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2006 DIGILAW 636 (MP)

SHADAB GRIH NIRMAN SAHAKARI SANSTHA MARYADIT, BHOPAL v. PARITA GRIH NIRMAN SAHAKARI SAMITY MARYADIT, BHOPAL

2006-05-03

ARUN MISHRA, K.S.CHAUHAN

body2006
JUDGMENT : ARUN MISHRA, J.:- This appeal has been filed by Shadab Grih Nirman Sahkari Sanstha Limited, calling in question legality of an order dt. 5-10-2006 passed by the 6th Additional District Judge, Bhopal in Civil Suit No. 268-A/2006, thereby rejecting the plaint under Order 7 Rule 11, Civil Procedure Code on preliminary issues. 2. Plaintiff; Shadab Grih Nirman Sahkari Sanstha Limited filed a suit seeking declaration that the sale-deed dt. 2-12-2000 being void was not binding over the plaintiff. Alternatively, relief was prayed that consideration for which land was sold be ordered to be paid along with interest. Permanent prohibitory injunction was also claimed restraining the defendants from selling the constructed bungalows and further development activities. In addition prayer was also made for restoration of possession along with costs. 3. It is necessary to refer to the plaint averments in extenso for the reason that the plaint has been rejected at the threshold at the preliminary stage without filing of written statement. In the plaint it has been averred that the plaintiff was a registered housing construction co-operative society registered on 4-11-1982. The society owned 12 acres of land comprised in Survey No. 7/3/1, 7/3/2 and 7/3/3 to be sold to defendant No. 2 on 2-12-2000 consideration of Rs. 18 lakh was fixed. Consideration was agreed to be paid with the sale-deed by way of post dated cheques of Rs. 1 lakh each from 7-7-2001, on 7th of each succeeding month till 7-10-2002. For 7-9-2002 and 7-10-2002 post dated cheques in the sum of Rs. 2 lakh were issued. All the cheques were of Bhopal Co-operative Central Bank Limited, Branch Motia Park, Bhopal. In spite of several demands made by the plaintiff the cheques were not handed over nor sale consideration was paid in any other mode. The defendant No. 1 has defrauded the plaintiff. Defendant No. 1 has entered into an agreement with defendant No. 2 for development and construction over some part of the disputed land, remaining area was vacant. As consideration was not paid to plaintiff the sale-deed was illegal and void ab initio. Without payment of consideration it was not open to the defendant No. 1 to enter into an agreement with defendant No. 2 for developmental activities. The plaintiff has approached the Dy. As consideration was not paid to plaintiff the sale-deed was illegal and void ab initio. Without payment of consideration it was not open to the defendant No. 1 to enter into an agreement with defendant No. 2 for developmental activities. The plaintiff has approached the Dy. Registrar, Co-operative Societies by way of filing a dispute under section 64 of the M.P. Co-operative Societies Act on 24-6-2002 for declaring the sale-deed as void, registered as Case No. E-21/2002 it was dismissed for want of jurisdiction on 15-4-2004. A legal notice was served on 1-6-2005. Cause of action arose on 26-6-2002 when defendant No. 1 indicated inability to make the payment of consideration. Cause of action also arose on 15-4-2004 when dispute filed under section 64 was dismissed by Dy. Registrar for want of jurisdiction, further it arose on 12-6-2005 when defendant No. 2 published a notice for sale of bungalows constructed over the disputed land. Suit has been valued at Rs. 18 lakh. Ad valorem Court fee of Rs. 1,13,800/- has been paid for permanent injunction suit has been valued at Rs. 1,000-/-, ad valorem Court fee of Rs. 300/- was paid. 4. Earlier the matter has travelled to this Court when trial Court had directed the plaintiff to make payment of ad valorem Court fee on the valuation made on 18 lakhs as that was the valuation of the sale-deed. A Writ Petition - W.P. No. 3615/2006 was filed. Yet another writ petition - W.P. No. 4199/2006 was filed by the defendant assailing same order. Both the writ petitions were decided as per order dt. 20-5-2006. This Court held that since the plaintiff was party to the sale-deed, there was no misrepresentation to the contents of the sale-deed, as such plaintiff was required to make payment of ad valorem Court fee, that order was upheld as question of valuation for other reliefs was not gone into by the trial Court whether it was proper or not was left open to be decided by the trial Court along with question of limitation as that was raised for the first time in the writ petition by the defendants, it was to be decided by the trial Court if raised before it. 5. The defendants raised three objections before the trial Court. 5. The defendants raised three objections before the trial Court. Firstly that the valuation of the land was Eight Crore Forty Two Lakhs, on that ad valorem Court fee ought to have been paid as the plaintiff has claimed the relief of possession also. Houses have been constructed, thus, valuation has increased. Second objection was raised with respect to the suit being barred by limitation. The third objection as to the maintainability of the suit for want of serving notice to the Registrar under section 94 of the M. P. Co-operative Societies Act, 1960 (hereinafter referred to as the "Act") was also taken. 6. The trial Court as per the impugned order has upheld the aforesaid three objections raised by the defendants. It held that as the houses have been constructed land has been sold to several persons it was no more an agriculture land, thus, the plaintiff was required to make the payment of ad valorem Court fee on valuation of land. Sale-deed was executed on 2-12-2000. Suit could have been preferred within a period of 3 years from the date of execution of the sale-deed. The suit has been held to be barred by limitation. The trial Court has further held that no notice under section 94 of the M.P. Co-operative Societies Act was given to the Registrar, hence, the suit was not maintainable. As the plaint has been rejected, this appeal has been preferred. 7. Shri K. N. Fakhruddin with Shri Harvinder Singh learned counsel appearing on behalf of the plaintiff/appellant has submitted that these questions being mixed questions of law and facts could not have been decided at preliminary stage. They have relied upon the decision in Balasaria Construction (P) Ltd. vs. Hanuman Seva Trust and others, (2006) 5 SCC 658 . It was also submitted that there was proper valuation made of plaint as per the sale consideration of the sale-deed, even otherwise it was not possible to determine the present valuation as claimed by the defendants to be more than Eight Crores at this stage without recording the evidence. Thus, order passed by the trial Court demanding ad valorem Court fee as per the claim made by the defendants was not proper. It was further submitted that the consideration under the sale-deed itself required to be paid by way of post dated cheques subsequent to execution of the sale-deed. Thus, order passed by the trial Court demanding ad valorem Court fee as per the claim made by the defendants was not proper. It was further submitted that the consideration under the sale-deed itself required to be paid by way of post dated cheques subsequent to execution of the sale-deed. Sale-deed was executed on 2-12-2000 whereas the payment of sale consideration in instalments had to commence w.e.f. 7-7-2001 and to be completed by 7-10-2002. The suit was preferred on 23-6-2005. It was barred not limitation as the suit was filed within 3 years from the last date of instalment i.e. 7-10-2002. Apart from that it was submitted by learned counsel that as a dispute was filed under section 64 of the M.P. Co-operative Societies Act before the nominee of the Registrar and it was not entertained, and dismissed for want of jurisdiction as per the order dt. 15-4-2004, the plaintiff was entitled for exclusion of the said period by virtue of invoking section 14 of the Act. It was pursued bona fidely, diligently and was substantially for the same relief. Thus, the suit could not have been dismissed as barred by limitation. It was further submitted that requisite legal notice was served on 17-6-2005 as averred in paragraph No. 18 of the plaint. As notice was served and earlier a dispute was raised under section 64 of the Act, same dispute was raised for which notice was served and suit was instituted. Registrar had the full notice as such the purpose of section 94 stood served, thus, even otherwise the suit could not have been dismissed for want of serving notice under section 94. Apart from that it was not a dispute touching constitution, management or business of the society. Consequently, no notice under section 94 was required to be served on the Registrar. What was the business of the defendants society was also essentially a question of fact as such these questions could not have been decided, as preliminary issue. 8. Shri Ravindra Shrivastava, learned Sr. counsel appearing with Shri Ashok Lalwani and Shri Manoj Sharma controverted the aforesaid submissions. He has submitted that relief for possession has been sought knowing fully well that the houses have been constructed and other developmental activity has already taken place. Thus, it was incumbent to value the suit for possession on the basis of present value of the land. counsel appearing with Shri Ashok Lalwani and Shri Manoj Sharma controverted the aforesaid submissions. He has submitted that relief for possession has been sought knowing fully well that the houses have been constructed and other developmental activity has already taken place. Thus, it was incumbent to value the suit for possession on the basis of present value of the land. The land was no more an agriculture land. Its present valuation was not less than 8 crores, as such plaintiff ought to have paid ad valorem Court fee at that valuation. Suit was filed essentially for a declaration that the sale-deed was void ab initio. Thus, limitation would commence under Article 59 or Article 113 from the date of its execution, not at any subsequent point of time. He has relied upon decisions in Ramti Devi (Smt.) vs. Union of India, (1995) 1 SCC 198 , Prem Singh and others vs. Birbal and others, (2006) 5 SCC 353 and Sukaloo and anr. vs. Punau, AIR 1961 MP 176 . He has further submitted that the notice as envisaged under section 94 of the Act is with respect to the suit not for filing a dispute under section 64 and suit filed was with respect to the business of the defendant society. Hence, it was necessary to serve a notice on the Registrar, for that he has placed reliance on a Division Bench decision of this Court in Chhotelal Hanumanprasad Gupta vs. Deputy Registrar, Co-operative Societies Indore and others, 1976 JLJ Short Note 53. Thus, the learned Sr. counsel has submitted that after reading the plaint in its entirety no case for interfering in the order was made out. 9. First we advert to the question of payment of Court fee : Earlier the matter has travelled to this Court, this Court held in W.P. No. 3615/2006 and W.P. No. 4199/2006 as per order dt. 20-5-2006 that ad valorem Court fee was required to be paid at Rs. 18 lakh, the valuation of the sale-deed. If it was a case that valuation of the land had increased to Rs. 8 crores approximately and it was necessary to make the payment of Court fee for possession. It appears prima facie that ad valorem Court fee paid as per valuation of the sale-deed was enough. 18 lakh, the valuation of the sale-deed. If it was a case that valuation of the land had increased to Rs. 8 crores approximately and it was necessary to make the payment of Court fee for possession. It appears prima facie that ad valorem Court fee paid as per valuation of the sale-deed was enough. Valuation at present whether it was 8 crores was a question of fact, it could not have been decided as preliminary issue. Trial Court has to decide such question of valuation not as preliminary issue if it is raised, in written statement it would be adverted to only at the time final decision after recording evidence. 10. Coming to the question of limitation, in our considered opinion, this question being mixed question of law and fact could not have been decided as a preliminary issue, in the peculiar facts and circumstances of the case considering the nature of transaction, as per the plaint the sale consideration was not to be paid at the time of execution of sale-deed on 2-12-2000. The sale consideration was required to be paid w.e.f. 7-7-2001 on 7th day of each of succeeding month by way of post dated cheques. Instalments were to be over on a subsequent date on 7-10-2002. Thus, it was not possible for the plaintiff as per the plaint averments if averments are taken to be correct, to know that intention of the defendants was not to make the payment in future in instalments and it is not the case that even in the case of default of one instalment entire amount became recoverable at once. Thus, prima facie the suit was filed within a period of 3 years from the date of last instalment and dates of several instalments fell within the zone of 3 years. We hold that it was not proper for the trial Court to dismiss the suit as barred by limitation at threshold under Order 7 Rule 11 of the Civil Procedure Code. Apart from that may be for the first time plea has been raised for invoking section 14 of the Limitation Act, it is apparent from averments made to the plaint that the dispute for declaring the sale-deed as void was raised before the Registrar, Co-operative Societies, it was dealt with by Dy. Apart from that may be for the first time plea has been raised for invoking section 14 of the Limitation Act, it is apparent from averments made to the plaint that the dispute for declaring the sale-deed as void was raised before the Registrar, Co-operative Societies, it was dealt with by Dy. Registrar, the nominee of the Registrar, the period spent in proceedings under section 64 was claimed to be excluded for considering the aforesaid plea also, it was necessary to record the evidence, consider the pleadings made in the application filed under section 64 of the Act, the issues involved and the order passed in the dispute under section 64. It was also to be considered whether such a dispute was raised bona fidely and perused with due diligence and good faith. All these questions being mixed questions of law and fact could not have been decided by way of preliminary issues, thus, we have no hesitation in setting aside the dismissal of the suit as barred by limitation and we direct the trial Court to decide the question of limitation also after recording evidence at the time of final hearing. The Apex Court in Balasaria Construction (P) Ltd. vs. Hanuman Seva Trust and others (supra) has laid down that the words "barred by any law" in Rule 11(d) of Order 7, Civil Procedure Code would also include barred by the law of limitation. The Apex Court has held that the suit cannot be dismissed as barred by limitation without proper pleadings, framing of issue of limitation and taking of evidence. Question of Limitation is a mixed question of law and fact and ex facie on reading of the plaint, suit cannot be held to be barred by limitation. Shri Ravindra Shrivastava, learned Sr. The Apex Court has held that the suit cannot be dismissed as barred by limitation without proper pleadings, framing of issue of limitation and taking of evidence. Question of Limitation is a mixed question of law and fact and ex facie on reading of the plaint, suit cannot be held to be barred by limitation. Shri Ravindra Shrivastava, learned Sr. counsel has relied upon the decision of the Apex Court in Ramti Devi (Smt.) vs. Union of India (supra) in which the sale-deed was executed by the defendant to discharge pre-existing debts and got registered and came to the knowledge of the plaintiff on the same day, suit for declaration that the plaintiff was the owner of the house and that the said sale deed, having been executed to stifle the proposed prosecution of the defendant, was void and not binding on the plaintiff, filed beyond three years from the date of execution/registration of the sale-deed, was held to be barred by limitation applying the Article 59 of the Limitation Act. Facts are quite different in the instant case. In the said case cause of action had accrued on date of execution of sale-deed itself. Here there are two other question, as per plaint, consideration was agreed to be paid later in instalment and relief has been claimed for payment of sale consideration along with interest. The sale consideration was payable in monthly instalments. Payment of sale consideration in an instalment had to commence after six months of execution of the sale-deed. Thus, prima facie limitation could not have been computed w.e.f. 2-12-2000, the date of execution of the sale-deed, but, after defaults were made cause of action accrued as per the plaint due to non-payment of sale consideration on a future date. It is not a case of fraud played while getting the sale-deed executed or a case of impersonation. Thus, the facts are different in the instant case. In Prem Singh and ors. vs. Birbal and others the Apex Court has dealt with Article 59 with reference to void and voidable transactions as referred in section 31 of the Specific Relief Act, 1963, dealing with cancellation of documents. Thus, the facts are different in the instant case. In Prem Singh and ors. vs. Birbal and others the Apex Court has dealt with Article 59 with reference to void and voidable transactions as referred in section 31 of the Specific Relief Act, 1963, dealing with cancellation of documents. When a document is valid, no question arises of its cancellation when a document is void ab initio, a decree for setting aside the same would not be necessary as the same is non-est in the eye of law, as it would be a nullity. However, a suit is filed by a plaintiff for cancellation of transaction, it would be governed by Article 59. Even if Article 59 is not attracted, the residuary Article would be applicable. Article 59 would apply to such case of instruments. It would, therefore, apply where a document is prima facie valid. It would not apply only to instruments which are presumptively invalid. In the instant case in view of peculiar transaction as set out in plaint we find that there is mixed question of law and fact to be decided when limitation envisaged under Article 59 commenced. Article 59 reads thus: Description of suit Period of limitation Time from which period begins to run 59. To cancel or set aside an instrument or decree or for the rescission of a contract Three years When the facts entitling the plaintiff to have instrument or decree cancelled or set aside or the contract rescinded first become known to him. The limitation under Article 59 of the Limitation Act begins to run when the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded first became known to him. As already mentioned by us in the instant case consideration was agreed to be paid as per plaint on subsequent dates running w.e.f. 7-7-2001 to 7-10-2002. Thus, the correctness of the aforesaid averment is a question which has to be gone by the Court-below after recording evidence. Thus, applicability of Article 59 has to be decided in the context whether the consideration became payable on the date of execution of the sale-deed itself or on subsequent date as mentioned in the plaint. Thus, the correctness of the aforesaid averment is a question which has to be gone by the Court-below after recording evidence. Thus, applicability of Article 59 has to be decided in the context whether the consideration became payable on the date of execution of the sale-deed itself or on subsequent date as mentioned in the plaint. There is no dispute with proposition laid down by the Apex Court, we respectfully follow it, but, such a question depends on investigation of facts, correctness of averments made in the plaint. Thus, this question has to be decided at a subsequent, i.e. final stage being mixed question of law and fact not as a preliminary issue. 11. Coming to the question of want of notice and consequently maintainability of suit : Section 94 of M.P. Co-operative Societies Act envisages a notice to be served on the Registrar, Co-operative Society in order to institute a suit against a society or any of its officer. We set aside dismissal of the suit for want of notice on several grounds. Firstly there is an averment made in paragraph 18 of the plaint that requisite legal notice was served on 17-6-2005. Trial Court has ignored this as per and the averment made in paragraph 18. Secondly, if it was disputed that requisite legal notice was not given. This being mixed question of law and fact whether requisite legal notice was given or not, could not have been decided as a preliminary issue. Thirdly, it has to be gone into what is the business of defendant society. There is no averment made in the plaint with respect to business of defendant No. 1, its bye-laws, if any, or purpose of establishment is not on record. This being position the question could not have been adverted to as a preliminary issue. It was also necessary to consider whether the suit filed was with respect to the business of the society defendant No. 1. Further question was required to be gone into whether the suit filed for payment of consideration, declaring the sale-deed to be void, payment of consideration, restoration of possession, was within the realm of constitution, management or business of the society for which notice under section 94 was mandated. These questions could not have been decided as a preliminary issue as it was averred in the plaint paragraph No. 18 that requisite notice was given. These questions could not have been decided as a preliminary issue as it was averred in the plaint paragraph No. 18 that requisite notice was given. However, we leave it appropriate to place on record, decisions cited at bar. Shri Ravindra Shrivastava, Sr. counsel has referred to the decision of the Division Bench of this Court in Chhotelal Hanumanprasad Gupta vs. Deputy Registrar, Co-operative Societies (supra) in which it has been laid down that the main purpose behind notice required to be given under section 94 of the Act is that the Registrar has supervisory powers over the Society and with a prior notice being given to the Registrar, it may be possible for the Registrar in exercise of the supervisory jurisdiction to ensure that a rightful claim is settled and is not required to be taken needlessly to a Civil Court entailing avoidable expenditure of the Society. In our opinion also, apparently, it is with this object in view that section 94 of the Act has been enacted. Notice was required to be given for filing civil suit not to raise the dispute referred in section 64 of the Act. In the instant case the Registrar was approached under section 64, prima facie for same kind of dispute, as averred in the plaint for declaration of the sale-deed to be void, nominee of the Registrar under section 64 had passed an order in the year 2004 holding that the kind of dispute raised was not maintainable before it. Plaintiff was required to approach the Civil Court. This question was also required to be gone into by the trial Court whether the Registrar was already apprised of the dispute to be raised in the suit by filing a dispute under section 64 of the Co-operative Societies Act and an order was passed to approach the Civil Court whether intendment of section 94 stood fulfilled by that or not. In Secretary, M. P. Rajya Hath Kargha Bunker Samiti, (Maryadit), Gopalbagh, Jabalpur and another vs. Kapoorchand and another, 1977 (1) MPWN 17, the expression "act" was an act "Touching the business of the society", section 94 came for consideration, this Court has held that this has to be gone into what, was the 'business' of the society, refusing to vacate was not touching the business of the society. In our opinion, such a question being of fact has to be decided not as an preliminary issue, in the instant case it could have been decided merely by the help of plaint averments. In Pahad Singh vs. Smt. Rajkumari Dubey, 1996 RN 104 requirement of notice was considered. There was dispute regarding boundary line between two plots holders, suit was not against the society or its officer, it was held that notice before filing of the suit was not necessary. As we find as per the averments made in the plaint, notice was served, Registrar was approached, it was not proper for the trial Court to dismiss the suit at threshold on the aforesaid ground treating it as a preliminary issue. Trial Court is directed to decide the issue, at a later stage of final decision, question whether notice was served if not what prejudice was caused. The defect of notice if any could not have been gone into at a preliminary stage, such question ought to be decided at the time of final decision of the case after recording the evidence. 12. Resultantly, we allow the appeal, set aside the impugned order. We make it clear that any observation made by us in this order shall not come in the way of the trial Court at the time of final decision as we have not expressed any final opinion on the issues. These are required to be considered in the light of the evidence adduced by the parties independently by the trial Court in accordance with law unfettered by any of the observations made by us. 13. Prayer has been made to refund the Court fee as suit was decided on preliminary point and we have directed the trial Court to decide the case on merit. Requisite certificate be issued of refund of the Court fee paid by the appellant as provided in section 13 of the Court Fees Act read with Order 41 Rule 23 of the Civil Procedure Code. 14. Appeal is allowed, no order as to costs.