Summary
Under 1997 agreements to sell about 40 acres in Budvel village, Hyderabad, the purchaser paid about 90% of the price but not the balance within the three months clause 3 fixed, on pain of forfeiture. It sued for specific performance only in 2002. The trial court dismissed the suit as time-barred, but the High Court decreed it for 90% of the land, holding the 2018 amendment to Section 10 of the Specific Relief Act retrospective. The Supreme Court allowed the vendors' appeal. Read with the no-enhancement clause, time was of the essence, so limitation ran from June 1997 under Article 54 and the suit was barred. The 2018 amendment is substantive and prospective. The purchaser was not ready and willing, was not in possession, and could not invoke Section 12. The vendors were directed to refund the money paid with 7.5% interest.
Issues
- Whether a suit for specific performance filed in 2002 on 1997 agreements fixing three months for payment of the balance was barred by limitation under Article 54 of the Limitation Act, 1963
- Whether the 2018 amendment to Section 10 of the Specific Relief Act, 1963, making specific performance mandatory, applies retrospectively
- Whether the purchaser proved readiness and willingness and possession, and could obtain part performance under Section 12
Provisions considered
- Article 54, Limitation Act, 1963Because a date for performance was fixed, the first part of Article 54 applied and limitation ran from June 1997. Later notices could not extend it. (¶¶ 35, 37, 38)
- Section 10 (as substituted by Act 18 of 2018), Specific Relief Act, 1963Converting specific performance from a discretionary to a mandatory remedy is substantive. It is prospective from 01.10.2018 and does not govern earlier transactions. (¶¶ 45, 48, 49, 51, 54, 56)
- Sections 12 and 16(c), Specific Relief Act, 1963The purchaser was not ready and willing within the stipulated time. Section 12 does not apply where non-performance results from the plaintiff's own default. (¶¶ 62, 68, 69, 76, 77, 78)
Held
- Clause 3 imposed on the purchaser an obligation to pay within three months on pain of forfeiture, unlike the vendors' unsanctioned certificate obligation. Read with the clause barring any price enhancement in what was a last chance after a failed 1994 agreement, time was of the essence. (¶¶ 31, 32, 33, 34)
- Since a date for performance was fixed, the first part of Article 54 applied. Limitation ran from June 1997 and expired in June 2000, so the 2002 suit was time-barred, and notices issued later could not revive it. (¶¶ 35, 36, 37, 38)
- The 2018 substitution of Section 10 created a new enforceable right in place of discretionary equitable relief and is substantive, not procedural. Whether an amendment is substantive depends on its own nature, not the parent Act. Without express provision it applies only prospectively from 01.10.2018. (¶¶ 45, 47, 48, 49, 51, 53, 54, 56)
- Under the pre-2018 law, the discretion had to be exercised on principle, with strict scrutiny of readiness and willingness where the parties fixed a time. The purchaser made no demand in 1997, its 2000 notice sought renegotiation, and a general duty of good faith cannot be implied to override express time terms. (¶¶ 57, 58, 60, 64, 65, 66, 69)
- The purchaser failed to prove possession. Photographs contradicted the claimed development, and its own prayer for possession showed it was not in possession. Section 12 does not permit part performance where the plaintiff's own breach caused non-performance, and the claim was also barred by delay and laches. (¶¶ 70, 71, 73, 77, 78)
Result
Vendors' appeal allowed and the High Court's decree for specific performance set aside; to do complete justice the vendors were directed to refund the amounts paid with 7.5% interest from the dates of payment, deposited within six months; connected appeals disposed of; parties to bear own costs.