BIM Mr. Bimal Kumar Bengani v. Kancharla Krishna Reddy
2025-10-23
RENUKA YARA
body2025
DigiLaw.ai
ORDER : RENUKA YARA, J. Heard Sri M. V. Durga Prasad, learned counsel for the revision petitioner and Sri N. Vijender Reddy, learned counsel for the respondent. Perused the entire record. 2. This Civil Revision Petition is filed by the revision petitioner/defendant aggrieved by the dismissal order dated 21.01.2024 passed by the learned II Additional District Judge, Ranga Reddy District at L.B.Nagar, in I.A.No.1348 of 2024 in O.S.No.291 of 2021, which was filed by the revision petitioner herein under Order VII Rule 11 read with Section 151 of C.P.C for rejection of plaint. 3. The respondent herein filed suit against the revision petitioner seeking specific performance of agreement of sale dated 05.09.2019. In the said suit, the revision petitioner herein filed I.A.No.1348 of 2024 seeking rejection of plaint. The relief is sought with respect to suit schedule property consisting of 2/3 rd undivided share of agricultural dry land in Sy.No.608 to an extent of Ac.2-06 guntas or 0.86 Hectors, Sy.No.609 to an extent of Ac.0-15 guntas and Sy.No.633 to an extent of Ac.0-35 guntas in total admeasuring Ac.3-16 guntas situated at Abdullapurmet Mandal, Ranga Reddy District. The I.A. under revision is filed on the ground that the suit agreement has been terminated through legal notice dated 15.01.2021. On account of the said legal notice, the revision petitioner contended that the cause of action ceased on 15.01.2021 when the said agreement of sale was cancelled. The time was essence of the suit agreement and the suit agreement is legally terminated as there is failure to pay balance sale consideration on or before 01.10.2019. Therefore, there is no subsisting agreement available for specific performance as on the date of filing of the suit. The respondent did not seek declaration of termination of suit agreement as illegal and therefore, the plaint is liable to be rejected. 4. There was an ongoing litigation from the year 2002 with respect to suit schedule property and the right, title and interest of the revision petitioner were subject to result of the litigation. The respondent entered into agreement of sale during the pendency of litigation. As right to specific performance is contingent on result of the appeal pending from the previous litigation, only when the rights of the revision petitioner are upheld in A.S.No.210 of 2010, the respondent would have a right to seek specific performance of the suit agreement.
The respondent entered into agreement of sale during the pendency of litigation. As right to specific performance is contingent on result of the appeal pending from the previous litigation, only when the rights of the revision petitioner are upheld in A.S.No.210 of 2010, the respondent would have a right to seek specific performance of the suit agreement. There was no cause of action for filing of suit for specific performance when A.S.No.210 of 2010 was pending. It is pleaded that deliberately pendency of the said appeal is not mentioned and clever drafting is employed to make illusory cause of action in the plaint. Reference is made to the judgment of Hon’ble Supreme Court in Dahiben v. Arvindhbhai Kalyanji Bhanusali , [ AIR 2020 SC 3310 ] and it is pleaded that documents filed along with the plaint alone are to be taken into consideration for application under Order VII Rule 11 (a) and when a document referred to in the plaint forms basis of the plaint, it should be treated as part of the plaint. The revision petitioner filed written statement alleging that the respondent is not entitled to relief of specific performance and that there is no cause of action. Reference is made to the judgment of the Hon’ble Supreme Court in I.S.Sikandar v. K. Subramani , [MANU/SC/1093/2013] and Chand Rani v. Kamal Rani , [MANU/SC/0285/1993] and also to the judgment of Andhra Pradesh High Court in Challapalli Venkateswar Rao v. Meka Gangadhara Rao , [MANU/AP/0733/2017] and the plaint is sought to be rejected. 5. The I.A. under revision was opposed by the respondent before the trial Court denying lack of cause of action to seek specific performance while admitting that there is issuance of termination notice to agreement of sale and said termination is refuted by way of reply notice dated 18.02.2021. The revision petitioner has received considerable part of sale consideration and executed a valid and legal agreement. The unilateral cancellation of the agreement of sale without assigning valid reasons is questionable. The suit for specific performance is filed as the revision petitioner has illegally terminated the agreement of sale. The revision petitioner pleaded that there was no breach on his part and there are several conditions stipulated and mentioned in the suit agreement prior to payment and receipt of the sale consideration.
