PUNJAB & HARYANA HIGH COURT
Tek Chand and P.C.Pandit JJ.
S.Bhagat Singh
Versus
Satnam Transport Co.Ltd.
First Appeal No. 189 of 1956,
Decided On : OCTOBER 5, 1960
SPECIFIC RELIEF ACT, 1877 - SECTION 42 - ORDER 7 RULE 11(D) - SUIT FOR DECLARATION - MAINTAINABILITY - COURT FEES - DISMISSAL OF SUIT - AMENDMENT OF PLAINT - OPPORTUNITY TO AMEND.
Fact of the Case:
Plaintiff, a shareholder in a company, filed a suit for a declaration that he was the owner of 50 shares and that the transfer of those shares to another person was invalid. The trial court dismissed the suit, holding that the plaintiff could not maintain a suit for a mere declaration without seeking further relief, as provided under the proviso to Section 42 of the Specific Relief Act, 1877.
Finding of the Court:
The High Court held that the proviso to Section 42 of the Specific Relief Act applied to the case, as the plaintiff could have sought further relief, such as the return of documents or cancellation of the transfer deed. However, the court found that the trial court should have given the plaintiff an opportunity to amend the plaint to include a prayer for consequential relief before dismissing the suit.
Issues: 1. Whether the plaintiff could maintain a suit for a mere declaration without seeking further relief, given the proviso to Section 42 of the Specific Relief Act, 1877? 2. Whether the trial court should have dismissed the suit or given the plaintiff an opportunity to amend the plaint?
Ratio Decidendi: 1. The proviso to Section 42 of the Specific Relief Act, 1877, bars a suit for a mere declaration where the plaintiff is able to seek further relief. 2. In cases where the plaintiff omits to seek further relief and sues for a declaration alone, the court should give the plaintiff an opportunity to amend the plaint to include a prayer for consequential relief before dismissing the suit.
Final Decision: The High Court allowed the appeal, set aside the decree of the trial court, and remanded the case for retrial after affording an opportunity to the plaintiff to amend his plaint.
P.C.Pandit, J.
1. Bhagat Singh Plaintiff held 50 shares in the Sat-nam Transport Company Limited, Rohtak, defendant No. 1. Since the Managing Director and Chairman of the Company did not manage the Company properly and committed certain irregularities, the plaintiff filed an application for the winding up of this Company in this Court and this application was fixed for evidence for the 19th August, 1955, On the 5th August, 1955, a compromise was, however, effected between the plaintiff and the Company whereby, Balmokand (defendant No. 2), who is the Chairman of the Company, agreed to get these 50 shares transferred in his favour on paying Rs. 6,000/- to the plaintiff, On that very date the plaintiff executed a receipt for Rs. 6,000/- towards the price of these 50 shares and also a deed of transfer in favour of Balmokand (defendant No. 2), These two documents and the shares scrips were then handed over to Jai Ram (defendant No. 3). It was agreed that Balmokand would pay Rs. 6,000/- to the plaintiff within a week through Jai Ram who would then hand over these documents to Balmokand and in case Balmokand failed to make the payment, the documents would be returned to the plaintiff. Balmokand did not pay the amount of Rs. 6,0007 - to the plaintiff, who thereupon demanded the return of the document from Jai Ram. Jai Ram, in collusion with Balmokand, evaded the delivery of those documents to the plaintiff.
2. On the above facts, on the 30th August, 1955, the plaintiff brought a suit for a declaration that he was the owner of 50 shares mentioned above, and that the same were not validly transferred in favour of Balmokand. He also prayed for the issue of perpetual injunctions to the effect that (1) defendant No. 2 should not get these shares transferred in his own name, (2) defendant No. 1 should not transfer the said shares in favour of defendant No. 2, and (3) defendant No. 3 be restrained from handing over the documents to defendants Nos. 1 and 2.
3. The suit was resisted by defendants Nos, 1 and 2, who inter alia pleaded that the suit in the present form was not sustainable according to law.
4. On the pleadings of the parties, a number of issues were framed, issue No, 5 being, can the plaintiff not maintain this suit in the present form ?
5. Evidence on all the issues was led by the parties. On the 21st July, 1956, the trial Court passed the following order :
"The plaintiff wants to give up his prayer for injunction. He can give up any relief at any time. Hence, he is permitted to make the proposed amendment. The amended petition of plaint be filed on the 8th August, 1956. Rs. 15/- be paid as costs of this adjournment".
6. The amended plaint was filed on the 8th August, 1938. In the prayer clause of this amended plaint, it was prayed that a decree for a declaration to the effect that the plaintiff was the legal owner of 50 shares in defendant No. 1 Company and that no valid transfer of the abovesaid shares had been effected in favour of defendant No. 2, be passed. In the amended written-statement, the defendants took the following additional pleas :
"In fact cancellation of the sale of the shares in dispute and the return of the original share certificate regarding the shares etc. are involved and included in the prayer made by the plaintiff. Simply a prayer for declaration in the suit does not change its real nature. Hence, the plaintiff is liable to pay court-fee on Rs. 6,000/-. At any rate, if it is held that the plaintiffs suit is merely a declaratory one and cancellation of the sale of the shares in dispute and the return of the original share certificate etc. are not involved and included therein then this suit in the present form cannot proceed according to law. Proviso to Section 42 of the Specific Relief Act operates as a bar to the plaintiffs suit, because the plaintiff can make a prayer in the suit for the cancellation of the sale of the shares in dispute and the return of the original share certificate etc. and
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