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2024 DIGILAW 1482 (GUJ)

Mahendra Radheshyam Goyal v. LH of Patel Hasmukhbhai Harmanbhai

2024-07-02

BIREN VAISHNAV, NISHA M.THAKORE

body2024
JUDGMENT : NISHA M. THAKORE, J. 1. The present appeal is filed by a partnership firm through his administrator partners who were the original plaintiffs in Special Civil Suit preferred by them seeking specific performance of agreement to sell as well as for declaration and permanent injunction in respect of the suit land. The learned Civil Judge while entertaining the application preferred by the present respondents – original defendants at Exh.22, under Order-VII Rule-11(a)(d) of the Code of Civil Procedure, has consequently rejected the suit by order dated 18th January, 2024 passed in Special Civil Suit no.102 of 2021. 2. In nutshell the averments made by the original plaintiff firm, in the plaint are as under :- 2.1 The old tenure land bearing revenue survey no.1 of Mouje Udera, sub-district District Vadodara is of joint ownership of the defendants (hereinafter referred to as the suit land). The aforesaid land was admeasuring 3136 sq. mtrs. and fall within the residential zone of GUDA. The defendants herein were in need of financial assistance and had therefore, approached the plaintiff firm to sell the aforesaid suit land. The plaintiff on the other hand intended to purchase the suit land for non-agricultural purpose or for residential purpose by payment of appropriate premium. 2.2 The parties have therefore mutually agreed and fixed the consideration of the suit land @ Rs.1001/- per sq. ft., which was to be paid after the conversion of the suit land into nonagriculture land and subject to measurement. The terms and conditions of the agreement to sell were reduced in writing by executing the agreement to sell dated 12th August, 2011 before the Notary in presence of two witnesses. The aforesaid agreement to sell was executed by original defendant nos.1 and 2 and had also received an amount of Rs.11,11,000/- as acknowledge in the agreement to sell, which was witnessed by the original defendant no.1/2. 2.3 The plaintiff had thereafter approached the defendant nos.1 and 2 and as instructed had paid further amount of consideration by handing over the cheque no.1361 of Dhanlaxmi Bank of an amount of Rs.30,000/- to the son of the defendant no.1 viz. Tusharbhai Patel (defendant no.1/2) and cheque bearing no.953502 of Punjab National Bank of an amount of Rs.20,000/-. 2.3 The plaintiff had thereafter approached the defendant nos.1 and 2 and as instructed had paid further amount of consideration by handing over the cheque no.1361 of Dhanlaxmi Bank of an amount of Rs.30,000/- to the son of the defendant no.1 viz. Tusharbhai Patel (defendant no.1/2) and cheque bearing no.953502 of Punjab National Bank of an amount of Rs.20,000/-. The plaintiff had therefore pleaded that total sale consideration of Rs.16,61,000/- which also include an amount of Rs.2,00,000/- given in cash to the defendant no.2 and the expenses of Rs.3,00,000/- incurred for conversion of the land into NA, which was paid in the year 2016 in different parts. 2.4 It was agreed between the parties that the aforesaid amount shall be adjusted towards the final sale consideration amount and remaining amount was to be paid after the conversion of the land into NA land. The plaintiff had at every stage shown his readiness and willingness to fulfill the terms and conditions of the contract since the plaintiff had already made payment of the major part of the sale consideration, the defendants were requested to handover the possession and therefore, the plaintiff claims to be in possession of the suit land. The plaintiff has further pleaded that the appropriate proceedings were also undertaken by the defendants for converting land for NA purpose. However, in the revenue proceedings, the suit land was recognized as Devsthan land and was therefore treated as new tenure land. 2.5 Consequently, the Collector had refused to grant NA permission and had sought payment of premium for such conversion. As per the plaintiff, the defendants have assured to make payment of the premium amount and the plaintiff had relied upon such assurance. However, though the period had expired, the defendants have failed to undertake such exercise. 2.6 The plaintiffs were therefore constrained to issue legal notice dated 15th March, 2016, which was duly served upon the defendant through RPAD. It is pleaded that the defendants have immediately approached the plaintiffs and have once again assured to get convert the land into NA upon deposit of the requisite premium within the span of 15 to 18 months. The defendants have failed to act accordingly and the plaintiffs having realized about the fraud being committed by the defendants have once again addressed legal notice dated 24th March, 2021. The defendants have failed to act accordingly and the plaintiffs having realized about the fraud being committed by the defendants have once again addressed legal notice dated 24th March, 2021. The said notice was received by the defendants on 30th March, 2021 and vague reply was given by the defendants on 17th April, 2021. 3. While referring to the aforesaid chronology of events, the plaint was presented by the appellant firm before the Court of learned Civil Judge, Vadodara on 18th June, 2021 seeking following reliefs :- (i) The defendant nos.1/1 to 1/3 and defendant no.2 having executed Banakhat dated 12th August, 2011, in respect of the land bearing Block / survey no.1 of Mouje Udera be directed for specific performance of such agreement; (ii) The defendants be directed to act in compliance with the NA permission order issued by the Collector in light of the terms and conditions of the agreement and further be directed to accept the remaining amount of the sale consideration from the plaintiff by executing registered sale deed; (iii) Pending the suit, the defendant and/or his agents be restrained from alienating the suit land in favour of third parties in any manner and to declare that the plaintiffs being the bonafide purchasers. 4. The aforesaid plaint culminated into registration of the Civil Suit being the Special Civil Suit no.102 of 2021. Noticing the aforesaid chronology of events, initially the summons were issued by the respondents – original defendants. The respondent original defendants had appeared before the trial Court and application Exh.22 was submitted on 12th April, 2022 under O.VII Rule-11(a)(d) of the Code. The defendants have inter alia had raised the contention that the suit was required to be rejected at the threshold on the ground that it does not disclose any cause of action, the suit was barred by law of limitation as well as, the provisions of Section 63 of the Gujarat Tenancy and Agricultural Land Act, 1948 and Section 69(2) of the Indian Partnership Act. It was specifically contended that though the cause title of the suit refers to the presentation of the plaint through the partner of the partnership firm, nowhere in the plaint it is disclosed by the plaintiff firm of being registered. It was specifically contended that though the cause title of the suit refers to the presentation of the plaint through the partner of the partnership firm, nowhere in the plaint it is disclosed by the plaintiff firm of being registered. It was also contended that in view of the refusal of non-agriculture permission, on 9th November, 2011, the revenue proceedings were initiated in respect of the suit land. In fact, the plaintiff is nonagriculturist and the agreement to sell in respect of agriculture land was required to be treated as void ab-initio in view of the prohibition expressed in terms of Section 63 of the Tenancy Act. Reliance was placed on the legal notice dated 15th March, 2016 as mentioned in the plaint, whereby the defendants were called-upon to act as per the terms and conditions of the agreement within the period of 10 days. It was therefore, contended that right to present the suit for specific performance had first accrued on expiry of the aforesaid period of 10 days from the date of issuance of notice dated 15th March, 2016. The plaint was presented in the year 2021 and therefore, the suit was not maintainable in view of the bar expressed under O.VII Rule 11(d) read with Article 54 of the Limitation Act. 5. The aforesaid contentions raised by the defendants were examined by the learned Civil Judge in light of the pleadings of the original plaintiff. Though the learned Civil Judge was not impressed of the contention of absence of the pleadings as regards registration of the partnership firm, had entertained the application under O.VII Rule-11(d) considering the rest of the contentions raised by the defendants, by the impugned order dated 18th January, 2024 passed below Exh.22 filed in Special Civil Suit no.102 of 2021. The learned Senior Civil Judge by allowing the said application, had rejected the plaint leading to dismissal of the aforesaid suit. Hence, this appeal at the instance of the original plaintiffs. 6. Mr. Malaykumar Patel, learned advocate for the appellants has vehemently disputed the findings of the learned Civil Judge on the issue of limitation. The learned Senior Civil Judge by allowing the said application, had rejected the plaint leading to dismissal of the aforesaid suit. Hence, this appeal at the instance of the original plaintiffs. 6. Mr. Malaykumar Patel, learned advocate for the appellants has vehemently disputed the findings of the learned Civil Judge on the issue of limitation. According to the learned advocate, the very conduct of the defendants of accepting the amount of sale consideration even after rejection of NA permission on 9th November, 2011, in absence of any specific refusal to not to abide by the terms and conditions of the contract, had led the original plaintiffs to believe the assurance of the defendants to get convert the land and to make payment of the premium. 7. It was therefore submitted that the learned Judge ought not to have exercised power under O.VII Rule-11 and ought not to have dismissed the suit at the threshold, as the aforesaid pleadings were required to be adjudicated in light of the evidence. Our attention was invited to the pleadings made by the original plaintiff wherein reference was made to the two cheques received by the son of the deceased defendant no.1. It was further submitted that in fcat expenses were also incurred by the plaintiff to get convert the suit land into NA land. The plaintiffs were therefore bonafide purchasers and it was the defendants who have not acted as per the terms and conditions of the agreement. He had therefore contended that the principles of equity demand to protect such bonafide purchasers. 8. With regard to issue of cause of action is concerned, the learned advocate has submitted that on the date of execution of agreement to sell i.e. on 12th August, 2011, the suit lands were treated as old tenure land in the revenue record. Moreover, specific condition was incorporated in the agreement to sell to get convert such land into NA and subject to such permission, the parties have agreed to thereafter execute the registered sale deed. He therefore, submitted that it was only when the defendants by reply dated 17th April, 2021 had evaded request of the original plaintiffs to get transfer the suit land by registered sale deed, the cause of action had arose for the plaintiff to approach the concerned Court by filing suit for specific performance. 9. He therefore, submitted that it was only when the defendants by reply dated 17th April, 2021 had evaded request of the original plaintiffs to get transfer the suit land by registered sale deed, the cause of action had arose for the plaintiff to approach the concerned Court by filing suit for specific performance. 9. The aforesaid submissions of the learned advocate for the appellant were vehemently opposed by Ms. Arti Inamdar, learned advocate for the respondents – original defendants. Ms. Inamdar, learned advocate for the respondent at the outset had invited our attention to the reasons assigned by the learned Judge while entertaining the application filed by the defendants at Exh.22 under O.VII Rule-11 of the Code. 10. According to the learned advocate for the respondent, the learned Judge has rightly dismissed the suit by noticing the fact that the enforcement of the transaction involving restricted tenure agriculture land was not enforceable by law in view of Section 23 of the Indian Contract Act. She had further submitted that apart from the aforesaid issue, the learned Judge has rightly taken into consideration the issue of limitation as the present suit was not filed within the period of 3 years as per Article 54 of the Limitation Act. 11. The learned advocate for the respondent had not disputed about the execution of an agreement to sell and the fact of amount received thereunder. While responding to the submission made by the learned advocate for the appellant to consider his case for alternative prayer for compensation, she submitted that though no such prayer has been sought for in the original proceedings, however, she has been instructed to submit that the respondents – original defendants were always ready to repay the Bana amount as acknowledged under the agreement to sell. By making the aforesaid submission, she has urged this Court not to entertain this appeal as no error of fact or law is pointed-out by the appellant for admission of the present appeal. 12. By making the aforesaid submission, she has urged this Court not to entertain this appeal as no error of fact or law is pointed-out by the appellant for admission of the present appeal. 12. Having heard learned advocates appearing for the respective parties and having perused the impugned order and the documents placed on record in form of paper-book forming part of the original proceedings, in substance, we have been called-upon to examine as to whether the learned Judge has committed any error in dismissing the suit at the threshold by exercising power conferred under Order VII Rule-11 of Code of Civil Procedure, in the facts and circumstances of the case. 13. Admittedly, the parties have entered into a notarized agreement to sell dated 12th August, 2011 in respect of the suit land. The bare perusal of the recital of the aforesaid agreement to sell describes the suit land as an old tenure land claimed to be an ancestral land derived by the original defendants. As per the terms and conditions of such agreement, the purchaser of the property has agreed for sale consideration of Rs.1,001/- per sq. ft. with the owner of the property. The owner of the property has also acknowledged the fact of receipt of token amount of Rs.1,11,000/- on 19th July, 2011 and two cheques bearing no.222432 of an amount of Rs.5,00,000/- and cheque no.222433 of an amount of Rs.5,00,000/- being received on 11th August, 2011 and has thereby acknowledged the fact of receipt of Bana amount of Rs.11,11,000/-. It has been further clarified that the remaining amount of sale consideration was to be paid within the period of 15 to 18 months from the date of obtaining NA permission and subject to the measurement of the land agreed to be sold. 14. As agreed between the parties, clause-7 of the said agreement was to be treated as the main condition. The bare reading of clause-7 of the agreement to sell indicates the intention of the parties that time was treated as the essence of the contract. As per the said clause, it was specifically mentioned that the purchaser was expected to make payment of the remaining sale consideration in the specified time period to get execute the registered sale deed. The bare reading of clause-7 of the agreement to sell indicates the intention of the parties that time was treated as the essence of the contract. As per the said clause, it was specifically mentioned that the purchaser was expected to make payment of the remaining sale consideration in the specified time period to get execute the registered sale deed. It was also clarified that in case if the sale deed was to be executed in favour of the third person, the seller would not raise objection and consent to such transaction. In other words, what can be inferred from the reading of the aforesaid recital goes to indicate that indisputedly the purchaser was a partnership firm and the requirement of NA permission before the execution of the registered sale deed in respect of the suit land was the status of the partnership firm being a non-agriculturist. 15. As agreed between the parties, the owner had in fact applied for grant of NA permission by moving appropriate application before the Collector. However, in the proceedings before the Collector, the suit land transpired as Devsthani land, which resulted into the refusal of NA permission. It also transpired that the suit land was a restricted tenure land and was therefore, treated as new tenure land which led to demand of premium at the instance of the State authorities. 16. The bare reading of the plaint goes to suggest that the NA permission was refused by the Collector officer, Vadodara by letter no.Jamin/D/Sec-65/Vashi/7054/2011, treating it as Inami Satta Prakar land and was subsequently treated as new tenure land by Collector office, Vadodara by his letter no.Jamin/D/Sec-65/Vashi/7093/2012. Thus, around the year 2011-12, the NA permission was refused and the essential condition to be fulfilled prior to execution of sale deed was not granted. As per the plaint, the legal notice was addressed through the advocate on 15th March, 2016 requesting the defendants to seek conversion of land and in spite of assurance given and on the other hand consideration amount being received from time to time, the time period was consumed by the defendants. As per the plaint, the legal notice was addressed through the advocate on 15th March, 2016 requesting the defendants to seek conversion of land and in spite of assurance given and on the other hand consideration amount being received from time to time, the time period was consumed by the defendants. It was only when the defendant had refused to perform their part of obligation in view of the reply dated 17th April, 2021 given to the legal notice dated 24th March, 2021, the cause of action had arose for the plaintiff to file the civil suit, is nothing but an attempt to create an illusory cause so as to bring the suit within the prescribed period of limitation. 17. The suit for specific performance of agreement to sell is governed by Article 54 of the Limitation Act, which reads thus: “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.” The plain reading of the aforesaid provision indicates that the Limitation Act prescribes three years’ period for filing of suit seeking specific performance from the date fixed for performance in the agreement to sell and in case no such date is fixed, then the date on which the plaintiff notices the fact that the performance is refused by the defendant. The reading of the aforesaid provision indicates two eventualities for considering the period of limitation of three years, first part of the aforesaid article applies in case of the agreement where the time period is fixed for performance, whereas the second part of the provision deals with a situation where the starting point of limitation shall be from the date when the performance is refused. 18. Though the learned advocate in light of the cause of action pleaded, has tried to project the case to consider the period of limitation from the date when the defendant refused to perform his part of obligation i.e. the reply dated 17th April, 2021 addressed by the defendant to the legal notice dated 24th March, 2021, we are of the view that in fact as per the terms and conditions of the contract, the registered sale deed was to be executed within the period of 15 to 18 months from the date of obtaining NA permission. Undisputedly, the obligation was on the owner – original defendants to obtain NA permission. It is an undisputed fact that the owners have applied for NA permission and have acted as per terms and conditions of the agreement. However, the subsequent turning of the events led to a situation whereby the land was not only required to be converted into NA land, but additionally the question of payment of premium also arose for conversion of land from new tenure to old tenure. As evident from the reading of the plaint itself, the aforesaid facts have emerged in the year 2011-12 in light of the refusal of NA permission by the State authorities. The conversion of land to NA purpose was the essential condition to be fulfilled for entering into the sale transaction by the plaintiff. The clarification in clause-7 which was otherwise required to be treated as the main clause of the agreement to sell, clarified the fact that in case the purchaser intended to get execute registered sale deed in favour of the third party, the owner of the land were precluded from raising any objection upon such transaction and were in fact expected to give their consent. The aforesaid clarification goes to infer in the subsequent turn of events, did not preclude the purchaser from asking for specific performance of the agreement to sell in favour of the third party. 19. In view of the aforesaid facts, we are of the view that the cause of action arose, as soon as, the Collector refused to grant NA permission for conversion of land way back in the year 2011-12. It is also evident from the reading of the plaint that legal notice dated 15th March, 2016 was addressed by the plaintiff to the defendant seeking conversion of the land which was followed by the subsequent notice dated 24th March, 2021. 20. From the close reading of the plaint, nothing has transpired to explain the passing of the period of 5 years in interregnum. The only averment, which is made in the plaint, is that the plaintiff was pursuing the defendants for conversion of the land, which the defendants have assured. 20. From the close reading of the plaint, nothing has transpired to explain the passing of the period of 5 years in interregnum. The only averment, which is made in the plaint, is that the plaintiff was pursuing the defendants for conversion of the land, which the defendants have assured. In our opinion, by making such averments in the plaint, the plaintiffs may have tried to create illusory cause of action so as to overcome the period of limitation, which has otherwise expired much prior in point of time i.e. on the date when the Collector has refused to grant NA permission. 21. In our opinion, the non-performance of the duty cast upon the owner of the land to obtain NA permission also includes the right to file an appeal against the refusal of NA permission within stipulated statutory period provided under the Act. Nothing has transpired on record to suggest that the defendants have applied for an appeal against such refusal of NA permission before the higher forum. In other words, the in action of the defendant to obtain NA permission within stipulated time period was definitely a ground for seeking specific performance of agreement to sell. The lapse of period of 10 years from the refusal of grant of NA permission, non- filing of any appeal beyond the stipulated period of limitation or even beyond the reasonable period of limitation, the plaintiffs were not expected to wait indefinitely till the respondents – original defendants were able to obtain the permission. 22. Appropriate would be to look into the relevant observations of the Supreme Court in case of Sabbir (dead) through L.Rs. Vs. Anjuman (since deceased) through LRs, 2023 SCC online SC 1292, wherein in similar set of facts, the Court arrived at the conclusion that the purchaser to the agreement to sell cannot take the plea that they would be entitled to indefinitely wait till the owner informs them about the permission. Vs. Anjuman (since deceased) through LRs, 2023 SCC online SC 1292, wherein in similar set of facts, the Court arrived at the conclusion that the purchaser to the agreement to sell cannot take the plea that they would be entitled to indefinitely wait till the owner informs them about the permission. The Hon’ble Supreme Court had referred to Article 54 of the schedule to the Limitation Act providing limitation for filing the suit for specific performance, as well as, the law laid down in the case of Ghewarchand vs. Mahendra Singh, (2018) 10 SCC 588 , which required the Court to see the allegations made in the plaint and the approval of the cause of action for filing of the suit pleaded by the plaintiff at the time of examining the question of limitation. The Hon’ble Supreme Court had also referred to the relevant observations made by the Court in the case of Basawaraj Vs. Land Acquisition Officer, (2013) 14 SCC page – 81, the same is reproduced hereunder: “12. It is a settled legal proposition that law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes. The court has no power to extend the period of limitation on equitable grounds. “A result flowing from a statutory provision is never an evil. A court has no power to ignore that provision to relieve what it considers a distress resulting from its operation.” The statutory provision may cause hardship or inconvenience to a particular party but the court has no choice but to enforce it giving full effect to the same. The legal maxim dura lex sed lex which means “the law is hard but it is the law”, stands attracted in such a situation. It has consistently been held that, “inconvenience is not” a decisive factor to be considered while interpreting a statute. 13. The statute of limitation is founded on public policy, its aim being to secure peace in the community, to suppress fraud and perjury, to quicken diligence and to prevent oppression. It seeks to bury all acts of the past which have not been agitated unexplainably and have from lapse of time become stale. According to Halsbury's Laws of England, Vol. 28, p. 266: “605. It seeks to bury all acts of the past which have not been agitated unexplainably and have from lapse of time become stale. According to Halsbury's Laws of England, Vol. 28, p. 266: “605. Policy of the Limitation Acts.— The courts have expressed at least three differing reasons supporting the existence of statutes of limitations namely, (1) that long dormant claims have more of cruelty than justice in them, (2) that a defendant might have lost the evidence to disprove a stale claim, and (3) that persons with good causes of actions should pursue them with reasonable diligence.” An unlimited limitation would lead to a sense of insecurity and uncertainty, and therefore, limitation prevents disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or laches. (See Popat and Kotecha Property v. SBI Staff Assn. [ (2005) 7 SCC 510 ], Rajender Singh v. Santa Singh [ (1973) 2 SCC 705 : AIR 1973 SC 2537 ] and Pundlik Jalam Patil v. Jalgaon Medium Project [ (2008) 17 SCC 448 : (2009) 5 SCC (Civ) 907].)” (emphasis supplied) 23. In our opinion, the suit for enforcement of agreement to sell which would otherwise be filed in the year 2011 has been filed in the year 2021. The suit is therefore, hopelessly time barred. Admittedly, it is the case of the plaintiff that NA permission was rejected in the year 2011, whereas the first legal notice was addressed by the plaintiff in the year 2016 seeking enforcement of agreement to sell. Thereafter, there is no explanation in the plaint as regards the interregnum period of 5 years i.e. from the year 2016 of issuing legal notice seeking enforcement till the year 2021 when the suit was filed. The subsequent refusal of performance of agreement to sell in the year 2021 by the defendant would not give premium to the appellant to contend that the suit was filed within the period of limitation. 24. We find no fault with the findings of the trial Court and hence, the first appeal stands dismissed. In view of the dismissal of the main matter, connected civil application stands disposed of.