Allowed

N Narayana v. M/S. Hoysala Building Development Co. Pvt. Ltd.

Karnataka HC1 Sept 2023CA/819/2003

Case brief

AI extract

What is this about?

This Court allowed an applicant's company application declaring a specific property not to be the asset of a company in liquidation. The Court dismissed the Official Liquidator's report, holding that claims about the property were barred by res judicata as they were conclusively settled in prior litigation up to the Supreme Court.

What did the court decide?

The property is declared not to be the company's asset; the Official Liquidator is restrained from taking possession or interfering; the Official Liquidator's report is dismissed.

N Narayana Vs M/S. Hoysala Building Development Co… — Company and Corporate | Karnataka HC (2023)

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1^ST DAY OF SEPTEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR COMPANY APPLICATION NO. 819 OF 2003

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COMPANY PETITION NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991- STA/S-635 OF 2003

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BETWEEN:

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N NARAYANA S/O LATE NARASIMHAIAH AGE.54 YEARS R/O.NO.23, 14^TH MAIN ROAD III BLOCK, JAYANAGAR EAST BANGALORE-560 011.

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…APPLICANT (BY SRI. M.R. RAJAGOPAL, SENIOR ADVOCATE FOR SRI.S.SARAVANA, ADVOCATE)

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AND:

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Digitally signed by VANDANA S Location: HIGH COURT OF KARNATAKA

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M/S. HOYSALA BUILDING DEVELOPMENT CO PVT LTD A COMPANY REGISTERED UNDER THE COMPANIESACT 1956 HAVING ITS REGSTD OFFICEAT NO.373/A, "PREM NIVAS", 6^TH A CROSS, 13^TH MAIN ROAD, RMV EXTENSION, BENGALURU. (UNDER ORDER OF LIQUIDATION) REPRESENTED BY THE OFFICIAL LIQUIDATOR ATTACHED TO THE HON’BLE HIGH COURT OF KARNATAKA IV FLOOR, D& F WING, “KENDRIYA SADAN” KORAMANGALA, BENGALURU – 560 034.

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…RESPONDENT

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(BY SMT. REVATHI ADINATH NERDE, SRI. JAGADEESHGOUD PATIL, SRI. SRISHAIL NAVALGUND AND MS. KRITIKA RAGHAVEN, ADVOCATES FOR OL)

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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THIS APPLICATION IS FILED UNDER SECTION 446(2)(B) & 2(D) OF THE COMPANIES ACT READ WITH RULE 9 OF THE PROCEDURE RULES & SECTION 151 OF CPC,1908 PRAYING THAT FOR THE REASONS STATED IN THE AFFIDAVIT ACCOMPANYING THERETO THIS HON'BLE COURT MAY BE PLEASED TO PASS AN ORDER HOLDING THAT THE APPLICATION SCHEDULE PROPERTY IS NOT THE ASSET OF THE COMPANY UNDER LIQUIDATION AND FURTHER BE PLEASED TO RESTRAIN THE OFFICIAL LIQUIDATOR FROM TAKING POSSESSION OF THE SCHEDULE PROPERTY AND FURTHER BE PLEASED TO PASS SUCH OTHER ORDER OR DIRECTION AS THIS HON'BLE COURT DEEMS FIT, IN THE INTEREST OF JUSTICE AND EQUITY..

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THIS APPLICATION, COMING ON FOR FURTHER HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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In the aforesaid company petitions, this Court vide order dated 30.06.2002 directed winding up of M/s.Hoysala Building Development Co.Pvt.Ltd., company (in-liquidation) and appointed the Official Liquidator (for short ‘OL’) to manage the affairs of the company and to take further steps in this regard.

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Subsequently, C.A.No.819/2003 is filed on 21.08.2003 by the applicant – Narayan for a declaration that the schedule property bearing Sy.No.79/5B of Byrasandra village, Corporation No.23 and 23/2 to 23/11, 16^th ‘A’ main road, 3^rd Block, Jayanagar East,

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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measuring East - West 240 ft and North – South 200ft was not the asset of the company (in-liquidation) and to restrain the OL from taking possession of the schedule property and for other reliefs. In the said CA 819/2003, the OL filed OLR 39/2018 seeking various reliefs. While the OL has filed objections to CA 819/2003, the applicant therein has also filed objections to OLR 39/2018. Both sides have produced documents in support of their respective contentions and accordingly, both CA 819/2003 and OLR 39/2018 are disposed of by this common order.

