Supreme Court of India
LIFE INSURANCE CORPORATION OF INDIAversusSANJEEV BUILDERS PRIVATE LIMITED & ANR.
- Citation
- 2022 INSC 896
- Decided
- 1 September 2022
- Disposal
- Dismissed
- Bench
- ANIRUDDHA BOSE
Holding
Order II Rule 2 does not bar amendment in an existing suit, and the amendment for enhanced compensation in a specific‑performance suit is permissible under Order VI Rule 17 and the Specific Relief Act, provided it does not cause injustice or introduce a time‑barred cause of action.
Summary
The appellant (LIC) challenged the High Court’s order allowing the respondents (Sanjeev Builders and another) to amend their plaint in a suit for specific performance, seeking a higher quantum of damages. The appellant argued that the amendment was barred by Order II Rule 2 of the CPC and the doctrine of constructive res judicata. The Supreme Court held that Order II Rule 2 applies only to subsequent suits and cannot bar an amendment in an existing suit, and that the doctrine of constructive res judicata was inapplicable as there was no adjudication. The Court further held that, under Order VI Rule 17 of the CPC and the provisos to Sections 21(5) and 22(2) of the Specific Relief Act, a plaintiff may amend the plaint to claim or increase compensation, provided the amendment does not introduce a new cause of action or a time‑barred claim and does not cause injustice to the opposite party. Consequently, the appeal was dismissed and the amendment order upheld.
Issues considered
- Whether Order II Rule 2 of the CPC bars the amendment of the plaint in the present suit.
- Whether the amendment is barred by the principle of constructive res judicata.
- Whether the amendment seeking enhanced damages is permissible under Order VI Rule 17 of the CPC.
- Whether the proviso to Section 21(5) and Section 22(2) of the Specific Relief Act, 1963 allows such amendment.
- Whether the coordinate‑bench judgment in Life Insurance Corporation of India v. Sanjeev Builders (2018) is applicable.
- Whether the amendment introduces a new cause of action or a time‑barred claim.
Legislation cited
- Code of Civil Procedure, 1908s. Order II Rule 2, s. Order VI Rule 17
- Indian Contract Act, 1872s. Section 73
- Specific Relief Act, 1963s. Section 21(5) proviso, s. Section 22(2) proviso
- Specific Relief (Amendment) Act, 2018
Subjects
amendment of pleadingsOrder II Rule 2Order VI Rule 17specific performancecompensationSpecific Relief Actconstructive res judicatalimitationcivil procedureliberal approach
Judgment
[2022] 8 S.C.R. 1121 1121
LIFE INSURANCE CORPORATION OF INDIA A
v.
SANJEEV BUILDERS PRIVATE LIMITED & ANR.
(Civil Appeal No. 5909 of 2022)
SEPTEMBER 1, 2022 B
[ANIRUDDHA BOSE AND J. B. PARDIWALA, JJ.]
Code of Civil Procedure, 1908 – Or. II r. 2 and Or. VI r. 17 –
Applicability of Or. II r. 2 to an amendment application – Held:
Or.II r.2 operates as a bar against a subsequent suit if the requisite
C
conditions for application thereof are satisfied and the field of
amendment of pleadings falls far beyond its purview – The bar of
Or. II r.2 applies only to the subsequent suits – Or. II r.2 cannot
apply to an amendment which is sought on an existing suit.
Specific Relief Act, 1963 – Suit for Specific Performance –
D
Code of Civil Procedure, 1908 – Or. II r.2, Or. VI r.17 – Applicability
of – Respondents instituted suit seeking specific performance of
the agreement and in the alternative, prayed for damages – High
Court permitted the Respondents to amend the plaint, seeking to
enhance the amount towards the alternative claim for damages –
Correctness of – Held: There is no merit in the contention raised on E
behalf of the appellant that the amendment application is liable to
be rejected by applying the bar u/Or.II r.2 CPC – Or.II r.2 of CPC
cannot apply to an amendment which is sought on an existing suit –
Further, the amendment application is also not hit by the principle
of constructive res judicata – The said principle has no application
F
in the instant case, since there was no formal adjudication between
the parties after full hearing – Litigation before this Court has come
up at the stage when the courts below allowed the amendment of
plaint for the purpose of enhancing the amount towards damages
in the alternative to the main relief of specific performance of the
contract – Also, it cannot be successfully urged that a suit for specific G
performance falling under the provisions of the 1963 Act would
not be governed by the provisions of the CPC – It is, therefore,
clear that to such a suit the provisions contained in Or.VI, r.17 of
the CPC would apply and a plaintiff who has earlier failed to
incorporate the reliefs for compensation or who has incorporated
H
1121
1122 SUPREME COURT REPORTS [2022] 8 S.C.R.
A the reliefs for compensation but seeks amendment in the same, could
seek the permission of the court to introduce these reliefs by way of
amendment – Impugned order passed by the Division Bench of the
High Court, affirming the order passed by the Single Judge allowing
the amendment application not disturbed – Doctrine of constructive
res judicata.
B
Code of Civil Procedure, 1908 – Or. VI r. 17 – Amendment of
pleadings – Held: All amendments are to be allowed which are
necessary for determining the real question in controversy provided
it does not cause injustice or prejudice to the other side – This is
mandatory, as is apparent from the use of the word “shall”, in the
C latter part of Or.VI r.17 – In dealing with a prayer for amendment
of pleadings, the court should avoid a hypertechnical approach,
and is ordinarily required to be liberal especially where the opposite
party can be compensated by costs – Where the amendment would
enable the court to pin-pointedly consider the dispute and would
D aid in rendering a more satisfactory decision, the prayer for
amendment should be allowed – Where the amendment merely sought
to introduce an additional or a new approach without introducing
a time barred cause of action, the amendment is liable to be allowed
even after expiry of limitation – Delay in applying for amendment
alone is not a ground to disallow the prayer – Where the aspect of
E delay is arguable, the prayer for amendment could be allowed and
the issue of limitation framed separately for decision.
Code of Civil Procedure, 1908 – Or. VI r. 17 – Amendment of
pleadings – When to be allowed and not to be allowed – Discussed.
F Specific Relief Act, 1963 – Proviso to s.21(5) and s.22(2) –
Code of Civil Procedure, 1908 – Or. VI r. 17 – Held: The two provisos
deal with the question of permitting the plaintiff to amend his plaint
– It is not, as if, in the absence of these two provisos, it is not
permissible in law for the plaintiff to carry out an amendment in his
pleading by introducing a relief for enhanced compensation – r.17
G of Order VI does confer power on a Court to allow a party to alter
or amend his pleading in such manner and on such terms as may be
just and allows all such amendments to be made as may be necessary
for the purpose of determining the real question in controversy
between the parties.
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1123
BUILDERS PRIVATE LIMITED & ANR.
Specific Relief Act, 1963 – s.21 – Scope and ambit of – A
Discussed – Specific Relief Amendment Act, 2018.
Words & Phrases:
“shall”, in the latter part of Or.VI r.17 – Code of Civil
Procedure, 1908 – Or.VI r.17.
B
“omits to sue” and “intentionally relinquish any portion of
his claim” – Discussed – Code of Civil Procedure, 1908 – Or.II r.2.
Dismissing the appeal, the Court
HELD: 1.1 It is well settled that the court must be extremely
liberal in granting the prayer for amendment, if the court is of the C
view that if such amendment is not allowed, a party, who has
prayed for such an amendment, shall suffer irreparable loss and
injury. It is also equally well settled that there is no absolute rule
that in every case where a relief is barred because of limitation,
amendment should not be allowed. It is always open to the court D
to allow an amendment if it is of the view that allowing of an
amendment shall really sub-serve the ultimate cause of justice
and avoid further litigation. The power to allow an amendment is
undoubtedly wide and may be appropriately exercised at any stage
in the interests of justice, notwithstanding the law of limitation.
The principles applicable to the amendments of the plaint are E
equally applicable to the amendments of the written statements.
The courts are more generous in allowing the amendment of the
written statement as question of prejudice is less likely to operate
in that event. The defendant has a right to take alternative plea
in defense which, however, is subject to an exception that by the F
proposed amendment other side should not be subjected to
injustice and that any admission made in favor of the plaintiff is
not withdrawn. All amendments of the pleadings should be allowed
which are necessary for determination of the real controversies
in the suit provided the proposed amendment does not alter or
substitute a new cause of action on the basis of which the original G
lis was raised or defense taken. Inconsistent and contradictory
allegations in negation to the admitted position of facts or mutually
destructive allegations of facts should not be allowed to be
incorporated by means of amendment to the pleadings. The
proposed amendment should not cause such prejudice to the other
H
1124 SUPREME COURT REPORTS [2022] 8 S.C.R.
A side which cannot be compensated by costs. No amendment
should be allowed which amounts to or relates in defeating a legal
right accruing to the opposite party on account of lapse of time.
The delay in filing the application for amendment of the pleadings
should be properly compensated by costs and error or mistake
which, if not fraudulent, should not be made a ground for rejecting
B
the application for amendment of plaint or written statement. But
undoubtedly, every case and every application for amendment
has to be tested in the applicable facts and circumstances of the
case. As the proposed amendment of the pleadings amounts to
only a different or an additional approach to the same facts, this
C Court has repeatedly laid down the principle that such an
amendment would be allowed even after the expiry of statutory
period of limitation. [Paras 19, 23, 25 & 26][1135-C-D; 1137-D;
1138-B-G]
L.J. Leach & Co. Ltd. &Anr. v. Jardine Skinner & Co.
D AIR 1957 SC 357 : [1957] SCR 438; T.N. Alloy Foundry
Co. Ltd. v. T.N. Electricity Board & Ors. (2004) 3 SCC
392 : [2004] 2 SCR 352; Pirgonda Hongonda Patil v.
Kalgonda Shidgonda Patil 2 Ors. [1957] SCR 595 :
AIR 1957 SC 363; Ganga Bai v. Vijay Kumar & Ors.
(1974) 2 SCC 393 : [1974] 3 SCR 882; M/s Ganesh
E Trading Co. v. Moji Ram (1978) 2 SCC 91 : [1978] 2
SCR 614; South Konkan Distilleries & Anr. v.
Prabhakar Gajanan Naik & Ors. (2008) 14 SCC 632 :
[2008] 13 SCR 295; A.K. Gupta Sons Ltd. v. Damodar
Valley Corporation AIR 1967 SC 96 : [1966] 1 SCR
F 796; Pankaja & Anr. v. Yellappa (dead) by LRs. & Ors.
(2004) 6 SCC 415 – relied on.
1.2 One of the cardinal principles of law in allowing or
rejecting an application for amendment of the pleading is that the
courts generally, as a rule, decline to allow amendments, if a fresh
G suit on the amended claim would be barred by limitation on the
date of filing of the application. But that would be a factor to be
taken into account in the exercise of the discretion as to whether
the amendment should be ordered, and does not affect the power
of the court to order it, if that is required in the interest of justice.
