Balaji Apartment v. Flora Properties (P) Ltd. — 1998 DIGILAW 172 (CAL)

Judgment This is to consider an application for amendment of the plaint filed at the instance of the plaintiff, Flora Properties Pvt. Ltd. during the pendency of this appeal. 2. Flora Properties Pvt. Ltd. as plaintiff filed a suit in the 2nd Court of the subordinate Judge at Alipore for :- a) specific performance of the agreement for sale; b) recovery of possession of the suit property as fully described in the schedule of the plaint; c) permanent injunction and for other incidental reliefs. 3. The subject matter of dispute was in respect of a flat being Flat No. 2C on the 2nd floor of Premises No. 18 and 18/1, Sarat Bose Road, Calcutta. In the written statement of the suit, the defendants however, admitted that the plaintiff paid Rs.2,50,000/- to them and they offered refund of the said amount in instalments at the rate of Rs.10,000/- per month to the plaintiff. The Trial Court by the judgment under appeal rejected the prayer of the plaintiff for specific performance of the contract for sale, but held that the plaintiff was entitled to get refund of the aforesaid amount of Rs.2,50,000/- paid by the plaintiff to the defendant in connection with the agreement for sale and another sum of Rs.2,50,000/- paid by the plaintiff in connection with the construction agreement with interest at the rate of 18% per annum on the aforesaid amounts with effect from 8th December, 1987 till the date of delivering the judgment. Feeling aggrieved by the judgment and decree of the Trial Court in so far as the decree for refund is concerned, the defendant nos. 1 to 3 have preferred this appeal in this Court. Be it mentioned herein that the plaintiff Flora Properties Pvt. Ltd. has not filed any appeal against the refusal by the Trial Court to grant decree to it so far as the prayer of the plaintiff for specific performance of the agreement for sale is concerned. During the pendency of the appeal, a question arose whether the Trial Court was justified in granting a decree for refund with interest to the plaintiff without such prayer having be on made in the plaint in view of the specific provision to this effect in the Specific Relief Act. During the pendency of the appeal, a question arose whether the Trial Court was justified in granting a decree for refund with interest to the plaintiff without such prayer having be on made in the plaint in view of the specific provision to this effect in the Specific Relief Act. By filing the present application for amendment of the plaint the plaintiff/respondent has sought for insertion of the following facts and prayers in the plaint:- (a) After Paragraph 12 of the plaint the following paragraph may be added : 12(a) The aforesaid two payments to the tune of Rs.2,50,000/- (Rupees two lakhs fifty thousand only) each under the said two agreements dated 7.12.87 were made by way of account payee cheque being no. 334051 dated 7.12.87 and 334052 dated 7.12.87 drawn on Canara Bank. 12(b) The Land Sale Agreement as also Construction Agreement provide that the plaintiff would be entitled to interest @ 18% per annum in case the defendants failed to perform their part in terms of the aforesaid agreement. (b) After Paragraph 21 the following paragraph may be added. 21(a) The plaintiff is alternatively entitled to refund of entire amount so deposited to defendant no. 1 Company to the tune of Rs.5,00,000/- (Rupees five lakhs only) together with accrued interest at the rate of 18% per annum from the date of deposit till the date of payment. 21(b) The defendant nos. 1, 2 & 3 are guilty of breach of contract as embodied in the aforesaid two agreements. The plaintiff is also entitled to a decree for compensation against defendant nos. 1, 2 & 3 for breach of contract by the said defendants and also to meet the Justice of the case. (c) By adding following the reliefs after the relief (c) of the plaint. (cc) Refund of the entire amount paid to the defendants to the tune of Rs.5,00,000/- in terms of the Land Sale Agreement and the Construction Agreement. (ccc) Compensation on account of breach of contract by the defendant nos. 1, 2 & 3 . (cccc) Interest @ 18% per annum. 4. In the application for amendment of the plaint, the plaintiff alleged that through oversight and bonafide mistake they omitted to make a claim of refund with interest of the money paid by it and also a claim for compensation in the event its claim for specific performance had been refused. (cccc) Interest @ 18% per annum. 4. In the application for amendment of the plaint, the plaintiff alleged that through oversight and bonafide mistake they omitted to make a claim of refund with interest of the money paid by it and also a claim for compensation in the event its claim for specific performance had been refused. Accordingly, they prayed for the amendment of the plaint. 5. The application for amendment of the plaint was contested by the defendants/appellants before us. 6. Having heard the learned Counsel for the parties and after examining the materials on record and after considering the submissions made on behalf of the parties. We are of the view that in the facts and circumstances of the present case and on consideration of the law on this question the application for amendment of the plaint should be allowed even at the appellate stage and the defendants shall be permitted to file their additional writing statement after the plaint is amended. 7. Reasons are as follows:- “There is no dispute that in the written statement, the defendants admitted that the plaintiff had paid them a sum of Rs.2,50,000/- which may be refunded to the plaintiff by instalments of Rs.10,000/- per month. In the memorandum of appeal, the defendants/appellants have taken objection to the decree for refund on the around that the Trial Court was wrong in granting the relief of refund with interest to the plaintiff/respondent inasmuch as such relief was not specifically claimed in the plaint. On behalf of the defendants/appellants, mainly two fold submissions were made for rejection of the application for amendment of the plaint. Firstly, the learned Counsel for the defendants/appellants submitted that the prayers now made for refund of the money with interest have been made by the plaintiff/respondent by way of the amendment of the plaint at a time when such reliefs have already become barred by limitation. Secondly, it was contended on behalf of the defendants/appellants that as it was open to the plaintiff/respondent to amend its pleadings during the pendency of the suit and since the plaint was not amended during the pendency of the suit, it would not be open for them to apply for such amendment at the appellate stage. Secondly, it was contended on behalf of the defendants/appellants that as it was open to the plaintiff/respondent to amend its pleadings during the pendency of the suit and since the plaint was not amended during the pendency of the suit, it would not be open for them to apply for such amendment at the appellate stage. The learned Counsel for the defendants/appellants further contended that in any view of the matter, the prayed for a decree for compensation as made in the application for amendment of the plaint cannot at all be allowed as no decree for compensation was granted in the judgment of the Trial Court against which the present appeal has been preferred by the defendants/appellants. It was contended that if such prayed for grant of compensation is allowed at the appellate stage, even then such prayer cannot be at this stage allowed as it has also become barred. So far as the question for amendment of the plaint relating to the prayer for refund of money with interest is concerned, we are unable to accept the contention of the learned Advocate for the appellants. The agreements in question were executed by the parties on 7th of December, 1987. The suit for specific performance of the contract for sale was filed on 29th August, 1990, which was within three years from the date of execution of the agreements in question. Therefore, the prayers for refund of money with interest and for compensation could be made by the plaintiff/respondent on the date of filing of the suit. But in our view, in view of the specific provisions in the Specific Relief Act, the question of limitation, in the present case relating to the prayers for a decree for refund of more, with interest cannot arise at all. But in our view, in view of the specific provisions in the Specific Relief Act, the question of limitation, in the present case relating to the prayers for a decree for refund of more, with interest cannot arise at all. Section 22(1) of the Specific Relief Act runs as follows:- “Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908 any person suing for the specific performance of a contract for transfer of immovable property may, in an appropriate case ask for - (a) possession, or partition and separate possession of the property, in addition to such properties; or b) any other relief’s which he may be entitled, including the refund of any earnest money or deposit paid or made by him, in case the claim for specific performance is refused.” Sub-Section (2) of Section 22 of the Specific Relief Act however, prohibits the Court from granting any decree under sub-sections (a) and (b) of Sec. 22(1) of the Specific Relief Act, unless such relief under Clause (a) or (b) of sub-section (1) of Section 22 is specifically claimed by the plaintiff in the suit for specific performance of the contract for sale. According to the defendants/appellants, in view of subsection (2) of Section 22 of the Specific Relief Act, the Court had no power to pass any decree for refund with interest as admittedly such prayer was not at all made by the plaintiff/respondent in his plaint. Accordingly it was contended that since the plaintiff/respondent had not asked for any relief relating to refund of money with interest in the plaint and as Section 22(2) of the Specific Relief Act clearly prohibits the Court from granting such relief unless such relief is claimed by the plaintiff in the suit for specific performance the Appellate Court cannot permit the plaintiff to amend its pleadings at the appellate stage. We have noted earlier that the Trial Court refused the prayer for specific performance, but granted a decree for refund of the money paid or deposited by the plaintiff/respondent with interest although no such relief was claimed by the plaintiff in the original plaint. Therefore, the question arises, whether such relief can be claimed by the plaintiff/respondent by amending the plaint of the suit. Therefore, the question arises, whether such relief can be claimed by the plaintiff/respondent by amending the plaint of the suit. In our view, it is open to the plaintiff to claim the relief for refund with interest by amending the plaint at the appellate state in view of proviso to Section 22 subsection (2) of the Specific Relief Act. Proviso to subsection (2) of Section 22 clearly says that where the plaintiff has not claimed and such relief in the plaint, the Court shall, at any stage of the proceeding allow him to amend the plaint on such terms as may be just for including the claim for such relief. Before we proceed further, it may be placed on record that the question of grant of alternative relief under subsection (1) of Section 22 of the Specific Relief Act would only arise in case the claim of the plaintiff for specific performance is refused. It is not in dispute that in the present case, such relief was refused by the Trial Court by the judgment under appeal in this Court. The plaintiff has not filed any appeal or cross-objection against the decree refusing the prayer for specific performance. Therefore it can be safely concluded that the plaintiff/respondent has abandoned the relief for specific performance. In our view, the term ‘proceeding’ as used in Section 22(2) of the Specific Relief Act is a Very wide and comprehensive term and it not only includes appeals but also execution proceeding. Therefore, the term “at any stage of the proceeding” confers widest power to the Court to allow amendment at any stage of the proceeding which invariable includes the appellate proceeding. In view of the aforesaid provision or the Specific Relief Act viz. proviso to Section 22 subsection (2) of the Specific Relief Act, we are of the view that the appellate Court is also conferred with the power at the appellate stage to permit amendment of the plaint if made on behalf of the plaintiff. In (1) Sahida Bibi v. Sk. Golam Muhammad, AIR 1983 Cal 216 , Chittotosh Mookherjee, J. at Paragraph 11 has observed as follows:- “The plaintiff/respondent in his plaint did not alternatively pray for passing a decree for refund of the aforesaid sum paid as advance to the defendant/appellant. In (1) Sahida Bibi v. Sk. Golam Muhammad, AIR 1983 Cal 216 , Chittotosh Mookherjee, J. at Paragraph 11 has observed as follows:- “The plaintiff/respondent in his plaint did not alternatively pray for passing a decree for refund of the aforesaid sum paid as advance to the defendant/appellant. Although we are of the view that it would be appropriate to grant the plaintiff the said relief by way of refund in terms of Clause (b) of subsection (1) of Section 22 of the Specific Relief Act, 1963, the main part of subsection (2) of Section 22 of the Specific Relief Act, 1963 would be a bar to straight way granting such a decree in this appeal. The subsection (2) of Section 22, inter alia, lays down that no relief under Clause (a) or Clause (b) of subsection (1) of Section 22 shall be granted unless it has been specifically claimed; the Court under proviso to subsection (2) of Section 22 at any stage of the proceeding is competent to allow the plaint of the suit to be amended on such terms as may be just for including a claim for such relief. The expression “any stage of the proceeding” would obviously include the Appeal from original decree passed in a suit for specific performance. Therefore, we propose to allow the plaintiff/respondents to give an opportunity to amend his plaint in terms of the said proviso to subsection (2) or Section 22 of the Specific Relief Act. For this purpose, a remand of the case would be necessary for amendment of the pleadings deciding the question of Court-fees and also for passing a decree for refund in plaintiff/respondent’s favour. No other issue would remain open.” 8. Relaying on the aforesaid observations of this Court and in view or clear provision in the proviso to Section 22(2) of the Specific Relief Act, it can be safely held that although decree for refund was passed by the Trial Court in the absence of any plea to that effect in the plaint, even then it was open to the plaintiff/respondent to apply for amendments of the plaint at the appellate stage for incorporation of the reliefs as indicated in Section 22(1)(b) of the Specific Relief Act. In (2) Sabulal v. Hazarilal Kishorilal, AIR 1982 SC 818 , it was held that the term “proceeding” is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right and it is not a technical expression with the definite meaning attached to it but one of the ambit of whose meaning will be governed by the statute. In that decision, the Supreme Court also held that the word ‘proceeding’ in Section 22 includes executing proceeding also. That being the position in law now, it cannot be held that the word ‘proceeding’ does not include an appeal. The next question is whether by amendment, the decree for interest can also be claimed by the plaintiff in view of the fact that Section 22(1)(b) of the Specific Relief Act does not include “interest” which can be awarded in an appropriate case. In our view, the decree for interest can be granted by the Court under Section 22(1)(b) of the Specific Relief Act along with the decree for refund of the earnest money or deposit paid or made by the plaintiff if the claim for specific performance is refused. It is true that the word “interest” is not specifically named in Section 22(1)(b) of the Specific Relief Act. Still then, we are of the view that Section 22(1) gives ample power to the Court to grant relief on account of interest to the plaintiff as subsection (b) of Section 22(1). In our view, is a provision which includes all reliefs which the plaintiff is entitled in which refund of earnest money or deposit paid or made by the plaintiff is one of such reliefs. Only thing that is to be seen that such prayed for interest can be granted only when the claim for specific performance is refused. Therefore, from a plain reading of subsection (b) of Section 22(1) of the Specific Relief Act, we are of the view that “any other relief to which he may be entitled” would mean and include the relief for interest as well. We have also carefully examined the clauses in the Land Sale Agreement and Construction Agreement. Therefore, from a plain reading of subsection (b) of Section 22(1) of the Specific Relief Act, we are of the view that “any other relief to which he may be entitled” would mean and include the relief for interest as well. We have also carefully examined the clauses in the Land Sale Agreement and Construction Agreement. On a perusal of the clauses made therein, we find that Clause 3 of the said agreement clearly stipulates that the plaintiff would be entitled to claim interest at the rate of 18% per annum upon the total amount paid to the defendants in case default is made by the defendants in performing the said agreements. In any view of the matter, even under Section 55(6)(b) of the Transfer of Property Act, it must be held that the plaintiff is entitled to plead that the, are entitled to interest on the amount to be refunded to them. Reliance can also be placed in this connection on a decision of this Court in the case of (3) Shami Patter v. Abdul Kadir Ravuthan, 17 CWN 1009. That apart on a plain reading of Section 55(6)(b) of the Transfer of Property Act, it cannot be doubted that such claim for interest can be pleaded and decree may be obtained by the plaintiff. Wherefore, we are in agreement with Mr. Dasgupta that the relief for interest can be claimed and decree for interest with refund of money deposited with the defendant can be obtained not only under Section 22(1)(b) of the Specific Relief Act but also under Section 55(6)(b) of the Transfer of Property Act. Accordingly, we hold that the application for amendment of the plaint so far as the relief on account of interest is concerned must be allowed. Mr. Auddy, next contended that the question of allowing the application for amendment of the plaint at this stage, cannot be allowed in view of the fact that the suit for recovery of compensation and refund with interest would be barred by the law of limitation. In support of this contention, Mr. Auddy relied on a decision of the Supreme Court in the case of (4) K. Raheja Construction Ltd. & Anr. v. Alliance Ministries and Others, 1995 Supp (3) SCC 17. After a careful examination of the decision of the Supreme Court we are of the view that the said decision is clearly distinguishable on facts. Auddy relied on a decision of the Supreme Court in the case of (4) K. Raheja Construction Ltd. & Anr. v. Alliance Ministries and Others, 1995 Supp (3) SCC 17. After a careful examination of the decision of the Supreme Court we are of the view that the said decision is clearly distinguishable on facts. In that decision, the Supreme Court was considering the prayer for amendment of pleading by which the plaintiff sought to amend the plaint for grant of specific performance of the contract from a suit for permanent injunction. In that context, the Supreme Court was considering whether after the expiry of period of limitation of three years. Such amendment could be allowed that is to say the suit for permanent injunction could be converted into specific performance for contract of sale after the period of limitation in view of Article 54 of the Limitation Act. In the present case, the suit for specific performance was filed admittedly within time. In any event, in view of the provisions as contained in Sections 21 and 22 of the Specific Relief Act, the question, of limitation shall not arise at all in the present case. However, we keep it open for decision at the hearing of the appeal whether the decree for refund with interest of the money deposited by the plaintiff/respondent can be granted in view of Article 54 of the Limitation Act. Next we come to the question whether the plaint on be allowed to be amended for incorporation of the decree for compensation even when the relief for compensation has not been raised by the plaintiff/respondent before the Trial Court. In our view, the amendment of the plaint incorporating the prayer for compensation can also be allowed at any stage of the proceeding in view of proviso to Section 21 of the Specific Relief Act. Section 21 of the Specific Relief Act clearly says that in a suit for specific performance of the contract, a plaintiff may claim compensation for its breach, either in addition or in substitution of such performance. Subsection (2) of Section 21 confers power on the Court to award compensation for any breach of any contract if the Court decides that specific performance ought not to be granted. Subsection (5) however, puts an embargo on the Court to award such compensation unless the plaintiff has claimed such compensation in his plaint. Subsection (2) of Section 21 confers power on the Court to award compensation for any breach of any contract if the Court decides that specific performance ought not to be granted. Subsection (5) however, puts an embargo on the Court to award such compensation unless the plaintiff has claimed such compensation in his plaint. It is true that the claim for compensation was not made by the plaintiff in the original plaint, nor a decree for compensation has been awarded by the Trial Court although a decree for refund with interest has been awarded by the Trial Court. But in view of proviso to Section 21 of the Specific Relief Act, it is open to the Court to allow a plaintiff to amend the plaint at any stage of the proceeding even where the plaintiff had not claimed any such compensation in the plaint. Section 21 must also be read with Section 24 of the Specific Relief Act, Section 24 of the Specific Relief Act is a bar of filing a suit for compensation for breach after dismissal of the suit for specific performance. Section 21 specifically confers right on the plaintiff to sue for compensation for breach of contract or part as the case may be in a suit for specific performance of contract. It however, does not create any bar in respect of the right of the plaintiff to sue for any other relief to which the plaintiff may be entitled by reason of such breach. Therefore, on a comparative analysis of Section 21 and Section 24 of the Specific Relief Act, it appears that it would not be open to the plaintiff to file an independent suit, after the dismissal of the suit for specific performance of the contract, for recovery of compensation from the defendants. 9. If we read Section 24 with the proviso to Section 21 of the Specific Relief Act, we cannot have any hesitation in our mind that the resist for compensation can also be permitted to be incorporated in the plaint by way of an amendment even at the appellate stage. Therefore, we are of the view that the prayer for compensation can also be incorporated by way of amendment in the plaint even at the appellate stage. Mr. Therefore, we are of the view that the prayer for compensation can also be incorporated by way of amendment in the plaint even at the appellate stage. Mr. Auddy appearing for the defendants/appellants, however, contended that the prayer for compensation cannot at all be allowed to he incorporated by way of an amendment in view of a decision of the Supreme Court in the case of (5) Kanshi Ram v. Om Prakash Jawal & Ors., 1996 (4) SCC 593 , and also the decision of the Supreme Court in the case of (6) Jagdish Singh v. Natthu Singh, AIR 1992 SC 1604 . We have carefully examined the aforesaid two decisions of the Supreme Court. After considering the aforesaid two decisions of the Supreme Court, we are unable to agree with Mr. Auddy that the prayer for compensation cannot be permitted to be incorporated in the plaint by way of an amendment as, in our view, the said two decisions are not only inapplicable to the facts and circumstances of this case, but also clearly distinguishable on facts. The decision in the case of Jagdish Singh v. Natthu Singh, AIR 1992 SC 1604 , in our view, helps the plaintiff/respondent. In Paragraph 10 at page 1608 of the aforesaid decision, the Supreme Court has observed as follows:- “So far as the proviso to subsection (5) is concerned, two positions must be kept clearly distinguished. If the amendment relates to the relief of compensation in lieu of or in addition to specific performance where the plaintiff has not abandoned his relief of specific performance the Court will allow the amendment at any stage of the proceeding. That is a claim for compensation falling under Section 21 of the Specific Relief Act, 1963 and the amendment is one under the proviso to subsection (5). But different and less liberal standards apply if what is sought by the amendment is the conversion of a suit for specific performance into one for damages for breach of contract in which case, Sec. 73 of the Contract Act is invoked. But different and less liberal standards apply if what is sought by the amendment is the conversion of a suit for specific performance into one for damages for breach of contract in which case, Sec. 73 of the Contract Act is invoked. This amendment is under the discipline of Rule 17 Order 6 C.P.C. The fact that subsection (4) in turn invokes Section 73 of the Contract Act for the principles of quantification and assessment of compensation does not obliterate this distinction.” At page 1609 of the same judgment, the Supreme Court has observed as followed:- "When the plaintiff by has option has made specific performance impossible, Sec. 21 does not entitle him to seek damages. That position is common to both Section 2 of Lord Cairn’s Act, 1858 and Section 21 of the Specific Relief Act, 1963. But in Indian law the contract, for no fault of the plaintiff, becomes impossible of performance. Section 21 enables award of compensation in lieu and substitution of specific performance." (Emphasis supplied) In the said decision also the Supreme Court modified the decree of the High Court by directing payment of compensation to the plaintiff although the decree for specific performance was refused. From the aforesaid observations of the Supreme Court and on consideration of the fact that the Supreme Court in that decision also granted a decree for compensation even when the decree for specific performance was refused by the Court, we are of the view that the said decision of the Supreme Court is of no helps to the appellants and it really helps the respondents. However, we constrain ourselves from observing whether in the facts and circumstances of this case, the plaintiff is entitled to the decree for compensation or not which shall be decided at the time of hearing of the appeal, We are only concerned at this stage whether the amendment of the plaint on the question of compensation can be allowed at the appellate stage. Therefore, in view of our discussions made hereinabove, we are of the view that such an amendment of the plaint can also be allowed at the appellate stage. So far as the decision reported in 1996 (4) SCC 593 , Jagdish Singh v. Natthu Singh is concerned we do not find any applicability of this decision in view of the facts involved in the present appeal. So far as the decision reported in 1996 (4) SCC 593 , Jagdish Singh v. Natthu Singh is concerned we do not find any applicability of this decision in view of the facts involved in the present appeal. In any view of the matter, in that decision, the Supreme Court also held that in view of the fact that the respondent himself had claimed alternative relief for damages, Courts were well justified in granting alternative decree for damages instead of specific performance, which would be unrealistic and unfair. We fail to understand how this decision can be of any held to the appellant for the purpose of holding that the plaintiff/respondent are not entitled to apply for amendment of the plaint for incorporating the additional relief for compensation in the plaint, but at the same time, it may be said that the said decision helps the respondents as in that decision also, decree for damages was granted in lieu of specific performance. 10. For the reasons aforesaid, we are of the view that the application for amendment of the plaint must be allowed and accordingly, we allow the application for amendment of the plaint. The defendants may be permitted to file additional written statement within four weeks from this date. The appeal shall be listed for hearing after four weeks. We, however, make it clear that whatever observation that has been made by us in this order would only be taken for the purpose of deciding the application for amendment of the plaint and not otherwise. Whether the plaintiff is entitled to a decree for refund of money with interest and whether they are also entitled to obtain a decree for compensation would be decided at the time of hearing of the appeal. All questions including the question of limitation are left open to be taken into consideration at the time of disposal of the appeal. Accordingly, the application for amendment of the plaint is allowed. There will be no order as to costs.