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2023 DIGILAW 708 (BOM)

Dilip v. Kisan

2023-03-13

M.S.JAWALKAR

body2023
JUDGMENT M.S. Jawalkar, J. - Being aggrieved by the judgment and order dated 16/07/2022 passed by the learned District Judge No. 18, Nagpur in Regular Civil Appeal No. 110/2021 whereby the Appeal filed by the Respondent came to be allowed, the Appellant has filed the present Second Appeal. 2. The brief facts for deciding the present Second Appeal are as under:- The Respondent herein filed the Suit bearing Special Civil Suit No. 329/2021 for Specific Performance of Contract. It was the contention of the Respondent - Plaintiff in the Suit that the Suit Property was earlier owned by Khadse family. One Vikas Kawale was having very good terms with the Plaintiff who brought the Defendant in the house of the Plaintiff. It is informed by the said Vikas Kawale that the Defendant entered into an Agreement to purchase the Suit Property from Khadse family vide Written Agreement to Sell dated 24/03/2003 and Supplementary Agreement dated 31/03/2004 for total valuable consideration of Rs. 44,77,500/-. It is further contended that the Defendant and Vikas Kawale proposed the Plaintiff to purchase the Suit Property and the Defendant had dropped the idea of retaining the Suit Property. It was also informed that said Khadse family already agreed to sell the property to nominee of the Defendant on inspection and necessary enquiry and after due deliberation and negotiations, the consideration of sale was fixed as Rs. 65,10,000/-. Accordingly, the Agreement to Sell came to be executed between the Plaintiff and the Defendant on 31/10/2004 in presence of Vikas Kawale and other witnesses. Members of Khadse family did not sign the said Agreement and it was informed that they were busy in a family function. The Defendant kept assuring to the Plaintiff that he will obtain the signatures of Khadse family on the said Agreement to Sell. With this assurance, the Plaintiff kept on making part payment of consideration of sale to the Defendant. It is the contention of the Plaintiff that he has paid paid total sum of Rs. 60,50,000/- till date, which is duly acknowledged by the Defendant. There was a Suit filed by the Defendant herein against members of Khadse family in which he succeeded. The Defendant got the Sale-Deed of the Suit Property executed and registered in his favour through Court Officer of Civil Judge Senior Division, Nagpur. It came to be registered on 13/08/2019. 60,50,000/- till date, which is duly acknowledged by the Defendant. There was a Suit filed by the Defendant herein against members of Khadse family in which he succeeded. The Defendant got the Sale-Deed of the Suit Property executed and registered in his favour through Court Officer of Civil Judge Senior Division, Nagpur. It came to be registered on 13/08/2019. Subsequent thereto, the Plaintiff contacted the Defendant and requested to execute the Agreement to Sell dated 31/10/2004, however, the Defendant avoided to perform his part of obligation. In view of this backdrop, the Suit came to be filed for declaration that the act of Defendant cancelling the Agreement dated 31/10/2004 is illegal and not binding upon the Plaintiff. The Agreement dated 31/10/2004 still subsist. It is further prayed for passing of decree of mandatory injunction thereby directing the Defendant to execute a legally enforceable Sale-Deed in respect of the Suit Property in favour of the Plaintiff. In the alternative, the Plaintiff prayed for refund of amount along with interest @ 18% per annum and compensation. After receipt of the summons, the Defendant appeared in the matter and filed Application under Order VII Rule 11(d. of the Civil Procedure Code for rejection of the Plaint on the ground that the Suit is barred by the law of limitation. The Application was strongly opposed by the Plaintiff. After hearing the parties, the learned Trial Court rejected the Plaint on the ground that in view of the Article 54 of the Limitation Act, 1963 (hereinafter referred to as 'the said Act'. and more particularly the second limb of Article 54, the present Suit is barred by the law of limitation. The Suit came to be filed in the year 2021 which came to be rejected under Order VII Rule 11(d). The Plaintiff filed Regular Civil Appeal No. 110/2021 which came to be allowed by the learned Appellate Court. The said judgment and order dated 16/07/2022 passed by the learned Appellate Court is the subject matter of challenge in the present Second Appeal. 