In order to consider the said contention, the law on the question of amendment laid down by the Apex Court in its various judgments, which are referred on the aspect of introducing the relief of specific performance of contract, has already been summarized in paragraph 96 as under, in the separate judgment pronounced today.
(a) In a suit for specific performance of contract, an amendment introducing a plea of readiness and willingness in terms of Section 16(c) of the Specific Relief Act proposed at an appropriate stage, can be permitted for the purposes of deciding the real controversy involved in the matter.
(b) In a suit simpliciter for grant of permanent injunction restraining the defendant from alienating, encumbering, selling, disposing of, or in any way dealing with the suit property, the relief of specific performance of contract cannot be permitted to be claimed by way of an amendment, if it is barred by a law of limitation.
(c) In a suit for mandatory injunction directing the defendant to comply with the terms of the agreement, an application for amendment introducing a claim for specific performance of contract may be refused if the cause of action required to be stated initially in the plaint, is not pleaded, and while introducing a cause of action by way of amendment, a bar of limitation operates since the date of inception of the suit.
(d) In a suit for declaration that the contract between the parties subsists and the defendant is bound by the terms and also for grant of permanent injunction restraining the defendant from alienating the suit property in any manner, a claim for specific performance of contract by way of an amendment may be refused if there is no foundation laid in the plaint for that purpose, because it would amount to changing the nature or the basic structure of the suit and the cause of action having regard to a bar of limitation since the date of inception of the suit.
Walchandnagar Industries Limited, through its Authorized Representative G.S. Agrawal Vs. Indraprastha Developers, through its Partner Mrs. Ujwala Mahendra Shah and Others
Court : Mumbai
Judge : R.K. DESHPANDE
Decided On : Sep-25-2013
Case Number : Writ Petition No. 722 of 2013
1. This writ petition filed by the original defendant No.1 takes exception to the order dated 28-11-2012 passed by the learned Civil Judge, Senior Division, Pune, allowing Exhibit 68 – the application for amendment under Order VI, Rule 17 of the Civil Procedure Code filed by the plaintiffs in Special Civil Suit No.590 of 2011, after conclusion of the cross-examination of one witness, viz. Mahendra Manilal Shah, examined by the plaintiffs.
2. It was a suit for declaration that there is a concluded conditional contract between the plaintiffs and the defendant No.1 for transfer of right, title and interest in the suit property in favour of the defendant No.2 and for permanent injunction restraining the defendant No.1 from dealing with the suit property in any manner prejudicial to the interest of the plaintiffs. By way of amendment, which has been allowed by the Trial Court, a relief of specific performance of contract and for possession of the suit property, has been asked for and certain facts to claim such relief are pleaded.
3. The petitioner is the original defendant No.1, the respondent Nos.1 and 2 are the original plaintiffs, and the respondent Nos.3 and 4 are the original defendant Nos.2 and 3, who are supporting the plaintiffs. The parties shall hereinafter be called according to their original status as the plaintiffs and the defendants.
4. The facts in detail are as under:
The suit property is the land bearing Survey Nos.87- A/1/1, 87-A-3 and 87-B of Village Aundh, Tq. and Dist. Pune, admeasuring 104 acres, which was held by one Ramesh Vakratund Dev, a beneficiary of Inam land under the Inam Act, 1859, who lost the right, title and interest in the suit property by virtue of the Bombay Inam Abolition Act, 1959, which came into force with effect from 20-6-1953. One Mirashi family claimed to be the tenants of said Ramesh Vakratund Dev when the Bombay Inam Abolition Act, 1959 came into force and hence they acquired the right, title and interest of the tenants, which came to be ratified and confirmed by the principle of “feeding the grant by estoppelâ€. The said Mirashi family executed the registered sale-deed in respect of the suit property on 8-10-1945 in favour of Ratanchand Hirachand Doshi, being the Karta of the joint family property. The said Ratanchand Hirachand Doshi became the owner of one-and-half share of the entire property by virtue of the consent decree dated 5-11-1965 passed in Suit No.304 of 1954. On the basis of Will dated 12-8-1979, said to have been executed by Shri Ratanchand Hirachand Doshi, two persons, viz. (i) Rajas Ratanchand Doshi, and (ii) Arvind Raoji Doshi claimed to be the owners of the suit property and from them the defendant No.1. M/s. Walchandnagar Industries Ltd., a Company incorporated under the Companies Act, 1956, has purchased the suit property by a registered sale-deed dated 3-3-1983. This is how the history about the ownership of the suit property by the defendant No.1.
5. The defendant No.1 is facing Civil Suit No.997 of 1983 for declaration and specific performance of contract, filed at the instance of one Dheerendra Govindji Kotak and another Kakubhai Tulsidas Joshi. In the said suit, on or about 12-6-1986, an order came to be passed on the undertaking of the defendant No.1 that in the event of the defendant No.1 developing the suit property, they will not plead such development as defence to the plaintiffs' claim for specific performance of contract and further that the defendant shall inform any third-party with whom they have any dealings in respect of the suit property or any part thereof about the pendency of the said suit.
