REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  1204  OF 2020 (Arising from SLP(C) No. 36253/2014)

Vundavalli Ratna Manikyam & another …Appellants

Versus

V.P.P.R.N. Prasada Rao …Respondent

J U D G M E N T

M.R. SHAH, J.

Leave granted.

2. Feeling aggrieved and dissatisfied with the impugned common judgment

and  order  dated  25.07.2014  passed  by  the  High  Court  of  Judicature  at

Hyderabad for the State of Telangana and for the State of Andhra Pradesh in

Appeal Suit No. 3511 of 1992, whereby the High Court has allowed the said

appeal suit filed by the respondent herein – original plaintiff and has quashed

and set aside the judgment and decree passed by the learned trial Court in O.S.

No. 55 of 1986 dismissing the suit and consequently decreeing the suit of the

respondent herein – original plaintiff for specific performance of the agreement

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to sell  dated 7.5.1981, the original  defendants in O.S.  No. 55 of  1986 have

preferred the present appeal.

3. The facts leading to the present appeal in nutshell are as under:

That one Nimmalapudi Ramaswami – husband of original defendant no.1

was the original owner of the suit land.  That the said Nimmalapudi Ramaswami

agreed to sell  the suit land by executing agreement to sell dated 7.5.1981 in

favour  of  the  original  plaintiff  for  a  sale  consideration  of  Rs.59,200/-.   He

received an advance sale consideration of Rs.26,500/- on the same day.  As per

the agreement to sell, the balance sale consideration was required to be paid

within four months.  However, the time was extended making endorsement on

the reverse of the original agreement to sell for another period of eight months.

But during the extended period, the State Government initiated land acquisition

proceedings  for  acquiring  the  suit  property.   The  original  land  owner  –

Nimmalapudi Ramaswami and the plaintiff made a representation for deleting

the suit property from the proposed land acquisition.  At this stage, it is required

to  be  noted  that  in  the  representation  made  to  the  Assistant  Collector,  the

original land owner categorically admitted that he has sold the suit land to the

plaintiff for consideration and delivered possession of the land to the plaintiff.

The plaintiff  also stated in the said representation that  he has purchased the

property under the agreement to sell and has taken possession of the property in

question. That thereafter the State Government issued notification under Section

4 of the Land Acquisition Act, vide notification dated 21.09.1981.   

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3.1 The said notification came to be challenged by the plaintiff and another

by filing Writ Petition No. 3161 of 1983.  The said writ petition came to be

allowed and the notification came to be set aside by judgment and order dated

22.11.1984.  Appeal  against  the  judgment  of  the  High  Court  came  to  be

dismissed by the Division Bench vide order dated 4.2.1985.  After the death of

the  original  land owner  –  Nimmalapudi  Ramaswami,  the  original  defendant

no.1 – wife of  Nimmalapudi  Ramaswami executed a sale deed in favour of

original defendant no.2 – Bogilla Satyanarayana Murthy.  Apprehending that the

wife  of  late  Nimmalapudi  Ramaswami  –  original  defendant  no.1  –

Nimmalapudi  Veeramma  and  the  said  Bogilla  Satyanarayana  Murthy  may

interfere with his possession, the original plaintiff – respondent herein filed O.S.

No.  24  of  1984 in the Court  of  District  Munsiff  Court,  Ramachandrapuram

against the aforesaid two for permanent injunction and obtained a temporary

injunction.  The  aforesaid  suit  was  subsequently  transferred  to  the  District

Munsif Court, Alamuru which was registered as O.S. No. 188/1984 and later the

said  suit  was  transferred  to  the  Subordinate  Judge,  Ramachandrapuram and

registered  as  O.S.  No.  94/1989  claiming  permanent  injunction  restraining

Bogilla  Satyanarayana  Murthy  and  his  men  from  interfering  with  his

possession.  

