Gadampetti Subbiah Setti vs Chaluvadi Ramayya Setti and Others

Chandra Reddi, J.—The plaintiffs in O.S. No. 117 of 1946 on the file of the Subordinate Judge, Nellore, have filed this petition to revise an

order of the Subordinate fudge refusing them permission to amend the plaint. The petitioners herein who are the general body of creditors of one

Chalavadai Narasimham and Kotaiah who were adjudged insolvents in I.P. No. 23 of 1933 on the file of that Court filed a suit for declaration that

the suit properties belonged to the insolvents and the sale deed executed by them in favour of the first respondent herein conveying the suit house

to them are not bona fide transactions having been executed with a view to defeat and delay the creditors. The circumstances culminating in the

filing of the present suit may be shortly stated :

The two insolvents executed two sale deeds in favour of the first respondent herein on 4th October, 1931 and another on 17th August, 1932,

prior to their adjudication conveying their interest completely in the suit property under these three documents. There -was a crop of litigation

between these respondents on the one hand and either the Official Receiver or the general body of creditors on the other relating to this property

and ultimately the petitioners herein filed an application u/s 54-A of the Provincial Insolvency Act for permission to take proceedings to avoid the

alienations wherein reference was made to the three sale deeds executed by the insolvents in favour of the present respondents. The permission

applied for was granted.

In pursuance of that permission the petitioners applied u/s 4 of the Provincial Insolvency Act for a declaration that the suit house continued to be

the property of the insolvents and that the two sale deeds executed on 4th October, 1931, were not binding on the general body of creditors as

they were brought into existence with the object of defeating and delaying the creditors on the eve of their insolvency. Admittedly there was no

reference to the sale-deed, dated 17th August, 1932.

This application was opposed by the respondents herein on the ground that It raised several complicated questions relating to limitation and the

maintainability of this application, etc., and therefore ought not to be gone into in summary proceedings u/s 4 of the Provincial Insolvency Act. That

objection prevailed with the Court and it declined to inquire into the matter. In the result it dismissed the petition u/s 4 referring the parties to a suit.

Thereupon, the petitioners herein filed a suit for the reliefs mentioned above, stating the cause of action for the suit to be the date of the two sale

deeds, viz., 4th October, 1931. This suit was opposed by the present respondents inter alia on the ground that even assuming that the averments

made in the plaint were true, it would not affect their right, title and interest in the moiety of the house which was conveyed to them under a

separate sale-deed on 17th August, 1932 and the suit should be dismissed so far as one half of the house was concerned.

This has led the petitioners to seek the amendment of the plaint by adding the necessary allegations with reference to the sale-deed, dated 17th

August, 1932, which was alleged to have been omitted by oversight. This application was resisted by the defendants on the grounds that the suit

being the outcome of the leave granted to the petitioners in respect of the two sale-deeds they should not be permitted to enlarge the scope of the

leave thus obtained by them and secondly it would result in defeating the right of limitation that has accrued to the first respondent. These pleas

found favour with the trial Court with the result that the petition for amendment was dismissed with costs. Hence this Civil Revision Petition.

In this petition it is maintained by Mr. Ramachandra Rao, the learned Counsel for the petitioners, that the amendment was necessary in order to

obtain an adjudication on all the issues in controversy and this would in no way prejudicially affect the respondents herein. On behalf of the

respondents the contentions put forward in the lower Court were repeated. I think I must accept the argument advanced by the counsel for the

petitioners. I am not able to agree with the trial Court that this amendment would enlarge the scope of the suit for the reason that the prayer asked

for in this suit is a declaration that the properties continued to be properties of the insolvents and the title thereto does not vest in the respondents

and this is not in any way altered or its scope enlarged by the amendment. What is sought by way of amendment is to add to the cause of action

for the suit. The result of permitting this amendment would be to enable the plaintiffs to attack the genuineness of the transaction evidenced by the

third sale deed. It is not an inflexible rule of law that all amendments that would result in adding a further cause of action to the suit should be

refused. If the amendment is necessary in the interests of justice to get an adjudication on all the issues in controversy, or to avoid multiplicity of

proceedings, it should be granted, provided it does not change the fundamental character of the suit.

No doubt it is in the discretion of the trial Court to allow or not to allow an amendment of the pleadings and this Court will not interfere

ordinarily with an exercise of a sound discretion. But when the exercise of that discretion results in an improper refusal of an amendment, it is the

duty of this Court to set it right. It looks to me in this case that the petitioner should be permitted to amend the plaint in order to avoid the

multiplicity of proceedings. I therefore set aside the order of the trial Court with a direction that the petitioners must be permitted to carry out the

amendment. The respondents herein will have liberty to file an additional written statement raising such further pleas as are open to them. The

petition is therefore allowed. The order as to the costs will stand and the petitioner will pay the costs of the first respondent, in this Court also,

which I fix at Rs. 50 as it is want of due diligence on their part that necessitated the present application for amendment.