Shri Chet Ram Gupta vs Shri Motian Devi And Ors.
2006 Latest Caselaw 864 Del

JUDGMENT

Anil Kumar, J.

1. The plaintiff has filed this suit for a specific performance for an agreement which is alleged to be executed by defendant No. 1 who is ordinarily residing at London. The defendants contended that the suit is barred because permission from Income Tax Authorities were not taken under Section 269UC of Income Tax Act as the sale consideration was for more than rupees ten lakhs and that no permission was taken from the Reserve Bank of India in violation of provisions of Foreign Exchange Regulation Act, 1973.

2. On the pleadings of the parties the issues were settled and one of the issue settled was whether the suit is barred and it was ordered to be treated as preliminary issued by order dated 9th November,1994 which issue is as under:

Whether the suit is barred by law? OPD

3. To comprehend the disputes between the parties so as to adjudicate this issue the facts in brief are enumerated hereinafter. The plaintiff has filed the above noted suit for specific performance of agreement to sell dated 16th September, 1986 modified/amended by a confirmatory letter and authority letter dated 1st October, 1986 and a power of attorney allegedly executed in favor of plaintiff by defendant No. 1 and registered on 1st October, 1986 in respect of plot of land bearing No. W-73, measuring 1014 sq. yards situated in Greater Kailash II, New Delhi.

4. The suit of the plaintiff is contested by the defendants. A written statement has been filed on behalf of defendant No. 1 contending inter-alia that the alleged agreement dated 1st October, 1986 is not signed by the defendant No. 1 and is a forged and fabricated document. The alleged agreement dated 16th September, 1986 is allegedly signed by the defendant No. 3 who was not authorized by defendant No. 1 to sell his plot of land. It was pleaded by defendant No. 1/non-applicant that the defendant No. 3 had no interest in the property nor defendant No. 1 authorized defendant No. 3 at any in regard to the property in dispute. It was contended that the property has already been transferred/gifted to defendant No. 2 and Mr. Ravi Prakash Gupta, Defendant No. 4. The plaintiff is alleged to have fabricated documents even before the municipal authorities to get permission to construct the property.

5. The defendant No. 1 contended that she had purchased the said property by registered sale deed dated 18th December, 1973 and she had been in possession of the property and had constructed a boundary wall with a temporary room. It was asserted that in September, 1986 defendant No. 3 who is known to defendant No. 1 came to defendant No. 1 in London along with plaintiff. The defendant No. 2 also resides in London. The defendant No. 3 with plaintiff met the husband of defendant No. 1 to enquire about the sale of the said property of defendant No. 1 in India. Defendant No. 1 communicated that Dr. G.S. Gupta, Defendant No. 2 had been the doctor of defendant No. 1 and his family and therefore the property will be transferred in his name or his nominee in India. The defendant No. 3 was categorically informed that the property is not for sale.

6. The defendant No. 1 contended that plaintiff represented that he is a person with great influence in India and was dealing in properties and since permissions were required from various departments including urban land ceiling department to transfer the rights in favor of defendant No. 2, the plaintiff would be able to get all the permissions and he will charge his nominal fee. Defendant No. 1 contended that believing the representation made by the plaintiff, a power of attorney dated 30th September, 1986 was executed and attested on 1st October, 1986 in favor of plaintiff before the High Commissioner of India at London, UK. The power of attorney absolutely restricted the right of the plaintiff to merely seeking the permission and nothing more.

7. It was also stated by the defendant No. 1 that a relinquishment deed dated 1st October, 1986 was also executed and attested before the High Commissioner by defendant No. 1 relinquishing her rights in the property in favor of defendant No. 2 which relinquishment deed was attested at Serial No. 2455 and this was executed in presence and to the knowledge of the plaintiff. The defendant No. 1 contended that the power of attorney in favor of plaintiff was executed in order to facilitate transfer of rights in favor of defendant No. 2 on the basis of relinquishment deed dated 1st October, 1986 and no right either to take possession or to transfer the rights in the property or deal with the property in any manner were given to plaintiff.

8. No other transactions took place between the plaintiff, defendant No. 1 and defendant No. 3 and thereafter defendant No. 3 and plaintiff left for India with the clear understanding that plaintiff will take immediate steps for the purpose of getting the property mutated in the name of defendant No. 2 and would seek all other permissions, etc. from the Reserve Bank of India and from the competent authority under the Urban Land Ceiling and Regulation Act and from the Income Tax Authorities.

9. The defendant No. 1 pleaded that when she did not receive any communication with regard to processing of various permissions by the plaintiff for transfer of property in the name of Defendant No. 2 on the basis of relinquishment deed, from various authorities, the power of attorney attested on 1st October, 1986 by defendant No. 1 in favor of plaintiff was revoked and the intimation was sent to plaintiff and defendant No. 3.

10. The defendant No. 1 had also appointed Shri V.P. Gupta as her duly constituted attorney vide an attorney dated 2nd February, 1987 which was duly attested and registered in accordance with law who acted on the basis of the power of attorney executed in his favor and obtained all requisite permissions from the Urban Land Ceiling Department, Reserve Bank of India and Delhi Administration, etc.

11. Since there had been undue delay in obtaining all the permissions, a deed of gift was executed in favor of defendant No. 2 and Shri Ravi Prakash Gupta on 6th April, 1987 which gift deed was registered on 8th September, 1987 in London and the donees duly accepted the gift.

12. The defendant No. 1's plea is that plaintiff was aware of the appointment of Shri V.P. Gupta as an attorney and subsequent gift deed executed on 6th April, 1987 in favor of defendant No. 2 and Shri Ravi Prakash Gupta. Though no other documents were executed transferring any rights in favor of plaintiff, the forgery committed by plaintiff came to notice of defendant No. 1 when her attorney Shri V.P. Gupta learnt about certain applications for getting building plan sanctioned for the said property filed with the Municipal Authorities, though defendant No. 1 had not signed any of the application. The Municipal Corporation of Delhi had also written a letter dated 21st April, 1988 which was duly replied by the defendant No. 1 by her letter dated 3rd May, 1988 clearly intimating the authorities that defendant No. 1 had not made any application nor signed any application for any permission from Municipal Authorities.

13. The defendants contended that the alleged agreement to sell dated 01.10.1986 alleged to have been executed by the defendant No. 1 has been forged and fabricated by the plaintiff. The alleged agreement between the parties is barred under the provisions of Foreign Exchange Regulation Act, 1972 as no permission was taken from the Reserve Bank of India and the alleged agreement is also barred as the alleged consideration of Rs. 24.5 lakhs is more than Rs. 10 lakhs and permission under Section 269UD of the Income Tax Act was required. In the circumstances, it was contended that the suit of the plaintiff on the basis of alleged agreement is barred and not maintainable.

