Uco Bank vs Poly Fab Industries Private Ltd. … on 24 September, 1990

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Delhi High Court
Uco Bank vs Poly Fab Industries Private Ltd. … on 24 September, 1990
Equivalent citations: ILR 1991 Delhi 352, 1990 RLR 529
Author: P Bahri
Bench: P Bahri

JUDGMENT

P.K. Bahri, J.

(1) This is an application seeking amendment of the plaint and for adding one more defendant in the suit. The plaintiff had brought this suit for recovery of Rs. 16,83,770.59 P. against five defendants under Order xxxvii of the Code of Civil Procedure. One of the amendments sought is that the plaintiff now wants that the suit be treated as a regular suit and would like to delete the pleas taken with regard to bringing this suit within the four corners of Order xxxvII. Counsel for the defendants have no objection to allowing this amendment.

(2) Another amendment sought by the plaintiff is that now Mr. A. S. Kochhar has succeeded to Mr. J. P. Vohra and is the Manager, Principal Officer and constituted attorn’ey of the plaintiff and the original suit was signed, verified and instituted on behalf of ‘the plaintiff by Mr. J.P. Vohra and thus, the amended plaint be allowed to be signed, verified and instituted by Mr. A. S. Kochhar. There cannot be any objection to this particular amendment. The amended plaint obviously can be signed, verified and instituted by any authorised person on behalf of the plaintiff bank. Defendant No. 1 is the private limited company whereas defendants 2 to 5 have been joined as directors of defendant No. I and they have been also sought to be made personally liable for the amount in question as they had allegedly executed deeds of guarantee. Mr. S. K. Saboo, who has not been imp leaded as one of the defendants, is also one of the directors of defendant No. 1-company and the plea is taken that he had also executed continuing letters of guarantee in the similar manner as have been executed by other directors and thus, he is also personally and individually liable for the amount due from defendant No. 1 and by inadvertent mistake he could not be added as a defendant in the original plaint. This amendment is strongly opposed by all the defenlants, so also by Mr. S. K. Saboo. It has been argued before me that the claim against Mr. S. K. Saboo has become time barred and thus no amendment of the plaint should be allowed to implead Mr. S. K. Saboo as one of the defendants.

(3) The learned counsel for the plaintiff has on the other hand, contended that the personal and individual liability of Mr. S. K. Saboo continues in view of the fad that he had executed a continuing letter of guarantee and thus, the claim in the suit is not barred by limitation against Shri S. K. Saboo. It would be a disputed question of fact to be decided on merits whether Shri S. K. Saboo has executed continuing letter of guarantee or not. it assuming for the sake of arguments it is proved that .he had executed such a document then perhaps the suit against Shri S. K. Saboo would not be barred even on the date this application seeking amendment of the plaint is filed. It is true that if claim against Shri S. K. Saboo is to be deemed to be time barred on the date this application for amendment has been filed to implead him as a defendant then obviously the vested rights which have accrued to him by lapse of time should not be allowed to be divested by allowing the amendment of the plaint. However, in any view. the interests of shri S. K. Saboo could be well protected by making this particular amendment effective from the date of the filing of the application seeking amendment. Such a course could be legally adopted by this court is evident from the law laid down by a Division Bench of this Court in Jawaharlal Mamtain’ v. Bhgwchand Motumal Mamtani & Another. 2nd 1981(1) Delhi 1(1). Tt was laid down in the judgment of Prakash Narain, A.C.J., that the court in considerin’g an application for amendment is not to act in the vacuum and must exercise its power by adopting all the rules of judicial discretion. The power, however, cannot be restricted to only a power to award costs. In appropriate cases keeping the plea of limitation in view of other similar aspects in veiw, the court may well put the plaintiff or the defendant. Whoever is seeking amendment, to such terms as may be just including laying down that the] amendment will be effective only from a particular date. In the Judgment of S. Ranganathan, J. (as His Lordship then was), the same observation was made that it could nut be laid down as a matter of principle and invariable rule that an amendment once ordered should relate back to the date of the original pleadings and the court lacks the power even in appropriate cases to restrict the scope of amendment sought for. So, in the present case it is in the interest of justice that the claim against the proposed defendant No. 6 would be deemed to have been brought on the date of filing of the amendment application and thus, the effect of this amendment is restricted. In case ultimately it is proved that no continuing guarantee has been executed by Shri S. K. Saboo then obviously the claim against him making him personally and individually liable for the amount due from defendant No. 1 would be deemed to be time barred on the date of the filing of the amendment application. I allow the amendment restricting the effect of the amendment with regard to impleading Shri S. K. Saboo as defendant No. 6 to the date of the filing of this application for amendment.

(4) The other amendment sought by the plaintiff is in paras 4,5,6,13,14 and 16 of the plaint. What is sought to be imp leaded by way of amendment in these paras are the facts as to when the initial transactions commenced between defendants and the plaintiff-Bank. It is sought to be pleaded that defendant No. 1 through its directors had opened the current account January 1970 and had obtained various credit facilities like Cash Credit Hypothecation, Term Loan and Bill Purchase facilities and had executed various documents, of which details are now sought to be furnished, on February 15. 1971 and confirmation of liabilities made on August 24, 1973 and availment of Cash Credit facility in December 1975 and execution of documents in that. respect and confirmation of balance dated December 25, 1975 and having executed fresh documents on April 20, 1976 and on February 4, 1977 and execution of continuing letters of guarantee on that date by defendants 2, 5 and 6 and execution of renewal documents on February 2, 1980 and a ailment of Bill Purchase facility and the fresh documents on April 14, 1984 of , details arc given in the application seeking amendment of the plaint. Counsel for the defendants have strongly opposed this amendment arguing that the basic structure of the suit is being transformed by seeking the .amendment of the plaint. It is also argued on behalf of defendant No. 5 that iff fact, by amendment the plaintiff is only pleading the evidence which is required to be led in proving the case and such amendment should not be allowed.

(5) Now coming to the main plaint, it is averred in para 5 that the current account in the name of defendant No. I was obtained by its directors in January 1970 and that defendants have been obtaining various credit facilities styled as Cash Credit against Hypothecation, Cash Credit against Pledged Documentary Bill Purchase and Term Loan’s which were renewed/increased from time to time at the request of the defendants and the documents have been executed at various times and renewed from time to time. So, it cannot be said that any new case is being set up by the plaintiff-Bank by frying to now give detailed facts regarding the various facilities availed of by the defendants from time to time and the various documents executed in that connection from time to time. The documents which were executed in 1984 were allayed to have been executed as per averment made in’ para 6 of the plaint in consideration of the subsisting advances already made to the defendants under the Cash Credit Units against Hypothecation Stock and in continuation of the liability. So, it cannot be held that the plaintiff by seeking amendment with a view to supply the detailed facts regarding the continuing transactions is trying to either change the nature of the case or is trying to fill up any lacuria in the plaint.

(6) Mr. S. S. Gautam, counsel appearing for some of the defendants, has contended that by amendment of the plaint the plaintiff is trying to withdraw some admissions already made in the plaint. He has pointed out that in the niai’n* n’i -ie’-wrial liability of directors is being sought to be set up. This is not correct. In para 4 of the plaint it is clearly mentioned that! defendants 2 to 5 are personally liable for payment of the amount due as guarantors. A similar oleo is sought to be taken against the proposed new defendant No. 6. So, it cannot, be said that the plaintiff is seeking to withdraw any admission already made by amendment of the plaint. So, the ratio laid down in Jagan Nath (deceased) through L.Rs. Vs Chander Bhan & Others, 36(1988) Delhi Law Times 267,(2) is not applicable which lays down that by amendment of the pleadings an admission already made should not normally be allowed to be withdrawn.

(7) Mr. Gautam has then made reference to Kanailal Das & Another v. Jiban Kanai Das & Another, Only general principles which have to be kept in view for deciding the application for amendment have been emphasised in this judgment in para 5 which are to the following effect : The principles established by judicial decisions in res pect of amendment of plaint are as follows :- (I)All amendments will be generally permissible when they are necessary for determination of the real controversy in the suit. (ii) All the same, substitution of one cause of action or the nature of the claim for another in the original plaint or change of the subject-matter of or controversy in the suit is not permissible. (iii) Introduction by amendment of inconsistent or contradictory allegations in negation of the admitted position on facts, or mutually destructive allegations of facts are also impermissible though inconsistent pleas on the admitted position can be introduced by way of amendment. (iv) In general, the amendment should not came prejudice to the other side which cannot be compensated in costs. (v) Amendment of a claim or relief which is barred by limitation when the amendment is right to be made should not be allowed to defeat a legal right accrued except when such consideration 358 is outweighed by the special circumstances of the case.” None of these principles come in the way of allowing the amendment application in the present case. He has also made reference to Haji Mohammed Ishaq Wd. S. K. Mohammed and Others v. Mohamed lqbal and Mohamed Ali & Company, In the cited case, if the amendment had been allowed it would have completely changed the nature of the original defense taken in the written statement and an entirely New plea was sought to be taken by way of amendment which would have required leading of additional evidence. The High Court had rejected the amendment application and the Supreme Court affirmed the same. Nothing said in this judgment is of any help in deciding the application seeking amendment in the present case.

(8) In Pironda Hongonda Patil v. Kalgonda Shidgonda Patil & Others, , the Supreme Court has laid down that all amendments sought to be allowed which satisfy the two conditions : (a) not working injustice to the other side, and (b) of being necessary for the purpose of determining the ideal questions in controversy between’ the parties. It was held that amendments should be refused only where the other party cannot be placed in the same position as if the pleading had been originally correct, but the amendment would cause him an injury which could not be compensated in costs. In this judgment also it has been laid down that if a particular cause of action has become barred by time since the institution of the suit, the amendment should not be allowed. In the present case as far as newly added defendant i concerned. I have already restricted the amendment to be effective from the dale of the filing of the application for amendment. As far as the other amendments are concerned, they do not lead to net up any new case or change in the nature of the case. These facts which are now sought to be given pertain to the transactions which occurred between the parties prior to the execution of the documents in 1984 and it is the case set up in the original Ltd. & others plaint itself that these documents in i984 were executed in consideration of previous liability of the defendants. Hence, by furnishing the details of the previous trisections to which a reference already stands made but not in a detailed manner in the original plaint, the plaintiff is not trying to set up any new case. So, I hold that amendment, sought by the plaintiff in this connection is necessary for deciding the question in controversy which may arise in this suit between the parties. It is to be clarified at this stage that defendants are yet to file their written statements.

(9) I allow the application in above terms The plaintiff shall pay Rs. 1,000.00 as costs to be equally divided amongst the defendants.

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