SHYAM MADAN MOHAN RUIA & ORS. versus MESSER HOLDINGS LIMITED & ORS. on 13 December 2019

396

SUPREME COURT REPORTS

[2019] 15 S.C.R.

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SHYAM MADAN MOHAN RUIA & ORS.

v.

MESSER HOLDINGS LIMITED & ORS.

(Civil Appeal No. 9429 of 2019)

B

DECEMBER 13, 2019

[R. BANUMATHI AND A. S. BOPANNA, JJ.]

Code of Civil Procedure (Maharashtra Amendment) Act,2018 – s.9A – Several rounds of litigation between the parties –In Suit No.III, Settlement Agreement was entered into under whichC75,001 shares of respondent No.2 were transferred to theappellant(s) by respondent no.3 – Respondent no.1 filed Suit No.IVto cancel the said Agreement, inter alia praying for declaration ofrespondent no.1’s ownership of 75,001 shares of respondent no.2– Appellants filed affidavit u/s.9A, CPC (Maharashtra Amendment)DAct, raising preliminary issue of limitation by contending that thesuit prayers claiming ownership over the 75,001 shares ofrespondent no.2 is barred by limitation as the Settlement Agreementbetween the appellants was entered on 05.12.02 while Suit No.IVwas filed by respondent no.1 in 2008 – Single Judge allowed thepetition filed by the appellants –Division Bench in appeal by theErespondent no.1, set aside the order – Held: In view of theinterpretation given to s.9A by the three Judges Bench in NusliVeville Wadia vs. Ivory Properties & Ors. reported as (2019) 13SCALE 620 inter alia holding that no issue can be decided onlyunder the guise that it has been framed u/s.9A and was pendingFconsideration on the date of commencement of the 2018 Act, thequestion of limitation will have to be considered along with otherissues that would arise for adjudication in Suit No.IV – In view ofthe said judgment, the decision rendered by the Single Judge andthe Division Bench on the issue of limitation by considering thatas preliminary issue would become nullity and the matter wouldGhave to proceed afresh – Suit No.IV to proceed afresh from thestage of framing of the issues being uninfluenced by any of theviews expressed by the Single Judge and the Division Bench –Question of limitation be determined along with other issues arisingfor consideration – No opinion expressed on the merits of theHmatter – Single Judge requested to proceed with the Suit No.IV

expeditiously and dispose the same preferably within 18 months –Code of Civil Procedure (Maharashtra Amendment) Act, 1977.

Disposing of the matters, the Court

Conclusion

HELD: 1.1 Though, various contentions have been raisedon the merits of the matter, in view of the change in the law anddeletion of Section 9A of the Code (in its application to the Stateof Maharashtra) and the judgment of the Supreme Court in NusliVeville Wadia v. Ivory Properties & Ors. (2019) 13 SCALE 620, itis not necessary to consider the merits of the contentions. TheState of Maharashtra inserted Section 9A to the Code of CivilProcedure vide Code of Civil Procedure (MaharashtraAmendment) Act, 1977. Section 9A provided that where anapplication has been made for granting or setting aside an ordergranting interim relief in a suit, if either of the party challengedthe jurisdiction of the Court to entertain the suit, the Courtwould have to decide the preliminary issue of jurisdiction beforedeciding the aforesaid application. The amended Section 9Acame to be repealed by CPC Maharashtra (Amendment)Ordinance 2018 with effect from 27.06.2018 and Section 9A ofthe Code (in its application to the State of Maharashtra) wasdeleted by Section 3 of the Ordinance. The above Ordinance wasreplaced by the Code of Civil Procedure (MaharashtraAmendment) Act, 2018 on 29.10.2018. It was provided that thepreliminary issues framed under Section 9A shall be treated asan issue under Order XIV CPC and be decided by the courtswith other issues as the court may deem fit. On 15.12.2018,the State of Maharashtra enacted the Code of Civil Procedure(Maharashtra Amendment) Act, 2018 which provided for a savingclause. Section 2 of the Amendment Act provided that if thecourt has ordered to decide an issue as a preliminary issuebefore the date of deletion of Section 9A, it shall be decided bythe court as a preliminary issue. After repeal of Section 9A,because of divergent views, in Foreshore Cooperative HousingSociety Limited v. Praveen D. Desai (Dead) Through LegalRepresentatives and Others (2015) 6 SCC 412 and KamalakarEknath Salunkhe v. Baburav Vishnu Javalkar and Ors. (2015) 7SCC 321, Section 9A as it stood came up for consideration beforethe three Judges Bench in (2019) 13 SCALE 620. In view of the A

