SUPREME COURT OF INDIA
State Bank of Hyderabad
Vs
Town Municipal Council
Appeal (Civil) 5294 of 2006 (Arising Out of Slp (C) No. 21178-21179 of 2005)
(S. B. Sinha and Markandeya Katju, JJ)
01.12.2006
S. B. SINHA, J.
Leave granted.
Appellant -Bank filed a suit against the respondent. The suit related to
ownership of a plot admeasuring 610 ft. x 250 ft. situated in the town Yadgir.
It was purchased by the plaintiff in a public auction. Allegedly, the
respondent is now claiming back the said amount. The suit was initially filed
for a decree for injunction. The respondent filed another suit in the same
court also for a suit for permanent injunction restraining the Bank from
constructing any building. The suit of the appellant was dismissed whereas the
suit of the respondent was decreed. Appeals were preferred there against by
both the parties. In the said appeals, an application was filed for grant of
leave to amend the plaint. The said application for grant of leave to amend the
plaint was allowed by the appellate court by an order dated 7.04.2003. The
appellate court remanded both the suits to the trial court for their disposal
afresh on merits. Second Appeals were filed by the respondent herein before the
High Court. The High Court by reason of the impugned judgment opined that the
said application for amendment was not maintainable in view of the proviso
appended to Order VI, Rule 17 of the Code of Civil Procedure (Code). On the
said finding not only the order granting leave to amend the plaint was set
aside, the appeals were also allowed and the matter was remitted to the first
appellate court for its consideration afresh in accordance with law.
The appellant is, thus, before us.
The short question which arises for consideration is as to whether the proviso
appended to Order VI, Rule 17 of the Code is applicable in the instant case.
Order VI, Rule 17 of the Code reads, thus:
"The Court may at any stage of the proceedings allow either party to
alter or amend his pleadings in such manner and on such terms as may be just,
and all such amendments shall be made as may be necessary for the purpose of
determining the real questions in controversy between the parties."
Proviso appended thereto was added by the Code of Civil Procedure (Amendment)
Act, 2002 which came into force with effect from 1.07.2002. It reads as under:
"Provided that no application for amendment shall be allowed after the
trial has commenced, unless the Court comes to the conclusion that in spite of
due diligence, the party could not have raised the matter before the
commencement of trial."
Section 16(2) of the Amending Act of 2002 reads as under:
"16(2) Notwithstanding that the provisions of this Act have come into
force or repeal under sub- section (1) has taken effect, and without prejudice
to the generality of the provisions of section 6 of the General
Clauses Act, 1897
(a) .........
(b) the provisions of rules 5, 15, 17 and 18 of Order VI of the First Schedule
as omitted or, as the case may be, inserted or substituted by section 16 of the
Code of Civil Procedure (Amendment) Act, 1999 and by section 7 of this Act
shall not apply to in respect of any pleading filed before the commencement of
Section 16 of the Code of Civil Procedure (Amendment) Act, 1999 and Section 7
of this Act;"
In view of the said provision there cannot be any doubt whatsoever that the
suit having been filed in the year 1998, proviso to Order VI, Rule 17 of the
Code shall not apply.
The High Court relied upon the said proviso and opined that having regard
thereto the plaintiff was obligated to establish that in spite of due diligence
it could not have raised the matter before commencement of the trial of the
suit. The High Court evidently committed an illegality in relying upon the said
provision.
The learned counsel appearing on behalf of the respondent, however, would
submit that the application for amendment being belated, the same should not
have been entertained.
It is one thing to say that the application for amendment suffers from delay or
laches but it is another thing to say that thereby the defendant was
prejudiced. It is also not a case of the respondent that by reason of such an
amendment, the relief which could not be granted having regard to the law of
limitation has become available. The court even in such a case is not powerless
although the question as to whether the relief sought for would be otherwise
barred by limitation is a relevant factor to determine the issue.
This aspect of the matter has been considered by this Court in L.J. Leach and
Company Ltd. v. Jardine Skinner and Co. 1957 SCR 438 in the following
terms:
"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
interests of justice"
L.J. Leach and Company Ltd. (supra) was referred to in Pirgonda Hongonda Patil
v. Kalgonda Shidgonda Patil and Others 1957 SCR 595 holding:
"We think that the correct principles were enunciated by Batchelor J.
in his judgment in the same case, viz., Kisandas Rupchand's case, when he said
at pp. 649-650 : "All amendments ought to be allowed which satisfy the two
conditions (a) of not working injustice to the other side, and (b) of being necessary
for the purpose of determining the real questions in controversy between the
parties...... but I refrain from citing further authorities, as, in my opinion,
they all lay down precisely the 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
?" Batchelor J. made these observations in a case where the claim was for
dissolution of partnership and accounts, the plaintiffs alleging that in
pursuance of a partnership agreement they had delivered Rs. 4, 001 worth of
cloth to the defendants. The Subordinate Judge found that the plaintiffs did
deliver the cloth, but came to the conclusion that no partnership was created.
At the appellate stage, the plaintiffs abandoned the plea of partnership and
prayed for leave to amend by adding a prayer for the recovery of Rs. 4, 001. At
that date the claim for the money was barred by limitation. It was held that
the amendment was rightly allowed, as the claim was not a new claim."
[See also Rajesh Kumar Aggarwal and Others v. K.K. Modi and Others,
Pankaja and Another v. Yellappa (Dead) By LRs. and Others, , Baldev Singh
& Ors. v. Manohar Singh & Anr. etc. 2006 (7) JT 139, Gajanan
Jaikishan Joshi v. Prabhakar Mohanlal Kalwar and A.K. Gupta and Sons v.
Damodar Valley Corporation,
As the High Court has failed to invoke the law as it then existed, we do not
think that it was correct in its view.
For the reasons aforementioned, the impugned judgment cannot be sustained which
is set aside accordingly. The appeal is allowed and the matter is remitted to
the High Court for consideration of the appeal afresh in accordance with law.
All contentions of the parties shall, however, remain open.