R.C. Lahoti, J.
(1) This order proposes to dispose of an application under Order 7 Rule 11 (d) of the Civil Procedure Code filed by defendant No.4 and seeking rejection of plaint filed by the plaintiff.
(2) The facts as set out in the plaint may briefly be noticed. The plaintiff, a private limited company owned 86469 equity shares of ten rupees each in M/s. Hmm Ltd, the defendant No.3. In April, 1982 the plaintiff borrowed a sum of Rs. 14 lakhs from defendant No.1 on pledge of the said equity shares. The pledged share certificates were accompanied by blank transfer deeds. In August, 1992, fresh blank transfer deeds were signed by an authorised signatory of the plaintiff and delivered to defendant No.1. In November, 1982, on a request made by defendant No.1, they being in dire need of money, were allowed to pledge the shares only as security with State Bank of India, the defendant No.2. It was specifically understood that the defendant No.1 would utilise the transfer forms only for the purpose of executing documents of security and not to transfer the ownership rights to defendant No.2. Subsequently, the plaintiff made time to time payments on account of interest to the defendant NO.1 by means of bank drafts. In February 1983, the proposal of defendant No.1 asking if the plaintiff was interested in disposing of its shares was declined by the plaintiff. On 9.2.83, the plaintiff telegraphically requested for the return of the pledged shares against payment of the loan amount. There were subsequent requests as well. But the shares were not returned by the defendant No.1 to the plaintiff's bankers, as instructed and requested by the plaintiff. The plaintiff came to know that defendant No.1 had pledged the shares with defendant No.2, handed over the blank transfer forms signed by the plaintiff and that the defendant No.2 had approached the defendant No.3 for transferring the shares in the name of defendant No.2 or any of its nominees. Neither the defendant No.1 nor defendant No.2 had any power or authority to sell the shares nor did any of them have the plaintiff's consent. The plaintiff is entitled to the shares plus the bonus shares as also the dividends and any other benefit accrued on the shares. The defendants No.1 and 2 could not have transferred the shares either in their own name or in the name of any one else without the plaintiff's consent. The plaintiff has always been and is still ready and willing to pay the loan amount and have the shares returned. Any action of any of the defendants obstructing exercise of such right of the plaintiff is void and unenforceable. The act of the defendants No.2 and 4 purchasing the shares is mala fide. The defendant No.4 who has purchased the shares, has not acted with reasonable care, bonafides and good faith. It had full knowledge that the shares were held as security for the pledge. No notice of sale was given to the plaintiff. The sale by defendant No.2 is illegal.
(3) In the background of the above said statement of facts, the plaintiff has sought for the following reliefs :
'ITis, thereforee, respectfully prayed as under :- (a) That this Hon'ble court be pleased to declare that the plaintiff is the absolute owner of 86469 shares Along with bonus shares of M/S. Hmm Ltd., the details of which are mentioned in the Annexure Iii attached with the plaint and are entitled to deal with them in any manner desired by it ; (b) for permanent injunction, restraining the defendants No. 1,2 and 4 from transferring 86469 equity shares and bonus shares either in their name or in the names of their nominees; (c) the decree for mandatory injunction directing the defendants 1,2 and 4 to return the 86469 equity shares and bonus shares along with the blank transfer forms to the plaintiff. (d) the defendants No. 1 and 2 be directed to render accounts in respect of the dividend received by them on the aforesaid shares; (e) The defendant No.3 be refrained permanently from affecting transfer of the said 86469 equity shares and bonus shares of M/S Hmm Ltd. detailed in Annexure Iii of the plaint in the name of defendants No/.1,2 and 4 or any of their nominees; (f) that defendant No.3 be directed to pay all the dividends on 86469 equity shares and bonus shares to the plaintiff; (g) costs of this suit be awarded in favor of the plaintiff against the defendants No.1 and 2; (h) any other relief to which the plaintiff may be considered entitled under the circumstances of the case , may be granted to the plaintiff and against the defendants.'
(4) All the defendants excepting No.3 are contesting the suit by filing written statements.