14. Per contra, the plaintiff contended that the defendant No. 1 has settled in London and is a non-resident Indian. In July-August, 1986 she authorized defendant No. 3 through defendant No. 2 to arrange the sale of the said plot. Defendant No. 3 therefore, deputed his brother-in-law, Shri G.R. Singhal who is a Real Estate Broker to find out the suitable purchaser to purchase the said plot who contacted the plaintiff in August, 1986. The plaintiff pleaded that Shri G.R. Singhal in the last week of August, 1986 contacted the plaintiff along with defendant No. 3 and represented that defendant No. 3 is having an authority from the defendant No. 1 authorizing him to negotiate the sale of the said plot and also to take advance on behalf of defendant No. 1 owner of the plot who is residing in United Kingdom. The defendant No. 3 also stated to have confirmed that he was having a letter of authority from the defendant No. 1 to negotiate the sale of the said plot.

15. The plaintiff contended that on the basis of the authority letter shown by defendant No. 3 he agreed to purchase the plot for a total consideration of 24.5 lakhs. Agreement was arrived at between the plaintiff and defendant No. 3 on behalf of the defendant No. 1 that the plot was to be sold to plaintiff for a consideration of Rs. 24.5 lakhs, out of which a sum of Rs. 12 lakhs was to be paid within a month and the balance sale consideration of Rs. 12.5 lakhs was payable by 15th October, 1986. The plaintiff contended that he paid a sum of Rs. 50,000.00 by cheque No. 563341 dated 24th August, 1986; another sum of Rs. 04.00 lakhs vide cheque No. 563343 dated 16th September, 1986; another sum of Rs. 3.00 lakhs by cheque No. 563344 dated 16th September, 1986, and a sum of Rs. 4.5 lakhs by bank draft No. 455610 dated 10th September, 1986 and thus a total sum of Rs. 12.00 lakhs was paid by the plaintiff to defendant No. 3 for and on behalf of defendant No. 1 as part payments towards sale consideration of the plot.

16. The plaintiff further pleaded that defendant No. 3 also undertook to obtain a proper power of attorney from the defendant No. 1 to execute a sale agreement in respect of the said plot from her in favor of plaintiff and agreed that the possession of the plot would be delivered to plaintiff on or before 30th September, 1986.

17. According to plaintiff a few days after the execution of receipt-cum- agreement dated 16th September, 1986, the defendant No. 3 contacted the plaintiff and represented that it would be difficult for him to obtain a duly executed power of attorney from defendant No. 1 from London and so he advised the plaintiff to go to London personally and finalize the transaction with defendant No. 1. The plaintiff therefore, went to London and after a number of meetings, the terms of agreement for sale of the property were finalized and a writing dated 1st October, 1986 was executed where it was also confirmed that Shri S.P. Gupta, defendant No. 3 had been authorized by her who had negotiated the sale transaction of her plot. With a view to protect the interest of the plaintiff and to enable him to utilize the plot by raising the construction, a general power of attorney was also executed in favor of plaintiff which was duly registered in the office of Indian High Commissioner as document No. L-2456/86 by which the plaintiff authorized to look after the affairs of the plot of defendant No. 1.

18. On these pleading the issues were framed on 9th November, 1994 and it was ordered that the issue No. 1, 'Whether the suit is barred by Law' OPD? be treated as preliminary issue.

19. An application being IA No. 2522/1996 was filed for the amendment of this issue on the ground that the defendants had not taken any plea in the written statement that the suit is barred by law and there is only an oral statement before the Court to the effect that the suit is barred by Section 9 of the Foreign Exchange Regulation Act, 1973 read with Section 24 of the Contract Act as also Section 269UC of the Income-Tax Act and therefore this defense cannot be taken into consideration and therefore relief of striking the issue No. 1 whether the suit of the plaintiff was barred' was sought.

20. This application to strike off issue No. 1 was decided by order dated 14th May, 1996 and it was held as under:

It is nobody's case that the permission as contemplated by Chapter XX-C had been granted by the Income Tax Department which would enable the transfer of property in terms of Act in favor of the plaintiff. The defendants have also taken the plea in the written statement that necessary permission was required to be taken by the defendant before sale of the property from the Reserve Bank of India. However, if the permission of the Reserve Bank of India and of the Income Tax Department is not taken before sale of the property the Court may have to decide as to what is the effect of not obtaining these permissions. I, therefore, feel that issue No. 1 as framed arises from the pleadings of the parties and it has been rightly framed. Moreover, under Order 14 Rule 3 CPC issues can be framed not only on the basis of the pleadings but also on the basis of allegations made by pleaders of the parties and that contents of the documents on record. Once it had been alleged by the counsel in Court on February 14, 1996 that the suit was barred by the provisions of FERA and Income- tax Act, I fee it was the duty of the Court to frame such an issue, if not framed earlier. The point on which the said issue was argued has been properly mentioned in the order dated Feb. 14, 1996 and no party objected that the plea had not been taken in the plaint.

21. I have heard the learned Counsels for the parties in detail about the preliminary issue whether the suit is barred by law. The learned Counsel for the defendant No. 2, Ms. N. Sawhney, strongly contended that the agreement dated 1st October, 1986 purportedly signed by the defendant No. 1 is a forged document. She contended that the signatures on the alleged agreement to sell dated 1st October, 1986 for comparison with admitted signatures were sent for opinion to Central Forensic Science Laboratory, Central Bureau of Investigation which opined that the authorship of the questioned signatures could not be connected to the writer of the disputed signatures and consequently, the signatures are not genuine.

22. The learned Counsel for the defendants Ms. Sawhney very strongly contended that the agreement dated 1st October, 1986 is forged. The forgery by the plaintiff has also been established on the basis of the report of the Forensic Laboratory and therefore, the suit of the plaintiff is barred.

23. On the basis of the report of the forensic laboratory which has not yet been proved nor the opportunity has been given to the plaintiff to refute the same, it can not be termed as conclusive so as to hold that the agreement dated 1st October, 1986 is forged and decline the relief of specific performance to the plaintiff holding that his suit is barred.

