The main legal point established in the judgment is the admissibility of documents based on the provisions of the Bombay Stamp Act, Securities Contracts (Regulation) Act, and the Evidence Act.

P.C. :

In this Motion, the Defendants have objected to the maintainability of the Suit on the ground of bar of limitation. There is a preliminary issue already framed by this Court concerning the bar of limitation. The parties intend to lead oral evidence on the preliminary issue. Plaintiffs have tendered their compilation of documents together with the affidavits of evidence filed by Plaintiff No.5 (P.W.1) and Umesh Merchant (P.W.2) in lieu of examination-in-chief inter alia for proving the documents.

2. Sr. Nos. 1, 2 and 3 of the list of documents are (i) original agreement dated 14 April 1989 executed between the Plaintiffs and Defendant Nos.1 to 9, (ii) original ancillary agreement dated 14 April 1989 executed between the Plaintiffs and Defendant Nos.1 to 9 and (iii) original supplemental agreement dated 20 November 1993 executed between the Plaintiffs and Defendant Nos. 1 to 9. The Plaintiffs' witness – P.W. 1 has deposed to the execution of these documents in paras 5, 6 and 11 of the affidavit in lieu of examination-in-chief . Apart from the deposition of the Plaintiffs' witness as to the execution of the documents, originals of which are tendered, it needs to be noted that there is no particular dispute raised as to the execution of these documents in para 2(d) or para 6 of the written statement of the Defendants. The execution of the supplemental agreement is not disputed in para 7(f) of the written statement. The execution of the documents can be fairly said to be proved.

3. Learned Counsel for the Defendants, however, objects to these three documents being admitted in evidence on the ground of insufficiency of stamp duty paid thereon. It is submitted that the agreement dated 14 April 1989 read with the ancillary agreement of the same date, considered as a whole, clearly indicates that the real transaction between the parties was of sale of immovable property. It is submitted that this immovable property was the only asset of Defendant No.10 Company. It is submitted that whilst construing an instrument for the purposes of ascertaining the charge of stamp duty, one ought not to go by the label of the instrument but must look at the substance of the document.

4. Section 3 of the Bombay Stamp Act makes it clear that what is chargeable with the duty indicated in Schedule I to the Act is the instrument. The instrument is defined in Clause (l) of Section 2 of the Bombay Stamp Act. The instrument includes every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. If one has a look at the instrument in the present case, the instrument purports to create a liability to transfer shares in Defendant No.10 Company at a future date. The shares of Defendant No.10 Company, which is a Private Limited Company, cannot be termed as “marketable security” as defined under Clause (o) of Section 2 of the Bombay Stamp Act. Our Court in the case of Dahiben Umedbhai Patel v/s Norman James Hamilton [1982 Bombay Law Reporter, 275] considered the question whether the shares of a Private Limited Company could be covered by the definition of marketable security. The Court considered the character of free transferability as an essential condition for terming the shares as marketable security. The Court, on an analysis of the restriction on transfer of shares in private companies as an essential characteristic of such shares, came to the conclusion that the definition of securities will only take in shares of a public limited Company notwithstanding the use of the words “any incorporated Company or other body corporate” in the definition given in the securities contract (Regulation) Act. No doubt, the Court was in that case concerned with the definition of a 'marketable security' in the Securities Contracts (Regulation) Act, but the discussion throws illuminating light on the very meaning of a marketable security. In any event, it cannot possibly be suggested that sh