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TMI Blog2018 (9) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... mited purpose of better understanding and appreciation of this order. 4 The nature of the lis i.e., broad facts as it unfurls from the plaint are that defendant had promoted two companies in the name and style 'AUM Consultancy Pvt. Ltd.' and 'AUM Agrotech Ltd.', which shall hereinafter be referred to as 'Consultancy Company' and 'Agrotech Company' respectively for the sake of convenience and clarity. It further unfurls from the pleadings that two agreements dated 14.06.2010 styled as 'Share Purchase Agreements' came to be executed between the defendant and the plaintiff with regard to Consultancy company and Agrotech Company. The scope of the Share Purchase agreements broadly are to the effect that the plaintiff would purchase 60% shares in both companies [to be noted, 60% shares is a mandatory requirement under the Companies Act, 2013 (hereinafter referred to as 'New Companies Act' for brevity)] for passing special resolutions. Pursuant to aforesaid Share Purchase agreements, plaintiff had ploughed in Rs. 58,80,000/- in the Consultancy company and Rs. 46,20,000/- in the Agrotech Company [totalling Rs. 1,05,00,000/- (Rs.1.05 Crores) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ua consultancy company alone. It is not in dispute that this company petition complaining of oppression and mismanagement is also predicated on the share purchase agreement dated 14.6.2010, but obviously pertaining to consultancy company. Defendant who has been arrayed as respondent No.2 in the aforesaid company petition in NCLT entered appearance and contested the company petition. Besides contesting the company petition on merits, a preliminary objection pertaining to very maintainability of the company petition was taken by defendant (second respondent in the company petition before NCLT) primarily on the ground that the plaintiff had already sought return of shares purchase money, interest, costs and damages or in other words, plaintiff has already rescinded the share purchase agreements dated 14.6.2010 by filing C.S.No.778 of 2014 (main suit herein) and therefore, cannot now pursue the company petition (filed on 14.10.2016) on grounds of oppression and mismanagement, which for all practical purposes is seeking specific performance of that very share purchase agreement qua consultancy company, which has already been rescinded on 07.11.2014 when the main suit herein was present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of action in the NCLT and in the instant suit are completely different, besides being distinct and therefore, it cannot be gainsaid that this is an application for withdrawal of a part of the suit claim for pursuing some other remedy. To be noted, the defendant resists this application saying that this amendment application is an application under sub-rule (3) of Rule 1 of Order XXIII CPC in disguise and the causes of action are distinct and different. 12 It was argued by learned counsel for plaintiff that no prejudice or hardship would be caused to defendant. It was urged that the amendment sought is live and it has not become stale. 13 In the light of the submissions that have been made before me in the instant application, it may be necessary to extract Rule 17 of Order VI of CPC as well as Rule 1 of Order XXIII of CPC. To be noted, Rule 1 of Order XXIII consists of five sub rules. The same have also been reproduced infra : Rule 17 of Order VI of CPC : 17.Amendment of pleadings.--The Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions made by both learned counsel, I am of the considered view that the scope of this application turns on a very narrow compass. That narrow compass is to test whether this amendment application has the effect of changing the nature / character of the suit and as to whether it causes any prejudice to defendant. I deem it appropriate to refer to a judgment of Hon'ble Supreme Court in Mount Mary Enterprises Vs. Jivratna Medi Treat Private Limited reported in (2015) 4 SCC 182, wherein Hon'ble Supreme Court had held that exemptions to acceding to the prayer in an amendment application are change in the nature of the suit and some prejudice being caused to the defendant. In other words, in Mount Mary Enterprises case, the principle laid down by Supreme Court is that an amendment application should normally be granted unless by virtue of the amendment, nature of the suit is changed or some prejudice is caused to the defendant. Therefore, the question is whether this amendment application will attract the aforesaid two exemptions to the rule of generally and normally acceding to the prayer for amendment. 15 In my considered opinion, a chronicle of some of the dates wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Act, 1872, which reads as follows : "64.Consequences of rescission of voidable contract.--When a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise therein contained in which he is promisor. The party rescinding a voidable contract shall, if he has received any benefit thereunder from another party to such contract, restore such benefit, so far as may be, to the person from whom it was received." 18 Referring to Section 64 of the Indian Contract Act, it was submitted that when a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise thereunder. In other words, it was submitted that the share purchase agreement is voidable at the instance of plaintiff and plaintiff has chosen to rescind the same by filing the instant suit being C.S.No.778 of 2014 on 07.11.2014. After doing so, there was no obligation on the part of the defendant to perform in accordance with any of the covenants in the share purchase agreement qua consultancy company and therefore, the company petition is not maintainable. On being confronted with the offensive defence (if one may say so) that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d disabled himself from making the averment that he had always been ready and willing to perform his part of the contract. Similar is the situation in this case, where the plaintiff was fully aware of the reliefs available to him owing to the alleged non-performance of the obligations by the defendant under the terms of the agreement dated 1.2.1983, but he had chosen in the first instance to secure the relief of specific performance in the first notice dated 23.4.1985, though in the second notice dated 28.1.1986, he had cancelled the agreement and had demanded only the refund of the advance amount and some Other amount. This would amount to an election on the part of the plaintiff treating the agreement as cancelled and seeking to recover only the advance amount paid thereby disabling himself from claiming the relief of specific performance." 20 The other judgment pressed into service in the hearing is Roop Chand Chaudhari Vs. Ranjit Kumari reported in AIR 1991 P&H 212. It was very pithily held that plaintiff suing for specific performance can alternatively sue for damages, but converse is not true. Roop Chand Chaudhari case was rendered by a Division Bench of Punjab and Haryana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , plaintiff continues to persists and pursue the prayer for damages qua consultancy company also. Therefore, if this prayer in the amendment is acceded to, it will have the effect of plaintiff pursuing remedy of enforcement in the share purchase agreement in NCLT and also seeking damages by rescinding the same on the ground of non performance by defendant. There is no dispute or disagreement that the suit prayer is also for damages for a sum of Rs. 2 Crores pertaining to both companies, i..e, consultancy company and Agrotech company. 25 Now, I proceed to discuss twofold litmus test. 26 An option was given to plaintiff to withdraw the instant amendment application and revive the prayer if advised to do so after disposal of C.P.No.7 of 2016 on the file of NCLT. This option was not taken by the plaintiff. On the contrary, it was specifically pointed out that certain submissions and concessions have been made before NCLT culminating in the order dated 12.2.2018 made by NCLT. To be noted, order dated 12.2.2018 made by NCLT reads as follows : "Counsels for both the parties are present. Counsel for the Petitioner has submitted an affidavit; copy of which is given to the other side. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so to be noticed that besides Madras High Court judgment, Punjab and Haryana High Court has also followed the principle laid down by Supreme Court in Jawahar Lal Wadhwa Vs. Haripada Chakroborty reported in AIR 1989 SC 606 : (1989) 1 SCC 76. The principle laid down by Supreme Court in Jawahar Lal Wadhwa case is to the effect that once there is alleged breach and a prayer for damages has been sought for by a party, then that party cannot pray for specific performance of the same contract. This is precisely what the plaintiff is attempting to do in the instant case by pursuing this amendment application. In other words, if the prayer in the amendment application is acceded to, it would tantamount to permitting the plaintiff to seek for specific performance of share purchase agreement dated 14.6.2010 qua consultancy company after rescinding the alleged breach and seeking damages for the same. Further to be noted, the plaintiff is continuing to seek damages qua Consultancy company. In effect, acceding to the prayer in the instant application would tantamount to allowing the plaintiff to do what they are prohibited from doing in the light of the principle laid down by Supreme Court in J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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