Friday 6 March 2015

Whether court can allow amendment of plaint when application for amendment is filed after delay?


              Insofar as the Court's jurisdiction to allow an amendment of 
the pleadings is concerned, our Courts have consistently held that the 
jurisdiction is wide enough to permit amendments even in cases where 
there has been substantial delay in filing amendment applications.  The 
Courts have held that the dominant purpose of allowing the amendment 
is to minimize the litigation and therefore, in the facts and circumstances 
of the case, it is always open to the Court to disregard the delay and 
allow an amendment.   The Supreme Court has considered the content 
and   extent   of   this   discretion   in   the   case   of  Pankaja   v/s   Yallappa 
(supra).  The Court in that case held as follows :­
“ 12.     So far as the court's jurisdiction to allow an amendment 
of pleadings is concerned, there can be no two opinions that the 
same is wide enough to permit amendments even in cases where 
there   has   been   substantial   delay   in   filing   such   amendment 
applications.   This Court in numerous cases has held that the 
dominant purpose of allowing the amendment is to minimise the 
litigation, therefore, if the facts of 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.  
            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
               ORDINARY ORIGINAL CIVIL JURISDICTION
    
     CHAMBER SUMMONS NO.551 OF 2014 
   IN 
 SUIT NO.2726 OF 1994
Sumer Builders Pvt. Ltd.

               vs
Sadhana Textiles Mills Pvt. Ltd. And Ors. .
 CORAM :  S.C. GUPTE, J.
               DATED:  SEPTEMBER  2,  2014
Citation;2015(1) ALLMR795


This   Chamber   Summons   is   taken   out   by   the 
Plaintiff/Applicant for amendment of the plaint.   The Schedule of the 
amendment annexed to the Chamber Summons seeks to add averments 
in respect of a purported declaration and deed of apartment, both dated 
17   October   2002,   executed   between   Defendant   Nos.1   and   5.     The 
amendment further seeks to add prayers seeking inter alia a declaration 
of nullity of the purported declaration and deed of apartment.  The facts 
of the case, leading to the present application, may be briefly stated as 
follows :­
                                                                                                                             
The   Plaintiff   has   filed   the   present   suit   for   specific 
2.
performance   of   an   agreement   for   sale   of   land   executed   between 
Defendant No.1  and the Plaintiff.  During the pendency of the suit, the 
Plaintiff claimed to have learnt about a transaction between Defendant 
No.1 and Defendant No.5 contained in a letter of allotment dated 16 
August   1996,   by   which   Defendant   No.1   purported   to   create   rights   in 
favour of Defendant No.5 in respect of the suit property.   The Plaintiff, 
accordingly, sought to amend the plaint inter alia by seeking cancellation 
of the purported letter of allotment dated 16 August 1996.  This Court, 

by its order dated 26 February 2014, allowed the Chamber Summons in 
terms of prayer clause (a) thereof, leaving all contentions of the parties, 
including the issue of limitation, open.  This order has been accepted by 
Defendant No.1 and not carried in appeal.  The Plaintiff has, accordingly, 
amended the plaint impleading the Defendants as party Defendants to 
the   present   suit   and   seeking   cancellation   of   the   letter   of   allotment 
executed by Defendant No.1 in favour of Defendant No.5.  
3.
After his joinder to the suit, Defendant No.5 filed a written 
statement, disclosing inter alia that there was a conveyance executed on 
17   October   2002   by   way   of   a   declaration   and   deed   of   apartment   in 
respect   of   the   suit   property.     By   the   present   Chamber   Summons,   the 
Plaintiff seeks to add the requisite averments challenging the purported 
declaration and deed of apartment, and seeks a declaration of nullity and 
cancellation thereof.
4.
The Chamber Summons is opposed by Defendant No.5 on 
the   ground,   firstly,   that   the   declaration   and   deed   of   apartment   are 
                                                                                                                             
executed on 17 October 2002.   The declaration and deed of apartment 
having   being   registered,   the   Plaintiff   has   had   deemed   notice   of   the 
execution and registration thereof.    In the premises, it is submitted that 
any challenge to the declaration and deed of apartment on the date of 
the application of amendment, is clearly barred by the law of limitation. 
It is submitted that under Section 3 of the Transfer of Property Act, a 
person   has   a   deemed   notice   of   the   instrument   as   from   the   date   of 
registration thereof.  It is submitted that under Article 59 of the Schedule 
to the Limitation Act, 1963, a suit for cancellation or setting aside of an 

