M/S Jsw Steel Limited vs Mysore Minerals Limited
2021 Latest Caselaw 790 Kant

                          1

                                                        R
  IN THE HIGH COURT OF KARNATAKA, BENGALURU

       DATED THIS THE 13TH DAY OF JANUARY, 2021

                       BEFORE

       THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT

       WRIT PETITION NO.15190 OF 2020(GM-CPC)

BETWEEN:

M/S JSW STEEL LIMITED
A COMPANY REGISTERED UNDER
THE COMPANIES ACT AND
HAVING ITS REGISTERED OFFICE AT
JINDAL MANSION, 5A,
DR G DESHMUKH MARG,
MUMBAI-400026.
AND ITS REGIONAL OFFICE AT U-607,
6TH FLOOR, EAST WING,
RAHEJA TOWERS, M G ROAD,
BANGALORE-560001.
REPRESENTED BY ITS
AUTHORISED REPRESENTATIVE,
SRI MANI MANUEL.
                                       ... PETITIONER
(BY SRI. K G RAGHAVAN, ADVOCATE A/W
    SMT. ANURADHA S R, ADVOCATE))

AND:

MYSORE MINERALS LIMITED
A COMPANY REGISTERED UNDER
THE COMPANIES ACT AND
HAVING ITS REGISTERED
OFFICE AT NO.39, M G ROAD,
BANGALORE-560001.
REPRESENTED BY ITS MANAGING DIRECTOR.
                                     ...RESPONDENT

(BY SRI. SRINIVAS RAGHAVAN, ADVOCATE FOR
    SRI. LOMESH KIRAN, ADVOCATE FOR C/R)

    THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF
THE CONSTITUTION OF INDIA PRAYING TO       CALL FOR
RECORDS IN O.S.NO.7213/2012 ON THE FILE OF THE CIVIL
JUDGE, BENGALURU AND QUASH THE ORDER DATED
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10.11.2020 PASSED ON                 I.A.NO.4    IN   O.S.NO.7213/2012
ANNEXURE-A AND ETC.

    THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDER, THIS DAY, THE COURT PRONOUNCED THE
FOLLOWING:

                               ORDER

Petitioner being the plaintiff in a money suit in

Com.O.S.No.7213/2012 is at the door steps of the Writ

Court for assailing the order dated 10.11.2020 a copy

whereof is at Annexure-A whereby the learned LXXXII

Addl. City Civil Judge, Bengaluru, having allowed

respondent-defendant's application in I.A.No.IV filed u/o

VI Rule 17 r/w Sec. 151 of CPC, 1908 has accorded leave

to amend the Written Statement for incorporating a

Counterclaim therein; the respondent having entered

caveat through it's counsel, opposes the Writ Petition.

2. Material Facts:

        Petitioner    company         filed     the   subject   suit   on

5.10.2012       for     a    money        decree      in   a    sum    of

Rs.270,11,91,123/-; respondent-company resisted the suit

by filing the Written Statement on 17.04.2013; long

thereafter i.e., on 29.07.2016, it filed the Application in

I.A.No.IV u/o VI Rule 17 r/w section 151 of CPC, 1908

seeking leave to introduce the Counterclaim in the Written

Statement by way of amendment; the Counterclaim by way

of damages is in a sum of Rs.1172.79 crores, with interest

at the rate of 18% per annum; apparently, it is founded on

the fact matrix which is substantially anterior to the

institution of the suit; this was objected to by the

petitioner inter alia on the ground of bar of limitation and

delay & latches; however, court below sanctioned the

amendment, which is now put in challenge, in this

petition.

3. Contentions of the parties:

(a) The pith & substance of petitioner's challenge is

that: a Counterclaim cannot be made by way of

amendment of Written Statement after the expiry of

statutory period of limitation; a counterclaim is nothing

but a 'deemed suit' for all practical purposes and therefore

is bound by the same limitation period which a money suit

is; apparently, suit, if were to be filed on the cause of

action on which the respondent's Counterclaim is founded,

it would have failed because of the expiry of limitation

period; petitioner's counsel banks upon certain decisions

in support of this stand.

(b) Respondent, per contra, contends in justification

of the impugned order and the reasons on which it is

structured; essentially respondent presses into service

three factors viz., (i) 'doctrine of relation back' whereby

amendments become retrospective in effect from the date

of filing of the pleadings concerned; (ii) unassailability of

the discretionary order granting leave to amend the

Written Statement, & (iii) the foundational facts supporting

the Counterclaim being already pleaded in the Written

Statement; it's counsel too relies upon certain decisions for

substantiating this stand.

4. Having heard the learned counsel for the

parties and having perused the petition papers, this Court

is inclined to grant indulgence in the matter for the

following reasons:

A. As to filing of counterclaim, stage for:

The question whether a Counterclaim can be filed

separately after the filing of the Written Statement or can

be introduced by way of amendment to the already filed

Written Statement, subject to compliance of requisites and

save with all just exceptions, is no longer res integra vide

ASHOK KUMAR KALRA -VS- WING CDR. SURENDRA

AGNIHOTRI & OTHERS, (2020) 2 SCC 394; what factors

enter the decision making process, in re an Application for

amendment, have been broadly stated by the Apex Court

at paragraph 21 of the said decision, as under:

"21. We sum up our findings, that Order 8 Rule 6-A CPC does not put an embargo on filing the counterclaim after filing the written statement, rather the restriction is only with respect to the accrual of the cause of action. Having said so, this does not give absolute right to the defendant to file the counterclaim with substantive delay, even if the limitation period prescribed has not elapsed. The court has to take into consideration the outer limit for filing the counterclaim, which is pegged till the issues are framed. The court in such case have the discretion to entertain filing of the counterclaim, after taking into consideration and evaluating inclusive factors provided below which are only illustrative, though not exhaustive:

(i) Period of delay. (ii) Prescribed limitation period for the cause of action pleaded. (iii) Reason for the delay, (iv) Defendant's assertion of his right. (v) Similarity of cause of action between the main suit and the counterclaim. (vi) Cost of fresh litigation. (vii) Injustice and abuse of process.(viii) Prejudice to the opposite party. (ix) And facts and circumstances of each case. (x) In any case, not after framing of the issues."

B. As to two questions of significance:

The prime questions however, that fall for

consideration of this Court are a bit different from the one

discussed in the preceding paragraph (A) above, and they

are phrased as under:

(i) whether leave to incorporate the time- barred Counterclaim by way of amendment to the Written Statement can be granted u/o VI Rule 17 of CPC, 1908 ... ? and

(ii) whether Court granting leave to amend the Written Statement for taking up a Counterclaim can relax the period of limitation prescribed for filing the same, by invoking the doctrine of relation back ... ?

C. As to what the apex court said in Kalra Case:

Even the first of the above questions having been

largely answered in KALRA supra, does not much detain

the Court; the concurring view of one of the three judges

(Mohan M Shantangoudar, J.) comprising the Bench are

succinctly expressed at paragraphs 30 & 31 as follows:

"30. It is clear that Rule 6-A(1) only places a limitation on the time within which the cause of action for a counterclaim must arise. Besides this limitation, there is no explicit guidance in Rule 6- A(1) as to the time within which the counterclaim itself must be filed. In this respect, Rule 6-A(4) provides that a counterclaim is governed by the rules applicable to plaints. It is well established that a plaint must be presented within the period prescribed under the Limitation Act, 1963 (hereinafter "the Limitation Act"). For counterclaims as well, the period within which they must be filed can be inferred from Section 3(2)(b)(ii) of the Limitation Act,1963..:

This provision mandates that in order to determine the limitation period applicable to a

counterclaim, it must be treated as a separate suit, which is deemed to have been instituted on the date on which it is made in the court. Thus, evidently, in consonance with the provisions of Order 8 Rule 6-A(4), the Limitation Act also treats a counterclaim like a plaint. This means that much like a plaint, the limitation for filing a counterclaim also depends on the nature of the claim and is accordingly governed by the period of limitation stipulated in the Limitation Act.

31. From the foregoing discussion, it is clear that a counterclaim can be filed if two conditions are met: first, its cause of action complies with Order 8 Rule 6-A(1); and second, it is filed within the period specified under the Limitation Act. ......"

(underlining is mine)

D. As to whether observation of one of the judges becomes ratio of the Bench:

(a) Learned Sr. Advocate Mr.Srinivas Raghavan

representing the respondent contends that what is stated

above is the view of merely one of the three judges

comprising the said Bench of the Apex Court and

therefore, needs to be examined as to whether it has

precedential value; he highlights what is in the brackets as

"(partly supplementing and partly dissenting)" appearing

immediately below para 22 of the reported decision in

KALRA supra; Mr.K.G. Raghavan appearing for the

petitioner at once points out that it is only the comment of

the editor of the law report and not of the judge himself,

and therefore, one shall not be swayed away, thereby; it is

true that such editorial comments are insignificant and at

times, misleading, in ascertaining the ratio of judgments,

especially when the Bench is made up of plural judges,

and

(b) The ratio decidendi of a judgment needs to be

mined by employing standard techniques such as

Wambaught's Test, Dr. Goodheart's Method, Dr. Upendra

Baxi's Method or the like vide Rupert Cross's 'PRECEDENT

IN ENGLISH LAW' - 3rd Edn. at pages 53 & 66; ordinarily,

when one of the plural Judges comprising the Bench of a

constitutional court makes a normative statement on the

basis of the same fact matrix which other partner judges

too consider relevant, such statement needs to be treated

as the law laid down by the Bench as a monolith, and not

as a fractured opinion, unless the partner judges observe

something that has the effect of diminishing its

precedential force; in Kalra Case supra the Bench

comprised of three judges, and there is a set of two

judgments; one is rendered by two judges and the other

separate judgment is rendered by one judge; a careful

perusal of both the judgments shows that what is stated

by one of the judges in his separate judgment, is not

inconsistent with what is stated by the other two judges in

common; the third judge has given a wider exposition of

law stated by the other two by superadding the reasons;

there is nothing in the two member judgment with which

the other judgment stands in repugnancy.

E. Flawed method of law-reporting and its inherent dangers:

It is high time that some strict norms are laid down

for regulating the mode and method of law reporting; there

are several agencies in the country which have their own

uncertain and varying ways of reporting the judgments of

constitutional courts; the pattern of law report does not

match with that of the original judgment on record; the

paragraphs in the reported judgments at times do not

match with the paragraphs in the original; not rarely, even

paraphrasing of some parts of original judgments by the

law reporting agency, is also noticed when rulings are cited

by the lawyers; all this puts both Bar and the Bench to

some avoidable difficulty in ascertaining the law laid down

and its scope; there is a lurking risk of the editorial notes

that are interjected in the body of judgments reported,

being inadvertently construed as part of the ratio; this is

not a happy thing to happen; much deliberation in this

regard is not needed.

F. As to 'bar of limitation' vs. 'delay & latches':

(a) The concept of "bar of limitation" on the one

hand and the idea of "delay & latches" on the other by

their very nature, are different from each other, although

their successful invocation may arguably serve the same

purpose in a litigation; the former absolutely bars the

recourse to remedy; and the later may deny the remedy in

the proceedings in question, the right to remedy being kept

open for pursuit in other proceedings; prescription of

period of limitation for claiming legal remedies is normally

the prerogative of the legislature, whereas, the ground of

'delay & latches' is a matter of discretion inhering the

Courts; this discretion needs to be exercised in accordance

with the rules of reason & justice, is beside the point; the

right to remedy ordinarily commits legal suicide if the

limitation period prescribed therefor lapses; no

court/authority has discretion to entertain the claim for

it's grant; Sec.3(1) of the Limitation Act, 1963 dictates

their rejection at the threshold, regardless of the

contention from the other side.

(b) The delayed making of a Counterclaim by way

of amendment of Written Statement is one thing and the

making of a time barred Counterclaim by way of such

amendments, is another; in treating the former, the court

has discretion in the sense that it may grant leave to

amend the Written Statement or refuse; in other words, a

Written Statement can be amended even belatedly, for

introducing a Counterclaim therein with the leave of court,

provided that leave to amend is sought for within the

statutory period of limitation; for that purpose, a

Counterclaim shall be treated to be a suit by fiction of law;

however, leave may be denied inter alia on the ground of

'delay & latches', even if the period of limitation has not

expired; in such event, defendant may bring a separate

suit; this is one scenario.

(c) The other scenario is: where a time barred

Counterclaim is sought to be introduced by amendment to

the Written Statement; in such a case, no leave can ever

be granted; Court has no discretion to entertain such a

claim; in such matters, there is no discretion to disobey

the mandate of law, namely, Sec.3(1) r/w 3(2)(b)(ii) of the

Limitation Act; a time-barred Counterclaim cannot be

made even if there is no 'delay & latches' in moving the

application for amendment of pleadings; to put it shortly,

time-barred claims cannot be the subject matter of

pleadings or their amendments; a careful perusal of the

Written Statement and the subject amendment application

filed by the respondent, leaves no manner of doubt that

the Counterclaim in question is hopelessly time-barred

and a right not to be Counterclaimed has accrued to the

petitioner-plaintiff.

G. As to amendment of pleadings & doctrine of relation back:

(a) The contention of Mr. Srinivas Raghavan,

learned Sr. Advocate appearing for the respondent that

once leave is accorded by the court under Order VI Rule 17

of the Code, the amendment dates back to the filing of the

Written Statement by virtue of 'doctrine of relation back',

cannot be countenanced; true it is, ordinarily once

pleadings are amended, such amendments date back to

the point of filing of the original pleadings of the party

concerned, unless the court granting leave to amend,

otherwise directs in its discretion; this doctrine arguably is

of common law kind, is not as sacrosanct as to transcend

statute; the doctrines of law and the legal maxims being

elderly to the statute law, concise & conceive a

fundamental rule or principle that regulates the conduct of

individuals in an organized society, is true; in a sense they

capsule the genius of mankind, earned through the ages of

experience; they are important for the purpose of explicit

as well as implicit mode of understanding the same;

however, they are susceptible to legislative process, unless

they by their very nature are of very high sanctity &

significance like the "doctrine of basic structure" in our

constitutional jurisprudence.

(b) T.M.Cooley, a great American jurist of yester

century, in his magnum opus "A TREATISE ON THE

CONSTITUTIONAL LIMITATIONS" 1st Edn. -1868,

Boston: Little, Brown & Co., at page 170 opines that legal

maxims should "yield to considerations of policy and

expediency... with the law making power, in the absence of

any definite constitutional provisions so embodying the

maxim as to make it a limitation upon legislative authority;

...a maxim is subject to such exceptions as the legislative

power of the State shall see fit to make, and when made, it

must be presumed that the public interest, convenience and

protection are subserved thereby..." These observations

equally apply to the doctrine of the kind passionately

pleaded on behalf of the respondent; in England, the

"doctrine of Crown Immunity" has been greatly diminished

by the passing of Crown Proceedings Act, 1947; similarly

in India, the "doctrine of common employment" has been

done away with inter alia by enacting the Employees

Compensation Act, 1923.

(c) The provisions of Sec.3(1) r/w 3(2)(b)(ii) of the

Limitation Act, 1963 by necessary implication exclude the

invocation of the "doctrine of relation back", while treating

an amendment application u/o VI Rule 17 of the Code for

introducing a Counterclaim to the Written Statement; the

said doctrine does not come to the rescue of the

respondent because of mandatory prescription of a specific

limitation period by the Act,1963 for the filing of a suit

which, as rightly argued by Mr. K.G.Raghavan, governs

the filing of a Counterclaim since it is deemed to be a suit

by fiction of law; an argument to the contrary cannot be

countenanced without manhandling the text of the

provisions enacted in 1963 Act and in CPC, which the

Apex Court has treated in Kalra Case, supra; after all, law

of limitation being a statute of repose, cannot be lost sight

of.

H. As to statutory limitation period and its extension by Courts:

(a) What is ordinarily prescribed as inflexible

limitation period by the competent legislative organ of the

State (Parliament) for pursuing legal remedies, such as by

suit or Counterclaim, cannot be elongated by the judicial

organ, in the absence of statutory enablement by invoking

some doctrine of law or maxim; had the said period been

prescribed by the courts, arguably courts could extend the

same, which is not the case here; it is not the case of the

respondent that because of legal disability such as

minority, lunacy or detention, certain period brooked as

delay merits discount while computing or reckoning the

period of limitation; the Legislature may provide for

condonation of delay in filing the suit or Counterclaim if it

so chooses and that in some circumstances, it has done

so, is again beside the point since such a concession is

not statutorily extended to the suit and consequently to

the Counterclaim.

     (b)     Limitation bars the remedy:

     (a)    The respondent's contention that he has already

laid the foundation for the filing of Counterclaim in the

original Written Statement itself, pales into insignificance

since what the law of limitation bars is the remedy and

not the grounds on which it is founded; in other words,

even if the respondent had taken up all the grounds in his

Written Statement as filed originally, a prayer for counter

decree cannot be belatedly superadded once the same

becomes time-barred; counsel relies on the decision of

Kerala High Court in SABHARI SYNDICATE Vs.

CATHOLIC SYRIAN BANKING LIMITED, ILR 2001 (2)

KER 33, wherein para 9 reads as under:

"9. The next contention raised by the respondent is that the counter claim attempted to be made by the petitioner is barred by limitation and therefore it cannot be allowed. As already note the petitioner has contended that in the written statement originally filed by them there is factual foundation with regard to the counter claim and since the claim made in the written statement is vague and not specific they sought to amend the written statement by making the claim specific...Therefore, according to the petitioner, in the interests of justice the amendment of the written statement should be allowed even if it is found that the counter claim made by them is barred by time on the date when the application

was moved to amend the written statement. It is not disputed that the general rule is that the courts will decline to allow the amendment of the pleading when fresh suit on the amended claim will be barred by limitation on the date of application seeking amendment of the pleadings. But it is well settled that where the amendment does not constitute a new or additional cause of action or raises any new case but only elaborates or elucidates the facts already on record the amendment can be allowed under O. VIII R. 6A even after the expiry of the statutory period of limitation."

(b) The reliance on the aforesaid decision is not

profitable to the respondent because: the observations

show that there was already a vague prayer for

Counterclaim in the Written Statement filed by the

defendant therein and the amendment sought was only

anticipatory of what was already claimed; secondly, the

amendment sought for was not on a fresh or new cause of

action unlike in the case at hand; thirdly, this decision

cannot be construed to lay down a law contrary to what

has been stated by the Apex Court in Kalra Case into

which case of the parties herein strictly fits.

I. As to discretionary orders and challenge in supervisory writ jurisdiction:

The vehement contention of learned Sr. Advocate

Mr. Srinivas Raghavan that, discretion having been

exercised by the learned trial judge, the impugned order

granting leave to amend the pleadings has been made and

therefore, Writ Courts exercising a limited supervisory

jurisdiction constitutionally vested under article 227 do

not interfere, is bit difficult to countenance; the discretion

to amend the pleadings for making a substantive claim is

one thing and the power to elongate the period of

limitation prescribed by law, is another, as already

discussed above; when court had no discretion to disobey

the mandate of law namely, Section 3(i) r/w 3(2)(b)(ii) of

the Limitation Act, 1963, and therefore, it could not have

granted leave to make a Counterclaim by amending the

Written Statement, there is an error of great magnitude

apparent on the file of the record and therefore, the Writ

Court is bound to interfere to set the same at naught.

In the above circumstances, this Writ Petition is

entitled to succeed and accordingly it does; a Writ of

Certiorari issues quashing the impugned order; the subject

application of the respondent seeking leave to amend the

Written Statement for introducing the Counterclaim is

dismissed.

All other contentions of the parties having been kept

open, learned Judge of the court below is requested to try

& dispose off the suit within an outer limit of one year, and

report compliance to the Registrar General of this Court.

Costs made easy.

Sd/-

JUDGE

Snb/