Bombay High Court
Smt. Sushama Tulsidas Adhav vs Mr Pradeep D. Shah on 20 September, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:37346
FA-1278-12-F18.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.1278 OF 2012.
Smt. Sushama Tulsidas Adhav
Residing At 5-A, Keni Wadi,
Agar Bajar, S. K. Bole Marg,
Dadar (W), Mumbai 400 028 ...Appellant.
Versus
1. Mr Pradeep D. Shah
Builder and Developer Sole Proprietor
of M/s. Siddhi Construction Co.
Residing at 4, Sudarshan Postal Colony,
Chembur Mumbai 400 071.
2. Worli Koli Samajak Vividh
Karyakari Sahakari Society
Ltd., A Co-operative Society
Deemed to be registered under
Maharashtra Co-operative Societies
Act, having its Address at 80(E) behind
Shankar Temple Worli Koliwada
Mumbai 400 025.
3. Jayendra D. Shah
A Sole Proprietor of
M/s. Saiba Agency Age not known
Occ. Business, residing at
1st Floor, Plot No.4, Postal Colony,
Chembur, Mumbai 400 071.
4. Haresh H. Jethva
Age not known Occ. Not known
Nathapal Bhavan, Jawahar Nagar,
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B. S. Marg, Ghatkopar (W)
Mumbai 400 086.
5. The Director
M/s. Muthoot Fin. Corpn. Ltd.
Muthoot Centre, Punnen Road,
Trivandrum 695 001
Kerala.
6. The Manager
Cheera Bazaar
Muthoot Fin. Corpn. Ltd.
No.488/B Matru Krupa Bldg.
J. S. S. Road, Opp. Gomantak Hotel,
Chera Bazar, Mumbai- 400 002. ...Respondents.
------------
Mr. Balasaheb Deshmukh for Appellant.
Ms. Smruti Gurav i/b Mr. Keshav Borhade for Respondent no.1.
Mr. Shishir Joshi for Respondent no. 3.
------------
Coram : Sharmila U. Deshmukh, J.
Reserved on: 2nd August 2024.
Pronounced on : 20th September 2024.
JUDGMENT :
1. The Appeal had been admitted vide order dated 10 th August,
2012.
2. The appeal is preferred against the judgment dated 5 th July 2012
passed by the City Civil Court in Notice of Motion No.1636 of 2012 in
S.C Suit No 2840/2005 rejecting the plaint under Order VII Rule 11 of
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CPC qua the reliefs in terms of Shop No 4, ground floor in building on
Plot No 307, C.S. 825(pt), Worli. For sake of convenience the parties
are referred to by their status before the Trial Court.
FACTUAL MATRIX:
3. S.C. Suit No.2840 of 2005 was instituted seeking declaration that
the two agreements for sale dated 5th February 2001 in the respect of
Shop No.4 and Flat No.4 in an under construction building on Plot No.
307 Scheme No.52 of Worli Estate are valid and subsisting agreements
under the provisions of MOFA Act and for mandatory injunction
directing the Defendant to lodge the agreement for registration after
payment of stamp duty and to complete the construction and put the
Plaintiff in possession of Shop No.4 and for perpetual injunction from
alienating Shop No.4 and Flat No.4.
4. The suit was initially filed against the Defendant Developer.
Subsequently pursuant to order of amendment dated 5 th March, 2007,
the suit came to be amended impleading the Society as Defendant No
2, Jayendra D Shah as Defendant No 3 and Haresh H. Jethwa as
Defendant No 4.
5. The Plaintiff came with a case that he has purchased Shop No 4
admeasuring 383 sq. ft and Flat No 4 admeasuring 577 sq feet in an
under construction building being constructed by Defendant No 1
developer and promoters within the meaning of MOFA. After setting
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out the details of the development agreement executed between
Defendant no 2 Society and Defendant no 1 Developer, it was
contended that in or about August, 1998 the agreement was arrived
between Plaintiff and Defendant No 1 in respect of sale of Shop No 4
and Flat No 4 pursuant to which Rs 9,10,000/ and Rs 4,50,000/ was paid
as part payment towards purchase of Shop No 4 and Flat No 4
respectively.
6. After persistent demands two unregistered agreements dated
1stFebruary 2001 were executed in respect of Shop No.4 and Flat No.4
respectively in which the Society is joined as a party. In paragraph 6 it
is contended that there is non compliance by the Defendant of the
statutory obligations under MOFA of lodging the agreements for
registration after payment of stamp duty and under Section 4 of MOFA
to specify the prescribed details in the agreement by failing to specify
the date of handing over possession which is breach of MOFA
provisions.
7. In February 2004 as the construction work was nearing
completion, the Plaintiff offered to pay the balance amount and
requested the Defendant to complete the agreement, register the
same and hand over possession of the Shop and the flat to which the
Defendant responded that unless possession of hall is delivered to the
Society, the possession of shop and flat cannot be handed over.
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8. It was pleaded in paragraph 8 that Defendant had addressed to
the Plaintiff two letters dated 10th January 2002 and 23rd January 2002
admitting the fact that the Plaintiff is the flat purchaser making false
and baseless allegations demanding balance of purchase price. The
balance purchase price is payable at the time of possession and
Defendant has no right to terminate the agreement for sale which
were Exhibit A and B to the plaint.
