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BOMBAY HIGH COURT - BENCH AT GOA
C. V. BHADANG, J
Diana Buildwell Private Limited – Appellant
Versus
M/s. Sterling Holiday Resorts (India) Ltd. – Respondent
CIVIL REVISION APPLICATION No. 39 OF 2015 | CIVIL REVISION APPLICATION No. 44 OF 2015 | CIVIL REVISION APPLICATION No. 1 OF 2016



Advocates:
For the Appellants/Petitioners: Mr. Nitin Sardessai, Rohit Bras De Sa, Mr. J. E. Coelho Pereira, Vinod Korgaonkar, Mr. U. R. Timble, Ms. Yadika Mandrekar, Ms. Gauri Govekar
For the Respondents: Mr. Shivan Desai, Mr. S. G. Desai, Nitin Sardessai

A plaint cannot be rejected without determining its cause of action, especially where the statute of limitations involves mixed questions of law and fact.

Headnote:(A) Code of Civil Procedure, 1908 - Section 115 - Court’s power in revision - Revision applications challenging a trial court’s dismissal of plaint rejection applications on grounds of cause of action and limitation - The petitioners argued that the unpaid consideration does not constitute a charge on property and thus is barred by limitation. The trial court found that the plaint disclosed cause of action and the issue of limitation required trial-based resolution. (Paras 1-30)

(B) Cause of Action - The first respondent claimed a statutory charge for unpaid purchase price, asserting compliance with contractual obligations under a sale-deed. The appellants contended it was an independent covenant not related to the sale price. The Court affirmed that pleadings must be read to ascertain intention in the context of the contract. (Paras 19-30)

Table of Content
1. challenge to dismissal of plaint based on jurisdiction issues. (Para 1)
2. claim of unpaid price under a sale-deed. (Para 2 , 4)
3. common order appeal against trial court for dismissal of plaints. (Para 3)
4. claim about unpaid consideration related to statutory charge. (Para 5 , 6)
5. arguments over limitations and contractual obligations. (Para 8 , 9 , 12 , 18)
6. holistic interpretation of agreements to ascertain cause of action. (Para 20)
7. affirmation of trial court's decision on cause of action. (Para 24)

JUDGMENT :

1. The challenge in these civil revision applications, under S. 115 of the Code of Civil Procedure, 1908 (for short “CPC”) is to the common order dated 14th October, 2015 passed by the learned Civil Judge, S. D. Mapusa in Special Civil Suit No. 11 of 2015 / B. By the impugned order, three separate applications filed one each by defendant No. 1 (Exhibit D-11); defendant No. 3 (Exhibit D-24); and defendant No. 5 (Exhibit D-26), for rejection of plaint under Order VII, Rule 11(a) and (d) of CPC have been dismissed. In such circumstances, the civil revision applications are being disposed of by this common judgment.

2. The brief facts necessary for the disposal of the revision applications may be stated thus:

. That the first respondent M/s. Sterling Holiday Resorts (India) Ltd. (plaintiff) has filed the aforesaid suit, against the applicants for recovery of money and other reliefs. The case made out in the plaint is that the first respondent has sold the suit property, more specifically described in plaint para 1 to Diana Buildwell Pvt. Ltd. (defendant No. 1) under registered sale-deed dated 11.5.2007 for a total consideration of Rs.55,11,00,000/- which was to be paid in the manner, as stipulated in the sale-deed. Indisputably, on the date of execution of the sale-deed, an amount of Rs. 49,11,00,000/- has been paid to the first respondent, which according to the first respondent was towards payment of part consideration. According to the first respondent, the balance consideration of Rs. 6,00,00,000/- was to be paid by the defendant No. 1 on the plaintiffs obtaining renewal of the construction license from the village Panchayat Anjuna on or before 12th December, 2007. The first respondent has obtained the renewal of construction license on 17.7.2007 and has complied with the obligation, under Clause 9 of the said sale-deed, as a result of which the consideration of Rs. 6 crores has become payable. In short, according to the first respondent, in spite of the first respondent complying with the stipulation, the first defendant has failed to pay the amount of Rs. 6 crores.

3. It may be mentioned that Sterling Woodhouse Hotels and Resorts India Pvt. Ltd. (defendant No. 5) has obtained rights to operate a hotel in the said property from the defendant No. 1 for a period of twenty years, under an agreement dated 18.8.2011. The original defendant Nos. 2, 3 and 4 are respectively the Yes Bank Ltd., Saraswat Co-operative Bank Ltd., and Vijaya Bank, have granted financial assistance to the defendant No. 1 for purchase of the property.

4. The first respondent in the suit has inter alia prayed for a decree in the sum of Rs. 21,14,25,548/- including interest till 19th February, 2015 along with future interest and for declaration of a valid and subsisting charge on the suit property. The first respondent has also sought a declaration that any charge / or mortgage on the suit property created in favour of the original defendant Nos. 2 to 5 is subject to the prior charge of the unpaid price, created in favour of the first respondent.

5. The defendants have filed separate applications for rejection of the plaint under Order VII, Rule 11 (a) and (d) of CPC as aforesaid on the ground that the plaint does not disclose any cause of action and the suit is barred by limitation.

6. The applications were opposed by the first respondent. It is contended that there is a statutory charge of the unpaid purchase price in favour of th

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