Delhi High Court
Surinder Sethi vs Deepak Kapoor on 28 September, 2000
Author: Vikramajit Sen
Bench: Vikramajit Sen
JUDGMENT Vikramajit Sen, J.
1. The plaintiff's under Order XXXIX Rules 1 and 2 and Section 151 C.P.C. is to be decided. During the hearing of the application arguments on the maintainability of the suit were also addressed at length.
2. The plaintiff has filed the present suit for the Specific performance and possession of property, L.I.G. Rat No. H-146, Ashok Vihar, New Delhi. It is alleged that an Agreement-cum-Receipt was executed between the parties on 26.3.1996, in which the sale consideration was fixed at Rs. 6,60,000/-. A sum of Rs. 30,000/- was paid in cash and the balance sale consideration was to be paid within two months. The Defendant has denied that any such agreement had taken place. It is stated that his signatures was obtained on some blank papers and some printed cyclostyled perform as which were also blank. The Defendant has signed these documents in good faith since the plaintiff was known to his family members. Reliance was also been placed on the existence of two documents in which one states the price as Rs. 6,60,000/- whereas the other mentions only Rs. 6,00,000/-. Attention has also been drawn to the fact that the Agreement-cum-Receipt postulates that in case the Defendant failed to get the papers executed then he would be liable to pay double the earnest money to the purchaser or his nominee. It is submitted that even if this disputed document is perused, it would disclose that the plaintiff was quite aware of his rights and has, therefore, written in hand that he would also have the option of specific performance of the agreement.
3. Normally, since only a prima facie case had to be made out at the stage of disposal of an application under Order XXXIX Rules 1 and 2, the averments of the adversaries would have to await the final decision in the case after the Trial of the suit. The plaintiff would, therefore, normally be entitled to interlocutory relief. However, three interesting questions of few have been arisen as a result of which detailed arguments have even been addressed on the maintainability of the suit. The first contention raised by Mr. Sherawat, learned Counsel for the Defendant is that the suit is barred by limitation. In his submission, it is so for the reason that a notice dated 7.10.196 had been issued by the plaintiff to the Defendant in which it was specifically stated that the plaintiff proposed to file a suit for Specific performance in the Agreement. The computation of period of limitation would, therefore, commence from this date since admittedly acceptance of the notice was refused and/or was not complied with by the Defendant. Learned Counsel for the Defendant, however, contends that in view of Article 54 of the limitation Act, the suit is within time. Mr. Lonial, Learned Counsel further contends that a refusal of the notice would not have the effect of the creation of cause of action.
4. Article 54 reads as follows:
Description of suit Period of limitation Time from which period begin to run
54. For specific performance of a contract Three Years The date fixed for the performance, or if no such date is fixed, when the plaintiff has, notice that performance is refused."
5. Mr. Lonial has relied on a Clause in the Agreement-cum-Receipt dated 26.3.1996 (execution of which has been denied by the Defendant) which stipulates that an N.O.C. from F.C.I. was to be arrange by the Defendant, who would also have the property mutated in his favour, and that the final payment would have to be made only after the mutation was done. He had submitted that since the Defendant had not been informed the plaintiff that either of these stipulation had been complied with, merely because a notice had been issued, the cause of action for filing a suit for specific performance could not be treated as having arisen. I am, however, unable to agree with this contention. In the even that the Defendant had applied for the N.O.C. and/or obtained the N.O.C., and/or had applied for or carried out the mutation, the period of limitation could not be held to have commenced. In any of these incidence, it would start to run only if in respect of either both of these actions, the Defendant had implicity or explicitly conveyed his refusal to complete the transaction. It would also not start to run if the Defendant had Prevaricated by issue by making representations to the plaintiff that action for achieving either of the two actions was in process. Circumstances must exist which would prima facie show that the Defendant had not repudiated the agreement or obligations contained therein. In the notice dated 7.10.1996, the plaintiff has categorically mentioned that if action was not taken by the Defendant a suit for specific performance would be filed. It is not the plaintiffs case that after the refusal of the legal notice he had issued another notice and was therefore, not wholly convinced that the Defendant had no intention performing his contractual obligation. In fact, in the present case, on 9.12.1996, the plaintiff had filed a suit for permanent injunction and mandatory injunction. The prayer is of significance and has legal ramifications which appear to me to be fatal to the plaintiffs present case. The prayer is, therefore, reproduced:
6. It is, therefore, most respectfully prayed that a decree of Permanent Injunction Be passed in favour of the plaintiff and against the Defendant, thereby restraining the defendant, his attorney, agent etc. from transferring/alienating/selling or entering into Agreement of sale/transfer Flat bearing No. H-146, Ashok Vihar Phase-I, Delhi-1100 052, in any manner whatsoever.
7. It is, further prayed that a decree of Mandatory Injunction be passed in favour of the plaintiff and against the defendant, thereby directing the defendant, to transfer the handover the peaceful vacant possession of Flat No. H-146 Ashok Vihar, Phase-I, Delhi-52 against receipt of balance consideration amount, to the plaintiff.
8. Any other or further relief which this Hon'ble Court may deem fit and proper under the circumstances of the case be also awarded to the plaintiff and against the defendants.
9. Even it the plaintiff's contention that the period of limitation should not be computed from 7.10.96 is accepted, it must at least be held to have commenced on 9.12.1996, when legal action in respect of the very contract was commenced. If this date is taken into consideration, the present suit is still beyond limitation, since it has been filed after three years i.e. on 21.12.1999. The plaintiff has adopted the facile and futile argument that Limitation commenced" with effect from 28.2.1997 on which date he received a copy of the written Statement of the Defendant denying his signing of the Agreement dated 26.3.1996. If the plaintiff was compelled to file a suit for Permanent and Mandatory Injunction, surely, on the same premises, he ought to have included the prayers contained in the present suit also. Significantly, in paragraph 7 of the suit filed in the Civil Court, it has been averred that "cause of action arose on 7.10.96 when a legal notice was sent to the Defendant which was duly served and the Defendant failed to comply with the terms and conditions of the Agreement and the notice served on him. "I am of the view, therefore, that the present suit having been filed beyond the stipulated period of limitation is not maintainable.
10. Learned Counsel for the Defendant has further submitted that, without prejudice to the above contention, the suit is clearly barred under on consideration of the principles of Order II Rule 2 of the Code of Civil Procedure. He had submitted that since the relief of Specific Performance was available to the plaintiff when he had initiated the first legal proceedings on 9.12.1996, the entire claim ought to have been pleaded. This having not been done, the provisions of Order II Rule 3 clearly barred the filing of a subsequent action, i.e. the present suit. The arguments put forwarded by Mr. Lonial were the same as on the question of limitation. However, apart from the reasons which have persuaded me to held that the present suit is barred by limitation, in the context of the second objection, I find that the prayer for mandatory injunction, as contained in the suit disposed off by the Civil Judge, in essence partakes of the nature of Specific Performance. Mr. Lonial has submitted that the plaintiff may have been advised to pray for mandatory injunction in order to save court-fee. This submission further sounds the death-knell of the present suit. If the plaintiff had prayed for a mandatory injunction only to save court fee then the inescapable inference is that he was quite aware of the fact that he ought to have filed the suit for Specific Performance. At least he was quite aware of the fact that the relief of specific performance was available to him. Order II Rule 2 appears to be a complete bar to the present suit. Digressing from this question, it would be relevant to recall that in the plaint filed before the Senior Civil Judge, the plaintiff has prayed in paragraph 4 that "in spite of setting the flat mutated in favour of the defendant and the plaintiff was ready to pay the balance amount to the defendant, the defendant is not ready to transfer the same to the plaintiff despite his request and demands made by the plaintiff to the defendant." The averment such as this would only mandate the filing of the suit for Specific Performance. Having failed to do so when the first suit was filed, this relief cannot now be entertained. Legal procedure abhors piecemeal adjudication of grievances.
11. Finally, the Learned Counsel for the Defendant has argued that the principle of res judicata apply in full force against the plaintiff. The suit for permanent and Mandatory Injunction was heard by Ms. Sukhvinder Kaur, Civil Judge who farmed the following Preliminary Issues.
"1. Whether the suit is maintainable in the present from? OPD
2. Whether the suit has been properly valued for the purpose of court-fee and jurisdiction? Onus on the parties."
12. The very contention advanced before me was also raised before the Civil Judge, who held in favour of the Defendant and against the plaintiff on this issue. The observation was that the suit for specific performance was the proper remedy. The second Preliminary Issue was also decided against the plaintiff. In answer, Mr. Lonial, Learned Counsel for the plaintiff submits that the principle of res judicata was not attracted in the present case since the issue of whether the plaintiff was ready and willing to perform his part of the agreement had not been tried and no decision had been returned on this issue. I cannot agree that the reliefs prayed for are totally distinct, and that the present suit is maintainable because a finding on 'readiness and willingness' was not returned. As has been submitted by him, the relief of mandatory injunction was a camouflage for obtaining relief which was substantially of the nature of specific performance, by evading the payment of the proper court fee. Even if the classical ingredients of res judicata are not made out, the principles of constructive res judicata will apply in full force. The following passage from Satyadhyan Ghosal and Ors. v. Smt. Deorajin Debi and Anr., deserve reproduction:
"The principle of res judicata is based on the need of giving a finality to judicial decisions. What it says is that once a res judicata, it shall not be adjudged again Primarily it applies as between past litigation and future litigation. When a matter - whether on a question of fact or a question of law - has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher Court or because the appeal was dismissed, or no appeal lies, neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again. This principle of res judicata is embodied in relation to suits in Section 11 of the Code of Civil Procedure; but even where Section 11 does not apply, the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation. The result of this is that the original court as well as any higher court must in any future litigation proceed o the basis that the previous decision was correct."
13. Apart from the above, the further contention raised by learned Counsel for the Defendant is that where the agreement relied upon by the plaintiff itself envisaged the payment, of double the amount received as compensation, a suit for Specific Performance would not be maintainable. Learned Counsel for the plaintiff submitted that the provision of Section 10 of the Specific Relief Act clearly permit the filing of the present suit. It reads as follows:
"10. Cases in which specific performance of contract enforceable- Except as otherwise provided in this Chapter, the Specific Performance of any con tract may, in the discretion of the Court, be enforced-
(a) When there exists no standard for ascertaining actual damage cause by the non-performance of the act agreed to be done; or
(b) when the act agreed to be done is such that compensation in money for its non-performance would not afford adequate relief.
Explanation - Unless and until the contrary is proved, the court shall presume-
(i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and
(ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases:-
(a) where the property is not an ordinary article of commerce; or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;
(b) where the property is held by the defendant as the agent or trustee of the plaintiff."
14. He contends that the section acknowledges that specific performance and not damages is the envisaged relief since immovable property is in question. The interpretation of Learned Counsel for the plaintiff would be attractive, but for the opening words of the Explanation, Learned Counsel for the plaintiff has glossed over the words "unless and until the contrary is proved." He has submitted that the effect of these words is that at the present stage, it cannot be assumed that the contrary has been proved, and that a finding on this point can only be arrived at after the parties have lead evidence. The argument is fallacious for the reasons that it is the plaintiff who is relying an agreement which contains a stipulation that in the case of a default on the part of the seller, double the money would be payable. The choice of remedy has been made by the plaintiff and he must be held to his decision. Without prejudice to his contention that this Agreement has not been executed by the Defendant, and that the handwritten clauses have not been countersigned by the Defendant his Learned Counsel has relied on these very clauses. Therefore, nothing remains to be proved on this vital issue and if the Court permits and/or compels the parties to go to Trial even in these circumstances, it would occasion a miscarriage of justice. The Hon'ble Supreme Court has opined that the parties must not be forced to go for Trial if, on a inspection of the pleadings, it is obvious that the suit is liable either to be decreed or rejected. The same reason would apply to the present case. The relief of specific performance will, therefore, not be available to the plaintiff since damages have already been liquidated. Specific performance is indisputably discretionary in nature, and it would be inappropriate to grant it where an alternate remedy has been agreed upon.
15. For the above reasons, I am satisfied that the suit is not maintainable and deserves to be dismissed. When the suit itself is liable to be dismissed, a prima facie case has not been made out.
16. Accordingly I.A. No. 554/2000 as well as Suit are dismissed with costs.