Sri B Jayaram Vs G M S Constructions Private Limited — Karnataka HC (2025) — LawSathi Research

Sri B Jayaram Vs G M S Constructions Private Limited — Karnataka HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

Appeal allowed; judgment and decree dated 06.11.2008 set aside on the ground of limitation. Equitable directions on monies: out of the Rs.8,00,000/- deposited under the interim order dated 20.11.2014 (withdrawn by the plaintiff), if the entire amount has not been withdrawn, Rs.1 lakh with accrued interest is to be refunded to appellant No.1, while the remaining amount is to be withdrawable by the plaintiff/respondent with proportionate interest, approximately Rs.1,00,000/- (court fee) remaining with the plaintiff.

Issue for consideration

When did the cause of action / limitation arise for the money suit seeking refund of the advance (and liquidated damages) - on expiry of four months from the agreement (or the plaintiff's knowledge that government permission was required and not being obtained), or only from the notice dated 12.07.2003 demanding refund? +2 more

Court's answer

Limitation for the money-claim suit (refund of the advance and liquidated damages under clause (7) of the agreement) began soon after expiry of four months from the date of the agreement - when the plaintiff learnt that government permission was required and was not being taken by the defendants - and the suit had to be filed within three years therefrom; it did not begin from the date of the refund notice.

Ratio / Principle

The suit, filed in 2004 almost eight years after the agreement, was admittedly not filed within three years of the plaintiff's knowledge of the need for government permission or of the expiry of four months from the agreement; it was therefore barred by limitation.

Key takeaways

The trial court's findings that the suit was within time and not barred by limitation were incorrect; on this short ground alone the impugned judgment and decree were set aside and the appeal allowed.ratio¶74

Detailed headnote1 paragraphs

Limitation - money suit for refund of advance under an agreement to sell dated 04.12.1995 stipulating four months for execution/registration - cause of action arose on expiry of the four-month period, when the plaintiff knew government permission was required and was not being obtained by the defendant-vendors, and not from the refund notice (Exhibit P2, 12.07.2003) - suit filed in 2004, nearly eight years after the agreement, beyond the three-year period, was time-barred - trial court's finding that the suit was within time set aside - Regular First Appeal under Sec. 96 CPC allowed, decree reversed on that short ground - equitably, out of Rs.8,00,000/- deposited under interim order dated 20.11.2014, Rs.1 lakh with accrued interest refunded to appellant No.1, balance left withdrawable by the plaintiff with proportionate interest, approx. Rs.1,00,000/- (court fee) retained by the plaintiff.

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5^TH DAY OF NOVEMBER, 2025

PRESENT

THE HON'BLE MR. JUSTICE D K SINGH AND

THE HON'BLE MS. JUSTICE TARA VITASTA GANJU REGULAR FIRST APPEAL NO. 1593 OF 2014

BETWEEN:

SRI B JAYARAM S/O JAYASURYA AGED ABOUT 64 YEARS R/A NO.709, 9A MAIN IST STAGE, INDIRANAGAR 2ND STAGE, BANGALORE-560038.

Digitally signed by S NOORUNNISABEGUM Location: HIGH COURT OF KARNATAKA, BENGALURU

SRI A AZIZ KHADER S/O ABDUL KHADER AGED ABOUT 54 YEARS R/A NO.42, DCOSTA SQUARE 2ND SQUARE, COOKE TOWN BANGALORE- 560002.

(BY SRI. S V GIRIDHAR., ADVOCATE)

…APPELLANTS

AND:

G M S CONSTRUCTIONS PRIVATE LIMITED NO.175, C S T ROAD BACK OF ICHIBAAN HONDA SANTRA CRUZ EAST, KALINA MUNBAI REPRESENTED BY ITS AUTHORISED REPRESENTATIVE SRI GOPAL TIWARI- 400001.

…RESPONDENT

(BY SRI. AMIT MANDAGI., ADVOCATE)

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THIS RFA IS FILED U/SEC.96 OF CPC, AGAINST THE

JUDGMENT AND DECREE DATED 06.11.2008 PASSED IN O.S.15910/2004 ON THE FILE OF THE IV-ADDL. CITY CIVIL AND SESSIONS JUDGE, MAYO HALL UNIT, BENGALURU, PARTLY DECREEING THE SUIT FOR RECOVERY OF MONEY.

THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE D K SINGH and

HON'BLE MS. JUSTICE TARA VITASTA GANJU

ORAL JUDGMENT

(PER: HON'BLE MR. JUSTICE D K SINGH)

The present Regular First Appeal has been filed by the defendants against the judgment and decree dated 06.11.2008, passed by the VI^TH City Civil and Sessions Judge, Mayo Hall Unit, Bengaluru (CCH-21) in Original Suit No.15910 of 2004, instituted by the respondent/plaintiff.

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The suit was for recovery of Rs.14,83,330/-,

with future interest at the rate of 24% per annum and costs, in respect of an agreement to sell dated 04.12.1995, entered into between the defendants and the plaintiff. Clause-(iii) of the said agreement to sell, the time stipulated for execution and registration of the sale deed

was prescribed as four months from the date of the agreement. Clause-(iv) of the agreement also prescribed that the defendants / vendors had agreed that the scheduled property should be free from all encumbrances of whatsoever nature, attachment of court, aliens, mortgages etc., and the sale of the subject property should be of a clear marketable title in favour of the plaintiff. It is not in dispute that no notice was issued by the plaintiff, after the period of four months expired from the date of execution of the agreement, asking the defendants to perform their part of the agreement and stating that the plaintiff was ready and willing to perform their part of the agreement.

