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Case Number

Civil Revn. Petn. No. 556 of 1973

Attorney(S)

For the Appellant: K. Raghava Rao, Advocate.

Judges

Venkatarama Sastry, J.

Acts

O. 6, Rule 17 and Section 151 of the CPC
Order 6, Rule 17

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Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

This matter is a revision against an order of the lower court which had allowed an application (I.A. 54/71 in O.S. 61/70) under Order 6, Rule 17 and Section 151 CPC for permission to amend the plaint.

The plaintiff originally sued for recovery of Rs. 19,723.95 as the balance price for 1,927 bags of sugar allegedly purchased by the defendant (who purported to act as representative of the Taluk Co‑operative Marketing Society, Srikakulam) during the period 24‑7‑1962 to 12‑4‑1963, with payments made between 12‑9‑1962 and 16‑6‑1963. The defendant had executed a letter of undertaking and a promissory note dated 7‑8‑1967 in favour of the plaintiff, and the suit relief was sought on the basis of the promissory note.

The defendant pleaded that the promissory note was insufficiently stamped and therefore inadmissible. In response, the plaintiff sought to amend the plaint to make clear that the cause of action was alternatively based on the original purchase/loan transactions and on the letter of undertaking and promissory note dated 7‑8‑1967. The defendant opposed the amendment as introducing a new cause of action and new relief, and contended that any claim based on the undertaking was barred by limitation as of the date of the amendment petition (5‑2‑1971).

The lower court allowed the amendment application. The defendant filed the present revision challenging that order.

Legal Issues Presented

Whether the lower court correctly exercised its power under Order 6, Rule 17 and Section 151 CPC in allowing the plaintiff to amend the plaint to make clear an alternative basis of claim (the letter of undertaking dated 7‑8‑1967 and original transaction), when the defendant contended that the amendment would introduce a cause of action barred by limitation as of the date of the amendment petition.
Whether permitting such an amendment would prejudice the defendant by taking away a limitation defence or otherwise impairing rights that had accrued to the defendant by lapse of time.

Arguments of the Parties

Plaintiff's Arguments

The plaint already contained allegations about the original transaction and the letter of undertaking/promissory note executed on 7‑8‑1967; the amendment sought only to clarify and expressly state that the cause of action was alternatively based upon those matters.
The relief originally sought was based on the promissory note; because the defendant challenged admissibility of the promissory note, the plaintiff sought to amend the plaint to make clear the alternative basis (original transaction and the undertaking) for recovery.

