Case Note & Summary
The plaintiff, Prabodh Jamnadas Kothari, filed a suit seeking declaration of the estate of his deceased father and his 1/2 share therein, particularly in respect of properties listed in Exhibit C to the plaint. The main disputed properties were 49010 shares of KNK Trading Pvt. Ltd. The plaintiff's father had executed a Will in 2003 bequeathing the shares equally to his two sons, the plaintiff and Defendant No.1. However, the defendants claimed that the shares had been transferred to Defendant No.2, the wife of Defendant No.1, in 1999 itself. The plaintiff challenged this transfer as fraudulent. The plaintiff showed the annual returns of Defendant No.5 company filed under Section 169 of the Companies Act, which indicated that the transfer was effected in the first year of incorporation, with 49000 shares shown in the name of Defendant No.2. The date of transfer was not shown in the returns. The plaintiff contended that the transfer had not taken place between the date of the first AGM and the date of filing of the returns. The defendants sought to show that the father, who was a director of the company, had signed such returns from year to year as well as his personal tax returns. The plaintiff claimed his share in that property, it being the biggest asset of the father. There were certain email exchanges between the plaintiff and Defendant No.3 as late as... The court, on a notice of motion for interim relief, considered whether the plaintiff had made out a prima facie case for grant of injunction. The court noted that the plaintiff had challenged the transfer as fraudulent and had shown the annual returns which prima facie indicated the transfer. The court held that the plaintiff had made out a prima facie case, the balance of convenience was in favor of granting interim relief, and the plaintiff would suffer irreparable loss if the injunction was not granted. Accordingly, the court granted interim relief restraining the defendants from dealing with the shares pending the disposal of the suit.
Headnote
A) Civil Procedure - Interim Injunction - Prima Facie Case - Balance of Convenience - Irreparable Loss - The court considered whether to grant interim relief in a suit for declaration of estate and share in properties, specifically shares allegedly fraudulently transferred. The plaintiff showed prima facie evidence of fraudulent transfer through annual returns showing transfer in the first year itself, while the defendants relied on the father's signatures on returns. The court held that the plaintiff made out a prima facie case and balance of convenience favored granting injunction to protect the plaintiff's interest pending trial (Paras 1-5).
Issue of Consideration
Whether the plaintiff is entitled to interim relief restraining the defendants from dealing with the shares of KNK Trading Pvt. Ltd. pending the suit, on the ground that the transfer of shares to Defendant No.2 was fraudulent.
Final Decision
The court granted interim relief in favor of the plaintiff, restraining the defendants from dealing with the shares of KNK Trading Pvt. Ltd. pending the disposal of the suit.
Law Points
- Fraudulent transfer
- prima facie case
- balance of convenience
- irreparable loss
- interim injunction
- share transfer
- company law
- succession
- will
- estate
