TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 1626
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....osed of by court below vide order dated 14th March 2018. It is this order of which appellant is aggrieved, forcing him to thump at portals of this Court with Appeal on hand. 3. I have heard learned counsel for parties at length and considered the matter. 4. Learned counsel appearing for appellant, while dilating his first limb of arguments, strenuously avers that impugned order is bad in eye of law inasmuch as Suit of plaintiff/respondent no.1 was liable to be rejected under Order VII Rule 11 CPC, more particularly when a civil court has no jurisdiction to entertain any suit or proceedings vis-à-vis any matter that is to be determined by the Tribunal or Appellate Tribunal owing to mandate of law enshrined in Sections 241 and 430 of Indian Companies Act, 2013. Learned counsel for appellant's next limb of argument is that court below has failed to appreciate that it has no jurisdiction to pass impugned order, given the fact that a Suit for grant of Permanent and Mandatory Injunction qua same property was already pending adjudication before learned 1st Additional Munsiff, Srinagar, in which an order of status quo passed, was in force. His subsequent contention is that app....
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....ntiff/respondent no.1 because plaintiff is exclusive owner to the extent of more than 25 Marlas in addition to other shares. The suit preferred before the court below is basically a partition suit, wherein various properties have been made subject-matter of Lis, including the assets of Hotel Shangrila, which hotel is built on a proprietorship land partly in the name of plaintiff/ respondent no.1. Earlier injunction suit relates to common approach and appellant - defendant therein admits that the property in unpartitioned and is now trying to take U-turn by mentioning in his objections to the application for interim relief. He also argues that assuming through not admitting that there is any substance in any of contentions of appellant, proper way of law must have been to file a written statement before court below as well as to argue contentions raised after the same are treated as preliminary issues. The order impugned has not been passed in ex parte, but after hearing both sides and applying judicial mind on the basis of guidelines for grant of injunction as per catena of authorities cited therein. Despite status quo orders, appellant in gross violation thereof, had been carrying....
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.... so omitted. As asserted by learned counsel, applying the rule to facts of present case, subsequent Suit for Declaration and Injunction is barred under Order II Rule 2 CPC, because it relates to same property. The cause of action arose from the same date when earlier suit was filed and no new cause of action had arisen in favour of plaintiff/respondent no.1, entitling him to file a fresh suit. He also asserts that the relief of declaration, as implored for by plaintiff/respondent no.1 in second suit, was available to him when he filed earlier Suit and he omitted the same without obtaining permission of the Court and, therefore, second suit for declaration and injunction is barred under Order II Rule 2 CPC. 8. To counter aforementioned arguments advanced by learned counsel for appellant, the learned counsel for respondent no.1 has submitted that the provisions of Order II Rule 2 CPC have no applicability to the facts and circumstances of the present case. Order II Rule 2 CPC, according to him, is based on principle that no one should be vexed twice for the one and same cause. The rule does not preclude a second suit based on a distinct and separate cause of action. According to th....
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.... II Rule 2 CPC is based on salutary principle that a defendant or defendants should not be twice vexed for the same cause by splitting claim and reliefs. To preclude plaintiff from so doing it is provided that if he omits any part of the claim or fails to claim a remedy available to him in respect of that cause of action he will thereafter be precluded from so doing in any subsequent litigation that he may commence if he has not obtained prior permission of the court. But the Rule does not preclude a second suit based on a distinct cause of action. Sub-rule (3) of Rule 2 provides that a person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs, but if he omits, except with the leave of the Court, to sue for all such reliefs he shall not afterwards sue for any relief so omitted. 10. In the present case, a glimpse of record, in the form of annexures, placed with the memo of appeal, divulges that earlier suit (Annexure P-4 to memo of appeal) filed by plaintiff/respondent no.1, being File no.249/F, is Suit for Permanent and Mandatory Injunction. That suit was filed on 30th November 2017. At the time of filing of that suit, th....
