New Bank of India vs Bhupinder Singh and Others

M.S. Liberhan, J.—The petitioner brought a suit for recovery from the defendants by sale of the mortgaged property. During trial, the petitioner sought amendment of its plaint to substitute paragraph 11 of the plaint by averring that "Shri Bhupinder Singh, Parkash Kaur, Japinder Pal Singh and Japinder Pal Kaur were big land owners and, in order to avoid the ceiling laws of the Punjab State, they made the following benami and fictitious transfers in favour of their nominees through collusive civil court decrees." Then, various decrees were referred to with reference to the dates of passing of such decrees. All these decrees relate to the year 1972. It was further averred that the transfers were in the names of nominees of Bhupinder Singh, Parkash Kaur, Japinder Pal Singh and Japinder Pal Kaur in order to avoid the ceiling laws. They were paper transactions and were never acted upon, rather Bhupinder Singh, etc., remained in possession of the land. These transfers were non-existent and have got no bearing on the rights of the plaintiff. The defendant mortgaged the lands treating these transfers as non-existent, rather the lands were already under mortgage, vide the deed dated June 21, 1971. The defendant, in order to defraud the plaintiff, got made further transfers from the nominees in favour of defendants Nos. 4 to 16. It was claimed in the proposed amended plaint that the plaintiff is not bound by the said transfers and the transfers in their favour are null and void and have got no effect on the rights of the plaintiff.

The plaintiff further prayed to implead the transferees as defendants, inter alia, contending that the transfers made are fictitious and benami in favour of the persons sought to be impleaded as parties.

The trial court declined the amendment, inter alia, on the ground that 14 years have passed after the passing of the decrees in favour of the predecessor-in-interest of the defendants sought to be added. An amendment was sought on June 12, 1986, and, apparently, the limitation for a suit for declaration of the decrees being bad has already expired. In this regard, it was observed that the persons having purchased the land, a valuable right of ownership vested in them as far back as in July, 1972, and the court decrees having not been challenged even how, the suit would be apparently barred by time. The loans, of the mortgage created, relate to the period July, 1974, onwards. Seeking a declaration that the transfers effected in favour of the defendants and the persons sought to be added as defendants were mala fide and illegal and not binding on the petitioner would be a new cause of action. Thus, the amendment was declined.

Learned counsel for the petitioner argued that the question of limitation could be determined only if raised by the parties added. The question of bona fide non-entry of their ownership in the revenue record cannot be decided at this stage. It was urged that time can be extended u/s 21 of the Indian Limitation Act, 1963, and the suit would be deemed to have been filed against the added defendants from the date of filing of the suit. Learned counsel for the petitioner relied upon Rambuddi Veeraswamy Vs. Rambuddi Jangammayya and Others, , and Rukumanand Bairoliya Vs. The State of Bihar, .

Learned counsel for the respondents refuted the submissions and contended that the proposed defendants are bona fide purchasers for valuable consideration. The suit against them would be deemed to have begun only on the service of the summons subject of course to Section 21 of the Indian Limitation Act. There is no gainsaying that, if time is not extended u/s 21 of the said Act, the suit would be barred by limitation against the respondents proposed to be added as defendants. The proposed defendants are strangers who have purchased the land in dispute for a valuable consideration from their predecessor who have further acquired right, title and interest in the property in dispute through court decrees as far back as in 1972.

In my view, the proposed amendment will change the nature of the suit from a suit for recovery from the mortgaged or hypothecated property to a suit for declaration of title of the mortgagor or the persons to whom it was transferred who further transferred it to the proposed defendants. It is not disputed that no amendment can be allowed after the expiry of limitation for enforcing a cause of action. Apparently, the suit against the defendants proposed to be added would be barred by time.

The judgments cited by learned counsel for the petitioner have neither any parity on facts nor on law with the case in hand. So far as Rambuddi Veeraswamy Vs. Rambuddi Jangammayya and Others, , is concerned, the only principle laid down therein is that, before a person is impleaded as a party, he must have a direct interest in the suit property. There is no privity of contract between the purchasers and the defendants through the decrees relating to the year 1972 as well as the subsequent vendees with the bank. To a similar effect is the observation made in Mahendranarayan Roy Choudhury Vs. Abdul Gafur Chowdhury and Others, .

The question whether the bank has been defrauded or it bona fide believed the certificate of an advocate that title to the property in dispute vested in the mortgagor can neither be determined in the application for amendment nor in the suit ; otherwise also, as has been observed in Takhat Singh Vs. Prem Chand and Another, , that a person not being a party to a transfer deed has no locus standi to raise the plea that the person in whose favour the transfer deed is got executed is a benamidar. Thus, so far as the substitution of paragraph 11 by the proposed amendment is concerned, the same cannot be allowed after the expiry of limitation particularly when the suit would have been barred by time on the proposed added averments. Even the suit for declaration of title of the defendants would have been barred by time. I, therefore, find no ground to interfere with the impugned order, declining the proposed amendment.

So far as the application of Section 21 of the Limitation Act is concerned, it provides that, against a newly added plaintiff or defendant, a suit shall be deemed to have been instituted when he was so made a party. A discretion has been vested in the courts that, where the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith, it may direct that the suit as regards such added plaintiff or defendant shall be deemed to have been instituted on any earlier date. Nothing has been pointed out that the omission to include the proposed defendants was due to a mistake made in good faith. There is not even an averment in the application for amendment to that effect much less pointing out the omission to be in good faith. The provision of Section 21 of the Act, being one depriving a person of his right having accrued by efflux of time, has to be strictly construed. In view of the undisputed facts stated above, there is nothing on record to show that a mistake has occurred on account of good faith. Admittedly, the properties were hypothecated in Delhi. The defendants proposed to be added or the persons to whom the properties were transferred were never privy to the hypothecation bf the properties to the bank. The bank has got no direct interest in the title of the property. There is no dispute with the law laid down in the judgments cited but, in view of the amendment having been sought after the expiry of limitation and title being claimed against bona fide purchasers and the transactions being claimed to be fictitious and benami, the objections being raised by a third person with respect to the benami nature of the transaction, the amendment cannot be allowed.

No error of jurisdiction has been pointed out in the impugned order.

For the reasons recorded above, I find no force in the revision petition. The same is hereby dismissed with no order as to costs.