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Heard Sri.M.R.Rajagopal, learned Senior counsel for the applicant and Smt.Revathi Adinath Narde, learned counsel for the OL and perused the material on record.

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The material on record discloses that the applicant has filed the instant application in relation to the schedule property bearing Sy.No.79/5B of Byrasandra village. The applicant contends that the schedule property originally belonged to one Togur Ramaiah Reddy and that the applicant and others were his successors in interest and had become the owners in possession and enjoyment of the schedule property and the details in this

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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regard have been narrated in the Affidavit in support of the application.

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The applicant contends that the company (in liquidation) is said to have entered into agreements dated 12.11.1981 with Shankar Reddy and others to purchase land bearing Sy.No.79/4 of Byrasandra village measuring East - West 230 ft and North - South 200ft. The said Shankar Reddy manipulated records in collusion with Nagaraja Shetty, one of the Directors of the company (in liquidation) and put forth a false claim over the schedule property bearing Sy.No.79/5B. The said Shankar Reddy and others instituted a suit in O.S.No.2273/1998 against the applicant and other family members before the city civil court, Bangalore. In the said suit, Shankar Reddy and others sought for a declaration that the said land bearing Sy.No.79/4 was the same as the schedule property bearing Sy.No.79/5B and that both the lands were one and the same and for consequential permanent injunction and other reliefs. The said suit was contested by the applicant (arrayed as defendant No.9) and other defendants who not only filed their written statement but also applications, I.A.Nos. 2, 3 and 4 under Order 7 Rule 11 CPC seeking rejection of the plaint. The said

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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applications having been opposed by the plaintiffs, Shankar Reddy and others, vide order dated 10.11.1999, the trial court allowed the applications and proceeded to reject the plaint in O.S.No.2273/1998 by coming to the conclusion that the said plaintiffs had not established that the said property bearing Sy.No.79/4 claimed by them and the schedule property bearing Sy.No.79/5B were one and the same and accordingly, dismissed the suit.

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Aggrieved by the said order passed by the trial court, the said Shankar Reddy and others preferred appeals in RFA Nos.147/2000, 148/2000 and 149/2000 which were dismissed by this Court vide judgment and decree dated 21.01.2008 confirming the judgment and decree of the trial court by reiterating that Sy.No.79/4 claimed by Shankar Reddy and others and the schedule property bearing Sy.No.79/5B owned and possessed by the applicant and others were entirely different and that the said Shankar Reddy and others did not have any right, title, interest or possession over the schedule property.

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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Aggrieved by the judgment and decree passed in RFA No.147/2000 and connected matters, the said Shankar Reddy and others approached the Apex Court in SLP Nos.20046-48/2008, which also came to be dismissed vide order dated 22.02.2016. It is contended that since the right, title, interest and possession of the applicant’s over the schedule property had been confirmed right up to the Apex Court and it was held that the said Shankar Reddy and others did not have any right over the schedule property, the company (in liquidation) which claims to be sale agreement holder from the said Shankar Reddy and others also does not have any right over the schedule property and consequently, the applicant was entitled to a declaration in this regard and consequently, restrained the OL from taking possession of the schedule property, which was not the asset of the company.

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The OL has filed its statement of objections disputing and denying the various contentions and claims urged on behalf of the applicant and has sought for dismissal of the application.

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It is relevant to state that when the instant CA 819/2003 was filed, RFA 147/2000 and connected matters were still pending

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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adjudication before this Court. So also, upon disposal of the said appeals on 21.01.2008, the SLPs were also pending before the Apex Court, till the same were ultimately dismissed on 22.02.2016.

