1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION SECOND APPEAL NO.27 OF 1991 Runja Khandu Gaware, Decd., Thru his Legal Heirs : 1a. Bajirao Runja Gaware 1b. Bakerao Runja Gaware 1c. Suryabhan @ Suresh R. Gaware 1d. Tarabai Prakash Rajole 1e. Hirabai Dyaneshwar Gaikwad 1f. Mirabai Dyaneshwar Gaikwad 1g. Krishnabai Runja Gaware 1(a) to 1(c) and 1(f) are R/o. Pachora, Vani, Tal. Niphad, Dist. Nashik 1(d) and 1(e) are R/o. Karanjigaon, Tal. Niphad, Dist. Nashik 1(g) R/o. Bhagur, Gaikwad Galli, Tal. and Dist. Nashik. ... Appellants Versus Mhalsabai Dagu Gadak ... Respondent ALONGWITH SECOND APPEAL NO.429 OF 1990 Mhalsabai Dagu Gadak ... Appellant Versus Runja Khandu Gaware, Decd., Thru his Legal Heirs : 1a. Bajirao Runja Gaware 1b. Bakerao Runja Gaware 1c. Suryabhan @ Suresh R. Gaware 1d. Tarabai Prakash Rajole 1e. Hirabai Dyaneshwar Gaikwad 1f. Mirabai Dyaneshwar Gaikwad 1g. Krishnabai Runja Gaware 1(a) to 1(c) and 1(f) are R/o. Pachora, Vani, Tal. Niphad, Dist. Nashik 2 1(d) and 1(e) are R/o. Karanjigaon, Tal. Niphad, Dist. Nashik 1(g) R/o. Bhagur, Gaikwad Galli, Tal. and Dist. Nashik. ... Respondents Mr. R.M. Haridas i/b. Mr. Pramod N. Joshi for the Appellants in S.A. No.27 of 1991 and for the Respondents in S.A. No.429 of 1990. Mr. M.S. Karnik for the Respondent in S.A. No.27 of 1991 and for the Appellant in S.A. No.429 of 1990. CORAM: SMT.NISHITA MHATRE, J. DATED: 2 ND SEPTEMBER, 2009. JUDGMENT : 1. These two Second Appeals have been heard together since the facts involved in the Appeals are the same. For the sake of convenience, the parties will be referred to as they were before the trial court i.e. the Civil Judge, Junior Division, Pimpalgaon Baswant in Regular Civil Suit No.3 of 1978. 2. The plaintiff filed a suit for a perpetual injunction contending that there was an agreement of sale dated 10th April, 1974 in her favour executed by the defendant. The suit was filed on 21st January, 1978. The plaintiff then sought an amendment and prayed that the suit be decreed for specific 3 performance of the agreement of sale dated 10th April, 1974. The amendment was allowed and the plaint was amended on 25th January, 1984. The suit property which the plaintiff claims is Gat No.445 admeasuring 1 Hector, 98-R and which the plaintiff says was sold to her by the defendant for Rs. 6,000/-. 3. The defendant filed his written statement and also a counter claim for possession of the suit property. 4. The trial court dismissed the suit by observing that the case for specific performance of the agreement of sale dated 10th April, 1974 has not been proved. However, the trial court held that the plaintiff had proved that she had been delivered possession of the suit land under the agreement dated 10th April, 1974. The trial court further held that the said agreement was only a loan transaction and that the property was a security for the loan transaction. The defendant s counter claim was allowed and it was held that he was entitled to possession of the suit land. The contention of the plaintiff that the defendant s counter claim had been filed beyond the period of limitation was not 4 accepted. 5. The plaintiff preferred Civil Appeal No.10 of 1986 against the aforesaid Judgment and Order of the trial court. The appellate court dismissed the claim of the plaintiff for specific performance of the agreement of sale. While doing so, the appellate court also dismissed the counter claim of the defendant. The plaintiff has filed Second Appeal No.429 of 1990 against the rejection of her prayer for specific performance of the agreement of sale, whereas the defendant has filed Second Appeal No.27 of 1991 against the rejection of his counter claim. 6. The substantial questions of law which are involved in the present Appeals are : (a). Whether the agreement dated 10th April, 1974 was an agreement of sale or a loan transaction in which the suit land was the security against the loan of Rs.6,000/-? (b). Whether the suit which was based on the occurrence of a contingency, namely, obtaining permission from the Authorities under the Urban Land Ceiling Act, could be barred by the 5 Law of Limitation when time was not the essence of the contract ? (c). Whether in view of the provisions of Section 53A of the Transfer of Property Act, the plaintiff s possession of the suit land must be protected ? 7. Certain facts which will have to be borne in mind while deciding the aforesaid questions. 8. In 1973, the southern block of the suit land was sold to the plaintiff by the defendant s father. In 1974, the northern block was sold to the plaintiff, according to her, under the agreement of sale for which she had paid Rs.6,000/- as the consideration in 1974. Admittedly, in the year previous to the transaction, the adjacent land was sold for Rs.13,000/-. According to the plaintiff, the value of the suit land had depreciated in view of the fact that out of 98-Ares which was sold to her, only 50-Ares to 52-Ares were consisted of arable land. About 20-Ares to 25-Ares, according to the plaintiffs, were shadowed by mango trees and, therefore, not cultivable. 20-Ares were occupied by a public way and hence the plaintiff paid the amount 6 of Rs.6,000/- to the defendant in 1974 when the agreement of sale was executed. She was then put in possession of the suit land. Initially, the suit had been filed only for a perpetual injunction. In the written statement it was contended by the defendant that the plaintiff had forcibly obtained possession of the suit land. It was further contended that the agreement of 1974 was not an agreement of sale but only a loan transaction under which the suit land was held as security by the plaintiff for repayment of the loan. The plaintiff then applied for amending her suit and claimed specific performance of the agreement of sale. That application having been allowed, the defendant filed a counter claim contending that he was entitled to possession of the suit land. 9. Mr. Karnik, the learned Advocate appearing for the plaintiff-appellant in Second Appeal No.429 of 1990, submits that both the courts below have erroneously dismissed the suit for specific performance on the ground that it was not filed within the period of limitation. He points out that the limitation period for a suit for specific performance runs from the date of refusal by the defendant to perform his part of the contract or 7 from the date of the accrual of the cause of action. He submits that the present case is not covered by the limitation prescribed under Article 54 of the Limitation Act. According to the learned Advocate, the question of limitation does not arise as the plaintiff had paid the consideration and was given possession of the suit land and no benefit would accrue to the plaintiff by filing suit beyond the period of limitation. He urges that the limitation prescribed under Article 54 would be applicable in a case where the defendant denies performance of the contract or evades performance of the contract but cannot arise when the agreement of sale itself is denied as in the present case. According to the learned Advocate since the defendant had not accepted the agreement of 1974 to be an agreement of sale, the question of calculating the limitation under Article 54 of the Limitation Act does not arise. He buttresses his submissions by relying on the judgments of the Supreme Court in the case of Gunwantbhai Mulchand Shah and Ors. vs. Anton Elis Farel and Ors. [Reported in (2006) 3 SCC 634] and in the case of Panchanan Dhara & Ors. vs. Monmatha Nath Maity [reported in [2006] 5 SCC 340]. Both these judgments deal with Article 54 of the Limitation Act, 1963. 8 10. Mr. Haridas, appearing for the respondents in Second Appeal No.429 of 1990, who are the legal heirs and representatives of the defendants, on the other hand, submits that three witnesses have been examined before the trial court and their evidence supports the case of the defendant that the transaction between the plaintiff and the defendant was a loan transaction in which the suit property owned by the defendant was kept as a security with the plaintiff till repayment of the loan. He points out that the suit was amended three years after its institution. He submits that limitation would not relate back to the date of filing of the suit, but would start from the date of the amendment. He points out that the claim for specific performance of the contract had not been raised within the period of limitation. He relies on the judgment of the apex court in the case of T.L. Muddukrishana & Anr. vs. Lalitha Ramchandra Rao [reported in (1997) 2 SCC 611]. By relying on the judgment of the Supreme Court in the case of Dnyanoba Bhaurao Shemade vs. Maroti Bhaurao Marnor [reported in AIR 1999 SC 864], he submits that when two courts below are of the view that the transaction between the plaintiff and the defendant was not that of an 9 agreement of sale but was a loan transaction, no substantial question of law arises for interpreting the document of 10th April, 1974. 11. As a last resort, Mr. Karnik for the plaintiff submits that even assuming the suit for specific performance of the contract was barred by limitation, the counter claim for possession of the suit land could not have been allowed in view of the provisions of Section 53A of the Transfer of Property Act. He submits that the provisions of law relating to part performance of a contract are very clear and admit of no ambiguity. He points out that since the plaintiff had paid the consideration and had been put in possession of the suit property, there was part performance of the contract and the counter claim of the defendant was for possession of the suit property has rightly been dismissed by the appellate court. 12. The submission of the learned Advocate for the plaintiff that the suit for specific performance of the contract could not have been barred on the ground of limitation is unsustainable. The learned Advocate urges that since there was no denial for specific performance of the contract of 10th April, 10 1974, there was no requirement of the suit having to be filed within three years of the plaintiff giving notice for the performance of the contract. At first blush, this submission is attractive. However, on further consideration of this submission, in my view, it is unsustainable. Although the defendant had not denied or refused to perform his part of the agreement dated 10th April, 1974, it could not be said that there was no denial by him of the performance of the agreement since he had, in fact, denied the existence of an agreement for sale. The vary fact that he had denied the existence of the agreement of sale would indicate that the plaintiff had notice that the performance was refused. 13. Mr. Karnik s next submission is that the suit could not have been said to be barred by limitation since it was for the defendant to obtain necessary permissions from the Authorities under the Urban Land Ceiling & Regulation Act, upon which contingency the plaintiff s title to the suit property could be perfected. He submits that under the agreement of 10th April, 1974 since it was the defendant s duty to obtain the permissions, the issue of limitation could not arise as the defendant had done nothing to obtain the aforesaid 11 permissions. In the case of Panchanan Dhara & Ors. (supra), the Supreme Court has observed that in a given case the vendor should not be permitted to take advantage of his own wrong in not taking steps to comply with statutory compulsions and then raise a plea of limitation. However, in the case of Gunwantbhai Mulchand Shah (supra), the Supreme Court has observed as follows : 12. The question as to how long a plaintiff, even if he had performed the whole of his obligations under an agreement for sale, in which a time for performance is not fixed, could keep alive his right to specific performance and to come to court after 29 years seeking to enforce the agreement, may have also to be considered by the court especially in the context of the fact that the relief of specific performance is discretionary and is governed by the relevant provisions of the Specific Relief Act. But again, these questions cannot be decided as preliminary issues and they are not questions on the basis of which the suit could be dismissed as barred by limitation. The question of limitation has to be decided only on the basis of Article 54 of the Limitation Act and when the case is not coverned by the first limb of that article, normally, the question of limitation can be dealt with only after evidence is taken and not as a preliminary issue unless, of course, it is admitted in the plaint that the plaintiffs had notice that performance was refused by the defendants and it is seen 12 that the plaintiffs approached the court beyond three years of the date of notice. Such is not the case here. 14. In the present case it must be borne in mind that there is a concurrent finding of fact recorded by both the courts below that it is impossible to accept the contention of the plaintiff that the agreement of 1974 was an agreement of sale and not a loan transaction. Both the courts below have for cogent reasons discarded the testimony of the plaintiff in which she has tried to establish that this was an agreement of sale. The courts below were impressed by the fact that in the previous year the adjacent land had been sold for Rs.13,000/-, whereas the plaintiff claimed to have purchased the suit land for Rs.6,000/-in the subsequent year which according to both the courts below was inconceivable. The courts below have observed that it was impossible to believe that the property prices would fall to such a level in a period of one year, even assuming that part of the land was not cultivable. Both the courts below have held, for good reasons that the agreement is a loan transaction in which the suit property was used as the security for the loan of Rs.6,000/-. Therefore, 13 the question of the plaintiff getting any relief of specific performance of the agreement of 10th April, 1974 on the ground that it is an agreement of sale does not arise. The submissions of Mr. Karnik advanced on the premise that the agreement of 10th April, 1974 is an agreement of sale are therefore unsustainable. 15. The only issue which now remains is whether the defendant is entitled to the relief sought in the counter claim i.e. for possession of the suit property. In my opinion, since the appellate court had observed that this was not an agreement of sale but a loan transaction in which the property of the defendant had been kept as a security with the plaintiff, the appellate court should have granted the relief sought by the defendant in the counter claim. The reason for denying him the possession, as stated by the appellate court, is unsustainable. The appellate court has observed that a counter claim can be filed only in respect of a money suit and not for any other reliefs. This finding of the appellate court, in my opinion, runs counter to the provisions of Order 8 Rule 6A. A counter claim can, undisputedly, be filed in other suits besides money suits and the defendant can always be granted relief 14 in the counter claim. Mr. Karnik for the plaintiff very fairly did not support this finding of the appellate court. However, he submits that in view of Section 53A of the Transfer of Property Act, the plaintiff would be entitled to retain the suit property. 16. This submission has been advanced by Mr. Karnik on the presumption that the agreement is for transfer of the suit property. As both the courts below have rightly held, concurrently, that there was no agreement to transfer the suit property for consideration, the question of part performance of the contract would not arise. The transaction between the two parties was a plain and simple loan transaction and therefore Section 53A of the Transfer of Property Act is not attracted. 17. In the circumstances, the Second Appeal No.429 of 1990 filed by the plaintiff is dismissed. Second Appeal No.27 of 1991 filed by the defendant is allowed. 18. On the application made by the learned Advocate for the plaintiff, this order is stayed for a period of eight weeks. .......