Case: M/S. Revajeetu Builders &amp; Developers Vs. M/S. Narayanaswamy &amp; Sons

3. Brief facts in nutshell are as under:The appellant (original plaintiff) filed an Original Suit no. 2265 of 1996 before the XXXI Additional City Civil Judge, Bangalore against the respondents (defendant nos. 1 to 10) for recovery of Rs.52,97,111/- with interest at the rate of 18% per annum from the date of filing of suit till payment. The appellant alternatively had taken the plea that if the court for any reason comes to the conclusion that a decree for a sum of Rs.52,97,111/- cannot be passed as prayed by the appellant against respondents (original defendant nos. 1 and 2), then the court may at least pass a decree for Rs.19,12,500/- with interest at the rate of 18% from the date of suit till the date of realization against the respondents4. The appellant also claimed that it be declared absolute owner of the scheduled property on the basis of the sale deed dated 30.9.1987. The sale deed was executed by the respondents in favour of the appellant after obtaining permission from the State of Karnataka under the provisions of the Urban Land (Ceiling & Regulation) Act, 19765. A petition in public interest was filed by one S. Vasudeva which ultimately came up before this Court in Civil Appeal Nos.1454-56 of 1993 challenging the aforementioned transfer of land. This court in those proceedings held that the sale deed executed by the respondent in favour of the appellant on 30.9.1987 is held to be invalid and inoperative. It may be pertinent to mention that after the institution of the suit, the Urban Land (Ceiling and Regulation) Act, 1976 has been repealed6. After the Act has been repealed, the appellant filed an application under Order VI Rule 17 of the Code of Civil Procedure, 1908 (for short `CPC) seeking leave of the trial court to add two additional paragraphs as 2(A) and (B) and few prayers and to delete certain paragraphs in the plaint and also to delete the prayer (a), (b) and (c)Paragraphs 2(A) and (B) are set out as under:"2(A). With the enactment of the Urban Land (Ceiling & Regulation) Act, 1976, the first defendant firm was prohibited from holding vacant land in excess of ceiling limits. As provided by the said Act, such vacant land, in excess of ceiling limits, was liable to be acquired by the State Government. Therefore, the first defendant firm applied to the State Government for exemption, under section 20(1) of the said Act, and sought permission to hold excess vacant land to an extent admeasuring 16194 square metres. Vide Government Order dated 17.07.85, in exercise of its power under section 20(1) of the said Act, the state government permitted the first defendant firm to hold the excess vacant land. Subsequently, as stated in para 4 hereinafter, the first defendant firm made another application to the state government to exempt the balance excess vacant land admeasuring 3444 square metres and the same was permitted by the state government vide its order dated 18.04.87. Thus, the entire extent of vacant land in excess of ceiling limits admeasuring a total aggregate extent of 19638 square metres was exempted, by the state government, under section 20(1) of the said Act2(B). Thereafter, the defendant firm approached the plaintiff and offered to sell, to the plaintiff, an extent of 5 acres 24 guntas in survey nos.6/1 and 6/2, Dasarahalli, VI Block, Jayanagar, Bangalore, together with building thereon. This extent of 5 acres 24 guntas comprised of 19638 square feet of excess vacant land, in addition to the land with buildings and vacant land within ceiling limits. The first defendant firm, therefore, obtained permission from the state government under orders dated 06.03.87 and 18.04.87 to sell to the plaintiffs, the excess vacant land admeasuring 19638 square metres, as set out in paras 3 and 4 hereinafter. Pursuant thereto, the first defendant firm executed a registered Sale Deed dated 30.09.87 in respect of the total aggregate extent of 5 acres 24 guntas i.e. including the excess vacant land admeasuring 19638 square metres as aforesaid (19638 sq. metres)."7. The appellant sought to add the following prayers in the plaint by an amendment in the plaint:-(a) to declare that from 1.4.1988, the defendants are trespassers and or in unauthorized occupation of the building which they were permitted, under the Sale Deed dated 30.9.1987 to use as a licensee till 31.3.1988;(b) to issue a mandatory injunction directing the defendants to vacate and deliver to the plaintiff, vacant and peaceful possession of the building within 30 days; and(c) to issue a permanent injunction restraining the defendants or any of them, or their agents, representatives, servants or any other persons claiming through, under or on behalf of any of them from interfering with or in any manner disturbing, hindering, obstructing, the plaintiffs enjoyment and possession of the entire suit schedule property including the building portion ordered to be evicted in terms of prayer (b) hereinabove8. The trial court vide order dated 5.4.2003 allowed application for amendment filed under Order VI Rule 17 CPC. The respondents aggrieved by the said order of the trial court preferred a writ petition No.36550 of 2003 under Article 227 of the Constitution before the High Court of Karnataka on the ground that the amendment as sought and granted has changed the entire nature of the suit and cause of action. The respondents also submitted that the fact of allowing amendment would be taking away admissions in the plaint by