IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH MONDAY, THE 6TH NOVEMBER 2008 / 15TH KARTHIKA 1930 WP(C).No. 25770 of 2008(P) -------------------------- ORDER IN IA NO.3224/2007 IN OS NO.321/1999 OF FIRST ADDITIONAL SUB COURT, KOZHIKODE. PETITIONER(S): --------------- M.K.MICHAEL, AGED 56 YEARS, S/O. K.K.KURUVILLA, MALIAKKEL HOUSE, NEENDOOR, KOTAYAM. BY ADV. SRI.M.J.THOMAS RESPONDENT(S): --------------- 1. THE COTTANAD PLANTATION LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR M.P.CHERIYAN, S/O.P.C.POTHEN, BEACH ROAD, NAGARAM AMSOM, KOZHIKODE POST BOX NO.1117, KOZHIKODE 673032. 2. THE FEDERAL BANK LTD., REPRESENTED BY ITS BRANCH MANAGER, KOTTAYAM. ADV. SRI.A.ANTONY FOR R2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30/10/2008, THE COURT ON 06/11/2008 DELIVERED THE FOLLOWING: APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE PLAINT IN OS NO.321/1999 OF THE SUB COURT, KOZHIKODE EXT.P2 TRUE COPY OF THE WRITTEN STATEMENT OF THE FIRST DEFENDANT IN EXT.P1 SUIT EXT.P3 -DO- BY SECOND DEFENDANT EXT.P4 TRUE COPY OF THE IA NO.3224/2007 FOR AMENDMENT OF THE PLAINT EXT.P5 TRUE COPY OF THE COUNTER TO EXT.P4 FILED BY THE FIRST RESPONDENT EXT.P6 -DO- BY SECOND RESPONDENT EXT.P7 TRUE COPY OF THE ORDER DATED 21.5.2008 IN EXT.P4 AMENDMENT PETITION EXT.P8 TRUE COPY OF THE JUDGMENT IN CMA NO.303/1999 DATED 14.12.1999 OF THIS COURT //TRUE COPY// THOMAS P. JOSEPH, J. -------------------------------------- W.P.(C) No.25770 of 2008 P -------------------------------------- Dated this the 6th day of November, 2008. JUDGMENT Ext.P7, order dated 21.5.2008 in I.A.No.3224 of 2007 in O.S.No.321 of 1999 of the Court of learned First Additional Sub Judge, Kozhikode is under challenge in this proceeding. 2. Heard both sides. 3. Point for consideration is whether the court below should have allowed the amendment prayed for. 4. Petitioner sued the first respondent/first defendant for recovery of damages to the tune of Rs.19,87,500/- with interest and cost, prohibitory injunction against the first respondent enforcing the bank guarantee dated 27.4.1999 issued by the second respondent/second defendant in favour of first respondent for and on behalf of the petitioner and prayed that if for any reason the court found that the sum of Rs.12 lakhs (covered by the bank guarantee) remain as balance as per the agreement, that amount be deducted from the sum of Rs.19,87,5000/- and allowing the petitioner to realise the balance sum of Rs.7,87,500/-. Second respondent was made a party in the suit since the second respondent had issued the bank guarantee for and on behalf of the petitioner in favour of first respondent. Suit was instituted in the year 1999. WP(C) No.25770/2008 2 While so, petitioner filed Ext.P4, application (I.A.No.3224 of 2007) for amendment of the plaint to the effect that respondents now set up a case of disbursement of the amount covered by the bank guarantee, that disbursement is in violation of the order issued by the court on 15.12.1999 and hence, the first respondent and , if found liable the second respondent may be directed to pay the petitioner the said sum of Rs.12 lakhs with future interest. That application was resisted by the respondents on the ground that the relief sought to be incorporated by amendment is hopelessly barred by limitation and that no justifiable reason is stated for the long delay in filing the application. Learned Sub Judge vide Ext.P7, order dated 21.5.2008 disallowed the prayer for amendment. The main reason for dismissal is that the application is not supported by bona fides and that it is filed after the expiry of period of limitation. Learned counsel for petitioner contended that it was the events that occurred during the pendency of the suit that compelled the petitioner to seek amendment of the plaint. It is also contended that the amendment if allowed will not cause any prejudice to the respondents as no enhancement of the claim is involved. Further contention is that if at all the respondents have a contention that the relief sought to be incorporated is time barred, court below could have directed that the amendment would take effect only from the date the amendment is carried out. Learned counsel placed reliance on the decisions in Pankaja & another v. Yellappa (D) by L.Rs. and Others (2004 (2) KLJ 660), Bhaskaran Nair v. Chandramathiyamma (2006 (1) KLT 533) and Puran Ram v. Bhaguram (2008 (4) KLT 233). Counsel for respondents reiterated their WP(C) No.25770/2008 3 objection to the application and placed reliance on the decisions in Shiv Gopal Sah v. Sita Ram Saraugi (AIR 2007 SC 1478), Ashutosh Chaturvedi v. Prano Devi( AIR 2008 SC 2171) and Chander Kanta Bansal v. Rajinder Singh Anand (AIR 2008 SC 2234). 5. To understand the rival contentions, it is necessary to go into the plaint averments and the events that occurred subsequent to the institution of the suit. According to the petitioner, he had an agreement with the first respondent for cutting and removal of rubber trees for a total consideration of Rs.36 lakhs. He paid Rs.24 lakhs to the first respondent and for the balance sum of Rs.12 lakhs, second respondent issued bank guarantee to the first respondent on his behalf. First respondent had made him believe that the rubber trees are of 1962 plantation but, he later learned that the rubber trees are very old trees and hence he could not use it as timber for plywood. On account of that misrepresentation of first respondent, he suffered loss to the tune of Rs.19,87,500/- which he wanted to recover from the first respondent. It is in respect of the said bank guarantee covering Rs.12 lakhs that petitioner prayed for decree of