instrument must be filed within three years of the Plaintiff coming to 
know of the facts entitling the Plaintiff to have the instrument cancelled 
or set aside.  It is submitted that the Plaintiff is accordingly deemed to be 
in the knowledge of the instrument, which is claimed to be in breach of 
the Plaintiff's right of specific performance in the suit herein, as on the 
date of the registration of the instrument.  It is submitted that reckoning 
this   date   to   be   date   for   starting     of   the   period   of   limitation,     any 
application seeking cancellation of the instrument filed more than three 
years after such knowledge, is barred under Article 59.  Learned Counsel 
for Defendant No.5 relies on the judgments of the Supreme Court in the 
cases of  Radhika  Devi Versus  Bajrangi Singh 1, Shivgopal  Sah Alias 
Shiv Gopal Sahu Versus Sita Ram Saraugi 2 and Ashutosh Chaturvedi 
Versus Prano Devi Alias Parani Devi 3   in support of his submissions. 
These judgments are countered by the learned Counsel for the Plaintiff 
by  citing  the  judgment  of   the   Supreme   Court  in  the  case  of  Pankaja 
Versus Yallappa4.  It is submitted by the learned Counsel for the Plaintiff 
1 (1996) 7 Supreme Court Cases 486
2   (2007) 14 Supreme Court Cases 120
3 (2008) 15 Supreme Court Cases 610
4 (2004) 6 Supreme Court Cases 415
                                                                                                                             
that granting of amendment is a matter of discretion for the Court and 
such   discretion   should   be   exercised   having   regard   to   the   facts   and 
5.
circumstances of each case.
Insofar as the Court's jurisdiction to allow an amendment of 
the pleadings is concerned, our Courts have consistently held that the 
jurisdiction is wide enough to permit amendments even in cases where 
there has been substantial delay in filing amendment applications.  The 
Courts have held that the dominant purpose of allowing the amendment 
is to minimize the litigation and therefore, in the facts and circumstances 
of the case, it is always open to the Court to disregard the delay and 
allow an amendment.   The Supreme Court has considered the content 
and   extent   of   this   discretion   in   the   case   of  Pankaja   v/s   Yallappa 
(supra).  The Court in that case held as follows :­
“ 12.     So far as the court's jurisdiction to allow an amendment 
of pleadings is concerned, there can be no two opinions that the 
same is wide enough to permit amendments even in cases where 
there   has   been   substantial   delay   in   filing   such   amendment 
applications.   This Court in numerous cases has held that the 
dominant purpose of allowing the amendment is to minimise the 
litigation, therefore, if the facts of 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 background of that case.  
15.     This Court in the case of L.J. Leach and Co. Ltd. v. Jardine 
Skinner and Co. has held :(AIR p. 362, para 16)

“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 interests 
of justice.”
16.         This view of this Court has, since, been followed by a 
three­Judge   Bench   of   this   Court   in   the   case   of   T.N.   Alloy 
Foundry   Co.   Ltd.   v.   T.N.   Electricity   Board.     Therefore,   an 
application   for   amendment   of   the   pleading   should   not   be 
disallowed merely because it is opposed on the ground that the 
same is barred by limitation, on the contrary, application will 
have   to   be   considered   bearing   in   mind   the   discretion   that   is 
vested   with   the   court   in   allowing   or   disallowing   such 
amendment in the interest of justice.
17.         Factually   in   this   case,   in   regard   to   the   stand   of   the 
defendants   that   the   declaration   sought   by   the   appellants   is 
barred by limitation, there is dispute and it is not an admitted 
fact.   While the learned counsel for the defendant­respondents 
pleaded that under Entry 58 of the Schedule to the Limitation 
Act,   the   declaration   sought   for   by   the   appellants   in   this   case 
ought to have been done within 3 years when the right to sue 
first accrued, the appellant­plaintiff contends that the same does 
not fall under the said entry but falls under Entry 64 or 65 of the 
said   Schedule   of   the   Limitation   Act   which   provides   for   a 
                                                                                                                             
limitation of 12 years, therefore, according to them the prayer 
for declaration of title is not barred by limitation, therefore, both 
the   courts   below   have   seriously   erred   in   not   considering   this 
question before rejecting the prayer for amendment.   In such a 
situation where there is a dispute as to the  bar of limitation this 
Court in the case of Ragu Thilak D. John v. S. Rayappan has 
held: (SCC p. 472)

“The   amendment   sought   could   not   be   declined. 
The   dominant   purpose   of   allowing   the 
amendment   is   to   minimize   the   litigation.     The 
plea that the relief sought by way of amendment 
was   barred   by   time   is   arguable   in   the 
circumstances of the case.  The plea of limitation 
being disputed could be made a subject­matter of 
the   issue   after   allowing   the   amendment   prayed 
for.”
18.      We think that the course adopted by this Court in Ragu 
Thilak   D.   John   case   applies   appropriately   to   the   facts   of   this 
case.   The courts below have proceeded on an assumption that 
the amendment sought for by the appellants is ipso facto barred 
by the law of limitation and amounts to introduction of different 
relief than what the plaintiff had asked for in the original plaint. 
We   do   not   agree   with   the   courts   below   that   the   amendment 
sought for by the plaintiff introduces a different relief so as to 
bar the grant of prayer for amendment, necessary factual basis 
has already been laid down in the plaint in regard to the title 
which, of course, was denied by the respondent in his written 
statement   which   will   be   an   issue   to   be   decided   in   a   trial. 
Therefore, in the facts of this case, it will be incorrect to come to 
the   conclusion   that   by   the   amendment   the   plaintiff   will   be 
introducing a different relief.   ”
6.
Having  regard to  this  wide   discretion   of   the  Court  in  the 
matter of allowing of amendments, it is necessary to be seen whether in 
the present case such discretion ought to be exercised in favour of the 
Plaintiff and the amendment proposed should be allowed.
7.
This Court by its order dated 26 February 2014, in the first 
                                                                                                                             