9. It was contended that in or about May 2003 the Plaintiff was
informed by one Mr. K.K. Bapardekar that the office bearers in
collusion with Defendant No 1intended to put one Jayendra D. Shah in
possession of Shop No.4 and Mr. Harish Jethwa in possession of flat
No.4. The Plaintiff filed a private complaint with Metropolitan
Magistrate and FIR has been registered.
10. In paragraph 10, it was contended that the Defendant being
promoter is liable to complete construction of the building and put the
Plaintiff in possession of Shop No.4 and the Defendant is denying the
right of Plaintiff to possession of Shop and the Flat.
11. The amended plaint pleaded that the Plaintiff came to know
from the written statement dated 1st August, 2005 filed by the
Defendant No 1 that the Defendant No 2 Society had issued Share
Certificate in respect of Shop No 4 in favour of Defendant No 3. It was
pleaded that the Defendant No 2 had no right to allot the said shop to
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Defendant No 3.
12. To the plaint the Plaintiff annexed two agreements dated 1 st
February 2001 executed in respect of Shop No.4 and Flat No.4, receipts
issued by the Defendant and the proceedings initiated by the Plaintiff
before the Metropolitan Magistrate.
13. Written statements came to be filed and the parties went to
trial. The Plaintiff led evidence and at the stage of Defendants
evidence, Notice of Motion No.1636 of 2012 was filed by the
Defendant No.3 under Order VII Rule 11(d) of CPC seeking rejection of
the plaint insofar as the relief in terms of Shop no.4 is concerned as
being barred by law of limitation. In the affidavit in support of Notice
of Motion Defendant No.3 claimed that he is the purchaser of Shop
No.4 subsequent to the termination of agreement between the
Plaintiff and Defendant No.1. It was pleaded that as per paragraph
No.8 of the plaint, Defendant No.1 has terminated the agreement in
respect of Shop No.4 by his Advocate's letter dated 23 rd January 2002
and prior to the termination notice the Defendant No.1's advocate by
letter dated 10th January 2002 has called upon the Plaintiff to make
requisite payment. It was further contended that in the cross
examination of the Plaintiff she has admitted of having received the
termination notice. It was contended that plaint has been instituted on
11th July 2005 and prayer (a) pertains to declaration that the
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agreement of sale concerning shop No.4 be declared valid subsisting
and binding with entitlement of specific performance and therefore
present suit is barred by limitation.
14. The Plaintiff filed her reply contending that Suit was filed
seeking declaration that the two agreements are valid and subsisting
and for direction to Defendant No.1 to execute and register the
agreements under MOFA. It was stated that by advocate's letter dated
10th January 2002 and and 23 rd January 2002, Defendant No.1
demanded excess balance payment of Shop No.4 which is not as per
the agreed terms entered into between the parties and hence the
letter was void and not binding. It was contended that Defendant No.1
illegally tried to claim that he has terminated the agreement in respect
of shop No.4 and in the agreement there is no clause for termination
and that it was agreed that the balance amount will be payable to
Defendant No.1 at the time of handing over possession of Shop No.4
and Flat No.4. It was contended that non performance by the
developer of its obligations under MOFA is continuous cause of action
and hence the suit is not barred by limitation.
IMPUGNED JUDGMENT:
15. By the impugned judgment the Trial Court made the Notice of
Motion absolute. The findings of the Trial Court can be broadly
summarized as under:
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a) By letter dated 10th January 2002 Defendant No.1 called upon
the Plaintiff to pay the balance amount of Rs.16,52,800/- leaving the
balance Rs.7,28,200/- within period of one week failing which
agreement would be terminated.
b) Plaintiff failed to honour the requisition in letter and hence
Defendant by letter dated 23rd January 2002 terminated the
agreement and forfeited the amount paid by the Plaintiff.
c) The termination of the agreement depriving the Plaintiff of the
suit shop and suit flat by letter dated 23 rd January 2002 gave cause of
action for the Plaintiff to file suit.
d) Suit claiming reliefs under MOFA will be governed by the
Limitation Act 1963 and the cause of action is not continuous.
e) As per Article 58 of the Limitation Act period of limitation is
three years from the date when the right to sue first accrued and right
to sue for the first time accrued when the Defendant No1 by letter
dated 23rd January, 2002 terminated the agreement.
f) The Defendant No 1 in unequivocal terms refused to perform his
part of the contract by terminating the agreement by letter dated 23rd
January, 2002 and as per Article 54, suit for specific performance has
to be filed within three years upon refusal of Defendant No.1.
g) The suit filed on 11th July, 2005 seeking validity of agreement so
far as Shop No. 4 is concerned is barred by limitation.
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SUBMISSIONS:
16. Mr. Deshmukh, learned counsel for Appellant has taken this
Court through the pleadings in the plaint and would submit that only
averments in plaint are relevant. He submits that the plaint alleges non
compliance of MOFA obligations and at the time of leading
Defendant's evidence the Notice of Motion under Order VII Rule 11(d)
was taken out by Defendant No 3. He submits that the Trial Court has
held the knowledge about non performance to be the starting point of
limitation under Article 54 and 58 of Limitation Act. Whereas the non
compliance of MOFA provisions constitutes continuous cause of action.
