IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 22.7.2009 Company Application No.82 of 2009 in Company Application No.211 of 2003 and Company Application No.241 of 2009 in Company Petition No.130 of 1999 P.JYOTHIMANI,J. Company Application No.82 of 2009 is filed by the applicant  Mr.R.Vijayaumar seeking permission to him to institute the intending suit in respect of the property situate at Kazhipattur Village comprised in Survey No.1  45 Cents, Survey No.3  35 Cents, Survey No.22/1  85 Cents, S.No.3  120 Cents in all measuring an extent of 2.85 Acres situate in Kancheepuram District, which is the subject matter of sale in C.A.No.211 of 2003 in C.P.No.130 of 1999. 2. In respect of the second respondent (company in liquidation), Mr.M.Ravindran, learned Senior Advocate has been appointed as an Administrator and he is taking steps to find out the various properties belonged to the company, the rights and liabilities, and is administering the assets along with the Official Liquidator. The learned Administrator has filed C.A.No.241 of 2009 for a direction against the said Mr.R.Vijayakumar to hand-over documents pertaining to the land in Survey No.19/2D measuring 20 Cents at Kazhipattur Village, Chengalpet Taluk, Kancheepuram District. 3. The applicant in C.A.No.82 of 2009 is stated to have been the owner of 15 Acres of land in Kazhipattur Village and 50 Cents of land in Muthukkadu Village, having acquired 5.28 Acres in Kazhipattur Village and 50 Cents in Muthukkadu Village under a registered sale deed dated 17.2.1986, and the remaining extent at Kazhipattur Village, comprised in various survey numbers, was acquired by M/s.Goodluck Inn Private Limited, represented by its Managing Director  Mr.R.Vijayakumar. 4. The first respondent  Mr.C.Natesan of Anubhav Plantations Limited is stated to have entered into an agreement for sale of the said properties with the applicant in C.A.No.82 of 2009 on 9.6.1996. It is stated that the price of the land under the said agreement was fixed at Rs.11,250/- per Cent in Kazhipattur Village and at Rs.45,000/- per Cent in Muthukkadu Village. According to the applicant in C.A.No.82 of 2009, pursuant to the said agreement of sale, the said Mr.C.Natesan, the first respondent was liable to pay a sum of Rs.1,91,25,000/-, out of which a sum of Rs.40 Lakhs was paid as advance. 5. It is his further case that, pursuant to the said agreement for sale, the applicant has executed sale deeds in favour of the first respondent and his nominees except in respect of 4.21 Acres situate at Kazhipattur Village. According to him, in respect of those lands, even though the documents were prepared and signed, they were not registered. However, the applicant restricts his claim only in respect of 2.85 Acres in respect of which, according to him, three documents were prepared, but were not signed by him nor registered in accordance with law. It is stated that the first respondent  Mr.C.Natesan and his nominees have paid an amount of Rs.1,70,00,000/- leaving a balance of Rs.21,25,000/-. 6. After the second respondent was directed to be wound up in C.P.No.130 of 1999 and the Official Liquidator along with the third respondent was appointed as Administrator on 2.11.1999, it is stated that the learned Administrator has issued notice to the applicant in C.A.No.82 of 2009 on the premise that the said sales were effected in favour of M/s.Anubhav Plantations Limited (company in liquidation), for which the applicant has filed his objection stating that the purchase by the first respondent was in his individual capacity and the sale consideration was paid by the first respondent as an intending purchaser. However, the learned Administrator initiated action to sell the properties before the Company Court, by treating those properties as that of the Company in liquidation. 7. On an application filed by the learned Administrator in C.A.No.211 of 2003 in C.P.No.130 of 1999, the property to an extent of 7.85 Acres or thereabout was stated to have been sold through Court for a consideration of Rs.50 Lakhs as per the order dated 12.11.2003. It is stated that the said property to an extent of 7.85 Acres was sold to the fourth respondent in court auction sale for Rs.50 Lakhs and a sale deed was executed on 13.10.2005 and registered as Document No.885 of 2005 in favour of the fourth respondent. 