PRITHVI RAJ SINGH Vs. DALIP KULKARNI

JUDGEMENT

(1.) This first appeal arises out of judgment and decree dated 19-11-96 passed by the Additional District Judge No. 1, Jaipur City whereby suit for specific performance of contract filed by plaintiff-appellant was dismissed.

(2.) Prithvi Raj Singh (plaintiff-appellant) filed civil suit for specific performance of an agreement (Ex. 1), which was duly executed on the basis of a memo of Understanding (for short 'MOU') dated 20-7-1987 duly executed between appellant-plaintiff and defendant-respondent No. 1 Dalip Kulkarni while acting on his own behalf and on behalf of his associates namely Skypak Couriers Limited (respondent No. 5), Smt. Sheela M. Kulkarni (respondent No. 6), Smt. Devika D. Kulkarni (respondent No. 7), M. R. Patanakar (respondent No. 8) and V. Chandra Shekaran (respondent No. 9) all Directors of the Kopyrite Limited. According to the Memo of Understanding (Ex. 1), the appellant and his associates constituted a Public Limited Company namely Kopyrite Limited (for short "Kopyrite Company") which was incorporated on 27-2-1984 holding major shares of the Company by the appellant and his associates. The Kopyrite Company established its factory at D-172 Industrial Area, Gehror (District Alwar) after having obtained financial assistance from RIICO Limited (respondent No. 2), Rajasthan Financial Corporation (respondent No. 3) and Canara Bank Jaipur (respondent No. 4).

(3.) It is the case of the plaintiff appellant in the plaint that on the date of execution of the Memo of Understanding (Ex. 1), the assets of the Kopyrite Company (for short "the Company") were of rupees two Crores. Hence with an ill motive from the very inception, respondent No. 1 intended to obtain possession of the factory as well as management of the Company on a nominal payment and accordingly he paid only in all Rs. 8,75,000/- towards 1/4th of the paid up value of each share @ Rs. 2.50p. whereupon he took over possession of the factory and management of the said Company from 20-7-87 and started operating the factory. Thereupon according to clause (4) of the M.O.U. (Ex. 1), he became Director of the Company and he then appointed respondent Nos. 6 to 9 as its associates Directors. As per clause (2) of M.O.U., the respondent No. 1 had to make the payment of remaining costs of shares after the receipt of the audited balance sheet of financial year 1986-87 but he failed to make the payment of the said amount to the appellant. Therefore, the appellant was constrained to file civil suit No. 40/89 (New No. 190/95) for specific performance of the Agreement M.O.U. (Ex. 1) against respondent No. 1 for recovery of the amount due to the appellant for the shares purchased by the sole defendant herein impleaded as respondent No. 1 to the tune of Rs. 9,25,394.99p. (Rs. Nine Lac, twenty five thousand, three hundred ninety four and ninety nine paisa) which was decreed by the trial Court (learned Additional District Judge No. 1 Jaipur City) whereby the said trial Court granted the relief to the plaintiff by decreeing the said suit to the extent of Rs. 8,07,500/- only with interest thereon @ 12% per annum from 4-9-87 till its realisation with costs while counter claim preferred by the defendant was held not maintainable and dismissed accordingly vide its judgement and decree dated 18-2-1998.