(1.) IMPLEADING the first respondent as the sole defendant, the appellant filed a suit praying a declaration to be granted in its favour that 1397150 (Thirteen Lacs Ninety Seven Thousand One Hundred Fifty) shares of the company Vishesh Infotechnics Limited presently in the name and custody of the respondent No.1 be declared to be the shares of the appellant. Permanent injunction was prayed to restrain respondent No.1 from dealing with the said shares. Mandatory injunction was prayed that the first respondent be directed to transfer the shares in the name of the appellant and hand over possession of the share certificates.
(2.) THE action was maintained on the plea that the first respondent was an employee of the company Vishesh Infotechnics Ltd. and had a small shareholding therein of around 11000 (Eleven Thousand) shares. The appellant acquired majority shareholding of the company by purchasing the shares from the erstwhile management and at that time the first respondent was a joint Managing Director of the company. That the appellant was also a majority shareholder in another company named MPS Technosoft Ltd. That the first respondent told the appellant that he was facing difficulties in convincing investors and clients that he had a vital interest in the two companies Vishesh Infotechnics Ltd. and MPS Technosoft Ltd. He told the appellant that investors would be assured in the dealings with the companies if he had a substantial holding in MPS Technosoft Ltd. and thus it was agreed that appellant would park shares of MPS Technosoft Ltd. with the first respondent and therefore on April 27, 2004; 3197150 (Thirty One Lacs Ninety Seven Thousand One Hundred Fifty) Shares of MPS Technosoft Ltd. were transferred in the name of the first respondent, to be kept in trust by him. To give effect to the aforesaid understanding 997150 (Nine Lacs Ninety Seven Thousand One Fifty) shares of a holding company controlled by the appellant named Omkam Developers Pvt.Ltd. and 2200000 (Twenty Two Lacs) shares held by another holding company of the appellant named BGR Finvests Private Ltd. were transferred in the name of the first respondent. It was pleaded that since it was actually a case of shares to be held in trust no stamp duty or transfer fee was paid when the shares transfer took place. Pleading further that as per a scheme of merger, since MPS Technosoft Ltd. merged with Vishesh Infotechnics Ltd., the first respondent was issued 2397863 (Twenty Three Lacs Ninety Seven Thousand Eight Hundred Sixty Three) shares of Vishesh Infotechnics Ltd. It was pleaded that the respondent held these shares in trust. Pleading that as per the asking of the appellant the first respondent transferred substantial shares standing in his name to different parties, it was stated that currently 1397150 (Thirteen Lacs Ninety Seven Thousand One Hundred Fifty) shares were in the name of the first respondent in the company Vishesh Infotechnics Ltd.
(3.) THE first respondent filed IA No.8673/2010 under Order VII Rule 11 of the Code of Civil Procedure pleading that the plaint was liable to be rejected for two reasons. Firstly, Omkam Developers Pvt.Ltd. and BGR Finvests Pvt.Ltd. not being impleaded as defendants required the plaint to be rejected for non -joinder of necessary parties. The first respondent pleaded that it was settled law that a company is distinct from its shareholders. He pleaded that the appellant had itself pleaded in the plaint that the said two companies had transferred 3197150 (Thirty One Lacs Ninety Seven Thousand One Hundred Fifty) shares held by them of the company MPS Technosoft Ltd. The second plea was that the suit was barred by limitation.