Supreme Court: In a civil appeal against Madras High Court’s, the Division Bench of B.V. Nagarathna* and N. Kotiswar Singh, JJ. while dealing with the question that whether a second suit for specific performance of an agreement, filed after the rejection of a previous suit, was maintainable under the law, allowed the appeal and set aside the impugned decisions. The Bench held that, the right to sue first occurred in the year 1993 as the respondent/ original plaintiff had filed the first suit then, which was on the premise that it had a cause of action to do so. The said suit was filed within the period of limitation as per Article 54 of the Schedule to the Limitation Act, 1963.
Further, the Bench said that even after the rejection of the plaint in the earlier suit, steps were not taken on time, i.e., prior to 12-01-2001 to file the second suit on the basis of Order VII Rule 13 of the CPC. Instead, the second suit was filed only in the year 2007 belatedly and possibly only to keep the litigation alive between the parties which, was to make an unlawful gain from the speculative second suit by a settlement or in any other manner.
Background
In 1975, an agreement was made between the American missionaries of the Lutheran Church Missouri Synod and the defendant to transfer various properties, including the Kodaikanal property, to the defendant. The District Judge, Madurai, passed a decree dated 26-11-1975, appointing the defendant as the trustee of those properties for the objects of the Trust under the agreement. According to the original plaintiff/ respondent herein, the defendant sold a part of those properties, including the 5.05 acres of Loch End, consisting of 12 out of 15 buildings (‘suit scheduled property’). An agreement to sell was executed between the defendant and the plaintiff, for the suit scheduled property, on a total sale consideration of Rs.3,02,00,000/- and an advance payment of Rs. 10,00,000/- was made. At that time, the impleading party was allegedly in possession of three of the twelve buildings on Loch End in the capacity of a tenant.
There was a time schedule for the payment of the balance in sale consideration within a period of twenty-seven months from 26-04-1991. However, in 1993 itself, the suit for specific performance of the agreement to sell was filed by the plaintiff, which was an unnumbered suit, but the plaint in the said suit was rejected by the Trial Court due to non-payment of the requisite court fees by the respondent/plaintiff.
In a second suit for specific performance of the agreement to sell and seeking a direction to the defendant for executing the sale deed in favour of the plaintiff, the Trial Court refused to reject the plaint at such an early stage, on the grounds that the previous suit was not decided on merits. Therefore, the principle of res judicata would not apply. Further, the issue of limitation period being extended to file the suit for specific performance in light of the pending litigations with the impleading party was a question of fact and the said issue had to be adjudicated only after examination of proper witnesses and documents during trial.
In a revision petition by the defendant before the High Court, the same was dismissed opining that the previous suit was neither registered nor numbered and since the issues were not finally decided, it was not hit by the principle of res judicata. Thus, the High Court upheld the Trial Court’s decision.
Issue
Whether the plaint in the subsequent suit for specific performance filed by the plaintiff, was liable to be rejected in terms of Order VII Rule 11(d) [Rejection of Plaint] of the Code of Civil Procedure, 1908 (‘CPC’) on the ground that the said suit is barred by the law of limitation.
Analysis and Decision
To understand the averments made by the plaintiff, the Court perused the same and noted that vide letter dated 15-07-1991 issued by the defendant for the purpose of extending the time for performance of the contract till the disposal of litigation launched at the instance of the President of the defendant through the tenant. It was averred that the plaintiff was not advised to file the suit for specific performance which was ultimately filed in the year 2007, being the second suit for the same cause of action, when initially, (on the very same cause of action,) the unnumbered suit was filed in 1993 wherein the plaint was rejected on the ground that the Court fee had not been tendered despite several opportunities being given.
Further, in was averred that due to the cantankerous attitude and vexatious litigation of the tenant, the plaintiff could not file the suit for specific performance of the contract earlier, although the plaintiff was ready and willing to perform her part of the contract. The Court said that this averment was alien to the filing of the second suit as the tenant was not a party to the agreement and the filing and pendency of litigation vis-à-vis the tenant was not an impediment at all to file the earlier suit for specific performance of the sale agreement.
The Court observed that while considering the question of rejection of the plaint, it is the plaint alone which has to be read meaningfully and not any averment in the written statement. It is also necessary sometimes to consider the documents annexed to the plaint for a holistic and comprehensive reading of the plaint in order to decide whether the plaint ought to be rejected or not.
