1 1 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL APPELLATE JURISDICTION CIVIL APPELLATE JURISDICTION WRIT PETITION NO.2897 OF 2006 Bharat Petroleum Corporation Ltd. having its registered office at Bharat Bhavan, 4&6, Currimbhoy Road, Ballard Estate, Mumbai 400 001. .. Petitioner. Vs. Precious Finance Investment Pvt. Ltd. having its office at C-221, Maker Chambers, V.Nariman Point, Mumbai 400 021. .. Respondent. Mr.S.R.Page for the petitioners. Ms.Rajini Iyer i/b Mr.K.D.Shah for the respondents. CORAM : D.B.BHOSALE, J. CORAM : D.B.BHOSALE, J. CORAM : D.B.BHOSALE, J. DATED : 20TH OCTOBER, 2006 DATED : 20TH OCTOBER, 2006 DATED : 20TH OCTOBER, 2006 JUDGMENT: JUDGMENT: JUDGMENT: . Heard learned counsel for the petitioners and the respondents. 2. The order dated 4.3.2006 rejecting the application for amendment of written statement under Order 6 Rule 17 of the Code of Civil Procedure (for short "CPC") passed by the learned Judge of the Small Causes Court at Mumbai, is now under challenge before this Court by way of the writ petition under Article 227 of the Constitution of India filed at the instance of the defendants-petitioners, hereinafter referred to as "the defendants". 2 2 2 3. The suit has been filed by the plaintiffs-respondent, hereinafter referred to as "the plaintiffs", on 11th November, 2003 against the defendants interalia contending that the plaintiffs required a suit premises i.e. plot of land bearing C.S.No.3/590 and 4/590 with the building standing thereon comprising seven flats or dwelling units, garage, covered spaces for car parks, servant quarters and compound, situate at L.Jagmohandas Marg, Mumbai, reasonably for their growing needs. It is further contended that the tenancy of the defendants has been terminated by notice dated 23.9.2003 and they are entitled to vacant possession of the suit premises from them. In the suit, besides the prayer for possession of the suit premises, the plaintiffs have also prayed for institution of an enquiry into mesne profits under Order 20, Rule 12 of the CPC and for final determination of the mesne profits payable to the plaintiffs. The defendants filed a written statement on 12th January, 2004 and prayed for dismissal of the suit with costs, being false, frivolous and vexatious. On 15.3.2004 issues were framed, and it appears, the evidence of the plaintiffs’ witness has already been recorded and while the suit was at the stage of evidence of the defendants being recorded, on 20th October, 2005 they have filed an application 3 3 3 seeking amendment of the written statement bearing interim notice no.414 of 2005 in T.E.& R.Suit No.257/279 of 2003. 4. The defendants sought to amend the written statement and add paragraph 13A contending therein that they are paying and have paid municipal taxes including Maharashtra Tax on larger premises in respect of the suit premises to the Bombay Municipal Corporation and have paid the same till 31.3.2005. On the basis thereof, the defendants have further contended in paragraph 13A that the payment of municipal taxes amounts to payment of rent and, therefore, the defendants having paid the municipal taxes in respect of the suit premises even after service of the notice to quit dated 23.9.2003 and filing of the suit without any objection by the plaintiffs amounts to waiver of the said notice to quit and since suit is based on that notice, it is not maintainable and liable to be dismissed. In the application, the defendants have specifically stated that the payment of taxes is being looked after by their administration department and the instructions to their advocate in the matter were given by the legal department and they were not aware about the payment of municipal taxes after termination notice dated 23.9.2003 when the written statement, filed on 4 4 4 12.1.2004, was being prepared. 5. The application seeking amendment was opposed by the plaintiffs interalia on two grounds. Firstly, the defendants have not offered satisfactory explanation to show that inspite of due diligence they could not have raised the matter before the commencement of trial. On the contrary, according to the plaintiff, the explanation offered in the application clearly show that whatever has been sought to be added, by way of an amendment, was within their knowledge and they could have very well stated so in the written statement. In other words, in view of the proviso added to Rule 17 of Order 6 of the Code of Civil Procedure, (for short "the CPC") once trial commences, such amendment cannot be allowed unless the party seeking an amendment satisfies the court that inspite of due diligence, the party could not have sought such amendment earlier. Secondly, it was opposed on the ground that the averments sought to be incorporated in the written statement clearly show that the application for amendment is not bonafide and the same is filed only with a view to delay hearing of the suit. 6. I have heard the learned counsel for the parties at length on the question whether in the face 5 5 5 of the proviso to Rule 17 of Order 6 of CPC, if the trial has commenced, the amendment could be allowed unless the party seeking an amendment satisfies the court that inspite of due diligence, it could not have raised the matter before the commencement of trial and whether the amendment sought in the present case deserves to be allowed by applying the said test. 7. Mr.Page, learned counsel for the defendants, at the outset, submitted that proviso added to Rule 17 of Order 6 by the Civil Procedure Code (Amendment) Act of 2002 (for short "Amendment Act 2002") cannot come in way of the court while dealing with an application for amendment if the amendment sought is found to be necessary for the purpose of determining the real questions in controversy between the parties. The trial Court has committed gross error of law in holding that the principles laid down by the Supreme Court or High Courts prior to the Amendment Act of 2002, which came in force on 1.7.2002, cannot be applied or taken recourse to while dealing with the application under Order 6 Rule 17, filed after 1.7.2002. He submitted that even if it is assumed that what the learned Judge has held is correct the explanation offerred in the application filed by the defendants is sufficient to hold that inspite of due diligence the plea they sought to introduce could not 6 6 6 have been raised when the written statement was filed. 8. On the other hand Ms.Rajini Iyer, learned senior counsel for the plaintiffs, at the outset invited my attention to the statement of objects and reasons of the Amendment Act of 2002 to contend that the court while dealing with the application for amendment filed after the said Amendment act came into force and after the commencement of trial it is mandatory for the party seeking amendment to satisfy the court that inspite of due diligence, the party could not have raised the matter earlier. The object of inserting the proviso was to prevent frivolous applications which are filed to delay the trial. She, therefore, submitted that the trial court having taken the proviso into consideration has rightly rejected the amendment holding that the principle laid down by the Supreme Court, in the case cited before the trial Court, prior to 1.7.2002, cannot be applied or taken recourse to, in the present case, while dealing with the application of the defendants under Order 6 Rule 17. The defendants have filed the application only with a view to delay the trial. She placed strong reliance, in support of her submissions, on the judgment of the Apex Court in Salem Advocate Bar Salem Advocate Bar Salem Advocate Bar Association T.N. Vs. Union of India (2005) 6 SCC Association T.N. Vs. Union of India (2005) 6 SCC Association T.N. Vs. Union of India (2005) 6 SCC 344 344 344. She submitted that in any case the defendants 7 7 7 cannot claim that inspite of due diligence they could not have sought the amendment before the commencement of trial since payment of taxes was within their knowledge. The defendants cannot take advantage of their two independent departments dealing with different subjects for showing the cause for condonation of delay, contending that inspite of due diligence they could not have filed such application for amendment earlier. She further submitted that the amendment sought is also inconsistent with the original pleadings. 9. To address the question raised in the instant petition I deem it appropriate to reproduce the provisions contained in Rule 17 of Order 6 of the CPC. The Rule 17 reads thus: "17. The Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties. Provided that no application for amendment shall be allowed after the trial has commenced, unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial." 10. From bare perusal of this provision, it is clear that it consist of two parts. The first part is 8 8 8 that the court may at any stage of the proceedings allow either party to amend his pleadings and the second part is that such amendment shall be made for the purpose of determining the real question in controversy raised between the parties. This provision confers wide power and unfettered discretion on the court to allow amendment of pleadings to the party in such manner and on such terms as it appears to the court as just and proper. By the Amendment act of 2002, the proviso has been added to Rule 17, Order 6 by which the right of a party seeking an amendment has been circumscribed as now it does not permit a litigant to amend the pleadings after commencement of trial, unless he satisfies the court that inspite of due diligence, such amendment could not have been sought earlier. 11. At this stage I would like to make brief reference to the background against which proviso to Rule 17 has been inserted. After 1976, the CPC was amended by the Code of Civil Procedure (Amendment) Act, 1999 (for short "Amendment Act of 1999) with a view to cutting short the delay in disposal of suits. After its enactment there was stiff resistance from the members of the Bar against its enforcement. The Bar Council of India, a statutory body constituted under the Advocate’s Act, was at forefront in opposing 9 9 9 certain amendments and in particular deletion of Rule 17 of Order 6 by the Amendment Act of 1999. The Amendment Act of 1999, therefore, could not be promptly notified for enforcement. The Legislature, after consulting various concerned and based on the outcome of the deliberations introduced the Amendment Act of 2002 with effect from 1.7.2002. The purpose of such like amendments as stated in the statement of Object and Reasons is "to reduce delay in the disposal of civil cases". The Supreme Court in Salem Advocate Salem Advocate Salem Advocate Bar Association’s Bar Association’s Bar Association’s (supra) had an occasion to consider the constitutional validity of all the provisions in Amendment Act of 2002, wherein in paragraph 26 of the judgment it has held, insofar as Order 6 Rule 17 is concerned, as follows: "26. Order 6 Rule 17 of the Code deals with amendment of pleadings. By Amendment Act 46 of 1999, this provision was deleted. It has again been restored by Amendment Act, 22 of 2002 but with an added proviso to prevent application for amendment being allowed after the trial has commenced unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial. The proviso, to some extent, curtails absolute discretion to allow amendment at any stage. Now, if application is filed after Now, if application is filed after Now, if application is filed after commencement of trial, it has to be shown that commencement of trial, it has to be shown that commencement of trial, it has to be shown that in spite of due diligence, such amendment in spite of due diligence, such amendment in spite of due diligence, such amendment could not have been sought earlier. The could not have been sought earlier. The could not have been sought earlier. The object is to prevent frivolous applications object is to prevent frivolous applications object is to prevent frivolous applications which are filed to delay the trial. There is which are filed to delay the trial. There is which are filed to delay the trial. There is no illegality in the provision." no illegality in the provision." no illegality in the provision." (emphasis supplied) 10 10 10 12. From bare perusal of this paragraph and considering the statement of objects and reasons it is clear that if the application is filed under Order 6 Rule 17 after commencement of the trial, it cannot be allowed unless the court comes to the conclusion that inspite of the due diligence such amendment could not have been sought earlier. The object is to prevent frivolous application which are filed to delay the trial. 13. It is now well settled, that the Code of Civil Procedure is "procedure" something designed to facilitate the justice and further its ends. The object of prescribing procedure is to advance the cause of justice. The Supreme Court in Sangram Singh Sangram Singh Sangram Singh Vs. Election of Tribunal, Kotah & Anr. AIR 1955 SC Vs. Election of Tribunal, Kotah & Anr. AIR 1955 SC Vs. Election of Tribunal, Kotah & Anr. AIR 1955 SC 425 425 425 has highlighted three principles to be applied while interpreting any portion of the CPC. These principles are re-iterated recently by the Supreme Court in Kailash Vs. Nanhku and Others 2005 AIR SCW Kailash Vs. Nanhku and Others 2005 AIR SCW Kailash Vs. Nanhku and Others 2005 AIR SCW 2346 2346 2346. The highlighted principles reads thus: "(i) A Code of procedure must be regarded as such. It is ‘procedure’ something designed to facilitate justice and further its ends: not a penal enactment for punishment and penalties: not a thing designed to trip people up. Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should therefor be guarded against (provided always that justice is done to ‘both’ sides) lest the very 11 11 11 means designed for the furtherance of justice be used to frustrate it. (ii) There must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that effect their lives and property should not continue in their absence and that they should not be precluded from participating in them. Of course, there must be exceptions and where they are clearly defined they must be given effect to. (iii) No forms or procedure should ever be permitted to exclude the presentation of the litigant’s defence unless there be an express provision to the contrary." 14. On careful reading of the language of the proviso to Rule 17 Order 6 of CPC, it is clear that it casts an obligation on the party applying for amendment, after commencement of the trial, to offer an explanation to the satisfaction of the court so as to come to the conclusion that inspite of "due diligence", the party could not have raised the matter before the commencement of trial. The proviso does not deal with the power of the court and also does not specifically take away the power of the court to allow the amendment after the commencement of trial. It empowers the court to reject the application if it comes to the conclusion that inspite of "due diligence", the party could not have sought the amendment before the commencement of trial. The provision contained in Order 6 Rule 17 is procedural. 12 12 12 It is not a part of substantive law. The object behind introducing the proviso in the present shape is to curb the mischief of unscrupulous litigant adopting dilactory tactics to delay the disposal of the cases and to defeat the right of opposite party approaching the court for quick relief and also to cause serious inconvenience of the court faced with frequent prayers for adjournment. The object is to expedite the hearing and not to scuttle the same. The purpose of such like amendments is stated in the statement of objects and reasons as "to reduce delay in disposal of civil cases". The Supreme Court has so stated in Kailash Vs. Nankhu Kailash Vs. Nankhu Kailash Vs. Nankhu (supra). 15. The Dictionary meaning of the expression "due diligence" as given in the Blacks Law Dictionary, Sixth Edition, 1990 means "Such a measure of prudence, activity or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent man under the particular circumstances; not measured by any absolute standard, but depending on the relative facts of the special case." Similarly the Law Lexicon by P.Ramanatha Aiyer, Second Edition (Reprint) 2001 explains "due diligence" to mean such watchful caution and foresight as the circumstances of the particular case demands. While examining the explanation offered or cause shown as to why inspite 13 13 13 of due diligence a party could not have raised the matter before commencement of trial, the court may have to see the circumstances in which the party is seeking amendment. In short the explanation as to "due diligence" depends upon the particular circumstances and the relative facts of each case to reach a conclusion one way or the other. 