Amendment of Pleadings : Written Statement v. Plaint : The Law

Justice Tarun Chatterjee
Supreme Court of India

The Bench comprising Justice Tarun Chatterjee and Justice R.V. Raveendran have, in Usha Balashaheb Swami & Ors vs Kiran Appaso Swami & Ors. explained the law relating to amendment of pleadings. The Bench has highlighted the fundamental difference in the approach of Courts while dealing with a prayer for amendment of the Written Statement vis-a-vis amendment of the Plaint. The bench has observed as under;

Before dealing with the question whether the amendment sought for was rightly rejected by the High Court or not, we may first consider the principles under which amendments of pleadings can be allowed or rejected. The principle allowing or rejecting an amendment of the pleadings has emanated from Order 6 Rule 17 of the Code of Civil Procedure, which runs as under:

"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 shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.

Provided that no application for shall be allowed after the trial has commenced, unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial"

(Underlining is ours)

From a bare perusal of Order 6 Rule 17 of the Code of Civil Procedure, it is clear that the court is conferred with power, at any stage of the proceedings, to allow alteration and amendments of the pleadings if it is of the view that such amendments may be necessary for determining the real question in controversy between the parties. The proviso to Order 6 Rule 17 of the Code, however, provides that no application for amendment shall be allowed after the trial has commenced unless the court comes to a conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial. However, proviso to Order 6 Rule 17 of the Code would not be applicable in the present case, as the trial of the suit has not yet commenced.

It is now well-settled by various decisions of this Court as well as those by High Courts that the courts should be liberal in granting the prayer for amendment of pleadings unless serious injustice or irreparable loss is caused to the other side or on the ground that the prayer for amendment was not a bonafide one. In this connection, the observation of the Privy Council in the case of Ma Shwe Mya v. Maung Mo Hnaung [AIR 1922 P.C. 249] may be taken note of. 

The Privy Council observed:

"All rules of courts are nothing but provisions intended to secure the proper administration of justice and it is, therefore, essential that they should be made to serve and be subordinate to that purpose, so that full powers of amendment must be enjoyed and should always be liberally exercised, but nonetheless no power has yet been given to enable one distinct cause of action to be substituted for another, nor to change by means of amendment, the subject-matter of the suit."

(Underlining is ours)

It is equally well settled principle that a prayer for amendment of the plaint and a prayer for amendment of the written statement stand on different footings. The general principle that amendment of pleadings cannot be allowed so as to alter materially or substitute cause of action or the nature of claim applies to amendments to plaint. It has no counterpart in the principles relating to amendment of the written statement. Therefore, addition of a new ground of defence or substituting or altering a defence or taking inconsistent pleas in the written statement would not be objectionable while adding, altering or substituting a new cause of action in the plaint may be objectionable.

Such being the settled law, we must hold that in the case of amendment of a written statement, the courts are more liberal in allowing an amendment than that of a plaint as the question of prejudice would be far less in the former than in the latter case [see B.K. Narayana Pillai v. Parameswaran Pillai (2000(1) SCC 712) and Baldev Singh & Ors. v. Manohar Singh (2006 (6) SCC 498)]. Even the decision relied on by the plaintiff in Modi Spinning (supra) clearly recognises that inconsistent pleas can be taken in the pleadings. In this context, we may also refer to the decision of this Court in Basavan Jaggu Dhobi v. Sukhnandan Ramdas Chaudhary (Dead) [1995 Supp (3) SCC 179]. In that case, the defendant had initially taken up the stand that he was a joint tenant along with others. Subsequently, he submitted that he was a licensee for monetary consideration who was deemed to be a tenant as per the provisions of Section 15A of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. This Court held that the defendant could have validly taken such an inconsistent defence. While allowing the amendment of the written statement, this Court observed in Basavan Jaggu Dhobi's case (supra) as follows :-

"As regards the first contention, we are afraid that the courts below have gone wrong in holding that it is not open to the defendant to amend his statement under Order 6 Rule 17 CPC by taking a contrary stand than was stated originally in the written statement. This is opposed to the settled law open to a defendant to take even contrary stands or contradictory stands, the cause of action is not in any manner affected. That will apply only to a case of the plaint being amended so as to introduce a new cause of action."

As we have already noted herein earlier that in allowing the amendment of the written statement a liberal approach is a general view when admittedly in the event of allowing the amendment the other party can be compensated in money. Technicality of law should not be permitted to hamper the Courts in the administration of justice between the parties. In the case of L.J. Leach and Co. Ltd. v. Jardine Skinner and Co. [AIR 1957 SC 357], this Court observed "that the Courts are more generous in allowing amendment of the written statement as the question of prejudice is less likely to operate in that event". In that case this Court also held "that the defendant has right to take alternative plea in defence which, however, is subject to an exception that by the proposed amendment the other side should not be subjected to serious injustice."

Keeping these principles in mind, namely, that in a case of amendment of a written statement the Courts would be more liberal in allowing than that of a plaint as the question of prejudice would be far less in the former than in the latter and addition of a new ground of defence or substituting or altering a defence or taking inconsistent pleas in the written statement can also be allowed, we may now proceed to consider whether the High Court was justified in rejecting the application for amendment of the written statement.

Writ Jurisdiction : Complicated Questions of Fact : The Law

Justice Sinha

Justice Sinha and Justice Bhandari of the Supreme Court, in Noble Resources Ltd vs State Of Orissa & Anr., have examined the law relating to exercise of writ jurisdiction by the High Courts in the Country and laid down that though there is no bar on the High Court, while exercising writ jurisdiction, to deal with disputed questions of fact, the Courts should abstain from exercising such jurisdiction especially in cases where an alternate remedy is available. The Bench held as under;

On a conspectus of several decisions, a Division Bench of this Court in ABL International Ltd. (supra) opined that such a writ petition would be maintainable even if it involves some disputed questions of fact. It was stated that no decision lays down an absolute rule that in all cases involving disputes questions of facts, the party should be relegated to a civil court.

In Mahabir Auto Stores & Others v. Indian Oil Corporation and Others [(1990) 3 SCC 752], this Court observed :

"It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case."

In State of Uttar Pradesh and Others v. Vijay Bahadur Singh and Others [(1982) 2 SCC 365], a Division Bench of this Court held that the Government cannot be denied to exercise its discretionary power provided the same is not arbitrary.

Interplay between writ jurisdiction and contractual disputes has given rise to a plethora of decisions by this Court. See for example M/s Dwarkadas Marfatia & Sons v. Board of Trustees of the Port of Bombay [(1989) 3 SCC 293] and Mahabir Auto Stores (supra).

In Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai and Another [(2004) 3 SCC 214], this Court stated :

"The position of law is settled that the State and its authorities including instrumentalities of States have to be just, fair and reasonable in all their activities including those in the field of contracts. Even while playing the role of a landlord or a tenant, the State and its authorities remain so and cannot be heard or seen causing displeasure or discomfort to Article 14 of the Constitution of India.

It is common knowledge that several rent control legislations exist spread around the country, the emergence whereof was witnessed by the post-World War scarcity of accommodation. Often these legislations exempt from their applicability the properties owned by the Government, semi-government or public bodies, Government-owned corporations, trusts and other instrumentalities of State"

Non statutory contracts have, however, been treated differently. [See Bareilly Development Authority and Another v. Ajai Pal Singh and Others [(1989) 2 SCC 116].

A distinction is also made between performance of a statutory duty and/or dealing of a public matter by a State and its commercial activities. [See Indian Oil Corporation Ltd. v. Amritsar Gas Service and Others (1991) 1 SCC 533] and L.I.C. of India v. Escort Ltd. [(1986) 1 SCC 264].

In ABL International Ltd. (supra), this Court opined that on a given set of facts, if a State acts in an arbitrary manner even in a matter of contract, a writ petition would be maintainable. It was opined : "It is clear from the above observations of this Court, once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if by the impugned repudiation of the claim of the appellants the first respondent as an instrumentality of the State has acted in contravention of the abovesaid requirement of Article 14, then we have no hesitation in holding that a writ court can issue suitable directions to set right the arbitrary actions of the first respondent"

Contractual matters are, thus, not beyond the realm of judicial review. Its application may, however, be limited.

Although terms of the invitation to tender may not be open to judicial scrutiny, but the courts can scrutinize the award of contract by the Government or its agencies in exercise of their power of judicial review to prevent arbitrariness or favouritism. [See Directorate of Education and Others v. Educomp Datamatics Ltd. and Others (2004) 4 SCC 19]. However, the court may refuse to exercise its jurisdiction, if it does not involve any public interest.

Although the scope of judicial review or the development of law in this field has been noticed hereinbefore particularly in the light of the decision of this Court in ABL International Ltd. (supra), each case, however, must be decided on its own facts. Public interest as noticed hereinbefore, may be one of the factors to exercise power of judicial review. In a case where a public law element is involved, judicial review may be permissible. [See Binny Ltd. and Another v. V. Sadasivan and Others [(2005) 6 SCC 657] and G.B. Mahajan and Others v. Jalgaon Municipal Council and Others [(1991) 3 SCC 91].

In State of U.P and Another. v. Johri Mal [(2004) 4 SCC 714], it was held :

"It is well settled that while exercising the power of judicial review the court is more concerned with the decision-making process than the merit of the decision itself. In doing so, it is often argued by the defender of an impugned decision that the court is not competent to exercise its power when there are serious disputed questions of facts; when the decision of the Tribunal or the decision of the fact-finding body or the arbitrator is given finality by the statute which governs a given situation or which, by nature of the activity the decision- maker's opinion on facts is final. But while examining and scrutinising the decision-making process it becomes inevitable to also appreciate the facts of a given case as otherwise the decision cannot be tested under the grounds of illegality, irrationality or procedural impropriety. How far the court of judicial review can reappreciate the findings of facts depends on the ground of judicial review. For example, if a decision is challenged as irrational, it would be well-nigh impossible to record a finding whether a decision is rational or irrational without first evaluating the facts of the case and coming to a plausible conclusion and then testing the decision of the authority on the touchstone of the tests laid down by the court with special reference to a given case. This position is well settled in the Indian administrative law. Therefore, to a limited extent of scrutinising the decision- making process, it is always open to the court to review the evaluation of facts by the decision-maker."

Another field where judicial review is permissible would be when mala fide or ulterior motives is attributed. In Asia Foundation and Construction Ltd. v. Trafalgar House Construction India Ltd. and Others [(1997) 1 SCC 738], this Court held :

"We are of the considered opinion that it was not within the permissible limits of interference for a court of law, particularly when there has been no allegation of malice or ulterior motive and particularly when the court has not found any mala fides or favouritism in the grant of contract in favour of the appellant"

It was further held :

"Therefore, though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the court that in the matter of award of a contract power has been exercised for any collateral purpose. But on examining the facts and circumstances of the present case and on going through the records we are of the considered opinion that none of the criteria has been satisfied justifying Court's interference in the grant of contract in favour of the appellant"

We, however, having regard to ABL International Ltd (supra), do not accept Dr. Dhawan's contention that only because there exists a disputed question of fact or an alternative remedy is available, the same by itself would be sufficient for the High Court to decline its jurisdiction.

Reserving Judgment : Guidelines to Judges : Supreme Court

Justice K.T. Thomas

Justice K.T. Thomas and Justice R.P. Sethi began their judgment in Anil Rai v. State with the observation : "The magistrate who cannot find time to write judgment within reasonable time after hearing arguments ought not do any judicial work at all. This Court strongly disapproves the magistrates making such a tremendous delay in the delivery of his judgments." The Supreme Court in the above case strongly deprecated the practice of judges in 'reserving' judgments in matters and not pronouncing them for long periods of time. The Supreme Court laid down the following guidelines for the said purpose, which are enumerated hereinbelow;

i) The Chief Justices of the High Courts may issue appropriate directions to the Registry that in a case where the judgment is reserved and is pronounced later, a column be added in the judgment where, on the first page, after the cause-title date of reserving the judgment and date of pronouncing it be separately mentioned by the court officer concerned.

ii) That Chief Justices of the High Courts, on their administrative side, should direct the Court Officers/Readers of the various benches in the High Courts to furnish every month the list of cases in the matters where the judgments reserved are not pronounced within the period of that month.

iii) On noticing that after conclusion of the arguments the judgment is not pronounced within a period of two months the concerned Chief Justice shall draw the attention of the Bench concerned to the pending matter. The Chief Justice may also see the desirability of circulating the statement of such cases in which the judgments have not been pronounced within a period of six weeks from the date of conclusion of the arguments amongst the judges of the High Court for their information. Such communication be conveyed as confidential and in a sealed cover.

iv) Where a judgment is not pronounced within three months from the date of reserving judgment any of the parties in the case is permitted to file an application in the High Court with prayer for early judgment. Such application, as and when filed, shall be listed before the bench concerned within two days excluding the intervening holidays.

v) If the judgment, for any reason, is not pronounced within a period of six months any of the parties of the said lis shall be entitled to move an application before the Chief justice of the High Court with a prayer to withdraw the said case and to make it over to any other bench for fresh arguments. It is open to the Chief Justice to grant the said prayer or to pass any other order as he deems fit in the circumstances.

Royals Get Reprieve : To take Part in Auction

Source: Times of India

Bombay High court upholds the interim order of independent arbitrator Justice BN Srikrishna arbitrator's stay on IPL franchise Rajasthan Royals termination made by BCCI. 

Meanwhile, the court allowed Rajasthan Royals to take part in IPL 4 auction which will be held in January. 

However, the court has set financial conditions to Royals while upholding the stay and also directs Royals to file affidavit before it on January 3 specifying full details about mode of control. 

The BCCI had on October 10 decided to terminate the franchise agreement of Rajasthan Royals, along with that of Kings XI Punjab, for alleged breach of agreement by the two franchises. 

Royals had challenged the termination before the Bombay High Court.