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....roach leading to various properties/residential houses in the premises/area measuring 09 kanals. 12. As concerns second suit (Annexure P-1 to the appeal), examination thereof unveils it is, inter alia, for declaration, partition by metes and bounds of various properties, indicated and shown in paragraph 03 of the suit. Respondent no.1 has even disclosed in paragraph 20 that he has earlier filed a Suit for Permanent and Mandatory Injunction against petitioner. In that view of matter, second Suit for Partition is not based on same cause of action. As has been observed by the Privy Council in Mohammad Khalil Khan v. Mahbub Ali Mian, AIR 1949 PC 78, that it is the right and its infringement and not the ground or origin of right and its infringement, which constitute cause of action. There is a distinction between cause of action and right of action. 13. What does the expression 'cause of action' as used in Order II of the Code of Civil Procedure connote? An all embracing definition of the term 'cause of action' is not to be easily found. It may mean one thing for one purpose and something different for another depending; for example, on the question whether the princi....
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....d to mean 'new set of ideas'. [See: Dorman v. J. W. Ellis and Co. Ltd., 1962- 1 All ER]. The term "cause of action", however, for the purpose of Order II CPC, means "cause of action", which gives occasion for and forms the foundation of the suit. [See: Sidramappa v. Rajashetty, AIR 1970 SC 1059; and Gurbax Singh v. Bhooralal, AIR 1964 SC 1810]. 16. There is, however, a 'distinction between 'cause of action' and the 'right of action'. These terms are not synonymous and interchangeable. A right of action is a right to presently enforce a cause of action a remedial right affording redress, for the infringement of a legal right belonging' to some definite person; a cause of action is the operative facts which give rise to such right of action. Right of action does not arise until performance of all conditions precedent to the action and may be taken away by running of the statute of limitations, through an estoppel, or by other circumstances which do not affect cause of action. There may be several rights of action and one cause of action and rights may accrue at different times from the same cause. 17. "Cause of action" should also be distinguished fr....
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....same in both action but the subject-matter is essentially different. Whether the case falls within or out of the rule against splitting, depends upon whether wrong for which redress is beseeched is same in both actions and not upon whether different grounds of relief for the same wrong are set forth. Thus, even where plaintiff is entitled to several forms and kinds of relief there may be only one cause of action. The rule, however, does not require that distinct causes of actions, each of which would authorise independent relief be presented in a single suit. 20. In order that a plea of a bar under Order II Rule 2 (3) CPC should succeed, defendant, who raises plea, must make out (l) that second suit was in respect of the same cause of action as that on which previous suit was based; (2) that in respect of that cause of action plaintiff was entitled to more than one relief and (3) that being thus entitled to more than one relief plaintiff, without leave obtained from the Court, omitted to sue for the relief for which the second suit had been filed. Unless there is identity between cause of action on which earlier suit was filed and that on which claim in later suit is based there ....
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....to claim a relief of permanent injunction and the cause of action to claim a relief of specific performance of agreement, are independent and one cannot include the other and vice versa, in the following words: "27. In our opinion, the sine qua non for invoking Order 2 Rule 2(2) against the plaintiff by the defendant is that the relief which the plaintiff has claimed in the second suit was also available to the plaintiff for being claimed in the previous suit on the causes of action pleaded in the previous suit against the defendant and yet not claimed by the plaintiff. 28. Therefore, we have to examine the question as to whether the plaintiff was entitled to claim a relief of specific performance of agreement in the previous suit on the basis of cause of action pleaded by the plaintiff in the previous suit against the respondents/ defendants in relation to suit property. 29. In other words, the question that arises for consideration is whether Sucha Singh (original plaintiff) could claim the relief of specific performance of agreement against the respondents/ defendants in addition to his claim of permanent injunction in the previously instituted suit? 30. Our answer to th....
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....pondents (defendants) is not barred by Order 2 Rule 2 of the Code and is held maintainable for being tried on merits. 38. This takes us to examine another question as to whether in the absence of any permission/liberty granted by the Trial Court to the plaintiff at the time of withdrawing the previous suit filed for permanent injunction, the plaintiff was entitled to file the suit for specific performance of agreement against the defendants in relation to the suit property? 39. In our considered opinion, this question does not now survive for consideration in the light of what we have held above. In any event, keeping in view the law laid down by this Court in Gurinderpal vs. Jagmittar Singh (2004) 11 SCC 219, the question is answered against the respondents. 40. In somewhat similar facts, the question arose before this Court in Gurinderpal's case (supra), namely, if the order granting permission to withdraw the suit under Order 23 Rule 1(3) of the Code does not specifically mention the fact of granting liberty to the plaintiff to file a fresh suit, whether filing of fresh suit would be hit by Order 2 Rule 2 of the Code? 41. This Court (three Judge Bench), speaking thro....