[Para 30][1141-D-E]
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LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1125
BUILDERS PRIVATE LIMITED & ANR.
2. The judgment and order passed by the coordinate Bench A
of this Court in the Life Insurance Corporation of India (between
the same parties) has no application so far as the present appeal
is concerned. The appellant herein cannot succeed in the present
appeal merely on the strength of the judgment and order passed
by this Court in the Life Insurance Corporation of India. [Para
B
42][1148-D]
Life Insurance Corporation of India v. Sanjeev Builders
Pvt. Ltd. & Ors. (2018) 11 SCC 722 : [2017] 10 SCR
208 – held inapplicable.
3.1 The expressions “omits to sue” and “intentionally C
relinquish any portion of his claim” give an indication as to the
intention of the legislature in framing the said rule. The term
‘sue’ can mean both the filing of the suit and prosecuting the suit
to its culmination, depending on the context of the provision. In
the present case, the legislature thought it fit to debar a plaintiff
from suing afterwards for any relief which he/she has omitted D
without the leave of the court or from suing in respect of any
portion of his claim which he intentionally relinquishes. Order II
Rule 2(1) provides that every suit shall include the whole of the
claim which the plaintiff is entitled to make in respect of the cause
of action. [Para 45][1149-D-E] E
3.2 The bar of Order II Rule 2 of the CPC applies only to
the subsequent suits. If the two suits and the relief claimed therein
are based on the same cause of action then the subsequent suit
will become barred under Order II Rule 2 of the CPC. However,
there is no merit in the contention raised on behalf of the appellant F
herein that the amendment application is liable to be rejected by
applying the bar under Order II Rule 2 of the CPC. Order II
Rule 2 of the CPC cannot apply to an amendment which is sought
on an existing suit. Also not impressed by the contention raised
on behalf of the appellant herein that the amendment application
is hit by the principle of constructive res judicata. The principle G
of constructive res judicata has no application in the instant case,
since there was no formal adjudication between the parties after
full hearing. The litigation before this Court has come up at the
stage when the courts below allowed the amendment of plaint for
H
1126 SUPREME COURT REPORTS [2022] 8 S.C.R.
A the purpose of enhancing the amount towards damages in the
alternative to the main relief of specific performance of the
contract. [Paras 49, 50 & 52][1152-D-E; 1153-G-H; 1154-A]
Gurbux Singh v. Bhooralal AIR 1964 SC 1810 : [ 1964]
7 SCR 831 – followed.
B Vaish Cooperative Adarsh Bank Ltd. v. Geetanjali
Despande & Ors. (2003) 102 DLT 570 – approved.
4.1 The Act 1963 contemplates that in addition to or in
substitution of a claim for performance, a plaintiff is entitled to
claim compensation. Under sub-section (2) of Section 21, the
C court is empowered to award compensation for breach where it
holds that there is a contract between the parties which was
broken by the defendant but in the event, it decides that specific
performance ought not to be granted. Sub-section (3) of Section
21 empowers the court to grant compensation for breach in
D addition to a decree for specific performance where it is of the
view that specific performance alone would not satisfy the justice
of the case. Sub-section (5), however, stipulates that
compensation cannot be awarded under the section unless the
Plaintiff has claimed such compensation in the plaint. This
provision is mandatory. The proviso to sub-section (5) of Section
E 21 dilutes the rigours of the main provision by allowing the plaintiff
who has not claimed such compensation in the plaint to amend
the plaint at any stage of the proceedings and the court, it has
been provided, shall at any stage of the proceedings allow an
amendment for including a claim for such compensation on such
F terms as may be just. Section 22 has a non-obstante provision
which overrides the CPC. A plaintiff who claims specific
performance of a contract for the transfer of immovable property,
may in an appropriate case ask for possession, partition and
separate possession of the property, in addition to specific
performance. The plaintiff may also claim any other relief including
G the refund of earnest money or deposit paid, in case the claim for
specific performance is refused. Corresponding to the provisions
of sub-section (5) of Section 21, sub-section (2) of Section 22
stipulates that such relief cannot be granted by the court unless
it has been specifically claimed. However, the proviso requires
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1127
BUILDERS PRIVATE LIMITED & ANR.
that the court shall at any stage of the proceedings allow the A
plaintiff to amend the plaint to claim such relief where it has not
been originally claimed on such terms which may appear just.
[Paras 54, 55, 56 & 58][1154-B; 1155-B-E; 1156-D-E]
Shamsu Suhara Beevi v. G. Alex & Anr. (2004) 8 SCC
569 : [2004] 3 Suppl. SCR 653 – referred to. B
4.2 The plaintiffs in the original plaint claimed for
compensation in addition to a decree for specific performance of
the agreement to sell. Therefore, strictly speaking the provisions
of Section 21 of the Act 1963 are not attracted to the facts of the
present case. The intention of the plaintiffs in seeking for C
amendment of the plaint appears to be to get an enhanced amount
of compensation than what was originally claimed in the original
plaint which was restricted only to Rs. 1,01,00,000/-. The aforesaid
intention becomes apparent when the averments made in the
application praying for amendment are looked into inasmuch as,
the plaintiffs have stated that in view of the fact that in last 30 D
years there had been a tremendous escalation of the value of the
suit property which has an adverse effect on the quantum of
damages, compensation, relief sought for the breach of contract
by the appellant/defendant. According to the plaintiffs the raising
of the amount of compensation to Rs. 400,01,00,000/- from Rs. E
1,01,00,000/- as claimed in the original plaint has been
necessitated in view of undue delay in the prosecution of the suit
which was not earlier foreseen, which in turn has caused more
damage to the plaintiffs through the years and therefore, they
have sought to raise the amount of compensation to the present
value as stated above from Rs. 1,01,00,000/-. The two provisos F
referred to, deal with the question of permitting the plaintiff to
amend his plaint. It is not, as if, in the absence of these two
provisos, it is not permissible in law for the plaintiff to carry out
an amendment in his pleading by introducing a relief for enhanced
compensation. Rule 17 of Order VI of the CPC does confer power G
on a Court to allow a party to alter or amend his pleading in such
manner and on such terms as may be just. This rule does not
stop at that, but it further says that all such amendments should
be made as may be necessary for the purpose of determining the
H
1128 SUPREME COURT REPORTS [2022] 8 S.C.R.
A real question in controversy between the parties. This provision
which empowers the court in its discretion to permit a party to
amend his pleadings, was already on the statute book, when the
Specific Relief Act, 1963 was enacted. It can, therefore, be
presumed that when the latter legislation was on the anvil, the
Parliament was aware of this power of the court to permit
B
amendment of pleadings. Therefore, it cannot be successfully
urged that a suit for specific performance falling under the
provisions of the Act, 1963 would not be governed by the
provisions of the CPC. It is, therefore, clear that to such a suit
the provisions contained in Order VI Rule 17 of the CPC would
C apply and a plaintiff who has earlier failed to incorporate the reliefs
for compensation or who has incorporated the reliefs for
compensation but seeks amendment in the same, could seek the
permission of the court to introduce these reliefs by way of
amendment. [Paras 64 & 66][1160-F-H; 1161-A-B, E-H; 1162-
D A]
4.3 Final conclusions:
(i) Order II Rule 2 CPC operates as a bar against a
subsequent suit if the requisite conditions for application thereof
are satisfied and the field of amendment of pleadings falls far
E beyond its purview. The plea of amendment being barred under
Order II Rule 2 CPC is, thus, misconceived and hence negatived.
(ii) All amendments are to be allowed which are necessary
for determining the real question in controversy provided it does
not cause injustice or prejudice to the other side. This is
F
mandatory, as is apparent from the use of the word “shall”, in the
latter part of Order VI Rule 17 of the CPC.
(iii) The prayer for amendment is to be allowed
(i) if the amendment is required for effective and
G proper adjudication of the controversy between the parties,
and
(ii) to avoid multiplicity of proceedings, provided
(a) the amendment does not result in injustice to the
H other side,
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1129
BUILDERS PRIVATE LIMITED & ANR.
(b) by the amendment, the parties seeking amendment A
does not seek to withdraw any clear admission made by
the party which confers a right on the other side and
(c) the amendment does not raise a time barred claim,
resulting in divesting of the other side of a valuable accrued
right (in certain situations). B
(iv) A prayer for amendment is generally required to be
allowed unless
(i) by the amendment, a time barred claim is sought
to be introduced, in which case the fact that the claim would
be time barred becomes a relevant factor for consideration, C
(ii) the amendment changes the nature of the suit,
(iii) the prayer for amendment is malafide, or
(iv) by the amendment, the other side loses a valid
defence.
D
(v) In dealing with a prayer for amendment of pleadings,
the court should avoid a hypertechnical approach, and is ordinarily
required to be liberal especially where the opposite party can be
compensated by costs.
(vi) Where the amendment would enable the court to pin-
E
pointedly consider the dispute and would aid in rendering a more
satisfactory decision, the prayer for amendment should be
allowed.
(vii) Where the amendment merely sought to introduce an
additional or a new approach without introducing a time barred
cause of action, the amendment is liable to be allowed even after F
expiry of limitation.
(viii) Amendment may be justifiably allowed where it is
intended to rectify the absence of material particulars in the plaint.
(ix) Delay in applying for amendment alone is not a ground
G
to disallow the prayer. Where the aspect of delay is arguable, the
prayer for amendment could be allowed and the issue of limitation
framed separately for decision.
(x) Where the amendment changes the nature of the suit
or the cause of action, so as to set up an entirely new case, foreign
H
1130 SUPREME COURT REPORTS [2022] 8 S.C.R.
A to the case set up in the plaint, the amendment must be
disallowed. Where, however, the amendment sought is only with
respect to the relief in the plaint, and is predicated on facts which
are already pleaded in the plaint, ordinarily the amendment is
required to be allowed.
B (xi) Where the amendment is sought before commencement
of trial, the court is required to be liberal in its approach. The
court is required to bear in mind the fact that the opposite party
would have a chance to meet the case set up in amendment. As
such, where the amendment does not result in irreparable
prejudice to the opposite party, or divest the opposite party of an
C advantage which it had secured as a result of an admission by the
party seeking amendment, the amendment is required to be
allowed. Equally, where the amendment is necessary for the court
to effectively adjudicate on the main issues in controversy
between the parties, the amendment should be allowed. [Para
D 70][1162-G-H; 1163-A-H; 1164-A-H]
B.K. Narayana Pillai v. Parameswaran Pillai & Anr.
(2000) 1 SCC 712 : [1999] 5 Suppl. SCR 271; Jagdish
Singh v. Natthu Singh (1992) 1 SCC 647 : [1991] 2
Suppl. SCR 567– relied on.
E Charan Das & Ors. v. Amir Khan & Ors. AIR 1921 PC
50; Kisandas Rupchand & Anr. v. Rachappa Vithoba
Shilwant and Ors. ILR (1909) 33 Bom 644; Ragu
Thilak D. John v. S. Rayappan & Ors. (2001) 2 SCC
472; Vishwambhar & Ors. v. Laxminarayan (Dead)
F through Lrs. & Anr. (2001) 6 SCC 163; Vineet Kumar
v. Mangal Sain Wadhera (1984) 3 SCC 352 : [1984] 2
SCR 333 : AIR 1985 SC 817; Sanjeev Builders Pvt.
