IPL Sugars vs S.B. Bhad - Recovery Suit

## Unlock Advanced Research with PRISM AI

Integrated with over 4 crore judgments and laws — designed for legal practitioners, researchers, students and institutions

• Know your Kanoon - Doc Gen Hub - Counter Argument - Case Predict AI - Talk with IK Doc -... Upgrade to Premium [Cites 13, Cited by 0 ] ### Delhi High Court

Ipl Sugars & Allied Industries Ltd vs Shri S.B. Bhad Sole Proprietor M/S. ... on 24 March, 2026

Author: Subramonium Prasad

Bench: Subramonium Prasad

•    IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                              Date of decision: 24th MARCH, 2026
                             IN THE MATTER OF:
                    +        I.A. 13426/2023 & I.A. 10753/2020
                             IN
                             CS(COMM) 717/2019
                             IPL SUGARS & ALLIED INDUSTRIES LTD.                        .....Plaintiff
                                                Through:     Mr.    Jeevesh   Nagrath,   Senior
                                                             Advocate with Mr. Vivek Singh, Ms.
                                                             Kirti Mewar, and Ms. Kriti Sharma,
                                                             Advs
  
                                                versus
  
                             SHRI S.B. BHAD SOLE PROPRIETOR M/S. ENGINEERS
                                                                          .....Defendant
                                            Through: Mr. Anil K Airi, Senior Advocate
                                                     with Mr. Sudeep Dey, Mr. Vishal
                                                     Tyagi, Mr. Harsh Gautam and Ms.
                                                     Sadhna Sharma, Advocates
  
                             CORAM:
                             HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
                                                JUDGMENT I.A. 13426/2023
  

1.   The instant Suit has been filed for a recovery of Rs. 30,68,92,600/-
                     along with interest @ 12% per annum from the Defendant.
   

2.   Facts as borne out from the Plaint are stated as under:
   

i. The Plaintiff Company, incorporated under the Companies Act, 1956,
having its registered office at 10-B, Rajendra Park, Pusa Road, New
Delhi - 110060, is a subsidiary of Indian Potash Limited and engaged Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 1 of 24 Signing Date:24.03.2026 15:47:31 inter alia in the business of production and sale of sugar and allied
products.

ii. In the year 2011, pursuant to a global tender, the Plaintiff Company
acquired a Sugar Unit at Motipur, Bihar ["Motipur Sugar Unit"]
from the Bihar State Corporation Ltd. Pursuant to this, the
Government of Bihar granted a 60-year lease for the said Sugar Unit
in favor of the Plaintiff.

iii. The Defendant approached the Plaintiff Company and made an offer
for carrying out the works of erection and commissioning of a sugar
plant along with civil works at the Motipur Sugar Unit. Later, on
28.09.2011, the Plaintiff issued a Letter of Intent ["LOI"] for the
design, manufacture, supply, erection and commission, including civil
work and construction for 3500 TCD sugar plant expandable to 5000
TCD and 20 MW Cogen Power Plant (excluding boiler and turbine
within battery limit) at the Motipur Sugar Unit ["the Project"].
iv. Pursuant to the issuance of the LOI, the Plaintiff made an advance
payment of Rs. 24 crores on 01.11.2011 and 20.01.2012.
v. It is stated that before the acquisition of the Motipur Sugar Unit by the
Plaintiff Company, the same was acquired by the Government of
Bihar. Subsequent to the issuance of the LOI and the advance
payments made by the Plaintiff, it transpired that the Government of
Bihar came to file a writ petition before a Division Bench of the Patna
High Court, which came be dismissed.

vi. Against the dismissal of the writ petition, the Government of Bihar
preferred a Special Leave Petition before the Apex Court being SLP
(Civil) No. 14616-18 of 2014, whereby leave was granted vide Order Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 2 of 24 Signing Date:24.03.2026 15:47:31 dated 11.08.2014 and the case was re-numbered as Civil Appeal No.
7663-65 of 2014.

vii. In order to get clarity on its rights and commence its works under the
Project at the Motipur Sugar Unit, the Plaintiff attempted to get the
matter resolved with the Government of Bihar, which persuaded the
Government of Bihar to file an application for early hearing of Civil
Appeal No. 7663-65 of 2014 before the Apex Court, though the same
had to be withdrawn on 14.08.2015.

viii. It is stated that the Plaintiff was advised not to make any investment
on the Motipur Sugar Unit till the matter is decided by the Apex
Court. Accordingly, vide a Letter dated 02.02.2016, the Plaintiff
conveyed to the Defendant that the Project could not be executed on
account of force majeure conditions.

ix. It is further stated that the Plaintiff also initiated arbitration
proceedings inter alia against the Government of Bihar, wherein the
Plaintiff claimed the amount paid by it to the Defendant, i.e., Rs.24
crores from the Government of Bihar.

