Sh. Madhu Sudan Gupta vs Sh. Dinesh Gupta
2006 Latest Caselaw 1832 Del

JUDGMENT

Hima Kohli, J.

1. The question which is raised in the present appeal is whether the learned Single Judge has fallen in error in granting permission to the respondent/plaintiff to amend his plaint, by passing the impugned order dated 2nd December, 2004 on IA No.1900/2003 filed under Order VI Rule 17 read with Section 151 of the Code of Civil Procedure (CPC).

2. The brief facts relevant for disposing of the present appeal are that the respondent/plaintiff has filed a suit for specific performance of Agreement to Sell (hereinafter referred to as `the Agreement') dated 14th June, 1997 in respect of the first floor of property bearing No.D-43, N.D.S.E., Part-I, New Delhi. It is stated by the respondent/plaintiff in the suit that the appellant/defendant No.1 agreed to sell the aforementioned property to the respondent/plaintiff for a total sale consideration of Rs.36 lakhs. As per the averments made in para 2 of the plaint, it is stated as under:

That defendant No.1 entered into an agreement of sale on 14th Day of June, 1997 with the plaintiff in respect of Sale of First Floor of property bearing No.D-43, N.D.S.E.,Part-I, New Delhi for a total sale consideration of Rs.36,00,000/- (Rupees thirty six lac only) (hereinafter called the property). The defendant No.1 has received a sum of Rs.32,00,000/- (Rupees thirty two lacs only) which includes a sum of Rs.2,00,000/-(rupees two lacs) only paid by cheque No.777810 dated 14.6.1997 drawn on State Bank of India, Green Park Extn.New Delhi. The said cheque has since been got encashed by defendant No.1 through his bankers. The agreement to Sell was entered on 14.6.1997 and the defendant has acknowledged therein the receipt of sum of Rs.32,00,000/-(Rupees thirty two lacs) only.

3. By way of the proposed amendment application filed by the respondent/plaintiff on 11th February, 2003, he wanted to clarify the mode of payment of Rs.32 lakhs due to the appellant/defendant No.1. Accordingly, following addition was sought by the respondent/plaintiff in para 2 of the plaint by way of amendment:

The plaintiff had advanced a sum of Rs.17.5 lacs to the defendant No.1 and his wife Smt.Prakash Gupta from June, 1993. The defendant No.1 and his wife Smt.Prakash Gupta, executed the promissory notes in favor of Dinesh Gupta. The said promissory notes though are undated but the defendant No.1 and his wife acknowledged the payment of Rs.17.5 lacs with interest @ 24% p.a.to the plaintiff. Since the defendant No.1 fails to make the payment with interest to the plaintiff. The defendant No.1 thus on settlement had agreed to pay a sum of Rs.30.25 lacs to the plaintiff. Thus on execution of the agreement dated 14.6.1997 apart from advance of Rs.2 lacs vide cheque No.777810 also acknowledged the receipt of a payment of Rs.30 lacs from the plaintiff. In fact the amount of Rs.30 lacs which was to be paid by the defendant No.1 to the plaintiff was adjusted in the sale of the property.

4. It was submitted by the respondent/plaintiff that the proposed amendment was clarificatory in nature and did not change the basic nature of the suit and hence the same ought to be allowed. The said application was opposed by the appellant/defendant No.1 on the ground that the proposed amendment, if allowed, would permit the respondent/plaintiff to set up a new and different cause of action; that the proposed amendment was with reference to a plea which was barred by limitation and that the said amendment was not permissible inasmuch a report dated 23rd October, 2002 filed by the Central Forensic Science Laboratory (CFSL) in the suit proceedings, clearly opined that the Agreement dated 14th June, 1997, which was the basis of the plaint, was not signed by the appellant/defendant No.1 and the said report had not been disputed by the respondent/plaintiff, thus rendering the suit instituted by the respondent/plaintiff as not maintainable.

5. After hearing the parties, the learned Single Judge vide order dated 2nd December, 2004 allowed the amendment application filed by the respondent/plaintiff under Order VI Rule 17 of the CPC, subject to payment of Rs.5,000/- as costs to the appellant/defendant No.1. Aggrieved by the said order, the appellant/defendant No.1 has preferred the present appeal.

6. We have heard the learned Counsels for the parties. We have gone through the records of the suit proceedings which were summoned by us. We have also perused the written submissions filed by both the parties as also the judgments relied upon by them.

7. The provisions of Order VI Rule 17 CPC declare that the court may, at any stage of the proceedings, allow either party to alter or amend his plea in such a manner and on such terms as may be just. It also states that such amendment should be necessary for the purpose of determining the real questions in controversy between the parties. The proviso to the provision clarifies that no application for amendment should be allowed after the trial has commenced, unless the court comes to the conclusion that inspite of due diligence, the party could not have raised the matter before the commencement of trial. The aim and object of the Rule is that all cases should be tried on their merits and all amendments necessary for determining the real questions in controversy between the parties should be allowed subject to the condition that it does not cause any injustice or prejudice to the other side.

