Delhi District Court
Pritpal Singh vs Sbi Capital Markets Ltd on 24 December, 2024
THE COURT OF MR. VAIBHAV PRATAP SINGH
CIVIL JUDGE, PATIALA HOUSE COURTS
NEW DELHI DISTRICT, DELHI
CNR No. DLND030020532019
CS SCJ No. 832/2019
IN THE MATTER OF:
Pritpal Singh
S/o Mr. Manmohan Singh
R/o H. No. 3757/34/1, Kundan Nagar
Model Town Extension Model Town
Ludhiana, Punjab-141002
. . . Plaintiff
versus
1. SBI Capital Markets Ltd.
Through its Director
World Trade Tower
6th Floor, Barakhama Lane
New Delhi-110001
2. Safari Industries (India) Ltd.
403, A-Wing, The Qube, CTS No. 1498
A/2, Behind Taj Flight Kitchen
MV Road, Marol, Andheri (East)
Mumbai, Maharashtra-400059
3. Adroit Corporate Services Pvt. Ltd.
Through its Director
19/20, Jaferbhoy Industrial Estate
1st Floor, Makwana Road, Marolnaka
Mumbai, Maharashtra-400059 Digitally
signed by
VAIBHAV
VAIBHAV PRATAP
PRATAP SINGH
SINGH Date:
2024.12.24
15:43:45
+0530
CS SCJ No. 832/2019
Pritpal Singh v. SBI Capital Markets Ltd. & Ors.
Page No. 1 of 15
4. Investor Education and Protection Fund Authority
Through its Principal Officer
Jeevan Vihar Building, Ground Floor,
Sansad Marg, New Delhi-110001
5. SBI Funds Management Pvt. Ltd.
Office at: C-38 and 39, G-block
Crescenzo Building, Bandra
Kurla Complex, Bandra East
Mumbai, Maharashtra-400051
. . .Defendants
Date of Institution : 04.06.2019
Date of Reserving Judgment : 17.12.2024
Date of Judgment : 24.12.2024
Decision : Decreed
SUIT FOR DECLARATION AND MANDATORY
INJUNCTION
JUDGMENT
PLAINT
1. The present suit is filed against Defendants, with the following prayers:
1.1. Pass a decree of Declaration in favour of the plaintiff and against the defendants thereby declaring that the plaintiff is the sole and absolute owner of the 200 equity shares cum bonus cum split shares of Safari Industries (India) Ltd. i.e defendant No.2 Company having face value of Rs. 10/- each, along with all consequential benefits such as bonus, split, dividends etc. etc. as per the following description: Digitally signed by VAIBHAV VAIBHAV PRATAP PRATAP SINGH SINGH Date:
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Page No. 2 of 15
FOLIO CERTIFICATE DISTINCTIVE NO. OF
NO. NO. NO. SHARES
S05030 00003857 01845601- 100
01845700
S05030 00008668 02326701- 100
02326800
1.2. Pass a decree of Mandatory Injunction in favour of the plaintiff and against the defendant No.2 to 4 thereby directing them to transfer the aforesaid shares in the name of the plaintiff in its record and return the original share certificates after effecting the transfer in the name of the plaintiff with all consequential benefits including the dividends, bonus and split shares;
1.3. Award costs in favour of the Plaintiff; and 1.4. Pass any other or further relief which the Court may deem fit and proper.
2. Brief facts as alleged by the Plaintiff in the Plaint are that suit concerns 200 equity-cum-bonus shares of Defendant No. 2/Safari Industries (India) Ltd., purchased by the Plaintiff from one M/s Nishu Investments (not a party) on 26.10.1994 for INR 6,262/-. The Plaintiff received two original share certificates and signed transfer deeds but delayed the transfer request.
3. In December 2017, the Plaintiff discovered the documents and requested the transfer of shares from the Defendants.
Defendant No. 1, the last recorded owner, did not dispute the claim but forwarded the matter to its sister concern. Defendant No. 2, via Defendant No. 3 (RTA), replied in Digitally signed by VAIBHAV VAIBHAV PRATAP PRATAP SINGH SINGH Date:
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Pritpal Singh v. SBI Capital Markets Ltd. & Ors.
