JUDGMENT
Devinder Gupta, A.C.J.
1. Order passed on 23.5.2001 by learned Single
Judge dismissing the application filed by
respondent No. 1/appellant seeking amendment to the
written statement is under challenge in this
appeal.
2. Facts in brief are that on 6.12.1997 suit was
filed by the Bank for Foreign Economic Affairs of
USSR against four defendants State Bank of
Patiala, being first defendant; Sumo Exports;
Punjab National Bank; I.C.P. Ruslan and Kenwright
Limited, being defendants 2 to 5. The plaintiff
claimed a decree for Rs.54,17,632/- along with
future interest against defendant No. 1 or such
other defendants as the Court may deem fit, inter
alia, alleging that they were carrying on the
business of banking in Russia and abroad.
Defendant No. 2 is the exporter and defendant No. 1
is the bank of defendant No. 2. Defendant No. 3 is
the designated bank for plaintiff for the
purposes of dealing in foreign exchange on its
behalf with Reserve Bank of India, in accordance
with the inter banking arrangement between the
plaintiff bank and Reserve Bank of India signed on
6.9.1993. Defendant No. 4 is the Russian Importer
who had contact with defendant No. 2 and defendant
No. 5 is the Russian consignee. On 26.9.1995 a
contract was entered into between defendant No. 2
and defendant No. 4 for purchase of Indian Long
Grain White Rice, which was required to be
exported to Russia. Plaintiff opened Letter of
Credit with defendant No. 1 Bank on 10.10.1995 for
an amount of Rs.5,035,000.00 and defendant No. 6
deposited the said amount with the plaintiff. It
was further alleged that defendant No. 4 issued
acceptance letter confirming that it has no
objection in accepting the goods shipped against
L.C. dated 10.10.1995. Sum of INR 5,035,000.00
was transferred to the account of defendant No. 6
by the plaintiff. Reserve Bank of India through
letter dated 29.3.1996 sent statement to the
plaintiff up to 5.1.1996 with reference to the
said letter of credit. The plaintiff objected to
the debit of the amount and filed suit claiming
that cause of action had arisen to it against
defendant No. 1 when defendant No. 1 did not comply
with the terms of Letter of Credit and did not
sent shipping documents pertaining to the
plaintiff bank neither within 21 days as per the
Letter of Credit nor within the validity period of
Letter of Credit. It was alleged that cause of
action finally arose on 7.3.1997 when the
defendants claimed that they were not responsible
and that against defendants 2, 4, 5 and 6 cause
of action is alleged to have arisen on 26.9.1996
when defendant No. 1 claimed that documents were
sent by defendant No. 2 to defendant No. 5 and that
defendant No. 5 had retired the goods. The cause
of action also arose when on 19.2.1977 the Customs
Authorities in Moscow informed the plaintiff bank
that Airway bill representing the said goods have
not been handed over by the customs authorities.
3. The suit was resisted by defendant No. 1 who
filed its written statement on 8.12.1998.
Replication to the written statement of defendant
No. 1 was filed by the plaintiff on 3.12.1999. On
the same day an application (IA. No. 12386/99) was
filed by the plaintiff under Order 12 Rule 6 read
with Section 151 of the Code of Civil Procedure
praying that decree be passed forthwith against
defendant No. 1 or the other defendants because of
the alleged admission of defendant No. 1 in its
written statement. Notice of this application was
directed to be issued to the defendants. Notice
could not be served on the defendants for want of
process fee. Accordingly, on 13.7.2000 fresh
notice was directed to be issued, returnable for
11.10.2000. Before this application could be
taken up for consideration or reply could be filed
by the defendants, defendant No. 1 on 25.9.2000
filed an application under Order 6 Rule 17 read
with Section 151 of the Code of Civil Procedure
seeking leave to amend its written statement.
4. Defendant No. 1 alleged that after filing of
the written statement new facts have come into its
knowledge because of which it was necessary to
amend the written statement filed earlier and to
bring to the notice of the Court new facts, which
were absolutely necessary for complete
adjudication on the disputes between the parties.