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Subsequently, on 25.10.2017, this Court directed the applicant to approach the OL and secure details with regard to the outstanding relating to the transactions between the flat purchasers and the company (in liquidation). In this context, it is to be stated that the company (in liquidation) is said to have attempted to put up residential apartments in the schedule property bearing Sy.No.79/5B pursuant to understanding between it and ITI employees and had received a sum of Rs.82,62,350/- from them. Thereafter, on 15.11.2017, learned counsel for the OL sought for time to explore the possibility of amicable settlement and a status report was directed to be filed by the OL before this Court and the matter was adjourned to various dates and was posted on 07.02.2018, on which day, learned counsel for the OL submitted that amicable settlement was not possible and the matter was adjourned to 07.03.2018. On that day, the OL submitted that he would file a necessary OLR and accordingly, the instant OLR

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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39/2018 came to be filed on 13.03.2018 seeking the following

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reliefs:-

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“ (a) Permit the official liquidator to file necessary petition before the Hon’ble Apex Court to recall or modify the order dated: 22.02.2016 in SLP No. 20046-20048 of 2008 so as to restore the O.S.No. 2273/1998.

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(b) A direction may be issued upon Bengaluru city Civil Court to transfer the O.S.No. 5544/1996 filed by Smt. Doddathayamma & others to this Court, so that the same may be decided by this Court after being numbered as Company Application.

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A direction may be issued upon Bengaluru City Civil Court to implead M/s. Hoysala Building Development Company Pvt.Ltd., ( In liqn) represented by the Official Liquidator as defendant being the necessary party to O.S.No. 5544/1996.

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(c) A direction may be issued upon Bengaluru City Civil Court to consolidate the Suit Nos. 5544/1996 and 2273/1998 (Once it is restored) since the parties to the suit, property in dispute and cause of action are same.

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In the aforesaid OLR 39/2018, the OL has put forth

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various contentions including referring to earlier court proceedings and has contended that the schedule property bearing Sy.No.79/5B is practically non-existent, as a result of manipulation and fraud by

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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the applicant in CA 819/2003 and his family members. It is contended that Sy.No.79/4 belonging to Shankar Reddy and others which was agreed to be sold in favour of the company (in liquidation) and the schedule property bearing Sy.No.79/5B are one and the same and the various documents relied upon by the applicant in CA 819/2003 do not confer any right in their favour in respect of the schedule property. It is also contended that a suit in O.S.No.5544/1996 filed by Doddathayamma and others, in which,

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the applicant is arrayed as defendant No.4 is pending adjudication before the civil court in relation to the schedule property and since the company (in liquidation) represented by the OL was not a party to the judgment and decree passed in O.S.No.2273/1998, confirmed in RFA No.147/2000 and connected matters by this Court as well as by the Apex Court in SLP No.20046/2008, necessary permission is to be granted in favour of the OL to take appropriate steps to safeguard the schedule property which is an asset of the company (in liquidation). It was therefore contended that the OL was entitled to the various reliefs sought for in OLR 39/2018.

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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As stated supra, the applicant in CA 819/2003 has filed

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his statement of objections to OLR 39/2018 and has contested the said report.

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In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the applicant submits that the question / issue as to whether the schedule property bearing Sy.No.79/5B and Sy.No.79/4, in respect of which, the company (in liquidation) had entered into a sale agreement with Shankar Reddy and others are one and the same had been concluded in favour of the applicant and his family members in the earlier round of litigation culminating in SLP No.20046/2008 dated 22.02.2016, wherein it was held that both the properties were different and that Shankar Reddy and others did not have any right over the schedule property bearing Sy.N o.79/5B. It was submitted that the company (in liquidation) illegally and highhandedly attempted to put up construction over the schedule property and the same was stopped without the construction being completed. It was submitted that though the applicant made an offer to purchase the schedule property, the

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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same did not fructify and amicable settlement could not have been arrived at between the applicant and the OL.

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13.1 Learned Senior counsel invited my attention to OLR 39/2018 and submitted that the reliefs sought for by the OL was not permissible to be granted in the present proceedings. It was submitted that despite having specifically stated that the said OLR 39/2018 was being filed in compliance of orders dated 25.10.2017 and 15.11.2017 passed in CA 819/2003, the various contentions urged in the report traverse well beyond the said orders of this Court and beyond the scope of the present proceedings, particularly when the OL was attempting to re-agitate concluded issues all over again, which was not only barred by res judicata but also opposed by public policy. It was therefore submitted that while CA 819/2003 deserves to be allowed, OLR 39/2018 was liable to be dismissed, especially when the OL was not entitled to invoke Sections 451, 455, 457 or 446 of the Companies Act, 1956, in support of its claim.