3. Following substantial questions of law arise for my determination:- "I. Whether the Learned Lower Appellate Court did not err in drawing wrong conclusion and inferring that there was no privity of contract between the respondent and ..A.. Khadse family and thus as per Article 54 of Limitation Act, would start when the appellant refused to perform his part of contract? II. Khadse family and thus as per Article 54 of Limitation Act, would start when the appellant refused to perform his part of contract? II. Whether the Learned Lower Appellate Court did not err in holding that time was not essence of contract and thus the suit instituted by the respondent was maintainable?" 4. There is no dispute over the fact that there were Agreement to Sell dated 24/03/2003 and Supplementary Agreement dated 31/03/2004 executed between the members of Khadse family and the Defendant herein in respect of the Suit Property. The agreed sale consideration was Rs. 44,77,500/-. There was a clause in the Agreement dated 24/03/2003 that the Vendor will execute the Sale-Deed in favour of the Vendee or in the name of the person which is the nominated by the Vendee. The said term is also reflecting in the Agreement to Sell between the present Plaintiff and the Defendant which reads as under:- "WHEREAS the Purchaser being the Nominee of the Consentor, the Vendors at the request of the Consentor have agreed to sell the aforesaid property to the Purchaser upon the following terms and conditions." 5. There is also clause in the Agreement dated 31/10/2004 that the transaction will be completed by 30/05/2005 by the Vendors/Consentor executing proper Sale-Deeds in favour of the Purchaser or their nominee(s. and the Purchaser by paying the balance sale consideration to the Consentor in the manner stipulated in Clause 2 above. 6. Learned Counsel for the Appellant herein vehemently argued that the Appellant was the Consentor of the said Agreement and the Vendors/members of Khadse family refused to sign the said Agreement. There was no actual delivery of possession as written in the Agreement. The Agreement was executed in presence of one Vikas Kawale who was also present during the deliberations and negotiations when the consideration of sale was fixed as Rs. 65,10,000/-. 7. My attention is drawn to the Paragraphs 10 and 12 of the Plaint, wherein it is mentioned that the legal notice came to be issued by the Plaintiff on 28/01/2021 copy of which also sent to Vikas thereby calling upon the Defendant to perform his part of obligation as per the terms agreed in the Agreement to Sell dated 31/10/2004. My attention is drawn to the Paragraphs 10 and 12 of the Plaint, wherein it is mentioned that the legal notice came to be issued by the Plaintiff on 28/01/2021 copy of which also sent to Vikas thereby calling upon the Defendant to perform his part of obligation as per the terms agreed in the Agreement to Sell dated 31/10/2004. It is contended that in reply to the said notice, the Defendant has admitted the execution of the Agreement to Sell dated 31/10/2004, however, the Defendant denied the contents of the said Agreement. In Paragraph 12 of the Plaint, it is mentioned that the cause of action for filing the instant Suit firstly arose on 16/02/2021 when the Defendant refused to execute the Sale-Deed of the Suit Property in favour of the Plaintiff for the first time and therefore the Suit is within limitation. 8. Learned Counsel for the Appellant, in support of his contentions, relied upon the following judgments:- (a. Vinayak Shankar Bawane & others vs. Tilakraj Indrajeet Chaddha in Civil Revision Application No. 136/2019 decided on 06/03/2020; (b. Sima Hotels & Resorts Limited vs. Dugal Projects Development Company Private Limited reported in 2012 SCC OnLine Bom 1801; (c. Katta Sujatha Reddy & another vs. Siddamsetty Infra Projects Private Limited & others reported in (2023. 1 SCC 355; (d. C.S. Ramaswamy vs. V.K. Senthil & others reported in 2022 SCC OnLine SC 1330; and (e. Harikumar Radhakisan & others vs. Uderam Ramkuwar Firm by owners Ramkuwar Uderam & others reported in 1969 SCC OnLine Bom 23. 9. Learned Counsel for the Appellant has drawn my attention to Article 54 of the said Act, which prescribes the limitation for filing the Suit of Specific Performance of Contract. It is vehemently submitted that it has two limbs, firstly limb will come into play when there is date fixed for the performance and if such date is not fixed in the Contract, then second limb will come into play. In the first contingency, the period of limitation would be three years from the date fixed for the performance and in second contingency, three years when the Plaintiff has noticed that performance is refused. In the first contingency, the period of limitation would be three years from the date fixed for the performance and in second contingency, three years when the Plaintiff has noticed that performance is refused. For the sake of convenience, Article 54 of the said Act is reproduced as under:- PERIOD OF LIMITATIONS FIRST DIVISION-SUITS PART II- SUITS RELATING TO CONTRACTS Description of Suit Period of Limitation Time from which period begins to run 1....... 2....... 54. For specific performance of a contract Three years The date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused. 10. As there is fixed date in the Agreement that the transaction will be completed by 30/05/2005, the limitation will start from running from that date and it will expire after three years. As such, in the present case, the limitation will start from the date 30/05/2005 and will expire on 29/05/2008. In the present matter, it is not relevant when the Vendor refused for execution of the Sale-Deed. As per the provisions of Article 53 read with Section 9 of the said Act, the Suit was definitely time barred. Section 9 of the said Act reads as under:- "9. Continuous running of time.-Where once time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it: Provided that, where letters of administration to the estate of a creditor have been granted to his debtor, the running of the period of limitation for a suit to recover the debt shall be suspended while the administration continues." Thus, when once the time has begun to run, no subsequent disability or inability to institute a Suit or make an Application to stop it. 11. Learned Counsel for the Respondent vehemently opposed the Appeal and submitted that there is no substantial question of law involved in the matter. Initially, the Agreement was executed between the Defendant herein and members of Khadse family on 24/03/2003. There was no time fixed for execution of Contract. Nomination clause is clear in the said Agreement. Whereas the Contract between the Plaintiff and the Defendant was a contingent one. He drawn my attention to Sections 31 and 32 of the Indian Contract Act, 1872. There was no time fixed for execution of Contract. Nomination clause is clear in the said Agreement. Whereas the Contract between the Plaintiff and the Defendant was a contingent one. He drawn my attention to Sections 31 and 32 of the Indian Contract Act, 1872. It is submitted that there was no question of filing any intervention Application or joining the members of Khadse family in the Suit as there was no privity of Contract between the Plaintiff and the members of the Khadse family. My attention was also drawn to the Paragraph 3 of the reply notice wherein it is specifically admitted by the Defendant that he has entered into an Agreement with the Plaintiff for valuable consideration of sale which was fixed as Rs. 65,10,000/-and that in accordance to the terms and conditions, an Agreement to Sell came to be executed between the Plaintiff and the Defendant on 31/10/2004 wherein all the mutually agreeable terms and conditions of the said Agreement were reduced into writing. 12. My attention is also drawn to the mode of payment in Clause (2) of the Agreement which shows that even after the date fixed for completion of transaction i.e. on 30/05/2005, two payments of Rs. 4,00,000/- and Rs. 7,00,000/- respectively were received by the Defendant on 02/06/2005 and 23/10/2005. As such, time was never the essence of Contract. Even the amount is accepted after filing of the Suit by the Defendant against the members of Khadse family. It is the specific pleading in Paragraph 5 of the Plaint that as members of Khadse family refused to sign the Agreement dated 31/10/2004 and informed to the Defendant and Vikas Kawale that the said Agreement is not binding upon them. In such circumstances, the Defendant herein proposed to the Plaintiff that he would file a Suit for Specific Performance of Contract against the members of Khadse family and after getting successful in the said Suit and becoming the owner of the Suit Property, he would sell the same to the Plaintiff in furtherance of their Agreement dated 31/10/2004. Accordingly, he