Non -  Reportable    

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 2525 of 2019 [ Arising out of S.L.P. (Civil) No. 32480 of 2018 ]

Urvashi Aggarwal (since deceased) Through LRs. &  Anr.     

  .... Appellants    

Versus

Kushagr  Ansal  (successor  in  interest  of  erstwhile Defendant No.1 Mrs. Suraj Kumari) & Ors.

   ….Respondents

J U D G M E N T

L. NAGESWARA RAO, J.

Leave granted.  

1. The correctness of the judgment of the High Court,

affirming the judgment of the Trial Court, by which the suit

for  specific  performance  filed  by  the  Appellant  and  his

mother  Smt.  Urvashi  Aggarwal  (since  deceased)  was

dismissed, is the issue in the above appeal.  The parties

are being referred to as they are arrayed in the suit.

2. The plaint averments are that Justice Chander Bhan

Aggarwal, father-in-law of the First Plaintiff (Smt. Urvashi

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Aggarwal) took the first and second floors of the property

at 82, Jor Bagh, New Delhi on rent from Smt. Suraj Kumari

(since deceased).  After the death of Justice Chander Bhan

Aggarwal in 1973, the tenancy of first and second floors of

the  property  was  transferred  to  M/s  Vinod  Industries

Limited  (of  which  the  First  Plaintiff  was  a  Director).  On

05.10.1974, the First  Plaintiff and her son Rajiv Chander

Aggarwal (since deceased) entered into an agreement with

Smt. Suraj Kumari (original Defendant No.1) for the sale of

the above property (‘Agreement’).  The consideration for

the sale of  the property was fixed at  Rs.1,85,000/-.  The

relevant  conditions  pertaining  to  the  payment  of  the

amount  of  consideration  and the  other  rights  that  were

conferred  on  the  parties  were  mentioned  in  the  plaint.

According  to  the  Plaintiffs,  the  sale  deed  had  to  be

executed by the Defendant No.1-Smt. Suraj Kumari after

obtaining  permission  from  the  Land  and  Development

Office (L&DO) and from the Income Tax Department.   It

was  stated  that  the  Plaintiffs  paid  an  amount  of

Rs.20,000/- on 05.10.1974, Rs.40,000/- on 31.01.1975 and

Rs.10,000/- on 26.12.1975.  According to them, they were

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put in proprietary possession of the premises on payment

of Rs.70,000/- as stipulated in the Agreement.   

3. M/s Vinod Industries stopped paying the rent to Smt.

Suraj Kumari as it had become a tenant of the Plaintiffs as

per the Agreement.  The tenant of the ground floor- Shri

A.C. Deb had to pay the rent to the Plaintiffs as per the

Agreement.  The Plaintiffs permitted the First Defendant to

collect the rent from Shri  Deb, the tenant of the ground

floor which would  be adjusted later  against  the balance

amount payable by them towards the sale consideration.

Shri Deb died in 1985 and his wife continued to live on the

ground floor. Mrs. Deb vacated the ground floor premises

at the end of September, 1987.  After Mrs. Deb vacated the

ground floor, the Defendants started making repairs. On an

enquiry made by the Plaintiffs,  the Defendants informed

them  that  the  Defendant  No.4  intended  to  occupy  the

ground floor for which reason the repairs were being made.

The  Plaintiffs  demanded  specific  performance  of  the

Agreement  on  13.10.1987  but  the  Second  Defendant

refused to convey the property which gave rise to a cause

of action to file the suit.   The Plaintiffs stated that from

1975  onwards  the  First  Plaintiff’s  husband  was

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continuously enquiring with the Second Defendant about

the status of the permission by the L&DO.  He was being

informed  that  the  permission  was  not  granted.   The

Plaintiffs pleaded that they were always ready and willing

to perform their part of the Agreement and alleged that

the Defendants were guilty of breach of the Agreement.

On the basis of the said averments, the Plaintiffs sought a

decree  for  specific  performance  and  a  direction  to  the

Defendants to execute the sale deed for the suit property,

a  prohibitory  injunction  restraining  the  Defendants  from

occupying or permitting others to occupy the ground floor

of  the said property,  and a mandatory injunction to the

Defendants  to  remove the  wall  constructed  on  the  side

gate of the property.    

4. The  Defendants  filed  a  written  statement  in  which

they contended that the suit was barred due to laches and

that it was liable to be dismissed as the Plaintiffs were not

ready and willing  to  perform the  essential  terms  of  the

Agreement.  There was no denial about the execution of

the  Agreement  dated  05.10.1974  but  the  averment

pertaining to the Plaintiffs complying with the conditions of

the Agreement was seriously disputed by the Defendants.

