Holding

An amendment of the pleading to seek a decree in foreign currency is allowed as it merely clarifies the relief and does not introduce a new cause of action or revive a time‑barred claim.

Summary

Punjab National Bank (PNB) sued Indian Bank and Indo‑Europe Foods Ltd for recovery of a US‑dollar bank guarantee amounting to USD 5,237,284.54. The plaint sought a decree in US dollars with rupee equivalents for court‑fee and jurisdiction purposes. PNB later applied to amend the pleading to delete the rupee equivalents and retain relief solely in US dollars. The Debt Recovery Tribunal allowed the amendment, but the Delhi High Court set it aside, holding that the amendment was impermissible because of alleged lack of FERA permission, no undertaking for court‑fee deficiency, and that it would increase the claim and revive a time‑barred right. The Supreme Court held that the amendment was merely clarificatory, did not introduce a new cause of action or revive a barred claim, and caused no injustice to the respondents; therefore it was permissible under Order 6 Rule 17 and Section 151 of the CPC. The appeal was allowed, restoring the amendment order with costs.

Issues considered

Whether an amendment of the plaint to delete rupee equivalents and seek a decree solely in foreign currency is permissible under CPC Order 6 Rule 17 and Section 151.
Whether the amendment revives a time‑barred claim or changes the nature of the suit.
Whether the absence of an undertaking for court‑fee deficiency or permission under the FERA renders the amendment invalid.
Whether the delay in filing the amendment application defeats its allowance.

Legislation cited

Code of Civil Procedure, 1908s. Order 6 Rule 17, s. Section 151
Foreign Exchange Regulation Act, 1973
Recovery of Debts Due to Banks and Financial Institutions Act, 1993s. Section 22
Specific Relief Act, 1963s. Section 16(C)

Subjects

amendment of pleadingforeign currency decreebank guaranteedebt recovery tribunalCivil Procedure CodelimitationFERAcourt feeclarificatory amendment

Judgment

A PUNJAB NATIONAL BANK
\~

INDIAN BANK AND ANR.

APRIL 22, 2003

B [BRIJESH KUMAR AND B.N. SRI KRISHNA, JJ.]

Code of Civil Procedure, 1908; Order 6 Rule 17 r/w Section 151:

Contract between Indian firm and foreign firm-Loan taken by Indian
C firm ji·om foreign firm against bank guarantee-Enforcing of bank guarantee
by the assignee bank on repudiation of the contract-Denial to encash bank
guarantee-Assignee-Bank filing a suit for recovery-Application for
amendment of pleading for gelling relief in foreign currency-Amendment
allowed by Debt Recove1y Tribunal-Reversed by the High Court-On appeal,
D Held: Since there has been indication of demand in foreign currency in the
Plaint, there lies a claim for recove1y in foreign currency-Vagueness in the
averments for such claim and decree in terms of foreign currency could be
removed by amendment of the pleading-Amendment is clarificato1y in nature
and not for revival of time barred claim-Nature of the suit not changed-
Relief not freezed-Hence the application is not ma/a fide in nature and thus
E allowed-Effect ofabsence ofcertain facts in the averment could be considered
at trial-A suit for decree in foreign currency may not be liable to be
dismissed merely on the ground offailure to mention appropriate facts in the
averment-Direction issued-Pleadings-Amendment of pleadings-Debt
Recovery Tribunal Procedure Rules, 1987-Rule 7-Recovery of Debt due to
F Banks and Financial Jnstillltions Act, 1993.

Words and Phrases:

'Amendment ofpleading '-Meaning of in the context ofsuit for recovery
in foreign currency.

G An Indian firm, entered into a contract with a foreign firm. The Indian
firm took an advance from the foreign firm against the bank guarantee through
the Respondent Bank. Later the foreign firm took loan from the Appellant
Bank after assigning its rights in the bank guarantee in favour of the Appellant
Bank. On repudiation of the contract, Appellant-Bank invoked the bank
H 836
P.N.B. v. INDIAN BANK 837
guarantee for recovery of balance unrecovered advance against the Respondent- A
Bank and the firm. On denial of the payment, it filed a money suit against the
Respondent Bank and the foreign firm. The Appellant-Bank also moved an
application for amendment of pleading !lnder the provisions of Code of Civil
Procedure and the Recovery of Debt Due to Banks and Financial Institutions
Act for getting the relief in foreign currency (US Dollars) and for clarifications
for getting relief in foreign currency only. The amendment was allowed by the B
Debt Recovery Tribunal. However, the order was reversed by the High Court.
Hence the present appeal.

