Final Order 2

Order Details: Copy of Judgment
Pdf Text: Judgment in Suit No. 1
297 of 2018
MHCC010006882018
Presented on : 15-01-2018
Registered on : 01-02-2018
Decided on : 30-03-2024
Duration : 6 Yr, 2 M, 15 D
Exh.
IN THE CITY CIVIL COURT FOR GR. BOMBAY AT MUMBAI
SHORT CAUSE SUIT NO.297 OF 2018.
1.Rajiv S. Khanna ]
Aged about 46 years of ]
Mumbai, Indian Inhabitant, ]
residing at 2, Nishat, Little Gibbs Road, ]
Malabar Hill, Mumbai – 400 006 ]
2. Mr Sanjeev S. Khanna. ]
Son of Late Shivkumar Khanna, ]
Aged about 51 years, ]
of Mumbai Indian Inhabitant ]
Residing at Flat No. 6, ]
2nd Floor, Neelkanth Apartments, ]
62, Worli Hill Road, Worli, ]
Mumbai – 400 018. ]
3. Mrs.Nidhi Gaurav Kapoor. ]
Daughter of Late Shivkumar Khanna ]
Adult of Mumbai, ]
Indian Inhabitant, ]
residing at 601, 6th Floor, Jyoti Building, ]
Rungta Lane, Nepean Sea Road, ]
Mumbai – 400 006. ].... Plaintiffs.
V/s
1.Indusland Bank. ]
Having its registered office at ]
2401 General Thimmayya Road, ]
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Judgment in Suit No. 2
297 of 2018
Cantonment, Pune – 411 001. ]
Also having its Head Office at ]
8th Floor, Tower 1 One India Bulis ]
Centre, 841 S.B.Marg, Elphinstone, ]
Road, Mumbai – 400 013. ]
2. M/s. Link Intime India Pvt. Ltd., ]
The present Registrar of Defendant ]
No. 1, a Company incorporated under ]
The provisions of the Companies Act., ]
1956 having its registered office at ]
C-101, 247 Park, L.B.S. Marg, ]
Vikhroli (West), Mumbai – 400 083. ]
3. Mr. Prakash V. Makhija. ]
Adult, Age not known, Indian Inhabitant of Pune, ]
1, Shefali, 4 I.C.S.Colony, ]
Ganesh Khind Road, Pune – 411 007. ]
4. Srichand Makhija. ]
Age Not Known, ]
301, Violena, St. Anne’s Church Lane, ]
Shirley Rajan Road, Bandra (W), ]
Mumbai – 400 050. ] ...Defendants.
Appearance:
Adv. Counsel Ali Abbas Delhiwala with Adv Chitra Mhaske for the
plaintiff.
Adv. Raj S.M. Satam h/f Adv Megha Jani for defendant No.1.
M/s. Link Intime India Pvt. Ltd. defendant No.2
Adv. Shankar Mhatre for defendant Nos. 3 & 4.
SUIT FOR DECLARATION AND INJUNCTION.
Coram : Shri. U. C. Deshmukh
CR No. : 59.
Date :30th March, 2024.
ORAL JUDGMENT
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Judgment in Suit No. 3
297 of 2018
This is suit for declaration of injunction,injunction etc.
1 Before deal with disputed facts, it is necessary to note that
initially the suit was instituted by one Mr. Rajeev S.Khanna (PW 1) i.e.
plaintiff No.1. Thereafter on application of the original plaintiff -Rajeev
Khanna (P.W.1) names of plaintiff No. 2 Mr. Sanjeev S.Khanna (P.W.-2)
and Mrs. Nidhi Gaurav Kapoor were arrayed to the suit. Plaintiff Nos.
1 & 2 are son of Late Shivkumar Khanna and plaintiff No. 3 is daughter
of Late Shivkumar Khanna. Plaintiff Nos. 2 & 3 do not claim any interest
over the subject matter of the suit. They contend that he is plaintiff No.
1 who to entitled to the subject matter of the suit.
Factual Matrix of the Plaintiff’s case are as under :
2. The plaintiff has come with specific case that defendant No. 1
is Private Sector Bank and whereas defendant No. 2 is Registrar of
defendant No. 1. Defendant Nos. 3 and 4 are legal heirs of the one
Shanti Makhija and Vasumal Makhija who are expired. Hence,
defendant Nos. 3 & 4 being heirs of deceased Shanti Makhija and
Vasumal Makhija are made party to the suit.
3. The plaintiff contends in the year 1995 plaintiff No. 1 and his
father Shivkumar purchased 250 shares of face value of Rs. 100/-each
of defendant No. 1 through a broker Mr. G.S. Gandhi. Plaintiff No. 1
paid the sum of Rs. 25,000/- through cheque bearing No. 630905 dated
2nd June, 1995. The broker delivered 250 shares and transfer forms duly
executed by the original transferor. Out of said 250 shares 150 shares
which bears certificate No. 18479, Folio No 19479 (In short ‘Suit
Shares’) were transferred vide Deed dated 7th August, 1995 (Exh.18)
executed by deceased Shanti Makhija and Vasumal Makhija. The
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Judgment in Suit No. 4
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Transfer Deed Exh. 18 was verified and attested by transferror banker
State Bank of India Branch Kemps Corner, Bombay. 100 shares out of
250 above mentioned were accompanied with Transfer Form executed
by Malti Wadhawani and Ashok Wadhawani. Those 100 shares are in
not subject matter of the suit.
4. The plaintiff further contends that after receipt of suit shares
along with transfer form, the plaintiff No. 1 and his father completed all
formalities and submitted the suit shares by hand to defendant No. 2 to
transfer suit shares in the name of plaintiff No. 1 and his deceased
father. The suit shares were received by defendant No. 2 on 9th August,
1995 vide receipt at Exh. 35. Out 250 shares 100 shares were duly
transferred in the name of the plaintiff. However, suit shares were not
transferred. On 17th August, 1995, defendant No. 2 issued an objection
letter at Exh. 36 to the plaintiff and returned the suit shares along with
200 shares of his brother Mr. Sanjeev Khanna (PW 2) i.e Plaintiff No. 2,
those 200 shares of Sanjeev Khanna are also not subject matter of the
suit, with an objection that the suit Transfer Deed at Exh. 18 does not
bear stamp and signature of the witness. Thus, the plaintiff received
suit shares back from defendant No. 2 vide letter dated 17.08.1995 at
Exh. 36.
5. The plaintiff further contends that thereafter the plaintiff
obtained name of the witness and resubmitted the suit shares along
with transfer deed to defendant No. 2 vide letter dated 13th November,
1995 at Exh. 37 by hand delivery. Defendant No. 2 has accordingly
issued receipt dated 14.11.1995 Exh. 38.
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Judgment in Suit No. 5
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6. It is further specific case of the plaintiff that plaintiffs father
deceased Shivkumar Khanna who was looking after the financial affairs
of plaintiff No.1, expired on 14th July 2003. Thereafter, plaintiff No.1 on
2nd January,2004 addressed a letter (Exh. 21) to defendant No.2 giving
summary and documents of the matter and requested it to effect the
transfer of suit shares. Plaintiff No.1 again on 4th March 2004 vide letter
at Exh. 22 remaindered defendant No.2 to transfer the suit shares which
was received by defendant No. 2 on 5th March 2004. Plaintiff No.1 again
addressed a letter at Exh.23 on 6th October,2004 to defendant No.2 and
requested to transfer the suit shares. Thereafter, plaintiff No.1
continuously contacted defendant No.2. Therefore, on 15th November,
2004 defendant No.2 in reply to letter dated 6th October, 2004 at
Exh.23 issued a letter dated 15.11.2004 at Exh. 39 and informed the
plaintiff that it has marked a precautionary note against the suit share
certificate.
7. The plaintiff further contends that in year 2005 the plaintiff
had shifted his residence. Hence, he completely ignored about the
transfer of the suit shares. Thereafter, some time in about year 2015
plaintiff No.1 and plaintiff No.2 were clearing their father’s old paper,
they found a Objection Letter dated 3rd January, 1996 (Exh.32) issued
by defendant No.2 to the plaintiff. It was objection vide letter dated 3rd
January 1996 at Exh.32 that suit shares certificate were returned to the
plaintiff as Transfer Deed at Exh. 18 was outdated. However, Transfer
Deed sent along with suit shares was not attached to the Objection
Letter at Exh. 32. Meantime the plaintiff deputed his representative who
visited office of defendant No.2 then the registrar of defendant No.1, to
resolve the matter.
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8. The plaintiff further contends that on 22th June,
2016, plaintiff addressed letter at Exh. 24 to defendant No.2 and
requested to resolve the matter. In reply defendant No.2 addressed
letter at Exh. 27 on 12th July, 2016 and requested the plaintiff to
forward share certificates. However, defendant No.2 vide letter dated
22.07.2016 at Exh.27 concealed the fact that it was approached by legal
heirs of transferors i.e. defendant No.2 & 3 for issuing duplicate share
certificate in their favour. The plaintiff continuously contacted the office
of defendant No.2 to transfer of suit shares. Plaintiff No.2 was also
informed by defendant No.2 that duplicate share certificate against suit
shares have been issued in favour of defendant Nos.3 & 4 being a legal
heirs of deceased Shanti Makhija & Vasumal Makhija. Therefore,
plaintiffs through their advocate called upon defendant No. 2 to restrain
from issuing duplicate shares certificate in favour of defendant Nos.3 &
4. The legal notice dated 21st October, 2016 at Exh.25 was replied by
defendant No.2 vide its letter dated 22nd December, 2016 at Exh. 28 and
denied all allegations and stated that suit shares was lodged in the year
1995, the first objection was raised and validity of Transfer Deed was
expired and advised the plaintiff to obtain duly executed Transfer Deed
or order of the Court.
9. The plaintiff also contends that the plaintiff replied letter
dated 22nd December 2016 defendant No.2 vide their letter at Exh.26
dated 7th January, 2017 and repeated their request. The communication
in between the plaintiff and defendant No. 2 shows that the transfer of
the suit shares was and is pending for transfer in the name of plaintiff.
However, defendant No. 2 with ulterior motive issued duplicate shares
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Judgment in Suit No. 7
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certificate in the name of defendant Nos.3 & 4 which is against the rules
and regulation. Hence, the plaintiff constrained to institute the suit.
Therefore, plaintiffs prayed that plaintiff No. 1 be declared as a owner
of suit shares. The plaintiff also prays that duplicate share certificate
issued by name of defendant No. 3 & 4 is invalid and void and liable to
be cancelled. The plaintiff also ask relief of injunction. It is also claim
of the plaintiff that defendant Nos. 1 & 2 be directed to transfer the suit
shares in the name of plaintiff No. 1
10. Defendant No. 1 files its written statement at Exh. 12 with
contention that the alleged transfer deed of year August 1995 on which
basis the suit is filed is not maintainable and barred by law of
limitation. Plaintiff ought to have institute the suit within three years of
the period of limitation prescribed under Article 58 of the Limitation
Act. It is not aware as to the alleged transaction in between the
plaintiffs, deceased Shivkumar Khanna and shareholder deceased
Shanti Makhija and Vasumal Makhija as same was not intimated to this
defendant. Therefore, the said contract of transfer of suit shares is not
binding upon it.
11. It is also further contention of defendant No 1 that from the
record it appears that transaction in between the plaintiff and deceased
Shanti Makhija and Vasumal Makhija was not completed therefore,
shares could not be transferred in the name of the plaintiff as well as ,
late Shri Shivkumar Khanna. The Transfer Deed is of 7th August 1995
and the plaintiff have not taken steps till year 2018. Thus, the suit is
hopelessly barred. Plaintiffs themselves admit that they were aware as
to Transfer Deed, at least in the year 2004. On this count also the suit
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Judgment in Suit No. 8
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instituted in the year 2018 is hopelessly barred by the Law of
Limitation. Hence, prayed to dismiss the suit.
12. Like defendant No.1, defendant No. 2 vide its written
statement at Exh. 7 contends that the suit is barred by law of limitation.
The plaintiff is aware that defendant No. 2 had taken objection vide
letter dated 17.08.1995 at Exh. 36 to the Transfer Deed which was not
removed in time. The plaintiff had resubmitted the original suit shares
certificate after lapse of considerable time. Hence, the transfer form
Exh. 18 was found out dated. It is further contention of defendant No.2
meantime the duplicate shares certificates are issued in the name of
defendant No. 3 and same was processed after it is approved. However,
presently the suit share are debited to his account and are currently
held in the custody of defendant No. 2 and marked under stop transfer
subject to the order of the Court.
13. Defendant Nos. 3 & 4 have filed their statement at Exh.3.
They denied all contents of the plaint for want of knowledge. They also
contend that the suit is barred by Law of Limitation and on same
ground it is liable to be dismissed. It is also their contention that the
suit of the plaintiff is misconceived because the suit shares are already
stand in the name of these defendants. Therefore, this Court has no
jurisdiction to grant the relief sought by the plaintiff. There is 23 years
delay to institute the suit which is not a ordinary delay.
14. Defendant Nos.3 & 4 also contend that the suit is bad for non
joinder of necessary party as a alleged broker of the plaintiff is
necessary party of the suit. They admits that they are legal heirs of
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Judgment in Suit No. 9
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deceased Shanti Makhija who expired on 3rd July, 2001 and Vasumal
Makhija who expired on 22nd March, 2004. These defendants contends
that they are not aware of any transaction in between their parents and
plaintiffs. However, the suit shares are not transferred or were not
transferred during life time of their parents. On 12th August 2015 they
are informed by defendant No. 1 that suit shares stands in the name of
their parents. Hence, after death of their parents by force of law, the
suit shares are transferred in their name. However, on 28.11.2016
defendant No. 2 took charge of the suit shares. Now suit shares are
pending in the custody of defendant No.2.
15. It is also contention of defendant Nos. 3 & 4 are that for the
first time they came to know about alleged transaction when they
served with letter of plaintiff’s advocate dated 21.10.2016 addressed to
defendant No 2 of which the copy was sent to defendant No.3. They
reiterates their contention that they are not aware as to transaction in
between their parents and plaintiffs, therefore, they requested the count
that the plaintiff be directed to prove the same. They also contends that
now the value of the suit shares is increased. Therefore, the plaintiff
with ulterior motive by taking undue advantage of alleged transaction
took place in the year 1995 tried to grab the suit shares. Hence, prayed
to dismiss the suit.
16. Considering the rival stands of both parties issues casting
burden upon the plaintiff to prove their ownership over the suit shares;
maintainability of the suit; whether the suit is barred by Law of
limitation; whether the plaintiff is entitled for relief are framed at Exh.
13 which will be reproduced later-on.
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Judgment in Suit No. 10
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17. To prove their case plaintiff No.1 Rajeev Khanna examined
himself at Exh. 15 and Exh.15-A as P.W -1 plaintiff No. 2 Sanjeev
Shivkumar Khanna is examined at Exh-44 as P.W-2. During cross
examination of Rajeev Khanna as PW-1 following documents are
produced and marked with Exhibit which are filed on record along with
list Exh. 16 which are as follows at Exh 17 to Exh. 39
Sr. No. Documents Exh. No.
1. Share Certificate Exh. 17
2. Share Transfer Forms dt. 07.08.1995 Exh.18
3. Transfer Deed Exh. 19
4. Declaration dt. 23.08.2018 Exh. 20.
5. Letter addressed to In-time Spectrum
Registry Ltd. dt. 02.01.2004
Exh. 21
6. Letter addressed by plaintiff’s advocate
to Intime Spectrum Registry Ltd. dt.
04.03.2004
Exh. 22
7. Letter to Intime Spectrum Registry Ltd.
dt. 06.10.2004
Exh.23
8. Letter Addressed by plaintiff’s advocate
to the Defendant No. 2 dt. 22.06.2016
Exh. 24
9. Letter addressed by plaintiff’s advocate
to defendant No. 2 dt. 07.01.2017.
Exh. 25.
10. Letter addressed by plaintiff’s advocate
to defendant No. 2dt. 07.01.2017
Exh. 26.
11 Letter by defendant No. 2 to Plaintiff dt.
12.07.2016.
Exh. 27
12. Letter addressed by defendant No. 2 to
plaintiff’s advocate dt. 22.12.2016
Exh. 28
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Judgment in Suit No. 11
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13. Bank Pass book entry showing the
clearance of payment of Rs.25,000/-
paid to Mr. G.S. Gandhi, the broker to
the transaction.
Exh. 29
14. Death Certificate issued by the
Municipal Corporation of Greater
Mumbai dt. 23.07.2003
Exh. 30.
15. Death Certificate issued by the
Municipal Corporation of Greater
Mumbai dt. 24.11.1993
Exh. 31
16. Objection Letter dated. 03.01.1996 Exh. 32.
17. Share Certificate for 1500 shares
bearing No. 135780 to 135794.
Exh.33
18. Share Certificate received by Spectrum
Corporate Services Ltd.
Exh. 34.
19. Receipt bearing No.012905 issued by
the Spectrum Corporate Services Ltd.
Exh. 35.
20. Letter addressed by the Spectrum
Corporate Services Ltd.
Exh. 36.
21. Letter to Spectrum Corporate Services
Ltd.
Exh. 37
22. Receipt bearing No. 017707 Exh. 38.
23. Letter addressed by plaintiff’s advocate
to Intime Spectrum Registry Ltd.
Exh. 39
18. The plaintiffs closed their evidence vide pursis at Exh. 46.
19. Defendant Nos.1 & 2 failed to lead evidence, hence, their
right to lead evidence is forfeited vide order dated 24.01.2024.
20. Defendant Nos.3 & 4 filed evidence close pursis at Exh. 47.
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Judgment in Suit No. 12
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21. The plaintiff has filed written notes of argument at Exh. 49
and their advocate also argued orally. The sum and substance of the
submission of the plaintiff is that defendant Nos. 3 & 4 admit that their
parents have transferred suit shares in favour of plaintiff No.1 and his
father. They do not challenge the suit of the plaintiff vide their written
statement and they do not enter into witness box to support their case.
Hence, adverse inference needs to be drawn. On 12.07.2016 vide letter
at Exh.27 was issued by defendant No.2 to the plaintiff and thereafter,
the plaintiff came to know the address of defendant Nos. 3 & 4. The
cause of action arise in year 2017, therefore, the suit is within the
limitation. There is no cross examination at the instance of defendants
to the plaintiff’s witnesses as to their basic case as to payment of
consideration against the suit shares and execution of transfer deed by
parent of defendant Nos. 3 & 4, therefore, the suit is within the
limitation and defendant Nos 1 & 2 are bound to transfer the suit shares
in the name of plaintiff No.1. It is also submission of plaintiff that this
Court being a civil Court has a jurisdiction to try all suits of civil in
nature in view of Section 9 of the Code of Civil Procedure 1908 (in
short ‘the Code’). The procedure under Section 56 of the Companies Act
(In short ‘the Act’) is all summary in nature, therefore, issues as to title
which is arisen in this matter cannot be adjudicated by tribunal.
Therefore, this Court has a jurisdiction, hence, prayed to decree the suit.
The detailed submission of Ld. advocate for plaintiffs are taken into
consideration wherever deemed necessary while answering the issues.
22. On the contrary, it is submission of Ld. Advocate for
defendant No. 3 & 4 that the suit is not maintainable. This Court has no
jurisdiction and it is barred by Law of Limitation. There is also variance
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Judgment in Suit No. 13
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in the Transfer Deed at Exh 78 which bears date at its end i.e. 7.8.1995
which also bears the date 28th April 1995, whereas, it is case of the
plaintiff that the transfer deed was executed on 7th August 1995. The
said delivery was shown on 5th January 1995. This means there is
material controversy in the contents of transfer deed itself.
23. It is specific submission of defendant Nos.3 & 4 that the
objection letter at Exh 32 issued by defendant No. 2 is decessive factor
to invoke the provisions of Limitation Act. Said letter is addressed to
Rajeev Khanna (PW 1) who claims exclusive right over the suit shares.
In view of Section 108 of the Companies Act, the period of two months
is prescribed to submit the Transfer Deed to effect transfer of shares.
The plaintiff has not done anything since 1996 to 2003. The plaintiff
itself admits that he had forgotten about the suit shares meantime. If
the refusal vide Exh. 34 at the instance of the defendant No. 2 is taken
into consideration the plaintiff ought to have approached before the
Appellant Authority as per the provision of Act in which the plaintiff has
failed.
24. It is also their specific contention that if for the sake of
argument it is presumed that the plaintiff was not aware as to letter at
Exh.32 dated 03.01.1996 till year 2017 but fact that plaintiff themselves
contends that plaintiff No.1 Rajeev Khanna (PW1) had issued letter
dated 02.01.2004 at Exh. 21 to defendant No. 2. In reply defendant No.
2 issued letter dated 04.03.2004 at Exh.22. Thereafter, again plaintiff
No.1 issued letter to defendant No.2 at Exh. 23 and in reply to the same
defendant No.2 issued letter dated 15.11.2004 at Exh. 39. It means at
least in the year 2004, the plaintiff had knowledge that the suit shares
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Judgment in Suit No. 14
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are not transferred in their name. Therefore, the suit instituted in the
year 2018 is hopelessly barred by Law of Limitation.
25. Defendant Nos.1 also argued in consonance with the
argument advanced by defendant Nos. 3 & 4. Their detailed submission
are taken into consideration while answering issues later-on.
26. Considering the fact, submissions both sides and Law invoked
by both parties issues framed at Exh.13 are reproduced herein with
finding thereupon as under :-
Sr.
No.
Issues Findings
1. Whether the suit is barred by Law of
Limitations?
...Yes...
2. Whether the suit is misconceived and
not maintainable as pleaded in para
No. 2 of Written Statement of
defendant Nos. 3 & 4?
..Yes..
3. Whether this Court has jurisdiction to
try and entertain the Suit?
..No..
4. Whether the suit is bad for non-
joinder of necessary parties as alleged
in para No. 2 of Written Statement of
defendant Nos.3 and 4?
..No..
5. Whether plaintiffs prove that they are
the owners of 150 shares of the face
value of Rs.100/- each of defendant
No. 1 and therefore, entitled to 1500
shares of the face value of Rs.10/-
each of defendant No. 1?
..No..
6. Whether plaintiffs are entitled to the
relief sought?
..No..
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Judgment in Suit No. 15
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7. What Order and Decree? Suit is
dismissed.
:REASONS:
As to Issue Nos. 1 to 6
27. Issue No. 5 cast burden upon the plaintiff to prove that they
are owner of the suit shares. Issues Nos. 2 & 3 question the suit on the
ground of its maintainability and upon the jurisdiction of the Court
Issues No.1 raises clouds on the suit involving the provisions of The
Limitation Act. If plaintiffs succeeds to show that plaintiff No.1 is
owner of the suit shares; this Court has jurisdiction; the suit is
maintainable and it is not barred by Law of Limitation, the plaintiff
would entitled for relief had sought. Therefore, all these issues are so
interlinked with each other on factual and legal aspect, hence, taken
into consideration together.
28. Prior to discuss a controversial aspect, it is appropriate to note
the undisputed fact. There is no dispute that defendant Nos.3 & 4 are
legal heirs of deceased Shanti Makhija and Vasumal Makhija who were
original owner of the suit shares. The shares belong to defendant No.1
and defendant No.2 acted as a registrar of defendant No.1. There is no
dispute about the value of the suit shares and the fact that presently
duplicate share certificate are issued in favour of defendant Nos. 3 & 4
being legal heirs of deceased Shanti Makhija and Vasumal Makhija and
suit shares are withheld by defendant No. 2 and thus, they are in
custody of it.
29. It is foremost objection of defendant No. 3 and 4
that the plaintiff failed to prove their case. On the contrary, it is
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Judgment in Suit No. 16
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submission of plaintiffs that once defendants fail to cross examine
plaintiff’s witnesses on material aspect and failed to entire into witness
box, the case of plaintiffs cannot be doubted. Defendants failed to entire
into witness box, adverse interference can be drawn. Similarly, it is
contention of the defendants that plaintiff have come with case that
plaintiff No. 1 is owner of the suit shares, hence, irrespective of absence
of evidence or failure to deny at the instance of defendants. It is for
plaintiff to prove their case on the touch stone of the rule of
admissibility of evidence.
30. Defendants have placed a reliance upon the
decision of Hon’ble Apex Court in Shantilal Gulabchand Mutha V/s.
TATA Engineering and Locomotive Company Limited and Another
(2013) 4 SCC 396, decision in Narbada Devi Gupta V/s Birendra Kumar
Jaiswal and Another, (2003) 8 SCC 745, decision in Union of India and
Others V/s. Vasavi Cooperative Housing Society Limited and Others
(2014) 2 SCC 269, decision in Union of India V/s. Ibrahim Uddin and
Another, (2012) 8 SCC 148.
31. Relying upon above mentioned case laws it is submission of
Ld. Advocate for defendants that mere fact that document produced and
marked with exhibit by the Court cannot be held a due Proof of
contents. When there is serious dispute as to title the plaintiff claims
ownership then it is immaterial whether defendants proved their case or
not, the plaintiff must establish their own title. The weakness of
defendants case cannot be ground to grant the relief.
32. On the contrary, it is submission of the Ld. advocate for the
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Judgment in Suit No. 17
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plaintiff that when parties to the suit failed to enter into witness box the
adverse interference needs to be drawn against it that the case put up
by it is not correct. Defendants have not denied the case of the plaintiff
specifically but for want of knowledge. Therefore, it can be said that
they have admitted the case of the plaintiff. The plaintiff relied upon
the decision of Hon’ble Apex Court in Vidhyadhar V/s. Manikrao and
Another, (1999) 3 SCC 573, decision in Jafauri Sah and Others V/s.
Dwariak Prasad Jhunjhunwala and others., AIR 1967 SC 109,decision in
Muddasani Venkata Narsaiah (Dead) Through Legal Representative V/s.
Muddasani Sarojana (2016) 12 SCC 288, and decision in Jaspal Kaur
Cheema and Another V/s. Industrial Trade Links and Others, (2017) 8
SCC 592.
33. In Shantilal Gulabchand Mutha (supra) the Hon’ble Apex
Court has observed that the omission to file written statement will not
preclude the plaintiff from proof of facts. Similarly in Union of India
and Others V/s. Vasavi Cooperative Housing Society Limited and Others
(supra) the Apex Court has observed that in suit for declaration of title
the burden lies on the plaintiff to make out and establish the clear case.
Defendants weak case cannot be a ground to grant such relief.
34. Defendants have specifically pointed out that defendant
Nos.3 & 4 have not denied the case specifically because they are not
aware as to the transaction between the plaintiffs and their parents for
want of knowledge. Certainly adverse interference can be drawn
against party to the suit if he does not enter into the witness box to
support his case. In the present matter defendants have not adduced
any evidence in support of the case. However, it is fact that plaintiffs
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Judgment in Suit No. 18
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have instituted the suit for declaration of ownership of plaintiff No. 1
over the suit shares. In such case, in absence of evidence in rebuttal and
assuming that there is no written statement on record it is for the
plaintiff to show and prove that plaintiff No. 1 is owner of the suit
shares. Hence, reference to the evidence of the plaintiff is inevitable.
35. Plaintiff No.1 Rajeev Khanna (PW 1) has examined himself at
Exh. 15 & 15A. Rajeev Khanna (PW1) reiterated facts pleaded in the
plaint. During his examination document at Exh 17 to 39 are marked
as exhibit. It is submission of defendants that the evidence of Rajeev
Khanna (PW1) is not suffice to read and admit facts contended in
documents at Exh. 17 to 39. However, it is worthy to note that it is case
of the plaintiff that Transfer Deed at Exh. 18 was executed by parents of
defendant No.3 and 4 in favour of the Rajeev Khanna (PW 1) and his
late father Sanjeev Khanna. Defendants Nos. 1 & 2 admit issuance of
receipt at Exh. 35 and correspondence in between plaintiffs and
defendants themselves vide letter Exh. 21 to 28, 32, 33, 36, 37, 39.
Defendant Nos. 3 and 4 who are legal heirs of transferror of the suit
shares do not deny the execution of Transfer Deed in toto and in strict
sense. On the other hand, Rajeev Khanna (PW-1) deposed in support of
the contents of the transfer deed Exh. 19 and form at Exh. 20.
Therefore, it cannot be said that oral evidence of Rajeev Khanna (PW-1)
is not sufficient to read contents of the documents at Exh.17 to 39.
36. The payment of consideration amount of Rs.25,000/- through
Mr. G. S. Gandhi is concerned the oral evidence of Rajeev Khanna (PW-
1) has remained unchallenged. No evidence is adduced in rebuttal. The
Commutative effect of oral evidence of Rajeev Khanna (PW-1) and
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documentary evidence vide Exh. 17 to 39 is that parents of defendant
Nos. 3 to 4 namely Shanti Makhija and Vasumal Makhija had executed
Transfer Deed on 7th August 1995 and consequently, handed over
Transfer Form at Exh. 18 on 7th August 1995. As earlier observed that
there is no dispute about the value of the suit shares and its original
owner of the same to whom the suit shares belong being a Company.
Thus, the plaintiff has brought on record that deceased parents of
defendant Nos. 3 & 4 were original suit share holder They signed and
executed shares transfer form in favour of the plaintiff No.1 Rajeev
Khanna (PW1) for consideration of Rs.25,000/-
37. Now peculiar question arise whether execution of Transfer
Deed at Exh. 19 and Transfer Form at Exh. 18 in favour of the plaintiff
is sufficient to hold that plaintiff No. 1 is owner of the suit shares. It is
specific contention of defendants Nos. 3 & 4 that the suit is not
maintainable because the suit shares are transferred in their name; this
Court has no jurisdiction to entertain the suit because there is bar of
Section 430 of The Act. It is specific submission of Ld. Advocate for
defendants that in view Rule 17 of National Company Law Tribunal Act
2016 and in view of Section 58 and 59 of The Act, the plaintiff ought to
have approached before the tribunal and not the Court. Defendants
relied upon the decision of Hon’ble Apex Court in Shashi Prakash
Khemka (Dead) Through Lrs. and Another V/s. NEPC Micon (Now
Called NEPC India Ltd.) and Others, Civil Appeal Nos. 1965-1966 of
2014.
38. On the other hand, it is submission of Ld. Advocate for the
plaintiff that jurisdiction of the Company Court or Tribunal is summary
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in nature. The Company Court has to adjudicate dispute pertaining to
rectification or under the garb of rectification question of fact involving
contentious issues raised. Otherwise the jurisdiction of the Civil Court
is not excluded. He placed reliance upon the decision of Hon’ble Apex
Court in Standard Chartered Bank V/s. Andhra Bank Financial Services
Ltd. And Others, (2006) 6 SCC 94, and decision in M/s. Ammonia
Supplies Corporation Private Limited V/s. M/s. Modern Plastic
Containers (Pvt.) Ltd and Others, (1998) 7 SCC 105.
39. In Shashi Prakash Khemaka (supra), the Hon’ble Apex Court
has observed that whenever there is question of rectification of title
over the shares of the company, in view of the Section 430 of the
Company Act, the civil Court shall not have jurisdiction to entertain any
suit or proceeding in respect of the matter which the tribunal has
jurisdiction. In Std Chartered Bank (Supra) the Hon’ble Apex Court
deal with the mode of transfer required to prove the transfer and for
registration of the transfer of debenture or bond vis- a-vis the provision
of transfer of property act. The Hon’ble Apex Court has observed that
the debentures or bonds be exempted from the provisions of Section
130 to 136 of the Transfer of the Property Act there is no prescribed
mode of transfer of property act in debentures or bonds under the
Transfer of the Property Act. The Apex Court in M/s. Ammonia (supra)
has observed that Section 446 of the Companies Act indicates the
jurisdiction of the company Judge is discretionary. The very word
rectification convert something ought to have been done or but error
not done and what ought to have been done was done require in
collection. Rectification in other word is the failure on the part of the
company to comply with direction under the Act. To show this error the
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burden is on the applicant and to this extend in matter or dispute
between person raised in such Court it may generally decide any matter
which is necessary or expedite to decide in the connection with the
rectification. The sum and substance of observation for Apex Court in
aforesaid case laws is that if the issues as to any irregularities or error in
the rectification or transfer of the share is made out it can be decided to
civil Court. However, if dispute found to the relating to the field of
rectification then the Company Court would have jurisdiction. The
Jurisdiction of civil Court will be impliedly barred.
40. In the light of dictum of Hon’ble Apex Court and rule laid
down in aforesaid decisions it is necessary to see whether it is case of
the plaintiff that it is default of defendant No. 1 Company while
rectifying transfer of suit shares. It is fact that the transfer form firstly
submitted to the defendant No. 2 to effect the transfer on 9th August
1995 which was returned on 17th August, 1995 vide letter at Exh. 36 on
ground that it does not bear the name of the witness and signature of
the witness. Thereafter, on 30th November 1995 vide letter at Exh. 37
the plaintiff again submitted the transfer forms to effect the transfer
which were returned to the plaintiff along with objection letter dated 3rd
January,1996 at Exh.32. Obviously, it is case of the plaintiff that said
letter was found to the plaintiff in the year 2015. Said contention will
be considered later on. However, considering first submission of the
transfer form on 07.08.1995 and its re-submission on 17.08.1995, it is
necessary to see whether the plaintiff has complied the provisions of
Companies Act. It is specific submission of the defendant that the
plaintiff ought to have submitted the transfer form within 60 days to
effect of transfer in view of section 56 of the Act. Therefore, the
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reference of Section 56 of the Companies Act is essential.
41. Sub Section (1) of the Section 56 of The Companies Act
provides that the instrument of transfer has to be delivered to the
company by the transferor or transferee within a period of 60 days of
the date of the execution along with certificate. It also provides that if
instrument of transfer has been lost or instrument of transfer has not
been delivered within a prescribed period the company may register the
transfer on such term as to indemnity as the board may think fit.
42. It is case of the plaintiff that the Transfer Form and Deed
were executed on 7th august 1995 they submitted firstly for transfer to
defendant No. 2 who was registrar of the defendant No.1 on 9th
August,1995 defendant No. 2 returned the transfer forms along with
shares with objection on 17.08.1995 vide letter at Exh. 36. Thereafter
on 13th November 1995, the plaintiff vide letter at Exh. 37 resubmitted
the transfer form along with suit shares to defendant No. 2. If the date
of the execution of transfer deed and transfer form is taken into
consideration the first date of the submission of the suit shares at the
instance of the plaintiff is well within the prescribed period of
limitation. However, after suit shares were returned with the transfer
form on 17th August, 1995 the re-submission at the instance of the
plaintiff on 13th November, 1995 is beyond the period of 60 days not
only from the date of the execution but also from the date of return i.e.
17th August, 1995. Therefore, defendant No. 2 has rightly took objection
and refused to transfer the suit shares vide objection letter dated 3rd
January, 1996 (Exh. 32).
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43. Once it is found that the plaintiff failed to submit the transfer
form along with suit shares for rectification or transfer thereof within
the prescribed period of limitation, the submission on the point of
limitation raised by the both parties needs consideration.
Simultaneously while deciding the issue whether this Court has
jurisdiction and whether the suit is barred by any law particularly vide
provision of the Companies Act. Therefore, it is apt to record the
submission of the both sides as to point of limitation. The issue as to
limitation is raised by defendants on two fold ground one that under
the provision of Companies Act the remedy of the plaintiff to approach
before Companies Court or Tribunal is expressly barred and also
considering the cause of action arose to the plaintiff, the suit, even if it
is presumed that this Court has jurisdiction to entertain the same, is
barred by the law of limitation.
44.
Per Contra, it is specific submission of Ld. Advocate for the
plaintiff that right to sue accrued only when cause of action arise.
Unless there is threat or danger to the right of the plaintiff, the plaintiff
is not bound to institute the suit. Till year 2017 duplicate shares
certificate are issued in favour of defendant Nos. 3 & 4, the plaintiff had
no cause of action. There was correspondence in between the plaintiff
and defendants. Therefore, the plaintiff rights over the suit shares was
live and cloudless till duplicate suit shares certificate are issued in
favour of defendant No.3 & 4. He placed reliance upon the decision
SGM Properties and Investment Pvt.Ltd. V/s. Basantkumar Rungla &
Another 2019 SCC Online Bombay 2060=(2020) 2 Mah.L.J. 225 and
decision in MST Rukhmabai V/s. Lala Laxinarayan and Others, 1959
SCC Online SCC 9.
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45. It is also submission of defendants that when the suit of the
plaintiff is barred by law, the plaintiff cannot allowed to circumvent the
provision of law by means of claver drafting. The plaintiff ought to have
institute the suit within three years of the receipt of letter at Exh. 32
dated 3rd January, 1996. Defendants placed reliance upon of Hon’ble
Apex Court in M/s. B & T AG V/s. Ministry of Defence, AIR Online 2023
SC 426, decision in State of Tripura and Other V/s. Arabinda
Chakraborty and Others, (2014) 6 SCC 460 and decision in Ramisetty
Venkatanna and Anr. V/s. Nasyam Jamal Saheb & Ors., 2023 GoJuris
(SC) 477. In B & TAG (supra) (Shree Ram Mills (supra) the Hon’ble
Apex Court has observed that when there was discussion and
negotiation amongst the parties, the issues are live the question of
limitation automatically got resolved. In SGM Property (Supra) the
Hon’ble Apex Court has observed that to determine whether the suit is
maintainable the pleading of the plaintiff has to be looked into.
Similarly in MST Rukmabai (supra) The Hon’ble Apex Court has
observed that there can be no right to sue until there is an apprehension
that right ascertained in the suit are in danger
46. In State of Tripura and Another (Supra) the Hon’ble Apex
Court has observed that the period of limitation would commenced
from the date of cause of action arise. The respondent therein kept
making representation one after another and all other representation
has rejected in such case submission of respondent therein that period
of limitation would commenced from the date on which his last
representation was rejected and not accepted. In Ramisetty Venkatanna
(Supra) the Hon’ble Apex Court has observed that when the suit is
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barred by any law, the plaintiff cannot be allowed to circumvent the
provision of law by means of clever drafting to avoid those
circumstances In M/s. B & T AG the Hon’ble Apex Court has observed
that the provision of Article 137 of the Limitation Act are reduciary. The
right to apply is an extraction of broad common law principle and
should entertain according to the circumstances of each case.
47. It is further specific case of the plaintiff that his deceased
father was looking after the financial affairs, therefore, plaintiffs were
not aware as to objection letter dated 3rd January 1996 at Exh. 32.
Therefore, after duplicate share certificate are issued in favour of
defendant No. 3 & 4 they have arisen cause of action. If this submission
is taken into consideration it has to see whether the act by which
duplicate suit share certificate is issued has given cause of action. The
plaintiff contend that they were not aware as to the address of original
transferor. They first time came to know address of defendant Nos. 3 &
4 when defendant No. 2 addressed letter dated 22.12.2016 at Exh. 28.
It means at least till duplicate suit share certificate were issued in favour
of the defendant Nos. 3 & 4 they have not claimed any right over the
suit shares. Sub section (2) of the Section 56 of the Act provides that
the Company has power to register a transmission of any right to the
security by operation of law on receipt of its intimation from any person
to whom such rights has been transmitted. The transfer of right in
favour of defendant Nos. 3 & 4 is not by act of party but by force of law.
Thus, the duplicate share certificate are issued because defendant Nos.
3 & 4 succeed to it being a legal heirs of deceased Shanti Makhija and
Vasumal Makhija. Therefore, it cannot be said that defendants Nos. 3 &
4 have made an attempt to infringe right of the plaintiff if any such
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right had accrued in their favour. Then ancillary question arise whether
the Transfer Deed Exh 19 confirms ownership over the plaintiff
48. Section 2 (55) of the Companies Act defines the term member
in relation to the company. So far as the matter under -consideration is
concerned the term explained vide Clause- iii of sub Section (55) of the
Section 2 of the Companies Act would be relevant. It provides that to
name the person a member of the Company he has to hold shares of the
Companies and his name is to be entered into beneficiary record of
depository. Section 56 of the Companies Act provides the procedure of
transmission of securities. Thus, it is abundantly clear that mere
execution of transfer deed in respect of the shares of companies will not
give any person a status of the member of the company. It is admitted
fact that even the plaintiff had submitted the transfer form to defendant
No. 2 such shares are not transferred in the name of plaintiff No. 1 or
his father as he is not entered into registrar of the member of the
company. Therefore, it cannot be said that the plaintiff has acquired
title and ownership of the suit shares.
