Karnataka High Court
Ms. Jaya Mathai vs M.S. Husklite Panels Pvt Ltd on 25 October, 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF OCTOBER, 2024
BEFORE
THE HON'BLE MR. JUSTICE E.S.INDIRESH
REGULAR SECOND APPEAL NO.2323 OF 2018
C/W
REGULAR SECOND APPEAL NO.2324 OF 2018
IN RSA NO.2323 OF 2018
BETWEEN:
1. MS. JAYA MATHAI
D/O LATE DR. MARY VARGHEESE.
AGED ABOUT 53 YEARS.
2. MS. VALSA VARGHEESE CHACO,
D/O LATE DR. MARY VARGHEESE,
AGED ABOUT 54 YEARS,
BOTH ARE RESIDENTS OF,
NO.C13/5A, DLF QUTAB,
ENCLAVE PHASE I,
GURGAON 122 002,
HARYANA.
...APPELLANTS
(BY SRI. JOSHUA SAMUEL, ADVOCATE)
AND:
M.S. HUSKLITE PANELS PVT. LTD
NO.10-G, 4TH MAIN
2ND CROSS, KALYAN NAGAR
BENGALURU-560 043,
REPRESENTED BY ITS
2
MANAGING DIRECTOR
MR. K.T.MATHEW
S/O LATE K.M.THOMAS
NOW REPRESENTED BY
MR. M. KRISHNA MURTHY
S/O MUNISWAMY.
...RESPONDENT
(BY SRI. MANU K., ADVOCATE)
THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION
100 OF CODE OF CIVIL PROCEDURE, AGAINST THE JUDGMENT
AND DECREE DATED 18TH AUGUST, 2018 PASSED IN R.A.
NO.110 OF 2017 ON THE FILE OF VIII ADDITIONAL DISTRICT
AND SESSIONS JUDGE, BENGALURU RURAL DISTRICT,
BENGALURU. ALLOWING THE APPEAL AND SETTING ASIDE THE
JUDGMENT AND DECREE DATED 28TH MARCH, 2017 PASSED IN
O.S.NO.1255 OF 2006 ON THE FILE OF THE PRINCIPAL SENIOR
CIVIL JUDGE AND BENGALURU RURAL DISTRICT, BENGALURU.
IN RSA NO.2324 OF 2018
BETWEEN:
1. MS. JAYA MATHAI
D/O LATE DR. MARY VARGHEESE.
AGED ABOUT 53 YEARS.
2. MS. VALSA VARGHEESE CHACO,
D/O LATE DR. MARY VARGHEESE,
AGED ABOUT 54 YEARS,
BOTH ARE RESIDENTS OF,
NO.C13/5A, DLF QUTAB,
ENCLAVE PHASE I,
GURGAON - 122 002,
HARYANA.
3
...APPELLANTS
(BY SRI. JOSHUA SAMUEL, ADVOCATE FOR
SRI. MARUTHI S.H., ADVOCATE)
AND:
M.S. HUSKLITE PANELS PVT. LTD
NO.10-G, 4TH MAIN
2ND CROSS, KALYAN NAGAR
BENGALURU-560 043,
REPRESENTED BY ITS
MANAGING DIRECTOR
MR. K.T.MATHEW
S/O LATE K.M.THOMAS
NOW REPRESENTED BY
MR. M. KRISHNA MURTHY
S/O MUNISWAMY.
...RESPONDENT
(BY SRI. MANU K., ADVOCATE)
THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION
100 OF CODE OF CIVIL PROCEDURE, AGAINST THE JUDGMENT
AND DECREE DATED 18TH AUGUST, 2018 PASSED IN R.A.
NO.120 OF 2017 ON THE FILE OF VIII ADDITIONAL DISTRICT
AND SESSIONS JUDGE, BENGALURU RURAL DISTRICT,
BENGALURU. ALLOWING THE APPEAL AND SETTING ASIDE THE
JUDGMENT AND DECREE DATED 28TH MARCH, 2017 PASSED IN
O.S.NO.1255 OF 2006 ON THE FILE OF THE PRINCIPAL SENIOR
CIVIL JUDGE AND BENGALURU RURAL DISTRICT, BENGALURU.
THESE REGULAR SECOND APPEALS HAVING BEEN
RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT
THIS DAY, E.S. INDIRESH J., DELIVERED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE E.S.INDIRESH
4
CAV JUDGMENT
These Regular Second Appeals are filed by the
defendants challenging the judgment and decree dated
18.08.2018 passed in RA.No.110 of 2017 connected with RA
No.120 of 2017 on the file of the VIII Additional District and
Sessions Judge, Bengaluru Rural District, Bengaluru,
allowing the appeal in RA NO.110 of 2017 and dismissing
the appeal in RA No.120 of 2017, by setting aside the
judgment and decree dated 28.03.2017 in OS No.1255 of
2006 on the file of the Principal Senior Civil Judge,
Bangalore Rural District, Bengaluru, dismissing the suit of
the plaintiff and decreeing the counter claim filed by the
defendants in part.
2. For the sake of convenience, the parties in these
appeals shall be referred to in terms of their status and
ranking before the trial Court.
