caselaws

Supreme Court of India
Shyam Madam Mohan Ruia vs Messer Holdings Limited on 13 December, 2019Author: R. Banumathi

Bench: R. Banumathi, A.S. Bopanna

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REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9429 OF 2019
(@ SLP (CIVIL) NO. 25341 OF 2019)

SHYAM MADAM MOHAN RUIA & ORS. …APPELLANT(S)

VERSUS

MESSER HOLDINGS LIMITED & ORS. …RESPONDENT(S)

WITH

SLP (CIVIL) NO. 26642 OF 2019

J U D G M E N T

R. BANUMATHI, J.

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

2. Being aggrieved by the order dated 08.08.2019 as corrected by

order dated 19.09.2019 passed by the Division Bench of the High

Court of Bombay in Commercial Appeal No.148 of 2017 in Suit No.2410

of 2008 in and by which the Division Bench has reversed the order

of the Learned Single Judge dated 16.03.2017 by holding that the

Suit No.2410 of 2008 filed by respondent No.1- MHL is within the

period of limitation, the appellants are before this Court in this

appeal.

3. On the first date of hearing, Mr. Fali S. Nariman, learned

senior counsel appearing for the appellants-Ruias sought permission
Signature Not Verified

Digitally signed by
MADHU BALA
Date: 2019.12.19
to amend the synopsis and also grounds of appeal. By the order
12:48:57 IST
Reason:

dated 13.11.2019, the same was permitted.
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4. When the matter came up for admission, Ms. Aruna Gupta,

learned counsel for respondent No.1 who is contesting respondent,

has taken notice. The first respondent was represented by learned

Senior counsel Mr. Dhurv Mehta.

5. For hearing, the matter was adjourned to number of dates and

taken up on 13.12.2019. We have heard Mr. Fali S. Nariman, Mr. S.

Ganesh and Dr. A.M. Singhvi, learned senior counsel appearing on

behalf of the appellants as well as Mr. Dhruv Mehta, learned senior

counsel 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:

Appellants – Ruias; Respondent No.1 – Messer Holdings Limited

(MHL); Respondent No.2 – Bombay Oxygen Investments Ltd. (BOIL);

Respondent No.3 – Messers Giresheim GmbH (MGG) and Respondent No.4

– Goyal MG Gases Private Limited (GGL).

7. The contesting parties have had several rounds of

litigations:- (i) Civil Suit No.I – 1810 of 1998 filed by

respondent no. 4 – GGL against respondent No.3 (MGG); (2) Suit

No.II – 2499 of 1999 filed by the appellants-Ruias against

respondent No.3(MGG) and respondent No.4(GGL); (3) Suit No.III –

509 of 2001 filed by the appellants-Ruias against respondent No.4

(GGL) and respondent No.3(MGG) and (4) Suit No.IV – 2410 of 2008

filed by respondent No.1(MHL) with which we are concerned.

8. In Suit No.III – 509 of 2001, Ruias and MGG (respondent No.3)

entered into a settlement on 05.12.2002 wherein MGG (respondent

No.3) is purported to have transferred 75,001 shares of
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BOIL(respondent No.2) and Ruias is purported to have agreed to pay

US$ 154.642 etc. for those 75,001 shares of BOIL (respondent No.2).

It is stated that parties thereon viz Ruias(appellant) and

MGG(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 respondent

No.1(MHL) and respondent No.4(GGL).

9. Respondent No.1-MHL filed the Suit No.IV – 2410 of 2008 to

cancel the said Settlement Agreement dated 05.12.2002 under which

75,001 shares of respondent No.2(BOIL) has been transferred to the

appellant(s)- Ruias by respondent No.3 (MGG). In Suit No.IV, MHL

(respondent No.1) inter alia prayed for injunction against the

development agreement dated 04.02.2008 granting development rights

to one Company by name HDIL and for declaration of MHL-respondent

No.1’s ownership of 75,001 shares of BOIL (respondent No.2) and

other reliefs.

