Case: Dena Bank Vs. Gautam Ratilal Shah &amp; Others

certainly be removed generally by appropriate steps taken by a party which must no doubt pay costs for the inconvenience of 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."18. Based on the last mentioned judgment, it was contented by Mr. Chinai that the present case was one where there was a defective cause of action, which defect was sought to be cured by the amendment. On the other hand, Counsel on behalf of the respondents have been at pains to point out that defect could not be regarded as one made bona fide or through inadvertence but that it was a deliberate carse of actions adopted on legal advise by the plaintiffs whereby they sought to see advantage of provisions for a summary decision under the Code and under the Rules of High Court, which summary procedure would not have been available had all facts been properly indicated in the plaint initially.19. In our opinion, the point being considered by us does not strictly fit in with the facts indicated in any of the judgments which are cited at the bar. We will make the position clear. As the facts are now brought out, the claim is made by a nationalised Bank against four persons who were the Directors of Private Limited Company and who had guaranteed the amount borrowed by the said company form the Bank and signed various documents in favour of the Bank. The Company went into liquidation and the securities became non-existent and were not available to the Bank. No purpose would be served by the Company or its Liquidator. In the circumstances the Bank chose to file a money claim only against the Directors but based only on some of the documents executed by the defendants, viz., the promissory notes. It did not choose to indicate its pleading viz., the plaint, all the documents though the defendants were aware of them at all times and indeed have referred to them both in their affidavit in reply and in the Written Statement. 20. In 1982 a suit based on the letter of guarantee or against the defendants as guarantors would perhaps be barred by the law of limitation and this seems to be borne out by observation made in (Margaret Lalita Samuel v. indo commrl. Bank )8, (1979)2 S.C.C 396. However, apart from this plea the two points which are required to be considered according to us are (1) whether the case made by the plaintiffs is a totally new case based on a new set of ideas and (2) would the defendant be prejudice in their defence if these additional facts were allowed to be pleaded, in the sense that necessary evidence would not be available. 21. Apart from these aspects, we are faced with the facts that the plaintiffs had deliberately opted to file a suit on the promissory note and excluding the deed of hypothecation and the letters of continuity and guarantee to ensure that the same was within the parameters of Order XXXVII of the Code of Civil Procedure. Further even after the affidavit in reply were filed and unconditional leave to defend was generated in 1977, no amendment of the plaintiff was sought until 1982. No real explanations has been offered in Balans affidavit filed in March 1985 although it indicates that the frame of the suit and the maintenance of that frame despite submissions to the contrary were principally at the instance of the plaintiffs Advocate and his obduracy in maintaining that the pleading as it stood was a proper pleading.22. The defendants have not denied that a letter of hypothecation have been executed by the Company and its Directors or that letters of continuity and guaranted had been signed by all of them on 31st Januay, 1973. Subsequently we find that statements have been sent and acknowledged though these may not bring the claim within three years from 1982. Principally, however, what the plaintiffs have claimed in the plaint as it stands is a money decree against the defendants. The prayer is not sought to be altered, but what is sought is to give support to that prayer by additional documents and additional facts although it must be conceded that they were fully within the knowledge of the plaintiffs from the very beginning and the plaintiffs had deliberately on legal advise choose not to mention the same in the plaint. Does it make any difference We think not. If ineffectiveness or incompetence on the part of the pleader is to be forgiven then so must be obduracy and obstinacy. It must be fairly conceded, that we have before us a border-line case, but on the balance we are of opinion that interests of justice require that the amendment should not be allowed since, in our opinion this is not a case where the defendants cannot be compensated in terms of money. To insist that they must be protected by the law of limitation against the claim as now made on a proper basis would be to make a fetish of upholding procedural technicalities at the cost of substantial justice. 23. In other words we are inclined to allow the appeal through the amendment will have to be permitted on terms. 