M/S Mirah Hospitality and Food Solutions Pvt. Ltd. v. Abdul Sattar Ismail Sait and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN** ## **FRIDAY, THE 12[TH] DAY OF APRIL 2024/23RD CHAITHRA, 1946** **OP(C) NO.1110 OF 2019** **AGAINST THE ORDER/JUDGMENT DATED IN OS NO.154 OF 2013 OF SUB COURT, KATTAPPANA** **PETITIONERS:** **M/S.MIRAH HOSPITALITY AND FOOD SOLUTIONS PVT.LTD.,** **A COMPANY INCORPORATED UNDER COMPANIES ACT HAVING ITS REGISTERED OFFICE AT 208, PARVATI INDUSTRIAL ESTATE, SUN MILL COMPOUND, LOWER PAREL (W), MUMBAI-400 013, THROUGH ITS AUTHORISED SIGNATORY, SHRI.SANTHOSH NAIR,** **RESIDING AT 'SREELAKSHMI', CHUNDARATH HOUSE, KONGALAKODE, KAVASSERY P.O., PALAKKAD.** **BY ADVS. SRI.MOHAN JACOB GEORGE SRI.L.RAM MOHAN** ## **RESPONDENTS:** - **1 ABDUL SATTAR ISMAIL SAIT, AGE: ADULT, OCCUPATION: BUSINESS, RESIDING AT 9A, INFRA FORESHORE ROAD, KOCHI, KERALA-682 016.** - **2 MS.SHENAZIQBAL, W/O.ABDUL SATTAR ISMAIL SAIT, AGE : ADULT, OCCUPATION : BUSINESS, RESIDING AT 9A, INFRA FORESHORE ROAD, KOCHI, KERALA-682 016.** - **3 MS.SHAZIYAIQBAL, D/O. ABDUL SATTAR ISMAIL SAIT, AGE : ADULT, OCCUPATION : BUSINESS, RESIDING AT 9A, INFRA FORESHORE ROAD, KOCHI, KERALA-682 016.** - **4 MR.PETER CORREYA, AGE : ADULT, OCCUPATION : BUSINESS, RESIDING OF PALAMUTTON HOUSE, VALLARPADAM, P/O.KOCHIN-682 504.** **OP(C) No.1110 of 2019** **- 2 -** - **5 MS.THAZEEB ISMAIL, S/O.ABDUL SATTAR ISMAIL SAIT, AGE : ADULT, OCCUPATION : BUSINESS, RESIDING AT 9A, INFRA FORESHORE ROAD, KOCHI, KERALA-682 016.** - **6 MR.ISMAIL JANISAIT, AGE : ADULT, OCCUPATION : BUSINESS, RESIDING OF 28/9368, CHERUPARAMBATH ROAD, KADAVANTHRA, COCHIN, ERNAKULAM.** **7 M/S.ELAN ESTATES AND RESORTS PVT.LTD, A COMPANY UNDER COMPANIES ACT, HAVING ITS REGISTERED OFFICE AT DOOR NO.296, GOVIND APARTMENT, KALTHIPARAMBIL ROAD, ERNAKULAM, KERALA-682 016,** **REPRESENTED BY ITS MANAGING DIRECTOR.** **8 E.M.BABY HOTELS AND RESORTS, A PARTNERSHIP FIRM HAVING ITS REGISTERED OFFICE AT MADATHIL ARCADE, ERATTAYAR ROAD, KATTAPPANA P.O., REPRESENTED BY ITS MANAGING PARTNER E.M.BABY, S/O.MATHAI, RESIDING AT MADATHIL, KATTAPPANA P.O., IDUKKI.** **BY ADVS. SRI.S.SREEKUMAR (SR.) SRI.MATHEW JOHN (K) SRI.P.MARTIN JOSE SRI.MATHEW DEVASSI SRI.P.PRIJITH SRI.ABY J AUGUSTINE SRI.THOMAS P.KURUVILLA** **THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON 06.03.2024, THE COURT ON 12.04.2024, DELIVERED THE FOLLOWING:** **OP(C) No.1110 of 2019** ## **- 3 -** ## **JUDGMENT** ## **Dated, this the 12[th] April, 2024** _**Life Insurance Corporation of India v. Sanjeev Builders Private Limited and Another**_ **[2022 SCC Online SC 1128] delineated the creases for allowing an application under Order VI Rule 17. The summary of the findings of the Honourable Supreme Court are extracted here below:** - _**“70. Our final conclusions may be summed up thus:**_ - _**(i) Order II Rule 2 CPC operates as a bar against a subsequent suit if the requisite conditions for application thereof are satisfied and the field of amendment of pleadings falls far beyond its purview. The plea of amendment being barred under Order II Rule 2 CPC is, thus, misconceived and**_ _**hence negatived.**_ . - _**(ii) All amendments are to be allowed which are necessary for determining the real question in controversy provided it does not cause injustice or prejudice to the other side. This is mandatory, as is apparent from the use of the word “shall”, in the**_ **OP(C) No.1110 of 2019** ## **- 4 -** _**latter part of Order VI Rule 17 of the CPC.**_ - _**(iii) The prayer for amendment is to be allowed**_ - _**(i) if the amendment is required for effective and proper adjudication of the controversy between the parties, and**_ - _**(ii)to avoid multiplicity of proceedings, provided**_ - _**(a) the amendment does not result in injustice to the other side,**_ - _**(b) by the amendment, the parties seeking amendment does not seek to withdraw any clear admission made by the party which confers a right on the other side and**_ - _**(c) the amendment does not raise a time barred claim, resulting in divesting of the other side of a valuable accrued right (in certain situations).**_ - _**(iv) A prayer for amendment is generally required to be allowed unless**_ - _**(i) by the amendment, a time barred claim is sought to be introduced, in which case the fact that the claim would be time barred becomes a relevant factor for consideration,**_ - _**(ii)the amendment changes the nature of the suit,**_ - _**(iii)the prayer for amendment is malafide, or**_ - _**(iv) by the amendment, the other side loses a valid defence.**_ - _**(v) In dealing with a prayer for amendment of pleadings, the court**_ **OP(C) No.1110 of 2019** **- 5 -** _**should avoid a hypertechnical approach, and is ordinarily required to be liberal especially where the opposite party can be compensated by costs.**_ - _**(vi) Where the amendment would enable the court to pin-pointedly consider the dispute and would aid in rendering a more satisfactory decision, the prayer for amendment should be allowed.**_ - _**(vii)Where the amendment merely sought to introduce an additional or a new approach without introducing a time barred cause of action, the amendment is liable to be allowed even after expiry of limitation**_ - _**(viii) Amendment may be justifiably allowed where it is intended to rectify the absence of material particulars in the plaint.**_ - _**(ix) Delay in applying for amendment alone is not a ground to disallow the prayer. Where the aspect of delay is arguable, the prayer for amendment could be allowed and the issue of limitation framed separately for decision.**_ - _**(x) Where the amendment changes the nature of the suit or the cause of action, so as to set up an entirely**_ **OP(C) No.1110 of 2019** **- 6 -** _**new case, foreign to the case set up in the plaint, the amendment must be disallowed. Where, however, the amendment sought is only with respect to the relief in the plaint, and is predicated on facts which are already pleaded in the plaint, ordinarily the amendment is required to be allowed.**_ _**(xi) Where the amendment is sought before commencement of trial, the court is required to be liberal in its approach. The court is required to bear in mind the fact that the opposite party would have a chance to meet the case set up in amendment. As such, where the amendment does not result in irreparable prejudice to the opposite party, or divest the opposite party of an advantage which it had secured as a result of an admission by the party seeking amendment, the amendment is required to be allowed. Equally, where the amendment is necessary for the court to effectively adjudicate on the main issues in controversy between the parties, the amendment should be allowed. (See Vijay Gupta v. Gagninder Kr. Gandhi & Ors., 2022 SCC OnLine Del 1897)"**_ **OP(C) No.1110 of 2019** ## **- 7 -** **2. Before addressing the facts, this Court should also notice the dictum laid down by the Honourable Supreme court in** _**Baldev Singh and Others v. Manohar Singh and another**_ **[(2006) 6 SCC 498] to the effect that court should be liberal in allowing amendments to the written statements, inasmuch as the possibility of prejudice is minimal, when compared to amendments of the plaint [see in this regard paragraph no.15 of the judgment].** **3. Ext.P7 application for amendment of the written statement was allowed vide Ext.P9 order, which is under challenge in this Original Petition. The plaintiff is the petitioner.** **4. Heard Sr.Mohan Jacob George, learned counsel for the petitioner and Sri.S.Sreekumar, learned Senior Counsel, duly instructed by Sri.Martin Jose, for respondents 1 to 4 and 7 and Sri.Mathew John for the 8[th] respondent.