Supreme Court allows amendment of pleadings in mortgage redemption suit: Ganesh Prasad vs. Rajeshwar Prasad (2023)

Date of the Judgment: 14 March 2023
Citation: Civil Appeal No. OF 2023 (@ SLP (C) NO. 28377 OF 2018)
Judges: Justice J. B. Pardiwala, Justice Sudhanshu Dhulia

Can a party change the nature of a lawsuit by amending their initial claims? The Supreme Court of India recently tackled this question in a case involving a property dispute that had multiple layers: a mortgage, a claim of tenancy, and a subsequent suit for redemption. This case explores the boundaries of amending pleadings in civil suits, specifically when a plaintiff seeks to introduce alternative, and seemingly inconsistent, arguments. The core issue revolves around whether the plaintiffs could amend their suit for mortgage redemption to also include claims of tenancy and eviction, after initially filing a suit based on a landlord-tenant relationship that was dismissed for non-prosecution. The Supreme Court bench, comprising Justices J.B. Pardiwala and Sudhanshu Dhulia, delivered the judgment.

Case Background

The dispute concerns a shop located in Ballia, Uttar Pradesh. The plaintiffs claimed ownership, while the defendant asserted that the property was mortgaged to his father in 1957 by the plaintiffs’ father. The defendant’s father, the mortgagee, remained in possession of the property. The plaintiffs initially filed a suit in 2007, claiming the defendant was a tenant who had not paid rent and had illegally sub-let the property. This suit was dismissed for non-prosecution in 2010. Subsequently, in 2009, the plaintiffs filed a new suit for redemption of the mortgage. In this suit, the plaintiffs sought to amend their plaint to include the claim that the defendant was also a tenant and was liable to be evicted. The lower courts allowed this amendment, which the defendant challenged.

Timeline:

Course of Proceedings

The Civil Judge initially rejected the plaintiffs’ application to amend the plaint. However, the Additional District Judge allowed the revision application, permitting the amendment. The High Court of Judicature at Allahabad upheld this decision, stating that the amendment did not change the nature of the suit and that no injustice should be done due to the fault of the advocate. The High Court did increase the cost imposed on the plaintiff for the amendment to Rs. 5000.

Legal Framework

The case primarily involves the interpretation and application of the following legal provisions:

• Order VI Rule 17 of the Code of Civil Procedure, 1908 (CPC): This provision allows the court to permit either party to alter or amend their pleadings at any stage of the proceedings, provided it is necessary for determining the real questions in controversy and does not cause injustice to the other side. The proviso to this rule states that no amendment shall be allowed after the trial has commenced, unless the court concludes that the party could not have raised the matter before the commencement of trial despite due diligence.
• Section 83 of the Transfer of Property Act, 1882 (TP Act): This provision deals with the deposit of mortgage money in court and the procedure for redemption of a mortgage.
• Article 61A of the Schedule to the Limitation Act, 1963: This article specifies the limitation period for a suit to redeem a mortgage.
• Order IX Rule 9 of the Code of Civil Procedure, 1908 (CPC): This rule bars a fresh suit on the same cause of action if the previous suit was dismissed for default under Order IX Rule 8 of the CPC.

The Supreme Court emphasized that amendments to pleadings should be liberally allowed to determine the real issues in dispute, unless it causes injustice or prejudice to the other party.

Arguments

Appellant (Defendant) Arguments:

• The High Court’s order was a non-speaking order, lacking reasons.
• The amendment changed the fundamental nature of the suit. Initially, the suit was for mortgage redemption, but the amendment introduced a claim for eviction based on tenancy.
• The plaintiffs were attempting to reintroduce the cause of action from the previous suit which was dismissed for non-prosecution. The suit for possession should have been filed in the Small Causes Court, not the Civil Court.
• The amendment was barred by the principles of Order IX Rule 9 of the CPC, as the suit was based on the same cause of action as the previous dismissed suit.
• Relied on Revajeetu Builders and Developers v. Narayanaswamy & Sons and Others [(2009) 10 SCC 84], arguing that amendments that fundamentally change the nature of the case should not be allowed.

Respondent (Plaintiff) Arguments:

• The High Court did not err in allowing the amendment, as it did not change the nature of the suit.
• Order IX Rule 9 of the CPC does not apply because the cause of action in the second suit is different from the first suit.
• The issue of Order IX Rule 9 of the CPC is separate from the question of amendment under Order VI Rule 17 of the CPC.
• The plaintiffs were not trying to change the nature of the suit but were only clarifying the facts and seeking alternative reliefs.

The core contention of the defendant was that the plaintiffs were impermissibly trying to combine a mortgage redemption suit with a tenancy dispute, effectively changing the entire nature of the suit. The plaintiffs, on the other hand, argued that they were simply clarifying their claims and seeking alternative reliefs based on the facts of the case.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether the High Court committed any error in passing the impugned order.
2. Whether the Plaintiffs should be permitted to amend the plaint.
3. Whether the provisions of Order IX Rule 9 of the CPC are applicable to the case on hand.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

Cases Relied Upon by the Court:

Legal Provisions Considered by the Court:

Judgment

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

How each authority was viewed by the Court?

The Court relied on several authorities to support its reasoning:

• Pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil [AIR 1957 SC 363]*: Followed to emphasize that amendments should be allowed if they do not cause injustice and are necessary to determine real questions in controversy.
• Gajanan Jaikishan Joshi v. Prabhakar Mohanlal Kalwar [(1990) 1 SCC 166]*: Followed to reiterate the principles for allowing amendments.
• B.K. Narayana Pillai v. Parameswaran Pillai and Another [(2000) 1 SCC 712]*: Followed to support the principle that amendments should be allowed if they do not constitute a new cause of action but are a different approach to the same facts.
• A.K. Gupta and Sons Ltd. v. Damodar Valley Corporation [AIR 1967 SC 96]*: Followed to support the principle that amendments should be allowed even after the expiry of the statutory period of limitation if it does not introduce a new cause of action.
• Ganga Bai v. Vijay Kumar [(1974) 2 SCC 393]*: Followed to emphasize that the power to allow amendments is wide but should be exercised with care.
• Ganesh Trading Co. v. Moji Ram [(1978) 2 SCC 91]*: Followed to support that amendments are intended to promote justice and not defeat it.
• North Eastern Railway Administration, Gorakhpur v. Bhagwan Das [(2008) 8 SCC 511]*: Followed to establish the principles governing the grant or disallowance of amendments under Order 6 Rule 17 CPC.
• P.A. Jayalakshmi v. H. Saradha and Others [(2009) 14 SCC 525]*: Followed to reiterate the observations in North Eastern Railway Administration, Gorakhpur v. Bhagwan Das and the purpose of the amendment to Order 6 Rule 17 CPC.
• Life Insurance Corporation of India v. Sanjeev Builders Private Limited and Another [Civil Appeal No. 5909 of 2022]*: Followed to establish the principles governing the grant of amendment of pleadings.
• Firm Sriniwas Ram Kumar v. Mahabir Prasad and Others [AIR 1951 SC 177]*: Followed to support the principle that a party is entitled to take alternative pleas in support of its case, even if inconsistent.
• G. Nagamma and Another v. Siromanamma and Another [(1996) 2 SCC 25]*: Followed to support the principle that a plaintiff is entitled to plead inconsistent pleas while seeking alternative reliefs.
• Praful Manohar Rele v. Krishnabai Narayan Ghosalkar and Others [(2014) 11 SCC 316]*: Followed to reiterate the principle that alternative and inconsistent pleas can be taken by a plaintiff.
• Revajeetu Builders and Developers v. Narayanaswamy & Sons and Others [(2009) 10 SCC 84]*: Discussed but distinguished, stating that it does not apply to the facts of the present case.
• State of Madhya Pradesh v. Union of India and Another [(2011) 12 SCC 268]*: Followed to support the principle that amendments should be allowed liberally to avoid multiplicity of litigations.
• The Gaya Municipality v. Ram Prasad Bhatt and Anr. [Civil Appeal No. 29 of 1965]*: Followed to explain the scope of Order IX Rule 9 of the CPC.
• Jay Cook v. Henry S. Gill [(1873) LR 8 CP 107]*: Followed for defining “cause of action.”
• Mohammad Khalil Khan and others v. Mahbub Ali Mian and others [AIR 1949 PC 78]*: Followed for defining and interpreting “cause of action” and for the test to determine the identity of causes of action in two suits.
• Suraj Rattan Thirani and Others v. Azamabad Tea Co. Ltd. and Others [AIR 1965 SC 295]*: Followed for explaining the true purport of Order IX Rule 9 of the CPC and for the test to determine the identity of causes of action in two suits.
• Sardar Balbir Singh v. Atma Ram Srivastava [AIR 1977 ALL 211 (FB)]*: Followed for explaining the essential elements of a cause of action.
• Shridhar Sadba Powar v. Ganu Mahadu Kavade and others [ILR (1928) 52 Bom 111]*: Followed for the principle that a suit for redemption is not barred by Order IX Rule 9 of the CPC.
• Vithal Rajaram Sutar and another v. Ramchandra Pandu Jadhav and others [AIR 1948 Bom 226]*: Followed for the principle that the general terms of Order XXII Rule 9 of the CPC cannot override the specific terms of Section 60 of the TP Act.
• Bhaiya Raghunath Singh and others v. Musammat Hansraj Kunwar and others [(1933-34) 61 IA 362]*: Followed for the principle that the right of redemption can be extinguished as provided in Section 60 of the Transfer of Property Act.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Liberal Approach to Amendments: The Court emphasized that amendments to pleadings should be liberally allowed to determine the real issues in dispute, provided it doesn’t cause injustice or prejudice to the other side.
• Alternative Pleas: The Court recognized that a plaintiff is entitled to take alternative pleas in support of its case, even if these pleas are inconsistent. This was crucial in allowing the plaintiffs to include a claim of tenancy along with their claim for mortgage redemption.
• Distinct Cause of Action: The Court held that the cause of action in the present suit (mortgage redemption) was different from the previous suit (tenancy dispute), thus, Order IX Rule 9 of the CPC was not applicable.
• No Prejudice to the Defendant: The Court noted that the defendant had already raised the issue of mortgage in his written statement in the previous suit, and therefore, the amendment did not cause any prejudice.
• Avoiding Multiplicity of Litigation: The Court aimed to avoid multiple litigations by allowing the plaintiffs to consolidate their claims in a single suit.

