Sh. H.C. Sachdeva & Ors. vs Shri Ved Prakash
2018 Latest Caselaw 660 Del

$~OS-1
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                             Date of decision: 30.01.2018
+      CS(OS) 1096/2008
       SH. H.C. SACHDEVA & ORS.                  ..... Plaintiffs
                      Through   Mr.Sudeep Singh, Adv.

                           Versus

       SHRI VED PRAKASH                                    ..... Defendant
                    Through            Mr.Rajeshwar K.Gupta, Adv. for D-2
                                       to 7, 9 to 14 and 16-17
                                       Mr.Arun Nischal, Adv. for D-8A to
                                       8D
                                       Ms.Meenakshi, Adv. for D-15
       CORAM:
       HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J.(ORAL)

IA No.11880/17 (u/O 7 R 11 CPC filed by D-15) and IA No.11879/17
(u/O 7 R 11 filed by D-2 to 7, 9 to 14 and 16 and 17)

1.     IA No.11880/2017 is filed on behalf of defendant No.15 under Order
7 Rule 11 CPC for rejection of the plaint in view of the fact that it is barred
by limitation under Article 58 of the Schedule to the Limitation Act, 1963.
IA No.11879/2017 is filed by defendants No.2 to 7, 9 to 14 and 16 and 17
seeking the same relief.
2.     The plaintiff has filed a suit for possession, recovery of money and
damages and has also prayed for a declaration that the various sale deeds
executed in favour of defendants No.2 to 18 are illegal, unlawful, fraudulent
and void ab initio. It is pleaded in the plaint that the land in question which
is the suit property situated at village Humayunpur, Delhi belongs to the




CS(OS) 1096/2008                                                    Page 1 of 13
 plaintiffs No.1 and 2. The parties entered into an Agreement/MOU on
27.5.2005. Under the said agreement plaintiff No.1 agreed to transfer his
1/4th share in the property in favour of defendant No.1. Various terms and
conditions were agreed upon by the parties. It has been pleaded by the
plaintiffs that there were specific covenants in the Agreement dated
27.5.2005 that if defendant No.1 fails to make necessary payment of balance
due then the earnest money shall stand forfeited and the Agreement would
stand automatically cancelled. It was also pleaded that defendant No.1 had
right to sell and book for sale remaining flats other than three flats which
were constructed pursuant to the MOU. The three flats had been undertaken
to be transferred by defendant No.1 in favour of plaintiff No.3. Defendant
No.1 had a right to enter into a collaboration agreement with builders to
book residential flats and to construct a building over the land. As the
defendant No.1 breached the agreement, the agreement stood terminated and
came to an end. It is pleaded that the earnest money paid for the agreement
stood forfeited and defendant No.1 is liable to hand over peaceful and vacant
possession of the land to plaintiffs No.1 and 2. It is pleaded that in the
meantime defendant No.1 constructed few flats and sold some of the flats to
defendants No.2 to 18. Hence, the present suit has been filed seeking a
decree of possession of half share measuring 575 sq.yds. in the land situated
at Khasra No. 485/30, situated at village Humayunpur, Delhi. A decree is
also sought for a sum of Rs.89,20,000/- in favour of plaintiff No.3 and
against the defendants. Declaration is also sought that the various sale deeds
registered in favour of defendants No.2 to 18 be declared illegal, unlawful,
fraudulent and void ab initio.
3.     Plaint as originally filed did not implead defendants No.2 to 18. It is