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....y, directors, dissolution of a company. The Act of 2013 is divided into 29 chapters containing 470 sections as against 658 Sections in the Companies Act, 1956 and has 07 Schedules. The Act has replaced The Companies Act, 1956, in a partial manner, after receiving the assent of the President of India on 29th August 2013. The Act came into force on 12th September 2013 with few changes like earlier private companies maximum number of member was 50 and now it will be 200. A new term of "one-person company" is included in this Act that will be a private company and with only 98 provisions of the Act notified. A total of another 184 sections came into force from 1st April 2014. 25. Section 3 of Act of 2013 provides that that a company may be formed for any lawful purpose by: seven or more persons, where company to be formed is to be a public company; two or more persons, where company to be formed is to be a private company; or one person, where company to be formed is to be One Person Company that is to say, a private company, by subscribing their names or his name to a memorandum and complying with the requirements of this Act in respect of registration. However, memorandum of One Per....
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....o notice has been sent by company, within a period of sixty days from the date on which instrument of transfer or intimation of transmission, as the case may be, was delivered to company. Subsection (4) of Section 58 says that if a public company without sufficient cause refuses to register transfer of securities within a period of thirty days from the date on which instrument of transfer or intimation of transmission, as the case may be, is delivered to company, transferee may, within a period of sixty days of such refusal or where no intimation has been received from company, within ninety days of delivery of instrument of transfer or intimation of transmission, appeal to the Tribunal. Subsection (5) of Section 58 provides that the Tribunal, while dealing with an appeal made under subsection (3) or subsection (4) of Section 58 of Act of 2013, may, after hearing parties, either dismiss the appeal, or by order either direct that transfer or transmission shall be registered by company and the company shall comply with such order within a period of ten days of receipt of order; or direct rectification of register and also direct company to pay damages, if any, sustained by any party ....
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.... that if any default is made in complying with the order of the Tribunal under section 59, company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees, or with both. 28. Section 61 of Act of 2013 stipulates that a limited company having a share capital may, if so authorised by its articles, alter its memorandum in its general meeting to: increase its authorised share capital by such amount as it thinks expedient; consolidate and divide all or any of its share capital into shares of a larger amount than its existing shares, provided that no consolidation and division which results in changes in the voting percentage of shareholders shall take effect unless it is approved by the Tribunal on an application made in the prescribed manner; (c) convert all or any of its fully paid-up shares into stock, and reconvert that stock into fully paid-up shares of any denomination; (d) sub-divide its shares, ....
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....on. Subsection (3) of Section 66 says that the Tribunal may, if it is satisfied that the debt or claim of every creditor of company has been discharged or determined or has been secured or his consent is obtained, make an order confirming the reduction of share capital on such terms and conditions as it deems fit: Provided that no application for reduction of share capital shall be sanctioned by the Tribunal unless the accounting treatment, proposed by the company for such reduction is in conformity with the accounting standards specified in section 133 or any other provision of this Act and a certificate to that effect by the company's auditor has been filed with the Tribunal. Subsection (4) of Section 66 of Act of 2013 says that order of confirmation of the reduction of share capital by the Tribunal under subsection (3) of Section 66 of Act of 2013 shall be published by the company in such manner as the Tribunal may direct. Subsection (5) of Section 66 provides that The company shall deliver a certified copy of the order of the Tribunal under sub-section (3) and of a minute approved by the Tribunal showing: (a) the amount of share capital; (b) the number of shares into which ....
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....debt or claim of any creditor; or (c) abets or is privy to any such concealment or misrepresentation as aforesaid, he shall be liable under Section 447 of Act of 2013. 30. Section 74 of Act of 2013 stipulates that where in respect of any deposit accepted by a company before the commencement of this Act, amount of such deposit or part thereof or any interest due thereon remains unpaid on such commencement or becomes due at any time thereafter, the company shall: (a) file, within a period of three months from such commencement or from the date on which such payments, are due, with the Registrar a statement of all the deposits accepted by the company and sums remaining unpaid on such amount with the interest payable thereon along with the arrangements made for such repayment, notwithstanding anything contained in any other law for the time being in force or under the terms and conditions subject to which the deposit was accepted or any scheme framed under any law; and (b) repay within one year from such commencement or from the date on which such payments are due, whichever is earlier. Subsection (2) of Section 74 of Act of 2013 provides that the Tribunal may on an application made b....
