Arun Nirula (Deceased) Through ... vs K.N. Jain & Ors.
2013 Latest Caselaw 4633 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                          Date of decision: 7th October, 2013.

+                               RFA 76/2005

       ARUN NIRULA (DECEASED) THROUGH LR'S ..... Appellant
                    Through: Mr. Sunil Mittal, Adv.

                                Versus

       K.N. JAIN & ORS.                                       .... Respondents
                      Through:            Mr. Mohit Gupta, Ms. Megha Gaur
                                          and Ms. Alka, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. The appeal impugns the order dated 14th December, 2004 of the Court

of the Additional District Judge (ADJ), Delhi of rejection of plaint in Suit

No.359/2003 filed by the appellants for specific performance of an

Agreement of Sale of immovable property and for recovery of possession

thereof and in the alternative for recovery of damages in the sum of Rs.15

lakhs jointly and severally from the four respondents/defendants, and the

consequent decree of dismissal of suit.

2. The appeal was admitted for hearing and vide ex-parte ad-interim

order dated 23rd May, 2005, the respondents restrained from creating any

third party interest in the suit property. Only the respondents No.3 & 4

namely Mr. Balbir Singh and Mr. Satvir Singh appeared in response to the

notice and the respondents No.1 & 2 namely Mr. K.N. Jain and Mr. P.K.

Padmanabhan failed to appear inspite of service by publication. Finding no

order till now of proceeding ex-parte against the respondents No.1 & 2, they

are now ordered to be proceeded against ex-parte. The respondent No.3 Mr.

Balbir Singh died on 4th February, 2012 during the pendency of the appeal

and an application for substitution of his legal heirs was filed. Vide order

dated 15th July, 2013, his legal heirs were substituted. The appellants filed

CM No.8181/2013 for deletion of the name of the appellant No.1 from the

memo of parties and the same was also allowed vide order dated 15th July,

2013 without prejudice to the contention of the counsel for the respondent

No.4 of the consequence of such deletion. The counsel for the respondent

No.4 states that though he was earlier appearing for the deceased respondent

No.3 also but the legal heirs of the deceased respondent No.3 have not

engaged him and he does not represent them.

3. None appears for the legal heirs of the respondent No.3; they are also

proceeded against ex-parte.

4. The counsel for the now sole appellant Mr. Breejesh Narula and the

counsel for the respondent No.4 have been heard.

5. The appellant filed the suit from which this appeal arises, pleading:

(i) that the respondents No.1 & 2 at different times were owners of

plot bearing Khasra No.47/9, Village Mehrauli, New Delhi;

(ii) that the respondents No.3 & 4 were property dealers of the

area;

(iii) that in April, 1992, the respondents No.3 & 4 projecting

themselves as agents of the respondent No.1 approached the appellant

and proposed a sale of the said land in Khasra No.47/9, Village

Mehrauli, New Delhi and showed the Farad of the said land in the

name of the respondent No.2 and a registered power of attorney

executed by the respondent No.2 in favour of the respondent No.1 and

represented that the respondent No.1 was thus entitled to sell the

property;

(iv) that the appellant decided to buy the part of the land

admeasuring 410 sq. yds. out of total area of about 3,400 sq. yds. and

the price after deliberations with the respondents No.1, 3 & 4 was

fixed at Rs.50,000/-

(v) that the appellant paid the entire consideration of Rs.50,000/-

and the respondent No.1 executed an Agreement to Sell, a General

Power of Attorney both dated 24th April, 1992 and some other

relevant documents in favour of the appellant;

(vi) that the appellant also paid the brokerage of the respondents

No.3 & 4;

(vii) that vacant possession of the land agreed to be sold was also

handed over to the appellant and the appellant constructed a boundary

wall and a small room thereon;

(viii) that the respondent No.3 also had a plot in the same area and in

February, 1995 requested the appellant to allow use of the room

aforesaid for keeping certain perishable items, stating that he was

constructing a house on his plot which was adjacent to the subject

plot;

(ix) that the appellant so allowed permissive use of the property to

the respondent No.3;

(x) that the appellant in September, 1998 found that the respondent

No.3 had constructed another room on the subject property and upon

the appellant objecting, also disputed the title of the appellant to the

property;

(xi) that the appellant then contacted the respondent No.4 who also

avoided the appellant;

(xii) that the appellant thereafter contacted the respondent No.1 and

requested him to execute Sale Deed but the conduct of the respondent

No.1 was evasive.

