* HIGH COURT OF DELHI: NEW DELHI
Judgment pronounced on: 09.07.2012
+ IA No.3918/2007 in CS (OS) No.354/2007
SH. GOPAL JOHARI Plaintiff Through: Mr Sanjiv Kakra, Adv. with Mr Sanjiv Arora and Mr Shubham Arora, Advs.
Versus SH. ANUP DIWAN & OTHERS Defendants Through: Ms Payal Jain, Adv. for D-1 & 2.
Mr Anil Airi, Adv. with Ms Rachna Agrawal, Adv. for D-3.
Ms R. Kaul, Adv. for D-4 & 5.
Coram:
HON'BLE MR. JUSTICE MANMOHAN SINGH
1. Whether the Reporters of local papers may be allowed to see the judgment?
2. To be referred to Reporter or not?
3. Whether the judgment should be reported in the Digest?
MANMOHAN SINGH, J.
1. By this order, I propose to decide application under Order VII Rule 11 read with Section 151 CPC filed by the defendants No.1 and 2 for rejection of the plaint.
2. The facts are that the plaintiff has filed the present suit for specific performance of agreement to sell dated 12th November, 2002 which was executed in respect of the property bearing No.171/S-25, Sunder Nagar, New Delhi.
3. The main contention of the defendants No.1 and 2 in the application is that as per the agreement dated 12th November, 2002, the defendant No.1 was to obtain the sale permission from L&DO within 90 days period and then to execute the sale deed and the balance consideration of Rs.32 lac was payable at the time of execution of the sale deed. It is further averred that as alleged by the plaintiff, the defendant No.1 failed to obtain the sale permission within the period of 90 days from the date of agreement. The period of 90 days expired on 11th February, 2003. Accordingly, the cause of action in favour of the plaintiff accrued on or before 12th February, 2003. The contention of the learned counsel for the defendants No.1 and 2 is that under Article 54 of the Limitation Act, the suit for specific performance could have been filed on or before 10th February, 2006/11th February, 2006 but the present suit has been filed on 8th February, 2007 or thereafter. Therefore, the suit has been filed beyond the period of limitation and the same is liable to be rejected under Order VII, Rule 11 (d) CPC.
4. It is submitted by the learned counsel for the defendants No.1 and 2 that the first agreement was executed on 26.05.2000. The defendant No.1 sent a letter regarding expiry of agreement or termination of agreement on 3rd January, 2006 and for about six years period, there has been total inaction on the part of the plaintiff as there was not even a single letter or notice by the plaintiff to the defendant No.1 nor the same has been pleaded in the plaint.
5. In support of the submissions, the learned counsel for the defendants No.1 and 2 has referred few decisions in this court.
6. In reply to the submissions made by the defendants No.1 and 2, the plaintiff’ contention is that the plaint does disclose a cause of action and the suit has been filed well within limitation. The plaintiff has denied that under the agreement dated 12th November, 2002, it was stipulated that the balance sale consideration was to be payable in 90 days from the date of agreement at the time of registration of sale deed or that time was the essence of the contract.
7. Mr Sanjiv Kakra, learned counsel for the plaintiff, has argued that the plaintiff has not alleged that the defendant No.1 failed to obtain sale permission within a period of 90 days, which period expired on 11th February, 2003 and thus, the cause of action, if any, had accrued to the plaintiff on the said date as alleged by the defendants No.1 and 2. It is emphatically denied that in terms of Article 54 of the Limitation Act, the three years’ period of limitation has to be computed with effect from 11th February, 2003, which expired on 10th February, 2006. It is denied by the plaintiff that the suit for specific performance is barred by time.
8. It is submitted by the learned counsel appearing on behalf of the plaintiff that in terms of the agreement to sell dated 27th May, 2000 certain permissions were required to be obtained by defendants No.1 and 2 including from L&DO. The actual physical possession had been handed over to the plaintiff by defendants No.1 and 2 in 2000 itself. Vide letter dated 16th February, 2001 addressed to the plaintiff, the defendants No.1 and 2 reiterated that the possession of the first floor was already with the plaintiff and stated that L&DO’s representative would come for inspection to the premises. The possession of the plaintiff stood acknowledged by defendants No.1 and 2 vide letter dated 6th July, 2001. The defendant No.2 further stated that L&DO raised certain demands which were unfair. Vide letter dated 30th July, 2001, the defendant No.2 stated that the plaintiff should not make any payment to L&DO. Since defendants No.1 and 2 had not discharged their obligations, as contemplated in the agreement to sell dated 27th May, 2000, a fresh agreement to sell dated 12th November, 2002 had been signed and executed by the defendants No.1 and 2 in favour of the plaintiff and the same was duly registered in the office of the Sub-Registrar, Delhi. Though the physical possession of the first floor and second floor was with the plaintiff, in order to further safeguard the interest of the plaintiff, the brother of the plaintiff was shown as the tenant in the agreement to sell and a further sum of Rs.2 lac was paid to the defendants No.1 and 2 by the plaintiff, which stands admitted by them.
