Suryanarayana Paper and Boards Pvt. Ltd. and Others Vs. V. Padmakumar and Others - Court Judgment

Excerpt:
company - interim injunction - order 39 rule 3 of code of civil procedure, 1908 - rule 3 contains specific provision that after it is proposed by court to grant injunction without giving notice of application to opposite party court shall record reason for granting injunction - injunction was granted without notice to opposite parties - ad interim injunction set aside. - - ad interim injunction granted till february 9, 1995.'order xxxix, rule 3 of the code of civil procedure, 1908, contains a specific provision that after it is proposed by the court to grant an injunction without giving notice of the application to the opposite party, the court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay. but the same cannot be said in respect of the proviso of rule 3 of order 39. parliament has prescribed a particular procedure for passing of an order of injunction without notice to the other side, under exceptional circumstances. this principle was approved and accepted in well-known cases of taylor v. govind joti chavare [1975] 1 scc 915.'the court then observed (page 338) :as such whenever a court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order to injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed.srinivasan, j. 1. these two revision petitions are against the orders passed by the district munsiff, udumalaipet, in i.a. nos. 266 and 267 of 1995 granting and interim injunction at the time of ordering notice on january 31, 1995. in i.a. no. 266 of 1995, the injunction was for restraining the respondents from taking any steps to delete article 16 of the articles of association of the first respondent company in violation of the rights of the plaintiffs under the said articles. in i.a. no. 267 of 1995, the injunction was for restraining respondents nos. 2 to 6 from transferring the shares held by them in the first respondent company to any persons without offering them in the first instance to the plaintiffs and for restraining the company from registering or giving any effect to the transfer of such shares. in both the applications, the orders passed are in the following terms : 'heard and perused. issue notice with copy of documents. ad interim injunction granted till february 9, 1995.' order xxxix, rule 3 of the code of civil procedure, 1908, contains a specific provision that after it is proposed by the court to grant an injunction without giving notice of the application to the opposite party, the court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay. the court is also enjoined to do certain other things. it is not necessary to mention them here. referring to the said provision of the code, i held in rajapalayam industrial and commercial syndicate ltd. v. k.a. vairaprakasam, : air1989mad139 , that if an order of injunction is made without recording the reasons, the injunction would be in violation of the procedure under order xxxix, rule 3 of the code of civil procedure, 1908, and i had deprecated the practice of granting such orders of injunction. the said principle is also laid down by the supreme court in morgan stanley mutual fund v. kartick das : (1994)4scc225 . referring to an earlier judgment in shiv kumar chadha v. municipal corporation of delhi : [1993]3scr522 , the supreme court extracted the following passage from the said judgment (p. 337 of 81 comp cas) : '... the court 'shall record the reasons' why an ex parte order of injunction was being passed in the facts and circumstances of a particular case. in this background, the requirement for recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality. this requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of rule 3, the procedure prescribed under the proviso has been followed. the party which invokes the jurisdiction of the court for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the court about the gravity of the situation and the court has to consider briefly these factors in the ex parte order. we are quite conscious of the fact that there are other statutes which contain similar provisions requiring the court or the authority concerned to record reasons before exercising power vested in them. in respect of some of such provisions it has been held that they are required to be complied with but non-compliance therewith will not vitiate the order so passed. but the same cannot be said in respect of the proviso of rule 3 of order 39. parliament has prescribed a particular procedure for passing of an order of injunction without notice to the other side, under exceptional circumstances. such ex parte orders have far-reaching effect; as such a condition has been imposed that the court must record reasons before passing such order. if it is held that the compliance with the proviso aforesaid is optional shall be a futile exercise and that part of rule 3 will be surplusage for all practical purposes. the provision to rule 3 of order 39 of the code attracts the principle, that if a statue requires things to be done in a particular manner, it should be done in that manner or not at all. this principle was approved and accepted in well-known cases of taylor v. taylor [1875] 1 ch. 426 and nazir ahmed v. emperor, . this court has also expressed the same view in respect of the procedural requirement of the bombay tenancy and agricultural lands act in the case of ramchandra keshav adke v. govind joti chavare [1975] 1 scc 915.' the court then observed (page 338) : 'as such whenever a court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order to injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed.' in the same case, the supreme court has also pointed out that the residence of a company in indian is where its registered office is located and normally cases should