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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9429 OF 2019 (@ SLP (CIVIL) NO. 25341 OF 2019)

SHYAM MADAM MOHAN RUIA & ORS.             ...APPELLANT(S)

                               VERSUS

MESSER HOLDINGS LIMITED & ORS.            ...RESPONDENT(S)

       WITH

SLP (CIVIL) NO.  26642 OF 2019

J U D G M E N T

R. BANUMATHI, J.

Leave granted in SLP(C) No.25341 of 2019.

2. Being aggrieved by the order dated 08.08.2019 as corrected by

order dated 19.09.2019 passed by the Division Bench of the High

Court of Bombay in Commercial Appeal No.148 of 2017 in Suit No.2410

of 2008 in and by which the Division Bench has reversed the order

of the Learned Single Judge dated 16.03.2017 by holding that the

Suit No.2410 of 2008 filed by respondent No.1- MHL is within the

period of limitation, the appellants are before this Court in this

appeal.

3. On the first date of hearing, Mr. Fali S. Nariman, learned

senior counsel appearing for the appellants-Ruias sought permission

to amend the synopsis and also grounds of appeal. By the order

dated 13.11.2019, the same was permitted.

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4. When  the  matter  came  up  for  admission,  Ms.  Aruna  Gupta,

learned counsel for respondent No.1 who is contesting respondent,

has taken notice.  The first respondent was represented by learned

Senior counsel Mr. Dhurv Mehta.

5. For hearing, the matter was adjourned to number of dates and

taken up on 13.12.2019.  We have heard Mr. Fali S. Nariman, Mr. S.

Ganesh and Dr. A.M. Singhvi, learned senior counsel appearing on

behalf of the appellants as well as Mr. Dhruv Mehta, learned senior

counsel appearing on behalf of the respondent no.1 along with Mr.

Sreegesh N.K. learned counsel.

6. For convenience, the parties are referred in abbreviated form:

Appellants  –  Ruias;  Respondent  No.1  -  Messer  Holdings  Limited

(MHL); Respondent No.2 – Bombay Oxygen Investments Ltd. (BOIL);

Respondent No.3 - Messers Giresheim GmbH (MGG) and Respondent No.4

– Goyal MG Gases Private Limited (GGL).

7. The  contesting  parties  have  had  several  rounds  of

litigations:-  (i)  Civil  Suit  No.I  -  1810  of  1998  filed  by

respondent no. 4 - GGL against respondent No.3 (MGG); (2) Suit

No.II  –  2499  of  1999  filed  by  the  appellants-Ruias  against

respondent No.3(MGG) and respondent No.4(GGL); (3) Suit No.III -

509 of 2001 filed by the appellants-Ruias against respondent No.4

(GGL) and respondent No.3(MGG) and (4) Suit No.IV - 2410 of 2008

filed by respondent No.1(MHL) with which we are concerned.

8. In Suit No.III – 509 of 2001, Ruias and MGG (respondent No.3)

entered into a settlement on 05.12.2002 wherein MGG (respondent

No.3)  is  purported  to  have  transferred  75,001  shares  of

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BOIL(respondent No.2) and Ruias is purported to have agreed to pay

US$ 154.642 etc. for those 75,001 shares of BOIL (respondent No.2).

It  is  stated  that  parties  thereon  viz  Ruias(appellant)  and

MGG(respondent No.3) have agreed that in view of the settlement,

Ruias would not prosecute the proceedings against respondent No.3

(MGG); but they would pursue their proceedings against respondent

No.1(MHL) and respondent No.4(GGL).

9. Respondent No.1-MHL filed the Suit No.IV - 2410 of 2008 to

cancel the said Settlement Agreement dated 05.12.2002 under which

75,001 shares of respondent No.2(BOIL) has been transferred to the

appellant(s)- Ruias by respondent No.3 (MGG). In Suit No.IV, MHL

(respondent  No.1)  inter  alia prayed  for  injunction  against  the

development agreement dated 04.02.2008 granting development rights

to one Company by name HDIL and for declaration of MHL-respondent

No.1’s ownership of 75,001 shares of BOIL (respondent No.2) and

other reliefs.  

10. The  dispute  between  the  parties  had  also  travelled  up  to

Supreme Court and this Court decided the matter in the case of

Nugen Machineries Limited v. Minal A. Goswami & Anr. reported in

(2016) 11 SCC 484. Considering the contentions of the parties, and

observing that rights of parties are to be established in Suit No.

IV, in paras (38), (44) and (45), the Supreme Court held as under:-

“38. The existence of title in MGG in the said 75,001 shares cannot be disputed by either GGL or MHL, at least, till the date of the consent award i.e. 21-9-2000 because GGL and MHL’s claim for title over the said shares flows from MGG’s prior title and the subsequent alleged transfer pursuant to the consent award. In such a case, because of MGG’s purported transfer of the title

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in  the  75,001  shares  to  the  Ruias  under  the settlement  dated  5-12-2002,  the  Ruias  should normally be entitled to have their names entered into the records of BOCL as holders of the said shares  by  following  appropriate  procedure.  If either GGL or MHL is objecting to the right of MGG to effect the said transfer in favour of the Ruias, they must establish a superior title (to MGG) in the said shares. It goes without saying that it can be done only in some legal action initiated by either GGL or MHL or both jointly. But  they  cannot  seek  a  declaration  of  their title in Suits II and III filed by the Ruias. In a bid to establish their title MHL filed Suit

IV19. The right of MHL, if any, will have to be decided in the said suit. Until the said suit is decided, we do not see any ground in law on which  either  GGL  or  MHL  can  object  to  the transfer of the shares in favour of the Ruias pursuant to the settlement dated 5-12-2002. ……….

44.  However,  in  the  absence  of  any  legally established  title  as  on  today  to  the abovementioned shares in any party other than MGG,  whether  the  Ruias  would  be  entitled, pursuant to the settlement dated 5-12-2002, to have their names entered into the registers of BOCL as holders of the said shares is a matter for  the  Ruias  to  explore.  However,  such  an entitlement, if any, should be subject to the result of Suit IV.

45. We make it clear that we are not deciding by this order, the existence or otherwise of any right or its enforceability in the 75,001 shares of BOCL in favour of either MHL or GGL. It is open to them to establish their right in Suit IV. The defendants in Suit IV are at liberty to raise every defence available in law and fact to them.”

11. In Suit No. IV-2410 of 2008 filed by respondent No.1 (MHL),

the appellants filed affidavit under Section 9A CPC (Maharashtra

Amendment) raising preliminary issue of limitation by contending

that the suit prayers (q), (r), (s), (t), (u) and (v) in respect of

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claiming ownership over the 75,001 shares of BOIL (respondent No.2)

by MHL (respondent No.1) is barred by limitation as the Settlement

Agreement  between  the   appellants  –  Ruias  was  entered  into  on

05.12.2002 and the Suit No. IV- 2410 of 2008 filed by respondent

No.1(MHL) has been filed in the year 2008 which is clearly barred

by limitation. Respondent No.1(MHL) contested the said affidavit by

contending that MHL (respondent No.1) was kept in dark about the

settlement dated 05.12.2002 between the Ruias and MGG (respondent

No.3) and that the same came to their knowledge only on 14.10.2005

when they were handed over the copy of the settlement agreement

dated 05.12.2002. Respondent No.1 further contended that the suit

filed by respondent No.1 was within the period of limitation as

they came to know about the Settlement only on 14.10.2005.

12. By  the  order  dated  16.03.2017,  the  learned  Single  Judge

allowed the petition filed by the appellants-Ruias by holding that

respondent  No.1  (MHL)  is  a  stranger  to  the  Settlement  dated

05.12.2002.  Learned  Single  Judge  held  that  the  cause  of  action

arose  to  respondent  No.1  (MHL)  way  back  on  24.08.2002  when

respondent No.1-MHL was impleaded as defendant in Suit No.2499 of

1999 in which MHL came to be impleaded as the defendant as per

Chamber Summons No.455 of 2002 dated 04.10.2002. Learned Single

Judge  held  that  by  virtue  of  Chamber  Summons  an  order  passed

thereon,  respondent  No.1  had  knowledge  that  the  appellants  are

claiming title of the shares in dispute even in the year 2002 and

the receipt of copy of the settlement agreement dated 05.12.2002 on

14.10.2015 was immaterial. It was held that respondent No.1 (MHL)

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approached the Court only in the year 2008 by filing the Suit

No.2410 of 2008 and therefore, the suit filed by respondent No.1

(MHL) is barred by limitation.

13. Being  aggrieved  by  the  order  of  the  learned  Single  Judge,

respondent No.1 (MHL) filed Commercial Appeal before the Division

Bench of Bombay High Court. The Division Bench vide its impugned

order set aside the order passed by the learned Single Judge by

holding  that  the  right  to  sue  occurred  to  respondent  No.1  on

14.10.2005  when  the  copy  of  the  Settlement  Agreement  dated

05.12.2002 between respondent No.3 (MGG) and the appellants-Ruias

was supplied to respondent No.1(MHL). The Division Bench held that

since  respondent  No.1  had  knowledge  of  the  Settlement  only  on

14.10.2005, the suit filed by MHL-respondent No.1 in the year 2008

is well within the period of three years from the date of knowledge

of the Agreement and, therefore, the suit is within the period of

limitation.  The  Division  Bench  directed  the  suit  to  proceed  in

respect of all other prayers made in the suit. Being aggrieved, the

appellants-Ruias have preferred this appeal.