x. The arbitration proceedings culminated in an Arbitral Award dated
25.10.2019 passed by the Arbitral Tribunal, whereby the Plaintiff was
awarded a sum of Rs. 6 crores, payable by the Government of Bihar
to the Plaintiff company.

xi. Subsequently, the Plaintiff and Defendant held several meetings to
decide on a future course and closure/termination of the contract
between the parties herein. It is stated that on 22.02.2016, it was
agreed that the Defendant shall give a proposal for closure of the
contract. It is also stated that an offer of providing works at a distillery Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 3 of 24 Signing Date:24.03.2026 15:47:31 unit in Rohana Kalan, Uttar Pradesh, in place of the Project at the
Motipur Sugar Unit, was also given by the Defendant to the Plaintiff.
However, despite several follow-ups by the Plaintiff, no response was
forthcoming from the Defendant.

xii. On 27.07.2016, a meeting took place between the parties at the Delhi
Office of the Plaintiff Company, in order to explore possible
alternative options, whereby it was agreed that the parties will try to
resolve the issues amicably. It is stated that in the said meeting, the
Defendant requested the Plaintiff for shifting of the contract under the
LOI to some other site.

xiii. Again, after the meeting between the parties on 27.07.2016, the
Defendant fell silent and no positive response was received by the
Plaintiff.

xiv. A disagreement arose between the parties after an email was sent by
the Plaintiff on 18.10.2018, stating that the Project had to be closed
due to circumstances beyond the Plaintiff's control, while also
expressing dismay over the Defendant having withheld a huge amount
of Rs. 24 crores. Contents of this email were disputed by the
Defendant. Rather, the Defendant put forth a case by way of a letter
dated 03.02.2019, that the purchase order was terminated in the month
of February 2016 itself and it was the Defendant who incurred losses
amounting to Rs. 25,36,67,137/- due to the cancellation of the LOI.
However, the Plaintiff maintains that no proof of loss was tendered by
the Defendant.

xv. Later, by way of a letter dated 08.07.2019, the Plaintiff terminated the
LOI and called upon the Defendant to refund the advance amount of Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 4 of 24 Signing Date:24.03.2026 15:47:31 Rs. 24 crores along with interest @ 18% per annum. The entire
contents of this letter were disputed by the Defendant in its reply
dated 14.07.2019, which constrained the Plaintiff to issue a legal
notice dated 24.07.2019, again calling upon the Defendant to refund
the advance amount of Rs. 24 crores, along with interest. Yet again,
this was disputed by the Defendant.

xvi. Thus, the present Suit was thereafter filed by the Plaintiff, seeking
recovery of Rs. 30,68,92,600/- along with interest @ 12% per annum
from the date of the Suit till date of the payment in full by the
Defendant to the Plaintiff.

1. Summons in the Suit were issued on 23.12.2019. Written Statement
                     and the counter claims have been filed on behalf of the Defendant.
                     Replication along with an affidavit of admission/denial of the Defendant's
                     documents has also been filed by the Plaintiff.
   

2. In the Written Statement, a preliminary objection was taken by the
                     Defendant that the Suit is barred by limitation. It is stated by the Defendant
                     that the Plaintiff, after initiating arbitration proceedings claiming a sum of
                     Rs. 24 crore from the Government of Bihar, was awarded a sum of Rs. 6
                     crores by the Arbitral Tribunal. It is the case of the Defendant that by
                     applying the doctrine of election, the present Suit is not maintainable as the
                     Plaintiff has only now decided to turn its lance against the Defendant to
                     claim the balance amount, even though nothing prevented the Plaintiff from
                     impleading the Defendant in the same arbitral proceedings. It is, therefore,
                     the case of the Defendant that the Plaintiff has not come before this Court
                     with clean hands and is guilty of forum shopping.
   

3. It has been emphasized by the Defendant that the present Suit has Signature Not Verified Signed By:PRATEEK         CS(COMM) 717/2019                                               Page 5 of 24 Signing Date:24.03.2026 15:47:31 been instituted only on 13.12.2019, while the LOI is dated 28.09.2011. Time
                     was the essence of the Contract between the parties whereby the supply,
                     erection and commissioning at the Motipur Sugar Unit had to be completed
                     by 30.09.2012. It is argued on behalf of the Defendant that even taking the
                     terminus quo for completing the Project would start running from the receipt
                     of drawings by the Plaintiff which was in the January, 2012, the Project
                     should have been completed by the September, 2012. If September, 2012 is
                     taken as the date for calculating the limitation, the Plaint should have been
                     filed on or before the 2015. It is stated that the Plaintiff deliberately withheld
                     a very vital fact from this Court, that the Plaintiff terminated the contract
                     with the Government of Bihar on 21.10.2013 and once the contract was
                     terminated with the Government of Bihar, it was impossible for the
                     performance of the main Contract. The Plaintiff, though initiated its claims
                     against the Government of Bihar within the period of limitation, kept quiet
                     and did not proceed against the Defendant. Even if the Plaintiff was entitled
                     to maintain two separate proceedings, one against the Government of Bihar
                     and one against the Defendant, the Suit should have been filed on or before
                     October, 2016. In any event, after termination of the contract on 21.10.2013,
                     the same became impossible to be performed beyond 21.10.2013. It is stated
                     that the present Suit, therefore, is hit by limitation. Though several other
                     grounds have also been taken in the Written Statement, they have not been
                     deliberated over by this Court at this juncture.
   