The Court pointed out that the present matter is a case where a second suit was filed after the rejection of the plaint in the earlier suit filed on the very same cause of action and for the very same relief of seeking specific performance of the agreement to sell. The Court said that, if really, the cause of action had arisen for the plaintiff to file the earlier suit on 01-07-1993 and the plaint in the said suit was rejected on 12-01-1998 owing to non-payment of the requisite court fee, then, at best, a second suit on the very same cause of action could have been filed by 12-01-2001 which would have been within three years from the date of rejection of the plaint in the earlier suit. Therefore, the Court held that the second suit could not have been filed in the year 2007 i.e., nine years after the rejection of the plaint in the earlier suit. Thus, the Court held that second suit not having been filed within a period of three years from 12-01-1998, which could be construed to be within the meaning of the Limitation Act, 1963, the second suit filed by the plaintiff was barred by limitation and thus not maintainable.
The Court stated that normally the question of limitation would be a mixed question of law and fact, hence, usually, on a reading of the plaint it is not rejected as being barred by the law of limitation. However, the said rule is a flexible rule.
Section 113 of the Limitation Act applicable to the second suit
The Court observed that-
“The law of limitation is an adjective law containing procedural rules and does not create any right in favour of any person, but simply prescribes that the remedy can be exercised only up to a certain period and not beyond. The Limitation Act therefore does not confer any substantive right, nor defines any right or cause of action. The law of limitation is based on delay and laches. Unless there is a complete cause of action, limitation cannot run and there cannot be a complete cause of action unless there is a person who can sue and a person who can be sued. There is also another important principle under the Law of Limitation which is crystallized in the form of maxim that “when once the time has begun to run, nothing stops it”
The Court also stated that barring the remedy under the law of limitation on the expiry of the limitation period would not imply plaintiff’s right being extinguished. Only the possibility of obtaining a judicial remedy to enforce the right is taken away. However, in certain cases, the expiry of the period of limitation would extinguish the plaintiff’s right to seek remedy entirely.
The Court reiterated that if a suit is not covered by any of the specific articles prescribing a period of limitation, it must fall within the residuary article. The residuary article prescribes a period of three years from the date when the “right to sue” accrues. Under Article 113, time commences to run when the right to sue accrues. The words “right to sue” ordinarily mean the right to seek relief by means of legal proceedings. Generally, the right to sue accrues only when the cause of action arises, that is, the right to prosecute to obtain relief by legal means. Article 113 of the Limitation Act is an omnibus Article providing for a period of limitation not covered by any of the specific Articles. The Court also pointed out that Article 54 of the Schedule to the Limitation Act provides for a limitation period for filing a suit for specific performance of a contract.
The Court held that since the second time was filed after the rejection of the plaint in the earlier suit, Article 54 of the Limitation Act was not applicable to a second suit filed for seeking specific performance of a contract. Now, to identify the actual limitation period, the Court persued Section 113 under which the time commences to run when the right to sue accrues. This is in contradistinction to Article 54 of the Limitation Act relating to a suit for specific performance of a contract which is on the happening of an event. In the matter at hand, the right to sue accrued to file the second suit was on the basis of Order VII Rule 13 of the CPC subsequent to the rejection of the plaint in the earlier suit on 12-01-1998. Therefore, the right to sue by means of a fresh suit was only after 12-01-1998. The expression “when the right to sue accrues” in Article 113 of the Limitation Act need not always mean “when the right to sue first accrues”. For the right to sue to accrue, the right sought to be vindicated in the suit should have already come into existence and there should be an infringement of it or at least a serious threat to infringe the same.
The Cour went onto explain that the right to sue under Article 113 of the Limitation Act accrues when there is an accrual of rights asserted in the suit and an unequivocal threat by the defendant to infringe the right asserted by the plaintiff in the suit. Thus, “right to sue” means the right to seek relief by means of legal procedure when the person suing has a substantive and exclusive right to the claim asserted by him and there is an invasion of it or a threat of invasion. It accrues only when a cause of action arises and for a cause of action to arise, it must be clear that the averments in the plaint, if found correct, should lead to a successful issue. The use of the phrase “right to sue” is synonymous with the phrase “cause of action” and would be in consonance when one uses the word “arises” or “accrues” with it.
“The right to sue accrues only when the cause of action arises, that is, the right to prosecute to obtain relief by legal means. The suit must be instituted when the right asserted in the suit is infringed or when there is a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted. Article 113 of the Schedule to the Limitation Act provides for a suit to be instituted within three years from the date when the right to sue accrues and not on the happening of an event as stated in Article 54 of the Schedule to the Limitation Act.”
Holding that the suit was barred in law as being filed beyond the prescribed period of limitation as per Article 113 to the Schedule to the Limitation Act, the Court held that the second suit is barred under Order VII Rule 11(d) of the CPC. Thus, the Court rejected the plaint filed by the plaintiff. Thus, the Court set aside the impugned orders of the High Court and the Trial Court.
CASE DETAILS
|
Citation: Appellants : Respondents : |
Advocates who appeared in this case For Petitioner(s): For Respondent(s): |
CORAM :
N. Kotiswar Singh, J.
