C.A.@ SLP(C)Nos.23062-63/18

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.     OF 2018 [Arising out of S.L.P.(C)Nos.23062-23063 of 2018]

Urvashiben & Anr. ... Appellants

Versus

Krishnakant Manuprasad Trivedi ... Respondent

J U D G M E N T

R. Subhash Reddy, J.

1. Leave granted.

2. These civil appeals are preferred by the defendants in

Civil Suit No.930 of 2017, on the file of the City Civil

Court, Ahmedabad, aggrieved by the judgment and decree of

the High Court of Gujarat dated 10.07.2018 passed in Regular

First Appeal No.160 of 2018 and Civil Application No.1 of

2018.

3. The respondent-plaintiff has filed Civil Suit No.930

of 2017 for specific performance of the Agreement to Sell

dated 13.03.1992 with regard to suit schedule property, i.e.

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Final Plot No.147 of Town Planning Scheme No.3 of Mouje

Shekhpur-Khanpur of Ahmedabad, admeasuring 2821 Sq.Mtrs.  It

is the case of the plaintiff that the predecessor-in-title

of the appellant-defendants, one Chaitanyabhai Patel, had

agreed to sell the suit schedule property to him and execute

Agreement of Sale / Sale Deed for a sale consideration of

Rs.32 lacs.  The total consideration amount of Rs.32 lacs

was paid during the period from 15.01.1990 to 05.09.1991.

It  is  stated  that  such  payments  are  acknowledged  by

vouchers.  It was the case of the respondent-plaintiff that,

time  was  not  the  essence  of  the  contract,  and  citing

financial problems, the Sale Deed was not executed.  It is

alleged that deceased Chaitanyabhai Patel has given trust

and belief that he will execute the Sale Deed.  However,

recently when the respondent-plaintiff had visited the suit

schedule property on 25.05.2017 he has come to know that the

said property was sold to third party in view of increase in

prices.  It is alleged in the plaint that the appellant-

defendants have expressed that they will not execute the

Sale Deed.  Hence, the suit is filed.

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4. In the aforesaid suit, the appellant-defendants have

filed application under Order VII Rule 11(d) of the Code of

Civil Procedure (CPC) to reject the plaint on the ground

that suit is barred by limitation. The said application was

contested by the respondent herein.  However, trial court,

by  order  dated  27.12.2017,  allowed  the  application  and

ordered to reject the plaint.

5. As  against  the  same,  respondent-plaintiff  preferred

Regular First Appeal No.160 of 2018 before the High Court of

Gujarat at Ahmedabad.  By the judgment and decree dated

10.07.2018, the High Court has allowed the appeal filed by

the respondent by setting aside the order of the trial court

dated 27.12.2017.  As against the same, these civil appeals

are filed.

6. We  have  heard  Sri  Anshin  H.  Desai,  learned  senior

counsel for the appellants and Sh. Dushyant Dave, learned

senior counsel for the respondent-plaintiff.

7. In  these  appeals,  it  is  contended  by  Sri  Desai,

learned senior counsel appearing for the appellants that the

alleged Agreement to Sell is dated 13.03.1992 and the suit

is filed in the year 2017, i.e., after a period of 25 years

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and even according to the case of the respondent-plaintiff

there is no communication at all in between the period from

1992 to 2017.  It is submitted that except stating that he

had visited the site on 25.05.2017 on which date he has come

to know the said plot is sold to third parties, there is

nothing  on  record  to  show  that  the  suit  is  within

limitation.  Referring to Article 54 of the Limitation Act,

1963 it is contended by learned counsel that even in absence

of prescribing time for executing the Sale Deed, the period

of three years is to be computed from the date of refusal.

It is submitted that by waiting for a period of 25 years and

by merely stating that he had visited the site on 25.05.2017

on which date, the appellants have refused to execute the

Sale Deed, such a suit is filed.  It is submitted that the

suit filed is frivolous, vexatious and ex-facie barred by

limitation.  It is contended that even in absence of fixing

any period for executing the Sale Deed, it is not open to

respondent-plaintiff  to  file  the  suit  after  25  years  of

alleged Sale Deed / Agreement to Sell.  It is further stated

that the so-called Agreement to Sell is unregistered one,

not  supported  by  any  payments  through  cheque.   Vaguely

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stating that entire amount of consideration is paid, by way

of cash during the period from 15.01.1990 to 05.09.1991, the

said suit is filed.  It is contended by learned counsel that

a well reasoned order passed by the trial court is set aside

by the High Court without recording any justifiable reasons.

