SHREEJI CORPORATION & Anr. vs PRAVINBHAI BHAILALBHAI PATEL & Oth.

These two appeals are disposed of by this common order as selfsame order below Exhibit5 in Special Civil Suit No.229 of 2016 passed by the learned 10th Senior Civil Judge, Vadodara is the subject matter of challenge in these appeals.

The Appeal from Order No.278 of 2016 is filed by Tulsi Associates and Nibhabhai Dayaram Gajjar, who are the original defendant Nos. 2 and 3 respectively while respondent No. 1 in the Special Civil Suit No.229 of 2016 pending in the Court of learned 10th Senior Civil Judge, Vadodara. The parties shall hereafter be referred to as the plaintiff and defendant as they are arrayed before the learned trial Court.

Necessary for disposal of these appeals are that the plaintiff filed Special Civil Suit No. 229 of 2016 in the Court of learned 10th Senior Civil Judge, Vadodara for specific performance and also to set aside the sale deed executed and for declaration and permanent injunction and also for protection of the possession of the land bearing survey No. 59, final plot No.228, T.P. Scheme admeasuring 2770 sq. mtrs. (hereinafter referred to as the "Subject Land").

As per the averments made in the plaint that the defendant No.1 vide registered agreement to sale deed dated 09.12.2005 agreed to sell the subject land to the plaintiff on the terms and conditions mentioned therein. Thereafter, vide possession receipt dated 10.12.2005 on Stamp Paper of Rs.50/, the defendant No.1 handed over the possession of the subject land to the plaintiffs. The plaintiff, thereafter, executed one agreement in favour of defendant Nos. 2 and 3. A fresh Public Notice for Title Clearance was inserted in a local newspaper on 16.12.2005. In response to the said Public Notice M/s. Sameer Builders filed his objections. Thereafter, this subject land became the subject matter of dispute in Special Civil Suit No.548 of 2005, instituted by Sameer Builders. It is averred by the plaintiffs that the sale deed in their favour is still in existence, and they are ready and willing to perform there part on the agreement, but, defendant No.3 is not executing the sale deed, and thereafter, filed the aforesaid suit for reliefs as aforesaid. The plaintiffs also took out Exhibit5 application under Order 39 Rule 1(2) of the Code to restrain the defendants. From dispossessing the plaintiffs from the subject land, than further, restraining them from transferring or alienating the subject land in any manner, whatsoever, till the final disposal of the suit. Learned trial Judge by the impugned order partly allowed the Exhibit5 application and restrain the defendant Nos. 2 and 3 by sell, lease, mortgage, or any complete or parcel transfer thereof till the final disposal of the suit. The plaintiff and defendant No.2 are aggrieved by the impugned order and therefore they have challenged it in these two appeals.

Mr. Soparkar, learned senior counsel for Mr. R.D. Dave, learned advocate for the defendant Nos. 2 and 3 submits that the plaintiff is only interested in the differences of the sale consideration as mentioned in the first agreement and the 2nd agreement. It is his further submission that the plaintiff has suppressed the fact of supplementary agreement dated 12.12.2005 with the defendant No.1original land owner. He would also submit that the suit suffers from the bar of limitation as fixed in the agreement as the sale deed was to be executed within two years, whereas, the suit is filed after around 11 years. It is his submission that the plaintiff himself has handed over the possession of the suit land to the defendant Nos. 2 and 3 in the year 2006 by executing notarized agreement. The defendant Nos. 2 and 3 have thereafter incurred huge expenses in developing the suit land. Relying upon the decision of the Supreme Court in the case of Citadel Fine Pharmaceuticals v. Ramaniyam Real Estates Pvt. Ltd. and another, (2011) 9 SCC 147 and the decision of this Court in the case of Mangabhai Jadavbhai Makwana v. Tekchand Chhaganlal Shah & others, AIR 2014 GUJARAT 12 that the time was essence of the contract between the plaintiff and defendant Nos. 1 and 2. The suit is time barred. He, therefore, urges that the appeal from order preferred by the defendant Nos. 2 and 3 may be allowed and the impugned order of the trial Court may be quashed and set aside.

In support of the submission as regards the suit being time barred reliance is placed on the decision of this Court in the case of Mangabhai Jadavbhai Makwana v. Tekchand Chhaganlal Shah & others, AIR 2014 GUJARAT 12 and the decision of the Kerala High Court in the case of Mahboob Pasha v. Syed Zaheeruddin and others, AIR 1988 KARNATAKA 83 .

