M/S CYGNUS MEDICATE PVT. LTD. v. BANK OF MAHARASHTRA & ORS

1. This suit for declaration with consequential relief of permanent and mandatory injunction has been filed by the Plaintiff against the Defendants on the basis of averments that Defendants no.3 and 4 approached Dr. Dinesh Batra (initially Dr. Dinesh Batra, the Plaintiff in the suit, during the course of submission on I.A.17231/2014 the learned counsel for the Plaintiff sought amendment in the memo of parties and M/s. Cygnus Medicate Pvt. Ltd. became the Plaintiff 2014:DHC:5401 through Dr. Dinesh Batra, which is taken on record) to provide management services to run Bensups Hospital belonging to Defendant no.2 Trust. The Plaintiff company and Defendant no.3 on behalf of Defendants no.2 and 4 to 8 entered into a Medical Services Agreement(MSA) dated 22.09.2011 and letter containing terms and conditions under which the Plaintiff was to run the hospital. According to the Plaintiff, Defendant no.2 was entitled to an amount of Rs.20,00,000/- per month or 8% of the gross monthly revenue. The agreement was to run for a period of 18 years at the option of the Plaintiff with a lock-in period of three years. According to the Plaintiff, Bensups Hospital was in disarray. State of affairs of Bensups Hospital as given in para 9 of the plaint are extracted hereunder:

2. According to the Plaintiff, it made great effort in reviving the hospital as a result of which the improvements as stated in para 10 of the Plaint were made.

3. It is the case of the Plaintiff that as per clause 8.[1] and 8.[2] of MSA, Defendants were to provide completion certificate of the hospital which has not been done. As per clause 8.9.1, the Defendants were to ensure filing of Income Tax Returns and to deposit the TDS deducted from the Consultant/Outsourcing Agency, etc. etc.

4. The learned Senior Counsel for the Plaintiff has urged that Defendants no.3 and 4 had previously entered into a MSA dated 13.07.2011 with another company and an MSA dated 22.09.2011 was entered between the Plaintiff and the Defendant no.3 without disclosing the said MSA dated 13.07.2011 entered into by Defendant no.2 with another company. The Plaintiff has urged that some acts of mismanagement, interference with the running of the hospital and siphoning of the revenue from the account of Bensups Hospital, were also used to be done by the Defendants.

5. In the application under Order XXXIX Rules 1 and 2 read with Section 151 CPC, the Plaintiff prays for following interim relief: “It is therefore, respectfully prayed that this Hon’ble Court by means of ex parte ad interim injunction order may be pleased to:

6. The learned Senior Counsel for the Plaintiff, however, presses for prayer (A) at the time of hearing on arguments on the application.

7. The application has been strongly opposed by Mr. R.K. Dhawan, Advocate for Defendants no.2 to 4. It is submitted that the Plaintiff has filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 (the Act) and has obtained certain ex parte orders. It is urged that despite directions by this Court to the learned Additional District Judge to decide the application under Section 9 of the Act expeditiously, it was not done. Ultimately, Defendant no.3 had to file a civil suit CS(OS)292/2013 seeking declaration inter alia that the MSA dated 22.09.2011 was sham, illegal, null and void and was obtained by fraud and misrepresentation and undue influence and coercion by the Defendants in that suit which included the Plaintiff herein and Dr. Dinesh Batra. It is matter of record that an application under Section 8 of the Act was filed in the civil suit which was dismissed by Hon’ble Mr. Justice Jayant Nath by an order dated 09.12.2013. The petition under Section 9 of the Act also came to be dismissed by the learned Additional District Judge by an order dated 07.08.2014.

8. The learned counsel for the Defendants has urged and taken me through the pleadings in CS(OS)282/2013 to urge that Dr. Dinesh Batra was a director in the Plaintiff company as well as in the M/s. Altius Healthcare Pvt. Ltd. and that he fraudulently initially obtained the MSA dated 13.07.2011 between Defendant no.2 and M/s. Altius Healthcare Pvt. Ltd. and subsequently MSA dated 22.09.2011 between Defendant no.3 and the Plaintiff. It is urged that it was because of the fraudulent acts committed by Dr. Dinesh Batra that the President of Defendant no.2 Trust was falsely involved in a criminal case and it was only during pendency of the said criminal case that Defendant no.3 was coerced to enter into the MSA dated 22.09.2011. It is urged that the fraudulent acts committed by Dr. Dinesh Batra have been detailed in para 7 of the plaint in CS(OS) 292/2013. It is also urged by the learned counsel for the Defendants no.2 to 4 that although the Plaintiff during the hearing of an SLP 3129/2014 assured for expeditious disposal of CS(OS) 292/2013, but instead of cooperating in the trial of the earlier said suit has filed this suit seeking interim relief. Learned counsel for Defendants no.2 to 4 urges that the Plaintiff ought to have filed a counter claim in the earlier suit instead of filing this suit.

9. Acts of fraud committed by the Plaintiffs have been mentioned in para 7 of CS(OS) No.292/2013 which led the Court to entertain the suit and dismiss the application under Section 8 of the Arbitration & Conciliation Act.

10. A perusal of MSA reveals that a large number of obligations have been placed upon Defendant no.2 Trust which are to be performed through the trustees. Admittedly, Defendant no.2 Trust on its part has terminated the MSA dated 22.09.2011 by a legal notice dated 07.09.2012. It is to be seen even if the termination of agreement is not in accordance with the terms whether the Plaintiff can still insist on enforcement of the MSA or can only seek damages. In view of this, I am not inclined to grant an interim injunction in favour of the Plaintiff without having the pleadings of the parties on record. CS(OS) 2714/2014 Written statement be filed within 30 days. Rejoinder, if any, within two weeks thereafter. List before the Joint Registrar for completion of pleadings and admission/denial of documents on 25.11.2014.