1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION S.C.SUIT NO. 284 OF 1979 Deepak Manmohandas Fadia of Bombay ) Indian Inhabitant residing at 3 Cavel Cross ) Lane, No.4 Kalbadevi Road, ) Bombay 400 002. )..Plaintiff. v/s. 1. M/s. Mala Enterprises a partnership firm ) carrying on business of Contractors and ) Builders at Rehman Building, 2nd floor, 24, ) Veer Nariman Road, Fort, Bombay-400 001. ) ) 2. Dilipsingh Harditsingh, residing at 106 ) Gurunanak Nagar, Andheri, Bombay 400 038. )..Defendants. Mr.A.V.Doijode for Plaintiff. Ms. Sindha Shreedharan for Defendant No.1. Mr.Girish Desai, Sr. Advocate i/b. M/s. Vinod Mistry & Co. for Defendant No.2. CORAM:- A.M.KHANWILKAR, J DATED :- SEPTEMBER 18, 2009. JUDGMENT: 1. This is a suit for specific performance of agreement dated 19th January, 1967 executed between the Defendant No.2 and the Plaintiff and in 2 the alternative for damages and refund of amount paid towards Earnest Money alongwith interest. 2. The Plaintiff asserts that the Defendant No.1 is a partnership firm. The Defendant No.2 was carrying on business as a sole proprietor in the name and style as M/s. Dalipsingh and Associates. The Defendant No.2 executed an agreement in writing dated 19th January, 1967 in favour of the Plaintiff whereby agreed to sell two shops and the Plaintiff agreed to purchase from the Defendant No.2 two shops which were described as Shop Nos. 1 and 2(subsequently re-numbered as Shop No.6A and 6B) admeasuring in the aggregate 500 sq.ft. on the ground floor of building No. 5 for consideration of Rs.25,000/- on terms and conditions specified in the said agreement. The Plaintiff paid sum of Rs.2,000/- towards Earnest Money to the Defendant No.2 and at the request of the Defendant No.2 paid sum of Rs.500/- to M/s. Bawa Enterprises as brokerage in lieu of Earnest Money. The balance consideration amount was to be paid in installments as specified in clause-3 of the agreement. 3. It is the case of the Plaintiff that the plot on which the proposed building was to be constructed by the Defendant No.2 originally belonged 3 to Jim Rusdin Private Limited(hereinafter referred to as the Company). The said Company by leave and license agreement dated 9th June, 1965 gave vacant possession of peace and parcel of land situated at Mouza Ambovli, admeasuring 1,41,812 square yards bearing Survey No.145 and 146 to develop the said land and construct buildings thereon. By the said agreement, the Defendant No.2 agreed to accept and take from the Company a lease together with the buildings to be constructed thereon for a period of 98 years on the monthly rent and on terms and conditions mentioned in the lease agreement. It is the case of the Plaintiff that the Defendant No.2 proposed to construct 2016 flats and shops in 48 buildings on the suit land. In furtherance of the said agreement and in anticipation that the Defendant No.2 would construct the shops in Building No.5 which was one of the building to be constructed on the said land, the Defendant No.2 executed agreement in writing in favour of the Plaintiff dated 19th January, 1967 with regard to the two shops described as Shop Nos. 1 and 2 on the ground floor of the Building No.5. It is the case of the Plaintiff that subsequently by agreement dated 30th August, 1967, the Defendant No.2 agreed to give to one M/s. H.A.Bhati and Associates sublease of plot Nos.2 to 7. According to the Plaintiff, the said M/s. H.A.Bhati and Associates entered the said agreement with the Defendant No.2 with knowledge and 4 notice of the subsisting agreement in favour of the Plaintiff dated 19th January, 1967. In fact, said M/s. H.A.Bhati and Associates agreed to honour the terms and conditions of the agreement in favour of the Plaintiff dated 19th January, 1967. It is stated that subsequently Defendant No.2 terminated and cancelled the agreement of M/s. H.A.Bhati and Associates, who in turn handed over possession of plot Nos. 2 to 7 and 11 to M/s.New India Construction Company. The Defendant No.2 was one of the partner in the said New India Construction Company. The said New India Construction Company proposed to complete the incomplete structures standing on the plot. It is the case of the Plaintiff that the New India Construction Company acquired right in the said property with the knowledge and notice of the Agreement dated 19th January, 1967 made between the Plaintiff and the Defendant No.2 and the Plaintiff's right thereunder. It is stated that said M/s. New India Construction Company caused to issue public notice on 30th January, 1971 that they were completing incomplete structures and requested all the persons who had entered into agreement either with Defendant No.2 or M/s. H.A.Bhati and Associates for acquiring shops and/or flats