While considering Rejection of Plaint the court has to go through the Plaint and documents filed.
The
Plaintiff have to discharge the onus of proof that the suit
was filed within the period of limitation If not the Plaint is
liable to be rejected under Order VII Rule 11 (d) of CPC.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9519 OF 2019
(Arising out of SLP (Civil) No.11618 of 2017)
DAHIBEN … Appellant
versus
ARVINDBHAI KALYANJI BHANUSALI
(GAJRA)(D) THR LRS & ORS. … Respondents
JUDGMENT
INDU
MALHOTRA, J.
1.
The present Civil Appeal has been filed to challenge the impugned
Judgment and Order dated 19.10.2016 passed by a Division Bench of the
Gujarat High Court, which affirmed the Order of the Trial Court,
allowing the application filed by Defendant Nos. 2 and 3/Respondent
Nos. 2 and 3 herein under Order VII Rule 11(d), CPC holding that the
suit filed by the Appellant and Respondent Nos. 9 to 13 herein
(hereinafter referred to as the “Plaintiffs”) was barred by
limitation.
2.
The subject-matter of the present proceedings pertains to a ARJUN
BISHT plot of agricultural land of old tenure, admeasuring
approximately 8701 sq. mtrs. in Revenue Survey No. 610, Block No.573
situated in village Mota Varachha, Sub-District Surat (hereinafter
referred to as the “suit property”) which was in the ownership of
the Plaintiffs.
3.
The land was under restrictive tenure as per Section 73AA of the Land
Revenue Code. The Plaintiffs filed an application dated 13.05.2008
before the Collector, Surat to obtain permission for selling the suit
property to Respondent No.1/Defendant No.1, which was non-irrigated,
and stated that they had no objection to the sale of the suit
property.
4.
The Collector vide Order dated 19.06.2009, after carrying out
verification of the title of the Plaintiffs, permitted sale of the
suit property, and fixed the sale price of the suit property as per
the jantri issued by the State Government @ Rs. 2000/- per sq. mtr.,
which would work out to Rs. 1,74,02,000/-. The Collector granted
permission for the sale subject to the terms and conditions contained
in Section 73AA of the Land Revenue Code. It was stipulated that the
purchaser shall make the payment by cheque, and reference of the
payment shall be made in the Sale Deed.
5.
After obtaining permission from the Collector, the Plaintiffs sold
the suit property to Respondent No.1 herein vide registered Sale Deed
dated
02.07.2009. Respondent No. 1 - purchaser issued 36 cheques for
Rs.1,74,02,000 towards payment of the sale consideration in favour of
the Plaintiffs, the details of which were set out in the registered
Sale Deed dated 02.07.2009.
6.
The Respondent No. 1 subsequently sold the suit property to
Respondent Nos. 2 and 3 herein vide registered Sale Deed dated
01.04.2013, for a sale consideration of Rs. 2,01,00,000/-.
7.
On 15.12.2014, the Plaintiffs filed Special Civil Suit No. 718/2014
before the Principal Civil Judge, Surat against the original
purchaser i.e. Respondent No. 1, and also impleaded the subsequent
purchasers i.e. Respondent Nos. 2 and 3 as defendants. It was inter
alia prayed that the Sale Deed dated 02.07.2009 be cancelled and
declared as being illegal, void, ineffective and not binding on them,
on the ground that the sale consideration fixed by the Collector, had
not been paid in entirety by Respondent No. 1.
The
Plaintiffs contended that they were totally illiterate, and were not
able to read and write, and were only able to put their thumb
impression on the Sale Deed dated 02.07.2009. The Sale Deed was
obtained without payment of full consideration. The Respondent No.1
had paid only Rs.40,000 through 6 cheques, and remaining 30 cheques
for Rs.1,73,62,000 were “bogus” cheques. The Plaintiffs prayed
for cancellation of the Sale Deed dated 02.07.2009, and also prayed
that the subsequent Sale Deed dated 01.04.2013 be declared as
illegal, void and ineffective; and, the physical possession of the
suit property be restored to the Plaintiffs.
8.
Respondent Nos. 2 and 3 filed an Application for Rejection of the
Plaint under Order VII Rule 11 (a) and (d) of the CPC, contending
that the suit filed by the Plaintiffs was barred by limitation, and
that no cause of action had been disclosed in the plaint. It was
inter alia submitted that the Plaintiffs had admitted the execution
of the Sale Deed dated 02.07.2009 in favour of Respondent No.1 before
the Sub-Registrar, Surat. The only dispute now sought to be raised
was that they had not received a part of the sale consideration. This
plea was denied as being incorrect.
