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Saiyed Mushtaq Ali Khan Vs. National Fire and General Insurance Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtDelhi High Court
Decided On
Case NumberCivil Miscellaneous (Main) Appeal No. 875 of 1976 and Regular First Appeal No. 183D of 1963
Judge
Reported inILR1977Delhi699
ActsCode of Civil Procedure (CPC), 1908 - Sections 152
AppellantSaiyed Mushtaq Ali Khan
RespondentNational Fire and General Insurance Co. Ltd.
Advocates: V.B. Raju,; Hari Shankar and; S.C. Dhanda, Advs
Cases ReferredUnion of India v. Lakhpat
Excerpt:
the case discussed the general principles relating to amendment of pleadings under section 152 and 153 of the civil procedure code, 1908 - it was held that an appeal filed against non existence party was a nullity and the amendment could not be allowed with retrospective effect - - the court always gives leave to amend the pleading of a party unless it is satisfied that the party applying was acting mala fide or that by his blunder he had caused injury to his opponent which may not be compensated for by an order of costs......the appellant/applicant filed a suit for recovery of rs. 52,928.66 against m/s. national fire & general insurance co. ltd., new delhi.during the pendency of the suit m/s. national fire & general insurance co. ltd. was amalgamated into the oriental fire & general insurance co. ltd. and thus ceased to exist as an independent legal entity. this amalgamation was ordered by the bombay high court. on july 20, 1963 the applicant (the plaintiff in the suit) moved an application in the court of the commercial sub-judge, 1st class. delhi, slating that inasmuch as the oriental fire & general insurance co. ltd. was the successor company of the original defendant, the national fire & insurance co. ltd., the former be imp leaded as a defendant. this application was allowed by the trial court.....
Judgment:

Prakash Narain, J.

(1) This application which came up for hearing before us on February 7, 1977 after notice to M/s. Oriental Fire and General Insurance Co. Ltd. was dismissed by us by staling that for reasons to be recorded hereafter the application is dismissed. We now proceed to record our reasons.

(2) The appellant/applicant filed a suit for recovery of Rs. 52,928.66 against M/s. National Fire & General Insurance Co. Ltd., New Delhi.During the pendency of the suit M/s. National Fire & General Insurance Co. Ltd. was amalgamated into the Oriental Fire & General Insurance Co. Ltd. and thus ceased to exist as an independent legal entity. This amalgamation was ordered by the Bombay High Court. On July 20, 1963 the applicant (the plaintiff in the suit) moved an application in the court of the Commercial Sub-Judge, 1st Class. Delhi, slating that inasmuch as the Oriental Fire & General Insurance Co. Ltd. was the successor company of the original defendant, the National Fire & Insurance Co. Ltd., the former be imp leaded as a defendant. This application was allowed by the trial Court and it directed that the amendment prayed for be made in the plaint with the result that the Oriental Fire & General Insurance Co. Ltd. stood substituted as the defendant in place of National Fire & General Insurance Co. Ltd. The suit was decided by the judgment and decree dated Sept. 9, 1963. At that time. the only defendant on record was the Oriental Fire & General Insurance Co. Ltd., the former defendant, the National Fire & General Insurance Co. Ltd., having ceased to exist. By some inadvertence the memo of parties in the trial Court was not corrected and it continued to show the National Fire & General Insurance Co. Ltd. as the defendant. The judgment and the decree also showed the National Fire & General Insurance Co. Ltd. as the defendant. The applicant filed R.F.A. 183-D of 1963 citing only the National Fire & General Insurance Co. Ltd., New Delhi, as the respondent. The appeal was admitted and notice was issued to the named respondent. It seems the notice was served on the Oriental Fire & General Insurance Co. Ltd. In consequence, the said company, through its counsel, moved C.M. 178 of 1974 in the High Court setting out the above facts and praying that the appeal be dismissed as not maintainable having been filed against a non-existent respondent. Notice of this application was given to the appellant who filed his reply on October 7, 1974. In that reply it was prayed that the application of the Oriental Fire & General Insurance Co. Ltd. be dismissed and the title of the appeal be corrected under Section 152 read with Section 153 Civil Procedure Code . A Bench of this court on September 10, 1974 ordered that this application, viz., C.M. 178 of 1974, will be heard along with the appeal. The present application has been moved praying that the name of Oriental Fire & General Insurance Co. Ltd. may be substituted for the National Fire & General Insurance Co. Ltd. It has further been stated in this application that the correction in the trial Court could not be made as judgment was pronounced in the main suit on the same day on which the amendment of the name of the defendant was permitted by the trial Court.

(3) Two things arc absolutely clear on a perusal of the above facts.First, that the applicant was aware prior to the filing of the appeal that the National Fire & General Insurance Co. Ltd. has ceased to exist; and secondly, that despite this awareness the appeal was filed against a non-existent party. What has been urged is that the appeal was filed against a non-existent party because the defendant's name as shown in the judgment and decree of the trial Court was the National Fire & General Insurance Co. Ltd.

(4) Learned counsel for the applicant has urged that the appellant should not be made to suffer for the mistake of the trial Court which did not correct its record despite allowing the application of the plaintiff to substitute Oriental Fire & General Insurance Co. Ltd. in place of the National Fire & General Insurance Co. Ltd. It has also been urged that reading Sections 152 and 153 Civil Procedure Code . and Order 22, rule 10 Civil Procedure Code . the powers of the court are wide enough to allow the substitution even at this stage mistake. The contention on behalf of the applicant has been opposed on behalf of the Oriental Fire & General Insurance Co. Ltd. It has been urged that the appeal was filed against a non-existent person despite the appellant being aware of the changed situation and now if the substitution is allowed, it will amount to filing of a fresh appeal which would be time-barred.

(5) Mr. V. B. Raju, who appeared on behalf of the applicant, relied on three decisions in support of his contention. The decisions relied upon were Jai Jai Ram Manohar Lal v. National Building Material Supply, Gurgaon, : [1970]1SCR22 , Smt. Ganga Bai v. Vijay Kumar and others, : [1974]3SCR882 , and Shanti Kumar R. Canji v. The Home Insurance Co. of New York, : [1975]1SCR550 .

(6) In the case of Jai Jai Ram Manohar Lal, the Supreme Court was concerned with the question of when amendment of a plaint should be allowed. In this case, what was observed was that the rules of procedure are intended to be a hand-maid to the administration of justice and so, a party cannot be refused relief merely because of some mistake, negligence, inadvertence or even infraction of the rules of procedure. The court always gives leave to amend the pleading of a party unless it is satisfied that the party applying was acting mala fide or that by his blunder he had caused injury to his opponent which may not be compensated for by an order of costs. It was further observed that, however negligent or careless may have been the first omission and however late the proposed amendment, the amendment may be allowed if it can be made without injustice to the other side.

(7) In the case of Smt. Ganga Bai, once again the Supreme Court was concerned with the question whether the High Court was right in granting the amendment application to amend a memo of parties. By the proposed amendment the appellants prayed that they be granted leave to challenge the preliminary decree passed by the trial Court. The original appeal had been filed by the appellants challenging only a finding that the partition was a sham and colourable transaction and tended to defeat or delay the rights of the creditors. The only prayer in appeal was that the partition-deed be declared as genuine. The original appeal was not directed against any part of the preliminary decree but against a mere finding recorded by the trial Court that the partition was not genuine. It was in this context that the discretion of the court to allow amendment came up for comment. Holding that the High Court was in error in allowing amendment of the memo of appeal, it was observed that the discretion had not been correctly exercised.

(8) In Shanti Kumar R. Canji's case, the Supreme Court upheld the view of the High Court that the trial Court had erred in exercising its discretion in allowing the amendment which, in the circumstances of the case, took away from the defendant the defense of immunity from any liability by reason of limitation.

(9) None of the three cases relied upon by learned counsel for the applicant really support him. All these cases are on the question as to whether an amendment should or should not be allowed. The question before us is not one of amendment of pleadings or memo of appeal or even the memo of parties. Similarly, the question before us is not one of substitution of legal representatives in place of a dead party or substitution of parties. The point before us is that the appeal has been filed against a non-existent party. It was known to the applicant when he filed the appeal that the respondent cited in the memo of appeal and the memo of parties was non-existent. The applicant by the present application and C.M. 178 of 1974 seeks that the appeal be treated as one fixed against Oriental Fire and General Insurance Co. .Ltd. In our view, this cannot be allowed. The applicant knew before he filed the appeal that the National Fire & General Insurance Co. Ltd. has ceased to exist and had itself brought this fact out in the trial Court prior to the passing of the decree under appeal. The mere mention of the National Fire & General Insurance Co. Ltd. as the defendant in the certified copies of the judgment and decree, when admittedly on the applicant's own showing the substitution in the trial Court was allowed though possibly on the same date on which the judgment dismissing the suit was announced, cannot be treated as sufficient cause for the applicant to ignore the true party against whom his alleged cause of action subsists. There is no question of the applicant having been misled by a wrong recital in the title of the case in the certified copies. Under these circumstances, in our opinion, it is not a case of misdescription of respondents or any inadvertence or anyone being misled by any error of the court. It is a case of an appeal having. been filed against a non-existent party, which is, thereforee, in our opinion, a nullity. If the amendment is to be allowed with retrospective effect, it would put a premium on gross negligence because the appeal would be deemed to have been filed against Oriental Fire & General Insurance Co. Ltd. If, on the other hand, the amendment is to be taken as a fresh appeal on the date of the amendment, the appeal will be barred by time and liable to be dismissed. The amendment would, thereforee, be futile and the court would not grant a futile amendment. We are reminded of the observations of the learned Chief Justice of India in Shanti Kumar R. Canji's case that an amendment which takes. away from the defendant the defense of immunity from any liability by reason of limitation, would amount to the exercise of discretion which is not warranted by law. As was observed in the said case, 'In such a case, it would not be adding a new party or substituting a new party for the original one, but perfecting the identity of the party originally imp leaded clearing or rectifying the inaccurate description. When the same person, whether an individual or a legal entity, remains the defendant but only the name is altered, it would be a case of mids-description. Where a new legal entity is substituted, it was held in the M. B. Sirkar case (supra) that substitution of a company for a firm would be a change of a substantial character affecting the right of aparty. .... .The right to claim that an introduction of a cause of action by amendment is barred by limitation is founded on immunity from a liability. A right is an averment of entitlement arising out of legal rules. A legal right may be defined as an advantage or benefit conferred upon a person by rule of law. Immunity in short is no liability. It is an immunity from the legal power of some other person. The correlative of immunity is disability. Disability means the absence of power. The appellant in the present case because of the limitation of the cause of action has no power to render the respondent liable for the ''alleged claim. The respondent has acquired by reason of limitation immunity from any liability.'

(10) In our view, the present case is similar to the one in the Supreme Court. The immunity by limitation available to Oriental Fire & General Insurance Co. Ltd. cannot be denied by the amendment sought. We arc further fortified in coming to this conclusion by a. Bench decision of this court in Union of India v. Lakhpat, (1970) T.L.R Del 846

(11) We, thereforee, dismiss not only C.M. 875 of 1976 but also C.M. 178 of 1974.


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