Ashok Kriplani vs Shiva Texyarn Ltd.
2014 Latest Caselaw 4099 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+            CM(M) No. 1184/2013 & CM No. 17232/13 (exemption)
             &17233/2013 (stay)

%                                                      2nd September, 2014

ASHOK KRIPLANI                                         ......Petitioner
                          Through:       Petitioner in person.


                          VERSUS

SHIVA TEXYARN LTD.                                  ...... Respondent
                 Through:                Mr. Praveen Pahuja, Advocate.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1.    By this petition, filed under Article 227 of the Constitution of India

the defendant in the suit impugns the order of the trial court dated 1.10.2013

which has refused to allow the amendment of the counter-claim so as to

convert the expression 'pledge of the shares' into 'mortgage of the shares'.

2.    On behalf of the petitioner/defendant it is argued before this Court

that if the shares are given as security as mortgage, then, the security of the

mortgaged shares results in the shares becoming an immovable property.



C.M.(M) 1184/2013                                                            Page 1 of 4
 3.           In support of the arguments that the shares become immovable

property when given as a mortgage, reliance is placed upon a Division

Bench judgment of Andhra Pradesh High Court in the case of Shatzadi

Begum Saheba and others Vs. Girdharilal Sanghi and others AIR 1976

AP 273.

4.           I have carefully gone through the judgment in the case of

Shatzadi Begum (supra). In the said judgment, it is mentioned that if shares

are given as security, the transaction is called a mortgage and it is not

observed in this judgment that shares become immovable property. All that

is observed in the judgment in the case of Shatzadi Begum (supra) is that

shares given as security can be classified either as a mortgage or pledge

depending on the agreement as to whether the shares can or cannot be

transferred in the name of the creditor ie if shares can be transferred in the

name of the creditor and he can enjoy the benefit of the shares, then the

transaction is a mortgage and otherwise the transaction will continue to

remain a pledge. The relevant observations in the judgment in the case of

Shatzadi Begum (supra) are contained in the following portions of the Head

Note A of the judgment and which reads as under:-

             "The main point of distinction between a pledge and a mortgage
             is that the right of enjoyment of the property is not given to a
             pledge, that right vests in a mortgage. As the said transaction
C.M.(M) 1184/2013                                                          Page 2 of 4
              was something more than the right to enjoyment and the rights
             of the parties were governed by the terms of the agreement, the
             transaction was a mortgage and not a pledge. The transferees
             enjoyed certain rights with respect to the shares which were
             given in their possession. Something more than mere delivery
             of shares with blank forms was intended by the parties the right
             to enjoyment of the shares was bestowed on the plaintiffs which
             is inconsistent with an agreement of pledge: and consistent with
             mortgage."
5.           A reading of the aforesaid portion nowhere shows that if the

transaction is mortgage of shares, then the shares become immovable

property. Obviously, shares cannot become immovable property because

shares are very much movable property and continue to be movable.

6.           I note that it was argued on behalf of the petitioner that the

aspect of the mortgage and the shares being immovable property is being

raised because of lesser court fee as payable with respect to mortgage as also

the fact that there is a different period of limitation for mortgage and as

compared to pledge.

             So far as the aspect of court fee is concerned, that is an aspect

which has nothing to do with respect to grant or denial of the amendment.

Amendment has been denied on the ground that petitioner/defendant had

specifically taken up a case that the shares were pledged and not that the

shares were mortgaged. Once that is so the amendment which will in fact



C.M.(M) 1184/2013                                                          Page 3 of 4
 amount to withdrawing of admissions that the shares were pledged and not

mortgaged cannot be granted.

7.           Accordingly, I do not find anything wrong in the impugned

order of the trial court declining amendment which would have the effect of

withdrawing specific admissions made by the petitioner/defendant that the

shares were pledge and not that the shares were mortgaged.

8.           So far as the issue of limitation is concerned, once the shares

are taken as pledged shares in terms of the existing averments made in the

counter-claim whatever is the limitation with respect to pledging of the

shares will come into effect.

9.           Dismissed.




SEPTEMBER 02, 2014                          VALMIKI J. MEHTA, J.

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