14. We  have  heard  the  submissions  of  learned  Senior  counsel

appearing for the appellant and learned Senior counsel appearing

for the first respondent.  We have considered the impugned judgment

and perused the materials on record.

15. Though, various contentions have been raised on the merits of

the  matter,  in  view  of  the  change  in  the  law  and  deletion  of

Section  9A  of  the  Code  (in  its  application  to  the  State  of

Maharashtra) and the judgment of the Supreme Court in Nusli Veville

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Wadia v. Ivory Properties & Ors. (2019) 13 SCALE 620, we are of the

opinion that it is not necessary to consider the merits of the

contentions. Suffice to refer to the change in the law and the

interpretation given by this Court.

16. The State of Maharashtra inserted Section 9A to the Code of

Civil  Procedure  vide  Code  of  Civil  Procedure  (Maharashtra

Amendment) Act, 1977. Section 9A provided that where an application

has  been  made  for  granting  or  setting  aside  an  order  granting

interim relief in a suit, if either of the party challenged the

jurisdiction of the Court to entertain the suit, the Court would

have  to  decide  the  preliminary  issue  of  jurisdiction  before

deciding the aforesaid application. The amended Section 9A came to

be  repealed  by  CPC  Maharashtra  (Amendment)  Ordinance  2018  with

effect  from  27.06.2018  and  Section  9A  of  the  Code  (in  its

application to the State of Maharashtra) was deleted by Section 3

of the Ordinance. The above Ordinance was replaced by the Code of

Civil Procedure (Maharashtra Amendment) Act, 2018 on 29.10.2018. It

was provided that the preliminary issues framed under Section 9A

shall be treated as an issue under Order XIV CPC and be decided by

the  courts  with  other  issues  as  the  court  may  deem  fit.   On

15.12.2018,  the  State  of  Maharashtra  enacted  the  Code  of  Civil

Procedure (Maharashtra Amendment) Act, 2018 which provided for a

saving clause.  Section 2 of the Amendment Act provided that if the

court has ordered to decide an issue as a preliminary issue before

the date of deletion of Section 9A, it shall be decided by the

court as a preliminary issue.

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17. After repeal of Section 9A, because of divergent views, in

Foreshore Cooperative Housing Society Limited v. Praveen D. Desai

(Dead) Through Legal Representatives and others (2015) 6 SCC 412

and Kamalakar Eknath Salunkhe v. Baburav Vishnu Javalkar and Ors.

(2015) 7 SCC 321, Section 9A as it stood came up for consideration

before the three Judges Bench of this Court in  (2019) 13 SCALE

620(supra). The divergent views which led to consideration by the

larger Bench is as under:

“The reference has been made by a Division Bench of  this  Court  vide  order  dated  17.8.2015, doubting the correctness of the decision of this Court  in  Foreshore  Cooperative  Housing  Society Limited v. Praveen D. Desai (Dead) through Legal Representatives and others, (2015) 6 SCC 412 with respect  to  the  interpretation  provisions contained  in  Section  9A  of  the  Code  of  Civil Procedure,  1908  (for  short,  'the  CPC')  as inserted by the Maharashtra Amendment Act, 1977. It has been opined that the word “jurisdiction” under Section 9A is wide enough to include the issue of limitation as the expression has been used in the broader sense and is not restricted to  conventional  definition  under  pecuniary  or territorial  jurisdiction,  the  decision  in Kamalakar  Eknath  Salunkhe  v.  Baburav  Vishnu Javalkar  and  Ors.,  (2015)  7  SCC  321,  taking contrary view, is per incuriam in view of the larger  Bench  decision  in  Pandurang  Dhondi Chougule and Ors. v. Maruti Hari Jadhav and Ors, AIR 1966 SC 153 as well as other larger Bench decisions”.

