# WELFARE ASSOCIATION v. S.C. SEKAR AND ORS - **Citation:** [2008] 17 S.C.R. 85 - **Court:** Supreme Court of India - **Decided:** 2008-12-05 - **Case number:** Civil Appeal Nos. 7129-7130 of 2008 - **Bench:** S.B. Sinha, Cyriac Joseph - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/welfare-association-v-s-c-sekar-and-ors-24075 - **Pages:** 35 ## Headnote Contempt of Courts Act, 1971: s. 19 - Appeal against contempt - Association of shareholders of Bank - Annual c General Meetings - Non-holding of, for several ·years - Issuance of notice convening AGM, challenge. to, by Association - Interim order - Permission of holding of meeting only in respect of some items in Agenda ....:. Items in Agenda relating to election of directors adjourned - D Appointment of retired High Court Judge to hold AGM - ... Subsequently, AGM held and directors elected - Contempt Petition against Managing Director of Bank - Allegation of disobedience of interim order and that election of directors at AGM be declared null and void - Injunction order by a E different judge that resolution passed as regard election of · directors in AGM not to be implemented - Intra court appeal ~ by directors elected in AGM- Division Bench holding appeal to be maintainable - Interference· with - Held: Not called for -, - When order has been passed adverse to the interest of F alleged contemnor, appeal would be maintainable particularly where judgment has been passed by a court beyond its jurisdiction "'"'." Persons aggrieved could move the higher co&rt -Furthermore, if two views possible, contempt would not ~if! - On facts, interim order was obtained upon suppression of G facts - Association took recourse to forum shopping - They ~ were guilty of abuse of process of court, thus not entitled to equitable relief. ;. Doctrines/Principles: Doctrine of amity or comity - 85 H 86 SUPREME COURT REPORTS [2008] 17 S.C.R. A . Requires that different courts exercising separate jurisdiction pass similar orders - Even irregular order can be set aside by same court or by higher court. B Judiciary: Superior judiciary - Necessity of - Superior courts must discourage forl)m shopping. Equity: Person seeking equity must do equity - Party cannot take recourse to a machination which amounts to abuse of process of court - Administration of justice. C Tamilnad Mercantile Bank is carrying on banking business. Appellant-association are shareholders of the Bank. Its Annual General Meetings could not be held for · a number of years. 83rd Annual General Meeting of the Bank was to be held on 27th July, 2006. There were six 0 items of the agenda, item no. 1, 2 and 6 and item no.3, 4 and 5 relating to filling up of the posts of the directors. Pursuant to the injunction orCler dated 26th July 2006 passed by the High Court, meeting was held in respect of item no. 1, 2 and 6 of the Agenda and item Nos. 3, 4 and 5 were adjourned. Bank filed application seeking E directions as regards holding of 84th Annual General Meeting, claiming that 84th Annual General Meeting could not be convened unless 83rd Annual General Meeting was held as per law. By order dated 27th March 2008, Single Judge of High <;;ourt appointed Justice R. F Balasubramaniam, Judge (Retd) High Court, Madras to chair the 83rd, 84th and 85th Annual General Meetings. Single Judge of High Court, by order dated 29th April 2008, directed that Annual General meeting would be held but any resolution passed therein would not be G implemented until orders of the Court and dispute pertaining to convening of Annual General Meeting would be dealt with by this Court only. Appellant filed application · seeking injunction restraining holding of election of the Directors alone. Meanwhile Annual General Meeting was H held on 5th June, 2008 under the Chairmanship of ' .. - TAMILNAD MERCANTILE BANK SHARE HOLDERS 87 WEL. ASSO. v. S.C. SEKAR AND ORS. Justice R. Balasubramaniam. Appellant filed an intra A court appeal against the order dated 29th April, 2008 which was dismissed. Thereafter, it filed Contempt Petition against the Managing Director of the Bank, G. Narayanamurthy for alleged disobedience of order dated 26th July, 2006; and that the election of directors held at B the 83th, 84th and 85th Annual General Meeting be declared null and void. Matter came up before another Judge. He was not disclosed about the ## Text _Characters 0–39,822 of 63,201. This is a partial read: ask again with offset=39822 for what follows._ [2008] 17 S.C.R. 85 TAMILNAD MERCANTILE BANK SHARE HOLDERS A WELFARE ASSOCIATION v. S.C. SEKAR AND ORS. (Civil Appeal Nos. 7129-7130 of 2008) DECEMBER 5, 2008 B [S.B. SINHA AND CYRIAC JOSEPH, JJ.] Contempt of Courts Act, 1971: s. 19 - Appeal against contempt - Association of shareholders of Bank - Annual c General