Chattisgarh High Court
Gagan Rathi vs Ramdas Agrawal (Died) Through Lrs on 12 January, 2023
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FA No. 238 of 2019
AFR
HIGH COURT OF CHHATTISGARH, BILASPUR
FA No. 238 of 2019
1. Gagan Rathi S/o Shri Madan Lal Rathi Aged About 48 Years
Occupation - Partner Shri Krishna Builders And Developers,
Business , Having Office At Ground Floor Of Chaitanya
Nagar Complex, Raigarh, District Raigarh Chhattisgarh.
(Though In Impugned Order Wrongly Mentioned As
Resident Chaitanya Nagar Ground Floor) (Defendant No. 1)
2. Pawan Agrawal S/o Late Shri S.R. Agrawal Aged About 54
Years Partner Shri Krishna Builders And Developers, R/o
Kranti Nagar, Bilaspur District Bilaspur Chhattisgarh.
(Defendant No. 2)
---- Appellants
Versus
1. Ramdas Agrawal (Died) Through Lrs. As Per Hon'ble Order
Dated 27.10.2021 (Plaintiff / Purchaser)
1(a) Sunil Kumar Agrawal S/o Late Shri Ramdas Agrawal
1(b) Anil Kumar Agrawal S/o Late Shri Ramdas Agrawal
1(c) Sushil Kumar Agrawal S/o Late Shri Ramdas Agrawal
All are R/o Friends Colony, Raigarh, Tehsil And District
Raigarh (Chhattisgarh)
2. State Of Chhattisgarh, Through Collector, District Raigarh
Chhattisgarh. (Defendant No. 3) ---- Respondents
For Appellants :- Mr. Ashish Surana, Advocate
For Respondent No.1(a) to 1(c):- Mr. Hari Agrawal, Advocate
For Respondent No.2/State :- None.
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FA No. 238 of 2019
Hon'ble Shri Justice Goutam Bhaduri
Hon'ble Shri Justice N.K. Chandravanshi
Judgment On Board
Per Goutam Bhaduri, J.
12.1.2023
1. Heard.
2. This appeal is against the judgment and decree passed by
the Court of 2nd Additional District Judge, Raigarh on
19.3.2019 in Civil Suit B No.53/2016 whereby a decree of
₹11,21,000/- has been passed in favour of the plaintiff.
3. The parties to the appeal i.e., the appellant and the
respondent No.1 entered into an agreement on 15.1.2009
for purchase of certain land ad-measuring 39870 square feet
situated at village Jagatpur, Patwari Halka No.14, Tahsil and
District Raigarh for an amount of ₹ 4,21,00,000/-. Out of
such sale consideration, an amount of ₹11,21,000/- was
paid as earnest money by the respondent No.1. When the
sale could not materialize, the respondent No.1/plaintiff
served a notice on 20.6.2009 and subsequent notice on
10.8.2009 which was replied by the defendant / appellants
herein, but, eventually the agreement could not materialize
and sometime in the year 2011, Ramdas Agrawal
(respondent herein) filed a suit for declaration and injunction
against Gagan Rathi and Pawan Agrawal (appellants).
FA No. 238 of 2019
Subsequently, the said suit bearing Civil Suit No.44A / 2011
was returned by the learned trial Court invoking the
provision under Order VII Rule 10(2) of the Civil Procedure
Code (for short "the CPC") to file it before the appropriate
Court under Order VII Rule 10 of the CPC for want of Court
fee. The said suit was never filed, however, subsequently, a
second civil suit was filed on 13.1.2012 bearing Civil Suit
No. 27A/2012. The said suit was filed for specific
performance of the contract dated 15.1.2009 and for return
of the earnest money.
4. The Civil Suit No. 27A/2012 was withdrawn on 1.10.2016 at
the request of the plaintiff on an application filed under Order
XXIII Rule 1 (3) (b) of the CPC. The learned District Judge
granted permission of withdrawal with a liberty to file a fresh
suit in respect of the subject property. Thereafter, the
present suit was filed on 3.10.2016 bearing Civil Suit B No.
53/2016 wherein the plaintiff claimed for return of the
earnest money and amount of damages to the tune of
₹10,00,000/- (10 Lakhs).
5. The Additional District Judge, Raigarh framed certain issues.
The pertinent issues are No. 4 and 6. Issue No.4 was with
respect to the limitation and Issue No.6 was with respect to
the fact that whether the suit was barred under Order II Rule
2 of the CPC. The learned Court held it in favour of the
FA No. 238 of 2019
respondent No.1 / plaintiff and decreed the suit for return of
the earnest money. Hence, this appeal.
6. Learned counsel for the appellants would submit that prior
to the suit in which the decree is under challenge, initially,
the plaintiff had filed a suit for permanent injunction which
was returned and the suit for permanent injunction (Exhibit
D1) was against Pawan Agrawal and Gagan Rathi in their
personal capacity. He would further submit that the said suit
having been returned invoking the power under Order VII
Rule 10 (2) of the CPC, subsequent civil suit was filed
against Shri Krishna Builders and Developers, Raigarh
through its partners Gagan Rathi and Pawan Agrawal which
is Exhibit D2. The said civil suit was withdrawn on an
application filed by the plaintiff under Order XXIII Rule 1 (3)
(b) of the CPC. It is submitted that the said withdrawal of
suit and liberty granted was affirmed by the High Court vide
its judgment dated 20.9.2017 passed in WP227 No.790 of
2016. He would submit that subsequent Civil Suit B No.53
of 2016 (the instant one) was again filed by plaintiff not
against the partnership firm but against the partners Gagan
Rathi and Pawan Agrawal. He would submit that since the
subsequent suit was filed on 03.10.2016 which was based
on an agreement dated 15.1.2009 and refusal of subsequent
civil suit, which was barred by time under Order XXIII as
FA No. 238 of 2019
Order XXIII Rule 2 of the CPC would not save the limitation.
Further reference is made to Section 14 of the Limitation
Act, 1963 to submit that benefit of Section 14 to exclude the
limitation can only be given in case the earlier suit filed was
adjudicated for defect in jurisdiction or other cause of like
nature.
7. Reliance is placed on the judgments passed by the Hon'ble
Supreme Court in the matters of Deena (Dead) through
LRs. Vs. Bharat Singh (Dead) through Lrs. & Others
reported in [(2002) 6 SCC 336], Zafa Khand & Others
Vs. Board of Revenue, U.P. & Others reported in [1984
(Supp) SCC 505] and Gurdit Singh & Others Vs. Munsha
Singh & Others reported in [(1977) 1 SCC 791] to submit
that the defect of jurisdiction or other cause of like nature
denotes that the Court must lack jurisdiction to entertain the
suit or proceeding, therefore, the exclusion of the period of
pendency is granted. It is stated in earlier suit, when was
withdrawn by invoking Order XXIII Rule 1 of the CPC it was
not on jurisdictional issue and the withdrawal cannot be read
in favour as to condone the limitation as the word used in
Section 14 of the Limitation Act, 1963 ought to be construed
ejusdem generis with the words "defect of jurisdiction" . He
would further submit that the subsequent suit for refund of
the earnest money shall also be barred under Order II Rule
FA No. 238 of 2019
2 of the CPC, inasmuch as even taking into consideration
the first suit in which the liberty was given was against the
partnership firm and not against the individual partners. He
would further place reliance upon the judgments passed by
the Hon'ble Supreme Court in the matters of State Bank of
India Vs. Gracure Pharmaceuticals Limited reported in
[(2014) 3 SCC 595] and Raptakos Brett And Company
Limited Vs. Ganesh Property reported in [(2017) 10 SCC
643] and submit that the finding of the learned Court below
is perverse, against the law and needs to be set-aside.
8. Per contra, learned counsel for the respondent would submit
that the agreement Exhibit P1 was in between Ramdas
Agrawal and Pawan Agrawal & Gagan Rathi in their
individual capacity though they were partners of the firm. He
would submit that the property in question which is shown in
the agreement was property of partnership firm namely Shri
Krishna Builders and Developers which was being dealt by
the individual partners in their capacity as such.
9. Referring to the notice dated 10.8.2009 (Exhibit P2) and the
reply to notice dated 18.8.2009 (Exhibit P4) he would submit
that the appellant/ defendant admitted to return the earnest
money. He would further submit that the first injunction suit
was filed against Pawan Agrawal and Gagan Rathi which
was returned on 20.6.2011 (Exhibit D1) and thereafter the
FA No. 238 of 2019
suit for specific performance and return of advance was filed
on 13.1.2012 (Exhibit D2). He would again submit that after
filing of the said civil suit, the plaintiff came to know about
the mischief by the defendant that the subject property was
sold to third parties and certain defects and interpolation in
the documents of layout, came to their knowledge, as such,
filed an application under Order XXIII Rule 1 (3) (b) with a
liberty to file a fresh suit. The liberty to file a fresh suit was
granted by the Court in Civil Suit No.27A of 2012 on
01.10.2016 (Exhibit D2) and on the basis of the liberty
granted in the earlier suit, the subsequent civil suit was filed.
10. Answering to the issues No. 4 and 6 which pertains to
limitation and the bar of the suit respectively, he would
submit that when the liberty was granted by the Court
inclusive of the entire claim, the earlier suit which included
the return of the amount of earnest money, the same cannot
be held to be barred. He relied upon the judgment rendered
by the Hon'ble Supreme Court in the matters of Gurinderpal
Vs. Jagmittar Singh [(2004) 11 SCC 219] and Sucha
Singh Sodhi (Dead) through legal representatives Vs.
Baldev Raj Walia And Another reported in [(2018) 6 SCC
733] to submit that the cause of action for the cases was
also different.
11. Further making a submission on Section 14 of the Limitation
FA No. 238 of 2019
Act, 1963 reliance is placed in the judgment rendered by the
Hon'ble Supreme Court in the matters of Roshanlal
Kuthalia & Others Vs. R.B. Mohan Singh Oberoi
reported in [(1975) 4 SCC 628] and Union of India &
Others Vs. West Coast Paper Mills Ltd. & Another
reported in [(2004) 3 SCC 458] and Mohinder Singh
(Dead) through legal representatives Vs. Paramjit Singh
& Others reported in [(2018) 5 SCC 698] to submit the
substantial identity of subject-matter of the lis is a pragmatic
test and while interpreting such section liberal touch must be
adopted. With respect to the partnership, reference is made
to the judgment rendered by the Supreme Court in the
matter of Purushottam Umedbhai and Co. Vs. M/s.
Manilal and Sons reported in [AIR 1961 SC 325] to submit
that when the partners have been sued, the word "firm" or
the "firm name" is merely a compendious description of all
the partners collectively, therefore, the order is well merited
and does not call for interference.
12. We have heard learned counsel for the parties and perused
the records.
13. On 15.1.2009, an agreement (Exhibit P1) for purchase of
property was entered in between Pawan Agrawal and
Gagan Rathi being sellers with Ramdas Agrawal, the
purchaser, who is the plaintiff. The perusal of the agreement
FA No. 238 of 2019
would show that the subject property to be shown as
property of partnership firm Shri Krishna Builders and
Developers. It further purports that sale agreement was for
₹4,21,00,000/- and out of that, ₹11,21,000/- were paid, as
the earnest money. The said agreement could not be
honored by the parties which led to dispute, as such the
notices were exchanged between them. On 10.8.2009,
notice (Exhibit P2) was served to Pawan Agrawal and
Gagan Rathi by Ramdas Agrawal which was replied vide
Exhibit P4 by them on 18.8.2009. Perusal of the said reply
by the appellants shows that they offered to return the sum
of earnest money of ₹11,21,000/-. Subsequently, it appears
that, that also did not materialize and eventually a civil suit
was filed by Ramdas Agrawal seeking permanent injunction
against Pawan Agrawal and Gagan Rathi wherein the
learned Civil Judge, Class II by an order dated 20.6.2011,
returned the said civil suit with observation that the original
lis appears to be for specific performance and since less
Court fee was paid, the plaint was returned for presentation
to proper Court with adequate Court fees. However, such
civil suit was not filed again.
14. Subsequently thereto a civil suit for specific
performance and for return of advance money was filed on
13.1.2012 by respondent (plaintiff) which came to be
FA No. 238 of 2019
withdrawn on 01.10.2016 (Exhibit D2). The perusal of
withdrawal order would show that description of the parties
as defendant is shown as Shri Krishna Builders and
Developers through partners Gagan Rathi (appellant No.1)
and Pawan Agrawal (appellant No.2). The submission of the
appellant that it was exclusively against the partnership firm
namely Shri Krishna Builders and Developers cannot be
accepted for the reason that perusal of the cause title of the
said suit would show that Gagan Rathi and Pawan Agrawal,
who are residents of different place Raigarh and Bilaspur
respectively were individually arrayed and their status was
shown as partners of Shri Krishna Builders and Developers.
Further the perusal of the order passed by the Court of
District Judge would show that the Court recorded the fact
that after filing of the said suit, certain further sales have
been executed in favour of the third parties, therefore, it may
lead to multiplicity of the proceedings and for the reason the
defendants No.1 and 2, who are Gagan Rathi and Pawan
Agrawal (not as a partners) since have sold the subject
property in favour of the third parties and particulars of such
are required to be adjudicated, therefore, as a result, the
prayer for withdrawal was found to be proper and eventually
the Court directed for withdrawal of the said suit with liberty
to file a fresh suit in respect of the suit property and the part
thereof in favour of the plaintiff/ respondent.
