Summary
Under a 1989 agreement to sell agricultural land near Chennai, with six months fixed for completion, the purchaser paid earnest money. Within that time he served notices calling on the vendor to complete, and the vendor ignored or refused them. The purchaser sued for specific performance in 1993. The trial court decreed only a refund, because the balance had not been deposited and financial capacity had not been proved. The High Court decreed specific performance. The Supreme Court held that the suit was within time under Article 54 because time ran from the refusal. Mere delay within the limitation period is no bar in India. Readiness and willingness under pre-2018 Section 16(c) is judged in substance, and no deposit was required. The decree was upheld, with the purchaser to pay Rs. 1 crore more given the rise in land prices.
Issues
- Whether a suit for specific performance filed more than three years after the agreement was barred, where the vendor had refused performance after notices served within the contract period.
- Whether delay in filing a suit within limitation is by itself a ground to refuse specific performance.
- Whether the plaintiff had to prove ready funds or deposit the balance consideration in court to satisfy Section 16(c) of the Specific Relief Act as it stood before 2018.
- Whether, given the long lapse of time and the rise in land prices, the decree should be conditioned on a further payment.
Provisions considered
- Article 54, Limitation Act, 1963Time ran from when the plaintiff noticed the refusal to perform, after the vendor ignored and refused notices sent within the six months fixed for completion. It did not run from the date of the agreement, so the suit was in time. (¶¶ 9, 10)
- Section 16(c) and Explanation (pre-2018), Specific Relief Act, 1963Readiness (capacity, including finances) and willingness (intention, shown by conduct) are separate elements. They must be averred and proved in substance, not in set words. Explanation (i) dispenses with tender or deposit unless the court directs it. (¶¶ 14, 15, 16, 17, 18, 21, 22)
- Sections 10 and 20 (pre-2018), Specific Relief Act, 1963The pre-amendment provisions governed this 1989 agreement because the 2018 amendment is prospective. Discretion under Section 20 is guided by judicial principles, and delay and the rise in prices are relevant to how relief is shaped. (¶¶ 13, 19, 20, 23)
Held
- Time under Article 54 began when the plaintiff noticed the refusal. That was after the vendor failed to respond to notices sent within the contract period, not on the date of the agreement. The suit was within limitation, although a purchaser must still act within a reasonable time with regard to the agreed period. (¶¶ 9, 10)
- Unlike in England, specific performance in India is statutory. Mere delay in suing within the limitation period, apart from the plaintiff's conduct, is no ground to refuse relief (Mademsetty Satyanarayana). Limitation and delay are distinct, and delay goes only to discretion under Section 20. (¶¶ 11, 12, 20)
- Readiness and willingness must be continuous, but compliance is judged in spirit and substance (Syed Dastagir). The plaintiff need not keep ready cash or deposit the balance unless the court directs it. Capacity to pay is enough. (¶¶ 15, 16, 17, 18, 21)
- The plaintiff averred and proved notices calling for completion within six months, and the vendor failed to perform. Section 16(c) was satisfied, and the High Court's decree for specific performance was confirmed. (¶¶ 21, 22)
- Because the agreement dated from 1989, land prices had risen steeply and the vendor had kept possession throughout, the purchaser was directed to deposit a further Rs. 1 crore within eight weeks. The vendor would then execute the sale deed. (¶ 23)
Result
Appeal dismissed. The decree for specific performance was upheld on condition that the respondent deposit Rs. 1 crore in the trial court within eight weeks, over and above any amount already deposited. On that deposit, the appellant is to execute the sale deed and may withdraw the amount.