AI Structured Summary
Not yet generated for this judgment
Judgment
Per: Justice Pradeep Mittal
By way of the present petition, the petitioner has challenged the legality and correctness of the order dated 12.12.2024 passed by the learned 8th District Judge, Commercial Court, Bhopal in COMMS No.25/2023, whereby the application filed by the petitioner under Order VI Rule 17 of the Code of Civil Procedure, 1908 seeking amendment of the plaint has been rejected.
The petitioner company, namely Hanumant Sugar Private Limited, is engaged in the business of production of molasses and manufacturing of sugar. The petitioner had obtained an insurance policy bearing No. 5840619-02 from the respondents for the period from 28.02.2019 to 27.02.2020 with a sum assured of Rs. 41,50,00,000/-. On 29.03.2019, due to a chemical reaction in the molasses tank, a portion of the bottom of the tank burst, resulting in the outflow of approximately 3200 tons of molasses, causing substantial loss to the petitioner company and damage to the surrounding areas of the factory premises.
The petitioner immediately informed the respondent insurance company and surveyors inspected the site on several occasions. However, the surveyor attributed the incident to alleged construction defects and patch repairs in the tank and opined that the loss was not covered under the policy. The petitioner alleged that the claim assessment was delayed and conducted in violation of the provisions of the IRDAI (Protection of Policyholders’ Interests) Regulations, 2017, as the claim was not settled within the prescribed time and was ultimately rejected on erroneous grounds.
Aggrieved by the rejection of the claim, the petitioner filed COMMS No. 25/2023 before the Commercial Court at Bhopal seeking compensation under the insurance policy. During the course of preparation of evidence, it was noticed that certain necessary pleadings relating to the disputed insurance policy and insured instrument had inadvertently not been incorporated in the plaint. Consequently, the petitioner filed an application under Order VI Rule 17 of the Code of Civil Procedure, 1908 seeking amendment of the plaint.
The respondents opposed the said application. However, the learned 8th District Judge, Commercial Court, Bhopal, by order dated 12.12.2024, rejected the petitioner’s application on the ground that the matter had already been fixed for plaintiff’s evidence and therefore the trial had commenced.
Learned counsel for the petitioner submits that the impugned order is illegal and contrary to the settled principles governing amendment of pleadings under Order VI Rule 17 of the Code of Civil Procedure, 1908. It is contended that the proposed amendment is merely clarificatory in nature and relates to the insurance policy and the insured instrument forming the basis of the suit. It is further submitted that the amendment neither alters the nature of the suit nor introduces a new cause of action and therefore ought to have been allowed. It is further contended that the matter was only at the stage of plaintiff’s evidence and the witnesses had not yet been examined or subjected to cross-examination. Hence, no prejudice would have been caused to the defendants if the amendment had been permitted.
Heard learned counsel for the parties and perused the record.
The controversy involved in the present petition relates to the rejection of the petitioner’s application filed under Order VI Rule 17 of the Code of Civil Procedure, 1908 seeking amendment of the plaint. At this stage, it is relevant to refer to Section 16 of the Commercial Courts Act, 2015.
“16. Amendments to the Code of Civil Procedure, 1908 in its application
to commercial disputes.—(1) The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall, in their application to any suit in respect of a commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedule.
(2)The Commercial Division and Commercial Court shall follow the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, in the trial of a suit in respect of a commercial dispute of a Specified Value.
(3)Where any provision of any Rule of the jurisdictional High Court or any amendment to the Code of Civil Procedure, 1908 (5 of 1908), by the State Government is in conflict with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, the provisions of the Code of Civil Procedure as amended by this Act shall prevail.’’
An amendment in pleading before a commercial court is maintainable before the commencement of trial. Under Order VI Rule 17 of the Code of Civil Procedure (CPC), 1908, as applicable to commercial disputes under the Commercial Courts Act, 2015, amendments can be allowed at any stage of the proceedings. However, strict limitations apply once the trial commences.
According to the proviso to Order VI Rule 17, no application for amendment shall be allowed after the trial has commenced, unless the party can satisfy the court that in spite of "due diligence," the matter could not have been raised earlier. In commercial disputes, the trial is typically deemed to commence when the affidavit of evidence is filed or tendered, not merely when issues are framed. Under the Commercial Courts Act, 2015, if a pleading is amended, the amendment must be verified by an affidavit. There are some conditions when amendment may be refused even before evidence commences: if it completely alters the fundamental character of the suit or introduces a totally new cause of action that is already barred by limitation.
In the present case, the Trial Court rejected the amendment application mainly on the ground that the matter had already been fixed for plaintiff’s evidence and therefore the trial had commenced. However, the mere listing of the matter for plaintiff’s evidence cannot by itself be treated as commencement of trial in the strict legal sense. The stage of trial is generally understood to begin when evidence is actually tendered by way of affidavit under Order XVIII Rule 4 CPC and witnesses are subjected to examination.
The Hon'ble Supreme Court of India in case titled as Baldev Singh & Ors. Vs Manohar Singh & Anr 2006(2) RCR 265 law enunciated for amendment of pleadings by Supreme Court is summed up as:-
"1.Courts should be extremely liberal in granting the prayer for amendment of pleadings unless serious injustice or irreparable loss is caused to the other side.
2.Wide power and unfettered discretion has been conferred on the Court to allow amendment of the pleadings to a party in such manner and no such terms as it appears to the court just and proper.
3.Court shall allow amendment of pleadings if it finds that delay in disposal of suit can be avoided and that the suit can be disposed of expeditiously.
4.Plea of limitation can be allowed to be raised by way of amendment in written statement.
5.Powers of the Court are wide enough to permit amendment of the written statement by incorporating an alternative plea of ownership in the application for amendment of the written statement.
6.Even there were some admissions in the evidence as well as in the written statement it was still open to the parties to explain the same by way of filing an application for amendment of the written statement.
7.Be a ground for rejection of the same when no serious prejudice is shown to have been caused to the plaintiff.
8.An amendment of a plaint.
9.Courts are inclined to be more liberal in allowing amendment of written statement than of plaint and question of prejudice is less likely to operate with same rigour in the former than in the latter case.
10.Inconsistent pleas can be raised by defendants in the written statement although the same may not be permissible in the case of plaint."
In the present case, the amendment sought by the petitioner appears to be clarificatory in nature and relates to the insurance policy and the insured instrument which constitute the foundation of the suit. The proposed amendment neither alters the nature of the suit nor introduces a new cause of action. Moreover, the plaintiff had not yet been subjected to cross-examination and therefore no serious prejudice would be caused to the defendants if the amendment is permitted.
In view of the aforesaid legal position and the facts of the case, this Court is of the considered opinion that the learned Trial Court adopted an unduly technical approach in rejecting the amendment application and failed to exercise the jurisdiction vested under Order VI Rule 17 CPC in its proper perspective.
Accordingly, the impugned order dated 12.12.2024 passed by the learned Commercial Court is set aside and the application filed by the petitioner under Order VI Rule 17 CPC is allowed.