FAO (OS) Nos. 207/2010 & 340/2010 Page 1 of 22 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Reserved on: 22nd September, 2010 Decided on: 12th November, 2010 1. FAO (OS) No. 207/2010 & CM No. 5660/2010 (Stay) 1. Shri Pramod Khanna 2. Smt. Kiran B. Khanna Both R/o D-9, Hauz Khas, New Delhi-110 016. ..... Appellants Through: Mr. Sandeep Aggarwal and Mr. K.A. Singh, Advocates. versus 1. Shri Subodh Khanna 2. Smt. Ruby Khanna Both R/o S-438, Ground Floor, Greater Kailash-II, New Delhi-110 048. ..... Respondents Through: Mr. G.D. Chopra, Advocate. AND 2. FAO (OS) No. 340/2010 & CM No. 9290/2010 1. Shri Subodh Khanna, S/o Shri C.P. Khanna 2. Smt. Ruby Khanna, W/o Shri Subod Khanna FAO (OS) Nos. 207/2010 & 340/2010 Page 2 of 22 Both Resident of: W-105, Greater Kailash-II, New Delhi-110 048 ..... Appellants Through: Mr. G.D. Chopra, Advocate. versus 1. Shri Promod Khanna S/o Shri C.P. Khanna 2. Smt. Kiran B. Khanna W/o Shri Promod Khanna, Both Residents of: D-9, Hauz Khas, New Delhi-110 016. ..... Respondents Through: Mr. Sandeep Aggarwal and Mr. K.A. Singh, Advocates. Coram: HON'BLE MR. JUSTICE VIKRAMAJIT SEN HON'BLE MS. JUSTICE MUKTA GUPTA 1. Whether the Reporters of local papers may be allowed to see the judgment? Not Necessary 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be reported Yes in the Digest? MUKTA GUPTA, J. 1. These Appeals are directed against the Impugned Order dated 10th February, 2010 passed in IA No. 9765/2008 in CS (OS) No. 2203/2006 whereby this Application under Order 6 Rule 17 read with Section 151 of the Civil Procedure Code for amendment of the Plaint was partly allowed. FAO (OS) Nos. 207/2010 & 340/2010 Page 3 of 22 2. The Appellants/Plaintiffs Shri Pramod Khanna and his wife Smt. Kiran B. Khanna filed a Civil Suit against the Respondents/Defendants Sh. Subodh Khanna and his wife Smt. Ruby Khanna for declaration, permanent and mandatory injunction in respect of property No. W-105, Greater Kailash-II, New Delhi (hereinafter referred to as the „suit property‟). The Appellant No. 1 and the Respondent No. 1 are brothers and since there were disputes as regards the family owned properties in Delhi and NCR a family settlement was arrived at with the help of mediators. As per the Plaint the Respondents were to give certain sum of money to the Appellants in addition to their share of the properties, however, the entire amount was not given and thus, the Respondents failed to complete their obligation under the purported family settlement. On the Respondents seeking a mutation of the suit property the Appellants objected. As per the Respondents the negotiations came to an end on 24th March, 2006 in terms of an oral settlement which was subsequently reduced into a written family settlement on 4th April, 2006. The Appellants allege that the original copy of the settlement which was with the conciliators, who in connivance with the Respondents have changed the MOU whereas as per the Respondents the settlement was prepared by the legal advisors of the Appellants and as a memorandum of family settlement does not require registration, the same was not got registered. FAO (OS) Nos. 207/2010 & 340/2010 Page 4 of 22 3. By way of the amendment Application the Appellants sought to plead that the parties had signed certain undated letters and documents as the same were said to be required for transfer of the property subsequently in their names and this was done to avoid unnecessary harassment at the hands of either party for no objection certificates etc. The signatures of parties were also taken on the Memorandum of Understanding (MOU) with an understanding that the same related to joint properties of the parties and the Respondents were to pay `7.51 crores to the Appellants as per the MOU. After the signing of the MOU, the parties were required to sign on two sets of non-judicial stamp papers. An MOU was signed by the Appellant No. 1 and his son, however, subsequently when the Appellant No. 2 went to sign the same, she realized that the same was not the original MOU and hence did not sign the same. It is for this reason the Application for amendment was necessitated. 4. Learned counsel for the Appellants states that the amendments sought by the Appellants were just, fair and essential for a just decision of the case. The Appellants were not aware of the complete facts and they derived the knowledge of a forged MOU being prepared by the Respondents in connivance with the conciliators only from the Written Statement, so these facts were set out in the Replication and thus the Application seeking amendment of the plaint was filed. Reliance is placed on Punjab National Bank vs. Indian Bank and another, 2003 (6) FAO (OS) Nos. 207/2010 & 340/2010 Page 5 of 22 SCC 79, Rajesh Kumar Aggarwal and others vs. K.K. Modi and others, 2006 (4) SCC 385 and North Eastern Railway Administration, Gorakhpur vs. Bhagwan Das (D) by Lrs., JT 2008 (4) SC 587. 5. As per the Respondents the Application is clearly a delaying tactic and by way of amendment the Appellants seek to withdraw the admissions already made in the Plaint and the Replication and are now setting up an entirely new case based on new facts. According to the Respondents the Appellants are now challenging the MOU which they signed and have acted upon, as the value of the suit property has increased tremendously. In fact, the Appellants acknowledge and admit the family settlement in the Registered GPA dated 23rd May, 2006. Thus, according to the Respondents it is the Appellants who have prepared a forged and fabricated document and have deliberately filed a photocopy thereof and are desisting to file the original. 6. Learned counsel for the Respondents does not seriously contest the amendments already allowed though he has filed an Appeal being FAO (OS) No. 34/2010 against the Impugned Order. The main contention of the Respondents is that the amendments should not be permitted to the extent the same seek to withdraw admissions already made. According to the learned counsel the amendments sought besides contradicting the case of the Appellant, also proves the Respondent‟s case about codicils being correct. Great reliance is placed upon the Replication filed by the Appellant wherein it is specifically FAO (OS) Nos. 207/2010 & 340/2010 Page 6 of 22 admitted that the codicils were not part of the family settlement and they were kept separately so that once the payments are made the same would be destroyed. The relevant portion of the Replication relied upon by the learned counsel for the Respondents reads as under: “3. That the contents of para 3, as stated, are wholly incorrect and are denied. It is denied that the plaintiffs have suppressed any fact from this Hon‟ble Court, as alleged or at all. The defendants have not produced before this Hon‟ble Court the genuine and complete family settlement. It is submitted that due to certain disputes between the two brothers i.e. plaintiff no. 1 and defendant no. 1, it was decided that in order to avoid family litigation, the matter be resolved through mediation. The defendant suggested mediation by Mr. Puran Suri and Mr. Prem Nath Chopra of M/s Daily Milap Pvt. Ltd. Since Mr. Suri and Mr. Chopra were known to both the defendants and the plaintiffs and were well known in the business circle of Delhi, the plaintiffs agreed to the suggestion of the defendant no. 1. Accordingly, the matter was referred for mediation to the said mediators. Before the mediations, it was decided that the division would be only of the joint properties and not the property standing in the personal name of the parties. It was further decided that the properties would be divided on equal basis and accordingly, to equate the shares of the two groups, a value was fixed to the properties. Since the properties coming to the share to the plaintiff‟s group was valued less, in order to equate the shares, the defendant group was required to make a payment of 7.51 crores to the plaintiffs. These payments were duly mentioned in two codicils i.e. Rs. 6.01 crores and Rs. 1.50 crores respectively, which were signed between the parties and were forming part of the family settlement. The reason that the family settlement does not have a mention FAO (OS) Nos. 207/2010 & 340/2010 Page 7 of 22 of the payment amount/codicils is only because of the reason that it was decided between the parties that once the payments are made by the defendants to the plaintiffs, the codicils shall be destroyed. However, to the utter surprise of the plaintiffs, the defendants in collusion with the mediators only made part payments to the plaintiffs and have stated that there were no codicils. The defendants had paid a sum of Rs. 55 lacs to the plaintiffs by cheque bearing no. 334660 dated 25.6.2006 drawn on ICICI Bank, Connaught Place New Delhi 110001, Rs. 17 lacs cheque bearing no. 347677 dated 31.5.2006 drawn on Citi Bank New Delhi and Rs. 13.5 lacs cheque bearing no. 206050 dated 31.5.2006 drawn on Citi Bank New Delhi. Whereas, the balance amount of Rs. 6.96 crores is still required to be paid by the defendants. Further, the plaintiffs are also shocked that the defendants in collusion with the mediators have included the personal properties of the plaintiffs and have shown them as joint properties. It is submitted that the properties before the mediators were only joint properties and they were nine (9) in number and not thirteen (13) as shown by the defendants. The four (4) properties being Property bearing no. B- 344A, Sushant Lok-I, Property bearing no. 102-B, 1st Floor, Bahadurshah Zafar Marg, New Delhi, Property bearing no. LG-24, Faridabad and Flat No. 204-A, 2nd Floor, Bahadurshah Zafar Marg, New Delhi are all personal properties of the plaintiffs and did not found part of the mediation proceedings.” 7. Respondents contend that it is the case of the Appellants that the MOU did not have any mention of the codicils, however, now on record a photocopy of the MOU relied upon by the Appellants has been placed which clearly mentions about the codicils. Thus, this clearly demonstrates that the photocopy of the MOU filed by the Appellants is FAO (OS) Nos. 207/2010 & 340/2010 Page 8 of 22 a forged/fabricated document. Reliance is placed on Sidharth Sareen and Anr. v. Hira Realtors Private Ltd. and Ors., 2010 (168) DLT 621. 8. We have heard learned counsels for the parties. The Appellants sought amendment in paragraphs 9, 10, 11, 17 and the prayer clause of the Plaint. In respect of paragraph 9 and 11 the Appellants sought deletion of the original paragraphs and incorporation of additional paragraphs 9, 9(a), 11 and 11(a). As regards paragraph 10 the Appellants sought to incorporate additional paragraphs 10(a) to 10 (h) and also to amend paragraph 17 and the prayer clause by additions. By the Impugned Order the learned Single Judge did not permit the deletion of paragraph 9 and 11 however, permitted incorporation of additional averments made in paragraph 9, 9 (a), 11 and 11 (a) of the proposed amended plaint. The incorporation of additional paragraphs 10 (a) to 10(h) to the original para 10 was also permitted. The amendments sought by way of additions to paragraph 17 and the prayer clause, were declined by the learned Single Judge. 9. At this stage it would be relevant to reproduce the amendments in the Plaint sought by the Appellant: Para 9 and 11 are sought to be deleted and new paras 9, 9A, 11 and 11A are sought to be incorporated instead of the original paras as under:- Original Para 9 That after a lot of deliberations and discussions a purported family settlement and other documents etc. FAO (OS) Nos. 207/2010 & 340/2010 Page 9 of 22 were prepared by the said Conciliators/Mediators and the parties were directed to sign the same along with their children. The said Conciliators/Mediators also directed the parties to give certain documents such as Relinquishment Deeds, Affidavits etc. in respect of the division made by the Conciliators/ Mediators in the said purported Family Settlement. Proposed amendments Para 9 That after a lot of deliberations and discussions it was agreed between the parties that all the nine joint properties as stated above should be equally divided amongst the plaintiff No.1 and defendant No.1. The defendant No.1 expressed his interest in certain properties which were of a much higher value than the balance properties that could be taken by the plaintiff No.1. To have an equitable division of properties the parties agreed to evaluate all the joint properties and then to add an appropriate amount of money to be paid by the party taking more valuable properties to the other. In accordance with evaluation of the properties a price differential of Rs.15.02 crores was assessed between the two sets of properties. As a result of this it was agreed that the defendant No.1 would take the high value properties including the entire W-105, Greater Kailash Part II, New Delhi (1000 sq. yards plot area) and as an equalizer would pay a sum of Rs.7.51 crores to the plaintiff No.1. Based on this agreement between the parties, a Memorandum of Family Settlement was prepared and signed by both the parties. The said Memorandum of Family Settlement contained Schedule I which was the description of nine joint properties which were the subject matter of the family settlement. In addition to this Schedule II and Schedule III listed the three properties being taken by the plaintiff No.1 and six properties being taken by defendant No.1 respectively out of the aforesaid nine joint properties. The said Memorandum of Family Settlement also contained as Schedule IV a chart wherein the value of all the nine joint properties were mentioned and the price difference and the amount payable by the defendant No.1 to the plaintiff No.1 was specified. Since the defendant No.1 was not FAO (OS) Nos. 207/2010 & 340/2010 Page 10 of 22 clear and sure at that point of time about the manner and mode of paying Rs.7.51 crores to the plaintiff No.1, the aforesaid Memorandum of Family Settlement also referred to two codicils which were to form part of the said settlement. In fact, these two codicils were also prepared and signed between the plaintiff No.1 and the defendant No.1 at that point of time. Under One codicil a sum of Rs.1,50,00,000/- was agreed to be paid by