S.MALLA REDDY vs. M/S FUTURE BUILDERS CO-OP.STY. .

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3915 OF 2013 [Arising out of SLP (C) No.28828 of 2008] JUDGMENT Raghava Reddy & Anr. … Appellant(s) vs. M/s Future Builders Co-operative Housing Society & Ors. … Respondent(s) J U D G M E N T M.Y. EQBAL, J. Page 1 2 Leave granted. 2. The defendants (appellants herein) have assailed the common order dated 28.12.2007 passed by a learned Judge of the

Article 227 of the Constitution of India have been allowed and the order passed by the trial court allowing amendment in the written statement has been set aside. 3. The facts of the case lie in a narrow compass. 4. The plaintiff-respondent M/s. Future Builders Co-op. Housing Society (in short “the plaintiff Society”) filed a suit against the defendant-appellants for declaration of title in respect of the property mentioned in the schedule of the plaint (in short “the suit property”) and for perpetual injunction restraining the defendants from interfering with possession. The case of the plaintiff-Society is that the Society is a registered Society under the Andhra Pradesh Co- JUDGMENT operative Societies Act with the object to acquire or purchase land for the benefit of its members and render it fit for habitation. The Society was founded by several promoters including the first defendant-S. Malla Reddy (appellant herein). The plaintiff’s further case is that for the purpose of registration under Co-operative Societies Act, it was necessary to show to the Registrar that they have entered into an agreement for purchase of land for the benefit of its members. It was Page 2 3 alleged that before the Society was registered, its promoters identified the suit land as fit for the purpose and negotiated with the owner and entrusted the work to the first defendant for effecting purchase after

favour of the Chief Promoter of the Society, inter alia, agreeing that the first defendant will get the land measured and obtain legal opinion and pay the money to the land owner. It was agreed that the sale deed would be obtained in the name of the first defendant and a patta would be got transferred in his name or of his nominee for the benefit of the Society. The Society was registered on 28.08.1981 and defendant No.1 having obtained a Sale Deed dated 02.01.1979 and transfer of patta in the name of himself and defendant Nos. 2 to 4 (appellants herein), who are his wife and sons in respect of the suit property, had delivered possession to the Society and they further agreed to secure the patta in the name of the plaintiff-Society. A JUDGMENT Memorandum of Agreement dated 16.09.1981 was also executed to the effect that the plaintiff would hold the land as owner. It was alleged by the plaintiff-Society that the defendants, in spite of several requests and demands, were postponing the transfer of patta in respect of the suit property in its name on one pretext or the other. Hence, suit. Page 3 4 5. On being summoned, the defendants appeared and filed a joint written statement on 19.01.1995 admitting the claim of the plaintiff stating that after filing of the suit there was a mediation

patta in respect of the suit property in favour of the plaintiff who had already acquired title. The defendants, therefore, prayed to the court to decree the suit. 6. Controversy started when the defendants after filing of the written statement and admitting the claim of the plaintiff filed a petition being I.A. No.2217 of 1995, later renumbered as I.A. No.162 of 2000, seeking permission to change their advocates on the ground that they were acting detrimental to their interest by filing written statement contrary to the instructions. The said petition was objected by the plaintiff. The trial court by order dated 07.02.2000 permitted the defendants to change their advocates without prejudice to the JUDGMENT rights of the parties. Thereafter, defendants filed another petition under Order VI Rule 16 of the Code of Civil Procedure (CPC) being I.A. No.415 of 2000 on 28.02.2000 seeking leave of the court to strike out the pleadings in the written statement or to expunge the written statement and to permit them to file a detailed written statement. It was alleged that the written statement filed earlier was in collusion with the plaintiff contrary to the instructions given by them to their Page 4 5 advocate. Another petition was filed by the defendants being I.A. No.416 of 2000 under Order VIII Rule 9 and Order VI Rule 5 of CPC seeking leave of the court to permit them to file a detailed written

petition being l.A. 1819 of 2000 seeking leave of the court to implead him as party to those two interlocutory petitions which was, however, allowed and the said son was brought on record. 7. The trial court after hearing the parties dismissed both the petitions being I.A. Nos.415 and 416 of 2000 by common order dated 04.01.2002. The defendant- appellants challenged the said order by filing Civil Revisions in the High Court being CRP Nos.502 and 505 which were ultimately dismissed on 18.09.2002. The defendant- appellants then filed review petition being Review CMP No. 2102 of 2003 which was also dismissed on 25.06.2003. The defendants then preferred appeals to this Court in Civil Appeal Nos. 7940 to 7942 of JUDGMENT 2004 which were also dismissed on 15.03.2007. 8. After the defendants lost the claim upto this Court and their prayer was refused, a fresh petition under Order VI Rule 17 CPC was filed seeking leave of the Court to amend the written statement. The said application was registered as I.A. SR No. 593 of 2007. The trial court rejected the said application by a non-speaking order. The order was challenged in the High Court in Revision which was disposed Page 5 6 of with the directions to the trial court to register the application and dispose of the same by passing a reasoned order. The trial court in compliance of the aforesaid directions finally heard the amendment

