Rajasthan High Court - Jaipur
Rajasthan State Seeds Corporation ... vs J.K. Agri Genetics Limited on 26 May, 2023
Author: Mahendar Kumar Goyal
Bench: Mahendar Kumar Goyal
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Civil Writ Petition No. 3379/2022
Rajasthan State Seeds Corporation Limited, Having Its
Registered Office At 3Rd Floor, Pant Krishi Bhawan, Bhagwan Das
Road, Jaipur, Rajasthan 302001 Through Kailash Chand Meena
S/o Sh. Bhairon Lal Meena, Age 56 Years, Chief Manager
(Marketing).
----Petitioner
Versus
J.K. Agri Genetics Limited, Having Its Registered Address At 7,
Council House Street, Kolkata, West Bengal 700001 And Its
Head Office At 1-10-177 4Th Floor, Varun Towers Begumpet
Hyderabad, Telangana 500016 Through Its Authorised Signatory
And Manager (Legal) Mr. P. Ravi Kiran, Aged 45 Years S/o P.R.M.
Prasad And Resident Of Flat No. 104, Surabhi Avenue, Himayat
Nagar, Hyderabad.
----Respondent
For Petitioner(s) : Mr. A.K. Bhandari, Sr. Adv. with
Mr. Vijay Dutt Sharma,
Mr. Anuj Bhandari &
Mr. Vaibhav Bhargava
For Respondent(s) : Mr. Rajendra Prasad, Sr. Adv. with
Mr. Ashish Sharma
HON'BLE MR. JUSTICE MAHENDAR KUMAR GOYAL
Judgment
26/05/2023
This writ petition has been filed by the petitioner/non-
objector/non-claimant (for brevity, "the petitioner") against the
order dated 04.12.2021 passed by the learned Commercial Court
No.4, Jaipur Metropolitan-II, Jaipur (for brevity, "the learned
Commercial Court") in Objection Application No.606/2019
whereby, a civil misc. application No.105/2021 filed by the
respondent/objector/claimant (for brevity, "the claimant") seeking
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leave to raise additional grounds in support of the Objection
Application filed under Section 34 of the Arbitration and
Conciliation Act, 1996 (for brevity, "the Act of 1996") has been
allowed.
The relevant facts in brief are that an agreement dated
06.06.2012 was entered into between the parties for supply of
notified seeds by the claimant to the petitioner. Alleging non-
payment of the price of the seeds supplied, the claimant raised an
arbitral dispute wherein, its claim came to be rejected by the
learned Arbitrator vide award dated 29.07.2019 on the ground of
it being barred by limitation, aggrieved whereof, the claimant filed
an Objection Application No.606/2019 under Section 34 of the Act
of 1996. During its pendency, it filed an application No.105/2021
seeking leave to raise additional grounds in support of the
Objection Application which has been allowed by the learned
Commercial Court vide order impugned dated 04.12.2021.
Assailing the order, learned Senior Counsel for the petitioner
submitted that the learned Commercial Court erred in failing to appreciate that without seeking amendment in the memo of Objection Application, the application filed by the claimant for leave to raise additional grounds was not maintainable. Inviting attention of this Court towards the additional grounds permitted to be raised and the contents of the claim petition, learned Senior Counsel submitted that thereby, the claimant has altered the cause of action totally which is impermissible in the eye of law. Referring to the provisions of Order 6 Rule 7 CPC, learned Senior Counsel further submitted that the additional grounds could not have been permitted to be raised being inconsistent with the (Downloaded on 11/11/2023 at 05:37:07 PM) (3 of 16) [CW-3379/2022] pleadings in the claim petition. He submitted that under Section 3 of the Limitation Act, 1963 (for brevity, "the Act of 1963"), the Court can consider only the averments made in the plaint/claim to ascertain as to whether it is within the period of limitation and the pleadings/defence raised by the defendant/non-claimant cannot be considered at all for this purpose. Mr. A.K. Bhandari, learned Senior Counsel submitted that the additional grounds sought to be raised by the claimant fly in the face of Clause-27 of the agreement dated 06.06.2012 which provides for cause of action and starting point of limitation. He, in support of his submissions, relied upon following judgments:-
1. Ma. Shwe Mya Vs. Maung Mo Hnaung: AIR 1922 PC 249
2. T. L. Muddukrishana & Anr. Vs. Lalitha Ramchandra Rao (Smt.): (1997) 2 SCC 611
3. Srihari Hanumandas Totala Vs. Hemant Vithal Kamat & Ors.: (2021) 9 SCC 99
4. State of Maharashtra Vs. Hindustan Construction Company Ltd.: (2010) 4 SCC 518
5. Shakti Bhog Food Industries Ltd. Vs. Central Bank of India & Anr.: (2020) 17 SCC 260
6. Rajkumar Gurawara (Dead) through LRs. Vs. S.K. Sarwagi And Company Private Limited & Another: (2008) 14 SCC 364 He, therefore, prays that the writ petition be allowed, the order dated 04.12.2021 passed by the learned Commercial Court be quashed and set aside and CMNC No.105/2021 filed by the claimant be dismissed.(Downloaded on 11/11/2023 at 05:37:07 PM)
(4 of 16) [CW-3379/2022] Per contra, learned Senior Counsel for the claimant would submit that the learned Commercial Court did not err in allowing the application filed by it seeking leave of the Court to raise additional grounds in support of the objection application. Inviting attention of this Court towards the contents of civil miscellaneous application filed by the claimant, learned Senior Counsel submitted that it contains additional grounds based only on the admitted facts and thus, being pure questions of law, it is permissible to raise the same at any stage of proceeding. He submitted that it is settled law that even if the applicant does not rely upon the grounds mentioned in Section 34(2)(b), the Court is under an obligation to examine the validity of the award and to set it aside on any of the grounds mentioned therein. He submitted that there is no change in cause of action as it is bundle of the facts which entitles a party to make a claim against the other party and by raising additional grounds, it cannot be held that there has been change in it as no new fact has been raised/pleaded in the application. Shri Rajendra Prasad, learned Senior Counsel submitted that jurisdiction of this Court under Article 227 of the Constitution of India, while hearing a writ petition against an order passed by the learned Commercial Court, is confined to examining as to whether it suffers from any patent jurisdictional error and not beyond that. He submitted that order impugned has been passed by the learned Commercial Court well within its jurisdiction and warrants no interference. He, in support of his submission, relies upon following judgments:-(Downloaded on 11/11/2023 at 05:37:07 PM)
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1. Deep Industries Ltd. Vs. Oil and Natural Gas Corporation Ltd. & Anr.: (2020) 15 SCC 706
2. Fiza Developers and Inter-Trade Pvt. Ltd. Vs. AMCI (India) Private Ltd. and Anr.: (2009) 17 SCC 796
3. Chittoori Subbanna Vs. Kudappa Subbanna & Ors.: AIR 1965 Supreme Court 1325
4. Mahboob Pasha Vs. Syed Zaheeruddin & Ors.: AIR 1998 Karnataka 83
5. State of Maharashtra Vs. Hindustan Construction Company Ltd.: (2010) 4 SCC 518
6. State of Chhattisgarh & Anr. Vs. Sal Udyog Pvt. Ltd.:
(2022) 2 SCC 275 He, therefore, prays that the writ petition be dismissed.
Heard. Considered.
The first and foremost submission of learned senior counsel for the petitioner is that the additional grounds tantamount to change in the cause of action as pleaded by the claimant in its claim petition which is impermissible in the eye of law. The cause of action in the present case is non-payment of price of the notified seeds supplied by the claimant to the petitioner and it does not get changed by the additional grounds which do not involve introduction of any new fact; rather, remains as such. The claimant only wants examination of the issue of limitation from a new angle based on the admitted facts. This view gains support from a three-Judges Bench judgment of the Hon'ble Supreme Court of India in the case of A.K. Gupta & Sons Ltd. Vs. (Downloaded on 11/11/2023 at 05:37:07 PM) (6 of 16) [CW-3379/2022] Damodar Valley Corporation AIR 1967 SC 96, wherein, while interpreting the 'cause of action', their Lordships held as under:
"(6) Now, the appellant had in view of the High Court's decision as to the maintainability of the suit, sought its leave to amend the plaint by adding an extra relief in the following words : "That a decree for Rs. 65,000 or such other amount which may be found due on proper account being taken may be passed in favour of the plaintiff against the defendant".
The amendment having been refused the present appeal has been preferred.
(7) It is not in dispute that at the date of the application for amendment, a suit for a money claim under the contract was barred. The general rule, no doubt, is that a party is not allowed by amendment to set up a new case or a new cause of action particularly when a suit on the new case or cause of action is barred : Weldon v. Neale, (1887) 19 QBD 394. But it is also well recognised that where the amendment does not constitute the addition of a new cause of action or raise a different case, but amounts to no more than a different or additional approach to the same facts, the amendment will be allowed even after the expiry of the statutory period of limitation : see Charan Das v. Amir Khan, 47 Ind App 255 (AIR 1921 PC 50) and L. J. Leach & Company Ltd. v. Jardine Skinner and Co., 1957 SCR 438: (AIR 1957 SC 357). (8) The principal reasons that have led to the rule last mentioned are, first, that the object of Courts and rules of procedure is to decide the rights of the parties and not to punish them for their mistakes (Cropper v. Smith, (1884) 26 Ch. D 700 (710-711) and secondly, that a party is strictly not entitled to rely on the statute of limitation when what is sought to be brought in by the amendment can be said in substance to be already in the pleading sought to be amended Kisandas Rupchand v. Rachappa Vithoba(1909) ILR 33 Bom 644 at p.651, approved in Pirgonda Hongonda Patil (Downloaded on 11/11/2023 at 05:37:07 PM) (7 of 16) [CW-3379/2022] v. Kalgonda Shidgonda Patil, 1957 SCR 595 (603): (AIR 1957 SC 363 at p.366).
(9) The expression "cause of action" in the present context does not mean "every fact which it is material to be proved to entitle the plaintiff to succeed" as was said in Cooke v. Gill (1873) 8 CPC 107 (116), in a different context, for if it were so, no material fact could ever be amended or added and, of course, no one would want to change or add an immaterial allegation by amendment. That expression for the present purpose only means, a new claim made on a new basis constituted by new facts. Such a view was taken in Robinson v. Unicos Property Corporation Ltd., 1962-2 All ER 24, and it seems to us to be the only possible view to take. Any other view would make the rule futile. The words "new case" have been understood to mean "new set of ideas" : Dornan v. J. W. Ellis & Co. Ltd., 1962-1 All ER 303. This also seems to us to be a reasonable view to take. No amendment will be allowed to introduce a new set of ideas to the prejudice of any right acquired by any party by lapse of time. (10) Now, how does the present case stand on these principles? Does the amendment introduce a new cause of action or a new case? We do not think it does. The suit was on the contract. It sought the interpretation of a clause in the contract only for a decision of the rights of the parties under it and for no other purpose. It was the contract which formed the cause of action on which the suit was based. The amendment seeks to introduce a claim based on the same cause of action, that is, the same contract. It introduces no new case or facts. Indeed the facts on which the money claim sought to be added is based are not in dispute. Even the amount of the claim now sought to be made by amendment, was mentioned in the plaint in stating the valuation of the suit for the purpose of jurisdiction. The respondent had notice of it. It is quite clear that the interpretation of the clause was sought only for quantifying (Downloaded on 11/11/2023 at 05:37:07 PM) (8 of 16) [CW-3379/2022] the money claim. In the written statement the respondent specifically expressed its willingness to pay the appellant's legitimate dues which could only mean such amount as might be due according to the rates applicable on a proper interpretation of the clause. The respondent was fully aware that the ultimate object of the appellant in filing the suit was to obtain the payment of that amount. It was equally aware that the amount had not been specifically claimed in the suit because the respondent had led the appellant to believe that it would pay whatever the court legitimately found to be due. It in fact said so in the written statement. If there was any case where the respondent was not entitled to the benefit of the law of limitation, the present is that one. The respondent cannot legitimately claim that the amendment will prejudicially effect his right under that law for really be had no such right. It is a case in which the claim for money was in substance in the plaint from the beginning though it had not formally been made."
The judgements relied upon by the petitioner in this regard are of little assistance to it inasmuch as the same have no applicability in the present case. In the case of Ma. Shwe Mya (supra), the Privy Council held that one distinct cause of action cannot be substituted for another by way of an amendment in the facts wherein the learned trial Judge found that the verbal agreement based upon which the suit for specific performance was filed could not be established in the evidence and the Judicial Commissioner to whom the appeal was taken thereagainst affirming the view, granted a liberty to the plaintiff to amend enabling compensation to be assessed for the alleged breach of the contract. However, as already observed, in the present case, (Downloaded on 11/11/2023 at 05:37:07 PM) (9 of 16) [CW-3379/2022] the additional grounds have been permitted to be raised by the learned commercial court without introduction of any new fact.
Similarly, in the case of T.L. Muddukrishana & Anr. (supra), the Hon'ble Supreme Court held that in a suit filed for mandatory injunction, amendment seeking to introduce the relief of specific performance after expiry of period of limitation is not permissible. However, in the present case, no such situation obtains.
Contention of the learned counsel for the petitioner that while adjudicating the question of limitation, the Court has to see pleadings of the plaintiff/claimant only, is misconceived. Section 3 of the Act of 1963 mandates a Court to adjudicate maintainability of a suit/appeal/application qua the limitation irrespective of whether a defence in this regard is taken or not; but, the provision cannot be interpreted in the manner that the averments in the plaint/appeal/application only are to be considered to decide this issue and pleading/defence of the defendant cannot be looked into at all for this purpose. The Court is duty bound to ponder upon the issue of limitation taking a holistic consideration of the pleadings of the parties as also the evidence led by them in support thereof. Indisputably, in the present case, the claimant has sought to raise additional grounds to reassert that the claim filed by it before the learned Arbitrator was within limitation based on the admitted facts which are already on record and no new fact has been introduced. In these circumstances, it amounts to raising a pure question of law which can be raised at any stage of proceeding. This Court finds support from the following judgments in its view. (Downloaded on 11/11/2023 at 05:37:07 PM)
(10 of 16) [CW-3379/2022] Their Lordships have held in the case of Chittoori Subbanna (supra) as under:
"4. Chitturi Subbanna, appellant, applied to the High Court for permission to raise an additional ground of appeal to the effect that the trial Court was not entitled to grant mesne profits for more than 3 years from the date of the decree of the High Court. The High Court disallowed that prayer for the reasons that he had not taken such a ground in the memorandum of appeal and had, on the other hand, conceded before the Commissioner and the trial Court that accounts could be taken upto 1943 in respect of A and C schedule properties, that he had elected to have the profits deter- mined by the trial Court upto the date of delivery of possession and that if he had taken the objection earlier, it would have been open to the second plaintiff-respondent to file a suit for the recovery of mesne profits beyond the three years upto the date of delivery of possession. It is urged before us for the appellant that the High Court was in error in not allowing the appellant to have raised the objection based on the provisions of O .20, R. 12, C.P.C. We agree with this contention. The question sought to be raised was a pure question of law and was not dependent on the determination of any question of fact. The first appellate Court ought to have allowed it. Such pure questions of law are allowed for the first time at later stages too.
5. The appellant could not have claimed-and did not claim- a right to urge the new point which had not been taken in the grounds of appeal. He made a separate application for permission to take up that point. The procedure followed was in full conformity with what had been suggested in Wilson v. United Counties Bank, Ltd. 1920 AC 102 pg.106, to the effect:
"If in exceptional cases parties desire to add new grounds to those of which they have given notice, it will (Downloaded on 11/11/2023 at 05:37:07 PM) (11 of 16) [CW-3379/2022] usually be convenient, by a substantive application, to apply to the indulgence of the Court which is to hear the appeal."
6. In Yeswant Deorao Deshmukh v. Walchand Ramchand Kothari(1950) SCR 852; (AIR 1951 SC 16) this Court allowed a question of law to be raised at the hearing of the appeal even though no reference to it had been made in the Courts below or in the grounds of appeal to this Court. This Court said :
"If the facts proved and found as established are sufficient to make out a case of fraud within the meaning of section 18, this objection may not be serious, as the question of the applicability of the section will be only a question of law and such a question could be raised at any stage of the case and also in the final court of appeal. The following observations of Lord Watson in Connecticut Fire Insurance Co. v. Kavanagh, 1892 A.C. 473, are relevant. He said : 'When a question of law is raised for the first time in a court of last resort upon the construction of a document or upon facts either admitted or proved beyond controversy, it is not only competent but expedient in the interests of justice to entertain the plea. The expediency of adopting that course may be doubted when the plea cannot be disposed of without deciding nice questions of fact in considering which the court of ultimate review is placed in a much less advantageous position than the courts below."
Again, it was said in M. K. Ranganathan v. Government of Madras (1955) 2 SCR 374 at p.381: ((S) AIR 1955 SC 604 at p.607):
"The High Court had allowed the Respondent 3 to raise the question even at that late stage inasmuch as it was a pure question of law and the learned Solicitor- General, therefore, rightly did not press the first contention before us."
A Division Bench of Hon'ble Karnataka High Court has, in the case of Mahboob Pasha (supra), decided as under: (Downloaded on 11/11/2023 at 05:37:07 PM)
(12 of 16) [CW-3379/2022] "6. We are of the view that the approach made by the learned trial judge is on the face of it erroneous. It is the duty of the Court to decide the question as to when the limitation commences, depending upon the nature of the suit. The decision on such question shall have to be of the court. It cannot be founded on the submission made by the counsel for the parties. Limitation affects the jurisdiction of the Court. If the suit is barred by limitation, the Court has no jurisdiction to entertain it. Therefore, as the parties cannot Confer jurisdiction on the Court by consent, the question of limitation as to the original cause of action cannot be decided on the concession made by the parties. S. 5 of the Limitation Act does not apply to the original cause of action so as to extend the period of limitation by concession made by the parties. The expression 'prescribed period' as per cl. (j) of S. 2 of the Act means, the period of limitation computed in accordance with the provisions of the Act. Sub-sec. (1) of S. 3 of the Act further provides that subject to the provisions contained in Ss. 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as a defence. Therefore, it is the duty of the Court to decide the question of limitation.
7. Thus the trial Court ought to have decided on its own reasoning as to when the period of limitation commenced for the purpose of filing the suit in question instead of acting upon the concessions made by both parties, as the decision on such question had a bearing on the jurisdiction of the Court to entertain the suit."
The judgements relied upon by the learned senior counsel for the petitioner in the case of Hindustan Construction Company Ltd. (supra) is of no help to him wherein, it was held that by way of an amendment in the memorandum of arbitration appeal filed (Downloaded on 11/11/2023 at 05:37:07 PM) (13 of 16) [CW-3379/2022] under Section 37 of the Act of 1996, absolutely new ground for which there is no factual foundation in the application for setting aside the award is impermissible which contains new material/facts when admittedly these grounds were not originally raised in the arbitration petition filed under Section 34 for setting aside the award. As already held, in the present case, the claim filed by the claimant was dismissed by the learned Arbitrator being hit by the law of limitation which is subject matter of challenge in the objection application filed by the claimant under Section 34 of the Act and the additional grounds are based on the admitted facts already on record.
Contention of the learned Senior Counsel for the petitioner that in absence of an amendment in the memo of objection application, the learned Commercial Court erred in permitting the claimant to raise additional ground, does not merit acceptance. As already held, the additional grounds are in the nature of legal issues and can be raised by making an application at any stage of litigation without amendment in the memo of objection application. Section 3 of the Act of 1963 also mandates the Court to decide the issue of limitation even in the absence of any defence as it goes to the very root of the court's jurisdiction to entertain and decide a matter. As already seen, their Lordships have held in case Chittoori Subbanna (supra) that the pure questions of law can be raised at any stage of the proceeding. Further, in the case of Fiza Developers and Inter-Trade Private Ltd. (supra), it was held as under:
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"28. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx An
application under Section 34 in that sense is adversarial in nature. But the proceedings under Section 34 differ from regular civil suits in a significant aspect."
29. In a regular civil suit, in the event of failure to file a defence, it will be lawful for the court to pronounce the judgment on the basis of facts contained in the plaint [Vide Order 8 Rule 5(2) of the Code]. But in an application under section 34, even if there is no contest, the court cannot, on the basis of the averments contained in the application, set aside the award. Whether there is contest or not, the applicant has to prove one of the grounds set out in section 34(2)(a) and (b). Even if the applicant does not rely upon the grounds under clause (b), the Court, on its own initiative, may examine the award to find out whether it is liable to be set aside on either of the two grounds mentioned in section 34(2)(b). It is perhaps in this sense, the High Court has stated that the proceedings may not be adversarial. Be that as it may."
Submission of learned senior counsel for the petitioner as to additional grounds being hit by the provisions of Order 6 Rule 7 CPC is wholly misconceived inasmuch as, it has already been held that these are in the nature of legal issues with introduction of no new fact and examination of the issue of limitation from a new angle on the admitted facts.
Contention of the learned senior counsel for the petitioner that additional grounds permitted to be raised fly in the face of clause 27 of the agreement executed between the parties merits no consideration as this Court is not supposed to examine the merits of the additional grounds at this stage which is to be (Downloaded on 11/11/2023 at 05:37:07 PM) (15 of 16) [CW-3379/2022] appreciated by the learned Commercial Court as and when required.
The judgement of the Hon'ble Supreme Court of India in the case of Rajkumar Gurawara (Dead) through LRs. (supra) is of no assistance to the petitioner wherein, while explaining the scope of Order 6 Rule 17 CPC, it was held that if the amendment results in introduction of new cause of action, it should not be permitted. However, in the present case, it has been held by this Court that the additional grounds do not introduce a new cause of action.
In the case of Shakti Bhog Food Industries Ltd. (supra), their Lordships have held that while examining the question of limitation under Order 7 Rule 11 CPC, the averments in the written statement as also the contention of the defendants are wholly immaterial. This proposition is of no help to the petitioner.
Similarly, in the case of Srihari Hanumandas Totala (supra), the Hon'ble Supreme Court was dealing with an issue under Order 7 Rule 11 CPC which is not the issue obtaining in the present case.
In view of aforesaid discussion, this Court is not satisfied that order dated 4.12.2021 passed by the learned Commercial Court in its judicious discretion appreciating the material on record in the light of well settled legal principles suffers from any patent jurisdictional error so as to warrant interference of this Court under its limited supervisory jurisdiction vide Article 227 of the Constitution of India. The Hon'ble Supreme Court has, in the case of Deep Industries Ltd. (supra), while entertaining an appeal against the judgement of the High Court under Article 227 of the (Downloaded on 11/11/2023 at 05:37:07 PM) (16 of 16) [CW-3379/2022] Constitution of India interfering with the order passed by the appellate authority under Section 37 of the Act of 1996, held as under:
"17. This being the case, there is no doubt whatsoever that if petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non-obstante clause of Section 5 of the Act. In these circumstances, what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us herein above so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction."
Resultantly, this writ petition is dismissed being devoid of merit.
(MAHENDAR KUMAR GOYAL),J Sudha/182 (Downloaded on 11/11/2023 at 05:37:07 PM) Powered by TCPDF (www.tcpdf.org)