When the Allottees asked the promoters to enter into an agreement for sale but the Promoters did not reply and did not enter into an agreement for sale thereupon Article 54 of Limitation Act, 1963 will not apply and also when the project is ongoing Section 22 of the Limitation Act, 1963 will be applied being continuing breach of contract
M/s, Reddy Builders & Developers & ors V/s Hari Shankar Kankani & ors.
Appeal No, AT00600000053249/2021 in Complaint No. CC006000000195966 BEFORE THE MAHARASHTRA REAL ESTATE APPELLATE TRIBUNAL, MUMBAI
Fact of the main Complaint CC006000000195966:-
- Somewhere in the year 2005, The Respondents Allottees had booked a 3BHK flat under a pre-launched scheme in the project "Oregon" in Goregaon ,Mumbai undertaken by Appellants for a total consideration of Rs.38,99,740/-
- The Respondents Allottees paid an amount of Rs.6,90,000/- as booking amount which is more than 10% of the total consideration.
- The Appellant Company Reddy Builders issued allotment letter-cum-receipts to Allottees.
- The Allottees were continuously insisting the Promoters to execute the agreement for sale. Despite continuous follow-up of Allottees the Promoters conveniently avoided to execute the agreement for sale.
- The Appellant Company Reddy Builders agreed to handover the possession of the said flat to Allottees by 2012.
- However Till 2009, the Construction was not commenced due to some issue with slum dwellers.
- somewhere in the year 2021 ,being dissatisfied with the conduct of the Promoters, the Allottees filed Complaint No.CC006000000195966 and sought relief under Section 13 of the RERA Act,2016.
- The Appellant Company Reddy Builders appeared in the Complaint and remonstrated the Complaint by filing written submissions contending therein that the Complaint is liable to be dismissed primarily on following grounds viz;
- (i) there ls no cause of action
- (ii) the alleged transaction took place prior to RERA coming into force
- (iii) the Complaint is not maintainable for want of proper pleadings
- (iv) the Allottees are guilty of delay and latches
- (v) the Complaint is hopelessly barred by the law of limitation.
- On 19/04/2021 After hearing the parties learned Authority disposed of the Complaint by directing the parties as under:
- a. If the Complainants are willing to seek refund of their money, the Respondent No.1 is directed to refund the entire money paid by the Complainants along with interest as prescribed under RERA and relevant rules made thereunder.
- b. If the Complainants are willing to be in the project the Respondent is directed to allot the flat having equivalent area as booked by the Complainants. An agreement for sale may be executed in accordance with the provisions of RERA and the relevant rules."
- Being aggrieved by the Order of MahaRERA the Appellants, who are Promoters, have preferred the captioned Appeal
The Authority Framed the following Question(s) for consideration:-
Whether the Complaint is barred by the law of limitation?
Observations made by the Hon’ble Court:-
- It is not in dispute that after 2006 there was no correspondence between the parties till 2019.
- By the letters in 2019 & 2020 the Allottees asked the Promoters to enter into an agreement for sale.
- It is not in dispute that the Promoters have not replied the said letters.
- Article 54 of Limitation Act, 1963 speaks about the period of limitation for seeking specific performance of contract.
- There is limitation of three years for seeking relief of specific performance of contract.
- The period of limitation begins to run when the date fixed for performance, or, if no such date is fixed it begins when the plaintiff has noticed that performance is refused.
- In the instant case, there is no date fixed for performance of contract,
- As indicated above, by the letters, the Allottees have asked the promoters to enter into an agreement for sale. Promoters did not reply the said letters nor entered into an agreement for sale, It means the Allottees have noticed that performance of contract is refused by the promoters.
- it is not in dispute that the Promoters have commenced construction of the subject project somewhere in 2015-2016.
- Since it was an ongoing project, the Promoters have registered the project with MahaRERA and declared the date of completion of project as 31.07.2027,It means there is continuous cause of action.
- Section 22 of the Limitation Act, 1963 provides for the computation of limitation in the case of continuing breach of contract or tort. It provides that in case of a continuing breach of contract, a fresh period of limitation begins to run at every moment of time during which the breach continues.
- it relied on Samruddhi Co-operative Housing Society Limited. Vs. Mumbai Mahalaxmi Construction Private Limited Civil Appeal No 4000 of 2019 before the Supreme Court of India.
Court’s Order:-
Complaint is not barred by the law of limitation
