Point of Law: Limitation for filing a suit for specific performance in terms of Article 54 of Schedule to Limitation Act is three years “from date fixed for performance or if no such date is fixed, when plaintiff has notice that performance is refused.”

JUDGMENT :

Jyotsna Rewal Dua, J.

1. Defendant No. 1 was the builder and defendant No. 2 was the owner of the property in question. Pursuant to advertisements issued by these defendants, the plaintiffs applied for a specific flat built by defendant No. 1 in the Group Housing Scheme. Defendant No. 1 accepted plaintiffs’ application for allotment on 28.08.1995. Plaintiffs paid an amount of Rs. 1,10,000/- in all to defendant No. 1. The flat in question was, however, not sold to the plaintiffs. According to the defendants, the flat was sold to defendant No. 3 in October, 1998. On 01.03.1999, the plaintiffs instituted the civil suit for specific performance of agreement dated 28.08.1995. The suit was decreed on 03.11.2006. Against this judgment and decree, two original side appeals have been preferred i.e. OSA No. 15 of 2016 jointly preferred by defendants No. 1 and 2 and the other OSA No. 1 of 2017 has been preferred by defendant No. 3. Plaintiff No. 1 and defendant No. 2 have died during the pendency of these appeals and have been substituted by their legal representatives. Arising out of common judgment & decree dated 03.11.2006 and involving common issues of facts and law, these appeals have been taken up together for decision. Parties hereinafter are being referred to according to their status before the learned Single Judge.

2. Facts

2(i) Plaintiffs filed a civil suit seeking :- (i) specific performance of an agreement dated 28.08.1995 against the defendants, whereby defendant No. 1 had accepted plaintiffs’ application for allotment of Flat No. C-12, 1st Floor, Dilshant Estate, Bharari, Shimla ; (ii) directions to the defendants to hand over physical possession of the flat to the plaintiffs ; (iii) directions to defendants No. 1 and 2 to execute and register the sale deed in respect of the aforesaid flat in favour of the plaintiffs. Plaintiffs’ case was that :-

2(i) (a) On 25.08.1995, defendant No. 1 wrote to plaintiffs regarding opening of booking of flats in Block ‘C’ in Dilshant Estate, Bharari, Shimla. Plaintiffs applied to defendant No. 1 for allotment of Flat No. C-12 on the first floor in Block-C with super area of 990 Sq. ft. Defendant No. 1 accepted plaintiffs’ application on 28.08.1995. Plaintiffs paid a sum of Rs. 50,000/- in cash to defendant No. 1 against a duly issued receipt. Defendant No. 1 was also paid Rs. 10,000/- by the plaintiffs through a bank draft dated 30.08.1995. On 06.11.1995, defendant No. 1 demanded Rs. 50,000/- from plaintiffs to issue allotment letter to them. Plaintiffs paid this amount through bank draft dated 07.12.1995.

2(i) (b) On 12.09.1996, defendant No. 1 sought to return Rs. 60,000/- by a cheque to the plaintiffs towards purported cancellation of the booking. This cheque was sent alongwith a draft typed letter meant to be signed by the plaintiffs expressing their intention to cancel the booking. Plaintiffs did not accept this proposition of defendant No. 1. On 17.09.1996, they sent a letter through advocate requesting defendant No. 1 to honour its commitment and issue allotment letter in their favour for the flat in question. In response, plaintiffs received two letters dated 14.09.1996 and 26.09.1996 from defendant No. 1 stating that due to stay order passed by the High Court, construction of flats in Block C was not possible, hence plaintiffs should accept refund of amount towards cancellation of booking. The plaintiffs responded on 14.10.1996 and informed defendant No. 1 that they were not interested in cancellation of booking and also that they had not received Rs. 50,000/- alleged by defendant No. 1 to have been refunded to them in cash. The plaintiffs also conveyed having no intention to encash the cheque of Rs.60,000/-.

2(i) (c) On 02.12.1996, defendant No. 1 wrote a letter to the plaintiffs seeking return of Rs. 60,000/- in case they wanted to retain the booking. Plaintiffs were also directed to acknowledge refund of Rs. 50,000/- allegedly returned to them in cash by defendant No. 1. Pl