9. The plaintiff-Society challenged the aforesaid order allowing amendment of the written statement by filing revision petitions before the High Court. The said revision petitions filed by the plaintiff-Society under Article 227 were heard at length and finally those petitions were allowed by the High Court vide order dated 28.12.2007 and the order of the trial court allowing amendment of the written statement was set aside. Hence, these appeals by special leave filed by the defendant-appellants. 10. We have heard the learned counsel appearing for the parties. Mr. Dushyant A. Dave, Senior Advocate and Mr. Huzefa A. Ahmadi, Senior Advocate appearing for the defendant-appellants drew JUDGMENT our attention to various decisions of this Court for the proposition that the admission made in the written statement can be withdrawn and inconsistent plea can be taken in the written statement. Learned counsel also tried to impress us that the order passed on the petition under Order VI Rule 16 and Order VIII Rule 9 will not operate as res judicata on the subsequent application filed under Order VI Rule 17 of CPC. Learned counsel submitted that the High Court has not correctly Page 6 7 appreciated the settled principle of law and has passed the impugned order without considering the entire gamut of the case. 11. On the other hand, Mr. L. Nageswara Rao, learned Senior

on the sole ground that it was filed 13 years after the institution of the suit and that too when the trial of the suit had begun and the plaintiff’s witness was cross- examined. Mr. Rao contended that the disruptive plea cannot be allowed to be taken by way of amendment in the written statement. According to the learned counsel, the ground taken by the defendants for amending the written statement has already been discussed in the earlier petition filed under Order VI Rule 16 and that under Order VIII Rule 9 and Order VI Rule 5 CPC. The said applications were rejected by the trial court and the order was affirmed by this Court also. 12. Before appreciating the rival contentions, we would like to JUDGMENT first reproduce the written statement filed by the defendant- appellants in the suit. The written statement contains of only four paragraphs, which are as under:- “WRITTEN STATEMENT FILED UNDER ORDER 8 RULE 1 CVIL PROCEDURE CODE by Defendants 1 to 4 1. The first defendant was entrusted with the work of purchase of the land for the Plaintiff’s Society before its incorporation. Since there was delay in the registration and incorporation of the Society, the suit land was purchased in the name of the First Page 7 8

3. After the suit is filed there is mediation and settlement and a sum of Rs. 1,00,000/- (Rupees one lakhs only) is paid as full quid to these defendants and these defendants are willing to transfer of the patta in favour of the plaintiff who has already acquired the title as stated in the plaint. 4. Hence the suit may be decreed as prayed for but without costs. Defendants 1. 2. 3. 4. Counsel for the Defendants 1 to 4 Verification The facts stated above are true to the best of our knowledge, belief and information.” JUDGMENT 13. From bare perusal of the written statement, it is manifestly clear that the defendant-appellants categorically admitted not only the case of the plaintiff but also acknowledged receipt of Rs. 1,00,000/- and their willingness for transfer of patta in favour of the Page 8 9 plaintiff. The defendants, on the basis of such admission, prayed to the court that the suit be decreed but without any costs. 14. As noticed above, the defendant-appellants filed

since the same was against their interests. Another application being I.A.No.416 of 2000 under Order VIII Rule 9 CPC was filed praying that the defendants may be permitted to file detailed written statement in the suit since the earlier written statement filed by them was against their interests. Both applications were taken up together by the trial court and disposed of by common order dated 04.01.2002. The trial court while rejecting the aforementioned two applications held that the defendant-appellants cannot be allowed to substitute their written statement in the suit whereunder there was an admission of the claim of the plaintiff-Society. While rejecting the applications, the trial court elaborately discussed the facts of the case and considered the JUDGMENT arguments advanced by the lawyers as also the decisions relied upon by them with regard to withdrawal of admission by filing fresh written statement. 15. At this stage, we must mention that even before the suit was instituted by the plaintiff-Society, the defendants had filed a caveat duly supported by affidavit through the same advocate wherein the entire claim of the plaintiff-Society was admitted. The Page 9 1 only grievance made in the caveat was that without settlement of the amount due as agreed under the Memorandum of Agreement, the plaintiff-Society was trying to lay out the suit land and to dispose of

pages 165-170 of paper book): “16. The learned counsel for the petitioner, referring to the earlier suit litigation between the defendants and others, contended that there is no reason for the defendants to admit the suit claim of the plaintiffs society but for the reasons that fraud was played upon the defendants in filing their written statement. The learned counsel for the petitioner relying upon the decision in BHIKAJI KESHAO JOSHI AND ANOTHER vs. BRIJLAL NANDLAL BIYANI and OTHERS (AIR 1955 SC 610) contended that the Court can order strike out of the written statement and permit the defendants to file substituted written statement with specific pleadings. In the said decision, the petitioner in the said election petition made vague allegations of corrupt practices of the respondent and in the said circumstances it was found that the court can exercise its powers and call for better particulars. It is not the case of the petitioners – defendants herein that their written statement pleadings are vague and that therefore, to furnish better particulars the earlier written statement filed on their behalf may be struck out and they may be permitted to file a detailed substituted written statement. In the written statement filed on behalf of the defendants in the suit OS No.408/94 (OS 1 of 2000 on the file of this court) the defendants had categorically admitted the entire suit claim and have further mentioned that they had no objection for the suit to be decreed. No doubt, it is the contention of the petitioners that their advocate Sri Sunil Kumar obtained their signatures on blank paper and that is contrary to their instructions he prepared the written statement in collusion with the plaintiff- society admitting the suit claim for which they had JUDGMENT Page 10 1

st 17. The learned counsel for the 1 defendant-plaintiff Society relying upon the decisions in MODI SPINNING AND WEAVING MILLS COMPANY LIMITED AND ANOTHER VS. M/S LADHA RAM AND COMPANY (AIR 1977 Supreme Court 680), B.K. NARAYANA PILLAI AND PARAMESWARAN PILLAI AND ANOTHER (2000) 1 Supreme Court Cases 712) and HEERALAL AND KALYAN MALAND AND OTHERS (1998) 1 Supreme Court Cases 278) contended that any amendment introducing entirely different new case and seeking to displace the plaintiff the benefit completed from the admission made by the defendants in the written statement, is not permissible. In the decision in MODI SPINNING AND WEAVING MILLS COMPANY LIMITED VS. M/S LADHA RAM AND COMPANY (AIR 1988 Supreme Court 680) by means of an amendment the defendant wanted to introduce an entirely different case. In the facts and said circumstances, it was held that the defendants JUDGMENT Page 11 1 cannot be allowed to change completely the case made out in their written statement and to substitute an entirely different new case and that if such amendments are allowed the plaintiffs will be irretrievably prejudiced by being denied the opportunity of extracting the admission from the defendants. In HEERALAL vs. KAYALAN MAL AND OTHERS (1998) 1 Supreme Court Cases 278, and HEERALAL vs. KAYALAN MAL AND OTHERS (AIR 1998 Supreme Court 618), it was held that once the written statement contains an admission in favour of the plaintiff, the amendment of such admission of the defendants cannot be allowed to be withdrawn and such withdrawal would amount to totally displacing the case of the plaintiff which would cause him irretrievable prejudice. In B.K. Narayana Pillai and Parameshwaran Pillai and Another (2000) 1 Supreme Court Cases 712, it was held though the defendant has a right to take alternative pleas in defence by way of amendment, it would be subject to qualification that (i) Proposed amendment should not result in injustice to the other side; (ii) any admission made in favour of plaintiff should not be withdrawn; and (iii) inconsistent and contradictory allegations which negate admitted facts should not be raised. Under the present petitions, the petitioners – defendants are intending to take away the admission made by them in regard to the suit claim of the plaintiff society. The law is that no additional written statement should not set up a totally new case or state facts at direct variance with the original written statement so as to completely change the issue in the case. This is not a case where the defendants are intending to take alternative pleas or that they are intending to explain the vague pleadings made by them in their written statement filed. This is also not a petition to file additional written statement but as a petition to substitute the original written statement to get over the admissions made in favour of the plaintiff society. There is no material placed before the court to substantiate their affidavit. As already stated, the documents filed are not helpful to support the affidavit of the petitioner in regard to the allegations made against their previous advocate so as to request the court to permit them to file a detailed written statement, in the place of their earlier written JUDGMENT Page 12 1

