Orissa High Court
Pradeep Chandra Deo & Anr vs Union Of India & Ors. .... Opposite Party ... on 25 February, 2025
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 28-Feb-2025 18:04:39
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 2811 of 2020
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
Pradeep Chandra Deo & Anr. .... Petitioner(s)
-versus-
Union of India & Ors. .... Opposite Party (s)
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr. S.K. Padhi, Sr. Adv.
along with his associates
Mr. Anindya Kumar Mishra, Adv.
For Opposite Party (s) : Mr. Gopal Jain, Sr. Adv.
along with associates
Mr. Manoj Ku. Mishra, Sr. Adv.
along with associates
Mr. Prasanna Kumar Parhi, DSGI,
Mr. Satya Sindhu Kashyap, CGC
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-12.02.2025
DATE OF JUDGMENT:-25.02.2025
Dr. S.K. Panigrahi, J.
1. The instant Writ Petition has been preferred under Article 226 of the Constitution of India arraying several Government authorities, as well as directors and shareholders of one M/s Bonai Industrial Company Page 1 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 Limited (BICO) (hereinafter, "the Company" or "Opp. Party No.8") with a prayer inter alia as follows;
‚<.To issue rule NISI calling upon the opposite parties to show cause as to why a Writ/Writs in the nature of the Certiorari and/or Mandamus or any other Writs shall not be issued quashing Annexure-26 of the Writ Petition and directing the O.P. No.6, Serious Fraud Investigation Office, to conduct an enquiry in the right earnest and if the Opposite parties fail to show cause or show insufficient cause the Hon'ble Court may further be pleased to make the said rule absolute.‛ I. FACTUAL MATRIX OF THE CASE:
a) The case as sought to be canvassed by the Petitioners herein is that they claim to be legal heirs of one Late Kumar Harishchandra Deo, who is alleged to have 500 shares of the Company i.e. Opposite Party No. 8 M/s Bonai Industrial Company Limited (hereinafter referred to as the "Company"). The said Late Kumar Harishchandra Deo is stated to have died in the year 1970. The Petitioners i.e the alleged legal heirs allege that Opposite Parties No. 9-15 herein have fraudulently usurped the shares as well as the directorship of Late Kumar Harishchandra Deo in the Opposite Party No. 8 Company.
b) The said Company was incorporated under the Indian Companies Act, 1913 on 06.10.1939. There were 9 registered shareholders in the Company wherein Late Kumar Harish Chandra Deo was holding 500 shares from out of the total of 925 shares. In course of time, new Articles of Association was adopted under the Companies Act, 1956 and at the time of formation of the Company, there were three founder Directors.Page 2 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 It is contended that Late Kumar Harishchandra Deo having 500 shares in the Company as one of the founder Directors of the Company had never transferred or alienated his share/ shares in favour of any one at any given point of time.
c) It is further stated that vide Special Resolution in the General Body meeting held on 03.04.1959, the Ex-Ruler of Bonai had granted lease for operation of certain iron and manganese ore mines. The mining operations were being undertaken by the Company. At the time of death of Late Kumar Harishchandra which took place on 8.05.1970 the predecessor in interest of the Opp. Parties herein one Sita Ram Rungta had already entered his name in all the officials records and documents as the Director of the Company in substitution of Kumar Harishchandra although he had never transferred or alienated his 500 shares which was held in the Company. Thus, it is stated that inclusion of the name of Opposite Parties No. 9-15 as the Directors of share holders of the Company is wholly illegal, void, inoperative and based on false representation. It has been further stated by the petitioners that taking advantage of the difficulties of Late Harishchandra Deo an illegal fraudulent board resolution carrying the date 17.03.1970 was apparently filed before the mining authorities which listed others as the directors of the company and that the name of Late Harishchandra Deo had been surreptitiously removed as a director by this sham resolution.
d) The Petitioner alleges that they for the first time came to know about the change in the ownership and capturing of the affairs and business of the Company in the year, 2009 after the appointment of Shah Commission. Page 3 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 The Petitioners then searched for the documents and obtaining the same from the Competent Authorities, came to know all about the fraud, mischief etc. played by the Opp. Parties No 9 to 15.
e) It is further stated that the Petitioners received information from the Directors of Mines as well as from the report of the Commission set up in 2009 that these Opp. Parties No 9 to 15 and their predecessors in interest by influencing various public authorities / functionaries have fraudulently managed to get the name of Late Harishchandra as one of the Directors substituted before the Registrar of Companies without his consent.
f) The Petitioners further state that in order to unearth the fraud committed, the petitioner and legal heirs of Late Harishchandra Deo filed various RTI applications before the ROC, Cuttack. One such RTI application was filed by one Anup Kumar Singh Deo (one of the successors of Late Harishchandra Deo) with the office of the ROC on 21.08.2013 requesting information regarding the shares of Late Harishchandra Deo. The CPIO of RoC cuttack replied stating that the information sought is public in nature and may be accessed in the official website under Section 610 of the Companies Act 1956 on payment of fees. It also mentioned that the RTI applicant may approach the concerned company for the required information. However no such information was available on the website.
g) A show cause notice was issued by the ROC Cuttack to the Company under Section 234 (1) of the Companies Act 1956 requiring the company to furnish the certified copy of register of members, board's minute Page 4 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 book, name and addresses of the shareholders from 1965 till the date of notice, copy of resolutions regarding allotment of shares, return of allotment.
h) Thereafter, one Raj Krishna Singh Deo, one of the successors of the Late Harishchandra Deo family filed another RTI application with the ROC, Cuttack dated 13.12.2013 seeking copy of a reply filed by the company and further steps taken by the ROC, in the event no reply was provided by the company. However the ROC vide letter number ROC/ RBI/ 2014/ 1629 dated 15.01.2014 rejected the same. Thereafter, the applicant filed appeal against the rejection order and was allowed by the first appellate authority vide order dated 25.08.2014 directing the CPIO to decide the matter afresh keeping in view the provisions relating to third party information and other applicable provisions. The CPIO office, thereafter, issued a letter bearing number ROC/RBI/ 2014/ 3017 dated 15.01.2014 stating to the applicant that the office of the ROC has sought the information from the company vide its letter dated 25.08.2014 to which the company declined to furnish any information.
i) Similar RTI applications were filed by another member of the same family one Pushpashree Devi with the office of the ROC, Cuttack on 11.06.2014 relating to the same transfer of shareholding of Late Harishchandra Deo. The CPIO rejected the application vide letter number ROC/ RTI/ 1025 dated 26.06.2014 following which the first appellate authority allowed the appeal and directed the CPIO to provide available information and dispose of the matter without any further delay vide order dated 17th/ 18th September, 2014. The petitioner Page 5 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 states that the same order was not adhered to and the applicant had to physically visit the ROC Cuttack on 18.12.2014 for inspection of public documents of the company but the same was not available in the office of the ROC Cuttack.
j) Subsequently, in order to bring the fraud to light the petitioners sought for an inspection of the register of members and the annual returns in terms of Section 163 of the Companies Act, 1956. The inspection were sought to be conducted by one BR Patnaik, however, the company did not allow the inspection.
k) The petitioners filed a representation before Opp. Party No.1 with a prayer to direct, Opp. Party No.6 to investigate following which the matter was referred to the Opp. Party No.6 to cause an inquiry into the grievance petition. However the Opp. Party No.6 without conducting any independent inquiry referred the matter to the ROC vide letter dated 20.12.2017 for necessary action at their end.
l) The ROC, Odisha, vide letter ROC/ COMT/ 2018/3274 dated 16.01.2018 intimated to the petitioners that since matter similar to their complaint dated 12.11.2017 and referred to it by SFIO has been dealt with earlier no further investigation is warranted in the present case.