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Asaid judgment passed by the Hon’ble Three Judges Bench, thequestion of limitation will have to be considered along with otherissues that would arise for adjudication in Suit No.2410 of 2008filed by respondent No.1. The trial in the Suit No.IV-2410 of 2008has to be proceeded independently on its own merits. In viewBof the judgment by the Three Judges Bench, the decisionrendered by the learned Single Judge as well as by the DivisionBench on the issue of limitation by considering that aspreliminary issue would become nullity and the matter wouldhave to proceed afresh. [Paras 15-17, 19] [403-F-H; 404-A-E;406-D-E]

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1.2 Directions and observations: (i) The order dated16.03.2017 passed by the learned Single Judge in Suit No. 2410of 2008 and the order dated 08.08.2019 (corrected on19.09.2019) passed by the Division Bench in Commercial AppealNo. 148 of 2017 arising out of Suit No. 2410 of 2008 are setDaside. (ii) Suit No.2410 of 2008 filed by respondent No.1 shallproceed afresh from the stage of framing of the issues. Thequestion of limitation to be determined along with other issuesarising for consideration. The suit shall be proceeded withoutbeing influenced by any of the views expressed by the learnedESingle Judge as well as by the Division Bench of the High Courtin the impugned judgment. (iii) Respondent No.1 is at liberty torequest the Court to take up their pending applications and thelearned Court shall consider them on their own merits. (iv) Thelearned Single Judge is requested to take up the Suit No.2410of 2008 filed by respondent No.1 and proceed with the sameFexpeditiously and dispose the same preferably within a periodof 18 months. (v)It is made clear that no opinion has beenexpressed on the merits of the matter. [Para 20] [406-F-H; 407-A-C]

SPECIAL LEAVE PETITION (CIVIL) NO. 26642 OF 2019G

1.3 Consequently, in view of the order passed in CivilAppeal arising out of SLP(C)No.25341 of 2019, this special leavepetition is also disposed of. [Para 20] [407-D]

Nusli Veville Wadia v. Ivory Properties & Ors. (2019)H13 SCALE 620 – relied on.

SHYAM MADAN MOHAN RUIA & ORS. v. MESSERHOLDINGS LIMITED & ORS.

Messer Holdings Ltd. v. Shyam Madanmohan Ruia &Others (2016) 11 SCC 484 : [2016] 5 SCR 1 ;Foreshore Cooperative Housing Society Limited v.Praveen D. Desai (Dead) Through LegalRepresentatives and others (2015) 6 SCC 412 : [2015]5 SCR 1075 ; Kamalakar Eknath Salunkhe v. BaburavVishnu Javalkar and Ors. (2015) 7 SCC 321 –referred to.

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9429of 2019.

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From the Judgment and Order dated 08.08.2019/19.09.2019 ofthe High Court of Judicature at Bombay in Commercial Appeal No.148 of 2017 in Suit No. 2410 of 2008.

With

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S.L.P.(Civil) No. 26642 of 2019.

Fali S. Nariman, Dr. A.M. Singhvi, S. Ganesh, Dhurv Mehta,Sr. Advs., Mrs. Shally Bhasin, Ms. Mohna, Ms. Geetali Talukdar,Ms. Anushka Arora, Ms. Madhavi Khanna, Sreegesh N.K., Ms. ArunaGupta, Advs. for the appearing parties.

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The Judgment of the Court was delivered by

R. BANUMATHI, J.

1. Leave granted in SLP(C) No.25341 of 2019.

2. Being aggrieved by the order dated 08.08.2019 as correctedby order dated 19.09.2019 passed by the Division Bench of the HighCourt of Bombay in Commercial Appeal No.148 of 2017 in Suit No.2410of 2008 in and by which the Division Bench has reversed the order ofthe Learned Single Judge dated 16.03.2017 by holding that the SuitNo.2410 of 2008 filed by respondent No.1- MHL is within the periodof limitation, the appellants are before this Court in this appeal.

