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CASE NO.: Appeal (civil)  6114 of 1999

PETITIONER: STATE OF A.P. & ORS.

RESPONDENT: M/S. PIONEER BUILDERS, A.P.

DATE OF JUDGMENT: 25/09/2006

BENCH: H.K. SEMA & D.K. JAIN

JUDGMENT: J U D G M E N T

WITH Civil Appeal No.6115/1999, Civil Appeal No.1005/2000  and Civil Appeal No.1006/2000

D.K. JAIN, J.:         These four cross appeals, by special leave, are  directed against two judgments and orders, both dated  3.3.1999, rendered by the High Court of Judicature  Andhra Pradesh at Hyderabad in Appeals No.2206-2207  of 1996 and 236-237 of 1998.  The State of Andhra  Pradesh, the first defendant in the suit and plaintiff,  namely, M/s. Pioneer Builders, Engineers and  Contractors, Hyderabad, hereinafter referred to as "the  contractor" are the appellants before us.  Since the  factual matrix and the questions of law involved in all the  appeals are common, these are being disposed of by this  judgment.  However, we shall refer to the facts of Civil  Appeal No.6115/1999 as illustrative. 2.      Sometime in the year 1988, the Superintending  Engineer, Srisailam Right Branch Canal (for short  "SRBC"), defendant No.2 in the Suit, issued notice  inviting tenders from pre-qualified bidders of eligible  source countries, which included India, for the work of  excavation, lining and construction of structures of  SRBC.  It was a time bound project supported by credit  loans from the International Development Association  and International Bank for Reconstruction and  Development. 3.      The tender of the contractor being the lowest, he  was awarded the work valued at Rs.8,42,93,617/-. A  formal agreement was executed.  Time for completion of  the work was thirty six months from the date of handing  over of the site.  Clause 57 of General Conditions of  Contract laid down the procedure for resolution of  disputes.  It reads thus: "57.    RESOLUTION OF DISPUTES: 1)      Settlement of claims for Rs.50,000/- and  below by Arbitration.         All disputes or differences in respect of which  the decision, if any, of the Engineer or Employer has  not become final and binding as aforesaid, shall on  the initiative of either party in dispute be referred to  the adjudication as follows: a) Claims upto a value  Superintending Engineer     of Rs. 10,000/-             S.R.B.C. Circle No.III

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                                       Banganapalli at Nandyal b) Claims above Rs.             Chief Engineer,     10,000/- & upto             Major Irrigation,     Rs.50,000/-                 Hyderabad The arbitration shall be conducted in  accordance with the provisions of Indian Arbitration  Act of 1940 or any statutory modifications thereof. 2.      Settlement of claims above Rs.50,000/- All claims of above Rs.50,000/- are to be  settled by a court of competent jurisdiction by way  of Civil Suit."

4.      It seems that only 50% of the allotted work could be  completed by the due date.  Apprehending expulsion, on  24.3.1992, the contractor filed a petition under Sections  8 and 20 of the Indian Arbitration Act, 1940 read with  Section 26 and Order VII Rule 1 of the Code of Civil  Procedure (for short "C.P.C"), registered as an original  suit, with the following prayers: "(a)    Arbitrate the disputes mentioned in para  17 arising between the plaintiff and  defendant under clauses 56 and 57 of  section 2, vol.I of the contract and also  direct the defendants to pay to the  plaintiff the amount so determined as  payable. (b)     Or in alternative to direct the defendants  to file the agreement before the Hon’ble  Court and appoint a sole arbitrator for  adjudicating the said disputes referred to  in paragraph 17 arising between the  plaintiff and defendants under the  Arbitration Act, 1940. (c)     Payment of interest on the amount  payable to the plaintiff at the rate of 21%  per annum from the date of execution of  work till payment. (d)     Costs." 5.      On 26.3.1992 defendant No.2 issued notice to the  contractor expelling them from the contract on the  ground that they had failed to maintain the rate of  progress as per the approved programme. On 13.4.1992,  the contractor filed an application seeking interim  injunction, restraining the defendants from encashing the  bank guarantees for an amount of Rs.1,26,00,000/-,  furnished by them towards mobilization advance and as  performance guarantee. The suit was resisted by the  defendants mainly on merits though it was averred that  "the plaintiff suit is not maintainable either in law or on  facts".  No separate reply to the application appears to  have been filed. However, the application was dismissed  by the subordinate Judge.  Aggrieved, the contractor  preferred appeal to the High Court, which was dismissed  vide order dated 13.11.1992. While dismissing the  appeal, the High Court observed that having regard to the  language of the arbitration agreement between the parties  and the fact that there was no claim for any specified  amount in        the petition, the suit as filed by the contractor  was not maintainable.  The Court, however, clarified that  it would be open to the contractor to amend the plaint in  accordance with law, if so advised. 6.      In the light of the said order, on 17.1.1993, the  contractor filed three applications in the pending suit:  (i)  I.A. No.1/1993 \026 under Order VI Rule 17 C.P.C. for  amendment of the plaint; (ii) I.A. No. 2/1993 - for

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production of documents by the defendants; (iii) I.A.  No.3/1993 - for dispensing with notice under Section 80  of C.P.C. All the applications were opposed by the  defendants on merits of the claims made in the  application seeking amendment of the plaint.  No  objection with regard to the maintainability of the  applications was raised. However, in the penultimate  paragraph of reply to I.A. No. 3/1993, it was stated that  since time was required to examine the claims, "issue of  notice under Section 80 C.P.C. was necessary and was  not superfluous".  All the three applications were allowed  by the subordinate Judge vide docket order dated  2.2.1993.  Order passed in I.A. No.3/1993 reads as  follows: "Heard both counsels.  I don’t find any tenable  ground to refuse the relief asked for, allowed."

7.      The orders passed in the said applications were not  challenged.  Instead two additional written statements  were filed on behalf of the defendants.  On the basis of  the pleadings, as many as eighteen issues were framed.   None of the issues pertained to maintainability of the  suit.  After trial, the suit was decreed in respect of some  of the claims made by the contractor with interest from  the date of the filing of the suit.  However, some of the  claims made by the contractor were rejected. 8.      Being aggrieved, both the parties preferred First  Appeals to the High Court (No.2206-2207 of 1996 and  236-237 of 1998).  By the impugned order, the High  Court has dismissed all the appeals.  Hence, the present  appeals. 9.      We have heard Mr. Anoop G. Choudhary, learned  senior counsel appearing on behalf of the State and Mr.  V.R. Reddy, learned senior counsel appearing for the  contractor only on the two legal issues emanating from  the orders passed by the subordinate Judge in I.A. Nos. 1  and 3/1993, namely, (i) maintainability of the  amendment application filed under Order VI Rule 17  C.P.C. and (ii) maintainability of the suit for want of  notice under Section 80 C.P.C. 10.     Mr. Choudhary has vehemently submitted that  Section 80 C.P.C. being mandatory and in the absence of  any prayer for an urgent and immediate order, the Trial  Court was not justified in dispensing with the  requirement of issue of notice under that Section.  It is  asserted that the provisions of sub-Section (2) of Section  80 C.P.C. were not attracted on the pleaded facts and,  therefore, in the absence of requisite notice under sub- section (1) of Section 80, the Trial Court could not  entertain the suit.  Learned counsel has also urged that  the petitions filed by the contractor initially under  Sections 8 and 20 of the Arbitration Act could not be  converted into civil suits by way of amendment  applications under Order VI Rule 17 C.P.C.  In support  reliance is placed on the decisions of this Court in P.A.  Ahammed Ibrahim Vs. Food Corporation of India   and Bharat Coking Coal Ltd. Vs. Raj Kishore Singh  and Another , wherein it has been held that converting  an application under Section 20 of the Arbitration Act  into a suit for recovery by permitting it to be amended  under Order VI Rule 17 C.P.C. would amount to  introducing a totally new cause of action and change the  nature of the action.  It is, thus, pleaded that the High  Court has failed to take into consideration the settled  principles of law on both the issues.