16. The Supreme Court in Tarlok Singh Vs. Tarlok Singh Vs. Tarlok Singh Vs. Municipal Corporation of Amritsar and Anr. 1986(4) Municipal Corporation of Amritsar and Anr. 1986(4) Municipal Corporation of Amritsar and Anr. 1986(4) SCC 27 SCC 27 SCC 27 has observed that the provisions of the Code were made applicable for the purpose of guidance of procedure and it is not expected that the procedure of a suit was to be followed technically and strictly in accordance with the provisions contained in the Code. 17. In Kailash Vs. Nanhku Kailash Vs. Nanhku Kailash Vs. Nanhku (supra) the Supreme Court while cosidering whether the provisions contained in Rule 1 of Order 8 of CPC is mandatory or directory in paragraph 27 has made the following observations : "27. All the rules of procedure are the handmaid of justice. The language employed by the draftsman of processual law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice. In an adversial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the Statute, 14 14 14 the provisions of the CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justce." 18. As stated earlier, the provisions contained in Rule 17 of Order 6 too belong to the domain of procedural law. It expects the litigant to make an application for amendment before the trial commences so as to avoid any hindrance in the progress of the trial. It does not deal with the power of the Court and does not specifically take away the power of the court to allow the amendment even after the commencement of trial. Considering the object and purpose behind enacting the proviso to Rule 17 of Order 6 in the present form and context in which the provision is placed, I am of the opinion, that it has to be construed as directory and not mandatory. While dealing with the applications under Order 6 Rule 17 of CPC, filed after the commencement of the trial, seeking amendment of the pleadings the principles/guidelines laid down before 1.7.2002 by the Supreme Court and High Courts in a catena of decisions should be followed/observed while allowing or rejecting such application, particularly if the amendment is found to be necessary for the purpose of determining the real questions in controversy between the parties. However, I may not be misunderstood as 15 15 15 nullifying the entire force, impact and vigour of the provision, the delay tactics adopted by the litigant. The satisfaction of the court that the application for amendment is not frivolous and not filed to delay the trial is paramount particularly when such application is filed after the commencement of trial. Therefore, what is necessary is proper/sufficient explanation and the particular circumstances which should reflect in the application seeking amendment whenever it is filed after the commencement of trial to enable the court to reach the conclusion that inspite of due diligence the party could not have raised the matter before the commencement of trial. The Judge dealing with an application for amendment must, therefore, deal with the application with firmness. 19. During last two and half months I have come across several writ petitions under Article 227 of the Constitution of India challenging the orders passed by the courts below either rejecting or allowing the amendment in exercise of the powers under Order 6 Rule 17 of the CPC. Often, I have observed that the courts below either completely overlook the guidelines and the principles laid down by the Supreme Court and High Courts or they are not known to the concerned Judges. At most of the places in mofussil, law journals, such as Supreme Court cases, Judgment today etc., do not 16 16 16 reach on time or do not reach at all. A lack of infrastructure and well equipped libraries at taluka places further handicap the courts. Therefore, I take this opportunity to refer to some of the judgments of the Supreme Court and this court including the judgments relied upon by the learned counsel appearing for the parties laying down the principles/guidelines which could be applied or borne in mind and followed while dealing with the applications for amendment under Order 6 Rule 17 of the CPC. 20. As back as in 1957 the Supreme Court in L.J.Leach and Co. Ltd. & Anr Vs. M/s.Jairdine L.J.Leach and Co. Ltd. & Anr Vs. M/s.Jairdine L.J.Leach and Co. Ltd. & Anr Vs. M/s.Jairdine Skinner and Co. AIR 1957 SC 357 Skinner and Co. AIR 1957 SC 357 Skinner and Co. AIR 1957 SC 357 had an occasion to deal with the provisions contained in Rule 17 of Order 6 read with section 151 of CPC. The Supreme Court and High Courts have followed this judgment in a catena of decisions thereafter. The relevant observations in the judgment reads thus: "16. It is no doubt true that Courts would, It is no doubt true that Courts would, It is no doubt true that Courts would, as a rule, decline to allow amendments, if a as a rule, decline to allow amendments, if a as a rule, decline to allow amendments, if a fresh suit on the amended claim would be fresh suit on the amended claim would be fresh suit on the amended claim would be barred by limitation on the date of the barred by limitation on the date of the barred by limitation on the date of the application application 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