Delhi High Court

J.H.Jewelers vs Umed Chindaliya & Ors on 2 November, 2017

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*    IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     Date of decision:02.11.2017

+     CS(COMM) 180/2017
      J.H.JEWELERS                                          ..... Plaintiff
                    Through:          Mr. Manav Gupta, Ms. Esha Dutta,
                                      Mr. Sahil Garg and Mr. Anupam
                                      Pandey, Advocates
              versus
      UMED CHINDALIYA & ORS                        ..... Defendants
                     Through: Mr. Dalip Mehra with Mr. Siddharth
                              Yadav, Advocate for D-1 & 2
                              Mr. Ateev Mathur, Mr. Amol Sharma
                              & Ms. Jagriti Ahuja, Advocate for
                              D-4
      CORAM:
      HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J. (ORAL)

IA No. 11683/2017

1. This application is filed under Order 14 Rule 5 of CPC by defendant nos. 1 and 2 for amendment of issues framed on 18.09.2017. As per the application, the applicant seeks modification of issue nos. 4,5,6 & 7 and seeks 2 additional issues.

2. The plaintiff has filed the present suit seeking recovery of Rs. 10,17,42,312/-. The case of the plaintiff is that defendant no.1 who was working at the post of accountant with the plaintiff had opened an account with defendant no.4 bank without complying with the KYC norms. He had deposited 41 cheques dishonestly into the said account. On the analysis of the bank statements, it transpired that defendant no.1 has been operating this

account and has been benefitting himself by utilising and misappropriating the account of the plaintiff.

3. Based on the above allegations, this Court framed the following issues on 18.09.2017 :-

1. Whether the suit is bad for non-joinder of parties as alleged? OPD

2. Whether the plaint do not disclose any cause of action, as alleged? OPD

3. Whether there is no privity of contract between the parties as alleged? OPD

4. Whether the plaint is not filed by a duly authorised person? OPD

5. Whether the defendant No.l has not illegally acquired the funds belonging to the plaintiff? OPD 1 & 2

6. Whether the subject properties have not been acquired from such illegal funds by defendants No.l and 2? OPD 1 &2

7. Whether the plaintiff is entitle to a decree against the defendant nos. 1 and 2 jointly and severally for an amount of Rs.l0, 17,42,312/-?

8. Whether the plaintiff is entitle to an interest, and if so, at what rate and for which period? OPP

9. Whether the plaintiff is entitle to a decree of injunction as prayed? OPP

10. Relief, if any.

4. On 11.10.2017 when the above application came up for hearing, this Court noted that as far as issue nos. 4, 5 and 6 are concerned, they have been correctly framed and hence, no intervention is required. On two additional issues which were sought to be framed as per para 5 of the application, it was noted that the plaintiff has no objection to the same. Regarding issue no. 7, the Court had noted the plea of the plaintiff that issue no.7 needs an amendment. The order also noted the plea of the defendant no. 4 that he opposes the reframing of the same.

5. Defendant no.4 in Court today has filed the reply to the present application. The same is taken on record. The Registry may scan the same and have the same placed on record.

6. I have heard learned counsel for the parties.

7. Learned counsel for the plaintiff and defendant nos. 1 and 2 have urged that as per the plaint filed, the plaintiff has sought to claim the recovery of the amount of Rs. 10,17,14,312/- jointly and severally against all the defendants; i.e. defendant no. 1 - the employee of the plaintiff and his wife defendant no. 2, Defendant no. 4 the Bank, where the account is purportedly opened by defendant no.1. As far as defendant no.3 is concerned, it is stated that the said entity benefitted allegedly from the money that was siphoned by defendants No.1 and 2.

Learned counsel for the plaintiff further submits that the issue No.7 framed on 18.09.2017 was wrongly framed and the issue has to be framed as i.e. as to whether the defendants are jointly and severally liable for the said

amount.

8. Defendant no. 4 has vehemently opposed the present application. He states that there is no averment in the plaint which would justify the conclusion that the plaintiff is seeking any recovery from defendant no. 4 and hence, defendant no.4 cannot be fastened with any liability.

9. Order 14 Rule 1 and Order 14 Rule 5 CPC reads as follows :-

"Framing of issues :- (1) Issues arise when a material proposition of fact or law is affirmed by the one party and denied by the other.

(2)Material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence.

(3) Each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue.

(4) Issues are of two kinds :

(a) issues of fact,

(b) issues of law.

Order 14 Rule 5:- Power to amend and strike out issues,-- (1) The Court may at any time before passing a decree amend the issues or frame additional issues on such terms as it thinks fit, and all such amendments or additional issues as may be necessary for determining the matters in controversy between the parties shall be so made or famed.

(2) The Court may also, at any time before passing a decree, strike out any issues that appear to it to be wrongly framed or introduced."

10. Hence, issue arises when a material proposition of fact and law is

raised by one party and denied by the other. The court may at any stage amend issues which may be necessary for determining the matters in controversy between the parties.

11. A Division Bench of this court in Finolex Cables Ltd. v. Finolux Auto Private Limited AIR 2007 Delhi 268 outlined the power of the court under Order 14 Rule 5 CPC as follows:-

"Rule 5 of Order XIV CPC becomes relevant in this context. Though this Rule deals with amendment or striking out issues, the Court is given power to amend the issues or frame additional issues on such terms as it thinks fit "at any time before passing a decree". When the Court is given power to amend issues or frame additional issues at any stage of the suit, before the decree is passed, we fail to understand as to why the issues be not framed now, which exercise would be only a reflection of determining as to whether the parties are at variance with each other. It would facilitate the complete adjudication of the controversies involved and would rather be in the interest of both the parties."

12. In the present case, a perusal of the plaint would show that in para 7, the following allegation is made against defendant no.4.

"7. That Police investigation has revealed that the pseudo, account opened by the Defendant No.l with the Defendant No.4 was done without complying with KYC norms. The entire plan of the Defendant No.l to defraud the Plaintiff had been enabled by the Defendant No.4 and its various officials."

Other paras of the plaint also refer to defendant No.4. The prayer clause thereafter reads as follows :

(a).pass and pronounce a money decree in favour of the Plaintiff and against the Defendants in the sum of Rs. 10,17,42,312/- along with interest, pendente lite and future @ 24 per cent per annum till the date of realization;

13. It is quite clear that allegations have been made against defendant no.4 and relief is also sought for a decree for the sum of Rs. 10,17,42,312/- against all the defendants including defendant no.4.

14. It may be that the plea raised by the plaintiff is not very well articulated, but it cannot be said that there are no allegations raised against defendant no.4 and no claim is sought against defendant no.4. A reading of the plaint would show that the case of the plaintiff is that the defendant no.4 has failed to carry out its duties on account of which, loss has been suffered by the plaintiff.

15. Accordingly, in my opinion, keeping in view the above provision of Order 14 Rule 1 and Order 14 Rule 5 CPC, it is quite clear that the issue that was framed on 18.09.2017 has to be corrected. Such an amendment is necessary for determination of the matters in controversy.

16. Accordingly, issue no. 7 will now read as follows :-