1.This Second Appeal was admitted on 24th September, 2009 on the following substantial question of law :
"Whether the counterclaim for specific performance of contract could be said to be barred by limitation?"
2. This Appeal is at the instance of original defendant no.1 challenging the judgment and order dated 17th July, 2008 passed by learned District Judge1 at Pandharakwada in Regular Civil Appeal No.77/2003 which was dismissed. The said appeal stems from judgment and decree passed on 3rd September, 2001 by learned Joint Civil Judge, Senior Division, Yavatmal in Special Civil Suit No. 95/1991.
3. The plaintiff had instituted the suit for possession, damages and costs of the suit on the ground that the plaintiff is the owner of the land bearing Gat No. 53 ( Old S.No. 34) admeasuring 4H 31R situated at village Khadaki, Taluqa: Maregaon, Dist. Yavatmal. The suit land was originally allotted in favour of one Shri Rajkumar Punyani, husband of the plaintiff some in 196768, by the Government. After death of Rajkumar Punyani, the plaintiff and her son (ori. Defendant no.2) became owner of the suit property and were cultivating as Class II occupants. The suit land could not be alienated or sold without prior permission of the Government. In 1995 first defendant's brother was assigned the work of summer season (unhalwai) on payment of charges but he took disadvantage and cultivated the suit land and inducted name of first defendant, who took forcible possession pleading that she has purchased under an agreement to sell and cultivated the land on that pretext. First defendant contended that there was an oral agreement to sell the suit land and price of suit was agreed at Rs. 49,000/; whereas Rs. 36,000/ was paid by way of an earnest money and possession of land was handed over to her, while she agreed to pay Rs. 13,000/ at the time of sale deed pursuant to agreement to sell dated 25.5.1992. Later on, it was agreed on 29.4.1994 to obtain permission of the Collector so as to execute the sale deed as plaintiff's husband was Class II occupant. The permission sought was, however, rejected.
4. The trial Court after dissecting the evidence led before it, found that the plaintiff and second defendant agreed to sell the suit field to first defendant and that she had paid earnest money in the sum of Rs. 36,000/ to the plaintiff and her son ( defendant no.2). The trial Court disbelieved the case of the first defendant that she was put in possession of the suit land pursuant to an agreement to sell. The trial Court also negatived the case of the first defendant for specific performance and alternate case for refund of Rs. 36,000/ and decreed suit of the plaintiff for possession of suit land and also directed inquiry into mesne profits. The trial Court rejected the counterclaim of first defendant.
5. The Appeal under section 96 of the Civil Procedure Code filed by first defendant being Regular Civil Appeal No. 77/2003 was also dismissed as lower Appellate Court recorded concurrent findings of facts.
6. I have heard submissions at the Bar from rival Advocates.
7. Mr. K S Narwade, learned Advocate for appellant ( Ori. first defendant ) submitted that the Second Appeal can be heard on the basis of substantial question of law stated in the memorandum of appeal although the Court may have failed to formulate it, once the Court is satisfied that the case involved substantial question of law. He relied upon single Judge Bench ruling reported in Bapu Khanu Dhangar & others vs. Gundu Santu Dhangar { Through LRs} : 2001 (3) Mh.L.J. 521. Learned Advocate, further, argued that the counter claim by the first defendant ought to have been allowed for specific performance of the agreement as the first defendant was put in possession of the suit property pursuant to an agreement to sell and it was for the vendor to obtain prior permission of the Collector to transfer the suit land to the first defendant. He further made reference to following rulings :
(i) Nathulal vs. Phoolchand: AIR 1970 SC 546
(ii) Rojasara Ramjibhai Dahyabhai vs. Jani Narottamdas {Through LRs }: AIR 1986 SC 1912;
(iii) M.A. Jabbar & another vs. Life Insurance Corporation Housing Building Employees Society: 2000 AIHC 2761 (AP). Learned Advocate Shri Narwade, argued that in a contract if specific date for performance is fixed, Art. 113 of the Limitation Act 1963, (hereinafter referred to as the "Act of 1963") would be attracted and not Art. 54 of the Act of 1963.
8. Per contra, Mr Deshmukh, learned Advocate for the respondents opposed with vim and vigour the submissions on behalf of the appellant on the ground the alleged agreement to sell was entered into on 25.5.1992 on the pretext that the plaintiff had agreed to sell suit land to first defendant. The counter claim filed on 18.10.1999 in the suit to claim specific performance of the agreement was hopelessly barred by Art. 113 of the Act of 1963 as sale deed was to be executed in the year 1993 and possession was to be given earlier. The possession was never given by the plaintiff in 1991 and therefore, for the first defendant, there was no question of claiming benefit of the doctrine of possession given in part performance of the agreement to sell. Learned Advocate for the respondents contended that in the facts and circumstances of the present case, the rulings relied upon by learned Advocate for the appellants are not at all attracted, for the simple reason that the counterclaim was barred under Art. 113 of the Act of 1963.
9. It appears, in the facts and circumstances of the present present case, that there was no permission from the Collector to enable Class II occupant allottee from the Government land to transfer the land, therefore, no sale deed could have been executed. Under Art. 113 of the Act of 1963 residuary article clearly provides for period of limitation of the years from the time when the right to sue accrued. In the present case, the Collector of Yavatmal had refused to grant permission on 30.1.1999. Predecessorintitle of the plaintiff was late Rajkumar Tekchand Punyani, who was allotted the suit land in 1967 68 for cultivating it as Class II occupant. The alleged agreement to sell was entered into between the plaintiff and the first defendant on 25.5.1992 for earnest money of Rs. 36,000/ and the balance of Rs. 13,000/ was payable by 7.4.1993. Under these circumstances, the counterclaim was rightly rejected in view of Art. 113 of the Act of 1963 as barred by limitation prescribed.
10. Both the Courts below have recorded concurrent findings in respect of bar of limitation. Counterclaim is treated as separate suit and is deemed to have been instituted on the date on which it is made in the Court. In Dudh Nath Pandey {Through LRs} vs. Suresh Chandra {Through LRs}: AIR 1986 SC 1509, it is held that finding on limitation is finding of fact and cannot be interfered with in Second Appeal by the High Court in exercise of powers under section 100 of the Code of Civil Procedure.
11. In the facts and circumstances of the present case, on merits, the trial Court has found upon evidence led, that the plaintiff and second defendant had agreed to sell the suit land to the first defendant and accepted earnest money in the sum of Rs. 36,000/ from the first defendant. In view of this finding recorded by the trial Court, although the agreement to sell became void on account of subsequent refusal of permission from the Collector, Yavatmal, the agreement turned out to be void or impossible of performance, but the plaintiffs and original defendant no.2, in view of the Section 65 of the India Contract Act, are liable to restore back the advantage received from the appellant or to make compensation for it to the first defendant (appellant) from whom they had received it. An useful reference may be made to ruling in Chandan Mulji Nishar vs. Union of India : 2008(1) Mh.L.J. 703, to find support to the above proposition. As a result of this discussion, this Court must conclude that the counterclaim was barred by limitation and no interference is required with concurrent findings of facts recorded by the Courts below. The Appeal has to be dismissed on this count. The plaintiff and original defendant no.2 are, however, in view of Section 65 of the Indian Contract Act, are liable to refund the amount received in the sum of Rs. 36,000 / as earnest money to the appellant ( first defendant ), along with interest at the rate of 6 % per annum, from the date of counterclaim till realisation thereof. As the parties are required to be restored back to their position as prior to the suit agreement, there shall be modification to this extent in decree passed by the trial Court. The Appeal is partly allowed accordingly. No order as to costs.