Bombay High Court
Smt. Sushama Tulsidas Adhav vs Mr Pradeep D. Shah on 20 September, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:37346
FA-1278-12-F18.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.1278 OF 2012.
Smt. Sushama Tulsidas Adhav
Residing At 5-A, Keni Wadi,
Agar Bajar, S. K. Bole Marg,
Dadar (W), Mumbai 400 028 ...Appellant.
Versus
1. Mr Pradeep D. Shah
Builder and Developer Sole Proprietor
of M/s. Siddhi Construction Co.
Residing at 4, Sudarshan Postal Colony,
Chembur Mumbai 400 071.
2. Worli Koli Samajak Vividh
Karyakari Sahakari Society
Ltd., A Co-operative Society
Deemed to be registered under
Maharashtra Co-operative Societies
Act, having its Address at 80(E) behind
Shankar Temple Worli Koliwada
Mumbai 400 025.
3. Jayendra D. Shah
A Sole Proprietor of
M/s. Saiba Agency Age not known
Occ. Business, residing at
1st Floor, Plot No.4, Postal Colony,
Chembur, Mumbai 400 071.
4. Haresh H. Jethva
Age not known Occ. Not known
Nathapal Bhavan, Jawahar Nagar,
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B. S. Marg, Ghatkopar (W)
Mumbai 400 086.
5. The Director
M/s. Muthoot Fin. Corpn. Ltd.
Muthoot Centre, Punnen Road,
Trivandrum 695 001
Kerala.
6. The Manager
Cheera Bazaar
Muthoot Fin. Corpn. Ltd.
No.488/B Matru Krupa Bldg.
J. S. S. Road, Opp. Gomantak Hotel,
Chera Bazar, Mumbai- 400 002. ...Respondents.
------------
Mr. Balasaheb Deshmukh for Appellant.
Ms. Smruti Gurav i/b Mr. Keshav Borhade for Respondent no.1.
Mr. Shishir Joshi for Respondent no. 3.
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Coram : Sharmila U. Deshmukh, J.
Reserved on: 2nd August 2024.
Pronounced on : 20th September 2024.
JUDGMENT :
1. The Appeal had been admitted vide order dated 10 th August, 2012.
2. The appeal is preferred against the judgment dated 5 th July 2012 passed by the City Civil Court in Notice of Motion No.1636 of 2012 in S.C Suit No 2840/2005 rejecting the plaint under Order VII Rule 11 of rsk 2 of 32 FA-1278-12-F18.doc CPC qua the reliefs in terms of Shop No 4, ground floor in building on Plot No 307, C.S. 825(pt), Worli. For sake of convenience the parties are referred to by their status before the Trial Court. FACTUAL MATRIX:
3. S.C. Suit No.2840 of 2005 was instituted seeking declaration that the two agreements for sale dated 5th February 2001 in the respect of Shop No.4 and Flat No.4 in an under construction building on Plot No. 307 Scheme No.52 of Worli Estate are valid and subsisting agreements under the provisions of MOFA Act and for mandatory injunction directing the Defendant to lodge the agreement for registration after payment of stamp duty and to complete the construction and put the Plaintiff in possession of Shop No.4 and for perpetual injunction from alienating Shop No.4 and Flat No.4.
4. The suit was initially filed against the Defendant Developer. Subsequently pursuant to order of amendment dated 5 th March, 2007, the suit came to be amended impleading the Society as Defendant No 2, Jayendra D Shah as Defendant No 3 and Haresh H. Jethwa as Defendant No 4.
5. The Plaintiff came with a case that he has purchased Shop No 4 admeasuring 383 sq. ft and Flat No 4 admeasuring 577 sq feet in an under construction building being constructed by Defendant No 1 developer and promoters within the meaning of MOFA. After setting rsk 3 of 32 FA-1278-12-F18.doc out the details of the development agreement executed between Defendant no 2 Society and Defendant no 1 Developer, it was contended that in or about August, 1998 the agreement was arrived between Plaintiff and Defendant No 1 in respect of sale of Shop No 4 and Flat No 4 pursuant to which Rs 9,10,000/ and Rs 4,50,000/ was paid as part payment towards purchase of Shop No 4 and Flat No 4 respectively.
6. After persistent demands two unregistered agreements dated 1stFebruary 2001 were executed in respect of Shop No.4 and Flat No.4 respectively in which the Society is joined as a party. In paragraph 6 it is contended that there is non compliance by the Defendant of the statutory obligations under MOFA of lodging the agreements for registration after payment of stamp duty and under Section 4 of MOFA to specify the prescribed details in the agreement by failing to specify the date of handing over possession which is breach of MOFA provisions.
7. In February 2004 as the construction work was nearing completion, the Plaintiff offered to pay the balance amount and requested the Defendant to complete the agreement, register the same and hand over possession of the Shop and the flat to which the Defendant responded that unless possession of hall is delivered to the Society, the possession of shop and flat cannot be handed over.
