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Seth Nanak Chand Shadiram v. Amin Chand Pyarilal .

Calcutta High Court

Jun 4, 1968

Judgment

Subsequent
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Structured Summary of the Opinion (Ray, J.)

Factual and Procedural Background

This appeal arises from a decree dated 7 February 1966 passed by A.K. Mukherjea, J. The plaintiff (now the appellant) filed the suit on 8 June 1960 seeking a decree for Rs. 2,74,178-12-3. On 29 July 1965 the plaintiff applied to amend the plaint; that application was heard by S.P. Mitra, J. on 21 September 1965 and dismissed (no written reasons for that dismissal appear in the record). At the trial on 7 February 1966 the plaintiff's counsel, indicating that the claim as pleaded was barred by limitation and because the amendment application had been dismissed, conceded that he could not proceed; the suit was dismissed with costs. The appellant challenged that outcome on appeal.

Legal Issues Presented

Whether the appellant could challenge the earlier interlocutory order refusing leave to amend the plaint in the appeal from the final decree.
Whether the proposed amendments to the plaint (notably: (a) an allegation of an acknowledgement by a letter dated 24 July 1957, and (b) specific particulars as to extension of time for delivery) should have been permitted by the trial court.
Whether the proposed amendments would introduce a new or inconsistent case, or merely amplify / perfect the cause of action already pleaded.

Arguments of the Parties

Appellant's Arguments

The plaintiff/appellant maintained that the application to amend the plaint should have been allowed.
With respect to the amendment pleading extension of time, counsel argued that the extension had already been pleaded and the amendments merely gave relevant dates and thus perfected the existing cause of action rather than introducing a new one.
The appellant relied on Supreme Court authority (including A.K. Gupta & Sons Ltd. v. Damodar Valley Corporation and earlier decisions) to support the proposition that the amendments were permissible as amplification or perfection of the cause of action.

Respondent's Arguments

The respondent contended that the dismissal of the amendment application left the plaint in a form disclosing no cause of action and barred by limitation.
At the trial the respondent emphasized that the plaintiff did not proceed with the suit and therefore there was no adjudication on the merits of limitation; in effect, the respondent argued that the appeal was really against the interlocutory order refusing amendment rather than against a substantive adjudication of limitation.
In opposing the specific amendment based on the alleged letter dated 24 July 1957, the respondent (by affidavit of Swaraj Paul) denied that any such letter was written by or on behalf of the defendant, pointed out it had not been disclosed in documents, and disputed the genuineness of the letter—arguing the application to amend was not bona fide and involved suppression.
With regard to the proposed extension-of-time amendments, the respondent argued that the plaint originally pleaded a "reasonable time" up to 6 July 1957 and that the later pleading up to 15/16 August 1957 would be inconsistent or would make a new case.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Satyadhyan Ghosal v. Smt. Deorajin Debi, 1963 SCR 590 : AIR 1960 SC 941	Construction of section 105 CPC: interlocutory orders which were not appealed from may be challenged in an appeal from the final decree if they affect that final decision.	The court relied on this authority to hold that the appellants were entitled to argue on appeal that the refusal to allow the amendment was erroneous and to have that interlocutory order considered in the appeal from the decree.
Maharajah Moheshur Singh v. Bengal Government, (1859) 7 Moo Ind App. 283	Judicial Committee principle: duty of the appellate court to correct erroneous interlocutory orders when the whole cause is before it on appeal.	The court invoked this principle (as referred to by the Supreme Court) to support consideration of the interlocutory refusal to amend when deciding the appeal from the final decree.
A.K. Gupta and Sons Ltd. v. Damodar Valley Corporation, AIR 1967 SC 96	On the meaning of "cause of action" and whether an amendment introduces a new case; held that an amendment may seek to introduce a claim based on the same cause of action and not introduce new facts or a new case.	The court used this authority to support the view that certain proposed amendments (relating to extension of time) amounted to amplification of an already-pleaded extension and did not constitute a new case.
Leach & Co. v. Jardine Skinner & Co., 1957 SCR 438 : AIR 1957 SC 357	Illustrates that an amendment which does not introduce a foreign matter to the scope of the suit and that contains allegations necessary to sustain the claim may be permissible.	The court cited this decision for the proposition that amendments which are within the scope of the suit and relate to the same transaction should not be treated as foreign or as creating a new case; this supported allowing certain amendments here.
Pirgonda Hongonda Patil v. Kalsonda Shidgonda Patil, 1957 SCR 595 : AIR 1957 SC 363	Amendments in aid of establishing the plaintiff's case (e.g., ownership) may be allowed if they assist in determining the real questions in controversy and do not introduce a new case.	The court relied on this decision to reinforce the proposition that amendments intended to elucidate or amplify pleaded facts so as to determine the real controversy are permissible.

