Telangana High Court
M/S Name Constructions Pvt Ltd vs Vakiti Ram Reddy on 18 April, 2024
Author: G. Radha Rani
Bench: G. Radha Rani
THE HONOURABLE DR.JUSTICE G. RADHA RANI
SECOND APPEAL No.190 of 2023
JUDGMENT:
This Second Appeal is filed by the appellant - plaintiff aggrieved by the
judgment and decree passed in A.S.No.56 of 2017 dated 07.03.2022 by the
learned V Additional District & Sessions Judge, Bhongir confirming the
judgment in O.S.No.290 of 2008 dated 03.09.2013 passed by the learned
Principal Junior Civil Judge, Bhongir.
2. The plaintiff filed a suit for specific performance of agreement of sale
dated 01.09.1992. The plaintiff was a company incorporated under the
provisions of the Companies Act, 1956. It was doing business in real estate,
development and construction activities. The case of the plaintiff was that the
defendant approached the plaintiff company to sell his agricultural land bearing
Survey No.542 Part to an extent of Ac.1-30 guntas situated at Kondamadugu
Village of Bibinagar Mandal, Nalgonda District. The plaintiff entered into an
agreement of sale with the defendant on 01.09.1992 for a total sale
consideration of Rs.49,000/- @ Rs.28,000/- per acre. On the date of execution
of agreement of sale, the plaintiff paid an advance amount of Rs.20,000/-
through a crossed cheque bearing No.310490 dated 01.09.1992 drawn on
Syndicate Bank, Picket Branch, Secunderabad towards part payment of the sale
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consideration. The defendant acknowledged the receipt and also issued a
separate receipt. The balance amount of sale consideration was required to be
paid at the time of execution and registration of the sale deed, which was
stipulated to be completed within a period of six months or to be extended
further on mutual consent. However, time was not the essence of the contract.
On the request of the defendant, the plaintiff paid the balance amount of sale
consideration of Rs.29,000/- on 07.09.1992 through a cheque bearing
No.330350 drawn on Syndicate Bank, Picket Branch, Secunderabad. The
defendant acknowledged the receipt and also issued a separate receipt.
3. As per the sale agreement, the vendor / defendant shall produce Income
Tax clearance certificate from the Income Tax Department, so that the
Registration Authorities would not object for registering the sale deed in favor
of the plaintiff. The vendor / defendant also undertook to pay land revenue,
cess and other sums payable for the said land till the date of completion of the
sale transaction. The vendor / defendant also undertook to produce documents
of title to establish that the vendor had clear and marketable title to the lands
agreed to be sold and also promised to produce non-encumbrance certificate,
patta, certified copies of pahanies, passbooks, title deeds and other relevant
documents to the plaintiff company prior to the execution of registration of
document. On payment of entire sale consideration, since September 1992, the
plaintiff was demanding the defendant to fulfill the above conditions of
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obtaining Income Tax clearance certificate, production of title deeds and other
relevant documents and production of land revenue receipts in token of up-to-
date payments of land cess in respect of the suit schedule land. The defendant
went on postponing the fulfillment of the said terms of the agreement on one
pretext or other. Vexed with the indifferent attitude of the defendant, the
plaintiff issued a legal notice to the defendant on 14.06.2008, but the same was
returned on 24.06.2008 with an endorsement "out of station". The defendant
was avoiding service of notice. The plaintiff apprehended that non-performance
of the contract on the part of the defendant was due to rise in the prices of the
land rates in and around the suit schedule properties, which was due to the
announcement by the Government of Andhra Pradesh for the establishment of
Nizam's Institute of Medical Sciences. As the defendant was avoiding to
execute the sale deed, left with no other remedy, the plaintiff filed the suit for
specific performance and as an alternative relief sought for refund of the amount
of Rs.49,000/- with interest @ 18 % per annum from the last date of payment
i.e. on 07.09.1992.
4. The defendant received notice, caused appearance, but, due to non-filing
of the written statement was set ex-parte.