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A3. On the first date of hearing, Mr. Fali S. Nariman, learned seniorcounsel appearing for the appellants-Ruias sought permission to amendthe synopsis and also grounds of appeal. By the order dated 13.11.2019,the same was permitted.

4. When the matter came up for admission, Ms. Aruna Gupta,Blearned counsel for respondent No.1 who is contesting respondent, hastaken notice. The first respondent was represented by learned Seniorcounsel Mr. Dhurv Mehta.

5. For hearing, the matter was adjourned to number of dates andtaken up on 13.12.2019. We have heard Mr. Fali S. Nariman, Mr. S.CGanesh and Dr. A.M. Singhvi, learned senior counsel appearing onbehalf of the appellants as well as Mr. Dhruv Mehta, learned seniorcounsel appearing on behalf of the respondent no.1 along with Mr.Sreegesh N.K. learned counsel.

6. For convenience, the parties are referred in abbreviated form:DAppellants – Ruias; Respondent No.1 - Messer Holdings Limited(MHL); Respondent No.2 – Bombay Oxygen Investments Ltd. (BOIL);Respondent No.3 - Messers Giresheim GmbH (MGG) and RespondentNo.4 – Goyal MG Gases Private Limited (GGL).

7. The contesting parties have had several rounds of litigations:- E(i) Civil Suit No.I - 1810 of 1998 filed by respondent no. 4 - GGL againstrespondent No.3 (MGG); (2) Suit No.II – 2499 of 1999 filed by theappellants-Ruias against respondent No.3(MGG) and respondentNo.4(GGL); (3) Suit No.III - 509 of 2001 filed by the appellants-Ruiasagainst respondent No.4 (GGL) and respondent No.3(MGG) and (4)Suit No.IV - 2410 of 2008 filed by respondent No.1(MHL) with whichFwe are concerned.

8. In Suit No.III – 509 of 2001, Ruias and MGG (respondentNo.3) entered into a settlement on 05.12.2002 wherein MGG(respondent No.3) is purported to have transferred 75,001 shares ofBOIL(respondent No.2) and Ruias is purported to have agreed to payGUS$ 154.642 etc. for those 75,001 shares of BOIL (respondent No.2).It is stated that parties thereon viz Ruias(appellant) andMGG(respondent No.3) have agreed that in view of the settlement,Ruias would not prosecute the proceedings against respondent No.3(MGG); but they would pursue their proceedings against respondentHNo.1(MHL) and respondent No.4(GGL).

9. Respondent No.1-MHL filed the Suit No.IV - 2410 of 2008to cancel the said Settlement Agreement dated 05.12.2002 under which75,001 shares of respondent No.2(BOIL) has been transferred to theappellant(s)- Ruias by respondent No.3 (MGG). In Suit No.IV, MHL(respondent No.1) inter alia prayed for injunction against thedevelopment agreement dated 04.02.2008 granting development rightsto one Company by name HDIL and for declaration of MHL-respondent No.1’s ownership of 75,001 shares of BOIL (respondentNo.2) and other reliefs.

10. The dispute between the parties had also travelled up toSupreme Court and this Court decided the matter in the case of MesserHoldings Ltd. v. Shyam Madan Mohan Ruia & Others reported in(2016) 11 SCC 484. Considering the contentions of the parties, andobserving that rights of parties are to be established in Suit No. IV, inparas (38), (44) and (45), the Supreme Court held as under:- “38. The existence of title in MGG in the said 75,001 sharescannot be disputed by either GGL or MHL, at least, till the dateof the consent award i.e. 21-9-2000 because GGL and MHL’sclaim for title over the said shares flows from MGG’s prior titleand the subsequent alleged transfer pursuant to the consentaward. In such a case, because of MGG’s purported transfer ofthe title in the 75,001 shares to the Ruias under the settlementdated 5-12-2002, the Ruias should normally be entitled to havetheir names entered into the records of BOCL as holders of thesaid shares by following appropriate procedure. If either GGLor MHL is objecting to the right of MGG to effect the saidtransfer in favour of the Ruias, they must establish a superiortitle (to MGG) in the said shares. It goes without saying that itcan be done only in some legal action initiated by either GGL orMHL or both jointly. But they cannot seek a declaration of theirtitle in Suits II and III filed by the Ruias. In a bid to establishtheir title MHL filed Suit IV19. The right of MHL, if any, willhave to be decided in the said suit. Until the said suit is decided,we do not see any ground in law on which either GGL or MHLcan object to the transfer of the shares in favour of the Ruiaspursuant to the settlement dated 5-12-2002.

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A44. However, in the absence of any legally established title ason today to the abovementioned shares in any party other thanMGG, whether the Ruias would be entitled, pursuant to thesettlement dated 5-12-2002, to have their names entered into theregisters of BOCL as holders of the said shares is a matter forthe Ruias to explore. However, such an entitlement, if any, shouldBbe subject to the result of Suit IV.

45. We make it clear that we are not deciding by this order, theexistence or otherwise of any right or its enforceability in the75,001 shares of BOCL in favour of either MHL or GGL. It isopen to them to establish their right in Suit IV. The defendantsCin Suit IV are at liberty to raise every defence available in lawand fact to them.”

11. In Suit No. IV-2410 of 2008 filed by respondent No.1 (MHL),the appellants filed affidavit under Section 9A CPC (MaharashtraAmendment) raising preliminary issue of limitation by contending thatDthe suit prayers (q), (r), (s), (t), (u) and (v) in respect of claimingownership over the 75,001 shares of BOIL (respondent No.2) by MHL(respondent No.1) is barred by limitation as the Settlement Agreementbetween the appellants – Ruias was entered into on 05.12.2002 andthe Suit No. IV- 2410 of 2008 filed by respondent No.1(MHL) has beenEfiled in the year 2008 which is clearly barred by limitation. RespondentNo.1(MHL) contested the said affidavit by contending that MHL(respondent No.1) was kept in dark about the settlement dated05.12.2002 between the Ruias and MGG (respondent No.3) and thatthe same came to their knowledge only on 14.10.2005 when they werehanded over the copy of the settlement agreement dated 05.12.2002.FRespondent No.1 further contended that the suit filed by respondentNo.1 was within the period of limitation as they came to know aboutthe Settlement only on 14.10.2005.

12. By the order dated 16.03.2017, the learned Single Judgeallowed the petition filed by the appellants-Ruias by holding thatGrespondent No.1 (MHL) is a stranger to the Settlement dated05.12.2002. Learned Single Judge held that the cause of action aroseto respondent No.1 (MHL) way back on 24.08.2002 when respondentNo.1-MHL was impleaded as defendant in Suit No.2499 of 1999 inwhich MHL came to be impleaded as the defendant as per ChamberHSummons No.455 of 2002 dated 04.10.2002. Learned Single Judge held that by virtue of Chamber Summons an order passed thereon,respondent No.1 had knowledge that the appellants are claiming titleof the shares in dispute even in the year 2002 and the receipt of copyof the settlement agreement dated 05.12.2002 on 14.10.2015 wasimmaterial. It was held that respondent No.1 (MHL) approached theCourt only in the year 2008 by filing the Suit No.2410 of 2008 andtherefore, the suit filed by respondent No.1 (MHL) is barred bylimitation.

13. Being aggrieved by the order of the learned Single Judge,respondent No.1 (MHL) filed Commercial Appeal before the DivisionBench of Bombay High Court. The Division Bench vide its impugnedorder set aside the order passed by the learned Single Judge by holdingthat the right to sue occurred to respondent No.1 on 14.10.2005 whenthe copy of the Settlement Agreement dated 05.12.2002 betweenrespondent No.3 (MGG) and the appellants-Ruias was supplied torespondent No.1(MHL). The Division Bench held that since respondentNo.1 had knowledge of the Settlement only on 14.10.2005, the suit filedby MHL-respondent No.1 in the year 2008 is well within the period ofthree years from the date of knowledge of the Agreement and, therefore,the suit is within the period of limitation. The Division Bench directedthe suit to proceed in respect of all other prayers made in the suit. Beingaggrieved, the appellants-Ruias have preferred this appeal.