24. She further contended that as per the averments made by the plaintiff, the defendant No. 1 is not a resident as contemplated under Section 9 of the Foreign Exchange Regulation Act, 1973 and therefore the permission from the Reserve Bank of India was required and in absence of the permissions, the suit of the plaintiff would be barred. Referring to para 2 of the plaint it was contended that the plaintiff has admitted that defendant No. 1 is settled in London and is a non-resident Indian. Therefore, she is not a resident as contemplated under the provisions of Foreign Exchange Regulation Act, 1973 and the permissions as contemplated under the act not obtained, the agreement cannot be enforced and the suit is barred. The defendants' counsel referred to Section 9 and 31 of the said Act which are as under:

9. Restrictions on payments - (1) Save as may be provided in and in accordance with any general or special exemption from the provisions of this Sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person in, or resident in, India shall-

(a) make any payment to or for the credit of any person resident outside India;

(b) receive, otherwise than through an authorised dealer, any payment by order or on behalf of any person resident outside India.

Explanation.- For the purposes of this clause, where any person in, or resident in, India receives any payment by order or on behalf of any person resident outside India through any other person (including an authorised dealer) without a corresponding inward remittance from any place outside India, then, such person shall be deemed to have received such payment otherwise than through an authorised dealer;

(c) draw, issue or negotiate any bill of exchange or promissory note or acknowledge any debt, so that a right (whether actual or contingent) to receive a payment is created or transferred in favor of any person resident outside India;

(d) make any payment to, or for the credit of, any person by order or on behalf of any person resident outside India;

(e) place any sum to the credit of any person resident outside India;

(f) make any payment to, or for the credit of, any person or receive any payment for, or by order or on behalf of, any person as consideration for or in association with,-

(i) the receipt by any person of a payment or the acquisition by any person of property outside India,

(ii) the creation or transfer in favor of any person of a right (whether actual or contingent) to receive payment or acquire property outside India;

(g) draw, issue or negotiate any bill of exchange or promissory note, transfer any security or acknowledge any debt, so that a right (whether actual or contingent) to receive a payment is created or transferred in favor of any person as consideration for or in association with any matter referred to in Clause (f).

(2) Nothing in Sub-section (1) shall render unlawful-

(a) the making of any payment already authorised either with foreign exchange obtained from an authorised dealer or a money-changer under Section 8 or with foreign exchange retained by a person in pursuance of an authorisation granted by the Reserve Bank;

(b) the making of any payment with foreign exchange received by way of salary or payment for services not arising from any business in , or anything done while in India.

(3) Save as may be provided in and in accordance with, any general or special exemption from the provisions of this Sub-section, which may be granted conditionally or unconditionally by the Reserve Bank, no person shall remit or cause to be remitted any amount from any foreign country into India except in such a way that the remittance as received in India only through an authorised dealer.

(4) Nothing in this section shall restrict the doing by any person of anything within the scope of any authorisation or exemption granted under this Act.

(5) For the purposes of this section and Section 19, ``security'` includes coupons or warrants representing dividends or interest and life or endowment insurance policies.

31. Restriction on acquisition, holding, etc., of immovable property in India

(1) No person who is not a citizen of India and no company (other than a banking company) which is not incorporated under any law in force in India or in which the non-resident interest is more than forty per cent. shall, except with the previous general or special permission of the Reserve bank, acquire or hold or transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise any immovable property situate in India:

Provided that nothing in this Sub-section shall apply to the acquisition or transfer of any such immovable property by way of lease for a period not exceeding five years.

(2) Any person or company referred to in Sub-section (1) and requiring a special permission under that Sub-section for acquiring, or holding, or transferring, or disposing of, by sale, mortgage, lease, gift, settlement or otherwise any immovable property situate in India may make an application to the Reserve Bank in such form and containing such particulars as may be specified by the Reserve Bank.

(3) On receipt of an application under Sub-section (2), the Reserve Bank may, after making such inquiry as it deems fit, either grant or refuse to grant the permission applied for:

Provided that no permission shall be refused unless the applicant has been given a reasonable opportunity for making a representation in the matter:

Provided further that if before the expiry of a period of ninety days from the date on which the application was received by the Reserve Bank, the Reserve Bank does not communicate to the applicant that the permission applied for has been refused, it shall be presumed that the Reserve Bank has granted such permission.

Explanation.- In computing the period of ninety days for the purposes of the second proviso, the period, if any, taken by the Reserve Bank for giving an opportunity to the applicant for making a representation under the first proviso shall be excluded.

(4) Every person and company referred to in Sub-section (1) holding at the commencement of this Act any immovable property situate in India shall, before the expiry of a period of ninety days from such commencement or such further period as the Reserve Bank may allow in this behalf, make a declaration in such form as may be specified by the Reserve Bank regarding the immovable property or properties held by such person or company.

25. Perusal of the said provisions reflect that they do not place any restrictions on entering into any agreements to sell. No absolute bar can also be culled from the said provisions as such it cannot be inferred that the alleged agreement to sell will become void. It is also no more res integra that the contract for sale by itself does not create any interest in or charge on such property. The said provisions also do not bar grant of relief of specific performance to the plaintiff and the question of permission of the Reserve Bank of India will arise, at the stage of execution of the sale deed. The act sought to regulate the sale and purchase of immovable properties in India and expressly restricted such sale and purchase by foreign citizen and foreign companies only. It seems that it was not the legislative intent of the act to regulate the transaction of sale and purchase of immovable properties in India by Indian citizens if they were resident abroad. The scope of general provisions of Section 9 cannot be enlarged so as to cover Indian citizens resident abroad. Therefore, payment of consideration of immovable property to defendant No. 1 who is admittedly an Indian citizen cannot be termed to be in violation of Section 9 of Foreign Exchange Regulation Act. In any case part of the alleged consideration was paid to defendant No. 3 on behalf of defendant No. 1 in India. In LIC v. Escorts Ltd. the Apex Court had held that under the Foreign Exchange Regulation Act, 1973 the ultimate object was to attract and regulate the flow of foreign exchange into India and thus it was evident that Parliament did not intend to adopt a rigid attitude in the matter and had left to the Reserve Bank of India to grant permission previous or ex post facto, conditional or unconditional. It was held that Section 9(1) does not use the qualifying word `previous' and omission to incorporate the qualifying word `previous' has to be construed as intentional for simple reason that whenever Parliament intended to provide for the previous approval of the reserve bank of India, it expressly so provided. The implication of the approval of the Reserve Bank of India in respect of transaction by Section 9(1) and Section 29(1) is the same, namely, it removed the actions approved by the RBI from the category of prohibited acts and saves the persons doing those acts from the charge of contravention. The Supreme Court held:

...The Reserve Bank of India is not bound to give ex post facto permission whenever it is found that business has been started or shares have been purchased without its previous permission. In such cases, wherever the Reserve Bank of India suspects an oblique motive, we presume that the Reserve Bank of India will not only refuse permission but will further resort to action under Sections 50, 61 and 63, not merely punish the offender but also confiscate the property involved. We do not think that the scheme of the Act makes previous permission imperative under Section 29(1) though the failure to obtain prior permission may expose the foreign investor to prosecution, penalty, conviction and confiscation if permission is ultimately refused. Even if permission is granted, it may be made conditional. The expression 'special permission' is wide enough to take within its stride a 'conditional permission', the condition being relevant to the purpose of the statute, in this case, the conservation and regulation of foreign exchange. For example, ex post facto permission may be granted subject to the condition that the person purchasing the shares will not be entitled to repatriation benefits.