6. The plaintiffs, who are the respondent Nos.1 and 2 herein, filed Special Civil Suit No.127 of 2003 sometime in the month of January 2003 against the defendant No.1 claiming the reliefs of declaration that there is a concluded conditional contract between the plaintiffs and the defendant No.1 for transfer of right, title and interest in the property in favour of the plaintiffs and/or the defendant No.2 and for permanent injunction restraining the defendant No.1 from dealing with the property prejudicial in the interest of the plaintiffs. The claim in the suit is based upon – (i) the oral discussion between the plaintiff No.2 and the defendant No.1, said to have been held in the meeting dated 18-5-1991 for purchase of the suit property; (ii) the oral memorandum of understanding dated 20-11-1991 and the oral supplementary agreement dated 17-4-1992, said to have been entered into between the plaintiffs and the defendant Nos.2 and 3; and (iii) the resolution said to have been passed in the meeting of the Board of Directors of the defendant No.1-Company held on 20-6-1997, accepting to execute the sale-deed in favour of the clients of the plaintiff No.2, including the defendant No.2 or any other Trust, Company, person and/or persons, and to sign the consent terms in Suit No.997 of 1983 alongwith necessary documents. It is the averment that thus the offer given by the defendant No.1 to the plaintiff No.2 on 18-5-1991 was accepted by the defendant No.1, which became a concluded contract between the plaintiff and the defendant No.1 to sell/transfer right, title and interest in the suit property.
7. The reference is made in the plaint to – (i) the letter dated 6-6-1991, said to have been issued by the defendant No.1 to the plaintiff No.2, informing the decision in the meeting held on 18-5-1991; (ii) the notice dated 10-11-1998, said to have been issued by the defendant No.1 through Solicitors M/s. Kanga and Co., asking the plaintiffs to produce the original papers pertaining to tentative layout plan of the land; (iii) the proposal said to have been approved by the Competent Authority for deletion of hill top zone on or about 10-12-1998; and (iv) the meetings dated February 1999, July 1999, January 2000, August 2000, and March 2001, said to have been held between the plaintiffs and the defendant Nos.1 and 2 for negotiations and discussion of modalities of transfer.
8. The claim of the plaintiffs was opposed by the defendant No.1, whereas the defendant Nos.2 and 3 supported the claim of the plaintiffs. The Trial Court framed the following issues on 4-2-2008:
“1. Whether the plaintiffs prove there is concluded conditional contract between the plaintiff and defendant in respect of suit transaction?2. Whether the plaintiffs are entitled for the declaration that defendant are under obligation to obtain necessary permission for completion of the suit transaction?
3. Whether the plaintiffs are entitled for the permanent injunction restraining the defendant No.1 from dealing with the property mentioned in schedule, in any other manner prejudicial to the interest of the plaintiff?
4. Whether the suit is within the limitation?
5. Whether the suit is properly valued?
6. What Order and Decree?â€
9. On 17-12-2008, the plaintiffs filed an affidavit of examination-in-chief of witness Mahendra Manilal Shah. In the affidavit, he stated in para 9 that in continuation and in terms of series of the discussions with defendant no.1 and its solicitors, plaintiff no.2 remitted and paid Rs.1,40,00,000/- on behalf of the plaintiffs as required by them and also in the manner and mode as desired by them. It was further stated that this amount remitted and paid through solicitors Louis Glut and Company by and on behalf of the plaintiffs at the behest and request of the defendant No.1 and receipt of the same is confirmed by Shri Chakor Doshi, Director of Defendant no.1 Company to the solicitors of the plaintiff no.2 M/s. Mulla and Mulla. The witness Mahendra Manilal Shah in his cross-examination on 21-3-2009, made the statements in paras 2, 3 and 4 as under:
“2. It is true to say that through notice dated 10-11-1988, defendant No.1 called upon me and thereby informed that he is not having any concern with the suit property. I again say that through notice dated 10-11-1988, defendant No.1 called upon me for inspection of certain documents, which were produced by defendant No.2 before defendant No.1. It is true to say that after 1988, there was no written correspondence between both the plaintiffs and defendant No.1.â€
“3. I do not know the exact market price of the suit land at the relevant time. It is true to say that Exh.50 bears price of suit land as Rs.2.3 Crores. It is true to say that till today, I have not filed any suit for specific performance of contract with respect to the suit land against defendant No.1.â€
“4. It is true to say that the defendant No.1 had never executed any document with plaintiff No.1 and defendant No.2 and 3 with respect to the suit land. I have not filed suit for specific performance against defendant No.2 and 3 with respect to the suit land.â€
In para 7 of the cross-examination, the said witness stated as under:
“... It is not true to say that plaintiff No.1 and 2 never paid any amount to defendant No.1. Plaintiff is having written document to establish it and plaintiff will produce the same. ...â€
10. The defendant No.1 filed an application Exhibit 56 on 11-8-2010 under Order XI, Rule 14 of the Civil Procedure Code seeking direction to the plaintiffs to produce the documents showing remittance and payment of Rs.1,40,00,000/-. This application at Exhibit 56 was allowed by the Trial Court on 27-10-2010, directing the plaintiffs to produce the written documents of the alleged payment within fifteen days, else the adverse inference shall be drawn. Prior to that, the Court also passed an order on 17-9-2010, asking the parties to argue the matter on the question of valuation of the suit, observing therein that the plaintiffs themselves had stated that the agreed price of the land was Rs.2.3 Crores, but the plaintiffs have valued their claim at Rs.1,000/- and affixed court-fee stamp of rs.200/- with the plaint as court fees. The Court expressed that an enquiry needs to be made under Section 8 of the Bombay Court Fees Act.
11. On 23-11-2010, after hearing the parties, the Court passed an order holding that the plaintiffs are indirectly claiming the relief of specific performance of contract, and hence the suit needs to be valued as per Section 6(xi) of the Bombay Court Fees Act. The court fee was required to be paid on the total consideration of Rs.2.3 Crores. The valuation of the suit under Section 6(iv)(j) of the Bombay Court Fees Act cannot, therefore, be accepted, as the suit is susceptible to monetary valuation. The Court directed the plaintiffs to correct the valuation of the suit and to pay deficit court fee on the basis of consideration of Rs.2.3 crores under Section 6(xi) of the said Act within a period of one month.
12. It is at this stage the plaintiffs moved an application Exhibit 68 for amendment of the plaint on 4-2-2011, which was opposed by the defendant No.1 by filing the reply on 20-2-2011. On 22-2-2012, the Trial Court allowed the application Exhibit 68 for amendment. In Writ Petition No.4919 of 2012, this Court set aside the said order and directed re-consideration of the said application and to record the specific findings as to whether the plaintiffs have satisfied the 'due diligence' test; whether the amendments which have the effect of changing the nature of the suit could have been allowed; whether the amendments which now incorporate a prayer for specific performance could have been allowed without considering the said relief on the touchstone of the point of limitation.
13. On reconsideration of the matter, the Trial Court passed an order below Exhibit 68 on 28-11-2012, allowing the said application for amendment recording the finding that indirectly it is the suit for specific performance of contract. The Court has directed the plaintiffs to correct the valuation and to pay the deficit court fee. The deficit court fee has been deposited. If the prayer for specific performance of contract is allowed, it will not change the basic structure of the suit and, therefore, the additional pleadings connected with such prayer cannot be denied, otherwise it will cause prejudice to the plaintiffs to seek a complete relief. In such peculiar circumstances, it cannot be said that the plaintiffs are not diligent in filing the amendment application. The Court has held that the issue of limitation can be decided at the trial of the suit and it cannot be a bar to the amendment as sought for. Undisputedly, the suit is being tried by the Civil Judge, Senior Division, and hence there would be no change in the forum in spite of amendment.
14. Initially, the matter was listed before this Court on 6-2-2013, and an order of status quo was passed. The learned counsels have put their appearance for the respondents. On 24-7-2013, the matter was taken up for final disposal. Shri S.G. Aney, the learned Senior Counsel, appeared for the petitioners; whereas Shri G.S. Godbole, the learned counsel, appeared for the respondent Nos.1 and 2, the original plaintiffs. The respondents Nos.3 and 4 supported the case of the respondents Nos.1 and 2/plaintiffs.
15. During the course of arguments, in the beginning, it was expressed to the learned counsels for the parties that there is a board of at least 125 matters listed daily in the form of writ petitions or civil revision applications challenging the interlocutory orders, and hence in order to adopt some uniform criteria about entertaining all such petitions or revision applications, can certain guidelines not be laid down? The learned counsels have agreed to address this Court on such question to be framed. Accordingly, a question of law is finalized in consultation with the learned counsels for the parties, and an order was passed on 24-7-2013 as under:
“1. After hearing the learned Counsels appearing for the parties for quiet sometime, it is proposed that the Counsels should address this Court on the following question:
“Where a Court subordinate to the High Court, passes an interlocutory order in any suit or other proceedings, deciding an issue or determining some right or liability based upon the conspectus of facts, should this Court exercise its Revisional jurisdiction under Section 115 of the CPC or as the case may be, a Writ Jurisdiction under Article 226 or 227 of the Constitution of India, to interfere, when such decision or determination, can be more conveniently and effectively challenged by exercising a statutory right of appeal available, after the final decision in such a Suit or proceedings.â€
2. Since the question is repeatedly coming up for consideration of this Court in exercise of its Revisional Jurisdiction under Section 115 of Code of Civil Procedure or a Writ Jurisdiction under Article 226 and 227 of the Constitution, the Members of the Bar are at liberty to address this Court on this question. Hence, notice be given to the Members of Bar that the matter is kept on 1st August 2013 at 3.00 p.m.â€
16. Some of the lawyers sitting in Court room expressed their desire to address the Court on the point and suggested that the notice be given to the members of the Bar. Accordingly, a notice of the aforesaid order was given to the Bar Council of Maharashtra and Goa on 26-7-2013; in response to which, this Court had pleasure to hear the arguments of the learned counsels Shri A.V. Anturkar, Shri Shriram Kulkarni, Ms Deepa Ahuja, Shri Amit A. Gharte and Shri Advit M. Sethna, who have voluntarily come forward to assist the Court in deciding such question of law.
17. By a separate common judgment pronounced today, i.e. 25-9-2013, in Writ Petitions Nos.722 of 2013 and 5775 of 2012 and Civil Revision Application No.482 of 2012, the question of law so framed, has been decided, holding that the exercise of jurisdiction by the High Court under the provisions of Section 115 of the Civil Procedure Code, or under Article 226 or 227 of the Constitution of India, will depend upon the facts and circumstances of each case and there is no absolute bar by way of an alternate remedy of challenging an interlocutory order after the final decision of the case. The relevant portion is contained in paragraph 8 of the said judgment, which is reproduced below:
“8. It is not the argument by any of the learned counsels appearing for the parties or otherwise that merely because the interlocutory order can be challenged after the final decision, the jurisdiction of the revision under Section 115 of CPC or the jurisdiction under Article 226 or 227 of the Constitution of India cannot be invoked. All the learned counsels are at consensus ad idem in their arguments that the exercise of jurisdiction by the High Court under the aforesaid provisions will depend upon the facts and circumstances of each case and there is no absolute bar by way of an alternate remedy of challenging an interlocutory order after the final decision of the case. I accept this proposition of the learned counsels. By this judgment, I am also not laying down any law that there would be an absolute bar for the High Court to entertain either a revision under Section 115 of CPC or a petition under Article 226 or 227 of the Constitution of India. By this judgment, I am merely laying down certain guidelines for exercise of such jurisdiction in certain situations and that too, to a possible extent. The judgment does not take care of all situations, but deals with certain recurrent orders so as to maintain consistency in the approach, which is to be made known to all.â€
I have laid down certain guidelines for exercise of such jurisdiction in certain situations and that too, to a possible extent. While deciding this petition, I shall refer to certain paragraphs of the said judgment.
18. Shri Godbole, the learned counsel appearing for the original plaintiffs, who are the respondent Nos.1 and 2 herein, has urged that after remand of the matter by this Court in Writ Petition No.4919 of 2012, the Trial Court has recorded the findings on all material aspects of the matter. It is not the case where the Trial Court has failed to record the findings on material aspects or has taken into consideration certain irrelevant aspects. He, therefore, submits that in terms of Section 99 and sub-section (1) of Section 105 read with Order XLIII, Rule 1-A of CPC, the correctness or otherwise of the order impugned can be judged more conveniently and effectively in a regular civil appeal if the ultimate decision in the suit goes against the petitioners. He submits that the High Court should be slow in exercise of its jurisdiction under Article 226 or 227 of the Constitution of India against an order allowing the application for amendment.
19. It is his further submission that the view taken by the Trial Court that the amendment proposed neither does change the nature of suit, nor cause of action, that there is no lack of due diligence and that the amendment is necessary for deciding the real controversy involved in the matter, is based upon the factual aspect, which normally cannot be gone into by the High Court under Article 226 or 227 of the Constitution of India to substitute its own view by appreciating or re-appreciating the material on record. He, therefore, submits that the petition should be dismissed on this ground also.
20. I have dealt with this aspect in detail in a separate judgment delivered today in this petition deciding the question of law framed and laying down the guidelines after discussing various decisions of the Apex Court, for exercise of jurisdiction under Articles 226 and 227 of the Constitution of India. The relevant portion is contained in paras 97 to 100 of the said judgment, which are reproduced below:
“97. The challenge to an order granting or refusing to grant an amendment can be entertained by the High Court in its jurisdiction under Article 226 or 227 of the Constitution of India, essentially on the grounds:
(i) that the Court has failed to record its findings on the relevant aspects and the findings recorded are based upon certain irrelevant aspects;
(ii) that the findings recorded by the Court on the conditions to be satisfied are erroneous and against the well-settled principles of law or on misreading of the averments in the plaint and the proposed amendment; and
(iii) that the Court has committed an error or an irregularity in the decision-making process, which has resulted in failure of justice.â€
“98. When the challenge is on the ground no.(i) above, it may call for remand of the matter back to the lower Court to record the specific findings on the questions not decided, or where the decision is based upon irrelevant factors. When a challenge is on the ground no. (ii), the High Court may have to find out whether the decision is based upon the correct appreciation of the original pleadings and the proposed amendment. The High Court may have to see whether the conditions precedent have been complied with and that the case falls or does not fall within the prohibitory criteria laid down by the decisions. In case of challenge on ground no.(iii), if the Court finds that an order suffers from an error or an irregularity, which has occurred in the decision-making process resulting in failure of justice, it may thereafter decide the course of action to be adopted in the facts and circumstances of the case either to decide the application on its own merits or to remand the matter back to the lower Court for fresh consideration.â€
“99. In entertaining the challenge as aforesaid, the Court is not appreciating or re-appreciating any evidence available on record. It is not entering into any finding of fact as such. The process to be adopted is to go through the original pleadings to find out real controversy involved in the matter and to find out from the proposed amendment whether it is necessary for deciding the real controversy involved. The question whether nature of suit or cause of action changes or not, can also be decided by comparing the pleadings. It is a matter of fulfillment of conditions to be seen. It is a matter of appreciation of pleadings. The Apex Court has held in Surya Dev Rai's case, cited supra, that in exercise of power under Article 227 of the Constitution of India, the High Court can substitute the view taken by the Trial Court and can pass all such orders, which the Trial Court is empowered to pass.â€
“100. No doubt, that any order passed on the application for amendment remains an interlocutory order and the correctness or legality of it on any ground, can be challenged in an appeal from a decree or a final decision. It will, therefore, depend upon the facts and circumstances of each case as to whether such a petition should be entertained or not. In a given case, keeping in view the nature of the order, the stage at which it is passed, and the grounds of challenges, the High Court may refuse to entertain a petition and can leave the party an option to challenge it in an appeal after a final decision. But in case of an order of amendment, the High Court may have to consider the question of lack of due diligence, or presence of due diligence, or change in the nature of suit, or cause of action for the purposes of limitation, or the amendment sought is not bona fide, but only to protract the litigation, and interfere at an interlocutory stage itself under Article 227 of the Constitution of India, to substitute the view of the lower Court.â€
In view of above, the objection raised by Shri Godbole is rejected and I proceed to deal with the matter on merits.
21. The first contention of Shri Aney, the learned counsel appearing for the petitioner/original defendant No.1, is that there is a lack of due diligence and bona fides on the part of the plaintiffs in moving an application for amendment after the commencement of the trial. To deal with this contention, the undisputed position needs to be stated. The suit in question was filed in the month of January 2003 claiming the reliefs, which are already reproduced in the earlier para. The written statement was filed on 15-4-2004 and the issues were framed on 4-2-2008. The plaintiffs filed an affidavit in lieu of examination-in-chief of the plaintiff No.2 on 17-12-2008 and his cross-examination was concluded on 21-3-2009. It is thereafter that the plaintiffs filed an application at Exhibit 68 for amendment of plaint on 11-8-2010. Hence, the criteria of due diligence is attracted in the present case. The Trial Court has, therefore, committed an error of law apparent on the face of record, while recording a finding that in the peculiar facts of this case, there was no question of “due diligenceâ€. The finding is in ignorance of the relevant considerations of law.
22. The question of due diligence has been dealt with in a separate judgment, in which the law laid down by the Apex Court in various decisions on the point, is summarized in para 87 as under:
“(a) “Due diligence†means careful and persistent application and effort. It means the diligence as a prudent man would exercise in the conduct of his own affairs. Unless the party takes prompt steps, mere action cannot be accepted after the commencement of the trial. The due diligence determines the scope of party's constructive knowledge of the claim. It is a kind of reasonable investigation, which is necessary before claiming the reliefs.
(b) The due diligence is distinct from ignorance. In spite of knowledge, ignorance by a party or an Advocate cannot be a matter of due diligence. The neglect to perform an action, which one has an obligation to do, cannot be called as a mistake.
(c) The degree of prejudice to the other side by an amendment after the commencement of the trial is greater than one at pre-trial stage.
(d) Without recording finding on the question of due diligence, the Court shall not get jurisdiction either to allow or disallow an amendment in the pleadings after the commencement of the trial.
(e) The Court while allowing an amendment must record a finding that in spite of due diligence, the party could not have raised the matter before the commencement of the trial, or that the events sought to be brought on record by way of an amendment have occurred subsequent to the commencement of trial.
(f) The facts and grounds in the application for amendment must be clearly stated to bring out a case that the delay caused was beyond the control and diligence of the party proposing the amendment.
(g) Where a party had acted with due diligence or not, would depend upon the facts and circumstances of the case and no hard and fast rule or strait-jacket formula can be laid down.â€
23. To deal with the question of “due diligence†involved in the present case, the material averments made in the application at Exhibit 68 for amendment, needs to be seen, which are contained in paras 1, 2 and 8, reproduced below :
“1. That by an order dated 23/11/2010 passed below Exh.1, this Hon'ble court has directed the plaintiff to correct the valuation of the suit on the basis that suit transaction is supported by consideration of Rs.2.3 crores. In view of this, it has become a necessary to amend the valuation clause. Since the amendment has been necessitated due to order of this Hon'ble court, this application could not be preferred before beginning of trial of this suit.â€
“2. The Plaintiffs state that they had filed the suit with the consideration that the relief claimed is not susceptible to monetary valuation. However in the view of said order, the relief is required to be valued, as ordered by this Hon'ble court. It is submited that in view of changed circumstances and in order to seek complete and effectual reliefs, it has become also necessary to add certain explanatory pleadings and amend the reliefs suitably, so that all the questions arising in this suit can be adjudicated and multiplicity of proceedings can be avoided.â€
“8. The Plaintiff state that the above amendment has been necessitated due to order of this Hon'ble court and due to the requirement of making incidental changes in pleadings and prayers. The proposed amendment does not change the basic nature of the suit and is formal in nature. In view of the specific resolution passed by the Defendant No.1, the Defendant No.1 is aware that it is required to execute necessary sale Deed. Therefore the Defendant No.1 would not be taken by surprise if the amendment is allowed. If the said relief prayed by the Plaintiff is not allowed, the Plaintiff would suffer irreparable loss which cannot be compensated in any terms. Moreover in order to completely and effectually adjudicate all the questions arising in this suit, the proposed amendment is necessary.â€
