LIFE INSURANCE CORPORATION OF INDIA Versus SANJEEV BUILDERS PRIVATE
LIFE INSURANCE CORPORATION OF INDIA Versus SANJEEV BUILDERS PRIVATE
Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5909 OF 2022
(Arising out of SLP(C) No. 22443 of 2019)
LIFE INSURANCE CORPORATION .…APPELLANT
OF INDIA
Versus
SANJEEV BUILDERS PRIVATE ….RESPONDENTS
LIMITED & ANR.
J U D G M E N T
J.B. PARDIWALA, J.
1. Leave granted.
2. This appeal is at the instance of a defendant in a suit filed by
the respondents herein (original plaintiffs) 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]
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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 the alternative, the plaintiffs have
also prayed for damages. The plaintiffs moved the Chamber
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Summons No. 854 of 2017, inter alia, seeking enhancement of the
amount towards damages on the grounds, more particularly, set out
in the affidavit filed in support of the said chamber summons.
4. The learned Single Judge of the High Court allowed the chamber
summons referred to above, vide the order dated 11.09.2018, keeping
the issue of limitation open and also permitting the defendant,
appellant herein, to file additional written statement.
5. The appellant herein preferred an appeal against the said order
which came to be dismissed vide the impugned order dated
13.12.2018.
6. Being aggrieved and dissatisfied with the impugned order
passed by the High Court referred to above, the appellant (original
defendant) is here before this Court with the present appeal.
SUBMISSIONS ON BEHALF OF THE APPELLANT
7. The learned senior counsel appearing for the appellant,
vehemently, submitted that the High Court committed a serious error
in passing the impugned order. He would submit that the High Court
overlooked the order passed by this Court in the Life Insurance
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Corporation of India v. Sanjeev Builders Pvt. Ltd. & Ors., (2018)
11 SCC 722 between the same parties, arising from the same suit
proceedings.
8. The learned counsel would submit that the High Court should
not have permitted the plaintiffs to amend the plaint after a period of
thirty-one years, more particularly, when the earlier amendment
seeking to implead the assignee as the plaintiff No. 3 in the suit was
declined by this Court vide the judgment and order dated 24.10.2017
passed in the Life Insurance Corporation of India (supra).
9. The learned counsel would submit that the High Court failed to
consider that the amendment was hit by the provisions of Order II
Rule 2 of the Civil Procedure Code, 1908 (for short, the ‘CPC’). He
would submit that the amendment could be said to be even hit by
the principle of constructive res judicata.
10. The learned counsel pointed out that at the time when the suit
came to be instituted, the damages to the tune of Rs. 1,01,00,000/-
[Rs. One Crore & One Lakh only] in the alternative was prayed for.
By way of amendment the damages now prayed for is to the tune of
Rs. 4,00,01,00,000/- [Rs. Four Hundred Crore & One Lakh only].
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11. In such circumstances referred to above, the learned counsel
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.
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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 learned counsel in the last submitted that the decision of
this Court rendered in the case of Life Insurance Corporation of
India (supra) between the same parties was altogether in a different
context. In the said appeal before this Court, the issue was whether
the assignee could have been impleaded as one of the plaintiffs in the
suit after a period of twenty-seven years from the date of institution
of the suit?
16. In such circumstances referred to above, the learned counsel
appearing for the plaintiffs prays that there being no merit in this
appeal, the same may be dismissed with costs.
ANALYSIS
17. Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the following questions
of law fall for the consideration of this Court:
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1. Whether the High Court committed any material
irregularity or jurisdictional error going to the root of the
matter in passing the impugned order?
2. Whether the provisions of Order II Rule 2 CPC can be
made applicable to an amendment application?
3. Whether the amendment of plaint for the purpose of
enhancing the amount towards damages could be said to
be hit by the doctrine of constructive res judicata?
4. Whether the judgment and order passed by a coordinate
Bench of this Court in the case of Life Insurance
Corporation of India (supra) between the same parties has
any bearing on the present appeal?
5. Whether the present appeal is covered by the proviso to
Section 21(5) and Section 22(2) resply of the Specific Relief
Act, 1963 (47 of 1963) (for short, ‘the Act 1963’)?
18. Before adverting to the rival contentions canvassed on either
side and before we deal with the orders passed by the High Court
permitting the plaintiffs to amend the plaint with respect to the
prayer clause, let us consider, the laws on the question of allowing
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or rejecting a prayer for amendment of the pleadings, more
particularly, when the plea of limitation was taken by one of the
parties.
19. It is well settled that the court must be extremely liberal in
granting the prayer for amendment, if the court is of the view that if
such amendment is not allowed, a party, who has prayed for such an
amendment, shall suffer irreparable loss and injury. It is also equally
well settled that there is no absolute rule that in every case where a
relief is barred because of limitation, amendment should not be
allowed. It is always 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….."
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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 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.
3. It is not disputed that the appellate court has a
coextensive power of the trial court. We find that the
discretion exercised by the High Court in rejecting the
plaint was in conformity with law.”
