1. Agreement for sale of property — Condition for obtaining government permission — Suit for specific performance filed after significant delay. (Para 2 , 3 )
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2019 Supreme(SC) 252
SUPREME COURT OF INDIA
L. Nageswara Rao, Mohan M. Shantanagoudar, JJ.
Urvashi Aggarwal (Since Deceased) Through Lrs. And Another – Appellant
Versus
Kushagr Ansal (Successor In Interest Of Erstwhile Defendant No.1 Mrs. Suraj Kumari) And Others – Respondent
Civil Appeal No. 2525 of 2019 (Arising Out of SLP(Civil) No. 32480 of 2018)
Decided on : 06-03-2019
Advocates Appeared:
For the Appellant :Mr. Yashraj Singh Deora, Advocate,
For the Respondent:Mr. Vikas Tiwari, Advocate, Mr. Sunil Prakash Sharma, Advocate and Mr. Yashraj Singh Deora, Advocate.
For the Appellant :Mr. Yashraj Singh Deora, Advocate,
For the Respondent:Mr. Vikas Tiwari, Advocate, Mr. Sunil Prakash Sharma, Advocate and Mr. Yashraj Singh Deora, Advocate.
Important Point
Plaintiffs have to perform their part of agreement within a reasonable period.
Headnote:Specific Relief Act, 1963 – Section 16(c) – Constitution of India – Article 136 – Agreement to sell – Suit for specific performance of agreement – Trial Court dismissed suit by concluding that time was of essence of Agreement – Plaintiffs were held to be neither ready nor willing to perform their part of Agreement and that suit was filed beyond prescribed period of limitation – High Court dismissed Plaintiffs’ appeal and affirmed judgment of Trial Court – Clauses in Agreement have neither been amended nor varied – Merely because Defendants were pursuing application filed for permission before L&DO, it cannot be said that date fixed for performance of Agreement stood extended – Plaintiffs have not performed their part of Agreement within a reasonable period – Silence maintained by Plaintiffs for about 12 years amounted to abandonment of Agreement – Failure on part of Plaintiffs in not paying monthly instalments of Rs.7,000/-, not collecting rent from tenant on ground floor, not paying house tax etc., and not taking any action for eviction of tenant on ground floor are some of points held against Plaintiffs by Courts below which show that they were not ready and willing to perform their part of Agreement – There is no compelling reason to re-examine said findings of fact by Courts below in exercise of jurisdiction under Article 136 of Constitution of India – Plaintiffs have paid Rs.70,000/- way back in 1975 and steep increase in price of property over time, Plaintiffs are entitled to a higher amount than what was granted by High Court – Instead of refund of Rs.70,000/- with interest at the rate of 24% p.a., Defendants directed to pay Rs. 2,00,00,000/- to Plaintiffs. (Paras 6, 11 to 15)
Facts of Case:
Correctness of judgment of High Court, affirming judgment of Trial Court by which suit for specific performance filed by Appellant and his mother (since deceased) was dismissed, is issue in the appeal. Trial Court dismissed suit by concluding that time was of essence of Agreement.
Findings of Court:
High Court directed refund of Rs. 70,000/- which was paid by Plaintiffs to Defendants in 1975 with interest at the rate of 24% p.a.. In view of peculiar facts of this case in which Plaintiffs have paid Rs.70,000/- way back in 1975 and steep increase in price of property over time, we are of considered opinion that Plaintiffs are entitled to a higher amount than what was granted by High Court. Instead of refund of Rs. 70,000/- with interest at the rate of 24% p.a., we direct Defendants to pay Rs. 2,00,00,000/- to Plaintiffs within a period of eight weeks from today.
Result : Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Plaintiffs claim limitation extended by pending permissions and conduct — Defendants argue suit is barred by limitation and lack of readiness and willingness. (Para 4 , 8 , 9 )
3. Suit filed twelve years after fixed date — Failure to perform essential terms indicates lack of readiness and willingness — Prolonged silence amounts to abandonment. (Para 10 , 11 , 12 , 13 )
4. Limitation for specific performance begins from the fixed date regardless of unfulfilled conditions — Performance must occur within a reasonable time even if time is not essence. (Para 10 , 11 )
5. Appeal dismissed — Defendants directed to pay a specified sum to the plaintiffs. (Para 14 , 15 )
6. Does the failure to fulfill a condition precedent in an agreement to sell postpone the start of the limitation period for specific performance?
