CANBANK FINANCIAL SERVICES LTD Vs. V B DESAI

JUDGEMENT

(1.) HEARD the learned counsel for the parties. By this Chamber Summons the defendants are seeking the relief of rejection of the Plaint and/or striking off of the Plaint and dismissal of the suit as per the provisions of Order VII Rule 11 of the Code of Civil Procedure, 1908.

(2.) MR. Tulzapurkar, the learned counsel appearing for the Defendants has submitted that in the instant case, the transactions involved between the plaintiff and defendants were in the nature of ready forward transactions. Referring to the decision of the Supreme Court in the case of B. O. I. Finance Ltd. v. The Custodian reported in 1997 (4) JT SC 15 : (AIR 1997 SC 1952), Mr. Tulzapurkar has pointed out that in the said case the Supreme Court has held that in such a ready forward transaction, the forward leg aspect is illegal and impermissible in law.

(3.) THE Chamber Summons taken out by the defendants mainly proceeds on basis of the aforesaid decision of the Supreme court. Mr. Tulzapurkar, the learned Counsel for the defendants has contended that in case of ready forward transaction, forward leg is illegal as the same is not permissible under the Securities Contracts (Regulation) Act, 1956. Mr. Tulzapurkar has further contended that in the instant case the transactions involved were in the nature of ready forward transactions, and therefore, in the light of aforesaid decision of the Apex Court in the B. O. I. Finance Limited, the forward leg asepct which is the issue involved in the present suit is totally illegal, and as such, Plaint ought to be rejected.