STATE BANK OF HYDERABADversusTOWN MUNICIPAL COUNCIL

                     STATE BANK OF HYDERABAD                                      A
                                      v.
                      TOWN MUNICIPAL COUNCIL

                           DECEMBER l, 2006

              [S.B. SINHA AND MARKANDEY KA TJU, JJ.]                              B


       Code of Civil Procedure, 1908-Proviso to Order VI, Rule 17-Suit
filed in I 998-!J.mendment of plaint-Disallowed by High Court on basis of
proviso appended to Order VJ, Rule I 7-Held: Proviso came into force w.ej C
 I. 7.2002-lt did not apply to the case in hand-High Court failed to invoke
the law as it then existed

     In a suit for decree of injunction in respect of property, application
was filed for grant of leave to amend the plaint. The application was
allowed. High Court by reason of the impugned judgment held that the              D
said application for amendment was not maintainable in view of the
proviso appended to Order VI, Rule 17, CPC and on the said finding the
order granting leave to amend the plaint was set aside.

      In appeal to this Court the questions which arose for consideration
are: (1) whether the proviso appended to Order VI, Rule 17, CPC was               E
inapplicable in the instant case and hence the High Court erred in relying
upon the same and 2) whether the submission of Respondent that the
application for amendment being belated, the same should not have been
entertained, is unjustified.
                                                                                  F
     Allowing the appeal and remitting the matter to the High Court, the
Court

      HELD: 1. Proviso appended to Order VI, Rule 17, CPC was added
by the Code of Civil Procedure (Amendment) Act, 2002 which came into
force w.e.f. 1-7-2002. The suit having been filed in the year 1998, proviso       G
to Order VI, Rule 17 of the Code shall not apply. As the High Court has
failed to invoke the law as it then existed, it was not correct in its view.
The High Court relied upon the said proviso and opined that having regard
thereto the plaintiff was obligated to establish that in spite of due diligence

                                     919                                          H
    920                        SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R.

A   it could not have raised the matter before commencement of the trial of
    the suit. The High Court evidently committed an illegality in relying upon
    the said provision. (921-F; 922-C-EJ

         2. It is one thing to say that the application for amendment suffers
    from delay or laches but it is another thing to say that thereby the
B   defendant was prejudiced. It is also not a case of the respondent that by
    reason of such an amendment, the relief which could not be granted having
    regard to the law of limitation has become available. The Court even in
    such a case is not powerless although the question as to whether the relief
    sought for would be otherwise barred by limitation is a relevant factor to
C   determine the issue. (922-F-GI

          L.J. leach and Company ltd v. Jardine Skinner and Co., [1957] SCR
    438; Pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil and Ors., (19571
    SCR 595; Rajesh Kumar Aggarwal and Ors. v. K.K. Modi and Ors., (2006] 4
    SCC 385; Pankaja and Anr. v. Yellappa (Dead) By LRs. and Oi·s., (20041 6
D   SCC 415; Baldev Singh & Ors. v. Manohar Singh & Anr. etc., JT (2006) 7
    SC 139; Gajanan Jaikishan Joshi v. Prabhakar Mohan/al Ka/war, (1990( I
    SCC 166 and A.K. Gupta and Sons v. Damodar Valley Corporation, (1966)
    1 SCR 796, referred to.

          CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5294 of2006.
E
         From the final Common Judgment and Decree dated I6-6-2005 of the
    High Court of Kamataka at Bangalore in M.S.A. Nos. 132 and 133/2003.

         Rajeev Dhavan, A.V. Rangam, A. Ranganadhan and Buddy A.
    Ranganadhan for the Appellant.
F
          S. Nanda Kumar, Satish Kumar, Mayilsamy, Renuga Devi, Subramani
    V., and V.N. Raghupathy for the Respondent.

          The Judgment of the Court was delivered by

G         S.B. SINHA, J. Leave granted.

           Appellant-Bank filed a suit against the respondent. The suit related to
    ownership of a plot ad measuring 610 ft. x 250 ft. situated in the town Yadgir.
    It .was purchased by the plaintiff in a public auction. Allegedly, the respondent
H   is now claiming back the said amount. The suit was initially filed for a decree
      STATE BANK OF HYDERABAD v. TOWN MUNICIPAL COUNCIL[S.B. SINHA, J.] 921

for injunction. The respondent med another suit in the same court also for a A
suit for permanent injunction restraining the Bank from constructing any
building. The suit of the appellant was dismissed whereas the suit of the
respondent was decreed. Appeals were preferred there against by both the
parties. In the said appeals, an application was filed for grant of leave to
amend the plaint. The said application for grant of leave to amend the plaint B
was allowed by the appellate court by an order dated 7.04.2003. The appellate
court remanded both the suits to the trial court for their disposal afresh on
merits. Second Appeals were filed by the respondent herein before the High
Court. The High Court by reason of the impugned judgment opined that the
said application for amendment was not maintainable in view of the proviso
appended to Order VI, Rule 17 of the Code of Civil Procedure (Code). On C
the said finding not only the order granting leave to amend the plaint was set
aside, the appeals were also allowed and the matter was remitted to the first
appellate court for its consideration afresh in accordance with law.

     The appellant is, thus, before us.
                                                                               D
      The short question which arises for consideration is as to whether the
proviso appended to Order VI, Rule 17 of the Code is applicable in the
instant case.

     Order VI, Rule 17 of the Code reads, thus:
                                                                               E
       "The Court may at any stage of the proceedings allow either party to
       alter or amend his pleadings in such manner and on such terms as
       may be just, and all such amendments shall be made as may be
       necessary for the purpose of determining the real questions in
       controversy between the parties."
                                                                               F
      Proviso appended thereto was added by the Code of Civil Procedure
(Amendment) Act, 2002 which came into force with effect from I .07.2002.
It reads as under:

       "Provided that no application for amendment shall be allowed after
       the trial has commenced, unless the Court comes to the conclusion       G
       that in spite of due diligence, the party could not have raised the
       matter before the commencement of trial."

     Section 16(2) of the Amending Act of 2002 reads as under:

       "16(2) Notwithstanding that the provisions of this Act have come        H
    922                        SUPREME COURT REPORTS [2006) SUPP. 9 S.C.R.

A           into force or repeal under sub-section ( l) has taken effect, and without
            prejudice to the generality of the provisions of section 6 of the General
            Clauses Act, 1897

            (a) ***    ***
B           (b) the provisions of rules 5, 15, 17 and 18 of Order VI of the First
            Schedule as omitted or, as the case may be, inserted or substituted by
            section 16 of the Code of Civil Procedure (Amendment) Act, 1999
            and by section 7 of this Act shall not apply to in respect of any
            pleading filed before the commencement of Section 16 of the Code
            of Civil Procedure (Amendment) Act, 1999 and Section 7 of this
C           Act;"

          In view of the said provision there cannot be any doubt whatsoever that
    the suit having been filed in the year 1998, proviso to Order VI, Rule 17 of
    the Code shall not apply.

D          The High Court relied upon the said proviso and opined that having
    regard thereto the plaintiff was obligated to establish that in spite of due
    diligence it could not have raised the matter before commencement of the
    trial of the suit. The High Court evidently committed an illegality in relying
    upon the said provision.

E         The learned counsel appearing on behalf of the respondent, however,
    would submit that the application for amendment being belated, the same
    should not have been entertained.

          It is one thing to .say that the application for amendment suffers from
    delay or !aches but it is another thing to say that thereby the defendant was
F   prejudiced. It is also not a case of the rt:spondent that by re11son of such an
    amendment, the relief which could not be granted having regard to the law
    of limitation has become available. The court even in such a case is not
    powerless although the question as to whether the relief sought for would be
    otherwise barred by limitation is a relevant factor to determine the issue.
G
          This aspect of the matter has been considered by this Court in L.J.
    Leach and Company Ltd v. Jardine Skinner and Co., [I 957] SCR 438 in the
    following terms:

            "It is no doubt true that courts would, as a rule, decline to allow
H           amendments, if a fresh suit on the amended claim would be barred
           STATE BANK OF HYDERABAD v. TOWN MUNICIPAL COUNCIL[S.B. SINHA, J.]   923
~
             by limitation on the date of the application. But that is a factor to be A
             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 ... "

            L.J. Leach and Company Ltd. (supra) was referred to in Pirgonda
      Hongonda Patil v. Ka/gonda Shidgonda Patil and Ors., [1957] SCR 595            B
      holding:

            " ... We think that the correct principles were enunciated by Batchelor
            J. in his judgment in the same case, viz., Kisandas Rupchand's case,
            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     c
            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 understand it, is that
            amendments should be refused only where the other party cannot be D
            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 amend by setting up a
            fresh claim in respect of a cause of action which since the institution
            of the suit had become barred by limitation, the amendment must be E
            refused; to allow it would be to cause the defendant an injury which
            could not be compensated in costs by depriving him of a good defence
            to the claim. The ultimate test therefore still remains the same : can
            the amendment be allowed without injustice to the other side, or can
             it not ?" Batchelor J. made these observations in a case where the
                                                                                       F
            claim was for dissolution of partnership and accounts, the plaintiffs
            alleging that in pursuance of a partnership agreement they had
...
            delivered Rs. 4,001 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 stage, the
            plaintiffs abandoned the plea of partnership and prayed for leave to G
            amend by adding a prayer for the recovery of Rs. 4,00 I. At that date
            the claim for the money was barred by limitation. It was held that the
            amendment was rightly allowed, as the claim was not a new claim."

           [See also Rajesh Kumar Aggarwal and Ors. v. K.K. Modi and Ors.,
                                                                                     H
    924                       SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R.

A   [2006] 4 SCC 385, Pankaja and Anr. v. Yellappa (Dead) By LRs. and Ors.,
    [2004] 6 SCC 415, Baldev Singh & Ors. v. Manohar Singh & Anr. etc., JT
    (2006) 7 SC 139, Gajanan Jaikishan Joshi v. Prabhakar Mohan/a/ Ka/war,
    [1990] I SCC 166 and A.K. Gupta and Sons v. Damodar Valley Corporation,
    [ 1966] 1 SCR 796]

B        As the High Court has failed to invoke the law as it then existed, we
    do not think that it was correct in its view.

          For the reasons aforementioned, the impugned judgment cannot be
    sustained which is set aside accordingly. The appeal is allowed and the matter
    is remitted to the High Court for consideration of the appeal afresh in
C   accordance with law. All contentions of the parties shall, however, remain
    open.

    8.8.8.                                                       Appeal allowed.