Specific Relief Act, 1963 – Ss. 10, 16 & 20 – Agreement to sell – default to perform contract – readiness and willingness – delay in filing of suit – Appellant entered into an agreement to sale with the respondent in the year 1989 with a stipulation for completion of the sale transaction in 6 months – Despite respondent’s periodical correspondences, appellant failed to respond or perform his part of the contract – Respondent filed a suit for specific performance before the trial court – Trial court allowed the suit partly, allowing recovery of earnest money and refusing specific performance in view of the finding that the respondent could not prove readiness and willingness as at the time of filing of suit, respondent did not deposit the balance sale consideration amount in the court– Respondent appealed before High Court – High Court reversed the order of the trial court and allowed the appeal, thereby granting the relief of specific performance to the respondent – On appeal, held: The period of limitation had started running from the date the respondent noticed that the performance was refused by the appellant and not from the date of execution of agreement in question – The suit was filed by the respondent was well within the prescribed time u/Art.54 of the Limitation Act – Mere delay alone in filing the suit for specific performance, without reference to the conduct of the plaintiff, could not be a ground for refusing the said relief, when the suit was filed within the statutory time limit by the respondentplaintiff – Respondent-plaintiff had not only issued notices within the period of six months of the agreement in question, calling defendant to perform his part of contract and conclude sale, he had also showed his readiness and willingness to perform the his part of contract by proving same by stepping into witness box – There was due compliance of s. 16(c) read with its explanation on part of the respondent to perform – No illegality or infirmity in the judgment of the High Court.
Delay/Laches – Limitation - There is a distinction between limitation and delay and laches – Limitation is a ground for dismissing a suit even if the plaintiff is otherwise entitled to specific performance, while delay operates to determine the discretion and exercise under Section 20 of the Specific Relief Act, even if the suit is not dismissed on account of limitation – However, not one but several aspects have to be considered when the court, in terms of section 20 of the Specific Relief Act, exercises discretion, guided by judicial principles, sound and reasonable.
Dismissing the appeal, the Court
HELD: 1.1 The period of limitation had started running from the date the respondent noticed that the performance was refused by the appellant and not from the date of the execution of agreement in question. Even though time is not considered as the essence of the contract in case of immoveable property and that the suit could be filed within three years as provided in Article
54 of the Limitation Act, the respondent - plaintiff had to perform his part of the contract within the reasonable time having regard to the term of the agreement prescribing the time limit. The time limit prescribed in the agreement cannot be ignored on the ground that time was not made the essence of the agreement or that the suit could be filed within three years from the date fixed for performance or from the date when the performance is refused by the vendor. The suit having been filed by the respondent well within the prescribed time limit under Article 54 of the Limitation Act, the respondent could not have been non-suited on the ground of the suit being barred by limitation. As regards, the delay in filing the suit, it is very pertinent to note that the rule of equity that exists in England, does not apply in India, and so long as a suit for specific performance is filed within the period of limitation, delay cannot be a ground to refuse the relief of specific performance to the plaintiff. Mere delay alone in filing the suit for specific performance, without reference to the conduct of the plaintiff, could not be a ground for refusing the said relief, when the suit was filed within the statutory time limit by the respondentplaintiff. [Paras 9, 10, 11 & 12][208-C-G; 209-E]
1.2 Readiness and willingness are not one, but two separate elements. Readiness means the capacity of the plaintiff to perform the contract, which would include the financial position to pay the purchase price. Willingness refers to the intention of the plaintiff as a purchaser to perform his part of the contract. Willingness is inferred by scrutinising the conduct of the plaintiff/purchaser, including attending circumstances. Continuous readiness and willingness on the part of the plaintiff/purchaser from the date the balance sale consideration was payable in terms of the agreement to sell, till the decision of the suit, is a condition precedent for grant of relief of specific performance. [Para 15][212-G, 213-A]
