Holding

The Supreme Court dismissed the SLPs as an abuse of process, ordered the dismissal of Suit‑II and Suit‑III as infructuous, and imposed exemplary costs on the parties.

Summary

The Supreme Court examined multiple Special Leave Petitions (SLPs) arising from a protracted dispute over the acquisition and transfer of shares in Bombay Oxygen Corporation Ltd. The dispute involved Messer Holdings GmbH (MGG), Goyal Gases Ltd (GGL), the Ruia family (RUIAS) and a joint venture company Messer Holdings Ltd (MHL). After a series of agreements, settlements and arbitration awards, the parties continued to file suits seeking injunctions and declarations regarding share ownership. The Court held that the SLPs were an abuse of process, that the pending suits II and III were infructuous in view of the settlement, and that all interim orders should lapse. Exemplary costs of Rs.25 lakhs were imposed on each of the three main parties, and the SLPs were dismissed.

Issues considered

The maintainability of the Special Leave Petitions given the underlying suits were pending and issues not framed.
Whether the continuation of Suit‑II and Suit‑III after the 5‑December‑2002 settlement is legally tenable.
The effect of the settlement on the title to the 75,001 shares and whether the parties can claim ownership in the SLPs.
The validity of the interim orders passed by various courts in the intervening litigation.
The court's power to impose exemplary costs under Article 136 of the Constitution.

Legislation cited

Arbitration & Conciliation Act, 1996s. 9
Code of Civil Procedure, 1908s. Order 6 Rule 16, s. Section 151
Companies Act, 1956s. 108(1A)
Constitution of Indias. Article 136
Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997

Subjects

share transfernon‑competition clauseright of first refusalabuse of processexemplary costsspecial leave petitionarbitrationsettlementtitle to sharescompany lawsecurities law

Judgment

[2016] 5 S.C.R. I

MESSER HOLDINGS LTD. A
v.
SHYAM MADANMOHAN RUIA & OTH£RS
(Special Leave Petition (Civi I) Nos. 33429-33434 of20 I 0)
APRIL 19,2016 B

[J. CHELAMESWAR AND ABHAY MANOHAR SAPRE, JJ.)
Company law: Transfer of shares - In the instant sets of appeal,
several suits were filed by parties relating to the transactions
involving tramfer o.f shares - While one suit stood withdrawn, others
suits remained pending - Instant SLPs arose out of various
c
interlocutory proceedings - Disposing o.f the SLPs, the Court held:
The examination of various questions raised by the petitioners in
these SLPs is wholly uncalled for - Considerable judicial time has
been spent on this fitigation - The conduct of none of the parties to
this litigation is wholesome - Arguments were advanced on either D
side for a period of about I8 working days as (f this Court were a
Court of Original .Jurisdiction trying the suits - The fact remains
that in none of the suits even issues have been framed so far - This
case is a classic example of the abuse of the judicial process by
unscrupulous litigants with money power. all in the name of legal
E
rights by resorting to half-truths, misleading representations and
suppression of facts - Each and every party is guilty of one or the
other of the above-mentioned misconducts - This case should also
serve as proof of the abuse of the discretionary jurisdiction of this
Court under Article 136 by the rich and powerjit! in the name of a
'fight for justice' at each and every interlocutory step of a suit - F
Enormous amount ofjudicial time of this Court and two High Courts
was spent on this litigation - Therefore, exemplary costs of Rs.25
Lakhs imposed on the three parties i.e. GGL, MGG and RUJAS -
Interlocutory order - Cos/ - Constitution of India - Art.136.
Ramrameshwari Devi & Others v. Nirmala Devi & Others G
2011 (8) SCR 992 : (2011) 8 SCC 249 - relied on.
Case Law Reference
2011 (8) SCR 992 relied on Para 44

H
2 SUPREME COURT REPORTS [2016] 5 S.C.R.

A CIVIL APPELLATE JURISDICTION: Special Leave Petition (C)
Nos. 33429-33434 of20 I 0.
From the Judgment and Order dated 01.09.2010 of the High Court
of Judicature at Bombay in Appeal No. 855 of2003 in Notice of Motion
No. 534 of2002 in Suit No. 509 of200 I with Notice of Motion No. 1308
B of2005, Notice of Motion No. 3965 of2005, Notice of Motion No. 4118
of2007, Notice ofMotion No. 1973 of2008, Notice of Motion No. 1418
of2008.
Dhruv Mehta, Sr. Adv., M. L. Sreegesh, Mrs. V. S. Lakshmi, A.
Venayagam Balan, Ms. Aruna Gupta, Advs. for the Petitioner.
c F. S. Nariman, Rohit Kapadia, S. Ganesh, Sr. Advs., Karl Shroff,
R. N. Karanjawala, Debmalya Benerjee, Jasmeet Singh, A. S. Aman,
Manish Sharma, Ms. Tanya Pujji, Mrs. Manik Karanjawala, Subhash
Sharma (For Mis. Karanjawala & Co.), E. C. Agrawala, Nikhil Swami,
Mrs. Prabha Swami, Ms. Aruna Gupta, Ms. Mohna M. Lal, Ms. Geetali
D Talukdar, Advs. for the Respondents.
The Judgment of the Court was delivered by
CHELAMESWAR, J. I. Messer Griesham GrnbH, a German
Company (hereinafter. referred to as "MGG") entered into a Share
Purchase and Cooperation Agreement (hereinafter referred to as
E AGREEMENT-I) with the shareholders of an Indian company called
Goyal Gases Ltd. (hereinafter referred to as "GGL") on 12.5.1995. By
virtue of the said agreement, MGG purchased 30% of equity shares of
GGL. Subsequently, MGG increased its shareholding in GGL to 49%.
Clause 9 of the AGREEMENT-I reads:
F " 9. NON-COMPETITION CLAUSE
GGL and all Goyal Group companies will cooperate in the
Indian market with right to first refusal basis/with MGG and
will not for the duration of this cooperation support in any
way directly or indirectly - the activities of MGG's
G competitors with regard to gas business. MGG will give
written infonnation to GGL about every business opportunity
it plans to take in the Indian market in regard to industrial
gases and related business and GGL may decide if it wants
to participate in it (right of first refusal). In case GGL does
not within a period of two months after receiving MGG's
H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUJA 3
[CHELAMESWAR, J.]

notice declare in writing that it is willing and able to participate A
in the planned business, MGG is free to proceed with this
business on its own. However, MGG will give due
consideration to the interest ofGGL being its group company.
Such new business which MGG undertakes should be business
of gas supply of few major dedicated customers only and not
B
to general market supply."
2. In a company known as BOMBAY OXYGEN
CORPORATION LIMITED (hereinafter referred to as the 'BOCL')
majority shares were collectively held by a group of persons known as
RUJAS (we understand that they belong to one family). On 23.6.1997,
MGG entered into another Share Purchase Agreement (hereinafter c
referred to as'AGREEMENT -TI) with RUIAS. By the said agreement
MGG agreed (i) to purchase 4500 I shares of BOCL from RUIAS, and
(ii) also to acquire another 30000 shares ofBOCL from the open market
which would make MGG the majority shareholderofBOCL (creating a
controlling interest). Clause 6.1 of AGREEMENT-II reads; D
"6.1 Right of First Refusal:
With effect from the date this Agreement becomes effective,
neither party shall sell any shares in the Company held or
acquired by it without first, offering the Shares to the other
party. The offer shall be in writing and shall set out in the E
price and other terms and conditions. If the offeree does not
agree to purchase the Shares so offered the offerer shall be
free to sell the Shares to any person (other than a competitor
of the offeree ), but at the same price and on the same terms
as offered to the offeree. This right of first refusal does not F
apply to any sale of shares by the purchaser to a company of
the Hoechst Group. In a company directly or indirectly
controlled by or under direct or indirect common control with
the Hoechst Group. For the purposes of this definition "control"
means ownership, directly or indirectly or more than 50 percent
of the issued and outstanding voting stock orownership interest G
of.the. Company."
3. Pursuant to the AGREEMENT-II, MGG made a public
announcement on 27.6.1997 disclosing its intention to acquire 30000
shares of BOCL from public as required under Chapter-III of the
H
4 SUPREME COURT REPORTS [2016] 5 S.C.R.