It
was further submitted that if the Sale Deed dated 02.07.2009 was
being challenged, then the suit ought to have been filed within three
years i.e. on or before 02.07.2012. It was further submitted that
pursuant to the execution of the registered Sale Deed dated
02.07.2009, the Plaintiffs had participated in the proceedings before
the Revenue Officer for transfer of the suit property in the revenue
records in favour of Respondent No.1. On that basis, the suit
property had been transferred to Respondent No.1 vide Hakk Patrak
Entry No. 6517 dated 24.07.2009. Before certifying the said entry,
notice under Section 135D of the Land Revenue Code had been duly
served on the Plaintiffs, and ever since, Respondent No. 1 had been
paying the land revenue on the suit property, and taking the produce
therefrom.
Respondent
Nos. 2 and 3 further submitted that they had purchased the suit
property from Respondent No.1 after verifying the title, and
inspecting the revenue records. The Respondent No.1 had sold the suit
property vide a registered Sale Deed dated 01.04.2013, on payment of
valuable consideration of Rs. 2,01,00,000/-. Pursuant thereto, the
suit property was transferred in the name of Respondent Nos. 2 and 3
in the revenue records.
It
was further submitted that the Plaintiffs, with a view to mislead the
Court, had deliberately filed copies of the 7/12 extracts dated
20.07.2009, which was prior to the mutation being effected in the
name of Respondent No.1. It was submitted that the suit was devoid of
any merit, and clearly time-barred, and liable to be rejected.
9.
The Trial Court carried out a detailed analysis of the averments in
the plaint alongwith the documents filed with the plaint, including
the registered Sale Deed dated 02.07.2009, executed by the
Plaintiffs. The undisputed facts which emerged from the averments in
the plaint was that the suit property was of restrictive tenure under
Section 73AA of the Land Revenue Code. Since the Plaintiffs were in
dire need of money, and wanted to sell the suit property to
Respondent No. 1, they had filed an application before the Collector,
Surat on 13.05.2008 to obtain permission for sale of the suit
property. The Collector vide Order dated 19.06.2009 granted
permission to the Plaintiffs and fixed the sale price at Rs.
1,74,02,000/- which was to be paid through cheques. It was contended
in the plaint that the Respondent No. 1 had in fact paid only Rs.
40,000/-, and false cheques of Rs. 1,73,62,000/- were issued, which
remained unpaid.
On
a perusal of the registered Sale Deed dated 02.07.2009, [marked as
Exhibit 3/9] it was noted that the Plaintiffs had in fact accepted
and acknowledged the payment of the full sale consideration from
Respondent No.1, through cheques which were issued prior to the
execution of the Sale Deed, during the period 07.07.2008 to
02.07.2009.
As
per the Plaintiffs, the Sale Deed was executed on 02.07.2009 in
favour of Respondent No.1, which was registered before the Office of
the Sub-Registrar, for which the Plaintiffs would have remained
personally present. The transaction having been executed through a
registered document, was in the public domain, and in the knowledge
of the Plaintiffs right from the beginning.
The
Trial Court noted that there was no averment in the plaint that the
cheques had not been received by them. Once the cheques were received
by them, in the normal course, they would have presented the cheques
for encashment within 6 months. The Court held that had the
Plaintiffs not been able to encash 30 cheques, a complaint ought to
have been filed, or proceedings initiated for recovery of the unpaid
sale consideration. There was however, nothing on record to show that
the Plaintiffs had made any complaint in this regard for a period of
over
5 years.
The
Plaintiffs also failed to produce the returned cheques, their
passbooks, bank statements, or any other document to support their
averments in the plaint.
A
notice for transfer of the suit property in the revenue records under
Section 135D was served on the Plaintiffs, to which no objection was
raised. The name of Respondent No. 1 was entered into the revenue
records, which was certified by the Revenue Officer.
The
Trial Court held that the period of limitation for filing the suit
was 3 years from the date of execution of the Sale Deed dated
02.07.2009. The suit was filed on 15.12.2014. The cause of action as
per the averments in the plaint had arisen when the Defendant
No.1/Respondent No.1 had issued ‘false’ or ‘bogus’ cheques to
the Plaintiffs in 2009. The suit for cancellation of the Sale Deed
dated 02.07.2009 could have been filed by 2012, as per Articles 58
and 59 of the Limitation
Act, 1963. The suit was however filed on 15.12.2014, which was
barred by limitation. The suit property was subsequently sold by
Respondent No.1 to Respondent Nos. 2 and 3 by a registered Sale Deed
dated 01.04.2013. Before purchasing the suit property, the Respondent
Nos. 2 and 3 had issued a public notice on 14.08.2012. The Plaintiffs
did not raise any objection to the same.
