Final Order 2

Order Details: Copy of Judgment
Pdf Text: Suit No. 35/2020 Judgment (Exhibit-30)
MHCC010030182019
Presented on : 14.03.2019
Registered on : 02.01.2020
Decided on : 09.05.2025
Duration : 06Y, 01M,27D
IN THE BOMBAY CITY CIVIL COURT AT GR. BOMBAY
S. C. SUIT No.35 OF 2020
Exhibit- 30
Kumar Devdas Advani )
Age 61 years, Indian Inhabitant )
Residing at P/08, Yvonne Nahar )
Amrit Shakti, Chandivali, )
Powai, Mumbai – 400 072. ) … Plaintiff.
Versus
1. Apurva Tankaria )
Adult, Indian Inhabitant )
Residing at Bhulabhai Park, G.M. Branch, )
Opp Bank of Baroda Geeta Mandir Road, )
Ahemdabad 380 022. )
2. Smitha Tankaria )
Adult, Indian Inhabitant )
Residing at Bhulabhai Park, G.M. Branch, )
Opp Bank of Baroda Geeta Mandir Road, )
Ahemdabad 380 022. )
3. Karancy Shoppers )
Share broking Company registered )
Having address at B-11, Valmiki Sunder Nagar, )
Nr. Bombay College of Pharmacy, )
Kalina Santacruz East Mumbai- 400 098. )
4. Surupam Infin Services Pvt. Ltd. )
601, Sneh Kunj, TPS-III, 11th Road, )
Opp. V.N. Desai Hospital, )
Santacruz East Mumbai 400 055. )
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5. Madhuvan Securities Pvt. Ltd. )
81/82, 8th Floor, Madhuvan Tower, )
Madhuvan, Opp Hotel West End, )
Near Madalpur Under Bridge )
Ellisbridge Ahmedabad, Gujarat-380006. )
6. Century Textile and Industries Ltd. )
The Company registered under the )
Companies Act having its Regd office at )
Century Bhavan, Dr. Annie Besant Road, )
Worli, Mumbai- 400 030. ) ...Defendants
SUIT FOR DECLARATION AND MANDATORY INJUNCTION
CORAM : HIS HONOUR JUDGE SHRI PRASHANT C. KALE
(COURT ROOM No.65).
DATE : 9th MAY, 2025.
Appearances :
Shri. Narendra Gharat, Ld. Advocate for the plaintiff.
Defendant Nos.1, 2 and 5 are heard as Ex-parte.
Shri. M.K. Jariwala, Ld. Advocate for defendant Nos.3 and 4.
Shri. Kezer Kharawala, Ld. Advocate for defendant No.6.
JUDGMENT
The instant suit is for declaration and mandatory injunction
2. In short, the case of the plaintiff is that defendant Nos. 1
and 2 are the original share holder of the shares which are sold to the
plaintiff. Defendant Nos. 3 and 4 are the share broker who worked as an
agent in the said sell of shares and defendant No.6 is a company
registered under Companies Act, whose shares were sold to the plaintiff.
Share bearing Folio No. AP0040 and share certificate No. 14037 and
514037 having distinctive numbers 864921-864930 and 47387761-
47387770 containing 020 shares of Century Textiles and Industries Ltd.
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(
hereinafter referred as ‘the suit shares’). The plaintiff had negotiations
with defendant Nos.1 and 2 and have purchased the said suit shares of
defendant No.6 company from defendant Nos.1 and 2. The plaintiff
paid the consideration amount to defendants. The original shares and
the share transfer forms were signed by defendant Nos.1 and 2 and
same were handed over to the plaintiff alongwith original shares
certificates. The plaintiff had taken the signed transfer Deed/forms from
defendant Nos.1 and 2, which includes the NOC of defendants to
transfer the suit shares in the name of the plaintiff. When the plaintiff
approached defendants for transfer of said shares, the plaintiff was
informed that transfer forms executed were not in order and other
transfer forms should be executed. The plaintiff approached defendant
Nos.1 and 2 to sign fresh transfer forms as per the prescribed format.
However, the fresh form was not executed despite promises. The benefit
accruing in respect of the said shares has been given to the plaintiff. The
original share holders having already signed transfer forms are not
entitled for the same and therefore benefits are required to be given in
respect of said shares to the plaintiff. In the month of November-2018
the plaintiff had final talk with the seller of the shares including
defendant Nos. 1 to 5 to sign fresh transfer forms. However, defendant
Nos.1 and 2 refused to sign the fresh transfer forms. Hence, this suit.
3. Defendant Nos.1, 2 and 5 are heard ex-parte.
4. Defendant No.3 has filed written statement at Exhibit-8
and submitted that the plaintiff has suppressed material facts and
because of that the suit is liable to be dismissed with costs. Defendant
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No.3 submitted that it is carrying on its business as Sub-Broker,
registered with the SEBI. During the course of its business, it had
carried out various transactions with M/s. Surupam Infin Services Pvt.
Ltd., the defendant No.4 herein. All the transactions in shares and
securities between this defendant and defendant No. 4 were officially
traded over the National Stock Exchange as the M/s. Surupam Infin
Services Pvt. Ltd. were the registered members of the National Stock
Exchange and this defendant was its Sub-Broker. As per the records
maintained by it, the plaintiff was one of its clients. As per the practice,
procedure and the law, this defendant was required to maintain its
records only for last five preceding years. However, after frantic efforts,
this defendant could locate from its undestroyed records the office copy
of the delivery memo Nos. 1011 and 1012, both dated 09.11.1999
issued in the name of the plaintiff, which contain this defendant having
delivered in all 1800 shares of defendant No. 6 company to the plaintiff
together with in all 42 transfer deeds containing signatures of the
respective transferor/s on each of them, received by this defendant from
defendant No. 4.
5. After receipt of the delivery, it was for the plaintiff to duly
fill in the transfer deeds in all respects, pay transfer fees and then to
send the same to defendant No. 6 company within the stipulated time
for effecting transfer. From the transfer deeds alongwith plaint, it is
clear that the plaintiff has not at all filled-up the transfer deeds, not
paid the transfer fees and not sent the share certificates accompanied by
relevant transfer deeds for transfer. It been the case that the plaintiff
had received the shares under objection from defendant No. 6 company
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till the validity of the transfer deed, this defendant was under obligation
to remove the objection. In fact the transfer deeds have become invalid
in the year 2000 due to gross negligence on the part of the plaintiff and
therefore, this defendant is not under any legal obligation towards the
plaintiff as registered share sub-broker. Hence, the plaintiff is not
entitled to any reliefs as sought for as the present suit is hopelessly
barred by the law of limitation.
6. It is further submitted by defendant No.3 that the plaintiff
has suppressed material facts and the present suit is devoid of merits.
The transaction was routed through the National Stock Exchange, this
defendant received delivery of the suit shares from defendant No. 6 on
or around 09.11.1999 against the purchase order placed by the plaintiff
with this defendant together with transfer deed/s containing signature
of defendant Nos.1 and 2 as the transferor. Defendant No.3 denied that
in the month of November, 2018, the plaintiff had any talk with this
defendant and submitted that the plaintiff has not approached this
court with clean hands. Therefore, the plaintiff is not entitled to any
reliefs and the suit deserves to be dismissed with costs.
7. Defendant No.4 filed written statement at Exhibit-11 and
submitted that suit is based on false and frivolous grounds and
therefore the same is nothing except abuse and misuse of process of law
and therefore liable to be dismissed with compensatory and exemplary
costs. Defendant No.4 denied all and in singular the allegations and
insinuations contained in the plaint and submitted that the present suit
is hopelessly barred by the law of limitation. It is further submitted by
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this defendant that the plaintiff has referred to and relied upon a
transfer deed and by having a glance on reverse of it, it is clearly
observed that it bears a rubber stamp of Madhuvan Securities Pvt. Ltd.,
the broker who apparently introduced the shares in the market on or
around 01.11.1999 and the National Stock Exchange, over which and
under its Bye-laws the purported transaction was carried out. Thus, the
National Stock Exchange becomes the necessary party to the present
suit. There is no privity of contract between the plaintiff and defendant
No.4 and therefore, this defendant is not a necessary party to the
present suit. Hence, this is a fit case of mis-joinder of party and on this
ground also the present suit requires dismissal.
8. Defendant No. 4 further submitted that transfer deed
alleged to have been accompanied with the share certificates. A cursory
glance on front side of the same reveals that the same were printed on
26.10.1999 under the supervision of the Registrar of Companies,
Gujarat. The reverse side reveals that the same were introduced in the
Stock Market via National Stock Exchange on or around 01.11.1999,
which reached in the hands of this defendant through the clearing
house of the National Stock Exchange on or around 03.11.1999.
Further, the name of the transferor is that of defendant Nos.1 and 2, but
the name of the transferee is blank; which raises a reasonable doubt as
to bona-fide of the plaintiff. Defendant No.4 further submits that every
transfer deed is required to be executed and signed by the transferee i.e.
the plaintiff herein. However, the same is found blank. Further, any
transfer deed attracts payment of stamp fees, which is not seen to have
been affixed on the reverse of any of the transfer deeds. This establishes
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that the suit shares were never sent to defendant No.6 company for
effecting transfer in his favour by the plaintiff and to cover-up his own
negligence since the year 1999, the plaintiff filed the present suit in the
year 2019 i.e. after nearly about two decades.
9. The present suit is hopelessly barred by the law of
limitation. Defendant No.4 submitted that the cause of action arose in
the year 1999-2000 as provided under the provisions of the Bye-laws of
the National Stock Exchange under which this defendant was governed
at the relevant time and the Companies Act, 1956 under which
defendant No. 6 is incorporated. Defendant No.4 submitted that the
relief sought by the plaintiff are equitable reliefs and in the entire
plaint, there is no whisper that as to when the plaintiff allegedly
purchased the suit shares and the plaintiff has not referred to and relied
upon any document showing proof of payment of consideration by him
for the alleged purchase of the suit shares. The plaintiff remained silent
for a period of more than two decades and now at this belated stage
approaches this court without any plausible reason or excuse. Thus,
prayed for dismissal of the suit.
10. Defendant No. 6 filed written statement at Exhibit-12 and
submitted that it is a company incorporated within the meaning of
Companies Act, 2013 and has nothing to do with the alleged claim of
the plaintiff. Defendant No.6 is neither a necessary party nor the proper
party in the present suit. The suit is barred by law of limitation and on
this count also the said suit be dismissed. Defendant No.6 denied all
and in the singular allegations and insinuations contained in the plaint.
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The legal pleas put forth by this defendant are similar to that of the
other contesting defendants and prayed for dismissal of the suit with
the compensatory costs.
11. My learned predecessor (HHJ R. R.Bhagwat) framed issues
at Exhibit-15. I have reproduced the issues alongwith my findings
thereon :-
Sr.No. ISSUES FINDINGS
1. Does the plaintiff prove that he
purchased suit shares from defendant
Nos.1 and 2 ? ………….………...No
2. Does the plaintiff prove that he lodged
suit share with defendant No.6
company for effecting transfer in his
name ? ………….………...No
3. Does the plaintiff prove that defendant
No.6 company rejected effecting
transfer of the suit share in favour of
the plaintiff ? ………….………...No
4. Does the plaintiff prove that he is
entitled to all the consequential benefits
over the suit share from defendant No.6
company ? ………….………...No
5. Does the plaintiff prove that cause of
action to file suit had arising in the year
2018 ? ………….………...No
6. Whether the suit is barred by law of
limitation ? ………….………...Yes,
suit is barred by law of
limitation.
7. Does the plaintiff prove that he is
entitled to the relief of declaration
regarding ownership of the suit shares? ………….………...No
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8. Does the plaintiff prove that he is
entitled to the relief of mandatory
injunction as prayed in prayer clauses
(b), (c) and (d) of the plaint ? ………….………...No
9. What order as to costs ? As per final order.
10. What order and decree ? As per final order.
ARGUMENTS OF THE PLAINTIFF:-
12. Defendant Nos.1 and 2 are the original share holder and
shares were sold to the plaintiff. Defendant Nos. 3 and 4 are the share
brokers who worked for defendant No.6. The original share certificates
were handed over to the plaintiff by signing the share transfer form by
defendant Nos.1 and 2. Upon approaching defendants for transfer of
said share, the plaintiff was informed that transfer form executed was
not in order and other transfer form needs to be executed. The plaintiff
approached defendant Nos.1 and 2 to sign fresh transfer form, but it
was never given to the plaintiff. Hence, this suit came to be filed. Upon
pleadings of the parties, issues were framed and the Constituted
Attorney of the plaintiff has adduced the evidence. The plaintiff has
produced original share certificate and share transfer form. Nothing was
elicited from the cross examination of the plaintiff’s witness to disprove
the claim of the plaintiff. There is no evidence adduced on behalf of
defendants. Hence, suit be decreed.
ARGUMENTS ON BEHALF OF DEFENDANT NOS. 3 AND 4 :-
13. It is submitted by defendants that in all 1800 shares of
defendant No.6 company including suit share were delivered to the
plaintiff by defendant No.3 under its delivery memo 10/11, 10/12
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dated 09.11.1999. The plaintiff kept the suit share blank and never sent
it for transfer in his name. The suit is barred by limitation. Thus, prayed
for dismissal of the suit.
ARGUMENTS ON BEHALF OF DEFENDANT NO.6 :-
14. Defendant No.6 submitted that the claim of the plaintiff is
not within limitation and defendant company has nothing to do with
the alleged claim of the plaintiff. Defendant No.6 company submits to
the orders of this court.
REASONS FOR FINDINGS
15. To substantiate its claim, the plaintiff has examined Tarun
Dayabhai Rathod as PW-1 it’s constituted attorney by filing his evidence
affidavit at Exhibit-17 in lieu of examination in chief in terms of the
provisions of Order XVIII Rule 4 of the Code of Civil Procedure. Further,
the plaintiff relied upon the share certificates in the name of defendant
Nos.1 and 2 at Exhibit-21 and 22 and share transfer form at Exhibit-23.
