TaxTMI 
TaxTMI 
2003 (9) TMI 541
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....jali Hospital". The defendants herein are medical practitioners/Doctors who were permitted by the plaintiff to practice their medical profession from the said hospital. Defendant No. 1 is surgeon, Defendant No. 2 is Pediatrician, Defendant No. 3 Orthopaediatrition. Defendants were allowed space/work chambers in the hospital purely on leave basis to carry on their medical profession. The defendants are also shareholders of the plaintiff company and they together hold approximately 18% of the total paid up capital of the company. Earlier defendants were also Directors of the plaintiff company but vide resolution dated 21-6-2003 they were voted out from Directorship in extraordinary general meeting of the company. Then by subsequent decision taken by the company on 23-6-2003, the defendants were removed from the hospital and the permission granted to them to carry on their professional work from the premises of the hospital and the facility to use the space/chambers allowed to them was also withdrawn. It is alleged that with the removal from the Directorship of the company and withdrawal of facility of the space/working chambers to carry on their profession from hospital premises, the....
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....ral meeting held on 21-6-2003, the defendants were removed from the Directorship. Then in a subsequent meeting of Board of Directorship held on 21-6-2003 there was discussion regarding fresh terms and conditions for all the Doctors including defendants, for working in the hospital. Accordingly, a circular was issued to all the Doctors requesting them to attend office of the Chairman-cum-Managing Director by 10 A.M. on 23-6-2003 to discuss and finalize fresh terms and conditions of the working in the hospital. Defendants, however, did not attend office of the Chairman-cum-Managing Director. Thereafter a meeting of the Board of Directors was held on 25-6-2003 and necessary resolution was passed for removal of the defendants from the hospital premises and withdrawing permission given to them for carrying on their professional work from the hospital. Details of various acts of misappropriation, misconduct are given in para No. 13 (i), ( ii) and (iv) of the plaint. It is alleged that despite removal of the defendants from the hospital and withdrawal of the permission given to them for carrying on their professional work from the hospital premises they illegally and unlawfully entered in....
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.... now one of the Directors and majority shareholder of the plaintiff company, volunteered to join the said Doctors in building the hospital. 7. After discussions, the parties conceived of a basic scheme and structure for building the said hospital. The structure was that the venture of hospital shall be undertaken in partnership. The partnership shall have 3 groups. The answering defendants formed one group, Shri Arun Mittal formed the second group, and Dr. Chander Vir and his wife formed the third group. The terms of partnership were that the 3 groups shall hold equal shareholding in the company i.e., 33% each. The partnership would purchase the said plot and after purchase, the 3 groups shall jointly erect on the plot a hospital. A few pillars had already been erected by the original promoters which was as good as no construction on a plot. The partnership was to operate the said hospital. The answering Defendants and Dr. Chander Vir were to have permanent chambers in the hospital, each of them having right in perpetuity to practice from the said nursing home for which the separate working chambers were provided in the hospital. It was also agreed that the hospital shall not enga....
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....ittal and his wife Rosy Mittal on the other side whereby the defendants were conferred rights in perpetuity to carry on their medical profession from chamber allotted to them in the hospital. It is contention of defendants that later on Arun Mittal allotted some more shares to some of his relations and appointed them as Directors. With the passage of time difference crept up between the two groups, namely Arun Mittal group who is majority shareholder and the defendant Doctors who were in minority, holding only about 18% of the share capital. Sh. Arun Mittal issued a notice dated 22-1-2003 to convene a meeting of Board of Directors for considering to increase the share capital and for calling AGM to take steps against defendants. The defendants protested against the said agenda. Later on defendants also came to know that Arun Mittal had fabricated record of the plaintiff company which were in his custody and appointed some of his relations as Directors of the Company and also allotted shares to them at the back of the defendants. In these circumstances the answering defendants had filed suit No. 383/2003 in this court challenging the validity of various meetings held on different da....
