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2026 Supreme(Bom) 476
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ARIF S. DOCTOR, J.
Multi Commodity Exchange of India Ltd. – Appellant
Versus
MPPL Enterprises Pvt. Ltd. and Others – Respondents
Notice of Motion Nos. 680, 682, 703, 718, 721, 728 of 2016, Commercial Suit No. 31 of 2015
Decided On : 05-02-2026
For the Appellants : Om Prakash Jha, Sumit Yadav
For the Respondents: Chaitanya Nikte, Esha Malik, Shubhankar Kulkarni, Prajit Sahane, Mohammed Junaid Qureshi, Rahul G. Talreja, Suraj Iyer, Gauri Joshi, Ganesh, Kunal Mehta, Farheen Mustafa, Jayesh Mistry, Rajiv Naik, Anup Jain, Farheen Mustafa, Jayesh Mistry, Vinay J. Bhanushali, Abhiraj Rao, Sanmit Vaze
Plaint rejectable under Order VII Rule 11 against directors lacking specific averments of role or liability; corporate separateness bars personal claims without piercing veil or particulars of fraud.
Headnote:(A) Code of Civil Procedure, 1908 - Order VII Rule 11, Order I Rule 10 read with Section 115 - Rejection of plaint - Plaint liable to be rejected against nominee directors where, on plain reading, no specific cause of action disclosed against them, merely described as nominee directors in cause title without any individualised averments attributing role, act, omission or wrongdoing, using only generic expression “the Defendants” throughout - Separate corporate personality - Civil claim against company does not ipso facto give rise to cause against its directors absent specific pleadings of personal benefit, piercing corporate veil or statutory liability - Mere directorship or board participation does not render director personally liable for company’s contractual obligations. (Paras 4-15, 18A-E)
(B) Pleadings - Order VI Rule 4 - Allegations of fraud, collusion, conspiracy require specific particulars; sweeping omnibus averments insufficient. (Paras 10, 18E)
(C) Order VII Rule 11 application - Court confined to plaint averments and annexed documents only; cannot consider affidavit in reply to cure defects. Plaint rejectable against some defendants while maintainable against others. (Paras 13, 14, 18F-G)
Facts of the case:
Corporate plaintiff sued two corporate defendants and their nominee directors alleging unauthorised engagement of defendants to advise on stake sale resulting in fees payment of approx. Rs.19.50 crores. Directors filed notices of motion for rejection of plaint contending no cause of action against them, no specific averments or contractual privity.
Findings of Court:
Notices of motion allowed; plaint rejected against defendant nos. 3 to 8.
Issues: Whether plaint discloses triable cause of action against nominee directors; whether generic averments suffice or specific role/wrongdoing must be pleaded.
Ratio Decidendi: On Order VII Rule 11 application, plaint read as whole must disclose cause against each defendant; generic references to directors inadequate against separate corporate entity principle; fraud allegations need particulars; external material impermissible.
Result: Notices of Motion allowed in terms of prayer (a); plaint rejected against defendant nos. 3 to 8.
| Table of Content |
|---|
| 1. motions for plaint rejection under order vii rule 11 cpc. (Para 1 , 2) |
| 2. no specific cause against directors; generic pleadings insufficient. (Para 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15) |
| 3. reply affidavit cannot justify impleadment lacking in plaint. (Para 16 , 17) |
| 4. directors not liable without piercing veil or specifics; plaint rejected. (Para 18) |
| 5. partial rejection of plaint against certain defendants allowed. (Para 19 , 20) |
JUDGMENT :
ARIF S. DOCTOR, J.
1. The captioned Notices of Motion have been filed by Defendant Nos. 3 to 8 for rejection of the Plaint under the provisions of Order VII Rule 11 and Order I Rule 10, read with Section 115 of the CIVIL PROCEDURE CODE , 1908 (“CPC”), on the basis that the Plaint fails to disclose any cause of action against each of the said Defendants.
2. Since the issue which arises for consideration in all the captioned Notices of Motion is identical, by consent of counsel, submissions were advanced in Notice of Motion No. 703 of 2016 and adopted by the Learned Counsel in all the other Notices of Motion.
3. Mr. Mehta, Learned Counsel appearing on behalf of the Applicant, i.e., Defendant No. 5 to the captioned Suit, at the outset submitted that the present Notice of Motion has been filed by Defendant No. 5 since, on a plain and meaningful reading of the Plaint, the same plainly failed to disclose any cause of action whatsoever against Defendant No. 5.
4. He then invited my attention to the cause title of the Plaint and pointed out that both Defendant Nos. 1 and 2 were corporate entities, Defendant Nos. 3 to 8 were described as directors of Defendant No. 2 and that Defendant No. 5 was merely described as a “Nominee Director”. Mr. Mehta submitted that Defendant No. 5 was nominated on the Board of Defendant No. 2 by Infrastructure Leasing & Financial Services Limited (“IL&FS”) and had resigned from IL&FS in or about February 2015, much prior to the filing of the Suit.
5. Mr. Mehta then submitted that, apart from the bare description of Defendant No. 5 as a “nominee director” in the cause title of the Plaint, there was not a single averment anywhere in the Plaint disclosing any cause of action against Defendant No. 5 or explaining the basis for his impleadment. He pointed out that all allegations in the Plaint were directed solely against Defendant Nos. 1 and 2, and that the Plaint was completely silent as to any role, involvement, or participation of Defendant No. 5 in the alleged transaction or the alleged wrongdoing.
6. Mr. Mehta then took me through the Plaint and pointed out that paragraph 4 merely sets out the corporate relationship between Defendant Nos 1 and 2 and IL&FS. Paragraphs 5(D) to 5(I) of the Plaint set out the Plaintiff’s grievance, which, at its highest, is that the erstwhile Board of the Plaintiff engaged Defendant Nos. 1 and 2 to advise on the sale of the Plaintiff’s stake in MCX-SX, that such engagement was allegedly unauthorised, and that it resulted in the payment of fees aggregating to approximately Rs.19.50 crores. He reiterated that even within these averments, there is not a single allegation attributing any act, role, or wrongdoing to Defendant No. 5.
7. He submitted that the letters dated 10th August 2009 relied upon by the Plaintiff clearly demonstrate that contractual privity existed only between the Plaintiff and Defendant Nos. 1 and 2, both of whom are corporate entities, and that Defendant No. 5 was not a signatory to these letters.
8. Mr. Mehta further submitted that the emails relied upon in paragraph 5(E) of the Plaint also do not support the allegation of a “predetermined understanding”, and, in any event, the said Defendants are neither referred to nor a party to any of those emails. Similarly, the Tripartite Share Purchase Agreement referred to in paragraph 5(F) was entered into between the Plaintiff, MCX-SX, and IL&FS, and the said Defendants are not party to that agreement.
9. He then reiterated that the gravamen of the Pla
