High Court
Legal Reasoning
{1} cra 124.24 R.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADCIVIL REVISION APPLICATION NO. 124 OF 20241.Rohit Enterprises,Through its Proprietor,Mr. Gopal Baban JadhavAge 57, Occ. Business.2.Mrs. Sujata Gopal Jadhav,Age 52 yea rs, Occ. Home maker,3.Rohit Gopal Jadhav,Age 30, Occ. Home MakerAll residing at Shri Krupa Agency,Building No.D-1, Room No.4,Sector 22, Koparkhairna,Maharashtra – 400 709... Applicants,( Original defendants)Versus1. Mr. Babasaheb Ramdas Shirole,Age 48 years, Occ. Teacher,Residing at Ne ar Pirbaba Temple,At post Akalapur, Taluka Sangamner,Akalapur, Ahmednagar, Maharashtra 422 620.2.Mr. Rambhau Karbhari Hande,Age 47 years, Occ. Teacher,Residing at Wadegaon Landaga,Hande Wasti, Sangamner,Ahmednagar.3.Mr. Santosh Dattatraya ShelkeAge 47 years, Occ. Teacher,Residing at Gondhale Vaste, Bota,Sangamner, Ahmednagar.4.Mr. Bhausaheb Bajirao Dhokare, {2} cra 124.24 R.odtAge 48 years, Occ. Occ. Teacher,Residing at Mohanwadi, at PostKauthae, Khurd, Ghargaon,Ahmednagar, Maharashtra 422 620.5.Mr. Suresh Sitaram Dhokare,Age 50 years, Occ. Teacher,Residing at Khote Kd, Post Kothe,Bk. Tal. Sangamner, Kauthe KhurdAhmednagar, Maharashtra 422 620.6.Mr. Dadabhau Balasaheb Belote,Age 48 years, Occ. Teacher,Residing at Sawargaon, TalukaAhmednagar, Maharashtra 422 605.7.Mr. Balu Dashrath Karpe,Age 53 years, Occ. Teacher,Residing at Pimparne, Near MarutiTemple, Sangamner, Ahmednagar.8.Mr. Satyawan Rakhma Gadge,Age 45 year s, Occ. Teacher,Residing at Gavthan at Borban,Post Ghargaon, Taluka Samgamner,Borbanwadi, Ghargaon, Ahmednagar.Maharashtra 422 620.9.Dattu Gangadhar Thitame,Age 56 years, Occ. Teacher,Residing at Post Sawargaon, TalukaSangamner, District Ahmednagar.10.Mr. Laxman Karbhari Hande,Age 49 years, Occ. Teacher,Residing at Post Vadgaon Landga,Taluka Sangamner, Hande Vasti,Wadegaon Landga, Ahmednagar.Maharashtra 422 603... RESPONDENTS( Original plaintiffs.) {3} cra 124.24 R.odt Mr. A.A. Fulfagar, Advocate for applicants.Mr. V.B. Gadekar, Advocate for respondent Nos. 1 to 10. CORAM : S.G. CHAPALGAONKAR, J. RESERVED ON : 27th March, 2025. PRONOUNCED ON : 9th APRIL, 2025.JUDGMENT :-1.Applicants/original defendants impugn the order dated8.4.2024 passed by Civil Judge (Senior Division) Sangamner, belowExh.13 in Special Civil Suit No. 126 of 2023, by which, the prayer forrejection of plaint under Order 7 Rule 11 of CPC, has been declined. (Forsake of convenience parties are referred as per their original status insuit)2.Respondents/plaintiffs who are teachers by professioninstituted Special Civil Suit No. 126 of 2023 seeking following reliefs :-“a)It be declared that, the plaintiffs are owner of the suit property; b)It be declared that, the sale deed dated 20th July, 2013 bearing Its Registration No. 5551 of 2013 (Annexure `D’ to the plaint) executed between the plaintiffs and defendants herein, are void-ab-initio since executed by the defendants thereby perpetuating fraud on the plaintiffs herein;c)That the Sale Deed dated 20th July, 2013 bearing registrationNo. 5551 of 2013 (Annexure D to the plaint) executed between the plaintiffs and defendants herein be cancelled and set aside;d)The defendants herein be perpetually restrained frominterfering with peaceful possession of plaintiffs over suitproperties;e)Pending hearing and final disposal of the present suit,the defendants be restrained from selling, mortgaging orencumbering the suit properties to any third party in anymanner ; {4} cra 124.24 R.odtf]Ad-interim relief in terms of prayer clause (e) above.”3.Plaintiffs contend that they jointly purchased suit plot,admeasuring 20 Gunthas bearing Survey No. 140/243/2 by registeredsale deed dated 12.12.2009. They mutually decided to develop theproperties availing professional services of a Developer and entered intoDevelopment Agreement with defendant No.1, who agreed to developthe suit property against retention of 60% construction area. DefendantNo.1 had agreed to undertake tedious paper work and concludedevelopment work expeditiously. The agreement was reduced intowriting and executed on 20.7.2013. Plaintiffs have also executed theregistered sale deed of suit property in the name of defendant No.1, toensure easy paper work against fictitious consideration of Rs.38,11,000/-. Plaintiffs parted ownership right in favour of defendantNo.1 under an impression that it would ne convenient and necessary forexpeditious development of suit properties.4.Defendants kept plaintiff assured to complete thedevelopment work. Defendant No.1 constructed column and plinth onsuit property. However, giving the reason of COVID situation, dragged thedevelopment process. Meanwhile, defendant No.1 mutated his name inrevenue record. According to plaintiffs, the sale deed is ab-initio-void andnon-est. Plaintiffs