Amey Realty & Construction LLP vs Bagwe Housing Private Ltd

Kamal Khata, J

1) By this Interim Application, the Defendant No. 9 seeks rejection of the Plaint under Order VII Rule 11 (d) of the Code of Civil Procedure,1908 (CPC).

2) Mr. Sharan Jagtiani, learned Senior Counsel for the Defendant No. 9 submits that the present Suit mainly seeks a declaration to cancelling/ nullifying two Deeds of Surrender both dated 13th February 2006 executed between Defendant No. 1 and Defendant Nos. 2 to 8.

3) The Plaintiff’s case is that by an agreement dated 15th July 1994, Defendant Nos. 2 to 8 had granted development rights in respect of the Suit property bearing old CTS Nos. 182 and 182/1 to 5, admeasuring 4972 square meters., now bearing CTS Nos. 182/A, 182/B, 182/C, 182/D, 182/E admeasuring 5057.70 square meters, situate at Village Mogra, Taluka- Andheri, Mumbai Suburban District, Old Nagardas Road, Andheri (East), Mumbai – 400069.

4) Pursuant to the agreement, Defendant Nos. 2 to 8 executed Power of Attorney dated 26th October 1994 and 26th April 2002 in favour of Defendant No. 1 to enable it to act in respect of the said property. Thereafter, Defendant No.1 awarded a construction contract to the Plaintiff by an agreement dated 13th January 1999 for construction of buildings on Segment I (CTS No. 182/A) and Segment III, (CTS No. 182/C to E). Further, by an agreement dated 26th February 1999, the Plaintiff was appointed the sole selling agent of Defendant No. 1 for sale of flats in the buildings to be constructed on Segment I and III.

5) The Plaintiff is aggrieved by the Deeds of Surrender dated 13th February 2006 under which the Defendant No. 1 surrendered /relinquished its rights under the agreement dated 15th July 1994 to Defendant Nos. 2 to 8 and revoked the above Powers of Attorney dated 26th October 1994 and 26th April 2002 in respect of Segment III admeasuring 1693.09 square meters. The Plaintiff also challenges the Deed of Conveyance dated 26th December 2006 executed between Defendant Nos. 2 to 8 and Defendant No. 9, whereby CTS Nos. 182/C to E were conveyed to Defendant No. 9.

6) Mr. Jagtiani points to paragraph nos. 27 and 45 of the plaint to show that the Plaintiff admittedly had knowledge of the Deeds of Surrender, evinced by its Advocates’ letter dated 21st December 2009. Accordingly, any Suit ought to have been filed by 21st December 2012. The present suit, filed only on 20th August 2016 is  6  years  and  8  months  later,  and  hence  ex-facie  barred  by limitation. He submits paragraph no.57 discloses no explanation and the said suit is vexatious, filed only to stall development and extract a nuisance – value settlement.

7) Mr. Shah, learned Counsel for the Plaintiff, contends that under the agreement dated 15th July 1994 between the Defendant Nos. 2 to 8 (owners) and Defendant No. 1 (developer), the Plaintiff as Power of Attorney holder took several steps. In Segment I, it demolished structures and successfully completed construction “Gajalakshmi” building on CTS 182/A where four flats were allotted to Defendant Nos. 2 to 8. This, he submits, shows performance and benefit received by Defendant Nos. 2 to 8 as owners under the contract.

8) As regards Segment II (CTS 182/B), construction was completed and handed to Brihanmumbai Municipal Corporation (BMC). For Segment III, defaults of Defendant Nos 2 to 8 prevented construction. The Deeds of Surrender themselves, he argues, acknowledge Plaintiff’s rights by requiring cancellation of Plaintiff’s Powers of Attorney. No such consent was given; hence, the Deeds of Surrender are invalid not binding on the Plaintiff. He also relies upon ownership agreements dated 26th December 2006, allotting flat Nos. C501, A601 and C601 in Gajalakshmi to Defendant Nos. 3, 4 and 5 in lieu of the consideration mentioned in the agreement dated 15th July 1994, which have been registered with the Sub Registrar of Assurances and Clause 22 of the agreement dated 15th July 1994, under which the Defendant No. 1 was entitled to TDR, in segment III and in lieu of TDR, Defendant No. 1 allotted flat No. B/101 to Defendant Nos. 2 to 8 in Wing B of Gajalakshmi under the agreement dated 8th April 2008. Recitals No. 4 and 5 of the agreement dated 8th April 2008 confirm the subsistence of 1994 agreement and Defendant No.1’s authority to develop. Referring to these recitals in the agreement as well as the Deeds of Surrender, Mr Shah submits that at all times Defendant Nos. 2 to 8 were aware of the rights of the Plaintiffs in the Suit properly and expressly consented to the same.