A Securities and Exchange Board oflndia (Substantial Acquisition of Shares
and Takeovers) Regulations, 1997 (hereinafter referred to as the
'REGULATIONS 1997) framed in exercise of the powers conferred by
Section 30 of the Securities and Exchange Board of fndia Act, 1992
(hereinafter referred to as the "SEBl Act")
B 4. GGL protested (in writing) against the attempt of MGG to
independently acquire shares of BOCL saying that it would amount to
breach of Clause 9 of the AGREEMENT-I. Some correspondence took
place between both the Companies in this regard. Eventually, both the
Companies entered into AGREEMENT-HI on 8.11.1997 whereunder it
was agreed that out of 75001 shares of BOCL to be acquired by MGG
c under AGREEMENT-II, 50000 shares will be acquired in the name of
GGL and only 25001 will be acquired in the name ofMGG.
5. RUIAS came to know of the AGREEMENT-III. By their
letter dated 5.5.1998 they informed MGG that they were not agreeable
for the proposal of MGG and GGL jointly purchasing the shares of the
D BOCL. In view of the said development, MGG informed GGL on
7.5.1998 that MGG was terminating AGREEMENT-Ill. Thereafter,
MGG proceeded to acquire 75001 shares of the BOCL on its own and
paid an amount of Rs.13.5 crores to the RUIAS towards the value of
4500 I shares.
E SUIT-I IN THE HIGH COURT OF DELHI by GGL etc.
6. On 26.8.1998, GGL filed a Civil Suit No.1810/98 (hereinafter
referred to as "SUIT-I") in the High Court of Delhi against MGG for the
enforcement of Clause 9.1 of AGREEMENT-I and for other reliefs:
(a) Cancel the letter of offer dated 6.8.1998 made by the
F
defendant for 20% equity shares of Bombay Oxygen
Corporation Ltd. and/or
(b) Cancel the share purchase agreement dated 23 .6.1997
whereby the defendant has sought to purchase 30% +I equity
shares of Bombay Oxygen Corporation Ltd. and/or
G
(c) A decree of permanent injunction restraining the defendant
from taking any steps in pursuance of the letter of offer
dated 6.8.1998 for 20% equity shares of Bombay Oxygen
Corporation Ltd. and the share purchase agreement dated
23.6.1997 for purchase of30%+ I equity shares of Bombay
H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 5
[CHELAMESWAR, J.]

Oxygen Corporation Ltd. in violation of the non-competition A
clause of the agreement dated 12.5.1995 and/or
(d) A decree of permanent injunction restraining the defendant
from acquiring any shares in Bombay Oxygen Corporation
Ltd. on its own and without the participation of plaintiff.
On 14.9.1998, GGL filed two applications seeking certain interim B
orders. I.A. No.7248 of 1998 in the SUIT-I invoking Order 39 Rule
I &2 of the Code of Civil Procedure, 1908 (hereinafter referred to as
"CPC") and OMP No. 205of1998 invoking Section 9 of the Arbitration
& Conciliation Act, 1996 (hereinafter referred to as "A&C Act").
Interestingly the relief ~ought in both the applications is substantially the c
same i.e., interim order restraining the MGG from acquiring the shares
of BOCL on its own. The learned trial Judge dismissed both the
applications by two separate orders dated 22.9.1998. GGL carried the
matter in intra court appeals.
7. By the appellate order dated 23. I 0.1998, a Division Bench of D
the Delhi High Court restrained' MGG from acquiring the shares of the
BOCL.
8. Aggrieved by the same, MGG moved this Court in Civil Appeal
Nos. 728 and 729 of 1999. This Court by an interim order dated
18.12.1998 ordered as follows:- E
"Meanwhile, it will be open to the Petitioner - Mis .. Griesheim
GMBH to make payment for purchasing 10,000 (sic 30,000) shares
from the public and also to take delivery of these shares but they shall
not take further steps for the purpose of getting their names registered
as shareholders in respect of these shares'.
F
Respondent No. I Goyal MG Gases Ltd is directed to nominate its
Arbitrator within a period of two weeks from today and take appropriate
steps to pay the full fees and it shall also file its claims statement within
one week thereafter."
9. By a final order dated 8.2.1999, the said appeals were disposed:- G
1
For the aforesaid reasons, we allow both the appeals and restrain Messer from
taking any steps to acquire shares of BOCL in pursuance of Share Purchase Agreement
dated 23" June, 1997. till the decision of the arbitration proceedings and the
suit. In the facts and circumstances of the case parties are left to bear their own
costs. [FAO (OS) No.251of1998 and FAO (OS) No.250 of 1998]
H
6 SUPREME COURT REPORTS [2016] 5 S.C.R.

A "Earlier by our order dated 18.12.98, we had permitted the
appellant to make payment to the shareholders. The payment
having been made now custody of those shares is with the
appellant. Bombay oxygen wants to borrow money from a
bank and the appellant wants to be a guarantoron the strength
of those shares and for that reason it wants an order of this
8
court permitting it to do so.
We are told that two Arbitrators have already been appointed
and the third Arbitrator will be appointed within a short time.
After considering the rival submissions, we think it proper to
pass the following order:
c
It will be open to Messer Griesheim Gmbh/the appellant to
part with those shares and keep them in custody of the
concerned bank for the purpose of entering into such a
financial arrangement. It is, however, made clear that so far
as the question of registration and ownership of shares is
D concerned that will have to be decided by the Arbitrators. It
will be open to the parties to approach the Arbitrators for
obtaining interim relief in that behalf.
Since the erstwhile owners of the shares have been paid their
dues, they have ceased to be owners of those shares and the
E beneficial interest in them now vests in Messer Griesheim
Gmbh or in Messer Griecheim Gmbh and Goyal HG gases
Limited jointly if the Arbitrators so decide. We direct that all
the disputes between the parties including the right to
represent on the board of Bombay Oxygen will now have to
F be decided by the Arbitrators. If any necessity arises to
approach this court, it will be open to the parties to do so. Till
any order to the contrary is passed by the Arbitrators, our
order dated 22.1.99 will continue to operate.
The appeals are disposed of accordingly."
G 10. The petitioner (hereinafter referred to as 'MHL') in SLP(C)
Nos.33429-33434 of20i 0 on hand is a company incorporated in British
Virgin Islands on 20.01.2000 by MGG and another company known as
Morgan Trade and Commerce which is a 100% owned subsidiary of
GGL. The authorised share capital ofMHL is I 0,000,000 DM (currency
of Federal Republic of Germany) divided into I 0,000,000 shares. It has
H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 7
[CHELAMESWAR, .I.]

two Directors, one representing MGG and the other Morgan Trade and A
Commerce. Interesting feature ofMHL is that the shares of this company
are bearer shares. It is an admitted case of all the parties that the law of
British Virgin Islands permits it.
11. MGG and GGL entered into a settlement~ of their dispute
(evidenced by two documents dated 17 .02.2000 and 13 .3.2000) pursuant B
to which MGG filed two applications (l.A.s 17 & 18 of2000) in Civil
Appeals No. 728-729 of 1999, which had already been disposed of on
8.2.1999, praying that: '
"(a) pennitthe said 75001 shares to be transferred and registered
in the name of Messer Holdings Ltd. and permit complete c
rights attached to these shares to be enjoyed by Messer
Holdings Ltd. pending registration of transfer of shares and
permit nominees to be appointed as Directors on the Board
of Bombay Oxygen Corporation Ltd. in accordance with
law;
D
(b) direct that period from 23rd October, 1998 to date of order
passed in this application will be excluded in computing the
period prescribed under Section I 08(1 A) of the Companies
Act, 1956 for the validity of the transfer deeds.
(c) Pass such further order/orders as this Hon'ble Court may E
deem fit and proper in the facts and circumstances of the
present case."
However, when the said I.As were taken up by this Court on 20th
April, 2000, this Court ordered:
F
' It is stated in the !As No.17-18 of 2000 regarding the settlement as follows:-
Para 7. The original dispute between the appellant and the respondent No. I was
regarding the acquisition of shares in Bombay Oxygen Corporation Ltd. and the control
thereof. The appellant and the respondents have since settled their dispute. Under
the settlement, the parties have agreed that the 75001 shares (of Bombay Oxygen
Corporation Ltd.) purchased at a price of Rs.22.5 crorcs shall now be registered in
the name of a new company Messer Holdings Ltd., referred to herein below. G
Pa{a 8. Pursuant to the settlement the appellant and the respondent No. I (through
its subsidiary) have incorporated a joint venture company outside India being Messer
Holdings Ltd. In fact,, this compromise was contemplated by the parties during the
hearing of the above civil appeals but could not be materialized before the disposal
of the civil appeals. It is in the name of Messer Holdings Ltd. that the parties propose
to register the 7500 I shares. H
8 SUPREME COURT REPORTS [2016] 5 S.C.R.

A ''Learned counsel for the applicant and respondent Nos. I and
2 state that dispute which was sought to be referred to the
Arbitrator has been settled between them. In view of this
they want to move appropriate application to withdraw from
the arbitration proceedings. They seek time for the purpose.
List the matter on 5.5.2000.''
B
The only inference we can draw is that the prayers in I.As 17 &
18 of 2000 were not pressed'.
12. Interestingly, after seeking this Court's permission to withdraw
from the arbitration proceedings initiated earlier, MGG and GGL filed a
c joint application before the arbitral tribunal on 9.8.2000 requesting the
arbitral tribunal to pass a consent award. On such an application, the
ICC Arbitral Tribunal passed a consent award on 2 I .9.2000, the operative
portion of which reads as follows:
"NOW THEREFORE the tribunal hereby makes the
D following award by consent of the parties in terms of the
Joint Application set out in Annexure "!"hereto, which shall
fonn part of this Award:
l (a) The 7500 I shares of Bombay Oxygen Corporation
Limited (BOCL) purchased by the Respondent at a price of
E Rs.22.5 crores shall be held and registered in the name of
Messer Holdings Ltd. (MHL); however, for technical and
procedural reasons the shares will first be registered in the
name of the respondent and immediately thereafter the said
shares will be registered in the name ofMHL as mentioned

F 'The whole process is strange. GGL simultaneously pursued the remedies (Suit-I and
an arbitration proceeding) for the resolution of the dispute with MGG when the parties
to the suit settled their dispute by mutual agreement, there is no need to approach this
Court by filing interlocutory applications in appeals which had already been disposed
off. More particularly, when those appeals arose out of interlocutory proceedings (i)
in a pending suit, and (ii) a proceeding under Section 9 of the A & C Act, 1996 which
empowers the "civil court" to pass appropriate orders as an interim measure for
G protecting the interests of parties to a dispute which the parties had agreed to get
resolved by an arbitration. If really the dispute between the parties is sellled, nothing
prevented the plaintiff (GGL) from either withdrawing the suit or praying for a decree
in terms of the settlement between the parties, or in the alternative, praying the arbitrators
to pass an award in terms of the settlement between the parties, because under the
A&C Act. 1996 an award is as efficacious as a decree of a civil court. But the parties
i.e. MGG and GGL desired '·to withdraw from arbitration proceedings".
H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 9
[CHELAMESWAR, J.)

in para 2 of the Joint Application. Complete rights attached A
to the 7500 I shares of BOCL qua the BOCL as well as
transferos (transfer - sic) of the share~ to the Respondent
(even pending registration in the name of the Respondent
and/or in the name ofMHL) will be henceforth exercised by
the Respondent through MHL who will act for and on behalf
B
of the Respondent. MHL will be authorised by Messer
Griesheim Gmbh (MCG) to delegate all or any of its powers
mentioned above, including the rights but not limited to
attending general meetings of share holders ofBOCL and to
vote therein and deciding and appointing nominees to be
appointed as directors on the board of BOCL." c
13. Pursuant to the consent award, sometime in the month of May
2000 MGG handed over the shares certificate of7500 l shares of BOCL
to MHL alongwith duly tilled transfer forms• and a power of attorney.
We are given to understand that the SUIT-I is eventually withdrawn
by GGL. It is necessary to mention here that by that time RUIAS had D
already tiled (on 28.4.1999) a suit inter alia against both MGG and GGL
in the High Court of Bombay.
SUIT- II IN THE HIGH COURT OF BOMBAY BY RUIAS ETC.
14. On 28.4.1999, RUIAS filed a Suit No.2499/1999 before Bombay E
High Court (hereinafter referred to as SUIT-II) in substance seeking
enforcement of clause 6.1 of the AGREEMENT-IL
'"(a)l(i) that it be declared that the negative covenant
contained in Clause 6.1 of the agreement dated 23rd June
1997 being Ex. 'B' hereto is binding on the Defendants;
F
(a)l(ii)(b) that the Defendants by themselves their agents
and servants be restrained by a perpetual order and injunction
of this Hon'ble Court from
(i) committing breach of clause 6.1 of the Agreement dated
23rd June, 1997 being Ex. 'B' hereto; G
(ii) transferring or selling or alienating the legal and/or
beneficial interest in the shares of Defendant No. 2
including those mentioned in Ex. 'A' hereto without first

' As required under the law as it was on that date H
10 SUPREME COURT REPORTS [2016] 5 S.C.R.

A offering the same to the Plaintiffs in terms of Clause 6.1
of the Share Purchase Agreement dated 23rd June 1997,
being Ex. 'B' hereto.
(iii) obtaining any award, decree order from any forum or court
in violation of clause 6. I of the Share Purchase Agreement
B dated 23rd June 1997 being Ex. 'B' hereto.
(iv) making any claim before the Arbitrators or any court which
if granted will amount to a breach or violation of the
provisions of Clause 6.1 of the said Share Purchase
Agreement dated 23rd June 1997, being Ex. 'B' hereto;
c (v) procuring any breach of the provisions of clause 6.1 of the
said Share Purchase Agreement dated 23rd June, 1997 being
Ex. 'B' hereto;"
In the said Suit, RUIAS filed an application (Notice of Motion
No.1804 of 1999) praying that MGG and GGL be restrained from
D committing breach of Clause 6.1 of AGREEMENT-II. By an interim
order dated 6.5.1999, MGG and GGL were injuncted from committing
breach of Clause 6.1 of AGREEMENT-II. MGG filed an affidavit in
the said application undertaking that it would not breach Clause 6.1 of
AGREEMENT-II. By an order dated 29.2.2000, Bombay High Court
E disposed of the said application recording the undertaking filed by MGG
with a further direction that MGG and GGL "not to implement or enforce
any award made by the arbitrators without obtaining the leave of" Bombay
High Court:-
"The parties have agreed that for disposing of this motion in
the following terms, no reasons are necessary to be recorded.
F
I. Defendant No. I stated that defendant No. I is willing to
and shall abide by clause 6.1 of the agreement dated 23rd
June 1997. Statement accepted. In view of the statement
made by defendant No. I, the following interim order is
passed against defendant No. I.
G
Interim Order in terms of prayer (a)(i). 5

' Prayer (a) - That pending the hearing and final disposal of the suit defendant Nos. I,
3 and 4 be restrained by an ordr of injunction of this Hon 'ble Court from:
(i) committing breach of clause 6.1 of the agreement dated 23"' June. 1997 being Ex."B"
H to the plaint.
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 11
[CHELAMESWAR, J.]