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The only notice which was issued was Exhibit

P2, dated 12.07.2003 in which the demand was made for

refund of the advance of Rs.5,00,000/- with interest at the rate of 24%. The liquidated damages as provided under clause-(7) of the agreement were not demanded. In the written statement filed by the defendants, a plea for dismissing the suit under Order-VII, Rule-11 of CPC was taken, as the suit being time-barred and the assertion of the plaintiff that the defendants were required to take permission from the Government to execute the sale deed in favour of the plaintiff was denied. Thus, upon considering the pleadings, the trial Court framed the following issues for consideration:

“1. Does the plaintiff prove that the defendants are due to pay a sum of Rs.14,83,330/- to it?

2. Does the plaintiff prove that it is entitled to charge interest at the rate of 24% PA?

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3. Does the 2^nd defendant prove that the

suit is barred by time?

4. What order or decree?”

So far issue No.3 is concerned, which is on limitation, the trial court held as under:

“10. Issue No.3 : The agreement of sale is dated 04.12.1995 and at the time stipulated in the agreement for execution of sale deed is four months from the date of agreement. The suit has been filed in the year 2004. As seen in the notice Exhibit-P2, sale deed could not be executed for want of obtaining permission from the defendants to sell the property. Defendants have not denied the evidence of PW-1. Harish Hegde that permission of Government was to be obtained by the defendants to execute the sale deed. Therefore, the limitation would start only when the permission required is obtained from the defendant. Therefore, the suit is within time. Hence, this issue is answered in the negative.

Thus, the trial court had held that the limitation

for filing the suit for money claim would start only after

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permission required was obtained by the defendants. When the defendants did not obtain permission, the limitation would start from the date of receipt of the notice, demanding the refund of the money advanced by the plaintiff to the defendants.

The learned counsel for the appellants / defendants has submitted that from a reading of the plaint itself, it would be evident that soon after the expiry of 4 months from the date of execution of the agreement, plaintiff came to know that the permission would be required by the defendants to transfer the land in favour of the plaintiff. Admittedly, no notice was issued by the plaintiff before the notice was issued in Exhibit-P2 on 12.07.2003. When the plaintiff had knowledge within 4 months, soon after expiry of 4 months from the date of the agreement, the plaintiff could have filed the suit or within the limitation period of three years from the date of the knowledge which he got about necessity of permission

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from the Government for transferring the land in favour of the plaintiff.

7. Admittedly, the suit was filed in the year

30.06.2004, almost after 8 years, from the date of execution of the agreement and thus the suit was clearly barred by limitation and it ought to have been dismissed. Instead of dismissing the suit on this ground alone, the suit has been decreed. Therefore, as the trial Court has committed error of law inasmuch as, the suit was barred under the law, the judgment and decree needs to be set aside.

The learned counsel was the

respondent/plaintiff submits that the limitation to claim the refund of the amount would start from the date when despite the service of notice, the plaintiff did not refund

the money, which is the date of notice i.e., 12.07.2003 and he has filed the suit within 3 years from that date, and therefore, the trial Court has correctly held that the suit

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was well within time and it was not barred by the limitation.

We have considered the submissions. In

essence, the suit filed by the plaintiff was for money claim i.e., a money suit. The question which was required to be considered by the trial Court was when the ‘cause of action’ had arisen to file the suit seeking refund of the advance amount paid by the plaintiff in pursuance to the agreement to sell. As per the averments in the plaint,

soon after expiry of 4 months from the date of the agreement to sell, the plaintiff came to know about the requirement of the permission from the Government for transferring the land and that permission was not being taken by the defendants. In our view, the limitation for

filing the money claim suit, to get refund and the liquidated damages as provided under clause-(7) of the agreement, would have began soon after the expiry of 4 months from the date of the agreement and suit could have been within 3 years from the date of expiry of four

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months from the date of the execution of the agreement. The suit admittedly was not filed within a period of 3 years from the date of the knowledge of required permission from the Government for transfer of the land or 3 years from the date of expiry of four months from the date of the execution of the agreement. As the plaintiff has come to know soon after execution of the agreement that the permission from the Government was required and the defendants were not taking permission, the suit should have been filed within period of 3 years from the said date of his knowledge about this fact.

In view thereof, we are of the view that the findings recorded by the trial Court that suit was well within the time and it was not barred by limitation is not correct, and therefore, on this short ground, we set-aside the impugned judgment and decree passed by the trial Court. Thus, we allow the appeal.

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The learned counsel for the appellant however has been gracious enough to say that his clients do not want to be unjustly enriched and he said that in compliance of the interim order passed by this Court on 20.11.2014, the appellants have deposited Rs.8,00,000/which would include Rs.5,00,000/- plus interest and the said amount has been withdrawn by the plaintiff/respondent. He therefore, submits except for the court fee paid by the plaintiff which would come around of Rs.1,00,000/-, remaining amount may be allowed to be kept with the plaintiff.

Considering the aforesaid submissions and

grace shown by the learned counsel for the appellants, we direct that if the entire amount as directed by this Court

vide the interim order 20.11.2014, has not been withdrawn by the plaintiff / respondent, except for Rs.1 lakh, the amount of Rs.1 lakh along with accrued interest

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on Rs.1 Lakh shall be refunded to the appellant No.1. The remaining amount be allowed to be withdrawn by the plaintiff / respondent along with proportionate interest thereon.

Sd/(D K SINGH) JUDGE

Sd/(TARA VITASTA GANJU) JUDGE

JJ

List No.: 1 Sl No.: 34