HAPPY MASSCOMM PVT. LTD. v. ATCO MANAGEMENT PVT. LTD.
2016-11-24
HARISH TANDON
body2016
DigiLaw.ai
JUDGMENT : 1. The challenge is made to order dated 28th August, 2016 passed by the learned Civil Judge (Senior Division), 2nd Court, Alipore in Title Suit No. 55 of 2015 by which an application under Order 7 Rule 11 of the Code of Civil Procedure is rejected. 2. Before proceeding to decide the case on factual matrix, the law on the subject is required to be recapitulated. 3. Order 7 Rule 11(d) of the Code of Civil Procedure permits the Court to reject the plaint provided it is barred by law. The law is somewhat settled that if the suit is expressly barred by limitation, the plaint can be rejected under Order 7 Rule 11(d) of the Code. It is equally settled that the plea of limitation is a mixed question of fact and law. It would not be wrong to say that if the limitation is to be culled out from the meaningful reading of the plaint and the documents annexed thereto without taking aid and help of the other materials it can be brought within the ambit of "“barred by law”. In a case where the suit cannot be dismissed on the anvil of limitation without proper appreciation of the facts, pleadings, framing of issue and the evidence to be taken thereon, it cannot be held to be barred by time. 4. In Balasaria Construction Pvt. Ltd. Vs. Hanuman Seva Trust & Ors. reported in (2006) 5 SCC 658 the Apex Court succinctly laid down the principles when the plaint can be dismissed on the ground of limitation under Order 7 Rule 11(d) of the Code. For proper appreciation of the facts and the arguments advanced at the Bar it would be profitable to quote paragraph 4 of the said report wherein the various judgments of the Supreme Court and of the different High Courts were noticed and the principles on the above proposition has been lucidly laid down as under :- “4. This case was argued at length on 30-8-2005. Counsel appearing for the appellant had relied upon a judgment of this Court in N.V. Srinivasa Murthy v. Mariyamma for the proposition that a plaint could be rejected if the suit is ex facie barred by limitation. As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. State Bank of India Staff Assn.
As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. State Bank of India Staff Assn. in respect of the proposition that Order 7 Rule 11(d) was not applicable in a case where a question has to be decided on the basis of fact that the suit was barred by limitation. The point as to whether the words “barred by law” occurring in Order 7 Rule 11(d) CPC would include the suit being “barred by limitation” was not specifically dealt with in either of these two judgments, cited above. But this point has been specifically dealt with by the different High Courts in Mohan Lal Sukhadia University v. Priya Soloman, Khaja Quthubullah v. Govt. of A.P., Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana, Arjan Singh v. Union of India wherein it has been held that the plaint under Order 7 Rule 11(d) cannot be rejected on the ground that it is barred by limitation. According to these judgments the suit has to be barred by a provision of law to come within the meaning of Order 7 Rule 11 CPC. A contrary view has been taken in Jugolinija Rajia Jugoslavija v. Fab Leathers Ltd., National Insurance Co. Ltd. v. Navrom Constantza, J. Patel & Co. v. National Federation of Industrial Coop. Ltd. and State Bank of India Staff Assn. v. Popat & Kotecha Property. The last judgment was the subject-matter of challenge in Popat and Kotecha Property v. State Bank of India Staff Assn. This Court set aside the judgment and held in para 25 as under: (SCC p. 517) “25. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo case the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the non-execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced.
Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced. It is not a case where the suit from statement in the plaint can be said to be barred by law. The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. This is not so in the present case.” 5. In a subsequent decision rendered in case of Ramesh B. Desai & Ors. Vs. Bipin Vadilal Mehta & Ors. reported in (2006) 5 SCC 638 the Supreme Court reiterated and approved the principles of law laid down therein in the following :- “19. A plea of limitation cannot be decided as an abstract principle of law divorced from facts as in every case the starting point of limitation has to be ascertained which is entirely a question of fact. A plea of limitation is a mixed question of law and fact. The question whether the words “barred by law” occurring in Order 7 Rule 11(d) CPC would also include the ground that it is barred by law of limitation has been recently considered by a two-Judge Bench of this Court to which one of us was a member (Ashok Bhan, J.) in Balasaria Construction (P) Ltd. v. Hanuman Seva Trust it was held: (SCC p. 661, para 8) “8. After hearing counsel for the parties, going through the plaint, application under Order 7 Rule 11(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.” This principle would be equally applicable to a company petition. Therefore, unless it becomes apparent from the reading of the company petition that the same is barred by limitation the petition cannot be rejected under Order 7 Rule 11(d) CPC.” 6.
Therefore, unless it becomes apparent from the reading of the company petition that the same is barred by limitation the petition cannot be rejected under Order 7 Rule 11(d) CPC.” 6. The law laid down in the aforesaid reports are uniform in the sense that a suit can be barred by law if from the meaningful reading of the statements made in the plaint it appears so that the Court shall not add or subtract any statements nor shall take one statement divorced from the entire plaint in arriving at the conclusion that the suit is barred by law. In order to examine whether the plaint is barred by law, the averments made in the plaint is to be seen in proper perspective and to be assumed as correct without looking to the pleas raised in the application filed by the defendant under the aforesaid provision nor the statements made in the written statement or any piece of evidence disclosed for the first time. The disputed questions of facts cannot be decided under Order 7 Rule 11(d) of the Code in order to arrive at the conclusion that the suit is barred by limitation. 7. On the conspectus of the law laid down in the above referred decisions, let me examine whether the decision of the Trial Court in rejecting the plea of the defendant that the plaint is barred by limitation can be sustained. 8. Admittedly, the suit is filed on 11th August, 2015 for decree for declaration that the Memorandum of Understanding dated 8th April, 2002 entered into by and between the plaintiffs / opposite party nos. 1 & 2 and the opposite party nos. 3 & 6 is still valid and subsisting and further seeks for specific performance of the said Memorandum of Understanding as and by way of consequential reliefs. The decree for permanent injunction and temporary injunction are also sought. 9. The plaint case proceeds that the opposite party nos. 3, 4 & 6 and the father of the opposite party no. 5 represented themselves to be the joint owners of all that the premises no. 52/4, Ballygunge Circular Road, Kolkata – 700 019 and showed their intention to develop the properties on terms and conditions to be mutually agreed amongst them. After elaborate discussion the opposite party no.
3, 4 & 6 and the father of the opposite party no. 5 represented themselves to be the joint owners of all that the premises no. 52/4, Ballygunge Circular Road, Kolkata – 700 019 and showed their intention to develop the properties on terms and conditions to be mutually agreed amongst them. After elaborate discussion the opposite party no. 2 agreed to develop the said property and the terms and conditions were reduced in the form of a letter dated 8th May, 2001. The said letter was duly received and accepted by the opposite party no. 3 by putting a signature on the copy thereof and a sum of Rs. 3,00,000/- (Rupees Three Lacs) were handed over to him. A Deed of Hypothecation dated 8th May, 2001 was executed by the opposite party no. 3 in favour of the opposite party no. 2 whereby and whereunder the 25% of the undivided demarcated share in the property was hypothecated / charged as security for the said sum. 10. Subsequently, a formal Memorandum of Understanding (M.O.U) was duly signed and executed on 8th April, 2002 recording the terms and conditions that would appear therefrom. The plaint further proceeds that a sum of Rs. 16 Lacs were paid from time to time till 8th April, 2002 and a power of attorney was executed and registered in the office of the District Sub-Registrar of Assurances III at Alipore, Kolkata. After the execution of the M.O.U. a further sum of Rs. 62.25 Lacs were paid till 20th February, 2003. The plaint contains various statements pertaining to an action taken on the basis of the M.O.U. and in paragraph 15 of the plaint it is stated that a payment of more or less 120 Lacs have been paid and deposited in the accounts of the aforesaid opposite parties. Paragraph 16 contains the statement that the plaintiffs / opposite party nos. 1 and 2 came to learn from the reliable source that the aforesaid owners are negotiating with other parties for the development of the said properties and such act is a complete and blatant violation of the terms and conditions of the M.O.U. 11. In paragraph 17 of the plaint, it is averred that a letter dated 14th September, 2010 was written by the opposite party no.