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8. It was pleaded in paragraph 8 that Defendant had addressed to the Plaintiff two letters dated 10th January 2002 and 23rd January 2002 admitting the fact that the Plaintiff is the flat purchaser making false and baseless allegations demanding balance of purchase price. The balance purchase price is payable at the time of possession and Defendant has no right to terminate the agreement for sale which were Exhibit A and B to the plaint.
9. It was contended that in or about May 2003 the Plaintiff was informed by one Mr. K.K. Bapardekar that the office bearers in collusion with Defendant No 1intended to put one Jayendra D. Shah in possession of Shop No.4 and Mr. Harish Jethwa in possession of flat No.4. The Plaintiff filed a private complaint with Metropolitan Magistrate and FIR has been registered.
10. In paragraph 10, it was contended that the Defendant being promoter is liable to complete construction of the building and put the Plaintiff in possession of Shop No.4 and the Defendant is denying the right of Plaintiff to possession of Shop and the Flat.
11. The amended plaint pleaded that the Plaintiff came to know from the written statement dated 1st August, 2005 filed by the Defendant No 1 that the Defendant No 2 Society had issued Share Certificate in respect of Shop No 4 in favour of Defendant No 3. It was pleaded that the Defendant No 2 had no right to allot the said shop to rsk 5 of 32 FA-1278-12-F18.doc Defendant No 3.
12. To the plaint the Plaintiff annexed two agreements dated 1 st February 2001 executed in respect of Shop No.4 and Flat No.4, receipts issued by the Defendant and the proceedings initiated by the Plaintiff before the Metropolitan Magistrate.
13. Written statements came to be filed and the parties went to trial. The Plaintiff led evidence and at the stage of Defendants evidence, Notice of Motion No.1636 of 2012 was filed by the Defendant No.3 under Order VII Rule 11(d) of CPC seeking rejection of the plaint insofar as the relief in terms of Shop no.4 is concerned as being barred by law of limitation. In the affidavit in support of Notice of Motion Defendant No.3 claimed that he is the purchaser of Shop No.4 subsequent to the termination of agreement between the Plaintiff and Defendant No.1. It was pleaded that as per paragraph No.8 of the plaint, Defendant No.1 has terminated the agreement in respect of Shop No.4 by his Advocate's letter dated 23 rd January 2002 and prior to the termination notice the Defendant No.1's advocate by letter dated 10th January 2002 has called upon the Plaintiff to make requisite payment. It was further contended that in the cross examination of the Plaintiff she has admitted of having received the termination notice. It was contended that plaint has been instituted on 11th July 2005 and prayer (a) pertains to declaration that the rsk 6 of 32 FA-1278-12-F18.doc agreement of sale concerning shop No.4 be declared valid subsisting and binding with entitlement of specific performance and therefore present suit is barred by limitation.
14. The Plaintiff filed her reply contending that Suit was filed seeking declaration that the two agreements are valid and subsisting and for direction to Defendant No.1 to execute and register the agreements under MOFA. It was stated that by advocate's letter dated 10th January 2002 and and 23 rd January 2002, Defendant No.1 demanded excess balance payment of Shop No.4 which is not as per the agreed terms entered into between the parties and hence the letter was void and not binding. It was contended that Defendant No.1 illegally tried to claim that he has terminated the agreement in respect of shop No.4 and in the agreement there is no clause for termination and that it was agreed that the balance amount will be payable to Defendant No.1 at the time of handing over possession of Shop No.4 and Flat No.4. It was contended that non performance by the developer of its obligations under MOFA is continuous cause of action and hence the suit is not barred by limitation. IMPUGNED JUDGMENT:
15. By the impugned judgment the Trial Court made the Notice of Motion absolute. The findings of the Trial Court can be broadly summarized as under:
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a) By letter dated 10th January 2002 Defendant No.1 called upon
the Plaintiff to pay the balance amount of Rs.16,52,800/- leaving the balance Rs.7,28,200/- within period of one week failing which agreement would be terminated.
b) Plaintiff failed to honour the requisition in letter and hence Defendant by letter dated 23rd January 2002 terminated the agreement and forfeited the amount paid by the Plaintiff.
c) The termination of the agreement depriving the Plaintiff of the suit shop and suit flat by letter dated 23 rd January 2002 gave cause of action for the Plaintiff to file suit.
d) Suit claiming reliefs under MOFA will be governed by the Limitation Act 1963 and the cause of action is not continuous.
e) As per Article 58 of the Limitation Act period of limitation is three years from the date when the right to sue first accrued and right to sue for the first time accrued when the Defendant No1 by letter dated 23rd January, 2002 terminated the agreement.
f) The Defendant No 1 in unequivocal terms refused to perform his part of the contract by terminating the agreement by letter dated 23rd January, 2002 and as per Article 54, suit for specific performance has to be filed within three years upon refusal of Defendant No.1.
g) The suit filed on 11th July, 2005 seeking validity of agreement so far as Shop No. 4 is concerned is barred by limitation.
