Delhi District Court
Civil Suit No. 56061/16 vs Icici Bank Ltd on 22 October, 2018
IN THE COURT OF PRAVEEN KUMAR: ADDITIONAL
DISTRICT JUDGE 05 :NEW DELHI DISTRICT,
PATIALA HOUSE COURTS, NEW DELHI.
(SIX YEAR OLD CASE)
Civil Suit No. 56061/16
M/s Tractel Tirfor India Pvt Ltd
302, Harsh Bhawan,
6465, Nehru Place,
New Delhi. ................Plaintiff
Versus
1.ICICI Bank Ltd.
Formerly known as Industrial Credit & Investment Corporation of India Limited (ICICI) Jeevan Bhawan TowerII, Level6, 124, Connaught Circus, New Delhi110001.
Also at :
ICICI Bank Limited Securities Processing Division II Floor, Zenith House Keshavrao Khadye Marg Mahalaxmi, Mumbai400034.
2. AMREX MARKETING PVT. LTD 26, Belvedere Road, Kolkata, West Bengal700027. ...................Defendants Date of institution of the case : 18.09.2012 Date of arguments : 23.08.2018 Date of judgment : 22.10.2018.
JUDGMENT :
1. The plaintiff has filed the present suit against the defendants for CS No.56061/16 Page 1 of 10 Tractel Tirfor Pvt Ltd vs. ICICI Bank Ltd & Anr. grant of relief of declaration, injunctions. 2.1 The case of the plaintiff, in brief, is that the plaintiff is a Company incorporated and registered under the Companies Act, 1956. Sh.
Suresh Uniyal, Personal Officer, has verified the pleadings and has instituted the present suit on behalf of the plaintiff company who has been authorized to do so vide Resolution dated 2.7.2012 passed by the Board of Directors. The plaintiff company is engaged in the business of providing services of industrial lifting and handling system and also in manufacturing various type of lifting devices. As per plaintiff, in the year 1985 plaintiff company set up its manufacturing plant at Nasik, Maharashtra at an original cost of Rs.236 lakhs and the same was financed through a foreign currency loan of Rs.84 lakhs from ICICI and IFCI (shared equally), loan of Rs.73 lakhs from SICOM and Rs.15 lakhs were provided as state subsidy. It is the case of the plaintiff that out of the equity share capital of Rs.50 lakhs, the promoters subscribed to Rs.20 lakhs and the balance of Rs.30 lakhs was taken up by financial institutions on a direct subscription basis i.e. ICICI Rs.10 lakhs, IFCI Rs.8 lakhs and SICOMRs.10 lakhs. As per plaintiff, the equity share of direct subscription carried a right to buy back option to the plaintiff company and in the event financial institutions wanted to sell their shareholding in the plaintiff company, it has to first make an offer to the promoters of the plaintiff company for the purchase of these equity shares. 2.2 It is further the case of the plaintiff that the project at Nasik got completed by the end of 1985 but it never became commercially viable as its performance remained unsatisfactory and ultimately it was completely eroded in the year 1994. The plaintiff company was compelled to file a reference to the Board for Industrial and Financial Reconstruction (in short CS No.56061/16 Page 2 of 10 Tractel Tirfor Pvt Ltd vs. ICICI Bank Ltd & Anr.