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According to the Defendants, time for payment was of the

essence of the contract and the Plaintiffs failed to make

the  payment  as  stipulated  in  the  Agreement.   The

allegation made by the Plaintiffs that inquiries were being

made about the status of the application before the L&DO

was denied.   The Defendants categorically stated in  the

written statement that the Agreement was never changed,

varied,  or  modified.  The  Defendants  asserted  that  the

Plaintiffs were never put in proprietary possession of any

part  of  the  property,  the  tenant  on  the  ground  floor

continued  to  pay  the  rent  to  the  First  Defendant,  the

house-tax, ground rent etc.  were being paid by the First

Defendant, and M/s Vinod Industries stopped paying rent

to the First Defendant. Apart from the other averments, the

Defendants  also  stated  in  the  written  statement  that  a

petition for eviction against the tenant on the ground floor

was filed by the Defendants and they ultimately settled the

matter with Mrs. Deb who vacated in 1987.  Finally, the

Defendants  pleaded that  the Plaintiffs  were never  ready

and willing to perform their part of the contract and hence,

the suit was liable to be dismissed.

5. The Trial Court framed the following issues:

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“1. Whether the suit is within limitation? 2. Whether the suit is not bad for misjoinder of parties in cause of action? 3.  Whether the Agreement to  sell  dated 5/10/74 was amended  and  varied  by  the  parties  with  regard  to payment of Rs. 50,000/- upto 31/10/74 and the balance sale  consideration  in  installments  of  Rs.7,000/- commencing from January 1975 till full payment of the sale consideration as alleged? If so, to what effect? 4.  Whether  the  amount  of  Rs.  10,000  paid  by  the plaintiffs  was  towards  installment  of  Rs.  50,000  as alleged by the plaintiff? 5.  Whether  the  plaintiff  was  put  into  proprietary possession of the entire suit property by defendant no. 1 as alleged in para 15 of the plaint? 6.  Whether  there  is  a  subsisting  Agreement  to  sell capable of specific performance as alleged? 7.  Whether  the  defendant  committed  breach  of  the contract? 8. Whether the plaintiff has been ready and willing to perform the Agreement to sell? 9. Whether time for payment was not the essence of the contract, as alleged by the plaintiff? 10.  Whether  the  Agreement  to  sell  was  breached, repudiated, abandoned, and given up, as alleged by the defendant? 11.  Whether  the  plaintiffs  are  entitled  to  specific performance of the Agreement to sell dated 5/10/74 and to what other relief or reliefs are the plaintiffs entitled to and against whom? 12.  Relief.”

6. The Trial Court dismissed the suit by concluding that

time was of the essence of the Agreement.  The Plaintiffs

were held to be neither ready nor willing to perform their

part of the Agreement and that the suit was filed beyond

the  prescribed  period  of  limitation.   The  High  Court

dismissed the Plaintiffs’ appeal and affirmed the judgment

of  the  Trial  Court  agreeing  with  the  submissions  of  the

Defendants that the suit was barred by limitation and that

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the Plaintiffs failed to prove their readiness and willingness

to perform the essential terms of the Agreement.   

7. Before  embarking  upon  the  adjudication  of  the

dispute, it would be relevant to refer to the relevant terms

of the Agreement entered into between the Plaintiffs and

the Defendants.  The suit property was agreed to be sold

at  a  price  of  Rs.1,85,000/-.   The  first  instalment  of

Rs.20,000/-  was  to  be  paid  at  the  time  of  signing  the

Agreement and the second installment of Rs.50,000/- was

due  by  31.10.1974.  Balance  amount  was  payable  in

instalments of Rs.7,000/- per month beginning from the 1st

week of January, 1975 until the total amount was paid.  No

interest was payable on the deferred payment schedule till

December, 1975.  A simple interest at the rate of 12% p.a.

was payable on the balance amount from January, 1976

every month along with the installments of Rs.7,000/- per

month.  The rate of interest was increased from 12% to

24%  if  all  the  payments  were  not  made  as  per  the

schedule.  On  payment  of  the  first  two  installments  of

Rs.20,000/- and Rs.50,000/-, the Plaintiffs were entitled to

receive the rents from Shri A.C. Deb who was residing on

the ground floor as a tenant and M/s Vinod Industries. The

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liability for payment of the house tax, ground rent and all

other outgoings had to be borne by the Plaintiffs after the

Plaintiffs started receiving the rents from Shri A.C. Deb and

M/s Vinod Industries.  The Plaintiffs were made responsible

for taking steps to evict the tenants.  The Defendants had

to get the necessary permission to sell the property from

the L&DO before the date of execution of the sale deed as

well  as  the  necessary  permission  from  the  Income  Tax

Authorities. Clause 10 of the Agreement provided that the

sale deed shall be executed before 31.03.1975.  In case of

failure on the part of the Defendants to execute the sale

deed,  the  Plaintiffs  were  given the  right  to  get  the  suit

property  conveyed  by  specific  performance  through  the

Court.   