10. The dispute between the parties had also travelled up to

Supreme Court and this Court decided the matter in the case of

Nugen Machineries Limited v. Minal A. Goswami & Anr. reported in

(2016) 11 SCC 484. Considering the contentions of the parties, and

observing that rights of parties are to be established in Suit No.

IV, in paras (38), (44) and (45), the Supreme Court held as under:-

“38. The existence of title in MGG in the said
75,001 shares cannot be disputed by either GGL
or MHL, at least, till the date of the consent
award i.e. 21-9-2000 because GGL and MHL’s claim
for title over the said shares flows from MGG’s
prior title and the subsequent alleged transfer
pursuant to the consent award. In such a case,
because of MGG’s purported transfer of the title
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in the 75,001 shares to the Ruias under the
settlement dated 5-12-2002, the Ruias should
normally be entitled to have their names entered
into the records of BOCL as holders of the said
shares by following appropriate procedure. If
either GGL or MHL is objecting to the right of
MGG to effect the said transfer in favour of the
Ruias, they must establish a superior title (to
MGG) in the said shares. It goes without saying
that it can be done only in some legal action
initiated by either GGL or MHL or both jointly.
But they cannot seek a declaration of their
title in Suits II and III filed by the Ruias. In
a bid to establish their title MHL filed Suit
IV19. The right of MHL, if any, will have 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 MHL can object to the
transfer of the shares in favour of the Ruias
pursuant to the settlement dated 5-12-2002.
……….
44. However, in the absence of any legally
established title as on today to the
abovementioned shares in any party other than
MGG, whether the Ruias would be entitled,
pursuant to the settlement dated 5-12-2002, to
have their names entered into the registers of
BOCL as holders of the said shares is a matter
for the Ruias to explore. However, such an
entitlement, if any, should be subject to the
result of Suit IV.

45. We make it clear that we are not deciding by
this order, the existence or otherwise of any
right or its enforceability in the 75,001 shares
of BOCL in favour of either MHL or GGL. It is
open to them to establish their right in Suit
IV. The defendants in Suit IV are at liberty to
raise every defence available in law and 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 (Maharashtra

Amendment) raising preliminary issue of limitation by contending

that the suit prayers (q), (r), (s), (t), (u) and (v) in respect of
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claiming ownership over the 75,001 shares of BOIL (respondent No.2)

by MHL (respondent No.1) is barred by limitation as the Settlement

Agreement between the appellants – Ruias was entered into on

05.12.2002 and the Suit No. IV- 2410 of 2008 filed by respondent

No.1(MHL) has been filed in the year 2008 which is clearly barred

by limitation. Respondent No.1(MHL) contested the said affidavit by

contending that MHL (respondent No.1) was kept in dark about the

settlement dated 05.12.2002 between the Ruias and MGG (respondent

No.3) and that the same came to their knowledge only on 14.10.2005

when they were handed over the copy of the settlement agreement

dated 05.12.2002. Respondent No.1 further contended that the suit

filed by respondent No.1 was within the period of limitation as

they came to know about the Settlement only on 14.10.2005.

12. By the order dated 16.03.2017, the learned Single Judge

allowed the petition filed by the appellants-Ruias by holding that

respondent No.1 (MHL) is a stranger to the Settlement dated

05.12.2002. Learned Single Judge held that the cause of action

arose to respondent No.1 (MHL) way back on 24.08.2002 when

respondent No.1-MHL was impleaded as defendant in Suit No.2499 of

1999 in which MHL came to be impleaded as the defendant as per

Chamber Summons 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 title of the shares in dispute even in the year 2002 and

the receipt of copy of the settlement agreement dated 05.12.2002 on

14.10.2015 was immaterial. It was held that respondent No.1 (MHL)
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approached the Court only in the year 2008 by filing the Suit

No.2410 of 2008 and therefore, the suit filed by respondent No.1

(MHL) is barred by limitation.

