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Chunilal Bhogilal Shah v. Abdul Dawood Vohra

Bombay High Court

Feb 26, 1946

Judgment

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Structured Summary of the Opinion

Factual and Procedural Background

The plaintiff (now appellant) brought a suit for possession of a suit property, alleging purchase by a sale-deed dated 20-12-1933 from the defendants' mother. Prior to that sale, there had been a possessory mortgage of the same property dated 22-6-1929 executed by the defendants' father in favour of the plaintiff; the mortgage was mentioned in the sale-deed but not in the original plaint. In March 1941 the (minor) defendants contended that the 1933 sale was not legally effective under Mahomedan law and that both the sale and the mortgage were without consideration.

The suit was originally against defendant 1 only; defendant 2 was later joined on the plaintiff's application (29-7-1941). On 11-11-1941 the plaintiff applied to amend the plaint to claim alternatively as a possessory mortgagee. At that date twelve years had already elapsed since the 1929 mortgage. The defendants objected, but the trial Court allowed the amendment on 9-12-1941.

The trial Court held that the 1933 sale, though proved, was not binding on the defendants; it also held that the plaintiff could sue alternatively as a mortgagee but that the claim under the mortgage was barred by limitation (time-barred). The suit was dismissed with costs.

On appeal to the District Court the parties accepted that, for limitation purposes, the amended plaint should be treated as having the date of the original plaint (i.e., that the amendment related back). The District Judge held that the mortgage-based claim was in time on that basis, but he concluded that the trial Judge had not exercised judicial discretion properly in allowing the amendment because the amendment altered the whole nature of the suit (from ownership by sale to mortgagee's right) and was sought at a time when a fresh suit on that ground would have been time-barred by six months. The District Judge set aside the amendment order and dismissed the appeal with costs.

Legal Issues Presented

If the amendment was properly allowed, whether the amended plaint related back to the date of the original plaint for the purpose of limitation (i.e., whether the mortgage-based claim was in time).
Whether the amendment to the plaint was properly allowed by the trial Court (i.e., whether the trial Court exercised its discretion judicially under Order VI, Rule 17).

Arguments of the Parties

Appellant's Arguments

The appellant (represented by Mr. Choksi) argued that when a plaint is amended the relevant date for the amended plaint should be taken as the date of the original plaint; thus the mortgage-based claim should be treated as having been made on the original plaint date and so be in time.
The appellant relied on several precedents (listed in the opinion) to support that proposition.

Defendants' Arguments

At trial the defendants contended that the 1933 sale was not legal under Mahomedan law, and that both the mortgage (1929) and the sale (1933) were without consideration.
The defendants objected to the amendment of the plaint on 11-11-1941; they relied on the fact that twelve years had elapsed since the mortgage and that valuable rights under limitation had accrued to them.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
34 Bom. L.R 6281	Cited by the appellant to support the proposition that an amended plaint should be treated as of the date of the original plaint (relation back for limitation).	The Court recorded that it was not satisfied that the proposition would apply to a substantial amendment that altered the cause of action; the Court did not accept that these authorities controlled the present facts.
17 Pat. 2682	Cited by the appellant for the relation-back principle (as above).	The Court noted the citation but held that the relation-back principle relied upon was inapplicable where the amendment substantially altered the cause of action and prejudiced accrued rights.
19 Bom. 3203	Cited by the appellant for the relation-back principle.	The Court declined to apply the cited proposition to the facts because the amendment substituted a mortgage-based cause of action for an original sale-based cause of action and thus affected accrued rights.
37 Bom. 3404	Cited by the appellant for the relation-back principle.	The Court observed that the cited authorities did not justify allowing an amendment which prejudiced the defendants' rights under limitation in the present case.
(1887) 19 Q.B.D 3946	Leading English case establishing that amendments are generally not admissible when they prejudice the rights of the opposite party as existing at the date of amendment; such amendments accepted only in very peculiar circumstances.	The Court relied on the principle from this decision to support the view that amendments should not ordinarily be allowed where they prejudice accrued rights; it quoted Lord Esher M.R.'s statement to that effect.
47 I.A 255	Example where amendment was allowed notwithstanding limitation because plaintiffs had asserted rights in a defective form and the true statutory right was unquestionable; amendment corrected a clerical/blundering omission.	The Court treated this as an example of "very exceptional circumstances" where an amendment overriding limitation may be permitted; it distinguished that situation from the present case because there the plaintiffs had not been deprived of a fair defence of limitation.
11 M.I.A 4687	Cited as another instance in which an amendment was permitted despite limitation under exceptional circumstances.	The Court mentioned it as an approved instance but did not find the present facts analogous to warrant allowing the amendment.
33 Bom. 6448	Cited by Mr. Choksi (appellant) in support of allowing amendment where limitation would otherwise bar the substituted claim.	The Court discussed this decision in detail, noting that it was distinguished because there the defence of limitation was found not to be one to which the defendants were fairly entitled; the Court held that circumstance did not exist in the present case.
30 Bom. L.R 1588	Referenced as following the decision in 33 Bom. 644(8); used by appellant to support amendment in similar circumstances.	The Court regarded the succession of these decisions as inapplicable to the present facts because the present defendants had acquired a clear entitlement to rely on limitation.
33 Bom. 644	Described in the opinion: allowed amendment where plaintiffs' claim for money (barred by limitation at amendment date) was permitted because limitation was not a defence defendants were fairly entitled to.	The Court relied on the factual distinction—namely, that limitation was not a fair defence in 33 Bom. 644—which was absent in the present case; therefore that case did not support allowing the amendment here.
30 Bom. L.R 15889	Another reference to a Bom. L.R. decision cited in relation to 33 Bom. precedents.	The Court treated these Bom. L.R. precedents as distinguishable and insufficient to justify overriding defendants' accrued limitation rights in this case.

