Delhi High Court
Rishi Aggarwal vs M/S Vipul Infrastructure Developer Ltd ... on 30 November, 2016
Author: Deepa Sharma
Bench: Deepa Sharma
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: 30.11.2016
+ CS(OS) 2309/2013
RISHI AGGARWAL ..... Plaintiff
Through: Mr Sunil Mittal, Sr. Adv with Ms Nidhi
Mehrotra, Adv.
versus
M/S VIPUL INFRASTRUCTURE DEVELOPER LTD & ORS.
..... Defendants
Through: Mr Abhinav Agnihotri, Adv for D-1
Mr Abhishek and Mr Yashwardhan Tiwari, Adv.
for D-2
CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA
MS. JUSTICE DEEPA SHARMA
%
IA No. 8993/2014 (under Order 7 Rule 11 r/w S. 151 CPC by defendant
No.2)
1. The present application is filed by defendant No.2 M/s Orchid
Infrastructure Developers Pvt. Ltd. under Order 7 Rule 11(a) and (d) CPC
on the ground that suit does not disclose any cause of action against
defendant No.2 and that the present suit is barred by limitation. It is
submitted that the plaint does not disclose any cause of action since the
defendants are not the owners of the flat and also there is no such averment
in plaint. The claim of the plaintiff does not rest on any agreement to sell,
CS(OS) 2309/2013 Page 1
but it is based on an offer to arrange the sale which is not an agreement to
sell and thus is not enforceable. It is also contended that the plaintiff himself
claims that the cause of action arose in the year 2004 when he entered into
an oral contract with defendant No.1, further in 2005 when defendant No.1
issued a letter offering to arrange to sell the disputed flat, again in 2007
when plaintiff paid `60 lakhs to defendant No.2/applicant, again in 2012
when he served a legal notice and again in 2013 when an FIR was registered
by Economic Offences Wing of Delhi Police. It is submitted that as per
Article 54 of Limitation Act, the suit was required to be filed within three
years calculated from the date fixed for performance and if no such date is
fixed then the date when the plaintiff noticed that performance is refused. It
is submitted that as per the plaintiff‟s claim, the flat was to be delivered
within 27 months from the date of issuance of letter dated 04.01.2005 by
defendant No.1, i.e., by 03.04.2007, but it was not so delivered, hence, the
period of limitation started from the date, i.e., 03.04.2007 and ran out on
02.04.2010 on expiry of 3 years and the present suit was filed in November,
2013 and, thus barred by limitation and is liable to be rejected. It is further
stated that in the absence of any privity of contract between the plaintiff and
CS(OS) 2309/2013 Page 2
defendant No.2, there is no cause of action against defendant No.2 and,
therefore, the plaint is liable to be rejected qua defendant No.2.
2. The plaintiff has filed its reply to the said application. It is submitted
that the parties had negotiated for the sale and purchase of the suit property
and that there was an oral agreement dated 23.02.2004 and the plaintiff had
paid a sum of Rs.10 lakhs as earnest money vide Cheque dated 23.12.2004
and it was only on the basis of this oral agreement and payment of Rs.10
lakh that defendant No.1 issued a letter dated 14.01.2005 enumerating the
terms and conditions. There is thus a contract between the parties, which
needed to be enforced. It is denied that defendants are not owners of the flat
in dispute. It is submitted that in a reply to the application IA No. 20822 in
CS(OS) No.2287/2007, the defendant No.2 had averred that this project had
fallen in his share as a part of settlement between defendant Nos. 1&2.
