Allowed

Sri. Bhagyaraju v. Smt Prema

Karnataka HC18 Jun 2024CRP/449/2018

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed a civil revision petition challenging a dismissal of a suit for bar of limitation. The High Court set aside the lower court's ruling that created an artificial distinction between specific performance and money recovery suits, directing the trial court to register the suit and decide it on merits.

What did the court decide?

Civil Revision Petition allowed; impugned order of 31.05.2018 set aside; trial court directed to register suit and proceed in accordance with law.

Sri. Bhagyaraju Vs Smt Prema — Contract and Commercial Disputes | Karnataka HC (2024)

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NC: 2024:KHC:21687 CRP No. 449 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 18^TH DAY OF JUNE, 2024

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BEFORE

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THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ

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CIVIL REVISION PETITION NO. 449 OF 2018 (IO)

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BETWEEN:

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SRI. BHAGYARAJU S/O. MAHENDRA, AGED ABOUT 34 YEARS # 39, 5TH MAIN, 7TH CROSS, PANCHASHEELANAGARA, MOODALAPALYA, BENGALURU - 560 072.

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…PETITIONER

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(BY SRI SHANKAR G., ADVOCATE)

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AND:

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SMT PREMA Digitally signed by W/O. C. NAGARANA GOWDA, NARAYANAPPA AGED ABOUT 51 YEARS LAKSHMAMMA Location: HIGH # 694/7, 11TH CROSS, COURT OF 5TH MAIN ROAD, KARNATAKA VIJAYANAGARA, BENGLAURU – 560 072.

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…RESPONDENT

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(BY SRI S.A. MARUTHI PRASAD., ADVOCATE)

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THIS CRP IS FILED UNDER SECTION 115 OF CPC, PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 31.05.2018 PASSED BY THE PRINICIPAL SENIOR CIVIL JUDGE AND CHIEF JUDICIAL MAGISTRATE, MANDYA, IN F.R.NO.43/2018, PRODUCED AT ANNEXURE-E.

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NC: 2024:KHC:21687 CRP No. 449 of 2018

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner is before this Court seeking the following reliefs:

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Wherefore, the petitioner most respectfully prays that, this Hon’ble court be pleased to issue a writ of certiorari, or any other writ, order or direction;

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a) Call for the records;

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b) Set-aside the impugned order dated 31.05.2018 passed by the Principal Senior Civil Judge and Chief Judicial Magistrate, Mandya, in F.R. No.43/2018, produced at Annexure-E.

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c) Direct the trial Court to register the suit, adjudicate and dispose of the case on merits expeditiously and pass such other or further orders as this Hon’ble Court deems fit in the facts and circumstances of the case, in the interest of justice and equity.”

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The petitioner had filed a suit, which came to be registered as F.R.No.43/2018 before the Senior Civil Judge and JMFC, at Mandya. The suit was filed in the year 2018, and the Registry had put up a note stating that the agreements are dated 26.08.2011 and 09.02.2012. Hence, arguments were heard on the aspect of limitation. On 14.03.2018, the matter

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was first taken up for hearing. Thereafter, further arguments were heard and on 31.05.2018, the suit came to be dismissed as not maintainable and not liable to be registered on account of the suit being barred by limitation.

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While coming to the said conclusion, the trial court held that the limitation period for the recovery of money would commence from the date of the agreement. However, if a suit for specific performance had been filed seeking for an alternative relief of recovery of money, then it is from the date of refusal that the limitation period would have to be calculated. It is challenging the same, that the petitioner is before this Court seeking for the aforesaid reliefs.

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The submission of the learned counsel for the petitioner is that;

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4.1. the agreement was executed on 09.12.2012, and an amount of Rs.3,00,000/- has been acknowledged to have been received by the

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defendants. The plaintiff had issued a notice on 08.03.2016 calling upon the defendants to execute the sale deed. In reply thereto, on 14.03.2016, the respondents took up the stand that the amount has been forfeited and thereafter, at the request of the plaintiff and his friends, the agreement came to be cancelled and the amount was refunded, and it is in that background it was contended that the agreement of sale does not continue to be valid, the amount having been paid on 6.2.2016.

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4.2. Subsequent thereto, the plaintiff did not file a suit for specific performance but chose to file a suit for recovery of money and it is in that background that the impugned order was passed.

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4.3. His submission is that, it is only after the reply notice was received that the petitioner was put to a choice/election of seeking for specific

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performance or recovery of money, the petitioner having chosen to file a suit for recovery of money the period of limitation would have to be calculated from the date on which the reply notice was issued and not from the date on which the agreement was executed.

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Learned counsel for respondent who has entered appearance before this Court submits that the trial Court has, by way of its order, performed substantial justice, in as much as in terms of the agreement, the sale deed was to be executed within three months by making payment of full consideration. The said sale deed not having been executed as required by May2012, the notice itself was issued belatedly on 8.3.2016. The reply thereto recorded the cancellation of the agreement of sale and refund of the monies.

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It is thereafter the suit came to be filed seeking for recovery of money, the suit for specific performance being barred by limitation the question of suit for recovery of money being valid and within time would

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NC: 2024:KHC:21687 CRP No. 449 of 2018

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not arise and this aspect has rightly taken into consideration by the trial Court.

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Heard Sri.Shankar.G., learned counsel appearing for the petitioner and Sri.S.A.Maruthi Prasad., learned counsel appearing for respondent. Perused papers.

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8. A short question that would arise for consideration of this Court is;

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“Whether a trial Court at the initial stage when the suit was not yet numbered decide on aspect of limitation and dismiss the suit”.

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The facts are not in dispute except for the aspect of the return of the monies. The plaintiff contended that the money had not been returned, but the defendant contended that the money had been returned in the reply notice. The agreement being executed on 9.2.2012, notice having been issued on 8.3.2016, reply having been issued on 14.3.2016 are not in dispute.

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Insofar as the limitation period for instituting a suit for specific performance is concerned, the limitation

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period being three years, the date for calculation of the limitation period would have to be reckoned from the date on which the defendant had refused the specific performance unless the date for performance has already been fixed in the agreement of sale.

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In the present case, by relying on the period of three months in the agreement of sale, learned counsel for the respondent submits that it is within the said three months that the sale deed had to be executed and if not so executed the period of limitation would commence from the end of that period of three months and not from date of issuance of notice or the reply notice.

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Having gone through the agreement, it cannot now be clearly and categorically stated that the time for execution of the agreement or a date for performance was fixed, there being mutual reciprocal obligations. It is also not clear if time was the essence of the agreement or not. The aspect of whether the time was the essence of the contract or

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not would have to be established during the course of trial and cannot be decided on the basis of the averment made in the plaint itself. Whether time is of the essence of the contract and whether the particular time period has been fixed or not being required to be determined during the course of the trial, the only other aspect that is available for consideration before this Court is the notice issued by the plaintiff on 8.3.2016 and the reply issued on 14.3.2016. In the notice issued by the plaintiff, the plaintiff sought specific performance; in the reply issued by the defendant, it was contended that the agreement had been cancelled and the amount refunded on 6.2.2016.

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Thus, ex-facie, even as of 6.2.2016 , the agreement was kept alive and came to an end only on 6.2.2016. Thus, I cannot, at this stage, hold on expiry of three months from the date of the agreement, the agreement came to an end. Insofar as the aspect of return of the money or otherwise, the same would

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have to be established during the course of the trial. The contention of the plaintiff and defendant being contrary to each other.

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The period of limitation is to be calculated in terms of Article 54 of the Limitation Act. Insofar as the suit for specific performance is concerned, as observed above, is a period of three years from the date on which the agreement was to be performed and/or the date of refusal by returning to perform. If that aspect is taken into consideration, the period of limitation would have to be calculated from 14.3.2016, that being the first communication addressed by the defendants to the plaintiff, there being no earlier correspondence refusing performance and/or putting the agreement to an end by way of termination or cancellation.

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Thus, if a suit had been filed within three years from 4.3.2016, the same would have to be considered to be within time in terms of Article 54 of the Limitation

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NC: 2024:KHC:21687 CRP No. 449 of 2018

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Act, in so far as a suit for specific performance is concerned.

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I am unable to appreciate the reasoning of the trial Court distinguishing a suit for specific performance from a suit for recovery of money for calculation of the period of limitation by holding that the period of limitation in a suit for specific performance is three years from the date of refusal but as regards a suit for recovery of money the period of limitation of three years has to be calculated from the date of the agreement.

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The said distinction is completely artificial in as much as, if a suit for specific performance with or without an alternative relief for recovery of money were to be filed within three years from 14.3.2016, the same would be held to be within the period of limitation. However, if only a suit for recovery of money was filed after the reply notice was issued, the same has been held to be barred by limitation by calculating

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NC: 2024:KHC:21687 CRP No. 449 of 2018

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the date of commencement of the limitation to be the date of the agreement.

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The trial Court has confused itself as regards the claim for recovery of money on the basis of an agreement of sale by giving up the relief of specific performance and that of a pure and simplicitor suit for recovery of money.

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The said finding cannot be supported either under Article 54 of the Limitation Act or any law in force. The distinction being artificial, I am unable to uphold the same. In that view of the matter, I pass the following;

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ORDER

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i. The Civil Revision Petition is allowed .

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ii. The order dated 31.5.2018 passed by the Principal Senior Civil Judge and Chief Judicial Magistrate, Mandya in FR No.43/2018 at Annexure-E is set aside.

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iii. The trial court is directed to register the suit and proceed with the matter in accordance with the law.

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iv. All questions are left open, it is made clear that the observations made herein are only prima facie for purposes of consideration of the limited issue raised in the present petition the trial court shall decide the suit without being influenced by any observations made herein.

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Sd/JUDGE

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JJ/SR List No.: 1 Sl No.: 42

Sri. Bhagyaraju v. Smt Prema

Case brief

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Sri. Bhagyaraju v. Smt Prema

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