1. Suit for specific performance of a contract for sale of land based on multiple agreements, including a final agreement with a fixed performance date. (Para 2 )
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2024 Supreme(SC) 657
SUPREME COURT OF INDIA
VIKRAM NATH, PRASANNA BHALACHANDRA VARALE, JJ.
Usha Devi & Ors. – Appellant
Versus
Ram Kumar Singh & Ors. – Respondents
Civil Appeal No. 8446 OF 2024 (Arising out of SLP (C) No.2997 OF 2023)
Decided On : 05-08-2024
Advocates appeared:
For the Petitioner(s): Mr. Ajay Kumar, AOR Mr. Nirmal Kishore, Adv. Mr. Keshav Maheshwari, Adv.
For the Respondent(s): Mr. Rohit Kumar Singh, AOR Mr. Abhishek Sharma, Adv. Mr. Shivam Sharma, Adv. Mr. Akash Kumar, Adv.
For the Petitioner(s): Mr. Ajay Kumar, AOR Mr. Nirmal Kishore, Adv. Mr. Keshav Maheshwari, Adv.
For the Respondent(s): Mr. Rohit Kumar Singh, AOR Mr. Abhishek Sharma, Adv. Mr. Shivam Sharma, Adv. Mr. Akash Kumar, Adv.
IMPORTANT POINT
Agreement to sell – Suit for Specific Performance – Validity of agreement is something different and does not change date of performance – Suit can be dismissed on the ground of limitation alone.
Headnote:
Limitation Act, 1963 – Article 54 – Specific Relief Act, 1963 – Section 16(c) – Agreement to sell – Suit for Specific Performance – Limitation under Article 54 of Limitation Act, 1963 for instituting suit for specific performance of a contract would be three years from the date fixed for performance, or, if no such date is fixed, when plaintiff has notice that performance is refused – In agreement, it is specifically mentioned that sale deed would be executed within one month from date of said agreement – Performance was to take place within one month – Validity of agreement is something different and does not change date of performance – As such, suit was liable to be dismissed on the ground of limitation alone – Impugned order set aside and suit dismissed – Advance amount to be refunded alongwith 12% interest. (Paras 8, 9, 10, 11, 12 and 13)
Facts of the case:
This is the defendant’s appeal against Judgment and order dated 14.12.2022, passed by High Court of Jharkhand at Ranchi in Second Appeal, confirming judgment and decree of First Appellate Court, decreeing suit for specific performance filed by respondents.
Findings of Court:
Appellants shall return advance amount of Rs. 80,000/- with interest @ 12 % per annum from the date it was paid to appellants till the date it is paid. There shall be no order as to costs.
Result : Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Whether the agreement was forged and whether the suit was barred by limitation under the Limitation Act. (Para 3 )
3. The suit was filed after the three-year limitation period from the fixed date of performance; a validity clause does not extend the limitation period. (Para 8 , 9 , 10 )
4. Under Article 54 of the Limitation Act, 1963, limitation for specific performance is three years from the date fixed for performance. (Para 8 , 9 )
5. Appeal allowed, suit dismissed as barred by limitation, and appellants directed to refund the advance amount with interest. (Para 11 , 12 , 13 )
6. What is the limitation period for filing a suit for specific performance of a contract under the Limitation Act, 1963?
Under Article 54, the limitation period is three years from the date fixed for the performance of the contract, or if no such date is fixed, from when the plaintiff has notice that performance is refused. (Para 8 )
7. Does a clause stating an agreement remains valid for a certain period extend the limitation period for filing a suit for specific performance?
No. A clause regarding the validity of an agreement is distinct from the date fixed for performance. Such a clause does not change the date of performance or extend the limitation period under Article 54. (Para 10 )
8. How is the limitation period calculated when a specific date for performance is mentioned in the agreement?
When a specific date or timeframe for performance is fixed in the agreement, the three-year limitation period begins to run from the expiry of that fixed date. (Para 9 )
ORDER :
1. Leave granted. This is the defendant’s appeal against the judgment and order dated 14.12.2022, passed by the High Court of Jharkhand at Ranchi in Second Appeal No. 349 of 2005, Usha Devi & Ors. versus Ram Kumar Singh & Ors., confirming the judgment and decree of the First Appellate Court, decreeing the suit for specific performance filed by the respondents.
2. According to the plaint allegations, the facts are as follows:
2.1 The dispute relates to plot No. 2339, situated at Purulia Road, Kumhar Toli, Gali No. 2, Namkum, District Ranchi, which belonged to Kisun Ram, the grandfather of the appellants. However, the plot was sub-divided amongst the co-sharers, and plot No. 2339B of Khata No. 252 came into the share of Bihari Lal, succeeded by the defendants after his death.
2.2 During his lifetime, Bihari Lal is said to have entered into an agreement with the plaintiff on 22.07.1983, for the sale of the land along with superstructure for a total sale consideration of Rs. 70,000/-. Out of the said amount, Rs. 1,000/-was paid in advance.
2.3 As per the said agreement, the sale deed was to be executed upon payment of the remaining amount of Rs. 69,000/-within a period of nine months. The sale deed was not executed within the time stipulated.
2.4 According to the respondents, the balance amount of Rs. 69,000/- was paid on 20.09.1985, for which an endorsement was made on the agreement dated 20.09.1985, and it was agreed that the sale deed would be executed by 30.11.1985. The plaintiffs-respondents were put in possession of the property at that stage.
2.5 The sale deed was still not executed, and a fresh agreement came to be executed between the parties on 17.12.1989.
2.6 The land in question, covered by the initial agreement to sell, was 10 katthas. However, in 1989, a fresh measurement exercise was undertaken according to which it came to only 9 katthas, and the price was enhanced from Rs. 7,000/- per kattha to Rs. 9,000/- per kattha.
2.7 At the time of the execution of the agreement dated 17.12.1989, an initial amount of 10,000/-was paid. Thus, out of the total sale consideration of 81,000/-, only Rs. 1,000/-remained as balance to be paid at the time of the execution of the sale deed.
2.8 As per this agreement to sell, the sale deed was to be executed and registered within one month i.e. up to 16.01.1990. It is interesting to note that agreement to sell also incorporated a clause at the end of the document stating that the said agreement would be valid for five years. Since the sale deed was not executed, the respondents instituted a suit for specific performance of the contract in September, 1993.
2.9 The affidavit filed along with the plaint was sworn and attested on 13.09.1993.
3. The appellants filed a written statement denying the plaint allegations.
3.1 According to the defendants, the said agreement to sell was a forged and fabricated document and did not bear the signatures of their father, Bihari Lal, who had since died in 1990.
3.2 The appellants further alleged that the suit was barred by limitation inasmuch as it was filed beyond the period of three years from the date of performance of the sale deed as per the agreement.
3.3 Various other issues were raised which we may not enter into, as primarily, it is the issue of limitation which will decide this appeal.
4. Based on the pleadings, the Trial Court framed the following issues:
a) Is the suit as framed maintainable?
b) Have the plaintiffs got any valid cause of action of the suit?
c) Is the suit barred by limitation?
d) Is the suit bad due to non-joinder of necessary parties?
e) Whether so-called agreements were done between the plaintiffs and late Bihari Lal, husband of defendant No. 1 and whether those agreements are binding on Defendant Nos. 1,2,4 and 5?
f) Are the alleged agreements forged, fabricated and concocted, which do not bear the signature of Bihari Lal?
g) Whether at the time of agreement, Bihari Lal was the absolute owner in possession of the suit property or whet