3. It is further contended that while deciding the application under Order
7 Rule 11, the Courts are solely required to depend on the averments of the
plaint and the documents of the plaintiff filed along with the suit to judge if
there exists any cause of action. Any fact disclosed by the defendant and
document relied upon by defendant cannot be relied upon while dealing with
an application under Order 7 Rule 11 CPC. It is submitted that this suit is for
CS(OS) 2309/2013 Page 3
specific performance of the contract in respect of Flat bearing No.D-7,
situated in Tower „B‟, forming part of property No.6, having an area of 4300
square feet, Aurobindo Marg, New Delhi (hereinafter referred to as "the suit
property"). In the end of the year 2004, defendant No.1 through its
Managing Director Puneet Beniwal approached the plaintiff and represented
that defendant No.1-Company was launching/developing the residential
project at Aurobindo Marg, consisting of 18 flats etc. on a freehold plot of
land and the project was duly approved by the concerned authorities and that
the possession would be handed over within a period of 27 months from the
date of signing of formal agreement to sell or sanction of building plans by
the Municipal Authorities whichever is later. Plaintiff agreed to purchase
the said flat for a total consideration of Rs.2,58,00,000/-. He also paid a sum
of Rs.10 lakhs vide Cheque No.179031 dated 23.12.2004, drawn on HDFC
Bank, Sector 17-C, Chandigarh in favour of defendant No.1 for which a
receipt dated 04.01.2005 was duly issued by defendant No.1. The said sale
was also confirmed by defendant No.1 vide letter dated 04.01.2005. It was
also agreed by this document that formal agreement to sell would be entered
into within 30 days of issuance of acceptance letter or sanction of building
plans by Municipal Authorities whichever is later. However, defendant No.1
CS(OS) 2309/2013 Page 4
did not stick to its commitment and did not handover the possession within
27 months nor informed the plaintiff about sanction of the building plan nor
executed the agreement to sell. On the other hand, defendant No.1 informed
the plaintiff that they had entered into an agreement with defendant No.2 for
completion of the project and all the obligations would be fulfilled by
defendant No.2. This fact was also confirmed by Mr Rajiv Gupta and Mr
Ajay Goyal of defendant No.2, who according to plaintiff, assured him that
project would be completed and agreement to sell would be executed. In the
month of 2007, defendant No.2 demanded a sum of `60 lakhs in respect of
the flat in question for which payment was made by the plaintiff and the
payment was duly acknowledged vide receipt of defendant No.2. Despite
several visits to the offices of defendant Nos. 1 and 2, the agreement to sell
was not executed and he was not apprised of about the completion of the
project. On 09th August, 2008, he wrote a letter to the defendants. The
plaintiff contends that he was telephonically informed by defendant No.2
that the plan was likely to be sanctioned by Municipal Authorities very
shortly and thereafter, formal agreement shall be executed. He again sent
reminders to defendants on 19.04.2012 and on 04.06.2012, but in spite of
receiving those reminders, the defendant has not executed the formal
CS(OS) 2309/2013 Page 5
agreement and did not deliver the possession of the flat. In the year 2012, he
came to know that construction of flat was completed and possession of
some flats had already been handed over to the purchasers. He issued a legal
notice on 10.07.2012 calling upon them to fulfil their contractual obligation
under the agreement and deliver the possession of the flat. The said notice
was duly replied by defendant No.2 in July, 2012, wherein it refused to hand
over flat to him. He learnt that a fraud had been played upon him and
thereafter he lodged a complaint in the Police Station, Malviya Nagar
wherein defendant No.2 informed the Investigating Officer that the suit flat
was sold by them to one Damayanti Devi and also disclosed that she had
also filed a suit for specific performance bearing CS(OS) No.2287 of 2007
pending before this Court. It is submitted that the cause of action accrues
against defendant No.2 when defendant No.1 represented to the plaintiff that
the project would be completed by defendant No.2 and it further accrued
when defendant demanded further payment and he paid the sum of `60 lakhs
on 02.03.2007 and 28.03.2007 vide receipt issued by defendant No.2 and
also on various dates when he wrote other letters and visited the office of
defendants and finally in the month of July, 2012 when the defendants
CS(OS) 2309/2013 Page 6
refused to fulfil their contractual obligations. It is submitted that the
application has no merit in it and is liable to be dismissed.
4. I have heard the learned counsel for the parties and had given
thoughtful consideration to the rival contentions.
5. There is no dispute to the proposition of law that under Order 7 Rule
11, the Court has to confine itself to the averments of the plaint and the
documents relied upon by the plaintiff. This position of law has been so
stated by the Supreme Court in the Saleem Bhai and Ors. vs. State of
Maharashtra and Ors. (2002) SUPP 5 SCR 491.