Ratio of Fact to Law

The judgment has a significant ratio of law to fact. The Court focused on the following:

• Legal Principles: The judgment heavily relies on legal principles governing amendments to pleadings (Order VI Rule 17 CPC), the concept of cause of action (Order IX Rule 9 CPC), and the right to take alternative pleas.
• Application of Law to Facts: The Court applied these legal principles to the specific facts of the case, particularly focusing on whether the amendment changed the nature of the suit and whether it caused prejudice to the defendant.
• Interpretation of Legal Provisions: The Court interpreted the relevant legal provisions and clarified their application to the given situation.
• Precedents: The Court relied on previous decisions of the Supreme Court and other courts to support its reasoning.

The ratio of law to fact is approximately 70:30, with a greater emphasis on the legal principles and their interpretation.

Final Order

The Supreme Court dismissed the appeal filed by the defendant. The Court upheld the order of the High Court, which had allowed the plaintiffs to amend their plaint. The Court did not impose any additional costs on either party.

Flowchart of Proceedings

Conclusion

The Supreme Court’s judgment in Ganesh Prasad vs. Rajeshwar Prasad & Ors. reaffirms the principle that amendments to pleadings should be liberally allowed to determine the real issues in dispute, provided that it does not cause injustice or prejudice to the other party. The Court emphasized that a plaintiff is entitled to take alternative pleas, even if inconsistent, to support their case. This case clarifies the scope and application of Order VI Rule 17 of the Code of Civil Procedure, 1908, and also distinguishes it from Order IX Rule 9 of the CPC. The judgment also demonstrates the importance of avoiding multiplicity of litigation by allowing parties to consolidate their claims in a single suit. This decision has significant implications for civil procedure, providing clarity on the extent to which pleadings can be amended and the circumstances under which alternative and inconsistent pleas are permissible.