He has also submitted that the plaintiff had entered into an agreement with the original land owner with intention to sell the suit land to the defendant Nos. 2 and 3. The plaintiff has assigned their rights in favour of the defendant Nos. 2 and 3 who is in possession of the suit land. The original land owner, therefore, has executed the sale deed in favour of defendant Nos. 2 and 3 under instruction of the plaintiff. In this regard, he submits that the plaintiff has himself made a statement in writing before the revenue authority which makes it clear that the plaintiff wanted to earn brokerage by acting as an intermediary between the original land owner and defendant Nos. 2 and 3. Mr. Soparkar, learned senior counsel has also submitted that the plaintiff wanted to earn brokerage by acting as an intermediary between original land owner and defendant Nos. 2 and 3, and therefore, at the most the plaintiff is entitled to the difference between the price of the suit land fixed in the main agreement and the price mentioned in the subsequent agreement with the land owner.

He has placed reliance on the decision of the Supreme Court in the case of Mrs. Sardamani Kandappan v. Mrs. S. Rajalakshmi and others, AIR 2011 SC 3234 (1) . He submits that when in the contract for sale of immovable property schedule is fixed for payment of consideration time would become the essence of the contract. He has also relied upon a decision of the Supreme Court in the case of Man Kaur (Dead) by LRS. v. Hartar Singh Sangha, (2010) 10 SCC 512 to support his contention that the time of essence of the contract. He further submits that the plaintiff has not pleaded in the suit that he is ready and willing to purchase part of the contract, and therefore, suit itself is not maintainable. Therefore, injunction cannot be granted. In support of this contention, he has relied upon the decisions of the Supreme Court in the case of (i) SirajulHaq Khan and others v. The Sunni Central Board of Waqf, U.P. and others, AIR 1959 SC 198, (ii) Ouseph Varghese v. Joseph Aley and others, 1969(2) SCC 539, (iii) N.P. Thirugnanam (D) by LRS. v. Dr. R. JAGAN MOHAN Rao and Others, AIR 1996 SC 116(1). Relying upon the decision of this Court in the case of Veetrage Holdings Pvt. Ltd. v. Gujarat State Textile Corporation Ltd., 1996 (1) GLR 179. He submits that the injunction cannot be granted when the suit filed by the plaintiff is suffers more delay and latches. He, therefore, urges that the impugned order be quashed and set aside.

Mr. D.C. Dave, learned senior counsel for the plaintiff submits that there are no two agreements between the plaintiff and the defendant No.1original land owner. He submits that the 2nd agreement is for the purpose of clarifying the price of the land. It is his further submission that if the defendant Nos. 2 and 3 are permitted to carry out the construction on the suit land, the purpose of filing of the suit would be frustrated. He, therefore, relying upon the decision of the Supreme Court in the case of Julien Educational Trust v. Sourendra Kumar Roy and other, (2010) 1 SCC 379, and submits that the injunction as prayed for in Exhibit5 application may be granted with a direction to the trial Court to dispose of the suit within time limit to be fixed by this Court. It is further submitted that the defendant Nos. 2 and 3 have not made out the case that they will suffer irreparable loss or damage if restrained from carrying out the construction on the suit land, and therefore, also injunction as prayed for is required to be granted. In support of this submission he has placed reliance on the decision of the Supreme Court in the case of Maharwal Khewaji Trust (Regd.) v. Baldev Dass, 2004 (8) SCC 488. He, therefore, urges that the appeal from order preferred by the plaintiff may be allowed in terms of prayers made in Exhibit5 application.

Mr. Mehulsharad Shah, for the defendant No.1 has adopted the arguments of Mr. Soparkar, learned senior counsel for the defendant Nos. 2 and 3. Relying upon the decision of the Supreme Court in the case of (1) Mrs. Saradamani Kandappan v. Mrs. S. Rajalakshmi and others with Mrs. S. Rajalakshmi and others. v. Mrs. Saradamani Kandappan and Another, AIRR 2011 SC 3234 (2) M/s. Citadel Fine Pharmaceuticals v. M/s. Ramaniyan Real Estates P. Ltd. and Another with M/s. Ramaniyan Real Estates P. Lted. And Another V. M/s. Citadel Fine Pharmaceuticals and Another, AIR 2011 SC 3351 (3) MAN KAUR (Dead) by LRS. v. Hartar Singh Sangha, (2010) 10 SCC 512. He submits that the agreement between the plaintiff and defendant No. 1 clearly stipulated that the sale deed was to be executed within two years, and therefore, the suit filed by the plaintiff is beyond the time of limitation. It is his further contention that the plaintiff has nowhere states in the plaint that he is ready and willing to perform his bar of the agreement, and therefore, in view of the decision of the Supreme Court in the case of (1) SirajulHaq Khan and others v. The Sunil Central Board of Waqf. U.P. and others, AIR 1959 SC 198, (2) N.P. Thirugnanam (D) by L.Rs. v. Dr. R. Jagan Mohan Rao and others, AIR 1996 SC 116(1). Relying upon the decision of this Court in the case of Veetrage Holdings Pvt. Ltd. v. Gujarat State Textile Corporation Ltd., 1996 (1) GLH 179. He submits that the injunction ought to have been refused on the ground of delay and laches in instituting the suit. It is his further submission that the plaintiff has not prayed for cancellation of registered sale deed executed in favour of defendant Nos. 2 and 3 by defendant No.1. Therefore, the suit itself is not maintainable. He, therefore, urges that the appeal preferred by the plaintiff may be dismissed and one preferred by the respondent Nos. 2 and 3 may be allowed.

