2022 (7) TMI 1462 - HC - Companies Law

Plaintiff's Suit Dismissed as Time-Barred under Limitation Act - Understanding Fraud and Conveyance Deeds

M/s Trienity Prime Property Projects LLP & Ors. ; Ramesh Mali Versus M/s Samrat Associates & Ors. ; Amrishchandra Agarwal

M/s Trienity Prime Property Projects LLP & Ors. ; Ramesh Mali Versus M/s Samrat Associates & Ors. ; Amrishchandra Agarwal - TMI Issues Involved:1. Whether the suit is barred by the law of limitation.2. Whether the conveyance deeds were executed fraudulently and are void ab initio.3. Whether the plaintiff was aware of the contents of the conveyance deeds.4. Whether the conveyance deeds were executed in violation of an injunction order.5. Whether the plaintiff is entitled to possession of the suit properties.Issue-Wise Detailed Analysis:1. Whether the suit is barred by the law of limitation:The defendants argued that the suit is barred by the law of limitation as the plaintiff had knowledge of the alleged fraud by 22.08.2016 or at the latest by 14.02.2017. According to the defendants, the suit should have been filed within three years from this knowledge, i.e., by 15.02.2020. The suit was filed on 14.12.2021, making it time-barred under Article 59 of the Limitation Act, which prescribes a three-year limitation period for seeking cancellation of documents.2. Whether the conveyance deeds were executed fraudulently and are void ab initio:The plaintiff claimed that the conveyance deeds were executed under misrepresentation and fraud, believing them to be related to a Memorandum of Understanding (MoU) from 2008. The plaintiff argued that the deeds are void ab initio and do not require cancellation. However, the court noted that the plaintiff was aware that he was executing documents to transfer his rights in the property, indicating fraud regarding the contents, not the character of the documents. The court emphasized the distinction between fraud as to the character of a document (which makes it void) and fraud as to the contents (which makes it voidable).3. Whether the plaintiff was aware of the contents of the conveyance deeds:The court found that the plaintiff was aware of the nature of the conveyance deeds, as evidenced by his reply to the City Survey Officer and his affidavit in response to Chamber Summons No.1741 of 2016. These documents indicated that the plaintiff knew the deeds transferred rights to the suit properties and only objected to the non-payment of full consideration.4. Whether the conveyance deeds were executed in violation of an injunction order:The plaintiff contended that the deeds were void as they were executed in violation of an injunction order dated 26.11.1982. The court rejected this argument, noting that the injunction was in favor of the predecessors of Defendant Nos.10 to 12 and did not operate against them. The court also referred to the Supreme Court's decision in Thompson Press (India) Ltd., which held that a sale in violation of an injunction order is not void ab initio but remains valid between the parties to the transaction.5. Whether the plaintiff is entitled to possession of the suit properties:The court held that the plaintiff's claim for possession is consequential upon the cancellation of the conveyance deeds. Since the deeds were found to be voidable and not void ab initio, the plaintiff would need to seek their cancellation within the prescribed limitation period. The court concluded that the suit for possession could not stand on its own without setting aside the conveyance deeds.Conclusion:The court rejected the plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908, on the ground that the suit is barred by the law of limitation. The court emphasized that the plaintiff was aware of the alleged fraud by 22.08.2016 or at the latest by 14.02.2017, and the suit should have been filed by 15.02.2020. The court also noted that the conveyance deeds were voidable due to fraud as to their contents and required cancellation within the limitation period. The plaintiff's plea that the deeds were void ab initio and did not require cancellation was rejected. The court found no merit in the plaintiff's arguments and dismissed the suit accordingly.