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Manohar S/O. Dhundiraj Joshi Vs. Jhunnulal S/O. Hariram Yadao - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai High Court
Decided On
Case Number Civil Revision Application No. 45 of 1977 (Nagpur)
Judge
Reported in(1983)85BOMLR87; 1983MhLJ359
AppellantManohar S/O. Dhundiraj Joshi
RespondentJhunnulal S/O. Hariram Yadao
DispositionApplication allowed
Excerpt:
.....sale--plaintiff seeking to amend plaint to include reliefs for compensation and refund of earnest money--reliefs time-barred on date of amendment application--court whether bound to allow amendment at any stage of proceeding.;in enacting the provisos to sub-section (5) of section 21 and sub-section (2) of section 22, the legislature did not intend merely to confer discretionary power on the court to permit a plaintiff to amend his pleading to include reliefs for compensation and refund of earnest money at any stage of the proceeding put it intented to make it obligatory and imperative on the court to allow such amendment irrespective of the fact that such reliefs arc barred by limitation at the time when such amendment is sought.;ex-serviceman enterprises v. sumey singh [1976] a.i.r...........these submissions.21. (1) in a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance.(2) if, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly.(3) if, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him, such compensation.....
Judgment:

Ginwala, J.

1. The question which arises in this revision application is with regard to the scope of the power as conferred on a Court under the provisos to Sub-section (5) of Section 21 and Sub-section (2) of Section 22 of the Specific Relief. Act, 1963 (hereinafter referred to as 'the Act') to allow the plaintiff to amend his plaint so as to include a claim for compensation and refund of earnest money in a suit for specific performance of a contract for sale. This question arises on the following facts.

2. The applicant-plaintiff has instituted a suit against the non-applicant defendants for specific performance of a contract for sale of a house. In the plaint as originally filed the plaintiff had merely claimed specific performance of the said contract, but had not included the relief for compensation and refund of earnest money. During the pendency of the suit on March 5, 1976 the plaintiff applied for amendment of plaint so as to include the claim for compensation and refund of earnest money on the ground that he did not claim these reliefs in the plaint as filed originally in the belief that these reliefs could be included in 'any other relief' in the prayer clause. By this amendment the plaintiff sought to recover Rs. 7200 from the defendants on account of compensation and refund of earnest money as alternative to the claim for specific performance. The trial Court rejected this application holding that the suit was filed on March 18, 1971, while the amendment application was filed on March 5, 1976 and no satisfactory reasons were given for such an inordinate delay. It is against this order that the present revision application has been filed.

3. Mr. Deopujari the learned Counsel for the applicant-plaintiff submitted that in view of the provisos to Sub-section (5) of Section 21 and Sub-section (2) of Section 22 of the Act, the trial Court ought to have allowed the amendment to the plaint since under these provisos the Court is left with no other alternative, but to allow such amendment. He further submitted that at any rate allowing amendment of pleading is a rule within certain limitations and rejection is an exception.

4. Mr. G.J. Ghate the learned Counsel for non-applicant No. 1 however supported the impugned order on the ground that the application for amendment was not bona fide and no adequate reasons had been stated in it as to why the plaintiff could not have included those reliefs in the plaint as originally filed. He submitted that at the time when this application was filed, the claim for compensation and refund of earnest money had already become barred by limitation and hence in the absence of any extra-ordinary circumstances shown by the plaintiff the amendment could not have been allowed so as to divest the defendant of a valuable right which had accrued to him by lapse of time. He submitted that the phrase 'at any stage of proceeding' occurring in both the provisos does not permit the Court to allow an amendment to incorporate the relief for compensation or refund of earnest money which is already barred by limitation.

