Supreme Court Allows Amendment of Written Statement in Property Dispute: Raj Kumar Bhatia vs. Subhash Chander Bhatia (2017) INSC 754

Date of the Judgment: December 15, 2017
Citation: (2017) INSC 754
Judges: Dipak Misra, CJI, A. M. Khanwilkar, J, Dr D Y Chandrachud, J

Can a party amend their written statement to include a new defense, even if it is years after the initial filing? The Supreme Court of India addressed this question in a property dispute case. The court allowed an amendment to the written statement, emphasizing that amendments should be liberally allowed unless they cause undue prejudice or delay. This judgment clarifies the scope of amendment of pleadings in civil suits. The bench comprised Chief Justice Dipak Misra and Justices A. M. Khanwilkar and Dr. D. Y. Chandrachud, with the opinion authored by Dr. D. Y. Chandrachud, J.

Case Background

The case involves a property dispute between two brothers, Raj Kumar Bhatia (the appellant) and Subhash Chander Bhatia (the respondent). The dispute concerns a property located in New Delhi. The original suit was filed by their mother, Sharda Rani Bhatia, in 2002. She sought possession, damages, and mesne profits from Raj Kumar Bhatia.

Sharda Rani Bhatia claimed that the property originally belonged to her husband, Ratan Lal Bhatia. After his death, she became the owner through a relinquishment deed from her sons, including Raj Kumar and Subhash. She later gifted the property to Subhash in 2003, who was then added as a co-plaintiff. Sharda Rani Bhatia passed away in 2005, and Subhash continued the suit.

Raj Kumar Bhatia, in his initial written statement in 2003, claimed that the relinquishment deed was obtained through undue influence. He also asserted an oral family arrangement where he was to occupy the first and second floors of the property. He further stated that the property was joint family property.

In 2016, Raj Kumar Bhatia sought to amend his written statement to include more details about the ancestral nature of the property. He wanted to argue that the property was a joint Hindu family property and that his grandchildren also had coparcenary rights. The Trial Court allowed this amendment, but the High Court set aside this order.

Timeline

Course of Proceedings

The Trial Court initially allowed Raj Kumar Bhatia’s application to amend his written statement. However, the High Court of Delhi set aside this order, stating that the amendment was not bona fide and unnecessary. The High Court also opined that the proposed amendment was not tenable on merits. The High Court held that after the enactment of the Hindu Succession Act, 1956, property devolved from a paternal ancestor does not automatically become HUF property. It is considered self-acquired property unless an HUF existed at the time of devolution.

The High Court’s decision was based on the judgments of the Supreme Court in Commissioner of Wealth-tax, Kanpur v Chander Sen [(1986) 3 SCC 567] and Yudhishter v Ashok Kumar [(1987) 1 SCC 204].

Legal Framework

The case primarily involves the interpretation of Order 6 Rule 17 of the Code of Civil Procedure (CPC), which deals with the amendment of pleadings. The Supreme Court also considered the principles related to Hindu Undivided Family (HUF) property under the Hindu Succession Act, 1956.

Order 6 Rule 17 of the CPC states that a court may allow either party to alter or amend their pleadings at any stage of the proceedings. The court may allow this amendment if it is necessary for the purpose of determining the real question in controversy between the parties.

Arguments

Appellant’s Arguments (Raj Kumar Bhatia):

• The appellant argued that the proposed amendment was an elaboration of the existing averments in the original written statement.
• He contended that the original written statement already mentioned that the property was joint family property.
• The appellant submitted that the High Court should not have interfered with the Trial Court’s order under Article 227 of the Constitution.
• He argued that the High Court should not have considered the merits of the proposed amendment at the stage of allowing it.
• He pointed out that the respondent had already filed a review application before the Trial Court, and therefore, the Article 227 petition was not maintainable.

Respondent’s Arguments (Subhash Chander Bhatia):

• The respondent argued that the original written statement challenged the relinquishment deed and asserted an oral arrangement, implying that the property was self-acquired.
• He contended that the appellant could not withdraw his admission by amending the written statement.
• The respondent submitted that the amendment was filed after the issues were framed, evidence was filed, and the trial had commenced.
• He argued that the amendment would change the fundamental nature of the defense and delay the suit’s disposal.

The innovativeness of the argument by the appellant was that he was trying to elaborate on the existing defense of the property being joint family property, by bringing in the concept of coparcenary rights of his grandchildren, which was not there in the original written statement.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue before the court was whether the High Court was justified in setting aside the Trial Court’s order allowing the amendment of the written statement.

The sub-issue was whether the High Court was justified in entering into the merits of the case while considering the amendment application.