3. The plaint averments are that, parents of the
defendants, namely, Dr.(Mrs) Mary Varghese and Mr.Ninan
Varghese, are the owners of the suit schedule property
bearing Sy No.23/3, measuring to an extent of 01 acre, 30
guntas and 16 guntas of kharab land situate at
Nimakaipura, Bidarahalli, Hoskote Taluk (hereinafter
referred to as Schedule Land). It is stated in the plaint that,
parents of the defendants entered into a Agreement of Sale
dated 08.09.1985 with the plaintiff, offered to sell the suit
schedule land for total sale consideration of Rs.1,50,000/-
and as on the date of Agreement of Sale, plaintiff has paid
Rs.5,000/- as advance sale consideration. It is also stated in
the Agreement of Sale that, the execution of the registered
Sale Deed would not be later than two months from the
date of grant of permission by the Government as per the
provisions of the Urban Land (Ceiling And Regulations) Act,
1976 (hereinafter referred to as Act). It is further averred in
the plaint that, the suit schedule land has been converted
for industrial purpose, so as to enable the plaintiff, to run
their Industry. It is also averred in the plaint that, the
exemption from the Government of Karnataka was obtained
for the purpose of utilization of the schedule land for the
industrial purpose on 23.12.1985, at the instance of
plaintiff.
4. It is further pleaded in the plaint that,
subsequently, the plaintiff and mother of the defendants-
Dr.(Mrs)Mary Varghese had entered into a registered Lease
Deed on 31.03.1986 for a period of ten years with a
condition that, the plaintiff is entitled for further renewal of
lease period on the same terms and conditions. It is further
pleaded in the plaint that, on 28.06.1986, another
agreement was entered into between the mother of the
defendants with the plaintiff, whereby, mother of the
defendants-Dr.(Mrs)Mary Varghese acknowledged the
receipt of entire sale consideration of Rs.1,50,000/- and
agreed to convey the schedule land in favour of the plaintiff
and also mentioned that, the plaintiff is in possession of the
suit schedule land. It is stated in the plaint that, parents of
the defendants had applied to the Department of Housing
and Urban Development, Government of Karnataka, seeking
permission to exempt the land from the provisions of the
Act, and also for permission to sell the Schedule land. It is
also stated that, the plaintiff has commenced a small scale
industries in the suit schedule land as per the certificate of
grant dated 10.03.1989 issued by the Director of Industries,
Government of Karnataka, so also, the plaintiff has obtained
permission from the Department of Factories and Boilers,
Government of Karnataka on 01.07.1987. It is also stated in
the plaint that, mother of the defendant-Dr.(Mrs). Mary
Varghese was unable to secure permission under the Act
from the competent authorities to sell the suit schedule land
in favour of the plaintiff and as such, the plaintiff addressed
letter dated 30.11.1996 to the mother of the defendants,
calling upon her to renew the lease for further period of ten
years and also to take steps to secure the registered Sale
Deed for sale consideration of Rs.2,25,000/- after adjusting
the amount already paid. It is further stated that, mother of
the defendants has sent an evasive reply to the letter
addressed by the plaintiff about lease deed and as such, the
plaintiff has addressed one more letter dated 29.06.1999 to
mother of the defendants calling upon her to execute the
registered Sale Deed in favour of plaintiff. It is pleaded in
the plaint that, mother of the defendants sought for some
time to execute the registered Sale Deed and as such, the
plaintiff addressed another letter dated 09.08.2001 seeking
registration of the Sale Deed at the earliest. It is the case of
the plaintiff that, mother of the defendants has never
refused to execute the registered Sale Deed in favour of the
plaintiff, however, during the course of resolution of legal
impediment in completing the transaction, mother of the
defendants died during the year 2003 and as such, the
defendants kept on postponing the registration of the Sale
Deed for the reasons known to them, however, the plaintiff
had received letter dated 23.03.2006 addressed by the
defendant No.1 calling upon the plaintiff to handover the
vacant possession of the suit schedule land on or before
01.04.2006. The defendants, also issued legal notice dated
03.04.2006 calling upon the plaintiff to vacate the suit
schedule land, however, noting is stated in the said letters
about the sale consideration said to have been received by
mother of the defendants. It is also stated in the plaint that,
the plaintiff has paid the entire sale consideration of
Rs.1,50,000/- as agreed upon in terms of the Agreement of
Sale and thereafter, at the instance of mother of the
defendants, the plaintiff agreed to pay a further sum of
Rs.75,000/-, which is the only sum which remains unpaid. It
is further stated that, the plaintiff was always ready and
willing to pay balance consideration of Rs.75,000/- to the
defendants and to have the sale deed registered in his
favour and further, plaintiff having came to know about
evasive replies issued by mother of the defendants and her
legal representatives, i.e defendants herein and as such,
plaintiff has filed suit in OS No.1255 of 2006 before the Trial
Court seeking relief of specific performance of Agreement of
Sale dated 08.09.1985 and 28.06.1986 and consequential
reliefs.
