Delhi High Court
Rajinder Vohra vs M/S Fountain Logde Pvt Ltd & Ors on 27 September, 2016
$~06.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS (OS) 394/2015
% Judgment dated 27 th September, 2016
RAJINDER VOHRA ..... Plaintiff
Through : Mr.Akhil Mittal, Adv.
versus
M/S FOUNTAIN LOGDE PVT LTD & ORS ..... Defendants
Through : Mr.Alok K. Agarwal, Mr.Gaurav
Tomar and Ms.Isha Agarwal, Advs. for
defendants no.1 to 3 and 6 to 10.
Defendants nos. 4 and 5 are ex parte
vide order dated 30.07.2015
Mr.Rishi Manchanda and Mr.Ankur
Gosain, Advs. for defendant no.11.
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
G.S.SISTANI, J (ORAL)
I.A. 3221/2016 (under Order VII Rule 11 CPC)
1. This is an application filed by defendants no. 9 and 10 under Order VII
Rule 11 of the Code of Civil Procedure, 1908 (briefly „CPC‟) seeking
rejection of the plaint on two grounds; firstly, as being barred by the
provisions of Order XXIII Rule 1 (4) and secondly, as being barred by
limitation.
2. The plaintiff has filed the present suit for cancellation of the Sale Deed
dated 17.04.2013 and specific performance of an Agreement to Sell
dated 04.07.2008; as an alternative, the plaintiff has prayed for
damages of rupees two crore.
3. As per the plaint, the plaintiff with a view to invest money in a property
at Pahar Ganj, Delhi, the plaintiff came in contact with defendants no. 2
CS (OS) 394/2015 Page 1 of 21
and 3, who were the directors of defendant no. 1 company. The
defendant no. 1 company was the owner of a semi built-up property
bearing Plot No. 55, Basti Arakashan Scheme, bearing Municipal
no.XV/8651/1, situated at Arakshan Road, Paharganj, New Delhi, ad
measuring about 233.24 sq. yards (hereinafter referred to as the „suit
property‟).
4. The plaintiff and defendant no. 11 had agreed to purchase the suit
property from the defendant no. 1 for a total sale consideration of Rs.
3.45 crores. Accordingly, the plaintiff and defendant no. 11, being the
buyers and the defendants no. 1/ seller entered into an Agreement to
Sell dated 04.07.2008. Out of the total sale consideration, the plaintiff
and defendant no.11 equally paid Rs. 35.00 lakhs as an advance part-
payment to defendant no. 1. As per Clause 4 of the said Agreement,
the transaction, including the payment of balance amount and
registration, was to be completed within six months from the execution
of the agreement. This period could have been extended only upon the
mutual understanding of both the parties. It was also agreed that
defendants no. 2 and 3 will execute the Sale Deed in favour of the
plaintiff and defendant no. 11 or their nominees, representative, etc. As
per Clause 8 of the Agreement to Sell dated 04.07.2008, it was agreed
that in case the suit property is re-sold to a third party then any sale
consideration over Rs. 3.45 crores shall be shared equally between the
plaintiff, defendant no.11 and defendants no.2 and 3 in the profit
sharing ratio of 40:60, i.e. 40% of the additional amount would fall to
the share of defendants no. 2 and 3 and 60% of the additional amount
would fall to the share of plaintiff and defendant no.11. Defendants no.
2 and 3 also agreed to hand over original title deeds of the suit property
to the plaintiff and defendant no.11 at the time of registration of the
CS (OS) 394/2015 Page 2 of 21
Sale deed. It is also claimed that besides Rs. 35.00 lakhs paid as
earnest money, another sum of Rs. 20.00 lakhs was incurred by the
plaintiff and defendant no.11 towards removal of malba from the
property, repairs, fixing of iron grills and other expenditure at the suit
property. Thus, it is claimed by the plaintiff and defendant no.11 that
Rs.55.00 lakhs were paid by them to defendants no.1 to 3.
