Friday, 14 April 2017

What will be effect of withdrawal of suit on interlocutory orders passed during pendency of suit?

 SUIT-I is admittedly withdrawn, therefore, any order passed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.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (CIVIL) NOS. 33429-33434 OF 2010
Messer Holdings Ltd. 
V
Shyam Madanmohan Ruia & Others 
Dated:April 19, 2016
Citation:(2016) 11 SCC 484


1. 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 called Goyal Gases Ltd.
(hereinafter referred to as “GGL”) on 12.5.1995. By virtue of the said
agreement, MGG purchased 30% of equity shares of GGL.
Subsequently, MGG increased its shareholding in GGL to 49%.
Clause 9 of the AGREEMENT-1 reads:
1Page 2
“ 9. NON-COMPETITION CLAUSE
GGL and all Goyal Group companies will cooperate in the Indian market with right to
first refusal basis/with MGG and will not for the duration of this cooperation 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.”
2. In a company known as BOMBAY OXYGEN CORPORATION
LIMITED (hereinafter referred to as the ‘BOCL’) majority shares were
collectively held by a group of persons known as RUIAS (we
understand that they belong to one family). On 23.6.1997, MGG
entered into another Share Purchase Agreement (hereinafter referred
to as AGREEMENT -II) with RUIAS. By the said agreement MGG
agreed (i) to purchase 45001 shares of BOCL from RUIAS, and (ii) also
to acquire another 30000 shares of BOCL from the open market which
would make MGG the majority shareholder of BOCL (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
2Page 3
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.”
3. Pursuant to the AGREEMENT-II, MGG made a public
announcement on 27.6.1997 disclosing its intention to acquire 30000
shares of BOCL from public as required under Chapter-III of the
Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997 (hereinafter referred to as
the ‘REGULATIONS 1997) framed in exercise of the powers conferred
by Section 30 of the Securities and Exchange Board of India Act, 1992
(hereinafter referred to as the “SEBI Act”)
4. GGL protested (in writing) against the attempt of MGG to
independently acquire shares of BOCL saying that it would amount to
breach of Clause 9 of the AGREEMENT-I. Some correspondence took
place between both the Companies in this regard. Eventually, both
the Companies entered into AGREEMENT-III on 8.11.1997
whereunder it was agreed that out of 75001 shares of BOCL 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.
3Page 4
5. RUIAS came to know of the AGREEMENT-III. By their letter
dated 5.5.1998 they informed MGG that they were not agreeable for
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. Thereafter,
MGG proceeded to acquire 75001 shares of the BOCL on its own and
paid an amount of Rs.13.5 crores to the RUIAS towards the value of
45001 shares.
SUIT-I IN THE HIGH COURT OF DELHI by GGL etc.
6. On 26.8.1998, GGL filed a Civil Suit No.1810/98 (hereinafter
referred to as “SUIT-I”) in the High Court of Delhi against MGG for the
enforcement of Clause 9.1 of AGREEMENT-I and for other reliefs:
(a) Cancel the letter of offer dated 6.8.1998 made by the defendant for 20%
equity shares of Bombay Oxygen Corporation Ltd. and/or
(b) Cancel the share purchase agreement dated 23.6.1997 whereby the defendant
has sought to purchase 30% +1 equity shares of Bombay Oxygen Corporation
Ltd. and/or
(c) A decree of permanent injunction restraining the defendant from taking any
steps in pursuance of the letter of offer dated 6.8.1998 for 20% equity shares
of Bombay Oxygen Corporation Ltd. and the share purchase agreement dated
23.6.1997 for purchase of 30%+1 equity shares of Bombay Oxygen
Corporation Ltd. in violation of the non-competition clause of the agreement
dated 12.5.1995 and/or
(d) A decree of permanent injunction restraining the defendant from acquiring
any shares in Bombay Oxygen Corporation Ltd. on its own and without the
participation of plaintiff.
4Page 5
On 14.9.1998, GGL filed two applications seeking certain interim
orders. I.A. No.7248 of 1998 in the SUIT-I invoking Order 39 Rule
1&2 of the Code of Civil Procedure, 1908 (hereinafter referred to as
“CPC”) and OMP No. 205 of 1998 invoking Section 9 of the Arbitration
& Conciliation Act, 1996 (hereinafter referred to as “A&C Act”).
