9911796707
TMI Blog1995 (4) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,50,000 was advanced to respondent Nos. 1 to 3 and, as a security, a demand promissory note was obtained. The respondent Nos. 1 to 3 also pledged 16,440 shares along with the transfer forms. The appellant claims that an oral agreement was reached between the appellant and respondent Nos. 1 to 3 that in case the amount of loan along with interest was not repaid within a stipulated period, the pledged transaction would amount to sale of the shares in favour of the appellant. The appellant claims that as the amount was not paid by respondent Nos. 1 to 3, the appellant served notice on 2-6-1987 that the shares stand transferred in favour of the appellant. The appellant then lodged the shares on 16-9-1987 with the company for registration. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent that the pledged transaction would automatically result into a sale transaction, was untenable as the parties had not entered into any such oral agreement. The respondent Nos. 1 to 3 denied receipt of alleged notice dated 2-6-1987, claimed to have been served by the appellant under section 176 of the Indian Contract Act, 1872. The respondent Nos. 1 to 3 claimed that respondent No. 4 is a closely held company and the shares were handed over and blank transfer forms were signed merely as a collateral security for return of Rs. 1,50,000. The respondent Nos. 1 to 3 took out Notice of Motion No. 1465 of 1991 restraining the appellant and respondent No. 4 from giving effect to the decision of the CLB. The respondent Nos. 1 to 3 claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal is preferred at an interim stage and any observations made by the learned Single Judge and in this judgment are merely prima facie observations. Shri Mehta submitted that the CLB was competent to decide the question of title while exercising powers under section 111 and has indeed decided the issue of title to the disputed shares and that decision must operate as res judicata and the learned Single Judge was not entitled to grant interim relief. We are unable to accept the contention urged by the learned counsel. The powers under section 111 are conferred upon the Central Government to entertain the appeal against the order of the company declining to register the shares. The Central Government, though a Tribunal, as held by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain appeal under section 111 is not unrestricted being an alternative to the right to approach the civil court and is subject to the same limitations which are implicit in the exercise of power by the civil court under section 155. It is not possible to accept the contention of the learned counsel that these observations should be construed as to mean that the powers of the Central Government under section 111 and the High Court under section 155 are identical. The question of title cannot be decided by the Central Government and there is nothing in section 111 to warrant a contrary conclusion. 3. Even assuming that the CLB, while exercising powers under section 111, can determine issue of title to the disputed shares, the question wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disputed shares and consequently civil court cannot re-examine the question. In our judgment, the contention of the appellant that the plea of the respondent Nos. 1 to 3 is barred by principles of res judicata is prima facie not acceptable. 4. Shri Mehta then submitted that the appellant had served notice dated 2-6-1987 on respondent Nos. 1 to 3 in accordance with section 176. The section inter alia provides that if the pawner makes default in payment of the debt at the stipulated time, then the pawnee may sell the thing pledged on giving the pawner reasonable notice of the sale. The trial Judge rightly observed that the appellant did not produce any record to substantiate the contention that notice was served. The appellant co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is required to be stated at this juncture that the amount advanced by the appellant for securing pledge of shares was Rs. 1,50,000 and that amount was advanced on 2-6-1986. The learned Single Judge granted relief to respondent Nos. 1 to 3 on condition that the respondents deposit Rs. 2,50,000 with the Prothonotary and Senior Master of this Court. The amount has accordingly been deposited and that sufficiently protects the interest of the appellant. In these circumstances, the order passed by the learned Single Judge does not suffer from any infirmity and is not required to be disturbed. Accordingly, appeal fails and is dismissed. In the circumstances of the case, there will be no order as to costs. - - TaxTMI - TMITax - Corporate L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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