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Smart Summary

Factual and Procedural Background

The plaintiff claimed a charge arising from an award (Ex. J-1) and from the decree (Ex. J-3) based on that award. On earlier hearing this Court held that Ex. J-3, as originally passed on 5 January 1917, did not confer the charge claimed because it did not reproduce the relevant term of the award. The plaintiff procured an amendment of Ex. J-3 under Section 152, Civil Procedure Code, by which words were inserted that would support her claim; the amendment was made on 25 November 1921. The plaintiff then moved for a re-hearing (review) of this appeal, which this Court allowed. The Advocate‑General for the 3rd defendant (the appellant) sought postponement of the re‑hearing pending an appeal to the Privy Council against the order granting review; the Court declined, holding that the order was not final for the purpose of Section 109, Civil Procedure Code, and proceeded with the re‑hearing. The 3rd defendant had purchased at a Court sale on 8 December 1917, at which date Ex. J-3 remained unamended.

Legal Issues Presented

  1. Whether an amendment of a decree under Section 152, Civil Procedure Code, made after a third party has acquired rights (by purchase in Court sale) and in proceedings to which that third party was not a party, can be pleaded against that third party.
  2. Whether the discretionary power to amend under Section 152 should be exercised where amendment occurs long after third‑party rights have intervened and in the absence of notice to the third party.
  3. Whether the order granting review is a "final" order for the purpose of Section 109, Civil Procedure Code (raised by the Advocate‑General's application to postpone re‑hearing).

Arguments of the Parties

Appellant (3rd defendant) / Advocate‑General

  • Asked the Court to postpone the re‑hearing so he might appeal to the Privy Council against the order granting review (contending that review order should be treated as final for Section 109 purposes).
  • Asserted a right to object to the amendment because the 3rd defendant had acquired rights at the Court sale prior to the amendment and had not been a party to the amendment proceedings.

Plaintiff

  • Maintained that under the Civil Procedure Code she could not have proceeded otherwise and could not have made the 3rd defendant a party to the amendment proceedings.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Hatton v. Harris and Langat Singh v. Janki Koer The principle that amendment of a decree should be refused or regarded as too late if the rights of third parties acting in good faith have intervened; and that the power to amend under Sect. 152 is discretionary. The Court relied on this principle to hold that, because the amendment was made long after the 3rd defendant acquired rights and without giving him notice, the amending Court would have refused the application if fully informed; therefore the amended decree cannot be pleaded against the 3rd defendant.

Court's Reasoning and Analysis

The Court proceeded on re‑hearing and framed the central factual temporal point: if Ex. J-3 had already contained the inserted words on 8 December 1917 (date of the 3rd defendant's purchase), the plaintiff would have relief; but Ex. J-3 did not so provide on 5 January 1917 (as passed) and remained unamended at the date of sale. The Court observed that Section 152 confers a discretionary power to amend and that, because no limitation is prescribed for such applications, late amendments can prejudice rights of third parties who acquire interests in the interim. Relying on the cited authorities, the Court concluded that an amending Court confronted with the full facts (including the present proceedings and the third party's intervening rights) would have refused to exercise its power to amend without giving notice to the 3rd defendant. The affidavits before the District Court did not disclose those facts; they described the earlier construction as merely “likely.” The Court therefore held that the plaintiff could and should have impleaded the 3rd defendant (consistent with the general principle that persons to be bound must be impleaded), and that the 3rd defendant, having had no prior opportunity to object and having acquired rights in good faith, is entitled now to object to the amendment. The delay and the plaintiff's knowledge of the 3rd defendant's rights dictated that his objection prevail.

Holding and Implications

APPEAL ALLOWED; the plaintiff's suit is dismissed with costs (including costs of the review petition).

Direct effect: The Court held that the amended decree (Ex. J-3, as amended on 25 November 1921) cannot be pleaded against the 3rd defendant who purchased at the Court sale on 8 December 1917 and was not a party to the amendment proceedings. The opinion does not purport to lay down a new broader precedent beyond applying established principles about the discretionary nature of Section 152 amendments and protection of intervening third‑party rights.

    P.S. Narayana Ayyar v. Biyari Bivi

    At the last hearing of this appeal* we held, disagreeing with the lower Court, that plaintiff was not entitled to the charge she claimed, because inter alia it was not conferred on her by her decree, Ex. J-3. That decree was passed on an award, Ex. J-1 but did not in our opinion reproduce the term thereof, by which such a charge as plaintiff set up was created. Plaintiff after our decision induced the Court, which passed Ex. J-3, to amend it under Sect. 152, Civil Procedure Code by removal of what in the affidavit filed there is described as a clerical error and to insert words making the provision her case here required. She then moved for a re-hearing of the appeal on review and we allowed it.

    The Advocate-General, on behalf of 3rd defendant, the appellant, first asked us to postpone the re-hearing until he had appealed to the Privy Council against our order granting a review. But we pointed out that such an order could not be regarded as final for the purpose of Sect. 109, Civil Procedure Code, and that his application for leave in connection with it would be unsustainable. The re-hearing accordingly proceeded.

    It may for the present purpose be at once conceded that, if Ex. J-3 had stood on 8th December, 1917 the date of 3rd defendant's purchase in Court-sale, as it does now, plaintiff would be entitled to relief. The question however is whether she is so entitled, when Ex. J-3 as it was passed on 5th January, 1917, and as it was expressed on the date of the sale, conferred no charge and recognised one only by the amendment, made over four years later, on 25th November, 1921, in proceedings, to which 3rd defendant was not a party.

    The exercise of the power to amend under Sect. 152 is discretionary and necessarily so, when no period of limitation is provided for application for its exercise and therefore no investigation of title can insure those who acquire rights in property dealt with in a previous decree, against the effect of a subsequent amendment thereof. This and the consequence, that an application for amendment should be rejected as too late, if the right of third parties acting in good faith have intervened, is recognised in Hatton v. Harris and Langat Singh v. Janki Koer. It is clear that, if the amending Court, the District Court of Madura, had the full facts before it, its duty would have been to refuse to use its powers for plaintiff's benefit. In fact, as the copies filed here of the affidavits on which it acted show, it was told nothing of those facts or of the present proceedings, from which the necessity for plaintiffs' obtaining an amendment had arisen, the construction which had actually been adopted by us being represented in one affidavit merely as “likely”. If the District Court had been aware of the real state of the case, it cannot be doubted that it would have refused to consider the application, until at least 3rd defendant had had notice of it.

    Plaintiff here has not succeeded in showing that the principle above referred to is for any reason inapplicable to this case and has argued only that, under the Civil Procedure Code, she could not have proceeded otherwise than she did and could not have made 3rd defendant a party to the amendment proceedings. It is not necessary for us to express a final opinion as to the applicability of O. 21, R. 10 or on the question whether the reference in that provision to “the pendency of the suit” covers the period between an original and an amended decree. For plaintiff could and should have made 3rd defendant a party in compliance with the general principle that persons, whom it is desired to bind by proceedings can and must be impleaded in them. 3rd defendant having had no previous opportunity to object to the amendment, is entitled to object to it now; and as it was delayed until long after he acquired his rights at the sale, by the immense of which plaintiff admittedly knew his objection must prevail.

    Holding that the amended decree cannot in the circumstances be pleaded against 3rd defendant, we again allow the appeal dismissing plaintiff's suit with costs (including those of the review petition) throughout.

    C.KAppeal allowed.

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    Comments

    P.S. Narayana Ayyar v. Biyari Bivi
    (Aug 1, 1922)