TaxTMI 
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2022 (7) TMI 1462
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....a and Mithi Co. for IA(L)/7677/2022 in Propose Defendant Nos.21 and 22. ORAL JUDGMENT : 1 The Interim Application (L) No.2566 of 2022 is filed by Original Defendant Nos.2, 5, 6 and 7 to the captioned Suit whereas Interim Application (L) No.3696 of 2022 has been filed by Original Defendant Nos.1 and 3 to the Suit and Interim Application (L) No.4569 of 2022 has been filed by Original Defendant No.10 on behalf of Defendant Nos.10 to 12 to the Suit. All the Interim Applications are filed under Order VII Rule 11 (d) of the Code of Civil Procedure, 1908 seeking rejection of plaint on the ground that the Suit is barred by limitation. They are being disposed of by this common judgment. 2 There are certain facts in the plaint which are necessary to be adverted to. The Plaintiff's father namely late Pandurang Barkya Mali was the owner of the suit properties. By a purported agreement for sale dated 30.06.1974, Defendant Nos.8 and 9 who are referred to as Kanayalal Kalooji Jain ('Jain') and Narain Tulsidas Kanal ('Kanal') in the plaint, sought to purchase suit properties from the Plaintiff's deceased father. Thereafter, Jain and Kanal entered into agreements dated 05.08.1974 and 18.09.197....
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....ards purchase of the suit property. However, the Plaintiff claims that he accepted the same under the representation made by Defendant No.3 and 4 that these monies were paid towards the balance consideration under the Memorandum of Understanding dated 11.12.2008. On 20.02.2014, the Plaintiff admits that he executed four conveyances for sale of the suit property in favour of Original Defendant Nos.10 to 12. However, in paragraph 29 of the Plaint, it is stated that the Plaintiff having been misrepresented and fraudulently made to believe about the contents of the document executed the alleged impugned Conveyance Deeds as to be Memorandum of Understanding in favour of Defendant Nos.1 to 7. 6 The Plaintiff has further stated for the first time he became apprehensive of some foul play and fraud on 27.07.2016. This is when the Plaintiff received notice from the Land Record Department, Maharashtra with respect to measuring boundaries of one of the suit properties being Final Plot No.709. The notice was issued under Section 150(2) of the Maharashtra Land Revenue Code, 1966 by the City Survey Officer. It was stated in the notice that the Plaintiff and Defendant Nos.13 to 15 were sellers an....
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....her stated that a Suit for declaration of the said documents to be null and void, would be filed. 11 In the year 2018, the Plaintiff has claimed that they noticed certain development activities on the suit property. When the Plaintiff physically attempted to enter the suit property, he was stopped by the persons who informed him that the suit property was purchased by Original Defendant Nos.10 to 12. 12 The Plaintiff has thereafter claimed that In October, 2018 he noticed development activities on suit property 4 and when the Plaintiff physically attempted to enter the suit property 4, he was stopped by the personnel present who informed him that the same was purchased by Defendant Nos.10 to 12. The Plaintiff further claims that he was not allowed to enter the other Suit properties as well. In view of forceful possession of the suit properties being taken by the Defendants, a Police complaint dated 28.10.2018 was filed. The Plaintiff thereafter filed complaint against Defendant Nos.1 to 7 and 10 to 12 before the Economic Offence Wing on 20.12.2018. The Economic Offence Wing by letter dated 03.01.2019 transferred the investigation to the local Police Station. However, the local Po....
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....y limitation. 15 Mr. Engineer has submitted that even assuming that the Conveyance Deeds were executed by fraud or misrepresentation as claimed by the Plaintiff, Section 19 of the Contract Act, 1872, stipulates that the same was only voidable at the option of the Plaintiff. The Plaintiff would have to sue for cancellation of the documents and, therefore, the present Suit would have to be filed within three years of knowledge of such fraud or misrepresentation which is admittedly three years from 22.08.2016 or 14.02.2017 and, thus, the Suit having been filed beyond the period of three years, is clearly barred by law of limitation under Article 59 of the Limitation Act. 16 Mr. Engineer has made reference to decisions of the Supreme Court which clearly lay down the principles for deciding an application under Order VII Rule 11. One such decision of the Supreme Court is in Dahiben vs. Arvindbhai Bhanushali reported in (2020) 7 SCC 366. These principles include that the Court must read the plaint as a whole and the substance and not the form must be ascertained. The Court must look at documents which are annexed to the Plaint. The Court must ascertain if the assurance made in the plai....
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....that Suit is clearly barred by the law of limitation and in view thereof the Plaint be rejected under Order VII Rule 11 (d) of the Civil Procedure Code. 20 Mr. Ankit Lohia, the learned Counsel appearing for Defendant Nos.10 to 12 has supported the submissions of Mr. Engineer. He has submitted that the captioned Suit is essentially a Suit for cancellation of four Conveyance Deeds. The relief of possession claimed by the Plaintiff is only a relief consequential to the relief of cancellation. A meaningful reading of the plaint makes it clear that the captioned Suit essentially seeks cancellation of the Conveyance Deeds. He has also placed reliance upon Section 31 of the Specific Relief Act, 1963 and Article 59 of the Limitation Act, 1963 in support of his submission that absent the relief for declaration of cancellation of the Conveyance Deeds, the Plaintiff is not entitled to seek the relief of possession. He has submitted that the Conveyance Deeds are registered documents by which the Suit properties have been sold to Defendant Nos.10 to 12. The execution of the document is admitted by the Plaintiff before the Sub-Registrar of Assurances in accordance with the procedures of Registr....
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.... The Plaintiff had knowledge of the alleged fraud not only from the execution of the Conveyance Deeds dated 31.12.2013 but had clear knowledge of the fraud as admitted by him both in his reply dated 29.08.2016 to the Notice dated 22.08.2016 received from the City Survey Officer and in his affidavit in reply dated 14.02.2017 to the Chamber Summons preferred by Defendant Nos.10 to 12 in their Suit before the City Civil Court. 23 Mr. Lohia has submitted that the case of the Plaintiff in the plaint is that the right to sue first accrued in favour of the Plaintiff so as to seek cancellation of the impugned Conveyance Deeds as the Defendants infringed upon the rights of the Plaintiff of settled possession and of ownership of the suit properties. He has submitted that the plea for possession sought in the plaint can be of no assistance to the Plaintiff as much as the plea of possession is consequential upon the relief of cancellation/void ab initio as the case may be. The Plaintiff cannot seek possession if the Plaintiff fails to seek cancellation/declaration that the Conveyance Deeds are void ab initio. Thus, if the primary relief/main cause of action in respect of contract being void/l....
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....present case, the Plaintiff had at no point of time elected to render the Deeds of Conveyance as void by his acts pursuant thereto. The Plaintiff has in fact not only received valuable consideration, aggregating to a sum of Rs.96,52,116/- under the Deeds of Conveyance, but has acted thereupon by handing over possession of the suit properties to the purchasers. 26 Mr. Khandeparkar has submitted that the Plaintiff has not sought specific performance of the Memorandum of Understanding dated 11.12.2008 on the basis of which the Plaintiff has claimed that the Deeds of Conveyance were executed. It is the case of Defendant No.1 that the said Memorandum of Understanding has in fact been cancelled vide letter dated 02.09.2010. However, there has been no attempt to refund or return the consideration under the Deeds of Conveyance. 27 Mr. Khandeparkar has further submitted that the Plaintiff is deemed to have knowledge of the Deeds of Conveyance at least since their registration on 20.02.2014 as they are registered documents, having regard to Section 3 of the Transfer of Property Act and Section 17 of the Limitation Act. He has accordingly submitted that the captioned suit is clearly barred ....
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.... Defendant Nos.8 to 12 at the Registration Office when the documents were registered on 20.02.2015 were questioned by the Plaintiff and Defendant Nos.13 to 15 upon which they were informed that the presence of Defendant Nos.8 to 12 was necessary for effective implementation of the 2008 Memorandum of Understanding and for which a fresh Memorandum of Understanding has been executed with them, separately. He has submitted that the Deeds of Conveyance were registered by fraud, deceit and misrepresentation and this is borne out from the Deeds of Conveyance. The consideration paid to the Plaintiff/his family members in respect of the Deeds of Conveyance by Defendant Nos.10 to 12 is a meager sum of Rs.96,52,116/- as against a market value of Rs.23,94,19,000/-. He has referred to certain inconsistencies in the Deeds of Conveyance. In respect of the one Deed of Conveyance which is pertaining to Suit property No.3 claimed to be purchased by Defendant No.2, the purchase consideration paid by Defendant No.2 to Defendant Nos.10 to 12 is a sum of Rs.11,00,00,000/- as against market value of Rs.6,18,24,000/-. This demonstrates the fraudulent nature of the Deeds of Conveyance. 31 Mr. Kapadia has ....
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.... where a man who cannot read/illiterate person has a written contract/deed falsely read once to him and he executes the deed relying on the false reading as being the true substance of the transaction, his act is wholly void. In other words the documents would be invalid not merely on the ground of fraud, where fraud exists but on the ground that the mind of the signer did not accompany the signature. In other words, that he never intended to sign, and therefore in contemplation of law never did sign, the contract to which his name is appended. He has submitted that the Courts have held that in such case the alleged document/deed was no deed and the deed being void ab initio did not require to be set aside or cancelled. 34 Mr. Kapadia has also made submissions on the substantive law i.e. on the principle of a transaction being illegal and void if in violation of an injunction. He has in support of this submission relied upon the following authorities : 1) Surjit Singh & Ors. v. Harbans Singh & Ors., (1995) 6 SCC 50. 2) Smt. Savitri Devi v. Civil Judge (Senior Division), Gorakhpur & Ors. AIR 2003 AII 321. 3) Keshrimal Jivji Shah & Anr. v. Bank of Maharashtra & Ors. 2004 (3) M....
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.... the threshold. Therefore, the conditions precedent to the exercise of the power are stringent and it is especially so when rejection of plaint is sought on the ground of limitation. 39 Mr. Kapadia has submitted that there is no merit in the application under Order VII Rule 11 as the Defendants have sought to go into the merits of the dispute. He has submitted that an application filed under Order VII Rule 11 of the Code of Civil Procedure does not require the Plaintiff to prove his case on merits or for an adjudication on merits. All that the Court has to see is what is pleaded by the Plaintiff to ascertain the cause of action in the plaint. In the present case, the Plaintiff has lost possession of the suit properties sometime around October, 2018. The Applicant, in their Interim Applications have contended that the Plaintiff lost possession in December, 2013 when the Deeds of Conveyance were executed. In either case, the present Suit having been filed in December, 2021 is well within the period of limitation which under Article 65 of Limitation Act is 12 years from the date of loss of possession of the suit properties. He has submitted that the Deeds of Conveyance itself are ill....
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....at he had entered into settlement with Defendant Nos.10 to 12 and executed conveyances in their favour and it was only because the entire consideration had not been paid that the Plaintiff has alleged "fraud". This is further apparent from the police complaint dated 05.06.2017 made by the Plaintiff which is annexed at Exhibit-M to the plaint, wherein the Plaintiff has stated that "... once again believing upon the said accused, we executed the documents not knowing the contents of the same and that the said Agarwal also signed the documents". It is further borne out from paragraphs 27 and 28 of the Plaint that the Plaintiff thought that he was executing the documents in furtherance of and for transferring his right, title and interest in favour of Defendant Nos.1 to 7 and the Plaintiff thought that even Defendant Nos.8 to 12 are also transferring their rights in favour of Defendant Nos.1 to 7 simultaneously. It is clear that the Plaintiff was of the view that he was executing the documents, by which he was transferred his rights in the property in favour of Defendant Nos.1 to 7. The Plaintiff was thus conscious that the character of the documents was one, by which he was to receive....
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....applies to any Suit brought by such person'. Thus, these findings of the Calcutta High Court supports the case of these Defendants, as there is no fraud on character in the facts of the present case. In the case of Appanna v. Venkatappa (supra) the Plaintiff thought he was executing a Power of Attorney in favour of the Defendants, authorizing them to manage the Plaintiff's estate. However, this, in fact, turned out to be a gift deed, by which the Plaintiff had gifted away his properties in favour of the Defendants. Thus, this was a clear case of fraud with regard to the character of the documents which is entirely different from the facts of the present case. In Naranjan Singh (supra) the Plaintiff had not even executed the document and that his brother had fraudulently sold the suit land by impersonating him. These facts are entirely different from the facts of the present case. In Sarat Chandra Gupta (supra) the Plaintiff signed a document under a belief that she was signing a power of attorney, whereas, in fact, she executed a deed, thereby alienating the property from herself to the Defendants. Thus, this was also clear case of fraud with regard to the character of the document....