3.2 That thereafter the plaintiff got issued a legal notice dated 20.01.1986 to

original defendant no.1 – widow of late Nimmalapudi Ramaswami and Bogilla

Satyanarayana Murthy claiming specific performance of the agreement to sell

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dated 7.5.1981.  Original defendant no.1 – Nimmalapudi Veeramma replied to

the aforesaid notice vide reply notice dated 31.1.1986 contending that she has

already  sold  the  property  to  Bogilla  Satyanarayana  Murthy  for  a  valuable

consideration and consequently refused to execute the sale deed.  Therefore, the

respondent  herein  –  original  plaintiff  filed  O.S.  No.  55/1986  on  the  file  of

Subordinate Judge, Ramachandrapuram against the appellants herein – original

defendants on 23.4.1986 for specific performance of the agreement to sell dated

7.5.1981.  Alternatively, the plaintiff prayed to refund the advance amount of

Rs.26,500/- together with interest @ 18% per annum and award of damages of

Rs.25,000/-.   

3.3 That the said suit was resisted by original defendant no.1 – Nimmalapudi

Veeramma by filing the written statement contending that after the death of her

husband Nimmalapudi Ramaswami she was put in possession of the schedule

property and she executed an agreement to sell dated 16.2.1983 and sold the suit

property for Rs.20,000/- and received an advance of Rs.2,000/- and thereafter

executed a registered sale deed dated 8.7.1983 in favour of defendant no.2 –

Bogilla Satyanarayana Murthy and delivered possession to him on 10.05.1983.

It was also contended that the alleged agreement to sell dated 7.5.1981 is not

true  and  valid  and  it  is  a  collusive  agreement  brought  into  existence  by

Nimmalapudi Ramaswami in anticipation of the land acquisition proceedings.

Original defendant no.1 prayed to dismiss the suit filed by the plaintiff.

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3.4 Original defendant no.2 – Bogilla Satyanarayana Murthy also filed the

written statement in O.S. No. 55/1986.  It was the case on behalf of original

defendant no.2 that he is a bonafide purchaser for a valid consideration and he is

in  possession and enjoyment  of  the same by executing the sale  deed in  his

favour executed by the wife of late Nimmalapudi Ramaswami.

3.5 That both the aforesaid suits being O.S. No. 55/1986 (suit for specific

performance)  and  O.S.  No.  94/1989  (suit  for  permanent  injunction)  were

consolidated  and  heard  together.   In  both  the  suits,  the  learned  trial  Court

framed the issues.  That both the plaintiffs and the defendants led the evidence,

both oral as well as documentary.  That on appreciation of evidence on record,

the  learned  trial  Court  believed  the  execution  of  agreement  to  sell  dated

7.5.1981 in favour of the plaintiff.  The learned trial Court also believed the

possession of the plaintiff at the time of filing of the suit.  However, the learned

trial  Court  denied  the  specific  performance  of  the  agreement  to  sell  dated

7.5.1981 only on the ground that the claim for specific performance is barred by

limitation.

3.6 The learned trial Court decreed O.S. No. 94/1989 and granted permanent

injunction restraining the appellants – original defendants to interfere with the

peaceful possession and enjoyment of the property in question having found

that the plaintiff is in possession and enjoyment of the property.

3.7 Aggrieved by the common judgment and decree passed by the learned

trial Court passed in O.S. No. 55 of 1986 in dismissing the suit  for specific

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performance of the agreement to sell dated 7.5.1981, the original plaintiff filed

Appeal Suit No. 3511/1992 before the High Court.  The original defendants in

O.S.  No.  55/1986  also  filed  Tr.A.S.  No.  439/2006  challenging  the  adverse

findings on issue nos. 1 to 5 in O.S. No. 55/1986, i.e., believing the agreement

to sell  in favour of the plaintiff  and believing the possession of the plaintiff

under the agreement to sell dated 7.5.1981.  At this stage, it is required to be

noted that the learned trial Court dismissed the suit on the ground of limitation

considering Article 54 of the Limitation Act.  However, it was the specific case

on  behalf  of  the  plaintiff  that  Article  113  of  the  Limitation  Act  would  be

applicable and therefore the suit is within the period of limitation.  

3.8 That by the impugned common judgment and order, the High Court has

allowed the appeal suit no. 3511/1992 preferred by the original plaintiff and has

quashed and set aside the judgment and decree passed by the learned trial Court

dismissing the suit for specific performance and consequently has decreed the

suit for specific performance applying Article 113 of the Limitation Act.  By the

impugned  common  judgment  and  order  the  High  Court  has  also  dismissed

Tr.A.S.  No.  439/2006  and  Tr.A.S.  No.  962/2013  preferred  by  the  original

defendants confirming the findings on issue nos. 1 to 5 in O.S. No. 55/1986 and

also confirming the judgment and decree of permanent injunction in O.S. No.