4. Apart from filing the Written Statement and counter-claims, an
   application being I.A. 10753/2020 has also been filed by the Defendant
   under Order VII Rule 11 of the CPC for dismissal of the Suit primarily on
   the ground of limitation and that the Plaint does not disclose any valid cause Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 6 of 24 Signing Date:24.03.2026 15:47:31 of action.

5. It is the case of the Defendant that the LOI was executed on
                     28.09.2011 between the Applicant/Defendant and the Plaintiff. The Contract
                     was to be executed by 30.09.2012. An amount of Rs. 12,00,00,000/- was
                     paid by the Plaintiff to the Defendant on 01.11.2011 and an Advance Bank
                     Guarantee of an equivalent amount was also furnished by the Defendant to
                     the Plaintiff.
   

6. It is stated that the Applicant/Defendant mobilized all its resources
                     and started manufacturing of the customized material as demanded by the
                     Plaintiff under the LOI, however, the Plaintiff itself defaulted in performing
                     its contractual obligations by not lifting the manufactured material by the
                     Defendant and by instructing the Defendant to hold delivery. The same
                     situation prevailed till the end of contractual period i.e., till 30.09.2012. In
                     view of the above, it is the case of the Defendant that when the Plaint was
                     filed on 13.12.2019, no cause of action existed. As far as the question of
                     limitation is concerned, the reasons for filing of I.A. 10753/2020 under [Order VII Rule 11 of the CPC](https://indiankanoon.org/doc/161831507/) read as under:-
   

"5. The applicant further states that the present suit is
barred by limitation and is hence liable to be
dismissed. In this regard the following facts as stated
in the suit by the plaintiff are as follows:-

a) The project pertained to the year 2011. The LOI is
dated 28.09.2011 which made time to be the essence of
contract. As per the LOI/contract, and in terms thereof
the supply, erection and commissioning had to
completed latest by 30/09/2012. Admittedly, the
plaintiff has failed to perform its contractual
obligations within the stipulated time and no extension
of time was agreed upon by the parties. The amount of Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 7 of 24 Signing Date:24.03.2026 15:47:31 Rs. 12,00,00,000/- ( Twelve crore) under the said LOI
was paid on 01.11.2011 as advance and again a sum of
Rs. 12,00,00,000/- (Twelve crore) on 20.01.2012 on
receipt of drawings by the plaintiff. The plaintiff itself
allowed the time for performance of contract to elapse.
The limitation period for plaintiff to claim amounts, if
any, under the contract would be 01.11.2014 for the
initial amount of Rs. 12 crores and 20.01.2015 for
second sum of Rs. 12 crores. The contract had to be
executed and completed latest by 30.09.2012. Even if
the cause of action is treated to have arisen on
30.09.2012 the plaintiff could have instituted the suit
on or before 30.09.2015.

b) Vide email dated 02/02/2016, plaintiff terminated
the LOI with the applicant after acknowledging the
efforts and performance of contractual obligations by
the applicant/ defendant. Plaintiff in the said email
admitted its own default and regretted the
inconvenience caused to the applicant/ defendant in
execution of the project.

c) The plaintiff has deliberately withheld the important
documents from this Hon'ble Court however perusal of
the arbitral award dated 25/10/2019 (attached
alongwith the plaint), it is revealed that the plaintiff
(way back in the year 2013 itself) vide its letter dated.
21/10/2013 had itself terminated its main agreement
concerning the project in question with State of Bihar
for the project. Once the plaintiff itself had terminated
its main contract with State of Bihar, the question of
seeking performance from the applicant under LOI
dated 28/09/2011 could not have arisen. The contract
became impossible to perform on termination of main
contract on 21/10/2013 by the plaintiff itself. Further
the plaintiff had raised its claim on State of Bihar on
31.10.2013 and on 23.05.2014. The plaintiff however,
have deliberately concealed these facts from the Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 8 of 24 Signing Date:24.03.2026 15:47:31 applicant/defendant that it had terminated its contract
with State of Bihar and sought reimbursement of its
expense. Further as per plaintiff it had further
intimated to State of Bihar its clear intention not to go
ahead with implementation of the project vide letter dt.
27.02.2015 Plaintiff however with malafide intentions
concealed all the above referred letters and
communicated only the factum of termination to
applicant/ defendant on 02/02/2016."

1. Since the Defendant specifically raised a question of limitation and cause of action, the Plaintiff filed an application being I.A. 13426/2023 under Order VI Rule 17 of the CPC for amendment of the Plaint. The Plaintiff, by the said application, seeks permission from this Court to add various paragraphs in the Plaint. Relevant paragraphs which are sought to be amended and inserted reads as under:-

"4(a). That the Plaintiff made payment of Rs. 24.00
Crores only after receiving Bank Guarantee of Rs. 12
crores from the Defendant. It is stated that it was
mutually understood between the parties that the
payment received by the Defendant from the Plaintiff
was an advance payment and therefore, even though as
per Letter of Intent, the project was to be erected and
commissioned by 30.09.2012, the Plaintiff from time to
time apprised the Defendant about the pending
litigation on account of which the Defendant extended
the Bank Guarantee from time to time till the year
March, 2016. Thus, by any stretch of imagination, the
contract was not closed on the aforesaid date i.e.
30.09.2012 or any other date claimed by the
Defendant. The Defendant itself on 19.05.2015 gave
confirmation of amount. If the contract had repudiated,
there was no reason for the Defendant to issue any
confirmation in the year 2015.

7(a). That vide email dated 02.02.2016, the Plaintiff Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 9 of 24 Signing Date:24.03.2026 15:47:31 proposed for a meeting for closure/ termination of
contract to the Defendant. The Plaintiff informed the
Defendant that the Motipur Sugar Plant, Bihar Project
could not be executed due to force majeure and
because of the circumstances beyond the control of the
Plaintiff. The Plaintiff further proposed to the
Defendant to have a joint meeting to close the matter in
mutual interest and satisfaction of both the Parties.
The Defendant was further requested to propose 2-3
dates convenient to him for the proposed meeting. It is
explicitly clear from the said communication that the
Plaintiff had only proposed to discuss the terms for
closure, however, the said letter cannot by any stretch
of imagination be construed as repudiation of the
contract.

"11a. That while exploring the options for negotiation
qua adjustment of advance money paid by the Plaintiff
to Defendant under LOI dated 28.09.2011, the
Defendant replied to the Plaintiff's email dated
27.06.2016 vide his letter dated 11.07.2016 and gave
"Techno Commercial Offer for design, manufacturer
and supply of three numbers bare batch type pans of
60T capacity". Further, vide email dated 13.07.2016,
Defendant shared the said offer again. It is clear from
the contents of the email that Parties were under
negotiation qua adjustment of advance money paid by
the Plaintiff to Defendant. The relevant portion of the
said letter/ offer dated 11.07.2016 is reproduced herein
below:-

"We trust that you will find our offer in line
with your requirement and await your
favourable response.."
13a. That the Defendant summarized the discussion
that took place in the meeting dated 27.07.2016
between the Parties vide Defendant's email dated
14.08.2016 issued to the Plaintiff, wherein Defendant Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 10 of 24 Signing Date:24.03.2026 15:47:31 admitted that the discussion covered two issues i.e. (a).
negotiation of 60 TPH pan batch type 3 nos. and (b).
options to settle the existing orders issued to SS
Engineers. It may also be relevant to mention here that
offer with respect to 60 TPH was also given by the
Defendant for closure/ adjustment of the advance
money in his possession. The contents of the email
dated 14.08.2016· issued by the Defendant clearly
reflect that the negotiation was going on between the
Parties with respect to advance money paid by Plaintiff
to Defendant.

20a. That w.e.f. February, 2016 to 14.07.2019, the
Parties explored various options for negotiation qua
adjustment of amount of Rs. 24.00 Crores available
with the Defendant of the Plaintiff, which had been
paid by the Plaintiff under LOI and was yet unutilized.
The Defendant vide his reply dated 14.07.2019 refused
to refund the amount due and payable to the Plaintiff,
which as such, amounted to complete break down of
the negotiation going on between the Parties.

1. That the cause of action for filing the present suit arose when the Parties entered into LOI dated 28.09.2011. It arose when the Defendant furnished the Bank Guarantees and extended the same from time to time. It arose when the Parties negotiated for adjustment of advance amount in alternative supplies. The cause of action arose when the negotiation failed and the plaintiff terminated the contract on 8.7.2019. The cause of action arose when the defendant issued false & frivolous reply dated 14.7.2019. The cause of action also arose when plaintiff got legal notice issued on 24.7.2019. The cause of action arose when the Award dated 25.10.2019 was passed by the Ld. Arbitrator granting Rs. 6 Crores in favour of the plaintiff and against the Bihar Government with respect to payment made by plaintiff to the defendant. The suit is within limitation."

Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 11 of 24 Signing Date:24.03.2026 15:47:31 10. The Defendant has filed a reply to I.A. 13426/2023.

1. It is trite law that if an application under Order VII Rule 11 of the
   CPC has been filed by the Defendant for rejection of the Plaint and
   subsequently, the Plaintiff has filed an application under Order VI Rule 17
   of the CPC for amendment of Plaint, then the Courts must decide the latter
   first and then consider the effect of the amended Plaint on the application
   under Order VII Rule 11 of the CPC, for the reason that any amendment to
   the Plaint, if permitted, dates back to the filing of the Plaint.

