Bombay High Court
Smt. C. Padmavati Naidu And 3 ... vs Friends Cooperative Housing ... on 4 March, 2016
Bench: A.B. Chaudhari
sa.235.12
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT NAGPUR, NAGPUR.
...
SECOND APPEAL NO. 235/2012
1) Smt. C. Padmawati Naidu
Aged about 82 years, occu: Housewife
2) Smt.S.Rajlaxmi w/o Suresh Naidu
Aged about 61 years, occu: service
R/o Janki Sahaniwas
Flat No.101, Shivaji Nagar, Nagpur.
3) C. Mrudula Naidu
Aged 56 years, occu: Business
No. 1 and 3, 196, Cement Road
Shivaji Nagar, Nagpur.
4) Kalpana Rao Bonda
Aged about 54 years, occu: Business
R/o 1604, Branhan Ln.10
San Jose, California
USA 95118. ... APPELLANTS
v e r s u s
1) Friends Cooperative Housing Society Ltd.
Nagpur : Registration No. HSG/ NGP/123 of 1962
Tatya Tope Nagar, Nagpur.
Through its Secretary: Shri L.M.Deshmukh
Aged 83 years, R/o Tatya Tope Nagar, Nagpur.
2) C. Jogeshwar Rao @ Shriram Naidu
Aged about 51 years, occu: Business
R/o 196, Cement road, Shivaji Nagar
Nagpur.
3) The State of Maharashtra
through the Secretary,
Mantralaya, Bombay. .... RESPONDENTS
sa.235.12
...........................................................................................................................
Mr. V.V. Bhangde, Advocate for the appellants
Mr. K.H.Deshpande Sr.Adv. with Mr. S.M.Patrikar and Akshay
Sudame, Advocates for respondent no.1
Mrs. Geeta Tiwari AGP for respondent no.3
............................................................................................................................
CORAM: A.B.CHAUDHARI, J
.
DATED : 3/4th March, 2016
ORAL JUDGMENT:
1. Being aggrieved by the judgment and decree dated
04.10.2011 in Civil Appeal No. 307/1999 passed by the learned District
Judge-9, Nagpur, arising out of the judgment and decree dated
21.04.1999 in Special Civil Suit No. 564/1985 passed by 4th Joint Civil
Judge, Senior Division, Nagpur, the present Second Appeal has been
preferred by the original defendants.
2. The Appeal has been taken up for final hearing as almost all
the appellants are senior citizens and the litigation commenced in the
year 1985, on the motion made by the counsel for the parties.
3. The respondent no.1/plaintiff brought a suit for specific
performance of contract and for possession, stating that an agreement
was executed for the purchase of the suit property by the plaintiff on
sa.235.12
30.1.1975 for a consideration of Rs. 25,000/- per acre and on the
date of agreement by way of earnest, an amount of Rs. 6,000/- was
paid. The sale deed was to be executed within a period of two years
i.e. on or before 30.1.1977. The plaintiff was ready and willing to
obtain the sale deed but, in the interregnum, with effect from
17.2.1976, the Urban Land Ceiling Regulation Act, 1976 was brought
into force and the suit property was specified for residential use in the
Master Plan and, as such, upon application of the Urban Land Ceiling
Act, all transactions of transfer were prohibited, save and except the
exemption to be obtained u/s. 20 of the Urban Land Ceiling Act. The
exemption u/s 20 would be obtained by the landlord or the vendor and
the prohibition operated as the legal impediment for completion of
sale deed. The plaintiff had by letter dated 15.04.1976 intimated the
defendant that the plaintiff was willing to complete the transfer as
per the agreed terms, provided the land is released from the Ceiling
Act. In fact, the Application for exemption was made by the defendant
on 13.08.1976 and an additional Application on 05.02.1980 was also
filed and a joint application was signed by both the plaintiff as well
as the defendant, with reference to the agreement dated 30.1.1975.
The plaintiff was ready and willing to perform his part of the contract
pursuant to which both of them had jointly and individually applied for
sa.235.12
exemption. However on 12.7.1982, to the utter dismay and surprise of
the plaintiff, the defendant informed that the agreement dated
30.1.1975 should be treated as a cancelled as the defendant did not
hear anything from the plaintiff for a long time. The communication of
cancellation was duly replied on 3.8.1982 informing the defendant that
the plaintiff-society was and is ready and willing to perform the part
of the contract but for the fact that the proceedings for exemption were
pending with the Government the sale deed could not be completed and
hence defendant should not cancel the contract. It was also stated that
there was no unilateral right reserved in favour of the defendant to
cancel the agreement and, therefore, the action of cancellation was void
ab initio. It is then contended in the suit that the pending application for
exemption was ultimately decided by an order dated 31.12.1984 by
which the State Government granted exemption, which clearly furthered
the case of the plaintiff, about readiness and willingness and as per the
terms and conditions of the exemption order, within a period of one
year the transaction was to be completed. It was then stated in the
plaint that the plaintiff was under a bona fide belief that it was not
necessary to have permission under Bombay Tenancy and Agricultural
Lands (Vidarbha) Region Act, since the suit was included in the Urban
Agglomeration. Having realised that it was necessary, the plaintiff
sa.235.12
informed the defendant vide notice dated 4.3.1985 that a joint
application was required to be filed under Section 89 of the BT & AL Act
to the Sub-Divisional Officer. Finally, the SDO on 10.12.1985 granted
permission u/s 89 of the BT AL Act. The plaintiff thereafter issued a
notice on 9.8.1985 asking the defendant to execute the sale deed and to
remain present on 20.12.1985 between 10.30 am and 2.30 pm. in the
office of the Sub-Registrar, Nagpur. The defendant gave reply on
16.12.1985 denying the contentions therein, being baseless and
mischievous and did not appear in the office of Sub-Registrar. To sum
up, the plaintiff thus then sought the relief of specific performance for
execution of sale deed and delivery of possession.