FA No. 238 of 2019
15. Order XXIII Rule 1 sub Rule 3 of the Civil Procedure Code
which allows the withdrawal and adjustment of the suit is
reproduced here under:-
"(3) Where the Court is satisfied,-
(a) that a suit must fail by reason of some formal
defect, or
(b) the there are sufficient grounds for allowing
the plaintiff to institute a fresh suit for the
subject-matter of a suit or part of a claim,
it may, on such terms as it thinks fit, grant the
plaintiff permission to withdraw from such suit or
such part of the claim with liberty to institute a fresh
suit in respect of the subject-matter of such suit or
such part of the claim."
16. Plain reading of the sub Rule 3 (b) would show that when
there are sufficient grounds for allowing the plaintiff to
institute a fresh suit for the subject-matter of a suit or part of
a claim, on satisfaction of the Court, the Court may order
accordingly.
17. The second question which falls for consideration as to
whether the subsequent suit which was filed for refund of the
advance and damages on 03.10.2016 was whether within
limitation and whether limitation can be saved or not by
virtue of Section 14 of the Limitation Act, 1963. The relevant
part Section 14(3) of the Limitation Act, 1963 which would be
necessary for adjudication is reproduced here under :-
FA No. 238 of 2019
"14 (3). Notwithstanding anything contained in rule 2 of
Order XXIII of the Code of Civil Procedure, 1908 (5
of 1908), the provisions of sub-section (1) shall
apply in relation to a fresh suit instituted on
permission granted by the court under rule 1 of that
Order where such permission is granted on the
ground that the first suit must fail by reason of a
defect in the jurisdiction of the court or other cause
of a like nature."
18.The Supreme Court in the matter of Roshanlal Kuthalia
(Supra) interpreted the scope of Section 14 of the Limitation
Act, 1963. The Court held that in order to give the protection
benefit of Section 14 (3), the primary issue would be the
substantial identity of the subject-matter of the lis would be
a pragmatic test which would include within its scope any
circumstance legal or factual, which inhibits entertainment or
consideration by Court of the dispute on merits and liberal
touch must inform the interpretation of the said Section. The
paragraph 27 of the said judgment which would be relevant
is reproduced here under:-
"27. Certainly, Section 14 is wide enough to cover
periods covered by execution proceedings ( See
1959 SCR 811 at 818 [Raghunath Das v. Gokul
Chand , AIR 1958 SC 827, 831 : 1959 SCR 811,
818] ). After all Section 47 itself contemplates
transmigration of souls as it were of execution
petitions and suits. The substantial identity of the
subject-matter of the lis is a pragmatic test.
FA No. 238 of 2019
Moreover, the defects that will attract the provision
are not merely jurisdictional strictly so called but
others more or less neighbours to such deficiencies.
Any circumstance legal or factual, which inhibits
entertainment or consideration by the court of the
dispute on the merits, comes within the scope of the
section and a liberal touch must inform the
interpretation of the Limitation Act which deprives
the remedy of one who has a right [ See(1971) 2
SCR 397 at 401 [India Electric Works Ltd. v.
James Mantosh , AIR 1971 SC 2313, 2316 : (1971)
2 SCR 397, 401] ]. In the Associated Hotels case (i.
e. the very lis in its earlier round on the execution
side) this Court pointed out [(1961) 1 SCR 259 at
272 [Associated Hotels of India Ltd. v. R.B.
Jodhu Mal Kuthalia , AIR 1961 SC 156, 163] that
the question was one of initial jurisdiction of the
Court to entertain the proceedings. Thus in this very
matter, the obstacle was jurisdictional and the
exclusionary operation of Section 14 of the
Limitation Act was attracted."
19.The Supreme Court in the matter of Union Of India (Supra)
reported in [(2004) 3 SCC 458] has further relied on the
principle laid down in the matter of Roshanlal Kuthalia
(Supra) and at paragraph 14 has held as under :-
"14. In the submission of Mr Malhotra, placing reliance
on CST v. Parson Tools and Plants [(1975) 4 SCC
22 : 1975 SCC (Tax) 185] , to attract the applicability
of Section 14 of the Limitation Act, the following
requirements must be specified: (SCC p. 25, para 6)
'6. (1) both the prior and subsequent
proceedings are civil proceedings prosecuted
by the same party;
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(2) the prior proceedings had been
prosecuted with due diligence and in good
faith;
(3) the failure of the prior proceedings was
due to a defect of jurisdiction or other cause
of a like nature;
(4) both the proceedings are proceedings in a
court.'
