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BOMBAY HIGH COURT
A.B. Chaudhari, J.
C. Padmawati Naidu and Ors. —Appellants
versus
Friends Co-operative Housing Society Ltd. and Ors. —Respondents
Second Appeal No.235 of 2012
Decided on 3/4.3.2016
For the Appellants:Mr. V.V. Bhangde, Advocate
For the Respondent No.1:Mr. K.H. Deshpande Sr. Advocate with Mr. S.M. Patrikar and Akshay Sudame, Advocates
For the Respondent No.3: Mrs. Geeta Tiwari AGP
Headnote:(a) Limitation Act, 1963 – Article 54 – Once limitation begins to run, it does not stop irrespective of the intervention of the statutory law or otherwise – Instantly, limitation starts from the date of cancellation of agreement – Coming into force of Ceiling law is of no consequence – The limitation will stop only on filing the suit – Making of application u/s. 20 jointly by the parties to the suit being under consideration of the Government would not make the refusal or cancellation nugatory or null and void and would not stop or arrest limitation – Pliantiff having clear notice of refusal of performance by defendant on 12.07.1992 – Suit oughtb to be filed on 11.7.1985 or, at the most on 02.08.1985 subject to the Ceiling Act – Suit filed on 30.12.1985 – Barred by limitation and not maintainable. (Para 16)
1993 Supp (4) SCC 492; (1999) 8 SCC 587; (2010) 14 SCC 596 – Relied upon
(b) Limitation Act, 1963 – Article 54 r/w section 5, Contract Act – Plaintiff contending cancellation of agreement being unilateral and hence contrary to section 5 and hence suit not being barred by limitation – Nothing preventing the plaintiff from challenging alleged unilateral cancellation of agreement – Held, in absence of any such challenge, Article 54 gets attracted – Suit barred by limitation and not maintainable. (Para 17, 18)
(2013) SCC 27 – Relied upon
(c) Code of Civil Procedure, 1908 – Section 100 – Pure question of law – Can be raised at any stage. (Para 19)
(d) Necessary and proper parties – All the persons who are parties to the agreement should be added as party to the suit – Suit will fail in absence of impleadment of all the parties to the agreement. (Para 19)
(2010) 7 SCC 417; (2005) 6 SCC 733 – Relied upon
Result: Appeal allowed.
A.B. Chaudhari, J.—Being aggrieved by the judgment and decree dated 04.10.2011 in Civil Appeal No. 307/1999 passed by the learned District Judge-9, Nagpur, arising out of the judgment and decree dated 21.04.1999 in Special Civil Suit No. 564/1985 passed by 4th Joint Civil Judge, Senior Division, Nagpur, the present Second Appeal has been preferred by the original defendants.
2. The Appeal has been taken up for final hearing as almost all the appellants are senior citizens and the litigation commenced in the year 1985, on the motion made by the counsel for the parties.
3. The respondent no.1/plaintiff brought a suit for specific performance of contract and for possession, stating that an agreement was executed for the purchase of the suit property by the plaintiff on 30.1.1975 for a consideration of Rs. 25,000/per acre and on the date of agreement by way of earnest, an amount of Rs. 6,000/was paid. The sale deed was to be executed within a period of two years i.e. on or before 30.1.1977. The plaintiff was ready and willing to obtain the sale deed but, in the interregnum, with effect from 17.2.1976, the Urban Land Ceiling Regulation Act, 1976 was brought into force and the suit property was specified for residential use in the Master Plan and, as such, upon application of the Urban Land Ceiling Act, all transactions of transfer were prohibited, save and except the exemption to be obtained u/s. 20 of the Urban Land Ceiling Act. The exemption u/s 20 would be obtained by the landlord or the vendor and the prohibition operated as the legal impediment for completion of sale deed. The plaintiff had by letter dated 15.04.1976 intimated the defendant that the plaintiff was willing to complete the transfer as per the agreed terms, provided the land is released from the Ceiling Act. In fact, the Application for exemption was made by the defendant on 13.08.1976 and an additional Application on 05.02.1980 was also filed and a joint application was signed by both the plaintiff as well as the defendant, with reference to the agreement dated 30.1.1975. The plaintiff was ready and willing to perform his part of the contract pursuant to which both of them had jointly and individually applied for exemption. However on 12.7.1982, to the utter dismay and surprise of the plaintiff, the defendant informed that the agreement dated 30.1.1975 should be treated as a cancelled as the defendant did not hear anything from the plaintiff for a long time. The communication of cancellation was duly replied on 3.8.1982 informing the defendant that the plaintiff society was and is ready and willing to perform the part of the contract but for the fact that the proceedings for exemption were pending with the Government the sale deed could not be completed and hence defendant should not cancel the contract. It was also stated that there was no unilateral right reserved in favour of the defendant to cancel the agreement and, therefore, the action of cancellation was void ab initio. It is then contended in the suit that the pending application for exemption was ultimately decided by an order dated 31.12.1984 by which the State Government granted exemption, which clearly furthered the case of the plaintiff, about readiness and willingness and as per the terms and conditions of the exemption order, within a period of one year the transaction was to be completed. It was then stated in the plaint that the plaintiff was under a bona fide belief that it was not necessary to have permission under Bombay Tenancy and Agricultural Lands (Vidarbha) Region Act, since the suit was included in the Urban Agglomeration. Having realised that it was necessary, the plaintiff informed the defendant vide notice dated 4.3.1985 that a joint application was required to be filed under Section 89 of the BT & AL Act to the Sub-Divisional Officer. Finally, the SDO on 10.12.1985 granted permission u/s 89 of the BT AL Act. The plaintiff thereafter issued a notice on 9.8.1985 asking
