Anand Datwani And Anr vs Janak Datwani And Ors
2013 Latest Caselaw 3303 Del

$~2 & 3
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
                                     DECIDED ON: 30th July, 2013

+      FAO(OS) 57/2013
       CNA EXPORTS PVT LTD AND ORS
                                                        ..... Appellants
                            Through :   Mr. Rajat Navet and Mr. Suresh
                                        Singh, Advs.

                            versus

       DAYAL D SHAHDADPURI AND ORS
                                                      ..... Respondents

Through : Mr. Vivek Sharma, Mr. Akhil Sachar and Ms. Mamta Sharma, Advs. for R-3.

Mr. Ayush Agrawal, Adv. for R-2/Janak Datwani.

+      FAO(OS) 60/2013
       ANAND DATWANI AND ANR
                                                        ..... Appellants
                            Through :   Mr. Rajat Navet and Mr. Suresh
                                        Singh, Advs.

                            versus

       JANAK DATWANI AND ORS
                                                       ..... Respondent
                            Through :   Mr. Vivek Sharma, Mr. Akhil
                                        Sachar and Ms. Mamta Sharma,




FAO(OS)57/2013 & FAO(OS)60/2013                              Page 1
                                        Advs. for R-3.
                                       Ms. Diya Kapur, Adv. for R-4.

       CORAM:
       HON'BLE MR. JUSTICE S. RAVINDRA BHAT
       HON'BLE MR. JUSTICE NAJMI WAZIRI

%      MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)

1. The present common judgment will dispose off two appeals

being FAO(OS) Nos. 57/2013 and 60/2013, both connected against

common judgment and order of 3rd January, 2013.

2. By the impugned judgment and order, the learned Single Judge

had allowed an application , i.e., IA 8812/2011, filed in CS(OS)

No.118/2007 by one Shri Dayal D. Shahdadpuri (hereinafter referred

to as "Shahdadpuri" in these proceedings; he was the plaintiff in

CS(OS)No.118/2007). Shahdadpuri had in his suit claimed ownership

of 2500 shares of M/s. CNA Exports Pvt. Ltd., the appellant in

FAO(OS) No.57/2013. It is urged that the amendment allowed by the

impugned order overlooks that the plaintiff sought to set up an entirely

different cause of action by urging that the shares in respect of which

relief of declaration was sought were acquired pursuant to a transfer in

1999 by the fourth respondent in those proceedings, i.e. Ms. Nitya

FAO(OS)57/2013 & FAO(OS)60/2013 Page 2 Bharaney. It is also submitted that these facts were never pleaded and

urged in the suit and were sought to be introduced first time in the

replication filed much later in 2011. The appellant M/s. CNA Exports

Private Limited also impugns the other amendments allowed by the

impugned order pertaining to transfer of shares in favour of Shri Janak

Datwani, one of the defendants in the said suits sometime on 8th

March, 2008. The said defendant has apparently filed independent

proceedings being CS(OS)Nos.1113/2007, 1798/2011 and 2444/2013

touching upon the ownership of various shares and control in the same

company, i.e. M/s. CNA Exports Pvt. Ltd.

3. The second appeal FAO(OS) 60/2013 pertains to an application,

i.e. 737/2011 in CS(OS) No.556/2008. That suit was filed by Smt.

Jamna Datwani claiming to be - along with defendant Nos. 2 to 4 the

owner/shareholder of M/s. CNA Exports Pvt. Ltd. to the extent of

85%. The impugned order has allowed an application by Shri Janak

Datwani for transposition as plaintiff in the said suit, i.e. CS(OS)

No.556/2008. The plaintiff Smt. Jamna Datwani has, in turn, been

transposed as defendant in the suit.

FAO(OS)57/2013 & FAO(OS)60/2013 Page 3

4. Counsel for M/s. CNA Exports Pvt. Ltd. in both cases argues

that the amendment and the transposition, including in these

proceedings, should not have been allowed. It is submitted that so far

as the application, i.e. CM No.8812/2011 seeking amendment by

plaintiff, i.e. Shahdadpuri never claimed at the time of institution of

the suit that the shares had been purchased from Ms. Nitya Bharaney.

This entire case was set up much later, i.e. in 2011 in the replication.

Similarly, the said plaintiff could not introduce subsequent events in

the form of the cause of action for the present dispute. If the

plaintiff's 2500 shares, subject matter of the proceedings, had been

transferred to Shri Janak Datwani, it was for him to secure and protect

his interest as the case may be. The plaintiff could not, in these

circumstances, set up every subsequent event which took place, or

occurred after institution of the suit, as the basis for amendment.

5. In FAO(OS) No. 60/2013, it was urged that the impugned order,

so far as it transposed Shri Janak Datwani as the plaintiff in suit

No.556/2008 instead of original plaintiff Smt. Jamna Datwani, was

unjustified. Counsel highlighted the fact that the two pending

applications by Ms. Jamna Datwani, i.e. CM Nos. 16086/2009 and

FAO(OS)57/2013 & FAO(OS)60/2013 Page 4 12310/2010 had been withdrawn and a statement had in fact been

made on her behalf in Court by the counsel on 23 rd February, 2012. It

was submitted that in these circumstances, the learned Single Judge

should not have permitted transposition of Janak Datwani as the

plaintiff.

6. Counsel for Shahdadpuri submitted that the amendments

allowed through IA 8812/2011 were justified. It is argued that so far

as the first amendment pertaining to how he acquired the ownership of

the shares was concerned, the matter itself was in issue and that he had

sought for relief of declaration that he was true owner of 2500 shares.

So far as the second amendment is concerned, learned counsel urge

that in order to avoid multiplicity of proceedings, the transfer of the

shares made in 2008 to Janak Datwani could conveniently be also the

subject matter of suit No.118/2007.

7. Counsel for the respondents, especially Ms. Nitya Bharaney and

Mr. Kishan Datwani submitted that the order transposing Janak

Datwani as the plaintiff was justified. Learned counsel relied upon the

following portions of the impugned order :

"82. It is also argued by the defendant No.3

FAO(OS)57/2013 & FAO(OS)60/2013 Page 5 that even though she may not be withdrawing the suit in view of the statement made by her in the Court on 23rd February, 2012 (if accepted by the Court) but her conduct by admitting the transfer of shares and the averments made in her two applications and in other pleadings i.e. reply dated 27th September, 2009 in I.A.

No.1230/2010 and reply dated 21st July, 2011 in I.A.No.14065/2011 and I.A. No.12309/2010 amounts to abandonment of the suit. Therefore, the defendant No.3 is entitled to be transposed as plaintiff. It is argued that there is a collusion between plaintiff No.1 and defendant No.1 Anand Datwani as she has totally taken the contrary stand in respect inter alia of shareholding of plaintiff No.2 after the report of CFSL dated 17th September, 2009 declaring the signatures of Nitya Bharaney on the share transfer instruments submitted by Anand Datwani i.e. could not be connected with the admitted signatures. Therefore, no prejudice would be caused if the defendant No.3 be transposed as plaintiff. The other two applications seeking the same relief filed by defendants No.2 and 4 for the similar reliefs were not argued by the counsel probably because the rejoinders in those applications were not filed by them."

"102. Thus, it is necessary to allow his application by permitting him as plaintiff so that substantial question is decided against the other defendants in view of the reasons that the plaintiffs through plaintiff No.1 wanted to withdraw the suit on account of settlement agreement. It is settled law when a plaintiff even attempts to withdraw the suit on the rights of other coplaintiffs or proforma defendants

FAO(OS)57/2013 & FAO(OS)60/2013 Page 6 who have an identical interest to that of the plaintiff, necessary orders can be passed by the Court against the said plaintiff as this Court has got apprehension that the plaintiff No.1 may now again abandon the suit in collusion with the defendant No.1 as alleged by defendant No.3 and may cause injustice to the other defendants."

8. Counsel for the respondents submitted that the conduct of the

plaintiff in suit No.556/2008, i.e. Ms. Jamna Datwani was such that

the Court could have reasonably inferred that she had abandoned the

claim in the suit. It was in these circumstances that the learned Single

Judge inferred that Shri Janak Datwani could be conveniently

transposed as a party entitled to continue the proceedings.

9. The two suits in this case, i.e. CS(OS) No.118/2007 and

CS(OS)No.556/2008 were instituted in two successive years. So far

as the appellants' challenge to the impugned order, to the extent it

allows amendment with regard to the ownership of 2500 shares of

Shahdadpuri is concerned, the Court is of the view that no exception

can be taken as regards the approach of the learned Single Judge. The

claim under the suit was for declaration that the plaintiff is the owner

and entitled to exercise his rights as such over the 2500 shares of the

FAO(OS)57/2013 & FAO(OS)60/2013 Page 7 company in question, i.e. CNA Exports Pvt. Ltd. That the plaintiff did

not fully describe how he came by the shares or even contracted

himself into his present position from the earlier position, where he

claimed to be the original allottee, might raise issues; however, this

Court is of the opinion that at the stage of amendment the position of

law being what it is, that the Court should be liberal in its approach,

the impugned judgment cannot be faulted. As far as the second

question, i.e. transfer of 2500 shares to Janak Datwani by the plaintiff

in CS(OS)No.556/2008, this Court is of the opinion that the learned

Single Judge overlooked the fact that this was a subsequent event and

impinged upon Mr.Janak Datwani's title to the shares. Concededly,

Janak Datwani has preferred at least three original substantive

proceedings, i.e. suit CS(OS)No.1113/2007, 1798/2011 and

2444/2013 . It is for him to agitate the manner in which he came by

shares - whether by transfer or by some other means, as claimed by

Janak Datwani. Moreover, if the plaintiff Shahdadpuri's version were

to be ultimately accepted, Janak Datwani's title, which is based on

subsequent events, would in any event be secured.

FAO(OS)57/2013 & FAO(OS)60/2013 Page 8

10. In these circumstances, the Court is of the opinion that the

Single Judge fell into the error in permitting the amendments to the

suit to this extent. The said amendments, proposed by para 5(F) and

additional prayer (h) of the application 8812/2001 are consequently

not allowed; the impugned order is, therefore, set aside to such extent.

11. So far as the submission of the appellant, vis-a-vis the order

pertaining to the carriage of Suit No.556/2008 is concerned, the

previous narrative would disclose that Jamna Datwani preferred two

applications seeking to withdraw the suit, which were later

withdrawn. Counsel had made a statement on 23rd February, 2012

clarifying that the plaintiff - Smt. Jamna Datwani - did not wish to

withdraw the suit. The impugned order discusses the other parties'

submissions with regard to the plaintiff's (Jamuna Datwani's)

abandonment of the suit, but does not attach much importance to her

withdrawal of the two applications. In the light of these facts, this

Court feels that the impugned order directed to transpose of Janak

Datwani as the plaintiff in suit No.556/2008 was not called for.

12. In view of the above discussion, the appeal has to partly

succeed; the impugned order today to the extent it has permitted

FAO(OS)57/2013 & FAO(OS)60/2013 Page 9 amendments to para 5(F), para 10 and additional prayer(h) in

IA 8812/2011 is allowed to the extent Mr. Shahdadpuri claims he has

gifted the shares to sixth defendant, but not to permit Mr. Janak

Datwani to agitate his shareholding in the present suit. That apart,

amendments allowed in the impugned order are hereby set aside. The

application for transposing in CS(OS)No.556/2008, i.e. CM

No.737/2011 had to be dismissed. In the result, FAO(OS) 57/2013 is

partly allowed to the extent indicated in para 10 above.

FAO(OS) 60/2013 is allowed. No costs.

S. RAVINDRA BHAT, J (JUDGE)

NAJMI WAZIRI, J (JUDGE) JULY 30, 2013 'sn'

FAO(OS)57/2013 & FAO(OS)60/2013 Page 10