1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO. 78 OF 20 0 IN CHAMBER SUMMONS NO. 587 OF 2007 IN SUIT NO. 337 6 OF 20 05 SAHARA INDIA COMMERCIAL CORPORATION LTD. ] a company registered under the provisions ] of Companies Act, 1956 and having its ] registered office at Sahara India Sadan, ] 2A, Shakespeare Sarani, Kolkatta-700 071. ] and having one of its branch offices at ] CTS No.40-44, S.V.Road, Goregaon (West) ] Mumbai - 400 014. ].. Appellants Versus 1. M/s. B. JEEJEEBHOY VAKHARIA & ] ASSOCIATES, a partnership firm ] registered under the provisions of ] Indian Partnership Act,1932 and having ] its office at 83, Jolly Maker Chambers ] II, Nariman Point, Mumbai-400021. ] 2. MADHUSUDAN BRIJLAL VAKHARIA, ] of Mumbai, Indian inhabitant, residing ] at 1601, Veena Towers, Opp. Colaba ] Post Office, Colaba, Mumbai - 400005. ] 3. BYRAMJEE N. JEEJEEBHOY of Mumbai, ] Indian inhabitant, residing at Grant ] Paradi Bungalow No.2, August Kranti ] Marg, Mumbai - 400026. ] 4. USHA MADHU DEVELOPMENT CO-OP.HSG. ] SOCIETY LTD., a society registered ] under Bombay Cooperative Societies Act ] having their office at CTS No.1 near ] Green Park, of Link Road, Village ] Pahadi, (Goregaon), Mumbai - 400062. ] 2 5. VAKHARIA ESTATES & INVESTMENTS PVT.LTD. ] a Company registered under Companies ] Act, 1956,having its registered office ] at 83, Joly Maker Chamber II, Back Bay ] Reclamation, Nariman Point, Mumbai-21. ] 6. MEHROO JEEJEEBHOY INVESTMENTS PVT.LTD. ] a Company registered under Companies ] Act, 1956, having its office at 83, ] Jolly Maker Chambers II, Nariman Point ] Mumbai - 400021. ] 7. BEELINE IMPEX PVT. LTD., a Company ] registered under Companies Act, 1956, ] having its registered office at 83, ] Jolly Maker Chambers II, Back Bay ] Reclamation, Nariman Point, Mumbai-21. ] 8. BEEJAY BUILDERS PVT. LTD., a Company ] registered under Companies Act, having ] its office at 83, Jolly Maker Chambers ] II, Nariman Point, Mumbai - 400021. ] 9. USHA HOLDINGS PVT. LTD., a Company ] registered under Companies Act, 1956, ] having its office at 83, Jolly Maker ] Chambers II, Nariman Point, Mumbai-21. ] 10.MAJAS LAND DEVELOPMENT PVT. LTD., ] a Company registered under Companies ] Act, 1956, having its office at 83, ] Jolly Maker Chambers II, Nariman Point ] Mumbai - 400 021. ] 11.PEARL COSMETICS & CHEMICALS PVT.LTD., ] a company incorporated under Companies ] Act, 1956,having its registered office ] at 83, Jolly Maker Chamber II, Back ]..Respondents Bay Reclamation, Nariman Point, ](Orig.Defdts. Mumbai - 400 021. ] No.1 to 11) 3 ALONGWITH NOTICE OF MOTION NO. 1421 OF 2009 Mr. Rohit Kapadia, senior counsel with Mr. Nitin Thakkar, senior counsel and Mr. Gaurav Joshi i/b Ms.Tanvi Gandhi for the appellants. Mr. Aspi Chinoi/Mr.V.A. Thorat, senior counsel withMr. Vivek Kantawala for the respondent No.4. Mr. Milind Sathe, senior counsel with Mr. Akram Bastivi i/b M/s. Hiralal Thakkar & Co. for respondents No.1, 2, 3, 5, 6, 8, 9 and 10. Mr. Tushar Goradia with Mr. Kishore Jain for the respondents No.7 and 11. CORAM: S.B. MHASE A.A. SAYED, JJ. DATED: 22ND APRIL, 2009 ORAL JUDGMENT. : [Per S.B. Mhase, J.] 1. This Appeal is directed against the judgment and order passed by the learned single Judge of this court on 24th December, 2008 in Chamber Summons No.587 of 2007 in Suit No.3376 of 2005. By the said judgment and order the learned single Judge has rejected the Chamber Summons proposing to amend the Plaint. 2. For the sake of convenience, the appellant is referred to as plaintiff 4 and the respondents are referred to as defendants No.1, 2, 3, 4 and so on respectively. 3. The plaintiff filed Suit No.3376 of 2005 on the Original Side of this Court praying for several reliefs as claimed in paragraph 67 of the Plaint. The suit is based on Memorandum of Understanding dated 22nd December, 2001, executed between the plaintiff and the defendant No.1 and the plaintiff has, inter alia, prayed for specific performance of the same. It has also been prayed in the suit that the Consent Decree passed in Suit No.4925 of 2000 is null and void and has no effect or consequence and, in any event, it is not binding upon the plaintiff and/or the 177 companies controlled by the plaintiff and/or the defendant No.4 of which the said 177 companies are the members. At this juncture, it is not necessary to go into the factual averments in the Plaint. Suffice it to state that the defendant No.4 Usha Madhu Cooperative Housing Society is a registered society under the Bombay Cooperative Societies Act and, therefore, a Cooperative Society under the Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as "MCS Act"). Section 164 of the said MCS Act reads thus: “ 164. Notice necessary in suits:- No suit shall be instituted against a society, or any of its officers, in respect of any act touching the business of the society, until the expiration of two months next after notice in writing has been delivered to the 5 Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has been so delivered or left." 4. With regard to this provision, the plaintiff has averred in paragraph 62 of the Plaint as follows: "The Plaintiff submits that notice under Section 164 of Maharashtra Co-operative Societies Act, 1960 is not necessary as far as the Defendant No.4 is concerned." Thus, at the time of filing of the suit, there was no notice issued and served as provided under section 164 and it is the case of the plaintiff that such notice is not necessary so far as defendant No.4 is concerned. Thus, it is a fact on record that the suit as against defendant No.4 was filed without issuing notice under section 164 of the MCS Act. Whether such a notice to the defendant No.4 is necessary or not is a matter to be considered in the suit when the suit reaches the stage of final hearing. 5. After filing of the suit, the plaintiff filed Notice of Motion No.3950 of 2005 and the learned single Judge allowed the said Notice of Motion. It is admitted before this court by Mr. Aspi Chinoi, the learned senior counsel appearing for the respondent No.4 that the objection of non compliance of section 164 of the MCS Act, though raised while opposing the said Notice of 6 Motion, the same was given up then for the time being for hearing of the said Notice of Motion. He submitted that the said objection of non compliance of section 164 of the MCS Act was given up for the time being for hearing of said Notice of Motion because, according to him, had it been pressed by the defendants, the matter would have come under section 9-A of the Code of Civil Procedure (Maharashtra Amendment) and it would then have been necessary to record evidence for disposal of the said objection. The procedure under Section 9-A requires that the issue in respect of jurisdiction and/or maintainability of the suit at the time of granting and/or hearing interlocutory applications is required to be heard finally by recording evidence. Therefore, the learned senior counsel submitted that had the said issue been pressed at that time, the hearing of the Notice of Motion would have prolonged and, therefore, the said objection was not pressed at that point of time. According to him, this was done as the defendants were in a hurry to get the said Motion disposed of as there was an ad-interim order running against the defendants. However, the learned senior counsel for the plaintiffs submitted that the objection was waived and given up by the defendants. We need not enter into this controversy at this stage because we find that it is not necessary for us to adjudicate on this point at this stage in this appeal. However, since the submissions have been made in this regard, we have recorded it. 7 6. Notice of Motion No.3950 of 2005 was heard by the learned single Judge under the above referred circumstances and the learned single Judge granted relief as prayed for in the said Notice of Motion in favour of the plaintiff. However, the defendants preferred Appeal No.496 of 2007 as against the said order passed in Notice of Motion No.3950 of 2005. The said Appeal was disposed of by the Division Bench (R.M.S. Khandeparkar & P.B. Majmudar, JJ.) of this court on 11th June, 2008. The Division Bench allowed the said Appeal and set aside the impugned order and dismissed the Notice of Motion No.3950 of 2005. The ad-interim relief which was running against the defendants was not continued by the Division Bench and the prayer made to that effect was also rejected. However, the learned counsel for the defendants No.1, 4, 7 and 11 had made a statement before the court that the defendants would not create any third party rights in the property in question for a period of four weeks from the date of the said order. The plaintiff, being aggrieved by the said judgment and order passed in Appeal No.496 of 2007 dated 11th June, 2008, preferred Special Leave Appeal (Civil) No.15654 of 2008 before the Apex Court. The undertaking given by the defendants No.1, 4, 7 and 11 was continued by the Apex Court, initially when the notice was issued in the said SLP and it has been continued when the SLP was disposed of by the Apex Court by order dated 5th February, 2009 which was subsequently modified by the Apex Court. Suffice it to state at this stage that the 8 undertaking given by the defendant No.4 that the defendant No.4 will not create any third party interest is continuing as against defendant No.4 even today. The Apex Court merely granted injunction in invitum. The Apex Court has further granted liberty to the defendant No.4 to move the Apex Court for modification of the said undertaking in case the Appeal preferred against the Chamber Summons No.587 of 2007 viz. the present Appeal No.78 of 2009 is disposed of in favour of the defendant No.4. While disposing of the above SLP, the Apex Court has directed this court to dispose of the Suit No.3376 of 2005 expeditiously without being influenced by the orders of the Division Bench and Single Judge in the Notice of Motion referred to above. The Apex Court has also directed, having taken note of the fact that the Appeal as against Chamber Summons No.587 of 2007 viz. The t Appeal is pending before this Court, that the Appeal should be disposed of as expeditiously as possible, preferably within a period of one month with liberty as stated above, for modification of the undertaking if the present appeal is decided in favour of the defendant No.4. Under these circumstances, we have heard the present Appeal filed by the plaintiff. 7. We have noted above the provisions of section 164 of the MCS Act and the pleading of the plaintiff in paragraph 62. However, it appears that in view of the objection of the defendant, though waived at the time of 9 hearing of the Notice of Motion as stated above, that Notice under Section 164 of the MCS Act is necessary to be served on defendant No.4 and in the absence of service of such a notice, the suit may not be maintainable; the plaintiff appears to have decided to comply with the said provisions and, therefore, has given a notice under section 164 of the MCS Act on 8th February, 2007 to the Registrar of Cooperative Societies and the said notice was served on 9th February, 2007. After the expiry of two months, on 16th April, 2007, the plaintiff has filed Chamber Summons No.587 of 2007. In the Chamber Summons, the plaintiff made two prayers. It appears that at that time, the Notice of Motion No.3950 of 2005 was pending and, therefore, prayer (a) was made, which reads thus: “ (a) Without prejudice to the pending Notice of Motion No.3950 of 2005 leave be granted to the Plaintiff to carry out amendment as per the schedule to the Chamber Summons." The Schedule provided thus; 1. Add as paragraph 62 of the Plaint (a) Without prejudice to the submissions contained in paragraph 62 above the Plaintiff submits that Plaintiff has by its Advocate's notice dated 8th February, 2007 has given notice to the Registrar of the Co-op. Societies Act, State of Maharashtra. The said notice was served on the Registrar of Co-operative Societies on 9th April, 2007. Hereto annexed and marked Exhibit "FFF" is a 10 copy of the said notice along with the acknowledgement. Thus, the plaintiff desires to amend the Plaint by addition of this paragraph and that was prayer (a) of the Chamber Summons. By way of prayer (b), the plaintiff prayed as follows: "(b) In the alternative to prayer (a) above the following be granted. (i) Permit the Plaintiff to delete Defendant No.4 from the suit and allow the amendment as per schedule annexed hereto and add Defendant No.4 again to the suit." Thus, in the alternative prayer in addition to the amendment to paragraph 62 as stated above, the plaintiff prayed for permission to delete defendant No.4 and to re-add defendant No.4 to the suit along with the proposed amendment of paragraph 62. This Chamber Summons was heard by the learned single Judge and was rejected by an order dated 24th June, 2008. The plaintiff, being aggrieved and dissatisfied by the order of the earned single Judge dated 26th June, 2008, has filed this Appeal before this court. 8 Since there were directions for expeditious hearing of the suit and 11 of this Appeal by the Apex Court, as stated earlier, and referred to in the above referred SLP, the matter was listed and was heard on 8th April, 2009. The arguments concluded on 9th April, 2009. Mr. Rohit Kapadia, the learned senior counsel for the plaintiff submitted before this court that the single Judge committed an error in considering the Chamber Summons filed by the plaintiff under an inherent power of the Civil Procedure Code. The learned senior counsel for the plaintiff submitted that the Chamber Summons could have been considered under Order XXIII Rule 1(3) of the Code of Civil Procedure. He submitted that the amendment and the prayers in the Chamber Summons were being proposed by the plaintiff as alternate pleadings. He submitted that he still maintains that the notice under section 164 of the MCS Act is not necessary to be given to defendant No.4 in the facts and circumstances of the case and that he will satisfy the court on this issue at the time of final hearing of the suit. But, by way of abundant precaution the plaintiff has issued such a notice and complied with the requirement section 164 and, therefore, in further compliance of section 164 the Chamber Summons has been moved. He further submitted that by prayer (b) the plaintiff desires to withdraw the suit as against the defendant No.4 with a liberty to file a fresh suit since the non service of the notice under section 164 was a formal defect in the suit and since by such deletion and addition the plaintiff desired to remove the said formal defect in the suit, and accordingly, the prayer for deletion 12 and addition of defendant No.4 has been sought for. He further submitted that simultaneously the plaintiff have prayed for inclusion of defendant No.4 along with the added portion of paragraph 62 and by this process he desired to comply with section 164 and also the requirement of filing of fresh suit after withdrawal of first suit by taking permission of the court. 9. The learned senior counsel, in support of his contentions, has relied upon AIR (32) 19 45 Bom. 74 in the matter of Champaklal Purshottamdas and anr. Vs.Bai Narbadabai & ors.; AIR 196 3 SC 424 in the matter of Amar Nath Dogra Vs. Union of India wherein the Apex Court has dealt with the provisions of section 80 of the Code of Civil Procedure which are analogous to that of section 164 of the MCS Act. Reliance was also placed on AIR 198 4 SC 100 4 in the matter of Ghanshyam Dass Vs.Dominion of India and ors. which is again a case referring to section 80 of the Code of Civil Procedure. The learned senior counsel ultimately prayed for allowing the Chamber Summons. 10. Mr. Aspi Chinoi, the learned senior counsel appearing on behalf of the respondents No.4 submitted that the provisions of section 164 of the MCS Act are mandatory provisions and the suit as against defendant No.4 being a Cooperative Society, cannot be filed unless notice under section 13 164 is served. He also made a reference to his statements which he made before the learned single Judge at the time of hearing of the Notice of Motion No.3950 of 2005 which has been quoted by us above. He further submitted that the practice of filing a suit without issuance of statutory notice as provided under the statute and to obtain interim relief and hereafter to issue notice as provided in the statute and pray for withdrawal of the suit after maturity of such a notice and thereafter to file a fresh suit is a practice of circumvention of the statutory provisions and the same has not been approved by the Apex Court. He very heavily relied upon the observations made by the Apex Court in AIR 198 4 SC 100 4 in the matter of Ghanshyam Dass & ors. Vs. Dominion of India and ors. (supra) relied upon by the plaintiff specially paragraph 23 which reads thus: “ 23. Before parting with the case we consider it necessary to refer to one more aspect. It has frequently come to our notice that the strict construction placed by the Privy Council in Bhagchand's case (AIR 1927, PC 176) supra, which was repeatedly reiterated in subsequent cases, has led to a peculiar practice in some courts. Where urgent relief is necessary, the practice adopted is to file a suit without notice under Section 80 and obtain interim relief and thereafter to serve a notice, withdraw the suit and institute a second suit after expiry of the period of the notice. We have to express our strong condemnation of this highly objectionable practice. We expect that the High Courts will take necessary steps to put a stop to such practice." 14 Thus, he stated that when the Supreme Court has condemned such practice being a highly objectionable practice, it will not be proper to allow the Chamber Summons and he submitted that the Chamber Summons has been rightly rejected by the learned single Judge after observing that the said Chamber Summons has been filed to circumvent the provisions of law and defect in the Plaint. 