2014 Supreme(Raj) 1516

RAJASTHAN HIGH COURT
Arun Bhansali, J.
State of Rajasthan - Appellant
Versus
M/s. Jeewan & Sons, Sirohi - Respondent
S.B. Civil First Appeal No. 171 of 1990.
Decided On : 30-05-2014

Headnote:

SPECIFIC PERFORMANCE - LIMITATION - SUIT FOR SPECIFIC PERFORMANCE OF CONTRACT - LIMITATION PERIOD - COMMENCEMENT - TERMINATION OF AGREEMENT - REFUSAL OF PERFORMANCE - NOTICE - ISSUANCE OF NOTICE BY COUNSEL AFTER PASSAGE OF 26 YEARS FROM THE DATE OF TERMINATION OF THE AGREEMENT - CANNOT RESURRECT A CAUSE, WHICH ALREADY STOOD BARRED BY LIMITATION.

Fact of the Case:

The plaintiff filed a suit against the appellant and respondents Nos. 2 to 6, inter alia, with the averments that the plaintiff entered into an agreement with the Erstwhile State of Sirohi on 11.08.1944; the agreement stipulated for grant of licence of land ad-measuring 75 Bigha for 30 years; the plaintiff was entitled to exploit mineral, construct factory for manufacturing glass, office building and staff quarters, no rent was chargeable, however, the plaintiff would pay royalty on the mineral excavated, if the licence was terminated by the State before the stipulated period, the land leased for factory, building etc. would revert to the State and if State desires, it may purchase the factory, buildings, super structures and machinery on a fair valuation to be mutually settled and agreed amount, in case the State did not want to purchase, the licence would be at liberty to remove the plant and machinery and super structures or to sell it to anybody else, who is bona fide resident of State; plaintiff was at liberty to purchase the land from the State, on which, the buildings were standing not exceeding 75 Bigha Rs. 150/- per bigha; in the year 1949 the administration of the former Sirohi State was taken over by the Government of India vide Sirohi Merger Agreement dated 08.11.1948 and the Government of Bombay took over the administration on behalf of the Central Government; the Government of Bombay vide its letter dated 17.09.1955 terminated the licence for excavation of minerals and directed the plaintiff to apply for fresh licence under the Mineral Concession Rules and as regard sale of 75 Bigha land, it was stated that the request may be considered on payment of value of the land under the relevant Rules; the State Reorganisation Act, 1956 was promulgated and territories of Abu and Abu Road came to be transferred to the State of Rajasthan; the Collector, Sirohi was ordered to take the possession of the land in question from the plaintiff as the lease had been terminated by the State of Bombay, treating the plaintiff as trespasser; the plaintiff moved to the State of Rajasthan for purchase of land as per conditions of the agreement; the State passed a order restraining the Collector, Sirohi from taking possession of the land from the plaintiff, which order was later on cancelled; the land in question was leased by the Collector, Sirohi for industrial development and was handed over to the Rajasthan Industrial Investment and Development Corporation Limited ('RIICO'), who further allotted the land to defendant Nos. 2 to 5; the State of Rajasthan kept silence over the application made by plaintiff and did not take any step to sell the land in question to the plaintiff and, therefore, the suit for specific performance of the contract as per the agreement was filed seeking possession of the land in question from defendant Nos. 2 to 5 and seeking prohibitory injunction against the appellant claiming that the plaintiff was in possession of a portion of the land in question.

Finding of the Court:

The trial court decreed the suit for a sum of Rs. 11,95,500/- along-with interest @ 6% per annum from the date of judgment, as noticed above.

Issues: 1. Whether the suit filed by the plaintiff is maintainable? 2. Whether the agreement was entered into by Narayan Jeewan and Trikam Lal Jeewan as proprietors of the firm M/s. Jeewan and Sons? 3. Whether the licence of the factory was cancelled by letter Exhibit-A/1? 4. Whether the plaintiff is entitled to specific performance of Clause-6 of Chapter-VI? 5. Whether the suit is ex facie barred by limitation? 6. Whether the court fees paid is insufficient? 7. Whether the State is entitled to special costs under Section 35A CPC? 8. Whether for lack of prior notice to RIICO, the suit is not maintainable? 9. Whether the Civil Court has jurisdiction to try the suit? 10. Whether the allotments by RIICO took place during pendency of the suit, therefore, in view of provisions of Section 52 of the Transfer of Property Act, 1882 it cannot be said that the necessary parties were not impleaded?

Ratio Decidendi: 1. The agreement dated 11.08.1944 was entered into by Narayan Jeewan and Trikam Lal Jeewan as proprietors of the firm M/s. Jeewan & Sons and, as such, the partnership firm had locus standi to file the suit. 2. By letter Exhibit-A/1, the agreement Exhibit-2 stood terminated by the Government of Bombay and when by the same letter instead of accepting the plaintiff's plea regarding purchase of the land Rs. 150/- per bigha indicated that the Government would not be bound by the clause regarding sale of land in question, but the plaintiff's request for grant of land would be considered under the normal Rules on payment of the value of land under the relevant Rules, the same clearly amount to refusal of performance by the State of Bombay, the then authority dealing with the subject matter of the suit and, as such, the cause of action seeking specific performance started to run with the receipt of letter dated 17.09.1955. 3. The suit filed by the plaintiff is ex facie barred by limitation.

Final Decision: Appeal Allowed. The judgment and decree dated 29.08.1990 passed by the trial court is set aside and the suit filed by the plaintiff is dismissed.No costs.