The
Trial Court, on the basis of the settled position in law, held that
the suit of the Plaintiffs was barred by limitation, and allowed the
application
under Order VII Rule 11(d) CPC.
10.
Aggrieved by the Judgment dated 12.08.2016 passed by the Sr. Civil
Judge, Surat, the Plaintiffs filed First Appeal No.2324/2016 before
the High Court of Gujarat at Ahmedabad.
The
Division Bench of the High Court took note of the fact that the
Plaintiffs did not deny having executed the registered Sale Deed
dated 02.07.2009 in favour of Respondent No.1. In the said Sale Deed,
it was specifically admitted and acknowledged by the Plaintiffs that
they had received the full sale consideration. The Sale Deed
contained the complete particulars with respect to the payment of
sale consideration by Respondent No. 1 through 36 cheques, the
particulars of which were recorded therein. Since the execution of
the Sale Deed was not disputed, and the conveyance was duly
registered in the presence of the Plaintiffs before the Sub-
Registrar, the Sale Deed could not be declared to be void, illegal,
or ineffective.
The
suit property was subsequently sold by Respondent No. 1 in favour of
Respondent Nos. 2 and 3 vide registered Sale Deed dated 01.04.2013
for a sale consideration of Rs. 2,01,00,000/-.
Respondent
Nos. 2 and 3 were bona fide purchasers for valuable consideration.
The
present suit for cancellation of the Sale Deed was filed by the
Plaintiffs after a period of over 5 years after the execution of the
Sale Deed dated 02.07.2009, and 1 year after the execution of the
Sale Deed dated 01.04.2013 by Respondent No.1. It was noted that
prior to the institution of the suit on 15.12.2014, at no point of
time did the Plaintiffs raise any grievance whatsoever, of not having
received the full sale consideration mentioned in the Sale Deed dated
02.07.2009. It was for the first time that such an allegation was
made after over 5 years from the date of execution of the Sale Deed
dated 02.07.2009.
Since
the suit in respect of the Sale Deed dated 02.07.2009 was held to be
barred by law of limitation, the High Court was of the view that the
suit could not be permitted to be continued even with respect to the
subsequent Sale Deed dated 01.04.2013. The Plaintiffs had not raised
any allegation against Respondent Nos. 2 and 3, and there was no
privity of contract between the Plaintiffs and Respondent Nos. 2 and
3.
The
High Court rightly affirmed the findings of the Trial Court, and held
that the suit was barred by limitation, since it was filed beyond the
period of limitation of three years.
11.
Aggrieved by the impugned Judgment and Order dated 12.08.2016 passed
by the High Court, the original Plaintiff No.1 has filed the present
Civil Appeal.
12.
We have heard the learned Counsel for the parties, perused the plaint
and documents filed therewith, as also the written submissions filed
on behalf of the parties.
12.1
We will first briefly touch upon the law applicable for deciding an
application under Order VII Rule 11 CPC, which reads as under:
“11.
Rejection of plaint.– The plaint shall be rejected in the following
cases:–
(a)
where it does not disclose a cause of action;
(b)
where the relief claimed in undervalued, and the plaintiff, on being
required by the Court to correct the valuation within a time to be
fixed by the Court, fails to do so;
(c)
where the relief claimed is properly valued but the plaint is written
upon paper insufficiently stamped, and the plaintiff, on being
required by the Court to supply the requisite stamp-paper within a
time to be fixed by the Court, fails to do so;
(d)
where the suit appears from the statement in the plaint to be barred
by any law;
(e)
where it is not filed in duplicate;
(f)
where the plaintiff fails to comply with the provisions of rule 9
Provided that the time fixed by the Court for the correction of the
valuation or supplying of the requisite stamp-paper shall not be
extended unless the Court, for reasons to be recorded, is satisfied
that the plaintiff was prevent by any cause of exceptional nature for
correction the valuation or supplying the requisite stamp-paper, as
the case may be, within the time fixed by the Court and that refusal
to extend such time would cause grave injustice to the plaintiff.”