Treatment of the Issue by the Court

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

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court held that the High Court had exceeded its jurisdiction under Article 227 of the Constitution by reviewing the merits of the proposed amendment. The court emphasized that the High Court’s supervisory jurisdiction is limited to ensuring that the inferior court acts within its jurisdiction. The High Court should not act as an appellate court and re-evaluate the evidence.

The Supreme Court also noted that the proposed amendment was an elaboration of the existing defense and would not cause any prejudice to the plaintiff. The court stated that the Trial Court had correctly exercised its jurisdiction in allowing the amendment.

The Supreme Court allowed the appeal and set aside the judgment of the High Court. The order passed by the Trial Court allowing the amendment of the written statement was affirmed.

The Court observed that whether an amendment should be allowed is not dependent on whether the case which is proposed to be set up will eventually succeed at the trial.

The following authorities were viewed by the Court in the following manner:

• Commissioner of Wealth-tax, Kanpur v Chander Sen [(1986) 3 SCC 567]: The Court noted that this authority was used by the High Court to come to a conclusion about the merits of the case, which was not permissible at the stage of amendment of pleadings.
• Yudhishter v Ashok Kumar [(1987) 1 SCC 204]: The Court noted that this authority was used by the High Court to come to a conclusion about the merits of the case, which was not permissible at the stage of amendment of pleadings.
• Sadhna Lodh v National Insurance Company [(2003) 3 SCC 524]: The Court followed this authority to emphasize the limitations of the High Court’s jurisdiction under Article 227.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that amendments to pleadings should be liberally allowed, provided they do not cause undue prejudice or delay. The Court emphasized that the High Court overstepped its supervisory jurisdiction under Article 227 by evaluating the merits of the proposed amendment. The Court also noted that the amendment was not a complete departure from the original defense but rather an elaboration of it.

The Court reasoned that the High Court should not have evaluated the merits of the amendment at the stage of considering the amendment application. The merits of the case should have been decided at the trial. The Court also reasoned that the amendment was an elaboration of the existing defense and would not cause any prejudice to the plaintiff.

The Court rejected the argument that the amendment was a withdrawal of an admission, stating that it was merely an elaboration of the existing defense. The Court also rejected the argument that the amendment was filed too late, noting that the amendment of the plaint was allowed in 2013, and the appellant had filed a written statement to the amended plaint.

The Supreme Court quoted from the judgment: “Whether an amendment should be allowed is not dependent on whether the case which is proposed to be set up will eventually succeed at the trial.”

The Supreme Court quoted from the judgment: “In enquiring into merits, the High Court transgressed the limitations on its jurisdiction under Article 227.”

The Supreme Court quoted from the judgment: “Allowing the amendment would not amount to the withdrawal of an admission contained in the written statement (as submitted by the respondent) since the amendment sought to elaborate upon an existing defence.”

There was no minority opinion in this case.

The Court’s reasoning was based on a liberal interpretation of Order 6 Rule 17 of the CPC, which allows for amendments of pleadings at any stage of the proceedings. The Court also emphasized the limitations of the High Court’s jurisdiction under Article 227 of the Constitution.

The decision has implications for future cases by reaffirming the principle that amendments to pleadings should be liberally allowed, unless they cause undue prejudice or delay. It also clarifies the scope of the High Court’s supervisory jurisdiction under Article 227.

The Court did not introduce any new doctrines or legal principles in this case.

Key Takeaways

• Amendments to written statements should be liberally allowed to ensure a fair trial.
• High Courts should not interfere with Trial Court orders allowing amendments unless there is a clear lack of jurisdiction.
• The merits of a proposed amendment should not be evaluated at the stage of allowing it.
• The High Court’s supervisory jurisdiction under Article 227 is limited to ensuring that the inferior court acts within its jurisdiction.

Directions

The Supreme Court did not provide any specific directions in this case. The order of the Trial Court allowing the amendment of the written statement was affirmed.

Development of Law

The ratio decidendi of the case is that amendments to pleadings should be liberally allowed unless they cause undue prejudice or delay, and that the High Court should not interfere with the Trial Court’s order allowing the amendment of the written statement, by entering into the merits of the case.

There is no change in the previous position of law.

Conclusion

The Supreme Court’s decision in Raj Kumar Bhatia vs. Subhash Chander Bhatia reinforces the principle that amendments to pleadings should be liberally allowed to facilitate a just and fair trial. The Court emphasized that the High Court should not have interfered with the Trial Court’s order by entering into the merits of the case at the stage of allowing an amendment. This judgment clarifies the scope of amendment of pleadings in civil suits and the limitations of the High Court’s supervisory jurisdiction under Article 227 of the Constitution.