Jaguar Overseas Limited & Ors. vs Klj Resources Limited
2012 Latest Caselaw 3067 Del

*           HIGH COURT OF DELHI : NEW DELHI

+           I.A. No.13044/2011 in CS (OS) No.1294 of 2007

%                                 Judgment decided on : 09.05.2012

Jaguar Overseas Limited & Ors.                       ..... Plaintiffs
                     Through: Mr. Amit Singh Chadha, Sr. Adv.
                               with Mr. Tejas Karia, Mr. Karan and
                               Mr. Vikramaditya S. Malik, Advs.

                              Versus

KLJ Resources Limited                             ..... Defendant
                    Through: Mr. Kuljeet Rawal, Adv. for D-1
                             Mr. V. Srivastav, Adv. for Proforma
                             Defendant Nos.2 & 3.

Coram:

HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. This application under Order VI Rule 17 of CPC has been filed by the plaintiff seeking leave to amend the suit for the purpose of placing on record certain events and developments that occurred after filing of the instant suit.

2. Originally three plaintiffs namely Jaguar Overseas Limited, Jindal Drilling and Industries Ltd. and Discovery Enterprises Private Limited filed the instant suit for specific performance of the Memorandum of Understanding dated 15.04.2005 (hereinafter referred to as the MoU) which was executed between them and defendant KLJ Resources Limited. Plaintiff Nos.2 and 3 were transposed as defendant Nos. 2 and 3 in terms of order dated 8.7.2011 passed in I.A. No.10258/2011 filed by the plaintiffs as they had arrived at an amicable settlement with the defendant. They did not

press their relief for specific performance any more. Amended memo of parties was duly filed.

3. In terms of the said MoU, the defendant No.1 agreed to lease out 13000 sq. fts. in the premises bearing No.70, first floor, in complex-I situated on the main Najafgarh Road, also known as Shivaji Marg (hereinafter referred to as the „property‟) to the plaintiffs for an initial period of 3 years with effect from 01.06.2005 and in addition, the plaintiffs also had an option to purchase the property under lease within a period of one year thereof.

4. It is averred in the application that under the MoU, it was agreed that the plaintiff would purchase 50% share of the property (plaintiff No.2 and now defendant No.2 and M/s Discovery Hydrocarbons Pvt. Ltd.) would collectively purchase 40% share and the remaining share would be purchased by plaintiff No.3 (now defendant No.3). Thereafter, on 29.05.2006 the plaintiffs issued letters to defendant No.1 to exercise the purchase option given under the MoU, but the defendant refused to honour its obligations under the MoU as per case of the plaintiffs which lead to filing of this suit by the plaintiffs.

5. As already mentioned that during the pendency of these proceedings, defendant Nos.2 and 3 along with M/s Discovery Hydrocarbons Pvt. Ltd. entered into a compromise with defendant No.1 wherein defendant Nos.2 and 3 along with M/s Discovery Hydrocarbons Pvt. Ltd. have given up their claim for specific performance and filed an application bearing No.10258/2011 under Order XXIII Rules 1 and Order I Rule 10 of CPC in the present suit. While disposing of the said application, the Court transported M/s Jindal drilling & Industries Limited and M/s Discovery Enterprises

Pvt. Ltd. were deleted from the array of plaintiffs and made them defendant Nos. 2 and 3 respectively.

6. In view of the said events and developments, the plaintiff is seeking amendments in the plaint which are as follows:

(i) Where the word "Plaintiffs" is mentioned in the plaint, the same is to be replaced by "Plaintiff, Defendant No.2-3 and M/s Discovery Hydrocarbons Private Limited".

(ii) Where the word "Defendant" is mentioned in the suit, the same is to be replaced by "Defendant No.1".

(iii) The word "Plaintiff No.1" mentioned in para 2 of the plaint is to be replaced by the "Plaintiff".

(iv) The word "Plaintiff No.2" mentioned in para 3 of the plaint is to be replaced by the "Defendant No.2".

(v) The word "Plaintiff No.3" mentioned in the plaint is to be replaced by the "Defendant No.3".

(vi) In para 7(i) of the plaint, word "Plaintiff No.1, 2 and 3" is to be replaced by "Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Pvt. Ltd.". Further, word "have" is to be replaced by "initially had". Hence, the amended para 7(i) is to be read as follows :

"7(i) That the Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited initially had common promoters and were carrying on their respective businesses at 707 and 1107, 1207 Vikram Towers, Rajendra Place, New Delhi. However, due to constraint of space, the Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited were on the lookout for a commercial space which they could purchase and shift all companies under one roof in order to ensure better coordination and working."

(vii) In para 7(ii) of the plaint, words "Plaintiff Companies" is to be replaced by "Plaintiff, Defendant No.2 to 3 and M/s Hydrocarbons Pvt. Ltd."

(viii) In para 7(iii) of the plaint, before "The salient features of the MOU are reproduced hereunder.", following is to be added -

"Under the MOU, it was agreed that the plaintiff would purchase 50% share of the Property, Defendant No.2 alongwith M/s Discovery Hydrocarbons Private Limited would acquire collectively 40% share of the Property and the remaining share of the Property would be purchased by the Defendant No.3 herein."

Hence, the amended para 7 (iii) is to be read as follows :

"7(iii). After initial discussions between the parties, the Defendant No.1 approached the plaintiff. Defendant No.2 and 3 and M/s Discovery Hydrocarbons Private Limited on or about March 2005 with a concrete proposal whereby the Defendant No.1 initially offered to the plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited to lease 13,000 sq.ft. in the premises bearing No.70, first floor in complex-I situated on the main Najafgarh Road, also known as Shivaji Marg (hereinafter referred to as the "Property" with an option to the Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited to purchase the leased Property within a period of one year. After detailed negotiations, on April 15, 2005 the MOU was executed qua the Property between the Plaintiff, Defendant 2 to 3 Discovery Hydrocarbons Private Limited, a company incorporated under the Companies Act, 1956, and which was subsequently amalgamated with the Defendant No.2 vide order dated July 27, 2006 passed by the Hon‟ble High Court for the State of Punjab and Haryana at Chandigarh in Company Petition No.105 of 2006 connected with Company Petition No.74 of 2006. In terms of the MOU, the

Defendant No.1, inter alia, agreed to lease out the Property to the Plaintiff, Defendant No.2 and 3 and M/s Discovery Hydrocarbons Private Limited for an initial period of three (3) years with effect from June 1, 2005 in lieu of which the Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited agreed to pay Rs.23 per sq.ft. per month with an option to the Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited to purchase the Property under lease within a period of period of one year. Under the MOU, it was agreed that the Plaintiff would purchase 50% share of the Property, Defendant No.2 alongwith M/s Discovery Hydrocarbons Private Limited would acquire collectively 40% share of the Property and the remaining share of the Property would be purchased by the Defendant No.3 herein. The salient features of the MOU are reproduced hereunder."

(ix) In para 7(viii) of the plaint, before "Pertinently, the terms of the Lease Agreements reiterate the provisions made in the MOU and consequentially establish that the same has been executed by the parties in compliance with the terms of the MOU", following is to be added :

"In terms of the MOU, the Plaintiff was leased 7810 sq.ft. of the total 15620 sq.ft. of the Property, Defendant No.2 alongwith M/s Discovery Hydrocarbons Private Limited was leased 6248 sq.ft. of the total 15620 sq.ft. of the Property and the Defendant No.3 was leased the remaining 1562 sq.ft. of the 15620 sq.ft. of the Property."

Hence, the amended para 7 (viii) is to be read as follows :

"7(viii). Admittedly, pursuant to the execution of the MOU the Defendant No.1 entered into lease agreements dated June 1, 2005 (hereinafter referred to as the "Lease Agreements") with the Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited whereby

the Property was leased by the Defendant No.1 in favour of the Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited. In terms of the MOU, the Plaintiff was leased 7810 sq.ft. of the total 15620 sq.ft. of the Property, Defendant No.2 alongwith M/s Discovery Hydrocarbons Private Limited was leased 6248 sq.ft. of the total 15620 sq.ft. of the Property and the Defendant No.3 was leased the remaining 1562 sq.ft. of the 15620 sq.ft. of the Property. Pertinently, the terms of the Lease Agreements reiterate the provisions made in the MOU and consequentially establish that the same has been executed by the parties in compliance with the terms of the MOU. This further establishes the parties. The MOU read together with the Lease Agreements forms a concluded contract between the parties and is, therefore, binding on the Defendant No.1 and the Defendant No.1 is stopped from unilaterally resiling from performing its obligations under the MOU."

(x) In para 7(x) of the plaint, the words "The Plaintiff Nos.1, 2 and 3" be replaced by "Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited". Further, words "Petitioner No." is to be replaced by "Defendant".

(xi) After para 12 of the plaint, following para 12 A is to be added :

"12 A. That the Defendant No.2 and 3 alongwith M/s Discovery Hydrocarbons Private Limited have entered into settlement with the Defendant No.1 wherein the Defendant No.2 and 3 alongwith M/s Discovery Hydrocarbons Private Limited have given up their claim of specific performance. Therefore, the Plaintiff alone is seeking specific performance by the Defendant No.1 of the MOU in relation to its 7810 sq.ft. as shown in the site plan, of the Property, which is still in possession of the Plaintiff herein as shown in site plan."

(xii) In para 15 of the Plaint, "a sale deed qua" and before "the Property in favour of the Plaintiff and to register", words "7810 sq.ft. as shown in site plan" have to be added. Further, at the end of the para and before "in the name of the plaintiff forthwith", words "7810 sq.ft. of the property, as shown in the site plan" have to be added. Hence, the amended para 15 is to be read as follows :

"15. In the above circumstances, the Plaintiff is filing the present suit for specific performance seeking directions from this Hon‟ble Court against the Defendant No.1 to perform its part of the contract and fulfill its obligations under the MOU and specifically execute a sale deed qua 7810 sq.ft. of the Property, as shown in the site plan, in favour of the plaintiff and to register 7810 sq.ft. of the property, as shown in the site plan, in the name of the Plaintiff forthwith."

(xiii) In para 16 of the plaint, after words "same qua the" and after "The Plaintiff is entitled to purchase", words "7810 sq.ft. of the Property as shown in the site plan" have to be added. Hence, amended para 16 is to be read as follows :

"16. It is reiterated that the Plaintiff has performed its part of the contract under the terms of the MOU and the Defendant No.1 is liable to fulfill its obligations under the same qua the 7810 sq.ft. of the Property, as shown in the site plan. The plaintiff is entitled to purchase 7810 sq.ft. of the Property, as shown in the site plan, and to have the same registered in its name in terms of Clause 8 of the MOU."

(xiv) The original Prayer Clauses (a) and (b) of the Plaint is to be replaced by the following new Prayer clauses (a) and (b) as under :

(a) Pass a decree of Specific Performance in favour of the Plaintiff and against the Defendant No.1 for specific performance of the Memorandum of Understanding dated 15th April, 2005 executed between the Defendant No.1 and the Plaintiff, Defendant No.2 to 3 and M/s Discovery Hydrocarbons Private Limited qua the sale of 7810 sq.ft. of the Property, as shown in the site plan, bearing No.70, first floor in complex-I situated on the main Najafgarh Road, also known as Shivaji Marg, directing the Defendant No.1 to forthwith execute the sale deed in respect of the 7810 sq.ft. of the Property, as shown in site plan, in favour of the Plaintiff and get the same registered in favour of the Plaintiff before the competent authority;

(b) Pass an order of permanent injunction restraining the defendant No.1 from taking any action or steps whatsoever under Section 106 of the Transfer of Property Act or any other law and/or from disposing the plaintiff from the 7810 sq.ft. of the Property, as shown in the site plan, under the possession of the plaintiff in any manner whatsoever;

7. It is stated by the plaintiff that the abovementioned amendments are necessary to determine the lis between the parties in their entirety and to avoid multiplicity of proceedings.

8. In reply, defendant No.1 submits that the plaintiff is trying to make out a new case. It has been the case of all the plaintiffs that under the MoU dated 15.04.2005, the original plaintiffs have a composite right without any bifurcation among themselves to purchase the 13000 sq. ft. of subject property. After the settlement, plaintiff is now has no right to continue with the present suit, being the composite rights with any bifurcation in the agreement, question

of any amendment does not arise. The proposed amendments are being sought to delay the proceedings in a connected case being CS (OS) No.2388/2008, wherein, the defendant No.1 is the plaintiff seeking decree of possession after having terminated the tenancy under Section 106 of the Transfer of Property Act, 1882.

9. It is also stated that the property is not covered under the Delhi Rent Control Act, 1958. It was just a tentative thinking on the part of the plaintiff to have an option of purchase and when the tenancy deed was executed, the alleged option of purchase was given up. The defendant Nos.2 and 3 (who were the plaintiff Nos. 2 and 3 earlier) had given up their claim all together and the plaintiff is trying to raise a new plea which is contrary to the pleadings of the suit initially filed and also to the MoU, on the strength of which the present suit has been filed, therefore, the present application for amendment of plaint is not maintainable.

10. In nutshell, the defendant No.1 submits that by means of this application, the plaintiff intends to make out new case which is not permissible in law. Incase the amendment is allowed, it would be a totally new case and cause of action which will also hit by the provisions of Section 91 and 92 of the Evidence Act. Learned counsel for the defendant No.1 has referred the pleadings of the plaintiff and submits that in the original plaint, all the plaintiffs had option to purchase the suit property but now the plaintiff intends to change the subject matter of MOU by bifurcation of the various portion. Mr. Rawal has referred the decision of the Supreme Court in the case of Reserve Bank of India and Another Vs. Ramkrishna Govind Morey; 1976 (1) SCC 803. In para 2 of the judgment it has been held that :

"if the applications for amendment made by the plaintiff contained allegations in line with what was stated in the original plaint, the amendments would be redundant if they were different, no valid reason is given why the plaintiff should be permitted to improve on the case as originally made. The plaintiff‟s case did not depend on what the defendant might say in the written statement and if what he proposed to introduce in the plaint by way of amendment was relevant to his case, there is no apparent reason why this was left out when the plaint was filed."

Learned counsel for defendant No.1 has also referred the case of Gulabrao Balwantrao Shinde and Others Vs. Chhabubai Balwantrao Shinde and Others; AIR 2003 SC 160 wherein, it has been held that the court cannot make out a new case if not pleaded.

11. As far as principles laid down in the two decisions referred by the defendant No.1 are concerned, there is no dispute, however, it has to be seen as to whether the facts in those cases are similar and the said decisions are applicable in the facts and circumstances of the present case. The Apex Court in the case of Rajesh Kumar Aggarwal And Others Vs. K.K. Modi And Others; (2006) 4 SCC 385 in para 18 and 19 has held as under :

"18. As discussed above, the real controversy test is the basic or cardinal test and it is the primary duty of the court to decide whether such an amendment is necessary to decide the real dispute between the parties. If it is, the amendment will be allowed; if it is not, the amendment will be refused. On the contrary, the learned Judges of the High Court without deciding whether such an amendment is necessary have expressed certain opinions and entered into a discussion on merits of the amendment. In cases like this, the court should also take notice of subsequent events in order to shorten the litigation, to preserve and safeguard the rights of both parties and to subserve the ends of justice. It is settled by a catena of decisions of this Court that the rule of amendment is essentially a rule of justice, equity and good conscience and the power of amendment should be exercised in the larger interest of doing full and complete

justice to the parties before the court."

19. While considering whether an application for amendment should or should not be allowed, the court should not go into the correctness or falsity of the case in the amendment. Likewise, it should not record a finding on the merits of the amendment and the merits of the amendment sought to be incorporated by way of amendment are not to be adjudged at the stage of allowing the prayer for amendment. This cardinal principle has not been followed by the High Court in the instant case."

12. Let me now discuss the facts of the present case in view of the settled law. Pursuant to the execution of the MOU, the defendant No.1 entered into lease agreements dated 01.06.2005 with the plaintiff whereby the plaintiff was leased 7810 sq. ft. Defendant No.2 was leased 6248 sq. ft. and the defendant No.3 was leased the remaining 1562 sq. ft. of the property.

13. The letter dated 29.05.2006 issued by the plaintiffs to the defendant would also shows that the plaintiffs independently exercised their option under Clause 8 of the MOU to purchase their respective shares of the suit premises. Defendant No.1 had admittedly filed three suits against the plaintiff and defendant Nos.2 and 3 for possession which prima facie from the conduct of defendant No.1 shows that they have an independent right with regard to the suit premises.

Therefore, in the light of the settlement arrived at between the defendant No.1 and defendant Nos. 2 and 3, the plaintiff would be entitled to bring the said facts on record. At this stage, it cannot be determined as to whether suit of the plaintiffs would survive or not after the settlement arrived between the plaintiff Nos. 2 and 3 with the defendant. All these questions raised by the defendant have to be considered at the proper stage of the matter and I feel proper adjudication of disputes on this aspect has to be gone into between

the parties. Other objection of defendant No.1 that the suit premises is not covered under the Delhi Rent Control Act is also not to be decided at this stage. It appears to me that the amendments sought by the plaintiff are bonafide and are necessary in order to decide the real controversy between the parties. The defendant No.1, is no doubt entitled to raise all plea raised in its reply in the written statement to be filed to the amended plaint. Thus, the present application is allowed.

14. I.A. No.13044/2011 is disposed of.

CS (OS) No.1294/2007

15. In view of order passed in I.A. No.13044/2011, amended plaint be filed by the plaintiff within four weeks with an advance copy to the other side. Written statement thereto be filed within four weeks thereafter. List the matter on 30.08.2012.

MANMOHAN SINGH, J.

MAY 09, 2012