5. After service of summons, defendants entered
appearance and filed written statement denying the
averments made in the plaint. Defendants admitted the
execution of Agreement of Sale dated 08.09.1985 between
their parents with the plaintiff to sell the suit schedule land,
however, contended that, the agreement was rendered void
by frustration of agreement as the parties were unable to
secure exemption from the competent authorities as per the
provisions under the Act. It is the specific case of the
defendants that the Agreement of Sale has been frustrated
and accordingly, same has been cancelled impliedly. The
defendants have also raised plea that the suit is barred by
limitation and denied the averments made in the plaint that
mother of the defendants has made an offer to sell the suit
schedule land in favour of the plaintiff. It is further
contended in the written statement that, the plaintiff was
interested to be a lessee, as per the deed of lease and the
plaintiff does not mention about the sale to be made in
respect of the suit schedule land. It is further stated that the
claim of the plaintiff for specific performance of contract of
agreement is barred by law of limitation as the same is
lapsed long ago. It is further pleaded in the written
statement that lease deed dated 31.03.1986 has been
expired by efflux of time and thereafter, there was no
renewal of lease period and as such, lease of the Schedule
land has been determined by issuance of notice of
termination of Lease Deed on behalf of the defendants,
which duly served on the plaintiff. Therefore, the defendants
sought for damages at the rate of Rs.1,00,000/- per month
with effect from 01.05.2006 by way of counter claim seeking
direction to the plaintiff to quit and vacate the suit schedule
land and further handover, the possession of the suit
schedule land to the defendants and accordingly, sought for
dismissal of the suit and to allow the counter claim filed by
the defendants.
6. In response to the counter claim made by the
defendants, the plaintiff filed reply to the counter claim
denying the averments made in the counter claim and
sought for rejection of the counter claim made by the
defendants.
7. On the basis of the rival pleadings, the trial Court
has formulated the issues and additional issues for its
consideration.
8. In order to establish their case, plaintiff has
examined two witnesses as PW1 and PW2 and got marked
65 documents as Exs.P1 to P65. On the other hand,
defendant No.1 was examined as DW1 and got marked 21
documents as Exs.D1 to D21.
9. The trial Court, after considering the material on
record, by its judgment and decree dated 28.03.2017
dismissed the suit of the plaintiff and decreed the counter
claim filed by the defendants in part and being aggrieved by
the same, the plaintiff has preferred Regular Appeal in RA
No.110 of 2017 and defendants have preferred RA No.120
of 2017 on the file of First Appellate Court. The aforesaid
appeals were resisted by the respective parties therein. The
First Appellate Court, after re-appreciating the facts on
record, by its judgment and decree dated 18.08.2018
allowed RA No.110 of 2017 filed by the plaintiff and
dismissed RA No.120 of 2017 filed by the defendants and as
such, set aside the judgment and decree dated 28.03.2017
passed by the trial Court in OS No.1255 of 2006.
10. Being aggrieved by the judgment and decree passed
by the First Appellate Court, in the above appeals
defendants/appellants preferred RSA No.2323 of 2018
against the judgment and decree in RA No.110 of 2017 and
RSA No.2324 of 2018 against the RA No.120 of 2017 under
Section 100 of CPC.
11. This court vide order dated 12.12.2018
formulated the following substantial question of law.
1.Whether possession delivered under Registered
Lease Deed can be considered as possession under
Section 53(A) of the Transfer of Property Act ?
2. Whether letters sent under certificate of posting by
the purchasers under the Agreement of Sale would
extend the period of limitation ?
12. I have heard Sri Joshua Samuel, learned counsel
for the appellants/defendants and Sri Manu K., learned
counsel appearing for the respondent/plaintiff.
13. Sri Joshua Samuel, learned counsel for the
appellants submits that, the Trial Court after considering the
material on record rightly dismissed the suit of the plaintiff,
however, the First Appellate Court without considering the
settled principle of law with regard to possession,
frustration, limitation and granting of relief of specific
performance of contract, has passed the impugned
judgment and decree, which on the face of it, is contrary to
law and therefore, sought for interference of this Court. It is
further submitted by the learned counsel for the appellants
that, the entire case of the plaintiff is based on the
Agreement of Sale entered into between the parteis in
respect of the suit schedule land for a consideration of
Rs.2,25,000/- as alleged in Ex.P3 and the said document
has been disputed by the defendants, however, the First
Appellate Court erroneously granted relief of specific
performance, based on the said oral agreement, holding
that the total consideration is Rs.2,25,000/- and the said
finding is contrary to the terms and conditions in the original
Agreement of Sale dated 08.09.1995 (Ex.P1) and the
Agreement of Sale dated 28.06.1986 (Ex.P3) which did not
admittedly mention the consideration of Rs.2,25,000/- and
therefore, it is argued that, the finding recorded by the First
Appellate Court requires to be interfered with in this appeal.
14. Learned counsel for the appellants further
contended that, the First Appellate Court committed an error
in accepting the Agreement of Sale dated 08.09.1985,
recording the finding that, the said agreement is not barred
by time and the said finding is, without re-appreciating the
reasons recorded by the Trial Court with regard to Issue
No.7. He further submitted that, the plaintiff had noticed the
refusal of performance of the agreement through the letters
addressed by mother of the defendants produced at Exs.D3,
D5 to D7, despite the said aspect of the matter, interfering
with the well reasoned judgment of the Trial Court is
opposed to the settled principle of law which requires to be
set aside in this appeal. In this regard, he refers to the
judgment of the Hon'ble Supreme Court in the case of
K.S.Vidyananam and others vs. Vairavan reported in
AIR 1997 SC 1751 and in the case of Inderkumar Johar
vs. Kailash Devi reported in AIR 1999 P and H 65 of the
High Court of Pujab and Haryana
15. Learned counsel for the appellants further
contended that, Agreement of Sale dated 28.06.1986
(Ex.P3) cannot be construed as Agreement of Sale that too
for a meager consideration of Rs.1,50,000/- and further as
there was no permission was granted by the competent
authority to sell the suit schedule land, which is a condition
precedent to execute the registered Sale Deed in favour of
the plaintiff, under such circumstances, the First Appellate
Court has committed an error in interfering with the
judgment of the Trial Court and same has to be set right in
these appeals.
