Gujarat High Court
Bhimabhai Mansibhai Kariya vs General Manger Rspl Ltd on 21 June, 2021
Bench: J.B.Pardiwala
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 417 of 2021
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2020
In R/FIRST APPEAL NO. 417 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA Sd/-
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI Sd/-
================================================================
1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
================================================================
BHIMABHAI MANSIBHAI KARIYA
Versus
GENERAL MANGER RSPL LTD
================================================================
Appearance:
MR KANDRAP H DHOLAKIA for the Appellant(s) No. 1,2,3
MR TUSHAR L SHETH for the Appellant(s) No. 1,2,3
for the Defendant(s) No. 1
MR MIHIR JOSHI, SR.ADVOCATE with MR ABHISHEK M MEHTA for the
Defendant(s) No. 4
NOTICE SERVED BY DS(5) for the Defendant(s) No. 2,3
================================================================
CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 21/06/2021
Page 1 of 40
Downloaded on : Sat Jan 15 07:14:29 IST 2022
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
1. This Appeal is at the instance of the original plaintiffs of
the Special Civil Suit No.25 of 2018 instituted in the court of the
Principal Senior Civil Judge, Dwarka, for the cancellation of two
sale-deeds and for specific performance of an agreement to sell
and is directed against the judgment and order passed by the
Principal Senior Civil Judge, Dwarka, dated 2 nd March 2019,
rejecting the plaint, thereby dismissing the suit on the ground of
being barred by limitation.
2. The facts giving rise to this Appeal may be summarised as
under :
3. For the sake of convenience, the appellants herein shall be
referred to as the original plaintiffs and the respondents herein
shall be referred to as the original defendants.
4. The plaintiffs instituted the Special Civil Suit No.25 of
2018 in the court of the Principal Senior Civil Judge, Dwarka,
and prayed for the following reliefs :
"The reliefs prayed for in the suit are :
(A) To cancel the sale-deed No.259 dated 22.2.2013 as
well as the registered sale-deed No.1010 dated 20.6.2013
as the same is not executable, not in good faith and is
illegal;
(B) To pass an order directing the defendants to pay to
the plaintiffs a sum of Rs.3,95,40,116=00 (Rupees Three
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
Crore Ninety Five Lakh Forty Thousand One Hundred
Sixteen) towards the remaining amount as per the contract
agreement dated 13.1.2013 and to abide by the terms of the
contract agreement.
(C) To pass an order to declare the subject land to be of
the ownership of the plaintiffs; and
(D) To pass an order in favour of the plaintiffs directing
the defendants to pay the costs of this suit to the plaintiffs."
5. It appears from the materials on record that the plaintiffs
were the owners of the suit land bearing Survey No.324 (new
Survey No.504) and Survey No.325 (new Survey No.505)
respectively admeasuring H-3-74-38 situated at the village
Kuranga, Taluka Dwarka. These parcels of land came to be sold
by the plaintiffs to the defendant no.2, namely, Shri Naranbhai
Purshottambhai Patel, by way of a registered sale-deed bearing
No.259 dated 22nd February 2013. The total sale consideration
paid to the plaintiffs as reflected in the sale-deed is to the tune of
Rs.57,81,250=00 (Rupees Fifty Seven Lakh Eighty One
Thousand Two Hundred Fifty). At this stage, we may quote the
relevant extract from the sale-deed referred to above as under :
"We, the vendors, have received a sum of Rs.57,81,250=00
(Rupees Fifty Seven Lakh Eighty One Thousand Two
Hundred Fifty) from you, the purchaser, towards the
consideration of the aforesaid agricultural land. Now, we,
the vendor, do not have to recover any further amount from
you towards the consideration and nothing remains due to
be paid by you.
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
PARTICULARS OF CONSIDERATION
We, the vendors, have received a sum of Rs.57,81,250=00
(Rupees Fifty Seven Lakh Eighty One Thousand Two
Hundred and Fifty) towards the full consideration of the the
aforesaid agricultural land from you and we acknowledge
receipt for the same.
Upon receiving the amount of consideration towards the sale
price of the aforesaid agricultural land, its vacant, peaceful
and actual possession is handed over to you, which you
have taken over as owner after examining the same."
6. It appears that much before the aforesaid sale-deed came
to be executed, an agreement to sell dated 13 th January 2013
was entered into between the plaintiffs and the defendant no.2
herein. This agreement to sell should be termed as unique. We
say so, because it is signed only by the plaintiffs. Mr.Tushar
Sheth, the learned counsel appearing for the plaintiffs, fairly
conceded that this agreement to sell does not contain the
signature of the defendant no.2. The agreement to sell, the true
English translation of the same, reads thus :
"AGREEMENT TO SELL
OF
THE AGRICULTURAL LAND
OF
VILLAGE KURANGA
VENDOR :
1. Bhima Mansi Karia, Adult.
2. Roopaben Mansi Karia, Adult.
3. Dhaniben Mansi Karia, Adult.
Residing at Kuranga, Taluka Dwarka, District Devbhoomi
Dwarka.
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
PURCHASER :
Patel Naranbhai Purushottambhai, Aged 65 years, Hindu,
Occupation : Agriculturist, Residing at Ahmedabad.
We, the vendor, hereby execute this agreement to sell in
favour of the purchaser and to abide by the terms of the
agreement :
This agreement to sell is executed in respect of the below
mentioned agricultural lands situated in the sim of village
Kuranga, Taluka Dwarka, District Devbhoomi Dwarka,
Gujarat State :
Account Revenue H.Are.Sq.Mt. Assessment
No. Survey No.
328 324 1-22-42 3-01
325 2-51-92 6-09
This agreement to sell is executed today for sale of the
above mentioned agricultural lands of our sole and absolute
ownership with all the rights, title and interest enjoyed by
us, for a total sale consideration to the tune of
Rs.1,15,62,426=00 (Rupees One Crore Fifteen Lakh Sixty
Two Thousand Four Hundred Twenty Six), i.e.
Rs.5,00,000=00 (Rupees Five Lakh) per bigha.
The earnest money to the tune of Rs.10,00,000=00 (Rupees
Ten Lakh) towards the said agreement to sell has been
received by us and we acknowledge receipt for the same.
This agreement to sell is executed for the above mentioned
agricultural lands on a condition that the remaining balance
amount of Rs.1,05,62,426=00 (Rupees One Crore Five Lakh
Sixty Two Thousand Four Hundred Twenty Six) towards the
said agreement shall be paid in cash by 28.02.2013. We are
bound to execute registered sale-deed in favour of the
person named by you and the possession of the land shall
be handed over at the time of the sale-deed.
