Delhi District Court
M/S. Sanjay Kumar Singhal (Huf) vs A. Smt. Premlata H. Karani on 10 November, 2014
IN THE COURT OF SH. DEVENDER KUMAR, ADJ-04, NEW DELHI
DISTRICT, PATIALA HOUSE COURTS, NEW DELHI.
CS No. 95/14
Unique ID. 02403C0072602012
M/s. Sanjay Kumar Singhal (HUF)
Through its Karta
Shri Sanjay Kumar Jindal
At A-3/54, Sector-3,
Rohini, Delhi-110085. ........Plaintiff
Vs.
1.A. Smt. Premlata H. Karani 1B. Shri Hemchandra T. Karani Both 1A and 1B At C/o King Traders P.O. Box. 2058, Dubai, U.A.E.
2. M/s. CMS Securities Ltd.
Through its Director At D-20, Rose Apartments, Sector-14 Extension, Rohini, Delhi-110085
3. M/s. Jindal Steel and Power Ltd.
Through its Director At 28, Najafgarh Road, Moti Nagar, New Delhi-110015.
(Since deleted vide order dated 28.02.2014)
4. M/s. Nalwa Sons Investments Ltd.
Through its Director.
5. M/s. Jindal Stainless Ltd.
Through its Director.
Both No. 4 & 5 at Delhi Road, Near Railway Crossing, Hissar-125005, Haryana.
CS No. 95/14 M/s. Sanjay kumar Singhal (HUF) Vs. Smt. Premlata H. Karani & Ors. 1/5
6. M/s. Abhipra Capital Ltd.
Through Its Director At GF-58-59, World Trade Centre, Bara Khamba Lane, New Delhi-110001. ........Defendants Date of institution : 05.11.2012 Date on which reserved for judgment : 10.11.2014 Date of decision : 10.11.2014 Ex-Parte Judgment :
Vide this judgment, I shall dispose off a suit for declaration and mandatory injunction filed by the plaintiff against the defendants. Brief facts of the case are as under:
1. Plaintiff is a Hindu Undivided Family (HUF) and Sh. Sanjay Kumar Singhal is the Karta of the same and is duly competent to institute this suit. It is further alleged that the plaintiff purchased total 282 shares equity-cum-split-cum- bonus shares of M/s. Jindal Strips Limited from defendant no.2 on 24.01.2000 @ 171.70 per share vide Bill No. 018039, but this suit is pertaining to 240 shares only. It is further alleged that the plaintiff was provided six share certificates, out of which, two share certificates of 100 shares (each) and four share certificates of 10 shares (each), alongwith transfer deeds signed in blank by the Transferor.
It is further alleged that the shares were sold by the plaintiff through market mechanism in the year 2000 itself and were in the market circulation till June, 2012 when the shares received back by the plaintiff as bad delivery. It is further alleged that the plaintiff approached the defendant no.2 for replacing the subject shares with some other shares or in alternative to arrange the fresh transfer deeds from the defendant nos. 1A and 1B, however the defendant no.2 has shown its inability. It is further alleged that on 16.08.2012, the plaintiff lodged the said subject shares for transfer with the defendant nos. 3 to 5 under the provisions of the Companies Act, without transfer certificate alongwith Indemnity Bond and an affidavit but the same was not allowed. It is further alleged that the plaintiff has complied with all the requirements / formalities for transfer of subject shares in favour of plaintiff but defendant no.6 vide communication dated CS No. 95/14 M/s. Sanjay kumar Singhal (HUF) Vs. Smt. Premlata H. Karani & Ors. 2/5 08.10.2012 has rejected the request of the plaintiff and has directed to file a suit for declaration of title of the shares, hence present suit. By way of present suit, plaintiff has sought a decree of declaration thereby declaring the plaintiff to be a sole and absolute owner of 240 equity-cum-split-cum-bonus shares of M/s. Jindal Strips Ltd having face value of Rs. 10/- (each) and decree of Mandatory Injunction thereby directing the defendant nos. 3 to 5 to transfer the shares in the name of the plaintiff.
2. The defendants were directed to be served, but defendant nos .1A and 1B have failed to appear despite service of the summons vide ordersheet dated 09.09.2013 and proceeded ex-parte on 24.03.2014. Defendant nos. 4 to 6 have also been served but again failed to appear and proceeded ex-parte vide order dated 24.03.2014. However, defendant no.2 has filed written statement. Defendant no.3 has been deleted from the array of parties vide order dated 28.02.2014 but thereafter all the defendants have been proceeded ex-parte vide order dated 24.03.2014.
3. Defendant no.2 has filed written statement thereby alleging that no prayer has been made against the defendant no.2 but it is admitted that the shares certificates were sold out by the defendant no.2 to the plaintiff and share certificates alongwith duly signed transfer deed were handed over to the plaintiff, but plaintiff has lost the original transfer deeds duly signed by transfer and defendant no.2 is not liable for it. Thereafter defendant no.2 has failed to appear and proceeded ex-parte.