the appellant and such an amendment cannot be permitted by any court of law. It was further submitted by the respondents that by the order of the trial court the rights accrued to the respondents have been taken away9. The respondents submitted that the original suit was instituted for recovery of Rs.52,97,111/-. Alternatively, the appellant requested the court to declare it as the absolute owner based on the basis of sale deed dated 30.9.1987 and direct the respondents to deliver vacant possession of the plaint schedule property. The respondents also submitted that the appellant relying upon the sale deed dated 30.9.1987 requested the court to declare it as the absolute owner and since it sought possession of the property from the respondents meaning thereby that the respondents are in possession of the entire suit property. If the appellant are in possession of only a portion of the suit property, the same ought to have been mentioned in the plaint and the prayer in respect of the same would be limited and not seeking relief of possession in respect of the entire suit property. Now by virtue of the amendment, the appellant is trying to contend that the respondents are to be treated as trespassers and unauthorized occupants of the building in question10. The learned counsel for the respondents submitted that when the appellant had originally sought possession of the entire property from the respondents, by giving up such a claim, now the appellant is trying to introduce a new case which would certainly affect the rights of the respondents when the appellant had earlier requested the court to pass a decree for possession of the entire property. Learned counsel for the appellant also submitted that the trial court without considering or properly comprehending implications of all these aspects has allowed the amendment application11. In the impugned judgment, the High Court after considering the rival contentions came to the definite conclusion that the appellant while seeking permission to amend the plaint is trying to introduce a new case which was not his case in the original plaint and proposed amendment if allowed would certainly affect the rights of the respondents adversely. In the impugned judgment, the High Court also held that the appellant cannot be permitted to withdraw the admissions made in the plaint as it would affect the rights of the respondents12. The High Court in the impugned judgment also held that any such amendment which changes the entire character of the plaint cannot be permitted and that too after a lapse of four years after the institution of the suit. The High Court has set aside the order of the trial court which allowed the amendment under Order VI Rule 17 CPC13. Being aggrieved by the impugned judgment, the appellant has preferred this appeal.. Brief facts in nutshell are as under:The appellant (original plaintiff) filed an Original Suit no. 2265 of 1996 before the XXXI Additional City Civil Judge, Bangalore against the respondents (defendant nos. 1 to 10) for recovery of Rs.52,97,111/- with interest at the rate of 18% per annum from the date of filing of suit till payment. The appellant alternatively had taken the plea that if the court for any reason comes to the conclusion that a decree for a sum of Rs.52,97,111/- cannot be passed as prayed by the appellant against respondents (original defendant nos. 1 and 2), then the court may at least pass a decree for Rs.19,12,500/- with interest at the rate of 18% from the date of suit till the date of realization against the respondents4. The appellant also claimed that it be declared absolute owner of the scheduled property on the basis of the sale deed dated 30.9.1987. The sale deed was executed by the respondents in favour of the appellant after obtaining permission from the State of Karnataka under the provisions of the Urban Land (Ceiling & Regulation) Act, 19765. A petition in public interest was filed by one S. Vasudeva which ultimately came up before this Court in Civil Appeal Nos.1454-56 of 1993 challenging the aforementioned transfer of land. This court in those proceedings held that the sale deed executed by the respondent in favour of the appellant on 30.9.1987 is held to be invalid and inoperative. It may be pertinent to mention that after the institution of the suit, the Urban Land (Ceiling and Regulation) Act, 1976 has been repealed6. After the Act has been repealed, the appellant filed an application under Order VI Rule 17 of the Code of Civil Procedure, 1908 (for short `CPC) seeking leave of the trial court to add two additional paragraphs as 2(A) and (B) and few prayers and to delete certain paragraphs in the plaint and also to delete the prayer (a), (b) and (c)Paragraphs 2(A) and (B) are set out as under:"2(A). With the enactment of the Urban Land (Ceiling & Regulation) Act, 1976, the first defendant firm was prohibited from holding vacant land in excess of ceiling limits. As provided by the said Act, such vacant land, in excess of ceiling limits, was liable to be acquired by the State Government. Therefore, the first defendant firm applied to the State Government for exemption, under section 20(1) of the said Act, and sought permission to hold excess vacant land to an extent admeasuring 16194 square metres. Vide Government Order dated 17.07.85, in exercise of its power under section 20(1) of the said Act, the state government permitted the first defendant firm to hold the excess vacant land. Subsequently, as stated in para 4 hereinafter, the first defendant firm made another application to the state government to exempt the balance excess vacant land admeasuring 3444 square metres and the same was permitted by the state government vide its order dated 18.04.87. Thus, the entire extent of vacant land in excess of ceiling limits admeasuring a total aggregate extent of 19638 square metres was exempted, by the state government, under section 20(1) of the said Act2(B). Thereafter, the defendant firm approached the plaintiff and offered to sell, to the plaintiff, an extent of 5 acres 24 guntas in survey nos.6/1 and 6/2, Dasarahalli, VI Block, Jayanagar, Bangalore, together with building thereon. This extent of 5 acres 24 guntas comprised of 19638 square feet of excess vacant land, in addition to the land with buildings and vacant land within ceiling limits. The first defendant firm, therefore, obtained permission from the state government under orders dated 06.03.87 and 18.04.87 to sell to the plaintiffs, the excess vacant land admeasuring 19638 square metres, as set out in paras 3 and 4 hereinafter. Pursuant thereto, the first defendant firm executed a registered Sale Deed dated 30.09.87 in respect of the total aggregate extent of 5 acres 24 guntas i.e. including the excess vacant land admeasuring 19638 square metres as aforesaid (19638 sq. metres)."7. The appellant sought to add the following prayers in the plaint by an amendment in the plaint:-(a) to declare that from 1.4.1988, the defendants are trespassers and or in unauthorized occupation of the building which they were permitted, under the Sale Deed dated 30.9.1987 to use as a licensee till 31.3.1988;(b) to issue a mandatory injunction directing the defendants to vacate and deliver to the plaintiff, vacant and peaceful possession of the building within 30 days; and(c) to issue a permanent injunction restraining the defendants or any of them, or their agents, representatives, servants or any other persons claiming through, under or on behalf of any of them from interfering with or in any manner disturbing, hindering, obstructing, the plaintiffs enjoyment and possession of the entire suit schedule property including the building portion ordered to be evicted in terms of prayer (b) hereinabove8. The trial court vide order dated 5.4.2003 allowed application for amendment filed under Order VI Rule 17 CPC. The respondents aggrieved by the said order of the trial court preferred a writ petition No.36550 of 2003 under Article 227 of the Constitution before the High Court of Karnataka on the ground that the amendment as sought and granted has changed the entire nature of the suit and cause of action. The respondents also submitted that the fact of allowing amendment would be taking away admissions in the plaint by the appellant and such an amendment cannot be permitted by any court of law. It was further submitted by the respondents that by the order of the trial court the rights accrued to the respondents have been taken away9. The respondents submitted that the original suit was instituted for recovery of Rs.52,97,111/-. Alternatively, the appellant requested the court to declare it as the absolute owner based on the basis of sale deed dated 30.9.1987 and direct the respondents to deliver vacant possession of the plaint schedule property. The respondents also submitted that the appellant relying upon the sale deed dated 30.9.1987 requested the court to declare it as the absolute owner and since it sought possession of the property from the respondents meaning thereby that the respondents are in possession of the entire suit property. If the appellant are in possession of only a portion of the suit property, the same ought to have been mentioned in the plaint and the prayer in respect of the same would be limited and not seeking relief of possession in respect of the entire suit property. Now by virtue of the amendment, the appellant is trying to contend that the respondents are to be treated as trespassers and unauthorized occupants of the building in question10. The learned counsel for the respondents submitted that when the appellant had originally sought possession of the entire property from the respondents, by giving up such a claim, now the appellant is trying to introduce a new case which would certainly affect the rights of the respondents when the appellant had earlier requested the court to pass a decree for possession of the entire property. Learned counsel for the appellant also submitted that the trial court without considering or properly comprehending implications of all these aspects has allowed the amendment application11. In the impugned judgment, the High Court after considering the rival contentions came to the definite conclusion that the appellant while seeking permission to amend the plaint is trying to introduce a new case which was not his case in the original plaint and proposed amendment if allowed would certainly affect the rights of the respondents adversely. In the impugned judgment, the High Court also held that the appellant cannot be permitted to withdraw the admissions made in the plaint as it would affect the rights of the respondents12. The High Court in the impugned judgment also held that any such amendment which changes the entire character of the plaint cannot be permitted and that too after a lapse of four years after the institution of the suit. The High Court has set aside the order of the trial court which allowed the amendment under Order VI Rule 17 CPC13. Being aggrieved by the impugned judgment, the appellant has preferred this appeal.