21. So far as the answer to the specific plea that the claim of
damages is barred by limitation and cannot be permitted at this stage
is concerned, it becomes necessary to examine the various judicial
pronouncements of this Court. The principles governing an
amendment which may be permitted even after the expiry of the
statutory period of limitation were laid down by the Privy Council in
its judgment in Charan Das & Ors. v. Amir Khan & Ors., AIR 1921
PC 50. In this case, the Privy Council laid down the principles thus:
“…..That there was full power to make the amendment
cannot be disputed, and though such a power should not
as a rule be exercised where its effect is to take away
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from a defendant a legal right which has accrued to him
by lapse of time, yet there are cases: see for
example Mohummud Zahoor Ali v. Rutta Koer, where
such considerations are outweighed by the special
circumstances of the case, and their Lordships are not
prepared to differ from the Judicial Commissioner in
thinking that the present case is one.”
22. It would be useful to also notice the observations of this Court
in, Pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil & 2
Ors., 1957 SCR 595 : AIR 1957 SC 363, wherein this Court
considered an objection to the amendment on the ground that the
same amounted to a new case and a new cause of action. In this case,
this Court laid down the principles which would govern the exercise
of discretion as to whether the court ought to permit an amendment
of the pleadings or not. This Court approved the observations of
Batchelor, J., in the case of Kisandas Rupchand & Anr. v.
Rachappa Vithoba Shilwant and Ors. reported in ILR (1909) 33
Bom 644, when he laid down the principles thus:
“10. …..“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
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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 appropriately
exercised in the interest of justice, the law of limitation
notwithstanding. But the exercise of such far-reaching
discretionary powers is governed by judicial
considerations and wider the discretion, greater ought to
be the care and circumspection on the part of the
Court…..”
24. Again in M/s Ganesh Trading Co. v. Moji Ram, (1978) 2 SCC
91, this Court laid down the principles thus:
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“4. It is clear from the foregoing summary of the main
rules of pleadings that provisions for the amendment of
pleadings, subject to such terms as to costs and giving of
all parties concerned necessary opportunities to meet
exact situations resulting from amendments, are intended
for promoting the ends of justice and not for defeating
them. Even if a party or its Counsel is inefficient in setting
out its case initially the shortcoming can certainly be
removed generally by appropriate steps taken by a party
which must no doubt pay costs for the inconvenience or
expense caused to the other side from its omissions. The
error is not incapable of being rectified so long as remedial
steps do not unjustifiably injure rights accrued.”
25. The principles applicable to the amendments of the plaint are
equally applicable to the amendments of the written statements. The
courts are more generous in allowing the amendment of the written
statement as question of prejudice is less likely to operate in that
event. The defendant has a right to take alternative plea in defense
which, however, is subject to an exception that by the proposed
amendment other side should not be subjected to injustice and that
any admission made in favor of the plaintiff is not withdrawn. All
amendments of the pleadings should be allowed which are necessary
for determination of the real controversies in the suit provided the
proposed amendment does not alter or substitute a new cause of
action on the basis of which the original lis was raised or defense
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taken. Inconsistent and contradictory allegations in negation to the
admitted position of facts or mutually destructive allegations of facts
should not be allowed to be incorporated by means of amendment to
the pleadings. The proposed amendment should not cause such
prejudice to the other side which cannot be compensated by costs.
No amendment should be allowed which amounts to or relates in
defeating a legal right accruing to the opposite party on account of
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
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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 than a different or
additional approach to the same facts, the amendment
will be allowed even after the expiry of the statutory
period of limitation:…..”
28. In entitled, G. Nagamma & Anr. v. Siromanamma & Anr.,
(1996) 2 SCC 25, this Court considered the proposed amendment of
the plaint and noticing that neither the cause of action would change
nor the relief would be materially affected, allowed the same. This
Court in this case noticed that in the plaintiff's suit for specific
performance, the plaintiff was entitled to plead even inconsistent
pleas and that in the present case, the plaintiffs were seeking only
the alternative reliefs. It appears that the plaintiffs had filed a suit for
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specific performance of an agreement of re-conveyance. By the
application under Order VI Rule 17 of the CPC for amendment of the
plaint, the appellants were pleading that the transactions of
execution of the sale deed and obtaining a document for reconveyance were single transactions viz. mortgage by conditional
sale. They also wanted to incorporate an alternative relief to redeem
the mortgage. At the end of the prayer, the plaintiff sought
alternatively to grant of a decree for redemption of the mortgage. This
amendment was permitted by this Court.
29. In Pankaja & Anr. v. Yellappa (dead) by lrs. & Ors., (2004)
6 SCC 415, this Court held that it was in the discretion of the court
to allow an application under Order VI Rule 17 of the CPC seeking
amendment of the plaint even where the relief sought to be added by
amendment was allegedly barred by limitation. The Court noticed
that there was no absolute rule that the amendment in such a case
should not be allowed. It was pointed out that the court's discretion
in this regard depends on the facts and circumstances of the case
and has to be exercised on a judicial evaluation thereof. It would be
apposite to notice the observations of this Court in this
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pronouncement in extenso. The principles were laid down by this
Court thus:
“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.
xxx xxx xxx
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16. This view of this Court has, since, been followed by a
three-Judge Bench of this Court in the case of T.N. Alloy
Foundry Co. Ltd. v. T.N. Electricity Board [(2004) 3 SCC
392]. 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.
xxx xxx xxx
18. We think that the course adopted by this Court
in Ragu Thilak D. John case [(2001) 2 SCC 472] 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.”
30. From the above, therefore, one of the cardinal 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
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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.
31. In Ragu Thilak D. John v. S. Rayappan & Ors., (2001) 2
SCC 472, 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.
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.
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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 property increased during the pendency of the suit.
According to plaintiffs' estimate, the value of the property
today can be estimated to be Rs. 400,01,00,000/- and if
the court is not inclined to grant specific performance,
then the damages which plaintiffs would suffer on
account of non performance by the defendants under the
agreement should be Rs. 400,01,00,000/-. Therefore,
there is already claim for damages but what plaintiffs are
seeking today is only enhancing the claim, of course
subject to provisions of Section 73 of the Contract Act.
6. Ms. Paranjape submitted that after 30 years, this
application is filed for enhancement and therefore, exfacie the increased amount is barred by limitation. Ms.
Paranjape submitted that though the settled position in
law is that courts are generally liberal with pre-trial
amendment, when ex-facie claim appears to be barred by
limitation, the court should not permit the amendment.
7. What one should keep in mind is this figure of Rs.
400,01,00,000/- can tomorrow go up or go down.
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Plaintiffs are only estimating it to be the amount which
according to plaintiffs, is the loss which they would
suffer. Whether that is the right estimate can be decided
only at the time of trial. Even in para 12 of the plaint
plaintiff has stated “…….suffered loss and damages
which they estimate at……….” In prayer clause-(b)(v)
plaintiff pray “…….. or such other sum as this Honourable
Court may deem just and proper……” Further, if this
figure of Rs. 1,01,00,000/- is not amended as prayed in
this Notice of Motion, defendant will object the attempt of
plaintiff to claim more as damages saying plaintiff cannot
go beyond what is averred in the plaint. Due to situation
beyond the control of plaintiff, this suit has remained
pending for almost 32 years. Chances of suffering greater
prejudice is more if the amendment is not allowed. It is
clarified that plaintiff will still have to prove every penny
it is claiming as damages.
xxx xxx xxx
10. Admittedly, the trial is yet to begun though issues
have been framed long ago.
11. In the circumstances, keeping open rights and
contentions of defendants to raise the issue of limitation
which the court will decide at the time of trial, Chamber
summons allowed in terms of prayer clause-(a) and
accordingly disposed.”
36. While affirming the aforesaid order, the High Court in Appeal (L)
No. 499 of 2018 held as under:
“4. Undisputedly, 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
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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
the High Court of Bombay dated 22.08.2014 in and by which the
Division Bench dismissed the appeal filed by the appellant herein Life
Insurance Corporation of India (for short, ‘LIC’) thereby affirming the
order of the Single Judge in the Chamber Summons No. 187 of 2014
by which the respondent No. 3 therein was impleaded as the plaintiff
No. 3 in the Suit No. 894 of 1986.
39. It appears from the pleadings, more particularly, the facts
recorded in the judgment rendered by the coordinate Bench that in
the year 2014, the respondent No. 3 therein, namely, the Kedia
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Construction Company Ltd. filed the Chamber Summons No. 187 of
2014 stating that subsequent to the filing of the suit for the specific
performance of contract, with the consent of the respondent No. 2,
plaintiff No. 1/respondent No. 1 had assigned its interest to the
respondent No. 3 for a consideration of Rs. 23,31,000/- by an
agreement for sale dated 24.08.1987. The chamber summons was
filed to implead the respondent No. 3 therein as the plaintiff No. 3
with a prayer to amend the plaint pursuant to the agreement of sale
in its favour. The appellant herein (LIC) had opposed the chamber
summons on the ground that the respondent No. 3 therein was not
a bona fide assignee or a necessary party and that the issues in the
suit were framed on 31.01.2014 and there had been an inordinate
delay on 27 years in filing the application which had not been
properly explained.
40. In the aforesaid set of facts, this Court while allowing the appeal
filed by the appellant herein (LIC) held as under:
“11. The stand of Respondent 3 is that it claims as an
assignee of the rights of Respondents 1 and 2 and that it
has the right to continue the suit under Order 22 Rule 10
CPC and the provisions of limitation, do not apply to such
an application. To appreciate merits of this contention, we
may usefully refer to Order 22 Rule 10 CPC, which reads
as under:
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Order 22 — Death, Marriage and Insolvency of Parties
“10. Procedure in case of assignment before
final order in suit.—(1) In other cases of an
assignment, creation or devolution of any
interest during the pendency of a suit, the suit
may, by leave of the court, be continued by or
against the person to or upon whom such
interest has come or devolved.
(2) The attachment of a decree pending an
appeal therefrom shall be deemed to be an
interest entitling the person who procured such
attachment 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 Respondent 3 to continue the
suit. From the filing of the suit in 1986, over the years,
valuable right of defence accrued to the appellant; such
valuable right of defence cannot be defeated by granting
leave to the third respondent to continue the suit in the
application filed under Order 22 Rule 10 CPC after 27
years of filing of the suit. The learned Single Judge was
24
not right in saying that impleading Respondent 3 as
Plaintiff 3 would cause no prejudice to the appellant and
that the issues can be raised at the time of trial.
13. In a suit for specific performance, application for
impleadment must be filed within a reasonable time.
Considering the question of impleadment of party in a suit
for specific performance after referring to various
judgments, in Vidur Impex and Traders (P) Ltd. v. Tosh
Apartments (P) Ltd. [Vidur Impex and Traders (P)
Ltd. v. Tosh Apartments (P) Ltd., (2012) 8 SCC 384 :
(2012) 4 SCC (Civ) 1] the Court summarised the principles
as under : (SCC p. 413, para 41)
“41. Though there is apparent conflict in the
observations made in some of the
aforementioned judgments, the broad principles
which should govern disposal of an application
for impleadment are:
41.1. The court can, at any stage of the
proceedings, either on an application made by
the parties or otherwise, direct impleadment of
any person as party, who ought to have been
joined as plaintiff or defendant or whose
presence before the court is necessary for
effective and complete adjudication of the issues
involved in the suit.
41.2. A necessary party is the person who ought
to be joined as party to the suit and in whose
absence an effective decree cannot be passed by
the court.
41.3. A proper party is a person whose presence
would enable the court to completely, effectively
and properly adjudicate upon all matters and
issues, though he may not be a person in favour
of or against whom a decree is to be made.
41.4. If a person is not found to be a proper or
necessary party, the court does not have the
jurisdiction to order his impleadment against the
wishes of the plaintiff.
25
41.5. In a suit for specific performance, the court
can order impleadment of a purchaser whose
conduct is above board, and who files
application for being joined as party within
reasonable time of his acquiring knowledge
about the pending litigation.
41.6. However, if the applicant is guilty of
contumacious conduct or 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 liberal
approach and amendments are to be allowed to avoid
multiplicity of litigations. We are conscious that mere
delay is not a ground for rejecting the amendment. But in
the case in hand, the parties are not rustic litigants; all
the respondents are companies and the dispute between
the parties is a commercial litigation. In such facts and
26
circumstances, the amendment prayed in the chamber
summons filed under Order 22 Rule 10 CPC ought not to
have been allowed, as the same would cause serious
prejudice to the appellant. In our view, the impugned
order, allowing Chamber Summons No. 187 of 2014 filed
after 27 years of the suit would take away the
substantial rights of defence accrued to the appellant and
the same cannot be sustained.
16. In the result, the impugned judgment [LIC v. Sanjeev
Builders (P) Ltd., 2014 SCC OnLine Bom 4811] is set
aside and the appeal is allowed. Chamber Summons No.
187 of 2014 in Suit No. 894 of 1986 stands dismissed.
No order as to costs.”
41. Thus, from the aforesaid, it is evident that a coordinate Bench
of this Court took the view that impleading the respondent No. 3
therein as the plaintiff No. 3 would cause a serious prejudice to the
appellant. This Court took the view that no explanation was offered
for an inordinate delay of twenty-seven years, which was overlooked
by the High Court. Even while allowing the appeal filed by the
appellant herein, the coordinate Bench of this Court observed that
mere delay would not be a ground for rejecting the amendment.
However, in the facts of the case, since the parties not being rustic
litigants and all the respondents therein being companies and the
dispute being a commercial litigation, the amendment could not have
been permitted after twenty-seven years of the suit, as it would take
27
away the substantial rights of defence accrued in favour of the
appellant (LIC).
42. We are of the view that the judgment and order passed by the
coordinate Bench of this Court in the Life Insurance Corporation
of India (supra) has no application so far as the present appeal is
concerned. The appellant herein cannot succeed in the present
appeal merely on the strength of the judgment and order passed by
this Court in the Life Insurance Corporation of India (supra).
ORDER II RULE 2 OF THE CPC
43. In the present appeal, the principal argument of the learned
counsel appearing for the appellant is that the amendment
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.
28
(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 respectively to constitute but one cause of
action.
Illustration
A lets a house to B at a yearly rent of Rs. 1200. The rent
for the whole of the years 1905, 1906 and 1907 is due
and unpaid. A sues B in 1908 only for the rent due for
1906. A shall not afterwards sue B for the rent due for
1905 or 1907."
45. The expressions "omits to sue" and "intentionally relinquish any
portion of his claim" give an indication as to the intention of the
legislature in framing the said rule. The term 'sue' can mean both the
filing of the suit and prosecuting the suit to its culmination,
depending on the context of the provision. In the present case, the
legislature thought it fit to debar a plaintiff from suing afterwards for
any relief which he/she has omitted without the leave of the court or
from suing in respect of any portion of his claim which he
29
intentionally relinquishes. Order II Rule 2(1) provides that every suit
shall include the whole of the claim which the plaintiff is entitled to
make in respect of the cause of action.
46. The provision of Order II Rule 2 of the CPC has been well
discussed by the Privy Council in the case of Mohd. Khalil Khan &
Ors. v. Mahbub Ali Mian & Ors., AIR 1949 PC 78, held as under:
“The principles laid down in the cases thus far discussed
may be thus summarized :
(1.) the correct test in cases falling under Or. 2, r. 2, is
“whether the claim in the new suit is, in fact, founded on
a cause of action distinct from that which was the
foundation for the former suit.” (Moonshee Buzloor
Ruheem v. Shumsoonnissa Begum.) (2.) The cause of
action means every fact which will be necessary for the
plaintiff to prove, if traversed, in order to support his right
to the judgment. (Read v. Brown.) (3.) If the evidence to
support the two claims is different, then the causes of
action are also different. (Brunsden v. Humphrey.) (4.)
The causes of action in the two suits may be considered
to be the same if in substance they are identical.
(Brunsden v. Humphrey.) (5.) The cause of action has no
relation whatever to the defence that may be set up by
the defendant, nor does it depend on the character of the
relief prayed for by the plaintiff. It refers “to the media
upon which the plaintiff asks the Court to arrive at a
conclusion in his favour.” (Muss. Chand Kour v. Partab
Singh.) This observation was made by Lord Watson in a
case under s. 43 of the Act of 1882 (corresponding to Or.
2, r. 2), where plaintiff made various claims in the same
suit.”
30
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 Plaintiff had
in law a right to apply for an amendment before the
conclusion of his suit, it cannot be said that any rights of
the Respondent in the Pabna suit are affected. Such a
contention is based on the erroneous assumption that
nothing could be done by way of amendment of the
Calcutta suit to remove the objection that the claims on
the previous mortgage or charge were not sustainable. A
case would fall within Or. II, r. 2, only if a Plaintiff fails to
apply for amendment before decree, and then brings
another suit. The Plaintiffs are not doing that but asking
for amendment in the one and only suit they have
brought. This is, therefore, not a case in which the
amendment either affects rights to the other party, or
otherwise prejudices him."
(emphasis supplied)
31
48. A Constitution Bench of this Court, considering the scope and
applicability of Order II Rule 2 of the CPC, in the case of Gurbux
Singh v. Bhooralal, AIR 1964 SC 1810, held as under:
“6. In order that a plea of a Bar under Order 2 Rule 2(3)
of the Civil Procedure Code should succeed the defendant
who raises the plea must make out; (i) that the second
suit was in respect of the same cause of action as that on
which the previous suit was based; (2) that in respect of
that cause of action the plaintiff was entitled to more than
one relief; (3) that being thus entitled to more than one
relief the plaintiff, without leave obtained from the Court
omitted to sue for the relief for which the second suit had
been filed. From this analysis it would be seen that the
defendant would have to establish primarily and to start
with, the precise cause of action upon which the previous
suit was filed, for unless there is identity between the
cause of action on which the earlier suit was filed and
that on which the claim in the latter suit is based there
would be no scope for the application of the bar. No doubt,
a relief which is sought in a plaint could ordinarily be
traceable to a particular cause of action but this might, by
no means, be the universal rule. As the plea is a technical
bar it has to be established satisfactorily and cannot be
presumed merely on basis of inferential reasoning. It is
for this reason that we consider that a plea of a bar under
Order 2 Rule 2 of the Civil Procedure Code can be
established only if the defendant files in evidence the
pleadings in the previous suit and thereby proves to the
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
32
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 came in as an adjunct. However, Gurbux
Singh (supra) makes it clear that the bar of Order II Rule 2 of the
CPC applies only to the subsequent suits.
50. In the light of the principles discussed and the law laid down by
the Constitution Bench as also the other decisions discussed above,
we are of the view that if the two suits and the relief claimed therein
are based on the same cause of action then the subsequent suit will
become barred under Order II Rule 2 of the CPC. However, we do not
find any merit in the contention raised on behalf of the appellant
herein that the amendment application is liable to be rejected by
applying the bar under Order II Rule 2 of the CPC. Order II Rule 2 of
33
the CPC cannot apply to an amendment which is sought on an
existing suit.