2. Learned Senior Counsel for the Plaintiff states that by way of the
   proposed amendment, no new case has been made out and the amendment
   only sets out the relevant facts which were not mentioned in the Plaint, to
   explain as to why the Suit was filed in the year 2019 and further brings out
   the nature of negotiations, discussions and deliberations which are
   continuously taking place between the parties by way of meetings and
   correspondences to demonstrate as to when all the cause of action arose.

3. It is the case of the Plaintiff that it acquired the Motipur Sugar Unit
   from Bihar State Sugar Corporation Ltd., pursuant to the global tender.
   Consequently, a lease for a period of 60 years was granted by the
   Government of Bihar.

4. For installation of the machinery in the Motipur Sugar Unit,
   negotiations started between the Plaintiff and Defendant and a LOI was
   issued by the Plaintiff qua the Defendant for the said purpose of installation
   of the plant and the machinery.

5. A sum of Rs. 24 crore was paid by the Plaintiff to the Defendant on
   01.11.2011. However, unfortunately, the Project was put on hold because of
   certain disputes between the land owners and the Government of Bihar. A Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 12 of 24 Signing Date:24.03.2026 15:47:31 writ petition was also filed before a Division Bench of the Patna High Court
   challenging the lease of the Motipur Sugar Unit in favor of the Plaintiff. The
   writ petition was dismissed, and the decision of the Patna High Court was
   taken up for challenge before the Apex Court in SLP (Civil) No. 14616-18
   of 2014, which is still pending for adjudication.

6. It is submitted on behalf of the Plaintiff that the Project was put on
   hold, but the Contract between the Plaintiff and the Defendant was never
   terminated. It is also stated that the fact that the Plaintiff had terminated the
   Contract with the Government of Bihar is immaterial for the purpose of
   adjudicating the application under Order VII Rule 11 because an application
   under Order VII Rule 11 is to be decided only on the basis of the Plaint
   averments. It is also stated that the Contract was being extended from time
   to time, which is evident from the fact that the Advance Bank Guarantee
   was continuously extended by the Defendant, which indicates a subsisting
   relationship between the parties.

7. Learned Senior Counsel for the Plaintiff submits that, no doubt the
   Plaintiff had invoked arbitration proceedings against the Government of
   Bihar but at the same time, proposals were being exchanged between the
   Plaintiff and the Defendant, where the Plaintiff requested the Defendant to
   consider setting up of the plant and the machinery on the other sites of the
   Plaintiff. These correspondences exchanged between the parties are also
   made part of the documents filed along with the Plaint.

8. It is stated by the learned Senior Counsel for the Plaintiff that since no
   new cause has been pleaded, there is no attempt by the Plaintiff to agitate a
   dead claim by way of the amendment and only facts which transpired
   between the parties before the filing of the Suit and not after, are being Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 13 of 24 Signing Date:24.03.2026 15:47:31 canvassed in the amendment, there ought to be no impediment in allowing
   of the amendment of the Plaint.

9.  The application seeking amendment of the Plaint has been objected to
                     by the Defendant, by stating that the Plaintiff is attempting to raise
                     contradictory pleas, and the amendments which are sought to be introduced,
                     cannot co-exist with the Plaint as originally framed and filed before the
                     Court.
   

10.  It is argued by the learned Senior Counsel for the Defendant that the
                      application seeking amendment was filed only after arguments under [Order
                      VII Rule 11 of the CPC](https://indiankanoon.org/doc/161831507/) were advanced by both the sides and nothing has
                      been mentioned in the application seeking amendment of the Plaint as to
                      why these facts were not mentioned in the Plaint. He further states that the
                      present Suit is a commercial suit and Order XI Rule 1(5) [of the CPC](https://indiankanoon.org/doc/161831507/) as
                      amended by the [Commercial Courts Act, 2015](https://indiankanoon.org/doc/24236663/), has to be kept in mind and
                      the reasons given in the instant application under [Order VI Rule 17 of the
                      CPC](https://indiankanoon.org/doc/161831507/) does not satisfy the test laid down in Order XI Rule 1(5).
    

11.  Heard learned Senior Counsels for the Parties.
    

12.  The law applicable to the application under Order VI Rule 17 is now
                      crystallized. The Apex Court in [Life Insurance Corporation of India v.
                      Sanjeev Builders Private Limited and Others](https://indiankanoon.org/doc/79183688/), (2022) 16 SCC 1 after
                      considering the gamut of case laws has laid down the parameters as how the
                      application under Order XVI Rule 1 has to be dealt with.
    