16. Nextly, it is contended by the learned counsel for
the appellants that, the First Appellate Court has committed
an error in arriving at a conclusion that, the Agreement of
Sale at Ex.P1 is subsisting irrespective of the fact that, the
execution of Agreement of Sale as per Ex.P1 is subject to
confirmation of permission to be granted by the Government
under the provisions of the Act and the said aspect has been
over looked by the First Appellate Court, though the
condition stated in the Agreement of Sale at Ex.P1 is
frustrated on account of not obtaining permission to sell the
suit schedule land under the Act and as such, the learned
counsel for the appellants contended that, the First
Appellate Court has committed an error in not considering
Section 56 of the Indian Contract Act as the Agreement of
Sale at Ex.P1 itself is void and therefore, it is contended by
the learned counsel for the appellants that the finding
recorded by the First Appellate Court requires to be set
aside in this appeal.
17. Further, learned counsel for the appellants
contended that, the Lease Deed dated 31.03.1986 (Ex.P2)
has been executed by the parties as the Agreement of Sale
dated 08.09.1985 (Ex.P1) became void on account of not
obtaining the requisite permission from the Government to
the sell the suit schedule land and therefore, the recitals in
the Lease Deed dated 31.03.1986 makes it clear that the
parties have entered into a Lease Deed, which concludes
that the Agreement of Sale dated 08.09.1985 has been
cancelled impliedly and the said aspect has not been
properly re-appreciated by the First Appellate Court and as
such, the impugned judgment and decree passed by the
First Appellate Court is contrary to law and accordingly, he
sought for interference of this Court. In order to buttress his
arguments, he relied upon the judgment of the Hon'ble
Supreme Court in the case of Usha Devi and Others vs.
Ram Kumar Singh and Others reported in 2024 SCC
Online SC 1915 and in the case of Katta Sujatha Reddy
and another vs. Siddamsetty Infra Projects Pvt Ltd.,
and others reported in (2023) 1 SCC 355.
18. Per Contra, Sri Manu.K., learned counsel
appearing for the respondent sought to justify the impugned
judgment and decree passed by the First Appellate Court
and submitted that, the arguments advanced by the learned
counsel appearing for the appellants that, the Agreement of
Sale stood cancelled on account of frustration is incorrect
and as such, he argued that the true intention of the parties
to execute the Lease Deed was never to create landlord-
tenant relationship and on the other hand, the Lease Deed
was executed by the parties to enable the respondent to
secure license/permission from the competent authority to
commence the factory at the suit schedule land and during
the said period of lease, the appellants have to secure
permission from the Government to sell the suit schedule
land in respect of the respondent/plaintiff and as such, he
contended that the entire sale consideration of
Rs.1,50,000/- being three times of the prevailing market
value of the suit schedule land, as compared to guidance
value at the relevant point of time, being paid to the parents
of the defendants and therefore, learned counsel appearing
for the respondent refutes the contentions raised by the
learned counsel for the appellants. He further argued that,
the intention of the parties to execute the Lease Deed is to
avoid any separate Rent Deed in respect of the schedule
property till the permission to be accorded by the
Government to sell the suit schedule land in favour of the
plaintiff. It is further contended by the learned counsel
appearing for the respondent by relying on the recitals in
the Lease Deed that there has been no clause for escalation
of rent for a period of ten years and same would
demonstrates the intention of the parties that, the
defendants have to execute the registered Sale Deed in
favour of the plaintiff. Emphasising on these aspects,
learned counsel appearing for the respondent submitted
that, nothing is stated in the Lease Deed about the
cancellation of the Agreement of Sale dated 08.09.1985 as
entire sale consideration of Rs.1,50,000/- was paid by the
plaintiff to the parents of the defendants and therefore, it is
contended that, the First Appellate Court after re-
appreciating the material on record, in the right perspective,
passed impugned judgment and decree which requires to be
confirmed by this Court.
19. Nextly, learned counsel appearing for the
respondent invited the attention of the Court to the
Agreement of Sale dated 28.06.1986 (Ex.P3) and contended
that, the said Agreement of Sale crystallizes two aspects of
which, firstly that the parties at all times intended to
establish a relationship as vendor and purchaser and
secondly, the Lease Deed merely a formality since no
separate rent agreement was required to be prepared and
paid by the plaintiff to the defendants for over a period of
twenty years subject to the condition that, defendants are
required to secure the permission from the Government and
that apart, learned counsel appearing for the respondent
further contended that, possession of the schedule land was
given even prior to the execution of the Agreement of Sale
at Ex.P1 and the said aspect would makes it clear that the
intention of the parties is to conclude the registration of the
Sale Deed in favour of plaintiff and the said aspect has been
properly re-appreciated by the First Appellate Court and
therefore, he contended that, the impugned judgment and
decree passed by the First Appellate Court requires to be
affirmed.
