BABU LAL & ORS.versusM/S VIJAY SOLVEX LTD. & ORS.

                     [2014] 6 S.C.R. 1128


A                       BABU LAL & ORS.
                                  V.
                 M/S VIJAY SOLVEX LTD. & ORS.
                  (Civil Appeal No. 7174 of 2014)
                         AUGUST 4, 2014 .
.s
          [SUDHANSU JYOTI MUKHOPADHAYA AND
                    S.A. BOBDE, JJ.]

        Injunction: Suit for declaration, mandatory injunction,
c rendition of accounts and permanent injunction - Interim order
   of temporary injunction by trial court - Trial court ordered that
   the appellants-applicants and non..:applicants no. 1 to 31 and
   36._to 43 shall not sell/transfer the immovable properties as
   mentioned in Schedule "Ka" to "Cha" and nor shall they
0 create any substantial charge on the said properties and the
   Companies/Partnership firms controlled and run by the
   parties of which details have been given in Schedule "Ka" to
   "Cha" regarding them the audited accounts of income and
   expenditure shall be presented before the Court - High Court
E perused the family settlement and modified the interim order
   and set aside the temporary injunction granted in favour of
   appellants and confirmed that part of the order requiring
   production of audited/unaudited accounts of the companies!
   partnership firms run by the parties - On appeal, held: In the
F instant case, the parties have raised similar pleas which were
   taken before the High Court· - However, while dealing with
 . matter relating to vacation of order qf temporary injunction, it
   was not open for the High Court to give a finding on the main
   issue relating to maintainability of the suit and the family
   settlement reached between the parties - The impugned·
G judgment is set aside - Matter remitted to High Court for fresh
   disposal.

         In a suit for declaration, mandatory injunction,
     rendition of accounts and permanent injunction against
H                             1128
     BABU LAL & ORS. v. VIJAY SOLVEX LTD.             1129


the-defendants/non-applicants, the trial court found that      A
the plaintiffs have made out partially a prima facie case.
The application for temporary injunction against the non-
a p plica nt and the counter temporary injunction
application filed on behalf of the non-applicants were
lpartly allowed. The trial court ordered that the applicants   B
and non-applicants no.1 to 31 and 36 to 43 shall not sell/
transfer the immovable properties as mentioned. in
Schedule "Ka" to "Cha" and nol' shat1 they create any
substantial charge on the said properties and the
Companies/Partnership firms controlled and run by the          c
 parties of which details have been given in Schedule
 "Ka" to "Cha" regarding them the audited accounts of
 income and expenditure half yearly/annually whichever
 is got done in the normal sequence shall be presented
 before the Court. Apart from that the other prayers which     0
 were made by both the parties were rejected.

    Aggrieved, the non-applicants challenged the said
order before the High Court. The High Court perused the.
family settlement between the parties and modified the
interim order and set aside the temporary injunction E
granted in favour of plaintiffs/appellants and confirmed
that part of the order requiring production of audited/
unaudited accounts of the companies/partnership firms
run by the parties. The instant appeal was filed
challenging the order of the High Court.                 F

    Disposing of the appeal and remitting the matter to
High Court for fresh disposal, the Court

    HELD: In the instant case, the parties have raised
similar pleas which were taken before the High Court.          G
However, while dealing with a matter relating to vacation
of order of temporary injunction, it was not open for the
High Court to give a finding on the main issue relating to

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    1130     SUPREME COURT REPORTS            [2014] 6 S.C.R.
                                                             -

A maintainability of the suit and the family settlement
  reached between the parties. The impugned judgment is
  set aside. [Para 7] [1136-F-G]

       Reliance Natural Resources Ltd. v. Reliance Industries
B Ltd. (2010) 7 SCC 1: 2010 (5) SCR 704; Sangram Singh P.
  Gaekwad and Ors. v. Shantadevi P. Gaekwad (D) Through
  LRs. & Ors. (2005) 11 SCC 314: 2005 (1) SCR 624 - referred
    to.

                       Case Law Reference:
c
          2010 (5) SCR 704      Referred to         Para 5

          2005 (1) SCR 624      Referred to         Para 5

  .   CIVIL APPELLATE JURISDICTION : Civil Appeal No.
D 7174 of 2014.

