Hon'ble Zaki Ullah Khan,J.
(Delivered by Hon'ble Mr.Justice Zaki Ullah Khan) The instant first appeal has been preferred by the appellants against the judgment and decree dated 01.02.2012 passed by the Upper Civil Judge (Senior Division), Lucknow in Regular Suit No.89 of 1998 (Ramesh Bhai Jaga Bhai Patel and another Vs. U.P. State Industrial Development Corporation Ltd. & others).
Brief facts giving rise to the appeal are that on 25.10.1994 in a meeting held by the Principal Secretary, Heavy Industries, Government of U.P., Lucknow, an agreement was arrived at whereupon respondent no.1 agreed to transfer all the equity shares held by it in respondent no.4 to the appellant or his nominee at 10% of the face value and transfer all the preference shares in respondent no.4 to the appellant or its nominee at 25% of the face value. The meeting was attended by respondent no.1 and the Managing Director of respondent no.4, who is representative of appellant no.1. Appellant no.1 or its nominee repaying the loans advanced by respondents no.1 and 4 to the extent of 10% of the total value in full and final settlement of the entire amount.
Consequently, it was agreed between the parties that :-
i. Respondent no.1 would transfer all the 4,35,033 equity shares of respondent no.4 held by it, in favour of appellant no.1 and/or his nominee(s) at 10% of the face value i.e. at a purchase price of Rs.4,35,033/- for all the 4,35,033 equity shares.
ii. Respondent no.1 would transfer all the 7666 preference shares of respondent no.4 held by it, in favour of appellant no.1 and/or his nominee(s) at 25% of the face value i.e. at a purchase price of Rs.1,91,650/- for all the 7666 preference shares.
iii. Appellant no.1 and/or his nominee(s) would ensure the payment of a total sum of Rs.8,56,590.00 being 40.79% of Rs.21 Lakhs to respondent no.1 in full and final settlement of all the dues owed by respondent no.1 to respondent no.4. The aforesaid agreement was considered and ratified by the Board of Directors of respondent no.1 in its meeting held on 12.12.1994 as was communicated by them vide their letter dated 6.01.1995.
Thus, in accordance with the agreement, appellant no.2 as the nominee of appellant no.1 infused respondent no.4 in order to pay financial institutions and respondent no.1's institution. Respondent no.1 initially received a sum of Rs.9.00 Lakhs only and Rs.1,46,350/- towards payment for 7888 preferential shares of Rs.1,91,650/- and the unsecured loan of Rs.8,54,700/- vide demand drafts dated 23.11.1994 drawn on the State Bank of Indore and payable at Kanpur. Respondent no.1 in terms of the agreement encashed the demand draft. Appellant No.2 paid a further sum of Rs.4,35,033/- to respondent no.1 vide demand draft dated 30.12.1994 drawn on State Bank of Indore payable at Kanpur towards the entire agreed price for the purchase of 4,35,033 equity shares of respondent no.4 held by respondent no.1.Respondent no.1 vide its letter dated 6.1.1995 acknowledged the receipt of the aforesaid amount and also called upon the parties to remit a further sum of Rs.1,890/- being the balance amount payable towards the full settlement of the unsecured loan, which amount was also duly paid to and received by respondent no.1.
Consequently, all the obligations imposed upon the appellants and respondent no.4 having been performed, respondent no.1 was called upon to perform its obligation under the agreement, i.e. to send the entire equity and preference shares of respondent no.4 held by it along with duly signed transfer deeds in favour of appellant no.2, Rotar Limited, being the nominee of appellant, and also to withdraw its nominee from the Board of Directors of respondent no.4 as agreed and further requested to send duly filled in transfer deeds, in order to enable to send the equity and preference shares as agreed upon. Accordingly transfer deeds sent to respondent no.1 on 28.02.1995 for transfer of equity and preference shares in favour of respondent no.2. Respondent no.1, however, despite receiving the said transfer deeds and despite repeated requests and reminder failed to comply with its obligations under the agreement of the parties for transferring the said equity and preference shares in favour of appellant no.1 or its nominee. The appellants left with no option except to initiate proceedings under suit for specific performance before the Civil Judge (Senior Division), Lucknow, in the year 1998.
The fact is that respondent no.1 had admitted the entire claim of the appellants but the trial court dismissed the suit purportedly for the reasons that the appellants failed to prove their case. The appellants, therefore, prayed that judgment of the Upper Civil Judge (Senior Division) dated 01.02.2012 be set-aside and the suit be decreed with cost.
Respondent no.4 filed the counter affidavit in appeal and admitted the facts mentioned by the appellants as also the agreement arrived at for transferring its equity shares in respondent no.4 to appellant no.1/or his nominee at 10% of the face value and preference shares at 25% of its face value. Appellant no.1 repaid the loans to the extent of 40.79% to respondent no.1 and on behalf of respondent no.4, in fact, all the facts have been admitted which have been averred in the suit by the appellants as plaintiffs. Lastly, respondent no.4 prayed that the appeal be allowed and the impugned order be set-aside.
Respondents no.1 and 2 have also put their appearance. Respondents no.1 and 2, however, averred in the counter affidavit that the respondents were absent during trial and, therefore, the case proceeded ex-parte vide order dated 22.12.2009. However, it has submitted its written statement and issues were framed on 16.5.2007. The respondents alleged that Memorandum of understanding and Power of Attorney were not registered. The appellants failed to prove its case before the trial court and, therefore, rightly the suit was dismissed. They have also submitted that in the meeting held on 5.6.2002, it was decided that if allottee furnishes a Bank Guarantee of three years for balance of amount as transfer levy payable by them then the answering opposite party may agree to the demands of opposite party no.4 and the promoters of opposite party no.4 agreed to the decision taken in the Board meeting but as the appellant has not responded till date to the decision taken during Udyog Bandhu meeting nor has paid transfer levy or to give Bank guarantee so that a final decision for releasing of shares may be taken. The appellant has concealed these facts but as neither his case was found supported with documents nor he succeeded to prove his case, the order impugned has rightly been passed.
Heard learned Counsel for the appellants, learned Counsel for the respondents no.1, 2 and 4 and perused the record.
During the course of arguments, learned counsel for the appellants stressed that transfer of the shares was complete and the payment was received and respondent no.1 has also acknowledged the same. Therefore, the demand raised by respondent no.1 is unjustified and is against the MOU. The transfer of levy is not mentioned under any statute. It has been argued on behalf of opposite parties that an S.L.P. is pending before Hon'ble the Apex Court regarding issue of transfer of levy. Learned counsel for the appellants explained that one suit was filed by respondent no.4 against respondent no.1 (U.P.S.I.D.C.), which was decreed in favour of respondent no.4 on 23.01.1999 against which remaining respondents went in appeal, which was dismissed by the First Appellate Court on 15.7.2000 by learned Additional District Judge. Aggrieved by that respondents moved the second appeal before Hon'ble High Court at Allahabad, which was dismissed vide order dated 24.10.2005 and against that order an S.L.P. has been moved on behalf of the U.P.S.I.D.C., which is pending for adjudication. Learned counsel for the appellants argued that they have submitted the copies of the relevant judgments, which are on record. The respondents, however, disputed the arguments raised on behalf of the appellants and stressed on the facts that transfer of levy is a vital question and that is subjudice before Hon'ble the Apex Court, therefore, the Additional Civil Judge (Senior Division), Court No.23, vide order dated 01.02.2012 rightly dismissed the suit. The suit was fixed for ex-parte hearing and was dismissed on the ground that Memorandum of understanding is an unregistered document and has not been proved by plaintiff No.1. The contention before the trial court was that someone on behalf of the plaintiffs/appellants should have submitted the evidence regarding the verification of Memorandum of Understanding who has signed it and in the manner, it was executed. Only on the basis of letters and assertions, agreement cannot be considered as proved in view of the provisions of Evidence Act. Learned trial court also mentioned that the details of the payment have not been certified. The appellants, however, rebutted all the contentions on the ground that as per Evidence Act, the facts admitted need not be proved and when the payment has been admitted, it is not necessary to get it proved by submitting the details of cheques. The argument of the appellants is that the appellant is an N.R.I. and it was not possible for him to submit all these documents before the court concerned when these have been admitted by the parties.
The proceedings were going ex-parte and issues have been framed, although, after framing the issues the respondents did not appear but the duty lies upon the trial court to give finding on each issue. Merely observing that the documents have not been proved is not enough and categorical findings must have been given on each issue. The court ought to have given finding on each issue and court ought to have taken into account the facts which were admitted and vis-a-vis facts issues should have been decided.
We are of the view that the judgment and order passed by learned trial court is not in accordance with the provisions of Code of Civil Procedure and findings have not been given issues framed and summarily it has been mentioned that the documents have not been proved. The court should have examined that whether it was necessary to prove the document or not. The judgment and order passed by the trial court is, therefore, liable to be set-aside with a stipulation that the case be remanded to learned trial court to decide afresh expeditiously say within a period of six months and to give clear finding on each issue keeping in view of the facts that what facts have been admitted and what has to be proved.
The First Appeal is allowed in light of the aforesaid observations.
Lower court record be sent back to trial court for compliance of the order passed by this Court.
Order Date :- 31.7.2014.
sks