in the building for consideration on the suit plot Nos. 2 to 7 to give particulars thereof to their advocates. In response to the said public notice, the Plaintiff sent letter dated 12th 5 February, 1971 to the Advocate for the M/s. New India Construction Company stating therein that he has booked two shops for Rs.25,000/- under registered agreement dated 19th January, 1967. The Plaintiff has then stated that later on by Indenture dated 16th May, 1970 was executed between original owner M/s. Jim Rusdin Private Limited as the Lessor, Defendant No.2 as the first confirming party, New India Construction company as the second confirming party and Ashish Cooperative Housing Society Ltd, as the lessee. The said M/s. Jim Rusdin demised to the said Society a portion of land which included plot on which the said building No.5 was under construction for a period of 98 years commencing from 12th May, 1965 on rent and terms and conditions mentioned in the said indenture of lease. The Plaintiff has then referred to the indenture of assignment dated 25th April, 1974 made between the above named Society, M/s. New India Construction Company, M/s. Jim Rusdin Private Ltd. And Defendant No.1 whereunder the said Society at the request of the New India Construction Company assigned the lease in favour of the Defendant No.1 and its partners together with the buildings under construction thereon for consideration and on terms and conditions mentioned therein. The Plaintiff asserts that in or about July, 1978, the Plaintiff came to know that the Defendant No.1 were now completing the construction of building No.5. 6 Therefore, the Plaintiff by his advocate's letter dated 2nd August, 1978 addressed to Defendant No.1 and 2 stated that he had booked two shops in building No.5 under registered Agreement dated 19th January, 1967. The Plaintiff requested the Defendant to advise him the amount which he should pay and confirm his booking of the said shops in building No.5. The Plaintiff states that the Defendant No.1 by letter dated 28th August, 1978 denied that he was aware of any agreement in favour of the Plaintiff and stated that it was not bound by any agreement executed with M/s. H.A.Bhati & Associates or Defendant No.2 in favour of the Plaintiff. Only thereafter, the Plaintiff has approached this Court by way of present suit filed on 15th January, 1979. In the original suit as filed, the Plaintiff has prayed for relief of specific performance of the agreement dated 19th January, 1967. In the alternative, for damages or compensation in the sum of Rs.1,30,000/- alongwith interest thereon at the rate of 15% per annum from the date of the suit till payment or realisation. The Plaintiff further prays for declaration that the Defendants are liable to repay sum of Rs. 2,000/- with interest at the rate of 15% per annum from the date of the suit till payment or realization and till the above amount is paid, a charge be continued on the suit property. The Plaintiff has also prayed that if the Defendants commit default in payment of the above said amount inspite of 7 Court's order on or before specified date, date for repayment be fixed by the Court for the Commissioner for taking accounts to sell the flats described in Exh. C of the Plaint by public auction or private treaty so as to pay the amount to the Plaintiff out of the sale proceeds for satisfaction of the decreetal amount and in case, the sale proceeds were insufficient, liberty be given to the Plaintiff to apply for personal decree against the Defendants. The Plaintiff has also prayed for liberty to bid during the public auction of the property and to set off the purchase price against specified amount. The Plaintiff also took out Notice of Motion for Interim Relief during the pendency of the suit. However, in view of the statement made by the Counsel for the Defendant No.1 that no shops have been constructed and no shops are going to be constructed, no order was passed on the said Motion. Thereafter, the Plaintiff amended the plaint and inserted paragraphs-15A, 15B and 17A in the plaint. Besides, further reliefs have been claimed as a(1), a(2) and (b1), (e1) and (e2). In paragraph-15A, which was inserted by way of amendment, it is stated that the Defendant No.2 had got plan sanctioned from BMC for construction of 48 buildings on the said land including the building No.5 prior to executing registered agreement in favour of the Plaintiff dated 19th January, 1967. Therefore, the Defendant No.1 was bound and liable to construct the said building No.5 in accordance 8 with the said plan. It is the case of Plaintiff that the said plot was provided for construction of shop on the ground floor of the said building No.5. According to the Plaintiff, the Defendant No.1 were bound to construct two shops of the aggregate area of 500 sq.ft on the ground floor of the said building and to sell the same to the Plaintiff. It is further stated that if the Defendant No.2 proposed to construct the building on the said land which are not according to the said sanctioned plan, in that case the Defendant No. 1 is obliged to provide two shops on the ground floor in the shopping complex to be constructed on the said land. Consistent with the said pleadings, the Plaintiff prayed for further reliefs. 