Court's Reasoning and Analysis

The Court's analysis proceeded in a series of connected steps grounded in procedural law (Order VI, Rule 17) and the effect of limitation:

The Court acknowledged the discretionary power under Order VI, Rule 17 to allow amendments "at any stage" and that such amendments are intended to enable determination of the real questions in controversy between the parties.
The Court observed that, for the purpose of determining the real controversy, inquiry into the parties' rights under the 1929 mortgage was necessary because the 1933 sale (by the defendants' mother) was held to be void as against the defendants. Thus, prima facie there was a legitimate reason to consider mortgage rights.
The Court identified the central difficulty: when the plaintiff applied to amend (11-11-1941), twelve years had already elapsed since the 1929 mortgage and the defendants had acquired valuable rights (i.e., the benefit of limitation). The amendment would have the effect of overriding those accrued rights.
The Court invoked the leading English authority ((1887) 19 Q.B.D 3946) and other decisions to state the settled practice that amendments are not ordinarily permitted if they prejudice the opposite party's rights as they exist at the date of amendment. Such amendments are only allowed in very exceptional circumstances.
The Court reviewed exceptional instances where amendments were allowed (e.g., 47 I.A 255 and 11 M.I.A 4687) and contrasted them with the present facts. In those exceptional cases the plaintiffs had merely framed their relief in an incorrect form or were correcting a blunder as to statutory relief; the rights asserted were indisputable and defendants were not fairly entitled to rely on limitation.
The Court considered authorities relied upon by the appellant (33 Bom. 6448 / 33 Bom. 644 and related Bom. L.R. decisions) and explained that those cases were based on a factual finding that the defence of limitation was not one to which the defendants were fairly entitled. The Court found that factual circumstance absent here: in the present case the defendants had clearly become entitled to rely on limitation by the time the amendment was sought.
Because the amendment sought to substitute a new cause of action (mortgage-based) for the original (sale-based), and because it was sought after the defendants had acquired a clear limitation-based defence, allowing the amendment would have prejudiced their accrued rights. The trial Judge therefore did not exercise his discretion judicially in permitting the amendment at that stage.
The District Judge was, on that understanding, justified in setting aside the order allowing amendment and in dismissing the appeal; the present Court agreed with that conclusion and the exercise of discretion by the District Judge.

Holding and Implications

Decision: The appeal is dismissed with costs. The Court upheld the District Judge's conclusion that the trial Court had not properly exercised its discretion in allowing the amendment to the plaint.

Implications:

The immediate consequence is that the trial Court's order allowing the amendment (which would have substituted a mortgage-based cause of action) was not justified and was set aside; the plaintiff's attempt to pursue the mortgage-based claim by amendment failed.
Because the amendment was not permitted, the suit remained rightly dismissed as previously ordered by the trial Court and upheld on appeal.
The opinion emphasizes that amendments which would prejudice acquired limitation rights are not to be allowed except in very exceptional circumstances; the Court distinguished earlier authorities where limitation was not a fair defence. The opinion does not purport to establish a novel legal principle beyond applying established practice to the facts of this case.

