Anil Nanda And Anr. vs Escorts Limited And Ors.
2006 Latest Caselaw 397 Del

JUDGMENT

Anil Kumar, J.

Page 937

1. This order will dispose of plaintiffs' application under Order 6 Rule 17 read with Section 151 of the Code of Civil Procedure for amendment of the plaint.

2. The plaintiffs have filed the suit for decree for mandatory injunction directing restoration of the assets, properties and facilities of second defendant and its ownership, management and control and its character and structure to its original status of a public charitable institution dedicated wholly and exclusively to public service and declaration and permanent injunction seeking declaration that the amalgamation of EHIRC-Delhi with EHIRC- Chandigarh is non-est and bad in law and also that conversion of EHIRC- Chandigarh into a Limited company is also void and contrary to law. Consequently, the plaintiffs have prayed for permanent injunction against defendant No. 1 from transferring, alienating or otherwise creating any third party rights or interest with respect to the shares held by defendant No. 1 in defendant No. 2.

3. The plaintiffs have contended that subsequent to the filing of the written statement in order to pursue the suit the plaintiffs carried out an inspection Page 938 of the records of the Registrar of Societies, Chandigarh, Delhi and Registrar of Companies, Jhallandhur and during this exercise some facts have been discovered which have direct bearing on the question pending adjudication in the suit. It was contended that from the facts revealed during the inspection it appears that the defendants have falsified and back dated the resolutions passed by Delhi Society on 15th January, 2000/26th February, 2000 in order to give credence to the story of amalgamation, however, the fact as transpired is that there was no amalgamation of EHIRC-Delhi with EHIRC-Chandigarh and consequently the plaintiffs want to amend the plaint and seek a declaration also to the effect that there was no amalgamation of EHIRC-Delhi with EHIRC- Chandigarh. The plaintiffs contend that the proposed amendments are necessary for determination of real controversies between the parties and shall be necessary for full and proper adjudication of disputes.

4. The plaintiffs/applicants have relied on G. Nagamma and Anr. v. Siromanamma and Anr. ; Pankaja and Anr. v. Yellappa and Ors. ; Estralla Rubber v. Dass Estate (P) Ltd. and Ragu Thilak D. John v. S. Rayappan and Ors. (2001) 2 SCC 472 to contend that the plea sought to be raised by the plaintiffs by amendment are not inconsistent with the pleas raised in the plaint and in any case the plaintiff is entitled to plead even inconsistent pleas.

5. The application is contested by the defendants. Replies were filed on behalf of defendant Nos. 1 and 2 contending that by proposed amendments the plaintiffs are seeking to make out an entirely new case. It was contended that the whole case of the plaintiffs is based on the merger of EHIRC-Delhi with EHIRC-Chandigarh and subsequent conversion of EHIRC-Chandigarh into a Limited company whereas by amendment the plaintiffs want to contend that there was no amalgamation between EHIRC-Delhi and EHIRC-Chandigarh. According to defendants the amendment is contrary to the either case set up by the plaintiffs and it is a settled law that mutually destructive and contrary and inconsistent pleas cannot be allowed to be raised by way of an amendment to the pleadings. The defendants have opposed the amendment on the ground that the proposed amendment would alter the nature and character of the suit and hence cannot be allowed and the plaintiffs cannot be allowed to set up an entirely different suit and the amendment is an attempt by the plaintiffs to change the basis of the suit. It was also asserted by the defendants that the amendments are not clarificatory in nature and shall change the entire character of the plaint/suit.

6. The Defendants/non-applicants have relied on Baldev Singh v. Godran Rubber Plastic Industries ; Kesho Lal Kapur and Ors v. Vinod Kumar and Anr. ; Page 939 Umrao Singh v. Ram Dulari and Ors. ; Heera Lal v. Kalyan Mal and Ors. and Manmohan v. Sham Lal and Ors. 83(2000) DLT 218 to contend the mutually destructive plea and setting up an entirely different case can not be allowed by amendment to the plaint.

7. The power to allow the amendment is wide and can be exercised at any stage of the proceedings in the interests of justice on the basis of guidelines laid down in various precedents. 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. 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. Technicalities of law can not be permitted to hamper the Courts in the administration of justice between the parties. Liberal approach is the general rule particularly in cases where the other side can be compensated with costs. 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.

8. In G.Nagamma (Supra) relied on by the plaintiffs, the Apex Court had held that the plaintiff is entitled to plead even inconsistent pleas. In that case the plaintiffs were seeking alternative relief and the application for amendment of the plaint whereby neither cause of action changed nor the relief were materially affected, was allowed. The Apex Court in Chandan (Supra) had held that proposed amendments based on two different pleas which were not causing any prejudice to the opposite party were allowed. In Estralla Rubber (Supra) it was held that delay on its own is not a ground for rejection of application for amendment unless serious prejudice would be caused to the other party and accrued rights taken away as a result of delay. Referring to Order 6 Rule 17 of the Code of Civil Procedure it was held that the amendment to the pleadings be allowed if such an amendment is required for proper and effective adjudication of controversies between the parties and to avoid the multiplicity of judicial proceedings subject to certain conditions such as allowing the amendment should not result in injustice to the other side. It was held that normally a clear admission made Page 940 conferring certain rights on a plaintiff is not allowed to be withdrawn by way of amendment by a defendant resulting in prejudice to such a right of the plaintiff depending on the facts and circumstances of a given case. At the same time it was held that mere delay in making an amendment application itself is not enough to refuse amendment as the delay can be compensated in terms of money and amendment be allowed when it does not cause serious prejudice to the opposite party.

9. The Apex Court was concerned with the change of the nature of suit originally filed by amendment in Ragu Thilak (Supra) and it was held that the dominant purpose of Order 6 Rule 17 is to minimize litigation. In this case the plaintiff had filed a suit against the respondents for permanent injunction seeking restraint against the defendants from demolishing plaintiff's compound wall. During the pendency of the suit the defendants entered plaintiff's property and demolished the wall on Northern, eastern and western side entailing filing of an application for amendment for incorporating the relief of recovery of damages. In this matter despite the amendment being barred by time it was held that the amendment sought could not be declined. The plea of limitation being a disputed question of mixed fact and law was allowed. Yet in another matter Pankaja (Supra), the Apex Court had held that even if the amendment sought is barred by limitation there is no absolute rule that the amendment in such a case should not be allowed. The Apex Court acknowledged the rights and discretion in this regard on the facts and circumstances of the case which has to be exercised on a judicious evaluation thereof. What was held was that an amendment sub-serving the ultimate cause of justice and avoiding further litigation should be allowed.

10. Reliance can also be placed on Rameshwar and Ors. v. Jot Ram and Ors. ; Smt. Abnash Kaur v. Dr. Avinash Nayyar and Ors. and Pangoti Mangarao v. Chinnadi Krishnan holding that to obviate the multiplicity of proceedings a new and different ground subsequently can be allowed. In Pangoti Mangarao (supra), a Division Bench of Andhra Pradesh had held that the courts are not precluded from taking cognizance of the facts since the laying of the action and granting relief to the parties on the basis of altered situation. It was held that it is an inherent power which is required by the court to be exercised. The power should be exercised if it tends to shorten the litigation and best sub-serve the ends of justice. In this matter, when a suit was brought for contribution against other co-judgment debtor, a very small portion of the decreetal amount had remained unpaid and petition to amend the plaint recording payment of unpaid portion of decree was filed which was allowed holding that even if a Page 941 formal amendment was necessary when the party had filed a petition for amending the plaint so as to enable him to include that cause of action, a petition must be accepted, since dismissing the plaint as being premature would amount to drive the plaintiff to another suit involving unnecessary litigation and expenses and thereby defeating the ends of justice and not advancing the cause of it. In Abnash Kaur (supra), a Full Bench of this Court had held that there is no inflexible rule that a cause of action arising subsequent to the filing of the petition for eviction cannot be added in the petition by way of amendment.

The Apex Court also in Rameshwar and Others (supra) had held that impact of subsequent events is first, its bearing on the right of action, second, on the nature of the relief and third, on its importance to create or destroy substantive right.

11. The general rule in the matter of allowing amendment of pleadings as approved by the Supreme Court in A.K. Gupta and Sons Ltd. v. Damodar Valley Corporation , is that a party by amendment is not allowed to setup a new case or new cause of action. The Apex Court held:-

The principal reasons that have led to the rule last mentioned are first, that the object of Courts and rules of procedure is to decide the rights of the parties and not to punish them for their mistakes (Cropper v. Smith (1884) 26 CH D 700 (710-711) and secondly, that a party is strictly not entitled to rely on the statue of limitation when what is sought to be brought in by the amendment can be said in substance to be already in the pleading sought to be amended.

12. The Apex Court in Pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil and Ors. was concerned about the legality and validity of the order allowing amendment to the plaint. The Apex Court had observed:-

in my opinion, two simple tests, and two only, need to be applied, in order to ascertain whether a given case is within the principle. First, could the party asking to amend obtain the same quantity of relief without the amendment If not, then it follows necessarily that the proposed amendment placed the other party at a disadvantage. It allows his opponent to obtain more from him than he would have been able to obtain but for the amendment. Since, in those circumstances, can the party thus placed at a disadvantage be compensated for it by costs If not, then the amendment ought not, unless the case is so peculiar as to be taken out of the scope of the rule, to be allowed.

13. Per Contra the defendants have relied on Hira Lal (Supra) where it was held that withdrawal of admission made in the written statement by the defendant which would displace plaintiffs case and cause him irretrievable prejudice cannot be permitted. In this case in a suit for partition the defendants had first contended that only three properties at item Nos. 4, 9 Page 942 and 10 exclusively belonged to them and remaining seven properties listed in Schedule A were the joint family properties and in respect of Schedule B the case of the defendant was that in Schedule B properties plaintiff had no interest. On the basis of this stand in a suit which remained pending for a considerable number of years and thereafter the plaintiff moved an application for appointment of a receiver after which defendant moved an application contending that because of incomplete information supplied to him he could not file the correct details of the properties and he sought to amend his admission that the properties detailed in Schedule B were not in his possession and the said properties were in possession of trespassers and, therefore, the defendant No. 1 was not allowed to take inconsistent pleas. In Baldev Singh (Supra) relied on by defendants it was held that the amendment which was contrary to and inconsistent with the averments in the plaint were not to be allowed. In this case a suit was filed by the plaintiff primarily for infringement of his registered design in respect of plaintiffs footwear. The plaintiff had denied selling and offering for sale his footwear prior to the date of the registration and suppressed the information as to when the plaintiff became the sole proprietorship firm whereas the registration certificate showed the names of two persons and in these circumstances, amendment sought was denied.... A Single Judge of this High Court in Man Mohan (Supra) had held that the amendments are to be liberally allowed to give full opportunity to a party to prove its case for effective and complete adjudication of mater in controversies. In Umrao Singh (supra) amendment was disallowed because by amendment, plaintiff wanted to change the title of the property and wanted to introduce an entirely different cause of action and relief. Similarly in Keso Lal Kapur and ors. (supra) amendment was declined as the plaintiff wanted to change the nature of the suit as the plaintiff had admitted in the plaint that three brothers became co-owners of properties after transferring two properties and by amendment they wanted to propounded an oral partition and the amendment sought was held to change nature and character of the suit.

14. Where the nature of the relief, as originally sought, has become obsolete or unserviceable or a new form of relief will be more efficacious on account of developments subsequent to the suit or even during the appellate stage, it is but fair that the relief is moulded, varied or reversed in the light of updated facts. It has been held that where a cause of action is deficient but later events have made up the deficiency, the Court may, in order to avoid multiplicity of litigation, permit amendment and continue the proceeding.

