Economic Transport Organization ... vs Mohan Investment & Properties (I) ...
2012 Latest Caselaw 4687 Del

*                 THE HIGH COURT OF DELHI AT NEW DELHI

+                         CM (M) 1371/2011

                                            Date of Decision: 08.08.2012

ECONOMIC TRANSPORT ORGANIZATION LTD. & ORS.
                                    .... PETITIONER
               Through: Mr.D.K.Malhotra, Advocate with
                        Mr.Pawan Kr.Bahl, Mr. Rajesh
                        Malhotra, Advocate.

                          Versus

MOHAN INVESTMENT & PROPERTIES (I) LTD. & ORS.
                                    ......RESPONDENT
               Through: Mr.G.L.Rawal, Sr. Advocate with
                        Mr. Kuljeet Rawal, Advocate.

CORAM:
HON'BLE MR. JUSTICE M.L. MEHTA

M.L. MEHTA, J. (Oral)

1. The present petition under Article 227 of the Constitution is filed assailing the order dated 21.09.2011 of Addl. District Judge (East), Karkardooma Courts.

2. The respondent No. 1 Mohan Investments & Properties (I) Ltd. had filed a suit for possession and recovery of money vide suit No. 12/08/90. Petitioner No. 2 herein was defendant No. 1 in the said suit. Petitioner No.1 herein was impleaded subsequently. Petitioners No. 3 to 6 are some of the partners of petitioner No. 2 (defendant No.1 in suit). Respondents

No. 2 to 9 have been impleaded in the instant petition as performa, being the other partners of petitioner No. 2 (defendant No. 1).

3. Defendant No. 1 i.e. Economic Transport Organization was inducted on the ground floor of premises being 1-E/6, Jhandewalan Extension, New Delhi by the previous owner, from whom the plaintiff (respondent No. 1/Mohan Investments & Properties (I) Ltd.--for short 'MIP') purchased the property. The suit was instituted by MIP for possession and recovery of money, allegedly on account of non-payment of rent despite services of notices. The said case was at the stage of final arguments when the defendant No. 1 (petitioner No. 2/Economic Transport Organization--for short 'ETO') filed an application for taking on record amended copies of Memorandum and Article of Association. It was pleaded therein that at the time of filing of the suit, defendant No. 1 (petitioner No. 2) was a partnership firm with the aforesaid persons as partners and during the pendency of present suit, the partners of defendant No. 1 unanimously resolved the business being carried in the name of ETO to be converted into a joint stock company under the name of ETO Pvt. Ltd. or some other name as may be approved by the Registrar of the Companies. The business of ETO was to be carried on uninterrupted. Consequently, the ETO was converted into a joint stock company under the name and style of Economic Transport Organization Pvt. Ltd. (for short 'ETOPL'--petitioner No. 1). It was averred that consequent upon conversion into a joint stock company, the assets and liabilities of ETO became that of newly incorporated ETOPL. It was also averred that in a family settlement arrived at between the parties, in the

litigation going between them, the Apex Court vide its order dated 9.5.2005 approved the terms of settlement. It was pleaded that as per the settlement, the suit premises which was in the tenancy of partnership firm of ETO fell to the share of partners of ETOPL. However, in Schedule 'G' of Memorandum and Article of Association, this premises came to be shown as of partnership firm ETO. This was stated to be due to printing mistake, which had taken place due to inadvertence. It was further averred that the Board of Directors of ETO in its meeting held on 6.12.2010, passed a resolution in terms of which, Schedule 'G' of the Memorandum and Article of Association was amended and the suit premises was deleted from the list of its assets. Based on these submissions, the application was filed by the defendant No. 1 (petitioner No.2) before the ADJ not to consider the suit property as a part of schedule 'G' of the Memorandum and Article of Association. The said application was dismissed by the learned ADJ. Subsequent thereto, another application was filed for placing on record amended Memorandum and Article of Association, which also came to be dismissed by the ADJ vide impugned order.

4. The contentions of the learned counsel for the respondent No. 1 herein is that the suit is of the year 1990 and has protracted for all these years. The learned senior counsel submitted that there are several documents on record wherein defendant No. 1 (petitioner No. 2) had admitted itself to be the tenant of suit premises and now, by way of amendment made in the Memorandum and Article of Association, it was trying to resile from those admissions. He also submitted that

amendment done in the Memorandum and Article of Association regarding the assets is not permissible as per Section 18 of the Companies Act. He further submitted that in any case, it was the internal matter between the defendants namely ETO and ETOPL and the settlement, if any, between the defendants, was not binding upon the plaintiff (respondent No. 1 herein).