Ltd. & Ors. v. Life Insurance Corporation of India 2018
SCC OnLine Bom 15283; Mohd. Khalil Khan & Ors.
v. Mahbub Ali Mian & Ors. AIR 1949 PC 78; Upendra
G Narain Roy v. Rai Janoki Nath Roy AIR 1919 Cal 904;
Kahini Developers Pvt. Ltd. v. Mukesh
Morarjipanchamatia & Ors. (2013) 3 Mah LJ 440;
The Arya Pradeshak Pritinidhi Sabha, Sindh, Punjab
& Bilochistan v. Lahori Mal & Ors. (1924) 6 Lah LJ
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1131
BUILDERS PRIVATE LIMITED & ANR.
286 : AIR 1924 48 Lah 713; Somasundaram Chettiar A
v. Chidambaram Chettiar, AIR 1951 Mad 282; Vijay
Gupta v. Gagninder Kr. Gandhi & Ors., 2022 SCC
OnLine Del 1897 – referred to.
Case Law Reference
[2017] 10 SCR 208 held inapplicable Para 7 B
[1957] SCR 438 relied on Para 19
[2004] 2 SCR 352 relied on Para 20
[1957] SCR 595 relied on Para 22
C
[1974] 3 SCR 882 relied on Para 23
[1978] 2 SCR 614 relied on Para 24
[2008] 13 SCR 295 relied on Para 25
[1966] 1 SCR 796 relied on Para 27
D
(2004) 6 SCC 415 referred to Para 29
(2001) 2 SCC 472 referred to Para 31
(2001) 6 SCC 163 referred to Para 32
[1984] 2 SCR 333 referred to Para 33
E
[1964] 7 SCR 831 followed Para 48
[2004] 3 Suppl. SCR 653 referred to Para 56
[1999] 5 Suppl. SCR 271 relied on Para 61
[1991] 2 Suppl. SCR 567 relied on Para 62 F
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5909
of 2022.
From the Judgment and Order dated 13.12.2018 of the High Court
of Judicature at Bombay in Appeal [L] No.499 of 2018 in Chamber
Summons No. 854 of 2017 in Suit No.894 of 1986. G
D. N. Goburdhun, Sr. Adv., Aakarsh Kamra, Ms. Gauri Gobardhan,
Advs. for the Appellant.
Sanjiv Sen, Sr. Adv., Mahesh Agarwal, Ankur Saigal, N.
Janardhanan, Ms. Kajal Dalal, Abhinabh Garg, Ms. Deepshikha Mishra,
H
1132 SUPREME COURT REPORTS [2022] 8 S.C.R.
A E. C. Agrawala, Advs. for the Respondents.
The Judgment of the Court was delivered by
J. B. PARDIWALA, J.
1. Leave granted.
B 2. This appeal is at the instance of a defendant in a suit filed by
the respondents herein (original plaintiffs) for the specific performance
of contract based on an agreement dated 08.06.1979 and is directed
against the judgment and order passed by the High Court of Judicature
at Bombay dated 13.12.2018 in the Appeal [L] No. 499 of 2018, arising
C from the order passed by a learned Single Judge on its ordinary original
civil jurisdiction side in the Chamber Summons No. 854 of 2017 in the
Suit No. 894 of 1986 dated 11.09.2018. The Chamber Summons was
allowed by the High Court at the instance of the plaintiffs, permitting the
plaintiffs to amend the plaint. The order passed by the High Court in the
Chamber Summons came to be affirmed by a Division Bench in the
D Appeal [L] No. 499 of 2018. The High Court permitted the plaintiffs to
amend the plaint, seeking to enhance the amount towards the alternative
claim for damages.
FACTUAL MATRIX
3. It appears from the materials on record that the respondents
E
herein are the original plaintiffs and the appellant herein is the original
defendant in the Suit No. 894 of 1986, pending as on date in the High
Court of Judicature at Bombay on its original side. The said suit has
been instituted seeking specific performance of the agreement dated
08.06.1979. In the alternative, the plaintiffs have also prayed for damages.
F The plaintiffs moved the Chamber Summons No. 854 of 2017, inter
alia, seeking enhancement of the amount towards damages on the
grounds, more particularly, set out in the affidavit filed in support of the
said chamber summons.
4. The learned Single Judge of the High Court allowed the chamber
G summons referred to above, vide the order dated 11.09.2018, keeping
the issue of limitation open and also permitting the defendant, appellant
herein, to file additional written statement.
5. The appellant herein preferred an appeal against the said order
which came to be dismissed vide the impugned order dated 13.12.2018.
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LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1133
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
6. Being aggrieved and dissatisfied with the impugned order passed A
by the High Court referred to above, the appellant (original defendant) is
here before this Court with the present appeal.
SUBMISSIONS ON BEHALF OF THE APPELLANT
7. The learned senior counsel appearing for the appellant,
vehemently, submitted that the High Court committed a serious error in B
passing the impugned order. He would submit that the High Court
overlooked the order passed by this Court in the Life Insurance
Corporation of India v. Sanjeev Builders Pvt. Ltd. & Ors., (2018) 11
SCC 722 between the same parties, arising from the same suit
proceedings. C
8. The learned counsel would submit that the High Court should
not have permitted the plaintiffs to amend the plaint after a period of
thirty-one years, more particularly, when the earlier amendment seeking
to implead the assignee as the plaintiff No. 3 in the suit was declined by
this Court vide the judgment and order dated 24.10.2017 passed in the D
Life Insurance Corporation of India (supra).
9. The learned counsel would submit that the High Court failed to
consider that the amendment was hit by the provisions of Order II Rule
2 of the Civil Procedure Code, 1908 (for short, the ‘CPC’). He would
submit that the amendment could be said to be even hit by the principle E
of constructive res judicata.
10. The learned counsel pointed out that at the time when the suit
came to be instituted, the damages to the tune of Rs. 1,01,00,000/- [Rs.
One Crore & One Lakh only] in the alternative was prayed for. By way
of amendment the damages now prayed for is to the tune of Rs. F
4,00,01,00,000/- [Rs. Four Hundred Crore & One Lakh only].
11. In such circumstances referred to above, the learned counsel
appearing for the appellant (original defendant) prayed that there being
merit in his appeal, the same may be allowed and the impugned order
passed by the High Court may be set aside and the original amendment
G
application filed by the plaintiffs be rejected.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS
12. The learned senior counsel appearing for the respondents
herein (original plaintiffs) on the other hand, submitted that no error, not
to speak of any error of law, could be said to have been committed by H
1134 SUPREME COURT REPORTS [2022] 8 S.C.R.
A the High Court in passing the impugned order. It is submitted that the
question of limitation has been kept open by the High Court that may be
agitated by the defendant in the trial and the defendant has also been
permitted to file its additional written statement.
13. The learned counsel would submit that the suit is yet to be
B adjudicated; and in such circumstances, the delay in amending the plaint
for the purpose of enhancing the amount towards damages would not
cause any serious prejudice to the defendant.
14. The learned counsel further submitted that the provisions of
Order II Rule 2 of the CPC cannot be made applicable to an application
C seeking amendment of plaint.
15. The learned counsel in the last submitted that the decision of
this Court rendered in the case of Life Insurance Corporation of India
(supra) between the same parties was altogether in a different context.
In the said appeal before this Court, the issue was whether the assignee
could have been impleaded as one of the plaintiffs in the suit after a
D
period of twenty-seven years from the date of institution of the suit?
16. In such circumstances referred to above, the learned counsel
appearing for the plaintiffs prays that there being no merit in this appeal,
the same may be dismissed with costs.
E ANALYSIS
17. Having heard the learned counsel appearing for the parties
and having gone through the materials on record, the following questions
of law fall for the consideration of this Court:
1. Whether the High Court committed any material irregularity
F or jurisdictional error going to the root of the matter in passing
the impugned order?
2. Whether the provisions of Order II Rule 2 CPC can be
made applicable to an amendment application?
3. Whether the amendment of plaint for the purpose of
G enhancing the amount towards damages could be said to
be hit by the doctrine of constructive res judicata?
4. Whether the judgment and order passed by a coordinate
Bench of this Court in the case of Life Insurance
Corporation of India (supra) between the same parties
H has any bearing on the present appeal?
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1135
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
5. Whether the present appeal is covered by the proviso to A
Section 21(5) and Section 22(2) resply of the Specific Relief
Act, 1963 (47 of 1963) (for short, ‘the Act 1963’)?
18. Before adverting to the rival contentions canvassed on either
side and before we deal with the orders passed by the High Court
permitting the plaintiffs to amend the plaint with respect to the prayer B
clause, let us consider, the laws on the question of allowing or rejecting
a prayer for amendment of the pleadings, more particularly, when the
plea of limitation was taken by one of the parties.
19. It is well settled that the court must be extremely liberal in
granting the prayer for amendment, if the court is of the view that if
C
such amendment is not allowed, a party, who has prayed for such an
amendment, shall suffer irreparable loss and injury. It is also equally well
settled that there is no absolute rule that in every case where a relief is
barred because of limitation, amendment should not be allowed. It is
always open to the court to allow an amendment if it is of the view that
allowing of an amendment shall really sub-serve the ultimate cause of D
justice and avoid further litigation. In L.J. Leach & Co. Ltd. & Anr. v.
Jardine Skinner & Co., AIR 1957 SC 357, this Court at paragraph 16
of the said decision observed as follows:
“16. It is no doubt true that courts would, as a rule, decline
to allow amendments, if a fresh suit on the amended claim E
would be barred by limitation on the date of the application.
But that is a factor to be taken into account in exercise of the
discretion as to whether amendment should be ordered, and
does not affect the power of the court to order it, if that is
required in the interest of justice…..”
F
20. Again in T.N. Alloy Foundry Co. Ltd. v. T.N. Electricity
Board & Ors., (2004) 3 SCC 392, this Court observed as follows:
“2. …..The law as regards permitting amendment to the plaint,
is well settled. In L.J. Leach and Co. Ltd. v. Jardine Skinner
and Co. [AIR 1957 SC 357 : 1957 SCR 438] it was held that
the Court would as a rule decline to allow amendments, if a G
fresh suit on the amended claim would be barred by limitation
on the date of the application. But that is a factor to be taken
into account in exercise of the discretion as to whether
amendment should be ordered, and does not affect the power
of the court to order it. H
1136 SUPREME COURT REPORTS [2022] 8 S.C.R.
A 3. It is not disputed that the appellate court has a coextensive
power of the trial court. We find that the discretion exercised
by the High Court in rejecting the plaint was in conformity
with law.”
