V.N.Parameswaran vs Muhammed Musthafa on 22 February, 2022

[Cites 33, Cited by 0]

Kerala High Court

V.N.Parameswaran vs Muhammed Musthafa on 22 February, 2022

This appeal is filed against the judgment and decree in O.S.No.345/2000 on the file of the Subordinate Judge's Court, Palakkad. The suit is one for specific performance or in the alternative, for return of advance money. The relief of specific performance was granted by the court below. Hence the defendant in the suit is before this Court with the appeal. The respondent herein is the plaintiff in the suit. The parties in this appeal will be referred to as described in the suit.

2. Brief facts of the case - The plaintiff and the defendant entered into Ext.A1 agreement dated 08/11/1993 by which the defendant agreed to sell the plaint schedule property having an extent of 4 Acres. The property takes in the building housing V.V.P. High School, Palakkad as also other buildings and shops. The defendant obtained jenmam right over the property as per a Will dated 10/06/1989 executed by his grandfather, 3 R.F.A.No.581 of 2007 late V.P. Parameswaran Iyer, in his favour. As per the Will, the defendant is the Managing Trustee of the property. The total sale consideration was fixed at ₹ 95 lakhs. On the date of the agreement, the plaintiff paid an amount of ₹ 1 lakh as advance sale consideration. As per the terms of the agreement, the plaintiff was to pay a further sum of ₹ 9 lakhs to the defendant on 30/04/1994 and the balance amount of ₹ 85 lakhs, when possession was handed over to the plaintiff and the sale deed executed. The management of the aforesaid school had been taken over by the Government of Kerala and so the Government was in possession and management of the school. The High Court as per order in O.P.No.3772/1987 had ordered the Government to handover the management of the school and possession of the buildings to the defendant by 01/04/1994. At the time of execution of Ext.A1, the defendant was expecting to get possession by 30/04/1994. However, that did not materialise. The plaintiff in April 1994 had in fact offered to pay ₹ 9 lakhs as per the stipulations contained in Ext.A1. However, the defendant was not ready to accept the amount on the ground that he had not received possession from the Government. The defendant informed the plaintiff that 4 R.F.A.No.581 of 2007 he would receive the balance amount only after the management of the school and possession of the buildings is obtained from the Government. Hence the plaintiff was waiting all along for the said event to happen. About 10 days before the filing of the suit, the plaintiff came to know that a few months' back the Government has handed over the management of the school and possession of the buildings in the property to the defendant. However, the defendant failed to inform the plaintiff or handover possession of the property as per the terms of Ext.A1 agreement. The defendant is attempting to alienate the property to strangers for a higher price, for which he has no right. Therefore, the plaintiff issued Ext.A2 notice dated 20/07/2000 to the defendant seeking specific performance of the contract to which Ext.A3 reply notice dated 02/08/2000 has been sent raising false and frivolous contentions. The plaintiff was always ready and willing to perform his part of the contract. It was the defendant who failed to perform his part of the contract and hence the suit, seeking a decree for specific performance or in the alternative, for return of the advance amount of ₹ 1 lakh with interest @ 24% p.a. from the date of agreement till realisation and a further sum of ₹ 5 lakhs as compensation. 5 R.F.A.No.581 of 2007

3. The defendant filed written statement denying the plaint allegations. He contended that the plaintiff was never ready and willing to perform his part of the contract. The allegation that the plaintiff had offered to pay ₹ 9lakhs in April 1994 and that it was the defendant who had refused to receive the same on the ground that he is yet to receive possession of the property from the Government is false and incorrect. The plaintiff is also not entitled to return of the advance amount as he has committed breach of the contract. The plaint does not disclose any cause of action. The suit is barred by limitation. Hence the plaint ought to have been rejected under Order VII Rule 11 CPC.

4. The plaintiff was examined as PW1 and Exts.A1 to A3 were marked. The defendant examined himself as DW1. No documents were marked on the side of the defendant. The court below after considering the oral and documentary evidence as well after hearing both sides, proceeded to decree the suit for specific performance.