The
remedy under Order VII Rule 11 is an independent and special
remedy,
wherein the Court is empowered to summarily dismiss a suit at the
threshold, without proceeding to record evidence, and conducting a
trial, on the basis of the evidence adduced, if it is satisfied that
the action should be terminated on any of the grounds contained in
this provision.
The
underlying object of Order VII Rule 11 (a) is that if in a suit, no
cause of action is disclosed, or the suit is barred by limitation
under Rule 11 (d), the Court would not permit the plaintiff to
unnecessarily protract the proceedings in the suit. In such a case,
it would be necessary to put an end to the sham litigation, so that
further judicial time is not wasted.
In
Azhar Hussain v. Rajiv Gandhi1 this Court held that the whole
purpose of conferment of powers under this provision is to ensure
that a litigation which is meaningless, and bound to prove abortive,
should not be permitted to waste judicial time of
the court, in the following words :
“12.
…The whole purpose of conferment of such power is to ensure that a
litigation which is meaningless, and bound to prove abortive should
not be permitted to occupy the time of the Court, and exercise the
mind of the respondent. The sword of Damocles need not be kept
hanging over his head unnecessarily without point or purpose. Even if
an ordinary civil litigation, the Court readily exercises the power
to reject a plaint, if it does not disclose any cause of action.”
12.2
The power conferred on the court to terminate a civil action is,
however, a drastic one, and the conditions enumerated in Order VII
Rule 11 are required to be strictly adhered to.
12.3
Under Order VII Rule 11, a duty is cast on the Court to determine
whether the plaint discloses a cause of action by scrutinizing the
averments in the plaint, read in conjunction with the documents
relied upon, or whether the suit is barred by any law.
12.4
Order VII Rule 14(1) provides for production of documents, on
which the plaintiff places reliance in his suit, which reads as
under :
“Order
7 Rule 14: Production of document on which plaintiff sues or relies.–
(1)Where a plaintiff sues upon a document or relies upon document in
his possession or power in support of his claim, he shall enter such
documents in a list, and shall produce it in Court when the plaint is
presented by him and shall, at the same time deliver the document and
a copy thereof, to be filed with the plaint.
(2)
Where any such document is not in the possession or power of the
plaintiff, he shall, wherever possible, state in whose possession or
power it is.
(3)
A document which ought to be produced in Court by the plaintiff when
the plaint is presented, or to be entered in the list to be added or
annexed to the plaint but is not produced or entered accordingly,
shall not, without the leave of the Court, be received in evidence on
his behalf at the hearing of the suit.
(4)
Nothing in this rule shall apply to document produced for the cross
examination of the plaintiff's witnesses, or, handed over to a
witness merely to refresh his memory.” (emphasis supplied) Having
regard to Order VII Rule 14 CPC, the documents filed alongwith the
plaint, are required to be taken into consideration for deciding the
application under Order VII Rule 11 (a). When a document referred to
in the plaint, forms the basis of the plaint, it should be treated as
a part of the plaint.
12.5
In exercise of power under this provision, the Court would determine
if the assertions made in the plaint are contrary to statutory law,
or judicial dicta, for deciding whether a case for rejecting the
plaint at the threshold is made out.
12.6
At this stage, the pleas taken by the defendant in the written
statement and application for rejection of the plaint on the merits,
would be irrelevant, and cannot be adverted to, or taken into
consideration.
3
12.7 The test for exercising the power under Order VII Rule 11 is
that if the averments made in the plaint are taken in entirety, in
conjunction with the documents relied upon, would the same result in
a decree being passed. This test was laid down in Liverpool
& London S.P. & I Assn. Ltd. v. M.V.Sea Success I &
Anr.,4 which reads as :
“139.
Whether a plaint discloses a cause of action or not is essentially a
question of fact. But whether it does or does not must be found out
from reading the plaint itself. For the said purpose, the averments
made in the plaint in their entirety must be held to be correct. The
test is as to whether if the averments made in the plaint are taken
to be correct in their entirety, a decree would be passed.” In
Hardesh Ores (P.) Ltd.
v. Hede & Co.5 the Court further held that it is not
permissible to cull out a sentence or a passage, and to read it in
isolation. It is the substance, and not merely the form, which has to
be looked into. The plaint has to be construed as it stands, without
addition or subtraction of words. If the allegations in the plaint
prima facie show a cause of action, the court cannot embark upon an
enquiry whether the allegations are true in fact.
12.8
If on a meaningful reading of the plaint, it is found that the suit
is manifestly vexatious and without any merit, and does not disclose
a right to sue, the court would be justified in exercising the power
under Order VII Rule 11 CPC.