From a perusal of the pleadings in the present Writ Petition, it seems that the Petitioners and others have approached authorities including the Registrar of Companies (ROC) and the said Authority which after application of mind seems to have arrived at a conclusion that no illegalities as attributed are made out against the Opposite Parties herein. It is this finding by the ROC which formed the Page 6 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 substratum of the grievance of the Petitioners herein. At least, on a cursory reading of the Petition that is how the grievance has been packaged, however, there is more to it than it meets the eye. II. PETITIONERS' SUBMISSIONS:
2. Ld. Sr. Counsel S. K. Padhi appearing for the Petitioners contends that through the present Writ Petition, the Petitioners have only sought for a direction to Opp. Party No.6 to conduct an inquiry on the fraudulent transfer of shares of Late Harishchandra Deo. He contended that all the suits filed by some of the family members of the Petitioners were dismissed only on the ground that the Civil Court did not have jurisdiction to decide on the subject matters of dispute and the same could only be raised before the appropriate authority under the Companies Act, 2013. It is also contended that the family members of Late Harishchandra Deo had the knowledge about the fraud only after the appointment of the Shah Commission in the year 2009. Further, after that they have approached several statutory authorities to uncover the fraud. They have relied on various letters i.e. 13/14.8.2013 written to the Registrar of Companies; letter dated 15.12.2014 to the Registrar of Companies; 8.10.2012 to the Opp. Party No. 8 Company; letter dated 26.02.2010 to the Deputy Director of Mines and all of them seeking various clarifications and information with regard to the change of ownership of the Company. It was also submitted that the Petitioners uncovered the fraud committed upon Late Harishchandra Deo vide resolution dated 17.03.1970 by which he seems to have been removed Page 7 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 from the directorship of the company. It is this action primarily of illegal share transfer of the said Late Harishchandra Deo which the petitioners submit ought to be the subject matter of investigation by serious fraud investigation office.
3. Thereafter, the Ld. Sr. Counsel further contended that the suit and all the appeals emanating therefrom were primarily dismissed on the ground that the Civil Court was not competent and did not have the jurisdiction to decide the issues raised in the plaint and the same can be prosecuted under the Companies Act, 2013.
4. Insofar as the civil suit by Anil Kumar Singh Deo is concerned, it has been submitted that the ratio in the CMP 861 of 2016 and 1133 of 2016 preferred by the Company against the continuation of Civil Suit No. 18 of 2015 was that the suit had already become infructuous as the lease in question had expired by efflux of time. It was also contended that SLP ( C) No. 19252 of 2022 arising out of the final judgement and order dated 10.03.2022 in CMP No. 861 of 2016 was dismissed as withdrawn giving liberty to the petitioner. Thereafter, even in the review application that was preferred by the petitioners was dismissed on technical grounds. It is submitted that there has not been any suppression of facts by the petitioners as some of these developments have taken place after filing of the present petition, hence, the present petitioners they are not required to disclose the same. Insofar as the public interest litigations filed by third party strangers were concerned it was submitted that the petitioners had no knowledge of the same and that they could not be taken to task for the same. It is again submitted that the PILs were filed Page 8 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 by dubious persons and the Opp. Party No. 8 Company should not be allowed to take advantage of the same to evade investigation of fraud as alleged in the present petition. It has also been submitted that civil suits filed by the other relatives of the petitioner have no bearing on the present case and hence we are not required to be mentioned.
5. The Ld. Senior Counsel for the petitioner also relies on the response of the Registrar of Company which while disposing of the impugned order states ‚if you find aggrieved that the shares has been transferred fraudulently you may approach the appropriate forum for redressal‛. It was thus submitted that neither was there any suppression of facts nor were the issues raised in the present petition barred by Res Judicata. III. SUBMISSIONS BY OPPOSITE PARTIES
6. Heard Mr Gopal Jain, Senior Advocate and Mr Manoj Mishra Senior Advocate appeared for Opposite Party No. 8, Ms. Gayatri Patra for Opposite Party No 3 and Mr. Prasanna Ku. Parhi, DSGI and Satyasindhu Kashyap for Opposite Party No. 1. The arguments that have been advanced can be broadly divided into the following (a) The petition is barred by huge delay and latches. (b) The petition in its present form ought to be rejected at the threshold as the same tantamount to an abuse of process of law as the petitioners are guilty of having suppressed material facts, especially, the fact that multiple petitions have been filed on the same subject matter and arising out of the same cause of action which have been rejected in their challenge by various Courts including this Court and the Hon'ble Supreme Court. (c) Page 9 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 The issues raised here between the same parties, same subject matter and thus they are grossly barred by Res Judicata at the issues raised in the present petition are in pith and substance the same as have already been raised in the plaint and other proceedings. IV. ISSUES FOR CONSIDERATION:
7. In view of the aforesaid discussion this Court proceeds to formulate the following issues that fall for consideration. (A) Whether or not the present petition is barred by delay and latches. (B) Whether or not the present petitioners are guilty of suppression of material facts and continuance of the present petition would tantamount to an abuse of process of law. ( C) Whether the issues raised in the present petition are barred by Res Judicata.
V. ANALYSIS:
(A) WHETHER OR NOT THE PRESENT PETITION IS BARRED BY DELAY AND LATCHES.
8. The Petitioners herein have filed the present Writ Petition on 22.01.2020, and have prayed for quashing of Annexure-26, which is dated 16.01.2018 i.e. after a lapse of more than 2 years of the said order so impugned. The impugned order issued by the Registrar of Companies, Cuttack states therein that similar typed of complaints have been received by it earlier pursuant to which the office of regional director, had carried out inspection under Section 209 of the Companies Act, 2013. It was stated therein that as the inspection has already been done on similar complaints earlier, no further action was required to be taken Page 10 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 in the matter. Lastly, it was mentioned that in case the petitioner felt aggrieved that the shares had been transferred fraudulently they may approach the appropriate forum for a redressal.
9. Another contention raised is that the writ petition raises questions which partake purely of a private law character and on that count also the petition is not maintainable. The entire basis of the Petitioners' case is that they claim to be legal heirs/ successors-in-interest of one Late Kumar Harishchandra Deo, who is alleged to have held 500 shares and was a 54% shareholder of the Company, and he died in 1970. The Petitioners case is also that the predecessors-in-interest of the Opposite Parties No. 9-15 have fraudulently usurped the shares / directorship of the said Late Kumar Harishchandra Deo in the Opposite Party No. 8 Company. It is seen that the grievance arises out of letter dated 16.01.2018. The allegation made or the information sought for therein relates to the alleged fraud conducted with regard to the illegal share transfer of one Late Harishchandra Deo which admittedly occurred prior to the year 1970. A bare perusal of this grievance shows that the Petitioners' imaginary claim, is hopelessly barred by delay and laches, inasmuch as the Late Kumar Harischandra Deo is stated to have died in the year 1970, and the writ petition has been filed in the year 2020. Thus, ex facie, the entire claim of alleged fraud, even if taken at face value, is hopelessly barred by delay and laches as it is several decades old.
