Law On Return And Rejection Vis-a-Vis Amendment Of The Plaint: Dichotomy In The Judicial Approach

While returning a finding on the issue of Jurisdiction, the Court has to see whether it has the requisite Territorial and Pecuniary Jurisdiction to entertain the Suit. If the said issue is answered in the negative, the Court exercises its powers under Order VII Rule 10 Civil Procedure Code, 1908 (CPC) and 'Return the Plaint' for it to be presented to the Court in which the Suit should have been originally instituted, with the necessary Territorial and Pecuniary jurisdiction to entertain the dispute.

Similarly, while adjudicating upon the issue of Maintainability, the Court has to decide whether the rigours of Order VII Rule 11 CPC are attracted or not. In the event the Court finds that the Plaint is hit by any of the provisions of Order VII Rule 11 CPC, the Court rejects the Plaint. It is settled law that an order of Rejection/Return of Plaint does not attract the Principle of Res-Judicata and therefore, does not act as a complete bar to seek relief in respect of the same cause of action as originally claimed in the Plaint. In appropriate cases, the plaintiff has an option to re-file the Plaint after carrying out the necessary changes and modifications in the averments in the Plaint so as to save it from the rigours of order VII Rule 11 CPC.

It would, therefore, be safe to say that neither an order under Order VII Rule 10 CPC nor an order under Order VII Rule 11 CPC puts the dispute to an end as it is not an adjudication on the merits of the case. However, one may consider that the procedure of filing – rejection/return – re-filing subjects a litigant to a tedious and cumbersome task of re-filing the entire suit and inevitably results in wastage of resources, time and effort.

Ergo, it brings us to the question that in a bid to save the Plaint from being Rejected/Returned, can the provision of Order VI Rule 17 CPC be invoked?

Order VI Rule 17 CPC allows a party, at any stage of the proceedings,to make such amendments which are necessary for adjudication of the dispute. The Courts initially grappled with the question whether the benefit of amendment of pleadings can be allowed even when an application under Order VII Rule 11 CPC was pending before it. The Delhi High Court in Wasudhir Foundation v. C. Lal & Sons^[1] answered in the following terms:-

"..After all what is the effect of Order 7 rule 11? It is, if I understand correctly, that the plaintiff would not be precluded from filing fresh suit in respect of the same cause of action. If such be the effect, why not permit the amendment of the plaint so as to remove the defect and prevent the operation of the Rule? Why make him first invite the rejection of the plaint, then allow him to file a fresh suit at the expense of delay and heavy cost? Why not straightway allow him to amend the plaint, remove the defect and permit him, thereby, to proceed with the same suit? Why this rigmarole? After all, procedural law is intended to facilitate and not to obstruct the course of justice…. The ouster of Order VI, Rule 17 will throttle the very life line of Order VII, Rule 11. Instead of promoting, it would defeat the ends of justice. I refuse to be a party to such an approach. Order VI, Rule 17 is thus held to be neither restricted nor controlled by Order VII, Rule 11."

Thereafter the Division Bench of the Delhi High Court in a more recent judgment in the case of Archie Comic Publications Inc v. Purple Creations Pvt. Ltd and Ors.^[2], while relying on the ratio of Wasudhir Foundation, dismissed the application seeking amendment of Plaint and allowed the application seeking Rejection of the Plaint. In the facts of the said case, the Plaintiff had sought to invoke the jurisdiction of the Delhi High Court as it claimed to be carrying on business in Delhi through its distributor i.e. a book store in Delhi which had been importing books from the Plaintiff since 1979. The Court came to the conclusion that it did not have the jurisdiction to entertain the dispute. It noted that even if the amendment application was indeed allowed, since the Plaintiff company was based out of New York and did not have any office in India, let alone in Delhi, the Delhi High Court could not be said to possess the necessary Territorial jurisdiction. The Division Bench opined as follows:-

"As is evident, Variety Book Store is not the special agent of the Appellant. The Appellant has no control over the working of Variety Book Store. Thus, in view of the legal position, enunciated above, it cannot be said that the plaintiff carries on business or was personally working at Delhi thus, vesting a jurisdiction in this Court to entertain the plaint.…In our view, if the plaint disclosed some facts, which may however, be incomplete to vest territorial jurisdiction in the Court, the Court would entertain an Application for amendment of pleadings. This is more so, as such an amendment would not set up a new case. However, if no facts are disclosed qua territorial jurisdiction then the defect cannot be even cured by amendment and in such a case an Application for amendment cannot be entertained. Indubitably, at this stage the Respondent's response cannot be looked into. However, on merits in the present case, as discussed above, even taking the pleadings and documents annexed thereto by way of amendment this Court has not territorial jurisdiction to entertain the plaint."

In light of the aforesaid judgments, it is clear that the stage at which the application seeking amendment is moved is immaterial and it can be moved in the face of an earlier pending application seeking Rejection of the Plaint. The Courts above have construed the interplay of Order VII Rule 11 CPC and Order VI Rule 17 CPC to achieve the objectives with which the provision for amendment of pleadings is provided for in the CPC i.e. to avoid multiplicity of proceedings, to save precious judicial time and avoid expenses for the litigants^[3].

It is no longer res integra that the provision of Order VI Rule 17 CPC has to be construed liberally and allowing an application for amendment should be the norm rather than an exception. In Mount Mary Enterprises v. Jivratna Medi Treat Ltd.^[4] the Apex Court held that an amendment application should be normally granted unless by virtue of the amendment, the nature of the suit is changed or some prejudice is caused to the defendant. The Apex Court in Jai Jai Ram Manohar Lal v. National Building Material Supply, Gurgaon^[5] has held that the rules of procedure are intended to be a handmaid to the administration of justice and amendments cannot be refused merely because of some mistake, negligence, inadvertence or even infraction of the rules of procedure by a party. Moreover, in Ganesh Trading Co. v. Moji Ram^[6], the Apex Court held that defective pleadings were generally curable till the time the cause of action sought to be brought in was not an entirely new or inconsistent cause of action, virtually amounting to the substitution of a new plaint or a new cause of action. In Rajesh Kumar Aggarwal and Ors. v. K.K. Modi and Ors.^[7] the Court while considering an application for amendment had pobserved that the Courts should not go into the correctness or falsity of the amendment. Likewise, the Court should also not record a finding on the merit of the amendment and the merits of the amendment sought to be incorporated by way of an amendment are not to be adjudged at the stage of allowing the prayer for amendment.

The Courts have been consistent in their view that ordinarily under Order VI Rule 17 CPC, all amendments are ought to be allowed which satisfy two conditions (a) of not working injustice to the other side and (b) of being necessary for the purpose of determining the real question in controversy between the parties.^[8]It has also been held that in a case of unclear or ambiguous pleadings, the same may be allowed to be amended to clarify the already pleaded facts till the same does not give rise to addition of a new cause of action^[9]. Further in Bhatia Industries and Ors. v. Pandey Industries and Ors.^[10], the Delhi High Court held that it is a settled proposition of law that Courts should allow all amendments, which are necessary for determining the matters in controversy between the parties since the object of the Court is to decide the right of the parties and not to punish them for the mistake they make in conduct of their cases.

While the Courts have been forthcoming and generous in allowing applications seeking amendment of pleadings in the face of an application pending under Order VII Rule 11 CPC, they seem to have not followed the same path in allowing applications seeking amendment of pleadings before deciding an application under Order VII Rule 10 CPC.

In the case of HSIL v. Imperial Ceramic^[11], the Delhi High Court dismissed an application moved by plaintiff under Order VI Rule 17 CPC to bring forth certain additional facts in support of the earlier pleaded cause of action and simultaneously allowed the application under Order VII Rule 10 CPC. While acknowledging that the amendment application, if allowed, would have the effect of rendering the application seeking Return of Plaint infructuous, the Hon'ble Court proceeded to disallow the said amendment application stating inter alia that once the Plaint failed to disclose the Territorial Jurisdiction in its favour, it cannot assume jurisdiction to entertain/allow an application under Order VI Rule 17 CPC and has to mandatorily Return the Plaint. The relevant portion has been reproduced hereinunder:-

"21. Thus, if the plaint in these suits as it exists, does not disclose this Court to be having territorial jurisdiction, then the only option for this Court is to return/reject the plaint and this Court would not have jurisdiction to even consider the application of the plaintiff for amendment of the plaint and which amendment, if allowed, would disclose the plaint as having necessary averments for his Court to give jurisdiction to entertain the suit.

22. The counsel for the plaintiff has contended that the plaintiff, even after return/rejection of the plaint, would be entitled to sue the defendants afresh in this Court only by making the averments in the fresh plaint to be filed, averments which are sought to be made by way of amendment in these pending suits. It is argued that once it is so, this Court should not, on account of technicality, compel the plaintiff to follow the said procedure…

23. Though undoubtedly so but once the law is found to be aforesaid, I cannot, in the name of "technicalities being not allowed to come in the way of justice" violate the law or decide contrary to law…"

Significantly, by solely relying on this judgment, more than 10 Suits were returned by different benches of the Delhi High Court! Consequentially, Plaints in all those suits were re-filed after carrying out the amendments as were originally sought when application under Order VI Rule 17 CPC was moved. it is interesting to note that that in all the Suits that were re-filed, not only were summons issued and jurisdiction exercised, but fresh injunctions were also granted by the Delhi High Court.

In my view, by taking the aforesaid view the Courts have negated the settled position of law that procedural law is not a tyrant but a servant, not an obstruction but an aid to justice. An artificial distinction has been created by the Courts between Return of Plaint and Rejection of Plaint without rationalising the difference in approach. It can also be seen that by putting the clock back to zero, no real purpose was served besides burdening the Courts with multiple rounds of litigation and enormous capital expenditure at the hands of the plaintiff. This entire rigmarole could have been avoided by adopting a similar view while dealing with an application under Order VII Rule 10 CPC and thereby not rendering the entire purpose of Order VI Rule 17 CPC otiose.