M.M.Aqua Tech vs Ntpc & Ors.
2011 Latest Caselaw 1689 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  CS(OS) NO.1524/2005

                                     Date of Decision : 24.03.2011

M.M.AQUA TECH                                   ......Plaintiff
                             Through:    Mr. Rajiv Aneja, Adv.

                                Versus

NTPC & ORS.                               ...... Defendants
                             Through:    Ms.Mugdha Pandey, Adv.


CORAM :
HON'BLE MR. JUSTICE V.K. SHALI

1.     Whether Reporters of local papers may be
       allowed to see the judgment?
2.     To be referred to the Reporter or not ?
3.     Whether the judgment should be reported
       in the Digest ?

V.K. SHALI, J.

IA No.14070/2009

1. The question to be decided in this application is as to whether

the plaintiff belatedly can be permitted to amend the suit for

injunction filed against invocation of a bank guarantee in the

year 1996 so as to claim damages in lieu thereof.

2. Brief facts of the case are that the plaintiff filed a suit for

permanent injunction restraining the defendant no. 1, NTPC

from encashing the bank guarantee bearing No. 39/94 for a

sum of Rs. 11,87,000/- drawn on defendant no. 3, Bank

alleging that the cause of action had accrued to them on

24.12.1996 when the defendant no. 1 had invoked the bank

guarantee. On 30.12.1996 an ex parte stay order was passed

by the Court. On 31.01.1997, the defendant filed its written

statement on merits raising preliminary objection regarding

the maintainability of the suit. On 19.09.2001, the learned

single Judge vacated the interim stay order granted in favour

of the plaintiff by a speaking order. However, in order to

secure the position of defendant no.1, the plaintiff was

directed to keep the bank guarantee alive till the disposal of

the suit. Against the impugned order of vacation, the

present plaintiff had filed an appeal bearing FAO(OS) No.

419/01. The appeal was admitted and interim order staying

the realization of the bank guarantee (already realized by the

defendant NTPC) was passed.

3. In between these two dates, the suit shuffled between the

district court and the High Court on account of enhancement

of pecuniary jurisdiction. Ultimately, the District Court

framed the issues on 26.10.2005 and the plaintiff despite

sufficient number of opportunities having been given, did not

adduce any evidence in support of the said issues. On

02.11.2007, the learned counsel for the defendant stated that

since the plaintiff has not adduced any evidence in support of

its case, therefore, the defendant does not want to adduce any

evidence and the case be listed in the category of Finals.

4. The suit was dismissed for non-prosecution on 25.08.2009.

The suit was restored on 31.08.2009, the matter was taken

up for final hearing. The plaintiff having chosen not to

adduce any evidence, made a statement through his counsel

that he would abandon his relief of injunction and seek

withdrawal of the appeal bearing FAO(OS) No. 419/01 against

the vacation of interim order dated 19.09.2001 provided his

application for damages in lieu thereof is allowed.

5. On 22.09.2009, the authorized representative of the plaintiff

made a statement to the effect of abandoning the relief of

injunction and withdrawing the appeal and thereafter the

plaintiff filed an application bearing IA No. 14070/2009 under

Order VI Rule 17, CPC seeking amendment of the plaint so as

to incorporate the relief of damages in lieu thereof.

6. This application seeking amendment of the plaint was

opposed by the learned counsel for the defendant on the

ground that the application is highly belated and it will

change the nature of the suit. It was also contended that if

the plaintiff was to file a suit for recovery of the amount or the

damages, the same would be barred by time as on date.

7. I have heard the learned counsel for the parties and have

perused the record.

8. The main contention of the learned counsel for the plaintiff is

that on 31.08.2009, this Court passed the following order :-

1. Mr. Bhattacharyya, learned Senior counsel for the Plaintiff states on instructions that the Plaintiff would like to avail of the remedy of seeking damages in lieu of the injunction sought in the suit as provided in proviso to Section 40(2) of the Specific Relief Act, 1963. He states that an authorized officer of the Plaintiff would be present in Court to make a statement to this effect.

2. It is made clear that if the Plaintiff wishes to avail of this remedy the Plaintiff will have to move an appropriate application withdrawing the pending appeal i.e. FAO (OS) No. 419 of 2001 and allow the consequences of withdrawal of the prayer of injunction to take effect, which in effect would mean that the Defendant No. 1 will encash the bank guarantee in question.

3. Mr. Bhattacharyya says that the officer has to come from Calcutta.

4. List on 22nd September, 2009.

5. It is made clear that there will be no further adjournment in this case and if for some reason the authorized representative does not appear on the next date, the suit will proceed irrespective of the statement made today.

Sd/-

S.Muralidhar, J."

9. It is contended that in view of the aforesaid order, the plaintiff

had categorically stated that he would withdraw his appeal

which he actually did and also sought permission of the

Court to file an application seeking amendment of the plaint

thereby incorporating the alternative relief of damages in lieu

of injunction to which the Court did not have any objection

and accordingly the present application deserves to be

allowed.

10. The learned counsel for the plaintiff in this regard placed

reliance on Section 40(2) of the Specific Relief Act wherein it

is clearly stated that a party in addition to injunction can also

claim the relief of damages and further that no relief of

damages will be granted to a party unless and until the said

relief is claimed. It is contended by the learned counsel for

the plaintiff that there have been cases where final decree was

passed and even after that the appellate court has permitted

the amendment of the plaint. In this regard, the learned

counsel has placed reliance on Peethani Suryanarayana

and Anr. versus Repaka Venkata Ramana Kishore and

Ors. 2009 (11) SCC 308 and Jagdish and Three Ors. versus

Harsarup 1978 (14) DLT 66.

11. It has also been contended by the learned counsel for the

plaintiff that rejecting the application of the plaintiff seeking

amendment would mean that the status quo ante with regard

to the bank guarantee has to be restored as the defendant

would have to return the money of the guarantee undertaken

because the plaintiff had withdrawn his appeal on the

assurance that he would be permitted to amend the plaint so

as to incorporate the relief of seeking damages in lieu thereof.

12. Mr. Taneja, learned senior counsel for the defendant has

contested the claim of the plaintiff mainly on two grounds.

Firstly, that the amendment of the plaint has to be allowed in

consonance with Order VI Rule 17, CPC. The proviso to the

said Order VI Rule 17, CPC clearly lays down that once the

trial has begun, no amendment to the plaint can be permitted

to be carried out unless and until the party concerned shows

that he had exercised due diligence and such an amendment

or fact could not have been incorporated at the threshold

itself. Reliance in this regard has been placed on a judgment

of our own High Court titled Akhilesh Kumar Verma versus

Maruti Udyog Ltd. & Ors. (2008) 150 DLT 508 .

13. Secondly, it has been submitted that allowing the amendment

sought by the plaintiff to incorporate the relief of damages

now at this belated stage, would tantamount to allow him to

raise a claim for damages, which is admittedly time barred. It

has been contended that the plaintiff on his own averment in

the plaint has stated that the cause of action accrued to him

on 24.12.1996 and if at all the suit for damages was to be

filed, it had to be filed within a period of three years and

accordingly as on date, the suit is barred by time.

14. The third submission made by the learned counsel for the

defendant is that the amendment which is sought to be

carried out by the plaintiff will cause serious prejudice to the

defendant. This is on account of the fact that the plaintiff

had separately invoked arbitration clause vide its letter dated

11.06.1998 and claimed damages from defendant no. 1 & 2.

The same damages are sought to be claimed now by way of

present amendment whereas the application of the plaintiff

under Section 11 of the Arbitration and Conciliation Act

bearing Application No. 277/2000 was rejected by the High

Court on 15.11.2001 on the ground that there was no privity

of contract between the plaintiff and the defendant no. 1. It is

stated that the said application was allowed against

defendant no. 2 only. The plaintiff had filed a writ petition

bearing No.3595/2000, which was dismissed by the Division

Bench vide order dated 28.5.2001 and the plaintiff thereafter

filed a Special Leave Petition bearing No. SLP(C) No.

12240/02 which was also dismissed in the year 2008.

Having suffered a finality so far as the claim of damages qua

the defendant no. 1 is concerned, the plaintiff under the garb

of present amendment cannot be permitted to take up the

same issue again.

15. I have carefully considered the respective submissions of the

parties and have perused the record. I am in total agreement

with the learned senior counsel for the defendant no. 1 that

no amendment to the plaint at this belated stage can be

permitted to be carried out by the plaintiff by incorporating

the relief of damages in lieu of injunction as is sought to be

done. This is on account of the fact that first of all the

plaintiff is placing reliance on Section 40(2) of the Specific

Relief Act for seeking this amendment. The aforesaid Section

reads as under :-

"40. Damages in lieu of, or in addition to, injunction --

(1) X XX XX

(2) No relief for damages shall be granted under this section unless the plaintiff has claimed such relief in his plaint;

Provided that where no such damages have been claimed in the plaint, 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 such claim."

16. A perusal of the aforesaid Section would clearly show that

although in case of injunction, be that permanent, mandatory

or prohibitory, a party in addition to claiming injunction, may

claim damages in lieu thereof, however, such damages cannot

be given by the Court unless and until the relief in this regard

is claimed which can be done at any stage of the proceeding.

The words which are important are "at any stage of the

proceeding".

17. Before dealing with the said words "at any stage of the

proceeding", it may be proper to appreciate the context in

which Section 40(2) has been incorporated. Section 40(2)

provides that a party may claim damages in lieu of injunction,

is only an alternative relief which the party must claim at the

threshold itself, as a matter of principle, when the cause of

action accrues to a party. It may be pertinent here to

mention that in the instant case, the plaintiff has claimed

that the cause of action accrued to him on 24.12.1996 and

the limitation period for claiming damages was not three

years but only one year according to the Limitation Act (Refer

to Article 72 of the Schedule]. Therefore, if at all the

damages had to be claimed by the plaintiff, the cause of

action would have accrued on 24.12.1996 and the said period

of limitation cannot be permitted to be defeated by seeking

amendment to his suit for injunction filed in 1996, by now

filing an application after a lapse of almost 15 years. Such an

application is highly belated. Therefore, by permitting him to

amend the suit at such a late stage incorporating an

amendment with regard to damages will be in total violation

to the principles of law of limitation.

18. Secondly, this will also be against the provisions of Order VI

Rule 17 proviso CPC which though permits amendment of the

plaint at any stage of the proceeding but that amendment has

to be in consonance with and subject to the proviso which

lays down that no amendment to a plaint or a written

statement can be permitted if the trial has begun and unless

the party seeking such an amendment has shown due

diligence on his part to the effect that such a fact could not

have been brought at the time when the suit was instituted or

earlier till the time when the amendment was sought.

19. In the present case, the trial had not only begun but as a

matter of fact, concluded and the plaintiff despite sufficient

opportunities having been given, had failed to adduce any

evidence and when the matter was listed for final hearing,

nobody appeared and the suit was dismissed for non-

prosecution. An application for revival of the suit was filed

and at that stage while considering the application for revival,

a statement was made by the authorized representative of the

plaintiff that he would withdraw the appeal and permit the

bank guarantee to be encashed subject to the application

seeking amendment being considered. The learned Single

Judge has no doubt noted the submission of the learned

counsel for the plaintiff in the order but that cannot be

treated as giving a seal of legitimacy or an approval that the

amendment will be allowed in lieu of his withdrawal of his

appeal. I feel that the amendment application has to be

considered on its own merits rather than being permitted to

be allowed on the basis of some statement of the authorized

representative of the plaintiff or an observation purported to

have been made by the Court.

20. I have considered the judgment which has been relied upon

by the learned counsel for the plaintiff with regard to

canvassing his point that even at the stage of final decree an

amendment can be allowed, but what is noticeable is that

even in such cases where the amendment has been allowed,

the principles of law have still been followed and enunciated

therein. One of the basic principles of law while allowing the

amendment is that it should not result in serious prejudice

being caused to the defendant, which in the instant case I

feel, will be inevitable. The question of claim of damages

against the defendant no.1 has already been rejected right up

to Supreme Court. By permitting the amendment to the

plaintiff, the effect of the rejection by the Supreme Court

would be nullified.

21. So far as the question of due diligence is concerned, there is

not even an iota of averment made by the plaintiff in the

application to show that he was diligent much less due

diligent and secondly by virtue of proviso to Order VI Rule 17,

CPC the amendment cannot be allowed. It may also be

pertinent here to mention that so far as Section 40(2) of the

Specific Relief Act is concerned, that is only a substantive

enabling provision and the procedural aspects of the

amendment with regard to the fact that as to whether it has

to be allowed or not has been dealt with under Order VI Rule

17 CPC. Therefore, while considering the prayer of the

plaintiff seeking amendment under Order VI Rule 17, CPC,

the Court cannot be oblivious to the said provision especially

the proviso and the law laid down in a catena of authorities to

the effect that the party before seeking amendment must

show that he was not only diligent but due diligent in terms of

the proviso and it is not causing any serious prejudice to the

opposite side. Reliance in this regard can be placed on

Hardeo Rai versus Sakuntala Devi and Ors.(2008) 7 SCC

46 and Peethani Suryanarayana and Anr. versus Repaka

Venkata Ramana Kishore and Ors. (2009) 11 SCC 308.

22. For the reasons mentioned herein above, I am of the

considered opinion that so far as the application of the

plaintiff seeking amendment is concerned, that cannot be

allowed in the present suit. However, expression of any

opinion hereinbefore may not be treated as expression on the

merits of the case and if the plaintiff still has a right or a

cause of action to sue the defendant no. 1 for damages, he is

at liberty to do so. Needless to say that it has to be in

accordance with law.

23. So far as the present matter is concerned, post it for further

proceedings on 12th July, 2011.

V.K. SHALI, J.

MARCH 24, 2011 MA