2009(6) ALL MR 233
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

P.B. MAJMUDAR, J.

Mohan S/O. Babulal Jain & Ors.Vs.Bhanwarlal H. Chandak & Ors.

Miscellaneous Civil Application No.51 of 2009

15th September, 2009

Petitioner Counsel: Mr. JANAK DWARKADAS,Mr. D. D. MADON,Mr. GAURAV JOSHI , Mr. MAYURESH BORKAR
Respondent Counsel: Dr. VIRENDRA V. TULZAPURKAR,Mr. PHIROZE PALKHIWALLA,M/s. Crawford Bayley & Co.,Mr. ARIF BOOKWALLA,Mr. HARINDER TOOR,Mr. RAJESH M. YADAV,Mr. JAIDEEP RAUT,M/s. Chitnis & Co.
Other Counsel: Mr. SUNIL NAIR

Civil P.C. (1908), S.24 - Transfer application - Powers of Court under S.24 - Nature of proceedings pending before City Civil Court as well as High Court totally different - Transferring suit pending in City Civil Court may even prolong subsequent suit filed before High Court - Held, both the suits to be tried separately as nature of both the suits cannot be said to be same - Simply because some incidental averments are made in the previously instituted suit before the City Civil Court regarding the family settlement, that cannot be a basis for transferring the suit to High Court.

Simply because at the relevant time a statement is made before the earlier Bench by the concerned Advocate for respondent that the suit pending before Bombay City Civil Court may be transferred to the High Court, itself cannot be made a basis for transferring the suit from Bombay City Civil Court to the High Court. Dr. Tulzapurkar, learned Senior counsel for respondents, submitted that there were various respondents and even if any of the respondents might have agreed at the relevant time, the statement of the said Advocate cannot be said to be binding to all the respondents. Apart from the aforesaid aspect, considering the nature of proceedings, it cannot be said that the evidence in both the suits would be common in any manner. The prayer in the suit pending before the Bombay City Civil Court is only in connection with the appointment of directors. The Bombay City Civil Court is required to consider the question about the legality and validity of the decision in connection with the appointment of directors on the board of plaintiff No.2 company. Accordingly, the nature of the proceedings pending before the City Civil Court as well as High Court are totally different, as in one, the question is about the appointment of directors is required to be considered and to find out as to whether such appointment is made in consonance with the provisions of Companies Act, 1956. As against that, the scope of the proceedings pending in the High Court is in connection with the specific performance of the family settlement. By transferring the suit pending in the City Civil Court, it may result into delay and since both the suits are not in any way inter-connected with each other, it may even prolong the subsequent suit filed before this Court. Both the suits are required to be tried separately as the nature of both the suits cannot be said to be same. Simply because some incidental averments are made in the previously instituted suit before the City Civil Court regarding the family settlement, that cannot be a basis for transferring the suit to the High Court. In both the suits, plaintiffs are common. The petitioners themselves have chosen not to include prayer for specific performance regarding family settlement in the previously instituted suit before the City Civil Court and after taking leave of the Court, have filed subsequent suit for specific performance of the family settlement before the Original Side of the High Court. The plaintiffs now cannot insist that his suit in the City Civil Court should be transferred to High Court, though he has omitted the prayer for family settlement in the previously instituted suit. In any case, considering the nature of both the proceedings and the fact that even in the subsequent suit, there are additional defendants also, no ground is made out for transferring the suit pending before the City Civil Court to the High Court. The Civil Miscellaneous Application is therefore, rejected. 2008(1) ALL MR 914 (S.C.) - Rel. on. [Para 12,13,14]

Cases Cited:
Kulwinder Kaur @ Kulwinder Gurcharan Singh Vs. Kandi Friends Education Trust, 2008(1) ALL MR 914 (S.C.)=(2008)3 SCC 659 [Para 12]


JUDGMENT

JUDGMENT :- This is a transfer application under Section 24 of Code of Civil Procedure, by which the petitioners have prayed that the suit pending before the City Civil Court, Bombay, being No.949 of 2007 may be transferred to the Original Side of this Court and be heard with the Suit No.2189 of 2007, which is pending before the Single Judge of this Court. This transfer application is argued before me at a great length as if this Court is deciding the suit itself.

2. It is the case of the petitioners that they have already filed a suit in the City Civil Court, Bombay, being S.C. Suit No.949 of 2007 praying that the appointment on the Board of Directors of Plaintiff No.2 Company by which the defendants of the said suit have been appointed as directors is illegal, devoid and contrary to the provisions of law and the said appointment is not required to be acted upon. The present petitioners who are the plaintiffs in the suit have prayed for decree for permanent injunction restraining the defendants to project themselves as directors of plaintiff No.2 company pursuant to the alleged Form No.32 dated 12-02-2007 or acting or purporting to act as a director of the plaintiff No.2 company pursuant thereof in any manner.

3. It seems that the dispute is going on between the family members of the plaintiffs and defendants. It is the case of the plaintiffs before the City Civil Court that in order to put an end to the dispute, it was decided to enter into a family settlement between the family members of both the sides and that in February, 2004, the parties agreed to settle the dispute in a particular manner. Since this Court is not required to go into the details of the family settlement, it is not necessary to highlight the same in detail.

4. According to the petitioners/original plaintiffs, the defendants subsequently backed out from the said family settlement and has tried to backtrack from the said settlement. It is also the case of the petitioners that in the meanwhile, the petitioners came to know that the respondents in violation of the provisions of the Companies Act, made an attempt to appoint directors on the board of Plaintiff No.2 company without following due process of law as per the Companies Act, 1956. A suit before the City Civil Court is accordingly filed for the appropriate reliefs, as pointed out earlier, regarding appointment of the directors on the board of plaintiff No.2 company. In the plaint before the City Civil Court, a reference is also made regarding family settlement sought to be arrived at by the plaintiffs and defendants. Plaintiffs also obtained a leave under Order 2, Rule 2 of Code of Civil Procedure for filing substantive suit for specific performance of the family settlement. On the basis of the same, the plaintiffs also instituted subsequent suit being No.2189 of 2007 on the Original Side of this Court. In the suit filed on the Original Side of this Court, it is prayed that the Memorandum of Family Settlement dated 27th August, 2005 is valid, subsisting, binding and effective and the said settlement should be specifically enforced.

5. The plaintiffs thereafter, moved this application under Section 24 of Code of Civil Procedure, with a prayer that since the issue about the family settlement is overlapping in both the proceedings, the suit filed before the City Civil Court, Bombay, should be withdrawn and transferred to this Court and heard along with Suit No.2189 of 2007, which is pending before this Court.

6. During the course of hearing, Mr. Janak Dwarkadas, learned Senior Counsel for the petitioners, vehemently submitted that initially when the matter came before a Company Judge by way of Company Appeal No.22 of 2008, the counsel for the respondents therein, requested the Court that the suit pending before the Bombay City Civil Court being S.C. Suit No.949 of 2007 be withdrawn and transferred to this Court and the same may be heard along with Suit No.2189 of 2007. Mr. Dwarkadas, Senior counsel for the petitioners, has relied upon para No.5 of the said order.

7. In view of the same, it is submitted by Mr. Dwarkadas that now the present respondents are estopped from taking contrary stand and that the respondents now cannot oppose the prayer made by the petitioners to transfer the suit to this Court. Mr. Dwarkadas, learned Senior Counsel further submitted that in any case the issue about the family settlement is also going to arise in the City Civil Court also. He further submitted that in the subsequent suit filed by the plaintiffs for specific performance of the agreement, a specific issue is required to be considered about the family settlement between the parties. He further submitted that if the suit is not transferred to this Court, witnesses will have to attend both the proceedings and ultimately, the issue about family settlement will have be tried at different Courts. He further contended that it will be convenient for the parties to face the suits at a same place, as it will save time and money and it will also be more convenient to the witnesses to attend one Court instead of attending the proceedings at City Civil Court and High Court.

8. Dr. Virendra Tulzapurkar, learned Senior Counsel appearing for respondent Nos.9 to 11 and Mr. Arif Bookwalla, learned Senior Counsel, appearing for respondent No.21, strongly opposed the said prayer and it is submitted by them that the nature of both the suits are different and it is not a fit case wherein the powers under Section 24 of C.P.C., are required to be exercised.

9. I have heard the learned Senior counsel at great length and have gone through the plaints of both the suits as well as necessary material produced along with the transfer application. It is not in dispute that the prayers made in the suit pending before Bombay City Civil Court, are only in connection with the appointment of Directors on the Board of Directors of Plaintiff No.2 company. Looking to the plaint as a whole, the real issue is in connection with the appointment of directors on the board of plaintiff No.2 company. In the said suit, it is averred by the plaintiff that the defendants who purportedly claim to have been appointed directors are devoid of any legal sanctity and their appointment being void not entitled to project themselves as directors. In Para Nos.14 and 15 of the plaint, it is averred as under :

"14. The plaintiff therefore, are constrained to file the present suit seeking declaration that purported Form No.32 dated 12-02-2007 allegedly appointing the defendants as directors is illegal without any effect in law and void and therefore, not liable to be implemented or acted upon.

15. The cause of action has arisen on or about last week of February, 2007 when the Plaintiffs became aware and verified through internet of the purported appointment of the defendants of the 2nd plaintiffs Company by the alleged Form No.32 e-filed with the office of Registrar of Companies, Mumbai.

In Para No.21 of the plaint, following prayers have been made :

(a) Be it declared by this Hon'ble Court that the purported Board Resolution and Form No.32 dated 12-02-2007 purportedly giving intimation to the Registrar of Companies, Maharashtra Mumbai, about the alleged appointment of Defendants as directors of 2nd plaintiff Company is illegal, devoid of due process of law and not liable to be acted upon.

(b) For permanent injunction restraining Defendants Nos.1 to 8 to project themselves as directors of 2nd plaintiff Company pursuant to alleged Form No.32 dated 12-02-2007 or acting or purporting to act as a director of the 2nd plaintiff Company in pursuance thereof in any manner whatsoever.

(c) pending hearing and final disposal of the suit the defendants Nos.1 to 8 be restrained by an order of injunction of this Hon'ble Court from acting as a director or any manner whatsoever as director of 2nd plaintiff Company in pursuance of the alleged Form No.32 dated 12-02-2007 filed in the record of the Registrar of Companies in respect of 2nd Plaintiff Company.

(d) Interim and ad-interim relief in terms of prayer clause (c) above.

(e) Cost of this suit be provided for.

(f) Such other and further relief as this Hon'ble Court may deem fit and proper be given."

10. It cannot be disputed that the suit filed before the Bombay City Civil Court is essentially a suit in connection with the appointment of directors on the board of plaintiff No.2 company and the Bombay City Civil Court is not required to examine in detail the aspect about the family settlement, as looking to the plaint the real issue is in connection with the procedure adopted by the respondents in the matter of appointment of directors on the board of plaintiff No.2 Company.

11. So far as the suit pending on the Original Side of this Court is concerned, it is filed for specific performance of the agreement, wherein the entire issue is in connection with the family settlement. The nature of both the proceedings are different. It is pointed out by both the learned Senior counsel for the respondents that the suit in the City Civil Court is likely to be over within a short period. As against this, a suit pending in the High Court is likely to take considerable time and it may not be over within a period of 57 years.

12. At this stage, a reference is required to be made to the decision of the Supreme Court in the case of Kulwinder Kaur @ Kulwinder Gurcharan Singh Vs. Kandi Friends Education Trust and Ors., (2008)3 SCC 659 : [2008(1) ALL MR 914 (S.C.)]. While considering the scheme of Section 24, the Supreme Court observed that while exercising powers under Section 24, the Court is required to consider nature of the proceedings and other relevant factors and orders under Section 24 cannot be passed ipse dixit and the court is required to consider reply filed by the other side. It has been held by the Supreme Court that "although the discretionary power of transfer of cases cannot be imprisoned with a straitjacket of any cast-iron formula unanimously applicable to all situations, it cannot be gain said that the power to transfer a case must be exercised with due care, caution and circumspection".

12-A. It is required to be noted that simply because at the relevant time a statement is made before the earlier Bench by the concerned Advocate for respondent that the suit pending before Bombay City Civil Court may be transferred to the High Court, itself cannot be made a basis for transferring the suit from Bombay City Civil Court to the High Court. Dr. Tulzapurkar, learned Senior counsel for respondents, submitted that there were various respondents and even if any of the respondents might have agreed at the relevant time, the statement of the said Advocate cannot be said to be binding to all the respondents.

13. Apart from the aforesaid aspect, considering the nature of proceedings, in my view, it cannot be said that the evidence in both the suits would be common in any manner. The prayer in the suit pending before the Bombay City Civil Court is only in connection with the appointment of directors. The Bombay City Civil Court is required to consider the question about the legality and validity of the decision in connection with the appointment of directors on the board of plaintiff No.2 company. Accordingly, the nature of the proceedings pending before the City Civil Court as well as High Court are totally different, as in one, the question is about the appointment of directors is required to be considered and to find out as to whether such appointment is made in consonance with the provisions of Companies Act, 1956. As against that, the scope of the proceedings pending in the High Court is in connection with the specific performance of the family settlement. In my view, by transferring the suit pending in the City Civil Court, it may result into delay and since both the suits are not in any way inter-connected with each other, it may even prolong the subsequent suit filed before this Court.

14. In my considered view, both the suits are required to be tried separately as the nature of both the suits cannot be said to be same. Simply because some incidental averments are made in the previously instituted suit before the City Civil Court regarding the family settlement, that cannot be a basis for transferring the suit to this Court. In both the suits, plaintiffs are common. The petitioners themselves have chosen not to include prayer for specific performance regarding family settlement in the previously instituted suit before the City Civil Court and after taking leave of the Court, have filed subsequent suit for specific performance of the family settlement before the Original Side of this Court. The plaintiffs now cannot insist that his suit in the City Civil Court should be transferred to this Court, though he has omitted the prayer for family settlement in the previously instituted suit. In any case, considering the nature of both the proceedings and the fact that even in the subsequent suit, there are additional defendants also, no ground is made out for transferring the suit pending before the City Civil Court to this Court. I do not find any justification for the said prayer. The Civil Miscellaneous Application is therefore, rejected. Notice discharged.

Application dismissed.