w w w . L a w y e r S e r v i c e s . i n



Manoj Kumar Sonthalia v/s Vivek Goenka and Others


    O.S.Appeal Nos.82 to 88 of 1993 and C.M.P. Nos.2347 of 1995 and 2790 of 1995 in O.S.A. No.84 of 1993

    Decided On, 09 March 1995

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE MISHRA & THE HONOURABLE MR. JUSTICE S.M. ALI MOHAMED

    Arvind P.Datar, for Appellant in all the Appeals and for Petitioner in C.M.P. No.2347 of 1995. Arun Jetley, Senior Advocate, for S.Srinivasaraghavan, for Respondents Nos. 1 and 2 in O.S.A. Nos.84 to 88 of 1993 and C.M.P. No.2347 of 1995. G.Vasantha Pai, for S.V.Jayaraman and R.Venkataraman, for Respondent No.6 in O.S.A. Nos.84 to 88 of 1993 and in C.M.P. No.2347 of 1995. Ram Jethmalani, Senior Advocate, for Yasodh Varadan for Respondent No.7 in O.S.A. Nos.84 to 88 of 1993 and C.M.P. No.2347 of 1995. K.J. Palpandian, for Respondent No.8 in O.S.A. Nos.84 to 88 of 1993 and C.M.P. No.2347 of 1995. Mrs.Indira Jayasingh, Senior Advocate for Respondent No.9 in O.S.A. Nos.84 to 88 of 1993 and C.M.P. No.2347 of 1995 Chandra, for Mrs.Veena Devi Sonthalia on summons. S.Gopalaratnam, Senior Advocate as Amicus Curiae. Prasant Bhushan. Senior Advocate for M/s. Row & Reddy, for impleaded Respondent No.15 in O.S.A. Nos.84 to 88 of 1993 and C.M.P. No.2347 of 1995.



Judgment Text

Mishra, J.


The appellant in O.S.A.Nos.82 to 88 of 1993 has moved the petition, seeking inter alia to modify our order and judgment dated 27.7.1994 in the said appeals in terms of the compromise memorandum in C.S. Nos.1246 and 1247 of 1992 and Petitions to implead Sterling Newspaper Limited, Bharatkatha Publications Private Limited and Bharatkatha Offset Private Limited as defendants in C.S. No.1246 of 1992, to pass an order to transfer the suit C.S. Nos. 1246 and 1247 of 1992 from the file of the Original Side to the file of the Appellate Side for the purpose of recording the compromise. The last prayer, which is also covered by separate petitions filed on behalf of the appellant in the suits is wholly uncalled for and should not have been made at all. The prayer to implead Sterling Newspaper Limited, Bharatkatha Publications Private Limited and Bharakatha Offset Private Limited as defendants 15 to 17 in the suits is also not warranted. We have however to see in the instant proceeding, whether the judgment in O.S.A. Nos.82 to 88 of 1993 by us, needs any modification and can, in the circumstances of the case, the compromise be recorded in the appeals, so that the suits C.S. Nos. 1246 ands 1247 of 1992, are disposed of in terms of the compromise between the plaintiff, on the one hand, and the defendant/ defendants who is are parties to the compromise, on the other hand.


2. All the seven appeals which have been disposed of by us under a common judgment dated 27.7.1994, had arisen out of a common order at the interlocutory stage for temporary injunction. The plaintiff/ appellant and the 6th respondent/ defendant viz. Manoj Kumar Sonthalia and Vivek Goenka are the grandsons of late Sri Ramnath Goneka (hereinafter referred to ?RNG?). Manoj Kumar Sonthalia is the son of Radha Devi Sonthalia, daughter of RNG and Anil Kumar Sonthalia is his brother (described in the plaint as mentally retarded). Vivek Goenka is the son of another daughter of RNG. Smt.Krishna Khaitan. The other parties in the suits as well as the appeals include as the 1st defendant/ respondent, a private limited company, Nariman Point Building Services and Trading Private Limited, Bombay, and as other defendants, the Indian Express Newspapers (Bombay) Limited, Bombay for all purposes a subsidiary of the 1st defendant/ respondent Indian Express (Madurai) Limited, for all purposes, a subsidiary of the Indian Express Newspapers (Bombay) Limited and other Companies, including Andhra Prabha Limited and individuals, viz., Nusli N.Wadia, Sri Krishna Moolgaonkar, Venu Srinivasan, T.Dulip Singh, K.R.Ramamani. R.A. Shah and others.


3. The common case of the parties before us in the appeals, it is so said in the Judgment, has been that Nariman Point Building Services and Trading Private Ltd.. (hereinafter referred to as the 1st defendant/ respondent) functioning as the Apex Company of the Indian Express group of Newspapers directly and in directly controlled all the newspaper companies. According to the plaintiff/ appellant RNG was virtually the sole Proprietor of the 1st defendant/ respondent and controlled all publications of the Group. His only son, however, died in 1979. In the year 1980, he indicated that the Group would be split into two (one) Newspaper Companies group and the other, Properties group. The properties group was given to the charge of the family of the deceased son of RNG and the Newspapers Companies group was retained under his control. He. according to the plaintiff, accordingly retained the control of the Newspaper Companies in such a manner that he held 99.68% of the shares of the Apex Company i.e. 1st defendant/ respondent and divided the remaining 0.32% equally between his two daughters. In 1985, he inducted two of his grandsons, the plaintiff and the 6th defendant into the Newspaper business and gave charge of the Western region to the 6th defendant/ respondent and charge over the South Indian Papers to the plaintiff/ appellant, to which he later added the charge of Delhi and Chandigarh publications. The facts in this behalf as noticed by us in the judgment, are as follow.?:


"Out of his shares in the 1st defendant Company, RNG transferred 75.56% and gave 50.40% to the 6th defendant (Vivek) and 24.95% to the plaintiff (Manoj) and retained 24.32% out of the original 99.68% to himself.....In September, 1989, to be precise, on 28.9.1989, RNG transferred the balance shares he held, i.e., 24.32% of the 1st defendant company in the joint names of Vivek (6th defendant) and Manoj (Plaintiff)- It is said for the benefit of Anil Kumar, the mentally retarded brother of the plaintiff. The shares were divided in two parts of 12.16% in the first part, Vivek was made the first joint shareholder and in the second, Manoj (plaintiff) was made the first joint shareholder. He (RNG), according to the plaintiff, with the idea of bringing the rights and the role of his grand children, through the two daughter, on 10.2.1990 transferred the entire 8,000 Preference shares held by him in the 1st defendant/ respondent company equally to the plaintiff and the 6th respondent. There was a meeting of the Board of Directors of 1st defendant on 26.9.1990, the proceedings of which meeting have come up before us in the course of the instant proceedings, wherein, it is said that RNG made some statement about his succession plan and following which statement and decision taken, at the said Board meeting, certain amendments had been carried out to the Articles of Association of the Company, but, according to the plaintiff, on 26.9.1990 itself, he and the 6th defendant were informed by the 7th defendant that RNG wanted both the grandsons to sign blank transfer forms in respect of their shares. The plaintiff honoured the demand of the 7th defendant, who claimed to convey to him the desire of RNG and sent signed blank transfer forms of the share certificates as well as the share certificates on 12.11.1990 to the 7th defendant. It is said that the meeting of the Board of Directors of the 1st defendant passed two resolutions: (1) for the appointment of Directors/ Additional Directors, and (2) for the transfer of the shares of the plaintiff to RNG. According to the plaintiff, as on the said date, the Board of Directors of the 1st defendant- company consisted of RNG as the Chairman, the plaintiff and the 6th defendant and the mother of the plaintiff. Only RNG and the 6th defendant were present at the said meeting, the plaintiff was not even informed of the meeting, having been convened and that vital decisions were going to be taken at that meeting. The alleged transfer of the shares of the plaintiff to RNG at the Board meeting dated 5.1.1991 or about the appointment of new Directors were not made known to the plaintiff until the first clash of interest was noticed at a meeting of the Board of Directors of the 1st defendant on 16.3.1991. The details, however, are not necessary. The dispute aggravated, however, on the death of RNG and the plaintiff filed two suits for reliefs, inter alia, to declare as invalid the Board meeting dated 5.1.1991 and to restore the parity and position of the plaintiff and that of the 6th defendant in the 1st defendant- company and consequently, to protect their position in the capacity either of the Managing Director/ Joint Managing Director/ Executive Director or Director of the subsidiary companies. The plaintiff also asked for injunction and moved petitions for temporary injunction and for other allied/ incidental reliefs."


4. The trial court declined to grant any interim order and held against the plaintiff that he had not made out a prima facie case for the grant of injunction or direction and that the balance of convenience was in keeping the corporate freedom in tact without there being any interference by court in the formation either of the 1st defendant- company or any of its subsidiary companies.


5. After hearing learned counsel for the parties, we held in the appeals, as follows: "This rule of the notice of the meeting, where a certain business of the company or society is prescribed has found expression in several judgments of the Supreme Court, one such judgment being the case in C.D. ?Allawadi v. Union of India, A.I.R. 1990 S.C. 103?.... The Supreme Court has held that for the presence of the Directors.... when a meeting is called, it should be always preceded by a valid notice. The respondents herein have brought on record of the proceedings information as to the sending of the notice in a container and also that by that process, notices sent for urgent meetings in the past, were duly acknowledged by the plaintiff and he either participated in the meeting or conveyed his views over telephone or otherwise to persons concerned. We are conscious however that we are dealing with a case at the interlocutory stage and we must not enter into such controversies, which should finally be solved by the final judgment of the court on the issues of fact and law. We are required at this stage only to see whether the plaintiff has made out a prima facie case in this behalf... It is difficult on the fact of the instant case to accept that the plaintiff is right in asserting that the 7th defendant acted independently and he alone managed in the name of RNG, that the plaintiff sent equity share certificates as well as duly signed transfer deeds to the 7th defendant and that he misrepresented to him. However, the plaintiff sent these documents to the 7th defendant. Was the 7th defendant, in the act of transfer of shares of the plaintiff to RNG only a messenger of the plaintiff, or an agent of RNG, or, he acted as one, in the process of the said transaction between the plaintiff, on the one hand, and RNG, on the other hand, as an agent of RNG, are questions, which can be answered only when parties enter into evidence. So long as the transaction of the transfer was not complete, the 7th defendant held a property, which belonged to the plaintiff. We have tried to find out, with the help of learned counsel for the parties, whether there is any material to show that the 7th defendant was an agent of RNG and thus delivery of the share certificates and transfer forms to him, amounted to delivery to RNG. We wanted also to know, was there any instructions, if 7th defendant was not an agent of RNG, by the plaintiff to him, to deliver the share certificates and the transfer forms to RNG. In the absence of any answer to the above, the real predicament cannot be resolved. This will depend upon the evidence and at this stage to accept the case of one or the other party, will not be proper. The legal presumption, however, is that the 7th defendant was a trustee, who held in trust the documents that the plaintiff sent to him and the plaintiff continued to be the holder of the shares until they were validly transferred to RNG....

It is nobody?s case and no one can contend to that extent that the plaintiff was not a shareholder of the 1st defendant- Company before 15.1.1991 and that his mother is not a shareholder of the 1st defendant- Company at the relevant time there were only four shareholders constituting the company and all the four belonged to the family of RNG. They held the business for the benefit of the family only. All the characteristic of a partnership are noticeable in such a company and all incidence of a partnership should be attached to it.......!


After taking into account all the relevant circumstances, we have finally ordered in the appeals, as follows:


"Thus, it will not, in our view, be a correct view to issue any direction or injunction to make the alleged resolution dated 5.1.1991 inoperative on all counts. It will cause no injury however to the interests of any of the defendants, if the follow up of the resolution of the Board of Directors of the 1st defendant at its meeting dated 5.1.1991, as respect the transfer of shares of the plaintiff to RNG is stopped and the defendants are restrained from transferring to any other person including to themselves the shares that the plaintiff admittedly held before the alleged transfer to RNG on 2.1.1991. The effect of what we have said above, however, is not that the said shares revive in the hands of the plaintiffs. They will remain freezed or dormant for the period of the suit and shall be appropriated in accordance with law, after the disposal of the suit. The plaintiff, who, according to us, has made out a fair case for trial on the question of the validity of the proceedings of the Board meeting of the 1st defendant dated 5.1.1991 and that of the Extraordinary General Body Meeting of the 1st defendant company on 23.1.1991, however, shall have no stakes in his hands and that may provide to the defendants opportunity to slicing him further than what has been alleged to have been done to him already and that may be another injury to the plaintiff, which we think the court in its discretion must protect. The plaintiff has, at present, the position of a Direction in the 1st defendant- Company, the Executive Director in the 2nd defendant- Company, and the Joint Managing Director in the third defendant- Company. We are persuaded on the facts and in the circumstances of the case to order that his position, as such, should not be disturbed and there should be no interference by any other executives of any of the defendant - Companies in the functioning of the plaintiff in the aforesaid capacities. The Board of Directors of the 1st defendant- Company and that of other Companies, however, will have to ensure that conflicting interests of the plaintiff, on the one hand, and the 6th defendant, on the other hand, do not create any hindranee in the functioning of the 1st defendant- Company and its subsidiaries and business, including standard of the daily newspapers. The court, in such a situation, will be required to ensure that the 6th defendant keeps himself within the limitations that are prescribed for the office held by him as well as determined by the Board of Directors of the 1st defendant- Company and the plaintiff- appellant is similarly kept within the confines of the powers which he may enjoy in the afore mentioned capacities in the aforementioned three defendant- Companies. Inspite of our observations that the plaintiff/ appellant has made out a prima facie case in respect of the meeting of the Board of Directors of the 1st defendant-Company, we have not interfered with the new Directors and their presence in the Board of the said Company and, as the plaintiff has himself acknowledged, the presence of the new Directors in the other companies of the group and they will continue:o function in the capacity of Directors of the Companies concerned, we think it desirable to give a direction to the Board of Directors of the 1st defendant- Company as well as the Board of Directors of the subsidiary companies, to decide in presence of the 6th defendant- respondent and the plaintiff- appellant the area of the rights and privileges for each of them and make then to work accordingly. While doing so, the Board of Directors shall, however, not deny to the plain:iff what has already been assigned to him and what he is entitled to enjoy in the capacity of a Director of the 1st defendant-company, Executive Director of the 2nd defendant-Company and Joint Managing Director of the 3rd defendant- company. All the acts of the 6th defendant/ respondent and that of the plaintiff/ appellant shall be scrutinised by the Board of Directors of the 1st defendant- company as well as the other subsidiary companies and they shall do nothing, which is forbidden for them by the Board of Directors, We are prompted to issue such directions after looking into the composition of the Board of Directors of the 1st defendant- respondent Company and other subsidiary companies and noticing the presence of quite a few eminent persons in their respective fields. We have put our trust in them and hope that they will ensure that the Express Group of Newspapers do not suffer for the reason of the clash between the interests of the 6th defendant- respondent on the one hand, and that of the plaintiff/ appellant, on the other hand. We have no reason to think that the plaintiff?s appellant or the 6th defendant-respondent shall act only in self-interest and ignore the interests of the Institution, to which they belong. We see in the scheme aforementioned, that the apprehension which have been looming large, may be contained to some extent and parties will abide by the final pronouncement in the suit?.



6. The injunction/ direction, which we have ordered in the appeals on 27.7.1994, is operative and will operate until the disposal of the suit in C.S. No. 1246 of 1992 subject to any judicial order that may be passed in any collateral proceedings in respect of such affairs of the 1st defendant- Company and other subsidiary companies, which are not covered by the issues in C.S. No. 1246 of 1992. In other words, once C.S.No.1246 of 1992 is disputed of, injunction/ direction issued by us will become inoperative. The plaintiff in his petition in C.M.P. No.2347 of 1995 for modification of the order passed in the appeals, has stated that after the directions were issued by us, the Board of Directors of the 1st defendant- Company meet on 24.9.1994 and the independent members at the Board of Directors and its subsidiary companies requested the plaintiff/ appellant and the 6th defendant/ respondent to arrive at a settlement so that the dispute between them was solved amicably. They also decided to obtain legal opinion regarding the order passed by the Court and obtained from the former Chief Justice of India, Mr. Justice E.V. Venkataramiah, such opinion on 31.10.1994 and again on 17.11.1994. The legal opinion is stated as follows:


?The order of the court appears to be one made with the object of protecting the interests of the Indian Express Newspaper, from the acts of disharmony of the two cousins by constituting the independent directors as some kind of ombudsm to interfere and correct both when they overstep their respective areas as determined by them. If the powers of Manoj are restored as per the order of the court, perhaps it may create a favourable atmosphere for settlement of all the disputes between Manoj and Vivek. The querists have a duty to pay the role of good Samaritans in bringing about an effective settlement between the two grand-children in RNG in the interests of the Indian Express Newspaper?.


Finally, after protracted negotiation and discussions, they, i.e. the plaintiff and the 6th defendant have reached a settlement whereby all the disputes and issues raised in the suits filed by the former, being suit C.S. Nos.1246 and 1247 of 1992 have been sorted out. The 6th defendant, the 14th defendant i.e. mother of the plaintiff, and the plaintiff himself have accordingly signed a memorandum of settlement incorporating the terms and conditions of the settlement. The Board of Directors of the 1st defendant- Company at its meeting held on 5.2.1995 have ratified the memorandum, in which meeting, the plaintiff and defendants 6 and 14, neither participated in the decision, nor voted for the approval of the settlement. The Board of Directors of other subsidiary companies, have also ratified and approved the settlement signed by the parties. The plaintiff has stated as follows:


?I submit that the above appeals have been filed in various applications in C.S. No.1246 of 1992 wherein inter alia I had prayed for the declaration that the Board Meeting of the 1st defendant held on5.1.1991 as illegal, null and void. I summit that I have also filed another suit C.S. No.1267 of 1992, wherein I prayed interalia for a declaration that the resolutions passed at the Board Meeting of the 1st defendant effecting the transfer of shares of the 1st defendant as illegal, null and void.?

In the latter suit I had also filed certain applications for various reliefs. I submit that no orders were passed in these applications and therefore, no appeal had been preferred in respect of the same. I submit that both the suits namely, C.S. Nos.1246 and 1247 of 1992 deal more or less with the same subject-matter and are founded on the same cause of action. The only difference is that in the former (C.S. No.1246 of 1992), I have claimed relief in respect of the management of the newspaper companies and in the latter (C.S. No.1247 of 1992), I have claimed relief in respect of the shares belonging to me. However, this Hon?ble Court had passed the above mentioned order in respect of interlocutory reliefs claimed in C.S. No.1246 of 1992. This Hon?ble Court while passing the interim order on the appeal noticed the convergence between the two suits and stated specifically as under:


Before we conclude, we record also our concern that the instant suit is not the only litigation concerning the Express Group of Newspapers, with the plaintiff and the 6th defendant as parties. There are other suits including one filed by the plaintiff himself and one, it is said, by the widow of deceased son of RNG. The parties will be well advised if they take immediate steps to bring all such proceedings together and see that they are disposed of, if not together, simultaneously one after the other.

I state that the nature of the two suits which are bound by the same set of facts and grounds but seeking different reliefs (which are again interlinked as the interim order of the Hon?ble Court dated 27.7.1994 shows) had to be settled together?.

By what has been stated above, it is clear that the plaintiff, the 6th defendant and the 14th defendant, have entered into a compromise and signed accordingly a comprehensive memorandum of settlement and the same has been ratified by all the defendants present and either contesting or formal/pro forma parties in C.S. No.1246 of 1992. The order by us will cease to operate, if the compromise under the memorandum aforementioned, is lawful and dispose of the suit C.S. No.1246 of 1992.


7. The plaintiff/ appellant however, has further stated as follows:


?I submit that in C.S. No. 1247 off 992, Mrs.Saroj Goneka, the daughter-in-law of late Ramnath Goenka and her three daughters have been arrayed as defendants. The above mentioned persons have only been made a pro forma defendants against whom no relief is sought. I further submit that this Hon?ble Court has also taken judicial notice of the said suit. I submit that the memorandum of the settlement mentioned above covers the issues not only in C.S. No.1246, but also in C.S. No.1247 of 1992. Therefore, it is just and necessary that this Hon. Court may be pleased to transfer the suits (C.S. Nos.1246 and 1247 of 1992) to the Hon. Division Bench so that the same may also disposed in terms of the Memorandum of Settlement arrived at between the parties.?


Mrs.Saroj Goenka has filed C.S. No.1123 of 1992 wherein she has prayed inter alia for a declaration that she and her daughters are entitled to one third of the shares of the 1st defendant. In Application No.4307 of 1992 in C.S. No.1123 of 1992, His Lordship Kanakaraj had passed an order dated 9.9.1992 as follows:


That Nariman Point Building Services and Trading Private Limited the 3rd respondent in Application Nc.4307 of 1992, its agents, servants and representatives be and are hereby restrained by an injunction until further orders of this Court from making any transfer in respect of share certificates; of (i) Vivek Khaitan; and (ii) Nusili Wadia the respondent 1 and herein and also recognising of any further transfer of shares:

I submit that the terms of the Memorandum of Understanding does not violate the order of the learned single Judge. The ratification of the Register of Members of the 1st respondent consequent on the recission of the resolution to transfer the shares, from the appellant to the late Ramnath Goenka is not a transfer and therefore the injunction against the transfer of the shares would not apply to the rectification of the Register of Members. The other transfer of shares mentioned in Clause 1() of the Memorandum of settlement are to be made and effected only on and not earlier than the passing of a decree in terms of the Memorandum of Compromise by this Hon?ble Court. I submit that copies of the applications filed by Mrs.Saroj Goenka and her daughter seeking to block the settlement have been served on me. These applications are likely to come up for hearing before the learned single Judge sitting in the Original side of this Hon. High Court. I submit that these applications have been moved only with the mala fide intention of stalling the settlement arrived between me and the 6th respondent although the settlement itself protects the interests of Mrs.Saroj Goenka by making appropriate provisions. I submit that despite the best efforts taken by the plaintiff/ appellant and the 6th respondent to settle the matter with Mrs.Saroj Goenka, Mrs.Saroj Goenka had always been unwilling to settle the matter and was only interested in scutting the settlement talks. Even now settlement talks with her is on although the meetings fixed for 14th and 15th February, 1995 could not go on because of the unavailability of the possible mediator. In fact, in one of the applications which should come up for hearing, she has prayed for an injunction restraining any compromise decree which is to be recorded in the suits filed by me. I submit that steps would be taken by me as well as the 6th defendant to contest these applications which have been filed only to prevent the settlement being effected. I submit that the settlement arrived at between the appellant and the 6th defendant does not in any way affect the rights of Mrs.Saroj Goenka in prosecuting her suit, wherein she has claimed the l/3rd shares in the 1st defendant. In clauses 41,44 and 46, the Memorandum Settlement expressly states that all lawful claims of Mrs. Saroj Goenka and her daughters as finally settled by Courts would be met by me and the 6th defendant and also by the defendant companies. So her interests are not prejudiced in any way by the present settlement".


8. 0.23 of the Code of Civil Procedure has, along with the provision for withdrawal of a suit or abandonment of a part of the claim, a provision in Sub-Rule (3) thereof for compromise of a suit, where it is proved to the satisfaction of the court that a suit has been adjusted wholly or in part by way of lawful agreement or compromise in writing and signed by the parties or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit. The court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement compromise or satisfaction is the same as the subject-matter of the suit. The prescription in this behalf is that where it is proved to the satisfaction of the court that a suit has been adjusted wholly or in part by any lawful agreement or compromise or where the defendant satisfies the plaintiff in respect of whole or any part of the subject-matter of the suit, the court shall order such agreement, compromise or satisfaction to be recorded and shall pass a decree in accordance therewith so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement of compromise or satisfaction is the same as the subject-matter of the suit. An agreement or compromise, which is void or voidable under the Indian Contract Act, 1872, shall not be deemed to be lawful within the meaning of this Rule. All agreements are contracts, if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object and which are not expressly declared to be void (See Sec. 10 of the Contract Act).


