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IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
P.S. Rana, J.
Twenty First Century Resorts & others - Plaintiffs
Versus
Shamsher Singh son of Shri Pratap Chand - Defendant
Civil Suit No. 131 of 2012
Decided On : 17-5-2016
specific performance - contract of sale - H.P. Tenancy and Land Reforms Act 1972 - [Section 118]
Fact of the Case:
Plaintiff filed suit for specific performance of a contract of sale and possession of land. Defendant denied the plaintiff's entitlement to specific performance, alleging the suit was not maintainable, barred by limitation, and that the plaintiffs were not ready and willing to perform their part of the contract.
Finding of the Court:
The court found that the plaintiff's suit for specific performance was barred by limitation, as it was not filed within three years from the date fixed for performance of the contract. However, the court held that the plaintiffs were entitled to recover the earnest money paid to the defendant, amounting to Rs.59 lacs, along with 6% interest from the date of institution of the suit.
Issues: The issues included the entitlement of the plaintiffs to specific performance, alternative relief of damages/compensation, maintainability of the suit, the plaintiff's acts of omission and commission, and the essence of time in the contract.
Ratio Decidendi: The court's decision was influenced by the essence of time in the contract, the failure of the plaintiffs to file the suit within the limitation period for specific performance, and the defendant's acknowledgment of receiving earnest money.
Final Decision: The court partly decreed the suit, granting a decree for the recovery of earnest money to the tune of Rs.59 lacs in favor of the plaintiff, along with 6% interest from the date of institution of the suit. Other reliefs were declined, and the parties were left to bear their own costs.
P.S. Rana, J.
Plaintiff M/s Twenty First Century Resorts filed suit for specific performance of contract of sale dated 10.7.2006 and for possession of land comprised in Khata Khatauni No. 126/175 (Kitas 47) situated at Up Mohal Simsa Phatti Nasogi Kothi Manali Tehsil Manali District Kullu (H.P.) measuring 00-45-35 Hectares. Consequential relief of permanent prohibitory injunction restraining the defendant from transferring or alienating or changing the nature or creating any encumbrance on suit land also sought. It is pleaded that total sale consideration amount was settled as Rs.15520000/- (Rupees one crore fifty five lac twenty thousand) vide contract dated 10.7.2006 placed on record. It is pleaded that defendant received a sum of Rs.40 lac (Rupees forty lac) as earnest money from plaintiffs. It is pleaded that sale deed was to be executed by defendant on or before 31.12.2006. It is pleaded that it was agreed that sale deed would be executed in favour of plaintiffs after obtaining necessary permission under Section 118 of H.P. Tenancy and Land Reforms Act 1972. It is pleaded that it was agreed that defendant would partition the suit land or would obtain consent letters/no objection certificates from other co-sharers. It is pleaded that thereafter supplementary contract dated 19.12.2006 was executed inter se parties and time for registration of sale deed was extended till 31.3.2007. It is pleaded that thereafter another supplementary contract dated 29.3.2007 was executed inter se parties and time for registration of sale deed was extended upto 31.7.2007. It is pleaded that thereafter another supplementary contract dated 30.7.2007 was executed inter se parties and time for registration of sale deed was extended till 31.1.2008. It is pleaded that thereafter on 12.12.2009 defendant received a sum of Rs.19 lacs (Rupees nineteen lac) from plaintiff towards additional earnest money of sale consideration amount and signed the receipt placed on record. It is pleaded that thereafter defendant in March 2010 received a sum of Rs.20 lacs (Rupees twenty lac) on account of additional earnest money from plaintiffs. It is pleaded that defendant has received total sum of Rs.79 lac (Rupees seventy lac) till March 2010 from plaintiffs as earnest money of sale. It is pleaded that defendant did not partition the suit land as per contract and also did not obtain no objection/consent letters from other co-owners. It is pleaded that thereafter co-plaintiff No. 1 decided to assign the right under contract of sale in favour of co-plaintiff No. 3 Shri Vikas Sohal. It is pleaded that thereafter notice dated 14.7.2012 was also served upon defendant. Prayer for decree of the suit as mentioned in relief clause of plaint sought.
2. Per contra written statement filed on behalf of defendant pleaded therein that suit of plaintiff in present form is not maintainable. It is pleaded that time is essence of contract in present civil suit and plaintiffs are not entitled for relief of specific performance of contract due to their own act of omission and commission and also negligence. It is pleaded that permission under Section 118 of H.P. Tenancy and Land Reforms Act 1972 for purchase of suit land not sought till date by plaintiffs as per terms and conditions of contract. It is pleaded that plaintiffs Nos. 1 and 2 have no locus standi to seek the relief under Specific Relief Act 1963 in favour of coplaintiff No. 3 with whom there is no privity of contract. It is pleaded that present suit is barred by limitation. It is denied that defendant had received a sum of Rs.79 lac (Rupees seventy nine lac) upto March 2010 as earnest money. It is pleaded that defendant was always ready and willing to perform his part of contract for registration of sale deed. It is pleaded that co-plaintiffs Nos. 1 and 2 did not perform their part of contract and they are not legally entitled to seek specific performance of contract executed between plaintiff No.1 and defendant. It is pl
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