26. A single Judge of this Court had declined to dismiss the suit of the plaintiff for specific performance on the ground that permissions from the reserve bank of India were not taken in AIR 1990 Delhi 42, Ajit Prashad Jain v. N.K. Widhani and Ors. It was held:

26. ..Section 31 Foreign Exchange Regulation Act on which reliance has been placed by the defendants only places a restriction on a foreign citizen on transfer or sale, mortgage, lease, gift, settlement or otherwise of any immovable property situate in India except with the previous general or the special permission of the Reserve Bank of India. The said provisions do not place any restriction on entering into an agreement like Ex PW 2/1. The said provisions also do not place an absolute bar to the transfer or sale of any property and as such it cannot be said that the agreement itself will become void. It is well settled that a contract for sale by itself does not create any interest in or charge on such property ( see Sction 54 of the Transfer of Property Act). Thus it cannot be held that the agreement is void on the objection raised in preliminary objection No. 4 based on Section 31 of the Foreign Exchange Regulation Act. The said provisions do not bar grant of relief of specific performance to the plaintiff and the question of permission of the Reserve Bank of India will were arise, if at all, at the stage of execution of the sale deed. Consequently, the issue No. 5A is also answered against the defendants.

27. Similar inferences were drawn by another single Judge in Mrs. Manjit Kohli v. Mrs. Sudha Ramchandran 92 (2001) DLT 629 holding that non compliance of the provisions of Foreign Exchange Regulation Act does not render agreement to sell either void or illegal and the suit for specific performance can be decreed subject to compliance and obtaining such permissions. In Dale and Carrington Invt. (P) Ltd. v. P.K. Prathapan AIR 2005 SC 1624 it was held when the statute does not provide any time limit for obtaining the permission, it can be obtained ex-post facto. It was held that subsequent developments also ought to be considered as FERA is repealed and the statue brought in force by way of replacement of FERA, i.e. the Foreign Exchange Management Act (FEMA) does not contain any such requirement.

28. The inevitable inference in the facts and circumstances is that the permission under Section 9 of Foreign Exchange Regulation Act, 1973 could also be ex post facto and not taking the permission will not make the agreement to sell, if it was executed by defendant No. 1 void and therefore, the suit will not be barred on this account.

29. The defendants have also canvassed that the suit is barred because the prior permissions under ULCR, Act, 1976 and the Income Tax Act, 1961 have not been taken. Ms. Nandini Sawhney learned Counsel for the defendants, has vehemently argued that the alleged agreement dated 1.10.1986 cannot be enforced in view of Section 269UC of the Income-tax Act and the suit is barred. According to her no transfer of any immovable property of the value exceeding Rs. 10 lakhs could be effected except after an Agreement of transfer is entered into between the transferor and the transferee in accordance with the provisions of Sub-section (2) of Section 269UC at least 4 months before the intended date of transfer. On the basis of the provisions of Income Tax Act, Ms. Sashney has argued that non- compliance of provisions of Section 269UC and Rule 48(L) makes the Agreement illegal and cannot be acted upon and therefore, the suit is barred. Section 269UC is as under:

(1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882), or in any other law for the time being in force, no transfer of any immovable property of such value exceeding five lakh rupees as may be prescribed, shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property (hereinafter referred to as the transferee) in accordance with the provisions of Sub-section (2) at least (four) months before the intended date of transfer.

(2) The agreement referred to in Sub-section (1) shall be reduced to writing in the form of a statement by each of the parties to such transfer or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties.

(3) Every statement referred to in Sub-section (2) shall,

(i) be in the prescribed form;

(ii) set forth such particulars as may be prescribed; and

(iii) be verified in the prescribed manner, and shall be furnished to the appropriate authority in such manner and within such time as may be prescribed, by each of the parties to such transaction or by any of the parties to such transaction acting on behalf of himself and on behalf of the other parties.

Sub-section (2) of Section 269UC provides that agreement referred in Sub-section (1) shall be reduced in writing in the form of statement by each of the parties to such transfer and Sub-section (3) further provides that such statement shall be in prescribed form with particulars to be verified in the prescribed manner and the statement has to be furnished to the appropriate authorities in such manner and within such time as may be deemed appropriate. Section 269UC(3) has to be in consonance with Rule 48(L) of the Income Tax Rules, 1961 which is as follows:

(1) The statement required to be furnished to the appropriate authority under Sub-section (3) of Section 269UC shall be in Form No. 37 I and shall be signed and verified in the manner indicated therein by each of the parties to the transfer referred to in Sub-section (1) of that section or by any of the parties to such transfer acting on behalf of himself and on behalf of the other parties.

(2) The statement in Form No. 37 I shall be furnished, in duplicate, to the appropriate authority'

(a) before the 30th day of October, 1987, in a case where the agreement for transfer is entered into before the coming into force of Chapter XXC in the areas comprised in the 'Bangalore Metropolitan Region', and 'Ahmedabad Urban Development Area' and the areas comprised in the city of Ahmedabad; as referred to in the notification of the Government of India in the Department of Revenue No. S.O. 835(E), dated 21.9.1987;

(b) before the expiry of 15 days from the date on which the provisions of Chapter XXC come into force in any areas, other than the areas referred to in Clause (a) where the agreement for transfer is entered into before such date; and

(c) before the expiry of 15 days from the date on which the agreement for transfer is entered into, in cases not covered by Clauses (a) and (b).

30. The Supreme Court had the occasion to deal with the contract which can be enforced and others which cannot be enforced on account of certain statutory bar in the matter of Firm of Pratapchand Nopaji v. Firm of Kotrike Venkata Setty and Sons and observed as under:

If an agreement is merely collateral to another or constitutes an aid facilitating the carrying out of the object of the other agreement which, though void, is not in itself prohibited, within the meaning of Section 23 of the Contract Act, it may be enforced as a collateral agreement. If on the other hand, it is part of a mechanism meant to defeat what the law has actually prohibited, the Courts will not countenance a claim based upon the agreement because it will be tainted with an illegality of the object sought to be achieved which is hit by Section 23 of the Contract Act. It is well established that the object of an agreement cannot be said to be forbidden or unlawful merely because the agreement results in what is known as a 'void contract'. A void agreement, when coupled with other facts, may become part of a transaction which creates legal rights, but this is not so if the object is prohibited or mala in se. Therefore, the real question before us is: Is the agreement between the parties in each case, which was to be carried out in Bombay, so connected with the execution of an object prohibited by either a law applicable in Bombay or a law more widely applicable so as to be hit by Section 23 of the Contract Act.

