'Should Not Have Waited For 13 Years ': Supreme Court Dismisses Specific Performance Suit Filed In 1999 For Sale Agreement Of 1986

The Supreme Court recently set aside the decree passed in a civil suit for specific performance filed in 1999 for the enforcement of an agreement to sell executed in 1986.

A bench of Justice Rajesh Bindal and Justice Vikram Nath said that the aggrieved party should have taken remedial measures on time not waited for 13 years to file a suit for specific performance. 

According to the facts of the case, there was an agreement for sale dated 24.09.1986 of three houses executed in favour of the predecessor -in-interest of the Respondents by the predecessor-in-interest of the Appellant. One of the terms in the agreement was that the sale deed would be registered after getting permission from the Ceiling Department. The total sale consideration agreed upon was Rs. 55,000/-, out of which ₹5,000/- was paid as earnest money. The predecessor-in-interest of the respondents claimed that he was in possession of the three houses agreed to be sold to him.

Subsequently, the suit filed by the Respondents for specific performance of the agreement was decreed by the Trial Court and upheld in First Appeal and the Second Appeal thereby enforcing the agreement to sell. Challenging the decree for specific performance, the defendants appealed to the Supreme Court.

The Agreement for sale pertained to three houses, with House Nos. 258, 259 and 260. The Apex Court highlighted that the trial court had found that House Nos. 259 and 260 were in possession of the Appellant and his predecessor-in-interest for a long time. For enforcement of the agreement to sell dated 24.09.1986, a civil suit was filed only in July 1999, the Top Court noted. The sale deed pertaining to two houses bearing Nos. 259 and 260 was registered on 6.7.1999 and only House No. 258 remained, which was in possession of the respondent.

The Appellant had argued that no permission was required from the Ceiling Department, for registration of the sale deed. The Apex Court noted that this was not refuted by the counsel for the respondents.

“The fact also remains that in case such a permission was required, and vendors had not taken any steps within reasonable period after execution of agreement to sell on 24.09.1986, the vendee should have taken remedial measures and not waited for thirteen long years,” the Court added.

The Court also highlighted that even at the time of getting the sale deed of House Nos. 259 and 260 registered, no permission was obtained by the Vendor from the ceiling department. The Court said that the Respondent should have taken action instead of waiting indefinitely.

“The action for enforcement of agreement to sell dated 24.09.1986 should have been taken within limitation from that date instead of waiting indefinitely by paying a meagre amount of ₹5,000/- as earnest money out of total sale consideration of ₹55,000/-. The aforesaid inaction on the part of the vendee during his life time for a period of twelve years certainly goes against him considered in the light of the fact that the civil suit was filed in July, 1999 after the sale deed for two houses bearing Nos. 259 and 260, which were in possession of the appellant was registered,” the Court said.

The Court also pointed to the fact that the Defence Witness in his examination-in-chief and cross-examination had categorically stated that he had never applied for permission from the Ceiling Department to sell the property. Yet, the plaintiffs had not put any specific question to him that permission was actually required, the Top Court noted.

“...the judgments and decrees passed by the courts below enforcing the agreement to sell dated 24.09.1986 in a civil suit filed in July, 1999 cannot be legally sustained. The same are, accordingly, set aside. The suit filed by the respondents is dismissed” the Apex Court said while disposing the appeal.

Case Title: HAZARI LAL (DEAD) THR. LRS. V. RAMESH KUMAR & OTHERS, CIVIL APPEAL NO.5315 OF 2010

Citation: 2023 LiveLaw (SC) 994

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