Satinder Singh and Another vs Maruti Limited (In Liquidation) and Others

M.S. Liberhan, J.—Respondents Nos, 1 and 2 claimed Rs. 1,40,692.10 with interest at the rate of 12 per cent, per annum from the appellants as well as respondents Nos. 3 and 4, jointly and severally and preferred a petition u/s 446 read with Section 468 of the Companies Act, 1956. It was alleged that the respondent-claimant company had entered into business transactions with Capital Steel Industries for works and jobs to be performed by the said firm for respondents Nos. 1 and 2. On finalisation of accounts, it was found that a sum of Rs. 1,12,567.10 was due from the appellants as well as respondents Nos. 3 and 4. In the claim petition, respondent No. 3 has been sued through its manager and managing partner Jaswant Singh Bhatia and respondent No. 4 Jaswant Singh Bhatia in his individual capacity.

The said claim of respondents Nos. 1 and 2 was refuted by the appellants. The capacity of respondents Nos. 1 and 2 to file the claim against the appellants was challenged. The liability of the appellants was also challenged on the ground that since the respondent-claimants had not explained how the appellants were liable or connected with Capital Steel Industries, the firm against which the claim had been put forth, the appellants were not liable. The appellants'' liability was further challenged for any acts and omissions of Jaswant Singh Bhatia and Inder Singh Bhatia who might have entered into any transaction with the respondent-claimants. It was stated that the appellants were neither necessary nor proper parties. It was specifically stated that the appellants had nothing to do with the respondent-firm during the relevant period and, consequently, no claim was maintainable against them. It was further alleged that Jaswant Singh Bhatia, who might have entered into some dealings with the respondent-claimant company, could not make the appellant liable for any of his acts and omissions.

The evidence of the respondent-claimant company was being recorded when a petition for amendment of the written statement was made and it was contended that facts had come to the notice of the appellant-applicants that Inder Singh and Jaswant Singh had no connection with Capital Steel Industries, therefore, the appellants be permitted to take a preliminary objection in the following terms :

"That neither S/Shri Inder Singh Bhatia nor Jaswant Singh Bhatia had anything to do with the firm, namely, Capital Steel Industries, 29/20 Gali No. 4, New Rohtak Road, New Delhi, none of whom was a partner of this firm and Shri Jaswant Singh Bhatia was never managing partner of this firm. As a matter of fact, Capital Steel Industries was a partnership firm constituted of three partners namely S/Shri Gurcharan Singh, Satinder Singh Ahluwalia and Smt. Sudesh Trehan, respondents Nos. 4 to 6, which firm was constituted vide a partnership deed that had been executed on October 7, 1969, but subsequently the said firm was dissolved vide the dissolution deed dated April 24, 1970 whereby Smt. Sudesh Trehan had retired from the partnership business. This firm through either of its partners, i.e., respondents Nos. 4 to 6, had never undertaken any business transaction with Maruti Ltd, and it looks that Shri Jaswant Singh Bhatia, who in fact was partner of another firm, namely, Inder Singh Bhatia and Sons, and himself started some business transaction with the company-petitioner No. 1 by wrongly representing himself to be either Managing Partner or Manager of Capital Steel Industries and thus replying respondent has nothing to do with any transaction that might have been conducted either by S/Shri Inder Singh Bhatia or Jaswant Singh Bhatia on behalf of Capital Steel Industries for which transactions they also are responsible jointly and severally. "

The respondent-claimant company contended that the proposed amendment was only to delay the proceedings. No preliminary objection could be constituted by the proposed amendment as a preliminary objection nor was any amendment by way of adding para. No. 8 in preliminary objection required. Consequently, no permission deserved to be given for amendment. It was further averred that the proposed amendment was an attempt or an effort to fill in the gap instead of making amendment on the basis of new facts. It was stated that no cause or reason had been shown for seeking amendment.

The proposed amendment was declined. It was found that since the earlier plea was that the appellants had no connection with Capital Steel Industries and, therefore, not bound by the dealings of Inder Singh Bhatia and Jaswant Singh Bhatia, and now the plea being raised through the proposed amendment that Inder Singh Bhatia and Jaswant Singh Bhatia had no connection with Capital Steel Industries, being a contradictory plea to the earlier one, could not be permitted. It was further held that it being an attempt to withdraw the implied admission to the effect that respondent No. 4 was acting for the firm, that is respondent No. 3, the amendment could not be permitted. The appellants preferred an appeal against the order of the learned single judge declining permission for the amendment.

The appellants challenged the said order and contended that the plea taken by the amendment was not contrary to the pleas taken earlier. There was no implied admission on the part of the appellants which was being withdrawn. Respondents Nos. 1 and 2 have nowhere challenged the proposed amendment on the ground that the proposed pleas were contradictory or destructive to the pleas taken earlier or that there was an attempt to withdraw the implied admission. It was contended that it was an additional approach to the defence already taken by the appellants challenging their liability.

We have heard counsel for the parties and perused the record. The questions to be determined are whether the proposed amendment is a plea contradictory in nature to the pleas taken earlier, and the same is destructive thereof, or there was any implied admission which the appellants wanted to withdraw through the proposed amendment. After perusing the written statement with the help of learned counsel for the parties, with great respect to the learned single judge, we are unable to subscribe to the finding that there was any implied admission by the appellants accepting the relationship of Jaswant Singh Bhatia or Inder Singh Bhatia with Capital Steel Industries. There is no averment in the claim petition that Jaswant Singh Bhatia or Inder Singh Bhatia are the partners of Capital Steel Industries. It is stated only in the heading of the petition that Capital Steel Industries is being sued through Jaswant Singh Bhatia as manager/managing partner of the said firm. When there is no assertion that Jaswant Singh Bhatia is the partner of the firm, the question of admission, implied or express, does not arise. On perusing the written statement, it cannot be said that there is an implied admis- sion which is being withdrawn by the proposed amendment. . The appellants have categorically pleaded that they are not liable for the debts of the firm-respondent No. 3 inasmuch as they had got nothing to do with it at the relevant period and it is an additional approach to their plea of liability for the debts of firm-respondent No. 3, that is, that the alleged transactions had been entered into by Jaswant Singh Bhatia who, having nothing to do with Capital Steel Industries at the relevant time, cannot make the appellants liable for the liabilities created by a stranger to respondent No. 3, The plea raised by the proposed amendment is neither contradictory nor destructive of the pleas raised earlier. The respondents have not put forth these grounds in their written reply, opposing the amendment.

Learned counsel for the appellants further contended that even admissions could be withdrawn and explained and relied upon Panchdeo Narain Srivastava Vs. Km. Jyoti Sahay and Another, and Shiv Parshad v. Brij Lal [1966] PLR 419.

Learned counsel for respondents Nos. 1 and 2 controverted the said contention of the appellants contending that they had not disclosed how the other respondents were not connected with Capital Steel Industries. There was thus an implied admission by the respondents to the effect that Jaswant Singh Bhatia and Inder Singh Bhatia were the partners of Capital Steel Industries, and that the appellants could not be permitted to withdraw the implied admission and relied upon Modi Spinning and Weaving Mills Co. Ltd. and Another Vs. Ladha Ram and Co., . Learned counsel further urged that the proposed amendment cannot be allowed as it was likely to adversely affect the right accrued to the respondents by the implied admission as well as the proposed amendment being sought at a belated stage. In order to support the said contention, he relied upon Ranjit Kaur v. Ajaib Singh [1984] PLR 608, and Rajinder Kishore v. Kesar Dass [1985] PLR 580.

In view of the findings returned above that there was no admission implied or otherwise on the part of the appellants that Jaswant Singh Bhatia and Inder Singh Bhatia were the partners of the firm, Capital Steel Industries, and in particular there being no assertion by respondents Nos. 1 and 2 to that effect, there cannot be any withdrawal of admission. Thus the controversy whether admissions can be withdrawn or not need not be gone into.

In our view, it being an additional approach to the facts stated to the effect that the appellants are not liable for any acts of Jaswant Singh Bhatia either acting for himself or otherwise, the petition being at the stage of recording evidence of the respondent-claimant, and no new or inconsistent case being set up, nor is the application suffering from lack of good faith, and the question raised by the proposed amendment being germane to the defence already set up and going to the root of the defence, the proposed amendment is necessary.

The judgments cited by the respondents for refusing amendment are neither pari materia on facts nor on law to the case in hand inasmuch as in Rajinder Kishore v. Kesar Dass ILR [1985] 580, the learned judge disallowed the amendment holding that it was belated and the decree had come into existence. The proposed amendment was likely to adversely affect the right accrued to the party because of the passing of the decree which is not the position here. In Ranjit Kaur v. Ajaib Singh ILR [1984] 608, the amendment was not allowed in the circumstances of the said case inasmuch as the right to sell having been accepted, was proposed to be challenged by the proposed amendment, which is not the case here. In Modi Spinning and Weaving Mills Co. Ltd. and Another Vs. Ladha Ram and Co., , the admission made earlier was not allowed to be withdrawn and the proposed amendment which amounted to completely displacing the case of the plaintiff from the admission made by the defendant was declined, which is not the case here.

For the delay, if any, or the negligence of the appellants, the respondents can be well compensated with costs. Since the proposed amendment is being sought at the very initial stage, the same cannot be denied on the ground of delay.

For the reasons recorded above and with the greatest respect to the learned single judge, the impugned order is set aside. The appeal is allowed and the appellants are permitted to amend the written statement by taking up the additional plea as prayed for. The amendment is allowed on payment of Rs. 500 as cost. However, there is no order as to costs in this appeal.