SPECIFIC PERFORMANCE - LIMITATION ACT - LAND REFORMS ACT - EXPLAINED BY JUSTICE K.L.MANJUNATH AND JUSTICE B.V.NAGARATHNA
SYED ZAHEER VS. C.V. SIDDAVEERAPPA DECIDED ON DEC 18 2009 REPORTED IN ILR 2010 KAR 765, HON’BLE JUSTICES: K.L. MANJUNATH AND B.V. NAGARATHNA,
WHEN NO TIME IS FIXED UNDER CONTRACT AND SORROUNDING CIRCUMSTANCES TO DECIDE CAUSE OF ACTION:-
Article 54 of the Limitation Act specifies two points of time from which time begins to run for the purpose of computing the period of three years limitation with regard to filing suits for specific performance of contract. One, is the date fixed for the performance of the contract and two, if no such date Is fixed then when the plaintiff has notice of the performance being refused. Much reliance has been placed on the decision of the Apex Court in the case of Ahamed Saheb Abidulla Mulla v. Bibijan reported in (2009) 5 SCC 462, by the counsel for the appellants to contend that in the instant case, the suit filed for specific performance was beyond the prescribed period of limitation and therefore, the suit filed by the respondent herein was not maintainable by placing reliance on the second limb of Article 54 of the limitation Act. While considering time from which period begins to run under Article 54 of the Limitation Act, the Apex Court in the aforesaid decision held that 'fixed' used in the said article in essence means having final or crystallized form or not stopped to change or fluctuation and the inevitable conclusion is that the expression "date fixed for the performance" is a crystallized notion which is clear from the fact that the second part of Article 54 states "time from which period begins to run" which refers to a case where no such date is fixed. In other words, the Apex Court held that when date is fixed, it means that there is a definite date fixed for doing a particular act and when there is no date fixed then when the plaintiff has notice that performance is refused is also a definite point of time when the plaintiff notices the refusal and in that sense both the particulars refer to definite dates. The same has been relied upon to contend that in the instant case the legal notice was issued by the appellants in the year 1995 with regard to refusal to perform the contract, In as much as it was stated that the agreement was unenforceable on account of non-alienation clause, but the suit has been filed only in the year 1999. The facts of the present case have to be considered in the light of the decision of the Apex Court. It is seen that the land grant which Is the subject matter of the agreement in question was made in the year 1983 and there was a fifteen year period of non-alienation which would have come to an end only In the year 1998. However, three years prior to that date i.e., in the year 1995 Itself legal notice was sent to the respondent stating that on account of the non-alienation clause, the contract could not be performed by the appellants on account of permission not been obtained from the concerned authority by them. At that point of time there were still three more years for the non-alienation period to come to an end and therefore, it was premature on the part of the appellants to contend that in the year 1995 itself that on account of the non-alienation clause the contract could not be performed on account of permission not being obtained. However, a declaration with regard to unenforceability of the contract was sought by the appellants by filing a suit in the year 1995 itself. But, what has to be noticed is the fact that on account of the non-alienation clause it was specifically mentioned in the contract that the sale deed would be registered only after coming to an end of the non-alienation period, which would have been in the year 1998. Therefore, until the non-alienation period came to an end the respondent also could not have asked for performance of the contract by the appellants. Only after the end of the non-alienation period i.e., in the year 1998 the cause of action to seek specific performance of the contract arose for the respondent.
WHEN A PARTY IS IMPLEADED : DATE OF IMPLEADING HIM AS PARTY DATES BACK TO FILING OF SUIT IF COURT IS SATISFIED IN THAT BEHALF:-
The case of Ganapathy (Padala) Suryakumari v. Dr. Erra Reddy and Anr. reported in AIR 2007 AP 118 has been cited to contend that if a party is added subsequently as a plaintiff or a defendant in the suit as far as that party is concerned, the date of institution of suit would be reckoned as the date on which the order allowing the impleadment is passed by the court and that in the instant case, 5thappellant was arrayed as fifth defendant by the respondent herein after the institution of the suit and that the suit was barred by limitation as against her. However, the said position of law is not correct in view of proviso to Section 21 of the Limitation Act which has been interpreted by the Supreme Court in the case of Munshi Ram v. Narsi Ram and Anr., AIR 1983 SC 271, wherein it has been held that if the court is satisfied with the omission to include a new plaintiff or a defendant was due to a mistake or the mistake was made in good faith it may direct that the suit as regards such plaintiff or defendant should be deemed to have been instituted on any earlier date. The said proviso is inserted to take care of the case of omission to implead a person due to to be a bonafide mistake which should not deprive the plaintiff of his rights against the person if the court is satisfied in that behalf.