20. Nextly, learned counsel appearing for the
respondent contended that the Agreement of Sale dated
08.09.1985 (Ex.P1) neither stood frustrated nor cancelled
by the parties and on the other hand, the plaintiff has
proved the execution of Agreement of Sale dated
28.06.1986 (Ex.P3) and as the defendants have not
discharged their burden to disprove the existence and
execution of the Agreement of Sale dated 28.06.1986, the
suit is liable to be decreed as prayed by the plaintiff.
21. Insofar as the arguments advanced by the learned
counsel appearing for the appellants, regarding limitation is
concerned, it is pleaded by the learned counsel appearing
for the respondent that, the suit filed by the plaintiff is not
barred by limitation, as no cogent material has been
produced by the defendants to establish that, the
Agreement of Sale is not in existence and therefore, as per
Article 56 of the Limitation Act, limitation for filing suit
seeking specific performance is three years from the date on
which, the performance of the agreement is denied by either
of the parties and in this regard, learned counsel appearing
for the respondent places reliance on the judgment of the
Hon'ble Supreme Court in the case of Ahmmadsahab
Abdul Mulla (deceased by Lrs.) vs. Bibijan and others
reported in AIR 2009 SC 2193 and in the case of
Ferrodous Estates (Pvt) Ltd., vs. P.Gopirathnam
(dead) and others reported in AIR 2020 SC 5041 and
submitted that, the First Appellate Court after re-
appreciating the material on record, rightly interfered with
the judgment and decree of the Trial Court and therefore,
the impugned judgment and decree of the First Appellate
Court is to be confirmed.
22. Having heard the learned counsel appearing for
the parties, I have carefully examined the finding recorded
by both the courts below and perused the records. It is to
be noted that, the defendants have not disputed the
execution of Agreement of Sale dated 08.09.1985 (Ex.P1)
by the parents of the defendants in favour of the plaintiff to
sell the suit schedule land for total consideration of sum of
Rs.1,50,000/- and thereby, the plaintiff has paid Rs.5,000/-
as advance to the vendors in respect of the suit schedule
land as per paragraph 3 of the written statement. Clause 3
of the Agreement of Sale dated 08.09.1985 reads as under:
"3. The balance of the sale price, namely,
Rs.1,45,000/- (Rupees One lakhs and Forty Five
Thousand only) shall be paid by the purchasers to the
vendors at the time of registration of the Deed, which
shall not be later than two months of grant of
exemption by the Government under the Urban Land
(Ceiling and Regulation) Act, 1976."
(emphasis supplied)
23. Clause 7 of the Agreement of Sale dated
08.09.1985 reads as under:
7.The Vendors shall file a Notice under Section 26 of
the Urban Land (Ceiling and Regulation) Act, 1976 of
their intention to sell the Schedule Property and shall
also obtain a Clearance Certificate under Section 230-
A(1) of Income Tax Act, 1961 to facilitate the
registration of the Deed of Sale.
(emphasis supplied)
24. It is also not in dispute that, on clear
understanding between the parties, the plaintiff was put
into possession by the parents of the defendants as their
intention was to sell the schedule land in favour of the
plaintiff. The dispute arises between the parties as the
defendants contended that, the Agreement of Sale dated
08.09.1985 rendered void by frustration as the parties were
unable to secure the permission from the Government
under the Act. In this regard, Section 56 of the Indian
Contract Act was pressed into service by the learned
counsel for the appellants that, the Agreement of Sale has
been frustrated on account of not securing permission and
the agreement is cancelled as the parties chose to enter
into a Lease Deed in respect of the suit schedule property.
It is also the core argument advanced by the learned
counsel appearing for the appellants that the suit is barred
by limitation as the plaintiff ought to have filed suit within
three years from the date of refusal of the agreement by
the defendants as the agreement dated 08.09.1985 lapsed
very long ago. In this regard, in view of the provisions
contained under Article 56 of the Limitation Act. It is
relevant to cite the observation made by Hon'ble Supreme
Court in the case of Ahmmadsahab Abdul Mulla (supra),
wherein Paragraph 7 reads as under:
"7.The inevitable conclusion is that the expression
'date fixed for the performance' is crystallized notion.
This is clear from the fact that the second part "time
from which period begins to run" refers to a case
where no such date is fixed. To put it differently,
when date is fixed it means that there is a definite
date fixed for doing a particular act. Even in the
second part the stress is on 'When the plaintiff has
notice that performance is refused'. Here again,
there is a definite point of time, when the plaintiff
notices the refusal. In that sense both the parts refer
to definite dates. So, there is no question of findings
out an intention from other circumstances. Whether
the date was fixed or not the plaintiff had notice that
performance is refused and the date thereof are to
be established with reference to materials and
evidence to be brought on record. The expression
'date' used in Article 54 of the Schedule to the Act
definitely is suggestive of a specified date in the
calendar. We answer the reference accordingly. The
matter shall now be placed before the Division Bench
for deciding the issue on merits."
25. It is pertinent to mention here that the law
declared by Hon'ble Supreme Court in the case of Usha
Devi (Supra), wherein Paragraphs 8 to 10 reads as under:
"8. We need not enter into the other issues as we
are convinced that the suit was barred by limitation.
The limitation under Article 54 of the Limitation Act,
1963 for instituting a suit for specific performance of
a contract would be three years from the date fixed
for the performance, or, if no such date is fixed,
when the plaintiff has notice that performance is
refused. Article 54 of the Limitation Act, 1963 is
reproduced hereunder:
***
54.
