REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
1 CIVIL APPEAL NO. 3295 OF 2012
(Arising out of S.L.P. (Civil) No. 27961 of 2010)
Rameshkumar Agarwal .... Appellant(s)
Versus
Rajmala Exports Pvt. Ltd. & Ors. .... Respondent(s)
2
J U D G M E N T
P.Sathasivam,J.
1) Leave granted.
2) This appeal is directed against the final judgment and order
dated 08.06.2010 passed by the High Court of Judicature at Bombay in Appeal
No. 40 of 2010 in Chamber Summons No. 1233 of 2008 in Suit No. 2374 of 2007
whereby the High Court disposed of the appeal filed by the appellant herein
by partly allowing Chamber Summons No. 1233 of 2008 filed by respondent
No.1 herein for amendment in the plaint.
3) Brief facts:
(a) The property (Bungalow) in question was constructed by the late
Ganpatrai Agarwal, father of the appellant herein. Vipin Kumar Agarwal,
respondent No.4 is the brother of the appellant. The land on which the
said bungalow is constructed is a leasehold property and belongs to Hatkesh
Co-operative Housing Society Limited (hereinafter referred to as "the
Society"). The Society granted leasehold rights in respect of the said
plot by indenture of lease dated 22.02.1976. The mother of the appellant
passed away in 1991 and his father also passed away in 2002. After the
death of the parents, the appellant holds 50% share in the suit property
and his brother, respondent No.4 herein, also holds remaining 50% share in
the suit property.
(b) According to the appellant, in the year 2002, for setting up a new
business, he was in need of substantial finance and for that purpose, he
approached respondent No.1-Company through its Director Mr. Rajendra Kumar
Aggarwal, who is his co-brother. Respondent No.2 agreed to finance the
proposed projects on the condition that some documents are required to be
executed as security. In 2006, the appellant signed an agreement with the
Company promising to give his share in the bungalow as a security for the
loan. The said agreement was to be acted only when the Company will give
an advance loan of Rs.1,85,00,000/- and further upon failure of the
appellant to repay the same within a period of two years from the date of
disbursement of the full amount of loan with interest @ 12% p.a. Even
before getting the loan amount, the appellant herein signed the agreement.
Due to adverse market conditions, the appellant did not go ahead with the
proposed project and did not take any kind of financial assistance from
respondent No.1 - Company and respondent No.2 - co-brother of the
appellant.
(c) According to respondent No.2, the appellant signed an agreement for
sale on 02.02.2006 for selling 50% of his undivided right, title and
interest in the suit property. On 16.08.2007, respondent No.1-Company
filed a suit for specific performance being Suit No.2374 of 2007 before the
High Court of Bombay alleging that the appellant herein had agreed to sell
his 50% share in the suit property to the Company for a consideration of
Rs.1,85,00,000/- and also alleged that the appellant ensured that
respondent No.4 - the brother of the appellant would sell his 50% undivided
share in the property to the Company for Rs.3,00,00,000/- and represented
him as an agent of respondent No.4. On 06.09.2007, respondent No.1 -
Company took out Notice of Motion No.3241 of 2007 in which an ex-parte ad
interim order was passed in their favour.
(d) The appellant herein sent a letter dated 10.09.2007 through his
advocate to respondent Nos. 1 & 2 for seeking details of the consideration
of Rs.1,85,00,000/- and also for inspection of various documents referred
to and relied on by them in the plaint as well as in the Notice of Motion.
After inspecting the documents, the appellant filed a reply and prayed for
vacating of the ex-parte ad interim order dated 06.09.2007. After hearing
the parties, the High Court, by order dated 26.11.2007, vacated the ex-
parte ad interim order. On 20.08.2008, respondent No.1-Company took out
Chamber Summons No. 1233 of 2008 in Suit No. 2374 of 2007 with a prayer to
amend the plaint by impleading other parties. The appellant herein opposed
the same. However, by order dated 21.11.2009, learned Single Judge of the
High Court partly allowed the Chamber Summons.
(e) Against the order dated 21.11.2009, the appellant herein preferred an
appeal before the Division Bench being Appeal No. 40 of 2009 in Chamber
Summons No. 1233 of 2008 in Suit No. 2374 of 2007. By the impugned order
dated 08.06.2010, the Division Bench of the High Court dismissed the
appeal.
(f) Aggrieved by the said order of the High Court, the appellant has
filed this appeal by way of special leave before this Court.
4) Heard Mr. Shekhar Naphade, learned senior counsel for the appellant,
Mr. Gaurav Agrawal, learned counsel for respondent Nos. 1-3 and Mr. Vinay
Navare, learned counsel for respondent No.4.
5) After filing a suit for specific performance in the year 2007, the
plaintiff filed Chamber Summons No. 1233 of 2008 for amendment of plaint
for impleadment of two parties as plaintiff Nos. 2 & 3 and three parties as
defendant Nos. 3,4 & 5 apart from the fact that he wants to explain how
money was paid. A perusal of the amendment application shows that
plaintiff by this amendment seeks to incorporate certain facts, which
according to him, establish that an aggregate amount of Rs. 2,05,00,000/-
was paid by him and the proposed plaintiffs prior to the suit agreement;
that defendant No.1 confirmed having received the payment from the
plaintiffs in the name of his nominees, namely, proposed defendant Nos. 3-5
and the receipt of the amount was reflected in the accounts of proposed
defendant Nos. 3-5. It is also projected that the proposed amendment is
limited to the extent of contending that defendant Nos. 1 and 2 and the
proposed defendants treated the payment made by the plaintiffs to defendant
Nos.3 to 5 as payment having been made to defendant No.1. Though the
appellant herein - defendant No.1 therein, contended that the proposed
amendment altered the cause of action, after perusal of the entire
averments, we are of the view that it merely introduce facts/evidence in
support of the contention already pleaded, viz., that the entire
consideration under the agreement has been paid. In the original plaint,
the details of payment of consideration have not been stated and by the
present amendment, the plaintiff wants to explain how money was paid.
Accordingly, there is no inconsistency in the case of the plaintiff. The
claim that the present amendment being barred by limitation is also rightly
rejected by the Courts below. In fact, the learned single Judge allowed
the Chamber summons only to the extent of prayers (a) and (b) subject to
clarification made in paragraph 14 of his order.
6) Order VI Rule 2 of the Code of Civil Procedure, 1908 (hereinafter
referred to as "the Code") makes it clear that every pleading shall contain
only a statement in a concise form of the material facts on which the party
pleading relies for his claim or defence but not the evidence by which they
are to be proved. Sub-rule (2) of Rule 2 makes it clear that every pleading
shall be divided into paragraphs, numbered consecutively, each allegation
being, so far as is convenient, contained in a separate paragraph. Sub-
rule (3) of Rule 2 mandates that dates, sums and numbers shall be expressed
in a pleading in figures as well as in words.
7) Order VI Rule 17 of the Code enables the parties to make amendment of
the plaint which reads as under;
"17. Amendment of pleadings - 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:
Provided that no application for amendment shall be allowed
after the trial has commenced, unless 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."
8) Order I Rule 1 of the Code speaks about who may be joined in a suit
as plaintiffs. Mr. Shekhar Naphade, learned senior counsel for the
appellant, after taking us through the agreement for sale dated 02.02.2006,
pointed out that the parties to the said agreement being only Rameshkumar
Agarwal, the present appellant and Rajmala Exports Pvt. Ltd., respondent
No.1 herein and the other proposed parties, particularly, Plaintiff Nos. 2
& 3 have nothing to do with the contract, and according to him, the Courts
below have committed an error in entertaining the amendment application.
In the light of the said contention, we have carefully perused the
agreement for sale dated 02.02.2006, parties to the same and the relevant
provisions from the Code. We have already pointed out that the learned
single Judge himself has agreed with the objection as to proposed defendant
Nos. 3-5 and found that they are not necessary parties to the suit,
however, inasmuch as the main object of the amendment sought for by the
plaintiff is to explain how the money was paid, permitted the other reliefs
including impleadment of plaintiff Nos. 2 & 3 as parties to the suit.
9) In Rajkumar Gurawara (Dead) Through L.Rs vs. S.K. Sarwagi & Company
Private Limited & Anr. (2008) 14 SCC 364, this Court considered the scope
of amendment of pleadings before or after the commencement of the trial.
In paragraph 18, this Court held as under:-
"...........It is settled law that the grant of application for
amendment be subject to certain conditions, namely, (i) when the
nature of it is changed by permitting amendment; (ii) when the
amendment would result in introducing new cause of action and intends
to prejudice the other party; (iii) when allowing amendment
application defeats the law of limitation........."
10) In Revajeetu Builders & Developers vs. Narayanaswamy & Sons & Ors.
(2009) 10 SCC 84, this Court once again considered the scope of amendment
of pleadings. In paragraph 63, it concluded as follows:
"Factors to be taken into consideration while dealing with
applications for amendments
63. On critically analysing both the English and Indian cases, some
basic principles emerge which ought to be taken into consideration
while allowing or rejecting the application for amendment:
(1) whether the amendment sought is imperative for proper and
effective adjudication of the case;
(2) whether the application for amendment is bona fide or mala
fide;
(3) the amendment should not cause such prejudice to the other
side which cannot be compensated adequately in terms of money;
(4) refusing amendment would in fact lead to injustice or lead
to multiple litigation;
(5) whether the proposed amendment constitutionally or
fundamentally changes the nature and character of the case; and
(6) as a general rule, the court should decline amendments if a
fresh suit on the amended claims would be barred by limitation on the
date of application.
These are some of the important factors which may be kept in
mind while dealing with application filed under Order 6 Rule 17. These
are only illustrative and not exhaustive."
11) It is clear that while deciding the application for amendment
ordinarily the Court must not refuse bona fide, legitimate, honest and
necessary amendments and should never permit mala fide and dishonest
amendments. The purpose and object of Order VI Rule 17 of the Code is to
allow either party to alter or amend his pleadings in such manner and on
such terms as may be just. Amendment cannot be claimed as a matter of
right and under all circumstances, but the Courts while deciding such
prayers should not adopt a hyper-technical approach. Liberal approach
should be the general rule particularly, in cases where the other side can
be compensated with costs. Normally, amendments are allowed in the
pleadings to avoid multiplicity of litigations.
12) In view of the fact that the amendment application came to be filed
immediately after filing of the suit (suit came to be filed in 2007 and the
amendment application was in 2008) i.e. before commencement of the trial
and taking note of the fact that the learned single Judge confined the
relief only to a certain extent and also that in the proposed amendment the
plaintiff wants to explain how the money was paid, though necessary
averments in the form of foundation have already been laid in the original
plaint, we hold that by this process the plaintiff is not altering the
cause of action and in any way prejudice defendants.
13) By the present amendment, the plaintiff furnished more details about
the mode of payment of consideration. Accordingly, we hold that there is
no inconsistency and the amendment sought for is not barred by limitation.
We fully agree with the conclusion arrived at by the learned single Judge
and the Division Bench of the High Court.
14) In the light of what we have stated above, we do not find any merit
in the appeal, consequently, the same is dismissed. No order as to costs.
...........................................
J.
(P. SATHASIVAM)
...........................................J.
(J. CHELAMESWAR)
NEW DELHI;
MARCH 30, 2012.
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