         From the Judgment and Order dated 14.03.2012 in CMA
    No. 2218/2011 passed by the High Court of Rajasthan at
    Jaipur.
E                             WITH

    C.A. No. 7175 of 2014, C.A. No. 7195·7201 of 2014 and C.A.
    No. 7177 of 2014 @ SLP (C) No. 18420/2012.

F       H.P. Raval, Dushyant Dave, Shiv Mangal Sharma, Ramesh
    Singh, Akshat Anand, Abhinandini Sharma, Sitesh Narayan
    Singh, Sharmila Upadhyay for the appellants.

      Dr. Abhishek Manu Singhvi, Amrinder Sharan, Gopal Jain,
  lndu Malhotra, Rakesh Dwivedi, Narendera M. Sharma,
G Abhishek Sharma, J.k. Chaudhary, Shubhra Mishra, Ankur
  Sood, Amol Vyas, Rupesh Kumar, Anjali Chauhan, Shrey
  Kapoor, T. Mahipal, Ajay Choudhary, Ajay Sharma, Tara
  Chandra Sharma, V. Mohana, Sushma Suri, P.N. Pul'i, Milind
  Kumar for the Respondents.
H
      BABU LAL & ORS. v. VIJAY SOLVEX LTD.                    1131


     The Judgment of the Court was delivered by                        A
    SUDHANSU JYOTI MUKHOPADHAYA, J. 1. Leave
granted.

      2. In these appeals the appellants have challenged the
 common judgment and order dated 14th March, 2012 passed               B
 by the High Court of Judicature for Rajasthan, Bench at Jaipur
 in S.B. Civil Misc. Appeal No. 2218 of 2011 etc. By the
 impugned judgment, the High Court modified the interim order
 dated 10th February, 2011 passed by the Additional District
 Judge No.3 Jaipur Metropolitan Magistrate, Jaipur (hereinafter        C
1referred to as, "the Lower Court") in Civil Misc. Case No.36/
i2010, whereby the Lower Court partly allowed the application
1of the appellants-original plaintiffs seeking temporary injunction
 under Order XXXIX Rule 1,2 of CPC. The High Court set aside
 the temporary injunction granted in favour of plaintiffs/appellants   D
 by the Lower Court and confirmed that part of the order
 requiring production of audited/unaudited accounts of the
 companies/partnership firms run by the parties.

     3. The present appeals arise from the following sequence          E
of facts.

     f'laintiffs/appellants-Babulal and others filed a suit for
.declaration, mandatory injunction, rendition of accounts and
 permanent injunction against the defendants/non-applicants.
 The Lower Court noticed that the properties which the plaintiffs      F
 presented in the Schedules "Ka" to "Cha" are basically
 immovable properties, companies and partnership firms
 regarding which both the parties have claimed ownership.
 Taking into consideration that the dispute between the parties
 has arisen after the year 2007 and the cases are pending              G
 before the Company Law Board and if a restraint is not
 imposed upon the transfer of the aforesaid properties it will



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     1132         SUPREME COURT REPORTS               [2014] 6 S.C.R.


A    lead to multiplicity of litigation and the parties will entangle in ·
     litigation, the Lower Court observed that plaintiffs/appellants
     have made out partially a prima facie case and held that the
     issue of balance of convenience and irreparable loss are in
     favour of the plaintiffs/appellants. Resultantly, the application of
B~   the plaintiffs-appellants for temporary injunction against the non-
     applicants and the counter temporary injunction application filed
     on behalf of the non-applicants were partly allowed and it was
     ordered that till the decision of the original suit:-

       1. The applicants and non-applicants no.1 to 31 and the
C non-applicants no.36 to 43 shall not sell/transfer the immovable
  properties as mentioned in Schedule "Ka" to "Cha" and nor
  shall they create any substantial charge on the said properties.

       2. The Companies/Partnership firms controlled and run by
o the parties of which the details have been given in Schedule
  "Ka" to "Cha" regarding them the audited accounts of income
  and expenditure half yeariy/annually whichever is got done in
  the normal sequence shall be presented before this Court. Apart
  from this the other prayers which have been made by both the
E parties are rejected.

          4. The non-applicants preferred different miscellaneous
     appeals against the aforesaid interim order ·of injunction before
     the High Court. The non-appticants-respondents herein made
     the following submissions:
F
            (a)    The suit of the plaintiffs in the present form is not
                   maintainable in the eyes of law, inasmuch as it has
                   been filed by Sh. Babula! along with Saurabh
                   Agrotech Pvt. Ltd., which is a company incorporated
G                  under the Companies Act, two partnership firms
                   registered under the Partnership Act jointly and the
                   HUF of Babulat, seeking partition of the properties
                   mentioned in the Schedules annexed to the plaint
                   and that too against the set of companies, which
                   have been shown as the assets of the HUF.
H
      BABU LAL &-ORS. v. VIJAY SOLVEX LTD.                    1133
      [SUDHANSU JYOTI MUKHOPADHAYA, J.]
     (b)    Pla,intiff-Babulal though seeking partition of the joint   A
            family properties has not impleaded his own sons
            and other coparceners as parties to the suit and
            has not included the properties owned and
            managed by the plaintiffs in the schedules annexed
            to the plaint. Therefore, it was argued that the suit      B
            itself is bad for non-joinder of necessary parties
            and of causes of action and the suit is not tenable
            in the eye of law.

      (c)   The Lower Court failed to consider the contentions         C
            raised by the concerned defendants and also the
            documents produced by them.

    5. On the other hand, learned counsel for the plaintiffs-
appellahts made the following submissions:
                                                                       D
     (a) The Lower Court has passed the impugned order which
is just and proper after considering the prima facie case,
irreparable injuries likely to be caused to the plaintiffs and the
balance of convenience.

      (b) On 20th December, 2007, a family settlement has              E
taken place between Niranjan Lal Data Group whic.h belong to
the defendants and Babu Lal Data Group which belong to the
plaintiffs and that the said settlement was signed by Mr. Vijay
Data for Niranjan Lal Data Group and by Babu Lal Data for
Babu Lal Data Group. The said settlement was also partly acted         F
upon by the defendant-Niranjan Lal and other coparceners and
therefore, they cannot be permitted to back out from the said
settlement.

     Learned counsel also placed reliance upon decisions of            G
this Court in Reliance Natural Resources Ltd. v. Reliance
Industries Ltd. (2010) 7 sec 1 and in the case of Sangram
Singh P. Gaekwad and others v. Shantadevi P. Gaekwad (DJ
Through LRs. & Ors. (2005) 11 sec 314 and submitted that
though a company incorporated under the Companies Act is
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    1134       SUPREME COURT REPORTS                [2014] 6 S.C.R.


A   a body corporate, in certain situations, its corporate veil can
    be lifted and that the suit for partition could be filed against
    companies also.

        It was further contended on behalf of the plaintiffs-
B appellants that the family settlement need not be signed by
  coparceners and that if a mere memorandum of family
  arrangement was prepared with regard to the arrangement
  which had already taken place; such a document did not require
  registration. The family settlement made by the parties bona
C fide by making fair and equitable division of the properties
  amongst various members of the family must be respected.

        6. The High Court by impugned judgment and order dated
    14th March, 2012 observed as follows:

D       "6 ... ..... .It is also significant to note that the plaintiffs
        have impleaded !he companies, partnership firms and
        p1op1ietary concerns and HUFs as the party defendants,
        and the said companies and firms have also been
        shown as the properties or the assets of the HUF in the
        schedule 'Gha' annexed to the plaint. This court fails to
E
        understand as to how the companies which are
        incorporated under the Companies Act having perpetual
        seal and separate entity could be the assets of the HUF
        as alleged by the plaintiffs and as to how the companies
        could be divided by metes and bounds by way of partition
F       as prayed for in the suit. The plaintiffs in the suit have
        also prayed for mandatory injunction seeking direction
        against the defendant-companies alongwith other
        defe.ndants to act upon the family settlement, alleged to
        have taken place on 20.12.2007 between the Niranjan
G       Lal Data Group and Babu Lal Data Group, ~nd have also
        sought the direction against the said companies to
           .
        execute the documents and handover the possession of           ~


