CIVIL REVISION APPLICATION NO. 136 OF 2019

6th March 2020

Petitioner Counsel: Shri. V. V. Bhangde Shri Y.R. Kinkhede
Respondent Counsel: Shri. N. B. Bargat
Act Name: Code of Civil Procedure, 1908 Limitation Act, 1963

HeadLine : Rejection of plaint – Ground of suit barred by limitation - Validity
Limitation - Suit for specific performance of contract - Bar of limitation - Applicability

Cases Cited :
Paras 6, 16: K.S.Vidyanadam and others Vs. Vairavan, reported in (1997) 3 SCC 1
Paras 6, 17: Urvashi Aggarwal Vs. Kushagr Ansal, reported in AIR 2019 SCC 1280
Paras 6, 18: Manohar @ Prabhakar s/o. Purushottamrao Wakil (Dead) through LRs. Vs. Goma s/o. Nagoji Kamble (Dead) through LRs. reported in 2016 (3) ALL MR 643
Paras 6, 18: Arvind s/o. Krushnarao Waghmare @ W.Arvind Vs. Baba Jasbirsing Kalsi, reported in 2019(1) ALL MR 519
Paras 7, 19: Urvashiben and anr. Vs. Krishnakant Manuprasad Trivedi, reported in 2019 (13) SCC 372

JUDGEMENT

Admit. Heard finally with the consent of the learned counsel for the parties.

2. By this revision application, the applicants (original defendants) have challenged order dated 19/11/2019, passed by the Court of 11th Joint Civil Judge Senior Division, Nagpur, whereby an application filed by the revision applicants under Order 7 Rule 11(d) of the CPC for rejection of plaint, has been rejected.

3. The respondent (original plaintiff) filed a suit for declaration, specific performance of contract, possession, permanent injunction, and damages against the revision applicants on 01/04/2019. It was claimed by the respondent that the revision applicants had failed to execute sale deed in his favour in terms of agreement dated 25/12/2007 and that the cause of action arose for the respondent on 25/03/2019. The revision applicants filed their written statement in the said suit and they also filed an application for rejection of plaint under Order 7 Rule 11(d) of the CPC, claiming that even on a plain reading of the plaint and the documents filed therewith the suit was barrred by limitation under Article 54 of the Limitation Act, 1963.

4. By the impugned order, the Court below held that in the facts and circumstance of the present case, the issue of limitation was a mixed question of law and facts, which could be determined only upon trial. Accordingly, the application filed by the revision applicants stood rejected.

5. Mr. V. V. Bhangde, learned counsel appearing for the revision applicants submitted that the Court below had committed a grave error in dismissing the applicaion for rejection of plaint, mainly by being impressed with the fact that time could not be said to be the essence of the contract in the present case. It was submitted that even if it could be said that time was not the essence of the contract, what was crucial was, as to when the cause of action for filing the suit had accrued for the respondent, even on a plain reading of the plaint and the documents filed therewith, particularly the agreement dated 25/12/2007. It was submitted that even if the question of limitation in the present case was to be considered on the basis of second limb of Article 54 of the Limitation Act, 1963, the respondent himself had specifically stated in the plaint that the revision applicants had avoided to perform their part of the 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 at his own peril. It was further submitted that a bare perusal of the agreement dated 25/12/2007, demonstrated that certain obligations were cast upon both the parties, to be performed within specific period of time of three months. If the revision applicants failed to perform their obligations within the said period of three months, the respondent was entitled to get a power of attorney/gift deed executed in his favour from the revision applicants by payment of the entire amount of consideration and if such power of attorney was not got executed, the earnest amount was to be forfeited and the agreement was to be treated as cancelled. By relying on specific clauses of the agreement dated 25/12/2007, the learned counsel for the revision applicants submitted that the agreement had worked itself out and on the face of it, the plaint deserved to be rejected.

6. The learned counsel placed reliance upon judgments of the Hon’ble Supreme Court in the case of K.S.Vidyanadam and others vs. Vairavan, reported in (1997) 3 SCC 1, and Urvashi Aggarwal vs. Kushagr Ansal, reported in AIR 2019 SCC 1280 and judgment of this Court in the case of Manohar @ Prabhakar s/o. Purushottamrao Wakil (Dead) through LRs. vs. Goma s/o. Nagoji Kamble (Dead) through LRs. reported in 2016 (3) ALL MR 643 and Arvind s/o. Krushnarao Waghmare @ W.Arvind vs. Baba Jasbirsing Kalsi, reported in 2019(1) ALL MR 519.

