TaxTMI 
TaxTMI 
2013 (8) TMI 774
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....on-party, which was not involved in the scheme and has not been impleaded by the applicant herein, had obtained leave to intervene in the present proceedings by an order made at an earlier stage. However, the order permitting such non-party to participate in the proceedings was not unreserved; it was made without prejudice to the applicant's contention: the intention of the court at such stage being to postpone a decision on the desirability of the non-party being heard in course of the present application to the final stage. The scheme of arrangement, sanctioned by an order of May 31, 1993 provided for, inter alia, certain properties of Fort Gloster Industries Limited being parked with Gloster Limited (then known as Gloster Jute Mills Limited). The property which is relevant for the purpose of the present application is known as the North Mill and is referred to as such herein. At the time that the scheme was sanctioned, or even when the first application to ultimately obtain the sanction of the scheme of arrangement was lodged in court, possession of the North Mill had been made over by Fort Gloster to one Hooghly Mills Company Limited under an agreement for sale and a substantia....
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.... law now being otherwise, the most lucrative of the reasons to seek the transfer of immovable properties standing in the names of companies by way of a scheme is gone and there are fewer schemes of such nature being filed in court. 4. The applicant lodged a request under Section 11 of the 1996 Act by way of AP No. 211 of 2010 asserting an arbitration agreement of March 24, 1988 and claiming that, despite the applicant's effort, the mechanism for securing a reference under the arbitration agreement had failed. The applicant asserted that it was entitled to have the arbitral tribunal put in place by the Chief Justice of this court or his designate. The eo nomine parties to the March 24, 1988 matrix contract which contained the arbitration clause were Fort Gloster and Hooghly Mills. The applicant herein claimed in the request under Section 11 of the 1996 Act that the North Mill, which was the subject of the agreement for sale of March 24, 1988, stood transferred to and vested in the applicant in pursuance of the scheme of arrangement that was subsequently sanctioned by the order of May 31, 1993. The applicant asserted, or should be understood to have asserted, that upon the North M....
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....4, 1988 in favour of Bowreah Jute on January 12, 2009. The issue that arose for consideration in the order of December 16, 2010 was framed as follows: "The only question in this application is whether the North Mill was transferred to the petitioner." 6. The order then proceeded to examine the scheme which was schedule A to the order made on May 31, 1993, the definition of "jute division" in the scheme and the clause under which the "jute division" was to stand transferred to and vested in the transferee company under the scheme. Such vesting clause recorded, in its material part, that "the Jute Division of the said transferor company with all its properties, rights and interests of the said transferor company and specified in the first, second and third parts of the schedule B hereto be transferred from the said transfer date and be vested without further act or deed to the said transferee companyâEUR¦" The order rejecting the applicant's request under Section 11 of the 1996 Act noticed that the relevant schedule did not refer to the North Mill but it included "a part of the properties of the jute division" and specified such properties. The order of December 16....
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....ourse of the previous proceedings or that no copy of the drawn-up order was available with the applicant at such stage. 8. The applicant did not, despite being put on notice by Hooghly Mills that the North Mill did not pass to the applicant pursuant to the order sanctioning the scheme, regard the order sanctioning the scheme as drawn up to be mistaken. The applicant stuck to its guns and went ahead full-steam with its assertion that the North Mill did pass to it. This, the applicant proclaimed on the basis of the order sanctioning the scheme as drawn up and despite it being in a seemingly unsatisfactory form. In choosing such course of action, the applicant made a conscious decision. The applicant did not consider then that the order sanctioning the scheme as drawn up contained any mistake. It is irrelevant today, upon a decision having been rendered on an issue that squarely arose in the previous proceedings, as to whether there was, indeed, a mistake in the order sanctioning the scheme as drawn up. Quite apart from the minor points of prejudice that it is a long-standing practice in this court that advocates representing the companies which are parties to the scheme hand over ....
