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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 ..... nal 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. In RAGU THILAK D. JOHN VERSUS S. RAYAPPAN OTHERS [ 2001 (1) TMI 992 - SUPREME COURT ], this Court also observed that where the amendment was barred by time or not, was a disputed question of fact and, therefore, that prayer for amendment could not be rejected and in that circumstances the issue of limitation can be made an issue in the suit itself like the one made by the High Court in the case on hand. Again, in VINEET KUMAR VERSUS MANGAL SAIN WADHERA [ 1984 (1) TMI 348 - SUPREME COURT ], this Court held that if a prayer for amendment merely adds to the facts already on record, the amendment would be allowed even after the statutory period of limitation. Applicability of decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot apply to an amendment which is sought on an existing suit. Applicability of principle of constructive res judicata - HELD THAT:- The principle of constructive res judicata has no application in the instant case, since there was no formal adjudication between the parties after full hearing. The litigation before this Court has come up at the stage when the courts below allowed the amendment 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 - HELD THAT:- Section 22 has a non-obstante provision which overrides the CPC. A plaintiff who claims specific performance of a contract for the transfer of immovable property, may in an appropriate case ask for possession, partition and separate possession of the property, in addition to specific performance. The plaintiff may also claim any other relief including the refund of earnest money or deposit paid, in case the claim for specific performance is refused. Corresponding to the provisions of sub-section (5) of Section 21, sub-section (2) of Section 22 stipulates that such relief cannot be granted by the court unless it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffs) for the specific performance of contract based on an agreement dated 08.06.1979 and is directed against the judgment and order passed by the High Court of Judicature at Bombay dated 13.12.2018 in the Appeal [L] No. 499 of 2018, arising from the order passed by a learned Single Judge on its ordinary original civil jurisdiction side in the Chamber Summons No. 854 of 2017 in the Suit No. 894 of 1986 dated 11.09.2018. The Chamber Summons was allowed by the High Court at the instance of the plaintiffs, permitting 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing for the appellant (original defendant) prayed that there being merit in his appeal, the same may be allowed and the impugned order passed by the High Court may be set aside and the original amendment application filed by the plaintiffs be rejected. SUBMISSIONS ON BEHALF OF THE RESPONDENTS 12. The learned senior counsel appearing for the respondents herein (original plaintiffs) on the other hand, submitted that no error, not to speak of any error of law, could be said to have 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 lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays open to the court to allow an amendment if it is of the view that allowing of an amendment shall really sub-serve the ultimate cause of justice and avoid further litigation. In L.J. Leach Co. Ltd. Anr. v. Jardine Skinner Co., AIR 1957 SC 357, this Court at paragraph 16 of the said decision observed as follows: 16. It is no doubt true that courts 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, 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 facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same doctrine. That doctrine, as I understand it, is that amendments should be refused only where the other party cannot be placed in the same position as if the pleading had been originally correct, but the amendment would cause him an injury which could not be compensated in costs. It is merely a particular case of this general rule that where a plaintiff seeks to amend by setting up a fresh claim in respect of a 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lapse of time. The delay in filing the application for amendment of the pleadings should be properly compensated by costs and error or mistake which, if not fraudulent, should not be made a ground for rejecting the application for amendment of plaint or written statement. (See South Konkan Distilleries Anr. v. Prabhakar Gajanan Naik Ors., (2008) 14 SCC 632) 26. But undoubtedly, every case and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case so permit, it is always open to the court to allow applications in spite of the delay and laches in moving such amendment application. 13. But the question for our consideration is whether in cases where the delay has extinguished the right of the party by virtue of expiry of the period of limitation prescribed in law, can the court in the exercise of its 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 backg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one made by the High Court in the case on hand. 32. In a decision in Vishwambhar Ors. v. Laxminarayan (Dead) through Lrs. Anr., (2001) 6 SCC 163, this Court held that the amendment though properly made cannot relate back to the date of filing of the suit, but to the date of filing of the application. 