Delhi High Court
Walchandnagar Industries Ltd. vs Saraswati Industrial Syndicate ... on 24 December, 2010
Author: Vikramajit Sen
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) No.405/09 & CM Nos.12908/09, 10475/10
Walchandnagar Industries Ltd. .....Appellant through
Mr. Sunil Gupta, Sr. Adv.
with Mr. Jatin Zaveri,
Mr. Gaurav Aggarwal &
Mr. Tanmaya Aggarwal,
Advs.
versus
Saraswati Industrial Syndicate Ltd......Respondent through
Mr. P.V. Kapur, Sr. Adv.
with Ms. Ekta Kapil & Mr.
Gaurav Chauhan, Advs. for
Respondent No.1
Mr. Arun Bhardwaj, Sr.
Adv. with Mr. Manish
Sharma, Mr. Amit Bhardwaj
&
Mr. Vishal Malhotra, Advs.
for Respondent No.2
WITH
FAO(OS) No.406/09 & CM Nos.12911/09, 6093/10
Walchandnagar Industries Ltd. .....Appellant through
Mr. Ramji Srinivasan, Sr.
Adv. with Mr. Jatin Zaveri,
Mr. Gaurav Aggarwal &
Mr. Zeyaul Haque, Advs.
versus
Uttam Sucrotech International Pvt. Ltd....Respondent through
Mr. A.S. Chandhiok, Sr.
Adv., Mr. Chetan Sharma,
Sr. Adv. with Mr. Pragyan
Sharma &
Mr. Rupesh Gupta, Advs.
for Respondent No.1
FAO(OS)405/2009 Page 1 of 79
Mr. Arun Bhardwaj, Sr.
Adv. with Mr. Manish
Sharma, Mr. Amit Bhardwaj
&
Mr. Vishal Malhotra, Advs.
for Respondent No.2
WITH
FAO(OS) No.461/2009 & CM No.14117/09
Overseas Infrastructure Alliance ......Appellant through
India Pvt. Ltd Mr. Arun Bhardwaj, Sr.
Adv. with Mr. Manish
Sharma, Mr. Amit Bhardwaj
&
Mr. Vishal Malhotra, Advs.
versus
Uttam Sucrotech International Pvt. Ltd....Respondent through
Mr. A.S. Chandhiok, Sr.
Adv., Mr. Chetan Sharma,
Sr. Adv. with Mr. Pragyan
Sharma &
Mr. Rupesh Gupta, Advs.
for Respondent No.1
Mr. Ramji Srinivasan, Sr.
Adv. with Mr. Jatin Zaveri,
Mr. Gaurav Aggarwal &
Mr. Tanmay Aggarwal,
Advs. for Respondent No.3
WITH
FAO(OS) No.462/09 & CM No.14122/09
Overseas Infrastructure Alliance .....Appellant through
India Pvt. Ltd. Mr. Arun Bhardwaj, Sr.
Adv. with Mr. Manish
Sharma, Mr. Amit Bhardwaj
&
FAO(OS)405/2009 Page 2 of 79
Mr. Vishal Malhotra, Advs.
versus
Saraswati Industrial Syndicate ......Respondent through
Mr. P.V. Kapur, Sr. Adv.
with Ms. Ekta Kapil, Mr.
Gaurav Chauhan & Mr.
Sudhanshu Goyal, Advs. for
Respondent No.1
Mr. Sunil Gupta, Sr. Adv.
with Mr. Jatin Zaveri,
Mr. Gaurav Aggarwal &
Mr. Tanmaya Aggarwal,
Advs. for Respondent No.3
% Date of Hearing: November 25, 2010
Date of Decision: December 24, 2010
CORAM:
* HON'BLE MR. JUSTICE VIKRAMAJIT SEN
HON'BLE MR. JUSTICE G.P. MITTAL
1. Whether reporters of local papers may be
allowed to see the Judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the Judgment should be reported
in the Digest? Yes
VIKRAMAJIT SEN, J.
1. The facts germane for a decision in these Appeals are
that in respect of a Sugar Mill Project to be established in
Ethiopia, funding has been made available by the Government
of India through the aegis of EXIM Bank. The Project has
been sub divided into seven sub-projects for which separate
and independent tenders were floated. These are - (1) Steam
Generation (2) Process House (3) Juice Extraction (4) Power
Generation (5) Diesel Generation (6) Factory Workshop and
(7) Plant Water System. It was further decided that for ease
and facility of implementation of the Project, instead of
dealing separately with all the successful Tenderers, the
Tenderer who had been awarded the largest number of
projects, would act as the lead party; a single Engineering,
Procurement and Construction (EPC) contract would be
entered into with this party. Saraswati Industrial Syndicate
Ltd. was the Successful Tenderer in respect of Steam
Generation; Uttam Sucrotech International Pvt. Ltd. in
respect of Process House; and since in respect of Juice
Extraction and Power Generation the successful Tenderer
was OIA, it was agreed that Overseas Infrastructure Alliance
India Pvt. Ltd. (OIA) would act as the single EPC Contractor.
2. The Appellants assert that a completed contract had
already evolved in their favour, whereas OIA contends that
while Saraswati Industrial Syndicate Ltd. and Uttam
Sucrotech International Pvt. Ltd. were successful Tenderers,
a contract between them was required to be executed and
this had not transpired. It is not in controversy that OIA had
demanded fifteen per cent commission/charges from the
Appellants and all other successful Tenderers ostensibly to
cover expenses that OIA would inevitably have to incur as the
single EPC Contractor. The Appellants assert that
Walchandnagar Industries Ltd. was illegally introduced into
the subject Sugar Mill Project by OIA by engineering the
removal of both Saraswati Industrial Syndicate Ltd. and
Uttam Sucrotech International Pvt. Ltd. owing to their
reluctance to make the payment of the said fifteen per cent
commission/charges. The Ethiopian party, namely, TENDAHO
Sugar Factory Project has not contested either the suit or this
Appeal.
3. Saraswati Industrial Syndicate filed a Suit for perpetual
and mandatory injunction, being CS(OS) No.1368/2008,
pleading, inter alia, in paragraph 16 that OIA "has failed
and/or neglected to execute the formal contract document
with the plaintiff and is threatening to introduce a third party
in place of the plaintiff". Most significantly, in paragraph 7 of
the original Plaint, it has been pleaded that on or about 7th
December, 2007, TENDAHO reiterated in writing to OIA that
"the winning bidders of other packages are to be retained as
sub contractors without any alteration in the agreed technical
and financial aspects as already finalized with the individual
bidder". This averment has not been denied but in response
to the said paragraph, OIA has pleaded as follows:
... The correct position, however, is that the right and
the power to fix a sub contract on terms and
conditions to be negotiated between the answering
defendant and the sub contractors is a matter which
is entirely within the domain of the answering
defendant‟s function as the main EPC contractor. The
Defendant No.1 after signing of contract dated
10.01.2008 and addendum no.1 dated 21.02.2008 of
contract had tried to persuade the Plaintiff by verbal
and writing communication to sign the contract at
the earliest so that the project should not be
jeopardized. The answering defendant may also at
this stage point out that since the plaintiff was
dillydallying the finalization of the terms of the sub
contract to be executed, the said matter was
therefore brought to the notice of the defendant No.2
vide letter dated 13th June 2008 as also by letter
dated 16th June 2008 in pursuance of which clear cut
instructions were issued to the answering defendant
to finalize the sub contract agreement with all the
sub contractors by 27th June, 2008 with a view to
avoid any further delay in the start of the work. A
copy of the minutes is being filed by the answering
defendant in the list of documents and shall be
referred to at an appropriate stage. Pursuant to the
said instructions, the answering defendant requested
the plaintiff to finalize the contract by the 27th of
June 2008. As submitted earlier the plaintiff failed to
settle the terms of the contract and therefore in
order to save the project from being jeopardized on
account of price and other relevant factor entered
into a Memorandum of Understanding dated 8th July,
2008 with M/s Walchandnagar Industries Limited
(WIL) which has agreed to undertake the
construction of the Steam Generation Plant for the
Tendhao sugar factory project. Further, the
answering Defendant no.1 has signed a definite
contract with Messrs WI, Mumbai for execution of
Project as a sub-contractor to answering Defendant
on 12.07.2008. The answering defendant has
thereafter proposed the name of Messrs WI, Mumbai
as proposed sub-contractor to defendant no2 vide
letter dated 11th of June 2008. In light of these
developments, it is futile for the plaintiff to allege
that the sub contracts had already come into
existence between the plaintiff and the answering
defendant or defendant No.2 for that matter.
4. The similar position obtains so far as Uttam Sucrotech
International Pvt. Ltd is concerned which has filed Suit
No.1447/2008 averring, inter alia, that while it had been
extending all cooperation to OIA, the latter "has been illegally
trying to avoid the conclusion of any such contract and is
delaying the process unnecessarily for its vested interests of
ousting them from the contract completely and illegally
replacing it with its own parties". In the Plaint, there are
allegations kindred to those of Saraswati Industrial Syndicate
Ltd., namely, that OIA "has threatened to introduce a third
party in place of the plaintiff". Uttam Sucrotech International
Pvt. Ltd has also asserted that a concluded contract has
already emerged between itself and TENDAHO. OIA pleads in
the Written Statement as follows:
The answering defendant further submits that the
plaintiff failed to meet the deadline and settle the
terms of subject contract resulting in the answering
defendant entering into a memorandum of
understanding with Walchandnagar Industries Ltd.
on 8.7.2008 for the construction of the process house
project. Defendant No.2 vide their letter reference
no.TSPFOI/12/201 dated 5.8.2008 accepted the
substituted offer for process house package of TSPF
in favour of OIA and Walchandnagar Industries Ltd.
on the basis of the substituted technical offer
submitted by answering defendant dated 18.7.2008.
5. Both the Plaintiffs assert that the contract with
Walchandnagar Industries Ltd. was predated with the
purpose of defeating the interim orders passed by the learned
Single Judge. Contempt proceedings have been initiated by
the plaintiff and are presently pending.
6. It is at this juncture that Saraswati Industrial Syndicate
filed IA No.13366/2008 in CS(OS) No.1868/2008 under Order
VI Rule 17 read with Order I Rule 10 read with Section 151 of
the Code of Civil Procedure (CPC for short) praying for
amendment of the Plaint to be „taken on record‟; and for
Walchandnagar Industries Ltd. as well as EXIM Bank to be
allowed to be impleaded as Defendant Nos.3 and 4. The
amendments have been allowed and the impleadment of only
Walchandnagar Industries Ltd. has been permitted in terms
of the impugned Order. OIA and Walchandnagar Industries
Ltd. have filed separate Appeals.
7. Uttam Sucrotech International Pvt. Ltd. has, in familiar
fashion, filed IA No.1938/2009 in CS(OS) No.1447/2008
under Order VI Rule 17 read with Order I Rule 10 read with
Section 151 of the CPC. Reliefs similar to Saraswati Industrial
Syndicate have been made which have been also allowed in
the impugned Order, declining, however, to implead EXIM
Bank.
8. It seems to us that because a composite application had
been filed by both the Plaintiffs praying for the amendment of
the Plaint as well as for impleadment of parties, notice
thereof came to be issued to the party proposed to be
impleaded, namely, Walchandnagar Industries Ltd. In the
normal course, it is a contradiction in terms to issue notice of
an application seeking the impleadment of a party to the
party proposed to be so impleaded. If the Court is convinced
by the Plaintiffs‟ submission of the necessity and expediency
of impleading the proposed parties, the proposed party
should be impleaded and notice would thereafter be issued to
it. There is no scope, nor is this the practice, for obvious
reasons, at the very first instance and at the very initiation of
the suit to show cause why it should be arrayed as a
defendant. Of course, it is always open to the defendant as it
would be available to a party impleaded in the course of
litigation to file an application under Order I Rule 10(2) of the
CPC for striking it out of the array of parties. We must
immediately clarify that this relief is not available in the
present cases since Walchandnagar Industries Limited has
already been extensively heard on the question of whether it
should be impleaded as a party to the respective suits.
9. The refusal by the learned Single Judge in the impugned
Order to implead EXIM Bank was also challenged by Uttam
Sucrotech International Pvt. Ltd. in the form of FAO(OS)
No.460/2009. However, on 18.11.2009 the Appeal was
dismissed as withdrawn.
10. In the course of the hearing of the two composite
applications for amendment of the plaint as well as for the
impleadment of Walchandnagar Industries Ltd. and EXIM
Bank, learned counsel for OIA had uncontrovertedly been
conceded on 30.7.2009 that the amendments prayed for by
Saraswati Industrial Syndicate in paragraph 15(1) and
paragraphs 18A to 18K may be permitted to be incorporated
in the amended Plaint. On that date, it was specifically noted
that - "insofar as amendments to the prayer clause are
concerned, counsel submit that he is seriously opposing the
same. In this view of the matter, list on 3.8.2009 at 2:30 P.M.
for further argument on the remaining reliefs prayed for in
the application". However, the impugned Order categorically
mentions that learned counsel for OIA has no objection to the
amendments being carried out. The learned Single Judge
recorded that "as far as the prayer for amendment is
concerned, it need not detain me for long and the reason is
that after the application had suffered lengthy arguments, for
and against, the learned counsel for defendant no.1 conceded
that the amendment sought could be allowed subject to
liberty to it to raise such objections as may be available to it
and to this, it may be noted, the learned counsel for the
plaintiff had no objection". In other words, the reservation
viz.-a-viz., the amended Prayers was abandoned and given up.
11. The same sequence of events occurred in the Suit and
Application filed by Uttam Sucrotech International Pvt. Ltd.
The learned Single Judge has recorded in the Order dated
30.7.2009 that counsel for OIA "states that without prejudice
to its rights and contentions, he has no objection if the
proposed amended plaint except the reliefs claimed in the
prayer clause is taken on record. Insofar as prayer clause is
concerned, he states that he is opposing the amendments
proposed therein". The learned Single Judge records in the
impugned Order thus - "it is time now to come straight to the
application for amendment and impleadment. Should it be
allowed? As far as prayer for impleadment is concerned, it
need not detain me for long and the reason is that after the
application had suffered lengthy arguments, for and against,
learned counsel for defendant no.1 conceded that the
amendments sought should be allowed subject to liberty to it
to raise such objections as may be available to it and to this,
it may be noted, the learned counsel for the plaintiff has no
objection. Keeping this in view and keeping also in view the
nature of the amendments and so also the fact that the
amendments have their seed in subsequent developments,
the amendments sought are allowed". As already noted, it is
palpably clear that the earlier objection to the Court allowing
the Prayers to be augmented was not agitated any longer.
12. In view of the recorded concession, we are unable to
appreciate how the present Appeals are maintainable since
on the face of it they endeavour to reverse orders passed on
concession. Learned Senior Counsel appearing for the
Appellants/Defendants have strenuously contended that
complete and total concession, as mentioned in the impugned
Order, had not been expressed. We are firmly of the opinion
that it is not open to the Appellants to take this plea. The
proper course would have been to file a Review before the
learned Single Judge articulating therein the factum of the
Appellants/Defendants allegedly having steadfastly made only
a partial concession and having opposed the inclusion of the
amended prayers on the date on which orders were reserved.
We need not go further than Pushpa Devi Bhagat -vs-
Rajinder Singh, AIR 2006 SC 2628 in which their Lordships
have held that an Appeal is not maintainable against a
consent Decree having regard to the specific bar contained in
Section 96(3) of the CPC and that the proper course to adopt
was to approach the Court which passed the consent Decree
with a view to establishing that there was no compromise. On
a parity of reasoning, we are of the view that the Appellants
should have filed Review Petitions before the learned Single
Judge on this aspect and having failed to do so are foreclosed
from contending that the impugned Order records the
position incorrectly.
13. Since, however, lengthy arguments have already been
heard on the merits of the amendments, we think it proper to
return a complete and comprehensive answer to the
amendment of Plaint controversy. The facts which stand
incorporated in the respective plaints, concededly on the
concessions of the Respondent/Defendant, speak
voluminously and extensively of Walchandnagar Industries
Ltd.
Pleadings in unamended Plaint (Saraswati Industrial
Syndicate Ltd.)
15. The Defendant No.1, thereafter, began to threaten the
Plaintiff that they would inform Defendant No.2 that Plaintiff
was delaying execution of a formal contract. The Plaintiff
meanwhile drafted a contract that was acceptable to the
Plaintiff and in line with the agreement arrived at between all
parties on 19th & 20th December, 2007 and the concluded
contract terms and conditions between Defendant No.2 and
the Plaintiff which was forwarded to the Defendant No.1 on
June 28, 2008.
....
18. In the agreement between defendant No.1 and defendant
No.2 and/or the Plaintiff, there exists a positive covenant
coupled with an implied negative which the defendant No.1 is
threatening to breach. This Hon‟ble Court ought to grant
injunction to perform the negative covenant. The implied
negative covenant is contained in letter dated 7.12.2007 from
defendant No.2 to defendant No.1 as under:-
The winning bidders of other packages are to be
retained as sub contractors without any alteration in
the agreed technical and financial aspects as already
finalized with the individual bidder.
Further in letter dated 7.12.2007 from defendant No.2 to
Plaintiff:-
You, as winning Bidder of Steam Generation Plant
Bid Tender No.TSFP-F/002/06/SG, will be retained as
sub-contractor to the main EPC Contractor without
any alteration in the agreed technical and
commercial aspects including the time schedule, as
already negotiated and finalized.
Further, in the joint meeting, inter alia, Plaintiff, defendant
No.1 and defendant No.2:-
All winning bidders were informed that as per the
directive from the Government of Ethiopia, the
managements of TSFP & FSF intend to appoint one
single EPC contractor and all other winner bidders
shall work as sub contractor to the proposed single
EPC contractor.
Contract agreement between EPC contractor and
winner bidder shall be seamless and address all
issues as per original tender documents including
GCC, SCC and other financial conditions.
The aforesaid clauses clearly stipulates that the defendant
No.1 is by way of an implied negative covenant not permitted
to modify and/or attempt to modify any agreed technical,
commercial including price aspects already finalized between
the plaintiff and defendant No.2.
Pleadings in amended Plaint
15. The Defendant No.1, thereafter, began to threaten the
Plaintiff that they would inform Defendant No.2 that Plaintiff
was delaying execution of a formal contract. The Plaintiff
meanwhile drafted a contract that was acceptable to the
Plaintiff and in line with the agreement arrived at between all
parties on 19th & 20th December, 2007 and the concluded
contract terms and conditions between Defendant No.2 and
the Plaintiff which was forwarded to the Defendant No.1 on
June 28, 2008.
....
18. In the agreement between defendant No.1 and defendant
No.2 and/or the Plaintiff, there exists a positive covenant
coupled with an implied negative which the defendant No.1 is
threatening to breach. This Hon‟ble Court ought to grant
injunction to perform the negative covenant. The implied
negative covenant is contained in letter dated 7.12.2007 from
defendant No.2 to defendant No.1 as under:-
The winning bidders of other packages are to be
retained as sub contractors without any alteration in
the agreed technical and financial aspects as already
finalized with the individual bidder.
Further in letter dated 7.12.2007 from defendant No.2 to
Plaintiff:-
You, as winning Bidder of Steam Generation Plant
Bid Tender No.TSFP-F/002/06/SG, will be retained as
sub-contractor to the main EPC Contractor without
any alteration in the agreed technical and
commercial aspects including the time schedule, as
already negotiated and finalized.
Further, in the joint meeting, inter alia, Plaintiff, defendant
No.1 and defendant No.2:-
All winning bidders were informed that as per the
directive from the Government of Ethiopia, the
managements of TSFP & FSF intend to appoint one
single EPC contractor and all other winner bidders
shall work as sub contractor to the proposed single
EPC contractor.
Contract agreement between EPC contractor and
winner bidder shall be seamless and address all
issues as per original tender documents including
GCC, SCC and other financial conditions.
The aforesaid clauses clearly stipulates that the defendant
No.1 is by way of an implied negative covenant not permitted
to modify and/or attempt to modify any agreed technical,
commercial including price aspects already finalized between
the plaintiff and defendant No.2.
18(A). That this Hon‟ble Court on 23.7.2008, passed an Order
that, "having regard to the facts of the case and taking the
consideration the documents placed on the record, till the
next date of hearing, the defendant No.1 shall not take any
measures to introduce a third party in respect of the tender
floated by defendant No.2 for Steam Generating Plant for
which the plaintiff has been accepted by the defendant No.2
as the successful bidder". The said order was duly served on
the defendant No.1 on 24.7.2008 and has also been served on
Defendant No.2. The defendant No.1 has filed its written
statement on 4.8.2008 wherein it has alleged in paragraph 1
of the Preliminary Objections that the defendant No.1 has
already singed a definite contract with defendant No.3 for
execution of the power project as a Sub-contractor for
construction of the steam generation plant for the Tendaho
Sugar Factory Project (purportedly just about 11 days before
the passing of the ex parte injunction order). Therefore, in
light of the said development, it has been alleged that the
said suit filed by the plaintiff has become infructuous. A copy
of the purported Sub-Contract Agreement between defendant
No.1 and the said defendant No.3 has been filed by the
defendant No.1
18(B). The said purported Sub-Contract Agreement is clearly
antedated and has been fabricated with a view to frustrate
the injunction order dated 23.7.2008 and/or to overreach the
Order dated 23.7.2008 passed by this Hon‟ble Court.
