2023 Supreme(Del) 5636
IN THE HIGH COURT OF DELHI AT NEW DELHI
Manmohan, Mini Pushkarna, JJ.
Shiju Jacob Varghese & Anr. - Appellants
Versus
Tower Vision Limited & Ors. - Respondents
RFA(OS) 136 of 2012 & C.M.Nos.12305 of 2014 and 39987 of 2017
Decided On : 17-10-2023
Mr.Anil Airi, Sr.Advocate with Mr.Navin Kumar, Advocate, Ms.Rashmeet Kaur, Advocate, Ms.Aarti Mahto, Advocate, Mr.Mudit Ruhella, Advocate, Ms.Sadhana Advocate and Ms.Bhagya Ajith, Advocate, for the Appellant; Mr.Dayan Krishan, Advocate and Mr.Rajshekhar Rao, Sr.Advocates with Mr. Susmit Pushkar, Advocate , Mr.Anchit Oswal, Advocate, Mr.Sanjeev Seshadri, Advocate, Mr.Shreedhar Kale, Mr. Sudi Mullick, Advocate, Mr.Yigal Gabriel, Advocate, Mr.Meherasp Mistry, Advocate , Ms. Meherunissa Anand, Advocate, Mr.Dushyant Kale and Ms.Roshni Srivastava, Advocate, for the Respondent.
An appeal becomes infructuous if a subsequent event resolves the underlying dispute, and continuation constitutes an abuse of process as it leads to forum shopping and re-litigation.
Headnote:(A) Code of Civil Procedure, 1908 - Section 151 - Infructuous appeal due to settlement of disputes as per consent order - The court ruled that if a case becomes infructuous due to a subsequent event, it must be disposed of. The consent order dated 11th May 2017 resolved all disputes concerning the Share Entitlement, rendering the appeal moot. (Paras 23, 24, 26, 50)
(B) Consent Order - Legal Binding - The consent order provided resolution of disputes and barred continuation of appeals based on the same cause of action as previously addressed by a competent court. The plaintiffs were found to be guilty of re-litigation and forum shopping, constituting an abuse of process. (Paras 31, 41, 49)
Facts of the case:
The appeal arose from prior proceedings in Tel Aviv regarding a Share Entitlement Document routing 7% rights in a partnership, claiming that their rights were settled in a consent order of 11th May, 2017. (Paras 2.11, 2.12)
Findings of Court:
The appeal was dismissed as infructuous following the findings that the consent order rendered the cause of action moot and it violated the principle of comity between courts. (Paras 50, 32)
Issues: The main issues were whether the appeal was infructuous due to the consent order and if the continuation of the appeal constituted forum shopping or abuse of the court process. (Paras 51, 44)
Ratio Decidendi: The court held that continuation of litigation post-settlement disregards the principle of finality in lawsuits and that parties cannot seek redress in different jurisdictions after a consensual resolution has been established. (Paras 28, 50, 31)
Result: Appeal dismissed as infructuous.
| Table of Content |
|---|
| 1. infructuous appeal due to settlement (Para 2 , 4 , 5) |
| 2. consent order effectives on rights of parties. (Para 6 , 12 , 13) |
JUDGMENT
Manmohan, J.
CM APPL.39987/2017
1. Present application has been filed on behalf of the Respondents under Section 151 of the Code of Civil Procedure, 1908 (CPC) for dismissal of the appeal on the ground that it has become infructous.
ARGUMENTS ON BEHALF OF THE APPLICANTS - RESPONDENTS
2. Mr. Dayan Krishan and Mr. Rajshekhar Rao, learned senior counsel for the Applicants-Respondents contended that the present appeal was infructuous in view of the settlement of disputes between the parties as recorded in the consent order dated 11th May, 2017 passed by the Tel Aviv District Court. In support of their contention, they relied on the following facts and submissions:
2.1 A document entitled Share Entitlement was executed in favour of Appellant No.1 by Respondent No.2 i.e. Tower Vision Limited Partnership through Respondent No.1 i.e. Tower Vision Limited in its capacity as the general partner of Respondent No.2 on 17th October, 2006. The Share Entitlement dated 17th October, 2006 is reproduced hereinbelow:-
"To:
Mr.Shiju Varghese
Re: Share Entitlement
1. We the undersigned Tower Vision Limited Partnership, an Israeli registered limited partnership (the "Partnership"), hereby confirm that you have today an absolute and unconditional interest in 7% of the rights of the Partnership. We further confirm that in case of any structure changes which will result in the partners holding their interests in the Tower Management business through any other entity. You shall be entitled to receive absolutely and unconditionally 7% of the rights of any such other entity, which will be established by the partners of the Partnership, and which will replace the Partnership in any holding structure related to the Tower Management business of the Partnership. For the avoidance of doubt such Tower Management business of the Partnership is today carried out via Tower Vision Mauritius Limited.
2. We will allocate the rights or shares referred to in Section 1 above to your name or to any other entity as Instructed in writing by you.
3. Our undertaking herein supersedes any previous undertaking provided to you by us and/or by any related entity in respect of your entitlement to receive any share and/or right in the Partnerships tower management business. Any previous undertaking and/or obligation regarding the subject matter of this letter shall become null, and void as of the date of this Letter.
Sd/-
Tower Vision Limited Partnership
by Tower Vision Ltd as General Manager"
2. 2 Though Respondent No.3, Tower Vision India Private Limited (an Indian Company), had been incorporated prior to the date of Share Entitlement i.e. on 27th January, 2006, yet there was no reference to the said company in this document. As on the date of execution of Share Entitlement i.e. 17th October, 2006, 99.99% shares of Respondent No.3 were held by Respondent No.4 and 0.01% (1 share) was held by Elgadcom Group Company.
2. 3 On 13th November, 2008, a suit being Civil File No. 2192 of 2008 was filed by the Appellants (Tel Aviv suit) before the Tel Aviv District Court against Respondents No.1 and 2, who are Israeli companies as well as Respondent No.6 (Trustee) and Rani Benyamini (not a party in the present proceedings), relying solely on the Share Entitlement dated 17th October, 2006. The amended reliefs claimed in the said suit are reproduced hereinbelow:-
"43. The Honorable Court is hereby requested to determine in declaratory judgment as follows:
43.1 The Share Entitlement Document is valid and is absolutely and unconditionally binding on the Partnership and Tower Israel in its capacity of general partner;
43.2 Alternatively - Benyamini signed the Share Entitlement Document, and he is personally obligated to fulfill the Share Entitlement Document.
43.3 The Partnership and/or Tower Israel and /or Benyamini breached their undertakings under the Share Entit