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SUBMISSIONS:
16. Mr. Deshmukh, learned counsel for Appellant has taken this Court through the pleadings in the plaint and would submit that only averments in plaint are relevant. He submits that the plaint alleges non compliance of MOFA obligations and at the time of leading Defendant's evidence the Notice of Motion under Order VII Rule 11(d) was taken out by Defendant No 3. He submits that the Trial Court has held the knowledge about non performance to be the starting point of limitation under Article 54 and 58 of Limitation Act. Whereas the non compliance of MOFA provisions constitutes continuous cause of action.
17. He would further point out the prayers in the suit and would submit that the relief sought was enforcement of the obligation of the developer under MOFA and therefore there is continuous cause of action. He would submit that the Trial Court has accepted that the suit was filed claiming reliefs under MOFA and despite thereof has held that the cause of action is not a continuous one. He would further submit that by impugned judgment the suit has been rejected in part as regards shop No.4 which is not permissible as the plaint is either to be rejected in whole or accepted in whole and there cannot be any part rejection of the suit.
18. He would submit that Defendant No.1 has accepted the execution of the agreement and payment of consideration. Pointing rsk 9 of 32 FA-1278-12-F18.doc out to the agreement entered into between Plaintiff and Defendant No.1 he submits that Recital 25 specifically states that under Section 4 of MOFA, the developer is required to execute written agreement and to register the same and clause 11 of the agreement provides that the agreement shall be subject to the provisions of MOFA. He points out the receipts of payment of consideration annexed to the agreement.
19. He submits that the communication dated 10 th January 2002 is in respect of premises different from the suit premises as the built up area and the consideration stated in the notice differs and therefore there was no termination of the agreement. He submits that the Trial Court has considered the cause of action as termination of the agreement on the basis of defence which is impermissible. He has taken this Court through averments in the plaint and would submit that the cause of action which arose in the present case is the apprehension of creation of third party rights. In support he relies upon the following decisions.
1.Kum.Geetha, D/O Late Krishna &Ors V/s Nanjundasvamy & Ors (Supreme Court of India) 31/10/2023, Civil Appeal No.7413/2023 (Arising out of S.L.P. (C) No.8147/2016;
2. Ramesh B Desai & Ors V/s Bipin Vadilal Mehta & Ors (Supreme Court of India) 11/07/2006, 2006 5 SCC 638;
3. Madhav Prasad Aggarwal & Anrs V/s Axis Bank Ltd. & Anrs. (Supreme Court of India) 01/07/2019, 2019 7 SCC 158;
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4. Ram Prakash Gupta V/s Rajiv Kumar Gupta & Ors (Supreme Court of India) 03/10/2007, 2007 10 SCC 59;
5.Lata Constructions & Ors. V/s Dr.Rameshchandra Ramniklal Shah & Anr (Supreme Court of lndia) 12/08/1999, 2001 1 SCC 586;
6. Meerut development Authority V/s Mukesh Kumar Gupta (Supreme Court of India) O9/05/2012;
7.Bhagyalaxmi Construction V/s Monoranjan Basak & Anr (NCDRC) 31/05/2013, 2013 3 CPJ (NC) 75;
8.Bhagyalaxmi Construction V/s Monoranjan Basak & Anr(Supreme Court of India) 11/11/2013;
9.Altaf Fakir Baig & Ors V/s Goel Ganga Deve (IND) Pvt Ltd Through Directors A) A.J Goel B)A.J Goel C) J.S.Goel D) D.R.Thipse & Ors (High Court of Judicature at Bombay) 10/01/2023, 2023 0 AIR (Bom) 205;
10.Samruddhi Co-operative Housing Society Ltd. V/s Mumbai Malhalaxmi Construction Pvt Ltd (Supreme Court of India) 11/01/2022, 2022 4 SCC 103;
11.Sushil Samir Co-operative Housing Society Limited V/s District Deputy Regitrar,Co-operative Societies & Ors (High Court of Judicature at Bombay) 24/01/2014, [2014] 4 Mh. L. J. 888;
12. Cooperage Woodhouse Co-op HSG Society Ltd. V/s Ms.Bhansali & Kanungo Builders & Developers & Ors (High Court of of Judicature at Bombay) 30/08/2018 Suit No.4672/2000;
13.Smt.Indirabai Baburao Kanade V/s Matru Chhaya Co-op. Hsg. Society Ltd.& Anr (High Court of Judicature at Bombay) 26/07/2016, FA No.396/2012;
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14.Vasant Balkrishna Wale V/s Vithal Mahadeo Deshmukh (High Court of Judicature at Bombay) 14/09/2005, WP No.4320/1994;
15. Jayantilal Investments V/s Executive Engineer, Building Prooral (Ws) (High Court of Judicature at Bombay) 16/03/2006, F.A. No.989/2004;
20. Per contra, Mr. Joshi, learned counsel for the Defendant would submit that in para 8 of the plaint there is reference to the letter of 23rd January 2002 about termination and in para 9 of the plaint, it is averred that Plaintiff became aware that in May 2003, the Defendant intended to put Defendant No.3 in possession of the shop and therefore the cause of action arose as per paragraph 9 when the intention to put Defendant No.3 in possession of shop No.4 became known to the Plaintiff. He submits that despite thereof Chamber Summons came to be filed for impleading him in the year 2007. He submits that as impleadment was in the year 2007, the limitation as regards Defendant No.3 would commence from the year 2007 as the amendment does not relate back to date of suit and therefore the suit was clearly barred by limitation from the date of acquisition of knowledge in May 2003.
21. He would submit that under Section 8 of MOFA in event the possession was not given, the Plaintiff is entitled to refund of the rsk 12 of 32 FA-1278-12-F18.doc amount paid with interest. He submits that as there were separate agreements in respect of the shop and the flat it was case of joinder of cause of action and the plaint is rejected qua the Defendant No 3 which is permissible.
22. He submits that there is no continuous cause of action as the cause of action is the refusal of performance by the termination of the contract. Drawing attention to the plaint, he submits that there is no specific pleading about cause of action and upon reading of paragraphs 8 and 9 it is evident that the termination of the agreements in the year 2002 gives rise to cause of action. He would submit that Section 3 of Limitation Act read with Article 54 of Schedule makes it clear that the limitation is three years when the Plaintiff has notice that performance is refused.
23. He submits that the contract was terminable in view of Clause 7 of Form V prescribed under MOFA Rules and thus there is no continuous cause of action. He would further submit that in this case the question of limitation was pure question of law and not mixed question of law and fact requiring evidence to be led.
24. In support, he relies upon the following decisions.
1. The Church of Christ Charitable Trust & Educational Charitable Society, represented by its Chairman V/s.
Ponniamman Educational trust represented by its
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Chairperson/Managing Trustee (Supreme Court) 03-07-2012, 2012 AIR (SC) 3912;
2.Sejal Glass Limited V/s. Navilan Merchants Pvt. Ltd. (Supreme Court) 21-08-2017, 2017 AIR (SCW) 4477;
3.Madhav Prasad Aggarwal V/s. Axis Bank Ltd. (Supreme Court) 01-07-2019, 2019 (7) SCC 158;
4.Chetana Shankar Manapure V/s. Bandu Tanaji Barapatre (Bombay High Court) 27-01/19-03-2020, 2020 (4) Mh.L.J. 481;
5.Sheela Ram Vidhani V/s. S. K. Trading Company (Bombay High Court) 12-03/19-06-2021, 2021 (4) ALL. M.R. 474;
6. State of Punjab & Another V/s. Balkaran Singh(Supreme Court) 18-10-2006, 2007 AIR (SC) 641;
7. M/s. Suniti Prints & Ors. V/s. Sheela Ram Vidhani & Ors., Special Leave to Appeal © No.15635/2021;
8. Balakishna Savalram Fujari Waghinare, Duttatraya Gangaram Pujari Waghmare, Madhay Tukaram Puari Waghmare V/s. Shree Dhyaneshwar Maharaj Sansthan (Supreme Court) 26.03.1959, 1959 AIR (SC) 798;
9. Sankar Dastidar V/s. Shrimati Banjula Dastidar. (Supreme Court) 05.12.2006, 2007 AIR (SC) 514;
10. Anna Parisa Chougule since deceased by his heirs and legal representatives V/s. Sulochana Nabhiraj Chougule (Bombay High Court) 02.02.2017, 2017(6) Mh. L. J. 693;
11.Samruddhi Co-operative Housing Society Limited V/s. Mumbai Mahalaxmi Construction Private Limited (Supreme Court) 11.01.2022, 2022 0 Supreme (SC) 90;
12. Brihan Mumbai Electric Supply and Transfer Undertaking (BEST) V/s. BEST Jagrut Kamgar Sanghatana and Others (Bombay High Court) 06.03/05.06.2023, 2023 (6) Bom. C.R. rsk 14 of 32 FA-1278-12-F18.doc 528;
13.Jayantilal Investments V/s. Madhuvihar Co-operative Housing Society (Supreme Court) 10/01/2007, 2007 AIR (SC) 1011;
14.Samruddhi Co-operative Housing Socitey Limited V/s. Mumbai Mahalaxmi Construction Private Limited (Supreme Court) 11/01/2022, 2022 (4) SCC 103;
15.Ahmmadsaheb Abdul Mila (Dead) Through L.Rs. V/s. Bibijan and Others (Supreme Court) 01/04/2009, 2009 (5) SCC 462;
16.Dahiben V/s. Arvindbhai Kalyanji Bhanusali (Gajra) (D) Thr. Lrs. And Others (Supreme Court) 09/07/2020, 2020 AIR (SC) 3310;
17.Shakti Bhog Food Industries Limited V/s. Central Bank of India and Another (Supreme Court) 05/06/2020, 2020 AIR (SC) 2721;
18.S. Shivraj Reddy (Died) thr. His Lrs. and Another V/s. S. Raghuraj Reddy and Others (Supreme Court) 16/05/2024;
19. Altaf Fakir Baig V/s. Goel Ganga Development (Ind) Private Limited (Bombay High Court) 10/01/2023, 2023 (4) Mh. L.J. 658;
20. Lata Construction V/s. Rameshchandra Ramnikial Shah (Supreme Court) 12/08/1999, 2000 AIR (SC) 380;
21. Zodiac Developers Private Limited V/s. Krishna Developers, Mumbai and Others(Bombay High Court) 24/08/2016, 2017 (1) Mh. L. J. 166.
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POINTS FOR DETERMINATION:
25. The following points would arise for determination:
( 1) Whether the cause of action pleaded constitutes continuing cause as the plaint seeks enforcement of obligations by the Defendant No 1 imposed by MOFA and thus the bar of limitation will not apply ?
(2) Whether the rejection of the plaint in part in respect of the relief in terms of Shop No.4 is maintainable in law ?
26. In event it is held that the answer to Point No (1) is in the affirmative, it may not be necessary to consider Point No (2). However as substantial arguments were advanced on both these points, I have dealt with both the issues.
AS TO POINT NO (1):
27. Before proceeding further it would be apposite to reproduce Order 7 Rule 11 of Civil Procedure Code 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 is 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 returned upon paper insufficiently stamped, and the Plaintiff, on being required by the Court to supply the requisite stamp-paper rsk 16 of 32 FA-1278-12-F18.doc 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 prevented by any cause of an exceptional nature from correcting 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."
28. It is too well settled a proposition that while adjudicating an application under Order 7 Rule 11 of CPC it is only the averments in the plaint read with the documents annexed to the plaint which are germane. The issue cannot be decided on the basis of any other material produced by the Defendant which will also include the written statement. The Plaintiff has pleaded that there were two separate agreements dated 1st February 2001 executed in respect of shop No.4 and Flat No.4. At cost of repetition, the relevant paragraphs of the plaint are referred to. In paragraph 6 of the plaint, the Plaintiff has pleaded that Defendant has failed and neglected to perform his rsk 17 of 32 FA-1278-12-F18.doc obligations under MOFA and therefore the Plaintiff is entitled for mandatory injunction directing the Defendants to lodge the agreement for registration and to comply with his obligation under Section 4 of MOFA to specify in the agreement the prescribed particulars including the date of possession. Paragraph 8 which is the bone of contention of the parties reads as under:
"8. The Plaintiff state that Defendant addressed to the Plaintiff two letters dated 10/01/2002 and 23/01/2002 admitting the fact that the Plaintiff is the flat purchaser making false and baseless allegations demanding balance of purchase price. The Plaintiff states that the balance purchase price is payable at the time of possession. The Defendant has no right to terminate the agreement for sale being Exhibit "A" and "B"
hereto. The Plaintiff states that whatever stated in the said letter which is contrary to and inconsistent with whatever stated hereinabove is false and hereby denied."
29. In paragraph No.10 the Plaintiff has stated that the Defendant being promoter is liable to construct and complete construction of building on the said plot of land and put Plaintiff in possession of shop no.4 and Flat No.4 pursuant to the provisions of MOFA. In paragraph No.11 Plaintiff has stated that she is ready and willing to pay balance amount of purchase price at the time of delivery of possession by Defendant after obtaining occupation certificate in part performance rsk 18 of 32 FA-1278-12-F18.doc of the obligations under MOFA.
30. It is only subsequently by way of an amendment in the year 2007 that Defendant Nos.3 and 4 came to be impleaded and the amended paragraph 12A pleads that the Plaintiff came to know from the written statement of Defendant No.1 that share certificate has been issued on 28th September 2002 in favour of Defendant No.2. Although Defendant Nos.3 and 4 came to be impleaded the prayer clauses remained unamended and reads thus:
"a) That this Hon'ble Court be pleased to declare that there exists valid and subsisting ágreements for sale dated 5-2-2001 of shop No.4 and flat No.4 in a building under construction on Plot No. 307, C.S.No.825 (part) of Scheme 52 of Worli Estate, Worli, Mumbai -400 025 being Exhibit "A" and "B" hereto under the provisions of the said MOF Act and entitled for specific purpose thereof.
b) In consequence of granting prayer (a) this Hon'ble Court be pleased to direct the Defendant as and by way of mandatory injunction to lodge the said agreements being Exbibit A" and "B" for registration at the office of Sub-
Registrar, Mumbai Suburban District after payment of requisite stamp duty.,
c) In consequence of granting prayer (a) above the Defendant be ordered and directed as and by way of mandatory injunction of this Hon'ble Court to complete the construction of the building on the plot of land being Plot No.307, C.S. No.825 (part) of Scheme 52 of Worli Estate, Worli. Mumbai-400 025 and put the rsk 19 of 32 FA-1278-12-F18.doc Plaintiff in possession of Shop No.4 in the building.
d) The Defendant by himself, by his servants, agents or any other person or persons claiming by under or through them be restrained by an order and injunction of this Hon'ble Court from transferring, parting with possession, alienating or encumbering in any manner whatsoever the Shop No.4 and Flat No.4 in the said building situate at Worli save and except in favour of the Plaintiff."
31. The agreements executed by the Defendant No 1 are undisputedly executed under the provisions of MOFA. Section 3 of MOFA deals with general liabilities of the promoter and sub section (2)
(f) of Section 3 provides that the promoter shall specify in writing the date by which possession of he flat is to be handed over(and he shall hand over such possession accordingly). Section 4 of MOFA enjoins upon the promoter to enter into a written agreement in the prescribed form and to register the agreement. The reliefs sought by the Plaintiff read with the pleadings will disclose that the Plaintiff seeks enforcement of the obligations of the Promoter under Section 3 and 4 of MOFA by asking for registration of the agreement and for possession of the flat and the shop by seeking a declaration that the agreements are valid and subsisting agreements.
32. Section 3 of Limitation Act, 1963 bars every suit instituted after the prescribed period of limitation although limitation has not been set rsk 20 of 32 FA-1278-12-F18.doc up as a defence. Section 22 of Limitation Act provides that in case of continuing breach of contract a fresh period of limitation begins to run at every moment of the time during which the breach continues.
33. The agreements were executed under MOFA which imposes an obligation to register the agreements and provide for handing over possession on the date stated in the agreement. The Apex Court in Samruddhi Co-operative Housing Society Ltd (supra) dealt with Section 22 of Limitation Act in the context of Consumer Protection Act, 1986 in view of the continuous default to obtain occupancy certificate. The Apex Court considered various decisions on the subject and held in paragraph 15, 17 and 18 as under:
"15. A continuing wrong occurs when a party continuously breaches an obligation imposed by law or agreement. Section 3 imposes certain general obligations on a promoter. These obligations interalia include making disclosures on the nature of title to the land, encumbrances on the land, fixtures, fittings and amenities to be provided, and to not grant possession of a flat until a completion certificate is given by the local authority. The responsibility to obtain the occupancy certificate from the local authority has also been imposed under the agreement to sell between the members of the appellant and the respondent on the latter.
17. Section 3 and 6 of the MOFA indicate that the promoter has an obligation to provide the occupancy certificate to the flat owners.....
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18. Based on these provisions, it is evident that there was an obligation on the respondent to provide the occupancy certificate and pay for the relevant charges till the certificate has been provided..........This continuous failure to obtain an occupancy certificate is breach of the obligations imposed on the respondent under MOFA and amounts to continuing wrong....."
34. In case of Indirabai Baburao Kanade vs Matru Chaya Co-op. Hsg Society (supra), the relief sought was execution of conveyance and learned Single Judge of this Court held that relief of enforcement of statutory obligation under MOFA can neither be barred by law of limitation nor capable of monetary evaluation.
35. In Cooperage Woodhouse Co-op. Hsg Society Ltd and Madhuvihar Co-op Housing Society vs Jayantilal Investiments and Ors(supra), it was held that breach of provisions of Section 11 of MOFA is a continuous breach giving continuing cause of action to Plaintiff.
36. In the instant case the Plaintiff seeks enforcement of the statutory obligations imposed by Section 3 and 4 of MOFA. Under Section 4 of MOFA the agreement with the flat purchaser is required to be in prescribed form i.e. Form V prescribed by Rule 5 of MOFA Rules. It may be noted that, in that prescribed form, there is an explanatory note which inter alia states that certain clauses shall be statutory and rsk 22 of 32 FA-1278-12-F18.doc shall be retained. Note 1 clarifies that a model form of agreement has been prescribed which could be modified and adapted in each case depending upon the facts and circumstances of each case but, in any event, certain clauses including clauses 9 and 22 shall be treated as statutory and mandatory and shall be retained in each and every individual agreements between the promoter and the flat taker. Clause 9 provides for the agreement to specify the date on which the possession of the flat shall be given to the flat purchaser and on demand by the flat purchasers to refund the amount already received along with interest. Clause 22 provides that the flat purchasers agreement to be presented for registration within the time limit prescribed by the Registration Act and imposes obligation on the Promoter to attend the office and admit execution thereof.
37. The Plaintiff was thus seeking enforcement of Clause 9 and 22 of the Model Agreement which are non derogable and constitutes continuing wrong till the obligations are complied with. The reliance placed by Mr. Joshi on Clause 7 of the Model Agreement pertaining to termination is mis placed as Clause 7 does not find mention as being statutory and mandatory in the Note 1 to the Model Agreement. Coming to the agreement dated 1st February, 2001 executed between the parties in respect of Shop No 4, there is no termination clause in the said agreement and it appears that the absence of termination rsk 23 of 32 FA-1278-12-F18.doc clause is for the reason that the total consideration agreed was Rs.10,03,460/- out of which the plaint pleads payment of Rs.9,10,000/- which amounts to substantial payment.
38. The Defendant No 1 has admittedly neither registered the agreement executed between the parties nor specified the date on which possession is to be handed over and has not handed over possession which amounts to a continuous breach of obligations imposed by MOFA and is thus a continuing wrong.
39. The decision of Balakrishna Savalram Fujari Waghinare, Duttatraya Gangaram Pujari Waghmare, Madhay Tukaram Pujari, Babu Tukaram Pujari Waghmare, Sankar Banjula Dastidar, Anna Parisa Chougule, and Brihanmumbai Electric Supply and Transport Undertaking (supra) considered the cause of action on the facts contained therein to ascertain whether the same is a continuing wrong about which there can be no dispute. I have hereinabove considered the pleadings in the plaint in light of the settled legal position and have held that the cause of action being one seeking enforcement of MOFA obligations constitutes continuing cause of action.
40. The decisions of Ahmmadsahab Abdul Mila (dead), Dahiben and Shakti Bhog (supra) was not rendered in the context of MOFA agreement and there is no quarrel with the proposition of law laid down in the said decisions. However the decisions does not assist the rsk 24 of 32 FA-1278-12-F18.doc case of the Respondent No 3. Pertinently in Shakti Bhog, the Apex Court noted the decision of Sopan Sukhdeo Sable vs Asst Charity Commr [(2004) 3 SCC 137] which held thus:
"15. There cannot be any compartmentalisation, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of context in isolation. Although it is the substance and not merely the from that has to be looked into, the pleading has to be construed as it stands without addition or subtraction or words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair splitting technicalities".
41. The Trial Court has held that the termination of the agreement by letter dated 23rd January, 2002 gave cause of action to file the suit, which finding is sought to be supported by Mr. Joshi. Apart from the above discussion that there is continuous cause of action as the plaint seeks enforcement of MOFA obligations, even if it is accepted that there is no continuing wrong the finding of the Trial Court cannot be sustained as the finding of Trial Court is based on reading of evidence rsk 25 of 32 FA-1278-12-F18.doc which is impermissible in an application under Order VII Rule 11 of CPC.
42. There is no specific paragraph in the plaint dedicated to the cause of action and paragraph 8 of the plaint, which is reproduced hereinabove, does not disclose that there is refusal of performance by the Defendant by termination which could be said to give rise to cause of action. The Trial Court in paragraph 16 of the impugned judgment has relied upon the contents of the communications dated 10 th January, 2002 and 23rd January, 2002. The communications were not annexed to the plaint and the reference in paragraph 8 of the plaint to those communications was to plead that by those two communications false and baseless allegations demanding purchase price were made. The only pleading is that Defendant has not right to terminate the agreement and there is no reference that by those two communications the agreements had been terminated. The communications were produced by the Plaintiff during the evidence and marked as Exhibit 13. The Trial Court has thus relied upon extraneous material and read the documents produced in evidence to determine the starting point of period of limitation which is impermissible.
43. If the case of Defendant No.3 that the cause of action arose upon termination of agreements is accepted even then the question being disputed question of fact will require evidence to be led. Article 54 of Schedule to Limitation Act, 1963 provides for period of three rsk 26 of 32 FA-1278-12-F18.doc years for specific performance of contract and the time begins to run where no date has been fixed for performance when the Plaintiff has notice that performance has been refused. If the cause of action is not held to be continuing cause of action, upon consideration of the entire evidence, it may have been possible for the Trial Court to come to the finding that the suit is barred by limitation but upon reading of the Plaint, without the said communications being on record, the finding of the Trial Court rejecting the plaint on basis of contents of the communication dated 23rd January, 2002 is unsustainable.
44. The contention of Mr. Joshi that the question of limitation is pure question of law ignores the pleadings in paragraph 8 which does not specifically plead that the agreements were terminated by the communication dated 23rd January, 2002 and thus the question of limitation is not pure question of law which could be decided in an application under Order VII Rule 11. The decision of S. Shivraj Reddy (supra) relied upon by Mr. Joshi does not assist the Respondent No 3 as in that case the death of the partner was an undisputed position and as partnership was at Will, the law provided for dissolution of partnership. The said decision is rendered in different factual scenario and is not applicable here when there is a dispute whether the agreement could have been terminated.
45. By way of amendment it is pleaded in paragraph 12(a) that the rsk 27 of 32 FA-1278-12-F18.doc Plaintiff came to know from the written statement dated 1 st August, 2005 that Defendant No 2 has issued share certificate in favour of Defendant No 3. The contention of Mr. Joshi is that the suit is barred as in the month of May, 2003 the Plaintiff was informed that the Defendant intended to put the Defendant No 3 in possession and the Defendant was impleaded in the year 2007. It needs to be noted that in paragraph 9, the Plaintiff has pleaded about the information received about the intention to put the Defendant No 3 in possession of Shop No 4 but it is only when the share certificate was issued in name of Defendant No. 3, about which the Plaintiff became aware after acquiring knowledge from the written statement dated 1 st August, 2005, it can be stated that there was unequivocal infringement of rights of the Plaintiff giving rise to cause of action to implead the Defendant No 3. Section 21 of Limitation Act provides that upon addition of new Defendant the suit shall be deemed to have been instituted when the Defendant was made a party. In the instant case though the plaint was amended, there was no amendment to the prayer clause and there is thus no challenge to the share certificate issued in favour of Defendant No 3 or seeking restoration of possession of flat. Therefore there is no question of limitation qua the Defendant No 3. The reliefs in the plaint remained confined to enforcement of MOFA obligations.
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46. Having regard to the discussion above, the answer to Point No (1) is in the affirmative.
AS TO POINT NO (2) :
47. By the impugned judgment, the Trial Court has rejected the plaint in respect of reliefs in terms of Shop No 4. As per Order II Rule 3 of CPC, the Plaintiff may unite in the same suit several causes of action against the Defendant. In the present case, the Plaintiff seeks declaration that the two agreements entered into between the Plaintiff and Defendant No 1 under MOFA are valid and subsisting and the consequential reliefs against the Defendant No 1. The prayer clause does not seek any relief qua the other Defendants.
48. The contention of Mr. Joshi is that the impugned judgment rejects the plaint against one set of Defendants and relies upon the decisions of The Church of Christ Charitable Trust and Educational Charitable Society represented by its Chairman (supra). In that case the Apex Court in context of Order VII Rule 11 (a) permitted the rejection of plaint in respect of one of the Defendants in absence of any cause of action against the said Defendant. The decision of Sejal Glass Limited (supra) held that it is not permissible to reject plaint qua any particular portion of a plaint including against some of the Defendants and continue the same against other. The decision of Madhav Prasad Aggarwal (supra) followed the decision of Sejal Glass rsk 29 of 32 FA-1278-12-F18.doc Limited (supra). Learned Single Judge of this Court considered the position in Chetana Shankar Manapure (supra) and learned Division Bench of this Court in Sheela Ram Vidhani & Ors Vs S.K. Trading Company and others followed the judgment of The Church of Christ Charitable Trust and Educational Charitable Society represented by its Chairman (supra) as the said decision which was prior in time was not brought to the notice of the Apex Court in the subsequent two decisions of Sejal Glass Limited and Madhav Prasad Aggarwal (supra) There is no quarrel with the course adopted by this Court to follow the decision which is prior in time. However the issue with which I am concerned is whether the impugned judgment rejects the plaint against one set of Defendants or rejects it qua one of the reliefs.
49. In the present case although Defendant No.3 was impleaded as party to the suit there is no relief which has been claimed qua Defendant No.3 and the reliefs were confined to enforcement of the obligation under MOFA qua the Defendant No 1 in respect of the two agreements for sale by treating the agreements as valid and subsisting. The application under Order VII Rule 11(d) of the Defendant No 3 seeks the following prayer:
"(a) That this Hon'ble Court be pleased to reject the Plaint in so far as the reliefs in terms of Shop No 4, Ground floor in a Building on Plot No 307, C.S. No 825(Part) of Scheme 52 of Worli rsk 30 of 32 FA-1278-12-F18.doc Estate, Worli, Mumbai 400 025 under the provisions of O-7 R-
11(d) of the Code of Civil Procedure, 1908 as barred by law of limitation."
50. In Sejal Glass Limited, (supra) the Apex Court noted with approval the decision in Bansi Lal vs Som Prakash AIR 1952 Punjab 38 which held that the law does not change merely because the Plaintiff chooses in one suit to combine several causes of action against several Defendants which the law allows him. The application under Order VII Rule 11 (d) of CPC seeks rejection of relief in respect of Shop No 4 as barred by limitation and the impugned judgment rejects the plaint in part not against Defendant No 3 but in respect of relief sought in respect of shop No.4, whereas it has continued with the plaint in respect of relief sought in respect of Flat No.4.
51. Hence, by the impugned judgment, the rejection of the plaint is not as regards the Defendant No 3 but is qua part of the relief in respect of shop No 4 which is impermissible in law. Accordingly, I answer the Point No (2).
CONCLUSION:
52. In light of the discussion above, the Appeal is allowed and the impugned judgment and order of the Trial Court dated 5 th July, 2012 is quashed and set aside. The suit stands restored qua the reliefs sought in respect of Shop No 4. In view of disposal of appeal, Interim/Civil rsk 31 of 32 FA-1278-12-F18.doc Applications, if any, do not survive for consideration and stand disposed of.
[Sharmila U. Deshmukh, J.]
53. At this stage, request is made for stay of the judgment for a period of 8 weeks. Said request is opposed by the learned counsel for the respondents. Judgment is stayed for a period of 8 weeks from the date of uploading of the judgment.
[Sharmila U. Deshmukh, J.]
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Signed by: Rajeshwari S. Karve
Designation: PA To Honourable Judge
Date: 20/09/2024 20:14:18