IMPORTANT POINT
Agreement to Sell – Suit for Specific Performance cannot be decreed after termination of sale agreement by defendant.

JUDGMENT

C.M. Poonacha, J.—The present appeal is filed by the plaintiff challenging the order dated 20.1.2016 passed on issue No.8 in OS No.4088/2005 by the XXXIX Additional City Civil Judge, Bangalore City [Hereinafter referred to as the ‘Trial Court’], whereunder the Trial Court answered issue No.8 in the affirmative and dismissed the suit as barred by limitation.

2. For the sake of convenience, the parties herein are referred to as per their ranking before the Trial Court.

3. The relevant facts necessary for consideration of the present appeal are that the plaintiff filed a suit for specific performance to direct the defendants to execute the registered Sale Deed in performance of the agreement dated 22.2.1996 by receiving the balance sale consideration. It is the case of the plaintiff that he agreed to purchase the suit property from the first defendant for a total sale consideration of Rs. 32.00 lakhs and they entered into an Agreement of Sale dated 22.2.1996 with regard to the same and on the said date, an advance of Rs. 5.00 lakhs was paid. That the first defendant was the General Power of Attorney Holder of the second defendant who was the owner of the property. That subsequently, after settling the tenants, the plaintiff occupied the suit property. It is further averred that the term for completion of the sale transaction was nominally fixed as 3 months. However, the defendants have failed to comply with their obligation and the transaction was not completed within the said period. However, the time for completion was extended, and that the plaintiff paid a further sum of Rs. 5.00 lakhs on 27.1.1997 through a Demand Draft as also a sum of Rs. 10.00 lakhs by a post dated cheque. Despite the plaintiff notifying the defendants for completion of the transaction and the plaintiff being ready and willing to perform his part of the contract, defendant Nos.1 and 2 have not completed the sale transaction. The plaintiff having noticed that the first defendant is making negotiations with other parties, the suit for specific performance was filed.

4. Defendant Nos.1 and 2 entered appearance in the suit and filed their written statements. They admit execution of the Agreement of Sale dated 22.2.1996 and receipt of advance of Rs. 5.00 lakhs. However, it is contended that the plaintiff having failed to complete the sale transaction, the defendant Nos.1 and 2 have terminated the sale agreement. That the plaintiff is in occupation of the suit property as a tenant and his tenancy has been terminated by issuing a notice dated 17.6.1997 as also by a paper publication on 9.3.2002. That the further payment of Rs. 5.00 lakhs is received towards the rent amount. That defendant Nos.1 and 2 have already sold the suit property and defendant Nos.3 to 5 are the subsequent purchasers of the suit property from defendant Nos.1 and 2 under the registered Sale Deed dated 26.2.2005.

5. Consequent to the pleadings of the parties, the Trial Court vide order dated 2.12.2010 has framed 10 issues. Thereafter, vide order dated 12.12.2011 issue No.8 was recasted and framed as follows:

“8. Is the suit barred by time?”

6. The plaintiff adduced evidence on Issue No.8 by examining himself as PW.1 and also examined PW.2. Exs.P1 to P3 were marked in evidence. The defendants have not adduced any oral or documentary evidence. The Trial Court by its order dated 20.1.2016 held issue No.8 in the affirmative and dismissed the suit of the plaintiff as barred by time. Being aggrieved, the present appeal is filed.

7. Leaned counsel for the appellant/plaintiff vehemently contended that the suit is within time and that refusal of performance ought to be construed from the date of receipt of notice dated 8.7.2004 (Ex.P1) and if the same is taken as the relevant date, the suit having been filed on 1.6.2005, is within time. It is further contended that the Trial Court has erred in construing that the date of refusal for performance as 17.6.1997 and has misconstrued Section 54