executed sale deed keeping blind faith on defendants.However, on 21.10.2023 defendants changed their behaviour and gavethreat to plaintiffs to take possession of property. Hence, cause of actionarose to file the suit.5.Defendant Nos. 1 to 3 caused their appearance and filedapplication seeking rejection of plaint below Exh.13, contending that {5} cra 124.24 R.odtplaintiffs are seeking to challenge registered sale deed dated 20.7.2013on the ground of fraud and misrepresentation. The suit is clearly barredby limitation since Article 59 of the Limitation Act provides for period ofthree years to seek declaration against sale deed. According todefendants , suit is without cause of action.6.Plaintiffs opposed the aforesaid application on the groundthat issues as raised in the application are mixed questions of fact andlaw and require trial, therefore, it cannot form as basis for rejection ofplaint under Order 7 Rule 11 of CPC.7.The trial court, after considering rival contentions, rejectedapplication on the ground that issue of limitation is mixed question oflaw and fact and cannot be decided unless evidence is led parties. Thedefendants can raise such plea in written statement and issue in thisregard can be framed and decided during trial.8.Mr. Fulfagar, learned advocate for applicants/defendantscontends that the registered sale deed dated 20.7.2013 is assailed inpresent suit, filed in month of October, 2023. A period of 10 years and 3months has elapsed. He submits that plaintiffs are seeking declarationthat sale deed is void ab initio and result of fraud on plaintiffs and samedeserves to be cancelled and set aside. Plaintiffs are further seekingsubstantial relief of perpetual injunction. According to Mr. Fulfagar,pleading as to fraud and his representation is vague and unspecific. Thecause of action of 2023 is false and camouflage. Only because value oflands is multiplied, present suit is brought with intention to extractmoney from defendants. Mr. Fulfagar, submits that suit is ex-facie barredby limitation. According to him, suit filed under Section 31 of the
Legal Reasoning
{6} cra 124.24 R.odtSpecific Relief Act, either for declaration of transaction as void orvoidable, Article 59 of the Limitation Act would attract. He submits thatthere is no allegation in the plaint regarding fraudulentmisrepresentation as regards to character and contents of documents. Insupport of his contentions, he heavily relies upon the judgments of theSupreme Court of India in the matter of :-1.C.S. Ramaswamy vs. V.K. Santhil (2022) 2 Mh.LJ. 161 and 2.Mukund Bhavan Vs. Shrimant Chhatrapati UdayanRaje andanother reported in (2025) AIR (SC) Civil 392.3.Dahiben vs. Arvindbhai Kalyanji Bhanushali (2020)7 SCC 3664.K. Akbar Ali vs. K. Umar Khan and others.(2021) 14 SCC 515.M.R. Vinoda vs. M.S. Shsheelmma and others (2021) 20 SCC 1806.Popat and Kotecha Property vs. Sate Bank of India StaffAssociation (2005) 7 SCC 510.7.Ramti Devi (smt.) Vs. Union of India (1995) 1 SCC 198.9.Per contra, Mr. V.B. Gadekar, learned advocate forrespondent Nos. 1 to 10 submits that plaintiffs are teachers, who hadpurchased the lands with intention to develop it for their own use anddue to misrepresentation by defendants, they executed sale deed withoutconsideration. Defendants initiated construction but under pretext ofCOVID they protracted the same. When plaintiffs came to know aboutbad intention of defendants to grab the property, on the basis ofregistered document, present suit has been instituted. He submits thatrejection of plaint under Order 7 Rule 11 of CPC implies drastic action toterminate civil suit, unless pleadings ex-facie disclose that suit is barredby limitation or under any law, the powers cannot be exercised. Evenwhile exercising such powers, the defence in written statement or in {7} cra 124.24 R.odtapplication for rejection of plaint is wholly irrelevant and court has toform an opinion as to existence fo cause of action or limitation only onthe basis of contents of plaint. He would urge that plaintiffs havespecifically pleaded fraud and misrepresentation against defendantswhile execution of impugned sale deed.10.The issues as raised require pleadings and evidence. Hewould further submit that in the facts of the case, Section 17 of theLimitation Act would apply. Therefore, unless plaintiff’s discoveredfraud, period of limitation would not begin to run. Plaintiffs have clearlymentioned the date when they came to know about the bad intention ofdefendants to grab the property and immediately instituted suit.Therefore, he urges to maintain the order passed by the trial court. Insupport of his contentions, he relies upon the judgment of the SupremeCourt in case of R.V. Guru Raj Reddy Vs. T. Narsimha Reddy reported inAIR 2015 SC 2485.11.Having