(5) I.A. No. 10044/94 styled as one under Order 7 Rule 11 (d) has been filed on behalf of defendant No.4 on 21.11.1994.
(6) The learned counsel for defendant No.4 has raised the following four contentions :
(I)Though it is admitted that the plaintiff had pledged the shares with the defendant No.1 and though it is the case of the plaintiff that the transactions in suit have commenced with the pledge made by the plaintiff in favor of defendant No.1 yet the plaintiff has chosen to sue only for declaration of title with consequential relief of injunction, deliberately avoiding seeking relief of redemption of pledge, the suit does not lie as the remedy of a pawnor is to sue only for redemption of a pledge and that too after tendering the amount of loan due. (ii) A bare suit for declaration is also hit by the provisions to section 34 of the Specific Relief Act. (iii) Defendant No.3 is protected by proviso to Section 27 of the Sale of Goods Act. (iv) The plaintiff cannot sue the defendant No.1 who is a mercantile agent.
(7) The application has been vehemently opposed by the counsel for the plaintiff submitting that the application under Order 7 Rule 11 (d) Civil Procedure Code could have been filed only at a preliminary stage of the suit and not after the case having stood posted for trial. Belated filing of application is a mala fide attempt of the defendant No.4 to thwart the progress of the trial by filing a non maintainable application midway the stream of trial; that the application having been filed under clause (d) of rule 11 of Order 7, the scope of hearing must be confined to the question-` whether the suit appears from the statement in the plaint to be barred by any law ', and the defendant No.4 cannot be allowed to urge any ground by reference to clause (a) of order 7 Rule 11 Civil Procedure Code which contemplates rejection of a plaint where it does not disclose a cause of action; and that even on merits the application does not deserve to be allowed.
(8) 1THE suit was filed on 6.5.83. On 24.1.1984, the defendant No.4 had itself moved an application for its impleadment in the suit which application was allowed by the court on 27.9.1985 directing the plaintiff to amend the plaint. Amended plaint was filed and the defendant No.4 filed its written statement in January, 1986. Several proceedings of the court indicate the defendant No.1,2 and 4 fighting the suit tooth and nail at every stage and at every step. On 16.1.1987, the court had expressed an opinion that it would like to hear arguments whether the suit itself was maintainable. Such order was repeated on 20.8.87 and 11.9.1987. 8.2On 15.12.1987, the court formed an opinion that the plaintiff having sought for declaration with consequential relief of accounts was bound to pay ad valorem court fee besides the court fee on relief seeking the accounts. The plaintiff then paid a court fee of Rs. 9240.00 . At two stages there were amendments in the plaint sought for by the plaintiff and allowed by the court. 8.3On 14.8.1991, issues were framed directing the case to be posted for trial. One of the issues framed is - whether the suit as framed is not maintainable. Thereafter, the case has been posted for trial on several occasions. Several interlocutory applications were filed in between and they were disposed of. By the time the present application came to be filed by the defendant No.4 the plaintiff had already examined about eight witnesses in the court. A commission had also been issued by the court for recording statements of witnesses at Bombay. The plaintiff and defendant No.4 have examined their witnesses at Bombay on commission.
(9) It may be noted that the court fee stamps additionally filed by the plaintiff bear the following endorsement :-
'SUIT For Declaration & Permanent Injunction 1.Value of the suit for the purpose of jurisdiction ...........14,0200/ 2. Value of the suit for the relief of redemption declaration & injunction ..........14,00,000/ 3. Value of the suit for the relief of accounts. .. 200/ 4. Court fee paid ................9,240/ Plaintiff through New Delhi Dated 30.1.1988 ( M.L. Verma/Suresh Singh) Advocates For Plaintiff'
(10) At the very outset of hearing on the application I told the learned counsel for the plaintiff that merely because the application filed by defendant No.4 bears the label of Order 7 Rule 11 (d) Cpc, I would not keep the counsel confined to clause (d) alone for the label assigned to the application; I would hear the application on the facts set out therein and reject the plaint if I am convinced that the plaint is liable to be rejected by reference to any of the clauses of rule 11 of Order 7 CPC.