In the submission of the learned Senior Counsel,
filing of civil writ petition claiming money relief
cannot be said to be a proceeding instituted in good
faith and secondly, dismissal of writ petition on the
ground that it was not an appropriate remedy for
seeking money relief cannot be said to be "defect of
jurisdiction or other cause of a like nature" within the
meaning of Section 14 of the Limitation Act. It is true
that the writ petition was not dismissed by the High
Court on the ground of defect of jurisdiction.
However, Section 14 of the Limitation Act is wide in
its application, inasmuch as it is not confined in its
applicability only to cases of defect of jurisdiction but
it is applicable also to cases where the prior
proceedings have failed on account of other causes
of like nature. The expression "other cause of like
nature" came up for the consideration of this Court
in Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi
[(1975) 4 SCC 628] and it was held that Section 14
of the Limitation Act is wide enough to cover such
cases where the defects are not merely jurisdictional
strictly so-called but others more or less neighbours
to such deficiencies. Any circumstance, legal or
factual, which inhibits entertainment or
consideration by the court of the dispute on the
merits comes within the scope of the section and a
liberal touch must inform the interpretation of the
Limitation Act which deprives the remedy of one
FA No. 238 of 2019
who has a right."
20. The Supreme Court recently in the matter of Mohinder
Singh (Supra) further reiterated the said view at paragraph
23 which is reproduced here under:-
"23. The expanse of Section 14 of the Act, therefore,
is not limited to mere jurisdictional issue but also
other cause of a like nature. Taking cue from this
decision, the appellant would contend that the
plaintiff immediately after compromise judgment was
pronounced on 20-8-1963 took recourse to
Execution Petition No. 433 of 1964 on 23-12-1964
but the same was dismissed by the executing court
on 7-8-1965, as being premature. The plaintiff verily
believed that the execution of the decree passed in
the previous suit would result in getting possession
of the property albeit after the death of Ujjagar
Singh. Consequently, after the death of Ujjagar
Singh on 14-1-1971, the plaintiff moved second
execution petition on 18-2-1971 and in those
proceedings moved an application for summoning
the file with a decree-sheet. It transpired that the
decree was drawn and the decree-sheet was made
ready on 19-8-1972, but the said execution petition
stood dismissed for default on 2-2-1973. For that
reason, the appellant on the same day moved the
third execution petition i.e. on 2-2-1973 which,
however, was dismissed on 2-2-1974 on the ground
that the remedy for the plaintiff to get possession of
the suit property was to file a suit for possession on
the basis of the declaratory decree. It is only
thereafter the plaintiff resorted to the subject suit,
being Civil Suit No. 173 of 1974 filed on 11-6-1974."
FA No. 238 of 2019
21.The order of withdrawal by the District Judge dated
01.10.2016 when translated in the facts of the above
principle it shows that while allowing the withdrawal, the
subject matter of the suit was taken in its entirety including
the part thereof which would certainly envelope the claim for
part of amount paid as an advance for purchase of the
property is earnest money. Therefore, the submission of the
appellant that the defect of jurisdiction would be construed
as other cause of like nature as ejusdem generis cannot be
interpreted as has been advanced by the learned counsel
for the appellant. In the case in hand the defect in
jurisdiction cannot be solely interpreted otherwise when it is
read with Order XXIII Rule 3 (b) of the Civil Procedure Code,
whereby, the District Judge has exercised his power that
sufficient ground exists for the plaintiff to file a fresh suit. In
respect of Order II Rule 2 objection that in the earlier suit
liberty was given against the partnership firm and the
subsequent suit has been filed against the partners alone,
we are unable to agree with the submissions of the
appellants. The perusal of the cause title of the earlier suit
would show that it was not against the partnership firm alone
and the presence of the defendant shows their identity being
partners of firm and while allowing the application under
Order XXIII Rule 1, the District Court evaluated the role
played individually by defendants No.1 & 2, and not as a
FA No. 238 of 2019
partners of firm.
22. Apart from this fact, as has been laid down by the Supreme
Court in the matter of Purushottam Umedbhai (Supra) the
word "firm" is the "firm name" which is a merely
compendious description of all the partners collectively.
When the description of the parties is clear and distinct, this
cannot be amalgamated to give a narrow interpretation to
hold that the subsequent suit was barred under Order II Rule
2 of the CPC.
23.In view of the aforesaid observation, we are of the view that
the judgment and decree passed by learned Court below do
not call for any interference and accordingly the appeal is
dismissed.
24.Decree be drawn accordingly. No order as to cost.
SD/- SD/-
(Goutam Bhaduri) (N.K. Chandravanshi)
Judge Judge
Ayushi