The suit for specific performance is filed as the revision petitioner has illegally terminated the agreement of sale. The revision petitioner pleaded that there was no breach on his part and there are several conditions stipulated and mentioned in the suit agreement prior to payment and receipt of the sale consideration. The suit agreement is valid and the same cannot be terminated by issuance of mere notice. The truth in the cause of action can be decided only after full-fledged trial. 6. There was an oral agreement to clear the litigation and thereafter, receipt of balance consideration and there is no failure to pay balance sale consideration. Certain amounts were received even after the expiry of the time specified in the agreement and the same shows that clause relating to time being essence of the contract is diluted and not legally valid. There is suppression about pendency of suit and a false plea has been taken while filing compromise petition in A.S.No.210 of 2010. The deceitful conduct of the revision petitioner amounts to cheating and defrauding the Court. The true facts are not stated before the Court ignoring the present suit and the said appeal was compromised. The enforceability of the suit agreement can be decided after the trial and therefore, filing of the I.A. under revision for rejection of plaint with lack of cause of action is misconceived. There is no need to challenge the termination notice separately as per the Specific Relief Act, 1963. Out of total sale consideration of Rs.4,00,00,000/-, the revision petitioner received an amount of Rs.2,49,32,000/-, which is substantial and issuing notice cancelling agreement of sale is illegal and nothing, but breach of terms and conditions therein. Further, foul play was played by compromising the appeal in A.S.No.210 of 2010 by suppressing the present suit for specific performance. The respondent was always ready and willing to pay the balance sale consideration for completion of the transaction. There are no title deeds and passbooks issued under Dharani Act and the name of the respondent is not reflected in the revenue record. Further, the revision petitioner duly did not take steps to obtain necessary documents which are necessary for cancelling the suit agreement. There are no grounds to reject the plaint for lack of cause of action and said fact can be ascertained only after full-fledged trial. 7.
Further, the revision petitioner duly did not take steps to obtain necessary documents which are necessary for cancelling the suit agreement. There are no grounds to reject the plaint for lack of cause of action and said fact can be ascertained only after full-fledged trial. 7. Upon considering the case of rival parties, learned trial Court dismissed the I.A. under revision as there are issues which have to be tried with respect to termination of the agreement. Aggrieved by the same, the present revision is preferred. 8. In the grounds of revision, it is pleaded that the revision petitioner got issued legal notice dated 15.01.2021 for termination of the contract and the same is pleaded in the plaint. A plain reading of the plaint discloses that the suit agreement is terminated and therefore, no suit can be sustained for relief of specific performance. There is an erroneous finding that the legal ratio laid down in I.S.Sikandar (supra) is not applicable to the present case. There is an error on the part of the trial Court in appreciating that when execution of the agreement of sale and the clause stipulates a specific time for performance, time is essence of contract and when issuance of termination notice is admitted by the respondent, the suit ought to have been rejected. There is failure to consider the termination of suit agreement when the same is specifically pleaded and admitted. Reference is made to the judgment of Hon’ble Supreme Court in R. Kandasamy v. T.R.K. Sarawathy , [ AIR 2025 SC 44 ] , wherein it is held that in absence of challenge to the notice intimating termination of the agreement the suit filed to enforce a non-existing agreement is not maintainable and barred under law as such the impugned order is liable to be set aside. 9. During arguments, learned counsel for the revision petitioner relied upon the judgments of the Hon’ble Supreme Court in Katta Sujatha Reddy v. Siddamsetty Infra Projects Private Limited , [ (2023) 1 SCC 355 ] , wherein it is held as follows: “53. Under the pre-amended Specific Relief Act, one of the major considerations for grant of specific performance was the adequacy of damages under Section 14 (1) (a). However, this consideration has now been completely done away with, in order to provide better compensation to the aggrieved party in the form of specific performance. 54.
Under the pre-amended Specific Relief Act, one of the major considerations for grant of specific performance was the adequacy of damages under Section 14 (1) (a). However, this consideration has now been completely done away with, in order to provide better compensation to the aggrieved party in the form of specific performance. 54. Having come to the conclusion that the 2018 Amendment was not a mere procedural enactment, rather it had substantive principles built into its working, this Court cannot hold that such amendments would apply retrospectively. 55. In view of the above discussion, we do not have any hesitation in holding that the 2018 Amendment to the Specific Relief Act is prospective and cannot apply to those transactions that took place prior to its coming into force.” 10. Further reference is made to the judgment of the Hon’ble Supreme Court in Bhargavi Constructions v. Kothakapu Mutyam Reddy , [(2018) 13 SCC 48] wherein it is held that the expression ‘law’ occurring in clause (d) of Rule 11 Order 7 does not include the ‘judicial decisions’ and clause (d) applies only to bar which is contained in ‘the Act’ enacted by the legislature and secondly, even if it is held to include the ‘judicial decisions’, yet the law laid down in State of Punjab v. Jalour Singh , [ (2008) 2 SCC 660 ] cannot be read to hold that the suit is barred. It is also held that law includes not only legislative enactments but also judicial precedents. An authoritative judgment of the Courts including higher judiciary is also law. 11. Further, as per judgment of Bombay High Court in Vasant Ramchandrav. Gurudas Vasantrao Yelvande , [2018 SCC Online Bom 1102] , about maintainability of a suit as per word ‘law’, it includes law laid down by the Apex Court or only the statutory law. 12. In R. Kandasamy (supra), it is held as under: “41. A comprehensive reading of the two decisions reveals that in a fact scenario where the vendor unliterally cancels an agreement for sale, the vendee who is seeking specific performance of such agreement ought to seek declaratory relief to the effect that the cancellation is bad and not binding on the vendee.
A comprehensive reading of the two decisions reveals that in a fact scenario where the vendor unliterally cancels an agreement for sale, the vendee who is seeking specific performance of such agreement ought to seek declaratory relief to the effect that the cancellation is bad and not binding on the vendee. This is because an agreement, which has been cancelled, would be rendered non-existent in the eyes of law and such a non-existent agreement could not possibly be enforced before a court of law. Both the decisions cited above are unanimous in their approval of such legal principle. However, as clarified in Kanthamani (supra), it is imperative that an issue be framed with respect to maintainability of the suit on such ground, before the court of first instance, as it is only when a finding on the issue of maintainability is rendered by trial court that the same can be examined by the first or/and second appellate court. In other words, if maintainability were not an issue before the trial court or the appellate court, a suit cannot be dismissed as not maintainable. This is what Kanthamani (supra) holds. 13. In Shahid S. Sarkar v. Mangala Shivdas Dandekar , [2017 SCC OnLine Bom] , the High Court of Bombay held as under: “19. … ‘132. It is trite that a party should not be unnecessarily harassed in a suit. An order refusing to reject a plaint will finally determine his right in terms of Order 7 Rule 11 of the Code of Civil Procedure. 133. The idea underlying Order 7 Rule 11 (a) is that when no cause of action is disclosed, the courts will not unnecessarily protract the hearing of a suit. Having regard to the changes in the legislative policy as adumbrated by the amendments carried out in the Code of Civil Procedure, the courts would interpret the provisions in such a manner so as to save expenses, achieve expedition and avoid the court’s resources being used up on cases which will serve no useful purpose. A litigation which in the opinion of the court is doomed to fail would not futher be allowed to be used as a device to harass a litigant.(See Azhar Hussain v. Rajiv Gandhi {1986 Supp SCC 315}.’” 14.