CS(OS) 1096/2008                                                   Page 2 of 13
 the case of the plaintiff that he received knowledge of the sale of flats by
defendant No.1 to the said defendants only after written statement was filed
sometimes in October 2008 and when the documents were filed in
September 2009. Plaintiff accordingly moved an application in 2010 under
Order 6 Rule 17 CPC seeking amendment of the plaint. Subsequently, as
there was confusion on the identity of the proposed parties on 21.9.2012 the
plaintiff withdrew the said amendment application with liberty to file a fresh
application. The fresh application was filed in 2013. By order dated
19.2.2014 the amendment application was allowed and defendants No.2 to
18 have been impleaded as defendants to the suit.
4.     Now by the present applications it is pleaded that the plaintiffs had
knowledge about their title to the flat in question at least in 2009. Further the
impleadment of the said defendant would relate back to the date they were
served with summons in 2014 in view of Order 1 Rule 10(5) CPC. It is
hence pleaded that the plaint and the relief sought against defendants No.2 to
18 are barred by limitation being hit by Article 58 of the Schedule to the
Limitation Act and the present suit should be dismissed, as it is barred by
law.
5.     Learned counsel for the plaintiff has, however, refuted the said
contentions. He has pointed out that on 27.4.2017 an earlier application filed
by the defendants under Order 7 Rule 11 CPC on the same ground of
limitation was dismissed by this court. He submits that the present
applications seeking the same relief are barred under the principles of res
judicata. He also relies upon judgment of the Supreme Court in the case of
Munshi Ram vs. Narsi Ram and Another, (1983) 2 SCC 8 to contend that
in terms of Section 21 of the limitation act the date of filing of suit would be



CS(OS) 1096/2008                                                      Page 3 of 13
 the appropriate date for consideration of the limitation.
6.     I may see the order dated 27.4.2017. Relevant portion of the order
reads as follows:-
       "IA No.5104/2017 (of D-2 to 14 & 16 to 18 u/O VII R-11 CPC)

       "1. Though none appears for the plaintiffs, but since this
       application has come up for the first time today, the counsel for
       the applicants/defendants has been heard.

       2. The counsel for the applicants/defendants states that the
       plaintiffs in prayer paragraph C1 of the plaint are seeking a
       declaration with respect to the sale deeds mentioned therein and
       which sale deeds are in favour of the applicants/defendants who
       have been impleaded as parties to the suit only on 19th February,
       2014; rejection of the plaint is sought on the ground that the
       claim for declaration against the applicants/defendants is barred
       by time, as the suit insofar as against the applicants/defendants is
       deemed to be instituted when they were impleaded as parties.

       3. I have enquired from the counsel for the applicants/defendants
       the Article of the Schedule to the Limitation Act, 1963 which
       governs the relief and as to how the suit claim under Order VII
       Rule 11 of the Code of Civil Procedure, 1908 (CPC) can be said
       to be barred by time.

       4. The counsel for the applicants/defendants states that he has not
       checked the Article which would apply and starts rummaging
       through the Limitation Act and after reaching Part III thereof
       states that the same is applicable.

       5. Attention of the counsel has also been invited to Part IV.

       6. While this order is being dictated, the counsel for the
       applicants/defendants states that Article 58 would apply. He then
       states that either Article 58 or Article 59 would apply. He now
       states that both Articles 58 & 59 will apply.




CS(OS) 1096/2008                                                       Page 4 of 13
        7. It is quite obvious that the application has been filed without
       reference to law and is rejected."

7.     The Supreme Court in Arjun Singh vs. Mohindra Kumar and
Others, AIR 1964 SC 993 held as follows:-
       "14. It is needless to point out that interlocutory orders are of
       various kinds; some like orders of stay, injunction or receiver are
       designed to preserve the status quo pending the litigation and to
       ensure that the parties might not be prejudiced by the normal
       delay which the proceedings before the court, usually take. They
       do not, in that sense, decide in any manner the merits of the
       controversy in issue in the suit and do not, of course, put an end
       to it even in part. Such orders are certainly capable of being
       altered or varied by subsequent applications for the same relief,
       though normally only on proof of new facts or new situation
       which subsequently emerge. As they do not impinge upon the
       legal rights of parties to the litigation the principle of res judicata
       does not apply to the findings on which these orders are based,
       though if applications were made for relief on the same basis
       after the same has once been disposed of the court would be
       Justified in rejecting the same as an abuse of the process of court.
       There are other orders which are also interlocutory but would fall
       into a different category. The difference from the ones just now
       referred to lies in the fact that they are not directed to
       maintaining the status quo, or to preserve the property pending
       the final adjudication but are designed to ensure the just, smooth,
       orderly and expeditious disposal of the suit. They are
       interlocutory in the sense that they do not decide any matter in
       issue arising in the suit, nor put an end to the litigation. The case
       of an application under O. IX, Rule 7 would be an illustration of
       this type. If an application made under the provisions of that rule
       is dismissed and an appeal were filed against the decree in the
       suit in which such application were made, there can be no doubt
       that the propriety of the order rejecting the reopening of the
       proceeding and the refusal to relegate the party to an earlier stage
       might be canvassed in the appeal and dealt with by the appellate
       court. In that sense, the refusal of the court to permit the




