Introduction
Facts
Decision
Comment
Life Insurance Corporation of India (the appellant) recently filed an appeal(1) before the Supreme Court of India, Delhi, challenging an order dated 13 December 2018 (the impugned order) passed by the division bench of the Bombay High Court, Mumbai (the division bench).
As per the impugned order, the division bench affirmed an order dated 11 September 2018 passed by the single bench of the Bombay High Court, Mumbai (the single judge), whereby a chamber summons(2) filed by Sanjeev Builders Private Limited and Vineet Builder Private Limited (the respondents) was allowed in order to carry out amendments to the prayer clause in the plaint by keeping the point of limitation open.
The respondents filed a suit against the appellant for the specific performance of an agreement dated 8 June 1979. The respondents also requested damages amounting to 10,100,000 rupees.
In 2017, the respondents filed a chamber summons, among other things, to seek to increase the damages amount to 4,000,100,000 rupees. The single judge allowed the chamber summons, and the division bench approved it. Thus, the appellant filed the present appeal.
The appellant made the following submissions:
- The High Court had not considered the order passed by the Supreme Court in another appeal filed by the appellants against the respondents arising out of the same suit proceedings.(3) In the appeal, the Supreme Court had rejected the chamber summons filed by the respondents to implead an assignee as a party to the suit and amend the prayers to that effect after a delay of 27 years.(4)
- The High Court could not have permitted the respondents to amend the plaint after 31 years, when the earlier amendment was declined for amending the plaint after 27 years.
- The High Court had failed to consider that the amendment would be hit by the provisions of order II rule 2 of the Civil Procedure Code 1908 (CPC) and by the principle of constructive res judicata.
- Under sections 21 and 22 of the Specific Reliefs Act 1963, the courts have the power to permit an amendment in the cases when the plaintiff had inadvertently or otherwise omitted to request compensation. However, in this case, the plaintiff had already requested compensation and now sought an amendment to the compensation, which, according to appellants, the Court could not allow.
The respondents made the following submissions:
- The Supreme Court's decision in the previous appeal in the same proceedings was in a different context as it related to impleading a party after a period of 27 years.
- The High Court had committed no error as the question of limitation had been kept open so that the appellant could raise it again in the trial. The appellant was also permitted to file its additional written statement to the amended plaint.
- The provisions of order II rule 2 of the CPC cannot be made applicable to an amendment application.
- The respondents claimed a raise in amount of compensation because in the past 30 years, there had been a tremendous escalation of the value of the suit property, which would have an adverse effect on the damages and reliefs sought. Thus, in view of the undue delay, the respondents and plaintiffs sought for raise in the amount of damages claimed from 10,100,000 to 4,000,100,000 rupees.
The Supreme Court observed that the courts should take a liberal approach in cases where amendments to requests are not allowed and could cause irreparable loss and injury to the party. The courts must decide on whether to allow the amendment and determine whether it will serve the interests of justice and avoid further litigation, even though the reliefs are barred due to limitation. The Court, among other things, relied on LJ leach & Co Ltd & Anr v Jardine Skinner & Co(5) and TN Alloy Foundry Co Ltd v TN Electricity Board & Ors.(6)
The Supreme Court also observed that the proposed amendment should not cause any prejudice to the other side and should not be allowed if it defeats a legal right of the opposite party. The Court also relied on the decision in Vishwambhar & Ors v Laxminarayan (Dead) Through Lrs & Anr(7) wherein the Court held that amendment can only relate back to the filing date of the application and not to the filing date of the suit. Also, in Vineet Kumar v Mangal Sain Wadhera,(8) the Court held that if prayer for amendment merely adds to the facts already on record, the amendment will not be affected by the statutory period of limitation.
The Supreme Court further observed that the single judge, while allowing the chamber summons, had taken into consideration that, due to a situation beyond the respondents' control, the suit remained pending for 30 years. Consequently, the estimated value of property calculated as damages had increased. Therefore, the chances of suffering greater prejudice were greater if the amended was not allowed. Further, the single judge had also clarified that the rights and contentions of the party to raise the issue of limitation would be decided at the trial stage and thus, had allowed the chamber summons.
In addition, the Supreme Court considered the view taken by the division bench, which stated that a mere amendment to the prayer clause would not mean that the claim was accepted. The defendants would get the opportunity to file additional written statements and raise the grounds including, but not limited to, limitation.
With respect to the plea taken by the appellant in the previous appeal, the Court held that the earlier amendment had been rejected as the respondents had failed to offer an inordinate explanation for amending the plaint for impleading the assignee after a delay of 27 years, which would have taken away the substantial rights of defences accrued in favour of the appellant. Therefore, the Court held that the previous appeal cannot be taken into consideration while dealing with the present appeal.
The Court rejected the objection raised on the ground of order II rule 2 of the CPC, by, among other things, referring to Upendra Narain Roy v Rai Janoki Nath Roy,(9) Gurbux Singh v Bhooralal(10) and Vaish Cooperative Adarsh Bank Ltd v Geetanjali Despande & Ors.(11) The Court held that the bar of order II rule 2 of the CPC only applied to subsequent suits where the reliefs claimed therein are based on same cause of action. Order II rule 2 of the CPC cannot be applicable to an amendment sought in an existing suit. Further, in this case, as there was no formal adjudication by having a full hearing, the principle of constructive res judicata would also not be applicable.
The Court further observed that the word "shall" in the later part of order VI rule 17 of the CPC makes it mandatory for the court to allow all the necessary amendments for determining the real question in controversy without causing prejudice to any parties.
The Court also rejected the appellant's plea on the ground that the Court does not confer power to allow amendment pursuant to sections 21 and 22 of the Specific Reliefs Act as the amendment allowed was to enhance the damages in question, which would assist the Court in determining the proper value of the suit property.
In view of these findings, the Court upheld the decision of the single judge and division bench as the amendment was necessary for determining the issue at hand, without taking away the appellant's right to raise any issues of limitation at the trial stage. By this judgment, the Supreme Court has provided detailed guidelines on order VI rule 17 of the CPC.
For further information on this topic please contact Nihal Shaikh or Dev Motta at Clasis Law by telephone (+91 11 4213 0000) or email ([email protected] or [email protected]). The Clasis Law website can be accessed at www.clasislaw.com.
Endnotes
(1) Civil Appeal No. 5909 of 2022.
(2) Chamber Summons No. 854 of 2017 in suit No. 894 of 1986.
(4) Life Corporation of India v Sanjeev Builders Pvt Ltd. & Ors (2018) 11 SCC 722.