Case Note & Summary
The dispute arose from an agreement to sell dated 01.09.2004 and a final agreement dated 19.11.2004 between the plaintiff (respondent) and the defendant (appellant) for sale of property. The sale deed was to be executed before 29.09.2006. The plaintiff claimed to have paid Rs. 92,500/- in installments between 2004 and 2005. The defendant failed to perform, leading to legal notices in 2011 and a suit for specific performance or refund of earnest money filed on 18.06.2011. The defendant contested, pleading limitation and denying the agreement. The trial court held that the agreement existed and the plaintiff was ready and willing, but the suit was barred by limitation under Article 54 of the Limitation Act, 1963 (three years from 29.09.2006). Despite this, the trial court granted a decree for refund of Rs. 92,500/-. The defendant appealed to the first appellate court, which remanded the matter for fresh trial, allowing the plaintiff to amend the plaint to include a refund prayer. The defendant appealed to the High Court. The High Court found that the trial court had already decided the suit on merits and held it barred by limitation; the first appellate court could not remand under Order 41 Rule 23A CPC as the suit was not disposed of on a preliminary point. The High Court held that the decree for refund was without jurisdiction since the suit was barred by limitation, and the appellate court should have set aside the decree. The High Court allowed the appeal, set aside the remand order, and dismissed the suit as barred by limitation, with no order as to costs.
Headnote
A) Civil Procedure Code, 1908 - Order 41 Rule 23A - Remand - When trial court decides suit on merits but also holds suit barred by limitation, appellate court cannot remand for fresh trial on same issues - Held that the first appellate court erred in remanding the matter when the trial court had already adjudicated the suit and granted alternative relief, and the finding of limitation was not challenged by the plaintiff (Paras 8-10). B) Limitation Act, 1963 - Article 54 - Suit for Specific Performance - Limitation period of three years from date fixed for performance - Suit filed in 2011 for agreement where sale deed was to be executed before 29.09.2006 - Held that the suit was clearly barred by limitation, and the trial court's finding on limitation was correct (Paras 3, 5, 8). C) Specific Relief Act, 1963 - Section 20 - Alternative Relief - Refund of Earnest Money - Trial court granted refund of Rs. 92,500/- despite holding suit barred by limitation - Held that such decree was without jurisdiction as the suit was barred by limitation; the appellate court should have set aside the decree instead of remanding (Paras 5, 8, 10).
Issue of Consideration
Whether the first appellate court was justified in remanding the suit for fresh trial after the trial court had already held the suit barred by limitation and granted alternative relief of refund.
Final Decision
The High Court allowed the appeal, set aside the impugned order of the first appellate court dated 30.01.2023, and dismissed the suit as barred by limitation. No order as to costs.
Law Points
- Limitation Act
- 1963
- Article 54
- Specific Relief Act
- Section 20
- Order 41 Rule 23A CPC
- Remand
- Bar of limitation
- Suit for specific performance
- Refund of earnest money