8. It is settled by a plethora of decisions of the Supreme Court and this Court that the rule of amendment is essentially a rule of justice, equity and good conscience and power of the amendment should be exercised in the larger interest of doing full and complete justice to the parties before the court. On the scope of Order VI and Rule 17 CPC and the approach of the court in considering whether the amendment is necessary, the Supreme Court in a recent judgment in the case of Rajesh Kumar Aggarwal and Ors. v. K.K.Modi and Ors. reported as observed as under:

Para 18: As discussed above, the real controversy test is the basic or cardinal test and it is the primary duty of the court to decide whether such an amendment is necessary to decide the real dispute between the parties. If it is, the amendment will be allowed; if it is not, the amendment will be refused. On the contrary, the learned Judges of the High Court without deciding whether such an amendment is necessary have expressed certain opinions and entered into a discussion on merits of the amendment. In cases like this, the court should also take notice of subsequent events in order to shorten the litigation, to preserve and safeguard the rights of both parties and to subserve the ends of justice. It is settled by a catena of decisions of this Court that the rule of amendment is essentially a rule of justice, equity and good conscience and the power of amendment should be exercised in the larger interest of doing full and complete justice to the parties before the court.

Para 19: While considering whether an application for amendment should or should not be allowed, the court should not go into the correctness or falsity of the case in the amendment. Likewise, it should not record a finding on the merits of the amendment and the merits of the amendment sought to be incorporated by way of amendment are not to be adjudged at the stage of allowing the prayer for amendment. This cardinal principle has not been followed by the High Court in the instant case.

9. The aforesaid judgment has also considered a number of judicial precedents on the said issue, including the following:

(i) L.J.Leach & Co. Ltd. v.Jardine Skinner & Co., .

(ii) Jai Jai Ram Manohar Lal v. National Building Material Supply .

(iii) Ganga Bai v. Vijay Kumar .

(iv) Ganesh Trading Co. v. Moji Ram .

(v) B.K.Narayana Pillai v. Parameswaran Pillai .

(vi) Ragu Thilak D.John v. S.Rayappan (2001) 2 SCC 472.

10. While discussing the scope of permitting amendments, it has also been held that the proposed amendments should also be examined to see whether it introduces a totally different, new and inconsistent case or that the application for amendment has not been made in good faith. It is settled law that a pleading can only be amended if it is to substantiate, elucidate and expand the pre-existing facts already contained in the original pleadings but, under the guise of an amendment, a new cause and a case cannot be substituted and the courts cannot be called upon to decide the alternative case instead of the original case. Suffice it is to refer to the following judgments on the said issue:

(i) Kanda v. Waghu AIR 1950 PC 68.

(ii) Pirgonda Hangonda Patil v. Kalgonda Shidgonda Patil and Ors. .

(iii) Jai Ram Manohar Lal v. National Building Material Supply, Gurgaon .

(iv)Kumaraswami Gounder v.D.R.Nanjappa Gounder and Ors. (FB)

(v) Mr.Misha Vadera and Anr. v. Mr.Ravi Kumar and ors. 1996 II AD (Delhi) 113

11. Coming back to the case in hand, much hinges on the Agreement dated 14th June, 1997 which is the foundation of the plaint. The relevant part of the Agreement, which is referred to in para 2 of the plaint is reproduced hereinbelow:

That the vendee has paid this day a sum of Rs.32,00,000.00 (Rs.Thirty two lacs only). Out of that Rs.2,00,000.00 (Rupees Two Lacs only) by Cheque No.777810 dated 14.06.97 drawn on SBI GREEN PARK EXTN. and Rs.30,00,000.00 (Rs.Thirty Lacs only) by Cash as earnest money and the balance of Rs.4,00,000.00 (Rs.Four lacs only) shall be paid by the vendee to the vendor at the time of the completion of 45 days of the said transaction i.e.on or before 29.7.97. The possession of the first floor will be handed over to the vendee after receiving the balance amount that is on or before 29.7.97.

12. On perusing the records of the learned Single Judge, we find that in view of the stand of the appellant/defendant No.1 in the written statement filed in suit proceedings that the Agreement dated 14th June, 1997 did not bear his signatures and that the same were forged, vide order dated 30th July, 2002, the learned Single Judge directed that the specimen signatures of the appellant/defendant No.1 along with the original Agreement dated 14th June, 1997 be sent to the CFSL for verification and a report thereon be submitted to the court. The CFSL submitted its report dated 23rd October, 2002 to this Court opining that the signatures of the appellant/defendant No.1 did not tally with his specimen signatures. The said fact was taken note of by the learned Single Judge in his order dated 14th January, 2003 on which date, it was recorded that the counsel for the respondent/plaintiff submitted that he would like to file some response to the said report for which he was granted two weeks' time and the matter was renotified for 14th February, 2003.