Defendant's (Petitioner's) Arguments

Allowing the amendment would introduce a new relief and new cause of action which was barred by limitation by the date of the amendment petition (5‑2‑1971).
The amendment would therefore take away a legal right that had accrued to the defendant (a limitation defence) and would cause irreparable loss and prejudice.
Reliance was placed on earlier Andhra Pradesh decisions (Indlamudi Veeraiah v. Kamala Mining Corporation and Sambasiva Rao v. Balakistaiah) to support rejection of the amendment where an amendment would rest on a cause of action already barred.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Indlamudi Veeraiah v. Kamala Mining Corpn., (1973) 1 Andh WR 5 : AIR 1973 Andh Pra 170	Authority where amendment sought based on earlier note when the suit note became inadmissible; held amendment could not be allowed where suit based upon earlier note already barred on date of suit.	The court observed this decision and distinguished it, holding it was not of assistance in the present case because its facts differed from the circumstances before the court.
Sambasiva Rao v. Balakistaiah, (1972) 2 APLJ (Short Notes) 73 : AIR 1973 Andh Pra 342 (Full Bench)	Dealt with circumstances under which amendment based upon the original cause of action can be sought when a promissory note is inadmissible (e.g., want of stamp or insufficient stamp).	The court noted this decision but did not consider it decisive for the present facts and thus did not rely on it to disallow the amendment.
Official Assignee of Madras v. V.A. Kuppuswami Naidu, AIR 1936 Mad 785 (Full Bench)	Full Bench approval of earlier decisions permitting amendment from promissory note to original debt where the original debt remained alive though the promissory note claim was barred; recognized circumstances where amendment may be allowed without prejudicing defendant.	The court regarded this Full Bench decision as directly in point and more appropriate to the present case, and applied its principle that amendment can be allowed where the original debt/transaction is still asserted in the plaint and the defendant's defence is merely denial.
E.B. Commercial Bank Ltd. v. Surendra Narayan Saha, (1935) 39 Cal WN 1235	Authority where a claim in the plaint based on an insufficiently stamped promissory note (barred) was amended to introduce a claim on the original loan; amendment allowed where defendant's plea was total denial and thus not prejudiced.	Followed by the Madras Full Bench and relied upon by the court here to support allowing an amendment when the defendant's only defence is total denial and hence cannot claim prejudice from the amendment.
Weldon v. Neal, (1887) 19 QBD 394 (Lord Esher)	Statement of settled practice: amendments are not admissible when they prejudice the rights of the opposite party as existing at the date of such amendment; courts might in peculiar circumstances allow such amendment but generally will not.	The opinion quoted this principle to frame the general rule and then examined whether the present case fell into the exceptional category where amendment can be allowed despite a limitation plea.
Charan Das v. Amir Khan, 47 Ind App 255 : AIR 1921 PC 50	Observation that courts should not generally exercise power to amend where effect is to take away a legal right by lapse of time, but recognized exceptions where special circumstances outweigh such considerations (citing Mohammed Zahoor Ali v. Mt. Ralla Koer).	The court cited this pronouncement to acknowledge the general prohibition against amendments that remove an accrued limitation defence, but noted that exceptions exist and may apply in special circumstances.
Mohammed Zahoor Ali v. Mt. Ralla Koer, (1867) 11 Moo Ind App 468 (PC)	Referred to as an example where considerations weighing against amendment were outweighed by special circumstances (authority for exception to general rule).	Referenced by the court as an example supporting that exceptions to the general rule are recognized in limited circumstances.
Maung Po Chein v. C.R.V.V.V Chettiar, AIR 1935 Rang 282	Where all facts of the original loan were set out in the plaint but the plaint was based on an insufficiently stamped promissory note, the plaintiff was entitled to succeed on the original loan even without an alternative prayer; amendment to add the alternative prayer was permissible.	The court used this authority (as approved by the Madras Full Bench) to support the proposition that where the original transaction is pleaded fully and the defendant's only defence is denial, amendment to state an alternative claim should be allowed.
Sevugan Chetty v. Krishnana Ayyengar, (1913) ILR 36 Mad 378	Held that an amendment of the plaint based on no new facts, asking for a further relief (recovery of money), may be allowed even if barred by limitation between date of plaint and petition to amend, provided it is done before any evidence is let in and there is no injustice to the defendant.	The court referenced this as supporting authority for allowing amendments prior to the admission of evidence where no injustice to defendant arises.

Court's Reasoning and Analysis

The court proceeded by reference to the governing rule (Order 6, Rule 17 CPC) and established authorities about amendments that may prejudice the opposing party's accrued rights. It acknowledged the general rule (following Weldon v. Neal) that amendments which prejudice the opponent's rights as they exist on the date of amendment are ordinarily not admissible, but also noted established exceptions where special circumstances justify permitting amendment despite a limitation defence (citing Charan Das and Mohammed Zahoor Ali).

The court considered competing Andhra decisions relied upon by the petitioner (Indlamudi Veeraiah and Sambasiva Rao) but found them inapplicable or unhelpful on the facts before it. Instead the court relied upon a Full Bench of the Madras High Court (Official Assignee of Madras v. V.A. Kuppuswami Naidu), which had approved earlier decisions (including the Calcutta decision in E.B. Commercial Bank Ltd. v. Surendra Narayan Saha and Rangoon decision Maung Po Chein) allowing amendment to shift from an inadmissible promissory note to the original transaction where the original transaction was pleaded and the defendant's defence was total denial.

