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2000(8) Supreme 210
SUPREME COURT OF INDIA
(From Delhi High Court)
K.T. Thomas & R.P. Sethi, JJ.
Canara Bank & Ors. -Appellants
versus
National Thermal Power Corporation & Anr. -Respondents
Civil Appeal Nos. 7103 and 7104 of 2000
(Arising out of SLP (C) No. 14623 and 14660 of 1999)
Decided on 5-12-2000
Counsel for the Parties :
For the Appearing Parties : R.N. Trivedi, Additional Solicitor General, Gopal Subramaniam, and Dr. A.M. Singhvi, Sr. Advocates, N. Menon, Jay Savla, Ms. Sunita Dutt, Rakesh K. Sharma, Ciccu Mukhopadhaya, Manish Kumar, V. Krishnamurthy, Pramod Dayal, Advocates.
What the Court has directed in ONGC s case is that frivolous litigation between Government Departments and Public Sector Undertakings of the Union of India should not be dragged in the courts and be amicably resolved by the Committee. The judgment is intended to prevent avoidable litigation between the Government Departments and the Undertakings of the Union of India. In the present litigation there does not appear to be a genuine dispute between the Government of India undertakings. In this case is one of the public sector undertaking is shown to be acting not as an undertaking but as Trustee of a Trust. The Board was, therefore, justified in holding "that the real litigation in this case, therefore, is between Mutual Fund and NTPC" and not between the two undertakings. The meaning of word "dispute" is, a controversy having both positive and negative aspects. It postulates the assertion of a claim by one party and its denial of the other . In the instant case the claim preferred on behalf of the CBMF was not denied by the Corporation but in turn a counter claim with respect to the liability of a subsidiary of the Bank was raised. The dispute raised is without laying any basis or placing on record any evidence in support thereof. Imaginative disputes raised only to defeat the undisputed claim of the Trustee could not be made basis to deprive the Trustees and ultimately the public at large, of the value of the bonds which had, admittedly, been received by the Corporation with unambiguous undertaking to repay back the same. (Para 10)
A perusal of the bonds, purchased by the appellants, would indicate that such bonds were termed and styled as "Instru ment of Bond in the nature of promissory bond". The Corporation had agreed "to pay on demand to the above named bond-holder or order the sum of .....". In other words the bonds were transferable and respondents undertaking, under a contractual and statutory obligation, to pay the value thereof to the transferee. Such a transferee could not be denied the payment of the value of the bonds on the ground of the liability of the transferor or any of its subsidiary. The perusal of the bond incorporating the condition of payment unambiguously shows that no dispute can be raised by the Corporation for payment of the amount on demand to its holder or order. The claim of the Corporation, if any, can be enforced separately against the subsidiary of the Canara Bank but cannot be made a ground to resist the claim of the appellants. We are of the opinion that the High Court was not right in referring the alleged disputes to the High Powered Committee with the aid of judgment in ONGC s case. It was under an obligation to give a finding with regard to the directions given by the Board to pay the redemption amount to the appellants. The Trustees of the Trust constituted by the Canara Bank as Settlor for the benefit of numerous units holders cannot be termed and styled as Government Company or Public Sector Undertaking. The dispute raised by the respondents with the appellant was imaginary and even prima facie not real. We are further of the opinion that the Board in its order had dealt with all aspects of the matter and rightly concluded that ONGC s judgment was not applicable in the facts and circumstances of the present case. (Para 11)
JUDGMENT
Sethi, J.-Leave granted.
2. As the question of law in both the appeals is common and the facts similar, the appeals are being disposed of by this common judgment.
3. The appellants are aggrieved of the impugned judgment passed by the High Court in Company Appeals by which the orders passed by the Company Law Board have been set aside and disputes allegedly existing between the parties referred to the High powered Committee in terms of the judgment of this Court in Oil & Natural Gas Commission & Anr. v. Collector of Central Excise1. It is contended that the dictum of this Court in ONGC s case was not applicable to the facts of the cases under appeals, as there did not exist a genuine dispute between the parties which could be referred to the High Powered Committee.
4. The facts giving rise to the filing of the present appeals, as extracted from the Appeal arising out of SLP (C) No. 14660, are as under.
The appellants filed Company Petition Nos. 11/111/-95CLB & 12/111/95-CLB under Section 111(4), (5) & (7) of the Companies Act before the Company Law Board, Northern Region Bench, New Delhi, stating therein that they were Trustees of Canbank Mutual Fund (hereafter referred to as "CBMF"), a Trust constituted under the Indian Trusts Act, 1882. The main object of the Trust is to conduct business of mutual fund by permitting savings of small and individual investors through various schemes, inviting subscriptions from the prospective investors and channelising the funds into the capital market for attractive returns. From September, 1993 CBMF was being managed by an Asset Managing Company, the Appellant No. 6. Appellant No.1 is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1971. The Bank as "Settlor" by an Adventure of Trust dated 17th December, 1987 had constituted the Trust, CBMF, the Settlor being its Principal Trustee. The National Thermal Power Corporation, respondent No.1 (hereinafter referred to as "the corporation") is a Government of India Enterprise and respondent No. 2 a Banking Company which went into liquidation. On 5.8.1988 the CBMF purchased 14% NTPC Bonds (of the corporation) having face value (FV) of Rs.2.17 crores along with several other bonds through the Broker M/s. Batliwala & Karani in respect of which Cheque No.80961 dated 5.8.1988 was issued in favour of Bank of Karad, second respondent-bank who in turn issued a BR undertaking to deliver the securities. In 1989 the BR was liquidated by delivery of bonds. Out of the aforesaid bonds the respondent-company vide its letter dated 11.8.1992 lodged the bonds valuing Rs.4 crores for registration of transfer in the name of Canara Bank, Trustee of the CBMF. On 25th September, 1992, CBMF lodged with the corporation for registration of the bonds of FV Rs.50.05 lacs in the name of Canara Bank, Trustee CBMF. On the same date the CBMF lodged bonds of FV Rs. 50 lacs with the Corporation with a request to register the same in the name of Canara Bank, Trustee CBMF. Again on 11.2.1993 CBMF lodged the bonds of FV Rs.113 lacs with the respondent corporation for registration in the name of Canara Bank, Trustee CBMF after removing the objections. The Corporation wanted the CBMF to produce no objection certificate from the Official Liquidator of the Bank of Karad for the purpose of registering the transfer of the bonds for which letter dated 17.5.1993 of the Bank of Karad was furnished with all documentary proof of the purchase of bonds of FV of Rs. 2.17 crores from the Bank of Karad on 5.8.1988. Request was made to the Liquidator, appointed in the winding up proceedings against the said Bank, to confirm to respondent Corporation that the CBMF s purchase was bonafide and the transaction had taken place much prior to the relevant period prescribed under Section 531 of the Companies Act. On 17.5.1993 a letter was sent to the respondent-corporation setting out the particulars of the purchase of the bonds and re-stating that
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