4. The suit is resisted by the Defendant No.2 by filing Written Statement. The Defendant No.1 failed to file Written Statement though served. Request made on behalf of the Defendant No.1 for leave to file Written Statement has been rejected by this Court, which order has attained finality. In other words, there is no written statement of Defendant No.1 on record. The Plaintiff examined himself as P.W.1. The Plaintiff filed his affidavit in lieu of examination in chief. Besides filing affidavit of evidence, the Plaintiff filed document alongwith the list of documents. The Plaintiff however was cross-examined on commission. During the cross, 9 objections were raised in respect of certain questions which have been left open to be considered by the Court. Besides, Commissioner has marked the documents as Articles. Since no objection has been raised during the oral arguments, I would treat the documents produced by the Plaintiff as exhibited, as Exh. P-1 to P-16. Moreover, it may not be necessary to delve upon the objections taken during the cross examination of the Plaintiff's witness. The Defendant No.2 although filed Written Statement and also affidavit in lieu of examination in chief, however, on 9th January, 2007, informed the Court that he was not interested in examining any witness. Even the witness whose affidavit in lieu of examination in chief was filed was not offered for cross-examination. In other words, no oral evidence has been produced by the Defendant No.2. Indeed, the Defendant No.2 filed list of documents. However, in absence of oral evidence to prove the same, the said documents cannot be taken on record except to mention that the Deed of Assignment dated 25th April, 1974, which is relied by the said Defendant is also relied by the Plaintiff, which is already marked as Exh. P-11. As “no written statement” order has been passed as against the Defendant No.1, no oral or documentary evidence has been produced at its instance, the Defendant No.1 was however, allowed to cross-examine the Plaintiff's witness. 10 5. Although the Order dated 8th August, 2000 records that issues are framed and settled, neither copy of draft issues or settled issues is available on record. However, it is noticed that on the same day i.e. 8th August, 2000, the Court has passed a speaking order dealing with the stand taken by the Counsel for the Defendant No.2 for framing preliminary issue as to whether the Plaintiff proves that any cause of action existed against the Defendant No.2 for filing the suit. The Court has opined that the said issue cannot be answered as preliminary issue but will have to be answered alongwith the other issues. In this peculiar circumstance, during the course of arguments, the Advocates appearing for the parties were apprised about the issues that I was inclined to frame and settle and they were also informed that the same will be referred to in the present Judgment. Accordingly, following issues would arise for determination. ISSUES FINDINGS (1)Whether the Suit is barred by limitation ? - Yes. (2)Whether the suit is bad for non-joinder of necessary party ? - No. 11 (3)Whether the Plaintiff has any cause of action against the Defendant No.2 ?- Partly yes for claim of Damages/Refund of Earnest Money. (4)Does the Plaintiff proves that there is lis with Defendant No.1 and that the Defendant No.1 is liable to honour the registered agreement dated 19th January, 1967 ? - No. (5)Does the Plaintiff prove that he was always ready and willing to perform his part of the contract ? - No. (6)Whether the Plaintiff or the Defendants have committed breach of contract ? - Plaintiff and Defendant No.2 only. (7)Is the Plaintiff entitled for relief of specific performance of agreement dated 19th January, 1967 ? - No. (8)Is the Plaintiff entitled for allotment of some other shops in one of the building constructed on the land in lieu of the two shops under suit agreement which were to be constructed in building No.5 on the same land ? - No. (9)Is the Plaintiff entitled for relief of damages and refund of Earnest Money amount with interest ? - No. (10)What order ? - Suit dismissed. 