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TMI Blog2006 (3) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... imited Senior Executive (Officers) Welfare Trust. The respondents (defendant Nos. 1-4) are Trustees of the Trust and respondent No.5 is the Secretary of the Trust. The Trust purchased 19,314 equity shares of Godfrey Philips (India) Limited (in short 'GPI') in the name of respondent No.1 in his capacity as a trustee of the Trust. GPI issued bonus shares in the ratio of 1:1 to its existing shareholders. Bonus shares were issued in the ratio of 1:1 in the year of 1992-93. By reason of the above, the Trust became entitled to 57,942 shares of GPI. According to the appellant, the bonus shares issued have not been forwarded to the Trust and the share certificates despatched by GPI from time to time were not received by the Secretary of the Trust. It was further stated that a new account was opened by respondent No.1 at Oriental Bank of Commerce in his name and not in the name of the Trust and is being operated by respondent No.1. Since the beneficiaries of the Trust were not deriving any benefit from the Trust and as such the appellants were constrained to file a suit for declaration, permanent injunction and mandatory injunction in the High Court of Delhi, which was registered as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is pertinent to mention that since 1991-92, even the dividend declared on GPI shares are being solely appropriated by the defendant no.1 to the exclusion of the beneficiaries. Since defendant no.1 who is holding the said shares of the Trust is deriving benefit by holding the shares, the beneficiaries of the Trust are being deprived from the benefit which they are entitled to. It is in the interest of justice that the said shares may be sold and then invested in Government Bonds and/or Securities which will be in interest of beneficiaries, because at present the beneficiaries are not deriving any benefit by virtue of the said shares which are in power and possession of defendant no.1 as is evident from the records of the case. Similarly, the appellants sought amendment in paragraph 15 and want to incorporate relief of mandatory injunction as per prayer (b-1) to be read as under:- RELIEF VALUATION FOR COURT FEE COURT FEE THE PURPOSES OF PAID JURISDICTION For the Relief of Mandatory Injunction Rs. 130.00 Rs. 130.00 Rs. 13.00 (as per prayer b-1) herein Pass a decree of Mandatory injunction directing the defendants to sell the shares of GPI held by the Trust and use the sale proceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iaries because presently the beneficiaries were not deriving any benefit by virtue of the said shares which are in power and possession of respondent No.1 as is evident from the records. Mr. Rohtagi, learned senior counsel for the appellants, in support of his contention placed strong reliance on the following three judgments of this Court being M/s Ganesh Trading Co. vs. Moji Ram (1978) 2 SCC 91, Jai Jai Ram Manohar Lal vs. National Building Material Supply, Gurgaon, 1969 (1) SCC 869 = AIR 1969 SC 1267, Ragu Thilak D. John vs. S. Rayappan and Others (2001) 2 SCC 472. Per contra, Mr. Ganesh, learned senior counsel for the respondent submitted that the judgment of the Division Bench is completely in line with the settled legal position that an application for amendment of a plaint will not be allowed if it seeks to introduce into the plaint a new and different case which is inconsistent with the case originally made out in the plaint or, if the amendment has not been moved bona fide or in good faith, but only for the purpose of achieving some collateral/objective which is not bona fide. According to Mr. Ganesh, the amendment sought to be introduced by the appellants amendment appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trust, which is directly contrary to what is contemplated and provided by Sections 60 & 61. It was also submitted that the proposed amendments are also utterly lacking in bonafides or good faith and that the suit was targeted at Mr. K.K. Modi respondent No.1/Defendant No.1 and the only object of the suit was clearly to ensure that K.K. Modi Group would be denied the voting power in respect of the GPI shares held by the Trust. Our attention was also drawn to the various IAs filed and argued before the High Court and the orders passed thereon. Concluding his argument Mr. Ganesh submitted that the present application for amendment is an abuse of the process of Court and this Court ought not to entertain such frivolous applications. Mr. Ganesh, in support of his contention, relied on the following judgments:- 1. K.K. Modi vs. K.N. Modi and Others, (1998) 3 SCC 573, 2. Lord Simonds, Sir John Beaumont and Sir Lionel Leach, AIR (37) 1950 PC 68, 3. Kumaraswami Gounder and Others vs. D.R. Nanjappa Gounder (dead) and Others, AIR 1978 Madras 285 FB. We have carefully gone through the relevant pleadings, annexures and the judgment rendered by the learned single Judge and of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 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 has expressed certain opinion 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 rights of both parties and to sub-serve the ends of justice. It is settled by 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. 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 am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the appellants, he will be the loser and, therefore, it is solely on account of the attitude on the part of respondent No.1 that the appellants have constrained to seek relief against the same. We shall now consider the argument of the learned senior counsel for the respondent on Sections 60 and 61 of the Trusts Act. It was submitted by the appellants that since respondent No.1 did not act in a bonafide manner as a result of which the appellants were compelled to file the suit before the High Court in the capacity of the beneficiaries of the Trust and that the amended plaint is not alien and extraneous to the ambit and purview of Sections 60 and 61 of the Trusts Act. We shall now consider the judgments cited by learned senior counsel for the appellants:- 1. M/s Ganesh Trading Co. vs. Moji Ram (1978) 2 SCC 91 This Court held that the main rules of pleadings in Order 6, CPC, 1908, show that provision for the amendment of pleadings subject to such terms as to costs and giving to all parties concerned necessary opportunities to meet exact situations resulting from any amendment, are intended for promoting the ends of justice and not for defeating them. This Court furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a hypertechnical approach. Liberal approach should be the general rule particularly in cases where the other side can be compensated with the costs. Technicalities of law should not be permitted to hamper the courts in the administration of justice between the parties. Amendments are allowed in the pleadings to avoid uncalled- for multiplicity of litigation." We shall now consider the judgment relied on by Mr. Ganesh, learned senior counsel for the respondent. 1. K.K. Modi vs. K.N. Modi and Others, (1998) 3 SCC 573 This civil appeal was filed by K.K. Modi against K.N. Modi and Others and this judgment was relied on by Mr. Ganesh to show that the parties are litigating before different forums and that the directions issued by this Court pending final disposal of the suit in the Delhi High Court. 2. Lord Simonds, Sir John Beaumont and Sir Lionel Leach, AIR (37) 1950 PC 68, The Privy Council, in the above case, has observed as under:- "The powers of amendment must be exercised in accordance with legal principles. An amendment which involves the setting up of a new case and alters the real matter in controversy between the parties cannot be allowed." 3. Kumaraswami Gounder and Oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PI) and the defendant no. 1 took over the management and control of Godfrey Philips Ltd. in the year 1980 or so. The Trust as of date owns 77256 shares of GPI. But 57942 of the shares are in the exclusive power and possession of defendant no.1. Only 19314 shares of GPI are in the possession of Defendant no. 5 being the Secretary of the Trust. 7. It is stated that GPI declared a dividend of Rs. 7/- per share in the year 1996- 97 when the market price was rising from Rs. 250-300/- per share which means a mere 2.5% return on the investment per annum. If the said GPI shares were to be sold and then invested in Government Bonds/Securities the investments would yield a minimum return of 10% to 12% per annum. 8. It is pertinent to mention that since 1991-92, even the dividends declared on GPI shares are being solely appropriated by the defendant no. 1 to the exclusion of the beneficiaries. Since defendant no.1 who is holding the said shares of the Trust is deriving benefit by holding the shares, the beneficiaries of the Trust are being deprived from the benefit which they are entitled to. It is in the interest of justice that the said shares may be sold and then invested in Government B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e beneficiaries of the trust? "O.P.D". 4) Whether the defendant no. 1 has misused the assets of the trust? "O.P.D". 5) Whether the plaintiffs are entitled to the relief claimed in the plaint in view of terms of clause 19 of the Trust? 27.08.2001 Appellate Court allowed the appeal filed by respondent No.1 and dismissed the application of the appellant for amendment of the plaint. 03.12.2001 SLP filed 18.01.2002 Notice was issued in the SLP - Further proceedings in the suit was stayed until further orders. 26.08.2002 Interim order dated 18.01.2002 shall continue to remain in operation during the pendency of the appeal. From the above noted dates, it is clearly seen that the respondents have filed their amended written statement and the appellants their replication to the amended written statement and conducted admission and denial of documents and more so the issues were framed and despite the said fact, the High Court has allowed the appeal of the respondents and dis-allowed the application of the petitioner for amendment of the plaint. Since the Court has entered into a discussion into the correctness or falsity of the case in the amendment, we have no other option but to i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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