33. Again, in Vineet Kumar v. Mangal Sain Wadhera, (1984) 3 SCC 352 : AIR 1985 SC 817, this Court held that if a prayer for amendment merely adds to the facts already on record, the amendment would be allowed even after the statutory period of limitation. IMPUGNED ORDERS 34. We now proceed to look into the two orders passed by the High Court i.e. one by the learned Single Judge and the other in the appeal by the Division Bench. 35. The learned Single Judge in Sanjeev Builders Pvt. Ltd. Ors. v. Life Insurance Corporation of India, 2018 SCC OnLine Bom 15283, while allowing the Chamber Summons and permitting the plaintiffs to amend the plaint, observed thus: 5. It is the case of the applicant as submitted by Ms. Panda that while filing the suit, plaintiffs quantified the estimated damages likely to be caused to them by reason of non performance at Rs. 1,01,00,000/- The value of the suit p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputedly, trial is yet to commence. The amendment has been allowed by the learned Single Judge by giving cogent and sound reasons. Merely because the Plaintiffs are permitted to amend the plaint does not mean that the claim which has been made by the Plaintiffs by way of amendment would be granted by the Court. Defendants can always file an additional Written Statement to contest the claim of the Plaintiffs. In such additional Written statement, Appellants can also raise a ground with regard to limitation which will have to be gone into by the learned Single Judge. In any case, in the present case, Appellants have also filed additional Written Statement so as to meet the grounds brought on record by way of amendment. 5. In that view of the matter, we do not find that this is a fit case to interfere with the discretion exercised by the learned Single Judge. Appeal is therefore rejected. LIFE INSURANCE CORPORATION OF INDIA (SUPRA) 37. We now proceed to give a fair idea, as regards the judgment rendered by a coordinate Bench of this Court in the case of Life Insurance Corporation of India (supra) dated 24.10.2017. 38. The said appeal before this Court arose out of the judgment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tachment to the benefit of sub-rule (1). Under Order 22 Rule 10 CPC, when there has been an assignment or devolution of interest during the pendency of a suit, the suit may, by leave of the court, be continued by or against person to or upon whom such interest has been assigned or devolved and this entitles the person who has acquired an interest in the subject-matter of the litigation by an assignment or creation or devolution of interest pendente lite or suitor or any other person interested, to apply to the court for leave to continue the suit. When the plaintiff assigns/transfers the suit during the pendency of the suit, the assignee is entitled to be brought on record and continue the suit. Order 22 Rule 10 CPC enables only continuance of the suit by the leave of the court. It is the duty of the court to decide whether leave was to be granted or not to the person or to the assignee to continue the suit. The discretion to implead or not to implead parties who apply to continue the suit must be exercised judiciously and not arbitrarily. 12. The High Court was not right in holding that mere alleged transfer/assignment of the agreement would be sufficient to grant leave to Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is beneficiary of a clandestine transaction or a transaction made by the owner of the suit property in violation of the restraint order passed by the court or the application is unduly delayed then the court will be fully justified in declining the prayer for impleadment. In light of the above principles, considering the case in hand, in our view, the application filed for impleading Respondent 3 as Plaintiff 3 was not filed within reasonable time. No explanation is offered for such an inordinate delay of 27 years, which was not kept in view by the High Court. 14. Be it noted that an application under Order 22 Rule 10 CPC seeking leave of the court to continue the suit by the assignee/third respondent was not actually filed. Chamber Summons No. 187 of 2014 was straightaway filed praying to amend the suit which would have been the consequential amendment, had the leave to continue the suit been granted by the court. 15. As pointed out earlier, the application was filed after 27 years of filing of the suit. Of course, the power to allow the amendment of suit is wide and the court should not adopt hypertechnical approach. In considering amendment applications, court should adopt liber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt application should have been rejected by the courts below applying the principle of Order II Rule 2 of the CPC. 44. The said provision is set out below: Order II Rule 2 of the Code of Civil Procedure: 2. Suit to include the whole claim.-(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court. (2) Relinquishment of part of claim.- Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished. (3) Omission to sue for one of several reliefs.- A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted. Explanation.-For the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to Or. 2, r. 2), where plaintiff made various claims in the same suit. 47. In Upendra Narain Roy v. Rai Janoki Nath Roy, AIR 1919 Cal 904, a Division Bench of the Calcutta High Court had an occasion to consider this question. Woodroffe, J. has observed: .....As regards the other point it has more ingenuity than substance. It proceeds on the erroneous assumption that the amendment was prohibited by Or. II, r. 2. This Rule does not touch the matter before us. It refers to a case where there has been a suit in which there has been an omission, to sue in respect of portion of a claim, and a decree has been made in that suit. In that case a second suit in respect of the portion so omitted is barred. That is not the case here. In the present case the suit has not been heard but a claim has been omitted by, it is said, inadvertence. To hold that in such case an amendment should not be allowed would be to hold something which the Rule does not say and which would be absurd. The Rule says he shall not afterwards sue, that is, it assumes that there has been a suit carried to a decision, and a sub-sequent suit. It does not apply to amendment where there has been only one suit. As the Pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court the identity of the cause of action in the two suits. It is common ground that the pleadings in CS 28 of 1950 were not filed by the appellant in the present suit as evidence in support of his plea under Order 2 Rule 2 of the Civil Procedure Code. The learned trial Judge, however, without these pleadings being on the record inferred what the cause of action should have been from the reference to the previous suit contained in the plaint as a matter of deduction. At the stage of the appeal the learned District Judge noticed this lacuna in the appellant's case and pointed out, in our opinion, rightly that without the plaint in the previous suit being on the record, a plea of a bar under Order 2 Rule 2 of the Civil Procedure Code was not maintainable. 49. So far as, Gurbux Singh (supra) is concerned, we may clarify that the entire consideration in the said case by this Court was to the fact that there was a relinquishment of a claim by the plaintiff therein, but the relevant point which was considered by this Court was that the relief had become time barred. The ratio of the said judgment is that the relief being barred by limitation, the Order II Rule 2 of the CPC only cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the second suit is filed.(see Gurbux Singh v. Bhooralal , AIR 1964 SC 1810). Clearly, Order II Rule 2 CPC enacts a rule barring a second suit in the situation indicated above. Identity of cause of action in the former and subsequent suits is essential before the bar contemplated under Order II Rule 2 CPC is set to operate. Thus, where the claim or reliefs in the second suit are based on a distinct cause of action, Order II Rule 2 CPC would have no application. Order II Rule 2 CPC operates as a bar against a subsequent suit if the requisite conditions for application thereof are satisfied and the field of amendment of pleadings falls far beyond its purview. The plea of amendment being barred under Order II Rule 2 CPC is, thus, misconceived and hence negatived. (emphasis supplied) 52. We are also not impressed by the contention raised on behalf of the appellant herein that the amendment application is hit by the principle of constructive res judicata. The principle of constructive res judicata has no application in the instant case, since there was no formal adjudication between the parties after full hearing. The litigation before this Court has come up at the stage when the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a decree for specific performance where it is of the view that specific performance alone would not satisfy the justice of the case. Sub-section (5), however, stipulates that compensation cannot be awarded under the section unless the Plaintiff has claimed such compensation in the plaint. This provision is mandatory. 56. The proviso to sub-section (5) of Section 21 dilutes the rigours of the main provision by allowing the plaintiff who has not claimed such compensation in the plaint to amend the plaint at any stage of the proceedings and the court, it has been provided, shall at any stage of the proceedings allow an amendment for including a claim for such compensation on such terms as may be just. In Shamsu Suhara Beevi v. G. Alex Anr., (2004) 8 SCC 569, for instance, this Court held that the High Court erred in granting compensation under Section 21, in addition to the relief of specific performance in the absence of a prayer made to that effect either in the plaint as originally filed or as amended at any stage of the proceedings 57. Section 22 of the Act 1963 contains the following provisions: 22. Power to grant relief for possession, partition, refund of earnest money, etc.- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliminated the discretion of courts by substituting Sections 10 and 20 resply of the Principal Act. 60. The aforesaid provisions of the Act 1963 were duly considered by the Bombay High Court in the case of Kahini Developers Pvt. Ltd. v. Mukesh Morarjipanchamatia Ors., reported in (2013) 3 Mah LJ 440, Dr. Justice D.Y. Chandrachud, (as His Lordship then was), speaking for the Bench, very lucidly and in the most erudite manner explained as under: 9. The object of the legislature in introducing the proviso to sub-section (5) of section 21 and to sub-section (2) of section 22 was to obviate a multiplicity of the proceedings. In Babu Lal v. Hazari Lal, (1982) 1 SCC 525: AIR 1982 SC 818 the Supreme Court noted that the legislature has given ample power to the Court to allow amendment of the plaint at any stage. (At para 20 page 825). This, the Supreme Court held, would include even the stage of execution. The Supreme Court also held that a mere contract for sale or for that matter, a decree for specific performance does not confer title on the buyer and that title would pass only upon execution of the decree. While discussing the issue of limitation, the Supreme Court held as follows: If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amending the plaint at any later stage of the proceeding to include the relief of compensation in addition to the relief of a specific performance. The plaint, however, in that case, was never amended and the order of the High Court was, therefore, held to be in error. These principles have also been noticed in a judgment of a learned Single Judge of this Court in Manohar Dhundiraj Joshi v. Jhunnulal Hariram Yadao, 1983 Mh.L.J. 369. 11. Since the Court is informed that an appeal has been filed against the judgment of the learned Single Judge in Harinarayan G. Bajaj (supra), we are not expressing any opinion on the correctness of that decision. We are, however, of the view that since the legislature has contemplated that an amendment within the meaning of the provisos to section 21(5) and section 22(2) of the Specific Relief Act, 1963 can be made at any stage of the proceeding, such an amendment would not be barred by limitation. Even as a matter of first principle, an application for amendment must be distinguished from the cause of action which is sought to be set up by the amendment. As a matter of general principle, though an application for amendment is allowed, the question a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition to specific performance where the plaintiff has not abandoned his relief of specific performance the court should allow the amendment at any stage of the proceedings since that is a claim for compensation falling under Section 21 of the Act 1963 and the amendment is one under the proviso to sub-section (5) of Section 21. This Court, however, issued a note of caution by laying down that different and less liberal standards would apply if what is sought by the amendment is conversion of a suit for specific performance into one for damages for breach of contract, in which case Section 73 of the Indian Contract Act, 1872 would get invoked, and then the said amendment would be under the discipline of Order VI Rule 17 of the CPC. This Court further held that when the plaintiff by his option had made specific performance impossible then Section 21 does not entitle him to seek damages. It is also held that in Indian Law when the contract, for no fault of the plaintiff, becomes impossible of performance Section 21 enables award of compensation in lieu and substitution of specific performance. 63. The legal position, therefore, in respect of scope and ambit of Section 21 of the Act 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to above, deal with the question of permitting the plaintiff to amend his plaint. It is not, as if, in the absence of these two provisos, it is not permissible in law for the plaintiff to carry out an amendment in his pleading by introducing a relief for enhanced compensation. Rule 17 of Order VI of the CPC does confer power on a Court to allow a party to alter or amend his pleading in such manner and on such terms as may be just. This rule does not stop at that, but it further says that all such amendments should be made as may be necessary for the purpose of determining the real question in controversy between the parties. It is pertinent to note that this provision which empowers the court in its discretion to permit a party to amend his pleadings, was already on the statute book, when the Specific Relief Act, 1963 was enacted. It can, therefore, be presumed that when the latter legislation was on the anvil, the Parliament was aware of this power of the court to permit amendment of pleadings. Therefore, it cannot be successfully urged that a suit for specific performance falling under the provisions of the Act, 1963 would not be governed by the provisions of the CPC. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roversy 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 of the CPC. (iii) The prayer for amendment is to be allowed (i) if the amendment is required for effective and proper adjudication of the controversy between the parties, and (ii) to avoid multiplicity of proceedings, provided (a) the amendment does not result in injustice to the other side, (b) by the amendment, the parties seeking amendment does not seek to withdraw any clear admission made by the party which confers a right on the other side and (c) the amendment does not raise a time barred claim, resulting in divesting of the other side of a valuable accrued right (in certain situations). (iv) A prayer for amendment is generally required to be allowed unless (i) by the amendment, a time barred claim is sought to be introduced, in which case the fact that the claim would be time barred becomes a relevant factor for consideration, (ii) the amendment changes the nature of the suit, (iii) the prayer for amendment is malafide, or (iv) by the amendment, the other side loses a valid defence. (v) In deali ..... X X X X Extracts X X X X X X X X Extracts X X X X
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