Meetings - Non-holding of, for several ·years - Issuance of notice convening AGM, challenge. to, by Association - Interim order - Permission of holding of meeting only in respect of some items in Agenda ....:. Items in Agenda relating to election of directors adjourned - D Appointment of retired High Court Judge to hold AGM - ... Subsequently, AGM held and directors elected - Contempt Petition against Managing Director of Bank - Allegation of disobedience of interim order and that election of directors at AGM be declared null and void - Injunction order by a E different judge that resolution passed as regard election of · directors in AGM not to be implemented - Intra court appeal ~ by directors elected in AGM- Division Bench holding appeal to be maintainable - Interference· with - Held: Not called for -, - When order has been passed adverse to the interest of F alleged contemnor, appeal would be maintainable particularly where judgment has been passed by a court beyond its jurisdiction "'"'." Persons aggrieved could move the higher co&rt -Furthermore, if two views possible, contempt would not ~if! - On facts, interim order was obtained upon suppression of G facts - Association took recourse to forum shopping - They ~ were guilty of abuse of process of court, thus not entitled to equitable relief. ;. Doctrines/Principles: Doctrine of amity or comity - 85 H 86 SUPREME COURT REPORTS [2008] 17 S.C.R. A . Requires that different courts exercising separate jurisdiction pass similar orders - Even irregular order can be set aside by same court or by higher court. B Judiciary: Superior judiciary - Necessity of - Superior courts must discourage forl)m shopping. Equity: Person seeking equity must do equity - Party cannot take recourse to a machination which amounts to abuse of process of court - Administration of justice. C Tamilnad Mercantile Bank is carrying on banking business. Appellant-association are shareholders of the Bank. Its Annual General Meetings could not be held for · a number of years. 83rd Annual General Meeting of the Bank was to be held on 27th July, 2006. There were six 0 items of the agenda, item no. 1, 2 and 6 and item no.3, 4 and 5 relating to filling up of the posts of the directors. Pursuant to the injunction orCler dated 26th July 2006 passed by the High Court, meeting was held in respect of item no. 1, 2 and 6 of the Agenda and item Nos. 3, 4 and 5 were adjourned. Bank filed application seeking E directions as regards holding of 84th Annual General Meeting, claiming that 84th Annual General Meeting could not be convened unless 83rd Annual General Meeting was held as per law. By order dated 27th March 2008, Single Judge of High <;;ourt appointed Justice R. F Balasubramaniam, Judge (Retd) High Court, Madras to chair the 83rd, 84th and 85th Annual General Meetings. Single Judge of High Court, by order dated 29th April 2008, directed that Annual General meeting would be held but any resolution passed therein would not be G implemented until orders of the Court and dispute pertaining to convening of Annual General Meeting would be dealt with by this Court only. Appellant filed application · seeking injunction restraining holding of election of the Directors alone. Meanwhile Annual General Meeting was H held on 5th June, 2008 under the Chairmanship of ' .. - TAMILNAD MERCANTILE BANK SHARE HOLDERS 87 WEL. ASSO. v. S.C. SEKAR AND ORS. Justice R. Balasubramaniam. Appellant filed an intra A court appeal against the order dated 29th April, 2008 which was dismissed. Thereafter, it filed Contempt Petition against the Managing Director of the Bank, G. Narayanamurthy for alleged disobedience of order dated 26th July, 2006; and that the election of directors held at B the 83th, 84th and 85th Annual General Meeting be declared null and void. Matter came up before another Judge. He was not disclosed about the previous proceedings filed from time to time. Single Judge passed an ex parte interim order and restrained G. c Narayanamurthy from implementing the resolution or item of business in relation to the election of DirectQrs passed at the Annual General Meetings held on 5th June, 2008 till the disposal of contempt petition. Respondents initiated several proceedings. 1st respondent filed 0 application impleading himself as a party and for vacating the ex-parte interim order. G. Narayanamurthy also filed an affidavit for vacation of ex-parte interim order. However, 1st respondent withdrew the said application and filed an intra ·court appeal. Shri 5.C. Sekhar, elected E in the Annual General Meeting held on 5th June, 2008 also filed an intra court appeal u/s. 19(1) of the Contempt -of Courts Act, 1971. Division Bench of the High Court held that the contempt appeals are maintainable. Hence the present appeal. Dismissing the appeals, the Court F HELD:1.1. The chain of events clearly show that although in the subsequent orders it was not expressly stated that it is in continuation of the earlier order dated G 26th July, 2006, there cannot be any doubt whatsoever that agenda item nos. 3 to 5 were allowed to be taken up in the 83rd Annual General Meeting resulting in the election of the Directors. High Court evidently appointed Justice R. Balasubramaniam to chair the meeting with a H 88 SUPREME COURT REPORTS [2008] 17 S.C.R. A view to see that elections for the years 2004-2005, 20052006 and 2006-2007. are conducted in accordance with law and in a peaceful manner. [Paras 35 and 36] [106-FH] 8 1.2. The contempt petition was filed against the Managing Director alone who had no role to play in the matter of holding of the meeting. Action of the court was not sought for against Mr. Justice R. Balasubramaniam who acted as an officer of the court. The Directors c representing the Reserve Bank of India were not made parties in the contempt petition. Full disclosure as regards the subsequent proceedings was not made therein. The contempt petition was taken up by a Judge who was not acquainted with the fact of the matter. [Paras D 36 and 37] [106 A, G, H; 108-A-B] 1.3. The submission that 1st respondent and S.C. Sekar being not a party to the contempt proceeding could not have maintained an appeal, if accepted, shall lead to "· a strange situation. Admittedly they were not parties to E the suit. They were elected during the pendency of the suit, whether legally or otherwise. The order granting injunction against the Managing Director had affected their valuable right. They were elected for a limited period. The principle of corporate democracy demands that the F Bank functions through its elected Directors. The endeavour on the part of the appellant had been to see r that old Directors may continue despite the expiry of their tenure. When, however, day to day affairs of the Bank were left at the hands of the Managing Director and the G two representatives of the Reserve Bank of India, an attempt was made to see that the newly elected Directors do not assume their office. In this attempt the appellant has succeeded so far by adopting measures which '7 amount to an abuse of the process of the Court. Appellant H did not approach the Court with clean hands, thus was not entitled to any equitable relief. It is surprising TAMILNAD MERCANTILE BANK SHARE HOLDERS 89 WEL..ASSO. v. S.C. SEKAR AND ORS. to see the manner in which interim order was passed by A Single Judge· in the contempt proceedings. [Paras 38 and 39] (108-C-~i 109-B-C] Udyami ·Evam Khadi Gramodyog Welfare Sanstha vs. State of Uttar Pradesh 2008 (1) S.C.C. 560, relied on. B V.R. Dalal and Ors. v. Yougendra Naranji Thakkar and Anr. 2008 (8) SCALE 156, referred to. -( 1.4. The suit related to 83rd Annual General Meeting. The contempt application related to election of Directors c of the Bank at the 83rd, 84th and 85th Annual General ~ _ Meetings. Although the sub-application was directed to be posted for 23rd July, 2008.the order of injunction was not limited to that date. It was directed to· continue till disposal of the contempt application; though it was D stated earlier that the ad interim injun~tion was. tilt 21.7.2008. It does not contain any reason. There is no x finding as regards existence of a prima facie case .. There ~ is no finding that G: Narayanm_oorthy had pr~ma facie <; committed the contempt. The order is _not a speaking one. Ordinarily a direction cannot be issued in contempt E proceedings without arriving at a finding as to how the ...,.., Managing Director of the Bank can be said to have , . flouted the order. [Para 40] (109-A-B; G-H] Municipal Corpn., Jabalpur v. Om Prakash Dubey 2007 F 1 (1) sec 373, held applicable. 1.5. In view of the interim order dated 20th June, 2008 ' respondents were prejudiced. They were, thus, 'persons ~ • aggrieved'. As persons aggrieved they could move the G higher court. If an interim order was passed wholly -4 '( without jurisdiction, an appeal would lie thereagainst. [Para 41] [110-G] 1.6. Th~re cannot be any doubt that in a situation H 90 SUPREME COURT REPORTS [2008] 17 S.C.R. A where order has been passed adverse to the interest of the alleged contemnor an appeal would be maintainable particularly where a judgment has been passed by a court which is beyond its jurisdiction. [Para 44] [112-A-B] B Purshotam Dass Goel v. B.S. Dhillon 1978 (2) SCC 370; Dharam Singh v. Gulzari Lal & Ors SLP (Civil) No. 18852 of 2005; R.N. Dey v. Bhagyabati Pramanik 2000 (4) SCC 400; D.N. Taneja v. Bhajan Lal 1988 (3) SCC 26; Ashoke Kumar Rai v. Ashoke Arora and Anr. 96 CWN 278 Ashis Chakraborty C and others v. Hindustan Lever Sramik Karamchari Congress and others 96 CWN 673 and Midnapore Peoples' Coop. Bank Ltd. v. Chunilal Nanda 2006 (5) SCC 399, referred to. 1.7. Ass.uming that an appeal uls. 19 was technically not maintainable, having regard to the fact tnat the interim D injunction was granted till disposal of the contempt application, it was a judgment within the meaning of Clause 15 of the Lette{s Patent of the Madras High Court. However, it would be proceeded on the assumption that no appeal was maintainable. An aggrieved person cannot E be left without a remedy. Access to justice is a human right. In certain situations it may also be considered to be a fundamental right. [Paras 50 and 51] [116-8-D] Tashi Delek Gaming Solutions Ltd. v. State of Karnataka 2006 (1) SCC 442 and Arunima Baruah v. Union of India F 2007 (6) sec 120, relied on. 1.8. The order of the High Court speak in two voices. Doctrine of amity or comity requires that different courts exercising separate jurisdiction pass similar orders. Even G an irregular order can be set aside by the same court or b,y a higher court. [Para 53] [116-117-F-A] Isaacs v. Robertson 1984 (3) All. E.R. 140, referred to. H The ~aw of Injunctions by Lewis & Spelling's p 10, TAMILNAD MERCANTILE BANK SHARE HOLDERS 91 WEL. ASSO. v. S.C. SEKAR AND ORS. referred to. A 1.9. If this Court while deciding a matter of this nature may, in exercise of its special jurisdiction under Article 142 of the Constitution of India, not only quash the order ~ appealed against but also in the event it is found that quashing of an illegal order gives rise to another illegality, B it may also refuse to exercise its jurisdiction or quash '~ both the orders. Apart from the fact that the order passed by the Single Judge dated 20th June, 2008 is found to be illegal, and without jurisdiction having been passed c without any application of mind and furthermore as the same was obtained by the appellant by suppressing material facts and the proceedings between the parties, it is eminently a fit case where this Court should refuse to interfere with the impugned order of ~he High Court. D [Para 54) [118-0-F] ;. 1.10. The superior courts of this country must discourage the forum shopping. A person seeking equity must do equity. A party cannot take recourse to a machination which amounts to abuse of the process of E the court. [Para 55) [118-G] 1.11. If two views are possible, a contempt petition would not lie. Furthermore this Court does not exercise its jurisdiction only because it is lawful to do so. Thus, it F y is not a fit case wherein jurisdiction under Article 136 of ,. the Constitution of India should be exercised. [Paras 56, 57 and 58] [119-E-F] Sushi/a Raje Holkar v. Anil Kak (Retd.) 2008 (7) SCALE 484; The State of Bihar v. Rani Sonabati Kumari AIR 1961 'G ¥ SC 221; Tanna and Modi v C.I. T. Mum,bai XXV 2007 (8) SCALE S'1; C.K. Prahalad and others. v State of '-- meeting was held on 27th July, 2006. However, three items of Agenda, being item Nos. 3, 4 and 5 stood adjourned. Indisputably the said items of the Agenda read as under:- E "3. To appoint a director in the place of Thiru P.H. Arvindh Pandian who retires by rotation and being eligible offers himself for reappointment. 4. To appoint a director in the place of Thiru A. F Rajagopalan who retires by rotation .. 5. To appoint a director in the. place of Thiru P. Prem Vetty who retires by rotation." 7. Standard Chartered Bank, Mumbai, acting as an agent G of some of their clients/investors filed applications for transfer ~ of 95,418 (Ninety five thousand four hundred and eighteen} shares. A letter dated 30th March, 2007 issued by the Reserve "" Bank of India relating thereto was also placed-in the meeting. A Resolution was passed by the Board of Directors on 13th H e 96 SUPREME COURT REPORTS [2008] 17 S.C.R. A May, 2007 resolving to transfer the said shares. 8. In the meantime 85th Annual General Meeting also fell due. 9. The Bank filed OA No.23 of 2007 seeking suitable B directions as regards holding of the 84th Annual General Meeting. It was inter alia averred that 84th Annual General Meeting cannot be convened unless the 83rd Annual General Meeting is held in accordance with law . . c Referring to Sections 166 and 210 of the Companies Act it was contended that 84th Annual General Meeting of the Bank for the year 2006 should have been held on or before 20th September, 2006. The application (OA No.23 /2007) came up for ·o consideration before a learned Single of the High Court and by an order dated 27th March, 2008, it was directed :- "1. That the Hon'ble Mr. Justice R. Balasubramaniam, ..._ Judge (Retd) High Court, Madras residing at E No.157/17, Greenways Road, Chennai-600 028 be and is hereby appointed to chair the 83rd, 84th and 85th Annual