Regular Second Appeal No.1600 of 2009 (O & M ) IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: February 15 , 2011. Regular Second Appeal No.1600 of 2009 (O & M ) Subhash Chander and another ….Appellants Versus Bikram Singh and another ..Respondents CORAM: HON’BLE MR. JUSTICE MOHINDER PAL. 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not. 3. Whether the judgment should be reported in the Digest? Present: Mr. R.C. Setia, Senior Advocate, with Mr. Surinder Singh, Advocate, for the appellant. None for respondent No.1. Mr. P.K. Kukreja, Advocate, for respondent No.2. -.- MOHINDER PAL, J. Bikram Singh (plaintiff-respondent No.1) filed the instant suit for recovery of Rs.4,79,102/- against T.R. Manaktala (since deceased), who was a Stock Broker and a member of Northern India Stock Exchange, Chandigarh, and Northern India Stock Exchange, Regular Second Appeal No.1600 of 2009 (O & M ) Chandigarh, through its President (hereinafter referred to as `the Stock Exchange’) , which was decreed by the trial Court along with costs and interest vide judgment and decree dated 23.4.2004. The judgment and decree passed by the trial Court, on appeal by the Stock Exchange, was set aside qua the Stock Exchange (defendant No.2) but upheld qua T.R. Manaktala defendant No.1 (since deceased) vide judgment and decree dated 19.7.2008 passed by the lower appellate Court. This second appeal has been filed by Subhash Chander Manaktala and Rakesh Kumar Manaktala sons of T.R. Manaktala (defendant No.1) against the judgments and decrees passed by both the Courts below. None appeared for respondent No.1. I have heard Mr. R.C. Setia, Senior Advocate, assisted by Mr. Surinder Singh, Advocate, appearing for the appellants and Mr. P.K. Kukreja, Advocate, appearing for respondent No.2 and have gone through the records of the case. At the outset, it may be mentioned here that as there was no privity of contract between the plaintiff and the Stock Exchange, no cause of action arose to the plaintiff to file the suit against the Stock Exchange (defendant -respondent No.2). No document was available on record to show that there was a privity of contract between the Stock Exchange and the brokers dealing in the sale and purchase of the stock and shares. Similarly, there was no such contract of the Stock Exchange with T.R. Manaktala defendant No.1 (since deceased), who was one of the brokers having membership of the Stock Exchange (defendant No.2). No transaction of the plaintiff had routed through Stock Exchange in its individual capacity, nor it (Stock Exchange) stood guarantor for its members, who were dafaulters Regular Second Appeal No.1600 of 2009 (O & M ) towards their clients. Besides, the Stock Exchange cannot be held liable to pay anything to the plaintiff because the investors are the clients of the members of the Stock Exchange. The plaintiff was the client of defendant No.1, father of the appellants. As such, the lower appellate Court has rightly set aside the judgment and decree passed by the trial Court qua Stock Exchange (defendant-respondent No.2). So far as defendant No.1 is concerned, the judgments and decrees passed by both the Courts below are upheld for the reasons to be given hereinafter. The plaintiff, an agriculturalist, was known to defendant No.1, who was a Stock Broker in the Stock Exchange. On 13.8.1998, the plaintiff contacted defendant No.1 for sale of his shares. On account of sale purchase of the shares made by the plaintiff through defendant No.1 from 13.8.1993 to 22.8.1993, a sum of Rs.6,14,525/- became due to be paid by defendant No.1 to the plaintiff as on 19.1.1993. However, against this amount of Rs.6,14,525/-, defendant No.1 paid only Rs.2,50,000/- in October, 1993. Out of the remaining amount of Rs.3,64525/-, defendant No.1 afterwards paid Rs.70,000/- through cheque dated 25.7.1994. Defendant No.1 had charged brokerage of Rs.70,000/- from the plaintiff. After adjusting this amount of brokerage, defendant No.1 acknowledged his liability on 9.6.1994 to the tune of Rs.3,64,525/-. Plaintiff had also handed over 70 shares of Reliance Industries Limited on 8.2.1995 for rectification of the delivery. These shares had been purchased by the plaintiff from defendant No.1 and subsequently upon lodging these shares for transfer with the Company, the delivery of these shares was found to be defective. Defendant No.1 was required to either have the bad delivery rectified or to exchange it with a new delivery within a Regular Second Appeal No.1600 of 2009 (O & M ) period of fifteen days. However, defendant No.1 returned only 20 shares to