Page No. 3 of 15April 2018 that the original shares were subdivided, and the new shares were transferred to the Investor Education and Protection Fund (IEPF) as Defendant No. 1 had not claimed dividends for seven years.
4. Defendant No. 4 (IEPF) informed the Plaintiff that they must submit an IEPF-5 form to claim the shares, but only the last recorded owner (Defendant No. 1) can submit this form. Despite repeated requests and reminders from the Plaintiff, Defendant No. 1 did not provide the required No Objection Certificate (NOC) or file the necessary form with Defendant No. 4, blocking the transfer.
5. Defendant No. 2, as a listed company, should have facilitated the transfer process under the Listing Agreement by inviting objections from Defendant No. 1 or helping with the IEPF-5 form. Instead, Defendant No. 2 rejected the transfer request and failed to address the procedural requirements.
6. The plaintiff thus seeks a declaration that the shares belong to them and an injunction to compel the defendants to transfer the shares in their name, as the Defendants' failure to cooperate has obstructed the process despite repeated legal requests.
WRITTEN STATEMENT OF DEFENDANT NOS. 1 AND 57. Defendant Nos. 1 and 5 filed a joint written statement and VAIBHAV PRATAP SINGH took the stand that the Plaintiff failed to take the necessary Digitally signed by VAIBHAV PRATAP SINGH Date: 2024.12.24 CS SCJ No. 832/2019 15:44:03 +0530 Pritpal Singh v. SBI Capital Markets Ltd. & Ors.
Page No. 4 of 15steps to transfer the shares within the 12 month period prescribed by the Companies Act, 2013 as required along with duly filled transfer deeds. The Plaintiff only took action in December 2017, over 25 years later, making the suit barred by limitation and without merit.
8. It was further stated that the records from 1994 to 2011 are unavailable, as they are only required to be retained for 7 years under SEBI's Mutual Fund Regulations, 1996. Since the suit was filed in June 2019, the answering Defendants are unable to produce these records, however, they acknowledge selling the shares in the open market, and, due to the nature of open stock market transactions, there is no knowledge of the specific buyer who ended up purchasing the shares.
9. The answering Defendants have no objection to transferring the shares to the rightful owner but they deny any liability, as the shares were sold and are no longer in the possession of Defendant No. 1 and 5.
DEFENCE OF DEFENDANT NOS. 2 AND 310.Despite due service, no appearance was entered by Defendant Nos. 2 and 3 and they were consequently proceeded ex-parte by order dated 22.11.2021.
Digitally
signed by
VAIBHAV
VAIBHAV PRATAP
PRATAP SINGH
SINGH Date:
2024.12.24
15:44:06
+0530
CS SCJ No. 832/2019
Pritpal Singh v. SBI Capital Markets Ltd. & Ors.
Page No. 5 of 15 WRITTEN STATEMENT OF DEFENDANT NO. 411.The Defendant No. 4/IEPF has not contested the claim of the Plaintiff and has stated that it is a statutory custodian of shares and dividend which remains unclaimed for seven years. As per Sub-section (2) of section 125 of Companies Act, 2013, such amounts as mentioned in this section which remain unpaid or unclaimed for a period of 7 or more years from the date of becoming due for payment are to be transferred to IEPF. The amount which has been transferred to IEPF due to said provision can be claimed back by the claimant as per sub section (3) of section 125 of Companies Act, 2013 and Rule 7(1) of the Investor Education Protection Fund Authority (Accounting, Auditing, Transfer and Refund) Rule, 2016.
12.It further stated that it is willing to abide by any orders of this Court.