17. He would further point out the prayers in the suit and would
submit that the relief sought was enforcement of the obligation of the
developer under MOFA and therefore there is continuous cause of
action. He would submit that the Trial Court has accepted that the suit
was filed claiming reliefs under MOFA and despite thereof has held
that the cause of action is not a continuous one. He would further
submit that by impugned judgment the suit has been rejected in part
as regards shop No.4 which is not permissible as the plaint is either to
be rejected in whole or accepted in whole and there cannot be any part
rejection of the suit.
18. He would submit that Defendant No.1 has accepted the
execution of the agreement and payment of consideration. Pointing
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out to the agreement entered into between Plaintiff and Defendant
No.1 he submits that Recital 25 specifically states that under Section 4
of MOFA, the developer is required to execute written agreement and
to register the same and clause 11 of the agreement provides that the
agreement shall be subject to the provisions of MOFA. He points out
the receipts of payment of consideration annexed to the agreement.
19. He submits that the communication dated 10 th January 2002 is in
respect of premises different from the suit premises as the built up
area and the consideration stated in the notice differs and therefore
there was no termination of the agreement. He submits that the Trial
Court has considered the cause of action as termination of the
agreement on the basis of defence which is impermissible. He has
taken this Court through averments in the plaint and would submit that
the cause of action which arose in the present case is the apprehension
of creation of third party rights. In support he relies upon the following
decisions.
1.Kum.Geetha, D/O Late Krishna &Ors V/s Nanjundasvamy &
Ors (Supreme Court of India) 31/10/2023, Civil Appeal
No.7413/2023 (Arising out of S.L.P. (C) No.8147/2016;
2. Ramesh B Desai & Ors V/s Bipin Vadilal Mehta & Ors
(Supreme Court of India) 11/07/2006, 2006 5 SCC 638;
3. Madhav Prasad Aggarwal & Anrs V/s Axis Bank Ltd. &
Anrs. (Supreme Court of India) 01/07/2019, 2019 7 SCC 158;
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4. Ram Prakash Gupta V/s Rajiv Kumar Gupta & Ors
(Supreme Court of India) 03/10/2007, 2007 10 SCC 59;
5.Lata Constructions & Ors. V/s Dr.Rameshchandra
Ramniklal Shah & Anr (Supreme Court of lndia) 12/08/1999,
2001 1 SCC 586;
6. Meerut development Authority V/s Mukesh Kumar Gupta
(Supreme Court of India) O9/05/2012;
7.Bhagyalaxmi Construction V/s Monoranjan Basak & Anr
(NCDRC) 31/05/2013, 2013 3 CPJ (NC) 75;
8.Bhagyalaxmi Construction V/s Monoranjan Basak &
Anr(Supreme Court of India) 11/11/2013;
9.Altaf Fakir Baig & Ors V/s Goel Ganga Deve (IND) Pvt Ltd
Through Directors A) A.J Goel B)A.J Goel C) J.S.Goel D)
D.R.Thipse & Ors (High Court of Judicature at Bombay)
10/01/2023, 2023 0 AIR (Bom) 205;
10.Samruddhi Co-operative Housing Society Ltd. V/s Mumbai
Malhalaxmi Construction Pvt Ltd (Supreme Court of India)
11/01/2022, 2022 4 SCC 103;
11.Sushil Samir Co-operative Housing Society Limited V/s
District Deputy Regitrar,Co-operative Societies & Ors (High
Court of Judicature at Bombay) 24/01/2014, [2014] 4 Mh. L.
J. 888;
12. Cooperage Woodhouse Co-op HSG Society Ltd. V/s
Ms.Bhansali & Kanungo Builders & Developers & Ors (High
Court of of Judicature at Bombay) 30/08/2018 Suit
No.4672/2000;
13.Smt.Indirabai Baburao Kanade V/s Matru Chhaya Co-op.
Hsg. Society Ltd.& Anr (High Court of Judicature at Bombay)
26/07/2016, FA No.396/2012;
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14.Vasant Balkrishna Wale V/s Vithal Mahadeo Deshmukh
(High Court of Judicature at Bombay) 14/09/2005, WP
No.4320/1994;
15. Jayantilal Investments V/s Executive Engineer, Building
Prooral (Ws) (High Court of Judicature at Bombay)
16/03/2006, F.A. No.989/2004;
20. Per contra, Mr. Joshi, learned counsel for the Defendant would
submit that in para 8 of the plaint there is reference to the letter of
23rd January 2002 about termination and in para 9 of the plaint, it is
averred that Plaintiff became aware that in May 2003, the Defendant
intended to put Defendant No.3 in possession of the shop and
therefore the cause of action arose as per paragraph 9 when the
intention to put Defendant No.3 in possession of shop No.4 became
known to the Plaintiff. He submits that despite thereof Chamber
Summons came to be filed for impleading him in the year 2007. He
submits that as impleadment was in the year 2007, the limitation as
regards Defendant No.3 would commence from the year 2007 as the
amendment does not relate back to date of suit and therefore the suit
was clearly barred by limitation from the date of acquisition of
knowledge in May 2003.
21. He would submit that under Section 8 of MOFA in event the
possession was not given, the Plaintiff is entitled to refund of the
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amount paid with interest. He submits that as there were separate
agreements in respect of the shop and the flat it was case of joinder of
cause of action and the plaint is rejected qua the Defendant No 3 which
is permissible.
22. He submits that there is no continuous cause of action as the
cause of action is the refusal of performance by the termination of the
contract. Drawing attention to the plaint, he submits that there is no
specific pleading about cause of action and upon reading of
paragraphs 8 and 9 it is evident that the termination of the agreements
in the year 2002 gives rise to cause of action. He would submit that
Section 3 of Limitation Act read with Article 54 of Schedule makes it
clear that the limitation is three years when the Plaintiff has notice
that performance is refused.
23. He submits that the contract was terminable in view of Clause 7
of Form V prescribed under MOFA Rules and thus there is no
continuous cause of action. He would further submit that in this case
the question of limitation was pure question of law and not mixed
question of law and fact requiring evidence to be led.
24. In support, he relies upon the following decisions.
1. The Church of Christ Charitable Trust & Educational
Charitable Society, represented by its Chairman V/s.
Ponniamman Educational trust represented by its
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Chairperson/Managing Trustee (Supreme Court) 03-07-2012,
2012 AIR (SC) 3912;
2.Sejal Glass Limited V/s. Navilan Merchants Pvt. Ltd.
(Supreme Court) 21-08-2017, 2017 AIR (SCW) 4477;
3.Madhav Prasad Aggarwal V/s. Axis Bank Ltd. (Supreme
Court) 01-07-2019, 2019 (7) SCC 158;
4.Chetana Shankar Manapure V/s. Bandu Tanaji Barapatre
(Bombay High Court) 27-01/19-03-2020, 2020 (4) Mh.L.J. 481;
5.Sheela Ram Vidhani V/s. S. K. Trading Company (Bombay
High Court) 12-03/19-06-2021, 2021 (4) ALL. M.R. 474;
6. State of Punjab & Another V/s. Balkaran Singh(Supreme
Court) 18-10-2006, 2007 AIR (SC) 641;
7. M/s. Suniti Prints & Ors. V/s. Sheela Ram Vidhani & Ors.,
Special Leave to Appeal © No.15635/2021;
8. Balakishna Savalram Fujari Waghinare, Duttatraya
Gangaram Pujari Waghmare, Madhay Tukaram Puari
Waghmare V/s. Shree Dhyaneshwar Maharaj Sansthan
(Supreme Court) 26.03.1959, 1959 AIR (SC) 798;
9. Sankar Dastidar V/s. Shrimati Banjula Dastidar. (Supreme
Court) 05.12.2006, 2007 AIR (SC) 514;
10. Anna Parisa Chougule since deceased by his heirs and
legal representatives V/s. Sulochana Nabhiraj Chougule
(Bombay High Court) 02.02.2017, 2017(6) Mh. L. J. 693;
11.Samruddhi Co-operative Housing Society Limited V/s.
Mumbai Mahalaxmi Construction Private Limited (Supreme
Court) 11.01.2022, 2022 0 Supreme (SC) 90;
12. Brihan Mumbai Electric Supply and Transfer Undertaking
(BEST) V/s. BEST Jagrut Kamgar Sanghatana and Others
(Bombay High Court) 06.03/05.06.2023, 2023 (6) Bom. C.R.
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528;
13.Jayantilal Investments V/s. Madhuvihar Co-operative
Housing Society (Supreme Court) 10/01/2007, 2007 AIR (SC)
1011;
14.Samruddhi Co-operative Housing Socitey Limited V/s.
Mumbai Mahalaxmi Construction Private Limited (Supreme
Court) 11/01/2022, 2022 (4) SCC 103;
15.Ahmmadsaheb Abdul Mila (Dead) Through L.Rs. V/s.
Bibijan and Others (Supreme Court) 01/04/2009, 2009 (5)
SCC 462;
16.Dahiben V/s. Arvindbhai Kalyanji Bhanusali (Gajra) (D)
Thr. Lrs. And Others (Supreme Court) 09/07/2020, 2020 AIR
(SC) 3310;
17.Shakti Bhog Food Industries Limited V/s. Central Bank of
India and Another (Supreme Court) 05/06/2020, 2020 AIR
(SC) 2721;
18.S. Shivraj Reddy (Died) thr. His Lrs. and Another V/s. S.
Raghuraj Reddy and Others (Supreme Court) 16/05/2024;
19. Altaf Fakir Baig V/s. Goel Ganga Development (Ind)
Private Limited (Bombay High Court) 10/01/2023, 2023 (4)
Mh. L.J. 658;
20. Lata Construction V/s. Rameshchandra Ramnikial Shah
(Supreme Court) 12/08/1999, 2000 AIR (SC) 380;
21. Zodiac Developers Private Limited V/s. Krishna
Developers, Mumbai and Others(Bombay High Court)
24/08/2016, 2017 (1) Mh. L. J. 166.
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POINTS FOR DETERMINATION:
25. The following points would arise for determination:
( 1) Whether the cause of action pleaded constitutes
continuing cause as the plaint seeks enforcement of obligations
by the Defendant No 1 imposed by MOFA and thus the bar of
limitation will not apply ?
(2) Whether the rejection of the plaint in part in respect of
the relief in terms of Shop No.4 is maintainable in law ?
26. In event it is held that the answer to Point No (1) is in the
affirmative, it may not be necessary to consider Point No (2). However
as substantial arguments were advanced on both these points, I have
dealt with both the issues.
AS TO POINT NO (1):
27. Before proceeding further it would be apposite to reproduce
Order 7 Rule 11 of Civil Procedure Code which reads as under :
"11. Rejection of plaint- The plaint shall be rejected in the
following cases-
(a) where it does not disclose a cause of action;
(b) where the relief claimed is undervalued, and the Plaintiff, on
being required by the Court to correct the valuation within a
time to be fixed by the Court, fails to do so;
(c) where the relief claimed is properly valued, but the plaint is
returned upon paper insufficiently stamped, and the Plaintiff, on
being required by the Court to supply the requisite stamp-paper
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within a time to be fixed by the Court, fails to do so;
(d) where the suit appears from the statement in the plaint to be
barred by any law:
(e) where it is not filed in duplicate;
(f) where the Plaintiff fails to comply with the provisions of Rule
Provided that the time fixed by the Court for the correction of
the valuation or supplying of the requisite stamp-paper shall not
be extended unless the Court, for reasons to be recorded, is
satisfied that the Plaintiff was prevented by any cause of an
exceptional nature from correcting the valuation or supplying
the requisite stamp-paper, as the case may be, within the time
fixed by the Court and that refusal to extend such time would
cause grave injustice to the Plaintiff."
28. It is too well settled a proposition that while adjudicating an
application under Order 7 Rule 11 of CPC it is only the averments in the
plaint read with the documents annexed to the plaint which are
germane. The issue cannot be decided on the basis of any other
material produced by the Defendant which will also include the written
statement. The Plaintiff has pleaded that there were two separate
agreements dated 1st February 2001 executed in respect of shop No.4
and Flat No.4. At cost of repetition, the relevant paragraphs of the
plaint are referred to. In paragraph 6 of the plaint, the Plaintiff has
pleaded that Defendant has failed and neglected to perform his
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obligations under MOFA and therefore the Plaintiff is entitled for
mandatory injunction directing the Defendants to lodge the
agreement for registration and to comply with his obligation under
Section 4 of MOFA to specify in the agreement the prescribed
particulars including the date of possession. Paragraph 8 which is the
bone of contention of the parties reads as under:
"8. The Plaintiff state that Defendant addressed to the
Plaintiff two letters dated 10/01/2002 and 23/01/2002
admitting the fact that the Plaintiff is the flat purchaser making
false and baseless allegations demanding balance of purchase
price. The Plaintiff states that the balance purchase price is
payable at the time of possession. The Defendant has no right to
terminate the agreement for sale being Exhibit "A" and "B"
hereto. The Plaintiff states that whatever stated in the said
letter which is contrary to and inconsistent with whatever stated
hereinabove is false and hereby denied."
29. In paragraph No.10 the Plaintiff has stated that the Defendant
being promoter is liable to construct and complete construction of
building on the said plot of land and put Plaintiff in possession of shop
no.4 and Flat No.4 pursuant to the provisions of MOFA. In paragraph
No.11 Plaintiff has stated that she is ready and willing to pay balance
amount of purchase price at the time of delivery of possession by
Defendant after obtaining occupation certificate in part performance
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of the obligations under MOFA.
30. It is only subsequently by way of an amendment in the year 2007
that Defendant Nos.3 and 4 came to be impleaded and the amended
paragraph 12A pleads that the Plaintiff came to know from the written
statement of Defendant No.1 that share certificate has been issued on
28th September 2002 in favour of Defendant No.2. Although
Defendant Nos.3 and 4 came to be impleaded the prayer clauses
remained unamended and reads thus:
"a) That this Hon'ble Court be pleased to declare that
there exists valid and subsisting ágreements for sale
dated 5-2-2001 of shop No.4 and flat No.4 in a building
under construction on Plot No. 307, C.S.No.825 (part) of
Scheme 52 of Worli Estate, Worli, Mumbai -400 025 being
Exhibit "A" and "B" hereto under the provisions of the
said MOF Act and entitled for specific purpose thereof.
b) In consequence of granting prayer (a) this Hon'ble
Court be pleased to direct the Defendant as and by way of
mandatory injunction to lodge the said agreements being
Exbibit A" and "B" for registration at the office of Sub-
Registrar, Mumbai Suburban District after payment of
requisite stamp duty.,
c) In consequence of granting prayer (a) above the Defendant be
ordered and directed as and by way of mandatory injunction of
this Hon'ble Court to complete the construction of the building
on the plot of land being Plot No.307, C.S. No.825 (part) of
Scheme 52 of Worli Estate, Worli. Mumbai-400 025 and put the
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Plaintiff in possession of Shop No.4 in the building.
d) The Defendant by himself, by his servants, agents
or any other person or persons claiming by under or through
them be restrained by an order and injunction of this Hon'ble
Court from transferring, parting with possession, alienating or
encumbering in any manner whatsoever the Shop No.4 and Flat
No.4 in the said building situate at Worli save and except
in favour of the Plaintiff."