(11) It is true that a prayer seeking rejection of a plaint is ordinarily made, entertained and adjudicated at a preliminary stage of the suit but that is not a hard rule. Order 7 Rule 11 Civil Procedure Code contemplates the `grounds' for rejection of the plaint; it does not contemplate or provide the `stage 'at which the court may exercise such jurisdiction. Excepting the High Court of Allahabad and the Judicial Commissioner's Court of Ajmer, the trend of judicial opinion is that the jurisdiction to reject the plaint can be exercised at any stage of the proceedings and even by an appellate court in appropriate cases. In my opinion if the defendant feels that the plaint is liable to be rejected he is expected to raise such plea at the earliest so that valuable public time and energy is not wasted in trying the suit and pronouncing a dismissal thereof if only a non deserving plaintiff could have been shown an early exit by rejecting the plaint. At the same time if the defendant has permitted the trial to advance without insisting on rejection of the plaint at an early stage, his belated prayer seeking rejection of plaint would not be shown indulgence by the court so as to obstruct the smooth flow of trial in midstream. Any other view to the contrary would open gate for the unscrupulous litigant filing an application for rejection of plaint and insisting on its disposal when the parties especially the plaintiff was before the court ready with the trial to proceed. Such a defendant would be told by the court that he was a non-deserver, branded so by his conduct displaying delay and his acquiescence in trial. He would be rebuffed by rejection of his application before the plaintiff was even called upon to show cause why his plaint be not rejected.
(12) In the case at hand also the application was moved when the recording of statements of witnesses was in progress , rather nearing completion. Ordinarily the defendant's application would not have shown any indulgence at all but for my own having felt inclined to hear the application on merits yielding to the persuasions of the learned counsel for defendant No.4 and guided by the consideration - why not reject the plaint even at this stage if it deserves that treatment and thereby save the public time and energy which would be wasted in the event of court finding itself in agreement with the contention of defendant No. 4 at the fag end of the trial.
(13) The application has been consequently heard on merits. Having heard the learned counsel at length and having given my anxious consideration I am firmly of the opinion that the application deserves to be dismissed on merits for the reasons to follow.
(14) It is true that the plaintiff has not sought for the relief of redemption of pledge specifically and in so many words. The counsel for the plaintiff has in all fairness conceded that the plaintiff having pledged the shares with the defendant No.1 he shall have to seek redemption of pledge, that being the only remedy available to him in accordance with the provisions of Chapter Ix (Sections 172 to 179) of the Contract Act. Still the court should not go guided by technicalities in construing of the language employed in the prayer clause of the plaint but should go by the substance of the reliefs sought for, persuasively appealed the counsel for the plaintiff.
(15) Emphasising the need of making a justice oriented approach by the courts of law, observed their Lordships in Collector Land Acquisition Anantnag vs Mst. Katiji : (1987)ILLJ500SC - 'it must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so'.
(16) 1.THE rule that the plaint shall state specifically the relief which the plaintiff claims and the power of the court to grant general or other relief though not asked for as contemplated by Rule 7 of Order. 7 Cpc, has met with a meaningful interpretation by their Lordships of the Supreme Court in Hindalco Industries Ltd vs . Union of India and others, : (1994)2SCC594 :-
'IT is settled law that it is no longer necessary to specifically ask for general or other relief apart from the specific relief asked for. Such a relief may always be given to the same extent as if it has been asked for provided that it is not inconsistent with that specific claim which the case raised by the pleadings. The court must have regard for all the reliefs and look at the substance of the matter and not its forms. It is equally settled law that grant of declaring relief is always one of discretion and the court is not bound to grant the relief merely because it is lawful to do so. Based on the facts and circumstances the court may on sound and reasonable judicial principles grant such declaration as the facts and circumstances may so warrant. Exercise of discretion is not arbitrary. If the relief asked for is as of right, something is included in his cause of action and if he establishes his cause of action, the court perhaps has been left with no discretion to refuse the same . But when it is not as of right, then it is one of the exercise of discretion by the court. In that event the court may in given circumstances grant which includes `may refuse' the relief. It is one of exercising judicious discretion by the court.'
