Full Text
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO. 40 OF 2023
Sakharam G. Mahadik }
Having address at Anuradha }
Bhojnalay Civil Hospital }
Road, Sangli & Another. } ...Applicants
Registered Partnership Firm, }
Through its Partner Manjusha }
Balasaheb Patil, Through its }
Power of Attorney Holder, Shri. }
Balasaheb Jagannath Patil, Resid-} ing at Ganaraj Apartment, Flat }
No. 3, 21/A, North Shivaji Nagar, }
Sangli- 416 416 & Others. } …Respondents
Sangli Miraj Kupwad City Muni- } cipal Corporation Through its }
Commissioner, Having offce at }
Sangli Miraj Kupwad City Muni- } cipal Corporation, Opp. City Police}
Station, Rajwada Chowk, Sangli- }
416 416. } ...Applicant
Registered Partnership Firm, }
Through its Partner Manjusha }
Balasaheb Patil Through her } constituted attorney, Shri. }
Balasaheb Jagannath Patil, Resid-} ing at Ganaraj Apartment, Flat }
R.V. Patil 1 of 30
2023:BHC-AS:23583
No. 3, 21/A, North Shivaji Nagar, }
Sangli- 416 416 & Others. } …Respondents
****
Mr. Vikram N. Walawalkar a/w Mr. Amey C. Sawant, Mr. Virendrasingh V. Tapkir for the Applicants in CRA/52/2023.
Mr. Kuldeep U. Nikam a/w Mr. Prasad Avhad, Mr. Surajsingh Malas, for the Applicants in CRA/40/2023.
Mr. Ishaan Kapse for Respondent No. 1.
****
JUDGMENT
1. Both the Civil Revision Applications arise out of the orders passed in applications fled under Order 7 Rule 11 of the Code of Civil Procedure, 1908 (C.P.C.) in Special Civil Suit No. 100 of 2022. The Revision Applicant in CRA No. 52 of 2023 is defendant No. 1 and the Revision Applicants in CRA No. 40 of 2023 are defendant Nos. 3 and 4 in the Special Civil Suit No. 100 of 2022. As the orders arise out of applications fled in Special Civil Suit No. 100 of 2022, the matters were heard together and is being decided by this common judgment. R.V. Patil 2 of 30
2. For the sake of convenience the parties are referred to by their status before the trial Court.
3. The facts of the case are that the plaintiff frm through its partner fled Special Civil Suit No. 100 of 2022 on 9th March, 2022 inter alia seeking recovery of sum of Rs. 95,84,520/- alongwith interest thereon from defendant Nos. 1 to 4, and for a declaration that all resolutions, remarks and orders passed by defendant No. 1, Municipal Corporation in respect of the payment of compensation to defendant Nos. 2 to 4 are illegal, void, fraudulent and beyond the authority and as such are liable to be rejected. The plaintiff also prayed for implementation of the Government Notifcation dated 29th April, 2005 to include the acquired land in the reservation of the adjacent plot and consequential rectifcation of the layout.
4. The Revision Applicant in CRA No. 52 of 2023 fled an application on 05th May, 2022 under the provisions of Order 7 Rule 11(d) of C.P.C. seeking rejection of the plaint. It was contended that as per the provisions of Section 487 of the Maharashtra Municipal Corporation Act, 1949 (“MMC Act, 1949”) there is a requirement of pre-suit notice which has not been complied with in the present R.V. Patil 3 of 30 case and as such the institution of the suit is barred. The second ground on which the rejection was sought, was that under the provisions of Section 487(1)(b) of the MMC Act, 1949 the suit is to be instituted within a period of six months from the date of accrual of the cause of action. The third objection raised was that considering the provisions of Section 149 of the Maharashtra Regional Town Planning Act, the jurisdiction of the civil Court is barred.
5. As regards the Revision Applicant in CRA No. 40 of 2023 is concerned, the application was preferred on 18th June, 2022 seeking rejection of the plaint on the ground that the plaint challenges the resolutions which were passed in the year 2015 and as such was barred by limitation. It may be noted that learned Counsel for the Revision Applicant in CRA No. 40 of 2023 at the outset pointed out that although the application was fled under the provisions of Order 7 Rule 11(d) of the C.P.C. at the time of argument submission were also advanced as regards non-disclosure of the cause of action, which was considered by the trial Court, as is evident from the issues which are framed by the trial Court.