In paragraph 17 of the plaint, it is averred that a letter dated 14th September, 2010 was written by the opposite party no. 1 to the Kolkata Municipal Corporation informing the existence and validity of the Memorandum of Understanding dated 8th April, 2002 with a request not to sanction any plan for the development of the said building. 12. Paragraph 18 contains the statements that the plaintiffs / opposite party nos. 1 & 2 came across with a legal notice issued for and on behalf of one Hansraj Jain published in ‘The Telegraph’ and ‘Times of India’ on 29th September, 2010 that a suit being C.S. No. 317 of 2006 has been filed in the High Court at Calcutta wherein the order of restraint is passed upon the defendants therein from selling, alienating, transferring, encumbering the said property. 13. The learned Advocate appearing for the plaintiff / said opposite parties heavily relied upon the averments made in paragraph 19 of the plaint wherein it is stated that a public notice was published in ‘The Telegraph’, Kolkata edition on 6th December, 2013 by one Wallstreet Sales Pvt. Ltd. informing the public at large that a Memorandum of Understanding has been entered into with the owners of the said premises for development thereof and called upon all persons having any right, title and interest in the said suit to intimate them within 15 days therefrom. The plaintiffs informed the said Wallstreet Sales Pvt. Ltd. through their Advocate on 9th December, 2013 that they have acquired a right, title and interest in the suit premises on the basis of the Memorandum of Understanding which is still valid and subsisting and has not been cancelled or terminated. To counter the same the plaintiffs / the said opposite parties published a notice through their Advocate in ‘Times of India’, Kolkata Edition on 12th December, 2013 bringing the factum of the M.O.U. to the public at large with the caution not to deal with the owners. 14. The plaint contains the further statement pertaining to the knowledge acquired through bill board put up at the suit premises by the petitioners herein and a litigation amongst the defendants over the disputes cropped up amongst them.
14. The plaint contains the further statement pertaining to the knowledge acquired through bill board put up at the suit premises by the petitioners herein and a litigation amongst the defendants over the disputes cropped up amongst them. In the cause of action paragraph being paragraph 48, it is stated that the same arose firstly on 29th September, 2010 when the plaintiffs came to learn of the malafide intention of the defendant nos. 1 to 4 and their predecessor-in-interest through a notice published in the newspaper and thereafter on 6th December, 2013 when a public notice was issued on behalf of the Wallstreet Sales Pvt. Ltd. and again on 14th September, 2014 when the defendants refused to perform their obligation under the agreement. 15. On the factual matrix of the aforesaid facts whether the suit is palpably barred by limitation or not is a question arises in the instant revisional application. 16. The learned Advocate appearing for the petitioners submits that the suit is hit by Article 54 of the Limitation Act as the specific performance is sought for the M.O.U dated 8th April, 2002. It is further submitted that it can be reasonably inferred from the meaningful reading of the statements made in the plaint that the refusal came to the knowledge of the plaintiffs / the said opposite parties on 14th September, 2010 when a notice was issued to the Kolkata Municipal Corporation wherein it is averred that the owners of the properties are acting in total contravention of the terms and conditions of the M.O.U. It is further submitted that the knowledge of refusal can be gathered when a notice dated 29th September, 2010 was published informing that a suit has been filed by Hansraj Jain before this Court and an order of injunction has been passed therein. It is thus submitted that the plaint is liable to be rejected if it appears from the meaningful reading of the statements made in the plaint that illusory cause of action is created to wriggle out from the law of limitation. 17. On the other hand, the learned Advocate General appearing for the plaintiffs / the said opposite parties submits that the Court should confine to the averments made in the plaint for the purpose of Order 7 Rule 11(d) of the Code and should not look into any other materials produced by the defendants.
17. On the other hand, the learned Advocate General appearing for the plaintiffs / the said opposite parties submits that the Court should confine to the averments made in the plaint for the purpose of Order 7 Rule 11(d) of the Code and should not look into any other materials produced by the defendants. It is further submitted that the averments made in the plaintiff should be treated to be correct for such limited purposes and it is manifest from the reading of the plaint that the suit has been filed within the period of limitation provided under Article 54 of the Limitation Act. He succinctly submits that mere publication in the newspaper may have raised a doubt but such doubts were subsequently clear unless the express refusal to perform the obligation under the Memorandum of Understanding is communication to his clients. According to him, the refusal came in the year 2013 and the suit has been filed within three years therefrom which cannot be said to be barred by the aforesaid provision of Limitation Act. 18. Article 54 of the Limitation Act provides that a suit for specific performance of a contract should be instituted within three years from the date fixed for the performance or if no such date is fixed when the plaintiff has notice that the performance is refused. The word ‘notice’ means intimation, information, cognizance or observance and imbibe within itself the knowledge coming from direct perception or interference reasonably arising out of several facts and circumstances. The Third Column of Article 54 is clear that where the time is fixed for performance, the suit has to be filed within three years therefrom. However, in case where the time is not fixed, the limitation would reckon when the plaintiff got the notice of refusal. The refusal may be express or implied or may be gathered from surrounding circumstances. It is therefore aptly clear that a suit for specific performance of a contract has to be filed within the period of limitation prescribed in the Third Column of Article 54 of the Limitation Act. 19. The letter dated 14th September, 2010 issued by the plaintiffs to the Kolkata Municipal Corporation may be relevant for the purpose of ascertaining whether the plaintiffs had a clear and explicit knowledge of refusal to perform the obligations by the owners of the said property.
19. The letter dated 14th September, 2010 issued by the plaintiffs to the Kolkata Municipal Corporation may be relevant for the purpose of ascertaining whether the plaintiffs had a clear and explicit knowledge of refusal to perform the obligations by the owners of the said property. In order to ascertain whether the knowledge of refusal can be inputted from the statements made in the said letter it would be profitable to quote the excerpts therefrom which runs thus :- “It has recently come to our knowledge and information that the owners, in total violation and disregard of the understanding made with us and without intimating us, have negotiated a deal for the development of the same premises with a third party. Such act on the part of the owners is not only illegal and malafide, but is also in total contravention of the terms and conditions agreed to by and between us and the owners. We are also informed that the said third party has in connivance and support of the owners, also prepared and has lodged/is lodging with you for sanction, the building plan/s in respect of the said premises." 20. It is clear from the bare reading of the aforesaid statements that the owners have been negotiating to deal with the third party for development in violation and disregard to the M.O.U entered into with the plaintiff. There is no hesitation in my mind from the reading of the aforesaid statements that the plaintiffs had the sufficient knowledge of refusal on the part of the owners to act in terms of the M.O.U, which amounts to refusal thereof. Furthermore, there was an intervening litigation, the knowledge whereof as indicated in the plaint which sufficiently indicates that an agreement in total disregard to the M.O.U was entered into by the owners with the third party. The right to sue fructified the moment the owners acted in violation of the terms and conditions embodied in the M.O.U and the suit ought to have been filed within three years therefrom. It would not be wrong to say that by a clever drafting if an illusory cause of action is created for the purpose of limitation, the Court can reject the plaint if the right to sue accrues on happening of a particular event. 21.
It would not be wrong to say that by a clever drafting if an illusory cause of action is created for the purpose of limitation, the Court can reject the plaint if the right to sue accrues on happening of a particular event. 21. In view of the above, it is manifest and apparent from the reading of the averments made in the plaint that the suit ha been filed beyond the period of limitation provided under Article 54 of the Limitation Act. 22. Order of the Trial Court cannot be sustained, the same is hereby set aside. 23. The application for rejection of the plaint is allowed. The Revisional Application is thus disposed off. 24. However, there shall be no order as to costs. Harish Tandon, J. Later: 25. After delivery of the Judgment, learned Advocate for the opposite party prays for stay of the operation of the order. Considered such prayer, this Court does not find any justification in staying the operation of the order. 26. The prayer is thus rejected.