NMS. 1690- 11 - 1 - VPH IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION No. 1690 OF 2011 IN SUIT NO. 1673 OF 1998 Shailesh H. Bajaj ... Plaintiff Vs. Creative Outerwear Ltd. & Anr. ... Defendants *** Mr. Zal Andhyarujina a/w Ms. Muhita Lewis i/b Ravi R. Goenka, for the Plaintiff. Mr. Dinyar Madan, Sr. Advocate a/w Mr. Sham Mehta a/w Mr. G. B. Kedia, for Defendant No. 1. Mr. L. V. Boomer i/b Shaunak Satpute & Co., for Defendant No.2. *** CORAM : SMT. ROSHAN DALVI, J. DATED : JULY 21, 2011 P.C. 1. This Notice of Motion is taken out in a suit which is pending for the last 13 years, to direct the second defendant Company to transfer 1,60,000 shares of defendant No.1 bearing Certificate No. 839661 and Distinctive Nos. 69737116 to 69897115 in the name of the plaintiff. The plaintiff does not press this relief. 2. The Notice of Motion is also form seeking payment to the plaintiff of an amount of Rs. 6,28,528/- calculated as the un- NMS. 1690- 11 - 2 - apportioned dividend received on 1,60,000 shares of defendant No.1 by defendant No.2 and for injunction restraining for transfer of the said shares. 3. The plaintiff took a loan of Rs. one Crore from defendant No.1. He pledged 31,000 the shares of defendant No.2 with defendant No. 1. He committed certain defaults. The shares came to be sold, Rs.75,00,000/- were obtained from the sale of the shares on 10-1-1998. The plaintiff was sued by defendant No.1 for recovery of remainder of Rs.25,00,000/- with interest in a suit being Summary Suit No. 5217 of 1999. A decree passed in this suit has been upheld upto the Supreme Court. In execution Insolvency Notice taken out by the plaintiff therein/defendant No. 1 herein has again been upheld by the Supreme Court. The plaintiff thereafter paid the principal amount of Rs.25,00,000/- and interest amount of Rs.49,00,000/- which was due and payable, on 19-8-2003. 4. The plaintiff claims that the learned Magistrate in a criminal complaint which is filed for dishonour of certain cheques of the plaintiff under Section 138 of the Negotiable Instruments Act, observed that 4,000 shares of the plaintiff were not sold by defendant No.1. Out of 35,000 shares pledged by plaintiff to defendant No.1. The plaintiff has given the specified share Certificate bearing Distinctive Numbers to claim his legal rights under those shares. 5. However, the plaintiff’s father had taken a certain loan upon pledge of 19,000 shares of defendant No.2 from defendant No.1. NMS. 1690- 11 - 3 - That loan has been repaid and 15,000 out of 19,000 shares have been returned. 4,000 shares stated to have been the shares pledged by father of the plaintiff were not returned to the plaintiff’s father. 6. Defendant No.1 sought to return those shares to the plaintiff’s father under the letter dated 1-9-2003 addressed to the plaintiff’s father with a copy to the plaintiff. Letters are admittedly received by the plaintiff as well as his father. They are replied by the plaintiff as well as his father. The reply of the plaintiff’s father dated 9-9-2003 reveals that 4,000 shares were, admittedly, not returned by defendant No.1. The plaintiff’s father claimed that 4,000 shares returned were not the ones pledged by him. He claims that those were different shares. He returned those 4,000 shares forwarded by defendant No.1 to him along with the letter dated 1-9-2007 together with the blank transfer deeds forwarded to him. He also returned the amount of Rs.50,000/- forwarded to him by way of dividend which had accrued under the shares. 7. The plaintiff replied to the letter dated 1-9-2003, on 19-9-2003. He also stated that 4,000 shares returned by defendant No. 1 “had nothing to do with the loan of Rs. one Crore”, advanced by defendant No.1 to him. He also claims that they belonged to a completely different transaction which was between defendant No.1 and his father. This was the reply of the plaintiff to the CC sent by defendant No. 1 to him. Hence, both the plaintiff as well as his father disclaimed the shares sent to father of the plaintiff. NMS. 1690- 11 - 4 - 8. The plaintiff claims that from the evidence which transpired before the learned Magistrate in a Criminal prosecution under Section 138 of the Negotiable Instruments Act, he came to know that 4,000 specific shares out of 35,000 shares of defendant No. 2 pledged by him with defendant No.1 remained unsold. He claims the benefits that have accrued on those shares in this Notice of Motion. 9. It is an admitted position that the plaintiff had pledged 35,000 shares of defendant No.2 with defendant No.1. The plaintiff’s father had pledged 19,000 shares of defendant No.2 with defendant No.1. The plaintiff’s father was returned the balance 4,000 shares out of 19,000 shares when he repaid the loan. The plaintiff has never repaid the loan. Hence all the shares pledged by him had to be sold. The value of 35,000 shares which are stated to have been sold is Rs. 6,14,459/-. Plaintiff has been given the benefit of the amount obtained by defendant No. 1 upon the sale of the shares and the plaintiff has been sued only for the balance amount. 10. Had defendant No.1 sold only 31,000 shares, the claim of defendant No.1 in the suit filed against plaintiff for recovery of the balance amount of the loan would have been higher. 11. In substance, 4,000 shares out of shares pledged by the plaintiff as well as his father remained with defendant No.1. The plaintiff’s father’s loan is repaid and the claim on the plaintiff’s loan has been recovered. NMS. 1690- 11 - 5 - 12. The learned counsel for the defendant No.1 contended that if the plaintiff as well as his father are jointly given the discharge by defendant No.1, defendant No.1 would hand over 4,000 shares to the plaintiff or the plaintiff’s father. That is the only aspect that remains of the two loan transactions. The plaintiff is not agreeable to do that. 13. The letter dated 1-9-2003 addressed to the plaintiff’s father was CCed to the plaintiff. That shows that in fact the father and the son knew about both the loans and the pledge of the shares of the same Company. The two transactions were in fact with one family. The plaintiff’s father is not a third party stranger. The total holding of the plaintiff and his father is not shown to be more than 35,000 + 19,000 shares pledged. Only upon evidence led by the plaintiff in the suit with regard to his claim upon ownership of the 4000 shares and his cross-examination thereupon can this aspect be determined. Consequently, in this Notice of Motion, pending the plaintiff’s suit, which is in respect of the same loan, the plaintiff cannot be granted the relief sought. Hence, Notice of Motion is dismissed. 14. However, pleadings are complete. The hearing of the suit is expedited. It is for the plaintiff to prosecute the suit after the Court frames the issues. Suit is adjourned to 11th August, 2011 for framing the issues. [ SMT. ROSHAN DALVI, J.