Telangana High Court
S.P.R. Publications P Limited vs M/S. Ganapathi Industries on 27 September, 2024
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
HON'BLE JUSTICE NAGESH BHEEMAPAKA
A.S.No.493 of 2024
Counsel for the appellant: Sriram Polali
JUDGMENT:
(Per Justice Moushumi Bhattacharya)
The Appeal Suit was found to be maintainable by an order
dated 11.09.2024 and the Registry was accordingly directed to
number the present Appeal Suit.
2. The question before the Court now is whether the prayer for
setting aside the impugned order dated 25.06.2024 and remanding
the matter to the Trial Court for a fresh hearing upon issuing notice
to the defendants can be allowed. Learned counsel appearing for
the appellant has argued for an order of remand.
3. The appellant is the plaintiff before the Trial Court who filed a
Suit for specific performance of contract based on an Agreement of
Sale dated 05.11.2007. According to a sequence of events
presented by counsel appearing for the appellant, the Agr\eement
of Sale dated 05.11.2007 was executed between the appellant and
the respondent No.1/defendant No.1 for sale of the suit schedule
property for a total sale consideration of Rs.60,00,111/- out of
which the appellant paid a sum of Rs.18,00,000/-. The appellant
was to pay the balance sale consideration at the time of registration
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of the Sale Deed. The appellant paid a total sum of Rs.22,50,000/-
to the respondent No.1 and expressed its readiness and willingness
to pay the balance sale consideration of as agreed by the parties.
4. Two Suits were filed by third parties in 2007 against the
respondent Nos.1-3 for recovery of money. The appellant was also
arrayed as a party in the said Suits. The third parties alleged that
the suit schedule properties had been mortgaged to them.
Although the appellant was put to notice of the two Suits, the
respondent No.1-3 assured the appellant that they will settle the
disputes and execute the Sale Deed in favour of the appellant. The
appellant believed in this representation. The third parties and the
respondent Nos.1-3 settled the above Suits by way of a Lok Adalat
Award dated 18.08.2010. The third parties thereafter filed
Securitization Appeal involving the suit schedule property. The
respondent No.1-3 again requested the appellant to wait for the
outcome of the Securitization Appeal and promised to receive the
balance sale consideration and execute Sale Deed in favour of the
appellant. The appellant again believed in this representation and
waited for the outcome of the Securitization Appeal. In October,
2023 the appellant came to know upon verifying the Encumbrance
Certificate that the respondent Nos.1 and 2 had executed
transactions partitioning the suit schedule property and alienating
a part thereof in favour of the respondent Nos.4 and 5. The
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appellant immediately issued a legal notice on 31.10.2023 calling
upon the respondents to receive the balance sale consideration and
execute the registered Sale Deed. The respondents did not respond
to the legal notice despite receiving the same. The appellant filed
the Suit in June, 2024 seeking specific performance of the
Agreement of Sale dated 05.11.2007 and refund of money in the
alternative. The impugned order was passed on 25.06.2024
rejecting the Suit on the ground that the Suit is barred by
limitation.
5. The contention of learned counsel appearing for the
appellant/plaintiff is that the impugned order is liable to be
rejected on several grounds including that the Trial Court
selectively read parts of the plaint for coming to the conclusion that
the appellant had knowledge of the litigation involving the suit
schedule property since the appellant was made a party in the said
Suits. Counsel relies on Article 54 of The Limitation Act, 1963 (the
1963 Act) in support of the relevant timelines for filing a Suit for
specific performance.
6. It is settled law that a Court must only look at the statements
made in the plaint for the purpose of rejecting a plaint under Order
VII Rule 11 of The Code of Civil Procedure, 1908 (CPC). In the
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present case, the Trial Court proceeded to dismiss the appellant's
Suit under Order VII Rule 11(d) on the ground of limitation.
7. Article 54 of The Limitation Act, 1963 provides as under:
Description of suit Period of limitation Time from which period
begins to run
Suit for Specific Three years The date fixed for the
Performance of a performance, or, if no such
contract. date is fixed, when the
plaintiff has notice that
performance is refused.
8. In the present case, the Agreement of Sale dated 05.07.2007
does not provide for any fixed timeline for execution of Sale Deed.
This was stated in paragraph 6 of the plaint. Since this is the
pleading in the plaint, the second limb of Article 54 of the
Limitation Act, 1963 will be attracted which means that the
question of limitation can only be adjudicated after evidence is led
on the date of notice of refusal and the Court records a finding on
that issue : Gunwantbhai Mulchand Shah Vs. Anton Elis Farel and
Others 1.
9. In Gunwantbhai, the Supreme Court held that where no time
for performance of contract is fixed, the Court must find the date
on which the plaintiff had notice of refusal of performance and
thereafter ascertain whether the Suit was filed within 3 years from
the date of notice as mandated under Article 54 of the 1963 Act.
1(2006) 3 SCC 634
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The Supreme Court reiterated this position in Urvashiben Vs.
Krishnakant Manuprasad 2.
