- (1.) The instant appeal has been preferred against the judgment and order dated 26th July 2012 passed by the learned Single Judge in the aforesaid suit on the application made by the second respondent who made the above application seeking to intervene in the suit and also for addition of party and then discharge of the interim order passed earlier by the learned Trial Judge in the same suit on 22nd March, 2012. Learned Trial Judge has not only entertained the said application of respondent No.2 but also in effect discharged the interim order passed earlier. Hence the appeal. It appears from the papers that the suit was filed by the appellant herein against the first respondent who was appointed credit rating agents by and under two written agreements dated 22nd February, 2010 and 6th October, 2010 respectively claiming declaratory reliefs that above agreements duly and validly terminated by the plaintiff; declaration that the credit rating done by the first defendant grading the plaintiff's financial instruments from AA to A+ after termination of the agreement is invalid and is of no effect, and decree for perpetual injunction from giving effect to the credit rating by way of downgrading of the plaintiff's instruments after termination of the contract. Bereft of all the details made in the plaint the substance of the cause of action is that the first respondent after having been engaged in the credit rating agency, in complete breach of various provision of Regulation and circular issued by the second respondent the first respondent is not employing appropriate methodology and further is not assessing the relevant information with regard to the appellant's performance during the financial year 2011-12. As such the appellant terminated the agreements for rating it's financial instruments namely unsecured subordinated debenture bonds in tier II of the value of Rs.200 crores and value of Rs.50 crores. For these two instruments the appellants engaged apart from the first respondent another credit rating agent namely CARE. According to the appellant the CARE has duly discharged its obligation in terms of the agreement applying the appropriate methodology and assessing the information supplied by the appellant rated and graded properly whereas the appellant in complete breach of the agreement and also that of the guidelines issued by the SEBI arbitrarily baselessly downgraded the credit rating.
(2.) It appears from the records that learned Trial Judge being satisfied with the urgency of this case and having assessed the prima facie case made out at the ad interim stage passed an order on 22nd March, 2012 on the application of the appellant. By the said order the learned Trial Judge restrained respondent No.1 from publishing the credit rating of the plaintiff said to have been done by the first respondent. As it appears from the records that on the concession made by the first respondent not to publish the rating in print and electronic media the said order was passed. Of course, order dated 22nd March, 2012 was passed on the returnable date on hearing the first respondent who was and still is the sole defendant in the present suit. By the said order the learned Trial Judge directed a notice of the application to be given to second respondent in the appeal and the matter was due to appear on 29th March, 2012. It is alleged that no notice was served upon the second respondent nor did the matter appear on 29th March, 2012. The second respondent having come to know from Reserve Bank of India approached the learned Trial Court with the above application on 26th July, 2012. Learned Trial Judge recorded this fact in the impugned judgment and order.
(3.) Mr. Sudipta Sarkar, learned Senior Counsel with Mr. Sidhartha Mitra, learned Senior Advocate appearing for the appellant submits that the order of injunction granted earlier ought not to have been vacated at the instance of the non party more so when the application for its addition has been kept pending. The second respondent at whose instance order was discharged has not been able to show any legal right for getting aforesaid order vacated. While vacating the learned Trial Judge has committed error asking the appellant to approach the respondent No.2 for resolving the dispute under the provision of Section 29(2)(c) of the Securities and Exchange Board of India (Credit Ratings Agencies) Regulations 1999 (hereinafter referred to as the said 'Regulation'). The said order is bad as no chance was given to counter the application of the respondent No.2. Mr. Sarkar in order to restore earlier interim order has submitted prima facie case in the manner as follows:- The contract between the appellant and the first respondent was discharged in view of the breach committed by the sole defendant. The respondent No.1 committed breach of obligation arising out of the said agreement by not disclosing methodology of the rating of the petitioner's instruments. The said contract specifically provides that the defendant will disclose to the appellant-petitioner the methods of dissemination.;