13. On 14th February, 2003, in view of the report of the CFSL, the earlier injunction order granted in favor of the respondent/plaintiff restraining the appellant/defendant No.1 from selling, mortgaging or parting with possession of the suit premises which was continuing to operate in favor of the respondent/plaintiff, was discontinued/vacated. On the same date, i.e. on 14th February, 2003, on the application filed by the respondent/plaintiff under Order VI Rule 17 CPC seeking amendment of his plaint, notice was issued by the learned Single Judge while granting liberty to the respondent/plaintiff to apply for interim orders after disposal of the said amendment application.

14. While perusing the impugned order dated 2nd December, 2004, we find that the statement of the respondent/plaintiff was recorded in the court on 5th April, 2002 wherein the respondent/plaintiff had stated that he had paid Rs.30 lakhs in cash and Rs.2 lakhs by cheque to the appellant/defendant No.1 at the time of entering into the Agreement dated 14th June, 1997. The respondent/plaintiff had further stated that the amount of Rs.30 lakhs was not paid at the time of the Agreement but was paid from the year 1993 onwards from time to time. Juxtaposed thereto are the contents of the Agreement, the relevant extract of which is reproduced hereinabove. The said Agreement clearly states that the vendee (respondent/plaintiff) has paid on this day a sum of Rs.32 lakhs, out of which, Rs.2 lakhs has been paid by cheque and Rs.30 lakhs by cash as earnest money leaving a balance of Rs.4 lakhs payable by the respondent/plaintiff to the appellant/defendant No.1 at the time of completion of the transaction.

15. In terms of the proposed amendment, what is sought to be added to para 2 is the plea that the respondent/plaintiff had advanced Rs.17.5 lakhs to the appellant/defendant No.1 as also his wife Smt.Prakash Gupta; that the appellant/defendant No.1 and his wife executed a promissory note in favor of the respondent/plaintiff and they also acknowledged the payment of Rs.17.5 lakhs with interest at the rate of 24% p.a. However, as he failed to make the payment in time with interest to the respondent/plaintiff, a settlement was arrived at in terms of which he agreed to Rs.30.25 lakhs to the respondent/plaintiff. Thus at the time of execution of the Agreement dated 14th June, 1997, apart from an advance of Rs.2 lakhs paid by cheque, the appellant/defendant No.1 also acknowledged receipt of Rs.30 lakhs from the respondent/plaintiff which was, in fact the amount liable to be paid by the appellant/defendant No.1 to the respondent/plaintiff and was adjusted towards the sale consideration of the suit property.

16. The learned Counsel for the appellant/defendant No.1 submitted that the original cause of action was based on the Agreement dated 14th June, 1997; the application for amendment as filed by the respondent/plaintiff was pursuant to the report submitted by the CFSL to the court opining that the signatures of the appellant/defendant No.1 contained therein did not tally with his admitted signatures and thus the proposed amendment was nothing but a guise to overcome the said report by setting up a new case with regard to payment of Rs.30 lakhs. Reliance is placed by the counsel for the appellant/defendant No.1 on the following judgments:

(i) The Municipal Corporation of Greater Bombay, v. Lala Pancham and Ors. .

(ii) A.K.Gupta and Sons Ltd. v. Damodar Vally Corporation .

(iii) Wg. Cdr. I.Kovoor (Retd.) v. Mahalakshmi Land & Finance (P) Ltd.72 (1998) DLT 445.

17. On the other hand, learned Counsel for the respondent/plaintiff submitted that the report of the handwriting expert was only an opinion and was not final, conclusive and binding on the parties till the same was proven in evidence; that the amendment in question was only clarificatory in nature as it sought to elaborate the facts, the basis for which was already in the Agreement, in the plaint and in the statement made by the respondent/plaintiff recorded by the learned Single Judge. It was further submitted that no new case or cause of action could be stated to have been added by way of proposed amendment and that the amendment was necessary for effectively adjudicating the real controversy between the parties. In support of the aforesaid submission, he has relied upon the following judgments:

(i) Ajarjeet Singh v. Municipal Corporation of Delhi .

(ii) Sanjay Kumar Dalmia and Anr. v. Tobu Enterprises Ltd. .

(iii) Pankaja and Anr. v. Yellappa (D) by Lrs. and Ors. .

