hereto is binding
on the Defendants;

(a)1(ii)(b) that the Defendants by themselves their agents and servants be
restrained by a perpetual order and injunction of this Hon’ble Court from.

committing breach of clause 6.1 of the Agreement dated 23rd June, 1977
being Exh. ‘B’ hereto;

transferring or selling or alienating the legal and/or beneficial interest
in the shares of Defendant No. 2 including those mentioned in Ex. ‘A’
hereto without first offering the same to the Plaintiffs in terms of Clause
6.1 of the Share Purchase Agreement dated 23rd June 1997, being Exh. ‘B’
hereto.

obtaining any award, decree order from any forum or court in violation of
clause 6.1 of the Share Purchase Agreement dated 23rd June, 1997 being Ex.
‘B’ hereto.

making any claim before the Arbitrators or any court which if granted will
amount to a breach or violation of the provisions of Clause 6.1. of the
said Share Purchase Agreement dated 23rd June 1997, being Ex. ‘B’ hereto;

procuring any breach of the provisions of clause 6.1 of the said share
Purchase Agreement dated 23rd June, 1977 being Ex. ‘B’ hereto;”

Rider-C

(b1)(a) In the alternative and in the event of prayer (b) not being granted
and In the event of it being held that the said agreement is void defendant
Nos. 1, 4 and 5 be ordered and decreed to deliver/return to the respective
Plaintiffs the said 45001 shares together with all accretions thereto from
23rd June 1977 on such terms of this Hon’ble Court may direct.

(b) For the purpose aforesaid defendant Nos. 1, 4 and 5 be ordered and
decreed to do and perform all acts, deeds, matters and things and to
execute all documents, deeds and writings in furtherance thereof.”

20. It appears that on 5.12.2002, RUIAS and MGG entered into a settlement
(evidenced by an agreement in writing) of the disputes between them by
allegedly rescinding the AGREEMENT-II. According to MHL, the terms of
settlement were not made known to either MHL or GGL for a long time. The
information regarding the agreement dated 5.12.2002 initially came to the
knowledge of MHL (allegedly) from the website of Security Exchange
Commission of United States.

The relevant portion of the settlement reads as under:-

“6. In the circumstances, “MGG” and the “Ruias” have agreed to fully and
finally settle all their disputes and differences by rescinding the “Ruia
Agreement” on the terms and conditions set forth in this Agreement.
However, “MGG” is not in a position to return to the “Ruias” the share
certificates and other relevant documents for the 45,001 shares of “BOCL”
(which is the subject matter of the “Ruia Agreement”) as they are not in
“MGG’s possession. “MGG” has no knowledge of the current whereabouts of
the said share certificates and other documents pertaining to the 45,001
shares and is not in a position to secure return/delivery of the same.

7. As “MGG” is no longer interested in acquiring any shares in “BOCL”,
as a further part of the settlement, it is hereby agreed that “MGG” hereby
sell/reverts/transfers/divests in favour of the “Ruias” all its right,
title and interest in the remaining 30,000 shares in “BOCL” which “MGG” had
acquired from the public, but which has also not been registered in the
name of “MGG” in the records of “BOCL”. However, “MGG” has no knowledge
of the current whereabouts of the share certificates and other documents /
pertaining to the 30,000 shares and is not in a position to secure
return/delivery of the same.

8. In consideration for the foregoing, “Ruias” agree to pay “MGG” a sum
of US $ 154,642 in respect of the 75,001 shares of “BOCL”, without any
other or further obligation whatsoever on the part of “MGG” to the “Ruias”
except as provided in this Agreement. The “Ruias” shall also not have any
further obligation to “MGG” except as provided in this Agreement.

****** ***** ****** ******

10. The parties agree that “MGG” do hereby fully and irrevocably
revert/sell, transfer and assign all its beneficial right, title and
interest in or in relation to the said 75001 shares in favour of “Ruias”
and shall, at the cost and expense of “Ruias”, execute and continue to
execute such instruments, documents, authorities etc., as may be necessary
or expedient in connection therewith and shall refrain from doing anything
inconsistent with the foregoing or the rights reverted/assigned/transferred
as above on and from the date of execution hereof. To this end and
purpose, an irrevocable Power of Attorney duly executed as per draft
enclosed herewith as Annexure I shall be put in escrow with Ms. Lira
Goswami, Advocate. Ms. Lira Goswami shall hand over the Power of Attorney
to the “Ruias” in accordance with written escrow instructions agreed to by
“Ruias” and MGG”.

