AHMED ABDULLA AHMED AL GHURAIR (THROUGH THEIR POWER OF ATTORNEY HOLDER MR. BARTHOLOMEW KAMYA) & ANR. versus STAR HEALTH AND ALLIED INSURANCE COMPANY LIMITED & ORS.

Citation: [2018] 13 S.C.R. 670 · Decided: 26-11-2018 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2018] 13  S.C.R.
AHMED ABDULLA AHMED AL GHURAIR (THROUGH THEIR
POWER OF ATTORNEY HOLDER MR. BARTHOLOMEW
KAMYA) & ANR.
v.
STAR HEALTH AND ALLIED INSURANCE COMPANY
LIMITED & ORS.
(Civil Appeal Nos. 9786-9799 of 2018)
NOVEMBER 26, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Jurisdiction: Territorial jurisdiction – Territorial jurisdiction
of High Court to entertain the suit – Plaintiffs-resident nationals of
Dubai, have share holding in defendant No. 2 Company,
incorporated in Dubai – Plaintiffs holding 34% of shares and
defendant Nos. 3,4 and 7 holding 66% shares in the defendant No.
2 Company – Defendant Nos. 3-7 also subscribers to 6.16% share
capital of defendant No. 1/Indian Company – Plaintiffs filed suit
for declaration in the High Court of Madras, as a derivative action
on behalf of defendant No. 2, purportedly to protect and declare
the beneficial interest in the shares available with defendant no. 1
standing in the name of defendant Nos. 3-7 – Single Judge of the
High Court held that the High Court had the jurisdiction to entertain
the suit, however, the Division Bench held that the suit in the High
Court of Madras was not maintainable – On appeal, held: When a
dispute is between the shareholder and the company with respect to
the shares held in another, the mere existence of registered office of
the subsequent company is not a factor to clothe jurisdiction – In
reality, the dispute is between the plaintiffs and defendant nos. 3-7,
all residents of Dubai – Even defendant No. 2 whose beneficial
interest is claimed was incorporated in Dubai – Merely, because
the dispute is about those shares issued by Indian Company, would
not lead to the conclusion that cause of action has arisen in India –
Defendant No. 1 has nothing to do with the dispute – Relief of
declaration sought is that defendant Nos. 3-7 are not the real owners
of such shares and its beneficial owner is defendant No. 2 – Such a
dispute would not bring jurisdiction of Chennai courts simply
because defendant No. 1 has its registered office in Chennai – While
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considering the territorial jurisdiction over a suit initiated to protect
the beneficial interest, the issue qua the existence of such an interest
can only be decided on the condition that the same is amenable to
such a jurisdiction – Defendant no. 2 is not amenable to the
jurisdiction of the Madras High Court – Furthermore, the court in
Dubai would be more convenient forum to decide the dispute between
the parties who are residents of Dubai and which revolves around
defendant no. 2, Company registered in Dubai – Suit – Cause of
action.
Dismissing the appeals, the Court
HELD: 1.1 The High Court rightly held that when a dispute
arose against the company, which issued the shares, then the
situs would be its registered office, however, when the dispute is
between the shareholder and the company with respect to the
shares held in another, the mere existence of registered office of
the subsequent company is not a factor to clothe jurisdiction.
[Para 56][699-G]
1.2 On going through the real dispute between the parties,
which emerges out of the plaintiff as well, it would become
manifest that the dispute between the plaintiffs on the one hand
and Defendant Nos. 3 to 7 on the other hand pertains to the affairs
of the Defendant no. 2 Company and in respect of which cause of
action has not arisen in Chennai and such a dispute has to be
sorted out by the parties between themselves by filing appropriate
proceedings in Dubai, UAE only. [Para 46][698-E-F]
1.3 While making the averments qua the cause of action
and territorial jurisdiction, it becomes apparent that the plaintiffs
got aggrieved by the draft Consolidated Financial Statement of
Defendant No. 11 (which is again a Dubai company and a parent
company) and this statement records deconsolidation of its
account with those of Defendant No. 2. The real dispute, thus, is
whether Defendant Nos. 3 to 7 in whose name shares to the extent
of 6.16% of Indian Company stand, are the real owners or it is
Defendant no. 2 Company which has the beneficial interest in the
said shares. Though, the plaintiffs claim beneficial interest of
Defendant No. 2, Defendant Nos. 3 to 7 deny the same.
Interestingly, even Defendant No. 2 Company, whose beneficial
AHMED ABDULLA AHMED AL GHURAIR v. STAR HEALTH
AND ALLIED INSUR. COMPANY LTD.
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SUPREME COURT REPORTS
[2018] 13  S.C.R.
int
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