considered submissions advanced by learnedadvocates for respective parties and upon going through the materialpressed into service, it can be observed that undisputedly plaintiffsexecuted registered sale deed dated 20.7.2013 in favour of defendants.Plaintiffs are teachers and educated persons having sufficientunderstanding of transactions. They contend that they entered intodevelopment agreement with defendant No.1 with intention to developthe land. Copy of notarized development agreement is made part of theplaint. Apparently, date of development agreement is 20.7.2013,wherein, it is agreed between parties that defendant would develop landsand construct building containing flats as per the Build up area, 40% partof construction to be handed over to plaintiffs and 60% was to be given {8} cra 124.24 R.odtto the share of developers. Clause No.7 of the development agreementstipulates that suit land is agricultural land and same is handed overwithout consideration to the developer. The impugned registered saledeed is dated 20.7.2013 by which suit property has been alienated byplaintiffs in favour of defendants for consideration of Rs. 38.11,000/-.12.In the aforesaid set of pleadings and material, the issue thatrequires consideration is, whether the suit of plaintiff is ex-facie barredby limitation and whether suit is based on genuine cause of action aspleaded in plaint. Before entering into controversy, it is necessary toconsider the parameters of jurisdiction under Order 7 Rule 11 of CPC,which are broadly accepted as under :-[i]The averments of plaint are only germane for considerationwhile exercising jurisdiction under Order 7 Rule 11 of CPC. Thestand of defendants either in written statement or application forrejection of plaint is wholly immaterial;[ii]When plaint ex-facie do not disclose cause of action or onreading thereof, the suit appears to be barred under any law, plaintcan be rejected.[iii]Claim of plaintiffs as regards to knowledge of essential facts giving rise to cause of action as pleaded will have to be accepted ascorrect;[iv]When allegations made in the plaint are taken to be correct as a whole, on their face value, if they show that suit is barred by law or do not disclose cause of action for rejection of plaint can be entertained and power under order 7 rule 11 can be exercised.[v]If clever drafting of plaint as created illusion of cause of action, the court will nip it in bud at the earliest so that bogus litigation will end at the earliest.13.In the light of aforesaid principles of law, discernible from {9} cra 124.24 R.odtthe exposition of law laid down by Supreme Court in various judgments,following aspects emerging from careful reading of plaint can behighlighted.[i]Plaintiffs are well educated group of teachers. They entered into development agreement with defendants and also executed registered sale deed dated 20.7.2013. The sale deed stipulate payment of consideration;[II]The plaintiffs also executed development agreement with defendant No.1.[iii]Defendant No.1 started construction work/progressed to certain extent. There was no progress after plinth level.[iv]From the date of registration of sale deed or development agreement, plaintiffs never issued any communication or legal notice, calling upon defendants to expedite construction or raising their grievances, as to progress of construction;[v]The suit is instituted alleging that plaintiffs executed sale deed due to misrepresentation that for expeditious development of property, tedious paper work, execution of sale deed in favour of defendant no.1 is necessary and it would be convenient for development of timely completion of project;[vi]Lastly, on 21.10.2023, plaintiffs came to know about intention of defendants to defraud them or grab the property. As such, they filed suit.14.The aforesaid factual scenario clearly shows that plaintiffswere well aware that execution of sale deed in favour of defendantwould pass on title to him. They were well aware about the contents ofsale deed and significance thereof. They felt defrauded only whendefendant No.1 failed to keep his promise as to development of plot. INthis background, plaintiffs are seeking declaration that the sale deed {10} cra 124.24 R.odtdated 20.7.2013 is void-ab-initio. It is trite that Article 59 of theLimitation Act, enables institution of suit to cancel or set asideinstrument within a period of 3 years from the date of knowledge, bar oflimitation cannot be saved by simply pleading fraud. In present case, theallegations constituting fraud are not based on contents of documents.Even essential particulars of fraud are missing. In this background, theobservations of Supreme Court of India in the matter of C.S. Ramaswamy(supra) are relevant, which read thus :-“7.7 Even the averments and allegations with respect to knowledgeof the plaintiffs averred in paragraph 19 can be said to be toovague. Nothing has been mentioned on which date and how theplaintiffs had the knowledge that the document was obtained byfraud and/or misrepresentation. It is averred that the allegedfraudulent sale came to the knowledge of the plaintiffs only whenthe plaintiffs visited the suit property. Nothing has been mentionedwhen the plaintiffs visited the suit property. It is not understandablehow on visiting the suit property, the plaintiffs could have knownthe contents of the sale deed and/or the knowledge about thealleged fraudulent sale.7.8 Even the averments and allegations in the plaint with respect tofraud are not supported by any further averments and allegationshow the fraud has been committed/played. Mere stating in theplaint that a fraud has been played is not enough and the allegationsof fraud must be specifically averred in the plaint, otherwise merelyby using the word “fraud”, the plaintiffs would try to get the suitswithin the limitation, which otherwise may be barred by limitation.Therefore, even if the submission on behalf of the respondents –original plaintiffs that only the averments and allegations in theplaints are required to be considered at the time of deciding theapplication under Order VII Rule 11 CPC is accepted, in that case also by such vague allegations with respect to the date ofknowledge, the plaintiffs cannot be permitted to challenge thedocuments after a period of 10 years. By such a clever drafting andusing the word “fraud”, the plaintiffs have tried to bring the suitswithin the period of limitation invoking Section 17 of the {11} cra 124.24 R.odtlimitation Act. The plaintiffs cannot be permitted to bring the suitswithin the period of limitation by clever drafting, which otherwiseis barred by limitation.”15.In the case of Mukund Bhavan (supra) the Supreme Courtobserved in para. 26 as under :-“ At this juncture, we wish to observe that we are not unmindful ofthe position of law that limitation is a mixed question of fact andlaw and the question of rejecting the plaint on that score has to bedecided after weighing the evidence on record. However, in caseslike this, where it is glaring from the plaint averments that the suitis hopelessly barred by limitation, the Courts should not be hesitantin granting the relief and drive the parties back to the trial Court.We again place it on record that this is not a case where any forgeryor fabrication is committed which had recently come to theknowledge of the plaintiff. Rather, the plaintiff and his predecessorsdid not take any steps to assert their title and rights in time. Thealleged cause of action is also found to be creation of fiction.However, the trial Court erroneously dismissed the application filedby the appellants under Order VII Rule 11(d) of CPC. The HighCourt also erred in affirming the same, keeping the question oflimitation open to be considered by the trial Court after consideringthe evidence along with other issues, without deciding the coreissue on the basis of the averments made by the Respondent No.1in the Plaint as mandated by Order VII Rule 11 (d) of CPC. Thespirit and intention of Order VII Rule 11(d) of CPC is only for theCourts to nip at its bud when any litigation ex facie appears to be aclear abuse of process. The Courts by being reluctant only causemore harm to the defendants by forcing them to undergo the ordealof leading evidence. Therefore, we hold that the plaint is liable tobe rejected at the threshold.”16.Looking to the aforesaid exposition of law in facts of presentcase, it can be observed that averments of fraud and misrepresentationno way constitute requisite ingredients. Even otherwise, Article 59 of theLimitation Act, would apply in fact s of present case, which read thus :- {12} cra 124.24 R.odt“ Article 59 reads thus :"To cancel or set aside an instrument or decree or for the rescission of a contract.ThreeyearsWhen the facts entitling the plaintiff to have the instrument or the contract rescinded first become known to him."17.In present case, when plaintiffs have executed registered saledeed knowing its contents well, it can not be said that they wereunaware about the nature of transaction. Even otherwise, if they had afeeling of being defrauded, there was no impediment for taking actionwell within 3 years. Although learned advocate for respondent heavilyrelied upon Section 17 of the Limitation Act, for the reason as recordedby the Supreme Court of India in the case of C.S. Ramaswamy (supra)such a plea would not be available to be raised after 10 years ofexecution of registered sale deed.18.At this juncture, reference to observations of Supreme Courtin case of Saranpal Kaur Anand vs. Praduman Singh Chandhok