Order VI Rule 17 CPC | Amendment Of Plaint Seeking Partition Of Assets Subject To Pending NCLT Proceedings Regarding Title Is Impermissible: Delhi High Court

"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." Delhi High Court, in a ruling dated September 21, 2026, held that a plaintiff cannot seek an amendment to a partition suit to include assets whose ownership is currently disputed before the National Company Law Tribunal (NCLT).

A bench presided over by Justice Ajay Digpaul observed that allowing such an amendment would result in a conflict of jurisdictions and prejudice the defendants, as the assets in question—shares of a company—do not form part of the deceased's estate until the legality of their transfer is adjudicated by the specialized tribunal.

The underlying dispute concerns a family partition suit filed by the petitioner against his siblings. While the partition suit was pending, the petitioner also moved the NCLT under Sections 397, 398, 402, and 403 of the Companies Act, 1956, alleging that the majority shareholding of the family-owned company was fraudulently transferred by the respondent to himself prior to their father's death. The petitioner sought to amend his civil plaint to include these disputed shares in the partition pool.

Court Distinguishes Between Title And Inheritance

The primary question before the court was whether a civil court could entertain an amendment to a partition suit regarding properties that are subject to active litigation before the NCLT. The court was further tasked with determining whether the petitioner satisfied the "due diligence" requirement under the proviso to Order VI Rule 17 of the CPC for seeking such an amendment at a belated stage.

NCLT Holds Wide Jurisdiction Over Oppression and Mismanagement

The court analyzed the scope of the NCLT’s jurisdiction, noting that in cases of oppression and mismanagement, the tribunal has the authority to decide all ancillary matters to provide a final resolution. Citing the Supreme Court’s decision in Mrs. Shailja Krishna v. Satori Global Limited, the court held that the NCLT is competent to determine the validity of share transfers that are central to such complaints. Consequently, the civil court cannot exercise jurisdiction over these shares until the NCLT proceedings reach a quietus.

"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."

Court Addresses Due Diligence and Conduct

The court noted that the petitioner, who was a director and salary-drawing employee of the family company, failed the test of "due diligence" required by Order VI Rule 17. It observed that the petitioner was aware of the change in shareholding as early as 2012, when he filed his initial NCLT petition, and thus his 2014 application to amend the partition suit lacked the necessary diligence. The court rejected the petitioner's argument that the trial court took an overly restrictive view, emphasizing that while courts should be liberal, they cannot allow amendments that are contrary to law or intended to fill procedural lacunae.

Amendment Rejected as Prejudicial

Ultimately, the High Court held that the trial court correctly dismissed the amendment application. It noted that if the shares were already transferred during the lifetime of the deceased, they do not constitute part of the estate available for partition. Allowing the amendment would not only ignore the jurisdictional boundaries of the NCLT but also cause significant prejudice to the respondent by bringing disputed assets into the civil suit prematurely. The petition was consequently dismissed, affirming that the legal battle regarding the share transfers must first be resolved within the specialized forum.

Date of Decision: 21 September 2026