21. So far as the answer to the specific plea that the claim of
B damages is barred by limitation and cannot be permitted at this stage is
concerned, it becomes necessary to examine the various judicial
pronouncements of this Court. The principles governing an amendment
which may be permitted even after the expiry of the statutory period of
limitation were laid down by the Privy Council in its judgment in Charan
Das & Ors. v. Amir Khan & Ors., AIR 1921 PC 50. In this case, the
C Privy Council laid down the principles thus:
“…..That there was full power to make the amendment cannot
be disputed, and though such a power should not as a rule
be exercised where its effect is to take away from a defendant
a legal right which has accrued to him by lapse of time, yet
D there are cases: see for example Mohummud Zahoor Ali v.
Rutta Koer, where such considerations are outweighed by the
special circumstances of the case, and their Lordships are
not prepared to differ from the Judicial Commissioner in
thinking that the present case is one.”
E 22. It would be useful to also notice the observations of this Court
in, Pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil & 2 Ors.,
1957 SCR 595 : AIR 1957 SC 363, wherein this Court considered an
objection to the amendment on the ground that the same amounted to a
new case and a new cause of action. In this case, this Court laid down
F the principles which would govern the exercise of discretion as to whether
the court ought to permit an amendment of the pleadings or not. This
Court approved the observations of Batchelor, J., in the case of Kisandas
Rupchand & Anr. v. Rachappa Vithoba Shilwant and Ors. reported
in ILR (1909) 33 Bom 644, when he laid down the principles thus:
G “10. …..”All amendments ought to be allowed which satisfy
the two conditions (a) of not working injustice to the other
side, and (b) of being necessary for the purpose of determining
the real questions in controversy between the parties … but I
refrain from citing further authorities, as, in my opinion, they
all lay down precisely the same doctrine. That doctrine, as I
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1137
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
understand it, is that amendments should be refused only A
where the other party cannot be placed in the same position
as if the pleading had been originally correct, but the
amendment would cause him an injury which could not be
compensated in costs. It is merely a particular case of this
general rule that where a plaintiff seeks to amend by setting
B
up a fresh claim in respect of a cause of action which since
the institution of the suit had become barred by limitation, the
amendment must be refused; to allow it would be to cause the
defendant an injury which could not be compensated in costs
by depriving him of a good defence to the claim. The ultimate
test therefore still remains the same : can the amendment be C
allowed without injustice to the other side, or can it not?”…..”
23. This Court has repeatedly held that the power to allow an
amendment is undoubtedly wide and may be appropriately exercised at
any stage in the interests of justice, notwithstanding the law of limitation.
In this behalf, in Ganga Bai v. Vijay Kumar & Ors., (1974) 2 SCC 393, D
this Court held thus:
“22. …..The power to allow an amendment is undoubtedly
wide and may at any stage be appropriately exercised in the
interest of justice, the law of limitation notwithstanding. But
the exercise of such far-reaching discretionary powers is E
governed by judicial considerations and wider the discretion,
greater ought to be the care and circumspection on the part
of the Court…..”
24. Again in M/s Ganesh Trading Co. v. Moji Ram, (1978) 2
SCC 91, this Court laid down the principles thus: F
“4. It is clear from the foregoing summary of the main rules
of pleadings that provisions for the amendment of pleadings,
subject to such terms as to costs and giving of all parties
concerned necessary opportunities to meet exact situations
resulting from amendments, are intended for promoting the G
ends of justice and not for defeating them. Even if a party or
its Counsel is inefficient in setting out its case initially the
shortcoming can certainly be removed generally by
appropriate steps taken by a party which must no doubt pay
costs for the inconvenience or expense caused to the other
H
1138 SUPREME COURT REPORTS [2022] 8 S.C.R.
A side from its omissions. The error is not incapable of being
rectified so long as remedial steps do not unjustifiably injure
rights accrued.”
25. The principles applicable to the amendments of the plaint are
equally applicable to the amendments of the written statements. The
B courts are more generous in allowing the amendment of the written
statement as question of prejudice is less likely to operate in that event.
The defendant has a right to take alternative plea in defense which,
however, is subject to an exception that by the proposed amendment
other side should not be subjected to injustice and that any admission
made in favor of the plaintiff is not withdrawn. All amendments of the
C
pleadings should be allowed which are necessary for determination of
the real controversies in the suit provided the proposed amendment does
not alter or substitute a new cause of action on the basis of which the
original lis was raised or defense taken. Inconsistent and contradictory
allegations in negation to the admitted position of facts or mutually
D destructive allegations of facts should not be allowed to be incorporated
by means of amendment to the pleadings. The proposed amendment
should not cause such prejudice to the other side which cannot be
compensated by costs. No amendment should be allowed which amounts
to or relates in defeating a legal right accruing to the opposite party on
account of lapse of time. The delay in filing the application for amendment
E
of the pleadings should be properly compensated by costs and error or
mistake which, if not fraudulent, should not be made a ground for rejecting
the application for amendment of plaint or written statement. (See South
Konkan Distilleries & Anr. v. Prabhakar Gajanan Naik & Ors.,
(2008) 14 SCC 632)
F
26. But undoubtedly, every case and every application for
amendment has to be tested in the applicable facts and circumstances
of the case. As the proposed amendment of the pleadings amounts to
only a different or an additional approach to the same facts, this Court
has repeatedly laid down the principle that such an amendment would
G be allowed even after the expiry of statutory period of limitation.
27. In this behalf, in A.K. Gupta & Sons Ltd. v. Damodar Valley
Corporation, AIR 1967 SC 96 : (1966) 1 SCR 796, this Court held thus:
“7. …..a new case or a new cause of action particularly when
a suit on the new case or cause of action is barred: Weldon v.
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1139
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
Neale [19 QBD 394]. But it is also well recognised that where A
the amendment does not constitute the addition of a new cause
of action or raise a different case, but amounts to no more
than a different or additional approach to the same facts, the
amendment will be allowed even after the expiry of the
statutory period of limitation:…..”
B
28. In entitled, G. Nagamma & Anr. v. Siromanamma & Anr.,
(1996) 2 SCC 25, this Court considered the proposed amendment of the
plaint and noticing that neither the cause of action would change nor the
relief would be materially affected, allowed the same. This Court in this
case noticed that in the plaintiff’s suit for specific performance, the
plaintiff was entitled to plead even inconsistent pleas and that in the C
present case, the plaintiffs were seeking only the alternative reliefs. It
appears that the plaintiffs had filed a suit for specific performance of an
agreement of re-conveyance. By the application under Order VI Rule
17 of the CPC for amendment of the plaint, the appellants were pleading
that the transactions of execution of the sale deed and obtaining a D
document for re- conveyance were single transactions viz. mortgage by
conditional sale. They also wanted to incorporate an alternative relief to
redeem the mortgage. At the end of the prayer, the plaintiff sought
alternatively to grant of a decree for redemption of the mortgage. This
amendment was permitted by this Court.
E
29. In Pankaja & Anr. v. Yellappa (dead) by lrs. & Ors., (2004)
6 SCC 415, this Court held that it was in the discretion of the court to
allow an application under Order VI Rule 17 of the CPC seeking
amendment of the plaint even where the relief sought to be added by
amendment was allegedly barred by limitation. The Court noticed that
there was no absolute rule that the amendment in such a case should not F
be allowed. It was pointed out that the court’s discretion in this regard
depends on the facts and circumstances of the case and has to be
exercised on a judicial evaluation thereof. It would be apposite to notice
the observations of this Court in this pronouncement in extenso. The
principles were laid down by this Court thus: G
“12. So far as the court’s jurisdiction to allow an amendment
of pleadings is concerned, there can be no two opinions that
the same is wide enough to permit amendments even in cases
where there has been substantial delay in filing such
amendment applications. This Court in numerous cases has H
1140 SUPREME COURT REPORTS [2022] 8 S.C.R.
A held that the dominant purpose of allowing the amendment is
to minimise the litigation, therefore, if the facts of the case so
permit, it is always open to the court to allow applications in
spite of the delay and laches in moving such amendment
application.
B 13. But the question for our consideration is whether in cases
where the delay has extinguished the right of the party by
virtue of expiry of the period of limitation prescribed in law,
can the court in the exercise of its discretion take away the
right accrued to another party by allowing such belated
amendments.
C
14. The law in this regard is also quite clear and consistent
that there is no absolute rule that in every case where a relief
is barred because of limitation an amendment should not be
allowed. Discretion in such cases depends on the facts and
circumstances of the case. The jurisdiction to allow or not
D allow an amendment being discretionary, the same will have
to be exercised on a judicious evaluation of the facts and
circumstances in which the amendment is sought. If the
granting of an amendment really subserves the ultimate cause
of justice and avoids further litigation the same should be
E allowed. There can be no straitjacket formula for allowing
or disallowing an amendment of pleadings. Each case
depends on the factual background of that case.
xxx xxx xxx
16. This view of this Court has, since, been followed by a
F three-Judge Bench of this Court in the case of T.N. Alloy
Foundry Co. Ltd. v. T.N. Electricity Board [(2004) 3 SCC
392]. Therefore, an application for amendment of the pleading
should not be disallowed merely because it is opposed on the
ground that the same is barred by limitation, on the contrary,
G application will have to be considered bearing in mind the
discretion that is vested with the court in allowing or
disallowing such amendment in the interest of justice.
xxx xxx xxx
18. We think that the course adopted by this Court in Ragu
H Thilak D. John case [(2001) 2 SCC 472] applies appropriately
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1141
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
to the facts of this case. The courts below have proceeded on A
an assumption that the amendment sought for by the appellants
is ipso facto barred by the law of limitation and amounts to
introduction of different relief than what the plaintiff had
asked for in the original plaint. We do not agree with the
courts below that the amendment sought for by the plaintiff
B
introduces a different relief so as to bar the grant of prayer
for amendment, necessary factual basis has already been laid
down in the plaint in regard to the title which, of course, was
denied by the respondent in his written statement which will
be an issue to be decided in a trial. Therefore, in the facts of
this case, it will be incorrect to come to the conclusion that by C
the amendment the plaintiff will be introducing a different
relief.”
30. From the above, therefore, one of the cardinal principles of
law in allowing or rejecting an application for amendment of the pleading
is that the courts generally, as a rule, decline to allow amendments, if a D
fresh suit on the amended claim would be barred by limitation on the
date of filing of the application. But that would be a factor to be taken
into account in the exercise of the discretion as to whether the amendment
should be ordered, and does not affect the power of the court to order it,
if that is required in the interest of justice. E
31. In Ragu Thilak D. John v. S. Rayappan & Ors., (2001) 2
SCC 472, this Court also observed that where the amendment was barred
by time or not, was a disputed question of fact and, therefore, that prayer
for amendment could not be rejected and in that circumstances the issue
of limitation can be made an issue in the suit itself like the one made by F
the High Court in the case on hand.
32. In a decision in Vishwambhar & Ors. v. Laxminarayan
(Dead) through Lrs. & Anr., (2001) 6 SCC 163, this Court held that
the amendment though properly made cannot relate back to the date of
filing of the suit, but to the date of filing of the application. G
33. Again, in Vineet Kumar v. Mangal Sain Wadhera, (1984) 3
SCC 352 : AIR 1985 SC 817, this Court held that if a prayer for
amendment merely adds to the facts already on record, the amendment
would be allowed even after the statutory period of limitation.