The new fact, which according to defendant No. 1
came to its knowledge was that the stocks lifted
from Indira Gandhi Airport never reached its
destination due to fraud alleged to have been
committed by defendant No. 2 and in connivance with
defendants 4 and 5. It was prayed that defendant
No. 1 be permitted to add preliminary objections
No. D, E and F and suitably amend the contents of
various paragraphs of its written statement. In
the application, it was also alleged that the
Airway Company, which lifted the stocks from
Indira Gandhi Airport at New Delhi for export to
Moscow had not been imp leaded as a party defendant
admittedly when the case of the plaintiff has been
that the goods exported never reached their
destination. In the application seeking amendment,
the proposed amendments, which defendant No. 1
wanted to make were not quoted. However,
defendant No. 1 filed separately the proposed
amended written statement incorporating the
amendments. The plaintiff vehemently opposed this
application, inter alia, alleging that defendant
No. 1 wants to substitute various paragraphs, which
cannot be permitted. Moreover, in the application
filed under Order 6 Rule 17 CPC precise amendment,
which defendant No. 1 wanted to carry out to the
original written statement filed by it had not
been mentioned. On merits, it was pleaded by the
plaintiff that the suit filed by the plaintiff
against defendant No. 1 is based on I.C.C. Uniform
Customs and Practice for Documentary Credit, 1993
and defendant No. 1 had already admitted that
necessary documents were not collected and
furnished to the plaintiff by it. Having admitted
those facts, defendant No. 1 cannot be permitted to
change the plea of admission made in the earlier
written statement to a plea of denial in the
proposed written statement.
5. Learned Single Judge by the impugned order
dismissed the application observing that defendant
No. 1, who was seeking amendment to its written
statement had failed to assign cogent reasons that
why the pleas, which were sought to be raised and
which were available to it earlier, had not been
raised. Moreover, allowing defendant No. 1 to
amend the written statement will have the effect
of permitting it to convert the plea of admission
into plea of denial, which was not permissible.
This order is under challenge in this appeal.
6. We have considered the submissions made at
the bar and have also been taken through the
entire record.
7. Learned counsel for the plaintiff/respondent
No. 1 tried to support the impugned order by making
similar submissions, which weighed with learned
Single Judge in declining the prayer of defendant
No. 1 to amend the written statement. It was
contended that the application was not in
consonance with the law; precise amendment, which
defendant No. 1 wanted to incorporate to the
original written statement, had not been quoted
verbatim in the application filed under Order 6
Rule 17 C.P.C.; admission had been made by
defendant No. 1 and because of those admissions,
valuable right had accrued to the plaintiff for
which an application under Order 12 Rule 6 C.P.C.
was filed praying for decree against defendant
No. 1 and in order to make the said application
infructuous and to get over the said admission,
defendant No. 1 was seeking to amend its written
statement.
8. Learned counsel for defendant No. 1/
appellant contended that necessity had arisen to
seek amendment after defendant No. 1 came to know
of certain glaring facts, which go to the root of
the case. Defendant No. 1 Bank was not proposing to
change its stand by withdrawing the earlier plea
but had sought permission to add few facts, which
had came to its notice later on. The same does
not amount to changing the plea of admission to a
plea of denial. Defendant No. 1 bank had not
admitted expressly or by necessary implication
that necessary documents were not collected and
furnished to the plaintiff, as wrongly alleged by
the plaintiff. Defendant No. 1 in the earlier
written statement had simply pleaded that it was a
matter of record. It would not amount to an
admission that defendant No. 1 bank had admitted
that necessary documents were not collected and
furnished to the plaintiff.
9.
Having considered the respective submissions
made at the bar, we are of the view that it is a
fit case where interference is called for in the
impugned order passed by learned Single Judge and
defendant No. 1 deserves to be permitted to amend
the written statement.
10. Suit is still at the initial stage. Trial has
not yet commenced. There is also no doubt that
because of the alleged pleas of admission of
defendant No. 1 an application under Order 12 Rule
6 C.P.C. has been filed by the plaintiff, which is
still under consideration. Before we proceed
further precisely it has to be ascertain that
whether any admission was made by defendant No. 1
in the written statement filed earlier, because of
which it can be said that valuable right had
accrued to the plaintiff, which cannot be defeated
by amendment. Defendant No. 1 in the written
statement filed earlier admitted that the
plaintiff bank opened Letter of Credit with
defendant No. 1 on 10.10.1995 and further admitted
that documents were required to be presented
within 21 days of the date of shipping. Defendant
No. 1 also admitted that validity of Letter of
Credit expired on 4.1.1996 and also admitted that
telex dated 28.2.1996 was sent but defendant No. 1
denied its liability to pay the suit amount to the
plaintiff. Defendant No. 1 also denied that it had
failed to do the needful or that the plaintiff
bank was made to suffer on account of the alleged
mistake of defendant No. 1. Defendant No. 1 also
denied that it had admitted any mistake on its
part. It further denied that the plaintiff bank
refunded the cover amount to defendant No. 6 due to
the alleged negligence, mistake or failure of
defendant No. 1 in not sending the documents or not
relying on telex message dated 28.2.1996.
Defendant No. 1 in fact admitted the plea of the
plaintiff that there was a fraud between
defendants 2 and 5 and also admitted the
plaintiff’s case that defendants 4, 5 and 6 were
liable to reimburse the amount to the plaintiff
Bank as the goods had reached their destination.
11.
In case written statement filed by
defendant No. 1 earlier is read as a whole, it
cannot be said that defendant No. 1 at ay point of
time expressly or impliedly admitted that
necessary documents were not collected by it and
furnished to the plaintiff. Therefore, to say
that there was any plea of admission due to which
the plaintiff had acquired valuable right will not
be correct on a careful reading of the written
statement filed by defendant No. 1.
12. It is also a fact that defendant No. 1 in the
application seeking amendment has not quoted the
amendments sought to be raised but has appended to
the application proposed written statement
specifically stating in the application that what
paras are sought to be added as preliminary
objections and in which paragraphs of the written
statement filed earlier amendments are sought to
be incorporated. Though it would have been
appropriate that the proposed amendments ought to
have been separately quoted in the application,
but the purpose of law can be said to have been
duly served by appending to the application the
proposed amended written statement.
13.
The decision of Supreme Court in Heera Lal v.
Kalyan Mal and others relied
upon by learned counsel for plaintiff/respondent
No. 1 would not be applicable to the facts and
circumstances of the case. There can be no dispute
with the proposition that when amendment sought
for in the written statement is of a nature as to
displace the plaintiff’s case, it cannot be
allowed in view of ratio of the decision of
Supreme Court in M/s. Modi Spinning & Weaving Mills
Co. Ltd. and another v. M/s. Ladha Ram & Co. , but before the said principle is
applied to the facts of the case, it must be
ensured that there is an admission made by
defendant in the written statement, which if
allowed, will have the effect of displacing the
plaintiff’s case. In the instant case, defendant
No. 1 is not deleting the pleas, which had already
been raised in the earlier written statement.
Defendant No. 1 is expanding its pleas, which it
had taken in various paragraphs. No part of the
earlier written statement was sought to be
deleted. Addition of the pleas can be said to be
an elaboration to the earlier written statement
with complete facts and figures because of the
information, which defendant No. 1 is stated to be
now possessed with respect to the transaction in
question. The proposed amendments rather go to
elaborate the alleged fraud, alleged to have been
committed by the other defendants, as has been
pleaded by plaintiff/respondent No. 1 in its
plaint.
14.
The principle, which would apply, in the
instant case, would be as enunciated in
B.K. Narayana Pillai v. Parmeshwaran Pillai and
another that Courts are more
generous in allowing the amendment of the written
statement as the question of prejudice is less
likely to operate in that event. The defendant has
a right to take alternative plea in defense which,
however, is subject to an exception that by the
proposed amendment the other side should not be
subjected to injustice and that any admission made
in favor of the plaintiff is not withdrawn. All
amendments of the pleadings should be allowed,
which are necessary for determination of the real
controversies in the suit provided the proposed
amendment does not alter or substitute a new cause
of action on the basis of which the original lis
was raised or defense taken. Inconsistent and
contradictory allegations in negation to the
admitted position of facts or mutually destructive
allegations of facts should not be allowed to be
incorporated by means of amendment of the
pleadings.
15.
The proposed amendment, in our view, are
necessary for complete adjudication of the rights
of the parties and in order to fix liability on
any of the defendants, if any, liable to the
plaintiff for the amount claimed in the suit.
Reading of the written statement has to be
purposeful and meaningful, which has to be read as
a whole. On a careful reading of the written
statement, as originally filed by defendant No. 1,
it cannot be said that defendant No. 1 admitted its
liability or that it admitted that it had
neglected or failed to discharge its obligation.
As such, it cannot be said that there is an
admission because of which a valuable right had
accrued to the plaintiff. The mere fact that an
application under Order 12 Rule 6 CPC was filed to
which reply had not yet been filed by defendant
No. 1, that by moving an application it cannot be
said that seeking amendment in such circumstance
would defeat the right of the plaintiff to seek
adjudication on the application. In case
defendant No. 1 is otherwise entitled to seek
amendment, it would be entitled to seek indulgence
of the Court irrespective of the fact that an
application under Order 12 Rule 6 C.P.C. was
pending.
16.
Thus we are of the view that the impugned
order is liable to be set aside. As cogent reasons
have been assigned by defendant No. 1 in seeking
amendment that new fact came to its knowledge,
which fact is not disputed on behalf of the
plaintiff. Defendant No. 1 is entitled to carry out
the proposed amendment, which do not change the
nature of defense.
17.
Consequently, the appeal is allowed. The
impugned order is set aside. Application under
Order 6 Rule 17 C.P.C. (IA.9529/2000) of defendant
No. 1/appellant is allowed. The proposed amended
written statement is directed to be taken on
record. Parties are left to bear their respective
costs.