A litigation which in the opinion of the court is doomed to fail would not futher be allowed to be used as a device to harass a litigant.(See Azhar Hussain v. Rajiv Gandhi {1986 Supp SCC 315}.’” 14. Further, in Church of Christ Charitable Trust & Educational Charitable Society v. Ponniamman Educational Society Trust , [ (2012) 8 SCC 706 ] , the Hon’ble Supreme Court held as under: “13.While scrutinizing the plaint averments, it is the bounden duty of the trial Court to ascertain the materials for cause of action. The cause of action is a bundle of facts which taken with the law applicable to them gives the plaintiff the right to relief against the defendant. Every fact which is necessary for the plaintiff to prove to enable him to get a decree should be set out in clear terms. It is worthwhile to find out the meaning of the words ‘cause of action’. A cause of action must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue.” 15. Learned counsel for the respondent filed written submissions disputing the applicability of the aforementioned judgments relied upon by the revision petitioner and relied upon the judgment of the Hon’ble Supreme Court in Bank of India v. K. Mohandas , [ (2009) 5 SCC 313 ] , judgment of the Delhi High Court in Kushal Infraproject Industries India Limited v. Dalel Singh , [2019 SCC OnLine Del 8832] and judgment of Bombay High Court in Micheal Gabriel v. Sheth Builders Private Limited , [2020 SCC OnLine Bom 9042]. 16. A perusal of the record shows that the subject matter of the suit is specific performance of agreement dated 05.09.2019 executed between the parties to the suit. The said agreement contains the following important clauses: “AND WHEREAS, the Hon’ble V Addl. Senior Civil Judge, (Fast Track Court), Ranga Reddy District, passed the Judgment in favour of the Vendor in respect of the suit lands in O.S.No.857 of 2002, and alsothe said lands mentioned as prohibitory list in the registration department. The appeal is pending of Sri Muni Ratnam in respect of the said lands before the Hon’ble High Court, at Hyderabad.
Senior Civil Judge, (Fast Track Court), Ranga Reddy District, passed the Judgment in favour of the Vendor in respect of the suit lands in O.S.No.857 of 2002, and alsothe said lands mentioned as prohibitory list in the registration department. The appeal is pending of Sri Muni Ratnam in respect of the said lands before the Hon’ble High Court, at Hyderabad. … AND WHEREAS, the Vendor herein decided to sell the above said 2/3 rd undivided share in Agricultural Dry Lands in Survey No.608, Acres-2-06 Guntas or 0.86 Hectors, Survey No.609, Acre 0-15 Guntas and Survey No.633, Acre 0-35 Guntas, total land admeasuring comes to Acres 3-16 Guntas (Out of total Acres 05-05 Guntas), situated at Pedda Amberpet Village and Gram Panchayat, Hayath Nagar Revenue Mandla, Ranga Reddy District, T.S., and the same will be hereinafter referred to as the SCHEDULED PROPERTY which is more fully described in the schedule of property, for a total sale consideration of Rs.4,00,00,000/- (Rupees Four Crores Only) to the Purchaser, and the Purchaser herein has agreed to purchase the same as it where is whatsoever there is, on the following terms and conditions. … 2) It is mutually agreed between the parties, the Purchaser herein shall pay the REMAINING BALANCE SALE CONSIDERATION of Rs.3,00,00,000/- (Rupees Three Crores Only) to the Vendor on or before 1 st October, 2019. If the Purchaser fails to make payment as agreed, Vendor has right to cancel the Agreement. 3)… 4) The Vendor hereby agreed that he shall execute registered Sale Deed or Deeds or any other document in favour of the Purchaser or his nominee or nominees by receiving the remaining balance sale consideration. 5)… 6) That the Purchaser hereby declares that he will clear all the Old and current taxes and charges to the concerned departments pertaining to the scheduled property within stipulated period. 7) That if any litigation or dispute will arise in respect of the said lands, the Vendor shall not be responsible in any manner and similarly the Purchaser shall take over the same.” 17. The revision petitioner had knowledge about the litigation before the High Court with respect to suit schedule property with one person by name Muniratnam and the same is evident from the contents of the agreement of sale dated 05.09.2019. The vendor has right to cancel the agreement, in case of delay in making payment as agreed.