5. In the appeal memorandum, it is alleged that the impugned judgment is contrary to law and based on a misappreciation of evidence let in. The plaint does not reveal any cause of action and therefore it ought to 6 R.F.A.No.581 of 2007 have been rejected under Order VII Rule 11. The suit was also hopelessly barred by limitation, but the court below failed to appreciate the said fact. The plaintiff failed in establishing readiness and willingness to perform the terms of the contract. As the impugned judgment is against law, facts and evidence, the same is liable to be set aside.

6. Heard Sri. S.V. Balakrishna Iyer, the learned Senior counsel for the appellant and Sri. S. Sreekumar, the learned Senior counsel for the respondent.

7. The points that arise for consideration in this appeal are:

(1) Was the plaint liable to be rejected for want of pleadings disclosing a cause of action?

(2) Is the finding of the court below on the issue relating to limitation erroneous, calling for an interference by this Court? (3) Was the trial court right in finding that the plaintiff was always ready and willing to perform his part of the contract as per the stipulations contained in Ext.A1?

(4) Was the court below justified in decreeing the suit for specific performance?

R.F.A.No.581 of 2007

8. Points 3 and 4 - Execution of Ext.A1 agreement dated 08/11/1993 and the clauses contained therein are not disputed. It is the interpretation of the clauses that is in dispute. The fact that the property was agreed to be sold for a total sale consideration of ₹ 95 lakhs and that an amount of ₹ 1 lakh had been paid on the date of the agreement is admitted. The dispute revolves around the interpretation to be given to clause (3) of Ext.A1. According to the defendant, time was the essence of the contract, which is apparent from clause (3) of the agreement. Compliance of clause (3) was mandatory, as per which the plaintiff was bound to pay an amount of ₹ 9 lakhs on 30/04/1994. However, he failed to make the payment on the said day. The plaintiff was never willing and ready to perform his part of the contract. Therefore, breach of the contract has been committed by the plaintiff. The plaintiff on the other hand contends that there was never any breach on his part. Time was never the essence of the contract. It is well settled that in contracts relating to immovable property, time is not the essence of the contract unless the same is specified in the contract. Reference was made to Section 55 of the Contract Act and it was submitted by Sri. S. Sreekumar, the learned Senior 8 R.F.A.No.581 of 2007 counsel for the plaintiff, that if the intention of the parties was to make time the essence of the contract, then the defendant had the option to treat the contract as voidable when the plaintiff, according to him, had failed to pay ₹ 9 lakhs on 30/04/1994. However, he never resorted to the said remedy, which would also show that time was not the essence of the contract. In support of this argument, reference was made to the decision of the Hon'ble Supreme Court in Gomathinayagam Pillai vs. Palaniswami Nadar (AIR 1967 SC 868).

9. In Gomathinayagam Pillai (Supra) after referring to Section 55 of the Contract Act, it has been held that it is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is the essence of the contract. Intention to make time the essence, if expressed in writing, must be in language which is unmistakable. It may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific performance 9 R.F.A.No.581 of 2007 of the contract will ordinarily be granted, notwithstanding the default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the parties and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable properties, it would normally be presumed that time was not the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty, in case of default, does not by itself evidence an intention to make time the essence of the contract. Intention to make time the essence of the contract, may be evidenced by either express stipulations or by circumstances which are sufficiently strong to displace the ordinary presumption that in a contract of sale of land, stipulations as the time are not of the essence. Even if time was not originally of the essence, a party could, by notice served upon the other party, call upon the latter to take the conveyance within the time fixed and intimate that in default of compliance with the requisition, the contract will be treated as cancelled.

10. Sri. S.V. Balakrishna Iyer, the learned Senior counsel for the defendant on the other hand submitted that Section 55 does not 10 R.F.A.No.581 of 2007 contemplate sending of a notice. It so happened that the party in Gomathinayagam Pillai (Supra) had sent a notice. According to him, whether or not a notice is sent, the option under the Section to treat the contract as voidable in the circumstances stated therein, is certainly available to the defendant and merely because a notice had not been sent, the same would not disentitle him to the option available under Section

55.