8. The case of the applicant is that in respect of an extent of 2.85 Acres, since the sale was not completed in favour of the first respondent, the sale effected through Court auction is not valid. It is his case that inasmuch as the company in liquidation was not owning the said property, as there was no vesting of those properties with the company, the sale effected through Court is not valid and if at all there is any right over the company that can only be for specific performance. It is his further case that the sale effected to the fourth respondent is not valid in law and the applicant is taking steps to file a comprehensive suit to set aside the sale. It is in respect of the same, the present application seeking leave of this Court is filed. 9. The learned Administrator, in his report, has stated that M/s.Goodluck Inn Private Limited, represented by Mr.R.Vijayakumar, as an owner of the land and Power of Attorney holder of some land owners, agreed to sell 21.18= Acres of land in Kazhipattur Village and 50 Cents of land in Muttukadu Village to the first respondent  Mr.C.Natesan, Chairman-cum-Managing Director, Anubhav Group of Companies for a consideration of Rs.1,91,25,000/-. It is stated that, as per the agreement, the applicant has received Rs.1,93,00,000/- from the company and executed 39 sale deeds in favour of the nominees of the first respondent. Out of the said 39 sale deeds, 25 have been registered and 14 remain unregistered, which is to an extent of 12.32= Acres. 10. It is stated that out of the said 12.32= Acres, the applicant has conveyed 4.54 Acres of Government land, in which there are more than 250 huts. On a report filed by the Administrator, this Court has ordered investigation by CBCID on 16.8.2001 and the CBCID filed its report on 9.11.2001. Thereafter, this Court, by order dated 14.11.2001, directed the CBCID to proceed with the case in accordance with law. 11. It is stated that, as against the said order of this Court, Mr.R.Vijayakumar has filed an appeal in O.S.A.No.401 of 2002, in which there was an order of stay. On an application filed by the Administrator to vacate the order of stay, the Division Bench has dismissed the appeal on 26.2.2003. It is stated that, thereafter, the CBCID filed a charge sheet and the matter is pending before the XI Metropolitan Magistrate, Saidapet in C.C.No.6535 of 2003 and the said Mr.R.Vijayakumar has obtained anticipatory bail from this Court with certain conditions, viz., depositing Rs.50 Lakhs and surrendering his passport, which was subsequently modified directing the furnishing of bank guarantee for Rs.50 Lakhs and the bank guarantee, as directed, was furnished in favour of the Official Liquidator. The remaining land to an extent of 7.785 Acres was sold in open auction in the Court for Rs.50 Lakhs in favour of the fourth respondent and the sale deed has also been executed in favour of him. 12. It is stated that this Court, by order dated 4.3.2005, has directed Mr.R.Vijayakumar to pay an amount of Rs.20 Lakhs towards the full and final settlement in respect of the government land measuring an extent of 4.20 Acres in Survey No.20 at Kazhipattur Village, which was sold by him. It was after payment of the said amount, the bank guarantee came to be revoked. 13. It is stated that the Administrator has moved an application in C.A.No.243 of 2004 against the said Mr.R.Vijayakumar to hand-over the vacant possession of other lands agreed to be sold to the company in liquidation. In the said application, Mr.R.Vijayakumar filed an application for setting aside the sale which was dismissed and the appeal against the said order was also dismissed, apart from dismissal of the Special Leave Petition by the Supreme Court. 14. The learned Administrator has stated that Mr.R.Vijayakumar, in his affidavit dated 16.3.2004 filed in C.A.No.211 of 2003 in C.P.No.130 of 1999, to set aside the order in the said application dated 12.11.2003 has clearly admitted that an extent of 0.20 Acres belonging to the company in liquidation in Survey No.19/2D was by mistake left out to be sold and he has also stated that the said property can be sold by the Administrator, for which he has no objection. It is in view of the said undertaking by the said Mr.R.Vijayakumar, the learned Administrator has filed C.A.No.241 of 2009. 15. It is the contention of Mr.R.Thiagarajan, learned counsel appearing for the applicant in C.A.No.82 of 2009 that this application is filed only seeking leave of this Court under Rule 9 of the Companies (Court) Rules, 1959 to enable the applicant to file, on the Original Side, a suit for declaring that the sale effected in respect of 2.85 Acres of land at Kazhipattur Village as invalid and non-est in the eye of law, apart from declaring that the applicant is the owner of the property and for other reliefs of injunction. 