24. Bare perusal of the aforesaid averments in the amendment application, it is apparent that there is absolutely no explanation or acceptable material placed on record by way of pleadings as is required to show that the delay caused was beyond the control and diligence of the plaintiffs. The proposed amendment, if perused, shows that the event, which occurred in the years 1995-96 and 1998-99 regarding payment of Rs.1.40 crores towards part consideration, is brought on record with the details, as are stated in paragraphs 15A and 15B. The claim for specific performance of contract with certain averments is made. There is nothing on record to show that the plaintiffs had no knowledge that such a claim was required to be made in the plaint, or that the relief of specific performance and/or possession could not have been claimed when the suit was filed in the month of January 2003. Hence, it could not be a matter of bona fide mistake. The pleadings in the application do not make out a case that despite exercise of due diligence, the matter could not be raised initially. There is no change in the facts and circumstances of the case pleaded after the issues were framed on 4-2-2008 and an examination-in-chief of the plaintiff No.2 filed on 17-12-2008, or when the cross-examination was concluded on 21-3-2009 so as to enable the plaintiffs for the first time to seek a relief of specific performance of contract and possession. The plaintiffs have failed to establish that the delay caused was for some bona fide reasons that the application for amendment was moved with due diligence. The Trial Court ought to have seen that in the absence of pleading of material facts in the application for amendment, the plaintiffs have failed to establish due diligence, and allowing an amendment shall cause an injury of an irremediable nature. The findings recorded by the Trial Court cannot, therefore, be sustained on the question of due diligence.
25. In order to consider the question as to the nature and the basic structure of the original suit, the averments in the plaint are required to be seen. The suit in question alleges four types of transactions. The first is of the acceptance of the proposal by the defendant No.1 of the plaintiff No.2 for and on behalf of the plaintiff No.1 for purchase of the suit property for a total consideration of Rs.2.3 crores in accordance with oral terms and conditions mutually agreed between the plaintiff No.2 and the defendant No.1, as are set out in the plaint and alleged to have been approved in the meeting of the Board of Directors of the defendant No.1 held on 18-5-1991. The second is of the acceptance of the offer of the defendant No.2 made through the defendant No.3 for creating a perpetual lease of the suit property on “as is where is basis†by the plaintiff No.2 for and on behalf of the plaintiff No.1 for a total consideration of Rs.5.40 crores to be paid by the defendant No.2 to the defendant No.1 and the Deo family by entering into a memorandum of understanding on 20-11-1991, and in addition to it, an amount of Rs.1 crore to the plaintiffs for relinquishing their rights, which they alleged to have agreed by virtue of negotiations. The third is of the defendant No.1 agreeing to accept an amount of Rs.3.70 lacs only by way of premium for executing the proposed lease-deed in respect of the suit land in favour of the defendant No.2. A supplementary memorandum of understanding executed by and between the plaintiffs and the defendant Nos.2 and 3 on or about 17-4-1992, has been relied upon. The fourth is that the defendant No.1 has in its meeting of the Board of Directors passed a resolution to appoint a Committee to execute the sale and/or assignment of rights in respect of the suit property in favour of the clients of the plaintiffs, including the defendant No.1.
26. The suit in question was filed in the month of January, 2003, in which it is alleged that the defendant No.1 and its Solicitors were remitted and paid various amounts by and on behalf of the plaintiffs, as required and in the manner and mode desired by them. It is further alleged that the defendant No.1 did not complete the transaction, nor did take a final decision, and is trying to prolong the transaction. Hence, the plaintiffs have claimed the reliefs as under:
“i. It be declared that there is a concluded conditional Contract between the Plaintiffs and the Defendant No.1 for transfer of right, title and interest in the property mentioned in the Schedule in favour of the Plaintiffs and/or in favour of the Defendant No.2 or any person as may be mentioned by the Plaintiffs.
ii. It be further declared that the Defendant No.1 is under obligation to comply with the conditions of obtaining permissions from the Honourable High Court and also to obtain permission from the Income Tax Department or any other Authority under any Law for the time being in force for conveying the right, title and interest in the property described in the Schedule to this Plaint in favour of the Plaintiffs or the persons named by the Plaintiffs.
iii. The Defendant No.1 be permanently restrained from dealing with the property mentioned in Schedule written hereunder in any other manner prejudicial to the interest of the Plaintiffs.
iv. Temporary Injunction in terms of Prayer Clause (iii) above may be issued during the pendency of the Suit.
v. The Plaintiffs be awarded costs of this Suit.
vi. Any other just and equitable orders may kindly be passed in favour of the Plaintiffs.â€
27. In order to get the reliefs so claimed, the plaintiffs were required to prove all the four types of transactions as alleged, and that the defendant No.1 did not fulfill their obligations, which were the conditions precedent. The suit was not susceptible of monetary valuation for the purposes of court fee and jurisdiction. It was, therefore, valued under Section 6(iv)(j) of the Bombay Court Fees Act for declaration covered by Section 34 of the Specific Relief Act. The change in the valuation by an order dated 23-11-2010 to one under Section 6(xi) of the said Act did not result in change of forum and the suit continues to be triable by the Court of Civil Judge, Senior Division.
28. The next question is what is the amendment sought for. By an application Exhibit 68, the amendment introduces paragraphs 15A, 15B and 15C. Paragraphs 15A and 15B, as stated earlier, pertain to the events, which have occurred in the years 1995-96 and 1998-99. In paragraph 15C, the amendment proposed is as under:
“15C:- The Plaintiffs states that thus there is oral agreement for sale supported by part-consideration. The defendant No.1 is bound to perform it's part of contract of executing necessary documents of transfer. The Plaintiff no.1 is always ready and willing to perform it's part of contract by paying remaining consideration amount to the Defendant No.1.â€
The plaintiffs have proposed to add the prayer clauses (i), (ia) and (ib) in the plaint, which are proposed in the amendment application as under:
“i) It be declared that there is an oral agreement for sale of suit property between Plaintiffs and Defendant No.1, which is supported by payment of part consideration by Plaintiff No.1 to Defendant No.1, which is reflected in the board resolution of the Defendant No.1 Company dt.20/06/97 which is a executory contract between the Plaintiffs and Defendant No.1 for transfer of rights, title and interest in the suit property by Defendant No.1 in favour of client of the Plaintiff No.2, i.e. Plaintiff No.1.â€
“(ia) The Defendant No.1 may kindly be directed to specifically perform the oral agreement by executing deed of sale or any other appropriate legal document of transfer in the favour of the Plaintiff No.1 by accepting balance consideration amount.â€
(ib) If the Defendant No.1 fails to execute the sale Deed or any other appropriate legal documents of transfer, then commissioner may kindly be appointed to execute such documents.â€
29. The question is whether the amendment, as proposed, is necessary to decide the real controversy involved in the suit and/or to avoid the multiplicity of the litigation, as has been held by the Trial Court. The substantial amendment proposed to be introduced is in paragraph 15C to convert the suit for declaration into one for specific performance of contract with the averment of readiness and willingness on the part of the plaintiffs to pay the remaining consideration amount to the defendant No.1. The proposed amendment also changes the valuation of the suit for the purposes of court fee and jurisdiction to Rs.2.3 crores and the claim for specific performance of the oral agreement said to have been entered into between the plaintiffs and the defendant No.1 by accepting the balance amount of consideration. It was not an amendment of clarificatory or explanatory in nature, as urged.
30. In a suit for specific performance of contract, an issue may be framed and decided by the Court as to whether there subsists a concluded contract between the parties, and what are the terms and conditions of such contract. However, in a suit for declaration that there subsists a contract between the plaintiffs and the defendant No.1 with a further relief of declaration that the defendant is under obligation to comply with the conditions precedent and for permanent injunction restraining the defendants from dealing with the property in any other manner, it is not necessary to claim a relief of specific performance of contract and possession of the suit property, or to value the suit for the purposes of court fee and jurisdiction under Section 6(xi) of the Bombay Court Fees Act. The suit could have been decided on its own merits on the basis of the issues, which are framed. Hence, the substantial amendment proposed was not necessary for deciding the real controversy involved in the matter. The Trial Court has, therefore, committed an error in holding that the amendment, as proposed, was necessary for deciding the real controversy involved between the parties.
31. The next contention of Shri Aney, the learned Senior Counsel for the petitioner/defendant No.1, is that the amendment proposed changes the nature of the suit and the cause of action resulting in the claim of specific performance of contract as barred by time, and hence the Trial Court ought to have rejected such application for amendment. In order to consider the said contention, the law on the question of amendment laid down by the Apex Court in its various judgments, which are referred on the aspect of introducing the relief of specific performance of contract, has already been summarized in paragraph 96 as under, in the separate judgment pronounced today.
(a) In a suit for specific performance of contract, an amendment introducing a plea of readiness and willingness in terms of Section 16(c) of the Specific Relief Act proposed at an appropriate stage, can be permitted for the purposes of deciding the real controversy involved in the matter.
(b) In a suit simpliciter for grant of permanent injunction restraining the defendant from alienating, encumbering, selling, disposing of, or in any way dealing with the suit property, the relief of specific performance of contract cannot be permitted to be claimed by way of an amendment, if it is barred by a law of limitation.
(c) In a suit for mandatory injunction directing the defendant to comply with the terms of the agreement, an application for amendment introducing a claim for specific performance of contract may be refused if the cause of action required to be stated initially in the plaint, is not pleaded, and while introducing a cause of action by way of amendment, a bar of limitation operates since the date of inception of the suit.
(d) In a suit for declaration that the contract between the parties subsists and the defendant is bound by the terms and also for grant of permanent injunction restraining the defendant from alienating the suit property in any manner, a claim for specific performance of contract by way of an amendment may be refused if there is no foundation laid in the plaint for that purpose, because it would amount to changing the nature or the basic structure of the suit and the cause of action having regard to a bar of limitation since the date of inception of the suit.
In the light of the aforesaid law laid down, the contentions raised are considered below.
