Rishi Aggarwal v. M/S VIPUL INFRASTRUCTURE DEVELOPER LTD & ORS.

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, 2016:DHC:7711 CS(OS) 2309/2013 Page 2 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 3 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. 2082[2] 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 4 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 5 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 6 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 7 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:-

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 9 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 10 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 11

11. Article 54 of the Limitation Act is reproduced as under:- “For Specific performance of a contract: Three Years The date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused.”