Udayjeet Parkash vs S.S. Arora And Ors.
1996 Latest Caselaw 45 Del

JUDGMENT

Devinder Gupta, J.

(1) This is an application under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, (hereinafter referred to as "the Code") filed by M/s. Anil sehgal and Co. (hereinafter referred to as "the applicant") for directions against defendant No.2 to transfer 6900 shares of the plaintiff in its favour.

(2) On 3rd March, 1994, a suit was filed by the plaintiff against six defendants, seeking a decree for recovery of Rs. 5,05,000.00 against Shri S.S. Arora, defendant No.1 as also a decree for permanent prohibitory injunction against the defendants from selling, transferring, alienating or registering the equity shares mentioned in Annexures - A, B, C, D and E, in favour of any person whatsoever. Along with the suit an application under Order 39 Rules 1 and 2 of the Code was also filed. On 11th March, 1994, while directing the summons to be issued, on interim application, an ex-parte interim relief was granted directing that any transfer of shares shall be subject to the outcome of the suit.

(3) On 12th September, 1994 an application was made by M/s. Anil Seghal and Co. for being imp leaded as one of the defendants and to con test the suit filed by the plaintiff. The application was allowed on 23rd November, 1994 and the applicant was imp leaded as defendant No. 7 in the suit. On 15th November, 1994 this application was moved for aforementioned directions. It is alleged that on 23rd November, 1993, applicant accepted an order to sell 7,000 shares of defendant No. 2 from defendant No. 1. The applicant was intimated by defendant No, 1 that the order to sell the shares had come from the plaintiff. Shares were delivered to the applicant by defendant No. 1 along with transfer deeds duly signed by the plaintiff. The applicant was able to sell the shares through Stock Exchange for consideration. Payment in respect of the shares was made by the applicant after deducting brokerage. Cheques for the sale were duly given to defendant No. 1. It is alleged that cheques were got encashed by M/s. South Delhi Investments, namely, defendant No. 1. Subsequent to the applicant delivering of the shares in the market on 3rd December, 1993 to M/s. Sant Ram & Sons, the members of Delhi Stock Exchange, the same were given to their clients M/s. Raj Kumari Khanna of Lucknow. Meanwhile, the plaintiff had lodged F.I.R. at Police Station defense Colony staling that he had lost the shares on 7th December, 1993. It is stated that F.I.R. lodged by the plaintiff was false and fabricated and had been lodged with mala fide intention and ulterior motives to cheat people, after having himself sold the shares in open market. The applicant has narrated the details of the alleged main fide acts of the plaintiff. It is alleged that the applicant on enquiry learnt that defendant No. 1 had paid the money; which he had realised on encashment of cheques; to the plaintiff but as a result of the lodging of F.I.R. by plaintiff and filing of the instant suit by him, the applicant who is holding 6,900 shares of defendant No. 2 with him bona fide cannot dealt with the same and order deserves to be passed calling upon defendant No. 2 to transfer the said shares of plaintiff in applicant's name. Thus according to the applicant, it was the plaintiff who had handed over the shares to defendant No. 1 for being transferred. It was for valuable consideration that the applicant purchased the same on payment of full consideration by means of cheques delivered to defendant No. 1, who is stated to have paid the amount to the plaintiff and now due to the acts of the plaintiff, the applicant who is a bonafide transferee cannot further transfer the shares, due to which it is alleged that the applicant is suffering incalculable loss. It is alleged that defendant No. 2 has declined to transfer the shares in the name of the applicant, who is the bonafide transferee. In these circumstances a direction is sought from the Court directing defendant No. 2 to transfer the shares in applicant's name.

(4) This application is vehemently contested by the plaintiff on facts as well as on law. Maintainability of the application by the applicant, who was allowed to be added as a party to the suit, during the pendency of the suit, without filing any counter claim is under challenge. Plaintiff has also disputed the fact that he never received the amount from defendant No.1 with respect t to the shares of defendant No.2 company. These were never handed over to defendant No.1 for being transferred.

(5) Having heard learned Counsel for the parties, who made elaborate and considerable submissions on merits of their respective claims, I am of the view that it will not be permissible in this application to grant any relief to the applicant for more than one reason. Subject matter of the application are 6900 shares and the same are a part of the shares certificates for which claim has been made by the plaintiff against defendants 1 and 2. The shares are of defendant No. 2 company and are registered with it. No claim is made in the suit against the applicant, who was added as a defendant on his own application. No counter claim has been filed by the applicant in the suit. There is also an injunction operating that any transfer of the shares, which are subject matter of the suit, if made, will be subject to the result of the pending suit meaning thereby that in case any transfer will take place with respect to the shares, which are subject matter in suit, thi same will have to abide by the ultimate decree, which is to be passed in the case. I he applicant is claiming a relief in mandatory form against one of the defendants that during the pendency of the suit, the shares be ordered to be transferred in his name, which are presently registered in the name of the plaintiff. Even for grant of such mandatory injunction, it will be necessary for the applicant to satisfy the the three ingredients of there being a strong prima facie case, the balance of convenience and irreparable loss. All other conditions, even if, can be said to have been satisfied, it is not a case which can be said to be of such a nature where an order in the mandatory form can be issued at the behest of a defendant, who has neither lodged a counter claim, nor against whom any relief in the suit has been prayed. Loss, if any, likely to be occasioned to the applicant/defendant, due to the filing of the suit by the plaintiff and obtaining injunction, is not such which cannot be compensated in terms of money. Applicant otherwise has an independent right to claim damages against the plaintiff or against any other person including defendant No.1, in case due to their acts any loss is occasioned to him. Loss or damage, if any, likely to be suffered will not be such, which cannot be said to be irreparable one, since the same can very well be compensated in terms of money. This factor alone disentitles the applicant from claiming any relief in this application, which is accordingly dismissed. S. No. 567194 List for directions before the appropriate Bench on 2nd February, 1996,