16.2In Shamsher Singh vs Rajinder Prashad : [1974]1SCR322 , it was said :-
'MERE astuteness in drafting the plaint will not be allowed to stand in the way of the court looking at the substance of the relief asked of '
16.3How a plaint has to be read, was told in L. Janaki Rama Ayer And Ors Vs . P.M. Neelkanth Iyer : AIR1962SC633 :- @SUBPARA = 'In construing the plaint the court must have regard to all the relevant allegations made in the plaint and must look at the substance of the matter and not its form' 16.4.So was the view taken in Uoi Vs Pearl Hosiery Mills . The plaintiff had sued for declaration alone specifically stating that no consequential relief was asked for and the same was not necessary in the circumstances of the case. Still the court observed :
'THIS averment in the plaint would not affect the real situation which would depend upon the interpretation of the plaint read as a whole and specially the prayer clause in the same '.
The Court concluded the case was one for declaration and consequential relief and not for declaration simpliciter.
(17) The Code of Civil Procedure does not provide for a form of decree to be passed in a case of redemption of pledge as it does in suits relating to mortgages of immoveable property. The provisions of Contract Act too do not detail a provision contemplating suit for redemption of pledge.
(18) What is redemption It is realisation of a right to have the title of pledged property restored free and clear of the pledge by performing the pawnor's obligation essential for the purpose and restoration of physical possession of the pledged property with the plaintiff if the delivery of possession accompanying the pledge was not constructive merely.
(19) A reading of the plaint shows all the relevant facts for determining a case of redemption of pledge having been set out in the plaint. The plaint alleges an illegal parting of the pledged property by the pledgee. It alleges the readiness and willingness on the part of the plaintiff to return the loan amount. The plaintiff alleges the plaintiff's bankers having been instructed and the pledgee having been requested to return the security to the plaintiff's banker obviously against payment of loan amount. The custody of the pledged shares is sought for though the relief sought for is styled in the form of a mandatory injunction. In the opinion of this court, the ingredients of the pledge and entitlement of the plaintiff to redeem he same having been pleaded the reliefs sought for are to be construed as substantially seeking redemption of pledge. Even otherwise on the facts alleged by the plaintiff being found proved, the court would by reference to Order 7 Rule 7 Civil Procedure Code feel inclined to grant relief of redemption to the plaintiff though not specifically prayed for.
(20) The suit is not for declaration alone. Consequential relief is prayed for. The suit is not hit by provisions to S. 34 of the Specific Relief Act.
(21) Dauntless the learned counsel for defendant No.4 still submitted that the plaint does not allege the loan amount having been actually tendered by the plaintiff to the defendant No.1 and the amount also not having been tendered in the court also suit for redemption of pledge would not lie and so also the plaint ought to be rejected. No specific statutory provision has been relied on in support of the contention but heavy reliance has been placed on the ratio of Division Bench decision of Ap High Court in the case of Sri Raja Kakarlapudi vs . Andhra Bank Ltd : AIR1960AP273 and as the Madras Bombay and Patna view referred to in paragraphs 65 to 68 of the report.
(22) 1.PARA 68 of the Andhra Pradesh High Court Division Bench decision is extracted and reproduced hereunder :-
'(68)In Air 1947 Bom 217 Chagla, J., after a review of English authorities held as follows :- (i)that although the pledgee may sell the goods unauthorisedly or unlawfully, the contract of pledge is not put an end to and the pledgor does not become entitled to the possession of the goods pledged without tendering the amount due on the pledge; or, in other words, without seeking to redeem the pledge, and; (ii)that without a proper tender of the amount due on the pledge, the only right of the pledgor in respect of an unlawful or unauthorised sale is in tort for damages actually sustained by him.'