49. There is substance in the submission of the Ld advocate for
defendant No. 3 & 4 that the plaintiff had knowledge that suit shares
are not transferred in their favour at least when they make
correspondence with defendant No. 2 in the year 2004. It is needless to
state that ignorance of law has no excuse. The provision of Section 56
of the Company Act itself prescribes the period of 60 days to get
transfer the shares transferred after its execution. The fact that the
plaintiff failed to resubmit the suit shares within 60 days, even from the
date of its returned on 17th August, 1995, itself demonstrate that the
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Judgment in Suit No. 27
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plaintiff failed to comply the provision of Section 56 of the Companies
Act. Therefore, there is no irregularity at the instance of defendant No.
2 in non effecting the transfer of suit shares vide letter at Exh. 32.
50. Even for the sake of discussion, if it is presumed that the
plaintiff came to know about the objection letter date 3.1.1996 at Exh.
32 in the year 2015 then also the plaintiff ought to have approached
before the Company Court or Tribunal as provided under Section 58 of
the Companies Act. Section 430 of the Act specifically excludes the
jurisdiction of the civil Court in respect of the matter in which Tribunal
or Appellant Tribunal has jurisdiction to determine under the
Companies Act. It is not case of the plaintiff that defendant Nos 3 & 4
have created any hindrance in transfer of suit shares, therefore, there is
no cause of action against defendant Nos.3 & 4 to the plaintiff to
institute the suit. Moreover, the plaintiff also claims the relief of
direction to defendant Nos.1 & 2, to transfer suit shares in his favour
and restrain them from transferring the suit shares in favour of any
other third person. Defendant No. 2 has refused to transfer the suit
shares because Transfer Deed was outdated within the meaning of
Section 56 of the Companies Act. It is also interesting to note that the
plaintiff also failed to comply requisition of defendant No. 2 vide its
letter dated 15.11.2004 at Exh. 39 which could fall within discretion of
the company provided under proviso of Section 56 of the Act. Thus,
entire matters falls within ambit of the Companies Act. Thus, it is held
that the plaintiff ought to have approached to Company Court or
tribunal under provision of Section 56 of the Act. Thus, bar under
Section 430 of the Act is squarely applicable to the case of the plaintiff.
51. Once it is observed that this Court has no jurisdiction to enter
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Judgment in Suit No. 28
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in the suit the issue as to the limitation to institute the suit before this
Court looses its importance. However, as this court being a fact finding
Court is bound to answer such issue. For the sake of the discussion, if it
is presumed that the plaintiff was not aware as to issuance of the letter
dated 3rd January, 1996 Exh.32, the plaintiff who has made
correspondence with defendant No. 2 on 2nd January, 2004 vide Exh. 24
letter dated 03.03.2004 at Exh. 22 and letter dated 06.10.2006 at Exh.
23 and to whom the letter dated 15.01.2004 at Exh. 39 was issued by
defendant No. 2 or to the plaintiff No.1 was asked to produce and
submit the documents in the nature of indemnity bond and an affidavit,
transfer deed indemnity bond under Section 108 of the Companies Act
and declaration that no past dividend shall be claimed.
52. Such letters were received by plaintiff No.1 on or before 17th
November, 2004. Plaintiff No.1 was also informed that defendant No.2
will mark precautionary note against the suit share certificate for the
period of 30 days from the date of the letter dated 15.11.2004. If this
submission is taken as it is then the plaintiff was well aware at least on
17th November, 2004 that suit shares are not transferred in his favour.
Therefore, it was incumbent on the part of the plaintiff to comply the
requisition of letter dated 15.11.2004 at Exh. 39. In spite of that the
plaintiff indulged in making correspondence with defendant No. 2 and
that too after lapse of 12 years from receipt of letter at Exh. 39. Shares
are not transferred at least in the year 2004 when the defendant No.2
issued a letter at Exh.39 on 15.11.2004. Thus, the suit is instituted on
15.04.2018 hopelessly barred by the Law of Limitation to claim the
ownership over the suit shares. Moreover, the presence of broker
G.S.Gandhi was not necessary to decide controversy between the parties
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as defendant have not denied specifically execution of transfer deed at
the instance of parents of defendant Nos. 3 and 4. Therefore, it is held
that the plaintiff failed to prove that he is owner of the suit shares, this
Court has a jurisdiction to entertain the suit and suit is within
limitation. Accordingly, issue No.1 to 6 are answered.
53. The plaintiff failed to take proper recourse of the Law as to
get it their issues resolved. There is no cause of action against
defendants to institute the suit before this Court. Therefore, the suit of
the plaintiff is liable to be dismissed and to avoid the multiplicity of the
litigation, both parties are directed to bear their own cost and
accordingly, in answer to issue No. 7 following order is passed :
ORDER
1. Suit No 297 of 2018 is dismissed.
2. Both parties are directed to bear their own cost.
3. Suit No. 297 of 2018 is disposed off accordingly.
(Dictated and Pronounced in Open Court).
(U.C.Deshmukh)
Judge,
City Civil and Sessions Court
Date.:30.03.2024 Greater Bombay (CR 59).
Declared on : 30.03.2024
Dictated on : 30.03.2024
Transcribed on: 08.04.2024
Checked on: 12.04.2024
Signed on :
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Judgment in Suit No. 30
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
20.04.2024 at 12.30 -p.m. Mrs. P.R.Wagh
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (with Court
Room No.)
HHJ SHRI.U.C.Deshmukh,(C.R.No.59)
Judge.,City Civil & Sessions Court,
Date of pronouncement of /Order 30.03.2024
Order signed by P.O. on 20.04.2024
order uploaded on 20.04.2024
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