High Court order allowing amendment of plaint in debarment dispute is upheld; amendment permitted as continuous cause of action

A bench of Justice Bela M. Trivedi and Justice Satish Chandra Sharma heard an appeal by the State of West Bengal and others challenging a Calcutta High Court order dated 08.01.2024 which allowed the respondent to amend its plaint in a suit arising from debarment proceedings and dispensed with the requirement of issuing a notice under Section 80 of the Code of Civil Procedure.

The Court held that the High Court did not err in permitting the amendment and that the subsequent debarment events formed a continuous cause of action traceable to the memo dated 08.03.2016. The Supreme Court dismissed the appeal and said the amendment did not change the nature or character of the suit and that Section 80 was irrelevant in the factual matrix. The Court, in its reasoning, observed: “The debarment orders form a continuous cause of action as they are a continuation of the memo dated 08.03.2016, which came to be impugned in the Civil Suit. A cause of action is continuing when the act alleged to be wrongful is repeating over a period of time, and consequently extending the limitation period. Cause of action is a bundle of facts giving rise to a legal right; where in the present case the cause of action is the termination of the agreement, the First Debarment Order, and the memo dated 08.03.2016.” The Court further reproduced the High Court’s earlier observation that “It is not for the Court at this stage to speculate on the effect of the debarment already suffered by the petitioner on a tender process which is yet to happen. The issue as to whether or not the petitioner was correctly debarred as sought to be done in the present case is an issue which need not be decided in this application. Such issue is kept open.”

Background

The dispute arose from a public works tender floated on 04.12.2013 for strengthening a stretch of the Howrah‑Amta Road. The respondent contractor executed the agreement on 23.04.2014 with a completion date of 19.08.2014, failed to complete the work in time, and had its security deposit forfeited on 14.05.2015. Appellant No.4 (Superintending Engineer, PWD) issued a debarment order on 07.07.2015 (First Debarment Order) debarring the respondent for two years; that order was set aside by the High Court on grounds of lack of notice. A show‑cause notice of 18.09.2015 and a memo dated 08.03.2016 requesting appearance before the Debarment Committee followed and led to further debarment orders, including a decisive order dated 31.10.2017 (Underlying Debarment Order).

The respondent filed C.S. No. 102 of 2016 in the High Court at Calcutta challenging the memo and related debarment actions and sought interim reliefs. Several interlocutory orders issued by the Debarment Committee were set aside by the High Court for procedural lapses, and the respondent continued to press claims for losses said to arise from wrongful debarment. G.A. No. 173/2018, which challenged the Underlying Debarment Order, was disposed of on 24.01.2020 with the High Court keeping the question of correctness of debarment “open.” The respondent later sought to amend the plaint by G.A. No. 11 of 2022 to bring subsequent facts on record; the High Court allowed that application by the Impugned Order dated 08.01.2024. The State challenged that order before the Supreme Court.

The appellants contended that each subsequent debarment order gave rise to a fresh cause of action, that the proposed amendment was time‑barred under the Limitation Act even after COVID‑19 exclusions, that the first amendment application having been withdrawn precluded a second amendment under Order XXIII Rules 1 and 4 CPC, and that Section 80 notice was required. The respondent contended that all events constituted a continuous cause of action beginning with the memo dated 08.03.2016, that the High Court had kept the issue open by its order of 24.01.2020, and that the amendment was therefore within limitation and necessary for effective adjudication.

The Supreme Court found that the subsequent debarment orders were part of a continuous chain arising from the memo of 08.03.2016 and that adjudication of the plaint would be incomplete without the subsequent facts. The Court held that the Underlying Application for amendment was legally sustainable, was within limitation in view of the continuing cause of action, and that Section 80 did not apply to preclude the amendment. The appeal was dismissed and no costs order was made.

Case Details: Case No.: 2025 INSC 69 (Arising out of SLP (C) No. 11392 of 2024) Case Title: The State of West Bengal & Ors. v. PAM Developments Private Limited & Anr. Appearances: For the Petitioner(s): [Counsel not indicated in judgment] For the Respondent(s): [Counsel not indicated in judgment]