H
1142 SUPREME COURT REPORTS [2022] 8 S.C.R.
A IMPUGNED ORDERS
34. We now proceed to look into the two orders passed by the
High Court i.e. one by the learned Single Judge and the other in the
appeal by the Division Bench.
35. The learned Single Judge in Sanjeev Builders Pvt. Ltd. &
B Ors. v. Life Insurance Corporation of India, 2018 SCC OnLine Bom
15283, while allowing the Chamber Summons and permitting the plaintiffs
to amend the plaint, observed thus:
“5. It is the case of the applicant as submitted by Ms. Panda
that while filing the suit, plaintiffs quantified the estimated
C damages likely to be caused to them by reason of non
performance at Rs. 1,01,00,000/- The value of the suit
property increased during the pendency of the suit. According
to plaintiffs’ estimate, the value of the property today can be
estimated to be Rs. 400,01,00,000/- and if the court is not
D inclined to grant specific performance, then the damages
which plaintiffs would suffer on account of non performance
by the defendants under the agreement should be Rs.
400,01,00,000/-. Therefore, there is already claim for damages
but what plaintiffs are seeking today is only enhancing the
claim, of course subject to provisions of Section 73 of the
E Contract Act.
6. Ms. Paranjape submitted that after 30 years, this application
is filed for enhancement and therefore, ex- facie the increased
amount is barred by limitation. Ms. Paranjape submitted that
though the settled position in law is that courts are generally
F liberal with pre-trial amendment, when ex-facie claim appears
to be barred by limitation, the court should not permit the
amendment.
7. What one should keep in mind is this figure of Rs.
400,01,00,000/- can tomorrow go up or go down.
G
Plaintiffs are only estimating it to be the amount which
according to plaintiffs, is the loss which they would suffer.
Whether that is the right estimate can be decided only at the
time of trial. Even in para 12 of the plaint plaintiff has stated
“…….suffered loss and damages which they estimate
H at……….” In prayer clause-(b)(v) plaintiff pray “ or such
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1143
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
other sum as this Honourable Court may deem just and A
proper……” Further, if this figure of Rs. 1,01,00,000/- is not
amended as prayed in this Notice of Motion, defendant will
object the attempt of plaintiff to claim more as damages saying
plaintiff cannot go beyond what is averred in the plaint. Due
to situation beyond the control of plaintiff, this suit has
B
remained pending for almost 32 years. Chances of suffering
greater prejudice is more if the amendment is not allowed. It
is clarified that plaintiff will still have to prove every penny it
is claiming as damages.
xxx xxx xxx C
10. Admittedly, the trial is yet to begun though issues have
been framed long ago.
11. In the circumstances, keeping open rights and contentions
of defendants to raise the issue of limitation which the court
will decide at the time of trial, Chamber summons allowed in D
terms of prayer clause-(a) and accordingly disposed.”
36. While affirming the aforesaid order, the High Court in Appeal
(L) No. 499 of 2018 held as under:
“4. Undisputedly, trial is yet to commence. The amendment E
has been allowed by the learned Single Judge by giving cogent
and sound reasons. Merely because the Plaintiffs are permitted
to amend the plaint does not mean that the claim which has
been made by the Plaintiffs by way of amendment would be
granted by the Court. Defendants can always file an
F
additional Written Statement to contest the claim of the
Plaintiffs. In such additional Written statement, Appellants
can also raise a ground with regard to limitation which will
have to be gone into by the learned Single Judge. In any
case, in the present case, Appellants have also filed additional
Written Statement so as to meet the grounds brought on record G
by way of amendment.
5. In that view of the matter, we do not find that this is a fit
case to interfere with the discretion exercised by the learned
Single Judge. Appeal is therefore rejected.”
H
1144 SUPREME COURT REPORTS [2022] 8 S.C.R.
A LIFE INSURANCE CORPORATION OF INDIA (SUPRA)
37. We now proceed to give a fair idea, as regards the judgment
rendered by a coordinate Bench of this Court in the case of Life
Insurance Corporation of India (supra) dated 24.10.2017.
B 38. The said appeal before this Court arose out of the judgment of
the High Court of Bombay dated 22.08.2014 in and by which the Division
Bench dismissed the appeal filed by the appellant herein Life Insurance
Corporation of India (for short, ‘LIC’) thereby affirming the order of the
Single Judge in the Chamber Summons No. 187 of 2014 by which the
respondent No. 3 therein was impleaded as the plaintiff No. 3 in the Suit
C No. 894 of 1986.
39. It appears from the pleadings, more particularly, the facts
recorded in the judgment rendered by the coordinate Bench that in the
year 2014, the respondent No. 3 therein, namely, the Kedia Construction
Company Ltd. filed the Chamber Summons No. 187 of 2014 stating that
D subsequent to the filing of the suit for the specific performance of contract,
with the consent of the respondent No. 2, plaintiff No. 1/respondent No.
1 had assigned its interest to the respondent No. 3 for a consideration of
Rs. 23,31,000/- by an agreement for sale dated 24.08.1987. The chamber
summons was filed to implead the respondent No. 3 therein as the plaintiff
E No. 3 with a prayer to amend the plaint pursuant to the agreement of
sale in its favour. The appellant herein (LIC) had opposed the chamber
summons on the ground that the respondent No. 3 therein was not a
bona fide assignee or a necessary party and that the issues in the suit
were framed on 31.01.2014 and there had been an inordinate delay on
27 years in filing the application which had not been properly explained.
F
40. In the aforesaid set of facts, this Court while allowing the
appeal filed by the appellant herein (LIC) held as under:
“11. The stand of Respondent 3 is that it claims as an assignee
of the rights of Respondents 1 and 2 and that it has the right
G to continue the suit under Order 22 Rule 10 CPC and the
provisions of limitation, do not apply to such an application.
To appreciate merits of this contention, we may usefully refer
to Order 22 Rule 10 CPC, which reads as under:
Order 22 — Death, Marriage and Insolvency of Parties
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1145
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
“10. Procedure in case of assignment before final order A
in suit.—(1) In other cases of an assignment, creation or
devolution of any interest during the pendency of a suit,
the suit may, by leave of the court, be continued by or
against the person to or upon whom such interest has come
or devolved.
B
(2) The attachment of a decree pending an appeal therefrom
shall be deemed to be an interest entitling the person who
procured such attachment to the benefit of sub-rule (1).”
Under Order 22 Rule 10 CPC, when there has been an
assignment or devolution of interest during the pendency of C
a suit, the suit may, by leave of the court, be continued by or
against person to or upon whom such interest has been
assigned or devolved and this entitles the person who has
acquired an interest in the subject-matter of the litigation by
an assignment or creation or devolution of interest pendente
lite or suitor or any other person interested, to apply to the D
court for leave to continue the suit. When the plaintiff assigns/
transfers the suit during the pendency of the suit, the assignee
is entitled to be brought on record and continue the suit. Order
22 Rule 10 CPC enables only continuance of the suit by the
leave of the court. It is the duty of the court to decide whether E
leave was to be granted or not to the person or to the assignee
to continue the suit. The discretion to implead or not to implead
parties who apply to continue the suit must be exercised
judiciously and not arbitrarily.
12. The High Court was not right in holding that mere alleged F
transfer/assignment of the agreement would be sufficient to
grant leave to Respondent 3 to continue the suit. From the
filing of the suit in 1986, over the years, valuable right of
defence accrued to the appellant; such valuable right of
defence cannot be defeated by granting leave to the third
respondent to continue the suit in the application filed under G
Order 22 Rule 10 CPC after 27 years of filing of the suit. The
learned Single Judge was not right in saying that impleading
Respondent 3 as Plaintiff 3 would cause no prejudice to the
appellant and that the issues can be raised at the time of
trial. H
1146 SUPREME COURT REPORTS [2022] 8 S.C.R.
A 13. In a suit for specific performance, application for
impleadment must be filed within a reasonable time.
Considering the question of impleadment of party in a suit
for specific performance after referring to various judgments,
in Vidur Impex and Traders (P) Ltd. v. Tosh Apartments (P)
Ltd. [Vidur Impex and Traders (P) Ltd. v. Tosh Apartments (P)
B
Ltd., (2012) 8 SCC 384 : (2012) 4 SCC (Civ) 1] the Court
summarised the principles as under : (SCC p. 413, para 41)
“41. Though there is apparent conflict in the observations
made in some of the aforementioned judgments, the broad
principles which should govern disposal of an application
C for impleadment are:
41.1. The court can, at any stage of the proceedings, either
on an application made by the parties or otherwise, direct
impleadment of any person as party, who ought to have
been joined as plaintiff or defendant or whose presence
D before the court is necessary for effective and complete
adjudication of the issues involved in the suit.
41.2. A necessary party is the person who ought to be
joined as party to the suit and in whose absence an effective
decree cannot be passed by the court.
E
41.3. A proper party is a person whose presence would
enable the court to completely, effectively and properly
adjudicate upon all matters and issues, though he may not
be a person in favour of or against whom a decree is to be
made.
F
41.4. If a person is not found to be a proper or necessary
party, the court does not have the jurisdiction to order his
impleadment against the wishes of the plaintiff.
41.5. In a suit for specific performance, the court can order
impleadment of a purchaser whose conduct is above board,
G
and who files application for being joined as party within
reasonable time of his acquiring knowledge about the
pending litigation.
41.6. However, if the applicant is guilty of contumacious
conduct or is beneficiary of a clandestine transaction or
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1147
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
a transaction made by the owner of the suit property in A
violation of the restraint order passed by the court or the
application is unduly delayed then the court will be fully
justified in declining the prayer for impleadment.”
In light of the above principles, considering the case in hand,
in our view, the application filed for impleading Respondent B
3 as Plaintiff 3 was not filed within reasonable time. No
explanation is offered for such an inordinate delay of 27
years, which was not kept in view by the High Court.
14. Be it noted that an application under Order 22 Rule 10
CPC seeking leave of the court to continue the suit by the C
assignee/third respondent was not actually filed. Chamber
Summons No. 187 of 2014 was straightaway filed praying to
amend the suit which would have been the consequential
amendment, had the leave to continue the suit been granted
by the court.
D
15. As pointed out earlier, the application was filed after 27
years of filing of the suit. Of course, the power to allow the
amendment of suit is wide and the court should not adopt
hypertechnical approach. In considering amendment
applications, court should adopt liberal approach and
amendments are to be allowed to avoid multiplicity of E
litigations. We are conscious that mere delay is not a ground
for rejecting the amendment. But in the case in hand, the
parties are not rustic litigants; all the respondents are
companies and the dispute between the parties is a commercial
litigation. In such facts and circumstances, the amendment
F
prayed in the chamber summons filed under Order 22 Rule
10 CPC ought not to have been allowed, as the same would
cause serious prejudice to the appellant. In our view, the
impugned order, allowing Chamber Summons No. 187 of 2014
filed after 27 years of the suit would take away the substantial
rights of defence accrued to the appellant and the same G
cannot be sustained.