Chapter 2 of the Contract Act contains specific provisions with respect to voidable contracts and void agreements and about the considerations and objects which are lawful in Sec.23 of the Contract Act provides as follows:


?(23) The consideration or object of an agreement is lawful unless - it is forbidden law; or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent; or involves or implies injury to the person or property of another; or the court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void?.


Thus, for showing whether a suit has been adjusted wholly or in part by any lawful agreement or compromise, it will be necessary to see whether the consideration for the agreement is lawful and whether the object of the agreement/ compromise is lawful, ?whether the agreement is arrived at by the free consent of the parties and whether the parties are competent to contract.


9. There is no dispute and there is no contention by any party before us that either the plaintiff or the 6th defendant or the 14th defendant in C.S. No.1246 of 1992, is not competent to contact. It is also not disputed or contended before us that the agreement has not been arrived at by the free consent of parties, i.e. free consent of the plaintiff, the 6th defendant and the 14th defendant. All other parties in the said suit, C.S. No.1246 of 1992, have ratified the settlement. There is no dispute raised and thus there is no contention on their behalf that there is anything unlawful in the agreement. Mrs. Saroj Goenka and her three daughters who are arrayed as defendants in C.S. No.1247 of 1992, however, are not parties to the settlement. But, according to the plaintiff, they are only pro forma parties in C.S. No.1247 of 1992, against whom no relief is sought for Mrs.Saroj Goenka has filed an independent suit, i.e., C.S. No.123 of 1992 and sought for a declaration that she and her daughters are entitled to one-third share in the 1st defendant- company. Serious, objections, however, are raised on behalf of this mother- daughters team who, according to the plaintiff, are pro forma defendants in C.S. No.1247 of 1992 and who have chosen to sue for their rights in C.S. No.1123 of 1992, and it is contended on their behalf of a team of four learned Advocates of eminence that the court should not order the compromise to be recorded and accord- ingly for a decree in the suits, i.e., C.S. Nos. 1246 and 1247 of 1992, some of the arguments are result of a mistake committed by the plaintiff himself, who filed a petition in the appeals for the modification of the order therein for the reason of the compromise and recording of the compromise in the suits C.S. Nos.1246 and 1247 of 1992 and to pass the decree in the suits and move petitions in the instant appeals to withdraw the suits for hearing along with the appeals and for recording the compromise accordingly. However, before the matter as to the compromise was taken up on the original side in the suits aforementioned, Mrs.Goenka and her daughters moved petitions to restrain the plaintiff, the 6th defendant and the 14th defendant from getting the compromise recorded. Whether such a petition is maintainable at all or not, is a matter which should not detain us, but the fact as is on the record is that they filed such petitions before the learned single Judge in the suit and the plaintiff moved petitions seeking the transfer of the suits for being heard along with the petition for the modification of the judgment/order in the appeal. A learned single Judge of this Court has ordered for the petitions to be listed before us. Vide order in Applications Nos.143 to 146,941 and 942 of 1995 in C.S. Nos.1246 and 1247 of 1992, order dated 15.2.1995. We see absolutely no purpose either in the petition for injunction not to record the compromise or in the petitions for the transfer of the suits from the file of the Original Side for hearing with the petitions for modification of the judgment/ order in the appeals. It is somewhat surprising that the parties, who are advised by eminent counsel, have fallen into such a procedure. True, Mrs.Goenka and her daughters are not impleaded as parties in either of the appeals, in which the petition for modification of the judgment/ order has been filed on behalf of the plaintiff/ appellant. They are however, not parties in any capacity in C.S. No.1246 of 1992. The order in appeal has been made to operate only until the disposal of C.S. No.1246 of 1992, Mrs.Goenka and her daughters, who are not parties in the said suit and accordingly, who are not parties in any of the appeals in which the petitions for modification of the judgment/ order has been filed, are obviously not bound by the agreement or compromise between the parties in the appeals and/or C.S. No. 1246 of 1992. How far the compromise between the parties in C.S. No. 1246 of 1992 will affect C.S. No.1247 of 1992 is a matter which has to be examined in the light of the pleadings, in the said suit and the status of the parties therein. There are specific allegations and it is obvious from the pleadings in C.S. No.1247 of 1992 that Mrs.Goenka and her daughters are only pro forma parties and no relief has been asked for against them. The compromise, to which they are not parties, shall in no way affect their rights and in case there is a compromise recorded in C.S. No.1247 of 1992, no relief can be granted to the plaintiff in the said suit against Mrs.Goenka and her daughters. 0.2, Rule 3 of the Code of Civil Procedure, makes it clear that a person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs, but if he omits, except with the leave of the court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted. What is omitted by the plaintiff in the suit C.S. No.1247 of 1992 and by such comission, no relief is asked for against Mrs. Goenka and her daughters, is as good as abandonment by the plaintiff. We thus do not in the instant proceeding, have jurisdiction to consider whether there is a lawful agreement/ compromise between the parties in the appears and whether for the reason of such lawful compromise between the parties, the order by us dated 27.7.1994 needs any modification or clarification that with the disposal of the suit C.S. No.1246 of 1992, the order by us dated 27.7.1994 has become in operative and for the said purpose, to examine whether the compromise is lawful and whether the compromise has in any way affected the interests of any other person. There are some objections thus raised on behalf of Mrs. Goenka and her daughters, which are to be ignored even without any mention, but for the reason that such arguments are advocated by earned counsel, who may think at least what they have urged are required to be considered, we take notice of them.


10. It has been urged almost as a common contention on behalf of Mrs. Goenka and her daughters that the compromise should be recorded in the suit and thus, the appellate court, which after making the order of injunction/ direction has become functus officio cannot do so. We note with respect this contention but do not propose to detain ourselves for a detailed examination of it; for the obvious reason that there can be an appeal against a judgment/ decree which has not disposed of the entire suit, but has disposed of only a part of it, or disposed of finally an issue of injunction at the interlocutory stage of the proceedings, wherein the older is final for the purpose of appeal, but not final as the disposal of the suit may require. Whether it is an appeal from the original decree as contemplated under the Code of Civil Procedure, or against appealable orders as found enumerated under 0.43 of the Code of Civil Procedure, the appellate court?s power is preserved and is the same, as 0.41 of the Code has envisaged. The power of the appellate court is spelt out in 0.41, Rule 33 in these words:


"The appellate court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may be require, and this power may be exercised by the court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respects or parties may not have filed any appeal or objection and may where there have been decree in cross suits or where two or more decrees are passed in one suit, be exercised in respect of all or any of the decree, although an appeal may not have been filed against such decree.


Provided that the Appellate Court shall not make any order under Sec.35-A in pursuance of any order objection on which the court from whose decree the appeal is preferred has omitted or refused to make such order".


The Letters Patent power for appeals from the courts of original jurisdiction to the High Court in its appellate jurisdiction, as contemplated under Clause 15 of the Letters Patent of this Court, is more expansive than the power of an appeal otherwise under the Code of Civil Procedure.


In Padmanabhan v. M.A.Narasimhan, (1993)1 L. W. 169, speaking for a Full Bench of the Court, one of us (Mishra, J), has said:


"In the context of the origin of the Letters Patent Appellate Power of the court and the scope and ambit of the appeal against a judgment on the Original Side of the court, we have no hesitation in holding that if at all the conditions for an appeal against a judgment under Clause 15 of the Letters Patent are satisfied and when there is no specific bar, merely because some other law is providing appeals against certain types of orders and says that against the other orders, there shall be no appeal to a court, it cannot be inferred that even if it is appealable under Clause 15 of the Letters Patent, since it is not appealable under Sec.39(l) of the Arbitration Act, 1940, there shall be no appeal. The Letters Patent law being a special law, it shall prevail against any general law so long as there is no specific abridgment, amendment or repeal by a competent legislature."


It is always the endeavour that a court of law should ensure that parties settle their disputes amicably and the Legislative command in this behalf is given in 0.23-A, which has been introduced in the Code of Civil Procedure Act 104 of 1976 and which says in particular and without prejudice to the generality of the provisions of Sub-rule (1) of Rule 1, in every suit or proceeding to which that order applies, an endeavour shall be made by the court in the first instance, wherever it is possible to do so consistent with the nature and the circumstances of the case, to assist the parties in arriving at a settlement in respect of the subject-matter of the suit and if in any such suit or proceeding, it appears to the court that there is a reasonable possibility of a settlement between the parties, the court may adjourn the proceeding for such period as it thinks fit to enable attempts to be made to effect such a settlement, and if necessary to secure the services of such person (preferably a woman where available), whether related to the parties or not, including a person professionally engaged in promoting the welfare of the family as the court may think fit, for the purpose of assisting the court in discharging the functions aforementioned. In particular and without prejudice to the generality of the provisions under the said order, the suit or proceeding concerning the family, mentioned therein includes a suit or proceeding relating to any other matter concerning the family, in respect of which, the parties are subject to their personal law/The Personal Law involved in the instant case is the Law as to intestate succession if at all the succession has any meaning in the context of the dispute between the parties before us, from RNG to the plaintiff, the 6th defendant and the 14th defendant and the brother of the plaintiff and Mrs.Goenka and her daughters. We hold for the said reason that objection to the jurisdiction of the court has been articulated more as a pretext to make the presence of Mrs.Goenka and her daughters felt in the proceedings and to bring somehow on the record of the instant proceeding, the fact the she has been claiming a division of the assets of the 1st defendant Company, i.e. the holding of the Apex Company to the extent of one third share for the branch of the son of late RNG. The jurisdiction of a court in examining whether a compromise has fully or partly adjusted the claim in the suit, is limited to examine whether the agreement is void or voidable. In other words, whether it is a lawful compromise. It does not extend to any adjudication of a dispute inter se between the parties to the compromise. It does not also permit any adjudication of a claim of a person, who is not a party to the compromise, because such claim has to be adjudicated strictly in accordance with law and since a person, who is not a party to the compromise, and has not consented to it, there is no question of the compromise binding such a person. We are for the said reason not inclined to expand the instant proceeding and accommodate the case of Mrs. Goenka and her daughters, and examine whether there will be any effect of the compromise upon their claims in the suit i.e. C.S. No.1123 of 1992. We are not surprised however why at one stage in the course of the proceedings in the suit and the appeals, the plaintiff appeared to sail with Mrs.Goenka and daughters and when he has chosen to shake hands with his cousin brother- 6th defendant, the aunt and cousin sisters have fallen out. We have looked into contents of the plaint in C.S. No.1123 of 1992, inspite of the serious objections raised by Mr.Pai, learned counsel appearing for Mrs. Goenka to even our looking into the contents of the said suit, to satisfy our conscience, and we have found nothing in the said plaint, which in any manner appears to traverse the pleadings of the plaintiff in C.S. No.1246 of 1992. Mrs. Goenka and her daughters are claiming a right of their own in the assets of the 1st defendant- company and no asset of the 1st defendant- company is relinquished or transferred or in any manner destroyed. That remains in tact and shall be so available to the plaintiff in C.S. No.1123 of 1992 or any other party in the said suit, for adjustment/ satisfaction of their claims therein.


11. The objection next only to the above, on behalf of Mrs.Goenka and her daughters, has been that this Court should decline to review its judgment only because the parties have chosen to settle their differences, as no case for a review in terms of the requirements of 0.42, Rule 1, Code of Civil-Procedure, is made out. We are afraid acceptance of such a contention to deny modification or review of a judgment or order on technicalities, which shall confine the court to the orders in 0.47, Rule 1 of the Code will amount to sanctioning in many cases injustice, for, there may be cases in which subsequent events to the judgment/ order, may require a modification and such modification in any way shall cause no prejudice to the parties to the proceedings. Any modification/review of a judgment or order in the ends of justice is permissible even in cases where no specific provision of a law is available. Such a review can be done

in the exercise of the inherent power of the court, which as regards this Court is found in its Letters Patent and the Rules framed by this Court read with Sec.4 of the code of Civil Procedure, and as shown in Sec.151 thereof.


12. Two objections however have detained us in the course of our examination, whether the compromise between the plaintiff and the 6th defendant and the 14th defendant, is a lawful compromise, main arguments in this behalf are advanced before us by Mr.Chandru, learned counsel, who has appeared on behalf of the wife of Anil Kumar Sonthalia, brother of the plaintiff, whom the latter has described in the plaint as ?mentally retarded?. No one can enter into a compromise, unless he is competent to do so. Anything done by an incompetent person, will not be lawful, see Sec.10 of the Contract Act, 0.32 of the Code of Civil Procedure however has taken care of the interests of minors and persons of unsound mind, because they nay not have the capacity or competent to sue, but they may need to sue in many situations and in any case, they are likely to be sued or are being sued by others. The presence of the minor or of unsound mind in such a case in a proceeding in a court of law is by a person, who is called the next friend of the minor or the person of unsound mind. Rule 7 of 0.32 of the Cade says that no next friend or guardian for the suit shall, without the leave of the court expressly recorded in the proceeding, enter into an agreement or compromise on behalf of a minor, with reference to the suit, in which ne acts as next friend or guardian, and says,


?7(1) No next friend or guardian for the suit shall, without the leave of the court, expressly recorded in the proceedings, enter into the agreement or compromise, on hehalf of a minor with reference to the suit in which he acts as next friend or guardian;

(1A) An application for leave under Sub-rule (1) shall be accompanied by an affidavit of the next friend or the guardian for the suit, as the case may be, and also, if the minor is represented by a pleader, by the certificate of the pleader, to the effect that the agreement or compromise proposed is, in his opinion for the benefit of the minor.

2. Any such agreement or compromise entered into without the leave of the court so recorded shall be voidable against all parties other than the minor.?


The Madras Amendment to 0.32. Rule 7, as Sub-Rule (1A) says:


(1A) ?Where an application is made to the court for leave to enter into an agreement or compromise or for withdrawal of a suit in pursuance of a compromise or for taking any other act on behalf of a minor or other person under disability and such minor or other person under disability, is represented by counsel or pleader, the counsel or pleader, shall file in court with the application a certificate to the effect that the agreement or compromise or action proposed is, in his opinion, for the benefit of the minor or other person under disability. A decree or order for the compromise of a suit, appeal or matter, to which a minor or other person under disability is a party shall recite the sanction of the court thereto and shall set out the terms of the compromise as in Form No.24 in Apperdix D to the Schedule?.


Rule 15 of 0.32, Says:


?(15) Rules 1 to 14 (except Rule 2A) shall, so far as, may be apply to persons adjudged, before or during the pendency of the suit, to be of unsound mind and shall also apply to persons who, through not so adjudged, are found by the court on enquiry to be incapable, by reason of any mental infirmity, of protecting their interest when suing or being sued?.


However, our attention was drawn to the settlement, particularly to a declaration, in which the plaintiff has gone back from his pleadings in respect of the status of Anil Kumar Sonthalia and in the settlement, accepted the case of the 6th defendant that the shares of the 1st defendant- holding company, which were jointly held by the plaintiff and the 6th defendant were not in trust for or were intended for Anil Kumar Sonthalia, we thought it proper to see how a brother equal in status in all respects to the plaintiff, has been treated in the family. There are sufficient materials to show that RNG in his lifetime, gave to the daughter-in-law and the daughters of her substantial properties and separately held the Indian Express group of publications and its holding company, which in course of time and until 5.1.1991 in terms of the shares, stood divided between the 6th defendant and the plaintiff, some shares jointly held by the plaintiff and the 6th defendant and a fraction of the shares held by the mother of the plaintiff herein and Anil Kumar Sonthalia. The only reference to any proprietory interest even qua number of a private limited or a public limited company in the assets or estate created by RNG for Anil Kumar Sonthalia is said to be in a company, Express Chemical Products Private Limited, in which, in accordance with the affidavit of the wife of Anil Kumar Sonthalia. he has 1,500 equity shares and Mrs.Saroj Goenka 2,500 equity shares and the income which it gives to Anil Kumar Sonthalia is a nominal rental of Rs.2,500 for a flat, which is in his occupation, some minor perks and a monthly salary allowance of Rs.7,000. In the estate of RNG, publications we are in the hands of the 6th defendant and the plaintiff and other properties in the hands of Mrs.Goenka and her daughters. Anil Kumar Sonthalia is given, it seems, a raw deal.


13.. Plaintiff has sought the disposal of the suit in C.S. No.1246 of 1992, in terms of the memorandum of settlement and, the 6th defendant and the 14th defendant have joined him and asked for a declaration that the resolution of the Board of Directors of the first defendant- Company dated 5.1.1991 by which 9,280 equity shares and 4,000 preference shares of the plaintiff were transferred to the late RNG. has been rescinded at the meeting of the Board of the first defendant held on 5.2.1994 and further as follows:


(2) Ordered and declared that the Register of Members of Defendant No. 1 is rectified by having the name of the plaintiff substituted in the Register of Member as holder of the said equity and Preference shares on the condition that they are to be dealt with as hereinafter provided;

(3) Ordered and decreed that plaintiff do pay to the estate of late R.N.Goenka the balance consideration owed by him originally for the purchase of shares from R.N.Goenka as reduced by any amount owing from the estate of late R.N.Goenka to him as on the date of R.N.Goenka?s demise.

(4) Ordered and decreed that the abovesaid 9,280 equity shares and 4,000 preference shares do stand transferred to the defendant No.6 from the plaintiff.

(5) Ordered and decreed that the defendant No.6 do pay the plaintiff the latter?s cost of the shares which shall be equivalent to the consideration paid on the original transfer of the said shares from R.N.Goenka.

(6) Ordered and decreed that the share certificates along with transfer forms duly executed by the plaintiff in defendant No.6?s favour (which have been deposited with Mr.R V. Pandit on the execution of the memorandum of Settlement with authority to Mr.R.V. Pandit to hand over the same to defendant No.6) be handed over to defendant No.6.

(7) Ordered and decreed that in addition, the 40 Equity Shares of defendant No.1 held by the defendant No. 14, do stand transferred, to defendant no.6 and/or his nominee or nominees on payment by defendant No.6 to defendant No.14 at face value (Rs.100 per share).

(8) Ordered and decreed that the share certificates along with transfer forms duly executed by defendant No.14 in defendant No.6?s favour".

"(Which have been deposited with Mr.R.V. Pandit on the execution of the memorandum of settlement with the authority to Mr.R.V. Pandit to hand over the same to defendant No.6) be handed over to defendant No.6.

(a) Ordered and declared:

(i) that the 15,800 Equity Shares and 4,000 preference shares already held by defendant No.6 in defendant No.l belong to defendant No.8 absolutely and neither the plaintiff nor defendant No. i4 have any claim or right in respect thereof

(ii) that in relation to the claim made by the plaintiff in relation to the 3,040 equity shares of defendant No. 1 held by defendant No.6, alleging that the same were held in trust for his brother Anil Kumar Sonthalia, the plaintiff confirms and declares;

(A) that he had made the said claim on his own without reference to Anil Kumar Sonthalia,

(B) that neither during his lifetime has the late Ramnath Goenka, nor thereafter has Anil Kumar Sonthalia himself ever made such a claim".

(iii) that the plaintiff has withdrawn and does hereby once again withdraw all such allegations and indemnifies defendant No.6 against all or any claims that may be made by Anil Kumar Sonthalia having regard to the aforesaid allegations or any other basis whatsoever in relation to the said shares;


10. Ordered that additionally, defendant No.14 and the plaintiff shall jointly and severally indemnify and always keep indemnified defendant No.6, Defendant No.1, defendant No:2 and defendant No.6 against all claims of whatsoever nature that may arise from any member of the Sonthalia family including the family descending from defendant No. 14 and her husband, the late Shyamsunder Sonthalia, whether such claim relates to the estate of late Ramnath Goenka or other matters and issues which are settled herein on that the rights of defendant No.6 in the entire shares of defendant No. 1 and of defendant No.l in the shares of defendant No.2 and defendant No.5 shall be uneffected by any beyond and claim by any member of the Sonthalia family as aforesaid and defendant No.14 and the plaintiff shall protect and indemnify defendant No.6 and the said companies against any such claim/ claims and all costs and expenses of resisting such claims shall be borne by defendant No.14 and the plaintiff jointly and severally.


"11. Ordered and decreed that the transfer forms and/or instruments or writings executed by the plaintiff, to have his name deleted from the 2,040 equity shares belonging to defendant No.6 (in which his name has been added as the 2nd holder) and to have the name of defendant No.6?s wife Mrs.Ananya Goenka inserted therein as the 2nd holder and deposited with Mr.R.V. Pandit be handed over to defendant No.6.


12. Ordered and decreed that the immovable property of defendant No.2 at Hyderabad (described in Schedule ?A?) currently under lease to defendant No.4, be transferred to defendant No.3 with the subsisting lease in favour of defendant No.4 for Rs.202 lakhs and defendant No.2 and defendant No.3 shall comply with all formalities in respect:hereof to effectuate the transfer and that defendant No.2 shall execute such deeds as the law may require for vesting the title in defendant No.3.


13. Further ordered that the title deeds, if any, of the property shall be handed over to defendant No.3 at the time of the execution of the sale deed."


14. Ordered and decreed that the leasehold rights of defendant No.2 in Flat No.25, Jor Bagh, New Delhi (described in Schedule ?B?) be assigned to defendant No.3 with the option to continue to hold the tenancy in the name of defendant No.2 in which event defendant No.3 shall be responsible for payment of the rent and other charges to the landlord.


15. Ordered and decreed charges that the following shares of the specified Indian Express Group companies do stand transferred in the order mentioned hereunder:

(a) The 44.250 Equity Shares of Rs.100 each of Sterling Newspapers Limited held by Defendant No.1 and the entire balance 14,750 Equity Shares of Rs.100 each of Sterling Newspapers Limited held by defendant No.2 do stand transferred to the plaintiff. The plaintiff do forthwith pay one rupee for every Equity Share to defendant No.l and defendant No.2".

(b) The 15,000 Equity Shares of Rs.100 each of defendant No.5 held by defendant No.3 and/or is nominee do forthwith stand transferred to defendant No. 1 and/or its nominees. Defendant No.l do forthwith pay one rupee for every such share to defendant No.3.

(c) The 3,19,800 Equity Shares of Rs.10 each of defendant No.4 held by defendant No. 1 and 30,200 Equity Shares of Rs.10 each of defendant No.4 held by defendant No.2 or its nominees do forthwith stand transferred to Sterling Newspapers Limited and/or its nominees on the passing of the consent decree. Sterling Newspapers Limited do forthwith pay the sum of Rs.35.29 per share aggregating to Rs.123.5 lakhs.

(d) The 4,00,000 Equity Shares of Rs.100 each of defendant No.3 held by defendantNo.2 and/or its nominees do forthwith stand transferred to defendant No.4 and/or its nominees. Defendant No.4 shall pay to the defendant No.2 the sum of Rs.105.50 per share aggregating to Rs.422 lakhs.


16. Agreed and declared:

(i) that the payments of the above values are not the consideration for the shares that stand transferred;

(ii) the consideration is the implementation of the overall settlement worked out between the parties hereto and the companies;

(iii) the various obligations hereunder are not severable from one another; (iv) the values of the shares stipulated to be paid have been worked out so as not to substantially erode balance sheet values and net worth of the transferor companies.


17. Ordered and decreed that the relevant share certificates in respect of all the shares referred to hereinabove (along with duly executed transfer forms duly filled in, in favour of the transferees executed a deposited with Mr.R.V. Pandit with the authority to Mr.R.V. Pandit to hand over the same to the concerned persons) be handed over to the persons entitled to the same.


18. Ordered and declared that all the aforesaid transfer of shares are and shall be deemed to be on spot delivery basis.


19. Agreed, declared and ordered:

(i) that all other shares including those of defendant No.2, defendant No.5, Bharatkatha Publications Private Limited and Bharatkatha Offset Private Limited held by defendant No.1 shall remain vested in defendant No.l and that,


(ii) that the shares of defendant No.l vest indefendant No.6 absolutely without any let or hindrance from either the plaintiff, defendant No.14. defendant No.3, defendant No.4 or Sterling Newspapers Limited.