General Meetings of Tamilnad Merchantile Bank Ltd., Tuticorin. F 2. That the time for convening 83rd, 84th and 85th Annual General meeting shall stand extended upto 6th June, 2008." · 10. ,In the meantime another suit, marked as C.S. No. 481 of 2008 was filed by the appellant questioning the transfer of G aforementioned shares. One of the reliefs prayed for therein reads as under:- H "granting permanent injunction restraining the 1 Oth-31 st " Defendants, their men, agents, servants and the nominees from exercising any right as a shareholders of the 2nd ,, ... TAMILNAD MERCANTILE BANK SHARE HOLDERS WEL. 97 ASSO. v. S.C. SEKAR AND ORS. [S.B. SINHA, J.) Defendant in relation to the abovesaid shares." A 11. The question as to whether the said meeting could be postponed or not came up for consideration before the learned Single Judge on 29th April, 2008, when it was directed:- "2. In the meantime, it is submitted that the Annual General '8 Meeting is scheduled to be held on 5.6.2008. Taking into account the past history of the litigation, I do not propose ~ to stall the meeting. Therefore, the Annual General Meeting shall go on. However, any resolution passed in the Annual c General Meeting shall not be implemented until further orders of this Court. 3,_ Registry is directed to list the applications alongwith C.S. No.981 of 2004 on 9.6.2008 immediately after motion list. 4. It is made clear that any matter relating to the dispute D pertaining to the convening of the Annual General Meeting of the Bank, shall be dealt with only by this Court and not by ay other court. The applicants shall take private notice to all the other respondents returnable by 9.6.2008" E 12. Indisputably a meeting was held under the Chairmanship of Justice R. Balasubramaniam on 5th June, 2008. Theretobefore, he met all the shareholders who desired to make representations on the mode and manner for conducting the Annual General Meeting on 1st June, 2008. F ) Appellant did not submit any petition on that date. It did so, however, at a later stage. 13. Appellant filed an 0.A. No.621 of 2008 in C.S. No. 481 of 2008 seeking for an order of injunction restraining holding G of election of the Directors alone. The matter was placed before the Court on 3rd June, 2008 when an adjournment was taken and the application was posted for 9th June, 2008. In the meantime Annual General Meeting was held on 5th June, 2008. 14. Appellant preferred an intra court appeal against the H 98 - SUPREME COURT REPORTS [2008] 17 S.C.R. A order dated 29th April, 2008. The Division B.ench while . observing that the order dated 29th f".\pril, 2009 sufficiently protected the interest of the appellant, dismissed the same. 15. Some other proceedings were also initiated with which 8 we are not concerned. 16. On or about 10th June, 2008 Contempt Petition, being C.P. No.508 of 2008 was filed. Managing Director of the Bank, Shri G. Narayanamurthy, was alone made a party-contemnor. The petition was filed for afleged disobedience of the order of C the learned Single Judge dated 26th July, 2006 passed in O.A. No. 597 to 599 of 2006. In the said petition the following prayer was made:- "to punish the respondent for the disobeying the orders of 0 this Hon'ble Court dated 26.7.2006 in O.A. No. 597 to 599 of 2006 in C.S. No.981 of 2004." An interim injunction was also prayed for therein, which reads as under:- E "to declare the election of directors held at the 83rd, 84th and 85th Annual General Meeting as null and void as the same is contrary to the orders of this Hon'ble Court dated 26th July, 2006 in O.A. No.597 of 2005 in C.S. No.981 of 2004" F 17. The contempt matter came up before another learned Single Judge of the High Court. As would be noticed hereinafter no disclosure was made in the said proceeding as regards the orders passed by the learned Single Judge in the applications filed from time to time as also other proceedings taken by the G p_arties. However, the learned Single Judge passed an ad interim ex parte injunction on 12th ·June, 2008 restraining the Managing Director of the.Company Shri G. Narayanamurthy from implementing the resolution or item of business in relation to the election of Directors passed at the Annual General .H Meetings held on 5th June, 2008 till the disposal of contempt f . TAMILNAD MERCANTILE BANK SHARE HOLDERS WEL. 99 ASSO. v. S.C. SEKAR AND ORS. [S.B. SINHA, J.] petition. The matter was directed to be posted on 21st July, A J 2008. 