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2016 Supreme(Cal) 568

IN THE HIGH COURT OF CALCUTTA
HARISH TANDON, J.
HAPPY MASSCOMM PVT. LTD. & ANR. - Petitioners
Versus
ATCO MANAGEMENT PVT. LTD. & ORS. - Respondents
C.O. 3888 of 2016
Decided On : 24-11-2016

Advocates Appeared:
For the Petitioners: Mr. Surajit Nath Mitra, Sr. Adv., Mr. Raja Basu Chowdhury, Mr. Kallol Saha, Mr. Tanmoy Chakraborty, Mr. Ujjwal Pramanik.
For the ATCO & FORT :Mr. Jayanta Kumar Mitra, Ld. Advocate General, Mr. Jishnu Chowdhury, Mr. Rajiv Lall.
For the Opposite Parties : Mr. Rajdeep Biswas, Mr. Phiroze Edulji, Ms. Alotriya Mukherjee.

A suit for specific performance of a contract must be filed within three years from the date fixed for performance or if no such date is fixed when the plaintiff has notice that the performance is refused.

Headnote:

LIMITATION ACT - ORDER 7 RULE 11(D) - ARTICLE 54 - SPECIFIC PERFORMANCE OF CONTRACT - SUIT FOR SPECIFIC PERFORMANCE OF A CONTRACT MUST BE FILED WITHIN THREE YEARS FROM THE DATE FIXED FOR PERFORMANCE OR IF NO SUCH DATE IS FIXED WHEN THE PLAINTIFF HAS NOTICE THAT THE PERFORMANCE IS REFUSED.

Fact of the Case:

The plaintiffs filed a suit for specific performance of a Memorandum of Understanding (MOU) dated 8th April, 2002, entered into between them and the defendants for the development of a property. The defendants filed an application under Order 7 Rule 11(d) of the Code of Civil Procedure, seeking rejection of the plaint on the ground that it was barred by limitation.

Finding of the Court:

The court held that the suit was barred by limitation under Article 54 of the Limitation Act, as the plaintiffs had knowledge of the defendants' refusal to perform the obligations under the MOU on 14th September, 2010, when they wrote a letter to the Kolkata Municipal Corporation informing them of the same. The court further held that the suit, which was filed on 11th August, 2015, was beyond the three-year limitation period prescribed under Article 54.

Issues: 1. Whether the suit was barred by limitation under Article 54 of the Limitation Act? 2. Whether the plaintiffs had knowledge of the defendants' refusal to perform the obligations under the MOU on 14th September, 2010?

Ratio Decidendi: 1. A suit for specific performance of a contract must be filed within three years from the date fixed for performance or if no such date is fixed when the plaintiff has notice that the performance is refused. 2. The word 'notice' means intimation, information, cognizance or observance and imbibe within itself the knowledge coming from direct perception or interference reasonably arising out of several facts and circumstances. 3. The right to sue fructifies the moment the owners acted in violation of the terms and conditions embodied in the M.O.U and the suit ought to have been filed within three years therefrom.

Final Decision: The court allowed the defendants' application and rejected the plaint as barred by limitation.

JUDGMENT :

1. The challenge is made to order dated 28th August, 2016 passed by the learned Civil Judge (Senior Division), 2nd Court, Alipore in Title Suit No. 55 of 2015 by which an application under Order 7 Rule 11 of the Code of Civil Procedure is rejected.

2. Before proceeding to decide the case on factual matrix, the law on the subject is required to be recapitulated.

3. Order 7 Rule 11(d) of the Code of Civil Procedure permits the Court to reject the plaint provided it is barred by law. The law is somewhat settled that if the suit is expressly barred by limitation, the plaint can be rejected under Order 7 Rule 11(d) of the Code. It is equally settled that the plea of limitation is a mixed question of fact and law. It would not be wrong to say that if the limitation is to be culled out from the meaningful reading of the plaint and the documents annexed thereto without taking aid and help of the other materials it can be brought within the ambit of "“barred by law”. In a case where the suit cannot be dismissed on the anvil of limitation without proper appreciation of the facts, pleadings, framing of issue and the evidence to be taken thereon, it cannot be held to be barred by time.

4. In Balasaria Construction Pvt. Ltd. Vs. Hanuman Seva Trust & Ors. reported in (2006) 5 SCC 658 the Apex Court succinctly laid down the principles when the plaint can be dismissed on the ground of limitation under Order 7 Rule 11(d) of the Code. For proper appreciation of the facts and the arguments advanced at the Bar it would be profitable to quote paragraph 4 of the said report wherein the various judgments of the Supreme Court and of the different High Courts were noticed and the principles on the above proposition has been lucidly laid down as under :-

“4. This case was argued at length on 30-8-2005. Counsel appearing for the appellant had relied upon a judgment of this Court in N.V. Srinivasa Murthy v. Mariyamma for the proposition that a plaint could be rejected if the suit is ex facie barred by limitation. As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. State Bank of India Staff Assn. in respect of the proposition that Order 7 Rule 11(d) was not applicable in a case where a question has to be decided on the basis of fact that the suit was barred by limitation. The point as to whether the words “barred by law” occurring in Order 7 Rule 11(d) CPC would include the suit being “barred by limitation” was not specifically dealt with in either of these two judgments, cited above. But this point has been specifically dealt with by the different High Courts in Mohan Lal Sukhadia University v. Priya Soloman, Khaja Quthubullah v. Govt. of A.P., Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana, Arjan Singh v. Union of India wherein it has been held that the plaint under Order 7 Rule 11(d) cannot be rejected on the ground that it is barred by limitation. According to these judgments the suit has to be barred by a provision of law to come within the meaning of Order 7 Rule 11 CPC. A contrary view has been taken in Jugolinija Rajia Jugoslavija v. Fab Leathers Ltd., National Insurance Co. Ltd. v. Navrom Constantza, J. Patel & Co. v. National Federation of Industrial Coop. Ltd. and State Bank of India Staff Assn. v. Popat & Kotecha Property. The last judgment was the subject-matter of challenge in Popat and Kotecha Property v. State Bank of India Staff Assn. This Court set aside the judgment and held in para 25 as under: (SCC p. 517)

“25. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo case the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the non-execution of lease deed was the basic issue. Even if it is accepted that






























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