True Zone Buildwell Pvt Ltd v. Surendra Pal & Anr.

14. Learned counsel for the appellant submits that various supporting documents relating to the Agreement to Sell were also executed by the respondents in the form of Receipts, Affidavit, Indemnity Bond, Possession Letters, General Power of Attorney, all of which also show that after the receipt of the sale consideration, the respondents were left with no right, title or interest in the land; and no claim whatsoever could have been made by them in relation to the land, including for receiving any additional compensation. The documents so executed also show how the sellers have played fraud upon the buyer.

15. Learned counsel has also contended that the buyer had filed a writ petition challenging the acquisition proceedings in the Punjab and Haryana High Court. The matter was referred to a High Powered Committee of the State Government to consider the prayer of the appellants for release of the parcel of land from acquisition. Learned counsel submits that although this prayer was rejected, but the period of limitation for invoking arbitration would begin from the date prayer made for release of compensation under Section 30 of the Land Acquisition Act, 1984 was rejected, i.e., 27.03.2012. It is contended that this fact has been completely ignored by the learned Single Judge. Additionally, it is contended that the period of limitation would commence from the date when the petition under Section 9 filed before court of learned Additional District Judge, Karnal, subsequent to order dated 27.03.2012, was dismissed on 24.05.2012; and further cause of action would arise when the compensation was actually received by the respondents, which was during the period 2010-14 as per the appellants, and 2010-12 as per the respondents. It is further contended that the scope of interference in proceedings under Section 34 of the Act is narrow and the learned Single Judge could not have lightly set aside the Award, which is a well-reasoned Award passed by the learned Arbitrator.

16. Mr. Nayar, learned Senior Counsel for the respondents submits that there is no infirmity in the order passed by the Single Judge which would require interference in the proceedings under Section 37 of the Act. Senior Counsel submits that the Single Judge has rightly considered that the period of limitation would commence at the latest from the date when the High Powered Committee rejected the claim of the appellant on 01.09.2008. Mr. Nayar has also relied upon Section 17 of the Limitation Act, 1963 to show that the period of limitation would begin to run when the appellant discovered the fraud; and, as per the pleadings of the appellant, fraud was discovered at least as early as the time when the order was passed by the High Powered Committee. Mr. Nayar submits that it is hard to believe that a big developer/construction company would have entered into an Agreement to Sell and paid the entire sale consideration amount without carrying-out a thorough due diligence of the lands, especially when in the Agreement to Sell it was disclosed that Section 4 and 6 Notifications had already been issued. He points out that there is no explanation as to why the appellant did not examine the record and satisfy itself that the sellers had a marketable title and that they were not fettered from selling the land. Learned Senior Counsel submits that the Agreement to Sell was entered into between the parties with open eyes and the appellant was fully aware of the acquisition proceedings and there was no question of fraud having been committed nor was there any averment to that effect in the Statement of Claim. Further, if the appellants were not satisfied as to the clear marketable title, or if their endeavour was to get the land released from acquisition under Section 40 of the Land Acquisition Act, they could have held back the entire sale consideration, or at least part of the sale consideration, to be paid when the land is cleared from acquisition proceedings. Reliance is placed on prayer (a) of the Statement of Claim filed by the appellant before the sole Arbitrator, which is reproduced below: “a) award the claimant an amount of Rs.8,09,17,559/- (Rupees eight crores nine lacs seventeen thousand five hundred fifty nine only) details referred as above in para no.16 of the instant claim petition and be pleased to pass an award thereof accordingly in favour of the claimant and against the respondents.”

17. Accordingly, it is contended that the period of limitation would start running from the time when the High Powered Committee rejected the case of the appellant for release of the land as correctly held by the learned Single Judge.

18. We have heard the learned counsels for the parties and have considered their rival submissions.

19. The basic facts are not in dispute. The parties had entered into an Agreement to Sell on 16.02.2006. The Agreement to Sell clearly records that Notifications under Sections 4 and 6 of the Land Acquisition Act, 1894 had already been issued. The Agreement to Sell also made it clear that after signing of the Agreement to Sell, the respondents would be left with no right, title or interest in the subject land. The observations made in the order passed by the High Powered Committee, by which the representation of the appellant was rejected, read as under:

20. The learned Single Judge has relied upon the above observations while deciding when the period of limitation would begin to run. The Award was rendered on 21.12.2004 i.e. prior to the appellant entering into the Agreement to Sell. It is also the case of the Land Acquisition Collector that at the stage of issuance of Section 9 Notification itself, possession of the land was taken. Despite the Notification under Section 9 having been issued, the parties entered into the Agreement to Sell, when in fact, at that point in time the seller had no title over the land in question. Once the above observations were made, in our view, the learned Single Judge has correctly held that the period of limitation would begin with order dated 05.09.2018 passed by the High Powered Committee, since the effect of this order would be that the Agreement to Sell entered into between the parties would be null and void; and consequently, having no title over the land in question, the sellers had sold the land to the appellant and received the entire sale consideration, thereby giving to the appellant its cause of action. If the appellant was aggrieved, the period of limitation would begin from this point in time and not when the compensation was released in favour of the sellers, as has been claimed in the Statement of Claim, for the reason that the main claim was for refund of the sale consideration paid to the respondents and not for making-over of compensation received by the respondents.