16. It is his submission that for the sale of the property, which was effected in favour of the first respondent in his individual capacity, the first respondent has paid an amount of Rs.1,70,00,000/- out of the agreed sale consideration of Rs.1,91,25,000/- and therefore, the balance amount of Rs.21,25,000/- is due to be paid by the first respondent. 17. It is his contention that out of the fourteen sale deeds, at least in respect of three sale deeds covering 2.85 Acres of land the documents have not been registered and not been signed by the applicant and therefore, on the date of the sale by court auction, the company in liquidation or the first respondent, in his individual capacity, was not having any ownership over the same and in such circumstances, such sale effected by the court auction in respect of 2.85 Acres of land should be only treated as non-est and ultimately, the applicant is entitled to declaration that he remains to be the owner of the said extent of the property and if the company in liquidation has got any right, it can be only an equitable remedy of specific performance of the agreement of sale dated 9.6.1996. 18. It is his contention that all original documents in respect of the properties are with the applicant, who, as an owner, was not called at the time of sale by this Court and therefore, according to him the said land of an extent of 7.85 Acres never vested with the Official Liquidator, even though in the affidavit filed in support of the application, the applicant has restricted only in respect of 2.85 Acres of land. It is his contention that the applicant has got a right of recission and refund of the amount. 19. It is his contention that even though it is true that, as against the judgment in O.S.A.No.129 of 2007, the Supreme Court has dismissed the appeal, the same would not operate as res judicata for a permission to be given by this Court under Section 446 of the Companies Act read with Rule 9 of the Companies (Court) Rules, 1959. It is his submission that granting leave is a routine affair under the Letters Patent and would contend that any condition can be imposed. 20. According to him, the decision taken by the Company Court, which is summary in nature and not decided based on the appreciation of evidence, even though the same has been confirmed up to the Supreme Court, res judicata principle is not applicable. To substantiate that the principle of res judicata would not apply to the present case he would rely upon the judgments in Mathura Prasad Bajoo Jaiswal and Others v. Dossibai N.B.Jeejeebhoy, [1970] 1 SCC 613 and Sushil Kumar Mehta v. Gobind Ram Bohra, [1990] 1 SCC 193. He would submit that Company Court proceeding, being a collateral proceeding, cannot be equated to a regularly instituted suit and he would rely upon the judgments in N.Krishnaih Setty v. Gopalakrishna and Others, (1974) 2 SCC 624 and Rangasamy,K. v. Tamil Nadu Housing Board, 2005 (2) CTC 81. 21. He would also rely on the judgment in (2007) 5 CTC 521 to contend about the effect of sale conducted by the Company Court. He would submit that the Court auction purchaser will not get better title since he purchases along with litigation, by relying upon Valji Khimji & Co. v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd., (2008) 9 SCC 299 and Usmansab Hatel Sahab v. R.L.Meharwade, (1998) 3 SCC 271. 22. On the other hand, it is the contention of Mr.R.Murari, learned counsel appearing for the fourth respondent, who is a court auction purchaser, that an application filed before the Company Court under Sections 446(1) and 446(2)(a) of the Companies Act are not summary in nature and when once the applicant in C.A.No.82 of 2009 himself has invoked the provisions of Section 446(2) of the Companies Act and filed an application, which was decided by dismissing the same on merits, against which, admittedly, the appeal was also dismissed, apart from the SLP being dismissed by the Supreme Court, it is not open to the applicant to file another suit on the same cause of action. He would also rely upon the detailed judgment of the Division Bench as well as the order of the learned Judge, wherein there is an elaborate discussion about the right of the applicant, while ultimately rejecting the case of the applicant. According to him, the said judgments should be treated as binding upon the applicant. 