@JUDGMENTTAG-ORDER
K. Chandru
1. Heard both sides. In O.A. No. 926 of 2003, the applicants are the plaintiffs. They sought for an order of interim injunction restraining the
defendants 1 to 5 from alienating or encumbering or creating third party rights in the property described in the schedule. The property is the land
and building (which is since demolished) ad measuring 21 grounds and 312 sq.ft. in R.S. No. 342/2 Part at Door Nos. 153, 154, 155 and 156 of
Peters Road, Gopalapuram, Chennai-86.
2. The plaintiffs filed the suit for specific performance of the agreement, dated 18.7.1991 executed between the defendants 1 to 5 in favour of the
plaintiffs in respect of the property in the schedule and for a consequential direction to hand over the possession of the property, which was illegally
taken from M/s. Alsa Constructions and Housing Limited, to the plaintiffs in terms of the agreement, dated 18.7.1991. M/s. Alsa Constructions
and Housing Limited had gone into liquidation. Therefore, the Official Liquidator has been made as the 6th defendant.
3. In the application for interim injunction, only notice was ordered. Therefore, defendants 1 to 5 has now come forward with an another
application in A. No. 1442 of 2004 filed under Order 7 Rules 11(a) and (d) for rejection of plaint.
4. It was stated that one Dega Sundaram Reddy, the husband of the first plaintiff and the father of plaintiffs 2 to 4 entered into an agreement with
the first defendant for developing the suit schedule property. In terms of the development agreement, dated 18.7.1991, late Dega Sundaram
Reddy had to put up a multistoried residential complex in an extent of 1,17,000 sq.ft. at his cost and allot 38,000 sq.ft. to the first defendant,
retaining for his benefit the remaining 79,000 sq.ft. On 20.09.1991, no objection was granted by the appropriate authority in terms of the Income
Tax Act. Thereafter, on 11.8.1994, a Tripartite agreement was entered between Late Dega Sundaram Reddy, the first defendant and Alsa
Construction and Housing Limited (since liquidated). The remaining 79,000 sq.ft. of constructed area and 79/117 undivided share in the land was
to be shared between Alsa Housing and Construction Limited and Late Dega Sundaram Reddy. However, on 29.1.1995, Dega Sundaram Reddy
expired leaving behind him the plaintiffs as his legal heirs.
5. On 16.3.1998, the first defendant issued a notice to the fourth plaintiff and Alsa Construction and Housing Limited holding that the tripartite
agreement must be treated as void and the first defendant was at liberty to carry out the work of construction himself or to fix up an another
promoter/ builder to commence and to complete the venture without reference to them. On 24.3.1998, M/s. Alsa Construction and Housing
Limited sent a reply notice through its counsel. On 8.6.1998, the plaintiffs'' counsel sent a reply, stating that Alsa Construction and Housing Limited
had committed breach of agreement, dated 11.8.1994 and the rights of the plaintiffs and the first defendant will be revived as per the earlier
agreement, dated 18.7.1991. The first defendant contended by reply, dated 12.6.1998, that the agreement, dated 18.7.1991 is not in subsistence
and it is barred by limitation. It was also stated that the earlier agreement as well as tripartite agreement had become null and void and
unenforceable. It must be stated that Alsa Constructions and Housing Limited went into liquidation even as early as 25.09.2000. The present suit
was filed on 23.09.2003.
6. Though in the application filed by the plaintiff it was stated that respondents were in possession, in view of the order of injunction in I.A. No.
21414 of 2000 in O.S. No. 7913 of 2000 pending on the file of the 9th Assistant Judge, City Civil Court, Chennai, they were restrained from
interfering with the possession of the first respondent/defendant. Therefore, they sought for an injunction against the defendants from alienating or
encumbering the properties.
7. Since only notice was ordered in this application, which was taken out as early as 25.11.2003, the question of granting an order at this juncture
that too after six years may not arise. A counter affidavit has been filed by the second defendant on his behalf and on behalf of other respondents.
In any event, any encumbrance on the property is pendente lite, there is no need to order the relief sought for. Hence, O.A. No. 926 of 2003
stands dismissed.
8. The defendants have taken out an application in A. No. 1442 of 2004 for rejecting the plaint. The first ground was that the suit for specific
performance is based on the agreement, dated 18.7.1991 and the suit was filed in the year 2003. Hence it is barred by limitation on the face of it.
The agreement, dated 18.7.1991 is only a development agreement. The tri-partite agreement is dated 11.8.1944 between Dega Sundaram Reddy,
the first defendant and Alsa Construction and Housing Limited. Since plaintiffs and Alsa Construction and Housing Limited had committed breach,
the agreement became void. Therefore, if the agreement, dated 11.8.1994 is removed, the parties will be governed by the earlier agreement dated
18.7.1991. Therefore, in terms of Article 54, the limitation prescribes for specific performance of the contract is only three years. The plaint has
been filed as if there is no time limit fixed for filing such a suit. The suit is also without any cause of action. Hence it is liable to be rejected in terms
of Order 7 Rules 11 (a) and (d).
