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Sanjeev Builders Private Ltd. v. Life Insurance Corporation Of India
Factual and Procedural Background
This opinion concerns a Chamber summons filed by the plaintiffs seeking leave to amend the plaint to enhance the alternative claim for damages in a suit concerning an agreement dated 8.6.1979. The plaintiffs initially claimed damages estimated at Rs. 1,01,00,000/- for breach of the agreement. Over the pendency of the suit, which has lasted approximately 32 years, the plaintiffs now seek to increase the estimated damages to Rs. 400,01,00,000/-, reflecting the increased value of the suit property. The trial has not yet commenced though issues have been framed long ago. The amendment also involves deleting plaintiff no. 3 from the cause title and correcting paragraph numbering in the plaint.
Legal Issues Presented
- Whether the plaintiffs can be permitted to amend the plaint to enhance the claim for damages after a prolonged pendency of the suit, specifically beyond the usual limitation period.
- Whether such an amendment is barred by limitation or permissible under the provisos to sections 21(5) and 22(2) of the Specific Relief Act, 1963.
- How the court should balance the principle of liberal allowance of pre-trial amendments against the limitation bar when the increased claim is made after a long delay.
Arguments of the Parties
Applicants' Arguments
- The plaintiffs originally quantified damages at Rs. 1,01,00,000/- but due to the increase in property value during the pendency of the suit, the estimated damages now amount to Rs. 400,01,00,000/-.
- The plaintiffs contend that the amendment is only to enhance the existing claim and is subject to Section 73 of the Contract Act, which governs damages for breach of contract.
- The amendment is necessary to avoid prejudice, as without it, defendants could object to any higher damages claimed beyond the original plaint.
- The plaintiffs emphasize that the amendment does not guarantee entitlement to the enhanced amount but only allows the claim to be made, to be proved at trial.
Defendants' Arguments
- The defendants argue that the application for enhancement of damages after 30 years is ex-facie barred by limitation.
- They rely on the settled legal position that while courts are liberal in allowing pre-trial amendments, amendments that appear barred by limitation should not be permitted.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| 2013 (3) Mh.L.J. 440 Kahini Developers Pvt. Ltd. v. Mukesh Morarji Panchamatia | Interpretation of provisos to sections 21(5) and 22(2) of the Specific Relief Act, 1963 regarding amendment of plaint at any stage not barred by limitation. | The court relied on this precedent to hold that amendment applications can be made at any stage of proceedings and are not barred by limitation, though limitation on cause of action remains to be adjudicated at trial. |
| 2007-1 Law Weekly 32 Hi Sheet Industries v. Litelon Limited | Amendment of pleadings to enhance damages claims beyond limitation period can be entertained depending on facts and circumstances. | The court cited this to support the proposition that enhancement of damages claims by amendment is permissible notwithstanding limitation, subject to case-specific considerations. |
Court's Reasoning and Analysis
The court analyzed the application for amendment in light of the prolonged pendency of the suit and the significant increase in the estimated damages due to the changed value of the property. It acknowledged the defendants’ contention regarding limitation but noted the legal principle that amendments under the provisos to sections 21(5) and 22(2) of the Specific Relief Act can be made at any stage and are not inherently barred by limitation. The court distinguished between the application for amendment and the cause of action itself, emphasizing that limitation on the cause of action must be determined at trial. The court also recognized the prejudice that could be caused to the plaintiffs if not allowed to amend, given the long delay was beyond their control. The court therefore permitted the amendment while keeping open the defendants’ right to raise limitation as a defense to be adjudicated at trial.
Holding and Implications
The Chamber summons for leave to amend the plaint is allowed. The plaintiffs are permitted to delete plaintiff no. 3, correct paragraph numbering, and enhance the claim for damages as per the schedule annexed to the summons.
The court imposed costs of Rs. 25,000/- payable by the plaintiffs to the Chief Minister’s Distress Relief Fund. The defendants’ right to raise limitation objections is preserved for trial. No stay of the order was granted. The decision directly affects the parties by enabling the plaintiffs to amend their claim but does not establish any new precedent beyond the application of existing legal principles regarding amendments and limitation.
K.R. Shriram, J.:— At the outset, Plaintiffs permitted to delete plaintiff no. 3 in the cause title to this Chamber summons.
2. This Chamber summons is for leave to amend the plaint as per the schedule annexed to the Chamber summons. During the course of making submissions, Ms. Panda for applicants on instructions stated that the contents of proposed paragraph 12A are already there in the plaint and therefore, is not pressing for adding proposed paragraph 12A. Therefore, proposed paragraph 12B in the schedule to be read as paragraph 12A.
3. The amendment basically is to enhance the alternative claim for damages in the event the court holds that plaintiff is not entitled to specific performance of the agreement dated 8.6.1979. In paragraph-12 of the plaint it is averred “…….. plaintiffs submit that by reason of the breach committed of the said agreement by the defendants the plaintiff no. 1 have suffered loss and damages which they estimate at Rs. 1,01,00,000/- as per particulars of claim………”.
4. Prayer clause-b(v) reads as under:—
“That the defendants be ordered and decreed to pay to the plaintiff the said sum of Rs. 1,01,00,000/- or such other sum as this Honourable Court may deem just and proper with interest at the rate of 18% from the date of the suit till payment and/or realisation as and by way of damages for breach of the said agreement for sale”
(emphasis supplied)
5. It is the case of the applicant as submitted by Ms. Panda that while filing the suit, plaintiffs quantified the estimated damages likely to be caused to them by reason of non performance at Rs. 1,01,00,000/- The value of the suit property increased during the pendency of the suit. According to plaintiffs' estimate, the value of the property today can be estimated to be Rs. 400,01,00,000/- and if the court is not inclined to grant specific performance, then the damages which plaintiffs would suffer on account of non performance by the defendants under the agreement should be Rs. 400,01,00,000/-. Therefore, there is already claim for damages but what plaintiffs are seeking today is only enhancing the claim, of course subject to provisions of Section 73 of the Contract Act.
6. Ms. Paranjape submitted that after 30 years, this application is filed for enhancement and therefore, ex-facie the increased amount is barred by limitation. Ms. Paranjape submitted that though the settled position in law is that courts are generally liberal with pre-trial amendment, when ex-facie claim appears to be barred by limitation, the court should not permit the amendment.
7. What one should keep in mind is this figure of Rs. 400,01,00,000/- can tomorrow go up or go down. Plaintiffs are only estimating it to be the amount which according to plaintiffs, is the loss which they would suffer. Whether that is the right estimate can be decided only at the time of trial. Even in para 12 of the plaint plaintiff has stated “…….suffered loss and damages which they estimate at……….” In prayer clause-(b)(v) plaintiff pray “…….. or such other sum as this Honourable Court may deem just and proper……” Further, if this figure of Rs. 1,01,00,000/- is not amended as prayed in this Notice of Motion, defendant will object the attempt of plaintiff to claim more as damages saying plaintiff cannot go beyond what is averred in the plaint. Due to situation beyond the control of plaintiff, this suit has remained pending for almost 32 years. Chances of suffering greater prejudice is more if the amendment is not allowed. It is clarified that plaintiff will still have to prove every penny it is claiming as damages.
8. Further, a Division Bench of this Court in 2013 (3) Mh.L.J. 440Kahini Developers Pvt. Ltd. v. Mukesh Morarji Panchamatia has, while considering section 22 of the Specific Relief Act 1963, held that the legislature has contemplated that an amendment within the meaning of proviso to section 21(5) and section 22(2) of the Specific Relief Act 1963 can be made at any stage of the proceeding and such an amendment would not be barred by limitation. Paragraph-11 of the said Judgment reads as under:—
“11. Since the Court is informedthat an appeal has been filed against the judgment of the learned Single Judge in Harinarayan G. Bajaj (supra), we are not expressing any opinion on the correctness of that decision. We are, however, of the view that since the lelgislature has contemplated that an amendment within the meaning of the provisos to section 21(5) and section 22(2) of the Specific Relief Act 1963 can be made at any stage of the proceeding, such an amendment would not be barred by limitation. Even as a matter of first principle, an application for amendment must be distinguished from the cause of action which is sought to be set up by the amendment. As a matter of general principle, though an application for amendment is allowed, the question as to whether the cause of action is within llimitation would have to be determined and adjudicated upon. While allowing an amendment, it is always open to a Civil Court to direct that the amendment shall not relate back to the institution of the proceeding. The Court would therefore have to determine at trial whether the cause of action is within limitation or is barred. Where the llegislature has contemplated that the plaint can be amended at any stage of the proceeding as stipulated in the provisos to section 21(5) and section 21(2). Such an amendment of the nature contemplated by those provisions can indeed be brought about at any stage of the proceedings.”
9. A full bench of the Madras High Court in 2007- 1 Law Weekly 32Hi Sheet Industries v. Litelon Limited has also held that an amendment of pleading on damages when a plaintiff is seeking to claim enhancement of the amount of compensation/damages could be entertained notwithstanding the fact that amendment is sought for beyond the period of limitation. Of course, the court has also said that it would depend on facts and circumstances of each case.
10. Admittedly, the trial is yet to begun though issues have been framed long ago.
11. In the circumstances, keeping open rights and contentions of defendants to raise the issue of limitation which the court will decide at the time of trial, Chamber summons allowed in terms of prayer clause-(a) and accordingly disposed.
12. Paragraph-12(B) in the schedule to be corrected to read as 12(A) and the amendment as mentioned in (I), (III), (IV) & (V) in the schedule are permitted.
13. Plaintiffs to pay sum of Rs. 25,000/- as costs by way of donation to Chief Ministers Distress Relief Fund, Account No.:67319948232, Bank: State Bank of India, Branch: City Branch, Thiruvananthapuram, IFSC: SBIN0070028, Pan: AAAGDO584M, Account type: Savings, Swift Code: SBININBBTO8, within two weeks from today under advise to defendants’ Advocate.
14. Amendment to be carried out and amended plaint to be served within two weeks. Further written statement to be filed and copy served within one week thereafter.
15. Ms. Paranjape seeks stay of two weeks of this order. Stay refused.
16. Stand over to 8.10.2018 for issues.
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