MANU/DD/0018/2013

Equivalent Citation: III(2013)BC 70(DRAT)

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL

DELHI
Appeal No. 112 of 2012
Decided On: 26.02.2013
Appellants: Raj and Company and Ors.
Vs.
Respondent: State Bank of Patiala and Ors.
Hon'ble Judges/Coram:
S.N.H. Zaidi, J. (Chairperson)
Counsels:
For Appellant/Petitioner/Plaintiff: Mr. Sanjeev Ralli and Mr. Sandeep Anand ,
Advocates
For Respondents/Defendant: Mr. Narinder Pal, Advocate
Case Note:
Property - Dismissal of application - Whether order passed dismissing
application for amendment was valid or not - Held, perusal of order would
show that Tribunal below while considering amendment applications was
mainly guided by circumstance that appeal applicants had got hearing of
appeal adjourned on several dates and thereafter filed amendment
application which, in view of Tribunal below, was only to protract its
disposal - Appeal allowed.
JUDGMENT
S.N.H. Zaidi, J. (Chairperson)
1. This appeal has been directed against the order dated 16.2.2012 of the Presiding
Officer of DRT-II, Chandigarh whereby the applications I.A. No. 493/2010 and I.A.
No. 60/2012 filed by the appellants for amending the S.A. No. 121/2010 have been
dismissed. The facts of the case indicate that appellant firm was granted a Cash
Credit facility by the respondent Bank but when the loan account became irregular, it
was classified as Non Performing Asset (NPA) and demand notice under Section 13(2)
of the SARFAESI Act followed by possession notice were issued by the Bank claiming
symbolic possession over the mortgaged property. The borrower firm filed application
under Section 17 of the SARFAESI Act (S.A. No. 121/2010) challenging the action of
the Bank taken under Section 13(4) of the said Act and also claimed Rs. 10 lacs
towards compensation and cost for the Bank's wrongful acts. The S.A. applicants,
thereafter, filed an application (I.A. No. 493/2010) seeking certain amendments to
the said S.A., including enhancement of the claim of compensation to 51 lacs, and
then, in pursuance to the directions of the DRT, filed another application (I.A. No.
60/2012) clarifying the paragraphs of the S.A. to be amended/deleted as per the
proposed amendments. The Tribunal below dismissed both the I.As. by the impugned
order dated 16.2.2012, which has been assailed by the S.A. applicants in this appeal.

07-01-2022 (Page 1 of 4) www.manupatra.com Dhaval Vussonji & Associates

2. Mr. Sanjeev Ralli, the learned Counsel appearing for the appellants, has submitted
that the present appeal is being pressed only for the amendment sought for the
enhancement of compensation amount from Rs. 10 lacs to Rs. 51 lacs on account of
pecuniary loss suffered by the appellants due to wrongful and illegal actions of the
respondent Bank taken under Section 13 of the SARFAESI Act. He has further
submitted that for the aforesaid limited purpose, the amendments as sought for in
Paragraphs 1(a) and (b), 5(iv)(g) and 5(xxxvii), under the heading 'Direct Pecuniary
Loss', of the amendment application (I.A. No. 493/2010) are entitled to be allowed
and the Tribunal below had erred in dismissing the amendment application in its
entirety.
3. Mr. Narinder Pal, the learned Counsel for the respondent Bank, on the other hand,
has contended that the present appeal against the dismissal of the amendment
application is not maintainable as there is no provision in the SARFAESI Act or the
rules made thereunder for the amendment of the S.A. He has further contended that
the provisions of Order 6 Rule 17 of the CPC can also not be invoked for the said
purpose as the amendment application was filed after the commencement of the trial
of S.A. and it was barred by the proviso to the said rule, because there was no
contention that in spite of due diligence the applicant/appellants could not seek the
amendment before the commencement of the trial.
4. I have considered the submissions of the parties learned Counsel and perused the
record. So far as the power of the DRT to allow amendment in the S.A. is concerned,
Section 17(7) of the SARFAESI Act provides that the DRT shall dispose of the S.A. in
accordance with the provisions of the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (for short, the RDDBFI Act) and the rules made thereunder and
Section 19(25) of the RDDBFI Act empowers the DRT to make any order to secure the
ends of justice. The DRT has, thus, power to make any appropriate order to facilitate
the effective adjudication of the SA and thereby allow the necessary amendment in
the SA to secure the ends of justice.
5 . The Hon'ble Supreme Court in Revajeetu Builders and Developers v.
Narayanaswamy and Sons & Ors., MANU/SC/1724/2009 : IV (2009) CLT 39 (SC) :
VII (2009) SLT 537 : 2009 (10) SCC 84, while considering the scope of amendment
of pleadings has held in Paragraph 67 of the judgment that:
67. On critically analyzing both the English and Indian cases, some basic
principles emerge which ought to be taken into consideration while allowing
or rejecting the application for amendment--
(1) whether the amendment sought is imperative for proper and
effective adjudication of the case;
(2) whether the application for amendment is bona fide or mala fide;
(3) the amendment should not cause such prejudice to the other side
which cannot be compensated adequately in terms of money;
(4) refusing amendment would in fact lead to injustice or lead to
multiple litigation;
(5) whether the proposed amendment constitutionally and
fundamentally changes the nature and character of the case; and

