1. After having heard learned counsel for the parties on 7.5.2002 and 8.5.2002 short operative order was dictated in Court on 8.5.2002, stating that for detailed reasons to follow later, the respondent shall stand restrained from proceeding with its suit in English High Court proceedings-Claim No. HQ 02X00183 British Millerain Co. Limited v. Harish Ahuja and (2) Palmprint Textiles (India) Limited. The appeal and the miscellaneous application stood disposed of. We are now supplying the reasons in support of our order.

2. The plaintiff/appellants felt aggrieved by the order passed by learned Single Judge on 19.4.2002 when, on their application (I.A. 3869/2002), ex-parte ad-interim order of restraint against the defendant/respondent, was not issued and instead the application was adjourned to 20th May, 2002. In the said application filed under Order 39 Rules 1 & 2 cpc, the plaintiff had prayed as under:-

"Pass ex parte ad-interim order restraining the defendant and/or its servants or agents from in any manner proceeding with claim No. HQ 02X00183 dated 18.1.2002 presently pending before the High Court of Justice of England and Wales and/or any proceeding, arising out of and connected therewith in the High Court of Justice of England and Wales and to make the said order absolute upon return of notice of motion."

3. At the very outset a preliminary objection was raised by learned counsel for the respondent about maintainability of the appeal. By placing reliance on the decision of a Division Bench of this Court in Nisha Raj & Anr. v. Pratap K. Kaula and Ors. it was submitted that such an order passed in an application filed under Order 39 Rules 1 & 2 cpc directing only notice, is not appealable.

4. After hearing learned counsel for the parties and considering the averments made in the plaint and the miscellaneous application, as also the nature of the suit filed by the appellants and the proceedings taken out by respondent before the High Court of Justice of England and Wales we are of the view that even on the ratio of the decision in Nisha Raj's case (supra), the instant case can be said to be falling in the exceptional class of cases as referred to in the said decision. In the event of non-grant of interim relief, as prayed for, likelihood of the plaintiff being put in an irretrievable situation cannot be ruled out. As such the preliminary objection has no force and is turned down.

5. The appellants on 21.4.1998 filed the suit. The plaint was registered on 29.4.1998. Respondent was directed to be served through ordinary process as well as by registered A.D. post for 28.5.1998, on which date the respondent put in appearance through counsel. Despite grant of seven adjournments calling upon the respondent to file the written statement, and despite imposition of costs twice, written statement was not filed. Lastly the suit was adjourned from 5.10.99 to 11.1.2000. During this period two applications were filed by the respondent on 11.11.1999, seeking rejection of the plaint under Order 7 Rule 11 CPC and for striking off the plaint under Order 6 Rule 16 CPC. Notice of these applications was directed to be issued for 7.1.2000. No steps were taken by the respondent to serve the appellants. When the suit was taken up on 11.1.2000, it was noticed that written statement had not been filed. The Court insisted that the respondent should file written statement before its two applications are considered. As such in a suit which was instituted on 21.4.1998 the written statement was filed by the respondent after about 33 months on 9.2.2001.

6. The appellants in the suit have claimed a decree against the Respondent for declaration, that no contract for sale of any textile machinery by the respondent to the appellants, was ever executed between the parties and in particular the offer dated 10.1.1998 of the respondent did not fructify into a contract between the parties. A decree for permanent injunction has also been prayed restraining the respondent from commencing any legal proceedings against the appellants in respect of the alleged contract between the parties dated 10.1.1998 for the sale of textile machinery by the respondent. Along with the suit an application under Order 39 Rules 1 and 2 for ad-interim injunction was also filed. The same is also pending consideration.