31. The provisions of Section 269UC and collateral provisions and rules framed there under are enacted by Parliament keeping in view the fact that properties are sold not at the market value but less than the market value thereby depriving the exchequer its share from the gains which accrued to the transferor by transfer. These and other provisions were enacted so that in cases where the appropriate authority, on data before it, derived from the statement filed by the transferor and transferee, is of the opinion that the sale is undervalued, appropriate authority could refuse to give no objection certificate to the parties and at the undervalued price the State had an option to purchase the property.

32. Whether the provisions which are enacted for the purposes of streamlining transfer of properties in relation to its market value can be interpreted to hold good for an Agreement to sell to oust the plaintiff at the threshold and on the plea that the Agreement to sell itself is void or illegal. An Agreement to sell is merely an agreement signifying the intention of the transferor to sell the property in question for a specified consideration on some specified date or on the happening of certain acts to be performed by the transferor or the transferee. By the Agreement to sell nothing is transferred or sold. What is forbidden under Section 269UC of the Income Tax Act and rules framed there under is that in absence of `No Objection Certificate (N.O.C)' from appropriate authority in relation to sale, the option is given to the Government to buy the property on the valuation recorded in the statement and imposition of penalty. No transfer can take place in the absence of non- compliance of the aforesaid provisions. This, however, does not demonstrate that the Agreement to sell will be illegal and void, as is sought to be canvassed by the learned Counsels for the defendants in this case. Even a defendant can not be allowed to wriggle out of its contractual obligations, if any, relying on such provisions.

33. In Rajesh Aggarwal v. Balbir Singh and Anr. it was held that the impact of Section 269UC and rules framed there under is not to make an agreement to sell illegal and reading these sections and rules will be a complete misreading of relevant provisions of Income Tax Act. What is forbidden under Section 269UC of the Income Tax Act and the rules framed there under is the option given to the authorities to buy the property on the valuation recorded followed by penalty in absence of `No objection Certificate' from the Income Tax Authorities. A learned single Judge in the case of S.K. Gupta v. Avtar Singh Bedi and Ors. relying on the view in , Surender Grover v. Sheela Rani; , Ajit Prasad Jain v. N.K. Widhani 54 (1994) DLT 83, Rajesh Aggarwal v. Balbir Singh had held that the statutory clearances not being obtained do not make a contract unenforceable.

34. No prior permission from the Reserve Bank of India makes the agreement barred as ex post facto permission is also contemplated. Even if the permission was required by a non resident Indian another relevant factor is that the said act has been repealed and the substituted act does not have such provision. Under Section 269UC of the Income Tax Act and the rules framed there under, the option is given to the authorities to buy the property on the valuation recorded followed by penalty in absence of `No objection Certificate' from the Income Tax Authorities and does not make the agreement void or non enforceable. Similarly lack of permission under the ULCA Act, 1967 does not make the contract void. For the foregoing reasons it cannot be held that the alleged agreement to sell between plaintiff and defendant No. 1 is void and barred under law and the suit is barred and is liable to be dismissed.

35. Therefore, the preliminary issue is decided against the defendants, holding that even if there is such an agreement to sell as contended by the plaintiff, it is not barred under the provisions of various enactments as has been canvassed by the defendants. Preliminary issue is thus decided holding that the suit is not barred.

IA No. 3245/1993

36. This is an application by the plaintiff under Order 8 Rule 10 read with Section 151 of the Code of Civil Procedure for pronouncement of judgment against defendant No. 1 on the ground that the written statement which has been filed by defendant No. 1, is signed, verified and filed by Shri V.P. Gupta, her attorney, who is not authorized by defendant No. 1 as no such power of attorney has been placed on record which would show that defendant No. 1 had appointed any person as attorney either to sign the written statement or to make an application or to engage any advocates. It was also asserted that power of attorney by defendant No. 1 in favor of the alleged attorney was not filed and even the power-of-attorney in favor of the counsel has not been filed duly signed by defendant No. 1.

37. The applicant/plaintiff contended that on 30th January, 1990, it was represented on behalf of the counsel for defendant No. 1 before the Learned Joint Registrar that the written statement could not be filed because the papers were sent through courier to London, were not been received back from defendant No. 1 meaning that the written statement was sent to London for the signatures of the defendant No. 1. It was asserted that as the written statement was not filed for some time thereafter, the plaintiff filed an application being IA No. 8296/1990 under Order 8 Rule 10 of CPC. On 10th October, 1990 it was stated that the written statement and power of attorney were filed on behalf of defendant No. 1 and 2 on 26th May, 1990 and therefore, the application was disposed of as having become infructuous .

38. According to plaintiff/applicant, his counsel inspected the Court file subsequently when it transpired that the written statement filed on behalf of defendant No. 1 is not signed and verified by her but it was signed and verified by an alleged attorney and no power of attorney was filed on record executed by defendant No. 1 authorizing any person either to file pleadings and applications or to appoint any advocate for defending the suit on her behalf.

39. Relying on Order 3 of the Code of Civil Procedure, it was contended by the plaintiff/applicant that a party can represent himself through his recognized agent and a recognized agent is only that person who holds power of attorney authorizing him to make appearance and do things on his behalf. Contending that no power of attorney has been filed authorizing the attorney on behalf of defendant No. 1 and therefore, there is no proper written statement filed by defendant No. 1 and thus judgment be pronounced against defendant No. 1 and suit be decreed against her.

40. The plaintiff/applicant relied on AIR 1959 Volume 386, Western India Theater India Ltd. V. Ishwar Bai Soma Bai Patel where Order 3 Rule 2 as amended in Bombay was interpreted.

41. The application is contested by the defendants. It was contended that the written statement on behalf of defendant No. 1 has been signed and verified and filed by Shri V.P. Gupta duly constituted attorney of the defendant No. 1 in whose favor a power of attorney dated 9th June, 1988 was executed by defendant No. 1. Copy of this power of attorney was filed on 8th October, 1990 much prior to filing of the present application dated 18th March,1993 seeking a decree against the defendant No. 1 on the ground that power of attorney by defendant No. 1 in favor of the alleged attorney was not filed and even the power-of- attorney in favor of the counsel has not been filed duly signed by defendant No. 1 on record.

