Limitation For Specific Performance Suit Runs From Date When Plaintiff Had Notice Of Refusal When No Date Is Fixed For Performance : Supreme Court

The Supreme Court, while dismissing a suit, arising from an Agreement to Sell (ATS), noted that while the ATS was dated 31.07.1975, the suit was filed by the respondent named Anjuman (now represented through legal heirs) on 01.01.1981. Further, the limitation for filing a suit for specific performance, as per Article 54 of the Schedule to the Limitation Act, 1963 is 3 years ‘from the date fixed for performance or if no such date is fixed, when the plaintiff has notice that the performance is refused.’

It was also observed that, in the pleadings of the plaint, even after five and a half years, there was no averment that the respondent (in whose favour the agreement was executed) was ready and willing to perform its obligations under the ATS and pay the balance/remaining amount. In view of the same, the Court opined that it is enough for the suit of the respondents to be dismissed on the ground of limitation alone.

The origin of this litigation arose when an ATS was executed in favour of the respondents by the appellants on 31.07.1975. The ATS envisioned that the appellants had to apply for permission from the District Magistrate to sell the property within eight days and upon permission being received, the same was to be intimated to the respondents and the Sale Deed was to be executed within 15 days from receipt of such intimation by the respondents. The appellants did not apply for any permission to sell which led to the respondents filing Suit on 01.01.1981 for specific performance of the ATS. The suit was decreed by judgment dated 08.03.1982.

The Bench of Justices Vikram Nath and Ahsanuddin Amanullah noted that since the consequences of non-performance of the duty cast upon the appellants of applying within 8 days or non-intimation of permission having been granted, in either contingency, a right accrued to the respondents to move Court.

“In this background, the respondents cannot take the plea that they would be entitled to indefinitely wait till the appellants informed them about the permission. As soon as the first eight days expired, the respondents had to show due diligence by being vigilant and conscious of their rights and were required to act promptly.,” the Court added.

Parties Contentions and Court’s Findings

At the foremost, it was argued by the appellants that the respondents had not taken any steps despite the appellants not having applied for permission for five years; which showed that the respondents were not ready and willing to perform their part of the contract, and therefore, the suit was barred by limitation. Per contra, it was argued on behalf of the respondents that as the appellants had not even applied and thus, no permission was ever obtained, they had not informed the respondents and therefore, the suit would not be hit by limitation. It was their submission that the suit was filed within the limitation period.

It is important to note that Clause 4 stipulated that in case the appellants did not apply for permission within the stipulated time ‘or’ after getting permission, did not inform the respondents and get the deed executed in favour of either the respondents or anyone of their choice then the respondents would have the right to get the sale of the property in question executed in their favour through the Court, and also take possession through the Court.

In this backdrop, the Court opined that a conjoint and harmonious reading of the relevant Clauses clearly indicated that the onus was on the appellants to apply within 8 days for permission and upon the permission being received, to intimate to the respondents, whereafter the respondents had to get the Sale Deed executed within 15 days. It was clarified that in the event of failure to do so i.e., either of not applying for permission ‘or’ not intimating the respondents upon receipt of permission, the respondents had the right to move the Court for getting the sale executed as also for possession.

Thus, from the ninth (9th) day onwards, the onus would shift on the respondents, if within 8 days the appellants had not even applied for permission.

It further also observed that there being no notice given to the appellants by the respondents for five and a half years to indicate the reason why they kept waiting or that despite their willingness to comply with their portion of the obligations under the ATS, the appellants had not discharged their obligations under the ATS and why the respondents should not move before the Court for enforcement of the ATS, as contemplated thereunder, coupled with the fact that in the entire plaint, there is not even a whisper with regard to the respondents having ever called upon the appellants or given notice to them that they were ready and willing to pay the balance amount and get the Sale Deed executed view does not aid the respondents.

“We see nothing on the record to fathom a valid or justifiable reason for the respondents to have waited for five and a half years before instituting the suit.,” held the Court.

Accordingly, the impugned judgment was set aside.

Case Title: SABBIR (DEAD) THROUGH LRS V. ANJUMAN (SINCE DECEASED) THROUGH LRS., CIVIL APPEAL No.6075 OF 2023

Citation : 2023 LiveLaw (SC) 933

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