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11.     Per contra, Mr. Reddy has contended that though  the suit filed initially was styled as a petition under  Sections 8 and 20 of the Arbitration Act on account of  vague language of the arbitration agreement but in fact it  was a civil suit.  Learned counsel has also submitted that  having failed to take any objection with regard to the  maintainability of the suit for want of notice under  Section 80 C.P.C. and further having failed to challenge  the orders passed by the Trial Court, allowing the  applications filed under Section 80(2) and Order VI Rule  17 C.P.C., and having participated in proceedings before  the Trial Court, the defect, if any, stood waived and the  State is now estopped from raising such objections.   Relying on Ghanshyam Dass and Others Vs. Dominion  of India and Others , learned counsel has submitted  that Section 80 C.P.C. being merely a part of the adjective  law, dealing with procedure alone, it should be  interpreted in a manner so as to subserve and advance  the cause of justice rather than to defeat it on a mere  technicality. Learned counsel has also urged that  relegating the contractor to the stage of notice under  Section 80 C.P.C. would be travesty of justice. 12.     The first question that arises for determination is as  to whether or not the suit filed by the contractor was  maintainable because of the alleged non-compliance with  the provisions of Section 80 C.P.C.?         Section 80 C.P.C. reads as follows:- "80.    Notice \026 (1) Save as otherwise provided in  sub-section (2), no suit shall be instituted  against the Government (including the  Government of the State of Jammu and  Kashmir) or against a public officer in respect  of any purporting to be done by such public  officer in his official capacity, until the  expiration of two months next after notice in  writing has been delivered to, or left at the  office of \026  (a)     in the case of a suit against the  Central Government, [except where it  relates to a railway], a Secretary to  that Government; (b)     in the case of a suit against the  Central Government where it relates  to a railway, the General manager of  that railway; *  *  * (bb) in the case of a suit against the  Government of the State of Jammu  & Kashmir, the Chief Secretary to  that Government or any other officer  authorised by that Government in  this behalf; (c)     in the case of a suit against [any  other State Government], a Secretary  to that Government or the Collector of  the district; *  *  * *  *  * and in the case of a public officer,  delivered to him or left at his office,  stating the cause of action, the name,  description and place of residence of the  plaintiff and the relief which he claims;  and the plaint shall contain a statement  that such notice has been so delivered or

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left. (2)     A suit to obtain an urgent or  immediate relief against the Government  (including the Government of the State of  Jammu and Kashmir) or any public  officer in respect of any purporting to be  done by such public officer in his official  capacity, may be instituted, with the  leave of the Court, without serving any  notice as required by sub-section (1); but  the Court shall not grant relief in the  suit, whether interim or otherwise, except  after giving to the Government or public  officer, as the case may be, a reasonable  opportunity of showing cause in respect  of the relief prayed for in the suit:         Provided that the Court shall, if it is  satisfied, after hearing the parties, that  no urgent or immediate relief need be  granted in the suit, return the plaint for  presentation to it after complying with  the requirements of sub-section (1).         (3) No suit instituted against the  Government or against a public officer in  respect of any act purporting to be done  by such public officer in his official  capacity shall be dismissed merely by  reason of any error or defect in the notice  referred to in sub-section (1), if in such  notice \026 (a) the name, description and the  residence of the plaintiff had been  so given as to enable the  appropriate authority or the public  officer to identify the person serving  the notice and such notice had been  delivered or left at the office of the  appropriate authority specified in  sub-section (1) and (b)     the cause of action and the relief  claimed by the plaintiff had been  substantially indicated."          13.     From a bare reading of sub-section (1) of Section 80,  it is plain that subject to what is provided in sub-section  (2) thereof, no suit can be filed against the Government or  a public officer unless requisite notice under the said  provision has been served on such Government or public  officer, as the case may be.  It is well-settled that before  the amendment of Section 80 the provisions of  unamended Section 80 admitted of no implications and  exceptions whatsoever and are express, explicit and  mandatory. The Section imposes a statutory and  unqualified obligation upon the Court and in the absence  of compliance with Section 80, the suit is not  maintainable. (See: Bhagchand Dagdusa Gujrathi &  Ors. Vs. Secretary of State for India ; Sawai Singhai  Nirmal Chand Vs. The Union of India  and Bihari  Chowdhary & Anr. Vs. State of Bihar & Ors. ).  The  service of notice under Section 80 is, thus, a condition  precedent for the institution of a suit against the  Government or a public officer. The legislative intent of  the Section is to give the Government sufficient notice of  the suit, which is proposed to be filed against it so that it  may reconsider the decision and decide for itself whether

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the claim made could be accepted or not.  As observed in  Bihari Chowdhary (supra), the object of the Section is  the advancement of justice and the securing of public  good by avoidance of unnecessary litigation. 14.     It seems that the provision did not achieve the  desired results inasmuch as it is a matter of common  experience that hardly any matter is settled by the  Government or the public officer concerned by making  use of the opportunity afforded by said provisions.  In  most of the cases, notice given under Section 80 remains  unanswered. In its 14th report (reiterated in 27th and 54th  Report), the Law Commission, while noting that the  provisions of this section had worked a great hardship in  a large number of cases where immediate relief by way of  injunction against the Government or a public officer was  necessary in the interests of justice, had recommended  omission of the Section.  However, the Joint Committee of  Parliament, to which the Amendment Bill 1974 was  referred, did not agree with the Law Commission and  recommended retention of Section 80 with necessary  modifications/relaxations. 15.     Thus, in conformity therewith, by the Code of Civil  Procedure (Amendment Act, 1976) the existing Section 80  was renumbered as Section 80(1) and sub-sections (2)  and (3) were inserted with effect from 1.2.1977. Sub- section (2) carved out an exception to the mandatory rule  that no suit can be filed against the Government or a  public officer unless two months’ notice has been served  on such Government or public officer.  The provision  mitigates the rigours of sub-section (1) and empowers the  Court to allow a person to institute a suit without serving  any notice under sub-section (1) in case it finds that the  suit is for the purpose of obtaining an urgent and  immediate relief against the Government or a public  officer.  But, the Court cannot grant relief under the sub- section unless a reasonable opportunity is given to the  Government or public officer to show cause in respect of  the relief prayed for.  Proviso to the said sub-section  enjoins that in case the Court is of the opinion that no  urgent and immediate relief should be granted, it shall  return the plaint for presentation to it after complying  with the requirements of sub-section (1).  Sub-section (3),  though not relevant for the present case, seeks to bring in  the rule of substantial compliance and tends to relax the  rigour of sub-section (1). 16.     Thus, from a conjoint reading of sub-sections (1)  and (2) of Section 80, the legislative intent is clear,  namely, service of notice under sub-section (1) is  imperative except where urgent and immediate relief is to  be granted by the Court, in which case a suit against the  Government or a public officer may be instituted, but  with the leave of the Court. Leave of the Court is a  condition precedent. Such leave must precede the  institution of a suit without serving notice.  Even though  Section 80(2) does not specify how the leave is to be  sought for or given yet the order granting leave must  indicate the ground(s) pleaded and application of mind  thereon. A restriction on the exercise of power by the  Court has been imposed, namely, the Court cannot grant  relief, whether interim or otherwise, except after giving  the Government or a public officer a reasonable  opportunity of showing cause in respect of relief prayed  for in the suit. 17.     Having regard to the legislative intent noticed above,  it needs little emphasis that the power conferred in the

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Court under sub-section (2) is to avoid genuine hardship  and is, therefore, coupled with a duty to grant leave to  institute a suit without complying with the requirements  of sub-section (1) thereof, bearing in mind only the  urgency of the relief prayed for and not the merits of the  case.  More so when want of notice under sub-section (1)  is also made good by providing that even in urgent  matters relief under this provision shall not be granted  without giving a reasonable opportunity to the  Government or a public officer to show cause in respect  of the relief prayed for.  The provision also mandates that  if the Court is of the opinion that no urgent or immediate  relief deserves to be granted it should return the plaint  for presentation after complying with the requirements  contemplated in sub-section (1). 18.     Bearing in mind the afore-noted legal position, we  advert to the facts in hand. As noted above, the  subordinate Judge, vide Order dated 2nd February, 1993  came to the conclusion that "there was no tenable ground  to refuse the relief asked for".  Though there may be some  substance in the submission of Mr. Choudhary, learned  senior counsel appearing for the State, that the order  allowing the application, seeking dispensation of the  requirement of notice, is cryptic but the fact remains that  by allowing the application, after hearing the defendant  State, the Judge has opined that the suit is for the  purpose of obtaining an urgent and immediate order.   Had the satisfaction been against the contractor, the  Court was bound to return the plaint to the contractor for  re-presentation after curing the defect in terms of sub- section (1) of Section 80.  Although we do not approve of  the manner in which the afore-extracted order has been  made and the leave has been granted by the subordinate  Judge but bearing in mind the fact that in its reply to the  application, the State had not raised any specific  objection about the maintainability of the application on  the ground that no urgent and immediate relief had  either been prayed for or could be granted, as has now  been canvassed before us, we are of the opinion that  having regard to the peculiar facts and the conduct of  both the parties it is not a fit case where the matter  should be remanded back to the subordinate Judge for  re-consideration.  We find it difficult to hold that the  order passed by subordinate Judge on contractor’s  application under Section 80(2) C.P.C. was beyond his  jurisdiction.  Accordingly, we decline to interfere with the  finding recorded by the High Court on this aspect of the  matter.  The High Court has held that having participated  in the original proceedings, it was not now open to the  State to raise a fresh issue as to the maintainability of the  suit, in view of waiving the defect at the earliest point of  time.  The High Court has also observed that knowing  fully well about non-issue of notice under Section 80  C.P.C. the State had not raised such a plea in the written  statement or additional written statement filed in the suit  and therefore, deemed to have waived the objection.  It  goes without saying that the question whether in fact,  there is waiver or not necessarily depends on facts of  each case and is liable to be tried by the Court, if raised,  which, as noted above, is not the case here. 19.     We may now advert to the other aspect of the  matter, viz. whether or not leave to amend the  petition/plaint was granted by the subordinate Judge in  accordance with the principles regulating amendments of  pleadings?

