S BHAGAT SINGH Vs. SATNAM TRANSPORT CO LTD

JUDGEMENT

(1.) BHAGAT Singh Plaintiff held 50 shares in the Sat-nam Transport Company Limited, Rohtak, defendant No. 1. Since the Managing Director and Chairman of the Company did not manage the Company properly and committed certain irregularities, the plaintiff filed an application for the winding up of this Company in this Court and this application was fixed for evidence for the 19th August, 1955, On the 5th August, 1955, a compromise was, however, effected between the plaintiff and the Company whereby, Balmokand (defendant No. 2), who is the Chairman of the Company, agreed to get these 50 shares transferred in his favour on paying Rs. 6,000/- to the plaintiff, On that very date the plaintiff executed a receipt for Rs. 6,000/- towards the price of these 50 shares and also a deed of transfer in favour of Balmokand (defendant No. 2), These two documents and the shares scrips were then handed over to Jai Ram (defendant No. 3 ). It was agreed that Balmokand would pay Rs. 6,000/- to the plaintiff within a week through Jai Ram who would then hand over these documents to Balmokand and in case Balmokand failed to make the payment, the documents would be returned to the plaintiff. Balmokand did not pay the amount of Rs. 6,0007 - to the plaintiff, who thereupon demanded the return of the document from Jai Ram. Jai Ram, in collusion with Balmokand, evaded the delivery of those documents to the plaintiff.

(2.) ON the above facts, on the 30th August, 1955, the plaintiff brought a suit for a declaration that he was the owner of 50 shares mentioned above, and that the same were not validly transferred in favour of Balmokand. He also prayed for the issue of perpetual injunctions to the effect that (1) defendant No. 2 should not get these shares transferred in his own name, (2) defendant No. 1 should not transfer the said shares in favour of defendant No. 2, and (3) defendant No. 3 be restrained from handing over the documents to defendants Nos. 1 and 2.

(3.) THE suit was resisted by defendants Nos, 1 and 2, who inter alia pleaded that the suit in the present form was not sustainable according to law.