2. Defendant No. I and 3 shall not act pursuant to implement A
or enforce any award made by the arbitrators without first
obtaining the leave of the court and the court will consider
the agreement between the plaintiffs and defendant No. I.
3. The aforesaid order is made without prejudice to the rights,
claims and contentions of the parties. B
4. The Notice of Motion is accordingly disposed off. It is
clarified that the parties are at liberty to adopt appropriate
proceedings to enforce their respective rights.
5. Parties to not (note - sic) on a copy of this order duly
authenticated by the associate of the Corn1." c
15. By a letter dated 31st May 2000, RUIAS intimated MGG and
reiterated on 1st June 2000, that AGREEMENT-II was terminated.
Because according to RUIAS establishment of MHL and the transfer
of7500 I shares ofBOCL to MHL tantamounted to breach of clause 6.1
of AGREEMENT-II. D
16. After obtaining the consent award on 21.9.2000, MGG filed
an application (Notice of Motion No.2933/2000) before the Bombay
High Court in SUIT-II seeking leave of the Cout1 to implement and
enforce the consent award.
E
SUIT- Jll IN THE HIGH COURT OF BOMBAY
17. On 5.2.200 I, RUIAS filed second Suit bearing No.509 of200 I
(hereinafter referred to as "SUIT- Ill") before the Bombay High Court
praying:
"a) for a declaration that the Share Purchase Agreement F
dated 23rd June 1997 is liable to be rescinded;
b) for an order of this Hon'ble Court directing the said Share
Purchase Agreement dated 23rd June 1997 be rescinded;
c)that in the alternative to prayers (a) and (b) above, for a
declaration that the Share Purchase Agreement dated 23rd G
June 1997 was voidable and has been validly avoided by the
Plaintiffs;
d) that in the alternative to prayers (a), (b) and (c) above, for
a declaration that the Share Purchase Agreement dated 23rd
H
12 SUPREME COURT REPORTS [2016] 5 S.C.R.

A June 1997 was terminable by the Plaintiffs and has been
validly terminated by the Plaintiffs.
e) that in the alternative to prayers (a), (b ), (c) and (d) above,
for a mandatory order and direction by this Hon 'ble Court
directing the 1st Defendant to offer the said 75,001 shares
B to the Plaintiffs in accordance with the procedure prescribed
in Clause 6.1 of the Share Purchase Agreement dated 23rd
June1997.
f) for a declaration that the acquisition of the said 30,000
shares pursuant to the Public offer is illegal, unlawful, null
c and void and of no legal effect whatsoever;
g) for a declaration that the said Agreement dated 17th
February 2000 and the said Consent Award dated 21st
September 2000 are not binding on the Plaintiffs and/or
Defendant No.2 and/or that the same are illegal, null and
D void.
h) for a permanent injunction restraining the dclendant No.1,3
and 4 from
(i) acting in pursuance of the Share Purchase Agreement
dated 23rd June 1997;
E
(ii) exercising any rights in respect of the said 75,001
shares (in particular voting rights in connection therewith)
and/or from receiving any dividends, rights in respect of the
snn1e;
(iii) exercising any rights including its beneficial ownership
F
in, to, upon or in respect of the said 75,00 I shares.
i) that the Defendants be restrained by permanent order and
injunction of this Hon'ble Court from transferring and/or
registering and/or taking any steps to transfer and/or register
the said 75,00 I sh:ircs in the name of any person or persons.
G firm or body corporate including I st and/or 3rd and/or 4th
Defendants without the consent of the Plaintiffs;
j) that the I st defendant be ordered and decreed to deliver/
return to the respective plaintiffs the said 45,00 I shares
together with all accretions thereto from 23rd June 1997 on
H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 13
[CHELAMESWAR. J.]

such terms as this Hon'ble Court directs: A
k) for the purpose aforesaid the 1st defendant be ordered
and decreed to do and perform all acts, deeds. matters and
things and to execute all documents, deeds and writings in
furtherance thereof.
18. In the said suit, RUIAS filed an application (Notice of Motion B
No. 392 of200 I) in substance seeking an injunction against MGG and
GGL along wid1 MHL either from transferring the 7500 I shares of BOCL
in favour ofMHL or from exercising rights as beneficial owners of the
said shares. In the said suit, MHL filed an application (Notice of Motion
No.534 of2002) on 21.2.2002 seeking appointment of an administrator c
and receiver for the administration of the assets ofBOCL on the ground
that RUIAS are causing substantial damage to the assets of BOCL.
19. SUIT-II was amended from time to time on three occasions
pursuant to the orders of the Bombay High Court dated 22.02.2000,
04.10.2002 and 08.06.2011. D
The prayer in SUIT-II after such Amendments;
"Rider-I(a)
(a) (i) For a declaration that the acquisition of the said 30,000
shares pursuant to the public offer is illegal, null and void ab-
E
initio and of no legal effect whatsoever.
(ii) For a permanent order and injunction restraining the
defendants from exercising any rights in respect of the said
30,000 shares including and in particular voting rights.
(b) (i) for a declaration that the said agreement dated 23rd F
June, 1997 (Exhibit-B hereto) stands validly tenninated and/
or avoided.
Rider-N Prayer (b)(ii)(a)
"(b)(ii)(a) that it be declared that Defendant Nos. 3 to 5
have no right, title or interest of any nature whatsoever in G
respect of the 7500 I shares of Defendant No. 2"
Rider-0 prayer (b)(ii)(b):
"(b)(ii)(b), that in the alternative to prayer (b)(ii) this Hon'ble
Com1 be pleased to order and direct the Defendant Nos. I
H
14 SUPREME COURT REPORTS [2016] 5 S.C.R.

A and 3 to 5 to deliver to the respective Plaintiffs 45001 shares
of Defendant No. 2 as also to return to the respective
members of the public the 35000 shares;
(ii) that the +st defendant Nos. I, 3, 4 and 5 be ordered and
decreed to deliver/return to the respective plaintiffs the said
B #,00+ 75,00 I shares together with all accretions thereto from
23rd June, 1997 on such terms as this Hon'ble Court directs.
(iii) for the purpose aforesaid the l5t defendant Nos. I, 3, 4
and 5 be ordered and decreed to do and perform all acts,
deeds, matters and things and to execute all documents, deeds
c and writings in furtherance thereof.
Rider-P prayer (b)(iii)(a)
''(b)(iii)(a), that in the event of the Defendant Nos. I and 3
to 5 failing to deliver to the Plaintiffs the said 7500 I shares
of Defendant No. 2 the same be cancelled and Defendant
D No. 2 be ordered and directed to issue duplicate shares in
the name of the Plaintiffs"
(iv) for a permanent order and injunction restraining the
defendants from transferring and/or registering and/or taking
any steps to transfer and/or register the said 75,001 shares
E in the name of any person or persons, firm or body corporate
including the I st and/or 3rd and/or 4th defendants without
the consent of the plaintiffs.
(v) for a permanent order and injunction restraining defendant
nos. I, 3 and/or 4 and 5 from exercising any rights, including
F as beneficial owner, in, to, upon, or in respect of the said
75,00 I shares.
a( I )(i) In the alternative and in the event of prayer (b) not
being granted that it be declared that the negative covenant
contained in Clause 6.1 of the agreement dated 23rd June
G 1977 being Ex. 'B' hereto is binding on the Defendants;
(a) I (ii)tbj that the Defendants by themselves their agents
and servants be restrained by a perpetual order and injunction
of this Hon'ble Court from.
(i)committing breach of clause 6.1 of the Agreement dated
H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 15
[CHELAMESWAR, J.]