42. I have heard the learned Counsels for the parties at length. From the perusal of the record it is apparent that a photocopy of power of attorney dated 9th June, 1988 in favor of Shri V.P. Gupta who has signed, verified and filed the written statement was filed on 8th October,1990. The averment, therefore, made in the application that no power of attorney was filed is incorrect. The original power of attorney was also produced at the time of admission denial of documents and was seen and has been denied by the counsel for the plaintiff on 15th March,1999 before filing of present application dated 18th March,1999. A power of attorney in favor of the counsel is also on record which also shows the incorrect averment made by the applicant/plaintiff in his application in this regard.

43. Faced with these facts, it was contended on behalf of the defendant No. 1 that the power of attorney is authorizing the attorney for the purpose of gift of the property by defendant No. 1 to the defendants No. 2 and 4 in respect of plot of land bearing No. W-73, measuring 1014 sq. yards situated in Greater Kailash II, New Delhi and it is not for the purpose of present suit for specific performance filed by the Plaintiff.

44. The power of attorney is for transfer of rights of the defendant No. 1 in favor of Shri G.S. Gupta and Shri Ravi Gupta. It authorizes the attorney to apply and submit all documents, affidavits and applications. The power of attorney also empowered attorney to submit all types of documents, applications, petitions, affidavits and to get the affidavit attested. It also authorized the attorney to apply for grant of sale, gift, permission and also authorized the attorney to appear in person before any authority in regard to her property and even authorized to further appoint any attorney on her behalf.

45. On perusal of the power of attorney and after hearing the learned Counsel for the parties, it is apparent that Shri V.P. Gupta is an attorney of defendant No. 1 in respect of her rights in the said property. This power of attorney was executed by the defendant No. 1 in 1988. Defendant No. 1 had executed a relinquishment deed and a declaration of gift prior to execution of the power of attorney and the defendant No. 1 was not aware of alleged agreement to sell propounded by the plaintiff, which is alleged to have been forged by him. The case of the defendant No. 1 is that she has not executed any agreement with plaintiff and he was only authorized to get permission, etc. from different authorities for the purpose of gifting the property to defendant Nos. 2 and 4 which power was also revoked subsequently. The allegation of the defendant No. 1 is that the agreement to sell has been forged by the plaintiff and the prima facie opinion of the Forensic Laboratory, which was obtained, is also that the agreement to sell propounded by the plaintiff does not bear the signatures of defendant No. 1. The suit on the basis of alleged agreement alleged to have been executed by defendant No. 1 was filed on 16th October, 1989 after the execution of the said power of attorney. The suit has also been filed by the plaintiff against defendant No. 2 and 4 to whom the defendant No. 1 has gifted the property.

46. On the proposition of the plaintiff that the power of attorney is for the purpose of finalizing the gift in favor of the defendant Nos. 2 and 4, this power of attorney will cloth the attorney, to contest the suit filed by the plaintiff to defeat the act of the defendant No. 1 to gift the property to said defendants on the basis of an alleged agreement to sell propounded by him. In the circumstances, it can not be inferred that the said attorney of the defendant No. 1 who has signed, verified and filed the written statement does not have authorization from the defendant No. 1 in the facts and circumstances of the case.

47. In the entirety of facts and circumstances, therefore, it cannot be said that the attorney of the defendant No. 1 Shri V.P. Gupta does not have power to defend the suit filed against her to deprive her right and exercise of her right to gift the property to the donees, defendant Nos. 2 and 4. A Fortiori it can not be inferred that the written statement has been filed on behalf of defendant No. 1 by a person who is not authorized to sign, verify and filed the same in the Court on her behalf. In any case the acts of the attorney can always be ratified by the defendant No. 1.

48. In these peculiar facts and circumstances, it will not be in the interest of justice also to hold that the attorney of the Defendant No. 1 was not authorized to file the written statement and to decree the suit against the defendant No. 1 on this ground.

49. Consequently, the application of the plaintiff is without any merit and is dismissed.

IA No. 3403/1995

50. This is an application by the plaintiff filed on 18th April,1995 under Order 6 Rule 17 read with Section 151 of Code of Civil Procedure to amend the plaint filed on 16th October, 1989 seeking a decree of specific performance of an alleged agreement to sell dated 16th September, 1986 modified/amended by a further confirmatory letter and authority letter dated 1st October, 1986 alleged to have been executed by defendant No. 1 and also confirmed expressly or impliedly by general power of attorney executed in favor of the plaintiff by defendant No. 1 and registered on 1st October, 1986 in the office of the Indian High Commissioner at London in respect of property bearing No. W-73, measuring 1014 sq. yards situated in Greater Kailash II, New Delhi and seeking directions to defendant Nos. 1 and 3 to obtain necessary permission required to be obtained from the various competent authority for the sale of the plot, if not obtained so far and after obtaining the same to execute the sale deed in respect of the said plot and to get the same registered in favor of the plaintiff on the payment of balance sale consideration of Rs. 12.5 lakhs.

51. The plaintiff/applicant contended that the written statement was filed by defendant No. 2 on 26th May, 1990 contending inter alia that relinquishment deed at serial No. 2455 was executed by defendant No. 1 in favor of defendant No. 2 on 1st October, 1986 and subsequently a gift deed was also executed in favor of defendant No. 2 and Shri Ravi Prakash Gupta. Thus a released deed dated 1st October, 1986 was executed in favor of defendant No. 2 in London and a declaration of gift was executed on 6th April, 1987 which was duly registered on 8th September, 1987 in London in favor of Defendant Nos. 2 and 4 which facts have come to his knowledge later on.

52. By the application for amendment, the plaintiff wants to amend the plaint to incorporate the plea that the relinquishment deed executed by the defendant No. 1 in favor of defendant No. 2 and the gift deed executed by defendant No. 1 in favor of defendant Nos. 2 and 4 in respect of the property in suit are not binding on the plaintiff and plaintiff is entitled for a decree of specific performance against all the defendants. The plaintiff has further sought a relief that the defendant Nos. 2 and 4 be also directed along with defendant No. 1 and 3 to join in execution and registration of the sale deed with respect to the said property in favor of the plaintiff.

