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CASE NO.: Appeal (civil)  5294 of 2006

PETITIONER: State Bank of Hyderabad

RESPONDENT: Town Municipal Council

DATE OF JUDGMENT: 01/12/2006

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T (Arising out of SLP (C) No. 21178-21179 of 2005)

S.B. Sinha, J.

       Leave granted.

       Appellant -Bank filed a suit against the respondent.  The suit related  to ownership of a plot admeasuring 610 ft. x 250 ft. situated in the town  Yadgir.  It was purchased by the plaintiff in a public auction.  Allegedly, the  respondent is now claiming back the said amount.  The suit was initially  filed for a decree for injunction.  The respondent filed another suit in the  same court also for a suit for permanent injunction restraining the Bank from  constructing any building.  The suit of the appellant was dismissed whereas  the suit of the respondent was decreed.  Appeals were preferred there against  by both the parties.  In the said appeals, an application was filed for grant of  leave to amend the plaint.  The said application for grant of leave to amend  the plaint was allowed by the appellate court by an order dated 7.04.2003.   The appellate court remanded both the suits to the trial court for their  disposal afresh on merits.  Second Appeals were filed by the respondent  herein before the High Court.  The High Court by reason of the impugned  judgment opined that the said application for amendment was not  maintainable in view of the proviso appended to Order VI, Rule 17 of the  Code of Civil Procedure (Code).  On the said finding not only the order  granting leave to amend the plaint was set aside, the appeals were also  allowed and the matter was remitted to the first appellate court for its  consideration afresh in accordance with law.

       The appellant is, thus, before us.

       The short question which arises for consideration is as to whether the  proviso appended to Order VI, Rule 17 of the Code is applicable in the  instant case.   

       Order VI, Rule 17 of the Code reads, thus:

"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."

       Proviso appended thereto was added by the Code of Civil Procedure  (Amendment) Act, 2002 which came into force with effect from 1.07.2002.   It reads as under:

"Provided that no application for amendment shall  be allowed after the trial has commenced, unless

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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."

       Section 16(2) of the Amending Act of 2002 reads as under:

"16(2) Notwithstanding that the provisions of this  Act have come into force or repeal under sub- section (1) has taken effect, and without prejudice  to the generality of the provisions of section 6 of  the General Clauses Act, 1897 \026  (a)     ***             *** (b)     the provisions of rules 5, 15, 17 and 18 of  Order VI of the First Schedule as omitted or, as the  case may be, inserted or substituted by section 16  of the Code of Civil Procedure (Amendment) Act,  1999 and by section 7 of this Act shall not apply to  in respect of any pleading filed before the  commencement of Section 16 of the Code of Civil  Procedure (Amendment) Act, 1999 and Section 7  of this Act;"

       In view of the said provision there cannot be any doubt whatsoever  that the suit having been filed in the year 1998, proviso to Order VI, Rule 17  of the Code shall not apply.

       The High Court relied upon the said proviso and opined that having  regard thereto the plaintiff was obligated to establish that in spite of due  diligence it could not have raised the matter before commencement of the  trial of the suit.  The High Court evidently committed an illegality in relying  upon the said provision.   

       The learned counsel appearing on behalf of the respondent, however,  would submit that the application for amendment being belated, the same  should not have been entertained.

       It is one thing to say that the application for amendment suffers from  delay or laches but it is another thing to say that thereby the defendant was  prejudiced.  It is also not a case of the respondent that by reason of such an  amendment, the relief which could not be granted having regard to the law  of limitation has become available.  The court even in such a case is not  powerless although the question as to whether the relief sought for would be  otherwise barred by limitation is a relevant factor to determine the issue.

       This aspect of the matter has been considered by this Court in L.J.  Leach and Company Ltd. v. Jardine Skinner and Co. [(1957) SCR 438] in  the following terms:

"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 interests of justice\005"

       L.J. Leach and Company Ltd. (supra) was referred to in Pirgonda  Hongonda Patil v. Kalgonda Shidgonda Patil and Others [(1957) SCR 595]  holding:

"\005We think that the correct principles were  enunciated by Batchelor J. in his judgment in the  same case, viz., Kisandas Rupchand’s case, when

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he said at pp. 649-650 : "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 amendments 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 ?" Batchelor J. made these  observations in a case where the claim was for  dissolution of partnership and accounts, the  plaintiffs alleging that in pursuance of a  partnership agreement they had delivered Rs.  4,001 worth of cloth to the defendants. The  Subordinate Judge found that the plaintiffs did  deliver the cloth, but came to the conclusion that  no partnership was created. At the appellate stage,  the plaintiffs abandoned the plea of partnership  and prayed for leave to amend by adding a prayer  for the recovery of Rs. 4,001. At that date the  claim for the money was barred by limitation. It  was held that the amendment was rightly allowed,  as the claim was not a new claim."

       [See also Rajesh Kumar Aggarwal and Others v. K.K. Modi and  Others, (2006) 4 SCC 385, Pankaja and Another v. Yellappa (Dead) By LRs.  and Others, (2004) 6 SCC 415, Baldev Singh & Ors.  v. Manohar Singh &  Anr. etc.  JT 2006 (7) SC 139, Gajanan Jaikishan Joshi v. Prabhakar  Mohanlal Kalwar (1990) 1 SCC 166 and A.K. Gupta and Sons v. Damodar  Valley Corporation, (1966) 1 SCR 796]

       As the High Court has failed to invoke the law as it then existed, we  do not think that it was correct in its view.   

       For the reasons aforementioned, the impugned judgment cannot be  sustained which is set aside accordingly.  The appeal is allowed and the  matter is remitted to the High Court for consideration of the appeal afresh in  accordance with law.  All contentions of the parties shall, however, remain  open.