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TMI Blog2022 (9) TMI 1564X X X X Extracts X X X X X X X X Extracts X X X X ..... rmitting the plaintiffs to amend the plaint. The order passed by the High Court in the Chamber Summons came to be affirmed by a Division Bench in the Appeal [L] No. 499 of 2018. The High Court permitted the plaintiffs to amend the plaint, seeking to enhance the amount towards the alternative claim for damages. FACTUAL MATRIX 3. It appears from the materials on record that the respondents herein are the original plaintiffs and the appellant herein is the original defendant in the Suit No. 894 of 1986, pending as on date in the High Court of Judicature at Bombay on its original side. The said suit has been instituted seeking specific performance of the agreement dated 08.06.1979. In the alternative, the plaintiffs have also prayed for damages. The plaintiffs moved the Chamber Summons No. 854 of 2017, inter alia, seeking enhancement of the amount towards damages on the grounds, more particularly, set out in the affidavit filed in support of the said chamber summons. 4. The learned Single Judge of the High Court allowed the chamber summons referred to above, vide the order dated 11.09.2018, keeping the issue of limitation open and also permitting the defendant, appellant herein, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been committed by the High Court in passing the impugned order. It is submitted that the question of limitation has been kept open by the High Court that may be agitated by the defendant in the trial and the defendant has also been permitted to file its additional written statement. 13. The learned counsel would submit that the suit is yet to be adjudicated; and in such circumstances, the delay in amending the plaint for the purpose of enhancing the amount towards damages would not cause any serious prejudice to the defendant. 14. The learned counsel further submitted that the provisions of Order II Rule 2 of the CPC cannot be made applicable to an application seeking amendment of plaint. 15. The learned counsel in the last submitted that the decision of this Court rendered in the case of Life Insurance Corporation of India (supra) between the same parties was altogether in a different context. In the said appeal before this Court, the issue was whether the assignee could have been impleaded as one of the plaintiffs in the suit after a period of twenty-seven years from the date of institution of the suit? 16. In such circumstances referred to above, the learned counsel appearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the court to order it, if that is required in the interest of justice....." 20. Again in T.N. Alloy Foundry Co. Ltd. v. T.N. Electricity Board & Ors., (2004) 3 SCC 392, this Court observed as follows: "2. .....The law as regards permitting amendment to the plaint, is well settled. In L.J. Leach and Co. Ltd. v. Jardine Skinner and Co. [AIR 1957 SC 357 : 1957 SCR 438] it was held that the Court would as a rule decline to allow amendments, if a fresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the court to order it. 3. It is not disputed that the appellate court has a coextensive power of the trial court. We find that the discretion exercised by the High Court in rejecting the plaint was in conformity with law." 21. So far as the answer to the specific plea that the claim of damages is barred by limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause of action which since the institution of the suit had become barred by limitation, the amendment must be refused; to allow it would be to cause the defendant an injury which could not be compensated in costs by depriving him of a good defence to the claim. The ultimate test therefore still remains the same : can the amendment be allowed without injustice to the other side, or can it not?"....." 23. This Court has repeatedly held that the power to allow an amendment is undoubtedly wide and may be appropriately exercised at any stage in the interests of justice, notwithstanding the law of limitation. In this behalf, in Ganga Bai v. Vijay Kumar & Ors., (1974) 2 SCC 393, this Court held thus: "22. .....The power to allow an amendment is undoubtedly wide and may at any stage be appropriately exercised in the interest of justice, the law of limitation notwithstanding. But the exercise of such far-reaching discretionary powers is governed by judicial considerations and wider the discretion, greater ought to be the care and circumspection on the part of the Court....." 24. Again in M/s Ganesh Trading Co. v. Moji Ram, (1978) 2 SCC 91, this Court laid down the principles thus: "4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd every application for amendment has to be tested in the applicable facts and circumstances of the case. As the proposed amendment of the pleadings amounts to only a different or an additional approach to the same facts, this Court has repeatedly laid down the principle that such an amendment would be allowed even after the expiry of statutory period of limitation. 