Rohit Kumar v. A.S. Chugh

Rajiv Sahai Endlaw, J.— The defendant after filing the written statement to the suit for specific performance of an agreement of sale of immovable property, submitted before the court that the suit was not maintainable. This court vide order dated 23rd May, 2007, even before the framing of issues, listed the matter for arguments on the question of maintainability of the suit. The senior counsels for the plaintiff as well as the defendant have been heard on the aspect of maintainability.

2. The defendant has challenged the maintainability of the suit for the reason of the plaintiffs having earlier filed a suit for permanent injunction for restraining the defendant from selling, encumbering or parting with the possession of the property agreed to be sold to the plaintiffs to any other person. It is stated in para 1 of the preliminary objections in the written statement of the defendant that the said suit was filed by the plaintiffs before the court of the Civil Judge, Delhi and along with the said suit an application for interim relief was also filed; that the said application was rejected by the court of the Civil Judge, Delhi and no appeal had been preferred by the plaintiffs; that by the earlier suit for injunction also, the plaintiffs were seeking to enforce their rights under the alleged agreement to sell and the present suit for specific performance is also for enforcement of the same alleged agreement; that the plaintiffs ought to have sought the relief of specific performance in the previously instituted suit which till the time of institution of the present suit was stated to be still pending before the court of Civil Judge, Delhi. It was thus urged that the present suit was barred under the provisions of order 2 rule 2 of CPC.

3. It is further the admitted position that the plaintiffs after the institution of the present suit have withdrawn the previous suit for permanent injunction. The court of the Civil Judge, Delhi vide order dated 26th February, 2007 (the present suit was instituted on 8th January, 2007) allowed the said previous suit to be withdrawn unconditionally on the prayer of the plaintiffs, subject however to costs of Rs. 5,000/-. The senior counsel for the defendant has thus argued on the maintainability of the present suit not only under order 2 rule 2 of the CPC but also argued that the present suit is barred by the provisions of order 23 rule 1 of the CPC.

4. Though the suit was got listed for arguments on maintainability but it may be mentioned that during the arguments on 22nd July, 2008 it was discovered that the pleadings/orders of the earlier suit on the basis whereof maintainability was challenged had not been filed. Direction in that regard was made. The defendant thereafter filed the pleadings and orders in the said earlier suit. It may also be noticed that it was the preliminary contention of the senior counsel for the plaintiffs that without framing an issue, the arguments on maintainability could not be heard but in view of the earlier order listing the suit for arguments on maintainability having attained finality, the counsels were heard.

5. The plaintiffs have sued for specific performance of an agreement dated 2nd August, 2004. As per the agreement filed by the plaintiffs, the balance sale consideration was payable by the plaintiffs to the defendant on or before 31st January, 2007 against execution of all requisite documents viz sale deed, possession letter, receipt etc. and delivery of physical possession of the property by the defendant to the plaintiffs. The parties are at issue with respect to the said date of 31st January, 2007. It is the contention of the defendant that the plaintiffs have in their copy of the agreement changed the date for payment of balance sale consideration and completion of transaction from 31st March, 2005 to 31st January, 2007. But the same does not fall for adjudication at this stage. The maintainability of the suit is to be adjudicated on the averments of the plaintiffs.

6. The senior counsel for the defendant has drawn attention to the plaint in the earlier suit and in the present suit and sought to demonstrate that the contents thereof are identical. It is urged that even though as per the plaintiffs the date for conclusion of the transaction was 31st January, 2007 but it was the averment of the plaintiffs in the plaint in the earlier suit also that the defendant was in breach of the agreement and resiling from the agreement. It was urged that after the plaintiffs had instituted a suit for permanent injunction, the second suit for specific performance does not lie and more so when the prior suit was withdrawn unconditionally and without seeking leave from the court for suing for specific performance. Relying upon order 23 rule 1 (4) it was argued that a fresh suit in respect of “subject matter” of the earlier suit or “such part of the claim” as in the earlier suit, was precluded. It was argued that the subject matter of the two suits was the same. The senior counsel submitted that merely because a new notice was stated to be given by the plaintiffs, after the institution of the previous suit and before the institution of the present suit would not give a new cause of action to the plaintiffs and the subject matter of the suits remained the same. It was further argued that had the plaintiffs proceeded with the previous suit, it would have been decided therein whether the agreement to sell subsisted or not. With reference to the plaint in the present suit, it was argued that there was no averments therein that the relief of specific performance was not claimed at the time of institution of the earlier suit because the cause of action therefor had then not accrued. Reliance was placed on AIR 1964 SC 1810 and on a judgment of a single bench of this court in S. Sawant Singh v. S. Darshan Singh, AIR 1992 Delhi 80.

7. Per contra the senior counsel for the plaintiffs placed reliance on Om Prakash Srivastava v. Union of India, (2006) 6 SCC 207 : 2006 (90) DRJ 659 [SC], Dalip Singh v. Mehar Singh Rathi, (2004) 7 SCC 650 and Deva Ram v. Ishwar Chand and another, AIR 1996 SC 378.