filed Special Civil Suit No. 697/2005. It is submitted that the act of the Defendant of receiving the part payment of sale consideration from the Plaintiff even after institution of the said Suit re-affirms the commitment of the Defendant to honour the Agreement to Sell dated 31/10/2004. Accordingly, he filed Special Civil Suit No. 697/2005. It is submitted that the act of the Defendant of receiving the part payment of sale consideration from the Plaintiff even after institution of the said Suit re-affirms the commitment of the Defendant to honour the Agreement to Sell dated 31/10/2004. The said Suit has recently been finally adjudicated in favour of the Defendant and the Defendant got the Sale-Deed executed on 13/08/2019. Thereafter, the Plaintiff approached the Defendant for execution of the Sale-Deed in his favour, however, he refused to do so. Thus, the Plaint cannot be rejected without there being full-fledged enquiry and evidence is adduced. 13. Learned Counsel for the Respondent, in support of his contentions, relied upon the following judgments:- (a. Dahiben vs. Arvindbhai Kalyanji Bhanusali (Gajra) Dead Through Legal Representatives & others reported in (2020) 7 SCC 366 ; (b. Sri Biswanath Banik & another vs. Sulanga Bose & others reported in 2022(4) Mh.L.J. 239; and (c. Urvashiben & another vs. Krishnakant Manuprasad Trivedi reported in (2019) 13 SCC 372 . 14. I have heard the learned Counsel for both the parties, considered the rival contentions and the judgments cited. 15. Learned Senior Counsel for the Appellant relied on Katta Sujatha Reddy (supra) wherein the Hon'ble Apex Court held that 'Article 54 of the Limitation Act provides for two consequences based on the presence of fixed time period of performance. It is only in a case where the time period for performance is not fixed that the purchaser can take recourse to the notices issued and the vendors' reply thereto.' 16. In my opinion, the facts involved in the matter in Katta Sujatha Reddy (supra)are distinguishable. Time was the essence of the Contract in the matter before the Hon'ble Apex Court and therefore by applying the first part of Article 54 of the said Act, it was held that the Suit was clearly barred by limitation and no amount of payment of advance could have remedied such a breach of condition. 17. Learned Senior Counsel for the Appellant also relied on Sima Hotels & Resorts Limited (supra) wherein this Court in Paragraph 9 has held as under:- "9. 17. Learned Senior Counsel for the Appellant also relied on Sima Hotels & Resorts Limited (supra) wherein this Court in Paragraph 9 has held as under:- "9. Perusal of the impugned order discloses that though the ground that the suit was barred by limitation was raised, the petitioner did not place reliance upon Section 9 of the Limitation Act and consequently, the trial Court dd not deal with the same. No doubt, the defendant ought to have raised the issue before the learned trial Court by placing reliance upon Section 9. But the fact remains that the issue of limitation raised by the petitioner based on Section 9 of the Limitation Act, goes to the root of the matter inasmuch in the event the submission of the defendant that Section 9 is attracted is accepted, the necessary sequitur is that the plaint will have to be rejected on the ground that the suit is barred by limitation." 18. Learned Senior Counsel for the Appellant also relied on Harikumar Radhakisan (supra), however, in my considered opinion, it is not applicable in the present set of facts. It is also cited in support of the contention of the Appellant that as per Section 9 of the said Act, once the time has begun to run, no subsequent disability or inability to institute a Suit or make an Application stops it. 19. Learned Senior Counsel for the Appellant also relied on the unreported judgment in the case of Vinayak Shankar Bawane (supra) wherein this Court has held that 'the Court below erroneously held that since time was not the essence of the Contract, the issue of limitation would necessarily be a mixed question of fact and law, to be determined upon trial. A perusal of the Plaint in the said case and the clauses of the Agreement which were placed on record along with the Plaint were showing that on the basis of such pleadings and material on record, the Suit was barred by limitation on the face of it and the Application filed by the Revision Applicants deserved to be granted.' Thus, it is vehemently argued that from the Plaint, it is clear it is a pure question of law. 20. The facts involved in the matter of Vinayak Shankar Bawane (supra) are distinguishable from the facts involved in the present matter. 