In support of his case for rejection of plaint under O.VII

R.11, learned counsel has placed reliance on judgment of

this  Court  in  the  case  of  Prabhakar  v.  Joint  Director,

Sericulture  Department  &  Anr.1;  T.  Arivandandam  v.  T.V.

Satyapal & Anr.2; Hardesh Ores (P) Ltd. v. Hede & Co.3;

Dilboo (Smt.) (Dead) by LRs & Ors. v. Dhanraji (Smt.) (Dead)

& Ors.4; I.T.C. Limited v. Debts Recovery Appellate Tribunal

& Ors.5; Raj Narain Sarin (Dead) through LRs. & Ors. V.

Laxmi  Devi  &  Ors.6;  N.V.  Srinivasa  Murthy  &  Ors.  v.

Mariyamma (Dead) by Proposed LRs. & Ors.7; Madanuri Sri Rama

Chandra Murthy v. Syed Jalal8 and in the case of Church of

Christ Charitable Trust & Educational Charitable Society v.

Ponniamman Educational Trust9.

1 (2015) 15 SCC 1 2 (1977) 4 SCC 467 3 (2007) 5 SCC 614 4 (2000) 7 SCC 702 5 (1998) 2 SCC 70 6 (2002) 10 SCC 501 7 (2005) 5 SCC 548  8 (2017) 13 SCC 174 9 (2012) 8 SCC 706

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8. On  the  other  hand  Sh.  Dushant  Dave,  learned  senior

counsel appearing for the respondent has submitted that the

appellant-defendants sought rejection of the plaint under

O.VII R.11(d) of the CPC only on the ground that suit is

barred by limitation.  It is the contention by the learned

counsel that undisputedly time was not the essence of the

contract, in which event as per Article 54 of the Limitation

Act 1963, the period of limitation is three years from the

date of refusal.  It is submitted that the limitation being

a mixed question of fact and law, whether the suit is filed

within a period of three years from the date of refusal, is

a triable issue, which can be adjudicated only after trial

but same is no ground for rejection of the plaint at this

stage.  It is submitted that for the purpose of considering

the application under O.VII R.11(d), plain averments in the

plaint are to be seen and no other ground can be a ground

for rejection of the plaint, under O.VII R.11(d).  It is

submitted that whether, from the averments in the plaint in

a given case, plaint is to be rejected or not under O.VII

R.11, is to be considered with reference to facts of each

case and from the case on hand, it cannot be said that suit

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is barred by limitation, only by looking at the averments in

the plaint.  Learned counsel has contended that all the

citations  by  learned  counsel  for  the  appellants  are  not

applicable to the facts of the case on hand and, in support

of  his  arguments,  reliance  is  placed  in  the  case  of

Gunwantbhai  Mulchand  Shah  &  Ors.  v.  Anton  Elis  Farel  &

Ors.10; Rathnavathi & Anr. v. Kavita Ganashamdas11; Madina

Begum  &  Anr.  v.  Shiv  Murti  Prasad  Pandey  &  Ors.12 and

Chhotanben  &  Anr.  v.  Kiritbhai  Jalkrushnabhai  Thakkar  &

Ors.13.

9. Having heard learned counsel on both sides, we have

perused the order passed by the trial court as well as the

High Court and other material placed on record.

10. The trial court has allowed the application filed by

the  appellant-defendants,  by  holding  a  finding  that

respondent-plaintiff,  by  clever  drafting,  has  created

illusion of cause of action and stated that cause of action

has arisen on 25.05.2017, but he failed to give justifiable

explanation  for  unreasonable  delay  in  filing  the  suit.

Trial court further held that when the plaintiff has not

10 (2006) 3 SCC 634 11 (2015) 5 SCC 223 12 (2016) 15 SCC 322 13 (2018) 6 SCC 422

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taken  any  action  for  25  years,  by  clever  drafting,  the

plaintiff  cannot  bring  an  action  within  the  period  of

limitation.  Therefore, it has held that suit being barred

by limitation,  attracts rejection  under O.VII  R.11(d) of

CPC.  The High Court has set aside the order of the trial

court  by  recording  a  finding  that  going  by  the  plain

averments in the suit, it cannot be stated that the same is

barred by limitation.

