IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :: 01-12-2006 CORAM THE HONOURABLE MR.JUSTICE P.SATHASIVAM THE HONOURABLE MR.JUSTICE M.E.N.PATRUDU AND THE HONOURABLE MR.JUSTICE S.MANIKUMAR C.R.P.(PD)No.1203 OF 2003 M/s.Hi.Sheet Industries, a partnership firm carrying on business at 61-D, D.V.Road, Ambur Town, Vellore District. ... Petitioner/Plaintiff. -vs- 1.Litelon Limited, having its Office at No.68, Sipcot Industrial Complex, Hosur, rep.by its Managing Partner S.Gokul. 2.S.Gokul 3.M.Sounthirarajan 4.S.R.Gnanam 5.Supreme Industries Ltd., Raheja Buildings, Nariman Point, Mumbai, rep.by its Chairman B.L.Taperia, 6/2, Raheja Charlens, Nariman Point, Mumbai – 400 021. ... Respondents/Defendants. Revision filed under Section 115 of CPC against the order dated 24.03.2003, made in I.A.No.589 of 2002 in O.S.No.45 of 1996 on the file of Sub-Court, Hosur. https://hcservices.ecourts.gov.in/hcservices/ For petitioner : Mr.S.V.Jayaraman, Senior Counsel, for M/s.P.Mani and M.Sivakumar. For respondents 1 & 2 : Mr.P.Sheshadri For respondents 3 to 5 : No appearance O R D E R M.E.N.PATRUDU,J. 1.00. REFERENCE : 1.01. The reference is as per the result of the revision. 1.02. An order rejecting an application for amendment of plaint in a civil suit is challenged before this Court by way of revision. 1.03. Hon'ble Sri Justice K.P.Sivasubramaniam, desirous to have the decision of a larger bench on the subject. 1.04. Lord Chief Justice Hon'ble Sri A.P.Shah directed to list it before us for determining the following. 2.00. ISSUES : I.Whether an amendment of plaint seeking to claim enhancement of the amount of compensation/damages could be entertained notwithstanding the fact that the amendment is sought for beyond the period of limitation ? II. Whether Section 40 (2) of the Specific Relief Act would apply to the facts and circumstances of the present case and if so, whether it is mandatory to allow the amendment notwithstanding the bar of limitation ? III. Whether the constraints prescribed under the proviso to Order 6, Rule 17 CPC in the matter of entertaining application for amendment after the commencement of trial could apply even to a plea for amendment as contemplated under Section 40 (2) of Specific Relief Act ? 3.00.POINTS : Thus, the points for our decision are: (1)Whether an amendment of pleading claiming or enhancing damages is barred by limitation ? (2) Whether such amendment is mandatory under the provisions of Specific Relief Act ? and (3) Whether such amendment is permissible despite the present proviso to Order 6, Rule 17 CPC ? https://hcservices.ecourts.gov.in/hcservices/ 4.00.ANSWERS : 4.01. We would prefer to declare our decision at first and assign reasons thereafter. 4.02. Accordingly, we hold that (1) an amendment of pleading on damages is not barred by limitation as a rule, but depends on facts and circumstances of each case. (2) such amendments are mandatory under Section 40 (2) proviso of Specific Relief Act. (3) such amendments are permissible even after the commencement of trial. 5.00. DISCUSSION : 5.01. Before we proceed to highlight the reasons for our decision, we may have to note the law on the subject and the legal principles, emerging therefrom since settled by the Apex Court and also this Court in similar cases and then to apply the same to the present case, in order to strengthen our decision. Law :- Civil Procedure Code : 5.02. The procedure for amendment of pleadings is as per Order 6, Rule 17 of the Code of Civil Procedure. It reads thus : "17. Amendment of pleadings.- 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." 5.03. The Code of Civil Procedure, 1908, was extensively amended in 1976 and it was further amended by the Amendment Act 1999 known as Act No.46 of 1999 and, thereafter, by Act 22 of 2002. These amendments have come into force with effect from 01.07.2002. 5.04. Prior to the above amendments, Order 6 Rule 17 was as follows : "17.Amendment of pleadings.- 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." https://hcservices.ecourts.gov.in/hcservices/ 5.05. Thus, the proviso is the new addition under the existing procedural law. Specific Relief Act : 5.06. Section 40 of the Specific Relief Act, 1963, reads as follows : "40.Damages in lieu of, or in addition to, injunction (1) The plaintiff in a suit for perpetual injunction under Section 38, or mandatory injunction under Section 39, may claim damages either in addition to, or in substitution for, such injunction and the court may, if it thinks fit, award such damages. (2) No relief for damages shall be granted under this section unless the plaintiff has claimed such relief in his plaint: PROVIDED that where no such damages have been claimed in the plaint, the court shall, at any stage of the proceedings, allow the plaintiff to amend the plaint on such terms as may be just for including such claim." Limitation Act : 5.07. While so, Section 3 of the Limitation Act is, "3.Bar of limitation.