1. This petition under Article 227 of the Constitution of India is preferred by the original defendant of Special Civil Suit No.105 of 1997 passed on 19.1.2009. The respondent herein is the original plaintiff company which filed the suit against the present petitioners for recovery of sum of around Rs.10 crores.
2. An application was moved by the petitioner company for amendment of the plaint. The Court allowed the said application for amendment under Order 6 Rule 17 of the Code of Civil Procedure and, therefore, the respondent has preferred this application under Article 227 of the Constitution of India challenging the alleged ex facie illegal order. Not only the challenge has been made on merit but also on the ground that the contentions raised by the petitioner defendant were not refuted by way of rejoinder- affidavit and no arguments were offered by the respondent plaintiff at any point of time and yet without hearing the advocate for the respondent, only on hearing the petitioner's advocate, application has been allowed.
3. Learned Senior advocate for the petitioner Mr.
M.C.Bhatt has urged that management of the respondent company has been changed thrice and after a gross delay of many years (nearly 10 years) such an application has been moved for changing the cause title. According to the learned advocate amendment sought to be made though is ostensibly innocuous, in fact it amounts to allowing the condonation of delay under the Limitation Act. Heavy reliance is placed on Article 137 of Law of Limitation Act, 1963 and urged that since Code of Civil Procedure does not prescribe any period of limitation, Article 137 will have to be employed, which prescribes the period of limitation of 3 years and the period would start to run from the date on which the right to appeal accrues. Accordingly the petitioner company was first re-constituted in the year 1997, once again in the year 2005 and, therefore, an application was being Exh.21 on 19.1.2009 is ex facie barred by law of limitation as no grounds are made out for condonation of delay of about more than 10 years. Reliance is placed on Order 22 Rule 10 and accordingly the request is made to quash and set aside the order.
4. As against that learned advocate Mr. Chako for the respondent urged this Court that Order 22 Rule 10 would not apply to the instant case. He relied upon provision of Order 7 Rule 10 of the Code of Civil Procedure and Section 394 of the Companies Act. According to him, Order 6 Rule 17 will apply in case where the company would change hands by way of transfer of management. Transferee would get the right to sue the authority by replacing the plaintiff. In the instant case, the Court has rightly allowed the amendment and the petitioner herein has attempted to twist even the details of Rojkam, according to the learned advocate, to suit his purpose. The whole design, as per the say of the learned advocate for the respondent, is to defeat the substantive claim of the respondent which is a huge amount as the very principal amount is more than 10 crores. Affidavits, affidavit-in-reply and rejoinder have been filed. Before adverting to the contentions of the parties, it would be necessary to briefly touch the facts which are summarized as follows:-
4.1 Present petitioner for the recovery of sum of Rs.10,84,32,262/- filed a Special Civil Suit No. 105 of 1997 before Bharuch District Court against the present petitioner. The respondent plaintiff company merged with M/s. Videocon International Limited after the filing of the suit. Thereafter, it further merged to become Videocon Industries Limited. The respondent company thereafter preferred an application under Order 6 Rule 17 of the Code of Civil Procedure vide Exh.21. Thus on account of amalgamation of the plaintiff company i.e. M/s. Videocon Narmada Electronics Limited with M/s. Videocon Industries Limited, as per the order of High Court of Gujarat and High Court of Bombay, need arose to move such an application.