14. We have heard the submissions of learned Senior counselappearing for the appellant and learned Senior counsel appearing forthe first respondent. We have considered the impugned judgment andperused the materials on record.

15. Though, various contentions have been raised on the meritsof the matter, in view of the change in the law and deletion of Section9A of the Code (in its application to the State of Maharashtra) and thejudgment of the Supreme Court in Nusli Veville Wadia v. IvoryProperties & Ors. (2019) 13 SCALE 620, we are of the opinion thatit is not necessary to consider the merits of the contentions. Suffice torefer to the change in the law and the interpretation given by this Court.

16. The State of Maharashtra inserted Section 9A to the Codeof Civil Procedure vide Code of Civil Procedure (MaharashtraAmendment) Act, 1977. Section 9A provided that where an applicationhas been made for granting or setting aside an order granting interimrelief in a suit, if either of the party challenged the jurisdiction of the AB

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ACourt to entertain the suit, the Court would have to decide thepreliminary issue of jurisdiction before deciding the aforesaid application.The amended Section 9A came to be repealed by CPC Maharashtra(Amendment) Ordinance 2018 with effect from 27.06.2018 and Section9A of the Code (in its application to the State of Maharashtra) wasdeleted by Section 3 of the Ordinance. The above Ordinance wasBreplaced by the Code of Civil Procedure (Maharashtra Amendment)Act, 2018 on 29.10.2018. It was provided that the preliminary issuesframed under Section 9A shall be treated as an issue under Order XIVCPC and be decided by the courts with other issues as the court maydeem fit. On 15.12.2018, the State of Maharashtra enacted the CodeCof Civil Procedure (Maharashtra Amendment) Act, 2018 which providedfor a saving clause. Section 2 of the Amendment Act provided that ifthe court has ordered to decide an issue as a preliminary issue beforethe date of deletion of Section 9A, it shall be decided by the court asa preliminary issue.

D17.After repeal of Section 9A, because of divergent views, inForeshore Cooperative Housing Society Limited v. Praveen D.Desai (Dead) Through Legal Representatives and others (2015) 6SCC 412 and Kamalakar Eknath Salunkhe v. Baburav VishnuJavalkar and Ors. (2015) 7 SCC 321, Section 9A as it stood cameup for consideration before the three Judges Bench of this Court inE(2019) 13 SCALE 620(supra). The divergent views which led toconsideration by the larger Bench is as under:

“The reference has been made by a Division Bench of this Courtvide order dated 17.8.2015, doubting the correctness of thedecision of this Court in Foreshore Cooperative Housing SocietyFLimited v. Praveen D. Desai (Dead) through LegalRepresentatives and others, (2015) 6 SCC 412 with respect tothe interpretation provisions contained in Section 9A of the Codeof Civil Procedure, 1908 (for short, ‘the CPC’) as inserted bythe Maharashtra Amendment Act, 1977. It has been opined thatGthe word “jurisdiction” under Section 9A is wide enough to includethe issue of limitation as the expression has been used in thebroader sense and is not restricted to conventional definition underpecuniary or territorial jurisdiction, the decision in KamalakarEknath Salunkhe v. Baburav Vishnu Javalkar and Ors., (2015) 7SCC 321, taking contrary view, is per incuriam in view of theHlarger Bench decision in Pandurang Dhondi Chougule and Ors.

v. Maruti Hari Jadhav and Ors, AIR 1966 SC 153 as well asother larger Bench decisions”.