21. The question which would arise for our consideration is this: at what point of time did the appellant realise that a fraud had been played upon it by the sellers; and that it was therefore entitled to refund of sale consideration, which it had paid under a wrong belief that a Section 9 notification had not been issued. In this context, we are compelled to observe that it is hard to believe that a developer/construction company which has entered into several Agreements to Sell would not gather that once Notifications under Sections 4 and 6 had been issued it was necessary to conduct a through due-diligence to check the status of acquisition. We cannot overlook that notice was issued to interestedpersons; public notice was given at a convenient place and/or near the land which has been taken over, stating that the Government is intending to take possession of the land. Notices were also served on the occupier. We also deem it appropriate to reproduce clause 11 of the Agreement to Sell, which reads as under:

22. Reading of the aforesaid clause makes it clear that the second party, i.e., the appellant would get the land released from acquisition from HUDA/Government of Haryana and immediately thereafter, the seller was to execute a proper sale deed of the land in the name of the buyer, whereby again, it is evident that the advanced stage of acquisition proceedings in respect of the land was clearly within the appellant’s knowledge.

23. The learned counsel for the appellant contends that the appellant would be entitled to the benefit of Section 14 of the Limitation Act, 1963, namely of exclusion of time, since on 27.03.2012 they had approached the wrong Court by filing a proceeding under Section 30 of the Land Acquisition Act, 1894 before the Additional District Judge, Karnal, Haryana. We find no force in this submission of the learned counsel as Section 14 of the Limitation Act, 1963 would not apply since the subject matter of the arbitration claim was not a claim for compensation or apportionment of compensation under Section 30 of the Land Acquisition Act, 1894 but only a claim for refund of sale consideration paid under the agreement to sell.

24. We have noticed that in addition to the Agreement to Sell, there were various other documents that were executed like Receipt of Payment, Will and General Power of Attorney, etc., of which the General Power of Attorney was even cancelled on 21.03.2007; and again, arbitration was invoked in 2013, i.e. well beyond three years of cancellation of the General Power of Attorney; and the Statement of Claim was filed another year after the date that arbitration was invoked i.e. in the year

2014.

25. Thus, looking into all these factors, including the decision of the High Powered Committee, we find no infirmity in the order passed by the learned Single Judge. The claim of the appellant is evidently beyond the period of limitation; and is therefore not maintainable, as being time-barred.

26. Accordingly, all the appeals are dismissed. CMs.APPL 39617/2019 & 47430/2019 in FAO(OS) 169/2019 CMs.APPL 45359/2019 & 48050/2019 in FAO(OS) (COMM) 288/2019 CMs.APPL 42543/2019 & 48048/2019 in FAO(OS) (COMM) 251/2019 CMs.APPL 42545/2019 & 48042/2019 in FAO(OS) (COMM) 252/2019 CMs.APPL 42549/2019 & 48038/2019 in FAO(OS) (COMM) 253/2019 CMs.APPL 42551/2019 & 48064/2019 in FAO(OS) (COMM) 254/2019 CMs.APPL 42553/2019 & 48054/2019 in FAO(OS) (COMM) 255/2019 CMs.APPL 42555/2019 & 48056/2019 in FAO(OS) (COMM) 256/2019 CMs.APPL 42557/2019 & 48052/2019 in FAO(OS) (COMM) 257/2019 CMs.APPL 42559/2019 & 48062/2019 in FAO(OS) (COMM) 258/2019 CMs.APPL 42561/2019 & 48060/2019 in FAO(OS) (COMM) 259/2019 CMs.APPL 42563/2019 & 48044/2019 in FAO(OS) (COMM) 260/2019 CMs.APPL 42568/2019 & 48058/2019 in FAO(OS) (COMM) 261/2019 CMs.APPL 42742/2019, 48040/2019 in FAO(OS) (COMM) 236/2019 CMs.APPL 45374-35375/2019, 48046/2019 in FAO(OS) (COMM) 291/2019

27. The applications also stand dismissed in view of the order passed in the appeals. G.S. SISTANI, J ANUP JAIRAM BHAMBHANI, J NOVEMBER 26, 2019 pst