GLOBEX FINANCIAL SERVICES LIMITED Vs. BAKULESH T SHAH

JUDGEMENT

(1.) THIS revision application seeks to challenge the judgment and order dated 6th March 1999 passed by a learned Judge of the City Civil Court at Mumbai in Short Cause Suit No. 512 of 1998. The petitioners herein are the defendants No. 1 and 2 in that suit and they raised an issue on 8th June 1998 contending under section 9a of the Civil Procedure Code (which section is a Maharashtra addition) that the City Civil Court does not have the pecuniary jurisdiction to try and entertain the said suit. That application came to be rejected by the impugned oral judgment and order dated 16th March 1999 passed by the learned Judge. Being aggrieved by that judgment and order, this Revision Application has been filed. There was an accompanying Appeal from order arising out of the ad-interim and interim orders in that suit being Appeal from Order No. 537 of 1999. This Revision Application was placed along with that Appeal from order before me since both were connected matters. Subsequently the Appeal from Order was dismissed by me by a speaking order dated 1st July 1999. This Revision Application was however again placed before me by the order of the Honble Chief Justice since I had heard that Appeal from order on earlier occasion and the Revision Application is now being disposed of after hearing the learned Counsel for both the parties.

(2.) MR. Shah has appeared for the petitioners and Mr. Shroff has appeared for the respondents No. 1 to 3. Both the learned Counsel have taken me through the pleading or record as also various authorities to decide as to whether the judgment and order of the learned Judge was right or otherwise.

(3.) THE respondents No. 1 to 3 to this revision have filed the above referred suit. The petitioners herein are defendants No. 1 and 2 in that suit and respondent No. 4 herein is the defendant No. 3 in that suit. The said plaintiffs No. 1 and 2 are the shareholders and directors of plaintiff No. 3 company. It is an undisputed fact that plaintiffs No. 1 and 2 had the shares of defendant No. 3 Bank valued at more than Rs. 4 crores at the time of filing of the plaint (as per para 3 of the plaint ). These shares were pledged with defendant No. 1 to enable the plaintiff No. 3 to take a loan of Rs. 3 crores sometimes in December 1995. It is the case of the defendants No. 1 and 2 that the loan was not repaid till about July 1997 though an amount of Rs. 70 lacs therefrom was returned. The defendant No. 2 floated shares sometimes in August 1997. It is the case of the plaintiffs that the defendants No. 1 and 2 are sister companies and both are closely held by one Mahesh Pawani who in fact is said to be owning, controlling, managing and administering these two companies as stated in para 1 of the plaint. On defendant No. 2 floating shares in August 1997, it is the case of the plaintiffs that plaintiff No. 1 invested money in these shares. According to the plaintiffs, they invested an amount of Rs. 3. 8 crores, whereas, according to the defendants the shares which were issued were worth around Rs. 3. 6 crores. On 21st July 1997, the plaintiffs asked for further time till 31st July 1997 to return the balance of the loan amounts. Since the amount of loan was not returned, the defendant No. 1 gave the last legal notice on 11th December, 1997 calling upon the plaintiffs to repay the loan of Rs. crores or else they will proceed to sell the shares which were pledged with them. In fact, the defendant No. 1 sent the shares for transfer on 15th January, 1998. It was at that stage that this suit was filed by the plaintiffs on 28th January, 1998 seeking an injunction restraining the defendants from in any manner dealing with and transferring these shares (6,29,900 equity shares) which were pledged with the defendant No. 1. An ad-interim injunction came to be granted on 29th January, 1998 which has been running since then and which continues to run in view of the dismissal of the Appeal from order referred to earlier.