ISSUES
13.On the basis of pleadings, the following issues were framed:
13.1.Whether the plaintiff is entitled to a decree of declaration against the defendants as owner of 200 equity shares/bonus/split/dividend shares of Safari Industries India Limited? OPP 13.2.Whether the plaintiff is entitled to a decree of mandatory injunction against defendants directing them to transfer above said share along with consequential Digitally signed by benefits in favour of the plaintiff? OPP VAIBHAV VAIBHAV PRATAP PRATAP SINGH SINGH Date:
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13.3.Relief.
PLAINTIFF'S EVIDENCE
14.The Plaintiff examined himself as PW-1. Following documents have been proved by the said witness:
Sl Exhibit/ Mark Documents
No.
1. EX.PW1/X Evidence by way of affidavit
of Plaintiff.
2. EX.PW 1 / 1 Copy of Invoice dated
(OSR) 26.10.1994.
3. EX.PW1/2 to Copy of two Share Certificates
PW1/5 (OSR) and Share Transfer Foim/Share
Transfer Deed.
4. EX.PW1/6 Office copy of communication
(Colly.) dated 07.12.20 17 along with
its postal record.
5. EX.PW1/7(Colly) Original Reply dated
13.12.2017 sent by D-l along
with its original envelope.
6. EX.PW1/8 Original Reply dated 03.04.20
18 sent by D-3.
7. EX.PW1/9 (Colly) Office copy of communication dated 26.04.2018 sent to defendant companies along with its original postal record.
8. EX.PW 1 / 10 Office copy of communication (colly) dated 29.05.2018 along with its original envelop
9. EX.PW1/1 1 Original Reply dated (Colly) 13.06.2018 along with its VAIBHAV PRATAP original envelope. SINGH Digitally signed by VAIBHAV PRATAP CS SCJ No. 832/2019 SINGH Date: 2024.12.24 15:44:14 +0530 Pritpal Singh v. SBI Capital Markets Ltd. & Ors.
Page No. 7 of 1510. EX. PW-1/12 to Office copy of communication 1/14 dated 25.06.2018,30.07.2018 and 22.09.2018 along with its original postal record.
11. EX. PW1/X-1 Additional evidence by way of affidavit
12. EX.PW1/15(OSR) Copy of Ration Card.
13. EX.PW1/16(OSR) Copy of Mark Sheet(High School).
14. EX.PW1/17(OSR) Copy of Old Driving. License.
15. EX.PW1/18(OSR) Copy of New Driving License.
16. MARK-A Copy of Birth Certificate (EX.PW1/19 in affidavit).
17. EX.PW1/20(OSR) Copy of LIC renewal premium receipt.
18. EX.PW1/21(OSR) Copy of Passport.
19. EX.PW1/22(OSR) Copy of Voter ID Card.
15.The witness was cross-examined by the appearing Defendants.
DEFENCE EVIDENCE
16.No evidence was lead by Defendants and final arguments were then heard in detail over multiple dates of hearings. I have gone through the record with the assistance of counsel and I have heard Mr. Rachit Gumber, Learned Counsel for the Plaintiff, Mr. Rajiv Kumar Thakur, Learned Counsel for the Defendant Nos. 1 and 5 and Mr. Sarvesh Shrivastava, Learned Counsel for the Defendant VAIBHAV PRATAP SINGH No.4. Digitally signed by VAIBHAV PRATAP SINGH CS SCJ No. 832/2019 Date: 2024.12.24 15:44:17 +0530 Pritpal Singh v. SBI Capital Markets Ltd. & Ors.
Page No. 8 of 15FINDINGS OF THE COURT ISSUE NO. 1: WHETHER THE PLAINTIFF IS ENTITLED TO A DECREE OF DECLARATION AGAINST THE DEFENDANTS AS OWNER OF 200 EQUITY SHARES/BONUS/SPLIT/DIVIDEND SHARES OF SAFARI INDUSTRIES INDIA LIMITED? OPP
17.As per the evidence affidavit of the Plaintiff Ex. PW1/X as well as the affidavit of additional evidence Ex. PW1/X1, the documents evidencing the transfer of shares have been proved. In the cross-examination of PW-1, only certain suggestions have been given with regard to the evidence already on record. For example, whether Nishu Investments is a party or not; whether any communication was made with Defendant No.5 or not. In the considerate opinion of this Court, these have no bearing on the dispute at hand at all. The only point of relevance raised in the cross-examination is with regard to the spelling of the name of the Plaintiff being at variance in some documents.
