Dahiben vs Arvindbhai Kalyanji Bhanusali … on 9 July, 2020


Try out our Premium Member services: Virtual Legal Assistant, Query Alert Service and an ad-free experience. Free for one month and pay only if you like it.

Supreme Court of India

Dahiben vs Arvindbhai Kalyanji Bhanusali … on 9 July, 2020

Author: Hon’Ble Ms. Malhotra

                                                                      REPORTABLE
                                  IN THE SUPREME COURT OF INDIA

                                   CIVIL APPELLATE JURISDICTION

                                   CIVIL APPEAL NO. 9519 OF 2019
                             (Arising out of SLP (Civil) No.11618 of 2017)


           DAHIBEN                                                   … Appellant
                                                 versus
           ARVINDBHAI KALYANJI BHANUSALI
           (GAJRA)(D) THR LRS & ORS.                                … Respondents


                                            JUDGMENT

INDU MALHOTRA, J.

1. The present Civil Appeal has been filed to challenge the

impugned Judgment and Order dated 19.10.2016 passed by a

Division Bench of the Gujarat High Court, which affirmed the

Order of the Trial Court, allowing the application filed by

Defendant Nos. 2 and 3/Respondent Nos. 2 and 3 herein under

Order VII Rule 11(d), CPC holding that the suit filed by the

Appellant and Respondent Nos. 9 to 13 herein (hereinafter referred

to as the “Plaintiffs”) was barred by limitation.
Signature Not Verified

Digitally signed by

2. The subject-matter of the present proceedings pertains to a
ARJUN BISHT
Date: 2020.07.09
16:06:33 IST
Reason:

plot of agricultural land of old tenure, admeasuring approximately

1
8701 sq. mtrs. in Revenue Survey No. 610, Block No.573 situated

in village Mota Varachha, Sub-District Surat (hereinafter referred

to as the “suit property”) which was in the ownership of the

Plaintiffs.

3. The land was under restrictive tenure as per Section 73AA of

the Land Revenue Code. The Plaintiffs filed an application dated

13.05.2008 before the Collector, Surat to obtain permission for

selling the suit property to Respondent No.1/Defendant No.1,

which was non-irrigated, and stated that they had no objection to

the sale of the suit property.

4. The Collector vide Order dated 19.06.2009, after carrying out

verification of the title of the Plaintiffs, permitted sale of the suit

property, and fixed the sale price of the suit property as per the

jantri issued by the State Government @ Rs. 2000/- per sq. mtr.,

which would work out to Rs. 1,74,02,000/-. The Collector granted

permission for the sale subject to the terms and conditions

contained in Section 73AA of the Land Revenue Code. It was

stipulated that the purchaser shall make the payment by cheque,

and reference of the payment shall be made in the Sale Deed.

2

5. After obtaining permission from the Collector, the Plaintiffs

sold the suit property to Respondent No.1 herein vide registered

Sale Deed dated 02.07.2009.

Respondent No. 1 – purchaser issued 36 cheques for

Rs.1,74,02,000 towards payment of the sale consideration in

favour of the Plaintiffs, the details of which were set out in the

registered Sale Deed dated 02.07.2009.

6. The Respondent No. 1 subsequently sold the suit property to

Respondent Nos. 2 and 3 herein vide registered Sale Deed dated

01.04.2013, for a sale consideration of Rs. 2,01,00,000/-.

7. On 15.12.2014, the Plaintiffs filed Special Civil Suit No.

718/2014 before the Principal Civil Judge, Surat against the

original purchaser i.e. Respondent No. 1, and also impleaded the

subsequent purchasers i.e. Respondent Nos. 2 and 3 as

defendants. It was inter alia prayed that the Sale Deed dated

02.07.2009 be cancelled and declared as being illegal, void,

ineffective and not binding on them, on the ground that the sale

consideration fixed by the Collector, had not been paid in entirety

by Respondent No. 1.

The Plaintiffs contended that they were totally illiterate, and

were not able to read and write, and were only able to put their

3
thumb impression on the Sale Deed dated 02.07.2009. The Sale

Deed was obtained without payment of full consideration. The

Respondent No.1 had paid only Rs. 40,000 through 6 cheques, and

remaining 30 cheques for Rs.1,73,62,000 were “bogus” cheques.

The Plaintiffs prayed for cancellation of the Sale Deed dated

02.07.2009, and also prayed that the subsequent Sale Deed dated

01.04.2013 be declared as illegal, void and ineffective; and, the

physical possession of the suit property be restored to the

Plaintiffs.

8. Respondent Nos. 2 and 3 filed an Application for Rejection of

the Plaint under Order VII Rule 11 (a) and (d) of the CPC,

contending that the suit filed by the Plaintiffs was barred by

limitation, and that no cause of action had been disclosed in the

plaint.