7. While the suit was still pending consideration on the two applications filed by the respondent as noticed above, the appellants, on 16.4.2002, filed an application (I.A. 3869/2002) for the aforementioned order of restraint against respondent. It was pointed out that during pendency of this suit, the appellants were shocked to receive a letter dated 11.3.2002, from the solicitors of the respondent in England from which the appellants, for the first time, learnt that a suit for damages Along with an application for leave to sue, has been filed by the respondent against the appellants in the High Court of England on 2.1.2002. This fact of filing of the suit was not disclosed by the respondent though the appellants' suit came up before the learned Single Judge on 28.1.2002 and 4.4.2002. The appellants have thereafter made a reference to certain correspondence which appellants had with the solicitors of the respondent, and pointed out that the respondent committed gross contempt of this Court by making uncalled for and contumacious allegations against the Indian legal process in the "Witnesses Statement" dated 2.1.2001 filed by the respondent's advocate. Besides questioning the correctness and veracity of the "Witnesses Statement", the appellants alleged that grave loss and prejudice would be occasioned in the event of the appellants being made to face proceedings in English Court or suffer an ex-part decree in English Court. The appellants alleged that as per the information, which they have been able to gather, the cost structure in England, even at preliminary hearing was likely to be enormous and which, in any case, would not be less than Pound Sterling 100,000 i.e. about Rs. 70,00,000/- and possibly several times of that amount at subsequent hearings. Also in order to defend themselves in the suit proceedings, the appellants would additionally have to provide security for costs. Normally in respect of a party based in England this can be done by giving a bond or showing that the party has sufficient property in England. For an outside party, this is to be done routinely by a pre deposit of costs. The pre deposit of cost, in a claim of this magnitude, is also likely to be substantial. The appellants thus prayed that since there was a strong prima facie case and the balance of convenience also lay in favor of the appellants, who were likely to suffer irreparable loss injury and damage, as such the respondent deserved to be restrained from prosecuting with the suit, subsequently instituted in English Court.

8. On the said application only notice was issued, and that is how the appellants filed this appeal. It was brought to our notice that in the meanwhile respondent's solicitors had informed the appellants that they shall be applying for judgment in favor of the respondent of 8th May, 2002 without further reference to the appellants.

9. Learned counsel for the respondent submitted that the appellants suit filed in this Court was based on falsehood and required rejection. It was also submitted that filing of the suit in this Court by the appellants cannot prevent the respondent instituting and continuing with appropriate proceedings in a competent court, and since there was a concluded contract between the parties, the respondent was perfectly justified in having instituted proceedings in an appropriate court having jurisdiction in the matter, which could not be stayed and no restraint could be put on the respondent from prosecuting lawfully instituted proceedings. He made reference to the provisions of Section 34 and Section 41(b) of the Specific Relief Act urging that the decree prayed for by the appellants in the suit cannot be granted since the same is specifically prohibited and this Court has no power to injunct a party from proceedings an appropriate action in a foreign court. Learned counsel for the respondent relied upon the decision of Supreme Court in Cotton Corporation of India Limited v. United Industrial Bank Limited and Ors. and a judgment of this Court in Dr. Mrs. Pari Hingorani v. Mrs. Shakuntala and Ors. AIR 87 DELHI 307. He also referred to another decision of Supreme Court in S.P. Chengal Varaya Naidu (dead) by LRs. v. Jagannath (dead) by LRs. and Ors. (1994) 1 SCC 1 urging that the suit based on falsehood is liable to be dismissed.

10. Learned counsel for the appellants by relying upon the three decisions of Supreme Court in V/O Tractoroexport, Moscow v. Tarapore and Co., Madras and Anr. , Oil and Natural Gas Commission v. Western Company of North America 1987 SC 674 and Vikas Aggarwal v. Anubha. 2002 (3) SCALE 521 urged that this Court has ample power to injunct a party from proceedings with an action in a foreign court and submitted that the decision relied upon by learned counsel for the respondents in Cotton Corporation of India was distinguishable and the judgment of this Court in Dr. Mrs. Pari Hingorani's case (supra) was no longer good law in view of the law declared by Supreme Court in C.N. Rudramurthy v. K. Barkathulla Khan and Ors. . He also urged that since the proceedings taken out by the respondent admittedly are subsequent to the appellant suit, the principles of Section 10 of the Code of Civil Procedure would be attracted and that in any case the respondent deserves to be restrained as prayed for.