reportedin (2022) 8 SCC 401. Pertinently, para Nos. 11,14 and 16 read thus :-“11.The general principle, which also manifests itselfin Section 17 of the Limitation Act, is that every person ispresumed to know his own legal right and title in the property, andif he does not take care of his own right and title to the property, thetime for filing of the suit based on such a right or title to theproperty is not prevented from running against him. The provisionsof Section 17(1) embody fundamental principles of justice andequity, viz. that a party should not be penalised for failing to adoptlegal proceedings when the facts or the documents have beenwilfully concealed from him and also that a party who had actedfraudulently should not be given the benefit of limitation running inits favour by virtue of such frauds.9 9 Pallav Sheth v. Custodianand Others, (2001) 7 SCC 549 However it is important toremember that Section 17 does not defer the starting point oflimitation merely because the defendant has committed afraud. Section 17 does not encompass all kinds of frauds, but {13} cra 124.24 R.odtspecific situations covered by clauses (a) to (d) to Section 17(1) ofthe Limitation Act. Section 17(1)(b) and (d) encompass only thosefraudulent documents or acts of concealment of documents whichhave the effect of suppressing knowledge entitling the party topursue his legal remedy. Once a party becomes aware of antecedentfacts necessary to pursue legal proceedings, the period of limitationcommences.14.The word ‘diligence’ read with the word ‘reasonable’in the context of Section 17(1) of the Limitation Act is subjectiveand relative, and would depend upon circumstances of which theactor called upon to act reasonably, knows or ought to know. Vagueclues or hints may not matter. Whether the plaintiff/applicant hadthe means to know the fraud is a relevant consideration. It ismanifest that Section 17(1) of the Limitation Act does not protect aparty at fault for failure to exercise reasonable diligence when thecircumstances demand such exercise and on exercise of which theplaintiff/applicant could have discovered the fraud. When the timestarts ticking subsequent events will not stop the limitation. Thetime starts running from the date of knowledge of thefraud/mistake; or the plaintiff/applicant when required to exercisereasonable diligence could have first known or discovered the fraudor mistake. In case of a concealed document, the period oflimitation will begin to run when the plaintiff/applicant had themeans of producing the concealed document or compelling itsproduction.16.Rules of pleadings relating to fraud and exemptionfrom law of limitation are set out in Order 6 Rule 4 and Order 7Rule 6 of the Code. Order 6 Rule 4 lays down that in all caseswhere a party pleading relies upon fraud, particulars with respect tothe date and item, if necessary, shall be stated in the pleadings. Thefraud as alleged in the plaint must state those facts which togethertaken as a whole, if proved, would show and establish fraud.Pleading of fraud should be conspicuous and palpable, and shouldnot be predicated on mere suspicion and conjecture. Of course, thecourt, at the initial stage when deciding an application under clause(d) to Order 7 Rule 11 has to proceed under demurrer, andtherefore, should accept the facts as alleged in the plaint, but can ina given case draw irrefutable inferences from the facts stated….” {14} cra 124.24 R.odt19.Apparently, pleading in the plaint as to cause of action isnothing but clever drafting by using the word fraud and an attempt tobring suit within limitation by invoking Section 17 of the Limitation Act.20.In the result, this Court holds that suit of the plaintiff isclearly barred by limitation based on fictitious cause of action andvexatious in nature. In the result, Civil revision application deserves tobe allowed. Hence, following order :O R D E R[I]Civil revision application is allowed;[ii]Impugned order dated 8.4.2024 passed by Civil Judge(Senior Division) Sangamner, below Exh.13 in Special Civil Suit No. 126of 2023 is hereby quashed and set aside :[iii]Application filed by defendants below Exh.13 for rejection ofplaint stands allowed;[iv]Consequently, plaint in Special Civil Suit No. 126 of 2023pending before Civil Judge (S.D.), Sangamner stands rejected underOrder 7 Rule 11 of CPC. [v]In the circumstances, there shall be no orders as to costs.[S.G. CHAPALGAONKAR, J] At this stage, learned advocate appearing for the respondentssubmit that operation of this order be stayed for six weeks sincerespondents wish to approach the Honourable Supreme Court. {15} cra 124.24 R.odtConsidering the submissions advanced, operation of thisorder shall be kept in abeyance for a period of six weeks from today.[S.G. CHAPALGAONKAR, J]grt/-