It was inter alia submitted that the Plaintiffs had admitted the

execution of the Sale Deed dated 02.07.2009 in favour of

Respondent No.1 before the Sub-Registrar, Surat. The only dispute

now sought to be raised was that they had not received a part of

the sale consideration. This plea was denied as being incorrect.

4
It was further submitted that if the Sale Deed dated

02.07.2009 was being challenged, then the suit ought to have been

filed within three years i.e. on or before 02.07.2012.

It was further submitted that pursuant to the execution of the

registered Sale Deed dated 02.07.2009, the Plaintiffs had

participated in the proceedings before the Revenue Officer for

transfer of the suit property in the revenue records in favour of

Respondent No.1. On that basis, the suit property had been

transferred to Respondent No.1 vide Hakk Patrak Entry No. 6517

dated 24.07.2009. Before certifying the said entry, notice under

Section 135D of the Land Revenue Code had been duly served on

the Plaintiffs, and ever since, Respondent No. 1 had been paying

the land revenue on the suit property, and taking the produce

therefrom.

Respondent Nos. 2 and 3 further submitted that they had

purchased the suit property from Respondent No.1 after verifying

the title, and inspecting the revenue records. The Respondent No.1

had sold the suit property vide a registered Sale Deed dated

01.04.2013, on payment of valuable consideration of Rs.

2,01,00,000/-. Pursuant thereto, the suit property was

transferred in the name of Respondent Nos. 2 and 3 in the revenue

records.

5
It was further submitted that the Plaintiffs, with a view to

mislead the Court, had deliberately filed copies of the 7/12

extracts dated 20.07.2009, which was prior to the mutation being

effected in the name of Respondent No.1. It was submitted that

the suit was devoid of any merit, and clearly time-barred, and

liable to be rejected.

9. The Trial Court carried out a detailed analysis of the

averments in the plaint alongwith the documents filed with the

plaint, including the registered Sale Deed dated 02.07.2009,

executed by the Plaintiffs. The undisputed facts which emerged

from the averments in the plaint was that the suit property was of

restrictive tenure under Section 73AA of the Land Revenue Code.

Since the Plaintiffs were in dire need of money, and wanted to sell

the suit property to Respondent No. 1, they had filed an application

before the Collector, Surat on 13.05.2008 to obtain permission for

sale of the suit property. The Collector vide Order dated

19.06.2009 granted permission to the Plaintiffs and fixed the sale

price at Rs. 1,74,02,000/- which was to be paid through cheques.

It was contended in the plaint that the Respondent No. 1 had in

fact paid only Rs. 40,000/-, and false cheques of Rs. 1,73,62,000/-

were issued, which remained unpaid.

6
On a perusal of the registered Sale Deed dated 02.07.2009,

[marked as Exhibit 3/9] it was noted that the Plaintiffs had in fact

accepted and acknowledged the payment of the full sale

consideration from Respondent No.1, through cheques which were

issued prior to the execution of the Sale Deed, during the period

07.07.2008 to 02.07.2009.

As per the Plaintiffs, the Sale Deed was executed on

02.07.2009 in favour of Respondent No.1, which was registered

before the Office of the Sub-Registrar, for which the Plaintiffs

would have remained personally present. The transaction having

been executed through a registered document, was in the public

domain, and in the knowledge of the Plaintiffs right from the

beginning.

The Trial Court noted that there was no averment in the plaint

that the cheques had not been received by them. Once the cheques

were received by them, in the normal course, they would have

presented the cheques for encashment within 6 months. The

Court held that had the Plaintiffs not been able to encash 30

cheques, a complaint ought to have been filed, or proceedings

initiated for recovery of the unpaid sale consideration. There was

however, nothing on record to show that the Plaintiffs had made

any complaint in this regard for a period of over 5 years.

7
The Plaintiffs also failed to produce the returned cheques, their

passbooks, bank statements, or any other document to support

their averments in the plaint.

A notice for transfer of the suit property in the revenue records

under Section 135D was served on the Plaintiffs, to which no

objection was raised. The name of Respondent No. 1 was entered

into the revenue records, which was certified by the Revenue

Officer.

The Trial Court held that the period of limitation for filing the

suit was 3 years from the date of execution of the Sale Deed dated

02.07.2009. The suit was filed on 15.12.2014. The cause of action

as per the averments in the plaint had arisen when the Defendant

No.1/Respondent No.1 had issued ‘false’ or ‘bogus’ cheques to the

Plaintiffs in 2009. The suit for cancellation of the Sale Deed dated

02.07.2009 could have been filed by 2012, as per Articles 58 and

59 of the Limitation Act, 1963. The suit was however filed on

15.12.2014, which was barred by limitation.

The suit property was subsequently sold by Respondent No.1

to Respondent Nos. 2 and 3 by a registered Sale Deed dated

01.04.2013. Before purchasing the suit property, the Respondent

Nos. 2 and 3 had issued a public notice on 14.08.2012. The

Plaintiffs did not raise any objection to the same.

8
The Trial Court, on the basis of the settled position in law, held

that the suit of the Plaintiffs was barred by limitation, and allowed

the application under Order VII Rule 11(d) CPC.

10. Aggrieved by the Judgment dated 12.08.2016 passed by the

Sr. Civil Judge, Surat, the Plaintiffs filed First Appeal

No.2324/2016 before the High Court of Gujarat at Ahmedabad.

The Division Bench of the High Court took note of the fact that

the Plaintiffs did not deny having executed the registered Sale Deed

dated 02.07.2009 in favour of Respondent No.1. In the said Sale

Deed, it was specifically admitted and acknowledged by the

Plaintiffs that they had received the full sale consideration. The

Sale Deed contained the complete particulars with respect to the

payment of sale consideration by Respondent No. 1 through 36

cheques, the particulars of which were recorded therein. Since the

execution of the Sale Deed was not disputed, and the conveyance

was duly registered in the presence of the Plaintiffs before the Sub-

Registrar, the Sale Deed could not be declared to be void, illegal,

or ineffective.

The suit property was subsequently sold by Respondent No. 1

in favour of Respondent Nos. 2 and 3 vide registered Sale Deed

dated 01.04.2013 for a sale consideration of Rs. 2,01,00,000/-.

9
Respondent Nos. 2 and 3 were bona fide purchasers for valuable

consideration.

The present suit for cancellation of the Sale Deed was filed by

the Plaintiffs after a period of over 5 years after the execution of

the Sale Deed dated 02.07.2009, and 1 year after the execution of

the Sale Deed dated 01.04.2013 by Respondent No.1. It was noted

that prior to the institution of the suit on 15.12.2014, at no point

of time did the Plaintiffs raise any grievance whatsoever, of not

having received the full sale consideration mentioned in the Sale

Deed dated 02.07.2009. It was for the first time that such an

allegation was made after over 5 years from the date of execution

of the Sale Deed dated 02.07.2009.

Since the suit in respect of the Sale Deed dated 02.07.2009

was held to be barred by law of limitation, the High Court was of

the view that the suit could not be permitted to be continued even

with respect to the subsequent Sale Deed dated 01.04.2013. The

Plaintiffs had not raised any allegation against Respondent Nos. 2

and 3, and there was no privity of contract between the Plaintiffs

and Respondent Nos. 2 and 3.

The High Court rightly affirmed the findings of the Trial Court,

and held that the suit was barred by limitation, since it was filed

beyond the period of limitation of three years.

10

11. Aggrieved by the impugned Judgment and Order dated

12.08.2016 passed by the High Court, the original Plaintiff No.1

has filed the present Civil Appeal.

12. We have heard the learned Counsel for the parties, perused

the plaint and documents filed therewith, as also the written

submissions filed on behalf of the parties.

12.1 We will first briefly touch upon the law applicable for

deciding an application under Order VII Rule 11 CPC,

which reads as under:

“11. Rejection of plaint.– The plaint shall be rejected in
the following cases:–

(a) where it does not disclose a cause of action;

(b) where the relief claimed in undervalued, and the
plaintiff, on being required by the Court to correct the
valuation within a time to be fixed by the Court, fails to
do so;

(c) where the relief claimed is properly valued but the
plaint is written upon paper insufficiently stamped, and
the plaintiff, on being required by the Court to supply the
requisite stamp-paper within a time to be fixed by the
Court, fails to do so;

(d) where the suit appears from the statement in
the plaint to be barred by any law;

(e) where it is not filed in duplicate;

(f) where the plaintiff fails to comply with the provisions
of rule 9
Provided that the time fixed by the Court for the
correction of the valuation or supplying of the requisite
stamp-paper shall not be extended unless the Court, for
reasons to be recorded, is satisfied that the plaintiff was
prevent by any cause of exceptional nature for correction
the valuation or supplying the requisite stamp-paper, as
the case may be, within the time fixed by the Court and
that refusal to extend such time would cause grave
injustice to the plaintiff.”
(emphasis supplied)

11
The remedy under Order VII Rule 11 is an

independent and special remedy, wherein the Court is

empowered to summarily dismiss a suit at the threshold,

without proceeding to record evidence, and conducting a

trial, on the basis of the evidence adduced, if it is satisfied

that the action should be terminated on any of the grounds

contained in this provision.

The underlying object of Order VII Rule 11 (a) is

that if in a suit, no cause of action is disclosed, or the suit

is barred by limitation under Rule 11 (d), the Court would

not permit the plaintiff to unnecessarily protract the

proceedings in the suit. In such a case, it would be

necessary to put an end to the sham litigation, so that

further judicial time is not wasted.

In Azhar Hussain v. Rajiv Gandhi1 this Court held

that the whole purpose of conferment of powers under this

provision is to ensure that a litigation which is

meaningless, and bound to prove abortive, should not be

11986 Supp. SCC 315
Followed in Maharaj Shri Manvendrasinhji Jadeja v. Rajmata Vijaykunverba w/o Late
Maharaja Mahedrasinhji, (1998) 2 GLH 823

12
permitted to waste judicial time of the court, in the

following words :

“12. …The whole purpose of conferment of such power is to
ensure that a litigation which is meaningless, and bound to
prove abortive should not be permitted to occupy the time of
the Court, and exercise the mind of the respondent. The
sword of Damocles need not be kept hanging over his head
unnecessarily without point or purpose. Even if an ordinary
civil litigation, the Court readily exercises the power to reject
a plaint, if it does not disclose any cause of action.”

12.2 The power conferred on the court to terminate a civil

action is, however, a drastic one, and the conditions

enumerated in Order VII Rule 11 are required to be strictly

adhered to.

12.3 Under Order VII Rule 11, a duty is cast on the Court to

determine whether the plaint discloses a cause of action

by scrutinizing the averments in the plaint2, read in

conjunction with the documents relied upon, or whether

the suit is barred by any law.

12.4 Order VII Rule 14(1) provides for production of

documents, on which the plaintiff places reliance in his

suit, which reads as under :

“Order 7 Rule 14: Production of document on which
plaintiff sues or relies.–
(1)Where a plaintiff sues upon a document or relies upon
document in his possession or power in support of his claim,
he shall enter such documents in a list, and shall produce it
in Court when the plaint is presented by him and shall, at

2 Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I & Anr., (2004) 9 SCC 512.

13

the same time deliver the document and a copy thereof, to
be filed with the plaint.

(2)Where any such document is not in the possession or
power of the plaintiff, he shall, wherever possible, state in
whose possession or power it is.

(3)A document which ought to be produced in Court by the
plaintiff when the plaint is presented, or to be entered in the
list to be added or annexed to the plaint but is not produced
or entered accordingly, shall not, without the leave of the
Court, be received in evidence on his behalf at the hearing
of the suit.

(4)Nothing in this rule shall apply to document produced for
the cross examination of the plaintiff’s witnesses, or,
handed over to a witness merely to refresh his memory.”
(emphasis supplied)

Having regard to Order VII Rule 14 CPC, the documents

filed alongwith the plaint, are required to be taken into

consideration for deciding the application under Order VII

Rule 11 (a). When a document referred to in the plaint,

forms the basis of the plaint, it should be treated as a part

of the plaint.

12.5 In exercise of power under this provision, the Court

would determine if the assertions made in the plaint are

contrary to statutory law, or judicial dicta, for deciding

whether a case for rejecting the plaint at the threshold is

made out.

12.6 At this stage, the pleas taken by the defendant in the

written statement and application for rejection of the plaint

14
on the merits, would be irrelevant, and cannot be adverted

to, or taken into consideration.3

12.7 The test for exercising the power under Order VII Rule

11 is that if the averments made in the plaint are taken in

entirety, in conjunction with the documents relied upon,

would the same result in a decree being passed. This test

was laid down in Liverpool & London S.P. & I Assn. Ltd. v.

M.V.Sea Success I & Anr.,4 which reads as :

“139. Whether a plaint discloses a cause of action or not is
essentially a question of fact. But whether it does or does
not must be found out from reading the plaint itself. For the
said purpose, the averments made in the plaint in their
entirety must be held to be correct. The test is as to whether
if the averments made in the plaint are taken to be correct
in their entirety, a decree would be passed.”

In Hardesh Ores (P.) Ltd. v. Hede & Co.5 the Court

further held that it is not permissible to cull out a sentence

or a passage, and to read it in isolation. It is the

substance, and not merely the form, which has to be

looked into. The plaint has to be construed as it stands,

without addition or subtraction of words. If the allegations

in the plaint prima facie show a cause of action, the court

3 Sopan Sukhdeo Sable v. Assistant Charity Commissioner, (2004) 3 SCC 137
4 (2004) 9 SCC 512.

5 (2007) 5 SCC 614.

15
cannot embark upon an enquiry whether the allegations

are true in fact.6

12.8 If on a meaningful reading of the plaint, it is found that

the suit is manifestly vexatious and without any merit, and

does not disclose a right to sue, the court would be justified

in exercising the power under Order VII Rule 11 CPC.

12.9 The power under Order VII Rule 11 CPC may be

exercised by the Court at any stage of the suit, either

before registering the plaint, or after issuing summons to

the defendant, or before conclusion of the trial, as held by

this Court in the judgment of Saleem Bhai v. State of

Maharashtra.7 The plea that once issues are framed, the

matter must necessarily go to trial was repelled by this

Court in Azhar Hussain (supra).

12.10 The provision of Order VII Rule 11 is mandatory in

nature. It states that the plaint “shall” be rejected if any

of the grounds specified in clause (a) to (e) are made out. If

the Court finds that the plaint does not disclose a cause of

action, or that the suit is barred by any law, the Court has

no option, but to reject the plaint.

6 D. Ramachandran v. R.V. Janakiraman, (1999) 3 SCC 267; See also Vijay Pratap Singh v.
Dukh Haran Nath Singh
, AIR 1962 SC 941.

7 (2003) 1 SCC 557.

16

13. “Cause of action” means every fact which would be

necessary for the plaintiff to prove, if traversed, in order to support

his right to judgment. It consists of a bundle of material facts,

which are necessary for the plaintiff to prove in order to entitle him

to the reliefs claimed in the suit.

In Swamy Atmanand v. Sri Ramakrishna Tapovanam8 this

Court held :

“24. A cause of action, thus, means every fact, which if
traversed, it would be necessary for the plaintiff to prove an
order to support his right to a judgment of the court. In other
words, it is a bundle of facts, which taken with the law
applicable to them gives the plaintiff a right to relief against
the defendant. It must include some act done by the
defendant since in the absence of such an act, no cause of
action can possibly accrue. It is not limited to the actual
infringement of the right sued on but includes all the
material facts on which it is founded”
(emphasis supplied)

In T. Arivandandam v. T.V. Satyapal & Anr.9 this Court held

that while considering an application under Order VII Rule 11 CPC

what is required to be decided is whether the plaint discloses a real

cause of action, or something purely illusory, in the following

words : –

“5. …The learned Munsiff must remember that if on a
meaningful – not formal – reading of the plaint it is
manifestly vexatious, and meritless, in the sense of not
disclosing a clear right to sue, he should exercise his power
under O. VII, R. 11, C.P.C. taking care to see that the ground
mentioned therein is fulfilled. And, if clever drafting has

8 (2005) 10 SCC 51.

9 (1977) 4 SCC 467.

17

created the illusion of a cause of action, nip it in the bud at
the first hearing …”
(emphasis supplied)

Subsequently, in I.T.C. Ltd. v. Debt Recovery Appellate

Tribunal,10 this Court held that law cannot permit clever drafting

which creates illusions of a cause of action. What is required is

that a clear right must be made out in the plaint.

If, however, by clever drafting of the plaint, it has created the

illusion of a cause of action, this Court in Madanuri Sri

Ramachandra Murthy v. Syed Jalal11 held that it should be nipped

in the bud, so that bogus litigation will end at the earliest stage.

The Court must be vigilant against any camouflage or

suppression, and determine whether the litigation is utterly

vexatious, and an abuse of the process of the court.

14. The Limitation Act, 1963 prescribes a time-limit for the

institution of all suits, appeals, and applications. Section 2(j)

defines the expression “period of limitation” to mean the period of

limitation prescribed in the Schedule for suits, appeals or

applications. Section 3 lays down that every suit instituted after

the prescribed period, shall be dismissed even though limitation

10 (1998) 2 SCC 170.

11 (2017) 13 SCC 174.

18
may not have been set up as a defence. If a suit is not covered by

any specific article, then it would fall within the residuary article.

Articles 58 and 59 of the Schedule to the 1963 Act, prescribe

the period of limitation for filing a suit where a declaration is

sought, or cancellation of an instrument, or rescission of a

contract, which reads as under :

Description of suit Period of Time from which
limitation period begins to
run

58. To obtain any Three years When the right to
other declaration. sue first accrues.

         59. To cancel or set     Three years     When       the    facts
         aside an instrument                      entitling the plaintiff
         or decree or for the                     to      have        the
         rescission    of   a                     instrument or decree
         contract.                                cancelled      or    set
                                                  aside or the contract
                                                  rescinded          first
                                                  become known to
                                                  him.



The period of limitation prescribed under Articles 58 and 59

of the 1963 Act is three years, which commences from the date

when the right to sue first accrues.

In Khatri Hotels Pvt. Ltd. & Anr. v. Union of India & Anr.,12 this

Court held that the use of the word ‘first’ between the words ‘sue’

and ‘accrued’, would mean that if a suit is based on multiple

causes of action, the period of limitation will begin to run from the

12 (2011) 9 SCC 126.

19
date when the right to sue first accrues. That is, if there are

successive violations of the right, it would not give rise to a fresh

cause of action, and the suit will be liable to be dismissed, if it is

beyond the period of limitation counted from the date when the

right to sue first accrued.

A three-Judge Bench of this Court in State of Punjab v.

Gurdev Singh,13 held that the Court must examine the plaint and

determine when the right to sue first accrued to the plaintiff, and

whether on the assumed facts, the plaint is within time. The words

“right to sue” means the right to seek relief by means of legal

proceedings. The right to sue accrues only when the cause of

action arises. The suit must be instituted when the right asserted

in the suit is infringed, or when there is a clear and unequivocal

threat to infringe such right by the defendant against whom the

suit is instituted.

Order VII Rule 11(d) provides that where a suit appears from

the averments in the plaint to be barred by any law, the plaint shall

be rejected.

13 (1991) 4 SCC 1.

20

15. Analysis and Findings

We have carefully perused the averments in the plaint read

with the documents relied upon.

15.1 On a reading of the plaint and the documents relied upon,

it is clear that the Plaintiffs have admitted the execution of

the registered Sale Deed dated 02.07.2009 in favour of

Defendant No.1/Respondent No.1 herein.

Para 5 of the plaint reads as :

“(5) …Thus, subject of the aforesaid terms the plaintiffs had
executed sale deed selling the suit property to the opponent
no.1 vide sale deed dated 02/07/2009 bearing Sr.No.
5158…”

The case made out in the Plaint is that even though

they had executed the registered Sale Deed dated

02.07.2009 for a sale consideration of Rs.1,74,02,000, an

amount of only Rs.40,000 was paid to them. The

remaining 31 cheques mentioned in the Sale Deed, which

covered the balance amount of Rs.1,73,62,000 were

alleged to be “bogus” or “false”, and allegedly remained

unpaid.

We find the averments in the Plaint completely

contrary to the recitals in the Sale Deed dated 02.07.2009,

which was admittedly executed by the Plaintiffs in favour

21
of Respondent No.1. In the Sale Deed, the Plaintiffs have

expressly and unequivocally acknowledged that the entire

sale consideration was “paid” by Defendant

No.1/Respondent No.1 herein to the Plaintiffs.

Clauses 3 and 4 of the Sale Deed are extracted

hereinbelow for ready reference : –

“Since the full amount of consideration of the sale as
decided above, has since been paid by you the Vendees to
we the Vendors of this sale deed, for which we the Vendors
of this sale deed acknowledge the same so, we or our
descendants, guardian or legal heirs is to take any dispute
or objection in future that such amount is not received, or is
received less, and if we do so then, the same shall be void
by this deed and, if any loss or damage occurs due to the
same then, we the Vendors of this sale deed and
descendants, guardians, legal heirs of we the vendors are
liable to the pay the same to you the vendees or your
descendants, guardian, legal heirs and you can recover the
same by court proceedings.

(4) We the party of Second part i.e. Vendors of the sale deed
since received full consideration on the above facts, the
physical possession, occupancy of the land or the property
mentioned in this sale deed has been handed over to you
the Vendee of this sale deed, and that has been occupied
and taken in possession of the land or property mentioned
in this sale deed by you the Vendee of this sale deed by
coming at the site and therefore, we the Vendors of this sale
deed have not to raise any dispute in the future that the
possession of the land or the property has not been handed
over to you. …”
(emphasis supplied)

The Sale Deed records that the 36 cheques

covering the entire sale consideration of Rs.1,74,02,000

were “paid” to the Plaintiffs, during the period between

07.07.2008 to 02.07.2009.

22
15.2 If the case made out in the Plaint is to be believed, it

would mean that almost 99% of the sale consideration i.e.

Rs.1,73,62,000 allegedly remained unpaid throughout. It

is, however inconceivable that if the payments had

remained unpaid, the Plaintiffs would have remained

completely silent for a period of over 5 and ½ years,

without even issuing a legal notice for payment of the

unpaid sale consideration, or instituting any proceeding

for recovery of the amount, till the filing of the present suit

in December 2014.

15.3 The Plaintiffs have made out a case of alleged non-

payment of a part of the sale consideration in the Plaint,

and prayed for the relief of cancellation of the Sale Deed on

this ground.

Section 54 of the Transfer of Property Act, 1882

provides as under :

“54. ‘Sale’ defined.—‘Sale’ is a transfer of ownership in
exchange for a price paid or promised or part-paid and part-

promised.”

The definition of “sale” indicates that there must

be a transfer of ownership from one person to another i.e.

transfer of all rights and interest in the property, which

23
was possessed by the transferor to the transferee. The

transferor cannot retain any part of the interest or right in

the property, or else it would not be a sale. The definition

further indicates that the transfer of ownership has to be

made for a “price paid or promised or part paid and part

promised”. Price thus constitutes an essential ingredient

of the transaction of sale.

In Vidyadhar v. Manikrao & Anr.14 this Court held

that the words “price paid or promised or part paid and

part promised” indicates that actual payment of the whole

of the price at the time of the execution of the Sale Deed is

not a sine qua non for completion of the sale. Even if the

whole of the price is not paid, but the document is

executed, and thereafter registered, the sale would be

complete, and the title would pass on to the transferee

under the transaction. The non-payment of a part of the

sale price would not affect the validity of the sale. Once the

title in the property has already passed, even if the balance

sale consideration is not paid, the sale could not be

invalidated on this ground. In order to constitute a “sale”,

14 (1999) 3 SCC 573.

24
the parties must intend to transfer the ownership of the

property, on the agreement to pay the price either in

praesenti, or in future. The intention is to be gathered from

the recitals of the sale deed, the conduct of the parties, and

the evidence on record.

In view of the law laid down by this Court, even if

the averments of the Plaintiffs are taken to be true, that

the entire sale consideration had not in fact been paid, it

could not be a ground for cancellation of the Sale Deed.

The Plaintiffs may have other remedies in law for recovery

of the balance consideration, but could not be granted the

relief of cancellation of the registered Sale Deed.

We find that the suit filed by the Plaintiffs is vexatious,

meritless, and does not disclose a right to sue. The plaint

is liable to be rejected under Order VII Rule 11 (a).

15.4 The Plaintiffs have averred in the plaint that the period

of limitation commenced on 21.11.2014, when they

obtained a copy of the index of the Sale Deed dated

02.07.2009, and discovered the alleged fraud committed

by Defendant No.1.

The relevant extract from the plaint in this regard

is set out hereinbelow :–

25
“(7) … Not only that but also, on obtaining the copy of the
index of the sale deed of the acts committed by the
Opponent No.1, 4, 5 and on obtaining the certified copy of
the sale deed, we the plaintiffs could come to know on 21-
11-2014 that, the Opponent No.1 had in collusion with
Opponent No.4, 5 mentioned the false cheques stated below
in the so called sale deed with intention to commit fraud and
no any consents of we the plaintiffs have also been obtained
in that regard. The said cheques have not been received to
we the plaintiffs or no any amounts of the said cheques
have been credited in accounts of we the plaintiffs. Thus,
the cheques which have been mentioned in the agreement
caused to have been executed by the Opponent No.1, the
false cheques have been mentioned of the said amounts.
Not only that but also, the agricultural land under the suit
had been sold by the Opponent No.1 to the Opponent No.2
Dillipbhai Gordhanbhai Sonani and the Opponent No.3,
Laljibhai Gordhanbhai Sonani on 1-4-2013 for
Rs.2,01,00,000/- as if the said sale deed was having clear
title deeds. On taking out the copy of the said sale deed with
seal and signature on 21-11-2014, it could come to the
knowledge of we the plaintiffs. We the plaintiffs have not
done any signature or witness on the said agreement. The
said agreement is not binding to we the plaintiffs. Since the
said agreement is since null, void and invalid as well as
illegal, therefore, no any Court fee stamp duty is required to
be paid by we the plaintiff on the said agreement and for
that we the plaintiffs rely upon the judgment of the Supreme
Court in A.I.R.2010, Supreme Court, Page No. 2807. …”
(emphasis supplied)

The plea taken in the plaint that they learnt of the

alleged fraud in 2014, on receipt of the index of the Sale

Deed, is wholly misconceived, since the receipt of the index

would not constitute the cause of action for filing the suit.

On a reading of the plaint, it is clear that the cause of

action arose on the non-payment of the bulk of the sale

consideration, which event occurred in the year 2009. The

plea taken by the Plaintiffs is to create an illusory cause of

26
action, so as to overcome the period of limitation. The plea

raised is rejected as being meritless and devoid of any

truth.

15.5 The conduct of the Plaintiffs in not taking recourse to

legal action for over a period of 5 and ½ years from the

execution of the Sale Deed in 2009, for payment of the

balance sale consideration, also reflects that the

institution of the present suit is an after-thought. The

Plaintiffs apparently filed the suit after the property was

further sold by Respondent No.1 to Respondent Nos. 2 and

3, to cast a doubt on the title of Respondent No.1 to the

suit property.

15.6 The Plaintiffs have placed reliance on the Order of the

Collector dated 19.06.2009 with the plaint. The Order

reveals that the permission was granted subject to the

fulfilment of certain conditions. Clause 4 of the permission

states that :

“(4) The purchaser of the land/property, shall have to make
the payment of the price of the land by cheque and its
reference shall require to be made in the Sale Deed.”

If the Plaintiffs had a genuine grievance of non-

payment of the balance sale consideration, the Plaintiffs

27
could have moved for revocation of the permission granted

by the Collector on 19.06.2009.

Clause 6 of the Order provided that :

“(6) On making violation of any of the aforesaid terms, the
permission shall automatically be treated as cancelled and,
separate proceeding shall be taken up for the violation of
the terms and conditions.”

The Plaintiffs did not make any complaint

whatsoever to the Collector at any point of time. The

conduct of the Plaintiffs is reflective of lack of bona fide.

15.7 The present case is a classic case, where the plaintiffs

by clever drafting of the plaint, attempted to make out an

illusory cause of action, and bring the suit within the

period of limitation.

Prayer 1 of the plaint reads as :

“1) The suit property being agricultural land of old tenure of
Revenue Survey No.610 whose block Number is 573
situated at village Mota Varachha, Sub-district : Surat city,
Dis : Surat has been registered by the opponent No.1 of this
case in office of the Sub-Registrar (Katar Gam) at Surat vide
Serial No.5158 in book No.1. Since, the same is illegal, void,
in-effective and since the amount of consideration is
received by the plaintiffs, and by holding that it is not
binding to the plaintiffs and to cancel the same, and since
the sale deed as aforesaid suit property has been executed
by the opponent No.1 to the opponent No.2,3, it is registered
in the office of Sub-registrar, Surat (Rander) on 01/04/2013
vide serial No.443 which is not binding to we the plaintiffs.
Since, it is illegal, void, in-effective and therefore, this
Hon’ble Court may be pleased to cancel the same and this
Hon’ble Court may be pleased to send the Yadi in that
regard to the Sub-registrar, Surat (Karat Gam) and the Sub-
Registrar (Rander) in regard to the cancellation of both the
aforesaid documents.”

28
The Plaintiffs deliberately did not mention the date

of the registered Sale Deed dated 02.07.2009 executed by

them in favour of Respondent No.1, since it would be

evident that the suit was barred by limitation. The prayer

however mentions the date of the subsequent Sale Deed

i.e. 01.04.2013 when the suit property was further sold by

Respondent No.1 to Respondent Nos. 2 & 3.

The omission of the date of execution of the Sale

Deed on 02.07.2009 in the prayer clause, was done

deliberately and knowingly, so as to mislead the Court on

the issue of limitation.

15.8 The delay of over 5 and ½ years after the alleged cause

of action arose in 2009, shows that the suit was clearly

barred by limitation as per Article 59 of the Limitation Act,

1963. The suit was instituted on 15.12.2014, even though

the alleged cause of action arose in 2009, when the last

cheque was delivered to the Plaintiffs.

The Plaintiffs have failed to discharge the onus of

proof that the suit was filed within the period of limitation.

The plaint is therefore, liable to be rejected under Order VII

Rule 11 (d) of CPC.

29
Reliance is placed on the recent judgment of this

Court rendered in Raghwendra Sharan Singh v. Ram

Prasanna Singh (Dead) by LRs.15 wherein this Court held

the suit would be barred by limitation under Article 59 of

the Limitation Act, if it was filed beyond three years of the

execution of the registered deed.

15.9 The Plaintiffs have also prayed for cancellation of the

subsequent Sale Deed dated 01.04.2013 executed by

Respondent No.1 in favour of Respondent Nos. 2 and 3;

since the suit in respect of the 1st Sale Deed dated

02.07.2009 is rejected both under clauses (a) and (d) of

Order VII Rule 11, the prayer with respect to the 2nd Sale

Deed dated 01.04.2003 cannot be entertained.

16. The present suit filed by the Plaintiffs is clearly an abuse of

the process of the court, and bereft of any merit.

The Trial Court has rightly exercised the power under Order

VII Rule 11 CPC, by allowing the application filed by Respondent

Nos. 2 & 3, which was affirmed by the High Court.

In view of the aforesaid discussion, the present Civil Appeal

is dismissed with costs of Rs. 1,00,000/- payable by the Appellant

15 Civil Appeal No.2960/2019 decided on 13.03.2019.

30
to Respondent Nos. 2 and 3, within a period of twelve weeks from

the date of this Judgment.

Pending applications, if any, are accordingly disposed of.

…………………………………J.

(L. NAGESWARA RAO)

…………………………………J.

(INDU MALHOTRA)
July 09, 2020;

New Delhi.

31



Source link