11. Learned counsel for the parties also made elaborate submissions on the merits of their case. Learned counsel for the respondent submitted that there was enough material on record to justify that a concluded contract had come into being, especially when the offer of 10.1.1998 was duly accepted in writing by the appellants, who admittedly had also accepted the shipment documents and had acted upon the contract. On the other hand learned counsel for the appellants drew our attention to the specific averments made in the plaint and in the replication and pointed out that there was a strong challenge by the appellants to the stand of the respondent about the alleged concluded acceptance of the offer of 10.1.1998. At the very first opportunity, the appellants had, in reply to the fac message of the respondent dated 2.3.1998, brought to the notice of the respondent the very next day, i.e. on 3.3.1998, that appellants had never signed the offer and there was no concluded agreement with the respondent for the purchase of the machinery. As regards the acceptance of the offer of 10.1.1998, besides denying that the same had been signed by the appellants it was the appellants case that it was a forgery on the part of the respondent. The appellants had also denied that Mr. Unnikrishnan was their employee.

12. It may be noticed that in respect to the notice on the appellants application, the respondent has not yet respondent by way of reply before the learned Single Judge. As such in this appeal and at this stage of the proceedings we are not inclined to make any observations or adjudicate upon highly disputed claim of the parties on merits lest the same might prejudice either of the parties during the disposal of the said miscellaneous application, which is yet to be considered and decided by the leaned Single Judge. However we are of the view that considering the seriousness of the dispute about the existence of basic contract, the appellants were at least entitled to an ex parte ad-interim relief till their application was heard and decided by the learned Single Judge. We have also noticed another important aspect at this stage viz that even the written statement filed by the respondent to the appellants' suit has not been verified in accordance with the procedure laid down in the Code of Civil Procedure. The written statement has not been signed by the respondent. It ha been verified by a person, whose identify is not at all disclosed in the written statement. The person verifying the contents of the written statement, has verified the same to be true to his knowledge and belief. Which part of the written statement is true to his knowledge and which part of the same is true to his belief, is not at all disclosed, which is the basic requirement of the pleadings. To the contrary, the appellant has, on proper verification, supported his case as pleaded in the plaint and in replication. As such due to this serious flaw in the respondent's written statement also, at this stage, a strong prima facie case is made out in favor of grant of an ad-interim relief, which if not granted, is likely to make the suit of the appellants infructuous. Moreover, the apprehension which was expressed on behalf of the respondent viz that grant of such an interim relief was likely to make its claim barred by limitation, no more survive in as much as the respondent has already taken out proceedings and there is no question of the alleged claim becoming bared by limitation.

13. Consequently the defendant/respondent is hereby restrained from prosecuting with its suit in the High Court of Justice of England and Wales (claim No. HQ 02X00183 dated 18.1.2002 titled as British Millrain Co. Limited v. (1) Harish Ahuja and (2) Palmprint Textiles (India) Limited, till the application (I.A. 3869/2002) in S. No. 840/98 is heard and decided by the learned Single Judge. In the short order dictated in Court in the presence of learned counsel for the parties the details of operational order were mentioned and by the said order the appeal stood allowed. Reiterating the same it is observed that whatever has been stated by us while disposing of the appeal, will not prejudice in any manner the case of either parties on merits, which will have to be decided by the learned Single Judge strictly in accordance with law and uninfluenced by any observation made by us.

14. While parting we would like to strongly deprecate the conduct on the part of the respondent in not correctly stating about the proceedings of the suit filed by the appellants in this Court, in the "Witness Statement" of Stephen Neil Gibbs under the heading "Indian Proceedings". The proceedings, as recorded in the suit, on the face of it suggest, and as has been noticed above by us, that it was the respondent who was instrumental initially in delaying the proceedings in the suit by not filing the written statement for more than 33 months from 28.5.1998 till 9.2.2001. We are not making any further comment except by observing that atleast we expect a correct projection and fair account of the proceedings before the learned Single Judge.