In response to the suit-summons, the defendant filed
written statement. It was not disputed in the written statement that
Survey Nos.130/1, 130/3 and 130/4 and 130/5 were already sold to
the plaintiff society by a registered sale deed. The defendant however
placed strong reliance on the cancellation of the agreement under
letter dated 12.7.1982 in respect of the suit property being Khasra No.
127/3 and contended that since the suit was not filed in three years
from cancellation/refusal, the suit was barred by limitation having been
filed on 30.12.1985. It was contended that there were no extension
sought on the ground of obtaining permission under the ULC Act as
sa.235.12
well as BA & AL Act and that merely by enforcement of Urban Ceiling
Act, the terms of the agreement dated 30.01.1975 would not in any
case stand abrogated nor such a relief was sought by the plaintiff. It
was stated that thus the agreement did not subsist, the same having
been recalled or cancelled. The fact that the Application u/s 20 was
jointly made on 30.8.1976 to the Competent Authority and lastly on
5.2.1980 was not disputed by the defendant and it was stated that all
the while the defendant was cooperating with the plaintiff. The
defendant then stated that for obtaining permission u/a. 89 of the BT &
AL Act the plaintiff never sought any extension for obtaining permission
nor obtained any permission u/s.89 before the date of cancellation.
The defendant then stated that he was not aware about the order
dated 13.12.1984 about the exemption and even otherwise after lapse
of period of one year, the exemption order became infructuous, the suit
having been lodged on 30.12.1985. It was then stated that the
defendant was not willing to sell his land after cancellation of the
agreement. Finally, the defendant prayed for dismissal of the Suit. The
State Government (original defendant no.2) also filed written statement
and expressed lack of knowledge about the cancellation of the
agreement as contended by the defendant no.1. The Suit was opposed
by the State Government/defendant no.2. The trial Judge framed the
sa.235.12
issues and additional issues. The parties to the suit tendered oral as
well as documentary evidence. The trial Judge heard the Suit and
decreed the same in part. The trial Judge decreed the suit against the
defendant no.1, directing execution of sale deed of the suit property
as described in the plaint para no.2 and to give possession of the same
to the plaintiff as per agreement for sale Exh.63 dated 30.01.1975 on
payment of the balance consideration amount of Rs. 80,500/-, by the
impugned judgment and decree dated 21.4.1999.
4. The defendant preferred an Appeal before the District Judge
u/s. 96 of the Code of Civil Procedure. The Appellate Court heard the
Appeal after framing the points for determination and finally dismissed
the same. Hence this Second Appeal.
ARGUMENTS :
5. In support of the Appeal, Mr. V. V.Bhangde, learned counsel
for the appellants invited my attention to the substantial question of law
framed by this Court at the time of admission order. He then contended
that the agreement was executed on 30.1.1975 and the
respondent/plaintiff did not take any action in furtherance to the
completion of sale deed nor had obtained permission u/s 89 of the BT
& AL Act though with reference to coming into force of U.L.C. Act on
sa.235.12
7.2.1976, the period of about 13-months was available. He then
submitted that out of the total consideration, only an amount of Rs.
6000/- was paid towards earnest money and thereafter there were no
attempts to make any payments. According to him, the defendant no.1
had applied on 13.8.1976 and 2.11.1976 (Exhs. 65 and 69), under
the U.L.C. Act for requisite exemption and even joint application was
filed at Exh. 97 dated 5.2.1980 which clearly showed, according to
him, that the defendant had no intention to commit any breach of
contract and was fully cooperating. It is then contended that since
nothing was happening, by issuing letter/notice dated 12.7.1992
(Exh.82) the defendant cancelled the agreement explicitly and by
letter/notice dated 3.8.1982 Exh.83 the same was replied by the
plaintiff, which indicated that the plaintiff was fully aware about the
cancellation made, at least, while replying the notice Exh. 82, by reply
Exh.83. He, therefore, contended that in the wake of cancellation of the
agreement by Exh.82 and, at any rate, the conscience knowledge on
3.8.1982, the suit ought to have been filed on 11.7.1985 or 2 nd August
1985, there being an express refusal contemplated by Article 54 of the
Limitation Act. He submits that the Suit was clearly barred by limitation
but the Courts below have computed the limitation after legal notice
dated 9.12.1985 was given to the defendant by plaintiff and that suit
sa.235.12
was actually filed on 30.12.1985. According to him, there is a clear
error of law on the part of the Courts below in computing the limitation
from the date of giving notice on 9.12.1985. He therefore submits that
the Suit was barred by limitation. He cited the following decisions in
support of his submissions:-
1) 1993 Supp (4) SCC 492: Thakamma Mathew
(smt.) vs. M. Azamatulla Khan and others
2) (2005) 6 SCC 733: Kasturi vs. Iyyamperumal
and others
3) (2010) 7 SCC 417: Mumbai International
Airport vs. Regency Convention Centre
4) (2010) 14 SCC 596: Van Vibhag Karmachari
Grioha vs. Ramesh Chander and others
5) (2013) 15 SCC 27: I.S. Sikandar vs. K.
Subramani and others
6. Mr. V.V.Bhangde, learned counsel for the appellants then
contended that there is no prayer in the suit to set up a challenge or
for a declaration about Exh.82 that for one reason or the other the
cancellation made by the defendant was illegal or void in law. He
submitted that the act of cancellation of Exh.82 by the defendant is an
act the defendant having waited for more than sufficient period from
sa.235.12
the date of execution of the agreement i.e. about 7 years and,
therefore, unless the action for cancellation was brought into question,
the Suit could not be held to be maintainable.
