In CIVIL APPEAL No. 9006 OF 2011-SC-Specific Performance of contract, may be enforced when act agreed to be done, was such that compensation in money for its non-performance would not afford adequate relief and breach of contract to transfer immoveable property could not be adequately relieved by compensation in money: SC
Justices Sanjiv Khanna & Bela M. Trivedi [12-10-2022]

Read Judgment: P. DAIVASIGAMANI v. S. SAMBANDAN 

Mansimran Kaur

New Delhi, October 13, 2022:  As per Article 54 of the Limitation Act, 1963, the suit for the specific performance of contract could be filed within three years from the date fixed for the performance, or when no such date has been fixed, from the date when the plaintiff has noticed that performance is refused. In the instant case, the Supreme Court has observed.

 A Division bench of Justice Sanjeev Khanna and Bela M. Trivedi dismissed the present appeal  directed against the judgment passed by the High Court of Judicature at Madras with the observation that there was due compliance of Section 16(c) of Specific Relief Act read with its explanation on the part of the respondent and that it was the appellant who had failed to perform as per the terms of the agreement, though called upon by the respondent to perform.

The short facts giving rise to the present appeal were that the appellant Mr. P. Daivasigamani was the owner of the suit land i.e., the land to an extent of 1 acre out of 1.80 acre of wetland comprising survey nos. 287 and 288, situated in District Ambattur. He had entered into an agreement to sell the suit land with the respondent Shri S. Sambandan on October 5, 1989. 

 The appellant had agreed to sell the said land for a sum of Rs. 6, 50,000/-. On the date of execution of the agreement, the respondent had paid a sum of Rs. 50,000/- by way of earnest money as part of sale consideration. The time for completion of the sale transaction was stipulated to be 6 months in the said agreement. 

As per the case of the respondent, though he had periodically contacted the appellant requesting him to execute the sale deed, and had shown his readiness and willingness to perform his part of the contract, the appellant failed to respond or to perform his part of the contract. 

The respondent thereafter vide the letter dated March 17, 1990 sent by registered post, called upon the appellant to execute a deed of power of attorney and to conclude the said transaction, however there was no response from the appellant to the said letter. 

The respondent thereafter caused a public notice published in the Tamil daily Dinathanthi  and in English daily Indian Express informing the public at large not to enter into any sale transaction with the appellant in respect of the suit property. 

Despite the said efforts having been made by the respondent, the appellant failed to fulfill his obligation under the agreement. The respondent-plaintiff thereafter filed the suit seeking specific performance of the said agreement.

The High Court in the appeal, decreed the suit of the respondent- plaintiff vide the impugned order. 

After considering the rival contentions of the parties, the Court noted that as per Article 54 of the Limitation Act, 1963, the suit for the specific performance of contract could be filed within three years from the date fixed for the performance, or when no such date has been fixed, from the date when the plaintiff has noticed that performance is refused. In the instant case, the execution of the agreement on October 5, 1989 was not disputed.

 It was also proved by the respondent by leading the evidence that the respondent had sent a notice dated March 17, 1990 by registered post and called upon the appellant to execute the power of attorney and to conclude the sale transaction in view of Clause 10 of the agreement. However, there was no response from the appellant to the said letter, the Court noted. 

In furtherance of the same, the Court noted that it cannot be gainsaid said that even though time is not considered as the essence of the contract in case of immovable property and that the suit could be filed within three years as provided in Article 54 of the Limitation Act, the respondent - plaintiff had to perform his part of the contract within the reasonable time having regard to the term of the agreement prescribing the time limit. 

The time limit prescribed in the agreement cannot be ignored on the ground that time was not made the essence of the agreement or that the suit could be filed within three years from the date fixed for performance or from the date when the performance is refused by the vendor, the Court noted. 

Nonetheless, the suit having been filed by the respondent well within the prescribed time limit under Article 54 of the Limitation Act, the respondent could not have been non-suited on the ground of the suit being barred by limitation as sought to be submitted by counsel for the appellant, the Court further noted. 

Now  the next question that was dealt was as  to whether the High Court was justified in granting the relief of specific performance in favour of the respondent – plaintiff . In view of the same, the Court noted that some of the relevant provisions contained in the Specific Relief Act, 1963 . 

In pursuance of the same, the Court observed that from the provisions it clearly emerges that the Specific Performance of the contract, may in the discretion of the court, be enforced, when the act agreed to be done, was such that compensation in money for its non-performance would not afford adequate relief, and that the breach of a contract to transfer immovable property could not be adequately relieved by compensation in money.

 It also emerges that specific performance of a contract could not be enforced in favour of a person, who failed to aver and prove that he had performed or had always been ready and willing to perform the essential terms of the contract, which were to be performed by him. It could also not be enforced in favour of a person who failed to aver in the plaint the performance of, or readiness and willingness to perform the contract according to its true construction, the Court observed. 

Having regard to the facts and circumstances of the case and to the conduct of the parties, the Court stated that it had no hesitation in holding that there was due compliance of Section 16(c) read with its explanation on the part of the respondent and that it was the appellant who had failed to perform as per the terms of the agreement, though called upon by the respondent to perform. 

The High Court also had rightly held that the plaintiff had complied with the requirements of Section 16(c) of the said Act by making a specific pleading with regard to his readiness and willingness and also proving the same by reliable evidence, the Court further observed. 

 This Court did not find any illegality or infirmity in the impugned judgment passed by the High Court. Hence, the appeal was dismissed accordingly.