12.9
The power under Order VII Rule 11 CPC may be exercised by the Court
at any stage of the suit, either before registering the plaint, or
after issuing summons to the defendant, or before conclusion of the
trial, as held by this Court in the judgment of Saleem
Bhai v. State of Maharashtra. The plea that once issues are
framed, the matter must necessarily go to trial was repelled by this
Court in Azhar Hussain (supra).
12.10
The provision of Order VII Rule 11 is mandatory in nature. It states
that the plaint “shall” be rejected if any of the grounds
specified in clause (a) to (e) are made out. If the Court finds that
the plaint does not disclose a cause of action, or that the suit is
barred by any law, the Court has no option, but to reject the plaint.
13.
“Cause of action” means every fact which would be necessary for
the plaintiff to prove, if traversed, in order to support his right
to judgment. It consists of a bundle of material facts, which are
necessary for the plaintiff to prove in order to entitle him to the
reliefs claimed in the suit.
In
Swamy Atmanand v. Sri Ramakrishna Tapovanam8 this Court held :
“24.
A cause of action, thus, means every fact, which if traversed, it
would be necessary for the plaintiff to prove an order to support his
right to a judgment of the court. In other words, it is a bundle of
facts, which taken with the law applicable to them gives the
plaintiff a right to relief against the defendant. It must include
some act done by the defendant since in the absence of such an act,
no cause of action can possibly accrue. It is not limited to the
actual infringement of the right sued on but includes all the
material facts on which it is founded” (emphasis supplied) In
T. Arivandandam v. T.V. Satyapal & Anr.9 this Court held that
while considering an application under Order VII Rule 11 CPC what is
required to be decided is whether the plaint discloses a real cause
of action, or something purely illusory, in the following words : -
“5.
…The learned Munsiff must remember that if on a meaningful – not
formal – reading of the plaint it is manifestly vexatious, and
meritless, in the sense of not disclosing a clear right to sue, he
should exercise his power under O. VII, R. 11, C.P.C. taking care to
see that the ground mentioned therein is fulfilled. And, if clever
drafting has created the illusion of a cause of action, nip it in the
bud at the first hearing …” Subsequently, in I.T.C.
Ltd. v. Debt Recovery Appellate Tribunal, this Court held that
law cannot permit clever drafting which creates illusions of a cause
of action.
What is required is that a clear right must be made out
in the plaint.
If,
however, by clever drafting of the plaint, it has created the
illusion of a cause of action, this Court in Madanuri
Sri Ramachandra Murthy v. Syed Jalal held that it should be
nipped in the bud, so that bogus litigation will end at the earliest
stage.
The
Court must be vigilant against any camouflage or suppression, and
determine whether the litigation is utterly vexatious, and an abuse
of the process of the court.
14.
The Limitation Act,
1963 prescribes a time-limit for the institution of all suits,
appeals, and applications. Section
2(j) defines the expression “period of limitation” to mean
the period of limitation prescribed in the Schedule for suits,
appeals or applications. Section
3 lays down that every suit instituted after the prescribed
period, shall be dismissed even though limitation may not have been
set up as a defence. If a suit is not covered by any specific
article, then it would fall within the residuary article.
Articles
58 and 59 of the Schedule to the 1963 Act, prescribe the period of
limitation for filing a suit where a declaration is sought, or
cancellation of an instrument, or rescission of a contract, which
reads as under :
Description
of suit Period of Time from which limitation period begins to run
58.
To obtain any Three years When the right to other
declaration. sue first
accrues.
59. To cancel or set Three years When the facts
aside an instrument entitling the plaintiff
or decree or for the to have the
rescission of a instrument or decree
contract. cancelled or set
aside or the contract
rescinded first
become known to
him.
The
period of limitation prescribed under Articles 58 and 59 of the 1963
Act is three years, which commences from the date when the right to
sue first accrues.
In
Khatri Hotels Pvt. Ltd. & Anr. v. Union of India & Anr.,12
this Court held that the use of the word ‘first’ between the
words ‘sue’ and ‘accrued’, would mean that if a suit is based
on multiple causes of action, the period of limitation will begin to
run from the date when the right to sue first accrues. That is, if
there are successive violations of the right, it would not give rise
to a fresh cause of action, and the suit will be liable to be
dismissed, if it is beyond the period of limitation counted from the
date when the right to sue first accrued. A three-Judge Bench of this
Court in State of
Punjab v. Gurdev Singh, held that the Court must examine the
plaint and determine when the right to sue first accrued to the
plaintiff, and whether on the assumed facts, the plaint is within
time. The words “right to sue” means the right to seek relief by
means of legal proceedings. The right to sue accrues only when the
cause of action arises. The suit must be instituted when the right
asserted in the suit is infringed, or when there is a clear and
unequivocal threat to infringe such right by the defendant against
whom the suit is instituted.
Order
VII Rule 11(d) provides that where a suit appears from the averments
in the plaint to be barred by any law, the plaint shall be rejected.
15.
Analysis and Findings We have carefully perused the averments in the
plaint read with the documents relied upon.
15.1
On a reading of the plaint and the documents relied upon, it is clear
that the Plaintiffs have admitted the execution of the registered
Sale Deed dated 02.07.2009 in favour of Defendant No.1/Respondent
No.1 herein.
Para
5 of the plaint reads as :
“(5)
…Thus, subject of the aforesaid terms the plaintiffs had executed
sale deed selling the suit property to the opponent no.1 vide sale
deed dated 02/07/2009 bearing Sr.No. 5158…” The case made out in
the Plaint is that even though they had executed the registered Sale
Deed dated 02.07.2009 for a sale consideration of Rs.1,74,02,000, an
amount of only Rs.40,000 was paid to them. The remaining 31 cheques
mentioned in the Sale Deed, which covered the balance amount of
Rs.1,73,62,000 were alleged to be “bogus” or “false”, and
allegedly remained unpaid.
We
find the averments in the Plaint completely contrary to the recitals
in the Sale Deed dated 02.07.2009, which was admittedly executed by
the Plaintiffs in favour of Respondent No.1. In the Sale Deed, the
Plaintiffs have expressly and unequivocally acknowledged that the
entire sale consideration was “paid” by Defendant No.1/Respondent
No.1 herein to the Plaintiffs.
Clauses
3 and 4 of the Sale Deed are extracted hereinbelow for ready
reference : -
“Since
the full amount of consideration of the sale as decided above, has
since been paid by you the Vendees to we the Vendors of this sale
deed, for which we the Vendors of this sale deed acknowledge the same
so, we or our descendants, guardian or legal heirs is to take any
dispute or objection in future that such amount is not received, or
is received less, and if we do so then, the same shall be void by
this deed and, if any loss or damage occurs due to the same then, we
the Vendors of this sale deed and descendants, guardians, legal heirs
of we the vendors are liable to the pay the same to you the vendees
or your descendants, guardian, legal heirs and you can recover the
same by
court
proceedings.
(4)
We the party of Second part i.e. Vendors of the sale deed since
received full consideration on the above facts, the physical
possession, occupancy of the land or the property mentioned in this
sale deed has been handed over to you the Vendee of this sale deed,
and that has been occupied and taken in possession of the land or
property mentioned in this sale deed by you the Vendee of this sale
deed by coming at the site and therefore, we the Vendors of this sale
deed have not to raise any dispute in the future that the possession
of the land or the property has not been handed over to you. …”
The
Sale Deed records that the 36 cheques covering the entire sale
consideration of Rs.1,74,02,000 were “paid” to the Plaintiffs,
during the period between 07.07.2008 to 02.07.2009.
15.2
If the case made out in the Plaint is to be believed, it would mean
that almost 99% of the sale consideration i.e. Rs.1,73,62,000
allegedly remained unpaid throughout. It is, however inconceivable
that if the payments had remained unpaid, the Plaintiffs would have
remained completely silent for a period of over 5 and ½ years,
without even issuing a legal notice for payment of the unpaid sale
consideration, or instituting any proceeding for recovery of the
amount, till the filing of the present suit in December 2014.
15.3
The Plaintiffs have made out a case of alleged non-payment of a part
of the sale consideration in the Plaint, and prayed for the relief of
cancellation
of the Sale Deed on this ground.
Section
54 of the Transfer of Property Act, 1882 provides as under :
“54.
‘Sale’ defined.—‘Sale’ is a transfer of ownership in
exchange for a price paid or promised or part-paid and
part-promised.” The definition of “sale” indicates that there
must be a transfer of ownership from one person to another i.e.
transfer of all rights and interest in the property, which was
possessed by the transferor to the transferee. The transferor cannot
retain any part of the interest or right in the property, or else it
would not be a sale. The definition further indicates that the
transfer of ownership has to be made for a “price paid or promised
or part paid ans part promised”. Price thus constitutes an
essential ingredient of the transaction of sale.