the defendant No.1 to the plaintiff No.1 and under the other codicil the defendant No.1 agreed to pay a sum of Rs.6,01,00,000/- to the plaintiff No.1 as a precondition to the memorandum of family settlement. These two codicils formed part of the Memorandum of Family Settlement signed by both the parties. Para 9A The Mediators prepared the property transfer documents and certain other documents such as, undated letters addressed to the Assessors and Collector MCD etc. The plaintiffs signed these undated letters and documents. The plaintiffs also signed undated possession letters in respect of properties including property bearing No. W- 105 Greater Kailash-II (1000 sq yards plot area), New Delhi. The plaintiffs also signed undated affidavits containing certain blanks, without dates and photographs. They also signed Special Power of Attorney, which were undated and without photographs. The plaintiffs faintly recollect affixing their signatures on certain other documents also including certain undated and un-numbered pages including blank papers and blank non-judicial stamp papers. All these documents were undated and without any photographs, ID and PAN details of the parties. The defendants also signed similar undated documents including General Power of Attorney, Special Power of Attorney, Affidavits, Relinquishment Deeds, Indemnity Bonds, Conveyance Deeds, possession letters etc. with blanks and without photographs for joint properties taken by the plaintiffs as per the agreed Family Settlement. All these documents were signed in the office of the mediators and were kept by the mediators in their exclusive power and possession. FAO (OS) Nos. 207/2010 & 340/2010 Page 11 of 22 Original para 11 That though the defendant no.1 did pay part of the said amount as directed by the conciliators, he refused to pay the remaining amount to the plaintiff no.1, thus, failing to complete his part of the obligation under the said family settlement. Proposed amendments to the para Para 11 That pursuant to the terms agreed between the parties and reduced in writing in the Actual Memorandum of Family Settlement, the defendants were liable to pay a sum of Rs.7.51 crores (seven crores fifty one lakhs) to the plaintiffs. In order to secure the payment of the plaintiff, the defendants had also deposited a security of Rs.7.51 crores with the mediators, in terms of the said Actual Memorandum of Family Settlement. However, the defendants expressed their inability to pay the said amount and requested the plaintiffs to allow them to sell/dispose off the joint properties, which had gone to their share, so that they can arrange further money i.e. Rs.7.51 crores to be paid to the plaintiffs. The defendant No.1 also assured the plaintiff no.1 that he will give the full sale consideration of the joint properties to the plaintiffs after selling them till he had paid the full equalizing amount of Rs.7.51. crores to the plaintiffs as per the agreed family settlement. To further reassure the plaintiff no.1, the defendant no.1 gave the following three post dated cheques in favour of plaintiff no.1: Cheque No. Dated Amount Bank 334660 25.05.06 25,00,000 ICICI Bank 347677 31.05.06 17,00,000 ICICI Bank 206050 31.05.06 13,50,000 CITI Bank Total 55,50,000 FAO (OS) Nos. 207/2010 & 340/2010 Page 12 of 22 After giving these cheques amounting to Rs. 55,50,000/- (Fifty five lakh fifty thousand) to the plaintiff No. 1 the defendant No. 1 took back from the mediators security of equal value. PARA 11A That after receiving the above three cheques amounting to Rs. 55,50,000, the plaintiffs with a view to settle the disputes and have harmony in the family, agreed to the request of the defendant No. 1 and allowed him to dispose off the joint family properties coming to the share of the defendants. Accordingly, the defendants sold the following properties: Property details Area sq. yards Value (as per Schedule IV) Rs. (in crores) Palam Vihar G-172, Gurgaon, Haryana 1000 sq. yds 2.25 B-345A, Sushant Lok, Phase I, Gurgaon, Haryana 300 sq. yds 1.20 Flat 100 G, Lower Ground Floor, Milap Niketan, 8A, B.S. Zafar Marg, New Delhi-2 695 sq. ft. 0.36 Total 3.81 crores Though, the defendants were able to sell the aforesaid properties whose agreed value as per Schedule IV of Actual Memorandum of Family settlement was Rs. 3.81 crores, the defendants paid only a sum of Rs. 55,50,000/- to the plaintiffs as per details of the cheques given above. Thus, the defendants paid a sum of Rs. 55,50,000/- out of Rs. 7.51 crores payable by defendants to the plaintiffs, leaving a balance of Rs. 6,95,50,000/- (sixty crores ninety five lakhs fifty thousand). Inspite of repeated requests and reminders, the defendants failed to pay the remaining part of the amount of Rs. 6,95,50,000/- to