Full Judgment Text
2008:BHC-OS:14450
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IN THE HIGH COURT OF JUDICATURE
AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBERSUMMONS NO.1323 OF 2008
IN
SUIT NO.2341 OF 2007
M/s. Anand Laxmi Enterprises ...Plaintiffs
Vs.
Vasant Balu Mhatre & Ors. ...Defendants
Mr.Y.S.Jahagirdar , Sr. Advocate a/w. Mr. Nitin Malye
i/b.Subhash Pradhan for Plaintiff
Mr.Zubin Behramkamdin i/b.Sheela K. Mistry for
Respondents 1 to 18.
Mr.Dhiren Shah i/b. Vimla & Co., for Defendant Nos.12 & 13
CORAM: SMT.ROSHAN DALVI, J.
TH
DATED: 30 SEPTEMBER, 2008
ORAL ORDER
1. This Chamber Summons is for rejecting the plaint as
barred by the Law of Limitation.
2. The Chamber Summons is taken out under the
provisions of Order VII Rule 11(d) of the C.P.C . The said
Rule runs thus:
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11. Rejection of plaint – The plaint shall be
rejected in the following cases:
(a). .....
(b). .....
( c ). .....
(d). where the suit appears from the statement
in the plaint to be barred by any law”.
3. This Suit is stated to be barred by the Law of Limitation.
Consequently, the statement in the plaint would have to be
read to see whether this Suit appears to be barred by the law
of limitation.
4. The Plaintiffs entered into an agreement with the
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Defendants 1 to 11 on 30 April, 1989. The Plaintiffs were to
develop the property of Defendants 1 to 11. The property
was tenanted. The Plaintiffs were to settle with the tenants
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and pay the consideration under the contract.
The relevant part of the averments in the plaint read as a
whole must be considered parawise.
a) Paragraph 12: no progress could be made with the
tenants.
Paragraph 13: the Plaintiffs were not in a position to
b)
develop the suit premises despite having incurred
substantial costs and expenses.
c) Paragraph 15: in July / August 2002 Defendants
Nos.1 and 2 considered to develop their properties.
The Defendants requested Plaintiffs to relinquish
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their rights under the agreement dated 30 April,
1989. Certain meetings were held between the
parties.
d) Paragraph 16: it was mutually agreed that Rs.11
lakhs be refunded to the Plaintiffs along with the
costs and expenses incurred by the Plaintiffs
pursuant to the agreement for development dated
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30 April, 1989 in consideration of which the
Plaintiffs will release and relinquish all their rights
and interests in the suit property. The Plaintiffs
agreed to accept Rs.11 lakhs by way of settlement.
The Defendants have not paid that amount or any
part thereof.
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e) Paragraph 17: in February, 2005 the Plaintiffs were
shocked to see the structure on the suit property
having been demolished and a board of Defendant
No.13 being put up on the suit property.
f) Paragraph 18: the Plaintiffs called upon the
Defendants to stop the construction and that they
are ready and willing to perform their part of the
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agreement dated 30 April, 1989. They claim that
the further agreement between the Defendants 1 and
2 and Defendant No.13 is not binding upon them.
g) Paragraphs 18 to 23 show the correspondence
between the Attorneys.
h) Paragraph 23: the Defendants have failed and
neglected to pay Rs.11 lakhs as per the agreement
entered into in August, 2002, which fact was recorded in
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the Plaintiffs' letter dated 10 June, 2006 stating that
the Plaintiffs would adopt proceedings for recovery of
that amount.
Paragraph 26: takes exception to the Deed of
i)
Conveyance executed by Defendants 1 and 2 and
Defendant No.12.
Paragraph 28: the Defendants failed and neglected
j)
to pay Rs.11 lakhs which the Plaintiffs are now not
bound to accept. The Plaintiffs claim damages as
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mentioned therein.
k) Paragraph 29: the Advocate for Defendants assured
to pay, but the Defendants 1 and 2 did not pay the
said amount.
l) Paragraph 30: the Plaintiffs could not develop the
property due to the unreasonable attitude of the
Defendants and occupants.
m) Paragraph 31: the construction put up by the
Defendant No.13 is unauthorised and illegal and
without right of development and construction.