1.3 Section 20 of the Specific Relief Act (Pre-amendment), which confers discretion on the court to exercise jurisdiction to decree of specific performance, states that this exercise should not be arbitrary, but guided by sound and reasonable judicial principles. Sub-section (2) to Section 20 of the Specific Relief Act (Pre-amendment) lists some of the principles that the court should take into consideration while exercising discretion. [Para 19][215-C-D; 216-G]
1.4 Time, it is stated, is not the essence of the contract in the case of immovable properties, unless there are grounds to hold to the contrary. This doctrine is applied, without being unfair and inequitable to the defendant/seller, as the court should not ignore that a person sells the property when he needs money, and, therefore, expects the money in the stipulated or reasonable time, which would meet the purpose of the sale. There has been a steep rise in the prices of land in the last quarter of the 20th Century in India. With the rise in property value, the value of money has fallen. At times, delay in payment would defeat the defendant/seller’s purpose. Therefore, the offer of the plaintiff/purchaser in writing and the time and occasion when the offer to pay the balance amount to the defendant/seller is an important factor which would matter when the court examines the question of discretion, that is, whether or not to grant a decree of specific performance. While examining these aspects, the quantum of money paid by the plaintiff/seller to the defendant/purchaser may become a relevant fact that merits due consideration. There is a distinction between limitation and delay and laches. Limitation is a ground for dismissing a suit even if the plaintiff is otherwise entitled to specific performance, while delay operates to determine the discretion and exercise under Section 20 of the Specific Relief Act, even if the suit is not dismissed on account of limitation. However, not one but several aspects have to be considered when the court, in terms of Section 20 of the Specific Relief Act, exercises discretion, guided by judicial principles, sound and reasonable. [Para 20][217-G; 218-A-D]
1.5 There was due compliance of Section 16(c) read with its Explanation on the part of the respondent and that it was the appellant who had failed to perform as per the terms of the agreement, though called upon by the respondent to perform. The High Court also had rightly held that the plaintiff had complied with the requirements of Section 16(c) of the said Act by making a specific pleading with regard to his readiness and willingness and also proving the same by reliable evidence. There is no illegality or infirmity in the impugned judgment passed by the High Court. Therefore, the same is confirmed. [Para 22] [219-C-D]
1.6 The agreement in question was entered into between the parties in October 1989, and considering the steep rise in the prices of land, interest of justice would be met if the respondent is directed to pay some more amount. Respondent is directed to deposit a sum of Rupees One Crore in the Trial Court towards the sale consideration, over and above the amount that might have been deposited by him. On such deposit being made, the appellant shall execute the sale deed in favour of the respondent and shall also be at liberty to withdraw the said amount deposited by the respondent. [Para 23][219-F-H; 220-A]
Mademsetty Satyanarayana vs. G. Yelloji Rao AIR 1965 SC 1405 : [1965] SCR 221; R. Lakshmikantham V.
Devaraji (2019) 8 SCC 62 : [2019] 9 SCR 1009; Smt. Katta Sujatha Reddy v. Siddamsetty Infra Projects Ltd., Civil Appeal No. 5822 of 2022; Syed Dastagir vs. T.R. Gopalakrishna Setty (1999) 6 SCC 337 : [1999] 1 Suppl. SCR 351; Sukhbir Singh v. Brij Pal Singh (1997)
2 SCC 200 : [1996] 2 Suppl. SCR 863; A. Kanthamani v. Nasreen Ahmed (2017) 4 SCC 654 : [2017] 2 SCR 610; C.S. Venkatesh v. A.S.C. Murthy (2020) 3 SCC
280 : [2020] 2 SCR 676; Kamal Kumar v. Premlata Joshi and Others (2019) 3 SCC 704 : [2019] 1 SCR 54; K.S. Vidyanadam and Others v. Vairavan (1997) 3 SCC 1 : [1997] 1 SCR 993; Saradamani Kandappan
v. S. Rajalakshmi and Others (2011) 12 SCC 18 : [2011]
8 SCR 874; Ritu Saxena vs. J.S. Grover & Another (2019) 9 SCC 132 : [2019] 13 SCR 349; Abdullakoya Haji Vs. Rubis Tharayil (2019) 17 SCC 216 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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