be filed only where the registered office of the company is situate. in the present case, admittedly all the defendants in the suit are only in coimbatore. the first defendant is a company, which has its registered office at coimbatore. defendants nos. 2 to 6, who are the shareholders of the first defendant company, are also residing in coimbatore. the plaintiffs are residing at udumalaipet. in paragraph 13 of the plaint it is alleged that the cause of action arose within the jurisdiction of the court at udumalaipet, where the plaintiffs are residing and where they are entitled to receive the notices from the first, defendant company. admittedly, the plaintiffs did not receive any notice from the first defendant company on the date when they filed the suit or when they obtained an order of injunction. in those circumstances, the court at udumalaipet had no jurisdiction whatever to entertain the suit of the plaintiffs. the court ought to have returned the suit for presentation in the proper court even on the allegations contained in the plaint. in spite of the averment in paragraph 13 of the plaint, the district munsif, udumalaipet, chose to receive the plaint and granted an interim order as prayed for by the plaintiffs. for the aforesaid reasons, both the orders of interim injunction are unsustainable and they have to be set aside. these revisions are filed under article 227 of the constitution of india. learned counsel for the plaintiffs submits that the revision petitioners this court when they filed the revisions. according to him, the revisions petitioners entered appearance in the suit on february 9, 1995, and filed counter-affidavit in i.a. nos. 266 and 267 of 1995. it is also by him they prayed for an adjournment and the matter was adjourned to february 14, 1995. it is submitted that from the said date, the matter was adjourned to february 17, 1995 and then to february 20, 1995. it is vehemently contended that the revision petitioners have not brought to the notice of this court the factum of their having entered appearance i the suit and filling a counter for the purpose of contesting the applications. it is also argued that on february 17, 1995, the revision petitioners did not bring to the notice of the trail court or to the plaintiffs that they had obtained an interim order of suspension from this court in these civil revision petitions. it is, therefore, contended that the revision petitioners are guilty of fraud and they should not get any beneficial order from this court. reliance is placed on the judgment of the supreme court in s.p. chengalvaraya naidu v. jagannath, air 1994 sc 863. the following passage is referred to by learned counsel (page 855) : 'the principle of 'finality of litigation' cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. the courts of law are meant for imparting justice between the parties. one who comes to the court, must come with clean hands. we are constrained to say that more often than not, process of the court is being abused. property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life and find the court process a convenient lever to retain the illegal-gains indefinitely. we have to hesitation to say that a person whose case is based on falsehood, has no right to approach the court. he can be summarily thrown out at any stage of the litigation.' the principle enunciated by the supreme court in the above decision will not apply to the present revision petition. the contentions of learned counsel for the respondents are factually disputed by the revision petitioners. according to them, on february 9, 1995, the defendants were ready to get along with the matter and that is why they filed the counter-affidavit on that date. there was no necessity for them to ask for any adjournment of the matter. it is stated by them that the plaintiffs were not willing to get along with the proceedings and they took an adjournment on february 20, 1995. in view of the disputed facts, it is not possible to accept the contention that the revision petitioners had suppressed some facts before this court when they obtained an interim order from this court. the contention that they had not brought to the notice of the trial court or the plaintiffs, the passing of the interim order by this court will not give rise to any argument in these revision petitions to help the respondents to contend that the revision petitions shall be dismissed. it is only a subsequent cause of action, if at all. according to learned counsel, if the plaintiffs had been made aware of the orders of this court on february 16, 1995, they would have taken steps either to get the order of this court vacated immediately or to have filed another suit in the court at coimbatore and obtained interim reliefs. learned counsel for the revision petitioners submits that the copy of the order of this court was not available to them till february 20, 1995, and, therefore, they did not inform the trial court of the same on february 16, 1995. whatever may be the relevant facts in that regard, it is not relevant in the present revision petition. in so far as these revision petitions are concerned, the orders of the trial court passed in the interlocutory applications are wholly unsustainable and without jurisdiction and they have to be set aside. if it is open it law to the respondents to challenge the validity of the general body meeting held on february 20, 1995, of the company, they can resort to such remedies relevant available to them in law. they can urge all the facts which ar relevant and necessary in their case for getting the relief prayed for by them in such a proceeding. in the result, the revision petitions are allowed. the orders passed by the district munsif, udumalaipet, on january 31, 1995, are set aside i.a. nos. 266 and 267 of 1995 are dismissed. no costs.