We are in accord with the view of Chagla J., that in case of an unauthorised sale by a Pledgee the relief that the pledgor can seek is to file a suit for redemption by depositing the money, treating the sale as if it had never taken place, or where the suit for redemption is not filed, to ask for damages on the foot of conversion. The present suit is neither the one nor the other. It is a suit merely for declaration with an ancillary relief for an injunction restraining the 3rd defendant from registering the shares in the name of the 2nd defendant. We are of the opinion that the suit as framed is not sustainable.' 22.2It will be seen that it is on the authority of the view taken by Chagla, J. in Air 1947 Bom 217 that the Andhra Division Bench has formed an opinion that a suit for redemption of pledge can be filed only by depositing the money. 22.3There are three other decisions respectively of Madras, Bombay and Patna High Courts referred to in the preceding paragraphs 65, 66 and 67,of Raja Kakarlapudi's case but those decisions have not taken that view which has been taken by the Division Bench of Andhra Pradesh High Court. 22.4I have, thereforee, carefully gone through the decision in Official Assignee VS. Madholal Sindu, 1947 Bom 217. It is a Division Bench decision by Stone, C.J.and Chagla,J. Both the learned Judges have recorded separate opinions though in the ultimate conclusions they have agreed. 22.5.In Madho Lal Sindhu's case (supra) there was a pledge of shares. The plaintiff's right to redeem was contested by one of the defendants claiming a lien for a sum of Rs.1,45,000.00 . The plaintiff had filed a suit for declaration that defendant had no lien for the sum of Rs.1,45,000.00 . The plaintiff also brought moneys into court to be paid in respect of the lien which he had admitted. A co-defendant filed a counter claim seeking redemption of shares. The learned trial Judge negatived the lien and also dismissed the counter claim preferred by the co-defendant seeking redemption and decreed the plaintiff's suit for declaration. A sale of shares had taken place without serving a notice on the pledgor under Section 176 of the Contract Act. The pledge had taken a plea that absence of notice under Section 176 of Contract Act was a mere irregularity which did not vitiate the sale or make it void. Two decisions are referred by Chagla, J. which are Johnson VS. Stear 1863 15 Cb 330 and Halliday VS. Holgate (1868) 3 Ex.299. Chagla, J. examined these two decisions and utilised the opportunity for setting down the principles deducible from those decisions. These principles have been referred to by the Division Bench of Andhra Pradesh in its judgment. 22.6.It is important to note that the question whether a suit for redemption of pledge could be filed without tendering or depositing the pledge money did not arise for decision in the case before Chagla, J. The dismissal of claim for redemption was upheld for reasons different than the non-tender or non-deposit of the pledge money by the pledgor. Thus the twin principle which have been deduced by Chagla, J. in Madho Lal Sindu's case (supra) and reproduced in para 68 by the Division Bench of Andhra Pradesh do not bind me as precedent. 22.7.I may make it clear that if the Bombay and Andhra Pradesh decisions go on to the extent of holding that a suit for redemption of a pledge cannot be filed unless preceded by a tender or accompanied by a deposit of the pledge money then I express my respectful disagreement with the view so taken. No provision in any statute and no principle of law has been brought to my notice which may pursuade me taking a view in line with the view taken by the Andhra Pradesh High Court. 22.8.Here I may utilise this opportunity for extracting other principles of law laid down by Chagla,J. in his illuminating judgment which are based on several authorities. They are :- (i)The provisions of Section 176 Contract Act are mandatory. The applicability and sweep of Section 176 unlike several other provisions on the same subject is not eclipsed by the phrase- 'in the absence of a contract to the contrary.' The notice that is to be given to the pledgor of the intended sale by the pledgee is a special protection which statute has given to the pledgor and parties cannot agree that in the case of any pledge, the pledgee may sale the pledged articles without notice to the pledgor (para 55) (ii)If a sale is held of the shares under authority of the pledgor then it could convey to the purchaser full title in the shares; sale under Section 27 of Sale of Goods Act title conveyed to the purchaser