The court then examined the pleadings in the present case with particularity:

Paragraph 3(a) of the plaint expressly referred to the defendant's letter of undertaking dated 7‑8‑1967 in which the defendant allegedly admitted liability to discharge dues of Rs. 17,073/‑ and undertook to clear them within 60 days.
Paragraph 3(b) and other parts of the plaint sought recovery of Rs. 19,723.96 with interest.
The cause of action paragraph (para 4) stated that the cause of action arose on 7‑8‑1967 when the promissory note was executed, and the relief prayed in para 6 sought a decree based on the promissory note dated 7‑8‑1967.

The court concluded that the factual allegations regarding the letter of undertaking and the original transaction were already pleaded with sufficient particularity in the plaint; the only defect was the absence of an express alternative plea or prayer seeking recovery on the basis of the letter of undertaking/original debt as an alternative to the promissory note. The defendant's written statement constituted a pure, total denial of the entire transaction, including denial of execution of the undertaking and the promissory note and denial of receipt of consideration.

Applying the principles from the cited Full Bench and earlier authorities, the court reasoned that where the defendant's case is total denial, the defendant cannot be said to be prejudiced by an amendment which merely clarifies an alternative basis of claim already pleaded by the plaintiff. Because the defendant's defence was not one that would be materially harmed by the clarification (the defence being denial of the entire transaction), allowing the amendment did not unlawfully take away a limitation defence or create prejudice that would justify interference by revision.

Holding and Implications

Holding: The revision is dismissed. The court held that the lower court properly allowed the amendment to the plaint and found no ground to interfere with the order challenged in revision. The dismissal was ordered without costs.

Implications:

Direct effect: The lower court's order permitting the plaintiff to amend the plaint to state alternatively that the claim was based upon the letter of undertaking dated 7‑8‑1967 and the original transaction is upheld; the plaintiff may proceed on that amended basis.
No broader precedent was announced beyond the application of existing authority: the court applied established principles (including Full Bench authority) that where the original transaction is sufficiently pleaded and the defendant's defence is total denial, an amendment to state an alternative basis need not be refused on grounds of limitation or prejudice. The opinion does not purport to lay down a new general rule beyond those authorities.

This summary is based exclusively on the content of the provided opinion; no information beyond the text has been added.

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Ippili Satyanarayana v. The Amadalavalasa Co-Pperative Agricultural And Industrial Society Ltd. .

1. This is an application to revise the order passed by the lower court in I.A 54/71 in O.S 61/70 on its file which was a petition filed under O. 6, Rule 17 and Section 151 of the CPC for permission to amend the plaint.

2. In the affidavit in support of the petition for amendment it was stated that the plaintiff filed the suit for recovery of Rs. 19723.95 from the defendant towards balance with interest due for the sale price of 1927 bags of sugar purchased by the defendant purporting to be the representative of the Taluk Co-operative Marketing Society Ltd. Srikakulam from the plaintiff society from 24-7-1962 to 12-4-1963 after payments were made from 12-9-1962 to 16-6-1963. The defendant executed a letter of undertaking to pay the amount. In the letter he has admitted that he had lifted the sugar from the factory and made payments in his personal capacity though he used the name of the Taluk Co-operative Marketing Society. The suit was filed on the strength of the undertaking and also on the promissory note though the relief was asked on the basis of the promissory note. The original consideration was the balance of the price of the sugar bags purchased by the defendant from the plaintiff society. Since the defendant has taken up the plea that the suit promissory note is insufficiently stamped and is therefore inadmissible in evidence, the plaintiff prayed for amending the plaint by deleting lines 1, 2 and 3 of paragraph 4 and substituting therefor by the words “the cause of action for this suit arose between the period from 24-7-1962 to 12-4-1963 when the defendant lifted the sugar bags from the plaintiff society and between the period from 12-9-1962 to 16-6-1963 when the defendant made payments for the said sugar bags and subsequently thereafterwards on 7-8-1967 when the defendant executed a letter of undertaking and promissory note in favour of the plaintiff society.” Similar consequential amendments in paras 5 and 6(A) were prayed for.

3. The defendant-petitioner herein filed a counter contending that the amendment if allowed would introduce a new relief and a new cause of action. The plaintiff cannot be permitted to base his claim on the letter of undertaking dated 7-8-1967 as the claim based upon the said letter became barred by the date of the petition for amendment. The effect of allowing amendment would result in taking away the right which has accrued to the defendant and he would therefore be put to irreparable loss.

