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2014 Supreme(SC) 974

SUPREME COURT OF INDIA
Ranjan Gogoi and Rohinton Fali Nariman, JJ.
Morgan Signatures Towers Pvt. Ltd. - Petitioner
Versus
M.P. Nagar and another - Respondents
Civil Appeal No. 10187 of 2014 [Arising out of Special Leave Petition (Civil) No. 8539 of 2012]
Decided On : 11.11.2014.

Advocate Appeared:
For the Petitioner:M.K. Sreegesh, A. Venayagam Balan and V.S. Lakshmi, Advocates.
For the Respondent:Monika Gusain, Deepak Prakash, Yogamaya M.G. and Jogy Scaria, Advocates.

Headnote:

Code of Civil Procedure, 1908 - Order VII rule 11 - Companies Act, 1956 - Section 446 - Company in-liquidation - Official Liquidator - Sale deed - Suits stayed on winding up order - Suit proceeds on footing that predecessor Company of plaintiff, namely, M/s Faridabad Instruments Pvt. Ltd - Had purchased a certain property vide sale deed from Official Liquidator for and on behalf of a Company in winding-up which is this very Company i.e. M/s Jhalani Tools (India) Ltd - Property with which suit was concerned is part of Unit No. III Plot No. 1 and 2 situated had also purchased another adjacent property vide separate sale deed - Reason for setting out this transaction in Para 3 of plaint is only to show plaintiffs title to said properties. cause of action in suit is from Para 4 onwards which say that defendant No. 1, who has no concern with said property, is bent upon trespassing into said property to dig foundation of said area - Held, Company Court would only be required, once a winding-up order is passed against a Company in suits or other legal proceedings which are "against Company". We agree with learned counsel for petitioner that Civil Suit is not a suit "against Company" inasmuch as Company in-liquidation is neither a party to suit nor is any relief being claimed against said Company - On this short ground alone, we set aside orders and impugned judgment and allow this appeal - Consequently, suit will be restored to file and will be disposed of on merits - Appeal is allowed.

ORDER :

1. Leave granted.

2. The present appeal concerns itself with a Company in-liquidation, namely, M/s Jhalani Tools (India) Ltd., which has been wound up by the Company Court by an order dated 18th March, 2003. The subject matter of the present proceedings is Civil Suit No. 143 of 2010 dated 21st May, 2010, filed by M/s Morgan Signatures Towers Pvt. Ltd. (appellant herein) against Shri M.P. Nagar as defendant No.1 and the Municipal Corporation, Faridabad as defendant No. 2. The suit proceeds on the footing that the predecessor Company of the plaintiff, namely, M/s Faridabad Instruments Pvt. Ltd. had purchased a certain property vide sale deed dated 1st June, 2007 from the Official Liquidator for and on behalf of a Company in winding-up which is this very Company i.e. M/s Jhalani Tools (India) Ltd. The property with which the suit was concerned is part of Unit No. III Plot No. 1 and 2 situated at Faridabad. M/s Faridabad Instruments Pvt. Ltd. had also purchased another adjacent property vide separate sale deed dated 1st June, 2007. The reason for setting out this transaction in Para 3 of the plaint is only to show the plaintiff's title to the said properties. The cause of action in the suit is from Para 4 onwards which say that the defendant No. 1, who has no concern with the said property, is bent upon trespassing into the said property to dig the foundation of the said area. According to the plaintiff, the defendant No. 1 wants to grab this valuable property and without getting the site plan sanctioned has started digging a foundation in the said land. Defendant No.2, the Municipal Corporation, is also arrayed as a party because, according to the plaintiff, it cannot permit defendant No.1 or any other person to do the aforesaid acts. Ultimately, in Para 10 of the plaint, it is stated :

"10. It is, therefore, prayed that a decree for permanent injunction may kindly be granted in favour of the plaintiff against the defendant No. 1, restraining the defendant No.1 his henchmen, representatives, associates and others from encroaching, trespassing or taking forcible possession and they may also be restrained from raising any construction on the open plot of the plaintiff company marked by letters E F G H measuring 12' x 36' which forms part and parcel of the bigger plot No.1 and 2, Unit-III marked by letters A B C D as shown in the site plan attached with the plaint situated in NIT, Faridabad Industrial Area and defendant No.2 may also be restrained not to allow the defendant No.1 or any other person to sub-divide the same and to change the purpose from industrial to commercial, residential, shop, office etc. If the defendant No.1 succeeds to raise any construction over the property in dispute marked by letters E F G H or any other portion of the property marked by letters A B C D during the pendency of the suit or proved to have been in possession over the suit property or any portion of the property marked by letters A B C D as shown in the site plan Annexure P-4, then a decree for Mandatory Injunction/possession may kindly be passed in favour of plaintiff against the defendants with cost of the suit Or any other relief, which this Hon'ble Court deems fit and proper may also be granted in favour of the plaintiff against the defendants."

3. In an application made under Order VII rule 11 of the Code of Civil Procedure, 1908 (for short "the CPC"), the present respondent No.1 applied to the Court to have the plaint rejected on the ground that it was not in conformity with Section 446 of the Companies Act, 1956 inasmuch as no prior leave had been taken from the Company Court to institute the said suit.

4. By an order dated 19th January, 2011 by the Civil Judge (Junior Division), Faridabad, the said learned judge allowed the application and dismissed the suit under Order VII rule 11 of the CPC saying that the Civil Court had no jurisdiction to proceed any further. In a revision filed against this order, by the impugned order dated 29th













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