- 1 - rng IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.2617 OF 2009 in SUIT NO.357 OF 2008 M/s C.M.V.Enterprises .. Plaintiff vs M/s V.N.Patil & Co & ors .. Defendants .. Mr.Darius Zaiwalla, Sr.Advocate i.b. M/s Pathak & Co for Plaintiff to show cause Mr.Rajiv Narula a/w Mr.A.Das i.b M/s Jhangiani Narula & Asso. for Defendants CORAM: R.V.MORE,J DATE: November 12, 2009 P.C. 1. Heard Mr.Zaiwalla, learned senior counsel for the plaintiff and Mr.Narula, learned counsel for the defendants. 2. The Notice of Motion is taken out by the defendants for rejection of the plaint under Order VII Rule XI (d) of the Code of Civil Procedure, 1908. The plaintiff filed the above suit for a declaration that the agreement dated 24th June 1995 is valid, subsisting and binding upon the defendants. The plaintiff also claims a specific performance of the said agreement. The defendant no.1 is a partnership firm of which defendant nos. 2 to 6 are partners. Defendant nos. 7,8,9 and 10 are owners of the - 2 - property which were given to the defendant no.1 for development. A Memorandum of Understanding was entered into between the plaintiff and the defendant no.1 under which development rights in respect of 15000 sq.ft FSI out of the total property was given to the plaintiff for a consideration of Rs.750/- per sq.ft. The total consideration of the area of 15000 sq.ft FSI was arrived at Rs.1,12,50,000/-. The plaintiff agreed to pay amount of Rs.56,25,000/- on execution of the document, Rs. 25,00,000/- after 45 days from the date of issuance of IOD by the Municipal Corporation of Greater Bombay and Rs.25,00,000/- after 45 days from the issuance of commencement certificate upto plinth level in respect of side wings by the Municipal Corporation. It is the case of the plaintiff that they have already paid Rs. 56,25,000/- to the defendant no.1. And further amount of Rs.25,00,000/- was to be paid after a period of 45 days from the date of issuing IOD. The defendant nos. 1 to 6 however instead of complying with the condition of the said IOD threatened the plaintiff to terminate the said agreement by letter dated 22.2.1999. This letter was replied by the plaintiff. However, again the defendants issued letter dated 31.3.1999 and called upon the plaintiff to pay an amount allegedly due under the said agreement without taking any steps for making out a marketable title to the said property and obtaining approval to the amended plan so that the said agreed FSI - 3 - of 15000 could be consumed. 3. The plaintiff ultimately by advocate’s letter dated 17.9.2004 called upon the defendant no.1 to comply with the terms and conditions of the said agreement. The defendants replied this letter of 25.9.2004 and denied the statement made in the plaintiff’s letter. The plaintiff thereafter learnt that the defendant nos. 1 to 6 are negotiating with other developers for development of the property and as such they were constrained to file the suit for reliefs mentioned above. As stated earlier the defendants have taken out the present chamber summons for rejection of the plaint under Order VII Rule XI of the Civil Procedure Code. 4. Mr.Narula, learned counsel for the defendants took me through the pleadings in the suit and provisions of Articles 54 and 55 of the Limitation Act. He also took me through the suit agreement. Mr.Narula submitted that the plaintiff’s case for the purpose of limitation falls in second part of Article 54 of the Limitation Act. In order to substantiate this submission, he invited my attention to the pleadings of the plaintiff that the IOD was sanctioned on 9.12.1997 and thereafter defendant nos. 1 to 6 wrote a letter to the plaintiff on 22.2.1999 demanding an amount of Rs.25,00,000/-. He also pointed out the letter dated 16.3.1999 ann3exed to the plaint - 4 - under which ultimatum was given to the plaintiff to pay the above amount of Rs.25,00,000/- within eight days or else the contract will be terminated. Similar letter dated 31.3.1999 was written by the defendant no.1 to the plaintiff was also relied upon. He submitted that the plaintiff was knowing in the month of March 1999 that defendant nos. 1 to 6 have refused performance of the agreement. However, the present suit is filed in 2006 and therefore the same is hopelessly barred. He also relied upon judgments in (i) (2007) 5 SUPREME COURT CASES 614 Hardesh Ores (P) Ltd vs Hede and Company (ii) (2006) 2 SUPREME COURT CASES 428 (R.K.Parvathraj Gupta vs K.C.Jayadeva Reddy) and (iii) (1997) 10 SUPREME COURT CASES 66 (Venkappa Gurappa Hosur vs Kasawwa C/o Rangappa Kulgod). 5. Mr.Zaiwalla, learned senior counsel per contra submitted that the plaintiff’s case falls in First Part of Article 54 of the limitation Act. He submitted that the date fixed for the performance was the date on which defendant nos. 1 to 6 will get IOD for 15000 sq.ft FSI. This event has not occured as admittedly IOD was issued only for 12500 sq.ft FSI. He submitted that an amount of Rs.25,00,000/- which the plaintiff agreed to pay to the defendant nos. 1 to 6 was depending on the performing of reciprocal of promises and if the promise is not fulfilled by the defendant nos. 1 to 6 limitation will - 5 - not begin merely because defendant nos. 1 to 6 threatened to terminate the agreement. 6. I have considered the submissions of both the learned counsel and have gone through the plaint. 7. The learned counsel appearing for the respective parties does not dispute the applicability of the provisions of Article 54 of the Limitation Act. The dispute between them is about applicability of Part I or Part 2 of Article 54 of Limitation Act. According to the plaintiff, Part I and according to defendant nos. 2 to 6 Part II is applicable in the present case. It is advisable to reproduce Article 54 of the Limitation Act which reads as follows : -------------------------------------------------------- Description of suit Period of Time from which limitation period begins to run Forspecific Three years The date fixed for performance of a the performance,or contract if no such date is fixed, when the plaintiff has notice that perfor- mance is refused -------------------------------------------------------- A plain reading of the said Article reveals that limitation of 3 years is provided for suits for specific performance and the time of limitation begin to run from the date fixed for the purpose or if no such date is - 6 - fixed, when the plaintiff noticed that performance is refused. The language of Article 54 further makes it clear that Part II of Article 54 is applicable only in the event of non-applicability of Part I. If Part I is applicable then obviously Part II has no application. 8. The suit agreement is annexed at Exhibit 13. The relevant terms and conditions are reproduced in para 7 of the plaint which is reproduced as follows: 7ome of the relevant terms and conditions agreed under the said agreement as as follows: “1. For consideration mentioned in clause (3) herein below agreed to be paid by the Sub- Developers to the Developers have agreed to grant the right of development to develop “B” wing consisting of ground plus six storeys or stilt plus seven storeys in the proposed building shown with red colour wash on the plan annexed (hereinafter referred to as ‘ the said wing) by consuming 15000 sq.ft F.S.I. (Approx.) only, out of the said total F.S.I. in respect of the said lands more particularly described in the schedule hereunder written and delineated on the plan thereof hereto annexed and thereon surrounded by red colour wash in accordance with the plans and specifications to be approved and sanctioned by the Bombay Municipal Corporation and also to sell on ownership basis, the flats/shops in the said wing to be constructed on the said lands to the prospective purchasers thereof and to enter into Agreement for sale on ownership basis with such prospective flats/shop purchasers. “ 3. The developers have represented to the Sub- Developers that as per Shri H.A.Mehta common architect for both the parties herein in respect of the said lands total 40000 sq.ft. F.S.I. (Approx) is available for development and out of which the developers have agreed to grant right of development in respect of 15000 sq.ft. F.S.I.only. On the basis of the same the consideration mentioned in clause no.(1) is fixed at Rs.750/- per - 7 - sq.ft (Rs.Seven hundred fifty only). As per the plans tentatively prepared for the said wing comprising of ground plus six or stilt proposed to be consumed. IN the event the total F.S.I. Is increased or decreased in respect of the said wing to the4 extent of five percent the consideration shall be proportionately increased or decreased. However it is made clear that in any event the Sub-Developers shall not be entitled to consume more than 15000 sq.ft or 5 % increased or decreased in respect of the said wing. “ 4. The said consideration of Rs.1,12,50,000/- (Rupees One crore twelve Lakh fifty thousand only) shall be paid as under : (a) Rs.56,25,000/- (Rupees Fifty six Lakh Twenty Five Thousand only) paid on the execution of these presents (the payment and receipt whereof the Developers do hereby admit and acknowledge), (b) Rs.25,00,000/- (Rupees Twenty five lakh only) shall be paid within a period of forty five days from the date of issuance of I.O.D. by the Municipal Corporation of Greater Bombay, (c) Rs.25,00,000/- (Rupees Twenty five lakh only) shall be paid within a period of forty five days (from) issuance of commencement certificate upon the plinth level in respect of the said wing by the Municipal Corporation of Greater Bombay, d) The balance sum of Rs.6,25,000/- (Rupees Six Lakh Twenty five thousand only) being five percent of total consideration shall be paid on obtaining 230A A Income Tax Clearance. “ 5. All the expenses for obtaining I.O.D. And Commencement Certificate from the Municipal Corporation of Greater Bombay up to the Plinth level for the said - 8 - wing and construction of road up to the said lands,street light, sewerage, etc premium for balcony, staircase shall be borne by the Developer only. “ 7. All the conditions which may be imposed by the Municipal Corporation of Greater Bombay for constructing building for Maternity Home plus Dispensary shall be complied with by the Developers including to hand over the same to the Municipal Corporation of Greater Bombay and further the necessary bank guarantee etc required to be given to the Municipal Corporation of Greater Bombay shall be given by the Developers. “ 9. The Sub-Developers are aware that the developers have appointed Shri H.A.Mehta Architect for the aforesaid project. A tentative plan of the building comprising of four wings proposed to be constructive by consuming the said F.S.I. Has been handed over by the Developers to the Sub-Developers. The Developers shall be entitled to amend and/or modify the plans provided that by such amending or modifying the plans, the said F.S.I. Of 15000 sq.ft shall not be effected. “ It can be seen from the above terms and conditions that out of total 40000 sq.ft F.S.I. Which are available for development to the defendant no.1 the development rights in respect of 15000 sq.ft F.S.I. Only is granted - 9 - to the plaintiff for consideration of Rs.750/- per sq ft. The plaintiff was also entitled to consume the said F.S.I. For construction of B-1 building comprising of ground plus 6 floors. It was specifically made clear that in any event the plaintiff shall not be entitled to consume more than 15000 sq.ft or 5 % increase or decrease in respect of the said wing. 9. It is the specific case of the plaintiff that an amount of Rs.25,00,000/- was agreed to be paid to the defendant no.1 after issuance of IOD by the corporation allowing the plaintiff to consume 15000 sq.ft of F.S.I. It is not disputed that the defendant nos. 1 to 6 obtained I.O.D. On 9th December 1997 under which the corporation sanctioned inter alia plan for B wing consisting of ground plus 5 storeys thereby only 12500 sq ft of FSI can be consumed in the said B wing. The plaintiff has clarified itself that in para 15 of the plaint which reads as under : 15. The Plaintiffs submit that unless the defendant nos. 1 to 6 will get amendment to the plan of ‘B’ wing consisting of ground and six upper storeys or stilt and seven upper storeys allowing the plaintiffs to consume 15000 sq. feet of F.S.I. At the original location of the said wing sanctioned from the Municipal Corporation and obtain I.O.D. In respect of such plan. Defendant nos. 1 to 6 are not entitled to call upon the plaintiffs to make payment of any further amount and/or to determine or terminate the said agreement. “ - 10 - 10. The plaintiff reliably learnt that defendant nos. 1 to 6 are negotiating with other developers for development of the said property and therefore by their advocate’s letter dated 17.9.2004 called upon defendant nos. 1 to 6 to comply with the terms and conditions of the said agreement particularly to get plans sanctioned in respect of construction of B wing so as to allow the plaintiff to consume 15000 sq ft out of the said property. 11. The Apex Court in Ramzan vs Smt.Hussaini reported in AIR 1990 SUPREME COURT 529 has interpreted the phrase “ date fixed for the performance” appearing in Article 54 of the Limitation Act. While interpreting this phrase the Apex Court held that mention of a particular date from the calender indeed is not necessary and it would be sufficient if the basis of calculation which makes the date of performance certain is mentioned in the deed. 12. In the light of the above decision of the Apex Court in Ramzan’s case supra, I find substance in the submission of the learned counsel for the plaintiff that the date was fixed for performance of the contract namely date of issuance of I.O.D. by the Corporation allowing the plaintiff to consume 15000 sq.ft of F.S.I. The defendant nos. 1 to 6 admittedly failed to get issued I.O.D. For 15000 sq.ft of FSI and therefore in my view, - 11 - the defendants on the basis of letter dated 16.3.1999 and 31.3.1999 cannot claim that limitation began on the date of issuance of the said letters. Had the case of the plaintiff is covered under Part II of Article 54 of the Limitation Act probably then defendant nos. 1 to 6 could have relied upon those letters to contend that the suit filed in 2006 is barred by limitation. The scope of Order VII Rule 11 of the C.P.C. is narrow. Under this provision plaint can be rejected on various grounds. In the present case, we are concerned with clause (d) under which plaint can be rejected only when the suit appears from the statement in the plaint to be barred by any law. Thus, while considering an application under Order VII Rule 11 of the C.P.C. Only contents of the plaint are required to be seen and merits of the said contents cannot be gone into. In the light of the above discussion, I find that the plaint cannot be rejected under the provisions of Order VII Rule 11 (d) of the C.P.C. 13. Now, I will consider the authorities cited by Mr. Narula learned counsel for the defendants. In Hardesh Ores’s case supra the court held that : “law” within the meaning of Order 7 Rule 11 (d) of the C.P.C. must include the law of limitation as well. The - 12 - Apex Court in R.K.Parvathraj Gupta’s case supra held that a suit for specific performance of a agreement in terms of Article 54 should have been filed within 3 years from the date of expiry of 15 days from the date of receipt of the said notice of receipt of notice. The Apex Court in Venkappa‘s Gurappa’s case supra held that once limitation begun to run, it runs its full course and mere issuance of notice does not stop the running of limitation period. There is no dispute about the above propositions laid down by the Supreme Court. The ratio of these decisions does not take the defendant’s case any further 14. Taking an over all view of the matter, I find no substance in the notice of motion and the same is accordingly dismissed. R.V.More, J - 13 - - 14 - - 15 - - 16 - - 17 -