[Cites 4, Cited by 0]

Gujarat High Court

Shantilal R Patel vs Gujarat Housing Board on 1 December, 2025

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                            C/FA/1536/2006                                    JUDGMENT DATED: 01/12/2025

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                                R/FIRST APPEAL NO. 1536 of 2006


                       FOR APPROVAL AND SIGNATURE:


                       HONOURABLE MR. JUSTICE DEVAN M. DESAI
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                                   Approved for Reporting                     Yes            No
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                                                         SHANTILAL R PATEL
                                                               Versus
                                                      GUJARAT HOUSING BOARD
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                       Appearance:
                       MR KG SUKHWANI(871) for the Appellant(s) No. 1
                       MR YN RAVANI(718) for the Defendant(s) No. 1
                       ==========================================================

                         CORAM:HONOURABLE MR. JUSTICE DEVAN M. DESAI

                                                          Date : 01/12/2025

                                                         ORAL JUDGMENT

1. The present First Appeal is filed under

Section 96 of the Code of Civil Procedure, 1908 (For

short 'the Code') by appellant-original plaintiff

assailing the order dated 10.02.2005 passed by learned

Second Joint Civil Judge (S.D.) Ahmedabad (Rural) in

Special Civil Suit No.180 of 1993 (Order below Ex.34).

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2. Heard learned advocate Mr.K.G.Sukhwani for

appellant - original plaintiff and learned advocate

Mr.Y.N.Ravani for respondent - original defendant.

3. Brief facts are as under:

3.1. The appellant - plaintiff filed a suit for

recovery of Rs.5,62,000/- with interest at the rate of

18% per annum from respondent - defendant.

Defendant appeared and filed Written Statement at

Ex.12. When the matter was posted for recording the

oral evidence of plaintiff, defendant moved an

application at Ex.34 invoking the provisions of Order

VII Rule 11(d) of the Code for rejection of the plaint

on the ground that the suit is barred under Section 71

of the Gujarat Housing Board Act, 1961 (For short 'the

Act'). After hearing the parties, learned Court below

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allowed the application and rejected the plaint under

the provisions of Section 71 of the Act.

3.2 Being aggrieved and dissatisfied with the

impugned order, plaintiff - appellant is before this

Court by way of present First Appeal.

4. Learned advocate for appellant, at the outset,

contended that, plaintiff filed a suit for recovery of the

value of work done, but not paid, refund of security

deposit, excess establishment charges, and payment of

agreed escalation price. The suit is essentially based

upon the contract executed between the plaintiff and

defendant. It is alleged by plaintiff in the plaint that

the work could not be completed within the stipulated

time as the defendant failed to complete its contractual

obligation as mentioned in the plaint. It is contended

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that the provisions of Section 71 of the Act are not

applicable to the present set of facts as the suit is not

based upon breach of any statutory obligation but is

based upon breach of contractual obligation. It is

further contended that the learned trial Court has

gravely erred in interpreting Section 71 of the Act and

rejected the plaint.

4.1 In support of his submissions, learned

advocate for appellant has relied upon the decision of

Hon'ble Division Bench of this Court passed in First

Appeal No.3869 of 1985 and allied matters on

21.04.2022. Learned advocate for appellant has also

relied upon the decision of Hon'ble Apex Court in the

case of Bombay Housing Board (Now the Maharashtra

Housing Board) Vs. M/s. Karbhase Naik & Co. Sholapur

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reported in AIR 1975 Supreme Court 763. It is contended

that while considering Section 64 of the Bombay

Housing Board Act, 1948, which is pari materia with

the provisions contemplated under Section 71 of the

Act, the Hon'ble Apex Court has held that non-

payment of money as damages for breach of contract is

not an act done or purported to have been done in

pursuance of the Act and therefore Section 64 of the

Bombay Housing Board Act, 1948, (For Short 'the Act')

is not applicable. Applying the same principle, learned

advocate for the appellant contended that, in the

present case, plaintiff has claimed non-payment of

money as damages for breach of contract committed by

defendant. Except above, no other submissions are

made by learned advocate for appellant.

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5. Per contra, learned advocate for respondent

has supported the judgment and decree and contended

that Section 71 of the Act contemplates that, before

institution of the suit by any person, notice of two

months in writing of the intended suit must be issued.

In the present case, since no notice was issued prior to

the institution of the suit, the provisions of Section 71

of the Act are attracted and therefore, learned trial

Court has rightly interpreted Section 71 of the Act and

rejected the plaint. It is further contended that Section

71 of the Act does not differentiate between the breach

of contractual obligation or breach of statutory

obligation.

5.1 In support of his contentions, learned

advocate for respondent has relied upon a decision in

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the case of M.G.Patel and Co. Navsari Vs. Shri Alka Co-

op Housing Society Ltd. Navsari reported in 1980(2) GLR

6. I have considered the submissions canvassed

by learned advocates for the parties and perused the

record and proceedings. The issue raised in the present

First Appeal is with regard to the scope under Order

VII Rule 11(d) of the Code. In catena of decisions, law

has been laid down by interpreting the Order VII Rule

11(d) of the Code. Order VII Rule 11 contemplates the

contingencies under which the Court can exercise the

power under clauses (a) to (f) of Rule 11 of Order VII.

One such contingency for rejection of plaint as can be

seen in clause (d) of Rule 11 of Order VII is that,

when the suit appears from the statement made in the

plaint, to be barred by any law, plaint shall be

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rejected. While considering an application under Clause

(d) of Rule 11 of Order VII, the Court shall only

consider the averments made in the plaint. Any

defence or documents supporting the defence cannot be

considered at this stage.

In the present case, plaintiff has contended in

the plaint that the defendant invited tender for

construction of road, and plaintiff was a successful

bidder. The defendant accepted the tender and issued a

work order. The work was to be competed within 21

months i.e. on or before 19.07.1991. As per the

allegation of plaintiff, the work could not be completed

within the stipulated time because defendant failed to

complete contractual obligation as mentioned in para 5

of the plaint. It is also stated in the plaint that,

plaintiff had completed the work on 24.12.1991.

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However, defendant did not make payment for the

value of completed work and did not refund security

deposit, excess establishment charges from 20.07.1991

to 24.07.1992 together with interest and payment of

agreed escalation price. On a plain reading of

averments made in the plaint, undisputedly, the suit is

for a breach of contractual obligations. The learned

trial Court has granted the application at Ex.34 and

rejected the plaint by relying upon Section 71 of the

Act. For ready reference, Section 71 of the Act is

reproduced hereunder:-

"No person shall commence any suit against the board or against any officer or servant of the board or any person acting under the orders of the board,for anything done or purporting to have been done in pursuance of this act without giving to the board, officer or servant or person as the case may be, two months previous notice in writing of the intended suit and of the cause thereof nor after 6 months from the date of the act complained of."

Learned advocate for respondent has tried to

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interpret Section 71 in a manner as suits the case of

defendant. The interpretation which learned advocate

for the respondent has tried to make before this Court

by submitting that Section 71 of the Act is applicable

because the language of Section is silent with regard to

the suit arising out of the breaches of contractual

obligations.

7. On plain reading of Section 71 of the Act, it

transpires that a person shall not commence any suit

against the board or against any officer or servant of

the board or any person acting under the orders of the

board, for anything done or purporting to have been

done in pursuance of this act without giving to the

board, officer or servant or person as the case may be,

two months previous notice in writing of the intended

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suit and of the cause thereof nor after 6 months from

the date of the act complained of.

For invoking the provisions of Section 71 of

the Act, the commencement of suit shall be against the

officer or servant of the Board acting under the orders

of the Board for anything done or purporting to have

been done in pursuance of the Act.

8. As observed hereinabove, the statements

made in the plaint, nowhere states that the suit is filed

against the defendant for any act done by the Board or

any officers in pursuance of the Act. Learned advocate

for respondent has also contended that the suit is for

the alleged breach of the terms and conditions of the

contract. The claim for damages requires a full-fledged

trial, and unless the parties are put to strict proof, the

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plaint cannot be rejected by invoking the provisions of

Order VII, Rule 11(d) of the Code.

Learned trial Court while considering the

application, has lost sight of the scope of Order VII

Rule 11(d) and has miserably failed to interpret the

provisions of Section 71 of the Act. The contention

that the suit is barred under Section 71 of the Act

touches the maintainability of the suit. However, the

maintainability of the suit falls outside the scope of

order VII Rule 11 of the Code. In my opinion,

therefore, the contention of applicability of Section 71

of the Act, is misconceived and Order VII Rule 11(d)

of the Code is not applicable in the present set of

facts. The maintainability question can be determined

after trial in the present set of facts.

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9 The claim for damages require a full fledge

trial and unless parties are put to strict proof, the

plaint cannot be rejected by invoking the provisions of

Order VII Rule 11(d) of the Code. In the case of

Bombay Housing Board (supra), in paragraph No. 23,

Section 64 of the Act has been reproduced which is

reproduced hereunder:-

"No person shall commence any suit against the Board or against any officer or servant of the Board or any person acting under the orders of the Board, for anything done or purporting to have been done in pursuance of this Act, with- out giving the Board, officer, or servant or person two months' previous notice in writing of the intended suit and of the cause thereof, nor after six months from the date of the act Complained of."

"And in the case of any such suit for damages, if tender of sufficient amends shall have been made before the action was brought, the plaintiff shall not recover more than the amounts so tendered and shall pay all costs incurred by the defendant after such tender.

In paragraph Nos.26 and 27, in the case of

Bombay Housing Board (supra), the Hon'ble Apex

Court has observed as under:-

"26.There can be no doubt that the act complained of by the respondent was the non-payment of money as damages or compensation resulting from an alleged breach of contract.

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27. In Municipal Borough of Ahmedabad v. Jayantilal Chhotalal Patel, ILR (1947) Bom 841 = (AIR 1948 Bom 98) (FB) the Court held that when a municipality has power to enter into a contract under the Municipal Boroughs Act and the municipality purports to exercise its power to enforce such contract, any act done in the exercise of its power to enforce the contract is not in pursuance of the Act but in pursuance to the contract and, therefore, a suit brought against the municipality for return of deposit under a contract to clean the streets was not a suit of the type described in s. 206 of the Bombay Municipal Boroughs Act, 1925 which is in pari materia with Section 64 of the Act. In the course of the judgment, Chagla, J. (as he then was) observed that what the plaintiff sought to enforce was, the right which came into existence as a result of the contract entered into between the plaintiff and the municipality and not a public duty cast upon the municipality by the statute, that in forfeiting the deposit, the municipality was not acting in pursuance to the power given to 'it under statute but was doing so in pursuance of a power given to it under the contract and, therefore, the suit to enforce rights under the contract entered into with the municipality which the municipality was not under any obligation to enter into, cannot fall with the ambit of the section. We think that the decision lays down the law correctly ,and that the principle deducible from it is applicable to the facts here.

10. Decision in the case of M.G.Patel (supra)

relied upon by learned advocate for respondent is not

applicable to the present set of fact.

11. As discussed above, the case is pertaining to

the recovery of damages and non-payment of bills

together with the refund of security deposit. Therefore,

the present First Appeal deserves to be allowed and

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the same is allowed accordingly. The order dated

10.02.2005 passed by learned Second Joint Civil Judge

(S.D.) Ahmedabad (Rural) in Special Civil Suit No.180

of 1993 (Order below Ex.34), is hereby quashed and

set aside. Accordingly, suit is remanded back to the

learned trial Court for expeditious hearing on merits.

The suit is restored to its original file.

12. After filing of the Written Statement at Ex.12 in

the year 1993, defendant did not move any application

for rejection of plaint and allowed the suit to proceed.

Exhibit-34 application is filed on 06.03.2003. It is

noteworthy that, upon perusal of the record and

proceedings, plaintiff has equally remained grossly

negligent in not proceeding with the suit since 1993

and has sought adjournments after adjournments.

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Rojkam reveals that on several occasions, plaintiff has

remained absent and adjournment applications have

been granted.

13. It appears that the suit is of the year 1993.

Therefore, the parties are put to the following

directions:-

(i) The learned trial Court shall frame issues, if not framed, within a period of three days from the receipt of the copy of this order;

(ii) Upon framing of issues, plaintiff shall submit documents and an Affidavit in lieu of Examination-in-chief within a period of seven days thereof. The Cross-examination of plaintiff shall be completed thereafter within a period of three days;

(iii) If the plaintiff wishes to examine any witnesses, plaintiff shall strictly comply with

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the provisions of Order XVI Rule 1 of the Code. The said exercise shall be completed before the plaintiff enters in the witness box.

After plaintiff closes his side, defendant shall file an Affidavit in lieu of Examination-in- chief within a period of three days from the date of closure of evidence of plaintiff and shall also strictly comply with the provisions of Order XVI Rule 1 of the Code. Once the defendant closes its side of leading evidence, plaintiff and defendant shall conclude their submissions within a period of four days from the date of closure of evidence of defendant.

13.1 After completion of oral submissions, learned

trial Court shall conclude the case within a period of

seven days from the conclusion of the oral submissions.

13.2 The parties are hereby directed to give full

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co-operation to the learned trial Court for speedy

disposal of the matter within the aforesaid time bound

limit without asking for unnecessary adjournments.

13.3 The learned trial Court shall decide the

controversy strictly by adhere to the evidence adduced