Court's Reasoning and Analysis

The court proceeded in two principal stages: first addressing whether the interlocutory refusal to permit amendment could be considered on appeal; and second examining the substance of the proposed amendments.

1. Jurisdiction to review the interlocutory order in the appeal:

The court accepted the Supreme Court's reasoning in Satyadhyan Ghosal that interlocutory orders which were not appealed from may nonetheless be challenged in an appeal from the final decree when they affect the decree. Citing also the Judicial Committee's statement in Maharajah Moheshur Singh, the court held it was open to the appellants to contend on appeal that the amendment should have been allowed.

2. Analysis of the specific proposed amendments:

Amendment relating to paragraph 20(a) — allegation of a letter dated 24 July 1957 acknowledging liability and non-expiry of time:

The plaintiff relied upon assertions in the petition (verified affidavit) that such a letter existed. The defendant, by affidavit (Swaraj Paul), denied that any such letter was written by or on behalf of the defendant, stated no such letter had been disclosed in the affidavit of documents, and disputed its genuineness.
The plaintiff did not annex a copy of the alleged letter to the petition; no copy was annexed to the supporting affidavit and the original was not produced at the hearing of the amendment application.
The court observed that leave to amend is not a matter of right; facts must be pleaded and established. The court concluded that the proposed amendment based on the alleged letter suffered from mala fide / suppression and an absence of proof, and that the plaintiff had failed to establish the claim for amendment grounded on the letter. Consequently the learned judge was correct in disallowing that part of the amendment (paragraph 20(a)).

Amendments relating to extension of time and amplification of paragraphs 9, 12 and 20:

The appellant argued these amendments merely furnished dates and particulars to perfect an already-pleaded extension; the respondent argued they amounted to an inconsistent or new case (because the plaint previously indicated a reasonable time up to 6 July 1957).
The court reviewed Supreme Court precedents dealing with the scope of permissible amendments (including A.K. Gupta & Sons Ltd. v. DVC, Leach & Co., and Pirgonda Hongonda Patil) and concluded that where an extension had been pleaded, further particulars or amplification of that pleaded extension did not introduce a new case but rather perfected or elucidated the cause of action.
Applying those principles, the court found that the proposed amendments to paragraphs 9, 12 and 20 (other than the 20(a) letter allegation) should be allowed as they were amplificatory and within the scope of the suit.

3. Practical directions and costs:

The court directed that the allowed amendments be incorporated within a fortnight from drawing up the order, with the amended plaint to be served on the defendant's solicitor within seven days thereafter.
The defendant was given fourteen days to file an additional written statement; parties had a further fortnight to file affidavits of documents followed by inspection, and the suit would be brought to hearing immediately thereafter.
The court did not disturb the order for costs of the trial dated 7 February 1966, but set aside the decree. The order for costs made by S.P. Mitra, J. on 21 September 1965 was also not disturbed.
Finally, the defendant was awarded costs of the additional written statement and additional discovery, and costs of the appeal; the appeal was allowed and disposed as set out.