94/1989.

3.9 Feeling aggrieved and dissatisfied with the impugned common judgment

and order passed by the High Court, the original defendants have preferred the

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present appeal. It is required to be noted that what is challenged in the present

appeal  is  the  judgment  and  order  passed  by  the  High  Court  in  A.S.  No.

3511/1992  only,  vide  which  the  High  Court  has  allowed  the  said  appeal

preferred  by the  original  plaintiff  and consequently  has  decreed the  suit  for

specific  performance  of  agreement  to  sell  dated  7.5.1981  in  favour  of  the

original plaintiff.

4. Learned  Advocate  appearing  on  behalf  of  the  appellants  –  original

defendants has vehemently submitted that in the facts and circumstances of the

case  the  High  Court  has  materially  erred  in  quashing  and  setting  aside  the

judgment and decree passed by the learned trial Court dismissing the suit on the

ground of limitation.

4.1 It is further submitted by the learned Advocate appearing on behalf of the

appellants – original defendants that the High Court has materially erred in not

properly appreciating the fact that the learned trial Court rightly dismissed the

suit on the ground of limitation applying Article 54 of the Limitation Act.  It is

submitted that, in the facts and circumstances of the case, Article 113 of the

Limitation Act shall not be applicable.

4.2 It is further submitted by the learned Advocate appearing on behalf of the

appellants – original defendants that as per the original agreement to sell dated

7.5.1981 the sale deed was required to be executed within four months from the

date of execution of the agreement to sell and even the same was extended up to

6.5.1982 only.  It is submitted that therefore the limitation for filing the suit by

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the plaintiff would be three years from 6.5.1982 as provided under Article 54 of

the Limitation Act.  It is submitted therefore as rightly held by the learned trial

Court the suit of the plaintiff was barred under Article 54 of the Limitation Act.

4.3 It is further submitted by the learned Advocate appearing on behalf of the

appellants – original defendants that the High Court ought to have seen that

taking a stray sentence in Ex.A1 (agreement to sell) that vendor has to settle all

the disputes in the property cannot be termed as implied covenant.

4.4 It is further submitted by the learned Advocate appearing on behalf of the

appellants – original defendants that the High Court ought to have appreciated

that  there  has  been  a  valid  sale  by  the  widow  of  the  vendor  in  favour  of

appellant no.2 herein – Bogilla Satyanarayana Murthy and the said sale deed

was acted upon by the widow and  as she was in possession, she put appellant

no.2 herein into possession of the suit property.

4.5 It is further submitted by the learned Advocate appearing on behalf of the

appellants – original defendants that the High Court ought to have appreciated

that  till  notice  dated  20.1.1986  was  served  upon  appellant  no.2  –  original

defendant no.2, appellant no.2 was not aware of the alleged agreement to sell

dated 7.5.1981 in favour of the plaintiff.   It  is submitted that appellant no.2

herein – original defendant no.2 is a purchaser without notice of the existence of

the earlier agreement and on payment of full sale consideration.  It is submitted

that therefore the High Court has materially erred in allowing the appeal and

decreeing the suit for specific performance in favour of the plaintiff.

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4.6 Making the above submissions, it is prayed to allow the present appeal.

5. The  present  appeal  is  vehemently  opposed  by  Mrs.  K.  Sarada  Devi,

learned  Advocate  appearing  on  behalf  of  the  original  plaintiff  –  respondent

herein.

5.1 It  is  submitted  by  the  learned  Advocate  appearing  on  behalf  of  the

respondent herein - original plaintiff that in the facts and circumstances of the

case, the High Court has not committed any error in decreeing the suit relying

upon and applying Article 113 of the Limitation Act.

5.2 It is further submitted by the learned Advocate appearing on behalf of the

respondent herein  - original plaintiff that so far as the execution of agreement

to sell dated 7.5.1981 by original land owner – Nimmalapudi Ramaswami and

that the plaintiff was put in possession there are concurrent findings of fact by

the learned trial Court as well as the High Court, which are on appreciation of

evidence on record.

