Delhi High Court
Abb Ltd. vs Sandeep Suri And Ors. on 16 February, 2012
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 74/2004
% 16th February, 2012
ABB LTD. ..... Appellant
Through : Mr. Nikhilesh Krishna, Advocate.
versus
SANDEEP SURI AND ORS. ..... Respondents
Through : Mr. Sunil Magon, Advocate for R-1.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J. (ORAL)
1. The challenge by means of this Regular First Appeal (RFA) filed
under Section 96 of Code of Civil Procedure, 1908 (CPC) is to the
impugned judgment of the trial Court dated 3.11.2003 by which the suit of
the respondent/plaintiff for declaration and injunction for ownership with
respect to 600 shares of the appellant-company was decreed. I may note
that out of the total of 600 original shares which were in dispute, presently,
the disputes only remains for 50 shares, inasmuch as, 500 shares were
transferred to the respondent No.1/plaintiff during the pendency of this
appeal and another 50 shares were transferred even prior to the institution
of the suit.
2. The trial Court has decreed the suit by observing that the claim of
respondent No.1/plaintiff with respect to the disputed shares was lodged in
1997 with the appellant/defendant No.1, but the appellant/defendant No.1
allowed the shares to be dematerialized and transferred much subsequently
in the year 1999 and, therefore is liable to respondent No.1/plaintiff.
3. Learned counsel for the appellant, though at the outset, sought to
urge that the trial Court by its order dated 24.11.1998 had vacated the
interim injunction which was granted in favour of respondent
No.1/plaintiff, and therefore, a lot of 50 shares were allowed to be
dematerialized, however, it transpires that respondent No.1/plaintiff had
filed appeal against the said order dated 24.11.1998 and the appellate Court
on 25.2.1999 injuncted the transferring by the appellant/defendant No.1
and other defendants/respondents of the complete lot of 600 shares
including the dematerialized portion of 50 shares.
4. Though in the interregnum between 24.11.1998 and 25.2.1999 the
lot of 50 shares were allowed to be dematerialized, the learned counsel for
the appellant, however, could not dispute the legal position that an interim
order cannot finally destroy the legal rights of a person. Further, it could
not be disputed that a period of 90 days in law is available as per
Article 116 of Limitation Act, 1963 to challenge an order to a High
Court of a lower Court, however, without waiting for this period of
limitation of 90 days to expire, appellant/defendnat No.1 allowed the shares
to be dematerialized and transferred to defendant No.7 who had no title to
the said shares.
5. Surely, the appellant/defendant No. 1 could have informed defendant
No.7 that it was entitled to wait for the period of 90 days for filing of an
appeal under Article 116 of the Limitation Act, however, the decision of
the appellant/defendant No.1 to transfer the shares in haste even before the
expiry of period of limitation before 90 days is clearly something which the
appellant/defendant No.1 ought not to have done.
6. At this stage, learned counsel for the appellant prays that in view of
the aforesaid facts the appellant/defendant No.1 will transfer 50 shares
along with consequential benefits, however the appellant/defendant No.1
be held entitled to recover of the amounts from defendant No.7/respondent
No.7. There can be no dispute to this preposition that defendant No. 7 was
not entitled to distribute 50 shares, and which benefit of ownership of 50
shares was received by defendant No.7 under illegal and fraudulent
circumstances. Since fraud nullifies everything and the appellant/defendant
No.1 has otherwise to reimburse/compensate respondent No.1/plaintiff,
consequently, with effect from today's judgment, the appellant/defendant
No.1 will have a cause of action to pursue its remedies for recovery of
amount which it would be entitled to claim against defendant
No.7/respondent No.7, inasmuch as, the appellant/defendant No.1 is being
held liable in law and has been directed to makeover 50 shares with
consequential benefits to the plaintiff/respondent No.1,
7. Consequential benefits be granted, to respondent No.1/plaintiff with
respect to the complete lot of 600 shares, if not already granted.
8. In view of the above, the present appeal is dismissed giving the
appellant/defendant No.1 liberty as prayed for aforesaid. Trial Court record
be sent back.
VALMIKI J. MEHTA, J.
FEBRUARY 16, 2012
AK
