AI Structured Summary
Not yet generated for this judgment
Judgment
Ravi V. Malimath, J.
The appellant filed a petition under Sections 31(1)(a) and 31(1)(a)(a) of the State Financial Corporation Act to direct the respondents to pay a sum of Rs. 34,86,943.35 and for grant of future interest at the rate of 20% p.a. from 10.12.2003 till the date of realisation with quarterly rests etc.,
Evidence was let-in and the matter was set down for judgment. At that stage, the appellant filed I.A. No. III under order VI rule 17 read with Section 151 of CPC seeking to amend the petition by adding para No. 10(a) and para No. 16 of the cause of action. By the order dated 5th March 2011, I.A. No. III was dismissed and on the same day, the miscellaneous petition was also rejected. Hence, the present appeal challenging the order passed on I.A. No. III as well as on the main matter.
The application for amendment is to the effect of adding paragraph 10 (a) to the plaint with regard to narration of facts and secondly to add in para-16 in the cause of action column. Para 10(a) as sought to be added is as follows:
"Before filing the above case the corporation had issued recovery certificate to the Deputy Commissioner, Bellary on 11.11.1993 for recovery of the amount due by the borrower as arrears of Land Revenue under KPRMD Act and in turn the Deputy Commissioner, Bellary forwarded the same to the District Collector, Kurnool on 20.12.1993 as the collateral secured properties are situated in Kurnool district for recovery of the amount due by the borrower as arrears of Land Revenue. The said proceedings are initiated as provided under law even during the pendency of W.P. No. 20274/1992 and the same is came to be disposed on 15.10.1997 on merits filed by respondent No. 2 to 4. The said recovery proceedings under KPRMD Act before the District Collector, Kurnool was pending till 2003. In the mean while the Hon''ble Supreme Court had given a verdict stating that the collateral secured properties cannot be sold under KPRMD Act as reported in AIR SCW 2003 at page 104. In view of the Supreme Court verdict the Corporation forced to recall the recovery certificate issued to Deputy Commissioner, Bellary and issued legal notice under section 31 of SFC Act on 25.10.2004 to the legal heirs of borrower and guarantor and also purchasers who are purchased the same in the year 2001 during pendency of proceedings before District Collector, Kurnool. "
In the cause of action column at paragraph 16, the following is sought to be added as an amendment:
"Add in Para No. 16 in cause of action column after the words adjusted to the loan account of the respondents add as...
And on 11-11-1993 when the recovery certificate issued to the deputy commissioner Bellary for recovery of the amount due under KPMRD Act and on 20-12-1993 when the same is transferred to the District Collector, Kurnool and in the year 2003 when the Supreme Court given a verdict stating that the collateral secured properties cannot be sold in that KPMRD Act and when recovery certificate is withdrawn in 2003''."
In terms thereof, it is contended, that the appellant is entitled to save the period of limitation by contending that limitation commenced from 2003. However, in terms of his pleading in the petition under Section 31, the limitation would naturally commence to run from the year 1993. Therefore, an amendment was sought for in order to save the limitation. The Court below by the order passed on I.A. No. III reasoned that the said amendment cannot be allowed. It was of the view that the amendment sought for is to introduce a new plea regarding delay in filing the petition within the period of limitation. That in terms of the amendment a plea that it is not barred by limitation, is sought to be introduced in the petition. That when the loan was advanced on 08.05.1989, 17.07.1990 and 13.12.1990, the cause of action for the suit arose within 12 years from the date of execution of the document. The borrower and guarantor died on 30th May 1991 and 18.08.1993 respectively and the petition is filed for recovery of amounts from the legal representatives of the deceased borrower and guarantor and also purchaser of the collateral security from the legal representatives of the deceased on 29.01.2005. Application for amendment was filed only on 13.01.2011 i.e., after six years. Therefore, the amendment sought for does not come within the purview of Order VI Rule 17 read with Section 151 of CPC i.e., firstly the application has been filed after commencement of trial and secondly, that the appellant has failed to show his due diligence in seeking such an amendment, the application was disallowed.
The object of the amendment to Order VI Rule 17 of the CPC is to minimise litigation and to ensure that applications are not filed once the trial commenced. Once the trial commences on the known pleadings, it would be very difficult for the other party to reconcile with the amendment sought to be brought about. However, even if the trial has commenced, an amendment can be allowed provided the court comes to the conclusion that in spite of due diligence, the issue could not have been raised before commencement of the trial. Due diligence was explained by the Hon''ble Supreme Court in the judgment in the case of Chander Kanta Bansal Vs. Rajinder Singh Anand, AIR 2008 SC 2234 : (2008) 1 CLT 347 : (2008) 4 JT 496 : (2008) 4 SCALE 546 : (2008) 5 SCC 117 : (2008) AIRSCW 3225 vide para 16 as follows:
"16. The words "due diligence" have not been defined in the Code. According to Oxford Dictionary (Edn. 2006), the word "diligence" means careful and persistent application or effort. "Diligent" means careful and steady in application to one''s work and duties, showing care and effort. As per Black''s Law Dictionary (18th Edn.), "diligence" means a continual effort to accomplish something care: caution; the attention and care required from a person in a given situation. "Due diligence" means the diligence reasonably expected from, and ordinarily exercised by a person who seeks to satisfy a legal requirement or to discharge an obligation. According to Words and Phrases by Drain-Dyspnea (Permanent Edn.13A) "due diligence", in law, means doing everything reasonable, nor everything possible. "Due diligence" means reasonable diligence; it means such diligence as a prudent man would exercise in the conduct of his own affairs."
The facts in the present case would clearly indicate that there was absence of due diligence. The defendants objected on the grounds of limitation in their written statement. An issue was framed by the trial Court on limitation. Evidence was led in. The matter was completely argued and set down for judgment. It was at that stage that this application was filed. The only reason assigned in the application is that the pleading was not taken by over sight and mistake. On considering the manner in which the parties have understood the pleadings, having concluded the arguments and the matter was set down for judgment, it is not possible to accept the plea that the mistake was due to over sight. Therefore, we have no hesitation to hold that there was no due diligence while seeking the amendment.
What is sought for, is the amendment to the cause of action. Paragraph 16 to the cause of action column is sought to be added. Therefore, the entire cause of action to file the suit is sought to be altered. If the cause of action to file the suit itself is to be altered, then the entire proceedings on the basis of which the suit proceeded, namely, on the earlier cause of action would not stand to reason. On the other hand, if at all there is a new cause of action, the plaintiff is entitled to file a fresh suit on the same. However, since a fresh suit is barred by limitation, such an amendment is sought for, which is impermissible. If a new suit can be entertained on the amendment sought for, then such an amendment can be allowed. If the new suit is not maintainable, but for the amendment, then such an amendment should not be granted. If by allowing the application for amendment, a new cause of action and a new case is set up, such an amendment should not be allowed. Even though generally all amendments to the pleadings should be allowed which would aid in the determination of the real controversy in the suit, such amendments which alter or substitute a new cause of action which is not the basis on which the original suit was filed, cannot be accepted.
The valuable right that accrues to a defendant on the ground of limitation, cannot be taken away by allowing an application for amendment. If by virtue of the amendment, the cause of action is sought to be altered, thereby introducing a new plea of limitation, which would alter the nature of the suit, such an amendment cannot be allowed. The Hon''ble Supreme Court reiterated the earlier well established principle''s in law in the case of Voltas Limited Vs. Rolta India Limited, AIR 2014 SC 1772 : (2014) AIRSCW 1503 : (2014) 1 ARBLR 343 : (2014) 3 JT 197 : (2014) 2 SCALE 301 : (2014) 4 SCC 516 and held at para 29 as follows:
"29. xxx xxx xxx xxx The Court observed that having allowed the period of seven years to elapse from the date of filing the suit, and the period of limitation being three years under Article 54 of the Schedule to the Limitation Act, 1963 any amendment on the grounds set out, would defeat the valuable right of limitation accruing to the respondent. The said principle has been reiterated in South Konkan Distilleries v. Prabhakar Gajanan Naik and Van Vibhag Karamchari Griha Nirman Sahkari Sanstha Maryadit v. Ramesh Chander."
Applying the aforesaid judgments to the facts of this case, we have no hesitation to hold that there was no due diligence. The amendment will take away the valuable right accrued to the defendants by the amendment. If a new suit is not maintainable on the grounds of limitation, then such an amendment cannot be allowed.
The trial Court has accorded extensive reasons for rejecting the application. It was of the view that there was absence of due diligence; that the pleadings would go to show that the appellant was aware of the proceedings before the District Collector. Therefore, it is not a case that he was not aware of the proceedings. That the cause of action to be introduced by the appellant is barred by limitation; that the cause of action to the suit arose within 12 years from the date of execution of the document. The suit was filed only in the year 2005 and the application was filed in the year 2011. Therefore, the application was rejected. While considering the reasons of the trial Court, we do not find any good ground to interfere with the same. Consequently, the order passed on IA-III is affirmed.
The lower Court on considering the various judgments of this Court as well as Hon''ble Supreme Court held that an application under Section 31 of the Act is governed by the provisions of Article 137 of the Limitation Act which prescribes a limitation of three years from the date on which the right to apply accrues; that the principal borrower and guarantor executed the deed of guarantee on 17.11.1989 and deposit of title deeds on 07.11.1989. Petition was filed in the year 2005. The right to sue accrues in terms of Ex. P.5 on 20.01.1992 when the principal borrower committed default in payment of the loan and issue of notice dated 20.01.1992. After the death of the principal borrower and guarantor in the year 1993 and 1991 in terms of Ex. R.1 and Ex. R.2, the respondents have not executed any acknowledgement acknowledging the debts. Therefore, the appellant should have filed the petition within three years from the date of Ex. P.5 notice. The trial Court also held that even assuming that the petition is based on equitable mortgage, in that event also, the petition should have been filed within twelve years when the money becomes due in terms of Article 62 of the Limitation Act. But herein, the appellant filed the petition before the trial Court on 29.01.2005 which is beyond the period of limitation. In view of the period of limitation, the claim is not enforceable against the respondents who are the legal representatives of the deceased principal borrower and the guarantor. Therefore, the claim of the appellant was barred by limitation under Articles 62 and 137 of the Limitation Act. Therefore, on merits, the trial Court by according reasons has rightly come to the conclusion that the petition is beyond limitation. The findings recorded by the trial Court are based on the material and evidence on record. Even, the alternate plea of limitation was considered by the trial Court. We find no good ground to interfere with the well reasoned order of the trial Court. The reasons assigned are just and proper. They cannot be said to be perverse or beyond the material and evidence on record. Hence, we find no good ground to interfere with the said findings recorded by the trial Court.
The primary reason for dismissing the suit is one of limitation. As stated herein above, after evidence was recorded and arguments were advanced, the matter was set down for judgement. It is at that stage that the application was filed seeking amendment. The application was to amend the cause of action on limitation. It is only if I.A. No. III was allowed, that the suit could be held to be within a period of limitation. Since the issue of limitation had been held against the appellant, there is nothing further to consider so far as the other issues are concerned, since primarily, the suit has been dismissed on the ground of limitation.
For all the aforesaid reasons, we find no good ground to interference. The petition is hopelessly barred by limitation. The orders of the trial Court are just and proper. They cannot be said to be perverse or capricious. They are based on the facts and circumstances of the case and the law. We find no good ground to interfere.
Under these circumstances, the appeal being devoid of merit is dismissed.