23. He would submit that inasmuch as the Court of competent jurisdiction has decided the issue, the same cannot be a subject matter of suit. He would add that if the decision of this Court, as approved up to the Supreme Court, under Section 446 of the Companies Act is not final, then the Section will have no meaning and that would be only an empty formality. He would rely on the judgments in Gulabchand v. State of Gujarat, AIR 1965 SC 1153, Bhanu Kumar Jain v. Archana Kumar, (2005) 1 SCC 787, and South Indian Bank Limited v. Imperial Chit Funds (P) Ltd., (1976) 46 Company Cases 665 (Kerala). 24. The learned Administrator has also submitted that when an issue has been decided in detail between the parties in a Company Application and the same has been approved up to the Supreme Court, the same is binding upon the applicant and he is not entitled to file a separate suit once again and that would make the provision of the Companies Act redundant. He would also submit that the applicant in C.A.No.82 of 2009, having filed a sworn affidavit giving no objection for the sale of 0.20 Acres of land by the Administrator, has got a legal duty to return the documents relating to the said property to the Administrator in the interest of the creditors of the company in liquidation. 25. I have heard the learned counsel for either side, perused the records and given my anxious thought to the issue involved in this case. 26. At the outset, it has to be pointed that even though Mr.R.Thiagarajan, learned counsel appearing for the applicant in C.A.No.82 of 2009 has submitted as if the dispute relates to 7.85 Acres stating that the said land has never vested with the Official Liquidator, in the affidavit filed by the applicant in support of C.A.No.82 of 2009, the applicant has made it very clear that he intends to file a suit for which leave is prayed only in respect of 2.85 Acres. In fact, the relief in the intended suit also makes it clear that the property mentioned in Schedule 'C', in respect of which the applicant is seeking permission to file a suit for declaration, is of 2.85 Acres. 27. The point to be considered squarely in these applications is as to whether the decision taken by a Company Court in an earlier application filed by the same applicant, which has ultimately been confirmed by the Division Bench in O.S.A. and the Hon'ble Apex Court, can be a subject matter of an independent suit once again. 28. The main thrust of the contention by the learned counsel for the applicant is that the company application was decided in a summary manner and therefore, such decision by the Company Court, which is not by recording evidence, etc., cannot be considered to be a decision on merit and hence, the principle of res judicata will not apply. 29. Section 11 of the Code of Civil Procedure, enunciating the principle of res judicata, makes it clear that when once an issue was directly and substantially decided in a former suit, the subsequent suit is barred under the said principle. Section 11 of the Code of Civil Procedure is as follows: "Section: 11. Res judicata. No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court. Explanation I- The expression "former suit" shall denote a suit which has been decided prior to the suit in question whether or not it was instituted prior thereto. Explanation II.- For the purposes of this section, the competence of a Court shall be determined irrespective of any provisions as to a right of appeal from the decision of such Court. Explanation III.- The matter above referred to must in the former suit have been alleged by one party and either denied or admitted, expressly or impliedly, by the other. Explanation IV.- Any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit. Explanation V.- Any relief claimed in the plaint, which is not expressly granted by the decree, shall, for the purposes of this section, be deemed to have been refused. Explanation VI- Where persons litigate bona fide in respect of public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigating. Explanation VII.- The provisions of this section shall apply to a proceeding for the execution of a decree and reference in this section to any suit, issue or former suit shall be construed as references, respectively, to proceedings for the execution of the decree, question arising in such proceeding and a former proceeding for the execution of that decree. Explanation VIII.