COMMERCIAL APPEAL NO. 148 OF 2017

5th August 2019

Petitioner Counsel: Mr. Shreegesh M. K. Mr. Omkar M. Kulkarni
Respondent Counsel: Ms. Anita Irani Mr. Rohit Kapadia Mr. Karl K. Shroff Mr. Hemant Mehta Mr. S. Nagvadaria Ms. Anamika Tiwari Mr. Abhishek Puri Hassan Khan
Act Name: Arbitration and Conciliation Act, 1996 Companies Act, 1956 Limitation Act, 1963

Section :
Section 9 Arbitration and Conciliation Act, 1996 Section 108(1A) Companies Act, 1956

Cases Cited :
Paras 3, 48: Messer Holding Ltd. Vs. Shyam Madan Mohan Ruia & Ors., (2016) 11 SCC 484

JUDGEMENT

PRADEEP NANDRAJOG, CJ.

1. The Appellant is the Plaintiff in Suit No. 2410/2008. The Respondents are the 13 Defendants in the Suit.

2. The Appellant is aggrieved by the Impugned Order dated 16th March 2017 deciding the preliminary issue concerning the plea of the bar of limitation, holding that qua prayers (q) (r), (s), (t) and (u) the suit is barred by limitation resulting in the suit continuing for the remaining prayers (v), (w), (x) and (z).

3. The litigation between the parties till the filing of Suit No.2140/2008 and the Impugned Order being passed could profitably be noted by us with reference to the decision of the Supreme Court reported as (2016) 11 SCC 484 Messer Holding Ltd. Vs. Shyam Madan Mohan Ruia & Ors.

4. Messer Griesham GmbH, a German Company (hereinafter referred to as 'MGG') entered into a Share Purchase and Cooperation Agreement (hereinafter referred to as 'AGREEMENT-1') with the shareholders of an Indian company named Goyal Gases Ltd. (hereinafter referred to as 'GGL') on 12.5.1995. By virtue of the said agreement, MGG purchased 30% equity shares of GGL. Subsequently, MGG increased its shareholding in GGL to 49%. Clause 9 of the Agreement I reads:
“9. Non-competition clause
GGL and all Goyal Group companies will co-operate in the Indian market with right to first refusal basis/with MGG and will not for the duration of this co-operation support in any way directly or indirectly the activities of MGG’s competitors with regard to gas business. MGG will give written information 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.”
(emphasis supplied)

5. Bombay Oxygen Corporation Ltd. (hereinafter referred to `BOCL') now renamed as Bombay Oxygen Investment Ltd. (hereinafter referred to as the ‘BOIL’) is a company registered as per Laws in India, majority shares whereof were held by a group of persons known as the RUIAS. On 23.6.1997, MGG entered into another Share Purchase Agreement (hereinafter referred to as `AGREEMENT -II') with Ruias as per which MGG agreed: (i) to purchase 45001 shares of BOIL from the Ruias, and (ii) to acquire another 30000 shares of BOIL from the open market which would make MGG the majority shareholder of BOIL, creating a controlling interest. Clause 6.1 of AGREEMENT-II reads;
“6.1 Right of First Refusal:
With effect from the date this Agreement becomes effective, neither party shall sell any shares in the Company held or acquired by it without first, offering the Shares to the other party. The offer shall be in writing and shall set out in the price and other terms and conditions. If the offeree does not agree to purchase the Shares so offered the offerer shall be free to sell the Shares to any person (other than a competitor of the offeree), but at the same price and on the same terms as offered to the offeree. This right of first refusal does not apply to any sale of shares by the purchaser to a company of the Hoechst Group. In a company directly or indirectly controlled by or under direct or indirect common control with the Hoechst Group. For the purposes of this definition “control” means ownership, directly or indirectly or more than 50 percent of the issued and outstanding voting stock or ownership interest of the Company.”

6. Pursuant to the AGREEMENT-II, MGG made a public announcement on 27.6.1997 disclosing its intention to acquire 30000 shares of BOIL from public, as required under Chapter-III of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

7. GGL learnt about Agreement II and protested in writing against the attempt of MGG to independently acquire shares of BOCL alleging that this would breach Clause 9 of the AGREEMENT-I. Correspondence ensued between GGL and MGG resulting in AGREEMENT-III being executed between the two on 8.11.1997 recording that out of 75001 shares of BOIL to be acquired by MGG under AGREEMENT-II, 50000 shares will be acquired in the name of GGL and only 25001 will be acquired in the name of MGG.

8. Ruias learnt of the AGREEMENT-III and by their letter dated 5.5.1998 informed MGG that they were not agreeable to the proposal of MGG and GGL jointly purchasing the shares of the BOCL. In view of the said development, MGG informed GGL on 7.5.1998 that MGG was terminating AGREEMENT-III.

9. Thereafter, MGG proceeded to acquire 75001 shares of the BOCL on its own and paid a sum of ₹ 13.5 crores to Ruias towards the value of 45001 shares agreed to be purchased vide AGREEMENT II.

10. On 26.8.1998, GGL filed Civil Suit No.1810/98 (hereinafter referred to as 'SUIT-I') in the High Court of Delhi against MGG seeking 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 Bombay Oxygen Corporation Ltd. on its own and without the participation of plaintiff.

11. On 14.9.1998, GGL filed an interim application No. 7428/98 in Suit-I as also an application under Section 9 of the Arbitration and Conciliation Act, 1996, registered OMP No. 205/98, in both applications seeking interim order to restrain MGG from acquirin shares of BOCL on its own.

12. The learned trial Judge dismissed both the applications by two separate orders dated 22.9.1998.

13. GGL carried the matter in intra court appeals. By the appellate order dated 23.10.1998, a Division Bench of the Delhi High Court restrained MGG from acquiring the shares of the BOCL.

14. Aggrieved by the same, MGG filed petitions seeking Special Leave to Appeal before the Supreme Court and on leave being granted Civil Appeal Nos. 728 and 729 of 1999 came to be registered and by an interim order dated 18.12.1998 the Supreme Court ordered:-
“Meanwhile, it will be open to the Petitioner M/s. Griesheim GMBH to make payment for purchasing 10,000 (sic 30,000) shares from the public and also to take delivery of these shares but they shall not take further steps for the purpose of getting their names registered as shareholders in respect of these shares. Respondent No. 1 Goyal MG Gases Ltd is directed to nominate its Arbitrator within a period of two weeks from today and take appropriate steps to pay the full fees and it shall also file its claims statement within one week thereafter.”

15. The said appeals were disposed of by an order 8.2.1993, relevant part whereof reads:-
“2. Earlier by our order dated 18.12.98, we had permitted the appellant to make payment to the shareholders. The payment having been made now custody of those shares is with the appellant. Bombay oxygen wants to borrow money from a bank and the appellant wants to be a guarantor on the strength of those shares and for that reason it wants an order 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.
3. 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.
4. 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 MG Gases Ltd. 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 court, it will be open to the parties to do so. Till any order to the contrary is passed by the Arbitrators, our order dated 22.1.99 will continue to operate. The appeals are disposed of accordingly.”

16. The Appellant (hereinafter referred to as ‘MHL’) was incorporated in British Virgin Islands on 20.01.2000 by MGG and another company known as Morgan Trade and Commerce which is a 100% owned subsidiary of GGL. The authorised share capital of MHL is 10,000,000 Deutshe Mark divided into 10,000,000 shares. It has two Directors, one representing MGG and the other Morgan Trade and Commerce. Interestingly feature of MHL is that the shares of this company are bearer shares. It is an admitted case of all the parties that the law of British Virgin Islands permits it.

17. MGG and GGL settled their dispute (evidenced by two documents dated 17.02.2000 and 13.3.2000) pursuant to which MGG filed two applications (I.A.s 17 & 18 of 2000) in Civil Appeals No.728-729 of 1999, which had already been disposed of on 8.2.1999, praying that:
“(a) permit the said 75001 shares to be transferred and registered in the name of Messer Holdings Ltd. and permit complete rights attached to these shares to be enjoyed by Messer Holdings Ltd. pending registration of transfer of shares 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.”

18. When the said I.As were taken up by the Supreme Court on 20th April, 2000, it was 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.”

19. Interestingly, after seeking permission from the Supreme Court to withdraw from the arbitration proceedings initiated earlier, MGG and GGL filed a joint application before the arbitral tribunal on 9.8.2000 requesting the arbitral tribunal to pass a consent award. On such an application, the ICC Arbitral Tribunal passed a consent award on 21.9.2000, the operative portion of which reads as follows:
“NOW THEREFORE the tribunal hereby makes the following award by consent of the parties in terms of the Joint Application set out in Annexure “I” hereto, which shall form part of this Award:
1(a) The 75001 shares of Bombay Oxygen Corporation Limited (BOCL) purchased by the Respondent at a price of Rs.22.5 crores shall be held and registered in the name of Messer Holdings Ltd. (MHL); however, for technical and procedural reasons the shares will first be registered in the name of the respondent and immediately thereafter the said shares will be registered in the name of MHL as mentioned in para 2 of the Joint Application. Complete rights attached to the 75001 shares of BOCL qua the BOCL as well as transferos (transfer – sic) of the shares to the Respondent (even pending registration in the name of the Respondent and/or in the name of MHL) will be henceforth exercised by the Respondent through MHL who will act for and on behalf of the Respondent. MHL will be authorised by 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.”

20. 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 along with duly filled transfer forms and a power of attorney.

21. SUIT-I was withdrawn by GGL, but relevant would it be to highlight that by said time had on 28.4.1999 already filed a suit in this Court, inter-alia, against MGG and GGL registered as Suit No.2499/1999 (hereinafter referred to as SUIT-II), in substance seeking enforcement of clause 6.1 of the AGREEMENT-II, evidenced by the prayers made therein, which read as under:-
“(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) 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, 1997 being Ex. ‘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 Ex. ‘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 dated 23rd June, 1997 being Ex. ‘B’ hereto;”

22. In the said Suit, Ruias filed Notice of Motion No.1804 of 1999, praying that MGG and GGL be restrained from committing breach of Clause 6.1 of AGREEMENT-II. By an interim order dated 6.5.1999, MGG and GGL were injuncted from committing breach of Clause 6.1 of AGREEMENT-II. MGG filed an affidavit in the said application undertaking that it would not breach Clause 6.1 of AGREEMENT-II. By an order dated 29.2.2000, this Court disposed of the said application recording the undertaking filed by MGG with a further direction that MGG and GGL “not to implement or enforce any award made by the arbitrators without obtaining the leave of the Court.”

23. 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.

24. After obtaining the consent award on 21.9.2000, MGG filed Notice of Motion No.2933/2000 before this Court in SUIT-II seeking leave of the Court to implement and enforce the consent award.

25. Ruias filed Chamber Summons No. 1005/2000 to amend Suit No.2499/1999 (Suit II) while incorporating further reliefs and to implead MHL as a Defendant. The amendment was allowed on 4.10.2002.

26. This led the Ruias to file their second Suit bearing No.509 of 2001 (hereinafter referred to as `SUIT- III') before this Court on 5.2.2001 praying:
“a) for a declaration that the Share Purchase Agreement dated 23rd June 1997 is liable to be rescinded;
b) for an order of this Hon’ble Court directing the said Share Purchase Agreement dated 23rd June 1997 be rescinded;
c) that in the alternative to prayers (a) and (b) above, for a declaration that the Share Purchase Agreement dated 23rd June 1997 was voidable and has been validly avoided by the Plaintiffs;
d) that in the alternative to prayers (a), (b) and (c) above, for a declaration that the Share Purchase Agreement dated 23rd June 1997 was terminable by the Plaintiffs and has been validly terminated by the Plaintiffs;
e) that in the alternative to prayers (a), (b), (c) and (d) above, for a mandatory order and direction by this Hon’ble Court directing the 1st Defendant to offer the said 75,001 shares to the Plaintiffs in accordance with the procedure prescribed in Clause 6.1 of the Share Purchase Agreement dated 23rd June 1997;
f) for a declaration that the acquisition of the said 30,000 shares pursuant to the Public offer is illegal, unlawful, null and void and of no legal effect whatsoever;
g) for a declaration that the said Agreement dated 17th February 2000 and the said Consent Award dated 21st September 2000 are not binding on the Plaintiffs and/ or Defendant No.2 and/or that the same are illegal, null and void;
h) for a permanent injunction restraining the defendant No.1,3 and 4 from-
(i) acting in pursuance of the Share Purchase Agreement dated 23rd June 1997;
(ii) exercising any rights in respect of the said 75,001 shares (in particular voting rights in connection therewith) and/or from receiving any dividends, rights in respect of the same;
(iii) exercising any rights including its beneficial ownership in, to, upon or in respect of the said 75,001 shares.
i) that the Defendants be restrained by permanent order and injunction of this Hon’ble Court from transferring and/or registering and/or taking any steps to transfer and/or register the said 75,001 shares in the name of any person or persons, firm or body corporate including 1st and/or 3rd and/or 4th Defendants without the consent of the Plaintiffs;
j) that the 1st defendant 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”.

27. In the said suit, Ruias filed a 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 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.

28. Said SUIT-II was amended from time to time on three occasions pursuant to the orders of this Court dated 22.02.2000, 04.10.2002 and 08.06.2011. The prayer in SUIT-II after such Amendments reads:-
“Rider-I(a)
(a) (i) For a declaration that the acquisition of the said 30,000 shares pursuant to the public offer is illegal, null and void ab-initio and of no legal effect whatsoever.
(ii) For a permanent order and injunction restraining the defendants from exercising any rights in respect of the said 30,000 shares including and in particular voting rights.
(b) (i) for a declaration that the said agreement dated 23rd June, 1997 (Exhibit –B hereto) stands validly terminated and/or avoided.
Rider-N Prayer (b)(ii)(a)
“(b)(ii)(a) that it be declared that Defendant Nos. 3 to 5 have no right, title or interest of any nature whatsoever in respect of the 75001 shares of Defendant No. 2.”
Rider – O prayer (b)(ii)(b):
“(b)(ii)(b), that in the alternative to prayer (b)(ii) this Hon’ble Court be pleased to order and direct the Defendant Nos. 1 and 3 to 5 to deliver to the respective Plaintiffs 45001 shares of Defendant No. 2 as also to return to the respective members of the public the 35000 shares;
(ii) that the defendant Nos. 1, 3, 4 and 5 be ordered and decreed to deliver/return to the respective plaintiffs the said 75,001 shares together with all accretions thereto from 23rd June, 1997 on such terms as this Hon’ble Court directs.
(iii) for the purpose aforesaid the defendant Nos. 1, 3, 4 and 5 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.
Rider-P prayer (b)(iii)(a)
“(b)(iii)(a), that in the event of the Defendant Nos. 1 and 3 to 5 failing to deliver to the Plaintiffs the said 75001 shares of Defendant No. 2 the same be cancelled and Defendant No. 2 be ordered and directed to issue duplicate shares in the name of the Plaintiffs.”
(iv) for a permanent order and injunction restraining the defendants from transferring and/or registering and/or taking any steps to transfer and/or register the said 75,001 shares in the name of any person or persons, firm or body corporate including the 1st and/or 3rd and/or 4th defendants without the consent of the plaintiffs.
(v) for a permanent order and injunction restraining defendant nos. 1, 3 and/or 4 and 5 from exercising any rights, including as beneficial owner, in, to, upon, or in respect of the said 75,001 shares.
a(1)(i) In the alternative and in the event of prayer (b) not being granted 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) 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, 1997 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 dated 23rd June, 1997 being Ex. ‘B’ hereto;”
Rider-C
(b)(1)(a) In the alternative and in the event of prayer (b) not being granted and In the event of it being held that the said agreement is void defendant Nos. 1, 4 and 5 be ordered and decreed to deliver/return to the respective Plaintiffs the said 45001 shares together with all accretions thereto from 23rd June 1997 on such terms of this Hon’ble Court may direct.
(b) For the purpose aforesaid defendant Nos. 1, 4 and 5 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.”

29. On 5.12.2002, Ruias and MGG entered into a settlement, in writing, of the disputes between them by rescinding AGREEMENTII. Recording in the Agreement that MGG was not in a position to return to Ruias the Share Certificates and other relevant documents for the 45001 shares of BOCL because MGG was not in possession of the shares and had no knowledge as to where the shares were lying. Concerning 30,000 shares acquired by MGG from the market it was likewise recorded that MGG does not have custody of the shares and has no knowledge as to where the said shares were lying. It was recorded that said shares need not be recorded in the name of MGG. The settlement records that in consideration for the foregoing Ruias agreed to pay MGG US$ 154,642 for 75,001 shares of BOCL. It was recorded that in view of the settlement, Ruias would not prosecute the proceedings pending before this Court and the Supreme Court against MGG but could continue to do so against MHL and GGL.

30. Inspite of the Agreement, Ruias continued with Suit II and Suit III and amended Suit No.II on 8.6.2011.

31. Since neither Ruias nor MGG disclosed to the Court as to what settlement was arrived at between the two, on 17.3.2003 Mr. Ajit Shukla authorised Officer of GGL filed an affidavit stating that Ruias and MGG had only disclosed a settlement and thus a prayer was made to direct Ruias and MGG to produce the settlement.

32. Without disclosing the terms of the settlement between Ruias and MGG, Ruias pursued Suit II and Suit III and took out various Notices of Motion in the said Suits by urging that the initial transfer of shares of BOCL to MGG was vitiated by misrepresentation and acquisition of shares by MGG violated SEBI Regulations. All pending Notices of Motion were dismissed on 26.3.2003. Even Notice of Motion No.534/2002 filed in Suit III by MHL was dismissed and this led MHL to file an appeal against the order dated 26.3.2003 on 3.11.2003.

33. On 26.4.2005 MHL browsed the website of US Security Exchange Commission showing that 75,001 shares of BOCL acquired by MGG stood reverted to Ruias who had decided to restructure BOCL. Therefore vide Notice of Motion No. 1308/2005 in Appeal No. 855/2003 challenging the Single Judge order dated 26.3.2003 dismissing Notice of Motion No. 534/2002 in Suit III it prayed that a direction be issued to Ruias to produce the Settlement Agreement dated 5.12.2002.

34. On 17.6.2005 Counsel for MHL requested Ruias to furnish a copy of the Settlement Agreement dated 5.12.2002 executed between Ruias and MGG to enable MHL to understand the terms of the Agreement to which counsel for Ruias replied on 27.6.2005 stating that the said settlement was not irrelevant material for disposal of Suit II and Suit III.

35. On 28.6.2005 Ruias filed reply to Notice of Motion No. 1308/2005 filed in Appeal No. 855/2003. On 7.7.2005 MHL filed Notice of Motion No. 1922/2005 in Appeal No. 855/2003 seeking disclosure of the Agreement dated 5.12.2002. Ruias filed a reply to the said Notice of Motion on 8.8.2005 opposing production of the Agreement pleading that MHL was indulging in a roving enquiry. Ruias pleaded that the settlement was irrelevant to dispose of Suit II and Suit III.

36. Rejecting the objections of Ruias, on 28.9.2005, the Division Bench disposed of Notice of Motion No. 1922/2005 directing Ruias to disclose the settlement agreement and pursuant thereto, on 14.10.2005 Ruias furnished copy of the settlement agreement dated 5.12.2002 to MHL.

37. We ignore various orders passed in Appeal No. 855/2003 filed by MHL for the reason same are irrelevant and noting the same would be to unnecessary burden our opinion, which as such is already overburdened with the narrative of the facts and we jump to the year 2008, when events and orders relevant for our opinion occurred.

38. On 4.2.2008, BOCL executed a Development Agreement in favour of another company known as HDIL granting development rights in respect of three pieces of immovable properties ad-measuring 15317.77 sq. mtrs., 3513.70 sq. mtrs. and 47762.20 sq. mtrs. of land situated at Kurla Taluka of Maharashtra owned by BOCL. The next day BOCL informed Bombay Stock Exchange about the abovementioned development agreement. On 26.3.2008, HDIL mortgaged the said property in favour of the Union Bank of India for securing a term loan of 230 crores.

39. On 23.4.2008, MHL filed Suit No.2410 of 2008 (hereinafter SUIT-IV) against BOCL, RUIAS, HDIL etc. seeking various reliefs including a declaration of ownership of 75001 shares of BOCL etc. evidenced from prayers (q) to (z) which read as under:-
“q) That this Hon’ble Court be pleased to declare that the Plaintiff is the beneficial owner of the suit shares being 75001 shares in the 1st Defendant company, more particularly described in the schedule annexed as Exhibit A hereto and is entitled to legal ownership thereof;
r) That the Defendant Nos.1 to 10 be directed by a mandatory order and injunction of this Hon’ble Court to carry out all acts, deeds and things and extend all cooperation necessary to secure registration of the suit shares aggregating to 75001 shares in the 1st Defendant Company, more particularly described in Exhibit A hereto in the name of the Plaintiff;
s) That this Hon’ble Court be pleased to declare that the purported reversion/transfer of the suit shares being 75001 shares in the 1st Defendant Company, more particularly described in the schedule annexed as Exhibit A hereto by Defendant No.10 to Defendant nos.2 to 9 under the purported Agreement dated 5th December, 2002 is illegal, null and void and of no legal effect;
t) That this Hon’ble Court may be pleased to direct Defendant Nos.2 to 9 and 10 to deliver up the said Agreement dated 05.12.2002 at Ex: CC for cancellation and this Hon’ble Court be pleased to cancel the same;
u) That this Hon’ble Court be pleased to issue an Order and injunction restraining Defendant Nos.2 to 10 from exercising any 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 Court be pleased to direct Defendant Nos.1 to 10, 12 and 13 to deliver up the said deed of mortgage dated 23.3.2008 at Exhibit XX hereto or cancellation and this Hon’ble Court be pleased to cancel the same;
z) That this Hon’ble Court be pleased to Order and decree Defendant nos.2 to 10 to jointly and severally pay to the Plaintiff, damages/compensation in the sum of Rs.500 crores as per the Particulars of Claim annexed herewith as Exhibit ZZ along with interest thereon at the rate of 18% per annum from the date of the suit till payment and/or realisation;”

40. On 1.9.2010 the Division Bench dismissed Appeal no. 855/2003 and Notices of Motion filed by MHL against which GGL and MHL preferred SLP C No.33429-34/2010 and SLP C No.23088-90/2012. It was in the background of the above-mentioned litigation that the decision reported as (2016) 11 SCC 484, disposing of SLP(C) Nos. 33429-33434 of 2010 and SLP(C) Nos. 23088-90/2012 was pronounced by the Supreme Court.

