TaxTMI 
TaxTMI 
2012 (12) TMI 680
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.... in United Kingdom having expertise in providing consultancy services relating to business setup in the telecom sector all over the world, more particularly in India. The plaintiff no.2 is a Limited Liability Partnership incorporated under the laws of the United Kingdom wherein the plaintiff no.1 along with one Triassic Investments Ltd. are the members. The defendant no.1, Tower Vision Limited, TVL, is a company incorporated in Israel. The case of the plaintiffs is that the promoters of defendant no.1 company had approached the plaintiffs sometime in the year 2004-05 for setting up the Cellular Tower Business in India and it was promised by the defendant no.1 that in return the plaintiffs would be given sizeable share in the business of defendant no.1 company apart from compensating the plaintiffs for their expert services. Such a promise made by the defendant no.1 was duly recorded in the First Consultancy Agreement dated 1.8.2005, wherein it was specifically agreed that apart from the compensation for its services, the plaintiff no.2 shall also have an irrevocable right to purchase 7% equity shares of the defendant no.1 company at any time for a nominal sum. With the execution of....
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....with a view to confirm an absolute and unconditional 7% right/interest in the business of the Limited Partnership in favour of the plaintiffs, a separate Share Entitlement Document dated 17.10.2006 was executed by defendant no. 2 partnership. In the said document, the defendant no.2 also confirmed that in case of any structural changes resulting in the partners holding their interest in the Tower Management business through any other entity, the plaintiffs would be entitled to receive their absolute and unconditional 7% rights in any such entity which would be established by the partners of the partnership. It was also clarified in the said document that the Tower Management business of the partners as on that date was being carried out 'via' Tower Vision Mauritius Limited. It is the case of the plaintiffs that on or about 21.11.2006, the plaintiff no.1 made a request to defendant nos. 1 and 2 to transfer the said 7% rights in favour of M/s Triassic Investments Ltd. based on the said Share Entitlement Document granting an absolute and unconditional 7% rights to the plaintiffs in the partnership business. As per the plaintiffs, they were informed by the defendants that they were pro....
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....s the Tower Management business of defendant no.3 in India, the plaintiffs were left with no other option but to approach this court to seek declaration to the effect that the plaintiffs are entitled to hold 7% of the entire business of defendant no.2 in India or entitled to any benefit arising out of their said share in the business and assets of defendant no.3. It is also the case of the plaintiffs that the defendants are already engaged into major negotiations with various multinational banks and financial institutions for transferring and selling their entire assets and if they succeed in such designs, then the rights of the plaintiffs would be seriously affected and jeopardized. It is also the case of the plaintiffs that the Trustee, i.e, defendant no.6 herein and the other partners of the defendant no.2 partnership owe a fiduciary duty towards the plaintiffs for safeguarding their 7% interest/rights in the business of defendant no.2 partnership, but the defendants clearly seem to be determined in breaching the said fiduciary obligation towards the plaintiffs to the detriment of their interest. Based on these averments, the plaintiffs have approached this court praying for the....
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....plication under Order 39 Rule 1 and 2 read with Section 151 of CPC, for the grant of interim stay. Vide ex-parte order dated 20.1.2012, the defendant nos. 2,3 and 4 were ordered not to prejudicially affect 7% share of the plaintiffs in any manner and were restrained from diluting any of their shareholdings to that extent in favour of any third party. 4. Aggrieved by the said order dated 20.1.2012, the defendants filed application No. 4784/2012 under Order 39 Rule 4, CPC for vacation of stay and IA No. 4786/2012 under Order 7 Rule 11, CPC for rejection of plaint. The defendants also moved an application, i.e. IA No. 4785/2012, under Sections 16 to 19 of CPC for challenging the jurisdiction of this court. Pending disposal of these applications, the defendant No. 3 filed two separate appeals vide FAO (OS) 242/12 & FAO (OS) 243/2012 challenging the ex-parte order dated 20.1.2012 and subsequent interim orders passed by this court on various dates and vide order dated 30.5.12, the Hon'ble Division Bench of this court declined to entertain the said appeals while giving liberty to the defendants to seek early hearing and disposal of the above applications. The defendants were also gi....
