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2017 Supreme(Del) 2395
IN THE HIGH COURT OF DELHI AT NEW DELHI
SANJEEV SACHDEVA, J.
Mr. Jagvinder Singh & Ors. - Plaintiffs
Versus
Mr. Preminder Singh & Anr. - Defendants
CS(OS) 580 of 2016
Decided On : 20-07-2017
Advocate Appeared:
For the Plaintiffs : Mr. Abhijat, Mr. Nikhil Parikshit
For the Defendants : Mr. Ritin Rai, Mr. S. Santanam Swaminadhan, Ms. Nishtha Khurana, Mr. Aabhas Kshetar Pal, Mr. Darpan Wadhwa, Mr. Zoheb Hossain
Headnote:
Amendment of Plaint - Appointment of Director - Companies Act, 2013 - Order VI Rule 17 - 71st Annual General Meeting - 27.10.2016 - 19.11.2016 - Amendment allowed to challenge appointment of defendant No.1 as Additional Director in a separate Board of Directors meeting - Amendment not completely disjoint from original plaint - Necessary for determining the real question in controversy - No prejudice caused to defendants - Amendment allowed
Fact of the Case:
Plaintiffs seek amendment of the plaint to challenge the appointment of defendant No.1 as an Additional Director in a separate Board of Directors meeting held on 15.12.2016. Defendants oppose the amendment, contending that the suit had become infructuous after the conclusion of the 71st Annual General Meeting and the subsequent appointment of defendant No.1 as an Additional Director.
Finding of the Court:
The Court finds that the amendment sought is not completely disjoint from the original plaint and is necessary for determining the real question in controversy. The plaintiffs have been diligent in filing the application and no prejudice is caused to the defendants as no right has accrued to them by elapse of time. The application for amendment is allowed.
Issues: Whether the amendment of the plaint to challenge the appointment of defendant No.1 as an Additional Director is permissible? Whether the suit had become infructuous after the conclusion of the 71st Annual General Meeting and the subsequent appointment of defendant No.1 as an Additional Director?
Ratio Decidendi: The amendment sought should not be completely disjoint from the original plaint and should be necessary for determining the real question in controversy. The plaintiffs' diligence in filing the application and absence of prejudice to the defendants are also considered in allowing the amendment.
Final Decision: The application for amendment of the plaint is allowed. The plaintiffs are permitted to amend the plaint to challenge the appointment of defendant No.1 as an Additional Director in a separate Board of Directors meeting held on 15.12.2016.
Sanjeev Sachdeva, J.
IA No. 971/2017
1. This is an application on behalf of the plaintiffs under Order VI Rule 17 of the Code of Civil Procedure seeking amendment of the plaint.
2. The plaintiffs are shareholders in the defendant No.2 Company. Defendant No.1 is also a shareholder of the defendant No.2 Company.
3. It is the case of the plaintiffs that the defendant No.1 has retired as a Director of the defendant No.2 Company by the operation of the rule of retirement by rotation.
4. As per the plaintiffs, the 71st Annual General Meeting of the defendant No.2 Company was scheduled on 27.10.2016. The meeting could not be concluded. Thereafter, the meeting was reconvened to 19.11.2016. As per the plaintiffs, the meeting of 19.11.2016 was concluded. It is the case of the plaintiffs that the defendant No.1 did not offer himself for being reappointed as a Director either in the meeting scheduled on 24.10.2016 or in the reconvened meeting on 27.10.2016.
5. As per the Defendants, the meeting was concluded on 27.10.2016.
6. The case of the plaintiffs is that the defendant No.1 did not offer himself for being reappointed as a Director either in the meeting held on 24.09.2016 or in the reconvened/adjourned to 24.10.2016.
7. The plaintiffs filed the suit contending that the plaintiffs had received the notice dated 27.10.2016 informing the plaintiffs that reconvened/adjourned meeting from 24.10.2016 was to be held on 19.11.2016.
8. The plaintiffs were aggrieved by the agenda seeking to appoint the defendant No.1 as a Director in the reconvened meeting of 19.11.2016.
9. When the plaintiffs filed the suit, this Court did not interdict the meeting scheduled on 19.11.2016. However, directed that any Resolution passed therein would not be given effect to.
10. As per the plaintiffs, the defendant No.1 claims to have been elected in the reconvened/adjourned meeting on 19.11.2016. However, in terms of the orders of the Court, the Resolution could not be given effect to.
11. Subsequently, the plaintiffs got to know that the Board of Directors, in a meeting held on 15.12.2016, appointed the defendant No.1 as an Additional Director.
12. Subsequent to the Resolution of the Board of Directors dated 15.12.2016, appointing the defendant No.1 as an Additional Director, the plaintiffs have filed the present application seeking amendment of the plaint.
13. It is contended that the cause of action giving rise to the amendment is relatable to the earlier cause of action, which is the subject matter of the suit, as filed. The case of the plaintiffs is that the issue is really with regard to the appointment of the defendant No.1 as a Director.
14. The plaintiffs also seek to incorporate certain legal objections with regard to the appointment of the defendant No.1 as a Director on the ground that the defendant No.1 is, inter alia, disqualified under the Companies Act, 2013 from being appointed as a Director.
15. Learned counsel for the plaintiffs relied on the decision in the case of a Coordinate Bench of this Court in NTPC (UP) Limited vs. Swadesh Polytex Limited, 1998 (45) DRJ 478 and the judgments of the Supreme Court in Ganesh Trading Co. vs. Mozi Ram, (1978) 2 SCC 91 and Sampath Kumar vs. Ayyakannu and Anr., (2002) 7 SCC 559 to contend that where the basic nature of the Suit is not altered by the proposed amendment, the Court should allow such an amendment.
16. Further, it is contended that the approach with regard to the amendment is liberal and unless grave prejudice is caused to the defendant, the amendment of plaint should normally be allowed.
17. Per contra, learned senior counsel for the defendant No. 2 has opposed the application for grant of amendment. It is contended that the suit, as framed, was with regard to the reconvened meeting of 27.10.2016 and the further reconvened/adjourned meeting of 19.11.2016. It is contended that since the two meetings had already been held and the Resolution passed, the suit of the plaintiffs had became infructuous.
18. Furthe
