Madras High Court
M/S. Surana Vijay Fianance vs D.B.Prakash Chand Jain
Author: S. Palanivelu
Bench: S. Palanivelu
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : .12.2011
CORAM
THE HONOURABLE MR. JUSTICE S. PALANIVELU
Application No.988 of 2011
in C.S.No.407 of 2004
M/s. Surana Vijay Fianance
Rep.by its Proprietor
Heerachand Surana ... Applicant/Plaintiff
vs.
1.D.B.Prakash Chand Jain
2.M/s.Khade Bapat Kabe Sinha &
Associates
3.Industrial Development Bank of India
Rep.by the Deputy General Manager ... Respondents/Defendants
Application is filed under Order VI Rules 17 of CPC read with Order XIV Rule 8 of Original Side Rules.
For Applicant : Mr.A.R.L. Sundaresan
Senior Counsel for
M/s. Vedavallikumar
For Respondents : Mr.S.R. Rajagopal [for R1]
O R D E R
1.The following are the allegations along with proposed pleadings to be introduced in the plaint:
1.(a) On coming to know that the property M/s. Kangappa Paper Mills Ltd., situate at Vadakuthu Village in Cuddalore District were being auctioned by the second respondent in pursuance of proceedings in O.A.No.179/2001 on the file of DRT 1, Mumbai, the applicant was interested in purchasing the same and therefore made a private offer on 16.6.2003 for a sum of rs.3,50,00,000/- with EMD of Rs.35,00,000/- by way of 4 Demand Drafts all dated 11.6.2003 drawn on Dena Bank, G.T. Branch, Chennai. The applicant inspected the property on 14.7.2003 and obtained tender application. He submitted a close tender for a sum of Rs.4,58,50,000/- on 22.7.2003 along with EMD of Rs.51,00,000/- by way of 8 Demand Drafts all dated 18.07.2003 drawn on the above said bank. His bid was the highest one. The second defendant after opening the tenders allowed five bidders to raise their offers over and above the offer of the applicant. The first respondent made the highest offer for Rs.5,75,00,000/-.
1.(b) The first respondent approached the applicant and persuaded to join with him as partner in the particular venture of acquiring the estate of M/s. Gangappa Paper Mills and requested him to invest with promise to give 25% of sale proceeds on the sale of the movables as scrap and sale of immovable property as plots in real estate as working partner and further agreed that in the event of the 1st respondent no successful in the auction then the sum invested by the applicant would be returned with interest at 24% per annum. In pursuance to the above, the applicant handed over a sum of Rs.50,00,000/- by way of 7 Demand Drafts which includes 6 DDs dated18.07.2003 and 1 DD dated 26.07.2003 all drawn on the above said bank. The further understanding was that on the first respondent succeeding in the auction the applicant would be taken as working partner and in addition to the disposal of the movable assets as stated above, the land was to be plotted out and sold as real estate and the petitioner was entitled to 25% of sale proceeds.
1.(c) One T.G.Krishnamurthy, Chairman of M/s. Gangappa Paper Mills obtained a direction from the Honourable Supreme Court and another auction was fixed on 11.8.2003. The applicant was present in the said auction but he did not participate the bidding as per the undertaking. One Mrs. Janaki moved DRT-I, Mumbai to stay the auction held on 11.8.2003. Because of that intervention the auction was scheduled to be held on 8.9.2003. On 8.9.2003 also the auction was held and the applicant though present did not participate in the bidding as per the understanding. In this auction, the offer of the first respondent was the highest one of Rs.6.02 crores.
1.(d) Before concluding the sale T.G.Krishnamurthy got stay order from the Supreme Court with offer to purchase the properties for the same sum of Rs.6.02 crores. The Supreme Court passed a direction to T.G.Krishnamurthy to pay the balance of Rs.4.51 crores apart from the already deposited amount of Rs.1,51 crores within 90 days. Due to the default committed by T.G.Krishnamurthy, the sale came to be confirmed in favour of the the first respondent. The applicant had been then and there paying amounts to first respondent by DDs. The sale is confirmed and the sale certificate is issued in the name of 1st respondent and hence the applicant has got cause of action to sue the first respondent for specific performance of the agreement for payment of 25% of the sale proceeds. Hence, it has become necessary for the applicant to include the relief for specific performance and also make necessary averments in the plaint setting out the subsequent happenings after filing of the suit in C.S. number, entitling the plaintiff/applicant for the relief of specific performance of contract. The reliefs sought now were not available at the time of filing the above suit and are available due to the subsequent events. The amendment now sought for are essential to decide the controversy and dispute between the parties in a comprehensive. The following are the pleadings and the additional relief of mandate injunction to be introduced in the plaint:
SCHEDULE A. The address of the plaintiff in the Short cause title, Long cause title and statement of address may be changed from No. 10, Anandan Street, North Usman Road, T. Nagar, Chennai 17 to No.72, Old No. 33, I st Floor, Giri Road, T. Nagar, Chennai 17.
B. The following para may be inserted in page no.2 para No. 4 line 2 after "in the business of finance."
The Plaintiff state that on coming to know that the property of M/s Gangappa paper mills Ltd. Situate at Vadakuthu village in Cuddalore dist. Was being auctioned by the second defendant in pursuance of proceedings in O.A No. 179/ 2001 on the file of DRT 1, Mumbai, the plaintiff was interested in purchasing the same and therefore made a private offer dated 16.06.2003 for a sum of Rs. 3,50,00,000/- with EMD of Rs. 35,00,000 by way of 4DDs all dated 11.06.2003 drawn Dena Bank, G.T Branch, Chennai in favour of IDBI Mumbai the creditor bank but the same was later returned on the ground that public auction will be held by the DRT 1, Mumbai after wide publication in leading newspaper. The plaintiff further stated that subsequently paper publication was effected in one issue of Economic Times dated 5.07.2003 for the sale of the property of M/s. Gangappa paper mills Ltd. Fixing 14.07.2003 for inspection of the property and calling for sealed tenders. The plaintiff further stated that he inspected the property on 14.07.2003 and obtained tender application. The plaintiff further stated that he has submitted a closed tender for a sum of Rs. 4,58,50,000/- on 22.07.2003 along with EMD of Rs. 51,00,000/- by way of 8 DDs all dated 18.07.2003 drawn on Dena Bank, G.D Branch, Chennai. The plaintiff further stated that he has cancelled the earlier 4 DDs all dated 11.06.2003 for Rs.35,00,000/- and took the above 8 DDs all dated 18.07.2003 from his account.
C. The following para may be inserted in page No. 3 para No.5 line 2 after "participated".
The plaintiff further stated that tender were opened on 23.07.2003 and there were totally 5 tenders including the one submitted by him and the first defendant herein. The plaintiff further stated that his bid for Rs. 4,58,50,000/- was the highest one and the second defendant after opening the tenders allowed the five bidders inter se to raise their offer over and above his offer. The plaintiff further stated that there after the first defendant made the highest offer for Rs. 5,75,00,000/- and he deposited a sum of Rs.50,00,000/- immediately and was directed to pay a sum of Rs.93,75,000/- towards the 25% of the sale amount within 7 days.
D. The following para may be added in page No.3 para No.5 line 14 after "interest @ 24% per annum".
The plaintiff further stated that he took another 2 DD s each for a sum of Rs.5,00,000/- both dated 26.07.2003 Dena Bank, P.D Branch Chennai as per the request by the first defendant. The plaintiff further stated that it was pursuant to the above understanding reached between him and the first defendant that he handed over a sum of Rs.50,00,000/- by way of 7 Demand Draft's which include 6 DD s dated 18.07.2003 and 1 DD dated 26.07.2003 all drawn Dena Bank, P.D Branch Chennai taken by him to participate in the bid which was treated as his contribution towards the partnership capital funds. With the said amount, the first defendant deposited Rs.95,00,000/- on 31.07.2003 with the second defendant. The understanding was that on the first defendant succeeding in the auction, that the plaintiff would be taken in as working partner. All the movable assets and machineries of the company were to be sold as scrap and the land on which M/s Gangappa paper mills was situate was to be plotted out and a sold as real estate and the plaintiff was entitled to the 25% of sale proceeds and on the above promise, the plaintiff handed over the above 7 DD s on totalling to a sum of Rs.50,00,000/- to the first defendant.
E. The following para may be inserted in page No. 3 para No. 6 line 2 after " held on 23.07.2003 did not fructify"
Due to interim orders obtained by chairman Mr. T.G Krishnamurthy as per the directions by the Hon'ble Supreme Court and another auction was fixed on 11.08.2003 as per the notice dated 8.08.2003 by the second defendant.
F. The following para may be inserted in page No.3 para6 line 3 after "Held on 1.08.2003".
The plaintiff further stated that he was present in the auction on 11.08.2003 but did not participate in the bidding as per the understanding with the first defendant and the first defendant as increased his offer from Rs.5,75,00,000/- to Rs.5,86,00,000/- which was again the highest offer and another Rs.5,00,000/- was deposited on 11.08.2003 by the first defendant through his Counsel Mr. Khan through a Demand Draft dated 26.07.2003 provided by the plaintiff to match the 25% of the revised offer. Thus, the plaintiff had paid totally a sum of Rs.55,00,000/- to the first defendant by way of 8 DD s in pursuance of the above agreement and the second defendant forwarded the 15 Demand Drafts given by the 1st defendant for the value of Rs.1,50,00,000/- which included the 8 Demand Drafts provided by the plaintiff for the total value of Rs.55,00,000/- under a covering letter dated 11.08.2003 to the 3rd defendant for being kept in a fixed deposit.
G. The following para may be added in page No. 4 para 6 line 14 after " Thus the plaintiff fully performed his part of the contract".
The first defendant was the highest bidder in the auction held on 11.08.2003 by the second defendant at the instance to the third defendant in respect of the assets of Gangappa paper mills. The plaintiff further stated that he has cancelled the remaining 2 DD s both dated 18.07.2003 for the sum of Rs.5,00,000/- and Rs.1,00,000/- with his bank and the amount where credited into his account on 14.08.2003 by his bank. The plaintiff further stated that one of the bidder Mrs. Janaki as filed on application before DRT 1, Mumbai to stay the auction sale held on 11.08.2003 on the ground that the notice dated 8.08.2003 fixing the auction on 11.08.2003 was received by her very late and no reasonable time was granted to participate in the auction held on 11.08.2003. The plaintiff further stated that DRT 1, Mumbai has therefore ordered for a fresh auction sale to be held on 8.09.2003 after sufficient notice to all the 5 bidders including the plaintiff and the first defendant. The plaintiff further stated that the second defendant has sent the fresh notice dated 25.08.2003 to all the five bidders including the plaintiff and the first defendant informing about the fixing the auction sale to be held on 8.09.2003. The plaintiff further stated that thereafter, the auction was again conducted on 8.09.2003 as per direction DRT 1, Mumbai. The plaintiff further stated that he was again present in the auction on 18.09.2003 but did not participate in the bidding as per the understanding with the first defendant and the 1st defendant has increased his offer from 5.86 crores to Rs 6.02 crores which was again the highest offer and he was directed to deposit another Rs.50,000/- to make up the balance of 25% over and above the amounts he had already paid including from the amounts paid by the plaintiff.
H. The following para may be inserted in page No. 4 para 7 line 7 after "the Supreme Court Challenging the sale."
and got stay orders on 10.9.2003 with offer to purchase the property for the same sum of Rs.6.02 crores offered by the first defendant and subsequently deposited 1.51 crores before the Hon'ble Supreme Court to prove his bonafides.
I. The following para may be deleted in page No.4 para 7 line 10 after " the balance within 90 days ".
The plaintiff does not have the certified copy order of the Supreme Court. The said Shri T.G. Krishnamurthy is about to make the deposit in which event defendants 2 and 3 would refund the sums deposited by the first defendant to the first defendant.
J. The following para may be deleted in page no.5 para 8 line 11 after " honour his commitments ".
Hence the plaintiff is apprehensive that the first defendant would cheat the plaintiff after obtaining refund from the third defendant . The plaintiff has been informed that Shri. T.G.Krishnamurthy is about to comply with the Supreme Courts order. He has been given a certain time limit. The compliance can take place at any moment . Thereafter the refund of the sums to the first defendant by the defendant no .3 can take place at any time. Should that happen, the plaintiff will suffer irreparable loss and hardship.
K. The following para may be deleted in page No.5 para 8 line 18 of the "wants a performance of this agreement."
In view of the evasive conduct adopted by the 1st defendant, the plaintiff is constrained to approach this Hon'ble Court by filing the above suit for relief. The second and third defendatns have be arrayed as proper parties and relief has been sought against the third defendant for attachments.
L. The following para may be add in Page No.5 para 8 line 22 after "third defendant for attachment"
Subsequent to the filing of the suit due to the default committed by the said Mr.T.G. Krishnamurthy of Gangappa Paper Mills in not complying with the order passed by the Hon'ble Supreme Court of India, the sale was confined in favour of the first defendant. It was in those circumstance, the plaint filed O.A.No.644 and 645 of 2004 to restrain the first defendant from dealing with the movables and the landed property and on 11.8.2004, the counsel for the first defendant gave an undertaking before this Hon'ble Court that the first defendant will not alienate the properties. Only after the said order, the sale certificate came to be issued by the Debts Recovery Tribunal, Mumbai to the first defendant on 26.10.2004 but the said fact of confirmation of sale on 26.10.2004 on the first defendant has come to his knowledge only on receipt of the written statement and the documents filed by the first defendant on 13.9.2010 before this Hon'ble Court. The plaintiff further state that the first defendant has sold the movables contrary to the undertaking and only the immovable property is intact now. By virtue of the undertaking given by the first defendant and recorded and accordingly ordered by this Hon'ble Court, he is not in a position to deal with or alienate the immovable properties. The plaintiff further stated that now the sale is confirmed and sale certificate is issued in the name of the first defendant, the plaintiff has got the cause of action to sue the defendant for specific performance of the agreement for payment of the 25% of the sale proceeds in the properties in respect of which sale certificate came to be issued by the Debts Recovery Tribunal I, Mumbai to the first defendant. The plaintiff further stated that there is no date fixed for the performance in the agreement entered into between the plaintiff and 1st defendant as set out above. The agreement becomes enforceable only on and from the date when the 1st defendant is in a position to plot out the land area into plots and offer it for sale to third parties. In this case, the said situation as not yet arisen by virtue of the undertaking given by the first defendant before this Hon'ble Court. However, by filing of the written statement, the first defendant has categorically made known it is refusal for the performance of the contract entered into with the plaintiff.
M. The entire para 9 in page No.5 may be deleted The cause of action for the suit arose at Chennai on 18.07.2003 when the plaintiff took 8 demand drafts for total of Rs. 51 lakhs, in the first week of August 2003 when the plaintiff and the first defendant agreed on certain terms at Chennai, on 18.11.2003 when the plaintiff handed over drafts for Rs.55 lakhs to the first defendant, the first defendant handed over the same to the third defendant on 11.02.2004 when the Hon'ble Supreme Court disposed of Civil Appeal No.1248/2004, subsequently when the first defendant is attempting to evade his obligations towards the plaintiff, all within the jurisdiction of this Hon'ble Court.
And amended as The cause of action for the above suit arose on 11.06.2003 when the plaintiff took 4DDs towards EMD and on 16.06.2003 when the plaintiff made a private offer and on 05.07.2003 when paper publication was effected in one issue of Economic Times for the sale of the property and on 14.07.2003 when the plaintiff inspected the property and on 22.07.2003 when the plaintiff has submitted a closed tender with EMD of Rs.51,00,000/- and on 23.07.2003 when the tenders were opened and the did by the plaintiff was the highest one and on the same date when the 1st defendant has made the highest offer on inter se open auction and deposited a sum of Rs.50,00,000/- immediately on the same date and subsequently when the first defendant came in contact with the plaintiff and persuaded him to join with him as a partner in this particular venture of bidding for the assets of M/s.Gangappa Paper Mills. With offer to pay 25% of the sale proceeds and on 26.07.2003 when the plaintiff took another 2DDs as per the request by the first defendant deposited the Rs.95,00,000/- with the second defendant which included the DD of the plaintiff for a sum of Rs.50 Lakhs and on 11.08.2003 when another auction was fixed and when the first defendant has increased his offer and another Rs.5,00,000/- was deposited by the first defendant through his Counsel Mr.Khan through a Demand Draft dated 26.07.2003 provided by the plaintiff and on 08.09.2003 the auction was again conducted as per directions of DRT-1, Mumbai when the 1st defendant has increased his offer from 5.86 crores to Rs.6.02 crores which was again the highest offer and on 10.09.2003 when T.C.Krishnamurthy of Gangappa Paper Mills filed application before the Supreme Court challenging the sale and got stay orders with offer to purchase the property for the same sum of Rs.6.02 crores offered by the first defendant and subsequently deposited 1.51 crores before the Hon'ble Supreme Court to prove his bonafides and on 20.02.2004 when the Supreme Court has passed order directing cancellation of the sale if Shri T.K.krishnamurthy paid the balance within 90 days and on 19.05.2004 when Mr. T.G.Krishnamurthy of Gangappa paper Mills has failed to pay the balance amount as per the Order passed by the Hon'ble Supreme Court and on 30.06.2004 when the sale was confirmed in favour of the 1st defendant and on 11.08.2004 the Counsel for the 1st defendant gave an undertaking before this Hon'ble Court that the 1st defendant will not alienate the properties and on 26.10.2004 the sale certificate came to be issued by the Debts Recovery Tribunal, Mumbai to the 1st defendant and on 13.09.2010 when the above said fact of confirmation of sale on 26.10.2004 on the first defendant has come to the knowledge of the plaintiff and on 13.09.2010 when the first defendant has categorically made known its refusal for the performance of the contract entered into with the plaintiff all within the jurisdiction of this Hon'ble Court.
N. The entire para 10 page No.5 may be deleted The plaintiff values the suit for the purpose of Court Fee and Jurisdiction at Rs.64,90,000/- and pays a court fee of Rs.68,425/- Under section 22 of the Tamil Nadu Court Fee and Suit Valuation Act.
And amended as The suit for the purpose of Court Fee and Jurisdiction for the prayer a (i) at Rs.64,90,000/- being the presently estimated amount from the sale of the 25% of schedule property in the form of plots and pays a Court fees of Rs.68,425/- under Sec.27(c) of the T.N Court Fees and suit Valuation Act, 1955 read with Appendix 1A of High Court Fees Rules and undertakes to pay deficit court fee if any in the event of the sale proceeds being higher than the estimated amount and the alternate prayer a (ii) is also of the same value of Rs.64,90,000/- and court fee paid accordingly under Sec.22 of the T.N. Court Fees and Suit Valuation Act, 1955 read with Appendix 1A of High Court Fees Rules.
O. The following may be inserted in page No.6 in prayer (a) before "directing the defendant "
for a mandatory injunction directing the first defendant to plot out the entire schedule property into saleable plots, offer such plots for sale to third parties and sell the same and to pay 25% of the sale proceeds from such sale to the plaintiff or in the alternate P. The following may be inserted in page No.6 immediately after verification of plaint averments.
SCHEDULE Various extent of land comprised in various Survey Numbers situated in Vadakuthu village, Panrutti Taluk, South Arcot District, with particulars totalling to 42 Acres and 99 cents.
PART II
1. All that piece and parcel of land of an extent of 0.29 acre in Survey No.365/1 in Vadakuthu Village, Panrutti Taluka, South Arcor District, bounded on the South by the land of Siva prakasam and Viruppalingam, East and North by the land already purchased by the company, North by the land Ramamurthy and West by 0.07 acre of land owned by Narayanswamy and his wife Ranjithammal, within the registration Sub-District of Kurinjipadi in the Registration District of Chidambaram.
2. All that piece and parcel of land of an extent of 0.38 acre in S.No.364/9 and 0.28 acre in S.No.364/12, totaling to an extent of 0.66 acre in Vadukuthu village, panrutii Taluk, South Arcort District, in the State of Tamil Nadu within the Sub-Registration District of Kurinjipadi District of Chidambaram.
3.All that piece and parcel of land of an extent of 0.26 = acre out of the total extent of 0.08 acre in R.S.No.359/17 in Vadakuthu Village, Panrutti Taluka, South Arcor District, bounded on the North and West by the land owned by the company and South and East by the land owned by Ramamurthy Samuttiar, in the State of Tamil Nadu within the Sub- Registration on District of Kurinjipadi District of Chidambaram.
4.All that piece and parcel of land of an extent of 0.24 acre out of the total extent of 0.48 acre in R.S.No.364/6 in Vadakuthu Village, Panrutti Taluka, South Arcor District, bounded on the North, West and East by the land owned by the company and South by the land owned by Appavu Samuttiar, within the Sup Registration District of Kurinjipadi District of Chidambaram.
5.All that piece and parcel of land of an extent of 0.96 acre in S.No.360/1 Vadakuthu Village, Panrutti Taluka, South Arcor District, within the Sup Registration District of Kurinjipadi District of Chidambaram.
6.All piece and parcel of land of an extent of 0.07 acre out of the total extent of 0.36 acre in R.S.No.365/1 in Vadakuthu Village, Panrutti Taluka, South Arcor District, bounded on the East and North by the land owned by the company and Wast by the land owned by Viruthalinga Samuttiar, within the Sup Registration District of Kurinjipadi District of Chidambaram.
7.All that piece and parcel of land of an extent of 0.97 acre being North portion out of the total extent of 1.26 acres in R.S.No.360/4 in Vadakuthu Village, Panrutti Taluka, South Arcor District, bounded on the North and West by the land owned by the company, and East by the land owned by Company and Sigamani Samuttiar and South by the remaining 0.29 acre in R.S.360/4 owned by Thamburaja Samuttiar 0.29 others, within the Sup Registration District of Kurinjipadi District of Chidambaram.
8.All that piece and parcel of land of an extent of 0.26 = acre out of the total extent of 0.08 acre in R.S.No. 359/17 in Vadakuthu Village, Panrutii Taluk, South Arcort District, bounded on the North by the land owned by Venkatesan and Kaliamurthy, West and South by the land owned by the company and East by the Narayasamy padyachi, in the Sub Registration District of Kurinjipadi District of Chidambaram.
9.All that piece and parcel of land of an extent of 0.35 acre, being undivided half share out of a total extent of 0.07 acre in S.No.358/11, 0.20 = acre, being undivided half share out of a total extent of 0.41 acre in S.No.360/2 and 0.20 acre, being undivided half share out of a total extent of 0.40 acre in S.No.360/5 in the Sub Registration District of Kurinjipadi District of Chidambaram.
10.All that piece and parcel of land of an extent of 0.35 acre, being undivided half share out of a total extent of 0.07 acre in S.No.358/11, 0.20 = acre, being undivided half share out of a total extent of 0.41 acre in S.No.360/2 and 0.20 acre, being undivided half share out of a total extent of 0.40 acre in the Survey No.360/5 Arcot District, within the Registration Sub - District of Kurinjipadi, in the Registration District of Chidambaram.
Descriptions of various land in various Survey Numbers situated in the above said village totalling to 5.23 Acres Grand total : Part I + Part II = 48.22 Acres.
VERIFICATION I, Heera Chand Surana, the proprietor of the plaintiff concern above named, do hereby state and verify that what is stated in the schedule is true to the best of my knowledge and I believe the same to be true.
Dated at Chennai on this 19th day of April 2004.
PLAINTIFF P. The entire memo of valuration in page No.6 may be deleted MEMO OF VALUATION Value of the suit Rs.64,90,000/-
Court fee paid under Sec.22
of Tamilnadu Court Fees and
Suit Valuation Act. Rs. 68,425/-"
2. In the counter filed by the 1st respondent/1st defendant it is averred as follows:
2.(a) This application is not maintainable either in law or in facts and is liable to be dismissed, that the allegations contained in the affidavit filed in support of the application are almost all a verbatim, repetition of the plaint, that in the written statement this defendant has in detail traversed into the various allegations made by the applicant and has demonstrated as to how the same is false, that in the affidavit the applicant has admitted that he was aware of the possibility of the sale being confirmed in this defendant's favour and that the sale was confirmed in this defendant's favour and about the issuance of ceritificate by the DRT in his favour, that under such circumstances, the question of now the applicant seeking for amending the relief does not arise.
2.(b) The confirmation of sale of the property was made on 26.10.2004 and after seven years, the present amendment has been sought for by the applicant is not maintainable, that the application has not chosen to reserve his right under Order II Rule 2(3) of Code of Civil Procedure and cannot now seek to amend the plaint, which completely changes the character of the suit, that the proposed amendment sought for is wholly inconsistent with the plaint and is unsustainable and merely an afterthought, that the applicant had knowledge about the confirmation of the sale as early as 30.06.2004 and as such the present amendment is not maintainable, that the circumstances leading to this defendant's participation in the auction sale and subsequent confirmation of sale in his favour has been elaborately explained in the written statement, that the allegation that the applicant came to know about the confirmation of sale only on filing of the written statment is inconsistent to the pleadings in the plaint as well as para No.15 of his affidavit, that this defendant's is not aware about any undertaking any he is not guilty of any breach, whatsoever, that there is no cause of action even fro filing of the suit, much less the alleged cause of action for amendment and that the application may be dismissed with exemplary costs.
The Point for consideration is as follows:
3. Whether the amendment sought for by the applicant has to be entertained?
Point:
4. Originally the plaintiff has filed the Civil Suit against the defendants for recovery of Rs.64,11,000/- and future interest at the rate of 24% per annum on Rs.55,00,000/-. This is only a suit for recovery of money from the first defendant. In the plaint, the allegations with regard to the claim of the applicant and the responsibilities of the first respondent have been narrated concisely. However, more details are sought to be introduced in the plaint in an elaborate manner so as to make it a comprehensive one, in addition to the inclusion of the prayer for mandatary injunction directing the first defendant to plot out the entire schedule properties, to sell the same to third parties and to pay 25% of the sale proceeds from such sale to the plaintiff, making the already existing prayer as an alternate one.
5. The claim of the applicant has been opposed by the first defendant in the counter on various angles. First being, the proposed amendment is barred by limitation and also hit by the provisions of Order 2 Rule 2(3) of Civil Procedure Code. Next is the amendment is brought after 7 years since the filing of the suit on 26.10.2004 and hence it is not maintainable. The further contention is that the amendment completely would change the character of the suit which are wholly inconsistent to the plaint and afterthought. Nextly, the applicant had knowledge over the confirmation of sale as early as 30.06.2004 and hence the amendment is not maintainable. There is no cause of action even for filing the suit much less on the alleged cause of action for amendment. Further the allegation that the applicant came to know about the confirmation of sale only on filing of the written statement is inconsistent to the pleadings in the plaint as well as para 15 of his affidavit.
6. The learned Senior Counsel Mr.A.R.L.Sundaresan appearing for the applicant would contend that the proposed amendments will not change the cause of action nor the character of the suit, that even though, it appears that the claim is barred, the law permits the plaintiff to pray relief even after the relief is barred by time, that order II Rule 2(3) of C.P.C.could not be invoked, that it has been consistently held by the Courts that the pre-trial amendments have to be allowed liberally and that the introduction of subsequent events which happened earlier to the filing of the suit will not prejudice the defendants. This Court has got jurisdiction to try the suit even though the suit properties are situate outside the territorial jurisdiction of the Court, since it is not a "suit on land."
7. Repelling the contentions, the learned counsel appearing for the first respondent Mr.S.R.Raghuram would submit that barred claim cannot be prayed for, pending trial of the suit, that the applicant did not reserve right to make a prayer under Order II Rule 2(3) of C.P.C, that the proposed amendment would change the character and cause of action of the suit and that having known the events alleged in the amendment much earlier to the filing of the suit they are sought to be included six years after filing of the suit. They cannot be included in the plaint and that this Court has no jurisdiction to try the matter since the immovable properties involved in the case are situate outside the territorial jurisdiction of this Court.
8. This Court has gone into the proposed pleadings intended to be introduced in the plaint. It is no doubt that those events happened much earlier to the suit. When the proposed pleadings are considered it is seen that even the outline of the dispute has not been properly made in the plaint. It is surprising to note that when this much of events have taken place, the plaintiff has not stated in his plaint about them at the first instance. However, it is to be seen whether the amendments are legally permissible and whether the introduction of the amendments would withstand legal consequences.
9. The prayer for mandatory injunction appears to be in the form of specific performance of contract. The original relief is for recovery of money. Presently, the relief for specific performance of contract is also prayed for. In this context, whether the amendment is sustainable under law has to be seen. Order II Rule 2 C.P.C. along with explanation is as follows:
"2. Suit to include the whole claim.
(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.
(2) Relinquishment of part of claimWhere a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim he shall not afterwards sue in respect of the portion so omitted or relinquished.
(3) Omission to sue for one of several reliefsA person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.
ExplanationFor the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action."
10. As far as sub-rule 1 in Rule 2 is concerned, the suit shall include the whole of the claim which is plaintiff is entitled. As for sub-rule 3 in Rule 2 when a plaintiff is entitled for more than one relief, it cannot be included without leave of the Court. The learned counsel for the respondent strongly pleads that these special rules are applicable even to a single suit and there need not be any subsequent suit filed by the plaintiff. The applicant has not reserved his right in the plaint for a future relief on the same cause of action nor had he obtained any leave from the Court to raise the plea with regard to additional relief.
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11. It is the next contention on the part of the respondent that the present claim is barred by time. The suit was filed on 26.10.2004 and the amendment has been sought for after six years. The defence of the respondent is total denial of transaction pleaded in the plaint. The relief apparently is barred by time even then during the pendency of the suit, though the relief is barred it can be prayed for. If the amendment is required in the interest of justice, then they may be ordered as per the settled law. It depends upon the discretion of the Court and facts and circumstances of the case. The following decison of the Supreme Court of India containing the ratio laid down in this regard, is as under:
(2004) 6 Supreme Court Cases 415 [Pankaja and another v. Yellappa (dead) by Lrs. And others] "14. The law in this regard is also quite clear and consistent that there is no absolute rule that in every case where a relief is barred because of limitation an amendment should not be allowed. Discretion in such cases depends on the facts and circumstances of the case. The jurisdiction to allow or not allow an amendment being discretionary the same will have to be exercised in a judicious evaluation of the facts and circumstances in which the amendment is sought. If the granting of an amendment really subserves the ultimate cause of justice and avoids further litigation the same should be allowed. There can be no straight jacket formula for allowing or disallowing an amendment of pleadings. Each case depends on the factual background of that case.
15. This Court in the case of L.J. Leach and Co. Ltd. & Anr. Vs. Messrs. Jardine Skinner and Co. - A.I.R. 1957 S.C. 357 has held :-
"It is no doubt true that Courts would, as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the Court to order it, if that is required in the interests of justice."
16. This view of this Court has, since, been followed by a 3 Judge Bench of this Court in the case of T.N. Alloy Foundry Co. Ltd. Vs. T.N. Electricity Board & Ors. 2004 (3) SCC 392. Therefore, an application for amendment of the pleading should not be disallowed merely because it is opposed on the ground that the same is barred by limitation, on the contrary, application will have to be considered bearing in mind the discretion that is vested with the Court in allowing or disallowing such amendment in the interest of justice."
In view of the above said decision it has to be necessarily held that merely because the claim gets barred, there could be no contention it could not be prayed for in the suit pending the trial.
12. It is contended that paragraph 15 of the original plaint that the plaintiff very well knew about the confirmation of sale much earlier to the filing of the suit and hence the delayed prayer for amendment is not sustainable. It is a lapse on the part of the applicant to incorporate in the plaint at the inception. However, when it is brought in the amendment, it cannot be turned down in view of the above proposition laid down by the Apex Court.
13. It is argued that the amendments would change the character and nature of the suit. It is no doubt true that the present pleadings would change the nature and character of the suit since a new prayer is intended to be brought about and necessary pleadings are sought to be introduced. While the proposed pleadings are carefully scrutinised by this Court it transpires that they would change the character and nature of the suit and also the cause of action. It appears that the application after knowing the defence raised by the respondent in his written statement, has come out with the new prayer after a long time.
14. Particularly speaking, under the Caption 'L' the applicant pleads that by filing the written statement the first defendant has categorically made known its refusal for the performance of contract entered into with the plaintiff. It candidly shows that the applicant bases the cause of action for the suit which would arise after the filing of the suit. In his view the cause of action for mandatory injunction or specific performance of contract has arisen subsequent to the filing of the present suit. It is an instance to see that the entire cause of action differs from the original suit by virtue of this proposed amendment.
15. As mentioned under caption 'M', the allegation that the fact of confirmation of sale on 26.10.2004 has come to the knowledge of the plaintiff and on 30.9.2010 only when it is mentioned in the written statement, is not believable and also the cause of action is changing. This Court is able to infer that the proposed amendments are altering the nature of the suit. In this regard, the contention of the learned counsel for the respondent that a new suit comes to existence in view of the proposed amendments, has force.
16. As regards the territorial jurisdiction of this Court to decide the issues regarding to the immovable property which is situate outside the territorial jurisdiction of this Court, it should be one for "suit for land" and if it is not "suit for land", then this Court has got jurisdiction to try the case. "Suit for land" is the claim of the parties with regard to the title of the property and if there were no claim as to title to the property, then the jurisdiction of the Court is not barred.
17. It is advantageous to refer Clause 12 of the Letters Patent which goes thus:
"12. Original jurisdiction as to suits - And We do further ordain that the said High Court of Judicature at Madras, in exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try, and determine suits of every description if, in the case of suits for land or other immovable property, such land or property shall be situated, or, in all other cases, if the cause of action shall have arisen, either wholly, or, in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court: or if the defendant at the time of the commencement of the suit shall dwell or carry on business or personally work for gain, within such limits; except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Cause at Madras, in which the debt or damage, or value of the property sued for does not exceed hundred rupees."
18. The learned Senior Counsel for the applicant would place strong reliance upon a decision of the Supreme Court in (2001) 7 SCC 698 [Adcon Electronics Pvt. Ltd., v. Daulat and Another] in which it is held that the law is well settled that suits for specific performance, even though they might relate to the land, were not suits for land. Para 15 of the judgment goes thus:
"15. From the above discussion it follows that a suit for land is a suit in which the relief claimed relates to title to or delivery of possession of land or immovable property. Whether a suit is a suit for land or not has to be determined on the averments in the plaint with reference to the reliefs claimed therein; where the relief relates to adjudication of title to land or immovable property or delivery of possession of the land or immovable property, it will be a suit for land. We are in respectful agreement with the view expressed by Mahajan.J. in M/s.Moolji Jaitha and Co. v. Khandesh Spg. And Wvg.Mills Co. Ltd., [AIR 1950 FC 83 = 1949 FCR 849]"
19. A Division Bench of this Court in AIR 1985 MADRAS 1 [Bank of Madurai Ltd., v. Balaramadass & Brothers and others] has also taken the above said view. The learned counsel for the respondent cites a Division Bench Decision of this Court in (2006) 1 MLJ 357 [Thamiraparani Investments Pvt. Ltd., v. Meta Films Private Limited] in which it is held that the "suit for land" should not be confined and limited to suit for recovery of possession of land or to obtain a declaration of title to land only and that the present suit being one for control for land lying outside the jurisdiction of this Court, this Court has no jurisdiction to entertain the suit . In view of the above, it is held that this Court has got jurisdiction to try the suit.
20. Much was said about the prayer for alternative relief of specific performance of contract. The learned Senior Counsel for the applicant would submit that the amendments pending trial have to be liberally entertained by the Court with reference to the circumstances of the case. He garnered support from a decision in (2006) 4 SCC 385 [Rajesh Kumar Aggarwal and Others v. K.K. Modi and others] wherein Their Lordships have held as follows:
"15.The object of the rule is that Courts should try the merits of the case that come before them and should, consequently, allow all amendments that may be necessary for determining the real question in controversy between the parties provided it does not cause injustice or prejudice to the other side.
16. Order VI Rule 17 consist of two parts whereas the first part is discretionary (may) and leaves it to the Court to order amendment of pleading. The second part is imperative (shall) and enjoins the Court to allow all amendments which are necessary for the purpose of determining the real question in controversy between the parties.
17. In our view, since the cause of action arose during the pendency of the suit, proposed amendment ought to have been granted because the basic structure of the suit has not changed and that there was merely change in the nature of relief claimed. We fail to understand if it is permissible for the appellants to file an independent suit, why the same relief which could be prayed for in the new suit cannot be permitted to be incorporated in the pending suit.
18. As discussed above, the real controversy test is the basic or cardinal test and it is the primary duty of the Court to decide whether such an amendment is necessary to decide the real dispute between the parties. If it is, the amendment will be allowed; if it is not, the amendment will be refused. On the contrary, the learned Judges of the High Court without deciding whether such an amendment is necessary has expressed certain opinion and entered into a discussion on merits of the amendment. In cases like this, the Court should also take notice of subsequent events in order to shorten the litigation, to preserve and safeguard rights of both parties and to sub-serve the ends of justice. It is settled by catena of decisions of this Court that the rule of amendment is essentially a rule of justice, equity and good conscience and the power of amendment should be exercised in the larger interest of doing full and complete justice to the parties before the Court."
As far as the present case on hand is concerned, the proposed amendments tend to alter the basic structure of the suit and it is not a mere change in the nature of relief claimed. Hence, the applicant cannot take recourse to the principles laid down in the above decision.
21. The learned counsel for the respondent relied upon a Division Bench decision of Panjab and Haryana High Court in AIR 1991 P & H 212 = MANU/PH/0049/1991 [Roop Chand Chaudhari v. Smt Ranjit Kumari] wherein the learned judges have followed the decisions of the Apex Court and reached a conclusion that once a suit for return of the earnest money/advance or grant of damages is filed, such a plaintiff disentitles himself to the alternative relief of specific performance even if claimed in the suit and that if that is so, he can not be allowed to amend his plaint later on to claim specific performance of contract as the first relief and return of earnest money/advance and/or damages as an alternative relief. The operative portion of the decision of the Supreme Court incorporated in the decision of Pubjab and Haryana High Court is as follows:
"13. Then we have another decision of the Supreme Court recorded in Jawahar Lal Wadhwav. HaripadaChatroberty, AIR 1989 SC 606, the following passage of which gives guidelines to us (at page SC 610 of AIR 1989) :
".....It is settled in law that where a party to a contract commits an anticipatory breach of the contract, the other party to the contract may treat the breach as putting an end to the contract and sue for damages, but in that event he cannot ask for specific performance. The other option open to the other party, namely, the aggrieved party, is that he may choose to keep the contract alive till the time for performance and claim specific performance, but, in that event, he cannot claim specific performance of the contract unless he shows his readiness and willingness to perform the contract."
22. In view of the above said ratio laid down by the Apex Court, the amendment is not permissible since the prayer for mandatory injunction/specific performance as prayed for alternatively on the direction for return of the advance is legally prohibited.
23. In view of the above said discussion, in the light of the well settled principles of law, I am of the firm view that the amendment is not permissible, since the proposed amendments would alter the character and nature of the suit and cause of action as well and the prayer in the proposed amendment is also not sustainable in view of the settled legal position. The applicant has to be non-suited for the relief prayed for. The application has to suffer dismissal.
24. In the result, the Application is dismissed. No costs.
23.12.2011 Index : yes Internet : yes ggs S. PALANIVELU,J. Ggs Order in: Application No.988 of 2011 in C.S.No.407 of 2004 23.12.2011