6. To the application under Order 7 Rule 11, the plaintiff fled the R.V. Patil 4 of 30 say on 18th June, 2022 and contended that the question of limitation is a mixed question of law and fact and that the cause of action has been distinctly stated to have arisen in the month of September, 2019. It was further contended that as stated in paragraph 17 of the the plaint, the pre-suit notice was given in the year 2017 and that without prejudice to the same the acts of Municipal Corporation cannot be said to be done in pursuance or execution of the Act and, therefore, no such notice is in fact required.
7. As regards the application fled by defendant Nos. 3 and 4 is concerned, the plaintiff in their reply dated 01st July, 2022 contended that the suit has been fled for recovery of the compensation which is illegally paid to the defendants and the defendants are assuming that suit is for challenging the resolution passed by the Municipal Corporation. It was further contended that issue of limitation is mixed question of law and fact.
8. The trial Court while considering the application fled by the Municipal Corporation below Exhibit 34, considered the averments in the plaint that the payment of the compensation to defendant Nos. 2 to 4 in the year 2015 came to the knowledge of the plaintiff in R.V. Patil 5 of 30 September, 2019 and that the issue of limitation is a mixed question of law and fact and can be considered after the evidence has been led. The trial Court considered the notice dated 19th January, 2017 as pre-suit notice and that the period of six months prescribed in Section 487(1)(b) of the MMC Act is not co-related with the date of issuance of the notice. As regards the application of Section 149 of the MRTP Act is concerned, the trial Court held that the relief sought by the plaintiff was in respect of the compensation for the acquisition and as such rejected the application.
9. The trial Court while considering the application fled by defendant Nos. 2 and 3 below Exhibit 40 framed the issue as to whether the suit is barred by limitation or does not disclose a cause of action. The trial Court held that the averments of the plaint discloses that the cause of action has arisen on 16th September, 2019 which was the date on which the plaintiff became aware that the compensation has been paid in the year 2015 to defendant Nos. 2 to 4. The trial Court held that the question of limitation can be decided after the evidence is led. As regards the absence of cause of action, the trial Court considered the discrepancy pointed out that the agreement for sale was in the name of Manjusha Patil in her R.V. Patil 6 of 30 individual capacity whereas the development agreement has been executed in favour of Swagat Builders through their partner Manjusha Patil as also the submissions that the area given to the plaintiff for development was reservation free area and as the area given for development was after deducting the area under reservation, the plaintiff was not entitled to the compensation and held that the submissions required evidence to be led and as such rejected the application.
10. Mr. Walawalkar, learned Counsel appearing for the Revision Applicant in CRA No. 52 of 2023 has taken this Court through the averments in the plaint and would contend that the relief for recovery of the amount of compensation is founded on the basis of the resolutions passed by the Municipal Corporation and without the resolutions being set aside, the relief of recovery of amount of compensation does not survive. As such he would contend that the provisions of Section 487 of the MMC Act, 1949 squarely applies. He would further submit that the trial Court has erred by considering the notice of 2017 as a pre-suit notice and even if it is construed as a pre-suit notice, the suit is barred by limitation under the provisions of Section 487(1)(b) of the MMC Act, 1949. In support of his submissions, he relies upon the decisions in the case R.V. Patil 7 of 30 of (i) Noor Mohd. Shami Shaikh & Anr. V/s. Maharashtra Housing and Development Board & Ors.[1]
(ii) Laxmichand kalyanji V/s.
(iii) Satish Dalichand
Shah V/s. Municipal Corporation of Greater Bombay[3] and (iv) Kolhapur Zilla Rajya Abkari Parvana Dharak Samajik Seva Sangh, Kolhapur V/s. Kolhapur Municipal Corporation 4.
11. Per contra, Mr. Kapse, learned Counsel appearing for the plaintiff submits that the cause of action has been distinctly stated to have arisen in the month of 2019 and the suit having been fled in the year 2022, the issue of limitation is a mixed question of law and fact and as such requires evidence to be led. He would further submit that as regards pre-suit notice, the same has been given in the year 2017, although it is specifcally pleaded that the act of the Municipal Corporation in preferring the resolutions is an illegal act, no notice was required. He would submit that the passing of the general body resolution is not an act of the corporation and as such Section 487 of the MMC Act, 1949 has no application. He would further submit that even if the suit does not survive against defendant No. 1, the same survives against defendant Nos. 2 and 3 1 2014 (1) Mh.L.J. 2 AIR 2002 Bombay 217. 3 AIR 2005 Bombay 442. 4 2006 (2) Mh.L.J. R.V. Patil 8 of 30 and as such cannot be rejected. In support of his contentions he relies upon the decisions in the case of (i) Aurangabad Smart City Development Corporation Ltd. & Anr. V/s. Maharashtra State Board of Waqf 5
(ii) Madhav Prasad Aggarwal & Anr. V/s. Axis Bank
12. In support of his application Mr. Nikam appearing for Revision Applicant in CRA No. 40 of 2023 submits that although the application sought rejection on the ground of limitation, it is evident from the order which has been passed that the grounds of non-absence of cause of action was also taken into consideration by the trial Court. He has invited the attention of this Court to the additional compilation of documents which has been tendered on record and has pointed out that the agreement had been executed with Manjusha Patil and not with the plaintiff and the agreement was in respect of the suit property excluding the area under reservation. He would further submit that the development agreement clearly specifes that the same is in respect of the land excluding the area under reservation.
