ETERNIT EVEREST LIMITED Vs. NEELMANI BHARTIYA

JUDGEMENT

(1.) This is a petition challenging decision of the trial Court rejecting an application under Order 7, Rule 11, CPC r/w S. 151, CPC. The respondent has filed a suit against the petitioners styling it to be a suit for declaration, injunction and cancellation of original shares and issuing duplicate shares. It was contended in the plaint that M/s Eternit Everest Ltd. is a Company which had floated a public issue of its shares which was being managed by M/s M.C.S. Ltd. The plaintiff had purchased 300 shares which were recorded in the plaintiff's name in the records of the company. It is further contended in the plaint that the share certificates issued by the company to the plaintiff were lost and are not traceable to the plaintiff. It was further contended that the plaintiff wanted to sell those shares and for that purpose he contacted certain Brokers from Bombay and the plaintiff had signed transfer deeds also for the purpose of forwarding the same to the share brokers for sale of the shares. It is stated that the share certificates along with transfer deeds have been lost. When the shares were not traceable the plaintiff served a notice on the defendant calling upon them not to transfer the shares in the name of anyone else as the shares had not been sold but have been lost. The plaintiff had in the notice expressed his inability to quote the serial number of the shares also as he did not have it. The plaintiff later on, on enquiry from the defendant's office came to know that some of the shares had been transferred in the name of some one else and some shares were yet to be transferred. Ultimately after some correspondence the plaintiff filed the present suit claiming that he be declared owner of the 300 shares which stood originally in his name and also of 300 bonus shares which he should have received as such share holder and all the benefits on the shares originally held by him and on the shares which he was entitled to receive as bonus shares be extended to him. An injunction had also been claimed against transfer of shares without consent of the plaintiff.

(2.) The defendants took the plea that the suit was implidely barred by the provisions of Section 111 and 113 of the Companies Act, 1956. It was contended that the Company Law provides a complete machinery for dealing with the grievances of the nature raised by the plaintiff in his suit and the provisions being special provisions oust the jurisdiction of the Civil Court. The contention of the plaintiff on the other hand was that there is no express bar against entertainment of a suit in respect of shares and the suit was maintainable under Section 9 of the CPC. It was also contended that an implied bar cannot be easily inferred in the situation. The Civil Courts right to give a declaration as to the title to the shares cannot be said to be ousted by provisions of the Companies Act.

(3.) The trial Court agreed with the plaintiff and rejected the application. Hence this revision petition.