11. Before we go into the issues, first, we need to refer to the clauses in Ext.A1. The said clauses translated roughly are as under-

1. The 1st party (defendant) has agreed to sell and the 2 nd party (plaintiff) has agreed to purchase the schedule property having an extent of 4 acres including the school buildings and other buildings therein for a total sale consideration of ₹ 95/- lakhs.

2. Towards the sale consideration of ₹ 95/- lakhs, today an advance of ₹1 lakh has been paid by the 2nd party to the 1st party.

3. It is decided that out of the balance sale consideration of ₹ 94 lakhs, ₹ 9 lakhs is to be paid by the 2nd party on 30.04.1994 to the 1st party and necessary endorsement to the said effect made in the 11 R.F.A.No.581 of 2007 agreement.

4. It is decided that within six months of getting possession of the property in compliance of the order of the court, the remaining ₹85 lakhs is to be paid by the 2 nd party to the 1st party; thereafter the 1st party is to convince the 2nd party that the property is free from encumbrances and that no others have any right in the property; that at the expense of the 2 nd party, the 1st party shall execute a sale deed in the name of the 2 nd party or his representative and then as desired by the 2nd party, the sale deed shall be executed for the entire property as a whole or in parts.

5. The responsibility of evicting the tenants of the shop buildings in the property and getting possession of the same will be that of the 2nd party. The 1st party will be responsible for getting the possession of the school buildings and other buildings and shall hand over the same to the 2nd party.

6. It is also decided that, if due to some reason or legal impediment, it is not possible to get possession of the school buildings and thereby not possible to complete the performance of the contract, 12 R.F.A.No.581 of 2007 then after the expiry of the period fixed, the entire advance paid by the 2nd party to the 1st party shall be returned to the 2nd party without any interest.

7. It is decided that in case it is not possible to get possession of the school buildings, and if the defendant is agreeable, then the management of the school shall be transferred to the 2 nd party and all papers relating to the same shall be signed and given by the 1 st party to the 2nd party and thereby complete the performance of the contract.

8. It is decided that after getting possession of the school buildings, if within 6 months the 2nd party fails to pay the balance sale consideration and to get the sale deed registered, after the period fixed, the contract shall stand cancelled and the advance amount of ₹ 1 lakh paid today will not be refunded by the 1 st party to the 2nd party.

9. It is decided that within six months of getting possession of the school buildings and after the 1st party convinces the 2nd party that there is no encumbrance or other claimants for the property 13 R.F.A.No.581 of 2007 and when the entire sale consideration is paid by the 2nd party, if the 1st party commits any default in executing the sale deed in favour of the 2nd party, then on the strength of this agreement the 2nd party has the right to initiate legal proceedings for getting the 1st party to execute the sale deed. Due to this, in addition to the loss the 2nd party may suffer, the 1 st party shall be liable to pay ₹ 1 lakh, which amount can be adjusted by the 2 nd party from the balance sale consideration.

It is admitted that clause (2) had been performed on the date of the agreement itself. Now comes the question of performance of clause (3). The plaintiff in the box during his cross examination takes up a case that on 29/04/1994, he had gone to the house of the defendant in Kozhikode and had offered the amount of ₹ 9 lakhs, which he was to pay on 30/04/1994. But the defendant did not accept the same on the ground that the Government is yet to transfer the management of the school and possession of the buildings therein and that he would receive the further sums only after the transfer takes place. The plaintiff has no such case either in Ext. A2 lawyer notice or in his plaint. There 14 R.F.A.No.581 of 2007 is only a general and vague statement that he had offered the sum in April 1994. No details of the date, place or mode of offer has been given either in Ext.A2 or in the plaint. In this circumstance our attention was drawn to Order VI Rule 6 CPC by the learned Senior counsel for the defendant, which reads -

"6. Condition precedent. --Any condition precedent, the performance or occurrence of which is intended to be contested, shall be distinctly specified in his pleading by the plaintiff or defendant, as the case may be; and, subject thereto, an averment of the performance or occurrence of all conditions precedent necessary for the case of the plaintiff or defendant shall be implied in his pleading."

When the plaintiff received Ext.A3 reply notice itself, he was well aware of the fact that his case that he had offered an amount of ₹ 9 lakhs in April 1994 was being denied and disputed by the defendant. That being the position, he ought to have specifically pleaded the details of the offer that he is supposed to have made to the defendant. It is well settled that no amount of evidence can be looked into a plea, that has never been put forward in the plaint. The plaint is silent on this aspect and hence it is clear that the provisions of Order VI Rule 6 have not been complied with, as argued on behalf of the defendant.

R.F.A.No.581 of 2007

12. Ext.A1 embodies mutual obligations. A reading of clause (3) in Ext.A1 would show that there was a duty cast upon the plaintiff to perform the obligation of paying ₹ 9 lakhs on 30/04/1994. Here, a reference can be made to Sections 52 and 54 of the Contract Act, which read -

"52. Order of performance of reciprocal promises: - Where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order; and where the order is not expressly fixed by the contract, they shall be performed in that order which the nature of the transaction requires.

xxxx xxxx xxxx

54. Effect of default as to that promise which should be first performed, in contract consisting of reciprocal promises_ When a contract consists of reciprocal promises, such that one of them cannot be performed, or that is performance cannot be claimed till the other has been performed, and the promisor of the promise last mentioned fails to perform it, such promisor cannot claim the performance of the reciprocal promise, and must make compensation to the other party to the contract for any loss which such other party may sustain by the non - performance of the contract."

13. Reciprocal promises are defined in Section 2(f) of the Contract Act, being promises which form the consideration or part of the 16 R.F.A.No.581 of 2007 consideration for each other. Sections 51 to 58 deal with performance of reciprocal promises. The order of performance of reciprocal promises is provided in Section 52, which says that where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order and where the order is not expressly fixed by the contract, they shall be performed in that order which the nature of the transaction requires. As per Section 54, if reciprocal promises are made, then the promisor can resile from the promise made by him if the promisee is not willing and ready to perform his reciprocal promise.

14. The order of performance of obligations by the parties to the contract would undoubtedly have an impact on the aspect relating to readiness and willingness [Bhavyanath vs. K V Balan (2019 KHC 6901)]. Ext. A1 contains an order for performance of the mutual promises/obligations. After the compliance of the 2nd clause relating to payment of advance of ₹ 1 lakh on the date of the agreement, the next obligation/clause/promise, to be performed is contained in the 3 rd clause, which is, the amount of ₹ 9 lakhs was to be paid by the plaintiff on 17 R.F.A.No.581 of 2007 30/04/1994. It is only after clause (3) is complied with, the question of performance of the other clauses arise. Clauses (6) and (7) provide for the course of action to be adopted in case possession of the property was not obtained. Clause (7) deals with the course to be adopted for completing the performance of the contract in case it was not possible to get possession of the property. An option is seen given to the plaintiff to take over the management of the school in such an eventuality. The parties are also seen to have agreed that the defendant would sign and hand over all the necessary documents for the compliance of this clause, thus completing the performance of the contract. Therefore, though the order in which the promises/terms in Ext.A1 are to be performed is not expressly stated in the contract, the intention of the parties is evident from the aforesaid clauses and so the parties were bound to perform them in the order in which the nature of the transaction required. Therefore, the finding of the court below that compliance of clause (3) was not mandatory, is apparently incorrect and wrong.

15. The plaintiff alleges that because the defendant did not accept the amount offered on 29/04/1994, he had waited all these years for 18 R.F.A.No.581 of 2007 the possession to be obtained. PW1 in his cross examination deposed that after the defendant refused to accept ₹ 9 lakhs, he had for about 2 years at regular intervals kept contacting the defendant, who in turn kept informing him that possession had not been received. His case is that about 10 days before he filed the suit, which is seen filed on 29/08/2000, he came to know that a few months back the defendant had received possession of the property. However, the defendant never informed him of the same. Thereafter he came to know that the defendant is making attempts to alienate the property. Hence, he issued Ext.A2 lawyer notice and thereafter filed the suit.

