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1995 DIGILAW 272 (BOM)

Dugal Projects Development Company Private Ltd. v. Zanem Loximan Naik w/o of late Loximan Monju Naik and others

1995-04-26

E.S.DA SILVA

body1995
JUDGEMENT - Dr. E.S. DA SILVA, J. :---Appellants are the plaintiffs who are challenging the dismissal of their suit for specific performance of an Agreement for sale purportedly executed by them with the respondents solely on the point of limitation and without recording any evidence. 2. It is the case of the appellants that they have executed the said Agreement with the respondent No. 1 and her husband as vendors on August 17, 1981. Clause 5 of the Agreement provides that the sale shall be completed/executed within a period of 6 months from the execution of the Agreement when upon payment of the balance of money the vendors shall produce all necessary parties required by law and execute a proper conveyance of the properties. Clause 7 lays down that if the vendors fail to execute the sale deed within the prescribed time the vendors shall be liable to pay the purchaser double the amount of earnest money. There is however a rider in this clause according to which in such cases the purchaser shall be at liberty to give further extension to complete the sale. Two more clauses in the Agreement are relevant in this regard. In Clause 3 it has been stated that the vendors shall within 30 days from the execution of the Agreement deliver or produce or cause to be produced all the title deeds of or relating to the said properties to the purchasers' legal adviser along with the certificates of clear title. Clause 4 reads that the vendors shall make out a marketable title to the properties free from all reasonable doubt and shall at their own cost clear all defects in the title, encumbrances and claims on or to the said properties including all claims by way of exchange, mortgage, etc. It is further the case of the appellants that pending the execution of the sale the respondent No. 1's husband expired. Respondent Nos. 2 to 12 are the successors/legal representatives of the deceased husband of respondent No. 1. It is further the case of the appellants that pending the execution of the sale the respondent No. 1's husband expired. Respondent Nos. 2 to 12 are the successors/legal representatives of the deceased husband of respondent No. 1. In terms of Clause 5 of the Agreement the sale should have been completed within a period of six months from its execution and upon payment of the balance money but due to the death of the late husband of respondent No. 1 and pursuant to the option given to the appellants to extend the time for completing the sale, the sale deed could not be executed within the prescribed time. The appellants stated that the respondent No. 1 or her husband were also not able to produce the title deed or the marketable title which they were required to make available for the purpose of execution of the conveyance within the period of six months and when approached by the appellants they contended that since the husband of respondent No. 1 was seriously ill he was not in a position to attend the office of the Sub-Registrar in order to make investigations regarding the title documents. Therefore and on account of the difficulties represented by the respondents the appellants exercised their option to extend the time till the husband of respondent No. 1 could recover from his illness. It so happened however that the respondent No. 1's husband ultimately expired on February 28, 1982, and therefore at the request of respondent No. 1 the appellants again granted her extension of time for the execution of the sale deed. This second extension was sought by respondent No. 1 on the ground that after the death of her husband there was no proper co-ordination between all the respondents for fixing a common date for execution of the deed and that there have been differences between deceased male and female issues of both the original respondents regarding the amounts to be received towards their respective shares in the estate of their late father. The appellants stated that after keeping a long wait to enable the respondents to sort out their difficulties the appellants decided to give a final date to them to execute the sale deed till June 28, 1985. The appellants stated that after keeping a long wait to enable the respondents to sort out their difficulties the appellants decided to give a final date to them to execute the sale deed till June 28, 1985. In this connection the appellants wrote a letter to respondent No. 1 on June 4, 1985 calling upon her to attend the office of the appellants so as to finalize the exact date of the execution of the sale deed by her and other respondents as per the draft of the deed already approved by her and her late husband. However, since the respondents neither remained present in the appellants' office nor did they intimate the date for execution of the sale deed the suit for specific performance was filed against them. 3. The suit was resisted by the respondents who is their written statement raised several defences being one of them regarding the point of limitation. The trial Court tried the issue as a preliminary issue and after hearing both the parties held, solely basing its decision upon Clause 5 of the agreement and without considering the Clause 7, that the suit had been instituted beyond the period of limitation prescribed under Article 54 of the Schedule to the Limitation Act. 4. Several contentions were raised by the learned Counsel across the Bar and a number of judgments were relied before me in support of their rival stands on the matter. I am however satisfied that none of these decisions are required to be gone through for the purpose of determining the real issue in controversy which in my view narrows down to the question of finding out whether the agreement dated August 17, 1981, stipulates a fixed period of time for its performance or Clause 5 of the agreement is to be read alongwith its Clauses 7 and 8 and according to which an option has been given to the parties to extend the period of such performance in certain cases and/or circumstances. 5. Mr. 5. Mr. Thali, learned Counsel for the appellants, has submitted that the trial Court although had come to the conclusion that the issue of limitation was to be tried after the recording of evidence and therefore could not be decided without such evidence having been brought home has however somersaulted to the extent that inspite of this observation the decision on the point of limitation was arrived at by the learned Civil Judge without affording to the appellants any opportunity to lead evidence in support of their plea that the time period for the performance of that agreement had been extended in view of the reasons pleaded by the respondents. Another grievance made by the learned Counsel is that the impugned decision was given by the learned Judge on points not argued at the Bar which obviously could not be adjudicated without the parties having been afforded an opportunity to address the Court on the same. 6. There is indeed a valid point in the submissions of the learned Counsel but before I advert to the legal submissions advanced by Mr. Thali some relevant dates may be usefully recorded. Admittedly, the purported agreement of sale was executed between the appellants and respondents on August 17, 1981. In the said agreement a period of six months was stipulated for its performance which ended on February 16, 1982. Thereupon the death of respondents No. 1's husband occurred on February 28, 1982, that is to say, a few days after the completion of the aforesaid period of six months. The letter/notice addressed by the appellants to respondent No. 1 fixing a final date for performance of the agreement is dated June 4, 1985, wherein the appellants have informed the respondents that the deed should be executed without fail on or before June 28, 1985. The suit was actually filed only on August 9, 1985. 7. In their pleadings the appellants have contended that the initial extension following the agreement was allowed on account of the request made by the respondent No. 1 who had alleged that her husband was very seriously ill and was not therefore in a position to make available the necessary documents and comply with the requirements of Clauses 3 and 4 of the agreement so as to enable the parties to finalize the deed of conveyance. It was further contended by the appellants that subsequent to the death of the husband of respondent No. 1 this period had to be again extended due to the fact that the respondents No. 1 and the legal heirs of the deceased original respondent No. 2 had represented that there was no proper co-ordination between all of them for fixing a common date and also there were differences between male and female issues regarding the amounts to be received towards their respective shares in the estate of their late father. Indeed the respondents in their written statement have denied all these allegations made by the appellants but the fact remains that in view of this denial and consequent upon the circumstance of the trial Court having framed the issue of limitation raised by the respondents who alleged that the suit had been instituted beyond three years from the period of six months stipulated in Clause 5 of the agreement for its performance, the learned Judge was expected to give to the appellants sufficient opportunity to lead evidence and get the facts which were pleaded duly substituted. This much appears to have been acknowledged by the learned Judge in his order wherein it has been observed that the issue of limitation could not be decided without leading evidence. 8. This being the position it is difficult to appreciate as to how and why the learned Judge chose not to consider the necessity of recording any evidence and instead opted to decide the issue by looking into the same on some aspects which had not been argued by the parties across the bar and without affording to them an opportunity to address the Court in this regard. Thus the stand taken by the learned Judge seems to have clearly violated the principles of natural justice in this case being also in breach of considerations of fairness and propriety. 9. There cannot be too much dispute that if the learned Judge has taken into consideration Clause 7 of the agreement which gives to the purchaser an option to extend the time period fixed for the performance of the agreement in favour of the vendor obviously the cause of action for filing of the suit would have commenced from the date of expiry of such extension. Thus the period of three years prescribed in the Limitation Act could have started only from the date such extension was to expire. The learned Judge appears to have totally overlooked this important aspect of the case when he decided to adjudicate the issue of limitation without considering any evidence which the appellants might be willing to lead in support of their case for extension which was granted by the respondents in terms of Clause 7 irrespective of the denial on the part of the respondents that such extension was neither sought for by them nor granted by the respondents. The learned Judge was also not justified in observing that the granting of the extension would amount to defeat the statutory provision of the Limitation Act inasmuch as it would be intended to enlarge the period of limitation stipulated in its section 54. It is thus obvious that the learned Judge did not realize that the question of limitation would arise only in case the appellants were not able to succeed in their attempt to show that the period of performance had been validly extended by them in favour of the respondents. For that purpose the appellants were expected to lead evidence to substantiate their case. By denying to them an opportunity to adduce such evidence obviously serious prejudice has been caused to them thus leading to miscarriage of justice. The appellants have prayed that the matter should be remanded to the trial Court in order to enable them to lead such evidence and make out their case of extension. In my view the prayer appears to be justified and well-conceived irrespective of the merits of the evidence which the appellants may be able to bring home before the trial Court in support of their plea for extension. This is a matter to be considered and adjudicated by the trial Court itself on its merits and whatever observations on the point made in this judgment should not come on the way or influence the decision of the Court while assessing the evidence which the appellants propose to produce before it. 10. In the result this appeal is to succeed being therefore bound to be allowed. The Order of the Civil Judge, Senior Division, Margao, dated April 17, 1990, is quashed and set aside. 10. In the result this appeal is to succeed being therefore bound to be allowed. The Order of the Civil Judge, Senior Division, Margao, dated April 17, 1990, is quashed and set aside. The case is remanded to the trial Court with a direction that the issue of limitation be re-heard and sufficient opportunity be given to the parties to lead evidence in this regard. In view of the fact that this is an old suit instituted about ten years ago the learned Judge is requested to see to it that the same should be disposed of as expeditiously as possible. There will be, however, no order as to costs. Appeal allowed.