9. Mr. A.L. Somayaji, learned Senior counsel leading M/s. Gupta and Ravi appearing for the first defendant submitted that the suit is barred by
limitation. He placed reliance upon the judgment of the Supreme court in N.V. Srinivasa Murthy and Others Vs. Mariyamma (dead) by Proposed
LRs. and Others, . He relied on the following passages found in paragraphs 16 and 17 of the said judgment, which is as follows:
16. The High Court does not seem to be right in rejecting the plaint on the ground that it does not disclose any ""cause of action"". In our view, the
trial court was right in coming to the conclusion that accepting all averments in the plaint, the suit seems to be barred by limitation. On critical
examination of the plaint as discussed by us above, the suit seems to be clearly barred on the facts stated in the plaint itself. The suit as framed is
prima facie barred by the law of limitation, provisions of the Specific Relief Act as also under Order 2 Rule 2 of the Code of Civil Procedure.
17. This is a fit case not only for rejecting the plaint but imposing exemplary costs on the appellant on the observations of this Court in the case of
T. Arivandandam v. T.V. Satyapal : (SCC p.468)
The trial court must remember that if on a meaningful -- not formal -- reading of the plaint it is manifestly vexatious and meritless in the sense of not
disclosing a clear right to sue, it should exercise its power under Order 7 Rule 11 CPC taking care to see that the ground mentioned therein is
fulfilled. If clever drafting has created the illusion of a cause of action, the court must nip it in the bud at the first hearing by examining the party
searchingly under Order 10 CPC. An activist judge is the answer to irresponsible law suits. The trial courts would insist imperatively on examining
the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such
men (Chapter 11) and must be triggered against them.
10. The learned Senior Counsel also placed reliance upon the judgment of the Supreme Court in Hardesh Ores Pvt. Ltd. Vs. Hede and Company,
and relied on the following passages found in paragraphs 25 and 41, which are as follows:
25. The language of Order 7 Rule 11 CPC is quite clear and unambiguous. The plaint can be rejected on the ground of limitation only where the
suit appears from the statement in the plaint to be barred by any law. Mr. Nariman did not dispute that ""law"" within the meaning of clause (d) of
Order 7 Rule 11 must include the law of limitation as well. It is well settled that whether a plaint discloses a cause of action is essentially a question
of fact, but whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in
their entirety must be held to be correct. The test is whether the averments made in the plaint, if taken to be correct in their entirety, a decree would
be passed. The averments made in the plaint as a whole have to be seen to find out whether clause (d) of Rule 11 of Order 7 is applicable. It is not
permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form
that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent
grammatical sense. As observed earlier, the language of clause (d) is quite clear but if any authority is required, one may usefully refer to the
judgments of this Court in Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I and Popat and Kotecha Property v. State Bank of
India Staff Assn.
41. We are, therefore, satisfied that the trial court as well as the High Court were justified in holding that the plaint deserved to be rejected under
Order 7 Rule 11 CPC since the suit appeared from the statements in the plaint to be barred by the law of limitation. We, therefore, find no merit in
these appeals and the same are accordingly dismissed.
11. Therefore, the learned Senior Counsel appearing for the defendants contended that the suit being barred by limitation, the application for
rejecting the plaint may be allowed.
12. On the contrary, Mr. P.R. Raman, learned counsel for the plaintiffs relied upon the decision of the Supreme Court in Ramzan Vs. Hussaini, and
referred to the following passage found in paragraph 6 of the said judgment, which may be extracted below:
6. The relevant provisions in the alleged agreement of sale as quoted in the judgment of the trial court reads as follows:
This house is under mortgage with Jethmal Bastimal for Rs. 1000. When you will get this house, the description of which is given below, redeemed
from M/s Jethmal Bastimal and take the papers of the registry in your possession, on that day I will have the sale deed of the said house, written,
executed and registered in your favour.
(emphasis supplied)
The question is whether a date was ""fixed"" for the performance of the agreement and in our view the answer is in the affirmative. It is true that a
particular date from the calendar was not mentioned in the document and the date was not ascertainable originally, but as soon as the plaintiff
redeemed the mortgage, it became an ascertained date. If the plaintiff had, immediately after the redemption, filed the suit, could it be thrown out
on the ground that she was not entitled to the specific performance asked for? We do not think so. She would have been within her rights to assert
that she had performed her part of the contract and was entitled to insist that her brother should complete his part. The agreement is a typical
illustration of a contingent contract within the meaning of Section 31 of the Indian Contract Act, 1872 and became enforceable as soon as the
event of redemption (by the plaintiff herself) happened. We agree with the view of the Madras High Court in R. Muniswami Goundar v. B.M.
Shamanna Goudal expressed in slightly different circumstances. The doctrine of id certum est quod certum reddi potest is clearly applicable to the
case before us which in the language of Herbert Broom (in his book dealing with legal maxims) is that certainty need not be ascertained at the time;
for if, in the fluxion of time, a day will arrive which will make it certain, that is sufficient. A similar question had arisen in Duncombe v. Brighton Club
and Norfolk Hotel Company, relied upon in the Madras case. Under an agreement, the plaintiff had supplied some furniture to the defendant for
which payment was made but after some delay. He claimed interest. The rule at common law did not allow interest in such a case, and the plaintiff
in support of his claim relied upon a statutory provision which could come to his aid only if the price was payable at a certain time. Blackburn, J.
observed that he did not have the slightest hesitation in saying that the agreement contemplated a particular day, which, when the goods were
delivered would be ascertained, and then the money would be payable at a certain time; but rejected the plaintiffs demand on the ground that the
price did not become payable by the written instrument at a certain time. The other learned Judges did not agree with him, and held that the statute
did not require that the document should specify the time of payment by mentioning the day of payment. If it specified the event upon which the
payment was to be made, and if the time of event was capable of being ascertained, the requirements of the section were satisfied. The same is the
position in the case before us. The requirement of Article 54 is not that the actual day should necessarily be ascertained upon the face of the deed,
but that the basis of the calculation which was to make it certain should be found therein. We, accordingly, hold that under the agreement the date
for the defendant to execute the sale deed was fixed, although not by mentioning a certain date but by a reference to the happening of a certain
event, namely, the redemption of the mortgage; and, immediately after the redemption by the plaintiff, the defendant became liable to execute the
sale deed which the plaintiff was entitled to enforce. The period of limitation thus started running on that date. The case is, therefore, covered by
the first part of Article 54 (third column) and not the second part.
Therefore, he contended that since the agreement contemplated certain acts to be done, the plea of limitation set up by the defendant is not valid
and the suit is well within time.
13. He also relied on the judgment of the Supreme Court in Kamala and Others Vs. K.T. Eshwara Sa and Others, and placed reliance upon the
following passage found in paragraphs 44 and 45, which is as follows:
44. In Popat and Kotecha Property v. SBI Staff Assn. the question which arose for consideration was as to whether the suit was barred by
limitation. It was held: (SCC p.517, paras 22-23)
22. There is distinction between ""material facts"" and ""particulars"". The words ""material facts"" show that the facts necessary to formulate a complete
cause of action must be stated. Omission of a single material fact leads to an incomplete cause of action and the statement or plaint becomes bad.
The distinction which has been made between ""material facts"" and ""particulars"" was brought by Scott, L.J. in Bruce v. Odhams Press Ltd.
23. Rule 11 of Order 7 lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself,
irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised, and
also does not say in express terms about the filing of a written statement. Instead, the word ""shall"" is used clearly implying thereby that it casts a
duty on the court to perform its obligations in rejecting the plaint when the same is hit by any of the infirmities provided in the four clauses of Rule
11, even without intervention of the defendant. In any event, rejection of the plaint under Rule 11 does not preclude the plaintiffs from presenting a
fresh plaint in terms of Rule 13.
This Court opined that therein questions of fact were to be determined.
45. The matter, however, was referred to a three-Judge Bench of this Court in Balasaria Construction (P) Ltd. (1) v. Hanuman Seva Trust.
However, as no conflict of decisions of this Court was found, it was referred back to the two-Judge Bench again. A two-Judge Bench of this
Court in Balasaria Construction (P) Ltd. (2) v. Hanuman Seva Trust 8 held: (SCC p.661, para 8)
8. After hearing counsel for the parties, going through the plaint, application under Order 7 Rule 11(d) CPC and the judgments of the trial court
and the High Court, we are of the opinion that the present suit could not be dismissed as barred by limitation without proper pleadings, framing of
an issue of limitation and taking of evidence. Question of limitation is a mixed question of law and fact. Ex facie in the present case on the reading
of the plaint it cannot be held that the suit is barred by time. The findings recorded by the High Court touching upon the merits of the dispute are set
aside but the conclusion arrived at by the High Court is affirmed. We agree with the view taken by the trial court that a plaint cannot be rejected
under Order 7 Rule 11(d) of the Code of Civil Procedure.
Relying upon the said decision, he stated that in the present case, the question of limitation was not a pure question of law and for its
determinations, certain facts will have to be ascertained and that can be done only at the time of trial. In the light of the same, he stated that the suit
is maintainable and in any event, it requires trial.
14. As rightly contended by Mr. P.R. Raman, learned counsel for the plaintiff, the Supreme Court in its judgment of Kamala''s case (cited supra),
has held that the suit cannot be dismissed without proper pleadings, framing of issues on limitation and taking evidence. The question of limitation is
the mixed question of law and facts. Therefore, a mere reading of plaint, it cannot be held that the suit is barred by limitation. At this stage, the
court cannot look into the pleadings of the defendants. In the light of the same, application in A. No. 1442 of 2004 stands dismissed. No costs.