prohibitory injunction against the first respondent encashing the same. Petitioner also claimed that the bank guarantee is rendered void on account of the abovesaid misrepresentation of the first respondent and hence, first respondent cannot enforce the same. It is further averred in the plaint that even if it is found that Rs.12 lakhs covered by the bank guarantee is to be reckoned, petitioner is entitled to realize Rs.7,87,500/- by way of damages from WP(C) No.25770/2008 4 the first respondent. In paragraph 16 of the plaint (Ext.P1), petitioner claimed that cause of action arose for the suit on the date of execution of the agreement between himself and first respondent, on 12.3.1999 when the second respondent issued the bank guarantee in favour of the first respondent, when the bank guarantee was extended upto 10.10.1999 and thereafter when the petitioner suffered damages. Petitioner also filed an application for temporary injunction against the first respondent encashing the bank guarantee. Interim injunction was granted by the learned Sub Judge. The order of interim injunction was later vacated on 6.12.1999. Petitioner filed C.M.Appeal No.303 of 1999 in this Court against the first respondent. A Division Bench of this Court as per Ext.P8, judgment dated 14.9.1999 refused to interfere with the order of the learned Sub Judge. Division Bench observed that suit is essentially one for realisation of the damages for breach of contract from first respondent, what the petitioner claimed is remission (of Rs.12 lakhs covered by the bank guarantee) in the total amount of damages claimed by him and hence, learned Sub Judge was justified in holding that no case for granting temporary injunction against enforcement of the bank guarantee is made out and that remedy of the petitioner if any, was by way of attachment under Order XXXVIII Rule 5 of the Code of Civil Procedure (for short, ’the Code’). It is seen from Ext.P8, judgment that at the time the appeal came up for hearing on 14.12.1999, counsel for petitioner informed the court that petitioner has already moved an application in the trial court under Order XXXVIII Rule 5 of the Code and it is accordingly that C.M.Appeal was disposed of. WP(C) No.25770/2008 5 6. On 14.12.1999 petitioner moved the trial court with an application under Order XXXVIII Rule 5 of the Code. Learned Sub Judge posted the application to be called on 15.12.1999. On 15.12.1999 respondents were directed to maintain status quo regarding the bank guarantee. According to the petitioner, inspite of that order second respondent disbursed the amount covered by the bank guarantee to the first respondent. Petitioner filed I.A.No.4017 of 2007 to prosecute the respondents for disobeyance of the order of status quo dated 15.12.1999. Respondents, in reply to that allegation claimed that the bank guarantee was encashed on 15.12.1999 but, before 11 a.m. (before the order of status quo was passed). 7. It is in the above circumstances that petitioner filed Ext.P4, application for amendment on 17.8.2007. That application concededly is filed five years and eight months after the expiry of period of limitation, if period of limitation is computed from 15.12.1999. It is in view of that, respondents contended that the application for amendment incorporating the prayer is hopelessly barred by limitation. 8. Now, I shall refer to the decisions relied on by counsel on both sides. In Pankaja & another v. Yellappa (D) by L.Rs. and others, Hon’ble Supreme Court observed that even if the relief sought to be incorporated by amendment is barred by limitation, court can allow the application in appropriate cases if that subserves the cause of justice and avoids further litigation. It was held that there is no absolute rule that in every case where a relief is barred because of limitation, an amendment should not be allowed. WP(C) No.25770/2008 6 Discretion in such cases depended on the facts and circumstances of the case. In Bhaskaran Nair v. Chandramathiyamma, a learned Single Judge of this Court after referring to the various decisions of the Apex Court observed that the application for amendment should be allowed if there is no material inconsistency between the original averments and those proposed by the amendment. The applications moved at proper stage and not unduly delayed should not normally be rejected. 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 application. But that is a factor to be taken into account in exercise of the discretion as to whether the amendment should be ordered or not. In a case where the relief sought through amendment of plaint would be barred by limitation, the plea of limitation could be made the subject matter of an issue after allowing the amendment prayed for. It is open to the court ordering amendment to specify that the amendment will not relate back to the date of plaint so as to affect the defence of limitation available to the defendant. In Puran Ram v. Bhaguram also the Apex Court held that court may in its discretion, allow an application for amendment of plaint even where the relief sought to be added by amendment is allegedly barred by limitation. In Shiv Gopal Sah v. Sita Ram Saraugi relied on by the learned counsel for respondents, application for amendment was belated by about 15 years. There was no explanation for the delay. The prayer was disallowed. In Ashutosh Chaturvedi v. Prano Devi , amendment was sought after 13 years. In the facts and circumstances of the case the prayer for amendment was WP(C) No.25770/2008 7 disallowed. In Chander Kanta Bansal v. Rajinder Singh Anand, amendment was prayed for after trial commenced. Referring to the proviso to Order VI Rule 17 of the Code, it was held that in the absence of due diligence, petitioner cannot ask for amendment after commencement of trial and the prayer was disallowed. 