41. After noting the above recorded facts by us, which we have in turn noted from the decision of the Supreme Court, in paragraphs 34 to 45 the Supreme Court terminated the proceedings recording as under:-
“34. 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 logical consequence flowing from such lapsing of the orders is that any act or omission of any party to the said suit, either in pursuance of or in obedience to such interlocutory orders would be without any legal efficacy.
35. SUITS II and III filed by the RUIAS are pending as of today. The substance of SUIT-II is that RUIAS do not want MGG to transfer any of the shares of BOCL acquired by MGG pursuant to AGREMEENT-II in favour of either GGL or MHL or any other person without first offering them to RUIAS. Such a transfer in the opinion of RUIAS would be in violation of Clause 6.1 of the AGREEMENT-II. Coming to SUIT-III, RUIAS want to wriggle out of the AGREEMENT-II and therefore, the various alternative prayers in substance seeking to nullify the acquisition of 75001 shares by MGG under AGREEMENT-II. They also rely upon the events subsequent to 23.06.1997 - transactions between GGL and MGG etc. and seek various prayers which are already noticed. Having filed SUIT-III, RUIAS once again amended the SUIT-II enlarging the scope of the Suit. Whether such amendments are legally tenable or not is a question to be examined from the point of view of the principles governing the law on the question of joinder of causes of action etc.
36. Apart from that the continuance of the SUITII and SUIT-III simultaneously raises too many questions regarding their maintainability. However, in our view, such questions need not be examined because RUIAS and MGG entered into an agreement dated 05.12.2002 the gist of which is noticed earlier at paras 23 & 24 (supra). By the said agreement, RUIAS also agreed not to prosecute SUITS-II and III insofar as the suits pertain to “MGG or its affiliates….” etc.
“(a) not to prosecute the following proceedings pending in the Bombay High Court and in Supreme Court of India against “MGG” or its affiliates or its directors, officers or employees (excluding “MHL” and Goyal MG Gases Ltd. but including directors nominated by “MGG” on the Board of “MHL” and/or Goyal MG Gases Ltd.);
(i) Civil Suit No.2499 of 1999 titled Shyam Madan Mohan Ruia v. Messer Griesheim GmbH .
(ii) Civil Suit No.509 of 2001 titled Shyam Madan Mohan Ruia v. Messer Griesheim GmbH.”
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.
37. 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. 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.
38. The existence of title in MGG in the said 75001 shares cannot be disputed by either GGL or MHL, at least, till the date of the consent award, i.e. 21.9.2000 because GGL and MHL’s claim for title over the said shares flows from MGG’s prior title and the subsequent alleged transfer pursuant to the consent award. In such a case, because of MGG’s purported transfer of the title in the 75001 shares to RUIAS under the settlement dated 5.12.2002, RUIAS should normally be entitled to have their names entered into the records of BOCL as holders of the said shares by following appropriate procedure. If either GGL or MHL is objecting to the right of MGG to effect the said transfer in favour of RUIAS, they must establish a superior title (to MGG) in the said shares. It goes without saying that it can be done only in some legal action initiated by either GGL or MHL or both jointly. But they cannot seek a declaration of their title in the SUITS-II and III filed by the RUIAS. In a bid to establish their title MHL filed SUIT-IV. The right of MHL, if any, will have to be decided in the said Suit. Until the said suit is decided, we do not see any ground in law on which either GGL or MHL can object to the transfer of the shares in favour of RUIAS pursuant to the settlement dated 5.12.2002.
39. What exactly is the procedure which RUIAS are required to follow to effectuate the transfer of shares pursuant to the settlement dated 5.12.2002 is for RUIAS to explore. Because during the long pendency of the instant litigation there is a considerable change in the law regarding the procedure governing the transfer of shares in companies by virtue of amendments in the Companies Act, 1956 and the advent of the Depositories Act, 1996 etc. We make this observation because the 75001 shares acquired by MGG pursuant to AGREEMENT-II could not be registered in the name of MGG because of the various interim orders passed by various courts at different stages in SUITS-I, II and III. SUIT-I was withdrawn by the plaintiff (GGL). In view of the subsequent settlement dated 5.12.2002 between MGG and RUIAS, no dispute survives between MGG and RUIAS. Therefore, SUITS-II and III are required to be dismissed as without any cause of action insofar as MGG and its officers etc., neither MHL nor GGL can compel RUIAS to prosecute those suits.
40. 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. 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. 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 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 defendant Nos. 1, 3, 4 and 5 be ordered and decreed to deliver/return to the respective plaintiffs the said 75,001 shares together with all accretions thereto from 23rd June, 1997 on such terms as this Hon’ble Court directs.
– SUIT- II
j) that the 1st defendant 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.
- SUIT-III
That is, for a declaration in favour of RUIAS that they are entitled to the recovery of 75001 shares jointly against MGG, GGL and MHL etc. RUIAS having agreed not to prosecute the suits against MGG cannot continue the suits against other defendants in the suits whose claim (if any) rests on the right and title of MGG.
41. The continuance of SUITS-II and III, in our opinion, is, therefore, wholly without any cause of action and an abuse of the judicial process.They are, therefore, required to be dismissed and accordingly dismissed. Consequently, all the interim orders passed by the various Courts (including this Court) earlier in proceedings arising out of the said two suits lapse. We also declare that all interim orders passed by any Court in any proceeding arising out of SUIT-I also lapsed in view of the withdrawal of the suit by GGL.
42. Therefore, these SLPs filed by MHL and GGL purportedly aggrieved by the impugned orders passed in the various applications filed in the two suits filed by RUIAS become infructuous. Therefore, the said SLPs arising therefrom are dismissed.
43. The consequent factual position would be:
(i) the legal rights acquired (whatever they are) by MGG in 45001 shares of BOCL purchased from RUIAS pursuant to AGREEMENT-II should revert back to RUIAS unless it is found that the purported transfer of 45001 shares by MGG pursuant to the consent award dated 21.09.2000 in favour of MHL created any right or interest in favour of MHL. Such a claim of MHL can only be examined in SUIT-IV filed by MHL.
(ii) Another 30000 shares were acquired by MGG from the public pursuant to AGREEMENT-II MGG purported to transfer them by virtue of the settlement dated 05.12.2002 in favour of RUIAS. If either GGL or MHL has any claim over those shares, such a claim must be made and established by them in accordance with law, but not in the suits filed by RUIAS. In order to establish such a claim, MHL already filed SUIT-IV to which both GGL and MGG are parties apart from Goyals and others.
44. However, in the absence of any legally established title as on today to the abovementioned shares in any party other than MGG, whether RUIAS would be entitled pursuant to the settlement dated 05.12.2002, to have their names entered into the registers of BOCL as holders of the said shares is a matter for RUIAS to explore. However, such an entitlement if any should be subject to the result of the SUIT-IV.
45. 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 SUITIV are at liberty to raise every defence available in law and fact to them.