18(C). The first telltale sign is in the Written Statement itself
where in para 7, it has been alleged that a Memorandum of
Understanding (MOU) was signed between Defendant No.1
and defendant No.3 on 8th July, 2008 and thereafter, a
definite purported contract was signed on 12th July, 2008, i.e.
within 4 days of the MOU despite the MOU being valid for a
period of 30 days - seemingly, a tearing hurry indeed.
However, the Defendant No.1 proposed the name of
defendant No.3 to defendant No.2 long after 12th July 2008.
18(D). It is also relevant to note that in the alleged sub-
contract Agreement dated 12th July, 2008 filed by the
Defendant No.1, Defendants Nos.1 and 3 have purported to
create a definition of "contract documents" which includes
documents that have not yet been finalized but are only
„proposed‟. One of the documents forming part of Contract
document is "Minutes of Package Negotiations meeting
(proposed) to be held between Employer and Sub-Contractor
(WIL), for the Package Facilities on technical aspects".
Firstly, there cannot be a meeting or minutes of a meeting
which are qualified as "proposed". Secondly, there cannot be
minutes of a meeting which is yet "to be held". It is obvious
that the documents have been prepared in a hurry only to be
produced before this Hon‟ble Court with a view to mislead
this Hon‟ble Court and to frustrate and overreach the orders
of this Hon‟ble Court.
18(E). That even as late as on 5th August, 2008, in the
meeting between the Defendant No.1 and Defendant No.2,
there is no mention that a definite contract had been signed
with defendant No.3. In fact defendant No.1 informed
defendant No.2 that only negotiations were being conducted
with defendant No.3.
18(F). Further and in any event, the defendant No.2 has not
been shown to have ever authorized appointment of the said
defendant No.3 as a Sub-Contractor in substitution of the
plaintiff. This is apparent from the letter dated 30.6.2008
written by defendant No.2 to its Board of Management on
30.6.2008 alongwith the legal opinion and the opinion of the
consultant which clearly reveal that the minutes dated
19.6.2008 and 20.6.2008 and the letter dated 12.6.2008
sought to be relied upon by the defendant No.1 did not
constitute any approval of substituting the plaintiff as alleged
by the defendant No.1. The defendant No.1 is clearly
suppressing all material facts as the aforesaid documents are
within the knowledge of defendant No.1 who has chosen to
conceal the same from this Hon‟ble Court. Neither the
negotiations nor the minutes and/or any alleged MOU can be
given effect to in teeth of the order dated 23.7.2008 passed
by this Hon‟ble Court and the Defendant No.1 ought not to be
permitted to defeat the bonafide rights of the plaintiff and/or
overreach this Hon‟ble Court.
18(G) It is relevant to note that in a similar contract, which
relates to another Govt. of Ethiopia company known as Wonji
Shoa Sugar Factory, the Plaintiff had a bid for a Juice
Extraction Plant. The EPC Contractor in that case is one M/s.
Uttam Sucrotech International Pvt. Ltd. The said M/s. Uttam
Sucrotech International Pvt. Ltd. has signed a Sub-Contract
with the Plaintiff without making any demand for 15% of
contract price for discharge of its obligations as a lead
EPC/Contractor. It has now come to the knowledge of the
plaintiff that defendant No.1 was not even entitled to become
the EPC contractor and the defendant No.1 and 2 have
manipulated records to make defendant No.1 become the
EPC contractor who is demanding unreasonable and
absolutely uncalled for 15% of the contract price from
plaintiff and other similarly placed sub-contractors. That
defendant Nos.1, 2 and the said Walchandnagar Industries
Ltd. are acting in concert and are attempting to defeat the
order of this Hon‟ble Court and perpetrate a fraud which they
cannot be permitted to do.
18(H) In fact, defendant No.1 has itself subsequently filed a
letter dated 5th August, 2008 purportedly issued by defendant
No.2 permitting the defendant No.2 to substitute the plaintiff
(the authenticity of the said letter is denied). Clearly the said
letter dated 5th August, 2008 shows that there could be no
contract between defendant No.1 and the said defendant
No.3 prior thereto and further that defendant No.1 and 2
were acting in concert and in teeth of the order dated 23rd
July, 2008 passed by this Hon‟ble Court which is in force even
till date.
18(I). The attempt of Defendant No.1 of clandestinely
introducing the purported Sub-Contractor who did not even
participate in the tender, is not only contrary to the entire
tender process but is also malafide and an attempt to
overreach this Hon‟ble Court. Further, till date no
termination of Plaintiff‟s sub-contract has been
communicated.
18(J). The aforesaid facts clearly reveal that the purported
sub-contract Agreement dated 12rth July ,2008 which was
allegedly entered into within four days of signing the
Memorandum of understanding which was valid for 30 days is
clearly ante dates with a view to defeat the injunction order
passed by this Hon‟ble Court. The said purported sub-
contract Agreement cannot be permitted to be implemented
and be proceeded with and being in teeth of the order dated
23rd July, 2008 is void ab initio. Even the purported
permission dated 5th August, 2008 cannot be acted upon and
is void ab initio as defendant No.2 was also informed of the
order dated 23rd July, 2008.
18(K). As stated in the plaint, the defendant No.2 is
proceeding with modernization essentially financed by credit
line from the Exim Bank of India. The said Exim Bank of
India being State is bound to act fairly and not to act in
violation of the order of Hon‟ble Court. In any event, Exim
Bank of India being a banking institution has a duty of care
and cannot allow fraud to be perpetrated by defendant No.1
and/or 2 and cannot approve substitution of the plaintiff by
the said defendant No.3 contrary to the order of this Hon‟ble
Court.
18(L). That defendant Nos.1, 2 and 3 are acting in concert
and are attempting to defeat the order of this Hon‟ble Court
and perpetrate a fraud which they cannot be permitted to do.
Unamended Pleadings (Uttam Sucrotech International
Pvt. Ltd.)
7. That vide the letter dated 7.12.2007, the Defendant
No.2 also informed the Plaintiff in writing that as per the
requirement of Exim Bank‟s disbursement schedule it was
decided to proceed through a single EPC Contract method,
that is, any bidder who won two or more bid package
amongst the four major bids viz. Juice Extraction Plant,
Steam Generation Plant, Power Generation Plant and Process
House Plant will become eligible to act as „Single EPC
Contractor‟. Since, the Defendant No.1 won two bids, it was
appointed to act as „Single EPC Contractor‟. It was further
conveyed to the Plaintiff that the Plaintiff who was the
winning bidder of the Process House bid, would be retained
as sub-contractor to the EPC Contractor without any
alternation in the agreed technical and commercial aspects
including the time schedule already finalized. The relevant
excerpt of the said letter has been extracted hereunder for
ready reference:
You as winning Bidder of Process House Bid Tender
No.TSFP-F/007/07/PG, will be retained as sub-
contractor to the main EPC Contractor without any
alternation in the agreed technical and commercial
aspects including the time schedule, as per our bid
document and subsequent clarifications given by
our Consultant JPMA."
10. That therefore the Defendant No.1 clearly agreed to the
unanimous decision taken in the aforementioned meetings
dated 19th and 20th of December to the effect that the contract
shall be seamless and that the rights of the winning bidders
and their bid award prices shall be adequately protected in
the sub-contractor agreement. In view thereof, the
Defendant No.1, was under a legal obligation to finalize the
modus of implementing all the various packages (sub-
contracts) of the project along with his own award of
work/contract. The Defendant No.1 was further required to
do so at the earliest and on the same terms and conditions as
agreed to between the parties in the aforementioned
meetings.
11. That subsequently it was also revealed that on 20th
February, 2008 a contract was executed between the
Defendant No.2, Ehiopia on behalf of Government of Federal
Democratic Republic of Ehiopia and the Defendant No.1. In
the said agreement also it has been agreed that there shall be
a contract between the contractor and the sub contractor and
that the agreement shall be entered into without any
alternation in the agreed technical and commercial aspects of
the original tender documents including the price of the bids.
It is pertinent to mention herein that the Plaintiff has been
mentioned as a sub-contractor in Appendix 5 of the contract
dated 20th February, 2008.
12. That therefore in accordance with the procedure agreed
and settled on 19th December and 20th December, 2007 and
also in view of the directions of the Defendant No.2, a formal
seamless contract was required to be entered into between
the Plaintiff and the Defendant No.1 at the earliest, on the
same terms and conditions as those of the original tender
documents.
15. That the Plaintiff, vide their letter dated 26.3.2008
replied to the aforesaid letter dated 6.3.2008 issued by the
Defendant No.1 specifically stating that the demand of the
Defendant No.1 directing the plaintiff to discount its offer
price at least by 15%, is absolutely illegal and contrary to the
terms agreed between the parties including the Defendant
No.1,2 and the Plaintiff in the meetings dated 19th December
and 20th December, 2007.
Amended Pleadings (Uttam Sucrotech International
Pvt. Ltd.)
7(ii) Para 2 of the Plaint would stand amended as follows:
"That the Defendant No.1 is a company incorporated
under the Companies Act, 1956 having its registered office at
1205, Surya Kiran Building, 19, Kasturba Gandhi Marg, New
Delhi-110001. The Defendant No.2 is a company
incorporated under the laws of Ethiopia having its principal
office at Addis Ababa and is owned and/or controlled by the
Government of Federal Democratic Republic of Ethiopia. The
Defendant No.3 is a company incorporated under the
Companies Act, and having its registered office at 3
Walchand Terracesopp Air Conditioned Market, Tardeo,
Mumbai, Maharashtra-40034 and branch office at 201, Milap
Niketan (2nd Floor) 8-A, Bahadur Shah Zafar Marg, New
Delhi: 110002. That the Defendant No.4 is the Exim Bank
having its registered office at Centre One Building, Floor 21,
World Trade Centre Complex, Cuffe Parade, Mumbai.
(ii) After para 7 the following para needs to be added:
Para 7A:- As is evident from the internal letter dated
3.12.2007 issued by TSFP to TSFP Management Board Addis
Ababa, Defendant No.1 had been trying to defeat the rights of
the plaintiff at very stage so as to oust the plaintiff from the
subject project completely. The said letter clearly reveals
that apart from the Process House Package which was
allotted to the Plaintiff, vide Defendant No.2‟s letter dated
7.12.2007, the Plaintiff was also the lowest bidder in the
Power Generation Plant which also ought to have been
awarded to the plaintiff. So plaintiff was awarded both the
Process House and Power Generation plant bid and was
eligible to be appointed as a EPC Contractor. However,
strangely, just about 4 days later i.e. on 7.12.2007, facts and
records were illegally pruned to a large extent and the
Plaintiff was declared winning bidder only in the Process
House Package and not in the Power Generation Package.