4. The lower court considered the respective contentions and allowed the petition by its order which is now impugned in this revision.

5. Sri K. Raghavarao the learned Counsel appearing for the petitioner has submitted that since a new claim based upon the undertaking letter dated 7-8-1967 is barred by 5-2-1971 when the amendment petition was filed, the amendment ought to be rejected. It may be noted that the suit in this case was filed on 26-4-1969. He has placed reliance upon a decision of this court in Indlamudi Veeraiah v. Kamala Mining Corpn., (1973) 1 Andh WR 5 : (AIR 1973 Andh Pra 170) and Sambasiva Rao v. Balakistaiah, (1972) 2 APLJ (Short Notes) 73 : (AIR 1973 Andh Pra 342) (FB).

6. As regards the decision in (1973) 1 Andh WR 5 : (AIR 1973 Andh Pra 170) that was a case wherein the amendment that was sought was based upon an earlier note when the suit note became inadmissible in evidence. It was held by Sriramulu, J., that the suit based upon the earlier note having become barred on the date of the present suit itself, the amendment could not be allowed. The Full Bench decision in (1972) 2 APLJ (Short Notes) 73 : (AIR 1973 Andh Pra 342) (FB) dealt with only the circumstances under which the amendment based upon the original cause of action can be asked for when the promissory note is inadmissible on any ground like want of stamp or insufficient stamp etc., I do not therefore think that the two decisions relied upon by the learned Counsel would be of any assistance to him.

7. On the other hand there is a Full Bench decision of the Madras High Court in Official Assignee Of Madras v. V.A. Kuppuswami Naidu, AIR 1936 Mad 785 (FB) which has approved two or three earlier decisions which are directly in point and which are more appropriate in this case. In the Full Bench case the original debt was on dealings and the promissory note was executed for the balance. The suit was filed on the basis of the promissory note but the amendment that was sought was to base it on the original debt which was still alive even though the claim based upon the promissory note was barred. Their Lordships allowed the amendment The Full Bench followed the decision of the Calcutta High Court in E.B Commercial Bank Ltd. v. Surendra Narayan Saha, (1935) 39 Cal WN 1235, where the claim in the plaint was based on an insufficiently stamped promissory note which claim was barred and the amendment was made to introduce a claim on the loan. Since the plea of the defendant in that case was a case of total denial of the loan, their Lordships allowed the amendment on the ground that in the special circumstances of that case, the defendant was not prejudiced.

8. Dealing with Order 6, Rule 17 it was observed as follows:

“The difficulty lies in applying this rule where, as here, the defendant claims a time-bar under the statute of limitations. In Weldon v. Neal, (1887) 19 QBD 394 Lord Esher said: we must act on the settled rule of practice, which is that amendments are not admissible when they prejudice the rights of the opposite party as existing at the date of such amendments. Under very peculiar circumstances the Court might perhaps have power to allow such amendment, but certainly as a general rule it will not do so.”

9. Reference was then made to Charan Das v. Amir Khan, 47 Ind App 255 : (AIR 1921 PC 50) wherein the following observations were made by Lord Buckmaster:

“Though the power of a Court to amend the plaint 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 there are cases, see for example Mohammed Zahoor Ali v. Mt. Ralla Koer, (1867) 11 Moo Ind App 468 (PC) where such considerations are outweighed by the special circumstances of the case.”

10. The case (1935) 39 Cal WN 1235 is therefore an authority for the proposition that where the defence is one of total denial of the whole suit transaction, there is no question of the defendant being prejudiced by the amendment being introduced at that stage and it will be barred by limitation.

