Suresh Khemka and anr. Vs. Ashok Kumar Agarwala and ors. - Court Judgment

Excerpt:
[mohan shantanagouuar and s.abdul nazeer and a.s.bopanna. jjj.] this misc.w. is filed under order vi rule 17 of cpc r/w. articles 226 and 227 of the constitution of india, praying to permit the petitioners to delete the last sentence from paragraph-9 which reads as "petitioner has not left the bharatiya janatha party at all" and in its place the following sentence that "the petitioners have riot joined bharatiya janatha party at all and the findings of the 2nd respondent to the contrary are perverse and are liable to be set aside", may be substituted and accordingly the petitioners may be permitted to amend para-9 of the petitions to meet the ends of justice.the court: the claim in the suit is in respect of certain shares said to have been held by the plaintiffs in the fourth defendant company. the plaintiffs version is evident from a letter dated march 5, 2010 issued to the first defendant. it is the plaintiffs case that the first defendant had cordial business relations with the first plaintiff who had approached the first plaintiff in the year 2002 for purchase of 3600 shares in the fourth defendant company held by the plaintiffs. 2 according to the plaintiffs, the first plaintiff did not agree to sell such shares since the shares of such company were then neither listed nor frequently traded. the plaintiffs say that the first defendant obtained the share certificates relating to the said 3600 shares and also obtained share transfer forms relating thereto on the first defendants representation that the first defendant would not act upon the share transfer forms without previous reference to the first plaintiff. the plaintiffs claim that the fourth defendant, at the relevant point of times was steeped in a financial crisis which it has now come out of and its shares have been listed at an opening price in excess of rs.29,000 per share on the calcutta stock exchange. the letter of march 5, 2010 calls upon the first defendant to return the said shares and claims that on any conservative estimate, the value of the shares would have been in excess of rs.10 crore. the immediate order that the plaintiffs seek is for an injunction on the first defendant and his wife and son, the second and third defendants, respectively, from disposing of the shares. the plaintiffs also pray for an order restraining dividends in respect of such shares being received by the first three defendants or, at any rate, from these defendants appropriating the amount received on account of dividend. what is evident from the letter of march 5, 2010 is that the share certificates and the transfer forms relating thereto were handed over by the first plaintiff to the defendant no.1 in or about the year 2002. the plaintiffs have been unable to show, despite a specific query from court, as to whether the plaintiffs received the dividends from the fourth defendant company during the interregnum or even as to whether the plaintiffs as share-holders received notices for the annual general meetings of the fourth defendant company for years between 2002 and 2010. at the very highest and considering that the first plaintiff is engaged in dealing with shares, there is a money claim that the plaintiffs may have in respect of the transfer of shares made in the year 2002 for which the plaintiffs have apparently not been paid. it is difficult to imagine that a person conversant in shares would make over executed share transfer forms and scrips without receiving consideration or that the claim would be made some seven or eight years after the transaction was concluded. implicit in the petition is the admission that the shares now stand registered in the names of the first three defendants or any two of them. even if the plaintiffs case is taken at the highest, there is a money claim that is apparent. the plaintiffs would not be entitled to elevate themselves to the status of a secured creditor 4 either by obtaining an order of injunction in respect of the shares held by the first three defendants in the fourth defendant company or by seeking an order in the nature of attachment before judgment in respect of the dividends received or due to be received by the first three defendants from the fourth defendant company. in any event, the fourth defendant company is a listed company and its shares are freely transferable. since the best arguable case of the plaintiffs would not warrant an order of injunction or attachment of the kind that has been sought, g.a.no.3025 of 2010 is dismissed without calling for any affidavits. there will be no order as to costs. it will, however, be open to the plaintiff to take expeditious steps in the suit. the defendant nos.1 to 4 are represented and such defendants waive formal service of the writ of summons. all such defendants have already received a copy of the plaint which is appended to the petition in g.a.no.3025 of 2010. the plaintiff will cause the writ of summons to be served on the other defendants expeditiously. written statements should be filed by the appearing defendants within four weeks after the reopening of court following the puja vacation. documents should be discovered by january 31, 2011; inspection forthwith thereupon 5 and the plaintiff will have liberty to week an early listing of the suit in february, 2011. since no affidavit has been called for, the allegations contained in the petition should not be deemed to have been admitted by the defendants. urgent certified photocopies of this order, if applied for, be given to the parties subject to compliance with all requisite formalities.