(iv) Para 10 of the plaint would be amended as under:-
"That therefore the Defendant No.1 clearly agreed to
the unanimous decision taken in the aforementioned
meetings dated 19th and 20th of December to the effect that
the contract shall be seamless and that the rights of the
winning bidders and their bid award prices shall be
adequately protected in the sub-contractor agreement. In
view thereof, the Defendant No.1, was under a legal
obligation to finalize the modus of implementing all the
various packages (sub-contracts) of the project alongwith his
own award of work/contract. The Defendant No.1 was
further required to do so at the earliest and on the same
terms and conditions as agreed to between the parties to the
said meetings inter alia the Plaintiff. Defendant No.1 and the
Defendant No.2 in the aforementioned meetings. Further an
agreement dated 10.1.2008 was entered into between the
Defendant No.1 and Defendant No.2, wherein the name of the
Plaintiff was clearly mentioned as a sub contractor albeit only
for Process House Package. The said Contract contains
Technical Bid Commitments and Tender Bid Prices, which
have been clearly conducted between the Plaintiff and the
Defendant No.2, and which form an integral part of the said
Contract between the Defendant No.1 and Defendant No.2.
In fact, in the Process House Packages technical and
commercial annexures, it is clearly stated that these are as
submitted by USIPL (short for Uttam Sucrotech International
Private Limited) and form an integral part of the contract. In
the said contract it had been specifically agreed that there
shall be a contract between the contractor and the sub
contractor and that the agreement shall be entered into
without any alteration in the agreed technical and
commercial aspects of the original tender documents
including the price of the bids. It has been alleged that the
terms of the said Agreement dated 10.1.2008 were changed
without the consent of the Plaintiff vide an Addendum No.1
dated 21.2.2008. Therefore, without prejudice, the mother
contract of 10.1.08 could not have been altered vide any
addendum as alleged, without involving the Plaintiff and
obtaining its consent, and any such addendum subsequently
altering the terms and conditions of the said agreement is
illegal, null and void."
(v) Para 11 of the Plaint would be amended as under:-
"That subsequently it was also revealed that on 20th
February, 2008 a contract was executed between the
Defendant No.2, Ethiopia on behalf of Government of Federal
Democratic Republic of Ethiopia and the Defendant No.1. In
the said agreement also it has been agreed that there shall be
a contract between the contractor and the sub contractor and
that the agreement shall be entered into without any
alteration in the agreed technical and commercial aspects of
the original tender documents including the price of the bids.
(vi) Para 12
That therefore in accordance with the procedure agreed
and settled on 19th December and 20th December, 2007 and
also in view of the directions of the Defendant no.2, a formal
seamless contract was required to be entered into between
the Plaintiff and the Defendant No.1 at the earliest, on the
same terms and conditions as those of the original tender
documents. It is further pertinent to mention herein that a
binding contract had already come into existence between
the Defendant No.2 and the Plaintiff vide the letter dated
7.12.2007 which was preceded by detailed technical and
commercial meetings between Defendant No.2 and Plaintiff
and also the contract dated 10.1.2008 on the same terms and
conditions as per the original bid documents on the basis of
which the Plaintiff had prepared and put in its bid.
Therefore, no alterations whatsoever could have been made
in the same.
(v) para 15
"That the Plaintiff, vide their letter dated 26.3.2008
replied to the aforesaid letter dated 6.3.208 issued by the
Defendant No.1 specifically stating that the demand of the
Defendant No.1 directing the Plaintiff to discount its offer
price at least by 15%, is absolutely illegal and contrary to the
terms agreed between the parties including the Defendant
No.1,2 and the Plaintiff in the meetings dated 19th December
and 20th December, 2007 and also vide the letter dated
7.12.2007, which created a formal concluded and binding
contract between the Plaintiff and the Defendant No.2 in
terms of the instruction to Bidders issued along with the
tender documents.
(ii) After para 16
Para 16A- The defendant No.2 is also acting malafide and is
acting in concert with other defendants to perpetrate a fraud
on the plaintiff and defeat and disobey the orders of this
Hon‟ble Court.
(iii) Para 17
"That even, the draft of agreement received from the
Defendant No.1 by the Plaintiff on 16.4.2008, failed to
consider the submissions made by the Plaintiff. The said
draft was contrary to the agreement arrived at in the Joint
Session Meeting held on 19th & 20th December, 2007, and the
same was pointed out to the Defendant No.1 by the Plaintiff.
The Defendant No.1, most significantly, attempted to
renegotiate the contract price to be able to receive a part
thereof for discharging its obligation of a lead contractor.
Not only the renegotiation of price was contrary to the
mandate of Defendant No.2 and the agreement between the
Plaintiff and the Sugar Factory Project as well as the minutes
of 19th and 20th December, 2007, and also the letter dated
7.12.2007 but also the Defendant No.1 is stopped from
claiming any moneys from the Plaintiff to discharge his own
obligations to the Defendant No.2 as a lead contractor after
having accepted the said contract/duty without recourse to
additional consideration from the Plaintiff expressly and/or by
conduct."
17. That even, the draft of agreement received from the
Defendant No.1 by the Plaintiff on 16.4.2008, failed to
consider the submissions made by the Plaintiff. The said draft
was contrary to the agreement arrived at in the Joint Session
Meeting held on 19th & 20th December, 2007, and the same
was pointed out to the Defendant No.1 by the Plaintiff. The
Defendant No.1, most significantly, attempted to renegotiate
the contract price to be able to receive a part thereof for
discharging its obligation of a lead contractor. Not only the
renegotiation of price was contrary to the mandate of
Defendant No.2 and the agreement between the Plaintiff and
the Sugar Factory Project as well as the minutes of 19th & 20th
December, 2007, but also the Defendant No.1 is stopped from
claiming any moneys from the Plaintiff to discharge his own
obligations to the Defendant No.2 as a lead contractor after
having accepted the said contract/duty without recourse to
additional consideration from the Plaintiff expressly and/or by
conduct.
The Plaintiff submits that there is already a concluded
contract between the Defendant No.2 and the Plaintiff and
the Defendant No.1 cannot renegotiate the terms thereof. In
any event, the Defendant No.1‟s consideration for managing
the entire project as a lead contractor must necessarily be
included in his consideration of the contract with Defendant
No.2 and defendant No.1 cannot insist on consideration from
the Plaintiff as execution of a contract between the Plaintiff
and the Defendant No.1 is a mere formality for due
implementation of a project and/or a condition imposed by
the Defendant No.2 which has been accepted by the
Defendant No.1 without any protest or demur. Further and/or
in any event, the consideration received by Defendant No.1
from Defendant No.2 includes the discharge of obligation by
Defendant No.1 as a lead contractor. Without prejudice, it is
further submitted that the same is a matter between the
Defendant No.1 and the Defendant No.2 and the Plaintiff is
neither involved nor concerned with it, however, the same
cannot be allowed to prejudicially affect the Plaintiff. The
Defendant No.1 is estopped from claiming to the contrary.
The Defendant No.1 is attempting to jeopardize the
agreement between the plaintiff and the said Defendant No.2
and cause irreparable loss including loss of reputation of the
Plaintiff. The Defendant No.1 is attempting to interfere in the
implementation and/or performance of the contract between
the Plaintiff and the Defendant No.2 tortuously by attempting
to deliberately induce a third party instead, which the
Defendant No.1 is not entitled to do. The Defendant No.1 is
bound and liable to give effect to the concluded contract
between the Plaintiff and Defendant No.2 and sign the formal
contract between the Plaintiff and Defendant No.1 in regard
thereto. The Plaintiff has spent huge amount of monies and
manpower time in preparation of discharge of its obligations
including more than 25 man-visits by Senior Officers to
Ethiopia at exorbitant cost. The Defendant No.1 cannot
jeopardize the interest of the Plaintiff. It is further submitted
that if the Defendant No.1 is allowed to proceed in its
malafide intentions it would not only be illegal, it would also
render the plaintiff without any remedy whatsoever for the
colossal losses that would be caused to it.
20A. In the agreement between defendant No.1 and
defendant No.2 and/or the Plaintiff, there exists a positive
covenant coupled with an implied negative which the
defendant No.1 is threatening to breach. This Hon‟ble Court
ought to grant injunction to perform the negative covenant.
The implied negative covenant is contained in letter dated
7.12.2007 from defendant No.2 to defendant No.1 as under:-
The winning bidders of other packages are to be
retained as sub contractors without any alteration in
the agreed technical and financial aspects as already
finalized with the individual bidder.
Further in letter dated 7.12.2007 from defendant No.2 to
Plaintiff:-
You, as winning Bidder of Steam Generation Plant
Bid Tender No.TSFP-F/002/06/SG, will be retained as
sub-contractor to the main EPC Contractor without
any alteration in the agreed technical and
commercial aspects including the time schedule, as
already negotiated and finalized.
Further it is evident from the joint meeting, inter alia,
Plaintiff, defendant No.1 and defendant No.2:-
All winning bidders were informed that as per the
directive from the Government of Ethiopia, the
managements of TSFP & FSF intend to appoint one
single EPC contractor and all other winner bidders
shall work as sub contractor to the proposed single
EPC contractor.
Contract agreement between EPC contractor and
winner bidder shall be seamless and address all
issues as per original tender documents including
GCC, SCC and other financial conditions.
The aforesaid clauses clearly stipulates that the defendant
No.1 is by way of an implied negative covenant not permitted
to modify and/or attempt to modify any agreed technical,
commercial including price aspects already finalized between
the plaintiff and defendant No.2.
20B. That the purported MOU dated 8th July 2008 and the
sub-contract Agreement of 12 July 2008 between Defendant
No.1 and Walchandnagar Industries are clearly antedated
and have been fabricated with a view to frustrate and/or to
overreach the injunction Order dated 30.7.2008 passed by
this Hon‟ble Court.
20C. That in the Written Statement filed by the Defendant
No.1 it has been alleged that a Memorandum of
Understanding (MOU) was signed between Defendant No.1
and Walchandnagar Industries Ltd. on 8th July, 2008 and
thereafter, a definite purported contract was signed on 12th
July, 2008, i.e. within 4 days of the MOU despite the MOU
being valid for a period of 30 days, and not withstanding that
the Defendant No.1 proposed the name of defendant No.3 to
defendant No.2 long after 12th July 2008.
