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3. The facts leading to the filing of this appeal are stated in a nutshell :-

Prabhakar Gajanan Naik has filed a suit for dissolution of partnership firm wherein the appellant No.1, being defendant No.1 in the suit, was the partnership firm and the appellant No.2, who is defendant No. 4, was a partner of the said firm. In the said suit for dissolution of partnership, the appellants by their written statement disputed the existence of such partnership and had taken a plea that by way of a family arrangement, the defendants/appellants were allowed to carry on the business of setting up South Konkan Distilleries. In their written statement, the appellants also claimed that in view of various letters addressed to various Banks,the said distillery could not be commenced as scheduled in May, 1986 and as a result thereof, the appellants suffered heavy loss. Accordingly, in the written statement, a counter claim of Rs.52 lakhs was made against the original plaintiff/respondent. The said written statement was, however, filed on 17th of June, 1987. The counter claim of the appellants was based on a notice of the learned counsel dated 23rd of October, 1986. In 2000, i.e., after thirteen and a half years, the appellants filed an application for amendment of the written statement and the counter claim seeking enhanced amount. In the application for amendment, the appellants had alleged that as they were suffering loss of Rs. 20,000/- per day from the month of June, 1987, when the original written statement was filed, the counter claim was made only upto to the date of filing of the written statement and by seeking an amendment of the same, they were only claiming a sum of Rs.20,000/- per day from June, 1986 till November, 2000 which would be less than Rs.25 lakhs. This application for amendment of the written statement and the counter claim, filed by the appellants, was opposed by the original plaintiff/respondent on the ground that the prayer for amendment of the written statement and the counter claim was clearly barred by the law of limitation. The trial court by its order dated 5th of February, 2001 came to the conclusion that as the cause of action arose in 1986, the prayer for amendment of the written statement and the counter claim for enhanced damages, as noted herein earlier, was clearly ex facie barred by the law of limitation. Accordingly, the trial court rejected the application for amendment of the written statement and the counter claim filed by the appellants and aggrieved by the aforesaid order of rejection, a writ petition being W.P.No.463/2003 was filed at the instance of the appellants which was also rejected by the impugned order of the learned Judge of the High Court against which a special leave petition was filed and on grant of leave, the same was heard in presence of the learned counsel for the parties.

8. Before we deal with the orders of the courts below, as to whether the application for amendment of the written statement and the counter claim was rightly rejected or not, let us consider the laws on the question of allowing or rejecting a prayer for amendment of the pleadings when the plea of limitation was taken by one of the parties in the suit. It is well settled that the court must be extremely liberal in granting the prayer for amendment, if the court is of the view that if such amendment is not allowed, a party, who has prayed for such an amendment, shall suffer irreparable loss and injury. It is also equally well settled that there is no absolute rule that in every case where a relief is barred because of limitation, amendment should not be allowed. It is always open to the court to allow an amendment if it is of the view that allowing of an amendment shall really sub-serve the ultimate cause of justice and avoid further litigation. In L.J.Leach & Co. Ltd. & Anr. Vs. M/s. Jardine Skinner & Co. [AIR 1957 SC 357], this Court at paragraph 16 of the said decision observed as follows :-

It is not disputed that the appellate court has a coextensive power to the trial court. We find that the discretion exercised by the High Court in rejecting the plaint was in conformity with law."

10. From the above, therefore, one of the cardinal principles of law allowing or rejecting an application for amendment of the pleading is that the courts generally, as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred by limitation on the date of filing of the application. But that would be a factor to be taken into account in the exercise of the discretion as to whether the amendment should be ordered, and does not affect the power of the Court to order it, if that is required in the interest of justice. In Ragu Thilak D.John vs. S. Rayappan & Ors. [2001 (2) SCC 472], this Court also observed that where the amendment was barred by time or not, was a disputed question of fact and, therefore, that prayer for amendment could not be rejected and in that circumstances the issue of limitation can be made an issue in the suit itself. In a decision in Vishwambhar & Ors. vs. Laxminarayan (Dead) through Lrs. & Anr. [(2001) 6 SCC 163], this Court held that the amendment though properly made cannot relate back to the date of filing of the suit, but to the date of filing of the application. Again in Vineet Kumar vs. Mangal Sain Wadhera [AIR 1985 SC 817] this Court held that if a prayer for amendment merely adds to facts already on record, the amendment would be allowed even after statutory period of limitation.

16. In view of our discussions made hereinabove that there was no dispute on the question of limitation, it would not be fit and proper to hold that the Courts below had acted illegally and with material irregularity in the exercise of their jurisdiction in rejecting the application for amendment of the written statement and the counter claim. The learned counsel for the appellants, however, relied on a decision of this Court reported in AIR 1967 SC 96 [A.K.Gupta & Sons Ltd. vs. Damodar Valley Corporation] in order to satisfy us that the prayer for amendment for a sum already specified in the plaint or such other amount as was to be determined after accounts, ought to be allowed though the suit for recovery of money was barred when the amendment was sought. In our view, that decision of this Court stands on a different footing altogether and will not be of any help to the appellants. In that decision, it was made clear that the amendment of pleadings introducing new case cannot be allowed, if suit on such case is barred. In that decision also, it was made clear that in the matter of allowing amendment of pleadings, the general rule 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 cause of action is barred. However, an exception was given in that decision saying where the amendment does not constitute the addition of a new cause of action or raise a different case, but amounts merely to a different or additional approach to the same facts, the amendment is to be allowed even after expiry of the statutory period of limitation. We have already observed that there is no quarrel on the proposition enunciated by this Court in the aforesaid decision. As held hereinabove, the date on which the application for amendment of the written statement and the counter claim was filed, the claim was already barred by limitation. Therefore, if a fresh suit was filed on the amended claim, there cannot be any dispute that the same could also be barred by the law of limitation. Under these circumstances and applying also the principles laid down in the aforesaid decision in the case of A.K.Gupta (supra), in the facts of this case, we are of the view that since even on the date of filing of the application for amendment of the written statement and the counter claim, the claim was barred and no fresh suit could be filed on such amended claim and, therefore, the two courts below had acted within their jurisdiction in rejecting the prayer for amendment of the written statement and the counter claim. It may not be out of place to mention that following the principle laid down in A.K.Gupta's case (supra), this Court again in Vineet Kumar vs. Mangal Sain Wadhera [1984 (3) SCC 352] expressed the same view to which we have already adhered to.