In the High Court of Bombay at Goa
F.M. REIS, U.V. BAKRE, JJ.
Far Pavilions Tours & Travels Private Limited through its Director, S.N. Gupta & Another
Versus
Manish Pratik & Another
First Appeals Nos. 53 of 2014 & 69 of 2014
Decided On: 11-12-2014
Counter Claim - Limitation Act - Section 10 - Summary
Fact of the Case:
The plaintiffs filed suits for eviction and recovery of arrears rent, alleging breach of covenants in the Lease Deed. The defendants filed counter claims seeking declaration that the plaintiffs held the property in trust for them and for a direction to execute a conveyance in favor of the defendants.
Finding of the Court:
The trial court rejected the counter claims, holding that they were time-barred. The appellate court allowed the appeal, quashed the rejection, and restored the counter claims to the trial court for a decision on the question of limitation.
Issues: The main issue was whether the counter claims were barred by limitation under Section 10 of the Limitation Act.
Ratio Decidendi: The court held that the trial court erred in rejecting the counter claims at the initial stage, as the question of limitation should be decided after framing the issues and leading evidence.
Final Decision: The appellate court allowed the appeal, quashed the rejection of the counter claims, and restored them to the trial court for a decision on the question of limitation.
U V. Bakre, J.
1. This common judgment shall dispose of both the appeals since they involve common facts and questions of law. By consent of the parties, the present appeals are taken up for final adjudication at the stage of admission itself.
2. Heard Mr. Dessai, learned Senior Counsel appearing on behalf of the appellants and Mr. Lawande, learned Counsel appearing on behalf of the respondent.
3. These appeals are directed against the order dated 17/12/2013 passed by the learned Civil Judge, Senior Division, Panaji (trial Court, for short) in Special Civil Suits No. 23/2010/B and 24/2010/B.
4. The appellants are the defendants whereas the respondent is the plaintiff in the said suits. Parties shall, hereinafter, be referred to as per their status in the said suits.
5. The plaintiffs have filed the said suits for eviction of the defendants from the suit property respectively described in each suit; for recovery of arrears rent, damages, etc. The plaintiffs claim to be the owners of the suit properties and that since each plaintiff was one of the then directors of defendant no. 1-Company, at the request of defendant no. 1, he had agreed that after acquisition of the suit property, the same would be leased out by him to the defendant no. 1, for five years. The plaintiffs further allege that accordingly, the suit property, in each case was leased to the defendant no. 1 vide registered Lease Deed dated 26/10/2004. Alleging breach of covenants contained in the Lease Deed on account of non-payment of rent and on account of subletting the suit property by the defendant no. 1 to the defendant no. 2, the plaintiffs filed the said suits.
6. The defendants filed their written statement thereby denying the case of the plaintiffs. The defendant no. 1 had filed a counter claim, in each suit, for declaration that the plaintiff holds the suit property in trust for defendant no. 1; for a direction to the plaintiff to execute a conveyance in respect of the suit property in favour of the defendant no. 1 and to do all acts, deeds and things that may be necessary to perfect the title of the defendant no. 1 in respect of the suit property; for permanent injunction and for recovery of money, being amount misappropriated by him for personal use.
7. The plaintiff, in each suit, filed an application under Order VII, Rule 11 of the Code of Civil Procedure (CPC) for rejection of the said counter claim filed by the defendant no. 1, on the ground that the same does not disclose cause of action; that the same is barred by law of limitation; and that the trial Court did not have territorial jurisdiction to entertain the same. The defendant no. 1 filed reply to the said application. Parties filed written arguments before the learned trial Court besides making oral submissions.
8. Learned Trial Court held that thought there was provision under Order 8 Rule 6C of CPC for exclusion of counter claim, however, the provision of Order VII Rule 11 was still applicable to the counter claim. The trial Court further held that Section 10 of the Limitation Act was not applicable to the plaintiff who was not a trustee and, therefore, the limitation cannot be said to be excluded by virtue of Section 10 of the Limitation Act. The trial Court held that the specific averment in the counter claim showed that the subject matter of the same pertained to the year 2004-2005 and that the criminal complaint, which was filed made it clear that the facts were to the knowledge of the defendant no. 1 prior to the filing of the counter claim, which had been filed in the year 2011 and, therefore, the counter claim was barred by Law of Limitation. Consequently, the counter claim filed by the defendant no. 1 came to be rejected, in both the suits. These orders are impugned in the present appeals.
9. Mr. Dessai, learned Senior Counsel for the defendants submitted that they had filed the counter claim, in terms of Section 10 of the Limitation Act under which there is exclusion of th
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