No period of limitation can be extended after the claim gets barred by limitation. A specified period is allowed by law to parties to sue to afford inherent protection to parties to a contract who have not been sued within the period of limitation to deal with their
properties and transaction with further parties thereafter. Limitless extension of time to sue after the period specified in law expires would cause tremendous prejudice and injustice to parties who seek to deal with their own properties after contracting with a party who has allowed these rights to lapse by limitation. The very expression "Limitation" implies limitation of time to sue. The right to sue cannot go on endlessly. If that were allowed a very strange, unjust consequence would arise. No party would be able to enter into a transaction even after the period of limitation in Law expired if the earlier transaction did not materialise. This would constitute a impediment on the Defendants' vested rights.
18. Consequently, the statements in the plaint must be read as a whole. Reading such statements the cause of action which initially accrued to the Plaintiffs must be seen. How the Plaintiffs sought to enforce their legal rights within the period of limitation from the date of the accrual of such cause of action has to be seen. Further statements in the plaint relating to whatever may have transpired between the Defendants and further contracting parties after their claim in favour of the Plaintiffs got barred by limitation cannot show the extension of the period of limitation
M/S. Anand Laxmi Enterprises vs Vasant Balu Mhatre & Ors on 30 September, 2008
1. This Chamber Summons is for rejecting the plaint as barred by the Law of Limitation.
2. The Chamber Summons is taken out under the provisions of Order VII Rule 11(d) of the C.P.C. The said Rule runs thus:
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11.Rejection of plaint - The plaint shall be rejected in the following cases:-
(a). .....
(b). .....
( c ). .....
(d). where the suit appears from the statement in the plaint to be barred by any law".
3. This Suit is stated to be barred by the Law of Limitation. Consequently, the statement in the plaint would have to be read to see whether this Suit appears to be barred by the law of limitation.
4. The Plaintiffs entered into an agreement with the Defendants 1 to 11 on 30th April, 1989. The Plaintiffs were to develop the property of Defendants 1 to 11. The property was tenanted. The Plaintiffs were to settle with the tenants 3
and pay the consideration under the contract. The relevant part of the averments in the plaint read as a whole must be considered parawise.
a) Paragraph 12: no progress could be made with the tenants.
b) Paragraph 13: the Plaintiffs were not in a position to develop the suit premises despite having incurred substantial costs and expenses.
c) Paragraph 15: in July / August 2002 Defendants Nos.1 and 2 considered to develop their properties. The Defendants requested Plaintiffs to relinquish their rights under the agreement dated 30th April, 1989. Certain meetings were held between the parties.
d) Paragraph 16: it was mutually agreed that Rs.11 lakhs be refunded to the Plaintiffs along with the costs and expenses incurred by the Plaintiffs pursuant to the agreement for development dated 30th April, 1989 in consideration of which the Plaintiffs will release and relinquish all their rights and interests in the suit property. The Plaintiffs agreed to accept Rs.11 lakhs by way of settlement. The Defendants have not paid that amount or any part thereof.
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e) Paragraph 17: in February, 2005 the Plaintiffs were shocked to see the structure on the suit property having been demolished and a board of Defendant No.13 being put up on the suit property. f) Paragraph 18: the Plaintiffs called upon the Defendants to stop the construction and that they are ready and willing to perform their part of the agreement dated 30th April, 1989. They claim that the further agreement between the Defendants 1 and 2 and Defendant No.13 is not binding upon them. g) Paragraphs 18 to 23 show the correspondence between the Attorneys.
h) Paragraph 23: the Defendants have failed and neglected to pay Rs.11 lakhs as per the agreement entered into in August, 2002, which fact was recorded in letter dated 10th June, 2006 stating that the Plaintiffs'
the Plaintiffs would adopt proceedings for recovery of that amount.
i) Paragraph 26: takes exception to the Deed of Conveyance executed by Defendants 1 and 2 and Defendant No.12.
j) Paragraph 28: the Defendants failed and neglected to pay Rs.11 lakhs which the Plaintiffs are now not bound to accept. The Plaintiffs claim damages as 5
mentioned therein.
k) Paragraph 29: the Advocate for Defendants assured to pay, but the Defendants 1 and 2 did not pay the said amount.
l) Paragraph 30: the Plaintiffs could not develop the property due to the unreasonable attitude of the Defendants and occupants.
m) Paragraph 31: the construction put up by the Defendant No.13 is unauthorised and illegal and without right of development and construction. n) Paragraph 32: shows the Plaintiffs' right under the
initial agreement dated 30th April, 1989 which the Plaintiffs seek to specifically enforce. o) Paragraph 36: shows the damages claimed by the Plaintiffs.
p) The rest of the paragraphs show submissions with regard to ancillary reliefs.
