Research › Search › Judgment

Karnataka High Court · body

2024 DIGILAW 279 (KAR)

L R Ananth v. S Jayaramachandran

2024-04-19

C.M.POONACHA, KRISHNA S DIXIT

body2024
JUDGMENT : Mr. C.M. Poonacha, J. - The present appeal is filed by the plaintiff challenging the order dated 20.1.2016 passed on issue No.8 in OS No.4088/2005 by the XXXIX Additional City Civil Judge, Bangalore City (Hereinafter referred to as the 'Trial Court'), whereunder the Trial Court answered issue No.8 in the affirmative and dismissed the suit as barred by limitation. 2. For the sake of convenience, the parties herein are referred to as per their ranking before the Trial Court. 3. The relevant facts necessary for consideration of the present appeal are that the plaintiff filed a suit for specific performance to direct the defendants to execute the registered Sale Deed in performance of the agreement dated 22.2.1996 by receiving the balance sale consideration. It is the case of the plaintiff that he agreed to purchase the suit property from the first defendant for a total sale consideration of Rs. 32.00 lakhs and they entered into an Agreement of Sale dated 22.2.1996 with regard to the same and on the said date, an advance of Rs. 5.00 lakhs was paid. That the first defendant was the General Power of Attorney Holder of the second defendant who was the owner of the property. That subsequently, after settling the tenants, the plaintiff occupied the suit property. It is further averred that the term for completion of the sale transaction was nominally fixed as 3 months. However, the defendants have failed to comply with their obligation and the transaction was not completed within the said period. However, the time for completion was extended, and that the plaintiff paid a further sum of Rs. 5.00 lakhs on 27.1.1997 through a Demand Draft as also a sum of Rs. 10.00 lakhs by a post dated cheque. Despite the plaintiff notifying the defendants for completion of the transaction and the plaintiff being ready and willing to perform his part of the contract, defendant Nos.1 and 2 have not completed the sale transaction. The plaintiff having noticed that the first defendant is making negotiations with other parties, the suit for specific performance was filed. 4. Defendant Nos.1 and 2 entered appearance in the suit and filed their written statements. They admit execution of the Agreement of Sale dated 22.2.1996 and receipt of advance of Rs. 5.00 lakhs. The plaintiff having noticed that the first defendant is making negotiations with other parties, the suit for specific performance was filed. 4. Defendant Nos.1 and 2 entered appearance in the suit and filed their written statements. They admit execution of the Agreement of Sale dated 22.2.1996 and receipt of advance of Rs. 5.00 lakhs. However, it is contended that the plaintiff having failed to complete the sale transaction, the defendant Nos.1 and 2 have terminated the sale agreement. That the plaintiff is in occupation of the suit property as a tenant and his tenancy has been terminated by issuing a notice dated 17.6.1997 as also by a paper publication on 9.3.2002. That the further payment of Rs. 5.00 lakhs is received towards the rent amount. That defendant Nos.1 and 2 have already sold the suit property and defendant Nos.3 to 5 are the subsequent purchasers of the suit property from defendant Nos.1 and 2 under the registered Sale Deed dated 26.2.2005. 5. Consequent to the pleadings of the parties, the Trial Court vide order dated 2.12.2010 has framed 10 issues. Thereafter, vide order dated 12.12.2011 issue No.8 was re-casted and framed as follows: "8. Is the suit barred by time?" 6. The plaintiff adduced evidence on Issue No.8 by examining himself as PW.1 and also examined PW.2. Exs.P1 to P3 were marked in evidence. The defendants have not adduced any oral or documentary evidence. The Trial Court by its order dated 20.1.2016 held issue No.8 in the affirmative and dismissed the suit of the plaintiff as barred by time. Being aggrieved, the present appeal is filed. 7. Leaned counsel for the appellant/plaintiff vehemently contended that the suit is within time and that refusal of performance ought to be construed from the date of receipt of notice dated 8.7.2004 (Ex.P1) and if the same is taken as the relevant date, the suit having been filed on 1.6.2005, is within time. It is further contended that the Trial Court has erred in construing that the date of refusal for performance as 17.6.1997 and has misconstrued Section 54 of the Limitation Act while answering issue No.8 in the affirmative. Hence, seeks for allowing of the appeal. 8. Per contra, learned Senior Counsel appearing for respondent Nos.1 and 2/defendant Nos.1 and 2 justifies the finding of the Trial Court and seeks for dismissal of the above appeal. 9. Hence, seeks for allowing of the appeal. 8. Per contra, learned Senior Counsel appearing for respondent Nos.1 and 2/defendant Nos.1 and 2 justifies the finding of the Trial Court and seeks for dismissal of the above appeal. 9. Learned counsel for respondent Nos.3 to 5/defendant Nos.3 to 5 who are the subsequent purchasers also supports the contention of the learned Senior Counsel for defendant Nos.1 and 2. 10. The submissions of learned counsel have been considered and the material including the records of the Trial Court have been perused. The question that arises for consideration in the present appeal is, "Whether the finding recorded by the Trial Court on issue No.8 is just and proper?" 11. The Agreement of Sale dated 22.2.1996 (Ex.P2) is undisputed, so also the receipt of a sum of Rs. 5.00 lakhs as advance which is referred to in the said Agreement. It is further not disputed that the plaintiff is currently not in possession of the suit property having regard to the fact that the defendants having instituted a suit for ejectment and a decree being passed against the plaintiff in the said suit and the same has been affirmed up to the Hon'ble Supreme Court. 12. The plaintiff examined himself as PW.1 and has marked a copy of the notice dated 8.7.2004 received by him from the defendant Nos.1 and 2 as Ex.P1. The learned Counsel who issued Ex.P1 has been examined by the plaintiff as PW.2. In Ex.P1 it is stated that a notice dated 17.6.1997 has been issued to the plaintiff cancelling the agreement and the same was published in Deccan Herald newspaper on 9.3.2002. PW.2 has deposed that he has averred regarding the notice dated 17.6.1997 as well as the paper publication dated 9.3.2002 based upon the instructions given by the first defendant in that regard. 13. It is relevant to note that neither the notice dated 17.6.1997 nor the publication dated 9.3.2002 have been produced by the defendants. It is also pertinent to note that the defendants have not adduced any oral or documentary evidence. 14. It is the contention of the plaintiff that apart from the advance of Rs. 5.00 lakhs which is paid under the Agreement dated 22.2.1996 (Ex.P2), a further advance of Rs. 5.00 lakhs has been paid by demand draft. It is also pertinent to note that the defendants have not adduced any oral or documentary evidence. 14. It is the contention of the plaintiff that apart from the advance of Rs. 5.00 lakhs which is paid under the Agreement dated 22.2.1996 (Ex.P2), a further advance of Rs. 5.00 lakhs has been paid by demand draft. It is forthcoming from a perusal of Ex.P2, that an endorsement dated 27.1.1997 has been made wherein the first defendant has attested that he has received a demand draft for Rs. 5.00 lakhs and a cheque for Rs. 10.00 lakhs. 15. PW.1 in his testimony has stated that he has paid a sum of Rs. 5.00 lakhs by way of demand draft as further advance on 27.1.1997 and also issued a cheque for Rs. 10.00 lakhs with a condition that the defendant Nos.1 and 2 are entitled to encash the cheque provided they fix the date of registration. Although defendant Nos.1 and 2 have contended that the sum of Rs. 5.00 lakhs has been received towards payment of rent, they have not adduced any evidence in that regard. Having regard to the fact that the endorsement of receipt of Rs. 5.00 lakhs by way of demand draft has been made by the first defendant in Ex.P2, the defence of the defendants with regard to the same does not appear to be a probable one. 16. It is relevant to note that although the defendants have specifically contended that the Agreement (Ex.P2) has been cancelled vide notice dated 17.6.1997 as also publication dated 9.3.2002, the same has not been produced. Clause No.6 in Ex.P2 stipulates that in the event either party fails to register the Sale Deed as agreed upon, the advance amount of Rs. 5.00 lakhs was required to be returned to the purchaser. Although it is the contention of defendant Nos.1 and 2 that the Agreement (Ex.P2) has been cancelled vide notice dated 17.6.1997 as also the publication dated 9.3.2002, it is not in dispute that the advance of Rs. 5.00 lakhs which has been admittedly received by them have not been returned to the plaintiff. 17. Although it is the contention of defendant Nos.1 and 2 that the Agreement (Ex.P2) has been cancelled vide notice dated 17.6.1997 as also the publication dated 9.3.2002, it is not in dispute that the advance of Rs. 5.00 lakhs which has been admittedly received by them have not been returned to the plaintiff. 17. Having regard to the specific stipulation as contained in Clause 6 of Ex.P2 requiring the advance amount to be returned to the purchaser and having regard to the fact that neither the notice dated 17.6.1997 nor the publication dated 9.3.2002 have been produced by the defendants, it cannot be construed that the Agreement has stood cancelled by virtue of either the notice dated 17.6.1997 or the publication dated 9.3.2002. 18. The defendants have not adduced any evidence with regard to the specific manner of cancellation of the Agreement (Ex.P2). It is merely averred by them that the said Agreement has been cancelled on 17.6.1997. However, they have not specifically pleaded or proved the cancellation of the Agreement. 19. Article 54 of the Limitation Act stipulates as follows: 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. 20. The Trial Court has recorded a finding that in the absence of the notice dated 17.6.1997 it cannot be believed that Ex.P2 has been cancelled by the said notice. However, the Trial Court has recorded a finding that since the plaintiff has admitted that as on 27.1.1997 when defendant Nos.1 and 2 have refused to fix the date for registration and the plaintiff has not issued any written reminder immediately after 27.1.1997 for fixing of the date for registration there was refusal on the part of the defendants. Further, it is held that having regard to the specific case of the plaintiff that while issuing the cheque for Rs. 10.00 lakhs on 27.1.1997 he intimated the defendants that the same would be honoured subject to fixing the date for registration and the defendants have not fixed the date and the payment under the said cheque having been stopped, it is clear that there was refusal on the part of defendant Nos.1 and 2 to perform their part of the contract. Hence, the Trial Court has recorded a finding that there was refusal of performance and the suit is barred by limitation. 21. The finding recorded by the Trial Court is erroneous and liable to be interfered with for the following reasons: i) The latter part of Article 54 of the Limitation Act stipulates that the period of limitation is 3 years from when the plaintiff has notice of refusal to perform the Agreement. Admittedly, in the present case, the date fixed for performance under Ex.P2 was 3 months. However, defendant Nos.1 and 2 have acknowledged receipt of Rs. 5.00 lakhs on 27.1.1997 beyond the period of 3 months. Hence, defendant Nos.1 and 2 have themselves acquiesced to diluting the time fixed for performance under the Agreement. Although defendant Nos.1 and 2 have taken a contention that the contract has been cancelled vide notice dated 17.6.1997 and publication dated 9.3.2002, the same have not been produced. Vide notice dated 8.7.2004 the plaintiff has been called upon to vacate the suit property and thereafter, the suit has been filed on 1.6.2005. Hence, the refusal of performance is required to be construed from 8.7.2004; ii) It is the consistent case of the plaintiff that upon receipt of notice (Ex.P1), the same has been construed as refusal and the suit is filed within the period of limitation from the said date. Although defendant Nos.1 and 2 have contended that they have terminated the Agreement, having regard to the admitted position that defendant Nos.1 and 2 have not refunded the advance amount of Rs. 5.00 lakhs received by them under the Agreement dated 22.2.1996 to the plaintiff as was required to be done by defendant Nos.1 and 2 under the terms of the said Agreement, the defence of defendant Nos.1 and 2 regarding cancellation of the Agreement is not liable to be accepted. 22. In the case of Ahmadsahab Abdul Mulla (2) v. Bibijan, (2009) 5 SCC 462 , relied upon by the learned counsel for the appellant, the Hon'ble Supreme Court, while interpreting the date fixed for performance as stipulated under Article 54 of the Limitation of Act, has held as follows: "11. The inevitable conclusion is that the expression "date fixed for the performance" is a crystallised notion. The inevitable conclusion is that the expression "date fixed for the performance" is a crystallised notion. This is clear from the fact that the second part "time from which period begins to run" refers to a case where no such date is fixed. To put it differently, when date is fixed it means that there is a definite date fixed for doing a particular act. Even in the second part the stress is on "when the plaintiff has notice that performance is refused". Here again, there is a definite point of time, when the plaintiff notices the refusal. In that sense both the parts refer to definite dates. So, there is no question of finding out an intention from other circumstances. 12. Whether the date was fixed or not the plaintiff had notice that performance is refused and the date thereof are to be established with reference to materials and evidence to be brought on record. The expression "date" used in Article 54 of the Schedule to the Act definitely is suggestive of a specified date in the calendar. We answer the reference accordingly. The matter shall now be placed before the Division Bench for deciding the issue on merits."(emphasis supplied) 23. Reliance placed by the learned Senior Counsel for respondent Nos.1 and 2 on the judgment of the Hon'ble Supreme Court in the case of I.S.Sikandar v. K.Subramani, (2013) 15 SCC 27 to contend that where there is rescinding of contract, one who seeks to enforce the contract is required to seek for a prayer for invalidating the rescinding of the contract. Learned counsel for the appellant responding to the same submits that the plaint is structured on the premise that the Agreement is not rescinded. Having regard to the fact that it is the defence of defendant Nos.1 and 2 that the agreement is rescinded, the question of the plaintiff seeking for a relief to invalidate the rescinding of the Agreement, does not arise. 24. Learned Counsel for respondent Nos.3 to 5 contends that PW.1 has admitted that after rescinding the contract he had not taken any steps against rescinding and more particularly, after 27.1.1997 which date is mentioned in the cross-examination. It is forthcoming from a perusal of the cross-examination of PW.1 that he does not admit to the contention of the defendants that the Agreement was rescinded on 27.1.1997. It is forthcoming from a perusal of the cross-examination of PW.1 that he does not admit to the contention of the defendants that the Agreement was rescinded on 27.1.1997. Hence, the said contention of defendant Nos.3 to 5 is liable to be rejected. 25. In view of the aforementioned, the finding of the Trial Court is erroneous and liable to be interfered with and issue No.8 is required to be answered in the affirmative that the suit is within time. Hence, the matter is required to be remanded to the Trial Court to enable the parties to adduce evidence on other issues and the Trial Court is required to adjudicate upon the other issues framed, after affording sufficient opportunity to the parties to adduce evidence on the merits of the matter. Accordingly, the question framed for consideration is answered in the negative. 26. In view of the aforementioned, the following: ORDER i) The above appeal is allowed; ii) The order dated 20.1.2016 passed on issue No.8 in OS No.4088/2005 by the XXXIX Additional City Civil Judge, Bangalore City, is set aside; iii) Issue No.8 in OS No.4088/2005, is answered in the affirmative by holding that the suit is within time; iv) The matter is remanded to the Trial Court for consideration of the other issues framed by it after affording adequate opportunity to the parties to adduce evidence in accordance with law; v) The parties shall appear before the Trial Court on 5.6.2024 without the requirement of any further notice being issued in this regard; vi) Consequent to appearance of the parties, the Trial Court shall permit the plaintiff to adduce evidence on other issues and conduct further proceedings in accordance with law; vi) In view of the fact that the appeal is remanded, the Court fee paid by the appellant be refunded to the appellant; vii) All the contentions of both the parties are left open. No costs.