Madras High Court: In two appeals filed against the common order of the Single Judge, confirming the order of injunction and dismissing the application to vacate the interim order, the division bench of S.S. Sundar and P.B. Balaji, JJ. has held that there is no prima facie case in favour of the Dr. Subramanian Swamy (respondent) to grant any interim order, as this Court has no jurisdiction to grant anti suit injunction restraining a foreign company from prosecuting the defamation suit in a foreign country.
Dr. Subramanian Swamy (‘Swamy’) held a press conference in New Delhi, to bring out the illegalities in the ‘Aircel-Maxis’ deal. It is the case of the Company (appellant) that several defamatory allegations and remarks were made by Swamy against the Company and its operations in Singapore to impress that the it is a completely illegal Company with the sole intention of defaming the appellant. Alleging that such defamatory statements had caused damage to its reputation and loss of business in Singapore, a defamation suit has been filed by the appellant before the High Court of Singapore.
Thereafter, Swamy filed a contempt petition before the Supreme Court on the ground that filing of suit itself in Singapore is described as an attempt to interfere with or obstruct the administration of justice attracting criminal contempt under Section 2(c) of the Contempt of Courts Act, 1971. The said contempt petition filed by Swamy was dismissed as he failed to establish any nexus between the cases filed by him before the Supreme Court and the appellant.
Thereafter, Swamy filed a suit ( the suit ) saying that the press conference that was called by him was covered by the National television and print media widely and the same cannot give rise to an action for filing a suit in Singapore based on the availability of content on the internet, as he is not responsible for the publication of any content in social media. Further, the institution of suit in Singapore High Court is against the well-established principle ‘Forum Conveniens’
The Single Judge held that High Court of Singapore has no jurisdiction to entertain the defamation suit filed by the appellant. Further, the appellant is acting at the behest of the Holding Company and is only a subsidiary company of an Indian Company, hence, appellant is amenable to the jurisdiction of this Court. Aggrieved by this, the appellant filed the present appeal.
Issues and Analysis:
Whether an anti-suit injunction can be granted against the appellant (Singapore Company) when the appellant is not personally amenable to the jurisdiction of this Court and whether a Singapore Company, being a subsidiary of Indian Company, is amenable to the jurisdiction of this Court?
After placing reliance on Modi Entertainment Network v. W.S.G. Cricket Pte. Ltd., (2003) 4 SCC 341, the Court said that only when the Court is convinced that the Court has personal jurisdiction to reach the person against whom anti-suit injunction is sought, that is, the person is amenable to the personal jurisdiction of the Court, the Court may consider having regard to the convenience of the parties and on satisfying that the proceedings in the other Court are oppressive or vexatious or in a Forum non conveniens, to grant anti-suit injunction.
The Court said that in the present case, the contention of the appellant that it is a foreign company, and it has no place of business or business activities or assets in India, is not disputed, still the Single Judge held that the appellant is amenable to the jurisdiction of this Court.
The Court said that the Single Judge relied upon the judgment in Vodafone International Holdings BV v. Union of India, (2012) 6 SCC 613, and accepted the position that a subsidiary company has got separate legal existence, but observed that the decisive criteria is whether the parent Company’s Management has such steering interference with the subsidiary’s core activities that the subsidiary can no longer be regarded to perform those activities on the authority of its own executive directors.
The Court said that it is well settled that a decision is an authority for what it actually decides and not every observation found therein or what logically flows from the observations made in the judgment. First of all, in the Vodafone case the Court was examining the tax liability , even then , the Supreme Court held that the subsidiary company fully owned by a parent or Holding company does not lose its identity as a separate legal entity and that, it is not just a puppet of a parent company merely because the administration of the company is under the influence of a Holding Company. Further, it was held that the Companies Act in India and all over the world have statutorily recognised subsidiary company as a separate legal entity.
Therefore, the Court held that the Single Judge has erroneously applied an observation of Supreme Court ignoring the principle reiterated in Vodafone case. Further, it was held that the appellant, a foreign company, even though fully owned by an Indian Company is not amenable to the jurisdiction of this Court.
Whether the suit is barred by principles of res judicata in view of the decision of the Supreme Court in the contempt petition filed by Swamy?
The Court said that the contempt petition was filed before the Supreme Court on the allegation that the suit filed in Singapore is filed deliberately to prejudice or to interfere with the Swamy’s zeal to prosecute with vigor and determination of the due course of judicial proceedings pending before the Supreme Court in relation to the 2G Spectrum cases and the Aircel Maxis scam and therefore the suit is filed to interfere and obstruct the administration of justice.
The Court said that no issue was raised, or decision was given in relation to the maintainability of the defamation suit before the High Court of Singapore or the jurisdiction of this Court. Further, except identity of parties, there is no identity in cause of action or similarity in the prayers to apply the principle of res judicata.
Thus, the Court held that the decision of the Supreme Court in the contempt petition filed by the Swamy will not operate as res judicata to bar the defamation suit.
Whether the Court can refuse to grant an ad-interim injunction on the ground of laches?
The Court said that the doctrine of laches or delay is considered as a lapse or negligence to do something which a man of prudence is obliged to do. Swamy has three years to file a suit for declaration and consequential injunction from the date of cause of action.
As per the Court only in a case where the willful negligence of one party in approaching the Court is proved to have caused some irreparable damage or an injury to the other side or such unexplained delay is likely to affect the interest of third parties, a delay can be cited as a reason to non-suit the plaintiff on the ground that the plaintiff has waived his right to seek remedy.
Thus, the Court said that as the appellant has not pleaded in any special circumstances, that would disentitle Swamy to file the suit. Further, it said that, though the suit for declaration and injunction falls under Specific Relief Act and the Court has discretionary power, that alone may not justify it to throw the suit on the ground of laches.
Whether Swamy is entitled to the declaratory relief sought in the suit, and Whether Swamy has satisfied the requirements for grant of anti-suit injunction in the facts of this case?
The Court said that every declaratory relief falls under Section 34 of the Specific Relief Act and the Court may at its discretion grant declaratory relief if a person is entitled. However, the person should prove his right. When the suit is held to be not maintainable as against the appellant who is not amenable to the jurisdiction of this Court, there cannot be a declaratory relief which is in the nature of anti-suit injunction. Thus, it was held that, as Swamy is not entitled to an anti-suit injunction against the appellant who is not amenable to the personal jurisdiction of this Court, the declaratory relief is also unsustainable.
[Advantage Strategic Consulting Singapore Private Limited v .Dr. Subramanian Swamy, 2023 SCC OnLine Mad 2797, decided on 18-04-2023]