4. To prove the case, plaintiff has examined himself as PW1 and closed PE.
5. I have heard the arguments and perused the record. With the unrebutted testimony of PW1 Sh. Sanjay Kumar Singhal, plaintiff has proved that he is well competent to file this suit on behalf of plaintiff being Karta. It is further proved that on 24.01.2000, plaintiff purchased 280 shares from the defendant no.
CS No. 95/14 M/s. Sanjay kumar Singhal (HUF) Vs. Smt. Premlata H. Karani & Ors. 3/5 2 against Bill Ex. PW1/1 and defendant nos. 1A and 1B issued transfer certificates Ex. PW1/2 to Ex.PW1/7. It is further deposed that in the year 2000, plaintiff sold out the shares through market mechanism and the shares remained in circulation in market till January 2012, (June 2012 as per plaint) but the same were received back by the plaintiff as bad delivery and plaintiff approached to defendant no.2 to issue fresh transfer deed and request was made vide Ex. PW1/8. It is further proved that the plaintiff lodged the said shares with the defendant nos. 3 to 5 under the provisions of Section 108(1) of Companies Act, 1956 without Transfer deeds vide communication Ex. PW1/9 which was served through documents Ex. PW1/10 to Ex. PW1/13. It is further deposed that the 42 shares, out of total 282 shares, were different due to this suit has been filed with regard to 240 shares only. It is further deposed that the defendant no.6 has refused to transfer the shares vide letter Ex. PW1/14 in arbitrary manner. The testimony of plaintiff is unrebutted without cross examination.
6. During the course of arguments, Ld. Counsel for the plaintiff has submitted that as per the latest amendment in the Companies Act, Section 10 by which Company Law Tribunal and National Company Law Appellate Tribunal had been constituted has been declared null and void and unconstitutional by the Hon'ble Supreme Court of India in a judgment titled Union of India Vs. R. Gandhi, President, Madras Bar Association, 2010 VI AD (S.C) 501. It is further argued that it has been held by the Hon'ble Bombay High Court in National Insurance Company Limited Vs. Glaxo India Limited in (1999) 2 Comp LJ 205 (Bombay) that in case of the matter of rectification of registrar of Members, the company court along would have jurisdiction but the issue of title and ownership will have to be decided by Civil Court only. It is further argued that the plaintiff has no other remedy to seek this relief as the National Company Law Tribunal and National Company Law Appellate Tribunal have been declared unconstitutional and this suit is maintainable.
7. I have heard the arguments. The judgment (1999) 2 Comp. LJ 2005 (Bombay) is relevant. As per this judgment, rectification of registration of CS No. 95/14 M/s. Sanjay kumar Singhal (HUF) Vs. Smt. Premlata H. Karani & Ors. 4/5 members is to be adjudicated in terms of Section 155 of Companies Act and the Hon'ble Supreme Court of India in Ammonia Supplies Corporation (P) Ltd. Vs. Modern Plastic Contains Pvt. Ltd. & Ors (1998), 4 Comp. LJ 211 (SC) has dealt with the same proposition and has held that the complicated issues liked declaration, ownership etc are to be adjudicated by the civil court only. In this judgment, (1999) 2 Comp. L J 205 the Hon'ble High Court of Bombay had relied upon a judgment passed by the Hon'ble Delhi High (full Bench) titled Ammonia Supplies Corporation (P) Ltd. Vs. Modern Plastic Contains Pvt. Ltd. & Ors (1994), Comp. LJ 20 has held that the remedy of suit for declaration of disputes relating to title to share is not barred under Section 155 of Companies Act. In view of this judgment, it is clear that the declaration and injunctions only may be granted by a civil court and jurisdiction of this court is no barred.
8. As such, the plaintiff has proved his case and is entitled for declaration and Mandatory Injunction. I hereby pass a decree of declaration in favour of plaintiff against the defendants thereby declaring the plaintiff to be a sole and absolute owner of 240 equity-cum-bonus shares, purchased vide Folio No. 900277, Certificate No. 469105 to 469110, Distinctive Nos. 56896423- 56896662 of M/s. Jindal Strips Ltd., from the defendant no.2. Further a decree of Mandatory Injunction is also passed in favour of plaintiff and against the defendants thereby directing the defendant nos. 3 to 5 to transfer abovesaid shares in favour of plaintiff in its record and to return the original share certificates in the name of the plaintiff. No such order of cost. Decree sheet be prepared. File be consigned to record room.
Dated:- 10.11.2014 (Devender Kumar)
Announced in the open Court. ADJ-04, New Delhi District,
Patiala House Courts, Delhi.
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