- (1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence..." Case Law : 5.08 : Now, it is the time for us to focus on the case law from some of the notable judgments of our times. 5.09. It is well settled by various decisions of the Supreme Court of India as well as the High Courts in India that Court should be extremely liberal in granting the prayer for amendment of pleadings, unless serious injustice or irreparable loss is caused to the other side. 5.10. The latest decision of the Apex Court on the said principle is, Baldev Singh and Others v. Manohar Singh and Another 1. Relying on the earlier decisions of the Privy Council and the other judgments of the Supreme Court of India, their Lordships have categorically held that the delay in seeking amendment is not fatal, when no serious prejudice is shown to have caused to the opposite party and the wide and unfettered discretion has been conferred on the Court to allow the amendment of pleadings in such manner and on such terms as it appears 1 2006 (6) Supreme Court Cases 498 https://hcservices.ecourts.gov.in/hcservices/ to the court as just and proper. 5.11. In yet another recent decision Rajesh Kumar Aggarwal and Others v. K.K.Modi and Others2, it is observed that the Court should allow all amendments that may be necessary for determining the real question in controversy between the parties, provided it does not cause injustice or prejudice to the other side and the Court should take notice of the subsequent events in order to shorten the litigation, to preserve and safeguard the rights of both parties and to subserve the ends of justice. 5.12. The Supreme Court, in para 9 of the Baldev Singh case (1), categorically observed as follows : "(9)...... From a bare perusal of this provision, it is pellucid that Order 6 Rule 17 of the Code of Civil Procedure consists of two parts. The first part is 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 controversies raised between the parties. Therefore, in view of the provisions made under Order 6 Rule 17 CPC, it cannot be doubted that wide power and unfettered discretion has been conferred on the court to allow amendment of the pleadings to a party in such manner and on such terms as it appears to the court just and proper. While dealing with the prayer for amendment, it would also be necessary to keep in mind that the court shall allow amendment of pleadings if it finds that delay in disposal of suit can be avoided and that the suit can be disposed of expeditiously." 5.13. While so, His Lordship Dr.Justice AR.Lakshmanan, through an authoritative and elaborate discussion on Order 6 Rule 17 CPC., in Rajesh Kumar Aggarwal's case (2) , held as follows: para "15. The object of the rule is that the courts should try the merits of the case that come before them and should, consequently, allow all amendments that may be necessary for determining the real question in controversy between the parties provided it does not cause injustice or prejudice to the other side. para 16. Order 6 Rule 17 consists of two parts. Whereas the first part is discretionary (may) and leaves it to the court to order amendment of pleading. The second part is imperative (shall) and enjoins the court to allow all amendments which are necessary for the purpose of determining the real question in controversy between the parties. 2 2006 (4) SCC 385 https://hcservices.ecourts.gov.in/hcservices/ para 17. In our view, since the cause of action arose during the pendency of the suit, proposed amendment ought to have been granted because the basic structure of the suit has not changed and that there was merely change in the nature of relief claimed. para 18. As discussed above, the real controversy test is the basic or cardinal test and it is the primary duty of the court to decide whether such an amendment is necessary to decide the real dispute between the parties. If it is, the amendment will be allowed; if it is not, the amendment will be refused....the court should also take notice of subsequent events in order to shorten the litigation, to preserve and safeguard the rights of both parties and to subserve the ends of justice. It is settled by a catena of decisions of this Court that the rule of amendment is essentially a rule of justice,equity and good conscience and the power of amendment should be exercised in the larger interest of doing full and complete justice to the parties before the court. para 19. While considering whether an application for amendment should or should not be allowed, the court should not go into the correctness or falsity of the case in the amendment. Likewise, it should not record a finding on the merits of the amendment and the merits of the amendment sought to be incorporated by way of amendment are not to be adjudged at the stage of allowing the prayer for amendment." 5.14. The above two latest pronouncements of the Apex Court answer the first and third points of the reference. 5.15. However, we would like to refer to some of the landmark decisions of yester years on the topic. 1) In Charandas v. Amir Khan 3 , the Privy Council observed as follows : "A Court has full power to allow an amendment and though such power should not as a rule be exercised where its effect is to take away from a defendant a legal right which has accrued to him by lapse of time, yet there are cases where such considerations are outweighed by the special circumstances of a case." (emphasis supplied) 3 AIR 1921 PC 50 https://hcservices.ecourts.gov.in/hcservices/ 2) In Krishna Ayyar v. Gomathi Ammal 4 , it is clearly observed that amendment of relief clause after limitation should not be refused when the facts are already on record and no new case is introduced. In the words of Justice King "The only serious objection,.... is upon the law of limitation. This objection, in our opinion, has no force, because, although para 22 has now been amended, the facts upon which the reliefs, as now formulated in para 22 are claimed, were already part of the plaint when it was first presented. There can be no question, therefore, that it is only at this stage that the plaintiff is putting forward a new case against the defendants." It is an identical case and the trial Court should have followed it but for the later division bench case. 3) In L.J.Leach & Co.Ltd. v. M/s.Jardine Skinner and Co. 5 at paras 15,16, it is observed as follows : "(15)..plaintiffs have applied to this Court for amendment of the plaint by raising, in the alternative, a claim for damages for breach of contract for non- delivery of the goods. The respondents resisted the application. They contend that the amendment introduces a new cause of action, that a suit on that cause of action would now be barred by limitation, that the plaintiffs had ample opportunity to amend their plaint but that they failed to do so, and that owing to lapse of time the defendants would be seriously prejudiced if this new claim were allowed to be raised. There is considerable force in the objections. But after giving due weight to them, we are of opinion that this is a fit case in which the amendment ought to be allowed. The plaintiffs do not claim any damages for wrongful termination of the agreement. What they claim is only damages for non-delivery of goods in respect of orders placed by them and accepted by the defendants prior to the termination of the agreement by the notice. Clause 14 of the agreement expressly reserves that right to the plaintiffs. The suit being founded on Ex.A, a claim based on cl.14 thereof cannot be said to be foreign to the scope of the suit.....The prayer in the plaint is itself general and merely claims damages. Thus, all the allegations which are necessary for sustaining a claim for damages for breach of contract are already in the plaint. What is lacking is only the allegation that the plaintiffs are, in the alternative, entitled to claim damages for breach of contract by the defendants in not delivering the goods..." 4 A.I.R.(32) 1945 Madras 33 5 A.I.R.1957 S.C.357 https://hcservices.ecourts.gov.in/hcservices/ "(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." The majority decision of the Apex Court is a step towards amendment. 4) In Pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil 6 , while dealing with the provisions of the Limitation Act and Order 6 Rule 17 C.P.C., the Supreme Court clarified that when an amendment can be allowed and whether such an amendment is taking away the right accrued to the party by lapse of time. 5) The following observations of Justice Batchelor made in Kisandas Rupchand v. Rachappa Vithoba7 are reiterated by the Apex Court : "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 amendment should be refused only where the other party cannot be placed in the same position as if the 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 ?" 6) In A.K.Gupta & Sons v. Damodar Valley Corpn.8, the Supreme Court once again held as follows : 6 A.I.R.1957 S.C.363 7 53 Bombay 644 at p.655 8 AIR 1967 Supreme Court 96 https://hcservices.ecourts.gov.in/hcservices/ "It is not in dispute that at the date of the application for amendment a suit for a money claim under the contract was barred. The general rule, no doubt, is that a party is not allowed by amendment to set up a new cause of action particularly when a suit on new case or cause of action is barred : Weldon v. Neale,9. 