Paragraph 32: shows the Plaintiffs' right under the
n)
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initial agreement dated 30 April, 1989 which the
Plaintiffs seek to specifically enforce.
Paragraph 36: shows the damages claimed by the
o)
Plaintiffs.
p) The rest of the paragraphs show submissions with
regard to ancillary reliefs.
5. The Plaintiffs' prayers are essentially two fold: for
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declaration of the validity of the agreement dated 30 April,
1989, executed 18 years prior to the filing of the Suit and for
damages upon the breach of that agreement, which came to
be claimed upon the failure and neglect to pay under the
agreement entered into in August, 2002. The remaining
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reliefs are ancillary to the aforesaid reliefs. Though a feeble
attempt to show readiness and willingness to perform the
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Plaintiff's part of the agreement dated 23 April, 1989 is
made, the suit does not claim specific performance of that
contract.
6. Upon reading the statement in the plaint it is clear that
the Plaintiffs initial rights commenced under the agreement
th
dated 30 April, 1989. The Plaintiffs have not shown breach
of that agreement by the Defendants in any part of the
plaint. The Plaintiffs have in fact shown how they
themselves could not perform their part of the agreement –
because they could not settle with the tenants and
occupants.
7. The plaint further shows that pursuant to an oral
agreement in July/August 2002 the Plaintiffs were to be paid
off Rs.11 lakhs and they were to relinquish their rights in the
suit property. This was to be in full and final settlement of
the Plaintiffs claim in the suit property. This oral agreement
would tentamount to a Novatio between the parties so that
the earlier Agreement/Contract would be replaced by the
later settlement/arrangement. That having not been paid
the Plaintiffs claim damages.
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8. The limitation of the suit for obtaining the declaration
sought for validity of an Agreement is 3 years from the date
when the right to sue first accrues under Article 58 of Part III
of Schedule I of the Limitation Act, which is for suits relating
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to declarations. The right to sue first accrued on 30 April,
1989. There is nothing to show that the Plaintiffs sought
performance of that agreement from the Defendants as a
valid agreement.
9. It is contended that this suit is intrinsically for specific
performance of the contract and hence the limitation is 3
years from the date fixed for performance or when
performance is refused under Article 54 or Part II of
Schedule I of the Limitation Act, which deals with suits
relating to contracts. In this case the date for performance is
not shown to have been fixed. The date of refusal of
performance by the Defendants is also not shown by the
Plaintiffs. In fact the wording of the relief is for declaration
that the agreement is valid and subsisting, but not for
specific performance. Hence, Article 58 would clearly apply
to the exclusion of Article 54 mentioned above.
10. The suit is filed more than 17 years after the right to sue
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accrued with regard to the declaration of the validity of the
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agreement dated 30 April, 1989.
11. Even if the suit is taken to be for reliefs under the oral
agreement stated to be entered into in July / August 2002
for payment of Rs.11 lakhs to the Plaintiffs in full and final
settlement of the claim and that having not been paid for
damages of Rs.50 lakhs pending the suit, the damages which
are claimed are shown to be for breach of the agreement
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dated 30 April, 1989. The right to sue for such damages
would accrue within 3 years of the agreement for failure of
which the damages are claimed. The suit is clearly barred
by the law of limitation for claim of such damages for breach
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of the agreement dated 30 April, 1989.
12. In the case Hardesh Ores (P) Ltd Vs. Hede & Co.
(2007) 5 SCC 614 the principles of law relating to the
invocation of Order 7 Rule 11 of the C.P.C as an expedient
mode of disposing of suits filed clearly after the period of
limitation is laid down. In that case the Plaintiff claimed
automatic renewal of the lease, which was refuted by the
Defendants 4 years before. Aside from holding that in that
case, there was no such automatic renewal as contended, it
was held that though the suit was filed ostensibly only for
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injunction for enforcement of negative covenants, it was in
fact for specific performance of the initial lease which stood
expired by efflux of time, there being no automatic renewal.
Hence the suit was held, as seen from a reading of the plaint
as a whole to be barred by the Law of Limitation.