For Specific The date fixed for
performance the performance,
Three Years of or, if no such date
a contract is fixed, when the
plaintiff has notice
that performance
is refused.
9. Coming to the facts of the present case, we find
that in the agreement dated 17.12.1989, it is
specifically mentioned that the sale deed would be
executed within one month from the date of the said
agreement. The period of one month would expire on
16.01.1990, and once there is a specific date fixed
for performance, the limitation period would be three
years from the said date, which would expire on
16.01.1993. The Trial Court thus held that the suit
was barred by limitation as it was filed in September
1993.
10. The First Appellate Court and the High Court
went on the consideration that the agreement
further recorded that this agreement would remain
valid for a period of five years from today's date i.e.
date of the execution of the agreement to sell.
Placing reliance on this clause, in our considered
opinion, is totally irrelevant. The performance was to
take place within one month. The validity of the
agreement is something different and does not
change the date of performance. What was the
reason for incorporating this clause of validating the
agreement for five years is not spelled out in the
agreement, but in any case, it does not change the
date fixed for the performance."
26. On careful examination of the dictum of the
Hon'ble Supreme Court referred to above, an aggrieved
party/plaintiff has to file a suit for specific performance of
the contract, within three years from the date fixed for the
performance so also even if the time is not fixed in the
Agreement of Sale, period of limitation would be three
years from the date on which the plaintiff has noticed that
performance of the contract is refused. In the present case,
it is not in dispute that, the parties have entered into
Agreement of Sale on 08.09.1985 (Ex.P1), where the
parents of the defendants offered to sell the suit schedule
land in favour of plaintiff for sum of Rs.1,50,000/- and have
received Rs.5,000/- as an advance amount. Clause 3 of the
above Agreement stipulates that the balance of
Rs.1,45,000/- shall be paid by the purchaser (plaintiff) to
the vendors (parents of the defendants) at the time of
registration of Sale Deed subject to the sanction to be
granted under the provisions of the Act. Undoubtedly,
parents of the defendants made an application to the
competent authority -Government seeking permission to
sell the suit schedule land, however, the said application
was pending consideration before the competent authority-
Government and no order has been passed thereunder. In
the meanwhile, perusal of the documents would indicate
that the plaintiff had made an application to various
departments of the Government seeking permission to
commence the factory in the suit schedule land and that
apart, the plaintiff, in order to comply with the conditions
stipulated at Clause 3 of the Agreement of Sale dated
08.09.1985, paid the balance consideration to the mother
of the defendants- Dr.(Mrs). Mary Varghese as per Ex.P3-
agreement said to have been entered into between the
parties. Though it was disputed by the defendants, but
failed to prove the same in the evidence. It is pertinent to
mention herein that, after considering the evidence on
record that, as a token of Guarantee to complete the
transaction subject to approval by the Government, parties
have entered into Lease Deed dated 31.03.1986 (Ex.P2)
and the period of lease was for a period of ten years
renewable on the same terms and conditions at the sole
option of the Lessee (plaintiff) on termination of each
consecutive period of the lease and the said aspect was not
denied by the defendants. If the parties to the Agreement
of Sale dated 08.09.1985 have no intention to complete the
transaction and as there is any impediment under law as to
sanction to be accorded by the State Government, such an
option to continue or not would not have find place in the
Agreement of Sale. It is also not in dispute that the plaintiff
has paid the entire sale consideration of Rs.1,50,000/- to
mother of the defendants as per Agreement dated
28.06.1986 (Ex.P3). It is pertinent to mention here that, as
it is evident from the Lease Deed dated 31.03.1986
(Ex.P2), nothing is disclosed about the earlier Agreement of
Sale dated 08.09.1985 (Ex.P1). If at all, parents of the
defendants would like to cancel the earlier Agreement of
Sale dated 08.09.1985 (Ex.P1), it was always open for
them to do so by intimating the plaintiff regarding the
cancellation of Agreement of Sale and mentioned the same
in the Lease Deed itself. That apart, the parties have
executed second Agreement on 28.06.1986 (Ex.P3), though
it was disputed by the defendants, however, the said
submission of the learned counsel for the appellants cannot
be accepted on the sole ground that the defendants have
parted with the possession of the schedule land in favour of
the plaintiff and allow the plaintiff to secure permission
from the respective departments to commence the Factory
at the suit schedule property. It is also not in dispute that
the entire original deeds of the suit schedule land were
handed over to the plaintiff by the parents of the
defendants which makes it clear that the intention of the
parents of defendants was to sell the suit schedule land in
favour of the plaintiff, subject to concurrence from the
competent authority/Government to accord permission to
sell the suit schedule land and therefore, the submission
made by learned counsel appearing for the appellants that,
there is no consensus ad idem between the parties to sell
the suit schedule land cannot be accepted. The First
Appellate Court after re-appreciating the material on record
in the right perspective, set aside the judgment and decree
passed by the Trial Court.