9) Mr. Shah further submits that Defendant No. 4 and his daughter-in-law are partners of Defendant No. 9, hence aware of Plaintiff’s rights. He invokes Section 19 of the Specific Relief Act to argue that contracts bind not only parties but also persons claiming under them. Thus, the Plaintiff can seek performance not only against Defendant No.1 but also Defendant Nos 2 to 9 there being privity of contract and being aware of the Plaintiff’s rights in the Suit property. On limitation, he relies on Clause 12 of the agreement dated 13th January 1999 making Defendant No. 1 responsible to obtain the Commencement Certificate for Segment III. Since this was never obtained, he argues that limitation has not commenced as averred in paragraph no.57 of the plaint.

10) Relying on Article 54 of the Limitation Act, 1963, and judgments in the case of Shakti Bhog Food Industries Limited Vs. The Central Bank of India (2020) 17 SCC 260, Chhotanben Vs. Kiritbhai Jalkrushnabhai Thakkar, 2018 6 SCC page 422 Arjan Singh Vs. Union of India. 1986 SCC OnLine Del 110, he contends that limitation is a mixed question of law and fact and the same cannot be decided summarily. He further contends that the period of limitation in case of specific performance begins from the date fixed for performance or when the Plaintiff the performance is refused. In the present case, the date when the Defendant No. 1 would obtain the Commencement Certificate from the MCGM would be the date for performance.

11) In view of the aforesaid, he submits that the Suit ought not to be decided in a summary manner under Order VII Rule 11 and a detailed consideration of facts and merits is required for which evidence ought to be led by the parties and accordingly seeks dismissal of the Interim Application.

Reasoning:

12) I have considered the rival submissions and the record.

13) It  is  settled  law  that  the  Court  must  consider  only averments in the plaint and the documents annexed thereto while deciding an application under Order VII Rule 11. Having examined the averments in the plaint and the Deeds of Surrender exhibited with it, I find that the Plaintiff has not established any privity of contract with Defendant Nos. 2 to 8 or with Defendant No. 9.

14) In my view, the Plaintiff’s cause of action lies, if at all, only against the Defendant No. 1, with whom contract was executed. Mr. Shah has not cited any judgment supporting the contention that mere “awareness” constitutes privity of contract. Admittedly, no agreement exists between the Plaintiff and Defendant Nos. 2 to 8. Mere “awareness” cannot create privity. KPM Builders Pvt. Ltd. Vs. NHAI & Anr. (2015) 15 SCC 394.  Since no agreement recognized in law exists between the Plaintiff and Defendant Nos. 2 to 8, much less Defendant No. 9, no enforceable right arises against them. The admission of Plaintiff as to ‘awareness’, certainly does not constitute privity of contract, but it does something else. It starts the clock ticking against him.

15) I find merit in Mr. Jagtiani’s submission. Referring to paragraph no.27 of the plaint, he highlights that the Plaintiff was aware of Deeds of Surrender at least by 21st December 2009. Any challenge ought to have been filed within the stipulated period of 3 years, i.e., on or before 21st December 2012, in terms of Article 58 of the Limitation Act, 1963. Having failed to do so, and having filed a Suit nearly six years later, the claim is clearly barred against the Defendant No. 9. Where the Court derives a conclusion on examining the plaint that the Suit is barred no evidence is required.

16) Reliance is placed on Dahiben Vs. Arvindbhai Kalyanji Bhanusali (Gajra), (2020) 7 SCC 366 wherein in the Supreme Court reiterated that Order VII Rule 11 provides an independent and special remedy empowering Courts to summarily dismiss a Suit at the threshold if barred by limitation or disclosing no cause of action. The Court stressed that unnecessary protraction of sham litigation must be avoided. The provisions are mandatory, and where any ground under clauses (a) to (e) is made out, rejection of the plaint is inevitable.

17) In ITC Limited Vs. Debts Recovery Appellate Tribunal (1998) 2 SCC 70., the Supreme Court held that clever drafting creating an illusion of a cause of action cannot be permitted and only if a clear right is made out in the plaint, it deserves to be allowed.

18) In Madanuri Shri Rama Chandra Murthy Vs. Syed Jalal 2017 SCC OnLine SC 459 the Supreme Court held that bogus litigations should be “nipped in the bud” and Courts must remain vigilant against camouflage or suppression and determine whether the litigation is vexatious or an abuse of the process of the Court.

19) In Khatri Hotels (P) Ltd. Vs. Union of India 2011 SCC OnLine SC 1236 the Apex Court clarified that where multiple causes of action are alleged, limitation begins from the first accrual of the right to sue; successive violations do not generate fresh causes.

20) In my view, these principles squarely apply to the facts of the present case. In my view, paragraph 27 of the Plaint clearly establishes that the Plaintiff was aware about the Deeds of Surrender. If not in 2006, then certainly by 21st December 2009, as stated in its Advocates letter. Therefore, the cause of action, if any, arose then, and the Plaintiff ought to have sued on or before 21st December 2012.

21) In these circumstances, the filing of the Plaint on 20th August 2016 is clearly beyond limitation. I find no merit in the contention that the Defendant No. 1’s obligation to obtain Commencement certificate for Segment III deferred the limitation period. The Plaintiff’s contract was solely with Defendant No. 1; there is no evidence to show a contract with Defendant Nos. 2 to 9. Hence, mere awareness or receiving incidental benefits arising from Defendant No. 1’s actions cannot confer upon the Plaintiff any enforceable right against Defendant Nos. 2 to 9.

22) In my view, execution of a Power of Attorney in favour of the Plaintiff by Defendant No.1 does not confer any right to sue Defendant Nos. 2 to 9. The Plaintiff lacks cause of action against them because:

A. No privity of contract exists between the Plaintiff and Defendant Nos. 2 to 9.

B. The Joint development agreement dated 15th July 1994 is between 2 to 8 and Defendant No. 1; Plaintiff is not a party.

C. The Powers of Attorney by Defendant Nos 2 to 8 in favour of Defendant No. 1 do not refer to the Plaintiff. The agreements dated 13th January 1999 and 26th February 1999 are only between the Defendant No. 1 and the Plaintiff.

E. The Plaintiff is not a party to the Deed of Surrender dated 13th February 2006.

F. The Defendant Nos. 2 to 9 cannot be treated as “claiming under” Defendant No.1; if anything, rights flowed from Defendant Nos. 2 to 8 to Defendant No. 1, and not vice versa.

23) Reliance by Mr. Jagtiani on Patil Automation Private Limited & Ors. Vs. Rakheja Engineers Private Limited (2022) 10 SCC 1 to submit that the Court can, even suo motu, reject a plaint where Order VII Rule 11 grounds are made out, is also well-taken.

24) Considering the above, the Suit is  ex-facie barred by limitation  and  discloses  no  cause  of  action  against  Defendant Nos. 2 to 9.

25) Accordingly, the Suit stands dismissed against Defendants Nos.2 to 9.

26) At this stage, learned Advocate for Plaintiff request for stay. In view of the aforestated reasons, the request for stay is rejected.

MISCELLANEOUS CIVIL APPLICATION NO.199 OF 2025:

27) In view of the dismissal of the Suit against the Defendant Nos.2 to 9, the Miscellaneous Civil Application No.199 of 2025 seeking the transfer of Suit No.0100957 of 2024 (High Court Suit No.309 of 2014) from the the City Civil Court, Mumbai stands dismissed as infructuous.