13. Considered the submissions and perused the papers with the assistance of learned Counsel appearing for the parties.
14. Before adverting to the facts of the case it would be proftable to re-produce the provisions of Order 7 Rule 11 of the C.P.C. which reads as under: [R 11] Rejection of plaint.- The plaint shall be rejected in the following cases- (a) where it does not disclose a cause of action; (b) where the relief claimed is under-valued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fxed by the Court, fails to do so;
(c) where the relief claimed is properly valued but the plaint is written upon paper insuffciently stamped, and the plaintiff, on being required by the Court to supply the requisite stamppaper within a time to be fxed by the Court, fails to do so;
(d) where the suit appears from the statement in the plaint to be barred by any law: (e) Where it is not fled in duplicate; (f) Where the plaintiff fails to comply with the provisions of rule 9:] Provided that the time fxed by the Court for the correction of the valuation or supplying of the requisite stamp-papers shall not be extended unless the Court, for reasons to be recorded, is satisfed that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fxed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.
15. The provisions of Order 7 Rule 11 of the C.P.C. was considered R.V. Patil 10 of 30 by the Apex Court in the case of Dahiben vs Arvindbhai Kalyanji wherein the principles were analyzed and guidelines were laid in paragraph 23 which reads thus: 23.[2] 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 satisfed that the action should be terminated on any of the grounds contained in this provision. 23.[3] 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. 23.[4] In Azhar Hussain v. Rajiv Gandhi this Court held that the whole purpose of conferment of powers under this provision is to ensure that a litigation which is meaningless, and bound to prove abortive, should not be permitted to waste judicial time of the Court in the following words:
23.5. The power conferred on the court to terminate a civil 8(2020). 7 SCC 366 R.V. Patil 11 of 30 action is, however, a drastic one, and the conditions enumerated in Order VII Rule 11 are required to be strictly adhered to.
23.6. 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.
23.8. Having regard to Order VII Rule 14 CPC, the documents fled alongwith 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.
23.9. 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 whether a case for rejecting the plaint at the threshold is made out.
23.10. At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration.
24.11. The test for exercising the power under Order VII Rule 11 is that if the averments made in the plaint are taken in entirety, in conjunction with the documents relied upon, would the same result in a decree being passed. This test was laid down in Liverpool & London S.P. & I Assn. Ltd. v. M.V.Sea Success I which reads as:
R.V. Patil 12 of 30
23.12. In Hardesh Ores (P.) Ltd. v. Hede & Co. the Court further 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. 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.
23.13. If on a meaningful reading of the plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justifed in exercising the power under Order VII Rule 11 CPC.
23.14. The power under Order VII Rule 11 CPC may be exercised by the Court at any stage of the suit, either before registering the plaint, or after issuing summons to the defendant, or before conclusion of the trial, as held by this Court in the judgment of Saleem Bhai v. State of Maharashtra. The plea that once issues are framed, the matter must necessarily go to trial was repelled by this Court in Azhar Hussain case.
23.15. The provision of Order VII Rule 11 is mandatory in nature. It states that the plaint “shall” be rejected if any of the grounds specifed in clause (a) to (e) are made out. If the Court fnds 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.”
16. It is settled that for the purpose of considering an application under the provisions of Order 7 Rule 11, the averments in the plaint are germane. The plaintiff has fled Special Civil Suit No. 100 of 2022 seeking the relief of recovery of the amount of compensation in respect of acquisition of the suit property from defendant Nos. 1 to 4 alongwith interest. The other reliefs which R.V. Patil 13 of 30 are sought as regards the resolutions which were passed by the Municipal Corporation, by reason of which the compensation was given to defendant Nos. 2 to 4 and for implementation of the notifcation dated 29th April, 2005.