-An issue heard and finally decided by a Court of limited jurisdiction, competent to decide such issue, shall operate as res judicata in as subsequent suit, notwithstanding that such Court of limited jurisdiction was not competent to try such subsequent suit or the suit in which such issue has been subsequently raised. " 30. The term "suit" has not been defined in the Code of Civil Procedure. In Black's Law Dictionary the term "suit" is defined as "any proceeding by a party or parties against another in court of law". In Mst. Gulab Bai & Others v. Manphool Bai, AIR 1962 SC 214, the Supreme Court, while observing that the term "suit" cannot be liberally construed on the basis of the legislative history of the principle of res judicata, held that it must be a whole issue in the suit before the competent court. The relevant portion of the said judgment is as under: "6. The word "suit" has not been defined in the code, but there can be little doubt that in the context the plain and grammatical meaning of the word would include the whole of the suit and not a part of the suit, so that giving the word "suit" its ordinary meaning it would be difficult to accept the argument that a part of the suit or an issue in a suit is intended to be covered by the said word in the material clause. The argument that there should be finality of decisions and that a person should not be vexed twice over with the same cause can have no material bearing on the construction of the word "suit". Besides if considerations of anomaly are relevant it may be urged in support of the literal construction of the word "suit" that the finding recorded on a material issue by the Court of the lowest jurisdiction is intended not to bar the trial of the same issue in a subsequent suit filed before a Court of unlimited jurisdiction. To hold otherwise would itself introduce another kind of anomaly. Therefore, it seems to us that as a matter of construction the suggestion that the word "suit" should be liberally construed cannot be accepted. This position would be abundantly clear if we consider the legislative history and background of section 11. ..... 12. ...... In other words, it is the whole of the suit which should be within the competence of the Court at the earlier time and not a part of it. Having regard to this legislative background of section 11 we feel no hesitation in holding that the word "suit" in the context must be construed literally and it denotes the whole of the suit and not a part of it or a material issue arising in it." 31. It is true that in many of the judgments of the Supreme Court and other High Courts, it was held that the forum where summary proceedings are effected by the Presiding Officer by passing orders, such decision cannot be barred by the principle of res judicata in a regularly instituted suit. In fact in Pandurang Ramachandra Mandlik (since deceased by his Lrs.) and another v. Smt.Shantabai Ramachandra Ghatge and other, AIR 1989 SC 2240, it was held that a decision of a tenancy authority under the Bombay Tenancy and Agricultural Lands Act, 1948 cannot be deemed to be a decision in a suit. 32. A Division Bench of this Court consisting of S.Jagadeesan and P.D.Dinakaran, JJ., (as Their Lordships then were) in Ganesh Benzoplast Ltd., v. Sundaram Finance Limited, 2002 (2) CTC 238, taking note of the fact that under the Arbitration and Conciliation Act, 1996 the applicability of Code of Civil Procedure has been consciously taken away by the law makers while it was available in the Arbitration Act, 1940, held that a decision taken under Section 9 of the Arbitration and Conciliation Act, 1996 does not require any averment in any particular manner and therefore, the decision cannot be taken as a decision to bar a regularly instituted suit. 33. Section 26 of the Code of Civil Procedure, while speaking about the "institution of suits", states as follows: "Section 26. Institution of suits. (1) Every suit shall be instituted by the presentation of a plaint or in such other manner as may be prescribed. (2) In every plaint, facts shall be proved by affidavit. 34. The term "court" as defined under Section 2(11) of the Companies Act, 1956 is as follows: "Section: 2 (1) to (10)  (11) "the Court" means,- (a) with respect to any matter relating to a company (other than any offence against this Act), the Court having jurisdiction under this Act with respect to that matter relating to that company, as provided in section 10; (b) with respect to any offence against this Act, the Court of a Magistrate