SURAJBEN N SHAH Vs. STOCK EXCHANGE MUMBAI

JUDGEMENT

(1.) THIS is a notice of motion taken out by the plaintiffs. The plaintiffs have filed this suit for a declaration that the arrangement made by late Navalchand Shah with the defendant No.1 for disposal of his membership rights and use of the funds for creation of a Trust is illegal, bad-in-law. The facts that are relevant for deciding this notice of motion are that one Navalchand Shah, of whom plaintiff No.1 is a widow and plaintiff No.2 is a son, was member and card holder of Bombay Stock Exchange. During his life time on 19th April 1962, he wrote a letter to the Bombay Stock Exchange that after his death, the Stock Exchange shall sell his card and proceeds shall be utilised for holding a lecture series. He wrote another letter to the Stock Exchange dated 19th May 1962 stating therein that it is his desire that on his death, his membership card and membership rights shall vest in the Stock Exchange and that the Stock Exchange should dispose off that card and utilise the proceeds for the purpose of holding lecture series. That proposal was accepted by the Stock Exchange by passing a resolution dated 6th June 1962. The deceased on 23rd September 1974 made a will and in paragraph 6 of the will, he referred to his letter to the Stock Exchange about his membership card and expressed his desire that the executors of his will should give full effect to his letter. He expired in the year 1979. The plaintiffs filed testamentary petition No.183 of 1980 for obtaining probate of the will left behind by the deceased and that probate was secured by them on 5th March 1984. Therefore, in fact, in effect, the plaintiffs are challenging the validity of paragraph 6 of the will of the deceased.

(2.) THE learned counsel appearing for the plaintiffs firstly submits that paragraph 6 is not valid because succession of a membership card is governed by the rules framed by the Stock Exchange, which have statutory force and according to those rules, on the death of a member, his widow gets right to nominate a person who is to be granted membership in place of a deceased. According to the learned counsel, thus, this right is given by the rules to a widow and therefore a card holder cannot make a will regarding his card. The learned counsel further submits that according to the letter dated 19th April 1962 as also the letter dated 19th May 1962, after sale of the card, the Stock Exchange was entitled to maximum amount of Rs.25,000/- and therefore, any amount in excess recovered from the sale of the card is to be handed over to the plaintiffs. The learned counsel further submits that though the deceased died in the year 1979, the Stock Exchange did not take any steps to sell the membership card and therefore, this inaction for a period of 20 years on the part of the Stock Exchange nullifies the arrangement. The learned counsel appearing for the defendant No.1, on the other hand, submits that the suit itself is for declaration that paragraph 6 of the will, which has already been probated, is not maintainable because the probate was obtained by the plaintiffs themselves and that probate is binding at least on the plaintiffs. He submits that a probate granted by the Court operates as a judgment in rem and therefore, the suit filed by the plaintiffs is not maintainable. He further submits that after the death of the deceased, the plaintiff No.1 had written a letter dated 6th October 1993 stating therein that the Stock Exchange should only retain an amount of Rs.21,00,000/- from the sale proceeds of the card and balance of the amount should be given to the plaintiff No 2 for payment of his dues. That request was rejected by the Stock Exchange by letter dated 29th October 1993. It is further submitted that the plaintiff No.1 had written a letter dated 23rd May 1994 requesting that the sale proceeds should be utilised for payment of the plaintiff No.2. That request was also rejected by the Stock Exchange by letter dated 22nd June 1994 wherein it was clearly stated that the membership rights of the deceased vest in the Stock Exchange and therefore, as per his directions and the will, the card has to be sold and the money is to be deposited in a Trust to be used for the purpose for which the deceased wanted it to be used. The learned counsel therefore submits that the cause of action for instituting of this suit accrued to the plaintiff No.2 in October 1993 and to the plaintiff No.1 in June 1994 and therefore, this suit filed in the year 2000 is not maintainable.

(3.) NOW , if in the light of these rival submissions the record of the case is perused, it becomes clear that both the plaintiffs were clearly aware about the arrangement which the deceased wanted to make in relation to his membership card when they filed testamentary petition No.183 of 1980. They themselves obtained a probate which was granted on 5th March 1984. Perusal of the contents of paragraph 13 of the plaint shows that by letter dated 6th October 1993, the plaintiff No.2 acknowledged that from the proceeds of the sale of membership card of the deceased, a Trust is to be created. His only request was that instead of depositing entire amount in the Trust, an amount of Rs.21,00,000/- should be deposited and the balance amount should be utilised for payment of his dues. However, that request was rejected by communication dated 29th October 1993. The plaintiff No.2 by letter dated 23rd May 1994 requested that the sale proceeds of the card should be utilised for payment of dues of the plaintiff No.2. That request was also rejected by the Stock Exchange by communication dated 22nd June 1994 and in that letter, it was clearly stated that in view of the desire of the deceased, his membership rights vest with the Stock Exchange as the deceased has surrendered his membership rights to the Stock Exchange. It was thus clear from the reply of the Stock Exchange that the stand of the Stock Exchange was clear that as a result of the letters of the deceased and the subsequent development, they need not pass on any of his right in the card to his heirs. In my opinion, therefore, prima facie cause of action for institution of this suit challenging the validity of paragraph 6 of the will accrued in any case in June 1994. Therefore, in my opinion, at least prima facie, suit would be barred by the law of limitation. That the plaintiff No.1 subsequently wrote to the Stock Exchange nominating somebody else as her nominee for giving the membership and that request was rejected in 2000, will not give a fresh cause of action to the plaintiffs. It is further to be seen here that once the plaintiffs themselves obtained probate of a will, without challenging validity of any of the clauses in that will, at least the plaintiffs are to be bound by the same. The submission of the learned counsel for the plaintiffs, based on a sentence in the letter dated 19th April 1962, in my opinion, is also not well founded because of the letter dated 19th May 1962 and to resolution of the Stock Exchange dated 6th June 1962. It is clear from the rules that a member can resign his membership and at the time of resigning his membership, he has a right to nominate a person In the present case, the deceased by letter dated 19th May 1962, has clearly expressed his desire to surrender his membership card without nominating anybody else as his nominee and intention requiring the Stock Exchange to sell the same for utilising the sale proceeds according to his wish taking overall view of the matter, therefore, in my opinion, the plaintiffs do not have prima facie case in their favour, the suit also appears to be barred by the law of limitation. In this view of the matter therefore, the notice of motion is disposed off. Ad-interim order passed earlier is vacated. As the age of the plaintiff No.1 is said to be 100 years, hearing of the suit is expedited. Parties to act on the copy of this order duly authenticated by the Associate/ Personal Secretary as true copy Certified copy expedited.