Accordingly, the suit for the reliefs aforesaid was filed on or about

26th May, 1999.

6. The respondents/defendants No.1, 3 & 4 contested the suit by filing

separate written statements and the counsels inform that the respondent

No.2 was proceeded against ex-parte in the suit.

7. On the pleadings of the parties, the learned ADJ framed a preliminary

issue, whether the suit was maintainable in the present form.

8. The learned ADJ has rejected the plaint on the ground of the claim

therein being barred by time, holding/observing/finding:

(a) the limitation for a suit for specific performance provided

under the law is of three years;

(b) the suit filed on 26th May, 1999 for specific performance of an

Agreement to Sell dated 24th April, 1992 was on the face of it time

barred; the same was the position with respect to the claim for

recovery of damages which was also based on the same agreement;

(c) the period of limitation to seek any remedy based on the

Agreement dated 24th April, 1992 ceased somewhere in April, 1995

and the suit from which this appeal arises was filed in the year 1999

and was thus hopelessly barred by time.

9. I am afraid, the learned ADJ has completely misapplied the law of

limitation applicable to such suits. Article 54 of the Schedule to the

Limitation Act, 1963 provides for a period of limitation of three years for

such a suit, commencing from the date fixed for performance or if no such

date is fixed, when the plaintiff has notice that the performance is refused.

It is thus not as if, as held by the learned ADJ, that the limitation has to be

computed from the date of the agreement. For the purpose of computing the

period of limitation of three years for filing a suit for specific performance,

the date of the agreement is irrelevant.

10. The first question which thus arises is whether the Agreement to Sell

of which specific performance was claimed and which is in writing, fixed a

date for performance, inasmuch as if the same fixes such a date, the period

of limitation would be three years from such date.

11. Both counsels agree that the relevant clause in this respect of the

Agreement to Sell, in which the respondent No.1 is described as the first

party and the appellant as the second party, is Clause 6 and which is as

under:

"6. That the first party shall apply for sale permission from the office of the lessor as well as the competent authority under provision of the Urban Land (Ceiling & Regulation) of 1976 and fulfil all the formalities for the completion of the sale deed in favour of the Second Party or his nominee(s) and shall execute a proper sale deed of the above mentioned property along with the lease hold rights of the land underneath in favour of the second party or their nominee(s) and shall get the same regd. in the office of the Sub-registrar, Delhi after getting such sale permission etc. within 90 days from the date of receipt of such permission and fulfilling all the formalities."

12. The counsel for the respondent No.4 has argued that the agreement

fixes a date for performance by fixing a time period of 90 days from the date

of receipt of permissions and fulfilling all formalities.

13. I have however enquired from him as to whether any time was fixed

for obtaining such permissions.

14. Neither is there any provision in the Agreement to Sell in this regard

nor is any answer forth coming from the counsel for the respondent No.4.

I am of the view that merely because the Agreement provides for a

time within which, after receipt of permissions, the Sale Deed will be

executed, does not make the Agreement to Sell fall in the first category

provided in Article 54 i.e. Agreements which fix a date of performance.

Once the Agreement does not fix a date for obtaining the permission, mere

fixing of time for execution of Sale Deed after the permissions are obtained

would not amount to fixing a time for completing the sale inasmuch as in

such cases there is no identifiable date by which the agreement is to be

performed. For an Agreement to Sell to fall in the first category in Article

54, either the agreement should fix a calendar date for performance or the

date fixed should be ascertainable with an event certain to happen.

However, in the subject Agreement, the commencement of the period of 90

days fixed for performance i.e. for execution of Sale Deed, was dependent

on receipt of permissions required and formalities to be completed and for

receipt/fulfilment of which, no time was fixed. Thus, merely because the

agreement fixes a period of 90 days, from receipt of permissions/completion

of formalities, for execution of Sale Deed, would not make the agreement

fall in the category where date for performance is fixed. Reliance in this

regard can be placed on Tosh Apartments Pvt. Ltd. Vs. Pradeep Kumar

Khanna 54 (1994) DLT 318. Thus, the Agreement in hand has to be held to

be falling in the second category i.e. where no date for performance is fixed

and in which case the limitation of three years commences from the date

when the plaintiff has notice that performance is refused.

15. That brings us to the plaint. According to the plaint, the appellant

first had notice that performance is refused when the respondent/defendant

No.3, after being allowed permissive use of the subject property in

possession of the appellant in part performance of the Agreement to Sell,

refuted such title of the appellant and the respondent No.1 inspite of request

of the appellant failed to complete the sale.

16. The counsel for the respondent No.4 also has not been able to point

out any paragraph of the plaint from which the appellant can be said to have

notice prior to the year 1999, that performance of the Agreement was being

refused.

17. It is a settled principle of law that for the purposes of rejection of

plaint under Order 7 Rule 11 of the Civil Procedure Code (CPC), 1908, it is

only the contents of the plaint or admitted documents which can be relied on

and not the pleas if any taken by the defendant in the written statement.

18. The counsel for the respondent No.4 has argued that the appellant,

besides the Agreement to Sell had also taken a Power of Attorney from the

respondent No.1 and under which Power of Attorney, the appellant was

vested with all the powers to deal with the said land in any manner

whatsoever including the power/authority to obtain all permissions for sale.

Attention in this regard is invited to Clause 2 of the said Power of Attorney

which empowers the appellant to sell the subject property and to obtain the

necessary permissions from the authorities for transferring the same. The

counsel has contended that the appellant thus did not need the respondent

No.1 to obtain the permissions for sale and in fact the appellant has nowhere

pleaded in the plaint that the respondent No.1 had not obtained the

permissions and it was for the appellant to obtain the permissions and have

the Sale Deed executed on the basis of the said Power of Attorney.

19. Though, undoubtedly the appellant also has admitted the execution of

the Power of Attorney in his favour but the Agreement to Sell which was

executed on the same day as the Power of Attorney, nevertheless puts the

responsibility for applying for the sale permission upon the respondent No.1

and for the Sale Deed to be executed within 90 days from the date of receipt

of such permission by the respondent No.1. Had the agreement between the

appellant and the respondent No.1 been that the appellant, on the basis of

the Power of Attorney in his favour, will obtain the permissions, the

agreement would not have provided so. It is also the position in law that

merely because the principal executes a Power of Attorney does not denude

the principal of the power/authority to do what the attorney has been

empowered to do. At least at the stage of Order 7 Rule 11 of the CPC it can

be said that because the appellant was also constituted an attorney of the

respondent No.1, the consequences of the non-obtaining of permissions and

non-execution of the Sale Deed, have to be faced by the appellant only.

20. The counsel for the respondent No.4 has raised certain other

arguments also but it is not necessary to deal therewith for the reason that

the counsel now states that the same be left open to be urged before the Trial

Court.

21. The appeal is therefore allowed and the order of rejection of the plaint

for the reason of the claim therein being barred by time is set aside.

However, it will be open to the respondent No.4 to have an issue framed on

the aspect of limitation and lead evidence thereof and take all other defences

to the suit.

22. The parties are left to bear their own costs. Decree sheet be drawn

up.

23. The file of the Trial Court received in this Court be forthwith sent

back to the District Judge (South West), Patiala House, New Delhi, within

whose jurisdiction the property is stated to fall.

24. The parties to appear before the District Judge (South West) or

Additional District Judge, Patiala House, New Delhi to whom the suit may

be marked, on 10th December, 2013.

RAJIV SAHAI ENDLAW, J.

OCTOBER 07, 2013 bs..