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....ars from the knowledge of the fraud as provided in Article 59 of the Limitation Act. At the very latest three years run from 14.02.2017 i.e. by 15.02.2020 and the suit filed in December, 2021 is accordingly barred by limitation. 46 The learned Counsel have thereafter dealt with the Plaintiff's contention that the Conveyance Deeds are void ab initio as they were executed in violation of the order of injunction dated 26.11.1982. It is submitted by the learned Counsel for the respective Defendants that the case of the Plaintiff is entirely misconceived as the order of injunction was passed in a Suit filed by the predecessor of Defendant Nos.10 to 12 and that the order of injunction was in favour of Defendant Nos.10 to 12 and did not operate against them. Hence there is no embargo on the Defendant Nos.10 to 12 or any of their nominees from entering into the Conveyance Deeds with the Plaintiff. They have submitted that even assuming that the order of injunction applied, a sale in violation of an order of injunction is not void ab initio. This has been held by the Supreme Court in the case of Thompson Press (India) Limited v. Nanak Builders and Investors, reported in 2013 5 SCC 397 at p....
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....letely distinguishable on facts. 49 The learned Counsel for the respective Defendants have submitted that in the present case it is the plea of the Plaintiff that there is fraud as to the contents of the Deeds of Conveyance and that the Plaintiff had knowledge of the fraud by 22.08.2016 and/or the very latest by 23.02.2017. In view thereof, the Suit for cancellation of Deeds of Conveyance must be filed latest by 15.02.2020. The contention of the Plaintiff that the impugned Deeds of Conveyance are void ab intio, is contrary to the well settled law that where there is no fraud as to the character of the documents but only fraud as to the contents of the documents, the Deeds of Conveyance would be voidable and would require cancellation and for which Article 59 of the Limitation Act is applicable. Thus, the Suit for cancellation would have to be filed in the facts of the present case latest by 15.02.2020 and the Suit admittedly was filed only on 14.12.2021 and thus is barred by limitation. They have submitted that this Court under Order VII Rule 11 is mandated to reject the plaint since the Suit is barred by law of limitation under Order VII Rule 11 (d). 50 After the judgment was re....
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....since registration will have to be allowed once the signature has been admitted. The Supreme Court allowed the Appeal and set aside the Judgment of the Single Judge of the Allahabad High Court and the order passed by the District Judge. 52 The learned Counsel appearing for the Defendants have submitted that in the present case there is no issue as to the signature of the Plaintiff having been forged and/or forcibly taken. The issue raised in the plaint is only insofar as the Plaintiff being unaware of the contents of the document. They have submitted that it is well settled merely because there is fraud as to the contents of the document that does not make the document void but voidable and will have to be avoided by the Plaintiff seeking the setting aside of the document. 53 Having considered the submissions, it is necessary to note the well settled principles laid down by the Supreme Court for deciding applications under Order VII Rule 11 which are as under : (i) The Court must read the Plaint as a whole and that the substance and not the form must be ascertained; (ii) The Court must look at the documents that are annexed to the plaint; (iii) The Court must ascertain if t....
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....nable questioning the Compromise Decree. All the aforesaid reliefs were subject matter of earlier suits and thereafter also subject matter of O.S. No. 1750 of 2015 in which the Compromise Decree has been passed. Therefore, it is rightly held by the Trial Court that the suit in the present form and for the reliefs sought would be barred under Order XXIII Rule 3A CPC and therefore the Trial Court rightly rejected the plaint in exercise of powers under Order VII Rule 11(d) of the CPC. The High Court has erred in setting aside the said order by entering into the merits of the validity of the Compromise Decree on the ground that the same was hit by Order XXXII Rule 7 CPC, which was not permissible at this stage of deciding the application under Order VII Rule 11 CPC and the only issue which was required to be considered by the High Court was whether the suit challenging the Compromise Decree would be maintainable or not." 56 The present Interim Applications which have been taken out by the respective Defendants seek rejection of the plaint under Order VII Rule 11 (d) on the ground that the Suit is barred by limitation. The arguments on behalf of the Defendants have proceeded on the pr....
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....eds as to be Memorandum of understanding in favor of Defendant Nos.1 to 7. The Plaintiff was led to believe that the documents registered are nothing but a Memorandum of Understanding and documents to further implementation thereof. In the circumstances, the alleged impugned Conveyance Deeds were executed by the Plaintiff and the Defendant No.13 to 15 without even knowing the contents, only on account of misrepresentation caused and illegal, fraudulent, coercive and unethical tactics deployed by Defendants 1 to 7. The Plaintiff submits that all throughout the Plaintiff did not know the content therein and hence was not aware of and ramifications / repercussions of signing the alleged impugned Conveyance Deeds. It is pertinent to note that the Plaintiff was made to understand that the Memorandum of Understanding dated 11 th December, 2008 was being in some form in order to give sanctity to the understanding and commitment brought out by Memorandum of Understanding dated 11 th December, 2008. The Plaintiff never knew that the other Defendant Nos. 8 to 12 were also signing the same document and getting suit properties transferred in their own name." (Emphasis supplied) 58 From read....