CS(OS) 1096/2008                                                        Page 5 of 13
        defendant to "set the clock back" does not attain finality. But
       what we are concerned with is slightly different and that is
       whether the same Court is finally bound by that order at later
       stages so as to preclude its being reconsidered. Even if the rule of
       res judicata does not apply it would not follow that on every
       subsequent day which the suit stands adjourned for further
       hearing, the petition could be repeated and fresh orders sought on
       the basis of identical facts. The principle that repeated
       applications based on the same facts and seeking the same reliefs
       might be disallowed by the court does not however necessarily
       rest on the principle of res judicata. Thus if an application for the
       adjournment of a suit is rejected, a subsequent application for the
       same purpose even if based on the same facts, is not barred on
       the application of any rule of res judicata, but would be rejected
       for the same grounds on which the original application was
       refused. The principle underlying the distinction between the rule
       of res judicata and a rejection on the ground that no new facts
       have been adduced to justify a different order is vital. If the
       principle of res judicata is applicable to the decision on a
       particular issue of fact, even if fresh facts were placed before the
       Court, the bar would continue to operate and preclude a fresh
       investigation of the issue, whereas in the Other case, on proof of
       fresh facts, the court would be competent, may would be bound
       to take those into account and make an order conformably to the
       facts freshly brought before the court."


8.     Clearly, an earlier application under Order 7 Rule 11 CPC filed by the
applicants based on the same facts bearing I.A.No.5104/2017 was dismissed
on 27.04.2017. No fresh facts or grounds have been pleaded in the present
applications which would permit the defendants to file a fresh application
under Order 7 Rule 11 CPC. If the defendants were aggrieved by the order
dated 27.4.2017 the remedy was to have challenged the said order. The law
does not permit the applicants to file a fresh application seeking the same
relief, all over again based on the same facts as noted in the above judgment



CS(OS) 1096/2008                                                      Page 6 of 13
 of the Supreme Court.
9.      That apart, I have examined the contention of the defendants on merit.
The facts here reveal that the issue that has been raised by the applicants
cannot be adjudicated upon in the present applications under Order 7 Rule
11 CPC.
10.     The applicants are those who were impleaded later on. Their claim is
that in terms of Order I Rule 10(5) CPC the limitation in the suit commences
only from the date when summons in the suit were served upon them. Based
on this plea, it is stated that summons were served on the said applicants
only sometimes in 2014 and hence the relief claimed against the said
defendants relating to documents executed in 2006-07 and 2008 is barred by
limitation.
11.     Reference may now be had to Entry 58 and 59 of Schedule 1 of the
Limitation Act and Section 3 of the Limitation Act which read as follows:-


      Description of Suit     Period of limitation      Time from which
                                                        period begins
"58. To obtain any other
      declaration                Three years         When the right to sue
                                                     first accrues.
59.     To cancel or set aside
        an instrument or decree
        or for the rescission of
        a contract               Three years         When the facts entitling
                                                     the plaintiff to have the
                                                     instrument or decree
                                                     cancelled or set aside or
                                                     the contract rescinded
                                                     first become known to
                                                     him.




CS(OS) 1096/2008                                                    Page 7 of 13
        Section 3(1) of the Limitation Act reads as follows:
           3. Bar of limitation. - (1) Subject to the provisions
           contained in sections 4 to 24 (inclusive), every suit
           instituted, appeal preferred, and application made after the
           prescribed period shall be dismissed, although limitation has
           not been set up as a defence.

12.    Reference may be had to the judgments of the Supreme Court in the
case Khatri Hotels Private Ltd. & Anr. Vs. Union of India and Anr.,2011
(10) SCALE 190, where the Hon‟ble Supreme Court held as follows:
      "25. Article 120 of the 1908 Act was interpreted by the Judicial
      Committee in Mt. Bolo v. Mt. Koklan AIR 1930 PC 270 and it
      was held:
            "There can be no „right to sue‟ until there is an
            accrual of the right asserted in the suit and its
            infringement, or at least, a clear or unequivocal threat
            to infringe that right, by the defendant against whom
            the suit is instituted."
      ...

27. While enacting Article 58 of the 1963 Act, the legislature has designedly made a departure from the language of Article 120 of the 1908 Act. The word „first‟ has been used between the words `sue‟ and `accrued‟. This would mean that if a suit is based on multiple causes of action, the period of limitation will begin to run from the date when the right to sue first accrues. To put it differently, successive violation of the right will not give rise to fresh cause and the suit will be liable to be dismissed if it is beyond the period of limitation counted from the day when the right to sue first accrued."

13. This court in Sanjeev Kalra vs. Jyoti Kalra & Ors., (MANU/DE/5246/2012), held as follows:-

"6. A suit for cancellation of the documents which is filed under Section 31 of the Specific Relief Act, 1963 is governed by

Article 59 of the Limitation Act, 1963 i.e. it has to be filed within three years from the date of knowledge of the documents, execution of which is challenged. In the present case, two agreements to sell under which the plaintiff has transferred rights in the first floor, second floor with terrace of the property are dated 19.4.2006 and 5.5.2006 respectively i.e. almost six years prior to filing of the suit."

The legal position that flows from the above is that in a suit for declaration, the limitation is three years from the date when the right to sue first accrues. Similarly, in a suit to cancel or to set aside any instrument, the limitation is three years from when the facts entitling the plaintiff to have the instrument cancelled first become known to the plaintiff.

14. It has now to be seen in the facts of this case as to when the cause of action first arose in favour of the plaintiff or when the plaintiff had knowledge about the execution of documents in favour of defendant No.2.

15. Order 1 Rule 10(5) CPC read as follows:-

"10. Suit in name of wrong plaintiff.-

....

(5) Subject to the provisions of the Indian Limitation Act, 1877 (15 of 1877), section 22, the proceedings as against any person added as defendant shall be deemed to have begun only on the service of the summons."

16. The other relevant section relied upon is Section 21 of the Limitation Act which reads as follows:-

21. Effect of substituting or adding new plaintiff or defendant.--

(1) Where after the institution of a suit, a new plaintiff or, defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party:

Provided that where the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.

(2) Nothing in sub-section (1) shall apply to a case where a party is added or substituted owing to assignment or devolution of any interest during the pendency of a suit or where a plaintiff is made a defendant or a defendant is made a plaintiff."

17. The Supreme Court in Munshi Ram vs. Narsi Ram and Another, (supra) on Section 21 of the Limitation Act noted as follows:-

"7. It is clear from the foregoing that there was no provision corresponding to the proviso to sub-section (1) of Section 21 of the Act in Section 22 of the repealed Act. Under the former Limitation Act when after the institution of a suit a new plaintiff or defendant was substituted or added, the suit as regards him was to be deemed to have been instituted when he was so made a party. The severity of the above law is sought to be reduced by the introduction of the proviso to Section 21(1) of the Act which provides that where the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith it may direct that the suit as regards such plaintiff or defendant should be deemed to have been instituted on any earlier date. This change in Section 21 of the Act appears to have been made so that an omission to implead a person owing to a bona fide mistake does not deprive a plaintiff of his rights against that person if the court is satisfied in that behalf."

18. Hence, in view of proviso to Section 21 of the Act where the Court is satisfied that the omission to include a new defendant was due to mistake and in good faith the suit will be deemed to be instituted on an earlier date

with regard to such defendant. This adjudication would have to be done at the time of adjudication of the suit and not at this stage.

19. In the present case, the document in question executed in favour of the applicants pertains to the years 2006-07 and 2008. However, the suit has been filed in 2008. As per the plaint, the plaintiff learnt about the execution of the said sale deed in favour of the applicants only on 11.09.2009 when various documents were placed on record by defendant No.1. He has thereafter immediately moved an application under Order 6 Rule 17 CPC which has been adjudicated upon and was allowed in 2014. The question would come as to when cause of action arose in favour of the plaintiff. As per the plaint, in view of section 21 of the Limitation Act, the suit would be deemed to have been instituted against the applicants from the date when the suit was filed as the plaintiff had no knowledge about the said defendants till the details were provided by defendant No.1. These are issues which have to be gone into as noted by the Supreme Court in the case Munshi Ram vs. Narsi Ram and Another,(supra). The application of section 21 of the Limitation Act would have to be gone into by the court at the appropriate stage.

20. Even otherwise, limitation is normally a mixed question of law and fact. It is settled legal position that limitation is a mixed question of law and fact. In Panchanan Dhara & Ors. v. Monmatha Nath Maity (Dead) Through LRs. & Another, (2006) 5 SCC 340, the Supreme Court held as follows:

"20. Contention of Mr.Mishra as regards the applicability of the first or the second part of Article 54 of the Limitation Act will have to be judged having regard to the aforementioned findings of fact. A plea of limitation is a mixed question of law and fact.

The question as to whether a suit for specific performance of contract will be barred by limitation or not would not only depend upon the nature of the agreement but also on the conduct of the parties and also as to how they understood the terms and conditions of the agreement....."

21. The Supreme Court in Ramesh B.Desai & Ors. v. Bipin Vadilal Mehta & Ors., AIR 2006 SC 3672, held as follows:

"19. A plea of limitation cannot be decided as an abstract principle of law divorced from facts as in every case the starting point of limitation has to be ascertained which is entirely a question of facts. A plea of limitation is a mixed question of law and fact......"

22. The grounds on which a plaint can be rejected under Order 7 Rule 11 CPC are quite limited. As long as a plaint discloses a valid cause of action which requires determination by the court the plaint cannot be rejected under Order 7 Rule 11 CPC. Reference may be had to the judgment to the case of Mayar (H.K.) Ltd & Ors v. Owners & Parties, Vessel M.V. Fortune Express & Ors, AIR 2006 SC 1828; wherein the Supreme Court held as follows:

"11. It is apparent that the plaint cannot be rejected on the basis of the allegations made by the defendant in his written statement or in an application for rejection of the plaint. The Court has to read the entire plaint as a whole to find out whether it discloses a cause of action and if it does, then the plaint cannot be rejected by the Court exercising the powers under Order VII, Rule 11 of the Code. Essentially, whether the plaint discloses a cause of action, is a question of fact which has to be gathered on the basis of the averments made in the plaint in its entirety taking those averments to be correct. A cause of action is a bundle of facts which are required to be proved for obtaining relief and for the said purpose, the material facts are

required to be stated but not the evidence except in certain cases where the pleadings relied on are in regard to misrepresentation, fraud, wilful default, undue influence or of the same nature. So long as the plaint discloses some cause of action which requires determination by the court, mere fact that in the opinion of the Judge the plaintiff may not succeed cannot be a ground for rejection of the plaint."

Similar are the observations of the Hon'ble Supreme Court in the case of Vigneswara Coop. Housing Society Ltd. V. K. Balachandramouli & Ors, (2005) 13 SCC 506. Reference may also be had to the judgement of this court in the case of Tilak Raj Bhagat vs. Ranjit Kaur, 159 (2009) DLT 470 wherein it was held as follows:-

"6. It may be worthwhile to mention here that while considering an application under Order 7 Rule 11 CPC, the Court has to look at the averments made in the plaint by taking the same as correct on its face value as also the documents filed in support thereof. Neither defence of the defendant nor averments made in the application have to be given any weightage. Plaint has to be read as a whole together with the documents filed by the plaintiff."

23. Keeping into account the above legal position and on a reading of the plaint, it cannot be said that the suit filed by the plaintiff against the defendant/applicants is barred by limitation. These are issues that can only be adjudicated upon after trial on final adjudication. Hence, as noted these applications are liable to be dismissed on the grounds akin to res judicata. Even otherwise, there is no merit in the present applications. Same are dismissed.

                                                     (JAYANT NATH)
JANUARY 30, 2018/n/v                                     JUDGE