Defendants have not adduced any evidence in response to their
pleadings.
16. AS TO ISSUE NOS.(1)TO (4):
The burden of proving these issues is on the plaintiff. No
doubt defendants have not adduced any evidence on their behalf,
however, during their cross examination they have substantiate their
contentions. It is the case of the plaintiff that defendants have not
signed on the fresh transfer forms and therefore, instant suit for
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declaration and mandatory injunction is filed. Scrutinizing the evidence
adduced on record the document Exhibit-20 and 21 i.e. share certificate
is not having the name of transferee. The share transfer form is not
having any fees affixed to it. The share transfer form is having stamps of
Madhuban Securities Private Limited dated 01.11.1999, Surupam Infin
Services Private Limited and Karancy Shoppers dated 03.11.1999.
There is not a single document on record to show that payments were
made by the plaintiff to defendants in cash or in cheque, establishing
the purchase of suit shares by the plaintiff. Further, there is no
document or other evidence on record to show that suit shares were
lodged for effecting transfer in the name of the plaintiff to defendant
No.6 company and same came to be rejected by defendant No.6
company. Absolutely there is no evidence put-forth by the plaintiff
which entitles him to all consequential benefits over the suit shares
from defendant No.6 Company. In view of the above discussion,
issue
Nos. (1) to (4) are answered in the negative.
AS TO ISSUE NOS. (5) AND (6) :
17. The instant suit is for declaration with consequential relief
of injunction. The limitation provided in the Limitation Act, seeking
declaration is three years from the date on which the right to sue first
accrues. The share transfer form is having date alongwith the stamp
and seal of Registrar of Companies. The date mentioned there on is
26.10.1999 and admittedly the name of the plaintiff is not appearing on
form Exhibit-23. However, the plaintiff has relied upon the said transfer
form. Certainly, when the share certificate form were presented to
Registrar Companies in October-1999 and they were not acted upon,
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this amounts to refusal of the claim of the plaintiff. At that juncture the
cause of action arose for the plaintiff or in other words right to sue
firstly accrued. The reason for concluding so, is that the plaintiff is not
stating in clear terms, who has actually refused his claim and when. The
plaintiff is not disclosing what was the cause for the filing of this suit in
the year 2018, when he came to know that the transfer procedure is not
going ahead or refused by defendants in the year 1999 itself. The
plaintiff was silent and preferred to file this suit in the year 2019 which
is certainly not within the prescribed period of limitation. Hence,
issue
No.(6) is answered in the affirmative. Further, the plaintiff has failed to
establish that cause of action arose to him to file the instant suit in the
year 2018. Resultantly,
issue No. (5) is answered in the negative.
AS TO ISSUE NOS.(7) to (10) :
18. The plaintiff is silent about the cause of action in the entire
plaint except with the bare words that it arose in November-2018. The
plaintiff is not stating clearly the refusal or the acts on the part of
defendants which prompted him to file the present suit. Under the
provisions of section 58 of the Companies Act (w.e.f. 12.09.2013), the
company is under obligation to send a notice to the transferor regarding
reasons for refusal to register transfers. Practically, mechanism is
provided under section 58 of Companies Act for filing appeal after
refusal to register share transfers. The period provided for appeal is 30
days from the receipt of intimation regarding refusal to register transfer.
It is settled that a Civil Court has got jurisdiction in respect of all civil
matters except those for which Tribunal are constituted under special
statute. Thus, for the cause of action after 12.09.2013 Civil Court has
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no jurisdiction to entertain and try the dispute/issues as raised by the
plaintiff in present suit. As observed earlier, the plaintiff is silent as to
when there was refusal to register share transfer by defendants.
19. Appreciating the relevant provisions of law with the set of
circumstances and in view of the findings to issue Nos. (1) to (6), the
plaintiff has failed to establish that he is entitled for the relief of
declaration alongwith mandatory injunction. Resultantly,
issue Nos.(7)
and (8) are answered in the negative. In these circumstances, the suit
deserves to be dismissed with costs. Hence,
in answer to issue Nos. (9)
and (10), I pass following order :-
ORDER
1 Suit No. 35/2020 is dismissed with
costs.
2 Decree be drawn up accordingly.
Date – 09.05.2025. (PRASHANT C. KALE)
Ad-hoc Judge
City Civil Court, Gr. Bombay.
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
21-05-2025 4.00 pm Mrs. Samruddhi S. Jadhav
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (with Court Room No.) HHJ Shri Prashant C. Kale
(Court Room No.65).
Date of Pronouncement of Judgment/Order 09-05-2025
Judgment/Order signed by P.O. on 21-05-2025
Judgment/Order uploaded on 21-05-2025
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