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2008 DIGILAW 812 (CAL)

Jayanta Kumar Bose v. Swapan Kumar Saha

2008-08-11

DIPANKAR DATTA, S.S.NIJJAR

body2008
Judgment :- SURINDER SINGH NIJJAR, CJ. (1) THE Judgment of the Court was delivered by this appeal has been filed by the defendants in C. S. No. 248 of 2006 challenging the judgment and order passed by the learned single Judge dated 22nd January, 2008 whereby two applications filed by them seeking dismissal of the suit on the ground of limitation have been dismissed. (2) THE suit was filed claiming specific performance of an agreement, as recorded in agreement dated 23rd September 1988, by directing the defendants to execute and register the appropriate conveyance in favour of the plaintiff. The claim put forward by the plaintiff is that the defendants through defendant No. 1 entered into negotiation with regard to the sale of suit premises fully described in the plaint. Pursuant to the negotiations on or about 2nd August, 1988 an agreement was entered into between the parties whereby the defendants agreed to sell and the plaintiff agreed to purchase the suit premises on certain terms and conditions. Brief summary of the relevant conditions is as under: (1) The defendants shall sell the said premises to the plaintiff at or for the total consideration of Rs. 26,70,000/-only free from all encumbrances whatsoever but subject to the existing tenants. (2) Out of the total consideration the plaintiff shall pay a sum of rs. 3,70,000/- as and by way of earnest money and/or part consideration and the balance consideration money shall be paid at the time of completion of the transaction. (3) The vendor shall within three days hereof deliver all original title deeds to the Advocate of the purchaser for investigation of title and undertakes to deduce a marketable title to the property at the own cost. (4) Subject to the vendors making out a marketable title to the said premises, the purchase shall be completed within 6 months from the date of the agreement or within such extended time as may be agreed upon between the parties. (5) The vendors shall obtain all such permissions as are necessary under. the law for transferring the said premises to the plaintiff including "no objection certificate" under section 269ul of the Income Tax Act, 1961 and shall produce the same for the inspection of the purchasers advocates at least 2 weeks before completion of the transaction. (5) The vendors shall obtain all such permissions as are necessary under. the law for transferring the said premises to the plaintiff including "no objection certificate" under section 269ul of the Income Tax Act, 1961 and shall produce the same for the inspection of the purchasers advocates at least 2 weeks before completion of the transaction. (6) The vendors shall obtain necessary clearance certificate under section 230a of the Income Tax Act, 1961 and shall produce the same for the inspection of the purchasers advocates at least 2 weeks before completion of the transaction. (3) IT is the case of the plaintiff that the defendants failed to obtain no objection Certificate from the Income Tax Authorities under sections 269 ul and 230a of the Income Tax Act, 1961. In fact, the Income Tax Authorities had served, a notice dated 22nd November, 1988 on the defendants as well as the plaintiff informing them about an order of purchase of the suit premises under section 269ud (1) of the Income Tax Act, 1961. (4) THE plaintiff challenged the aforesaid notice by filing a Writ Petition no. 6338 of 1988. In this writ petition an order was passed on 2nd December, 1988 restraining the plaintiff and the defendants from taking any further steps. The order also restrained the Income Tax Authorities from proceeding under the impugned notice. Defendant No. 4, being Respondent No. 7 in the writ petition filed affidavit-in-opposition and contended that his father being defendant No. 1 was not competent to act as his guardian. Defendant No. 4 also instituted a suit against the plaintiff and defendants No. 1, 2 and 3 challenging the enforcement of the agreement for sale. That suit was dismissed on 19th June, 2000. The writ petition filed by the plaintiff was allowed by order dated 7th April, 2006. However, liberty was granted to the Income Tax authorities to issue fresh notice of hearing to the parties and to reconsider the matter and to pass appropriate orders. Thereafter, upon hearing the parties, the Income Tax Authorities granted the No Objection Certificate on 30th August, 2006. In the meantime, another suit had also been instituted on 27th March, 1989 claiming specific performance of a prior agreement to sell dated 3rd September, 1984. In this suit the plaintiff as well as the defendants were impleaded as parties. That suit was ultimately dismissed on 4th September, 2002. In the meantime, another suit had also been instituted on 27th March, 1989 claiming specific performance of a prior agreement to sell dated 3rd September, 1984. In this suit the plaintiff as well as the defendants were impleaded as parties. That suit was ultimately dismissed on 4th September, 2002. During the pendency of this suit injunction order granted in March, 1996 restraining the defendants from selling the said premises to the plaintiff had remained in force. The appeal against the order of dismissal was also dismissed by the Division Bench on 16th June, 2005. During the end of January, 2006 the Special Leave Petition preferred by the plaintiff therein was also dismissed by the Supreme Court. The plaintiff, thereafter, by a letter dated 7th September, 2006 sent a draft sale deed for approval of the defendants so that the same may be executed. Service of this letter was refused by the defendants. This was treated as repudiation by the plaintiff of the agreement to sell the suit premises. Thus, the plaintiff filed the suit on 21st September, 2006. In the plaint in paragraph 24 it is categorically stated as follows : "24. In view of the statements made hereinabove, no part of the plaintiffs claim is barred by the laws of limitation. " (5) AT that stage, the appellants took out the applications for dismissal of the suit. The claim put forward by the defendants is that the plaintiff has allowed the agreement to become unenforceable for 18 years. The plaintiff failed to express any desire to enforce the agreement and is an opportunist person. It is stated that there was no injunction against the plaintiff to perform the agreement and having failed to complete the transactions within 6 months the agreement became unenforceable. The provisions contained in section 269 UD of the Income Tax Act, 1961 was declared ultra vires in the year 1994. It is further pleaded that even otherwise the plaintiff had agreed to purchase the property with the existing tenant therein. The tenant had filed a suit in which the plaintiff never took any steps for its disposal. The plaintiff only stood by and watched the proceedings. It was pleaded that the suit is clearly vexatious and deserves to be dismissed at the threshold. The tenant had filed a suit in which the plaintiff never took any steps for its disposal. The plaintiff only stood by and watched the proceedings. It was pleaded that the suit is clearly vexatious and deserves to be dismissed at the threshold. (6) LEARNED single Judge has dismissed the applications with the observations that the only ground urged on behalf of the defendants No. 1, 2 and 3 is the ground of limitation. The Trial Court has also concluded that the vendors were required to make out a marketable title but due to various orders of injunction till 2006, the vendors had not been able to make out a marketable title. This conclusion of the learned Trial Court is based upon due consideration of the facts noticed by us above. (7) WE have heard the learned counsel for the parties. Very lengthy submissions have been made by the learned counsel. Mr. Hirak Mitra, learned counsel appearing for the appellants, submitted that the cause of action had accrued to the respondents on a number of occasions. The plaintiff could have taken steps to have the writ petition dismissed when the Supreme Court had declared the provision of section 269 UD of the Income Tax Act as ultra vires. The plaintiff cannot be permitted to take any advantage of the restraint orders passed in the writ petition No. 6388 of 1988, as it had been filed by him. Learned counsel also submitted that even otherwise, the injunction orders relied upon by the respondent are not the kind of injunction orders contemplated under section 15 of the Limitation Act. According to the learned counsel, the learned single Judge has erroneously held that even an order of injunction by implication is contemplated under section 15. In support of these submissions the learned counsel relied on :- 1. Siraj-ul-Haq Khan and Ors. v. The Sunni Central Board of Waqf U. P. and ors. , reported in AIR 1959 SC 198 2. Balasaria Construction (P) Ltd. v. Hanuman Seva Trust and Ors. reported in (2006) 5 SCC 658 3. Popal and Kotecha Property v. State Bank of India Staff Association, reported in (2005) 7 SCC 510 4. T. Arivandandam v. T. V. Satyapal and Anr. , reported in AIR 1977 SC 2421 5. N. V. Srinivasa Murthy and Ors. v. Mariyamma (Dead) by proposed L. Rs. and Ors. reported in (2006) 5 SCC 658 3. Popal and Kotecha Property v. State Bank of India Staff Association, reported in (2005) 7 SCC 510 4. T. Arivandandam v. T. V. Satyapal and Anr. , reported in AIR 1977 SC 2421 5. N. V. Srinivasa Murthy and Ors. v. Mariyamma (Dead) by proposed L. Rs. and Ors. , reported in AIR 2005 SC 2897 . 6. Md. Akhtar Hossain v. Suresh Singh and Ors. reported in AIR 2004 calcutta 99. (26 and 27) 7. Jaswant Rai Harbans Rai v. Dogar Mal Jawahar Mal and Ors. reported in AIR 1968 Punjab 509. (8) THEREFORE, according to learned counsel Mr. Hirak Mitra, the period upto 2006 cannot be excluded under section 15 of the Limitation Act. (9) ANSWERING submissions made by learned counsel for the appellants, mr. Chatterjee submits that appellants were parties to the writ petition. The writ petition could have been dismissed at their instance also. Therefore, the appellants were equally responsible for continuance of the injunction orders. Learned counsel also pointed out that the other injunction orders continued till 7th April, 2006. No Objection Certificate was issued on 30th August, 2006. Thereafter, within 8 days, i. e. , on 7th September, 2006 advocate of the plaintiff sent a draft sale deed for approval of the defendant. Learned counsel also submitted that before the Income Tax authorities the appellants accepted that there was a binding agreement to sell which was enforceable. They could easily have denied the execution of the agreement even in the writ proceedings which would have put an end to the notice issued by the Income Tax authorities under section 269 UC (1). Learned counsel further submitted that since the appellants had failed to make out a marketable title the sale obviously could not be completed. In support of these submissions learned counsel relied on Sirqj-ul-Haq Khans case (supra), which has also been relied upon by the counsel for the appellants. Thereafter, by relying on the judgment of the Supreme Court in the case of Balasaria Construction (P) Ltd. (supra), learned counsel submitted that the learned single Judge has correctly rejected the application of the appellants as in the present case it cannot be held even on a critical examination of the plaint that the suit is barred by limitation. (10) MR. (10) MR. Basu, learned counsel appearing for the defendant No. 4, submitted that the injunction referred to in section 15 of the Limitation Act relates only to order of the Court. Between 1992 to 1996 there were no such orders of injunction. The plaintiff still took no steps to seek performance of the agreement. In such circumstances, the suit, according to learned counsel, is barred by limitation. (11) WE have considered the submissions made by learned counsel for the parties. We are unable to accept the submissions made by learned counsel on behalf of the appellants. It is evident that till 7th April, 2006 when the order dated 02. 12. 1988 was vacated it was impossible for the defendants to make out a marketable title. We are also unable to accept the submissions made by the learned counsel that the injunction orders granted in various proceedings would not fall within the ambit of section 15 of the Limitation act. The order dated 02. 12. 1988, passed in Writ Petition No. 6388 of 1988 was that :- "neither the petitioner nor the respondents Nos. 4 to 7 will be entitled to take any further steps in the matter until further orders of the court. " We fail to see what could be more categorical than this order which is in the nature of a status quo order. All parties had been restrained from taking any further steps in the matter. (12) IN our opinion, the observations made in Sirqj-ul-Haq Khans case (supra) would not preclude the plaintiff from the benefit of section 15, in the facts and circumstances of this case. We may notice here the observations made by the Supreme Court which are as under: - " (19). . . . . . It is plain that, for excluding the time under this section, it must be shown that the institution of the suit in question had been stayed by an injunction or order; in other words, the section requires an order or an injunction which stays the institution of the suit. And so in cases falling under section 15, the party instituting the suit would by such institution be in contempt of Court. If an express order or injunction is produced by a party that clearly meets the requirements of section 15. And so in cases falling under section 15, the party instituting the suit would by such institution be in contempt of Court. If an express order or injunction is produced by a party that clearly meets the requirements of section 15. Whether the requirements of section 15 would be satisfied by the production of an order or injunction which by necessary implication stays the institution of the suit is open to argument. We are, however, prepared to assume in the present case that section 15 would apply even to cases where the institution of a suit is stayed by necessary implication of the order passed or injunction issued in the previous litigation. . . . . . . . . . " (13) IN our opinion, the learned single Judge has correctly construed the aforesaid observations of the Supreme Court. The Supreme Court had proceeded on the assumption in that case that section 15 would apply even to cases where the institution of a suit is stayed by necessary implication of the order passed or injunction issued in the previous litigation. However, in the facts and circumstances of that case it was observed that filing of the subsequent suit would not have been inconsistent with the order passed in the previous litigation. In other words, by filing the subsequent suit the party instituting the suit would not, by institution, be in contempt of Court. We are unable to reach such a clear cut conclusion in the facts of this case at the very initial stage of the proceedings in the suit. (14) IN the case of Jos want Raiharbansrai (supra), the Punjab and Haryana high Court has also come to the conclusion that since there was no clear-cut order of injunction, section 15 of the Limitation Act would not be applicable. This judgment, in our opinion, is of no assistance to the appellants as clearly the plaintiff could not have filed the suit till the final outcome of the writ petition in which the issuance of a notice by the Income Tax Authority under section 269 UC (1) had been challenged. The aforesaid proceedings did not terminate till 7th April, 2006. (15) IN the case of Popat and Kotecha Property (supra), the Supreme Court has clearly laid down that The real object of Order 7 Rule 11 of the Code is to keep out of Courts irresponsible law suits. The aforesaid proceedings did not terminate till 7th April, 2006. (15) IN the case of Popat and Kotecha Property (supra), the Supreme Court has clearly laid down that The real object of Order 7 Rule 11 of the Code is to keep out of Courts irresponsible law suits. " In paras 20 and 23, the Supreme court observed as follows :- "20. 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 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. 23. Rule 11 of Order 7 lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement. Instead, the word "shall" is used clearly implying thereby that it casts a duty on the Court to perform its obligations in rejecting the plaint when the same is hit by any of the infirmities provided in the four clauses of rule 11, even without intervention of the defendant. In any event, rejection of the plaint under Rule 11 does not preclude the plaintiffs from presenting a fresh plaint in terms of Rule 13. " (16) WE are of the considered opinion that these observations would not be applicable in the facts of the present case. In the case of T. Arivandandam (supra) the Supreme Court was dealing with the case of exceptional circumstances which impelled the Supreme Court to pithily observe at the very beginning of the judgment as follows :- "the pathology of litigative addiction ruins the poor of this country and the Bar has a role to cure this deleterious tendency of parties to launch frivolous and vexatious cases. " (17) THEREAFTER, the Supreme Court narrated the sorry story of a long drawn-out series of legal proceedings revealing how the father of the petitioner contested an eviction proceeding, lost it, appealed against it, lost again, moved a revision only to be rebuffed by summary rejection by the High Court. Even then the High Court had granted six months time to the tenant to vacate the premises. The father and son duo continued with their efforts to dupe and defy the process of the Court. In these circumstances, the Supreme Court observed as follows :- "5. We have not the slightest hesitation in condemning the petitioner for the gross abuse of the process of the Court repeatedly and unrepentantly resorted to. From the statement of the facts found in the judgment of the high Court, it is perfectly plain that the suit now pending before the First munsif s Court Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. The learned Munsif must remember that if on a meaningful-not formal- reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under O. VII R. 11, CPC taking care to see that the ground mentioned therein is fulfilled. And, if clear drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under O. X, CPC. An activist Judge is the answer to irresponsible law suits. The trial Courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. " (18) IN our opinion, the conduct of the plaintiff herein can hardly be equated with the litigant, which was being admonished by the Supreme Court in the aforesaid case. (19) IN the case of N. V. Srinivasamurthy and Ors. (supra), the Supreme Court reiterates the legal position that in case a suit is clearly barred by limitation, the plaint ought to be rejected. It has been held that the suit can be dismissed on the ground of limitation on a critical examination of the plaint. In our opinion, examination of the plaint in the present case would not lead to a conclusion that the suit is clearly barred by limitation. It has been held that the suit can be dismissed on the ground of limitation on a critical examination of the plaint. In our opinion, examination of the plaint in the present case would not lead to a conclusion that the suit is clearly barred by limitation. (20) WE are of the considered opinion that there is merit in the submissions made by Mr. Pratap Chatterjee, learned senior advocate appearing for the respondent. In view of the pendency of numerous proceedings, as noticed above, it is clear that institution of the suit by the appellants could well have been challenged on the ground that in view of the order issued by the Income tax Authorities under section 269ud (1) of the Income Tax Act, 1961, it was impossible for the appellants to execute the sale deed. In the case of Balasaria construction (P) Ltd. (supra), the Supreme Court has clearly observed as follows: "8. After hearing counsel for the parties, going through the plaint, application under Order 7 Rule 1 l (d) CPC and the judgments of the trial court and the High Court, we are of the opinion that the present suit could not be dismissed as barred by limitation without proper pleadings, framing of an issue of limitation and taking of evidence. Question of limitation is a mixed question of law and fact. Ex facie in the present case on the reading of the plaint it cannot be held that the suit is barred by time. The findings recorded by the High Court touching upon the merits of the dispute are set aside but the conclusion arrived at by the High Court is affirmed. We agree with the view taken by the trial Court that a plaint cannot be rejected under Order 7 Rule 1 l (d) of the Code of Civil Procedure. " (21) WE may also notice here that the learned Trial Court has clearly come to the conclusion that there does not appear to be any substance in the grounds urged, at least for the issue to be conclusively held against the plaintiff and the suit to be dismissed at the threshold. Therefore, clearly the issue of limitation has been kept alive by the learned Trial Court for a final adjudication at the appropriate time. (22) IN view of the above, we find no merit in the appeal. It is, accordingly, dismissed. Therefore, clearly the issue of limitation has been kept alive by the learned Trial Court for a final adjudication at the appropriate time. (22) IN view of the above, we find no merit in the appeal. It is, accordingly, dismissed. We further make it clear the observations made herein and the observations made by the learned Trial Court are merely prima facie for the determination of the applications filed by the defendants. The same shall not be treated as any expression of opinion on the merits of the claims put forward by the parties in the suit, including the objection that the suit is barred by the Limitation Act, 1961. Accordingly, the appeal is dismissed. No order as to costs. Appeal dismissed.