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Per contra, learned counsel for the OL would reiterate the various contentions urged in its statement of objections to CA

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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819/2003 and the averments made in OLR 39/2018 and submit that while the application was liable to be dismissed, OLR 39/2018 deserves to be allowed.

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I have given my anxious consideration to the rival submissions and perused the material on record.

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A perusal of the material on record will indicate that it is an undisputed fact that the company (in liquidation) claims to have entered into sale agreements dated 12.11.1981 and 05.06.1982 with Shankar Reddy and others for the purpose of putting up residential apartments and to sell the same to the employees of ITI Ltd., The said agreements disclose that the subject matter was land bearing Sy.No.79/4 of Byrasandra village measuring EastWest 230 ft and North - South 200ft. It is also not in dispute that in the suit in O.S.No.2273/1998 filed by Shankar Reddy and others against State of Karnataka and others including the applicant in CA 819/2003, it was the specific contention of the said plaintiffs that Sy.No.79/4 and Sy.No.79/5B are one and the same and the said suit was filed for declaration that both the properties are one and the same since Sy.No.79/4 had been subsequently assigned

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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Sy.No.79/5B and thereafter, designated corporation No.23, 23/2 to 23/11. This specific contention of the plaintiffs, Shankar Reddy and others was opposed by the applicant – Narayana and others (defendants) and culminated in the aforesaid order dated 10.11.1999, whereby the trial court rejected the claim of Shankar Reddy and others and upheld the claim of Narayan and others and consequently, dismissed the suit. In this regard, the trial court extensively referred to the legal position in relation to Order 7 Rule 11 CPC and came to the conclusion that even as per the plaint averments and documents produced by the plaintiffs themselves, the plaint was liable to be rejected by holding that Sy.No.79/4 and Sy.No.79/5B were two different properties.

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The said Shankar Reddy and others preferred appeals in RFA 147/2000 and connected matters which were dismissed by this Court vide judgment and decree dated 21.01.2008, by holding as under:-

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“ 15. The plaintiffs claim that they are the owners of the suit schedule property. According to them, the suit schedule poroeprty has come to them through Muniyappareddy who, in turn has purchased it form Doreswamy Naidu, and he, in turn has purchased it from one

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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Gopal and he in turn has purchased it from one Chinnappa, who in turn has purchased it in the Court auction. Prior to that, Ramaiah Reddy has purchased the property from one Muniyappa s/o. Doddamarappa and Muniswamy @ Annaiah. In all these sale –deeds the survey number has been mentioned as 79/4 and not 79/5B. Thereafter Muniyappareddy has filed suit in O.S.No. 427/1964 for declaration. In the said suit he has been declared as owner of survey No. 79/4 and possession has been taken through Court in Execution proceedings bearing No. 82/1974. The plaintiffs claim that survey No.79/4 and survey No.79/5B are one and the same. According to them in the year 1940, survey was conducted and the land of Ramaiah Reddy was phoded and survey No.79/5B. This is totally incorrect. The plaintiffs themselves have produced Tippani copy, which clearly shows that survey No.79 has been bifurcated into survey numbers 79/1, 79/2, 79/3, 79/4 and 79/5 and thereafter, survey No. 79/5A and 79/5B. Suvery No.79/5A stands in the name of Doddahanumappa and 79/5B stands in the name of Thogur Ramaiah Reddy. Survey No.79/5B has been purchased by Thogur Ramaiah Reddy from Doddahanumappa. But survey No.79/4 has been purchased from Muniyappa @ Doddamarappa and Muniswamy. It is clear from this, survey No.79/4 is totally different from survey No.79/5. Apart from this, Muniyappa Reddy has filed suit in O.S.No.427/1964 for declaration and he has been declared as owner of survey No.79/4 and he has taken possession through Court in respect of survey No.79/4.

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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16. It is clear from the plaint averments and the documents produced by the plaintiffs that survey No.79/4 is totally different from survey No.79/5B. The Trail Court has rightly held that the plaint does not disclose the cause of action.