8. In my view, the crucial question is whether the cause of action for the relief for specific performance can be said to have accrued to the plaintiffs at the time when the previous suit claiming the relief for injunction only was instituted. If the cause of action can be said to have accrued, the present suit would undoubtedly be barred by order 2 rule 2 of CPC, otherwise not.

9. Article 54 of Schedule 1 to the Limitation Act while prescribing a period of three years for a suit for the relief of specific performance, prescribes the date of commencement as the date fixed for performance and if no date is fixed for performance, then three years from the date when the plaintiff first has notice that the defendant is refusing performance.

10. The plaintiffs have approached the court with a case of agreement fixing a date for performance. Thus such a case cannot fall in the second category (of when the plaintiff first has notice that performance is refused) in as much as the said category is applicable only if no such date is fixed. In cases where the date for performance is fixed in the agreement, the other category of the date of notice to the plaintiffs that performance is refused, is not applicable.

11. Having said that I may notice that though the date fixed for performance according to plaintiffs was 31st January, 2007, the plaintiffs instituted this suit for specific performance before the said date on 08.01.2007 Would this fact or the fact that the plaintiffs themselves in the earlier suit also stated that the defendant was refusing performance make a difference or whether for the said reasons it can be said that the cause of action for the relief for specific performance, notwithstanding the date for performance having been fixed in the agreement had accrued to the plaintiffs prior to the institution of the suit for permanent injunction. In the facts of the present case, I do not find so.

12. The plaintiffs in the plaint in the earlier suit for injunction stated that they were in the process of arranging the balance sale consideration and shall make the entire payment in terms of the agreement i.e by 31st January, 2007; that the defendants had no right to deal with any other person with respect to the property till the time granted by the defendant to make the full payment i.e by 31st January, 2007 had not expired. It was the contention of the plaintiffs in the plaint in the earlier case that notwithstanding the said position, the defendant was threatening to deal with the property with the others.

13. On the contrary, the case of the plaintiffs in the plaint in the present suit is that they, during the pendency of the previous suit for injunction sent a notice dated 23rd December, 2006 to the defendants informing the defendants that the plaintiffs had arranged the balance sale consideration and were ready and willing to pay the same and calling upon the defendant to perform his reciprocal obligations. Undoubtedly, the plaintiffs in the paragraph mentioning the date on which the cause of action for the suit had accrued to the plaintiffs stated that the cause of action had also accrued before they instituted the previous suit for permanent injunction but also stated that the cause of action also accrued when the plaintiffs vide notice dated 23rd December, 2006 informed the defendant of their readiness and when the defendant in spite of the same has not performed his reciprocal obligations.

14. Thus, it would seen that as per the plaintiffs, the agreement fixed the date of performance “on or before 31st January, 2007” the plaintiffs at the time of institution of the previous suit for permanent injunction or prior thereto were not ready and willing to perform their part of the agreement. Such readiness and willingness of the plaintiffs is essential to the plaintiffs' claim for specific performance. As per the case of the plaintiffs, the plaintiffs had time till 31st January, 2007 to pay the balance sale consideration; they could not pay the balance sale consideration prior to the institution of the suit for injunction, but could pay the same after the institution of that suit, though within the time stipulated in the agreement. The readiness and willingness of the plaintiffs is essential to a claim for a specific performance under provisions of section 16 of the Specific Relief Act, 1963 and constitutes a cause of action for the relief of specific performance. The averments in the plaint in the previous and the present suit, and which alone have to be seen at this stage thus do not show that the cause of action for the relief of specific performance had accrued to the plaintiffs prior to the institution of the previous suit for injunction. If that be the position, neither order 2 rule 2 nor order 23 rule 1 of the CPC would bar the present suit, notwithstanding the plaint in the previous suit also making averments of the defendant having resiled from the agreement.

15. In my view, the factum of the plaintiffs having instituted the present suit also prior to 31st January, 2007 would not come in the way of the plaintiffs in as much as the agreement permitted the plaintiffs to pay the balance sale consideration on or before 31st January, 2007. Thus upon the plaintiffs, before 31st January, 2007, vide notice dated 23rd December, 2006 having offered the balance sale consideration to the defendant and the defendant having refused to perform his part of the agreement, the cause of action for relief of specific performance accrued to the plaintiffs.

16. In my view for the reason of the plaintiff in the cause of action paragraph in the plaint in the present suit, mentioning the dates prior to the institution of the previous suit also, would also not make any difference. Cause of action is a bundle of facts and the entire bundle of facts of entering in the agreement, issuance of the previous notice, institution of the previous suit, together with the last cause of action of refusal of the defendant to abide by the notice dated 23rd December, 2006, together constitutes the cause of action. What has to be seen is whether the cause of action for the relief of specific performance was complete before the institution of the previous suit. The answer has to be in the negative. Without the plaintiffs offering the balance sale consideration to the defendant signifying the plaintiffs' readiness and willingness to perform the essential term of contract, the plaintiff could not have sued for specific performance.

Thus, the institution of the previous suit for injunction stating that the defendant was resiling from the agreement would not bar the present suit.

