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2025 Supreme(Online)(Mad) 50992
IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.B.Balaji, J
Mr.Masilamani Nandagopal – Appellant
Versus
Mr.Nate Nandha – Respondent
A.No.6722 of 2024|O.A. No.937 of 2024|O.A. No.71 of 2025|Arb. Appln Nos.833 of 2024|Arb. Appln No.217 of 2025
For the Appellants/Petitioners: Mr.Srinath Sridevan, Mr.Keerthikiran Murali
For the Respondents: Mrs.Nalini Chidambaram, Mrs.C.Uma, Mr.C.Manishankar, Mr.Rahul M.Shankar, Mr.V.Kuberan, Mr.Harshit S.Jain
A Settlement Deed can be revoked if the conditions for care and support are not met, and if not acted upon, it may not be enforceable.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9(1)(e) - Interim injunction - The applicant sought to vacate the interim order restraining the respondent from dealing with shares in Binny Limited pending arbitration - The court modified the interim injunction, clarifying its scope and ultimately allowing the application to vacate the interim order. (Paras 3, 36)
(B) Settlement Deed - Validity and enforceability - The court examined the irrevocability clause of the Settlement Deed and found that the cancellation was valid due to the lack of compliance by the settlees regarding care for the settlor. The court noted that the Settlement Deed was not acted upon, making it revocable. (Paras 27, 30)
(C) Shares - Transfer and legal authority - The court ruled that since the shares were transferred to a third party not involved in the proceedings, the injunction application became infructuous. (Paras 34, 36)
Facts of the case:
The applicant, son of the first respondent, sought to restrain the first respondent from dealing with shares in Binny Limited, citing a Settlement Deed. The first respondent cancelled the Settlement Deed, claiming lack of care from the applicant and his sister. (Paras 5, 6)
Findings of Court:
The court found the cancellation of the Settlement Deed valid and ruled that the injunction applications were infructuous as the shares had already been transferred to a third party. (Paras 34, 36)
Issues: The main issues were the validity of the cancellation of the Settlement Deed, the enforceability of the deed, and the authority to transfer shares. (Paras 30, 34)
Ratio Decidendi: The court held that the Settlement Deed was not acted upon, making the cancellation valid, and that the transfer of shares to a third party rendered the injunction application infructuous. (Paras 30, 34)
Result: A.No.6722 of 2024 allowed; O.A. Nos.937 of 2024, 71 of 2025, Arb. Appln. Nos.833 of 2024 & 217 of 2025 dismissed.
| Table of Content |
|---|
| 1. background of the case and parties involved (Para 1 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. court's analysis and reasoning (Para 3 , 18 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34) |
| 3. arguments presented by the parties (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 19 , 20 , 21 , 22 , 24) |
| 4. legal conclusion and decision (Para 36) |
| 5. final order and dismissal of applications (Para 37) |
ORDER
A.No.6722 of 2024 has been filed to vacate the Interim Order dated 10.12.2024 passed in O.A. No.937 of 2024 and dismiss the the said O.A. No.937 of 2024 filed by the 1st Respondent/Applicant.
2. I have heard Mr.Srinath Sridevan, learned Senior Counsel for Mr.Keerthikiran Murali, learned counsel in A.No. 6722 of 2024 and R1 in O.A. No.937 of 2024 & 71 of 2025, Arb. Appln. No.833 of 2024 & 217 of 2025, Mrs.Nalini Chidambaram, learned Senior Counsel for Mrs.C.Uma, learned counsel for R1 in A. No.6722 of 2024, Petitioner in O.A. No.937 of 2024 & Arb. Appln. No.833 of 2024, R3- O.A. No.71 of 2025 & Arb. Appln. No.217 of 2025, Mr.C.Manishankar, learned Senior Counsel for Mr.Rahul M.Shankar, learned counsel for R2 – A. No.6722 of 2024, O.A. No.937 of 2024 & 71 of 2025 and Arb. Appln. No.833 of 2024 & 217 of 2025 and Mr.V.Kuberan, learned counsel for Mr.Harshit S.Jain, for R3 – A. No.6722 of 2024, O.A. No.937 of 2024 and Arb. Appln. No.833 of 2024 O.A. No.71 of 2025 & Arb. Appln. No.217 of 2025.
3. Arb Application No.833 of 2024 and O.A. No.937 of 2024 were moved before me initially, I have ordered notice in Arb Application No.833 of 2024 by order dated 10.12.2024 and granted an interim injunction restraining the 1st respondent in O.A. No.937 of 2024 from dealing with the shares held by him in Binny Limited directly or indirectly, contrary to the terms of Settlement Deed dated 18.05.2023. Thereafter, A.No. 6722 of 2024 has been filed for vacating the ex parte interim order granted on 10.12.2024 and after hearing the learned Senior Counsel, Mr.Ramakrishsnan Veeraraghavan, learned Senior Counsel appearing for the applicant in the vacate the interim injunction application and Mrs.Nalini Chidambaram, learned Senior Counsel for the 1st respondent and Mr.Rahul M Shankar, learned counsel for the 2nd respondent in the injunction application, I have modified the order of injunction dated 10.12.2024, restricting it to clause 1(c) of the Settlement Deed dated. 18.05.2023, that is settlement in favour of the 1st respondent, clarifying that it would not bind respondents 2 & 3 insofar as their respective interests is concerned. Thereafter on 30.01.2025, I have heard all the learned counsel for the parties, including the Senior Counsel appearing on their behalf.
4. The parties are described as per their rank in O.A. No.937 of 2024. In order to understand the fact situation clearly the following background particulars would be necessary:-
5. The reliefs sought for in the Applications are as follows;
(i) O.A. No.937 of 2024 – Injunction Injunction, restraining the 1st respondent from dealing with the shares in Binny Limited held by him, directly or indirectly, in any manner contrary to the terms of the Settlement Deed dated 18.05.2023, pending disposal of the arbitration proceedings;
(ii) O.A. No.833 of 2024 – Interim stay of the Deed of Cancellation dated 13.09.2024, executed and registered by the 1st respondent, cancelling the Settlement Deed dated 18.05.2023 and all consequences arising therefrom, pending disposal of the arbitration proceedings;
(iii) A. No.6722 of 2024 - to vacate the Interim Order dated 10.12.2024 passed in O.A. No.937 of 2024 and dismiss the the said O.A. No.937 of 2024 filed by the 1st Respondent/Applicant;
(iv) Arb. Appln. No.217 of 2025 – To stay of the Deed of Cancellation dated 13.09.2024 executed and registered by the 1st respondent cancelling the Settlement Deed dated 18.05.2023. This Application is filed by daughter of the 1st respondent; and (v) O.A. No. 71 of 2025 – Interim Injunction, restraining the 1st respondent from d