5. The plaintiff examined himself as PW.1 and got examined another
witness, who signed on the agreement of sale and on the receipts as PW.2. He
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got marked the copy of memorandum and articles of Association of his
company as Ex.A1, the agreement of sale dated 01.09.1992 as Ex.A2, the
receipt dated 01.09.1992 as Ex.A3, the receipt dated 07.11.1992 as Ex.A4, the
office copy of the legal notice dated 14.06.2008 as Ex.A5, the returned un-
served postal cover as Ex.A6, and the copy of the authorization letter as Ex.A7.
6. The trial court i.e. the learned Principal Junior Civil Judge, Bhongir on
considering the evidence on record observed that there were no boundaries of
the suit schedule property mentioned in Ex.A2 agreement of sale. Without
boundaries, the property is not identifiable and no executable decree could be
passed basing on the said document and held that the plaintiff failed to prove
that Ex.A2 pertained to the plaint schedule property within the boundaries stated
therein. The trial court also observed that the plaintiff failed to prove his
"readiness and willingness" in performing his part of the contract and waited till
lapse of 16 years for issuing notice to the defendant. As per Ex.A2, the sale
should be completed within a period of six months, which could be extended
with mutual consent. The period of limitation would start from the date of
expiry of the said six months stipulated period that was fixed for performance as
per the first limb of Article 54 of the Limitation Act. There was no evidence on
record to establish that the six months time was subsequently extended further
by mutual consent by both the parties. As such, the suit claim was barred by
time. The trial court rejected the contention of the learned counsel for the
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plaintiff that the period of limitation would start running from the date of refusal
of the legal notice and observed that Ex.A5 legal notice was not at all served
upon the defendant, as the same was returned un-served with an endorsement "7
days absent", which was marked as Ex.A6 and held that it could not be said that
the defendant deliberately avoided service, but in fact, there was no service of
Ex.A5 legal notice on the defendant. Thus, the trial court dismissed the suit as
barred by time and also refused to grant the alternative relief of refund of the
amount.
7. Aggrieved by the said dismissal of the suit, the plaintiff preferred an
appeal. The appeal was heard by the learned V Additional District & Sessions
Judge, Bhongir. Vide judgment and decree dated 07.03.2022, the Appellate
Court also confirmed the judgment of the trial court in dismissing the suit. The
Appellate Court also observed that on a perusal of Article 54 of the Schedule of
the Limitation Act, when no time was fixed for performance of the agreement,
the cause of action would accrue on coming to know of the refusal to perform.
But the very fact that notice under Ex.A5 was given after 16 years was
something which could not be condoned and could not be accepted as a vigilant
action on the part of the appellant for seeking the relief and enforcing the rights
under Ex.A2. The Appellate Court observed that during the hearing of the
appeal, a registered GPA was marked as Ex.A8, but held that the appellant had
not explained as to how the said document was relevant to the facts of the case.
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Even if the respondent executed Ex.A8 and empowered the GPA N.Gopal
Naidu to sell the suit schedule property when the appellant failed to explain why
he did not invoke Ex.A8 and did not get the document registered in his favor
instead of filing the suit and seeking the relief from the Court, rejected the claim
of the appellant both for the relief of specific performance and also for the relief
of refund of the amount purported to be paid by him to the respondent under
Exs.A3 and A4. The Appellate Court also imposed costs on the appellant to be
paid to the Mandal Legal Services Authority, Bhongir.
8. Aggrieved by the above judgments of the learned Principle Junior Civil
Judge dated 03.09.2013 in O.S.No.290 of 2008 and of the learned V Additional
District & Sessions Judge in Bhongir in A.S.No.56 of 2017 dated 07.03.2022
confirming the dismissal of the suit filed by him, the plaintiff preferred this
Second Appeal raising a substantial question of law that whether the finding of
the trial court and the first appellate court that the suit suit was barred by
limitation under Article 54 of the Schedule of the Limitation Act was tenable
and without considering the evidence adduced by the plaintiff, coming to the
conclusion that the case of the defendant was probable would amount to
perversity leading to miscarriage of justice.
9. Heard the learned counsel for the appellant on the proposed substantial
question of law.
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10. The general rule is that the High Court will not interfere with the
concurrent findings of the courts below. But it is not an absolute rule. Some of
the well recognized exceptions are: 1) Where the courts below have ignored
material evidence or acted on no evidence, 2) The Courts have drawn wrong
inferences from the facts by applying the law erroneously or 3) The Courts have
wrongly cast burden of proof.