11. The same is the case with regard to the decision in Maung Po Chein v. C.R.V.V.V Chettiar, AIR 1935 Rang 282. In that case the suit was based upon a promissory note which was insufficiently stamped. But all the facts of the original loan and all the terms thereof were set out in the plaint, and the only defect in the plaint was that in the prayer the plaintiff had omitted to pray for a decree based on the original contract of a loan alternatively with a prayer for a decree based on the promissory note. Subsequently the plaintiff put in an application to amend the plaint by including such prayer. It was held that even on his original plaint, the plaintiff was entitled to succeed as on the original contract of loan and it was strictly not necessary, although it would simplify matter if it were amended. The Full Bench in AIR 1936 Mad 785 (FB) therefore observed after citing the above.

“It is of course well settled that where all the facts of the original loan and all its terms are set out in the plaint but the plaint is based on an insufficiently stamped promissory note, or, it may also be added, a promissory note barred by limitation, the plaintiff is entitled to succeed alternatively on the original loan although there is no such prayer; but this case is useful for its treatment of the party's right to amend assuming that such an amendment is necessary. In that case the only defence open to the defendant was a denial of the loan and in his written statement he did actually deny receipt of the consideration of the promissory note and under those circumstances the court held that the amendment ought to be allowed. Reference was also made to the decision of this High Court in Sevugan Chetty v. Krishnana Ayyengar, (1913) ILR 36 Mad 378, where it was held that a petition for an amendment of the plaint based on no new facts and asking for a further relief, viz., recovery of money, may be allowed even though it be barred by limitation between the date of the plaint and the date of the petition if the same is put in before any evidence is let in and there is no injustice to the defendant.”

12. In view of the principle laid down by the Full Bench in the above decision, I have gone through the allegations in the plaint and the written statement in the case.

13. In para 3 (a) of the plaint, it is stated as follows:

“The plaintiff admitted the same in his letter of undertaking dated 7-8-1967 executed in favour of the plaintiff factory, wherein he clearly stated that the facility was extended to him on account of his friendship with the Taluk Co-operative Marketing Society and the management of the plaintiff factory also admitted his liability to discharge the dues of Rs. 17073/- to the factory and undertook to clear off the dues within (60) days from the date of the letter of undertaking (7-8-67).”

14. In para 3 (b) it is stated:

“The suit is therefore instituted for recovery of Rs. 19723-96 from the defendant with costs and subsequent interest.”

15. In the cause of action para 4 it is averred as follows:

“The cause of action for this suit arose on 7-8-1967 when the defendant executed the suit promissory note in favour of the plaintiff at Srikakulam where the defendant resides and where the suit promissory note was executed in Srikakulam taluk of Srikakulum District. The suit is within time.”

16. In Para 6 the prayer was for a decree for a sum of Rs. 19723.95 being the principal and interest under the suit promissory note dated 7-8-1967.

17. It is therefore clear that sufficient allegations have already been made in the plaint regarding the undertaking letter given by the defendant on 7-8-1967 wherein he admitted his liability to discharge the dues of Rs. 17073/- to the plaintiff factory and undertook to clear off the said sum within 60 days.

18. The suit was laid for the recovery of the said amount together with interest. The only defect in the plaint was that in the cause of action as well as in the relief portion it was not clearly stated that it is also alternatively based upon the letter of undertaking given on 7-8-1967.

19. In the written statement of the defendant, the case is one of pure denial. He denied the execution of the letter dated 7-8-1967 and also the promissory note dated 7-8-1967 and the receipt of consideration under both.

20. As the case of the defendant in this case is one of complete and total denial of the entire suit transaction, the defendant is in no way prejudiced by the amendment being allowed. The defendant cannot be heard to say that it would take away the plea of limitation available to him. Applying the principle laid down in AIR 1935 Rang 282 and (1935) 39 Cal WN 1235, which was approved in the above Full Bench. I have to hold that the amendment in this case was properly allowed by the lower court.

21. I do not therefore, find any ground to interfere in revision with the order challenged in this case. The revision, therefore fails and is therefore dismissed. But in the circumstances without any costs.

22. Revision dismissed.

Ippili Satyanarayana v. The Amadalavalasa Co-Pperative Agricultural And Industrial Society Ltd. .

Concise Analytical Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Plaintiff's Arguments

Defendant's (Petitioner's) Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Ippili Satyanarayana v. The Amadalavalasa Co-Pperative Agricultural And Industrial Society Ltd. .

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