27. I have also noticed from the records that the
title deeds of the suit schedule land was handed over to the
plaintiff to avail the loan from the Bank to complete the
registered Sale Deed. Though the parties have executed the
Lease Deed at Ex.P2, the reason for execution of the Lease
Deed was at the instance of the plaintiff to retain the
possession of the suit schedule land as well as bind the
parties into the terms and conditions stipulated in the
Agreement of Sale dated 08.09.1985 (Ex.P1) and therefore,
on all aspects of the matter, the intention of the parties
particularly, the parents of the defendants was to sell the
suit schedule land in favour of the plaintiff. In the backdrop
of the aforementioned observations, I am of the view that,
the Agreement of Sale was not frustrated on account of not
obtaining permission from the Government to sell the suit
schedule land in favour of the plaintiff. On careful
examination of the recitals in the Lease Deed dated
31.03.1986 (Ex.P2), wherein, the Lease Deed was entered
into between the parties for a period of ten years,
renewable on the same terms and conditions at a sole
option of the Lessee (plaintiff) and the said aspect of the
matter makes it clear that the parents of the defendants
were intend to complete the transaction by executing the
Sale Deed in favour of the plaintiff as soon as obtaining
permission from the government. In this regard, the
finding recorded by the Trial Court is incorrect and
therefore, the First Appellate Court, rightly re-appreciated
the material on record as required under Order XLI Rule 31
of the CPC and set aside the judgment and decree of trial
court. It is also to be noted that the defendants have not
produced any material before the Courts below regarding
cancellation of Agreement of Sale nor produced any
document to substantiate that the conditions stipulated in
the Agreement of Sale was frustrated on account of not
obtaining permission from the competent authority
/Government. Even it may be noticed that, it was always
open for the parents of defendants or the defendants to
issue notice to the plaintiff with regard to cancellation of
Agreement of Sale and therefore, the finding recorded by
the First Appellate Court that the suit is filed within three
years from the refusal by the defendants is just and proper
in terms of the letters addressed by the defendants and
same is required to be confirmed in this appeal.
28. It is also to be noted that, it is borne from the
records that the plaintiff has made necessary application to
the various authorities to obtain permission to commence
the Factory and the said aspect was well within the
knowledge of the parents of the defendants and the said
aspect is as evident from the execution of Lease Deed
dated 31.03.1986 (Ex.P2). It is very apt to observe that,
there was no Clause in the Lease Deed for escalation of the
monthly and yearly rent in the aforementioned Lease Deed
inter alia Lesee (plaintiff) had sole option to renew the lease
period and therefore, the aforementioned circumstances
have been rightly considered by the First Appellate Court in
detail and arrived at a conclusion to direct the defendants
to execute the Sale Deed which in accordance with law the
settled principle of law. It is also to be gathered from the
recitals in letter dated 30.11.1986 (Ex.P5), where the
plaintiff and the mother of defendants had a conversation
with regard to enhancement of the total agreed price of
Rs.2,25,000/- and the said aspect has been rightly re-
appreciated by the First Appellate Court. The compelling
force to prolong the execution of Sale Deed was on account
of absence of the permission by the competent
authority/Government under the Act. In that view of the
matter, taking into consideration the arguments advance by
learned counsel appearing for the appellants that the
Agreement is frustrated and Sale Agreement has become
void as per Section 56 of the Indian Contract Act cannot be
accepted.
29. At this juncture, it is relevant to cite the
paragraph 17 of the judgment of Hon'ble Supreme Court in
Ferrodous Estates Pvt. Ltd. (supra), which reads as
under:
"17. When these portions of the Full Bench judgment
are applied to the agreement in question, it is clear
that the agreement itself contains a specific clause,
namely, clause 4, in which it is for the vendor to
obtain permission from the competent authority
under the Tamil Nadu Urban Land Ceiling Act. This
agreement, therefore, cannot be said to be hit by the
decision of the Full Bench judgment as the Full
Bench itself recognises that there may be
agreements with such clauses, in which case it is the
Court's duty to enforce such clause. That is all that
the learned Single Judge has done in the facts of this
case - he has correctly held that it was for the
defendants to obtain exemption from the authorities
under the Tamil Nadu Urban Land Ceiling Act which
they did not, as a result of which they were in breach
of the agreement."
(Emphasis supplied)
30. It is also not the case of the defendants that,
plaintiff is not ready and willing to perform his part of the
contract as the entire amount of Rs.1,50,000/-, specified in
Agreement of Sale at Ex.P1 was paid. It is also to be noted
that the discussion was made with regard to enhancement
of Sale Consideration to an extent of Rs.2,25,000/- as per
Agreement at Ex.P3 and in the backdrop of these aspects,
the Trial Court has committed an error in refusing to order
for specific performance of the contract and further being
parted with the possession of the schedule land pursuant to
execution of Agreement Of Sale at Ex.P1 and entering into
Lease Deed (Ex.P2) as securing the permission was delayed
and therefore, it could be concluded that parameters of
Section 53 of Transfer of Property Act, has been complied,
and same was rightly set aside by the First Appellate Court
in accordance with Order XLI Rule 31 of the CPC, following
the dictum of Hon'ble Supreme Court in the case of
Santhosh Hazari vs. Purushottam Tiwari (Dead) by Lrs
reported in AIR 2001 SC 965 and therefore, contentions
raised by appellants cannot be accepted. Taking into
consideration the substantial question of law framed by this
Court, suit filed by the plaintiff is within time from the date
of knowledge of refusal by the defendants and as such, suit
is and not barred from limitation as per Article 54 of the
Limitation Act. From the reading of Article 54 of the
Limitation Act, what emerges is: Firstly, a period of two
months was prescribed for execution of the Sale Deed would
not be later than two months from the date of grant of
permission by the Government under the Act as per the
Agreement of Sale at Ex.P1 and secondly, the registration of
the Sale Deed was also subject to the condition that the
parents of the defendants shall get permission from the
Government to sell the suit schedule land. Thus, it is clear
that, as period was not fixed as per Agreement of Sale and
as such, paragraph No.1 of Article 54 of the Limitation Act,
prescribing period under the Agreement of Sale does not
arise and further conditions stipulated that, the period of
two months from the date of sanction/permission to be
granted under the Act and undisputedly the application
made by the parents of the defendants was pending
consideration before the Government, in the face of these
conditions as laid in the Agreement of Sale and taking into
consideration as the expression "Date" mentioned in Article
54 of the schedule to the Act, definitely is suggestive of a
specified date of occurrence of grant/permission that may
be made by the Government. The expression "Date Fixed" in
essence means having final and crystallized form for
character not subject to change or fluctuation. Having held
this expression "Date Fixed" to be a crystallized notion, the
First Appellate Court, rightly arrived at a conclusion that
there has to be date fixed as final limit as a definite point of
time i.e. permission/sanction ought to have been taken by
the parents of the defendants from the Government in
furtherance of Agreement of Sale at Ex.P1. Since, there is
no document produced by the defendants canceling the
Agreement of Sale at Ex.P1, possession of the property has
been parted with the plaintiff in terms of the Lease Deed at
Ex.P2 and further, an Agreement at Ex.P3 was entered into
between the parties to effectuate the terms and conditions
as well as the intention of the defendants to sell the suit
schedule land in favour of the plaintiff as having received
the sale consideration of Rs.1,50,000/- and that apart, the
plaintiff agreed to pay additional sum of Rs.75,000/- to
complete the sale transaction and therefore, the substantial
question of law favours the plaintiff, consequently, I do not
find any perversity in the judgment and decree passed by
the First Appellate Court. At this juncture it is apt to cite the
dictum of Hon'ble Supreme Court in the case of
Balasubramanian And Another vs. M. Arockiasamy
(Dead) Through Legal Representatives reported in
(2021)12 SCC 529, wherein, the Hon'ble Supreme Court,
at paragraphs 14 and 15 held as follows:
"14. In the background of the legal position and on
reasserting the position that there is very limited
scope for reappreciating the evidence or interfering
with the finding of fact rendered by the trial court
and the first appellate court in a second appeal
under Section 100 of the Civil Procedure Code, it is
necessary for us to take note as to whether in the
instant facts the High Court has breached the said
settled position. To that extent the factual aspects
and the evidence tendered by the parties has already
been noted above in brief. Further, what is distinct in
the present facts of the case is that the finding
rendered by the learned Munsif (trial court) and by
the learned District Judge (first appellate court) are
divergent. The trial court on taking note of the
pleadings and the evidence available before it was of
the opinion that the plaintiff has failed to prove
exclusive possession and, in such light, held that the
entitlement for permanent injunction has not been
established. While arriving at such conclusion the
trial court had taken note of the right as claimed by
the plaintiff and in that background had arrived at
the conclusion that except for the say of the plaintiff
as PW 1 there was no other evidence. On the
documentary evidence it was indicated that the kist
receipts at Ext. A-5 series would not establish
possession merely because the name has been
subsequently substituted in the patta records and
the kist had been paid.
15. As against such conclusion, the first appellate
court in fact has placed heavy reliance solely on the
kist receipts which in fact had led the first appellate
court to arrive at the conclusion that the continuous
payment of kist would indicate that the plaintiff was
also in possession of the property. When such
divergent findings on fact were available before the
High Court in an appeal under Section 100 of the
Civil Procedure Code though reappreciation of the
evidence was not permissible, except when it is
perverse, but it was certainly open for the High Court
to take note of the case pleaded, evidence tendered,
as also the findings rendered by the two courts which
was at variance with each other and one of the views
taken by the courts below was required to be
approved."
31. Following the law declared by Hon'ble Supreme
Court, the First Appellate Court rightly, reversed the
judgment and decree of Trial Court and addressed all the
grounds urged by the defendants with regard to principle
relating to frustration, and law of limitation as well as
recorded the finding with regard to the execution of
registered Lease Deed at Ex.P2 and the Agreement dated
28.06.1986 (Ex.P3) and therefore, it would not be
appropriate to interfere with the well reasoned judgment
and decree passed by the First Appellate Court, which is in
consonance with the fact situation arising in the instant case
and therefore, the judgment and decree passed by the First
Appellate Court is required to be confirmed in this appeal.
In the result, I pass the following:
ORDER
i) The RSA No.2323 of 2018 and RSA
No.2324 of 2018 are hereby dismissed;
ii) Judgment and decree dated 18.08.2018
passed in Regular Appeal Nos.110 of 2017 and
120 of 2017 on the file of the VIII Additional
District and Sessions Judge, Bengaluru Rural
District, Bengaluru is hereby confirmed.
iii) Judgment and decree dated 28.03.2017
passed in Original Suit No.1255 of 2006 on the
file of the Principal Senior Civil Judge,
Bengaluru Rural District, Bengaluru is set-
aside; consequently, suit in Original Suit
No.1255 of 2006 is hereby decreed.
SD/-
(E.S.INDIRESH)
JUDGE
SB
