Summary
Allowing review petitions, the Supreme Court recalled its 2022 judgment that had dismissed the purchaser's suit for specific performance as time-barred and refused relief. That judgment had overlooked the cancellation consequence in Clause 3 for the vendors' default, misread Clause 21 as referring to an earlier failed agreement between the same parties, and ignored the unchallenged finding that the vendors never obtained the required certificates. As no date for performance was fixed, the suit was within limitation, the purchaser was ready and willing, and the High Court's decree was restored. A transfer made after the review was instituted was held subject to lis pendens.
Issues
- Whether the Court's judgment in the civil appeal suffered from errors apparent on the face of the record warranting review under Order XLVII Rule 1 CPC.
- Whether the agreements to sell fixed a date for performance, so as to attract the first rather than the second part of Article 54 of the Limitation Act, 1963.
- Whether the purchaser was ready and willing to perform under Section 16(c) of the Specific Relief Act and entitled to specific performance under unamended Section 10.
- Whether Section 52 of the Transfer of Property Act applies to a sale made after a review petition was filed within limitation but while it lay in the Registry in a defective state.
Provisions considered
- Order XLVII Rule 1, Code of Civil Procedure, 1908 (read with Order XLVII of the Supreme Court Rules, 2013)Grounds of review restated; review is not an appeal, the error must be evident on a mere perusal, and a possible second view is no ground. The misreading of Clauses 3 and 21 and the overlooked finding on the vendors' certificates were held to be such errors. (¶¶ 1, 18, 19, 24, 27, 28, 40, 52)
- Schedule, Article 54, Limitation Act, 1963Read as having two limbs. Since the agreements fixed no date for performance, the second limb applied and time ran from the purchaser's notice of refusal in the vendors' reply to his first legal notice, making the suit timely on either filing date found below. (¶¶ 21, 22, 23, 29, 30, 31)
- Section 10 (before the 2018 amendment), Specific Relief Act, 1963Quoted; even treating the relief as discretionary, the statutory presumption that money compensation is inadequate for breach of a contract to transfer immovable property was unrebutted, and the case was found fit for specific performance. (¶¶ 32, 33, 42)
- Section 16(c) and Explanation (i), Specific Relief Act, 1963Quoted; the purchaser's payments well beyond the earnest money showed readiness and willingness, and under the Explanation actual tender of the balance was unnecessary, so the outstanding balance did not show unwillingness. (¶¶ 34, 35, 36, 41)
- Section 52 and Explanation, Transfer of Property Act, 1882Quoted; its conditions were listed and pendency was held to begin on institution of the proceeding, so a sale made after a review petition was filed within limitation, though before it was registered, binds the transferee by the result. (¶¶ 45, 46, 47, 48, 49)
- Section 12, Specific Relief Act, 1963The High Court's proportionate decree under this provision, which the 2022 judgment had refused on the grounds of breach and limitation, was restored once those grounds fell. (¶¶ 50, 51, 52)
Held
- Clause 3 of the agreements has two parts joined by 'and': the purchaser's default in paying the balance leads to forfeiture of the advance, while the vendors' failure to furnish the certificates leads to cancellation of the agreement. Wholly disregarding the cancellation consequence and treating the clause as penalising only the purchaser was an error apparent on the face of the record. (¶¶ 24, 25)
- Clause 21 referred to the earlier agreement between the original owners and the vendors, to which the purchaser was not a party. Reading it as an earlier failed agreement between the purchaser and the vendors, and as a 'last opportunity', was an obvious factual error. Because the finding that time was of the essence rested heavily on that reading, the error went to the root of the decision. (¶¶ 27, 28)
- Clause 23 alone does not fix a time for performance; Clause 6 provides for execution of the sale deed after the balance is received without any time limit, and the consequence under Clause 3 of non-payment is forfeiture of the advance, not that no sale deed will be executed. The agreements therefore fixed no date for performance. (¶¶ 29, 30)
- Under the second limb of Article 54 the three-year period runs from the date the plaintiff has notice that performance is refused; here refusal was first conveyed in the reply to the first legal notice, and the suit was within limitation whichever of the two dates found by the courts below is taken as the filing date. (¶¶ 22, 30, 31)
- The 2022 judgment's statement that the vendors were ready with the documents relied only on part of DW-1's evidence, overlooking her cross-examination and the trial court's finding, left unchallenged before the High Court, that the vendors never obtained or furnished the certificates; this was a further error apparent on the record. (¶¶ 37, 38, 39, 40)
- A purchaser who has paid a substantial part of the price beyond the earnest money has shown readiness and willingness under Section 16(c); as actual tender is not required where the contract involves payment of money, unwillingness cannot be inferred merely because the balance remained unpaid. With the presumption under unamended Section 10 unrebutted, this was a fit case for specific performance. (¶¶ 41, 42)
- The doctrine of lis pendens applies from the institution of the proceeding, not from issue of notice; a review petition filed within the thirty-day limitation is instituted on filing even if it lies in the Registry with defects, and a sale of the suit property made after that date is subject to the final result of the litigation. (¶¶ 44, 47, 49)
Result
Review petitions allowed. The Court's judgment in the civil appeals recalled and the High Court's judgment, which partly decreed the suit for specific performance in proportion to the consideration paid, restored.