5. The plaintiff claims that, during the pendency of the Agreement to Sell,
the defendants nos. 2 and 3 approached the plaintiff and informed that
they had a prospective buyer of the suit property offering a
consideration of Rs. 6 crores. In view of Clause 8 of the Agreement to
Sell dated 04.07.2008, the plaintiff agreed to the said sale. Thereafter,
an Agreement to Sell and Purchase dated 23.06.2011 was executed
between the defendant no. 1 company and the defendant no. 4 and 5 for
the sale of the suit property for a total consideration of Rs. 6 crores. It
is pertinent that both the plaintiff and the defendant no. 11 were
parties/collaborators to the said agreement. At the time of execution of
the Agreement, an amount of Rs. 50 lakhs was paid to the defendant
no. 1. The plaintiff claims that no part of the said 50 lakhs received
was given to the plaintiff in violation of Clause 8 of the Agreement to
Sell dated 04.07.2008. Accordingly, suspecting a mala fide intention
on the part of the defendant nos. 1 to 3, a notice dated 21.10.2011 was
served upon them. On 10.11.2011, the defendants no. 1 to 3 replied to
the notice alleging that the Agreement to Sell dated 04.07.2008 had
expired as the same was not extended beyond the initial period of 6
months, i.e. after 03.01.2009. In the said reply, the defendants no. 1 to
3 had alleged that the agreement dated 04.07.2008 had ceased to have
any legal effect.
6. The defendants no. 4 and 5 (purchasers in the Agreement dated
CS (OS) 394/2015 Page 3 of 21
23.06.2011) had filed a suit, being CS (OS) 1770/2012, before this
Court inter alia seeking specific performance of the Agreement dated
23.06.2011. The plaintiff as well as the defendant no. 11 were parties
to the said suit. When the plaintiff received summons in the said suit, it
claims to have learnt of a Memorandum of Understanding („MOU‟)
also dated 23.06.2011 executed surreptitiously between the defendants
no. 1 to 5, wherein an additional amount of Rs. 1.30 crores was agreed
to be paid to the defendant no. 1 as agreed conversion charges and
other miscellaneous expenses. The plaintiff has further alleged that the
defendant nos. 1 to 5 and 11 herein, being the other parties in CS (OS)
1770/2012, had settled the matter without considering the right of the
plaintiff herein and accordingly an application (IA 2262/2013) was
filed for withdrawal of the suit. The suit was dismissed as withdrawn
on 11.02.2013, without the notice of the plaintiff herein.
7. As per the plaint, the plaintiff filed a suit in the court of Senior Civil
Judge, Tis Hazari Courts (being CS 62/2013) for permanent and
mandatory injunction against the defendants no. 1 to 3 and 11 herein.
During the pendency of the said suit, the plaintiff claims to have learnt
that the suit property was already sold by a Sale Deed dated 17.04.2013
by the defendant no. 1 in favour of the defendants no. 6 to 10 for a
lower price of Rs. 1,90,50,000/-. The plaintiff claims that the same was
to play a fraud upon the plaintiff herein and deprive him of his right
under Clause 8 of the Agreement dated 04.07.2008. Accordingly on
08.07.2013, the plaintiff withdrew the suit CS 62/2013 with liberty to
file a fresh suit before the appropriate court.
8. An application (IA 16458/2013) was filed by the defendant no. 5
herein/ plaintiff no. 2 therein for restoration of CS (OS) 1770/2012
alleging fraud have been played upon it. On 15.09.2014, this
CS (OS) 394/2015 Page 4 of 21
application was also withdrawn by the defendant no. 5 herein as the
matter was settled. In the meanwhile, the plaintiff had filed another
suit, being CS (OS) 101/2014, inter alia seeking specific performance
of the Agreement to Sell dated 04.07.2008. The said suit was
withdrawn on 21.01.2014.
9. The plaintiff has prayed for the following reliefs:
"a) Pass a decree of declaration in favour of the Plaintiff and
against the defendant no.1 to 3 and defendant no.6 to 10
thereby declaring the registered sale deed dated
17.04.2013 in respect of the suit property No. 55, Basti
Arakshan Scheme, bearing Municipal No. XV/8651/1
situated at Arakshan Road, Paharganj, New Delhi,
measuring 233.24 sq. yds. as registered document no.
2853 in Addl. Book No. I, Volume No. 15106 at pages 88
to 104 on 18.04.2013, as void document and same ordered
to be cancel [sic: cancelled].