18. No doubt, the petitioner had filed criminal proceedings against the said Advocate and others and copies of those criminal proceedings are filed in this petition. Admittedly, the said Criminal Case is pending. Moreover, it was subsequent to the filing of I.A. 2217/95. It is well–established principle of law that the decisions of the Civil Courts are binding on the criminal courts and the converse is not true (vide decision in Karamchand vs. Union of India (AIR 1977 Supreme Court 1244). The plaintiff society is not a party to the earlier civil proceedings, which are filed in this petition on the behalf of the Petitioners. Therefore, those documents, which are filed on behalf of the petitioners – defendants are not binding on the first respondent – plaintiff society. The revenue records, filed are also not helpful for the petitioners in support of their contention in this petition. Whether the chief promoter was by the date of the agreement was a minor as contended by the petitioners is also not a question relevant for the purpose of this petition. Thus, this court holds that the documents filed on behalf of the petitioner do not advance the claim of the petitions. For the foregoing reasons and in view of the law enunciated by the Hon’ble Apex Court, the petitioners–defendants cannot be permitted to substitute the earlier written statement filed by them in the suit whereunder there was an admission of the suit claim of the plaintiffs society, by way of an entirely new written statement taking contradicting pleas. Thus this court does not find any merits in the petitions. JUDGMENT Page 13 1 19. In the result, the petitions are dismissed but without costs.” 16. On the basis of the findings recorded by the trial court,

to substitute the earlier written statement wherein there was an admission of the suit claim of the plaintiff-Society. 17. Aggrieved by the aforesaid order, the defendants preferred revision petitions before the High Court. Before the High Court, it was argued that though some admissions were made in the written statement, the same can be withdrawn by filing a fresh detailed written statement. Dismissing the said revision petitions, the High Court in its order dated 18.09.2002 (pages 184 to 186 of paperbook) observed:- “The court below had elaborately discussed this aspect I agree with the reasoning and finding thereof given by the court below on this aspect and I hold that they are perfect and valid. JUDGMENT Before the court below the defendant relied on a Judgment reported in Bhikaji Keshao Joshi and another vs. Brijlal Nadanlal Biyani and others (AIR 1955 SC 610) and contended that the court can order striking out of the written statement and permit the defendants to file substituted written statement with specific pleadings. The court below rightly distinguished the same and held that it is not applicable. The lower appellate court while dismissing the I.As. relied on a judgment of the Apex Court reported Page 14 1

In the present case the question now is whether the admission made by the defendant in favour of the plaintiff can be withdrawn and the answer in the language of the apex court, is ‘not permissible’. As already discussed the admissions made in the written statement are absolutely matching with st the original stand taken by the 1 defendant in the affidavit filed to his caveat petition and also with the pleadings and the only dispute raised is with regard to payment of money to the defendant. In such a case, I am of the strong view that the defendant had not approached the court with clean hands in filing the present I.As. JUDGMENT It has to be further noticed that the allegations made against the counsel are not established so far. Mere filing of a complaint before the police or before the Bar Council of India, in the circumstances like the present one would only jeopardize the decency and dignity of the profession of the Advocate. This attitude of making wild and baseless allegations against the counsel has to be dissuaded by all means. However, this observation shall not be understood as an opinion expressed by this court on the proceedings already initiated and pending against the said Page 15 1

It is also brought to the notice of this Court that in another suit which is not connected with the present suit, the defendant resorted to similar type of allegations against another counsel, and of course the trial court did not take into consideration those allegations. The court below had discussed in detail all the aspects and dismissed the I.As. with cogent and convincing reasons and I do not find any valid ground to interfere with the same. Accordingly, I pass the order as under. The revisions petitions are dismissed with costs.” JUDGMENT 18. The relevant paragraphs of the orders passed by the trial court and the High Court have been quoted hereinbefore mainly for the reason that while considering the petitions under Order VIII Rule 9 and Order VI Rule 16 both the courts have also gone into the question as to whether those admissions could be withdrawn by permitting the defendants to file a fresh written statement or by striking out of the earlier written statement. Page 16 1 19. Aggrieved by the above said orders, the appellants moved this Court in Civil Appeal No.7940-7942 of 2004. Finding no merit, this Court dismissed the appeals by order dated 15.03.2007.

