Pankaj Oswal vs Aruna Oswal & Ors
2019 Latest Caselaw 3889 Del

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*    IN THE HIGH COURT OF DELHI AT NEW DELHI
                                    Judgment Reserved on : 02.08.2019
%                                   Judgment Pronounced on: 22.08.2019
+     CS(OS) 53/2017
      PANKAJ OSWAL                                        ..... Plaintiff
                           Through       Mr.Sanjeev Puri, Sr.Adv. with
                                         Mr.Mayank Mishra and Mr.Raghav
                                         Sabharwal, Advs.

                           versus

      ARUNA OSWAL & ORS                               ..... Defendants
                  Through                Mr.Sandeep Sethi, Sr.Adv. with
                                         Mr.Sanjiv Kakra, Mr.Bharat Arora
                                         and Mr.Gaurav Arora, Advs. for D-1
                                         & D-2.
                                         Mr.Ajay Sondhi, Adv. for D-3.
      CORAM:
      HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J.

IA No.14656/2018

1. This application is filed by defendants No. 1 and 2 under Order 6 Rules 17 CPC for amendment of the written statement. The plaintiff has filed the accompanying suit seeking a preliminary decree of partition declaring that the plaintiff is entitled to 1/4th share in the suit properties listed in the schedule as also the properties belonging to the Oswal family. A decree of rendition of accounts with respect to the profit and proceeds realized by the defendants from the suit properties as also the properties belonging to the

Oswal Family after the demise of Sh.Abhey Kumar Oswal is also sought. Other connected reliefs are also sought in the plaint.

2. It is stated that the plaintiff is the eldest son of Late Sh.Abhey Kumar Oswal. It is further stated that plaintiff‟s father was a Hindu by religion and a substantial shareholder, director and chairperson of the Board of Directors of Oswal Agro Mills Ltd. and Oswal Greentech Ltd. In addition to the above, the father owned large number of movable and immovable properties. It is stated that Sh.Abhey Kumar Oswal died intestate on 29.03.2016. Hence, the present suit.

3. The defendants filed the written statement where they have denied the claim of the plaintiff. It has been stated that defendant No. 1 was appointed by Late Sh.Abhey Kumar Oswal as his nominee in his demat account and that the said nomination constitutes the last testament of late Sh.Abhey Kumar Oswal. Other such defences are also taken.

4. Issues have yet to be framed. Defendants No. 1 and 2 have now filed the present application seeking amendment in their written statement. Broadly by the amendment what is sought to be added is that on account of the activities of the plaintiff including certain forgery, etc. late Sh.Abhey Kumar Oswal had in October 2006 decided to completely expel, disown, disinherit the plaintiff from his estate. It is stated that late Sh.Abhey Kumar Oswal categorically stated that defendant No. 1 shall be entitled to inherit his estate and the plaintiff will have no right, title or interest in the estate of Late Sh.Abhey Kumar Oswal. An oral family settlement was arrived at in October 2006 in the Oswal Family and as such plaintiff is not entitled to inherit any part of the estate of Late Sh. Abhay Kumar Oswal. It is further stated that Late Sh. Abhay Kumar Oswal took various steps like removal of the

plaintiff‟s name from the HUF account held in HDFC bank. He also included defendant No. 1 and 2 as Coparceners in the HUF account held by him. Late Sh.Abhey Kumar Oswal also appointed defendant No. 1 as his sole nominee in his demat account.

5. The plaintiff has strongly opposed the above application.

6. I have heard learned senior counsel for the parties.

7. Learned senior counsel for defendants No. 1 and 2 has urged that there was nothing in the original written statement to show that the answering defendants had conceded to the plea of the plaintiff that Late Sh.Abhey Kumar Oswal died intestate. It is stated relying upon the paras of the written statement that it was clearly spelt out in the same that Late Sh.Abhey Kumar Oswal in his demat account had nominated defendant No. 1 to the complete exclusion of other parties showing his intention that defendant No. 1 would succeed and inherit the estate. Based on subsequent facts now made available, reliance is also sought to be placed on the family settlement which was inadvertently not mentioned. Hence, the need to amend the written statement. Reliance is placed on the judgments of the Supreme Court in the case of Baldev Singh & Ors. Vs. Manohar Singh & Anr., (2006) 6 SCC 498 and Usha Bala Shahed Swami & Ors. vs. Kiran Appaso Swami & Ors., (2007) 5 SCC 602 to contend that while amending a written statement even contradictory statements or statements substituting or altering a defence or inconsistent pleas are allowed to be added.

8. Learned senior counsel for the plaintiff has however strongly urged that there are clear admissions in the written statement by defendants No. 1 and 2 which would have led to passing of a decree in favour of the plaintiff. He also relies upon para 9 of the written statement where it is stated that

before partition of the estate of Late Sh.Abhey Kumar Oswal all his debts and liabilities are liable to be settled. He states that these admissions cannot be retraced by the defendants by amendment to the written statement. Reliance is placed on the judgment of a Coordinate Bench of this court in Gurcharan Kaur & Ors. vs. Ranjeet Singh Sandhu, 2017 SCC OnLine Del. 11489 and of the Supreme Court in the case of Modi Spinning & Weaving Mills Co. Ltd. & Anr. vs. M/s. Ladha Ram & Co., (1976) 4 SCC 320. He also relies upon the pleadings of defendant No. 1 in the suits filed by her, namely, CS(COMM) 1206/2018 and CS(COMM) 1208/2018 for recovery of the alleged dues from third parties being the LR of Late Sh.Abhey Kumar Oswal. He points that in the said proceedings the plaintiff has been impleaded as one of the LRs of Late Sh.Abhey Kumar Oswal.

9. I may first see the legal position regarding the amendment of the written statement. Order 6 Rule 17 CPC reads as follows:-

"ORDER VI : PLEADINGS GENERALLY xxx

17. Amendment of pleadings

The Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.

xxx"

10. The Supreme Court in Baldev Singh & Ors. vs. Manohar Singh & Anr.(supra) noted the legal position regarding the amendment of the written statement as follows:-

"15. Let us now take up the last ground on which the application for amendment of the written statement was rejected by the High Court as well as the trial court. The rejection was made on the ground that inconsistent plea cannot be allowed to be taken. We are unable to appreciate the ground of rejection made by the High Court as well as the trial court. After going through the pleadings and also the statements made in the application for amendment of the written statement, we fail to understand how inconsistent plea could be said to have been taken by the appellants in their application for amendment of the written statement, excepting the plea taken by the appellants in the application for amendment of written statement regarding the joint ownership of the suit property. Accordingly, on facts, we are not satisfied that the application for amendment of the written statement could be rejected also on this ground. That apart, it is now well settled that an amendment of a plaint and amendment of a written statement are not necessarily governed by exactly the same principle. It is true that some general principles are certainly common to both, but the rules that the plaintiff cannot be allowed to amend his pleadings so as to alter materially or substitute his cause of action or the nature of his claim has necessarily no counterpart in the law relating to amendment of the written statement. Adding a new ground of defence or substituting or altering a defence does not raise the same problem as adding, altering or substituting a new cause of action. Accordingly, in the case of amendment of written statement, the courts are inclined to be more liberal in allowing amendment of the written statement than of plaint and question of prejudice is less likely to operate with same rigour in the former than in the latter case.

16. This being the position, we are therefore of the view that inconsistent pleas can be raised by the defendants in the written statement although the same may not be permissible in the case of plaint. In Modi Spg. and Wvg. Mills Co. Ltd. v. Ladha Ram &

Co.[(1976) 4 SCC 320] this principle has been enunciated by this Court in which it has been clearly laid down that inconsistent or alternative pleas can be made in the written statement. Accordingly, the High Court and the trial court had gone wrong in holding that the defendant-appellants are not allowed to take inconsistent pleas in their defence."

11. Similarly reference may be had to the judgment of the Supreme Court in Usha Bala Shahed Swami & Ors. vs. Kiran Appaso Swami & Ors.(supra) where the Supreme Court stated as follows:-

"21. As we have already noted herein earlier that in allowing the amendment of the written statement a liberal approach is a general view when admittedly in the event of allowing the amendment the other party can be compensated in money. Technicality of law should not be permitted to hamper the courts in the administration of justice between the parties. In L.J. Leach & Co. Ltd. v. Jardine Skinner & Co. [AIR 1957 SC 357] this Court observed "that the courts are more generous in allowing amendment of the written statement as the question of prejudice is less likely to operate in that event".

In that case this Court also held "that the defendant has right to take alternative plea in defence which, however, is subject to an exception that by the proposed amendment the other side should not be subjected to serious injustice".

22. Keeping these principles in mind, namely, that in a case of amendment of a written statement the courts would be more liberal in allowing than that of a plaint as the question of prejudice would be far less in the former than in the latter and addition of a new ground of defence or substituting or altering a defence or taking inconsistent pleas in the written statement can also be allowed, we may now proceed to consider whether the High Court was justified in rejecting the application for amendment of the written statement."

12. The legal position that follows from the above judgments is that law is more liberal when an application for amendment to a written statement is filed and that while amending a written statement, adding a new ground of defence or substituting or altering a defence is permissible. The courts are more liberal regarding amendment to a written statement.

13. I may also refer to the judgment relied upon by the learned senior counsel for the plaintiff. In the case of Modi Spinning & Weaving Mills Co. Ltd. & Anr. vs. M/s. Lodha Ram & Co.(supra) the Supreme Court was dealing with a matter where in the written statement the defendant had stated that the agreement in question is applicable to transactions in which the plaintiff works as a stockiest-cum-distributor of the defendant and is not applicable to the transaction to which the plaintiff acts as a principle. Three years after the filing of the written statement an application was filed for amendment of the written statement where deletion of paragraphs 25 and 26 were sought and substitution of new paragraphs. The proposed amendments sought to add that the plaintiff throughout acted as an agent of the defendant and hence has no locus standi to file the suit. In those facts the Supreme Court held as follows:-

"9. The decision of the trial court is correct. The defendants cannot be allowed to change completely the case made in paras 25 and 26 of the written statement and substitute an entirely different and new case.

10. It is true that inconsistent pleas can be made in pleadings but the effect of substitution of paras 25 and 26 is not making inconsistent and alternative pleadings but it is seeking to displace the plaintiff completely from the admissions made by the defendants in the written statement. If such amendments are

allowed the plaintiff will be irretrievably prejudiced by being denied the opportunity of extracting the admission from the defendants. The High Court rightly rejected the application for amendment and agreed with the trial court."

14. Hence, the Supreme Court held that by the proposed amendment in the written statement, the defendant was seeking to displace the plaintiff completely from the admissions made by the defendant in the written statement. It further held that if such amendments were allowed, it would mean that the plaintiff would irretrievably be prejudiced.

15. The question is whether factually there is any admission contained in the written statement which is sought to be retraced by the defendants by the proposed amendments. Admissions is defined in the Indian Evidence Act as follows:-

"17. Admission defined.--An admission is a statement, oral or documentary or contained in electronic form, which suggests any inference as to any fact in issue or relevant fact, and which is made by any of the persons, and under the circumstances, hereinafter mentioned."

16. Reference may be had to the judgment of the Division Bench of this court in the case of Daljit Singh & Anr. vs. Hari Steel & General Industries Ltd. & Ors., 2018 SCC OnLine Del. 13327 wherein this court explained Admissions. The Court held as follows:-

"What is an admission and what would be the effect thereof - legal position

57. Before considering the factual matrix, we may briefly allude to the applicable law thereon. The expression „admission of execution of a party to attest document' has been statutorily defined in Section 17 of the Evidence Act, 1872 as follows:

"17. Admission defined.-- An admission is a statement, oral or documentary 1[or contained in electronic form], which suggests any inference as to any fact in issue or relevant fact, and which is made by any of the persons, and under the circumstances, hereinafter mentioned."

58. The Black's Law Dictionary explains the expression „admission‟ as follows:

"Any statement or assertion made by a party to a case and offered against that party; an acknowledgment that facts are true."