12 REASONS ISSUE NO.1 6. The Plaintiff has filed the present Suit on 15th January, 1979 for specific performance of the registered agreement dated 19th January, 1967. As per clause 3 of the said agreement, the Plaintiff agreed to pay consideration for the acquisition of the two shops, to be acquired by him by paying 10% of the sale price as Earnest Money on signing agreement and the balance in instalments of 10% of the sale price on completion of each slab from 1st to 7th respectively and remaining 20% at the time of entering upon possession of the shop, after receiving seven days' notice therefor. According to the Plaintiff, he never received any notice to pay the amount in installment. The Plaintiff has filed present suit for specific performance only after receiving communication from the Defendant No.1 dated 28th August, 1978, whereby the Defendant No.1 denied its liability to be bound by the agreement executed in favour of the Plaintiff by the Defendant No.2. The issue under consideration will have to be answered on ascertaining as to when the refusal to fulfill agreement executed in favour of the Plaintiff was first made known to the Plaintiff. The Plaintiff has relied on 13 communication received from M/s. H.A.Bhati and Associates who according to the Plaintiff acquired right in the property pursuant to agreement in their favour by the Defendant No.2. The said M/s. H.A.Bhati and Associates by their letter dated 27th May, 1970 (Exh. P-6) called upon the Plaintiff to produce original agreement in absence of which it would be difficult to entertain the claim of the Plaintiff in respect of two shops. The said letter produced by the Plaintiff has been marked as Exh. P-6. It is noticed that an endorsement has been made at the bottom of the said letter which reads thus: “We have experienced great trouble as your (other) building number is not correctly given by the previous builders. Some time it is shown as 5 and some time it is shown as 6. It is therefore earnestly necessary to note the exact number of building in which your reservation is made.” The Plaintiff has also produced and relied on another letter received from M/s. H.A.Bhati and Associates dated 17th June, 1970, which has been marked as Exh. P-7. In this letter it is stated that as the proper information has not been supplied nor copy of agreement has been made available. In absence thereof it is not possible to ascertain the claim of the Plaintiff and nothing can bind them to honour the agreement in favour of the Plaintiff. The letter calls upon the Plaintiff to furnish necessary information and the original registered agreement within 3 days. What is significant to note is 14 the next communication received from M/s. H.A.Bhati and Associates dated 14th July, 1970, which is marked as Exh.P-8. The said letter by M/s. H.A. Bhati and Associates in no uncertain terms informed the Plaintiff that they will not be able to honour the agreement entered between the Plaintiff and the Defendant No.2 for sale of shops; as no shops have been sanctioned and constructed in the building, for which they cannot be held responsible. It is not in dispute that this communication is received by the Plaintiff. The Plaintiff relies on this document. It is clear refusal to perform agreement in favour of the Plaintiff. However, the Plaintiff has chosen to file present suit in the year 1979 only, which is hopelessly barred by limitation. Indeed, the Plaintiff has relied on other communications. However, the same are not in the nature of reviving the period of limitation. The period of limitation would start running from the date of first refusal made known to the Plaintiff, which was communicated in most uncertain terms to the Plaintiff by M/s. H.A.Bhati and Associates vide letter dated 14th July, 1970 (Exh. P-8). The Plaintiff has relied on the public notice dated 30th January, 1971 (Exh. P-9) issued by Advocates M/s. Jamshedji Rustomji Devidas and Jani & Merchant for or on behalf of New India Construction Company in whose favour right was created by the Defendants as confirming parties. By this public notice, all interested persons were called 15 upon to submit their claim. The Plaintiff accordingly, registered his claim by sending letter dated 12th February, 1971 (Exh. P-10) recording that he has booked two shops on the ground floor in building No.5 by registered Agreement dated 19th January, 1967 and to confirm that position. However, there is nothing on record to show that the Plaintiff received any favourable response to the said communication or acknowledgment of any of the Defendants or the advocates for New India Construction Company about the Plaintiff’s claim of two shops in building No.5. Therefore, this communication cannot revive the period of limitation. The Plaintiff has then relied on communications sent to Defendants herein