Reasoning:
17. The original plaint expressly so avers and relies on section 65 of the Contract Act clearly admitting that the sale deed has become void. This admission is now sought to be got rid off and the sale deed is sought to be asserted as valid. It was submitted that the appellant cannot, therefore, seek any amendment of the plaint relying on the circumstances as to the earlier decision having been overruled by seeking amendment of the plaint. This has the effect of changing the character of the suit and also omitting an admission made24. In the same judgment of Usha Balashaheb Swami (supra), the Court dealt with a number of judgments of this Court and laid down that the prayer for amendment of the plaint and a prayer for amendment of the written statement stand on different footings. The general principle that amendment of pleadings cannot be allowed so as to alter materially or substitute the cause of action or the nature of claim applies to amendments to plaint. It has no counterpart in the principles relating to amendment of the written statement. Therefore, addition of a new ground of defence or substituting or altering a defence or taking inconsistent pleas in the written statement would not be objectionable while adding, altering or substituting a new cause of action in the plaint may be objectionable29. In our considered view, Order VI Rule 17 is one of the important provisions of the CPC, but we have no hesitation in also observing that this is one of the most misused provision of the Code for dragging the proceedings indefinitely, particularly in the Indian courts which are otherwise heavily overburdened with the pending cases. All Civil Courts ordinarily have a long list of cases, therefore, the Courts are compelled to grant long dates which causes delay in disposal of the cases. The applications for amendment lead to further delay in disposal of the cases31. In a recently published unique, unusual and extremely informative book "Justice, Courts and Delays", the author Arun Mohan, a Senior Advocate of the High Court of Delhi and of this Court, from his vast experience as a Civil Lawyer observed that 80% applications under Rule VI Order 17 are filed with the sole objective of delaying the proceedings, whereas 15% application are filed because of lackadaisical approach in the first instance, and 5% applications are those where there is actual need of amendment. His experience further revealed that out of these 100 applications, 95 applications are allowed and only 5 (even may be less) are rejected. According to him, a need for amendment of pleading should arise in a few cases, and if proper rules with regard to pleadings are put into place, it would be only in rare cases. Therefore, for allowing amendment, it is not just costs, but the delays caused thereby, benefit of such delays, the additional costs which had to be incurred by the victim of the amendment. The Court must scientifically evaluate the reasons, purpose and effect of the amendment and all these factors must be taken into consideration while awarding the costs32. To curtail delay in disposal of cases, in 1999 the Legislation altogether deleted Rule 17 which meant that amendment of pleading would no longer have been permissible. But immediately after the deletion there was widespread uproar and in 2002 Rule 17 was restored, but added a proviso. That proviso applies only after the trial has commenced. Prior to that stage, the situation remains as it was. According to the view of the learned author Arun Mohan as observed in his book, although the proviso has improved the position, the fact remains that amendments should be permissible, but only if a sufficient ground therefore is made out, and further, only on stringent terms. To that end, the rule needs to be further tightened33. The general principle is that courts at any stage of the proceedings may allow either party to alter or amend the pleadings in such manner and on such terms as may be just and all those amendments must be allowed which are imperative for determining the real question in controversy between the parties. The basic principles of grant or refusal of amendment articulated almost 125 years ago are still considered to be correct statement of law and our courts have been following the basic principles laid down in those cases45. Though the Court noticed `considerable force in the objection, keeping in view the prayer in the amendment which was not `foreign to the scope of the suit and all necessary facts were on record, it allowed the amendment47. Dismissing the appeal and confirming the order of the High Court, this Court observed that the discretionary power of amendment was not exercised by the High Court on wrong principles. There was merely a defect in the pleading which was removed by the amendment. The quality and quantity of the reliefs sought remained the same. Since the amendment did not introduce a new case, the defendant was not taken by surprise61. The first condition which must be satisfied before the amendment can be allowed by the court iswhether such amendment is necessary for the determination of the real question in controversy.If that condition is not satisfied, the amendment cannot be allowed. This is the basic test which should govern the courts discretion in grant or refusal of the amendment62. The other important condition which should govern the discretion of the Court is the potentiality of prejudice or injustice which is likely to be caused to other side. Ordinarily, if other side is compensated by costs, then there is no injustice but in practice hardly any court grants actual costs to the opposite side63. The Courts have very wide discretion in the matter of amendment of pleadings but courts powers must be exercised judiciously and with great care.