17. In this context, I may have a look at paras 10 and 12 of the plaint. As per these paras, it is stated that Late Sh.Abhey Kumar Oswal, a Hindu died intestate without leaving a will or testamentary document. Para 12 of the plaint states that the interest in the two family companies devolved upon the plaintiff and the defendants as class 1 legal heirs. Paras 10 and 12 of the plaint read as follows:-

"10. The Plaintiffs father. Late Mr. Abhey Kumar Oswal, a Hindu by religion, was a substantial shareholder, director and chairperson of the board of directors of Oswal Agro Mills Limited ("OAML") and Oswal Greentech Limited ("OGL"), the two main holding companies of the Abhey Oswal Group. Unfortunately, he died on March 29, 2016. The sudden demise came as a shock to the family as he was hale and hearty and was touring Russia on a business trip. He died intestate, i.e. without leaving behind any will or testamentary document regarding disposition of his assets, interest in businesses, movable and immovable properties.

xxx

12. On April 2, 2016, while the family, friends and well-wishers of the Oswal family were mourning the sudden demise of Late

Mr. Abhey Kumar Oswal, board meetings of OAML and OGL were clandestinely convened behind the back of the Plaintiff. The Plaintiff has recently (and much after the Board Meetings were held) come to know that a board resolution was passed in the said meetings of Board of Directors of OAML and OGL appointing Defendant No. 1 as the additional Director and Chairperson of both the companies. Further, Defendant No. 1 and Mr. Anil Bhalla, who is a Director of OAML; and CEO and Managing Director of OGL, were severally authorized to act as authorized signatories and manage bank accounts of both the companies. Pertinently, Late Mr. Abhey Kumar Oswal held substantial beneficial interest in OAML and OGL which has devolved upon the Plaintiff and Defendants, as his Class I legal heirs. Shareholding of late Mr.Abhey Kumar Oswal as on date of his death in OAML and OGL stood as under:

      S. No.     Particulars                   Shares of late Mr.
                                               Abhey Kumar Oswal

      1.         Oswal Greentech Limited       28540318
      2.         Oswal Agro Mills Limited      53530960

It is pertinent to state that OAML and OGL have considerable assets and hold substantial shares in other companies, inter alia, PC Media Systems Ltd., New Delhi Television Ltd., News Nation Network Pvt. Ltd., Monnet Ispat &Energy Pvt. Ltd. and other group companies.

18. The written statement of defendants No. 1 and 2 in response states as follows:-

"10. That the contents of the paragraph No. 10 to the extent of averments with respect to Late Mr. Abhey Kumar Oswal being the shareholder, director and chairperson of M/s Oswal Agro Mills Limited and M/s Oswal Greentech Limited and as to his demise on 29.03.2016 are not disputed. It is, however, denied that Late Mr. Abhey Kumar Oswal died intestate, as alleged. It is submitted that the Answering Defendant No. 1 has been duly

appointed by Late Mr. Abhey Kumar Oswal as his nominee in his DEMAT accounts. Such nomination constitutes the legal testament of Late Mr. Abhey Kumar Oswal with Answering Defendant as the sole beneficiary holding the same to the exclusion of all others.

xxx

12. That the contents of paragraph No. 12 of the plaint are false, frivolous and misconceived and hence denied. It is specifically denied that the meetings of M/s Oswal Agro Mills Limited and M/s Oswal Greentech Limited were clandestinely convened, as alleged. It is submitted that holding of meeting of Board of Directors of M/s Oswal Agro Mills Limited and M/s Oswal Greentech Limited has nothing to do with estate of Late Mr. Abhey Kumar Oswal. Further, the Plaintiff has no role in these meetings and the said meetings were held as per law and in best interest of the Companies. It is denied that any interest of Late Mr. Abhey Kumar Oswal in M/s Oswal Agro Mills Limited and M/s Oswal Greentech Limited has devolved upon the Plaintiff, as alleged. It is reiterated that the Answering Defendant No. 1 has been duly appointed by Late Mr. Abhey Kumar Oswal as his nominee in his DEMAT accounts. Such nomination constitutes the valid and legal testament of Late Mr. Abhey Kumar Oswal with Answering Defendant as the sole beneficiary. Further, a shareholder is merely a creditor of a company and as such is entitled only to dividends if any or paid up value of the shares. Shareholders do not have any beneficial interest in the assets of the company."

19. Hence, a perusal of the written statement shows that there are prima facie no obvious admissions about any right having been inherited by the plaintiff. Reliance is sought to be placed on the nomination in the demat account to counter the contention of the plaintiff that he has inherited 1/4 th share in the estate of Late Sh. Abhey Kumar Oswal. The claim of the

plaintiff that he has inherited 1/4th share in the estate of Abhay Kumar Oswal has been rebutted.

20. By the present application the applicant/defendant seeks to add preliminary submissions where various pleas are raised about the alleged misdeeds of the plaintiff. It is also pointed out that late Shri Abhay Kumar Oswal decided to expel and disown the plaintiff and an oral family settlement was arrived at in the month of October 2006. In the family whereby it was agreed that the plaintiff would not be entitled to inherit any estate. Reliance is reiterated on the nominations made in favour of defendant No.1 by late Shri Abhay Kumar Oswal in the Stockholding Corporation of India. The applicant also seeks to add paras 4(a) to (d) stating details about the acts done by the plaintiff including filing of a petition before the NCLT. Chandigarh Bench. No part of the written statement is sought to be deleted.

21. Clearly, what is sought to be added are only additional grounds and additional defences which have not been taken. At best, it can be said that the original written statement is now sought to be amended by adding additional grounds to show why the plaintiff is not entitled to inherit the estate of late Sh.Abhay Kumar Oswal. It cannot be said that these grounds which are sought to be added take away any admissions made in the earlier written statement. Nothing from the original Written Statement is sought to be deleted.

22. Reliance of the learned senior counsel for the plaintiff on the averments made in CS(COMM) 1206/2018 and CS(COMM) 1208/2008 adding the plaintiff as one of the LRs of Late Sh. Abbey Kumar Oswal does

not in any manner have any bearing on the present amendment application. While considering the amendments sought to be added it is not for this court to dwell on the merits of the proposed additions sought to be made in the pleadings. If there is any admission in the pleadings of the said suit as claimed by the plaintiff, the plaintiff is free to urge the same at an appropriate stage. Reference in this context may be had to the judgment of the Supreme Court in the case of Raj Kumar Bhatia vs. Subhash Chander Bhatia, (2018) 2 SCC 87 wherein the Supreme Court held as follows:-

"12. This being the position, the case which was sought to be set up in the proposed amendment was an elaboration of what was stated in the written statement. The High Court has in the exercise of its jurisdiction under Article 227 of the Constitution entered upon the merits of the case which was sought to be set up by the appellant in the amendment. This is impermissible. Whether an amendment should be allowed is not dependent on whether the case which is proposed to be set up will eventually succeed at the trial. In enquiring into merits, the High Court transgressed the limitations on its jurisdiction under Article 227. In Sadhana Lodh v. National Insurance Co. Ltd. [Sadhana Lodh v. National Insurance Co. Ltd., (2003) 3 SCC 524 : 2003 SCC (Cri) 762] , this Court has held that the supervisory jurisdiction conferred on the High Court under Article 227 is confined only to see whether an inferior court or tribunal has proceeded within the parameters of its jurisdiction. In the exercise of its jurisdiction under Article 227, the High Court does not act as an appellate court or tribunal and it is not open to it to review or reassess the evidence upon which the inferior court or tribunal has passed an order. The trial court had in the considered exercise of its jurisdiction allowed the amendment of the written statement under Order 6 Rule 17 CPC. There was no reason for the High Court to interfere under Article 227. Allowing the amendment would not amount to the withdrawal of an admission contained in the written statement (as submitted by the respondent) since the amendment sought to elaborate upon an

existing defence. It would also be necessary to note that it was on 21-9-2013 that an amendment of the plaint was allowed by the trial court, following which the appellant had filed a written statement to the amended plaint incorporating its defence. The amendment would cause no prejudice to the plaintiff.

23. There is no merit in the opposition of the plaintiff to the present application. The amendments sought are necessary for the purpose of determining the real question in controversy between the parties.

24. In view of the above, the application is allowed subject to cost of Rs.25,000/-

JAYANT NATH (JUDGE) AUGUST 22, 2019 rb/n