9. It is further contention of the learned counsel for the plaintiff is that the present case is not a case of the parties sleeping over their rights and in fact the defendants No.1 and 2 have time and again admitted having applied for permission to sell from the office of L&DO as far as back on 20th November, 2000 and L&DO had raised a demand of Rs.34 lac plus interest which was unjust and unreasonable. It was further stated that defendants No.1 and 2 had filed objections with L&DO but had not received any response. A meeting had taken place on 16th February, 2005 and it was stated that the matter be resolved as soon as possible. The letter dated 6th July, 2005 also talked about resoling the matter as soon as possible. The learned counsel for the plaintiff argues that in view of the same it was not a case of defendants No.1 and 2 ever refusing to obtain requisite permission from L&DO and in fact it was a case of awaiting the permission from L&DO which had already been applied by them. Thus, the cause of action was continuing and recurring one till the time the defendants No.1 and 2 either refused to obtain the requisite permission or expressed their inability to obtain the same.
10. It is also contention of the learned counsel for the plaintiff is that the filing of the suit for specific performance by the plaintiff would have been premature at that stage as defendants No.1 and 2 had already applied for the permission from the L&DO and were following up the matter and had not refused to furnish the same. It is only for the first time that on 3rd January, 2006 the defendants No.1 and 2 suo motu illegally and arbitrarily rescinded/cancelled the agreement to sell. Therefore, the cause of action to file the present suit for the specific performance for the first time arose on 3rd January, 2006 and the suit has been filed well within the period of limitation.
11. The plaintiff has denied that the first agreement was executed on 26th May, 2000 or that for about six years’ period, there has been total inaction on the part of the plaintiff. It is stated that the suit is not barred by time. Therefore, the application is liable to be dismissed.
12. The defendant No.3 who alleged to have purchased the property from defendant No.1 has also filed the counter-claim for possession and recovery of damages. The plaintiff has filed the written-statement to the counter-claim. Various applications filed by the parties are pending for disposal. However, both the parties have pressed the hearing of the above mentioned application and they have made their rival submissions as discussed.
13. There is no dispute that in order to decide the application under Order VII, Rule 11 CPC, the averments made in the plaint have to be read without looking at the defence raised by the defendants. From the plaint it is to be seen by the Court as to whether the suit is barred by way of any law or the plaint does not disclose any cause of action. No doubt, rejection of the plaint is a serious matter as it non-suits the plaintiff and kills the cause of action. Therefore, without satisfaction of requirement of the said provision, the plaint cannot be rejected. Reliance is placed on Popat and Kotecha Property vs. State Bank of India Staff Association, JT 2005 (12) SC 302 and Mayar (H.K.) Ltd. & Ors. vs. Owners & Parties, Vessel M.V. Fortune Express & Ors., AIR 2006 SC 1828. A cause of action is a bundle of facts which are required to be pleaded and proved for the purpose of obtaining relief claimed in the suit. For the aforementioned purpose, the material facts are required to be stated but not the evidence except in certain cases where the pleading relies on any misrepresentation, fraud, breach of trust, willful default, or undue influence. Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is, if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed or not. In ascertaining whether the plaint shows a cause of action, the court is not required to make an elaborate enquiry into doubtful or complicated question of law or fact. By the statute the jurisdiction of the court is restricted to ascertaining whether on the allegations a cause of action is shown. While adjudicating the question of rejection of plaint, it is immaterial for the Court if the case is week or not likely to succeed.
14. In view of the said judgments, the learned counsel for the plaintiff has referred to paras 13, 15 and 16 of the plaint, which read as under:
“13. That vide letters dated 14.05.2005 and 6.7.2005, Defendant No.1 through Defendant No.2, his General Power of Attorney informed the Plaintiff that he had filed an application for permission to sell with the office of L&DO on 20.11.2000 and after inordinate delay he had been intimated that the misuse charges and unearned increased amount was over Rs.34 lacs plus interest and sought the help of the Plaintiff and requested the Plaintiff to take up the matter with L&DO and have the matter resolved. Even thereafter the Defendants had been regularly communicating with the Plaintiff with view to discharge.
15. That the aforesaid communication dated 03.01.06 was clearly mala fide and illegal. The contention of Defendant No.1 and 2 that the agreement had expired or become barred by time was completely misconceived and erroneous. The aforesaid allegations were even otherwise false to the knowledge of Defendants No.1 and 2 as they were in continuous and regular communication with the Plaintiff as late as December, 2005 for the performance of obligations by them and the execution of the sale deed and other documents in favour of the Plaintiff.
