Case Note & Summary
The plaintiff, Speed Trade Securities Private Limited, filed a summary suit against IDBI Bank Ltd. seeking payment of Rs.28 per share for 15,000 shares of United Western Bank under the Scheme of Amalgamation announced by the Reserve Bank of India on 12th September 2006. The plaintiff claimed that it had pledged shares of United Western Bank from Maliram Makharia Finstock Pvt. Ltd. and sold most of them, but could not sell 15,000 shares. The plaintiff alleged that as a shareholder on the prescribed date of 3rd October 2006, it was entitled to Rs.28 per share from the defendant bank. The defendant bank denied liability, asserting that the plaintiff was not a registered shareholder on the record date. The court considered the submissions and found that the plaintiff failed to establish that it was a registered shareholder on the prescribed date. The court held that the defendant raised a triable issue and granted unconditional leave to defend, dismissing the summons for judgment.
Headnote
A) Civil Procedure - Summary Suit - Order XXXVII CPC - Leave to Defend - The defendant bank sought unconditional leave to defend on the ground that the plaintiff was not a registered shareholder on the prescribed date under the Scheme of Amalgamation - The court held that the plaintiff's claim based on RBI directives required proof of registered shareholding, which was not established - Held that the defendant raised a triable issue and was entitled to unconditional leave to defend (Paras 1-10).
Issue of Consideration
Whether the plaintiff, who was not a registered shareholder on the prescribed date, is entitled to claim payment under the Scheme of Amalgamation of United Western Bank with IDBI Bank Ltd.
Final Decision
Summons for Judgment dismissed. Defendant granted unconditional leave to defend. Suit to proceed further.
Law Points
- Summary suit
- Scheme of Amalgamation
- Registered shareholder
- RBI directives
- Order XXXVII CPC
- Leave to defend
Case Details
2012 LawText (BOM) (07) 112
Summons for Judgment No. 264 of 2010 in Summary Suit No. 2694 of 2009
Ms. Pooja Kshirsagar i/b. Mr. Yogesh N. Adhia for the Plaintiffs; Mr. Kevic Sethalvad, Senior Advocate with Mr. M.P. Rege i/b. M/s. M.P. Rege & Co. for the Defendants
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Nature of Litigation
Summary suit for recovery of money based on RBI directives under Scheme of Amalgamation.
Remedy Sought
Plaintiff sought payment of Rs.28 per share for 15,000 shares from defendant bank.
Filing Reason
Defendant bank denied liability to pay under the Scheme of Amalgamation.
Issues
Whether the plaintiff was a registered shareholder on the prescribed date under the Scheme of Amalgamation.
Whether the plaintiff is entitled to claim payment under the RBI directives.
Submissions/Arguments
Plaintiff argued that the suit is based on RBI directives and that it was entitled to payment as a shareholder.
Defendant argued that the plaintiff was not a registered shareholder on the prescribed date and thus not entitled to payment.
Ratio Decidendi
A plaintiff in a summary suit under Order XXXVII CPC must establish a clear and undisputed claim. Where the defendant raises a triable issue, such as whether the plaintiff was a registered shareholder on the prescribed date, unconditional leave to defend must be granted.
Judgment Excerpts
The Plaintiffs have filed this suit based on directives issued by the Reserve Bank of India contained in the Scheme of Amalgamation.
It is the common ground that on 12th September, 2006, Reserve Bank of India announced Scheme of Amalgamation of United Western Bank with the Defendants which inter alia provided that the then shareholders of United Western Bank as on the prescribed date fixed as 3rd October 2006 would be paid a sum of Rs. 28/ per share by the Defendants.
Procedural History
Plaintiff filed Summary Suit No. 2694 of 2009. Defendant filed appearance. Plaintiff took out Summons for Judgment No. 264 of 2010. The court heard arguments and dismissed the summons, granting unconditional leave to defend.
Acts & Sections
- Code of Civil Procedure, 1908: Order XXXVII
- Banking Regulation Act, 1949: Section 5(c)
- Companies Act, 1956:
