Mobile View
Main Search Forums Advanced Search Disclaimer
Cites 10 docs - [View All]
The Limitation Act, 1963
Article 54 in The Constitution Of India 1949
The Specific Relief Act, 1963
Hutchegowda vs H.M. Basaviah on 9 October, 1952
Keshavlal Lallubhai Patel And ... vs Lalbhai Trikumlal Mills Ltd on 21 March, 1958
Citedby 3 docs
Claude Pinto And Others vs M.V. Shankar Bhat And Another on 4 April, 1996
Smt. Saraswathamma vs H. Sharad Shrikande And Ors. on 1 April, 2005
Dr. N. Kasinath vs Sri Arun R. Rawell And Ors. on 5 February, 2008

User Queries
Karnataka High Court
K. Venkoji Rao vs M. Abdul Khuddur Kureshi on 23 August, 1990
Equivalent citations: AIR 1991 Kant 119, 1991 (1) KarLJ 1
Bench: N Bhat

JUDGMENT

1. This appeal is preferred against the judgment and decree dated 29-11-1989 passed by the II Additional District Judge, Mysore in R.A. No. 21/1984. The facts necessary for the disposal of this appeal, briefly stated, are as under :

2. Plaintiff-respondent filed a suit against the defendant-appellant for specific performance of agreement of sale dated 26-8-1975 executed by the defendant in favour of the former. Plaintiff also prayed for an alternative relief for the damages in the sum of Rs. 6007-24 ps. Plaintiffs case can be briefly summarised as follows : Defendant was the owner of the suit house and plaintiff was a tenant in a portion of the same since 1966. Defendant entered into an agreement of sale of the suit property viz., the southern half of the entire property for Rs. 14.000/-. Rupees 2000/- was received as advance by the defendant. Defendant agreed to complete the sale transaction within 3 months from the date of agreement. In the agreement it was mentioned that the sale was for the purpose of discharging the prior encumbrances.

3. It transpired that the defendant had earlier entered into an agreement of sale with one Smt. Dhondubai. This fact was not made known to the plaintiff at the time when he entered into an agreement. She had filed a suit against the defendant in O.S. No. 139/77 in the Court of the Ist Additional Civil Judge, Mysore. Defendant had promised to get the portions of the property which were in the occupation of the tenants vacated and put the plaintiff in possession of the same. On account of these facts it was not possible for the defendant to execute the sale-deed within the stipulated time. Under these circumstances, the time to execute the sale-deed was extended up to 26-2-1976. Subsequently, that is to say, on 25-8-1977, it was further extended till the disposal of O.S. No. 139/77. O.S. No. 139/77 filed by Smt. Dhondubai was disposed of in the month of December, 1980 and plaintiff and defendant wanted to see if Dhondubai would prefer an appeal against the decision in O.S. No. 139. 1977 which was dismissed. After waiting for some time plain-tiff took back the agreement executed in his favour by the defendant, which was filed in the suit in O.S. No. 139/77 before the Court of the Ist Additional Civil Judge, Mysore. Thereafter, plaintiff called upon the defen-dant to execute the sale-deed by a notice dated 22-4-1981. Defendant was served with the said notice on 30-4-1981. But defendant was postponing the performance which he was expected to do. Plaintiff was always ready and willing to perform his part of the contract as per the terms of the agreement dated 26-8-1975. Since defendant did not do the needful notwithstanding the notice given to him to execute the sale-deed. plaintiff filed the suit in question.

4. Defendant resisted the suit of the plaintiff by his written statement. Defendant admitted the execution of the agreement dated 26-8-1975 fur a sum of Rs. 14,000/-. It was also admitted by him that he received a consideration of Rs. 2000/-. However, he denied than he said amount of Rs. 2000/- was to wards the sale price. Defendant admitted the agreement of sale executed in favour of Dhondubai prior to the execution of the agreement in favour of plaintiff. The fact that Dhondubai had filed the suit at O. S. No. 139/77 was also admitted by the defendant. However, defendant asserted that this fact was known to the plaintiff. He admitted that the time for executing the sale was extended up to 26-2-1976. However, his version was that it was at the instance of the plaintiff that the time was extended. Defendant denied the case of the plaintiff that alter the disposal of the suit filed by Dhondu-bal, he (defendant) evaded the execution of me document. On the other hand, it is contended by the defendant that it was not necessary lor the plaintiff to have waited to see if further proceedings would be taken by Dhondubai. Defendant also took up a con-contion that the suit is barred by time. He asserted that plaintiff was not ready and willing to perform his part of agreement dated 26-8-1975. It was also the case of the de-fendant that he is entitled to damages from the plaintiff since, according to him, plaintiff was a defaulter. He also raised a contention that plaintiff did not pay the rent relating to the portion of the house in his occupation from 26-8-1975. He also denied the other incidental allegations made in the plaint. On these grounds, defendant prayed for the dismissal of the suit.

5. The trial Court on a consideration of the evidence on record and for the reasons recorded in its judgment dated 20-3-1984, decreed the suit of the plaintiff. Being aggrieved by the same, defendant preferred R.A. No. 21/84 before the IT Additional District Judge, Mysore. The II Addl. District Judge, Mysore, by his judgment dated 29-11-1989 dismissed the defendant's appeal. Hence this second appeal.

6. This Court after hearing the learned Advocates on either side, admitted the appeal and raised the following substantial questions of law for consideration in the appeal:

(1) Whether the plaintiffs suit is barred by time?

(2) Whether failure to raise an issue with reference to the questions as to whether the plaintiff was ready and willing to perform his part of the contract has vitiated the judgment of the two Courts below?

(3) Whether the request of the plaintiff for specific performace warranted refusal on the ground of hardship?

7. The learned Advocates representing the parties to the appeal submitted that having regard to the fact that they are ready to argue the appeal on merits and having regard to the fact that the lower Courts records are also there before this Court, the appeal may be taken up for final disposal. Accordingly, the learned Advocates were heard on all aspects including the substantial questions of law raised in the case.

8. It will have to be seen in the first instance as to whether the plaintiffs suit is barred by time. In this connection, the provisions of Art. 54 of the Limitation Act are relevant for consideration. Article 54 of the Limitation Act reads as under :

"The date fixed for the performance, or if no such date is fixed, when the plaintiff has notice that performance is refused."

The meaning of the expression 'date fixed for the performance' will have to be understood in a correct perspective. Though the word 'date' is used in Art. 54, it should not be taken that a particular date should be specifically stated in the agreement. In fact, even if the time of performance cannot be ascertained at the time of agreement itself, if it could be ascertained at the time of performance, it may be said to be a case where the date is fixed for the performance of the contract. For example, an agreement to execute a sale deed after 'saguvali chit' is given can be construed as an agreement where date is fixed. Further, the date that can be fixed with reference to a future event which is certain to happen is the date on which such event takes place. In this connection, the decision in Hutchegowda v. H. M. Basaviah, AIR 1954 Mysore 29 can be looked into with advantage. In the said decision it is pointed out that an agreement to execute a sale after 'saguvali chit' was given was held to be a contract in which date was fixed. Then again this view point is affirmed in the decision in R. Muniswami Goundar (died) v. B. M. Shamanna Gouda, .

Shri Mahabaleshwar Goud, learned learned Advocate for the appellant has placed reliance on the decision in Maha-boob Pasha v. Syed Zaheeruddin, . In the said case, it is pointed out that when the

date for performance is fixed, irrespective of the question as to whether the time is the essence of contract or not, limitation would begin to run from the date fixed. The submission made by Shri Goud, the learned Advocale for the appellant with reference to the said decision cannot be found fault with. As a matter of fact, this Court while reaching the conclusion which it did has relied on the decision of the Madras High Court referred to hereinabove. However, the expression 'date fixed' will have to be understood in the context of the observation made in Muniswami Goundar's case,

referred to above.

9. In this case, the agreement is dated 26-8-1975; initially time was fixed for performance as three months from the date of agreement, that is to say, 26-11-1975. It is seen that time was extended for the first time on 22-11-1975 till 26-2-1976. Again time was extended on 25-8-1977 till_the_disposal of the suit at Q.S.No. 139/77. It is in evidence that the.said suit was disposed of on 12-12-1980. The present suit is filed on 2-12-1982.

10. It is required to be seen as to whether in the facts enumerated hereinabove, can it be said that the suit is barred by time. It was contended by the learned Advocate for the appellant that the extension of time by the endorsement on the document at Ex. P-1 (agreement to sell) was made by the defendant, and if at all the same ought to have been made by the plaintiff. It was also contended that the same should be mutual. In this connection, the learned Advocate for the appellant has invited my attention to the decision in Keshavlal Lallubhai Patel v. Lalbhai Trikumlal Mills Ltd., . In the said case, it is pointed out by the Hon'ble Supreme Court that the extension of time cannot be made unilaterally by the promisee but it should be the result of concen-sual between the parties. It is also pointed out in the said case that extension of time need not be even in writing but it may be proved even by oral evidence. Sri Goud is right in contending that the extension of time should be the result of mutual agreement. However, it is not anybody's case that the extension of time for agreement made in the instant case is not mutual. In fact, the endorsement on Ex. P-l at Ex. P-l(c) and P-l(d) is made by the defendant. Plaintiff has not disputed the same. On the other hand, it is the case of the plaintiff himself that time was extended by mutual agreement. Under these circumstances, the decision pressed into service by Sri Goud, is not of any assistance to him.

11. The learned Advocate for the appellant, however, contended that time was extended for the first time up to 26-2-1976 and by the time it was sought to be extended on 25-8-1977, time for specific performance had already started running (from 26-2-1976) in terms of Art. 54 of the Limitation Act; and that no subsequent disability or inability to institute a suit stops it. Shri Goud has, in this context, relied on the provisions of S. 9 of the Limitation Act. S. 9 of the Limitation Act reads as under :

"Where once time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it.

Provided that, where letters of administration to the estate of a creditor have been granted to his debtor, the running of the period of limitation for a suit to recover the debt shall be suspended while the administration continues."

12. A clear perusal of the aforesaid provision would go to show that it has got its operation only in the context of situations reflected therein. The Section only provides that no subsequent disability or inability to suit can stop limitation from running. The said Section is based on the principle that when once the limitation has commenced to run, it will continue to do so unless it is stopped by virtue of any express statutory provision. It is also necessary to remember here that where a cause of action is through Court or otherwise satisfied or discharged limitation stops running with regard to such cause of action on the fundamental principle that limitation always implies an existing cause of action and where there is no cause of action, there can be no limitation. In such cases, where the satisfaction or discharge of cause of action is nullified by subsequent events, the plaintiff is entitled to fresh cause of action consequent on such nullification and a fresh period of limitation, in respect of such cause oi action. It is indeed necessary to note here that there is no question of limitation involved in such a situation, that is so, because limitation had to be determined with reference to each cause of action and where the plaintiff is entitled to a fresh cause of action, he is also entitled to a fresh period of limitation in respect of such a cause of action. S. 9 of the Limitation Act contemplates cases where the cause of action continues to exist. S. 9 cannot be applied to cases where cause of action is cancelled by subsequent events. Tn this connection, the decision in Prabhakar Nilkanth Oke v. Chandrakant Narayanrao Kelkar, ATR 1943 Nagpur 178 can be looked into with advantage. In the said case, a Division Bench of the said High Court has pointed out that Sec. 9 contemplates cases where cause of action continues to exist and would not apply to cases where the cause of action is cancelled by subsequent events. Further, the decision in Firm Jonnavitula Seetharamanjaneyulu v. Firm Vadlapata Sobhanachalam and Co., AIR 1958 Andh Pra 438 also throws light on this aspect. In the said case, among other things, it is pointed out that when parties have entered into a new agreement, the cause of action would be determined by the terms of the new agreement and not the superseded original contract. It is further pointed out that where under the original contract the deliveries were stipulated to be made to the plaintiff by the defendant in April, May and June, 1947 but the settlement dated 14-2-1947 stipulated for resale of the same goods to the plaintiff but the defendant was liable to pay the plaintiff the difference between the price fixed, the cause of action for claiming the difference arose on 14-2-1947 and not on the dates fixed for deliveries, i.e., 30th April, 31st May and 30th June, 1947. In the instant case, as pointed out earlier, the date fixed for performance has been changed by mutual agreement between the parties. To that extent the earlier agreement is altered and a new agreement in that behalf did come into force. It is also necessary to remember here that extension of time for performance of the agreement is also permitted by statutory provision viz., S. 63 of the Contract Act.

13. In this case, it is no doubt true that initially cause of action to plaintiff to sue did arise on 26-2-1976. However, as pointed out earlier by mutual agreement of the parties, time for performance was extended till the disposal of the suit at O.S. 139/1977 and the said suit was disposed of on 12-12-1980. It is, therefore, clear that the earlier cause of action which accrued to plaintiff to sue was demolished by the agreement of the parties and a fresh cause of action arose on the date on which O.S. No. 139/77 was disposed of i.e., on 12-12-1980. It is seen that the present suit is filed on 2-12-1982, that is to say, within three years from the date fixed for performance. Under these circumstances, I do not find any merit in the submission of the learned Advocate for the appellant that the suit is barred by time. I have no hesitation to hold that the suit is in time.

14. The next question which falls for consideration of this Court is as to whether failure to raise an issue with reference to the question as to whether the plaintiff was ready and willing to perform his part of the contract has vitiated the judgment of the two Courts below. In this case it is seen that the plaintiff has clearly averred in para 4 of the plaint that he has always been ready and willing to perform his part of the contract. It is further seen that this aspect has been argued and considered, in substance, by the Civil Judge at para 9 of his judgment. The 1st Appellate Court has considered this aspect in paras 14 and 15 of its judgment. Under these circumstances, it is clear that the parties have been alive to the issues in question and that the same have been fought out in both the Courts. It is needless to say that the main purpose in raising the issue is to focus the attention of the parties to the question in controversy. Once when that purpose is otherwise accomplished failure to raise an issue cannot be made much of. In this context, the decision in Nedunuri Kameswaramma v. Sampati Subba Rao, , can be looked into with advantage. I have no hesitation whatsoever to hold that no prejudice can be said to have been caused to one party or the other on account of the fact that the issue with reference to the question under consideration has not been raised by the Court below, for the reasons stated earlier. I therefore, hold that there is no substance in the submission made by the learned Advocate for the appellant in this behalf. The substantial question of law raised in this behalf is answered against the appellant.

15. The next point for consideration of this Court is as to whether the facts and circumstances of the case are such as would warrant the refusal of specific performance. In this connection, the provisions of S. 20 are relevant for consideration. It is refreshing to cull out the said provision. It reads as under :

"(1) The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of Appeal.

(2) The following are cases in which the Court may properly exercise discretion not to decree specific performance-

(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or

(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;

(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.

Explanation 1.-- Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant for improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b).

Explanation 2.-- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

(3) The Court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.

(4) The Court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party."

16. The learned Advocate for the appellant submitted that the plaintiff on his own has even quantified the actual amount to which he is entitled to in the event of the grant of alternative relief to him. In that view of the matter, and having regard to the totality of the circumstances, according to Sri Goud, the Courts below ought to have rejected the relief relating to specific performance and if at all ought to have granted the alternative relief claimed by the plaintiff. It will have to be seen as to whether the submission made by the learned Advocate for the appellant in this behalf has any merit. At this juncture, it is relevant to note here that the emphasis of submission made by the learned Advocate for the appellant with reference to this aspect has been on the question of hardship. A perusal of the aforesaid provision would go to show as to under what circumstances hardship 'can be taken into consideration' in refusing specific performance. It is not possible to enumerate the different circumstances which constitute a hardship. It will suffice if it is noted that the question of hardship will have to be adjudged in the facts and circumstances of the case. In this connection, the observations of the Privy Council in the decision in Davis v. Shawe Go, (1911) 11 Ind Cas 801 (PC) throw light on an important aspect of the matter. Among other things, it is observed in the said case as under :

"In the absence of any evidence of fraud or misrepresentation on the part of the plaintiff which induced the defendant to enter into the contract, their Lordships see no reason to accede to the argument. The bargain is onerous, but there is nothing to show that it is unconscionable. The defendant knew all along that a lakh was the plaintiffs limit; it is in evident that he had frequently urged the defendant's daughter to advise him to sell the land if he was getting a higher offer. It is difficult to say under the circumstances that he took an improper advantage of his position or the difficulties of the defendant."

Then again, it is necessary to remember that mere rise in price subsequent to the date of the contract or inadequacy of price is not to be treated as a hardship entailing refusal of specific performance of the contract. Further, the hardship involved should be one not foreseen by the party and should be collateral to the contract. In sum it is not just one factor two, that is relevant for consideration. But it is the some (sum) total on various factors which is required to enter into the judicial verdict. At this juncture it is necessary to remember that defendant has not made out a case alleging hardship muchless has he proved to substantiate the same. He has not been able to show as to how he would be put to any hardship in the event of the grant of specific performance. It is needless to say that every decree for specific performance may entail some inconvenience to the parties against whom such a decree is passed. However, that is not a circumstance constituting hardship within the meaning of that expression employed in S. 20 of the Specific Relief Act. In the instant case, defendant has not even made clear in the course of his evidence as to what was the price which he had paid for the property in question. His evidence if read in a proper perspective would indeed go to show that he was not prepared to lay bare the facts within his knowledge for one reason or the other. In this connection, it is necessary to note here that D.W. 1 in the course of his evidence at page 3 of his deposition has stated that he has purchased the suit property in 1965, but he does not remember for what amount he has purchased it. He was also not in a position to say as to whether he has purchased it for Rs. 6000/- as suggested. He has even gone to the extent of the sale that he did not even know the name of his vendor. It is also in evidence that he had agreed to sell the suit property previously to Dhondu Bai for Rs. 12,500/-. It is also necessary to note here that the defendant has agreed to sell the property in question to the plaintiff for Rs. 14,000/-, and had actually received an advance of Rs.2,000/-. The evidence on record does not go to show that the consideration is inadequate, notwithstanding the fact that inadequacy of consideration by itself cannot constitute a factor warranting the refusal of the decree for specific performance. On the other hand, the circumstances, would indeed go to show that the price agreed to be paid by the plaintiff to the defendant was fair. Further, there are no circumstances to indicate that the parties namely, plaintiff's and defendants were on unequal terms. Further, there is nothing to show that the plaintiff had taken any undue or unfair advantage of the position in which the defendant was placed. Having regard to these materials I am indeed of the view that the plea of hardship sought to he made at this stage by the learned Advocate for the appellant does not find support from the materials on record.

17. Sri Goud, the learned Advocate for the appellant, however, has invited my attention to a decision in Kommisetti Venkatasub-bayya v. Karamsetti Venkateswarlu, . In support of his

submission, the Court has got the power to exercise its discretion in favour of the defendant. In the said case, plaintiff had asserted that he had paid Rs. 1500/- to the defendant and is willing to pay the balance of Rs. 272/- to him hut it was found that he had not paid the sum of Rs. 1500/- to the defendant. In that context, it was observed by the Andhra Pradesh High Court that the plaintiff was disentitled to the discretionary relief of specific performance not only on the ground that he has set up a false plea but also that he was not ready and willing to perform his part of the contract. It is therefore, clear that the ratio in the said case was made in the context of the circumstances referred to hereinabove. I do not find any such circumstances against the plaintiff in the instant case. In this view of the matter, it is clear that the decision in Venkata-subbayya's case is not of any assistance to the appellant in the instant case.

18. Sri Goud. the learned Advocate for the appellant, however, as pointed out earlier, contended that the fact that the plaintiff himself has quantified the damages in the plaint would be a circumstance which should militate against the plaintiff and be in favour of the defenant. I am not impressed at all by the submission made by the learned Advocate for the appellant in this behalf. It is needless to say that under S. 21 of the Specific Relief Act, in a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance. Such a modus operandi is recognised by the statute and such a course of action is confei red by the statute itself. Under these circumstances, if by way of prudence, plaintiff has chosen to incorporate the materials in the plaint leading to his alternate prayer, the same cannot be set up against the plaintiff as a circumstance warranting the refusal of the specific performance. On the other hand, it is necessary to note here that plaintiff has already in possession of a portion of the building as a tenant. This is a circumstance which, in fact, to weigh in favour of the plaintiff.

19. The learned Advocate for the appellant next contended that the plaintiff is guilty of laches, in that even after the disposal of the-suit at O.S. No. 139/77, he committed inordinate delay in coming to the Court and that therefore, he is not entitled to the equitable remedy of specific performance. The doctrine of laches has been explained by the Supreme Court in Mademsetty Satyanarayana v. G. Yelloji Rao, . The same is summarised in the Head Note as under :

"In England the relief of specific performance pertains to the domain of equity; in India, to that of statutory law. In England there is no period of limitation ior institution of a suit for the said relief. Hence white in England mere delay or laches, the time lag depending on circumstances, may be a ground for refusing specific performance, in India mere delay without such conduct on the part of the plaintiff us would cause prejudice to the defendant does not empower a Court to refuse such a relief. But as in England so in India, proof of abandonment or waiver of his rights by the plaintiff, waiver being understood in the sense of an agreement to release or not to assert a right, is not a pre-condition necessary to disentitle the plaintiff to the said relief, for if a abandonment or waiver is established, no question of a discretion on the part of the Court would arise. The conduct of a party which puts the other party in a disadvantageous position, though it does not amount to waiver or abandonment, may in certain circumstances preclude him from obtaining a decree for specific performance. It is not possible or desirable to lay down the circumstances under which a Court can exercise its discretion against the plaintiff. But they must be such that the representation by or the conduct or neglect of the plaintiff is directly responsible in inducing the defendant to change his position to his prejudice or such as to bring about a situation when it would be inequitable to give him such a relief."

It is seen that in the instanct case, the suit at O.S. No. 139/77 was disposed of on 12-12-1980. It is further seen that the present suit is filed on 2-12-1982, that is to say, within three years from the date fixed for performance. Having regard to the totality of the circumstances as reflected from the evidence on record and in the context of the observations of the Supreme Court in the aforesaid case, it cannot be said that the plaintiff is not entitled to the relief of specific performance on the ground that he did not file the suit immediately after the disposal of the suit at O.S. No. 139/77. Thus on a consideration of the substantial question of law raised in this case and other incidental issues which arose for consideration in the context of the submission made by the learned Advocate for the parties, I have no hesitation to hold that the appeal is liable to be dismissed.

20. In the result, the appeal is hereby dismissed. However, the appellant is granted time till the end of October, 1990 (October, nineteen hundred and ninety) to execute the sale deed.

In the facts and circumstances of the case, I direct that both the parties to bear their own costs in this appeal.

21. Appeal dismissed.