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2003 (4) TMI 428 - HC - Companies Law

Issues:
Application for amendment under Order VI Rule 17 CPC seeking impleadment of defendant No. 3 in a suit filed under Order XXXVII CPC.

Analysis:
The plaintiff filed an application seeking to amend the suit to include defendant No. 3, detailing the reasons for not seeking relief against defendant No. 3 initially due to the proceedings before the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The defendants objected to the amendment, citing the plaintiff's failure to seek permission for institution of the suit against defendant No. 3 under section 22 of SICA. The plaintiff had originally filed a suit against defendant Nos. 1 and 2 for recovery, with no relief sought against defendant No. 3, who was a party due to the guarantee provided by defendants 1 and 2. The plaintiff had reserved the right to claim against defendant No. 3 once the legal bar under section 22 of SICA was removed. The plaintiff had also previously moved an application under Order II Rule 2 seeking leave to sue defendant No. 3. However, the reference under SICA for defendant No. 3 had led to a legal bar under section 22, which was lifted on 29-12-1999, allowing the plaintiff to proceed against defendant No. 3.

The defendants argued that the plaintiff's delay in seeking permission under section 22 of SICA and the subsequent amendment to include defendant No. 3 were time-barred. They contended that the plaintiff should have invoked the enabling provision of section 22 to seek permission from BIFR for the suit. The plaintiff's application for amendment was challenged on grounds of limitation, especially since the suit was originally filed in May 1996 with defendant No. 3 included but no relief sought against them. The court considered the timeline of events, including the lifting of the legal bar on 29-12-1999, and the subsequent application for amendment on 30-1-2002 following the order allowing the plaintiff to proceed against defendant No. 3.

The court analyzed the Limitation Act provisions, noting that the period of the legal bar under section 22 of SICA could be excluded under section 15(1) of the Limitation Act. Alternatively, the plaintiff's delay in seeking the amendment immediately after the legal bar was lifted could be considered a bona fide mistake, making the period eligible for exclusion under section 21 of the Limitation Act. The court emphasized that the presence of defendant No. 3 was necessary for the final adjudication of the matter, and allowing the amendment would lead to a conclusive resolution. Ultimately, the court rejected the defendants' objections, allowed the application for amendment, and directed the amended plaint to be taken on record, subject to costs.

 

 

 

 

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