the plaintiffs. FAO (OS) Nos. 207/2010 & 340/2010 Page 13 of 22 Additional paragraphs 10A to 10H are sought to be incorporated after the original para 10, which are reproduced as under:- Original Para 10 That since the share of the defendant No. 1 was considered to be much heavier because of his selection of the joint properties, the said Conciliators also directed defendant No. 1 to make certain payments to the plaintiffs, so as to make the share of joint properties equal. Proposed paras 10A to 10H Para 10 A That on the request of the mediators, the defendants agreed to keep in trust, a security of Rs. 7.50 crores, (seven crores and fifty one lakhs), for fulfillment of their obligation to pay the equalizing amount of Rs. 7.51 crores to the plaintiffs, as per the Actual Memorandum of family settlement and codicils. Para 10 B It was agreed that as and when payment will be made by the defendants to the plaintiffs, the security kept with the mediators for the corresponding amount will be returned back to the defendants by the mediators. Para 10 C Since the draft of Memorandum of family settlement signed earlier by the parties was lying in the computer of the mediators, the mediators said that they will print its two sets on non judicial stamp papers so that both the parties may sign them and get them registered after the completion of the family settlement and payment of Rs. 7.51 crores by defendants to plaintiffs as per agreed family settlement. FAO (OS) Nos. 207/2010 & 340/2010 Page 14 of 22 Para 10 D That subsequently, the mediators told the plaintiff No.1 that they had printed two sets of the memorandum of family settlement on Rs. 100/- non judicial stamp papers. The mediators told the plaintiffs to sign this purported memorandum of family settlement printed by them on non judicial stamp papers. This was also not having photographs and no ID and PAN details had been written on them. The photographs, ID, PAN and other details were to be filled on these documents at the time of registration of these documents after the family settlement was completed and the equalizer amount of Rs. 7.51 crores was paid by defendants to plaintiffs as per agreed family settlement. When the plaintiff No.1 wanted to read it before signing, the mediators told him that this memorandum of family settlement printed by them on non judicial stamp papers was the same as the memorandum of family settlement signed earlier by the parties. The mediators also told the plaintiff No.1 that he should have faith in the mediators and sign these documents without having any doubts in this regard. In good faith and trust the plaintiff No.1 and his son signed this purported Memorandum of Family Settlement which as per the mediators was identical to the Memorandum of Family Settlement signed earlier by the parties. Para 10 E Later on when this purported memorandum of family settlement printed by the mediators on non judicial stamp papers was given to plaintiff No.2 for signing, she noticed that this purported Memorandum of family settlement was not same as the Actual memorandum of family settlement signed earlier by the parties. In this purported memorandum of family settlement the schedule I was having 13 properties as joint properties instead of nine joint properties in Schedule I of the „Actual Memorandum of Family Settlement.‟ Also Schedule II was having seven joint properties instead of three joint properties in schedule II of the Actual memorandum of Family Settlement. The four additional properties added in these schedules of the purported memorandum of family settlement were not joint properties and were the individually owned properties of the plaintiffs and their family members. Even the names of Angela Khanna, Payal Arora and Cherry Khanna were FAO (OS) Nos. 207/2010 & 340/2010 Page 15 of 22 added which were not there in the Actual Memorandum of Family Settlement. Also Schedule IV of the Actual Memorandum of Family Settlement which referred to the valuation of properties was missing and there was no mention of codicils and payment of equalizer amount of Rs. 7.51 crores payable by defendants to the plaintiffs. Besides these, there were also some other changes in certain other paragraphs and schedules. The plaintiffs were shocked to see the above discrepancies in the purported Memorandum of Family Settlement. The plaintiff No. 2 categorically refused to sign this purported Memorandum of Family Settlement unless the entire equalizer amount of Rs.7.51 crores was paid by the defendants to the plaintiffs. Para 10 F The mediators immediately took away the purported Memorandum of Family Settlement from the hands of plaintiff No.2 on the pretext of looking into the problem. The mediators then told the plaintiff that there seems