Important Point
Principles for allowing or otherwise an amendment, where limitation is invoked, stated.

Judgment

Tarun Chatterjee, J. —

1. Leave granted.

2. This appeal is directed against the Judgment and Order dated 20th of October, 2006 passed by the High Court of Bombay at Goa in Writ Petition No.463 of 2003 whereby the High Court had affirmed the Order of the trial court dated 5th of February, 2001 by which the trial court had rejected the application for amendment of written statement and the counter claim of the defendants/appellants.

3. The facts leading to the filing of this appeal are stated in a nutshell :-

Prabhakar Gajanan Naik has filed a suit for dissolution of partnership firm wherein the appellant No.1, being defendant No.1 in the suit, was the partnership firm and the appellant No.2, who is defendant No. 4, was a partner of the said firm. In the said suit for dissolution of partnership, the appellants by their written statement disputed the existence of such partnership and had taken a plea that by way of a family arrangement, the defendants/appellants were allowed to carry on the business of setting up South Konkan Distilleries. In their written statement, the appellants also claimed that in view of various letters addressed to various Banks,the said distillery could not be commenced as scheduled in May, 1986 and as a result thereof, the appellants suffered heavy loss. Accordingly, in the written statement, a counter claim of Rs.52 lakhs was made against the original plaintiff/respondent. The said written statement was, however, filed on 17th of June, 1987. The counter claim of the appellants was based on a notice of the learned counsel dated 23rd of October, 1986. In 2000, i.e., after thirteen and a half years, the appellants filed an application for amendment of the written statement and the counter claim seeking enhanced amount. In the application for amendment, the appellants had alleged that as they were suffering loss of Rs. 20,000/- per day from the month of June, 1987, when the original written statement was filed, the counter claim was made only upto to the date of filing of the written statement and by seeking an amendment of the same, they were only claiming a sum of Rs.20,000/- per day from June, 1986 till November, 2000 which would be less than Rs.25 lakhs. This application for amendment of the written statement and the counter claim, filed by the appellants, was opposed by the original plaintiff/respondent on the ground that the prayer for amendment of the written statement and the counter claim was clearly barred by the law of limitation. The trial court by its Order dated 5th of February, 2001 came to the conclusion that as the cause of action arose in 1986, the prayer for amendment of the written statement and the counter claim for enhanced damages, as noted herein earlier, was clearly ex facie barred by the law of limitation. Accordingly, the trial court rejected the application for amendment of the written statement and the counter claim filed by the appellants and aggrieved by the aforesaid Order of rejection, a writ petition being W.P.No.463/2003 was filed at the instance of the appellants which was also rejected by the impugned Order of the learned Judge of the High Court against which a special leave petition was filed and on grant of leave, the same was heard in presence of the learned counsel for the parties.

4. We have heard the learned counsel for the parties and examined the application for amendment of the written statement, the counter claim and also the original written statement including the plaint filed by the respondents in the present suit. At this stage, we may record that this Court while issuing notice on 12.2.2007 passed the following Order:

“Issue notice limited to the question as to whether the amendment could have been allowed with some modification so as to grant relief to the petitioner only to the extent of amount not barred by limitation as on the date of the application.”

5. The learned counsel for the parties appearing before us, however, submitted that in the fittest