51. In the aforesaid context, we may refer to with approval a
decision rendered by the High Court of Delhi in the case of Vaish
Cooperative Adarsh Bank Ltd. v. Geetanjali Despande & Ors.,
(2003) 102 DLT 570. Paras 17 and 18 resply indicate that the bar
under Order II Rule 2 of the CPC is only for a subsequent suit. These
paras read as under:
"17. Reverting to the preliminary objections raised by the
appellant against the maintainability of the application
for amendment, one would come across with a peculiar
plea of proposed amendment being barred under Order II
Rule 2 CPC. General rule enacted under Order II Rule 2.(1)
CPC is that every suit must include the whole of the claim
which the plaintiff is entitled to make in respect of the
cause of action. Order II Rule 2.(2) precludes a
subsequent suit on any part of claim, which had been
omitted or intentionally relinquished by the plaintiff in an
earlier suit based on the same cause of action. Similarly,
where the plaintiff is entitled to more than one relief in
respect of the same cause of action but omits, except with
the leave of the court, to sue for all such reliefs, he is
debarred in view of the Order II Rule 2(3) CPC from suing
afterwards for any relief so omitted.
18. A plea of bar under Order II Rule 2 CPC is
maintainable only if the defendant makes out (i) that the
cause of action of the second suit is the same on which
the previous suit was based, (ii) that in respect of that
cause of action, the plaintiff was entitled to more than one
relief and (iii) that the plaintiff without leave obtained
34
from the Court omitted to sue earlier for the relief for
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 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.
35
SPECIFIC RELIEF ACT, 1963
53. The above takes us now to consider the proviso to Section 21(5)
and Section 22(2) of the Act 1963.
54. The Act 1963 contemplates that in addition to or in substitution
of a claim for performance, a plaintiff is entitled to claim
compensation. Section 21 of the Act 1963 provides as follows:
“21. Power to award compensation in certain cases.
–(1) In a suit for specific performance of a contract, the
plaintiff may also claim compensation for its breach [in
addition to] such performance.
(2) If, in any such suit, the court decides that specific
performance ought not to be granted, but that there is a
contract between the parties which has been broken by
the defendant, and that the plaintiff is entitled to
compensation for that breach, it shall award him such
compensation accordingly.
(3) If, in any such suit, the court decides that specific
performance ought to be granted, but that it is not
sufficient to satisfy the justice of the case, and that some
compensation for breach of the contract should also be
made to the plaintiff, it shall award him such
compensation accordingly.
(4) In determining the amount of any compensation
awarded under this section, the court shall be guided by
the principles specified in section 73 of the Indian
Contract Act, 1872 (9 of 1872).
(5) No compensation shall be awarded under this
section unless the plaintiff has claimed such
compensation in his plaint:
36
Provided that where the plaintiff has not claimed any
such compensation in the plaint, the court shall, at any
stage of the proceeding, allow him to amend the plaint on
such terms as may be just, for including a claim for such
compensation.
Explanation.-The circumstances that the contract has
become incapable of specific performance does not
preclude the court from exercising the jurisdiction
conferred by this section.”
55. Under sub-section (2) of Section 21, the court is empowered to
award compensation for breach where it holds that there is a contract
between the parties which was broken by the defendant but in the
event, it decides that specific performance ought not to be granted.
Sub-section (3) of Section 21 empowers the court to grant
compensation for breach in addition to 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
37
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.-(1) Notwithstanding
anything to the contrary contained in the Code of Civil
Procedure, 1908, (5 of 1908), any person suing for the
specific performance of a contract for the transfer of
immovable property may, in an appropriate case, ask for-
(a) possession, or partition and separate possession,
of the property, in addition to such performance;
or
(b) any other relief to which he may be entitled,
including the refund of any earnest money or
deposit paid or (made by) him, in case his claim
for specific performance is refused.
(2) No relief under clause (a) or clause (b) of sub-section
(1) shall be granted by the Court unless it has been
specifically claimed:
Provided that where the plaintiff has not claimed any
such relief in the plaint, the Court shall, at any stage of
the proceeding, allow him to amend the plaint on such
terms as may be just for including a claim for such relief.
38
(3) The power of the Court to grant relief under clause
(b) of sub-section (1) shall be without prejudice to its
powers to award compensation under section 21."
58. 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 has been specifically claimed. However, the proviso
requires that the court shall at any stage of the proceedings allow the
plaintiff to amend the plaint to claim such relief where it has not been
originally claimed on such terms which may appear just.
THE SPECIFIC RELIEF (AMENDMENT) ACT, 2018
59. The Act 1963 was amended in the year 2018 and in Section 21
of the Principal Act, in sub-section (1) the words “either in addition
39
to, or in substitution of” were deleted and the words “in addition to”
were substituted in their place. As a result, damages are now
available only in addition to specific performance and not in lieu
thereof. This is a consequence of other amendments to the Act 1963
whereby the amending act has 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:
40
“If once we accept the legal position that neither a
contract for sale nor a decree passed on that basis
for specific performance of the contract gives any
right or title to the decree-holder and the right and
the title passes to him only on the execution of the
deed of sale either by the judgment-debtor himself or
by the Court itself in case he fails to execute the sale
deed, it is idle to contend that a valuable right had
accrued to the Petitioner merely because a decree
has been passed for the specific performance of the
contract. The limitation would start against the
decree-holders only after they had obtained a sale in
respect of the disputed property. It is, therefore,
difficult to accept that a valuable right had accrued
to the judgment-debtor by lapse of time. Section 22
has been enacted only for the purpose of avoiding
multiplicity of proceedings which the law Courts
always abhor.” (At para 21 page 825)
10. The same view was taken by the Supreme Court in a
later judgment in Jagdish Singh v. Natthu Singh, (1992) 1
SCC 647 : AIR 1992 SC 1604:
“So far as the proviso to sub-section (5) is concerned,
two positions must be kept clearly distinguished. If
the amendment relates to the relief of compensation
in lieu of or in addition to specific performance where
the plaintiff has not abandoned his relief of specific
performance the Court will allow the amendment at
any stage of the proceeding. That is a claim for
compensation falling under section 21 of the Specific
Relief Act, 1963 and the amendment is one under the
proviso to sub-section (5). But different and less
liberal standards apply if what is sought by the
amendment is the conversion of a suit for specific
performance into one for damages for breach of
contract in which case section 73 of the Contract Act
is invoked. This amendment is under the discipline
of R.17, 0.6, C.P.C. The fact that sub-section (4) in
turn, invokes section 73 of the Contract Act for the
principles of quantification and assessment of
41
compensation does not obliterate this distinction.” (At
para 10 page 1608)
In the decision in Shamsu Suhara Beevi (supra), while
holding that the High Court had erred in granting
compensation under section 21, in addition to the relief of
the specific performance in the absence of a prayer to that
effect, the Supreme Court held that a prayer could have
been made to that effect either in the plaint or by
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 as to
whether the cause of action is within limitation would
have to be determined and adjudicated upon. While
allowing an amendment, it is always open to a Civil Court
to direct that the amendment shall not relate back to the
institution of the proceeding. The Court would therefore
have to determine at trial whether the cause of action is
within limitation or is barred. Where the legislature has
contemplated that the plaint can be amended at any
stage of the proceeding as stipulated in the provisos to
42
section 21(5) and section 21(2). Such an amendment of
the nature contemplated by those provisions can indeed
be brought about at any stage of the proceedings."
(emphasis supplied)
61. In the case of B.K. Narayana Pillai v. Parameswaran Pillai
& Anr., (2000) 1 SCC 712 relying upon the cases of A.K. Gupta
(supra) and Ganesh Trading Co. (supra), this Court held that the
court should adopt a liberal approach in the matter of amendment
and only when the other side had acquired any legal right due to
lapse of time, the amendment should be declined. It has been held
as follows:
“…..All amendments of the pleadings should be allowed
which are necessary for determination of the real
controversies in the suit provided the proposed
amendment does not alter or substitute a new cause of
action on the basis of which the original lis was raised or
defence taken. Inconsistent and contradictory allegations
in negation to the admitted position of facts or mutually
destructive allegations of facts should not be allowed to
be incorporated by means of amendment to the pleadings.
Proposed amendment should not cause such prejudice to
the other side which cannot be compensated by costs. No
amendment should be allowed which amounts to or
results in defeating a legal right accruing to the opposite
party on account of lapse of time. The delay in filing the
petition 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.”
43
62. In Jagdish Singh v. Natthu Singh, reported in (1992) 1 SCC
647 : AIR 1992 SC 1604, this Court had the occasion to deal with the
provisions of Section 21 of the Act 1963. While analysing the
aforesaid provisions, this Court laid down that if the amendment
relates to the relief of compensation in lieu of or in addition 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
44
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 1963 is clear and made so more by the ratio of
the aforesaid decision of this Court.
64. The plaintiffs in the original plaint claimed for compensation in
addition to a decree for specific performance of the agreement to sell.
Therefore, strictly speaking the provisions of Section 21 of the Act
1963 are not attracted to the facts of the present case. The intention
of the plaintiffs in seeking for amendment of the plaint appears to be
to get an enhanced amount of compensation than what was originally
claimed in the original plaint which was restricted only to Rs.
1,01,00,000/-. The aforesaid intention becomes apparent when the
averments made in the application praying for amendment are looked
into inasmuch as, the plaintiffs have stated that in view of the fact
that in last 30 years there had been a tremendous escalation of the
value of the suit property which has an adverse effect on the quantum
of damages, compensation, relief sought for the breach of contract by
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the appellant/defendant. According to the plaintiffs the raising of the
amount of compensation to Rs. 400,01,00,000/- from Rs.
1,01,00,000/- as claimed in the original plaint has been necessitated
in view of undue delay in the prosecution of the suit which was not
earlier foreseen, which in turn has caused more damage to the
plaintiffs through the years and therefore, they have sought to raise
the amount of compensation to the present value as stated above
from Rs. 1,01,00,000/-.
65. However, the argument of the learned counsel appearing for the
appellant in regard to the two provisos referred to above, is quite
curious. The argument is that the power of the court to permit the
plaintiff to amend the plaint in a suit filed for the specific
performance of contract flows from Sections 21 and 22 resply of the
Act, 1963 & the proviso to the sub-section (5) of Section 21 of the Act
1963 may entitle the plaintiff to amend the plaint, provided the
plaintiff has inadvertently or otherwise omitted to pray for
compensation. The argument proceeds on the footing that in the
present case, as the plaintiff specifically prayed for compensation in
the plaint, later if he seeks to amend that part of the relief, the sub-
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section (5) of Section 21 of the Act 1963 would be an embargo for the
court to do so. We do not find any merit in this argument of the
learned counsel appearing for the appellant.
66. The two provisos referred 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
47
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, therefore, clear that to such a suit the provisions contained in
Order VI Rule 17 of the CPC would apply and a plaintiff who has
earlier failed to incorporate the reliefs for compensation or who has
incorporated the reliefs for compensation but seeks amendment in
the same, could seek the permission of the court to introduce these
reliefs by way of amendment.
67. It is important to note that sub-section (5) of Section 21 of the
Act 1963 was originally introduced to resolve the confusion over
whether the court had the power to grant compensation in a claim
for specific performance in absence of any pleading to that effect
under the provisions of the Act 1963. Prior to the enactment of the
Act 1963 the Law Commission in its 9th Law Commission Report
while referring to the diverse opinions expressed by the High Courts
recommended that in no case should compensation be decreed
unless it is claimed by a proper pleading.
68. In The Arya Pradeshak Pritinidhi Sabha, Sindh, Punjab &
Bilochistan v. Lahori Mal & Ors., (1924) 6 Lah LJ 286 : AIR 1924
48
Lah 713, the Lahore High Court had held that the court has the
power to award damages in substitution of or in addition to specific
performance even though the plaintiff has not specifically claimed the
same in its plaint and written submissions. As against, the Madras
High Court in Somasundaram Chettiar v. Chidambaram
Chettiar, AIR 1951 Mad 282 held that the court could not award
damages in absence of a specific claim for damages.
69. In Somasundaram Chettiar (supra), the Madras High Court
held that the rationale for not allowing a claim for damages in a suit
for specific performance without a specific pleading is based on the
principle that the plaintiff must establish its claim for damages and
the defendant must be put on notice and correspondingly have an
opportunity to adduce evidence that the damages claimed are
excessive or that the plaintiff has not suffered any damages.
70. Our final conclusions may be summed up thus:
(i) 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
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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.
(ii) All amendments are to be allowed which are
necessary for determining the real question in
controversy 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
50
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 dealing with a prayer for amendment of
pleadings, the court should avoid a hypertechnical
approach, and is ordinarily required to be liberal
especially where the opposite party can be
compensated by costs.
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(vi) Where the amendment would enable the court to
pin-pointedly consider the dispute and would aid in
rendering a more satisfactory decision, the prayer for
amendment should be allowed.
(vii) Where the amendment merely sought to introduce
an additional or a new approach without introducing
a time barred cause of action, the amendment is liable
to be allowed even after expiry of limitation.
(viii) Amendment may be justifiably allowed where it is
intended to rectify the absence of material particulars
in the plaint.
(ix) Delay in applying for amendment alone is not a
ground to disallow the prayer. Where the aspect of
delay is arguable, the prayer for amendment could be
allowed and the issue of limitation framed separately
for decision.
(x) Where the amendment changes the nature of the
suit or the cause of action, so as to set up an entirely
new case, foreign to the case set up in the plaint, the
amendment must be disallowed. Where, however, the
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amendment sought is only with respect to the relief in
the plaint, and is predicated on facts which are already
pleaded in the plaint, ordinarily the amendment is
required to be allowed.
(xi) Where the amendment is sought before
commencement of trial, the court is required to be
liberal in its approach. The court is required to bear in
mind the fact that the opposite party would have a
chance to meet the case set up in amendment. As
such, where the amendment does not result in
irreparable prejudice to the opposite party, or divest
the opposite party of an advantage which it had
secured as a result of an admission by the party
seeking amendment, the amendment is required to be
allowed. Equally, where the amendment is necessary
for the court to effectively adjudicate on the main
issues in controversy between the parties, the
amendment should be allowed. (See Vijay Gupta v.
Gagninder Kr. Gandhi & Ors., 2022 SCC OnLine Del
1897)
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71. In the overall view of the matter, we are convinced that we
should not disturb the impugned order passed by the Division Bench
of the High Court, affirming the order passed by the learned Single
Judge allowing the amendment application filed at the instance of
the plaintiffs.
72. In the result, this appeal fails and is hereby dismissed with no
order as to costs.
73. Pending application, if any, stands disposed of.
….…..…………………J.
(ANIRUDDHA BOSE)
…………………………J.
(J.B. PARDIWALA)
New Delhi;
September 1, 2022.
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