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....2006, defendant No.1 as General Partner and certain other individuals as Limited partners including defendant No.6, the trustee, entered into a Limited Partnership Agreement constituting defendant No.2 herein and in terms of clause 15 of the Partnership Agreement, defendant No.6 was to hold 13% of the partnership capital for the benefit of one Mr. Yuval Sipper and the plaintiff No.1. It is also the case of defendants that on 17.10.2006, the First Consultant Agreement was terminated and on the very same day Second Consultant Agreement got executed between the plaintiffs and defendant No.4 and under this agreement the plaintiffs were to provide certain consultancy services to the defendant No.4. It is also the case of defendants that the plaintiffs‟ alleged claim in the present suit rests on the Share Entitlement Document under which the plaintiffs were entitled to 7% shares in the defendant No.2 partnership. It is also the case of defendants that the said Share Entitlement Document was not a binding document as the same was being further negotiated between the parties. The defendants have also taken a stand that even otherwise if the said document is taken to have a binding....
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....ants to deposit in trust 7% of any consideration received by any foreign company from any transaction executed by the defendants. It is further the case of the defendants that the said interim order was challenged by the defendants who are parties in the Israel case and by order dated 24.10.2011, the Supreme Court of Israel allowed the appeal filed by the defendants and vacated the interim order. It is also the case of the defendants that the plaintiffs having failed to obtain any favourable relief from the Supreme Court of Israel have filed the present suit to re-agitate the same issues and claims. The counsel submitted that even the interim reliefs sought by the plaintiffs in the present suit are substantially the same as sought by them before the Israel Court. 7. In the backdrop of the above facts, the defendants have not only impinged upon the ex-parte order passed by this court vide order dated 20.1.2012 but also challenged the very maintainability of the present suit itself on various grounds which can be broadly formalized as under:- 1) Suppression of facts and approaching this court with unclean hands. 2) Lack of territorial jurisdiction of this court 3) Suit ba....
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.... a clear case of suppression by the plaintiffs by deliberately not placing on record the copy of the order of the Supreme Court of Israel. Counsel further argued that the plaintiffs have also suppressed the fact that the Share Entitlement Document dated 17.10.06 is not a binding document as even after the execution of the said document, the parties were still negotiating and such negotiations never attained finality so as to give any conclusiveness to the said Share Entitlement Document. Counsel also argued that the plaintiffs have also suppressed the fact that defendant nos. 2 & 3 had filed a claim against the plaintiffs before ICC Arbitration court which was later on withdrawn upon discovery of the bankruptcy status of the plaintiff no. 1 and then similar claims were presented before the Israel court as a counter claim. Counsel further argued that the plaintiffs have also suppressed the fact that the said Share Entitlement Document was signed only by one Mr.Rani Binyamini as against the requirement of it being signed by atleast two Directors and therefore, it could not carry any binding effect. Counsel also argued that the plaintiffs have also suppressed from this court another v....
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....e plaintiffs has no nexus whatsoever with the share capital of defendant No.3 and thus defendant No.3 is totally out of picture and its location in Delhi will not confer jurisdiction on this Hon'ble Court. Counsel also argued that in terms of clause 15 of the partnership agreement, 7% rights of the plaintiffs were protected by creating a trust in name of the trustee i.e. defendant No.6 herein, who too is not a resident of India and is thus beyond the territorial jurisdiction of this court. Counsel also argued that defendant nos. 4 & 5 are also beyond the jurisdiction of this court and it is these defendants only who are having share capital in the defendant No.3 company. Counsel also argued that there is no privity of contract between the plaintiffs and defendant No.3 and therefore also the plaintiffs cannot invoke territorial jurisdiction of this court. Suit barred by Limitation 11. Arguing on the aspect of the limitation, counsel for the defendants contended that the alleged entitlement of the plaintiffs is based on the Limited Partnership Agreement dated 26.3.2006 and the Share Entitlement Document dated 17.10.2006 and in terms of Para 14 of the plaint, the plaintiff No....
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....nsels for the defendants was that the principle of "Comity of Courts" demands that this Hon'ble Court ought not to interfere with the proceedings pending before the Israel Court based on the same cause of action and seeking same reliefs. Counsels argued that it is an admitted position between the parties that the plaintiffs had opted to invoke the jurisdiction of the District Court in Tel Aviv, Jaffa, Israel, which is equivalent to the High Court of India, in the year 2008, although interim application was moved by the plaintiffs much later in January, 2011 seeking the same interim relief as is sought by the plaintiffs in the stay application moved before this Court. Counsel further argued that the present suit is based on the two documents, namely, Limited Partnership Agreement dated 26.3. 2006 and Share Entitlement Document dated 17.10.2006, both of which are already under consideration in the said Civil Suit filed by the plaintiffs before the District Court of Israel and filing of the present suit by the plaintiffs based on the same cause of action is clearly against the principle of Comity of Courts, the principle that has been well recognized in various judgments of the courts....
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.... another suit can be filed by them in courts of Mauritius and thereafter, if they fail to get any favourable order there, then in the Courts of Jersey based on the shareholdings of defendant Nos. 4 and 5 in defendant No.3 Company. In support of their arguments counsel for the defendants placed reliance on the judgment of the Apex Court in K.K. Modi vs. K.N. Modi & Ors. AIR 1998 SC 1297. Based on these arguments counsel submitted that the present case is a clear case of forum shopping to over reach the order passed by the highest Court of the country of Israel. No cause of action 14. Mr. Rajiv Nayyar, learned Senior Counsel appearing for defendant Nos. 1, 2, 4, 5 and 6 laid much stress on his argument that there has been a complete adjudication of the rights between the parties before the Israel court and thus there can be no cause of action for the plaintiffs to approach this court for adjudication of the same rights through the present suit. Counsel also submitted that on a bare perusal of the order of the District Court of Israel as well as the order passed by the Supreme Court of Israel, it is manifest that both the courts have examined the issues on merits and in fact the....
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....ke the jurisdiction of this court and the suit filed by the plaintiffs merit rejection on this sole ground. 15. Mr. Parag Tripathi, Senior Advocate for the defendant no.3 also submitted that ex-parte order granted by this court is in the nature of a "Mareva Injunction" which is a English law concept and akin to Order 38 Rule 5 CPC and none of the conditions laid down in the said provision, even on taking a prima-facie view of the matter, are satisfied for the grant of an order of injunction in favour of the plaintiffs. In support of this argument, counsel for the defendants placed reliance on following judgments: 1. Uppal Eng. Co. (P) Ltd. v. CIMMCO Birla Ltd., 2005 (2) Arb. LR 404 (Para 12, 13) 2. Iridium India Telecom v. Motorola 2003 (6) BCR 511 (para 49, 50) 3. Raman Tech. & Process Engg. Co. v. Solanki Traders, (2008) 2 SCC 302 (Para 4, 5 & 6) 4. Deepali Designs & Exhibits Pvt. Ltd. v. PICO Deepali & Ors. 2011 (123) DRJ 705 (Para 62, 67, 70) 5. Indian Oil Corporation Ltd. v. Iranian Offshore Engineering & Construction Co., Delhi HC, 15 Sept, 2009 (para 11) 6. Rita Approach Group Ltd., v Rosoboron export AIR 2007 Del. 145 (Para 6) 16. Counsel appearing f....
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....% of the equity shares of TVL, defendant no.1 herein. Counsel also argued that the plaintiffs had duly performed their obligations in terms of the said Consultant Agreement and it is through the efforts made by the plaintiffs that the defendant no. 1 was able to set up its business in India. Counsel further submitted that the defendant no.1 had incorporated defendant no.3 company in India in January, 2006 and in the Indian company there were only two shareholders, i.e. (i) defendant no. 1, TVL with 99.99% shares and (ii) Elgadcom Group Ltd., holding one share. Counsel further submitted that subsequently, the promoters of the defendant no.1 in a unilateral decision decided to carry out the said tower management business in India through a limited partnership i.e. defendant no.2 herein, which was incorporated on 26.3.2006. Counsel also submitted that at this stage, it was also unilaterally decided by these defendants that the plaintiffs" 7% rights in the said business will be held by a self-created trust, in the name of the trustee, the defendant no.6 herein. Counsel further submitted that in April/May 2006, these defendants incorporated defendant no.4 company in Mauritius f....
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.... the written documents which are primary evidence under Section 90/92 of the Evidence Act. Counsel further argued that defendants in order to non-suit the plaintiffs are withholding the best evidence in their power and possession i.e. the e-mails exchanged between the parties leading to the execution of the documents on 17.10.2006. Counsel also argued that plaintiffs were never involved in the alleged corporate restructuring and the same could never affect the entitlement of the plaintiffs of their 7% rights in the Tower Management Business of defendant nos. 1 & 2 in India. Counsel further argued that the plaintiffs never consented to any amendment in the Share Entitlement Document and this is evident from the fact that no reciprocal advantage has been pleaded by the defendants or shown due to which the plaintiffs would have given up their said right. Counsel also argued that Limited Partnership Agreement, being a self-serving document, was unilaterally created by defendant nos. 1 & 2 to perpetuate fraud on the plaintiffs and this is evident from the fact that stock option was made in favour of plaintiffs No.2 while the so-called trust created under the said agreement was for the b....
