IN THE HIGH COURT OF DELHI
JAYANT NATH, J.
Infonox Software Pvt. Ltd. and Ors. - Petitioners
Versus
Raj Kumar Dubey and An. - Respondents
C.R.P. 5 of 2017 and CM Nos. 1087-89 of 2017
Decided On : 11-01-2017
Order 7, Rule 11 CPC - Suit Maintainability - Order 23, Rule 1 CPC - Declaration, Injunction, and Damages - Companies Act, 1956 - Sections 115 CPC
Fact of the Case:
The respondent filed a suit seeking declaration, injunction, and damages against the petitioner company and its directors. The respondent had previously withdrawn a similar suit with liberty to take recourse to other remedies.
Finding of the Court:
The court found that the subsequent suit filed by the respondent was not based on the same subject matter as the first suit, and therefore, the provisions of Order 23, Rule 1 (4) CPC did not apply. The court upheld the trial court's dismissal of the petitioner's application under Order 7, Rule 10 and 11 CPC.
Issues: The main issue was whether the subsequent suit was maintainable after the withdrawal of the first suit with liberty to take recourse to other remedies.
Ratio Decidendi: The court held that the subject matter of the two suits filed by the respondent were different and Order 23, Rule 1 (4) CPC would not be applicable to the facts of the case.
Final Decision: The petition was dismissed, and all pending applications were also dismissed.
Jayant Nath, J.
1. The present revision petition is filed under Section 115 CPC seeking to challenge the order dated 24.11.2016 passed by the Trial Court dismissing the application of the petitioners under Order 7, Rule 10 and 11 CPC for dismissal of the suit.
2. Respondent No.1 has filed the present suit for declaration, permanent and perpetual injunction and damages. Petitioner No. 1-Company was incorporated on 23.05.2000 under the Companies Act, 1956. The respondents were the first directors of the Company who were said to have the entire share capital at the time of incorporation. It is stated that on 16.10.2009 respondent No.1 received a notice convening a meeting of the Board of Directors of petitioner No.1 which was proposed to be held on 18.10.2009 at Arizona, USA. As per the Resolution of the Board of Directors which was forwarded to respondent No.1, respondent No.1/plaintiff was sought to be ousted from the Board of Directors. Hence respondent No. 1 filed a suit seeking the following reliefs:-
"A. Pass a decree of declaration declaring that the resolution passed in the purported meeting of the Board of Directors of the Defendant No.1 Company on 18.10.2009 are illegal, null, void and non-est in the eyes of law;
B. Pass a decree of perpetual injunction restraining the defendants from giving effect to the resolution passed in the Board Meeting dated 18.10.2009;
C. Pass a decree of mandatory injunction restraining the defendants from holding the Extra Ordinary General meeting proposed to be held on 27.10.2009 and further to give effect to the resolutions passed therein;
D. Pass a decree of declaration declaring that the plaintiff continues as Director on the Board of Defendant No.1 till the conclusion of enquiry already initiated by defendant No.3 and till the conclusion of enquiry on the issue mentioned in his letter dated August 5th, 2009 to the Board."
3. On 03.08.2011, when the suit came up for hearing, respondent No.1 sought leave to withdraw the suit with liberty to take recourse to such remedies which may be available to him in accordance with law. Granting leave, the suit was dismissed as withdrawn with liberty as prayed for.
4. Thereafter, respondent No. 1 has filed the present suit. In the present suit, the additional facts urged are that on 27.10.2009, when the Extra Ordinary General Meeting of petitioner No. 1 was to be held, respondent No. 1 claims to have reached the venue along with one junior advocate but was prevented from entering the premises. A resolution was passed by the EGM that respondent No.1 be removed as a director of petitioner No. 1 Company. In the present suit the following reliefs are sought:
"(i) Declaring that Resolution pertaining to removal of the plaintiff as a Director, as passed by defendant No.1 Company in its Extra Ordinary General Meeting held on 27th October 2009 is illegal, null and void;
(ii) Declaring that the removal of the plaintiff as Director of defendant No.1 Company is illegal, null and void; or mala fide or arbitrary or wrongful and that the plaintiff shall be deemed to continue as its Director.
(iii) Issuing a consequential mandatory injunction to defendant No.1 Company, directing it to take the plaintiff as one of its directors in accordance with law;
(iv) Granting damages and compensation of Rs.25,00,000/- (Rupees Twenty Five lakhs only) payable to the plaintiff;"
5. After the present suit was filed, the petitioners have filed the present application under Order 7, Rule 11 CPC where various grounds have been raised as to why the suit is not maintainable. The trial court however dismissed the application of the petitioners.
6. I have heard the learned counsel for the parties. I may place on record that at the outset, I have informed the learned counsel for the parties that as a senior advocate about four years ago, I have been engaged in two- three matters by the law firm of which respondent No.1 is proprietor/managing partner. The learned counsel for the petitioners, ho
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