the plaintiff and the remaining 50 shares, valued at Rs.14,000/-, were misappropriated by him (defendant No.1). Full payment of price of these shares had been made by the plaintiff to defendant No.1 at the time of receiving the delivery. In all, the plaintiff filed the suit for recovery of Rs.4,79,102/- i.e Rs.2,94,525/- as principal outstanding amount plus Rs.70,000/- paid as brokerage to defendant No.1 totalling Rs.3,64,525/-, Rs.60148/- as interest on Rs.3,64,525/- at the rate of 18 per cent per annum from 1.9.1993 to 30.7.1994, Rs.1,06,029/- as interest on Rs.2,94,525/- at the rate of 18 per cent per annum from 1.8.1994 to 31.7.1995, Rs.14,000/- as value of 50 Shares of Reliance Industries Limited which had been misappropriated by defendant No.1, Rs.3750/- as interest on Rs.14,000/- at the rate of 18 per cent per annum from 1.3.1995 to 31.7.1996 and Rs.830/- as dividend paid by the Company on 50 shares of Reliance with effect from 1.1.1994 along with interest prevalent at the share market, which was alleged to be 36 per cent per annum. However, the trial Court passed a decree in favour of the plaintiff to the extent of Rs.4,79,102/- with costs and interest at the rate of 18 per cent per annum from the date of suit till decree and future interest at the rate of 6 per cent per annum from the date of decree till its realization vide judgment and decree dated 23.4.2004. As mentioned above, the judgment and decree passed by the trial Court, on appeal by the Stock Exchange, was set aside qua the Stock Exchange (defendant No.2) but upheld qua T.R. Manaktala defendant No.1 (since deceased), father of appellants Subhash Chander Manaktala and Rakesh Kumar Kanaktala vide judgment and decree dated 19.7.2008. It may be mentioned here that T.R. Manaktala defendant No.1 did not Regular Second Appeal No.1600 of 2009 (O & M ) prefer any appeal before the lower appellate Court against the judgment and decree passed by the trial Court nor he filed any cross objections in the appeal preferred by the Stock Exchange (defendant No.2) against the judgment and decree passed by the trial Court. As such, the judgment and decree passed by the trial Court against defendant No.1 has attained finality as he neither filed any appeal thereagainst nor any cross objections to the appeal preferred by the Stock Exchange against the judgment and decree passed by the trial Court. Learned counsel for the appellants argued that the plaintiff was not entitled to recover Rs.4,79,102/- from defendant No.1 as exorbitant interest and expenses of Rs.1,84,000/- were capitalized wrongly in the said sum. As mentioned above, defendant No.1 did not prefer any appeal against the judgment and decree passed against him by the trial Court, which has by now attained finality. Still further, when the Stock Exchange challenged the judgment and decree passed by the trial Court insofar as the Stock Exchange was held liable to pay the decretal amount along with defendant No.1 jointly and severally, defendant No.1 did not choose to file any cross objections therein (appeal filed by the Stock Exchange –defendant No.2). The appellants cannot now successfully challenge the findings of fact recorded by both the Courts below in this Regular Second Appeal. It was also pointed out by the learned counsel for the appellants that the appellants were not impleaded as parties by the Stock Exchange (defendant No.2) in the appeal filed by it (Stock Exchange) against the judgment and decree of the trial Court before the lower appellate Court after defendant No.1 had died and, as such, the appellants are not bound by the judgment and decree passed by the lower appellate Court. However, after giving a careful thought to Regular Second Appeal No.1600 of 2009 (O & M ) this submission of the learned counsel for the appellants, I do not find any merit therein. Firstly, defendant No.1 was represented by counsel Mr.Yogesh Putni, Advocate, before the lower appellate Court. Secondly, defendant No.1 had not challenged the judgment and decree passed against him by the trial Court and had also not filed cross objections in the appeal filed by the Stock Exchange against the judgment and decree passed by the trial Court and the judgment and decree passed by the trial Court, as such, had by then attained finality qua defendant No.1. The appellants being the son of defendant No.1 are liable to pay the decretal amount to the plaintiff. In the result, there is no substance in this appeal. The same is, accordingly, hereby dismissed. However, there shall be no order as to costs. Dated: February 15,2011. (MOHINDER PAL) ak JUDGE