42. In Suit IV i.e. Suit No. 2410/2008 filed by MHL, a preliminary objection was raised by BOCL and Ruias that the suit was barred by limitation and the plea taken was that after MHL was incorporated on 20.1.2000 and 75,001 share certificates of BOCL were handed over to it, it did not lodge the shares with BOCL for transfer in its name and entering its name in the Register of Share Holders because MHL was aware of Ruias claiming title to 45,001 shares with further plea that acquisition of 30,000 shares by MGG was illegal and that when Chamber Summons No. 1005/2000 filed by Ruias to amend Suit No. 2499/1999 (Suit II) was allowed on 4.10.2002 impleading MHL as a party, it became aware of the fact that Ruias were claiming a title to the shares and thus cause of action to sue accrued to MHL, if not earlier, on 4.10.2002 to either file a suit seeking declaration of title to the shares or to file a counter-claim in Suit II. The plea in response by MHL was that till it did not acquire actionable knowledge, till 14.10.2005 when settlement agreement dated 5.12.2002 was supplied to it thus cause of action to sue accrued on 14.10.2005 and the suit filed by it i.e. Suit IV on 23.4.2008 was within a period of three years reckoned from 14.10.2005.

43. Vide Impugned decision dated 16.3.2017, the learned Single Judge has held in favour of Ruias on the reasoning that, if not earlier, right to sue accrued to MHL on 4.10.2002 when it was impleaded as a Defendant in Suit II and became aware of the fact that Ruias were claiming title to the shares in dispute. The learned Single Judge has held that Ruias claim made known to MHL was no idle claim or boast. The claim was in Court proceedings. If claim succeeded, MHL's rights would have been infringed. The suit represented the clearest and the most unambiguous threat to MHL as per the learned Single Judge. The learned Single Judge has held that from the fact that on 11.4.2002 MHL filed Chamber Summons No. 455/2002 seeking impleadment in Suit II, is further proof of the fact that MHL clearly perceived Suit II as a threat to its title and therefore had sought impleadment. The learned Single Judge has held that merely because MHL received copy of the settlement agreement dated 5.12.2002 between Ruias and MGG on 14.10.2005 was immaterial. Since evidence had been led, and frankly we fail to understand why oral evidence was necessary, for the reason MHL clearly pleaded that since it was challenging the settlement agreement dated 5.12.2002, knowledge whereof was gained by it only on 14.10.2005 when Ruias supplied copy thereof to MHL, right to sue would accrue on 14.10.2005 and the contra stand taken by Ruias was that if not earlier, right to sue accrued when MHL itself filed Chamber Summons No. 455/2002 on 11.4.2002 in Suit II for the reason, grounds pleaded to be impleaded was a right claimed by MHL on the shares in dispute. Be that as it may, the oral evidence led shows that those incharge of MHL were aware of the dispute between MGG and GGL on the one hand and MGG and Ruias on the other hand. The learned Single Judge has referred to various authorities cited before him in which on the facts of said cases Courts determined as to when right to sue accrued. The learned Single Judge has held that Article 59 of the Limitation Act, 1963 was not attracted because the settlement agreement dated 5.12.2002 between Ruias and MGG was not related to MHL and that said Article envisaged a party to an instrument seeking cancellation thereof on facts entitling the party to have the instrument canceled. As per the learned Single Judge, Article 113 of the Limitation Act, 1963 was attracted and limitation would commence when the right to sue accrues. As per the learned Single Judge, right to sue accrued when MHL learnt that with respect to the shares in question, Ruias were claiming a title, which date would be 4.10.2002 when MHL was impleaded as a Defendant in Suit II, and perhaps earlier when on 11.4.2002 MHL filed Chamber Summons No. 455/2002 seeking impleadment in Suit II filed by Ruias giving reason to be impleaded that any decree obtained by Ruias would impact its proprietary right in the shares in question.

44. Thus, at base, the question to be decided is: When did the right to sue accrue to MHL?

45. The learned Single Judge has noted the decision dated 19.4.2016 passed by the Supreme Court, but in our opinion has not culled out the relevant points highlighted by the Supreme Court in the said decision, which would have a definite bearing on the determination of the date when right to sue accrued to MHL.