5.3 It is further submitted by the learned Advocate appearing on behalf of the

respondent herein  - original plaintiff that after the execution of the agreement to

sell dated 7.5.1981 and after the time to make the payment and execution of the

sale deed was extended by a further period of eight months, the land acquisition

proceedings  were  initiated  and  it  was  the  plaintiff  who  challenged  the

acquisition  proceedings  and  in  the  petition  filed  by  him  the  acquisition

proceedings  came  to  be  set  aside  and  the  writ  petition  was  allowed.   It  is

submitted that as mentioned in the agreement to sell – Ex. A1 it was for the

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vendor to settle all the disputes in the property.  It is submitted that after the

land  acquisition  proceedings  came  to  be  quashed  by  the  High  Court  and

thereafter when the plaintiff served a notice upon the defendants to execute the

sale deed and thereafter there was a denial by original defendant no.s 1 & 2

thereafter the suit has been filed within a period of three years.  It is submitted

that therefore Article 113 of the Limitation Act would be applicable and the

same is rightly applied by the High Court.

5.4 It is further submitted by the learned Advocate appearing on behalf of the

respondent herein -  original  plaintiff  that  even and as observed by the High

Court  in  the  impugned  common  judgment  and  order,  the  execution  of  the

agreement to sell dated 7.5.1981 has not been disputed by the defendants.  It is

submitted that however it was their defence that the said agreement to sell was

to defeat the land acquisition proceedings.  It is submitted that therefore when

the agreement to sell dated 7.5.1981 has been admitted by the defendants and

the plaintiff was always ready and willing to perform his part of the contract and

all throughout it was the plaintiff who challenged the acquisition proceedings

which shows the  bonafides  on the  part  of  the  plaintiff,  the  High Court  has

rightly allowed the appeal  and consequently has rightly decreed the suit  for

specific performance of the agreement to sell dated 7.5.1981.

5.5 It is further submitted by the learned Advocate appearing on behalf of the

respondent herein  - original plaintiff that as such there is no appeal preferred by

the defendants challenging the impugned common judgment and order passed

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by  the  High  Court  insofar  as  dismissing  their  appeals  being  Tr.A.S.  No.

439/2006  and  Tr.A.S.  No.  962/2013  by  which  the  High  Court  specifically

confirmed  the  findings  on  issue  nos.  1  to  5  in  O.S.  No.  55/1986  and  also

confirmed the judgment and decree of permanent injunction in favour of the

plaintiff in O.S. No. 94/1989.

5.6 It is further submitted by the learned Advocate appearing on behalf of the

respondent herein - original plaintiff that as such the plaintiff is in possession of

the suit property since 1981 and therefore also the present appeal is required to

be dismissed.

5.7 It is further submitted by the learned Advocate appearing on behalf of the

respondent herein - original plaintiff that even otherwise and with a view to put

an end to the litigation the plaintiff  is  ready and willing to  pay some more

amount than what is required to be paid under the agreement to sell.

5.8 Making the above submissions, it is prayed to dismiss the present appeal.

6. In  reply,  learned  Advocate  appearing  on  behalf  of  the  appellants  –

original  defendants  has  submitted  that  if  the  impugned  judgment  and  order

passed  by  the  High  Court  is  set  aside  and  the  property/land  in  question  is

reverted back to the appellants -, the appellants are ready and willing to pay a

handsome amount to the plaintiff.

7. We have heard the learned counsel for the respective parties at length and

perused and considered the impugned common judgment and order passed by

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the High Court as well as the judgment and decree passed by the learned trial

Court.

