Bar Of Order II Rule 2 CPC Applies Only To Subsequent Suits ; Cannot Apply To An Amendment Sought On An Existing Suit : Supreme Court

The Supreme Court observed that the bar of Order II Rule 2 of the CPC cannot apply to an amendment which is sought on an existing suit, but applies only to the subsequent suits.

The bench comprising Justices Aniruddha Bose and JB Pardiwala also observed that the principle of constructive res judicata has no application when there was no formal adjudication between the parties after full hearing.

The appeal arises from a suit filed in 1986 by plaintiffs for the specific performance of contract based on an agreement dated 08.06.1979. The Bombay High Court allowing the application filed by plaintiffs permitted them to amend the plaint. The suit originally claimed the damages to the tune of Rs. 1,01,00,000/- [Rs. One Crore & One Lakh only] in the alternative was prayed for. By way of amendment the damages prayed for is to the tune of Rs. 4,00,01,00,000/- [Rs. Four Hundred Crore & One Lakh only].

One of the contentions raised in the appeal filed by LIC (defendant) was that the amendment was hit by the provisions of Order II Rule 2 of the Civil Procedure Code, 1908. It was also contended that the amendment could be said to be even hit by the principle of constructive res judicata. In this regard, the plaintiffs contended that the provisions of Order II Rule 2 of the CPC cannot be made applicable to an application seeking amendment of plaint. So the issues raised qua the above contentions were (a) Whether the provisions of Order II Rule 2 CPC can be made applicable to an amendment application? (b) Whether the amendment of plaint for the purpose of enhancing the amount towards damages could be said to be hit by the doctrine of constructive res judicata? 

The court noted that the Order II Rule 2, which deals with the relinquishment of part of claim, reads thus: Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished. Referring to the judgment in Gurbux Singh v. Bhooralal, AIR 1964 SC 1810 , the court observed:

"The ratio of the said judgment is that the relief being barred by limitation, the Order II Rule 2 of the CPC only came in as an adjunct. However, Gurbux Singh (supra) makes it clear that the bar of Order II Rule 2 of the CPC applies only to the subsequent suits. . In the light of the principles discussed and the law laid down by the Constitution Bench as also the other decisions discussed above, we are of the view that if the two suits and the relief claimed therein are based on the same cause of action then the subsequent suit will become barred under Order II Rule 2 of the CPC. However, we do not find any merit in the contention raised on behalf of the appellant herein that the amendment application is liable to be rejected by applying the bar under Order II Rule 2 of the CPC. Order II Rule 2 of the CPC cannot apply to an amendment which is sought on an existing suit."

The court also approved the view taken by the Delhi High Court in Vaish Cooperative Adarsh Bank Ltd. v. Geetanjali Despande & Ors., (2003) 102 DLT 570 that the bar under Order II Rule 2 of the CPC is only for a subsequent suit.

The court also rejected the contention that the amendment application is hit by the principle of constructive res judicata.

"The principle of constructive res judicata has no application in the instant case, since there was no formal adjudication between the parties after full hearing. The litigation before this Court has come up at the stage when the courts below allowed the amendment of plaint for the purpose of enhancing the amount towards damages in the alternative to the main relief of specific performance of the contract.", the bench said.

Other issues raised in this case will be covered in a separate report.

Case details

Life Insurance Corporation vs Sanjeev Builders Private Limited | 2022 LiveLaw (SC) 729 | CA 5909 OF 2022 | 1 September 2022 | Justices Aniruddha Bose and JB Pardiwala

Headnotes

Code of Civil Procedure, 1908 ; Order II Rule 2 - Order II Rule 2 of the CPC cannot apply to an amendment which is sought on an existing suit - It applies only for a subsequent suit. (Para 49-50, 70)

Code of Civil Procedure, 1908 ; Order VI Rule 17 - Delay in applying for amendment alone is not a ground to disallow the prayer. Where the aspect of delay is arguable, the prayer for amendment could be allowed and the issue of limitation framed separately for decision. (Para 70)

Code of Civil Procedure, 1908 ; Order VI Rule 17 - All amendments are to be allowed which are necessary for determining the real question in controversy provided it does not cause injustice or prejudice to the other side - The prayer for amendment is to be allowed (i) if the amendment is required for effective and proper adjudication of the controversy between the parties, and (ii) to avoid multiplicity of proceedings, provided (a) the amendment does not result in injustice to the other side, (b) by the amendment, the parties seeking amendment does not seek to withdraw any clear admission made by the party which confers a right on the other side and (c) the amendment does not raise a time barred claim, resulting in divesting of the other side of a valuable accrued right (in certain situations) - A prayer for amendment is generally required to be allowed unless (i) by the amendment, a time barred claim is sought to be introduced, in which case the fact that the claim would be time barred becomes a relevant factor for consideration, (ii) the amendment changes the nature of the suit, (iii) the prayer for amendment is malafide, or (iv) by the amendment, the other side loses a valid defence - In dealing with a prayer for amendment of pleadings, the court should avoid a hyper technical approach, and is ordinarily required to be liberal especially where the opposite party can be compensated by costs. (Para 70)

Code of Civil Procedure, 1908 ; Order VI Rule 17 - Where the amendment would enable the court to pin-pointedly consider the dispute and would aid in rendering a more satisfactory decision, the prayer for amendment should be allowed. - Where the amendment merely sought to introduce an additional or a new approach without introducing a time barred cause of action, the amendment is liable to be allowed even after expiry of limitation - Amendment may be justifiably allowed where it is intended to rectify the absence of material particulars in the plaint - Where the amendment changes the nature of the suit or the cause of action, so as to set up an entirely new case, foreign to the case set up in the plaint, the amendment must be disallowed. Where, however, the amendment sought is only with respect to the relief in the plaint, and is predicated on facts which are already pleaded in the plaint, ordinarily the amendment is required to be allowed - Where the amendment is sought before commencement of trial, the court is required to be liberal in its approach. The court is required to bear in mind the fact that the opposite party would have a chance to meet the case set up in amendment. As such, where the amendment does not result in irreparable prejudice to the opposite party, or divest the opposite party of an advantage which it had secured as a result of an admission by the party seeking amendment, the amendment is required to be allowed. Equally, where the amendment is necessary for the court to effectively adjudicate on the main issues in controversy between the parties, the amendment should be allowed. (Para 70)

Code of Civil Procedure, 1908 ; Section 11 - The principle of constructive res judicata has no application when there was no formal adjudication between the parties after full hearing. (Para 52)

Specific Relief Act, 1963 ; Section 21,22 - Code of Civil Procedure, 1908 ; Order VI Rule 17 -  The provisions contained in Order VI Rule 17 of the CPC would apply to a specific performance suit and a plaintiff who has earlier failed to incorporate the reliefs for compensation or who has incorporated the reliefs for compensation but seeks amendment in the same, could seek the permission of the court to introduce these reliefs by way of amendment. (Para 66)

Specific Relief Act, 1963 ; Section 21 - Specific Relief (Amendment) Act, 2018 - After 2018 amendment, damages are now available only in addition to specific performance and not in lieu thereof. (Para 59)

Specific Relief Act, 1963 ; Section 21 (5) - Sub-section (5) stipulates that compensation cannot be awarded under the section unless the Plaintiff has claimed such compensation in the plaint. This provision is mandatory. (Para 55)

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