20. Agreed, declared and ordered


(i) that the shares of defendant No.3 vest in defendant No.4

(ii) that the shares of defendant No.4 vest in Sterling Newspapers Limited;

(iii) that the shares of Sterling Newspapers Limited, vest in the plaintiff, without any let or hindrance from defendant No.6. defendant No.1, defendant No.2 or defendant No.5.


21. Ordered that the plaintiff do hereby withdraw his objections to the transfer of the Registered office of defendant No. 1 to Bombay and that Suit No.1562 of 1992 filed by him in this regard be withdraw unconditionally.


22. Ordered that all statutory records, files, title deeds and share certificates investment documents, books of account relating to defendant No.3, defendant No.4 and Sterling Newspapers Limited as are available with defendant No.l or defendant No.2 be made over to the plaintiff or any official of defendant No.3/ defendant No.4 authorised by him and ail statutory records, files, title deeds and share certificates and investment documents, books of accounts relating to defendant No.l, defendant No.2, defendant No.5. Bharatkhatha Publications Private Limited and Bharatkhatha Offset Private Limited in the possession of the plaintiff/ defendant No.3/ defendant No.4 be made over to defendant No.6 or an official of defendant No.l/ defendant No.2 authorised by him.


23. Ordered, declared and decreed that.


(i) defendant No.2 and defendant No.5 arc the absolute owners of their registered titles of the newspapers and magazines (including supplements) whether currently published by them or not (as per schedule ?C) in respect of the whole of India,

(ii) that the plaintiff, defendant No.3/ defendant No.4 and Sterling Newspapers Limited have and shall have no claim of any kind whatsoever in relation thereto and.

(iii) that the plaintiff, defendant No 3, defendant No.4 and Sterling Newspapers Limited shall not at any time whatsoever directly or indirectly use or adopt any of the said titles in any way whatsoever" or any title similar or resembling thereto save and except what is specifically permitted heteinafter."


24. Ordered, declared and decreed that the title "Indian Express? ?vests absolutely in defendant No.2 and that defendant No.3 has and shall not ever claim or have any right, title or interest in respect thereof subject to the condition only that in the states of Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, Orissa (hereinafter referred to as the five states) and the Union territories of Pondicherry, Enam, Andaman and Nicobar Islands and Lakshadweep Islands (hereinafter referred as the said Union Territories), defendant No.6. defendant No.l, defendant No.2 and defendant No.5 or any corporation owned or controlled by them shall not directly or indirectly use the title (in relation to the print media) "Indian Express? ?or any name which includes the words "Indian " or "Express" or any derivative thereof save the Financial Express, the Weeklies, supplements or other periodicals names or which are iisted in Schedule C.


25. Ordered, declared and decreed:


(l) that the title "Indian Express" belongs to defendant No.2 absolutely;

(ii) that this title includes not only all rights in respect of all publications of an ??English" language newspaper under the name "Indian Express", but also in relation to any use whatsoever whether in relation to print media, electronic media or any other medium whatsoever,

(iii) that such rights and ownership is unlimited in point of territory or time,

(iv) that defendant No.3 is permitted use of the expression "New Indian Express" only for the publication of an English language daily newspaper in the specified five states and Union Territories and for no other purpose or any other area or territory for any use whatsoever.


26. Ordered, declared and decreed: .


(i) that defendant No.3/ defendant No.4/ Sterling Newspapers Limited are the absolute owners of all the titles of the newspapers and Magazines (including the supplements) whether currently published by them or not (as per schedule ?D?)

(ii) that defendant No.6/ defendant No.2/ defendant No.6/ defendant No. 1 shall have no claim of any kind in relation thereto,

(iii) that defendant No.6/defendant No.2/defendant No.6/ defendant No.1 shall not at any time whatsoever directly or indirectly use or adopt any of the said titles in any way whatsoever or any title similar or resembling thereto,

(iv) that defendant No.6/ defendant No.2/ defendant No.5/ defendant No. 1 shall have no claim of any kind in relation thereto,

(v) that defendant No.6/ defendant No.2/ defendant No.5 defendant No.l shall not at any time whatsoever directly or indirectly use or adopt any of the said. titles in any way whatsoever or any title similar or resembling thereto,


27.. In relation to the English language publication ?Indian Express??, agreed and ordered that, ?(i) The name of defendant No.3 be changed to? New Indian Express Newspapers (Madurai) Limited.



(ii)The plaintiff, defendant No.3, defendant No.4 and Sterling Newspapers Limited shall not use the title Indian Express at any time, anywhere,

(iii) Subject to clause 28 herein below, defendant , No.3/New Indian Express Newspapers (Madurai) Limited shall be entitled to publish an English language Daily by the name of ?New Indian Express? on the condition that the expression ?New? shall be in the same line and of the same size as the words ?Indian Express? wherever this title appears,

(iv) Save and except what is stated in clause (iii) hereinabove neither defendant No.3/New Indian Express Newspapers (Madurai) Limited or the plaintiff or defendant No.4 or Sterling Newspapers Limited or any corporation owned or controlled by them shall directly or indirectly use the title Indian Express or any of its derivatives or any title similar or resembling thereto at any time whatsoever, provided that the restrictions against the of word ?Express? (without association with the word,?Indian?) shall not apply to the sections or supplements of new Indian Express, and in these sections or supplements the word ?Indian? shall not be used along side or otherwise with the word ?Express?.

(v) The plaintiff, defendant No.3 and new Indian Express Newspapers (Madurai) Limited shall be entitled to object to and prevent any other person from using the title Indian Express or its derivatives in the said five states and the said Union Territories and for this purpose, shall be entitled to require defendant No.2 to take steps to prevent such publication. If for a period of 15 days after receipt of notice from the plaintiff or defendant No.3, (or New Indian Express Newspapers (Madurai) Limited), defendant No.2 fails to institute appropriate proceedings, then the plaintiff and /or defendant No.3 (New ?Indian Express Newspapers (Madurai) Limited) are hereby irrevocably authorised to adopt such proceedings on behalf and in the name of defendant No.2 to restrain and stop such publication or publications?.


28. Ordered and decreed that defendant No.3, New Indian Express Newspapers (Madurai) Limited, defendant No.4, Sterling Newspapers Limited or the plaintiff or any corporation, firm or concern, directly or indirectly owned or con-trolled by them or associated with them shall not start any English language Newspaper in any State of India other than specified five States and the specified Union Territories for a period of 36 months from the date hereof. Further ordered that if, after the expiry of the said period of 36 months, defendant No.3, New Indian Express Newspapers (Madurai) Limited, defendant No.4, Sterling Newspapers Limited or the plaintiff do start an English language newspaper in any State of India other than the said five States and the said Union Territories the same shall be subject to the further condition that it shall not bear the name of ?New Indian Express? or ?Indian Express? or any name including the word Indian or Express or its derivatives, and that, none of them shall start any Indian Language Newspaper which is in way in conflict or competition with the language newspapers presently owned by defendant No.6, defendant No.2, defendant No.5, defendant No.l, Bharatkatha Offset Private Limited, or Bharatkatha Publications Private Limited in their respective territories. This prohibition shall not apply to periodicals (magazines, weeklies etc.)


29. Ordered and decreed that defendant No.6, defendant No.2, defendant No.5, defendant No.1, or Bharatkatha Offset Private Limited/ Bharatkatha Publications Private Limited or any Corporation, firm or concern owned or controlled by them or associated with them shall not start any English language Newspaper in any of the said five states and the said Union territories for a period of 36 months from the date hereof. Further ordered that if they do start any English language Newspaper thereafter, it shall not bear the name of Indian Express or any name including the word Indian Express or any name including the word Indian Express or its derivatives (but this limitation shall not apply to the daily "The Financial Express" and the periodicals listed in the Schedule C) and that none of them shall start any Indian language newspaper which is in anyway in conflict with the language newspapers presently owned by plaintiff/ defendant No.3/ defendant No.4 or Sterling Newspapers Limited or any Malayalam Newspaper in the said five states and the said Union territories. This prohibition shall not apply to periodicals (magazines, weeklies etc.).


30. In consideration of the restraint against competition and obligations accepted hereinabove particularly in respect of most parts of India save the specified five states and the specified Union territories which are over and above the counter obligations provided for hereinabove, ordered and decreed that defendant No.2 do pay defendant No.3 a non-competing and forbearance capital fee of Rs.56 crores as under:

(a) for the forbearance accepted by defendant No.3 not to start an English Newspaper within 36 months, Rs.6 crores.


(b) for the balance forbearances accepted Rs.50 crores.


31. Agreed and declared that the non-competing fee of Rs.56 crores has been determined by Mr.R.V. Pandit (by valuing the restraints and forbearances) on the dispute regarding the amount of non-competitive fee payable and the terms of such payments and the security thereof being referred to him by defendant No.6 and the plaintiff on behalf of, defendant No.2 and defendant No.3 which reference has been ratified by the Board of Directors of the respective companies.


32. Ordered and decreed that the said fee be paid as under:


(i) A sum of Rs.22.00 crores (Rupees twenty-two crores only) subject to adjustment as mentioned in sub-clause (iii) herein below shall be paid by defendant No.2 to defendant No.3 by 22nd February, 1995 or on the passing of this consent decree, whichever is later. In the latter event, the cheque for the said amount subject to adjustment as above shall be handed over to defendant No.3 upon the passing of the consent decree,

(ii) The balance shall be paid as under,

(a) Rs.6 crores within 45 days of the first payment.

(b) Rs.8 crores within 7 months of the first payment.

(c) Rs.6 crores within 13 months of the first payment.

(d) Rs.6 crores within 20 months of the first payment.

(e) The balance i.e., Rs.8.00 crores within 24 months of the first payment.

(iii) Defendant No.2 shall be entitled to adjust the net sums receivable by its under clauses 8 and 10 i.e., to say Rs.202 crores and Rs.5.45 crores aggregating to Rs.7.47 crores against the first payment of Rs.22 crores provided for herein above so that the said first payment will be reduced accordingly.


33. As to interest on the above payments, ordered and decreed,

(a) that for 6 months from the date of the first payment no interest shall be payable;

(b) that on the balance outstanding, the interest at the rate of 15% per annum, shall be payable from the beginning of the 7th month till the payment of the last instalment;

(c) each instalment will be paid paid along with the interest accrued upto the date of the instalment;

(d) in the case of any default in payment of any of the payments referred to in this clause, the principal amount in default shall carry interest at the rate of 18% per annum upto the date of payment and not at the lower rate mentioned herein above.


34. Agreed and declared that the defendant No.3 also referred to Mr.R.V. Pandit for his direction that defendant No.2 should secure the amount payable by them referred to above.


"As per the direction of Mr.R.V. Pandit, the payments provided for hereinabove have been secured by a third equitable charge on the building "Express Towers" (subject to the prior charges in favour of SBI and Citi Bank) and second equitable charge on the air-conditioning plant in Express Towers and on the income from both of them. If for any reason the above charges cannot be created the following shall apply;

If any portion of the premises at Express Towers, Bombay is let out after the consent decree, and any amount is received by way of rentals or deposits or any amount is borrowed against the new rentals, such rentals, deposits or borrowed amount shall stand charged in favour of defendant No.3 and, shall be deposited in the special

bank account to be operated by Mr.R.V. Pandit mentioned for the specific purpose of ensuring payment of instalments mentioned hereinabove. Mr.Pandit is authorised to enforce this charge and modify this condition as he deems fit to remove any difficulties in its enforcement.?


35. Agreed, declared and confirmed that the above mentioned provisions conferring obligations and and restraints are valid and reasonable and do not amount to restraint of trade or business and that the same may be enforced by way of declaratory and injunctory proceedings in case any person or party commits a breach thereof.