18. After considering the various judgments and the submissions,the Supreme Court summarized the conclusion and held as under:

“77(a) Given the discussion above, we are of the consideredopinion that the jurisdiction to entertain has different connotationfrom the jurisdictional error committed in exercise thereof. Thereis a difference between the existence of jurisdiction and theexercise of jurisdiction. The expression jurisdiction has been usedin CPC at several places in different contexts and takes colourfrom the context in which it has been used. The existence ofjurisdiction is reflected by the fact of amenability of the judgmentto attack in the collateral proceedings. If the court has an inherentlack of jurisdiction, its decision is open to attack as a nullity.While deciding the issues of the bar created by the law oflimitation, resjudicata, the Court must have jurisdiction to decidethese issues. Under the provisions of section 9A and Order XIVRule 2, it is open to decide preliminary issues if it is purely aquestion of law not a mixed question of law and fact by recordingevidence. The decision in Foreshore Cooperative Housing SocietyLimited (supra) cannot be said to be laying down the lawcorrectly. We have considered the decisions referred to therein,they are in different contexts. The decision of the Full Bench ofthe High Court of Bombay in Meher Singh (supra) holding thatunder section 9A the issue to try a suit/jurisdiction can be decidedby recording evidence if required and by proper adjudication, isoverruled. We hold that the decision in Kamlakar Shantaram(supra) has been correctly decided and cannot be said to be perincuriam, as held in Foreshore Cooperative Housing SocietyLimited (supra).

77. (b) Section 2 of Maharashtra Second Amendment Act, 2018which provides that where consideration of preliminary issueframed under section 9A is pending on the date ofcommencement of the CPC, the said issue shall be decided anddisposed of by the court under section 9A as if the provision undersection 9A has not been deleted, does not change the legalscenario as to what can be decided as a preliminary issue undersection 9A, CPC, as applicable in Maharashtra. The saving A

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Acreated by the provision of section 2 where consideration ofpreliminary issue framed under section 9A is pending on the dateof commencement of the Code of Civil Procedure (MaharashtraAmendment) Act, 2018, can be decided only if its comes withinthe parameters as found by us on the interpretation of section9A. We reiterate that no issue can be decided only under theBguise of the provision that it has been framed under Section 9Aand was pending consideration on the date of commencementof the (Maharashtra Amendment) Act, 2018. The reference isanswered accordingly. [underlining added]

Let the matters be placed before an appropriate Bench forCconsideration on merits”.

19. In view of judgment passed by the Hon’ble Three JudgesBench reported in 2019 (13) SCALE 620 – Nusli Veville Wadia vs.Ivory Properties & Ors., the question of limitation will have to beconsidered along with other issues that would arise for adjudication inDSuit No.2410 of 2008 filed by respondent No.1 (MHL). Certainobservations have been made by the learned Single Judge as well asby the Division Bench on the merits of the matter and the contentionof the parties. In our view, the trial in the Suit No. IV-2410 of 2008has to be proceeded independently on its own merits. In view of theEjudgment by the Three Judges Bench, the decision rendered by thelearned Single Judge as well as by the Division Bench on the issue oflimitation by considering that as preliminary issue would become nullityand the matter would have to proceed afresh.

20. The appeal is disposed of with the following directions andFobservations:

(i) The order dated 16.03.2017 passed by the learned SingleJudge in Suit No. 2410 of 2008 and the order dated08.08.2019 (corrected on 19.09.2019) passed by theDivision Bench in Commercial Appeal No. 148 of 2017Garising out of Suit No. 2410 of 2008 are set aside.

(ii) Suit No.2410 of 2008 filed by respondent No.1 shallproceed afresh from the stage of framing of the issues.The question of limitation to be determined along with otherissues arising for consideration. The suit shall be proceededHwithout being influenced by any of the views expressed by the learned Single Judge as well as by the DivisionBench of the High Court in the impugned judgment.

(iii) Respondent No.1 is at liberty to request the Court to takeup their pending applications and the learned Court shallconsider them on their own merits.

(iv) We request the learned Single Judge to take up the SuitNo.2410 of 2008 filed by respondent No.1 (MHL) andproceed with the same expeditiously and dispose the samepreferably within a period of 18 months.

(v) We make it clear that we have not expressed any opinionon the merits of the matter.

SPECIAL LEAVE PETITION (CIVIL) NO. 26642 OF2019

Consequently, in view of the order passed in Civil Appeal arisingout of SLP(C)No.25341 of 2019, this special leave petition is alsodisposed of.

Divya Pandey

Matters disposed of.

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