Mr. D.C. Dave, learned senior counsel for the appellant Nos. 2 and 3 submits that that the plaintiff is the prior registered agreement holder, and therefore, in view of the decision of the Supreme Court in the case of Durga Prasad and another. Deep Chand and others, AIR 1954 SC 75. If, ultimately, a specific performance is passed in favour of the plaintiff, the defendant Nos. 2 and 3 can be joined as a confirming parties.

The submission on behalf of the defendants that the suit is time barred, and therefore, the plaintiff is not entitled to the discretionary equitable relief of injunction under Order 39 Rule (1) (2) of the Code cannot be countenanced. This contention is based on the premises that the registered agreement to sale on the basis of which the suit for specific performance was executed on 09.12.2005, and thereafter supplementary agreement was executed on 12.12.2005 whereas the suit was for specific performance came to be filed on 14.06.2016 i.e. almost after eleven years. Relying upon the recital in the agreement wherein it is stipulated that a sum of Rs.15 lac was paid as part payment of sale consideration and balance amount was to be paid within two years and if the plaintiff pays the balance amount of sale consideration. The defendant No.1 was require to execute the sale deed. Therefore, according to Mr. Soparkar, learned senior counsel that the time was the essence of the contract. So far as the contention of Mr. Soparkar, learned senior counsel for the defendant Nos. 2 and 3 that the suit is hit by limitation is concerned, I am of the opinion that at the stage this contention does not require deeper consideration. The Supreme Court in the recent decision in the case of Madina Begum and another v. Shiv Murti Prasad Pandey and other, AIR 2016 SC 3554 has held as under in paragraph NO.18, 19, 20:" 18. An Ahmadsahab Abdul Mulla (2) (Dead) v. Bibijan and Others, the following question of was considered by a three judge Bench of this Court: "Whether the use of the expression " date" used in Article 54 of the Schedule to the Limitation Act, 1963 (in short "the Act") is suggestive of a specific date in the calender?"

"54. For specific performance of 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."

While answering this question on a reference made to the three judge Bench, this Court considered the meaning of the word "date" and "fixed" appearing in Article 54. Upon such consideration, this Court held that the expression "date fixed for the performance" is a crystallized notion. When a date is fixed it means there is a definite date fixed for doing a particular act. Therefore, there is no question of finding out the intention from other circumstances. It was reiterated that he expression "date" is definitely suggestive of a specified date in the calendar. Paragraph 11 and 12 of the report in this regard are of importance and they read as follows:

"11. The invitable conclusion is that the expression "date fixed for the performance" is a crystallized notion. This is clear from the fact that the second part "time from which period begins to run" refers to a case where no such date is fixed. To put it differently, when date is fixed it means that there is a definite date fixed for doing a particular act. Even in the second part the stress is on "when the plaintiff has notice that performance is refused". Here again, there is a definite point of time, when the plaintiff notices the refusal. In that sense both the parts refer to definite dates. So, there is no question of finding out an intention from other circumstances.

Whether the date was fixed or not the plaintiff had notice that performance is refused and the date thereof are to be established with reference to materials and evidence to be brought on record. The expression "date" used in Article 54 of the Schedule to the Act definitely is suggestive of a specified date in the calendar. We answer the reference accordingly. The matter shall now be placed before the Division Bench for deciding the issue on merits."

Quite independently and without reference to the aforesaid decision, another Bench of this Court in Rathnavathi and another v. Kavita Ganashamdas came to the same conclusion. It was held in paragraph 42 of the report that a mere reading of Article 54 would show that if the date is fixed for the performance of an agreement, then noncompliance with the agreement on the date would give a cause of action to file a suit for specific performance within three years from the date so fixed. But when no such date is fixed, the limitation of three years would begin when the plaintiff has notice that the defendant has refused the performance of the agreement. It was further held, on the facts of the case that it did not fall in the first category of Article 54 since no date was fixed in the agreement for its performance."