6. The Court has observed as under:-
"9. A perusal of Order VII Rule 11 C.P.C. makes it clear
that the relevant facts which need to be looked into for
deciding an application thereunder are the averments in the
plaint. The trial court can exercise the power under Order
VII Rule 11 C.P.C. at any state of the suit - before
registering the plaint or after issuing summons to the
defendant at any time before the conclusion of the trial. For
the purposes of deciding an application under Clauses (a)
and (d) of Rule 11 of Order VII C.P.C., the averments in the
plaint are germane; the pleas taken by the defendant in the
written statement would be wholly irrelevant at that stage,
therefore, a direction to file the written statement without
deciding the application under Order VII Rule 11 C.P.C.
cannot but be procedural irregularity touching the exercise
of jurisdiction by the trial court. The order, therefore,
suffers from non-exercising of the jurisdiction vested in the
court as well as procedural irregularity. The High Court,
however, did not advert to these aspects.
CS(OS) 2309/2013 Page 7
10. We are, therefore, of the view that for the afore-
mentioned reasons, the common order under challenge is
liable to be set aside and we, accordingly, do so. We remit
the cases to the trial court for deciding the application
under Order VII Rule 11 C.P.C. on the basis of the
averments in the plaint, after affording an opportunity of
being heard to the parties in accordance with law."
It is also a settled proposition of law that while deciding the existence
of a cause of action while dealing with an application under Order 7 Rule 11
CPC, the Court is required to see whether a real cause of action has been set
out in the plaint or something purely illusory has been stated (I.T.C. Ltd vs.
Debts Recovery Appellate Tribunal and Ors, AIR 1998 SC 634).
The Supreme Court in I.T.C. Ltd (supra) has observed as under:-
"27. ...............As pointed out by Krishna Iyer, J.
in T. Arivandandam vs.T.V. Satyapal and Anr. AIR 1977 SC 2421, the ritual of repeating a word or creation of an illusion in the plaint can certainly be unraveled and exposed by the Court while dealing with an application under Order 7 Rule 11 (a).........."
7. A conjoint reading of all the paragraphs of the averments in the plaint, it is apparent that the present suit has been filed by the plaintiff against the defendants for specific performance of contract and for permanent injunction based on an agreement entered into between him and defendant No.1 dated 04.01.2005 whereby the defendant No.1 had agreed to sell the CS(OS) 2309/2013 Page 8 suit property to the plaintiff for a consideration of sum of Rs. 2,58,00,000/-. The plaintiff has further averred that he was informed by defendant No.1 that he had entered into developers agreement with defendant No.2 for developing the suit property and thereafter when defendant No.2 raised a demand of `60 lakhs, he paid the said sum, one of Rs. 25,00,000/- vide cheque dated 02.03.2007 and Rs.35,00,000/- vide demand draft dated 22.03.2007 for which two separate receipts were issued by defendant No.2. It is, therefore, apparent that defendant No.2 is no stranger to the agreement and pursuant to the agreement dated 04.01.2005, he had raised the demands and also issued the receipts for payments received towards the construction cost of Unit No.D-7, Tower B in the project, Municipal Number-6, Aurobindo Marg, New Delhi. The argument of defendant No.2 that there exists no cause of action against him, therefore, fails.
8. The other contention of defendant No.2 is that the present suit is barred by limitation. According to defendant No.2/applicant, the cause of action had arisen after 27 months of execution of document on 04.01.2005 when the possession was delivered to him and since the suit has been filed beyond 3 years from the date the cause of action arose, the plaint is barred CS(OS) 2309/2013 Page 9 and is liable to be dismissed (reliance is placed on Radhika Devi vs. Bajrangi Singh and Others (1996) SCC 486).
