Patna High Court
Bhagwati Prasad Jalan vs Smt. Prem Lata Devi Kedia And Ors. on 14 March, 1997
Equivalent citations: 1997(1)BLJR592
Author: M.Y. Eqbal
Bench: M.Y. Eqbal
JUDGMENT M.Y. Eqbal, J.
1. The important question involved in this civil revision application is whether the plaintiff seeking a decree fro specific performance of contract would be entitled to amend the plaint by inserting an alternative relief of refund of money even at the stage where such relief become barred by limitation.
2. The plaintiff-petitioner filed Title Suit No. 101 of 1992 in the court of the subordinate Judge, Ranchi, against the opposite parties claiming a decree for specific performance of contract and for a direction to the opposite parties to execute and register the sale deed in his favour. The said suit was instituted by filing a plaint on 5.2.1992. According to the plaintiff, one Ghisu Lal Jain acting as an agent and broker on behalf of Ram Narain Kedia, father-in-law of defendant No. 1, entered into an agreement for sale of 4 Kathas of land out of Municipal Survey Plot No. 1598 for a sum of Rs. 16, 000/- and on receipt of Rs. 5, 000/- as advance on 14.1.1980 besides Rs. 5, 000/- as commission. On 19.5.1981, the defendant No. 1 executed an agreement in favour of the plaintiff on the death of his father in respect of 4 kathas of land out of M.S. Plot No. 1598/B and the plaintiff was put in possession thereof. The sale deed was to be executed within three months from the date of agreement. It is alleged that inspite of repeated requests, the deed was not executed and a suit being Title Suit No. 115 of 1984 was filed by the plaintiff against Prem Lata Devi Kedia and Ghisu Lai Jain which was decreed on the basis of compromise on 13.5.1991. Consequent upon compromise decree, an agreement was executed by defendant No. 1 on 13.5.1991 in favour of the plaintiff for the sale of 3 1/2 kathas of Plot No. 1598 for a sum of Rs. 1, 50, 000/- out of which, the defendant No. 1 received Rs. 2, 500/- as advance on 13.5.1991.
According to the terms of agreement, the plaintiff deposited with defendant No. 3 a sum of Rs. 1, 26, 000/-. Inspite of repeated requests no sale deed was executed and consequently legal notice was served on behalf of the plaintiff on 2.11.1991. On these facts, the plaintiff-petitioner filed the aforesaid, inter-alia, for specific performance of contract dated 13.5.1991. During the pendency of the suit, after about four years, the plaintiff-petitioner filed a petition for amendment of the plaint on 13.5.1996 praying for inclusion of an alternative relief for a decree of refund of a sum of Rs. 1, 26, 000/- and Rs. 2, 500/- plus cost of boundary together with 20 per cent interest from 13.5.1991. By the impugned order, the learned court below refused the prayer for amendment of the plaint and rejected the petition on the ground that the relief sought for become barred by limitation and, therefore, such amendment cannot be allowed.
3. Mr. A.K. Sahani, learned Counsel for the petitioner assailed the order as being illegal and wholly without jurisdiction. Learned Counsel submitted that the learned court below has completely misconstrued the provision of Section 22 of the Specific Relief Act, 1963 (hereinafter to be referred to as' the Act'). Learned Counsel submitted that in a suit for specific relief of contract, the plaintiff can seek a relief for refund of earnest money at any stage of proceeding and the question of limitation does not arise. On the other hand, Mr. A. Sahay, learned Counsel for the opposite parties submitted that the provision of Section 22 of the Act is subject to the law of limitation. Learned Counsel submitted that the learned court below was fully justified in holding that such relief on the date of filing of the amendment petition was barred under the law of limitation. Learned Counsel has relied on a decision of the Supreme Court in the case of Muni Lal v. The Oriental Fire & General Insurance Co. Limited and Anr. .
4. Before proceeding to consider the rival contention of the learned Counsel appearing for the parties, it is worth to be looked into the provision of Section 22 of the Act which reads as under:-
Power to grant relief for possession, partition, refund of earnest money, etc.-'(1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908, any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for-
(a) possession, or partition and separate possession, of the property, in addition to such performance; or
(b) any other relief to which he way be entitled, including the refund of any earnest money or deposit paid or made to him, in case his claim for specific performance is refused.
(2) No relief under Clause (a) or Clause (b) of Sub-section (1) shall be granted by the Court unless it has been specifically claimed:
Provided that the plaintiff has not claimed any such relief in the plaint, the court shall at any stage of the proceeding allow him to amend the plaint on such terms as may be just for including a claim for such relief.
(3) The power of the court to grant relief under Clause (b) of Sub-section (1) shall be without prejudice to its powers to award compensation under Section 21.
5. From bare perusal of the aforesaid provision, it is apparent that in a suit for specific performance of contract, the plaintiff may ask for possession or partition or any other relief including the refund of earnest money but the court shall not grant such relief unless it has been specifically claimed in the suit. This provision further entitled the plaintiff to claim such relief at any stage of the proceeding by amending the plaint. Section 22 is a new section brought by the Legislature for the first time in 1963. Prior to that, consistent view of the different courts was that a decree of specific performance only declares the right of a decree holder in favour of transfer of property covered by the decree executed in his favour. A decree by itself does not transfer title. Therefore, so long as the sale deed is not executed in favour of the decree holder either by defendant in the suit or by the court, the title to the property remains vested in the defendant and till the execution of the sale deed, the decree-holder has no right to possession of the property. Some courts also took a view that in a suit for specific performance of contract of sale, even if a relief for recovery of possession is not claimed, the executing court is competent to deliver possession, inasmuch as a decree for specific performance of contract includes everything incidental to be done by one party or another to complete the sale transaction. The rights and obligations of the party in such matter is covered by Section 55 of the Transfer of Property Act. A Bench of this Court also took the view that in a suit for specific performance of contract, the relief of possession is inherent in such suit and the court executing decree for specific performance of such a contract can grant possession of the property to the decree holder even though the decree did not provide for delivery of possession. However, after inserting the provision of Section 22 of the Act of 1963, the controversy has been set at rest.
6. Section 22 of the Act is a rule of pleading which has been introduced in order to avoid multiplicity of proceedings. As per the said provision, the plaintiff, in a suit for specific performance of contract may now claim a decree for possession and for refund of the earnest money. The said provision further empowers the court to allow the plaintiff to include such relief by amending the plaint at any stage of the proceeding. Sub-section (2) of Section 22 of the Act, however specifically provides that these reliefs cannot be granted by the court, unless the same have been specifically claimed by the plaintiff in the suit.
7. There is no dispute that a relief for recovery of possession is inherent in a suit for specific performance of contract and, therefore, the court may allow the plaintiff to add such relief at any stage of the proceeding, but the question is whether a relief for refund of the earnest money can be allowed by the court to be included in a suit by amending the plaint at any stage of the proceeding. In other words, whether such amendment of the plaint shall be subject to the law of limitation. For this purpose, it is worth to notice the view expressed by different courts in India.
8. In the case of Kamakhya Narain Singh v. State of Bihar , the plaintiff filed a suit for declaration that the provisions of the Bihar Forest Act are illegal and ultra vires and for a permanent injunction. During the pendency of the suit, a petition for amendment of the plaintiff was filed for adding a relief for decree of damages and the same was allowed by the trial court. When the matter came to this Court, it was held:-
But the difficulty is that such an amendment could not be allowed at this stage because of the bar of limitation under Article 109 of the Limitation Act. The suit was filed in 1949 and it would be against legal principle to allow an amendment of this kind at this stage after a lapse of three years in face of the fact that such a claim "would be barred by limitation.
In Kisanda Rupchand v. Rachappa Vithoba 33 Bombay 644, has held as under.
All amendment ought to allowed which satisfy the two conditions (a) of not working injustice to the other side and (b) of being necessary for the purpose of determining the real question in controversy between the parties...but I refrain from citing further authorities, as, in my opinion, they all law down precisely the same doctrine. That doctrine, as I understand it, is that amendment should be refused only where the other party cannot be placed in the same position as if the pleading had been originally correct, but the amendment would cause him an injury which could not be compensated in costs. It is merely a particular case of this general rule than where the plaintiffs seek to amend by setting up a new claim in respect of a cause of action which since the institution of suit had become barred by limitation, the amendment must be refused; to allow it would be to cause the defendant an injury which could not be compensated in costs by depriving him of a good defence to the claim. The ultimate test therefore still remains the same; can the amendment be allowed without injustice to the other side, or can it not?
9. The Supreme Court took notice of the above observation of the Bombay High Court in the case of pirgonda Hongonda Patil v. Kalgonda Shidgonda Patil and Ors. and held as under:-
It is worthy to note that the period of limitation for a suit under order XXI Rule 103, Civil P.C., namely, one year from the date of the adverse order made under Rule 99 of the order XXI, had expired some time before 20.11.1948, on which date the appellant made his first application pointing out the defect in the plaint, the adverse order under Order XXI Rule 99, having been made on 12.4.1947. The application which the appellant made on 20.11.1948, had not the merit of such beneficient purpose as is now sought to be made out by learned Counsel for the appellant. When the application was made, the period of limitation had already expired and the appellant very clearly said that no permission should be given to the plaintiff to make an amendment thereafter. We do not therefore think that the appellant can make much capital out of the application made on his behalf on 20.11.1948.
10. In the cas of Lakshmi sao and Anr. v. Swaroop Chand Jain and Anr. 1974 BLJR 750, the plaintiff initially filed a suit seeking relief for declaration to the effect that the plaintiff No. 1 was the purchaser of the truck, having purchased the same in the name of plaintiff No. 2, his brother and the defendants had no right, title and interest over the same, the said suit was contested by the defendants denying the allegations made in the plaint and pleaded that he never entered into any transaction of the plaintiffs, nor the plaintiffs had made any payment. During the hearing of the suit, the plaintiffs filed a petition for amendment of the plaint for adding a relief for recovery of possession of the truck and in the alternative, for recovery of the price of the truck. A Bench of this Court considering the maintainability of the said petition has held as under:
6. According to the provisions of Order VI, Rule 17 of the Code of Civil Procedure, a Court is empowered to allow amendment at any stage of the proceeding in such manner, as may be necessary for the purpose of determining the real question in controversy between the parties." From the facts stated, it is manifest that the plaintiffs went to Court essentially with an intention to secure the possession of the truck itself on a mere declaration that plaintiff No. 1 was the real purchaser of the said truck. This case of the plaintiffs has not been accepted by the trial court. The amendment introduced on 4.10.1966 claiming, in the alternative, for recovery of the price of the said truck having been advanced on 4.10.1961, was obviously barred by limitation, i.e. a suit for recovery of either the sum of Rs. 4, 300/- paid by the plaintiffs by a cheque to the Company of Sri B.P. Agarwalla, or the sum of Rs. 3.701/- alleged to have been paid to defendant No. 1 on 4.10.1961, was obviously barred by limitation or the dale of the amendment. This amendment was also not necessary at all for the purpose of determining the real question in controversy between the parties, as it was introduced in the plaint. The relief sought for by the amendment was, there fore, not an alternative relief simpliciter in the sense that on failure of the plaintiffs to get the main relief, the Court could grant them the alternative relief....
11. In Thakamma Mathew v. M.A. Khan A.I.R. 1993 SC 1121, the fact of the case was that the plaintiff entered into an agreement which the defendant to sell property for a sum of Rs. 90.000/- out of which Rs. 3, 000/- (three thousand) was paid as advance on the date of execution of the agreement. The case of the plaintiff was that about a fortnight after execution of the agreement, the defendant obtained possession of the property on the ground that it was needed temporarily in connection with a marriage. The transaction of sale was not finalized within a period of two months prescribed in the agreement. The plaintiff-appellant then sent a notice that since the sale had not been completed within the stipulated period, the agreement had been can called and the advance was forfeited. By the said notice, defendant was called upon the deliver possession of the suit premises. The plaintiff thereafter filed a suit for declaration that the agreement stands cancelled and for recovery of possession of the suit premises. The said suit was resisted by the defendant who pleaded that he was ready to perform his part of the agreement and the plaintiff had defaulted. The trial court decreed the suit and it was held that there was no justification for granting specific performance of the agreement. On appeal being filed by the defendant, the High Court took the view that there was no legal impediment for specific performance and if the appellant had not filed the suit, the defendant would have resorted to file a suit. The High Court, therefore, in exercise of their discretion under Order VII, Rule 7 of the Code of Civil Procedure moulded the relief in favour of the defendant and granted specific performance. The plaintiff then came in appeal before the Apex Court. The apex court while setting aside the judgment and decree of the High Court has held as under:-
8. The learned Counsel for the appellant has submitted that the High Court has virtually passed a decree for specific performance of the agreement to sell in favour of the defendant in the suit filed by the appellant and that such a relief could not be granted under Order VII, Rule 7, CPC Moreover, a decree for specific performance could not be passed in the present case since the period of limitation prescribed for filing a suit for specific performance had long expired and the conditions which are required to be fulfilled by a person seeking a decree for specific performance of the contract under Section 16 of the Specific Relief Act were not satisfied in the present case. It has also been urged by the learned Counsel for the appellant that the High Court has erred in proceeding on the basis that the principle of part performance would be attracted and a decree for possession could not be passed in favour of the appellant against the respondent. It has also been urged that the High Court had disposed of the appeal of the respondent and dismissed the suit of the appellant without considering the cross appeal filed by the appellant.
We find considerable force in the aforesaid contentions of the learned Counsel. In order that decree for specific performance of a contract may be passed it is necessary to consider whether such a relief can be granted in view of Section 16 of the Specific Relief Act, 1963. In other words the person seeking such a decree has to satisfy that Section 16 of the specific Relief Act does not bar the grant of such a relief and the person against whom the decree is passed can show that the relief of specific performance cannot be granted in view of the provisions of Section 16 of the Specific Relief Act. Clause (c) of Section 16 postulates that the person seeking specific performance of the contract must file a suit wherein he must aver and prove that he was performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him. Moreover, in view of Article 54 of the Limitation Act, 1963, a suit for specific performance of contract has to be filed within three years of the date fixed for the performance or if no such date is fixed where plaintiff has notice that performance is refused. In the present case, the appellant by his notice dated February 10, 1975 had clearly indicated that he had cancelled the agreement and had forfeited the advance amount of Rs. 16, 000/- deposited by the defendant. By the said notice, it was clearly indicated that the appellant was no longer willing to perform the agreement to sell dated November 12, 1974. In the circumstances, it was incumbent upon the defendant to have filed a-suit for specific performance of the contract within the period of three years from the date of the said notice dated February 10, 1975 and if such a suit had been filed by the defendant, it would have been open td the appellant to show that it was barred by the provision contained in Section 16 of the Specific Relief Act. The defendant did not choose to adopt that course and remained content with defending the suit filed by the appellant for cancellation of the agreement to sell dated November, 12, 1974 and for recovery of the possession of the property. Even if it is found that the appellant was not entitled to succeed in the said suit and the said suit is liable to be dismissed it would not entitle the defendant to obtain a decree for specific performance of the contract in those proceedings. The High Court/with due respect, was not right in invoking its discretionary power Order VII, Rule 7, CPC to grant such a relief to the defendant. The said power conferred on the Court does not enable it to override the statutory limitations contained in Section 16 of the Specific Relief Act, 1963 and Section 54 of the Limitation Act, 1963 which preclude the grant of the relief of specific performance of a contract except within the period prescribed by the section.
12. In Munilal v. Oriental Fire & General Insurance Co. Ltd. , the Apex Court was considering a similar question in the suit filed by the plaintiff-insured against the Insurance Co. The suit was originally filed by the insured for declaration that he was entitled to the total loss of the truck from the insurance company as the truck was lost by an act of misfeasance of the driver. The trial court dismissed the suit holding that the suit for mere declaration without consequential relief for payment of compensation for the loss of the truck was not maintainable. On appeal, the District Judge confirmed the said judgment and decree, which was further affirmed by the High Court in Second Appeal. The insured then moved the Apex Court by filing a special leave petition. While dismissing the Appeal, the apex court held as under:-
4...In this appeal, the appellant has merely asked for a declaration that he is entitled to the payment for the loss of the truck in terms of the contract but not consequential relief of payment of the quantified amount, as rightly pointed but by the courts below. The question, therefore, is whether the amendment under Order VI, Rule 17 CPC could be ordered in this background. Section 3 of the Limitation Act speaks of bar of limitation providing that subject to the provisions contained in Sections 4 to 24 (inclusive) every suit instituted, after the prescribed period shall be dismissed, although limitation has not been set up as the defence. In other words, unless there is a power for the court to condone the delay, as provided under Sections 4 to 24 (inclusive), every suit instituted after the prescribed period shall be dismissed although limitation has not been set up as the defence. Order VI, Rule 17, CPC envisages amendment of the pleadings. The court may at any stage of the proceedings allow either parties to alter or amend his pleadings in such manner and on such terms as may be just and all such amendments shall be made as may be necessary for the purpose of determining the real question of controvery between the parties. Therefore, granting of amendment on such terms is also a condition for the purpose of determining the real question in controversy between the parties. The amendment to grant consequential relief sought for in this case, is as envisaged in proviso to Section 34 of the Specific Relief Act, 1963. That relief was, however, available to him, to be asked for, when the suit was filed.
The Apex Court further held as follows:-
6. On a consideration of this case in its proper perspective, we are of the view that granting of amendment of plaint seeking to introduce alternative relief of mandatory injunction for payment of specified amount is bad in law. The alternative relief was available to be asked for when the suit was filed but not made. He cannot be permitted to amend the plaint after the suit was barred by the Limitation during the pendency of the proceeding in the appellate court or the second appellate court. Considered from this perspective, we are of the opinion that the District Court and the High Court were right in refusing the prayer of amendment of the suit and the courts below had not committed any error of law warranting interference.
13. Admittedly, in the instant case, the suit was filed on 5.2.1992 for a decree for specific performance of the agreement which was entered into by and between the parties on 13.5.1991. The relief for refund of money was available to the plaintiff on the date of institution of the suit, but no such relief was claimed. It was only after expiry of about five years that an amendment petition was filed in 1996 seeking alternative relief of refund of the earnest money. There cannot be any dispute that the suit for mere refund of the earnest money was not maintainable beyond the period of three years from the date when the earnest money was advanced by the plaintiff to the defendant. The claim for refund of the earnest money became barred by limitation in 1996 when the amendment petition was filed. I am, therefore, of the view that such amendment seeking the relief which became barred by limitation cannot be allowed keeping in view the law laid down by the apex court. The learned court below, therefore, rightly rejected the application filed by the plaintiff petitioner, by the impugned order. There is, therefore, no infirmity or illegality in the impugned order passed by the Court below.
14. This Civil Revision Application is, accordingly, dismissed.