31. The agreements executed by the Defendant No 1 are
undisputedly executed under the provisions of MOFA. Section 3 of
MOFA deals with general liabilities of the promoter and sub section (2)
(f) of Section 3 provides that the promoter shall specify in writing the
date by which possession of he flat is to be handed over(and he shall
hand over such possession accordingly). Section 4 of MOFA enjoins
upon the promoter to enter into a written agreement in the prescribed
form and to register the agreement. The reliefs sought by the Plaintiff
read with the pleadings will disclose that the Plaintiff seeks
enforcement of the obligations of the Promoter under Section 3 and 4
of MOFA by asking for registration of the agreement and for
possession of the flat and the shop by seeking a declaration that the
agreements are valid and subsisting agreements.
32. Section 3 of Limitation Act, 1963 bars every suit instituted after
the prescribed period of limitation although limitation has not been set
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up as a defence. Section 22 of Limitation Act provides that in case of
continuing breach of contract a fresh period of limitation begins to run
at every moment of the time during which the breach continues.
33. The agreements were executed under MOFA which imposes an
obligation to register the agreements and provide for handing over
possession on the date stated in the agreement. The Apex Court in
Samruddhi Co-operative Housing Society Ltd (supra) dealt with
Section 22 of Limitation Act in the context of Consumer Protection Act,
1986 in view of the continuous default to obtain occupancy certificate.
The Apex Court considered various decisions on the subject and held
in paragraph 15, 17 and 18 as under:
"15. A continuing wrong occurs when a party continuously
breaches an obligation imposed by law or agreement. Section 3
imposes certain general obligations on a promoter. These
obligations interalia include making disclosures on the nature of
title to the land, encumbrances on the land, fixtures, fittings and
amenities to be provided, and to not grant possession of a flat
until a completion certificate is given by the local authority. The
responsibility to obtain the occupancy certificate from the local
authority has also been imposed under the agreement to sell
between the members of the appellant and the respondent on
the latter.
17. Section 3 and 6 of the MOFA indicate that the promoter has
an obligation to provide the occupancy certificate to the flat
owners.....
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18. Based on these provisions, it is evident that there was an
obligation on the respondent to provide the occupancy
certificate and pay for the relevant charges till the certificate
has been provided..........This continuous failure to obtain an
occupancy certificate is breach of the obligations imposed on the
respondent under MOFA and amounts to continuing wrong....."
34. In case of Indirabai Baburao Kanade vs Matru Chaya Co-op. Hsg
Society (supra), the relief sought was execution of conveyance and
learned Single Judge of this Court held that relief of enforcement of
statutory obligation under MOFA can neither be barred by law of
limitation nor capable of monetary evaluation.
35. In Cooperage Woodhouse Co-op. Hsg Society Ltd and
Madhuvihar Co-op Housing Society vs Jayantilal Investiments and
Ors(supra), it was held that breach of provisions of Section 11 of
MOFA is a continuous breach giving continuing cause of action to
Plaintiff.
36. In the instant case the Plaintiff seeks enforcement of the
statutory obligations imposed by Section 3 and 4 of MOFA. Under
Section 4 of MOFA the agreement with the flat purchaser is required to
be in prescribed form i.e. Form V prescribed by Rule 5 of MOFA Rules.
It may be noted that, in that prescribed form, there is an explanatory
note which inter alia states that certain clauses shall be statutory and
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shall be retained. Note 1 clarifies that a model form of agreement has
been prescribed which could be modified and adapted in each case
depending upon the facts and circumstances of each case but, in any
event, certain clauses including clauses 9 and 22 shall be treated as
statutory and mandatory and shall be retained in each and every
individual agreements between the promoter and the flat taker. Clause
9 provides for the agreement to specify the date on which the
possession of the flat shall be given to the flat purchaser and on
demand by the flat purchasers to refund the amount already received
along with interest. Clause 22 provides that the flat purchasers
agreement to be presented for registration within the time limit
prescribed by the Registration Act and imposes obligation on the
Promoter to attend the office and admit execution thereof.
37. The Plaintiff was thus seeking enforcement of Clause 9 and 22 of
the Model Agreement which are non derogable and constitutes
continuing wrong till the obligations are complied with. The reliance
placed by Mr. Joshi on Clause 7 of the Model Agreement pertaining to
termination is mis placed as Clause 7 does not find mention as being
statutory and mandatory in the Note 1 to the Model Agreement.
Coming to the agreement dated 1st February, 2001 executed between
the parties in respect of Shop No 4, there is no termination clause in
the said agreement and it appears that the absence of termination
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clause is for the reason that the total consideration agreed was
Rs.10,03,460/- out of which the plaint pleads payment of Rs.9,10,000/-
which amounts to substantial payment.
38. The Defendant No 1 has admittedly neither registered the
agreement executed between the parties nor specified the date on
which possession is to be handed over and has not handed over
possession which amounts to a continuous breach of obligations
imposed by MOFA and is thus a continuing wrong.
39. The decision of Balakrishna Savalram Fujari Waghinare,
Duttatraya Gangaram Pujari Waghmare, Madhay Tukaram Pujari,
Babu Tukaram Pujari Waghmare, Sankar Banjula Dastidar, Anna
Parisa Chougule, and Brihanmumbai Electric Supply and Transport
Undertaking (supra) considered the cause of action on the facts
contained therein to ascertain whether the same is a continuing wrong
about which there can be no dispute. I have hereinabove considered
the pleadings in the plaint in light of the settled legal position and have
held that the cause of action being one seeking enforcement of MOFA
obligations constitutes continuing cause of action.
40. The decisions of Ahmmadsahab Abdul Mila (dead), Dahiben
and Shakti Bhog (supra) was not rendered in the context of MOFA
agreement and there is no quarrel with the proposition of law laid
down in the said decisions. However the decisions does not assist the
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case of the Respondent No 3. Pertinently in Shakti Bhog, the Apex
Court noted the decision of Sopan Sukhdeo Sable vs Asst Charity
Commr [(2004) 3 SCC 137] which held thus:
"15. There cannot be any compartmentalisation, dissection,
segregation and inversions of the language of various
paragraphs in the plaint. If such a course is adopted it would run
counter to the cardinal canon of interpretation according to
which a pleading has to be read as a whole to ascertain its true
import. It is not permissible to cull out a sentence or a passage
and to read it out of context in isolation. Although it is the
substance and not merely the from that has to be looked into,
the pleading has to be construed as it stands without addition or
subtraction or words or change of its apparent grammatical
sense. The intention of the party concerned is to be gathered
primarily from the tenor and terms of his pleadings taken as a
whole. At the same time it should be borne in mind that no
pedantic approach should be adopted to defeat justice on hair
splitting technicalities".
41. The Trial Court has held that the termination of the agreement
by letter dated 23rd January, 2002 gave cause of action to file the suit,
which finding is sought to be supported by Mr. Joshi. Apart from the
above discussion that there is continuous cause of action as the plaint
seeks enforcement of MOFA obligations, even if it is accepted that
there is no continuing wrong the finding of the Trial Court cannot be
sustained as the finding of Trial Court is based on reading of evidence
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which is impermissible in an application under Order VII Rule 11 of CPC.
42. There is no specific paragraph in the plaint dedicated to the
cause of action and paragraph 8 of the plaint, which is reproduced
hereinabove, does not disclose that there is refusal of performance by
the Defendant by termination which could be said to give rise to cause of
action. The Trial Court in paragraph 16 of the impugned judgment has
relied upon the contents of the communications dated 10 th January,
2002 and 23rd January, 2002. The communications were not annexed to
the plaint and the reference in paragraph 8 of the plaint to those
communications was to plead that by those two communications false
and baseless allegations demanding purchase price were made. The only
pleading is that Defendant has not right to terminate the agreement
and there is no reference that by those two communications the
agreements had been terminated. The communications were produced
by the Plaintiff during the evidence and marked as Exhibit 13. The Trial
Court has thus relied upon extraneous material and read the documents
produced in evidence to determine the starting point of period of
limitation which is impermissible.
43. If the case of Defendant No.3 that the cause of action arose
upon termination of agreements is accepted even then the question
being disputed question of fact will require evidence to be led. Article
54 of Schedule to Limitation Act, 1963 provides for period of three
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years for specific performance of contract and the time begins to run
where no date has been fixed for performance when the Plaintiff has
notice that performance has been refused. If the cause of action is not
held to be continuing cause of action, upon consideration of the entire
evidence, it may have been possible for the Trial Court to come to the
finding that the suit is barred by limitation but upon reading of the
Plaint, without the said communications being on record, the finding of
the Trial Court rejecting the plaint on basis of contents of the
communication dated 23rd January, 2002 is unsustainable.
44. The contention of Mr. Joshi that the question of limitation is
pure question of law ignores the pleadings in paragraph 8 which does
not specifically plead that the agreements were terminated by the
communication dated 23rd January, 2002 and thus the question of
limitation is not pure question of law which could be decided in an
application under Order VII Rule 11. The decision of S. Shivraj Reddy
(supra) relied upon by Mr. Joshi does not assist the Respondent No 3 as
in that case the death of the partner was an undisputed position and as
partnership was at Will, the law provided for dissolution of partnership.
The said decision is rendered in different factual scenario and is not
applicable here when there is a dispute whether the agreement could
have been terminated.
