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2019 Supreme(Mad) 1204
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SUBRAMANIAN, J.
Arif Buhary Rahman, Through his Power of Attorney V.S. Gopalakrishnan & Others - Appellants
Versus
Siddesh Kshirsagar & Another - Respondents
Original Application Nos. 509, 510 of 2019 & Application No. 4033 of 2019 in CS No. 320 of 2019
Decided On : 05-07-2019
For the Applicants :J. Sivanandaraaj for M/s. N. Senthil Kumar, Advocates
For the Respondents:Ratnanko Banerji, Senior Counsel for M/s. K. Mukund Rao, Advocate
Headnote:
Civil Procedure Code,1908 – Order XXXIX Rule 1 and 2 - Specific Relief Act – Section 41(b) - Suit has been filed seeking a declaration that this Court does not have territorial jurisdiction to adjudicate upon the title of the plaintiffs to the shares in M/s.Star Health and Allied Insurance Co. Ltd., for a declaration that this Court does not have jurisdiction to entertain EP seeking execution of an Arbitration award against shares of plaintiffs in M/s. Star Health and Allied Insurance Co. Ltd., and permanent injunction restraining defendants from proceeding with EP No.40 of 2019 and for other relief’s - Applicants collectively hold 3.18% shares in Star Health and Allied Insurance Co. Ltd., incorporated under the Companies Act, 1956 and carrying on business - Applicants are the promoters of ETA Group of Companies - ETA Group of Companies were promoted by three families belong to the India and the Al Ghurairs belong to the UAE – Held, court therefore of the considered opinion that the question whether interdict imposed by Section 41(b) would prevent this Court from regulating its own process need not be gone into, at this juncture suffice to say that Executing Court will be competent to decide on the question of jurisdiction also and once applicants have that remedy open to them, they need not be favoured with the discretionary remedy of injunction – Court unable to subscribe to contention of learned counsel appearing for applicants, Executing Court cannot decide that question - Executing Court can definitely look into the question as to whether it has jurisdiction entertain the execution proceedings and also decide whether it has jurisdiction to go into the question of title to the shares - In view of the above conclusions, court find that the applicants have not made out the prima facie case for grant of an injunction and the balance of convenience is also not in their favour, on other hand court find balance of convenience is in favour of the respondents. In view of the above findings, interim injunction granted is vacated in Application No.4033 is allowed will stand dismissed.
(Prayers: Applications are filed under Order XIV Rule 1 and 8 of the Original Side Rules read with Order XXXIX Rule 1 and 2 of the Code of Civil Procedure, praying to Appl.No.509/2019: to grant an interim injunction restraining the respondents/defendants from proceeding with E.P.No.40 of 2019, or taking any steps in furtherance thereof, Pending disposal of the suit.
Appl.No.510/2019: to grant an interim injunction restraining the respondents/defendants their men, agents, attorneys, servants, assigns or any person claiming through or under them from interfering with the Transaction directly or indirectly in any manner whatsoever, including by contacting the Buyers and/or any authorities and/or any person connected to the Transaction pending disposal of the suit.
Appl. No.4033/2019: to vacate the ad-interim injunction order dated 25th April 2019 in the instant captioned proceedings i.e. in OA No.509 of 2019 in CS No.320 of 2019.)
1. The applicants in OA No.509 of 2019, seek an order of injunction restraining the respondents/defendants from proceeding with E.P.No.40 of 2019, or taking any steps in furtherance thereof, pending disposal of the suit in CS No.320 of 2019.
2. The suit in CS No.320 of 2019 has been filed seeking a declaration that this Court does not have territorial jurisdiction to adjudicate upon the title of the plaintiffs to the shares in M/s.Star Health and Allied Insurance Co. Ltd., for a declaration that this Court does not have jurisdiction to entertain EP No.40 of 2019 seeking execution of an Arbitration award against the shares of the plaintiffs in M/s. Star Health and Allied Insurance Co. Ltd., and permanent injunction restraining the defendants from proceeding with EP No.40 of 2019 and for other relief’s.
3. Upon hearing the learned counsel for the plaintiffs, having found a prima facie case, an order of interim injunction was granted by this Court on 25.04.2019. Upon service, the respondents/defendants have come forward with Application No.4033 of 2019 seeking to vacate the order of interim injunction.
4. The case of the applicants is as follows:
The applicants collectively hold 3.18% shares in Star Health and Allied Insurance Co. Ltd., incorporated under the Companies Act, 1956 and carrying on business in Chennai. These shares were allotted to them between 2005 and 2011. The applicants are the promoters of ETA Group of Companies. The ETA Group of Companies were promoted by three families namely, the Al Ghurairs, the Salahuddins and the Buharys. While the Salahuddins and the Buharys families belong to the India and the Al Ghurairs belong to the UAE.
5. Sometime in 2012, the major disputes arose between the three families. In 2014, there was a deconsolidation agreement by which ETA Group was deconsolidated. After deconsolidation, the applicants decided to sell their holdings in Star Health and Allied Insurance Co. Ltd. According to the plaintiffs, on coming to know about the offer of the applicants to sell their interest in Star Health and Allied Insurance Co. Ltd., the Al Ghurairs family filed a suit in CS No.33 of 2018 in this Court, seeking a declaration that the shares held by the applicants do not belong to them and the beneficial interest in the shares belonged to M/s. ETA Star Holdings Ltd., an ETA Group Company incorporated in Dubai.
6. An injunction was also sought for restraining the applicants/plaintiffs from alienating the shares. Originally an injunction was granted by this Court, on Appeal a Division Bench of this Court concluded that this Court does not have a territorial jurisdiction to decide the question of title to the shares. The Division Bench also concluded that the Courts in Dubai alone have the territorial jurisdiction to decide the dispute. This decision of the Division Bench was upheld by the Hon’ble Supreme Court also. Thereafter, the second respondent herein, which had obtained an Ex parte Foreign Arbitral Award against one of the Group Companies namely, ETA LLC controlled by the A