8. We have heard  Mr.  Jayant  Bhushan,  learned Senior

Counsel for the Appellants/Plaintiffs and Mr. Sachin Datta,

learned  Senior  Counsel  for  the  Respondents/Defendants.

Mr. Jayant Bhushan submitted that the suit was filed within

the prescribed period of limitation and the findings of the

Courts  below that  the  suit  was  barred  by  limitation  are

unsustainable.   According  to  him,  no  cause  of  action

accrued for filing a suit on 31.03.1975, which was the date

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fixed  for  execution  of  the  sale  deed,  as  there  was  no

permission  granted  by  the  L&DO  for  transfer  of  the

property as on that date. He submitted that a sale deed

could not have been executed without the permission from

the L&DO. He relied upon Section 63 of the Indian Contract

Act, 1872 to urge that the date fixed for execution of the

sale deed could be extended. There is no dispute about the

pendency  of  the  application  filed  by  Smt.  Suraj  Kumari

before the L&DO even on 31.03.1975.  He argued that the

conduct  of  both  the  Plaintiffs  and  the  Defendants  after

31.03.1975 would show that the date fixed for execution of

the sale deed on 31.03.1975 stood extended.  He stated

that once the date fixed in the Agreement was extended

and no new date was fixed, the second part of Article 54 of

the Schedule to the Limitation Act, 1963 (Limitation Act)

would apply and the limitation for filing the suit would start

from the date of refusal to perform the Agreement. There

was  no  refusal  to  perform  the  Agreement  by  the

Defendants  until  1987 and thereafter,  the suit  was filed

within the period of limitation. Mr. Bhushan contended that

Section  16(c)  of  the  Specific  Relief  Act,  1963  stood

complied with as the Plaintiffs pleaded and proved their

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readiness and willingness to perform the essential terms of

the  Agreement.  He  submitted  that  there  was  no  doubt

about the financial capacity of the Plaintiffs in paying the

balance  sale  consideration  due  to  their  affluent

background. In view of the friendly relations between Vinod

Chander Aggarwal,  the husband of the First Plaintiff and

Sushil  Ansal,  Defendant  No.2  (not  a  party  to  the

Agreement),  it  is  submitted  by  Mr.  Bhushan  that  the

Plaintiffs  believed  that  the  application  for  permission

before the L&DO was still pending and in any event, the

Defendants  did  not  inform  the  Plaintiffs  about  the

permission  granted  by  the  L&DO  in  the  year  1977.

Assuming  that  time  is  the  essence  of  the  Agreement,

according  to  Mr.  Bhushan,  Section  55  of  the  Indian

Contract Act provides for the contract becoming voidable

at  the  instance  of  the  Plaintiffs  which  option  was  not

exercised by them.  In case, time is not the essence, the

Plaintiffs are entitled for damages.   He further stated that

the Defendants did not terminate the Agreement and did

not refund the amount paid by the Plaintiffs toward part of

the sale consideration.   

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9. Mr. Sachin Datta,  learned Senior  Counsel  appearing

for the Defendants submitted that the limitation for filing

the suit started on 31.03.1975, which was the date fixed

for performance of the Agreement. As the suit was not filed

within  three  years  from  that  date,  it  was  barred  by

limitation.   He  referred  to  the  findings  recorded  by  the

Courts below that the agreement was neither varied nor

modified.  He further submitted that the non-fulfilment of

the condition pertaining to obtaining permission cannot  be

an excuse for  the Plaintiffs to not  file a suit  for  specific

performance  within  the  prescribed  period  of  limitation.

According  to  him,  the  second  part  of  Article  54  of  the

Schedule  to  the  Limitation  Act  is  not  applicable  to  this

case.   He asserted that there was an inordinate delay in

filing the suit which by itself is a ground for dismissal of the

suit.  The torpid silence of the Plaintiffs in not resorting to a

legal  remedy within a reasonable period tantamounts to

their  abandoning  the  Agreement.  Finally,  Mr.  Datta

submitted  that  the  findings  of  fact  on  the  point  of

readiness and willingness cannot be interfered with by this

Court in exercise of its jurisdiction under Article 136 of the

Constitution of India.    

