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2005 DIGILAW 757 (MAD)

N. S. Raj v. S. Robert

2005-04-28

R.BANUMATHI

body2005
Judgment :- (PRAYER: Revision filed against the order and decretal order made in I.A.No.651/2002 in O.S.No.96/1990 dated 21.10.2002 on the file of the Subordinate Judge, Padmanabapuram.) This revision is filed against the order made in I.A.No.651/2002 in O.S.No.96/1990 dated 21.10.2002 dismissing the Petition filed under Or.6, R.17 CPC filed for amending the Written Statement. The Defendant is the Revision Petitioner. 2. O.S.No.96/1990: - Case of the Plaintiff is that the Plaintiff and the Defendant have jointly obtained a loan of Rs.25,000/- in the name of a partnership firm "Rajee and Renjith" from District Industrial Centre. The Plaintiff had invested Rs.1,13,064/- in the partnership. As soon as the production stage came, the Defendant dissolved the partnership by issuing notice of dissolution of partnership. In the dissolution notice, the Defendant has alleged that the Plaintiff has contributed only Rs.28,000/-. The Defendant has been doing business under the name and style 'Bethel Industries'. Hence the Plaintiff has filed the suit for: - (i)winding up of the partnership Rajee and Renjith and the Plaintiff be paid Rs.1,13,064 (One Lakh thirteen thousand and sixty four only) with 12% interest from the date of dissolution till recovery of entire amount from the partnership assets; (ii) that the accounts of the firm be taken; (iii) that a receiver be appointed to receive the accounts; and; for other reliefs. 3. Denying the averments in the plaint, the Revision Petitioner/Defendant has filed the Written Statement. According to the Defendant, the Plaintiff has invested only Rs.28,000/-. Because of the differences between the parties and issuance of notice and counter notice, at the intervention of mediators, the differences were settled. It was settled that the Defendant should pay the Plaintiff Rs.28,000/- which amount was actually contributed by the Plaintiff. It was further agreed that the Plaintiff shall have no more claim in the business or its assets and that the Defendant should take over the entire business and assets and have it as the sole proprietor with a liability to pay all the debts due from the dissolved partnership. As per the settlement, the Defendant became the sole proprietor of the business and is running the industry under the name and style of 'Bethel Industries. The Plaintiff is entitled to only Rs.28,000/- and the Defendant is ready to pay the amount. 4. The suit was pending and the trial commenced. As per the settlement, the Defendant became the sole proprietor of the business and is running the industry under the name and style of 'Bethel Industries. The Plaintiff is entitled to only Rs.28,000/- and the Defendant is ready to pay the amount. 4. The suit was pending and the trial commenced. At that time, the Defendant has filed I.A.No.651/2001 under Or.6 R.17 CPC for amending the Written Statement substituting the words instead of "liability" with the words "equal liability". The proposed amendment sought for by the Defendant is as noted under :- "In paragraph 16 of the Written Statement the word will be deleted in the 6th line which starts with the words "it was settled" by substituting "with" liability the words "with equal". 5. The application for amendment was resisted by the petitioner contending that the proposed amendment is inconsistent with the earlier plea in the Written Statement. In the counter statement, it is alleged that in the earlier dissolution notice or in the proceedings in O.S.No.735/1987, the Defendant has not set forth the plea that the liability is to be shared equally. The application has been resisted mainly on the ground that it has been filed belatedly and if allowed, would cause serious prejudice to the Plaintiff. 6. Upon consideration of the rival contentions of both parties, the learned Subordinate Judge has dismissed the application finding that the proposed amendment would be inconsistent with the earlier defence set forth. Further, pointing out that the application has been belatedly filed, the learned Subordinate Judge refused to allow the Petition to amend the Written Statement. 7. Aggrieved over the dismissal of the Petition, the Defendant has preferred this revision. Submitting that the Court should be liberal in allowing the amendment of Written Statement, the learned counsel for the Revision Petitioner/Defendant has submitted that the Defendant is at liberty to take inconsistent plea. In support of his contention, the learned counsel has relied upon the decision in 2000(1) SCC 712 . Submitting that the proposed amendment "with equal liability" would not in any way alter the defence plea set forth by the Defendant, the learned counsel submitted that the trial Court has misunderstood the amendment and erred in dismissing the application. 8. In support of his contention, the learned counsel has relied upon the decision in 2000(1) SCC 712 . Submitting that the proposed amendment "with equal liability" would not in any way alter the defence plea set forth by the Defendant, the learned counsel submitted that the trial Court has misunderstood the amendment and erred in dismissing the application. 8. Countering the arguments, the learned counsel for the Respondent/Plaintiff has drawn the attention of the Court to the Written Statement filed by the Defendant and submitted that in the Written Statement, when the Defendant has specifically contended that he had taken over the business and assets with liabilities, and has become the sole proprietor of the firm, by adding the proposed amendment "with equal liability", the Defendant seeks to change his entire defence. It is further submitted that when the basic defence plea is altered, the Court cannot adopt a liberal approach in allowing the said applications. The learned counsel for the Plaintiff has also relied on the same decision reported in 2000 (1) SCC 712 and contended that the proposed amendment which negates the defence set forth cannot be allowed. 9. Upon consideration of the submissions, the impugned order and available materials on record, the following points arise for consideration in this revision: - (i) Whether the learned Subordinate Judge was right in finding that the proposed amendment is inconsistent with the defence plea and that it would cause prejudice to the Respondent/ Plaintiff? (ii) Whether the impugned order declining the amendment suffers from any serious infirmity warranting interference? 10. The main contention urged by the Revision Petitioner/Defendant is that the amendment to the Written Statement is to be liberally construed, since the Defendant is at liberty to raise inconsistent plea. Drawing the attention of the Court to the Written Statement and the impugned order, the learned counsel has submitted that the inclusion of the words "with equal liability" instead of the word "with liability" would not in any way make the difference, nor inconsistent with the plea already set forth. While extracting the words in the impugned order, there is incorrect reference stating that the proposed amendment is sought to be included instead of the words "it was settled" the correct words ought to have been "with liability" instead of the words "it was settled". While extracting the words in the impugned order, there is incorrect reference stating that the proposed amendment is sought to be included instead of the words "it was settled" the correct words ought to have been "with liability" instead of the words "it was settled". That factual mistake is only inadvertent which would not in any way affect the correctness of the impugned order. 11. In support of his contention that the Court is to adopt a liberal approach, the learned counsel for the Revision Petitioner/Defendant has relied upon 2000 (1) SCC 712 (B.K.Narayana Pillai Vs. Parameswaran Pillai and another) wherein the Supreme Court has observed: - "The purpose and object of Or.6 R.17 CPC is to allow either party to alter or amend his pleadings in such manner and on such terms as may be just. The power to allow the amendment is wide and can be exercised at any stage of the proceedings in the interests of justice on the basis of guidelines laid down by various High Courts and the Supreme Court..... The principles applicable to the amendments of the plaint are equally applicable to the amendments of the Written Statements. The Courts are more generous in allowing the amendment of the Written Statement as the question of prejudice is less likely to operate in that event. The Defendant has a right to take alternative plea in defence, which however, is subject to an exception that by the proposed amendment the other side would not be subjected to injustice and that any admission made in favour of the Plaintiff is not withdrawn." 12. Thus the power to allow amendment should be liberally exercised. Principles which weigh the exercise of discretion in allowing the amendment is to render substantial justice. Leave to amend will be granted to determine the question in issue between the parties. It is well settled that the following principles are to be kept in mind in dealing with the applications for amendment of the Written Statement. All amendments should be allowed which are necessary for determination of the real controversies in the suit. Inconsistent and contradictory allegations in negation to the admitted position of facts or mutually destructive allegations of facts would not be allowed to be incorporated by means of amendment. Proposed amendment should not cause prejudice to the other sides which cannot be compensated by means of costs. Inconsistent and contradictory allegations in negation to the admitted position of facts or mutually destructive allegations of facts would not be allowed to be incorporated by means of amendment. Proposed amendment should not cause prejudice to the other sides which cannot be compensated by means of costs. No amendment should be allowed which amounts to or results in defeating a legal right to the opposite party on account of lapse of time. In the light of the above, it is to be seen whether the proposed amendment and the delay in filing the application has resulted in causing prejudice to the Respondent/Plaintiff. 13. The Plaintiff has filed the suit claiming Rs.1,13,064/- on the basis that he has invested Rs.1,13,064/- in partnership and that the Defendant has dissolved the partnership and the Plaintiff is entitled to get back the amount. Denying the same and that the Plaintiff is entitled to get only Rs.28,000/- the Defendant has set forth the following defence :- '...When the notices and counter notices were sent some of the parties, interested in both, intervened, to avoid tension and undesirable events, and settled the differences. It was settled that Defendant should pay the Plaintiff Rs.28,000/- (Rupees Twenty Eight Thousand only) the amount actually contributed by him and Plaintiff shall have no more claim in the business of its assets and that the Defendant should take over the entire business and assets and have it as the sole proprietor with liability to pay all debts due from the dissolved partnership. Plaintiff and the Defendant agreed. Defendant then became the sole proprietor of the business with all its assets and subject to all its liabilities. Plaintiff's amount is only Rs.28,000/- (Rupees Twenty Eighty Thousand only) which the Defendant is ready to pay. Now the Defendant is running the business in the name Bethel Match Industries....' 14. Thus the definite case of the Defendant is that Plaintiff is liable to pay only Rs.28,000/- and that as per the settlement, the Defendant has taken over the entire business and its assets and to have the business as the Sole Proprietor and to pay all debts due from the dissolved partnership. Thus the definite case of the Defendant is that he has to hand over the business and all the assets with liabilities to pay all the debts. Thus the definite case of the Defendant is that he has to hand over the business and all the assets with liabilities to pay all the debts. By the proposed amendment, to substitute the words "with equal liability" instead of the words "with liability", the Defendant has sought to introduce an inconsistent plea. The proposed amendment is inconsistent to that of the earlier defence that the Defendant is to take over all the assets and liabilities. It is incompatible that the Defendant has to take over all the assets; but the liabilities are to be shared by both the parties. The proposed amendment is totally repugnant to the earlier plea which was rightly declined by the trial Court. 15. It is well settled that the inconsistent pleading cannot be allowed by way of amendment. Onbehalf of the Respondent/Plaintiff reliance has been placed upon the following observation of the Supreme Court made in 2000 (1) SCC 712 : - "All amendments of the pleadings should be allowed which are necessary for determination of the real controversies in the suit provided the proposed amendment does not alter or substitute as new cause of action on the basis of which the original lis was raised or defence taken. Inconsistent and contradictory allegations in negation to the admitted position of facts or mutually destructive allegations of facts should not be allowed to be incorporated by means of amendment to the pleadings. Proposed amendment should not cause such prejudice to the other side which cannot be compensated by costs. No amendment should be allowed which amounts to or results in defeating a legal right accruing to the opposite party on account of lapse of time. The delay in filing the Petition for amendment of the pleadings should be properly compensated by costs and error or mistake which, if not fraudulent, should not be made a ground for rejecting the application for amendment of plaint or Written Statement." Hence the proposed amendment that the Defendant is to hand over all the assets but the liabilities are to be shared equally between him and the Plaintiff being totally inconsistent cannot be allowed. 16. It is also to be noted that for the suit O.S.No.96/1990, Written Statement was filed on 04.12.1991. Amendment Petition I.A.No.651/2001 was filed on 17.6.2002. Delay of 11 years in filing the amendment is also to be pointed out. 16. It is also to be noted that for the suit O.S.No.96/1990, Written Statement was filed on 04.12.1991. Amendment Petition I.A.No.651/2001 was filed on 17.6.2002. Delay of 11 years in filing the amendment is also to be pointed out. No doubt, the amendment shall not be refused merely on the ground of delay, unless there is lack of bonafide. In this case, various circumstances are to be pointed out that the delay is not merely due to negligence or mistake. In view of the strained relationship of the parties, the delay in filing the amendment application assumes importance. After the notice on dissolution was issued, the Respondent/Plaintiff has filed O.S.No.735/1987 on the file of the Principal District Munsif, Padmanabapuram (O.S.No.11/1997) for injunction restraining the Defendant from conducting the business using the partnership assets. Injunction was granted. Against the order of injunction, Defendant has preferred CMA No.2 of 1988 on the file of the Sub Court Padmanabapuram for stay of operation of the order. The stay Petition I.A.No.79/1988 was dismissed by the Court. Against the dismissal order, the Defendant has filed C.R.P.No.1765/1988 before the High Court Madras and has obtained an order to run the factory, on providing security of Rs.2,00,000/-. Thereafter, the Defendant has been conducting the business in the name of the partnership firm. Thus even before the filing of this suit, there were differences between the parties. Apart from this suit, there is yet another litigation in O.S.No.735/1987 on the file of District Munsif Court Padmanabapuram (O.S.No.11/1997). As noted earlier, in this suit, Written Statement was filed in December 1991. Nearly after eleven years, amendment Petition was filed on 12.06.2002 to amend the Written Statement. 17. By perusal of the counter statement filed by the Respondent/Plaintiff, it is seen that the Chief Examination of the Plaintiff was completed on 19.8.1998. The Defendant did not cross examine the Plaintiff till 22.3.1999. Hence the suit was decreed exparte. Thereafter, the Defendant filed I.A.No.245/1999 to set aside the Decree and the same was also allowed. Subsequently also, the Defendant has not cross examined the Plaintiff. The Court has passed an order to take evidence on 4.3.2002. At that stage, the amendment application was filed in June 2002. There is lack of bona fide in the amendment Petition. Thereafter, the Defendant filed I.A.No.245/1999 to set aside the Decree and the same was also allowed. Subsequently also, the Defendant has not cross examined the Plaintiff. The Court has passed an order to take evidence on 4.3.2002. At that stage, the amendment application was filed in June 2002. There is lack of bona fide in the amendment Petition. Pleading in the Written Statement that the Defendant is to take over the assets with liabilities is definite and the same cannot be allowed by the proposed amendment which has been belatedly filed. 18. The proposed amendment of the Written Statement was neither stated in the correspondences or in the Written Statement filed in O.S.No.735 of 1987 or in the Written Statement filed in this suit. The amendment would deprive the Plaintiff the valuable right accrued to him from the definite case set forth in the Written Statement. The learned Subordinate Judge has rightly refused the amendment which would introduce a new cause. Further, the amendment being filed at a belated stage cannot be ordered. The learned Subordinate Judge has rightly exercised the discretion in declining the amendment Petition which has been filed at a belated stage. This revision has no merits and is bound to fail. 19. Therefore, in the result, the order and decretal order made in I.A.No.651/2002 in O.S.No.96/1990 dated 21.10.2002 on the file of the Subordinate Judge, Padmanabapuram is confirmed and this revision is dismissed. Since the suit is of the year 1990, the learned Subordinate Judge Padmanabapuram is directed to expedite the trial and dispose of the suit at an earlier date. In the circumstances of the case, there is no order as to costs.