M R DHAWAN Vs. MADAN MOHAN

JUDGEMENT

(1.) The only question involved in this appeal is whether the appellant, who is the pawnor of certain shares in favour of respondent No. 5-Bank, is entitled to the dividends and the right, and bonus shares issued, in respect of the said pledged shares.

(2.) The facts giving rise to this appeal are as follows : 101 shares of the Punjab National Bank Limited of the value of Rs. 100.00 per share originally stood in the joint names of respondent No. 2 and his brothers respondents Nos. 3 and 4. Respondent No. 2 D entered into a partnership with the appellant under the name of New Shares Corporation.

(3.) This firm. New Shares Corporation, had an overdraft account with the Hindustan Commercial Bank Ltd., respondent No. 5. As a security in the said account, 91 shares out of the said 101 shares of the Punjab National Bank Ltd. were pledged by the said firm with respondent No. 5, who, in a suit for the recovery of money due, obtained a decree for the amount found due to it. It was, however, held by the High Court in the said suit, that only 1/3rd right of respondent No. 2 in those shares had been pledged, as the share of respondents Nos. 2 and 4 could not be pledged by repsondent No. 2. Allowing the benefit of section 17 of the Displaced Persons (Debts Adjustment) Act LXXI of 1951, it was held that the Bank was entitled to recover the decretal amount by the sale of shares to the extent that they are validly hypothecated and not from the defendants personally in case of short fall.