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2007 DAILYLAW 2717 (DEL)

SH. MANMOHAN SINGH CHAWLA v. RAJESH BERRY

2007-10-29

Anil Kumar

body2007
ANIL KUMAR, J. ( 1 ) THIS order shall dispose of the applications of the plaintiffs under order 6 Rule 17 read with Section 151 of the Code of Civil Procedure, 1908 for amendment of the plaint. ( 2 ) THE plaintiffs are the trustees of Dashmesh Educational Charitable trust. The suit for recovery has been filed by the trustees of the said trust after their appointment as trustee and coming to know that defendants by abusing their powers and position have defrauded the trust and have from the funds so misappropriated purchased various immovable properties. ( 3 ) THE plaintiffs in the plaint in para 26 have detailed the properties which have been purchased by the defendants from the amounts misappropriated from the trust. The defendants have already been restrained by an order passed in an application under Order 39 Rules 1 and 2 from selling, alienating, disposing or creating any third party rights in the respect of properties mentioned in para 26 of the plaint. ( 4 ) IN IA No. 1783 of 2006 the plaintiff has sought amendment of the plaint seeking to incorporate the properties bearing No. Khevat Khata No. 316/356, mu. No. 87, Kila No. 23/2 (3-16) and Mu. No. 112, Kila No. 2 (4-13), 3 (7-19), 4 (8-0), 5/1 (2-15), 7 (8-0), 8/1 (2-13) Kila 7, Kulrakba 37 kanal 16 Marle Ka " Portion bakdar 18 kanal 18 marle and Khevat Khata No. 317/357 mu. No. 112, Kila No. 26 (0-13) rakba 13 marla ka " portion bakdar 3 marle mein se 2 marle hissa naal chah yani dono khevato ka kul rakba=bamutabik hissa 19 kanal 0 marle waka sivana mauja budheda tehsil and Distt. Gurgaon. According to the plaintiffs this property has also been acquired, purchased out of the funds of the trust. The plaintiffs have contended that omission to include the details of this property was not deliberate but on account of non availability of knowledge about the existence of the aforementioned property. The plea of the plaintiff is that inclusion of the above said property in the list of properties which have been acquired by the defendants by misappropriating the funds of the trust is bonafide and necessary for determination of real controversies between the parties. ( 5 ) THE plaintiffs have also filed another application being IA no. The plea of the plaintiff is that inclusion of the above said property in the list of properties which have been acquired by the defendants by misappropriating the funds of the trust is bonafide and necessary for determination of real controversies between the parties. ( 5 ) THE plaintiffs have also filed another application being IA no. 6811/2007 under Order 6 Rule 17 of the Code of Civil Procedure seeking further amendment to the plaint seeking a decree of declaration that the properties as detailed in para 26 of the plaint are trust properties and belong to the trust and seeking a decree of cancellation of the sale deeds in respect of 26 properties in favor of defendants and a direction to defendants to deliver the possession of aforesaid properties to the plaintiffs. ( 6 ) THE plaintiffs have contended that a complaint was instituted by them against the defendants on the basis of which an FIR No. 337/2004 dated 8th september, 2004, P. S. Nabi Karim, Delhi was registered against defendant No. 1 under Sections 406, 467, 409, 468, 471, 420, 120b of the Indian Penal Code. The plea of the plaintiffs is that the records regarding the investigation is voluminous and second supplementary charge sheet was filed, which along with the documents which were filed with the supplementary charge sheet, runs in about 700 pages. It is stated that in the second supplementary charge sheet filed on 30th May, 2005 the investigating officer has adverted to the discovery of a land ledger account created by the defendant no. 1 during his regime as a trustee despite the fact that no land was purchased in the name of either the trust or the college. ( 7 ) THE averment of the plaintiffs seeking amendment to the plaint is that some of the facts which are on the basis of second supplementary charge sheet were inadvertently left out and the omission to incorporate all the relevant facts of the second supplementary charge sheet is neither intentional nor deliberate. In the circumstances plaintiffs seek amendment to the cause title and para 2 of the plaint. Amendment is also sought in para 26 of the plaint. In the circumstances plaintiffs seek amendment to the cause title and para 2 of the plaint. Amendment is also sought in para 26 of the plaint. In para 26 of the plaint the plaintiffs also want to incorporate the facts that defendant No. 1 had created a land ledger account for the period 1st April, 2001 to 6th August, 2004 and as per the account books so seized, it is reflected that an amount of Rs. 16,20,000/- was spent during the year 2002-2007 and Rs. 