18.The claim of the Plaintiff of being the owner of the subject shares is not challenged by any of the Defendants. Defendant No. 2/Seller, when faced with the request of the Plaintiff, did not deny the claim and forwarded its communication to Defendant No. 3/RTA for necessary administrative assistance in enabling the transfer. Thereafter, Defendant No.3/RTA wrote back to the Plaintiff by its letter dated 03.04.2018 Ex. PW1/8 stating Digitally signed by VAIBHAV VAIBHAV PRATAP PRATAP SINGH SINGH Date:
2024.12.24 15:44:22 CS SCJ No. 832/2019 +0530 Pritpal Singh v. SBI Capital Markets Ltd. & Ors.Page No. 9 of 15
that the subject shares have been split and the new shares certificate have been dispatched to the last recorded owner i.e. Defendant No.1, however, Defendant No.1 denied having received the shares certificate. Both of them did nothing further.
19.Defendant No.1, the last recorded owner, has already said that they sold the shares in the open market and are not aware of who ultimately purchased them.
20.Defendant No.4 has already stated that being a mere statutory custodian, it has no skin in the game and is ready to abide by the orders of this Court.
21.The Plaintiff claims to have purchased the shares in question in 1994, for a sum of Rs. 6,262/-, in support whereof, he has produced two original share certificates, transfer deeds as well as invoices. These documents indicate that the shares were indeed transferred to the Plaintiff in a market transaction, albeit without the formal transfer being processed at that time.
22.As per Section 110 of the Indian Evidence Act, 1872, when the question is whether any person is owner of anything of which he is shown to be in possession, the burden of proving that he is not the owner is on the person who Digitally affirms that he is not the owner.
signed by VAIBHAV VAIBHAV PRATAP PRATAP SINGH SINGH Date:
2024.12.24 15:44:24 CS SCJ No. 832/2019 +0530 Pritpal Singh v. SBI Capital Markets Ltd. & Ors.Page No. 10 of 15
23.Since the transaction in question dates back to a time when shares were traded physically, and since the Plaintiff is in possession of the Share Transfer Certificates, invoices, and deeds, he can well be said to be in possession of the shares themselves, which remains unchallenged. The same is not his mere ipse dixit but is evidenced through cogent documentary evidence.
24.The Plaintiff argues that all required steps for transferring the shares were taken, including sending communication to Defendant No. 2 (Safari Industries) for the transfer of shares in December 2017. The Plaintiff also provided supporting documents like PAN, Aadhar, and the original certificates. From the Plaintiff's perspective, he was diligent in seeking the transfer of the shares once he became aware of the procedural lapse, suggesting that he acted promptly once the issue came to light.
25.The limitation to file the present suit for declaration and mandatory injunction began only when the right to sue arose upon the refusal by the Defendant no.2 to transfer the shares in the Plaintiff's name. Defendant No.2 and 3 not appearing in the trial to contest the claims of the Plaintiff shows that they have no objection to the same.
26.The Plaintiff, having purchased the shares in good faith and seeking to have them transferred in his name, has an Digitally signed by VAIBHAV VAIBHAV PRATAP PRATAP SINGH SINGH Date:
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Page No. 11 of 15equitable interest in ensuring that the transfer is completed. His legitimate expectation is that the shareholding should reflect his purchase and ownership, even if there was delay in initiating the formal transfer process.
27.The only real objection taken was with regard to the spelling of the name of the Plaintiff in various documents and the same is taken care of by the fact that owing to a large period of time and local circumstances including variance in diction and pronunciation, the name of the Plaintiff is spelt differently as Pritpal Singh, Pratipal Singh, and Priti Pal Singh in different documents. Looking at all of them, it is clear that it is one and the same person and there is no serious dispute about it and despite cross- examining PW-1 on this aspect, nothing material was elicited from the Plaintiff in this regard.
