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2024 DIGILAW 816 (TS)

S. P. R. Publications (P) Limited v. Ganapathi Industries

2024-09-27

MOUSHUMI BHATTACHARYA, NAGESH BHEEMAPAKA

body2024
JUDGMENT : Moushumi Bhattacharya, J. 1. The Appeal Suit was found to be maintainable by an order dated 11.09.2024 and the Registry was accordingly directed to number the present Appeal Suit. 2. The question before the Court now is whether the prayer for setting aside the impugned order dated 25.06.2024 and remanding the matter to the Trial Court for a fresh hearing upon issuing notice to the defendants can be allowed. Learned counsel appearing for the appellant has argued for an order of remand. 3. The appellant is the plaintiff before the Trial Court who filed a Suit for specific performance of contract based on an Agreement of Sale dated 05.11.2007. According to a sequence of events presented by counsel appearing for the appellant, the Agreement of Sale dated 05.11.2007 was executed between the appellant and the respondent No. 1/defendant No. 1 for sale of the suit schedule property for a total sale consideration of Rs. 60,00,111/- out of which the appellant paid a sum of Rs. 18,00,000/-. The appellant was to pay the balance sale consideration at the time of registration of the Sale Deed. The appellant paid a total sum of Rs. 22,50,000/- to the respondent No. 1 and expressed its readiness and willingness to pay the balance sale consideration of as agreed by the parties. 4. Two Suits were filed by third parties in 2007 against the respondent Nos. 1-3 for recovery of money. The appellant was also arrayed as a party in the said Suits. The third parties alleged that the suit schedule properties had been mortgaged to them. Although the appellant was put to notice of the two Suits, the respondent No. 1-3 assured the appellant that they will settle the disputes and execute the Sale Deed in favour of the appellant. The appellant believed in this representation. The third parties and the respondent Nos. 1-3 settled the above Suits by way of a Lok Adalat Award dated 18.08.2010. The third parties thereafter filed Securitization Appeal involving the suit schedule property. The respondent No. 1-3 again requested the appellant to wait for the outcome of the Securitization Appeal and promised to receive the balance sale consideration and execute Sale Deed in favour of the appellant. The appellant again believed in this representation and waited for the outcome of the Securitization Appeal. The respondent No. 1-3 again requested the appellant to wait for the outcome of the Securitization Appeal and promised to receive the balance sale consideration and execute Sale Deed in favour of the appellant. The appellant again believed in this representation and waited for the outcome of the Securitization Appeal. In October, 2023 the appellant came to know upon verifying the Encumbrance Certificate that the respondent Nos. 1 and 2 had executed transactions partitioning the suit schedule property and alienating a part thereof in favour of the respondent Nos. 4 and 5. The appellant immediately issued a legal notice on 31.10.2023 calling upon the respondents to receive the balance sale consideration and execute the registered Sale Deed. The respondents did not respond to the legal notice despite receiving the same. The appellant filed the Suit in June, 2024 seeking specific performance of the Agreement of Sale dated 05.11.2007 and refund of money in the alternative. The impugned order was passed on 25.06.2024 rejecting the Suit on the ground that the Suit is barred by limitation. 5. The contention of learned counsel appearing for the appellant/plaintiff is that the impugned order is liable to be rejected on several grounds including that the Trial Court selectively read parts of the plaint for coming to the conclusion that the appellant had knowledge of the litigation involving the suit schedule property since the appellant was made a party in the said Suits. Counsel relies on Article 54 of The Limitation Act, 1963 (the 1963 Act) in support of the relevant timelines for filing a Suit for specific performance. 6. It is settled law that a Court must only look at the statements made in the plaint for the purpose of rejecting a plaint under Order VII Rule 11 of The Code of Civil Procedure, 1908 (CPC). In the present case, the Trial Court proceeded to dismiss the appellant's Suit under Order VII Rule 11(d) on the ground of limitation. 7. Article 54 of The Limitation Act, 1963 provides as under: Description of suit Period of limitation Time from which period begins to run Suit 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. 8. 7. Article 54 of The Limitation Act, 1963 provides as under: Description of suit Period of limitation Time from which period begins to run Suit 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. 8. In the present case, the Agreement of Sale dated 05.07.2007 does not provide for any fixed timeline for execution of Sale Deed. This was stated in paragraph 6 of the plaint. Since this is the pleading in the plaint, the second limb of Article 54 of the Limitation Act, 1963 will be attracted which means that the question of limitation can only be adjudicated after evidence is led on the date of notice of refusal and the Court records a finding on that issue : Gunwantbhai Mulchand Shah v. Anton Elis Farel and Others (2006) 3 SCC 634 . 9. In Gunwantbhai, the Supreme Court held that where no time for performance of contract is fixed, the Court must find the date on which the plaintiff had notice of refusal of performance and thereafter ascertain whether the Suit was filed within 3 years from the date of notice as mandated under Article 54 of the 1963 Act. The Supreme Court reiterated this position in Urvashiben v. Krishnakant Manuprasad (2019) 13 SCC 372 . 10. Since the Agreement in question executed between the appellant and the respondent No. 1 and 2 does not have a date within which the Agreement was to be executed, the Trial Court should have adduced evidence on the date when the appellant/plaintiff had notice of the defendant's refusal to perform and thereafter concluded the issue of limitation. Without resorting to this course, the Trial Court came to the unilateral conclusion that the Suit was barred by limitation on the pleadings in the plaint and on the assumption that the plaintiff's knowledge can be presumed from the fact of the litigation in respect of the suit schedule property where the plaintiff was arrayed as a party. 11. It is also evident from the impugned order that the Trial Court resorted to selectively consider the pleadings of the plaint which averred that the plaintiff was a party to the Suits filed in 2007. 11. It is also evident from the impugned order that the Trial Court resorted to selectively consider the pleadings of the plaint which averred that the plaintiff was a party to the Suits filed in 2007. We however find from paragraphs 11 and 13 of the plaint that the plaintiff received summons in the Suits and questioned defendant Nos. 1 -3 with reference to the disputes. The defendants promised the plaintiff that the above disputes would be settled out of Court and also assured that the defendants would execute and register the Sale Deed in the plaintiff's favour. Paragraph 11 further states that the plaintiff believed the representations of the defendant Nos. 1-3 and agreed to wait. 12. Likewise, paragraph 13 of the plaint also states that the plaintiff came to know of the Securitization Appeal in 2017. The later part of the paragraph further states that the defendant Nos. 1-3 requested the plaintiff to wait till disposal of the Securitization Appeal and promised to receive the balance sale consideration from the plaintiff and execute registered Sale Deed in the plaintiff's favour. Paragraph 13 also states that the plaintiff believed the representation of the defendant Nos. 1 - 3 and agreed to wait. 13. It is clear from a comparison of paragraphs 11 and 13 of the plaint and paragraphs 14 and 15 of the impugned order that the Trial Court only took note of the first part of the paragraphs in the plaint and concluded that the plaintiff had failed to take any steps despite knowledge of the litigation and the Securitization Appeal. 14. It appears from the impugned judgment that the Trial Court glossed over the later parts of the relevant paragraphs of the plaint wherein it was averred that the plaintiff believed the representations made by the defendants with regard to honouring the defendants' obligations after settlement of the Suits and the Securitization Appeal. 15. There can be no dispute of the settled position in law being that the Court should read a plaint in its totality for considering an application for rejection of the plaint under Order VII Rule 11 of the CPC. The statements made in the plaint cannot be read in isolation de hors the context, divorced from the other statements or read selectively to suit the purpose of the assessment: Sri Biswanath Banik v. Sulanga Bose, (2022) 7 SCC 731 . The statements made in the plaint cannot be read in isolation de hors the context, divorced from the other statements or read selectively to suit the purpose of the assessment: Sri Biswanath Banik v. Sulanga Bose, (2022) 7 SCC 731 . The Supreme Court in that decision relied on Ram Prakash Gupta v. Rajiv Kumar Gupta (2007) 10 SCC 59 to hold that the Court has to go through the entire plaint averments and cannot reject the plaint only by reading a few lines and ignoring the other relevant parts. 16. We also find substance in the argument made on behalf of the appellant that the date of knowledge of the plaintiff/appellant in the present case would be 31.10.2023 when the appellant issued the legal notice to the respondents calling upon the latter to receive the balance sale consideration. The legal notice was issued on the appellant coming to know from verification of the Encumbrance Certificate in October 2023 that the respondents had partitioned the suit schedule property and executed registered Sale Deed in June and April 2023 in favour of respondent Nos. 4 and 5 respectively. 17. Above all, the impugned order dated 25.06.2024 was passed in an un-numbered Suit. The Trial Court proceeded to reject the plaint in the Suit on the ground that the Suit was barred by limitation. In this context, we appreciate the fair stand taken by counsel appearing for the appellant who requested that the matter be sent back to the Trial Court for a reconsideration on the factual aspects upon the Suit being numbered. Counsel submits that the defendants/ respondents should be put to notice so that the opportunity to contest the Suit is not taken away. 18. In the background of the aforesaid submission, we record that giving notice to the respondents/defendants of the Appeal Suit will only prolong the proceedings which is not required since we have found sufficient grounds to interfere with the impugned order. The Trial Court will have a better opportunity of adjudicating on the merits if the defendants enter appearance and contest the Suit. The Trial Court will have a better opportunity of adjudicating on the merits if the defendants enter appearance and contest the Suit. We find that a learned Single Judge of the erstwhile High Court of Andhra Pradesh at Hyderabad had taken a similar stand in Ganesula Uma Parvathi v. Ayitam Rama Swamy 2011 (2) UPLJ 33 (HC) where the Court opined that the Trial Court had committed error in concluding that the order in Execution Application operated as res judicata and accordingly directed the Trial Court to number the Suit and proceed thereafter in accordance with law. 19. A.S. No.493 of 2024 is allowed for the above reasons. The impugned order dated 25.06.2024 is set aside. We direct the Trial Court to number the Suit and order notice to the respondents/defendants. The Trial Court shall decide the merits on contest and pass appropriate orders after hearing both the parties. Since the plaintiff filed the Suit in June 2024 and the order of rejection is of 25.06.2024, the Trial Court shall dispose of the Suit/any Interlocutory Applications filed by the parties without delay and as expeditiously as possible under the circumstances. 20. All connected miscellaneous applications are disposed of in terms of this Judgment. There shall be no order as to costs.