13.  The Apex Court has held that if any amendment does not result in
                      injustice, the amendment does not seek to withdraw a clear admission made
                      by the party which confers right on the other side and if the amendment does
                      not raise a time-barred claim resulting in divesting of the other side's Signature Not Verified Signed By:PRATEEK         CS(COMM) 717/2019                                                Page 14 of 24 Signing Date:24.03.2026 15:47:31 valuable accrued right, the amendment should be liberally dealt with.
                      Paragraph No.71 of the Judgment, which deals with the applicability of
                      Order II Rule 2 in the case of amendment of plaint which is not considered
                      and also other principles to be followed by the courts when dealing with an
                      application seeking amendment of the Plaint is reproduced:-
    

"71. Our final conclusions may be summed up thus:

71.1. Order 2 Rule 2 CPC operates as a bar against a
subsequent suit if the requisite conditions for
application thereof are satisfied and the field of
amendment of pleadings falls far beyond its purview.
The plea of amendment being barred under Order 2
Rule 2 CPC is, thus, misconceived and hence
negatived.

71.2. All amendments are to be allowed which are
necessary for determining the real question in
controversy provided it does not cause injustice or
prejudice to the other side. This is mandatory, as is
apparent from the use of the word shall, in the latter
part of Order 6 Rule 17 CPC.

71.3. The prayer for amendment is to be allowed:

71.3.1. If the amendment is required for effective and
proper adjudication of the controversy between the
parties.

71.3.2. To avoid multiplicity of proceedings, provided

(a) the amendment does not result in injustice to the
other side,

(b) by the amendment, the parties seeking amendment
do not seek to withdraw any clear admission made by
the party which confers a right on the other side, and

(c) the amendment does not raise a time-barred claim, Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 15 of 24 Signing Date:24.03.2026 15:47:31 resulting in divesting of the other side of a valuable
accrued right (in certain situations).
71.4. A prayer for amendment is generally required to
be allowed unless:

71.4.1. By the amendment, a time-barred claim is
sought to be introduced, in which case the fact that
the claim would be time-barred becomes a relevant
factor for consideration.

71.4.2. The amendment changes the nature of the suit.

71.4.3. The prayer for amendment is mala fide, or

71.4.4. By the amendment, the other side loses a valid
defence.

71.5. In dealing with a prayer for amendment of
pleadings, the court should avoid a hypertechnical
approach, and is ordinarily required to be liberal
especially where the opposite party can be
compensated by costs.

71.6. Where the amendment would enable the court to
pin-pointedly consider the dispute and would aid in
rendering a more satisfactory decision, the prayer for
amendment should be allowed.

71.7. Where the amendment merely sought to
introduce an additional or a new approach without
introducing a time-barred cause of action, the
amendment is liable to be allowed even after expiry of
limitation.

71.8. Amendment may be justifiably allowed where it
is intended to rectify the absence of material
particulars in the plaint.
Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 16 of 24 Signing Date:24.03.2026 15:47:31
71.9. Delay in applying for amendment alone is not a
ground to disallow the prayer. Where the aspect of
delay is arguable, the prayer for amendment could be
allowed and the issue of limitation framed separately
for decision.

71.10. Where the amendment changes the nature of
the suit or the cause of action, so as to set up an
entirely new case, foreign to the case set up in the
plaint, the amendment must be disallowed. Where,
however, the amendment sought is only with respect
to the relief in the plaint, and is predicated on facts
which are already pleaded in the plaint, ordinarily the
amendment is required to be allowed.

71.11. Where the amendment is sought before
commencement of trial, the court is required to be
liberal in its approach. The court is required to bear
in mind the fact that the opposite party would have a
chance to meet the case set up in amendment. As such,
where the amendment does not result in irreparable
prejudice to the opposite party, or divest the opposite
party of an advantage which it had secured as a result
of an admission by the party seeking amendment, the
amendment is required to be allowed. Equally, where
the amendment is necessary for the court to effectively
adjudicate on the main issues in controversy between
the parties, the amendment should be allowed. (See [Vijay Gupta v. Gagninder Kr. Gandhi Vijay Gupta v.
Gagninder Kr. Gandhi, 2022 SCC OnLine Del
1897]."

1. Applying the parameters as stated by the Apex Court to the facts of
   this case, this Court is of the opinion that the amendments which are being
   sought for by the Plaintiff, are in nature of elaborating the facts based on the
   documents which are already on record and to demonstrate that the Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 17 of 24 Signing Date:24.03.2026 15:47:31 negotiations between the parties were going on and the negotiations only
   broke when the Plaintiff finally terminated the contract with the Defendant
   in the year 2018.

2. At this juncture, it is apposite to refer to judgment of the Apex Court
   in Geo Miller and Company Private Limited v. Chairman, Rajasthan Vidyut
   Utpadan Nigam Limited, (2020) 14 SCC 643. Paragraph No. 28 of the said
   judgment which deals with the effect of negotiations on limitation reads as
   under:-

"28. Having perused through the relevant precedents,
we agree that on a certain set of facts and
circumstances, the period during which the parties
were bona fide negotiating towards an amicable
settlement may be excluded for the purpose of
computing the period of limitation for reference to
arbitration under the 1996 Act. However, in such cases
the entire negotiation history between the parties must
be specifically pleaded and placed on the record. The
Court upon careful consideration of such history must
find out what was the "breaking point" at which any
reasonable party would have abandoned efforts at
arriving at a settlement and contemplated referral of
the dispute for arbitration. This "breaking point"
would then be treated as the date on which the cause of
action arises, for the purpose of limitation. The
threshold for determining when such a point arises will
be lower in the case of commercial disputes, where the
party's primary interest is in securing the payment due
to them, than in family disputes where it may be said
that the parties have a greater stake in settling the
dispute amicably, and therefore delaying formal
adjudication of the claim."