7. On the other hand, the learned counsel appearing for the respondent submitted that the Court below in the present case correctly held that the issue of limitation was a mixed question of law and facts and that it deserved to go to trial. The contents of the plaint and the documents filed therewith in the present case clearly demonstrated that the suit was filed upon accrual of cause of action to the respondent, particularly when time was not the essence of the contract in the present case. It was submitted on behalf of the respondent that all the judgments relied upon by the learned counsel for the revision applicants pertained to situations where suits had been decided after full trial and the discussion on the issue of limitation was after the parties had gone to trial and they had led evidence in support of their respective stands. It was submitted that in the present case the said judgments would not apply, because the Court was considering rejection of plaint while exercising power under Order 7 Rule 11(d) of the CPC. The learned counsel for the respondent relied upon judgment of the Hon’ble Supreme Court in the case of Urvashiben and anr. vs. Krishnakant Manuprasad Trivedi, reported in 2019 (13) SCC 372, wherein the Hon’ble Supreme Court had held that plaint could not be rejected under Order 7 Rule 11(d) of the CPC although agreement in question was executed on 13/03/1992 and the suit was filed in the year 2017. Reliance was placed on observations of the Hon’ble Supreme Court that when second limb of Article 54 of the Limitation Act, 1963, was to be applied, finding could be rendered after recording of evidence. On this basis, it was submitted that the revision application deserved to be dismissed.

8. Heard learned counsel for the rival parties and perused the material on record.

9. In order to examine whether the plaint could be rejected on the ground of limitation in the present case, it would be necessary to peruse the plaint, as well as the agreement dated 25/12/2007, which was filed along with the plaint before the Court below. It is settled law that in order to examine the question as to whether a plaint deserves to be rejected under Order 7 Rule 11 of the CPC, contents of the plaint along with documents filed therewith can be perused.

10. In the present case, perusal of the agreement dated 25/12/2007 shows that the parties had agreed to the effect that the revision applicants would arrange for measurement of the land from the concerned authority, they would obtain no objection certificates within a period of three months, they would execute sale deed within three months of the said agreement and that they would hadover possession on the same day. The agreement further provided that it would be the responsibility of the respondent to get the land converted form Class – II to Class – I within a period of threee months for which the revision applicants would bear the expenses. The agreement further specifically provided that if the aforesaid conversion of the land was not done within the said period of three months, the respondent would pay the entire consideration and get a power of attorney /gift deed executed from the revision applicants and further that if the sale deed or the power of attorney was not executed within the stipulated period, the earnest money would be forfeited and the agreement would stand cancelled.

11. A perusal of the plaint shows that the respondent claimed that the revision applicants failed to get the land measured from the Taluka Inspector of Land Records, despite the fact that he was continuously approaching the revision applicants. It was then claimed that the predecessor of the revision applicants i.e. one of the signatories to the agreement, Majulabai, expired on 14/10/2010 and further that the revision applicants got their name mutated in the revenue record in the place of the said Majulabai on 28/06/2014, which was informed to the respondent in December 2017. It was further stated in the plaint that the revision applicants avoided their part of the contract on one or the other count, although the respondent was always ready and willing to perform his part of the contract. According to the respondent, it was only on 25/03/2019, when a public notice was published in the newspaper through an Advocate concerning the suit property, inviting objections from the public with regard to a transaction sought to be undertaken, that the respondent became aware of the actions of the revision applicants upon which he caused legal notice to be issued on 25/03/2019, to the revision applicants and thereafter filed the aforesaid suit. The relevant portions of the plaint reads as follows :-
“12. However, the said Vendor or their family members did not perform their part of contract for considerable period and even did not get mesured the said land from the T.I.L.R. That the present plaintiff hereafter continuously approach to the said Manjulabai and the defendant No.1 however did not given any response to the present plaintiff.
13. Thereafter, the defendant No.1 informed to the plaintiff that the Manjulabai expired on 14/12/2010 and therefore they are going to take necessary entry in the revenue record and the plaintiff was informed that, Devidas also expired issueless. However, the said defendants did not take any effective steps for mutating the names of legal heirs of said Manjulabai for considerable period. Thereafter the said defendant No.1 in the month December of 2017 informed to the plaintiff that they have got mutated the name of legal heir of Manjulabai Bawane in the revenue record on 20/06/2014 however, the said defendant No.1 did not supplied any revenue record in this regard to the plaintiff and the plaintiff himself got the same from the concerned Patwari.
14. Thereafter the said defendant did not given any further information to the present plaintiff and also did not conducted the measurement in respect of the suit property. That the present defendants however always avoided their part of contract on one or other count and also gain the sympathy from the present plaintiff by showing their family problems. That the present plaintiff also considering their family problem waited for considerable period up-till now under the hope that the said defendants would execute sale deed in respect of the suit property after performing their part of contract in favour of plaintiff and his friend Sajjankumar Jain.
15. That the present plaintiff always ready and willing to purchase the suit property for agreed consideration and the present plaintiff was under bonafide impression that the defendants would get measured the said land and would execute sale deed in their favour. That needless to say that the plaintiff himself is holding the entire remaining balances consideration.
16. It is submitted that the present plaintiff however very surprisingly and shockingly on 25/03/2019 came across through the public notice published in the news paper dated 23/03/2019 by one Advocate Mr. Ranjit Sardey and Associates on behalf of his unnamed client that the present defendants are going to sale the same suit property to his client and thereby invited the objection if any from the public at large.
17. That the present plaintiff after coming across the said malafide and illegal approach on the part of said defendants, immediately tries to contract with them on 25/03/2019 itself. However the defendants even avoided to talk with the present plaintiff. Therefore from the said conduct on the part of the present defendants, the plaintiff has clearly gathered an intention on their part that they have committed willfully breach of contract and wants to sale the suit property for more consideration even during subsistence or agreement with the plaintiff.
18. That the present plaintiff and his friend are always ready and willing to purchase the suit property as per agreed consideration from the defendants and the defendants are bound to execute the sale deed in favour of plaintiff. Therefore the plaintiff and Sajjankumar Jain immediately on 25/03/2019 had issued a legal notice to the present defendants and call thereby to execute the sale deed in respect of the suit property within 7 (seven) days from the date of its receipt. The notice / objection simultaneously sent on 25/03/2019 to the said Advocate Ranjit Sardey by R.P.A.D.
19. to 24. ...............
25. That the cause of action arose to the present plaintiff for filing the suit on 25/03/2019 when the plaintiff through the public notice dated 23/03/2019 came across that the defendant’s malafidely, illegally and even during subsistence of agreement of sale with the plaintiff is going to create third party interest in favour of the client of Advocate Ranjit Sardey and Associates. Thereafter when the defendants did not given any due regard to the bonafide request of performance of contract of plaintiff. Thereafter when the plaintiff had issue notice to the defendants on 25/03/2019 and call thereby to execute sale deed in favour of present plaintiff in respect of the suit property and the defendants failed to comply with the same. The illegalities on the part of defendants are continuing one, hence the suit is within limitation.”

12. The question that needs to be considered in the present case is, as to whether in the face of the specific clauses of the aforesaid agreement dated 25/12/2007 and the nature of the aforesaid pleadings in the plaint, it could be said that the suit filed by the respondent was barred by limitation by applying Article 54 of the Limitation Act, 1963.

13. The operation of the clauses of the agreement dated 25/12/2007, does show that there were reciprocal obligations on the predecessor of the revision applicants and the respondent herein. Both the parties failed to perform the obligations cast upon them under the clauses of the said agreement and one of the clauses of the said agreement clearly provided that if the conversion of the land from Class–II to Class–I was not accomplished within three months, the respondent could get power of attorney / gift deed executed in his favour from the predecessor of the revision applicants by payment of entire consideration. Another clause specifically provided that if the sale deed or the said power of attorney was not got executed from the predecessor of the revision applicants within the stipulated period of time, the earnest money would be forfeited and the agreement would stand cancelled. It is not the claim of the respondent in the present case that he did pay the entire consideration within the stipulated period of time to either get the power of attorney executed in his favour or to get the sale deed executed. By operation of one of the aforesaid clauses of the said agreement, the agreement stood cancelled and the earnest money stood forfeited.

14. The other aspect of the matter is the obligations that were cast upon the predecessor of the revision applicants under the said agreement. These obligations were to get the land measured through the Taluka Inspector of Land Records and to obtain no objection certificate from Competent Authorities. As regards these obligations, it is stated by the respondent himself in the above quoted portions of the plaint that the predecessor of the revision applicants failed to perform the said obligations. It is categorically stated that the predecessors of the revision applicants, particularly Majulabai to whom the respondent allegedly approached, failed to carry out the said obligations. It is also specifically stated in the plaint itself at paragraph 14 that the revision applicants avoided their part of the contract on one count or the other. This shows that the respondent was well aware throughout the period between execution of the agreement and thereafter that the predecessors of the revision applicants were avoiding obligations under the agreement.

15. The second limb of Article 54 of the Limitation Act, 1963, provides that the period of limitation would start from the point when the plaintiff becomes aware about the refusal on the part of the defendants to perform their part of the agreement. In this case, as per the statements made on behalf of the respondent in the above quoted portion of the plaint itself, it is stated repeatedly that the predecessors of the revision applicants had refused and avoided to perform their part of the contract. Yet, there appear to be no steps taken by the respondent by issuing notice or otherwise to pursue the matter. In fact it is claimed in the above quoted portion of the plaint itself that the respondent was continuously approaching the predecessors of the revision applicants and they were not performing their obligations. Thus, even as per the pleadings in the plaint read with the agreement dated 25/12/2007, it becomes evident that the respondent was aware about the refusal on the part of the predecessors of the revision applicants to perform their part of the agreement. In this situation, it becomes significant that the respondent never issued any notice to the predecessors of the revision applicants when they were alive. The suit was filed only after having come across a public notice dated 23/03/2019, published in the newspaper in respect of the suit property.

16. In this context it is to be examined, as to whether the learned counsel of the respondent is justified in claiming that since time could not said to be the essence of the contract in the present case, the plaint could not be rejected on the ground of being barred by limitation. The said question needs to be examined with reference to the law laid down by the Hon’ble Supreme Court in the case of K.S.Vidyanadam and others vs. Vairavan, (supra) the Hon’ble Supreme Court has held as follows :-
“10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the court by both Sections 10 and 20.”

17. In the case of Urvashi Aggarwal vs. Kushagr Ansal (supra) although a date was fixed for execution of sale deed, it was held by the Hon’ble Supreme Court that silence maintained by the plaintiffs therein for about 12 years amounted to abandonment of agreement.

18. In the case of Manohar vs. Goma (supra) this Court found that suit for specific performance ought to have been filed with reasonable period of three years of refusal on the part of the defendant to perform his part of the agreement. Similar view has been taken by this Court in the case of Arvind s/o. Krushnarao Waghmare @ W. Arvind vs. Baba Jasbirsing Kalsi (supra). Although it is submitted on behalf of the respondent that the said judgments pertained to cases where the parties had gone to trial and therefore, they cannot be relied upon in the present case where the Court is concerned with the question of rejection of plaint at the threshold, what needs to be appreciated is, as to whether the pleadings in the plaint in the present case read with the aforesaid agreement dated 25/12/2007, demonstrates that the suit is filed beyond the period of limitation.

19. Reliance placed on the part of the respondent in the case of Urvashiben vs. Krishnakant (supra) appears to be misplaced, because in the said case the plaintiff came to know that the suit property was sold to a third party in view of increase in prices only on 25/05/2017, when he visited the suit property, although the agreement was executed on 13/03/1992. It was alleged in the plaint in the said case that the defendants had expressed that they will not execute the sale deed after plaintiff therein had visited the suit site and he came to know that the suit property had been already sold. Therefore, the case is distinguishable on facts, because in the present case, as per the statements made in the plaint quoted above, the respondent himself claimed that he had repeatedly approached the predecessors of the revision applicants, who had avoided to perform their part of the contract. In this context, even if it was to be held that time was not the essence of the contract, the respondent could not claim that cause of action accrued to him for the first time when he saw the aforesaid public notice dated 23/03/2019, published in the newspaper. It is significant that despite his own claim in the plaint that the predecessors of the revision applicants had repeatedly refused to perform their part of the contract, he neither issued any notice to them, nor took any steps to seek specific performance of the contract.

20. Therefore, in the facts and circumstances of this case, it becomes clear that the Court below committed an error in refusing to accept the contentions raised on behalf of the revision applicants and rejecting the application filed under Order 7 Rule 11(d) of the CPC. 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 present case and the clauses of the agreement dated 25/12/2007, which was placed on record along with plaint, shows 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.

21. In view of the above, the revision application is allowed and the impugned order quashed and set aside. Consequently, the application for rejection of plaint filed by the revision applicants is allowed and the plaint of the respondent stands rejected. No order as to costs.

Decision : Revision allowed