No. When a date is fixed for performance, the limitation period begins from that date. A vendee cannot claim the cause of action has not arisen simply because certain conditions in the contract have not been complied with. (Para 10 )
7. Is a plaintiff required to perform their part of a contract within a specific timeframe if time is not of the essence?
Yes. Even where time is not of the essence of the contract, the plaintiff must perform their part within a reasonable time, determined by surrounding circumstances, express terms, and the nature of the property. (Para 11 )
8. Can prolonged silence and inaction by a party be construed as abandonment of an agreement to sell?
Yes. Maintaining silence for an extended period after the fixed date for performance can be interpreted as abandonment of the agreement. (Para 12 )
9. What factors may indicate a party's lack of readiness and willingness to perform a contract for specific performance?
Failure to make stipulated payments, failure to collect rents, failure to pay house taxes, and failure to take necessary actions for eviction of tenants can demonstrate a lack of readiness and willingness. (Para 13 )
JUDGMENT
L. Nageswara Rao, J.
Leave granted.
1. The correctness of the judgment of the High Court, affirming the judgment of the Trial Court, by which the suit for specific performance filed by the Appellant and his mother Smt. Urvashi Aggarwal (since deceased) was dismissed, is the issue in the above appeal. The parties are being referred to as they are arrayed in the suit.
2. The plaint averments are that Justice Chander Bhan Aggarwal, father-in-law of the First Plaintiff (Smt. Urvashi Aggarwal) took the first and second floors of the property at 82, Jor Bagh, New Delhi on rent from Smt. Suraj Kumari (since deceased). After the death of Justice Chander Bhan Aggarwal in 1973, the tenancy of first and second floors of the property was transferred to M/s Vinod Industries Limited (of which the First Plaintiff was a Director). On 05.10.1974, the First Plaintiff and her son Rajiv Chander Aggarwal (since deceased) entered into an agreement with Smt. Suraj Kumari (original Defendant No. 1) for the sale of the above property ('Agreement'). The consideration for the sale of the property was fixed at Rs. 1,85,000/-. The relevant conditions pertaining to the payment of the amount of consideration and the other rights that were conferred on the parties were mentioned in the plaint. According to the Plaintiffs, the sale deed had to be executed by the Defendant No. 1-Smt. Suraj Kumari after obtaining permission from the Land and Development Office (L&DO) and from the Income Tax Department. It was stated that the Plaintiffs paid an amount of Rs. 20,000/- on 05.10.1974, Rs. 40,000/- on 31.01.1975 and Rs. 10,000/- on 26.12.1975. According to them, they were put in proprietary possession of the premises on payment of Rs. 70,000/- as stipulated in the Agreement.
3. M/s Vinod Industries stopped paying the rent to Smt. Suraj Kumari as it had become a tenant of the Plaintiffs as per the Agreement. The tenant of the ground floor- Shri A.C. Deb had to pay the rent to the Plaintiffs as per the Agreement. The Plaintiffs permitted the First Defendant to collect the rent from Shri Deb, the tenant of the ground floor which would be adjusted later against the balance amount payable by them towards the sale consideration. Shri Deb died in 1985 and his wife continued to live on the ground floor. Mrs. Deb vacated the ground floor premises at the end of September, 1987. After Mrs. Deb vacated the ground floor, the Defendants started making repairs. On an enquiry made by the Plaintiffs, the Defendants informed them that the Defendant No. 4 intended to occupy the ground floor for which reason the repairs were being made. The Plaintiffs demanded specific performance of the Agreement on 13.10.1987 but the Second Defendant refused to convey the property which gave rise to a cause of action to file the suit. The Plaintiffs stated that from 1975 onwards the First Plaintiff's husband was continuously enquiring with the Second Defendant about the status of the permission by the L&DO. He was being informed that the permission was not granted. The Plaintiffs pleaded that they were always ready and willing to perform their part of the Agreement and alleged that the Defendants were guilty of breach of the Agreement. On the basis of the said averments, the Plaintiffs sought a decree for specific performance and a direction to the Defendants to execute the sale deed for the suit property, a prohibitory injunction restraining the Defendants from occupying or permitting others to occupy the ground floor of the said property, and a mandatory injunction to the Defendants to remove the wall constructed on the side gate of the property.
4. The Defendants filed a written statement in which they contended that the suit was barred due to laches and that it was liable to be dismissed as the Plaintiffs were not ready and willing to perform the essential terms of the Agreement. There was no denial about the execution of the Agreement dated 05.10.1974 but the averment pertaining to the Plaint