10. The Opp. Party No. 8 Company was formed being incorporated under the Indian Companies Act, 1913 on 06.10.1939 having its registration No.15-000246 of 1939-40. Therefore, the allegation of illegal constitution Page 11 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 of the OPP. Party no. 8 Company i.e., M/s BICO is not correct. None of the authorities has ever found to be committing fraud by the Opp. Party Nos.9 to 15. It is forthcoming from the response of the competent authorities i.e. ROC that similar such other petitions have been filed before and response thereto had already been given that no illegalities had been found with regard to the allegations made. That being a case, no interest of justice would be sub-served to flog a dead horse after the efflux of 55 years. The substratum of the dispute relates to illegal share transfer and the same has been litigated and reagitated time and again and no useful purpose will be served in oppressing the opposite parties herein. The only addition in the present petition is to create a "cause of action" seems to be that certain RTI applications have been made by various parties and no suitable response has been received with regard to them which seems to be more like an afterthought which has been introduced to create a fresh cause of action in order to make the present petition maintainable.
11. Even otherwise the present petition raises disputed question of facts thus a Writ Court not the appropriate remedy, especially given the fact that the Companies Act is a self-contained Code and in relation to matters therein, there is a specific bar from other Courts entertaining pleas which are the subject matter of the said Act. However, in the present scenario this Court deems it fit to go into other issues as well and does not incline to reject the present petition on the ground of maintainability alone.
Page 12 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 (B) WHETHER OR NOT THE PRESENT PETITIONERS ARE GUILTY OF SUPPRESSION OF MATERIAL FACTS AND CONTINUANCE OF THE PRESENT PETITION WOULD TANTAMOUNT TO AN ABUSE OF PROCESS OF LAW.
12. In order to decide the present issue at hand, it is deemed appropriate to first understand the backdrop of the other proceedings and the nature of the challenge therein. It is even more relevant given the fact that there is a commonality of the parties involved and that the subject matter relates to a dispute with regard to the share transfer of Late Harishchandra Deo. What is also required to be seen that while invoking the Writ jurisdiction of this court whether the petitioners have indeed suppressed any material facts as has been alleged vehemently by the Ld. Counsels appearing for the opposite parties. Civil Suit No. 18 of 2015 Civil Suit by Smt. Rajshree Devi (Sister of Petitioner No. 1)
13. The prayer urged by the Plaintiffs in CS No.18 of 2015 sought declaration that (a) Late Kumar Harishchandra Deo had right, title and interest over 500 share hold right in the Company (b) the plaintiff and the defendant Nos.15 to 38 therein (which includes both the Petitioners herein) have jointly acquired the right, title and interest in place of Late Harishchandra Deo (c )partition of the shares amongst the plaintiff and defendant Nos.15 to 38 (d) decree for permanent injunction be passed restraining the defendant Nos.2 to 10 from exercising the right of ownership over the operation and management of Company and ( e) decree for grant of mesne profits Page 13 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39
14. The array of parties shows that one Rajshree Devi is the Plaintiff.
Pradeep Chandra Deo (The Petitioner No.1 herein) is Defendant No. 15; Bijay Laxmi Devi (The Petitioner No.2 herein) is Defendant No. 24. It is pertinent to note at this juncture that both Petitioners Nos. 1 & 2 ought to have disclosed such a material fact which involved a determination of their rights and which was already in their knowledge as they were actively participating and pursuing the suit and later on the appeals therefrom. The said fact ought to have been placed on record in the present Writ Petition which essentially bases the substratum of their right to information based on the fact that they actually have a right to own the shares in the company in question.
15. In the said suit Ld. Trial Court identified 4 broad grounds of challenge.
The first ground of challenge being whether the suit had been properly valued or not. The second was whether the suit was the plaint was liable to be rejected for mis-joinder and non-joinder of parties. The third issue framed was whether the plaint should be rejected for non- disclosure of the cause of action in the plaint. The fourth ground of challenge was whether limitation being a mixed question of law and fact could be considered in a petition under Order 7 Rule 11 of the CPC.
16. The Ld. Trial Court came to a finding that the suit was barred under Clause (d) of Order 7 Rule 11 of the CPC and was therefore "barred by law" to entertain such a plaint. It thus held that the same was a ground for rejection of the plaint. The relevant portion of the finding of the Ld. Trial Court is as follows;
Page 14 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 ‚Keeping in mind the ratios decided in the decisions cited (supra) by the learned counsel for the Defendant No.1, this court is of the considered view that the jurisdiction initially vest with the Tribunal or Court under the Companies Act but not with this Court under u/s 9 of the CPC.
Accordingly, the Court also holds that the present suit also comes under the Clause (d) of Order 7 Rule 11 of the CPC being barred by the Companies Act.‛
17. On the question of limitation, the Ld. Trial Court held that in the pleadings itself the plaintiff had specifically averred that vide letter dated 31.12.2009 he came to know about the alleged usurpation of shares. The period of limitation even as per the case averred would start to begin from the date of discovery i.e. 31.12.2009 and that the suit ought to be filed within 3 years therefrom. Thus, the suit having been filed in 2015 would be barred by limitation. Therefore having rendered such findings the Ld. Trial Court proceeded to reject the Plaint of the Plaintiffs under Order 7 Rule 11 of the CPC on 23.07.2015. RFA 25 of 2015 (18.7.2022)
18. The aforesaid order dated 23.7.2015 passed in the Civil Suit was carried in appeal in RFA 25 of 2015. The Ld. Court framed 7 issues to decide the lis at hand. Out of the 7 issues, Issue No. (vi) and Issue No. (vii) were decided in favour of the defendants therein. Issue No. (vi) dealt with the question as to whether the plaint was barred by law and on that ground it ought to be rejected under Order 7 Rule 11 of CPC. This issue was dealt with in two parts. The first part being the issue of determination of Page 15 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 the date for the computation of limitation. The Ld. Court below returned a finding that;
‚<.Scrutiny of the above said averments made in the plaint, establish the fact that the plaintiff has clear and categorical knowledge regarding the fraud alleged since 2.01.2010 on the receipt of reply from the Director of the Company and that admittedly the period of limitation being 3 years computed from that day has already expired way back on 2.01.2013. But, the present suit having been filed in the year 2015 is barred by limitation and that issuance of legal notice on 8.05.2013 to Defendant No. 1 and receipt of reply dated 24.8.2013 and submission of Hon'ble Mr. Justice M.B. Shah Commission Report in the month of October 2013 are not relevant for computing the period of limitation.‛
19. The second part being the issue that the same was barred by law. It was held that until the register of members of the suit company is suitably rectified by the competent authority, the right, title and interest if any, of the plaintiff over the 500 shares of Late Harish Chandra Deo could not be decreed by the court. It was held that as the situation was squarely covered under Section 59 of the Companies Act, 2013 and that the jurisdiction of the civil court was ousted by law.
20. Lastly, qua Issue No. (vii) it was also held that the right of the plaintiff to sue being barred by the law of limitation and the plaintiff had no surviving cause of action to bring the suit. In view of the same, the Addl. District Judge, Bonai vide order dated 18.07.2022 confirmed the order passed by the Ld. Civil Judge (Senior Division) Bonai rejecting the plaint in C.S. 18 of 2015 under Order 7 Rule 11 of the CPC. Page 16 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 R.S.A No. 206 of 2022
21. This Court while entertaining an appeal under Section 100 of the CPC which impugned the aforesaid order dated 18.07.2022 framed four broad issues namely, as to whether (a) suit at the instance of plaintiff is not maintainable; (b) suit is barred by limitation; ( c) the suit is barred by law contained in Section 59 and 430 of the Companies Act, 2013 and
(d) suit as laid for reliefs claimed contravenes the provisions of Order 1 Rule 1 and 3 and also Rule 9 of the CPC. Having framed such issues for determination this Court came to the conclusion that from a meaningful reading of the plaint itself it is evident that the suit was barred by limitation. It also came to a conclusion that such grievance as set out in the plaint or at least sought to be made out thereunder, squarely comes within the ambit of Section 59 of the Companies Act, 2013. It was further held that in view of the provisions contained in Section 430 of the Companies Act, 2013 the jurisdiction of the Civil Code stands ousted and thus the rejection of plaint being barred by operation law was justified. Resultantly, the appeal under Section 100 of the CPC was dismissed by this court and the judgement and decree passed by the Trial Court as well as the First Appellate Court were confirmed. As on date, no appeal has been filed against the said Judgment dated 15.02.2023 and hence, the same has attended the finality and the Petitioners have no right in law to the shares so claimed.
22. It is a pertinent to notice at this juncture that while the suit was decreed on 23.7.2015 against the petitioners herein on and they had filed the Page 17 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 Writ Petition sometime in the year 2020. As on that date, at time of filing of the present Writ Petition, they had no right over the shares in question which had been decided against them. Such a material fact where the petitioners themselves were parties ought to have been brought to the notice of this Court. Non-disclosure of the same raises grave doubts as to the bona fide of the present petitioners. Civil Suit by Anil Kumar Singh Deo
23. Similarly another matter, relates to one of the purported legal heirs of Late Kumar Harishchandra Deo, one Anil Kumar Singh Deo (who was Defendant No.32 in Civil Suit No.18 of 2015) had approached the civil court against the company and its directors in Civil Suit No. 02 of 2016 before the Court of Civil Judge (Sr. Division) Bonai, Sundargarh wherein once again the same relief was sought on the same cause of action. The same was challenged by the Company under Article 227 of the Constitution against the continuation of the said Suit before this Court being C.M.P. No.861/2016 & C.M.P.No.1133/2016. After hearing the parties in C.M.P. No. 861/2016, this Court on 10.03.2022 dismissed the suit as no more maintainable. Aggrieved by the order dated 10.03.2022 passed by this Court, the said Anil Kumar Singh Deo filed SLP(C) No. 19252/2022 before the Supreme Court. On 11.11.2022, the Petitioner therein sought permission to withdraw the said SLP with permission to file a review before the High Court. Accordingly, the SLP was dismissed as withdrawn on 11.11.2022 without expressing any opinion on the maintainability of a review petition. Thereafter, a Review Page 18 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 Petition No. 328 of 2022 was filed by said Anil Kumar Singh Deo against the order dated 10.03.2022 passed in C.M.P. No. 861 of 2016. This Court after hearing the parties, dismissed the Review Petition as an abuse of process and imposed costs of Rs.20,000/- vide its judgment dated 31.07.2023. Still not satisfied, the Petitioner - Anil Kumar Singh Deo preferred an SLP against the judgment / order dated 31.07.2023 before the Supreme Court vide SLP (Civil) Diary No. 45079/2023 which was also dismissed by the Supreme Court vide order dated 18.03.2024.
24. It thus appears that the litigation initiated by Anil Kumar Singh Deo, one of the other purported legal heirs of Late Kumar Harishchandra Deo was dismissed right up to the Supreme Court. The said litigation, like the one initiated by Smt. Rajshree Devi, being initiated on the same grounds and cause of action, has thus attained finality. Earlier Writ Petition by Bijaylaxmi Deo (Petitioner No. 2 in the present case)
25. In 2017 an earlier Writ Petition was filed by Smt. Bijaylaxmi Deo (Petitioner No.2 in this petition) being W.P.(C) No. 9693/2017 before this Court raising similar issues. The said Writ Petition was dismissed as withdrawn vide this Court's order dated 09.10.2017 with a liberty to approach such other appropriate authorities available in law for redressal of grievances. The prayer in the said writ petition was to restore the share of Late Harishchandra Deo in Opp. Party No. 8 Company who had 500 shares out of 950 shares which had been fraudulently transferred to the Opp. Parties Nos. 6 to 12 therein and to issue appropriate direction to induct the petitioner therein as a Page 19 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 shareholder in the company as the successor in interest of Late Harishchandra Deo. The declaration that has been made by the petitioners herein is that ‚However the matter was before this Hon'ble Court in of W.P. (C) No. 9693 of 2017, disposed of on 09/10/2017, and at the instance of some other persons CMP No. 861 of 2016 and CMP NO. 1133 of 2016 are pending before this Hon'ble court.‛
26. What is interesting to note at this juncture is that all the parties who have been embroiled in litigation and has been discussed herein, are in fact the third generation of the Late Harishchandra Deo and it is the admitted case of the so called successors in interest that the change in the constitution of the board of directors of the company had taken place during the lifetime of the Late Harishchandra Deo and that his children never litigated the same.
Convoluted History of vexatious Public Interest Litigations
27. While the matters stood thus, a spate of unscrupulous litigants sprang into action which sought to rake up the issue of the transfer of shareholding of the present Opp. Party No. 8 Company. One such PIL being W.P. (C) PIL No. 16719 of 2020 had filed by 11 so-called PIL Petitioners, being Rup Ranjan Panda &Or Vs. Union Of India &Ors. before this Court.
28. It was pointed out during the course of the hearing that the contents of the aforesaid PIL i.e. W.P. (C) PIL No. 16719 of 2020 and the present W.P.(C). NO. 2811/2020 are almost identical, although Petitioners are different. It was further pointed out that there were starking similarity Page 20 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 in the Annexures in W.P.(C) PIL No. 16719 of 2020, and the instant Writ Petition giving an identical character and that they even containing the signature of Petitioner No.1 of the instant writ petition i.e. Pradeep Chandra Deo even though he was not a petitioner in W.P. (C) PIL No.16719 of 2020. These facts are hard for this Court to ignore as they give rise to serious doubts as to the bona fide of the present Petitioners. The aforesaid W.P. (C) PIL No. 16719 of 2020 was also dismissed as withdrawn vide order dated 21.07.2020 passed by this Court.
29. Subsequently, another PIL being W.P. (C) PIL No.33158 of 2021 was filed before this Court by 10 Petitioners being Ashribad Pattnaik & Ors. Vs. Union Of India &Ors. The contents of the two PILs i.e. W.P. (C) PIL No. 16719 of 2020 (by Rup Ranjan Panda &Ors.) & W.P. (C) PIL No. 33158 of 2021 (by AshirbadPattnaik&Ors.) were again almost identical, although Petitioners were different.
30. This Court while noticing the same, and after hearing the Petitioners dismissed the W.P. (C) PIL No. 33158 of 2021 citing it to be an abuse of process with costs of Rs.50,000/- and cautioned the Advocate therein for the Petitioner in the above PIL vide its Judgment dated 02.12.2021, the concluding part of the judgment is as follows:
‚9. With the above observations, the present writ petition stands dismissed.
10. We would have ordinarily observed something against the counsel appearing in the case. However, keeping in view the early stages of his career, we refrain from commenting upon his conduct except to advise him to be careful in future and not be a party to such a litigation initiated by unscrupulous litigants.Page 21 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 The Registry is also directed to stringently comply with the rules as indicated hereinabove while dealing with Public Interest Litigations so as to prevent valuable judicial time from being wasted and prevent certain unscrupulous elements from weaponizing petitions in courts of law.
11. We feel constrained to direct the petitioners (10 in number) to deposit cost of Rs.5,000/- each (totaling Rs.50,000/-) before the Orissa High Court Bar Association Advocates Welfare Fund positively within four weeks from today, failing which Collector, Keonjhar shall proceed to recover the same as arrears of land revenue and ensure the deposit of the recovered amount as stated hereabove.‛
31. Impugning the aforesaid judgment of this Court in the above PIL ,the Petitioners therein preferred SLP(C)No.8637 of 2022 and Diary No.12976 of 2022 before the Supreme Court which was pleased to dismiss the above Petitions with cost of Rs.25,000/- on 9.09.2022.The relevant portion of the order passed by the Supreme Court is as follows;
‚Having heard senior counsel appearing on behalf of the petitioners, we see no reason to entertain the Special Leave Petitions. The High Court was entirely justified in coming to the conclusion that the petition was filed after suppressing the fact that an earlier petition filed by the same advocate had been dismissed as withdrawn. The subsequent petition contains substantially the same averments. The Special Leave Petitions are an abuse of process. We accordingly dismiss the Special Leave Petitions with costs quantified at Rs.25,000, which shall be paid to the Supreme Court Bar Association within four weeks.‛ (Emphasis Supplied) Page 22 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39
32. The next PIL being W.P. (C) PIL No. 1416 of 2021 was filed before this Hon'ble Court by 14 Petitioners being Neelakantha Tripathy & Ors. Vs. State of Odisha & Ors. Yet again the said PIL bore stark resemblance to the earlier ones. The most glaring similarity being that annexures of W.P. (C) PIL No. 16719 of 2020 and W.P. (C) PIL No. 1416 of 2021 are entirely identical containing the signature of Petitioner No.1 of the instant writ petition i.e. Pradeep Chandra Deo, even though he was not a petitioner in either of the PILs.
33. This Court vide its order dated 22.09.2022 dismissed the Writ Petition No.1416 of 2021 and IA No.12110 of 2022, again with cost of Rs.1,40,000/-The relevant part of the judgment is as follows;
‚10. In the present case, while seeking permission to withdraw the writ petition, the petitioners have prayed for liberty to file fresh writ petition particularly when this Court vide Judgment dated 2ndDecember, 2021 dismissed W.P.(C) No. 33158 of 2021 : AshirbadPattnaik and Others Vrs. Union of India and Others, which is identical in nature with that of the present case stands already dismissed. Such a liberty if granted would be to invite and encourage unscrupulous busy bodies to approach this Court. Time and again to espouse their own hidden and motivated personal interest so this Court feels it expedient in the interest of justice to impose at least nominal costs to discourage filing of such petitions. Accordingly, the Court directs the 14 petitioners to deposit a sum of Rs.10,000/- per each Petitioner as costs (14 X Rs.10,000/- = Rs.1,40,000/-) with the Orissa High Court Bar Association Advocates' Welfare Fund positively within four weeks from today, failing which the Secretary of the High Court Bar Association would move an application before the Collector, Keonjhar, who shall proceed to recover the same as arrears of land revenue and ensure deposit of the recovered amount as stated above. Page 23 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39
11. In view of the above, the writ petition being W.P.(C) No.1416 of 2021 and I.A. No. 12110 of 2022 are dismissed with costs, as determined here above.‛
34. It is thus clear that the conduct of Petitioners in the instant writ petition has been dubious and approached the court with unclean hands and have sought to abuse of the process of law. And as such they cannot be permitted to perpetuate an endless cycle of re-litigation on exactly the same subject matter, more so by suppressing such material information.
35. The present Writ Petition raises issues that have already been adjudicated upon multiple times by courts of competent jurisdiction, at various stages, including the Hon'ble Supreme Court. Therefore, by way of the present writ petition, the Petitioners are seeking to re-agitate and re-litigate matters which already stand finally decided.
36. In fact, this Court cannot ignore the fact the Petitioners might be in cahoots with other setup unscrupulous persons who have earlier agitated the self-same issue guised as "public interest petitions". Although a party is never precluded from raising genuine claims in collusion with others are indulging in blatant forum-shopping and are taking recourse to multiple parallel proceedings for the same subject matter. It is well-settled that re-litigation of the same matter itself amounts to an abuse of the process of law and ought to be nipped at the bud.
37. It is shocking to note that some documents containing the signature of Petitioner No. 1 forms part of the PILs referred to hereinabove. A submission has been made that the pleadings in the instant Writ Page 24 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 petition and annexures in W.P. (C) PIL No. 16719 of 2020, and the instant writ petition are identical and some of the documents even contain the signature of Petitioner No.1 of the instant Writ Petition i.e. Pradeep Chandra Deo even though he was not a petitioner in W.P. (C) PIL No.16719 of 2020. It is also submitted that the direction sought in the present Writ Petition is similar to the ones sought in the PILs. It is shocking that a litigant can dare not only suppress such material facts from the courts but there seems to be a blatant disregard for the rule of law. Time and again similar Writ Petitions are being filed successively in this court where only the name of the petitioners are changed from time to time and the pleadings are kept identical. This fact, in fact, has been noted earlier by this court in its earlier orders in the PILs as referred to herein above. This Court in the given factual backdrop is constrained to hold that not only has there been a suppression of material facts but, in fact, there are persons who seem to be relentless in their pursuit to oppress Opposite Party No.8 company for reasons best known to them. Such a fact cannot be lost sight of and is a matter of grave concern and needs to be dealt with sternly.
38. Another contention raised by Mr Jain Ld. Sr. Counsel for the Opp. Party No. 8 Company is that the Petitioner's reliance on the Report of the Justice M.B. Shah Commission of Inquiry in the writ petition is also completely misplaced, inasmuch as the said Report has been specifically eschewed by the Supreme Court in its judgment dated 02.08.2017 in W.P. (C) No. 114 of 2014 (Common Cause vs. Union of India) wherein, the Supreme Court held that it would not stricto sensu rely on the Shah Page 25 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 Commission Report, or base any of its conclusions on the Shah Commission Report, in view of the fact that the Commission had not complied with Sections 8B and 8C of the Commissions of Inquiry Act, 1952. This contention need not be gone into as the Petitioners only case is that they came to know of the alleged illegal share transfer only upon the formation of the Commission in 2009. Thus, it seems that the reference to the formation of the commission has been done to justify the starting point and cause of action in the litigation and nothing more.