It was submitted for the appellant that while considering application for
amendment of pleading the Court shQuld take into account all the averments C
made in different parts of the Plaint/relief clauses etc. before arriving at a
conclusion; and that there were categorical averments made seeking decree
in foreign currency only.

On behalf of the Respondent-Bank, It was submitted that the appellant
has frozen its relief in the Plaint by demanding relief in foreign currency. D
Allowing the appeal, the Court

HELD: I. I. A suit, with a prayer for decree in foreign currency will not
be liable to be dismissed for mere omission to make an averment that decree
may be passed subject to permission of the FERA authorities or where it has E
not been indicated while making an averment regarding valuation of the suit
for court fee and jurisdiction. So far as the averment regarding an undertaking
that the plaintiff would make good the deficiency in the court fee, absence of
such an a\'erment would not be fatal to the prayer made for the amendment
since such a direction can always be given by the Court and on failure to pay F
the deficient court fee, the decree would be confined to the extent the court fee
is paid. (845-G, H; 846-A, Bf

Pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil and Ors., AIR
(1957) SC 363; Ganjam Jaikishan Joshi v. Prabhalar Mohan/a/ Ka/war,
(1990( I SCC 166 and Sampat Kumar v. Ayyakannu and Anr., (2002( 7 SCC G
559, relied on.

Forasol v. Oil & Nawra/ Gas Commission, AIR (1984) SC 241,
distinguished.

L.J. Leach & Co. v. Mis. Jardine Skinner & Co. Lid., AIR (1957) SC H
838 SUPREME COURT REPORTS [2003] 3 S.C.R.

A 357, referred to.

1.2. In some paragraphs and in the caption of the cause title of the suit,
rupee equivalent of US Dollars has been indicated first and dollar later.as well
as in prayer but by reading the Plaint as a whole, it would not mean that there
is no claim and prayer for decree in terms of dollars at all. (849-CI
B
Nichhalbhai Vakkavgau and Ors. v. Jaswantlal Zinabhai and Ors., AIR
(1966) SC 997 and Corporation of the City of Bangalore v. M Papaiah and
Anr., (1989( 3 SCC 612, relied on.

Even ifthere is some vagueness in the Plaintiffs case regarding the
c claim 1.3.
and decree in terms of dollar or rupee but there can always be an
amendment of the pleading to clear such confusions and vagueness. By seeking
an amendment of pleading, nothing fresh or new is sought to be added. No new
relief is sought to be added, only rupee equivalent of the dollar, is sought to be
deleted and a clear prayer for decree in dollars would, resultantly remain there,
D by deletion of rupee component equivalent to the dollars. (849-D, GI

laxmidas Dahyabhai Kabarwala v. Nanabhai Chunilal Kabarwala and
Ors., (196412 SCR 567, relied on.

1.4. Delay in moving the amendment application would also not be material
E since proceedings are still not at the trial stage. The defendant is in no way
taken by surprise by allowing the amendment. Such an averment is already
there in the plaint at places more than one as well as in the relief clause. The
defendant would not be called upon to answer any new case. An amendment
would generally not be disallowed except where a time barred claim is sought
F to be introduced, there too it would be one of the factors for consideration or
where it changes the nature of the suit itself or it is malafide or the other

G
party cannot be placed in the same position had the plaint been originally filed
correctly. But no such element is present in the case so as to disallow the
amendment in the plaint. No undue advantage is sought to be taken by such
amendment. The amendment only clears the confusion, if any, as to the terms
in which relief is sought. It does not revive a time barred and dead claim, nor
-
changes the nature of the suit. In the facts and circumstances, it cannot be
said to be ma la fide either. (850-A-DI -
1.5. The effect of absence of some averments. The appellant has given
H its explanation about such averments or absence thereof, but it is not necessary
P.N.B. v. INDIAN BANK [BRIJESH KUMAR, J.] 839
to consider the merit of the same and record a finding at this stage. It will be A
a matter for decision in the trial. (850-F, GI

Foraso/ v. Oil & Natural Gas Commission, AIR (1984) SC 241, referred
to.

1.6. The difference in amount being huge, would not be a legitimate B
ground to deny amendment of the plaint which otherwise, passes the test of all
the conditions under which normally amendment is to be allowed. It cannot be
doubted that plaintiff intended and had asked for a decree in terms of dollars.
The defendant was quite aware of the same and doubts, if any, by converting
equivalent of dollars in rupees would be dispelled by the amendment sought. C
The decree in terms of dollars was prayed to be passed; the same position is
reiterated by addition and deletion of certain parts of averments of the relief
clause; no new claim has been made out and so no question of freezing of any
claim or any such claim having become barred by time arises. (851-A-CI

United India Insurance Co. Ltd and Ors. v. Patricia Jean Mahajan and D
Ors., 120021 6 SCC 281, distinguished.