would not be a title better than that of the seller. (Para 56). (iii) Notice under Section 176 of Contract Act must be given before the power of sale can be exercised. If the notice is essential, the purchaser, however innocent cannot acquire a title better than his vendor has (Para 56). (iv)Right to redeem under Section 177 can be exercised right up to time the actual sale of the goods pledged takes place. The actual sale referred to in Section 177 must be a sale in conformity with the provisions of Section 176 which gives the pledgee the right to sale; and if the sale is not in confirmity with those provisions, then the equity of redemption in the pledgor is not extinguished (para 57). (v)The pledgor has a right to call upon the pledgee to redeem the shares or payment of the debt. If the pledgee has transferred the shares, he is entitled to call upon the transferee for the same because the transferee does not acquire anything more than the right, title and interest of the pledgee which is to retain the goods as a pledge till the debt is paid off. If the pledgor may not be in a position to redeem, he may contend himself with merely suing the pledgee for conversation if any damage has resulted by reason of the goods being sold without proper notice (para 59). (vi)There is no analogy between Section 69(3) of T.P. Act and Section 176 Contract Act; there is a marked contrast between the two. Former protects the innocent purchaser, the latter does not do so. In the absence of any provision in Section 176 of the Contract Act in favor of the innocent purchaser, to import such protection from the provisions of another statute is with respect wholly fallacious and unjustifiable. It is always dangerous to draw analogy between one statute and another; 22.9Vide para 64 Chagla, J. did not agree with the following statement of law contained in Coote on Mortgages (Volume-II, 9th Edition page 1472):- 'The pledgee has on default a right to sell the pledge if the payment is to be made on a certain day; otherwise not; but a sale before default would be a conversion; yet the sale, whether wrongful or not, passes the title to the vendee as against the pledgor. 22.10Chagla, J. has expressed his approval and agreement with the following statement of law in Story's Law of Bailments, (8th Edition, page 272):-
'A pledge of stock has no legal right to sell the same without notice to the pledgor and such sale passes no title as against the pledgor, even to a bonafide party'.
22.11The above said principles deducible from the opinion recorded by Chagla,J. with which I find myself in full agreement lend strength to the plaintiff's case. It may also be noticed that the suit before the Division Bench of Andhra Pradesh was merely for a declaration with ancillary relief restraining registration of the shares. The suit was held to be not maintainable, also hit by Section 42 of the Specific Relief Act (old). It was not a suit for redemption which the present suit has been held to be by me.
(23) Division Bench decision of Madras High Court in S.L. Ramaswamy Chetty vs. Msapl Palaniappa Air 1930 Mad 364, was relied on by both the parties and has been referred to by the Andhra Pradesh High Court too in the above-referred to decision. It will be useful to extract and reproduce the following statement of law there from :-
'IT was suggested that the non- maintainability of the suit was due to the respondent's not having tendered or his not having been ready and willing to pay the amount due before the suit, which it seems is an essential condition of bringing a suit for redemption. This is a misapprehension. If a pledgor brings a suit for redemption without first tendering the money to the pledgee and it turns out that the suit was unnecessary because the pledgee was always ready and willing to deliver up the property pledged without suit if the debt had been paid, the plaintiff will no doubt be made to pay the costs of the defendant but his suit cannot be dismissed. But if it turns out that in the circumstances which proceeded the suit, it would have been perfectly useless to tender the money to the pledgee as for instance where the pledgee declares in advance his inability to return the pledged property, in such a case if the pledge was at fault in putting it beyond his power to return the goods the pledgor cannot be defeated on account of his not going through a useless ceremony of tender. S. 51, Contract Act makes the matter clear when it declares that neither party to reciprocal promises need perform his promise unless the other party is ready and willing to perform his promise.