Interestingly the relief sought in both the applications is substantially
the same i.e., interim order restraining the MGG from acquiring the
shares of BOCL on its own. The learned trial Judge dismissed both
the applications by two separate orders dated 22.9.1998. GGL carried
the matter in intra court appeals.
7. By the appellate order dated 23.10.1998, a Division Bench of the
Delhi High Court restrained1
 MGG from acquiring the shares of the
BOCL.
8. Aggrieved by the same, MGG moved this Court in Civil Appeal
Nos. 728 and 729 of 1999. This Court by an interim order dated
18.12.1998 ordered as follows:-
“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.
1 For the aforesaid reasons, we allow both the appeals and restrain Messer from taking any steps to acquire shares of
BOCL in pursuance of Share Purchase Agreement dated 23rd June, 1997, till the decision of the arbitration
proceedings and the suit. In the facts and circumstances of the case parties are left to bear their own costs. [FAO
(OS) No.251 of 1998 and FAO (OS) No.250 of 1998]
5Page 6
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.”
9. By a final order dated 8.2.1999, the said appeals were disposed:-
“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. After considering the rival submissions, we
think it proper to pass the following order:
It will be open to Messer Griesheim Gmbh/the appellant to part with those shares and
keep them in custody of the concerned bank for the purpose of entering into such a
financial arrangement. It is, however, made clear that so far as the question of
registration and ownership of shares is concerned that will have to be decided by the
Arbitrators. It will be open to the parties to approach the Arbitrators for obtaining
interim relief in that behalf.
Since the erstwhile owners of the shares have been paid their dues, they have ceased
to be owners of those shares and the beneficial interest in them now vests in Messer
Griesheim Gmbh or in Messer Griecheim Gmbh and Goyal HG gases Limited jointly
if the Arbitrators so decide. We direct that all the disputes between the parties
including the right to represent on the board of Bombay Oxygen will now have to be
decided by the Arbitrators. If any necessity arises to approach this 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.”
10. The petitioner (hereinafter referred to as ‘MHL’) in SLP(C)
Nos.33429-33434 of 2010 on hand is a company 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 DM (currency of Federal Republic of Germany) divided into
6Page 7
10,000,000 shares. It has two Directors, one representing MGG and
the other Morgan Trade and Commerce. Interesting 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.
11. MGG and GGL entered into a settlement2
 of 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.”
2
 It is stated in the IAs No.17-18 of 2000 regarding the settlement as follows:-
Para 7. The original dispute between the appellant and the respondent No.1 was regarding the acquisition of
shares in Bombay Oxygen Corporation Ltd. and the control thereof. The appellant and the respondents have since
settled their dispute. Under the settlement, the parties have agreed that the 75001 shares (of Bombay Oxygen
Corporation Ltd.) purchased at a price of Rs.22.5 crores shall now be registered in the name of a new company Messer
Holdings Ltd., referred to herein below.
Para 8. Pursuant to the settlement the appellant and the respondent No.1 (through its subsidiary) have
incorporated a joint venture company outside India being Messer Holdings Ltd. In fact, this compromise was
contemplated by the parties during the hearing of the above civil appeals but could not be materialized before the
disposal of the civil appeals. It is in the name of Messer Holdings Ltd. that the parties propose to register the 75001
shares.
7Page 8
However, when the said I.As were taken up by this Court on 20th April,
2000, this Court ordered:
“Learned counsel for the applicant and respondent Nos.1 and 2 state that dispute
which was sought to be referred to the Arbitrator has been settled between them. In
view of this they want to move appropriate application to withdraw from the
arbitration proceedings. They seek time for the purpose. List the matter on
5.5.2000.”
The only inference we can draw is that the prayers in I.As 17 & 18 of
2000 were not pressed3
.
12. Interestingly, after seeking this Court’s permission 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:
3 The whole process is strange. GGL simultaneously pursued the remedies (Suit-I and an arbitration proceeding) for the
resolution of the dispute with MGG when the parties to the suit settled their dispute by mutual agreement, there is no
need to approach this Court by filing interlocutory applications in appeals which had already been disposed off. More
particularly, when those appeals arose out of interlocutory proceedings (i) in a pending suit, and (ii) a proceeding under
Section 9 of the A & C Act, 1996 which empowers the “civil court” to pass appropriate orders as an interim measure for
protecting the interests of parties to a dispute which the parties had agreed to get resolved by an arbitration. If really the
dispute between the parties is settled, nothing prevented the plaintiff (GGL) from either withdrawing the suit or praying
for a decree in terms of the settlement between the parties, or in the alternative, praying the arbitrators to pass an award
in terms of the settlement between the parties, because under the A&C Act, 1996 an award is as efficacious as a decree
of a civil court. But the parties i.e, MGG and GGL desired “to withdraw from arbitration proceedings”.
8Page 9
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.”
13. Pursuant to the consent award, sometime in the month of May
2000 MGG handed over the shares certificate of 75001 shares of
BOCL to MHL alongwith duly filled transfer forms4
 and a power of
attorney.
We are given to understand that the SUIT-I is eventually
withdrawn by GGL. It is necessary to mention here that by that time
RUIAS had already filed (on 28.4.1999) a suit inter alia against both
MGG and GGL in the High Court of Bombay.
SUIT- II IN THE HIGH COURT OF BOMBAY BY RUIAS ETC.
4 As required under the law as it was on that date
9Page 10
14. On 28.4.1999, RUIAS filed a Suit No.2499/1999 before Bombay
High Court (hereinafter referred to as SUIT-II) in substance seeking
enforcement of clause 6.1 of the AGREEMENT-II.
“(a)1(i) that it be declared that the negative covenant contained in Clause 6.1 of the
agreement dated 23rd June 1997 being Ex. ‘B’ hereto is binding on the Defendants;
(a)1(ii)(b) 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;”
In the said Suit, RUIAS filed an application (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, Bombay High Court
disposed of the said application recording the undertaking filed by
10Page 11
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” Bombay High Court:-
“The parties have agreed that for disposing of this motion in the following terms, no
reasons are necessary to be recorded.
1. Defendant No.1 stated that defendant No.1 is willing to and shall abide by
clause 6.1 of the agreement dated 23rd June 1997. Statement accepted. In view of the
statement made by defendant No.1, the following interim order is passed against
defendant No.1.
Interim Order in terms of prayer (a)(i).5
2. Defendant No.1 and 3 shall not act pursuant to implement or enforce any
award made by the arbitrators without first obtaining the leave of the court and the
court will consider the agreement between the plaintiffs and defendant No.1.
3. The aforesaid order is made without prejudice to the rights, claims and
contentions of the parties.
4. The Notice of Motion is accordingly disposed off. It is clarified that the
parties are at liberty to adopt appropriate proceedings to enforce their respective
rights.
5. Parties to not (note - sic) on a copy of this order duly authenticated by the
associate of the Court.”
15. By a letter dated 31st May 2000, RUIAS intimated MGG and
reiterated on 1st June 2000, that AGREEMENT-II was terminated.
Because according to RUIAS establishment of MHL and the transfer of
75001 shares of BOCL to MHL tantamounted to breach of clause 6.1
of AGREEMENT-II.
16. After obtaining the consent award on 21.9.2000, MGG filed an
application (Notice of Motion No.2933/2000) before the Bombay High
5
 Prayer (a) - That pending the hearing and final disposal of the suit defendant Nos.1, 3 and 4 be restrained by an ordr of
injunction of this Hon’ble Court from:
(i) committing breach of clause 6.1 of the agreement dated 23rd June, 1997 being Ex.”B” to the plaint.
11Page 12
Court in SUIT-II seeking leave of the Court to implement and enforce
the consent award.
SUIT- III IN THE HIGH COURT OF BOMBAY
17. On 5.2.2001, RUIAS filed second Suit bearing No.509 of 2001
(hereinafter referred to as “SUIT- III”) before the Bombay High Court
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.
18. In the said suit, RUIAS filed an application (Notice of Motion No.
392 of 2001) in substance seeking an injunction against MGG and
GGL along with MHL either from transferring the 75001 shares of
BOCL in favour of MHL or from exercising rights as beneficial owners
of the said shares. In the said suit, MHL filed an application (Notice of
Motion No.534 of 2002) on 21.2.2002 seeking appointment of an
administrator and receiver for the administration of the assets of
BOCL on the ground that RUIAS are causing substantial damage to
the assets of BOCL.
19. SUIT-II was amended from time to time on three occasions
pursuant to the orders of the Bombay High Court dated 22.02.2000,
04.10.2002 and 08.06.2011.
The prayer in SUIT-II after such Amendments;
“Rider-I(a)

(a) (i) For a 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 1st defendant Nos. 1, 3, 4 and 5 be ordered and decreed to
deliver/return to the respective plaintiffs the said 45,001 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 Ist 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 1977 being Ex. ‘B’ hereto is binding on the Defendants;

(a)1(ii)(b) that the Defendants by themselves their agents and servants be restrained
by a perpetual order and injunction of this Hon’ble Court from.
(i) committing breach of clause 6.1 of the Agreement dated 23rd June, 1977 being
Exh. ‘B’ hereto;
(ii) transferring or selling or alienating the legal and/or beneficial interest in the
shares of Defendant No. 2 including those mentioned in Ex. ‘A’ hereto without first
offering the same to the Plaintiffs in terms of Clause 6.1 of the Share Purchase
Agreement dated 23rd June 1997, being Exh. ‘B’ hereto.
(iii) obtaining any award, decree order from any forum or court in violation of
clause 6.1 of the Share Purchase Agreement dated 23rd June, 1997 being Ex. ‘B’
hereto.
(iv)making any claim before the Arbitrators or any court which if granted will
amount to a breach or violation of the provisions of Clause 6.1. of the said Share
Purchase Agreement dated 23rd June 1997, being Ex. ‘B’ hereto;
(v) procuring any breach of the provisions of clause 6.1 of the said share Purchase
Agreement dated 23rd June, 1977 being Ex. ‘B’ hereto;”
Rider-C
(b1)(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 1977 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.”
20. It appears that on 5.12.2002, RUIAS and MGG entered into a
settlement (evidenced by an agreement in writing) of the disputes
between them by allegedly rescinding the AGREEMENT-II. According
to MHL, the terms of settlement were not made known to either MHL
or GGL for a long time. The information regarding the agreement dated
5.12.2002 initially came to the knowledge of MHL (allegedly) from the
website of Security Exchange Commission of United States.
15Page 16
The relevant portion of the settlement reads as under:-
“6. In the circumstances, “MGG” and the “Ruias” have agreed to fully and finally
settle all their disputes and differences by rescinding the “Ruia Agreement” on the
terms and conditions set forth in this Agreement. However, “MGG” is not in a
position to return to the “Ruias” the share certificates and other relevant documents
for the 45,001 shares of “BOCL” (which is the subject matter of the “Ruia
Agreement”) as they are not in “MGG’s possession. “MGG” has no knowledge of
the current whereabouts of the said share certificates and other documents pertaining
to the 45,001 shares and is not in a position to secure return/delivery of the same.
7. As “MGG” is no longer interested in acquiring any shares in “BOCL”, as a
further part of the settlement, it is hereby agreed that “MGG” hereby
sell/reverts/transfers/divests in favour of the “Ruias” all its right, title and interest in
the remaining 30,000 shares in “BOCL” which “MGG” had acquired from the public,
but which has also not been registered in the name of “MGG” in the records of
“BOCL”. However, “MGG” has no knowledge of the current whereabouts of the
share certificates and other documents / pertaining to the 30,000 shares and is not in a
position to secure return/delivery of the same.
8. In consideration for the foregoing, “Ruias” agree to pay “MGG” a sum of US
$ 154,642 in respect of the 75,001 shares of “BOCL”, without any other or further
obligation whatsoever on the part of “MGG” to the “Ruias” except as provided in this
Agreement. The “Ruias” shall also not have any further obligation to “MGG” except
as provided in this Agreement.
 ****** ***** ****** ******
10. The parties agree that “MGG” do hereby fully and irrevocably revert/sell,
transfer and assign all its beneficial right, title and interest in or in relation to the said
75001 shares in favour of “Ruias” and shall, at the cost and expense of “Ruias”,
execute and continue to execute such instruments, documents, authorities etc., as may
be necessary or expedient in connection therewith and shall refrain from doing
anything inconsistent with the foregoing or the rights reverted/assigned/transferred as
above on and from the date of execution hereof. To this end and purpose, an
irrevocable Power of Attorney duly executed as per draft enclosed herewith as
Annexure I shall be put in escrow with Ms. Lira Goswami, Advocate. Ms. Lira
Goswami shall hand over the Power of Attorney to the “Ruias” in accordance with
written escrow instructions agreed to by “Ruias” and MGG”.
11(a) The parties confirm and acknowledge that as the foregoing 45,001 shares of
“BOCL” have not been registered in the name of “MGG” in the records of “BOCL”,
the said shares continue to be registered in the names of the “Ruias”. Consequently,
the rescission of the “Ruia Agreement” does not involve any transfer from “MGG” to
the “Ruias” in the books of “BOCL” as the “Ruias” continue to be the registered
shareholders. Nevertheless, if any permission, approval or notification is required
under Indian law for implementing this Agreement, including without limitation, the
permission of the “RBI” for making the payment of US $ 154,642, the “Ruias” shall
be solely responsible and liable for obtaining all such necessary approvals or
permissions or for making the necessary filings/notifications, at the sole cost and
expense of the “Ruias”.
16Page 17
(b) Similarly, the parties confirm and acknowledge that the foregoing
30,000 shares of “BOCL” have also not been registered in the name of “MGG” and
continue to be in the name of the Indian public shareholders. Consequently, “Ruias”
will be solely responsible for doing all acts, deeds and things that may be necessary
for effecting the transfer of these shares from the currently registered shareholders to
the “Ruias” at the sole cost and expense of the “Ruias”.
****** ****** ****** ******
15. On execution of this Agreement, “Ruias” agree:
(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 & Ors. Vs. Messer
Griesheim GmbH & Ors.
(ii) Civil Suit No. 509 of 2001 titled Shyam Madan Mohan Ruia & Ors. Vs.
Messer Griesheim GmbH & Ors.”
In spite of the said agreement, (the existence of which is not in dispute
now). RUIAS not only continued with SUITS II and III, but also
amended the Suit-II on 08.06.2011.
21. 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 admeasuring 15317.77
sq. mtrs., 3513.70 sq. mtrs. and 47762.20 sq. mtrs. of land situated
at Kurla Taluk of Maharashtra allegedly owned by BOCL.
22. The next day BOCL informed the Bombay Stock Exchange about
the above-mentioned development agreement. On 26.3.2008, HDIL
mortgaged the above-mentioned property in favour of the Union Bank
of India for securing a term loan of 230 crores.
17Page 18
23. On 8.4.2008 MHL filed a Notice of Motion No. 1418 of 2008 in
Appeal No. 855 of 20036
 seeking an injunction against the parties to
the above-mentioned Development Agreement along with various other
reliefs (the details of which are not necessary for the present).
24. By an order dated 30th April, 2008, a Division Bench of the
Bombay High Court while adjourning the hearing of the said Notice of
Motion recorded the undertakings on behalf of the HDIL that it will not
claim any equity whatsoever in the event of MHL’s success in the
above-mentioned Notice of Motion and demolish the construction, if
any, made during the pendency of the proceeding by the HDIL. It was
also stated by them that the property which was the subject matter of
the Development Agreement had already been mortgaged in favour of
the Union Bank of India, however, undertook not to create any 3rd
party rights in the said property.
25. Aggrieved by the said order, MHL filed SLP No. 12734 of 2008 in
this Court on 8.5.2008. By an Order dated 16.5.2008, this Court,
while issuing notice on the said SLP granted an order of status quo
regarding the nature, title, etc. of the property in dispute. By an
Order dated 23.6.2008, the said SLP was disposed of directing that the
status quo order granted earlier on 16.5.2008 shall continue during
6 Appeal No. 855 of 2003 on the file of the Bombay High Court was filed by MHL aggrieved by an order dismissing
N.M. no .534 of 2002 in Suit-II filed by MHL seeking the appointment of an administrator to BOCL and Receiver for
the assets of the said Company.
18Page 19
the pendency of the Notice of Motions and appeals before the High
Court of Bombay.
SUIT-IV
26. On 23.4.2008, MHL filed Suit No.2410 of 2008 (hereinafter SUITIV)
against BOCL, RUIAS, HDIL etc. seeking various reliefs including a
declaration of ownership of 75001 shares of BOCL etc.
 “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 that 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;
19Page 20
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;”
We understand that none of the defendants have filed their
written statements and no issues are framed so far.
27. It is in the background of the above-mentioned litigation these
SLPs are to be examined.
SLP(C) Nos. 33429-33434 of 2010 is filed by MHL with prayers:
“a) Grant special leave to appeal under Article 136 of the Constitution of India
against the impugned Final Judgment and Order dated 1.9.2010 passed by the
Hon’ble High Court of Judicature at Bombay in Appeal No. 855 of 2003 in
Notice of Motion No. 534 of 2002 in Suit No. 509 of 2001 with Notice of
Motion No. 1308 of 2005, Notice of Motion No. 3956 of 2005, Notice of
Motion No .4118 of 2007, Notice of Motion No. 1973 of 2008, Notice of
Motion No. 1418 of 2008; and
a) Pass such other order or orders as this Hon’ble Court may deem just and proper in
the facts and circumstances of the case.”
SLP(C) Nos.23088-23090 of 2012 is filed by GGL with prayers:
20Page 21
“a) grant Special Leave to Appeal against the impugned order dated 01.09.2010
passed by the Hon’ble High Court of Bombay in Appeal Nos. 840 of 2003,
841 of 2003 and 857 of 2003, whereby the Hon’ble High Court was pleased to
dismiss the appeals filed by the Petitioner Company and uphold the order
dated 26.03.2003 passed by the Ld. Single Judge in Notice of Motion Nos.
3230 of 2000, 1231 of 2003 in Suit No. 2499 of 1999 and 392 of 2001 in Suit
No. 509 of 2001; and
b) pass such other and further orders as this Hon’ble Court may deem just and proper
in the facts and circumstances of the present case.”
Both the sets of SLPs are filed aggrieved by the common order of
a Division Bench of Bombay High Court dated 01.09.2010 in Civil
Appeals No. 855/2003, 840/2003, 841/2003 and 857/2003.
28. Civil Appeal 855/2003 was filed by MHL and the other three
appeals were filed by GGL. All the four appeals alongwith the various
Notice of Motions were dismissed with costs7
.
29. The subject matter of appeal No.855/203 is the order of the
Single Judge in Notice of Motion 534/2002 in SUIT-III. In the said
Appeal, five Notice of Motions were filed. They are 1308/2005,
3956/2005, 4118/2007, 1973/2008 and 1418/2008 seeking various
reliefs.
30. The subject matter of appeals no.840, 841 and 857 of 2003 is
order dated 26.03.2003 of the Single Judge in Notice of Motion
7
 All the four Appeals being Appeal Nos.855/2003, 840/2003, 841/2003 and Appeal No.857/2003 are dismissed with
costs.
Notice of Motion Nos. 1308/2005, 3956/2005, 4118/2007, 1973/2008, 1418/2008, 29/2006, 3112/2003,
3113/2002 and Notice of Motion No.3115/2003 in the respective Appeals are also disposed of with the above
observations.
21Page 22
Nos.3230/2000 & 1231/2003 in SUIT-II and Notice of Motion
No.392/2001 in Suit III. Both the abovementioned Suits were filed by
RUIAS.
31. SUIT-I is admittedly withdrawn, therefore, any order passed
during the pendency of the said suit by any court (including this
Court) in any proceeding arising out of the said suit automatically
lapses with the withdrawal of the suit. A 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.
32. SUITS II and III filed by the RUIAS are pending as of today. The
substance8
 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
8 RUIAS amended the said suits from time to time we find it a little difficult to understand the legality and the purpose
of the SUIT-II and its amendment subsequent to the filing of the SUIT-III We do not wish to examine those questions as
such enquiry would be purposeless at this stage in view of the subsequent developments.
22Page 23
under AGREEMENT-II9
. They also rely upon the events subsequent to
23.06.1997 - transactions between GGL and MGG etc. and seek
various prayers which are already noticed10. 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.
Apart from that the continuance of the SUIT-II 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 para 20 (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 & Ors. v.
Messer Griesheim GmbH & Ors.
(ii) Civil Suit No.509 of 2001 titled Shyam Madan Mohan Ruia & Ors. v. Messer
Griesheim GmbH & Ors.”
9
 Prayers (a) to (f) of Suit-III (See para 17 supra)
10 Prayer (g) to (k) of Suit III (See para 17 supra)
23Page 24
As a matter of fact, during the course of hearing of these SLPs also,
both RUIAS and MGG supported the case of each other in opposing
these SLPs filed by MHL and GGL.