1. The said Judgment in Geo Miller (Supra) has been followed by a Co- ordinate Bench of this Court in Alstom Systems India Pvt Ltd v. Zillion Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 18 of 24 Signing Date:24.03.2026 15:47:31 Infraprojects Pvt Ltd, (2022) SCC OnLine Del 5312. Paragraph No. 20 of the said Judgment reads as under:-

"20. Para 28 of the judgment in Geo Miller, on a
holistic reading, holds that, where the parties were
bonafide negotiating towards an amicable settlement,
and the negotiation history was before the Court (in
this case, the learned Arbitral Tribunal), the Court was
required to find out the "breaking point" at which any
reasonable party would have abandoned efforts in
arriving at the settlement and contemplated referral of
the dispute to arbitration. Once this "breaking point"
is ascertained that date "would then be treated as the
date on which the cause of action arises for the
purpose of limitation"."

1. The arguments taken by the Defendant under Order XI Rule 1 (5) will
   be taken up by this Court while considering an application being I.A.
   14204/2023 which has been filed by the Plaintiff under Order XI Rule 1 (5) of the CPC as to whether the Plaintiff has satisfactorily explained as to why
   these documents are not filed along with the plaint and only the Advance
   Bank Guarantee and the letters with respect to the bank have been filed
   along with the documents in any event the Advance Bank Guarantee were
   being read out periodically.

2. In view of the above, this Court is of the opinion that the parameters
   under Order VI Rule 17 of the CPC are now satisfied and the same is
   allowed.

3. The application is disposed of.

4. Let the amended Plaint/written statement be filed within a period of
   four weeks. Thereafter, let the amended written statement be filed as per the
   time stipulated under law.

Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 19 of 24 Signing Date:24.03.2026 15:47:31 31. List before the learned Joint Registrar for further proceedings on
11.05.2026.

I.A. 10753/2020 32. The present application under Order VII Rule 11 has been filed by the
Defendant seeking rejection of the plaint.

1. Learned Senior Counsel for the Defendant contends that even if the
   I.A. No. 13426/2023 is allowed, it will not still bring the Plaint within the
   period of limitation. It is stated that when the Plaintiff terminated the
   contract with the Government of Bihar, the contract could not be performed
   at all and therefore, the cause of action would start running against the
   present Defendant also from that day.

2. It is further stated that the very same claim was raised against the
   Government of Bihar in the arbitration proceedings and nothing prevented
   the Plaintiff from raising the same claim against the Defendant also by
   separate proceedings within the period of limitation, which commenced
   from the date on which the contract with the Government of Bihar was
   terminated.

3. Per contra, learned Senior Counsel appearing for the Plaintiff
   contends that the negotiations between the parties were still going after 2013
   and the termination of the contract by the Plaintiff with the Defendant, took
   place only in the year 2018. It is further stated that the Plaintiff and the
   Defendant were under negotiations which fact is evident from the
   correspondences between the parties and that the breaking point took place
   only in the year 2018.

4. The law relating to rejection of a plaint under Order VII Rule 11 of
   the CPC is crystallized through various judgments of the Apex Court. The Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 20 of 24 Signing Date:24.03.2026 15:47:31 Apex Court in Popat and Kotecha Property v. State Bank of India Staff
   Assn., (2005) 7 SCC 510, has held as under:

""13. Before dealing with the factual scenario, the
spectrum of Order 7 Rule 11 in the legal ambit needs
to be noted.

1. In Saleem Bhai v. State of Maharashtra [(2003) 1
   SCC 557] it was held with reference to Order 7 Rule
   11 of the Code that the relevant facts which need to be
   looked into for deciding an application thereunder are
   the averments in the plaint. The trial court can exercise
   the power at any stage of the suit -- before registering
   the plaint or after issuing summons to the defendant at
   any time before the conclusion of the trial. For the
   purposes of deciding an application under clauses (a)
   and (d) of Order 7 Rule 11 of the Code, the averments
   in the plaint are the germane; the pleas taken by the
   defendant in the written statement would be wholly
   irrelevant at that stage.

2. In I.T.C. Ltd. v. Debts Recovery Appellate Tribunal [(1998) 2 SCC 70] it was held that the basic question
   to be decided while dealing with an application filed
   under Order 7 Rule 11 of the Code is whether a real
   cause of action has been set out in the plaint or
   something purely illusory has been stated with a view
   to get out of Order 7 Rule 11 of the Code.

