1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 2310 OF 2008 IN SUIT NO. 1936 OF 2008 Pramila Lodha & Anr. ..... Plaintiffs. V/s Edelweiss Securities Limited & Anr. ..... Defendants. ------ Mr. Cyrus Ardheshir i/b M/s. Rustamji & Ginwala for the plaintiffs. Mr. S.S. Purohit i/b M/s. Purohit & Co. for defendant No.1. ------- CORAM: V.M. KANADE, J. DATE : 21st July, 2008 P.C. 1. Plaintiffs have filed this suit inter alia for recovery of a sum of Rs 12,73,144.36 and for permanent injunction against the defendants from selling, transferring, redeeming or in any manner dealing with 1,00,000 units of Reliance Long Term Equity Fund managed by defendant No.2, belonging to the plaintiffs and for other reliefs. 2. It is the case of the plaintiffs that defendant No.1 is carrying on business of dealing and trading in shares and securities as brokers and commission agents, portfolio manager, investment banking and other financial services. 2 The plaintiff No.1 was interested in trading in shares and, therefore, she approached defendant No.1 and informed him that she would like to deal and trade in shares. Defendant No.1 asked the plaintiff No.1 to furnish security which could be pledged in favour of defendant No.1. Accordingly, the plaintiffs gave security in respect of 1,00,000 units of Reliance Long Term Equity Fund, Kotak Mahindra Mutual Fund and Lotus India Mutual Fund. Accordingly, a letter was written by defendant No.1 to defendant No.2 not to redeem the units or register any transfer of the units or mark any lien on the units in favour of any other person till the alleged lien is vacated. Accordingly, the plaintiff No.1 never had any transaction in respect of shares and no account was opened by defendant No.1 and, as such, no trading activity in respect of the shares was done by plaintiff No.1. According to the plaintiffs, after the stock market fell in January 2008, the plaintiff No.1 informed defendant No.1 not to exercise their lien and to release the lien and inform the defendant No.2 accordingly. However, defendant No.1 did not inform the defendant No.2 and encashed the units of Lotus Agile Fund and realized a sum of Rs 12,73,144.36. When the defendant No.1 was confronted with regard to the sale of the said units, defendant No.1 informed the plaintiffs that in view of the amounts that were allegedly due and payable by the Company known as Blue Diamond Polyplast India Limited to defendant No.1, the said units had been sold by them. Defendant No.1 informed the plaintiffs that the security at Exhibits "A", "C" & "C" respectively was created in respect of 3 liability of Blue Diamond Polyplast India Limited and, therefore, they were unable to release the security until the outstanding dues of Blue Diamond Polyplast India Limited were cleared. Plaintiffs, therefore, have filed the present suit. 3. The learned Counsel appearing on behalf of the plaintiffs invited my attention to the documents annexed to the plaint and submitted that this is a fit case where an ad- interim relief in terms of prayer clauses (a) & (b) of the notice of motion should be granted. 4. The learned Counsel appearing on behalf of defendant No.1, on the other hand, submitted that perusal of the security which was given by the plaintiffs to defendant No.1 discloses that it is nowhere mentioned that the security is given towards securing the interest of defendant No.1 in respect of trading activity which was to be commenced by the plaintiffs. The learned Counsel submitted that the plaintiffs had interest in present and past in holding the shares of a Private Limited Company viz. Blue Diamond Polyplast India Limited and the said security was given to secure the outstanding amounts which were due and payable by the said Blue Diamond Polyplast India Limited. The learned Counsel also relied upon the documents, a compilation of which has been tendered in this Court. 5. It is not doubt true that the security which is given by 4 the plaintiffs does not mention that it is towards the trading activity of the plaintiffs. However, the fact remains that there is no document produced by defendant No.1 to show that this security was given towards securing the liability of Blue Diamond Polyplast India Limited. It is an admitted position that, for the first time, by letter dated 30/05/2008, the defendant No.1 has come forward with the case that towards the liability which was due and payable by the Blue Diamond Polyplast India Limited and for which the lien has been created in respect of units of plaintiff No.1, the lien could not be lifted. It is apparent that there is no material on record to show that such a lien was created towards the liability of the said Company viz. Blue Diamond Polyplast India Limited. On the other hand, the correspondence between the parties clearly indicate that the security was given towards the trading activity which was intended to be commenced by plaintiff No.1 with defendant No.1. In my view, therefore, prima facie case is made out by the plaintiffs for grant of ad-interim relief in terms of prayer clauses (a) & (b) pending the hearing and final disposal of the suit. 7. Accordingly, interim relief is granted in terms of prayer clause (a) & (b) pending the hearing and final disposal of the suit. 8. Notice of Motion is disposed of in the above terms. 5 V.M. KANADE, J.