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20.     Principles governing amendment of pleadings are  well-settled.  Order VI Rule 17 C.P.C. deals with the  amendment of pleadings and provides that the Court may  at any stage of the proceedings allow either party to alter  or amend pleadings in such a 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.  It is  trite that though an amendment cannot be claimed as a  matter of right under all circumstances, yet the power to  allow the amendment is wide and can be exercised at any  stage of the proceedings in the interest of justice.  It is  equally well-settled that unless serious injustice or  irreparable loss is likely to be caused to the other side,  the Court should adopt liberal approach and not a hyper-  technical approach particularly in a case where the other  side can be compensated with costs.  Dominant object to  allow the amendment in the pleadings liberally is to avoid  multiplicity of proceedings (See: L.J. Leach & Co. Ltd. &  Anr. Vs. M/s. Jardine Skinner & Co. , Smt. Ganga Bai  Vs. Vijay Kumar & Ors.  and B.K. Narayana Pillai Vs.  Parmeswaran Pillai & Anr.   Nevertheless, one distinct  cause of action cannot be substituted for another nor the  subject-matter of the suit can be changed by means of an  amendment.  The following passage from the decision of  the Privy Council in Ma Shwe Mya Vs. Maung Mo  Hnaung , succinctly summarises the principle which  may be kept in mind while dealing with the prayer for  amendment of the pleadings:         "All rules of court are nothing but provisions  intended to secure the proper administration  of justice, and it is therefore essential that they  should be made to serve and be subordinate to  that purpose, so that full powers of  amendment must be enjoyed and should  always be liberally exercised, but nonetheless  no power has yet been given to enable one  distinct cause of action to be substituted for  another, nor to change, by means of  amendment, the subject-matter of the suit."

21.     Having briefly noted the principles governing  amendment of pleadings, we may advert to the facts of  the present case. 22.     Incidentally, the order passed by the subordinate  Judge allowing the amendment application has not been  filed but learned counsel appearing for both the parties  have stated before us that it was identical to the one  passed in the Application under Section 80(2) C.P.C. (I.A.  No. 3 of 1993), extracted above.  Before the High Court it  was argued on behalf of the State and so before us that  since the amendment prayed for had the effect of  changing the nature and character of the suit, it could  not be allowed.  However, we find that though the  submission has been noted but somehow in the  impugned judgment the High Court has altogether  omitted to deal with the aspect of amendment of the  plaint and straight away proceeded to decide the claims  on merits. Initially filed as a petition under Sections 8  and 20 of the Arbitration Act, by means of an application  under Order VI Rule 17 C.P.C. it was sought to be  converted into a civil suit.  It is pleaded before us that the  original petition was also, in fact, in the nature of a civil  suit as the court fee paid was much more than what was  required to be paid on a petition under the Arbitration

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Act.  We are of the considered view that in the absence of  any finding by the High Court on this aspect of the  matter, it will not be proper for us to comment on the  validity of the order passed by the subordinate Judge on  contractor’s application seeking amendment of the  plaint/petition, particularly when, as noted above, the  High Court, in its order dated 13.11.1992 had observed  that in the absence of any claim for a specified amount,  the suit, originally filed by the contractor, was not  maintainable. We feel that certain factual aspects may  also have to be gone into by the High Court in the First  Appeals filed by the State, wherein orders passed by the  subordinate Judge on 2.2.1993 (in I.A. Nos. 1 and  3/1993) had been challenged. Under these  circumstances, we deem it just and proper to remand the  matter back to the High Court for consideration of the  issue with regard to the maintainability and the merits of  the application filed by the contractor under Order VI  Rule 17 C.P.C. 23.     In the result, the appeals filed by the State are  allowed to the extent indicated above.  We may, however,  clarify that we have not expressed any opinion on the  merits of the decree passed by the subordinate Judge  and upheld by the High Court.  We keep the issue open.  It will be open to the parties to take recourse to  appropriate proceedings, including revival of the present  appeals, after the High Court has rendered its decision  on the afore-noted issue.  The parties are, however, left to  bear their respective costs.