** **OP(C) No.1110 of 2019** **- 8 -** **5. The suit was one for recovery of money to the tune of Rs.2.5 crores, premised on an agreement for sale of the 7[th] defendant company by the plaintiff company. The plaintiff paid a sum of Rs.1.75 crores, out of the total sale consideration of Rs.5.55 crores. Out of the said total sale consideration, a sum of Rs.3.10 crores - due from the defendants to the Kerala Financial Corporation ('K.F.C', for short) - was agreed [by and between the parties in the MoU dated 19.05.2011] to be paid by the plaintiff to K.F.C and the remaining amount will be paid to the defendants, as per the MoU signed by the parties dated 19.05.2011. The 7[th] defendant company is the owner of 1.70 acres of land at Kumali, along with 18 cottages, restaurants, structures etc., therein.** _**De hors**_ **, part payment of Rs.1.75 crores and the readiness and willingness expressed by the plaintiff to perform the contract, the defendants failed to perform their part and to sell the the 7[th] defendant company and its assets to the plaintiff. Alleging non-performance and calculating interest at** **OP(C) No.1110 of 2019** ## **- 9 -** **the rate 18 percent per annum, the plaint claim was laid for Rs.2.51 crores.** **6. The defendants filed written statement denying non-performance on their part and alleging that no payment was made by the plaintiff to clear the defendants' liability towards K.F.C and that the plaintiff was also not ready and willing to pay the huge balance sale consideration. The plaintiff committed breach of contract, which entitles the defendants to claim liquidated damages and compensation. Besides denying the plaint claim, the defendants also laid a counter-claim for a sum of Rs.2,10,60,000/-. Contemplating set off of Rs.1.75 crores from the said 2.10 crores, the counter-claim was laid for Rs.35,60,000/- only and court fee paid accordingly.** **7. In Ext.P7 amendment application, the main amendment sought to be incorporated is with respect to the counter-claim for Rs.2.10 crores and for the** **OP(C) No.1110 of 2019** ## **- 10 -** **remittance of court fee accordingly. The specific averment in Ext.P7 application is that court fee was paid under a wrong notion that the advance amount could be set off without paying court fee. Accordingly, the valuation portion of the written statement was sought to be amended. Besides, it is pertinent to notice that, though specified amounts as against different heads were claimed in the counter-claim, necessary pleadings in support thereof were not incorporated. For example, a sum of Rs.90 lakhs was claimed in the counter-claim by the defendants towards penal interest payable to K.F.C during a specified period due to the default committed by the plaintiff. However, the said ground is sought to be elaborated by virtue of the pleadings to be incorporated to paragraph no.8(b). Another contention sought to be incorporated vide Ext.P7 is that the civil court has no jurisdiction in terms of Section 430 of the Companies Act. Yet another pleading sought to be brought in is about the exorbitant interest at the rate of 18 percent,** **OP(C) No.1110 of 2019** **- 11 -** **which according to the defendants are** **unconscionable and against provisions of law.** **8. It is in respect of these amendments that Ext.P9 order was passed, allowing the same.** **9. Learned counsel for the petitioner would submit that the amendment ought not have been allowed in view of the proviso to Order VI, Rule 17; that the amendment sought to incorporated is time barred; that the amendment is contrary to the existing pleadings; and that the amendment is in respect of claims, having accrued to the defendants after the filing of their defense.** **10. This Court cannot appreciate any of the above contentions raised by the petitioner. The objection to the amendment based on the proviso will be addressed within a short while. This Court finds that there is no attempt, whatsoever, to bring in a time-barred relief by virtue of Ext.P7 application.** **OP(C) No.1110 of 2019** ## **- 12 -** **It is noteworthy that the counter-claim was for Rs.2,10,60,000/-. The counter-claim plaintiffs contemplated set off of Rs.1.75 crores paid by the counter-claim defendants towards advance, with the result, the counter-claim was limited to Rs.35,60,000/- and court fee paid accordingly. An amendment to do away with the said mistake, so as to make the counter-claim to Rs.2.10 crores (without assuming any set off), so that court fee for the entire sum can be paid cannot be treated as introduction of a time barred claim. As regards Rs.90 lakhs and Rs.64.60 lakhs claimed in the counter-claim, this Court may iterate that the amended pleadings are only in elaboration of the claim already made in the written statement/counterclaim; rather by way of amplification of the defense already taken. The amendment does not introduce any new defense/claim contrary to what has been pleaded in the written statement. Nor does it purport to withdraw any admission made in the written statement. Therefore, it cannot be said that the** **OP(C) No.1110 of 2019** ## **- 13 -** **amendment proposed vide Ext.P7 and allowed vide Ext.P9 would prejudice the plaintiffs in any manner. Two new contentions introduced by virtue of the amendment are with respect to the jurisdiction of the civil court and the unconscionable interest at the rate of 18 percent claimed in the plaint. The trial court found no reason to frown upon the amendment sought for. As held by a three Judges Bench of Honourable Supreme Court in** _**Raj Kumar Bhatia**_ **v.** _**Subhash Chander Bhatia**_ **[(2018) 2 SCC 87], this court, in exercise of its jurisdiction under Article 227 of the Constitution, cannot interfere with an order like Ext.P9, so long as the trial court has proceeded within the parameters of its jurisdiction. The Honourable Supreme Court cautioned that the High Court does not act as an appellate court and that it is not open for it to review or reassess the evidence, upon which the trial court has passed the order.** **11. The only surviving issue is with respect to the** **OP(C) No.1110 of 2019** ## **- 14 -** **objection based on the proviso to Rule 17. Order VI, Rule 17 enables the court to allow either party to amend the pleadings at any stage of the proceedings, the pre-requisite being that the amendments shall be necessary for determining the real questions in controversy between the parties. However, the proviso casts an embargo on the power of the court in allowing an amendment once the trial has commenced, unless the court is satisfied that despite due diligence, the party seeking amendment could not have raised the matter before commencement of trial. In** _**Vidyabai and others v. Padmalatha and another**_ **[(2009) 2 SCC 409], the Honourable Supreme Court held that unless the jurisdictional fact as envisaged in the proviso to Order VI, Rule 17 is found to be existing, the court will have no jurisdiction to allow the amendment. The said decision also held that the filing of an affidavit in lieu of examination–in-chief of the witness would amount to commencement of trial. The Honourable Supreme Court also took stock of the judgments in** **OP(C) No.1110 of 2019** **- 15 -** _**Kailash v. Nanhku and Others**_ **[(2005) 4 SCC 480] and in** _**Ajendraprasadji N.Pandey v. Swami Keshavprakeshdasji**_ **[(2006) 12 SCC 1], which held that the trial is deemed to commence when issues are settled and the case is set down for recording evidence.