5. The defendant which was known and named as M/s.
Schenck Jenson & Nicholson Limited, registered under the provision of Companies Act and has been changed to M/s. Schenck Process India Limited and, therefore, the amendment was also sought in the name of defendant company having its registered office at Calcutta. The amendment of the following nature has been sought for:-
“4) In a similar fashion previously Defendant was known and name as M/s. SCHENCK JENSON & NICHOLSON LIMITED a Company registered under the provisions of Companies Act 1956 and it was known under such name and style but recently we are in receipt of information that the name of the Defendant M/s. SCHENCK PROCESS INDIA LIMITED and therefore it is required and essential to amend the name of Defendant also. M/s. SCHENCK PROCESS INDIA LIMITED having its registered office at the address shown herein above and hence now the Defendant entity is as under:-
(B) M/s. SCHENCK PROCESS INDIA LIMITED REGISTERED OFFICE AT:
Flat No.8, 3rd Floor, 26/3, Ballygunge Circular Road, Kolkata-- 700 019
6. The trial Court allowed this application under Order 6 Rule 17 of the Civil Procedure Code and directed the plaintiff to amend the plaint within 14 days. The Court noted resistance of the petitioner defendant. However, on the ground that if the same is necessary for determining the real dispute between the parties and if otherwise, the same does not cause injustice to other side the amendment is required to be allowed it so did, following the decision of this Court in the case of Gulabrai Mohanlal Thakor vs. Dolatram Mohanlal Thakor reported in 1999 (2) GLR 1962, wherein liberal approach is directed to be adopted. It further noted that it neither changes the character of the suit nor does, in any manner, prejudice the rights of the defendant petitioner.
7. Order 6 Rule 17 of the Code of Civil Procedure provides for amendment of pleadings in the following manner:-
“17. Amendment of pleadings.- The Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties:
Provided that no application for amendment shall be allowed after the trial has commenced, unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial.”
8. This rule does not set any time limit on the contrary, it provides for amendment at any stage of the proceedings provided the same is necessary for determining the real questions in controversy between the parties.
9. The Apex Court in the case of Andra Bank vs. ABN Amro Bank N.V. and others reported in 2007 SC 2511 observed “ Delay is no ground for refusal of prayer for amendment of WS”. The only question to be considered by the Court is whether such amendment would be necessary for decision of the real controversy between the parties in the suit and here the Court cannot go into the question of merits of amendment. The Court in the case of Ramchandra Sakharam Mahajan vs. Damodar Trimbak Tanksale (Dead) and others reported in (2007) 6 SCC 737 held that when the amendment is sought for and if the same enables the Court to pin- pointedly consider the real dispute between the parties and thereby help to render its case more satisfactorily, it ought to be allowed.
It is needed to be noted that the proviso has been added in Order 6 Rule 17 with the Amendment Act, 22 of 2002 only with a view to prevent application for amendment being allowed after the trial commences unless the Court concludes that in spite of due diligence the party could not have raised the matter before commencing of trial.
In the case of Salem Advocate Bar Association, Tamil Nadu vs. Union of India reported in AIR 2005 SC 3353, the Supreme Court held that object of bringing this proviso to the statute book is to prevent frivolous applications, which are intended to delay the proceedings of trial and the proviso though curtails to certain extent, absolute discretion to allow the amendment at any stage, the same was found necessary in consonance with the object.
The Supreme Court also has time and again held that the dominant purpose of allowing amendment is minimize the litigation and the plea that the relief sought for by way of amendment was barred by time is arguable in the circumstances of the case and such plea of limitation being disputed could be made a subject matter of issue after allowing the amendment prayed for as noted in the case of Raghu Thilak D. John vs. S. Rayappan reported in AIR 2011 SC 699. The amendment, should, generally, be allowed unless it is shown that permitting the amendment would be unjust and results in prejudice against the opposite side, which cannot be compensated by costs or would deprive him of a right which has accrued to him with the lapse of time. Amendment may also be refused, if such a prayer made separately, is shown to be barred by time.
10. In the case of Rajesh Kumar Aggarwal and others vs. K.K.Modi and others reported in AIR 2006 SC 1647, the Apex Court held on the similar line and directed the Court not to go into the merits in the following words:-
“While considering whether an application for amendment should or should not be allowed, the Court should not go into the correctness of falsity of the case in the amendment. Likewise, it should not record a finding on the merits of the amendment and the merits of the amendment sought to be incorporated by way of amendment are not to be adjudged at the stage of allowing the prayer for amendment.”
