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2022 DIGILAW 1745 (BOM)

Shyamkumar Lalaramji Jaiswal v. Dattatraya s/o. Krishnarao Pitale

2022-07-20

AMIT BORKAR

body2022
JUDGEMENT : 1 Heard. 2. Rule. Rule made returnable forthwith by consent of the parties. 3. The Defendants are challenging the order passed by the Trial Court rejecting the application under Order 7 Rule 11 to dismiss the suit of respondents No.1 and 2 on the ground of limitation under Order 7 Rule 11(d) of the Code of Civil Procedure. 4. The facts giving rise to the present application are as under : Non-applicant No.1 filed Special Civil Suit No.1368/2010 for recovery of Rs.88,69,336/- along with interest. The relevant facts for adjudication of the issue involved in the present application, are as under : 5. According to averments in the plaint, as per the oral agreement, the Defendants were to pay profit from the sale of properties to Plaintiff No. 2. Defendant No. 1 had allegedly purchased said properties out of the Plaintiffs' funds. In January 2007, Plaintiffs got knowledge about sale deeds dated 15.04.2006 and 20.07.2006. On executing the aforesaid sale deed, Defendant No.1 was required to pay an amount claimed in the suit. Therefore, according to the applicants, in January 2007, the Plaintiffs had knowledge of sale deeds. Plaintiffs filed suit in November 2010, i.e. after three years. 6. The applicants, therefore, applied to Order 7 Rule 11(d) of the Code of Civil Procedure before the Trial Court, alleging that the suit is barred by law of limitation from the averments of plaints. Non-applicant Nos.1 and 2 contested the said application by filing their reply. 7. The learned Trial Court, by impugned order dated 12.07.2017, rejected the application holding that issue of limitation in the facts of the case is a mixed question of law and facts; it would require evidence to be lead. The applicants have, therefore, challenged the order by the present application. 8. Mr. Bhangde, learned Advocate for the applicants, submitted that, from the averments in the plaint itself, the suit was barred by limitation as the documents are referred to in the plaint, and the documents in the form of sale deed show that the non-applicant No.1 had knowledge about sale deeds on 12.04.2007 and 21.03.2007. Therefore, the suit filed on 22.11.2010 is ex facie barred by limitation. According to him, execution of the sale deed without Plaintiff's knowledge constitutes a breach giving rise to the cause of action; therefore, the suit is barred by limitation. Therefore, the suit filed on 22.11.2010 is ex facie barred by limitation. According to him, execution of the sale deed without Plaintiff's knowledge constitutes a breach giving rise to the cause of action; therefore, the suit is barred by limitation. He placed reliance upon the judgment of the Hon'ble Apex Court in the case of Dahiben Vs. Arvindbhai Kalyanji Bhanusali (Gajra) Dead Through Legal Representatives and Ors. reported in (2020)7 SCC 366 . According to Mr. Bhangde, learned Advocate for the applicants, the suit would be governed by Article 51 of the Limitation Act, 1963. Therefore, the limitation will start from the date of knowledge of the sale deed. 9. Mr. Khapre, learned Senior Advocate for the non-applicants, submitted that Article 113 of the Limitation Act, 1963 will govern the rights of the parties. The right to sue accrued in favour of Plaintiffs only on refusal on the part of Defendants to pay the amount as agreed. According to him, the cause of action to file the suit accrued in favour of the Plaintiffs on 21.11.2007, when the Plaintiffs issued a notice demanding the amount of claim. Therefore, the suit is within limitation. He placed reliance upon the judgment of the Hon'ble Apex Court in the case of Shakti Bhog Food Industries Ltd. Vs. Central Bank of India and Anr. reported in (2020) 17 SCC 260 . 10. I have carefully considered the submissions made on behalf of both sides. 11. The suit is filed for recovery of the amount. According to the Defendants, Article 51 of the Limitation Act, 1963 would be applicable. Per contra, according to the Plaintiffs, Article 113 would be applicable. Therefore, it is necessary at the outset to adjudicate which Article applies to the facts of the present case. For the adjudication of the said issue, it is necessary to set out Articles 51 and 113 of the Limitation Act, 1963, which read as under : “Article 51 – For the profits of immovable property belonging to the plaintiff which have been wrongfully received by the defendant.” “Article 113 - Any suit for which no period of limitation is provided elsewhere in this Schedule.” 12. Reading of Article 51 makes it clear that the said Article would be applicable if a suit is filed for recovery of profits of immovable property belonging to the Plaintiffs, which the Defendants have wrongfully received. Reading of Article 51 makes it clear that the said Article would be applicable if a suit is filed for recovery of profits of immovable property belonging to the Plaintiffs, which the Defendants have wrongfully received. Therefore 'wrongful received the profit out of the immovable property’ is the essential ingredient of the said Article. According to the Plaintiffs, the Defendants were entitled to the principal amount and interest at the rate of 24% p.a. from the date of execution of the sale deed. Plaintiff No.2 was entitled to the balance amount. According to the averments in the plaint, the profit was to be handed over to Plaintiffs after receipt of the said amount. Therefore, the cause of action is non-payment of the balance profit to the Plaintiffs and not receipt of the amount by Defendant No.1. According to the averments in the plaint, Defendant No.1 was duly authorized to receive the profit of sale consideration and thereafter, hand it over to Plaintiff No.1. Therefore, prima facie, the essential ingredient of wrongful receipt by the Defendants is absent. Therefore, Article 51 of the Limitation Act, 1963 is not attracted. 13. Article 113 of the Limitation Act, 1963 is attracted in a suit for which no period of limitation is provided elsewhere in Schedule. Under said Article the period of limitation commences at the point of time when the right to sue accrues. Under the said Article, the time begins to run when the right to sue accrues. The right to sue begins to accrue when the cause of action arises. The relevant issue is as to when the cause of action accrues because it is only then that there would be a right to apply. To constitute a cause of action, first is the coming into existence of a right, and secondly, its infringement or threat to be infringed. The cause of action in substance decides the starting point of limitation. It is a settled position of law that the question of when the right to sue accrues depends mainly upon the facts and circumstances of each case. A claim is not necessarily a difference between the parties unless that claim is disputed. Cause of action would, therefore, arise when the claim of one party, when it arises, is denied or there is a threat to deny. Only in that event does it becomes a cause of action. 14. A claim is not necessarily a difference between the parties unless that claim is disputed. Cause of action would, therefore, arise when the claim of one party, when it arises, is denied or there is a threat to deny. Only in that event does it becomes a cause of action. 14. The right to sue means a right to seek relief, to obtain relief by means of legal procedure. A right to sue accrues when a cause of action arises. However, for accrual of a right to sue, there must have come into existence the substantive right asserted in the suit and such right must have been infringed or threatened to be infringed. The right and its infringement or threat of infringement constitutes the cause of action and gives rise to a "right to sue." 15. At this stage, reference can be made to Article 113 of the Limitation Act, 1963, a residuary article in its application to suits. This Article replaces Article 120 of the old Limitation Act with a difference that under Article 113, the period of limitation is 3 years, while under Article 120, it was 6 years. The time from which the period begins to run is 'when the right to sue accrues’. Article 120 of the old Limitation Act has been the subject matter of decisions by the Privy Council and the Supreme Court. The words 'when the right to sue accrues' have been construed to mean when the cause of action arises. It is manifest that as per Article 113, the time from which the period begins to run starts when the right to sue accrues. Therefore, if Article 113 of the Limitation Act is to apply, there must be a point of time from when the period will begin to run. This period begins to run only when the right to sue accrues. 16. In Mt. Bolo v. Mt. Koklan reported in AIR 1930 Privy Council 270, the Privy Council, while interpreting the expression “right to sue” in the context of Article 120, formulated the principle of law as follows: “There can be no “right to sue” until there is an accrual of the right asserted in the suit and its infringement or at least clear and unequivocal threat to infringe that right by the Defendant against whom the suit is instituted.” 17. In Gobinda Narayan v. Sham Lal reported in AIR 1931 PC 89 , it was held that the expression "right to sue" in Article 120 means the right to bring the particular suit with reference to which the plea of limitation is raised and that the starting point for limitation is when the rights are invaded. 18. This principle was reiterated in a judgment of the Hon’ble Supreme Court in Rukhmabai v. Lala Laxminarayan reported in AIR 1960 SC 335 , where the Hon’ble Supreme Court held thus: "The right to sue under Article 120 of the Limitation Act accrued when the Defendant has clearly and unequivocally threatened to infringe the right asserted by the Plaintiff in the suit. Every threat by a party to such a right, however ineffective and innocuous it may be, cannot be considered to be a clear and unequivocal threat so as to compel him to file a suit, whether a particular threat gives rise to a compulsory cause of action depends upon the question whether that threat effectively invades or jeopardizes the said right.” 19. In Gannon Dunkerley and Co. v. Union of India reported in (1969) 3 SCC 607 , the Hon’ble Supreme Court followed the same principle and observed thus “…….there is no right to sue until there is an accrual of the right asserted in the suit, and its infringement, or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted;…. 20. Thus, the Hon’ble Supreme Court held that the cause of action arose when the rejection was communicated to the party, and on this date, the right to sue accrued. 21. Having regard to the decisions referred above, it must now be taken to be settled that in regard to suits falling under Article 113, the right to sue cannot accrue until the right asserted is infringed or unequivocally threatened. There can be no right to sue until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right by the Defendant against whom the suit is instituted. 22. The right to sue can be said to have accrued would be a question of fact to be determined on the evidence in each case. 22. The right to sue can be said to have accrued would be a question of fact to be determined on the evidence in each case. It can be a pure question of law depending on the facts of a case. The Defendants need to establish that the facts which Plaintiffs knew were such that would have led to the inference that the Defendants never intended to pay Plaintiff. Even if Plaintiff knew some facts which would raise a bare suspicion, it would not be sufficient to hold that he had knowledge about the intention of his debtor not to pay Plaintiffs so that limitation could be deemed to commence against him from that time. 23. The Hon’ble Apex Court in the case of Shakti Bhog Food Industries Ltd. (supra) has relied upon the judgment of the three-Judges Bench of the Hon’ble Apex Court in the case of Union of India And Ors. Vs. West Coast Paper Mills Ltd and Anr. reported in (2004) 2 SCC 747 , which examined the comparative scope of Article 58 and 113 of the Limitation Act, 1963. It is held in paragraph No.21 of the judgment in the case of Shakti Bhog Food Industries Ltd. (supra), which reads as under : “21. A distinction furthermore, which is required to be noticed is that whereas in terms of Article 58 the period of three years is to be counted from the date when “the right to sue first accrues”, in terms of Article 113 thereof, the period of limitation would be counted from the date “when the right to sue accrues”. The distinction between Article 58 and Article 113 is, thus, apparent inasmuch as the right to sue may accrue to a suitor in a given case at different points of time and, thus, whereas in terms of Article 58 the period of limitation would be reckoned from the date on which the cause of action arose first, in the latter the period of limitation would be differently computed depending upon the last day when the cause of action therefor arose.” 24. In my opinion, on the meaningful reading of the plaint, it is clear that the present suit would be governed by Article 113 of the Limitation Act, 1963. In my opinion, on the meaningful reading of the plaint, it is clear that the present suit would be governed by Article 113 of the Limitation Act, 1963. On reading the averments in the plaint, it is clear that Defendant No.1 was under obligation to pay the balance amount to Plaintiff No.2 after the execution of the sale deed in favour of a suitable purchaser and after deducting the principle amount along with 24% interest. The Plaintiffs asserted said right by way of notice dated 21.11.2007. The right to issue accrued in favour of Plaintiffs when Defendant No.1 refused to pay despite service of notice. 25. According to the learned Advocate for the applicants, the Plaintiffs suspected that Defendant No.1 was trying to befool the Plaintiff. It was in January 2007 that the Plaintiffs suspected that Defendant No.1 was trying to befool the Plaintiff. According to the applicants, the Plaintiffs got knowledge about the sale deed on 21.03.2007 and 12.04.2007, that by itself constitutes a cause of action. In my opinion, it is for the Defendants to lead evidence during trial to prove that the facts which Plaintiffs knew were such that would have to lead to the inference that Defendant No.1 never intended to pay Plaintiff No.2. At this stage, without giving an opportunity to the parties to lead evidence, it would be difficult to record a conclusive finding based on mere suspicion that the Plaintiffs had knowledge about the intention of Defendant No.1 not to pay the profits derived out of sale in favour of the third party. Therefore, at this stage, I am satisfied that Defendant No.1 has failed to prove that the suit is barred by law of limitation. 26. In the result, the Civil Revision Application is dismissed. 27. Rule is discharged. 28. Since there was ad interim relief running in favour of the applicants from 2017, the same is continued for a period of six weeks. 29. Pending Civil Application(s), if any, stand(s) disposed of.