JUDGEMENT
AR.Lakshmanan, J. -
(1.)THE above appeals were filed against the final order dated 27 08 2001 passed by the High Court of Delhi in FAO (OS) No 35/2000 and C M No 387/2001 whereby the High Court of Delhi allowed the appeal of the respondents
(2.)THE short facts of the case are as follows:-
"(1) By a Deed of Trust dated 01 05 1979, a Trust in the name and style of Modipon Limited Senior Executives (Officers) Welfare Trust was formed THE said Trust was formed for the general benefit of employees employed in the Fibre Division only of Modipon Limited and the purpose was to provide benefits to such employees and dependent members of their families particularly for the purposes of giving them education, medical relief, facilities for sports, cultural and other activities on sound, permanent and organized basis
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(2) THE appellants are beneficiaries of Modipon Limited Senior Executive (Officers) Welfare Trust THE respondents (defendant nos. 1 -4) are Trustees of the Trust and respondent no.5 is the Secretary of the Trust THE Trust purchased 19,314 equity shares of Godfrey Philips (India) Limited (in short 'GPI') in the name of respondent no. 1 in his capacity as a trustee of the Trust. GPI issued bonus shares in the ratio of 1:1 to its existing shareholders. Bonus shares were issued in the ratio of 1:1 in the year of 1992-93. By reason of the above, the Trust became entitled to 57,942 shares of GPI. According to the appellant, the bonus shares issued have not been forwarded to the Trust and the share certificates despatched by GPI from time to time were not received by the Secretary of the Trust. It was further stated that a new account was opened by respondent no.1 at Oriental Bank of Commerce in his name and not in the name of the Trust and is being operated by respondent no.1. Since the beneficiaries of the Trust were not deriving any benefit from the Trust and as such the appellants were constrained to file a suit for declaration permanent injunction and mandatory injunction in the High Court of Delhi, which was registered as Suit No 181/97, against the respondents claiming following amongst other reliefs:
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a) a decree for declaration that defendant no.1 is not a fit and proper person to continue as trustee of Modipon Limited Senior Executive Welfare Trust; b) a decree directing that defendant no. 1 is removed from such office by the orders of this court;
c) a decree of permanent injunction restraining defendant no.1 and/or his servants, agents and assignees from operating the saving account no. 9089 opened in Oriental Bank of Commerce, New Friends Colony, New Delhi;
d) a decree by way of mandatory injunction restraining defendant no.1 from depositing the dividend/bonus shares received in future from GPI in the account opened by him with defendant no.6 at Delhi and simultaneously directing him to forward the same to the secretary of the Trust;
e) a decree of mandatory injunction in favour of the plaintiff to direct defendant no.1 to hand over the relevant Bonus Share Certificate in account to 9089 and dividend amounting to Rs. 15,64,434.00, or any other amount of GPI to the secretary of the Trust, i.e. defendant no.5 herein;
f) pass such other order or further order/orders as this court may deem fit and proper in the facts and circumstances of the case
(3) Written statement was filed on behalf of respondent nos. 1 and 5 before the High Court
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(4). On 23.09.1998 the appellants filed an application being I A No 8479/1998 under Order VI Rule 17 read with Section 151 CPC seeking leave of the court to amend the plaint and to incorporate the following amendments to the original plant of the appellants -
"12(a) THE beneficiaries of the trust are not deriving any benefit from the creation of the Trust since 1991-1992 and as such the object of the Trust has been frustrated I he Trust as of date owns 77256 shares of GPI but 57942 of the shares are in the exclusive power and possession of defendant no 1 Only 19314 shares of GPI are in the possession of defendant no 5 being the secretary of the Trust It is stated that GPI declared a dividend of Rs 7/- per share in the year 1996-1997 when the market price of the shares was between Rs 250-300/- per share which means a mere 2 5% return on the investment per annum If the said GPI shares were to be sold and then invested in Government Bonds/ Securities the investment would yield a minimum (return of 10% to 12% per annum) It is pertinent to mention that since 1991-92 even the dividend declared on GPI shares are being solely appropriated by the defendant no 1 to the exclusion of the beneficiaries Since defendant no 1 who is holding the said shares of the Trust is deriving benefit by holding the shares the beneficiaries of the Trust are being deprived from the benefit which they are entitled to It is in the interest of justice that the said shares may be sold and then invested in Government Bonds and/or Securities which will be in interest of beneficiaries because at present the beneficiaries are not deriving any benefit by virtue of the said shares which are in power and possession of defendant no 1 as is evident from the records of the case Similarly, the appellants sought amendment in paragraph 15 and want to incorporate relief of mandatory injunction as per prayer (b-1) to be read as under -
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Pass a decree of mandatory injunction directing the defendants to sell the shares of GPI held by the Trust and use the sale proceeds thereof for the benefit of the beneficiaries "
(5) THE application was filed under Order VI Rule 17 CPC Respondent no 1 filed reply to the said application THE appellants filed their rejoinder to the reply of respondent no 1 to the said application
(6) THE learned single Judge of the High Court, vide his order dated 31 08 1994, allowed the application of the appellant seeking relief of amendment to the plaint Respondent no 1 herein filed First Appeal against the orricr of the learned single Judge which was legistered as FAO (OS) No 35/2000 whereby the learned single Judge had allowed the application of the appellants seeking the relief of amendment of plaint
(7) THE Appellate Court allowed the appeal filed by respondent no 1 and dismissed the application of the appellants for amendment of plaint on the ground that the proposed amendment introduces a totally different, new and inconsistent case and that the application does not appear to have been made in good faith and at the instance of some one behind the curtain Aggrieved against the said order, the above civil appeals have been filed"
We heard Mr Mukul Rohtagi learned senior counsel appearing for the appellants and Mr S Ganesh, learned senior counsel appearing for the contesting respondents along with other counsel for the parties
Elaborate and lengthy submissions were made by learned senior counsel appearing on either side by inviting our attention to the pleadings, annexures filed and the judgments impugned
(3.)MR Mukul Rohtagi submitted that the High Court is not justified in disallowing the amendment of the plaint so as to defeat the valuable rights of the appellants He would further submit that the court was not correct in dismissing the application in view of the settled position of law that all amendments of pleadings should be allowed which are necessary for determination of the real controversies in the suit and that the amendment proposed by the appellant was necessary for determining of the real controversies in the suit This apart the Division Bench was not right in rejecting the application at the stage of amendment when it is settled law that the court does not enter into merits at the stage of amendment According to MR Rohtagi, the appellants sought an amendment that the shares be sold and then invested in Government Bonds and/or securities which will be in the interest of beneficiaries because presently the beneficiaries were not deriving any benefit by virtue of the said shares which are in power and possession of respondent no 1 as is evident from the records
Mr Rohtagi learned senior counsel for the appellants, in support of his contention placed strong reliance on the following three judgments of this Court being M/s Ganesh Trading Co. v. Moji Ram, Jai Jai Ram Manohar Lal v. National Building Material Supply, Gurgaon, Ragu Thilak D. John v. S. Rayappan and Others