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.... of Share Entitlement Document that the defendants sought to amend the same but the said request of the defendant was declined by plaintiff No.1. Counsel also submitted that the alleged negotiations between the parties even as per the defendants own case did not result in the execution of any fresh binding document and therefore validity of Share Entitlement Document remained unaffected. Giving answer to another contention raised by the defendants that the plaintiffs have suppressed material fact of the defendants having invoked ICC arbitration is again misconceived argument as the said invocation of ICC arbitration on the part of the defendants was totally baseless and the defendants on realizing the non-maintainability of the claim themselves withdrew the same and therefore non-disclosure of such an inconsequential fact cannot lead to attributing any kind of suppression on the part of the plaintiffs. Counsel thus submitted that plaintiffs have approached this court with clean hands and with absolute and full disclosure of the facts and it is rather the defendants who are guilty of "suggestion-falsi" and "suppressionveri". In support of his argument on suppression, counsel p....
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....t of cause of action has arisen in India and therefore the present suit filed by the plaintiffs is squarely covered within the scope of Section 16(f) as well as under the residuary provision of Section 20 CPC. Counsel also argued that if the corporate veil of all the entities created by defendant No.1 is lifted then the correct picture will emerge which will expose the true picture that the other entities are created by defendant no.1 only with oblique motives to avoid its contractual obligations towards the plaintiffs and for tax benefits. Counsel also argued that for deciding the issue of jurisdiction, the court has to take into consideration the averments made in the plaint as a whole and based on the material placed on record and in the facts of the present case it cannot be said that the plaintiffs have not made sufficient averments for the maintainability of the present suit within the jurisdiction of this court. In support of his arguments, counsel placed reliance on the following judgments 1. A.B.C. Laminart Pvt. Ltd. & anr. v. A.P. Agencies, Salem, (1989) 2 SCC 163 ( Paras 11 to 15) 2. Laxman Prasad v. Prodigy Electronics Ltd. & Anr., 2008 (1) SCC 618 (Paras 29-36) ....
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....vour of the plaintiffs continues. Counsel also argued that the limitation is a mixed question of law and fact and therefore the same cannot be decided by this court at the very threshold of the case without giving an opportunity to the parties to lead evidence on the same. Based on the above submissions, counsel submitted that the present suit filed by the plaintiffs cannot be held to be barred by limitation. In support of his arguments, counsel placed reliance on the following judgments 1. Firm Ramnath v. Firm Bhagatram, AIR 1959 Raj 149 (FB) (Paras 14, 15) 2. Kama and others v. K.T. Eshwara SA & others, 2008 (12) SCC 661, (Paras 21, 22, 23, 25) 3. Balasaria Construction (P) Ltd. v. Hanuman Seva Trust and others, 2006 (5) SCC 638 4. Jagjit Industries Ltd. v. Labour Officer, 2011(4) SCC 2969 (Paras 12 to 15) Comity of Courts 23. Refuting to the objection raised by the counsel for the defendants challenging the maintainability of the present suit based on the well-established principle of comity of courts, counsel for the plaintiffs submitted that the present suit filed by the plaintiffs is not in conflict with the suit filed by the plaintiffs before the Israel cou....
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....ffs and the imminent threat of the defendants dissipating the entire assets of the defendant no.3 which are in India alone also afforded an independent cause of action to the plaintiffs to approach this court. Counsel also argued that such technical objections are being taken by the defendants in the present suit with the oblique motives to frustrate and defeat the rights of the plaintiffs as the defendants have not only challenged the jurisdiction of this court but have also challenged the jurisdiction of the Court at Israel as well to grant the reliefs claimed by the plaintiffs there. Based on these submissions, counsel for the plaintiffs submitted that if not the entire, but admittedly a substantial cause of action arose in India to file the present suit against the defendants and therefore it cannot be said that this is a case of forum shopping. No Cause of Action 25. Dealing with the next contention of the counsel for the defendants that there is no cause of action that arose in favour of the plaintiffs to file the present suit, counsel for the plaintiffs submitted that it is a settled legal position that the disclosure of the cause of action has to be determined b....
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.... plaintiffs in the said telecom business of the defendants can neither be defeated nor can be postponed with the creation of the said trust. Based on these submissions, counsel for the plaintiffs submitted that the present suit filed by the plaintiffs cannot be said to be without any cause of action. 27. Counsel also submitted that under Section 15(h) of the Specific Relief Act, the plaintiffs have every right to enforce the performance of the contract based on the First Consultancy Agreement dated 1.8.2005 and the Share Entitlement Agreement dated 17.10.2006 as the same binds the defendants and as a consequence thereof, the defendants cannot take any stand contrary to the terms of the contract entered into by their promoter companies. Counsel also strongly refuted the allegations leveled by the defendants, attributing mala fides on the part of the plaintiffs in filing the present suit. Counsel also argued that this court has unfettered rights to protect the rights and interests of the plaintiffs and the interim stay claimed by the plaintiffs in the present suit fully satisfy the test laid down for the grant of mareva injunction. 28. I have heard the verbose arguments of the ....
