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V.c.k. Share And Stock Broking Services Limited v. Bank Of Rajasthan Limited

V.c.k. Share And Stock Broking Services Limited v. Bank Of Rajasthan Limited

(High Court Of Judicature At Calcutta)

Governement Appeal No. 3115 Of 2011 And Civil Suit No. 129 Of 1999. | 11-07-2014

Nadira Patherya, J. - This application has been filed by the plaintiff for amendment of the plaint, as the Bank of Rajasthan has been taken over by the ICICI Bank, therefore, ICICI Bank be substituted in place and stead of the Bank of Rajasthan. Besides the aforesaid the plaintiff also seeks further amendment in respect of accrual and dividends.

2. The case of the plaintiff petitioner is that in 1999 a suit was filed challenging the unauthorized sale of shares by the defendant. In proceedings filed before the DRT an order was passed on 19th May, 2003 whereby the plaintiff was given liberty to file legal proceedings for recovery of the dividends on the pledged shares. Accordingly in 2004 a suit was filed for dividends in respect of the shares deposited with the receiver and compensation. The claim in the suit of 1999 and 2004 are separate and distinct. In the suit of 1999 unauthorized sale of shares has been challenged whereas in the suit of 2004 dividends in respect of the shares handed over to the receiver and compensation is sought, therefore if a decree is passed declaring that the shares were sold unauthorizedly the plaintiff would become entitled to the dividend and accruals thereon namely, right issue shares and bonus shares. It is true that such accrual will arise only in case a decree is passed in favour of the plaintiff/petitioner and limitation, if any, will start from the passing of such decree, therefore the amendment sought be allowed.

3. Counsel for the defendant submits that the claim of the plaintiff is barred by laws of limitation and Order 2 Rule 2 of the CPC. Admittedly the shares were sold in 1988 and no question of accrual can arise in 2004. No leave was also sought under Order 2 Rule 2 of the Code of Civil Procedure. An order was passed by the Debts Recovery Tribunal in May, 2003 and it is only after consideration of the facts that liberty was given to the plaintiff to file proceedings for recovery of dividends with interest. Annexure-LC is in respect of shares sold by the predecessor-in-interest of the defendant. The year in which the accrual occurred is 2001, 2003, 2004, 2005 and 2006 the same today is barred by laws of limitation. In fact the plaintiff in the suit of 2004 was also entitled to seek accruals and dividends and in not doing so, so also not taking leave under Order 2 Rule 2 of the CPC is prevented from seeking amendment as sought. Three years from May, 2003 will take one to 2006 therefore only accruals till 2006 could have been sought and what the plaintiff could not have done directly cannot be sought by it indirectly. The claim is barred as accruals which arose after May, 2003 was all that could have been sought by the plaintiff and as the same is barred cannot be included by amendment.

4. Reliance is placed on AIR 2008 SC 2171 [LQ/SC/2008/954] , AIR 2011 SC 41 [LQ/SC/2010/1125] and an unreported decision in the case of Mashyak Grihnirman Sahakari Sanstha Maryadit v. Usman Habib Dhuka & Ors. wherein it was held that as the claim sought was not included in the plaint filed later in point of time, would not entitle the plaintiff to an order of amendment. Therefore no order be passed.

5. Counsel for the plaintiff in reply submits that Order 2 Rule 2 CPC will not apply as the claim is in respect of the shares sold unauthorizedly which is not the subject matter of the 2004 suit. The shares in respect of which accruals and dividend is sought, are those which have been sold unauthorizedly. The right to claim accruals will arise on passing of a decree therefore the question of limitation is not germane. The judgments cited are distinguishable as in the cases cited the plaintiff had knowledge.

6. Reliance is placed on AIR 1957 SC 363 [LQ/SC/1957/12] , (2006) 6 SCC 498 [LQ/SC/2006/684 ;] ">(2006) 6 SCC 498 [LQ/SC/2006/684 ;] [LQ/SC/2006/684 ;] and AIR 2004 SC 4102 [LQ/SC/2004/831] . Therefore orders be passed.

