Showing posts from June, 2012

whether Section 621-A is mandatory or whether the said provision confers a discretion on the CLB to refuse to compound the offences where the penalty prescribed, for the offences alleged to have been committed, is merely a fine as, even if this Court were to proceed on the premise that the CLB has the discretion to refuse to compound the offences, such exercise of discretion can only be for just and valid reasons, and refusal to compound the offences cannot be at the mere whim and fancy of the CLB or for reasons which are wholly extraneous or irrelevant to the aspects required to be taken into consideration while exercising such discretion. As noted hereinabove C.C.Nos.394 and 400 of 2009 have not been clubbed with the other five cases (C.C.Nos.395 to 399 of 2009) nor has evidence been recorded in all these seven cases together. All these cases have been dealt with separately, though they are said to be listed on the same day. The letters to which Sri S.Ravi, Learned Senior Counsel, has drawn the attention of this Court to does indicate that the Ministry of Corporate Affairs of the Union of India, the CBI and the SFIO itself had no reason to suspect the involvement of Sri G.Jayaraman, Company Secretary in any of the offences in which the Chairman and Managing Director and other Directors of Satyam Computer Services Limited are said to be involved in. While it may not be appropriate for this Court to examine the authenticity of those letters, which have been relied upon by the appellants, (since these are matters which the CLB is required to examine while exercising its discretion under Section 621-A), it cannot, however, be lost sight of that, in one of the letters addressed by the CBI, it is stated that Sri G.Jayaraman had appeared on behalf of the prosecution, and was examined as a prosecution witness. The submission of Sri S.Ravi, Learned Senior Counsel, that the erstwhile Chairman and Managing Director, and the other erstwhile Directors of the company, are no longer involved in the company’s management; and the company itself was a victim of the fraud played by them, cannot be said to be without merit. These are relevant factors which the CLB should take into consideration while exercising its discretion to compound/not to compound the offences in exercise of its jurisdiction under Section 621A of the Act. Though Section 621A confers discretion on the CLB to also determine the quantum of the compounding fee, Sri S.Ravi, Learned Senior Counsel, would fairly state that the appellant company was ready and willing, if so ordered by the CLB, to pay the maximum amount prescribed under Section 621-A of the Act for compounding of such offences. The impugned orders of the CLB, in C.A.Nos.233 and 234 of 2010 dated 16.12.2011, are set aside, and the said applications are remanded back to the CLB for its consideration afresh in accordance with law. Since the trial in C.C.No.394 and 400 of 2009 is said to be at an advanced stage, it is but appropriate that the CLB decides C.A.Nos.233 and 234 of 2010 at the earliest, in any event not later than four weeks from the date of receipt of a copy of this order. It is made clear that this Court has not expressed any opinion on merits. It has merely noted the contentions, and has broadly indicated the aspects which the CLB should bear in mind while exercising its discretion whether or not to permit compounding of the offences alleged against the appellants in C.C.Nos.394 and 400 of 2009. Both the C.As. are, accordingly, disposed of at the stage of admission. ____________


ORDER:           Both these appeals, under Section 10F of the Companies Act, 1956, are filed by the appellants herein aggrieved by the order of the Company Law Board (hereinafter called the CLB) in C.A.Nos.233 and 234 of 2010 dated 16.12.2011.           The aforesaid two applications were filed before the CLB under Section 621A of the Companies Act, consequent upon a complaint being filed by the department of Serious Fraud Investigation for Economic Offences, Hyderabad, which were subsequently numbered as Calendar Case Nos.394 and 400 of 2009 before the Court of the Special Judge for Economic Offences at Hyderabad.  While C.C.No.400 of 2009 related to violation of the provisions of Section 220(1) read with Section 162 of the Companies Act, C.C.No.394 of 2009 was for violation of the provisions of Section 309 of the Companies Act read with Section 629-A thereof.  The punishments specified under the Companies Act …

Suit for prohibitory injunction - Relating to vacant land --Claim for possession based on title - Title of plaintiff disputed - Various complicated questions arose for putting forth a case of title - Suit decreed by trial court - Reversed by first appellate court - High Court in second appeal after recording finding of facts restored the order of trial court - On appeal, held: In the facts and circumstances of the case, the questions which arose for consideration could be decided only in a suit for declaration and consequential reliefs and not in a suit for injunction simplicitor - In absence of prayer for declaration of title, issue regarding title, pleadings required for declaration of title, the parties cannot be said to have an opportunity to have full fledged adjudication regarding title - High Court exceeded its jurisdiction u/s 100 CPC in re-examining questions of fact, by going into the questions which were not pleaded and not in issue, and by formulating questions of law which did not arise in the second appeal - Code of Civil Procedure, 1908 - s.100. Suit for prohibitory injunction - Relating to immovable Property - Scope of - Held: The prayer for injunction will be decided with reference to the finding on possession - In cases of vacant land, it will be necessary to examine and determine the title as a prelude for deciding the de jure possession - If the title is clear and simple, the court may decide the issue of title - But, if a cloud is raised over plaintiff's title, a suit for declaration and possession, with or without a consequential injunction, is the remedy. Respondent/plaintiffs 1 and 2 filed a suit for permanent injunction against the appellant-defendant. They pleaded that they were owners in possession of the suit properties (vacant land) under sale deeds from `R' (their vendor). They alleged that the defendant interfered with their possession. Defendant in his Written Statement stated that the suit property was purchased by him from the brother of the plaintiffs' vendor under a registered sale deed and was put in possession of the property by his vendor and it were the plaintiffs who tried to interfere with his possession. Plaintiffs led evidence to the effect that defendant's vendor had gifted the suit property to his sister in the year 1961 by way of `Pasupu Kumkumam'. Defendant and his vendor denied the plea of gift. Trial Court decreed the suit. First Appellate Court allowed the appeal of the defendant holding that defendant was in possession of the property and the plaintiff had not made out either title or possession over it; that mere suit for injunction was not maintainable and the suit should have be amended to one for declaration and injunction. High Court in second appeal, examining the evidence in detail, recorded the findings of facts and restored the judgment and decree of trial court. It held that plaintiffs had established their title in respect of suit land and drew an inference that possession was presumed to be with them by applying the principle of possession follows title; and that it was not necessary for the plaintiffs to sue for declaration of title as the question of title could be examined incidental to the question of possession. Hence the present appeal. The questions which arose for consideration before this Court were regarding the scope of a suit for prohibitory injunction relating to immovable property; whether plaintiffs were required to file a suit for declaration of title and injunction; and whether the High Court, in a second appeal , could examine the factual question of title which was not the subject matter of any issue and based on a finding thereon, reverse the decision of the first appellate court. Allowing the appeal, the Court HELD: 1.1 Where a cloud is raised over plaintiff's title and he does not have possession, a suit for declaration and possession, with or without a consequential injunction, is the remedy. Where the plaintiff's title is not in dispute or under a cloud, but he is out of possession, he has to sue for possession with a consequential injunction. Where there is merely an interference with plaintiff's lawful possession or threat of dispossession, it is sufficient to sue for an injunction simpliciter. [Para 17] [349-G; 350-A] 1.2 A cloud is said to raise over a person's title, when some apparent defect in his title to a property, or when some prima facie right of a third party over it, is made out or shown. An action for declaration, is the remedy to remove the cloud on the title to the property. On the other hand, where the plaintiff has clear title supported by documents, if a trespasser without any claim to title or an interloper without any apparent title, merely denies the plaintiff's title, it does not amount to raising a cloud over the title of the plaintiff and it will not be necessary for the plaintiff to sue for declaration and a suit for injunction may be sufficient. Where the plaintiff, believing that defendant is only a trespasser or a wrongful claimant without title, files a mere suit for injunction, and in such a suit, the defendant discloses in his defence the details of the right or title claimed by him, which raises a serious dispute or cloud over plaintiff's title, then there is a need for the plaintiff, to amend the plaint and convert the suit into one for declaration. Alternatively, he may withdraw the suit for bare injunction, with permission of the court to file a comprehensive suit for declaration and injunction. He may file the suit for declaration with consequential relief, even after the suit for injunction is dismissed, where the suit raised only the issue of possession and not any issue of title. [Para 12] [345-G; 346-A, B, C, D] 1.3 As a suit for injunction simpliciter is concerned only with possession, normally the issue of title will not be directly and substantially in issue. The prayer for injunction will be decided with reference to the finding on possession. In cases of vacant land, the principle is that possession follows title. If two persons claim to be in possession of a vacant site, one who is able to establish title thereto will be considered to be in possession, as against the person who is not able to establish title. This means that even though a suit relating to a vacant site is for a mere injunction and the issue is one of possession, it will be necessary to examine and determine the title as a prelude for deciding the de jure possession. In such a situation, where the title is clear and simple, the court may venture a decision on the issue of title, so as to decide the question of de jure possession even though the suit is for a mere injunction. But where the issue of title involves complicated or complex questions of fact and law, or where court feels that parties had not proceeded on the basis that title was in issue, the court should not decide the issue of title in a suit for injunction. The proper course is to relegate the plaintiff to the remedy of a full-fledged suit for declaration and consequential reliefs. [Paras 14 and 17] [346-G; 347-A, B, C; 350-A, B] 1.4 However, a finding on title cannot be recorded in a suit for injunction, unless there are necessary pleadings and appropriate issue regarding title (either specific or implied). Where the averments regarding title are absent in a plaint and where there is no issue relating to title, the court will not investigate or examine or render a finding on a question of title, in a suit for injunction. Even where there are necessary pleadings and issue, if the matter involves complicated questions of fact and law relating to title, the court will relegate the parties to the remedy by way of comprehensive suit for declaration of title, instead of deciding the issue in a suit for mere injunction. [Para 17] [350-C, D, E] 1.5 Where there are necessary pleadings regarding title, and appropriate issue relating to title on which parties lead evidence, if the matter involved is simple and straight-forward, the court may decide upon the issue regarding title, even in a suit for injunction. But such cases, are the exception to the normal rule that question of title will not be decided in suits for injunction. But persons having clear title and possession suing for injunction, should not be driven to the costlier and more cumbersome remedy of a suit for declaration, merely because some meddler vexatiously or wrongfully makes a claim or tries to encroach upon his property. The court should use its discretion carefully to identify cases where it will enquire into title and cases where it will refer to plaintiff to a more comprehensive declaratory suit, depending upon the facts of the case. [Para 17] [350-F, G, H; 351-A] Vanagiri Sri Selliamman Ayyanar Uthirasomasundareswarar Temple vs. Rajanga Asari - AIR 1965 Mad. 355; Sulochana Amma vs. Narayanan Nair - 1994 (2) SCC 14; Annaimuthu Thevar v. Alagammal - 2005 (6) SCC 202; Sajjadanashin Sayed Md. Vs. Musa Dadabhai Ummer - 2000 (3) SCC 350- referred to. Corpus Juris Secundum (Vol.50, para 735, p.229) - referred to. 2.1 In the present case, the suit sites were vacant plots. Both sides admitted that defendant's vendor was the original owner and that entire property stood in his name. The defendant claims title through his vendor. The plaintiffs claim title through their vendor, who neither has any deed of title nor any document in support of title or possession. Admittedly, there was no mutation in her name. This means that plaintiffs claim title through someone who claimed to be owner in pursuance of an oral gift in the year 1961 without the property being mutated in her name, whereas the defendant claims title from the person who was admittedly the original owner who was registered as owner in the revenue records. Necessarily, therefore, prima facie it has to be held that defendant had made out possession following title. [Para 20] [352-B, C, D, E] 2.2 The plaintiffs and their witnesses gave evidence to the effect that defendant's vendor represented that his sister (appellants' vendor) was the owner of the plot and negotiated for sale of the several portions thereof in favour of plaintiffs and PW3, and that defendant's vendor had attested the sale deeds in their favour and identified his sister as the vendor-executant before the Sub-Registrar, at the time of registration of the sale deeds. But defendant's vendor in his evidence denied having made the oral gift or having attested the sale deeds in favour of plaintiffs. He also denied having identified his sister at the time of registration of the sale deeds. Whether evidence of appellants' vendor and other plaintiffs' witnesses should be believed or whether evidence of defendant's vendor should be believed on the question of title, can be examined only when there are necessary pleadings and an issue regarding title. Further, where title of plaintiffs is disputed and claim for possession is purely based on title, and the plaintiffs have to rely on various principles of law relating to ostensible ownership and section 41 of Transfer of Property Act, validity of a oral gift by way of `Pasupu Kumkum' under Hindu Law, estoppel and acquiescence, to put forth a case of title, such complicated questions could properly be examined only in a title suit, that is a suit for declaration and consequential reliefs, and not in a suit for an injunction simpliciter. [Para 21] [352-E, F, G, H; 353-A, B, C] 3.1 High Court exceeded its jurisdiction under Section 100 CPC, firstly in re-examining questions of fact, secondly by going into the questions which were not pleaded and which were not the subject matter of any issue, thirdly by formulating questions of law which did not arise in the second appeal, and lastly, by interfering with the well reasoned judgment of the first appellate court which held that the plaintiffs ought to have filed a suit for declaration. [Para 27] [355-G; 356-A, B] 3.2 The High Court, in the absence of pleadings and issues, formulated in a second appeal arising from a suit for bare injunction, questions of law unrelated to the pleadings and issues, presumably because some evidence was led and some arguments were advanced on those aspects. The only averment in the plaint that plaintiffs were the owners of the suit property having purchased the same under sale deeds, did not enable the court, much less a High Court in second appeal, to hold a roving enquiry into an oral gift and its validity or validation of ostensible title under section 41 of Transfer of Property Act. No amount of evidence or arguments can be looked into or considered in the absence of pleadings and issues. [Para 25] [355-A, B, C] 3.3 The High Court while reversing the decision of the first appellate court, examined various aspects relating to title and recorded findings relating to title. It held that gifting a property to a daughter or sister by way of `Pasupu Kumkumam', could be done orally and did not require a registered instrument. Even though there was no independence evidence of oral gift except the assertion to appellants' vendor (which was denied by defendant's vendor), the High Court, held that there was an oral gift in her favour. It also accepted the evidence of PW3 and PW5 and plaintiffs, that defendant's vendor negotiated for the sale of the plots representing that they sbelonged to his sister; and that he attested the sale deeds as a witness and identified his sister as the executant before the Sub-Registrar and therefore, Section 41 of Transfer of Property Act came to the aid of plaintiffs and defendant's vendor was estopped from denying the title of his sister. The High Court in a second appeal arising from a suit for an injunction, could not have recorded such findings, in the absence of pleadings and issue regarding title. [Para 26] [355-D, E, F, G] 3.4 Though driving the plaintiffs to a fresh round of litigation after three decades would cause hardship to them. But the scope of civil cases are circumscribed by the limitations placed by the rules of pleadings, nature of relief claimed and the court fee paid. The predicament of plaintiffs, was brought upon themselves, by failing to convert the suit to one for declaration even when the written statement was filed, and by not seeking amendment of issues to include an issue on the question of title. In the absence of a prayer of declaration of title and an issue regarding title, let alone the pleadings required for a declaration of title, the parties cannot be said to have an opportunity to have a full-fledged adjudication regarding title. [Para 28] [356-B, C, D] D. Mahesh Babu for the Appellant. K. Amareswari, P. Venkat Reddy and Guntur Prabhakar for the Respondents. 2008 AIR 2033, 2008(5 )SCR331 , 2008(4 )SCC594 , 2008(4 )SCALE718 ,

Appeal (civil)  6191 of 2001

Anathula Sudhakar

P. Buchi Reddy (Dead) By LRs & Ors

DATE OF JUDGMENT: 25/03/2008

R. V. Raveendran & P. Sathasivam




This appeal by special leave is by the defendant in a suit for
permanent injunction. Puli Chandra Reddy and Puli Buchi Reddy were the
plaintiffs in the said suit. Both are now no more. The Legal Representatives
of Puli Chandra Reddy are Respondents 2 to 5 and Legal Representatives of
Puli Buchi Reddy are Respondent 1 (i) to (iii). The suit related to two sites
bearing no. 13/776/B and 13/776/C  measuring 110 sq. yards and 187 sq.
yards in Matwada, Warangal town, together referred to as the 'suit property'.

2.Plaintiffs 1 and 2 claimed to be the respective owners in possession of
the said two sites having purchased them under two registered sale deeds
dated 9.12.1968 (Exs.A1 and A2) from Rukminibai. Th…

At any rate, the primary question is whether the petitioners can be released from the bank guarantee? 9. As already pointed out, the bank guarantee, in fact, stood expired on 03-07-2003. This petition more would appear to be for the purpose of clarity. The learned counsel for the petitioners submitted that the bank has not been releasing the money deposited by the petitioners on the ground that the bank guarantee has still been in force. I, therefore, consider it appropriate to release the petitioners from the bank guarantee where in fact, the bank guarantee stood expired on 03-07-2003 and also where the main insolvency petition stood dismissed on 19-10-2003 itself. 10. Accordingly, this Civil Revision Petition is ordered. The petitioners are released from the bank guarantee. No costs.

AT HYDERABAD(Special Original Jurisdiction)
C.R.P.NO.5131 OF 2006
R.Srinivas and others                      .. Petitioners
Pulamati Bai and others ..Respondents


          The learned III Additional District Judge, Warangal, through the impugned order, declined to release the bank guarantee offered by the petitioners therein.  Aggrieved by the same, the petitioners preferred the present revision.
2.       The respondents were served with notices.  None other respondents appeared.  The case is proceeded in the absence of the respondents.
3.       One Bajjuri Nagaraj, who is the second respondent herein, laid I.P.No.7 of 2001 on the file of the III Additional District Judge, Warangal to adjudicate the first respondent and perhaps the petitioners also as insolvents.  The petitioners and the first respondent were partners in M/s.Manikanta Modern Rice Mills.  The second responden…

“53. Avoidance of voluntary transfer:-- Any transfer of property not being a transfer made before and in consideration of marriage or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration shall, if the transferor is adjudged insolvent on a petition presented within two years after the date of the transfer, be voidable as against the receiver and may be annulled by the Court.” 18. As per the impugned order of the trial Court, the trial Court went beyond its scope and proceeded with the matter under Section 53 of the Act which, in my view, is erroneous. The lower Appellate court also did not clarify the same, but carried away erroneously while confirming the orders of the trial Court. At this juncture, it is pertinent to note that the petitioners in their petition clearly asserted that they will take necessary steps to get the sale deed set aside under Section 53 of the Act after the first respondent is adjudicated as insolvent. Therefore, by asserting the same, the petitioners are aware that they have to take necessary steps under Section 53 of the Act for vesting the property with the official receiver after the first respondent is adjudicated as insolvent. Admittedly the I.P. is filed under Sections 7 to 9 of the Act. But the trial Court did not look into the same and extended the relief beyond the scope of the petition and granted the relief to administer the properties under Section 53 of the Act which mandates the filing of the petition for annulment of the transaction. Therefore, in any view of the matter, the finding of the Courts below granting the relief without filing the petition under Section 53 of the Act, is not sustainable and the same is liable to be set aside. 19. However, as observed above, the finding of the Courts below adjudicating the first respondent as insolvent is sustainable and the same is, accordingly, confirmed. 20. Therefore, the impugned orders of the Courts below to the extent of directing the official receiver to administer ‘A’ schedule property and to distribute the sale proceeds among the petitioners is not sustainable, and it is accordingly, set aside. However, it is made clear that the petitioners in the I.P. may take appropriate steps, if any, against the respondents therein, if they are otherwise entitled as per law. 21. With the above modification of the impugned order, the Civil Revision Petition is disposed of. No costs.

HON’BLE SRI JUSTICE K.S. APPA RAO C.R.P.No.4957 of 2006 ORDER:         This Civil Revision Petition is filed against the order, dated 24-03-2006 passed in A.S.No.81 of 2004 on the file of the Principal District Judge, Eluru, West Godavari District, confirming the order dated 27-09-2001 passed in I.P.No.13 of 2000 on the file of the Senior Civil Judge, Tadepalligudem.
The petitioner herein is respondent No.2 and the respondents are the petitioners in I.P.No.13 of 2000.  For convenience sake, the parties hereinafter will be referred to as they are arrayed in
the I.P.         2.     The brief facts of the case, which are necessary for disposal of the present Civil Revision Petition, are as follows:         I.P.No.13 of 2010 was filed by the petitioners (creditors) under Sections 7 to 9 of the Provincial Insolvency Act, 1920 (for short ‘the Act’) to adjudicate the first respondent as an insolvent.  The allegations in the petition are that the first respondent borrowed an amount of Rs.5,000/- fro…