Case Note & Summary
The case involved a suit for specific performance and a money decree filed by Export Credit Guarantee Corporation of India Ltd (plaintiff) against the trustees of PTM Family Trust (defendant nos. 1 to 3) and a cooperative society (defendant no.4). The plaintiff alleged that in 1980 it advanced a loan of Rs.93,93,420 to the trust to purchase premises in Dalamal House, and in return the trust agreed to lease the premises to the plaintiff for 20 years with a right to purchase the reversionary interest thereafter at Rs.100 per sq. ft. The plaintiff exercised this right by notice dated 16 May 2000 and sought transfer of the premises along with a money decree for amounts it had paid on behalf of the trust towards society dues. Defendant no.3 filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 seeking rejection of the plaint on the ground that the lease agreement dated 15 May 1980 was unregistered and therefore inadmissible under Section 107 of the Transfer of Property Act, 1882, that the lease expired on 14 May 2000, and that the plaintiff, being merely a tenant at sufferance, had no cause of action to enforce revisionary rights. The defendant also contended that the alleged lease deed dated 8 July 1992 was invalidly executed and its subsequent registration in 2009 did not revive the determined lease. The court heard arguments from both sides, but the provided judgment text is incomplete and does not include the court's analysis or final decision.
Issue of Consideration
Whether the plaint is liable to be rejected under Order VII Rule 11 of the Code of Civil Procedure, 1908 on the ground that it fails to disclose a cause of action and is barred by law.
Case Details
2014 LawText (BOM) (03) 77
Notice of Motion No.3897 of 2006 in Suit No.2177 of 2001
Mr. Rohit Kapadia, Senior Advocate, Mr. Simil Purohit, Mr. D.D. Juvekar, Mr. Raj Panchmatia, Ms. Meghna Rajadhakshya i/b M/s Khaitan & Co. for Defendant Nos.1 to 3 and applicant; Mr. Shyam Mehta, Senior Advocate, Mr. Faizal Sayyed i/b M/s M. K. Ambalal & Co. for plaintiff.
M/s Suresh Estates Pvt. Ltd.
Export Credit Guarantee Corporation of India Ltd.
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Nature of Litigation
Suit for specific performance of agreement to purchase revisionary rights in leased premises and for money decree; application for rejection of plaint.
Remedy Sought
Defendant No.3 sought rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908.
Filing Reason
The plaintiff filed suit alleging that under the agreement dated 15 May 1980, after expiry of 20 years, it exercised its right to purchase the reversionary interest in the suit premises at a pre-fixed price, and sought specific performance and a money decree for amounts paid on behalf of the defendants. The defendants contended that the plaint disclosed no cause of action as the lease had expired and the agreement was unregistered.
Issues
Whether the plaint is liable to be rejected under Order VII Rule 11 of the Code of Civil Procedure, 1908 on the ground that it fails to disclose a cause of action and is barred by law due to reliance on an unregistered lease agreement and the determination of the lease.
Submissions/Arguments
The alleged lease deed dated 8 July 1992 was not validly executed and the power of attorney used was unregistered. The lease agreement dated 15 May 1980 was unregistered and, therefore, inadmissible under Section 107 of the Transfer of Property Act, 1882. The lease was for a fixed term of 20 years, which expired on 14 May 2000. Consequently, there was no subsisting lessor-lessee relationship, and the plaintiff could not enforce revisionary rights.
After the expiry of 20 years, the plaintiff was a mere tenant at sufferance. No rent was paid nor consent given to hold over. The lease stood determined on 14 May 2000, and the plaintiff's purported exercise of the right to purchase on 16 May 2000 was invalid. Subsequent registration of the 1992 lease deed in 2009 did not revive the determined lease, and thus no cause of action arose. The suit was, therefore, liable to be dismissed under Order VII Rule 11(a) CPC.
Judgment Excerpts
the plaintiff exercised the alleged rights to purchase of the reversionary rights in respect of the said premises and called upon the said trust to effect the transfer
the said lease was admittedly not renewed
there was no cause of action in filing this suit
Procedural History
The plaintiff filed Suit No.2177 of 2001 in the Bombay High Court seeking specific performance and monetary relief. Defendant No.3 filed a written statement in 2005. Thereafter, defendant No.3 filed Notice of Motion No.3897 of 2006 seeking rejection of the plaint under Order VII Rule 11 CPC. The matter was heard and judgment was reserved on 7 February 2014 and pronounced on 4 March 2014.
Acts & Sections
- Code of Civil Procedure, 1908: Order VII Rule 11
- Transfer of Property Act, 1882: Section 107
- Companies Act, 1956: Section 617
- Maharashtra Cooperative Societies Act, 1960:
