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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
FIRDOSH P. POONIWALLA, J.
In the matter of :
Shrikant G. - Applicant
Versus
Punjab National Bank - Respondent
Interim Application No.1915 of 2023 In Comm. Suit No.132 of 2022
Decided On : 10-03-2025
(A) Code of Civil Procedure, 1908 - Order XIIIA - Summary judgment application - Plaintiff sought mandatory injunction for shares and accrued dividends from Defendant, citing entitlement under the CPC - Defendant raised defenses including limitation and claims of shares being pledged as security - Court held that summary judgment is not appropriate as the Plaintiff must prove due diligence in prior proceedings, requiring oral evidence. (Paras 46, 49, 106)
(B) Limitation Act, 1963 - Section 14 - Plaintiff argued that time spent in previous proceedings should be excluded from limitation calculation - Court ruled that the Plaintiff must prove the prior proceedings were pursued in good faith and due diligence, which necessitates evidence. (Paras 50, 52)
(C) Summary Judgment - Court emphasized that Rule 3 of Order XIIIA allows for summary judgment only when there is no real prospect of defense - Since the Defendant's claims raised factual issues, oral evidence is necessary. (Paras 93, 104)
Facts of the case:
The Plaintiff, a stockbroker, claimed 11,25,000 shares of ITC Ltd. and accrued dividends from the Defendant, a merged banking entity, arguing he was entitled to them post a No Dues Certificate issued by the Defendant. The Defendant contended the shares were pledged as security against the Plaintiff's overdraft.
Findings of Court:
The Court found that the Plaintiff's claims required oral evidence, and the Defendant raised valid defenses, including limitation and the nature of the security for the overdraft.
Issues: The main issues were whether the Plaintiff's claims were barred by limitation and if a summary judgment was appropriate given the defenses raised by the Defendant.
Ratio Decidendi: The Court concluded that the Plaintiff must substantiate his claims with evidence, particularly regarding the diligence of prior proceedings, making summary judgment inappropriate.
Result: Interim Application dismissed.
JUDGMENT :
This Interim Application has been filed by the Plaintiff under the provisions of Order XIIIA of the Code of Civil Procedure, 1908 (“the CPC”), seeking the following reliefs:-
“(a) a summary judgment be passed under Order XIII-A of the Code of Civil Procedure, 1908 decreeing to direct the Defendant by an order of mandatory injunction to hand over/ transfer to the Applicant the subject shares 11,25,000 shares of ITC Ltd. as more particularly mentioned in the chart Exhibit “VV” to the Plaint and all further accruals thereon (whether by way of bonus, rights, dividends) and to do all things necessary for that purpose including signing transfer / Demat forms;
(b) a summary judgment be passed under Order XIII-A of the Code of Civil Procedure, 1908 decreeing the Defendant to pay to the Plaintiff the accrued dividend on the subject shares from the date of declaration of each such installment dividends by ITC till the date hereof aggregating to Rs.9,64,00,000/- as more particularly mentioned in the chart annexed as Exhibit “WW” to the Plaint and Exhibit “I” hereto;
(c) a summary judgment be passed under Order XIII-A of the Code of Civil Procedure, 1908 decreeing that this Hon’ble Court be pleased to direct the Defendants to pay to the Applicant the accrued dividend on the subject shares with interest thereon @ 18% p.a. from the date of the declaration of each such installment dividends by ITC till the date aggregating to Rs.19,06,15,369/- as per the Particulars of Claim being Exhibit “XX” to the Plaint and Exhibit “K” hereto alongwith further interest thereon @ 18% p.a. from the date hereof till payment and/or realization thereof under Order XIII-A of the Civil Procedure Code, 1908 as applicable to Commercial Suits.”
2. The present suit has been filed seeking a decree against the Defendant to hand over to the Plaintiff 11,25,000 shares of ITC Limited and all further accruals thereon (whether by way of bonus, rights and dividends) and to do all things necessary for that purpose, including signing transfer/ demat forms.
3. The Plaintiff is a Stockbroker by profession and a registered member of the Bombay Stock Exchange Limited. The Defendant is a banking company Nedungadi Bank Limited merged with the Defendant on 2nd March, 2003 in terms of the Acquisition / Merger Order dated 16th November, 2002 issued by the Reserve Bank of India.
4. The Plaintiff had a Current Bank Account No.502 with Nedungadi Bank Limited. By a letter dated 25th April, 1998 addressed to Nedungadi Bank Limited, the Plaintiff applied for overdraft facilities of Rs.1 Crore. Nedungadi Bank Limited sanctioned overdraft facilities of Rs.1 Crore and the Plaintiff executed various documents in favour of Nedungadi Bank Limited.
5. In December, 1999, the Plaintiff sought an enhancement of the said overdraft facility. By its letter dated 13th December, 1999, Nedungadi Bank Limited enhanced the overdraft facility from Rs. 1 Crore to Rs.5 Crore.
6. The Plaintiff was the beneficial owner of 37,50,000 equity shares of Ansal Hotels Limited and possessed blank transfer forms in respect of the said shares duly signed by the then registered owner M/s. BEC Impex International Private Limited.
7. On 18th April, 2005, Ansal Hotels Limited merged with ITC Limited. Consequent to the merger, 25,000 shares of Rs.10/- each of ITC Limited were issued in lieu of shares of Ansal Hotels Limited. On 21st September, 2005, in view of the split and bonus shares issued by ITC Limited, 25,000 shares became 3,75,000/- shares. On 3rd August, 2010, in view of a further issue of bonus shares by ITC Limited, the said 3,75,000 shares became 7,50,000 equity shares. Similarly, on 4th July, 2016, in view of further bonus shares issued by ITC, the shares increased to 11,25,000 equity shares of ITC Limited.
8. The Plaintiff approached Nedungadi Bank Limited for a further temporary increase in the overdraft facility only till 14th March, 2001 by its letter dated 17th March, 2001. Nedungadi Bank Limited temporarily
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