33. As a consequence of the settlement dated 5.12.2002, RUIAS
claim title in 75001 shares of BOCL through MGG. We have already
noticed, the said 75001 shares were initially acquired by MGG from
RUIAS and the public under AGREEMENT-II. But, so far the names of
RUIAS are not entered in the registers of BOCL as the holders of the
share because of the various interim orders mentioned earlier.
34. However, GGL and MHL dispute the title of MGG to the said
75001 shares. According to GGL and MHL, by the settlement dated
5.12.2002 MGG had itself lost its title over the said shares as it had
already transferred its title in the said shares in favour of MHL
pursuant to the consent award dated 21.9.2000.
35. The existence of title in MGG in the said 75001 shares 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
24Page 25
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-IV11. 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.
36. 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
11 See prayer (q) in SUIT IV (extracted at para 26 supra)

not be registered in the name of MGG12 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.
37. Then we are left with the questions of continuance of SUITS II
and III against the other defendants (GGl & MHL etc.) and the prayers
regarding the physical custody of the shares13. 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 MGG14. RUIAS having entered into
settlement dated 5.12.2002 knowing fully well that MGG was not
going to give custody of the above-mentioned 75001 shares, purported
to purchase the said shares and agreed not to prosecute the SUITS-II
and III against MGG. In such a case, continuing the suits either
12 See para 7 and 11(a) of the settlement dated 5.12.2002 extracted at para 20 supra
13 There is no whisper in the plaints of either Suit II or III, of MGG having had obtained the
custody of the share certificates either from RUIAS (of 45001 shares) or from the public (of
30000 shares).
14 See paras 6 and 7 of the settlement dated 5.12.2002 extracted at para 20 supra.
26Page 27
against GGL or MHL or its agents etc. only for the custody of the
shares, in our opinion, is without any cause of action on the part of
the RUIAS. The prayers in SUIT-II and III in this regard are:
(ii) that the 1st defendant Nos. 1, 3, 4 and 5 be ordered and decreed to deliver/return
to the respective plaintiffs the said 45,001 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
i.e. 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.
The continuance of the SUITS-II and III, in our opinion, is,
therefore, wholly without any cause of action and an abuse of the
judicial process.15 They are, therefore, required to be dismissed and
15 See K.K. Modi v. K.N. Modi & Others, (1998) 3 SCC 573
Para 42- “Under Order 6 Rule 16, the court may, at any stage of the proceeding, order to be struck out, inter
alia, any matter in any pleading which is otherwise an abuse of the process of the court. Mulla in his treatise on the Code
of Civil Procedure, (15th Edn., Vol. II, p. 1179, note 7) has stated that power under clause (c) of Order 6 Rule 16 of the
Code is confined to cases where the abuse of the process of the court is manifest from the pleadings; and that this power
is unlike the power under Section 151 whereunder courts have inherent power to strike out pleadings or to stay or
dismiss proceedings which are an abuse of their process. In the present case the High Court has held the suit to be an
abuse of the process of the court on the basis of what is stated in the plaint.”
Para 43- “The Supreme Court Practice 1995 published by Sweet & Maxwell in paragraphs 18/19/33 (p. 344)
explains the phrase “abuse of the process of the court” thus:
27Page 28
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.
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.
38. 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
“This term connotes that the process of the court must be used bona fide and properly and must not be abused.
The court will prevent improper use of its machinery and will in a proper case, summarily prevent its machinery from
being used as a means of vexation and oppression in the process of litigation. … The categories of conduct rendering a
claim frivolous, vexatious or an abuse of process are not closed but depend on all the relevant circumstances. And for
this purpose considerations of public policy and the interests of justice may be very material.” ”
Para 44- “One of the examples cited as an abuse of the process of the court is relitigation. It is an abuse of the
process of the court and contrary to justice and public policy for a party to relitigate the same issue which has already
been tried and decided earlier against him. The reagitation may or may not be barred as res judicata. But if the same issue
is sought to be reagitated, it also amounts to an abuse of the process of the court. A proceeding being filed for a collateral
purpose, or a spurious claim being made in litigation may also in a given set of facts amount to an abuse of the process of
the court. Frivolous or vexatious proceedings may also amount to an abuse of the process of the court especially where
the proceedings are absolutely groundless. The court then has the power to stop such proceedings summarily and prevent
the time of the public and the court from being wasted. Undoubtedly, it is a matter of the court's discretion whether such
proceedings should be stopped or not; and this discretion has to be exercised with circumspection. It is a jurisdiction
which should be sparingly exercised, and exercised only in special cases. The court should also be satisfied that there is
no chance of the suit succeeding.”
