Latest JudgementCode of Civil Procedure, 1908The Limitation Act, 1963

Shree Construction Company v. Bagwe Housing Pvt. Ltd. & Ors., 2025

The Court made a clear distinction between contractual rights and general awareness, holding that the latter does not confer enforceable claims.

Bombay High Court·3 October 2025

Court

Bombay High Court

Date of Decision

3 October 2025

Judges

Justice Kamal Khata

Citation

Acts / Provisions

Order VII Rule 11, Civil Procedure Code (CPC) Article 58, Limitation Act, 1963

Facts of the Case

The Plaintiff, Shree Construction Company, had entered into development and construction agreements with Bagwe Housing Pvt. Ltd. (Defendant No. 1).
Defendant No. 1 had also executed a Power of Attorney in favor of the Plaintiff.
The dispute arose when two Deeds of Surrender were executed in 2006 between Defendant No. 1 and landowners (Defendant Nos. 2 to 8), and a subsequent Conveyance Deed was executed in favor of Amey Realty & Construction LLP (Defendant No. 9).
Plaintiff alleged that these transactions infringed its rights and were void due to the existing contractual arrangement with Defendant No. 1.
It argued that since Defendants 2–8 benefitted from the Plaintiff’s work, and were aware of the agreements, they were bound by the obligations under the original contract.
Plaintiff filed the suit in August 2016, although it had knowledge of the transactions as early as 2009.

Whether privity of contract existed between the Plaintiff and Defendants 2–9?
Whether mere knowledge or benefit from a transaction can create enforceable rights?
Whether the suit was barred by limitation under Article 58 of the Limitation Act?
Whether the plaint disclosed a cause of action against Defendants 2–9?
Whether the execution of a Power of Attorney conferred a right to sue non-contractual parties?

The Court allowed the application under Order VII Rule 11 CPC, holding that the plaint did not disclose any cause of action against Defendant Nos. 2 to 9.
It found no privity of contract between the Plaintiff and the Defendants, and stated that mere awareness or incidental benefit does not establish such privity.
The suit was held to be time-barred under Article 58, as it was filed well after the three-year limitation period expired in 2012.
The Court ruled that the Power of Attorney given by Defendant No. 1 does not entitle the Plaintiff to sue third parties.
It rejected the Plaintiff's argument that the delay in obtaining the Commencement Certificate extended the limitation period.

Mere awareness of a transaction or incidental benefits flowing from it cannot create privity of contract or confer enforceable rights against third parties.
The Plaintiff had no cause of action against Defendant Nos. 2 to 9.
The suit was ex facie barred by limitation.
The plaint was rightly rejected under Order VII Rule 11 CPC.

Justice Kamal Khata affirmed the well-settled contract law principle that only parties to a contract can enforce its terms, and third parties cannot sue unless they are privy to the agreement.
The Court made a clear distinction between contractual rights and general awareness, holding that the latter does not confer enforceable claims.
The ruling also reinforced the importance of limitation laws, warning that delayed legal actions cannot be justified by vague claims like “continuing obligation.”
The judgment is significant in real estate and construction law, especially where multiple parties and layered agreements are involved.
It protects subsequent purchasers and third parties from being drawn into disputes where no direct legal relationship exists.