PRASHANT RAJ Vs. ARUNABH KUMAR AND 2 ORS

JUDGEMENT

(1.) Heard learned Counsel for the parties. This notice of motion is taken out under Order 7 Rule 11 of the Code of Civil Procedure. It is the case of the Applicant (Original Defendant No.1) that the plaint as it stands does not make out any cause of action and that accordingly the plaint must be rejected.

(2.) The Plaintiff has come to the Court with a case of an oral agreement of 20 September 2012 , under which Defendant No.1 agreed to remunerate the Plaintiff for professional services rendered by him since May 2012, by (i) allotment of 4% Class A Shares (Nondilutable) in the proposed company to be incorporated by Defendant No.1, which would act as an umbrella company for the entire media business of Defendant No.2, (ii) payment of producer's fee of 7.5% on all paid projects of the company and (iii) a sum of Rs. 30 lakhs per annum as salary from October 2012 onwards with an option to convert the same into equity. The Plaintiff's case is that he accepted and acted upon this oral agreement, which was in fact said to be a novation of an earlier agreement arrived at between the parties in May, 2012, whereunder the Plaintiff had agreed to work as an advisor of the company for only a 1% share in exchange for the remuneration indicated therein. The Plaintiff seeks specific performance of this oral agreement by issuance of shares and payment of producer's fee and salary. In the alternative, the Plaintiff prays for compensatory damages for nonperformance of the agreement.

(3.) The present application for rejection of plaint is on the footing that it is the Plaintiff's own case that the original oral agreement of 20 September 2012 was substituted and novated later. It is submitted that the Plaintiff's averments in paragraphs 4(n), 4(u), 4(z) and 4(bb) of his plaint imply that there were further agreements between the parties, by which the original bargain of 20 September 2012 was given a gobye and substituted by new bargain/bargains. Learned Counsel for the Applicant/Defendant No.1 relies on the Supreme Court judgments in the cases of T. Arivandandam vs. T.V.Satyapal, (1977) 4 SCC 467 and I.T.C. Limited vs. Debts Recovery Appellate Tribunal, (1998) 2 SCC 70, in support of his submissions. Learned Counsel submits that, as observed in these judgments, on a meaningful, as opposed to a formal, reading of a plaint, if a clear right to sue is not disclosed, the Court is bound to exercise its powers under Order 7 Rule 11 and no clever drafting creating an illusion of a cause of action could come to the rescue of the plaintiff in such a case.