REPORTABL E

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5567 OF 2008 (Arising out of SLP(C) No.1822 of 2007)

South Konkan Distilleries  & Anr.    …Appellants

VERSUS

Prabhakar Gajanan Naik  & Ors. …Respondents

J U D G M E N T

TARUN CHATTERJEE,J.

1. Leave granted.

2. This  appeal  is  directed  against  the  judgment  and order

dated 20th of October, 2006 passed by the High Court of

Bombay at Goa in Writ Petition No.463 of 2003 whereby

the High Court had affirmed the order of the trial court

dated 5th of February, 2001 by which the trial court had

rejected  the  application  for  amendment  of  written

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statement  and  the  counter  claim  of  the

defendants/appellants.

3. The facts leading to the filing of this appeal are stated in a

nutshell :-

Prabhakar  Gajanan  Naik  has  filed  a  suit  for

dissolution of partnership firm wherein the appellant

No.1,  being  defendant  No.1  in  the  suit,  was  the

partnership  firm  and  the  appellant  No.2,  who  is

defendant No. 4, was a partner of the said firm. In

the  said  suit  for  dissolution  of  partnership,  the

appellants  by  their  written  statement  disputed  the

existence of such partnership and had taken a plea

that  by  way  of  a  family  arrangement,  the

defendants/appellants were allowed to carry on the

business of setting up South Konkan Distilleries. In

their written statement, the appellants also claimed

that in view of various letters addressed to various

Banks,the said distillery could not be commenced as

scheduled in May, 1986 and as a result thereof, the

appellants  suffered  heavy  loss.  Accordingly,  in  the

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written  statement,  a  counter  claim  of  Rs.52  lakhs

was made against the  original  plaintiff/respondent.

The  said  written  statement  was,  however,  filed  on

17th of  June,  1987.  The  counter  claim  of  the

appellants  was  based  on  a  notice  of  the  learned

counsel  dated  23rd of  October,  1986.  In  2000,  i.e.,

after thirteen and a half years, the appellants filed an

application for amendment of the written statement

and the counter claim seeking enhanced amount. In

the application for  amendment,  the appellants  had

alleged  that  as  they  were  suffering  loss  of  Rs.

20,000/-  per  day  from  the  month  of  June,  1987,

when  the  original  written  statement  was  filed,  the

counter  claim  was  made  only  upto  to  the  date  of

filing  of  the  written  statement  and  by  seeking  an

amendment of the same, they were only claiming a

sum  of  Rs.20,000/-  per  day  from  June,  1986  till

November,  2000  which  would  be  less  than  Rs.25

lakhs. This application for amendment of the written

statement  and  the  counter  claim,  filed  by  the

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appellants,  was  opposed  by  the  original

plaintiff/respondent  on the  ground that  the  prayer

for  amendment  of  the  written  statement  and  the

counter  claim  was  clearly  barred  by  the  law  of

limitation.  The  trial  court  by  its  order  dated  5th of

February, 2001 came to the conclusion that as the

cause  of  action  arose  in  1986,  the  prayer  for

amendment of the written statement and the counter

claim for enhanced damages, as noted herein earlier,

was clearly  ex facie barred by the law of limitation.

Accordingly,  the  trial  court  rejected  the application

for  amendment  of  the  written  statement  and  the

counter claim filed by the appellants and aggrieved

by  the  aforesaid  order  of  rejection,  a  writ  petition

being W.P.No.463/2003 was filed at the instance of

the  appellants  which  was  also  rejected  by  the

impugned  order  of  the  learned  Judge  of  the  High

Court against which a special leave petition was filed

and  on  grant  of  leave,  the  same  was  heard  in

presence of the learned counsel for the parties.

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4. We have  heard  the  learned  counsel  for  the  parties  and

examined  the  application  for  amendment  of  the  written

statement, the counter claim and also the original written

statement including the plaint filed by the respondents in

the present  suit.  At this stage,  we may record that this

Court  while  issuing  notice  on  12.2.2007  passed  the

following order:

“Issue notice limited to the question as to whether the amendment could have been allowed  with  some  modification  so  as to grant  relief  to  the  petitioner  only  to  the extent of  amount not barred by limitation as on the date of the application.”

5. The  learned  counsel  for  the  parties  appearing

before  us,  however,  submitted that in the fittest  of

things,  this  appeal  may  be  decided  whether  the

amendment of the written statement and the counter

claim would at all be allowed as the law of limitation

would stand in the way. Such being the stand taken

by the learned counsel for the parties, we had taken

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up  the  question  at  issue  raised  before  us.  The

question  is  whether  an  amendment  of  the  written

statement and the counter claim could be allowed,

which  was  filed  after  thirteen  and  a  half  years  of

filing of the written statement and the counter claim,

if  the  claim  was  already  barred  by  the  law  of

limitation.  

6. As noted herein earlier, the High Court as well

as  the  trial  Court  rejected  the  application  for

amendment of the written statement and the counter

claim on the ground that as the cause of action had

arisen in 1986, the claim of the appellants sought to

be amended by filing the application for amendment

of the written statement and the counter claim was

clearly ex-facie barred by the law of limitation.   

7. Having heard the learned counsel for the parties

and considering the nature of  amendment  and the

length of time after which the prayer for amendment

was made by the appellants in the written statement

and the counter claim, we are of the view that the

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High Court as well  as the trial court had exercised

their jurisdiction in a proper manner in rejecting the

application for amendment of the written statement

and the counter claim.   

8. Before  we  deal  with  the  orders  of  the  courts

below, as to whether the application for amendment

of the written statement and the counter claim was

rightly rejected or not, let us consider the laws on the

question  of  allowing  or  rejecting  a  prayer  for

amendment  of  the  pleadings  when  the  plea  of

limitation was taken by one of the parties in the suit.

It  is  well  settled  that the  court  must  be  extremely

liberal in granting the prayer for amendment, if the

court is of the view that if such amendment is not

allowed,  a  party,  who  has  prayed  for  such  an

amendment, shall suffer irreparable loss and injury.

It is also equally well settled that there is no absolute

rule  that  in  every  case  where  a  relief  is  barred

because  of  limitation,  amendment  should  not  be

allowed.  It  is always open to the court to allow an

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amendment  if  it  is  of  the  view that  allowing  of  an

amendment shall really sub-serve the ultimate cause

of justice and avoid further litigation. In  L.J.Leach

& Co. Ltd. & Anr. Vs. M/s. Jardine Skinner & Co.

[AIR 1957 SC 357], this Court at paragraph 16 of the

said decision observed as follows :-

“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.”

9. Again  in T.N.  Alloy  Foundry Co.  Ltd.  Vs.  T.N.

Electricity  Board  and Ors.  [(2004)  3  SCC 392  this

Court observed as follows:

“The  law  as  regards  permitting amendment to the plaint, is well settled in L.J. Leach and Co. Ltd. v. Jardine Skinner and Co., it was held that the Court 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 this is a factor to be taken

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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.

It is not disputed  that the appellate court has a coextensive power to the trial court. We find that the discretion exercised by the  High  Court in  rejecting  the  plaint was in conformity with law.”

10. From  the  above,  therefore,  one  of  the

cardinal  principles  of  law  allowing  or  rejecting  an

application for amendment of the pleading is that the

courts  generally,  as  a  rule,  decline  to  allow

amendments,  if a fresh suit  on the amended claim

would be barred by limitation on the date of filing of

the  application.  But  that  would  be  a  factor  to  be

taken into account in the exercise of the discretion as

to whether the 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.  In  Ragu

Thilak D.John vs. S. Rayappan & Ors. [2001 (2)

SCC 472],  this Court also observed that where the

amendment  was  barred  by  time  or  not,  was  a

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disputed question of fact and, therefore, that prayer

for  amendment  could  not  be  rejected  and  in  that

circumstances the issue of limitation can be made an

issue  in  the  suit  itself.   In  a  decision  in

Vishwambhar  &  Ors.  vs.  Laxminarayan  (Dead)

through Lrs. & Anr. [(2001) 6 SCC 163], this Court

held  that  the  amendment  though  properly  made

cannot relate back to the date of filing of the suit, but

to  the  date  of  filing  of  the  application.   Again  in

Vineet  Kumar  vs.  Mangal  Sain  Wadhera  [AIR

1985  SC 817]  this  Court  held  that  if  a  prayer  for

amendment merely adds to facts already on record,

the  amendment  would  be  allowed  even  after

statutory period of limitation.

11. Keeping  the  principles  laid  down  by  various

decisions of this Court,  as noted herein earlier,  we

now  proceed  to  take  up  the  facts  leading  to  the

refusal  of  the prayer  for amendment  by the courts

below.   

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12. A plain reading of the original written statement

would show that the case pleaded by the appellants

in their written statement was to the effect that the

appellant  No.  2  had  undertaken  an  expansion

project,  which,  due  to  certain  alleged  acts  of  the

answering respondents, ran into delays, however, at

the  time  of  filing  of  the  written  statement,  the

expansion  project  was  in  full  swing  and  the

appellants were making continuous investments and

that, there was no interference by the respondents.

It would also be clear from the written statement that

the  appellants  had  invested  Rs.  20  lakhs  in  the

project  when  the  alleged  acts  of  omission  and

commission  were  undertaken  by  the  respondents

and  in  fact,  paragraph  26  of  the  same  gives  an

impression  that  the  said  project  was  under

completion  and  that  the  appellants,  till  then,  had

invested Rs. 40-45 lakhs.   It  was for the aforesaid

reasons, that the appellants claimed damages for a

sum of Rs. 52 lakhs by way of a counter claim and

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made  a  conscious  decision  not  to  claim  for  any

damages  arising  in  the  future.   It  was,  therefore,

stated in the written  statement  that the expansion

was  in  progress  and  the  appellants  had  claimed

damages  only  for  the  alleged  delay,  which  was

allegedly pleaded.  From a reading of paragraph 55 of

the original written statement, it is also evident that

the appellants have limited their counter claim to Rs.

52 lakhs only towards damages and made conscious

choice  to  compute  the  sum only  upto  a  particular

period and not beyond that.  It is only after thirteen

and  a  half  years  of  filing  the  original  written

statement  and  the  counter  claim,  for  which  no

explanation  was  given  in  the  application  for

amendment of the written statement and the counter

claim,  the  appellants  have  now  by  way  of  an

amendment of the written statement and the counter

claim,  sought  to  increase  the  amount  of  damages

from  Rs.52  lakhs,  as  originally  claimed,  to  Rs.

8,53,50,000/-  by  claiming  damages  allegedly

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incurred  for  the  subsequent  period  from  the  year

1986.   

13. Therefore, it is clear from the above that by way

of an amendment, the appellants are now completely

making  out  a  new  case  by  alleging  that  the

appellants  were  incurring  damages  on  continuous

basis, which is contrary to the pleadings made in the

written statement and the counter claim which has

already been stated hereinabove.   

14. An argument was advanced at the instance of

the learned counsel for the appellants that by way of

an  amendment,  the  appellants  only  sought  to

introduce certain subsequent events after filing of the

original  written statement.   This  submission of  the

learned  counsel  for  the  appellants  cannot  be

supported.  The issue of alleged damages cannot be

said to be a subsequent event as the appellants are

now trying to plead.  Even assuming for the sake of

arguments that certain losses were being caused but

such  losses  were  within  the  knowledge  of  the

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appellants all along even at the time of filing of the

original  written  statement  i.e.  since  1987.   In  any

case,  in  the  original  written  statement  and  the

counter  claim,  there  is  no  averment  regarding  the

continuous nature of losses on daily basis which has

been claimed after thirteen and a half years of filing

the written statement,  when in the original  written

statement,  the  appellants  consciously  claimed

damages only till a particular period.  

15. It  was next argued by the learned counsel  for

the appellants  that since  it  is well  settled  that the

Court  should  be  extremely  liberal  in  granting

amendment,  provided  the  same  was  within  the

period  of  limitation  or  there  would  be  an arguable

issue with regard to the point of limitation, the courts

below ought to have allowed the amendment of the

written statement and the counter claim and thereby

raised  an  issue  on  the  question  whether  the

amended claim of the appellants was barred by the

law  of  limitation.   In  support  of  this  submission,

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reliance was placed in the case of   Pankaja and Anr.

Vs. Yellappa [Dead] By LRs and Ors. [ (2004) 6 SCC

415].  There is no quarrel  about the proposition of

law that was submitted by the learned counsel  for

the  appellants.   In  any  view of  the  matter  in  that

decision, namely, Pankaja and Anr., the question of

limitation was found to be arguable issue and on that

ground this Court allowed the amendment and the

trial court was directed to frame necessary issue on

the  question  of  limitation  and  decide  the  same

keeping in view the law laid down in  L.J.  Leach’s

case [supra]. But in the present case, we are in full

agreement with the courts below that there was no

dispute on the question of limitation.  Therefore, it

cannot  be  said  that the point  of  limitation was an

arguable  one  and  the  same  should  be  decided  by

raising an issue at the time of disposal of the suit.   

16. In  view  of  our  discussions  made  hereinabove

that  there  was  no  dispute  on  the  question  of

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limitation, it would not be fit and proper to hold that

the  Courts  below  had  acted  illegally  and  with

material  irregularity  in  the  exercise  of  their

jurisdiction  in  rejecting  the  application  for

amendment of the written statement and the counter

claim.   The  learned  counsel  for  the  appellants,

however, relied on a decision of this Court reported

in  AIR  1967  SC  96  [A.K.Gupta  & Sons  Ltd.  vs.

Damodar Valley Corporation] in order to satisfy us

that  the  prayer  for  amendment  for  a  sum already

specified in the plaint or such other amount as was

to be determined after accounts, ought to be allowed

though the  suit  for  recovery  of  money  was  barred

when the amendment was sought. In our view, that

decision of  this Court stands on a different  footing

altogether  and  will  not  be  of  any  help  to  the

appellants.  In that decision, it was made clear that

the  amendment  of  pleadings  introducing  new case

cannot be allowed, if suit on such case is barred. In

that  decision  also,  it  was  made  clear  that  in  the

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matter  of  allowing  amendment  of  pleadings,  the

general  rule  is  that  a  party  is  not  allowed  by

amendment to set up a new case or a new cause of

action, particularly when a suit on the new cause of

action is barred. However, an exception was given in

that decision saying where the amendment does not

constitute the addition of a new cause of action or

raise  a  different  case,  but  amounts  merely  to  a

different  or  additional  approach to  the  same  facts,

the amendment is to be allowed even after expiry of

the statutory period of limitation.  We have already

observed that there is no quarrel on the proposition

enunciated by this Court in the aforesaid decision.

As  held  hereinabove,  the  date  on  which  the

application for amendment of the written statement

and  the  counter  claim  was  filed,  the  claim  was

already barred by limitation. Therefore, if a fresh suit

was filed on the amended claim, there cannot be any

dispute that the same could also be barred by the

law  of  limitation.  Under  these  circumstances  and

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applying  also  the  principles  laid  down  in  the

aforesaid decision in the case of A.K.Gupta (supra),

in the facts of this case, we are of the view that since

even  on  the  date  of  filing  of  the  application  for

amendment of the written statement and the counter

claim, the claim was barred and no fresh suit could

be filed on such amended claim and, therefore, the

two courts below had acted within their jurisdiction

in rejecting the prayer for amendment of the written

statement and the counter claim.  It may not be out

of place to mention that following the principle laid

down in  A.K.Gupta’s  case (supra), this Court again

in Vineet Kumar vs. Mangal Sain Wadhera [1984

(3) SCC 352] expressed the same view to which we

have already adhered to.

17. Considering the facts of the case and the nature

of amendment claimed and the principles laid down

by this Court in L.J.Leach’s case (supra) and other

decisions of this Court, as referred to herein earlier,

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we  are  of  the  view  that  if  a  suit  was  filed  on  the

amended claim, it was an admitted position that the

said claim was barred by limitation, the question of

allowing  the  amendment  of  the  written  statement

and  the  counter  claim,  in  the  facts  and

circumstances  of  the  case,  could  not  arise  at  all.

Accordingly, the courts below were fully justified in

rejecting  the  application  for  amendment  of  the

written statement and the counter claim.  

18. The learned counsel appearing on behalf of the

appellants again relied on a decision of this Court in

Gajanan  Jaikishan  Joshi  vs.  Prabhakar

Mohanlal Kalwar [1990 (1) SCC 166] and sought to

argue that the courts below were in error in rejecting

the  application  for  amendment  of  the  written

statement and the counter claim. In our view, that

decision of this Court is distinguishable on facts. In

that decision, no fresh cause of action was sought to

be introduced by the amendment applied for. All that

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the  appellant  sought  to  do  in  that  case  was  to

complete the cause of action for specific performance

for which relief he had already prayed for. It was only

that one averment required in law to be made in a

plaint  in  a  suit  for  specific  performance  was  not

made in that case as the provisions of sub-section (c)

of Section 16 of the Specific Relief Act was mandatory

in nature, probably on account of some oversight or

mistake of the lawyer who drafted the plaint and that

error was sought to be rectified by the amendment

applied for.  This is not the position in the present

case. Admittedly the claim of 1986 was sought to be

made  by  way  of  the  amendment  of  the  written

statement and the counter claim in the year 2000,

when that claim had already become barred by the

law of limitation. Such being the position and in view

of  the  principle  laid  down,  as  noted  herein  above,

that if a suit was filed for the amended claim which

could have become barred by the law of limitation,

the application for amendment was rightly rejected.  

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19. Keeping the aforesaid findings made by us and

also the findings arrived at by the courts below in the

matter  of  exercise  of  discretion  to  reject  the

application for amendment of the written statement

and the counter claim in mind, the delay and latches

on the part of the appellants to apply for amendment

of the written statement and the counter claim would

be the relevant factor for rejecting the application for

amendment of the pleadings. As noted herein earlier,

there  has  been  thirteen  and  a  half  years  delay  in

filing the application for amendment of the pleadings.

Further more, in the application for amendment, the

appellants had not given any explanation whatsoever

for  such  delay.  Under  these  circumstances,  we  do

not find any reason to interfere with the orders of the

courts  below.  In  our  view,  in  the  facts  and

circumstances  of  the  case,  the  courts  below  were

perfectly  justified  in  rejecting  the  prayer  for

amendment of the written statement and the counter

claim.        

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20. In view of our findings made hereinabove, that

on the date of filing of the amendment petition, the

claim as made by the appellants in their amendment

petition  was  already  barred,  no  purpose  would  be

achieved  by  allowing  the  amendment  which  has

already stood barred by the law of limitation.  

21. For  the  reasons  aforesaid,  we  are  of  the  view

that the courts below had exercised their discretion

in  a  proper  manner  in  the  matter  of  rejecting  the

amendment of the pleadings.  We, therefore,  do not

find any merit in this appeal Accordingly, the appeal

is dismissed. However, the trial court is directed to

dispose  of  the  suit  as  early  as  possible  preferably

within a year from the date of supply of a copy of this

order to it. There will be no order as to costs.  

          …………………….J .           [Tarun Chatterjee]

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New Delhi                            ……..…………… ….J. September 09, 2008.              [Harjit Singh Bedi]     

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