11. The phrase "substantial question of law" as occurring in the amended
Section 100 of CPC is not defined in the Code of Civil Procedure. However,
the word "substantial", as qualifying question of law, means of having substance
esstential, real, of sound worth, important or considerable. It is to be
understood as something in contra distinction with technical, of no substance or
consequence, or academic merely. A question of law having a material bearing
on the decision of the case, a question answer to which affects the rights of the
parties to the suit will be a substantial question of law. Where the legal position
is clear, either on account of express provisions of law or binding precedents,
but the courts below has decided the matter, either ignoring or acting contrary to
such legal principle, the substantial question of law arises not because the law is
still debatable, but because the decision rendered on a material question violates
the settled position of law. Framing of substantial question of law at the time of
admission is a pre-requisite for hearing the Second Appeal.
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12. As seen from the facts of the case, both the courts below have dismissed
the suit and appeal, as the suit claim was barred by time. As seen from the
averments of the plaint, the plaintiff entered into an agreement of sale with the
defendant on 01.09.1992 for purchase of an agricultural land bearing Survey
No.542 Part to an extent of Ac.1-30 guntas situated at Kondamadugu Village of
Bibinagar Mandal, Nalgonda District for a total sale consideration of
Rs.49,000/- and paid an advance amount of Rs.20,000/- on the date of
agreement of sale itself through a cheque bearing No.310490 and the defendant
acknowledged the same vide receipt dated 01.09.1992, marked under Ex.A3.
He further stated that he paid the balance amount of Rs.29,000/- on 07.09.1992
i.e. within a week through a cheque bearing No.330350, which was
acknowledged by the defendant vide receipt dated 07.11.1992, marked under
Ex.A4. But the plaintiff waited for issuance of notice to the defendant till June,
2008. As per the averments of the plaint, he issued the legal notice to the
defendant on 14.06.2008 i.e. after a period of 16 years. But the same was also
not served on the defendant and it was returned un-served on 24.06.2008 with
an endorsement "out of station".
13. Both the trial court and the appellate court considered Article 54 of the
Limitation Act, wherein the time for filing the suit for specific performance was
prescribed as:
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Description Period of limitation Time from which period
of Suit begins to run
For specific Three years The date fixed for the
performance performance, or, if no such
of a contract date is fixed, when the
plaintiff has notice that
performance is refused.
14. Thus, from a reading of the aforesaid Article, it is clear that when the date
is fixed for performance, limitation is three years from such date. If no such
date is fixed, the period of three years is to be computed from the date when the
plaintiff has notice of refusal. The time fixed for performance of the suit is six
months, as per the agreement marked under Ex.A2. When the contention of the
plaintiff was that he performed his part of the contract and paid the entire
amount as agreed under the contract by 07.09.1992 itself, he ought not to have
waited for a period of 16 years for issuing the notice. As per his contention
itself, he issued the notice on 14.06.2008. The plaintiff had not explained any
reason for such inordinate delay of 16 years in issuing the notice. As the
agreement would disclose that the time fixed for performance as six months
period, then the suit has to be filed within three years from the expiry of 6
months period under the first limb of Article 54 of the Limitation Act, 1963.
The suit filed beyond three years was barred by limitation. No extension of
time was pleaded and established by the plaintiff. Only in a case where no time
for performance was fixed, the Court has to find the date on which the plaintiff
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had notice that the performance was refused. Even when no limitation is
prescribed by the statute, the Courts apply the doctrine of delay / latches /
acquiescence and non-suit the litigants who approach the Court belatedly
without justifiable explanation. In the present case, considering that no
justifiable explanation was given by the plaintiff for filing the suit with an
ordinate delay of more than 16 years, both the trial court as well as the appellate
court dismissed the same. This Court does not find any substantial questions of
law involved in deciding the Second Appeal.
15. In the result, the Second Appeal is dismissed at the stage of admission
with costs of Rs.10,000/- to be paid to the High Court Legal Services
Committee, Hyderabad within a period of one month from the date of receipt of
a copy of this judgment.
As a sequel, miscellaneous applications pending in this appeal, if any
shall stand closed.
____________________
Dr. G.RADHA RANI, J
Date: 18th, April 2024
Nsk.
