Supreme Court Allows Amendment of Plaint to Include Necessary Party in Property Dispute: Kamlesh Gupta vs. Mangat Rai (2019)

Date of the Judgment: 23 September 2019

Citation: (2019) INSC 932

Judges: Mohan M. Shantanagoudar, J., Indira Banerjee, J.

Can a court allow the inclusion of a party in a property dispute after the trial has begun? The Supreme Court of India addressed this question in a recent case, focusing on whether the interest of justice permits such amendments despite procedural delays. The case involves a dispute over a mortgaged shop where a third party’s possession became a critical issue. The Supreme Court bench, consisting of Justices Mohan M. Shantanagoudar and Indira Banerjee, delivered the judgment.

Case Background

Kamlesh Gupta (the appellant), mortgaged a shop with Mangat Rai (the first respondent) for Rs. 7 lakhs on 22 September 2009. Kamlesh Gupta then filed a suit for possession of the shop by redeeming the mortgage. Mangat Rai admitted to the mortgage but stated that he had allowed Rakesh Kumar (the second respondent) to use the shop. Rakesh Kumar was supposed to vacate the shop upon redemption of the mortgage, but he failed to do so.

Rakesh Kumar denied the validity of the mortgage and claimed he was not in possession of the shop. He stated that Pawan Kumar, his father, was a tenant of the original owner of the shop, who is the father of Kamlesh Gupta. After the issues were framed and the plaintiff’s witnesses had filed their affidavits, Kamlesh Gupta applied to implead Pawan Kumar as a third defendant and to amend the plaint to include the fact that Pawan Kumar had colluded with the defendants to obtain possession of the shop.

Timeline

Course of Proceedings

The Trial Court dismissed the application to implead Pawan Kumar and amend the plaint, stating that the facts were already known to the plaintiff. The High Court of Punjab and Haryana also dismissed the revision petition, concluding that the amendment was barred by the proviso to Order VI Rule 17 of the Code of Civil Procedure, 1908 (CPC) because the plaintiff was aware of the facts before the commencement of the trial. The High Court did not provide any reason for rejecting the prayer for impleadment. The matter then went to the Supreme Court.

Legal Framework

The application for impleadment and amendment was filed under Order I Rule 10 and Order VI Rule 17, read with Section 151 of the Code of Civil Procedure, 1908 (CPC). Order I Rule 10 of the CPC deals with the addition or deletion of parties in a suit. Order VI Rule 17 of the CPC governs the amendment of pleadings. It states:

“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.”

The proviso to Order VI Rule 17 of the CPC states that no application for amendment shall be allowed after the trial has commenced, unless the Court concludes that despite due diligence, the party could not have raised the matter before the commencement of the trial.

Arguments

Appellant’s (Kamlesh Gupta) Arguments:

• The appellant argued that Pawan Kumar was a necessary party to the suit because he was in possession of the suit shop. The appellant contended that if a decree was granted in his favor, Pawan Kumar could object to its execution since he was not a party to the suit.

• The appellant stated that he was unaware of the internal arrangement between the defendants and Pawan Kumar and that he was kept in the dark regarding the possession of the suit shop. Thus, the appellant could not have raised the issue earlier.

• The appellant argued that the interest of justice demanded that the application be allowed to avoid further litigation at the execution stage.

Respondent’s (Mangat Rai & Rakesh Kumar) Arguments:

• The respondents argued that the facts stated in the application were already within the knowledge of the plaintiff.

• The respondents contended that the application for amendment was hit by the proviso to Order VI Rule 17 of the CPC, which prevents a party from amending the plaint post the commencement of the trial, unless the Court concludes that in spite of due diligence, the party could not have raised the matter before the commencement of trial.

Sub-Submissions Table

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the application for impleadment of Pawan Kumar as a third defendant should be allowed.
2. Whether the application for amendment of the plaint should be allowed.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following legal provisions:

• Order I Rule 10 of the Code of Civil Procedure, 1908 (CPC), which deals with the addition or deletion of parties in a suit.
• Order VI Rule 17 of the Code of Civil Procedure, 1908 (CPC), which governs the amendment of pleadings.
• Section 151 of the Code of Civil Procedure, 1908 (CPC), which deals with the inherent powers of the court.

Authorities Considered Table

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Court considered Order I Rule 10 of the Code of Civil Procedure, 1908* to justify the impleadment of Pawan Kumar as a necessary party.
• The Court considered Order VI Rule 17 of the Code of Civil Procedure, 1908* and its proviso, but held that the proviso was not an absolute bar and allowed the amendment in the interest of justice.
• The Court invoked Section 151 of the Code of Civil Procedure, 1908* to allow the application for impleadment and amendment in the interest of justice.

What weighed in the mind of the Court?

The Supreme Court was primarily influenced by the need to ensure a complete and effective adjudication of the dispute. The Court noted that Pawan Kumar’s possession of the suit shop made him a necessary party, and his absence could lead to further litigation at the execution stage. The Court also considered the possibility that the plaintiff was unaware of the internal arrangements between the defendants and Pawan Kumar. The Court emphasized that the interest of justice demanded that the application be allowed, despite the delay.

Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio Table

Logical Reasoning

The Court reasoned that even though the application for impleadment and amendment was filed belatedly, the interest of justice demanded that the application be allowed to ensure that the plaintiff does not become vulnerable to another round of litigation at the stage of execution. The court observed, “We are of the opinion that by virtue of actual possession being enjoyed by Pawan Kumar, he is a necessary party to the present suit. Even otherwise, he is a proper party for the reasons elucidated above.” The court also noted, “But the fact remains that the plaintiff did not know about the internal arrangement between the defendants and Pawan Kumar. Therefore, even though the application for impleadment and amendment of the plaint was filed by the plaintiff belatedly, the interest of justice demands that the application be allowed…” The Court further stated, “We deem it fit, however, to impose costs of Rs.10,000 on the plaintiff.”

Key Takeaways

• A person in actual possession of the property in dispute is a necessary party to a suit concerning that property.
• Courts have the power to allow amendments to pleadings even after the commencement of the trial if it is in the interest of justice.
• The proviso to Order VI Rule 17 of the CPC is not an absolute bar to amendments, and the court can relax it if the party could not have raised the matter earlier despite due diligence.
• The judgment emphasizes the importance of complete adjudication to avoid future litigation.

Directions

The Supreme Court directed the Trial Court to decide the case on merits, based on the evidence produced before it, uninfluenced by the observations made by the Supreme Court.

Development of Law

The ratio decidendi of this case is that a court can allow the amendment of a plaint to include a necessary party even after the commencement of the trial, if it is in the interest of justice and if the party could not have raised the matter before despite due diligence. This ruling clarifies that the proviso to Order VI Rule 17 of the CPC is not an absolute bar to amendments and can be relaxed in appropriate cases. This case reinforces the principle that the court’s primary goal is to ensure a complete and effective adjudication of the dispute, even if it requires a departure from strict procedural rules.

Conclusion

The Supreme Court allowed the appeal, setting aside the orders of the Trial Court and the High Court. The Court held that Pawan Kumar was a necessary party to the suit and that the application for impleadment and amendment of the plaint should be allowed in the interest of justice. The Court directed the appellant to deposit costs of Rs. 10,000 before the Trial Court and directed the Trial Court to decide the case on merits.