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2018 Supreme(Del) 2360
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN, J.
Asian Hotels (West) Ltd. & Ors. - Plaintiffs
Versus
Jindal Photo Investment Ltd. & Ors. – Defendants
CS(OS) 2476 of 2015 & I.A.Nos.17148 of 2015, 18714-18715 of 2015, 24462-24463 of 2015, 11795 of 2017
Decided On : 15-10-2018
For the Plaintiff : Mr. Parag P.Tripathi and Mr. Harish Malhotra, Mr. Jayant Mehta, Mr. Pawan Sharma, Mr. Siddharth Aggarwal, Ms. Divya Bhalla, Mr. Anuj Shah, Mr. Srinivasan Ramashwamy and Mr. Rishabh Sharma
For the Defendants : Mr. Gaurav Varma and Mr. Sujoy Datta, Mr. Darpan Wadhwa, Mr. Ajay Bhargava, Mr. Aseem Chaturvedi, Mr. Saurabh Seth and Mr. Sharngan Aravindakshan
Headnote:
Civil Procedure Code, 1908 - Order 39 Rule 4, Order 7 Rule 11 R/w Order 1 Rule 10 - Share purchase - Cross holding - Effect of - Share purchase by Jindal Group - This was prior to the execution of Inter Se Agreement - Subsequent purchase by the defendant nos. 5 to 8 from the Stock Exchange was post the termination of Inter Se Agreement - Subsequent purchase after intimation to the Stock Exchange has never been challenged by the plaintiffs - Neither any other agreement between the three promoter groups nor the Articles of Association of AHL or Asian Hotels restrict the groups from having cross holding or purchasing or inter-se transferring shares.
Limitation Act, 1963 - Section 14(1) - Acquiring share - Cause of action - Limitation, applied - Jindal Group had purchased and always held the shares on behalf of defendant nos. 6 to 9 is based on the same annual report - Balance sheet of Jindal and Saraf Groups on the basis of which had been filed - Plaintiff nos. 2 to 5 should be deemed to have knowledge of the fact prior to 2005 - Challenge of purchase of shares by Jindal Group since 2003 was based on the same documents - Plaintiff nos. 2 to 5 cannot take the plea that they came to know in 2011 that Jindal Group had purchased "benami shares" for defendant nos. 6 to 9 - Plaintiffs was aware of the Saraf Group acquiring the shares as far back as in December 2010 - Suit filed on 10th December, 2015
- Suit is barred by limitation.
MANMOHAN, J.
PRAYERS IN THE SUIT AND PENDING APPLICATIONS AS WELL AS EX PARTE ORDER DATED 19th AUGUST, 2015
1. Present suit has been filed for declaration and mandatory injunction. The prayer clause in the present suit is reproduced hereinbelow:-
(A) A declaration to the effect that shareholding of Radhey Shyam Saraf (Defendant No. 6) holding 572071 equity shares, Anita Rajgaria (Defendant No. 7) holding 571061 equity shares, Forex Finance Pvt. Ltd. (Defendant No. 8) holding 458377 equity shares and Jesmin Investment Ltd. (Defendant No. 5) holding 7526 equity shares aggregating to 1609035 equity shares in the Plaintiff No. 1 is illegal and void;
(B) A decree of mandatory injunction or a decree in favour of Plaintiffs and against the Defendants, their agents, nominees, administrators, legal heirs, assignees etc. directing the Defendant Nos. 5 to 8 to transfer their shareholdings to the Plaintiff No. 1 at their face value;
(C) Award Cost in favour of the Plaintiffs and against the Defendants;
(D) Pass an orders/directions as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."
2. While I.A. No. 17148/2015 has been filed by the plaintiffs for grant of injunction, I.A. Nos. 18714 & 18715 of 2015 have been filed under Order 39 Rule 4 by defendant nos. 8 and 6 respectively for vacation of interim order dated 19th August, 2015, I.A. Nos. 24462 & 24463 of 2015 have been filed under Order 7 Rule 11 read with Order 1 Rule 10 on behalf of defendant nos. 5 and 1 to 3 respectively.
3. On 19th August, 2015, the learned predecessor of this Court passed an ad interim ex parte order. The relevant portion of the said order is reproduced hereinbelow:-
"It is the contention of the plaintiffs that as per the arrangement between the parties, three groups, i.e., Gupta Group, Saraf Group and Jatia Group were to go their separate ways from the erstwhile ASIAN Hotels Ltd. and the three hotels i.e. Hotel Hyatt at Mumbai (West Zone), Hotel Hyatt at Calcutta (East Zone) and Hotel Hyatt at Delhi (North Zone), were to be managed individually by the said groups. De-merger proceedings to this effect were initiated before this court and were sanctioned on 13.01.2010. In the interim, the parties had also entered into an inter se agreement on 26.10.2009 according to which each of the said three groups would hold an aggregate of 59.27% of the shares in the proposed three 'resultant' companies. Clause F of the inter se agreement reads as under :
“F. The Parties are desirous of undertaking an inter-se transfer of equity shares amongst them in AHL Residual, Transferee Company-I and Transferee Company-II post the effectiveness of the Scheme in compliance with the provisions of applicable Laws. The Parties intend to record in this Agreement, the modalities of effecting trifurcation enabling each of the Jatia Group, the Gupta Group and the Saraf Group to hold in the aggregate 67,57,702 equity shares (i.e. 59.269%) out of the total issued and paid-up capital of AHL Residual, Transferee Company-I, and Transferee Company-II respectively, which modalities will be affected and implemented in accordance with the provisions of this Agreement.”
It was also agreed that there would not be cross-holding of either of them in the other's company. This was specifically stipulated in Clause 7.4 of the agreement which reads as under:
“7.4. Each of the Promoter Groups undertake not to acquire further equity shares in AHL and post effectiveness of the Scheme not to acquire further equity shares in the resultant companies and shall ensure that the public shareholding of the resultant companies does not fall below the threshold stipulated under clause 40A of the listing agreement. This restriction will not apply after the inter-se swap of equity shares as per this Agreement.”
In terms of the said agreement, the Saraf and Jatia Groups transferred their total shareholding of 42.02% in plaintiff No.1 in favour of the Gupta Group on 23.08.2010. In December, 201