9. Going by the decisions referred supra, the question whether amendment has to be allowed or not should depend on the facts and circumstances of the case. There is no hard and fast rule that a relief sought to be incorporated by amendment if barred by limitation should be disallowed. In appropriate cases, it is open to the court to allow amendment but, without prejudice to the right of the opposite party to take up the plea of limitation. Decisions relied on by learned counsel for respondents can be distinguished on facts. In Ashutosh Chaturvedi v. Prano Devi it was found that the amendment prayed for if allowed would change the nature and scope of the suit and even the cause of action. There, the suit for declaration of title, confirmation of possession and setting aside sale deed was filed on or about 21.5.1990. It was found that Section 22(2) of the Hindu Succession Act stood in the way of the plaintiff seeking amendment of the nature prayed for. That also was a reason for disallowing amendment. In Shiv Gopal Sah v. Sita Ram Saraugi, plaintiff had several opportunity to amend the plaint. In fact, the suit was even posted for necessary amendment. Those opportunities were not availed by the plaintiff and the transactions sought to be impugned by amendment were rendered prior to the institution of the suit. Hon’ble Supreme Court refused to allow amendment. WP(C) No.25770/2008 8 10. In this case, it is not as if the petitioner is attempting to make a claim altogether separate from what is already pleaded in the plaint. Petitioner had claimed in the plaint that the bank guarantee cannot be encashed by the first respondent for the reasons stated in the plaint. It is also stated in the plaint that the bank guarantee is rendered void by misrepresentation on the part of the first respondent and hence the first respondent cannot encash the same. If at all the amount covered by bank guarantee is to be reckoned, that amount is to be adjusted in the total claim for Rs.19,87,500/- and the petitioner wanted to realise the balance sum of Rs.7,87,500/- . That was only an alternate relief prayed for in the suit. What transpired subsequent to the filing of the suit is that the first respondent encashed the bank guarantee, and that required the petitioner to seek the amendment. I am inclined to think that it is not as if the petitioner is introducing by amendment something that is totally unconnected not connected with the averments in the plaint. Amendment sought for is based on subsequent events. 11. It is true that in Ext.P4 application, petitioner has not explained the reason for the delay in filing that application. But, in considering whether that delay should disentitle the petitioner for the amendment prayed for, I am also to consider whether the delay has resulted in any prejudice to the respondents. Both the respondents are parties to the suit and the events that happened subsequent to the suit are within their knowledge and from their part. Hence the mere delay in filing the application cannot be said to have prejudiced the respondents particularly as trial of the suit has not commenced. Hence, the WP(C) No.25770/2008 9 delay in filing the application can be set at right by directing the petitioner to pay cost to the respondents. 12. On the question of limitation pleaded by the respondents, the decisions relied on by learned counsel for petitioner and discussed above would indicate that even if the relief sought to be introduced by amendment is barred by limitation, that by itself does not disentitle the person concerned from seeking amendment. In Kunheedu v. Marakkar and others (1981 (1) KLJ 92) Honourable K.T.Thomas, J. (as His Lordship then was) held that if the facts constituting the claim were pleaded already, court is justified in allowing the amendment even if it introduced a new cause of action or new relief. In this case I have stated the circumstances under which the application for amendment was filed. Moreover, to protect the interest of the respondents, it is sufficient to direct that the amendment when carried out will not relate back to the date of the plaint so as to affect the defence of limitation available to the respondents. 13. In the light of what is stated above, I am inclined to think that the court below has not considered the request for amendment in the correct perspective taking into account the events that happened subsequent to the filing of the suit which necessitated the amendment. In the circumstances, court below ought to have allowed the amendment prayed for. Resultantly, this Writ Petition is disposed of in the following lines:- Ext.P7 order will stand set aside and Ext.P4 application for amendment will stand allowed on condition that the petitioner deposited in the WP(C) No.25770/2008 10 court below for payment to the respondents cost of Rs.5,000/- (Rupees Five thousand only) each within three weeks from this day failing which, this Writ Petition will stand dismissed in confirmation of the order under challenge. Petitioner shall carry out the amendment within two weeks from the date of deposit as aforesaid. It is made clear that the amendment if carried out will not relate back to the date of institution of the suit so as to affect the defence of limitation if any, available to the respondents. It will be open to the respondents to take up the plea that the cause of action and relief incorporated by amendment is barred by limitation. THOMAS P.JOSEPH, JUDGE. cks