PERMISSION OF AUTHORITIES IS NO BAR TO SPECIFIC PERFORMANCE DECREE:-
In this context it would be of relevance to refer to a decision of the Apex Court in the case of Ranjibhai v. Narotham Das reported in AIR 1986 SC 1912. In the said case there was an agreement for sale of flat which had to be finalized after obtaining permission of authorities to use as village site was a pre-condition for the execution of the sale deed. The suit for specific performance was filed within three years after obtaining permission, it was held to be not barred by limitation. The said decision is applicable to the facts of the present case also. Consequently, the other decisions which have been cited by the learned Counsel for the appellants namely ILR 1992 Karnataka 429 and ILR 1992 Karnataka 644 are not applicable to the facts of the present case.
Gahesa Naicken v. Arumugha Naicken AIR 1954 Mad 811 has been cited to contend that where the darkhast grant was in the nature of a gift by the Government with a specific provision that the property shall not be alienated without the consent of the Tahsildar, any contract which has the effect of circumventing this policy of the Government would be opposed to public policy and the agreement to sell the property would be void. The said decision is not applicable to the facts of the present case since the sale agreement had to be executed by the appellants after the period of non-alienation and it is only on the lapse of the said period that the respondent filed the suit for specific performance. Similarly, the decision in Ramachandraiah v. Nagappa Naidu, ILR 1995 Kar 570 is also not applicable.
Pujari Narasappa and Anr. v. Shaik Hazrat and Ors. AIR 1960 Mys 59 has been cited on behalf of the appellant to contend that where permission of the collector is a condition precedent for alienation under the Act and the plaintiffs sought before the Civil Court specific performance of the agreement to sell and if the said suit is decreed, it would defeat the pre-condition of obtaining permission which would be in contravention of the grant or law regarding alienation of such grant and Section 23 of the Contract Act and would be a bar to such a suit. However, another Division Bench of this Court in the case of Yogambika v. Narsingh, ILR 1992 Kar 717 has held that even in the presence of a period of non-alienation clause for ten years in a document of allotment is not a bar to decree a suit for specific performance as the object of the law is to enforce contract which is applicable to the facts of the present case.
In the case of Nirmala Anand v. Advent Corporation Put Ltd. and Ors., AIR 2002 SC 2290 it has been held that when the construction company refused construction on the ground that the original lease of plot was terminated by the municipality and the facts showed that there was a possibility of renewal of lease and revalidation of building plan and the purchaser was ready to perform her part of the contract, then specific performance cannot be refused. The said decision is applicable to the facts of the present case.
In the case of Andanur Rajashekar v. Vasavi Industrial Enterprises and Ors. AIR 2007 Kar 497 this Court considered Section 80 of the Karnataka Land Reforms Act in the context of Section 23 of the Contract Act and Section 20 of the Specific Relief Act and held that what is prohibited under Section 80 is a non-agriculturist purchasing agricultural land and if a permission can be obtained from the statutory authority, then proviso to Section 80 would not be a bar. It was also stated that Section 80 did not bar an agreement to sell agricultural land to a non-agriculturist, but what is prohibited is a sale. The said decision is in fact applicable to the facts of the present case as no sale has taken place in contravention of the terms of the grant in the instant case and the agreement of sale specifically mentions that the sale deed would be executed after the period of non-alienation is completed. Therefore, the agreement in question cannot be held to be null and void or hit by Section 23 of the contract. To the same effect is the decision in another decision of this Court in the case of Ningappa Durgappa v. Hanumantappa Balappa and Anr. L.J. 1982(1) 419. In fact even in the case of Manasa Housing Co-operative Society Ltd. v. Marikellaiah and Ors. AIR 2006 Kant 273 it has been held that the mere filing of a suit for specific performance of contract for grant of a decree in the same would not amount to violation of Section 80 of the Karnataka Land Reforms Act and that the said Section will not create any bar in the Civil Court to decide whether the plaintiff would be entitled to a decree for specific performance or not.
In the case of Balu Babu Rao v. Shaik Akbar, AIR 2001 Bombay 364 in the context of Section 43 of the Bombay Tenancy and Agricultural Lands Act and Section 20 of the Specific Relief Act it has been held that when the suit property was not transferable, without prior permission of the collector a decree of specific performance granted subject to sanction of collector cannot be held to be improper.
READINESS AND WILLINGNESS INFERRED FROM EVIDENCE:- In Manzoor Ahmed Magray v. Gulam Hassan Aram and Ors., AIR 2000 SC 191 it is held that readiness and willingness can be inferred from evidence led by the parties and if there is no delay on the part of the plaintiff, equitable relief cannot be denied.
DISCRETIONARY RELIEF OF SPECIFIC PERFORMANCE EXPLAINED:-
Section 20 of the Act states that the jurisdiction to decree specific performance is discretionary. It says that the Court is not bound to grant such relief merely because it is lawful to do so. Such a discretion, however, is not to be exercised arbitrarily, but must be based on sound and reasonable judicial principles. The Section also specifies the circumstances in which the Court may properly exercise the discretion not to decree specific performance and it also specifies when, in an appropriate case, a decree could be given by proper exercise of discretion.
Section 20 is not an exhaustive provision, but merely illustrative as it is not possible to define the circumstances in which equitable relief could or could not be granted. If, therefore, on a consideration of all the circumstances of the case, the Court thinks that it will be inequitable to grant the relief asked for, it should not give the relief. In this context, it is necessary to refer to explanation to Section 10 of the Act provides that, unless and until the contrary is proved, the Court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money. But the said presumption is a rebuttable presumption.
Sub-section (2) of Section 20 specifies certain circumstances when discretion may be exercised not to decree specific performance. These circumstances are illustrative and they can be defined as follows:
(i) when the terms of the contract or the conduct of the parties at the time of entering into contract or the circumstances under which the contract was entered into are such that they give the plaintiff an unfair advantage over the defendant.
(ii) where the performance of the contract would involve some hardship to the defendant whereas, its non-performance would involve no such hardship on the plaintiff.
(iii) that it makes it inequitable to enforce specific performance.
While explaining these circumstances,
Explanation-I speaks about unfair disadvantage.
Explanation-II relates to hardship which is a circumstance in favour of the defendant, while Explanations-Ill and IV are in favour of the plaintiff when in a case where the plaintiff has done substantial acts in consequence of a contract capable of specific performance or refused specific performance, merely because the contract is not enforceable at the instance of the defendant.
The decision of the Supreme Court in the case Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son and Ors., AIR 1987 SC 2328 is relied upon by the respondent to contend that it is the duty of the Court to see that litigation is not used as an instrument of oppression to have an unfair advantage to the plaintiff. In the said decision, the Hon'ble Supreme Court, while considering Section 20 of the Specific Relief Act, stated that Section 20 preserves judicial discretion to Courts as to decreeing specific performance. The Court should meticulously consider all facts and circumstances of the case and the Court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict.
In 1999(3) Kar.L.J. 677 (Y.N. Gopala RAO v. D.R. Laxminarayana and Ors.) it has been held by this Court that the presumption in a suit for specific performance is that a breach of contract cannot be adequately relieved by compensation in money and that contract can be satisfied only by conveyance of particular estate contracted for sale and the said presumption is rebuttable, and the burden of rebutting is on the party opposing enforcement of contract and where such party has failed to rebut presumption, suit for specific performance is to be decreed against such party. This principle is also stated in Explanation (i) to Sub-section (b) of Section 10 of the Specific Relief Act.
While adverting to Section 20 of the Act, it is stated in this decision that rise in price is no ground to refuse specific performance and the refusal may also have tendency to cause hardship in the plaintiff in acquiring such property or other property at such time.
In AIR 2004 SC 909 (M.S. Madhusoodhanan and Anr. v. Kerala Kaumudi Pvt. Ltd. and Ors.) it is observed that the guidelines for the exercise of the Court's discretion to decree specific performance of an agreement have been statutorily laid down in Sub-section (2) of Section 20 of the Act and that, in Explanation 1 to Section 20, it is stated that mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature shall not be deemed to constitute an unfair advantage within the meaning of Clause (a) or hardship within the meaning of Clause (b).
ILR 1992 Kar 717 (Yogambika v. Narsingh) is relied upon by the respondent to contend that the mere fact that a person is a retired Government servant cannot at all be considered to be a valid ground to refuse to enforce the contract he had voluntarily agreed to and that, under Section 20 of the Act, the grounds which enable the Court to refuse to grant a decree must be such which were not in the contemplation of the parties when they entered into an agreement of sale and also that the defendant had no control over those grounds and as a result of those grounds, it has become impossible for him to get on without the property agreed to be sold.