'BIFR') on 27.09.1994. The BIFR after conducting a detailed enquiry, held that the plaintiff company had become a sick industrial company in terms of the Section 3 (1) (o) of the Act. According to plaintiff, on 12.12.1995 the BIFR appointed the defendant no.1 as an Operating Agency (AO) to examine the viability and the feasibility in running the company and was also directed to prepare a comprehensive scheme for rehabilitation of the plaintiff company. On 3.4.1996 defendant no.1 submitted the draft schemes of the rehabilitation for the plaintiff company to the Board. On 11.7.1996, BIFR passed and approved a sanctioned scheme in this regard stating therein that the plaintiff company's Nasik unit was transferred in a new company jointly promoted by the Hindustan Sheet and Metals and Tractel Tirfor. It was further stated that one time settlement (in short 'OTS') of the institutional dues which will make the company free of long terms debts and further infusion of funds to strengthen the operation of the company. BIFR also passed an order that the loans of all financial institutions (ICICI, SICOM and IFCI) shall be settled by making a payment of Rs.480 lakhs (Rs.450 lakhs in cash and Rs.30 lakhs equity in the new company) as OTS to the total institutional dues of around Rs.808 lakhs. In terms of the order of BIFR, the plaintiff company paid a sum of Rs.241 lakhs as OTS qua all its dues to the defendant no.1. As per plaintiff, by the said payment the direct subscription of 10,000 equity shares of Rs.10 lakhs by the defendant no.1 in the plaintiff company also stood fully discharged and defendant no.1 ceased to have any right or title over the 10,000 equity shares of each numbered from 34001 to 44000 issued under the Equity Share Certificate No.55. It is further the case of the plaintiff company that once the defendant no.1 got Rs.241 lakhs under the OTS, the option of Dr. P K Chakarvarty to CS No.56061/16 Page 3 of 10 Tractel Tirfor Pvt Ltd vs. ICICI Bank Ltd & Anr.
buy back the equity shares from the defendant no.1 has also become redundant since the financial assistance provided by defendant no.1 stood completely discharged and the defendant no.1 was under an obligation to return those shares to the plaintiff company.
2.3 It is further the case of the plaintiff that plaintiff came to know about the transfer of those equity shares by defendant no.1 in favour of the defendant no.2 in January 2010 when it received a letter dated 29.1.2010 from the defendant no.2 requesting for transfer of 10,000 shares of the plaintiff company in the name of the defendant no.2. Plaintiff company refuted the claim of ownerships of those shares by defendant no.2 vide reply dated 21.10.2010 questioning their locus standi to have any rights over those shares and rejected their claim for transfer of shares. The plaintiff company also issued legal notice dated 17.2.2011, 7.3.2011 and 7.5.2011 to the defendant no.1 asking them to desist from selling the above shares to any third party and return the same to the plaintiff company. As per plaintiff, defendant no.1, under a conspiracy to usurp the said shares, in connivance with the defendant no.2 executed a collusive share transfer instrument in favour of defendant no.2 and sent it to the plaintiff for its consent and approval on 29.1.2010. Plaintiff has prayed for the decree of declaration to the effect that plaintiff company is the rightful owner and has the absolute title over the plaintiff company's shares numbering from 34001 to 44000 issued vide Certificate of Equity Share No.55 dated 11.11.1985. Plaintiff has also prayed for decree for cancellation of the sale/transfer dated 29.1.2010 of the shares in question in favour of defendant no.2 by defendant no.1; decree for permanent injunction restraining the defendants, their legal heirs, assignees, nominees, agents etc to transfer, dispossess and interfere in CS No.56061/16 Page 4 of 10 Tractel Tirfor Pvt Ltd vs. ICICI Bank Ltd & Anr.
the plaintiff company's right, title and ownership of the abovesaid shares; cancel the share transfer deed dated 29.1.2010 and a decree of mandatory permanent injunction in favour of the plaintiff company and against the defendant no.1 and 2 directing the defendants to return the abovesaid shares to the plaintiff company.
3. Defendants have filed their separate written statements and have contested the suit of the plaintiff. Defendant no.1 has taken the preliminary objections (i) that the predecessor of the defendant no.1 got the shares in question vide certificate dated 11.11.1985 executed by the plaintiff company and after its transfer in the year 2000 defendant no.1 became its absolute owner; (ii) that the order dated 11.7.1996 passed by the BIFR was relating to only long term debt owed by the plaintiff company and did not include the shares in question; (iii) that the certificate which was issued in favour of the erstwhile ICICI Ltd to the defendant no.1 had been duly endorsed by the plaintiff in favour of ICICI Trusteeship Services Ltd on 30.6.2001; (iv) that the suit is bad for nonjoinder of necessary party and
(v) that the defendant no.1 was/is having every right, title and ownership to transfer the shares in question in favour of defendant no.2. On merits, it is averred that plaintiff never approached the defendant no.1 for buy back of the shares and that OTS which was approved by the BIFR was only with respect to the plaintiff's long term debts. Defendant no.1 has prayed that suit of the plaintiff is liable to be dismissed.
