CM(M) 673/2021 Page 1 of 16

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 02.09.2026

Date of Decision: 21.09.2026

Date of Uploading:21.09.2026

# CNR No. DLHC010309782021

+ CM(M) 673/2021 & CM APPL. 34697/2021

LOKESH DHAWAN .....Petitioner

Through: Mr. Ashutosh K umar,

Ms. Gunity Singh, Ms. Jitasha

Bahl, Mr. Ayush Sharma and

Mr. Vikram Shantu, Advs.

versus

ARUN DHAWAN & ORS. .....Respondents

Through: Mr. Vikas Tiwari and

Mr. Faisal M. Khan, Advs. with

Mr. Ojasvi Arora, Adv. for R-1

& 4

CORAM:

HON'BLE MR. JUSTICE AJAY DIGPAUL

J U D G M E N T

%

1. Through the present petition, the petitioner seeks to challenge

the order dated 26.08.2020 passed by the learned trial court in

“Lokesh Dhawan v Arun Dhawan” bearing CS No. 10994/2016

whereby the learned trial court has dismissed the petitioner/plaintiff’s

application for amendment of plaint under Order VI Rule 17 of the

Code of Civil Procedure, 1908.

2. The brief facts of the underlying case are as follows –

3. The present case emanates from an inter-se family dispute

between the parties. The petitioner, respondent no. 1 and respondent

no. 4 are three sons of the Late. Sh. Krishan Chander Dhawan.

Respondent no. 2 is the daughter of Late. Sh. K.C. Dhawan who has

CM(M) 673/2021 Page 2 of 16

transferred her interest in the case to respondent no. 1, and respondent

no. 3, who was represented through his legal heirs, was also the son of

Late. Sh. K.C. Dhawan. Respondent no. 2 and 3 were proceeded ex-

parte vide this Court’s order dated 01.06.2022. Hence respondent no.

1 and 4 are the only contesting respondents.

4. Late. Sh. K.C. Dhawan is stated to be the director and owner of

Dhawan Electricals Pvt. Ltd and of a sister concern called AK

Electricals. Dhawan Electricals is stated to have comprised of 1000

shares, out of which Late. Sh. K.C. Dhawan owned 85% of the shares

viz. 850 shares, and the petitioner is stated to have owned 10 shares

with the rest of the shares being divided between the rest of the family

members. The petitioner was also a director of Dhawan Electricals and

is stated to have drawn a salary of Rs. 50,000/- per month in that

capacity till 2011.

5. Late. Sh. K.C. Dhawan demised intestate on 17.06.2010. It is

stated by the respondents that before passing away, Late. Sh. K.C.

Dhawan, in the presence of all the other legal heirs, transferred all his

shareholding to respondent no.1.

6. The petitioner instituted the underlying partition suit on

21.04.2012 seeking a decree of partition in respect of the immovable

properties listed in the schedule therein, and consequential reliefs of

possession and injunction against the partitioned properties.

7. The petitioner had filed a petition under sections 397, 398, 402

and 403 of the Companies Act, 1956 before the learned Company

Law Board seeking among other reliefs, a direction that all

amendments to the shareholding shall be considered to be illegal and

void. The petitioner has contended inter-alia that before the demise of

Late. Sh. K.C. Dhawan, respondent no. 1, pursuant to a forged board

CM(M) 673/2021 Page 3 of 16

meeting dated 17.06.2010 fraudulently transferred 85% of the

company’s shareholding.

8. The learned trial court in the suit for partition vide order dated

04.05.2012 directed the respondents to maintain status-quo qua the

properties mentioned in Schedule I, and framed 4 issues vide order

dated 27.08.2013. The court further directed the petitioner/plaintiff to

file the evidence by way of affidavit within 12 weeks.

9. Thereafter, on 20.03.2014, the petitioner filed an application

under Order VI Rule 17 seeking to amend paras 5-A to 5(BBB) of

their plaint. The petitioner broadly contended inter-alia-

a. Upon the demise of their father, the surviving legal heirs

mutually decided to divide all properties – movable and

immovable in 6 equal halves. However, contrary to the

assurances, the petitioner was ousted from the company in

February 2011, and after being confronted with the same, the

respondent disclosed that while on his deathbed, Late. Sh. K.C.

Dhawan transferred all his shareholding to respondent no. 1.

b. To that effect, the respondent no. 1 gave the petitioner a

Minutes of Meeting dated 16.08.2010 which stated that the

transferred shares have been accordingly distributed between

the surviving legal heirs.

c. Pursuant to the stated transfer, the records in the Registrar of

Companies have been amended and the new shareholding is

reflected therein.

d. Accordingly, the prayer clause of the petition was also

amended to include prayer clause (g) viz. decree of partition for

the movable properties of Late. Sh. K.C. Dhawan including

bank accounts, shares of the company Dhawan Electricals Pvt.

