Bharat Bhushan Kapur vs M/S. Neha Deep Construction
2018 Latest Caselaw 4405 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No. 113/2006

%                                                       31st July, 2018

BHARAT BHUSHAN KAPUR                                      ..... Appellant

                          Through:       Mr. Rohit Puri, Advocate.

                          versus

M/S. NEHA DEEP CONSTRUCTION                             ..... Respondent

                          Through:       None.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

RFA No.113/2006 and C.M. Appl. Nos. 2629-30/2006

1. This Regular First Appeal under Section 96 of the Code

of Civil Procedure, 1908 (CPC) is filed by the plaintiff in the suit

impugning the judgment of the trial court whereby the trial court has

dismissed the suit for specific performance and injunction filed by the

appellant/plaintiff. Specific performance was claimed by the

appellant/plaintiff with respect to two office spaces bearing nos. H-7

and H-8 having an approximate area of 225 sq. feet each situated in

the building constructed on plot no. 1, Rajendra Place, New Delhi, by

the respondent/defendant. Trial court has dismissed the suit as being

barred by limitation and has therefore given no findings on other issue

nos. 2 to 4.

2. At the outset I would like to note that the trial court has

observed that it does not have to decide issue nos. 2 to 4 because the

suit is held to be barred by limitation as per decision on issue no.1, but

this is not a correct approach of the trial court because all issues have

to be decided by the trial court in view of Order XIV Rule 2 CPC

unless the trial court held that it lacked jurisdiction. There is no issue

of lack of jurisdiction of trial court and therefore trial court should not

have only decided the issue of limitation and dismissed the suit and

the trial court should also have decided issue nos. 2 to 4.

3. The facts of the case are that the appellant/plaintiff filed

the subject suit for specific performance with respect to the suit

properties pleading existence of two Agreements to Sell dated

17.1.1983 for a total sale consideration of Rs.4,50,000/- i.e.

Rs.2,25,000/- for each of the spaces H-7 and H-8. The application

which is termed as the Agreements to Sell by the trial court, and dated

17.1.1983, was followed by a proper Agreement to Sell dated

16.3.1983. Appellant/plaintiff has pleaded in the plaint that he

regularly waited for receiving intimation with respect to various

payments to be made in installments inasmuch as the

respondent/defendant was to construct the entire property at 1,

Rajendra Place, New Delhi, but ultimately finding no response of the

respondent/defendant, the appellant/plaintiff issued his Letters dated

30.12.2003 and 7.3.2004 that the respondent/defendant must receive

the balance payment and hand over possession of the suit properties to

the appellant/plaintiff, but in spite of the appellant/plaintiff being

ready and willing to perform his part of the contract the

respondent/defendant did not transfer the suit properties to the

appellant/plaintiff and hence the subject suit was filed by the

appellant/plaintiff for specific performance and injunction.

4. The respondent/defendant contested the suit and prayed

for dismissal of the suit on the ground of being time barred because

Agreements were of the year 1983 and the suit was filed on 27.8.2004,

i.e. after around 21 years of the Agreements to Sell. Trial court has

referred to Article 54 of the Limitation Act, 1963 which provides for

three year period of limitation with respect to suit a for specific

performance and accordingly trial court has held that there cannot be

specific performance of a contract after approximately 18 years. The

relevant observations of the trial court with respect to issue of

limitation are contained in para 9 of the impugned judgment and this

para reads as under:-

"9. Now the controversy exists as to whether the present suit has been filed within a period of limitation or not. Article 54 of Limitation Act, 1963 lays down limitation pertaining to specific performance of a contract which is three years from the date fixed for the performance or, if no such date is fixed, when the plaintiff has noticed that performance is refused. The aforesaid Article of Limitation Act makes it abundantly clear that in a suit for specific performance of contract, limitation is three years from the date fixed for purpose or when the plaintiff received notice when performance of the contract was specifically refused by the defendant. In the present case, as admitted by the plaintiff himself, the contract was to be specifically performed by defendant on or before the last day of June, 1985. Clause 3-NB-11 of Agreement to Sell dated 16/3/83 lays down that the time was the essence of the contract. It is strange that plaintiff did not did not take the trouble to ask the defendant to perform the contract specifically by June, 1985 nor within three years thereafter. The plaintiff woke up from deep slumber after a gap of more than 18 years urging the defendant to hand over the possession and issued a notice. The law of Limitation impose an embargo on the litigants not to raise claim after period of limitation as prescribed under the law. The object of law of limitation is that a party should be prompt to agitate his rights within a reasonable time. It is now well settled that in a suit for specific performance of contract the plaintiff should approach the defendant to perform the contract within reasonable time. However, asking defendant to perform the contract specifically after a gap of 18 years cannot, by any stretch of imagination, be termed as reasonable. The plaintiff has specifically pleaded in para 14 of the plaint that there was no refusal on the part of defendant at any point of time till filing of the suit except his refusal to reply legal notice dated 7/3/2004. The bare perusal of the contents of the plaint clearly indicate that the suit of the plaintiff is barred by limitation. Accordingly, the issue is decided in favour of the defendant and against the defendant."