5. It is not disputed before me that on the day when the application for amendment to the plaint was made, the claim for compensation and refund of earnest money would have been barred by limitation. This Court in Parbhudas v. Lallubhai AIR[1932] Bom. 117 : (1931) 34 B.L.R. 35, Bai Kamala v. Shankarrao : AIR1943Bom407 , and Chunttal v. Abdul Daiuood AIR[1948] Bom. 140 : (1946) 49 B.L.R. 748 and the Privy Council in Bhagwanji v. Alembic Chemical Works have held that an amendment of plaint introducing a new claim which would have been barred by limitation at the time when the leave was sought cannot be allowed, unless there are exceptional circumstances. However, in A.K. Gupta & Sons Ltd. v. Damodar Valley Corporation : [1966]1SCR796 , the Supreme Court has laid down that as a general rule a party is not allowed by amendment to set up a new case or new cause of action, particularly when the suit on the new cause of action is barred. But at the same time the Supreme Court has further held that 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 would be allowed even after expiry of the statutory period of limitation. In laying down this rule the Supreme Court has observed as follows (at page 98):

(8) The principal reasons that have led to the rule last mentioned are, first, that the object of Courts and rules of procedure is to decide the rights of the parties and not to punish them for their mistake Cropper v. Smith (1884) 26 Ch D 700 , and secondly, that a party is strictly not entitled to rely on the statute of limitation when what is sought to be brought in by the amendment can be said in substance to be already in the pleading sought to be amended Kisandas Rupchand v. Rachappa Vithoba ILR(1909) 33 Bom. 664, approved in Pirgonda Hongontla Patil v. Kalgonda Sttidgonda : [1957]1SCR595 .

(9) The expression 'cause of action'' in the present context does not mean'' 'every lad which it is material to be proved to entitle the plaintiff to succeed' as was said in Cooke v. Gill (1873) S CP. 107, in a different context, for if it were so, no material tact could ever be amended or added and, of course, no one would want to change or add an immaterial allegation by amendment. That expression for tile present purpose only means, a new claim made on a new basis constituted by new facts. Such a view was taken in Hobinson v. Unicos Property Corporation Ltd. (1962) 2 All. E.R. 24, and it seems to us to be the only possible view to take. Any other view would make the rule futile. The words 'new case' have been understood to mean 'new set of ideas'; Dornan v. J.W. Ellis and Co. Ltd. (1962)1 All. E.R. 303. This also seems to us to on reasonable view to take. No amendment will be allowed to introduce a new set of ideas to the prejudice of any right acquired by any party by lapse of time.

The question now therefore arises is whether by seeking to include the relief for compensation and refund of earnest money the plaintiff was trying to set up a new case or new cause of action or it amounted merely to a different or additional approach to the same facts, A look at the application for amendment would show that the plaintiff wanted to introduce para 7(a) in the plaint, in which he states certain facts on which the claim for compensation is based. Obviously these facts were not in the plaint and in the absence of these facts the plaintiff would not have been entitled to the relief at least for compensation. Hence in so far as the additional relief for compensation is concerned, it has to be said that the plaintiff introduced a new case or a new cause of action as contemplated by the Supreme Court in Gupta's case (supra). Since this relief was barred by limitation the plaintiff would not have been allowed to amend the plaint to introduce it. However, the same could not be said with regard to the refund of earnest money. In that respect no new facts or new cause of action was being set up by the plaintiff and this relief is being sought to be introduced in the plaint only as an alternative relief to the relief for specific performance for which the suit had been filed. Normally the plaintiff in a suit for specific performance would be entitled to refund of earnest money, if the relief for specific performance is refused since this is just and equitable. Hence applying the principle in Gupta's case (supra) it would not be possible to say that the amendment with regard to the inclusion of relief for refund of earnest money could have been refused solely on the ground that the said relief was barred by limitation on the day when the amendment was sought. It is not possible to uphold the submission of Mr. Ghate that the application was not bona fide. As pointed out above, the plaintiff in the said application has stated that in the belief that the phrase 'any other relief' in the prayer clause would include this relief, he omitted to claim the said relief. It cannot be said that this was not bona fide or that the amendment application was filed with ulterior motive. However the question is whether the provisos to Sub-section (5) of Section 21 and Sub-section (2) of Section 22 of the Act leave no alternative to the Court but to allow the amendment at any stage of the proceeding irrespective of the fact that the reliefs for compensation and refund of earnest money are barred on the day when the amendment is sought, as submitted by Mr. Deopujari. It will be convenient to reproduce Sections 21 and 22 of the Act to understand these submissions.

21. (1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance.

(2) If, in any such suit, the Court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly.

(3) If, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him, such compensation accordingly.

(4) In determining the amount of any compensation awarded under this section, the court shall be guided by the principles specified in Section 73 of the Indian Contract Act. 1872.

(5) No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint:

Provided that where the plaintiff has not claimed any such compensation in the plaint the court shall at any stage of the proceeding allow him to amend the plaint on such terms as may be just, for including a claim for such compensation.

Explanation: The circumstance that the contract has become incapable of specific performance does not preclude the court from exercising the jurisdiction conferred by this section.

22. (1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure 1908, any person suing for the specific performance of a contract for the transfer of immoveable property may, in an appropriate case, ask for-

(a) possession, or partition and separate possession, of the property, in addition to such performance ; or

(b) any other relief to which he may be entitled, including the refund of any earnest, money or deposit paid or made by him in case his claim for specific performance is refused.

(2) No relief under Clause (a) or Clause (b) of Sub-section (1) shall be granted by the Court unless it has been specifically claimed :

Provided that where the plaintiff has not claimed any such relief in the plaint, the court .shall, at any stage of the proceeding, allow him to amend the plaint on such terras as may be just for including a claim for such relief.

(3) The power of the court to grant relief under Clause (b) of Sub-section (1) shall be without prejudice to its powers to award compensation under Section 21.

Sub-sections (1), (2) and (3) of Section 21 of the Act correspond to paras. 1, 2 and 3 of Section 19 of the Specific Relief Act, 1877 and Sub-sections (4) and (5) of Section 21 of the Act are newly added. It appears that there was no provision corresponding to Section 22 in the Act of 1877 and this section is a new addition to the provisions on the subject of specific relief. It is obvious that Sub-sections (4) and (5) of Section 21 and the whole of Section 22 have been introduced in the Act in order to avoid multiplicity of suits and proceedings. Section 21 and 22 enact a rule of pleading. The only question which falls for consideration is whether in enacting the provisos to Sub-section (5) of Section 21 and Sub-section (2) of Section 22 the Legislature intended to cast a duty on the Court to permit the amendment contemplated therein without leaving any discretion to it. This is more so because of the word 'shall' having been used in both these provisos.

6. No doubt the mere use of the word 'shall' is not indicative of the intention of the Legislature as to whether a particular provision is to be mandatory or directory. It would depend upon the context in which the word is used, the purpose which the provision in which it is used seeks to achieve, and the mischief which such provision seeks to redress. In construing such a provision its impact over corresponding or analogous legislation may also have to be taken into consideration.

7. Obviously these two provisos deal with the question of permitting the plaintiff to amend his plaint. It is not as if in the absence of these provisos a plaintiff would not have been permitted to carry out an amendment in his pleading by introducing a relief for compensation and refund of earnest money. Rule 17 of Order VI of the Code of Civil Procedure (hereinafter referred to as 'the Code') does confer power on a Court to allow a party to alter or amend his pleading in such manner and on such terms as may be just. This rule does not stop at that, but it further says that all such amendment should be made as may be necessary for the purpose of determining the real question in controversy between the parties. It is pertinent to note that this provision which empowers the Court in its discretion to permit a party to amend his pleadings, was already on the statute book when the Specific Relief Act, 1963 was enacted. It can, therefore, be presumed that when the latter legislation was on the anvil the Parliament was aware of this power of the Court to permit amendment of pleadings. It cannot be successfully urged that a suit for specific performance falling under the provisions of the said Act would not be governed by the provisions of the Code of Civil Procedure. It is, therefore, clear that to such a suit the provisions contained in Order VI, Rule 17 of the Code would apply and a plaintiff who has earlier failed to incorporate the reliefs for compensation and refund of earnest money could seek the permission of Court to introduce these reliefs by way of amendment. If the legislature intended that allowing such amendment should be left to the discretion of the Court, it would not have enacted the provisos to Sub-section (5) of Section 21 and Sub-section (2) of Section 22. It is well-known that the legislature normally does not enact a superfluous provision. It is therefore not possible to say that by enacting these two provisos the legislature once again wanted to invest the Court with discretionary power of permitting amendment of pleadings which power already existed under Order VI, Rule 17 of the Code. This gives a clue to the intention of the legislature in enacting the two provisos and particularly using the word 'shall' in both of them. In the context which I have stated above, it appears clearly to me that the legislature did not intend merely to confer discretionary power on the Court to permit a plaintiff to amend his pleading to introduce these two reliefs at any stage of proceeding, but it intended to make it obligatory and imperative on the Court to allow such amendment. As I have said above, the very idea in enacting Sub-sections (4) and (5) of Section 21 and Section 22 including Sub-section (2) thereof was to avoid and do away with the multiplicity of litigation. In my view, therefore, these two provisos do not merely confer discretionary power on the Court, but they make it obligatory on the Court to permit such amendments which come within their purview.