36. Ordered and decreed that any tax liabilities in respect of the payments under this clause shall be borne and be payable by defendant No.3 and that defendant No.3 shall indemnify and keep defendant No.2 indemnified against any claims or demand;; that may be made against defendant No.2 Additionally Mr.R.V.Pandit is authorised to direct the non-payment or withholding of the last instalment set out hereinabove in case any demand for tax is made against defendant No.2 in respect of the payment hereinabove.


37. Ordered and declared that defendant No,6/ defendant No.2/ defendant No.6/ defendant No. 1 to pay and settle all outstanding not intercorporate balance; both current account and book debts -due to defendant No.3/ defendant No.4/ Sterling Newspapers Limited (other than the All India Ad. Revenue bills outstanding and not so far recovered from parties) on or before 31.3.95 and the advertisement dues as and when recovered from the advertising agencies shall be paid by defendant No.2 as if the same were trust monies to defendant No.3/ defendant No.4/ Sterling Newspapers Limited?. Ordered that all monies due from defendant No.5 to defendant No.3 shall be guaranteed by defendant No.2. The plaintiff/ defendant No.3/ defendant No.2. The plaintiff/ defendant No.3/ defendant No.4/ Sterling Newspapers Limited undertake to pay and settle all outstanding not balances both current account and book debts due to defendant No.6/ defendant No.l/ defendant No.3/ defendant No.5 on or before 31.3.95. The undertaking is accepted.


38. Ordered and decreed that defendant No. 14 is entitled to 1/3rd of the estate of Shri R.N.Goenka excluding shares in defendant No. 1 referred to in clauses 1 and 2 above and that the plaintiff and defendant No.14 do jointly and severally make payment for the liabilities of the estate of Shri R.N. Goenkato the extent of 37% of such liabilities as reduced by the value of all the assets of the estate, whenever such liabilities arise, irrespective of whether a consent decree is passed or not.


39. Agreed and declared that defendant No.6 was lawfully adopted by Shri R.N.Goenka as his son.


40. Ordered and decreed that the plaintiff/defendant No.3/ defendant No.4/ Sterling Newspapers Limited do secure the release of defendant No.6 and defendant No.2 in respect of all guarantees and securities given by them on behalf of defendant No.3/defendant No.4/ Sterling Newspapers Limited to State Bank of India or any other party in respect of any liability or obligation of defendant No.3/ defendant No.4/ Sterling Newspapers Limited. Ordered and decreed that defendant No.6/ defendant No.2/ defendant No.5 do secure the release of the plaintiff/ defendant No.3/ defendant No.4/ Sterling Newspapers Limited from all guarantees and securites given by them on behalf of defendant No.2/ defendant No.5. Till such release takes place defendant No.3/. The plaintiff shall counter guarantee defendant No.2/ defendant No.6 and in return defendant No.6 and defendant No.2 shall counter guarantee the plaintiff/ defendant No.3 against any liability arising on the continuance of the guarantees and securities originally given.


41. Ordered and decreed that all machineries/ equipments (other than the Harris Offset machines of defendant No.2 used by defendant No.3 on lease from one company to another within the group do stand transferred to the lessee company at the book value as on 31.12.1994. Ordered that the issue concerning Chemco Equipment lying in defendant No.3 centres shall be decided by Mr.R.V.Pandit. Ordered that.


(i) The three Harris Machines shall continue to be used by defendant No.3 (New Indian Express Newspapers (Madurai) Limited) until 31.3.1997 on payment of Rs.150 lakhs per annum by defendant No.3.

(ii) Defendant No.3 (New Indian Express Newspapers (Madurai) Limited) shall reimburse to defendant No.2 the insurance to charges for insurance cover of the said machines for ?All risks?.

(iii) The repair and allowance costs during this period will be borne by defendant No.3, and

(iv) After 31.3.1997 the equipment will be returned to defendant No.2.


42. Ordered that the three positions of the present Indian Express Group in the Executive Committee, of the Indian Newspaper Society (INS) shall be divided between defendant No.2/ defendant No.5 and defendant No.3/defendant No.4 alloting 2 to defendant No.2/ defendant No.5 and ! to defendant No.3/ defendant No.4.


43. Ordered that the supervision and control of the B.D.Goenka Foundation shall vest in the plaintiff and that of Shri R.N. Goenka Foundation shall vest in defendant No.6. The Biography project of Late Shri R.N.Goenka will form part of the R.N.Goenka Foundation.


44. Ordered that if, in future, the plaintiff/ defendant No.3/ defendant No.4/ Sterling Newspapers Limited decide to sell any publications or companies (other than defendant No.4. The Telugu Publications defendant No.1, Bharatkatha Offset Private Limited/ Bharatkatha Publications Private Limited shall have the pre-emptive right to buy the same at the value determined by aggregating the annual profits of the publications/or companies for the previous three financial years. Likewise, if defendant No.8/ defendant No.2/ defendant No.5/ defendant No.1/Bharatkatha Offset Private Limited/ Bharatkatha Publications Private Limited decide to sell any publications or companies (other than defendant No.5 or the Gujarathi Publications) the plaintiff/ defendant No.3/defendant No.4/Sterling Newspapers Limited shall have the pre-emptive right to buy the same at the value determined by aggregating the annual profits of the publications or companies for the three previous financial years.


45. Agreed and declared that defendant No.5 the plaintiff defendant No.14, defendant No.1, defendant No.2, defendant No.3, defendant No.4, defendant No.5, Bharatkatha Offset Private Limited, Bharatkatha Publications Private Limited, Sterling Newspapers Limited and all affirming parties have accepted the above settlements as a fair, just and equitable corporate-cum- family settlement. Further ordered that apart from defendant No.5, the plaintiff and defendant No. 14, the companies are also expressly bound hereby in recognition whereof the Board of Directors of the group companies will be requested to approve, ratify and confirm this settlement.


46. Agreed and declared that the plaintiff hereby unconditionally withdraws all allegations made by him against defendant No.6, defendant No.7, defendant No.8 and others and defendant No.6 hereby withdraws the allegations made against the plaintiff and his family.


47. Agreed and declared that defendant No.6 shall withdraw the Special Leave Petition pending before the Supreme Court and the plaintiff shall withdraw his reply thereto.


48. Agreed and ordered that the plaintiff and defendant No. 14 do hereby cease to be the directors of defendant No. 1 and in addition the plaintiff do hereby cease to be the director of defendant No.2, defendant No.5, Bharatkatha Offset Private limited and Bharatkatha Publications Private Limited, defendant No.6 hereby cease to be director of the defendant No.3,defendant No.4 and Sterling Newspapers Limited.


49. Ordered that the plaintiff do hereby consent to the alteration of the Articles of Association of defendant No.l so as to delete all references to him or to any purported rights in his favour thereunder as well as by other alteration as desired by defendant No.8.


50. Agreed and ordered that in relation to the proceedings filed by Mrs.Saroj Goenka and her daughters asserting various claims in relation to the shares of defendant No.

1 and the companies, both defendant No.6 and the plaintiff shall make joint efforts to settle with the said persons. In the event of any settlement between Mrs. Saroj Goenka and her daughters with defendant No.6, the plaintiff, defendant No.14, defendant No.3,defendant No.2, and defendant No.l, it shall be dealt with as under:


(a) The plaintiff/ defendant No.3 shall be responsible for setting the disputes relating to the lease between defendant No.3 and Express Newspapers Limited in respect of the Express Estates at Madras. Details of the litigation pending in this behalf are set out in Schedule hereto;

(b) Defendant No.6/ defendant No.2/ shall be responsible for the settlement of the lease between defendant No.2 and Express Newspapers Limited (ENL) in respect of the Sassoon Dock Building at Bombay and the Express Building at New Delhi;

(c) Any other costs, claims or payments required to be made shall be borne by defendant No.6/ defendant No.2/defendant No.l/defendant No.5 on the one hand and by the plaintiff/ defendant No.3/ defendant No.4 on the other in the ratio of63:37.


51. Agreed and ordered that in relation to other litigations pending in relation to the Express Group in Hyderabad, Madras as well as in Bombay defendan:No.6, the plaintiff and defendant No.l4 shall jointly defend the same in co-operation with one another.


52. Ordered that in respect of the said or any other suit or claim the cost of defending or settling the same or any claim thereafter (as reduced by the share borne by Mrs.Saroj Goenka and Express Newspapers Limited) shall be shared between defendant No.6/defendant No.2/defendant No.1/ defendant No.5 on the one hand and the plaintiff/ defendant No.3/ defendant No.4 on the other in the ratio of 63:37.


53. Ordered that this decree shall be binding on not merely defendant No.6, the plaintiff, defendant No 14, defendant No.1 defendant No.2, defendant No.3,defendantNo.4,defendantNo.5, Sterling Newspapers Limited, Bharatkatha Offset Private Limited and Bharatkatha Publications Private Limited, but also on their heirs, successors, legal representatives, assigns, liquidators, receivers, and successors-in -interest as the case may be End wherever the said parties have been referred to in this memorandum it shall be deemed to include their heirs successors, legal representatives, assigns, liquidators, receivers and successors-in -interest as the case may be.


54. If any dispute arises in relation to the interpretation of these terms, or in the implementation thereof or in the working out of the interim arrangement hereunder, the same shall be referred tc Mr.R.V. Pandit as the sole arbitrator, whose decision shall be final and binding. Mr.R.V. Pandit shall have summary powers and shall not be required to give any reasons for his decision. He shall be entitled to hear either party in the absence of the other. It is expressly made clear that the reference is to Mr.R.V. Pandit personally having regard to his personal position, integrity and standing. The consent decree shall incorporate the provisions of this clause. In the event of Mr.R.V. Pandit being incapacitated and therefore, unable to act, the parties hereto agree that defendant No.12 shall not as the sole arbitrator in the place of Mr.Pandit.


55. It has been expressly agreed between the parties that if any difficulty arises in executing or implementing any terms agreed to between the parties, Mr.R.V. Pandit shall have the absolute authority to make such provisions for removing the difficulty experienced as he may deem fit.


56. Agreed and declared that this settlement and the amounts payable thereunder have been worked out by mutual settlement after due diligence by all parties including the plaintiff, defendant No.4 and upon them obtaining all necessary information as desired by them and they shall not be entitled to call into question or raise any dispute in relation to any matter of valuation or compensation whatsoever. The sums payable hereinabove represent full and final payment and the plaintiff, defendant No. 14, defendant No.3, New Indian Express Newspapers (Madurai) Limited, defendant No.4 and Sterling Newspapers Limited do not have and will not be entitled to raise and/or make any claim on defendant No.6, defendant No.l, defendant No.2, defendant No.5, Bharatkatha Publications Private Limited, or Bharatkatha Offset Private Limited, save as otherwise provided herein.


57. Agreed and declared that this settlement is a composite settlement and no part of it is severable from the other.


58. Ordered that Suit Nos. 1246 of 1992 and 1247 of 1992 be disposed of in terms of the decree passed as above.


59. It was primarily for the reason of the statements in paragraph 9 of the above, we felt concerned that some shares of the first defendant in which Anil Kumar Sonthalia may have interest are appropriated in the manner that the plaintiff has withdrawn his claim that the shares which stood in the joint names of the plaintiff and the 6th defendant were in trust for Anil Kumar Sonthalia and the interest of 6th defendant against all or any claim that may be made by Anil Kumar Sonthalia having regard to the aforesaid allegations or any other whatever in relation to the said shares is indemnified by the plaintiff in accordance with the adjustments as are reflected in the memorandum of settlement. Thus the 6th defendant is made absolute owner of the said shares. We decided for the said reason to see whether there is a chance of the plaintiff and the 6th defendant together conniving and appropriating the interests of Anil Kumar Sonthalia and whether he is capable of protecting his own interest and suing, if necessary, for his rights the first defendant, the plaintiff and the 6th defendant and whether there is anyone else who can protect his interests as his friend. With the able

assistance at the Bar, amicus curiae of Mr.Gopal Rathanam, learned senior Advocate- we decided before any enquiry as: contemplated under Rule 15 of 0.32 of the code of Civil Procedure to summon under the court?s notice Anil Kumar Sonthalia as well us his wife as his next friend Both Anil Kumar Sonthalia and his wife appeared in person in court. But. the wife alone entered appearance and has filed an affidavit stating inter alia as follows:


?I am told, my husband?s younger brother Shri Manoj Kumar Sonthaha filed a Suit No.1247 of 1992 in the Hon?ble High Court at Madras. My husband is not a party to the suit. In paragraph i 1 of the plaint it is stated as under:


?The plaintiff submit that the shares retained by RNG to the extent of 24.32% were only due to the fact (hat Shri Anil Kumar Sontnab-i. the eider brother of the plaintiff. was mentally retarded and hence RNG desired to retain the shares with him till a suitable arrangement was made to give the benefit of the shares to the said Mr.Anil Kumar Sonthalia ..?