10. Since the Agreement in question executed between the
appellant and the respondent No.1 and 2 does not have a date
within which the Agreement was to be executed, the Trial Court
should have adduced evidence on the date when the
appellant/plaintiff had notice of the defendant's refusal to perform
and thereafter concluded the issue of limitation. Without resorting
to this course, the Trial Court came to the unilateral conclusion
that the Suit was barred by limitation on the pleadings in the plaint
and on the assumption that the plaintiff's knowledge can be
presumed from the fact of the litigation in respect of the suit
schedule property where the plaintiff was arrayed as a party.
11. It is also evident from the impugned order that the Trial
Court resorted to selectively consider the pleadings of the plaint
which averred that the plaintiff was a party to the Suits filed in
2007. We however find from paragraphs 11 and 13 of the plaint
that the plaintiff received summons in the Suits and questioned
defendant Nos.1 -3 with reference to the disputes. The defendants
promised the plaintiff that the above disputes would be settled out
of Court and also assured that the defendants would execute and
2(2019) 13 SCC 372
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register the Sale Deed in the plaintiff's favour. Paragraph 11
further states that the plaintiff believed the representations of the
defendant Nos.1-3 and agreed to wait.
12. Likewise, paragraph 13 of the plaint also states that the
plaintiff came to know of the Securitization Appeal in 2017. The
later part of the paragraph further states that the defendant Nos.1-
3 requested the plaintiff to wait till disposal of the Securitization
Appeal and promised to receive the balance sale consideration from
the plaintiff and execute registered Sale Deed in the plaintiff's
favour. Paragraph 13 also states that the plaintiff believed the
representation of the defendant Nos.1 - 3 and agreed to wait.
13. It is clear from a comparison of paragraphs 11 and 13 of the
plaint and paragraphs 14 and 15 of the impugned order that the
Trial Court only took note of the first part of the paragraphs in the
plaint and concluded that the plaintiff had failed to take any steps
despite knowledge of the litigation and the Securitization Appeal.
14. It appears from the impugned judgment that the Trial Court
glossed over the later parts of the relevant paragraphs of the plaint
wherein it was averred that the plaintiff believed the
representations made by the defendants with regard to honouring
the defendants' obligations after settlement of the Suits and the
Securitization Appeal.
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15. There can be no dispute of the settled position in law being
that the Court should read a plaint in its totality for considering an
application for rejection of the plaint under Order VII Rule 11 of the
CPC. The statements made in the plaint cannot be read in
isolation de hors the context, divorced from the other statements or
read selectively to suit the purpose of the assessment: Sri
Biswanath Banik Vs. Sulanga Bose 3. The Supreme Court in that
decision relied on Ram Prakash Gupta Vs. Rajiv Kumar Gupta 4 to
hold that the Court has to go through the entire plaint averments
and cannot reject the plaint only by reading a few lines and
ignoring the other relevant parts.
16. We also find substance in the argument made on behalf of
the appellant that the date of knowledge of the plaintiff/appellant
in the present case would be 31.10.2023 when the appellant issued
the legal notice to the respondents calling upon the latter to receive
the balance sale consideration. The legal notice was issued on the
appellant coming to know from verification of the Encumbrance
Certificate in October 2023 that the respondents had partitioned
the suit schedule property and executed registered Sale Deed in
June and April 2023 in favour of respondent Nos.4 and 5
respectively.
3(2022) 7 SCC 731
4 (2007) 10 SCC 59
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17. Above all, the impugned order dated 25.06.2024 was passed
in an un-numbered Suit. The Trial Court proceeded to reject the
plaint in the Suit on the ground that the Suit was barred by
limitation. In this context, we appreciate the fair stand taken by
counsel appearing for the appellant who requested that the matter
be sent back to the Trial Court for a reconsideration on the factual
aspects upon the Suit being numbered. Counsel submits that the
defendants/ respondents should be put to notice so that the
opportunity to contest the Suit is not taken away.
18. In the background of the aforesaid submission, we record
that giving notice to the respondents/defendants of the Appeal Suit
will only prolong the proceedings which is not required since we
have found sufficient grounds to interfere with the impugned order.
The Trial Court will have a better opportunity of adjudicating on
the merits if the defendants enter appearance and contest the Suit.
We find that a learned Single Judge of the erstwhile High Court of
Andhra Pradesh at Hyderabad had taken a similar stand in
Ganesula Uma Parvathi Vs. Ayitam Rama Swamy 5 where the Court
opined that the Trial Court had committed error in concluding that
the order in Execution Application operated as res judicata and
52011 (2) UPLJ 33 (HC)
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accordingly directed the Trial Court to number the Suit and
proceed thereafter in accordance with law.
19. A.S.No.493 of 2024 is allowed for the above reasons. The
impugned order dated 25.06.2024 is set aside. We direct the Trial
Court to number the Suit and order notice to the
respondents/defendants. The Trial Court shall decide the merits
on contest and pass appropriate orders after hearing both the
parties. Since the plaintiff filed the Suit in June 2024 and the
order of rejection is of 25.06.2024, the Trial Court shall dispose of
the Suit/any Interlocutory Applications filed by the parties without
delay and as expeditiously as possible under the circumstances.
20. All connected miscellaneous applications are disposed of in
terms of this Judgment. There shall be no order as to costs.
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MOUSHUMI BHATTACHARYA, J
_________________________________
NAGESH BHEEMAPAKA, J
September 27, 2024
BMS