45. By way of amendment it is pleaded in paragraph 12(a) that the
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Plaintiff came to know from the written statement dated 1 st August,
2005 that Defendant No 2 has issued share certificate in favour of
Defendant No 3. The contention of Mr. Joshi is that the suit is barred as
in the month of May, 2003 the Plaintiff was informed that the
Defendant intended to put the Defendant No 3 in possession and the
Defendant was impleaded in the year 2007. It needs to be noted that in
paragraph 9, the Plaintiff has pleaded about the information received
about the intention to put the Defendant No 3 in possession of Shop
No 4 but it is only when the share certificate was issued in name of
Defendant No. 3, about which the Plaintiff became aware after
acquiring knowledge from the written statement dated 1 st August,
2005, it can be stated that there was unequivocal infringement of
rights of the Plaintiff giving rise to cause of action to implead the
Defendant No 3. Section 21 of Limitation Act provides that upon
addition of new Defendant the suit shall be deemed to have been
instituted when the Defendant was made a party. In the instant case
though the plaint was amended, there was no amendment to the
prayer clause and there is thus no challenge to the share certificate
issued in favour of Defendant No 3 or seeking restoration of
possession of flat. Therefore there is no question of limitation qua the
Defendant No 3. The reliefs in the plaint remained confined to
enforcement of MOFA obligations.
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46. Having regard to the discussion above, the answer to Point No
(1) is in the affirmative.
AS TO POINT NO (2) :
47. By the impugned judgment, the Trial Court has rejected the
plaint in respect of reliefs in terms of Shop No 4. As per Order II Rule 3
of CPC, the Plaintiff may unite in the same suit several causes of action
against the Defendant. In the present case, the Plaintiff seeks
declaration that the two agreements entered into between the
Plaintiff and Defendant No 1 under MOFA are valid and subsisting and
the consequential reliefs against the Defendant No 1. The prayer
clause does not seek any relief qua the other Defendants.
48. The contention of Mr. Joshi is that the impugned judgment
rejects the plaint against one set of Defendants and relies upon the
decisions of The Church of Christ Charitable Trust and Educational
Charitable Society represented by its Chairman (supra). In that case
the Apex Court in context of Order VII Rule 11 (a) permitted the
rejection of plaint in respect of one of the Defendants in absence of
any cause of action against the said Defendant. The decision of Sejal
Glass Limited (supra) held that it is not permissible to reject plaint qua
any particular portion of a plaint including against some of the
Defendants and continue the same against other. The decision of
Madhav Prasad Aggarwal (supra) followed the decision of Sejal Glass
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Limited (supra). Learned Single Judge of this Court considered the
position in Chetana Shankar Manapure (supra) and learned Division
Bench of this Court in Sheela Ram Vidhani & Ors Vs S.K. Trading
Company and others followed the judgment of The Church of Christ
Charitable Trust and Educational Charitable Society represented by
its Chairman (supra) as the said decision which was prior in time was
not brought to the notice of the Apex Court in the subsequent two
decisions of Sejal Glass Limited and Madhav Prasad Aggarwal (supra)
There is no quarrel with the course adopted by this Court to follow the
decision which is prior in time. However the issue with which I am
concerned is whether the impugned judgment rejects the plaint
against one set of Defendants or rejects it qua one of the reliefs.
49. In the present case although Defendant No.3 was impleaded as
party to the suit there is no relief which has been claimed qua
Defendant No.3 and the reliefs were confined to enforcement of the
obligation under MOFA qua the Defendant No 1 in respect of the two
agreements for sale by treating the agreements as valid and subsisting.
The application under Order VII Rule 11(d) of the Defendant No 3 seeks
the following prayer:
"(a) That this Hon'ble Court be pleased to reject the Plaint in so
far as the reliefs in terms of Shop No 4, Ground floor in a
Building on Plot No 307, C.S. No 825(Part) of Scheme 52 of Worli
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Estate, Worli, Mumbai 400 025 under the provisions of O-7 R-
11(d) of the Code of Civil Procedure, 1908 as barred by law of
limitation."
50. In Sejal Glass Limited, (supra) the Apex Court noted with
approval the decision in Bansi Lal vs Som Prakash AIR 1952 Punjab 38
which held that the law does not change merely because the Plaintiff
chooses in one suit to combine several causes of action against several
Defendants which the law allows him. The application under Order VII
Rule 11 (d) of CPC seeks rejection of relief in respect of Shop No 4 as
barred by limitation and the impugned judgment rejects the plaint in
part not against Defendant No 3 but in respect of relief sought in
respect of shop No.4, whereas it has continued with the plaint in
respect of relief sought in respect of Flat No.4.
51. Hence, by the impugned judgment, the rejection of the plaint is
not as regards the Defendant No 3 but is qua part of the relief in
respect of shop No 4 which is impermissible in law. Accordingly, I
answer the Point No (2).
CONCLUSION:
52. In light of the discussion above, the Appeal is allowed and the
impugned judgment and order of the Trial Court dated 5 th July, 2012 is
quashed and set aside. The suit stands restored qua the reliefs sought
in respect of Shop No 4. In view of disposal of appeal, Interim/Civil
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Applications, if any, do not survive for consideration and stand
disposed of.
[Sharmila U. Deshmukh, J.]
53. At this stage, request is made for stay of the judgment for a
period of 8 weeks. Said request is opposed by the learned counsel for
the respondents. Judgment is stayed for a period of 8 weeks from the
date of uploading of the judgment.
[Sharmila U. Deshmukh, J.]
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Signed by: Rajeshwari S. Karve
Designation: PA To Honourable Judge
Date: 20/09/2024 20:14:18
