AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 757
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....ormation 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 ma....
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....fter, 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: (a) Cancel the letter of offer dated 6.8.1998 made by the defendant for 20% equity shares of Bombay Oxygen Corporation Ltd. and/or (b) 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 (c) 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 (d) A decree of permanent injunction restraining the defendant from acquiring any shares in Bom....
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....r 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 cou....
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....s 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 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....
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....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 As required under the law as it was on that date 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) t....
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....e agreement dated 23rd June, 1997 being Ex."B" to the plaint. 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. S....
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....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 declaratio....
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....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. (i) committing breach of clause 6.1 of the Agreement dated 23rd June, 1977 being Exh. 'B' hereto; (ii) 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. (iii) 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. (iv) 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; (v) procuring any breach of the provisions of clause 6.1 of the said share Purchase Agreement ....
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....ery 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....
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....trs., 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 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. 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 de....
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....ny 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 Co....
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.... the four appeals alongwith the various Notice of Motions were dismissed with costs 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.. 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 logica....
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.... on the Board of "MHL" and/or Goyal MG Gases Ltd.); (i) Civil Suit No.2499 of 1999 titled Shyam Madan Mohan Ruia & Ors. v. Messer Griesheim GmbH & Ors. (ii) 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 c....
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....te 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 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).. 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 See paras 6 and 7 of the settlement dated 5.12.2002 extracted at para 20 supra. 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 ....
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....ll 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 ci....
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....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....