Summary
The Supreme Court set aside specific performance because the purchaser and his assignees had notice of refusal more than three years before suing. Correspondence and the earlier injunction suit showed that knowledge; the pending partition litigation was not a contractual condition postponing performance, and assignment did not restart limitation. The Court left the separate procedural bars undecided. Under Article 142 it substituted a Rs 50 lakh money decree against the vendor, with conditional interest, and permitted withdrawal of the purchasers’ court deposit.
Issues
- When limitation began under the refusal limb of Article 54.
- Whether the pending partition suit, correspondence or assignment postponed the limitation period.
- What relief should follow setting aside specific performance.
Provisions considered
- Article 54 and Section 9, Limitation Act, 1963On the refusal limb applied here, knowledge shown by the 1991 notices and injunction proceedings started the three-year period. Once running, limitation did not stop because of later asserted inability to sue; the 1995 specific-performance suit was late. (¶¶ 19, 20, 21, 22, 23, 24, 25, 26, 27)
- Section 63, Indian Contract Act, 1872The alleged extension by conduct failed on the evidence: the vendor’s communications showed refusal, not forbearance or an accepted extension of performance. (¶¶ 23, 24, 26)
- Article 142, Constitution of IndiaDespite rejecting the ordinary refund entitlement in the time-barred suit, the Court granted case-specific monetary relief accounting for the advance, layout-related expenditure and surrounding circumstances. (¶¶ 29, 30, 31)
Held
- The purchaser’s own notices and injunction plaint showed notice of refusal in 1991. Subsequent replies confirmed that refusal, and continued prosecution of the injunction action contradicted an asserted understanding that no cause of action had arisen. The suit filed in September 1995 was consequently out of time. (¶¶ 20, 21, 22, 23, 27)
- The contract disclosed the partition litigation but did not make its disposal a condition precedent to sale. The Trust-land issue likewise did not postpone suit. The correspondence had to be read as a whole, and a refusal could not be treated as an extension by forbearance. (¶¶ 24, 25, 26)
- The limitation defence disposed of the specific-performance claim. Although the Court considered the constructive-res-judicata and Order II Rule 2 objections substantial, it expressly declined a final affirmative ruling on them. (¶ 19)
- Article 142 relief was fashioned separately from an ordinary refund decree. Rs 50 lakh was decreed against the vendor; if unpaid within six months, eight per cent annual interest would run from the judgment date until payment. The plaintiffs could also withdraw their deposited consideration with accrued interest. (¶¶ 29, 30, 31)
Result
Purchasers’ appeals allowed and specific-performance decree set aside. Vendor’s appeal allowed to that extent, with a substituted Rs 50 lakh money decree and conditional 8% annual interest on nonpayment within six months. Plaintiffs may withdraw the court deposit with accrued interest. No costs.