16. It is true that in a contract for sale of immovable property, normally it is presumed that time is not the essence of the contract. Even if there is an express stipulation to that effect, the said presumption can be rebutted. To find out whether time was the essence of the contract, reference has to made to the terms and conditions of the contract itself. The legal position is clear from the Constitution Bench decision in Chand Rani v. Kamal Rani, 1993 KHC 877: AIR 1993 SC 1742, wherein the Apex Court held that it is a well-accepted principle that 19 R.F.A.No.581 of 2007 in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.

17. Relying on earlier decisions, the Apex Court in Gomathinayagam Pillai (Supra) held that fixation of the period within which the contract has to be performed does not make the stipulation as to time the essence of the contract. Where the contract relates to sale of immovable property, it will normally be presumed that the time is not the essence of the contract. Even if time is not the essence of the contract, the Court may infer that it is to be performed in a reasonable time: (i) from the express terms of the contract; (ii) from the nature of the property and (iii) 20 R.F.A.No.581 of 2007 from the surrounding circumstances as for example, the object of making the contract. The intention to treat time as the essence of the contract may however be evidenced by circumstances which are sufficiently strong to displace the normal presumption that time is not the essence in contract for sale of land. The intention to make time stipulated for payment of balance consideration will be considered to be essence of the contract where such intention is evident from the express terms or the circumstances necessitating the sale, set out in the agreement. If for example, the vendor discloses in the agreement of sale, the reason for the sale and the reason for stipulating that time prescribed for payment to be the essence of the contract, that is, say, need to repay a particular loan before a particular date, or to meet an urgent time bound need (say medical or educational expenses of a family member) time stipulated for payment will be considered to be the essence. Even if the urgent need for the money within the specified time is not set out, if the words used clearly show an intention of the parties to make time the essence of the contract, with reference to payment, time will be held to be the essence of the contract. (See also Saradamani Kandappan vs. S.Rajalakshmi; 2011 KHC 4554) 21 R.F.A.No.581 of 2007

18. In the case on hand it was quite unnecessary for the plaintiff to have waited so long to file the suit. The case set up by him appears to be quite improbable also in the light of clauses (6) and (7) in Ext. A1. On going through the various clauses in Ext.A1, it appears that both the parties did entertain doubts as to whether the defendant would be able to obtain possession of the property from the Government by 30/04/1994. Contemplating such an event/situation, the parties are seen to have incorporated clauses to meet such an eventuality also. Therefore, if the intention was to pay ₹ 9 lakhs, only on getting possession from the Government, it was quite unnecessary for the parties to have incorporated the remaining clauses in Ext.A1. This is all the more clear from clauses (6) and (7) of Ext.A1. Furthermore, PW1 in his cross examination admitted that as per the agreement he was bound to pay ₹ 9 lakhs on 30/04/1994 and that the said clause is an unconditional one (30.04.94 - ൽ ഈ കരരർ പ്രകരരര 9 ലകര രൂപ ഞരൻ രരരകര രകരടുകണര എനര കരരററൽ പറഞറട്ടുണണ. അതരയതണ കരരററൽ കലർപറലരരത ടറ കരലയളവറൽ 9 ലകര രകരടുകണര എനണ പറഞറട്ടുണണ). If actually the intention of the parties was to make the payment of ₹ 9 lakhs only after the defendant obtained possession of the property from the 22 R.F.A.No.581 of 2007 Government, it could have been stated so in the agreement. On the other hand, clause (3) says that the amount of ₹ 9 lakhs must be paid by the plaintiff on 30/04/1994. The clause does not talk about obtaining possession of the property. Clauses (6) and (7) take care of the interest of the plaintiff in the event of the defendant being unable to obtain possession of the property. The clauses make it clear that the parties never intended to leave things in a state of uncertainty. The steps to be taken on the happening of various eventualities like, the failure to obtain possession of the property, the failure of either party to perform their part, have been clearly provided for in Ext.A1. That being the position, the case put forward by the plaintiff that he waited for about 6 years for the defendant to get possession, seems wholly improbable and incorrect. The plaintiff does not seem to have taken any action after the execution of Ext.A1 agreement and payment of ₹ 1 lakh.

19. It is well settled that the buyer in an agreement for sale shall be a person who has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, otherwise he is not entitled to get a decree for specific performance. It is true 23 R.F.A.No.581 of 2007 that Sections 10, 16 and 20 of the Specific Relief Act, 1963 (the Act) have been amended with effect from 01.10.2018. The suit on hand is of the year 2000, that is, before the amendment dated 01.10.2018. Section 20 of the Act which confers discretion on the court to refuse a decree for specific performance even in cases where it is lawful for the court to do so, has now been substituted and the courts have no longer any discretion to refuse a decree for specific performance. The Apex Court in Sughar Singh v. Hari Singh, 2021 SCC ONLINE SC 975, has held that though the amended provisions do not have retrospective effect, the same shall be a guide for the court in the matter of exercising the discretion under Section

20.

20. In the present case the plaintiff has failed to aver and prove that he had performed or had always been ready and willing to perform the essential term of the contract, that is, clause (3) of Ext.A1, which was to be performed by him on 30/04/1994. Therefore, there is noncompliance of Section 16 (c) of the Act and therefore the finding to the contrary by the court below is incorrect and wrong.

21. Further, another aspect to be noticed is that Ext.A1 is of 24 R.F.A.No.581 of 2007 the year 1993. The total sale consideration of the property was fixed as ₹ 95 lakhs. On the date of the agreement, an amount of ₹ 1 lakh alone was paid by the plaintiff. Now admittedly the price of the property has escalated considerably. As held in Gomathinayagam Pillai ( Supra), specific performance of the contract will ordinarily be granted, notwithstanding the default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the parties and the surrounding circumstances, it is not inequitable to grant the relief. From the evidence on record, it appears that no steps whatsoever were taken by the plaintiff to compliance with the terms of the contract, which he was bound to perform. After having not complied with the terms of the contract, he waited for six long years to come up with the suit. Therefore, at this late hour of the day, it would be inequitable to grant the relief of specific performance because the performance of the contract would involve greater hardship to the defendant than to the plaintiff. The points are answered accordingly.

22. Points 1 and 2 - Referring to paragraph 6 in the plaint it was submitted that the plaint does not reveal any cause of action and 25 R.F.A.No.581 of 2007 therefore the court below ought to have rejected the plaint under Order VII Rule 11 CPC. The plaintiff on the other hand contends that the cause of action has been clearly stated in the plaint. The learned Senior counsel for the plaintiff drew our attention to paragraph 4 of the plaint and submitted that cause of action is a bundle of facts which are necessary for the plaintiff to prove in order to entitle him to the reliefs claimed in the suit. The plaint should be read as a whole to understand/comprehend the case of the plaintiff and that the court should not adopt a narrow or technical approach while construing the pleadings. According to the learned counsel, the plaint read as a whole, clearly reveals the cause of action and therefore arguments to the contrary are liable to be rejected.

23. As rightly submitted on behalf of the plaintiff, it is well settled that pleadings should receive a liberal construction. Courts are not expected to adopt a pedantic approach to defeat justice on hair splitting technicalities. Pleadings must be construed reasonably. The contention of the parties must be culled out from the pleadings by reading the same as a whole. Sometimes, pleadings are expressed in words which may not expressly make out a case in accordance with the strict interpretation of the law. In such a case it is the duty of the Court to ascertain the substance of the pleadings. 26 R.F.A.No.581 of 2007 Whenever the question about lack of pleading is raised, the enquiry should not be so much about the form of the pleadings. The Court must find out whether in substance the parties knew the case and the issues upon which they went to trial. Once it is found that in spite of deficiency in the pleadings parties knew the case and they proceeded to trial on the issues by producing evidence, it would not be open to a party to raise the question of lack of pleadings (See Ram Sarup Gupta v. Bishun Narain Inter College, 1987 KHC 965: AIR 1987 SC 1242).

24. Procedural law is intended to facilitate and not to obstruct the course of substantive justice. Provisions relating to pleading in civil cases are meant to give to each side intimation of the case of the other so that it may be met to enable Courts to determine what is really at issue between the parties (See M/s.Ganesh Trading Co. v. Moji Ram, 1978 KHC 500: AIR 1978 SC 484).

