VARUN PAHWA versus MRS. RENU CHAUDHARY on 1 March 2019

[2019] 4 S.C.R. 128

SUPREME COURT REPORTS

[2019] 4 S.C.R.

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VARUN PAHWA

v.

MRS. RENU CHAUDHARY

(Civil Appeal No. 2431 of 2019)

BMARCH 01, 2019

[DR. DHANANJAYA Y CHANDRACHUD ANDHEMANT GUPTA, JJ.]

Code of Civil Procedure, 1908 – O. VI, r.17 – Amendment ofpleadings – Appellant-plaintiff as director of a company filed a suitCfor recovery of Rs.25,00,000/- – Thereafter, plaintiff filed anapplication for amendment of the plaint on the ground that thecounsel had inadvertently made the title of the suit wrongly as theloan was advanced through the Company, therefore, the suit was tobe in the name of the Company – Trial Court declined theDamendment – High Court affirmed the order of the trial court – Onappeal, held: The plaint was not properly drafted in as much as inthe memo of parties, the plaintiff was described as ‘VP’ throughdirector of the Company though it should have been Companythrough its director ‘VP’ – It was inadvertent mistake on the part ofthe counsel who drafted the plaint – Such inadvertent mistake couldEnot be refused to be corrected when mistake was apparent from thereading of the plaint – Therefore, the order declining to correct thememo of parties not justified in law – Consequently, orders passedby the trial Court and the High Court set aside.

Allowing the appeal, the Court

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HELD: 1. The plaint is not properly drafted in as much asin the memo of parties, the Plaintiff is described as ‘VP’ throughDirector of SG Pvt. Ltd. though it should have been SG Pvt. Ltd.through its Director ‘VP’. Thus, it is a case of mistake of thecounsel, may be on account of lack of understanding as to how aGPrivate Limited Company is to sue in a suit for recovery of theamount advanced. [Para 8][131-B, C]

2. The memo of parties is thus clearly inadvertent mistakeon the part of the counsel who drafted the plaint. Such inadvertentmistake cannot be refused to be corrected when the mistake isHapparent from the reading of the plaint. The Rules of Procedure

are handmaid of justice and cannot defeat the substantive rightsof the parties. It is well settled that amendment in the pleadingscannot be refused merely because of some mistake, negligence,inadvertence or even infraction of the Rules of Procedure. TheCourt always gives leave to amend the pleadings even if a partyis negligent or careless as the power to grant amendment of thepleadings is intended to serve the ends of justice and is notgoverned by any such narrow or technical limitations. [Para 9][131-C-E]

3. Thus, this Court finds that it was an inadvertent mistakein the plaint which trial court should have allowed to be correctedso as to permit the Private Limited Company to sue as Plaintiffas the original Plaintiff has filed suit as Director of the said PrivateLimited Company. Therefore, the order declining to correct thememo of parties cannot be said to be justified in law. [Para 11]

[133-G,H]

State of Maharashtra v. Hindustan ConstructionCompany Limited (2010) 4 SCC 518 : [2010] 4 SCR 46;Uday Shankar Triyar v. Ram Kalewar Prasad Singhand Another (2006) 1 SCC 75 : [2005] 5 Suppl.

SCR 157 – relied on.

Case Law Reference

[2010] 4 SCR 46relied onPara 9[2005] 5 Suppl. SCR 157relied onPara 10

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2431of 2019.

From the Judgment and Order dated 20.08.2018 of the High Courtof Delhi at New Delhi in CM(M) No. 958 of 2018.

Avinash Kr. Lakhanpal, Adv. for the Appellant.

The Judgment of the Court was delivered by HEMANT GUPTA, J. 1. Leave granted.

2. The Order dated 20.08.2018 passed by the High Court of Delhiis subject matter of challenge in the present appeal. By the aforesaidorder, a petition against an order passed by the learned trial court on23.01.2018 seeking permission to amend the plaint was dismissed.

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A3. The appellant as Director of Siddharth Garments Pvt. Ltd. fileda suit for recovery of Rs. 25,00,000/- along with pendente lite and futureinterest on or about 28.05.2016. The Plaintiff has claimed the said amountadvanced as loan of Rs. 25,00,000/- remitted to the defendant throughRTGS on 16.06.2013 on HDFC Bank, Delhi. It is also averred that Plaintiffhas given Special Power of Attorney to Shri Navneet Gupta and that aBcopy of the Power of Attorney is enclosed.

4. The defendant raised one of the preliminary objections in thewritten statement that suit has not been filed by the Plaintiff and eventhe alleged authorised representative has not filed any document showingthat he has been authorised by the above-named Plaintiff. The SpecialCPower of Attorney is neither valid nor admissible.

5. It was on 29.11.2016, Navneet Gupta appeared in Court aspower of attorney of the Plaintiff to examine himself as PW1. It was atthat stage; an order was passed by the learned trial court to furnishaddress of the Plaintiff and why the Plaintiff should be examined throughDan attorney when the Plaintiff is a resident of Delhi. It is thereafter, theappellant filed an application for amendment of the plaint on the groundthat the counsel had inadvertently made the title of the suit wrongly asthe loan was advanced through the Company, therefore, the suit was tobe in the name of the Company. Therefore, the Plaintiff sought tosubstitute para 1 and para 2 of the plaint with the following paras whichEread as under:- “1. That the Plaintiff is a Private Limited Company having itsregistered office at: I-VA (property bearing No. XII), JawaharNagar, Delhi

2. That the present plaint is filed through the authorisedFrepresentative of the Plaintiff namely Sh. Navneet Gupta, R/o.322, Kohat Enclave, Pitam Pura, Delhi who has been authorisedvide board resolution dated 12.05.2016 to sign, verify and executeall documents, papers, complaints, applications, plaint, writtenstatement, Counter claim, affidavits, replies revisions, etc. and toGinstitute, pursue and depose in all legal proceedings and court caseson behalf of Siddharth Garments Pvt. Ltd against Mrs. RenuChaudhary who was given the loan of Rs. 25 Lakhs.”

6. The trial court declined the amendment on the ground that theapplication is an attempt to convert the suit filed by a private individualinto a suit filed by a Private Limited Company which is not permissibleH

as it completely changes the nature of the suit. It is the said order whichwas not interfered with by the High Court.

7. We have heard learned counsel for the appellant as none hadappeared on behalf of the respondent.

8. The plaint is not properly drafted in as much as in the memo ofparties, the Plaintiff is described as Varun Pahwa through Director ofSiddharth Garments Pvt. Ltd. though it should have been SiddharthGarments Pvt. Ltd. through its Director Varun Pahwa. Thus, it is a caseof mistake of the counsel, may be on account of lack of understandingas to how a Private Limited Company is to sue in a suit for recovery ofthe amount advanced.

9. The memo of parties is thus clearly inadvertent mistake on thepart of the counsel who drafted the plaint. Such inadvertent mistakecannot be refused to be corrected when the mistake is apparent fromthe reading of the plaint. The Rules of Procedure are handmaid of justiceand cannot defeat the substantive rights of the parties. It is well settledthat amendment in the pleadings cannot be refused merelybecause of some mistake, negligence, inadvertence or eveninfraction of the Rules of Procedure. The Court always gives leave toamend the pleadings even if a party is negligent or careless as the powerto grant amendment of the pleadings is intended to serve the ends ofjustice and is not governed by any such narrow or technical limitations.In State of Maharashtravs.Hindustan Construction CompanyLimited[1], this Court held as under:- “17. Insofar as the Code of Civil Procedure, 1908 (for short“CPC”) is concerned, Order 6 Rule 17 provides for amendmentof pleadings. It says that the court may at any stage of theproceedings allow either party to alter or amend his pleadings insuch manner and on such terms as may be just, and all suchamendments shall be made as may be necessary for the purpose ofdetermining the real questions in controversy between the parties.