18. As already discussed hereinabove, the pre-dominant purpose and intention of Order VI Rule 17 CPC is to reduce litigation and to try a case on its merits and thus allow all amendments that may be necessary for determining the real matter in controversy between the parties without causing injustice to the other side. It is also well established that the endeavor of the courts ought to be to decide the rights of the parties and not to punish them for their mistakes, oversights and negligence. Conversely, amendment should be refused where it is not necessary for the purposes of determining the real question in controversy between the parties; is merely technical or useless or of no substance or where the plaintiff's suit will be wholly displaced or it would take away the legal right which has accrued in favor of the parties or it would introduce a totally new and inconsistent case and where the application for amendment is made at a late stage of the proceedings or not made in good faith.

19. In the present case, at first blush, it appears that the proposed amendment is only clarificatory in nature and expands the submissions as already contained in the pleadings and averments made by the respondent/plaintiff in the plaint. However, on delving deeper, it is not so.

20. The Agreement dated 14th June, 1997 is the foundation of the plaint and for the averments of the plaint to be read and understood, the Agreement cannot be ignored. The recital of the Agreement extracted hereinabove in para 10, leaves no manner of doubt that at the time of executing the said Agreement, the respondent/plaintiff stated that he had paid on the relevant day, i.e. on 14th June, 1997, a sum of Rs.32 lakhs, out of which, Rs.2 lakhs was paid by cheque and Rs. 30 lakhs by way of cash as earnest money to the appellant/defendant No.1. There is no scope of ambiguity in understanding the import and contents of the said recital. Similarly, para 2 of the unamended plaint also refers to the Agreement and states that the appellant/defendant No.1 had received a sum of Rs.32 lakhs, including a sum of Rs.2 lakh paid by cheque and that he had also acknowledged the receipt of the said amount.

21. The sequence of events shows that within a few days after the receipt of the report of the CFSL opining that the signatures of the appellant/defendant No.1 contained in the Agreement did not tally with his admitted signatures, the respondent/plaintiff came up with the application for amendment stating, inter alia, that amendment to para 2 of the plaint was clarificatory in nature and sought to elaborate the facts which were stated to be already contained in the pleadings. We are, however, not persuaded by the said argument. It is not as if the amendment of the plaint was necessitated due to clumsy, sketchy or cryptic drafting. From a perusal of the proposed amendments, it appears that faced with the damaging report of the CFSL, the respondent/plaintiff sought to make out an entirely new and different case for which there was not the slightest basis in the plaint as it originally stood.

22. Permitting the respondent/plaintiff to amend the plaint would amount to allowing him to base his claim on a new case on which the suit had not been originally founded. The facts as alleged in the plaint and the relevant recitals contained in the Agreement on which suit of the respondent/plaintiff was founded, does not permit the amendment sought to be incorporated by way of application as preferred by the respondent/plaintiff. The recital clause of the Agreement is clear, unequivocal and unambiguous. It does not permit any interpretation different from that which is obvious on a bare reading thereof, which is to the effect that the amount of Rs.32 lakhs had been paid to the appellant/defendant No.1 on the date of execution of the Agreement i.e. on 14th June, 1997 by mode of cash and by cheque. What is proposed to be incorporated in the plaint now, by way of amendment, is an entirely new and different claim set up by the respondent/plaintiff to the effect that the the respondent/plaintiff had already advanced a sum of Rs.17.5 lakhs to the appellant/defendant No.1 and his wife over a period of time starting from June, 1993 and that for the said sum, the appellant/defendant No.1 and his wife had executed a promissory note in favor of the respondent/plaintiff acknowledging the receipt of the said amount which amount was subsequently not paid by them thus resulting in adjustment at the time of execution of the Agreement in question. No such aforesaid pre-existing facts are contained in the original pleadings which can be permitted to be elucidated by way of the proposed amendment.

23. In our opinion, this forms a completely different cause of action and is a new claim made on a new basis constituted by new facts. Such an amendment which amounts to introducing a new set of ideas to the prejudice of the appellant/defendant No.1 cannot be allowed. Additionally, the point in time at which the amendment application was filed, which was immediately after receipt of the report from the CFSL which was perceived to be damaging to the respondent/plaintiff, is also relevant. No doubt, the report of the CFSL has not attained finality and would have to be proved conclusively in the course of evidence to be led, but the timing of receipt of the said report and that of filing of the application for amendment cannot be lost sight of. A shadow has been cast on the bonafides of the respondent/plaintiff in seeking the amendment to the plaint, which he has been unable to dispel. The amendment to the plaint does not appear to have been proposed in good faith. In these circumstances, it seems to us to be a pre-eminent case where amendment ought not to have been allowed.

24. In view of the aforementioned facts and circumstances, we are of the view that the amendments proposed by the respondent/plaintiff in the plaint should not have been allowed by the learned Single Judge. The impugned order is, therefore, set aside and the present appeal is allowed without any order as to costs.