15. The plaintiff has sought restoration of all the assets and properties of Escort Heart Institute and Research Centre, Delhi (referred to as EHRIC- Delhi) on the ground that it was a charitable institute and had not been started with the motive to earn profits and the profits were to be utilized Page 943 towards promotion of aims and objects of the society and by any mechanism the charitable society could not be converted into profit making body for a few individuals and consequently the mechanism of creation of a new society, EHRIC-Chandigarh, merger of two societies at Chandigarh and New Delhi and subsequently floating of a new company with limited liability and transfer of shareholding and assets to third parties has been sought to be illegal and unlawful and declaration regarding various steps of this mechanism being null and void. Now on the basis of documents, some of which the plaintiffs claim came to their knowledge during recent inspection and some of which have already been filed by the plaintiffs with original suits, the plaintiffs are claiming that there was not ever proper merger of two societies, Delhi Society which was for charitable purposes and the Chandigarh Society which was formed subsequently. The plaintiffs by amendment seek to incorporate the plea that since there was no proper merger of charitable society at Delhi with the other society in Chandigarh, therefore the assets were not transferred to Chandigarh society and thereafter to another company, therefore the assets of the charitable society at Delhi be restored. The nature of the relief, as originally sought remains the same which is restoration of assets and management of the Society at Delhi and restoration of its character and structure as a public charitable institution. The plaintiffs by amendment wants to contend that even the first merger of Society at Chandigarh and New Delhi was not complete which has come to their notice on inspection of the records of the societies at Chandigarh and New Delhi and such a plea will be more efficacious on account of developments subsequent to the suit and it is but fair that the relief be molded, varied or reversed in the light of updated facts. The initial cause of action of the plaintiffs had not been deficient but later perceptions that even the first merger of two societies was not complete, is therefore, will be necessary to avoid multiplicity of litigation and necessary for determination of controversies between the parties.

16. The plea of the defendants that the plaintiff is setting up mutually destructive pleas is also not justifiable in the facts and circumstances. For converting assets of a charitable society into a profit making body, the plaintiffs have challenged various steps devised by the defendants, each of which is challenged by the plaintiff and the declaration is sought in respect of them. By amendment the plaintiff is contending that even the first step of amalgamation of charitable society with Chandigarh Society is not born out from the documents and therefore the assets and properties of the charitable society be restored to the Charitable society. From the facts and circumstances of the case it is apparent that it does not alter the nature and character of the suit which is for restoration of ownership, management and control of the Delhi charitable society.

17. The plaintiff could have filed the present suit for injunction contending that the charitable society has not been merged with another society which was created in Chandigarh and therefore restoration of ownership, ownership, management and control of the Delhi charitable society and in case there was merger, then the merger of two societies being illegal for the reasons alleged by the plaintiff. Such a suit would have been maintainable and the defendants could not allege that the plaintiff is taking such mutually Page 944 destructive pleas which will not be permissible. If that be so the defendants are not succeed on the ground that the plaintiff is taking mutually destructive plea by amendment and the same should not be permitted to the plaintiffs. The amendment sought is for sub-serving the ultimate cause of justice and avoiding further litigation and therefore, it should not be declined.

18. Considering the amendments sought by the plaintiffs in any perspective, the inevitable inference is that the amendment is necessary for the determination of real controversies between the parties and the pleas sought to be incorporated will not change the basic nature of the suit. The suit is still in the pre trial stage and issues have not been framed. No prejudice shall be caused to the defendants by the amendment. The plea of the plaintiff after amendment shall be that the merger of two societies at Delhi and Chandigarh was not complete and in case merger had completed, it was illegal on the pleas raised by the plaintiffs. Such a plea can not be construed to be mutually destructive or resulting into withdrawal of admission by the plaintiffs. The Plaintiffs had not admitted that the merger of two societies was legal and now it is being contended that there was no merger.

19. The defendants have very vehemently argued that the amendment is sought on the ground that from the record of the Registrar of Societies, important facts have been discovered now though the plaintiff had filed some of the documents from record of the Registrars of the societies earlier which will show that the plaintiffs could take this plea earlier. The amendment to the plaint sought by the plaintiffs can not be declined on the ground alleged by the defendants. Even if the plaintiffs had filed some of the documents from the record of the Registrar of Societies and could take this plea at the time of filing the suit, yet the plaintiff can contend that on inspection again of the records of the Registrar of Societies, on the basis of facts which have been perceived by the plaintiffs later on, they are entitled to seek amendment to the plaint. What is to be seen is whether the amendment is necessary for the determination of real controversies between the parties. For the delay which may be caused on account of proposed amendment in the plaint, the defendants can be compensated and consequently it can not be urged by the defendants that they will be prejudiced in such a manner which will not be compensated. It is also settled that the falsity or correctness of the plea raised by the plaintiffs is also not be decided at the time of consideration of amendment sought by the plaintiffs.

20. Therefore, in the facts and circumstances of the case for the reasons aforesaid, the application of the plaintiffs for the amendment of the plaint is allowed subject to the cost of Rs. 20,000 payable by the plaintiffs to the defendant Nos. 1 to 5. Amended plaint be filed by the plaintiff within two weeks.