18. The matters relating to amendment of pleadings have comeup for consideration before the courts from time to time. As farback as in 1884 in Clarapede & Co. v. Commercial UnionAssn.[2] - an appeal that came up before the Court of Appeal, BrettM.R. stated:

1 (2010) 4 SCC 518 2 (1883) 32 WR 262 (CA)

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“... The rule of conduct of the court in such a case is that,however negligent or careless may have been the firstomission, and, however late the proposed amendment,the amendment should be allowed if it can be made withoutinjustice to the other side. There is no injustice if the other sidecan be compensated by costs; but, if the amendment will putthem into such a position that they must be injured, it ought notto be made….”

19. In Charan Das v. Amir Khan[3] the Privy Council expositedthe legal position that although power of a Court to amend theplaint in a suit should not as a rule be exercised where the effectis to take away from the defendant a legal right which has accruedto him by lapse of time, yet there are cases in which thatconsideration is outweighed by the special circumstances of thecase.

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22. In Jai Jai Ram Manohar Lal[4] this Court was concerned witha matter wherein amendment in the plaint was refused on theground that the amendment could not take effectretrospectively and on the date of the amendment the action wasbarred by the law of limitation. It was held: (SCC p.871, para 5)

“5. …. Rules of procedure are intended to be a handmaid tothe administration of justice. A party cannot be refused justrelief merely because of some mistake, negligence, inadvertenceor even infraction of the Rules of procedure. The court alwaysgives leave to amend the pleading of a party, unless it is satisfiedthat the party applying was acting mala fide, or that by hisblunder, he had caused injury to his opponent which may notbe compensated for by an order of costs. However negligentor careless may have been the first omission, and, howeverlate the proposed amendment, the amendment may be allowedif it can be made without injustice to the other side.”

This Court further stated (Jai Jai Ram Manohar Lal case, SCCp.873, para 7):

3 (1919-20) 47 IA 255

4 (1969) 1 SCC 869

“7. ...The power to grant amendment of the pleadings isintended to serve the ends of justice and is not governed byany such narrow or technical limitations.”

10. In Uday Shankar Triyar v. Ram Kalewar Prasad Singhand Another[5], this Court held thatprocedural defects and irregularitieswhich are curable should not be allowed to defeat substantive rights orto cause injustice. Procedure should never be made a tool to deny justiceor perpetuate injustice by any oppressive or punitive use. The Court heldas under:- “17. Non-compliance with any procedural requirement relatingto a pleading, memorandum of appeal or application or petition forrelief should not entail automatic dismissal or rejection, unless therelevant statute or rule so mandates. Procedural defects andirregularities which are curable should not be allowed to defeatsubstantive rights or to cause injustice. Procedure, a handmaidento justice, should never be made a tool to deny justice or perpetuateinjustice, by any oppressive or punitive use. The well-recognisedexceptions to this principle are:

(i) where the statute prescribing the procedure, also prescribesspecifically the consequence of non-compliance;

(ii) where the procedural defect is not rectified, even after it ispointed out and due opportunity is given for rectifying it;

(iii) where the non-compliance or violation is proved to bedeliberate or mischievous;

(iv) where the rectification of defect would affect the case onmerits or will affect the jurisdiction of the court;

(v) in case of memorandum of appeal, there is complete absenceof authority and the appeal is presented without the knowledge,consent and authority of the appellant.”

11. Thus, we find that it was an inadvertent mistake in the plaintwhich trial court should have allowed to be corrected so as to permit thePrivate Limited Company to sue as Plaintiff as the original Plaintiff hasfiled suit as Director of the said Private Limited Company. Therefore,the order declining to correct the memo of parties cannot be said to bejustified in law.

5 (2006) 1 SCC 75

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134SUPREME COURT REPORTS

[2019] 4 S.C.R.

A12. Consequently, the orders passed by the High Court dated20.08.2018 and by the trial court on 23.01.2018 are set-aside and theapplication filed by the Plaintiff to amend the plaint is allowed with noorder as to costs.

The appeal is allowed.

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Ankit Gyan

Appeal allowed.

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