        the properties of the said companies and firms etc. This)
        court also fails to understand as to how the alleged family
H
 BABU LAL & ORS. v. VIJAY SOLVEX LTD.                  1135
 [SUDHANSU JYOTI MUKHOPADHAYA, J.]
settlement between the NLD Group and BLD Group ·A
would be binding to the defendant companies and firms,
apart from the issue as to whether the alleged document
dated 20. 12. 2007 could be called a family settlement.
Under the circumstances this court finds much substance
in the submission made by the learned counsel for the B
appellants that the suit filed by the plaintiffs is not only
bad for mis-joinder of parties and of causes of action, but
also for non-joinder of necessary parties and that the suit
in the present form would not be maintainable in the eye
d~w                                                             c
7.     So far as merits of the case are concerned,
according to the respondents-plaintiffs, all the properties
mentioned in the Schedules 'Ka' to 'Chha' annexed to
the plaint, were purchased from the nucleus of the joint
family properties, and as per the family settlement dated       D
20.12.07, the said properties were required to be divided
amongst the family members of the plaintiff No. 1 and
the defendant Nos. 1 to 9. In this regard, it is pertinent to
note that the entire suit of the plaintiffs is based on the
so-called family settlement which had allegedly taken           E
place between the NLD group and BLD group on
20. 12. 07. From the bare perusal of the said document it
transpires that it is the minutes of the meeting of Data
Group Family dated 20. 12. 07, which was signed by Mr.
Vijay Data for NLD Group and Mr. Babu Lal Data for BLD          F
Group. Apart from the fact that there is not a whisper in
the said document that the corpus of the companies
mentioned in the said document was provided by the
HUF or that the other properties mentioned in the said
document were the HUF properties, the said document             G
has also not been signed by the other coparceners of the
alleged HUF except by Mr. Vijay Data and Mr. Babu Lal
Data. Such a document by no stretch of imagination
could be said to be a family settlement. However, even
                                                                H
    1136    SUPREME COURT REPORTS                    [2014] 6 S.C.R.


A       if it is believed to be a family settlement, and even if it is
        held that the same was not required to be signed by all
        the coparceners, then also there is nothing on the record
        to suggest that it was a memorandum prepared after the
        family arrangement which had already been made earlier,
B       not required to be registered. . .......... ..

        "9. In this regard it is pertinent to note that though the
        concerned defendants had raised contentious issues as
        regards the maintainability of the suit, mis-joinder of
        parties and of causes of action, suppression of material
c
        facts by the plaintiffs etc., the lower court has not
        considered the same and has held that the plaintiffs had
        established the prima facie case in their favour. In the
        opinion of this court such a finding of the lower court in
        the impugned order is not only erroneous but also
D       perverse. When the suit on the face of it suffered from the
        mis-joinder of parties and of causes of action and was not
        prima facie tenable in the eye of law, the lower court has
        committed serious error of law and facts in holding, that
        the plaintiffs had established a prima facie case. If the
E       plaintiffs were not entitled to the final reliefs in the sl..lit,
        they could not be granted temporary injunction as prayed
        for during the pendency of the suit. "

       7. We have heard learned counsel for the parties and have
F perused the record. In the present case, the parties have raised
  similar pleas which were taken before the High Court. However,
  we are of the opinion that while dealing with a matter relating
  to vacation of order of temporary injunction, it was not open for
  the High Court to give a finding on the main issue relating to
G maintainability of the suit and the family settlement reached
  between the parties.

         8. In view of the finding aforesaid, we are inclined to
    interfere with the judgment and order dated 14th March, 2012
    passed by the High Court of Judicature for Rajasthan, Bench
H
       BABU LAL & ORS. v. VIJAY SOLVEX LTD.                   1137
       [SUDHANSU JYOTI MUKHOPADHAYA, J.]
at Jaipur in S.S. Civil Misc. Appeal No.2218 of 2011 etc. We,          A
accordingly, set aside the impugned judgment and remit back
th.er matter to the High Court for its fresh disposal after hearing
the· parties.

    9. The appeals stand disposed of with aforesaid                    8
observations.

Devika Gujral                                   Appeals disposed of.