5. On the other hand, contentions of the learned counsel for the petitioners is that vide the aforesaid application, the permission was sought only to place on record the amended Memorandum and Article of Association in place of the one, which was already there. It was submitted that the petitioners were not resiling from any admission whatever were made in the pleadings or in the documents proved on record, but were seeking to place on record the amended Memorandum and Article of Association, which was effected to rectify the mistake of the suit premises being shown therein as that of partnership firm ETO. It was submitted that even as per the lease which was executed way-back in 1975 between the defendant and erstwhile owner B.K.Khanna & Company Pvt. Ltd., the tenancy of the suit premises was in the name of Economic Transport Organization (QTS) Pvt. Ltd. i.e. ETOPL and not defendant No. 1 i.e. ETO (petitioner No.2). Further, it was also submitted that the amendment in the Memorandum and Article of Association was only in respect of the suit premises to the effect that it was in the tenancy of ETOPL and not the partnership firm ETO. He submitted that this mistake in the Memorandum and Article of Association came to be known only during the course of arguments on the pointing of learned

counsel for the plaintiff and immediately thereafter, an application was filed before the court for not considering suit premises as a part of Schedule 'G' and also informing the court about defendant No. 1 taking steps for rectification of the memorandum. Subsequently, by way of resolution of Board of Directors, the mistake was rectified and the same was also informed to ROC on 7.2.2011 in the prescribed Form 23. The ROC also gave its approval to the said rectification. The rectification/modification in the memorandum was stated to have been done as per law and it was submitted that the plaintiff was no-one to challenge the same. The main grievance of the learned counsel for the petitioners against the impugned order is that the application was filed only for taking on record the amended Memorandum and Article of Association, whereas the learned ADJ has proceeded to pre-judge and decide the case on merits.

6. I have heard learned counsel for both the parties. My attention has been specifically drawn by learned counsel for the respondent No. 1 to various documents to demonstrate admission of tenancy by defendant No. 1 (petitioner No.2). My attention is also drawn to the Schedule of Assets and Liabilities of ETO on the close of business on 31.05.2007, wherein, as per Schedule 'G', the suit premises is shown to be in the tenancy of partnership firm ETO. From the Memorandum of Association also, it is pointed out that the partnership business of ETO was to be converted into a joint stock company with all its assets and liabilities as on the close of business on 31.05.2007.

7. Having heard the learned counsel for both the parties at length and on going through the entire material available on record as also through the impugned order, I do not think it expedient and in the interest of justice to comment on the evidence or admissibility or the evidentiary value of documents of parties before the Trial Court, nor do I think it desirable to comment on any of those documents. This is neither within the scope of exercise of power under Article 227 of the Constitution nor would it be in the interest of justice as the Trial Court is seized of the matter at the final stage of disposal. However, what I find from the impugned order is that the learned ADJ, based on certain set of documents, has recorded a finding of fact of admission by the defendant No. 1 to be the tenant of the plaintiff in the suit premises. He has also observed that from the documents on record, it is clear that defendant No. 1 is a tenant in the suit premises. The learned ADJ has made these observations while disposing the application of defendant No. 1, seeking to place on record amended Memorandum and Article of Association. At this stage, it was not desirable to discard the request of the defendant No. 1 and to proceed to record a finding against it based on the documents of the plaintiff. Since, the already filed Memorandum and Article of Association had neither been proved by any witness, nor exhibited, and no further evidence was to be led by the defendant No. 1 as regard to the amended Memorandum and Article of Association, the same could have been taken on record and the court was to appreciate its evidentiary value as per law. By stating so, I may not be taken as saying that the amended Memorandum and Article of Association was admissible as per law or has more evidentiary value than the other evidence on record.

8. In view of the discussion above, the observations made by the learned Addl. District Judge even at the stage of disposal of application, seem to have caused prejudice to defendant No. 1. The impugned order seems to be not tenable as per law. The same is accordingly set aside. The amended Memorandum and Article of Association is permitted to be taken on the record of Trial Court. At the time of final arguments, both the parties will also have the right to address as regard to admissibility and evidentiary value of these documents and the learned ADJ will decide the matter as per law, uninfluenced by the observations made hereinabove.

9. Petition stands disposed of accordingly. Parties are advised to appear before the Trial Court on 22.08.2012.

M.L. MEHTA, J.

AUGUST 08, 2012/akb