TMI Blog2022 (4) TMI 1553X X X X Extracts X X X X X X X X Extracts X X X X ..... riate the sale proceeds or bring a suit and retain the pledged security. The plaintiff has assailed the action of defendant no. 1 in transferring the pledged shares in favour of defendant no. 2 and the exercise of rights over the pledged shares by defendant no. 2 as if the general opportunity in those shares has been transferred to defendant no. 2. The case now sought to be set up by the plaintiff is that the very transaction of creation pledge was vitiated by fraud. Support is sought to be drawn from the lodging of the complaint by defendant no. 2 in respect of the said transaction. Firstly, the lodging of the complaint by defendant no. 2 does not seem to be in serious contest. Secondly, the fact remains that amendment is sought at the nascent stage of the trial. Neither the element of delay nor want of due diligence has any role to play. Thus, there is no likelihood of prejudice to the defendants. The defendants will have adequate opportunity to meet the case proposed to be set up by the plaintiff. Application allowed. - N.J. Jamadar, J. For the Appellant : Navroz Seervai, Senior Advocate, Gulnar Mistry, Shreni Shetty, Krusha Maheshwari and Swati Chandan, i/b ANB L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to exercise any other right qua the suit shares as if the general property in the suit shares was transferred to defendant nos. 1 and 2, the plaintiff approached the Court seeking declaration and consequential reliefs. 4. In the said suit, the plaintiff prayed for ad-interim reliefs primarily in the nature of restraining defendant nos. 1 and 2 from participating in the then scheduled AGM and/or exercising any rights including the voting rights in respect of the suit shares. By an order dated 23rd December, 2021, the prayer for ad-interim relief was rejected without recording reasons as the plaintiff acceded to the said course. 5. The plaintiff has now taken out this application with the assertion that in or around February, 2022, the plaintiff discovered that the consideration for the pledge of the suit shares is fraudulent and unlawful. The agreement whereunder the pledge was created is void as per Section 23 of the Indian Contract Act. Since the financial facilities, which were advanced by defendant no. 2 and secured by the pledge of the suit shares, were tainted by fraud, the plaintiff seeks to amend the plaint to incorporate the averments in support of the plea of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the suit does not preclude the plaintiff from asserting a case that the transaction of pledge was vitiated by fraud, especially when the fact that defendant no. 2 Bank had also lodged a complaint with EOW regarding the said transaction is indisputable. Mr. Seervai would further urge that the proposed amendment in no manner changes the character of the suit. In any event, according to Mr. Seervai, no prejudice whatsoever is likely to be caused to the defendant as the defendants would have the opportunity to make the case sought to be set up by the plaintiff by way of amendment. Laying emphasis on the pre-trial stage, Mr. Seervai would urge that such amendments are required to be allowed liberally. To lend support to these submissions, Mr. Seervai placed reliance on the judgments of the Supreme Court in the case of Ragu Thilak D. John vs. S. Rayappan and others (2001) 2 SCC 472 and Sampath Kumar Vs. Ayyakannu and another (2002) 7 SCC 559 9. In opposition to this, Mr. Khambata, the learned Senior Counsel for defendant no. 2 submitted that there can be no qualm over the propositions of law which govern an application for amendment of pleadings, propounded by Mr. Seervai. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of State of Andhra Pradesh others vs. Pioneer Builders, A.P. 2006 (12) SCC 119. The Supreme Court expounded the principles which govern the exercise of jurisdiction to allow the amendment in following words: 21. Principles governing amendment of pleadings are well-settled. Order VI Rule 17 C.P.C. deals with the amendment of pleadings and provides that the Court may at any stage of the proceedings allow either party to alter or amend pleadings in such a 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. It is trite that though an amendment cannot be claimed as a matter of right under all circumstances, yet the power to allow the amendment is wide and can be exercised at any stage of the proceedings in the interest of justice. It is equally well-settled that unless serious injustice or irreparable loss is likely to be caused to the other side, the Court should adopt liberal approach and not a hyper-technical approach particularly in a case where the other side can be compensated with costs. Dominant object to allow the amendment in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of each individual case. No straitjacket formula can be laid down. The fact remains that a mere delay cannot be a ground for refusing a prayer for amendment. 14. Readverting to the facts of the case, in the light of the aforesaid enunciation of law, the principal ground of challenge is the alleged change in the nature of the suit. Mr. Khambata would urge that the case at hand is not only one of alteration of very character of the suit but the destruction of the original case pleaded by the plaintiff. Emphasis was laid on the fact that in the plaint the plaintiff has explicitly asserted that it is not relying upon the Pledge Deeds. Yet, by way of proposed amendment, the plaintiff professes to assail the very transaction of pledge. This is legally impermissible, submitted Mr. Khambata. 15. The aforesaid submission, at a first blush, appears attractive. However, upon a close scrutiny, the submission does not merit countenance. Undoubtedly, the plaint is premised on the limited nature of the rights of pledgee i.e. either sale the pledged security and appropriate the sale proceeds or bring a suit and retain the pledged security. The plaintiff has assailed the action of defendan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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