16. In the result, the impugned judgment [LIC v. Sanjeev
Builders (P) Ltd., 2014 SCC OnLine Bom 4811] is set aside
and the appeal is allowed. Chamber Summons No. 187 of 2014
in Suit No. 894 of 1986 stands dismissed. No order as to costs.” H
1148 SUPREME COURT REPORTS [2022] 8 S.C.R.
A 41. Thus, from the aforesaid, it is evident that a coordinate Bench
of this Court took the view that impleading the respondent No. 3 therein
as the plaintiff No. 3 would cause a serious prejudice to the appellant.
This Court took the view that no explanation was offered for an inordinate
delay of twenty-seven years, which was overlooked by the High Court.
Even while allowing the appeal filed by the appellant herein, the coordinate
B
Bench of this Court observed that mere delay would not be a ground for
rejecting the amendment. However, in the facts of the case, since the
parties not being rustic litigants and all the respondents therein being
companies and the dispute being a commercial litigation, the amendment
could not have been permitted after twenty-seven years of the suit, as it
C would take away the substantial rights of defence accrued in favour of
the appellant (LIC).
42. We are of the view that the judgment and order passed by the
coordinate Bench of this Court in the Life Insurance Corporation of
India (supra) has no application so far as the present appeal is concerned.
D The appellant herein cannot succeed in the present appeal merely on the
strength of the judgment and order passed by this Court in the Life
Insurance Corporation of India (supra).
ORDER II RULE 2 OF THE CPC
43. In the present appeal, the principal argument of the learned
E
counsel appearing for the appellant is that the amendment application
should have been rejected by the courts below applying the principle of
Order II Rule 2 of the CPC.
44. The said provision is set out below:
F “Order II Rule 2 of the Code of Civil Procedure:
2. Suit to include the whole claim.-(1) Every suit shall include
the whole of the claim which the plaintiff is entitled to make
in respect of the cause of action; but a plaintiff may relinquish
any portion of his claim in order to bring the suit within the
G jurisdiction of any Court.
(2) Relinquishment of part of claim.-Where a plaintiff omits
to sue in respect of, or intentionally relinquishes, any portion
of his claim, he shall not afterwards sue in respect of the
portion so omitted or relinquished.
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1149
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
(3) Omission to sue for one of several reliefs.-A person entitled A
to more than one relief in respect of the same cause of action
may sue for all or any of such reliefs; but if he omits, except
with the leave of the Court, to sue for all such reliefs, he shall
not afterwards sue for any relief so omitted.
Explanation.-For the purposes of this rule an obligation and B
a collateral security for its performance and successive claims
arising under the same obligation shall be deemed respectively
to constitute but one cause of action.
Illustration
A lets a house to B at a yearly rent of Rs. 1200. The rent for C
the whole of the years 1905, 1906 and 1907 is due and
unpaid. A sues B in 1908 only for the rent due for 1906. A
shall not afterwards sue B for the rent due for 1905 or 1907.”
45. The expressions “omits to sue” and “intentionally relinquish
any portion of his claim” give an indication as to the intention of the D
legislature in framing the said rule. The term ‘sue’ can mean both the
filing of the suit and prosecuting the suit to its culmination, depending on
the context of the provision. In the present case, the legislature thought
it fit to debar a plaintiff from suing afterwards for any relief which he/
she has omitted without the leave of the court or from suing in respect of E
any portion of his claim which he intentionally relinquishes. Order II
Rule 2(1) provides that every suit shall include the whole of the claim
which the plaintiff is entitled to make in respect of the cause of action.
46. The provision of Order II Rule 2 of the CPC has been well
discussed by the Privy Council in the case of Mohd. Khalil Khan & F
Ors. v. Mahbub Ali Mian & Ors., AIR 1949 PC 78, held as under:
“The principles laid down in the cases thus far discussed
may be thus summarized :
(1.) the correct test in cases falling under Or. 2, r. 2, is “whether
the claim in the new suit is, in fact, founded on a cause of G
action distinct from that which was the foundation for the
former suit.” (Moonshee Buzloor Ruheem v. Shumsoonnissa
Begum.) (2.) The cause of action means every fact which will
be necessary for the plaintiff to prove, if traversed, in order
to support his right to the judgment. (Read v. Brown.) (3.) If
H
1150 SUPREME COURT REPORTS [2022] 8 S.C.R.
A the evidence to support the two claims is different, then the
causes of action are also different. (Brunsden v. Humphrey.)
(4.) The causes of action in the two suits may be considered
to be the same if in substance they are identical. (Brunsden v.
Humphrey.) (5.) The cause of action has no relation whatever
to the defence that may be set up by the defendant, nor does
B
it depend on the character of the relief prayed for by the
plaintiff. It refers “to the media upon which the plaintiff asks
the Court to arrive at a conclusion in his favour.” (Muss.
Chand Kour v. Partab Singh.) This observation was made by
Lord Watson in a case under s. 43 of the Act of 1882
C (corresponding to Or. 2, r. 2), where plaintiff made various
claims in the same suit.”
47. In Upendra Narain Roy v. Rai Janoki Nath Roy, AIR 1919
Cal 904, a Division Bench of the Calcutta High Court had an occasion to
consider this question. Woodroffe, J. has observed:
D “.....As regards the other point it has more ingenuity than
substance. It proceeds on the erroneous assumption that the
amendment was prohibited by Or. II, r. 2. This Rule does not
touch the matter before us. It refers to a case where there has
been a suit in which there has been an omission, to sue in
E respect of portion of a claim, and a decree has been made in
that suit. In that case a second suit in respect of the portion
so omitted is barred. That is not the case here. In the present
case the suit has not been heard but a claim has been omitted
by, it is said, inadvertence. To hold that in such case an
amendment should not be allowed would be to hold something
F which the Rule does not say and which would be absurd. The
Rule says “he shall not afterwards sue,” that is, it assumes
that there has been a suit carried to a decision, and a sub-
sequent suit. It does not apply to amendment where there has
been only one suit. As the Plaintiff had in law a right to apply
G for an amendment before the conclusion of his suit, it cannot
be said that any rights of the Respondent in the Pabna suit
are affected. Such a contention is based on the erroneous
assumption that nothing could be done by way of amendment
of the Calcutta suit to remove the objection that the claims on
the previous mortgage or charge were not sustainable. A case
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1151
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
would fall within Or. II, r. 2, only if a Plaintiff fails to apply A
for amendment before decree, and then brings another suit.
The Plaintiffs are not doing that but asking for amendment in
the one and only suit they have brought. This is, therefore,
not a case in which the amendment either affects rights to the
other party, or otherwise prejudices him.”
B
(emphasis supplied)
48. A Constitution Bench of this Court, considering the scope and
applicability of Order II Rule 2 of the CPC, in the case of Gurbux
Singh v. Bhooralal, AIR 1964 SC 1810, held as under:
“6. In order that a plea of a Bar under Order 2 Rule 2(3) of C
the Civil Procedure Code should succeed the defendant who
raises the plea must make out; (i) that the second suit was in
respect of the same cause of action as that on which the
previous suit was based; (2) that in respect of that cause of
action the plaintiff was entitled to more than one relief; (3) D
that being thus entitled to more than one relief the plaintiff,
without leave obtained from the Court omitted to sue for the
relief for which the second suit had been filed. From this
analysis it would be seen that the defendant would have to
establish primarily and to start with, the precise cause of action
upon which the previous suit was filed, for unless there is E
identity between the cause of action on which the earlier suit
was filed and that on which the claim in the latter suit is based
there would be no scope for the application of the bar. No
doubt, a relief which is sought in a plaint could ordinarily be
traceable to a particular cause of action but this might, by no F
means, be the universal rule. As the plea is a technical bar it
has to be established satisfactorily and cannot be presumed
merely on basis of inferential reasoning. It is for this reason
that we consider that a plea of a bar under Order 2 Rule 2 of
the Civil Procedure Code can be established only if the
defendant files in evidence the pleadings in the previous suit G
and thereby proves to the Court the identity of the cause of
action in the two suits. It is common ground that the pleadings
in CS 28 of 1950 were not filed by the appellant in the present
suit as evidence in support of his plea under Order 2 Rule 2
of the Civil Procedure Code. The learned trial Judge, however, H
1152 SUPREME COURT REPORTS [2022] 8 S.C.R.
A without these pleadings being on the record inferred what
the cause of action should have been from the reference to
the previous suit contained in the plaint as a matter of
deduction. At the stage of the appeal the learned District Judge
noticed this lacuna in the appellant’s case and pointed out,
in our opinion, rightly that without the plaint in the previous
B
suit being on the record, a plea of a bar under Order 2 Rule
2 of the Civil Procedure Code was not maintainable.”
49. So far as, Gurbux Singh (supra) is concerned, we may clarify
that the entire consideration in the said case by this Court was to the
fact that there was a relinquishment of a claim by the plaintiff therein,
C
but the relevant point which was considered by this Court was that the
relief had become time barred. The ratio of the said judgment is that the
relief being barred by limitation, the Order II Rule 2 of the CPC only
came in as an adjunct. However, Gurbux Singh (supra) makes it clear
that the bar of Order II Rule 2 of the CPC applies only to the subsequent
D suits.
50. In the light of the principles discussed and the law laid down
by the Constitution Bench as also the other decisions discussed above,
we are of the view that if the two suits and the relief claimed therein are
based on the same cause of action then the subsequent suit will become
E barred under Order II Rule 2 of the CPC. However, we do not find any
merit in the contention raised on behalf of the appellant herein that the
amendment application is liable to be rejected by applying the bar under
Order II Rule 2 of the CPC. Order II Rule 2 of the CPC cannot apply to
an amendment which is sought on an existing suit.
F 51. In the aforesaid context, we may refer to with approval a
decision rendered by the High Court of Delhi in the case of Vaish
Cooperative Adarsh Bank Ltd. v. Geetanjali Despande & Ors., (2003)
102 DLT 570. Paras 17 and 18 resply indicate that the bar under Order
II Rule 2 of the CPC is only for a subsequent suit. These paras read as
under:
G
“17. Reverting to the preliminary objections raised by the
appellant against the maintainability of the application for
amendment, one would come across with a peculiar plea of
proposed amendment being barred under Order II Rule 2 CPC.
General rule enacted under Order II Rule 2.(1) CPC is that
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1153
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
every suit must include the whole of the claim which the A
plaintiff is entitled to make in respect of the cause of action.
Order II Rule 2.(2) precludes a subsequent suit on any part
of claim, which had been omitted or intentionally relinquished
by the plaintiff in an earlier suit based on the same cause of
action. Similarly, where the plaintiff is entitled to more than
B
one relief in respect of the same cause of action but omits,
except with the leave of the court, to sue for all such reliefs,
he is debarred in view of the Order II Rule 2(3) CPC from
suing afterwards for any relief so omitted.
18. A plea of bar under Order II Rule 2 CPC is maintainable
only if the defendant makes out (i) that the cause of action of C
the second suit is the same on which the previous suit was
based, (ii) that in respect of that cause of action, the plaintiff
was entitled to more than one relief and (iii) that the plaintiff
without leave obtained from the Court omitted to sue earlier
for the relief for which the second suit is filed.(see “Gurbux D
Singh v. Bhooralal”, AIR 1964 SC 1810). Clearly, Order II
Rule 2 CPC enacts a rule barring a second suit in the situation
indicated above. Identity of cause of action in the former
and subsequent suits is essential before the bar contemplated
under Order II Rule 2 CPC is set to operate. Thus, where the
claim or reliefs in the second suit are based on a distinct cause E
of action, Order II Rule 2 CPC would have no application.
Order II Rule 2 CPC operates as a bar against a subsequent
suit if the requisite conditions for application thereof are
satisfied and the field of amendment of pleadings falls far
beyond its purview. The plea of amendment being barred F
under Order II Rule 2 CPC is, thus, misconceived and hence
negatived. “
(emphasis supplied)
52. We are also not impressed by the contention raised on behalf
of the appellant herein that the amendment application is hit by the G
principle of constructive res judicata. The principle of constructive res
judicata has no application in the instant case, since there was no formal
adjudication between the parties after full hearing. The litigation before
this Court has come up at the stage when the courts below allowed the
amendment of plaint for the purpose of enhancing the amount towards H
1154 SUPREME COURT REPORTS [2022] 8 S.C.R.
A damages in the alternative to the main relief of specific performance of
the contract.
SPECIFIC RELIEF ACT, 1963
53. The above takes us now to consider the proviso to Section
21(5) and Section 22(2) of the Act 1963.
B
54. The Act 1963 contemplates that in addition to or in substitution
of a claim for performance, a plaintiff is entitled to claim compensation.
Section 21 of the Act 1963 provides as follows:
“21. Power to award compensation in certain cases.–(1)
C In a suit for specific performance of a contract, the plaintiff
may also claim compensation for its breach [in addition to]
such performance.
(2) If, in any such suit, the court decides that specific
performance ought not to be granted, but that there is a
D 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
E performance ought to be granted, but that 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
F 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
G plaint:
Provided that where the plaintiff has not claimed any such
compensation in the plaint, the court shall, at any stage of
the proceeding, allow him to amend the plaint on such terms
as may be just, for including a claim for such compensation.
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1155
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
Explanation.-The circumstances that the contract has A
become incapable of specific performance does not preclude
the court from exercising the jurisdiction conferred by this
section.”
55. Under sub-section (2) of Section 21, the court is empowered
to award compensation for breach where it holds that there is a contract B
between the parties which was broken by the defendant but in the event,
it decides that specific performance ought not to be granted. Sub-section
(3) of Section 21 empowers the court to grant compensation for breach
in addition to a decree for specific performance where it is of the view
that specific performance alone would not satisfy the justice of the case.
Sub-section (5), however, stipulates that compensation cannot be awarded C
under the section unless the Plaintiff has claimed such compensation in
the plaint. This provision is mandatory.
56. The proviso to sub-section (5) of Section 21 dilutes the rigours
of the main provision by allowing the plaintiff who has not claimed such
compensation in the plaint to amend the plaint at any stage of the D
proceedings and the court, it has been provided, shall at any stage of the
proceedings allow an amendment for including a claim for such
compensation on such terms as may be just. In Shamsu Suhara Beevi
v. G. Alex & Anr., (2004) 8 SCC 569, for instance, this Court held that
the High Court erred in granting compensation under Section 21, in addition E
to the relief of specific performance in the absence of a prayer made to
that effect either in the plaint as originally filed or as amended at any
stage of the proceedings.
57. Section 22 of the Act 1963 contains the following provisions:
“22. Power to grant relief for possession, partition, refund of F
earnest money, etc.-(1) Notwithstanding anything to the
contrary contained in the Code of Civil Procedure, 1908, (5
of 1908), any person suing for the specific performance of a
contract for the transfer of immovable property may, in an
appropriate case, ask for- G
(a) possession, or partition and separate possession,
of the property, in addition to such performance;
or
(b) any other relief to which he may be entitled,
including the refund of any earnest money or H
1156 SUPREME COURT REPORTS [2022] 8 S.C.R.
A deposit paid or (made by) him, in case his claim
for specific performance is refused.
(2) No relief under clause (a) or clause (b) of sub-section
(1) shall be granted by the Court unless it has been specifically
claimed:
B Provided that where the plaintiff has not claimed any such
relief in the plaint, the Court shall, at any stage of the
proceeding, allow him to amend the plaint on such terms as
may be just for including a claim for such relief.
(3) The power of the Court to grant relief under clause (b)
C of sub-section (1) shall be without prejudice to its powers to
award compensation under section 21.”
58. Section 22 has a non-obstante provision which overrides the
CPC. A plaintiff who claims specific performance of a contract for the
transfer of immovable property, may in an appropriate case ask for
D possession, partition and separate possession of the property, in addition
to specific performance. The plaintiff may also claim any other relief
including the refund of earnest money or deposit paid, in case the claim
for specific performance is refused. Corresponding to the provisions of
sub-section (5) of Section 21, sub-section (2) of Section 22 stipulates
E that such relief cannot be granted by the court unless it has been
specifically claimed. However, the proviso requires that the court shall
at any stage of the proceedings allow the plaintiff to amend the plaint to
claim such relief where it has not been originally claimed on such terms
which may appear just.
F THE SPECIFIC RELIEF (AMENDMENT) ACT, 2018
59. The Act 1963 was amended in the year 2018 and in Section
21 of the Principal Act, in sub-section (1) the words “either in addition
to, or in substitution of” were deleted and the words “in addition to”
were substituted in their place. As a result, damages are now available
only in addition to specific performance and not in lieu thereof. This is a
G
consequence of other amendments to the Act 1963 whereby the amending
act has eliminated the discretion of courts by substituting Sections 10
and 20 resply of the Principal Act.
60. The aforesaid provisions of the Act 1963 were duly considered
by the Bombay High Court in the case of Kahini Developers Pvt. Ltd.
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1157
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
v. Mukesh Morarjipanchamatia & Ors., reported in (2013) 3 Mah LJ A
440, Dr. Justice D.Y. Chandrachud, (as His Lordship then was), speaking
for the Bench, very lucidly and in the most erudite manner explained as
under:
“9. The object of the legislature in introducing the proviso to
sub-section (5) of section 21 and to sub-section (2) of section B
22 was to obviate a multiplicity of the proceedings. In Babu
Lal v. Hazari Lal, (1982) 1 SCC 525: AIR 1982 SC 818 the
Supreme Court noted that the legislature “has given ample
power to the Court to allow amendment of the plaint at any
stage.” (At para 20 page 825). This, the Supreme Court held,
would include even the stage of execution. The Supreme Court C
also held that a mere contract for sale or for that matter, a
decree for specific performance does not confer title on the
buyer and that title would pass only upon execution of the
decree. While discussing the issue of limitation, the Supreme
Court held as follows: D
“If once we accept the legal position that neither a contract
for sale nor a decree passed on that basis for specific
performance of the contract gives any right or title to the
decree-holder and the right and the title passes to him only
on the execution of the deed of sale either by the judgment- E
debtor himself or by the Court itself in case he fails to
execute the sale deed, it is idle to contend that a valuable
right had accrued to the Petitioner merely because a decree
has been passed for the specific performance of the
contract. The limitation would start against the decree-
holders only after they had obtained a sale in respect of F
the disputed property. It is, therefore, difficult to accept
that a valuable right had accrued to the judgment-debtor
by lapse of time. Section 22 has been enacted only for the
purpose of avoiding multiplicity of proceedings which the
law Courts always abhor.” (At para 21 page 825) G
10. The same view was taken by the Supreme Court in a later
judgment in Jagdish Singh v. Natthu Singh, (1992) 1 SCC
647 : AIR 1992 SC 1604:
“So far as the proviso to sub-section (5) is concerned, two
positions must be kept clearly distinguished. If the H
1158 SUPREME COURT REPORTS [2022] 8 S.C.R.
A amendment relates to the relief of compensation in lieu of
or in addition to specific performance where the plaintiff
has not abandoned his relief of specific performance the
Court will allow the amendment at any stage of the
proceeding. That is a claim for compensation falling under
section 21 of the Specific Relief Act, 1963 and the
B
amendment is one under the proviso to sub-section (5).
But different and less liberal standards apply if what is
sought by the amendment is the conversion of a suit for
specific performance into one for damages for breach of
contract in which case section 73 of the Contract Act is
C invoked. This amendment is under the discipline of R.17,
0.6, C.P.C. The fact that sub-section (4) in turn, invokes
section 73 of the Contract Act for the principles of
quantification and assessment of compensation does not
obliterate this distinction.” (At para 10 page 1608)
D In the decision in Shamsu Suhara Beevi (supra), while holding
that the High Court had erred in granting compensation under
section 21, in addition to the relief of the specific performance
in the absence of a prayer to that effect, the Supreme Court
held that a prayer could have been made to that effect either
in the plaint or by amending the plaint at any later stage of
E the proceeding to include the relief of compensation in
addition to the relief of a specific performance. The plaint,
however, in that case, was never amended and the order of
the High Court was, therefore, held to be in error. These
principles have also been noticed in a judgment of a learned
F Single Judge of this Court in Manohar Dhundiraj Joshi v.
Jhunnulal Hariram Yadao, 1983 Mh.L.J. 369.
11. Since the Court is informed that an appeal has been filed
against the judgment of the learned Single Judge in
Harinarayan G. Bajaj (supra), we are not expressing any
G opinion on the correctness of that decision. We are, however,
of the view that since the legislature has contemplated that
an amendment within the meaning of the provisos to section
21(5) and section 22(2) of the Specific Relief Act, 1963 can
be made at any stage of the proceeding, such an amendment
would not be barred by limitation. Even as a matter of first
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1159
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
principle, an application for amendment must be distinguished A
from the cause of action which is sought to be set up by the
amendment. As a matter of general principle, though an
application for amendment is allowed, the question as to
whether the cause of action is within limitation would have to
be determined and adjudicated upon. While allowing an
B
amendment, it is always open to a Civil Court to direct that
the amendment shall not relate back to the institution of the
proceeding. The Court would therefore have to determine at
trial whether the cause of action is within limitation or is
barred. Where the legislature has contemplated that the plaint
can be amended at any stage of the proceeding as stipulated C
in the provisos to section 21(5) and section 21(2). Such an
amendment of the nature contemplated by those provisions
can indeed be brought about at any stage of the proceedings.”
(emphasis supplied)
61. In the case of B.K. Narayana Pillai v. Parameswaran Pillai D
& Anr., (2000) 1 SCC 712 relying upon the cases of A.K. Gupta (supra)
and Ganesh Trading Co. (supra), this Court held that the court should
adopt a liberal approach in the matter of amendment and only when the
other side had acquired any legal right due to lapse of time, the amendment
should be declined. It has been held as follows:
E
“…..All amendments of the pleadings should be allowed which
are necessary for determination of the real controversies in
the suit provided the proposed amendment does not alter or
substitute a new cause of action on the basis of which the
original lis was raised or defence taken. Inconsistent and
contradictory allegations in negation to the admitted position F
of facts or mutually destructive allegations of facts should
not be allowed to be incorporated by means of amendment to
the pleadings. Proposed amendment should not cause such
prejudice to the other side which cannot be compensated by
costs. No amendment should be allowed which amounts to or
results in defeating a legal right accruing to the opposite party G
on account of lapse of time. The delay in filing the petition
for amendment of the pleadings should be properly
compensated by costs and error or mistake which, if not
fraudulent, should not be made a ground for rejecting the
application for amendment of plaint or written statement.” H
1160 SUPREME COURT REPORTS [2022] 8 S.C.R.
A 62. In Jagdish Singh v. Natthu Singh, reported in (1992) 1 SCC
647 : AIR 1992 SC 1604, this Court had the occasion to deal with the
provisions of Section 21 of the Act 1963. While analysing the aforesaid
provisions, this Court laid down that if the amendment relates to the
relief of compensation in lieu of or in addition to specific performance
where the plaintiff has not abandoned his relief of specific performance
B
the court should allow the amendment at any stage of the proceedings
since that is a claim for compensation falling under Section 21 of the Act
1963 and the amendment is one under the proviso to sub-section (5) of
Section 21. This Court, however, issued a note of caution by laying down
that different and less liberal standards would apply if what is sought by
C the amendment is conversion of a suit for specific performance into one
for damages for breach of contract, in which case Section 73 of the
Indian Contract Act, 1872 would get invoked, and then the said
amendment would be under the discipline of Order VI Rule 17 of the
CPC. This Court further held that when the plaintiff by his option had
made specific performance impossible then Section 21 does not entitle
D
him to seek damages. It is also held that in Indian Law when the contract,
for no fault of the plaintiff, becomes impossible of performance Section
21 enables award of compensation in lieu and substitution of specific
performance.
63. The legal position, therefore, in respect of scope and ambit of
E Section 21 of the Act 1963 is clear and made so more by the ratio of the
aforesaid decision of this Court.
64. The plaintiffs in the original plaint claimed for compensation in
addition to a decree for specific performance of the agreement to sell.
Therefore, strictly speaking the provisions of Section 21 of the Act 1963
F are not attracted to the facts of the present case. The intention of the
plaintiffs in seeking for amendment of the plaint appears to be to get an
enhanced amount of compensation than what was originally claimed in
the original plaint which was restricted only to Rs. 1,01,00,000/-. The
aforesaid intention becomes apparent when the averments made in the
G application praying for amendment are looked into inasmuch as, the
plaintiffs have stated that in view of the fact that in last 30 years there
had been a tremendous escalation of the value of the suit property which
has an adverse effect on the quantum of damages, compensation, relief
sought for the breach of contract by the appellant/defendant. According
to the plaintiffs the raising of the amount of compensation to Rs.
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1161
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
400,01,00,000/- from Rs. 1,01,00,000/- as claimed in the original plaint A
has been necessitated in view of undue delay in the prosecution of the
suit which was not earlier foreseen, which in turn has caused more
damage to the plaintiffs through the years and therefore, they have sought
to raise the amount of compensation to the present value as stated above
from Rs. 1,01,00,000/-.
B
65. However, the argument of the learned counsel appearing for
the appellant in regard to the two provisos referred to above, is quite
curious. The argument is that the power of the court to permit the plaintiff
to amend the plaint in a suit filed for the specific performance of contract
flows from Sections 21 and 22 resply of the Act, 1963 & the proviso to
C
the sub-section (5) of Section 21 of the Act 1963 may entitle the plaintiff
to amend the plaint, provided the plaintiff has inadvertently or otherwise
omitted to pray for compensation. The argument proceeds on the footing
that in the present case, as the plaintiff specifically prayed for
compensation in the plaint, later if he seeks to amend that part of the
relief, the sub-section (5) of Section 21 of the Act 1963 would be an D
embargo for the court to do so. We do not find any merit in this argument
of the learned counsel appearing for the appellant.
66. The two provisos referred to above, deal with the question of
permitting the plaintiff to amend his plaint. It is not, as if, in the absence
of these two provisos, it is not permissible in law for the plaintiff to carry E
out an amendment in his pleading by introducing a relief for enhanced
compensation. Rule 17 of Order VI of the CPC does confer power on a
Court to allow a party to alter or amend his pleading in such manner and
on such terms as may be just. This rule does not stop at that, but it
further says that all such amendments should be made as may be
F
necessary for the purpose of determining the real question in controversy
between the parties. It is pertinent to note that this provision which
empowers the court in its discretion to permit a party to amend his
pleadings, was already on the statute book, when the Specific Relief
Act, 1963 was enacted. It can, therefore, be presumed that when the
latter legislation was on the anvil, the Parliament was aware of this G
power of the court to permit amendment of pleadings. Therefore, it cannot
be successfully urged that a suit for specific performance falling under
the provisions of the Act, 1963 would not be governed by the provisions
of the CPC. It is, therefore, clear that to such a suit the provisions
contained in Order VI Rule 17 of the CPC would apply and a plaintiff
H
1162 SUPREME COURT REPORTS [2022] 8 S.C.R.
A who has earlier failed to incorporate the reliefs for compensation or who
has incorporated the reliefs for compensation but seeks amendment in
the same, could seek the permission of the court to introduce these reliefs
by way of amendment.
67. It is important to note that sub-section (5) of Section 21 of the
B Act 1963 was originally introduced to resolve the confusion over whether
the court had the power to grant compensation in a claim for specific
performance in absence of any pleading to that effect under the provisions
of the Act 1963. Prior to the enactment of the Act 1963 the Law
Commission in its 9th Law Commission Report while referring to the
diverse opinions expressed by the High Courts recommended that in no
C
case should compensation be decreed unless it is claimed by a proper
pleading.
68. In The Arya Pradeshak Pritinidhi Sabha, Sindh, Punjab
& Bilochistan v. Lahori Mal & Ors., (1924) 6 Lah LJ 286 : AIR 1924
Lah 713, the Lahore High Court had held that the court has the power to
D
award damages in substitution of or in addition to specific performance
even though the plaintiff has not specifically claimed the same in its
plaint and written submissions. As against, the Madras High Court in
Somasundaram Chettiar v. Chidambaram Chettiar, AIR 1951 Mad
282 held that the court could not award damages in absence of a specific
E claim for damages.
69. In Somasundaram Chettiar (supra), the Madras High Court
held that the rationale for not allowing a claim for damages in a suit for
specific performance without a specific pleading is based on the principle
that the plaintiff must establish its claim for damages and the defendant
F must be put on notice and correspondingly have an opportunity to adduce
evidence that the damages claimed are excessive or that the plaintiff
has not suffered any damages.
70. Our final conclusions may be summed up thus:
(i) Order II Rule 2 CPC operates as a bar against a subsequent
G suit if the requisite conditions for application thereof are
satisfied and the field of amendment of pleadings falls far
beyond its purview. The plea of amendment being barred
under Order II Rule 2 CPC is, thus, misconceived and hence
negatived.
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1163
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
(ii) All amendments are to be allowed which are necessary for A
determining the real question in controversy provided it does
not cause injustice or prejudice to the other side. This is
mandatory, as is apparent from the use of the word “shall”,
in the latter part of Order VI Rule 17 of the CPC.
(iii) The prayer for amendment is to be allowed B
(i) if the amendment is required for effective and proper
adjudication of the controversy between the parties,
and
(ii) to avoid multiplicity of proceedings, provided C
(a) the amendment does not result in injustice to the other
side,
(b) by the amendment, the parties seeking amendment
does not seek to withdraw any clear admission made
by the party which confers a right on the other side D
and
(c) the amendment does not raise a time barred claim,
resulting in divesting of the other side of a valuable
accrued right (in certain situations).
E
(iv) A prayer for amendment is generally required to be allowed
unless
(i) by the amendment, a time barred claim is sought to
be introduced, in which case the fact that the claim
would be time barred becomes a relevant factor for F
consideration,
(ii) the amendment changes the nature of the suit,
(iii) the prayer for amendment is malafide, or
(iv) by the amendment, the other side loses a valid G
defence.
(v) In dealing with a prayer for amendment of pleadings, the
court should avoid a hypertechnical approach, and is
ordinarily required to be liberal especially where the opposite
party can be compensated by costs. H
1164 SUPREME COURT REPORTS [2022] 8 S.C.R.
A (vi) Where the amendment would enable the court to pin-
pointedly consider the dispute and would aid in rendering a
more satisfactory decision, the prayer for amendment
should be allowed.
(vii) Where the amendment merely sought to introduce an
B additional or a new approach without introducing a time
barred cause of action, the amendment is liable to be allowed
even after expiry of limitation.
(viii) Amendment may be justifiably allowed where it is intended
to rectify the absence of material particulars in the plaint.
C
(ix) Delay in applying for amendment alone is not a ground to
disallow the prayer. Where the aspect of delay is arguable,
the prayer for amendment could be allowed and the issue
of limitation framed separately for decision.
D (x) Where the amendment changes the nature of the suit or
the cause of action, so as to set up an entirely new case,
foreign to the case set up in the plaint, the amendment must
be disallowed. Where, however, the amendment sought is
only with respect to the relief in the plaint, and is predicated
E on facts which are already pleaded in the plaint, ordinarily
the amendment is required to be allowed.
(xi) Where the amendment is sought before commencement of
trial, the court is required to be liberal in its approach. The
court is required to bear in mind the fact that the opposite
F party would have a chance to meet the case set up in
amendment. As such, where the amendment does not result
in irreparable prejudice to the opposite party, or divest the
opposite party of an advantage which it had secured as a
result of an admission by the party seeking amendment, the
G amendment is required to be allowed. Equally, where the
amendment is necessary for the court to effectively
adjudicate on the main issues in controversy between the
parties, the amendment should be allowed. (See Vijay
Gupta v. Gagninder Kr. Gandhi & Ors., 2022 SCC
OnLine Del 1897)
H
LIFE INSURANCE CORPORATION OF INDIA v. SANJEEV 1165
BUILDERS PRIVATE LIMITED & ANR. [J. B. PARDIWALA, J.]
71. In the overall view of the matter, we are convinced that we A
should not disturb the impugned order passed by the Division Bench of
the High Court, affirming the order passed by the learned Single Judge
allowing the amendment application filed at the instance of the plaintiffs.
72. In the result, this appeal fails and is hereby dismissed with no
order as to costs. B
73. Pending application, if any, stands disposed of.
Divya Pandey Appeal dismissed.
(Assisted by : Roopanshi Virang, LCRA)
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E
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