** **12. In the given facts, there is no dispute that the Ext.P7 amendment was sought for after the plaintiffs filed the proof affidavit, though the trial was adjourned since the matter was referred for mediation thereafter. Therefore, the proviso to Order VI, Rule 17 applies.** **13. In the context of due diligence, the reason stated in Ext.P7 is that the defendants have engaged Adv.Anil Babu of Ernakulam and that he passed away, going by the affidavit 'a few months back'. The affidavit is seen filed in March, 2019. The contention of the petitioner/plaintiff is that the said counsel passed away in the year 2017. Having** **OP(C) No.1110 of 2019** ## **- 16 -** **regard to the nature of the amendment sought for, this Court is of the opinion that the matters sought to be incorporated are such that the due diligence on the part of the defendants** _**per se**_ **would not have enabled to bring the same in the pleadings before commencement of the trial. Rather, it is predominantly a matter within the realm and domain of their counsel to do so. As already indicated, the question as to the amount over which set off can be claimed and court fee has to be paid, the jurisdiction of the civil court, pleadings in elaboration/amplification of the counter-claim etc., are matters over which the counsel has to take a call; and not the defendants, by themselves.** **14. That apart, this Court is of the view that the defendants have given a plausible explanation for not seeking the amendment on time, that its to say, the death of their counsel, leave alone the controversy regarding the point of time of his death. This Court is also of the view that the** **OP(C) No.1110 of 2019** ## **- 17 -** **existence of due diligence cannot be gauged on golden scales, but only by the yardstick of preponderance of probabilities and the balance in this regard should tilt in favour of the party seeking the amendment, provided the facts sought to be introduced are necessary for determining the real questions in controversy between the parties.** **15. In the light of the above discussion, it is concluded that the proviso to Order Vi, Rule 17 also will not stand in the way.** **16. I am not dealing with the decisions cited by the learned counsel for the petitioners on amendment of time barred claim, since it has already been found that no time barred claim is sought to be incorporated by way of the impugned amendment. The same is the situation with respect to the contention that the counter-claim shall be in respect of a cause of action before the defendants have raised their defense. As found, no new claim is sought to** **OP(C) No.1110 of 2019** **- 18 -** **be introduced and what is introduced is nothing but elaboration/amplification of the existing claims.** **17. This Court, having regard to its limited supervisory jurisdiction, finds no tangible reason to interfere with Ext.P9 order of the trial court. The principles settled in** _**LIC of India**_ **(supra) would only support the conclusion arrived at by this Court in upholding Ext.P9 order, allowing the amendment. In the result, this Original Petition fails and the same will stands dismissed.** **Sd/-** ## **C.JAYACHANDRAN, JUDGE** ww **OP(C) No.1110 of 2019** ## **- 19 -** ## **APPENDIX OF OP(C) 1110/2019** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE PLAINT IN OS NO.154/13.** **EXHIBIT P2 TRUE COPY OF THE WRITTEN STATEMENT/ COUNTER CLAIM IN OS NO.154/13.** **EXHIBIT P3 TRUE COPY OF THE WRITTEN STATEMENT TO THE COUNTER CLAIM IN OS NO.154/13.** **EXHIBIT P4 TRUE COPY OF THE JUDGMENT DATED 3/4/14 IN FAO 70/14.** **EXHIBIT P5 TRUE COPY OF THE CERTIFIED COPY OF THE SALE DEED NO.403/15 OF PEERUMEDU. EXHIBIT P6 TRUE COPY OF THE JUDGMENT DATED 17.8.16 IN COC 278/16.** **EXHIBIT P7 TRUE COPY OF THE IA 157/19. EXHIBIT P8 TRUE COPY OF THE OBJECTION IN IA 157/19. EXHIBIT P9 TRUE COPY OF THE ORDER DATED 14.3.19 IA NO.157/19 IN OS 154/13.**