Order 1

Order Details: Notice of Motion
Pdf Text: NM 1484/2018 IN CIVIL SUIT NO.417/2017 1
CNR NO.MHCC010046472018
IN THE BOMBAY CITY CIVIL COURT FOR GREATER MUMBAI
NOTICE OF MOTION NO.1484 OF 2018
IN
CIVIL SUIT NO.417 OF 2017
Arun Dwarkaprasad Karwa .. .. Applicant
(Original Defendant No.4.)
In the matter between
Faredeal Shipping Agencies
(Mumbai),Private Limited ...Plaintiff
Versus
Kandla Energy and Chemicals Ltd.and others. ...Defendants
Mr.Amit Singh advocate for Defendant No.4.
Ms.Dikshita Gupte advocate for the Plaintiff.
Coram : Her Honour Judge
Smt. Pushpa N. Rao
Ad Hoc DistJudge
CR No. : 32
Dated : 17th July 2018
ORDER
1. Defendant No.4 taken out this motion to delete his name from
the title clause of the suit under Order 1 Rule 10(2) of the Code of Civil
Procedure.
2. Defendant N0.4 was appointed as an independent and non
executive director on 21/07/2012 and he had resigned from defendant
No.1 company on 09/05/2015, even during his tenure, he never
involved in the day to day management and operation of the defendant
No.1 company therefore, he had no connection or nexus with the
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NM 1484/2018 IN CIVIL SUIT NO.417/2017 2
alleged transaction in question. Moreover, there is no specific averment
in the plaint as to the part played by independent and non executive
direction in the transaction for foisting any liability on him. In the
absence of any such allegation liability cannot be fastened on him who
was designated as independent and non executive director. He was not
incharge and was not responsible for the conduct of the business of
defendant No.1 company. The plaint expressly deals only with
defendant No.1 to 3, despite this fact, plaintiff company unnecessarily
dragged him in the litigation and thus, it is an abuse the process of law,
therefore, his name is required to be deleted from the plaint on the
ground of misjoinder of party and prays that motion be made absolute.
3. Plaintiff filed the reply. Defendant No.1 is a private limited
company registered under the Companies Act. Defendant No.2,3 and 4
are the directors of the company. Plaintiff provided the service as per
the requirement of service of transportation of cargo from the period
29/04/2014 to 18/06/2014. Plaintiff provided the fake services on
various dates as per the pre agreed charges, the date range falls within
the period when defendant No.4 was the director of the company. The
role of independent non executive director is to bring objectivity to the
board, protect the interest of minority share holders and risk
management. Non executive directors can provide their independent
view regarding business strategy, performances, appointments,
resources and standard of conduct. Non executive directors are core of
good governance. They have a responsibility towards shareholder,
stakeholders, Corporation as a whole, relationship between corporation
and employees and relationship between the corporations and market.
Companies Act does no distinguish the liabilities of non executive
director from that of executive director therefore, defendant No.4
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NM 1484/2018 IN CIVIL SUIT NO.417/2017 3
cannot hide himself behind the veil of designation or nomenclature of a
non executive director to absolve himself from the responsibility. Suit is
filed as per the rights of the plaintiff provided under the law and does
not suffer from misjoinder of party, hence, motion be dismissed with
costs.
4. Heard learned advocate Mr.Amit Singh for Defendant No.4 and
advocate Ms.Dikshita Gupte for the Plaintiff.
5. Present suit is for recovery of Rs.8,02,445/ with interest @ 18%
p.a. against the defendant No.1 to 4. As plaintiff had provided the
service of transportation of cargo to the defendant as per their
requirement for the period 29/04/2014 to 18/06/2014.
6. Advocate Mr.Amit Singh for the defendant No.4 submit that
defendant No.4 had resigned from the defendant No.4 company on
09/05/2015, therefore, on the date of filing suit he had no connection
or nexus with the defendant No.1 company. The learned advocate
further submitted that defendant No.4 was independent and non
executive director in the company, therefore, he was no t incharge and
was not responsible for the business of defendant No.1 company and he
had no connection whatsoever with the purported transactions in the
suit. On the other hand, learned advocate Ms.Dikshita Gupte for he
plaintiff submitted that defendant No.4 was well aware of the financial
status of the company as he was closely involved with a various
company formed under the group ‘KECLSOLVENTS’ and one of the
company “Kandla Formalin Limited” belonging to group
“KECLSOLVENTS” designates Defendant No.4 as a “Whole time
Director” of the Company.
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7. Company is a juristic person and it acts through its directors who
are collectively referred as a board of directors. Whatever the decisions
are taken regarding running the affairs of the company are taken by
board of directors. At the relevant time for which plaintiff has claimed
the recovery against the defendants, defendant No.4 was connected
with the affairs of defendant No.1 company, therefore, merely his
designation was independent and non executive director does not
absolve him from the responsibility or liability towards the defendant
No.1 company, therefore, at this stage, I am of the view that defendant
No.4 is no improperly joined, hence, no question arise to delete his
name from the title clause , on the other hand, his presence is necessary
in order to enable the court effectually and completely to adjudicate
upon and settle all question involved in the suit.
8. In view of above discussion, I found no substance in the
submission of defendant No.4, hence, proceed to pass order.
ORDER
Notice of motion No.1484/2018 is dismissed with costs.
Date : 17/07/2018 (Pushpa N. Rao)
Ad Hoc Dist.Judge
Bombay City Civil Court
Greater Mumbai
Dictation Direct typed on computer: 17/07/2018
Signed by HHJ on : 17/07/2018
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”.
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
23/07/2018 at ( 11.30p.m.) Mrs. J.V.Pawar
Name of the Judge (With Court room
No.)
HHJ Smt.Pushpa N Rao
C.R.No.32
Date of Pronouncement of
JUDGMENT/ORDER
17/07/2018
JUDGMENT/ORDER signed by
P.O.on
17/07/2018
JUDGMENT/ ORDER uploaded on 23/07/2018
.
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