32. To claim a relief of specific performance of contract, the pleadings in the plaint have to conform to the requirements of Order VI, Rule 3 read with Form 47/48 of Appendix-A of CPC. It was a specific pleading required that the plaintiff has applied to the defendant specifically to perform the agreement on his part, but the defendant has failed to do so. There is no averment in the plaint that the plaintiffs had remitted and paid Rs.1,40,00,000/- to the defendant No.1 towards part consideration out of total consideration of Rs.2.3 Crores. It was required to be pleaded that the plaintiff has been and still ready and willing specifically to perform the agreement on his part, of which the defendant has had notice. It is the specific case of the plaintiff that it was a concluded conditional contract between the parties. Hence, the conditions precedent and their fulfillment in terms of Order VI, Rule 6 of CPC constituting the material facts were required to be pleaded. The cause of action for filing a suit for specific performance of contract based upon the provisions of Article 54 of the Limitation Act was required to be pleaded. If the contract in question fixes a date of its performance, then the plaint must indicate such a date. If the contract alleged does not fix any date for its performance, then it is required to be stated specifically in the plaint the date when the plaintiff had the notice that the performance is refused by the defendant. All such pleadings are absent in the plaint. There is no pleading that pursuant to any such agreement, the plaintiffs were put in possession of the suit property, and in spite of it, there was no relief of possession claimed. The valuation of the suit initially for the purposes of court-fees and jurisdiction should have been at least at Rs.2.3 crores under Section 6(xi) of the Bombay Court Fees Act. There is absolutely no foundation laid in seeking the reliefs of specific performance of contract and for possession of the suit property. The suit as was filed initially in January 2003 cannot, therefore, be said to be a suit even indirectly for a specific performance of contract. The finding to that effect recorded by the Trial Court, with reference to some statement made in the written statement by the defendant No.1, as pointed out by Shri Godbole, cannot be sustained. The amendment proposed, therefore, changes the nature and the basic structure of the suit, and hence could not have been allowed.
33. The cause of action for filing the suit in question, as is mentioned in the original plaint, was the failure on the part of the defendant No.1 to take appropriate steps to obtain permission from this Court in Suit No.997 of 1983, to sign the necessary documents under the Income-tax Act, to obtain permission under Section 269 therein, and to execute the necessary documents of transfer of right, title and interest in favour of the plaintiffs and/or in favour of the defendant No.2, as is mentioned in the plaint. In para 17 of the plaint, it is alleged that the cause of action for the suit arose, firstly, on 18-5-1991, when the defendant No.1 agreed to alienate the right, title and interest in the property mentioned in para 1 of the plaint on the terms and conditions mentioned in para 5 therein. Thereafter, the date of 18-5-1991, on which the defendant No.1 is said to have taken the decision, which was communicated on 6-6-1991, and the dates of 20-11-1991, 20-6-1997, 10-11-1998 and 10-12-1998, on which various steps were taken, have been mentioned. It is further alleged that the cause of action arose in the month of February 1999, July 1999, January 2000, August 2000, and lastly in March 2001, when series of meetings alleged to have taken place between the plaintiffs and the defendant Nos.1 and 2 for negotiations and discussing the modalities for completing the transfer. It was thus a suit to obtain any other declaration covered under Article 58 of the Limitation Act, for which the limitation of three years starts running from the date when the right to sue first accrues. On the basis of the unamended pleadings in the plaint, the Trial Court has framed an issue of limitation.
34. The cause of action for claiming a suit for specific performance of contract and possession of the suit property is totally different from the suit simpliciter for grant of declaration that there subsists a valid conditional concluded contract between the parties to a suit and for mandatory injunction to the defendants to perform the contractual obligations, which are condition precedent. In order to bring the suit for specific performance of contract and possession within a period of limitation, as prescribed under Article 54 of the Limitation Act, the application for amendment should contain the material facts by way of proposed amendment that there was a specific date fixed for performance of contract between the parties, or if there was no such specific date fixed, then the plaintiffs were required to state in the proposed amendment the date when the plaintiffs had the notice that the performance is refused by the defendants. Such facts are totally absent even in the proposed amendment. Hence, if the last date of March 2001 stated in paragraph 17 of the plaint is taken as a date from which the limitation of three years for filing the suit for specific performance of contract starts running, as per Article 54 of the Limitation Act, it expired in the month of March 2004. The amendment application at Exhibit 68 was filed on 4-2-2011 and hence from the statement made in the plaint itself, the suit for specific performance of contract was barred by the law of limitation. In view of this, there was no question of framing an issue as to the limitation for filing a suit for specific performance of contract by holding that it is a mixed question of law and fact, which is required to be proved by permitting the parties to lead evidence to substantiate their rival contentions. In order to avoid multiplicity of litigation, the amendment changing the nature of suit and course of action, cannot be allowed, that too in defeat of the law of limitation. The application for amendment was, therefore, required to be rejected.
35. For the reasons stated above, the writ petition is allowed. The order dated 28-11-2012 passed by the learned Civil Judge, Senior Division, Pune, allowing the application at Exhibit 68 for amendment of plaint under Order VI, Rule 17 of the Civil Procedure Code, filed in Special Civil Suit No.590 of 2011, is hereby quashed and set aside. The application for amendment at Exhibit 68, is rejected. No order as to costs.
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