Asiatic Oxygen Limited, Through Its Company Secretary, Shambu Singh v. Bihar Air Products Limited, Through Its Managing Director
2006-05-03
N.N.TIWARI
body2006
DigiLaw.ai
JUDGMENT Narendra Nath Tiwari, J. 1. In this writ application the petitioners have prayed for setting aside the order dated 19.12.05 passed by the Sub-Judge-1, Jamshedpur in Title Suit No. 63/2000 whereby learned Court below has rejected the petitioners application filed under Order 6 Rule 17 read with Section 151 of the C.P.C seeking a number of amendments in the plaint. 2. The brief fact giving rise to this case is that the petitioner No. 1 is a Public Limited Company, the petitioner Nos. 2 & 3 are the Private Limited Companies and the petitioner Nos. 4 & 5 are the Directors of the petitioner Nos. 1-3. The Bihar State Industrial Development Corporation Limited (respondent No. 2) and the Asiatic Oxygen Limited (petitioner No. 1) and its associates had entered into a collaboration agreement in January 1975 to set up a joint sector unit for manufacturing industrial gases at Jamshedpur and for that purpose a company, namely, the Bihar Air Products Limited (respondent No. 1) was incorporated on 25.3.75. It was decided that the petitioner No. 1 will be managing the company. The articles of association of the Bihar Air products Limited (in short BAPL) [respondent No. 1] provided that both the Bihar State Industrial Development Corporation Limited (in short BSIDC) [respondent No. 2] and the Asiatic Oxygen Limited (AOL) [the petitioner] and associates will hold at least 26% and 25% of the share capital of BAPL (respondent No. 1) respectively. Both the parties were entitled to nominate three Directors each in the Board of BAPL. Since the management of BAPL was to be done by AOL (petitioner No. 1) and associates, it was provided that one of the three nominee Directors of AOL (petitioner No. 1) and associates would be the Managing Director of BAPL to lead the day-to-day management and control the affairs of BAPL. One of the three nominee Directors of BSIDC (respondent No. 2) would be the Chairman of the Board of Directors of BAPL. The said AOL and BSIDC are the principal parties for running the BAPL. Pursuant to the said provision, the respondent No. 1 Board had appointed one of the nominees of the petitioner No. 1, namely, S.S. Mallick as the Managing Director of the respondent No. 1 since 1975. After passage of time due to old age and his family problems S.S. Mallick could not perform his duty efficiently.
Pursuant to the said provision, the respondent No. 1 Board had appointed one of the nominees of the petitioner No. 1, namely, S.S. Mallick as the Managing Director of the respondent No. 1 since 1975. After passage of time due to old age and his family problems S.S. Mallick could not perform his duty efficiently. As a result of which the respondent No. 1 was incurring losses. S.S. Mallick who was a nominee of petitioner No. 1, at the latters instance, tendered his resignation on 23.4.92 from the Board. The resignation was to take effect from 31.5.92. In the mean time, at the instigation of some interested persons in collusion with others S.S. Mallick turned hostile and started acting in a manner detrimental to the interest of the petitioners/collaborators. A Board Meeting of respondent No. 1 was called by the respondent No. 2 in collusion with the Ex. Company Secretary and S.S. Mallick on a very short notice, deliberately to prevent other Director representing financial intuitions and petitioners/collaborators to attend the said meeting. The nominee Directors of the respondent No. 2 and S.S. Mallick could attend the said meeting. In the said purported Board Meeting dated 29.5.92 resolutions were passed: (i) For accepting the withdrawal of resignation of S.S. Mallick, Managing Director (ii) For formation of a Management Committee and (iii) For taking complete control of the Bank Account of the respondent No. 1. In view thereof, pursuant to Article 101 of the Articles of Association of respondent No. 1, the petitioners withdrew the nomination of S.S. Mallick as their nominee Director and the Managing Director of respondent No. 1 and informed the respondent No. 2 accordingly. In spite of the same, at the instigation of Ex- Company Secretary and the then nominee Directors of the respondent No. 2, S.S. Mallick held himself out as the Managing Director and the Director of respondent No. 1.
In spite of the same, at the instigation of Ex- Company Secretary and the then nominee Directors of the respondent No. 2, S.S. Mallick held himself out as the Managing Director and the Director of respondent No. 1. In such circumstance the petitioners filed a suit in the Calcutta High Court being Suit No. 199/93 praying relief (a) For perpetual injunction restraining S.S. Mallick from acting as a Managing Director and the Director of the respondent No. 1 (b) For perpetual injunction restraining the defendants from acting upon or giving any effect to the resolutions allegedly passed in the Boards Meeting of the respondent No. 1 dated 29.5.92 relating to resignation of S.S. Mallick (c) For cancellation of the alleged Management Committee and operation of Bank Account of the respondent No. 1 and for other reliefs. Injunction was granted by Calcutta High Court in June 1993 (confirmed in July) restraining S.S. Mallick from acting as a Managing Director of the respondent No. 1 and commanding upon them that no Board meeting of the respondent No. 1 would be held without firstly appointing the Managing Director (nominee of petitioner No. 1). However, on appeal the Division Bench of Calcutta High Court held that no part of the cause of action arose for the suit within the ordinary original civil jurisdiction of the High Court of Calcutta and directed to return the plaint. The petitioners plaint and injunction petition were returned. Thereafter the petitioners filed a suit in the Court of the Sub- Judge, Jamshedpur which was registered as Title Suit No. 63/2000. The petitioner No. 1 then filed an application seeking injunction against the defendants. The Sub-Judge rejected the said application observing, inter alia, that though prayer was based on several subsequent developments, the plaintiffs have not bothered to bring the same on record by amending the plaint. Since the petitioners had filed the original suit in the year 1993 and except defendant Nos. 1 & 9 all others defendants ceased to exist in the office and pending framing of issues the said observation was made by the Sub-Judge, in order to bring the subsequent developments and facts on record, the petitioners filed a petition for amendment of the original plaint under Order 6 Rule 17 read with Section 151 of the C.P.C. on 25.1.02. 3. A rejoinder was filed by the defendants contesting the same.
3. A rejoinder was filed by the defendants contesting the same. Learned Court below by the impugned order dated 19.12.05 rejected the petitioners application for amendment mainly on two grounds: (i) The amendments have been prayed after much delay and after filing the written statement by the defendants (ii) More than 100 amendments as sought for would virtually change the nature of the suit. 4. Mr. Jay Saha, learned Counsel appearing on behalf of the petitioners, submitted that the said order of learned Court below is wholly erroneous and against the settled principles of law. Learned Counsel submitted that learned Sub-Judge failed to take into consideration that the amendment petition was flied on 25.1.02 in order to bring on record the subsequent events and also for making necessary corrections in the plaint which were required due to change of the place and the Court, i.e. from the High Court of Calcutta to the Court of the Sub-Judge, Jamshedpur. Several amendments are necessary for determining the existing real controversy between the concerned parties and also for the ends of justice. None of the amendments, prayed for, goes to change the nature of the suit and delay in making prayer for amendments can not be a ground for refusing the prayer in the circumstances of the case. Moreso, from the date of institution of the suit at Jamshedpur, there is no delay and without considering the same, learned Court below has wrongly rejected the petitioners prayer. 5 Mr. S.B. Gadodia, learned Counsel appearing on behalf of the respondents, on the other hand, submitted that the petitioners have prayed for more than 100 amendments which if allowed would go to completely change the nature of the suit and the prayer has been made after much delay and some items of the proposed amendments are also barred by limitation. Learned Counsel, however, fairly submitted that some amendments are formal in nature and the same should have been allowed, but most of the amendments particularly the amendment for addition of N.C. Mukherjee as defendant No. 10 and the relief sought for against the said defendant No. 10 and all amendments concerning the said defendant No. 10 are completely new for the case and the same cannot be allowed.
