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2013 Supreme(Bom) 1946
HIGH COURT OF JUDICATURE AT BOMBAY
R.D. DHANUKA, J.
Dena Bank
Versus
Apple Finance Limited & Others
Chamber Summons No. 1627 of 2010 in Suit No. 876 of 2007
Decided on: 26-09-2013
For the Plaintiff:D.J. Khambatta, Senior Advocate, a/w. Rohan Cama, i/b. PDS & Associates, Advocates.
For the Defendants:D1, Dr. Virendra Tulzapurkar, Senior Advocate, a/w. Dr. Birendra Saraf, Sachin Chandarana, Vijayendra Purohit, i/b. Manilal Kher & Ambalal, D2, V.R. Dhond, Senior Advocate, a/w. Shahezad Kazi, Rohan Kelkar, i/b. Negandhi, Shah and Himaytullah, Advocates.
The court emphasized the liberal approach to pre-trial amendments and the need to determine the real questions in controversy between the parties.
Headnote:
Amendment - Debenture Sale - Clause 2C, Debenture Trust deed - Canara Bank - IL&FS Trust Company Limited - Consent Decree - Amendment Allowed
Fact of the Case:
Plaintiff seeks amendment of the plaint to challenge the consent terms and decree obtained by the parties in a previous suit. Plaintiff alleges being deceived by defendants and seeks declaration that a sale agreement is null and void, and mandatory order for debenture transfer. Plaintiff's intervention in the previous suit was rejected, and an appeal to challenge the consent decree was permitted to be withdrawn with liberty to file appropriate proceedings in the current suit.
Finding of the Court:
The court allowed the amendment, stating that it was necessary to bring subsequent facts on record and to avoid multiplicity of proceedings. The court held that pre-trial amendments are allowed more liberally and that the defendants would have the opportunity to oppose the additional claims on merits. The court also clarified that the issue of limitation regarding the proposed amendments would be kept open.
Issues: Plaintiff's right to challenge the consent terms and decree, the necessity of bringing subsequent facts on record, and the potential prejudice to the defendants.
Ratio Decidendi: The court's decision was based on the need to determine the real questions in controversy between the parties and to avoid multiplicity of proceedings. The court also emphasized the opportunity for the defendants to oppose the additional claims on merits and kept the issue of limitation open.
Final Decision: The Chamber Summons for amendment was made absolute, and the defendants were permitted to file written statements. The court allowed the amendment and clarified that the issue of limitation regarding the proposed amendments would be kept open.
1. By this Chamber Summons, plaintiff seeks amendment of the plaint in terms of schedule annexed thereto.
2. Plaintiff has filed this suit against the defendants for a declaration that the sale under the agreement dated 31st December, 2005 executed between the plaintiff and the defendant nos. 1 and 2 in respect of the plaintiff's 14% and 15.5% AAA-III series debentures to the defendant no.2 is bad in law and not binding on the plaintiff on the ground that the tripartite agreement under which plaintiff's 14% and 15.5% AAA-III series fully secured non-convertible debentures were transferred to defendant no.2 which transfer was induced by gross misrepresentation by the defendants, resulting into a huge financial loss to the plaintiff. It is the case of the plaintiff that the plaintiff was the owner of 500 14% AAA-III secured redeemable non-convertible debentures issued by defendant no.1 on 30th December, 1997 and on or about 25th June, 1998 2000 15.5% AAA-III secured redeemable non-convertible debentures. In relation to the said debentures, a Debenture Trust deed dated 23rd December, 1998 had been executed wherein it had inter alia been stated in Clause 2C that the debentures constituted thereby “shall rank pari passu interse without any preference or priority of one over the other or others”. Canara Bank was appointed as the debenture trustee in respect of the said debentures issued in favour of the plaintiff and various other debenture holders.
3. In the year 2001, some of the debenture holders exercised their option to get 33% of the face value of the debentures redeemed. It is the case of the plaintiff that defendant no.1 defaulted and consequently the entire debentures became due and payable under clause 14(a) and thus defendant no.1 was liable to pay to the Canara Bank, the debenture trustees an aggregate amount of Rs.93,84,43,990/- of which Rs.30,69,01,617/- was payable to the plaintiff therein.
4. In the year 2002, Canara Bank filed a suit in this court inter alia praying for an order of this court directing the sale of all moveable and immoveable properties of defendant no.1 including the property forming the subject matter of this suit, i.e. Plot No.27 in 'G' Block, admeasuring 6041 sq.mtrs. and 11438.63 sq.mtrs. permissible built up area, Bandra (East), Mumbai and the building constructed thereon known as Apple Tower. In the said suit, the Division Bench of this court in appeal appointed Court Receiver as the Receiver of the said property. Various interim orders were passed by this court in the said suit No. 162 of 2002 filed by Canara Bank.
5. It is the case of the plaintiff that in the year 2005, defendant nos. 1 and 2 arrived at arrangement for paying off the outstanding debts of defendant no.1 by entering into individual one time settlement with the debenture holders and for revival of defendant no.1 by defendant nos., 2 and 3. Pursuant to the said arrangement, defendant no.1 addressed a letter to the plaintiff on 11th October, 2005 offering a sum of Rs.3.9583 crores in full and final settlement of the dues of the plaintiff to the 1st defendant and and by way of one time settlement. It is the case of the plaintiff that believing the submissions made by defendant nos. 1 and 2, similar one time settlement proposal was given to the plaintiff and tripartite agreement was entered into between the plaintiff and defendant no. 1 and defendant no.2.
6. With effect from 26th July, 2008, Canara Bank retired as Debenture Trustees and IL&FS Trust Company Limited was appointed as debenture trustees by a resolution of Canara Bank dated 27th October, 2008.
7. It is the case of the plaintiff that the plaintiff was deceived by defendant nos. 1 and 2 and accepted one time settlement only on the representation that defendant nos. 1 and 2 had offered the plaintiff a similar proposal as had been given to the other banks. Plaintiff accordingly filed a suit in this court inter alia praying for a declaration that agreement dated 3