14 lakh were spent in the year 2003-2004 towards purchase of land whereas no such land was purchased in the name of the trust or dental college. The plaintiffs have also sought similar amendment to para 27 of the plaint. The consequential amendment in para 40 of the plaint are also sought and the amendment to the para of the plaint giving the value for the purpose of Court fees and jurisdiction of the Court is also sought on account of seeking relief of declaration and cancellation. ( 8 ) THE application is contested by the defendants alleging inter-alia that the application is not maintainable as the trust, Dhashmesh Educational charitable Trust has not been impleaded as a party and the plaintiffs have no locus standi to seek the proposed amendment in the name of the trust and the plaintiffs are not authorized to file the present application. It is also contended that plaintiff Nos. 3 and 5 have been illegally introduced as trustee by the plaintiff Nos. 1, 2 and 4 which is ex-facie contrary to the provisions of section 92 of the Code of Civil Procedure. According to the non-applicant/defendants they still continue to be the trustees as neither any meeting had been called for passing any resolution for introducing any new trustee nor any agenda had been circulated to the defendants. ( 9 ) THE learned counsel for defendants, Mr. Vijay K. Gupta has contended that the plaintiffs by amendment wants to include the personal properties of the defendant which will tantamount to plaintiff changing the nature of the suit. According to him if the property to be included by amendment is the personal property of the plaintiff, then the suit for recovery would not lie against such a property and the plaintiff is not entitled to have both the claims which will not be sustainable in law. According to him if the property to be included by amendment is the personal property of the plaintiff, then the suit for recovery would not lie against such a property and the plaintiff is not entitled to have both the claims which will not be sustainable in law. ( 10 ) THE proposed amendment to the plaint is also opposed on the ground that the same is inconsistent with the original case when it was filed on 14. 9. 2005. The defendants/non-applicants have also opposed the amendment on the ground that the proposed amendment is malafide, as pursuant to interim restraint order passed against the defendants from selling, alienating, disposing or creating any third party rights in respect of properties mentioned in para 26 of the plaint by order dated 15. 9. 2005 in IA No. 7284/2005, the defendants had offered on 18th May, 2007 a security of Rs. 5 crores for vacation of interim order against the sale of immovable properties and according to the defendants, the application for amendment has been filed to cover other personal properties and to seek a relief of declaration to counter and negate the offer made by the defendants. The amendment is also opposed on the ground that by the proposed amendment the plaintiff is attempting to block properties worth Rs. 50 crores. ( 11 ) THE learned counsel for the defendants has also imputed delay in amendment on the ground that the second supplementary charge sheet is dated 30th May, 2005 whereas the present suit was filed on 14. 9. 2005. Relying on the doctrine of election of remedies it is contended that once the plaintiff had chosen to file the suit for recovery only, the proposed amendment for declaration and cancellation of sale deeds cannot be allowed. ( 12 ) THE defendants/non applicants have also relied on the fact that an application for attachment being IA No. 7285/2005 is pending where the defendants were directed to show cause as to why the security should not be furnished by them for the suit amount and now with the proposed amendment the nature of entire suit will change. ( 12 ) THE defendants/non applicants have also relied on the fact that an application for attachment being IA No. 7285/2005 is pending where the defendants were directed to show cause as to why the security should not be furnished by them for the suit amount and now with the proposed amendment the nature of entire suit will change. ( 13 ) THOUGH in the replies to the applications for the amendment the defendants took a plea of Order 2 Rule 2 that the proposed amendment seeking other reliefs is barred by Order 2 Rule 2 of the Code of Civil Procedure, however, the same was not argued before the Court at the time of argument. ( 14 ) BY the application being IA No. 1783/2006 the plaintiffs seek inclusion of another property at Serial No. 7 in para 26 of the plaint. The cause of action of the plaintiffs against the defendants is the misappropriation of funds by the defendants and recovery of the amount so misappropriated. If after filing of the suit, it transpires that more amounts were misappropriated and another property was also acquired from the funds misappropriated by the