Writ appeal dismissed for non-compliance & abuse of process. Exemplary costs imposed.

The court dismissed the writ appeal, upholding the learned Single Judge's order. The appeal was found to be not maintainable due to the appellant's failure to comply with legal requirements. The court also found the appellant's conduct to be an abuse of the judicial process, including forum shopping and engaging in frivolous litigation. Exemplary costs of Rs. 10,00,000 were imposed on the appellant to deter vexatious litigation and uphold the integrity of the judicial system.

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Issues Involved:
1. Maintainability of the writ appeal.
2. Alleged financial irregularities and fraud in the merger of companies.
3. Application of the principle of res judicata.
4. Allegations of forum shopping and abuse of process.
5. Imposition of costs for frivolous litigation.

Detailed Analysis:

1. Maintainability of the Writ Appeal:
The respondents argued that the writ appeal is not maintainable because the appellant's license as a not-for-profit company was revoked, and it was directed to add "Private Limited" to its name. The appellant's failure to comply rendered the appeal invalid. Additionally, the appellant did not have the requisite number of shareholders to function as a company under the Companies Act, further questioning its legal standing to file the appeal.

2. Alleged Financial Irregularities and Fraud in the Merger of Companies:
The appellant, a not-for-profit company, filed the writ petition alleging financial irregularities and fraud in the merger of three companies (Vidya Investment and Trading Company Private Limited, Regal Investment and Trading Company Private Limited, and Napean Trading and Investment Company Private Limited) with the 5th respondent. The appellant sought various directions from the court, including investigations under Sections 212, 241, and 439(2) of the Companies Act, 2013, and prosecution under Sections 447, 448, and 449 of the same Act. The appellant claimed that the merger caused a significant loss to the state exchequer.

3. Application of the Principle of Res Judicata:
The learned Single Judge dismissed the writ petition by applying the principle of res judicata, relying on the judgment in Sarguja Transport Service Vs. State Transport Appellate Tribunal, M.P.Gwalior and others [(1987) 1 SCC 5]. It was argued that the appellant's previous PIL (W.P. No.3635/2020) on the same matter was withdrawn unconditionally, and thus, the appellant was barred from raising the same issues again in a new writ petition.

4. Allegations of Forum Shopping and Abuse of Process:
The court observed that the appellant had filed multiple proceedings on the same cause of action, including petitions before the High Court of Delhi, the National Company Law Tribunal (NCLT), and the National Company Law Appellate Tribunal (NCLAT). The court noted that the appellant was engaging in forum shopping and abusing the judicial process by repeatedly filing petitions with minor changes in the prayer clauses. This behavior was deemed to amount to criminal contempt.

5. Imposition of Costs for Frivolous Litigation:
The learned Single Judge imposed exemplary costs of Rs. 10,00,000 on the appellant for wasting the court's valuable time with frivolous litigation. The court emphasized the need to curb vexatious litigation to ensure the effective administration of justice. The appellant's repeated unsuccessful attempts to challenge the merger were seen as an abuse of the legal process, justifying the imposition of punitive costs.

Conclusion:
The court dismissed the writ appeal, upholding the learned Single Judge's order. The appeal was found to be not maintainable, and the appellant's conduct was deemed to be an abuse of the judicial process. The imposition of exemplary costs was affirmed, and the court reiterated the importance of preventing frivolous litigation to maintain the integrity of the judicial system.

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