Delhi High Court: In an application filed by plaintiffs 1 to 3 seeking amendment of their plaint in a suit for partition and rendition of accounts of the assets of Defendant 2, the S.N. Dalmia & sons HUF (‘HUF’), a Single Judge Bench of Neena Bansal Krishna, J., dismissed the application while stating that the plaintiff could only claim partition of the assets of the HUF as held on the date of institution of the suit, therefore, the amendments to the plaint could not be permitted as it would change the nature of the suit.
Background
The application was filed under Order VI Rule 17, read with Order I Rule 10, read with Section 151 of the Code of Civil Procedure, 1908. The application states that the suit was filed for partition and rendition of accounts of the assets of the HUF, where plaintiffs 1 to 4 and defendant 1 are its members and defendant 3 is the Karta.
Plaintiffs 1 to 3 stated that when the suit was filed in 2017, they were unaware of the other assets of the HUF even though they knew that the HUF was a substantial shareholder in Durga Enterprises Pvt. Ltd., they did not have knowledge regarding the extent of shareholding.
The HUF owned 2350 shares while the karta owned 15,650 shares in Durga Enterprises Pvt. Ltd. as of 01-10-2010. It was alleged that the karta fraudulently transferred 2350 shares held by the HUF in his favour and that during the period from 01-10-2011 to 29-09-2012, the karta gifted all 18000 shares held by him to his sister, defendant 6.
The plaintiffs contended that defendant 6 sold these shares for a consideration of Rs. 8500 per share in favour of Pyramid Commodities Pvt. Ltd. for a sum of Rs. 15,30,00,000/-. It was also contended that all the shares that were held by the karta were also put in the HUF and thus, an asset of the HUF had been misappropriated by the karta. Thus, the plaintiffs sought an amendment to their plaint and impleadment of the purchasers of the shares of the HUF.
The defendants contended that by seeking to make amendments with respect to the shares, the plaintiffs were trying to incorporate time-barred reliefs and that they were aware of the shares in Durga Enterprises Pvt. Ltd. since plaintiff 4, who was the husband of plaintiff 3 and father of plaintiffs 1 and 2, was a defendant in the previous suit regarding the shares. Therefore, the plaintiffs are estopped from raising the said issue based on the principle of waiver.
Analysis and Decision
The Court noted that plaintiffs 1 to 3 sought to insert an explanation in the plaint to explain the chain of transactions with respect to the shares of the HUF in Durga Enterprises Pvt. Ltd. Further, the Court noted that the plaintiffs also sought to substitute paragraph 15 in the plaint to state that defendant 10 had filed a suit with respect to certain shares held by him in Durga Enterprises Pvt. Ltd. and that the HUF was also a party to the suit as it was a substantial shareholder in Durga Enterprises Pvt. Ltd.
Further, the Court said it was important to note that by way of these amendments, the plaintiffs were trying to include shares owned by the HUF which were allegedly alienated by the karta before the institution of the present suit for partition and rendition of the assets of the HUF.
The Court referred to Beereddy Dasaratharami Reddy v. Manjunath, (2021) 19 SCC 263 wherein the Supreme Court explained that the right of the karta to alienate Joint Hindu family property for fulfilling legal necessities such as payment of government revenues, maintenance of coparceners, conducting marriage and religious functions, payment of debts, acting for the benefit of the estate, etc. is settled. However, the Court noted that after the alienation, the coparceners have a right to challenge the alienation as was held in Sri Narayan Bal v. Sridhar Sutar, (1996) 8 SCC 54.
The Court opined that even if it was assumed that plaintiffs 1 to 3 came to know about the transfer of shares belonging to the HUF by the Karta only recently, the only remedy available with them was to seek cancellation of the transfer of shares, however, introducing such fresh pleas and reliefs, for the shares already alienated before the institution of the present case, would enlarge the scope of the suit.
The Court also noted that in M. Revanna v. Anjanamma, (2019) 4 SCC 332, it was held that applications for amendment of pleadings ought to be rejected if the amendments change the fundamental character of the suit. The Court relied on Basavaraj v. Indira, (2024) 3 SCC 705 while stating that passing a relief of declaration in a suit for partition and possession would be impermissible as it would change the nature of the suit.
Further, the Court also said that the plaintiff could only claim partition of the assets of the HUF as held on the date of institution of the suit, which is why the amendments to the plaint could not be permitted.
[Amaara Dalmia v. Mridula Dalmia, 2024 SCC OnLine Del 3771, Decided on 20-05-2024]
Advocates who appeared in this case:
For Plaintiffs — Advocate Jeevesh Nagrath, Advocate Vimal Kumar Nagrath, Advocate Divya Lal, Advocate Arjun Gaur, Advocate Vinod Kumar, Advocate Rajat Gupta.
For Defendants — Advocate Arjun Syal, Advocate Raghuveer Kapur, Advocate Amitabh Chaturvedi, Advocate Ankit Monga, Advocate Rimjhim Suhami, Advocate Kushagra Pandit