11. After hearing of the matter as indicated above, the matter was reserved for judgment and listed for orders on 13th April, 2009. On that day when the matter appeared before this Court this Court found that in the Chamber Summons prayer (b) has been made to delete defendant No.4 and thereafter to add defendant No.4 alongwith the proposed amendment of paragraph 62.This court pointed out to the learned senior counsel in open court that while seeking deletion of defendant No.4 there is no permission sought to withdraw the suit as against defendant No.4 with a liberty to file fresh suit. Therefore, under these circumstances, how and in what manner the plaintiffs' case can be considered under Order XXIII Rule 1(3) even though he has made the submission to that effect. As this aspect was not discussed at that time of hearing we also suggested him to consider as to whether it will be appropriate for the plaintiff to amend the Chamber Summons and/or to withdraw the Chamber Summons with a liberty to file fresh Chamber Summons. On this aspect both the sides 15 were unable to make immediate submissions and more specifically the learned counsel for the plaintiff, who submitted that time may be granted to consider this aspect and, therefore, with the consensus of all the parties, the matter was re-fixed for hearing on this aspect on 17th April, 2009. On the said date, the learned senior counsel Mr. Rohit Kapadia submitted that even though there is no specific prayer made in the language of Order XXIII Rule 1(3), yet the court can mould a relief in the facts and circumstances of the case and the prayer to delete defendant No.4 and prayer to include defendant No.4 with addition of paragraph 62 is, in substance, a prayer under order XXIII Rule 1(3). To buttress this submission he relied upon AIR 199 8 Gujarat 193 in the matter of State of Gujarat & ors etc. Vs. S.C. Agrawal & ors. He also submitted that by way of abundant precaution he is moving a Notice of Motion to amend the prayer clause of the Chamber Summons No.587 of 2007 being Notice of Motion No.1421 of 2009. The plaintiff has proposed an amendment to include prayer (bb) to the Chamber Summons No.587 of 2007. The said prayer clause (bb) is as follows : bb) in any event the Plaintiff be granted to withdraw the suit against Defendant No.4 by deleting name of the Defendant No.4 from the record of the Plaint and be granted liberty to file a subsequent suit against Defendant No.4 on the same cause of action by joining Defendant No.4 back in the suit and be permitted to amend the plaint by amending the same as per the 16 Schedule annexed to the Chamber Summons." 12. Since this Notice of Motion to amend the Chamber Summons No.587 of 2007 was moved across the Bar, the learned senior counsel Mr. V.A. Thorat who appeared for the first time in the matter submitted that he desired to file a reply to the Notice of Motion and, therefore, the matter was adjourned once again to 20th April, 2009. The defendants have filed their reply and the plaintiff has also filed their rejoinder. Under these circumstances, this Notice of Motion is numbered as Notice of Motion No.1421 of 2009 and it is under these circumstances, this Notice of Motion is before this court. We heard the Notice of Motion. The learned senior counsel Mr. Rohit Kapadia, relied upon AIR 199 8 Gujarat 19 3 in the matter of State of Gujarat & others etc. Vs. S.C. Agrawal and others. He has also relied upon AIR (39) 19 52 SC 47 in the matter of Kedar Lal Seal & anr. Vs. Hira Lal Seal and also on AIR 196 2 SC 63 3 in the matter of Jankirama Iyer and ors. Vs. P.M. Nilakanta Iyer and ors. Mr. Rohit Kapadia, the learned senior counsel for the plaintiff relied upon sections 151 and 153 of the Code of Civil Procedure as a source of power of this court for grant of amendment to the Chamber Summons. 13. Mr. V.A. Thorat, the learned senior counsel opposed the said Notice of Motion taking an exception to the Motion on the ground that at the appellate stage the Chamber Summons which is filed before the single 17 Judge cannot be amended and there is no procedure to that effect. The learned counsel submitted that powers under section 151 cannot be invoked, in view of the fact that the procedure has been provided for and the power under section 151 is to be used sparingly by the court for the interest of justice. In support of his contention, he relied upon AIR 196 4 SC 993 in the matter of Arjun Singh Vs. Mohindra Kumar