P.V. Atchuthan vs The Balussery Benefit Chit Fund (Pvt.) Ltd. and Another

Prabha Sridevan, J.—The defendant is the petitioner. The respondent-chit fund is the plaintiff in the suit O.S. No. 1505 of 1996 for the

recovery of a sum of Rs. 3,38,200 together with interest at the rate of 24% per annum against the petitioner''s mother and the second respondent

herein who is the brother of the petitioner. During the pendency of the suit, the petitioner''s mother died and the suit is proceeded against the

petitioner and his brother viz., the second respondent. The petitioner resisted the suit claim on the ground that it was not a simple borrowal of

money but a chit amount and the same was utilized by the plaintiff for the benefit of another concern and that as a Director he had executed several

documents in blank in favour of the respondent which had been misused by them.

In the course of the trial, P.W.1, the director-in-charge of the respondent-company had referred to the entries contained in the ledger account

which was marked as Ex.A-2, wherein it was shown that the suit amount had been transferred into the chit fund account of the defendant. It was

elicited in the evidence of P.W.1, that the respondent-company had not obtained any permission or sanction from the competent authorities for

money lending business. Thereupon the petitioner filed I.A. No. 5588 of 1999 for amendment of the written statement by adding one paragraph to

the effect that once under Ex.A-2, the entries show that the suit amount had been transferred into the chit fund account, the respondent/plaintiff is

not entitled to file any suit for the alleged amount and the courts jurisdiction would also be ousted since the entire matter would be covered by the

provisions of the Chit Funds Act. The amendment, also included an averment that in view of the fact that no permission or sanction had been

obtained by the respondent-chit fund company in accordance with law, the suit claim was completely barred and prohibited. This application was

dismissed by the court below on the ground that the amendment was more with regard to legal aspects, that they could also be advanced at the

time of arguments and an amendment was not necessary.

Learned Counsel for the petitioner urged that the amendment had to be allowed and that normally courts are liberal in permitting the parties to

amend the pleadings. Learned Counsel for the respondent submitted that the petitioner cannot be allowed to amend the written statement on the

basis of the admissions made by the respondent''s witnesses.

Courts have been liberal in allowing parties to amend their pleadings except when such amendment will prejudice the other party or deprive

them of any right that had accrued to them. In fact, Order 6, Rule 17 of CPC gives wide latitude to the party who approaches the court for

amendment of the pleadings. The words used are ""at any stage of the proceedings"". A perusal of the written statement also shows that at para.9,

the petitioner had stated as follows:

This defendant further states that unless the account books and other connected papers of the plaintiff firm as well as Balussery Polymers Pvt. Ltd.

are produced before this Honourable Court, a clear picture will not be brought to note."" This amendment has been sought for after a perusal of the

account ledger, which shows the transfer of suit amount from one account to the other. No doubt the counsel for the respondent submits that

nothing turns on this and this is the normal practice. But, if as urged by the learned Counsel for the petitioner, he is able to demonstrate that the

transfer was a unilateral transfer not in accordance with law or that the transfer into the chit fund account would oust the jurisdiction of this Court,

that would be an amendment which is necessary to determine the real controversy between the parties. Allowing the amendment would, in no way

prejudice the respondent and except to state that there is a gross delay and laches, nothing is advanced either in the counter or in the arguments to

show how the respondents would be prejudiced by the amendment.

I therefore set aside the order of the court below. The civil revision petition is allowed. No costs. Consequently, the C.M.P. No. 14416 of

1998 is closed.