Karnataka High Court
Omega Hospitals Pvt Ltd vs Dr. C.Joe Verghese on 19 April, 2012
Author: S.Abdul Nazeer
Bench: S.Abdul Nazeer
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8 Epsilon Clinical Research Pvt. Ltd., Omega Hospitals. Mahaveera Circle. Kamkxmadv. Mungalore 2. repid. by its l)irector.
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Dr.K.Mukund, sb K.Manjunath.
Omega Hospitals Pvi. Ltd..
Mahaveera Circle. Kankanady, Mangalore --2.
9 Epsilon Educational Charitable Trust, Omega Hospitals. Mahaveera Circle. Kankanady. Mangalore --2 Reptd. by its Trustee Dr.K.Mukund, Sb K.Manjunath. na Prathiksha.
Kadri Kambla Road. Mangalore. Petitioners.
....
(common) (By Sri Ravi B. Naik. Sr. Adv. for Sri P.P. Hegde. Adv.) And:
Dr.C.Joe Verghese, Sb late C.P.Verghese. Aged about 64 years. Residing near U.B.M. School, Kalpane Road. Balmatta. Mangalore.
2 Dr. P. Mahahala Rai.
Sb Thimmappa Rai, Aged about 64 years.
RJa Mandara. LAnver Bendoor.
1 Cross, Mangalore 2.
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Omega Hospitals Pvt. Ltd., Mahaveera Circle, Kankanady, Mangalore --2, a company incorporated Under the Companies Act, 1956, Having its registered office at Mahaveera Circle, Kankanady, Mangalore --2, Reptd. by its Chairman Dr.K.Mukund, Sb K.Manjunath, na Prathiksha, Kadni Kambla Road, Mangalore.
2 Dr. K. Mukund, Sb K. Manjunath, Aged about 63 years, R/a Prathiksha, Kadni Kambla Road, Mangalore.
3 Dr. Suresh Surathkal, Sb M.K. Sanil, Aged about 59 years, R/a Bhuvaneshwani Nilaya, Surathkal, D.K. 4 Dr. A.GJayaknishnan, Sb A.G.K.Nair, Aged about 60 years, Omega Hospitals Pvt. Ltd., Mahaveera Circle, Kankanady, Mangalore --2.
R2 to R4 are Directors, Omega Hospitals Pvt Ltd., Mahaveera Circle, Kankanady, Mangalore -2.
75 Dr.Bhaskur Bappal.
Sb Birmanna, Aged about 64 years, i-ba Jeppu Bappal. Mangalore --2.
6 Dr.Mohan Chandra Suarna, Sb Umanath Suvarna, Aged about 57 years.
RIa Willy Centre. Balmatta.
Mangalore.
7 Mr. K.Surendra.
Sic Manjunaiha.
Aged about 67 years, C/o Omega Hospitals Pvt. Ltd., Mahaveera Circle. Kankanadv, Mangalore --2 8 Epsilon Clinical Research Pvt. Ltd..
Kumar International Bldg., Bendoor Road. Mangalore.
repid. by its Director.
Dr.K.Mukund, sin K.Manjunath, Aged about 65 years.
9 Epsilon Educational Charitable Trust.
Kuniar International Bldg., Bendoor Road, Mangalore, reptd. by its L)irector.
l)r. K.Mukund. sb K. Man junatli.
Aged about 65 years. . . -. Respondcnts. (By Sri Ravi B. Naik. Sr. Adv. for Sri P.P. Hegde. Ads?.) c..caat.