defendants, the plaintiffs should not be denied the right to include the details of another property which is alleged to have been purchased from the funds of the trust whose Chairman was defendant No. 1. ( 15 ) THE purpose and object of Order 6 Rule 17 is to allow either party to alter or amend his pleading in such manner and on such terms as may be just. The power to allow the amendment is wide and can be exercised at any stage of the proceedings in the interest of justice on the basis of guidelines laid down in various precedents. Though the amendment cannot be claimed as a matter of right and under all circumstances but the Courts while deciding such prayer do not adopt a hyper technical approach. Liberal approach is the general rule particularly in cases where the other side can be compensated with costs. Technicalities of law cannot be permitted to hamper the Courts in the administration of justice between the parties. Amendments are allowed in the pleadings to avoid uncalled for multiplicity of litigation. Liberal approach is the general rule particularly in cases where the other side can be compensated with costs. Technicalities of law cannot be permitted to hamper the Courts in the administration of justice between the parties. Amendments are allowed in the pleadings to avoid uncalled for multiplicity of litigation. It is also no more res integra that pretrial amendments are allowed more liberally than those which are sought to be made after the commencement of trial or after conclusion thereof. Mere delay usually cannot be a ground for refusing a prayer for amendment because merits of amendment sought to be incorporated by way of amendments are not to be judged at the stage of allowing prayer for amendment. ( 16 ) A single Judge of the High Court in 93 (2001) Delhi Law Times 579, kanwal Kishore Manchanda Vs. Ms. Raksha Arora and Ors had held that the object of allowing the amendment in the averments of the parties is to iron out and solve the tangle and not to complicate them or to leave certain points for decision in future litigation and the endeavor of the court should always be to settle the matter by taking into consideration all the facts. Reliance can be placed on AIR 2000 SC 614 , B. K. Pillai Vs. P. Pillai; where it was held that the application for amendment should not be rejected, especially when the party opposing amendment can be compensated by cost and the application does not suffer from any delay. ( 17 ) THE plea of the defendants in opposing the applications for amendment is not that the reliefs claimed by amendments are barred by time. What is alleged is that there is delay in seeking the amendment. In AIR 1957 SC 357 , l. J. Leach and Co. Ltd. And Another Vs. M/s. Jardine Skinner and Co. , it was held by the Apex Court that an amendment which incorporates a claim which is barred by time on the date of the application, then it can be disallowed, however, it does not affect the power of the Court to order it, if that is required in the interest of justice. M/s. Jardine Skinner and Co. , it was held by the Apex Court that an amendment which incorporates a claim which is barred by time on the date of the application, then it can be disallowed, however, it does not affect the power of the Court to order it, if that is required in the interest of justice. It was held by the Court: "it is no doubt true that Courts would, as a rule, decline to allow amendment, if a fresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the direction as to whether amendment should be ordered, and does not affect the power of the Court to order it, if that is required in the interests of justice. " In AIR 2000 SC 614 , B. K. Pillai Vs. P. Pillai it was held that the application for amendment should not be rejected, especially when the party opposing amendment can be compensated by cost and the application does not suffer from any delay. It is settled law that the amendment of pleadings under order"6 Rule 17 is to be allowed, if such an amendment is required for proper and effective adjudication of controversy between the parties and to avoid multiplicity of judicial proceedings, subject to certain conditions such as allowing the amendment should not result in injustice to the other side. Normally a clear admission made conferring certain right on a defendant is not allowed to be withdrawn by way of amendment by the plaintiff resulting in prejudice to such a right of the defendant, depending on the facts and circumstances of a given case. In certain situations, a time-barred claim cannot be allowed to be raised by proposing an amendment to take away the valuable accrued right of a party. However, mere delay in making an amendment application itself is not enough to refuse amendment, as the delay can be compensated in terms of money. Amendment is to be allowed when it does not cause serious prejudice to the opposite side. ( 18 ) WHETHER this property which is sought