11(a) The parties confirm and acknowledge that as the foregoing 45,001
shares of “BOCL” have not been registered in the name of “MGG” in the
records of “BOCL”, the said shares continue to be registered in the names
of the “Ruias”. Consequently, the rescission of the “Ruia Agreement” does
not involve any transfer from “MGG” to the “Ruias” in the books of “BOCL”
as the “Ruias” continue to be the registered shareholders. Nevertheless,
if any permission, approval or notification is required under Indian law
for implementing this Agreement, including without limitation, the
permission of the “RBI” for making the payment of US $ 154,642, the “Ruias”
shall be solely responsible and liable for obtaining all such necessary
approvals or permissions or for making the necessary filings/notifications,
at the sole cost and expense of the “Ruias”.

Similarly, the parties confirm and acknowledge that the foregoing 30,000
shares of “BOCL” have also not been registered in the name of “MGG” and
continue to be in the name of the Indian public shareholders.
Consequently, “Ruias” will be solely responsible for doing all acts, deeds
and things that may be necessary for effecting the transfer of these shares
from the currently registered shareholders to the “Ruias” at the sole cost
and expense of the “Ruias”.

****** ****** ****** ******

15. On execution of this Agreement, “Ruias” agree:

(a) not to prosecute the following proceedings pending in the Bombay High
Court and in Supreme Court of India against “MGG” or its affiliates or its
directors, officers or employees (excluding “MHL” and Goyal MG Gases Ltd.
but including directors nominated by “MGG” on the Board of “MHL” and/or
Goyal MG Gases Ltd.):

Civil Suit No. 2499 of 1999 titled Shyam Madan Mohan Ruia & Ors. Vs. Messer
Griesheim GmbH & Ors.

Civil Suit No. 509 of 2001 titled Shyam Madan Mohan Ruia & Ors. Vs.
Messer Griesheim GmbH & Ors.”

In spite of the said agreement, (the existence of which is not in dispute
now). RUIAS not only continued with SUITS II and III, but also amended
the Suit-II on 08.06.2011.

21. On 4.2.2008, BOCL executed a Development Agreement in favour of
another company known as HDIL granting development rights in respect of
three pieces of immovable properties admeasuring 15317.77 sq. mtrs.,
3513.70 sq. mtrs. and 47762.20 sq. mtrs. of land situated at Kurla Taluk of
Maharashtra allegedly owned by BOCL.

22. The next day BOCL informed the Bombay Stock Exchange about the above-
mentioned development agreement. On 26.3.2008, HDIL mortgaged the above-
mentioned property in favour of the Union Bank of India for securing a term
loan of 230 crores.

23. On 8.4.2008 MHL filed a Notice of Motion No. 1418 of 2008 in Appeal
No. 855 of 2003[6] seeking an injunction against the parties to the above-
mentioned Development Agreement along with various other reliefs (the
details of which are not necessary for the present).

24. By an order dated 30th April, 2008, a Division Bench of the Bombay
High Court while adjourning the hearing of the said Notice of Motion
recorded the undertakings on behalf of the HDIL that it will not claim any
equity whatsoever in the event of MHL’s success in the above-mentioned
Notice of Motion and demolish the construction, if any, made during the
pendency of the proceeding by the HDIL. It was also stated by them that
the property which was the subject matter of the Development Agreement had
already been mortgaged in favour of the Union Bank of India, however,
undertook not to create any 3rd party rights in the said property.

25. Aggrieved by the said order, MHL filed SLP No. 12734 of 2008 in this
Court on 8.5.2008. By an Order dated 16.5.2008, this Court, while issuing
notice on the said SLP granted an order of status quo regarding the nature,
title, etc. of the property in dispute. By an Order dated 23.6.2008, the
said SLP was disposed of directing that the status quo order granted
earlier on 16.5.2008 shall continue during the pendency of the Notice of
Motions and appeals before the High Court of Bombay.

SUIT-IV

26. On 23.4.2008, MHL filed Suit No.2410 of 2008 (hereinafter SUIT-IV)
against BOCL, RUIAS, HDIL etc. seeking various reliefs including a
declaration of ownership of 75001 shares of BOCL etc.

“q) That this Hon’ble Court be pleased to declare that the Plaintiff is
the beneficial owner of the suit shares being 75001 shares in the 1st
Defendant company, more particularly described in the schedule annexed as
Exhibit A hereto and is entitled to legal ownership thereof;

r) That the Defendant Nos.1 to 10 be directed by a mandatory order and
injunction of this Hon’ble Court to carry out all acts, deeds and things
and extend all cooperation necessary to secure registration of the suit
shares aggregating to 75001 shares in the 1st Defendant Company, more
particularly described in Exhibit A hereto in the name of the Plaintiff;

s) That this Hon’ble Court be pleased to declare that the purported
reversion/transfer of the suit shares being 75001 shares in the 1st
Defendant Company, more particularly described in the schedule annexed as
Exhibit A hereto by Defendant No.10 to Defendant nos.2 to 9 under the
purported Agreement dated 5th December, 2002 is illegal, null and void and
of no legal effect;

t) That this Hon’ble Court may be pleased to direct Defendant Nos.2 to 9
and 10 to deliver up the that the said Agreement dated 05.12.2002 at Ex: CC
for cancellation and this Hon’ble Court be pleased to cancel the same;

u) That this Hon’ble Court be pleased to issue an Order and injunction
restraining Defendant Nos.2 to 10 from exercising any rights whatsoever in
respect of the 75001 suit shares (more particularly described in the
schedule annexed as Exhibit A hereto) as also from representing to the
public at large that they are owners of the suit shares or have any
beneficial interest therein;

v) That this Hon’ble Court be pleased to declare that the purported
Development Agreement dated 4.2.2008 (Exhibit MM hereto) and both the
powers of attorney dated 05.02.2008 (Exhibit NN & OO thereto) and any other
documents or acts in pursuance thereof are illegal, null and void and of no
legal effect;

w) That this Hon’ble Court be pleased to direct the Defendants Nos.1 to
10 and 12 to deliver up the Development Agreement dated 04.02.2008 (Exhibit
MM hereto) along with the powers of attorney dated 05.02.2008 (Exhibit NN &
OO hereto) are illegal, null and void and of no legal effect; for
cancellation and this Hon’ble Court be pleased to cancel the same;

x) That this Hon’ble Court be pleased to declare that the purported
mortgage Deed dated 23.3.2008 at Exhibit XX hereto said to have been
created by Defendant No.12 in favour of Defendant No.13 is illegal, null
and void and of no legal effect;

y) That this Hon’ble Court be pleased to direct Defendant Nos.1 to 10,
12 and 13 to deliver up the said deed of mortgage dated 23.3.2008 at
Exhibit XX hereto or cancellation and this Hon’ble Court be pleased to
cancel the same;

z) That this Hon’ble Court be pleased to Order and decree Defendant
nos.2 to 10 to jointly and severally pay to the Plaintiff,
damages/compensation in the sum of Rs.500 crores as per the Particulars of
Claim annexed herewith as Exhibit ZZ along with interest thereon at the
rate of 18% per annum from the date of the suit till payment and/or
realisation;”

We understand that none of the defendants have filed their written
statements and no issues are framed so far.

27. It is in the background of the above-mentioned litigation these SLPs
are to be examined.

SLP(C) Nos. 33429-33434 of 2010 is filed by MHL with prayers:

“a) Grant special leave to appeal under Article 136 of the Constitution
of India against the impugned Final Judgment and Order dated 1.9.2010
passed by the Hon’ble High Court of Judicature at Bombay in Appeal No. 855
of 2003 in Notice of Motion No. 534 of 2002 in Suit No. 509 of 2001 with
Notice of Motion No. 1308 of 2005, Notice of Motion No. 3956 of 2005,
Notice of Motion No .4118 of 2007, Notice of Motion No. 1973 of 2008,
Notice of Motion No. 1418 of 2008; and

Pass such other order or orders as this Hon’ble Court may deem just and
proper in the facts and circumstances of the case.”

SLP(C) Nos.23088-23090 of 2012 is filed by GGL with prayers:

“a) grant Special Leave to Appeal against the impugned order dated
01.09.2010 passed by the Hon’ble High Court of Bombay in Appeal Nos. 840 of
2003, 841 of 2003 and 857 of 2003, whereby the Hon’ble High Court was
pleased to dismiss the appeals filed by the Petitioner Company and uphold
the order dated 26.03.2003 passed by the Ld. Single Judge in Notice of
Motion Nos. 3230 of 2000, 1231 of 2003 in Suit No. 2499 of 1999 and 392 of
2001 in Suit No. 509 of 2001; and

pass such other and further orders as this Hon’ble Court may deem just and
proper in the facts and circumstances of the present case.”

Both the sets of SLPs are filed aggrieved by the common order of a
Division Bench of Bombay High Court dated 01.09.2010 in Civil Appeals No.
855/2003, 840/2003, 841/2003 and 857/2003.

28. Civil Appeal 855/2003 was filed by MHL and the other three appeals
were filed by GGL. All the four appeals alongwith the various Notice of
Motions were dismissed with costs[7].

29. The subject matter of appeal No.855/203 is the order of the Single
Judge in Notice of Motion 534/2002 in SUIT-III. In the said Appeal, five
Notice of Motions were filed. They are 1308/2005, 3956/2005, 4118/2007,
1973/2008 and 1418/2008 seeking various reliefs.

30. The subject matter of appeals no.840, 841 and 857 of 2003 is order
dated 26.03.2003 of the Single Judge in Notice of Motion Nos.3230/2000 &
1231/2003 in SUIT-II and Notice of Motion No.392/2001 in Suit III. Both
the abovementioned Suits were filed by RUIAS.

31. SUIT-I is admittedly withdrawn, therefore, any order passed during
the pendency of the said suit by any court (including this Court) in any
proceeding arising out of the said suit automatically lapses with the
withdrawal of the suit. A logical consequence flowing from such lapsing
of the orders is that any act or omission of any party to the said suit,
either in pursuance of or in obedience to such interlocutory orders would
be without any legal efficacy.

32. SUITS II and III filed by the RUIAS are pending as of today. The
substance[8] of SUIT-II is that RUIAS do not want MGG to transfer any of
the shares of BOCL acquired by MGG pursuant to AGREMEENT-II in favour of
either GGL or MHL or any other person without first offering them to RUIAS.
Such a transfer in the opinion of RUIAS would be in violation of Clause 6.1
of the AGREEMENT-II.

Coming to SUIT-III, RUIAS want to wriggle out of the AGREEMENT-II and
therefore, the various alternative prayers! in substance seeking to nullify
the acquisition of 75001 shares by MGG under AGREEMENT-II[9]. They also
rely upon the events subsequent to 23.06.1997 - transactions between GGL
and MGG etc. and seek various prayers which are already noticed[10].
Having filed SUIT-III, RUIAS once again amended the SUIT-II enlarging the
scope of the Suit. Whether such amendments are legally tenable or not is a
question to be examined from the point of view of the principles governing
the law on the question of joinder of causes of action etc. Apart from
that the continuance of the SUIT-II and SUIT-III simultaneously raises too
many questions regarding their maintainability.

However, in our view, such questions need not be examined because RUIAS and
MGG entered into an agreement dated 05.12.2002 the gist of which is noticed
earlier at para 20 (supra). By the said agreement, RUIAS also agreed not
to prosecute SUITS-II and III insofar as the suits pertain to “MGG or its
affiliates….” etc.

“(a) not to prosecute the following proceedings pending in the Bombay High
Court and in Supreme Court of India against “MGG” or its affiliates or its
directors, officers or employees (excluding “MHL” and Goyal MG Gases Ltd.
but including directors nominated by “MGG” on the Board of “MHL” and/or
Goyal MG Gases Ltd.);

Civil Suit No.2499 of 1999 titled Shyam Madan Mohan Ruia & Ors. v. Messer
Griesheim GmbH & Ors.

Civil Suit No.509 of 2001 titled Shyam Madan Mohan Ruia & Ors. v. Messer
Griesheim GmbH & Ors.”