17. The case of the plaintiff is that the suit property bearing Survey No. 136 admeasuring 4 hectare 45 R was owned by defendant No. 2 and that the plaintiff a registered partnership frm is engaged in the business of developing the property. It is averred that defendant No. 2 for fnancial constraint decided to develop the suit property and by agreement dated 24th April, 2000 on the agreed consideration defendant No. 2 agreed to hand over the rights of development in the suit property only for the purpose of carrying on the development and other ancillary reasons such as handing over the reserved area, accepting the compensation for representing defendant No. 2 in the Court cases, irrevocable power of attorney dated 26th June, 2002 was executed. It is pleaded that on 25th June, 2002 a registered development agreement was executed along with the irrevocable power of attorney dated 27th September, 2006 and power of attorney dated 27th September,
2006. It is claimed that based on these documents, the development rights have been given to the plaintiff alongwith the R.V. Patil 14 of 30 irrevocable power to hand over the reserved portion and to accept compensation in respect of the same. It is pleaded that the entire consideration has been paid by the plaintiff to defendant No. 2. It is further pleaded that as per the revised development plan dated 01st June, 1977, as regards Survey No. 184 the roads admeasuring 24 meters and 18 meters were proposed.
18. It is pleaded that as regards Survey No. 184, the area affected by the proposed road was 5511 square meters, in respect of which the plaintiff was entitled to the compensation and had requested defendant No. 1 to acquire the same by agreement in the year 2006 and accordingly defendant No. 1 had agreed by communication dated 05th October, 2006 and while handing over the possession, the right to receive the compensation was reserved and as such it is incumbent upon the Municipal Corporation to hand over the compensation to the plaintiff.
19. It is pleaded that the plaintiff got an order for converting the land into non-agricultural land and as per the layout sanctioned by defendant No. 1 Municipal Corporation, the proposed D.P. road is shown as 30 meters. It is further pleaded that as per the R.V. Patil 15 of 30 notifcation of the Urban Development Department, the 30 meters road was further reduced to 24 meters. It is claimed that when a communication was made by the Municipal Corporation for the purpose of amalgamation of the excluded portion of 6 meters into the adjacent plot and for compensation for the acquired plot, the Pune Municipal Corporation by communication dated 16th September, 2019 informed the plaintiff that the compensation in respect of 30 meters road was already given.
20. It is further pleaded that for purpose of handing over the compensation to the defendant No. 2 resolutions passed by the Standing Committee of the Municipal Corporation are illegal and liable to be cancelled, as the compensation is required to be given to the plaintiff. It is further pleaded that by D.P. plan, the earlier 30 meters wide road had been reduced to 24 meters and in spite thereof the Municipal Corporation has paid compensation in respect of 30 meters wide road, which is illegal. The cause of action is stated to have arisen in the month of September, 2019, when it came to the knowledge of the plaintiff that the defendants in collusion with each other have obtained the compensation through fraud. R.V. Patil 16 of 30
21. From a reading of the plaint, the case of the plaintiff is that by the development agreement and irrevocable power of attorney, there was a transfer of the ownership rights in favour of the plaintiff. It is further the case that by virtue of an agreement between the plaintiff and defendant No. 1, the area under reservation was handed over to defendant No. 1 Municipal Corporation and as such defendant No. 1 ought to have paid over the compensation to the plaintiff and not to defendant No. 2 i.e. the original owner. As the compensation has been paid over by defendant No. 1 Municipal Corporation pursuant to the resolutions of the general body meeting, a declaration is sought that the general body resolutions are illegal and not binding for recovery of the compensation from defendant Nos. 1 to 4. The plaintiff also claims that by collusion, the defendant No. 1 has illegally handed over compensation for 30 meters D.P. road which had been reduced to 24 meters.
22. The rejection of the plaint has been sought by defendant No. 1 Municipal Corporation by virtue of the bar operating under the provisions of Section 487 of the MMC, Act, 1949 which reads thus: (1) No suit shall be instituted against the Corporation R.V. Patil 17 of 30 or against the Commissioner, or the Transport Manager, or against any municipal offcer or servant, in respect of any act done or purported to be done in pursuance or execution or intended execution of this Act or in respect of any alleged neglect or default in the execution of this Act:- (a) Until the expiration of one month next after notice in writing has been, in the case of the Corporation, left at the chief municipal offce and, in the case of the Commissioner or of the Transport Manager or of a municipal offcer or servant delivered to him or left at his offce or place of abode, stating with, reasonable particularity the cause of action and the name and place of abode of the intending plaintiff and of his attorney, advocate, pleader or agent, if any, for the purpose of such suit, nor (b) unless it is commenced within six months next after the accrual of the cause of action. (2) At the trial of any such suit- (a) the plaintiff shall not be permitted to go into evidence of any cause of action except such as is sat forth in the notice delivered or left by him as aforesaid; (b) the claim, if it be for damages, shall be dismissed if tender of, suffcient amends shall have been made before the suit was instituted or if, after the institution of the suit, a suffcient sum of money is paid into Court with cost. (3) Where the defendant in any such suit is a municipal offcer or servant, payment of the sum or of any part of any sum payable by him in, or in consequence of the suit, whether in respect of costs, charges, expenses, compensation for damages or otherwise, may be made, with the previous sanction R.V. Patil 18 of 30 of the Standing Committee or the Transport Committee from the Municipal Fund or the Transport Fund, as the case may be.