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....d at any point of time. The principle is subject to the right of the applicant to apply not having been extinguished by the law of limitation or by the applicant's previous conduct. 10. The applicant herein insists that if it is to be hanged it must only be on a legal peg. The applicant says that the doctrine of res judicata does not apply here in terms. The applicant urges that since the question of mistake had never been urged or considered, there is no issue estoppel. The applicant asserts that no element of acquiescence or waiver or estoppel or such other tenuous concept would apply for its present request to be stultified. The applicant exhorts that for a person carrying a grievance to a court, particularly that such person has been prejudiced by an act of court, the court will not shut its doors on the applicant on any judicial perception or suspicion that the applicant is not entitled to urge the ground without assessing the merits of the matter. If the principles of res judicata and issue estoppel do not apply in terms to the matter, the applicant submits, there cannot be any estoppel against a mistake of the court, or any element of the applicant acquiescing in such a m....
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....led prior to the rejection of the applicant's request under Section 11 of the 1996 Act; it was made only after the issue that arose in those proceedings had been conclusively answered. 13. The matter can be viewed from another perspective. If the applicant's present essay were to succeed, it would imply that the North Mill passed to the applicant under the order sanctioning the scheme and, as a corollary, the applicant would be deemed to have stepped into the shoes of Fort Gloster in the agreement for sale of March 24, 1988. Such success would then give the applicant a toehold to assert that it is a party to the arbitration clause contained in the agreement of March 24, 1988 and entitled to a reference thereunder. It would then undo, almost by a side-wind, the exercise undertaken by a competent forum in adjudicating a matter and reaching a conclusion thereon. That would be clearly impermissible and, more importantly, opposed to the public policy that the apparently imprecise shades of the aforesaid principles profess to serve. 14. Even though the primary legal mooring of this order is in the conduct of the applicant and the principle âEUR" hazy, as the applicant may rec....
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....whether any stand taken by Fort Gloster, the other party to the subject scheme, would impact the evaluation of the applicant's plea on merits. It is possible in a particular case, as in the present, that the two original parties to a scheme may have fallen out subsequently. It is equally possible for the eo nomine parties to a scheme of such nature to jointly petition to the court that sanctioned the scheme that there was a mistake in the order as drawn up; the common intention either being bona fide or even a veiled attempt to prejudice some other. It would matter little, then, as to the stand taken by an eo nomine party to the scheme upon the other making an assertion as this applicant has. The assessment in such a case would be confined to the records pertaining to the scheme and the papers filed in course thereof. A subsequent agreement between the parties to the scheme or a disagreement between them as to what passed thereunder would scarcely weigh with the court on receiving an application to correct a mistake said to have been committed by the court in how the order sanctioning the scheme had been drawn up. It would then follow that an issue is sometimes capable of being dec....
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....y on the basis of the judicial pronouncement on the applicant's earlier request under Section 11 of the 1996 Act. Since it has been held that the principle of res judicata would not apply in terms to this case, the judgments reported at Mathura Prasad Bajoo Jaiswal v. Dossibai N B Jeejeebhoy (1970) 1 SCC 613; Chandra Bhal v. State of Uttar Pradesh (1971) 3 SCC 983 Shakuntala Devi v. Kamla [2005] 5 SCC 390 Meghmala v. G Narasimha Reddy [2010] 8 SCC 383; and, Howrah Trading Co. ( P.) Ltd v. Smt. Pramila Jalan [1994] 2 Cal LJ 278 need not be noticed in any great detail. 18. It must, however, be said that it was possible for the applicant to prosecute its request under Section 11 of the 1996 Act with a caveat, that the order sanctioning the scheme as drawn up carried a mistake in the North Mill not having been specifically included in the schedule to the scheme, on the argument that, despite such mistake, the surrounding circumstances made it obvious that such property had passed to the applicant under the sanctioning order. The order on the request under Section 11 of the 1996 Act may then have been without prejudice to the applicant's contention that the order sanctioning the sche....