25. As held by a Full Bench of this Court in the decision in Viswambaran P N vs. T P Sanu [2018(3) KHC 73], pleadings and particulars are necessary to enable the Court to decide the rights of the parties in the trial. The purpose of pleadings and issues is to ascertain the real dispute between the parties and to narrow the area of conflict between them. 27 R.F.A.No.581 of 2007 In order to have a fair trial it is imperative that the party should state the essential material facts so that the other party may not be taken by surprise. The parties are expected to raise specific pleadings before the first forum for adjudication of the dispute. Those pleadings are the basis of the case of the respective parties even before the appellate / higher Courts. The parties would be bound by such pleadings, of course, subject to the right of amendment allowed in accordance with law. It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and material facts should be pleaded by the party in support of the case set up by it.

26. With the aforesaid principles in mind, we will now consider the pleadings in the plaint. Paragraph 6 of the plaint reads -

"6. The cause of action for this suit arose on 8--11--1993 when the agreement for sale of the plaint schedule properties was entered into between the plaintiff and the defendant, on 20--7--2000 when plaintiff issued the registered lawyer notice to the defendant and on 4--8--2000 when the reply notice was sent by the defendant to the plaintiff. It arose at Koppam amsam, Palakkad taluk within the jurisdiction of this Hon'ble court where the plaint schedule properties are situated."

R.F.A.No.581 of 2007

The term "cause of action' has been explained by the Hon'ble Supreme Court in Dehiben v. Arvindbhai Kalyanji Bhanusali (Gajra) (2020 KHC 6446) thus-

"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 Atmananda v. Sri Ramakrishna Tapovanam [2005 KHC 1649: AIR 2005 SC 2392] it has been 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) It was pointed out by the learned Senior counsel for the defendant that the offer the plaintiff is supposed to have made on 29/04/1994 was deliberately 29 R.F.A.No.581 of 2007 not mentioned in the plaint to get over the bar of limitation. Had he mentioned so in his cause of action, it would have been apparent that the suit was barred by limitation and then the plaint would have been rejected at the threshold itself. It was to avoid such contingency, the said case has not been pleaded in the plaint. As per Order VII Rule 11(a), a plaint shall be rejected if it does not disclose a cause of action and as per clause (d) it shall be rejected if the suit appears from the statement in the plaint to be barred by any law.

27. 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. 30 R.F.A.No.581 of 2007 [Dehiben (supra)].

28. 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. 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. 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. Having regard to Order VII Rule 14 CPC, the documents filed along with 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. 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 31 R.F.A.No.581 of 2007 whether a case for rejecting the plaint at the threshold is made out. At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on merits, would be irrelevant, and cannot be adverted to, or taken into consideration. (See Azhar Hussain v. Rajiv Gandhi [1986 KHC 552: AIR 1986 SC] and Sopan Sukhdeo Sable v. Assistant Charity Commissioner [2004 KHC 342: AIR 2004 SC 1801]).

29. In Hardesh Ores (P.) Ltd. v. Hede & Co. [2007 KHC 3621: (2007)5 SCC 614] it has been 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. Further, 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. (D. Ramachandran v. R. V. Janakiraman) [1999 KHC 1051:

AIR 1999 SC 1128].

30. The power under Order VII Rule 11 CPC may be exercised by the Court at any stage of the suit, either before registering the 32 R.F.A.No.581 of 2007 plaint, or after issuing summons to the defendant, or before conclusion of the trial (Saleem Bhai v. State of Maharashtra) [2003 KHC 776: AIR 2003 SC 759]. The plea that once issues are framed; the matter must necessarily go to trial was repelled in Azhar Hussain (supra).

31. 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 clauses (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. [Dehiben (supra)]. Further, as held by the Hon'ble Supreme Court in State of Punjab vs. Gurdev Singh (1992 KHC 209), the court has to 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"

mean 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.

R.F.A.No.581 of 2007

32. The pleadings in paragraph 6 of the plaint in this case does not reveal a cause of action because as held in Swamy Atmanand (Supra), cause of action 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. Paragraph 6 in the plaint does not satisfy this test and therefore it can only be held that the plaint does not reveal any cause of action for the suit.