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....ly 32% as against their initial holding of 100% in the defendant no.3 company thereby resulting in dilution of plaintiffs‟ rights in the said telecom business. It is also an undisputed fact that the plaintiffs have filed an interim application for temporary injunction for restraining the defendants from further transferring the shares in the telecom business before both the courts till the final disposal of the respective cases. The interim stay application was filed by the plaintiff before the District Court at Israel in the month of January, 2011 i.e. much after filing of the statement of claim by them. It is further not in dispute that vide order dated 20.6.2011, the District Court of Tel Aviv, Israel allowed the interim application of the plaintiffs with the direction to the respondent therein to deposit 7% of the proportionate share of the partnership in any consideration to be received by any of the foreign company, from any transaction that they may complete, in trust with the attorneys for the parties -Advocate Gitzleter and Advocate Polak (or such other bank account as shall be agreed upon between the parties). It is also not in dispute between the parties that....
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.... the Partnership and/or the substitute entity and/or Tower Mauritius, as shall be detailed in this Statement of Claim below. 6.4 The splitting-up of relief with the aim of enabling a claim for monetary compensation for the breach of those undertakings and those damages sustained by the Plaintiffs due to the conduct of the Defendants and/or any one of them in this context. The reliefs claimed by the plaintiffs in the present suit are as under: a. Pass a decree of perpetual injunction restraining the Defendants from further diluting in any manner the shareholding of the Tower Vision Limited Partnership, the Defendant No.2 herein, in the business and assets of the Defendant No. 3 Company to the detriment of the Plaintiffs; b. Pass a decree of perpetual injunction in favour of the Plaintiffs and against the Defendants jointly and/or severally restraining them from selling, alienating, transferring or in any manner creating any third party rights in respect of their business, shares, assets and stakes in the Defendant No.3 Company p Tower Vision India Private Limited, in any manner prejudicial to 7% right/share of the Plaintiffs in respect of the entire business of the Defendan....
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....he "Business"), and any assets and/or monies and/or benefits due to them as a result of and/or related to the transaction with respect of the rights in the Business (the Assets), regardless of whether the Assets are located in Israel or overseas; b. To change the state of the Assets and/or the state of the rights therein. 2. To order the Respondents, in a mandatory order, to leave the monetary and financial situation of Respondent No.2 (the "Partnership") and of the Applicants'rights in the Partnership and in the Business (the "Rights" as shall be detailed further below in the Application) intact, whether by themselves or through anyone on their behalf, including other entitites in the chain of ownership of the Business (as described below)-including Tower Jersey and/or Tower Mauritious and/or Tower India (as shall be described below)- and all of this in a manner which will not harm the Rights and shall not remove monies from the Partnership and especially shall not remove and/or transfer rights and/or assets and /or part thereof from Respondent No.3 3. Alternatively: to order the depositing of 7% of any consideration, of any sort, to be received as a result of any action,....
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.... number of shares to be purchased from the company (the Option Shares") at the earlier of: (a) Event One (i) The Company having concluded a joint venture agreement for India; and (ii) The Indian joint venture company having secured contracts for at least 500 sites irrespective of whether such contracts are sale and leaseback or build to suit transactions; or (b) Event Two Immediately prior to any equity investor presented by SJ to acquire shares in the Company whether by direct share purchase, merger or acquisition. For the avoidance of doubt, the Stock Option shall be exercised prior to dilution taking place as a result of new equity investment into the Company. 5.3 Exercise Price The purchase price of the Option Shares (the "Stock Exercise Price") shall equal one NIS (0.01 NIS) 5.4 Registration of Option Shares (a) Prior to the grant of Stock Option the Company shall cause to promptly convene a shareholders meeting, at which a resolution shall be adopted approving the Company's grant of Option Shares to SJ and/or the Designee (s); and (b) Upon exercise of the Stock Option the relevant parties shall execute all other necessary contract, agreements or ....