Order: Appeal dismissed with costs.

Show all summary ...

1. This suit was brought by the appellant for possession of the suit property on the ground that he had purchased it by a sale-deed on 20-12-1933, from the mother of the two defendants. Prior to the sale-deed, there has been a mortgage of the suit property on 22-6-1929, by the defendants' father in favour of the plaintiff, the mortgage being possessory. In the suit, however, the plaintiff did not mention anything about the mortgage though it was mention-ed in the sale deed on which be relied. In March, 1941, the defendants, who were minors at the date of the sale, contended that the sale was not legal under the Mahomedan law, having been effected by their mother, and that both the mortgage and the sale were without consideration. The suit was originally against defendant 1 alone and in his written statement, he also urged that defendant 2, his brother, should also be joined. Thereafter on 29-7-1941, the plaintiff made an application to join defendant 2 and it was granted. On 11-11-1941, the plaintiff made an application seeking to amend the plaint by claiming in the alternative to sue also as possessory mortgagee for possession. On that date twelve years had already expired from the date of the mortgage. The defendants objected to the amendment, but it was granted by the Court on 9-12-1941. The trial Court found that the sale-deed though proved was not binding on the defendants. It also held that the plaintiff was entitled to sue alternatively on the mortgage, and it came to the conclusion that the plaintiff's claim under the mortgage was time barred. Both the parties agreed that the claim made on the basis of the mortgage must be deemed to have been made when the plaintiff sought to amend the plaint, that is, on 11-11-1941, and on that basis, the claim under the mortgage was held to be time-barred. Accordingly, the suit was dismissed with costs. On appeal to the District Court the parties, departing from the position which they had taken regarding the date on which the claim on the basis of the mortgage must be deemed to have been made, accepted the position that for the purpose of limitation the date of the plaint as amended should be taken to be date of the original plaint and not the date on which the amendment was allowed. On that basis the learned District Judge held that the claim of the plaintiff for possession on the ground of the mortgage would be in time, but he further held that the learned trial Judge was not justified in allowing the amendment of the plaint. He came to the conclusion that the plaint on its being amended altered the whole nature of the suit, the original suit being for possession as owner and the suit as amended being for possession as a mortgagee. On that ground and on the ground that the amendment had been allowed at a time when if a separate suit had been filed on the new ground it would have been time-barred by six months, he held that the learned trial Judge had not exercised his discretion judicially in allowing the amendment. He next held that on this ground it was open to him to set aside the order of amendment of the plaint and on that basis decide the appeal. Accordingly, he held that the suit had been rightly dismissed and, therefore, dismissed the appeal with costs.

2. Two questions have been argued before me by Mr. Choksi on behalf of the appellant: (1) If the amendment was properly allowed, whether the suit was in time, that is, whether the amended plaint related back to the date of the original plaint and (2) whether the amendment was properly allowed. On the first question he has referred to 34 Bom. L.R 6281, 17 Pat. 2682, 19 Bom. 3203 and 37 Bom. 3404. He has contended that when a plaint has been allowed to be amended, the relevant date of the amended plaint should be taken as the date of the original plaint as conceded by both the parties in the lower appellate Court. On reference to the authorities cited, I am not satisfied that the said proposition would apply to the facts of a case where the amendment is of a substantial nature, altering even the cause of action, for there is no doubt that the cause of action under the amended plaint was based on the mortgage of 1929 while in the original suit the cause of action was based on the sale deed of 1933. I am, however, satisfied that the learned District Judge was right in holding that in this case the learned Subordinate Judge had not exercised his discretion judicially in allowing the amendment. Under O. 6, R. 17, 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 are directed to be made as may be necessary for the purpose of determining the real questions in controversy between the parties. There can be no doubt that for the purpose of determining the real question in controversy in this case, it was necessary that the Court should inquire into the rights of the parties under the mortgage and that it was rightly held that the sale by the defendants' mother was void and of no effect. But the difficulty arises from the fact that when the application for amendment was made on 11-11-1941, twelve years had already expired from the date of the mortgage and valuable rights had accrued to the defendants. Was it competent to the Court to override those rights and allow the plaintiff to amend his plaint in such a manner that it was only the rights of the parties as they existed before the expiry of twelve years from the date of the mortgage that was to be inquire into by the Court? The leading English case on the subject is (1887) 19 Q.B.D 3946. There the original action was simply for damages for slander and the plaintiff was non suited. Later she sought to amend her claim by setting up in addition to the claim for slander a fresh claim in respect of assault, false imprisonment and other causes which at the date of such amendment were barred by limitation though not barred at the date of the writ. The application for leave to amend the plaint was refused, and Lord Esher, M.E said (p. 395):

“We most 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 an amendment, but certainly as a general rule it will not do so.”

3. Two instances in which the Privy Council approved of amendments being granted under such peculiar circumstances are: 47 I.A 255 and 11 M.I.A 4687. In 47 I.A 255, the plaintiffs sued for a declaration of their right of preemption over certain land, but omitted to ask for consequential relief, namely, possession as required by Section 42 of the Specific Relief Act, 1877. The two lower Courts refused to allow the plaint to be amended since the time had expired for bringing the suit to enforce the right to possession on preemption. Upon a second appeal, the Court allowed the amendment to be made, and this was confirmed by the Privy Council, and their Lordships observed (p. 262):

“… all that happened was that the plaintiffs through some clumsy blundering, attempted to assert rights that they undoubtedly possessed under the statute in a form which the statute did not permit.”

4. These decisions clearly show that where a valuable right has accrued to the defendant, it will be only in very exceptional circumstances that the Court may allow an amendment overriding such rights, and that ordinarily such an amendment should not be allowed. Mr. Choksi has relied on 33 Bom. 6448, which was followed in 30 Bom. L.R 1588. In 33 Bom. 644, the plaintiffs, alleging that in pursuance of a partnership agreement they had delivered Rs. 4001 worth of cloth to the defendants, sued for an order of dissolution of the partnership and for accounts. The Subordinate Judge found that the plaintiffs did deliver Rs. 4001 worth of cloth to the defendants as alleged, but he also came to the conclusion that no partnership was created and that the suit as framed would not lie. The plaintiffs appealed, and when the appeal came on for hearing, they admitted that the facts stated in the plaint did not constitute a partnership and prayed for leave to amend the plaint by adding a prayer for the recovery of Rs. 4001. At this date the claim for the money was barred by limitation. The lower appellate Court allowed the amendment to be made and allowed the plaintiffs' claim. The defendants in appeal to the High Court contended that the amendment: had been wrongly allowed. It was held that the amendment had been rightly allowed, because the defence of limitation was a defence to which the defendants were never fairly entitled, and the allowance of the amendment only withdrew from them an advantage which they ought to have received. Batchelor, J. referred to the two principles which should be satisfied before an amendment under O. 6, R. 17 could be allowed, namely, (a) it should not work injustice to the other side and (b) it should be necessary for the purpose of determining the real questions in controversy between the parties. In that case both the conditions were satisfied, and though it is stated that at the date when the amendment to the plaint was sought the money claimed had been barred by limitation, it was held that the defence of limitation was not one to which the plaintiffs had been ever fairly entitled. This circumstance, in my opinion, clearly distinguishes that case from the present case. Here at the date when the amendment application was filed the defendants had clearly become entitled to rely on limitation against the plaintiff for more than twelve years had expired from the date of the mortgage. There can also be no doubt that the plaintiff sought by the amendment to substitute a new cause of action for the one relied on originally in his plaint. For these reasons, I am satisfied that the decisions in 33 Bom. 644, and 30 Bom. L.R 15889, are inapplicable to the facts of this case and that the lower appellate Court was right in holding that the trial Court had not properly exercised its judicial discretion in allowing the amendment. The plaintiff had only himself to thank for seeking to get the plaint amended ten months after the date of the plaint, although within about two months after the plaint had been filed the defendants stated their whole case and specifically mentioned the mortgage of 1929.

5. The plaintiff had thereafter three months more within which he might have applied for an amendment of the plaint, but they chose to do nothing till November, 1941, when their rights under the mortgage to possession had already been lost. In these circumstances, it seems to me that the trial Court was not justified in allowing the amendment. The appeal, therefore, fails and is dismissed with costs.

6. Appeal dismissed.