In view of the above, proposition of law the decisions relied upon by the learned advocate for the defendant have not applicable and whether the time was essence of the contract and that the suit is filed beyond the period of limitation becomes mix question of law and fact. I am, therefore, of the opinion that the learned trial Judge has rightly held in the impugned order that the issue of limitation can be decided only after recording the evidence of the parties.

The contention that the suit is not maintainable and is the prayer for cancellation of sale deed entered into between the defendant No.1 and defendant Nos. 2 and 3 is not prayed for. This submission can not be accepted. The Supreme Court in the case of Durga Prasad (supra) in situation like this the proper form of decree would be to direct the suitable performance of contract between the vendor and vendee and direct the subsequent transferee to join in the conveyance so as to best in total which resides in him to the first transferee.

At this stage, I am of the view that it is to premature to record a conclusion that since the plaintiff had not made prayer for cancellation of sale deed between defendant No.1 and defendant Nos. 2 and 3 as many conscious issues are involved which requires trial of the suit.

It is true that prima facie the plaintiff himself has put defendant Nos. 2 and 3 in possession of the subject land and they have incurred some expenses for development. Still, however, the submission on behalf of defendants that the plaintiff had in fact agreed to purchased the subject land from defendant No.1 for being sold to defendant Nos. 2 and 3 and was interested in the brokerage cannot be accepted at this stage, merely because, the plaintiff had addressed a communication to the municipal corporation.

It emerges that the plaintiff had given four cheques to the defendant No.1 who has not inchased these cheques. The perusal of the record shows that the defendant No.1 has not inchased these cheques but the reason for non no incashment are not forthcoming. The plaintiff as well as defendant No.1 have maintains curious silence on this aspect. Be that as it may, even after accepting the cheques instead of executing the sale deed in favour of plaintiff, defendant No.1 executed the sale deed in favour of defendant Nos. 2 and 3. Here, at this juncture to conduct of defendant No.1 is also very curious and suspicious. Earlier Special Civil Suit No.229 of 2016 was filed by Sameer Builders against the defendant No.1 for specific performance. In the said suit the defendant No.1 had supported the plaintiff by confirming that an agreement to sale is executed in favour of the plaintiff. Whereas in the present suit, he has taken an opposite view and has supports defendant Nos. 2 and 3 in whose favour he has executed a registered sale deed. This conduct of the defendant No.1 is also required to be examined in the suit.

The learned trial Judge has examined the provisions of Section 17, 48 and 69 of the Registration Act and had recorded a findings that an instrument by which the movable or immovable property is to be transferred for consideration are required to be compulsorily registered under Section 17 and under Section 48. If rights are created in favour of two persons in respect of some immovable property, the right created later shall be subject to the rights earlier created. In the present case also the defendant No.1 had created a right in favour of the plaintiff in 2005 by executing registered sale deed, and therefore, a notarized agreement to sell in favour of defendant Nos. 2 and 3 which ultimately culminated into registered shall deed between them. In the backdrop of this scenario it cannot be said that the rights created in favour of the plaintiff by the defendant No.1 by executing registered agreement to sale as distinguished by executing a registered sale deed in favour of defendant Nos.2 & 3.

Looking to the history of the transaction between the plaintiff and defendant No.1 on one hand and defendant Nos. 2 and 3 on the other hand, the learned trial Judge has with a view to protect interest of both the parties that is the plaintiff and defendant Nos. 2 and 3 who are admittedly in possession of the suit land. As passed the impugned order whereby the defendant Nos. 2 and 3 are prevented from creating any further rights in favour of the third parties during the pendency of the suit. I am of the view that the discretion examined by learned trial Judge by assigning cogent reasons is not perverse or illegal.

The scope of an appeal under order 41 Rule 1(r) of the Code is not akin to a regular appeals against the final judgment and decree. The plausible view taken by the learned trial Judge supported by cogent reason cannot be substituted by another view in an appeal under Order 41 Rule 1(r). I am, therefore, of the opinion that the impugned order of the learned trial Judge does not warrant interference in this appeal.

The undisputed fact has emerged from the records are that the defendant Nos. 2 and 3 are in possession of the suit premises and they have incurred some expenses for development. Considering the nature of dispute involved in the suit, I am of the view that the dispute is required to be finally resolved between the parties by expeditious disposal of the suit. So that the interest of the contesting parties can be taken care of by directing the trial Court to decide the suit finally within certain time line.

For the foregoing reasons, these appeals fail and is hereby dismissed.

The learned trial Court is directed to finally disposed of the Special Civil Suit No.229 of 2016 in accordance with law on the basis of the pleadings and the evidence oral as well as documentary which may be produced by the parties by 31st December, 2017.