39. In the case of Prestige Lights Ltd. v. SBI1 it was held that in exercising power under Article 226 of the Constitution of India the High Court is not just a court of law, but is also a court of equity and a person who invokes the High Court's jurisdiction under Article 226 of the Constitution is duty-bound to place all the facts before the Court without any reservation. If there is suppression of material facts or twisted facts have been placed before the High Court then it will be fully justified in refusing to entertain a petition filed under Article 226 of the Constitution. This Court referred to the judgment of Scrutton, L.J. in R. v. Kensington Income Tax Commissioners [(1917) 1 KB 486 (CA)] , and observed: (Prestige Lights Ltd. case [(2007) 8 SCC 449] , SCC p. 462, para
35) ‚In exercising jurisdiction under Article 226 of the Constitution, the High Court will always keep in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the court, then 1 (2007) 8 SCC 449 Page 26 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 the Court may dismiss the action without adjudicating the matter on merits. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the writ courts would become impossible.‛
40. In the case of K.D. Sharma v. SAIL2 the Court held that the jurisdiction of the Supreme Court under Article 32 and of the High Court under Article 226 of the Constitution is extraordinary, equitable and discretionary and it is imperative that the petitioner approaching the writ court must come with clean hands and put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts or the petitioner is guilty of misleading the Court, his petition may be dismissed at the threshold without considering the merits of the claim. The same rule was reiterated in G. Jayashree v. Bhagwandas S. Patel3.
41. In the backdrop as narrated hereinabove this Court holds that the Petitioners have dishonestly not disclosed the above material facts in the present writ petition. The Petitioners have abused the process of law by suppressing the aforesaid litigations. It is well-settled that writ remedy is an equitable remedy and since the Petitioners have not approached the court with clean hands it is appropriate that their 2 (2008) 12 SCC 481 3 (2009) 3 SCC 141 Page 27 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 challenge deserves to be rejected. The law on the subject is well settled in a series of judgements of the Hon'ble Supreme Court in the cases of Dalip Singh vs. State of U.P. &Ors4.; Officers Federation through its President and Ors. vs. Union of India and Ors5; Kishore Samrite vs. State of U.P. &Ors6. ; All India State Bank V. Chandrasekaran&Anr. vs. The Administrative Officer &Ors7.; Amar Singh vs. Union of India &Ors8..
(C) WHETHER THE ISSUES RAISED IN THE PRESENT PETITION ARE BARRED BY RES JUDICATA/ CONSTRUCTIVE RES JUDICATA:
42. The Hon'ble Supreme Court recently in the case of Celir LLP Vs Sumati Prasad Bafna & Ors9 has exhaustively dealt with the principle of Res Judciata/ Constructive Res Judicata and has propounded the "Henderson principle" as a corollary of Constructive Res-Judicata. It is therein been recognized that the is intrinsically tied to "issue estoppel"
and "cause of action estoppel". The relevant passages from the aforesaid judgement dealing with the proposition make for profitable and delightful reading. The relevant passages are extracted hereinbelow;
‚135. The 'Henderson Principle' is a foundational doctrine in common law that addresses the issue of multiplicity in 4 (2010) 2 SCC 114 5 (1990) 2 SCR 493) 6 (2013) 2 SCC 398 7 (2012) 10 SCR 603 8 (2011) 7 SCC 69 9 2024 SCC Online SC 3727 Page 28 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 litigation. It embodies the broader concept of procedural fairness, abuse of process and judicial efficiency by mandating that all claims and issues that could and ought to have been raised in a previous litigation should not be relitigated in subsequent proceedings. The extended form of res-
judicata more popularly known as 'Constructive Res Judicata' contained in Section 11, Explanation VII of the CPC originates from this principle.
136. In Henderson v. Henderson, [1843] 3 Hare 999, the English Court of Chancery speaking through Sir James Wigram, V.C. held that where a given matter becomes the subject of litigation and the adjudication of a court of competent jurisdiction, the parties so litigating are required to bring forward their whole case. Once the litigation has been adjudicated by a court of competent jurisdiction, the same parties will not be permitted to reopen the lis in respect of issues which might have been brought forward as part of the subject in contest but were not, irrespective of whether the same was due to any form of negligence, inadvertence, accident or omission. It was further held, that principle of res judicata applies not only to points upon which the Court was called upon by the parties to adjudicate and pronounce a judgment but to every possible or probable point or issue that properly belonged to the subject of litigation and the parties ought to have brought forward at the time. The relevant observations read as under:--
‚‚In trying this question I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, Page 29 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time. *<+‛‛
137. The above proposition of law came to be known as the 'Henderson Principle' and underwent significant evolution, adapting to changing judicial landscapes and procedural requirements. The House of Lords in Johnson v. Gore Wood & Co, [2002] 2 A.C. 1, upon examining the 'Henderson Principle' authoritatively approved it with the following observations:--
(i) Lord Bingham of Cornhill integrated the principle with the broader doctrine of abuse of process and held that the bringing of a claim or the raising of a defence in later proceedings which ought to have been raised earlier will not always be hit by this principle, but rather will apply where such point is sought to be raised as an additional or collateral attack on a previous decision and the bringing forth of such ground amounts to misusing or abusing the process of the court or as a means for unjust harassment of a party. The relevant observations read as under:--
‚‚Henderson v. Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same : that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, Page 30 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not *<+‛'
(ii) Lord Millett construing the Principle held that it does not belong to the doctrine of res-judicata in the strict sense but rather was analogous to the doctrine, as it goes a step further to encompass even those proceedings that either culminated into a settlement or issues which had never been adjudicated previously in order to protect the process of the court from abuse and the defendant from oppression. The relevant observations read as under:--Page 31 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 '‚As the passages which I have emphasised indicate, Sir James Wigram V-C did not consider that he was laying down a new principle, but rather that he was explaining the true extent of the existing plea of res judicata. Thus he was careful to limit what he was saying to cases which had proceeded to judgment, and not, as in the present case, to an out of court settlement. Later decisions have doubted the correctness of treating the principle as an application of the doctrine of res judicata, while describing it as an extension of the doctrine or analogous to it < But these various defences [res judicata, issue or cause of action estoppel] are all designed to serve the same purpose : to bring finality to litigation and avoid the oppression of subjecting a defendant unnecessarily to successive actions. While the exact relationship between the principle expounded by Sir James Wigram V-C and the defences of res judicata and cause of action and issue estoppel may be obscure, I am inclined to regard it as primarily an ancillary and salutary principle necessary to protect the integrity of those defences and prevent them from being deliberately or inadvertently circumvented.
In one respect, however, the principle goes further than the strict doctrine of res judicata or the formulation adopted by Sir James Wigram V-C, for I agree that it is capable of applying even where the first action concluded in a settlement. Here it is necessary to protect the integrity of the settlement and to prevent the defendant from being misled into believing that he was achieving a complete settlement of the matter in dispute when an unsuspected part remained outstanding.