3. The trial court must remember that if on a
   meaningful and not formal reading of the plaint it is
   manifestly vexatious and meritless in the sense of not
   disclosing a clear right to sue, it should exercise the
   power under Order 7 Rule 11 of the Code taking care
   to see that the ground mentioned therein is fulfilled. If
   clever drafting has created the illusion of a cause of
   action, it has to be nipped in the bud at the first
   hearing by examining the party searchingly under Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 21 of 24 Signing Date:24.03.2026 15:47:31 Order 10 of the Code. (See T. Arivandandam v. T.V.
   Satyapal [(1977) 4 SCC 467] .)

4. It is trite law that not any particular plea has to be
   considered, and the whole plaint has to be read. As
   was observed by this Court in Roop Lal Sathi v.
   Nachhattar Singh Gill [(1982) 3 SCC 487] only a part
   of the plaint cannot be rejected and if no cause of
   action is disclosed, the plaint as a whole must be
   rejected.

5. In Raptakos Brett & Co. Ltd. v. Ganesh Property [(1998) 7 SCC 184] it was observed that the averments
   in the plaint as a whole have to be seen to find out
   whether clause (d) of Rule 11 of Order 7 was
   applicable.

6. There cannot be any compartmentalisation,
   dissection, segregation and inversions of the language
   of various paragraphs in the plaint. If such a course is
   adopted it would run counter to the cardinal canon of
   interpretation according to which a pleading has to be
   read as a whole to ascertain its true import. It is not
   permissible to cull out a sentence or a passage and to
   read it out of the context in isolation. Although it is the
   substance and not merely the form that has to be
   looked into, the pleading has to be construed as it
   stands without addition or subtraction of words or
   change of its apparent grammatical sense. The
   intention of the party concerned is to be gathered
   primarily from the tenor and terms of his pleadings
   taken as a whole. At the same time it should be borne
   in mind that no pedantic approach should be adopted
   to defeat justice on hair-splitting technicalities.

7. Keeping in view the aforesaid principles the reliefs
   sought for in the suit as quoted supra have to be
   considered. The real object of Order 7 Rule 11 of the Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 22 of 24 Signing Date:24.03.2026 15:47:31 Code is to keep out of courts irresponsible law suits.
   Therefore, Order 10 of the Code is a tool in the hands
   of the courts by resorting to which and by searching
   examination of the party in case the court is prima
   facie of the view that the suit is an abuse of the process
   of the court in the sense that it is a bogus and
   irresponsible litigation, the jurisdiction under Order 7
   Rule 11 of the Code can be exercised."

8. It is further settled law that limitation is a mix question of law and
   fact. The material on record does demonstrate the fact that the Advance
   Bank Guarantee were constantly renewed till 14.08.2016 which
   demonstrates that the parties decided to go ahead with the Contract, even
   though the Plaintiff had terminated the contract with the Government of
   Bihar 21.10.2013. Despite the contract being terminated, the Defendant kept
   the Advance Bank Guarantee alive, which is a fact that the negotiations were
   on.

1. The documents filed along with the Plaint also indicate that there
   were certain negotiations going on for installation of plant and the
   machinery at another site of the Plaintiff, which is demonstrated by the
   Letters dated 27.06.2018 and 18.10.2018, which is even after the Advance
   Bank Guarantee had stopped being renewed. This, in the opinion of this
   Court, does indicate that the parties were under negotiations at least till
   18.10.2018 regarding the alternate places where the plants and machinery
   could be installed. The effect of these documents, as to whether it was only
   the one-sided correspondences or not will be all matters of proof in trial and
   cannot to be decided at the stage of Order VII Rule 11.

2. As per the Plaint, the Contract was terminated by the Plaintiff against
   the Defendant only on 18.10.2018 and therefore, applying the law laid down Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 23 of 24 Signing Date:24.03.2026 15:47:31 in the Geo Miller (supra), limitation can be calculated only from the date
   when the contract was terminated. The effect of the said Letter dated
   18.10.2018 as well as the issue as to whether the time for filing the instant
   Suit had already started running in the year 2014 or not, will all be decided
   in trial and not at this juncture.

3. Therefore, this Court is not inclined to accept the submissions
   advanced on behalf of the Defendant at this juncture.

4. However, it is made clear that all these issues will be dealt with at the
   stage of trial and that all the observations made in this Order are only limited
   to issue as to whether the Plaint should be rejected or not at this stage under Order VII Rule 11 of the CPC and are not a final conclusion on the issue of
   limitation, which would be decided in trial after considering all the material
   on record at the relevant time.

5. The present Application, accordingly, stands rejected.

CS(COMM) 717/2019

1. List on 11.05.2026 before the Joint Registrar.

2. List before the Court on 29.07.2026.

SUBRAMONIUM PRASAD, J
MARCH 24, 2026
Prateek/AP Signature Not Verified Signed By:PRATEEK CS(COMM) 717/2019 Page 24 of 24 Signing Date:24.03.2026 15:47:31