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..... 3. Our undertaking herein supersedes any previous undertaking provided to you by us and/or by any related entity in respect of your entitlement to receive any share and/or right in the Partnership's tower management business. Any previous undertaking and/or obligation regarding the subject matter or this letter shall become null, and void as of the date of this Letter." 34. It would be thus seen from the above that at the time of execution of the First Consultancy Agreement, none of the defendants i.e., defendant nos. 2 to 5 were in existence and it is only the defendant no.1/TVL who had entered into the said agreement with the plaintiffs while at the time of the signing of the share entitlement agreement, the defendant no.2 partnership was in existence. The corporate maze starts with the defendant no.1, which is a company incorporated in Israel. The Tower Vision Limited Partnership which is defendant no.2 herein was constituted on 26th March, 2006 with the defendant no.1 /TVL holding 1% shares of the partnership business but with unrestricted rights, authority and power to inter alia manage and control the partnership business as its General Partner. The rest of the 99% sh....
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....efendant no.4, M/s Tower Vision Mauritius Ltd. TVML was constituted sometime in April/May 2006 for the purposes of routing the resources and finances for the Tower Management Business in India and 99.9% shares of the Indian company were held by the Mauritius company, TVML and 0.01% shares of the Indian company were vested in another company i.e. M/s. Tower Vision Jersey Ltd., TVJL, the defendant no. 5 herein. So far defendant no.5 Tower Vision Jersey Ltd. is concerned, the same was constituted in 2007 and this company had 52 % shareholding in TVML. 36. In the backdrop of the above corporate structure, the disputes between the parties arose when the defendant nos. 1 and 2 failed to transfer 7% rights of the plaintiff in favour of Triassic Investment Ltd., as per the request made by the plaintiffs through their e-mail dated 21.11.2006. This refusal on the part of these defendants was taken to be a clear violation of the terms and conditions of the Share Entitlement Document dated 17.10.2006 and this refusal led the plaintiffs to first send a legal notice and then to file a suit before the Israel court and after having not succeeded before the Hon'ble Supreme Court of Israel, feeli....
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....ent Document dated 17.10.2006 had preferred to invoke the jurisdiction of the District Court of Tel Aviv, Israel. On a closer look at the averments made in the plaint before the Israel court and the averments made in the plaint before this court, it is clearly discernible that there is not much variation in the basic facts. After filing the suit before the District Court of Tel Aviv, Israel in 2008, the plaintiff had preferred to file an application for temporary injunction much later in January 2011 and the sum and substance of the interim reliefs sought by the plaintiffs before the District Court of Tel Aviv, Israel are the same as have been claimed by the plaintiff in the stay application filed by them in the present suit on 17.1.2012. In the said interim application before the District Court of Tel Aviv, Israel, the plaintiffs had expressed an apprehension that the respondents in India were about to sell and/or transfer their rights in the business to a third party as was learnt by them through some publications in the Indian Press. The plaintiffs therein also stated that the business of the defendants was operated in India through the Mauritian Company, TVML, Defendant no. 4 h....
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....outside the borders of Israel. The order that is the subject of the Rule is an order in personam and consequently the location of the asset is of no importance (see Goren, Issues in Civil Law Procedure". 8th Edition, Page 539). The order resembles an attachment order in terms of being intended to ensure the possibility of enforcing the judgment, but as opposed to an attachment order, it does not relate to the assets themselves, but is directed towards the Defendants and by virtue of it, their use of the assets is restricted." 40. After having discussed the various parameters for the grant of ad interim injunction which are in consonance with the principles for the grant of interim injunction in terms of Order 39 Rules 1 & 2 of our Civil Procedure Code, 1908 the District Court of Tel Aviv, Israel directed the respondents to deposit 7% of the proportionate share of the partnership in any consideration to be received by any of the foreign companies from any transaction that they may complete in the Trust. The operative paras of the said interim order dated 20.7.2011 are reproduced as under: "52. In view of all the foregoing matters set out in the Decision, I believe that ther....
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.... the Share Entitlement Document was signed between the plaintiffs and the defendants therein and the same could not bind the foreign companies. The said Court also observed that the rights of the plaintiffs in the partnership were held secured for them in a trust which should mitigate their concerns of irreversible damage being caused to the plaintiffs as a result of the defendants performing some transactions. 42. In the backdrop of the aforesaid admitted facts, it would be amply clear and certainly not incongruous to state that so long as the order of the District Court of Tel Aviv, Israel was in favour of the plaintiffs, the plaintiffs were fully satisfied by the proceedings before the court at Israel despite the fact that by that time Mr. Moshe Shushan had already filed his affidavit stating the alleged dilution of the shareholding of the partnership and it is only when the Supreme Court of Israel had set aside the interim order of the District Court, vide order dated 24.10.2011, an order not serving the interests of the plaintiffs that the plaintiffs rushed to invoke the jurisdiction of this court to seek identical reliefs as sought by them before the Israel court. For main....