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....r from the affidavit in reply dated 14.02.2017 to Chamber Summons No.1741 of 2016 filed by predecessor of Defendant Nos.10 to 12 in their Suit, that the Plaintiff has admitted that Defendant Nos.10 to 12 approached the Plaintiff for settlement of the issue in the suit and agreed to pay the consideration price, however having not paid entire consideration price there was no settlement whatsoever, although the Plaintiff got executed certain documents by fraud in their favour. The Plaintiff has in this affidavit in reply to the Chamber Summons has in fact stated that a Suit for declaration that the Conveyance Deeds are null and void would be filed. Thus, the Plaintiff was aware of the purpose for which the Conveyance Deeds have been executed and which transferred rights of the suit property. The only objection being that full consideration was not paid to them. It accordingly appears that though the averments in the Plaint proceed on the premise that the Plaintiff was not aware of the contents of the Conveyance Deeds and/or that the transfer of the Suit was in favour of Defendant Nos.10 to 12, the documents annexed to the Plaint which have been adverted to above make it clear that the....
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....bstantive law on the principle of a transaction being illegal and void if in violation of an injunction. He has submitted that in the present case the Conveyance Deeds were executed in violation of the order of injunction dated 26.11.1982. This contention of the Plaintiff cannot be accepted in view of the fact that the order of injunction was passed in the suit filed by the predecessor of Defendant Nos.10 to 12 and was in favour of Defendant Nos.10 to 12 and did not operate against them. The Conveyance Deeds transferred the Suit Properties to Defendant Nos.10 to 12 and thus cannot be held to be breach of the injunction order which enures in their favour. The Defendant Nos.10 to 12 had admittedly approached the Plaintiff for settlement of the Suit filed by their predecessor which is pending before the City Civil Court and for which Conveyance Deeds were executed by which the rights of the Suit Properties were transferred by the Plaintiff to Defendant Nos.10 to 12. The Defendant Nos.10 to 12 had taken out Chamber Summons No.1741 of 2016 in their Suit which was filed for specific performance of agreement dated 30.06.1974 by which the predecessor of the Plaintiff had agreed to sell the....
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....sions are either impliedly overruled or per incurium, considering the fact that the conveyance deeds in the present case cannot be held to be in violation of injunction order particularly when the transfer of the Suit Properties by way of the Conveyance Deeds are in favour of Defendant Nos.10 to 12, for whose benefit the injunction order was passed. 66 Thus, the Plaintiff's contention that since the impugned Conveyance Deeds are void ab initio there is no need for their cancellation and Article 59 of the Limitation Act would have no application cannot be accepted. The prayer in the plaint of possession clearly would follow the Conveyance Deeds having to be set aside and absent the setting aside of the Conveyance Deeds, the Suit for possession cannot stand on its own. Hence, Article 65 which provides a period of limitation of 12 years in the event the Plaintiff is seeking possession is not applicable and cannot save the Suit from being barred by the law of limitation. The decisions relied upon by the Defendants where the Plaintiff would have to sue for cancellation of the document and Article 59 of the Limitation Act being applicable are apposite. 67 I have considered the submissi....
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....property and the plea that the right to sue first accrued in favour of the Plaintiff due to such dispossession likewise cannot be accepted. In fact in paragraph 63 of the plaint, the Plaintiff has admitted that the right to Sue accrued in favour of the Plaintiff so as to seek cancellation of the alleged impugned Conveyance Deeds as the Defendants infringed upon the rights of the Plaintiff of settled possession and of possession of the suit properties. Thus, Plaintiff's have in the Plaint admitted that it would be necessary for the Plaintiff to seek cancellation of the impugned Conveyance Deeds. The Plaintiff cannot rely on the suspension of limitation applicable to Suits by the Supreme Court in its orders in light of corona virus pandemic since March, 2020. This is in view of my finding that the present Suit would have to be filed latest by 15.02.2020. Thus, in my view given the pleadings in the plaint, documents annexed thereto, the impugned Conveyance Deeds would have to be set aside given that the Conveyance Deeds were voidable at the option of the party. Thus, Section 31 of the Specific Relief Act would be applicable for setting aside of the Conveyance Deeds. The period of limi....