Limitation is a preliminary issue in Maharashtra

By Vivek Vashi and Shreya Ramesh, Bharucha & Partners
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The Supreme Court in a recent batch of matters impugning the constitutional validity of section 9A, a Maharashtra amendment to the Code of Civil Procedure, 1908 (CPC), held that section 9A is a complete departure from order XIV rule 2 of the CPC and ought not to be interfered with, and upheld the decisions of Bombay High Court in a catena of matters where issues of limitation had been framed under section 9A.

Vivek Vashi
Vivek Vashi

The special leave petitioners had challenged the constitutional validity of section 9A and contended that the term “jurisdiction” was restricted to its classical interpretation, namely, pecuniary, territorial and subject matter jurisdiction. They further argued that section 9A was inconsistent with order XIV rule 2 of the CPC, which provides for issues of law to be determined as preliminary issues. Given that limitation is a mixed question of law and fact, it was contended that it could never be determined as a preliminary issue, whether under order XIV rule 2 or section 9A.

Ferani Hotels, which led the group in support of section 9A, argued that the section is: (a) mandatory; (b) a self-contained code; and (c) at variance with and a complete departure from order XIV rule 2, given the distinction between “shall” in section 9A and “may” in order XIV rule 2. Further, it was argued that limitation was settled as being an issue of jurisdiction in a series of Supreme Court deci-sions, and that “jurisdiction” ought to be given the widest connotation and must necessarily draw colour from its context.

As section 9A was purposefully reintroduced in 1977 as a Maharashtra amendment to the CPC, and went on to attain presidential assent, there was no cause for interference. It was also noted that although amendments to the CPC were passed in 1999 and 2002, there were no amendments to order XIV rule 2. The object of section 9A, as enunciated in its statement of object and purpose, was to remedy abuse of the process of the court by plaintiffs who in bad faith would obtain injunctions from courts, which would be unjustly enjoyed until eventual dismissal of the suit for being barred by limitation.

The Supreme Court accepted Ferani’s contentions and held that section 9A is a self-contained scheme, which, when considered in the context of its notwithstanding clause, mandates that any issue going to the root of the jurisdiction of the court, such as limitation, ought to be framed and decided at the outset.

The court also declared the recent Supreme Court judgment in Kamalakar Eknath Salunkhe v Baburav Vishnu Javalkar & Ors (in which limitation was excluded as an issue of jurisdiction under section 9A), which was passed by a co-ordinate bench, as having been passed per incuriam and contrary to binding precedents of the Supreme Court.

In the long run, precious court hours in Maharashtra will be saved by weeding out time-barred claims of litigants, at the outset. However, in view of the conflicting judgments of co-ordinate benches of the Supreme Court, it is likely that review petitions will be filed, seeking a reference of the issue to a constitution bench.

Progress on real estate bill

India’s cabinet on 7 April approved amendments to the Real Estate (Regulation and Development) Bill, 2013. The bill envisages establishing a state-level regulatory authority, to be known as the Real Estate Regulatory Authority (RERA). Mindful of the vast litigation in the real estate sector, the drafters have proposed a fast-track mechanism for dispute resolution, in the form of state real estate appellate tribunals.

Shreya Ramesh
Shreya Ramesh

Under the bill, all residential real estate projects, and real estate agents dealing with these projects, must register with the RERA, failing which the projects cannot be offered for sale. To promote transparency in the floundering real estate sector, promoters would be required to upload details of projects, including site and layout plans, onto the RERA website.

In a radical initiative, the bill also requires that 50% (or such other percentage as the state government may determine) of the money collected from allottees of a project be deposited in a scheduled bank, and be used exclusively for the construction of the project.

To achieve a more synergized and swift system of approvals, the bill mandates that the RERA operate as a sole interface for various regulatory permissions, and dispose of all applications for registration within 30 days, failing which approval will be automatically deemed to have been granted.

While the bill, if implemented in the spirit of its legislation, could bring about greater accountability in the real estate sector, the question of whether parliament is empowered to legislate on issues concerning land, which falls within the domain of the states, remains to be explored.

Vivek Vashi is the mainstay of the litigation team at Bharucha & Partners, where Shreya Ramesh is an associate. Vivek Vashi represents and acts for Ferani Hotels.

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