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M/S. V.S. Lad and Sons and Others Vs. Sociedade De Fomento Industrial Private Limited - Court Judgment

LegalCrystal Citation
CourtKarnataka Dharwad High Court
Decided On
Case NumberW.P.No.63426 of 2011 (GM-CPC)
Judge
Reported in2012(3)KCCR1986
AppellantM/S. V.S. Lad and Sons and Others
RespondentSociedade De Fomento Industrial Private Limited
Advocates:For the Appellants: Uday Holla, Sr. Counsel for Smt. Poonam Patil, Shivaraj C. Bellakki, Advocates. For the Respondent: S.S. Naganand, Sr. Counsel for K.L. Patil, Advocate.
Excerpt:
limitation act, 1963 - section 3 -.....failed to supply the ore despite requests made and notice issued, the plaintiff filed the above suit. plaintiff contended that the cause of action for the suit arose for the first time in november 2004 when the defendants failed to supply the ore and further the cause of action arose on 03.11.2005 when the defendants neglected the agreement dated 12.07.2004 by refusing to perform the agreement though called upon to do so as per fax message dated 03.11.2005 3. defendant nos.1 and 2 filed the written statement contesting the relief sought in the plaint. they contended that for the year 2004-05, defendant no.1 firm supplied certain quantity of iron ore and after such supply, plaintiff did not make any further requests. that, in the arrangement made for the year 2004 on 12.07.2004 fresh.....
Judgment:

(Prayer: This writ petition is filed under Articles 226 and 227 of the Constitution of India, praying to quash the order dated 18.04.2011 on I.A.No.4 passed in O.S.No.89/2007 on the file of the learned Senior Civil Judge at Kudligi vide Annexure-A.)

1. The defendants in O.S.No.89/2007 have filed this writ petition challenging the order dated 18.04.2011 passed by the learned Senior Civil Jude, Kudligi, allowing I.A.No.4 filed by the plaintiff-respondent herein seeking amendment of the plaint.

2. The respondent has filed the suit seeking a decree of specific performance of the agreement dated 12.07.2004 for supply of the short delivered quantity of iron ore fines of certain specifications. In the suit, the plaintiff has contended that the agreement inter alia provided for supply of three lakh tones of iron ore fines per year having certain identified specifications. The plaintiff contended that it was agreed between the parties that three lakh tones of iron ore fines per year would be supplied without fail spread out evenly throughout the year; and the costs of the supplies were also agreed upon. It is further contended by the plaintiff that this agreement was acted upon from April 2004 to August 2004 and the plaintiffs fully paid the defendants for the ore supplied. However, from November 2004 onwards, the ore was not supplied on the pretext that the mine was closed, for which the plaintiff did not make any issue. But, the defendants failed to supply the ore as per the agreement even after the situation in the mine returned to normalcy and the production re-commenced. This resulted in heavy loss to the plaintiff. As the diverse sale commitments of the plaintiff was seriously affected by the non-supply and as the iron ore of the grades and specifications specified in the agreement dated 12.07.2004 was not an ordinary article of commerce easily obtainable in the market and as the defendants failed to supply the ore despite requests made and notice issued, the plaintiff filed the above suit. Plaintiff contended that the cause of action for the suit arose for the first time in November 2004 when the defendants failed to supply the ore and further the cause of action arose on 03.11.2005 when the defendants neglected the agreement dated 12.07.2004 by refusing to perform the agreement though called upon to do so as per fax message dated 03.11.2005

3. Defendant Nos.1 and 2 filed the written statement contesting the relief sought in the plaint. They contended that for the year 2004-05, defendant No.1 firm supplied certain quantity of iron ore and after such supply, plaintiff did not make any further requests. That, in the arrangement made for the year 2004 on 12.07.2004 fresh price was fixed and the plaintiff did not make any demand for the supply of iron ore and hence there was no supply. They also contended that from 2004 onwards the plaintiff-company snapped all ties of arrangement for supply of iron ore. The alleged agreement, according to the defendants, did not confer any right on the plaintiff or impose any liabilities that could be enforced. It was also contended that the plaintiff itself having abandoned the arrangement could not turn back and seek for enforcement.

4. It is submitted at the bar that there was an interim mandatory injunction issued against the defendants to supply the iron ore fines, but the same was set aside by this Court and the said order came to affirmed by the Apex Court.

5. I.A.No.4 with which we are now concerned came to be filed seeking amendment of the plaint for incorporating an alternative prayer for a decree for payment of compensation to the plaintiff by the defendants in a sum of Rs.1,54,13,91,765.27 with interest at 12% or at such other rate as may be determined by the court. Certain averments in support of the alternative relief were also sought to be incorporated in the plaint in paragraph 33(a) to 33(o) of the plaint.

6. This application was resisted by the defendants contending inter alia that the application itself was not maintainable as the said application if allowed would change the very nature of the suit and that the relief claimed for compensation was barred by time.

7. The Trial Court on consideration of the nature of the amendment and the stage at which, it was sought and by referring to the provisions contained under Section 21 of the Specific Relief Act, 1963, has allowed the application permitting the amendment sought. As regards the point of limitation raised, the Trial Court has observed that the said question was to be decided at the time of trial as the issue of limitation was a question of fact that had to be decided on evidence adduced by the respective parties. The Trial Court has allowed the amendment by imposing cost of Rs.2,000/-.

8. Learned Senior Counsel Mr. Uday Holla appearing for the petitioners-defendants submits that the cause of action as pleaded in the plaint has arisen on 01.11.2004 at the first instance and subsequently on 03.11.2005, whereas the amendment of the plaint was sought on 21.07.2010, which is well beyond the period of limitation of three years prescribed for filing the suit seeking compensation for breach of the contract. He draws the attention of the Court to Section 3 of the Limitation Act, 1963 to contend that any suit instituted after the period of limitation is liable to be dismissed regardless of any plea of bar of limitation set up in this connection. He invites the attention of the Court to Articles 54 and 55 of the Limitation Act to contend that as per plaintiff’s own showing the contract was broken during November 2005 and therefore if at all a fresh suit were to brought by the plaintiff, it could have been brought on or before 03.11.2008 and therefore the present application filed on 21.07.2010 could not be entertained as otherwise it will tantamount to permitting the plaintiff to seek a time barred claim. He invites the attention of the Court to Section 5 of the Limitation Act to contend that in the absence of any explanation for the delay, the amendment could not have been allowed. He has placed reliance on the judgment of the Apex Court in the case of shiv gopal SAH ALIAS SHIV GOPAL SAHU VERSUS SITA RAM SARAUGI and OTHERS- (2007) 14 SCC 120, to contend that where the claim of the plaintiff was barred by limitation and the amendment application did not show any explanation for filing the amended claim belatedly, it was held that the plaintiff was not entitled to introduce such a claim. Reliance is also placed on the judgment in the case Of JAGDISH SINGH VERSUS NATTHU SINGH - (1992) 1 SCC 647.Attention of the Court is invited to paragraph 16 of this judgment. Placing reliance on the judgment in the case of revajeetu builders and developers vERSUs narayanaswamy and sons and others - (2009) 10 scc 84,he has contended that the Court should decline, as a general rule, amendment of the plaint if a fresh suit on the amended claims would be barred by limitation on the date of application. Alternatively, Mr. Holla has contended that the Court below ought to have kept the plea of limitation open while allowing the application.

9. Mr. Naganand, learned Senior Counsel representing the plaintiff-respondent herein, at the outset, contends that the scope of Article 227 is limited to correcting the jurisdictional errors committed by the subordinate courts or tribunals and that a mere incorrect or wrong decision will not warrant interference. In this regard, he has placed reliance on the judgment in the case of mohd. yunus vERSUs mohd. mustaqim and others- 1983 (4) scc 566and also the judgment in the case of jasbir singhVERSUSstate of punjab- (2006) 8 SCC 294.

10. Taking me through the provisions contained under Section 21 of the Specific Relief Act and the judgment of the Apex Court in the case of jagdish singh vERSUS natthu singh- (1992) 1 SCC 647referred to herein above, he contends that proviso to sub-section (5) of Section 21 made it very clear that in a case where the plaintiff has not claimed any compensation while presenting the plaint seeking specific performance of the contract, the Court shall, at any stage of the proceedings allow the plaintiff to amend the plaint on such terms as may be just, for including a claim for such compensation. In this connection only, learned Senior Counsel has placed reliance on the judgments in the case of LAKSHMI RAMAN MALU VERSUS SMT. VENKTAMMA and ANOTHER -ILR 2000 KAR 4746, JAGDISH SINGH and OTHERS VERSUS HAR SARUP - AIR 1978 DELHI 233,and in the case of SINGILIDEVI VEERA VENKATA ANANTHALAKSHMI and ANOTHER VERSUS BHAMIDIPATI SEETHARAMAYYA (DIED) and ANOTHER - 2004 (1) ALD 51.Attention of the Court is also drawn to the decisions of the Apex Court in the case of PANKAJA and ANOTHER VERSUS YELLAPPA (D) BY LRS and OTHERS - AIR 2004 SC 4102,to contend that amendment sought after substantial delay could be allowed in appropriate cases, if that sub-serves the cause of justice and avoids further litigation. He has also relied upon the judgment in SAMPATH KUMAR VERSUS AYYAKANNU and ANOTHER - AIR 2002 SC 3369, to substantiate his contention that the stage at which the suit is pending is required to be taken note of white permitting the amendment of the plaint, in as much as, pretrial amendments are allowed liberally than those which are sought after the commencement of the trial.

11. In the light of the rival contentions, the only point that arises for consideration is, "whether the order passed by the court below allowing the amendment of the plaint permitting the plaintiff to incorporate the alternative relief for a decree for payment of compensation in the suit filed for specific performance of the contract warrants interference by this Court in exercise of the power under Article 227 of the Constitution of India?"

12. At the outset, it has to be stated with reference to the scope of powers of this Court under Article 227 of the Constitution of India that the exercise of jurisdiction is limited and restrictive in its nature. In normal circumstances, this power is exercised for want of jurisdiction, gross violation of rules of natural justice, apparent errors of law. In fact, this position is made clear in the judgment of the Apex Court in the case of ESSEN DEINKI VERSUS RAJIV KUMAR - (2002) 8 SCC 400and also the judgment in the case of surya dev rai vERSUs ram chander rai and others -(2003) 6 SGC 675. Therefore, if there is a gross illegality committed leading to miscarriage of justice, this Court in exercise of the power under Article 227 can interfere in the matter, otherwise no such interference is called for.

13. In the instant case, while filing the suit, the plaintiff has only sued for specific performance and did not seek the relief of compensation for breach of contract either in addition to the relief sought or by way of an alternative prayer. The relevant provisions contained in Section 21 of the Specific Relief Act, 1963, can be usefully referred in this connection.

"21. Power to award compensation in certain cases.- (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 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 (9 of 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 proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation."

14. As is clear from the proviso to sub-clause (5) of Section 21, where the plaintiff has not claimed any such compensation, in lieu of or in addition to specific performance, the Court shall allow the plaintiff to amend the plaint on such terms as may be just for including a claim for compensation. In the case of jagdish singh VERSUSnatthu singh- (1992) 1 SCC 647,the Apex Court has traced the historical background of the provisions of Section 21 of the Specific Relief Act and of its predecessor in Section 19 of the 1877 Act. It is observed that the provisions of Section 21 were intended to resolve certain divergences of judicial opinion in the High Courts on some aspects of the jurisdiction to award compensation and sub-section (5) sought to set at rest such divergence regarding the need for a specific claim in the plaint to grant the compensation. The Apex Court has made reference to Lord Cairn's (Chancery Amendment) Act, 1858, which sought to confer jurisdiction upon equity courts to award damages in substitution or in addition to specific performance. In paragraph 16 of the said judgment, referring to the proviso to sub-section (5) of Section 21, the Apex Court has held that if the amendment sought by the plaintiff relates to the relief of compensation in lieu of or in addition to specific performance, the Court will allow the amendment at any stage of the proceedings.

15. In the instant case, plaintiff is seeking by way of amendment of the plaint, alternative relief of compensation in case the court were to come to the conclusion that the relief of specific performance could not be granted. Though learned Senior Counsel Mr. Holla contends that the proviso to sub-section (5) of Section 21 cannot be read so as to render the provisions of the Limitation Act inapplicable or redundant, I refrain from dealing with this question as the Court below has observed that the question of limitation was a matter to be tried along with the main issues and the same need not be gone into at the stage of consideration of the application. Suffice to observe that in the light of the proviso to sub-section (5) of Section 21 of the Specific Relief Act, the Court below was right and justified in passing the impugned order. As the court below has taken care to observe that the plea of bar of limitation will be tried along with the main matter, liberty is reserved to the defendants to request the court below to try the said question of bar of limitation along with the main matter.

16. In the light of the above, no case is made out of error of jurisdiction or apparent illegality in the order passed resulting in failure of justice, which warrants interference of this Court in exercise of the writ jurisdiction.

17. In the light of the provisions contained in the proviso to sub-section (5) of Section 21 of the Specific Relief Act and the judgment in Jagdish Singh'scase referred to and relied upon by the Trial Court and as issue of limitation is ordered to be tried along with the main matter, it is unnecessary to deal with all the other judgments referred to and relied upon by both the learned Senior Counsel. Writ petition, is therefore, dismissed.


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