Rajinder Vohra v. M/S Fountain Logde Pvt Ltd & Ors.

15. Counsel further submits that as per Clause 8 of the first Agreement to Sell dated 04.07.2008, the plaintiff was entitled to receive his share in profit in case the suit property was re-sold. It is also contended that the sellers entered into a subsequent Agreement to Sell in the year 2011 and the sellers sold the property, but they did not hand over the share which was to be received by the plaintiff and defendant no. 11. In view thereof, counsel contends that the plaintiff and defendant no.11 are entitled to specific performance of the Agreement to Sell dated 04.07.2008. Counsel further submits that the cause of action for recovery of this amount arose only in the year 2014 when the seller/ defendant no.1 executed a Sale Deed in favour of defendants no. 6 to

10. Counsel for the non-applicant also submits that the present suit is barred by limitation as the cause of action arose only in the year 2014.

16. I have heard learned counsel for the parties and considered their rival submissions. I deem it appropriate to reproduce Order VII Rule 11 CPC; which reads as under:

17. Before the rival submissions of the counsel for the parties can be considered, a few undisputed facts may be noticed. It is not in dispute that the plaintiff had entered into an Agreement to Sell with defendant no. 1 company, represented by defendants no. 2 and 3 on 4.7.2008 with respect to the suit property.

18. It is also not in dispute that in the year 2011 another Agreement to Sell dated 23.06.2011 was entered into between defendant no. 1 (seller) and defendants no. 4 and 5 (buyers) in the present suit, with respect to the same suit property. It is also not in dispute that in the second Agreement to Sell, the present plaintiff and defendant no.11 were parties referred to as „Collaborators‟ and have executed/signed the second Agreement to Sell. It is also not in dispute that as disputes and differences had arisen between the parties to the second Agreement to Sell dated 23.06.2011, CS (OS) 1770/2012 was filed by the defendants no. 4 and 5, wherein the plaintiff and defendant no. 11 were also made parties. It is also not in dispute that the said suit was compromised and dismissed as withdrawn. As per the compromise, the property was sold by defendant no. 1 to defendants no. 6 to 10.

19. The pleadings, however, show that based on the settlement, the suit property stands sold to defendants no. 6 to 10 and a sale deed has been executed by defendants no.1 to 3 in favour of defendants no.6 to 10. It is also not in dispute that aggrieved by the fact that the plaintiff and defendant no.11 were not given any benefit which understanding is being claimed between the sellers, plaintiff and defendant no.11, the plaintiff filed CS(OS) 101/2014, a copy of which has been placed on record. The relief claimed in the said suit is extracted hereinbelow: “a) pass a decree of specific performance of Contract/Agreement to Sell & Purchase dated 04.07.2008 in favour of the plaintiff and against the defendants No. 1 to 3, directing them to execute, transfer and register transfer documents in respect of property No.55, Basti Arakshan Scheme, bearing Municipal No.XV/8651/1 measuring 233.24 sqr. yards on receipt of the balance sale consideration price; b) pass a decree of declaration that the Sale deed dated 17.04.2013 in respect of the property being property bearing No.55, Basti Arakshan Scheme, bearing Municipal No.XV/8651/1 situated at Arakshan Road, Paharganj, New Delhi, measuring 233.24 sqr. yds. Which was executed by the defendants no.1 to 3 in favour of defendants no.6 to 10 and was registered with the Sub- No.2853, Addl. Book No.1, Volume No.15106 at page 88 to 104 on 18.04.2013, is a void document and is not binding on the plaintiff; c) pass a decree of cancellation cancelling the Sale Deed dated 17.04.2013 in respect of the property being property No.55, Basti Arakshan Scheme, bearing Municipal No.XV/8651/1 situated at Arakshan Road, Paharganj, New Delhi, measuring 233.24 sqr. yds. which was executed by defendants No.1 to 3 in favour of defendants No.6 to 10 and was registered with the Sub-Registrar, Asaf Ali Road, New Delhi as document No.2853, Addl. Book No.1, Volume No.15106 at page 88 to 104 on 18.04.2013, is cancelled and is not binding on the plaintiff; d) pass a decree directing the defendant No.12, DDA to restore the leasehold of the property being property No.55, Basti Arakshan Scheme, bearing Municipal No.XV/8651/1 situated at Arakshan Road, Paharganj, New Delhi, measuring 233.24 sqr. yds. and to grant permission to transfer the said leasehold rights in favour of the plaintiff by the defendants lessee i.e. defendants No.1 to 3, after restoring the same; e) pass a decree of permanent & mandatory injunction thereby restraining the defendants, their agents, servants, assigns, administrators, successors & alienates etc. not to alienate, gift, mortgage, transfer, or from creating any third party interest in any manner whatsoever in respect of the property being property No.55, Basti Arakshan Scheme, bearing Municipal No.XV/8651/1 situated at Arakshan Road, Paharganj, New Delhi, measuring 233.24 sqr. yds. or in favour of any other person except to the plaintiff; f) allow costs of the plaintiff to him against the defendants throughout;”