20. The facts involved in the matter of Vinayak Shankar Bawane (supra) are distinguishable from the facts involved in the present matter. It was clear that even if question of limitation was to be considered on the basis of the second limb of Article 54 of the said Act, the Respondent himself has specifically stated in the Plaint that the Revision Applicants had avoided to perform their part of Contract on one or the other count, thereby showing that he was aware about the repudiation by the Revision Applicants and he had waited to file the Suit till 01/04/2019 specifically when the Agreement was of dated 25/12/2007. Here in the present matter whether there was refusal or assurance on the part of the Defendant will have to be ascertained by leading evidence. 21. Learned Senior Counsel for the Appellant also relied on C.S. Ramaswamy (supra) wherein it is held that 'from the averments in the plaint and the bundle of facts stated in the plaint, we are of the opinion that by clever drafting, the plaintiffs have tried to bring the suits within the period of limitation, which otherwise are barred by limitation and the same are required to be rejected in exercise of powers under Order VII Rule 11 CPC.' 22. So far as the Special Civil Suit No. 697/2005 is concerned, the present Appellant - Defendant filed the same as the Agreement was enforceable. When the Agreement of Sale was executed between the Appellant - Defendant & Respondent herein on 31/10/2004, title was not passed to the Defendant. Thus, he was not having any title to be passed over. As such, till 13/08/2019, there was no cause of action to file Suit. Subsequent thereto, refusal on the part of the Defendant gave cause of action to file Suit. It is vehemently submitted by the Counsel for the Appellant that the learned Appellate Court ignored the first part Section 54 and Section 9 of the said Act. The Plaintiff herein ought to have filed Suit within three years from the date fixed for execution of the Sale-Deed i.e. 30/05/2005 or ought to have intervened in the Suit filed by the Defendant against the members of Khadse family. 23. The Plaintiff herein ought to have filed Suit within three years from the date fixed for execution of the Sale-Deed i.e. 30/05/2005 or ought to have intervened in the Suit filed by the Defendant against the members of Khadse family. 23. Learned Counsel for the Respondent drawn my attention to Section 19(b) of the Specific Relief Act, 1963 by which relief of Specific Performance of a Contract may be enforced against any other person claiming under him by a title arising subsequently to the contract.... It is submitted that whether there was refusal or assurance is a matter of trial. It is submitted by the learned Counsel that the learned Appellate Court has rightly appreciated the facts and circumstances and there is no fault in the order passed by the learned Appellate Court in rejecting the Application under Order VII Rule 11(d) of the Civil Procedure Code. 24. Learned Counsel for the Respondent relied on the judgment in the case of Dahiben (supra)wherein the Hon'ble Apex Court has held that 'the remedy under Order VII Rule 11 is an independent and special remedy, wherein the Court is empowered to summarily dismiss a suit at the threshold, without proceeding to record evidence, and conducting a trial, on the basis of the evidence adduced, if it is satisfied that the action should be terminated on any of the grounds contained in this provision. The underlying object of Order VII Rule 11 (a) is that if in a suit, no cause of action is disclosed, or the suit is barred by limitation under Rule 11 (d), the Court would not permit the plaintiff to unnecessarily protract the proceedings in the suit. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted. The whole purpose of conferment of such power is to ensure that a litigation which is meaningless, and bound to prove abortive should not be permitted to occupy the time of the Court, and exercise the mind of the respondent. The power conferred on the court to terminate a civil action is, however, a drastic one, and the conditions enumerated in Order VII Rule 11 are required to be strictly adhered to.' Thus, the Plaintiff cannot be thrown at the threshold without granting any opportunity to substantiate his claim specifically when the Agreement is admitted by the Defendant. The power conferred on the court to terminate a civil action is, however, a drastic one, and the conditions enumerated in Order VII Rule 11 are required to be strictly adhered to.' Thus, the Plaintiff cannot be thrown at the threshold without granting any opportunity to substantiate his claim specifically when the Agreement is admitted by the Defendant. 