9. The contention of learned counsel for the plaintiff is that as per the document dated 04.01.2005, no doubt, the possession was to be delivered within 27 months, but it was to be delivered within 27 months from the date of signing of agreement to sell or sanction of building plans by appropriate authorities whichever is later and that the agreement to sell was to be executed within 30 days from the date of the letter, i.e., 04.01.2005 or sanction of building plan by appropriate authorities whichever is later. It is submitted that at no stage, the defendants had called upon him to execute agreement to sell informing him that the building plan had been sanctioned. It is submitted that although now the defendants states that the building plan was sanctioned on 21.09.2005 which fact they had disclosed for the first time in their affidavit pursuant to the order of this Court dated 05.12.2013, but this fact was never conveyed to the plaintiff at any stage.
10. It is argued that finding of case Radhika Devi (supra) relied upon by defendant/applicant has no relevance to the facts of this case as the proposition of law was propounded while dealing with application under Order 6 Rule 17 CPC.
CS(OS) 2309/2013 Page 10
11. Article 54 of the Limitation Act is reproduced as under:-
"For Specific Three Years The date fixed for the
performance of a performance, or, if no such
contract: date is fixed, when the
plaintiff has notice that
performance is refused."
12. The period of limitation of the suit for specific performance is to be reckoned from the date fixed for performance and if no last date is fixed when the plaintiff has noticed that performance is refused. The defendant in order to substantiate his contention that suit is barred by limitation has relied on the terms of letter dated 04.01.2005. The relevant clauses of the said letter is reproduced as under:-
"2. The possession will be delivered in 27 months from the date of signing of agreement to sell or sanction of Building Plans by appropriate authorities, whichever is later.
3. The detailed agreement to sell will be executed within 30 days from the date of this letter or sanction of Building Plans by appropriate authorities, whichever is later."
13. From the reading of these terms and conditions of the letter, it is apparent that no date was fixed for the performance of a contract rather it was contingent upon the sanction of building plan by appropriate authorities and it was stipulated that agreement to sell was to be executed within 30 days from the date of the letter or sanction of building plan by appropriate authorities whichever is later. Also, delivery of the possession within 27 CS(OS) 2309/2013 Page 11 months was contingent to the sanction of the building plan by appropriate authorities and signing of the agreement to sell whichever is later. Clause 2 clearly stipulates that possession will be delivered in 27 months from the date of signing of the agreement to sell or sanction of building plan by appropriate authorities whichever is later. It, therefore, is apparent that the execution of the agreement to sell within 30 days was contingent upon the sanction of the building plan and the delivery of possession of 27 months was contingent upon the execution of the agreement to sell or sanction of the building plan by appropriate authorities whichever is later. Apparently, no time was fixed for performance of the contract dated 04.01.2005, rather it was subjective to completion of other stipulations in the contract. Therefore, the argument of defendant No.2 that the cause of action arose on expiry of 27 months from the date of this letter dated 04.01.2005 has no merit.
14. Now the other part of Article 54 states that period of limitation begins from the date when plaintiff has noticed that performance is refused. The question is on which date the plaintiff learnt that performance was refused. The contention of defendant No.2 is that when the plaintiff learned that construction was going on and the money was demanded, he came to know that building plan was already sanctioned and so when agreement to sell was CS(OS) 2309/2013 Page 12 not executed within the stipulated period the plaintiff learnt that performance was refused.
The plaintiff has relied on his letter dated 19.04.2012 and 04.06.2012, sent by registered post and courier (postal receipt and tracking report on file) asking the defendants to hand over the possession of flat and execute the sale deed, but the said letters were not replied by defendant No.2. Also in its reply to legal notice dated 10.07.2012, the defendant No.2 has not taken the plea that plaintiff was informed of sanction of plan or that the plan was sanctioned in 2005. It was only by way of affidavit furnished in court that defendant No.2 disclosed that plan was sanctioned in 2005. The period of limitation thus begins from the date when defendants refused the performance of contract in his undated reply to the legal notice of plaintiff dated 10.07.2012. Hence, the suit is not barred by limitation.
The application stands disposed of.
CS(OS) 2309/2013 List for framing of issues on 21.03.2017.
DEEPA SHARMA
(JUDGE)
NOVEMBER 30, 2016
BG
CS(OS) 2309/2013 Page 13