4. So far as defendant no.2 is concerned, in the written statement it has taken preliminary objections that the suit is liable to be dismissed for nonjoinder of necessary parties and that the suit is barred by limitation. On merits, it is averred that plaintiff is not the owner of the shares in question;
CS No.56061/16 Page 5 of 10Tractel Tirfor Pvt Ltd vs. ICICI Bank Ltd & Anr.
that plaintiff company did not issue the Equity Share certificate on 11.11.2012 and that the plaintiff itself had approved by way of endorsement the transfer of shares in favour of ICICI Trusteeship Company Ltd on 30.6.2001.
5. Plaintiff has filed separate replications to the written statements filed by the defendants and has reiterated the contents of the plaint.
6. From the pleadings of the parties, following issues were framed by Ld. Predecessor of this court on 30.09.2013:
(1) Whether a plaintiff is entitled for decree of declaration to the effect the company i.e Tractel Tirfor India Pvt is the rightful owner and has the absolute title over the company's shares numbering from 34001 to 44000 issued vide certificate of equity share no.55 dated 11.11.1985 by the company as prayed for ? OPP (2) Whether the defendant no.1 has no right whatsoever to deal, sale, transfer in the above shares, which legally belong to the company as prayed for ? OPP (3) Whether the plaintiff is entitled for consequent relief as prayed for ?
OPP (4) Whether a plaintiff is entitled for decree of permanent injunction as prayed for ? OPP (5) Whether a plaintiff is entitled of permanent mandatory injunction as prayed for ? OPP (6) Whether the suit is bad of misjoinder of necessary parties ? OPD (7) Whether the suit is barred by limitation ? OPD
7. In support of its case, the plaintiff has examined Sh. D S Chakraborty as PW1. He has tendered his evidence by way of affidavit CS No.56061/16 Page 6 of 10 Tractel Tirfor Pvt Ltd vs. ICICI Bank Ltd & Anr.
Ex.P1. He has deposed on the line of averments made in the plaint. He has deposed that he is the authorized representative of the plaintiff company vide Board Resolution dated 1.11.2013. He has proved the Board Resolution/letter of authority dated 2.7.2012 in favour of Sh. Suresh Uniyal, who has instituted the present suit as Ext. PW1/1. He has deposed that plaintiff company was promoted in 1964 by Dr. P K Chakarvarty in technical collaboration with Tractel SA France. PW1 has also proved the certified copy of the reference application dated 21.10.1994 as Ext. PW1/2; certified copies of the letters dated 31.10.1994 written by BIFR as Ext. PW1/3 (colly.); certified copy of the letter dated 16.5.1995 written by defendant no.1 to BIFR as Ex.PW1/4; Certified copy of the draft copy of the OA report submitted by defendant no.1 as Ext.PW1/5; certified copy of the sanctioned scheme dated 11.07.196 as Ext.PW1/6; copy of the letter dated 29.1.2010 as Ex.PW1/7; reply dated 21.10.2010 as Ext. PW1/8 and Sale/transfer deed dated 29.1.2012 as Ex.PW1/9.
8. During his crossexamination, PW1 has admitted that on 30.06.2001 the share certificate had been endorsed by the plaintiff in favour of ICICI Trusteeship Services Ltd. He has also admitted that on 27.3.2000, the shares of the plaintiff had been transferred by ICICI Ltd to ICICI Equity Fund. PW1 has further admitted that the plaintiff company was aware of transferred of shares by ICICI Ltd to ICICI Fund.
9. Defendants have not led any evidence in support of their defence.
10. I have heard Sh. Deepak Bashta, Ld. Counsel for defendant no.1 and Sh. Sagar Chawla, Ld. Counsel for defendant no.2. Oral arguments were not advanced on behalf of the plaintiff. However, written CS No.56061/16 Page 7 of 10 Tractel Tirfor Pvt Ltd vs. ICICI Bank Ltd & Anr.
submissions have been filed on behalf of the plaintiff as well as on behalf of defendant no.1.