25. Learned Counsel for the Respondent further relied on Sri Biswanath Banik (supra)wherein similar view has been taken by the Hon'ble Apex Court. He also relied on Urvashiben & another (supra)wherein the Hon'ble Apex Court held that 'it is fairly well settled that, so far as the issue of limitation is concerned, it is a mixed question of fact and law. It is true that limitation can be the ground for rejection of plaint in exercise of powers under Order VII Rule 11(d. of the CPC. Equally, it is well settled that for the purpose of deciding application filed under Order VII Rule 11 only averments stated in the plaint alone can be looked into, merits and demerits of the matter and the allegations by the parties cannot be gone into. When rejection of plaint is sought in an application filed under Order VII Rule 11, same is to be considered from the facts of each case, looking at the averments made in the plaint, for the purpose of adjudicating such application.' 26. From the plain reading of the Plaint and the supporting documents, it appears that the members of Khadse family executed Agreements dated 24/03/2003 and 31/03/2004 and thereby agreed to sell the Suit Property to the Defendant or to his nominee. On the basis of the said Agreement, the Defendant herein executed Agreement dated 31/10/2004 and thereby agreed to sell the Suit Property to the Plaintiff. In pursuance of the Agreement, the Plaintiff paid total sum of Rs. 60,50,000/- as against the sale consideration of Rs. 65,10,000/-. The learned Appellate Court rightly appreciated that time was not the essence of Contract which can be seen from Clause (8. of the Agreement dated 31/10/2004 which stipulates that in case of failure, the Plaintiff to pay sale consideration amount, within the stipulated period, the Defendant shall be entitled to claim and receive interest @ 12% per annum. It is also well settled principles of law that in case of sale of immovable property, time is not the essence of Contract. of the Agreement dated 31/10/2004 which stipulates that in case of failure, the Plaintiff to pay sale consideration amount, within the stipulated period, the Defendant shall be entitled to claim and receive interest @ 12% per annum. It is also well settled principles of law that in case of sale of immovable property, time is not the essence of Contract. The averments in the Plaint prima facie shows that there was no refusal on the part of the Defendant to perform his part of Contract till 13/08/2019. On the said date, the Registered Sale-Deed came to be executed in favour of the Defendant through Court Proceeding in Suit filed by the Defendant against members of Khadse family. On 28/01/2021, the Plaintiff issued legal notice calling upon the Defendant to perform his part of Contract i.e. to execute the Sale-Deed, however, the same was denied by way of notice reply. From these averments, the cause of action to file the Suit arose on 13/08/2019 and on 28/01/2021 and the Suit is filed on 20/04/2021. Prior to 13/08/2019, the Defendant himself was not having any title of the Suit Property. Therefore, he was not in a position to execute the Sale-Deed in favour of the Plaintiff herein. Another fact which clearly shows that the time was never the essence of Contract as the Defendant accepted the amount even after the date fixed for completion of the transaction and also even after filing of the Suit by the Defendant herein against the members of Khadse family. As rightly observed by the learned Appellate Court, there is no forfeiture clause which entitles the Defendant to forfeit the amount paid by the Plaintiff. 27. Considering the facts and circumstances and the law position, I do not see any error or illegality in the impugned order passed by the learned First Appellate Court in allowing the Appeal filed by the Plaintiff. Accordingly, I answer both the substantial questions of law framed in the negative. 28. Accordingly, the Appeal stands dismissed. Decree be drawn up accordingly. Pending Application(s), if any, stand(s) disposed of.