17 CPC seeking amendment of the written statement. The said amendment petition was allowed by the trial court and against that the plaintiff-Society preferred revision before the High Court. The High Court by passing the impugned order dated 28.12.2007 allowed the revision petitions and set aside the order passed by the trial court. The High Court held as under :- “15. The ratio in THE UNITED PROVINCES ELECTRIC SUPPLY CO. LTD. case (AIR 1972 SC 1201) that decision on any particular point given in an order of remand does not operate as res judicata in an appeal filed against the final order passed after the remand; does not apply to the facts of this case because there is no ‘order of remand’ in this case as plaintiff is not relying on any of the observations in an ‘order of remand’ to contest the applications made by the defendants. JUDGMENT 16. In view of the ratio in SATYADHYAN GHOSAL case (AIR 1960 SC 941), ARJUN SINGH case (AIR 1964 SC 993) and THE UNITED PROVINCES ELECTRIC SUPPLY CO. LTD. case (..supra) successive applications for the same relief cannot be permitted, and they can even be rejected as an abuse of the process of Court. 17. It is contended by the learned counsel for the defendants that subsequent to the filing of I.A. No.416 of 2000, defendants came to know through the report of an expert that the written statement filed on their behalf was typed on the same typewriter on which the Page 17 1 plaint was typed. In the common order challenged in these revisions, the trial Court considered that contention and held that that contention has to be decided at the time of trial, but cannot be considered at this stage. For the reasons given by the trial court, that finding cannot be said to be erroneous.

JUDGMENT 21. Before going into the merits of the case, we would like to refer two of the provisions viz. Order VI Rule 16 and Order VI Rule 17 CPC which are involved in the instant case. These two provisions read as under:- “ 16. Striking out pleadings — The Court may at any stage of the proceedings order to be struck out or amended any matter in any pleading— Page 18 1 (a) which may be unnecessary, scandalous, frivolous or vexatious, or (b) which may tend to prejudice, embarrass or delay the fair trail of the suit, or

17. Amendment of pleadings — The Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties. Provided that no application for amendment shall be allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial.” JUDGMENT 22. Order VI Rule 16 CPC has been substituted by the CPC (Amendment) Act, 1976. This provision deals with the amendment or striking out of the pleadings, which a party desires to be made in his opponent’s pleadings. In other words, the plaintiff or the defendant may ask the court for striking out pleadings of his opponent on the ground that the pleadings are shown to be unnecessary, scandalous, frivolous or vexatious. This Rule is based on the principle of ex debito justitia. The court is empowered under this Rule to strike out any Page 19 2 matter in the pleadings that appears to be unnecessary, scandalous, frivolous or vexatious or which tends to prejudice, embarrass or delay the fair trial of the suit.

application the court may allow the parties to amend their pleadings subject to certain conditions enumerated in the said Rule. 24. Although the defendant-appellants filed the petition for striking out their own pleading i.e. written statement, labelling the petition as under Order VI Rule 16 CPC, but in substance the application was dealt with as if under Order VI Rule 17 CPC inasmuch as the trial court discussed the facts of the case and did not permit the defendants to substitute the written statement whereunder there was an admission of the suit claim of the plaintiff-Society. The relevant portion of the order quoted hereinabove reveals that the trial court while rejecting the aforementioned petition held that the defendant- JUDGMENT appellants cannot be allowed to substitute their earlier written statement filed in the suit whereunder there was an admission of the claim of the plaintiff-Society (respondent herein). Similarly in the revision filed by the defendants, the High Court considered all the decisions referred by the defendants on the issue as to whether the defendants can withdraw the admission made in the written statement and finally came to the conclusion that Page 20 2 the defendant-appellants cannot be allowed to resile from the admission made in the written statement by taking recourse to Order VIII Rule 9 or Order VI Rule 16 CPC by seeking to file a fresh written

hearing of the suit had already commenced and some of the witnesses were examined, is wholly misconceived. The High Court in the impugned order has rightly held that filing of subsequent application for the same relief is an abuse of the process of the court. As noticed above, the relief sought for by the defendants in a subsequent petition under Order VI Rule 17 CPC was elaborately dealt with on the two earlier petitions filed by the defendant-appellants under Order VI Rule 16 and Order VIII Rule 9 CPC and, therefore, the subsequent petition filed by the defendants labelling the petition under Order VI Rule 17 CPC is wholly misconceived and was not entertainable. JUDGMENT 25. After giving our full consideration on the matter, we do not find any error in the impugned order passed by the High Court. Hence, these appeals have no merit and are accordingly dismissed. No order as to costs. …………………………………….J. (P. Sathasivam ) Page 21 2 ……………………………………J. (M.Y. Eqbal) New Delhi, April 18, 2013. JUDGMENT Page 22