18. After considering the various judgments and the submissions,

the Supreme Court summarized the conclusion and held as under:

“77(a) Given the discussion above, we are of the considered opinion that the jurisdiction to entertain  has  different  connotation  from  the jurisdictional  error  committed  in  exercise thereof.  There  is  a  difference  between  the existence  of  jurisdiction  and  the  exercise  of jurisdiction.  The  expression  jurisdiction  has been used in CPC at several places in different contexts  and  takes  colour  from  the  context  in

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which  it  has  been  used.  The  existence  of jurisdiction  is  reflected  by  the  fact  of amenability  of  the  judgment  to  attack  in  the collateral  proceedings.  If  the  court  has  an inherent  lack  of  jurisdiction,  its  decision  is open to attack as a nullity. While deciding the issues  of  the  bar  created  by  the  law  of limitation,  resjudicata,  the  Court  must  have jurisdiction  to  decide  these  issues.  Under  the provisions of section 9A and Order XIV Rule 2, it is  open  to  decide  preliminary  issues  if  it  is purely a question of law not a mixed question of law and fact by recording evidence. The decision in Foreshore Cooperative Housing Society Limited (supra) cannot be said to be laying down the law correctly.  We  have  considered  the  decisions referred  to  therein,  they  are  in  different contexts. The decision of the Full Bench of the High  Court  of  Bombay  in  Meher  Singh  (supra) holding that under section 9A the issue to try a suit/jurisdiction  can  be  decided  by  recording evidence if required and by proper adjudication, is  overruled.  We  hold  that  the  decision  in Kamlakar  Shantaram  (supra)  has  been  correctly decided and cannot be said to be per incuriam, as held  in  Foreshore  Cooperative  Housing  Society Limited (supra).

77.(b) Section  2  of  Maharashtra  Second Amendment  Act,  2018  which  provides  that  where consideration of preliminary issue framed under section 9A is pending on the date of commencement of the CPC, the said issue shall be decided and disposed of by the court under section 9A as if the  provision  under  section  9A  has  not  been deleted, does not change the legal scenario as to what can be decided as a preliminary issue under section  9A,  CPC,  as  applicable  in  Maharashtra. The saving created by the provision of section 2 where consideration of preliminary issue framed under  section  9A  is  pending  on  the  date  of commencement  of  the  Code  of  Civil  Procedure (Maharashtra Amendment) Act, 2018, can be decided only if its comes within the parameters as found by  us  on  the  interpretation  of  section  9A.  We reiterate that no issue can be decided only under the  guise  of  the  provision  that  it  has  been framed  under  Section  9A  and  was  pending consideration on the date of commencement of the (Maharashtra Amendment) Act, 2018. The reference is answered accordingly. [underlining added]

Let the matters be placed before an appropriate

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Bench for consideration on merits”.  

19. In view of judgment passed by the Hon’ble Three Judges Bench

reported in  2019 (3) SCALE 620 – Nusli Veville Wadia vs. Ivory

Properties & Ors., the question of limitation will have to be

considered  along  with  other  issues  that  would  arise  for

adjudication  in  Suit  No.2410  of  2008  filed  by  respondent  No.1

(MHL). Certain observations have been made by the learned Single

Judge as well as by the Division Bench on the merits of the matter

and the contention of the parties. In our view, the trial in the

Suit No. IV-2410 of 2008 has to be proceeded independently on its

own merits.  In view of the judgment by the Three Judges Bench,

the decision rendered by the learned Single Judge as well as by

the Division Bench on the issue of limitation by considering that

as preliminary issue would become nullity and the matter would

have to proceed afresh.

20. The appeal is disposed of with the following directions and

observations:

(i) The order dated 16.03.2017 passed by the learned

Single Judge in Suit No. 2410 of 2008 and the order

dated 08.08.2019 (corrected on 19.09.2019) passed

by the Division Bench in Commercial Appeal No. 148

of 2017 arising out of Suit No. 2410 of 2008 are

set aside.

(ii) Suit No.2410 of 2008 filed by respondent No.1 shall

proceed afresh from the stage of framing of the

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issues. The question of limitation to be determined

along with other issues arising for consideration.

The  suit  shall  be  proceeded  without  being

influenced by any of the views expressed by the

learned Single Judge as well as by the Division

Bench of the High Court in the impugned judgment.

(iii)Respondent No.1 is at liberty to request the Court

to  take  up  their  pending  applications  and  the

learned  Court  shall  consider  them  on  their  own

merits.

(iv) We request the learned Single Judge to take up the

Suit No.2410 of 2008 filed by respondent No.1 (MHL)

and proceed with the same expeditiously and dispose

the same preferably within a period of 18 months.

(v) We make it clear that we have not expressed any

opinion on the merits of the matter.

SPECIAL LEAVE PETITION (CIVIL) NO.  26642 OF 2019

Consequently, in view of the order passed in Civil Appeal

arising out of SLP(C)No.25341 of 2019, this special leave petition

is also disposed of.

.………………………………………….J. [R. BANUMATHI]

……………………………………...J.    [A.S. BOPANNA]

NEW DELHI 13TH DECEMBER, 2019