to be included at Serial No. 7 in para 26 of the plaint is the personal property of the defendants or not is to be decided. Amendment is to be allowed when it does not cause serious prejudice to the opposite side. ( 18 ) WHETHER this property which is sought to be included at Serial No. 7 in para 26 of the plaint is the personal property of the defendants or not is to be decided. This is no more res integra that correctness and the falsity of this plea cannot be decided at this stage in the present facts and circumstances nor it is to be decided at the time of consideration whether the amendment should be allowed or not. The defendants have not shown any facts which will show that the property sought to be included is the personal property of the defendants and have not been acquired from the funds allegedly misappropriated except the bald allegation that it is the personal property. Nothing has been produced by the defendants to show as to from where they got the consideration to acquire this property. The amendment sought by the plaintiffs in the facts and circumstances shall be necessary for determination of real controversies between the parties and on the grounds as alleged by the defendants the same cannot be denied. Though the supplementary charge sheet included this property on the basis of ledger of the property which was maintained by the defendant no. 1 as the chairman of the trust though no properties were purchased in the name of the trust and the suit was filed after the second supplementary charge sheet was filed, however, the fact that the supplementary charge sheet runs into about 700 papers cannot be ignored. On the basis of such voluminous record, not incorporating one of the property which also had been acquired from the funds misappropriated by the defendants, cannot be termed malafide so as to deny the plaintiffs amendment of the plaint in order to incorporate the particulars of this property also in the list of the properties which have been acquired from the misappropriated funds of the trust. The Supreme Court in Pankaja Vs yellappa, (2004) 6 SCC 415 at Page 419 had held: "12. So far as the court's jurisdiction to allow an amendment of pleadings is concerned, there can be no two opinions that the same is wide enough to permit amendments even in cases where there has been substantial delay in filing such amendment applications. The Supreme Court in Pankaja Vs yellappa, (2004) 6 SCC 415 at Page 419 had held: "12. So far as the court's jurisdiction to allow an amendment of pleadings is concerned, there can be no two opinions that the same is wide enough to permit amendments even in cases where there has been substantial delay in filing such amendment applications. This Court in numerous cases has held that the dominant purpose of allowing the amendment is to minimize the litigation, therefore, if the facts of the case so permit, it is always open to the court to allow applications in spite of the delay and laches in moving such amendment application. " Similarly in G. Nagamma v. Siromanamma, (1996) 2 SCC 25 , at Page 26 the apex Court had held : "it is settled law that the plaintiff is entitled to plead even inconsistent pleas. In this case, they are seeking alternative reliefs. The application was for amendment of the plaint whereby neither cause of action could change nor the relief could be materially affected. We allow the same. " ( 19 ) BY IA No. 6811/2007 the plaintiffs want to increase the amount claimed by plaintiffs against the defendants from Rs. 5 crores to Rs. 12 crores. This is not disputed that the plaintiffs are seeking these amendments also on the basis of the second supplementary charge sheet which was filed on 30. 5. 2005 and which was available to the plaintiffs before the suit was filed on 14. 9. 2005. What is relevant is that the charge sheet along with the documents runs into about 700 pages which is not denied by the defendants. The learned counsel for the defendants rather tried to contend that the charge sheet runs into 4 or 5 pages only. The documents and other relevant papers which are filed with the charge sheet are also part of the charge sheet and in the circumstances the contention of the counsel for the defendants that the charge sheet runs only into 4 or 5 pages cannot be sustained. The learned counsel for the defendants has contended so, probably to assert that if the charge sheet was only of 4 or 5 pages it could have been easily perused by the plaintiffs before filing the suit on 14. 9. 2005 for recovery of Rs. The learned counsel for the defendants has contended so, probably to assert that if the charge sheet was only of 4 or 5 pages it could have been easily perused by the plaintiffs before filing the suit on 14. 9. 2005 for recovery of Rs. 5 crores and later on the amount claimed cannot be sought to be enhanced. From the facts of this case it is apparent that subsequently, after going through the voluminous charge sheet and the documents filed with the charge sheet, if it has transpired that the amount misappropriated by the defendant Nos. 1 and 2 is not Rs. 5 crores but Rs. 12 crores and if the claim is within time which cannot be denied in the present facts and circumstances on prima facie consideration of the facts, then the plea of the defendants that the proposed amendment is mala fide and should not be allowed on account of delay cannot be sustained. ( 20 ) THIS cannot be disputed that the amendments sought by the plaintiffs are relevant for determination of controversies between the parties. The cause of action as pleaded by the plaintiffs is that defendant no. 1 as the chairman of the trust along with defendant no. 2 misappropriated the funds from which various properties have been purchased. By the amendments, besides the recovery, the plaintiffs also want to seek the relief of declaration and cancellation in respect of the properties which had been purchased from the misappropriated funds. In the circumstances it cannot be pleaded or contented by the defendants that the plaintiffs are trying to incorporate an entirely different cause of action. On the basis of the same cause of action if the plaintiffs are entitled for different reliefs and plaintiffs in the first instance only claim one relief which is available to them, they should not be prevented from seeking other reliefs also which are available to plaintiffs provided they are not barred by time. Apparently the claims of the plaintiffs in the present facts and circumstances are not barred by time. Apparently the claims of the plaintiffs in the present facts and circumstances are not barred by time. ( 21 ) AMENDMENTS sought by the plaintiffs also cannot be declined on the ground that for the modification of interim order, the defendants had offered rupees five crores and in case the amendment shall be allowed, the defendants may perhaps have to offer more amount to get the order modified and allow the defendants to exercise their rights in respect of various properties. In case it has transpired that from the misappropriated funds more properties were acquired, on this ground the plaintiffs cannot be denied to amend the plaint to incorporate all such reliefs which are available to them. The learned counsel for the defendants is also unable to show any precedent that on account of pendency of an application for attachment before judgment, the relief for the amendment of the plaint seeking incorporation of other reliefs on the same cause of action can be denied to the plaintiffs. The plea of the counsel for the defendants relying on the doctrine of election of remedies that once the plaintiffs have chosen to file the suit for recovery only, later on in the same suit, the plaintiffs cannot seek further reliefs on the same cause of action though the reliefs claimed are not barred by time cannot be accepted into present facts and circumstances. Amendments are allowed in the pleadings to avoid uncalled multiplicity of litigation. The power to allow the amendment is wide and can be exercised in the interest of justice. Liberal approach is the general rule particularly in cases where the opposite party can be compensated with costs. In Kanwal Kishore Manchanda (supra) it was held that the object of allowing the amendment in the averments of the parties is to iron out and solve the tangle and not to complicate them or to leave certain points for decision in future litigation. The endeavor of the court is always to settle all the matters by taking into consideration all the facts. This is not disputed by the defendants that the particulars of the properties which are now sought to be incorporated find place in the second supplementary charge sheet. The endeavor of the court is always to settle all the matters by taking into consideration all the facts. This is not disputed by the defendants that the particulars of the properties which are now sought to be incorporated find place in the second supplementary charge sheet. It also cannot be disputed that the basis for seeking declaration and cancellation of sale deeds is the allegation of the plaintiffs that the defendants have misappropriated the funds of the trust and have acquired various properties. In the circumstances there does not seem to be any impediment in allowing the applications seeking amendments to the plaint. ( 22 ) FOR the reasons stated hereinabove, the applications for amendments are allowed, subject to cost of Rs. 15,000/- each payable to the defendants/non-applicants within two weeks. The amended plaint be filed. Amended plaint be filed within two weeks. Learned counsel for the defendant seeks time to file the written statement to the amended plaint. Written statement to the amended plaint be filed within two weeks. Replication, if any, be filed within two weeks thereafter. List on December 7, 2007 along with all pending applications.