07-01-2022 (Page 2 of 4) www.manupatra.com Dhaval Vussonji & Associates

 (6) as a general rule, the Court should decline amendments if a fresh
suit on the amended claims would be barred by limitation on the
date of application.
In Rameshkumar Agarwal v. Rajmala Exports P. Ltd., MANU/SC/0252/2012 : III
(2012) SLT 114 : (2012) 5 SCC 337, the Hon'ble Apex Court, after reproducing the
above principles, has further held that:
(11) It is clear that while deciding the application for amendment ordinarily
the Court must not refuse bona fide, legitimate, honest and necessary
amendments and should never permit mala fide and dishonest amendments.
The purpose and object of Order 6 Rule 17 of the Code is to allow either
party to alter or amend his pleadings in such manner and on such, terms as
may be just. Amendment cannot be claimed as a matter of right and under all
circumstances, but the Courts while deciding such prayers should not adopt a
hyper-technical approach. Liberal approach should be the general rule
particularly, in cases, where the other side can be compensated with costs.
Normally, amendments are allowed in the pleadings to avoid multiplicity of
litigations.
6 . Considering the limited amendments sought by the appellants in the light of the
aforementioned proposition of law, I am of the considered view that though the
amendment seeking to enhance the compensation amount may not be imperative for
the proper and effective adjudication of the S.A., yet it cannot be termed as mala fide
or causing any prejudice to the respondent Bank. Mr. Ralli's contention also appears
tenable that as the details of the loss for the financial year 2009-10 incurred by the
appellants firm could be known only after the finalization of the accounts in August
2010, therefore, the enhanced amount of compensation could not be asked for
earlier. The amendments sought for in Paragraph 1 (a) and (b) as well as in
Paragraphs 5(iv)(g) and 5 (xxxvii) of the amendment application are said to be
related to those facts and circumstances on the basis of which the relief qua the
enhanced compensation has been sought. However, in my opinion, the averments
made in the first paragraph of Paragraph I (a) are not related to the said relief and
thus it cannot be allowed, but since the second paragraph 1(a) as well as Paragraphs
1 (b), 5(iv)(g) and 5(xxxvii)(i) are related to the said relief, the same may be
allowed. The averments made in Clause (ii) of Paragraph 5(xxxvii) are in respect of
the payments made by the appellants in pursuance of the direction of the Tribunal
below and if in making those payments the appellant had sold any material in stock,
as alleged, the said circumstance cannot be allowed to be taken as a ground for
claiming compensation for incurring the pecuniary loss and as such the amendment
asked for in the said clause cannot be allowed.
7 . A perusal of the order impugned would show that the Tribunal below while
considering the amendment applications was mainly guided by the circumstance that
the S.A. applicants had got the hearing of the S.A. adjourned on several dates and
thereafter filed the amendment application which, in view of the Tribunal below, was
only to protract its disposal. The learned Presiding Officer has also observed that he
could not find any cogent ground to allow the amendment particularly when there
was no ground necessary for the determination of the real question in controversy
between the parties. This observation is not in accordance with the facts and
circumstances of the case, as the S.A. applicants had already prayed for the
compensation and cost, seemingly under Section 19 of the SARFAESI Act. It is also a
well settled principle of law that while considering an application for amendment the

07-01-2022 (Page 3 of 4) www.manupatra.com Dhaval Vussonji & Associates

Court cannot go into the merits of such amendment and the delay in filing the
amendment application cannot stand in the way of allowing the prayer for
amendment if it passes other tests for allowing such amendment. The learned
Tribunal below does not appear to have considered the amendment applications in
accordance with the settled principles of law relaxing to it and has dismissed the
application merely on the premise that it was filed to cause delay in disposal of the
S.A. The order impugned, therefore, cannot be allowed to sustain and the appeal filed
against the same is entitled to be allowed.
8. In view of the above discussion, the appeal is allowed and the order impugned is
set aside. The amendments sought in the second paragraph of Paragraph 1(a),
Paragraph 1(b) and Paragraphs 5(iv)(g) and 5(xxxvii)(i), under the heading 'Direct
Pecuniary Loss', in application (I.A. No. 493/2010) are allowed, besides substitution
of the amount of "Rs. 51 lacs" in place of "Rs. 10 lacs" in relief Clause (viii) of the
S.A., on payment of Rs. 5000/- as cost. The amount of cost is to be deposited with
the DRT Bar Association of Chandigarh in two weeks.
9. The appellants (S.A. applicants) are directed to file an amended S.A. in the light of
the above order before the Tribunal below within three weeks from today with the
proof of deposit of cost. Copy of this order be furnished to the parties as per law and
one copy be sent to the DRT concerned forthwith.
© Manupatra Information Solutions Pvt. Ltd.

07-01-2022 (Page 4 of 4) www.manupatra.com Dhaval Vussonji & Associates