13. Being aggrieved by the order of the learned Single Judge,

respondent No.1 (MHL) filed Commercial Appeal before the Division

Bench of Bombay High Court. The Division Bench vide its impugned

order set aside the order passed by the learned Single Judge by

holding that the right to sue occurred to respondent No.1 on

14.10.2005 when the copy of the Settlement Agreement dated

05.12.2002 between respondent No.3 (MGG) and the appellants-Ruias

was supplied to respondent No.1(MHL). The Division Bench held that

since respondent No.1 had knowledge of the Settlement only on

14.10.2005, the suit filed by MHL-respondent No.1 in the year 2008

is well within the period of three years from the date of knowledge

of the Agreement and, therefore, the suit is within the period of

limitation. The Division Bench directed the suit to proceed in

respect of all other prayers made in the suit. Being aggrieved, the

appellants-Ruias have preferred this appeal.

14. We have heard the submissions of learned Senior counsel

appearing for the appellant and learned Senior counsel appearing

for the first respondent. We have considered the impugned judgment

and perused the materials on record.

15. Though, various contentions have been raised on the merits of

the matter, in view of the change in the law and deletion of

Section 9A of the Code (in its application to the State of

Maharashtra) and the judgment of the Supreme Court in Nusli Veville
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Wadia v. Ivory Properties & Ors. (2019) 13 SCALE 620, we are of the

opinion that it is not necessary to consider the merits of the

contentions. Suffice to refer to the change in the law and the

interpretation given by this Court.

16. The State of Maharashtra inserted Section 9A to the Code of

Civil Procedure vide Code of Civil Procedure (Maharashtra

Amendment) Act, 1977. Section 9A provided that where an application

has been made for granting or setting aside an order granting

interim relief in a suit, if either of the party challenged the

jurisdiction of the Court to entertain the suit, the Court would

have to decide the preliminary 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 Section 9A of the Code (in its

application to the State of Maharashtra) was deleted by Section 3

of the Ordinance. The above Ordinance was replaced by the Code of

Civil Procedure (Maharashtra Amendment) Act, 2018 on 29.10.2018. It

was provided that the preliminary issues framed under Section 9A

shall be treated as an issue under Order XIV CPC and be decided by

the courts with 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

saving clause. Section 2 of the Amendment Act provided that if the

court has ordered to decide an issue as a preliminary issue before

the date of deletion of Section 9A, it shall be decided by the

court as a preliminary issue.
8

17. After repeal of Section 9A, because of divergent views, in

Foreshore Cooperative Housing Society Limited v. Praveen D. Desai

(Dead) Through Legal Representatives and others (2015) 6 SCC 412

and Kamalakar Eknath Salunkhe v. Baburav Vishnu Javalkar and Ors.

(2015) 7 SCC 321, Section 9A as it stood came up for consideration

before the three Judges Bench of this Court in (2019) 13 SCALE

620(supra). The divergent views which led to consideration by the

larger Bench is as under:

“The reference has been made by a Division Bench
of this Court vide order dated 17.8.2015,
doubting the correctness of the decision of this
Court in Foreshore Cooperative Housing Society
Limited v. Praveen D. Desai (Dead) through Legal
Representatives and others, (2015) 6 SCC 412 with
respect to the interpretation provisions
contained in Section 9A of the Code of Civil
Procedure, 1908 (for short, ‘the CPC’) as
inserted by the Maharashtra Amendment Act, 1977.
It has been opined that the word “jurisdiction”
under Section 9A is wide enough to include the
issue of limitation as the expression has been
used in the broader sense and is not restricted
to conventional definition under pecuniary or
territorial jurisdiction, the decision in
Kamalakar Eknath Salunkhe v. Baburav Vishnu
Javalkar and Ors., (2015) 7 SCC 321, taking
contrary view, is per incuriam in view of the
larger Bench decision in Pandurang Dhondi
Chougule and Ors. v. Maruti Hari Jadhav and Ors,
AIR 1966 SC 153 as well as other 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 considered opinion that the jurisdiction to
entertain has different connotation from the
jurisdictional error committed in exercise
thereof. There is a difference between the
existence of jurisdiction and the exercise of
jurisdiction. The expression jurisdiction has
been used in CPC at several places in different
contexts and takes colour from the context in
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which it has been used. The existence of
jurisdiction is reflected by the fact of
amenability of the judgment to attack in the
collateral proceedings. If the court has an
inherent lack of jurisdiction, its decision is
open to attack as a nullity. While deciding the
issues of the bar created by the law of
limitation, resjudicata, the Court must have
jurisdiction to decide these issues. Under the
provisions of section 9A and Order XIV Rule 2, it
is open to decide preliminary issues if it is
purely a question of law not a mixed question of
law and fact by recording evidence. The decision
in Foreshore Cooperative Housing Society Limited
(supra) cannot be said to be laying down the law
correctly. We have considered the decisions
referred to therein, they are in different
contexts. The decision of the Full Bench of the
High Court of Bombay in Meher Singh (supra)
holding that under section 9A the issue to try a
suit/jurisdiction can be decided by recording
evidence if required and by proper adjudication,
is overruled. We hold that the decision in
Kamlakar Shantaram (supra) has been correctly
decided and cannot be said to be per incuriam, as
held in Foreshore Cooperative Housing Society
Limited (supra).

77.(b) Section 2 of Maharashtra Second
Amendment Act, 2018 which provides that where
consideration of preliminary issue framed under
section 9A is pending on the date of commencement
of the CPC, the said issue shall be decided and
disposed of by the court under section 9A as if
the provision under section 9A has not been
deleted, does not change the legal scenario as to
what can be decided as a preliminary issue under
section 9A, CPC, as applicable in Maharashtra.
The saving created by the provision of section 2
where consideration of preliminary issue framed
under section 9A is pending on the date of
commencement of the Code of Civil Procedure
(Maharashtra Amendment) Act, 2018, can be decided
only if its comes within the parameters as found
by us on the interpretation of section 9A. We
reiterate that no issue can be decided only under
the guise of the provision that it has been
framed under Section 9A and was pending
consideration on the date of commencement of the
(Maharashtra Amendment) Act, 2018. The reference
is answered accordingly. [underlining added]

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

19. In view of judgment passed by the Hon’ble Three Judges Bench

reported in 2019 (3) SCALE 620 – Nusli Veville Wadia vs. Ivory

Properties & Ors., the question of limitation will have to be

considered along with other issues that would arise for

adjudication in Suit No.2410 of 2008 filed by respondent No.1

(MHL). Certain observations have been made by the learned Single

Judge as well as by the Division Bench on the merits of the matter

and the contention of the parties. In our view, the trial in the

Suit No. IV-2410 of 2008 has to be proceeded independently on its

own merits. In view of the judgment by the Three Judges Bench,

the decision rendered by the learned Single Judge as well as by

the Division Bench on the issue of limitation by considering that

as preliminary issue would become nullity and the matter would

have to proceed afresh.

20. The appeal is disposed of with the following directions and

observations:

(i) The order dated 16.03.2017 passed by the learned

Single Judge in Suit No. 2410 of 2008 and the order

dated 08.08.2019 (corrected on 19.09.2019) passed

by the Division Bench in Commercial Appeal No. 148

of 2017 arising out of Suit No. 2410 of 2008 are

set aside.

(ii) Suit No.2410 of 2008 filed by respondent No.1 shall

proceed afresh from the stage of framing of the
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issues. The question of limitation to be determined

along with other issues arising for consideration.

The suit shall be proceeded without being

influenced by any of the views expressed by the

learned Single Judge as well as by the Division

Bench of the High Court in the impugned judgment.

(iii)Respondent No.1 is at liberty to request the Court

to take up their pending applications and the

learned Court shall consider them on their own

merits.

(iv) We request the learned Single Judge to take up the

Suit No.2410 of 2008 filed by respondent No.1 (MHL)

and proceed with the same expeditiously and dispose

the same preferably within a period of 18 months.

(v) We make it clear that we have not expressed any

opinion on the merits of the matter.

SPECIAL LEAVE PETITION (CIVIL) NO. 26642 OF 2019

Consequently, in view of the order passed in Civil Appeal

arising out of SLP(C)No.25341 of 2019, this special leave petition

is also disposed of.

.………………………………………….J.
[R. BANUMATHI]

………………………………………J.
[A.S. BOPANNA]

NEW DELHI
13TH DECEMBER, 2019

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