However this may be, the difference to which I have drawn attention is of critical importance. It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to Page 32 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen's right of access to the court conferred by the common law and guaranteed by article 6 < While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression *<+‛' (Emphasis supplied)
138. In Virgin Atlantic Airways Ltd. v. Zodiac Seats UK Ltd., [2014] A.C. 160 Lord Sumption JSC further expounded the 'Henderson Principle' as although separate and distinct from cause of action estoppel or res judicata yet having the same underlying public interest that there should be finality in litigation and that a party should not be twice vexed in the same matter. The relevant observations read as under:--
'‚The principle in Henderson v. Henderson has always been thought to be directed against the abuse of process involved in seeking to raise in subsequent litigation points which could and should have been raised before. There was nothing controversial or new about this notion when it was expressed by Lord Kilbrandon in the Yat Tung case [1975] A.C. 581. The point has been taken up in a large number of subsequent decisions, but for present purposes it is enough to refer to the most important of them, Johnson v. Gore-Wood & Co [2002] 2 A.C. 1, in which the House of Lords considered their effect. This appeal arose out of an application to strike out proceedings on the ground that the plaintiffs claim should have been made in an earlier action on the same subject matter brought by a company under his control. Lord Bingham of Cornhill took up the earlier suggestion of Page 33 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 Lord Hailsham of St Marylebone LC in Vervaeke (formerly Messina) v. Smith [1983] 1 A.C. 145, 157 that the principle in Henderson v. Henderson was ‚both a rule of public policy and an application of the law of res judicata‛. He expressed his own view of the relationship between the two at p. 31 as follows: ‚Henderson v. Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same : that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole‛.‛ (Emphasis supplied)
139. Even in a common law action it was said by Blackburn, J.:‚I incline to think that the doctrine of res judicata applies to all matters which existed at the time of giving of the judgment, and which the party had an opportunity of bringing before the Court.‛ *See : Newington v. Levy, [L.R.] 6 C.P. 180 (J)].
140. The fundamental policy of the law is that there must be finality to litigation. Multiplicity of litigation benefits not the litigants whose rights have been determined, but those who seek to delay the enforcement of those rights and prevent them from reaching the rightful beneficiaries of the adjudication. The Henderson Principle, in the same manner as the principles underlying res judicata, is intended to ensure that grounds of attack or defence in litigation must be taken in one of the same proceeding. A party which avoids doing so does it at its own peril. In deciding as to whether a matter might have been urged in the earlier proceedings, the court must ask itself as to whether it could have been urged. In deciding whether the matter ought to have been urged in the earlier proceedings, the court will have due regard to the ambit of the earlier proceedings and the nexus which the matter bears to the Page 34 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 nature of the controversy. In holding that a matter ought to have been taken as a ground of attack or defence in the earlier proceedings, the court is indicating that the matter is of such a nature and character and bears such a connection with the controversy in the earlier case that the failure to raise it in that proceeding would debar the party from agitating it in the future. The doctrine itself is based on public policy flowing from the age-old legal maxim interest reipublicae ut sit finis litiumwhich means that in the interest of the State there should be an end to litigation and no party ought to be vexed twice in a litigation for one and the same cause.
141. The Henderson Principle was approvingly referred to and applied by this Court in State of U.P. v. Nawab Hussain, (1977) 2 SCC 806 as the underlying principle for res-judicata and constructive res-judicata for assuring finality to litigation. The relevant observations read as under:--
‚‚3. The principle of estoppel per rem judicatam is a rule of evidence. As has been stated in Marginson v. Blackburn Borough Council [[1939] 2 K.B. 426 at p. 437+, it may be said to be ‚the broader rule of evidence which prohibits the reassertion of a cause of action‛. This doctrine is based on two theories : (i) the finality and conclusiveness of judicial decisions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) the interest of the individual that he should be protected from multiplication of litigation. It therefore serves not only a public but also a private purpose by obstructing the reopening of matters which have once been adjudicated upon. It is thus not permissible to obtain a second judgment for the same civil relief on the same cause of action, for otherwise the spirit of contentiousness may give rise to conflicting judgments of equal authority, lead to multiplicity of actions and bring the administration of justice into disrepute. It is the cause of action which gives Page 35 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 rise to an action, and that is why it is necessary for the courts to recognise that a cause of action which results in a judgment must lose its identity and vitality and merge in the judgment when pronounced. It cannot therefore survive the judgment, or give rise to another cause of action on the same facts. This is what is known as the general principle of res judicata.
4. But it may be that the same set of facts may give rise to two or more causes of action. If in such a case a person is allowed to choose and sue upon one cause of action at one time and to reserve the other for subsequent litigation, that would aggravate the burden of litigation. Courts have therefore treated such a course of action as an abuse of its process and Somervell, L.J., has answered it as follows in Greenhalgh v. Mallard [[1947] All ER 255 at p. 257+:‚I think that on the authorities to which I will refer it would be accurate to say that res judicata for this purpose is not confined to the issues which the court is actually asked to decide, but that it covers issues or facts which are so clearly part of the subject-matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them.
This is therefore another and an equally necessary and efficacious aspect of the same principle, for it helps in raising the bar of res judicata by suitably construing the general principle of subduing a cantankerous litigant. That is why this other rule has some times been referred to as constructive res judicata which, in reality, is an aspect or amplification of the general principle.‛‛ (Emphasis supplied)
144. From the above exposition of law, it is clear that the 'Henderson Principle' is a core component of the broader doctrine of abuse of process, aimed at enthusing in the parties a sense of sanctity towards judicial adjudications and determinations. It ensures that litigants are not subjected to repetitive and vexatious legal challenges. At its core, the Page 36 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 principle stipulates that all claims and issues that could and should have been raised in an earlier proceeding are barred from being raised in subsequent litigation, except in exceptional circumstances. This rule not only supports the finality of judgments but also underscores the ideals of judicial propriety and fairness.
145. There are, four situations where in second proceedings between the same parties doctrine res judicata as a corollary of the principle of abuse of process may be invoked : (i) cause of action estoppel, where the entirety of a decided cause of action is sought to be relitigated; (ii) issue estoppel or, ‚decided issue estoppel,‛ where an issue is sought to be relitigated which has been raised and decided as a fundamental step in arriving at the earlier judicial decision; (iii) extended or constructive res judicata i.e., ‚unraised issue estoppel,‛ where an issue is sought to be litigated which could, and should, have been raised in a previous action but was not raised; (iv) a further extension of the aforesaid to points not raised in relation to an issue in the earlier decision, as opposed to issues not raised in relation to the decision itself.
146. As part of the broader rule against abuse of process, the Henderson principle is rooted in the idea of preventing the judicial process from being exploited in any manner that tends to undermine its integrity. This idea of preventing abuse of judicial process is not confined to specific procedure rules, but rather aligned to a broader purport of giving quietus to litigation and finality to judicial decisions. The essence of this rule is that litigation must be conducted in good faith, and parties should not engage in procedural tactics that fragment disputes, prolong litigation, or undermine the outcomes of such litigation. It is not a rigid rule but rather a flexible principle to prevent oppressive, unfair, or detrimental litigation.