18. What is the nature of that order would be considered a little later as there exists a dispute as to whether such an order can be said to be a final order satisfying the definition of a 8 'judgment' or·not. 19. Several proceedings were initiated by the respondents herein. On or about 24th June, 2008, the 1st respondent Shri T. Rajakumar filed an application in Civil Appeal arising out of SLP (C) No. 19379 of 2008 for impleading himself as a party C and for vacating the ex-parte interim order dated 12th June, 2008 passed in the said contempt proceedings before the learned Single Judge. Shri G. Narayanamurthy, Managing Director of the Bank, also filed an affidavit praying for vacation of ex-parte interim order. On or about 26th June, 2008, Judges D Summons in terms of Order XIV Rule 8 of the Original Side Rules of the High Court were also taken out by him for vacating the ex-parte ad interim order dated 20th June, 2008. 20. It is stated that the matter was fixed for hearing on 21st E July, 2008. 21. However, Shri T. Rajakumar withdrew the said application and preferred an intra court appeal. Shri S.C. Sekhar, who is also said to have been elected in the said Annual General Meetings dated 5th June, 2008 also preferred F , '1' an intra court appeal. Both the appeals were preferred under Section 19( 1) of the Contempt of Courts Act, 1971. A question as regards maintainability of said appeal was raised. G A Division Bench of the High Court by reason of the impugned order answered' the same in the affirmative, stating:- " We have gone -through the said provision. Prima facie we are of the considered view that only when some orders H 100 A B c D SUPREME COURT REPORTS [2008) 17 S.C.R. adversely affecting any person, who makes a claim that he is intending to prefer ·an appeal, this court in exercise of the power under the provisions to sub section (3) of Section 19 of the CC Act, 1971 may suspend such an order. We have found that the contempt appellants are the persons aggrieved by the order of the learned Single Judge of this court and this court has only on prima facie consideration held that the contempt appeals are maintainable and the rights of the respondents to canvas their arguments either in the contempt petition or in the contempt appeals are still open. We therefore find that the order holding that the contempt appeals are maintainable does not in any way adversely affect the right of the second respondent. Accordingly, the submission made by the Id. Counsel for the second respondent is not acceptable and the permission sought for is consequently rejected." It is this order which is in question before us. 22. At the outset, we may place on record that in the meantime in the O.As. filed in C.S: 481 of 2006, E Ramasubramanian, J., passed an order on 23rd June, 2008, wherein it has been noticed:- F G H "8. Today, when the applications were taken up for hearing, Mr. V. Ramakrishnan, learned counsel for the plaintiffs, fairly .submitted that without ~is knowledge and without the knowledge of the learned Senior Counsel leading him in the matter, the plaintiffs moved a Contempt Petition in Contempt Petition No. 508 of 2006. In the said Contempt Petition, it appears that notice was ordered to the 'Managing Directors on 20.6.2008. Pending Contempt Petition, an interim order of injunction has also been passed in Sub Application No.163 of 2008, on 20.6.2008, re'straining the Managing Director from implementing the resolution or item of business relation to the Election of the Directors of the Bank at the 83rd, 84th and 85th Annual General Meetings, held on 5.6.2008 .. Mr. V. r , TAMILNAD MERCANTILE BANK SHARE HOLDERS WEL. 101 ASSO. v. S.C. SEKAR AND ORS. (S.B. SINHA, J.] Ramakrishnan, lea med counsel appearing for the plaintiffs A himself produced a copy of the interim order passed in the Sub Application in the Contempt Petition and submitted that this has happened behind his back and he felt embarrassed and very sorry about it. Therefore the learned counsel wanted to withdraw his appearance, since he did B not wish to appear for such a party any more." 23. Despite the same the teamed Judge refused to adjourn the matter stating :- "Under normal circumstances, I would have simply c adjourned the mater to another date, to enable the plaintiffs to engage a different counsel to make submission. But my attention was dawn to the fact that Mr. R. Mathuselvam, President of the first plaintiff Association, who has verified the pleadings, is present in Court. Therefore, I questioned D him, as to the circumstances under which a Contempt Petition was moved, contrary to the statement made at the Bar on 16.6.2008. He submitted that the Contempt Petition was moved, on the basis that the convening of the Annual General Meeting was in violation of the order passed on E 26.7.2006, in O.A. Nos. 597, 598 and 599 of 2006 in C.S. No. 981 of 2004." 