Holding and Implications

APPEAL ALLOWED

The court's operative conclusions and immediate consequences were:

The appeal was allowed and the decree dated 7 February 1966 was set aside.
The interlocutory order refusing amendment could be reviewed in the appeal; accordingly the court entertained the challenge to the refusal to amend.
The proposed amendment grounded on an alleged letter dated 24 July 1957 (paragraph 20(a)) was correctly disallowed because the plaintiff failed to produce or even annex the letter, the defendant denied its existence and genuineness, and the amendment was found to suffer from suppression and lack of bona fides.
The proposed amendments to paragraphs 9, 12 and the remainder of 20 (relating to extension of time and amplification of pleaded facts) were held to be permissible amplification of the existing cause of action and were ordered to be incorporated into the plaint within the timetable prescribed by the court.
Orders as to costs: the trial costs and the earlier costs order by S.P. Mitra, J. were left intact; the defendant was awarded costs for the additional written statement, discovery, and costs of the appeal.

The opinion confines itself to the direct effects above (permitting certain amendments, disallowing one specific proposed amendment, setting aside the decree and prescribing further procedural steps and costs). The court's reasoning is grounded on the authorities cited and on the documentary and affidavit evidence (or absence thereof) in the record; no broader legal principle beyond those applications is announced in this opinion.

Show all summary ...

Ray, J.:— This appeal is from the decree dated 7 February 1966 passed by A.K Mukherjea, J.

2. The plaintiff is the appellant. On 7 February 1966 the suit was dismissed with costs.

3. The suit was filed on 8 June 1960. The plaintiff asked for a decree for Rs. 2,74,178-12-3.

4. On 29 July 1965 a summons was taken out by the plaintiff for amendment of the plaint. The application for amendment was heard by S.P Mitra, J. on 21 September 1965 and the application was dismissed. There is no judgment to find out the reasons for dismissal of the application. It was contended that amendments should have been allowed.

5. In the application for amendment the plaintiff alleged that the defendant by letter dated 24 July 1957 written and sighed by the defendant and/or its agents duly authorised in that behalf duly acknowledged its liability to deliver the balance quantity of the goods under the contract and also acknowledged that the time for delivery and/or performance had not expired. In the subsequent paragraph the plaintiff alleged that the plaint should be amended in the manner as indicated in red ink in a copy of the plaint annexed thereto and that the proposed amendments were by way of elucidation of the allegations and further that by mistake and/or through inadvertence the petitioner failed to incorporate the elucidation and/or particulars in the original plaint.

6. The plaintiff's claim arose out of a contract in writing dated, 5 January 1956 whereby the defendant sold and/or delivered to the plaintiff certain quantities of steel rails at rates mentioned in the plaint and delivery was immediate. The plaintiff alleged that the defendant was unable to effect delivery in terms of the contract and that pursuant to the defendant's request time for delivery was extended.

7. In the proposed amendment the plaintiff alleged that time for delivery was extended till a reasonable time after 24 July 1957 which was a period of three weeks from 24 July that is to say, 16 August 1957 in the facts and circumstances of the case. In paragraph 20(a) of the plaint the proposed amendment was that the defendant by letter dated 24 July 1957 acknowledged its liability to deliver the balance quantity of goods and also acknowledged that time for delivery and/or performance had not expired. The other proposed amendments sought for are in paragraphs 9, 12 and 20 of the plaint

8. At the trial it appears from the judgment, counsel appearing for the plaintiff stated that on the basis of the plaint the claim was time barred and counsel further invited the attention of the court to the fact that the plaintiff had sought to amend the plaint by pleading acknowledgment but the application for amendment was dismissed and in view of these facts counsel conceded that he could not proceed with the suit as on the face of the plaint the suit ought to be dismissed for limitation.

9. Counsel for the respondent contended that the dismissal of the application for amendment left the plaint in a form that disclosed no cause of action and that it was barred by limitation. Counsel for the respondent emphasized on the statement of counsel before the court on 7 February 1966 that counsel could not proceed with the suit by reason of the dismissal of the application for amendment and contended that all that happened at the trial on 7 February 1966 was that the plaintiff did not proceed with the suit and there was no decision of adjudication of the suit. On that reasoning counsel for the respondent contended that the appellant really appealed acainst the order of dismissal of the application for amendment but that the trial on 7 February 1966 was not a decision or adjudication on the question of limitation of the claim in the suit.