11. It is fairly well settled that, so far as the issue of

limitation is concerned, it is a mixed question of fact and

law.  It is true that limitation can be the ground for

rejection  of  plaint  in  exercise  of  powers  under  O.VII

R.11(d) of the CPC.  Equally, it is well settled that for

the purpose of deciding application filed under O.VII R.11

only averments stated in the plaint alone can be looked

into, merits and demerits of the matter and the allegations

by the parties cannot be gone into.  Article 54 of the

Limitation  Act,  1963  prescribes  the  limitation  of  three

years, for suits for specific performance.  The said Article

reads as under :

Suits  for  Specific Performance

3 years The  date  fixed  for  the performance,  or,  if  no

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such date is fixed, when the plaintiff has notice that  performance  is refused

12. From a reading of the aforesaid Article, it is clear

that when the date is fixed for performance, limitation is

three years from such date.  If no such date is fixed, the

period of three years is to be computed from the date when

the plaintiff, has notice of refusal.  When rejection of

plaint is sought in an application filed under O.VII R.11,

same  is  to  be  considered  from  the  facts  of  each  case,

looking at the averments made in the plaint, for the purpose

of adjudicating such application.  As averred in the plaint,

it is the case of the plaintiff that even after payment of

the entire consideration amount registration of the document

was not made and prolonged on some grounds and ultimately

when he had visited the site on 25.05.2017 he had come to

know  that  the  same  land  was  sold  to  third  parties  and

appellants have  refused performance  of contract.  In such

event, it is a matter for trial to record correctness or

otherwise of such allegation made in the plaint.  In the

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suits for specific performance falling in the second limb of

the Article, period of three years is to be counted from the

date when it had come to the notice of the plaintiff that

performance is refused by the defendants.  For the purpose

of cause of action and limitation when it is pleaded that

when he had visited the site on 25.05.2017 he had come to

know that the sale was made in favour of third parties and

the appellants have refused to execute the Sale Deed in

which event same is a case for adjudication after trial but

not a case for rejection of plaint under O.VII R.11(d) of

CPC.

13. Counsel for the appellants has placed reliance on the

judgment in the case of Prabhakar (supra). In the above said

case, this Court has held that, even where no limitation

period is prescribed by the Statute, courts apply doctrine

of  delay/laches/acquiescence  and  non-suit  litigants  who

approach  court  belatedly  without  justifiable  explanation.

Delay and laches are to be examined with reference to facts

of each case and the said judgment is not helpful to support

the case of the appellant inasmuch as this matter arises out

of an application filed under O.VII R.11(d) of the CPC.  The

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judgment in the case of T. Arivandandam (supra) pertains to

eviction from tenanted premises which was contested by the

tenant.  In the said case where rejection of plaint under

O.VII R.11(d) was considered on the ground that plaint does

not disclose cause of action but not a case for rejection of

plaint on the ground of limitation.  In the case of Hardesh

Ores (supra) it was the case falling in the first limb of

Article 54 of the Limitation Act 1963 but not a case falling

under second limb, where the time is not the essence of the

contract.  In the judgment in the case of  Dilboo (Dead)

(supra) this  Court has  considered relevant  principles of

applicability of O.VII R.11 of CPC.  Equally, the case of

I.T.C. Limited  (supra) is a case concerning rejection of

plaint under O.VII R.11(a) but not case of rejection on the

ground  of  limitation.   In  the  case  of  Raj  Narain  Sarin

(supra) the suit was filed after 40 years after execution of

the Sale Deed and as a fact it was found that Sale Deed was

to the knowledge of the plaintiff and he had not taken any

steps to  declare the Sale Deed invalid.  In that context,

the order passed under O.VII R.11 was confirmed by this

Court.  In the case of N.V. Srinivasa (supra) the suit is

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for declaration but not for specific performance and in the

said suit having regard to the facts of the case this Court

has held that suit for declaration filed by the plaintiff is

not maintainable.  In the case of Madanuri Rama (supra) the

suit was filed seeking cancellation of Sale Deed on the

ground that property in question is a waqf property which

cannot be sold to a private party.  The aforesaid case is a

case  not  concerning  limitation  under  Article  54  of  the

Limitation Act 1963.