CM(M) 673/2021 Page 4 of 16

Ltd, Fixed Deposits, Jewellery, Cash, etc.

10. The learned trial court vide order dated 26.08.2020 dismissed

the petitioner’s application under Order VI Rule 17. The learned trial

court dismissed the petitioner’s application noting as follows- the

petitioner being a director of Dhawan Electricals would have known

about the transfer of shareholding, the petitioner’s petition challenging

the transfer of shares before the learned NCLT is pending

adjudication, and the prayer for inclusion of partition of shares would

change the nature of the suit.

11. The learned counsel of the petitioner has submitted that the

learned trial court has erred in holding that the petitioner knew about

the transfer of shares, and thus, has not fulfilled the test of due

diligence. The petitioner has submitted that on 17.06.2010, when the

shares were purportedly transferred by Late. Sh. K.C. Dhawan to

respondent no. 1, the petitioner was not available in the hospital, and

hence at the outset, he did not have the knowledge of the transfer of

shares. Thus, at that stage, the petitioner was not aware of any transfer

of shares and was not aware that the records of the shareholding have

been changed in the ROC.

12. He has submitted that even on 17.06.2011 viz. the death

anniversary of Late. Sh. K.C. Dhawan, the respondent no. 1 gave the

petitioner a minutes of meeting dated 16.08.2010 showing that the

shareholding has been divided in 1/6

th

share, and appropriately been

transferred to the petitioner. Thus, even on 17.06.2011, the petitioner

did not have any reason to distrust the minutes of meeting which

stated that the shareholding will be divided equally in 1/6

th

shares, or

have any reason to believe that contrary to the minutes of the meeting

dated 16.08.2010, the shareholding has been transferred in its entirety

CM(M) 673/2021 Page 5 of 16

to respondent no. 1.

13. He has also submitted, that even assuming that the petitioner

could have had some inkling of knowledge regarding

misappropriation of shares, the petitioner, in his plaint in paragraph

no. 5 has stated that he was unaware of any dealings in shares, and

reserves his rights to raise the same at a later stage.

14. He has submitted that contrary to settled principles of law as

enshrined in Rajesh Sharma v Krishan Pal & Anr.

1

, the learned trial

court, while dismissing the application has considered the merits of

the proposed amendment. He has submitted that the scope of the court

at the stage of Order VI Rule 17 CPC is constrained only to assessing

whether the amendments sought to be introduced were within the

plaintiff’s knowledge, or could have been within knowledge with

appropriate due diligence.

15. He has submitted that the learned trial court has conducted a

detailed assessment of the nature of reliefs sought in the CLB petition

and has compared the same with the proposed amendments, and that

the same is exceeding the scope at the stage of Order VI Rule 17,

thereby making it impermissible in law. He has submitted that the aim

of allowing amendments under Order VI Rule 17 CPC is to bring out

the core underlying dispute of the case so as to ensure effective

adjudication.

16. Stemming from the same premise, he submits that the learned

Trial Court has adopted an unduly narrow approach while considering

the application under Order VI Rule 17 CPC. The proposed

amendment was only intended to place the complete factual position

1

CS(OS) No. 800/2006

CM(M) 673/2021 Page 6 of 16

on record and assist the Court in effectively adjudicating the dispute.

The rejection of the application has, therefore, according to him,

resulted in relevant facts being excluded from consideration, thereby

impeding a complete and effective adjudication of the controversy. To

this effect, he has placed reliance on the judgment of the Hon’ble

Supreme Court in BK Narayana Pillai v Parmeswaran Pillai & Ors.

2

17. Lastly, he has placed reliance on the judgment of Baldev Singh

& Ors. v Manohar Singh & Anr.

3

and has submitted that the learned

trial court has wrongly held that the amendment is hit by the proviso

of Order VI Rule 17 CPC. He has submitted that the trial shall

commence when the evidence has led, and since the same is yet to

happen in the present case, the amendment should be allowed.

18. Per contra, the learned counsel for the respondent has relied

upon the jurisdictional bar under section 430 of the Companies Act,

and has submitted that notwithstanding the amendment, the learned

trial court is barred from adjudicating the issue of transfer of shares

since the same is sub-judice before the learned NCLT. To this effect,

he has placed reliance on a judgment of a coordinate bench of this

Court in M/S Karyan Global LLP v. Vivek Kumar Mishra & Ors.