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149. Piecemeal litigation where issues are deliberately fragmented across separate proceedings to gain an unfair advantage is in itself a facet of abuse of process of law and would also fall foul of this principle. Merely because one proceeding initiated by a party differs in some aspects from another proceeding or happens to be before a different forum, will not make the subsequent proceeding distinct in nature from the former, if the underlying subject matter or the seminal issues involved remains substantially similar to each other or connected to the earlier subject matter by a certain degree, then such proceeding would tantamount to 'relitigating' and the Henderson Principle would be applicable.
150. Parties cannot be allowed to exploit procedural loopholes and different foras to revisit the same matters they had deliberately chosen not to pursue earlier. Thus, where a party deliberately withholds certain claims or issues in one proceeding with the intention to raise them in a subsequent litigation disguised as a distinct or separate remedy or proceeding from the initial one, such subsequent litigation will also fall foul of this principle.
151. Similarly, where a plea or issue was raised in earlier proceedings but later abandoned it is deemed waived and cannot be relitigated in subsequent. Allowing such pleas to be resurrected in later cases would not only undermine the finality of judgments but also incentivize strategic behaviour, where parties could withdraw claims in one case with the intention of reintroducing them later. proceedings. Abandonment signifies acquiescence, barring its reconsideration in subsequent litigation. This ensures that judicial processes are not misused for tactical advantage and that litigants are held accountable for their procedural choices. Parties must litigate diligently and in good faith, presenting their entire case at the earliest opportunity.
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152. The Henderson principle operates on the broader contours of judicial propriety and fairness, ensuring that the judicial system remains an instrument of justice rather than a platform for procedural manipulation. Judicial propriety demands that courts maintain the finality and integrity of their decisions, preventing repeated challenges to settled matters. Once a matter has been adjudicated, it should not be revisited unless exceptional circumstances warrant such reconsideration. Repeated litigation of the same issue not only wastes judicial resources but also subjects the opposing party to unnecessary expense and harassment. judicial processes are not merely technical mechanisms but are rooted in principles of equity and justice.
153. Both logic and principle support the approach that the judicial determination of an entire cause of action is in fact the determination of every issue which is fundamental to establishing the entire cause of action. Thus, the assertion that the determination is only on one of the issues is flawed as it is nothing but an indirect way of asserting that the whole judgment is flawed and thereby relitigating the entire cause of action once more. The effect of a judicial determination on an entire cause of action is as if the court had made declarations on each issue fundamental to the ultimate decision.‛
43. The Supreme Court in the case of Devilal Modi v. Sales Tax Officer, Ratlam10, clarified and highlighted the need to extend rule of constructive res judicata to writ proceedings. It was held that it would not be open to the party to take one proceeding after another and urge new grounds every time, and would be inconsistent with considerations of public policy. The relevant observations read as under:-- 10
AIR 1965 SC 1150 Page 39 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 ‚8. *<+ the rule of constructive res judicata which is pleaded against him in the present appeal is in a sense a somewhat technical or artificial rule prescribed by the Code of Civil Procedure. This rule postulates that if a plea could have been taken by a party in a proceeding between him and his opponent, he would not be permitted to take that plea against the same party in a subsequent proceeding which is based on the same cause of action; but basically, even this view is founded on the same considerations of public policy, because if the doctrine of constructive res judicata is not applied to writ proceedings, it would be open to the party to take one proceeding after another and urge new grounds every time; and that plainly is inconsistent with considerations of public policy *<+‛
44. In the case of Shankara Coop. Housing Society Ltd. v. M. Prabhakar11, the Apex Court has held that the grounds which were available to the parties to raise but did not raise it as one of the grounds, cannot be raised later on and would be hit by the principles analogous to constructive res judicata. The relevant observations read as under:--
‚89. In the present case, it is admitted fact that when the contesting respondents filed WP No. 1051 of 1966, the ground of non-compliance with statutory provision was very much available to them, but for the reasons best known to them, they did not raise it as one of the grounds while challenging the Notification dated 11-12-1952 issued under the Evacuee Property Act. In the subsequent writ petition filed in the year 1990, initially, they had not questioned the legality of the notification, but raised it by filing an application, which is no doubt true, allowed by the High Court. In our view, the High Court was not justified in permitting the petitioners therein to raise that ground and answer the same since the same is hit by the principles analogous to constructive res judicata.‛ 11 (2011) 5 SCC 607 Page 40 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39
45. The Petitioner No. 2 herein who had petitioned this Court earlier could have and ought to have relied upon the grounds with relation to the applications made to the registrar of companies (between 2013 to 2015) at the time of filing of that Writ Petition. After having not being done it would be impermissible to allow the same petitioners to urge the said facts which were otherwise had occurred at that point in time when that prior Writ Petition had been filed. That being the case, the instant case is squarely covered by the discussion here in above. The subsequent/ successive petition i.e. the present petition would be barred by the principles of constructive res judicata by applying the "Hendersen principle" as enunciated hereinabove.
46. From a conjoint reading of the aforesaid it emerges that both Petitioner No. 1 and Petitioner No. 2 have tried their luck not only by way of civil suits and appeals there from but also by filing a Writ Petition, with the self-same prayer, before this court. In all these proceedings the Petitioners have sought declaration of their legal rights which has consistently been repelled by all the courts concerned on different counts. That being stated, the common thread of the story has been kept the same even in the present Writ Petition with the only addition being that certain other persons have been introduced who are said to have filed RTI applications and that the response to those applications has been said to be unsatisfactory. It seems that the same has been done only as a desperate measure to clutch on to the last straw available and to somehow perpetuate this litigation endlessly. Whereas, in fact, from Page 41 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 the records it emerges that all the applications in question have been attended to as required by law by the competent authorities on different instances and occasions. The substratum of the grievance still remains that the petitioners are entitled to the shares of the Late Harishchandra Deo even when more than half a dozen court order at various levels have found to the contrary. It such scenarios which have to be dealt with sternly and such Piecemeal litigation where issues are deliberately fragmented, as a matter of concerted strategy, across separate proceedings to gain an unfair advantage is in itself a facet of abuse of process of law and would also fall foul of the Henderson Principle. In Celir LLP (supra) it has been specifically held that merely because one proceeding initiated by a party differs in some aspects from another proceeding or happens to be before a different forum, will not make the subsequent proceeding distinct in nature from the former, if the underlying subject matter or the seminal issues involved remains substantially similar to each other or even when connected to the earlier subject matter by a certain degree. Such vexatious hydra headed litigations deserve to be frowned and must be quelled.
VI. CONCLUSION:
47. In view of the discussion here in above this Court arrives at a clear and unequivocal conclusion that the present Writ Petition is not only liable to be dismissed at the very threshold on account of the principles discussed and issues framed hereinabove. But also, on account of the fact that the Petitioners have approached this court with unclean hands Page 42 of 43 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM- SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 28-Feb-2025 18:04:39 and the conduct of the petitioners herein leaves much to be desired. This Court can only express hope that the petitioners will be well advised not to indulge in such unbecoming practice of abusing the process of law in the future.
48. Resultantly, the Writ Petition stands dismissed and all pending applications are disposed of accordingly. The Petitioners are directed to deposit a cost of Rs.20,000/- within 4 (four) weeks from today with the Orissa High Court Bar Association Welfare Funds.
(Dr. S.K. Panigrahi) Judge Orissa High Court, Cuttack, Dated the 25th February, 2025 Page 43 of 43