IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BIREN VAISHNAV, NISHA M. THAKORE, JJ.
Mohmmadfaruq Abdulhamid Shaikh & Anr. - Appellants
Versus
Aegue Steel Manufacturing Pvt. Ltd. & Ors. - Defendants
R/First Appeal No. 2208 of 2024
Decided On : 14-06-2024
Civil Procedure - Code of Civil Procedure, 1908 - Sections 96, Order VII Rule 11 - The court discussed the rejection of plaint under Order VII Rule 11 for lack of cause of action and limitation, emphasizing the necessity of a written agreement for specific performance and the implications of the Limitation Act.
Fact of the Case:
The plaintiffs sought specific performance of a Memorandum of Understanding (MoU) for land purchase, claiming readiness to perform obligations. The defendants allegedly failed to execute the sale deed, leading to the plaintiffs filing a suit after the MoU was claimed to be cancelled.
Finding of the Court:
The court found that the MoU had effectively been cancelled due to the parties' actions and that the suit was barred by limitation, as it was filed after the three-year period prescribed for specific performance claims.
Issues: Whether the plaint disclosed a cause of action for specific performance and whether the suit was barred by limitation.
Ratio Decidendi: The court held that a valid cause of action must be established for specific performance, and the suit was barred by limitation as it was filed beyond the prescribed period.
Result: The appeal was dismissed, affirming the lower court's rejection of the plaint.
JUDGMENT :
Nisha M. Thakore, J.
1. The present appeal is filed by the original plaintiffs-appellants herein under Section 96 of the Code of Civil Procedure, 1908 (for short, “the Code”), being aggrieved and dissatisfied with the order dated 02.04.2024 passed by learned Chamber Judge & Additional City Civil Judge, Ahmedabad below Exh.1 under Order VII Rule 11 (a) and (d) of the Code. By the said order, the learned Civil Judge has suo moto taken cognizance of the maintainability of the suit and after conducting preliminary hearing, has rejected the plaint.
2. The facts, in nutshell, are reproduced hereunder:
2.1 The original plaintiffs have approached the court of learned Additional City Civil Judge by seeking prayer for specific performance and Memorandum of Understanding (hereinafter to be referred as “MoU”) dated 16.11.2019 executed between the parties in respect of land being sub-plot no.4 and 4(a) admeasuring 5296 sq. mtr. i.e. 6335 sq. yards of revenue survey no.142 of Mouje-Maninagar, Taluka-Rajpur Hirpur, District-Ahmedabad being part of final plot no.25 admeasuring 22762 sq. mtrs of T.P. Scheme No.9.
2.1(a) The original plaintiffs have sought for direction against the defendants for execution of registered sale deed in respect of aforesaid suit land by remarking the aforesaid part of land by obtaining title clearance certificate and by accepting the sale consideration as agreed between the original plaintiffs and defendants in terms of the MoU.
2.1(b) The original plaintiffs have also sought for further directions against the defendants in case, if the defendants failed to execute the sale deed, the Court Commissioner be appointed for execution of the registered sale deed in favour of the original plaintiffs.
2.1(c) Apart from the aforesaid directions, the original plaintiffs have also sought for permanent injunction against the defendants as well as against any person, servant, agent, power of attorney holder etc. by restraining them from executing any sale transaction or by way of transfer or assign in any manner the suit property as well as to restrain from entering into any type of agreements or documents or any type of transactions in respect of the suit property.
2.2 The aforesaid suit was presented before the City Civil Court, Ahmedabad on 06.03.2024, which came to be registered as Civil Suit No.240 of 2024. Along with the plaint of the aforesaid suit, the original plaintiffs have also produced list of the documents; however, for the reasons best known, no application seeking interim injunction was presented along with the plaint.
3. In order to appreciate the controversy involved, it would be appropriate to reproduce in nutshell the facts as pleaded by the original plaintiffs in the plaint.
3.1 The defendant no.1 is a registered company having its registered office at Ahmedabad. Defendant nos.2 and 3 are the Directors of the defendant no.1-company. It is the case of the plaintiffs that they had agreed to purchase the suit land for consideration of total amount of Rs.12,67,00,000/-. According to the plaintiffs, the parties have mutually agreed to fix the value of the suit property as Rs.20,000/- per sq. yard. An amount of Rs.21 Lakhs is claimed to have been paid by the plaintiffs to the defendants as token payment. Subsequently, the aforesaid agreement was reduced in form of MoU, which was executed between the parties on 16.11.2019. The said document was notarized, which was entered in the book of Notary-Girish S. Parmar vide entry no.74/2019. The said document was signed by the defendant nos.2 and 3 as the authorize signatory of defendant no.1-company.
3.2 According to the plaintiffs, the main conditions as mutually agreed between the parties, were reduced in writing in the form of MoU.
3.3 The public notice was immediately issued by the plaintiffs on 18.11.2019 inviting objections against the issuance of title clearance certificate. The plaintiffs had contended that expenses were incurred for not only publishing the afores
Eldeco Housing And Industries Limited vs Ashok Vidyarthi and Ors.
Dahiben Vs. Arvindbhai Kalyanji Bhanusali (Gajra)(D) Thr Lrs & Ors
A suit for specific performance requires a valid written agreement, and claims must be filed within the limitation period; failure to meet these conditions results in dismissal.
Suit for specific performance filed after dismissal of suit for injunction is barred under Order II Rule 2 CPC and deserves to be rejected.
The court determined that a suit for specific performance may not be dismissed under Order VII, Rule 11 if a valid cause of action is pleaded, allowing the case to proceed to trial.
The court reaffirmed that suits for specific performance must be filed within the limitation period, and failure to do so results in dismissal.
The court ruled that a civil suit for specific performance must be filed within three years from the refusal to perform, reinforcing that delay and lack of sufficient pleading detail bar such claims.
The limitation for specific performance suits begins upon notice of refusal to perform, and the plaint must be assessed as a whole to determine if it discloses a valid cause of action.
The court upheld the trial court's rejection of the plaint as time-barred, emphasizing the necessity of timely enforcement of agreements and the court's duty to examine plaints for cause of action.
(1) Rejection of plaint – Rejection of earlier suit under Order VII Rule 11 of CPC does not bar fresh suit on same cause of action provided right of action is not barred by law of limitation.(2) Reje....
A unilateral cancellation of a registered agreement of sale is invalid; the cause of action based on subsequent knowledge and payments keeps the suit within limitation.
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