10. The recent decision of the Supreme Court in Satyadhyan Ghosal v. Smt. Deorajin Debi, 1963 SCR 590 : AIR 1960 SC 941 considered the scope and meaning of section 105 of the CPC The Supreme Court said that an interlocutory order which had not been appealed from either because no appeal lay or even though an appeal lay an appeal was not taken, could be challenged in an appeal from the final decree or order. This decision is an authority for the proposition that though an appeal could have been taken from the order refusing the application for amendment on the ground of limitation yet the question could be agitated in appeal from the decree inasmuch as the order affects the decision from which an appeal has been preferred. The Supreme Court referred to the decision of the Judicial Committee in Maharajah Moheshur Singh v. Bengal Government, (1859) 7 Moo Ind App. 283 where the Judicial Committee said that it would be the duty of the court to correct erroneous interlocutory orders though not brought under their consideration until the whole cause had been decided and brought by appeal for adjudication.

11. I am therefore of opinion that it is open to the appellants to contend that the amendment should have been allowed.

12. With regard to the proposed amendments I shall deal first with the proposed amendments in paragraph 20(a) of the plaint. That part of the amendment is dealt with in paragraph 21 of the petition verified by an affidavit of the plaintiff affirmed on 29 July 1965 appearing at pages 23 to 30 of the paper-book. In paragraph 21 of that petition the plaintiff alleged about the letter dated 24 July 1957 in support of the proposed amendments. The defendant in the affidavit of Swaraj Paul affirmed on 16 August 1965 at pages 40 to 48 of the paper-book denied in paragraph 20 that any letter dated 24 July 1957 was written by or on behalf of the defendant as alleged or at all. The deponent further alleged that no letter alleged to be dated 24 July 1957 had been disclosed by the plaintiff in the affidavit of documents and further that no such alleged letter had been relied on by the plaintiff at any earlier stage. The deponent further denied and disputed the genuineness of the alleged letter dated 24 July 1957. The plaintiff dealt with the defendant's allegations in an affidavit affirmed by Devendra Kumar Somani on 24 August 1965 which will appear at pages 49 to 54 of the paper-book. The deponent Devendra Kumar Somani in paragraph 20 of the affidavit denied that the letter which was dated 24 July 1957 was an alleged one and stated that it was a genuine letter. It is significant that the letter dated 24 July 1957 was not annexed to the petition and even when the defendant denied the existence of the letter no copy of the letter was annexed to the affidavit and the original was not produced at the hearing of the application. Counsel for the respondent, in my view, rightly contended that the application for amendment was not a matter of right but the petitioner had to allege facts. One of the grounds taken in the appeal is that the learned judge should have held that the application for amendment was made bona fide. Counsel for the respondent rightly contended that the proposed amendment with regard to the acknowledgement of liability by the alleged letter dated 24 July 1957 suffers not only from the vice of mala fide but also from the infirmity of suppressing the same from the court. The plaintiff failed to establish the claim for amendment based on the letter dated 24 July 1957. In my opinion the learned judge correctly disallowed the proposed amendment with regard to paragraph 20(a) of the plaint.

13. Counsel for the appellant contended that the proposed amendment with regard to extension of time was really perfecting the plaintiff's claim in view of the fact that extension had already been pleaded and all that the plaintiff did was to give the relevant dates up to which there was extension. Counsel for the respondent submitted on the other hand that the plaintiff pleaded in the plaint that the reasonable time till which the plaintiff waited was 6 July 1957 and that the plaintiff was now making an inconsistent or a new case by pleading the alleged extension up to 15 August 1957.