(24) To my mind the correct position of law appears to be this. Tender of money by the pawnor and return of pledged property by the pawnee are mutual reciprocal and simultaneous obligations of the two parties. Ordinarily, the pawnor must tender the money and hand it over the same to the pawnee if the latter is returning the pledged property to the pawnee. But there can be exceptions. The pawnee might have in advance declared his inability to return the pledged property. The pledged property might have been lost or destroyed and the fact is known to the pawnor. The pledged property might have earned yield or benefits which according to the contract is liable to be adjusted in payment of the loan amount in which case an account has to be taken and the liability of the pawnor might have stood discharged already. If any such circumstance has not preceded the institution of the suit still if the pawnor brings a suit for redemption without first tendering the money to the pledgee and it turns out that the suit was unnecessary because the pawnee was always ready and willing to give back the pledged property the plaintiff will be saddled with the defendant's costs. If the suit is filed without tendering the money and it is found that the pledged property cannot be returned to the pawnor, then the pawnor may have a decree in damages. In either case his suit cannot be dismissed.
(25) Section 27 of the Sale of Goods Act reads as under :-
'SALEBY Person Not The owner:- Subject to the provisions of this Act and of any other law for the time being in force, where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell : Provided that, where a mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made buy him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorised by the owner of the goods to make the same; provided that the buyer acts in good faith and has not at the time of the contract of sale notice that the seller has no authority to sell.'
(26) For several reasons the contention of the learned counsel for defendant No.4 seeking rejection of plaint based on the contentions emanating from the proviso to S. 27 above said, cannot be sustained. Firstly, the plaint does not allege the defendant no.1 to have been in possession of the shares as a mercantile agent. Secondly, no provision of law nor any case law has been brought to my notice which requires the ingredients of proviso to S. 27 to be alleged positively in negative form by the plaintiff filing a suit in such set of facts as may probably attract the applicability of Section 27. Thirdly, the plaint does allege malafides, lack of bonafides and lack of due care and caution on the part of the defendants. The plaint specifically alleges invalidity of sale by defendant No.1 for two reasons : firstly, because there was no notice to the plaintiff before the sale by defendants No.1 and 2 ( as contemplated by Section 176); and secondly the plaint alleges the knowledge on the part of defendant No.2 of the shares having been merely pledged with defendant No.1 and thereby implying that the defendant no.2 and 4 could not have had acquired a better title then what the defendant No.1 had.
(27) Let it be noted that when called upon to exercise jurisdiction to reject a plaint under Order 7 Rule 11 Civil Procedure Code the court will take into consideration the plaint and the plaint alone. Documents admitted or undisputed and the documents so filed with the plaint as to form part thereof may also be looked into. The court cannot and shall not consider the defense, the pleas taken in the written statement and/or the evidence available on record for the purpose of rejecting the plaint. A jurisdiction to dismiss the suit has to be distinguishes from a jurisdiction to reject the plaint. As on this day the court is neither called upon to, nor can, exercise a jurisdiction to dismiss the suit midway the trial.
(28) Though the learned counsel for the defendant No. 4 has cited Howrah Trading Co. vs. I.T. Commr Air 1950 S.C. 775; Narsayya & Sons Vs S.S. Light Railway. Air 1955 Hyd 193, Rama Rao vs. Dasarathy Rao Air 1955 Mys 43, Fuller vs. Glyan Mills,Currie & Co, [1914] 2K.B.168 but it is not necessary to deal with them. They all refer to rules of estoppel and question of good faith under Section 27 of the Sale of Goods Act. They may have relevance when the suit may come up for final hearing but they do not lay down any principles of use for deciding the question of rejection of plaint.
(29) The learned counsel for the plaintiff has cited Full Bench decision in Raghunandan Rai vs R. Pandey, Air 1921 All 353and a Division Bench decision in Dinanath Rai vs Rama Rai, : AIR1926Pat512 holding that the tender of mortgage money was not a condition precedent to institution of suits but in my opinion such reliance is misconceived because the two rulings lay down law by reference to S.60 of the Transfer of the Property Act which cannot be stretched to bear on the issue as to redemption of pledges.
(30) For all the foregoing reasons, no case is made out for rejection of plaint. I.A. No. 10044/94 (under Order 7 Rule 11 Civil Procedure Code filed by defendant No.4) is rejected.