Case Note & Summary
The appeal arose from an order of a Learned Single Judge of the Bombay High Court dated 24 November 2006, which allowed a motion for rejection of a counter claim under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908, on the ground that the counter claim was barred by limitation. The original suit was filed on 27 March 2000 by Shree Padmanabh Builders (the original plaintiff) against Kanayalal Madhavji Thakkar (the original defendant) seeking a declaration that the defendant had no right, title or interest in the additional FSI beyond 2455 sq.ft. under an agreement dated 1 October 1989, and for injunctive relief. The plaintiff alleged that the agreement was terminated by a letter dated 7 February 2000. The defendant filed a counter claim on 9 August 2004 seeking specific performance of the same agreement. The Learned Single Judge held that the counter claim was barred by limitation under Article 54 of the Limitation Act, 1963, as the agreement was dated 1 October 1989 and the counter claim was filed in 2004, beyond three years from the date fixed for performance. The Division Bench, in appeal, held that the cause of action for the counter claim arose from the plaintiff's termination letter dated 7 February 2000 and the filing of the suit on 27 March 2000, which denied the defendant's rights. The counter claim was filed within three years from that date and was therefore within limitation. The court set aside the order of the Learned Single Judge and allowed the appeal, directing that the counter claim be restored and heard on merits.
Headnote
A) Limitation Act - Specific Performance - Article 54 - Cause of Action - The counter claim for specific performance of an agreement dated 1 October 1989 was filed on 9 August 2004. The cause of action for the counter claim arose when the plaintiff terminated the agreement by letter dated 7 February 2000 and when the plaintiff filed the suit on 27 March 2000 denying the defendant's rights. The counter claim was within the period of limitation as it was filed within three years from the date of refusal or denial. The Learned Single Judge erred in holding that the counter claim was barred by limitation. (Paras 2-10) B) Code of Civil Procedure, 1908 - Order 7 Rule 11(d) - Rejection of Plaint - Limitation - The power under Order 7 Rule 11(d) to reject a plaint on the ground of limitation should be exercised only when the plaint is ex facie barred by limitation. In the present case, the counter claim was not manifestly barred by limitation as the cause of action arose from the termination letter and the suit. The motion for rejection was wrongly allowed. (Paras 1-10)
Issue of Consideration
Whether the counter claim for specific performance of an agreement dated 1 October 1989 was barred by limitation under Article 54 of the Limitation Act, 1963, and whether the Learned Single Judge erred in rejecting the counter claim under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908.
Final Decision
The appeal is allowed. The order of the Learned Single Judge dated 24 November 2006 is set aside. The counter claim is restored to the file and shall be heard on merits. The motion for rejection of the counter claim is dismissed.
Law Points
- Limitation Act
- 1963
- Article 54
- Order 7 Rule 11(d) CPC
- Counter claim limitation
- Cause of action for specific performance