14. Counsel for the appellant relied on the recent decision of the Supreme Court in the case of A.K Gupta and Sons Ltd. v. Damodar Valley Corporation, AIR 1967 SC 96 as also the earlier decision of the Supreme Court in the case of Leach and Co. v. Jardine Skinner and Co. 1957 SCR 438 : (AIR 1957 SC 357) and another decision of the Supreme Court in Pirgonda Hongonda Patil v. Kalsonda Shidgonda Patil. 1957 SCR 595 : (AIR 1957 SC 363) in support of the proposition that the plaintiff was not making a new case but that the plaintiff was merely perfecting the cause of action. The Supreme Court in the Damodar Valley Corporation case, AIR 1967 SC 96 observed that the expression ‘cause of action’ could mean a new claim made on a new basis constituted by new facts. In the Damodar Valley Corporation case, AIR 1967 SC 96 the plaintiff asked for recovery of certain moneys for different categories of work. The only dispute between the parties was whether the plaintiff was entitled to the whole amount of increase in accordance with the provisions of the contract or not. At the trial a question arose as to whether the suit was maintainable in view of section 42 of the Specific Relief Act because the plaintiff claimed a declaration that on a proper interpretation of the clause in the contract the plaintiff was entitled to enhancement of 20% over the tendered rates. The plaintiff after the decision of the High Court at Patna sought leave to amend the plaint by adding an extra relief asking for a decree for Rs. 65,000/-. That application for amendment was the subject-matter of the decision of the Supreme Court. The Supreme Court observed: “The amendment seeks to introduce a claim based on the same cause of action, that is, same contract. It introduces no new case of facts. Indeed the facts on which the money claim sought to be added is based are not in dispute. Even the amount of the claim now sought to be made by amendment, was mentioned in the plaint in stating the valuation of the suit for the purpose of juris-diction.”

15. In the earlier decisions of the Supreme Court namely in the case of Leach and Co., 1957 SCR 438 : (AIR 1957 SC 357), the suit was for damages on the footing of conversion. The court came to the conclusion that the suit must fail on that basis. Thereafter amendment was sought for asking for damages for non-delivery. The Supreme Court held that the prayer in the plaint claimed damages and all allegations which were necessary for sustaining the claim for damages were in the plaint and further that clause 14 of the contract on which the claim for damages was founded could not be said to be foreign to the scope of this suit. Counsel for the appellant relied on the decision in 1957 SCR 438 : (AIR 1957 SC 357) in support of the proposition that if without amendment a suit based on conversion was bound to fail for want of cause of action and the amendment was allowed on the ratio that the transaction on which the plaintiff in that case claimed damages really equated to the scope of the suit there was nothing foreign in the amendment asked for. Extracting that proposition counsel for the appellant contended that in the present case the pleading of extension having been there, any amendment would be in furtherance of the cause of action which was already there and would be within the scope of the suit.

16. The decision of the Supreme Court in the case of Pirgonda Hongonda Patil 1957 SCR 595 : (AIR 1957 SC 363) related to amendments being introduced in aid of the ownership of the plaintiff in that case. There were no particular averments in the plaint as to the facts or grounds on which the plaintiff based his title. The amendment was allowed by holding that it did not really introduce a new case but that the amendment was necessary for the purpose of determining the real questions in controversy be tween the parties.

17. In the present case the proposed amendments with regard to paragraphs 9, 12 and 20 cannot in the light of the principles stated above be said to be a new case or an inconsistent case for the obvious reason that the proposed amendments are really amplification of the case of extension already pleaded.

18. I am therefore of opinion that the amendments as sought for with regard to paragraphs 9, 12 and 20 of the plaint should be allowed.

19. The proposed amendments should be incorporated within a fortnight from the drawing up of the order. The order will be drawn up forthwith. The'amended plaint will be served on the defendant's solicitor within seven days of the incorporation of the amendments. The defendant will have fourteen days' time to file additional written statement thereafter. The parties will have a fortnight thereafter to file their respective affidavits of documents. Inspection will be made forthwith thereafter. The suit will be brought to hearing immediately thereafter by mentioning in the appropriate court.

20. The order for costs of the trial on 7 February 1966 is not disturbed but the decree is set aside. The order for costs made by S.P Mitra, J. on 21 September 1965 is also not disturbed.

21. The defendant will have costs of additional written statement and of additional discovery. The defendant will have costs of this appeal. the appeal is allowed and disposed as above.

S.K Mukhebjea, J.:— I agree.

22. Appeal allowed.