11. I have gone through the file. I have also gone through the written submissions filed on behalf of plaintiff as well as defendant no.1.
12. My issuewise findings are as hereunder :
Issues No.1, 2, 3, 4 and 5 :
13. As these issues are interlinked, they are being decided together. The onus to prove these issues is on the plaintiff. The defendant no.1 was appointed by BIFR on 12.12.1995 and the BIFR had sanctioned the scheme proposed by the Operating Agency with respect to the plaintiff vide its order dated 11.7.1996 and the claim of the defendant no.1 was settled as a part of the OTS. A perusal of the said settlement shows that it had covered within its ambit only the long term debts owed by the plaintiff to various parties and the shares which form the subject matter of the present suit do not form a part of the same. There is not even a whisper about the shares in question in the said settlement. It is also noteworthy that during the cross examination of PW1, he has admitted that on 30.06.2001 the share certificate had been endorsed by the plaintiff in favour of ICICI Trusteeship Services Ltd. PW1 has further admitted that on 27.3.2000, the shares of the plaintiff had been transferred by ICICI Ltd to ICICI Equity Fund. PW1 has further admitted that the plaintiff company was aware of transfer of shares by ICICI Ltd to ICICI Equity Fund. Had the shares in question been part of the settlement, the plaintiff company would not have agreed to its transfer much after the OTS had taken place. Thus, the plaintiff is bound by the law of estoppel. Hence, these issues are decided in favour of the defendants and against the plaintiff.
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Issues No. 6:
14. The onus of this issue is on the defendants. There are two tests to decide if a party is a necessary party or not. Firstly, there must be a right to some relief against such a party in respect of the matter involved in the proceedings and secondly, it should not be possible to pass an effective decree in the absence of such a party. Applying this proposition of law to the present case, the predecessor of the defendant no.1 had validly acquired the shares in question, pursuant to execution of a certificate dated 11.11.1985 in its favour by the plaintiff company. Subsequently, the predecessor of the defendant no.1 had ceased to have any right, title or interest over the equity shares in the year 2000 after it transferred the shares to ICICI Trusteeship Services Ltd as the trustee for ICICI Equity Fund in accordance with a Share Transfer agreement executed between them. PW1 has admitted during his cross- examination that plaintiff did not array ICICI Trusteeship Services Ltd as a party as it did not consider both the companies as different companies. It was ICICI Trusteeship Services Limited which sold the shares in question to the defendant no.2. Hence, the ICICI Trusteeship Services Ltd that had purchased the shares from the answering defendant in its capacity as Trustee for the ICICI Equity Fund vide share purchase agreement of 27.3.2000 was a necessary party to the present suit which has not been included as defendant. Hence, this issue is decided in favour of the defendants and against the plaintiff. Issue No.7 :
14. The onus to prove this issue is on the defendants. During his CS No.56061/16 Page 9 of 10 Tractel Tirfor Pvt Ltd vs. ICICI Bank Ltd & Anr.
crossexamination, PW1 has admitted that on 27.3.2000, the shares of the plaintiff had been transferred by ICICI Ltd to ICICI Equity Fund. The present suit has been filed 18.9.2012. Therefore, this Court is of the view that if plaintiff had any grievance against the said transfer, it could have initiated legal action within the stipulated period of limitation. The present suit is hopelessly barred by time. Hence, this issue is decided in favour of the defendants and against the plaintiff.
Relief.
15. As I have decided all the issues in favour of the defendants and against the plaintiff, the suit of the plaintiff is dismissed. No order as to costs. Decree sheet be prepared accordingly. File be consigned to record room after due compliance.
Digitally signed by PRAVEEN PRAVEEN KUMAR
KUMAR Date: 2018.10.26
04:52:49 +0530
Announced today in open (Praveen Kumar)
court i.e on 22.10.2018. Additional District Judge05 Patiala House Courts, New Delhi.s CS No.56061/16 Page 10 of 10 Tractel Tirfor Pvt Ltd vs. ICICI Bank Ltd & Anr.