23. Perusal of the above provision indicates that there is a bar to institution of the suit unless a notice of one month in writing has been served upon the Municipal Corporation stating with reasonable particularity the cause of action and other details. The second requirement is that the suit has to be instituted within a period of six months from the accrual of the cause of action. As regards the issuance of pre-suit notice is concerned, the communication dated 19th January, 2017 is sought to be pressed as pre-suit notice. The said communication of 19th January, 2017 calls upon the Municipal Corporation to make the payment of the compensation on the basis that on 05th October, 2006 the area under the reservation was handed over to the Municipal Corporation and in spite of funds being available from the State Government and despite repeated reminders, the amount of compensation has not been received. The communication further states that if the compensation is not paid within a period of 15 days, legal proceedings will commence. Upon a reading of the said communication dated 19th January, 2017, the cause of action appears to be the non-payment of the compensation by the R.V. Patil 19 of 30 Municipal Corporation. The said communication does not refer to any of the resolutions of the year 2015 which are now sought to be challenged by way of the present suit, nor does it refer to the payment by the Municipal Corporation to defendant No. 2 based on these resolutions. The requirement of a pre-suit notice under the provisions of Section 487(1)(a) of the MMC Act mandates the stating with reasonable particularity the cause of action. If the communication of 19th January, 2017 is perused, in my view the same cannot constitute a pre-suit notice in respect of the cause of action in Special Civil Suit No. 100 of 2022 i.e. the passing of resolutions of the year 2015 and the consequent payment of the compensation to defendant No. 2.
24. Another obstacle which comes in the way of the plaintiff is the period of limitation, which has been prescribed under Section 487(1)(b). The provisions of Section 487 prescribes a special period of limitation which is six months after the date of accrual of cause of action. The cause of action which has been pleaded in the suit is the payment of compensation to defendant No. 2 which came to the knowledge of the plaintiff in September, 2019. The photocopy of the suit is annexed to the proceedings, however the same does not contain the date of fling. During arguments the date of fling of R.V. Patil 20 of 30 suit was stated by the Revision Applicants as 9th March, 2022 which was not disputed by learned Counsel for the Respondents. As such the suit is ex facie barred by limitation.
25. Learned Counsel appearing for the respondent-plaintiff has sought to contend that the question of limitation is a mixed question of fact and law, which requires evidence to be led. In the present case it is stated by the plaintiff itself that the cause of action arose in the month of September, 2019 and calculating the period of six months from the date of acquiring knowledge in September, 2019, the period of six months expired in March, 2020. It is only when there is a disputed question of fact as regards limitation evidence will be required to be led. In the present case the averments in the plaint and the date of the fling of the suit clearly shows that the suit is ex facie barred by the law of limitation.
26. The trial Court while rejecting the application has considered that the date of knowledge was of the year 2019 and as such the same is within the limitation as regards the challenge to the resolutions of the year 2015. The trial Court failed to take into consideration the provisions of Section 487(1)(b) of the MMC Act which prescribes a special period of limitation of six months. As R.V. Patil 21 of 30 regards the issuance of the pre-suit notice is concerned, the trial Court has considered the communication of 19th January, 2017 as the pre-suit notice without appreciating the cause of action mentioned in the pre-suit notice. The trial Court rejected the application by considering that the issue as far as the limitation is concerned, can be taken into consideration after evidence has been led and that the provisions of Section 487 of the MMC Act does not intend the suit to be fled within a period of six months, after the issuance of the notice. In that respect, the decision of Division Bench of this Court in the case of Satish Dalichand Shah (supra) squarely applies. In that case this Court was considering the provisions of Section 527 of the Mumbai Municipal Corporation Act which is parimateria with the provisions of Section 487 of the Maharashtra Municipal Corporation Act, 1949. This Court after considering the provisions has held in paragraph 11 as under: