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2026 Supreme(Online)(Bom) 360
HIGH COURT OF BOMBAY
Arif S. Doctor, J
MULTI COMMODITY EXCHANGE OF INDIA LTD – Appellant
Versus
MPPL ENTERPRISES PVT.LTD AND 9 ORS – Respondent
COMMERCIAL SUIT NO. 31 OF 2015 | NOTICE OF MOTION NO. 721 OF 2016 | NOTICE OF MOTION NO. 718 OF 2016 | NOTICE OF MOTION NO. 703 OF 2016 | NOTICE OF MOTION NO. 728 OF 2016 | NOTICE OF MOTION NO. 682 OF 2016 | NOTICE OF MOTION NO. 680 OF 2016
For the Appellants/Petitioners: Mr. Om Prakash Jha, Mr.Sumit Yadav
For the Respondents: Mr. Chaitanya Nikte, Ms. Esha Malik, Mr. Shubhankar Kulkarni, Mr.Mohammed Junaid Qureshi, Mr.Suraj Iyer, Ms. Gauri Joshi, Mr. Kunal Mehta, Farheen Mustafa, Mr.Rajiv Naik, Mr.Anup Jain, Mr.Vinay J. Bhanushali, Mr. Abhiraj Rao, Mr. Sanmit Vaze
A plaint can be rejected under Order VII Rule 11 CPC against directors impleaded solely in their capacity as directors, where no specific cause of action, personal involvement, or wrongdoing is pleaded against them individually.
Headnote:(A) Civil Procedure Code, 1908 - Order VII Rule 11 and Order I Rule 10, read with Section 115 - Rejection of plaint - Plaint fails to disclose cause of action - Directors impleaded in representative capacity without specific allegations - Plaint rejected against directors. (Paras 1-20)
(B) Company Law - Separate corporate personality - Directors not personally liable for company's contractual obligations absent specific pleadings and particulars - Pierce of corporate veil requires specific pleading. (Paras 11-13)
(C) Pleading - Order VI Rule 4 - Allegations of fraud, collusion, conspiracy must be specifically pleaded with material particulars - Generic references to 'Defendants' insufficient. (Para 10, 18-B)
Facts of the case:
The Plaintiff, Multi Commodity Exchange of India Ltd., filed a commercial suit against MPPL Enterprises Pvt Ltd and others seeking to recover fees paid for advisory services. Defendant Nos. 3 to 8, described as 'Nominee Directors' of Defendant No.2, moved notices for rejection of plaint under Order VII Rule 11 CPC on the ground that the plaint disclosed no cause of action against them personally.
Findings of Court:
The Court found no specific averments attributing any act, omission, or wrongdoing to Defendant Nos. 3 to 8 individually. The plaint referred to them only by the generic expression 'the Defendants' and did not plead personal liability, fraudulent conduct, or basis for piercing the corporate veil.
Issues: Whether the plaint disclosed any cause of action against directors (Defendant Nos. 3 to 8) who were impleaded solely in their capacity as nominee directors without any specific allegations of personal involvement or wrongdoing.
Ratio Decidendi: A civil claim against a company does not automatically translate into a cause of action against its directors. For a director to be personally liable, specific pleadings with material particulars attributing personal involvement, benefit, or wrongdoing must be set out in the plaint itself. The Court cannot rely on material outside the plaint, such as affidavits-in-reply, to cure fundamental defects.
Result: Notices of Motion allowed; plaint rejected as against Defendant Nos. 3 to 8.
| Table of Content |
|---|
| 1. facts and arguments regarding rejection of plaint against nominee directors. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17) |
| 2. court's reasoning: plaint disclosed no cause of action against directors. (Para 18) |
| 3. final order allowing rejection of plaint and disposal of related motion. (Para 19 , 20) |
WITH
NOTICE OF MOTION NO. 718 OF 2016
WITH
NOTICE OF MOTION NO. 703 OF 2016
WITH
NOTICE OF MOTION NO. 728 OF 2016
WITH
NOTICE OF MOTION NO. 682 OF 2016
WITH
NOTICE OF MOTION NO. 680 OF 2016
IN
COMMERCIAL SUIT NO. 31 OF 2015
Multi Commodity Exchange of India Ltd. …Plaintiff
Versus
MPPL Enterprises Pvt Ltd & Ors. …Defendants
—
Mr. Om Prakash Jha a/w Mr.Sumit Yadav i/by Law Point for Plaintiff.
Page 1 of 14
Meera Jadhav
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6-NMS-721-2016
Mr. Chaitanya Nikte a/w Ms. Esha Malik a/w Mr. Shubhankar Kulkarni i/by
Mr. Prajit Sahane for Defendant Nos. 1 and 2.
Mr.Mohammed Junaid Qureshi i/b Mr.Rahul G. Talreja for Defendant No.3.
Mr.Suraj Iyer with Ms. Gauri Joshi i/b Ganesh & Co. for Defendant No.4 and
for the Applicant in NM/718/2016.
Mr. Kunal Mehta a/w Farheen Mustafa i/b Jayesh Mistry for Defendant No.5.
Mr.Rajiv Naik with Mr.Anup Jain i/b M/s.Expletus Legal for Defendant No.6.
Adv. Farheen Mustafa i/b Jayesh Mistry for Defendant No.7.
Mr.Vinay J. Bhanushali, with Mr. Abhiraj Rao, Mr. Sanmit Vaze for Defendant
No.8 and Applicant in NMS/680/2016.
—
CORAM : ARIF S. DOCTOR, J.
RESERVED ON : 29th JANUARY 2026
PRONOUNCED ON : 5th FEBRUARY 2026
P.C.
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
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Meera Jadhav
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6-NMS-721-2016
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.
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Meera Jadhav
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6-NMS-721-2016
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, w