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
The above mentioned agricultural lands have not been sold,
gifted or mortgaged to anybody except you and there is no
any debt or encumbrance on the said lands. We have
executed this agreement to sell with the trust and assurance
that we shall not create any third party interest in the above
mentioned land, and despite that, if any such transaction is
found, we shall be solely liable and responsible for that.
The above mentioned agricultural lands are of our sole and
absolute ownership and possession, and upon payment of
the remaining balance amount mentioned in the agreement
in cash by 28.02.2013, we are abided to transfer the lands
to you. For the purpose of transferring the lands in your
name and for the revenue record, we shall always be
available for our consent and signatures wherever and
whenever required. The registered sale-deed shall be
executed at your own cost and we undertake to handover
the possession of the lands to you.
If the remaining balance amount as per the contract
agreement is not paid by 28.02.2013, then appropriate legal
action will be taken and this agreement to sell shall be
deemed to be null and void, which may kindly be taken note
of. The earnest money towards the agreement to sell shall
have to be refunded.
You have purchased this land on behalf of R.S.P.L company
for the purpose of establishing a Soda Ash plant at village
Kuranga. This agreement has been executed on a condition
that you will pay us the price ultimately fixed and paid by
the company towards the purchase of the land. You have
undertaken to pay us the final price at which you will finally
purchase the land and, therefore, keeping trust and having
confidence upon you, this agreement has been executed.
This agreement to sell of the agricultural land is executed by
us in a sound state of mind, on our free will and volition and
after careful examination of all the aspects, on payment of
Rs.10,00,000=00 (Rupees Ten Lakh) towards the earnest
money, in presence of the witnesses, which shall be binding
to us as well as to our heirs.
At: Bhatiya
Date: 13/01/2013"
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
7. In the agreement to sell, the total sale consideration has
been shown to the tune of Rs.1,15,62,426=00 (Rupees One Crore
Fifteen Lakh Sixty Two Thousand Four Hundred Twenty Six).
This sale consideration was fixed at the rate of Rs.5,00,000=00
(Rupees Five Lakh) per bigha. It is stated in the agreement to
sell that Rs.10 lakh has been paid by way of earnest money and
the balance amount of Rs.1,05,62,426=00 shall be paid on or
before 28th February 2013 and the sale-deed shall be executed
accordingly.
8. We find reference of the defendants nos.1 and 4 in this
agreement to sell. What is important is the second last
paragraph of the agreement to sell referred to above. It appears
that the defendant no.2, i.e. the purchaser of the subject land
from the plaintiffs, sold the said land in favour of the defendants
nos.1 and 4 respectively by way of a sale-deed dated 20 th June
2013. This sale transaction between the defendant no.2 and the
company was for the total sale consideration of
Rs.2,28,17,660=00 (Rupees Two Crore Twenty Eight Lakh
Seventeen Thousand Six Hundred Sixty).
9. Why do the plaintiffs want both the above referred sale-
deeds to be cancelled and seek the specific performance of the
contract based on the agreement to sell dated 13 th January
2013? The answer to this question lies in the penultimate
paragraph of the agreement to sell dated 13th January 2013
referred to above.
10. Invoking the recitals in the penultimate paragraph of the
agreement to sell, it is the case of the plaintiffs that the last sale-
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
deed executed by the defendant no.2 has been registered bearing
No.1735 dated 26th October 2016, in which the sale
consideration has been fixed at the rate of Rs.20 lakh per Bigha
and, therefore, the plaintiffs are entitled to recover an amount of
Rs.3,95,40,116=00 (Rupees Three Crore Ninety Five Lakh Forty
Thousand One Hundred Sixteen) from the defendant no.2. We
may clarify that this sale-deed is with respect to some different
parcel of land. This parcel of land is not the one sold by the
plaintiffs to the defendant no.2 and the defendant no.2 in turn
sold it to the company. This parcel of land is altogether different
as clarified by the learned counsel appearing for the parties.
11. The defendants nos.1 and 4 respectively preferred an
application (Exh.19) in the Special Civil Suit No.25 of 2018
under Order 7 Rule 11 of the CPC and prayed for the rejection of
the plaint substantially on two grounds : first, that the suit is
not maintainable in law, and secondly, even otherwise the suit is
hopelessly time-barred having regard to the period of limitation
as prescribed under Article 59 of the Limitation Act.
12. The Civil Judge adjudicated the application (Exh.19) filed
by the defendants nos.1 and 4 respectfully and allowed the same
vide the impugned order. Paragraph-11 of the impugned order
reads thus :
"On reading the plaint and taking into consideration the
principles laid down in the above referred judgments, when
prima facie it appears that the plaintiffs had cleverly drafted
the plaint to bring their case within the limitation and upon
going through the evidence if it is found that the plaintiffs'
suit is barred by limitation, then such suit ought to have
been dismissed as per Order 7, Rule 11(d) of the CPC.
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
Since the beginning, the plaintiffs had the knowledge about
the contract dated 13.01.2013 produced on behalf of the
plaintiffs vide Mark-3/1 as well as both the registered sale-
deeds produced vide Mark-3/2 and Mark-3/3 dated
22.02.2013 and 20.06.2013 respectively, even though, the
plaintiffs have not filed the suit within a period of limitation,
i.e. within three years, and have filed the suit almost after a
period of three years thereafter by cleverly drafting the
plaint and taking advantage of the notice dated 08.08.2018
so as to show that their case is within the limitation.
However, as per the above discussion, when the plaintiffs
were knowing fully well about both the registered sale-
deeds produced vide Mark-3/2 and Mark-3/3, even though
by filing the suit on 05.09.2018, i.e. after a period of three
years, the plaintiffs have prayed to cancel both the
registered sale-deeds.
After taking into consideration all the aspects of the matter
and the provisions of law as well as the principles laid
down in the above referred judgments of the Supreme Court
and this Court, since the plaintiffs' suit is barred by
limitation as prescribed under Article 59 of the Limitation
Act, the same is dismissed in the interest of justice and the
following final order is passed :
FINAL ORDER
The application Exh.19 filed on behalf of the defendants
nos.1 to 4 in the Special Civil Suit No.25 of 2018, under
Order-7, Rule-11(d) of the Civil Procedure Code, is hereby
allowed.
The plaint of the plaintiffs is rejected since the suit filed by
the plaintiffs is barred by limitation.
No order on costs."
13. Thus, it appears on plain reading of paragraph-11 of the
impugned order that the plaint came to be rejected on the
ground of limitation.
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
14. The plaintiffs, being dissatisfied with the impugned order
passed by the court below Exh.19 rejecting the plaint, are here
before this Court with the present Appeal.
SUBMISSIONS ON BEHALF OF THE PLAINTIFFS :
15. Mr.Tushar Sheth, the learned counsel appearing for the
plaintiffs, vehemently submitted that the impugned order passed
by the court below rejecting the plaint is erroneous and contrary
to the well-settled principles of law governing the subject of
rejection of plaint. He would submit that the plaint ought not to
have been rejected on the ground of limitation. According to
Mr.Sheth, the issue of limitation is a mixed question of law and
fact and, therefore, the plaintiffs should have been given an
opportunity of leading oral as well as documentary evidence to
establish their case as put up in the plaint.
16. The principal argument of Mr.Sheth is that the rejection of
plaint on the ground of limitation is erroneous because the
limitation to file the suit would start from the date of registration
of the sale-deed no.1735 dated 26 th October 2016. The period of
three years has to be calculated from 26 th October 2016. It is
argued that the cause of action to file the suit was the
registration of the sale-deed No.1735 dated 26th October 2016
and the defendant no.2 declining to pay the balance sale
consideration to the plaintiffs in accordance with the terms of
the agreement to sell dated 13th January 2013.
17. In such circumstances referred to above, Mr.Sheth prays
that there being merit in his Appeal, the same be allowed and
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
the impugned judgment and order be quashed and the suit may
be restored to the file of the Principal Senior Civil Judge,
Dwarka.
18. Mr.Sheth, in support of his aforesaid submissions, has
placed reliance on the decision of the Supreme Court in the case
of Chhotanben and another vs. Kiritbhai Jalkrushnabhai
Thakkar and others, reported in (2018)6 SCC 422.
SUBMISSIONS ON BEHALF OF THE DEFENDANTS NOS.1
AND 4 RESPECTIVELY :
19. Mr.Mihir Joshi, the learned senior counsel assisted by
Mr.Abhishek Mehta, the learned advocate appearing for the
defendants nos.1 and 4 respectively has vehemently opposed
this Appeal submitting that no error, not to speak of any error of
law, could be said to have been committed by the court below in
rejecting the plaint. Mr.Joshi would submit that the suit
instituted by the plaintiffs, on the face of it, is not maintainable
in law. According to Mr.Joshi, the reliefs prayed for by the
plaintiffs are in two parts. First, the plaintiffs want both the sale-
deeds to be cancelled and secondly, the plaintiffs also seek the
specific performance of the contract based on the agreement to
sell referred to above. According to Mr.Joshi, the entire suit is
not only vague, but absolutely misleading and frivolous.
Mr.Joshi pointed out that the sale transaction between the
plaintiffs and the defendant no.2 could be said to be final and
complete on the day and date the plaintiffs executed the sale-
deed in favour of the defendant no.2. In the said sale-deed, there
is no reference worth the name of the so-called agreement to sell.
According to Mr.Joshi, the sale-deed is final and not conditional
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
in any manner. The plaintiffs have accepted the full sale
consideration and have transferred all their rights, title and
interest over the land in favour of the defendant no.2. The
defendant no.2, thereafter, executed the sale-deed with respect
to the same land in favour of the defendants nos.1 and 4, i.e. the
company. Mr.Joshi invited the attention of this Court to the two
provisions of the Transfer of Property Act - Sections 11 and 31
respectively. According to Mr.Joshi, if the first prayer with
respect to the cancellation of the sale-deeds is not maintainable
in law, then there is no question of enforcing the so-called
agreement to sell referred to above.
20. Mr.Joshi pointed out something unusual in the agreement
to sell. As noted above, the agreement to sell is signed only by
the plaintiffs. There is no signature of the defendant no.2 as is
evident from the document itself which is on record. In this
regard there is no dispute at the end of the plaintiffs.
21. According to Mr.Joshi, there was no cause of action for the
plaintiffs to file the suit and seek the reliefs as prayed for by
them in the plaint. The entire suit is misconceived and vague.
22. In such circumstances referred to above, Mr.Joshi prays
that there being no merit in this Appeal, the same be dismissed.
23. Mr.Joshi, in support of his aforesaid submissions, has
placed reliance on the following decisions :
(1) Dahiben vs. Arvindbhai Kalyanji Bhanusali, AIR 2020
SC 3310;
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
(2) The Andhra Pradesh Industrial Infrastructure
Corporation Limited and others vs. S.N.Raj Kumar and
others, AIR 2018 SC 1981.
ANALYSIS :
24. Having heard the learned counsel appearing for the parties
and having gone through the materials on record, the only
question that falls for our consideration is, whether the court
below committed any error in rejecting the plaint.
25. Although we are not convinced with the line of reasoning
adopted by the court below for the purpose of rejection of the
plaint, yet we are at one with the final conclusion arrived at by
the court below that the plaint deserves to be rejected.
26. The object of the aforesaid provision is to keep out
irresponsible law suits. In a way, it is to be used as a handy tool
by the courts to segregate the grain from the chaff, on a purely
prima facie examination of the statements made in the plaint.
The purpose of the said exercise is to ensure that a plaint which
is on the face of it vexatious and meritless and does not disclose
a clear right to sue when require to be thrown out at the
threshold so that unnecessary harassment and expense of the
defendant is spared. In regard reference may be made to the case
reported as Liverpool & London S.P. & I. Association Ltd. vs.
M.V. Sea Success I & Anr., (2004) 9 SCC 512, relevant extract of
which is reproduced hereinbelow :
"Para 133: The idea underlying Order 7 Rule 11(a) is that
when no cause of action is disclosed, the courts will not
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
unnecessarily protect the hearing of a suit. Having regard to
the changes in the legislative policy as adumbrated by the
amendments carried out in the Code of Civil Procedure, the
courts would interpret the provisions in such a manner so as
to save expenses, achieve expedition and avoid the court's
resources being used up on cases which will serve no useful
purpose. A legislation which in the opinion of the court is
doomed to fail would not further be allowed to be used as
device to harass a litigant."
27. On the same lines, the observations made by the Supreme
Court in the case of Samar Singh vs. Kedar Nath, 1987 Supp.
SCC 663 are as under :
"Para 4 : In substance, the argument is that the court must
proceed with the trial, record of evidence, and only after the
trial of the election petition is concluded that the powers
under the Code of Civil Procedure for dealing appropriately
with the defective petition which does not disclose cause of
action should be exercised. With respect to the learned
counsel, it is an argument which is difficult to comprehend.
The whole purpose of conferment of such powers is to
ensure that a litigation which is meaningless and bound to
prove abortive should not be permitted to occupy the time of
the court and exercise the mind of the respondent."
28. While construing the plaint from the perspective of its
rejection for want of cause of action or its being barred by law
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
under Order 7 Rule 11 of the Code of Civil Procedure, the
Supreme Court has unequivocally declared that the court should
not pick out averments in the plaint in isolation but has to
conduct its meaningful reading. In this regard, reference may be
made to (1977) 4 SCC 467 T.Arivandandam vs. T.V.Satyapal and
another, wherein it was held that:
"5. ...The learned Munsif must remember that if on a
meaningful -- not formal -- reading of the plaint it is
manifestly vexatious, and meritless, in the sense of not
disclosing a clear right to sue, he should exercise his power
under Order VII Rule 11, C.P.C. taking care to see that the
ground mentioned therein is fulfilled. And, if clear drafting
has created the illusion of a cause of action, nip it in the bud
at the first hearing by examining the party searchingly
under Order X, C.P.C. An activist Judge is the answer to
irresponsible law suits. The trial Courts would insist
imperatively on examining the party at the first hearing so
that bogus litigation can be shot down at the earliest stage.
The Penal Code is also resourceful enough to meet such
men, (Ch. XI) and must be triggered against them. In this
case, the learned Judge to his cost realised what George
Bernard Shaw remarked on the assassination of Mahatma
Gandhi "It is dangerous to be too good."
29. In 2005(7) SCC 510, Popat and Kotecha Property vs. State
Bank of India Staff Association, the Supreme Court has clearly
stated the applicable principles in paragraphs 15 to 19 of this
judgment which read as follows:
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"15. In I.T.C. vs. Debts Recovery Appellate Tribunal and
others, AIR 1998 SC 634 it was held that the basic question
to be decided while dealing with an application filed under
Order VII Rule 11 of the Code is whether a real cause of
action has been set out in the plaint or something purely
illusory has been stated with a view to get out of Order VII
Rule 11 of the Code.
xxx xxx xxx
17. It is trite law that not any particular plea has to be
considered, and the whole plaint has to be read. As was
observed by this Court in Roop Lal Sathi vs. Nachhattar
Singh Gill, (1982) 3 SCC 487, only a part of the plaint cannot
be rejected and if no cause of action is disclosed, the plaint
as a whole must be rejected.
18. in Raptakos Brett and Co. Ltd. vs. Ganesh Property,
AIR 1998 SC 3085 it was observed that the averments in
the plaint as a whole have to be seen to find out whether
Clause (d) of Rule 11 of Order VII was applicable.
19. There cannot be any compartmentalization, dissection,
segregation and inversions of the language of various
paragraphs in the plaint. If such a course is adopted it
would run counter to the cardinal canon of interpretation
according to which a pleading has to be read as a whole to
ascertain its true import. It is not permissible to cull out a
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sentence or a passage and to read it out of the context in
isolation. Although it is the substance and not merely the
form that has to be looked into, the pleading has to be
construed as it stands without addition or subtraction of
words or change of its apparent grammatical sense. The
intention of the party concerned is to be gathered primarily
from the tenor and terms of his pleadings taken as a whole.
At the same time it should be borne in mind that no pedantic
approach should be adopted to defeat justice on hairsplitting
technicalities."
30. To find out whether a plaint discloses a cause of action or
not, the court has to look only to the averments made in the
plaint. When a plaint is based on a document filed along with
the plaint, it can, however, be considered to ascertain if plaint
discloses any cause of action. The cause of action means every
fact which it would be necessary for the plaintiff to prove, if
traversed, in order to support his right to judgment. The words
'cause of action' mean the whole bundle of material facts which
are necessary for the plaintiff to prove in order to entitle him to
the reliefs claimed in the suit. What is to be done by the court at
the stage of deciding as to whether the plaint discloses any
cause of action or not is to find out from the allegation of the
plaint itself as to whether a bogus, wholly vexatious or frivolous
litigation is sought to be initiated under the garb of ingenuous
drafting of the plaint or not because it is the duty of the court to
guard against the mischief of a litigant misusing the process of
court by entering into a false litigation merely for the purpose of
harassing the other party and to nip in the bud the litigation
which is sham and shabby in character. In order to find out
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whether the plaint discloses a cause of action or not, the
averments made in the plaint and the documents annexed
thereto should be scrutinized meaningfully and if on such
scrutiny it is found that the plaint does not disclose cause of
action, it has got to be rejected in view of the provisions of Order
7, R.11(a) of the CPC. When it is said that the court should take
into consideration the averments made in the plaint for the
purpose of deciding the question whether the averments made in
the plaint disclose cause of action or not, it does not mean that
the court is precluded from applying the statutory provisions or
case-law to the averments made in the plaint. If an assertion
made in the plaint is contrary to the statutory law or case-law, it
cannot be considered as disclosing cause of action.
31. In the present case, the defendants have invoked the
provisions of Order 7 Rule 11(a) of the CPC to state that the
plaint is liable to be rejected as it does not disclose a cause of
action. While determining, as to what would constitute cause of
action, the Supreme Court in the case of Om Prakash Srivastava
vs. Union of India, reported in (2006) 6 SCC 207, observed as
below:
"Para 12. The expression "cause of action" has acquired a
judicially settled meaning. In the restricted sense "cause of
action" means the circumstances forming the infraction of
the right or the immediate occasion for the reaction. In the
wider sense, it means the necessary conditions for the
maintenance of the suit, including not only the infraction of
the right, but also the infraction coupled with the right itself.
Compendiously, as noted above, the expression means
every fact, which it would be necessary for the plaintiff to
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
prove, if traversed, in order to support his right to the
judgment of the court. Every fact, which is necessary to be
proved, as distinguished from every piece of evidence, which
is necessary to prove each fact, comprises in "cause of
action." (See Rajasthan High Court Advocates' Assn. v.
Union of India (2001) 2 SCC 294)
"Para 13. The expression "cause of action" has sometimes
been employed to convey the restricted idea of facts or
circumstances which constitute either the infringement or
the basis of a right and no more. In a wider and more
comprehensive sense, it has been used to denote the whole
bundle of material facts, which a plaintiff must prove in
order to succeed. These are all those essential facts without
the proof of which the plaintiff must fail in his suit." (See
Gurdit Singh v. Munsha Singh, (1977) 1 SCC 791.
"Para 14. The expression "cause of action" is generally
understood to mean a situation or state of facts that entitles
a party to maintain an action in a court or a tribunal; a
group of operative facts giving rise to one or more bases of
suing; a factual situation that entitles one person to obtain a
remedy in court from another person (see Black's Law
Dictionary). In Stroud's Judicial Dictionary a "cause of
action" is stated to be the entire set of facts that gives rise to
an enforceable claim; the phrase comprises every fact,
which if traversed, the plaintiff must prove in order to obtain
judgment. In Words and Phrases (4th Edn.) the meaning
attributed to the phrase "cause of action" in common legal
parlance is existence of those facts, which give a party a
right to judicial interference on his behalf." (See
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Navinchandra N. Majithia v. State of Maharashtra, (2000) 7
SCC 640 )
32. In the case of Union of India vs. Adani Exports Ltd.,
reported in AIR 2002 SC 126, the Supreme Court observed as
under :
"10. ...Cause of action as understood in civil proceedings
means every fact which, if traversed, would be necessary
for the plaintiff to prove in order to support his right to a
judgment of the Court. It is the bundle of facts which taken
with the law applicable to them, gives the plaintiff a right to
relief against the defendant. Each and every fact pleaded in
the writ petition does not ipso facto lead to the conclusion
that those facts give rise to a cause of action within the
court's territorial jurisdiction unless those facts pleaded are
such which have a nexus or relevance with the lis that is
involved in the case. Facts which have no bearing with the
lis or dispute involved in the case, do not give rise to a cause
of action so as to confer territorial jurisdiction on the court
concerned."
33. Thus, it is apparent from the aforesaid judicial
pronouncements that while examining the expressing cause of
action, the court ought to look at the factual situation that gives
rise to an enforceable claim. For the said purpose, the material
facts are required to be stated. As observed by the Supreme
Court in the case of Liverpool & London S.P. & I Assn. Ltd.
(supra) whether a plaint discloses a cause of action or not is
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essentially a question of fact. But whether it does or does not,
must be found out from reading the plaint itself. For the said
purpose, the averments made in the plaint in their entirety must
be held to be correct. Although the Order 7 Rule 11(a) of the CPC
authorizes the court to reject a plaint on failure on part of the
plaintiff to disclose a cause of action but the same would not
mean that the averments made therein or document upon which
reliance has been placed although discloses a cause of action,
the plaint would be rejected on the ground that such averments
which are not sufficient to prove the facts stated therein for the
purpose of obtaining the reliefs claimed in the suit. The court
must assume that the submissions in the plaint are true and
has to find out if they disclose a cause of action or a triable
issue. For the said purpose, the defence taken by the defendant
in its written statement cannot be probed. Nor can the court
dissect the pleading into several parts and consider whether
each of them disclose a cause of action (Refer : D.Ramachandran
vs. R.V. Janakiraman, (1999) 3 SCC 267.
34. It is true that the rejection of the plaint under Order 7 Rule
11 of the CPC is a drastic power conferred in the court to
terminate a civil action at the threshold. The conditions
precedent for the exercise of powers under Order 7 Rule 11,
therefore, are stringent and have been consistently held to be so
by the Supreme Court. It is the averments in the plaint that have
to be read as a whole to find out, whether it discloses a cause of
action or whether the suit is barred under any law. At the stage
of exercise of powers under Order 7 Rule 11, the stand of the
defendants in the written-statement or in the plaint for rejection
of the plaint is wholly immaterial. It is only if the averments in
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the plaint ex-facie do not disclose a cause of action or on a
reading thereof the suit appears to be barred under any law that
the plaint can be rejected. In all situations, the claims will have
to be adjudicated in the course of the trial. When we say
'averments in the plaint', it would embrace the documentary
evidence also relied upon by the plaintiffs. It is a settled position
of law that for the purpose of considering an application seeking
rejection of plaint, the court can look into the accompanying
documents relied upon by the plaintiffs. It is equally well-settled
that a frivolous civil action should be terminated at the
threshold. The civil court should not be permitted to adjudicate
upon a frivolous suit instituted with clever drafting of the plaint.
If clever drafting has created an illusion of the cause of action,
then it is the duty of the court to nipped it in the bud at the first
hearing.
35. Mr.Sheth, the learned counsel appearing for the plaintiffs,
concedes that his clients could not have prayed for the
cancellation of the sale-deeds because both the sale-deeds have
attained finality. He concedes to the fact that the suit in
substance is for recovery of unpaid sale consideration. He
further concedes that the plaintiffs have created an absolute
interest in favour of the defendants. He concedes that the sale-
deed executed by his clients in favour of the defendant no.2 first
in point of time is final and unconditional. There is nothing in
the said sale-deed upon which it could be said that the plaintiffs
have to recover any further sale consideration. Mr.Sheth also
concedes that there is no reference of the agreement to sell worth
the name in the sale-deed and the so-called understanding
between the plaintiffs and the defendant no.2.
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36. He would argue that the plaint may be rejected so far as
the company is concerned, i.e. the defendants nos.1 and 4
respectively, but the plaint could not have been rejected against
all the defendants, more particularly, the defendant no.2, as the
plaintiffs have a cause of action to seek the specific performance
of contract based on the agreement to sell referred to above. The
entire premise of the learned counsel appearing for the plaintiffs
is faulty. Once it is conceded that the sale-deed between the
plaintiffs and the defendant no.2 is final and not conditional in
any manner and the sale is complete in all respects, then we fail
to understand how do the plaintiffs expect specific performance
of contract based on the agreement to sell of which there is no
reference at all in the sale-deed.
37. As the point involved in the present Appeal is important,
we may try to explain it in a little elaborate manner for the
benefit of the courts below.
38. Section11 of the Transfer of Property Act reads as follows :
"Where, on a transfer of property, an interest therein is
created absolutely in favour of any person, but the terms of
the transfer direct that such interest shall be applied or
enjoyed by him in a particular manner, he shall be entitled
to receive and dispose of such interest as if there were no
such direction. "it is plain that the ingredients are (1) there
should be transfer of property; (2) an interest in that
property should be created absolutely in favour of a person
and (3) the terms of the transfer should direct that such
interest shall be applied or enjoyed by the said person in a
particular manner."
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39. Section 31 of the Transfer of Property Act reads as follows :
"Subject to the provisions of Section 12, on a transfer of
property an interest therein may be created with the
condition superadded that it shall cease to exist in case a
specified uncertain event shall happen, or in case a
specified uncertain event shall not happen."
Illustrations
(a) 'A' transfers a farm to 'B' for his life, with a proviso
that, in case 'B' cuts down a certain wood, the transfer shall
cease to have any effect. 'B' cuts down the wood. He loses
his life-interest in the farm.
(b) 'A' transfers a farm to 'B', provided that, if 'B' shall
not go to England within three years after the date of the
transfer, his interest in the farm shall cease. 'B' does not go
to England within the term prescribed. His interest in the
farm ceases."
40. It is plain that the ingredients are (1) there should be
transfer of property; (2) an interest therein should be created
and (3) a condition should be superadded while creating the
interest.
41. In our considered view, the basic distinction between these
two provisions relates to (i) direction envisaged in Section 11; (ii)
a condition envisaged in Section 31 of the Transfer of Property
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Act; (iii) an interest being created absolutely under Section 11
and (iv) an interest being created (not qualified by the word
'absolutely') but with a condition superadded in Section 31 of the
Transfer of Property Act.
42. 'Transfer of Property' is defined in Section 5 of the Transfer
of Property Act as follows :
"In the following Sections 'transfer of property' means an act
by which a living person conveys property in present or in
future, to one or more other living persons, or to himself, or
to himself and one or more other living persons; and 'to
transfer property' is to perform such act.
In this Section 'living person' includes a company or
association or body of individuals, whether incorporated or
not, but nothing herein contained shall affect any law for the
time being in force relating to transfer of property to or by
companies, associations or bodies of individuals."
43. Such a transfer of property can take place either by means
of sale, gift, will, lease etc. Transfer of property is always made to
convey property to some one or in other words to create an
interest in the property in favour of such a person. If the interest
so created is absolute but in the terms of the transfer there is a
direction that such interest shall be applied or enjoyed by the
transferee in a particular manner (though the interest created is
absolute), provisions of Section 11 of the Transfer of Property Act
squarely apply. It is to be noted here that the direction in the
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terms of the transfer has to be in regard to the application of the
interest created or enjoyment of the interest created in a
particular manner (though the interest has been created
absolutely ). In such cases, the law makes the term or direction
disappear allowing the interest created absolutely to survive. On
the other hand, when an interest in the property transferred is
created but with a condition that it shall cease to exist on the
happening of a specified uncertain event or on the non-
happening of a specified uncertain event, the provisions of
Section 31 of the Transfer of Property Act squarely apply. The
absence of the word 'absolutely' in extension of the words 'an
interest' in Section 31 is very significant. Illustration (a) to
Section 31 takes into consideration a case of limited interest.
Illustration (b) to Section 31 appears to take into consideration a
case where a limited interest has not been created, but a
condition which is unconnected with application of the interest
or enjoyment of the interest so created is superadded. These two
illustrations clearly highlight the basic distinction between the
provisions in Section 11 and Section 31 of the Transfer of
Property Act. In a case falling under Section 31 of the Transfer of
Property Act the superadded condition survives and the interest
created disappears.
44. There is no stipulation of any nature in the sale-deed
executed by the plaintiffs in favour of the defendant no.2 as
contained in the vague agreement to sell between the plaintiffs
and the defendant no.2. At the cost of repetition, we note that
the sale has attained finality. This makes all the difference. The
undisputed fact is that the sale-deed entered into between the
plaintiffs and the defendant no.2 do not contain any clause
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which can be construed as 'conditions superadded' so as to
enforce the so-called agreement to sell signed only by the
plaintiffs. This is the reason why we are saying that the litigation
on hand is unique.
45. The entire basis of seeking to enforce the so-called
agreement by praying for a relief of specific performance fails
once it is conceded and accepted by the learned counsel
appearing for the plaintiffs that the relief with respect to the
cancellation of the sale-deeds is not sustainable in law.
46. We are of the view that the entire edifice of the suit
instituted by the plaintiffs is as vague as anything and the entire
suit can be termed as frivolous. Rather, the whole case set-up by
the plaintiffs is preposterous. Though a little beyond the scope of
preliminary issues, but we cannot refrain ourselves from
observing that the case pleaded by the plaintiffs is contrary to
the grain of human behaviour.
47. The suit in substance is for recovery of the so-called
unpaid sale consideration. Let us proceed on the footing for the
time being that the plaintiffs have to recover some unpaid sale
consideration. The Supreme Court, in the case of Dahiben
(supra), has categorically held that non-payment of a part of the
sale consideration does not make the registered sale-deed 'void'
nor does it constitute a valid ground for its cancellation. The
Supreme Court held thus :
"The plaintiffs have made out a case of alleged non-payment
of a part of the sale consideration in the Plaint, and prayed
for the relief of cancellation of the Sale Deed on this ground.
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Section 54 of the Transfer of Property Act, 1882 provides as
under :
"54. 'Sale' defined.--'Sale' is a transfer of ownership
in exchange for a price paid or promised or part-paid
and part-promised."
The definition of "sale" indicates that there must be a
transfer of ownership from one person to another i.e.
transfer of all rights and interest in the property, which was
possessed by the transferor to the transferee. The transferor
cannot retain any part of the interest or right in the property,
or else it would not be a sale. The definition further
indicates that the transfer of ownership has to be made for
a "price paid or promised or part paid and part promised".
Price thus constitutes an essential ingredient of the
transaction of sale.
In Vidyadhar v. Manikrao & Anr., (1999)3 SCC 573, this
Court held that the words 'price paid or promised or part
paid and part promised' indicates that actual payment of
the whole of the price at the time of the execution of the Sale
Deed is not a sine qua non for completion of the sale. Even if
the whole of the price is not paid, but the document is
executed, and thereafter registered, the sale would be
complete, and the title would pass on to the transferee
under the transaction. The non-payment of a part of the sale
price would not affect the validity of the sale. Once the title
in the property has already passed, even if the balance sale
consideration is not paid, the sale could not be invalidated
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on this ground. In order to constitute a 'sale', the parties
must intend to transfer the ownership of the property, on the
agreement to pay the price either in praesenti, or in future.
The intention is to be gathered from the recitals of the sale
deed, the conduct of the parties, and the evidence on record.
In view of the law laid down by this Court, even if the
averments of the plaintiffs are taken to be true, that the
entire sale consideration had not in fact been paid, it could
not be a ground for cancellation of the Sale Deed. The
plaintiffs may have other remedies in law for recovery of the
balance consideration, but could not be granted the relief of
cancellation of the registered Sale Deed."
48. In Dahiben (supra), we find reference of the judgment of
the Supreme Court in the case of Vidyadhar (supra). It would be
pertinent to reproduce the relevant extract of the judgment in
Vidyadhar (supra), which reads thus :
"35. Even if the findings recorded by the High Court that the
plaintiff had paid only Rs. 500 to defendant No. 2 as sale
consideration and the remaining amount of Rs. 4,500 which
was shown to have been paid before the execution of the
deed was, in fact, not paid, the sale deed would not, for that
reason, become invalid on account of the provisions
contained in Section 54 of the Transfer of Property Act which
provide as under:
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54. "Sale" is a transfer of ownership in exchange for a
price paid or promised or part-paid and part-promised.
Such a transfer, in the case of tangible immoveable
property of the value of one hundred rupees and
upwards, or in the case of a reversion or other
intangible thing, can be made only by a registered
instrument. In the case of tangible immoveable
property, of a value less than one hundred rupees,
such transfer may be made either by a registered
instrument or by delivery of the property. Delivery of
tangible immoveable property takes place when the
seller places the buyer, or such person as he directs;
in possession of the property. A contract for the sale of
immoveable property is a contract that a sale of such
property shall take place on terms settled between the
parties. It does not, of itself, create any interest in or
charge on such property.
36. The definition indicates that in order to constitute a
sale, there must be a transfer of ownership from one person
to another, i.e., transfer of all rights and interests in the
properties which are possessed by that person are
transferred by him to another person. The transferor cannot
retain any part of his interest or right in that property or else
it would not be a sale. The definition further says that the
transfer of ownership has to be for a "price paid or promised
or part-paid and part-promised". Price thus constitutes an
essential ingredient of the transaction of sale. The words
"price paid or promised or part-paid and part-promised"
indicate that actual payment of whole of the price at the
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time of the execution of sale deed is not sine qua non to the
completion of the sale. Even if the whole of the price is not
paid but the document is executed and thereafter registered,
if the property is of the value of more than Rs. 100/-, the
sale would be complete.
37. There is a catena of decisions of various High Courts in
which it has been held that even if the whole of the price is
not paid, the transaction of sale will take effect and the title
would pass under that transaction. To cite only a few, in
Gyatri Prasad v. Board of Revenue and Ors. (1973)
Allahabad Law Journal 412, it was held that non-payment
of a portion of the sale price would not effect validity of sale.
It was observed that part payment of consideration by
vendee itself proved the intention to pay the remaining
amount of sale price. To the same effect is the decision of
the Madhya Pradesh High Court in Sukaloo and another vs.
Punau, AIR 1961 MP 176.
38. The real test is the intention of the parties. In order to
constitute a "sale", the parties must intend to transfer the
ownership of the property and they must also intend that
the price would be paid either in presenti or in future. The
intention is to be gathered from the recital in the sale deed,
conduct of the parties and the evidence on record."
49. It would be trite to refer to the case of Bishundeo Narain
Rai vs. Anmol Devi & Ors., 1998 (7) SCC 498, where the
Supreme Court had occasion to consider the question as to
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when the ownership and title in a property will pass to the
transferee, under a deed of conveyance. The Supreme Court
observed:
"Section 8 of the Transfer of Property Act declares that on a
transfer of property all the interests which the transferor
has or is having at that time, capable of passing in the
property and in the legal incidence thereof, pass on such a
transfer unless a different intention is expressed or
necessarily implied. A combined reading of Section 8 and
Section 54 of the Transfer of Property Act suggests that
though on execution and registration of a sale deed, the
ownership and all interests in the property pass to the
transferee, yet that would be on terms and conditions
embodied in the deed indicating the intention of the parties.
It follows that on execution and registration of a sale deed,
the ownership title and all interests in the property pass to
the purchaser unless a different intention is either
expressed or necessarily implied which has to be proved by
the party asserting that title has not passed on registration
of the sale deed. Such intention can be gathered by intrinsic
evidence, namely, from the averments in the sale deed itself
or by other attending circumstances subject, of course, to the
provisions of Section 92 of the Evidence Act, 1872."
50. It is pertinent to refer to the case of Kaliaperumal vs.
Rajagopal & Anr., 2009 (4) SCC 193, wherein the Supreme Court
considered the present issue and held:
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"It is now well settled that payment of entire price is not a
condition precedent for completion of the sale by passing of
title, as Section 54 of Transfer of Property Act, 1882 ("the
Act", for short) defines 'sale' as a transfer of ownership in
exchange for a price paid or promised or part paid and part
promised. If the intention of parties was that title should
pass on execution and registration, title would pass to the
purchaser even if the sale price or part thereof is not paid. In
the event of non-payment of price (or balance price as the
case may be) thereafter, the remedy of the vendor is only to
sue for the balance price. He cannot avoid the sale. He is,
however, entitled to a charge upon the property for the
unpaid part of the sale price where the ownership of the
property has passed to the buyer before payment of the
entire price, under Section 55(4)(b) of the Act. Normally,
ownership and title to the property will pass to the
purchaser on registration of the sale deed with effect from
the date of execution of the sale deed. But this is not an
invariable rule, as the true test of passing of property is the
intention of parties. Though registration is prima facie proof
of an intention to transfer the property, it is not proof of
operative transfer if payment of consideration (price) is a
condition precedent for passing of the property.
The answer to the question whether the parties intended
that transfer of the ownership should be merely by
execution and registration of the deed or whether they
intended the transfer of the property to take place, only after
receipt of the entire consideration, would depend on the
intention of the parties. Such intention is primarily to be
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gathered and determined from the recitals of the sale deed.
When the recitals are insufficient or ambiguous the
surrounding circumstances and conduct of parties can be
looked into for ascertaining the intention, subject to the
limitations placed by Section 92 of Evidence Act 1872. There
is yet another circumstance to show that title was intended
to pass only after payment of full price. Though the sale
deed recites that the purchaser is entitled to hold, possess
and enjoy the scheduled properties from the date of sale,
neither the possession of the properties nor the title deeds
were delivered to the purchaser either on the date of sale or
thereafter. It is admitted that possession of the suit
properties purported to have been sold under the sale deed
was never delivered to the appellant and continued to be
with the respondents. In fact, the appellant, therefore,
sought a decree for possession of the suit properties from
the respondents with mesne profits. If really the intention of
the parties was that the title to the properties should pass to
the appellant on execution of the deed and its registration,
the possession of the suit properties would have been
delivered to the appellant......
Where the sale deed recites that on receipt of the total
consideration by the vendor, the property was conveyed and
possession was delivered, the clear intention is that title
would pass and possession would be delivered only on
payment of the entire sale consideration. Therefore, where
the sale deed recited that on receipt of entire consideration,
the vendor was conveying the property, but the purchaser
admits that he has not paid the entire consideration or if the
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vendor proves that the entire sale consideration was not
paid to him, title in the property would not pass to the
purchaser."
51. Lot of emphasis was placed on the fact that the agreement
for sale referred to above and relied upon by the plaintiffs does
not contain the signature of the defendant no.2 and, therefore, it
cannot be termed as a valid contract. The endeavour on the part
of the defendants was to persuade this Court to take the view
that this circumstance itself would be sufficient to reject the
plaint. In this regard, we would like to explain the correct
position of law.
52. In S.M.Gopal Chetty vs. Raman, AIR 1998 Madras 169, a
learned Single Judge of the Madras High Court held that where
the agreement of sale was not signed by the purchaser, but only
by the vendor, it cannot be said that there was a contract
between the vendor and the purchaser; and as there was no
contract, the question of specific performance of an agreement
signed only by the vendor did not arise. On the other hand, in
Md.Mohar Ali vs. Md.Mamud Ali, AIR 1998 Gauhati 92, a
learned Single Judge of the Gauhati High Court held that an
agreement of sale was an unilateral contract (under which the
vendor agreed to sell the immovable property to the purchaser in
accordance with the terms contained in the said agreement), that
such an agreement for sale did not require the signatures of both
the parties, and that therefore, an agreement for sale signed only
by the vendor was enforceable by the purchaser. Both the
aforesaid two judgments were considered by the Supreme Court
in the case of Aloka Bose vs. Parmatma Devi, reported in (2009)2
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SCC 582, wherein the Supreme Court laid down the following
proposition of law :
"We find that neither of the two decisions have addressed
the real issue and cannot be said to be laying down the
correct law. The observation in Md.Mohar Ali (supra) stating
that an agreement of sale is an unilateral contract is not
correct. An unilateral contract refers to a gratuitous promise
where only party makes a promise without a return
promise. Unilateral contract is explained thus by John D.
Calamari & Joseph M.Perillo in The Law of Contracts (4th
Edition Para 2-10(a) at pages 64-65):
"If A says to B, 'If you walk across the Brooklyn
Bridge I will pay you $ 100', A has made a promise
but has not asked B for a return promise. A has asked
B to perform, not a commitment to perform. A has thus
made an offer looking to a unilateral contract. B
cannot accept this offer by promising to walk the
bridge. B must accept, if at all, by performing the act.
Because no return promise is requested, at no point is
B bound to perform. If B does perform, a contract
involving two parties is created, but the contract is
classified as unilateral because only one party is ever
under an obligation."
All agreements of sale are bilateral contracts as promises
are made by both - the vendor agreeing to sell and the
purchaser agreeing to purchase. On the other hand, the
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observation in S.M. Gopal Chetty (supra) that unless
agreement is signed both by the vendor and purchaser, it is
not a valid contract is also not sound. An agreement of sale
comes into existence when the vendor agrees to sell and the
purchaser agrees to purchase, for an agreed consideration
on agreed terms. It can be oral. It can be by exchange of
communications which may or may not be signed. It may be
by a single document signed by both parties. It can also be
by a document in two parts, each party signing one copy
and then exchanging the signed copy as a consequence of
which the purchaser has the copy signed by the vendor and
a vendor has a copy signed by the purchaser. Or it can be
by the vendor executing the document and delivering it to
the purchaser who accepts it. Section 10 of the Act provides
all agreements are contracts if they are made by the free
consent by the parties competent to contract, for a lawful
consideration and with a lawful object, and are not
expressly declared to be void under the provisions of the
Contract Act. The proviso to Section 10 of the Act makes it
clear that the section will not apply to contracts which are
required to be made in writing or in the presence of
witnesses or any law relating to registration of documents.
Our attention has not been drawn to any law applicable in
Bihar at the relevant time, which requires an agreement of
sale to be made in writing or in the presence of witnesses or
to be registered. Therefore, even an oral agreement to sell is
valid. If so, a written agreement signed by one of the
parties, if it evidences such an oral agreement will also be
valid. In any agreement of sale, the terms are always
negotiated and thereafter reduced in the form of an
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agreement of sale and signed by both parties or the vendor
alone (unless it is by a series of offers and counter-offers by
letters or other modes of recognized communication). In
India, an agreement of sale signed by the vendor alone and
delivered to the purchaser, and accepted by the purchaser,
has always been considered to be a valid contract. In the
event of breach by the vendor, it can be specifically enforced
by the purchaser. There is, however, no practice of
purchaser alone signing an agreement of sale."
53. Therefore, in our opinion, this circumstance, which is not
in dispute or rather admitted by the plaintiffs, by itself cannot be
a ground to reject the plaint, but it is one of the circumstances
which the court may take into consideration when the court is of
the opinion that the entire suit is frivolous and instituted
without any cause of action.
SUIT BARRED BY THE PERIOD OF LIMITATION AS
PRESCRIBED UNDER ARTICLE 59 OF THE LIMITATION
ACT :
54. We are in agreement with the reasoning assigned by the
court below for the purpose of rejecting the plaint on the ground
that the suit is otherwise also time-barred. The main prayer in
the suit is to cancel the sale-deed bearing No.259 dated
22.02.2013 and the sale-deed bearing No.1010 dated 20.06.2013
respectively. We have given more than a fair idea about these
two sale-deeds in the earlier part of the judgment. The second
part of the prayer is that the plaintiffs are entitled to recover a
sum of Rs.3,95,40,116=00 towards the balance sale
consideration in accordance with the terms of the contract dated
13.01.2013.
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
55. In the aforesaid context, we may give a fair idea about the
cause of action as pleaded by the plaintiffs in the plaint. The
relevant two paragraphs, i.e. paragraphs 15 and 16 respectively,
talk about the cause of action. The same read thus :
"15. The defendants have legally made a contract on
13.01.2013 and that contract has been made with the
consent of the defendants nos.1 and 3, by the defendant
no.2. The defendants, in collusion with each other, have
grabbed our suit property and they have also prepared a
forged document bearing no.259 dated 22.02.2013 by
cheating. As the said document is illegal, the present suit
has been filed before this court seeking to declare the same
as void.
16. The defendants were time and again approached
personally and reminded of our outstanding dues.
However, they gave false assurances, thereby they have
infringed our fundamental rights. Ultimately, on 08.08.2018,
we issued a legal notice to the defendants. Even though the
notice has been served upon them, they did not reply to the
same. Therefore, a cause of action has arisen for the present
suit and the suit is within the period of limitation."
56. With a view to bring the suit within the limitation, a legal
notice dated 08.08.2018 has been created, and relying upon
such notice, it is now sought to be argued that the suit is within
the period of three years from the date of notice and the plaint
could not have been rejected on the ground of suit being time-
barred.
C/FA/417/2021 JUDGMENT DATED: 21/06/2021
57. First, the entire cause of action pleaded is vague as
discussed in the earlier part of the judgment. Mr.Sheth made an
attempt to argue that the cause of action for the plaintiffs to file
the suit was the transaction between the defendant no.2 and the
company as regards some purchase of land. This purchase of the
land which Mr.Sheth is talking about has nothing to do with the
suit land. As discussed earlier, this land is altogether a different
land and the plaintiffs are no way concerned with the same.
58. Thus, on bare reading of the statements made in the plaint
itself it could be said that the suit is hopelessly time-barred. The
void sale-deed which the plaintiffs are talking about is of the
year 2013, whereas the suit came to be filed in the year 2018. It
is now well-settled that even if any transaction is void, the suit
has to be filed within the period of three years as provided under
Article 59 of the Limitation Act. We fail to understand on what
basis the plaintiffs assert that the sale-deed is void.
59. In the overall view of the matter, we are convinced that we
should not interfere with the impugned order passed by the
court below rejecting the plaint.
60. In the result, this Appeal fails and is hereby dismissed. The
connected Civil Application stands disposed of.
(J. B. PARDIWALA, J.)
(VAIBHAVI D. NANAVATI, J.)
/MOINUDDIN
