When, how and from whom will i get compensation for breach of contract?
S Singh
(Querist) 02 August 2015
This query is : Resolved
I had bought some shares of X company from its seller by paying him cash and got them transferred into my demat account vide an off-market shares transfer.
But subsequently the seller denied that he received any cash against the shares and lodged a false FIR against me for forgery of the Transfer Instruction for Delivery Slip which was filled by me and signed by him.
Thereupon the Senior Inspector of Police sent a letter to my Depository to keep freeze upon the said shares till the Judgment in the case comes.
The seller thereafter also filed a suit against me and my depository participant claiming forgery and fraud and for recovery of the said shares, its dividends, accretions and further compensation.
I have been made defendant no. 1 and the depository participant as defendant no. 2.
In that suit the Court had made an interim ex-parte order to the defendant no. 2 to maintain status-quo with respect to the said shares where neither me nor defendant no. 2 was present.
Thereafter the criminal court erroneously convicted me and in its Judgment sentenced me 3 yrs. imprisonment, fine of Rs. 4000 and also ordered me to return the said shares to the seller after the period of appeal is over.
I immediately within 30 days of the order filed the appeal which is till date pending.
Thereafter as the Senior Inspector of police had earlier sent letter for freezing the shares till the Judgment of the Court comes, and when it had come he again sent letter to my Depository stating its previous letter’s reference and that "the Magistrate had ordered the accused to handover the shares to the informant after the period of appeal is over." and now not to keep freeze upon those shares.
But surprisingly my Depository after receiving the said police's letter themselves calculated 60 days from the Judgment order and without taking my signature and authorization ordered my depository participant to unfreeze the said shares and transfer back to the seller’s demat account breaching my agreement with them and Court’s status-quo order.
The depository participant abided by that order and transferred the shares from my demat account to the seller’s demat account and closed my demat account.
Now when I ask my shares to be kept into my demat account or compensation, my depository participant and depository states that they shall not do so and that they are not liable but the seller with whom my dispute is pending is liable to delivery/compensate for the shares’ loss as they have given it to him.
I have come to know vide a Supreme Court Citation case, that I can’t claim anything with respect to the breach of Court’s status-quo order as it is only the plaintiff’s right to claim upon the breach as it was taken out by and for the plaintiff (seller) for his benefit and that only he can obtain remedy with respect to that. Also the seller is not taking any action with respect to this as he has benefited out of this.
The seller has alienated the said shares and I don't know in whose name he has transferred/sold but I know for sure that now I can’t ever recover those shares or its price from him as also he has not kept a single shares/penny in his name.
Firstly, Will it be viable if I file an independent suit against my depository participant and depository for breach of contract and to seek compensation or do I have to seek justice in the seller’s suit itself or where my criminal appeal is pending?
Secondly, Am I entitled to get the highest market price of the shares achieved between the breach date and the compensation realization date along with the accretions and dividends and further compensation for pain and suffering, etc? How much and from whom?
Thirdly, Will I have to wait for the ongoing cases Judgment in order to get compensation?
Fourthly, Is getting compensation dependent on my winning or losing the ongoing cases?
Fifthly, Any suggestion/remedy counsel may give shall be highly appreciated.
Guest
(Expert) 02 August 2015
I can understand your dilema. You have put 5 questions, but I wonder, why you have not made any mention as to what is the opinion of your own lawyer in in the trial court as well as the lawyer you engaged for appeal.
Can you please apprise about the opinion of your lawyers on your queries?
Otherwise, legally, status quo vanishes the day when judgment is delivered in the case. So, unless another stay would have granted by the appellate court on your on applicantion, the action of the depository participant cannot be treated as invalid or illegal. While abiding by the latest order of the court, the DP was not required to take your consent or signature.
Your case stands against the seller, not the depository. Once you win your case on the basis of your appeal, only the seller would be liable to compensate you that too in accordance with the order of the court on the points of relief sought by your lawyer through appeal.
You may have to wait for judgment on your appeal.
P. Venu
(Expert) 02 August 2015
There is no cause of action at present to claim any damages.
R.K Nanda
(Expert) 02 August 2015
query too long.
S Singh
(Querist) 02 August 2015
My case lawyers states that since the order of the Criminal Court was upon me, then I am only authorized to issue instruction as per the Depository Participant-Client agreement to transfer the shares to the informant (seller) after the period of appeal is over.
There are two cases pending and the Status-Quo order was of the Civil Court and not of the Criminal Court.
Further the depository and the depository participant had caused a major breach of terms and conditions of the agreement as the Criminal Court had ordered me and not the depository or the depository participant to make the shares transfer.
No doubt I am not in immediate loss as the criminal and civil cases are pending against me, but since the depository has issued letter that they had transferred shares willfully and shall not reinstate, they are in anticipatory repudiation under section 39 of the Indian Contract Act, 1872 and thus liable to immediately compensate for the future loss today.
These are my lawyers opinion...
T. Kalaiselvan, Advocate
(Expert) 11 August 2015
You may wait for the outcome of the appeal pending before the high court. Your lawyer's opinion can be discussed only after perusing the judgement in the lower court or any interim order in this regard.
Guest
(Expert) 11 August 2015
You have Not Genuinely Explained the Facts about your Off Market Transaction.Such Transactions are Purely based on Trust and What had Really Provoked the Other Side to these Extreme Steps which you have Not Disclosed.
S Singh
(Querist) 11 August 2015
The police had clearly stated in their letter to the depository that the Magistrate has ordered the accused to handover the shares to the informant(seller) then what locus standi does the depository has to make a transfer without my consent?
I had filled the slip and the seller had signed and he claims that he is illiterate and could't understand its contents and he trusted me so he gave permission for x no. of shares but more then x no. of shares were transferred, thats why issues arose.
FIR was filed u/s 420, 467, 468, 471 of IPC.
He had signed in Marathi. Cash was given to him in lieu of the shares.
He claimed no cash received. Further main problem accrued as on the TIFD slip at the place of "Reason for Transfer", I had written Donation and the bank manager in front of whom the transaction took place in the ICICI bank in his own handwriting wrote Gift in bracket like this: "Donation (Gift)"
The Magistrate said that when in fiduciary relation the burden is upon the accused to prove why the complainant is putting allegation.
This fact was not known by me and my lawyers made a different story of Gift as Donation (Gift) was written on the slip.
The Magistrate said why would a person who is having his own family will gift to somebody outsider.
Actually the complainant had asked double money for the shares and was threatening me to lodge a false FIR in failure to pay more.
Can I file a suit claiming compensation for loss caused due to the breach of contract against only the depository?
Plz. Help
Guest
(Expert) 12 August 2015
The Simple Reason Could be the Prices would have Hiked after your Purchase.Consult a Local Good Senior Advocate and Engage Them.