7. Mr. Bhangde, then, contended that all the parties to the
agreement specifically named in the agreement Exh.63 were not at all
joined as a party to the suit and only one person was joined whereas
the agreement was entered into by four persons. According to him,
whether or not, joining of a particular person would make any
difference, is not the criteria but all the persons to the agreement are
required to be made party to the suit. He contended that the objection
as to the no-joinder of all parties to the agreement in the suit was raised
before the trial Court in the written statement, but still there was no
action to add all the parties to the agreement in the suit. He therefore
contended that the suit was bad for non-joinder of necessary parties.
8. Learned counsel for the appellant then contended that the
lapse of period of seven years from the date of agreement till the date
of cancellation and the happening in between clearly indicated that the
plaintiff was not ready and willing to perform his part of the contract
and wanted the defendant to wait indefinitely. According to him, the
sa.235.12
prohibition on the landlord under the Ceiling Act or under any other Act
cannot stop running of the limitation and that by itself would be no
excuse not to file the suit within the law of limitation. Inviting my
attention to the reasons given by the Courts below, he submitted that the
Courts below have clearly confused the aspect of limitation and the
computation thereof, by taking the notice of 9.12.1985 as the
commencement of the limitation. Learned counsel for the appellant
finally prayed for reversal of the judgments and decrees of the Courts
below.
9. Per contra, Mr. K.H.Deshpande, learned senior Counsel with
S/shri Sudame and Pathrikar, vehemently opposed the Second Appeal
and submitted that two Courts below have concurrently found that the
Suit was well within limitation and there was a legal impediment by
way of statutory law in the matter of performance of the contract and,
in fact, the parties to the Suit had individually as well as jointly made
the application for exemption from the provisions of the Ceiling Act,
which clearly indicated the intention of the plaintiff to be ready and
willing to obtain the sale deed in strict adherence to the provisions of
the law including the Urban Ceiling Act and the BT & AL Act. Adhering
to the laws, namely, obtaining exemption in Ceiling Act or permission
sa.235.12
u/s. 89 should not be read as unreadiness or unwillingness to perform
the contract and, on the contrary, the same is consistent with the stand
that the plaintiff was ready and willing to perform the part of the
contract. This was particularly so because the plaintiff had, in fact,
purchased the other pieces of lands from the same party for housing its
members and, therefore, it was idle to contend that the plaintiff was not
ready and willing. Adhering to the important aspect of limitation Mr. K.
H. Deshpande learned senior Advocate invited my attention to Section 5
of the Contract Act and Section 89 of the BT & AL Act and submitted
that Section 5 does not permit the appellants/defendants to unilaterally
cancel the contract by deliberately ignoring the fact that the suit land
was under cloud because of the enforcement of the Ceiling Act.
Therefore, the cancellation of Exh. 82 is not cancellation in the eye of
law and is void ab initio, which to say the least, must be ignored and
once the said cancellation Exh.82 is ignored, the limitation would never
said to have commenced, at least, till the plaintiff issued a notice asking
for execution of sale deed on 9.12.1985 and the Suit was thereafter
immediately filed. He, therefore, submitted that there was a clear
breach of the contract on the part of the appellant by issuing Exh.82
and no undue advantage can be given to the defendant for his own
unlawful act. According to him, it is the trite law that there is no
sa.235.12
occasion to challenge any action including cancellation by Exh.82 in
the suit, since the action itself is illegal from the beginning and having
no consequence. The Suit was thus clearly filed within limitation in the
wake of the above facts. According to him, insofar as the objection as
to non-joinder of parties is concerned, the same is not invalid inasmuch
as reading of the agreement shows that the same is a consolidated
action by the family members and the Suit cannot fail on the ground of
non-joinder. The fact that the parties to the suit have individually
and jointly applied for exemption and in fact having an order granting
exemption clearly shows that the plaintiff had always subsisting
intention to continue with the contract and ultimately which evidences
readiness and willingness on the part of the plaintiff and, therefore,
there is no substance in the contention that the plaintiff was not ready
and willing to complete the contract. Finally he prayed for dismissal of
the Appeal.
10. I have heard the learned counsel for the rival parties at
length. I have perused the entire record and the reasons recorded by
the two courts.
11. The trial Judge framed the following issues in the Suit and
sa.235.12
answered the same as indicated against those issues :
1. Does plaintiff prove that it was ready and willing ..Yes
to perform its part of contract?
2. Does the defendant no.1 prove that the time ..No
was essence of the contract?
3. Does defendant no.1 prove that by notice dated .. No
12.07.82 he legally cancelled the agreement
dated 30.01.75?
4. Is agreement dated 30.01.75 unenforceable for Does not survive.
want of permission from the Govt. and in view of
Section 5 (3) of the ULCR Act?
4A Whether this Court has jurisdiction to entertain ..Yes
the present suit?
4B Whether the suit is within limitation?
..Yes
4C Whether the plaintiff is entitiled for the relief As per below
claim in the suit? order.
4D Whether suit is maintainable in law defendant No
no.2 for want of notice under Section 80 of C.P.
Code?
5. Is plaintiff entitled to discretionary relief of Yes
specific performance?
6 What order Suit is partly
decreed as per
below order.
12. The lower Appellate Court framed the following points
for determination and answered the same as stated therein :
1. Whether the plaintiff society was ready and In the affirmative
sa.235.12
willing to perform its part of the contract
2. Whether the suit filed by the plaintiff society is In the affirmative
within limitation?
3. Whether the plaintiff society is entitled for the In the
discretionary relief of specific performance of affirmative.
contract as prayed against defendant no.1?
4. Whether the act of the defendant No.1 was In the negative.
justified in cancelling an agreement dated
30.01.1975 by issuing letter (Exh.82) on dated
12.07.1982 for the reasons stated by him.
5. Whether the defendant no.1 has proved that the In the negative
plaintiff society has failed to perform its part of
the contract?
6. Whether the plaintiff society is entitled for the In the negative
relief claimed against the defendant no2-State
Government?
7. Whether the impugned Judgment and decree In the
passed by the trial Court is legal, proper and affirmative
correct?
8. Is it necessary to interference with the impugned In the negative
judgment passed by the trial court?
9. What order? As per final order
13. This Court had framed the following substantial question
of law in admission order dated 29.9.2015 which are three in number:
sa.235.12
(i) Whether the civil suit filed by the respondent No.
1-Plaintiff was maintainable having been filed
after three years of cancellation of the agreement
dated 30.1.1975 ? ( the appellants had given the
notice dated 12.07.1982 (Exh. No.82) terminating
the agreement dated 30.01.1975 and the civil suit
was filed on 30.12.1985).
(ii) Whether the civil suit was maintainable having
been filed beyond the period prescribed by Article
54 of the Limitation Act, 1961?
(iii) The respondent no.1-plaintiff having not sought
decree for declaration that the cancellation of
agreement dated 30.01.1975 was illegal, whether
the civil suit praying for decree for specific
performance of the agreement was maintainable?
14. Mr. Bhangde, learned counsel for the appellants requested
this Court to add one more substantial question of law about non-
joinder of necessary parties, namely, parties to the agreement Exh.63.
He submitted that the question will have to be framed because the facts
are not in dispute, namely, that all the parties were not joined as parties
to the Suit. The submission is opposed by the other side. I think
framing a question about non-joinder of necessary parties would make
no material difference since firstly, the same is borne out from record
and secondly, an objection was taken at the first opportunity in the
sa.235.12
written statement to that effect in the written statement vide paragraph
2. I, therefore, frame an additional substantial question of law, as
under :-
(iv) "Whether the suit could be held to be bad for non-
joinder of necessary parties, namely, all the persons to
the agreement Exh.63?"
15. Now, coming to the first and second substantial questions, I
find that the agreement Exh.63 was executed by four persons
mentioned in the agreement, jointly and individually. Reading of the
agreement Exh.63 shows mention about Survey No. 130/1, 3, 4 & 5
which were already sold to the plaintiff-society. The dispute is about
only survey No.127/3, the area being 3.46 acres. The same was
agreed to be sold as can be seen from the agreement by four persons.
Urban land Ceiling Act came into force with effect from 7.2.1976 and
eventually it was repealed in 2007 in the State of Maharashtra. It is
a fact that because of the coming into force of the ULC Act, the
plaintiff and defendants were having absolutely no dispute. They , in
fact, individually or jointly made applications till 1980 seeking
exemption from the Government. This went on till Exh.82 dated
sa.235.12
12.07.1982 was issued by the appellant/defendant. It would be
convenient to reproduce the relevant part from Exh.82, which reads as
under:-
" That more than 7 years have passed, we
have not heard anything about your purchase of the
same.
2) That there are being so many relaxation in
the Ceiling Laws moreover the land is agricultural land
and it is lying as an unproductive for so many years
since we have entered into an agreement, we did not
cultivate it nor used it for any other purpose. We are
neither using it, nor we have been able to dispose it off
to anybody. Your silence appears now that you are not
intending in purchasing the said land, therefore, since
we have not heard from you for such a long time. We
treat that our agreement is cancelled, under these
circumstances we are free to dispose it off to any
other sons. Please take note."
It would also be convenient to extract the relevant part
from Exh.83, the reply to Exh.82 given by the plaintiff on 3rd August
1982.
"1. It is within your knowledge that the
society has already applied in the prescribed Form on
sa.235.12
5.2.80 seeking exemption in respect of S.No. 127/3 on
the basis of an agreement dated 30.1.1975. The said
application is also signed by you. Government orders
granting exemption are not yet received. The Society
was and is willing to obtain a sale deed in respect of the
said land immediately on receipt of necessary orders.
You are also aware that in terms of the provisions of
the Urban Land (Ceiling and Regulation ) Act, 1976
you are prohibited to transfer the said land by way of
sale until Government orders in that behalf are
received. Please therefore take note.
2. It is also within your knowledge that S.No.
128/2, 129/2, 128/4 and 129/4 are under acquisition
by the Nagpur Improvement Trust and in terms of
clause (3) of the agreement dated 30.1.1975 you have
to get the same released or abandoned from acquisition.
Kindly therefore first secure such relinquishment or
abandonment of the said land from the scheme of
acquisition and intimate to the Society accordingly so
that the Society may obtain a sale deed from you in
respect of the same within time stipulated in the said
agreement. Please note that you have not yet
discharged your obligation in this behalf and therefore
there is no breach of contract on the part of the society.
As a result, therefore, you cannot treat the
agreement dated 30.1.1975 as cancelled.
sa.235.12
3. It is reiterated that your agreement is still
valid and subsisting and the society is ready and willing
to perform its part of the contract and you are also
bound by the terms of the contract and obliged to
perform your part according to the terms of the
agreement.
Please take note."
16.
Perusal of the document Exh. 82 shows that the cancellation
was being made by the appellant/defendant stating therein that the
defendant was unable to deal with the suit land i.e. either the same was
not being used nor disposed of to anybody and that there was no
response from the plaintiff for a long time and, therefore, the agreement
was being cancelled. Reply Exh. 83 as quoted above, shows that the
plaintiff did not agree with the notice of cancellation and asserted that
the parties had applied in the prescribed form on 5.2.1980 seeking
exemption from the Government and the same was not received and the
society at any rate was willing to execute the sale deed immediately
after the necessary orders. The plaintiff reminded the defendant that the
ceiling Act imposed prohibition in the matter of transfer of the suit
land and further that the other land survey numbers (not the Suit S.NO.