1.7. Merits of the case would be subject matter of the trial and ultimate
judgment to be passed in the case. The application for amendment was moved
with some delay. lfthe plaintiff had been more careful at the time of filing of E
the plaint, and had made the prayers more clearly, it would not have been
necessary to move the amendment application. Hence the amendment is allowed
with costs. (851-F, GI

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7072 of200 I.

From the Judgment and Order dated 12.3.2001 of the Delhi High Court F
in C.W.P. No. 1831 of2000-C.

Soli J. Sorabjee, Attorney General, Mohit Chaudhary, Dhruv Mehta,
Jagat Arora, Anand Misra, Ashim Sood for Mis. K.L. Mehta, & Co. for the
Appellant.
G
K.K. Venugopal, B.R. Narang and Balraj Dewan for the Respondents.

The Judgment of the Court was delivered by

BRIJESH KUMAR, J. The dispute brought before this Court by means
of instant appeal relates to refusal to allow amendment of the plaint, in the H
840 SUPREME COURT REPORTS (2003) 3 S.C.R.

A suit for money decree filed by the appellant against the respondent in Delhi
High Coui1, which, later on has been transferred to the Debt Recovery Tribunal,
Delhi.

The main contesting respondent in Indian Bank and respondent no.2-
M/s. Indo-Europe Foods Ltd. has been impleaded as Proforma Respondent in
B this appeal. The reference of respondent wherever made in th is judgment is
for respondent no.I Indian Bank and wherever the word USO has been used
it stands for U.S. Dollars.

As a brief background, to better understand the controversy involved,
it may only be indicated that a contract was entered into between Oswal Agro
C Mills Limited and Indo Europe Foods Limited of United Kingdom. An amount
ofUSD 6.00 million was advanced to Oswal Agro by lndo Europe which was
liable to be adjusted against bills of Oswal Agro on export of agro products
by Oswal Agro to Indo Europe. Oswal Agro furnished a Bank Guarantee of
Indian Bank to the extent of USO 6.00 million, in favour of lndo Europe to
D cover the advance made ~y lndo Europe. The Bank guarantee dated February
3, 1983 was executed by Indian Bank in favour of lndo Europe Foods Limited,
who is beneficiary of the guarantee. A few relevant clauses of the Bank
Guarantee are quoted below:

"GUAR'ANTEE
E
(a) In consideration of the Beneficiary entering into the contract and
making the advance payment, the guarantor hereby irrevocably and
unconditionally guarantees to the beneficiary the due and puntual
repayment, whether at stated maturity or acceleration or otherwise of
the advance payment of OAML under or pursuant to the contract in
F accordance with its terms and agrees that if and whenever OAML
shall fail to pay any part of such sum when due, as stated above, the
Guarantor shall forthwith on written demand by the Beneficiary pay
an amount equal to such sum to the Beneficiary in the currency and
in the manner required of OAML by the contract in respect of such
sum.
G
xxx xxx xxx
.
(G) The maximum contingent liability of the guarantor hereunder shall
not exceed USO 6,000,000 (United States Dollars Six million only)

H xxx •'
P.N.B. v. iNDIAN BANK [BRIJESH KUMAR, J.) 841

GENERAL A

xxx xxx xxx
(C) The united States Dollar is the currency of the account and
payment for each and every sum at any time due from the Guarantor
hereunder. B
(D) On each date on which an amount is due from the Guarantor
hereunder the Guarantor shall make the same available to the
Beneficiary by payment in dollars in immediately available and freely
transferable funds to the Beneficiary's account No. 36020 with Punjab
National Bank Moor House, 119 London Wall, London B024-5HJ, C
(U.K.).

xxx xxx xxx
Later, lndo Europe took a loan ofUSD 6.00 million from Punjab National
Bank, assigning its rights under the above said Bank Guarantee in favour of D
Punjab National Bank. The notice of assignment of Bank Guarantee given by
• Indian Bank in favour of lndo Europe to the appellant-Punjab National Bank
was intimated to the Indian Bank. It appears that in I 986 the contract between
Oswal Agro Mills and Indo Europe came to an end, as a result of which on
14.8. 1986, the Punjab National Bank invoked the Bank guarantee as assignee E
of the lndo Europe, requiring Indian Bank to pay USO 52,37,284.54 as balance
of unrecovered advance. The amount having not been paid, the Punjab
National Bank ultimately filed a suit against the Indian Bank and M/s. Indo-
Europe Foods Ltd. impleading them as Defendants no. I and 2 respectively.
The following prayers were made as per paragraph 50 of the plaint which is
quoted below:- F
"The plaintiff prays for a decree against the defendants jointly and
severally for;
(i) Rs. 8,79,86,380.27 equivalent US dollars 5,237,284.54;
(ii) Rs. 2,87,47,590.48 equivalent US dollars 17, 11,166. 10 on account of G
interest upto the date of the suit;
(iii) Future interest from the date of suit till recovery at the rate of 2%
over London Inter Bank offered rate;
(iv) Costs of the suit;
H
842 SUPREME COURT REPORTS (2003) 3 S.C.R.

A (v) For further directions and orders that decreetal amount may be
paid to plaintiff in U.S. Dollars;

(vi) Any other relief that this Hon'ble Court may deem fit on the facts
and circumstances of the case."

B At this juncture, it will also be appropriate to peruse the averments
mac.le in paragraphs 42 and 46 of the plaint which read as under:-

"42. That the plaintiff is entitled to receive recover and decree for US
Dollars 5,237,284.54 and interest thereon of US dollars 17, 11, 166.10 at
the agreed rate. The interest has been computed upto I 0.8.1989
exclusive of 11.8.1989.
c
xxx xxx xxx
46. That in terms of the agreement of guarantee dated 3.2.1983 made
by Indian Bank, defendant, the United States dollar is the currency of
account and payment for each and every sum at any time due from
D the guarantor, defendant, Indian Bank. The defendant Indian Bank is
obliged and bound to make available to the beneficiary plaintiff the
payments under the guarantee, as agreed, in dollars in immediately
available and freely transferable funds. The plaintiff prays for decree
in US dollars. In the alternative, if the Hon'ble Court holds not to
grant decree in US dollars, then it may be allowed in equivalent value
E
in rupees."

In the title of the plaint in it was written as follows:

"Suit for recovery of Rs. 8,79,86,380.27 equivalent of US Dollars
5236284.54 interest rupees 2,87,47,590.48 equivalent of dollars
F
17, 11,166.10 and costs."

The plaintiff-appellant moved an application for amendment of the plaint
under Order 6 Rule 17 read with Section 151 of CPC and Section 22 of the
Recovery of Debts due to Banks and Financial Institutions Act, 1993. Paragraphs
G 5,6,7, of the amendments are as under:

"5. That the relief claimed in the suit has been mentioned, due to a
mistake or oversight in Indian Rupees equivalent of United States
Dollars and likewise the amount interest claimed is also reflected in
the same manner.
H
P.N.B. v. INDIAN BANK [BRIJESM KUMAR, J.J 843
6. That the applicant wishes to delete the equivalent part of the A
conversion amount of US Dollars into Indian Rupees and wishes to
retain the relief in US Dollars only, which is as per the contract of
guarantee issued by the Indian Bank itself.

7. That in view of these facts and circumstances, wherever there is
reference to the recoverable amount being Rs. 8, 79,86,380.27 equivalent B
to USO 5,237,284.54 as the principal amount and Indian Rupees
2,87,47,590.48 equivalent to USD I 7, 11, 166.10 as interest, the same
may be read in US dollars only and the Indian Rupees component may
be allowed to be deleted so as to claim the relief in US Dollars only."

Cause title was sought to be amended as follows: c
"Suit for recovery ofUSD 52,37,284.54 towards the principal amount
and interest of USO 17, 11, 166. I0 and costs."

Some other paragraphs were also so.ught to be added. So far as the
prayer clause is concerned, it is sought to be amended to the following effect: D

"The plaintiff prays for a decree against the defendants jointly and
severally for;
(i) US dollars 5,237,284.54 (United States Dollars fifty two lacs thirty
seven thousand two hundred eighty four and fifty two hundred
eighty four and fifty four cents) towards the principal amount. E
(ii) US Dollars 17,11,166.10 on account of interest at the contractual
rate i.e. 2% over the LIBOR rate, which is 9.45% per annum with
quarterly rest, as on the date of filing of the suit;
(iii) Future interest from the date of suit till recovery at the rate 2% F
over London Inter Bank Offered Rate;
(iv) Costs of the suit;
(v) Further directions and orders that decreetal amount may be paid
to plaintiff in US Dollars;
(vi) Any other relief that this Hon'ble Court may deem fit on the facts
G
and circumstances of the case."

The application of amendment was opposed. It was, however, allowed
by the Debt Recovery Tribunal and the appeal preferred to The Debt Recovery
Appellate was dismissed. The respondent Indian Bank filed a writ petition H
844 SUPREME COURT REPORTS (2003] 3 S.C.R.

A challenging the order of the Debt Recovery Appellate Tribunal M/s. lndo-
Europe Foods Ltd. was also impleaded as respondent no.2 in t~e Writ Petition.
The Delhi High Court allowed the writ petition and set aside the orders
passed by the Debt Recovery Tribunal and the Appellate Tribunal and rejected
the application for amendment.

B The main objection which seems to have been pressed by the respondent
before the High Court is that the plaintiff has to decide at the time of filing
of the suit as to whether the claim is to be made in Indian currency or the
foreign currency. Once the plaintiff choose to claim the amount in Indian
currency there was no occasion to allow the plaintiff to change its option and
C claim decree in terms of dollars and for the said proposition reliance has been
placed on a case reported in AIR (1984) SC 241, Forasol v. Oil and Natural
Gas Commission. The other contention was that the amendment is sought
after a long lapse of time, namely, 9 years so the additional financial liability
resulting as a consequence of the amendment would be time barred. The High
Court after referring to the decision in the case of Forsal supra observed that
D in case plaintiff choose to claim relief in foreign currency, the formalities
required for such relief should have been spelt out in the plaint, which has
not been done in the present case, viz., it is not indicated that the prayer for
decree in foreign currency is subject to permission of the concerned authorities
under Foreign Exchange Regulation Act, 1973 and further that in case no
E pennission is granted or the amount is not paid in foreign currency the same
be paid at the rate of exchange prevailing on the date of Judgment. An
undertaking should also be given for making good the deficiency in the court
fee. In respect of Clause V of the prayer, the High Court observed that the
place where the said clause has been inserted shows that the intention was
to reconvert the amount from rupee to USO at the time of the payment of the
F said amount. The High Court also referred to paragraph 49 of the plaint, which
indicates the amount in rupee for the purpose of payment of court fee and
jurisdiction. It is observed that it has not been that the claim has ?een
converted into rupee for the purposes of court fee and jurisdiction only. It
is then observed that if amendment is allowed it will increase the amount of
G claim by rupee 22 crores namely, more than 3 times of the original claim which
may cause injustice to the Indian Bank as otherwise the claim would be barred
by limitation and in that connection the High Court has referred to decisions
reported in 83 (2000) DLT 277, Mrs. Jane/Anne Woo/gar James and Ors. v.
Jaypee Hotel ltd. and AIR ( 1957) SC 363, Pirgonda Hongonda Patil v.
Kalgonda Shidgonda Patil and Ors. On the above reasoning writ petition
H was allowed and the prayer for amendment has been refused.
P.N.B. v. INDIAN BANK [BRIJESH KUMAR, J.) 845
The High Court observed that the order of the Debt Recovery Tribunal A
allowing the amendment was a non-speaking order and so far the Debt
Recovery Appellate Tribunal is concerned, it was mainly influenced by the
averment made in Paragraphs 42 and 46 of the plaint read with prayer (v),
according to which plaintiff had claimed that it was entitled to the decree in
U.S. Dollars and prayed for decree in those terms.
B
We feel, it would be appropriate to consider the decision mainly relied
upon by the High Court viz. in the case of Forasol supra. As a matter of fact,
it does not pertain to amendment of the pleadings at all. A contract was
entered into between the French company Forasol and the ONGC according
to which currency account and the payment was to be made in French Francs, C
except a part of it. The suit was decreed but the decree did not indicate the
rate of conversion. It was held that it could be as prevailing on the date of
judgment or any date near about or any date when the amount became
payable or the date of the filing of the suit. It was also found that in absence
of permission under FERA or due to any other impossibility to pay in Francs,
the money could be paid in Indian currency otherwise it might frustrate the D
decree itself. In connection with the above controversy, it was observed that"
the Court must provide for such an eventuality. It is also observed that for
the purpose of pecuniary jurisdiction of the Court, the plaintiff must in his
plaint give the Rupee equivalent of the foreign currency claimed by him at
the rate of exchange prevalent on the date of institution of the suit. It has E
been observed that it would be convenient to set out the practice which
ought to be followed in suits claiming relief in foreign currency e.g. it would
be proper to make a prayer for such a decree subject to permission of
concerned authorities under the Foreign Exchange Regulation Act, 1973. The
plaintiff is also supposed to give an undertaking in the plaint that he would
make good the deficiency in the Court fee on account of difference in the rate F
of exchange. The plaintiff must clearly indicate that he would like the claim
to be decreed in terms of foreign currency or Indian currency. The option
should be exercised while filing the suit. We, however, fail to appreciate as
to in what manner the practice set out and proposition laid in the case of
Forasol supra would come in the way of amendment of the plaint, prayed for. G
A suit, with a prayer for decree in foreign currency will not be liable to be
dismi~sed for mere omission to make an averment that decree may be passed
subject to permission of the FERA authorities or where it has not been
indicated, while making an averment regarding valuation of the suit for court
fee and jurisdiction, as in the present case in Para 49 of the plaint, that it was
for that purpose only. So far the avernment regarding an undertaking that the H
846 SUPREME COURT REPORTS (2003] 3 S.C.R.