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17. The learned counsel for the appellants also contended, thought the first prayer cannot be granted, the second prayer can be granted as the plaintiffs have averred that they are in possession and enjoyment of the schedule property. I do not find any merit in this contention also for the reason, the second prayer cannot be granted, as they are inseparable. Therefore the decision relied upon by the learned counsel for the appellants cannot be of any assistance to him./ Therefore, in my considered view, the trial Court has rightly rejected the plaint on the ground that the plaint does not disclose the cause of action. A meaningful reading of the plaint and the documents produced by the plaintiffs clearly show that the survey No.79/4 is totally different from survey No.79/5B. In view of this, in my considered view of this, in my considered view, there is no merit in these appeals and hence, the are liable to be dismissed.

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18. Accordingly, they are dismissed. “

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As can be seen from the said judgment of this Court,

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the finding recorded by the trial court that Sy.No.79/4 claimed by Shankar Reddy and others and the schedule property bearing

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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Sy.No.79/5B were altogether completely different properties, has been upheld and confirmed by this Court. As stated earlier, in SLP Nos.20046-48/2008, the Hon’ble Apex Court confirmed the judgment of this Court and the trial court. It is therefore clear that the contention of Shankar Reddy that Sy.No.79/4 was the same as the schedule property bearing Sy.No.79/5B has been completely and totally negatived and a categorical finding has been recorded to the effect that both the properties are altogether different, separate and distinct properties. It is needless to state that the said orders / judgments are binding upon the company (in liquidation), who undisputedly claims right over Sy.No.79/4 through and under Shankar Reddy and others as can be seen from the sale agreements. Under these circumstances, I am of the considered opinion that the claim of the OL in its statement of objections to CA 819/2003 as well as its claim in OLR 39/2018 is clearly barred by res judicata and principles of res judicata as well as opposed to public policy, particularly when the OL is attempting to re-agitate settled / concluded issues which is impermissible in law.

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During the pendency of CA 819/2003 and OLR 39/2018, this Court passed an order dated 29.03.2023 granting permission

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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to the OL to seek impleadment in O.S.No.5544/1996 pending before the trial court referred to supra. Pursuant thereto, the said impleadment application I.A.1/2023 filed by the OL on behalf of the company (in liquidation) in O.S.No.5544/1996 was taken up by the trial court which dismissed the same vide order dated 13.07.2023. The said order dated 13.07.2023, passed in O.S.No.5544/1996 has not been challenged by the OL and the same has attained finality and become conclusive and binding upon the company (in liquidation). Viewed from this angle also, the claim of the OL on behalf of the company (in liquidation) in both CA 819/2003 and OLR 39/2018 is liable to be rejected.

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As stated earlier, it is an undisputed fact that the company (in liquidation) claims right over the schedule property under sale agreements dated 12.11.1981 and 05.06.1982 filed by Shankar Reddy and others, plaintiffs in O.S.No.2273/1998. It is also not in dispute that the claim of Shankar Reddy and others has been ultimately rejected in SLP No. 20046/2008 dated 22.02.2016 and the claim of the applicant and his family members in C.A.No.819/2003 has been upheld in relation to the schedule property. There is no gainsaying the fact that res judicata /

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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principles of res judicata apply not only to the parties to the previous suit / litigation but also to parties claiming under them as is clear from Section 11 CPC, which reads as under:-

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“11. Res judicata - No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.

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Explanation I.-- The expression former suit shall denote a suit which has been decided prior to a suit in question whether or not it was instituted prior thereto.

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Explanation II.-- For the purposes of this section, the competence of a Court shall be determined irrespective of any provisions as to a right of appeal from the decision of such Court.

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Explanation III.--The matter above referred to must in the former suit have been alleged by one party and either denied or admitted, expressly or impliedly, by the other.

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Explanation IV.-- Any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit.

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Explanation V.-- Any relief claimed in the plaint, which is not expressly granted by the decree, shall for the purposes of this section, be deemed to have been refused.

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Explanation VI.-- Where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigating .

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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Explanation VII.-- The provisions of this section shall apply to a proceeding for the execution of a decree and references in this section to any suit, issue or former suit shall be construed as references, respectively, to a proceeding for the execution of the decree, question arising in such proceeding and a former proceeding for the execution of that decree.