33. The defendant has also taken up a contention that the suit is barred by limitation. Both sides admit that it is Article 54 of the Limitation Act, that is applicable, which reads -

Period of Description of suit Time from which period begins to run limitation

54. For specific The date fixed for the performance, or, if performance of a Three years no such date is fixed, when the plaintiff has contract notice that performance is refused.

The period of limitation starts to run from the date fixed for performance 34 R.F.A.No.581 of 2007 of the contract, or if no such date is fixed, when the plaintiff has noticed that the performance is refused. If the first part of Article 54 is to apply, then the date for the performance is to be specified in the contract. If it is not specified, then the period of limitation starts to run only when the plaintiff has noticed that the performance is refused because the expression 'date' used in Article 54, is definitely suggestive of a specified date in the calendar . (Ahmmadsahab Abdul Mulla v. Bibijan - 2009 KHC 477: AIR 2009 SC 2193; Madina Begum v. Shiv Murti Prasad Pandey - 2016 KHC 6517:

2016 SC 3554). In the instant case, no date is seen fixed for performance of the contract. The stipulation in Ext. A1 that the sale deed shall be executed within 6 months of obtaining possession from the Government does not amount to fixing a date. Therefore, it is the second part of Article 54 that is applicable. If that be so, the cause of action arose when the plaintiff came to know of the refusal on the part of the defendant to perform his part of the contract.

34. The learned counsel for the plaintiff submitted that when the offer to pay an amount of ₹ 9 lakhs was made by the plaintiff in April 1994, there was no refusal as such by the defendant; on the other 35 R.F.A.No.581 of 2007 hand, the latter only said that he would receive the amount after he obtained possession of the property from the Government. Parties were in cordial terms and hence there was no reason for the plaintiff to doubt the word of the defendant. The possession of the property was obtained by the defendant only on 25/05/2000. The defendant refused to execute his part of the agreement after obtaining possession. It was only then the cause of action for the plaintiff arose. Hence the suit filed on 14/08/2000 is well within the period of limitation, goes the argument.

35. In I.T.C. Ltd. v. Debt Recovery Appellate Tribunal, (1998) 2 SCC 170 it has been 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, as held by the Apex Court in Madanuri Sri Ramachandra Murthy v. Syed Jalal [2017 KHC 6338; AIR 2017 SC 2653], it should be nipped in the bud, so that bogus litigation would end at the earliest stage.

36. The plaint in this case appears to have been cleverly drafted and the offer supposed to have been made on 29/04/1994 deliberately not 36 R.F.A.No.581 of 2007 mentioned in the plaint to overcome the period of limitation. An attempt to make out an illusory cause of action is made to bring the suit within the period of limitation. The omission of the said date in the paragraph 6 of the plaint seems to have been done deliberately and knowingly, so as to mislead the Court on the issue of limitation. The conduct of the plaintiff in not taking recourse to legal action for over a period of about 6 years in spite of the several clauses in Ext.A1 that could have been resorted to, also reflects that the institution of the present suit is an after - thought. The plaintiff apparently has filed the suit after the property has been sold on 21.06.2000 by the defendant to a third party.

(This fact is revealed in Ext.A3 reply notice). If the case of the plaintiff that he had made the offer in April 1994 is true, then his cause of action arose on the refusal by the defendant to receive the amount. The delay of 6 years in filing the suit after the cause of action arose in 1994, shows that the suit was clearly barred by limitation. As the plaintiff failed to discharge the onus of proof that the suit was filed within the period of limitation, the plaint was therefore, liable to be rejected under Order VII Rule 11(d) of CPC.

37. Further, the plaintiff has also not been able to establish that he was in possession of sufficient resources for taking the sale of the 37 R.F.A.No.581 of 2007 property. This appears to be the reason why the contract did not go forward. The plaintiff has failed to establish that he was ready and willing to perform his part of the contract and therefore the court below went wrong in decreeing the suit. Points answered accordingly.

In the light of the above discussion, the appeal is allowed with costs. The impugned judgment and decree of the court below are set aside and the suit is dismissed.

All interlocutory applications, if any pending, shall stand disposed of.

Sd/-

P.B.SURESH KUMAR JUDGE Sd/-

C.S.SUDHA JUDGE ami/

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