20. In this backdrop, the counsel for the applicant has pleaded rejection of the plaint on two grounds; first, as being barred by limitation and second, as being barred under Order XXIII Rule 1 (4). BAR TO SUBSEQUENT SUIT [Order XXIII Rule 1(4)]

21. The first question, which arises for consideration is whether the suit, which is identical in nature seeking identical relief to a previous suit, can be entertained or not.

22. Prior to dealing with the rival contentions of the parties, I deem it appropriate to reproduce Sub-rules (3) and (4) of Rule 1 Order XXIII of the Code of Civil Procedure, which read as under:

23. The argument of learned counsel for the applicant is that the second suit is not maintainable as identical prayers were made in CS (OS) 101/2014. On the contrary, submission of counsel for the nonapplicant is that CS (OS) 101/2014 was, infact, dismissed as withdrawn, but leave was granted to the plaintiff to take recourse to such remedies, which would be available to him in accordance with law.

24. The law in respect of Order XXIII Rule 1 is well settled, when any person withdraws from a suit without seeking permission under Rule 1 (3), then he is precluded from instituting any fresh suit in respect of the same action. This is as when a person exhausts his remedy by instituting a suit and later withdraws the same, it is presumed that he has abandoned his claim. This ofcourse is subject to leave being taken from the court to institute a fresh suit. The scope of the Rule was considered by the Supreme Court in Sarguja Transport Service (Supra), the relevant paragraph of which reads as under:

25. In K.S. Bhoopathy (Supra), the Supreme Court observed as under: “13. The provision in Order XXIII Rule 1 CPC is an exception to the common law principle of non-suit. Therefore on principle an application by a plaintiff under sub-rule (3) cannot be treated on a par with an application by him in exercise of the absolute liberty given to him under sub-rule (1). In the former it is actually a prayer for concession from the court after satisfying the court regarding existence of the circumstances justifying the grant of such concession. No doubt, the grant of leave envisaged in sub-rule (3) of Rule 1 is at the discretion of the court but such discretion is to be exercised by the court with caution and circumspection. The legislative policy in the matter of exercise of discretion is clear from the provisions of sub-rule (3) in which two alternatives are provided; first where the court is satisfied that a suit must fail by reason of some formal defect, and the other where the court is satisfied that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim. Clause (b) of sub-rule (3) contains the mandate to the court that it must be satisfied about the sufficiency of the grounds for allowing the plaintiff to institute a fresh suit for the same claim or part of the claim on the same cause of action. The court is to discharge the duty mandated under the provision of the Code on taking into consideration all relevant aspects of the matter including the desirability of permitting the party to start a fresh round of litigation on the same cause of action. This becomes all the more important in a case where the application under Order XXIII Rule 1 is filed by the plaintiff at the stage of appeal. Grant of leave in such a case would result in the unsuccessful plaintiff to avoid the decree or decrees against him and seek a fresh adjudication of the controversy on a clean slate. It may also result in the contesting defendant losing the advantage of adjudication of the dispute by the court or courts below. Grant of permission for withdrawal of a suit with leave to file a fresh suit may also result in annulment of a right vested in the defendant or even a third party. The appellate/second appellate court should apply its mind to the case with a view to ensure strict compliance with the conditions prescribed in Order XXIII Rule 1(3) CPC for exercise of the discretionary power in permitting the withdrawal of the suit with leave to file a fresh suit on the same cause of action. Yet another reason in support of this view is that withdrawal of a suit at the appellate/second appellate stage results in wastage of public time of courts which is of considerable importance in the present time in view of large accumulation of cases in lower courts and inordinate delay in disposal of the cases.”