20D. The alleged sub-Contract Agreement dated 12th July,
2008 filed by Defendant No.1, Defendants Nos.1 and 3 have
purported to create a definition of "contract documents"
which includes documents that have yet not been finalized
but are only „proposed‟. One of the documents forming part of
Contract document is "Minutes of Package Negotiations
meeting (proposed) to be held between Employer and Sub-
contractor (WIL), for the Package Facilities on technical
aspects". Firstly, there cannot be a meeting or minutes of a
meeting which are qualified as "proposed". Secondly, there
cannot be minutes of a meeting which is yet "to be held". It is
obvious that the documents have been prepared in a hurry
only to be produced before this Hon‟ble Court with a view to
mislead this Hon‟ble Court and to frustrate and overreach the
orders of this Hon‟ble Court.
20(E). In fact, defendant No.1 has itself subsequently filed a
letter dated 5th August, 2008 purportedly issued by defendant
No.2 permitting the defendant No.2 to substitute the
plaintiff(though the authenticity of the said letter is denied).
The said letter clearly reveals that even as late as on 5th
August, 2008, in the meeting between the Defendant No.1
and Defendant No.2, there is no mention that a definite
contract had been signed with Walchandnagar Industries Ltd.
In fact defendant No.1 informed defendant No.2 that only
negotiations were being conducted with Walchandnagar
Industries Ltd.
20(F). That the contents and tenor of the letter dated
5.8.2008 issued by the Defendant No.2 to the Defendant No.1
clearly substantiates the fact that the alleged MOU dated
8.7.2008 and also the alleged sub contract agreement dated
12.7.2008 have been fabricated and antedated with the
malafide intention. The letter dated 5.8.2008 specifically
states that it was only in a joint meeting dated 10.7.2008 held
under the Chairmanship of the Minister of Trade, that it was
decided to consider substitute Sub-contractor proposed by
OIA. The letter clearly states thus:-
We refer to the joint meeting dated July 10, 2008
held under the Chairmanship of His Excellency the
Minister of Trade and Industry, where by it was
decided to consider substitute Sub-
Contractors/Consortium Partners proposed by OIA
and conduct technical evaluation of substitute offers
for the subject packages.
However, as stated by the Defendant No.1themselves in their
written statement, they had entered into an MOU on 8.7.2008
(which is even two days prior to the proposed decision to
substitute which was only taken on 10.7.2008). It is submitted
that the decision to consider substitute Sub-
Contractors/Consortium Partners was taken only on
10.7.2008 and thus there could have been no MOU on
8.7.2008 between the Defendant No.1 and WIL inasmuch as
the Defendant No.1 had no authority to enter into any
agreement with WIL prior to the alleged approval of
Defendant No.2 for changing the sub-contractor. Therefore,
this clearly reveals that the alleged MOU was illegal and void
ab initio.
20G. That, the letter dated 5.8.2008 further states as under:
In line with the above, TSFP has given original bid
documents and invited OIA to submit substitute
technical offers for the subject packages on July 11,
2008. Substitute offers were opened in the presence
of Tender committee of TSFP, Consultant‟s and
Bidder‟s representatives on July 18, 2008.
Strangely, Defendant No.2 gave the original bid
documents and invited/directed the Defendant No.1
to submit substitute technical officers for the
packages on 11.07.2008 i.e. just one day after the
Defendant No.2 decided to consider substitute sub-
contractors.
20(H) The letter further states thus:
TSFP is pleased to inform you that our top
management has hereby accepted your substitute
technical offer dated 18th July 2008 for above
packages with Walchandnagar Industries Ltd. (WIL)
as Sub-Contractor abiding to technical specifications
given in or bid documents and minutes of technical
negotiation meeting held on August 4 and 5 2008, for
turnkey supply, erection and commissioning with
manpower training for both phase I and II of the
project.
As stated above the sub-contractor agreement was allegedly
executed on 12.7.2008. The technical offer allegedly accepted
only on 5.8.2008. Glaring infirmities and illegalities in the
alleged agreement dated 12.7.2008 and further highlighted
by the fact that the offers of WIL bidding as OIA‟s sub-
contractor was opened and accepted by the Defendant No.2
only on 5.8.2008, so how could a contract between Defendant
No.1 and WIL (defendant No.3) as contractor and sub
contractor can claimed to have been entered into on
12.7.2008 which is completely arbitrary and devoid of any
merits. This clearly demonstrates that the Defendant No.1
has filed a false affidavit and has committed an act of perjury.
This further reveals the glaring infirmities and illegalities in
the alleged sub contractor agreement dated 12.7.2008.
20I. Furthermore, the contract dated 12.7.2008 is not only
antedated, it is void inasmuch as it fraught with false and
misleading contents, which is clearly evident from Clause 4 of
the said agreement, which provides as under:-
Article 4 Technical Conditions
The technical aspects of the project as already
agreed between the Employer and the Sub-
contractor shall not be altered and shall be adhered
to by the Sub-contractor.
The said clause portrays as if the technical aspects had
already been agreed upon prior to 12.7.2008, whereas
allegedly the technical aspects of the project was agreed only
allegedly vide the Letter dated 5.8.2008. This fact clearly
demonstrates that the said sub-contract was antedated
inasmuch as on 12.7.2008, the technical aspects of the
project between the Employer and the sub-contractor qua the
project in question was never accepted.
20J. That even as late as on 4th or the 5th August, 2008, in the
meeting between the Defendant No.1 and Defendant No.2,
there is no mention that a definite agreement had been
signed with Walchandnagar Industries Ltd. In fact the letter
dated 5.8.2008 clearly states that the technical negotiation
meetings were held on August 4 and 5, 2008 with OIA-WIL
experts. It is further revealed from the minutes of the tender
committee meeting dated 5.8.2008, that on 5.8.2008, the
evaluation report submitted by the consultants was
forwarded to the General Manager for approval of substitute
offers of Defendant No.1 - Defendant No.3. Therefore, there
is no way in which a definite contract could have been
entered into with WIL. And even if assuming but not
admitting that a contract was entered into between OIA and
WIL such a contract prior to 5.8.2008, would be illegal, null
and void in the eyes of law.
20K. The minutes of the tender committee meeting dated
5.8.2008 further record as follows:
e) Detailed technical & commercial negotiations
were held thoroughly between OIA-WIL, TSFP
technical committee members and consultants team
regarding the deviations specified in the tender
documents by OIA.
Therefore, this clearly reveals that the Defendant No.1 has
been deliberately violating the stay order dated 30.7.2008
passed by this Hon‟ble Court and in complete violation of the
same has been taking active measures to substitute
Defendant No.3 instead of the Plaintiff. It is further pertinent
to mention herein that the Defendants actively participated in
the technical negotiations meeting held on 4.8.08 and the
minutes of the said meeting clearly bears the signatures of
the representatives of the Defendant No.1 and the stamp of
the Defendant No.1.
20L. That assuming but not conceding the alleged sub-
contract agreement dated 12.07.2008, as per its own terms
and conditions could not become effective without approval
from the employer, which was allegedly granted only on
5.8.2008. The said approval on the face of it is Nullis juris and
in the teeth of the injunction operating.
20M. That Article 3 of the alleged agreement dated 12.7.2008
clearly demonstrates that the same has been ante-dated. In
fact, the said agreement has not become effective even today
and hence has no legal validity. Article 3 has been extracted
hereunder to illustrate the point further:
Article 3 Effective Date
The subcontract Agreement shall become effective
when all of the following conditions are fulfilled to
the satisfaction of the EPC Contractor:
a) This Contract Agreement has been duly and validly
executed by both parties and a duly authorized
counter copy is exchanged between the parties
hereto.
b) The subcontractor has submitted to the Employer
(through the EPC Contractor) the Performance
Security and the Advance Payment Guarantee as
specified in Appendix 9-10 attached herein for the
value defined in SCC and GCC;
c) The EPC contractor has paid 10% of the Contract
value to the Sub contractor as the advance payment
d) Technical and commercial approval of WIL by the
Employer.
It is submitted that Sub-Clause (b), (c) and (d) of the said
Article 3 is yet to be fulfilled till date inasmuch as inter alia
the performance security and the advance payment as
stipulated under the Agreement has not been made and
neither have the technical and commercial approvals as
required been granted. It is submitted that the alleged
technical approval as required under the clause was granted
if at all, only 5.8.2008 and not before and the same was in
blatant disregard and violation of the order dated 30.7.2008
passed by this Hon‟ble Court. No commercial approval of the
appropriate value was granted. No payment has been made
by the Defendant No.2 to WIL.
20N. Furthermore, despite being specifically restrained by
this Hon‟ble Court, the Defendant No.1, in furtherance of its
malafide intention of appointing M/s. Walchandnagar
Industries Ltd., deliberately violated the said Order and
attended the technical negotiation meetings on 4th and 5th
August, 2008. The Minutes of the meeting dated 4.8.2008
bears the signatures of representatives of the Defendant No.1
and the Delhi office stamp of the Defendant No.1. Therefore,
the alleged technical approval dated 5.8.2008 being in clear
disregard to the Order passed by this Hon‟ble Court is illegal
and bad in law, which consequently also implies that another
essential criteria stipulated under Article 3(d) of the
agreement dated 12.7.2008 also has not been fulfilled.
20O. That further, assuming but not conceding that the
alleged contract dated 12.7.2008 had been entered into, and
the approval was granted on 5.8.2008, yet the said contract is
invalid and null and void in the eyes of law. It is submitted
that the alleged approval dated 5.8.2008 clearly states that
the prices for the substitute packages shall be as per the
main contract dated 10th January 2008 executed between
Defendant No.2 and Defendant No.1, which is admittedly US$
65 million, however, under the said agreement dated
12.7.2008 it has been specifically provided under Clause 2.1
as only 2.1 million. Therefore, there are huge discrepancies
and contradictions between the terms of the approval and the
contract dated 12.7.2008 and it is not known as to where
would these monies which are actually public Indian funds be
used for is not known.
20P. That clearly the said letter dated 5th August, issued by
defendant No.2 permitting the defendant No.2 to substitute
the plaintiff shows that there could be no contract between
defendant No.1 and the said Walchandnagar Industries Ltd.
prior thereto and further that defendant No.1 and 2 were
acting in concert and were completely aware of the order
dated 30th July, 2008 passed by this Hon‟ble Court which is in
force even till date.
20Q. Further, and in any event, the defendant No.2 has not
been shown to have ever authorized till end June/July 2008,
appointment of the said Walchandnagar Industries Ltd. as a
Sub-Contractor in substitution of the plaintiff. This is also
apparent from the letter dated 30.6.2008 written by
defendant No.2 to its Board of Management on 30.6.2008
which clearly reveal that the minutes dated 19.6.2008 and
20.6.2008 and the letter dated 16.6.2008 sought to be relied
upon by the defendant No.1 did not constitute any approval of
substituting the plaintiff as alleged by the defendant No.1.