24. We have considered idea as to the proceedings taken in and after 1982. Even the appeal adjournments had to be taken to enable the appellants to explain the circumstances under which it took more than five years for making the application for amendment (after the order on the Summons for Judgment). We have also to consider the position and allegations made by the defendants Nos. 1, 2, 3 & 4 against the first defendant. Baring all these circumstances in mind and since we are now permitting introduction of additional facts to complete a defective cause of action we think fairly stringent terms may be imposed on the appellants.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]19. In our opinion, the point being considered by us does not strictly fit in with the facts indicated in any of the judgments which are cited at the bar. We will make the position clear. As the facts are now brought out, the claim is made by a nationalised Bank against four persons who were the Directors of Private Limited Company and who had guaranteed the amount borrowed by the said company form the Bank and signed various documents in favour of the Bank. The Company went into liquidation and the securities becameand were not available to the Bank. No purpose would be served by the Company or its Liquidator. In the circumstances the Bank chose to file a money claim only against the Directors but based only on some of the documents executed by the defendants, viz., the promissory notes. It did not choose to indicate its pleading viz., the plaint, all the documents though the defendants were aware of them at all times and indeed have referred to them both in their affidavit in reply and in the Written Statement.In 1982 a suit based on the letter of guarantee or against the defendants as guarantors would perhaps be barred by the law of limitation and this seems to be borne out by observation made in (Margaret Lalita Samuel v. indo commrl. Bank )8, (1979)2 S.C.C 396. However, apart from this plea the two points which are required to be considered according to us are (1) whether the case made by the plaintiffs is a totally new case based on a new set of ideas and (2) would the defendant be prejudice in their defence if these additional facts were allowed to be pleaded, in the sense that necessary evidence would not be available.Apart from these aspects, we are faced with the facts that the plaintiffs had deliberately opted to file a suit on the promissory note and excluding the deed of hypothecation and the letters of continuity and guarantee to ensure that the same was within the parameters of Order XXXVII of the Code of Civil Procedure. Further even after the affidavit in reply were filed and unconditional leave to defend was generated in 1977, no amendment of the plaintiff was sought until 1982. No real explanations has been offered in Balans affidavit filed in March 1985 although it indicates that the frame of the suit and the maintenance of that frame despite submissions to the contrary were principally at the instance of the plaintiffs Advocate and his obduracy in maintaining that the pleading as it stood was a proper pleading.The defendants have not denied that a letter of hypothecation have been executed by the Company and its Directors or that letters of continuity and guaranted had been signed by all of them on 31st Januay, 1973. Subsequently we find that statements have been sent and acknowledged though these may not bring the claim within three years from 1982. Principally, however, what the plaintiffs have claimed in the plaint as it stands is a money decree against the defendants. The prayer is not sought to be altered, but what is sought is to give support to that prayer by additional documents and additional facts although it must be conceded that they were fully within the knowledge of the plaintiffs from the very beginning and the plaintiffs had deliberately on legal advise choose not to mention the same in the plaint. Does it make any difference We think not. If ineffectiveness or incompetence on the part of the pleader is to be forgiven then so must be obduracy and obstinacy. It must be fairly conceded, that we have before us acase, but on the balance we are of opinion that interests of justice require that the amendment should not be allowed since, in our opinion this is not a case where the defendants cannot be compensated in terms of money. To insist that they must be protected by the law of limitation against the claim as now made on a proper basis would be to make a fetish of upholding procedural technicalities at the cost of substantial justice.In other words we are inclined to allow the appeal through the amendment will have to be permitted on terms.We have considered idea as to the proceedings taken in and after 1982. Even the appeal adjournments had to be taken to enable the appellants to explain the circumstances under which it took more than five years for making the application for amendment (after the order on the Summons for Judgment). We have also to consider the position and allegations made by the defendants Nos. 1, 2, 34 against the first defendant. Baring all these circumstances in mind and since we are now permitting introduction of additional facts to complete a defective cause of action we think fairly stringent terms may be imposed on the appellants.