27. In this behalf, in A.K. Gupta & Sons Ltd. v. Damodar Valley Corporation, AIR 1967 SC 96 : (1966) 1 SCR 796, this Court held thus: "7. .....a new case or a new cause of action particularly when a suit on the new case or cause of action is barred: Weldon v. Neale [19 QBD 394]. But it is also well recognised that where the amendment does not constitute the addition of a new cause of action or raise a different case, but amounts to no more than a different or additional approach to the same facts, the amendment will be allowed even after the expiry of the statutory period of limitation:....." 28. In entitled, G. Nagamma & Anr. v. Siromanamma & Anr., (1996) 2 SCC 25, this Court considered the proposed amendment of the plaint and noticing that neither the cause of action would change nor the relief would be materiall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts discretion take away the right accrued to another party by allowing such belated amendments. 14. The law in this regard is also quite clear and consistent that there is no absolute rule that in every case where a relief is barred because of limitation an amendment should not be allowed. Discretion in such cases depends on the facts and circumstances of the case. The jurisdiction to allow or not allow an amendment being discretionary, the same will have to be exercised on a judicious evaluation of the facts and circumstances in which the amendment is sought. If the granting of an amendment really subserves the ultimate cause of justice and avoids further litigation the same should be allowed. There can be no straitjacket formula for allowing or disallowing an amendment of pleadings. Each case depends on the factual background of that case. xxx &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduces a different relief so as to bar the grant of prayer for amendment, necessary factual basis has already been laid down in the plaint in regard to the title which, of course, was denied by the respondent in his written statement which will be an issue to be decided in a trial. Therefore, in the facts of this case, it will be incorrect to come to the conclusion that by the amendment the plaintiff will be introducing a different relief." 30. From the above, therefore, one of the cardinal principles of law in allowing or rejecting an application for amendment of the pleading is that the courts generally, as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred by limitation on the date of filing of the application. But that would be a factor to be taken into account in the exercise of the discretion as to whether the amendment should be ordered, and does not affect the power of the court to order it, if that is required in the interest of justice. 31. In Ragu Thilak D. John v. S. Rayappan & Ors., (2001) 2 SCC 472, this Court also observed that where the amendment was barred by time or not, was a disputed question of fact and, therefore, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Plaintiffs are only estimating it to be the amount which according to plaintiffs, is the loss which they would suffer. Whether that is the right estimate can be decided only at the time of trial. Even in para 12 of the plaint plaintiff has stated ".......suffered loss and damages which they estimate at.........." In prayer clause-(b)(v) plaintiff pray "........ or such other sum as this Honourable Court may deem just and proper......" Further, if this figure of Rs. 1,01,00,000/- is not amended as prayed in this Notice of Motion, defendant will object the attempt of plaintiff to claim more as damages saying plaintiff cannot go beyond what is averred in the plaint. Due to situation beyond the control of plaintiff, this suit has remained pending for almost 32 years. Chances of suffering greater prejudice is more if the amendment is not allowed. It is clarified that plaintiff will still have to prove every penny it is claiming as damages. xxx &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oration of India (for short, 'LIC') thereby affirming the order of the Single Judge in the Chamber Summons No. 187 of 2014 by which the respondent No. 3 therein was impleaded as the plaintiff No. 3 in the Suit No. 894 of 1986. 39. It appears from the pleadings, more particularly, the facts recorded in the judgment rendered by the coordinate Bench that in the year 2014, the respondent No. 3 therein, namely, the Kedia Construction Company Ltd. filed the Chamber Summons No. 187 of 2014 stating that subsequent to the filing of the suit for the specific performance of contract, with the consent of the respondent No. 2, plaintiff No. 1/respondent No. 1 had assigned its interest to the respondent No. 3 for a consideration of Rs. 23,31,000/- by an agreement for sale dated 24.08.1987. The chamber summons was filed to implead the respondent No. 3 therein as the plaintiff No. 3 with a prayer to amend the plaint pursuant to the agreement of sale in its favour. The appellant herein (LIC) had opposed the chamber summons on the ground that the respondent No. 3 therein was not a bona fide assignee or a necessary party and that the issues in the suit were framed on 31.01.2014 and there had been an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant; such valuable right of defence cannot be defeated by granting leave to the third respondent to continue the suit in the application filed under Order 22 Rule 10 CPC after 27 years of filing of the suit. The learned Single Judge was not right in saying that impleading Respondent 3 as Plaintiff 3 would cause no prejudice to the appellant and that the issues can be raised at the time of trial. 13. In a suit for specific performance, application for impleadment must be filed within a reasonable time. Considering the question of impleadment of party in a suit for specific performance after referring to various judgments, in Vidur Impex and Traders (P) Ltd. v. Tosh Apartments (P) Ltd. [Vidur Impex and Traders (P) Ltd. v. Tosh Apartments (P) Ltd., (2012) 8 SCC 384 : (2012) 4 SCC (Civ) 1] the Court summarised the principles as under : (SCC p. 413, para 41) "41. Though there is apparent conflict in the observations made in some of the aforementioned judgments, the broad principles which should govern disposal of an application for impleadment are: 41.1. The court can, at any stage of the proceedings, either on an application made by the parties or otherwise, direct impleadment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at mere delay is not a ground for rejecting the amendment. But in the case in hand, the parties are not rustic litigants; all the respondents are companies and the dispute between the parties is a commercial litigation. In such facts and circumstances, the amendment prayed in the chamber summons filed under Order 22 Rule 10 CPC ought not to have been allowed, as the same would cause serious prejudice to the appellant. In our view, the impugned order, allowing Chamber Summons No. 187 of 2014 filed after 27 years of the suit would take away the substantial rights of defence accrued to the appellant and the same cannot be sustained. 16. In the result, the impugned judgment [LIC v. Sanjeev Builders (P) Ltd., 2014 SCC OnLine Bom 4811] is set aside and the appeal is allowed. Chamber Summons No. 187 of 2014 in Suit No. 894 of 1986 stands dismissed. No order as to costs." 41. Thus, from the aforesaid, it is evident that a coordinate Bench of this Court took the view that impleading the respondent No. 3 therein as the plaintiff No. 3 would cause a serious prejudice to the appellant. This Court took the view that no explanation was offered for an inordinate delay of twenty-seven years, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yearly rent of Rs. 1200. The rent for the whole of the years 1905, 1906 and 1907 is due and unpaid. A sues B in 1908 only for the rent due for 1906. A shall not afterwards sue B for the rent due for 1905 or 1907." 45. The expressions "omits to sue" and "intentionally relinquish any portion of his claim" give an indication as to the intention of the legislature in framing the said rule. The term 'sue' can mean both the filing of the suit and prosecuting the suit to its culmination, depending on the context of the provision. In the present case, the legislature thought it fit to debar a plaintiff from suing afterwards for any relief which he/she has omitted without the leave of the court or from suing in respect of any portion of his claim which he intentionally relinquishes. Order II Rule 2(1) provides that every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action. 46. The provision of Order II Rule 2 of the CPC has been well discussed by the Privy Council in the case of Mohd. Khalil Khan & Ors. v. Mahbub Ali Mian & Ors., AIR 1949 PC 78, held as under: "The principles laid down in the cases thus far discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the conclusion of his suit, it cannot be said that any rights of the Respondent in the Pabna suit are affected. Such a contention is based on the erroneous assumption that nothing could be done by way of amendment of the Calcutta suit to remove the objection that the claims on the previous mortgage or charge were not sustainable. A case would fall within Or. II, r. 2, only if a Plaintiff fails to apply for amendment before decree, and then brings another suit. The Plaintiffs are not doing that but asking for amendment in the one and only suit they have brought. This is, therefore, not a case in which the amendment either affects rights to the other party, or otherwise prejudices him." (emphasis supplied) 48. A Constitution Bench of this Court, considering the scope and applicability of Order II Rule 2 of the CPC, in the case of Gurbux Singh v. Bhooralal, AIR 1964 SC 1810, held as under: "6. In order that a plea of a Bar under Order 2 Rule 2(3) of the Civil Procedure Code should succeed the defendant who raises the plea must make out; (i) that the second suit was in respect of the same cause of action as that on which the previous suit was based; (2) that in respect of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) makes it clear that the bar of Order II Rule 2 of the CPC applies only to the subsequent suits. 50. In the light of the principles discussed and the law laid down by the Constitution Bench as also the other decisions discussed above, we are of the view that if the two suits and the relief claimed therein are based on the same cause of action then the subsequent suit will become barred under Order II Rule 2 of the CPC. However, we do not find any merit in the contention raised on behalf of the appellant herein that the amendment application is liable to be rejected by applying the bar under Order II Rule 2 of the CPC. Order II Rule 2 of the CPC cannot apply to an amendment which is sought on an existing suit. 51. In the aforesaid context, we may refer to with approval a decision rendered by the High Court of Delhi in the case of Vaish Cooperative Adarsh Bank Ltd. v. Geetanjali Despande & Ors., (2003) 102 DLT 570. Paras 17 and 18 resply indicate that the bar under Order II Rule 2 of the CPC is only for a subsequent suit. These paras read as under: "17. Reverting to the preliminary objections raised by the appellant against the maintainability of the application for amendment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of plaint for the purpose of enhancing the amount towards damages in the alternative to the main relief of specific performance of the contract. SPECIFIC RELIEF ACT, 1963 53. The above takes us now to consider the proviso to Section 21(5) and Section 22(2) of the Act 1963. 54. The Act 1963 contemplates that in addition to or in substitution of a claim for performance, a plaintiff is entitled to claim compensation. Section 21 of the Act 1963 provides as follows: "21. Power to award compensation in certain cases. -(1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach [in addition to] such performance. (2) If, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly. (3) If, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908, (5 of 1908), any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for- (a) possession, or partition and separate possession, of the property, in addition to such performance; or (b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or (made by) him, in case his claim for specific performance is refused. (2) No relief under clause (a) or clause (b) of sub-section (1) shall be granted by the Court unless it has been specifically claimed: Provided that where the plaintiff has not claimed any such relief in the plaint, the Court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief. (3) The power of the Court to grant relief under clause (b) of sub-section (1) shall be without prejudice to its powers to award compensation under section 21." 58. Section 22 has a non-obstante provision which overrides the CPC. A plaintiff who claims specific performance of a contract for the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as follows: "If once we accept the legal position that neither a contract for sale nor a decree passed on that basis for specific performance of the contract gives any right or title to the decree-holder and the right and the title passes to him only on the execution of the deed of sale either by the judgment-debtor himself or by the Court itself in case he fails to execute the sale deed, it is idle to contend that a valuable right had accrued to the Petitioner merely because a decree has been passed for the specific performance of the contract. The limitation would start against the decree-holders only after they had obtained a sale in respect of the disputed property. It is, therefore, difficult to accept that a valuable right had accrued to the judgment-debtor by lapse of time. Section 22 has been enacted only for the purpose of avoiding multiplicity of proceedings which the law Courts always abhor." (At para 21 page 825) 10. The same view was taken by the Supreme Court in a later judgment in Jagdish Singh v. Natthu Singh, (1992) 1 SCC 647 : AIR 1992 SC 1604: "So far as the proviso to sub-section (5) is concerned, two positions must be kept clearly distinguished. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment is allowed, the question as to whether the cause of action is within limitation would have to be determined and adjudicated upon. While allowing an amendment, it is always open to a Civil Court to direct that the amendment shall not relate back to the institution of the proceeding. The Court would therefore have to determine at trial whether the cause of action is within limitation or is barred. Where the legislature has contemplated that the plaint can be amended at any stage of the proceeding as stipulated in the provisos to section 21(5) and section 21(2). Such an amendment of the nature contemplated by those provisions can indeed be brought about at any stage of the proceedings." (emphasis supplied) 61. In the case of B.K. Narayana Pillai v. Parameswaran Pillai & Anr., (2000) 1 SCC 712 relying upon the cases of A.K. Gupta (supra) and Ganesh Trading Co. (supra), this Court held that the court should adopt a liberal approach in the matter of amendment and only when the other side had acquired any legal right due to lapse of time, the amendment should be declined. It has been held as follows: ".....All amendments of the pleadings should be allowed which are necessary f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of scope and ambit of Section 21 of the Act 1963 is clear and made so more by the ratio of the aforesaid decision of this Court. 64. The plaintiffs in the original plaint claimed for compensation in addition to a decree for specific performance of the agreement to sell. Therefore, strictly speaking the provisions of Section 21 of the Act 1963 are not attracted to the facts of the present case. The intention of the plaintiffs in seeking for amendment of the plaint appears to be to get an enhanced amount of compensation than what was originally claimed in the original plaint which was restricted only to Rs. 1,01,00,000/-. The aforesaid intention becomes apparent when the averments made in the application praying for amendment are looked into inasmuch as, the plaintiffs have stated that in view of the fact that in last 30 years there had been a tremendous escalation of the value of the suit property which has an adverse effect on the quantum of damages, compensation, relief sought for the breach of contract by the appellant/defendant. According to the plaintiffs the raising of the amount of compensation to Rs. 400,01,00,000/- from Rs. 1,01,00,000/- as claimed in the original plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be governed by the provisions of the CPC. It is, therefore, clear that to such a suit the provisions contained in Order VI Rule 17 of the CPC would apply and a plaintiff who has earlier failed to incorporate the reliefs for compensation or who has incorporated the reliefs for compensation but seeks amendment in the same, could seek the permission of the court to introduce these reliefs by way of amendment. 67. It is important to note that sub-section (5) of Section 21 of the Act 1963 was originally introduced to resolve the confusion over whether the court had the power to grant compensation in a claim for specific performance in absence of any pleading to that effect under the provisions of the Act 1963. Prior to the enactment of the Act 1963 the Law Commission in its 9th Law Commission Report while referring to the diverse opinions expressed by the High Courts recommended that in no case should compensation be decreed unless it is claimed by a proper pleading. 68. In The Arya Pradeshak Pritinidhi Sabha, Sindh, Punjab & Bilochistan v. Lahori Mal & Ors., (1924) 6 Lah LJ 286 : AIR 1924 Lah 713, the Lahore High Court had held that the court has the power to award damages in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... malafide, or (iv) by the amendment, the other side loses a valid defence. (v) In dealing with a prayer for amendment of pleadings, the court should avoid a hypertechnical approach, and is ordinarily required to be liberal especially where the opposite party can be compensated by costs. (vi) Where the amendment would enable the court to pin-pointedly consider the dispute and would aid in rendering a more satisfactory decision, the prayer for amendment should be allowed. (vii) Where the amendment merely sought to introduce an additional or a new approach without introducing a time barred cause of action, the amendment is liable to be allowed even after expiry of limitation. (viii) Amendment may be justifiably allowed where it is intended to rectify the absence of material particulars in the plaint. (ix) Delay in applying for amendment alone is not a ground to disallow the prayer. Where the aspect of delay is arguable, the prayer for amendment could be allowed and the issue of limitation framed separately for decision. (x) Where the amendment changes the nature of the suit or the cause of action, so as to set up an entirely new case, foreign to the case set up in the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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