5. The Plaintiffs' prayers are essentially two fold: for declaration of the validity of the agreement dated 30th April, 1989, executed 18 years prior to the filing of the Suit and for damages upon the breach of that agreement, which came to be claimed upon the failure and neglect to pay under the agreement entered into in August, 2002. The remaining 6
reliefs are ancillary to the aforesaid reliefs. Though a feeble attempt to show readiness and willingness to perform the Plaintiff' part of the agreement dated 23rd April, 1989 is s
made, the suit does not claim specific performance of that contract.
6. Upon reading the statement in the plaint it is clear that the Plaintiffs initial rights commenced under the agreement dated 30th April, 1989. The Plaintiffs have not shown breach of that agreement by the Defendants in any part of the plaint. The Plaintiffs have in fact shown how they themselves could not perform their part of the agreement - because they could not settle with the tenants and occupants.
7. The plaint further shows that pursuant to an oral agreement in July/August 2002 the Plaintiffs were to be paid off Rs.11 lakhs and they were to relinquish their rights in the suit property. This was to be in full and final settlement of the Plaintiffs claim in the suit property. This oral agreement would tentamount to a Novatio between the parties so that the earlier Agreement/Contract would be replaced by the later settlement/arrangement. That having not been paid the Plaintiffs claim damages.
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8. The limitation of the suit for obtaining the declaration sought for validity of an Agreement is 3 years from the date when the right to sue first accrues under Article 58 of Part III of Schedule I of the Limitation Act, which is for suits relating to declarations. The right to sue first accrued on 30th April, 1989. There is nothing to show that the Plaintiffs sought performance of that agreement from the Defendants as a valid agreement.
9. It is contended that this suit is intrinsically for specific performance of the contract and hence the limitation is 3 years from the date fixed for performance or when performance is refused under Article 54 or Part II of Schedule I of the Limitation Act, which deals with suits relating to contracts. In this case the date for performance is not shown to have been fixed. The date of refusal of performance by the Defendants is also not shown by the Plaintiffs. In fact the wording of the relief is for declaration that the agreement is valid and subsisting, but not for specific performance. Hence, Article 58 would clearly apply to the exclusion of Article 54 mentioned above.
10. The suit is filed more than 17 years after the right to sue 8
accrued with regard to the declaration of the validity of the agreement dated 30th April, 1989.
11. Even if the suit is taken to be for reliefs under the oral agreement stated to be entered into in July / August 2002 for payment of Rs.11 lakhs to the Plaintiffs in full and final settlement of the claim and that having not been paid for damages of Rs.50 lakhs pending the suit, the damages which are claimed are shown to be for breach of the agreement dated 30th April, 1989. The right to sue for such damages would accrue within 3 years of the agreement for failure of which the damages are claimed. The suit is clearly barred by the law of limitation for claim of such damages for breach of the agreement dated 30th April, 1989.
12. In the case Hardesh Ores (P) Ltd Vs. Hede & Co. (2007) 5 SCC 614 the principles of law relating to the invocation of Order 7 Rule 11 of the C.P.C as an expedient mode of disposing of suits filed clearly after the period of limitation is laid down. In that case the Plaintiff claimed automatic renewal of the lease, which was refuted by the Defendants 4 years before. Aside from holding that in that case, there was no such automatic renewal as contended, it was held that though the suit was filed ostensibly only for 9
injunction for enforcement of negative covenants, it was in fact for specific performance of the initial lease which stood expired by efflux of time, there being no automatic renewal. Hence the suit was held, as seen from a reading of the plaint as a whole to be barred by the Law of Limitation.
13. The Supreme Court laid down the essentials of consideration of the case of the Plaintiffs in para 25 of the judgment thus :
"For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is whether the averments made in the plaint, if taken to be correct in their entirety, a decree would be passed. The averments made in the plaint as a whole have to be seen to find out whether clause (d) of Rule 11 of Order 7 is applicable. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense."
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14. Further, for considering the usage of the Salutary provision in Order VII Rule 11 of the C.P.C as a mode of case management, the Supreme Court referred to the observations in the case of T.Arivandandam Vs. T.V. Satyapal (1977) 4 SCC 467 to prevent abuse of judicial process by parties filing suits well after the period of limitation allowed to them to sue. In that judgment, as extracted at page 630 in the case of Hardesh Ores (supra), it is observed that such suits are " flagrant misuse of the mercies of law in receiving plaints" . Hence is the enjoinment of the usage of Order VII Rule 11 in appropriate cases. The conclusion in the said para eloquently makes out the case for rejection of such plaints ..... " An activist Judge is the answer to irresponsible Law Suits" .
15. This case is essentially for specific performance of an agreement entered into and not enforced or complied for 17 years before filing of the Suit. Though not specifically claimed, recovery of damages for failure to comply with the agreement dated July/August 2002, not shown to be executed in writing, would also be required to be filed within 3 years of the said agreement. The Suit is not filed even within such time. The relief is claimed for declaration of the 11
validity of the initial agreement.
16. Hence, it can be seen that the claim in Suit is essentially based upon the agreement of 1989 whether for declaration of its validity or for damages upon its breach. The suit for such reliefs based upon the aforesaid statements in the plaint is, therefore, clearly barred by the law of limitation.
17. Further statements in the plaint relating to the Plaintiffs' knowledge of the construction or the rights created in favour of Defendants 12 and 13 by Defendants 1 and 2 are ancillary to the reliefs sought by the Plaintiffs against Defendants 1 and 2. The period of limitation cannot be extended or signed by the acts of Defendants 1 and 2 with regard to other transactions which have been executed well after the period of limitation to sue expired. Had these transactions also taken place within the period of limitation, i.e, within 3 years of the accrual of cause of action in favour of the Plaintiffs being 30th April, 1989, the period of limitation in a given case may have been so extended. No period of limitation can be extended after the claim gets barred by limitation. A specified period is allowed by law to parties to sue to afford inherent protection to parties to a contract who have not been sued within the period of limitation to deal with their 12
properties and transaction with further parties thereafter. Limitless extension of time to sue after the period specified in law expires would cause tremendous prejudice and injustice to parties who seek to deal with their own properties after contracting with a party who has allowed these rights to lapse by limitation. The very expression "Limitation" implies limitation of time to sue. The right to sue cannot go on endlessly. If that were allowed a very strange, unjust consequence would arise. No party would be able to enter into a transaction even after the period of limitation in Law expired if the earlier transaction did not materialise. This would constitute a impediment on the Defendants' vested rights.
18. Consequently, the statements in the plaint must be read as a whole. Reading such statements the cause of action which initially accrued to the Plaintiffs must be seen. How the Plaintiffs sought to enforce their legal rights within the period of limitation from the date of the accrual of such cause of action has to be seen. Further statements in the plaint relating to whatever may have transpired between the Defendants and further contracting parties after their claim in favour of the Plaintiffs got barred by limitation cannot show the extension of the period of limitation. Hence the 13
statement in the plaint read as a whole shows that the suit got barred by the law of limitation within 3 years from 30th April, 1989 itself. Even if the further agreement between the parties of July/August 2002 is to be considered, such further claim also got barred within 3 years of August 2002. The suit having been filed in 2007 is seen to have been filed well after the bar of limitation was crystalised. Such period of limitation cannot be further extended by acts of Defendants 1 and 2 who were thereafter free to deal with their property absolutely with further contracting parties.
19. It is, therefore, clear that the suit appears to be barred by the law of limitation as seen from the statements in the plaint. The plaint, therefore, is rejected under Order VII Rule 11(d) of the C.P.C.
(SMT. ROSHAN DALVI, J.)
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