Case Note & Summary
The petitioner, HDFC Bank Ltd., filed an original application No. 29 of 2011 before the Debt Recovery Tribunal, Mumbai, under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB Act), seeking recovery of Rs. 27,23,33,693.34 from the respondent, Ashapura Minechem Ltd., along with interest and other reliefs. During the pendency of the proceedings, the bank filed an amendment application seeking to incorporate additional claims for arrears of Rs. 64,25,64,810.23 that had become due under monthly settlement dates from 26.2.2010 to 30.11.2012 under the same derivative transactions. The Debt Recovery Tribunal rejected the amendment application on 6 October 2016, holding that the proposed amendment did not relate back to the date of the original application, introduced a new cause of action, and would be effective only from the date of amendment. The bank's appeal before the Debt Recovery Appellate Tribunal was also rejected. The bank then filed a writ petition before the Bombay High Court. The High Court examined the pleadings, particularly paragraph (xii) of the original application, where the bank had reserved its right to claim amounts falling due under future monthly settlement dates. The Court held that the proposed amendment did not introduce a new cause of action but merely added further claims arising from the same derivative transactions, which were part of the same subject matter. The Court found that the amendment was necessary for the determination of the real controversy and that the Tribunals had erred in rejecting it. The High Court allowed the writ petition, set aside the orders of the Debt Recovery Tribunal and the Appellate Tribunal, and permitted the bank to amend the original application. The Court directed that the amendment be carried out within two weeks and that the Tribunal proceed with the matter expeditiously.
Headnote
A) Civil Procedure - Amendment of Pleadings - Order VI Rule 17 of Code of Civil Procedure, 1908 - Amendment relating to same cause of action - The petitioner bank sought to amend its original application to include additional amounts that became due under the same derivative transactions after the filing of the original application. The Debt Recovery Tribunal and Appellate Tribunal rejected the amendment on the ground that it introduced a new cause of action. The High Court held that the amendment did not introduce a new cause of action but merely added further claims arising from the same transactions, and that the amendment should be allowed as it was necessary for the determination of the real controversy. (Paras 3-6) B) Debt Recovery - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Section 19 - Amendment of application - The Court held that the Tribunal erred in rejecting the amendment application. The proposed amendment related to the same subject matter and did not change the character of the original application. The Court set aside the orders of the Tribunal and Appellate Tribunal and allowed the amendment. (Paras 5-6)
Issue of Consideration
Whether the proposed amendment to the original application before the Debt Recovery Tribunal, seeking to include additional amounts that fell due after the filing of the original application, introduces a new cause of action or relates to the same cause of action, and whether the amendment should be allowed.
Final Decision
The High Court allowed the writ petition, set aside the orders of the Debt Recovery Tribunal and the Debt Recovery Appellate Tribunal, and permitted the petitioner to amend the original application. The amendment was to be carried out within two weeks, and the Tribunal was directed to proceed with the matter expeditiously.
Law Points
- Amendment of pleadings
- Cause of action
- Relating back
- Debt Recovery Tribunal
- Order VI Rule 17 CPC
- Section 19 RDDB Act