In
Vidyadhar v. Manikrao & Anr. this Court held that the words
“price paid or promised or part paid and part promised” indicates
that actual payment of the whole of the price at the time of the
execution of the Sale Deed is not a sine qua non for completion of
the sale. Even if the whole of the price is not paid, but the
document is executed, and thereafter registered, the sale would be
complete, and the title would pass on to the transferee under the
transaction. The non-payment of a part of the sale price would not
affect the validity of the sale. Once the title in the property has
already passed, even if the balance sale consideration is not paid,
the sale could not be invalidated on this ground. In order to
constitute a “sale”, the parties must intend to transfer the
ownership of the property, on the agreement to pay the price either
in praesenti, or in future. The intention is to be gathered from the
recitals of the sale deed, the conduct of the parties, and the
evidence on record.
In
view of the law laid down by this Court, even if the averments of the
Plaintiffs are taken to be true, that the entire sale consideration
had not in fact been paid, it could not be a ground for cancellation
of the Sale Deed. The Plaintiffs may have other remedies in law for
recovery of the balance consideration, but could not be granted the
relief of cancellation of the registered Sale Deed. We find that the
suit filed by the Plaintiffs is vexatious, meritless, and does not
disclose a right to sue. The plaint is liable to be rejected under
Order VII Rule 11 (a).
15.4
The Plaintiffs have averred in the plaint that the period of
limitation commenced on 21.11.2014, when they obtained a copy of the
index of the Sale Deed dated 02.07.2009, and discovered the alleged
fraud committed by Defendant No.1.
The
relevant extract from the plaint in this regard is set out
hereinbelow :–
“(7)
… Not only that but also, on obtaining the copy of the index of the
sale deed of the acts committed by the Opponent No.1, 4, 5 and on
obtaining the certified copy of the sale deed, we the plaintiffs
could come to know on 21-11-2014 that, the Opponent No.1 had in
collusion with Opponent No.4, 5 mentioned the false cheques stated
below in the so called sale deed with intention to commit fraud and
no any consents of we the plaintiffs have also been obtained in that
regard. The said cheques have not been received to we the plaintiffs
or no any amounts of the said cheques have been credited in accounts
of we the plaintiffs. Thus, the cheques which have been mentioned in
the agreement caused to have been executed by the Opponent No.1, the
false cheques have been mentioned of the said amounts. Not only that
but also, the agricultural land under the suit had been sold by the
Opponent No.1 to the Opponent No.2 Dillipbhai Gordhanbhai Sonani and
the Opponent No.3, Laljibhai Gordhanbhai Sonani on 1-4-2013 for
Rs.2,01,00,000/- as if the said sale deed was having clear title
deeds. On taking out the copy of the said sale deed with seal and
signature on 21-11-2014, it could come to the knowledge of we the
plaintiffs. We the plaintiffs have not done any signature or witness
on the said agreement. The said agreement is not binding to we the
plaintiffs. Since the said agreement is since null, void and invalid
as well as illegal, therefore, no any Court fee stamp duty is
required to be paid by we the plaintiff on the said agreement and for
that we the plaintiffs rely upon the judgment of the Supreme Court in
A.I.R.2010, Supreme Court, Page No. 2807. …” The plea taken in
the plaint that they learnt of the alleged fraud in 2014, on receipt
of the index of the Sale Deed, is wholly misconceived, since the
receipt of the index would not constitute the cause of action for
filing the suit. On a reading of the plaint, it is clear that the
cause of action arose on the non-payment of the bulk of the sale
consideration, which event occurred in the year 2009. The plea taken
by the Plaintiffs is to create an illusory cause of action, so as to
overcome the period of limitation. The plea raised is rejected as
being meritless and devoid of any truth.
15.5
The conduct of the Plaintiffs in not taking recourse to legal action
for over a period of 5 and ½ years from the execution of the Sale
Deed in 2009, for payment of the balance sale consideration, also
reflects that the institution of the present suit is an
after-thought. The Plaintiffs apparently filed the suit after the
property was further sold by Respondent No.1 to Respondent Nos. 2 and
3, to cast a doubt on the title of Respondent No.1 to the suit
property.