5. At the outset, I would like to note that learned counsel for

the appellant/plaintiff has only pressed this present appeal, by giving

up the relief of specific performance, and has prayed only for the

refund of the sum of Rs.2,25,000/- paid by the appellant/plaintiff to

the respondent/defendant under the Agreements to Sell dated

16.3.1983 in exercise of powers of this court under order VII rule 7

CPC. The details of the payments made by the appellant/plaintiff to

the respondent/defendant are stated in paragraph 9 of the plaint and

this para 9 reads as under:-

"9. It is to mention here that out of the total sale consideration of Rs. 4,50,000/-, the Plaintiff had paid the following instalments towards part sale consideration from time to time as an when demanded by the Defendant which were duty received and acknowledge by the Defendant vide following respective receipts:

      FOR OFFICE SPACE H-7

      DATES           PAYMENTS (Rs.)          RECEIPTS NO.





      Total                1,12,500/-

      FOR OFFICE SPACE H-8

      DATES           PAYMENTS (Rs.)          RECEIPTS NO.










      Total                 1,12,500/-

The balance instalments were to be paid by the Plaintiff only on demand to be raised by the Defendant through minimum seven days Registered notice, the Defendant never sent after the last instalment paid on 25-06- 1984 till date."

6. The law with respect to entitlement of a buyer of a suit

property for refund of the price paid is well settled, and this law is that

inspite of a buyer being guilty of breach of contract, a seller cannot

forfeit the amounts paid under the agreement to sell unless the seller

pleads and proves the loss, especially a specific monetary amount,

which is caused to him on account of the stated breach of a

plaintiff/buyer. This aspect has been considered by me in detail in the

recent judgment in the case of M.C. Luthra Vs. Ashok Kumar

Khanna 2018 (248) DLT 161, and against which judgment an SLP

was filed in the Supreme Court, and which SLP was dismissed by the

Supreme Court vide Order dated 15.5.2018 in SLP (C) No.

11702/2018. In the facts of the present case it is seen that

respondent/defendant has not pleaded or proved that any loss was

caused to him, much less a specific loss figure equivalent to the

amount paid by the appellant/plaintiff to the respondent/defendant

under the subject agreements to sell, and therefore, the

respondent/defendant, subject to the decision of issue on limitation ,is

not entitled to forfeit the amounts paid totalling to Rs.2,25,000/- under

the two Agreements to Sell dated 16.3.1983.

7. A reading of the record of the trial court, being the

pleadings of the parties as also the evidence led by the parties, shows

that at no point of time any letter was addressed by the

respondent/defendant to the appellant/plaintiff that on account of

breach by the appellant/plaintiff of the two Agreements to Sell dated

16.3.1983, the respondent/defendant had forfeited the total amount of

Rs.2,25,000/- paid by the appellant/plaintiff under the subject

agreements to sell. In fact, the case of the respondent/defendant in the

written statement paragraph 8 was that the appellant/plaintiff had

given a particular different address in the application for grant of

spaces and which address was subsequently changed but the

respondent/defendant was not intimated of the change of address by

the appellant/plaintiff.

8. In the facts of the case such as the present, limitation of

the appellant/plaintiff/buyer to claim the amounts under the

Agreements to Sell, and which are paid to the

respondent/defendant/seller, would only commence if the

respondent/defendant has pleaded a case of forfeiture. Not only there

is no pleading by the respondent/defendant of forfeiting of the

amounts paid by the appellant/plaintiff, there is no pleading in the

written statement of the respondent/defendant that prior to filing of the

subject suit the respondent/defendant had ever sent a communication

to the appellant/plaintiff that the amounts paid by the

appellant/plaintiff to the respondent/defendant would stand forfeited

on account of the alleged breach by the appellant/plaintiff of the two

Agreements to Sell dated 16.3.1983. In such a scenario the amount

which remains with the respondent/defendant is in the nature of a

deposit by the appellant/plaintiff/buyer, and the right to claim back the

deposit arises only once a notice is issued seeking refund of the

amount deposited. A period of three years of limitation will thereafter

start for the deposit in view of Article 113 of the Limitation Act. As

already discussed above, since in the present case at no point of time

the respondent/defendant claimed forfeiture, and therefore since the

amount of the appellant/plaintiff is with the respondent/defendant as a

deposit, and since respondent/defendant is not entitled to forfeit the

amount as no loss, much less any specific amount of loss, is pleaded

and proved as required by law and elaborated in the judgment the case

of M.C. Luthra (supra), consequently this appeal is allowed to the

extent that a money decree for a sum of Rs.2,25,000/- is passed in

favour of the appellant/plaintiff and against the respondent/defendant

along with pendente lite and future interest at the rate of 9% per

annum simple.

9. The appeal is allowed and disposed of to the extent as

stated above. Parties are left to bear their own costs. Decree sheet be

prepared accordingly.

JULY 31, 2018/AK                            VALMIKI J. MEHTA, J