The defendant No.1 is clearly suppressing all material facts
as the aforesaid documents are within the knowledge of
defendant No.1 who has chosen to conceal the same from this
Hon‟ble Court. Assuming without conceding, neither the
negotiations nor the minutes and/or any alleged MOU could
have been entered into or be given effect to in view of clear
restraint imposed by the order dated 30.7.2008 passed by
this Hon‟ble Court and the Defendant No.1 ought not to be
permitted to defeat the bonafide rights of the plaintiff and/or
overreach this Hon‟ble Court.
20R. The Petitioner recently discovered that a consortium
Agreement dated 16.7.2008 was entered into between the
Defendant No.1 and Defendant No.3, wherein it was agreed
that the parties would enter into a definitive transaction
agreement subsequently. The relevant clause of the said
Consortium Agreement has been extracted hereunder:
3) The parties shall enter into a "definitive
transaction agreement" on being qualified by the
Employer. The "definitive transaction agreement"
shall include all terms and conditions to implement
the packages including the payment mechanisms.
Therefore, a bare perusal of the said Consortium agreement
clearly reveals that prior to 16.7.2008 no agreement had
come into existence and in fact a subsequent agreement had
to be entered into, which never happened. In fact, the
agreement dated 16.7.2008 has actually been notarized on
28.7.2008, which is the date on which it becomes effective.
The consortium agreement further reveals that till 28.7.2008
no price had been agreed to between the parties, whereas in
the alleged contract dated 12.7.2008, the price has been
specified under clause 2.1 and 2.2 therein.
20S. That in furtherance of their illegal designs and malafide
intentions Defendants No.1 and 2 on 15.9.2008 made
amendment in the contract agreement dated 10.1.2008
allegedly entered into inter-se in an attempt to oust the
plaintiff from the entire project. The name of the Plaintiff has
been allegedly substituted by joint names of Defendant No.1
and Defendant No.3. In the garb of Defendant No.3, it is
Defendant No.1 who has attempted to substitute the plaintiff.
20T. It is relevant to note that in a similar contract, which
relates to another Govt. of Ethiopia company known as Wonji
Shoa Sugar Factory, where the Plaintiff has been appointed
as the EPC Contractor, it has entered into contracts with the
sub-contractors without making any demand for 15% of
contract price for discharge of its obligations as a lead
EPC/Contractor.
It has subsequently now come to the knowledge of the
plaintiff that defendant No.1 was not even entitled to become
the EPC contractor and the defendant No.1 and 2 have
manipulated records to make defendant No.1 become the
EPC contractor who is demanding unreasonable and
absolutely uncalled for 15% of the contract price from
plaintiff and other similarly placed sub-contractors. It is
further submitted that defendant Nos.1, 2 and the said
Walchandnagar Industries Ltd. are acting in concert and are
attempting to defeat the order of this Hon‟ble Court and
perpetrate a fraud which they cannot be permitted to do.
20U. The attempt of Defendant No.1 of clandestinely
introducing the purported Sub-Contractor who did not even
participate in the tender, is not only contrary to the entire
tender process but is also malafide and an attempt to
overreach the orders passed by this Hon‟ble Court. Further,
till date no termination of Plaintiff‟s sub-contract has even
been communicated.
20V. The aforesaid facts clearly reveal that the purported
sub-contract Agreement dated 12th July, 2008 which was
allegedly entered into within four days of signing the
Memorandum of Understanding which was valid for 30 days
is clearly ante dated with a view to defeat the injunction
order passed by this Hon‟ble Court. The said purported sub-
contract Agreement cannot be permitted to be implemented
and be proceeded with and being in complete violation of the
order dated 30th July, 2008 is void ab initio. Even the
purported permission dated 5th August, 2008 cannot be acted
upon and is void ab initio as defendant No.2 was also
informed of the order dated 30th July, 2008.
20W. That defendant Nos. 1, 2 and 3 are acting in concert
and are attempting to overreach the issues pending before
this Hon‟ble Court and perpetrate a fraud which they cannot
be permitted to do.
14. The original Plaint may not have contained their name
yet the cause of action, as pleaded therein, categorically
expresses concerns of the contesting defendant introducing a
third party to the subject contracts to the detriment of the
Plaintiffs‟ interests. It is Walchandnagar Industries Ltd. which
is that very third party. This subsequence of events has come
into the limelight because of pleadings in the Written
Statement. Keeping the nature of the transactions in mind, it
is difficult at this stage to come to a firm conclusion that the
Plaintiff was aware of the role of Walchandnagar Industries
Ltd. at the time when the Plaint was filed. We can conceive of
no reason for the Plaintiff not to implead Walchandnagar
Industries Ltd. had it been aware of the grant or the
impending and likely grant of the contract to Walchandnagar
Industries Ltd. vice the Plaintiffs. The original reliefs are for
mandatory injunction, that is, restraining OIA from
orchestrating events with the objective that the Plaintiffs are
substituted by a third party, which in the sequence of events
is Walchandnagar Industries Ltd. Learned counsel for the
Appellants/Defendants have voiced the view that the cause of
action and nature of Suit has changed by inclusion of the new
amendments. We are unable to find even an iota of substance
in this submission. The Plaintiffs have based their Suit on the
tort of interference allegedly committed by OIA by interfering
with their contract with TENDAHO and illegally conspiring to
replace them with another party who, as per the Written
Statement filed by Defendant No.1, is Walchandnagar
Industries Ltd. Black‟s Law Dictionary defines „tortious
interference with contractual relations‟ as a third party‟s
intentional inducement of a contracting party to break a
contract, causing damage to the relationship between the
contracting parties. As soon as opposition to the proposed
amendments stands withdrawn, the argument that the nature
of the Suit has been transformed pales into significance. The
case before us is not one where the sequence of events and
additional pleas are barred from adjudication for any reason.
A fresh suit could always have been filed. Therefore, upon a
concession having been made, there can be no conceivable
reason for the Court to decline leave to amend the plaint.
15. A reading of Order VI Rule 17 of the CPC reveals that,
even without any motion having been filed by the Plaintiff, it
is more than just arguable that the Court ought to have suo
moto impleaded Walchandnagar Industries Ltd. since its
presence is undeniably necessary for determining the real
question in controversy between the parties. This is especially
so since the Plaintiff has pleaded that the contract with
Walchandnagar Industries Ltd. has been predated and that
they are the co-conspirators and beneficiaries of the alleged
tort.
16. Learned counsel for the Appellants have also submitted
that the relief is essentially in the nature of specific
performance of a contract and such a relief cannot be granted
in the form of mandatory injunction. This is altogether a
different aspect of the case, not related in any wise with the
conundrum of whether the amendments should be permitted.
It would not be judicious to allow an unrelated aspect of the
case to influence the decision on another aspect or nuance of
the lis.
17. The Appellants assert that they had not given their
consent vis-à-vis introduction of the additional prayers which
stand introduced because of permitting the amendments. It is
argued that Defendant No.1 had only conceded to
amendment of some of the pleadings but had seriously
contested the inclusion of new prayers. It is argued that the
learned Single Judge erred in allowing the amendments in the
prayers as well, taking it as a fait accompli to the
amendments in the pleadings, though it amounts to altering
the entire complexion of the suit. In our opinion, however, the
amendments in prayer clause would follow as a natural and
essential consequence to the amendments in the Plaint. This
is vital for a holistic determination of the dispute; it shall be
allowed so as to avoid multiplicity of litigation amongst the
parties. The details pertaining to Walchandnagar Industries
Ltd. exist in the Plaint itself and it becomes obvious that the
grant of an injunction against OIA is most certainly likely to
affect Walchandnagar Industries Ltd., it would be a travesty
of justice if the litigations were to continue without giving
Walchandnagar Industries Ltd. complete opportunity to
present its defence. The Plaintiffs had prayed for various ad
interim reliefs which would have had the effect of bringing
the progress of the Project to a grinding halt. As we see it,
this is the reason why both OIA as well as Walchandnagar
Industries Ltd. are objecting even to its impleadment.
Another attractive argument made by the Appellants to
impugn the amendment is based on Order VII Rule 7 of the
CPC which requires the Plaintiff to specifically state the
reliefs claimed by him in the Plaint. It is argued that by an
amendment the Plaintiff may claim new Reliefs which arise
from the same cause of action and not on new facts and cause
of action. A distinction is thereby sought to be made between
qualitative changes and quantitative changes. Addition of new
facts along with new Prayers is said to be a qualitative
change. We are of the opinion that a new Prayer added on
the strength of some new averments added by amendments
will not qualitatively alter the suit in every case. Where an
amendment prayer is sought to be added on the basis of facts
which are intricately attached to the original cause of action
and either happens subsequently or comes to the knowledge
subsequently, such an amendment cannot be said to
substantially alter the nature of the Suit, it would be allowed
if no prejudice is caused to the other party and the Plaintiff is
not barred from filing a fresh suit for these reliefs. Our
conclusion, therefore, is that amendment to the prayers is
essential and unavoidable and the impugned decision must
unequivocally be upheld.
18. The prayers, as they stood in the original Suit Nos.
CS(OS) No.1368/2008 and 1447/2008 and as they are after
the amendments were allowed by the impugned Order, are
reproduced for ease of reference:-
Prayers in Original Suit
a) Grant a decree of perpetual injunction restraining the
Defendant No.1 from interfering in the contract/award
of contract between Plaintiff and Defendant No.2.
b) Grant perpetual injunction restraining the defendant
No.1 from modifying any technical and/or commercial
terms including price agreed/finalized between the
Plaintiff and the Defendant No.2.
c) Grant perpetual injunction restraining the defendant
No.1 from engaging any third party in respect of the
Process House Project.
d) Grant a decree of mandatory injunction directing
defendant no.1 to execute the obligation of signing a
formal contract with the plaintiff in accordance with the
terms and conditions agreed between the plaintiff and
defendant no.2 contained in letter dated 7.12.2007.
e) Costs; and
f) Pass such further order as this Hon‟ble Court may deem
fit and proper in the facts and circumstances of the
case.