23rd June, 1977 being Exh. 'B' hereto; A
(ii) transferring or selling or alienating the legal and/or
beneficial interest in the shares of Defendant No. 2 including
those mentioned in Ex. 'A' hereto without first offering the
same to the Plaintiffs in terms of Clause 6.1 of the Share
Purchase Agreement dated 23rd June 1997, being Exh. 'B' B
hereto.
(iii) obtaining any award, decree order from any forum or
court in violation of clause 6.1 of the Share Purchase
Agreement dated 23rd June, 1997 being Ex. 'B' hereto.
(iv) making any claim before the Arbitrators or any court c
which if granted will amount to a breach or violation of the
provisions of Clause 6.1. of the said Share Purchase
Agreement dated 23rd June 1997, being Ex. 'B' hereto;
(v) procuring any breach of the provisions of clause 6.1 of
the said share Purchase Agreement dated 23rd June, 1977 D
being Ex. 'B' hereto;"
Rider-C
(b I )(a) In the alternative and in the event of prayer (b) not
being granted and In the event of it being held that the said
E
agreement is void defendant Nos. I, 4 and 5 be ordered and
decreed to deliver/return to the respective Plaintiffs the said
45001 shares together with all accretions thereto from 23rd
June 1977 on such terms of this Hon'ble Court may direct.
(b) For the purpose aforesaid defendant Nos . I, 4 and 5 be
F
ordered and decreed to do and perform all acts, deeds,
matters and things and to execute all documents, deeds and
writings in furtherance thereof."
20. It appears that on 5.12.2002, RUIAS and MGG entered into a
settlement (evidenced by an agreement in writing) of the disputes
between them by allegedly rescinding the AGREEMENT-II. According G
to MHL, the terms of settlement were not made known to either MHL
or GGL for a long time. The information regarding the agreement dated
5.12.2002 initially came to the knowledge ofMHL (allegedly) from the
website of Security Exchange Commission of United States.
H
16 SUPREME COURT REPORTS (2016] 5 S.C.R.

A The relevant portion of the settlement reads as under:-
"6. In the circumstances, "MGG" and the "Ruias" have
agreed to fully and finally settle all their disputes and
differences by rescinding the "Ruia Agreement" on the te1ms
and conditions set forth in this Agreement. However,
B "MGG" is not in a position to return to the "Ruias" the share
certificates and other relevant documents for the 45,00 I
shares of"BOCL" (which is the subject matter of the "Ruia
Agreement") as they are not in "MGG's possession. "MGG"
has no knowledge of the current whereabouts of the said
share certificates and other documents pertaining to the
c 45,001 shares and is not in a position to secure return/delivery
of the same.
7. As "MGG" is no longer interested in acquiring any shares
in "BOCL", as a further part of the settlement, it is hereby
agreed that "MGG" hereby sell/reverts/transfers/divests in
D favour of the "Ruias" all its right, title and interest in the
remaining 30,000 shares in "BOCL" which "MGG" had
acquired from the public, but which has also not been
registered in the name of"MGG" in the records of"BOCL".
However, "MGG" has no knowledge of the current
E whereabouts of the share certificates and other documents I
pertaining to the 30,000 shares and is not in a position to
secure return/delivery of the same.
8. In consideration for the foregoing, "Ruias'' agree to pay
"MGG" a sum of US $ 154,642 in respect of the 75,00 I
F shares of "BOCL", without any other or further obligation
whatsoever on the part of"MGG" to the "Ruias" except as
provided in this Agreement. The "Ruias" shall also not have
any fmther obligation to "MGG" except as provided in this
Agreement.

G ****** ***** ****** ******
10. The parties agree that "MGG" do hereby fully and
irrevocably revert/sell, transfer and assign all its beneficial
right, title and interest in or in relation to the said 75001 shares
in favour of "Ruias" and shall, at the cost and expense of
"Ruias", execute and continue to execute such instruments,
H
MESSER HOLDfNGS LTD. v. SHYAM MADANMOHAN RUIA 17
[CHELAMESWAR, J.]
.r
documents, authorities etc., as may be necessary or expedient A
in connection therewith and shall refrain from doing anything
inconsistent with the foregoing or the rights reverted/assigned/
transferred as above on and from the date of execution
hereof. To this end and purpose, an irrevocable Power of
Attorney duly executed as per draft enclosed herewith as
8
Annexure I shall be put in escrow with Ms. Lira Goswami,
Advocate. Ms. Lira Goswami shall hand over the Power
of Attorney to the "Ruias" in accordance with written escrow
instructions agreed to by "Ruias" and MGG".
1 l(a) The parties confirm and acknowledge that as the
foregoing 45,00 I shares of"BOCL" have not been registered c
in the name of"MGG" in the records of"BOCL", the said
shares.continue to be registered in the names of the "Ruias".
Consequently, the rescission of the "Ruia Agreement" does
not involve any transfer from "MGG" to the "Ruias" in the
books of"BOCL" as the "Ruias" continue to be the registered D
shareholders. Nevertheless, if any permission, approval or
notification is required under Indian law for implementing
this Agreement, including without limitation, the permission
of the "RBI" for making the payment of US$ 154,642, the
"Ruias" shall be solely responsible and liable for obtaining all
such necessary approvals or permissions or for making the E
necessary filings/notifications, at the sole cost and expense
of the "Ruias".
(b) Similarly, the parties confirm and acknowledge that the
foregoing 30,000 shares of "BOCL" have also not been
registered in the name of"MGG" and continue to be in the F
name of the Indian public shareholders. Consequently,
"Ruias" will be solely responsible for doing all acts, deeds
and things that may be necessary for effecting the transfer
of these shares from the currently registered shareholders
to the "Ruias" at the sole cost and expense of the "Ruias". G
****** ****** ****** ******
15. On execution of this Agreement, "Ruias" agree:
(a) not to prosecute the following proceedings pending in the
Bombay High Court and in Supreme Court oflndia against
H
18 SUPREME COURT REPORTS [2016] 5 S.C.R.

A "MGG" or its affiliates or its directors, officers or employees
(excluding"MHL" and Goyal MG Gases Ltd. but including
directors nominated by "MGG" on the Board of"MHL" and/
or Goyal MG Gases Ltd.):
(i) Civil Suit No. 2499of1999 titled Shyam Madan Mohan
B Ruia & Ors. Vs. Messer Griesheim GmbH & Ors.
(ii) Civil Suit No. 509 of2001 titled Shyam Madan Mohan
Ruia & Ors. Vs. Messer Griesheim GmbH & Ors."
In spite of the said agreement, (the existence of which is not in
dispute now). RUIAS not only continued with SUITS II and III, but
c also amended the Suit-II on 08.06.2011.
21. On 4.2.2008, BOCL executed a Development Agreement in
favour of another company known as HDIL granting development rights
in respect of three pieces of immovable properties admeasuring 15317. 77
sq. mtrs., 3513.70 sq. mtrs. and 47762.20 sq. mtrs. of land situated at
D Kurla Taluk of Maharashtra allegedly owned by BOCL.
22. The next day BOCL informed the Bombay Stock Exchange
about the above-mentioned development agreement. On 26.3 .2008, HDIL
mortgaged the above-mentioned property in favour of the Union Bank
oflndia for securing a term loan of230 crores.
E
23. On 8.4.2008 MHL filed a Notice of Motion No. 1418 of2008
in Appeal No. 855 of2003 6 seeking an injunction against the parties to
the above-mentioned Development Agreement along with various other
reliefs (the details of which are not necessary for the present).
24. By an order dated 30th April, 2008, a Division Bench of the
F
Bombay High Court while adjourning the hearing of the said Notice of
Motion recorded the undertakings on behalfofthe HDIL that it will not
claim any equity whatsoever in the event ofMHL's success in the above-
mentioned Notice of Motion and demolish the construction, if any, made
during the pendency of the proceeding by the HDIL. It was also stated
G by them that the property which was the subject matter of the
Development Agreement had already been mortgaged in favour of the

'Appeal No. 855 of 2003 on the file of the Bombay High Court was filed by MHL
aggrieved by an order dismissing N.M. no .534 of 2002 in Suit-II filed b,· MHL
seeking the appointment of an administrator to BOCL and Receiver for the assets of
H the said Company.
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 19
[CHELAMESWAR, J.]

Union Bank of India, however, undertook not to create any 3rd party A
rights in the said property.
25. Aggrieved by the said order, MHL filed SLP No. 12734 of
2008 in this Courton 8.5.2008. By an Order dated 16.5.2008, this Court,
while issuing notice on the said SLP granted an order of status quo
regarding the nature, title, etc. of the property in dispute. By an Order B
dated 23.6.2008, the said SLP was disposed of directing that the status
quo order granted earlier on 16.5.2008 shall continue during the pendency
of the Notice of Motions and appeals before the High Court of Bombay.
SUIT-JV
26. On 23.4.2008, MHL filed Suit No.2410 of2008 (hereinafter c
SUIT-IV) against BOCL, RUIAS, .HDIL etc. seeking various reliefs
including a declaration of ownership of 7500 I shares of BOCL etc.
"q) That this Hon 'ble Court be pleased to declare that the Plaintiff
is the beneficial owner of the suit shares being 75001 shares
in the I st Defendant company, more particularly described D
in the schedule annexed as Exhibit A hereto and is entitled
to legal ownership thereof;
r) That the Defendant Nos. I to I 0 be directed by a mandatory
order and injunction of this Hon'ble Court to carry out all
acts, deeds and things and extend all cooperation necessary
E
to secure registration of the suit shares aggregating to 75001
shares in the I st Defendant Company, more particularly
described in Exhibit A hereto in the name of the Plaintiff;
s) That this Hon'ble Court be pleased to declare that the
purported reversion/transfer of the suit shares being 75001
shares in the I st Defendant Company, more particularly F
described in the schedule annexed as Exhibit A hereto by
Defendant No. I 0 to Defendant nos.2 to 9 under the purpo1ted
Agreement dated 5th December, 2002 is illegal, null and void
and of no legal effect;
t) That this Hon'ble Court may be pleased to direct Defendant G
Nos.2 to 9 and I 0 to deliver up the that the said Agreement
dated 05.12.2002 at Ex: CC for cancellation and this Hon'ble
Court be pleased to cancel the same;
u) That this Hon'ble Court .be pleased to issue an Order and
H
20 SUPREME COURT REPORTS [2016] 5 S.C.R.

A injunction restraining Defendant Nos.2 to 10 from exercising
any rights whatsoever in respect of the 75001 suit shares
(more particularly described in the schedule annexed as
Exhibit A hereto) as also from representing to the public at
large that they are owners of the suit shares or have any
beneficial interest therein;
B
v)That this Hon'ble Court be pleased to declare that the
purported Development Agreement dated 4.2 .2008 (Exhibit
MM hereto) and both the powers of attorney dated
05.02.2008 (Exhibit NN & 00 thereto) and any other
documents or acts in pursuance thereof are illegal, null and
c void and of no legal effect;

w) That this Hon'ble Court be pleased to direct the Defendants
Nos. I to I 0 and 12 to deliver up the Development Agreement
dated 04.02.2008 (Exhibit MM hereto) along with the powers
D of attorney dated 05.02.2008 (Exhibit NN & 00 hereto)
are illegal, null and void and ofno legal effect; for cancellation
and this Hon'ble Court be pleased to cancel the same;

x)That this Hon'ble Court be pleased to declare that the
purported mortgage Deed dated 23.3.2008 at Exhibit XX
E hereto said to have been created by Defendant No.12 in
favour of Defendant No.13 is illegal, null and void and ofno
legal effect;

y)Thatthis Hon'ble Court be pleased to direct Defendant Nos. I
to 10, 12 and 13 to deliver up the said deed of mo11gage
F dated 23.3.2008 at Exhibit XX hereto or cancellation and
this Hon'ble Court be pleased to cancel the same;

z)That this Hon'ble Court be pleased to Order and decree
Defendant nos.2 to 10 to jointly and severally pay to the
Plaintiff, damages/compensation in the sum ofRs.500 crores
G as per the Particulars of Claim annexed herewith as Exhibit
ZZ along with interest thereon at the rate of 18% per annum
from the date of the suit till payment and/or realisation;"
We understand that none of the defendants have filed their written
statements and no issues are framed so far.
H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 21
[CHELAMESWAR, J.]

27. lt is in the background of the above-mentioned litigation these A
SLPs are to be examined.
SLP(C) Nos. 33429-33434 of20 I 0 is filed by MHL with prayers:
"a) Grant special leave to appeal under Article 136 of the
Constitution of India against the impugned Final Judgment
and Order dated 1.9.2010 passed by the Hon'ble High Court B
of Judicature at Bombay in Appeal No. 855 of2003 in Notice
of Motion No. 534 of 2002 in Suit No. 509 of 2001 with
Notice of Motion No. 1308 of 2005, Notice of Motion No.
3956 of2005, Notice of Motion No .4118 of2007, Notice of
Motion No. 1973 of 2008, Notice of Motion No. 1418 of c
2008; and
a) Pass such other order or orders as this Hon'ble Court
may deem just and proper in the facts and circumstances of
the case."
D
SLP(C) Nos.23088-23090 of2012 is filed by GGL with prayers:
"a) grant Special Leave to Appeal against the impugned order
dated 01.09.2010 passed by the Hon'ble High Court of
Bombay in Appeal Nos. 840 of2003, 841 of2003 and 857 of
2003, whereby the Hon 'ble High Court was pleased to dismiss E
the appeals filed by the Petitioner Company and uphold the
order dated 26.03.2003 passed by the Ld. Single Judge in
Notice of Motion Nos. 3230 of2000, 1231 of2003 in Suit
No. 2499 of 1999 and 392 of 200 I in Suit No. 509 of 200 I;
and
F
b) pass such other and further orders as this Hon'ble Court
may deem just and proper in the facts and circumstances of
the present case."
Both the sets of SLPs are filed aggrieved by the common order of
a Division Bench of Bombay High Court dated 01.09 .20 I 0 in Civil Appeals G
No. 855i2003, 840/2003, 841/2003 and 857/2003.
28. Civil Appeal 855/2003 was filed by MHL and the other three
appeals were filed by GGL. All the four appeals alongwith the various

H
22 SUPREME COURT REPORTS [2016) 5 S.C.R.

A Notice of Motions were dismissed with costs 7 •
29. The subject matter of appeal No.855/203 is the order of the
Single Judge in Notice of Motion 534/2002 in SUIT-III. In the said
Appeal, five Notice of Motions were filed. They are 1308/2005, 3956/
2005, 4118/2007, 1973/2008 and 1418/2008 seeking various reliefs.
B 30. The subject matter of appeals no.840, 841 and 857 of2003 is
order dated 26.03.2003 of the Single Judge in Notice of Motion Nos.3230/
2000 & 1231/2003 in SUIT-II and Notice of Motion No.392/2001 in Suit
III. Both the abovementioned Suits were filed by RUIAS.
31. SUIT-I is adrnittedly withdrawn, therefore, any order passed
c during the pendency of the said suit by any court (including this Court) in
any proceeding arising out of the said suit automatically lapses with the
withdrawal of the suit. A logical consequence flowing from such lapsing
of the orders is that any act or omission of an:y party to the said suit,
either in pursuance of or in obedience to such interlocutory orders would
D be without any legal efficacy.
32. SUITS II and III filed by the RUIAS are pending as of today.
The substance 8 of SUIT-II is that RUIAS do not want MGG to transfer
any of the shares ofBOCL acquired by MGG pursuant toAGREMEENT-
11 in favour of either GGL or MHL or any other person without first
E offering them to RUIAS. Such a transfer in the opinion of RUIAS would
be in violation of Clause 6.1 of the AGREEMENT-II.
Coming to SUIT-III, RUIAS want to wriggle out of the
AGREEMENT-II and therefore, the various alternative prayers! in
substance seeking to nullify the acquisition of 7500 I shares by MGG
under AGREEMENT-11 9 • They also rely upon the events subsequent to
F
23.06.1997 -transactions between GGL and MGG etc. and seek various

7
All the four Appeals being Appeal Nos.855/2003, 840/2003. 841/2003 and Appeal
No.857/2003 are dismissed with costs.
Notice of Motion Nos. 1308/2005. 3956/2005. 4118/2007. 1973/2008. 1418/2008.
29/2006, 3112/2003, 3113/2002 and Notice of Motion No.3115/2003 in the respective
G
Appeals are also disposed of with the above observations.
8
RUIAS amended the said suits from time to time we find it a little difficult to
understand the legality and the purpose of the SUlT-11 and its amendment subsequent
.to the filing of the SUIT-III We do not i:ish to examine those questions as such
enquiry would be purposeless at this stage in view of the subsequent developments .
.H 9
Prayers (a) to (f) of Suit-III (See para 17 supra)

.:
'
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 23
[CHELAMESWAR, J.]

prayers which are already noticed 10 • Having filed SUIT-III, RUJAS A
once again amended the SUIT-II enlarging the scope of the Suit. Whether
such amendments are legally tenable or not is a question to be examined
from the point of view of the principles governing the law on the question
of joinder of causes of action etc. Apart from that the continuance of
the SUIT-II and SUIT-III simultaneously raises too many questions
B
regarding their maintainability.
However, in our view, such questions need not be examined because
RUJAS and MGG entered into an agreement dated 05.12.2002 the gist
· of which is noticed earlier at para 20 (supra). By the said agreement,
RUIAS also agreed not to prosecute SUITS-II and III insofar as the
suits pertain to "MGG or its affiliates .... " etc.
c
"(a) not to prosecute the following proceedings pending in
the Bombay High Com1 and in Supreme Court oflndia against
"MGG" or its affiliates or its directors, officers or employees
(excluding "MHL" and Goyal MG Gases Ltd. but including
directors nominated by "MGG" on the Board of"MHL" and/ D
or Goyal MG Gases Ltd.);
(i) Civil Suit No.2499 of 1999 titled Shyam Madan Mohan
Ruia & Ors. v. Messer Griesheim GmbH & Ors.
(ii) Civil Suit No.509 of2001 titled Shyam Madan Mohan E
Ruia & Ors. v. Messer Griesheim GmbH & Ors."
As a matter of fact, during the course of hearing of these SLPs
also, both RUIAS and MGG supported the case of each other in opposing
these SLPs filed by MHL and GGL.
33. As a consequence of the settlement dated 5.12.2002, RUIAS F
claim title in 75001 shares of BOCL through MGG. We have already
noticed, the said 75001 shares were initially acquired by MGG from
RUIAS and the public under AGREEMENT-II. But, so far the names
ofRUIAS are not entered in the registers ofBOCL as the holders of the
share because of the various interim orders mentioned earlier.
G
34. However, GGLand MHLdispute the title ofMGG to the said
75001 shares. According to GGL and MHL, by the settlement dated
5.12.2002 MGG had itself lost its title over the said shares as it had
already transferred its title in the said shares in favour ofMHL pursuant
'° Prayer (g) to (k) of Suit Ill (See para 17 supra) H
24 SUPREME COURT REPORTS [2016] 5 S.C.R.

A to the consent award dated 21.9.2000.
35. The existence of title in MGG in the said 75001 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
B transfer pursuant to the consent award. In such a case, because of
MGG 's purported transfer of the title in the 7500 I shares to RUIAS
under the settlement dated 5.12.2002, RUIAS should normally be entitled
to have their names entered into the records ofBOCL 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
c 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 the SUITS-II and Ill filed by the RUIAS. Jn
a bid to establish their title MHL filed SUIT-JV 11 • The right ofMHL, if
D 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 RUIAS pursuant to the
settlement dated 5.12.2002.
36. What exactly is the procedure which RUIAS are required to
E follow to effectuate the transfer of shares pursuant to the settlement
dated 5.12.2002 is for RUIAS to explore. Because during the long
pendency of the instant litigation there is a considerable change in the
law regarding the procedure governing the transfer of shares in companies
by virtue of amendments in the Companies Act, 1956 and the advent of
the Depositories Act, 1996 etc. We make this observation because the
F 75001 shares acquired by MGG pursuant to AGREEMENT-II could not
be registered in the name ofMGG 1 ~ because of the various interim orders
passed by various courts at different stages in SUITS-I, II and III. SUIT-
1 was withdrawn by the plaintiff (GGL). In view of the subsequent
settlement dated 5.12.2002 between MGG and RUIAS, no dispute
G survives between MGG and RUIAS. Therefore, SUITS-II and III are
required to be dismissed as without any cause of action insofar as MGG
and its officers etc., neither MHL nor GGL can compel RUJAS to
11 See prayer (q) in SUIT JV (extracted at para 26 supra)
12 See para 7 and 11 (a) of the settlement dated 5.12.2002 extracted at para 20
supra
H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 25
[CHELAMESWAR, J.]

prosecute those suits. A
37.Then we are left with the questions of continuance of SUITS
II and III against the other defendants (GGI & MHL etc.) and the prayers
regarding the physical custody of the shares 13 • As already noticed from
the settlement dated 5.12.2002, MGG and RUIAS are uncertain about
the whereabouts and custody of 75001 shares! of BOCL which were B
initially acquired by MGG'". RUIAS having entered into settlement dated
5.12.2002 knowing fully well that MGG was not going to give custody of
the above-mentioned 75001 shares, purported to purchase the said shares
and agreed not to prosecute the SUITS-II and III against MGG. In such
a case, continuing the suits either against GGL or MHL or its agents etc.
only for the custody of the shares, in our opinion, is without any cause of
c
action on the part of the RUIAS. The prayers in SUIT-fl and III in this
regard are:

(ii) that the +st defendant Nos. 1, 3, 4 and 5 be ordered and
decreed to deliver/return to the respective plaintiffsthe said D
~ 75,00 I shares togetherwith all accretionsthereto from
23rd June, 1997 on such terms as this Hon'ble Court directs.
- SUIT- II

j) that the I st defendant be ordered and decreed to deliver/
return to the respective plaintiffs the said 45,001 shares E
together with all accretions thereto from 23rd June 1997 on
such terms as this Hon'ble Court directs.

- SUIT-III

i.e. for a declaration in favour of RUIAS that they are· entitled to
F
the recovery of75001 shares jointly against MGG, GGL and MHL etc.
RUIAS having agreed not to prosecute the suits against MGG cannot
continue the suits against other defendants in the suits whose claim (if
any) rests on the right and title ofMGG.

The continuance of the SUITS-JI and III, in ouropinion, is, therefore, G
13
There is no whisper in the plaints of either Suit II or III, of MGG haying had
obtained the custody of the share certificates either from RUIAS (of 45001 shares)
or from the public (of 30000 shares) .
. " See paras 6 and 7 of the settlement dated 5.12.2002 extracted .at para 20 supra.
H
26 SUPREME COURT REPORTS [2016] 5 S.C.R.

A wholly without any cause ofaction and an abuse of the judicial process."
They are, therefore, required to be dismissed and accordingly dismissed.
Consequently, all the interim orders passed by the various Courts (including
this Court) earlier in proceedings arising out of the said two suits lapse.
We also declare that all interim orders passed by any Court in any
proceeding arising out of SUIT-I also lapsed in view of the withdrawal
B
of the suit by GGL.
Therefore, these SLPs filed by MHL and GGL purportedly
aggrieved by the impugned orders passed in the various applications

"See K.K. Modi v. K.N. Modi & Others. ( 1998) 3 SCC 573
c Para 42- "Under Order 6 Rule 16. the court may. at any stage of the proceeding. order
to be struck out. inter alia. any matter in any pleading which is otherwise an abuse of
the process of the court. Mulla in his treatise on the Code of Ciri/ Procedure. (15th
Edn .. Vol. JI, p. 1179. note 7) has stated that power under clause (c) of Order 6 Rule 16
of the Code is confined to cases where the abuse of the process of the court is manifest
from the pleadings: and that this power is unlike the power under Section 151 whereunder
D courts have inherent power to strike out pleadings or to stay or dismiss proceedings
which are an abuse of their process. In the present case the High Court has held the suit
to be an abuse of the process of the court on the basis of what is stated in the plaint."
Para 43- "The Supreme Court Practice 1995 published by Sweet & Maxwell in
paragraphs 18/19/33 (p. 344) explains the phrase "abuse of the process of the cou1t"
thus:
"This term connotes that the process of the court must be used bona fide and properly
E and must not be abused. The court will prevent improper use of its machinery and will
in a proper case, summarily prevent its machinery from being used as a means of
vexation and oppression in the process of litigation .... The categories of conduct
rendering a claim frivolous. vexatious or an abuse of process arc not closed but depend
on all the relevant circumstances. And for this purpose considerations of public policy
and the interests of justice may be very material." "
Para 44- "One of the examples cited as an abuse of the process of the court is relitigation.
F It is an abuse of the process of the court and contrary to justice and public policy for
a party to relitigate the same issue which has already been tried and decided earlier
against him. The reagitation may or may not be barred as rcsjudicata. But ifthe same
issue is sought to be reagitatcd. it also amounts to an abuse of the process of the court.
A proceeding being filed for a collateral purpose, or a spurious claim being made in
litigation may also in a given set of facts amount to an abuse of the process of the court.
Frivolous or vexatious proceedings may also amount to an abuse of the process of the
G court especially where the proceedings are absolutely groundless. The court then has
the power to stop such proceedings summarily and prevent the time of the public and
the court from being wasted. Undoubtedly, it is a matter of the court's discretion
whether such proceedings should be stopped or not; and this discretion has to be
exercised with circumspection. It is ajurisdiction which should be sparingly exercised,
and exercised only in special cases. The court should also be satisfied that there is no
chance of the suit succeeding."
H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUJA 27
[CHELAMESWAR, J.]

filed in the two suits filed by RUIAS become infructuous. Therefore, A
the said SLPs arising therefrom are dismissed.
38. The consequent factual position would be:
(i) the legal rights acquired (whatever they are) by MGG in
45001 shares ofBOCL purchased from RUIAS pursuant to
AGREEMENT-II should reve11 back to RUIAS unless it is B
found that the purported transfer of 45001 shares by MGG
pursuant to the consent award dated 21.09 .2000 in favour of
MHL created any right or interest in favour of MHL. Such
a claim of MHL can only be examined in SUIT-IV filed by
MHL. c
(ii) Another 30000 shares were acquired by MGG from the public
pursuant to AGREEMENT-II MGG purported to transfer
them by virtue of the settlement dated 05.12.2002 in favour
ofRUIAS. If either GGL or MHL has any claim over those
shares, such a claim must be made and established by them D
in accordance with law, but not in the suits filed by RUIAS.
In order to establish such a claim, MHL already filed SUIT-
JV to which both GGL and MGG are parties apart from
Goyals and others.
39. However, in the absence of any legally established title as on E
today to the abovementioned shares in any party other than MGG' 6,
whether RUIAS would be entitled pursuant to the settlement dated
05.12.2002 to have their names entered into the registers of the BOCL
as holders of the said shares is a matter for RUIAS to explore' 7•
However, such an entitlement if any should be subject to the result of
the SUIT-IV. F

40. We make it clear that we are not deciding by this order, the
existence or otherwise of any right or its enforceability in the 75001
shares ofBOCL in favour of either MHL or GGL. It is open to them to
establish their right in SUIT-IV. The defendants in the SUIT-IV are at
liberty to raise every defence available in law and fact to them. G

16
Even MGG's claim was that they had only a beneficial interest in the said shares,
as the shares were never registered in the name of MGG.
17
There is no prayer in the Suits II and Ill seeking the declaration of title of RUlAS
based on the settlement dated 05.12.2002 - for that matter, there is no whisper
about the said settlement!
H
28 SUPREME COURT REPORTS [2016] 5 S.C.R.

A 41. A great deal of effort was made both by RU IAS and MGG to
convince the court that in view of the protracted litigation between the
parties this court should examine all the questions of rights, title and
interest in these shares between the various parties as if this were the
court of first instance trying these various suits.
B 42. The examination of various questions raised by the petitioners
in these SLPs, in ouropinion, is wholly uncalled for in the abovementioned
factual background.
43. The net effect ofall the litigation is this. For the last 18 years,
the litigation is going on. Considerable judicial time of this country is
c spent on this litigation. The conduct ofnone of the parties to this litigation
is wholesome. The instant SLPs arise out of various interlocutory
proceedings. Arguments were advanced on either side for a period of
about 18 working days as if this Court were a Court of Original Jurisdiction
trying the various above-mentioned suits. The fact remains that in none
of the suits even issues hnve been framed so far. The learned counsel
D appearing for the parties very \'ehemently urged that there should be a
finality to the litigation and therefore this Court should examine every
question of fact and law thrown up by the enormous litigation. We
believe that it is only the parties who are to be blamed for the state of
affairs. This case, in our view, is a classic example of the abuse of the
E judicial process by unscrupulous litigants with money power, all in the
name oflegal rights by resorting to halt~truths, misleading representations
and suppression of facts. Each and every party is guilty of one or the
other of the above-mentioned misconducts. It can be demonstrated (by
a more elaborate explanation but we believe the facts narrated so far
would be sufficient to indicate) but we do not wish to waste any more
F time in these matters.
44. This case should also serve as proof of the abuse of the
discretionary Jurisdiction of this Court under Article 136 by the rich and
powerful in the name ofa 'fight for justice' at each and every interlocutory
step ofa suit. Enormous amount of judicial time of this Court and two
G High Courts was spent on this litigation. Most of it is avoidable and
could have been well spent on more deserving cases.
This Court in Ramrameshwari Devi & Others v. Nimwla Devi
& Others, (2011) 8 SCC 249 observed at para 54;

H
MESSER HOLDINGS LTD. v. SHYAM MADANMOHAN RUIA 29
[CHELAMESWAR, J.]

"54. While imposing costs we have to take into consideration A
pragmatic realities and be realistic as to what the defendants
or the respondents had to actually incur in contesting the
litigation before different courts. We have to also broadly
take into consideration the prevalent fee structure of the
lawyers and other miscellaneous expenses which have to be
B
incurred towards drafting and filing of the counter-affidavit,
miscellaneous charges towards typing, photocopying, court
fee, etc."
45. We therefore, deem it appropriate to impose exemplary costs
quantified at Rs.25,00,000.00 (Rupees Twenty Five Lakhs only) to be
paid by each of the three parties i.e. GGL, MGG and RUIAS. The said c
amount is to be paid to National Legal ServicesAuthority as compensation
for the loss ofjudicial time of this country and the same may be utilized
by the National Legal Services Authority to fund poor litigants to pursue
their claims before this Couti in deserving cases.
D
Devika Gujral SLPs disposed of.