13. The Supreme Court laid down the essentials of
consideration of the case of the Plaintiffs in para 25 of the
judgment thus :
“For the said purpose the averments made in the
plaint in their entirety must be held to be
correct. The test is whether the averments made
in the plaint, if taken to be correct in their
entirety, a decree would be passed. The
averments made in the plaint as a whole have to
be seen to find out whether clause (d) of Rule 11
of Order 7 is applicable. It is not permissible to
cull out a 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.”
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14. Further, for considering the usage of the Salutary
provision in Order VII Rule 11 of the C.P.C as a mode of case
management, the Supreme Court referred to the
observations in the case of T.Arivandandam Vs. T.V.
Satyapal (1977) 4 SCC 467 to prevent abuse of judicial
process by parties filing suits well after the period of
limitation allowed to them to sue. In that judgment, as
extracted at page 630 in the case of Hardesh Ores (supra), it
is observed that such suits are “ flagrant misuse of the
mercies of law in receiving plaints Hence is the enjoinment
”.
of the usage of Order VII Rule 11 in appropriate cases. The
conclusion in the said para eloquently makes out the case
for rejection of such plaints ..... “ An activist Judge is the
answer to irresponsible Law Suits ” .
15. This case is essentially for specific performance of an
agreement entered into and not enforced or complied for 17
years before filing of the Suit. Though not specifically
claimed, recovery of damages for failure to comply with the
agreement dated July/August 2002, not shown to be
executed in writing, would also be required to be filed within
3 years of the said agreement. The Suit is not filed even
within such time. The relief is claimed for declaration of the
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validity of the initial agreement.
16. Hence, it can be seen that the claim in Suit is essentially
based upon the agreement of 1989 whether for declaration of
its validity or for damages upon its breach. The suit for such
reliefs based upon the aforesaid statements in the plaint is,
therefore, clearly barred by the law of limitation.
17. Further statements in the plaint relating to the Plaintiffs'
knowledge of the construction or the rights created in favour
of Defendants 12 and 13 by Defendants 1 and 2 are ancillary
to the reliefs sought by the Plaintiffs against Defendants 1
and 2. The period of limitation cannot be extended or signed
by the acts of Defendants 1 and 2 with regard to other
transactions which have been executed well after the period
of limitation to sue expired. Had these transactions also
taken place within the period of limitation, i.e, within 3 years
of the accrual of cause of action in favour of the Plaintiffs
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being 30 April, 1989, the period of limitation in a given case
may have been so extended. No period of limitation can be
extended after the claim gets barred by limitation. A
specified period is allowed by law to parties to sue to afford
inherent protection to parties to a contract who have not
been sued within the period of limitation to deal with their
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properties and transaction with further parties thereafter.
Limitless extension of time to sue after the period specified in
law expires would cause tremendous prejudice and injustice
to parties who seek to deal with their own properties after
contracting with a party who has allowed these rights to
lapse by limitation. The very expression “Limitation” implies
limitation of time to sue. The right to sue cannot go on
endlessly. If that were allowed a very strange, unjust
consequence would arise. No party would be able to enter
into a transaction even after the period of limitation in Law
expired if the earlier transaction did not materialise. This
would constitute a impediment on the Defendants' vested
rights.
18. Consequently, the statements in the plaint must be read
as a whole. Reading such statements the cause of action
which initially accrued to the Plaintiffs must be seen. How
the Plaintiffs sought to enforce their legal rights within the
period of limitation from the date of the accrual of such
cause of action has to be seen. Further statements in the
plaint relating to whatever may have transpired between the
Defendants and further contracting parties after their claim
in favour of the Plaintiffs got barred by limitation cannot
show the extension of the period of limitation. Hence the
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statement in the plaint read as a whole shows that the suit
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got barred by the law of limitation within 3 years from 30
April, 1989 itself. Even if the further agreement between the
parties of July/August 2002 is to be considered, such
further claim also got barred within 3 years of August 2002.
The suit having been filed in 2007 is seen to have been filed
well after the bar of limitation was crystalised. Such period
of limitation cannot be further extended by acts of
Defendants 1 and 2 who were thereafter free to deal with
their property absolutely with further contracting parties.
19. It is, therefore, clear that the suit appears to be barred
by the law of limitation as seen from the statements in the
plaint. The plaint, therefore, is rejected under Order VII Rule
11(d) of the C.P.C .
(SMT. ROSHAN DALVI, J.)
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