127/3) were under acquisition at the instance of Nagpur Improvement
sa.235.12
Trust and the defendant did not discharge his obligation for getting
relinquishment or annulment of the NIT scheme and, therefore, there
was no breach of contract on the part of the plaintiff society. The
plaintiff therefore asserted that the defendant could not treat
agreement as cancelled in the light of the prohibition and the
reservation mentioned in the reply. The contention about reservation
by NIT was wholly irrelevant as it did not relate to Suit S.No.127/3. In
the last para, it is asserted that the agreement was valid and subsisting
and the plaintiff-society was still ready and willing to perform its part of
the contract and the defendant was bound by the terms of the contract
and obliged to perform his part. Exh.72 is the order made by the
Government i.e. dated 1st December,1984 i.e. after Exh. 72 was issued
granting exemption for residential use. The moot question that arises
for consideration is whether the document Exh. 82 cancellding the
agreement would be of any consequence or not and whether the
agreement between the two parties would be affected due to the stated
coming into force of the statutory laws in the light of the law of
limitation. The submission made by Shri K.H. Deshpande, learned Senior
Advocate that there could be no unilateral cancellation will have to be
examined qua its effect on the limitation provided by Article 54 of the
Limitation Act. Article 54 of the Limitation Act reads thus:-
sa.235.12
Description fo suit Period of limitation Time from which period
begin to run
54. For specific Three years The date fixed for the
performance of a contract performance, or, if no such
date is fixed, when the
plaintiff has notice that
performance is refused.
It is a trite law that limitation having once begun to run
does not stop irrespective of the intervention of the statutory law or
otherwise, since the law does not provide for arresting the limitation
or stopping it from its commencement. In other words, the provisions of
the Limitation Act or the point of commencement of the limitation do not
get automatically suspended because of coming into force of any
special law. Perusal of Article 54 above, read in the context of the facts
of the present case, shows that the second part thereof would have
application in that the explicit refusal or cancellation of agreement by
Exh.82 dated 12.07.1992 would be a notice or the point or rather a
starting point for the commencement of limitation. Once the limitation
started from the point of refusal on the part of the vendor, that is, the
present appellant, it would stop only on the date of filing of the suit.
The submission that making of application u/s. 20 jointly by the
parties to the suit being under consideration of the Government would
make the refusal or cancellation under Exh.82 nugatory or null and
sa.235.12
void, would be contrary to the very basic theme of the law of
limitation. The Hon'ble Supreme Court in the case of Thakamma
Mathew (Smt) vs. M.Azamathulla Khan and others ( supra ), has
had to say in paragraph 9, thus:
"9. ............ Moreover, in view of Article 54 of the
Limitation Act, 1963 a suit for specific performance of
contract has to be filed within three years of the date
fixed for the performance or if no such date is fixed
where plaintiff has notice that performance is
refused. In the present case, the appellant by his notice
dated February 10, 1975 and clearly indicated that she
had cancelled the agreement and had forfeited the
advance amount of Rs. 18000/- deposited by the
defendant. By the said notice, it was clearly indicated
that the appellant was no longer willing to perform the
agreement to sell dated November 14, 1974. In the
circumstances, it was incumbent upon the defendant to
have filed a suit for specific performance of the contract
within a period of three years fro the date of the said
notice dated February 10, 1975 and if such a suit has
been filed by the defendant, it would have been open to
the appellant to show that it was barred by the provision
contained in Section 16 of the Specific Relief
Act. .............................. The High Court, with due
respect, was not right in invoking its discretionary power
sa.235.12
under Order 7 Rule 7 CPC to grant such a relief to the
defendant. The said power conferred on the Court does
not enable it to override the statutory limitations
contained in Section 16 of the Specific Relief Act, 1963
and Article 54 of the Limitation Act, 1963 which
preclude the grant of the relief of specific
performance of a contract except within the period
prescribed by the section."
Similar is the position in Shakuntala (Smt.) vs. Narayan
Chavan and others : 1999 8 SCC 587. On the facts of that case, I
quote paragraph nos. 4,5 and 9 which read thus;
4. It was agreed in the trial court that the issue
relating to limitation be tried as a preliminary issue. The said
Court held that the suit was barred by limitation inasmuch as
the vendor refused to execute the deed as per his notice
dated 17.06.1977. Counting three years from that date, the
suit ought to have been filed on or before 17.6.1980 but it
was filed on 13.7.1981. The suit was therefore held to be
barred by limitation. This finding was affirmed by the lower
appellate court and the dismissal of the suit was confirmed.
5. In the High Court, the learned Judge proceeded
on the assumption that the suit must be deemed to have been
filed within the period of limitation inasmuch as the parties
sa.235.12
agreed that they should apply for permission to the
appropriate local authority and that within one month from
the date of the grant of permission the sale deed had to be
executed. The High Court found that such application for
permission was not made before the local authority and that
therefore limitation did not start and on that ground the
High Court reversed the finding of the courts below and held
the suit to be within time. On that basis, it is even decreed the
suit.
9. If that be the case the limitation necessarily
started from 17.6.1977, the date of refusal to perform his
part of the contract and the suit was barred by time. The
High Court was in error in taking a contrary view and in
setting aside the judgments of the lower courts. The judgment
of the High Court is set aside and the judgment of the trial
court as affirmed by the first appellate court, is restored.
Further in the case of Van Vibhag Karmachari Sanstha
vs. Ramesh Chander and others : (2010) 14 SCC 596, the Apex
Court observed thus, in paragraph nos. 8, 17, 19, 21, 22 and 24 to
"8. The first respondent, on 3.2.1991, issued a
public notice in a local daily, called Dainik Bhaskar,
that he is the owner and in possession of the disputed
sa.235.12
land, and any action taken by the appellant over such
land would not affect the rights of ownership and
possession of the first respondent over the land. He also
stated that the agreement to sell and Power of
Attorney in favour of the appellant stood cancelled.
Immediately, thereafter, the appellant filed a suit on
11.2.1991 (COS No. 19A/1990) for declaration of
ownership of the appellant Society in suit land and for
permanent injunction in the court of 3rd Civil Judge,
Class II, Indore. The suit was subsequently transferred to
the 7th Civil Judge, Class II, Indore as COS No.
603A/1992.
17. Before the trial court, the appellant contended that
on 11.2.1991, while instituting the suit, it had not sought
the relief of specific performance in view of the fact that
no exemption under Section 20 of Urban Land Ceiling
Act (hereinafter, `the Act') was obtained in respect of suit
land. However, the said contention was rejected by the
Trial Court on 23.8.2004 by a detailed order and the suit
was dismissed. The trial court also dismissed the
application under Section 14 of the Limitation Act filed
by the plaintiff (appellant herein) praying for exclusion
of time from 11.2.1991 to 23.6.2003.
19. Assailing the judgment of the High Court,
the learned counsel for the appellant urged that the
sa.235.12
agreement for sale, dated 31.3.1976, was acted upon by
all the vendors including the first respondent. It was
specifically urged that the first respondent participated
and cooperated with the appellant in all legal
proceedings in respect of the said land wherein the first
respondent took the stand that the land in question has
been agreed to be sold to the appellant for valuable
consideration and that the appellant has been put in
possession of the same. This Court, therefore, should not
allow the first respondent to approbate and reprobate
by taking a completely different stand in the public notice
which was published by him in Dainik Bhaskar. In
support of such contention, the learned counsel relied on
a few judgments.
21. Under the aforesaid circumstances, the crucial
question is whether the appellant has a cause of action to
file a suit for specific performance.
22. In our judgment, the refusal by the first respondent
to acknowledge the right of the appellant over the land in
its public notice dated 3.2.1991 definitely furnishes the
appellant with a cause of action to file a suit for Specific
Performance. If the appellant had filed such a suit, it
could in the said suit, have questioned the action of the
first respondent as blowing hot and cold. But it has not
filed such a suit within the period of limitation prescribed
sa.235.12
for filing such a suit.
24. In the present case, the factual situation is totally
different and the appellants have not filed any suit for
Specific Performance against the first respondent within
the period of limitation. In this context, the provision of
Article 54 of the Limitation Act is very relevant. The period
of limitation prescribed in Article 54 for filing a suit for
specific performance is three years from the date fixed for
the performance, or if no such date is fixed, when the
plaintiff has notice that performance is refused.
25. Here admittedly, no date has been fixed for
performance in the agreement for sale entered between
the parties in 1976. But definitely by its notice dated
3.2.1991, the first respondent has clearly made its
intentions clear about refusing the performance of the
agreement and cancelled the agreement.
26. The appellant, on noticing the same, filed a suit on
11.2.1991 but he did not include the plea of Specific
Performance. The appellant wanted to defend this action
by referring to two facts- (i) there was an acquisition
proceeding over the said land under the Land Acquisition
Act and (ii) in view of the provisions of the Ceiling
Act, the appellant could not have made the prayer for
Specific Performance.
sa.235.12
27. The aforesaid purported justification of the
appellant is not tenable in law. If the alleged statutory
bar referred to by the appellant stood in its way to file
a suit for Specific Performance, the same would also
be a bar to the suit which it had filed claiming
declaration of title and injunction. In fact, a suit for
specific performance could have been easily filed
subject to the provision of Section 20 of the Ceiling
Act.
28. Similar questions came up for consideration before a
Full Bench of Gujarat High Court in the case of Shah
Jitendra Nanalal v. Patel Lallubhai Ishverbhai [AIR 1984
Guj 145]. The Full Bench held that a suit for Specific
Performance could be filed despite the provisions of the
Ceiling Act. A suit for Specific Performance in respect of
vacant land in excess of ceiling limit can be filed and a
conditional decree can be passed for Specific
Performance, subject to exemption being obtained
under Section 20
of the Act.
(Paras 11- 13)
29. We are in respectful agreement with the views of the
Full Bench in the abovementioned decision and the
principles decided therein are attracted here.
30. This Court is, therefore, of the opinion that the
appellant had the cause of action to sue for Specific
sa.235.12
Performance in 1991 but he omitted to do so. Having done
that, he should not be allowed to sue on that cause of
action which he omitted to include when he filed his suit.
This Court may consider its omission to include the relief of
Specific Performance in the suit which it filed when it had
cause of action to sue for specific Performance as
relinquishment of that part of its claim."
In this decision of this Van Vibhag, the Apex Court has
upheld the decision of the Full Bench of the Gujarat High Court that
operation of the provisions of the Ceiling Act would not stop the
limitation from running or commencing from the date of explicit
refusal in this case, under Exh.82.
In my opinion, the extract of the refusal reflected through
Exh. 82 and reply Exh.83 given by the plaintiff clearly denotes that the
defendant clearly cancelled or refused to perform his part of contract in
writing and the plaintiff in terms understood the said refusal but took
the defence that the defendant could not cancel it because of the
pending proceedings u/s. 20 etc. In the Supreme Court judgment in
the case of Van Vibhag the answer is clearly given that the limitation
would commence and the suit could be filed or should have been filed
sa.235.12
subject to Sec.20 of the Ceiling Act. Both the Courts below however
have ignored the above position of law and they chose to rely on the
notice that was given by appellant/defendant dated 16.12.1985
reiterating and denying the allegations in notice dated 09.12.1985
wherein the plaintiff asked for performance of contract but there was
no reason for the courts below to keep aside the refusal by way of Exh.82
dated 12.7.1982 qua Art.54 and full and conscious understanding of
refusal by the plaintiff which is clear from its reply Exh. 83 dated
3.8.1982. Thus, within the meaning of Article 54 of the Limitation Act,
when the plaintiff had clear notice that performance was refused on
12.07.1992 Exh.82, the suit ought to have been filed on 11.7.1985 or,
at the most on 02.08.1985; but the suit was admittedly filed in the
court on 30.12.1985. The suit was thus clearly barred by limitation.
Hence I answer question Nos.1 and 2 holding that the suit was barred
by limitation and thus was not maintainable, in view of the express
refusal dated 12.7.1982 under Exh.82. Consequently the notice dated
09.12.1985 by plaintiff demanding execution of sale deed was of no
consequence ad was wholly irrelevant for examining the important
question about limitation.
17. The next submission made by Mr Deshpande, learned
sa.235.12
senior counsel that the very refusal Exh. 82 was of no legal
consequence on the anvil of Sec. 5 of the Contract Act, does not appeal
to me. If in the opinion of the plaintiff the cancellation (Exh. 82 )
dated 12.07.1982 was not according to law or Section 5 of Contract Act,
nothing prevented the plaintiff in filing the suit within the stipulated
time of three years provided by law, and also to challenge the said
action on the ground argued before me including the one about
Section 5 of the Contract Act or that the defendant could not have
unilatrally cancelled the agreement for whatever reasons. The fact
remains that the agreement was specifically cancelled and refusal was
specifically made by the defendant and Article 54 of the Limitation Act
provides for commencement of limitation from the date of refusal.
18. The next question is about the respondent/plaintiff not
having challenged the refusal or cancellation of agreement dated
30/1/75 (Exh.65), whether the suit was maintainable in the light of the
judgment in the case of I.S. Sikandar vs. K.Subramani and others :
(2013) SCC 27. It would be appropriate to note the relevant
paragraphs from the said judgment. In that case, the defendant nos.1
to 4 who were served summons had remained absent and were ex-
parte. The Apex Court while dealing with the similar question, observed
sa.235.12
as under :-
" 32. After perusal of the impugned judgment of
the High Court and the questions of law framed by
Defendant 5 in this appeal, the following points would
arise for determination of this Court:
32.1(i) Whether the original suit filed by the
plaintiff seeking a decree for specific performance
against Defendants 1-4 in respect of the suit schedule
property without seeking the declaratory relief with
respect to termination of the agreement of sale vide
notice dated 28.3.1985, rescinding the contract, is
maintainable in law ?
36. Since the plaintiff did not perform his part
of contract within the extended period in the legal
notice referred to supra, the agreement of sale was
terminated as per notice dated 28.3.1985 and thus
there is termination of the agreement of sale between
the plaintiff and Defendants 1-4 w.e.f. 10.4.1985.
37. As could be seen from the prayer sought
for in the original suit, the plaintiff has not sought
for declaratory relief to declare the termination of
agreement of sale as bad in law. In the absence of
such prayer by the plaintiff the original suit file dby
sa.235.12
him before the trial court for grant of decree for
specific performance in respect of the suit schedule
property on the basis of agreement of sale and
consequential relief of decree for permanent
injunction is not maintainable in law.
38. Therefore, we have to hold that the relief sought
for by the plaintiff for grant of decree for specific
performance of execution of sale deed in respect of the
suit schedule property in his favour on the basis of non-
existing agreement of sale is wholly unsustainable in
law. Accordingly, Point (i) (see Para 32.1) is answered
in favour of Defendant 5."
What is significant to note in the instant case is that, by
refusal Exh. 82 dated 12.7.1982, the plaintiff was fully made aware
about the intention to refuse the performance of contract for whatever
reasons given in Exh.82. The submission made by Mr K.H. Deshpande
that such a refusal has no place in law or is not a valid refusal in the
eye of law is a matter of adjudication by the Court on facts and
evidence. But then having been made fully aware about the cancellation
of agreement by Exh.82 and its full understanding by plaintiff which is
reflected in Exh. 83 dated 03.08.1982 by the plaintiff itself, it is
difficult to fathom as to why the plaintiff failed to pose a challenge to
sa.235.12
the act of cancellation Exh.82 in the suit itself by saying that refusal
was not valid in law. In paragraph 37 of the judgment cited supra, the
Apex Court in clear terms held that in the absence of such a prayer by
the plaintiff, the original suit is not maintainable in law since no
declaratory relief declaring that agreement of sale as bad in law, was
sought in the suit. I think the ratio of the above decision is as clear as
it could be and there is no reason for me to hold that in the absence of
any challenge to the act of termination of contract by Exh.82 the suit
would be maintainable. To sum up, this Question No.(iii) will have to be
answered by holding that the original suit was not maintainable, in the
absence of challenge to the termination of agreement dated 31.07.1975
by termination notice Exh.82 dated dated 12.07.1982.
19. Now coming to the additional substantial question of law
No.(iv) framed by me (supra), at the outset, it has not been dealt by
any of the courts below. The objection however before me from the
respondent is that issue of non-joinder of necessary parties, was not
framed and, therefore, it is not permissible to have adjudication here on
the said question/issue. However, on facts, I find that in paragraph 2
of the written statement, the following was the objection at the first
opportunity:
sa.235.12
2) "It is not disputed that this defendant became the
exclusive owner of the land mentioned in the para by
partition deed dated 17.2.1973, and that an agreement
was made on 30.01.1975 not only with the present
defendant, but also with Mrs. C. Suryabati w/o late S.J.