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Explanation VIII.-- An issue heard and finally decided by a Court of limited jurisdiction, competent to decide such issue, shall operate as res judicata in a subsequent suit, notwithstanding that such Court of limited jurisdiction was not competent to try such subsequent suit or the suit in which such issue has been subsequently raised.”

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As stated supra, the company (in liquidation) which undisputedly claims right over the schedule property through Shankar Reddy and others is bound by the previous round of litigation culminating in SLP No.20046/2008 and consequently, the claim of the company / OL is clearly barred by res judicata / principles of res judicata and the same is liable to be rejected.

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A perusal of the OLR 39/2018 will indicate that it is the specific contention of the OL that the said report is being filed in compliance of the orders dated 25.10.2017 and 15.11.2017 passed by this Court in C.A.No.819/2003. In this context, a perusal of the said orders will clearly indicate that the same relate to some attempts to settlement of the dispute between the parties; however,

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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the prayers sought for in the OLR 39/2018 and the allegations made in support thereof clearly traverse well beyond the said orders dated 25.10.2017 and 15.11.2017; in other words, there is no nexus or connection whatsoever between these orders and the claims / reliefs put forth by the OL in OLR 39/2018, which is liable to be dismissed on this ground alone.

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A perusal of the averments made in paragraphs 16 to 30 will clearly indicate that the same tantamount to re-agitating / reopening concluded issues which had attained finality in SLP 20046/2008 by the Hon’ble Apex Court, which is impermissible in law and barred by res judicata and principles of res judicata , as a result of which, the said claims of the OL are liable to be rejected.

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The contention of the OL that since the company (in liquidation) was directed to be wound up vide order dated 30.06.2002, by virtue of Section 446 of the Companies Act, 1956, the pending O.S.No.5544/1996 before the trial court should be transferred to this Court is devoid of merit; as stated earlier, the impleadment application I.A.1/2023 filed by the OL has been rejected by the trial court by its order dated 13.07.2023; further, the

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NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

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schedule property involved in O.S.No.5544/1996 is Sy.No.79/5B which has already been declared and held to be different from Sy.No.79/4 (claimed by the OL) and confirmed right upto the Apex Court in SLP No.20046/2008. Under these circumstances, it is clear that Section 446 has no application to the facts of the instant case and the contention of the OL in this regard is liable to be rejected.

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In view of the aforesaid facts and circumstances, the OL is not entitled to any of the reliefs sought for in OLR 39/2018 filed on behalf of the company (in liquidation). In this context, it is relevant to state that prayer No.(a) supra is nothing but an attempt to over-reach the order passed by this Court and the Hon’ble Apex Court in SLP No. 20046/2008, which cannot be countenanced in law and the same is liable to be rejected.

¶123

Insofar as prayer No.(b) is concerned, apart from the fact that the said prayer is not permissible under any of the provisions of the Companies Act, 1956, dismissal of I.A.No.1/2023 filed by the OL in O.S.No.5544/1996 would render the alternative prayer infructuous and the same is also hereby rejected.

¶124

22 -

¶125

NC: 2023:KHC:31572 CA No. 819 of 2003 COP NOs. 24 OF 1991, 25 OF 1991, 26 OF 1991, 63 OF 1991, STA/S-635 OF 2003

¶126

In view of rejection of claim of the company (in liquidation) as sought for in prayer Nos.(a) and (b), prayer No.(c) does not survive any longer and the same is also liable to be rejected. Under these circumstances, I am of the considered opinion that CA 819/2003 deserves to be allowed and OLR 39/2018 is liable to be dismissed.

¶127

In the result, I pass the following:-

¶128

ORDER

¶129

(i) OLR No.39/2018 filed by the official liquidator is hereby dismissed;

¶130

(ii) C.A.No.819/2003 is hereby allowed;

¶131

(iii) It is declared that the schedule property is not the

¶132

property of the respondent – company (in liquidation);

¶133

(iv) The respondent – official liquidator is restrained from

¶134

taking possession of the schedule property from the applicant and / or persons claiming along with / under him and also further restrained from interfering with their possession and enjoyment of the schedule property.

¶135

Sd/JUDGE

¶136

Srl.

N Narayana v. M/S. Hoysala Building Development Co. Pvt. Ltd.

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N Narayana v. M/S. Hoysala Building Development Co. Pvt. Ltd.

Case brief

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What the court decided

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