Prayers in amended Suit
a) Grant a decree of perpetual injunction restraining the
Defendant No.1 and Defendant No.3 from interfering in
the contract/award of contract between plaintiff and
Defendant No.2 as contained in letter dated 7th
December 2007 including appointing/engaging any
third party in respect of the Process House Project.
b) Grant perpetual injunction restraining the Defendant
No.1 from committing a breach of the negative
covenant enumerated in Para 20A above and restrain
the defendant No.1 from modifying any technical and/or
commercial terms including price agreed/finalized
between the Plaintiff and the Defendant No.2.
c) Grant a decree of mandatory injunction directing
defendant No.1 to execute the obligation of signing a
formal contract with the plaintiff in accordance with
terms and conditions agreed between the plaintiff and
defendant no.2 contained in letter dated 7th December
2007.
d) Grant perpetual injunction restraining the defendant
no.1 from modifying any technical and/or commercial
terms including price agreed/finalized between the
plaintiff and defendant no.2.
e) Grant a decree of declaration that the purported sub-
contract Agreement dated 12th July, 2008 between
defendant No.1 and defendant No.3 is invalid and void
ab initio.
f) Declare that the alleged consortium agreement dated
16.7.08 entered into between the Defendant No.1 and
Defendant No.3 is illegal and void ab initio and cancel
the said Consortium Agreement dated 16.7.2008.
g) Declare that the addendum No.1 dated 21.2.2008 to the
Agreement dated 10.1.2008 is illegal void ab initio and
cancel the said addendum No.1 dated 21.2.2008 to the
Agreement dated 10.1.2008.
h) Declare that the amendment dated 15.9.2008 to the
agreement dated 10.1.2008 is illegal and void ab initio
and cancel the said amendment dated 15.9.2008 to the
agreement dated 10.1.2008.
i) Grant a decree to the perpetual injunction restraining
the defendant No.1 and 2 from taking any steps in
furtherance of the amendment dated 15.9.2008 illegally
made to the contract agreement dated 10.1.2008
allegedly entered into between defendant no.1 and
defendant no.2 or crating any right in favour of
defendant no.3.
j) Grant a decree of perpetual injunction restraining
defendant No.1, 2 and 3 from proceeding with and/or
acting upon in any manner whatsoever on the purported
sub-contract Agreement dated 12th July, 2008; or on any
subsequent date.
k) Grant a decree of declaration that the purported
permission granted vide letter dated 5.8.2008 issued by
defendant no.2 to defendant no.1 is invalid and/or void
ab initio and cancel the said permission dated 5.8.2008.
l) Declare that the amendment dated 15.9.2008 to the
agreement dated 10.1.2008 is illegal and void ab initio
and cancel the said amendment dated 15.9.2008 to the
agreement dated 10.1.2008.
m) Grant a decree of permanent injunction restraining
defendant no.1, 2 and 3 from taking any action pursuant
to the purported letter dated 5.8.2008.
n) Grant a decree of mandatory injunction directing the
defendant no.1 and 2 to undo the contemptuous and
illegal acts done and status quo ante as on 30.7.2008 be
restored.
o) Grant a decree of perpetual injunction restraining
defendant no.4 from disbursing any funds in the line of
credit opened by it from the Government of Ethiopia.
p) Costs; and
q) Pass such further order/s as this Hon‟ble Court may
deem fit and proper in the facts and circumstances of this
case.
Unamended prayers (Uttam Sucrotech International
Pvt. Ltd.)
(a) grant a decree of perpetual injunction restraining the
Defendant No.1 from interfering in the contract/award of
contract between Plaintiff and Defendant No.2.
(b) grant perpetual injunction restraining the defendant No.1
from modifying any technical and/or commercial terms
including price agreed/finalized between the Plaintiff and the
defendant No.2.
(c) grant perpetual injunction restraining the defendant No.1
from engaging any third party in respect of the Process
House project.
(d) grant a decree of mandatory injunction directing
Defendant No.1 to execute the obligation of signing a formal
contract with the Plaintiff in accordance with the terms and
conditions agreed between the Plaintiff and Defendant No.2
contained in letter dated 7.12.2007.
(e) costs; and
(f) pass such further order as this Hon‟ble Court may deem fit
and proper in the facts and circumstances of the case.
Amended Prayers (Uttam Sucrotech International Pvt.
Ltd.)
(a) grant a decree of perpetual injunction restraining the
Defendant No.1 and Defendant No.3 from interfering in the
contract/award of contract between Plaintiff and Defendant
No.2 as contained in letter dated 7th December 2007
including appointing/engaging any third party in respect of
the Process House Project.
(b) grant perpetual injunction restraining the defendant No.1
from committing a breach of the negative covenant
enumerated in Para 20A above and restrain the defendant
No.1 from modifying any technical and/or commercial terms
including price agreed/finalized between the Plaintiff and the
Defendant No.2.
(c) grant a decree of mandatory injunction directing
Defendant No.1 to execute the obligation of signing a formal
contact with the Plaintiff in accordance with the terms and
conditions agreed between the Plaintiff and Defendant No.2
contained in letter dated 7th December, 2007.
(d) grant perpetual injunction restraining the Defendant No.1
from modifying any technical and/or commercial terms
including price agreed/finalized between the Plaintiff and the
Defendant No.2.
(e) grant a decree of declaration that the purported sub-
contract Agreement dated 12th July, 2008 between defendant
No.1 and Defendant No.3 is invalid and void ab initio, and
cancel the said Contract Agreement dated 12th July, 2008.
(f) declare that the alleged consortium agreement dated
16.7.08 entered into between the Defendant No.1 and the
Defendant No.3 is illegal and void ab initio and cancel the
said Consortium Agreement dated 16.7.2008.
(g) declare that the addendum No.1 dated 21.2.2008 to the
Agreement dated 10.1.2008 is illegal void ab initio and cancel
the said Addendum No.1 dated 21.2.2008 to the agreement
dated 10.1.2008.
(h) declare that the Amendment dated 15.9.2008 to the
agreement dated 10.1.2008 is illegal and void ab initio and
cancel the said Amendment dated 15.9.2008 to the
agreement dated 10.1.2008.
(i) grant a decree of perpetual injunction restraining the
defendant No.1 and 2 from taking any steps in furtherance of
the amendment dated 15.9.2008 illegally made to the
contract agreement dated 10.1.2008 allegedly entered into
between Defendant No.1 and Defendant No.2 or creating any
rights in favour of defendant No.3.
(j) grant a decree of perpetual injunction restraining
defendant No.1, 2 and 3 from proceeding with and/or acting
upon in any manner whatsoever on the purported sub-
contract Agreement dated 12th July, 2008; or on any
subsequent date;
(k) grant a decree of declaration that the purported
permission granted vide letter dated 5.8.2008 issued by the
Defendant No.1 is invalid and/or void ab initio and cancel the
said permission dated 5.8.2008.
(l) grant a decree of permanent injunction restraining the
Defendant Nos. 1, 2 & 3 from taking any action pursuant to
the purported letter dated 5.8.2008.
(m) grant a decree of mandatory injunction, directing the
defendant No.1 and 2 to undo the contemptuous and illegal
acts done and status quo ante as on 30.7.2008 be restored.
(n) grant a decree of perpetual injunction restraining
defendant No.4 from disbursing any funds in the line of credit
opened by it from the Government of Ethiopia.
(o) costs; and
(p) pass such further order as this Hon‟ble Court may deem
fit and proper in the facts and circumstances of the case.
We have reproduced in extensio the amendments to the
Plaint as well as to the Prayers in order to make this
Judgment self contained as well as to adumbrate the fact that,
in the sequence of events as they have unfolded, there cannot
be any valid or substantial opposition to the amendments
being followed.
19. The remaining nodus pertains to the impleadment of
Walchandnagar Industries Ltd. as Defendant to the Suit. We
reiterate that notice to Walchandnagar Industries Ltd. on the
application for its impleadment was not in conformity with
the logic or with law. This perhaps was done because of the
compendious nature of the application filed by the Plaintiffs
since both the prayers, that is, amendment of pleadings as
well as impleadment of Walchandnagar Industries Ltd. were
combined in one. Learned Senior Counsel for the Appellant,
Walchandnagar Industries Ltd. has contested the Order
allowing impleadment of Walchandnagar Industries Ltd. on
the grounds that Walchandnagar Industries Ltd. is not a
necessary party for the Suit between Plaintiffs and
Defendants/OIA and that, at best, they could have been called
as witnesses in the Trial and their presence is not necessary
as parties. Secondly, it is urged that the impleadment of
Walchandnagar Industries Ltd. is sought on an entirely new
cause of action which does not form part of the Original Suit
and, therefore, the Plaintiffs are now seeking to alter the
entire nature of suit by urging new causes of action and
adding Walchandnagar Industries Ltd. as parties. Reliance is
placed on Anil Kumar Singh -vs- Shionath Mishra, (1995) 3
SCC 147, Kasturi -vs- Iyammperumal (2005) 650 SCC 753
and Bharat Karsondas Thakkar -vs- Kiran Construction
Co., (2008) 13 SCC 658 to buttress the argument that a third
party or an outsider to a suit between Plaintiff and Defendant,
who is unrelated to the controversy between the parties to
the suit, is not allowed to be impleaded as party.
20. In Anil Kumar Singh, the Plaintiff sought to implead
the Respondent who he alleged had obtained a collusive
Decree in connivance with his sons and wife and had thus
become a co-sharer to the property to be conveyed under the
Agreement to Sell which was the bedrock of the Specific
Performance Suit filed by him. Their Lordships, while
rejecting his prayers for amendment and impleadment of the
Respondent, noted that:-
3 .... The obtaining of a decree and acquiring the
status as a co-owner during the pendency of a suit of
Specific Performance, is not obtaining, by
assignment or creation or by devolution, an interest.
Therefore Order 22 Rule 10 has no application to this
case.
4. Equally, Order I Rule 3 is not applicable to the
Suit for Specific Performance because admittedly,
the respondent was not a party to the contract...
5. In this case, since the Suit is based on
agreement of sale said to have been executed by
Mishra, the sole defendant in the suit, the
subsequent interest said to have been acquired by
the Respondent by virtue of a decree of the Court is
not a matter arising out of or in respect of the same
act or transaction or series of acts or transactions in
relation to the claims made in the Suit.
....
9. Sub-rule(2) of Rule 10 of Order 1 provides that
the Court may either upon or without an application
of either party, add any party whose presence before
the Court may be necessary in order to enable the
Court effectually and completely to adjudicate upon
and settle all questions involved in the suit. Since
the Respondent is not a party to the agreement of
sale, it cannot be said that without his presence the
dispute as to Specific Performance cannot be
determined.
21. In Kasturi, their Lordships were again dealing with
impleadment of a third party in a Suit for Specific
Performance of a contract. Relying on the ratio of Anil
Kumar Singh, it was held that:-
17. It is difficult to conceive that while deciding the
question as to who is in possession of the contracted
property, it would be open to the court to decide the
question of possession of a third party or a stranger
as first the lis to be decided is the enforceability of
the contract entered into between the appellant and
Respondent 3 and whether contract was executed by
the appellant and Respondents 2 and 3 for sale of the
contracted property, whether the plaintiffs were
ready and willing to perform their part of the
contract and whether the appellant is entitled to a
decree for specific performance of a contract for sale
against Respondents 2 and 3. Secondly in that case,
whoever asserts his independent possession of the
contracted property has to be added in the suit, then
this process may continue without a final decision of
the suit. Apart from that, the intervener must be
directly and legally interested in the answers to the
controversies involved in the suit for specific
performance of the contract for sale. In Amon v.
