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1968 DIGILAW 85 (GAU)

State Bank of India at Imphal v. Yumnam Gouramani Singh

1968-11-26

C.JAGANNADHACHARYULU

body1968
ORDER This is a revision petition filed under Section 115, C. P. C. against the order of the Second Subordinate Judge, Manipur dated 26-12-1966 in Misc. Case No. 75/1965/73 of 1966 in Money Suit No. 3/1960/62/1962 on his file allowing the respondent to amend his written statement. 2. The brief facts of the case leading to the institution of the present revision petition are thus: The respondent mortgaged the plaint "A" schedule properties on 16-3-1964 for securing a loan of Rs. 15,000/- from the Manipur State Bank Ltd. which was a company incorporated under the Indian Companies Act (Act VII of 1913) with its registered Office in Imphal. On 17-3-1954 the respondent applied for and obtained the loan of Rs. 15,000/- after executing a promissory note and a letter of continuity. He agreed to repay the amount in 3 quarterly instalments on or before 1-1-1965 and further agreed that, in default of payment of any instalment, the mortgage bond would be enforceable forthwith. Again on 19-9-1965 the respondent obtained from the Manipur State Bank Ltd. a second loan of Rs. 10,000/- by executing a promissory note, letter of continuity and creating a mortgage of his properties described in the plaint schedule B(a) and (b) agreeing to repay the debt within 6 months, i.e. before 19-3-1956. On 21-12-1956, the respondent executed a third mortgage bond mortgaging the plaint "C" schedule properties in favour of the said Bank to secure the debit balance as on 20-12-1956 in his current account. He executed a promissory note and a letter of continuity on 22-12-1956 and agreed to discharge the mortgage debt within six months, i.e. before 21-6-1957. 3. In exercise of powers conferred under Section 35(2) of the State Bank of India Act, 1955, the Central Government sanctioned the scheme relating to the acquisition by the State Bank of India the business of the Manipur State Bank Ltd. In pursuance of the said scheme, the Manipur State Bank Ltd. transferred to the State Bank of India at Imphal all the mortgage debts due to it on 24-1-59 along with the securities as per schedule annexed to the deed of transfer. 4. On 22-9-1960 the State Bank of India at Imphal filed Money Suit No. 3/1960/62/1962 against the respondent for recovery of Rs. 44,852.34 p. due under the three accounts. The respondent filed his written-statement on 9-1-1961. His written-statement was very vague. 4. On 22-9-1960 the State Bank of India at Imphal filed Money Suit No. 3/1960/62/1962 against the respondent for recovery of Rs. 44,852.34 p. due under the three accounts. The respondent filed his written-statement on 9-1-1961. His written-statement was very vague. He stated in para 1 that the suit is liable to be dismissed for want of cause of action. In para 2, he alleged that the suit is not maintainable in the "present form". In para 3, he stated that the suit is bad for multifariousness and wrong joinder of parties. In paras 4 to 6 he set up the usual defence that the interest is exorbitant and that the suit is barred by limitation, estoppel etc. But, in para 7, he stated that he did not borrow the amount personally from the State Bank of India (petitioner) but that he had an account with Manipur State Bank Limited on behalf of partners for carrying on contract works, that credits and debits were made from time to time, that no mutual account was struck and that the patta lands were kept as "security" but not by way of "mortgage". Then, in para 8 of his written-statement he purported to mention the real state of affairs, namely, (a) that he had no direct transaction with the petitioner, who was bound to prove that the mortgage bonds were legally acquired by it, (b) that Section 67-A of the Transfer of Property Act does not apply to the said transaction, (c) that there was no agreement for paying any compound interest, (d) that a sum of Rs. 10,500/- had been paid already, and (e) that the suit was premature as the petitioner filed the suit before the agreed time for payment of the dues. 5. On 28-1-1961, the learned Subordinate Judge passed an order that the written-statement was very vague and that the respondent should clarify his defence. On 4-7-1961, the respondent filed a statement of clarification dated 19-6-1961 clarifying paragraphs 3, 6 and 8 of his written statement. 5. On 28-1-1961, the learned Subordinate Judge passed an order that the written-statement was very vague and that the respondent should clarify his defence. On 4-7-1961, the respondent filed a statement of clarification dated 19-6-1961 clarifying paragraphs 3, 6 and 8 of his written statement. The respondent clarified, firstly, that he did not borrow any amount from Manipur State Bank Limited for his personal purpose but that he borrowed the amounts for the benefits of Engineering Corporation Ltd. Secondly, he stated that "he had intimated one Shri Chatterjee, D. O., State Bank of India, while taking over Manipur State Bank Ltd., that the amount in respect of account No. 1 would be cleared in 1959, that the amount in respect of account No. 2 would be cleared in 1960, that the amount due in respect of account No. 3 would be cleared in 1961 and that he paid Rs. 10,500/- accordingly in respect of account No. 1 in time. 6. On 9-4-1963, the Lower Court commenced trial of the suit. On 15-5-1963, the petitioner closed its case. The Sub-Judge passed an order on that date that, as no evidence was adduced by the respondent, the arguments would be heard on 18-5-1963. 7. The respondent filed Civil Revision Case No. 17 of 1963 on the file of this Court against the order mentioned above. This Court allowed the revision petition on 30-8-1963 and remanded the suit for hearing directing the lower Court to give an opportunity to the respondent to examine his witnesses. 8. Then, the respondent filed Judicial Misc. Case No. 11 of 1964 under Order 11, Rules 14 and 15, C. P. C. requesting the Court to call upon the petitioner to produce a list of debts including bad debts of the State Bank of Manipur Ltd. The lower Court rejected the petition on 24-2-1964 on the opposition of the petitioner and posted the suit to 4-4-1964 for examining witnesses of the respondent. The respondent filed another Revision Petition - Civil Revision Petition No. 8 of 1964, in this Court against the order dismissing the Judicial Misc. Case No. 11 of 1964. This Court held on 16-4-1965 that the respondent admitted in his pleadings that the debts due from him were taken over by the petitioner and that it was not necessary for the Court to order the petitioner to produce a list of debtors and of bad debts. Case No. 11 of 1964. This Court held on 16-4-1965 that the respondent admitted in his pleadings that the debts due from him were taken over by the petitioner and that it was not necessary for the Court to order the petitioner to produce a list of debtors and of bad debts. This Court, therefore, dismissed the petition with costs. 9. The lower Court adjourned the suit again to enable the respondent to adduce evidence. But, on 16-9-1965 the respondent filed Judicial Misc. Case No. 75/65/ 73/66 under Order 6, Rule 16, C. P. C. to amend his written statement. The lower Court allowed the petition on 26-12-1966 subject to payment of costs of Rs. 20/- to the petitioner. The petitioner did not take the costs. By virtue of the order of the lower Court, the respondent filed amended written statement on 5-1-1967. Hence, the present Civil Revision Petition. 10. The amendments which were sought to be introduced in the written statement by the respondent are, firstly, that para 2 of the written statement is to be amended to show that "the plaint was not signed and verified by the petitioner according to law, that the plaint does not bear the common seal or any other official seal in accordance with the State Bank of India Act and Regulation 80 of the State Bank of India General Regulation, 1955". The second amendment is to introduce para 2A that "the petitioner has no locus standi to file the suit, in as much as, bad debts amounting to Rs. 1,67,636.72 nP. including the suit debts were not taken over by the petitioner and that the legal entity of the Manipur State Bank Ltd. still exists". The third amendment is an amendment to sub-para (a) of para 8 that "the State Bank of India did not acquire the bad debts". The 4th amendment relates to sub-para (d) of para 8 that "assuming that the petitioner had acquired the bad debts of the Manipur State Bank Limited, the part payment of Rs. 11,300/- made by the petitioner was made under due influence resulting in a constructive trust in favour of the respondent under the provisions of Chapter IX of the Indian Trusts Act, 1882 and that the petitioner must hold the said amount for the benefit of the respondent". 11,300/- made by the petitioner was made under due influence resulting in a constructive trust in favour of the respondent under the provisions of Chapter IX of the Indian Trusts Act, 1882 and that the petitioner must hold the said amount for the benefit of the respondent". The 5th amendment is an amendment to sub-para (e) of para 8 that "even assuming but not admitting that the petitioner acquired bad debts of the Manipur State Bank Limited, including the suit debts" the petitioner is not entitled to costs. The last amendment sought for is addition of sub-para (f) to para 8 that "the petitioner did not take over the entire accounts, business, assets or liabilities of the Manipur State Bank Limited as for instance certain shares of the Manipur State Bank Limited including those Nos. 28041-28060 issued to Shri M. Radhamohan Singh, retired First Subordinate Judge of Manipur and subsequently transferred by him to the respondent". 11. Under Order 6, Rule 17, C. P. C. 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 question in controversy between the parties. The object of the rule is that the Courts should get at and try the merits of the cases which come up before them and should consequently allow all amendments, which may be necessary for the purpose of determining the real question in controversy between the parties, provided that it can be done without causing injustice to the other side. The settled rule, with regard to amendment of pleadings, is that a party is allowed to make such amendments as may be necessary for determining the real question in controversy or to avoid multiplicity of suits, provided that there has been no undue delay, that no new or inconsistent cause of action is introduced, that no vested interest or accrued legal right is affected, that the application is not mala fide and that no injustice is done to the other side. Vide Note 1 at pages 2211 and 2212 of AIR Commentaries on C. P. C. Vol. II, 7th edition. Vide Note 1 at pages 2211 and 2212 of AIR Commentaries on C. P. C. Vol. II, 7th edition. Vide also the various rulings relied on by the respondents learned counsel viz., Tika Sao v. Hari Lal, AIR 1941 Pat 276, Panchaksharam Pillai v. Rangaswami Pillai, AIR 1948 Mad 332. Ahmed Hossein v. Mt. Chembelli, AIR 1951 Cal 262 ; Kailash Singh v. Sheopujan Singh, AIR 1952 Pat 380 , Goverdhan Bang v. Government of the Union of India, AIR 1953 Hyd 212, Amolakchand Mohanlal v. Firm of Sadhuram Tularam, AIR 1954 Nag 200, Chattanatha Karayalar v. Central Bank of India Ltd., Alleppey, AIR 1955 Trav-Co 201, Maruti v. Ranganath, AIR 1955 Hyd 1 (FB), M. B. Sirkar and Sons v. Powell and Co, AIR 1956 Cal 630 , Mahamood v. Ayissu, AIR 1957 Ker 140 , Har Prasad v. Lala Sita Ram, AIR 1958 All 36 Jaldu Anantha Raghurama Arya v. Jaldu Bapanna Rao, AIR 1959 Andh Pra 448, Pangoti Mangarao v. Chinnadi Kishan Rao, AIR 1965 Andh Pra 98, and Nichhalbhai Vallabhai v. Jaswantlal Zinabhai, AIR 1966 SC 997 . It is also evident that the amendment of pleadings is in the discretion of the Court, though Order 6, Rule 17, C. P. C. confers a very wide discretion on the Courts. The powers are to be liberally exercised. But, the discretion must be exercised according to judicial principles and not in an arbitrary, vague or fanciful manner, so to cause injustice to the other side. The main considerations to be borne in mind in exercising the discretion are that the rules of procedure have no other aim than to facilitate the task of administering justice, that multiplicity of suits should be avoided and that the interests of substantial justice should be advanced even if a fresh suit on the amended claim is barred by limitations. An amendment merely clarifying the position put forward in the plaint or a written statement can be allowed. Vide Note 2 at pages 2213, 2214 and 2215 of AIR Commentaries, Vol. II, 7th edition. Vide also the decisions relied on by the counsel for the respondent in this regard viz., L. J. Leach and Co. An amendment merely clarifying the position put forward in the plaint or a written statement can be allowed. Vide Note 2 at pages 2213, 2214 and 2215 of AIR Commentaries, Vol. II, 7th edition. Vide also the decisions relied on by the counsel for the respondent in this regard viz., L. J. Leach and Co. Ltd. v. Jardine Skinner and Co., AIR 1957 SC 357 , Pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil, AIR 1957 SC 363 , Firm Ghulam Mohi-uddin v. State of Jammu and Kashmir, AIR 1961 J and K 6, Nangsitombi Devi v. S. Nimai Sarma, AIR 1965 Mani 53, C. Subba Rao v. K. Brahmananda Reddy, AIR 1967 Andh Pra 155, Mahabir Prasad Singh v. Narmdeshwar Prasad Singh, AIR 1967 Pat 326 , A. K. Gupta and Sons Ltd. v. Damodar Valley Corporation, AIR 1967 SC 96 , and my judgment in Ballardie, Thompson and Mathews v. Kshetrimayum Tomba Singh, in Civil Revn. Case No. 22 of 1966 (1967 Mani LJ 371). 12. It is also equally well settled that the falsity of the case in the amendment cannot be considered at this stage without allowing the amendment and framing an issue thereon and allowing both sides to adduce evidence. Vide Note 2 at page 2216 of AIR Commentaries on C. P. C. Vol. II, 7th edition. Vide also the decisions relied on by the respondents counsel Krishna Rao v. Gangadeswarar Temple, AIR 1949 Mad 433, Dharmalinga Chetti v. A. M. Krishnaswami Chetty, AIR 1949 Mad 467, Abdul Rahim v. Abdul Jabbar, AIR 1950 Cal 379 , AIR 1953 Hyd 212, and Damodara Sastry v. Sanjiviah, AIR 1955 Mys 141. 13. So far as the amendment of the written statement is concerned, an amendment setting up a case which is totally inconsistent with the original case set up will not be allowed, if it is unjust to the opposite side to allow it. Similarly, where the proposed amendment of the written statement will have the effect of displacing plaintiffs suit, a Court will refuse the application to amend the written statement. A defendant, who has deliberately and under no mistake or misapprehension admitted a material fact in his written statement, cannot be allowed at a later stage to change his front and make out a new case by denying that fact. A defendant, who has deliberately and under no mistake or misapprehension admitted a material fact in his written statement, cannot be allowed at a later stage to change his front and make out a new case by denying that fact. There is no provision in the C. P. C. to enable the Court to permit the substitution of one written statement in toto for another already filed. Vide note 4 at pages 2224, 2225 and 2226 of AIR Commentaries on C. P. C., Vol. II, 7th Edition and sub-note (2) of note 4 at page 729 of Mullas C. P. C. Vol. I, 13th edition, Steward v. North Metropolitan Tramways Co. (1885) 16 QBD 178, Steward v. North Metropolitan Tramways Co. (1886) 16 QBD 556, Moss v. Malings, (1886) 33 Ch D 603, Loutfi v. Czarnikow Ltd.; 1952(2) All ER 823n, AIR 1957 SC 363 and my judgment in Elangbam Mangi Singh v. Ngangbam Tombi Singh, AIR 1967 Mani 28. Vide also AIR 1955 Mys 141, AIR 1959 Andh Pra 448 and Shriram Sardarmal v. Gourishankar, AIR 1961 Bom 136 , referred to by the respondents counsel. 14. Thus, the principles, which can be gathered from the above rulings and which are being followed by the Courts when leave to amend should be refused, can be summed up succinctly as stated in Note 4 at page 728 of Mullas C. P. C. Vol. I, 13th edition : "(1) Where the amendment is not necessary for the purpose of determining the real questions in controversy between the parties, as where it is (i) merely technical; or (ii) useless and of no substance; (2) Where the plaintiffs suit would be wholly displaced by the proposed amendment, (3) Where the effect of the amendment would be to take away from the defendant a legal right which has accrued to him by lapse of time, (4) Where the amendment would introduce a totally different, new and inconsistent case, and the application is made at a late stage of the proceedings, and (5) Where the application for amendment is not made in good faith." 15. The amendments sought for will have to be judged bearing the above principles in mind. The amendments sought for will have to be judged bearing the above principles in mind. The first amendment sought for relates to para 2 of the written statement, wherein the respondent wants to set out certain facts to show that the plaint was not properly signed or verified, that it does not bear the common seal of the State Bank of India or any other official seal and that, therefore the plaint is not valid. Para 2 of the written statement is very vague. Issue 1 raised the question that "the suit is not maintainable due to multifariousness" and not due to any other reason. The petitioner had ample time from 1961 to 1965 when he could discover all these technical objections. But, he did not discover them due to alleged ignorance of law on his part, which is no excuse. He did not take up any such plea even in his clarification filed in the lower Court on 4-7-1961. An omission to sign a plaint properly under Order 6, Rule 14, C. P. C. is a mere irregularity which is a curable one. The amendment is sought for not to determine the real question in controversy between the parties but to drag on the proceedings land relates to mere technicalities and within the meaning of (ii) of para 14(1) supra. This is a belated amendment, which will seriously prejudice the petitioner and may even displace the plaint. So, leave to amend para 2 of the written statement must be refused. 16. The next amendment relates to the allegation of the respondent that the petitioner did not take over bad debts amounting to Rs. 1,67,636.72 nP. as on 24-1-1959. The respondent wants to introduce this plea in paragraph 2(A), latter portion of sub-para (a) of para 8 of the written statement, earlier portion of sub-para (d) of para 8 and the earlier portion of sub-para (e) of para 8. Issue No. 2 already framed by the lower Court raises the question of the petitioners locus standi to file the suit. The respondent filed a letter received by him from the State Bank of India, Calcutta Office dated 12th June, 1964. Issue No. 2 already framed by the lower Court raises the question of the petitioners locus standi to file the suit. The respondent filed a letter received by him from the State Bank of India, Calcutta Office dated 12th June, 1964. It was stated therein that one Shri R. K. Sanahal Singh, Taxation Officer, Manipur Administration, Imphal, was appointed as the Manager of the Manipur State Bank Ltd. for the purpose of winding up its affairs and distributing its assets (except those assets transferred to the State Bank of India). It was also mentioned in the letter that the State Bank of India acquired the entire business of the Manipur State Bank Limited against payment of compensation in accordance with the scheme sanctioned by the Central Government. So, this amendment constitutes an additional approach to the plea of the respondent that the petitioner has no locus standi to the the suit against him. The nature of the defence is not thereby altered. The petitioner is not prejudiced, inasmuch as, the issue No. 2 throwing the burden on him to show that he has locus standi to file a suit was already framed on the basis of the original pleadings. So, this amendment will have to be allowed. 17. The next amendment relates to the latter portion of sub-para (d) of para 8 of the written statement. The respondent wants to allege that the part payment of Rs. 11,300/- made to the petitioner was made under undue influence exercised by the petitioners Bank resulting in constructive trust in favour of the respondent under the provisions of Chapter IX of the Indian Trusts Act, 1882 and that, therefore, the petitioner must hold the said sum for the benefit of the respondent. It is seen that this is a totally different plea of the respondent altogether. He wants to make out a different case. In para B of his clarification dated 19-6-1961, he admitted that when Manipur State Bank was taken over by the petitioner, the respondent intimated Mr. Chatterjee, D. O., State Bank of India, that he would clear the amount due under Account No. 1 in 1959, the amount under Account No. 2 in 1960, the amount under Account No. 3 in 1961 and that accordingly he paid Rs. 10,500/- towards account No. 1 in time. Chatterjee, D. O., State Bank of India, that he would clear the amount due under Account No. 1 in 1959, the amount under Account No. 2 in 1960, the amount under Account No. 3 in 1961 and that accordingly he paid Rs. 10,500/- towards account No. 1 in time. This Court considered this aspect of the case in Civil Revision Case No. 8 of 1964 and held that the respondent admitted that the debts due from him were taken over by the petitioner. In view of the allegations in para (B) of the clarified written statement dated 19-6-1961, that he made the payment of Rs. 10,500/- in respect of Account No. 1 before the agreed date, the respondent cannot now be permitted to set up a new case that he made the payment under undue influence and that there is a resulting trust in his favour. This is not only a new case but it is also inconsistent with the earlier written statement filed by the respondent. The learned counsel for the respondent, argued that in case the petitioner is found to be not entitled to recover the suit amount, then he will have to work out his remedy to recover Rs. 10,500/- by way of a separate suit and that to avoid multiplicity of proceedings this amendment should be allowed. But, this is not correct. The amount of Rs. 10,500/-(if really paid) would go in discharge of Account No. 1, and the persons really entitled to the balance will recover the balance only. The respondent cannot be permitted to change his front by allowing him to introduce a totally different, new and inconsistent case at the late stage of the proceedings. The application so far as this is concerned was not made in good faith and has to be rejected. 18. The last amendment prayed for is addition of sub-para (f) in para 8 of the written statement that the petitioner did not take over the shares No. 28041-28060 issued to Shri M. Radhamohan Singh, retired First Subordinate Judge of Manipur, said to have been transferred by him to the respondent. This is quite irrelevant for the purpose of the suit. If the shares of somebody else were not taken over by the petitioner, it is for him or his alleged assignee, namely, respondent to work out separately his alleged rights regarding the alleged shares. This is quite irrelevant for the purpose of the suit. If the shares of somebody else were not taken over by the petitioner, it is for him or his alleged assignee, namely, respondent to work out separately his alleged rights regarding the alleged shares. This has no bearing on the claim made by the petitioner or the defence of the respondent regarding the suit-debts. 19. The Subordinate Judge did not discuss the law bearing on the amendments prayed for. He disposed of the petition in a laconic manner. 20. In the result, the revision petition is allowed in part and amendment sought for regarding para 2, the last portion of sub-para (d) of para 8 beginning from "that the part repayment of Rs. 11,300 .... prejudiced" and sub-para (f) of para 8 are disallowed and the order of the lower Court is modified accordingly. I direct the parties to bear their respective costs in this revision petition. Petition partly allowed.