As a matter of fact, during the course of hearing of these SLPs also, both
RUIAS and MGG supported the case of each other in opposing these SLPs filed
by MHL and GGL.

33. As a consequence of the settlement dated 5.12.2002, RUIAS claim title
in 75001 shares of BOCL through MGG. We have already noticed, the said
75001 shares were initially acquired by MGG from RUIAS and the public under
AGREEMENT-II. But, so far the names of RUIAS are not entered in the
registers of BOCL as the holders of the share because of the various
interim orders mentioned earlier.

34. However, GGL and MHL dispute the title of MGG to the said 75001
shares. According to GGL and MHL, by the settlement dated 5.12.2002 MGG
had itself lost its title over the said shares as it had already
transferred its title in the said shares in favour of MHL pursuant to the
consent award dated 21.9.2000.

35. The existence of title in MGG in the said 75001 shares cannot be
disputed by either GGL or MHL, at least, till the date of the consent
award, i.e. 21.9.2000 because GGL and MHL’s claim for title over the said
shares flows from MGG’s prior title and the subsequent alleged transfer
pursuant to the consent award. In such a case, because of MGG’s purported
transfer of the title in the 75001 shares to RUIAS under the settlement
dated 5.12.2002, RUIAS should normally be entitled to have their names
entered into the records of BOCL as holders of the said shares by following
appropriate procedure. If either GGL or MHL is objecting to the right of
MGG to effect the said transfer in favour of RUIAS, they must establish a
superior title (to MGG) in the said shares. It goes without saying that it
can be done only in some legal action initiated by either GGL or MHL or
both jointly. But they cannot seek a declaration of their title in the
SUITS-II and III filed by the RUIAS. In a bid to establish their title MHL
filed SUIT-IV[11]. The right of MHL, if any, will have to be decided in
the said Suit. Until the said suit is decided, we do not see any ground in
law on which either GGL or MHL can object to the transfer of the shares in
favour of RUIAS pursuant to the settlement dated 5.12.2002.

36. What exactly is the procedure which RUIAS are required to follow to
effectuate the transfer of shares pursuant to the settlement dated
5.12.2002 is for RUIAS to explore. Because during the long pendency of the
instant litigation there is a considerable change in the law regarding the
procedure governing the transfer of shares in companies by virtue of
amendments in the Companies Act, 1956 and the advent of the Depositories
Act, 1996 etc. We make this observation because the 75001 shares acquired
by MGG pursuant to AGREEMENT-II could not be registered in the name of
MGG[12] because of the various interim orders passed by various courts at
different stages in SUITS-I, II and III. SUIT-I was withdrawn by the
plaintiff (GGL). In view of the subsequent settlement dated 5.12.2002
between MGG and RUIAS, no dispute survives between MGG and RUIAS.
Therefore, SUITS-II and III are required to be dismissed as without any
cause of action insofar as MGG and its officers etc., neither MHL nor GGL
can compel RUIAS to prosecute those suits.

37. Then we are left with the questions of continuance of SUITS II and
III against the other defendants (GGl & MHL etc.) and the prayers regarding
the physical custody of the shares[13]. As already noticed from the
settlement dated 5.12.2002, MGG and RUIAS are uncertain about the
whereabouts and custody of 75001 shares! of BOCL which were initially
acquired by MGG[14]. RUIAS having entered into settlement dated 5.12.2002
knowing fully well that MGG was not going to give custody of the above-
mentioned 75001 shares, purported to purchase the said shares and agreed
not to prosecute the SUITS-II and III against MGG. In such a case,
continuing the suits either against GGL or MHL or its agents etc. only for
the custody of the shares, in our opinion, is without any cause of action
on the part of the RUIAS. The prayers in SUIT-II and III in this regard
are:

(ii) that the 1st defendant Nos. 1, 3, 4 and 5 be ordered and decreed to
deliver/return to the respective plaintiffs the said 45,001 75,001 shares
together with all accretions thereto from 23rd June, 1997 on such terms as
this Hon’ble Court directs.
-
SUIT- II

j) that the 1st defendant be ordered and decreed to deliver/return to
the respective plaintiffs the said 45,001 shares together with all
accretions thereto from 23rd June 1997 on such terms as this Hon’ble Court
directs.

- SUIT-III

i.e. for a declaration in favour of RUIAS that they are entitled to the
recovery of 75001 shares jointly against MGG, GGL and MHL etc. RUIAS
having agreed not to prosecute the suits against MGG cannot continue the
suits against other defendants in the suits whose claim (if any) rests on
the right and title of MGG.

The continuance of the SUITS-II and III, in our opinion, is, therefore,
wholly without any cause of action and an abuse of the judicial
process.[15] They are, therefore, required to be dismissed and accordingly
dismissed. Consequently, all the interim orders passed by the various
Courts (including this Court) earlier in proceedings arising out of the
said two suits lapse. We also declare that all interim orders passed by
any Court in any proceeding arising out of SUIT-I also lapsed in view of
the withdrawal of the suit by GGL.

Therefore, these SLPs filed by MHL and GGL purportedly aggrieved by the
impugned orders passed in the various applications filed in the two suits
filed by RUIAS become infructuous. Therefore, the said SLPs arising
therefrom are dismissed.

38. The consequent factual position would be:

(i) the legal rights acquired (whatever they are) by MGG in 45001 shares
of BOCL purchased from RUIAS pursuant to AGREEMENT-II should revert back to
RUIAS unless it is found that the purported transfer of 45001 shares by MGG
pursuant to the consent award dated 21.09.2000 in favour of MHL created any
right or interest in favour of MHL. Such a claim of MHL can only be
examined in SUIT-IV filed by MHL.

(ii) Another 30000 shares were acquired by MGG from the public pursuant to
AGREEMENT-II MGG purported to transfer them by virtue of the settlement
dated 05.12.2002 in favour of RUIAS. If either GGL or MHL has any claim
over those shares, such a claim must be made and established by them in
accordance with law, but not in the suits filed by RUIAS. In order to
establish such a claim, MHL already filed SUIT-IV to which both GGL and MGG
are parties apart from Goyals and others.

39. However, in the absence of any legally established title as on today to
the abovementioned shares in any party other than MGG[16], whether RUIAS
would be entitled pursuant to the settlement dated 05.12.2002 to have their
names entered into the registers of the BOCL as holders of the said shares
is a matter for RUIAS to explore[17]. However, such an entitlement if any
should be subject to the result of the SUIT-IV.

40. We make it clear that we are not deciding by this order, the
existence or otherwise of any right or its enforceability in the 75001
shares of BOCL in favour of either MHL or GGL. It is open to them to
establish their right in SUIT-IV. The defendants in the SUIT-IV are at
liberty to raise every defence available in law and fact to them.

41. A great deal of effort was made both by RUIAS and MGG to convince the
court that in view of the protracted litigation between the parties this
court should examine all the questions of rights, title and interest in
these shares between the various parties as if this were the court of first
instance trying these various suits.

42. The examination of various questions raised by the petitioners in
these SLPs, in our opinion, is wholly uncalled for in the abovementioned
factual background.

43. The net effect of all the litigation is this. For the last 18 years,
the litigation is going on. Considerable judicial time of this country is
spent on this litigation. The conduct of none of the parties to this
litigation is wholesome. The instant SLPs arise out of various
interlocutory proceedings. Arguments were advanced on either side for a
period of about 18 working days as if this Court were a Court of Original
Jurisdiction trying the various above-mentioned suits. The fact remains
that in none of the suits even issues have been framed so far. The
learned counsel appearing for the parties very vehemently urged that there
should be a finality to the litigation and therefore this Court should
examine every question of fact and law thrown up by the enormous
litigation. We believe that it is only the parties who are to be blamed
for the state of affairs. This case, in our view, is a classic example of
the abuse of the judicial process by unscrupulous litigants with money
power, all in the name of legal rights by resorting to half-truths,
misleading representations and suppression of facts. Each and every party
is guilty of one or the other of the above-mentioned misconducts. It can
be demonstrated (by a more elaborate explanation but we believe the facts
narrated so far would be sufficient to indicate) but we do not wish to
waste any more time in these matters.

44. This case should also serve as proof of the abuse of the
discretionary Jurisdiction of this Court under Article 136 by the rich and
powerful in the name of a ‘fight for justice’ at each and every
interlocutory step of a suit. Enormous amount of judicial time of this
Court and two High Courts was spent on this litigation. Most of it is
avoidable and could have been well spent on more deserving cases.

This Court in Ramrameshwari Devi & Others v. Nirmala Devi & Others, (2011)
8 SCC 249 observed at para 54;

“54. While imposing costs we have to take into consideration pragmatic
realities and be realistic as to what the defendants or the respondents had
to actually incur in contesting the litigation before different courts.
We have to also broadly take into consideration the prevalent fee structure
of the lawyers and other miscellaneous expenses which have to be incurred
towards drafting and filing of the counter-affidavit, miscellaneous charges
towards typing, photocopying, court fee, etc.”

45. We therefore, deem it appropriate to impose exemplary costs
quantified at Rs.25,00,000.00 (Rupees Twenty Five Lakhs only) to be paid by
each of the three parties i.e. GGL, MGG and RUIAS. The said amount is to
be paid to National Legal Services Authority as compensation for the loss
of judicial time of this country and the same may be utilized by the
National Legal Services Authority to fund poor litigants to pursue their
claims before this Court in deserving cases.

….………….……………….J.
(J.
Chelameswar)

…….……….……………….J.
(Abhay Manohar Sapre)
New Delhi;
April 19, 2016
-----------------------
[1] For the aforesaid reasons, we allow both the appeals and restrain
Messer from taking any steps to acquire shares of BOCL in pursuance of
Share Purchase Agreement dated 23rd June, 1997, till the decision of the
arbitration proceedings and the suit. In the facts and circumstances of
the case parties are left to bear their own costs. [FAO (OS) No.251 of
1998 and FAO (OS) No.250 of 1998]

[2] It is stated in the IAs No.17-18 of 2000 regarding the settlement
as follows:-

Para 7. The original dispute between the appellant and the respondent
No.1 was regarding the acquisition of shares in Bombay Oxygen Corporation
Ltd. and the control thereof. The appellant and the respondents have since
settled their dispute. Under the settlement, the parties have agreed that
the 75001 shares (of Bombay Oxygen Corporation Ltd.) purchased at a price
of Rs.22.5 crores shall now be registered in the name of a new company
Messer Holdings Ltd., referred to herein below.

Para 8. Pursuant to the settlement the appellant and the respondent
No.1 (through its subsidiary) have incorporated a joint venture company
outside India being Messer Holdings Ltd. In fact, this compromise was
contemplated by the parties during the hearing of the above civil appeals
but could not be materialized before the disposal of the civil appeals. It
is in the name of Messer Holdings Ltd. that the parties propose to register
the 75001 shares.

[3] The whole process is strange. GGL simultaneously pursued the
remedies (Suit-I and an arbitration proceeding) for the resolution of the
dispute with MGG when the parties to the suit settled their dispute by
mutual agreement, there is no need to approach this Court by filing
interlocutory applications in appeals which had already been disposed off.
More particularly, when those appeals arose out of interlocutory
proceedings (i) in a pending suit, and (ii) a proceeding under Section 9 of
the A & C Act, 1996 which empowers the “civil court” to pass appropriate
orders as an interim measure for protecting the interests of parties to a
dispute which the parties had agreed to get resolved by an arbitration.
If really the dispute between the parties is settled, nothing prevented the
plaintiff (GGL) from either withdrawing the suit or praying for a decree in
terms of the settlement between the parties, or in the alternative, praying
the arbitrators to pass an award in terms of the settlement between the
parties, because under the A&C Act, 1996 an award is as efficacious as a
decree of a civil court. But the parties i.e, MGG and GGL desired “to
withdraw from arbitration proceedings”.

[4] As required under the law as it was on that date

[5] Prayer (a) - That pending the hearing and final disposal of the
suit defendant Nos.1, 3 and 4 be restrained by an ordr of injunction of
this Hon’ble Court from:

(i) committing breach of clause 6.1 of the agreement dated 23rd June,
1997 being Ex.”B” to the plaint.

[6] Appeal No. 855 of 2003 on the file of the Bombay High Court was
filed by MHL aggrieved by an order dismissing N.M. no .534 of 2002 in Suit-
II filed by MHL seeking the appointment of an administrator to BOCL and
Receiver for the assets of the said Company.

[7] All the four Appeals being Appeal Nos.855/2003, 840/2003, 841/2003
and Appeal No.857/2003 are dismissed with costs.

Notice of Motion Nos. 1308/2005, 3956/2005, 4118/2007, 1973/2008,
1418/2008, 29/2006, 3112/2003, 3113/2002 and Notice of Motion No.3115/2003
in the respective Appeals are also disposed of with the above observations.

[8] RUIAS amended the said suits from time to time we find it a little
difficult to understand the legality and the purpose of the SUIT-II and its
amendment subsequent to the filing of the SUIT-III We do not wish to
examine those questions as such enquiry would be purposeless at this stage
in view of the subsequent developments.

[9] Prayers (a) to (f) of Suit-III (See para 17 supra)

[10] Prayer (g) to (k) of Suit III (See para 17 supra)

[11] See prayer (q) in SUIT IV (extracted at para 26 supra)

[12] See para 7 and 11(a) of the settlement dated 5.12.2002 extracted at
para 20 supra

[13] There is no whisper in the plaints of either Suit II or III, of MGG
having had obtained the custody of the share certificates either from RUIAS
(of 45001 shares) or from the public (of 30000 shares).

[14] See paras 6 and 7 of the settlement dated 5.12.2002 extracted at
para 20 supra.

[15] See K.K. Modi v. K.N. Modi & Others, (1998) 3 SCC 573

Para 42- “Under Order 6 Rule 16, the court may, at any stage of the
proceeding, order to be struck out, inter alia, any matter in any pleading
which is otherwise an abuse of the process of the court. Mulla in his
treatise on the Code of Civil Procedure, (15th Edn., Vol. II, p. 1179, note
7) has stated that power under clause (c) of Order 6 Rule 16 of the Code is
confined to cases where the abuse of the process of the court is manifest
from the pleadings; and that this power is unlike the power under Section
151 whereunder courts have inherent power to strike out pleadings or to
stay or dismiss proceedings which are an abuse of their process. In the
present case the High Court has held the suit to be an abuse of the process
of the court on the basis of what is stated in the plaint.”

Para 43- “The Supreme Court Practice 1995 published by Sweet &
Maxwell in paragraphs 18/19/33 (p. 344) explains the phrase “abuse of the
process of the court” thus:

“This term connotes that the process of the court must be used bona
fide and properly and must not be abused. The court will prevent improper
use of its machinery and will in a proper case, summarily prevent its
machinery from being used as a means of vexation and oppression in the
process of litigation. … The categories of conduct rendering a claim
frivolous, vexatious or an abuse of process are not closed but depend on
all the relevant circumstances. And for this purpose considerations of
public policy and the interests of justice may be very material.” ”

Para 44- “One of the examples cited as an abuse of the process of the
court is relitigation. It is an abuse of the process of the court and
contrary to justice and public policy for a party to relitigate the same
issue which has already been tried and decided earlier against him. The
reagitation may or may not be barred as res judicata. But if the same issue
is sought to be reagitated, it also amounts to an abuse of the process of
the court. A proceeding being filed for a collateral purpose, or a spurious
claim being made in litigation may also in a given set of facts amount to
an abuse of the process of the court. Frivolous or vexatious proceedings
may also amount to an abuse of the process of the court especially where
the proceedings are absolutely groundless. The court then has the power to
stop such proceedings summarily and prevent the time of the public and the
court from being wasted. Undoubtedly, it is a matter of the court's
discretion whether such proceedings should be stopped or not; and this
discretion has to be exercised with circumspection. It is a jurisdiction
which should be sparingly exercised, and exercised only in special cases.
The court should also be satisfied that there is no chance of the suit
succeeding.”

[16] Even MGG’s claim was that they had only a beneficial interest in the
said shares, as the shares were never registered in the name of MGG.

[17] There is no prayer in the Suits II and III seeking the declaration
of title of RUIAS based on the settlement dated 05.12.2002 - for that
matter, there is no whisper about the said settlement!

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