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....ommon legal parlance is existence of those facts, which give a party a right to judicial interference on his behalf. It is thus a settled law that „Cause of Action‟ consists of bundle of facts, which give cause to enforce the legal inquiry for redress in a court of law. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the plaintiff a right to claim relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action would possibly accrue or would arise. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. Applying the aforesaid principles, in the case at hand, the cause of action as disclosed by the plaintiffs for filing the statement of claim before the Israel court was the refusal of the defendant nos.1 and 2 to accede to the request of the plaintiffs to transfer their 7% share in favour of M/s. Triassic company. The said suit was filed by the plaintiffs before the District Court of Tel Aviv, Israel on 13.11.2008 and filing of an affidavit on 27.1.2011 during the course of proceedings by any ....
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....As would be seen from the bare reading of the said provision, it starts with a non-obstante clause and clearly prohibits trial of any suit by a court in which the matter in issue is also directly and substantially issue in a previously instituted suit between the same parties or between the parties under whom they or any of them claimed to be litigating. The rigour of Section 10 of CPC, however, will not come in the way of courts in India to try a suit despite the fact that a suit between the same parties founded on the same cause of action is already pending before a foreign court. The object of the explanation appended to section 10 is that nobody is able to defeat the right of a plaintiff to succeed in his legitimate claim before a competent court of jurisdiction of Indian courts simply because the other party has pre-empted to file a suit before a foreign court based on the same cause of action. The plaintiffs having invoked the jurisdiction of the Israel court by filing a suit much prior to the filing of the present suit thus cannot take refuge under explanation of Section 10 of CPC to maintain the present suit filed by none else but by the plaintiffs themselves. The plaintiff....
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....t countries to mutually respect the territorial integrity of each other's jurisdiction. The principle of comity of courts would require the courts to give due regard to the orders passed by foreign courts. This principle of comity of courts has been well recognized and accepted by the Indian courts in various judgments. Here it would be relevant to quote the judgment of the Apex Court in the case of Transmission Corpn. of A.P. Ltd. v. Lanco Kondapalli Power (P) Ltd., (2006) 1 SCC 540 wherein it quoted the following para: "In A Treatise on the Law Governing Injunctions by Spelling and Lewis, it is stated: "Section 8. Conflict and loss of jurisdiction.-Where a court having general jurisdiction and having acquired jurisdiction of the subject-matter has issued an injunction, a court of concurrent jurisdiction will usually refuse to interfere by issuance of a second injunction. There is no established rule of exclusion which would deprive a court of jurisdiction to issue an injunction because of the issuance of an injunction between the same parties appertaining to the same subject-matter, but there is what may properly be termed a judicial comity on the subject. And even where it....
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.... of Civil procedure also gives due regard to this principle as it would be evident that under Section 13 of the Code of Civil Procedure,1908 judgments given by the foreign courts have been held to be binding and conclusive until and unless they fall in any of the exceptions as spelled out in clause (a) to (f) of the same. Under section 14 of CPC, there is a presumption of conclusiveness attached to any foreign judgment being pronounced by the court of competent jurisdiction unless the contrary appears on record. It would be thus quite manifest that unless any foreign judgment is impeached on any of the grounds as envisaged in sub-clause (a) to (f) of Section 13 CPC, the foreign judgments are binding on the parties and this section engrafted in CPC is in due recognition of the principle of the concept of comity of courts and in recognition of the sovereignty and territorial integrity of jurisdiction of foreign courts. This court has the onus to carry the mantle and be alive to its responsibility laid down by the dicta of the Apex Court in the case of Narendra Kumar Maheshwari vs. Union Of India, 1990 (Supp) SCC 440 wherein the court held that before the courts grant any injunction, ....
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....that he is relying on a new cause of action and held that the proceeding by way of a suit was an abuse of the process of court since it amounted to litigating the same issue in a different forum through different proceedings. Relevant paras of the said judgment are extracted below: "43. One of the examples cited as an abuse of the process of court is re-litigation. It is an abuse of the process of the court and contrary to justice and public policy for a party to re-litigate the same issue which has already been tried and decided earlier against him. The re-agitation may or may not be barred as res judicata. But if the same issue is sought to be re-agitated, it also amounts to an abuse of the process of 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 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....