7. Having considered the submissions of the parties OA/263/97 was disposed off by order dated 19th May, 2003. By the said order liberty was given to the plaintiff to take recourse to appropriate legal proceedings for recovery of dividends of the pledged shares barring the dividends received and adjusted. Such proceeding was filed in 2004. In paragraph 28 of C.S.266 of 2004 the plaintiff has sought not only dividends received but also further dividends that may be received by the defendant on the pledged shares. The said paragraph is set out below:-

"No amount is due and payable to the Defendant by the Plaintiff as held by the judicial authority and accordingly the Defendant is also liable to return the dividends received in respect of pledged shares together with further dividend as may be received by the Defendant subsequent to the order of the Debt Recovery Tribunal-I, Kolkata and upto the date of passing of decree herein".

8. On the basis of the said averment prayer (b) has been sought which is also set out below:-

"Alternatively, the Defendant do render full account of all dividends received in respect of pledged shares and decree for such sum on account of unpaid dividend as may be found upon enquiry and taking of accounts".

9. Therefore, the amendment sought in respect of prayer (b)(i) so also paragraph 20B cannot be allowed.

10. The accruals as set out in Annexure - I sought to be brought by way of amendment is till 2006. Section 10 of the Limitation Act will come to the aid of the petitioner as no suit against a person in whom a property is vested as a trustee, or for an account of the property or proceeds is barred by any length of time. Admittedly, in the 2004 suit dividend has been claimed accruals is a follow-up or a consequence of the shares pledged and held in trust. While no prejudice will be caused to the defendant in case the amendment is allowed in respect of accruals, great prejudice will be caused to the plaintiff if disallowed. No legal right has also accrued in favour of the defendant.

11. The decisions relied on by the defendant are distinguishable on facts as in AIR (2008) SC 2171 [LQ/SC/2008/954] and AIR (2011) SC 41 [LQ/SC/2010/1125] for the right sought to be claimed, a period of limitation had been prescribed. This is not so in the instant case in view of Section 10 of the Limitation Act. In the instant case the amendment sought is in respect of accruals alone. This will not change the nature and character of the suit at it would in AIR (2011) SC 41 [LQ/SC/2010/1125] .

12. As held in AIR (2004) SC 4102 [LQ/SC/2004/831] if by allowing amendment further litigation is avoided and subserves justice, amendment should be allowed. This is one such case where amendment should be allowed for the ends of justice.

13. Accordingly, there will be an order in terms of prayers (a) and (b) of the Masters summons. Let such amendment be carried out within 8 weeks from the date of receipt of the order. Let a copy of the amended plaint be served on the defendant. Service of the writ of summons be dispensed with. It is made clear that by the said order the amendment sought in respect of dividends is disallowed and only in respect of accruals allowed as mentioned above.

Advocate List
  • For Petitioner : Surajit Nath Mitra, Nirmalya Mohan Bhattacharjee, Brajesh Jha
  • Bani Israil, Advocates, for the Petitioner; Tilok Bose, Sudip Deb
  • Syed Ali Murshed, Advocates, for the Defendant
Bench
  • HON'BLE JUSTICE NADIRA PATHERYA, J.
Eq Citations
  • (2014) 141 AIC 555
  • LQ/CalHC/2014/963
Head Note

Limitation Act, 1963 — S. 10 — Suit against trustee — Accruals of shares held in trust — Amendment of plaint seeking recovery of — Allowed — Held, no prejudice will be caused to defendant in case amendment is allowed in respect of accruals, great prejudice will be caused to plaintiff if disallowed — No legal right has also accrued in favour of defendant — Amendment sought is in respect of accruals alone — This will not change the nature and character of the suit — If by allowing amendment further litigation is avoided and subserves justice, amendment should be allowed — In the instant case, amendment should be allowed for the ends of justice — Thus, amendment in respect of accruals alone allowed