26. In the present suit, admittedly an identical suit was filed, being CS (OS) 101/2014, and the same was dismissed as withdrawn and by coincidence by the same Court, which is hearing the application for rejection of plaint today. The order dated 21.01.2014 in CS (OS) 101/2014 reads as under: “Counsel for the plaintiff on instructions wishes to withdraw the present suit and the applications, to enable him to take recourse to such remedies which are available to him in accordance with law. As the suit is withdrawn at the initial stage, plaintiff is entitled to refund of the Court Fee.”

27. To say that leave was granted by the Court to seek such remedy as available in accordance with law would mean that leave was granted to file a fresh identical plaint again is unacceptable for the reason that if the intent was to file a fresh suit, there was no reason for withdrawing the first suit especially keeping in view that both the plaints are almost identical in nature. It is also not in dispute that after the plaintiff withdrew CS (OS) 101/2014, he filed an application for review in CS (OS) 1770/2012, being IA 20829/2014, wherein the following order was passed on 28.10.2014: “IA No.20828/2014 (u/s 152 r.w. 151 CPC) Learned counsel for the defendant No.5/ applicant seeks permission to withdraw the I.A. The I.A. dismissed as withdrawn.”

28. The aforesaid order of dismissal of the review application has attained finality. In my view, when the first suit was withdrawn, the remedy which the plaintiff had in mind was to file a review in CS (OS) NO. 1770/2012. It is not understandable that why the review application was withdrawn and the review petitioner allowed the order to attain finality.

29. Accordingly, in my view the present suit is barred under Order XXIII Rule 1(4) of the Code of Civil Procedure.

LIMITATION

30. The other ground to be considered is as to whether the present suit is barred by limitation?

31. Counsel for the applicant further submits that as far as the plea of limitation is concerned, the second/present suit is patently barred by limitation. Once the second agreement was entered into, it was tacit that the sellers were not interested to sell the suit property to the plaintiff. In fact the plaintiff was aware that the property was being sold and, as provided under Article 54 of the Limitation Act, period of three years would commence from the said date.

32. It is settled law that the plaint may be rejected as being barred by limitation if a holistic reading of the plaint and documents show that it is barred by limitation. All the averments in the plaint must be taken to be true at the time of considering such an application and at the same time, it must be ensured that it is not a case of astute drafting in order to avoid the consequence of Order VII Rule 11. Though there are numerous judicial pronouncements upon the subject, I deem it appropriate to notice Arjan Singh v. Union of India, AIR 1987 Del 165; N.V. Srinivasa Murthy v. Mariyamma, (2005) 5 SCC 548; and Popat and Kotecha Property v. State Bank of India Staff Assn.,

33. Article 54 of the Schedule to the Limitation Act reads as under: “54. For specific performance of a contract. Three years The date of fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused.”

34. The limitation fixed in a suit for specific performance is three years, when a date is fixed for the performance and in case no date is so fixed then the date when the plaintiff has noticed that the performance has been refused.

35. In my view, when the second Agreement to Sell was entered into and which fact was within the knowledge of the plaintiff, the defendants had refused performance as the property was being sold to another person, the period of limitation would commence from the date the second Agreement to Sell was signed, i.e. from 23.06.2011.

36. To say that the period of limitation would begin from the date when defendants no. 1 to 3 had refused to perform their part of the Agreement in the year 2014 cannot be accepted more so when such an averment has not been made in the plaint. Further, the plaintiff himself allowed the seller/defendant no. 1 to sell the suit property to a third person. The plaintiff admittedly is a conforming party to the second Agreement to Sell dated 23.06.2011 and, thus, he accepted the sale of the suit property to a third party and at a subsequent stage he cannot be permitted to complain. Having given his tacit consent to the subsequent Agreement to Sell dated 23.06.2011, the first Agreement to Sell dated 04.07.2008 became dead and the plaintiff readily abandoned his right in the said Agreement.

37. The plaintiff has also placed on record, a copy of the legal notice dated 21.10.2011 which was addressed by the plaintiff to the defendants herein. In the concluding part of this notice, it has been stated that in case of non-compliance, the plaintiff would take recourse to such remedies as available in accordance with law. A reply to this notice was issued on 10.11.2011 refuting the claims of the plaintiff. In the reply, the defendants no. 1 to 3 had specifically stated that the Agreement dated 04.07.2008 was not extended after the initial period of six months and had expired. Though the reply dated 10.11.2011 is replete with such averments, I deem it to reproduce only one paragraph to avoid prolixity. Paragraph 1 of the parawise reply reads as under: “1. That para No. 1 of your notice is not denied to the extant that earlier an Agreement to Sell & Purchase dated 4th July, 2008 between my clients as party No.1 and Shri Rajan Narula and your client Rajinder Vohra as party No.2, was executed. The terms and conditions of the said agreement are a matter of record. It is however submitted that time was the essence of the said contract and due to non-fulfillment of the obligations on the part of party No.2, the agreement had elapsed. It was later on duly acknowledge [sic: acknowledged] by both the parties concerned that the agreement having elapsed, ceased to have any legal effect. Subsequently, a fresh deal was entered into vide an Agreement to Sell & Purchase dated 23rd June, 2011 between my clients as party No.1 and Shri Rajan Narula and Rajinder Vohra as party No.2, and Shri Dharam Pal Vij and Chandeep Sahni as party No.3. The very fact that this agreement dated 23rd June, 2011 was executed was confirmation of the fact that the agreement dated 4th July, 2008 ceased to survive. As a matter of fact, it was duly informed to your client vide reply dated 11.1.2010 by my client that the said agreement dated 4th July, 2008 was valid only for a period of 6 months w.e.f. the said date, and could not be enforced thereafter and that it was never extended after expiry w.e.f. 3rd January, 2009.”

38. Thus, the period of limitation would positively begin from 10.11.2011, while the present suit has been filed on 02.02.2015, which would make the present suit barred by limitation.

ADDITIONAL PLEA

39. As far as the plea with regard to Clause 8 of the Agreement to Sell dated 04.07.2008 is concerned, learned counsel for the plaintiff/nonapplicant has submitted that the prayer made in the second suit is based on specific performance of Clause 8 of the first Agreement to Sell dated 04.07.2008.

40. The argument of learned counsel for the non-applicant is to be tested on the basis of Clause 8 of the Agreement to Sell dated 04.07.2008, which reads as under:

41. The sum and substance of the arguments of the learned counsel for the plaintiff is that as per Clause 8 of the First Agreement to Sell dated 04.07.2008, the plaintiff was entitled to receive money in case the property was re-sold. It is also contended that the defendant no. 1 company/seller entered into a subsequent Agreement to Sell dated 23.06.2011 and the seller sold the property but they did not hand over the share which was to be received by the plaintiff and defendant no.11. In view thereof, counsel contends that the plaintiff and defendant no.11 are entitled to specific performance of the Agreement to Sell dated 04.07.2008. Counsel further submits that the casue of action for recovery of this amount arose only in the year 2014 when the defendant no. 1 company/seller executed a Sale Deed in favour of defendants NO. 6 to 10.

42. In my view, this argument is without any force, firstly, for the reason that there is no such prayer made in the present suit relating to Clause 8 of the first Agreement to Sell. The prayer clause, which has been extracted in para 9 aforegoing would show that the plaintiff is seeking specific performance of Agreement to Sell dated 04.07.2008 and the specific performance is not with respect to Clause 8, but it is for execution of a Sale Deed in his favour. In my view, this submission of learned counsel for the plaintiff is an afterthought and is not borne out from the pleadings.

43. It is also not in dispute that barring the formal paragraphs wherein the plaintiff has brought to the notice of the Court that an earlier suit was filed, which was dismissed as withdrawn, and leave granted to seek such remedies, which may be available has led to filing of the second suit, no new facts are stated in the plaint. The plaintiff has not sought any relief qua Clause 8 of the first Agreement to Sell either in the first suit or in the second suit as the prayer in both the suits is for specific performance with respect to the sale of the suit property, as it is clearly borne out from the prayer clauses, which have been extracted hereinabove.

44. Accordingly, the present application is allowed primarily for two reasons i.e. (i) the present suit is barred by limitation; and (ii) the present suit is barred under Order XXIII Rule 1(4) Code of Civil Procedure as an earlier suit filed by the plaintiff was dismissed as withdrawn and the subsequent suit filed was an identical suit with the same cause of action, which was also dismissed as withdrawn.

45. In view of above, the present plaint and application for interim stay (I.A.3068/2015) stand rejected.

46. I.A. 3221/2016 stands disposed of. G.S.SISTANI, J SEPTEMBER 27, 2016 //msr