and M/s. H.A.Bhati and Associates dated 2nd August, 1978 (Exh. P-12, P-13 and P-14), whereby the Plaintiff called upon the noticee to advise him as to what amount he should pay and to confirm his booking of two shops in building No.5. The Plaintiff has relied on the communication received from the Defendant No.1 dated 28th August, 1978, which is marked as Exh. P-15. However, there is nothing in this communication so as to revive the period of limitation. On the other hand, this letter clearly records that the sender was not aware of any agreement mentioned by the Plaintiff and to note that it was not bound by any agreement executed in his favour by M/s. H.A.Bhati and Associates and M/s. Dalipsing and Associates. The Plaintiff 16 has then relied on the advocate’s letter dated 7th September, 1978 sent to Defendant No.1, which is marked as Exh.P-16, calling upon the Defendant No.1 to give inspection of the documents. Suffice it to observe that none of the communications pressed into service by the Plaintiff would even remotely suggest that any of the Defendants or their predecessors have acknowledged their liability to fulfill the suit agreement after clear intimation by M/s. H.A.Bhati and Associates vide letter dated 14th July, 1970(Exh.P-8), disowning its liability to fulfill the suit agreement and expressing inability to do so, as no shop was sanctioned or to be constructed in building No.5. Thus understood, the cause of action for filing suit for specific performance accrued to the Plaintiff on receipt of the letter dated 14th July, 1970(Exh.P-8) from M/s. H.A.Bhati and Associates. Even during the cross-examination, the Plaintiff has not been able to state as to when he realised that no construction was being carried out in terms of the Agreement and within what time, the possession was to be given as per the agreement. Moreover, from reading of plaint as a whole, it is noticed that the Plaintiff was aware of the fact that the Defendant No.2 had transferred his rights in favour of M/s.H.A.Bhati and Associates after execution of the suit agreement and later on in favour of New India Construction Company and eventually in favour of the Society Ashish 17 Cooperative Housing Society. The Plaintiff having failed to pursue his remedy in right earnest is not entitled for any relief in the present suit as the Suit will have to be held to be hopelessly barred by limitation, having been filed only in January, 1979. ISSUE NO.2: 7. Insofar as the issue of non-joinder of necessary parties, the same arises on the basis of case pleaded by the Plaintiff. The Plaintiff asserts that originally when the suit agreement was executed on 19th January, 1967 in favour of the Plaintiff by the Defendant No.2, the Defendant No.2 had right to develop the property in question. However, later on the Defendant No.2 transferred the said right initially in favour of M/s.H.A.Bhati & Associates and later on in favour of New India Construction Company and eventually to Ashish Cooperative Housing Society. According to the Defendants, on the date of institution of this suit, right to develop and sell property vested in person other than the present Defendants. However, neither the said M/s. H.A.Bhati and Associates nor New India Construction Company or Ashish Cooperative Housing Society have been impleaded as party Defendants in the present suit. However, the argument of the Plaintiff is that in view of the Deed of Assignment dated 25th April, 1974, the Defendant No.1 has 18 finally acquired certain rights as specified therein, for which reason, it was not necessary to join M/s. New India Construction Company or Ashish Cooperative Housing Society as party Defendants. According to the Plaintiff, the relief claimed in the present suit can be and will have to be eventually enforced only against the Defendant No.2 who has executed registered agreement in favour of the Plaintiff to sell two shops in building No.5 and the Defendant No.1 who has been eventually assigned the right to develop and sell the constructed flats/shops in the suit property. There is force in this submission. Thus understood, the suit need not be dismissed on the ground that the same suffers from non-joinder of necessary parties. ISSUE NOS. 3 AND 4. 8. The Plaintiffs case is that the suit agreement was executed in his favour by Defendant No.2 agreeing to sell two shops described as Shop Nos. 1 and 2 in building No.5. The Plaintiff however, accepts that the Defendant No.2 later on created right in favour of M/s. H.A.Bhati and Associates. As a matter of fact, the Plaintiff has entered into correspondence with the said M/s. H.A.Bhati and Associates. The said firm however, after considering the claim of the Plaintiff informed the Plaintiff by letter dated 14th