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10. There  are  essentially  two  points  that  arise  for  our

consideration in this case. The first relates to limitation. A

specific date i.e. 31.03.1975 was fixed for performance of

the Agreement,  i.e.  execution of  the sale deed.   As per

Article 54 of the Schedule to the Limitation Act, when a

date is fixed for performance of the contract, the period of

limitation  is  three  years  from  such  date.  The  cause  of

action has arisen on 31.03.1975 and the suit ought to have

been filed within three years from that date.  Admittedly,

the  suit  was  filed  only  in  the  year  1987.  However,  the

submission  of  the  Plaintiffs  is  that  the  date  fixed  for

performance  of  the  Agreement  stood  extended  by  the

conduct of the parties.   It was submitted that even after

31.03.1975, the Defendants were pursuing the application

filed for permission before the L&DO with the cooperation

of the Plaintiffs.   The further submission of the Plaintiffs is

that  without the permission of the L&DO, the sale deed

could not have been executed on 31.03.1975.  Therefore,

the Plaintiffs submit that the date fixed by the agreement

for the execution of the sale deed stood extended.  It is

settled law that the vendee cannot claim that the cause of

action for filing the suit has not arisen on the date fixed in

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the contract on the ground that certain conditions in the

contract  have  not  been  complied  with.  (See:  Fateh

Nagpal & Co. v. L.M. Nagpal1,  Vishwa Nath Sharma

v.  Shyam  Shanker  Goela2 and  K.  Raheja

Constructions Ltd. v. Alliance Ministries3).   

11. On a detailed consideration of the evidence on record,

the  Courts  below have come to  the  conclusion that  the

clauses in the Agreement have neither been amended nor

varied. Merely because the Defendants were pursuing the

application filed for permission before the L&DO, it cannot

be  said  that  the  date  fixed  for  performance  of  the

Agreement stood extended. We agree with the findings of

the Courts below that the suit  ought to have been filed

within  three years  from 31.03.1975 which was the date

that was fixed by the Agreement. The submission made on

behalf  of  the  Plaintiffs  that  part  II  of  Article  54  of  the

Schedule to the Limitation Act applies to this case and that

the suit  was filed within limitation as the refusal  by the

Defendants was only in the year 1987 is not acceptable.

Moreover,  the Plaintiffs have not performed their part of

the  Agreement  within  a  reasonable  period.   As  per  the 1 (2015) 8 SCC 390, para 6 2 (2007) 10 SCC 595, para 12 3 1995 Supp (3) SCC 17, para 4  

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Agreement, the Plaintiffs were given the right to get the

sale deed executed through the Court in case of failure on

the part of the Defendants to execute the sale deed by

31.03.1975. The Plaintiffs filed the suit 12 years after the

date fixed for performance. It  is relevant to refer to the

judgment of this Court in  K.S.Vidyanadam v. Vairavan4

wherein it was held as follows:

“Even where time is not of the essence of the contract, the  plaintiffs  must  perform  his  part  of  the  contract within a reasonable time and reasonable time should be determined  by  looking  at  all  the  surrounding circumstances  including  the  express  terms  of  the contract and the nature of the property.”

12. The silence maintained by the Plaintiffs for about 12

years amounted to abandonment of the Agreement and we

approve the finding in this regard made by the Trial Court.

13. The Courts below have found that the Plaintiffs failed

to prove their readiness and willingness to perform their

part  of  the  Agreement.   The  failure  on  the  part  of  the

Plaintiffs  in  not  paying  the  monthly  instalments  of

Rs.7,000/-, not collecting the rent from the tenant on the

ground floor, not paying the house tax etc., and not taking

any action for eviction of the tenant on the ground floor

are some of the points held against the Plaintiffs by the

Courts below which show that they were not  ready and 4 (1997) 3 SCC 1

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willing to perform their part of the Agreement.  There is no

compelling reason to re-examine the said findings of fact

by the Courts below in exercise of our jurisdiction under

Article  136  of  the  Constitution  of  India.   We  are  in

agreement  with  the  view  of  the  Courts  below  that  the

Plaintiffs have not proved their readiness and willingness

to perform their part of the Agreement and, therefore, are

not entitled to a decree of specific performance.      

14. The High Court directed a refund of Rs.70,000/- which

was paid by the Plaintiffs to the Defendants in 1975 with

interest at the rate of 24% p.a..   In view of the peculiar

facts  of  this  case  in  which  the  Plaintiffs  have  paid

Rs.70,000/- way back in 1975 and the steep increase in the

price of the property over time, we are of the considered

opinion that the Plaintiffs are entitled to a higher amount

than what was granted by the High Court.  Instead of the

refund of Rs.70,000/- with interest at the rate of 24%  p.a.,

we direct the Defendants to pay Rs. 2,00,00,000/- (Rupees

Two Crores) to the Plaintiffs within a period of eight weeks

from today.

15. Subject  to  the  above  modification,  the  appeal  is

dismissed.                 

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               ..............................J.               [L. NAGESWARA RAO]

 ..............................................J.               [MOHAN M. SHANTANAGOUDAR]

New Delhi, March 06, 2019.

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