.... During this journey, it was agreed by all three that the 24.329}-. shares retained by RNG intended for the benefit of Anil Kumar Sonthaha would be divided equally and kept in the joint names of the plaintiff and Vivek Khaitan purely as in interim measure...

?...The late RNG ensured that 24,32% shares were held by his two grandsons ultimately for the benefit of his third grandson, namely, the elder brother -of the plaintiff herein. This was purely an interim arrangement till formal arrangements were made to secure that they were firmly given for A.K. Sonthalia?s benefit or directly to A.K, Sonthalts?s sons ...?


".... The plaintiff submits that the two sets of shares of 12.16% each were held by the plaintiff and Vivek Khaitan as trustees and in a fiduciary capacity for and on behalf of Anil Kumar Sonthalia ... ?


In page 29 of the above suit it is stated,?


...Thus by a secret end surreptitious design, Vivek Khaitan and Wadia usurped and misappropriated, by fraud and breach of trust. the shareholdings and property rights of the plaintiff, including the shares of Anil Sonthalia. the men tally retarded brother of the plaintiff, who cannot look after his affairs. Vivek Khaitan has also retained and misappropriated as his own. the balance of 12.16% of the Equity Shares kept in the joint named of himself and the plaintiff for the benefit of Anil Sonthalia?.


?..Thus Vivek Khaitan and Wadia have robbed the plaintiff and A.K. Sonthalia of their proprietary and property rights in NPBS and Indian Express to the Extent of 49.28%... ?


?There are also references about my husband in page 49 of the suit. In page 57, it is stated as under: for a further declaration Nos.19,001 to 20,000 and 1 to 40 and 22.001 to 25,000 and 41 to 60 and 101 to 120 held in the joint names of the plaintiff and Vivek Khaitan are held in trust for and on behalf of Shri Anil Kumar Sonthalia".


"From the above it is clear that my husband? grandfather meant 6.080 equity shares in the Nariman Point Company - the apex and ultimate holding Company which controls the entire Indian Express Group".


"I state that it is apparent from the above that the original suit filed by Shri Manoj Kumar Sonthalia was inter alia to protect the interests of my husband. But however by the memo of compromise dated 5.2.1995 my husband?s own interest are given a go-by by Shri Manoj Kumar Sonthalia. He was totally discord my husband?s right and has completely deprived my husband of any interest in the properties covered by the said compromise document filed and approved sought from this Hon?ble Court is a clear case of fraud, and against the interest of my husband. I slate that for their own interest, the plaintiff and the 6th defendant, have entered into a compromise and colluded together to deteriment of my husband?s interest and the same should not be recorded by this Hon?ble Court".


"I state my husband Shri Anil Kumar Sonthalia and I were threatened by Mr.Manoj Kumar Sonthalia in Bombay on 25.2.1995 that we should sign some documents which we. refused. He threatened us that even the meager emoluments that we get from ECB would be stopped if we refused to act the way in which he wanted us to do".


"I state that my husband is the eldest grandson of Shri Ramnath Goenka and if he is treated in this fashion one can understand as to what extent the plaintiff and the 6th respondent will go to grab the entire empire built by Shri Ramnathji to themselves, i also understand that for their nefarious activities they were/ are creating many fictitious documents. If the compromise is recorded and seal of approval is granted by this Hon?ble Court, the plaintiff- Manoj Kumar Sonthalia will abandon the suit once for all and there will be nothing left for my husband?.


"I state that the stand taken by Shri Manoj Kumar Sonthalia in para 6 of the compromise memo dated 5.:. 1995 is a total sell out of my husband?s rights and interest. The averment that the claim was mace without reference to my husband and that my husband never made or stressed his claim, was false.?


"In fact when Shri Manoj Kumar Sonthalia filed the suit he told us that he was taking care of our interests and that was why we did not independently made any effort to seek our rights/ interest title. All the time he was promising that he would protect our interest. But however he kept us entirely in dark about the parley to strike a deal with 6th respondent totally excluding my husband and his rights, interest and title?.


? I therefore, pray that this Hon?ble Court in the interest of justice and fairly reject the compromise memo and also protect the interest of my husband Shri Anil Kumar Sonthalia and render justice?.


60. The wife of Anil Kumar Sonthalia thus, has suggested that the plaint statement with respect to her husband?s interest was/is acceptance of the arrangement set apart for Anil Kumar Sonthalia by RNG and the plaintiff and the 6th defendant are not fair when they have settled in themselves and divided all assets of the newspaper publications including the shares in the first defendant- company. It is obvious, however, that the adjustments arrived at in terms memorandum of settlement between the plaintiff, the 6th defendant and the 14th defendant are without the consent of Anil Kumar Sonthalia or any person representing him and thus, even its acceptance by the court and the following consent decree in terms of the memorandum of settlement shall not be binding upon Anil Kumar Sonihalia or any person claiming through him. Mr.Pal, learned counsel, in course of arguments, has drawn our attention to the decision of Supreme Court in Subba Rao v. Jagannadha Rao, A.I.R. 1967 S.C. 591, in which while dealing with a question cor cerning a compromise decree, the court has observed as follows:


"Is a compromise decree is not a decision by the court. It is the acceptance by the court. It is the acceptance by the court of something to which the parties had agreed. A compromise decree merely set the seal of the court on the agreement of the parties. The court does not decide anything. Nor can it be said that a decision of the court was implicit in it. Only a decision by the court can be res judicata whether statutory under Sec, 11, C.P. Code or constructive as a matter of the public policy on which the entire doctrine rests. Such a decree cannot strictly be regarded as a decision on a matter which was heard and finally decided and cannot operate as res judicata?.


?Such a decree might create an estoppel by conduct between the parties, but such an estoppel must be specificially pleaded?.


The same principle is reiterated in Baldcvdas v. Filmistan Distributors, A.I.R. 1970 S. C. 406. A Bench of this Court in P.R. Nallathambi v. V.Raghavan, A.l.R. 1973 Mad. 25 has said that a compromise decree brought about by a managing member of a joint family representing the junior members operators as res judicata but not if there is any fraud or collusion and the managing member has acted without bona fide and not in good faith and added that the compromise affected by the managing member in order to be binding on the junior members must be bona fide and for the benefit of the family as a whole and the managing member cannot relinquish substantial right of the members of the family. It has pronounced that one whose interests would be effected by the result of the litigation, would be entitled to come on record to protect his interests, when those interests are jeopardised by the persons already on record. A consent decree is not appealable under the Code of Civil Procedure (see Sec.96(3)). 0.33, Rule 3 of the Code, however, makes it clear that only a lawful agreement or compromise can satisfy the Court for passing a decree in accordance therewith and only insofar as it relates to the parties to the suit, whether or not the subject matter of the agreement, compromise or settlement is the same as the subject matter of the suit. If it is not a lawful agreement or compromise between all the parties and only some of them have chosen to compromise those who are not parties to the compromise cannot suffer any decree in accordance therewith. The introduction of Rule 3-A that no suit shall lie to set aside the decree on the ground that the compromise on which the decree is passed was not lawful, leaves open to challenge in appeal the compromise decree, which is void or voidable under the Indian Contract Act. 1872 and does not bar institution of a suit by a person who is not a party to the suit or a person who is a party to the suit. but has not entered into the agreement or the compromise. The Supreme Court in S.P. Chengalvaraya Naidu v. Jagannath. (1994)1 S.C.C. 1, has said that a judgment or decree obtained by fraud is to be treated as a nullity and can be questioned even in collateral proceedings. A Bench of Seven Judges of the Supreme Court in A.R. Antulay v. R.S. Nayak, A.I R. 1988 S.C. 1531 has pointed out that no man is above the law, but at the same time no man can be denied his rights under the consitution and the laws, and no man should suffer a wrong by technical and procedure irregularities.


?Rules of procedures are the hand-maids of jus-lice and not the mistress of justice, ex debito justitiae, the court must do justice to him?.


61. We cannot, for the said reason, brush aside the interests of Anil Kumar Sonthalia and leave him to his fate to sue in future or to the wisdom of his next friend, if he is actually mentally retarded, to decide what to do to protect his interests in accordance with law. The tesk, we felt, was/is not easy. If parties to the compromise are not allowed to give effect to (he memorandum of settlement, which otherwise is not found to have anything unlawful and in which there is a solution of the disputes and differences betwen the plaintiff and the 6th defendant, multiple litigation presently going on between the parties shall continue and the situation which is already complex may affect the publications of quite a few English and other language newspapers and magazines. If something specific is not said about Anil Kumar Sonthalia?s interests, the plaintiff and the 6th defendant appear to happily appropriate what may finally be found belonging to him (Anil Kumar Sonthalia). Since Anil Kumar Sonthalia?s wife has responded to our notice and Anil Kumar Sonthalia is also under notice of the court, they are fully informed about what has transpired between the plaintiff and the 6th defendant and if actually there is any basis for a claim on behalf of Anil Kumar Sonthalia it is time for them to take appropriate action in accordance with law. We have noticed, however, that ail who can claim some interest as heirs and legal representatives of RNG. has been deriving substantial!) income from the proper ties created by RNG. and/or by Companies upon which RNG. had control. Even Mrs. Saroj Goenka, who has not been holding any share in the first defendant- holding company, has been present as a Director in the second defendant- company and has been drawing huge salary in the said capacity. She has been, it is stated, benefited by the transfer of substantial immovable and movable properties in her favour-in the life time of RNG. for her benefit and for the benefit of her children. Anil Kumar Sonthlia is provided, we have already noticed, with a meagre income, which is not enough even for a lower middle class household expenses when it is known that he has a wife and two school going children. We have been, however, saved of any further exercise to secure for Anil Kumar Sonthalia reasonable provisions for him until such time a proper claim on his behalf, is raised in accordance with law and adjudicated. Reasonable provisions, in our view will be the income which the other/ heirs/ legal representatives of RNG. have been deriving. Mr.Dattar, learned Counsel for the plaintiff and Mr.Ram Jethmalani and Mr.Arun Jatley, learned counsel for the 6th defendant and the 7th defendnt have come forward with a proposal and the plaintiff has accordingly filed an undertaking by way of an affidavit and the 6th defendant has joined him, which is as follows:


?Additionally, as far as Anil Kumar Sonthalia is concerned, I, Manoj Kumar Sonthalia, speaking for myself, wish to draw attention to Clause 6 of the Memorandum of settlement and of the consent terms. In any event, I categorically wish to state that I am fully conscious that my brother Anil Kumar Sonthalia is capable of holdling a complicated business and requires a regular income. In this connection, I have undertaken to set up a trust in my brother?s favour with a corpus of Rs.One crore. This is totally in line with the wishes of my grandfather Mr.Ramnath Goenka? which I could ascertain only in the course of the settlement talks from Mr.Nusli Wadia, Mr.Venu Srinivasan and Mr.S.Gurumurthy to whom Mr.Ramnath Goenka has expressed his desire. This assurance that I would create a trust has been given by me to my mother and to respondent No.6 and I repeat this in the form of an undertaking to this Hon?ble Court. I wish to point out to this Hon?ble Court that Mrs.Goenka?s alleged concern for Anil Kumar Sonthalia is not even skin deep. Even though clearly she has no locus in the matter and has never referred to Anil kumar Sonthalia?s alleged claims anywhere, she is now raising this point only with a view to put a spike in the wheal of settlement and I respectfully submit thai this Hon?ble Court should not permit her to do so?.