53. The applicant contended that the amendment has been necessitated in view of the pleas taken by defendant Nos. 1 to 4 in their written statement regarding declaration of gift in favor of defendant Nos. 2 and 4 with respect to the property in the suit and the amendments are necessary for determination of real controversies between the parties. The plaintiff/application also relied on an application being IA No. 10801/1990 filed under Order 1 Rule 10 read with Section 151 CPC which was filed by the plaintiff and which was allowed and pursuant to which Shri Ravi Prakash Gupta, another donee, was imp leaded as defendant No. 4 in the suit. The plaintiff/ applicant contended that the cause of action against the donees of the gift made by the defendant No. 1 arose when the defendant No. 4 was imp leaded as a party to the suit.

54. The application is contested by the defendants contending that the application is an abuse of process of law and the amendment sought is not necessary for determination of real controversies between the parties. The non- applicants contended that the plaintiff has not sought cancellation of gift deed dated 6th April,1987 which was registered on 8th September,1987 though by order dated 14th May, 1996 on the application of the plaintiff to delete the issue No. 1 that the suit is barred, though the application to delete the issue was dismissed, however, an issue was framed whether any legal and valid gift deed has been executed by defendant No. 1 in favor of defendant No. 2 and 4 transferring the plot in their favor and if so whether the gift deed is binding on the plaintiff? OPD. The non-applicant/defendants contended that without seeking the cancellation of the gift deed plaintiff is not entitled for a decree of specific performance nor the defendant Nos. 2 and 4 can be directed to execute any document transferring rights in favor of plaintiff as has been prayed by the plaintiff by seeking amendment to the plaint. It was contended that though the plaintiff was aware of the gift deed executed in favor of defendant Nos. 2 and 4, as the deed of relinquishment was executed on 1st October,1986 when allegedly the agreement to sell was executed in favor of the plaintiff on the same day. In any case plaintiff had knowledge about the gift deed dated 6th April,1987 registered on 8th September,1987 on filing of written statement by defendant Nos. 1 and 2 in 1990 and yet no relief of declaration was sought by the plaintiff for considerable period and the amendments now sought seeking a declaration that defendant Nos. 2 and 4 are also liable to be directed to join other defendants to execute the documents in favor of plaintiff, has become barred by time and the plaintiff is not entitled to amend the plaint. It was contended by the counsel for defendants that the application for amendment, if allowed by this Court would result in enabling the plaintiff to seek a relief which is barred by time. It was asserted by the defendants that the transaction relating to immovable property, instrument of gift executed in favor of defendant No. 2 and 4, was effected by a registered instrument and any person acquiring such property or any part of, or share or interest in such property shall be deemed to have notice of such instruments from the date of registration. The learned Counsel for the defendants Ms. Sawhney also contended that the plaintiff has not pleaded any fraud in execution of gift deed by defendant No. 1 in favor of defendant Nos. 2 and 4 and consequently the plaintiff can not claim that the limitation will not run until plaintiff had discovered the alleged fraud of execution of gift deed of the same property for which the plaintiff is seeking specific performance. In any case the plaintiff came to know about the execution of gift deed by defendant No. 1 when the written statements were filed in 1990 and any relief of declaration on the basis of said gift deed against the defendant Nos. 2 and 4 had become barred in 1995 when the application for amendment was filed.

55. Faced with this the learned Counsel for the plaintiff contended that the cause of action is a recurring cause of action and therefore the relief sought by the plaintiff has not become barred by time. In the alternative it was contended that the cause of action has arisen after impleadment of defendant No. 4, after the application of the plaintiff under Order 1 Rule 10 was allowed.

56. I have heard in detail the learned Counsels for the parties and have perused the application and other pleadings. It is apparent that the plaintiff is not seeking cancellation of the gift deed. In case the gift deed is proved in favor of defendant Nos. 2 and 4, plaintiff may not be entitled for a specific performance of the agreement of the property which has been gifted by the defendant No. 1 by execution of an appropriate registered instrument even though the instrument may have been executed after execution of alleged agreement to sell in favor of plaintiff. The declaration of gift was executed by the defendant No. 1 pursuant to release deed executed in favor of defendant No. 2 on 1st October, 1986. Since the plaintiff is not seeking cancellation of the gift deed in favor of defendant Nos. 2 and 4 and is only seeking a declaration that defendant Nos. 2 and 4 are also liable to join the other defendants in executing the appropriate instrument in favor of plaintiff for transfer of all rights in the property in him, what is to be seen is as to when the cause of action for such a declaration has arisen in favor of plaintiff. The limitation for cancellation of an instrument will not be applicable in the present facts and circumstances as the plaintiff is not seeking cancellation of the gift deed.

57. The gift deed executed by the defendant No. 1 is a registered instrument and on its registration the plaintiff will be deemed to have knowledge of it. In any case the plaintiff got the knowledge of it in 1990 when the written statement was filed by the defendants categorically stipulating about the execution of a registered gift deed in favor of defendant Nos. 2 and 4. Consequently, the plaintiff had knowledge about the relinquishment deed and the gift deed by 1990 when the written statements were filed on behalf of the defendants.

58. The plaintiff is seeking a declaration that the released deed executed on 1st October, 1986 and gift deed executed on 6th April,1987 and registered on 8th September,1987 are not binding on him which is in the nature of a declaration and under Article 58 of the Limitation Act for seeking a declaration of such a nature, the limitation is three years from the date when the cause of action first arose. Article 58 of the Limitation Act is as under:

58. To obtain any other declaration. hree years. When the right to sue first accrues.

59. The right to obtain declaration against the defendant No. 2 and 4 accrued against the plaintiff when the registered instrument, gift deed was registered on 8th September,1987 and in any case in 1990 when the written statements were filed on behalf of the defendants and the plaintiff came to know about the said instrument in favor of defendant No. 2 and 4.

60. The plea of the plaintiff that the cause of action is recurring is fallacious. In any case the limitation for such a declaration starts from the date when the cause of action first accrued. Even if the cause of action is recurring, the limitation will start running when it first accrued and on the plea of the plaintiff that the cause of action is recurring the limitation will not be saved. The limitation will also not run from the date when the defendant No. 4 was imp leaded because the limitation started when it first accrued. The plaintiff is seeking relief not only against the defendant No. 4 but also against defendant No. 2. If the cause of action had accrued to the plaintiff either on the registration of the gift deed or on filing of the written statements by the defendants, it will not be extended or it can not be inferred that the cause of action will first arise when the defendant No. 4 was imp leaded. Consequently the relief of declaration sought by the plaintiff by filing an application for amendment seeking that the relinquishment deed executed by the defendant No. 1 in favor of defendant No. 2 and the gift deed executed by defendant No. 1 in favor of defendant No. 2 and 4 in respect of the property in suit, are not binding on the plaintiff and plaintiff is entitled for a decree of specific performance against all the defendants and a relief that the defendant Nos. 2 and 4 also be directed along with defendant No. 1 and 3 in execution and registration of the sale deed with respect to the said property, will be barred by limitation on 18th April,1005 when the application for amendment was filed by the plaintiff.