place,   allowed   the   amendment   of   the   plaint   by   (i)   impleadment   of 
Defendant   No.5   as   a   party   Defendant   to   the   present   suit   and   (ii) 
inclusion of challenge to the transaction between Defendant No.1 and 
Defendant No.5 in respect of the suit property.  The Plaintiff at that stage 
claimed to be aware of only the letter of allotment issued by Defendant 
No.1 in favour of Defendant No.5 purporting to create rights in respect 
of   the   suit   property.     The   impleadment   of   Defendant   No.5   and 
incorporation of challenge to the transaction between Defendant Nos. 1 
and 5 was allowed,  by keeping the contentions of parties concerning the 
bar of limitation in respect of such impleadment and challenge, open. 
Thus, the Court has already been seized of a challenge to the creation of 
third party rights by Defendant No.1 in favour of Defendant No.5.  In the 
backdrop of these facts, it may now be seen that the Plaintiff, by way of 
the present Chamber Summons, seeks to incorporate a further challenge 
to the creation of rights by Defendant No.1 in favour of Defendant No.5 
by a purported declaration and deed of apartment.   After the Chamber 
Summons was allowed and the plaint was amended,  the Plaintiff claims 
to have learnt about these documents from the Written Statement   of 
Defendant No.5. With a view to claim effective relief in respect of the 
transaction   between   Defendant   No.1   and   Defendant   No.5,   which   is 
claimed to be in breach of the Plaintiff's right to specific performance of 
the   suit   agreement   for   sale,   the   Plaintiff   has   taken   out   the   present 
Chamber Summons.  Having regard to the fact that creation of rights by 
Defendant No.1 in favour of Defendant No.5 has already been impugned 
in the present suit, with a view to effectively grant relief to the Plaintiff, 
it   is   necessary   that   the   present   amendment   proposed   by   the   Plaintiff 
ought   to   be   allowed.   In   the   peculiar   facts   and   circumstances   of   the 
                                                                                                                             
present case,   it is in the fitness of things that this Court exercises its 
discretion  to allow the  amendment in  favour of  the  Plaintiff.   If  such 
amendment is not allowed, even if the Plaintiff were to succeed in its 
challenge to creation of rights by Defendant No.1 in favour of Defendant 
No.5, in the absence of the present amendment, no effective relief can be 
granted to  the  Plaintiff.    Accordingly,  the  present  Chamber  Summons 
deserves to be allowed.
The reliance placed by the learned Counsel for Defendant 
8.

No.5 on the judgments of the Supreme Court in the cases of  Radhika 
Devi, Shivgopal Sah and Ashutosh Chaturvedi(supra),  is besides the 
point.   These cases affirm the proposition that the amendment of the 
plaint is not granted normally when accrued rights are taken away by 
amendment   of   the   pleadings,   though   in   an   exceptional   case,   even 
according to these judgments, there is a discretion in the Court to allow 
the amendment.   Secondly, what these cases affirm is that by allowing 
the amendment, the rights created in favour of the Defendant by lapse of 
time would stand defeated and that such a course is not permissible.  As 
held by me above, having regard to the peculiar facts and circumstances 
of the case, the exercise of discretion to allow the amendment ought to 
be exercised in this case in favour of the Plaintiff.  As long as the issue of 
limitation   is   kept   open,   as   is   done   in   the   order   of   this   Court   whilst 
allowing the first amendment on 24 February 2014, it cannot be said 
that   an   accrued   right   in   favour   of   the   Defendant,   as   a   result   of     an 
intervening period of limitation, is taken away.   This right is certainly 
available   to     the   Defendant,   if   his   contentions   regarding   the   bar   of 
limitation are expressly kept open.  
                                                                                                                             
In this view of the matter, the Chamber Summons deserves 
9.
to be allowed.  Accordingly, the Chamber Summons is made absolute in 
terms   of   prayer   clauses   (a)   and   (b),   subject   to   the   plea   of   limitation 
being kept open.
10.
Amendment to be carried out within a period of two weeks 
The   amended   copy   of   the   plaint   to   be   served   on   the 

11.
from today.
12.
Defendants.
Defendants   will   have   liberty   to   file   a   further   written 
( S.C. GUPTE, J. ) 
statement, if any.
                                                                                                                             

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