Naidu; Smt. Padma Naidu and Shri Shriram Naidu. Since
they were parties in the agreement they are
necessary parties for the purpose of this civil suit."
Following is the relevant portion of deposition of witness no.
1 for the plaintiff - Laxmikant :-
".........Agreement of sale is signed by defendant, his
mother, his wife and son. Agreement also bears of my
signature. H.K. Sawangikar and R.N. Nerkar were the
witnesses of that document. They signed in my presence.
Cotne4nts were stated by the defendant. Contents are
correct. It is Exh.63."
It is thus clear that the plaintiff was made fully aware
about the objection of the defendant at the very first stage before the
trial Judge, that all of those who had entered into agreement Exh.63,
were not party to the suit. It therefore cannot be said that the plaintiff is
being for the first time noticed about the said objection. It is difficult
sa.235.12
to understand as to why the plaintiff did not take steps to add all the
persons in the agreement who had agreed under Exh.63 to make them
parties. There is no explanation whatsoever much less plausible
explanation. These facts not being in dispute and being the matters of
record, I think a pure question of law arises and, therefore can be
answered by this Court.
In the case of Mumbai International Airport vs. Regency
Convention Centre and others:( 2010) 7 SCC 417, on this very
question, the Apex Court stated thus in para nos. 15, 18,19, and 26
while also explaining the ratio in the case of Kasturi vs.
Iyyamperumal (2005) 6 SCC 733. It is therefore not necessary for
me to repeat what is stated in the decision of Kasturi : (2005) 6 SCC
733.
15. A `necessary party' is a person who ought to
have been joined as a party and in whose absence no
effective decree could be passed at all by the Court. If a
`necessary party' is not impleaded, the suit itself is
liable to be dismissed. A `proper party' is a party who,
though not a necessary party, is a person whose
presence would enable the court to completely,
effectively and adequately adjudicate upon all matters
in disputes in the suit, though he need not be a person
in favour of or against whom the decree is to be made.
sa.235.12
If a person is not found to be a proper or necessary
party, the court has no jurisdiction to implead him,
against the wishes of the plaintiff. The fact that a
person is likely to secure a right/interest in a suit
property, after the suit is decided against the plaintiff,
will not make such person a necessary party or a
proper party to the suit for specific performance.
18. In Kasturi, this Court reiterated the position that
necessary parties and proper parties can alone seek to
be impleaded as parties to a suit for specific
performance. This Court held that necessary parties are
those persons in whose absence no decree can be
passed by the court or those persons against whom
there is a right to some relief in respect of the
controversy involved in the proceedings; and that
proper parties are those whose presence before the
court would be necessary in order to enable the court
effectually and completely to adjudicate upon and
settle all the questions involved in the suit although no
relief in the suit was claimed against such person.
19. Referring to suits for specific performance,
this Court held that the following persons are to be
considered as necessary parties: (i) the parties to
the contract which is sought to be enforced or their
legal representatives; (ii) a transferee of the property
sa.235.12
which is the subject matter of the contract. This Court
also explained that a person who has a direct interest
in the subject matter of the suit for specific
performance of an agreement of sale may be impleaded
as a proper party, on his application under Order 1
Rule 10 CPC. This Court concluded that a purchaser of
the suit property subsequent to the suit agreement
would be a necessary party as he would be affected if
he had purchased it with or without notice of the
contract, but a person who claims a title adverse to that
of the defendant-vendor will not be a necessary party.
26. If the principles relating to impleadment, are
kept in view, then the purported divergence in the two
decisions will be found to be non- existent. The
observations in Kasturi and Sumtibai are with reference
to the facts and circumstances of the respective case. In
Kasturi, this Court held that in suits for specific
performance, only the parties to the contract or any
legal representative of a party to the contract, or a
transferee from a party to the contract are
necessary parties. In Sumtibai, this Court held that a
person having semblance of a title can be considered as
a proper party. Sumtibai did not lay down any
proposition that anyone claiming to have any
semblance of title is a necessary party. Nor did Kasturi
lay down that no one, other than the parties to the
sa.235.12
contract and their legal representatives/transferees,
can be impleaded even as a proper party."
The above dictum of the Apex Court in relation to the
necessary party in a suit for specific performance of contract in
particular, is clear and there is no doubt about the legal position that all
the persons who are parties to the agreement should be added as party
to the suit and upon failure to do so, the suit must fail. I, therefore,
answer additional Question No.(iv) in the affirmative. This Second
Appeal, in the result, must be allowed.
20. Hence I make the following order :
ORDER
a) Second Appeal No.235/2012 is allowed.
b) The judgment and decree dated 4th October, 2011 passed by the
District Judge-9, Nagpur in Regular Civil Appeal No.307/1999 and the
judgment and decree dated 21st April,1999 passed by 4th Joint Civil
Judge (Senior Division )Nagpur in Special Civil Suit No.564/1985 are
set aside.
c) Special Civil Suit No. 564/1985 filed by the respondent no.1 is
dismissed.
sa.235.12
d) Decree be drawn up accordingly.
e) No order as to costs.
Learned Advocate Mr.Sudame, for respondent no.1 prays for stay
of this judgment and order to enable the respondent no. 1 to take
recourse to the remedy provided under law. Mr. Bhangde opposes the
request. However, in the interest of justice, the effect and operation of
this judgment and order is stayed for eight weeks.
JUDGE
sahare