24. Taking notice of the earlier order of the court dated 26th July, 2006 in terms whereof the erstwhile Directors wer~ F directed to continue in the office and to maintain status quo until " further orders of the court and furthermore taking notice of the fact that in the meantime Annual General Meetings had already been held wherein resolution had been passed electing the Directors and that the appellants having failed to obtain any interim order either in the present suit or in the previous suit G C.S. No.981 of 2004 and after having allowed the meetings to < go on, the first plaintiff has adopted a dubious method of moving a Contempt Petition and getting an interim order of injunction on 20.6.2008 contrary to the statement made across the Bar on 16.6.2008 amounted to an abuse of the process of the H 1: ;~ 102 SUPREME COURT REPORTS [2008] 17 S.C.R. A Court, observed:-· ·~ "The interim injunction which the first plaintiff has now obtained on 20.6.2008 in the Contempt Petition is the very _, same injunction which the plaintiffs have prayed for in the B present suit and failed to get. Their attempt to get a similar injunction before the Division Bench and the Surpeme Court have also failed. It appears from the answer given by Mr. P. Muthuslevam that all these orders were not brought to the notice of the learned Judge hearing the c Contempt Petition was suppressed before this Court. Thus the first plaintiff has clearly taken both the Courts for a ride. s·uch a person is not entitled to the equitable relief of injunction. · 14. The plaintiffs are guilty of abuse of the process of law D and guilty of Forum Shopping. After having failed to obtain an. interim order of the very same nature from this Court ana after trying their luck before the Division Bench and the Supreme Court, they had gone be.fore the other Court ~ and obtained an interim order in a Contempt Petition. In E the Contempt Petition, the first plaintiff herein does not appear to have mentioned anything about the new suit C.S. No. 481 of 2008 and the orders passed in the injunction applications. Thus the ~irst plaintiff is also guilty of suppression of material fa;ts: Under such circumstances, F I have. n_o __ alternative, xcept to dismiss all these . . applications for injunction. Hence O.A. Nos. 534, 536 and r 621 are dismissed .. " 25. It was, however, made clear that the same arrangement, as was directeli to be maintained by the court G prior to 5th June, 2008 shall continue till the sub-application in the contempt petition is disposed of. 26. Indisputably intra court appeals were preferred ) thereagainst by the appellant which were marked as O.S.A. H Nos. 274 to 277 of 2008. < TAMILNAD MERCANTILE BANK SHARE HOLDERS WEL. 103 ASSO. v. S.C. SEKAR AND ORS. [S.B. SINHA, J.J By an order dated 4th September, 2008, Prabha Sridevan, A J. speaking for the Division Bench dismissed the appeals upon noticing the proceedings taken by the appellant, stating:- "The facts extracted above would show that the appellants have with impunity been filing applications after B applications for almost the same relief, though in each, the prayer is somewhat differently worded, in order to disguise it as a different prayer. More than one suit has been filed in this Court and we are given to understand, in Courts elsewhere. The appellants have not made out a prima facie case for grant of injunction. More than that, the conduct of C the appellants, the suppression of facts and the devious methods adopted by them leave us without any doubt that the appellants are not entitled to the grant of injunction. To grant an order of injunction merely because only one of the appellants had moved the contempt petition and not the D other and therefore, the other appellant was entitled to a fair hearing is something that deserves to be rejected. In fact, it may not be by chance but by design that only one of the appellants chose to file the contempt petition and therefore, to grant any indulgence on this score would be E indirectly rewarding the persons who have come to court with unclean hands. In the result, · we hold that on the ground of prima facie case and on grounds of equity, the appellants are not entitled to injunction and therefore, the dismissal of the applications by the learned single Judge F deserves to be confirmed." . 27. Mr. T.R. Andhyarujina, learned senior counsel appearing on behalf of the appellant has raised the following three principal contentions before us. (i) An appeal under Section 19( 1) of the Contempt of Courts Act, 1977 was not maintainable against an ·ad interim order of injunction. G (ii) The ad interim order of injunction dated 20th June, H 104 SUPREME COURT REPORTS [2008) 17 S.C.R. A 2008 does not satisfy the test of a 'judgmenf as has been held by this Court in Shah Babula/ Khimji v. Jayaben D. Kania, [ (1981) 4 sec 8] and thus the _, Division Bench even could not have entertained an intra court appeal. B (iii) One of the respondents T. Rajakumar as also G. Narayanamurthy, Managing Director of the Bank having filed applications for vacation of the order dated 20th June, 2008 could have waited for the c outcome thereof and intra court appeals preferred by respondents amounted to an abuse of the process of the court. 