28Page 29
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.
39. However, in the absence of any legally established title as on today
to the abovementioned shares in any party other than MGG16, whether
RUIAS would be entitled pursuant to the settlement dated 05.12.2002
to have their names entered into the registers of the BOCL as holders
16 Even MGG’s claim was that they had only a beneficial interest in the said shares, as the
shares were never registered in the name of MGG.
29Page 30
of the said shares is a matter for RUIAS to explore17. However, such
an entitlement if any should be subject to the result of the SUIT-IV.
40. We make it clear that we are not deciding by this order, the
existence or otherwise of any right or its enforceability in the 75001
shares of BOCL in favour of either MHL or GGL. It is open to them to
establish their right in SUIT-IV. The defendants in the SUIT-IV are at
liberty to raise every defence available in law and fact to them.
41. A great deal of effort was made both by RUIAS and MGG to
convince the court that in view of the protracted litigation between the
parties this court should examine all the questions of rights, title and
interest in these shares between the various parties as if this were the
court of first instance trying these various suits.
42. The examination of various questions raised by the petitioners in
these SLPs, in our opinion, is wholly uncalled for in the
abovementioned factual background.
43. The net effect of all the litigation is this. For the last 18 years,
the litigation is going on. Considerable judicial time of this country is
spent on this litigation. The conduct of none of the parties to this
litigation is wholesome. The instant SLPs arise out of various
17 There is no prayer in the Suits II and III seeking the declaration of title of RUIAS based on the settlement dated
05.12.2002 - for that matter, there is no whisper about the said settlement!
30Page 31
interlocutory proceedings. Arguments were advanced on either side
for a period of about 18 working days as if this Court were a Court of
Original Jurisdiction trying the various above-mentioned suits. The
fact remains that in none of the suits even issues have been framed so
far. The learned counsel appearing for the parties very vehemently
urged that there should be a finality to the litigation and therefore this
Court should examine every question of fact and law thrown up by the
enormous litigation. We believe that it is only the parties who are to
be blamed for the state of affairs. This case, in our view, is a classic
example of the abuse of the judicial process by unscrupulous litigants
with money power, all in the name of legal rights by resorting to halftruths,
misleading representations and suppression of facts. Each and
every party is guilty of one or the other of the above-mentioned
misconducts. It can be demonstrated (by a more elaborate
explanation but we believe the facts narrated so far would be sufficient
to indicate) but we do not wish to waste any more time in these
matters.
44. This case should also serve as proof of the abuse of the
discretionary Jurisdiction of this Court under Article 136 by the rich
and powerful in the name of a ‘fight for justice’ at each and every
interlocutory step of a suit. Enormous amount of judicial time of this
31Page 32
Court and two High Courts was spent on this litigation. Most of it is
avoidable and could have been well spent on more deserving cases.
This Court in Ramrameshwari Devi & Others v. Nirmala Devi
& Others, (2011) 8 SCC 249 observed at para 54;
“54. While imposing costs we have to take into consideration pragmatic realities and
be realistic as to what the defendants or the respondents had to actually incur in
contesting the litigation before different courts. We have to also broadly take into
consideration the prevalent fee structure of the lawyers and other miscellaneous
expenses which have to be incurred towards drafting and filing of the counteraffidavit,
miscellaneous charges towards typing, photocopying, court fee, etc.”
45. We therefore, deem it appropriate to impose exemplary costs
quantified at Rs.25,00,000.00 (Rupees Twenty Five Lakhs only) to be
paid by each of the three parties i.e. GGL, MGG and RUIAS. The said
amount is to be paid to National Legal Services Authority as
compensation for the loss of judicial time of this country and the same
may be utilized by the National Legal Services Authority to fund poor
litigants to pursue their claims before this Court in deserving cases.
….………….……………….J.
 (J. Chelameswar)
…….……….……………….J.
 (Abhay Manohar Sapre)
New Delhi;
April 19, 2016

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