b) Pass a decree of specific performance of Agreement to Sell
& Purchase dated 04.07.2008 in favour of the plaintiff and
against the defendants No.1 to 3, directing the defendant
no.1 to 3 to execute the registered sale deed in respect of
suit property bearing No. 55, Basti Arakshan Scheme,
bearing Municipal No. XV/8651/1 situated at Arakshan
Road, Paharganj, New Delhi, measuring 233.24 sq. yards
on receipt of the balance sale consideration price;
c) Pass a decree of permanent & mandatory injunction
thereby restraining the defendants no.6 to 10 their agents,
servants, assigns, administrators, successors & alienates
etc. not to raise construction, additional structure
changes, alienate, gift, mortgage, transfer, or from
creating any third party interest in any manner
whatsoever in respect of the suit property No. 55, Basti
Arakshan Scheme, bearing Municipal No. XV/8651/1
situated at Arakshan Road, Paharganj, New Delhi,
measuring 233.24 sq. yds. till final disposal of the suit;
d) Or in Alternate, a money decree of Rs.2,00,00,000/- may
be passed in favour of the plaintiff and against the
CS (OS) 394/2015 Page 5 of 21
defendant no.1 to 10 on account of damages and losses
suffered by the plaintiff;
e) Pass the order of costs in favour of the Plaintiff and
against the defendants throughout in the present suit;"
(Emphasis Supplied)
10. Summons in the suit and notice in the application were issued on
12.02.2015. The defendants, except defendants no. 4 and 5, entered
appearance and have also filed their respective written statements.
Defendants no. 4 and 5 have chosen not to appear and have been
proceeded ex parte on 30.07.2015.
11. Mr. Agarwal, learned counsel appearing on behalf of the applicants,
submits that the applicants herein primarily seek rejection of the plaint
on two grounds. The first ground for rejection of the plaint is that the
plaintiff had filed an earlier suit, being CS(OS) 101/2014, which was
dismissed as withdrawn, however, no liberty was sought by the plaintiff
to file another suit on the same cause of action. Counsel further submits
that the second ground is that the first Agreement to Sell pertains to the
year 2008 and as per Artic le 54 of the Limitation Act, the present suit
would be barred by limitation. In support of the said grounds, learned
counsel contends that after the Agreement to Sell dated 04.07.2008 was
executed, the seller entered into a fresh Agreement to Sell dated
23.06.2011, which was in the knowledge of the present plaintiff and
wherein the plaintiff was a conforming party, and on the basis of the
said Agreement to Sell, the suit property was agreed to be sold by
defendants no.1 to 3 to defendants no. 4 and 5. It is further contended
by Mr. Agarwal, counsel for the applicant, that since the transaction
arising out of the second Agreement to Sell was not being completed,
defendants no. 4 and 5 had filed CS (OS) 1770/2012 in which the
CS (OS) 394/2015 Page 6 of 21
plaintiff and defendant no.11 were also impleaded as parties.
Thereafter, the matter was compromised and a Sale Deed dated
17.04.2013 was executed by the defendant no. 1 in favour of
defendants no. 6 to 10. Thus, it is contended by the learned counsel for
the applicants that the entire proceedings arising out of the second
Agreement to Sell were in the knowledge of the plaintiff and a second
suit based on the same cause of action would not lie and even otherwise
the present suit is patently barred by limitation. In order to fortify his
submissions, learned counsel has relied upon the decisions of the
Supreme Court in K.S. Bhoopathy & Ors. v. Kokila & Ors., (2000) 5
SCC 458 and Sarguja Transport Service v. State Transport Appellate
Tribunal, M.P., Gwalior, and Ors., (1987) 1 SCC 5.
12. Mr. Agarwal, counsel for the applicants, further submits that after CS
(OS) 101/2014 was dismissed as withdrawn by the plaintiff herein,
plaintiff had filed an application, being I.A. 20828/2014 in CS (OS)
1770/2014 seeking review. This review application was dismissed as
withdrawn on 28.10.2014, however, the plaintiff did not take recourse
to any remedy thereafter and in effect he accepted the order, which was
passed in the application.
13. Per contra, Mr.Mittal, learned counsel for the plaintiff/non-applicant,
submits that the present application under Order VII Rule 11 CPC is
not maintainable. It is further contended that the applicants/defendants
no. 9 and 10 are not bona fide purchasers of the suit property. Counsel
contends that the subsequent Sale Deed has been executed fraudulently
for Rs.1,90,50,000/-, much below the market price, and in violation of
the Agreement to Sell and Purchase dated 04.07.2008. It is also
contended that the present application under Order VII Rule 11 CPC is
not maintainable and is liable to be dismissed as the plaintiff had
CS (OS) 394/2015 Page 7 of 21
withdrawn the earlier suit, being CS (OS) No.101/2014, with liberty to
take recourse to appropriate remedies in accordance with law.
14. Counsel for the plaintiff/non-applicant clarifies that no doubt the
plaintiff was impleaded as a party in CS(OS) 1770/2012 but the seller/
defendant no. 1 and the buyer/ defendants no. 4 and 5 came to an
amicable settlement and in the absence of the present plaintiff and
defendant no.11, application under Order XXIII Rule 3 CPC was filed
wherein no notice was issued to the present plaintiff and in the absence
of the plaintiff, the suit was withdrawn.
15. Counsel further submits that as per Clause 8 of the first Agreement to
Sell dated 04.07.2008, the plaintiff was entitled to receive his share in
profit in case the suit property was re-sold. It is also contended that
the sellers entered into a subsequent Agreement to Sell in the year 2011
and the sellers sold the property, but they did not hand over the share
which was to be received by the plaintiff and defendant no. 11. In view
thereof, counsel contends that the plaintiff and defendant no.11 are
entitled to specific performance of the Agreement to Sell dated
04.07.2008. Counsel further submits that the cause of action for
recovery of this amount arose only in the year 2014 when the seller/
defendant no.1 executed a Sale Deed in favour of defendants no. 6 to
10. Counsel for the non-applicant also submits that the present suit is
barred by limitation as the cause of action arose only in the year 2014.
16. I have heard learned counsel for the parties and considered their rival
submissions. I deem it appropriate to reproduce Order VII Rule 11
CPC; which reads as under:
"11. Rejection of plaint.- The plaint shall be rejected in the
following cases:--
...
(d) where the suit appears from the statement in the plaint to be
barred by any law;
..."
(Emphasis Supplied)
17. Before the rival submissions of the counsel for the parties can be
considered, a few undisputed facts may be noticed. It is not in dispute
that the plaintiff had entered into an Agreement to Sell with defendant
no. 1 company, represented by defendants no. 2 and 3 on 4.7.2008 with
respect to the suit property.
18. It is also not in dispute that in the year 2011 another Agreement to Sell
dated 23.06.2011 was entered into between defendant no. 1 (seller) and
defendants no. 4 and 5 (buyers) in the present suit, with respect to the
same suit property. It is also not in dispute that in the second
Agreement to Sell, the present plaintiff and defendant no.11 were
parties referred to as „Collaborators‟ and have executed/signed the
second Agreement to Sell. It is also not in dispute that as disputes and
differences had arisen between the parties to the second Agreement to
Sell dated 23.06.2011, CS (OS) 1770/2012 was filed by the defendants
no. 4 and 5, wherein the plaintiff and defendant no. 11 were also made
parties. It is also not in dispute that the said suit was compromised and
dismissed as withdrawn. As per the compromise, the property was sold
by defendant no. 1 to defendants no. 6 to 10.
19. The pleadings, however, show that based on the settlement, the suit
property stands sold to defendants no. 6 to 10 and a sale deed has been
executed by defendants no.1 to 3 in favour of defendants no.6 to 10. It
is also not in dispute that aggrieved by the fact that the plaintiff and
defendant no.11 were not given any benefit which understanding is
being claimed between the sellers, plaintiff and defendant no.11, the
plaintiff filed CS(OS) 101/2014, a copy of which has been placed on
record. The relief claimed in the said suit is extracted hereinbelow:
"a) pass a decree of specific performance of
Contract/Agreement to Sell & Purchase dated 04.07.2008
in favour of the plaintiff and against the defendants No. 1
to 3, directing them to execute, transfer and register
transfer documents in respect of property No.55, Basti
Arakshan Scheme, bearing Municipal No.XV/8651/1
situated at Arakshan Road, Paharganj, New Delhi,
measuring 233.24 sqr. yards on receipt of the balance sale
consideration price;
b) pass a decree of declaration that the Sale deed dated
17.04.2013 in respect of the property being property
bearing No.55, Basti Arakshan Scheme, bearing
Municipal No.XV/8651/1 situated at Arakshan Road,
Paharganj, New Delhi, measuring 233.24 sqr. yds. Which
was executed by the defendants no.1 to 3 in favour of
defendants no.6 to 10 and was registered with the Sub-
Registrar, Asaf Ali Road, New Delhi as document
No.2853, Addl. Book No.1, Volume No.15106 at page 88
to 104 on 18.04.2013, is a void document and is not
binding on the plaintiff;
c) pass a decree of cancellation cancelling the Sale Deed
dated 17.04.2013 in respect of the property being property
No.55, Basti Arakshan Scheme, bearing Municipal
No.XV/8651/1 situated at Arakshan Road, Paharganj, New
Delhi, measuring 233.24 sqr. yds. which was executed by
defendants No.1 to 3 in favour of defendants No.6 to 10
and was registered with the Sub-Registrar, Asaf Ali Road,
New Delhi as document No.2853, Addl. Book No.1,
Volume No.15106 at page 88 to 104 on 18.04.2013, is
cancelled and is not binding on the plaintiff;
d) pass a decree directing the defendant No.12, DDA to
restore the leasehold of the property being property
No.55, Basti Arakshan Scheme, bearing Municipal
No.XV/8651/1 situated at Arakshan Road, Paharganj, New
Delhi, measuring 233.24 sqr. yds. and to grant permission
to transfer the said leasehold rights in favour of the
plaintiff by the defendants lessee i.e. defendants No.1 to 3,
after restoring the same;
e) pass a decree of permanent & mandatory injunction
thereby restraining the defendants, their agents, servants,
assigns, administrators, successors & alienates etc. not to
alienate, gift, mortgage, transfer, or from creating any
third party interest in any manner whatsoever in respect of
the property being property No.55, Basti Arakshan
Scheme, bearing Municipal No.XV/8651/1 situated at
Arakshan Road, Paharganj, New Delhi, measuring 233.24
sqr. yds. or in favour of any other person except to the
plaintiff;
f) allow costs of the plaintiff to him against the defendants
throughout;"
(Emphasis Supplied)
20. In this backdrop, the counsel for the applicant has pleaded rejection of
the plaint on two grounds; first, as being barred by limitation and
second, as being barred under Order XXIII Rule 1 (4).
BAR TO SUBSEQUENT SUIT [Order XXIII Rule 1(4)]
21. The first question, which arises for consideration is whether the suit,
which is identical in nature seeking identical relief to a previous suit,
can be entertained or not.
22. Prior to dealing with the rival contentions of the parties, I deem it
appropriate to reproduce Sub-rules (3) and (4) of Rule 1 Order XXIII of
the Code of Civil Procedure, which read as under:
"1. Withdrawal of suit or abandonment of part of claim.
...
(3) Where the Court is satisfied,--
(a) that a suit must fail by reason of some formal defect, or
(b) that 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.
(4) Where the plaintiff--
(a) abandons any suit or part of claim under sub-rule (1),
or
(b) withdraws from a suit or part of a claim without the
permission referred to in sub-rule (3),
he shall be liable for such costs as the Court may award and
shall be precluded from instituting any fresh suit in respect of
such subject-matter or such part of the claim."
(Emphasis Supplied)
23. The argument of learned counsel for the applicant is that the second
suit is not maintainable as identical prayers were made in CS (OS)
101/2014. On the contrary, submission of counsel for the non-
applicant is that CS (OS) 101/2014 was, infact, dismissed as
withdrawn, but leave was granted to the plaintiff to take recourse to
such remedies, which would be available to him in accordance with
law.
24. The law in respect of Order XXIII Rule 1 is well settled, when any
person withdraws from a suit without seeking permission under Rule 1
(3), then he is precluded from instituting any fresh suit in respect of the
same action. This is as when a person exhausts his remedy by
instituting a suit and later withdraws the same, it is presumed that he
has abandoned his claim. This ofcourse is subject to leave being taken
from the court to institute a fresh suit. The scope of the Rule was
considered by the Supreme Court in Sarguja Transport Service
(Supra), the relevant paragraph of which reads as under:
"7. The Code as it now stands thus makes a distinction between
"abandonment" of a suit and "withdrawal" from a suit with
permission to file a fresh suit. It provides that where the plaintiff
abandons a suit or withdraws from a suit without the permission,
referred to in sub-rule (3) of Rule 1 of Order XXIII of the Code,
he shall be precluded from instituting any fresh suit in respect of
such subject-matter or such part of the claim. The principle
underlying Rule 1 of Order XXIII of the Code is that when a
plaintiff once institutes a suit in a court and thereby avails of a
remedy given to him under law, he cannot be permitted to
institute a fresh suit in respect of the same subject-matter again
after abandoning the earlier suit or by withdrawing it without the
permission of the court to file fresh suit. Invito beneficium non
datur -- the law confers upon a man no rights or benefits which
he does not desire. Whoever waives, abandons or disclaims a
right will loose it. In order to prevent a litigant from abusing the
process of the court by instituting suits again and again on the
same cause of action without any good reason the Code insists
that he should obtain the permission of the court to file a fresh
suit after establishing either of the two grounds mentioned in
sub-rule (3) of Rule 1 of Order XXIII. The principle underlying
the above rule is founded on public policy, but it is not the same
as the rule of res judicata contained in Section 11 of the Code
which provides that no court shall try any suit or issue in which
the matter directly or substantially in issue has been directly or
substantially in issue in a former suit between the same parties,
or between parties under whom they or any of them claim,
litigating under the same title, in a court competent to try such
subsequent suit or the suit in which such issue has been
subsequently raised, and has been heard and finally decided by
such court. The rule of res judicata applies to a case where the
suit or an issue has already been heard and finally decided by a
court. In the case of abandonment or withdrawal of a suit
without the permission of the court to file a fresh suit, there is no
prior adjudication of a suit or an issue is involved, yet the Code
provides, as stated earlier, that a second suit will not lie in sub-
rule (4) of Rule 1 of Order XXIII of the Code when the first suit
is withdrawn without the permission referred to in sub-rule (3) in
order to prevent the abuse of the process of the court."
(Emphasis Supplied)
25. In K.S. Bhoopathy (Supra), the Supreme Court observed as under:
"13. The provision in Order XXIII Rule 1 CPC is an exception to
the common law principle of non-suit. Therefore on principle an
application by a plaintiff under sub-rule (3) cannot be treated on
a par with an application by him in exercise of the absolute
liberty given to him under sub-rule (1). In the former it is
actually a prayer for concession from the court after satisfying
the court regarding existence of the circumstances justifying the
grant of such concession. No doubt, the grant of leave envisaged
in sub-rule (3) of Rule 1 is at the discretion of the court but such
discretion is to be exercised by the court with caution and
circumspection. The legislative policy in the matter of exercise of
discretion is clear from the provisions of sub-rule (3) in which
two alternatives are provided; first where the court is satisfied
that a suit must fail by reason of some formal defect, and the
other where the court is satisfied that 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. Clause (b) of sub-rule
(3) contains the mandate to the court that it must be satisfied
about the sufficiency of the grounds for allowing the plaintiff to
institute a fresh suit for the same claim or part of the claim on
the same cause of action. The court is to discharge the duty
mandated under the provision of the Code on taking into
consideration all relevant aspects of the matter including the
desirability of permitting the party to start a fresh round of
litigation on the same cause of action. This becomes all the more
important in a case where the application under Order XXIII
Rule 1 is filed by the plaintiff at the stage of appeal. Grant of
leave in such a case would result in the unsuccessful plaintiff to
avoid the decree or decrees against him and seek a fresh
adjudication of the controversy on a clean slate. It may also
result in the contesting defendant losing the advantage of
adjudication of the dispute by the court or courts below. Grant of
permission for withdrawal of a suit with leave to file a fresh suit
may also result in annulment of a right vested in the defendant or
even a third party. The appellate/second appellate court should
apply its mind to the case with a view to ensure strict compliance
with the conditions prescribed in Order XXIII Rule 1(3) CPC for
exercise of the discretionary power in permitting the withdrawal
of the suit with leave to file a fresh suit on the same cause of
action. Yet another reason in support of this view is that
withdrawal of a suit at the appellate/second appellate stage
results in wastage of public time of courts which is of
considerable importance in the present time in view of large
accumulation of cases in lower courts and inordinate delay in
disposal of the cases."
(Emphasis Supplied)
26. In the present suit, admittedly an identical suit was filed, being CS (OS)
101/2014, and the same was dismissed as withdrawn and by
coincidence by the same Court, which is hearing the application for
rejection of plaint today. The order dated 21.01.2014 in CS (OS)
101/2014 reads as under:
"Counsel for the plaintiff on instructions wishes to withdraw the
present suit and the applications, to enable him to take recourse
to such remedies which are available to him in accordance with
law. As the suit is withdrawn at the initial stage, plaintiff is
entitled to refund of the Court Fee."
(Emphasis Supplied)
27. To say that leave was granted by the Court to seek such remedy as
available in accordance with law would mean that leave was granted to
file a fresh identical plaint again is unacceptable for the reason that if
the intent was to file a fresh suit, there was no reason for withdrawing
the first suit especially keeping in view that both the plaints are almost
identical in nature. It is also not in dispute that after the plaintiff
withdrew CS (OS) 101/2014, he filed an application for review in CS
(OS) 1770/2012, being IA 20829/2014, wherein the following order
was passed on 28.10.2014:
"IA No.20828/2014 (u/s 152 r.w. 151 CPC)
Learned counsel for the defendant No.5/ applicant seeks
permission to withdraw the I.A.
The I.A. dismissed as withdrawn."
28. The aforesaid order of dismissal of the review application has attained
finality. In my view, when the first suit was withdrawn, the remedy
which the plaintiff had in mind was to file a review in CS (OS) No.
1770/2012. It is not understandable that why the review application
was withdrawn and the review petitioner allowed the order to attain
finality.
29. Accordingly, in my view the present suit is barred under Order XXIII
Rule 1(4) of the Code of Civil Procedure.
LIMITATION
30. The other ground to be considered is as to whether the present suit is
barred by limitation?
31. Counsel for the applicant further submits that as far as the plea of
limitation is concerned, the second/present suit is patently barred by
limitation. Once the second agreement was entered into, it was tacit
that the sellers were not interested to sell the suit property to the
plaintiff. In fact the plaintiff was aware that the property was being
sold and, as provided under Article 54 of the Limitation Act, period of
three years would commence from the said date.
32. It is settled law that the plaint may be rejected as being barred by
limitation if a holistic reading of the plaint and documents show that it
is barred by limitation. All the averments in the plaint must be taken to
be true at the time of considering such an application and at the same
time, it must be ensured that it is not a case of astute drafting in order to
avoid the consequence of Order VII Rule 11. Though there are
numerous judicial pronouncements upon the subject, I deem it
appropriate to notice Arjan Singh v. Union of India, AIR 1987 Del
165; N.V. Srinivasa Murthy v. Mariyamma, (2005) 5 SCC 548; and
Popat and Kotecha Property v. State Bank of India Staff Assn.,
(2005) 7 SCC 510 to avoid prolixity.
33. Article 54 of the Schedule to the Limitation Act reads as under:
"54. For specific Three years The date of fixed for
performance the performance, or,
of a contract. if no such date is
fixed, when the
plaintiff has notice
that performance is
refused."
(Emphasis Supplied)
34. The limitation fixed in a suit for specific performance is three years,
when a date is fixed for the performance and in case no date is so fixed
then the date when the plaintiff has noticed that the performance has
been refused.
35. In my view, when the second Agreement to Sell was entered into and
which fact was within the knowledge of the plaintiff, the defendants
had refused performance as the property was being sold to another
person, the period of limitation would commence from the date the
second Agreement to Sell was signed, i.e. from 23.06.2011.
36. To say that the period of limitation would begin from the date when
defendants no. 1 to 3 had refused to perform their part of the
Agreement in the year 2014 cannot be accepted more so when such an
averment has not been made in the plaint. Further, the plaintiff himself
allowed the seller/defendant no. 1 to sell the suit property to a third
person. The plaintiff admittedly is a conforming party to the second
Agreement to Sell dated 23.06.2011 and, thus, he accepted the sale of
the suit property to a third party and at a subsequent stage he cannot be
permitted to complain. Having given his tacit consent to the
subsequent Agreement to Sell dated 23.06.2011, the first Agreement to
Sell dated 04.07.2008 became dead and the plaintiff readily abandoned
his right in the said Agreement.
37. The plaintiff has also placed on record, a copy of the legal notice dated
21.10.2011 which was addressed by the plaintiff to the defendants
herein. In the concluding part of this notice, it has been stated that in
case of non-compliance, the plaintiff would take recourse to such
remedies as available in accordance with law. A reply to this notice
was issued on 10.11.2011 refuting the claims of the plaintiff. In the
reply, the defendants no. 1 to 3 had specifically stated that the
Agreement dated 04.07.2008 was not extended after the initial period
of six months and had expired. Though the reply dated 10.11.2011 is
replete with such averments, I deem it to reproduce only one paragraph
to avoid prolixity. Paragraph 1 of the parawise reply reads as under:
"1. That para No. 1 of your notice is not denied to the extant
that earlier an Agreement to Sell & Purchase dated 4 th July,
2008 between my clients as party No.1 and Shri Rajan Narula
and your client Rajinder Vohra as party No.2, was executed. The
terms and conditions of the said agreement are a matter of
record. It is however submitted that time was the essence of the
said contract and due to non-fulfillment of the obligations on the
part of party No.2, the agreement had elapsed. It was later on
duly acknowledge [sic: acknowledged] by both the parties
concerned that the agreement having elapsed, ceased to have
any legal effect. Subsequently, a fresh deal was entered into vide
an Agreement to Sell & Purchase dated 23rd June, 2011 between
my clients as party No.1 and Shri Rajan Narula and Rajinder
Vohra as party No.2, and Shri Dharam Pal Vij and Chandeep
Sahni as party No.3. The very fact that this agreement dated 23 rd
June, 2011 was executed was confirmation of the fact that the
agreement dated 4 th July, 2008 ceased to survive. As a matter of
fact, it was duly informed to your client vide reply dated
11.1.2010 by my client that the said agreement dated 4 th July,
2008 was valid only for a period of 6 months w.e.f. the said date,
and could not be enforced thereafter and that it was never
extended after expiry w.e.f. 3 rd January, 2009."
(Emphasis Supplied)
38. Thus, the period of limitation would positively begin from 10.11.2011,
while the present suit has been filed on 02.02.2015, which would make
the present suit barred by limitation.
ADDITIONAL PLEA
39. As far as the plea with regard to Clause 8 of the Agreement to Sell
dated 04.07.2008 is concerned, learned counsel for the plaintiff/non-
applicant has submitted that the prayer made in the second suit is based
on specific performance of Clause 8 of the first Agreement to Sell
dated 04.07.2008.
40. The argument of learned counsel for the non-applicant is to be tested on
the basis of Clause 8 of the Agreement to Sell dated 04.07.2008, which
reads as under:
"8. That, since the aforesaid property is a semi built-up
property, the First Party has hereby Authorized the Second Party
to furnish the building, to repair/ to remove the malba as per the
norms of MCD / DDA or any local authority. The construction
cost and other cost and other expenses for the aforesaid purpose
shall be paid and borne by Second Party. That it is mutually
agreed between the parties that at the time of resale of the
aforesaid property to any other party, then profit sharing ration
will be @ 40% (Forty Percent) share of the first party and 60%
(Sixty Percent) share of the Second Party after deducting the
settled price of Rs.345,00,000/- (Rupees three crores forty five
lacs) of the First Party and also deducting the cost of
construction and other expenses spent/invested by the Second
Party on the above said property "
41. The sum and substance of the arguments of the learned counsel for the
plaintiff is that as per Clause 8 of the First Agreement to Sell dated
04.07.2008, the plaintiff was entitled to receive money in case the
property was re-sold. It is also contended that the defendant no. 1
company/seller entered into a subsequent Agreement to Sell dated
23.06.2011 and the seller sold the property but they did not hand over
the share which was to be received by the plaintiff and defendant no.11.
In view thereof, counsel contends that the plaintiff and defendant no.11
are entitled to specific performance of the Agreement to Sell dated
04.07.2008. Counsel further submits that the casue of action for
recovery of this amount arose only in the year 2014 when the defendant
no. 1 company/seller executed a Sale Deed in favour of defendants no.
6 to 10.
42. In my view, this argument is without any force, firstly, for the reason
that there is no such prayer made in the present suit relating to Clause 8
of the first Agreement to Sell. The prayer clause, which has been
extracted in para 9 aforegoing would show that the plaintiff is seeking
specific performance of Agreement to Sell dated 04.07.2008 and the
specific performance is not with respect to Clause 8, but it is for
execution of a Sale Deed in his favour. In my view, this submission of
learned counsel for the plaintiff is an afterthought and is not borne out
from the pleadings.
43. It is also not in dispute that barring the formal paragraphs wherein the
plaintiff has brought to the notice of the Court that an earlier suit was
filed, which was dismissed as withdrawn, and leave granted to seek
such remedies, which may be available has led to filing of the second
suit, no new facts are stated in the plaint. The plaintiff has not sought
any relief qua Clause 8 of the first Agreement to Sell either in the first
suit or in the second suit as the prayer in both the suits is for specific
performance with respect to the sale of the suit property, as it is clearly
borne out from the prayer clauses, which have been extracted
hereinabove.
44. Accordingly, the present application is allowed primarily for two
reasons i.e. (i) the present suit is barred by limitation; and (ii) the
present suit is barred under Order XXIII Rule 1(4) Code of Civil
Procedure as an earlier suit filed by the plaintiff was dismissed as
withdrawn and the subsequent suit filed was an identical suit with the
same cause of action, which was also dismissed as withdrawn.
45. In view of above, the present plaint and application for interim stay
(I.A.3068/2015) stand rejected.
46. I.A. 3221/2016 stands disposed of.
G.S.SISTANI, J
SEPTEMBER 27, 2016
//msr