14. On the other hand, judgment in the case  Gunwantbhai

(supra) this Court has held as under :

“8. We may straightaway say that the manner in which the question of limitation has been dealt with by the courts below is highly unsatisfactory. It was rightly noticed that the suit was governed by Article 54 of the Limitation Act, 1963.  Then, the enquiry should have been, first, whether any time was fixed for performance in the agreement for sale, and if it was so fixed, to hold that a suit  filed  beyond  thre  years  of  the  date  was barred by limitation unless any case of extension was pleaded and established.  But in a case where no time for performance was fixed, the court had to find the date on which the plaintiff had notice that the performance was refused and on finding that  date,  to  see  whether  the  suit  was  filed within three years thereof.  We have explained the position in the recent decision in R.K. Parvtharaj Gupta v. K.C. Jayadeva Reddy (2002) 2 SCC 428.  In the case on hand, there is no dispute that no date for performance is fixed in the agreement and if

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so,  the  suit  could  be  held  to  be  barred  by limitation only on a finding that the plaintiffs had  notice  that  the  defendants  were  refusing performance of the agreement.  In a case of that nature normally, the question of limitation could be  decided  only  after  taking  evidence  and recording a finding as to the date on which the plaintiff had such notice.  We are not unmindful of the fact that a statement appears to have been filed on behalf of the plaintiffs that they did not want to lead any evidence. The defendants, of course, took the stand that they also did not want to lead any evidence.  As we see it, the trial court should have insisted on the parties leading evidence on this question or the court ought to have postponed the consideration of the issue of limitation along with the other issues arising in the suit, after a trial.”

In the aforesaid case, it is clearly held that in cases

falling in second limb of Article 54 finding can be recorded

only after recording evidence.  The said view expressed by

this Court supports the case of the respondent-plaintiff.

In  the  judgment  in  the  case  of  Rathnavathi (supra)  in

paragraphs 42 and 43 it was clearly held that when the time

is not fixed in the agreement, the limitation of three years

to file a suit for specific performance would begin when the

plaintiff  has  noticed  that  defendant  has  refused  the

performance of the agreement.  In the judgment in the case

of  Ahmadsahab  Abdul  Mulla(2)(Dead)  by  Proposed  LRs.  v.

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Bibijan  &  Ors.14 while  interpreting  Article  54  of  the

Limitation Act, it is held that words “date fixed for the

performance”  is  a  crystallised  notion.   The  second  part

“time from which period begins to run” refers to a case

where  no  such  date  is  fixed.   In  the  case  of  Balsaria

Construction (P) Ltd. v. Hanuman Seva Trust & Ors.15 and

Chhotanben  (supra) this Court clearly held that issue of

limitation, being a mixed question of fact and law, is to be

decided only after evidence is adduced.

15. By applying the aforesaid principles in the judgments

relied  on  by  Sri  Dushyant  Dave,  learned  senior  counsel

appearing for the respondent, we are of the considered view

that merits and demerits of the matter cannot be gone into

at this stage, while deciding an application filed under

O.VII R.11 of the CPC.  It is fairly well settled that at

this stage only averments in the plaint are to be looked

into and from a reading of the averments in the plaint in

the case on hand, it cannot be said that suit is barred by

limitation.  The issue as to when the plaintiff had noticed

refusal, is an issue which can be adjudicated after trial.

14 (2009) 5 SCC 462 15 (2006) 5 SCC 658

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Even assuming that there is inordinate delay and laches on

the  part  of  the  plaintiff,  same  cannot  be  a  ground  for

rejection of plaint under O.VII R.11(d) of CPC.

16. For  the  aforesaid  reasons,  we  do  not  find  any

illegality  in  the  judgment  of  the  High  Court,  so  as  to

interfere  with  the  same  in  these  appeals.   Accordingly,

these appeals are dismissed, being devoid of merit, with no

order as to costs.  We make it clear that we have not

expressed any opinion on the merits of the matter, including

on the issue of limitation.  It is open for the trial court

to  frame  issues,  including  the  issue  of  limitation,  and

decide  the  matter  on  its  own  merits.   As  the  alleged

agreement is of the year 1992, trial court to dispose of the

suit, as expeditiously, as possible.

.................... J. [Uday Umesh Lalit]

.................... J. [R. Subhash Reddy]

New Delhi December 14, 2018

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