16 That the aforesaid communication was clearly a dishonest and illegal attempt to wriggle out of their obligations under the agreement to sell dated 12.11.2002 and accordingly the Plaintiff vide his letter dated 16.1.2006, while reiterating his readiness to perform his part of the agreement and pay the balance sales consideration on the fulfillment of the conditions precedent for the registration of the sale deed in terms of the clause 3 of the agreement to sell dated 12.11.02 and called upon the Defendant No.1 and 2 to carry out their part of the contract by taking all necessary steps contemplated in clause 3 of the agreement to sell. In the said letter dated 16.01.2006, the Plaintiff had specifically communicated to Defendants No.1 and 2 herein that under the said agreement to sell dated 12.11.2002 it was and still is obligatory on Defendants No.1 and 2 to perform their part of obligation, i.e. compliance of clause 3 and unless the said compliance was done time for specific performance of the said agreement was not ripe.”
15. Mr Kakra, the learned counsel appearing on behalf of the plaintiff, has made his submission that in view of the statement made in the said paras which averred that the defendants No.1 and 2 were in continuous and regular communication with the plaintiff as late as December, 2005 for the performance of obligations by them and execution of the sale deed and other documents in favour of the plaintiff. At this stage, the defendants No.1 and 2 without trial cannot press the relief of rejection of plaint under Order VII, Rule 11 CPC in view of the averments made in the plaint.
16. Mr Kakra has also referred to para 29 of the plaint, i.e., para of cause of action and submits that in view of the statement in the said para, it is a continuous cause of action and the Court has to examine the rival submissions of the parties about the limitation at the appropriate stage rather to reject the plaint despite of specific statements made in the plaint. In support of his submissions, Mr Kakra has referred to the following judgments:-
(i) S. Brahamnand and Ors. vs. K.R. Muthugopal (dead) and Ors., 2005 (12) SCC 764.
(ii) Pancharan Dhara & Ors. vs. Monmatah Nath Maity (D) by LRs and Anr., AIR 2006 SC 2281.
(iii) Gomathinayagam Pillai and Ors. vs. Palaniswami Nadar, AIR 1967 SC 868.
(iv) Govind Prasad Chaturvedi vs. Hari Dutt Shastri and another, AIR 1977 SC 1005.
(v) Smt. Saraswathamma vs. H. Sharad Shrikhande and Ors., AIR 2005 Karnataka 292.
(vi) Lakshminarayana Reddiar vs. Singaravelu Naicker and Anr., AIR 1963 Madras 24.
17. The learned counsel for the defendants No.1 and 2 has relied upon the following judgments:-
(i) Satya Prakash Gupta & Anr. vs. Vikas Gupta & Ors., bearing RFA (OS) No.23/2010, dated 24.011.2011 passed by the Division Bench.
(ii) Subhash Chander Kathuria vs. Umed Singh & Anr., 127 (2006) DLT 292
(iii) S. Kuldip Singh vs. H.K.L. Chaudhary (Since Deceased) Through His LR’s, 153 (2008) DLT376
(iv) Satender Kumar vs. Municipal Corporation of Delhi & Anr., 168 (2010) DLT 15
(v) Narne Rama Murthy vs. Ravula Somasundaram & Ors., 2005(6) Scale 605.
18. The relevant para of the case of Satya Prakash Gupta (supra) reads as under:-
“13. Rules of Limitation are meant to see that parties do not resort to dilatory tactics but to seek their remedy promptly. It is a policy of Limitation Acts that those who sleep upon their claims should not be assisted by the courts and equal policy behind those acts, in that there shall an end of litigation and protection shall be offered against stale demands. It is well settled that question of limitation can be raised at any time in the course of proceedings. Court can dismiss the suit on the ground of limitation even if the defence has not raised that plea, where on the face of the pleadings, the court comes to the conclusion that the suit is barred by limitation.”
19. It is well-settled principle of law that when the bare reading of the plaint reveals that the suit is ex facie barred by limitation without any further enquiry, then the Court can invoke the powers so as to arrive at the conclusion that the suit is barred by limitation. However, the same very issue of limitation if required a fact finding enquiry alongside perusal of the plaint, then the same very question becomes a mixed question of facts and law which may require enquiry during the course of trial, but where it is clear that from the perusal of the plaint itself that the suit is ex facie barred by limitation, then the court will not be hesitant in rejecting the plaint.
20. However, much will be dependent upon facts and circumstances of the case and the position emerging in a given case and in case where the situation is unclear at the preliminary stage as some factual determinations are also required before applying the said law, then the court must consider those questions as mixed questions although they appear to be legal questions. The Full Bench of Madhya Pradesh High court in Ramdayal and Ors. vs. Purshottam Pannalal, Air 1959 MP 42, held that issue as to jurisdiction may be an issue of law or fact or a mixed issue.
21. The context of limitation the Apex Court in the case of Balasaria Construction (P) Ltd. v. Hanuman Seva Trust & Ors.; (2006) 5 SCC 658, at page 661, has held that the question of limitation is a mixed question of fact and law when ex facie reading of plaint does not denote the same to be barred by time. Apex Court thus observed :-
“8. After hearing counsel for the parties, going through the plaint, application under Order VII Rule 11(d) CPC and the judgments of the trial court and the High Court, we are of the opinion that the present suit could not be dismissed as barred by limitation without proper pleadings, framing of an issue of limitation and taking of evidence. Question of limitation is a mixed question of law and fact. Ex facie in the present case on the reading of the plaint it cannot be held that the suit is barred by time. The findings recorded by the High Court touching upon the merits of the dispute are set aside but the conclusion arrived at by the High Court is affirmed. We agree with the view taken by the trial court that a plaint cannot be rejected
under Order VII Rule 11(d) of the Code of Civil Procedure.” (Emphasis supplied)
22. Similar observations were made in Hardesh Ores Pvt. Ltd. vs. M/s Hede and Company reported in (2207) 5 SCC 614 wherein the Apex Court also held that:-
“25. The language of Order 7 Rule 11 CPC is quite clear and unambiguous. The plaint can be rejected on the ground of limitation only where the suit appears from the statement in the plaint to be barred by any law. Mr Nariman did not dispute that “law” within the meaning of clause (d) of Order 7 Rule 11 must include the law of limitation as well. It is well settled that whether a plaint discloses a cause of action is essentially a question of fact, but whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is whether the averments made in the plaint, if taken to be correct in their entirety, a decree would be passed. The averments made in the plaint as a whole have to be seen to find out whether clause (d) of Rule 11 of Order 7 is applicable. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense. As observed earlier, the language of clause (d) is quite clear but if any authority is required, one may usefully refer to the judgments of this court in (2004) 9 SCC 512 and (2005) 7 SCC 510.
23. In the case of State Trading Corporation of India Ltd. vs. Government of Peoples Republic of Bangladesh, 63 (1996) DLT 971 (DB), the Hon’ble Division Bench of this court finding approval that the said view of Full Bench of Madhya Pradesh in Ramdayal (supra) has culled out variety of circumstances in the challenge of jurisdiction can be evaluated by the Court. Learned Division Bench speaking through Hon’ble Justice R.C. Lahoti observed thus:-
“A court seized of a suit and a prayer for the grant of ad interim relief may be faced with a doubt or challenge as to the availability of jurisdiction to try the suit in a variety of circumstances. The court has to act as under:-
(a) In the case of inherent lack of jurisdiction apparent on the fact of the record, court cannot exercise jurisdiction over the suit so as to pass any interlocutory order or grant interim relief; (b) If it appears from a bare reading of the plaint that the court does not have jurisdiction to try the suit, the plaint itself may be returned for presentation to a proper court under Order 7 Rule 10 CPC; (c) If the suit appears to be barred by any law, the plaint may be rejected under Order 7 Rule 11 of Civil Procedure Code; (d) It may be a disputed question of fact or law or both – whether court has jurisdiction over the suit or not. Such a question if it be a pure question of law it can be decided on hearing the parties on a preliminary issue. Such a challenge to the jurisdiction of the court to entertain the suit being laid by the defendant as a pure question of law, it is incumbent upon the Judge to determine that question as a preliminary issue before making absolute the rule issued earlier; (d) If the determination of jurisdiction of the Court is a question of fact or mixed question of fact and law requiring evidence to be adduced before recording a finding, the determination of the question may in appropriate, cases be liable to be postponed till after the determination of all or several other issues if the evidence to be adduced by the parties may be common on the issue of jurisdiction and such other issues” (emphasis laid)
24. It has been noticed that almost in referred cases the point of limitation was decided by the Court either after framing of issues or after the trial. In the present case, in view of specific statement made by the plaintiff in paras 13, 15, 16 and 29 of the plaint, the objection of limitation raised by the defendants No.1 and 2 becomes a mixed question of law and facts, which necessarily requires adjudication and the said objection of limitation is to be considered after the trial is conducted. Thus, the plaint cannot be rejected at the threshold.
25. After having considered the above said judgments and facts referred to by the parties, this Court is satisfied that the it is a fit case that the determination of the question raised by the defendants No.1 and 2 is liable to be postponed till determination of all the other issues as it appears to the Court that in view of the statement made in the plaint, the objection raised by the defendants No.1 and 2 is requiring evidence to be adduced by the parties. Under these circumstances, the application is disposed of. However, it is made clear that the objection of the defendants No.1 and 2 shall remain intact and shall be considered after the trial as per its own merit.
CS (OS) No.354/2007
List before the roster bench on 21st August, 2012 the date already fixed, for directions.
MANMOHAN SINGH, J
JULY 09, 2012
Jk/sa