PATNA HIGH COURT
H.Mahapatra and A.B.N.Sinha JJ.
Baijnath Bhalotia
Versus
State Bank Of India
Appeal from Original Decree No. 174 of 1960 ;
Decided On : AUGUST 23, 1966
Civil Procedure Code, Order 6, Rule 17 - Amendment of Pleadings - Introduction of New Cause of Action - Equitable Set-off - Delay and Prejudice.
Fact of the Case:
Defendant No. 2 in a suit for recovery of money on a cash credit account sought to amend his written statement to introduce a claim of equitable set-off against the plaintiff-Bank. The claim arose from the alleged tampering and removal of pledged goods by the Bank's employees.
Finding of the Court:
The Court held that the amendment sought was not permissible as it introduced a new cause of action based on the contract of pledge, which was different from the original cause of action based on the contract of loan. The Court also considered the delay in making the amendment and the prejudice that would be caused to the plaintiff-Bank.
Issues: 1. Whether the amendment sought by the defendant introduced a new cause of action. 2. Whether the delay in making the amendment and the prejudice to the plaintiff-Bank were factors to be considered.
Ratio Decidendi: 1. The Court held that the amendment sought by the defendant introduced a new cause of action based on the contract of pledge, which was different from the original cause of action based on the contract of loan. 2. The Court also considered the delay in making the amendment and the prejudice that would be caused to the plaintiff-Bank and held that these factors weighed against allowing the amendment.
Final Decision: The Court rejected the defendant's application for amendment of the written statement and dismissed the appeal.
Mahapatra, J.
1. Defendant No. 2 is the appellant. The appeal arises out of a suit brought by the State Bank of India for recovery of Rs. 1,60,076-4-11 with interest pendente lite and future from the defendants. The case of the plaintiff-Bank was that the defendants had opened a cash credit account with the Bank and had entered into an arrangement that they would pledge goods with the Bank as security against the advances and, later on, on payment of proportionate amount, would take the release of the pledged goods and gradually discharge the loan of the Bank. In addition to this arrangement which was evidenced by the documents of agreement, they had also given letters to the Bank that each one of them will be responsible to the Bank for any act done by other defendants in regard to taking advance and furnishing security of goods. On the date when the suit was instituted, the defendants, according to the plaintiff-Bank, owed Rs. 1,60,076411. I should make it clear that the suit was instituted only on the contract of loan and not on the contract of pledge or any other agreement entered into by the parties in respect of the rash credit account.
2. The defence put up by the different defendants was not the same though they were all in common in denouncing the plaintiffs claim. In their respective written statements, each one of them tried to throw the blame on the one or the other of the defendants: particularly defendant No. 2 made it clear in his written statement that he was not responsible for anything done by defendant No. 1 which he alleged to be the fraudulent acts on his part with the motive to deceiving other defendants who were working in partnership with him in carrying on the business of the mills known as Shree Bhagwati Rice, Oil and Flour Mills at Jamui.
3. On the trial of the suit, the plaintiffs claim was decreed on contest against defendants 1, 2 and 4 with costs, and it was also declared that the plaintiff-Bank had the first charge on the sum of Rs. 33,959-2-3 which was then in deposit in the State Treasury at Jamui as the sale proceeds of the pledged goods in a criminal action instituted by the Bank against the defendants Against that, defendant No. 2 alone has come in appeal.
4. Learned Counsel, appearing for the appellant, did not address us on the merits of the appeal at all. He only pressed an application which he filed to-day for amendment of his written statement in which he wants that a new paragraph should be added as para graph 26 as follows:
"That this defendant is entitled to a set off of Rs. 91.561 as against the claim of the plaintiff."
Learned Counsels argument is that the foundation for this claim of set off was laid in the appellants written statement, if not also in the written statement filed by the other defendants; but the prayer for set off was not made specifically either in the written statement as it was then filed or at any later stage when the trial was in continuance. He contends that defendant No 2 and, for the matter of that, other defendants would be seriously prejudiced if really the claim of set off as sought now to be put in the written statement by way of amendment is not allowed.
As for the delay suffered in making this prayer, learned Counsel urged that that would not be the sole criterion for deciding the justifiability or otherwise of allowing the amendment of the written statement at this stage. His further contention is that the plaintiff-Bank had adduced all evidence in regard to the fraud alluded to in the written statement. A part of the case put up in the defence was that the Bank or some employees of the Bank were responsible for interfering with the contents of the pledged goods and thereby the price that was fetched by the sale of those goods became very much loss The Bank was responsible for the low price and, as such, the defendants were not liable for the entire claim in the cash credit account as prayed in the suit.
Alternatively, it was contended that
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.