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2005(7) Supreme 361
Supreme Court of India
(From Kerala High Court)
B.N. Srikrishna & C.K. Thakker, JJ.
S. Brahmanand & Ors. —Appellants
versus
K.R. Muthugopal (D) & Ors. —Respondents
Civil Appeal Nos. 6202-6203 of 2004
Decided on 21-10-2005
Counsel for the Parties :
For the Appellants : R.F. Nariman, Sr. Advocate, Fazlin Anam and E.M.S. Anam, Advocates.
For the Respondent No. 2 : T.L. Viswanatha Iyer, Sr. Advocate, Alex Joseph and K. Rajeev, Advocates.
For the Respondent Nos. 3-4 : L. Nageswara Rao, Sr. Advocate, Sewa Ram and P.K. Manohar, Advocates.
Held : A careful perusal of the letter dated 18.6.1992 leaves one in no doubt as to what exactly the Defendants had in mind when this letter was written. Doubtless, in the original agreement dated 10.3.1989, the date for performance had been fixed differently under clauses (1) and (3). Clause (1) stated that the sale would take place “immediately after the interim order in O.S. 99/88 and 99/88 imposing restriction on alienation is vacated by the court”. These two suits were the suits of Moosakutty. Clause (3), however, said that the time for performance would be “immediately on the termination of the proceedings in court as mentioned above, when the first parties shall cause the sale deed executed”. Perhaps, in the light of the authorities cited at the Bar ending with the two judgments of this court in Ramzan and Tarlok Singh (supra), it is possible to say that the expression “date fixed” need not be a calendar date, but time period fixed with reference to a certain event, the happening of which is definite. The High Court seems to have judged by this test and reserved the trial court’s judgment and dismissed the suit. In our judgment, the High Court went wrong in not giving full effect to the import of letter dated 18.6.1992. What does this letter convey? By the time this letter was written, the two suits filed by Moosakutty had been dismissed by the trial court, but he had moved an application for interim relief, after obtaining a status quo order from the trial court. In the light of this situation, the Defendants 1 and 2 represented to the Plaintiff 1 and assured him that they (Defendants 1 and 2) still have the intention of standing by their promise and as a token of their intention to fulfill their commitments under the agreement, Dandayudhan had been informed immediately to hand over the keys of the godown to the Plaintiffs. (Paras 33 and 34)
Thus, this was a situation where the original agreement of 10.3.1989 had a “fixed date” for performance, but by the subsequent letter of 18.6.1992 the Defendants made a request for postponing the performance to a future date without fixing any further date for performance. This was accepted by the Plaintiffs by their act of forbearance and not insisting on performance forthwith. There is nothing strange in time for performance being extended, even though originally the agreement had a fixed date. Section 63 of the Indian Contract Act, 1872 provides that every promisee may extend time for the performance of the contract. Such an agreement to extend time need not necessarily be reduced to writing, but may be proved by oral evidence or in some cases, even by evidence of conduct including forbearance on the part of the other party. [See in this connection the observations of this Court in Keshavlal Lallubhai Patel and Ors. v. Lalbhai Trikumlal Mills Ltd., AIR (45) 1958 SC 512, para 8. See also in this connection Smt. Saraswathamma v. H. Sharad Shrikande and Ors., AIR 2005 Karnataka 292 and K. Venkoji Rao v. M. Abdul Khuddur Kureshi, AIR 1991 Karnataka 119 following the judgment in Keshavlal Lallubhai Patel (supra)]. Thus, in this case there was a variation in the date of performance by express representation by the Defendants, agreed to by the act of forbearance on the part of the Plaintiffs. What was originally covered by the first part of Article 54, now fell within the purview of the second part of the Article. (Para 36)
In the present case, it was only on 31.8.1995/1.9.1995 that the plaintiffs realised that there was a refusal to perform, when they were forcibly evicted from the godown. It is only then that the Plaintiffs had notice of refusal of performance. Counted from this date, the suit was filed within 15 days and, therefore, was perfectly within the period of limitation. We, therefore, disagree with the High Court on this issue of limitation and hold that the suit filed by the Plaintiffs was within the period of limitation and was not liable to be dismissed under Section 3 of the Limitation Act. All other issues concurrently have been held in favour of the Plaintiffs. Hence, there is no impediment to the Plaintiffs succeeding in the suit. (Para 37)
Judgment
Srikrishna, J.—These two appeals by special leave impugn the common judgment of the High Court of Kerala rendered in First appeals AS Nos. 393/97 (E) and 281/97 (E) setting aside the decree made by the trial court in OS No. 647/95.
2. The appellants before us were the plaintiffs before the trial court in Original Suit No. 647/95 and the respondents were the respective defendants in the said suit. For the sake of convenience, the parties are hereinafter referred to as they were arrayed in the suit before the trial court i.e. as Plaintiffs and Defendants.
The Facts :
3. On 10.3.1989 an agreement was entered into between Defendants 1 and 2 (K.R. Muthugopal and V. Rajan, respectively) on the one hand, and Plaintiffs 1, 2 and 3 (S. Brahmanand S. Vinod and G. Ratna Bai, respectively), on the other hand, for sale of the suit property which comprised two shops and one godown in Kozhikode. The preambulatory part of the agreement makes it clear that as on the date of the agreement a stranger, by name, Thazhekeepattu Moosakutty had filed two suits O.S. Nos. 98/87 and 99/87 before the II Additional Sub Judge, Kozhikode, alleging that there was an agreement to sell the suit property to him of which there was a breach, and seeking specific performance of the alleged agreement of the sale of the suit property. By the agreement of sale dated 10.3.1989 the parties specifically recorded that, the Defendants had not made any such agreement of sale of the suit property to the said Moosakutty. According to the Plaintiffs and the Defendants, the suit property was originally let out to Bhatt family (of which Defendants 3 & 4 are members) who refused to vacate it on the request made by the Defendants 1 and 2 (i.e. the landlords). A suit for eviction was filed against the said Bhatt family and a decree for eviction was made. Even before the decree could be executed, two suits had been filed in which Moosakutty alleged that the Plaintiffs had entered into an agreement to sell the suit property to him and sought specific performance. Agreement dated 10.3.1989 broadly referred to the developments and the fact that as on the date of the agreement an interim injunction had been issued by the civil court in O.S. Nos. 98/87 and 99/87 restraining the transfer of the suit property to third parties. The agreement shows that the parties were well aware of the pending litigation and yet the Plaintiffs (purchasers) under the agreement had offered to purchase the same for a total consideration of Rupees six lakhs only, which was accepted “subject to the restrictions contained in the interim orders mentioned above”. Clauses (1), (3), (5) and (9) of the agreement are relevant and are reproduced as under:
“(1). That the first parties agreed to sell and the second parties agree to purchase the said properties for a total consideration of Rs.6,00,000/- (Rupees six lakhs only) immediately after the interim order in O.S. 99/98 and O.S. 98/88 imposing restriction on alienation is evicted by the Court.”
“(3) That the second parties shall tender the valuable amount of Rs.5,78,000/- (Rupees five lakh seventy eight thousand only) to the first parties immediately on the termination of the proceedings in court as mentioned above, when the first parties shall cause the sale deed executed and registered in favour of the second parties with all the valid title deeds.”
“(5) That the sale would be complete when the parties comply with the conditions herein.”
“(9) That the first parties do hereby covenant undertake and make the second party believe that the first parties have good title to the said properties and it is free from all encumbrances, charges attachments, claims and demands whatsoever and is not affected by any notice or scheme for acquisition or requisition proceedings apart from the temporary legal impediment imposed on transfer in O.S. 98/88 and O.S. 99/88 mentioned above and if there is found any defect in title the first parties shall be liable to pay back all money
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