In the case of Puran Ram vs. Bhaguram and anr. reported in AIR 2008 SC 1960, the Apex Court held that the amendment was sought to be changed in a part of description of the suit property, which was wrongly described by mutual mistake. The Court held that this could not convert the suit for specific performance of the contract to a suit for declaration and, therefore, the same could be allowed in view of Section 26 of the Specific Relief Act. The Court further held that the High Court under Article 227 of the Constitution of India ought not to have interfered with the order of the trial Court when the trial Court passes an order on sound consideration of law and facts and when it cannot be said that the order is either without jurisdiction or perverse or arbitrary.
In the case of Pankaja and another vs. Yellappa (D) by L.Rs., and others reported in AIR 2004 SC 4102, the Apex Court held that the amendment of pleading was sought after a substantial delay. The Court held that such amendment sought after relief was barred by limitation but the same can also be allowed in appropriate cases if that subserve the cause of justice and avoid further litigation. In this case the suit was for permanent injunction restraining interference with possession, the amendment was sought seeking declaration of title. The amendment when was rejected considering the question of limitation that was held to be incorrect. It held that the factual details as regards title were also mentioned in the plaint and, therefore, it cannot be said that by amending, a new relief was being claimed. Such amendment was sought 6 years after the prayer of declaratory relief. However, the same was allowed by the Apex Court.
In the case of Sampath Kumar vs. Ayyakannu and another reported in AIR 2002 SC 3369, the Apex Court held that in a suit for permanent prohibitory injunction against the defendant for forcefully dispossessing the plaintiff, where the plaintiff sought by amendment relief for declaration of title to suit property and consequential relief of delivery of possession. The proposed amendment was held not to have altered the basic structure of the suit. With regard to the delay, the Court held that the question of delay in moving the application for amendment should be decided not by calculating the period from the date of institution of the suit alone, but, by reference to the stage to which the hearing of the suit has proceeded. Pre-trial amendments are allowed more liberally than those which are sought to be made after the commencement of the trial or after conclusion thereof. It held that in former case generally it can be assumed that the defendant is not prejudiced because he will have full opportunity of meeting with the case of the plaintiff as amended, whereas, there could be some possibility of prejudice if it is preferred after the trial has commenced. However, no straight jacket formula is laid down and considering the reference and the facts and circumstances of each individual case, this aspect of delay is needed to be considered.
In the case of Jai Jai Ram Manohar Lal vs. National Building Material Supply, Gurgaon, reported in AIR 1969 SC 1267, the Apex Court held that the suit was originally instituted mis-describing the plaintiff and the amendment was sought for substituting the real plaintiff. The Court held that there was no question of limitation in such case and the plaint must be deemed on such amendment to have been instituted in the name of real plaintiff on the date on which it was originally instituted. It further held that the rules and procedure are intended to be handmaid to the administration of justice. A party cannot be refused just relief merely because of some mistake, negligence, inadvertence or even infraction of the rules and procedure. The Court always gives leave to amend the pleading of a party, unless it is satisfied that the party applying was acting mala fide, or that by his blunder, he had caused injury to his opponent which may not be compensated for by an order of costs. However, negligent or careless may have been the first omission, and, however, late the proposed amendment, the amendment may be allowed if it can be made without injustice to the other side.
11. In substance, it can be summarized that the object of this provision to be essentially on the statute book, is to minimize or avoid the multiplicity of the proceedings and settle the entire dispute existing by and between the parties. It would be necessary for the Courts to allow, as per this provision, the amendment at any stage of proceedings, if the same is found necessary for determining the real question in controversy as long as it does not alter the very basic structure of the suit nor should the same prejudice the interest of the other side. It also can be further said that the question of limitation and other questions on merits are not required to be determined at the stage of amendment and the parties can raise the same at an appropriate time, unless, amendment proposed is ex facie barred by law of limitation or when the same cannot be made without prejudice to the actual right of other side. Again, objections against the amendment cannot preclude the Court from allowing the same if otherwise there exists special circumstances and as mentioned hereinabove, the same is necessary for deciding the controversy between the parties. Pre-trial amendment more particularly are to be allowed liberally than those preferred after trial has begun.
12. This being the well laid down propositions of law and the trial Court having allowed the amendment on the well settled principles, in absence of any jurisdictional error or any material or manifest illegality in the order impugned, supervisory jurisdiction under Article 227 of the Constitution of India does not require to be invoked and, therefore, this petition for further reasons to be highlighted hereinafter requires rejection.
12.1 The very provision of Civil Procedure Code states that the amendment can be carried out at any stage and more particularly the pre-trial stage. Plethora of judgments also interpreted this provision to hold that there is no time prescribed for bringing amendment and the same can be allowed by the Court at any stage, while keeping in mind the safeguards contemplated by the statute and, thereafter amplified and clarified by the High Courts. Reliance of the learned Senior Advocate appearing for the petitioner on the residuary clause of Article 137 as law of Limitation Act, 1963, finds no favour with this Court. If one looks at the scheme of Limitation Act, Article 120 onwards, the period of limitation prescribed in the Act has a corresponding reference of such limitation under the Code of Civil Procedure and, therefore, it will not be possible for this Court to uphold the say of the learned Senior Advocate Mr. M.C.Bhatt that in absence of any such period of limitation in the Code of Civil Procedure, residuary clause of Article 137 shall need to be imported for considering the period of limitation of 3 years from the date of merger of the company both in the years 1997 and 2005. The statute itself being very clear, no restrictive interpretation as sought to be canvassed by the learned advocate for the petitioner herein can be given and, therefore, these grounds are not entertained.
13. Even otherwise as mentioned hereinabove, at the time of allowing the amendment application, the Court is not required to go into the merits of the case. Another highlight made is of Order 22 Rule 10, which says that in case of assignment, creation or devolution of any interest, during the pendency of suit, person or upon whom such interest has come or devolved, can continue the suit. This rule comes under Order 22 heading of which is the “Death, marriage or insolvency of parties”. It has to be read in conjunction with the Order 22 Rule 8 which speaks of barring of the suit in the event of insolvency of the plaintiff. It also prescribes procedure where assignee declines to continue the suit or to give security for the costs. Order 22 Rule 10 speaks of procedure in case of assignment before final order in the suit. Therefore, learned advocate for the respondent is right in stating that this order cannot be pressed into service without any context or reference.
14. Order 1 Rule 10 of Civil Procedure Code speaks of the suit in the name of wrong plaintiff and Rule 2 speaks that the Court has a discretion at any stage of the proceedings to strike out or add parties. Thus any suit which is instituted in the name of wrong person or plaintiff or whether there is a doubt with regard to the right name of the plaintiff for determining the real matter in dispute, the Court may add any other person to be substituted or added as plaintiff upon such terms as the Court thinks fit and it also may strike out or add the parties to enable the Court effectively and completely to adjudicate upon and settle all the questions in the suit. Here is the case where the suit was initially filed in the name of right plaintiff and defendant. However, eventually names of both the litigating companies, of the plaintiff and that of the defendant changed on account of the merger that took place by virtue of the direction of the Courts and, therefore, it will be within the power of the Court to make necessary changes for effectively determining the real matter in dispute between the parties.
15. In absence of allowing such amendment, there are bound to be multiplicity of proceedings and that can never be the aim of the statute. Moreover, the provision of Company Law under Section 394 as well as the order of the Bombay High Court and this Court when are looked at, parties have been given the right. All legal and other proceedings by or against the Transferor Company, if any, pending on the Appointed Date and relating to the said Undertaking, its liabilities, obligations, duties and covenants shall be continued and enforced by or against the Transferee Company, as the case may be.
Of course, the first time merger was in the year 1997 and second time in the year 2005. As the Court while permitting such merger further permitted to continue the cause , non-making of such request the first time when such name was changed is mainly objected to by the learned advocate for the petitioner. Such right to she having been continued and such change being absolutely necessary, trial court was justified in allowing the amendment.
16. Resultantly, there is no justification at all in any of the contentions raised in this petition and the same is dismissed.
Civil Application No.8873 of 2011 in Special Civil Application No. 8495 of 2010
In view of the order passed in the main petition, Civil Application does not survive. Civil Application is disposed of accordingly.
(Ms. Sonia Gokani, J.) sudhir