15.6
The Plaintiffs have placed reliance on the Order of the Collector
dated 19.06.2009 with the plaint. The Order reveals that the
permission was granted subject to the fulfilment of certain
conditions. Clause 4 of the permission states that :
“(4)
The purchaser of the land/property, shall have to make the
payment
of the price of the land by cheque and its reference shall require to
be made in the Sale Deed.” If the Plaintiffs had a genuine
grievance of non-payment of the balance sale consideration, the
Plaintiffs could have moved for revocation of the permission granted
by the Collector on 19.06.2009.
Clause
6 of the Order provided that :
“(6)
On making violation of any of the aforesaid terms, the permission
shall automatically be treated as cancelled and, separate proceeding
shall be taken up for the violation of the terms and conditions.”
The Plaintiffs did not make any complaint whatsoever to the Collector
at any point of time. The conduct of the Plaintiffs is reflective of
lack of bona fide.
15.7
The present case is a classic case, where the plaintiffs by clever
drafting of the plaint, attempted to make out an illusory cause of
action, and bring the suit within the period of limitation.
Prayer
1 of the plaint reads as :
“1)
The suit property being agricultural land of old tenure of Revenue
Survey No.610 whose block Number is 573 situated at village Mota
Varachha, Sub-district : Surat city, Dis : Surat has been registered
by the opponent No.1 of this case in office of the Sub-Registrar
(Katar Gam) at Surat vide Serial No.5158 in book No.1. Since, the
same is illegal, void, in-effective and since the amount of
consideration is received by the plaintiffs, and by holding that it
is not binding to the plaintiffs and to cancel the same, and since
the sale deed as aforesaid suit property has been executed by the
opponent No.1 to the opponent No.2, 3, it is registered in the office
of Sub-registrar, Surat (Rander) on 01/04/2013 vide serial No.443
which is not binding to we the plaintiffs. Since, it is illegal,
void, in-effective and therefore, this Hon’ble Court may be pleased
to cancel the same and this Hon’ble Court may be pleased to send
the Yadi in that regard to the Sub-registrar, Surat (Karat Gam) and
the Sub- Registrar (Rander) in regard to the cancellation of both the
aforesaid documents.” The Plaintiffs deliberately did not mention
the date of the registered Sale Deed dated 02.07.2009 executed by
them in favour of Respondent No.1, since it would be evident that the
suit was barred by limitation. The prayer however mentions the date
of the subsequent Sale Deed i.e. 01.04.2013 when the suit property
was further sold by Respondent No.1 to Respondent Nos. 2 & 3.
The
omission of the date of execution of the Sale Deed on 02.07.2009 in
the prayer clause, was done deliberately and knowingly, so as to
mislead the Court on the issue of limitation.
15.8
The delay of over 5 and ½ years after the alleged cause of action
arose in 2009, shows that the suit was clearly barred by limitation
as per Article 59
of the Limitation
Act, 1963. The suit was instituted on 15.12.2014, even though the
alleged cause of action arose in 2009, when the last cheque was
delivered to the Plaintiffs.
The
Plaintiffs have failed to discharge the onus of proof that the suit
was filed within the period of limitation. The plaint is therefore,
liable to be rejected under Order VII Rule 11 (d) of CPC.
Reliance
is placed on the recent judgment of this Court rendered in Raghwendra
Sharan Singh v. Ram Prasanna Singh (Dead) by LRs.15 wherein this
Court held the suit would be barred by limitation under Article
59 of the Limitation
Act, if it was filed beyond three years of the execution of the
registered deed.
15.9
The Plaintiffs have also prayed for cancellation of the subsequent
Sale Deed dated 01.04.2013 executed by Respondent No.1 in favour of
Respondent Nos. 2 and 3; since the suit in respect of the 1st Sale
Deed dated 02.07.2009 is rejected both under clauses (a) and (d) of
Order VII Rule 11, the prayer with respect to the 2nd Sale Deed dated
01.04.2003 cannot be entertained.
16.
The present suit filed by the Plaintiffs is clearly an abuse of the
process of the court, and bereft of any merit.
The
Trial Court has rightly exercised the power under Order VII Rule 11
CPC, by allowing the application filed by Respondent Nos. 2 & 3,
which was affirmed by the High Court.
In
view of the aforesaid discussion, the present Civil Appeal is
dismissed with costs of Rs. 1,00,000/- payable by the Appellant to
Respondent Nos. 2 and 3, within a period of twelve weeks from the
date of this Judgment.
Pending
applications, if any, are accordingly disposed of.
...…...............………………J.
(L.
NAGESWARA RAO) ...…...............………………J.
(INDU
MALHOTRA) July 09, 2020; New Delhi.
