DILEEP MAHESHWARI Vs. CEMINDIA COMPANY LTD

JUDGEMENT

(1.) THE challenge by means of this regular first appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC), is to the impugned judgment and decree dated 30.8.2001 which dismissed the suit of the appellant/plaintiff for recovery of money claimed on account of bad delivery of shares from the defendant no.3/respondent no.3 to the plaintiff. THE shares in questions were 200 shares of the defendant no.1 M/s Cemindia Company Ltd.

(2.) THE facts of the case are that the defendant no.3 admittedly sold 200 shares of M/s Cemindia Company Ltd. to the appellant/plaintiff on 29.4.1993. THE appellant paid to the respondent no.3 a sum of Rs.28,093.00 for the purchase of such shares. THE extant period of the transaction was during the years when the shares were transacted not in D-mat form but they were sold/purchased in the form of share scripts. In the share scripts, there is a column with respect to transfers which are made inasmuch as it is not as if each transfer had to be registered with the company whose shares were sold and transferred inasmuch as before the cutoff date which is mentioned in a share ownership form, there could take place many transfers and deliveries inter se various buyers and sellers without the actual owner being reflected in the share ownership register of the company whose shares were sold and transferred. I may only state that this position resulted in a nominal owner of shares, who existed in the shareholders register of a company and actual owner of the shares who was different. THE actual holder of the shares scripts was the actual owner of the share scripts and the normal owner in the shareholder's register of the company used to be a trustee for the actual owner. This aspect is deliberated upon by the Supreme Court in its celebrated judgment in the case of LIC vs. Escorts Ltd. and Ors. AIR 1986 SC 1370.

(3.) FIRST let us come to certain admitted facts. That the respondent no.3 sold 200 shares of M/s Cemindia Company Ltd. to the appellant /plaintiff is not disputed. That the owner of such shares in the company M/s Cemindia Company Ltd. reported loss of the shares and got duplicate share scripts issued is also not disputed. What is really disputed is the price at which the shares were transferred by appellant and which ultimately were bought by M/s Phool Holdings Ltd. and whether the appellant was forced to pay the amount of Rs.3,60,960/- to M/s Secured Investment and Finance Company Ltd., who is the first endorsee on the share transfer forms as a buyer of the subject share scripts.