28.Accordingly, this issue is decided in favour of the Plaintiff and against the Defendants.
ISSUE NO. 2: WHETHER THE PLAINTIFF IS ENTITLED TO A DECREE OF MANDATORY INJUNCTION AGAINST DEFENDANTS DIRECTING THEM TO TRANSFER ABOVE SAID SHARE ALONG WITH CONSEQUENTIAL BENEFITS IN FAVOUR OF THE PLAINTIFF? OPP
29.The ownership of the Plaintiff over the subject shares having been established, now this issue must be decided in VAIBHAV PRATAP its light. SINGH Digitally signed by VAIBHAV PRATAP SINGH CS SCJ No. 832/2019 Date: 2024.12.24 15:44:33 +0530 Pritpal Singh v. SBI Capital Markets Ltd. & Ors.
Page No. 12 of 1530.From a cumulative reading of the defence of the appearing defendants, it is clear that the shares were transferred to the Defendant No.4/IEPF in accordance with statutory obligations. The IEPF holds unclaimed shares for seven years, and as per the regulations, it is Defendant No.4/IEPF and not the other Defendants, who is responsible for re-issuing the shares upon receipt of appropriate claims.
31.The authority is already on record to state that it has no objection in processing the claims, subject to the orders of this Court. The reason the claim could not be made was for want of an NOC from Defendant No.1, the last recored owner.
32.As the Plaintiff is found to be the sole and absolute owner of the subject shares and whatever splits/bonus/dividends that may have resulted from the same, the lack of cooperation on part of Defendant No.1, as last recorded owner, in issuing an NOC cannot come in the way of the same being transferred in the name of the Plaintiff.
33.This issue is also therefore decided in favour of the Plaintiff and against the Defendants.
VAIBHAV PRATAP SINGH Digitally signed by VAIBHAV PRATAP SINGH Date: 2024.12.24 15:44:37 +0530 CS SCJ No. 832/2019 Pritpal Singh v. SBI Capital Markets Ltd. & Ors.
Page No. 13 of 15CONCLUSION
34.In view of the above discussion, the suit of the Plaintiff is decreed in the following terms:
34.1. Decree of Declaration is passed in favour of the Plaintiff and against the Defendants declaring that the Plaintiff is the sole and absolute owner of the 200 equity shares cum bonus cum split shares of Safari Industries (India) Ltd. i.e defendant No.2 Company having face value of Rs. 10/- each, along with all consequential benefits such as bonus, split, dividends etc. etc. as per the following description:
FOLIO CERTIFICATE DISTINCTIVE NO. OF NO. NO. NO. SHARES S05030 00003857 01845601- 100 01845700 S05030 00008668 02326701- 100 02326800 34.2. Decree of Mandatory Injunction is passed in favour of the Plaintiff and against the Defendant Nos. 2 to 4 directing them to take all necessary steps to effect the transfer of the aforesaid shares in the name of the Plaintiff in their record and transfer the shares to the Plaintiff with all consequential benefits including the dividends, bonus, split shares etc. within 60 days from today.
Digitally
35.Parties are left to bear their own costs. Decree-sheet be signed by VAIBHAV VAIBHAV PRATAP PRATAP SINGH SINGH Date:
2024.12.24 15:44:41 +0530 CS SCJ No. 832/2019 Pritpal Singh v. SBI Capital Markets Ltd. & Ors.Page No. 14 of 15
drawn up accordingly.
36.File be consigned to Record Room, after due compliance, as per rules.
Pronounced by me in the Open Court on 24.12.2024.
Digitally signedVAIBHAV by VAIBHAV PRATAP SINGH PRATAP Date:
SINGH 2024.12.24 15:44:44 +0530 (VAIBHAV PRATAP SINGH) Civil Judge, Patiala House Courts New Delhi District, Delhi CS SCJ No. 832/2019 Pritpal Singh v. SBI Capital Markets Ltd. & Ors.Page No. 15 of 15