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....light of the significance and importance of the citizens' fundamental rights. The general principle underlying the doctrine of res judicata is ultimately based on considerations of public policy. One important consideration of public policy is that the decisions pronounced by courts of competent jurisdiction should be final, unless they are modified or reversed by appellate authorities; and the other principle is that no one should be made to face the same kind of litigation twice over, because such a process would be contrary to considerations of fair play and justice, vide: Daryao v. State of U.P. AIR 1961 SC 1457. 23. This Court in All India Manufacturers Organisation (supra) explained in clear terms that principle behind the doctrine of Res Judicata is to prevent an abuse of the process of Court. 24. In explaining the said principle the Bench in All India Manufacturers Organisation (supra) relied on the following formulation of Lord Justice Somervell in Greenhalgh v. Mallard (1947) 2 All ER 255 (CA): I think that on the authorities to which I will refer it would be accurate to say that res judicata for this purpose is not confined to the issues which the court is actua....
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....s in the plaint itself they have averred that the present suit has been filed by them as an abundant precaution and during the course of arguments also their stand was that at best the present suit can be considered as an extension of the earlier suit filed by them before the Israel court. How there can be an extension of a suit filed before a court of one sovereign state by the suit filed before the court of another sovereign state or that any suit can be filed by any party by way of an abundant precaution is beyond the comprehension of this court. 55. It is also trite that during the pendency of any proceedings if the plaintiff finds that he has wrongly invoked the jurisdiction of any court he can retrace his steps with the leave of the court to take his remedy before a competent court of jurisdiction. The defendant no.1, TVML, in the present case is a Mauritius company and it is an admitted case of the parties that the defendant no. 4 has 99.9% shares in the defendant no.3 company, then tomorrow on this premise the plaintiff can also file a suit before the Mauritius court and likewise before the Jersey court as well where the defendant no. 5, TVJL, has its base. The argument ....
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....the plaintiffs to lift the corporate veil of the defendant companies to unmask the core company which created the web of subsidiary companies for the purposes of tax evasion and also for the purpose of playing with the legitimate rights of their creditors including the plaintiffs, with whom they had entered into the First Consultancy Agreement dated 1.8.2005 and Share Entitlement Agreement dated 17.10.2006, cannot be appreciated as the only judicial forum which was available to the plaintiffs to raise such a plea was the Israel court where for the reasons best known to them they not only failed to implead defendants Nos. 3 to 5 but also failed to raise any such plea in that regard. 57. The counsel for the defendants also with great vigour alleged the defendants being guilty of suppression and misleading the court by not placing on record the order of the Hon'ble Supreme Court of Israel along with the present suit. On the other hand, much emphasis was laid by counsel for the plaintiffs on their contention that by merely not placing a copy of the judgment of the Supreme Court of Israel along with the present suit, which was not available with the plaintiffs by the time the present....
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.... plea of defendants was also accepted by the appellate court in Israel and it was observed by the said court that such an order cannot be passed by the Israel courts, more so when the foreign companies were not parties to the present suit. Counsel for the defendants however took a stand that these very plaintiffs themselves filed a copy of the said judgment before the District Court Israel on 26.10.2011 along with the application for return of the bank guarantee deposited and therefore they cannot take a plea that copy of the judgment of the Supreme Court was not available to them or they could not get the same translated into English language for such a long period of over two months. The question thus arises is that whether such half - hearted disclosure by the plaintiffs can be considered as fair and honest disclosure or whether it will amount to suppression of material facts. It is a settled legal position that the litigant who approaches the court is bound to disclose all material facts and produce all the documents which are relevant to the litigation and if he withholds a vital document in order to gain advantage then he would be guilty of playing fraud on the court as well ....
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....n issue. Thus, in my considered view, any order passed by any judicial forum between the parties to the suit with regard to the controversy or disputes involved between the parties is a material fact and any suppression or withholding of such an order from any court is an act of suppression on the part of such a party. It is a principle which forms the edifice of the justice dispensation system, that he who seeks equity must do equity. A person approaching the court must come with clean hands and a person not disclosing the correct and true facts is not entitled to seek justice. I am also astounded to find that the plaintiff had not even placed on record the copy of the order passed by the District Court of Tel Aviv, Israel at the time of filing of the present suit, although the said order was in support of the plaintiffs. So far as the order of the Hon'ble Supreme Court of Israel is concerned, this court finds that disclosure made by the plaintiffs in the averments of the plaint is a faint and a feeble attempt to suggest the said order but the said averments do not transparently declare that any order of the highest court of Israel was passed against them and on the contrary is....