2012 (12) TMI 309 - HC - Indian Laws

In the present case Family Settlement had been given effect to a substantial extent and that the respective parties were in effective control of their respective shares in the terms of the said family settlement since 2007. No doubt there were some disputes relating to some aspects appear to have been admittedly there allegations of non-compliance of certain terms of the memoranda of understanding which the learned Single Judge, correctly held required to be decided on affidavit evidence. - there is a prima facie acceptance of the factum of concealment of additional family assets by the defendant no. 1 which constitutes a case of fraud also does not merit grant of an interim order at this stage. Such stance of the plaintiffs was contested by defendant no. 1 & 2 on the score that accrual of personal assets post 2007 would not constitute part of the joint family corpus and such rival contentions required to be adjudicated in the course of trial. Hence mere allowing of amendment of the plaint to include the additional family assets as a part of the subject matter of the suit would not simpliciter ground to come to a conclusion of a strong prima facie case of fraud warranting the interim relief. Interim relief - learned Single Judge has come to a reasonable conclusion not to grant the interim relief to the plaintiffs in the instant case and not to substitute such discretion of the learned Single Judge since the same neither appears to be arbitrary, capricious or perverse in any manner whatsoever. Accordingly Appeal stands dismissed Amendment in the plaint - The trial in the suit had also not commenced and the learned Single Judge was wholly justified to conclude that amendment at such early stage of the proceeding would not prejudice either of the parties and ought to be permitted. Assets and/or legal entities which were sought to be included as subject matter of the suit did not comprise of the joint family corpus inasmuch as they had come into existence after 2007 and that no case of concealment had been made out are essentially matters of defense which his clients would be entitled to agitate fully in the course of trial by filing written statement, if not filed. The nature and circumstances in such amendment was prayed for in our considered view did not amount to alternation of the nature and character of the suit in any manner. If written statement is not filed, the same may be filed within eight weeks from the date of service of amended copy of the plaint - impugned order to the extent it permitted amendment of the plaint does not warrant interference and the appeal being is accordingly dismissed.

Summary

Issues Involved:
1. Rejection of interim relief.
2. Direction for deposit of Rs. 4 crore.
3. Amendment of the plaint.

Detailed Analysis:

1. Rejection of Interim Relief:
The plaintiffs appealed against the rejection of their prayer for interim relief in G.A. No. 1009 of 2008. They sought various injunctions and the appointment of a special officer/receiver over shares and assets. The learned Single Judge found that the plaintiffs failed to make a strong enough case of repudiation of the memorandum of understanding (MoU) constituting the family settlement. The Judge noted that the family settlement had been substantially implemented and the parties were in effective control of their respective shares. The appellate court upheld this decision, stating that the learned Single Judge's discretion was exercised reasonably and not arbitrarily, capriciously, or perversely. The appellate court emphasized that it would not substitute its own discretion for that of the trial court if the trial court's conclusion was reasonable based on the material on record.

2. Direction for Deposit of Rs. 4 Crore:
The learned Single Judge directed the defendant No. 1 to deposit Rs. 4 crore with the Registrar, Original Side. The appellate court found this direction unwarranted as it was not prayed for by the plaintiffs and contradicted their claim that the family settlement stood repudiated. The court noted that the learned Single Judge ignored the defendant No. 1's claim of adjustment for the said amount and that such a direction was beyond the jurisdiction of the court without a specific application under Order XXV of the Code of Civil Procedure. Consequently, the appellate court set aside the direction for the deposit of Rs. 4 crore and allowed the cross-objection filed by the respondent Nos. 1 and 2.

3. Amendment of the Plaint:
The plaintiffs sought to amend the plaint to include additional family assets discovered through an income tax investigation. The learned Single Judge allowed this amendment, stating that it was sought at the earliest opportunity and before the commencement of the trial. The appellate court upheld this decision, agreeing that the amendment would not prejudice the parties and did not alter the nature and character of the suit. The court noted that the defendants could fully contest the amendment during the trial. The appeal against the order permitting the amendment of the plaint was dismissed.

Conclusion:
The appellate court dismissed the appeal against the rejection of interim relief and the appeal against the order permitting the amendment of the plaint. However, it allowed the cross-objection and set aside the direction for the deposit of Rs. 4 crore. The court emphasized the importance of not interfering with the trial court's discretion unless it was exercised arbitrarily, capriciously, or perversely.