7.1 At the outset, it is required to be noted that the original plaintiff instituted

the suit for specific performance of agreement to sell dated 7.5.1981 (Ex.A1).  It

is not in dispute that under the agreement to sell dated 7.5.1981, the sale deed

was to be executed within a period of four months from the date of execution of

agreement to sell i.e. 7.5.1981.  However, thereafter time was extended by a

further period of eight months i.e. up to 6.5.1982.  However, before any further

steps could be taken by the plaintiff and the original vendor, the suit property

was subjected to the acquisition by the State Government.  It was the plaintiff

who made a representation to the Assistant Collector and requested for deletion

of the property from the acquisition.  A similar representation was made by the

original vendor also.  It is required to be noted that in the representations both

the vendor and the vendee specifically stated that the land in question has been

sold  in  favour  of  the  plaintiff  and  that  he  is  in  possession.   Therefore,  the

original vendor as such admitted the execution of the agreement to sell dated

7.5.1981 as  well  as  handing over  the  possession of  the  suit  property to  the

plaintiff.   Therefore,  the  learned  trial  Court  as  such  rightly  believed  the

execution of the agreement to sell dated 7.5.1981 as well as handing over of

possession to the plaintiff.  The same is rightly confirmed by the High Court.

7.2 However, the trial Court dismissed the suit solely on the ground that the

suit for specific performance was barred by limitation applying Article 54 of the

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Limitation Act.  On the other hand, it was the specific case on behalf of the

plaintiff  that  in  the  facts  and  circumstances  of  the  case  Article  113  of  the

Limitation Act shall be applicable as the suit was filed within a period of three

years when the right to sue accrued.  According to the plaintiff, the right to sue

accrued when the plaintiff served a notice upon the defendants to execute the

sale deed and the defendants refused to execute the sale deed. At this stage, it is

required to be noted that under the agreement to sell it was for the vendor to

settle all the disputes in the property.  As the land in question was subjected to

the acquisition and thereafter the acquisition proceedings came to be quashed

and set aside at the instance of the plaintiff in the year 1984/1985 and thereafter

the plaintiff  served a legal notice upon the defendants on 20.01.1986 calling

upon the defendants to execute the sale deed  which came to be refused by reply

notice  dated  31.1.1986  and  thereafter  the  suit  for  specific  performance  was

preferred, as rightly observed by the High Court, Article 113 of the Limitation

Act would be applicable and not Article 54 of the Limitation Act as applied by

the learned trial Court. We are in complete agreement with the view taken by

the High Court  in applying Article 113 of  the Limitation Act.   As observed

hereinabove, the learned trial Court dismissed the suit solely on the ground that

the suit  is  barred  by limitation considering Article  54 of  the Limitation Act

though all other findings with respect to the execution of agreement to sell., the

plaintiff was put in possession etc. were held to be in favour of the plaintiff.     

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7.3 Therefore applying Article 113 of the Limitation Act to the facts of the

case on hand and the conduct of the plaintiff all throughout to protect not only

his  possession  but  to  protect  the  property  from acquisition  and that  he  was

always ready and willing to perform his part of the agreement to sell/contract,

the High Court has rightly decreed the suit for specific performance.  We are in

complete agreement with the view taken by the High Court.

7.4 However, at the same time, considering the fact that the agreement to sell

was executed in the year 1981 for a total sale consideration of Rs.59,200/- and

at  the  relevant  time  Rs.26,500/-  was  paid  as  an  earnest  money  and  all

throughout the plaintiff enjoyed the possession and thereafter by now about 40

years have passed  and as agreed by the plaintiff to pay some more amount to

the  defendants,  over  and  above  the  sale  consideration  as  mentioned  in  the

agreement to sell, which he has agreed to pay to put an end to the litigation and

to buy peace, while dismissing the present appeal, we direct that the plaintiff

shall  pay  a  total  sum  of  Rs.15,00,000/-  (Rupees  fifteen  lakhs  only)  to  the

defendants towards the full sale consideration, which shall be inclusive of the

balance amount of sale consideration to be paid to the defendants under the

agreement to sell, to be paid within a period of eight weeks from today.  On

payment of the aforesaid amount of Rs.15,00,000/- (Rupees fifteen lakhs only)

to the original defendants by the original plaintiff, immediately thereafter the

original  defendants  are  directed  to  execute  the  sale  deed  in  favour  of  the

plaintiff.

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8. With the aforesaid observations and directions, the present appeal stands

disposed of, however, no order as to costs.

……………………………….J. [ARUN MISHRA]

……………………………….J. [VINEET SARAN]

NEW DELHI; ……………………………..J. FEBRUARY 06, 2020 [M.R. SHAH]

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