Oral Judgment:
1. 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 and 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 the defendant to execute the sale deed and to remain present on 20.12.1985 between 10.30 am and 2.30 pm. in the office of the Sub-Registrar, Nagpur. The defendant gave reply on 16.12.1985 denying the contentions therein, being baseless and mischievous and did not appear in the office of Sub-Registrar. To sum up, the plaintiff thus then sought the relief of specific performance for execution of sale deed and delivery of possession.
In response to the suit-summons, the defendant filed written statement. It was not disputed in the written statement that Survey Nos.130/1, 130/3 and 130/4 and 130/5 were already sold to the plaintiff society by a registered sale deed. The defendant however placed strong reliance on the cancellation of the agreement under letter dated 12.7.1982 in respect of the suit property being Khasra No. 127/3 and contended that since the suit was not filed in three years from cancellation/refusal, the suit was barred by limitation having been filed on 30.12.1985. It was contended that there were no extension sought on the ground of obtaining permission under the ULC Act as well as BA and AL Act and that merely by enforcement of Urban Ceiling Act, the terms of the agreement dated 30.01.1975 would not in any case stand abrogated nor such a relief was sought by the plaintiff. It was stated that thus the agreement did not subsist, the same having been recalled or cancelled. The fact that the Application u/s 20 was jointly made on 30.8.1976 to the Competent Authority and lastly on 5.2.1980 was not disputed by the defendant and it was stated that all the while the defendant was cooperating with the plaintiff. The defendant then stated that for obtaining permission u/a. 89 of the BT and AL Act the plaintiff never sought any extension for obtaining permission nor obtained any permission u/s.89 before the date of cancellation. The defendant then stated that he was not aware about the order dated 13.12.1984 about the exemption and even otherwise after lapse of period of one year, the exemption order became infructuous, the suit having been lodged on 30.12.1985. It was then stated that the defendant was not willing to sell his land after cancellation of the agreement. Finally, the defendant prayed for dismissal of the Suit. The State Government (original defendant no.2) also filed written statement and expressed lack of knowledge about the cancellation of the agreement as contended by the defendant no.1. The Suit was opposed by the State Government/defendant no.2. The trial Judge framed the issues and additional issues. The parties to the suit tendered oral as well as documentary evidence. The trial Judge heard the Suit and decreed the same in part. The trial Judge decreed the suit against the defendant no.1, directing execution of sale deed of the suit property as described in the plaint para no.2 and to give possession of the same to the plaintiff as per agreement for sale Exh.63 dated 30.01.1975 on payment of the balance consideration amount of Rs.80,500/, by the impugned judgment and decree dated 21.4.1999.
4. The defendant preferred an Appeal before the District Judge u/s. 96 of the Code of Civil Procedure. The Appellate Court heard the Appeal after framing the points for determination and finally dismissed the same. Hence this Second Appeal.
ARGUMENTS :
5. In support of the Appeal, Mr. V. V.Bhangde, learned counsel for the appellants invited my attention to the substantial question of law framed by this Court at the time of admission order. He then contended that the agreement was executed on 30.1.1975 and the respondent/plaintiff did not take any action in furtherance to the completion of sale deed nor had obtained permission u/s 89 of the BT and AL Act though with reference to coming into force of U.L.C. Act on 7.2.1976, the period of about 13 months was available. He then submitted that out of the total consideration, only an amount of Rs. 6000/was paid towards earnest money and thereafter there were no attempts to make any payments. According to him, the defendant no.1 had applied on 13.8.1976 and 2.11.1976 (Exhs. 65 and 69), under the U.L.C. Act for requisite exemption and even joint application was filed at Exh. 97 dated 5.2.1980 which clearly showed, according to him, that the defendant had no intention to commit any breach of contract and was fully cooperating. It is then contended that since nothing was happening, by issuing letter/notice dated 12.7.1992 (Exh.82) the defendant cancelled the agreement explicitly and by letter/notice dated 3.8.1982 Exh.83 the same was replied by the plaintiff, which indicated that the plaintiff was fully aware about the cancellation made, at least, while replying the notice Exh. 82, by reply Exh.83. He, therefore, contended that in the wake of cancellation of the agreement by Exh.82 and, at any rate, the conscience knowledge on 3.8.1982, the suit ought to have been filed on 11.7.1985 or 2nd August 1985, there being an express refusal contemplated by Article 54 of the Limitation Act. He submits that the Suit was clearly barred by limitation but the Courts below have computed the limitation after legal notice dated 9.12.1985 was given to the defendant by plaintiff and that suit was actually filed on 30.12.1985. According to him, there is a clear error of law on the part of the Courts below in computing the limitation from the date of giving notice on 9.12.1985. He therefore submits that the Suit was barred by limitation. He cited the following decisions in support of his submissions:
1) 1993 Supp (4) SCC 492: Thakamma Mathew (smt.) vs. M. Azamatulla Khan and others
2) (2005) 6 SCC 733: Kasturi vs. Iyyamperumal and others
3) (2010) 7 SCC 417: Mumbai International Airport vs. Regency Convention Centre
4) (2010) 14 SCC 596: Van Vibhag Karmachari Grioha vs. Ramesh Chander and others
5) (2013) 15 SCC 27: I.S. Sikandar vs. K. Subramani and others
6. Mr. V.V.Bhangde, learned counsel for the appellants then contended that there is no prayer in the suit to set up a challenge or for a declaration about Exh.82 that for one reason or the other the cancellation made by the defendant was illegal or void in law. He submitted that the act of cancellation of Exh.82 by the defendant is an act the defendant having waited for more than sufficient period from the date of execution of the agreement i.e. about 7 years and, therefore, unless the action for cancellation was brought into question, the Suit could not be held to be maintainable.
7. Mr. Bhangde, then, contended that all the parties to the agreement specifically named in the agreement Exh.63 were not at all joined as a party to the suit and only one person was joined whereas the agreement was entered into by four persons. According to him, whether or not, joining of a particular person would make any difference, is not the criteria but all the persons to the agreement are required to be made party to the suit. He contended that the objection as to the nonjoinder of all parties to the agreement in the suit was raised before the trial Court in the written statement, but still there was no action to add all the parties to the agreement in the suit. He therefore contended that the suit was bad for nonjoinder of necessary parties.
8. Learned counsel for the appellant then contended that the lapse of period of seven years from the date of agreement till the date of cancellation and the happening in between clearly indicated that the plaintiff was not ready and willing to perform his part of the contract and wanted the defendant to wait indefinitely. According to him, the prohibition on the landlord under the Ceiling Act or under any other Act cannot stop running of the limitation and that by itself would be no excuse not to file the suit within the law of limitation. Inviting my attention to the reasons given by the Courts below, he submitted that the Courts below have clearly confused the aspect of limitation and the computation thereof, by taking the notice of 9.12.1985 as the commencement of the limitation. Learned counsel for the appellant finally prayed for reversal of the judgments and decrees of the Courts below.
9. Per contra, Mr. K.H.Deshpande, learned senior Counsel with S/shri Sudame and Pathrikar, vehemently opposed the Second Appeal and submitted that two Courts below have concurrently found that the Suit was well within limitation and there was a legal impediment by way of statutory law in the matter of performance of the contract and, in fact, the parties to the Suit had individually as well as jointly made the application for exemption from the provisions of the Ceiling Act, which clearly indicated the intention of the plaintiff to be ready and willing to obtain the sale deed in strict adherence to the provisions of the law including the Urban Ceiling Act and the BT and AL Act. Adhering to the laws, namely, obtaining exemption in Ceiling Act or permission u/s. 89 should not be read as un-readiness or unwillingness to perform the contract and, on the contrary, the same is consistent with the stand that the plaintiff was ready and willing to perform the part of the contract. This was particularly so because the plaintiff had, in fact, purchased the other pieces of lands from the same party for housing its members and, therefore, it was idle to contend that the plaintiff was not ready and willing. Adhering to the important aspect of limitation Mr. K. H. Deshpande learned senior Advocate invited my attention to Section 5 of the Contract Act and Section 89 of the BT and AL Act and submitted that Section 5 does not permit the appellants/defendants to unilaterally cancel the contract by deliberately ignoring the fact that the suit land was under cloud because of the enforcement of the Ceiling Act. Therefore, the cancellation of Exh. 82 is not cancellation in the eye of law and is void ab initio, which to say the least, must be ignored and once the said cancellation Exh.82 is ignored, the limitation would never said to have commenced, at least, till the plaintiff issued a notice asking for execution of sale deed on 9.12.1985 and the Suit was thereafter immediately filed. He, therefore, submitted that there was a clear breach of the contract on the part of the appellant by issuing Exh.82 and no undue advantage can be given to the defendant for his own unlawful act. According to him, it is the trite law that there is no occasion to challenge any action including cancellation by Exh.82 in the suit, since the action itself is illegal from the beginning and having no consequence. The Suit was thus clearly filed within limitation in the wake of the above facts. According to him, insofar as the objection as to nonjoinder of parties is concerned, the same is not invalid inasmuch as reading of the agreement shows that the same is a consolidated action by the family members and the Suit cannot fail on the ground of nonjoinder. The fact that the parties to the suit have individually and jointly applied for exemption and in fact having an order granting exemption clearly shows that the plaintiff had always subsisting intention to continue with the contract and ultimately which evidences readiness and willingness on the part of the plaintiff and, therefore, there is no substance in the contention that the plaintiff was not ready and willing to complete the contract. Finally he prayed for dismissal of the Appeal.
10. I have heard the learned counsel for the rival parties at length. I have perused the entire record and the reasons recorded by the two courts.
11. The trial Judge framed the following issues in the Suit and answered the same as indicated against those issues:
| 1. | Does plaintiff prove that it was ready and willing to perform its part of contract? | ..Yes |
| 2. | Does the defendant no.1 prove that the time was essence of the contract? | ..No |
| 3. | Does defendant no.1 prove that by notice dated 12.07.82 he legally cancelled the agreement dated 30.01.75? | ..No |
| 4. | Is agreement dated 30.01.75 unenforceable for want of permission from the Govt. and in view of Section 5 (3) of the ULCR Act? | Does not survive. |
| 4A | Whether this Court has jurisdiction to entertain the present suit? | ..Yes |
| 4B | Whether the suit is within limitation? | ..Yes |
| 4C | Whether the plaintiff is entitiled for the relief claim in the suit? | As per beloworder. |
| 4D | Whether suit is maintainable in law defendant no.2 for want of notice under Section 80 of C.P. Code? | No |
| 5. | Is plaintiff entitled to discretionary relief of specific performance? | Yes |
| 6 | What order | Suit is partly decreed as per below order. |
| 1. | Whether the plaintiff society was ready and willing to perform its part of the contract | In the affirmative |
| 2. | Whether the suit filed by the plaintiff society is within limitation? | In the affirmative |
| 3. | Whether the plaintiff society is entitled for the discretionary relief of specific performance of contract as prayed against defendant no.1? | In the affirmative |
| 4. | Whether the act of the defendant No.1 was justified in cancelling an agreement dated 30.01.1975 by issuing letter (Exh.82) on dated 12.07.1982 for the reasons stated by him. | In the negative. |
| 5. | Whether the defendant no.1 has proved that the plaintiff society has failed to perform its part of the contract? | In the negative |
| 6. | Whether the plaintiff society is entitled for the relief claimed against the defendant no2-State Government? | In the negative |
| 7. | Whether the impugned Judgment and decree passed by the trial Court is legal, proper and correct? | In theAffirmative |
| 8. | Is it necessary to interference with the impugned judgment passed by the trial court? | In the negative |
| 9. | What order? | As per final order |
| (i) | Whether the civil suit filed by the respondent No. 1-Plaintiff was maintainable having been filed after three years of cancellation of the agreement dated 30.1.1975? (the appellants had given the notice dated 12.07.1982 (Exh. No.82) terminating the agreement dated 30.01.1975 and the civil suit was filed on 30.12.1985). |
| (ii) | Whether the civil suit was maintainable having been filed beyond the period prescribed by Article 54 of the Limitation Act, 1961? |
| (iii) | The respondent no.1-plaintiff having not sought decree for declaration that the cancellation of agreement dated 30.01.1975 was illegal, whether the civil suit praying for decree for specific performance of the agreement was maintainable? |
(iv) Whether the suit could be held to be bad for nonjoinder of necessary parties, namely, all the persons to the agreement Exh.63?
15. Now, coming to the first and second substantial questions, I find that the agreement Exh.63 was executed by four persons mentioned in the agreement, jointly and individually. Reading of the agreement Exh.63 shows mention about Survey No. 130/1, 3, 4 and 5 which were already sold to the plaintiff-society. The dispute is about only survey No.127/3, the area being 3.46 acres. The same was agreed to be sold as can be seen from the agreement by four persons. Urban land Ceiling Act came into force with effect from 7.2.1976 and eventually it was repealed in 2007 in the State of Maharashtra. It is a fact that because of the coming into force of the ULC Act, the plaintiff and defendants were having absolutely no dispute. They , in fact, individually or jointly made applications till 1980 seeking exemption from the Government. This went on till Exh.82 dated 12.07.1982 was issued by the appellant/defendant. It would be convenient to reproduce the relevant part from Exh.82, which reads as under:-
That more than 7 years have passed, we have not heard anything about your purchase of the same.
2) That there are being so many relaxation in the Ceiling Laws moreover the land is agricultural land and it is lying as an unproductive for so many years since we have entered into an agreement, we did not cultivate it nor used it for any other purpose. We are neither using it, nor we have been able to dispose it off to anybody. Your silence appears now that you are not intending in purchasing the said land, therefore, since we have not heard from you for such a long time. We treat that our agreement is cancelled, under these circumstances we are free to dispose it off to any other sons. Please take note.
It would also be convenient to extract the relevant part from Exh.83, the reply to Exh.82 given by the plaintiff on 3rd August 1982.
1. It is within your knowledge that the society has already applied in the prescribed Form on 5.2.80 seeking exemption in respect of S.No. 127/3 on the basis of an agreement dated 30.1.1975. The said application is also signed by you. Government orders granting exemption are not yet received. The Society was and is willing to obtain a sale deed in respect of the said land immediately on receipt of necessary orders. You are also aware that in terms of the provisions of the Urban Land (Ceiling and Regulation) Act, 1976 you are prohibited to transfer the said land by way of sale until Government orders in that behalf are received. Please therefore take note.
2. It is also within your knowledge that S.No. 128/2, 129/2, 128/4 and 129/4 are under acquisition by the Nagpur Improvement Trust and in terms of clause (3) of the agreement dated 30.1.1975 you have to get the same released or abandoned from acquisition. Kindly therefore first secure such relinquishment or abandonment of the said land from the scheme of acquisition and intimate to the Society accordingly so that the Society may obtain a sale deed from you in respect of the same within time stipulated in the said agreement. Please note that you have not yet discharged your obligation in this behalf and therefore there is no breach of contract on the part of the society. As a result, therefore, you cannot treat the agreement dated 30.1.1975 as cancelled.
3. It is reiterated that your agreement is still valid and subsisting and the society is ready and willing to perform its part of the contract and you are also bound by the terms of the contract and obliged to perform your part according to the terms of the agreement.
Please take note.
16. Perusal of the document Exh. 82 shows that the cancellation was being made by the appellant/defendant stating therein that the defendant was unable to deal with the suit land i.e. either the same was not being used nor disposed of to anybody and that there was no response from the plaintiff for a long time and, therefore, the agreement was being cancelled. Reply Exh. 83 as quoted above, shows that the plaintiff did not agree with the notice of cancellation and asserted that the parties had applied in the prescribed form on 5.2.1980 seeking exemption from the Government and the same was not received and the society at any rate was willing to execute the sale deed immediately after the necessary orders. The plaintiff reminded the defendant that the ceiling Act imposed prohibition in the matter of transfer of the suit land and further that the other land survey numbers (not the Suit S.NO. 127/3) were under acquisition at the instance of Nagpur Improvement Trust and the defendant did not discharge his obligation for getting relinquishment or annulment of the NIT scheme and, therefore, there was no breach of contract on the part of the plaintiff society. The plaintiff therefore asserted that the defendant could not treat agreement as cancelled in the light of the prohibition and the reservation mentioned in the reply. The contention about reservation by NIT was wholly irrelevant as it did not relate to Suit S.No.127/3. In the last para, it is asserted that the agreement was valid and subsisting and the plaintiff-society was still ready and willing to perform its part of the contract and the defendant was bound by the terms of the contract and obliged to perform his part. Exh.72 is the order made by the Government i.e. dated 1st December,1984 i.e. after Exh. 72 was issued granting exemption for residential use. The moot question that arises for consideration is whether the document Exh. 82 cancelling the agreement would be of any consequence or not and whether the agreement between the two parties would be affected due to the stated coming into force of the statutory laws in the light of the law of limitation. The submission made by Shri K.H. Deshpande, learned Senior Advocate that there could be no unilateral cancellation will have to be examined qua its effect on the limitation provided by Article 54 of the Limitation Act. Article 54 of the Limitation Act reads thus:-
| Description of suit | Period of limitation | Time from which period begin to run |
| 54. For specific performance of a contract | Three years | The date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused. |
9. ............ Moreover, in view of Article 54 of the Limitation Act, 1963 a suit for specific performance of contract has to be filed within three years of the date fixed for the performance or if no such date is fixed where plaintiff has notice that performance is refused. In the present case, the appellant by his notice dated February 10, 1975 and clearly indicated that she had cancelled the agreement and had forfeited the advance amount of Rs. 18000/deposited by the defendant. By the said notice, it was clearly indicated that the appellant was no longer willing to perform the agreement to sell dated November 14, 1974. In the circumstances, it was incumbent upon the defendant to have filed a suit for specific performance of the contract within a period of three years fro the date of the said notice dated February 10, 1975 and if such a suit has been filed by the defendant, it would have been open to the appellant to show that it was barred by the provision contained in Section 16 of the Specific Relief Act. .............................. The High Court, with due respect, was not right in invoking its discretionary power under Order 7 Rule 7 CPC to grant such a relief to the defendant. The said power conferred on the Court does not enable it to override the statutory limitations contained in Section 16 of the Specific Relief Act, 1963 and Article 54 of the Limitation Act, 1963 which preclude the grant of the relief of specific performance of a contract except within the period prescribed by the section.
Similar is the position in Shakuntala (Smt.) vs. Narayan Chavan and others : 1999 8 SCC 587. On the facts of that case, I quote paragraph nos. 4,5 and 9 which read thus;
4. It was agreed in the trial court that the issue relating to limitation be tried as a preliminary issue. The said Court held that the suit was barred by limitation inasmuch as the vendor refused to execute the deed as per his notice dated 17.06.1977. Counting three years from that date, the suit ought to have been filed on or before 17.6.1980 but it was filed on 13.7.1981. The suit was therefore held to be barred by limitation. This finding was affirmed by the lower appellate court and the dismissal of the suit was confirmed.
5. In the High Court, the learned Judge proceeded on the assumption that the suit must be deemed to have been filed within the period of limitation inasmuch as the parties agreed that they should apply for permission to the appropriate local authority and that within one month from the date of the grant of permission the sale deed had to be executed. The High Court found that such application for permission was not made before the local authority and that therefore limitation did not start and on that ground the High Court reversed the finding of the courts below and held the suit to be within time. On that basis, it is even decreed the suit.
9. If that be the case the limitation necessarily started from 17.6.1977, the date of refusal to perform his part of the contract and the suit was barred by time. The High Court was in error in taking a contrary view and in setting aside the judgments of the lower courts. The judgment of the High Court is set aside and the judgment of the trial court as affirmed by the first appellate court, is restored.
Further in the case of Van Vibhag Karmachari Sanstha vs. Ramesh Chander and others : (2010) 14 SCC 596, the Apex Court observed thus, in paragraph nos. 8, 17, 19, 21, 22 and 24 to
8. The first respondent, on 3.2.1991, issued a public notice in a local daily, called Dainik Bhaskar, that he is the owner and in possession of the disputed land, and any action taken by the appellant over such land would not affect the rights of ownership and possession of the first respondent over the land. He also stated that the agreement to sell and Power of Attorney in favour of the appellant stood cancelled. Immediately, thereafter, the appellant filed a suit on 11.2.1991 (COS No. 19A/1990) for declaration of ownership of the appellant Society in suit land and for permanent injunction in the court of 3rd Civil Judge, Class II, Indore. The suit was subsequently transferred to the 7th Civil Judge, Class II, Indore as COS No. 603A/1992.
17. Before the trial court, the appellant contended that on 11.2.1991, while instituting the suit, it had not sought the relief of specific performance in view of the fact that no exemption under Section 20 of Urban Land Ceiling Act (hereinafter, `the Act') was obtained in respect of suit land. However, the said contention was rejected by the Trial Court on 23.8.2004 by a detailed order and the suit was dismissed. The trial court also dismissed the application under Section 14 of the Limitation Act filed by the plaintiff (appellant herein) praying for exclusion of time from 11.2.1991 to 23.6.2003.
19. Assailing the judgment of the High Court, the learned counsel for the appellant urged that the agreement for sale, dated 31.3.1976, was acted upon by all the vendors including the first respondent. It was specifically urged that the first respondent participated and cooperated with the appellant in all legal proceedings in respect of the said land wherein the first respondent took the stand that the land in question has been agreed to be sold to the appellant for valuable consideration and that the appellant has been put in possession of the same. This Court, therefore, should not allow the first respondent to approbate and reprobate by taking a completely different stand in the public notice which was published by him in Dainik Bhaskar. In support of such contention, the learned counsel relied on a few judgments.
21. Under the aforesaid circumstances, the crucial question is whether the appellant has a cause of action to file a suit for specific performance.
22. In our judgment, the refusal by the first respondent to acknowledge the right of the appellant over the land in its public notice dated 3.2.1991 definitely furnishes the appellant with a cause of action to file a suit for Specific Performance. If the appellant had filed such a suit, it could in the said suit, have questioned the action of the first respondent as blowing hot and cold. But it has not filed such a suit within the period of limitation prescribed for filing such a suit.
24. In the present case, the factual situation is totally different and the appellants have not filed any suit for Specific Performance against the first respondent within the period of limitation. In this context, the provision of Article 54 of the Limitation Act is very relevant. The period of limitation prescribed in Article 54 for filing a suit for specific performance is three years from the date fixed for the performance, or if no such date is fixed, when the plaintiff has notice that performance is refused.
25. Here admittedly, no date has been fixed for performance in the agreement for sale entered between the parties in 1976. But definitely by its notice dated 3.2.1991, the first respondent has clearly made its intentions clear about refusing the performance of the agreement and cancelled the agreement.
26. The appellant, on noticing the same, filed a suit on 11.2.1991 but he did not include the plea of Specific Performance. The appellant wanted to defend this action by referring to two facts(i) there was an acquisition proceeding over the said land under the Land Acquisition Act and (ii) in view of the provisions of the Ceiling Act, the appellant could not have made the prayer for Specific Performance.
27. The aforesaid purported justification of the appellant is not tenable in law. If the alleged statutory bar referred to by the appellant stood in its way to file a suit for Specific Performance, the same would also be a bar to the suit which it had filed claiming declaration of title and injunction. In fact, a suit for specific performance could have been easily filed subject to the provision of Section 20 of the Ceiling Act.
28. Similar questions came up for consideration before a Full Bench of Gujarat High Court in the case of Shah Jitendra Nanalal v. Patel Lallubhai Ishverbhai [AIR 1984 Guj 145]. The Full Bench held that a suit for Specific Performance could be filed despite the provisions of the Ceiling Act. A suit for Specific Performance in respect of vacant land in excess of ceiling limit can be filed and a conditional decree can be passed for Specific Performance, subject to exemption being obtained under Section 20 of the Act . (Paras 1113)
29. We are in respectful agreement with the views of the Full Bench in the abovementioned decision and the principles decided therein are attracted here.
30. This Court is, therefore, of the opinion that the appellant had the cause of action to sue for Specific Performance in 1991 but he omitted to do so. Having done that, he should not be allowed to sue on that cause of action which he omitted to include when he filed his suit. This Court may consider its omission to include the relief of Specific Performance in the suit which it filed when it had cause of action to sue for specific Performance as relinquishment of that part of its claim.
In this decision of this Van Vibhag, the Apex Court has upheld the decision of the Full Bench of the Gujarat High Court that operation of the provisions of the Ceiling Act would not stop the limitation from running or commencing from the date of explicit refusal in this case, under Exh.82.
In my opinion, the extract of the refusal reflected through Exh. 82 and reply Exh.83 given by the plaintiff clearly denotes that the defendant clearly cancelled or refused to perform his part of contract in writing and the plaintiff in terms understood the said refusal but took the defence that the defendant could not cancel it because of the pending proceedings u/s. 20 etc. In the Supreme Court judgment in the case of Van Vibhag the answer is clearly given that the limitation would commence and the suit could be filed or should have been filed subject to Sec.20 of the Ceiling Act. Both the Courts below however have ignored the above position of law and they chose to rely on the notice that was given by appellant/defendant dated 16.12.1985 reiterating and denying the allegations in notice dated 09.12.1985 wherein the plaintiff asked for performance of contract but there was no reason for the courts below to keep aside the refusal by way of Exh.82 dated 12.7.1982 qua Art.54 and full and conscious understanding of refusal by the plaintiff which is clear from its reply Exh. 83 dated 3.8.1982. Thus, within the meaning of Article 54 of the Limitation Act, when the plaintiff had clear notice that performance was refused on 12.07.1992 Exh.82, the suit ought to have been filed on 11.7.1985 or, at the most on 02.08.1985; but the suit was admittedly filed in the court on 30.12.1985. The suit was thus clearly barred by limitation. Hence I answer question Nos.1 and 2 holding that the suit was barred by limitation and thus was not maintainable, in view of the express refusal dated 12.7.1982 under Exh.82. Consequently the notice dated 09.12.1985 by plaintiff demanding execution of sale deed was of no consequence ad was wholly irrelevant for examining the important question about limitation.
17. The next submission made by Mr Deshpande, learned senior counsel that the very refusal Exh. 82 was of no legal consequence on the anvil of Sec. 5 of the Contract Act, does not appeal to me. If in the opinion of the plaintiff the cancellation (Exh. 82 ) dated 12.07.1982 was not according to law or Section 5 of Contract Act, nothing prevented the plaintiff in filing the suit within the stipulated time of three years provided by law, and also to challenge the said action on the ground argued before me including the one about Section 5 of the Contract Act or that the defendant could not have unilatrally cancelled the agreement for whatever reasons. The fact remains that the agreement was specifically cancelled and refusal was specifically made by the defendant and Article 54 of the Limitation Act provides for commencement of limitation from the date of refusal.
18. The next question is about the respondent/plaintiff not having challenged the refusal or cancellation of agreement dated 30/1/75 (Exh.65), whether the suit was maintainable in the light of the judgment in the case of I.S. Sikandar vs. K.Subramani and others : (2013) SCC 27. It would be appropriate to note the relevant paragraphs from the said judgment. In that case, the defendant nos.1 to 4 who were served summons had remained absent and were ex-parte. The Apex Court while dealing with the similar question, observed as under :-
32. After perusal of the impugned judgment of the High Court and the questions of law framed
by Defendant 5 in this appeal, the following points would arise for determination of this Court:
32.1(i) Whether the original suit filed by the plaintiff seeking a decree for specific performance against Defendants 14 in respect of the suit schedule property without seeking the declaratory relief with respect to termination of the agreement of sale vide notice dated 28.3.1985, rescinding the contract, is maintainable in law ?
36. Since the plaintiff did not perform his part of contract within the extended period in the legal notice referred to supra, the agreement of sale was terminated as per notice dated 28.3.1985 and thus there is termination of the agreement of sale between the plaintiff and Defendants 14 w.e.f. 10.4.1985.
37. As could be seen from the prayer sought for in the original suit, the plaintiff has not sought for declaratory relief to declare the termination of agreement of sale as bad in law. In the absence of such prayer by the plaintiff the original suit filed-by him before the trial court for grant of decree for specific performance in respect of the suit schedule property on the basis of agreement of sale and consequential relief of decree for permanent injunction is not maintainable in law.
38. Therefore, we have to hold that the relief sought for by the plaintiff for grant of decree for specific performance of execution of sale deed in respect of the suit schedule property in his favour on the basis of non-existing agreement of sale is wholly unsustainable in law. Accordingly, Point (i) (see Para 32.1) is answered in favour of Defendant 5.
What is significant to note in the instant case is that, by refusal Exh. 82 dated 12.7.1982, the plaintiff was fully made aware about the intention to refuse the performance of contract for whatever reasons given in Exh.82. The submission made by Mr K.H. Deshpande that such a refusal has no place in law or is not a valid refusal in the eye of law is a matter of adjudication by the Court on facts and evidence. But then having been made fully aware about the cancellation of agreement by Exh.82 and its full understanding by plaintiff which is reflected in Exh. 83 dated 03.08.1982 by the plaintiff itself, it is difficult to fathom as to why the plaintiff failed to pose a challenge to the act of cancellation Exh.82 in the suit itself by saying that refusal was not valid in law. In paragraph 37 of the judgment cited supra, the Apex Court in clear terms held that in the absence of such a prayer by the plaintiff, the original suit is not maintainable in law since no declaratory relief declaring that agreement of sale as bad in law, was sought in the suit. I think the ratio of the above decision is as clear as it could be and there is no reason for me to hold that in the absence of any challenge to the act of termination of contract by Exh.82 the suit would be maintainable. To sum up, this Question No.(iii) will have to be answered by holding that the original suit was not maintainable, in the absence of challenge to the termination of agreement dated 31.07.1975 by termination notice Exh.82 dated dated 12.07.1982.
19. Now coming to the additional substantial question of law No.(iv) framed by me (supra), at the outset, it has not been dealt by any of the courts below. The objection however before me from the respondent is that issue of nonjoinder of necessary parties, was not framed and, therefore, it is not permissible to have adjudication here on the said question/issue. However, on facts, I find that in paragraph 2 of the written statement, the following was the objection at the first opportunity:
2) It is not disputed that this defendant became the exclusive owner of the land mentioned in the para by partition deed dated 17.2.1973, and that an agreement was made on 30.01.1975 not only with the present defendant, but also with Mrs. C. Suryabati w/o late S.J. Naidu; Smt. Padma Naidu and Shri Shriram Naidu. Since they were parties in the agreement they are necessary parties for the purpose of this civil suit.
Following is the relevant portion of deposition of witness no. 1 for the plaintiff Laxmikant:-
......... Agreement of sale is signed by defendant, his mother, his wife and son. Agreement also bears of my signature. H.K. Sawangikar and R.N. Nerkar were the witnesses of that document. They signed in my presence. Contents were stated by the defendant. Contents are correct. It is Exh.63.
It is thus clear that the plaintiff was made fully aware about the objection of the defendant at the very first stage before the trial Judge, that all of those who had entered into agreement Exh.63, were not party to the suit. It therefore cannot be said that the plaintiff is being for the first time noticed about the said objection. It is difficult to understand as to why the plaintiff did not take steps to add all the persons in the agreement who had agreed under Exh.63 to make them parties. There is no explanation whatsoever much less plausible explanation. These facts not being in dispute and being the matters of record, I think a pure question of law arises and, therefore can be answered by this Court.
In the case of Mumbai International Airport vs. Regency Convention Centre and others: (2010) 7 SCC 417, on this very question, the Apex Court stated thus in para nos. 15, 18,19, and 26 while also explaining the ratio in the case of Kasturi vs. Iyyamperumal (2005) 6 SCC 733. It is therefore not necessary for me to repeat what is stated in the decision of Kasturi : (2005) 6 SCC 733.
15. A `necessary party' is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a `necessary party' is not impleaded, the suit itself is liable to be dismissed. A `proper party' is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance.
18. In Kasturi, this Court reiterated the position that necessary parties and proper parties can alone seek to be impleaded as parties to a suit for specific performance. This Court held that necessary parties are those persons in whose absence no decree can be passed by the court or those persons against whom there is a right to some relief in respect of the controversy involved in the proceedings; and that proper parties are those whose presence before the court would be necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the suit although no relief in the suit was claimed against such person.
19. Referring to suits for specific performance, this Court held that the following persons are to be considered as necessary parties: (i) the parties to the contract which is sought to be enforced or their legal representatives; (ii) a transferee of the property which is the subject matter of the contract. This Court also explained that a person who has a direct interest in the subject matter of the suit for specific performance of an agreement of sale may be impleaded as a proper party, on his application under Order 1 Rule 10 CPC. This Court concluded that a purchaser of the suit property subsequent to the suit agreement would be a necessary party as he would be affected if he had purchased it with or without notice of the contract, but a person who claims a title adverse to that of the defendant-vendor will not be a necessary party.
26. If the principles relating to impleadment, are kept in view, then the purported divergence in the two decisions will be found to be nonexistent. The observations in Kasturi and Sumtibai are with reference to the facts and circumstances of the respective case. In Kasturi, this Court held that in suits for specific performance, only the parties to the contract or any legal representative of a party to the contract, or a transferee from a party to the contract are necessary parties. In Sumtibai, this Court held that a person having semblance of a title can be considered as a proper party. Sumtibai did not lay down any proposition that anyone claiming to have any semblance of title is a necessary party. Nor did Kasturi lay down that no one, other than the parties to the contract and their legal representatives/transferees, can be impleaded even as a proper party.
The above dictum of the Apex Court in relation to the necessary party in a suit for specific performance of contract in particular, is clear and there is no doubt about the legal position that all the persons who are parties to the agreement should be added as party to the suit and upon failure to do so, the suit must fail. I, therefore, answer additional Question No.(iv) in the affirmative. This Second Appeal, in the result, must be allowed.
20. Hence I make the following order :
ORDER
a) Second Appeal No.235/2012 is allowed.
b) The judgment and decree dated 4th October, 2011 passed by the District Judge-9, Nagpur in Regular Civil Appeal No.307/1999 and the judgment and decree dated 21st April,1999 passed by 4th Joint Civil Judge (Senior Division )Nagpur in Special Civil Suit No.564/1985 are set aside.
c) Special Civil Suit No. 564/1985 filed by the respondent no.1 is dismissed.
d) Decree be drawn up accordingly.
e) No order as to costs.
Learned Advocate Mr.Sudame, for respondent no.1 prays for stay of this judgment and order to enable the respondent no. 1 to take recourse to the remedy provided under law. Mr. Bhangde opposes the request. However, in the interest of justice, the effect and operation of this judgment and order is stayed for eight weeks.