A plaintiff would make good the deficiency in the court fee, in our absence of
such an avernment wou Id also not be fatal to the prayer made for the
amendment since such a direction can always be given by the Court and on
failure to pay the deficient court fee, the decree would be confined to the
extent the court fee is paid. Otherwise also the learned counsel for the
appellant has drawn our attention to the Debt Recovery Tribunal (Procedure)
B Rules, 1987 where under Rule 7 maximum court fee payable is Rs. 1.5 lacs. It
is submitted that court fee paid in this case is much more and the matter is
now pending before the Debt Recovery Tribunal.

We may now peruse the decision of this Court in the case of Pirgonda
C (supra). The principle regarding the law of amendment has been laid in the
last paragraph of the judgment but we may quote the following relevant
passage which reads as under:

"We think that the correct principles were enunciated by Batchelor J.
in his judgment in the same case, viz., Kisndas Rupchand's case
D [1900] ILR 33 Born. 644 when he said at pp 649-650; "All amendments
ought to be allowed which satisfy the two conditions (a) of not
working injustice to the other side, and (b} of being necessary for the
purpose of determining the real questions in controversy between the
parties ..... but I refrain from citing further authorities, as, in my opinion
they all lay down precisely the same doctrine. That doctrine, as I
E understand it, is 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. It is merely a particular
case of this general rule that where a plaintiff seeks to amendment by
setting up a fresh claim in respect of a cause of action which since
F
the institution of the suit had become barred by limitation, the
amendment must be refused; to allow it would be to cause the defendant
an injury which could not be compensated in costs by depriving him
ofa good defence to the claim. The ultimate test therefore still remains
the same; can the amendment be allowed without injustice to the other
G side, or ·can it not?" Batchelor J. made these observations in a case
where the claim was for dissolution of partnership and accounts the
plaintiffs alleging that in pursuance of a partnership agreement they
had delivered Rs. 400 I worth of cloth to the defendants. The
Subordinate Judge found that the plaintiffs did deliver the cloth but
came to the conclusion that no partnership was created. At the appellate
H
P.N.B. v. INDIAN BANK [BRIJESH KUMAR, J.) 847
stage, the plaintiff abandoned the plea of partnership and prayed for A
leave to amend by adding a prayer for the recovery of Rs. 400 I. At
that date the claim for money was barred by limitation. It was held
that the amendment was rightly allowed, as the claim was not a new
claim.

The same principles, we hold, should apply in the present case. B
The amendments do not really introduce a new case, and the application
filed by the appellant himself showed that he was not taken by
surprise; nor did he have to meet a new claim set up for the first time
after the expiry of the period of limitation."
(Emphasis supplied.) C

Another decision which has been relied upon on behalf of the appellant is
reported in [1990] 1 SCC 16.6. Gajanan Jaikishan Joshi v. Prabhalar Mohan/al
Ka/war, wherein the suit was for specific performance of the contract. No
averments as per Section I 6(C) of the Specific Relief Act to the effect that
the plaintiff was ready and willing to fullfil its obligation, under the contract D
were made in the plaint. The issue relating to this question was to be tried
as preliminary issue at which stage an application for amendment was made
for adding the necessary averments complying with Section 16 (C) of the
Specific Relief Act. The application was opposed inter alia on the ground
of limitation. The objections were rejected and the application for amendment
was allowed and this Court observed that by the amendment indicated above E
no fresh cause of action was sought to be introduced by the plaintiff and all
that was ought to be done was to complete the cause of action for specific
performance which relief had already been prayed for. Referring to the decision
of Pirgonda (supra) it was observed that all amendments ought to be allowed
which do not result in injustice to the other side and would be necessary for
purposes of determining the real question in controversy. Yet another
F
consideration would be viz. where the other party cannot be placed in the
same position, if the plea had been correctly taken originally, such an
amendment would cause him an injury which could not be compensated in
costs. It is also observed that where a fresh claim is sought to be set up by
amendment which would be barred by limitation it may entail rejection of G
prayer for amendment. The court also made reference to a decision in the case
of L.J. Leach and Co. v. Mis. Jardine Skinner and Co. ltd. reported in AIR
( 1957) SC 357 and quoted a passage from the said case as follows:

"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 H
848 SUPREME COURT REPORTS [2003) 3 S.C.R.

A 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."

Another decision referred to is reported in (2002] 7 SCC 559, Sampat Kumar
B v. Ayyakannu and Anr. It has been observed in this case that mere delay in
making the application for amendment may not be very relevant but the stage
of the proceedings may be more relevant factor to be taken into account. The
amendments at pre trial stage may ordinarily be permitted. It is also observed
that where the basic structure of the suit remains unchanged and a cause of
C action sought to be introduced which arose during the pendency of the suit
should be allowed to be introduced including the nature of the relief.

On behalf of the appellant it has been submitted that while considering
such questions like amendment of plaint etc. the plaint should be read as a
whole and all avennents made in different paragraphs and clauses including
D relief clause should be taken into account; rather than to confine to certain
avennents made here and there and in one, or the other paragraph, or the relief
clause, leaving aside the rest. In this connection a reference has been made
to a decision of this court reported in AIR (1966) SC 997, Nichha/bhai
Val/abhai and Ors. v. Jaswantlal Zinabhai and Ors. Yet another decision on
the point as relied upon by the appellant is reportc;:d in (1989] 3 sec 612,
E Corporation of the City of Bangalore v. M Papaiah and Anr. The relief for
permanent injunction was prayed for based on claim of title over the property
but no declaration of title in the property was prayed nor that for possession.
The amendment sought in such circumstances was allowed observing that
the plaint has to be read as a whole and the question of amendment should
F be considered in that light and not merely on the basis of the prayer clause.
In this light the appellant submits that it is only appropriate that the averments
made in the plaint in general may be read as a whole. It is submitted that the
background in which the controversy arose, more particularly relating to claim
in dollars would also be relevant for the purpose. In that connection, as
indicated earlier, the tenns of the bank guarantee provide that US Dollar is the
G currency of account and payment in dollars for each and every sum at any
time due from guarantor. The said bank guarantee was assigned in favour of
the plaintiff appellant by lndo Europe. Notice of demand given by the plaintiff
by letter dated 14.8.1996 also called upon the defendant No. I to pay the
outstanding amount of USO 5,237,284.54. Again the demand was reiterated for
H payment in USO 5,237,284.54, the demand was repeated subsequently also for
P.N.B. v. INDIAN BANK [BRIJESH KUMAR, J.] 849
payment in dollars. Para 42 of the plaint quoted earlier clearly indicates that A
plaintiff is entitled to receive, recover and decree for USD 5,237,284.54. Again
the appellant refers to para 46 of the plaint which has also been quoted ea_rlier,
praying for decree in USD and in the alternative, if not so decreed in dollars,
then it may be allowed in equivalent value in rupees. Prayer (v) seeks a
direction that decreetal amount be paid in US Dollars. In the background
indicated above and the categorical averments made in the plaint including B
the prayer in Clause (v), it has been submitted that in effect and for all
purposes, decree in dollars has been prayed for, which fact is very much in
the knowledge of the defendant. True, as we feel, in some paragraphs and in
the caption of the cause title of the suit, rupee equivalent of USD has been
,.. indicated first and dollar later as well as in prayer No. (i) and (ii) but that C
would not mean that there is no claim and prayer for decree in terms of dollars
at all. We find it to be so by reading the plaint as a whole.

It can, however, be said that there is some vagueness in the plaintiff's
case regarding the claim and decree in terms of dollar or rupee but there can
always be an amendment of the pleading to clear such confusions and D
vagueness. In [1964] 2 SCR 567, laxmidas Dahyabhai Kabarwala v. Nanabhai
Chunilal Kabarwala and Ors., it has been held that amendment can be
refused when the effect of it would be to take away from a party a legal right
which had accrued to him by lapse of time. It may be so when fresh allegations
are added or fresh reliefs are sought by way of amendment. But where the E
amendment merely clarifies an existing pleading and does not in substance
add to or alter it, there is no good reason not to allow the same nor even the
bar of limitation would come in the way. No fresh allegations of facts have
been introduced/or added nor any fresh cause of action or new relief is
sought to be added. A matter already contained in the original pleading can
always be clarified and such an amendment should ordinarily be allowed and F
in such a case the question of bar of limitation would not be attracted. The
case in hand is not one in which something fresh or new is sought to be
added. The claim in terms of dollars has been made in different paragraphs
of the plaint as well as in Clause (v) of the prayer clause, no new relief is
sought to be added, only rupee equivalent of the dollar, is sought to be
deleted and ·a clear prayer for decree in dollars would, resultantly remain there, G
by deletion of rupee component equivalent to the dollars. In our view, no
question of introducing any new case, a new cause of action or seeking 'new
relief which may be barred by limitation arises. It is an amendment more
clarificatory in nature.
H
850 SUPREME COURT REPORTS (2003) 3 S.C.R.

A We would also like to observe that delay in moving the application
would also not be material since proceedings are still not at the trial stage.
The defendant is in no way taken by surprise by allowing the amendment.
Such an averment is already there in the plaint at places more than one as
well as in the relief clause. The defendant would not be called upon to answer
B any new case nor would be caught by surprise.

The position that emerges from the decisions referred to earlier is that
an amendment would generally not be disallowed except where a time barred
claim is sought to be introduced, there too it would be one of the factors for
consideration or where it changes the nature of the suit itself or it is malafide
C or the other party cannot be placed in the same position had the plaint been
originally filed correctly, that is to say, the other side has lost right of a valid
defence by subsequent amendment. We find that no such element is present ·
in the case in hand so as to disallow the amendment in the plaint. No undue
advantage is sought to be taken as the claim in terms of dollars is mentioned
in the plaint and the relief clause and the defendants are not to be taken by
D surprise. The amendment ·only clears the confusion, if any, as to the terms in
which relief is sought. It does not revive a time barred and dead claim, nor
changes the nature of the suit. In the facts and circumstances, it cannot be
said to be malafide either.

We find that the grounds which have been indicated by the High Court
E in refusing the amendment that desired undertaking was not given in the
plaint, that in case of deficiency in the court fee it would be made good by
the plaintiff or that decree in foreign currency may be passed subject to
permission of the concerned authorities under the FERA Act or such
requirements as set out by way of practice in the case of Forasol supra. The
F effect of absence of such averments could very well be considered at the time
of the trial and decision of the suit rather than at the time of considering the
application for amendment. The appellant has given its explanation about
such averments or absence thereof, but it is not necessary to con.sider the
merit of same and record a finding at this stage. It will be a matter for decision
in the trial.
G
The submission made on behalf of the respondent that at the time of
filing of the suit the appellant had frozen its relief by converting the dollar
into rupee and making a claim in terms of rupee is not tenable. There is no
occasion of freezing the relief nor the fact which weighed with the High Court
H and urged before us that there would be a huge difference of amount in terms
P.N.B. v. INDIAN BANK (BRIJESH KUMAR, J.] 851
of money if suit is decreed in dollars. The difference in amount being huge, A
would not be a legitimate ground to deny amendment of the plaint which
otherwise, passes the test of all the conditions under which normally
amendment is to be allowed. Considering the totality of the averments made
in the plaint under different paragraphs a~ well as clause (v) of the relief
clause, it cannot be doubted that, plaintiff intended and had asked for a
decree in terms of dollars. The defendant was quite aware of the same and B
doubts, if any, by converting equivalent of dollars in rupees in some paragraphs
of the plaint and Clauses (i) and (ii) of the prayer clauses, would be dispelled
by the amendment sought. The decree in terms of dollars was requested to
be passed; the same position is reiterated by addition and deletion of certain
parts of averments of the relief clause; n.o new claim has been made so no C
question of freezing of any claim or any such claim having become barred by
time arises. A reference has been made to a decision reported in (2002] 6 SCC
page 281, United India Insurance Co. ltd. and Ors. v. Patricia Jean Mahajan
and Ors., is of no help to the respondent, Paragraph 40 of the judgment
particularly referred to, only indicates that in that case prayer was for passing
a decree in tenns of rupee. There was no claim for relief in terms of dollars, D
the rate at which the dollar was converted that amount was decreed and it
was also received by the claimants. There was no prayer for amendment
seeking relief in terms of dollars. In those circumstances it was found at the
appellate stage that there was no occasion to apply the exchange rate, as
prayed, on behalf of the respondent. In case in hand the plaintiff has taken E
care to amend the plaint to clarify the relief which had been prayed for
originally as well.

We, however, feel that so far the merits of the case is concerned, it
would be subject matter of the trial and ultimate judgment to be passed in the
case. The application for amendment was moved with some delay. If the F
plaintiff had been more particular at the time of filing of the plaint, and had
made the prayers more clearly, it would not have been necessary to move the
amendment application. We therefore feel that it is a case where the amendment
may be allowed with imposition of costs.

In the result, the appeal is allowed and the impugned order passed by G
the High Court is set aside. The order allowing the amendment of the plaint,
passed by the Debt Recovery Tribunal, as upheld by the appellate Tribunal,
is restored with modification that the appellant shall pay to the respondent
no. I costs amounting to Rs. 25,000 within a period of two months from today.

S.K.S. Appeal allowed H