? as to the alleged claim made on behalf of Anil Kumar Sonthalia, I, respondent No.6, speaking for myself say that the claim is false. In this connection, I repeat and reiterate what has been stated by me in these proceedings earlier. In any case I say that the plaintiff has undertaken to provide for Anil Kumar Sonthalia and he has reiterated his in the affidavit filed by him".


62. In course of the hearing, it has been sufficiently indicated and accordingly it is agreed at the Bar that a benefit trust to benefit Anil Kumar Sonthalia shall be created with the initial corpus of Rs.1,000 and a contribution of Rupees one crore shall be made to the said trust by he plaintiff- Manoj Kumar Sonthalia within one week from today by handing over the said amount in a sum of Rupees one crore to one of the trustees Mr.N.Ram, Editior, Frontline, who along with the other trustee Mr.N.R. Chandran, Senior Advocate, shall forthwith ensure payment of sufficient money to Anil Kumar Sonthalia so that all his financial requirements are met within a fortnight of the receipt of the said amount. Mr.Ram and Mr.N.R. Chandran shall jointly act as trustees and shall continue in the said capacity until demise or incapacitated for any reason to discharge the duties. In the event of any one of them not available for the reason above to continue to function as a trustee, the surviv-ing trustee may nominate in consultation with Anil Kumar Sonthalia and his wife any other person in his place and the new trustee shall have the same capacity as the demised trustee for life after such nomination. The trustee shall devise means and methods for the discharge of the obligations and ensure thaat Anil Kumar Sonthalia and his dependents are given fall benefit of the trust. Since they have volunteered their services, they shall, however receive no remuneration and shall appropriate only such amount of cost which they actually incur in maintaining and managing the trust The plaintiff has categorically stated and it is so understood by all concerned including the 6th defendant that the contribution in the trust created for the benefit of Anil Kumar Sonthalia is withnout prejudice to any claim which he may have in the assets including the shares of the first defendant-company and he or his next friend shall be free to take all such actions as are permissible in law to establish his such claims. Since this arrangement is, in our opinion, the one which shall provide to Anil Kumar Sonthalia, a reasonable income e are inclined to sanction it and order accordingly that the trustees shall deliver to Anil Kumar Sonthalaia and his dependents the proceeds of the investment of the said amount of rupees one crore in accordance with a scheme that they may settle for him and his dependents. The trustees shall invest the said sum of Rupees one crore in such a manner that the income is on an average of not less than rupees one lakh per month.


63. The above being added as a condition, the settlement, in our view, shall take care of the interests of Anil Kumar Sonthalia and bring together the warring parties, that is. the plaintiff and the 6th defendant.


64. Some concern of public interest, however, has been introduced in the course of arguments and Mr.Prasanth Bhooshan, learned counsel has appeared for the interveners, one of them being a working journalist and others who have claimed to be the members of the public and friends of RNG. It is difficult to go by anybody?s claim that he is friend of some one and that in the said capacity has locus to intervent in any proceeding. It is only when someone is a necessary party or proper party to a proceeding, he is alowed to intervene and is added as a party to the proceedings. Who a necessary party ia and who a proper party is, are matters which are no longer in doubt. A stranger to a proceeding however strongly he may be feeling about a certain event and howsoever strongly he may be reacting to a situation, he has no interest or concern in a

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proceeding unless he at best is a proper party. There has been considerable doubt and the judicial pronouncements are not uniform as to whether workmen or employees are necessary parlies in a dispute in which otherwise the management alone is involved. The courts, however, have taken the view that when the Managements decide ?to settle in themselves the affairs of an undertaking or an establishment and while doing so appear to adversely effect the interests of the workmen, workmen do get a locus to intervene. We have accordingly allowed the intervention on behalf of the working journalist Sri Balasundaram Giri, who is employed in one of the subsidiaries of the first defendant, and disallowed the intervention on behalf of Mr.L.C. Jain and others, who do not appear to us even proper parties. 65. Mr.Bhooshan, learned counsel, has expressed apprehension and based his apprehension upon the classification of the newspaper group that as a result and as a consequence of the division in the manner the plaintiff and the 6th defendant have decided to enforce, the journalists and other employees may find themselves re-classified for their wages and in any case after the division, the new management may not continue the same conditions of service of the journalists and other workmen. We have no hesitation in recording that in a compromise or settlement of disputes when public interests are involved, the question of policy arises and the court must see. whether the compromise is opposed to public policy. No examination, however, of this question in any detail is necessary because both the plaintiff and the 6th defendant have filed separate affidavits of undertaking inter aha as follows: "1 further undertake that the division in the Indian Express Group will pot in any manner prejudice employees (both journalists and non-journalisats) of any of the companies establishments/ units, I clarify and undertake" that the terms and conditions of employment of the employees of any of the companies establishments/units, shall not be adversely affected or retrenched on account of the division alone. In fact, the entitlements of the employees are entirely dependent on the classification, as lite classification has not changed on account of the division, the entitlements will also change". ?I further submit that none of the newspaper companies/ establishments/ units will contend that they ate entitled to downward classification only under the Baebwat Wage Board notified by the Government as adjudicated by the Supreme. court merely on account of the division in the Indian Express Group. There will be no change under the terms of the Bachwat Wage Board award as modified by the Supreme Court". 66. We have heard the learned counsel for the parties including the parties who have not entered into compromise and who have not ratified the companies. Opposition to the compromise is based also on the ground mat the division of the assets in a manner that the Express Group of newspapers shall after the compromise function as two Indian Express Groups of newspapers is against the wishes and will of RNG. According to some of them, RNG. had only public interest in his mind when he established the newspapers. They have all chosen to emphasise that the plaintiff and 6th defendant should have respected the trust thai RNG. had expressed in them. Vide, the proceedings of the Board meeting of the first defendant dated 20.9.! 990. Whether their concern is genuine or not. they have canvassed before us that the character of the newspapers run by the late RNG. As a fiercely nationalistic and fighting instrument is likely to change as the Division of the newspaper shall deny to the Indian Express Group of papers a nationalistic approach. Freedom of press, it is understood, is the freedom of speech and expression recognised in the members who constitute the corporate or public association of individuals as well the writer whose views are expressed. There is a stipulation of suspension of the publication by one group in the territory earmarked for the other group and a change in the name by an addition word "New" of the Indian Express published by the third defendant-company. The plaintiff and the 6th defendant have chosen to do so ex-contract and are not threatened by anyone to agree to such terms of change in the name of the newspaper "INDIAN EXPRESS? that will be published after the compromise by the third defendant, as. it is stated, they have been concerned with survival of the publications which are assigned to them under the agreement. It is submitted at the Bar on their behalf that they have chosen a period of three years for not entering into each other?s area of business and to have seperate identity of their publication, so that they may consolidate their business. There has been almost an emotional appeal in the arguments of Mr.Ram Jethmalani that the settlement alone will bring back peace in the establishment and the members of the Board of Directors of the first defendant- company have responded to the observations and concern of the court that the publication of various newspapers and magazines should not be allowed to suffer on account of the persistant and continuous quarrels between the plaintiff and the 6th defendant. All publications, as the compromise shows, will reach the hands of the readers and shall be available as they have been in the past and if the system as envisaged under the settlement works without fault, in which the two groups shall have many combined actions, it it stated, the apprehensions that are expressed by a section of people will prove wrong. We have considered all relevant aspects within the limits permissible for the disposal of a matter with the consent of the parties and under a lawful agreement or compromise. We are satifised that with the additional undertakings as aforementioned to protect the interests of Anil Kumar Sonthalia and the working journalists and employees whio satisfy the definition of ?Workmen? under the Industrial Disputes Act or any other law in this behalf, the compromise is lawful and suffers no legal defect. 67. We have difficulty, however, in accepting in terms of the players before us, that we should give directions to a person, who is not a party to the suit or who is not a party to the settlement or commonise. The parties to the suit, it is obvious, may be asked to accept the compromise and these who have entered into the compromise may be subjected to the court?s decree and those who have not accepted it are left tree to choose the r action in accordance with law. The person who, however, is nowhere in the proceedings before this Court cannot be asked to do a thing because the parties have entrusted him with some job in course of the settlement of the disputes amicably outside of the court and pursuant to such emtrustment to him or her, he/she is required to do ceratin thing. The parties have to take the consequence of such entrustment, which is outside of the court proceedings and the court cannot have any concern with any such entrustment. While ordering therefore, that the compromise is. in order, we modily our judgment in O.S.A. Nos.82 to 88 of 1993 to facilitate the recording of the compromise and accordingly order for recording the compromise in the appeals and consequently to dispose of C.S. Nos.1246 and 1247 of 1992 in so far as the parties to the compromise are concerned in terms of the compromise and rejection of the plaint in C.S. No.1247 of 1992 against the defendants, who are not parties to the compromise but without costs. We clarify that the decree drawn by the court shall not include the prayer for a direction to Mr.R.V. Pandit or to any other person who is not a party to the settlement as well as a party to the suit. Parties to the settlement shall resolve their rights and equities with any such person independently, tor which there is ro order of the court, except in respect of the trust for the benefit of Anil Kumar Sonthalia and the trustees appointed by the court to manage the trust. 68. In the result, the Judgment and order in O.S.A. Nos 82 to 88 of 1993 are modified and substituted by the order following: The memorand jm of Settlement between the appellant- defendant (Manoj Kumar Sonthaslia), 6th defendant- respondent Vivek Goenka) and the 14th defendant- respondent (Mrs.Radha Devi.Sonthalia). as ratified by the other defendants in C.S.No.1246 of 1992 is accepted as lawful and accordingly the said suit is ordered to be disposed of in terms of the compromise subject to. (1) Manoj Kumar Sonthalia forthwith the providing and founding a trust in perpetuity for the benefit of Anil Kumar Sonthalia and his dependants and his heirs and legal representatives in each generation following and contribute a sum of Rupees one crore within one week from to-day (9.3.1995) for the said trust by depositing the said amount within Mr.N.Ram. Bailor. Frontline. (2) Mr.N.Ram. Editor. frontline and Mr.N.R. Chandran, Senior Advocate, who have consented, are appointed as trustees of the said benefit trust for Anil Kumar Sonthalia. They shall, however, receive no remuneration and realise only such amount of actual cost which (hey together or individually incur for the administration of the trust. (3) The trustees shall invest the contribution in the said sum of Rupees one crore to the it List in such a manner that it earns maximum benefit for the trust and shall in no way Adiminish the corpus at any time in terms of value or rupee and shall try to ensure that the income each month is not less than rupees one lakh (4) The trustees snail distribute the benefits to Anil Kumar Sonthalia for expending as required for his and his dependants living decently, education of children and such other expenses which are needed from time to time, meet the Commitments of arrears of rent/ revenue in accordance with law and shall invest the savings so that in case any additional Investment is required for the benefit of the children of Anil Kumar Sonthalia, they may do so. except the matters where they may feel the requirements are extravagant, they will accept the demand of Anil Kumar Sonthalia?s wife Mrs Vcena Devi Sonthalia. (5) Mr.N.Ram and Mr.N R.Chandran shall continue to junction as trustees and shall be jointly responsible for the trust in accordance with law and in case of demise or disqualification otherwise of any one of them, the surviving trustee shall have the right to nominate a person and the nominee shall be the- trustee for life accordingly: (6) The trustees shall be free to decide the modes and methods of administering the trust and shall in the matter of joint administration of the trust be not under the control or direction of any one of the parties to the proceeding or any other persons. (7) The plaintiff and the 6th defendant shall abide by their undertaking and shall not accordingly deny to working journalists and workmen the benefit of conditions of service including emoluments which they are presently having and receiving and shall not retrench them only on the ground of the division in terms of the memorandum of Settlement, except such categories of employees who are under a contract for service or not falling in the class of working journalists or workmen. (8) The terms shall come into effect only after the contribution of Rupees one crore is made by the plaintiff as ordered above. (9) Those who are not parties to the compromise are not bound by the terms and they are free to seek remedy in accordance with law. There will be no order as to costs.
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