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....company in such form and manner as may be prescribed and a copy of the order passed by the Tribunal shall be filed with the Registrar, provided that Tribunal shall give notice to Central Government and Income Tax Authorities and shall take into consideration the representations, if any, made by that Government or authorities before passing any order under this section, provided further that such revised financial statement or report shall not be prepared or filed more than once in a financial year, provided also that the detailed reasons for revision of such financial statement or report shall also be disclosed in the Board's report in the relevant financial year in which such revision is being made. Subsection (2) of Section 131 says that where copies of previous financial statement or report have been sent out to members or delivered to the Registrar or laid before the company in general meeting, the revisions must be confined to: (a) the correction in respect of which the previous financial statement or report do not comply with the provisions of Section 129 or Section 134 of Act of 2013 and (b) the making of any necessary consequential alternation. Subsection (3) of Section....
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.... one year or more. 34. Section 430 of Act of 2013 says that no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force, by the Tribunal or the Appellate Tribunal. 35. Qua applicability of provisions of Companies Act, 2013, it is well settled law that a serious question of fraud and collusion cannot be decided by the Tribunal in a summary proceeding. Given the relief solicited for by respondent no.1 in the Suit for Declaration, Partition and Injunction, the Tribunal has no power to decide the title of the shares in summary proceedings. Section 58 of the Companies Act, provides that rectification of register of members has to be decided by Tribunal and as per Section 430, the Civil Court has no jurisdiction. At the same time, it is also a trite law that Tribunal has a power only to decide the iss....
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....not have any discretion in rectifying its register except to require the procedure being followed. 37. Seriously disputed question of title, the Supreme Court has held, cannot be decided by the Company Law Board inasmuch as the proceeding before Tribunal constituted under Companies Act 2013 is summary in nature and seriously disputed questions cannot be decided by Tribunal. Even if the proceeding is initiated in Tribunal, the seriously disputed questions have to be relegated to the Civil Court. If the question arises for the title of a person, in whose favour the shares are to be transferred, adjudication power may not be available to the Tribunal to exercise power under Section 58 of the Act of 2013. [See: Jai Mahal Hotels Private Limited v. Devraj Singh and others, 2016 (1) SCC 423; Union of India v. R. Gandhi, the President, Madras Bar Association, 2010 (6) SCR 857; and K. Ravinder Reddy v. Alliance Business School and others, (2016) 198 CompCas 481 (Kar)]. Insofar as judgements cited and relied upon by learned counsel for petitioner are concerned, the same are distinct and distinguish from the facts and circumstances of the present case. 38. Notwithstanding what has been disc....
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....e parties would be put to more or substantial mischief in the event of refusal to grant a temporary injunction and if the Court considers that the subject-matter or the suit must be maintained status quo, then discretion must be exercised in favour of the party seeking temporary injunction so that the subject matter of the suit in dispute can be preserved by directing to the party to maintain status quo. Reference in this regard is made to Gopal Laxmandas Lakhani v. Krishnaben Girdharilal Lalvani, AIR 2002 Guj 398; Sukkha Singh v. Mahal Singh, AIR 2003 Raj 21. 40. Order XXXIX Rule 1 of the Code of Civil Procedure relates to cases in which temporary injunction may be granted. It envisages that where in any suit it is proved by affidavit or otherwise that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or that the defendant threatens or intends to remove or dispose of his property with a view to defrauding his creditors, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, dama....
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.... appeal against exercise of discretionary jurisdiction is really an appeal in principle and that is why, unlike a regular appeal, in ordinary sense, where whole evidence on record is examined anew by appellate court, what is really examined, in an appeal against exercise of discretionary jurisdiction, is legality and validity of the order and it can be set aside and should be set aside only when there is a patent error on the face of the record or the order is against established or settled principles of law. If two views are possible and a view, which is reasonable and logical, has been adopted by Trial Court, the other view, howsoever appealing, would not be allowed to be substituted in place of the Trial Court's views, which are, otherwise, reasonable and logical. [See: Radhabari Tea Company (P) Ltd. v. Mridul Kumar Bhattacharjee and others, 2010(1) GLT 189]. 43. Injunction is a discretionary relief pending adjudication of the suit. Discretion has to be exercised on sound principles keeping in mind golden principles governing grant of injunction. Appeal against exercise of discretion is an appeal on principle. Appellate Court would normally not interfere with exercise of di....