The revision petitioner had knowledge about the litigation before the High Court with respect to suit schedule property with one person by name Muniratnam and the same is evident from the contents of the agreement of sale dated 05.09.2019. The vendor has right to cancel the agreement, in case of delay in making payment as agreed. As per the agreement of sale, Rs.1,00,00,000/- was paid and the balance sale consideration was to be paid on or before 01.10.2019. When the balance sale consideration was not paid, a termination notice was issued on 15.01.2021 and therefore, according to the revision petitioner there is no agreement of sale in force for seeking specific performance. The contents of the agreement of sale are not denied by any of the parties. Only application of the right to cancel the agreement is denied by the respondent herein. 18. The case of the respondent is that as per the agreement of sale, the last date for payment of balance sale consideration was 01.10.2019. However, the revision petitioner has received Rs.55,00,000/- on 03.10.2019 and further Rs.50,00,000/- on 10.10.2019 i.e., subsequent to the contractual dead line. Such conduct of the revision petitioner which is in violation with the contract terms shows that time being essence of the contract stood extinguished. Clause No.2 of the agreement of sale empowers the revision petitioner to cancel the agreement of sale. Having accepted the sale consideration subsequent to 01.10.2019, time ceased to be the essence of the contract. 19. The revision petitioner herein sought rejection of plaint on the singular ground of lack of cause of action. As per averments of the plaint coupled with contents of the agreement of sale dated 05.09.2019, there was an agreement to sell the suit schedule property for sale consideration of Rs.4,00,00,000/- and on 05.09.2019 Rs.1,00,00,000/- was given to the revision petitioner. The balance sale consideration of Rs.3,00,00,000/- was supposed to be paid on or before 01.10.2019 failing which the revision petitioner herein had right to cancel the agreement. In case, the parties had adhered strictly to the terms of the contract of agreement of sale probably it could have been concluded that time was essence of the contract. The said time was not adhered and therefore, the issuance of termination notice is sufficient to conclude that the agreement of sale is no longer subsisting. Therefore, there is no cause of action.
The said time was not adhered and therefore, the issuance of termination notice is sufficient to conclude that the agreement of sale is no longer subsisting. Therefore, there is no cause of action. However, the facts of the case are not as simple. Having incorporated clause to the effect that time is essence of the contract and in case of failure to pay balance sale consideration on or before 01.10.2019, the revision petitioner is vested with right to cancel the agreement, the revision petitioner himself received additional sale consideration on 03.10.2019 for an amount of Rs.55,00,000/- and on 10.10.2019 Rs.50,00,000/-. This clearly shows that the revision petitioner herein has given go by to clause No.2 of the agreement of sale. When the revision petitioner has received additional sale consideration of Rs.1,05,00,000/- subsequent to expiry of time line mentioned in the agreement of sale dated 05.09.2019, a question arises whether the revision petitioner still has right to cancel the agreement. 20. It may be true that the declaration of the termination notice as illegal is not sought. However, the relief of specific performance also encompasses within it the validity of termination of notice. Only when the termination notice is held to be invalid, the relief of specific performance can be granted. Therefore, this Court is of the considered view that mere failure to seek relief of cancellation of termination notice as illegal is not fatal such that it forms a ground for rejection of plaint. The applicability of the amendment act is to be considered by the trial Court after a full-fledged trial taking into consideration terms of the agreement of sale itself and subsequent conduct of the revision petitioner herein. The validity of the termination notice, the subsequent conduct of the revision petitioner receiving additional sale consideration out of the balance consideration subsequent to expiry of agreement time line and entitlement of the respondent to seek specific performance are all trialable issues, which can be decided only after full-fledged trial. Therefore, this Court is of the considered opinion that while plaint reveals receipt of termination notice, the plaint also reveals the conduct of the revision petitioner receiving part of balance sale consideration subsequent to the expiry of the time line stipulated in the agreement of sale and therefore, there are trialable issues and the plaint cannot be rejected at threshold. 21.
21. In view of the foregoing discussion, there are no merits in the Civil Revision Petition and the same is liable to be dismissed. 22. In the result, the Civil Revision Petition is dismissed confirming the order dated 21.01.2024 in I.A.No.1348 of 2024 in O.S.No.291 of 2021 on the file of the trial Court. There shall be no order as to costs. Miscellaneous applications, if any, pending shall stand closed.