The High Court dismissed the special appeal regarding specific performance. It observed that mere delay in filing on the limitation date does not defeat the suit unless hardship is proved. The court distinguished the case on hardship grounds.
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.
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R.S.A No. 1237 of 1986
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
R.S.A No. 1237 of 1986
Date of decision : December 12, 2008
Bhupinder Nath,
...... Appellant.
through Mr.I.K.Mehta, Sr Advocate with Mr. M.S.Kohli, Advocate and Ms.Ranjit Mehta, Advocate
v.
Satish Chand,
...... Respondent
through Mr.C.B.Goel, Advocate
CORAM : HON'BLE MR.JUSTICE AJAY TEWARI
1. Whether Reporters of Local Newspapers may be allowed to see the
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the Digest ?
AJAY TEWARI, J
This appeal has been filed against concurrent judgments of the Courts below decreeing the suit of the respondent for specific performance of the agreement to sell.
The first argument of learned senior counsel for the appellant is that even though the agreement was for specific khasra numbers viz. 18/22/4 (0-4), 26/2/3/1 (0-8) and 26/2/3/2 (0-13), yet in the plaint it was mentioned as follows :-
“18/22/4/2(0-4) or 22/4/2 whichever khasra number is
found to be correct.
26/2/3/1(0-8), 26/2/3/2(0-13) or 26/2/3/3 whichever
R.S.A No. 1237 of 1986 ::2::
khasra number is found to be correct”.
It is argued that even in the decree it was so mentioned. It is, thus, the argument of the learned counsel that the plaintiff could only seek specific performance of the agreement and could not add any thing more to the same.
In my opinion, this contention is without merit. The learned lower appellate Court has noticed that originally the numbers mentioned in the agreement were correct but as a consequence of some acquisition, the numbers were changed. However, the learned lower appellate Court held that the identity of the property sold was not in dispute.
The second argument of learned senior counsel for the appellant is that the agreement was executed on 3.7.1978 when half of the consideration amount i.e Rs.3,000/- was paid; the date fixed for the execution of the sale deed was 31.7.1978 but the suit was filed on the very last day of limitation i.e 31.7.1981. He has relied upon a judgment of the Hon'ble Supreme Court in K.S.Vidyanadam and others vs Vairavan, (1997) 3 SCC 1 wherein the Hon'ble Supreme Court held as follows :-
“10. It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time
R.S.A No. 1237 of 1986 ::3::
is of the essence of the contract) should be decreed provided it is filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the timelimits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity ? It would also mean denying the discretion vested in the court by both Sections 10 and 20. As held by a Constitution Bench of this Court in Chand Rani v. Kamal Rani :
“.... it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are (evident ?): (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract.”
In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the
R.S.A No. 1237 of 1986
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agreement and determine whether its discretion to grant specific performance should be exercised. Now in the case of urban properties in India, it is well-known that their prices have been going up sharply over the last few decades- particularly after 1973.”
Learned counsel further relied upon P.Purushottam Reddy and
another vs M/S Pratap Steels Ltd, AIR 2002 SC 771, wherein the Hon'ble Supreme Court held as follows :-
“8. For the purpose of deciding the question whether or not time was the essence of the contract the appellant before the High Court relied on K.S.Vidyanadam and others v. Vairavan (1997) 3 SCC 1 which is a two-Judge Bench decision and a few other decided cases. On behalf of the plaintiff-respondent reliance was placed on Chandnee Widya Vati Madden v. Dr. C.L.Katial and others, (1964) 2 SCR 495 which is a three-Judge Bench decision. The High Court noticed the facts of both these decisions, and having also dealt with the law laid down therein felt inclined to decide the case in the light of the law laid down in Chandnee Widya Vati's case because the decision in Chandnee Widya Vati's case was, as stated by the High Court, “the earlier larger Bench judgment”. The attention of the High Court was not invited to a Constitution Bench decision in Chand Rani (Smt) (Dead) by Lrs v. Kamal Rani (Smt) (Dead) by Lrs (1993) 1 SCC 519 and therefore the law laid down by the
R.S.A No. 1237 of 1986
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Constitution Bench has escaped the attention of the High Court. The issue as to whether time is the essence of the contract in contracts for sale of immovable property came up for the consideration of the Constitution Bench and it was held :-
“It is a well-settled principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of the contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.”
xx xx xx
........... in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the
R.S.A No. 1237 of 1986
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essence of the contract the Court may infer that it is to be performed in a reasonable time if the conditions are :-
Learned counsel for the respondent, on the other hand, has argued that the appellant took a dishonest plea by alleging that he never agreed to sell any land nor received any amount from the plaintiff. He further argued that no plea regarding hardship was taken in the written statement and, therefore, in second appeal no such argument can be allowed to be raised. He has relied upon Sarita Rani vs Deepak Raj and others, 2000
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R.S.A No. 1237 of 1986
(2) PLJ 381, wherein the Hon'ble Supreme Court held as follows :-
“5. On the second question there was neither any plea nor proof that defendant-vendor suffered hardship as a result of the sale being asked to be specifically performed. When the plea of hardship had not been raised by the party concerned, examination of the provisions of Section 20(2)(b) of the Specific Relief Act would not arise at all. When the party concerned did not raise this plea as to how the Court could imagine it might result in hardship to the party concerned, is beyond our comprehension. We set aside the order of the High Court and restore that of the first Appellate Court. The appeal is allowed accordingly.”
Learned counsel for the respondent has further relied upon Piru vs Fakir Chand, 2006(4) RCR (Civil) 207, wherein this Court held as
follows :-
“7. This submission has been considered. It has no merits at all. It was not disputed by the learned counsel for the appellant that the appeal could be filed within a period of three years and admittedly, the appeal has been filed within a period of three years. The mere plea that it was filed on the last day, does not defeat the right of the respondent to seek specific performance. It was held by the Hon'ble Division Bench of the Rajasthan High Court in the judgment reported as Surendra Singh v. L.Rs of Bhanwar Lal and others, 2006(2) Indian Civil Cases 606
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R.S.A No. 1237 of 1986
that merely filing of the suit on the last day of limitation when seen in isolation does not defeat the suit.
In my opinion, the judgments, cited by learned counsel for the respondent, are more pointed. There can be no quarrel with the proposition of law laid down in K.S.Vidyanadam's case (supra) but it is to be noticed that in the said case the Hon'ble Supreme Court itself noticed that a Court should look at all the relevant circumstances including the time limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. However, in Sarita Rani's case (supra), the Hon'ble Supreme Court specifically noticed a plea of hardship, as is being projected herein by learned senior counsel for the appellant.
Consequently, this appeal is dismissed with no order as to
costs.
( AJAY TEWARI ) December 12, 2008. JUDGE `kk'
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3 issues framed by the court
Whether the strict adherence to time limits in the agreement defeats the right to specific performance when time is not the essence of the contract.
Whether the plea of hardship under Section 20(2)(b) of the Specific Relief Act can be raised for the first time in second appeal.
Whether the filing of the suit on the last day of limitation prevents granting specific performance.
Colour shows how this judgement treated each authority
Chand Rani v. Kamal RaniReferred¶33
P.Purushottam Reddy and another vs M/S Pratap Steels Ltd, AIR 2002 SC 771Referred¶39
Chandnee Widya Vati Madden v. Dr. C.L.Katial and others, (1964) 2 SCR 495Referred¶40
Sarita Rani vs Deepak Raj and others, 2000 (2) PLJ 381Distinguished¶55
Piru vs Fakir Chand, 2006(4) RCR (Civil) 207Relied on¶60
Surendra Singh v. L.Rs of Bhanwar Lal and others, 2006(2) Indian Civil Cases 606Referred¶62
1 provisions across 1 enactments
Bhupinder Nath
Satish Chand
AJAY TEWARI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
