2009 (10) TMI 963 - SC - Indian Laws

Application seeking amendment under Order VI Rule 17 - consequent to the subsequent Urban Land (Ceiling Regulation) Repeal Act, 1999 - respondents are to be treated as trespassers and unauthorized occupants of the building - Suit Originally framed, only for refund of sale consideration and alternatively for possession - recommendation of Justice Malimath Committee - respondents aggrieved by the order of the trial court for allowing application preferred a writ petition - appellant had originally sought possession of the entire property from the respondents, by giving up such a claim, now the appellant is trying to introduce a new case which would certainly affect the rights of the respondents when the appellant had earlier requested the court to pass a decree for possession of the entire property - High Court held that any such amendment which changes the entire character of the plaint cannot be permitted and that too after a lapse of four years after the institution of the suit. The High Court has set aside the order of the trial court which allowed the amendment under Order VI Rule 17 CPC. HELD THAT - In our considered view, Order VI Rule 17 is one of the important provisions of the CPC, but we have no hesitation in also observing that this is one of the most misused provision of the Code for dragging the proceedings indefinitely, particularly in the Indian courts which are otherwise heavily overburdened with the pending cases. All Civil Courts ordinarily have a long list of cases, therefore, the Courts are compelled to grant long dates which causes delay in disposal of the cases. The applications for amendment lead to further delay in disposal of the cases. It may be pertinent to mention that with a view to avoid delay and to ensure expeditious disposal of suits, Rule 17 was deleted on the recommendation of Justice Malimath Committee by the Code of Civil Procedure (Amendment) Act, 1999 but because of public uproar, it was revived. Justice C.K. Thakker, an eminent former Judge of this Court in his book on Code of Civil Procedure (2005 Edition) incorporated this information while dealing with the object of amendment. The general principle is that courts at any stage of the proceedings may allow either party to alter or amend the pleadings in such manner and on such terms as may be just and all those amendments must be allowed which are imperative for determining the real question in controversy between the parties. The basic principles of grant or refusal of amendment articulated almost 125 years ago are still considered to be correct statement of law and our courts have been following the basic principles laid down in those cases. Dismissing the appeal and confirming the order of the High Court, this Court observed that the discretionary power of amendment was not exercised by the High Court on wrong principles. There was merely a defect in the pleading which was removed by the amendment. The quality and quantity of the reliefs sought remained the same. Since the amendment did not introduce a new case, the defendant was not taken by surprise. The Court further observed that since there was no addition to the averments or relief, it was not possible to uphold the contention of the plaintiff that by conversion of written statement into a plaint in a cross-suit, a fresh claim was made or a new relief was sought. To the facts of the present case, therefore, the decisions holding that amendments could not ordinarily be allowed beyond the period of limitation and the limited exceptions to that rule have no application. WHETHER AMENDMENT IS NECESSARY TO DECIDE REAL CONTROVERSY - The first condition which must be satisfied before the amendment can be allowed by the court is whether such amendment is necessary for the determination of the real question in controversy. If that condition is not satisfied, the amendment cannot be allowed. This is the basic test which should govern the courts' discretion in grant or refusal of the amendment. NO PREJUDICE OR INJUSTICE TO OTHER PARTY - The other important condition which should govern the discretion of the Court is the potentiality of prejudice or injustice which is likely to be caused to other side. Ordinarily, if other side is compensated by costs, then there is no injustice but in practice hardly any court grants actual costs to the opposite side. The Courts have very wide discretion in the matter of amendment of pleadings but court's powers must be exercised judiciously and with great care. COSTS - The Courts have consistently laid down that for unnecessary delay and inconvenience, the opposite party must be compensated with costs. The imposition of costs is an important judicial exercise particularly when the courts deal with the cases of amendment. The costs cannot and should not be imposed arbitrarily. In our view, the following parameters must be taken into consideration while imposing the costs. We can conclude our discussion by observing that while deciding applications for amendments the courts must not refuse bona fide, legitimate, honest and necessary amendments and should never permit mala fide, worthless and/or dishonest amendments. When we apply these parameters to the present case, then the application for amendment deserves to be dismissed with costs of ₹ 1,00,000/- (Rupees One Lakh) because the respondents were compelled to oppose the amendment application before different Courts. This appeal being devoid of any merit is accordingly dismissed with costs.

Summary

Issues Involved:
1. Amendment of Pleadings
2. Withdrawal of Admissions
3. Prejudice to the Respondents
4. Legal Principles and Precedents on Amendments

Detailed Analysis:

1. Amendment of Pleadings:
The appellant sought to amend the plaint under Order VI Rule 17 of the CPC after the repeal of the Urban Land (Ceiling and Regulation) Act, 1976. The appellant aimed to add new paragraphs and prayers, including declaring the respondents as trespassers and seeking possession of the property. The trial court allowed this amendment, but the High Court of Karnataka overturned this decision, stating that the amendment introduced a new case and would adversely affect the respondents' rights. The Supreme Court upheld the High Court's decision, emphasizing that amendments should not change the entire character of the suit or introduce a new cause of action.

2. Withdrawal of Admissions:
The respondents argued that the appellant's amendment sought to withdraw admissions made in the original plaint, particularly regarding the invalidity of the sale deed. The High Court agreed, noting that amendments should not allow a party to withdraw admissions that would prejudice the other side. The Supreme Court supported this view, referencing several precedents where courts have held that admissions in pleadings cannot be retracted through amendments.

3. Prejudice to the Respondents:
The respondents contended that the amendment would prejudice their rights and change the original cause of action. The High Court found that allowing the amendment would indeed cause prejudice, as it would alter the nature of the suit and the admissions made. The Supreme Court reiterated that amendments should not cause injustice or prejudice that cannot be compensated by costs, and in this case, the amendment would significantly disadvantage the respondents.

4. Legal Principles and Precedents on Amendments:
The Supreme Court referenced several key judgments to outline the principles governing amendments of pleadings. These include:
- Usha Balashaheb Swami v. Kiran Appaso Swami: Amendments should not withdraw admissions or alter the cause of action.
- Heeralal v. Kalyan Mal: Admissions in the pleadings cannot be retracted through amendments.
- Gautam Sarup v. Leela Jetley: Amendments should not be allowed if they seek to withdraw admissions.
- Modi Spinning & Weaving Mills Co. Ltd. v. Ladha Ram & Co.: Amendments should not introduce an entirely different case or prejudice the other party.

The Court also discussed the historical context and legislative intent behind Order VI Rule 17, emphasizing that amendments should be allowed to determine the real questions in controversy but should not be used to delay proceedings or change the nature of the suit.

Conclusion:
The Supreme Court dismissed the appeal, affirming the High Court's decision to reject the amendment. The Court imposed costs of Rs. 1,00,000 on the appellant for compelling the respondents to oppose the amendment application in different courts. The judgment underscored that amendments must be bona fide, necessary for adjudication, and should not prejudice the other party or change the suit's character.