17. I do not find the judgments cited on either side to be applicable to the facts of the present case. I may, however, refer to the judgment in Kamal Kishore Sahu v. Nawab Zada Humayun Kamal Hasan Khan, 90 (2001) DLT 45 (DB) : 2001 (57) DRJ 617 (DB) in which the Division Bench of this court held a second suit for specific performance on same averments as in a previous suit for permanent injunction to be barred by the provisions of order 2 rule 2 of the CPC. However, in that case, as borne out from the facts reproduced in the judgment, the date fixed for performance pleaded by the plaintiffs was of a time prior to institution of the first suit for permanent injunction. For this distinguishing feature I do not find myself bound by the ratio laid down therein.

18. With all respect I am also humbly of the view that a suit for permanent injunction filed after accrual of the cause of action for specific performance, as in Kamal Kishore Sahu aforesaid can not bar a subsequent suit for specific performance.

19. This is for the reason that under section 41 (h) of the Specific Relief Act an injunction cannot be granted when equally efficacious relief can be obtained by any other usual mode. In my opinion, after the cause of action for the relief of specific performance has accrued to a purchaser, the efficacious relief of specific performance is available to the purchaser and an injunction at the instance of the purchaser restraining the seller from dealing with the property cannot be granted. This has also been held in Satish Bahadur v. Hans Raj AIR 1980 Punjab 351 with which I respectfully concur. If injunction cannot be granted or if the relief of injunction is barred under section 41 (h) of the Specific Relief Act, plaint in such a suit for permanent injunction is liable to be rejected. If such a plaint is liable to be rejected, a suit on the basis of such a plaint cannot bar the subsequent suit for the efficacious relief of specific performance. The courts, from time to time have held that one of the ingredients to be made out for applicability of order 2 rule 2 of the CPC is “the earlier suit must have been decided on merits” this ingredient does not require that the earlier suit ought to have necessarily reached its logical conclusions. Even if the earlier suit is dismissed in default or withdrawn, the provisions of order 2 rule 2 would apply. All that it means is that an application for amendment to include a relief which in a subsequent suit would be barred under order 2 rule 2 of the CPC can be made in the pending suit and that if the earlier suit is dismissed on a technical plea, then also the provisions of order 2 rule 2 of the CPC would not apply. A single judge of this court in Brahma Kumari v. Sarwan Singh 1981 Rajdhani Law Reporter 486 has so interpreted the said ingredient of applicability of order 2 rule 2 of the CPC. I may further with respect state that the aforesaid aspect was not urged before the Division Bench of this court in Kamal Kishore Sahu (supra) and thus finds no adjudication.

20. Another single judge of this court in Ashok Agrawal v. Bhagwan Das Arora, 88 (2000) DLT 606 also held a suit for specific performance after a suit for permanent injunction to be barred by order 2 rule 2 of the CPC. However, the finding in that case also was that the time fixed in the agreement in that case for performance had elapsed before the institution of the suit for permanent injunction. On the contrary, in Sukh Ram Das v. Ramesh Chand Jain, 67 (1997) DLT 289, the suit for specific performance was held to be maintainable when the defendant in the previous suit for permanent and mandatory injunction had objected to the pecuniary jurisdiction of the court where that suit was instituted. It was held that the defendant could not be permitted to approbate and reprobate. I find that the defendant in the present case also, in the previous suit for injunction had in his written statement, taken a plea that the suit for injunction without the consequential relief of specific performance was not maintainable and was also beyond the pecuniary jurisdiction of that court. The defendant having stated so cannot, when the suit for specific performance is filed, object to the same also.

21. I may also notice that Division Bench of the Gujarat High Court in Rajivbhai Mathurbhai Solanki v. Bijalbhai Devjibhai Prajapati AIR 2004 Gujarat 102 has also held that where the cause of action for the relief of specific performance had not accrued when the suit for permanent injunction was filed, the subsequent suit for specific performance would not be barred by order 2 rule 2 of the CPC. The Apex Court in Shri Inacio Martins v. Narayan Hari Naik, AIR 1993 SC 1756 has held that even where the subject matter of the two suits was very same but the cause of action, distinct and also if the relief claimed in the subsequent suit was not identical to the relief claimed in the previous suit and further if the subsequent suit was based on a distinct cause of action not found in the former suit, the bar of order 2 rule 2 would not apply. The Apex Court further held that where a previous suit had become infructuous, in that case also the provisions of order 2 rule 2 would not apply.

22. As far as the provisions of order of 23 rule 1 are concerned, they are attracted when the second suit is instituted after the withdrawal of the first suit. That is not the position here. For this reason also the present suit instituted during the pendency of the earlier suit cannot be barred by order 23 rule 1 of the CPC.

23. I, therefore, do not find the present suit to be not maintainable for the reasons aforesaid and the question of maintainability of the suit to the extent discussed above is decided in favour of the plaintiffs and against the defendant.

24. Though, I would ordinarily have imposed costs on the defendant for the reason of having raised the question of maintainability even before framing the issues and thereby delaying the suit for more than one year but in view of the serious averments made, of the plaintiffs having manipulated their copy of the agreement to sell, I am refraining from doing so.