9911796707
TMI Blog1999 (10) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... placed along with that Appeal From Order before me since both were connected matters. Subsequently the Appeal From Order was dismissed by me by a speaking order dated 1st July, 1999. This; Revision Application was however again placed before me by the order of the Hon'ble Chief Justice since I had heard that Appeal From Order on earlier occasion and the Revision Application is now being disposed of after hearing the learned Counsel for both the parties. 2. Mr. Shah has appeared for the petitioners and Mr. Shroff has appeared for the respondent Nos. 1 to 3. Both the learned Counsel have taken me through the pleadings on records as also various authorities to decide as to whether the judgment and order of the learned Judge was right or otherwise. 3. The respondent Nos. 1 to 3 to this revision have filed the above referred suit. The petitioners herein are defendant Nos. 1 and 2 in that suit and respondent No. 4 herein is the defendant No. 3 in that suit. The said plaintiff Nos. 1 and 2 are the shareholders and directors of plaintiff No. 3 company. It is an undisputed fact that plaintiff Nos. 1 and 2 had the shares of defendant No. 3 Bank valued at mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were given under the loan. It is also the stand of defendant No. 1 that under the document of loan, the shares have been pledged and under Clause 2.7 thereof in the event of any default, the defendant No. 1 was entitled to sell and dispose of those shares. It is also their stand that as disclosed in Clause 2.8 of the loan document that they had complete authority to collect the dividend, interest, etc. from those shares and in the event there was a dispute between the parties, it was provided in Clause 6.6 thereof that the Bombay High Court shall have exclusive jurisdiction in the event of a dispute relating to the matter covered by that agreement. Clause 2.1 of the agreement describes the deposit of shares as a pledge specifically. 5. The principal prayers in the suit were prayers (a) and (b) which read as follows:- (a) the Defendant No. 1, their servants and agents be restrained by a permanent order and injunction of this Hon'ble Court from in any manner dealing with including transferring or selling 6,29,900 equity shares of face value of ₹ 10/- each of Defendant No. 3 and owned by Plaintiff Nos. 1 and 2 or using the blank Share Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge of the City Civil Court accepted the submissions of the plaintiffs with respect to valuation and held that he had the jurisdiction to try and entertain the suit. 7. Before we go into the rival submissions of the learned Counsel, there was some controversy with respect to the manner in which the matter was proceeded in the Trial Court. Mr. Shroff, learned Counsel appearing for the respondents, submitted that the petitioner herein (i.e. defendants in the suit) had participated in the matter on demurer . As against that, Mr. Shah, learned Counsel appearing for the petitioners, submitted that all that he had said in the Trial Court was that the plaintiffs were proceeding with the matter on the pleadings as they stood before the Court and did not want to lead any oral evidence. Both the learned Counsel have referred to the dictionary meaning of the term demurrer . Mr. Shroff has relied upon the dictionary of Modern Legal Usage by Bryan Garner, 2nd Edition of 1995. He referred to the definition of demur as appearing on page 264 which reads thus : Demur:- to file a demurrer, which effectively admits the truth of a fact stated but denies that the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore whatever is contended in the plaint is accepted by the defendants, and by demurrer it is meant that the defendants are proceeding on that footing. Therefore he contended that the plaintiffs submission that the amounts were paid has been accepted by the defendant Nos. 1 and 2. On that footing, he submits that the defendants have no case. It is not possible to accept the submission of Mr. Shroff. When the defendants proceeded on demurrer, they had already filed their affidavit in reply. The parties did not lead any oral evidence. In order to find out whether the concerned Court did have the jurisdiction to try and entertain the suit on a pecuniary basis (as contended by the defendants), one has principally to refer to the plaint. For deciding that, one cannot proceed by ignoring what is contended in the affidavit in reply or the denial of the allegations made in the plaint. The plaint proceeds on the footing that the purchases of the shares of defendant No. 2 is discharge of the liability towards defendant No. 1. That is very much disputed by the defendant No. 1 and that is something which is to be tried in the suit. This submission of the plaintiffs is not accepted by defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Behari Lal v. Janki Devi. In that matter, the Court had held that where the shares are in the hands of a third party who is in wrongful possession, the suit for recovery of such shares would be governed by Section 7(iv)(a) of the Court Fees Act providing for suits for movable property where the subject-matter has no market value. Mr. Shah pointed out that in that matter the shares belonging to the respondent had been removed from her custody without lawful authority. Mr. Shah therefore drew my attention to para 7 of that judgment and rightly so where the Court had held that when a third person is in illegal possession of the shares and where somebody stealthily of wrongfully removed them from the custody of the real owner, then the person cannot be said to be in legal possession thereof. It was in that context that the learned Judge held that since they are merely documents relating to title and have no market value to the third party, a suit for recovery thereof would be governed by Section 7(iv)(a) and not Section 7(iii) of the Court Fees Act. Mr. Shah also pressed into service the judgment of a Single Judge of this Court (P.B. Sawant, J. as he then was in this Court) in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 6(iii) of the Act. Alternatively, if it is a suit for prevention of a loss, it is an item covered under Article 7 of Schedule I of the Bombay Court Fees Act. By no stretch of imagination can it be said that it is a suit not otherwise provided for to place it under Article 23(fl of Schedule II of the Act. 13. Mr. Shah lastly relied upon the judgment of a Single Judge of Gujarat High Court in the case of Fali Phirojshah v. Phirojshah Pesionji AIR 1963 Guj. 207 to contend that where there was an irregularity in the exercise of jurisdiction, the High Court can interfere in that determination in exercise of its revisional powers. He therefore submitted that the present matter was a fit and proper one for this Court to interfere and in fact it was an order which was necessary to be interfered with because the claim of the plaintiffs was for shares valued at more than ₹ 4 crores and they had filed the suit by paying the Court fees on a notional basis. Mr. Shah submitted that it is the substance of the controversy which has to be seen. The substance of the controversy was the return of the shares. Whatever was the plea of the plaintiffs as to whether an equiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank in that matter had parted with security without there being any reason. In the instant case, Mr. Shah submitted that the defendants were retaining the shares and all that they were saying was that they were entitled to sell and encash the same because the loan amount was not being returned. He therefore submitted that the two situations could not be equated to draw any inference. The submission of Mr. Shroff was that since the action of the defendants was void, Article 23(f) of Schedule II of the Act would be attracted. Now, it has got to be noted that whether an action of the defendants is void or otherwise has got to be determined. The plaintiffs cannot take it as decided for themselves that the action of the defendants is void. It is for the Court to decide whether the action of the defendants is void or not and unless it is so decided, it does not become void. This has been held by a catena of judgments. In the present case, the defendants have already filed their reply and have disputed the contentions of the plaintiffs. That plea is to be tried in evidence when the suit is heard and decided. At the stage of the decision on the notice of motion, the plaintiffs cannot tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retained these prayers and pressed them into service, it cannot be said that prayer (b) is not an essential prayer for the suit. 16. Mr. Shroff then relied upon a judgment of the Single Judge of this Court in the case of Art Commercial Advertising P. Ltd. v. Vicco Laboratories AIR1990Bom123 . In that case, the respondents in their suit in the City Civil Court asserted their ownership of a T.V. serial Ye Jo Hai Jindagi . The frame of their suit was such and the relief therein was to restrain the defendants from using that title for any third party. That being the nature of relief in the facts of that case and considering the frame of the suit, the learned Judge held that the suit for injunction simpliciter was maintainable and therefore it would fall squarely under Section 7(iv)(j) and not under Section 6(iv)(b) read with Schedule I Article 7 of the Act. 17. Mr. Shroff then submitted that the Court fees is essentially a fee and not a tax and therefore referred to the provisions of the Suit Valuation Act, 1887 and particularly Section 9 thereof. Now, Section 9 of the Act reads as follows : 9. Value of certain suits to be three hundred ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shares and hence it is a suit for the movables having market value and hence Section 6(iii) of the Bombay Court Fees Act would get attracted. Alternatively, in any case, it is a suit for prevention of a loss which would occur to the plaintiffs in which case the dicta of P.B. Sawant, J. (as he then was in this Court) in the case of Mohan Meakin Breweries (supra) would apply and in that event it would be a case governed by Article 7 of Schedule I of the Bombay Court Fees Act. 20. In the circumstances, in my view, the learned Judge has committed a error by holding that he has the jurisdiction which he does not have to try and entertain the matter. It is an error on the face of record and hence under Section 115 of Civil Procedure Code this revision will have to be entertained. Accordingly the impugned order passed by the learned Judge is hereby quashed and set aside. This revision is accordingly allowed and the order dated 16th March, 1999 is quashed and set aside. 21. Inasmuch as I have held that the City Civil Court did not have jurisdiction to entertain and try the suit, the plaint will be returned to the party for presenting it to this Court on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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