Case Title: Life Insurance Corporation vs Sanjeev Builders Private Limited | 2022 LiveLaw (SC) 729
Summary
The Supreme Court’s Order VI Rule 17 of the Code of Civil Procedure states that a delay in filing an amendment application should be compensated by costs and error or mistake, not fraudulent grounds for rejecting the application for amendment of the petition or written statement. The court established parameters for evaluating petitions requesting amendments, ensuring a liberal approach. In a case involving a plaintiffs’ suit in 1986, the Bombay High Court granted the plaintiffs’ application to amend the complaint, resulting in an additional amount of Rs. 4,00,01,00,000 in the form of an amendment. The court established principles that allow amendments essential for resolving the substantive dispute, as long as they do not inflict unfairness or prejudice on the opposing side.
The court should grant amendment requests if they facilitate a more precise examination of the dispute and contribute to a more satisfactory decision. Merely a delay in submitting the amendment application does not justify rejecting the petition. In cases where the delay aspect is debatable, the amendment request may be granted and the issue of limitation may be presented separately for resolution. In cases where the amendment requested solely pertains to the relief specified in the plaintiff, it is customary for the amendment to be granted.
About the case
Refusing the application for amendment under Order VI Rule 17 of the Code of Civil Procedure would not be sufficient justification for the Supreme Court’s ordinary delay. “The delay in filing the application for amendment of the pleadings should be properly compensated by costs and error or mistake which, if not fraudulent, should not be made a ground for rejecting the application for amendment of plead or written statement” , according to the court.
In addition, the bench, which consisted of Justices Aniruddha Bose and JB Pardiwala, established parameters for evaluating petitions requesting an amendment to the complaint. It was noted that a liberal approach must be taken into account when evaluating amendment applications of this nature. On June 8, 1979, the plaintiffs filed a suit in 1986 seeking specific performance of a contract. The court was currently deliberating on an appeal that had arisen from that agreement. According to the challenged order, the Bombay High Court granted the plaintiffs’ application to amend the complaint. The initial claim for damages in the lawsuit was for Rs. 1,01,00,000/- [One Crore and One Lakh only]. Subsequently, an alternative amount of Rs. 1,01,00,000/- was requested. In the form of an amendment, the requested damages amount to Rs. 4,00,01,00,000 [Excluding One Lakh]. In its denial of the appeal, the court established the subsequent principles:
Allow all amendments that are essential for resolving the substantive dispute, so long as they do not inflict unfairness or prejudice on the opposing side. The necessity of this is evident from the word “shall” used in the final section of Order VI Rule 17 of the CPC. The prayer for amendment shall be granted (i) if it is necessary for the efficient and proper resolution of the dispute between the parties; (ii) to prevent redundant legal proceedings; and (iii) to ensure that the amendment does not lead to unjust treatment of the opposing party; (b) the parties seeking the amendment do not attempt to revoke any explicit admission made by one party that grants the other side a right; and (c) the amendment does not create a time constraint. Allowing a prayer for amendment is generally mandatory, with the following exceptions: (i) the amendment seeks to introduce a time-barred claim, in which case the fact that the claim would be time-barred becomes a relevant factor for consideration; (ii) the amendment modifies the nature of the lawsuit; (iii) the prayer for amendment is malicious; or (iv) the amendment results in the other party relinquishing a valid defense. (v) When considering a motion for amendment of pleadings, the court should refrain from adopting an excessively technical stance and is generally expected to be lenient, particularly in cases where the opposing party may be entitled to costs as compensation. The court ought to grant the amendment request if it would facilitate a more precise examination of the dispute and contribute to the rendering of a more satisfactory decision. In cases where the amendment simply aims to propose a novel or supplementary approach without creating a cause of action that has passed its expiration date, the amendment may still be permitted, even after the statute of limitations has expired.
When the purpose of the amendment is to address the lack of significant details in the complaint, it may be permissible to consider the request. Merely a delay in submitting the amendment application does not justify rejecting the petition. In cases where the delay aspect is debatable, the amendment request may be granted and the issue of limitation may be presented separately for resolution. In situations where an amendment substantially alters the cause of action or the character of the lawsuit, thereby establishing a completely separate case unrelated to the one stated in the complaint, that amendment must be rejected. In cases where the amendment requested solely pertains to the relief specified in the plaint and is based on facts that have already been alleged in the plaint, it is customary for the amendment to be granted. In cases where an amendment is requested prior to the initiation of the trial, the court is obligated to adopt a lenient stance. It is incumbent upon the court to consider the opportunity that the opposing party would have to present the case as amended. Therefore, an amendment is permissible so long as it does not cause the opposing party irreparable harm or deprive it of an advantage it had obtained through an admission by the party pursuing the amendment. Likewise, in cases where the amendment is essential for the court to efficiently resolve the central issues in dispute between the parties, it ought to be permitted.