61. The Apex Court has held in various judgments that the amendment which seeks incorporation of time barred claim are to be rejected. In , Vijendra Kumar Goel v. Kusum Bhuwania, the Court had upheld the order disallowing amendment of the plaint and had laid down that under Order 6, Rule 17 of Code of Civil Procedure, an amendment cannot be allowed in a case after the claim becomes barred by limitation during the pendency of the proceedings. In this case the respondent filed a suit on 21.12.1990 based on an agreement dated 25.3.1985 for the sell of land belonging to him, seeking inter alia, a declaration that the agreement was still subsisting and the defendant was bound to execute and register the sale deed in his favor and also an injunction against the defendant from transferring the land to any other person, however, relief of specific performance was not sought. During the pendency of the suit an application was filed on 16.4.1993 seeking amendment of the plaint by seeking to add therein that 'after receiving consideration the defendant be directed to execute and register sale deed in favor of the plaintiff within a period fixed by the Court failing which the sale deed be executed and registered by the Court'. The trial could refused the amendment but High Court in the revision allowed the same. It was held that the claim of the plaintiff for the specific performance of the contract was barred by limitation in view of the provision contained in Article 54 of the Limitation Act, 1963 and the High Court was in error in allowing the amendments.

62. The plaintiff has not sought cancellation of relinquishment deed and gift deed executed in favor of defendant No. 2 and 3 by the Defendant No. 1 but the plaintiff wants to amend the plaint to seek a declaration that these deeds are not binding on the plaintiff and he is entitled for a decree of specific performance against all the defendants and seeking a relief that the defendant Nos. 2 and 4 be also directed along with defendant No. 1 and 3 for execution and registration of the sale deed with respect to the said property. In Muni Lal v. Oriental Fire and General Insurance Co. Ltd. , it was held by the Supreme Court that no courts shall make any such declaration where the plaintiff, being able to ask for other relief than a mere declaration of title, omits to do so. It was held by the Apex Court:

Section 34 of the Specific Relief Act provides that any person entitled to a legal character, or to any right as to any property may, institute a suit against any person denying or interested to deny, his title to such character or right, and the court may in its discretion make such declaration and the plaintiff need not ask for such relief. However, proviso to the said section puts the controversy beyond pale of doubt that 'no courts shall make any such declaration where the plaintiff, being able to ask for other relief than a mere declaration of title, omits to do so'. In other words, mere declaration without consequential relief does not provide the needed relief in the suit; it would be for the plaintiff to seek both the reliefs. The omission thereof mandates the court to refuse to grant the declaratory relief. In this appeal, the appellant has merely asked for a declaration that he is entitled to the payment for the loss of the truck in terms of the contract but not consequential relief of payment of the quantified amount, as rightly pointed out by the courts below. The question, therefore, is whether the amendment under Order 6, Rule 17 CPC could be ordered in this background. Section 3 of the Limitation Act speaks of bar of limitation providing that subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, after the prescribed period shall be dismissed, although limitation has not been set up as the defense. In other words, unless there is a power for the court to condone the delay, as provided under Sections 4 to 24 (inclusive), every suit instituted after the prescribed period shall be dismissed although limitation has not been set up as the defense. Order 6, Rule 17 CPC envisages amendment of the pleadings. The court may at any stage of the proceedings allow either parties to alter or amend his pleadings in such manner and on such terms as may be just and all such amendments shall be made as may be necessary for the purpose of determining the real question of controversy between the parties. Therefore, granting of amendment on such terms is also a condition for the purpose of determining the real question in controversy between the parties. The amendment to grant consequential relief sought for in this case, is as envisaged in proviso to Section 34 of the Specific Relief Act, 1963. That relief was, however, available to him, to be asked for, when the suit was filed.

6. On a consideration of this case in its proper perspective, we are of the view that granting of amendment of plaint seeking to introduce alternative relief of mandatory injunction for payment of specified amount is bad in law. The alternative relief was available to be asked for when the suit was filed but not made. He cannot be permitted to amend the plaint after the suit was barred by limitation during the pendency of the proceeding in the appellate court or the second appellate court. Considered from this perspective, we are of the opinion that the District Court and the High Court were right in refusing the prayer of amendment of the suit and the courts below had not committed any error of law warranting interference.

63. In Dilboo by LRs and Ors. v. Dhanraji and Ors. it was held by the Supreme Court that the date of registration of the documents will be the date of deemed knowledge. In L.J. Leach and Co. Ltd. And Anr. v. M/s. Jardine Skinner and Co., it was held by the Apex Court that an amendment which incorporates a claim which is barred by time on the date of the application, then it can be disallowed, however, it does not affect the power of the Court to order it, if that is required in the interests of justice. It was observed by the Court it is no doubt true that Courts would, as a rule, decline to allow amendment, if a fresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the direction as to whether amendment should be ordered, and does not affect the power of the Court to order it, if that is required in the interests of justice.

64. The general rule for allowing amendment of pleadings as approved by the Supreme Court in A.K. Gupta and Sons Ltd. v. Damodar Valley Corporation , is that a party by amendment is not allowed to setup a new case or new cause of action particularly when the suit on the new cause of action is barred by limitation.

65. Considering the pleas and contentions of the plaintiff and defendants, there cannot be any doubt that the right to sue first accrued in favor of plaintiff when the plaintiff had the deemed knowledge of the gift deed on its registration on 8th September, 1987 by defendant No. 1 in favor of defendant Nos. 2 and 4. The plaintiff cannot deny that he acquired the knowledge of the released deed and gift deed executed in favor of defendant Nos. 2 and 4 in 1990 when the written statements were filed. The relief that these relinquishment deed and gift deed are not binding on him sought by the plaintiff now by seeking amendment to plaint, is ex-facie barred by time and if that be so the plaintiff shall not be entitled for amendment of the plaint seeking the prayer that defendant Nos. 2 and 4 be directed to execute the documents in favor of plaintiff and he is not bound by the relinquishment deed and gift deed executed by the defendant No. 1 in favor of defendant Nos. 2 and 4. Considering the entirety of facts and circumstances, it will also be not in the interest of justice to allow the amendment now sought by the plaintiff.

66. For these reasons as enumerated hereinbefore, the application of the plaintiff for amendment of plaint under Order VI Rule17 of the Code of Civil Procedure can not be allowed and is dismissed.