Judgment:
The Court: The claim in the suit is in respect of certain shares said to have been held by the plaintiffs in the fourth defendant company. The plaintiffs version is evident from a letter dated March 5, 2010 issued to the first defendant. It is the plaintiffs case that the first defendant had cordial business relations with the first plaintiff who had approached the first plaintiff in the year 2002 for purchase of 3600 shares in the fourth defendant company held by the plaintiffs. 2 According to the plaintiffs, the first plaintiff did not agree to sell such shares since the shares of such company were then neither listed nor frequently traded.

The plaintiffs say that the first defendant obtained the share certificates relating to the said 3600 shares and also obtained share transfer forms relating thereto on the first defendants representation that the first defendant would not act upon the share transfer forms without previous reference to the first plaintiff. The plaintiffs claim that the fourth defendant, at the relevant point of times was steeped in a financial crisis which it has now come out of and its shares have been listed at an opening price in excess of Rs.29,000 per share on the Calcutta Stock Exchange.

The letter of March 5, 2010 calls upon the first defendant to return the said shares and claims that on any conservative estimate, the value of the shares would have been in excess of Rs.10 crore. The immediate order that the plaintiffs seek is for an injunction on the first defendant and his wife and son, the second and third defendants, respectively, from disposing of the shares.

The plaintiffs also pray for an order restraining dividends in respect of such shares being received by the first three defendants or, at any rate, from these defendants appropriating the amount received on account of dividend. What is evident from the letter of March 5, 2010 is that the share certificates and the transfer forms relating thereto were handed over by the first plaintiff to the defendant No.1 in or about the year 2002.

The plaintiffs have been unable to show, despite a specific query from Court, as to whether the plaintiffs received the dividends from the fourth defendant company during the interregnum or even as to whether the plaintiffs as share-holders received notices for the annual general meetings of the fourth defendant company for years between 2002 and 2010.

At the very highest and considering that the first plaintiff is engaged in dealing with shares, there is a money claim that the plaintiffs may have in respect of the transfer of shares made in the year 2002 for which the plaintiffs have apparently not been paid. It is difficult to imagine that a person conversant in shares would make over executed share transfer forms and scrips without receiving consideration or that the claim would be made some seven or eight years after the transaction was concluded.

Implicit in the petition is the admission that the shares now stand registered in the names of the first three defendants or any two of them. Even if the plaintiffs case is taken at the highest, there is a money claim that is apparent.

The plaintiffs would not be entitled to elevate themselves to the status of a secured creditor 4 either by obtaining an order of injunction in respect of the shares held by the first three defendants in the fourth defendant company or by seeking an order in the nature of attachment before judgment in respect of the dividends received or due to be received by the first three defendants from the fourth defendant company. In any event, the fourth defendant company is a listed company and its shares are freely transferable.

Since the best arguable case of the plaintiffs would not warrant an order of injunction or attachment of the kind that has been sought, G.A.No.3025 of 2010 is dismissed without calling for any affidavits. There will be no order as to costs. It will, however, be open to the plaintiff to take expeditious steps in the suit. The defendant Nos.1 to 4 are represented and such defendants waive formal service of the writ of summons. All such defendants have already received a copy of the plaint which is appended to the petition in G.A.No.3025 of 2010.

The plaintiff will cause the writ of summons to be served on the other defendants expeditiously. Written statements should be filed by the appearing defendants within four weeks after the reopening of Court following the Puja vacation. Documents should be discovered by January 31, 2011; inspection forthwith thereupon 5 and the plaintiff will have liberty to week an early listing of the suit in February, 2011.

Since no affidavit has been called for, the allegations contained in the petition should not be deemed to have been admitted by the defendants.

Urgent certified photocopies of this order, if applied for, be given to the parties subject to compliance with all requisite formalities.