UDAYJEET PARKASH Vs. S S ARORA

JUDGEMENT

(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 prohibitary 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 impleaded 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 impleaded 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 Defence 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.