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2. The plaintiffs and defendant Nos.2 to 6 are the Directors of first defendant-company. namely. Omega Hospitals Private Limited incorporated under the Companies Act, 1956. The plaintiffs have filed the above stilt for a declaration that defendant Nos.2. 5. 7 to 9 or any persons. body corporate, lirm, trust. institution. etc., claiming through or under them have no manner of right to use the hospital building of the first defendant for the objectives/purpose of defendant Nos.8 and 9 and also any other organizations and for a pennaneut injunction restraining defendant Nos.2, 5, 7 to 9 or any person/persons, firm, body corporate, trust. institution. etc.. claiming through or under them from using the aibresaid building 11w the purpose of defendant Nos.8 and 9 and also any other organization. The contention of the plaintiffs is that defendant Nos.2 to 6 by taking advantage of their collective thin majority in holding the shares, had introduced defendant No.4 illegally as a signatory to operate the bank account of the company along with the second defendant in order to bypass plaintiff No. I. who was the original en--signatory w operate the batik account ol 0 ji i.("II(' tin. I)efenjant ' k' ii l4',_ I t tiek bIclelIIk..d :jpj ii'. •> iii,_ I pL'inl .11 II'II' t... ::'. ia a'petaiI "N' 'I hi. a1!'1I1.Ii1 I)elr;nliii: \: ;!' a. ''.' !I.', It' •. teligealK: aIz.nl"
t rIaintifl Ne hd 1jh'.ateu and %%'t'kai Lq' :' ial'C rti,iaaijiig d'ita.' 15 Ii '(AC :n tin. aik_ed ("'aid 1hiJii.:
ht'srn that the alleged restnatit'n i'f nLm'!ift \a 2 ha' l'ei. aceplni. rite :atd 'nailer % •hfl pe"d;n . ioie rue ('ompain I :n Bicud. ( iK!'zLii \patit fti'fli that. then. • ;l'igJt;c'li beie. n Ijinilil md deiend'nt \ s ti F fl1,cII1 L' Boaiu C F m ml L?flt hiflU ( 3 i iflhI%%lOfl 01 Ntis " u' 6 as D s also ) ?JliI() Civ.' "6 lt1( ' ti ' ih :i. 9I • ) 'It) it t 1.
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.NosT., 5 and 7 ha.ve opened a hrane.h. offi ee of defe..ndant Nos. 8 and 415 t.:
at floor of Onsega Hospital building illegally, unauthordedly, without t.h.e e onsr.nt and kn.owledge o'f t.h.e p1 aind 1.15. Thy., plaintiffs have noticed the. fixad..on of: separate 'nai.'n.e hoard pertaining to aff shoot in.st.i totion N defendant .Noi.c 8 and 9 to the hoard stand of' the de.feridant hospi.tal a.n.d also si mdar name hoa.rd fixed ont5.nde the. sooth wi.ng in t.he 4° fi.oor o'f the hospital hnild.ing on 9.5.2011. That is how th.e.. suit caine to he filed by the plai.ntifhS for the af,bresaid reliefs.
3 The 6° de.fendar.t h.ai.'i filed t.he wrftte.n sta.teni.ent e.onte.i' ding amongst others th.at plai.nt.ifff have hee.n despe.rately trying to. sell th.e first defdnslantworr.pany wi t.hont the corns e:.nt of the majority shareholders'. T'he.. 815 defendantthr. Joint Stock Ct. rnpany registered on.eher t.he. C.oni.panie.s A.et is.'.: a tenr.nt under the fi.rst. d.efendrnat eonapany sinlr.r.. 10. 1 2,2.010 on a. mon.thly rent of:' 415 Cs. I 4,400L and June tloni.ng at the 120cr o'f the l,oii.di n.g of the gth first defendant hospital. ihe elef'bndant ii" ":arrying on its:' clinical a 12 th 4 research activities at the floor of the building belonging to the th 8 first defendant. The clinical research activities of the defendant- company are in fact adding to the revenue of the first defendant- company. Thai the patients identi fled by the &' deIndant--company are admitted iii the first dekndant-company for treatment and accordingly, the revenue of the first defendant-company is th 9 augmented. The defendant is a Public Charitable Trust, which is also a tenant under the first defendant company with effect from 10.12.2010 on a monthly rent of Rs.158401-. The 9°' defendant is 4111 carrying on its activities at the floor of the hospital building of the first defendant-company. The defendant is running an educational institution and offering courses in laboratory technology, nursing, hospital administration and clinical research. The product of the said institution will be absorbed by the first th, 4 ih 5 ih 6 defendant--company. The and floors of the hopita1 building of the first defendant--company had remained vacant ftr several years and in fact the leasing out of the vacant premises to th 8 and 9°' defendants brings rental income to the company. The 13 S leasing out of the premises by the first defendant to defendant Nos.8 and 9 was perfectly in accordance with the Memorandum and Articles of Association of the company. He has sought 11w dismissal of the suit.
4. The plaintiffs have filed l.A.No.2 under Order 39 Rules I and 2 of CPC for grant of an order of temporary injunction restraining the defendants. their men. agents or any person. body corporate, firm, trust, institution, etc., from using the Omega Hospital Building for the objectives/purpose of defendant Nos.8 and 9 and also any other organizations of the respondents pending disposal of the suit. An affidavit of Dr.C.Joe Varghese. the first plaintiff has been filed in support of the said application. The contentions urged in the plaint has been again urged in the aflidavit liled in support of the application. The defendants have filed objections to the said application.
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5. The defendants have filed l.A.No.3 under Order 7 Rule I 1(d) read with Section 1 5 I of CPC for rejection of the plaint as the same is barred under Section I 0-GB of the Companics Act. 1956 ('AcC fix shorfl. In support of the said application, Dr.Bhaskar Bappal, defendatn No.5 has filed an affidavit. In the said affidavit. Mr.Bhaskar Bappal has deposed that as per the hoard meeting held on 7.9.2010 of (he Iirst defendant company. it was resolved to lease out the premises of the first defendant. Before conducting the meeting, the notice has properly been served on the plaintiffs. However, the plaintiffs have failed to attend the said meeting. Thereafter. a valid resolution has been passed on the same day. if the pLaintiffs are aggrieved by the said resolution, they have to challenge the same before the Company Law Board. The Civil Court is not having jurisdiction to entertain the present suit and grant an order of injunction. The said application has been opposed h' the plaintifk h> tIling their objections. 15
6. The trial Court by its order dated 15.7.2011 has allowed l.A.No.2. The respondents, their men, agents or any persons, body corporate, firm, trust, institution were temporarily restrained from using the Omega Hospital Building lbr the objectives/purpose of defendant Nos.8 and 9. 1.A.No.3 tiled by defendant No.5 was rejected. The defendants filed an appeal in M.A.No. 15/2011 on the file of the Principal Senior Civil Judge, Mangalore. challenging the order passed by the trial Court in O.S.No.403/201 1. The lower appellate Court by its order dated 2.8.2011 has dismissed the appeal. However, the court below has reserved liberty to defendant No.2. the Chairman of the first defendant company to call for the general body or Board of Directors meeting and get a valid resolution passed within 30 days from the date of the order or •within a reasonable time and get a valid resolution passed by following the requirements of the Companies Act and lease out the premises to defendant Nos.7 and 8 or any other aspirants 11w promoting the aims and objectives of the first defendant company. The defendants have challenged the said order of the lower 16 a .lSt C. iftati U .P.'s . I. s fi I he ,ilai'.ll.ls I Pt f&.
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have been executed on 10.12.2010 in favour of defendant Nos.8 and 9. Under the said lease deeds. defendant Nos.8 and 9 have been th 4 put in possession of the floor of the building as tenants on payment of monthly rent. It is argued that the copies of the lease deeds and other documents have been produced before the court below. A copy of the said lease deeds have also been produced along with these writ petitions and marked as Annexures 'M and N respectively in W.P.No.31337/201 IL Defendant Nos.8 and 9 * OLJJ have been paying the rents regularly. They cannot he evicted WAc c.o-fr without due process of law. The courts below are not right in ,Z1 €Lv granting an order of injunction restraining defendant Nos.8 and 9 from using the building of the first defendant hospital. (S1Jri)
9. ft is further submitted that since the suit itself was not maintainable having regard to Section 10GB of the Act, the court below ought to have rejected the plaint reserving liberty to the plaintiffs to move the Company Law Board for appropriate reliefs. There Iiwc. the eourt below ought to have allowed l.A.No.3. 19
10. On the other hand. learned Counsel appearing for the plaintiffs submits that the Constitution Bench of the Apex Court in UNION OF INDiA VS. R.GANDHI - 2010 AIR SCW 4004 has held that Section 10GB of the Act is unconstitutional. Therefore, question of rejecting the plaint under Order 7 Rule 11(d) of the CPC does not arise. It is further argued that the lower appellate Court while upholding the order of the trial Court on l.A.No.2 was not justilied in reserving liberty tv' the Board of Directors of the Company to get a valid resolution passed for the purpose of leasing out the premises to defendant Nos.8 and 9 or any other aspirants as it is violative of the aims and objectives of the first defendant company.
1 I. Having regard to the contentions urged. the first question for consideration is whether the courts below are justified in granting an order of injunction restraining the using of the building of the first defendant company by defendant Nos.8 and 9?
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12. The contention of the plaintiffs is that the resolution passed by the Company dated 7.9.2010 1% contrary to law and is violative of the Memorandum and Articles of Association of the company. The materials produced before the Court would clearly indicate that a resolution has been passed by the majority of the Directors of the company for leasing the 4 th floor of the building of the first defendant company in favour of defendant Nos.8 and 9. Thereafter, the lease deeds have been executed on 10.12.2010 for a ih 4 period of eleven months leasing two portions of the floor of the building in favour of defendant Nos.8 and 9. Defendant Nos.8 and 9 were also put in possession of the 4" floor of the building as tenants thereof. The validity of the lease deeds are not under challenge in the suit. Whether the lease deeds executed on behalf of the lirsi defendant company is valid or not has to he decided in an appropriate proceedings. The tact remains that detimdant Nos.8 and 9 have already heel) put in possession of the 4" floor of the building. Since they are already in possession. they cannot be A) 21 0 dispossessed without due process of law. in the circumstances. granting an order of injunction restraining defendant Nos.8 and 9 from using the 4" floor of the building at this stage is invalid. The courts below have not taken into account the execution of the lease deeds by the company in favour of defendant Nos.8 and 9 leasing 4" Iloor of the building in their Ilivour. in my opinion, both the courts have erred in restraining defendant Nos.8 and 9 from using th 4 the floor of the building of the first defendant company. The plaintiffs have not made out a prima facie case for grant of an order of injunction. I am also of the view that balance of convenience is also not in their favour.
13. The next question for consideration is whether the lower appellate Court is justified in reserving liberty to the second defendant, the Chairman of the first defendant company to get a valid resolution passed for leasing out the premises to defendant Nos.S and 9 or any other aspirants for promoting of the aims and objectives of defendant No.1 company? 4 42
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the Act. When Section 10GB itself has been held to be unconstitutional, question of dismissal of the suit does not arise.
16. In the light of the above discussions. I pass the following:
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6) W.P.No.31337/201 lIa1lowed. The order of the trial t i,4JJ 4%4 C'flttI'J Court on 1.A.No.2 dated 15.7.2011 in O.S.No.403/201 I and the 'tat ceuvf judgment and order in M.A.No.15/2011 dated 2.8.2011 on the file )rc&Y c&Oti 3si ::ktJ.
t0 of the Principal Senior Civil Judge. Mangalore. are hereby quashed. I.A.No.2 filed by the plaintiffs in O.S.No.403/201 I is hereby disniissed.
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ii) Having regard to the observations made in paragraph 14 of the order, W.P.No.433391201 1 should be allowed. However, in of the dismissal of I.A.No.2 as abo'e. it does not survive for consideration. Ordered accordingly.
(iii) W.P.No.31569/201 1 is dismissed. The order passed by the trial Court on l.A.No.3 dated 15.7.2011 in O.S.No.403/201 I oil 1 I r " liii. (t iC 1 I \t1c1''i'njI ( ni Ia I I i ....i,ni.. I).ls :' ;i\ i I hc 'rLi! ( '.;gr t• ': '•I tIi' tI:t () S Nø fl 2W I in itC' 'I t"tlkr ' ab ini n jib ,, 1 iv' Ii id 'II ii','j,ih, rn'fl ili: Jute 'i ts:ipt 'i a ep 't 'his i)rdei tith'uc hc,n inl!tii,',icecj Iyj 1111% 'rdei \i O%L% ,1 •1• --
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