1965 Supreme(Cal) 112

HIGH COURT OF CALCUTTA
D. N. Sinha, A. C. Sen
CHAMPARUN SUGAR CO. LTD. - Appellant
Versus
HARIDAS MUNDHRA - Respondent
A. F. O. O.  163  Of  1961
Decided On : MAY 5, 1965

The right to purchase shares or even an option to do so is a beneficial interest in movable property and is an actionable claim where the movable property is not in possession. Such a right is assignable and transferable.

Headnote:

ATTACHMENT - Right to purchase shares - Whether attachable - Form of attachment - Whether prohibitory order can be issued - C. P. Code (Act V of 1908), Ss. 51, 60, O. 21, Rr. 41 to 54, Appendix E, Form No. 16.

Fact of the Case:

The respondent filed a suit for specific performance of an agreement relating to the sale of 51 per cent ordinary shares in Turner Morrison and Co. Private Limited and for other reliefs. The appellant obtained a decree against the respondent for a sum of money and costs. The appellant filed an application for execution, by tabular statement, in which they prayed for execution of the said decree, passed by the Kanpur Court and transmitted to this Court, by attachment and sale of the option of the respondent under the agreement dated 30th October, 1956 taken together with the Deed of Revocation dated 7th September, 1957, and of all his rights under the said agreement which is the subject matter of Suit No. 600 of 1961 then pending in this Court. Upon this application being made, an ex parte order of attachment was made by the learned Master of this Court, the relevant part whereof is set out below: "whereas Shri Haridas Mundhra the defendant No. 1 abovenamed has failed to satisfy the decree made in the above suit No. 179 of 1960 of the Court of Second Civil Judge Kaupur and dated the 22nd day of May 1963. It is ordered that the said defendant Shri Haridas Mundhra be and he is hereby prohibited and restrained until further order of this Court from exercising the option under the agreement dated the 30th October 1956 with Hungerford Investment Trust Limited and J. G. Turner and N. F. Turner construed with Deed of Revocation dated the 7th day of September 1957 between British India Corporation Ltd. , and the said defendant Shri Haridas Mundhra, to purchase 51 per cent shares of the Turner Morrison and Co. Ltd. , and of all rights of the said defendant Shri Haridas Mundhra under the said agreement which is the subject matter of Suit No. 600 of 1961 (Haridas Mundhra v. Mrs. Mary Therese Turner) of this Court in respect of the said option as recorded in the said agreement by sale, gift or otherwise and all persons be and they are hereby prohibited and restrained from receiving the same by purchase, gift, sale or otherwise until further order of this Court. " The respondent made an application for an order that the ex parte order of attachment dated December 17, 1963 passed by the learned Master be set aside and/or vacated and/or recalled and that the attachment be withdrawn and/or vacated and for such further or other orders as it might be necessary to pass, in order to grant relief to the petitioner. The application was allowed by the trial court.

Finding of the Court:

The right to purchase shares or even an option to do so is a beneficial interest in movable property and is an actionable claim where the movable property is not in possession. Such a right is assignable and transferable. According to the above definition, it must be considered to be movable property. Section 51 of the Code of Civil Procedure lays down the procedure in execution. The relevant provision runs as follows: "51. Subject to such conditions and limitations as may be prescribed the court may on the application of the decree-holder, order execution of the decree-- (a) by delivery of any property specifically decreed, (b) by attachment and sale or by sale without attachment of any property; xx xx xx (e) in such other manner as the nature of the relief granted may require." section 60 deals with the question of attachment, the relevant provisions thereof are as follows: "60 (1 ). The following property is liable to attachment and sale in execution of a decree, namely, lands, houses or other buildings, goods, money, bank-notes, cheques, bills of exchange, hundis, promissory notes, Government securities, bonds or other securities for money, debts, shares in a corporation and, save as hereinafter mentioned, all other saleable property, movable or immovable, belonging to the judgment-debtor, or over which, or the profits of which, he has a disposing power which he may exercise for his own benefit, whether the same be held in the name of the judgment-debtor or by another person in trust for mm or on his behalf. " this is followed by the enumeration of certain things which cannot be the subject matter of attachment. For example, a mere right to sue for damages or any right of personal service or an expectancy of succession by survivorship, cannot be the subject matter of attachment.

Issues: Whether the right to purchase shares or even an option to do so is a beneficial interest in movable property and is an actionable claim where the movable property is not in possession.

Ratio Decidendi: The right to purchase shares or even an option to do so is a beneficial interest in movable property and is an actionable claim where the movable property is not in possession. Such a right is assignable and transferable. According to the above definition, it must be considered to be movable property. Section 51 of the Code of Civil Procedure lays down the procedure in execution. The relevant provision runs as follows: "51. Subject to such conditions and limitations as may be prescribed the court may on the application of the decree-holder, order execution of the decree-- (a) by delivery of any property specifically decreed, (b) by attachment and sale or by sale without attachment of any property; xx xx xx (e) in such other manner as the nature of the relief granted may require." section 60 deals with the question of attachment, the relevant provisions thereof are as follows: "60 (1 ). The following property is liable to attachment and sale in execution of a decree, namely, lands, houses or other buildings, goods, money, bank-notes, cheques, bills of exchange, hundis, promissory notes, Government securities, bonds or other securities for money, debts, shares in a corporation and, save as hereinafter mentioned, all other saleable property, movable or immovable, belonging to the judgment-debtor, or over which, or the profits of which, he has a disposing power which he may exercise for his own benefit, whether the same be held in the name of the judgment-debtor or by another person in trust for mm or on his behalf. " this is followed by the enumeration of certain things which cannot be the subject matter of attachment. For example, a mere right to sue for damages or any right of personal service or an expectancy of succession by survivorship, cannot be the subject matter of attachment.

Final Decision: Appeal allowed.