28. Mr. C.A. Sundaram, Mr. Dushsyant Dave and Mr. L.N. Rao, learned senior counsel appearing on behalf of S/Shri D S.C. Sekar, T. Rajkumar and G. Narayanamurthy, on the other hand, contended:- (i) As an interim order of injunction was obtained upon ~- suppression of facts and as even the applications E for vacating the stay was not being taken up for hearing immediately, an intra court appeal was maintainable both under Section 19( 1) of the Contempt of Courts Act, 1977 as also under Clause 15 of the Letters Patent of the Madras High Court. F (ii) In view of the observations made by the learned Single Judge also the Division Bench of the High r Court in the main proceedings, this Court should not interfere with the impugned judgment as the appellant had taken recourse to Forum Shopping. G (iii) A direction can be issued by a contempt court only in three situations, namely - > a) to stop continuance of disobedience of the orders of the court ; ,_ H _J ~- I • ' -,, - ' "' ' { -"': TAMILNAD MERCANTILE BANK SHARE HOLDERS WEL. 105 ASSO. v. S.C. SEKAR AND ORS. [S.B. SINHA, J.] b) some order to maintain status quo; and A c) an order by way of restitution after arriving at a finding that the alleged contemnor is guilty of contempt. (iv) In any event, the appellant being guilty of the abuse B of the process of the court, is not entitled to any equitable relief. 29. Appellant is an Association of shareholders of the Bank. The first suit filed by it involved the question as to whether C the power of attorneys executed by the share-holders were required to be registered or not. The suit was filed at a point of time when 83rd Annual General Meeting of the Bank was to be held. In view of the D orders of injunction passed by the learned Single of the Madras · High Court, admittedly the Annual General Meeting could not be held. It is now not in dispute that in terms of the order dated 26th July, 2006 the Annual General Meeting was permitted to be held in respect of Item Nos. 1, 2 and 6 of the agenda. Item Nos. 3 to 5 of the agenda related to filling up of the posts of E Directors caused as the Directors were to vacate their office. 30. Indisputably the Annual General Meetings could not be held continuously for three years for one reason or the other. Pursuant to the order of the learned Single Judge dated F 26th July, 2006, 83rd Annual General Meeting was held in respect of item Nos. 1, 2 and 6 and the same was adjourned in respect of agenda items i.e. Nos. 3 to 5. 31. Indisputably when an adjourned meeting was to be G conducted, it must be for the adjourned agenda, i.e., item Nos. 3 to 5. Appellant knew thereabout. It not only filed an application for injunction but also raised objections before the Chairman appointed by the Court in terms of the order dated 27th March, 2008. Reports of the Chairman show that H e 106 SUPREME COURT REPORTS · [2008] 17 S;C.R A consultative process had been taken recourse to. \ 32. Appellant had participated in the election. The three . reports submitted by the Chairman in sealed covers were read v over and opened by the learned Judge, copies whereof were '\ B also handed over to the parties. It is in that situation a limited order of injunction, namely that no effect to the said Resolution ~ be given, was passed on 29th April, 2008. 33. Although at one point of time contentions had been )•/ raised before us that election had not been held as the c adjourned agenda items were not taken up or even could not have been taken up in 83rd Annual General Meeting as it was held simultaneously with 84th and 85th Annual General Meetings, it is now clear from the records that election of the Directors had in fact been held. D 34. Appellant sought for an injunction. It moved an application before the Vacation Bench but the same was ·not -4. pressed. However, before the matter could be taken up for hearing on -9th June, 2008 a petition for initiation of E proceedings for contempt of court for alleged disobedience of .f the order of the learned Single Judge dated 26th July, 2006 was .... filed. ·~ i 35. The chain of events noticed by us heretobefore clearly show that although in the subsequent orders it was not expressly F stated that it is in continuation of the earlier order dated 26th ,-;:, July, 2006, there cannot be any doubt whatsoever that agenda item nos. 3 to 5 were allowed to be taken up in the 83rd Annual General Meeting resulting in the election of the Directors. G 36. The High Court evidently appointed Mr.