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2010 DIGILAW 428 (DEL)

SOMNATH JAGGI v. ONKAR AGGARWAL

2010-03-16

ARUNA SURESH

body2010
JUDGMENT Aruna Suresh, J. (Oral) - Impugned in this appeal is the judgment and decree of the First Appellate Court dated 22.4.2006 whereby appeal of the respondent challenging the judgment and decree of the Trial Court dated 17.9.2005 was dismissed. 2. Parties to the appeal entered into an agreement to sell in respect of Property Nos. 11/206 and 11/207, Geeta Colony on 10.7.2001 for a total consideration of Rs. 32 lacs. As per the agreement, Rs. 2/00/000/- were paid by the respondent to the appellant as earnest money on 30.7.2001. When appellant failed to supply copies of the title documents asked for by the respondent number of times, respondent along with the balance consideration amount and witness went to the office of Sub-Registrar on 30.10.2001 for execution of the Sale Deed, but in vain, as appellant did not appear before the Sub-Registrar. On the same day, appellant expressed his inability to the respondent to hand over the documents of the property in terms of the agreement to sell stating that he did not have clear title in the suit property in his favour. Respondent demanded double the amount of earnest money as per the Agreement. When appellant failed to make the payment within 30 days as requested by him, respondent issued legal notices dated 9.8.2003 and 9.9.2003 demanding back the earnest money. Appellant replied to the said notice on 25.8.2003. Since appellant failed to make the payment as demanded, the suit was filed. Trial Court passed a decree for the suit amount with interest for three years preceding the filing of suit pendente lite and future interest till the date of decree at the rate of 9% per annum and from the date of decree till realization at the rate of 6% per annum in favour of the respondent. 3. Dissatisfied with the judgment and decree of the trial Court, appellant filed First Appeal being RCA No. 93/2005 challenging the said judgment and decree. The Appellate Court agreed with the findings of the trial Court and dismissed the appeal. Hence, this Second Appeal. 4. Both the Courts below have given concurrent findings on the question of limitation as well as interpretation of Agreement to Sell while decreeing the suit of the respondent. 5. Mr. The Appellate Court agreed with the findings of the trial Court and dismissed the appeal. Hence, this Second Appeal. 4. Both the Courts below have given concurrent findings on the question of limitation as well as interpretation of Agreement to Sell while decreeing the suit of the respondent. 5. Mr. Amarjit Singh, learned Counsel for the appellant has submitted that the suit was barred by period of limitation and the Courts below went wrong in holding, that the suit was within the period of limitation. He further argued that Courts below did not interpret the Agreement to sell in proper perspective. These submissions are refuted by Counsel for the respondent. Under these circumstances, following substantial questions of law are hereby formulated: 1. Whether the Courts below correctly interpreted Sections 23 and 24 of the Limitation Act while concluding that the suit was within the period of limitation? 2. Whether the Courts below correctly interpreted the Agreement to Sell Ex. PW-1/A in view of the provisions of Sections 91 and 92 of the Evidence Act? 6. Heard. Substantial Question of Law-1 7. It is an admitted fact that Agreement to Sell was executed on 30.7.2001 for total consideration of Rs. 32,00,000/-. At the time of execution of Agreement, earnest money of Rs. 2,00,000/- was paid by the respondent to the appellant. Balance amount of Rs. 30,00,000/- was to be paid on 30.10.2001 at the time of execution and registration of the Sale Deed. It is also not disputed that appellant failed to provide copies of the documents to the respondent despite repeated demands on one pretext or the other. On 30.10.2001, appellant did not go to the office of the Sub-Registrar for execution of the Sale Deed. Suit for recovery of money was filed by the respondent on 14.9.2004. Respondent claimed that he came to know about the dishonest intention and misrepresentation of facts by the appellant only on 30.10.2001 when appellant expressed his inability either to hand over documents of the property to him or to complete transaction in terms of the agreement to sell dated 11.7.2001. 8. It is submitted by Counsel for the appellant that Agreement to Sell was executed on 30.7.2001 and the period of limitation started running against the respondent on the said date when the Agreement was executed. 8. It is submitted by Counsel for the appellant that Agreement to Sell was executed on 30.7.2001 and the period of limitation started running against the respondent on the said date when the Agreement was executed. Suit having been filed on 14.1.2004 i.e. after a period of three years, was barred by period of limitation but the Courts below erred in holding that the suit was within the period of limitation. 9. I do not find much force in the submissions of learned Counsel for the appellant. Sale Deed was to be executed on 30.10.2001. It was the appellant who failed to execute the Sale Deed on that date and it was only then respondent came to know of fraud played upon him by the appellant. Under these circumstances, the trial Court held in Para 9 of its judgment: "9. This is not an ordinary recovery suit filed by plaintiff on the basis of money transactions but the plaintiff is seeking to recover the amount taken by defendant on misrepresentation of facts and in such cases cause of action arises when the fact of misrepresentation comes to the knowledge of the party and thereafter the period of limitation starts running." 10. I find myself in agreement with the findings of the Trial Court when it observed that in a suit like the present one, period of limitation started running against the respondent from the date when he came to know of misrepresentation of facts. 11. Appellate Court dealt with the submission of the appellant that the suit was barred by Articles 23 and 24 of the Limitation Act (hereinafter referred to as 'Act') and observed: "8. Appellant is aggrieved with the findings of the learned Trial Court on issue No. 1. The learned Counsel for the appellant submitted that Rs. 2 lacs were paid by respondent to the appellant on 30. 7.2001 whereas this suit for recovery was filed only on 15.9.2004 which is beyond three years and as per Articles 23, 24 of the Limitation Act, the period of limitation prescribed for recovery is three years. I agree with this contention of the appellant, that in a recovery suit the period of limitation prescribed is three years. 7.2001 whereas this suit for recovery was filed only on 15.9.2004 which is beyond three years and as per Articles 23, 24 of the Limitation Act, the period of limitation prescribed for recovery is three years. I agree with this contention of the appellant, that in a recovery suit the period of limitation prescribed is three years. The learned Counsel for respondent has submitted that limitation in this case starts running from the date when respondent came to know about the fraudulent intention of the appellant and misrepresentation of the fact by appellant came to his knowledge. As per averments made in the plaint respondent paid Rs. 2 lacs on 30.7.2001 to the appellant and an Agreement to Sell was executed by the appellant in favour of the respondent. It was mentioned in this Agreement that the balance amount of Rs. 30 lacs shall be paid by respondent upto 30.10.2001. After paying earnest money the respondent asked appellant to supply copies of the title document regarding the property to him. Appellant assured him that documents are kept with his relative who is out of town and will come on 25.8.2001 and thereafter he will provide him copies of the required documents. The respondent went to the office of Registrar on 30.10.2001 along with witnesses and balance consideration and there kept waiting for the appellant. Appellant expressed his inability to the respondent to complete the transaction admitting that he is not having clear title over the said property. "14. As per the averments in the plaint, respondent only came to know on 30.10.2001 that appellant is not the owner of the said properly. Thereby, the clock of limitation will start running from 10.10.2001 and not earlier to that. Accordingly, in my opinion issue No.1 was rightly decided by the learned Trial Court in favour of the respondent and against the appellant." 12. Articles 23 and 24 of the Limitation Act are reproduced as below: Article Description of suit Period of Time from which Limitation period begins to run 23 For money payable to the Three years When the money is plaintiff for money paid for paid. the defendant. 24 For money payable by the Three years When the money is defendant to the plaintiff for received. money received by the defendant, for (he plaintiff’s use. 13. the defendant. 24 For money payable by the Three years When the money is defendant to the plaintiff for received. money received by the defendant, for (he plaintiff’s use. 13. For the present controversy, Articles 27 and 54 of the Limitation Act also became relevant for consideration. They read: Article Description of suit Period of Time from which period Limitation begins to run 27 For compensation of breach of Three years When the time specified a promise to do anything at a arrives or the specified time, or upon the contingency happens. happening of a specified contingency. 54 For specific performance of a Three years The date fixed for the contract performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused. 14. Claim of the Respondent for recovery of Rs. 2,00,000/- was not based on any money transaction. It was based on Agreement to Sell executed between the parties on 30.7.2001. Respondent under the circumstances could not have filed a suit before the date fixed for the performance of the contract i.e. 30.10.2001. Period of limitation started running against him only when appellant failed to execute and register the Sale Deed in his favour on the date which was fixed for the same. It has come in evidence that appellant had refused to perform his part of the contract stating that his title in the property was not clear and he was not in possession of any title deed. It is pertinent that to demolish the plea of misrepresentation as raised by the respondent, appellant could have produced title documents of the suit property but failed to do so in the Courts below. Appellant admitted mis-statement of facts when he said that respondent was aware that appellant was having a collaboration Agreement regarding the property with Shri O.K. Gupta and it was in that background and context that in the document Ex. PW-1/A he mentioned that he was the actual owner and in possession of the suit property. This is clear, unambiguous admission on the part of the appellant that on the date when he executed the Agreement to Sell he had no clear title in the suit property. However, he concealed this fact from the respondent at the time of execution of the Agreement to Sell. He had no clear title even on the date when Sale Deed was to be executed. However, he concealed this fact from the respondent at the time of execution of the Agreement to Sell. He had no clear title even on the date when Sale Deed was to be executed. 15. Under Article 27 of the Act, period of limitation for compensation for breach of a promise to do anything at a specified time, or upon the happening of a specified contingency is three years and the time begins to run from the date, the time specified arrives or the contingency happens. 16. Similarly, Article 54 of the Act, prescribes period of limitation of three years for specific performance of a contract and the time from which the period begins to run is the date fixed for the performance, Of, if no such date is fixed, when the plaintiff has notice that performance is refused. 17. In the present case, both the contingencies have happened. Respondent filed a suit for recovery of Rs. 2,00,000/- as compensation or return of his earnest money along with interest for breach of a promise, made by the appellant to execute the Sale Deed on 30.10.2001. Therefore, period of limitation started running against the respondent only when the time specified arrived. Similarly, as per Article 54 of the Act, when respondent noticed that performance was refused by the appellant on the date which was fixed for the performance, period of limitation started running against him from the said date. 18. Under the circumstances, period of limitation started running against the respondent when respondent finally came to know that appellant did not have any clear title in the property and was unable to execute the Sale Deed on 30.10.2001. The findings of the Courts below on computi1tion of period of limitation under the facts and circumstances of the case are correct. The Courts below rightly did not consider Articles 23 and 24 of the Act for computing the period of limitation for filing the present suit as they have no application to the facts and circumstances of this case. 19. I do not find any illegality or infirmity in the findings of the Courts below on the question of limitation. Substantial Question of Law-2 20. Agreement to Sell dated 30.7.2001 contains a specific clause regarding refund of earnest money i.e. double the amount by the appellant. Clause 4 of the Agreement reads: "4. 19. I do not find any illegality or infirmity in the findings of the Courts below on the question of limitation. Substantial Question of Law-2 20. Agreement to Sell dated 30.7.2001 contains a specific clause regarding refund of earnest money i.e. double the amount by the appellant. Clause 4 of the Agreement reads: "4. That if the party No.1 will fail or refuse to complete the transaction within due period this agreement then the party No.2 shall be entitled to get the double of the earnest money from the party No.1 or to get the transaction completed through Court of law at the cost and risk of the party No.1 and if the party No.2 will fail to complete this transaction within stipulated period of this agreement then the party No.1 will forfeit the earnest money to the party No.2." 21. Since, in this case, the appellant failed to perform his part of the contract by not executing the Sale Deed in favour of the respondent and having no clear title in the property covered under the Agreement to Sell, respondent was within his rights to invoke Clause 4 of the Agreement. None of the Courts below misinterpreted this relevant clause in the Agreement. To my mind, Clause 4 was rightly interpreted by the Courts below while deciding the claim of the respondent. In this case, it cannot be said that it was the respondent who had resiled from the Agreement and therefore was not entitled to seek refund of double the earnest money paid by him to the appellant. Respondent had not claimed for refund of earnest money. 22. 'D. Lakshminarayana Chetty (Died) Per LRs. v. Avula Krishnaiah (Died) Per LRs., 2007 (1) Civ. C.R. 214 (AP)', is of no help to the appellant. In the said case aggrieved party had resiled from the Agreement and had sought refund of amount paid by him to the other party. It was held that party resiling from Agreement cannot seek refund of the amount. 23. In view of my discussion as above, I find no reason to interfere in the findings of the Courts below. Hence, appeal being without any merit is accordingly dismissed. CM APPL Nos. 9956/2006 and 719/2007 Since appeal has been dismissed, these applications have become infructuous and are accordingly dismissed. Appeal dismissed.