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Dated : July 09, 2020

Property sold -consideration allegedly not received - Supreme Court - Suit barred by limitation


Law of Limitation- Filing of Suit- Sale of immovable property - alleged non- receipt of consideration -Supreme Court explains cause of action and other issues.

In an interesting issue in the case of Dahiben Vs Arvind Bhai Kalyanji , the apex court on 9th July,2020 in Civil Appeal No 9519 of 2019 was dealing with a matter where a land was sold for Rs 1.74 crores and it was alleged that only Rs 40000 was received and the balance consideration was not received as the cheques were bogus cheques and  a suit for cancellation of the sale was filed pleading that they were illiterate who could not read and write and were only able to put their thumb impression on the sale deed. The subject land after the 1st sale was again sold by the original buyer for Rs 2.01 crores and on these facts the respondents pleaded that the suit was barred by limitation as per Order     VII Rule 11 of the Code of Civil Procedure 1908 read with Article 58 and 59 of Schedule to Limitation Act, 1963. The court noted various actions like not filing any objection in response to the public sale notice at the time of 2nd sale, having not taken any action for five years for non payment of consideration, having not produced returned cheques, bank passbook, statement etc. Also the court noted that Under Order VII Rule 11, a duty is cast on the Court to determine whether the plaint discloses a cause of action by scrutinizing the averments in the plaint, read in conjunction with the documents relied upon, or whether the suit is barred by any law. If on a meaningful reading of the plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justified in exercising the power under Order VII Rule 11 CPC. The court also dealt with the cause of action when can be said to have arisen. Finally the court interpreted the provisions of Section 54 of Transfer of Property Act as per which even if the whole of the price is not paid, but the document is executed, and thereafter registered, the sale would be complete, and the title would pass on to the transferee under the transaction. The non-payment of a part of the sale price would not affect the validity of the sale. Once the title in the property has already passed, even if the balance sale consideration is not paid, the sale could not be invalidated on this ground. On these facts the suit was declared as barred by limitation and also cost of Rs 1 lac was imposed on the plaintiff for not disclosing the facts correctly.

This judgement is a classic judgement under the CPC, Limitation Act and Transfer of Property Act and should be an eye opener to all who sale their property on the basis of cheques.

Dahiben Vs Arvind Bhai Kalyanji Download PDF

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