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." "The principal reasons that have led to the rule last mentioned are first, that the object of Courts and rules of procedure is to decide the rights of the parties and not to punish them for their mistakes (Cropper v. Smith)10, and secondly, that a party is strictly not entitled to rely on the statute of limitation when what is sought to be brought in by the amendment can be said to be amended." "The expression "cause of action" in the present context does not mean "every fact which it is material to be proved to entitle the plaintiff to succeed" as was said in Cooke v. Gill11, in a different context, for if it were so, no material fact could ever be amended or added and, of course, no one would want to change or add an immaterial allegation by amendment. That expression for the present purpose only means, a new claim made on a new basis constituted by new facts. Such a view was taken in Robinson v. Unicos Property Corporation Ltd.12, and it seems to us to be the only possible view to take. Any other view would make the rule futile. The words "new case" have been understood to mean "new set of ideas": Dornan v. J.W.Ellis and Co. Ltd.13. This also seems to us to be a reasonable view to take. No amendment will be allowed to introduce a new set of ideas to the prejudice of any right acquired by any party by lapse of time." 9 (1887) 19 QBD 394 10 (1884) 26 Ch D 700 (710-711) 11 (1873) 8 CP 107 (116) 12 1962-2 All ER 24 13 1962-I All ER 303 https://hcservices.ecourts.gov.in/hcservices/ 7) In Punjab National Bank v. Indian Bank and Another14, it is held in paras 16 and 18 as follows : "(16) It can, however, be said that there is some vagueness in the plaintiff's case regarding the claim and decree in terms of dollar or rupee but there can always be an amendment of the pleading to clear such confusions and vagueness. In Laxmidas Dahyabhai Kabarwala v. Nanabhai Chunilal Kabarwala and Ors.15,it has been held that amendment can be refused when the effect of it would be to take away from a party a legal right which had accrued to him by lapse of time. It may be so when fresh allegations are added or fresh reliefs are sought by way of amendment. But where the amendment merely clarifies an existing pleading and does not in substance add to or alter it, there is no good reason not to allow the same nor even the bar of limitation would come in the way. No fresh allegations of facts have been introduced/or added nor any fresh cause of action or new relief is sought to be added. A matter already contained in the original pleading can always be clarified and such an amendment should ordinarily be allowed and in such a case the question of bar of limitation would not be attracted. The case in hand is not one in which something fresh or new is sought to be added. The claim in terms of dollars has been made in different paragraphs of the plaint as well as in Clause (v) of the prayer clause, no new relief is sought to be added, only rupee equivalent of the dollar, is sought to be deleted and a clear prayer for decree in dollars would, resultantly remain there, by deletion of rupee component equivalent to the dollars. In our view, no question of introducing any new case, a new cause of action or seeking new relief which may be barred by limitation arises. It is an amendment more clarificatory in nature. (18) The position that emerges from the decisions referred to earlier is that an amendment would generally not be disallowed except where a time barred claim is sought to be introduced, there too it would be one of the factors for consideration or where it changes the nature of the suit itself or it is mala fide or the other party cannot be placed in the same position had the plaint been originally filed correctly, that is to say, the other side has lost right of a defence by subsequent amendment. We find that no such element is present in the case in hand so as to disallow the amendment in the plaint. No undue 14 2003 (2) CTC 437 (SC) 15 1964 (2) SCR 567 https://hcservices.ecourts.gov.in/hcservices/ advantage is sought to be taken as the claim in terms of dollars is mentioned in the plaint and the relief clause and the defendants are not to be taken by surprise. The amendment only clears the confusion, if any, as to the terms in which relief is sought. It does not revive a time barred and dead claim, nor changes the nature of the suit. In the facts and circumstances, it cannot be said to be mala fide either." In para 20, it is observed that there would be a huge difference of amount in terms of money if the amendment is permitted. The difference in amount being huge would not be a legitimate ground to deny the amendment of plaint, which otherwise passes the test of all the conditions under which normally amendment is to be allowed. 8) Pankaja v. Yellappa16 – Para–12 : So far as the Court's jurisdiction to allow an amendment of pleadings is concerned, there can be no two opinion that the same is wide enough to permit amendments even in case where there has been substantial delay in filing such amendment applications. This Court in numerous cases has held the dominant purpose of allowing the amendment is to minimize 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.(underlining is ours) Para-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 ? Para-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. The jurisdiction to allow or not allow an amendment being discretionary the same will have to