VICTORIA ENTERPRISES LTD v. Mohan S Lalwani
Rejection of Plaint - Continuing Breach of MOFA Obligations Extends Limitation Period and Trustee Standing under Order XXXI CPC.
Court: Bombay High Court
Citation: 2026:BHC-OS:6569
Decision Date: 09-03-2026
List of Laws
The Code of Civil Procedure, 1908; The Limitation Act, 1963; The Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963; Specific Relief Act, 1963; Commercial Courts Act, 2015
- Facts: The plaintiff, Dnm Trustee Service Private Ltd, filed a commercial suit in 2015 for specific performance of an agreement dated February 2, 2008, executed by Victoria Enterprises Limited (Defendant No. 1). The agreement involved the conveyance of property and delivery of possession by March 31, 2008. The property was subsequently involved in a series of legal instruments, including a partition deed in 2013 and the creation of a discretionary trust in 2014, making the plaintiff the trustee. Defendant No. 1 sought rejection of the plaint, arguing that the suit was barred by limitation as possession was due in 2008, and that the plaintiff lacked a cause of action or standing as a sole trustee. The plaintiff contended that the breach was continuous and that their right to sue was established through the subsequent registered deeds of partition and trust.
- Procedural Posture: The matter came before the Bombay High Court via an Interim Application filed by Defendant No. 1 under Order VII Rule 11(a) and (d) of the Code of Civil Procedure, 1908, seeking rejection of the plaint.
- Issue: Should the plaint be rejected at the threshold on the grounds of being barred by limitation and for lack of a cause of action?
- Holding: No, the application for rejection of the plaint was rejected with costs of Rs. 50,000/-.
- Reasoning: The Court reasoned that the plaintiff's right to maintain the suit was sufficiently supported by the pleaded deeds of partition and trust, and under Order XXXI Rule 1 of the CPC, a trustee may represent the beneficiaries. Regarding limitation, the Court applied Section 22 of the Limitation Act and the principle established in "Samruddhi Co-operative Housing Society vs. Mumbai Mahalaxmi Construction Private Limited", holding that non-compliance with statutory obligations under the Maharashtra Ownership of Flats Act (MOFA) constitutes a "continuing breach". A fresh period of limitation runs at every moment the breach continues, making the plea of limitation a triable issue. The Court further noted that the power under Order VII Rule 11 is drastic and must be used strictly; since the plaint disclosed a cause of action and raised triable issues, it could not be rejected at the threshold.
🔒 For Members Only