Final Order 2

Order Details: Copy of Judgment
Pdf Text: Suit No. 3370/2019 Judgment (Exhibit-28)
MHCC010030262019
Presented on : 14.03.2019
Registered on : 16.12.2019
Decided on : 09.05.2025
Duration : 06Y, 01M,27D
IN THE BOMBAY CITY CIVIL COURT AT GR. BOMBAY
S. C. SUIT No.3370 OF 2019
Exhibit- 28
Kumar Devdas Advani )
Age 61 years, Indian Inhabitant )
Residing at P/08, Yvonne Nahar )
Amrit Shakti, Chandivali, )
Powai, Mumbai – 400 072. ) … Plaintiff.
Versus
1. Sukhbir Singh )
Adult, Indian Inhabitant )
Residing at Sukhmani Bhawan, 136 )
Sunrise Park, Driving In Road, )
Ahmedabad- 380054. )
2. 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. )
3. 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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4. Century Textiles 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 No.1 is heard as Ex-parte.
Shri. M.K. Jariwala, Ld. Advocate for defendant Nos.2 and 3.
Shri. Kezer Kharawala, Ld. Advocate for defendant No.4.
JUDGMENT
The instant suit is for declaration and mandatory
injunction.
2. In short, the case of the plaintiff is that defendant No. 1 is
the original share holder of the shares which are sold to the plaintiff.
Defendant Nos. 2 and 3 are the share broker who worked as an agent in
the said sell of shares and defendant No.4 is a company registered
under Companies Act, whose shares were sold to the plaintiff. Share
bearing Folio No. SU6132 and share certificate No. 812522 having
number of shares 050 of Century Textiles and Industries Ltd.
(hereinafter referred as ‘the suit shares’). The plaintiff had negotiations
with defendant No.1 and has purchased the said suit shares of
defendant No.4 company from defendant No.1. The plaintiff paid the
consideration amount to defendants. The original shares and the share
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transfer forms were signed by defendant No.1 and same were handed
over to the plaintiff alongwith original shares certificates. The plaintiff
had taken the signed transfer Deed/forms from defendant No.1 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 No.1 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 4 to sign
fresh transfer forms. However, defendant No.1 refused to sign the fresh
transfer forms. Hence, this suit.
3. Defendant No.1 is heard ex-parte.
4. Defendant No.2 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
No.2 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. 3 herein. All transactions in shares and
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securities between this defendant and defendant No. 3 were officially
traded over the National Stock Exchange as the M/s. Surupam Infin
Services Pvt. Ltd. were 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 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. 4 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. 3.
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. 4 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. 4 company
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
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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.2 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. 3 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 No. 1 as the transferor. Defendant No.2 denied that in the
month of November, 2018, the plaintiff had any talk with it 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.3 filed written statement at Exhibit-12 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.3 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
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
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around 01.11.1999 and the National Stock Exchange, over which and
under its Bye-laws the purported transaction was carried out. Thus,
Madhuvan securities was a necessary party in the present suit. So also,
the National Stock Exchange becomes the necessary party to the present
suit. There is no privity of contract between the plaintiff and defendant
No.3 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. 3 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
20-08-1999 under the supervision of the Registrar of Companies,
Mumbai. 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, but the
name of the transferee is blank; which raises a reasonable doubt as to
bona-fide of the plaintiff. Defendant No.3 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
that the suit shares were never sent to defendant No. 4 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
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year 2019 i.e. after nearly about two decades.
9. The present suit is hopelessly barred by the law of
limitation. Defendant No.3 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. 4 is incorporated. Defendant No.3 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. 4 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.4 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.4 denied all
and in the singular allegations and insinuations contained in the plaint.
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.
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11. My learned predecessor (HHJ R. R.Bhagwat) framed issues
at Exhibit-15. I have reproduced them alongwith my findings thereon :-
Sr. No. ISSUES FINDINGS
1. Does the plaintiff prove that he purchased
suit shares from defendant No.1 ? …...………...No
2. Does the plaintiff prove that he lodged
suit share with defendant No.4 company
for effecting transfer in his name ? …...………...No
3. Does the plaintiff prove that defendant
No.4 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.4
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
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
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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 is the original share holder and shares
were sold to the plaintiff. Defendant Nos. 2 and 3 are the share brokers
who worked for defendant No.4. The original share certificates were
handed over to the plaintiff by signing the share transfer form by
defendant No.1. 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 No.1 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. 2 AND 3 :-
13. It is submitted by defendants that in all 1800 shares of
defendant No.4 company including suit share were delivered to the
plaintiff by defendant No.2 under its delivery memo 10/11, 10/12
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
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for dismissal of the suit.
ARGUMENTS ON BEHALF OF DEFENDANT NO.4 :-
14. Defendant No.4 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.4 company submits to
the orders of this court.
REASONS FOR FINDINGS
15. To substantiate his 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 certificate in the name of defendant
No.1 at Exhibit-21 and share transfer form at Exhibit-22. 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
declaration and mandatory injunction is filed. Scrutinizing the evidence
adduced on record the document Exhibit-21 i.e. share certificate is not
having the name of transferee. The share transfer form is not having
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any fees affixed to it. The share transfer form is having stamps of G. N.
G. Investment Private Limited dated 04.09.1999, 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.4 company and same came to
be rejected by defendant No.4 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.4
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
20.08.1999 and admittedly the name of the plaintiff is not appearing on
form Exhibit-22. However, the plaintiff has relied upon the said transfer
form. Certainly, when the share certificate form were presented to
Registrar Companies in August-1999 and they were not acted upon, 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
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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
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
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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. 3370/2019 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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