4

19. He has submitted that the petitioner is forum shopping and that

the issue of legitimacy of transfer of shares is already pending

adjudication before the learned NCLT. Till the time the learned NCLT

does not hold that the shares were illegally transferred, till then the

same cannot be partitioned and an amendment thereto cannot be

2

(2000) 1 SCC 712

3

(2006) 6 SCC 498

4

CRP 10/2025

CM(M) 673/2021 Page 7 of 16

sought. He has also reiterated that the learned NCLT is a specialized

tribunal created for adjudicating exactly such issues, and that in such

circumstances, multiplicity of proceedings should not happen.

20. He has submitted that the shares having been transferred before

the demise of Late. Sh. K.C. Dhawan did not form a part of his estate,

and thus, cannot be divided equally in a partition suit. Thus, since the

partition suit was for the properties forming Late. Sh. K.C. Dhawan’s

estate, the learned trial court has rightly dismissed the amendment

which sought to include the already transferred shares in the estate.

21. He has also submitted that the suit has been filed in May 2012

and the CLB petition challenging the transfer of shares and alleging

oppression and mismanagement was filed sometime in August 2012,

whereas, the amendment application was filed in 2014 stating that the

petitioner did not have prior knowledge of the transfer of

shareholding. He has submitted that the contention is logically

inconsistent and infeasible.

22. He has submitted that the petitioner being a shareholder and a

director has entirely failed the test of due diligence as required under

Order VI Rule 17. He has submitted that it is not possible that a

director of a company would not have knowledge for approximately

two years of the transfer of the majority shareholding of the company.

Furthermore, since the petitioner was a salary-drawing director whose

salary stopped in 2011, it is obvious that he would have known about

the transfer of shareholding. That being the case, the amendment

application having been filed approximately 3 years after the

petitioner’s salary was stopped runs contrary to the test of due

CM(M) 673/2021 Page 8 of 16

diligence, and the amendment application is simply a way to fill the

lacuna in the petitioner’s case.

23. Lastly, relying on the judgment of the Hon’ble Supreme Court

in Kailash v Nankhu

5

he has submitted that the learned trial court has

rightly held that the amendment application which was filed after the

framing of issues, is obviously after the commencement of trial.

24. In rebuttal to the reliance of the learned counsel for the

respondent on M/s Karyan Global, the learned counsel for the

petitioner has relied on Aruna Oswal v Pankaj Oswal & Ors.

6

to state

the learned NCLT does not have the powers to decide questions of

inheritance and title, and thus the matter should be heard by the

learned trial court. He has further relied on Ammonia Supplies

Corporation Private Limited v Modern Plastic Containers Pvt. Ltd.

7

to submit that in cases of seriously disputed questions of title or

where forgery is alleged, the same falls outside the summary

rectification jurisdiction of the learned NCLT.

25. Heard. Perused the records.

26. Upon a conspectus of the arguments, the petitioner has raised

the following points for consideration – (a) learned trial court has

erred in presuming petitioner’s knowledge qua transfer of shares; (b)

learned trial court has erred in comparing the reliefs sought in the

CLB petition; and (c) learned trial court has erred in considering the

merits of the proposed amendments and taking an overly restrictive

approach at the Order VI Rule 17 stage.

27. Before proceeding with the merits of the issue, it is pertinent to

5

(2005) 4 SCC 480

6

(2020) 8 SCC 79

7

(1998) 7 SCC 105

CM(M) 673/2021 Page 9 of 16

first analyse the contention of the jurisdictional bar to the learned trial

court in view of the pending petition before the learned NCLT.

28. In the present case, the petitioner has filed a CLB petition under

sections 397, 398, 402 and 403 of the Companies Act, 1956 seeking,

among other reliefs, a direction that all amendments to the

shareholding shall be considered to be illegal and void. Admittedly,

the shares have been transferred, and the corresponding changes have

been made in the records of the ROC. Thus, till the time the legality of

the transfer of shares is not decided in favour of the petitioner, and

proceedings before the learned NCLT thereto do not attain a quietus,

the learned trial court could not have included the disputed shares

within the partition suit.

29. Otherwise also, the issue as regards to the illegal transfer of

shares in favour of the respondent/defendant can be evaluated by the

learned NCLT, which has the competence to decide the same.

30. At this juncture, it is relevant to deal with the petitioner’s

contentions that the issue regarding transfer of shares requires a

careful consideration of evidences, which falls beyond the summary

jurisdiction of the learned NCLT, thus requiring the jurisdiction of the

civil courts.

31. The Hon’ble Supreme Court in numerous of judgments viz.

Radharamanan v Chandrashekhar Raja

8

, Kamal Kumar Gupta v

Ruby General Hospital Ltd.

9

has held that the learned CLB (now

learned NCLT) exercises wide quasi-judicial powers and has the

trappings of a court.

8

(2008) 6 SCC 750

9

(2006) 7 SCC 613

CM(M) 673/2021 Page 10 of 16

32. Further, the Hon’ble Supreme Court in Tata Consultancy

Services Ltd. v Cyrus Investments (P) Ltd.

10

noted that the object of

the learned NCLT while dealing with an application complaining of

oppression and mismanagement is to bring an end to the entire

complaint and any ancillary matters thereof.

33. Lastly, the Hon’ble Supreme Court in Mrs. Shailja Krishna v

Satori Global Limited & Ors.

11

noted inter-alia as follows –

30. The aforesaid decisions confirm the view that the

NCLT/CLB possess a wide jurisdiction to decide all such

matters that are incidental and/or integral to the complaint

alleging oppression and mismanagement. Such power is,

however, subject to any other legislative enactment specifically

debarring the NCLT/CLB from exercising its powers in this

respect.

31. in the instant case, it is an admitted fact that the

determination of whether the gift deed is valid or not is central to

the decision herein, and therefore, the NCLT did have full

jurisdiction to decide whether the gift deed is valid or not, or

whether it is against the provisions of the 1956 Act and/or

internal regulations of the company, including but not limited to

the AoA and the Memorandum of Association.” (emphasis

supplied)

10

(2021) 9 SCC 449

11

AIR 2025 SUPREME COURT 4047

CM(M) 673/2021 Page 11 of 16

34. Applying the ratio of Mrs. Shailja Krishna to the present case,

it is clear that the transfer of shares dated 17.06.2010 is central to the

issue and falls squarely within the jurisdiction of the learned NCLT.

35. A perusal of the aforementioned authorities makes it abundantly

clear that in cases of oppression and mismanagement, as is the case

pleaded out in the CLB petition, the learned NCLT has complete

jurisdiction to adjudicate all issues necessary for bringing a quietus to

the issue.

36. The learned counsel for the petitioner has also submitted that

the learned NCLT is not empowered to decide questions of rights, title

and inheritance and is thus not the appropriate forum to decide the

issue of transfer of shares.

37. It is relevant to consider the following important distinction.

The question of title and inheritance would only have arisen when the

shares were still a part of Late. Sh. K.C. Dhawan’s estate, however,

admittedly the shares have been transferred to respondent no. 1 prior

to the death of Late. Sh. K.C. Dhawan. Since the shares have already

been transferred, and do not form a part of his estate on the day when

the partition is sought, thus, there arises no question of inheritance.

38. The issue pending before the learned NCLT is not one of

inheritance, but to adjudicate whether the transfer of shareholding qua

the purported board meeting dated 17.06.2010, prior to the death of

Late. Sh. K.C. Dhawan, is legal or not. In that view, the reliance on

Aruna Oswal is misconceived as the same proceeds on an assumption

that the question pending before the learned NCLT is one of

inheritance.

CM(M) 673/2021 Page 12 of 16

39. The petitioner would have first have to demonstrate that the

shares have illegally been transferred to respondent no. 1 and only

when such transfer is repudiated, and the shares consequently fall in

the estate of Late. Sh. K.C. Dhawan, only then does the question of

right, title and inheritance arise.

40. It is also relevant to consider the conduct of the petitioner in

pursuing the present proceedings. The petitioner instituted the

underlying suit for partition in 2012 and, in the same year, instituted

parallel proceedings before the learned CLB under Sections 397, 398,

402 and 403 of the Companies Act. Thereafter he moved an

application seeking amendment of the plaint, which came to be

dismissed in 2014, and is now under challenge in the present

proceedings. Both the civil suit and the proceedings before the learned

CLB have remained pending and have not attained finality. The

successive proceedings and challenges pursued by the petitioner has

had the effect of keeping the underlying issues alive and preventing

their final resolution.

41. Furthermore, the reliance on Ammonia Suppliers is

misconceived on facts. In that case, the learned Company Judge had,

during the course of proceedings, confined the scope of the matter to

rectification under Section 155 of the Companies Act, 1956. The

reliefs and the scope of jurisdiction under Section 155 are materially

narrower than those under Sections 397 and 398, which govern the

present proceedings.

42. Before proceeding with the merits of the issues regarding lack

of due diligence, this Court deems it apposite to note that the Hon’ble

CM(M) 673/2021 Page 13 of 16

Supreme Court in LIC v Sanjeev Builders Pvt. Ltd. & Anr.

12

has

culled out the following principle–

“71.2 All amendments are to be allowed which are necessary

for determining the real question in controversy provided it

does not cause injustice or prejudice to the other side. This is

mandatory, as is apparent from the use of the word “shall”, in

the latter part of Order VI Rule 17 CPC.”

43. In the present case, this Court is of the opinion that allowing the

amendment and including the already transferred shares, the legality

of which is pending adjudication, within the partition suit would cause

significant prejudice to the respondent, and is thus, impermissible.

Since the shares had been transferred and the same do not now form a

part of Late. Sh. K.C. Dhawan’s estate, it would be impermissible for

the learned trial court to bring the transferred shares within the ambit

of the partition suit.

44. A perusal of Order VI Rule 17 CPC makes it clear that

amendments shall be allowed subject to fulfilment of the test of due

diligence. The test of due diligence placed the burden on the party

seeking to amend the pleading to show that they did not have the

requisite information before commencement of trial, or could not have

attained that information with reasonable due diligence.

45. In this Court’s opinion, the petitioner has not met that standard.

The petitioner is admittedly a director and a shareholder of a close-

knit family company. He was further drawing a salary on the strength

of that directorship, and was closely engaged in the field work for that

12

(2022) 16 SCC 1

CM(M) 673/2021 Page 14 of 16

company. Furthermore, the suit was instituted in May 2012 whereas

the CLB petition was instituted in August 2012 seeking repudiation of

the change in shareholding. Since the CLB petition has been filed

challenging the transfer of shares, it becomes apparent that the

petitioner was aware of the changes in shareholding, and has thus,

filed the amendment application in 2014 at a belated stage.

46. Even judging by the standard of preponderance of probabilities,

it is highly improbable that the petitioner, being a salary-drawing

director was unaware of the changes in majority shareholding of his

own family company.

47. Furthermore, the petitioner has not placed on record the

Minutes of Meeting dated 16.08.2010 whereby it was allegedly stated

that Late Sh. KC Dhawan’s shares were distributed equally. In

absence of the Minutes of Meeting, this Court cannot ascertain

whether the petitioner had any reason to believe that the shareholding

was transferred contrary to the Minutes of Meeting.

48. With respect to the contention that the learned trial court has

taken a restrictive approach and has adjudicated the merits of the

proposed amendments, this Court is of the opinion that that the same

is misconceived. While it is settled law that courts must be liberal in

allowing amendments in order to bring out the real controversy of the

case, however, the same does not imply a mindless adjudication by the

learned trial court.

49. The learned trial court has rightly exercised their discretion and

merely because the learned trial court held that the incorporation of

the prayer for partition of shares would run afoul of the proceedings

CM(M) 673/2021 Page 15 of 16

before the learned NCLT would not amount to a restrictive approach.

While it is trite law that a liberal approach must be taken at the stage

of Order VI Rule 17, however, such liberal approach cannot be

construed to allow something which is contrary to law.

50. In this Court’s opinion, the learned trial court would have erred

in including the shares owned by respondent no. 1 within the estate of

Late. K.C. Dhawan, especially when the challenge to the transfer is

pending before the learned NCLT. Thus, the reliance on BK Narayan

Pillai and Rajesh Sharma is misconceived.

51. Lastly, with respect to the contention that the learned trial court

has erred in holding that the amendment is hit by the proviso to Order

VI Rule 17 CPC, this Court is of the opinion that the same does not

now fall for consideration. Once it is established that the learned trial

court could not have allowed the amendment in the first place, due to

the parallel pending proceedings, the stage at which the application for

amendment has been filed, is immaterial.

52. Considering the totality of facts – that the petitioner himself has

filed the petition before the learned NCLT challenging the transfer of

shares prior to the death of Late Sh. KC Dhawan, that the learned

NCLT has wide jurisdiction to adjudicate all issues concerning such

transfer of shares and oppression and mismanagement, and that the

petitioner has failed the test of due diligence by seeking to amend the

plaint at a belated stage despite having sufficient knowledge, this

Court is of the opinion that the impugned order does not suffer from

any infirmity.

CM(M) 673/2021 Page 16 of 16

53. Accordingly, the petition along with pending applications, if

any, stands dismissed.

54. The judgment be uploaded on the website forthwith.

AJAY DIGPAUL, J.

SEPTEMBER 21, 2026/ar/sg