Appellant filed a second appeal challenging the dismissal of a suit for specific performance. The High Court held the suit was time-barred under Article 54 of the Limitation Act because a fixed period for performance existed in the agreement.
Appeal dismissed; judgment and decree of first appellate Court restored.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE RAVI V HOSMANI REGULAR SECOND APPEAL NO. 2166 OF 2007 (SP)
BETWEEN:
SRI C. MUNISWAMY REDDY,
SINCE DEAD BY LRS.
1(a) SRI M. SEENAPPA, AGED ABOUT 58 YEARS, S/O LATE MUNISWAMY REDDY, NEKKUNDI DOMMASANDRA, SARJAPURA HOBLI , ANEKAL TALUK, BANGALORE DISTRICT.
1(b) SMT. LALITHAMMA, AGED ABOUT 54 YEARS, D/O LATE MUNISWAMY REDDY, W/O VENKATASWAMY REDDY, MUTHANALLUR VILLAGE, HUSKUR POST, SARJAPURA HOBLI , ANEKAL TALUK.
1(c) SRI AMARESHA, AGED ABOUT 50 YEARS, S/O LATE MUNISWAMY REDDY, NEKKUNDI DOMMASANDRA, SARJAPURA HOBLI , ANEKAL TALUK, BANGALORE DISTRICT.
Digitally signed by GEETHAKUMARI PARLATTAYA S
Location: High Court of Karnataka
1(d) SMT. SUNANDAMMA, AGED ABOUT 47 YEARS, D/O LATE MUNISWAMY REDDY, W/O ERAREDDY, S. MEDIHALLI VILLAGE, ANDENAHALLI POST, SARJAPURA HOBLI , ANEKAL TALUK,
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NEKKUNDI DOMMASANDRA, SARJAPURA HOBLI , ANEKAL TALUK, BANGALORE DISTRICT.
...APPELLANTS
(BY SRI V. ANAND, ADVOCATE)
AND:
SRI RAVINDRA KUMAR, S/O CHAMBENAHALLI R. NANJUNDAREDDY, AGED ABOUT 36 YEARS, MUTHASANDRA POST, VARTHUR VIA, BANGALORE DISTRICT.
…RESPONDENT
(BY SRI K. SRINIVASA, ADVOCATE FOR ; SRI JAGADISH D. HIREMATH, ADVOCATE FOR )
THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION 100 OF CPC AGAINST THE JUDGEMENT AND DECREE DATED 26.07.2007 PASSED IN RA.NO.204/2006 (OLD NO.79/2006) ON THE FILE OF THE CIVIL JUDGE (SR.DN.) AND JMFC., ANEKAL, ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGEMENT AND DECREE DATED 31.01.2006 PASSED IN OS.NO.22/05 ON THE FILE OF THE PRL.CIVIL JUDGE (JR.DN.) AND JMFC., ANEKAL.
THIS REGULAR SECOND APPEAL COMING ON FOR FURTHER DICTATION THIS DAY, THE COURT DELIVERED FOLLOWING:
JUDGMENT
Challenging judgment and decree dated 26.07.2007 passed by Civil Judge (Sr.Dn.), Anekal in R.A.no.204/2006 (Old no.R.A.no.79/2006) setting aside judgment and decree dated 31.01.2006 passed by Prl. Civil Judge (Jr.Dn.), Anekal, in O.S.no.22/2005, this appeal is filed.
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sake of convenience, they shall referred to as such in this appeal.
25,100/- accepting 13,000/- as advance sale consideration and agreeing to execute sale deed by receiving balance amount of 12,100/- within three months. It was further stated that on 10.04.1988 as per request of defendant, plaintiff paid further amount of 12,000/- leaving balance of only `100/- to be paid. It was stated though plaintiff was always ready and willing to perform his part of contract and called upon defendant to receive balance amount and execute sale deed, defendant postponed it on one pretext or other. On 17.12.2004 plaintiff got issued legal notice to defendant. As due to oversight suit property was not mentioned, another legal notice dated 03.01.2001 was issued.NC: 2024:KHC:7451 RSA No. 2166 of 2007
When defendant did not come forward to execute sale deed,
cause of action to file suit arose and suit was filed on 17.01.2005.
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agreement of sale was dated 16.03.1988 and suit was filed after lapse of 17 years.
issues:
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following points for consideration:
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Aggrieved by judgment and decree passed by first appellate Court, plaintiff is in appeal.
25,100/- by receiving 13,000/- as advance, wherein it was stipulated that balance of 12,100/- was to be paid within three months and sale deed executed. Subsequently, on 10.04.1988, further sum of 12,000/- was paid to defendant towards advance sale consideration leaving only `100/- as balance. It was submitted that plaintiff had thereafter called upon defendant to come forward to execute sale deed, defendant went on postponing same one or other pretext. Ultimately plaintiff got issued legal notice dated 17.12.2004 and 30.01.2005 as per Exs.P.3 and P.4 and when defendant did not come forward to perform his part of contract.NC: 2024:KHC:7451 RSA No. 2166 of 2007
48,000/- out of total sale consideration of 50,000/- leaving only 2000/- as balance, suit filed in year 2001 in respect of agreement of sale on 09.01.1989, question of limitation would recede to background and submitted that in present case balance amount was negligible at only 100/- and as per1 AIR 2012 KAR 141
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endorsement dated 10.04.1988, plaintiff was put in possession
of suit property.
“12. The aforesaid ratio has also been followed recently by this Court in R. Lakshmikantham v. Devaraji [R.Lakshmikantham v. Devar aji, (2019) 8 SCC 62]. We, therefore, have no hesitation in holding that 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 timelimit by the respondent-plaintiff.
20. 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 [See paras 25, 36 & 37 in Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18: (2012) 2 SCC (Civ) 104.]. 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 purchaser to the defendant seller may
2 (2022) 2 SCC 382
3 2023 SAR (Civ) 1
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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.
Chand4 , in para no. 7 to 9 it has held as under:
“7. It is the settled position of law that grant of a decree for specific performance of contract is not automatic and is one of the discretions of the court and the court has to consider whether it will be fair, just and equitable. The court is guided by principle of justice, equity and good conscience. As stated in P.V. Joseph's Son Mathew [1987 Supp SCC 340 : AIR 1987 SC 2328] the court should meticulously consider all facts and circumstances of the case and motive behind the litigation should also be considered.
8. The High Court considering the facts of this case observed as follows:
“We are conscious of the fact that the defendant has been in possession of the said quarter for the last several decades and logical consequence of affirming the judgment of the trial court would mean considerable hardship to him, at the same time the conduct of the defendant does not justify any further indulgence by the court. We have no doubt that the defendant has tried to wriggle out of the contract between the parties because of
4 AIR 2000 SC 3106
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the tremendous escalation in the prices of real estate properties all over the country and in Delhi, in particular in the last few years.”
9. In view of the above clear finding of the High Court that the appellant tried to wriggle out of the contract between the parties because of escalation in prices of real estate properties, we hold that the respondent is entitled to get a decree as he has not taken any undue or unfair advantage over the appellant. It will be inequitable and unjust at this point of time to deny the decree to the respondent after two courts below have decided in favour of the respondent. While coming to the above conclusion we have also taken note of the fact that the respondent deposited the balance of the consideration in the trial court and also the amount in the High Court, as directed. On the other hand the appellant, as held by the High Court, tried to wriggle out of the contract in view of the tremendous escalation of prices of real estate properties. However, to mitigate the hardship to the appellant we direct the respondent to deposit a further sum of Rs 3,00,000 within 4 months from today with the Registry of this Court and the amount shall be kept in short-term deposit in a nationalised bank. While giving the above direction we have taken note of the offer made to us on behalf of the respondent. This amount is to be paid to the appellant on his giving possession of the suit property to the respondent within 6 months from the date of the deposit of the above amount. The appellant shall also be entitled to withdraw the amount already deposited in the trial court and the amount of Rs.1,00,000 which has been kept in interest-bearing fixed deposit in the Registry of the High Court.”
17. Based on above, it was submitted that substantial
question of law framed by this Court on 15.03.2010 be answered in favour of appellant, and judgment and decree
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passed by first appellant Court be set aside and judgment and decree passed by trial Court be restored.
Vs. Smt.Uma5 , it was submitted that if time limit is fixed in agreement of sale, it must be performed within three years
5 2016 (4) KCCR 3720
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from time fixed in agreement and if no time were fixed to file
suit within three years from date of refusal.
29. We shall now advert to the respondent's conduct throughout the sale transaction. The respondent has failed to provide any documents or communication which would indicate that he called upon the appellants to perform their obligations or discharge the mortgage within the time period stipulated in the contract. Even after the expiry of the six months, the respondent did not reach out to the appellants. It is only in response to the appellants' legal notice that the respondent demanded performance of their obligations.
Merely averring that he was waiting with the balance consideration and believed that the appellants would clear the encumbrance is insufficient to prove that the respondent-plaintiff was willing to perform his obligations under the contract.
30. Further, in 1991 the respondent instituted a suit for mandatory injunction for restraining the appellants from alienating the suit property. He did not however, institute a suit for specific performance of the contract until 17 June 1993. The respondent has taken the plea that he was waiting for the appellants to discharge the mortgage to file a suit for specific performance. We are
6 AIR 2022 SC 1275
unable to accept this submission. By extending the respondent's argument, if the appellants had failed to discharge the mortgage, the respondent would not have filed a suit for specific performance of the contract at all. We also note that the respondent has withdrawn the balance consideration deposited by him before the trial court in 2001. The inconsistency in the respondent's conduct, the lack of communication with the appellants urging them to discharge the mortgage and showing his willingness to pay the balance consideration, and the delay of about three years from the date fixed for performance of the contract in filing a suit, are all indicative of the respondent's lack of will to perform the contract.
25,100/after receiving advance sale consideration of 13,000/- and agreeing to execute sale deed after receiving Rs.12,100/-, within three months. Plaintiff claims that on 10.04.1988, defendant endorsed receipt of further advance of Rs.12,000/and delivery of possession of suit property to plaintiff. And when defendant failed to come forward to execute sale deed even after plaintiff’s legal notice, suit was filed on 07.01.2005.NC: 2024:KHC:7451 RSA No. 2166 of 2007
" Whether first appellate Court was justified in holding that suit is barred by limitation thereby dismissing suit filed by plaintiff? "
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agreement of sale as PWs.3 and 2 as well as contents of Exs.P1 to P.7, trial Court held that plaintiff proved execution of agreement of sale and receipt of sale consideration and also delivery of possession by defendant. Taking note of issuance of legal notice to defendant calling upon him to execute sale deed in favour of plaintiff as per Exs.P.3 and P4, it held issue of readiness and willingness against defendant. Relying upon decision of Kallaiah Vs. Ningegowda7 , it concluded that when plaintiff pleads time was not essence of contract and defendant fails to deny same, Court was bound to accept plea of plaintiff. And when time was not essence of contract, suit would not suffer from period of limitation and granted decree for specific performance.
7 1981 (2) KLJ 11
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whether suit filed within three years from denial of agreement of sale was within time and whether decree passed by trial Court called for interference, it observed that deposition of PW1 in terms of plaint averments was duly corroborated by PWs.3 and 4 i.e. scribe and witness, which proved agreement of sale and payment of advance sale consideration.
had nothing to do with period of limitation within which suit for specific performance of contract had to be filed and that period of limitation stipulated can neither be ignored or extended by Courts. It held that as period of three months was stipulated in Ex.P1 agreement of sale, plaintiff ought to have filed suit on or before 15.06.1991, and therefore, suit filed by plaintiff on 07.01.2005 was barred by limitation, and reversed decree passed by trial Court.
Manuprasad Trivedi8 , has held as follows:
“18. On the other hand, in the judgment in Gunwantbhai [Gunwantbhai Mulchand Shah v. Anton Elis Farel, (2006) 3 SCC 634] this Court has held as under:
“8. We may straightaway say that the manner in which the question of limitation has been dealt with by the courts below is highly
8 (2019) 13 SCC 372
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unsatisfactory. It was rightly noticed that the suit was governed by Article 54 of the Limitation Act, 1963. Then, the enquiry should have been, first, whether any time was fixed for performance in the agreement for sale, and if it was so fixed, to hold that a suit filed beyond three years of the date was barred by limitation unless any case of extension was pleaded and established . But in a case where no time for performance was fixed, the court had to find the date on which the plaintiff had notice that the performance was refused and on finding that date, to see whether the suit was filed within three years thereof. We have explained the position in the recent decision in R.K. Parvatharaj Gupta v. K.C. Jayadeva Reddy [R.K. Parvatharaj Gupta v. K.C. Jayadeva Reddy, (2006) 2 SCC 428] . In the case on hand, there is no dispute that no date for performance is fixed in the agreement and if so, the suit could be held to be barred by limitation only on a finding that the plaintiffs had notice that the defendants were refusing performance of the agreement. In a case of that nature normally, the question of limitation could be decided only after taking evidence and recording a finding as to the date on which the plaintiff had such notice. We are not unmindful of the fact that a statement appears to have been filed on behalf of the plaintiffs that they did not want to lead any evidence. The defendants, of course, took the stand that they also did not want to lead any evidence. As we see it, the trial court should have insisted on the parties leading evidence on this question or the court ought to have postponed the consideration of the issue of limitation along with the other issues arising in the suit, after a trial.”
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In the aforesaid case, it is clearly held that in cases falling in second limb of Article 54 finding can be recorded only after recording evidence. The said view expressed by this Court supports the case of the respondent-plaintiff.”
(Emphasis supplied is mine)
9 (2009) 5 SCC 462
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Sd/JUDGE
Psg/grd List No.: 1 Sl No.: 33
3 issues framed by the court
Whether first appellate Court was justified in holding that suit is barred by limitation thereby dismissing suit filed by plaintiff?
Whether dispute is governed by Article 54 of the Limitation Act where a specific time was fixed in the agreement of sale for performance?
Whether extension of time fixed for performance was validly pleaded and established by the respondent?
Colour shows how this judgement treated each authority
AIR 2012 KAR 141Referred¶14
Somanagouda and another Vs. Shamshiddin
(2022) 2 SCC 382Referred¶15
Welspun Specialty Solutions Limited Vs. Oil & Natural Gas Corporation Limited
2023 SAR (Civ) 1Referred¶15
P Daivasigamani C Vs. S.Sambandan
AIR 2000 SC 3106Referred¶15
Gobind Ram Vs. Gian Chand
2016 (4) KCCR 3720Referred¶19
Sri Nagaraj Vs. Smt.Uma
AIR 2022 SC 1275Distinguished¶20
Shenbagam & Ors. Vs. K.K. Rathinavel
(2019) 13 SCC 372Applied¶29
Urvashiben v. Krishnakant Manuprasad Trivedi
(2009) 5 SCC 462Applied¶30
Ahmadsahab Abdul Mulla (2) Vs. Bibijan
3 provisions across 3 enactments
SRI C. MUNISWAMY REDDY, SINCE DEAD BY LRS. 1(a) SRI M. SEENAPPA, 1(b) SMT. LALITHAMMA, 1(c) SRI AMARESHA, 1(d) SMT. SUNANDAMMA, 1(e) SRI NAGESH
SRI RAVINDRA KUMAR
RAVI V HOSMANI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court