Somnath Chatterjee, S/O. Lt. Tarini Charan Chattarjee vs B And A Limited

Headnote:(A) Code of Civil Procedure, 1908 - Order XXXIX Rules 1 and 2, Section 151 - NSDL Rules and By-Laws - Rule 12.6.1 - Temporary injunction - Joint demat account - Death of joint holder - Concession by party - Court's duty to dispose of application in terms of concession - No violation of legal framework -

(B) Scope of injunction - Limited to restraint on transfer, not to transfer to individual account -

(C) Appeal - Impugned order set aside - Direction to restrain transfer.

Facts of the case:
The original plaintiff filed a suit seeking declaration of ownership of 861,918 equity shares held in a joint demat account with the defendant No. 2, claiming she had no beneficial interest. An injunction application under Order XXXIX was filed to restrain transfer. The trial court initially passed an ex-parte interim status quo order. During hearing, defendant No. 2 conceded no objection to the injunction. However, the trial court dismissed the application holding that the cause of action had not arisen and that a joint holder alone cannot transfer shares. The plaintiff died; his executor was substituted. The present appeal challenges that dismissal.

Findings of Court:
The High Court held that since the defendant had conceded, the trial court should have disposed of the application in terms of the concession. No violation of NSDL rules would have occurred as transfer requires a proper application under Rule 12.6.1. The trial court's insistence on 'legal framework' was misconceived. However, the appellant could not be granted the further relief of transfer of shares to his individual account as that was not prayed in the injunction application. The impugned order was set aside and a restrained order was passed.

Issues: i) Whether in view of the concession of the defendant, the plaintiff was entitled to a temporaiy injunction as prayed? ii) Whether the plaintiff was entitled to a further relief of transfer of shares to his individual account?

Ratio Decidendi: When a party concedes to an injunction, the court should dispose of the application accordingly, as no violation of the legal framework arises. The court cannot impose its own view when both sides consent. The scope of an injunction is limied to the prayers made; additional reliefs beyond the pleadings cannot be granted in the same proceeding.

Result: Appeal disposed of - impugned order dated 15.09.2025 set aside - Respondent No. 2 restrained from transferring the 861,918 equity shares and respondent No. 3 directed not to facilitate any such transfer.

Legal Category Hierarchy

1. Appeal against dismissal of injunction application under Order XXXIX Rules 1 & 2 CPC in suit concerning joint ownership of shares. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 )

2. Appellant argued respondent conceded to injunction; trial court erred in dismissing on perceived legal framework despite no objection. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25 )

3. Impugned order set aside; respondent restrained from transferring shares and depository directed not to facilitate such transfer. (Para 28 , 29 , 30 , 31 )

4. Is a court obligated to dispose of an injunction application in terms of a concession made by the opposing party?

Yes, when the opposing party has no objection, the court should dispose of the application in terms of the concession, as no violation of legal framework arises. (Para 24 , 25 , 26 )

5. Can an appellate court grant a relief not prayed for in the temporary injunction application?

No, the court cannot grant a relief that transgresses the contours of the prayers made in the application for temporary injunction. (Para 27 )

6. Under NSDL rules, does the death of a joint demat account holder automatically transfer shares to the surviving holder?

No, transfer requires an application in proper form as specified in Rule 12.6.1, it is not automatic upon death of one holder. (Para 11 , 26 )

JUDGMENT :

SANJEEV KUMAR SHARMA, J.

Heard Mr. R. Banerjee, learned Senior Counsel, Mr. D. Sharma, learned Senior Counsel for the appellant, and Mr. K.N. Choudhary, learned Senior counsel for respondent No. 1 assisted by Mr. K. Jain, learned counsel, and Mr. D. Mozumder, learned Senior Counsel assisted by Mr. B. Kaushik, learned counsel for respondent No. 2.

2. The present appeal is filed against the impugned Order dated 15.09.2025 passed in Misc. (J) Case No. 27/2012 in Title Suit No. 41/2012 by the Learned Civil Judge, Jorhat whereby the injunction application filed by the appellant under Order XXXIX Rules 1 & 2 read with Section 151 of the Code of Civil Procedure, 1908 was dismissed.

3. On or about August, 2012, the deceased original plaintiff late Hemendra Prasad Barooah had filed a civil suit before the Learned Court below being Title Suit No. 41/2012 seeking the following reliefs:-

"a. Declaration that the plaintiff is the sole and absolute owner of 861918 equity shares of the defendant no. 1 which is now lying in the Demat Account bearing No. DPID IN 301151 and client ID 26424547 in the names of the plaintiff and the defendant No.2 maintained by the defendant No.3;

b. Decree for mandatory injunction directing the defendant No. 2 to execute / sign the delivery instructions for and submit to plaintiff for transfer of the said 861918 equity shares in the sole name of the plaintiff;

c. Perpetual injunction restraining the defendants from transferring the shares from the existing accounts maintained by the defendant No. 3 save to any demat account standing in the sole name of the plaintiff;

d. Perpetual injunction restraining the defendant No. 2 from using the delivery slips lying with the defendant No. 2 bearing number from A444026920 to 929 in any manner whatsoever;

e. Perpetual injunction restraining the defendants from dealing with, disposing of or in any manner encumbering the said 861918 equity shares except for the purpose of transferring the same in the name of the plaintiff;

f. Mandatory injunction directing the defendants to rectity the Register of Members of the Company, i.e. the defendant No.1 by deleting the name of defendant No.2 as joint holder of 8,61,918 equity shares of the company;

g. Mandatory injunction directing the defendant No.2 to return all delivery slips referred to in prayer (d) above to the plaintiff;

h. Receiver;

i. Permanent Injunction;

j. Costs;

K. Further or other reliefs;"

4. In the said title suit, the appellant had taken out an injunction application under Order XXXIX, Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908.

5. The case of the appellant/plaintiff/petitioner in the said application/suit was that he is the Chairman of the Board of Directors of the Company and is the absolute owner of 9, 47, 289 nos. of equity shares of Rs. 10/- each, all fully paid up of and in the company comprising approximately 30.55% of the total, issued, subscribed and paid up capital of the company.

6. The original petitioner Hemendra Prasad Barooah had one son and two daughters. Son of the petitioner predeceased him, who died on 02.10.2007 leaving behind his widow and daughter. O.P No. 2 is one of the married daughters of the petitioner and is purporting to hold 3,16,200 numbers of shares of Rs.10/-each, all fully paid up of and in the company. Petitioner has maintained one account with O.P No. 3 who is a depository participant and one of the depositing accounts of the petitioner is maintained with the O.P No. 3, where O.P No. 2 is a joint account holder.

7. Original petitioner Hemendra Prasad Barooah has set up a Trust namely, "The Hemen Barooah Benevolent and Family Trust" which was registered on 21.11.2011, by which petitioner's entire shareholding of and in the company, i.e., 9,47,289 numbers of equity shares of and in the company have been bequeathed to the said Trust absolutely and forever.

8. Petitioner has maintained one ICICI Demat Account where he had 8,30,315 numbers of equity shares of Rs.10/-

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2026 Supreme(Gau) 1203

A court must grant an injunction when the opposing party consents, as it is not the court's role to refuse such consent-based relief or to substitute its own view of the legal framework.

Legal Category Hierarchy

Table of Contents

4. Is a court obligated to dispose of an injunction application in terms of a concession made by the opposing party?

5. Can an appellate court grant a relief not prayed for in the temporary injunction application?

6. Under NSDL rules, does the death of a joint demat account holder automatically transfer shares to the surviving holder?

Judicial Analysis