Any cause against the said addition of N.C. Mukherjee as defendant No. 10 gives rise to a new cause of action and the same would change the nature of the case earlier pleaded by the plaintiffs in the original plaint. 6. After hearing learned Counsel for the parties and perusing the impugned order of learned Court below, I find that though the petitioners have prayed for a large numbers of additions and deletions, yet from close scrutiny of the proposed amendments, it is evident that most of them are formal in nature and some others are relating to the statements already made in the plaint and the same are required to be brought on record due to subsequent developments during the period when the suit was firstly filed in Calcutta High Court and on return of the plaint subsequently filed in the Court of the Sub-Judge, Jamshedpur and some others are relating to the controversies originally pleaded by the parties in their respective pleadings. Learned Court below refused the petitioners prayer for amendments mainly on the ground of delay and large number of proposed amendments. In my view, on these grounds the amendments, prayed for, cannot be refused. The provision for amendment is incorporated mainly to avoid multiplicity of litigations and to allow the parties to bring on record all the relevant facts for complete and effective adjudication of all the controversies between the parties so as to save both the parties from unnecessary litigations, expenses ad harassment. This provision is an aid to serve the interest of justice. The prayer for amendments should be generally allowed except in exceptional cases in which the proposed amendments would substitute or alter a new case or defence, as the case may be, or would take away any valuable right accrued to the other party by lapse of time. In the instant case the amendments have not been refused either on the ground that any valuable right has accrued to the defendants by lapse of time or that the amendments would alter or substitute the case of the plaintiffs. The reason assigned by learned Court below for refusing the amendments in this case is erroneous and contrary to the settled principles of law relating to amendment of the pleading.
The reason assigned by learned Court below for refusing the amendments in this case is erroneous and contrary to the settled principles of law relating to amendment of the pleading. I find that except the amendment seeking addition of Narayan Chandra Mukheejee (N.C. Mukehrjere) as defendant No. 10 and other amendments relating to him, no other amendments, sought for by the petitioners, go to bring about any alteration or change in the nature of the suit. By way of amendment relating to the said N.C. Mukherjee, the plaintiffs have sought to bring amendment against him who is not a party to the suit. Though the addition of a party and amendment in the pleadings are based on almost the same principle i.e. to avoid multiplicity of the legal proceedings, yet there is a slight difference in consideration for allowing an application for addition of a party and for amendment in the pleadings. The facts and grounds required for considering addition of N.C. Mukherjee do not satisfy the requirement of law. No separate application has been earlier filed for addition of N.C. Mukherjee showing as to how his presence before the Court is necessary for effective and complete adjudication and settlement of all the controversies involved in the original suit. In the instant application there is no sufficient ground to meet the said requirement of law. Unless and until the Court allows the addition of N.C. Mukherjee after considering that his presence is necessary as a defendant, any prayer for amendment relating to him or his action in his official or personal capacity cannot be allowed being beyond the scope of the original plaint. Except the amendment relating to N.C. Mukherjee for his addition as defendant No. 10 and the facts relating to him and relief sought for against him; all the amendments, sought for by the petitioners, should not have been refused by learned Court below only on the ground of delay or number of the proposed amendments. The impugned order of learned Court below is thus unsustainable in law and is hereby set aside. This writ application is allowed. The amendments sought for by the petitioners, except the amendment seeking addition of N.C. Mukherjee as defendant No. 10 including other facts and reliefs relating to him, are hereby allowed, subject to payment of cost of Rs.
The impugned order of learned Court below is thus unsustainable in law and is hereby set aside. This writ application is allowed. The amendments sought for by the petitioners, except the amendment seeking addition of N.C. Mukherjee as defendant No. 10 including other facts and reliefs relating to him, are hereby allowed, subject to payment of cost of Rs. 5,000/- (Five thousand only) to be paid by the plaintiffs to the defendants in the Court below within a period of two weeks from the date of production/receipt of a copy of this order. The defendants shall be also at liberty to file additional written statement if so required in view of the said amendments in the plaint.