46. The Supreme Court noted that Suit filed by GGL against MGG (Suit I) had already been withdrawn and Suit II and Suit III filed by Ruias were pending. The Supreme Court noted that the substance of Suit II was that Ruias did not want MGG to transfer any share of BCL acquired by MGG pursuant to Agreement II in favour of GGL and post amendment on 4.10.2002, in favour of MHL as well. The relief prayed for by Ruias was on the plea that such transfer would violate clause 6.1 of Agreement II. Suit III filed by Ruias was also principally on the same pleas but with a slant by questioning the legality of Agreement II itself. Notwithstanding Suit III being filed, Ruias amended Suit II. Whether or not Suit II and Suit III were tenable on principles such as joinder of causes of action, the Supreme Court held that in view of the settlement agreement dated 5.12.2002, Ruias had lost the right to prosecute the two Suits and that Law recognized that if during pendency of a suit a party lost the cause of action or the right to sue, such suit could be dismissed. On this reasoning, the Supreme Court dismissed Suit II and Suit III instituted by Ruias holding that continuation thereof by Ruias was an abuse of the process of the Law. The Supreme Court categorically held that the consequences of the settlement dated 5.12.2002 gave birth to Ruias claim for title in shares of BOCL in the name of GGL; because the settlement so envisaged. The Supreme Court held that existence of title in MGG in 75,001 shares of BOCL could not be disputed either by Ruias or MHL because both were claiming a title through MGG. Ruias claimed title under the Settlement Agreement dated 5.12.2002 and MHL on the strength of being a subsidiary company of GGL and in terms of the Settlement Agreement between MGG and GGL. Therefore, in paragraph 38 of its opinion, the Supreme Court categorically held: 'In such a case, because of MGG’s purported transfer of the title in the 75001 shares to RUIAS under the settlement dated 5.12.2002, RUIAS should normally be entitled to have their names entered into the records of BOCL as holders of the said shares by following appropriate procedure. If either GGL or MHL is objecting to the right of MGG to effect the said transfer in favour of RUIAS, they must establish a superior title (to MGG) in the said shares. It goes without saying that it can be done only in some legal action initiated by either GGL or MHL or both jointly. But they cannot seek a declaration of their title in the SUITS-II and III filed by the RUIAS. In a bid to establish their title MHL filed SUIT-IV. The right of MHL, if any, will have to be decided in the said Suit. Until the said suit is decided, we do not see any ground in law on which either GGL or MHL can object to the transfer of the shares in favour of RUIAS pursuant to the settlement dated 5.12.2002'.

47. The observations of the Supreme Court in paragraph 39 that what procedure should Ruias follow to effectuate the transfer of shares pursuant to the settlement dated 5.12.2002 was for Ruias to explore, is pertinent, and has been overlooked by the learned Single Judge. The said observations clearly bring out that as per the Supreme Court the dispute between the parties had to be resolved with reference to the Settlement Agreement dated 5.12.2002 and therefore, in our opinion, all prior events became irrelevant. In this context, the relevance of the date when MHL acquired knowledge of the exact terms of the Settlement Agreement dated 5.12.2002 assumes significance and not the mere fact that MHL learnt (as a matter of fact) about the existence of the said Agreement. Dismissing Suit II and III because the Supreme Court held that the same denuded of cause of action in view of the Settlement dated 5.12.2002, the Supreme Court noted Suit IV, and in respect of the dispute requiring adjudication in the suit, held that the issue concerning the Settlement dated 5.12.2002 has to be adjudicated in the said suit, which suit alone was held entitled to be prosecuted. This is the reason why, in paragraph 44 of its opinion, the Supreme Court held: 'However, in the absence of any legally established title as on today to the above mentioned shares in any party other than MGG, whether RUIAS would be entitled pursuant to the settlement dated 05.12.2002, to have their names entered into the registers of BOCL as holders of the said shares is a matter for RUIAS to explore. However, such an entitlement if any should be subject to the result of the SUIT-IV.'

48. We need not deal with the various authorities noted by the learned Single Judge, because the issue is not whether Article 59 or Article 113 of the Limitation Act, 1963 applies. The issue is as to when did the right to sue accrue to MHL, and in the light of the peculiar facts of the instant case, noting the past history of litigation inter se MGG and GGL on the one hand and MGG and Ruias on the other till MHL came on the scene, with reference to the decision and the reasons in support of the conclusion in the judgment dated 19.4.2016 passed by the Supreme Court which is reported as (2016) 11 SCC 484 Messer Holding Ltd. Vs. Shyam Madan Mohan Ruia & Ors. we hold that the right to sue accrued to MHL on 14.10.2005 when copy of the Settlement Agreement dated 5.12.2002 between MGG and Ruias was supplied to MHL. It not being in dispute that Suit could be filed within three years when the right to sue accrued, Suit No. 2410/2008 i.e. Suit IV being filed on 23.4.2008, we hold that the suit was filed within limitation and thus we allow the Appeal, setting aside the impugned judgment dated 16.3.2017 passed by the learned Single Judge holding that said Suit was barred by limitation in so far it related to prayers (q) to (u). We hold that the suit is within limitation qua said prayers as well. Since as per the impugned judgment the Suit was to continue qua prayer (v) to (z), we declare that the suit has to proceed with reference to all the prayers made.

49. Costs made easy.