"High Court of Bombay Dismisses Amendment Application in SR Enterprises vs. Gurbachan Kaur Jattinder Singh Chadha Case" "Amendment seeking to challenge Deed of Conveyance and implead new party rejected; Liberty granted to file fresh application on limited facts."


Summary of Judgement

The Bombay High Court, through Justice Arif S. Doctor, dismissed an Interim Application (IA) by the Plaintiff, SR Enterprises. The IA sought to amend the plaint by bringing on record new facts, implead a new defendant (Amardeep Kaur Chadha), and challenge a Deed of Conveyance executed between Defendants 1 and 2. The Court found the proposed amendments unnecessary for resolving the core dispute related to the validity of the termination of the Development Agreement (DA) and Supplementary Agreement (SA). The Court further held that the amendments introduced a new case, which was not aligned with the plaintiff's original claims. However, the Court allowed the plaintiff to file a fresh application for amendments restricted to introducing subsequent facts.

1. Parties and Agreements:

The plaintiff, SR Enterprises, entered into a Development Agreement (DA) and a Supplementary Agreement (SA) with Defendant No. 1 for the redevelopment of a building named "Guru Niwas." The plaintiff alleges that the DA was wrongfully terminated after Defendant No. 1 misrepresented the areas occupied by tenants.

2. Allegations of Misrepresentation:

After the execution of the DA, SR Enterprises claimed it discovered that the actual areas occupied by tenants were larger than those disclosed. Further, Defendant No. 1 allegedly executed a Deed of Conveyance with Defendant No. 2, without informing the plaintiff.

3. Fraudulent Tenancies and Deed of Conveyance:

SR Enterprises alleged that Defendant No. 1 fraudulently created tenancies in favor of his daughter-in-law, Amardeep Kaur Chadha, and continued to act as the owner of the property after executing the Deed of Conveyance, which the plaintiff claimed was a sham.

4. Plaintiff's Application for Amendment:

The plaintiff filed an application seeking to amend the plaint to bring on record these new facts, implead the daughter-in-law as Defendant No. 3, and challenge the Deed of Conveyance.

5. Opposition by Defendant No. 2:

Defendant No. 2 opposed the amendment, arguing that the plaintiff had accepted the termination of the DA and SA by seeking damages rather than specific performance. Defendant No. 2 also contended that the amendments were unnecessary as they introduced new claims irrelevant to the original dispute.

6. Legal Principles Considered:

The Court referred to Section 55(6) of the Transfer of Property Act, 1882, dealing with the rights of buyers, and the doctrine of lis pendens as well as precedents like Usha Sinha v. Dina Ram & Ors., to decide on the merits of the charge claimed by the plaintiff. However, it was held that the charge under the Transfer of Property Act does not apply to the plaintiff, who was not a buyer but a developer.

7. Court's Decision:

The Court dismissed the amendment application, holding that the amendments were unnecessary for determining the real dispute and introducing irrelevant claims. However, the Court granted the plaintiff liberty to file a fresh application restricted to introducing subsequent facts.


Acts and Sections Discussed:

  • Transfer of Property Act, 1882, Section 55(6)(b): Discussed in the context of whether the plaintiff could claim a charge on the property.
  • Doctrine of Lis Pendens: Raised by the plaintiff regarding the invalidity of property transactions during litigation.

Ratio Decidendi:

The core legal issue was whether the proposed amendments were necessary to decide the main dispute, which was the validity of the termination of the DA and SA. The Court held that since the plaintiff had already treated the DA and SA as terminated by seeking damages, the amendments challenging the Deed of Conveyance were irrelevant and introduced a new case. Amendments are to be allowed when they aid in resolving the core dispute, but not when they introduce extraneous matters.


Subjects:

Amendment Application, Real Estate Disputes, Contract Law

Development Agreement, Misrepresentation, Deed of Conveyance, Amendment of Pleadings, Property Law

The Judgement

Case Title:  M/s SR Enterprises  In The Matter Between  M/s SR Enterprises  Versus  Gurbachan Kaur Jattinder Singh Chadha & Anr

Citation: 2024 LawText (BOM) (9) 2701

Case Number: INTERIM APPLICATION (L) NO. 5060 OF 2023 IN COMMERCIAL SUIT NO. 4 OF 2021

Date of Decision: 2024-09-27