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....the Company Act to remove or elect Directors in the manner prescribed under the Act. Ultimately, the appeal as well as defendants' C.M. No. 631/2003 containing the prayer to restrain the company from in any manner disturbing, obstructing, interfering with their professional work being done from the cabins/chambers in the said hospital was rejected. 14. It may be pointed out here that in the meantime the defendants had filed another suit being suit No. 726/2003 with the following prayers :- (a)Pass a decree of permanent prohibitory injunction restraining the defendants from in any manner directly or indirectly dispossessing, removing or otherwise obstructing or interfering with the peaceful conduct of profession of the Plaintiffs from the Defendant-6 hospital located at 3, MMTC/STC Colony, New Delhi in perpetuity, and from in any manner engaging at the said hospital any doctors or medical professionals in disciplines/fields of the Plaintiffs i.e., Surgery, Pediatrics and Orthopaedics; (b)Any other decree(s) or order(s) or direction(s) in favour of the plaintiffs and against the defendants as may be deemed just and proper in the facts and circumstances of the case; (c)Grant costs....
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....umstances of the present case the grant of perpetual injunction will be adequate relief for the plaintiffs or the plaintiff must necessarily seek the relief of possession. 16. In this connection, it is necessary to examine the nature of possession which the defendants claim over chambers alloted to them in the hospital under MOU dated 22-9-1992 and 3-8-1995. Defendants claim that they are in settled possession of working space/chamber in the hospital since 1992 on the basis of the said MOUs and after withdrawal of permission by the plaintiff on 23-6-2003 they can at worst be treated as trespasser. Therefore, in view of the decision of the Supreme Court in the case of Puran Singh v. State of Punjab [1975] 4 SCC 518 the defendants cannot be dispossessed except in due course of law. In that case, Supreme Court was dealing with the case of trespasser who had forcibly taken possession of the land and had sown crops thereon. The Apex Court was dealing with the question of right of private defence of property in a criminal case. Referring to an earlier decision in the case of Munshi Ram v. Delhi Administration AIR 1968 SC 702 it was observed that even true owners have no right to disposs....
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....had grown any crop. If the crop had been grown by the trespasser, then even the true owner has no right to destroy the crop grown by the trespasser and take forcible possession, in which case the trespasser will have a right of private defence and the true owner will have no right of private defence." (P. 527) 17. In the present case, defendants came to occupy the chambers on the basis of MOUs dated 22-9-1992 and 3-8-1995 as they were Directors of the Company at that time. Besides, they have rendered services to the hospital and in consideration thereof they were allowed the facility to carry on their profession from the chambers in the hospital. It is nobody's case that the defendants occupied chambers by force. So the question of their claiming settled possession as trespasser as referred to in the case of Puran Singh (supra) does not arise. The word 'settled possession' in the case of Puran Singh (supra ) and in the case of Munshi Ram's (supra) has been used in the sense of 'adverse possession'. Where a trespasser occupies the property by force and such occupation is of sufficiently long duration, open, exclusive and hostile to the true owner, it is called 'settled possession' ....
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....elationship, the defendants cannot be allowed to claim his own possession. The agents holds the principle's property only on behalf of the principle. He acquires no interest for himself in such properties. His possession is the possession of the principal for all purposes. The defendants' claim for right to carry on their medical profession in perpetuity from the space/chamber allotted by the company has been given up by themselves by withdrawing suit No. 726/2003 and has been expressly declined by the Division Bench vide order dated 20-6-2003 in FAO (OS) 244/2003. Therefore, at this stage, nature of their possession can be held to be no better of that an agent or ex-employee who were allowed to use the premises because of their fudiciary relationship with the company, being ex-Directors. They cannot claim 'settled possession'/'adverse possession' in the sense in which the word is used in the case of Puran Singh (supra). Rather they are under obligation to hand over the possession back to the company. Their refusal to do so is culpable and punishable as an offence under section 630 of Company Act. 18. Learned counsel for the defendants referred to various other authorities which m....