8. Mr. Deopujari has drawn my attention to the view taken by a learned single Judge of Delhi High Court in Ex-Servicemen Enterprises v. Sumey Singh AIR [1976] Di. 56, wherein the proviso to Sub-section (2) of Section 22 of the Act fell for consideration of the learned Judge. The learned Judge held that the term 'proceeding' was a comprehensive term which included execution proceeding also and the phrase 'at any stage' would also include the stage of execution. Thus according to the learned Judge, amendment as contemplated by the proviso could be carried out even at the stage of execution proceeding. Now with regard to the question whether the proviso is mandatory or directory, the learned Judge observed as follows (at page 59):

24. Amendment for including the relief of possession can be allowed 'on such terms as may be just'. These words also point in the same direction. Justice was the dominant idea in the mind of the Legislature at the time it was enacting the proviso. It knew, one would presume, of the difficulties which a litigant might face by omitting a relief to which lie may be entitled and which the section says he must ask for. The proviso says the court 'shall' allow the amendment. The words are emphatic and imperative.

This ruling of the Delhi High Court was considered by the Supreme Court in Babu Lal v. Hazari Lal Kishori Lal : [1982]3SCR94 in which the interpretation put by the learned single Judge of the Delhi High Court on the words and phrase 'proceeding' and 'at any stage' have been accepted by the Supreme Court. In both these cases the above said words and phrase have been construed in the context of Clause (a) of Sub-section (1) of Section 22 which deals with claim for possession or partition and separate possession of the property which is subject matter of the contract. In the case before me I am not so much concerned with the question whether this construction will also govern cases falling under Section 21 or Section 22(1)(b) and with the question whether both the provisos are mandatory. It is true that in Babu Lal's case (supra) the Supreme Court has not said anything about the view taken by the Delhi High Court with regard to the mandatory nature of the proviso, but at the same time it has to be noted that the said observations of the Delhi High Court have not been overruled or disapproved. It can therefore be said that the view of the learned single Judge of the Delhi High Court found favour with the Supreme Court. These two cases would support the view which I have taken above.

9. In my opinion, therefore, it was incumbent upon the trial Court to permit the plaintiff to amend the plaint as sought by him and the permission could not have been refused on the ground that it was inordinately delayed or that the claim for compensation or refund of earnest money was barred by limitation, at the time when the amendment was sought. I, therefore, find that the learned trial Judge has failed to exercise the jurisdiction which vested in him because of the two provisos. The said order would have therefore to be set aside and the trial Court will have to be ordered to allow the amendment.

10. The result therefore is that the revision application is allowed and the order passed by the trial Court on November 26, 1976 on the application filed by the applicant-plaintiff for amendment of the plaint on March 5, 1976 is hereby set aside and the plaintiff is permitted to carry out the amendment as sought by him. The parties are directed to appear before the trial Court on October 25, 1982. The costs of this revision application shall be costs in the suit.


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