IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
B. Siva Sankara Rao, J.
M/s. Convergys Corporation - Petitioner
Vs.
Mr. Sreenivasu Ruttala and 4 others - Respondents
Civil Revision Petition Nos. 5534 & 5602 of 2015
Decided On : 5-08-2016
Civil Law – Constitution of India, 1950 – Article 227 – Civil Procedure Code, 1908 – Orders VI & VII – Rules 1 and 2 – Endorsement of defendant Nos. 4 & 5 are only proforma parties impleaded, thereby no relief sought against defendant Nos. 4 & 5. suit filed by plaintiff against defendants supra is to pass a decree in favour of the plaintiff for Rs. 3,50,00,000/- towards damages, together with interest thereon @ 18% per annum from the date of suit till realization with costs and to grant such other just reliefs – Defendants having been served in the suit after the plaint was numbered and summons ordered by the trial Court-cum-Principal District Judge, Ranga Reddy District at L.B Nagar. The 2nd defendant filed two applications, amongst one is I.A under Order VII Rule 11-A CPC to reject plaint in so far as against the 2nd defendant with exemplary costs alleging there is no cause of action from reading of plaint, besides the suit claim is with ulterior motive and malafide intention to have wrongful gain and with false allegations in approaching the Court also with unclean hands to the prejudice of the 2nd defendant, in particular, to cause monitory loss if any and to tarnish the reputation. The other application I.A No. 3089 of 2014 is filed under Order I Rule 9 CPC to strike out or delete the name of the 2nd defendant from the array of the plaint supra in saying it is outcome of mis-joinder of 2nd defendant with no privity of contract between the petitioner and the 2nd defendant and the suit claim is of speculative effort to cause monitory loss and ill-reputation to 2nd defendant – Held, aim of the legislation is to do justice to all the parties. It referred the expression of Delhi High Court in U.K Mehra v. Union of India, observed that where a subsidiary is wholly owned by the principal company which has a pervasive control over it and the former acts as the hand and voice of the latter, the subsidiary would be nothing but an instrumentality of the principal company. It was observed ultimately referring to the expression of the Apex Court in New Horizons Limited v. Union of India, that nonetheless, the lifting of corporate veil or piercing the corporate veil is permissible if public interest requires – It also discussed on facts as to the holding company has any legal obligation under Industrial Law and Company Law to safeguard the interest of employees of the subsidiary company – Thus, it all depends upon the facts that it requires to be demonstrated as part of defence of defendants to decide and it is not a case for rejection of the plaint or to delete array of the 2nd defendant thereby. Accordingly, though the lower Court orders is not with such details, for this Court while sitting in revision against the order, there is nothing to interfere for the same otherwise sustain on its result conclusion – Petitions are dismissed. (Paras 11, 12 and 13)
B. SIVA SANKARA RAO, J.
M/s. Convergys Corporation with Head Quarters in U.S.A, represented by its Authorized Signatory is the petitioner in both the revision petitions impugning the common order passed by the trial Court in the respective applications in I.A Nos. 3089 of 2014 & 242 of 2015 in the pending suit O.S No. 1610 of 2013. In the suit, the revision petitioner is the 2nd defendant. The plaintiff was Mr. Sreenivasu Ruttala. The other defendants are Net Cracker Technology Solutions (India) Private Limited (previously known as Convergys Information Management (India) Private Limited represented by its Managing Director) as 1st defendant, Net Cracker Technology with its Global office at USA, represented by its President and CEO as 3rd defendant, Mr. Bhaskar Dutt Ranjan and Mr. Samit Banerjee as defendant Nos. 4 & 5 being the Director and Vice President of CA Technologies Private Limited and Amdocs Development Centre India Private Limited of Mumbai and Pune respectively.
2. In the suit, there was an endorsement of defendant Nos. 4 & 5 are only proforma parties impleaded, thereby no relief sought against defendant Nos. 4 & 5. The suit filed by the plaintiff against defendants supra is to pass a decree in favour of the plaintiff for Rs. 3,50,00,000/- towards damages, together with interest thereon @ 18% per annum from the date of suit till realization with costs and to grant such other just reliefs. The defendants having been served in the suit after the plaint was numbered and summons ordered by the trial Court-cum-Principal District Judge, Ranga Reddy District at L.B Nagar. The 2nd defendant filed two applications, amongst one is I.A No. 242 of 2015 under Order VII Rule 11-A CPC to reject the plaint in so far as against the 2nd defendant with exemplary costs alleging there is no cause of action from reading of the plaint, besides the suit claim is with ulterior motive and malafide intention to have wrongful gain and with false allegations in approaching the Court also with unclean hands to the prejudice of the 2nd defendant, in particular, to cause monitory loss if any and to tarnish the reputation. The other application I.A No. 3089 of 2014 is filed under Order I Rule 9 CPC to strike out or delete the name of the 2nd defendant from the array of the plaint supra in saying it is outcome of mis-joinder of the 2nd defendant with no privity of contract between the petitioner and the 2nd defendant and the suit claim is of speculative effort to cause monitory loss and ill-reputation to the 2nd defendant. The affidavit averments in both the petitions of the 2nd defendant through their HR head in India by name Mr. Amit Kumar, is selfsame in saying without prejudice to the right to file detailed written statement in the suit subject to outcome of the applications disputing the suit claim of the plaintiff against the defendants and in particular against the 2nd defendant, the claim is misleading, incorrect and erroneous against the 2nd defendant and with baseless allegations. Though erstwhile 2nd defendant and 1st defendant-Convergys Information Management India Private Limited has been acquired by 3rd defendant-Net Cracker Technology, a Subsidiary of NEC Japan from the 2nd defendant in the year 2012 by acquisition of all of information management business of the 2nd defendant including erstwhile 1st defendant company and as such, the assets and liabilities including all stocks of Convergys Information and Management India Private Limited stood transferred from 2nd defendant to 3rd defendant vide agreement dated 22.03.2012 It is also averred that the 2nd defendant Corporation was only a parent company of 1st defendant and plaintiff thereby never an employee of 2nd defendant Corporation and never associated with 2nd defendant and plaint averments also demonstrate no privity of the contract between plaintiff and 2nd defendant, but for with 1st defendant to plaintiff and 1st defendant was taken over by 3rd defendant and there are n
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