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....rdance with the procedures established by law. Obviously, it would mean that if in the present case the court after considering the rival contentions of the parties comes to the conclusion that prohibitory injunction as prayed can be issued, it will meet the requirement of "due course of law". Due course of law does not necessarily mean that the plaintiff has to file a suit for possession. If relief of prohibitory injunction suffices, there is no need for plaintiff to file suit for recovery of possession. In the case of East India Hotels Ltd. (supra) Hon'ble Supreme Court held that even a trespasser or licensee whose license has been terminated is entitled to protection of due process of law. This order was passed by Hon'ble Mr. Justice K. Ramaswamy on an action brought by the licensee whose license had been terminated and the possession was taken from him on the assurance that it will be handed over to him after repairs. In the present case, the defendants have already availed their remedy. They have been denied the relief by the Division Bench in FAO (OS) 244/2003 arising out of suit No. 383/2003 and they have themselves give up all the claims for due protection of law by withdra....
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....eedless to say that there cannot be any analogy between the possession of tenant whose tenancy has been terminated and the possession of the agent/ex-employee whose employment has been terminated. 20. Learned counsel for the defendants contended that order dated 20-6-2003 of the Division Bench in FAO (OS) 244/2003 in suit No. 383/2003 is based on the decision of Supreme Court in the case of V.B. Rangaraj v. V.B. Gopalakrishnan [1992] 73 Comp. Cas. 201 but in subsequent decision in the case of Dr. Renuka Dalta v. Solvay Pharmaceutical B.V. SLP C No. 18035/2000 the Apex Court has observed that the said judgment requires reconsideration. Further contention of the learned counsel for the defendants is that in the case of M.S. Madhusoodanan v. Kerala Kaumudi (P.) Ltd. 2003 (6) SCALE 191 the decision in the case of V.B. Rangaraj (supra) has been distinguished by the Supreme Court with the observation that in V.B. Rangaraj ( supra) the Apex Court did not hold that all agreements between the shareholders if not incorporated in the Article of Association of the company, are not binding on the company. As already observed the order of the Division Bench dated 20-6-2003 passed in FAO (OS) 24....
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....the requirement of first obtaining decree of possession will not apply. In the case of Hashmat Hussain v. Inayatullah AIR 1958 All. 706 while analysing section 56 of the Specific Relief Act (Old), the Division Bench of Allahabad High Court held that the Court will not interfere by way of injunction when the plaintiff is out of possession, unless there is some privity between the parties. In the present case there is privity between the parties as the defendants came to occupy the chambers/cabins in their capacity as Directors of the plaintiff-company and in the eye of law their possession is now that of an ex-employee who were allowed the facility because of fiduciary relationship. Therefore, possession will be deemed to be of the company which can file suit for injunction simplicitor without seeking the relief of possession. 22. The next contention of the learned counsel for the defendants was that an injunction cannot be issued which has the effect of changing the status quo and is in the nature of mandatory injunction. Reference was made to the decision in the case of Dorab Cawasji Warden v. Coomi Sorab Warden [1990] 2 SCC 117 and Spectrum Technologies USA Inc. v. Spectrum Powe....
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.... from possession of an immovable property has been recognized as causing irreparable loss and injury to the party concerned. The injury or loss referred to in Order 39 rule 2 CPC means any invasion or infraction of a legal right giving rise to the right of action at the instance of the party claiming that right. Balance of convenience means comparative mischief or inconvenience that may be caused to the either party in the event of refusal or grant of injunction. In the case of G.M. Modi Hospital & Research Centre Medical Science v. Sankar Singh Bhandari AIR 1996 Delhi 1. Learned Single Judge of this court restored the order of learned Civil Judge refusing injunction to hutment dwellers who were engaged as labourers by the contractor while executing work in the hospital premises. While dealing with the question of balance of convenience, in para 21 of the judgment it was observed that in such cases the balance of risk of doing injustice would provide the answer to the question of balance of convenience. Learned Single Judge held that the balance of convenience would lie in favour of the hospital as against the hutment dwellers who have absolutely no right whatsoever to occupy the p....