Raphael Tuck and Sons Ltd.5 it has been held that a
person is legally interested in the answers to the
controversies only if he can satisfy the court that it
may lead to a result that will affect him legally.
22. In Bharat Karsondas Thakkar, the facts were that the
High Court had granted leave to the Plaintiff to amend his
Suit for declaration to be virtually transformed into a suit for
Specific Performance and had also allowed the impleadment
of the subsequent purchaser. The Hon‟ble Supreme Court
applied the ratio of Kasturi and Anil Kumar Singh to hold
that the Plaintiff was trying to materially alter the suit and
the impleadment of the subsequent purchaser sought by him
could not be granted in law.
23. We do not appreciate any manner in which the rationale
of these cases support the Appellants‟ case. The Suits filed by
the Plaintiffs before us are of tortuous interference where the
allegations are that OIA conspired and colluded with
Walchandnagar Industries Ltd. to oust them from the
contract with TENDAHO. The stage to test the merits of their
claim has not come as yet, but since the Suit is one of
tortuous interference containing allegations of conspiracy,
the presence of the alleged co-conspirator, who is also the
beneficiary as a party, is not only proper but also is
necessary. The principles for impleadment for a Specific
Performance of immoveable property will, therefore, not be
attracted in these facts. As soon as the amended Plaint is
perused, there can be no two opinions that an injustice would
be caused to Walchandnagar Industries Ltd. if it were not be
impleaded since there is always a likelihood of an order being
passed which may be adverse to its interests. If efficacious
interim orders had been passed, bringing the Project to a
standstill, we are in no manner of doubt that the OIA as well
as Walchandnagar Industries Ltd. would have come
screaming to Court asking for impleadment of
Walchandnagar Industries Ltd. Order I Rule 10 of the CPC
postulates impleadment of a person whose presence is
pertinent for the determination of the real matter in dispute,
which is a consideration similar to that for permitting an
amendment to pleadings. We may also add that since in the
present form, Walchandnagar Industries Ltd. is very much a
necessary party as reliefs are claimed qua it and the various
interim relief sought are likely to affect Walchandnagar
Industries Ltd.‟s, the Plaintiffs would have run the risk of
being non-suited for non-joinder of a necessary party as
stipulated under Order I Rule 9 of the CPC. The learned
Single Judge, therefore, did not commit any error in ordering
the impleadment of Walchandnagar Industries Ltd.
24. Finally, we must record our views on the question of
maintainability of the Appeals. This question was raised at
the very threshold of arguments. Section 10 of the Delhi High
Court Act, 1966 reads as follows:-
10. Powers of Judge
(1) Where a single Judge of the High Court of Delhi
exercises ordinary original civil jurisdiction conferred
by sub-Section(2) of Section 5 on that Court, an
appeal shall lie from the judgment of the Single
Judge to a Division Court of that High Court.
(2) Subject to the provisions of sub-section(1), the
law in force immediately before the appointed day
relating to the powers of the Chief Justice, single
Judges and Division Courts of the High Court of
Punjab and with respect to all matters ancillary to
the exercise of those powers shall, with the
necessary modifications, apply in relation to the High
Court of Delhi.
Such like provisions do not create the right to appeal but are
merely indicative of the forum which will hear the appeal.
Letters Patent have become necessary because of orders
passed in the High Court were appealable only before the
Privy Council in England. This unnecessarily entailed not
only Court expense but also the discomfort and difficulty in
arranging legal counsel. If legal annals are comprehensively
and meaningfully stated, it will become evident that this was
why the need to provide for an appeal within India was found
expedient. This should not be confused to hold that Appeals
are maintainable even where the CPC does not provide for
them. After Order XLIII Rule 1 of the CPC is read, it will be
evident that appeals have been provided for in all those cases
where a remedy by way of a second look at the controversy
was expeditiously essential. We think this is why the word
„judgment‟ has been used in contradistinction to the word
„order‟; both in Letters Patent as well as Section 10 of the
Delhi High Court Act. Judgment has been defined in Shah
Babulal Khimji -vs- Jayaben D.Kania, (1981) 4 SCC 8. This
celebrated Judgment also indicates in paragraph 116 that
refusal to amend as well as refusal to implead are of such
moment as would justify an appeal under Letters Patent or in
the case of Delhi High Court under the Delhi High Court Act.
25. A catena of Judgments has been cited by both the
adversaries on the aspect of principles to be adopted by the
Civil Courts for amendment of pleadings. The Judgments
cited in support of the amendments allowed by the learned
Single Judge are Sampath Kumar -vs- Ayyakannu, AIR 2002
SC 3369, Kedar Nath Agarwal -vs- Dhanraji Devi, (2004) 8
SCC 76, Andhra Bank -vs- Official Liquidator, (2005) 5 SCC
75 and Rajesh Kumar Aggarwal -vs- K.K. Modi, (2006) 4 SCC
85 and the ones cited to oppose by the other party are A.K.
Gupta -vs- Damodar Valley Corporation, AIR 1967 SC 96,
Kumaraswami Gounder -vs- D.R. Nanjappa, AIR 1978 Mad.
285 (FB), Bharat Karsondas Thakkar -vs- Kiran Construction,
AIR 2008 SC 2134 and Neena Khanna -vs- Peepee Publishers,
167(2010) DLT 247(DB). We have digested all these
precedents and in our considered view the general principle
adopted by the Courts while deciding an application for
amendment of pleadings is that the exercise of discretion to
allow an amendment has to be exercised liberally, unless
serious injustice or irreparable loss is caused to the other
party or the Court comes to the conclusion that the prayer of
amendment is vexatious and mischievous. The true purpose
of Order VI Rule 17 of the CPC is to allow the parties to bring
forth the true nature of dispute or controversy before the
Court. The rule of pleadings that the parties have to confine
their arguments and the evidence they adduce in support of
their case to the averments in the pleadings, makes the
provision for amendment further significant. At the stage of
determining the merits of an amendment application, the
Court is not supposed to go into the merits of the controversy
itself and should confine itself to the merits of the
amendment sought.
26. Grounds on which the Courts are reluctant to allow an
amendment is where the Plaintiff, through an amendment
seeks to change the nature of the suit or change the cause of
action originally pleaded in his Plaint, or seeks to claim a
relief which stands time barred. This however, does not
preclude the Plaintiff to plead, through an amendment,
additional grounds or cause of action, that came to his
knowledge after filing of the Suit or those which happened
subsequently but relate back to the original cause of action
pleaded in the original Plaint.
27. The Court may also allow the Plaintiff to add new
prayers to the suit if, by doing so, no violence will be caused
to the nature of the suit as it originally stood, nor a right,
which gets vested in the Defendant on account of limitation
or because of an admission by the Plaintiff is taken away.
Prevention of multiplicity of Suits, and a holistic disposal of a
dispute are material considerations that the Courts consider
while favourably receiving an amendment plea. The courts,
while allowing the amendment, may balance the equities by
awarding costs to the other party in case some prejudice is
seen to be caused which can be adequately compensated in
monitory terms.
28. There is such a plentitude of precedents on this aspect
of law that making even the briefest and cryptic reference
thereto will result in rendering these opinion avoidably prolix.
We shall, therefore, restrict our reference to the most recent
exposition and enunciation of the law which is to be found in
Revajeetu Builders & Developers -vs- Narayanaswamy,
(2009) 10 SCC 84 :
Whether amendment is necessary to decide real
controversy
58. The first condition which must be satisfied before
the amendment can be allowed by the court is
whether such amendment is necessary for the
determination of the real question in controversy. If
that condition is not satisfied, the amendment cannot
be allowed. This is the basic test which should
govern the courts‟ discretion in grant or refusal of
the amendment.
No prejudice or injustice to other party
59. The other important condition which should
govern the discretion of the court is the potentiality
of prejudice or injustice which is likely to be caused
to the other side. Ordinarily, if the other side is
compensated by costs, then there is no injustice but
in practice hardly any court grants actual costs to the
opposite side. The courts have very wide discretion
in the matter of amendment of pleadings but court‟s
powers must be exercised judiciously and with great
care.
.....
Factors to be taken into consideration while
dealing with applications for amendments
63. On critically analysing both the English and
Indian cases, some basic principles emerge which
ought to be taken into consideration while allowing
or rejecting the application for amendment:
(1) whether the amendment sought is imperative
for proper and effective adjudication of the case;
(2) whether the application for amendment is bona
fide or mala fide;
( 3) the amendment should not cause such
prejudice to the other side which cannot be
compensated adequately in terms of money;
(4) refusing amendment would in fact lead to
injustice or lead to multiple litigation;
( 5) whether the proposed amendment
constitutionally or fundamentally changes the
nature and character of the case; and
(6) as a general rule, the court should decline
amendments if a fresh suit on the amended claims
would be barred by limitation on the date of
application.
These are some of the important factors which may
be kept in mind while dealing with application filed
under Order 6 Rule 17. These are only illustrative
and not exhaustive.
64. The decision on an application made under Order
6 Rule 17 is a very serious judicial exercise and the
said exercise should never be undertaken in a casual
manner. We can conclude our discussion by
observing that while deciding applications for
amendments the courts must not refuse bona fide,
legitimate, honest and necessary amendments and
should never permit mala fide, worthless and/or
dishonest amendments.
65. When we apply these parameters to the present
case, then the application for amendment deserves to
be dismissed with costs of Rs 1,00,000 (Rupees one
lakh) because the respondents were compelled to
oppose the amendment application before different
courts. This appeal being devoid of any merit is
accordingly dismissed with costs.
29. In this analysis, our conclusion is that even if the
Appellants had not conceded to the incorporation in the
Plaint of the amended Prayers, no sooner had the amended
narration of facts and events been allowed in the Plaint, the
logical consequence would be that the amended Prayers
should also have been permitted. If this were not to be so,
the Plaintiffs would have been precluded from making these
Prayers in a subsequent Suit because of the rigours of Order
II Rule 2 of the CPC. The Prayers should also have been
allowed in the interest of justice in order to avoid multiplicity
of proceedings between the same parties. This is especially
so since we are unable to discern any malafide advantage
that the Plaintiffs would stand to gain on allowing amended
Prayers to come on the record. Conversely, we are unable to
locate any disadvantage that would visit the Defendants
because of the presence of the amended Prayers. Indeed, it is
in the interest of all the parties that all relevant facts, all
complexions and hues of the cause of action, and all the
Prayers should be decided by the Court within the
circumference of a single comprehensive lis.
30. The Appeals are devoid of merit and are dismissed
along with pending Applications with costs of ` 50,000/- in
each Appeal, of which half shall be payable to the Prime
Minister Relief Fund and the half to the Respondents, to be
paid within four weeks from today.
( VIKRAMAJIT SEN )
JUDGE
(G.P. MITTAL)
JUDGE
December 24, 2010
