VIDEOCON INTERNATIONAL LIMITED Vs. INDUS IND BANK LIMITED

JUDGEMENT

(1.) BY this notice of motion the plaintiffs seek temporary injunction inter alia restraining the 2nd defendant from exercising any right including a right to vote over or in respect of the 10 lacs shares of Induslnd bank held by the 2nd defendant. They also seek an injunction restraining the defendants from exercising any voting right in respect of shares and for direction to them to handover all the benefits arising out of the said shares including a sum of Rs. 1,01,76,820. 00 as dividend. This injunction is sought in this suit in which the plaintiffs have sought a declaration that it is they who are the beneficial owner of the 10 lacs shares of the Induslnd Bank described in exhibit "a" to the plaint and are alone entitled to all the benefits and rights including dividends, etc.

(2.) THE shares have been attached by the defendant No. 3, the Tax Recovery Officer for recovery of dues of income tax from monies payable by the defendant No. 2, A. N. Corporation Ltd. to the said defaulter. In the process of recovery, the Tax Recovery Officer has attached shares which are registered in the name of the 2nd defendant, A. N. Corporation Ltd. but which are in possession of the plaintiffs. The character and the capacity in which the plaintiffs hold the shares, inter alia arises for determination by this notice of motion.

(3.) THE plaintiffs, claiming to be entitled to the beneficial ownership of the shares, objected to the attachment of the shares made by the Tax Recovery officer. The Tax Recovery Officer by order dated 20th December, 2002 held that the plaintiffs are not the legal owner of the shares and the defendant No. 2 is the legal owner. The plaintiffs have thereafter filed this suit. The Tax recovery Officer has passed the aforesaid order under Rule 11 of Schedule II to the Income Tax Act, 1961. This suit is instituted inter alia against the order of the Tax Recovery Officer which under Rule 11 (6) is conclusive subject to the result of such suit. The facts in brief are as follows: