SYED ZAHEER VS. C.V.

SIDDAVEERAPPA DECIDED ON DEC 18 2009 REPORTED

IN ILR 2010 KAR 765, HON`BLE 1USTICES: K.L. MAN1UNATH AND B.V.
NAGARATHNA,

WHEN NO TIME IS FIXED UNDER CONTRACT AND SORROUNDING
CIRCUMSTANCES TO DECIDE CAUSE OF ACTION:-

Art icle 54 oI the Limitat ion Act speciIies two points oI t ime Irom which t ime
begins to run Ior the purpose oI comput ing the period oI three years limitat ion wit h
regard to Iiling suits Ior speciIic perIormance oI contract. One, is t he date Iixed Ior
the perIormance oI the contract and two, iI no such date Is Iixed then when the
plaint iII has notice oI the perIormance being reIused. Much reliance has been
placed on the decision oI the Apex Court in t he case oI Ahamed Saheb Abidulla
Mulla v. Bibijan reported in (2009) 5 SCC 462, by the counsel Ior the appellants to
contend that in the instant case, the suit Iiled Ior speciIic perIormance was beyond
the prescribed period oI limitat ion and thereIore, the suit Iiled by the respondent
herein was not maintainable by placing reliance on the second limb oI Article 54 oI
the limitat ion Act. While considering time Irom which period begins to run under
Art icle 54 oI the Limit at ion Act, the Apex Court in the aIoresaid decision held that
' Iixed' used in the said article in essence means having Iinal or crystallized Iorm or
not stopped to change or Iluctuation and the inevitable conclusion is that the
expression "date Iixed Ior the perIormance" is a crystallized not ion which is clear
Irom the Iact that the second part oI Art icle 54 states "t ime Irom which period
begins to run" which reIers to a case where no such date is Iixed. In other words,
the Apex Court held that when date is Iixed, it means that there is a deIinite date
Iixed Ior doing a part icular act and when there is no date Iixed then when the
plaint iII has notice that perIormance is reIused is also a deIinite point oI t ime when
the plaint iII not ices the reIusal and in that sense both the part iculars reIer to
deIinit e dates. The same has been relied upon to contend that in the instant case t he
legal notice was issued by the appellants in the year 1995 wit h regard to reIusal to
perIorm the contract, In as much as it was stated that the agreement was
unenIorceable on account oI non-alienat ion clause, but the suit has been Iiled only
in the year 1999. The Iacts oI the present case have to be considered in the light oI
the decision oI the Apex Court. It is seen that the land grant which Is the subject
matter oI the agreement in quest ion was made in the year 1983 and there was a
IiIteen year period oI non-alienat ion 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 ItselI legal
notice was sent to the respondent stating that on account oI the non-alienat ion
clause, the contract could not be perIormed by the appellants on account oI
permission not been obtained Irom the concerned authorit y by them. At that point oI
time there were st ill three more years Ior the non-alienat ion period to come to an
end and thereIore, it was premature on the part oI the appellants to contend that in
the year 1995 itselI that on account oI the non-alienat ion clause the contract could
not be perIormed on account oI permission not being obtained. However, a
declarat ion wit h regard to unenIorceability oI the contract was sought by the
appellants by Iiling a suit in the year 1995 it selI. But, what has to be noticed is the
Iact that on account oI the non-alienat ion clause it was speciIically ment ioned in
the contract that the sale deed would be registered only aIter coming to an end oI
the non-alienat ion period, which would have been in the year 1998. ThereIore, unt il
the non-alienat ion period came to an end the respondent also could not have asked
Ior perIormance oI the contract by t he appellants. Only aIter the end oI the non-
alienat ion period i.e., in the year 1998 the cause oI act ion to seek speciIic
perIormance oI the contract arose Ior 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 oI Ganapathy (Padala) Suryakumari v. Dr. Erra Reddy and Anr. reported in
AIR 2007 AP 118 has been cit ed to contend that iI a part y is added subsequent ly as
a plaint iII or a deIendant in the suit as Iar as that part y is concerned, the date oI
inst itut ion oI suit would be reckoned as the date on which the order allowing t he
impleadment is passed by the court and that in the instant case, 5
t h
appellant was
arrayed as IiIt h deIendant by t he respondent herein aIter the inst itut ion oI the suit
and that the suit was barred by limitat ion as against her. However, the said posit ion
oI law is not correct in view oI proviso to Sect ion 21 oI the Limitat ion Act which
has been interpreted by the Supreme Court in the case oI Munshi Ram v. Narsi Ram
and Anr., AIR 1983 SC 271, wherein it has been held t hat iI the court is sat isIied
with t he omission to include a new plaint iII or a deIendant was due to a mistake or
the mistake was made in good Iait h it may direct that the suit as regards such
plaint iII or deIendant should be deemed to have been inst ituted on any earlier date.
The said proviso is inserted to take care oI the case oI omission to implead a person
due to to be a bonaIide mistake which should not deprive the plaint iII oI his rights
against the person iI the court is sat isIied in that behalI.



PERMISSION OF AUTHORITIES IS NO BAR TO SPECIFIC
PERFORMANCE DECREE:-

In this context it would be oI relevance to reIer to a decision oI the Apex Court in
the case oI Ranjibhai v. Narotham Das reported in AIR 1986 SC 1912. In the said
case there was an agreement Ior sale oI Ilat which had to be Iinalized aIter
obtaining permission oI authorit ies to use as village site was a pre-condit ion Ior the
execut ion oI the sale deed. The suit Ior speciIic perIormance was Iiled wit hin three
years aIter obtaining permission, it was held to be not barred by limitat ion. The said
decision is applicable to the Iacts oI the present case also. Consequent ly, the other
decisions which have been cited by the learned Counsel Ior the appellants namely
ILR 1992 Karnataka 429 and ILR 1992 Karnataka 644 are not applicable to the
Iacts oI the present case.


Gahesa Naicken v. Arumugha Naicken AIR 1954 Mad 811 has been cit ed to
contend that where the darkhast grant was in the nature oI a giIt by the Government
with a speciIic provision that the propert y shall not be alienated wit hout the consent
oI the Tahsildar, any contract which has the eIIect oI circumvent ing this policy oI
the Government would be opposed to public policy and the agreement to sell t he
property would be void. The said decision is not applicable to the Iacts oI the
present case since the sale agreement had to be executed by t he appellants aIter the
period oI non-alienat ion and it is only on the lapse oI the said period that the
respondent Iiled the suit Ior speciIic perIormance. 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 behalI oI the appellant to contend that where permission oI the collector is
a condit ion precedent Ior alienat ion under the Act and the plaint iIIs sought beIore
the Civil Court speciIic perIormance oI the agreement to sell and iI the said suit is
decreed, it would deIeat the pre-condit ion oI obtaining permission which would be
in contravent ion oI the grant or law regarding alienat ion oI such grant and Sect ion
23 oI the Contract Act and would be a bar to such a suit. However, another Division
Bench oI this Court in the case oI Yogambika v. Narsingh, ILR 1992 Kar 717 has
held that even in the presence oI a period oI non-alienat ion clause Ior ten years in a
document oI allot ment is not a bar to decree a suit Ior speciIic perIormance as the
object oI the law is to enIorce contract which is applicable to the Iacts oI the
present case.


In the case oI Nirmala Anand v. Advent Corporation Put Ltd. and Ors., AIR 2002
SC 2290 it has been held that when the construction company reIused construct ion
on the ground that the original lease oI plot was terminated by the municipalit y and
the Iacts showed that there was a possibilit y oI renewal oI lease and revalidat ion oI
building plan and the purchaser was ready to perIorm her part oI the contract, then
speciIic perIormance cannot be reIused. The said decision is applicable to the Iacts
oI the present case.


In the case oI Andanur Rajashekar v. Vasavi Industrial Enterprises and Ors. AIR
2007 Kar 497 this Court considered Sect ion 80 oI the Karnataka Land ReIorms Act
in the context oI Sect ion 23 oI the Contract Act and Sect ion 20 oI the SpeciIic
RelieI Act and held that what is prohibit ed under Sect ion 80 is a non-agriculturist
purchasing agricultural land and iI a permission can be obtained Irom the statutory
authorit y, then proviso to Section 80 would not be a bar. It was also stated that
Sect ion 80 did not bar an agreement to sell agricultural land to a non-agricult urist,
but what is prohibited is a sale. The said decision is in Iact applicable to the Iacts oI
the present case as no sale has taken place in contravent ion oI the terms oI the grant
in the instant case and t he agreement oI sale speciIically ment ions that the sale deed
would be executed aIter the period oI non-alienat ion is completed. ThereIore, the
agreement in quest ion cannot be held to be null and void or hit by Sect ion 23 oI the
contract. To the same eIIect is the decision in another decision oI this Court in the
case oI Ningappa Durgappa v. Hanumantappa Balappa and Anr. L.1. 1982(1) 419.
In Iact even in the case oI Manasa Housing Co-operative Societ y Ltd. v.
Marikellaiah and Ors. AIR 2006 Kant 273 it has been held that the mere Iiling oI a
suit Ior speciIic perIormance oI contract Ior grant oI a decree in the same would not
amount to violat ion oI Sect ion 80 oI the Karnataka Land ReIorms Act and that the
said Sect ion will not create any bar in the Civil Court to decide whether the
plaint iII would be ent it led to a decree Ior speciIic perIormance or not.



In the case oI Balu Babu Rao v. Shaik Akbar, AIR 2001 Bombay 364 in t he context
oI Sect ion 43 oI the Bombay Tenancy and Agricultural Lands Act and Sect ion 20 oI
the SpeciIic RelieI Act it has been held that when the suit property was not
transIerable, wit hout prior permission oI the collector a decree oI speciIic
perIormance granted subject to sanct ion oI 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 inIerred Irom evidence led by the parties
and iI there is no delay on the part oI the plaint iII, equitable relieI cannot be
denied.



DISCRETIONARY RELIEF OF SPECIFIC PERFORMANCE EXPLAINED:-

Sect ion 20 oI the Act states that the jurisdict ion to decree speciIic perIormance is
discret ionary. It says that the Court is not bound to grant such relieI merely because
it is lawIul to do so. Such a discret ion, however, is not to be exercised arbitrarily,
but must be based on sound and reasonable judicial principles. The Sect ion also
speciIies the circumstances in which the Court may properly exercise the discret ion
not to decree speciIic perIormance and it also speciIies when, in an appropriate
case, a decree could be given by proper exercise oI discret ion.

Sect ion 20 is not an exhaust ive provision, but merely illustrative as it is not
possible to deIine the circumstances in which equitable relieI could or could not be
granted. II, thereIore, on a considerat ion oI all the circumstances oI the case, the
Court thinks that it will be inequit able to grant the relieI asked Ior, it should not
give the relieI. In this context, it is necessary to reIer to explanat ion to Section 10
oI the Act provides that, unless and unt il the contrary is proved, the Court shall
presume that the breach oI a contract to transIer immovable property cannot be
adequately relieved by compensat ion in money. But the said presumpt ion is a
rebuttable presumpt ion.

Sub-sect ion (2) oI Sect ion 20 speciIies certain circumstances when discret ion may
be exercised not to decree speciIic perIormance. These circumstances are
illustrative and they can be deIined as Iollows:
(i) when the terms oI the contract or the conduct oI the parties at the time oI
entering into contract or the circumstances under which t he contract was entered
into are such that they give the plaint iII an unIair advantage over the deIendant.

(ii) where the perIormance oI the contract would involve some hardship to the
deIendant whereas, its non-perIormance would involve no such hardship on the
plaint iII.

(iii) that it makes it inequit able to enIorce speciIic perIormance.


While explaining these circumstances,
Explanat ion-I speaks about unIair disadvant age.
Explanat ion-II relates to hardship which is a circumstance in Iavour oI the
deIendant, while Explanat ions-Ill and IV are in Iavour oI the plaint iII when in a
case where the plaint iII has done substantial acts in consequence oI a contract
capable oI speciIic perIormance or reIused speciIic perIormance, merely because
the contract is not enIorceable at the instance oI the deIendant.


The decision oI the Supreme Court in the case Parakunnan Veet ill Joseph' s Son
Mathew v. Nedumbara Kuruvila' s Son and Ors., AIR 1987 SC 2328 is relied upon
by t he respondent to contend that it is the duty oI the Court to see that lit igat ion is
not used as an instrument oI oppression to have an unIair advantage to the plaint iII.
In the said decision, the Hon' ble Supreme Court, while considering Sect ion 20 oI
the SpeciIic RelieI Act, stated that Section 20 preserves judicial discret ion to
Courts as to decreeing speciIic perIormance. The Court should met iculously
consider all Iacts and circumstances oI the case and the Court is not bound to grant
speciIic perIormance merely because it is lawIul to do so. The mot ive behind the
lit igat ion should also enter into the judicial verdict.


In 1999(3) Kar.L.1. 677 (Y.N. Gopala RAO v. D.R. Laxminarayana and Ors.) it has
been held by this Court that the presumpt ion in a suit Ior speciIic perIormance is
that a breach oI contract cannot be adequately relieved by compensat ion in money
and that contract can be sat isIied only by conveyance oI particular estate contracted
Ior sale and the said presumpt ion is rebuttable, and the burden oI rebutting is on the
party opposing enIorcement oI contract and where such part y has Iailed to rebut
presumpt ion, suit Ior speciIic perIormance is to be decreed against such part y. This
principle is also stated in Explanat ion (i) to Sub-sect ion (b) oI Sect ion 10 oI the
SpeciIic RelieI Act.

While advert ing to Section 20 oI the Act, it is stated in this decision that rise in
price is no ground to reIuse speciIic perIormance and the reIusal may also have
tendency to cause hardship in the plaint iII in acquiring such property or other
property at such t ime.

In AIR 2004 SC 909 (M.S. Madhusoodhanan and Anr. v. Kerala Kaumudi Pvt. Ltd. and Ors.) it
is observed that the guidelines Ior the exercise oI the Court's discretion to decree speciIic
perIormance oI an agreement have been statutorily laid down in Sub-section (2) oI Section 20 oI
the Act and that, in Explanation 1 to Section 20, it is stated that mere inadequacy oI
consideration, or the mere Iact that the contract is onerous to the deIendant or improvident in its
nature shall not be deemed to constitute an unIair advantage within the meaning oI Clause (a) or
hardship within the meaning oI Clause (b).


ILR 1992 Kar 717 (Yogambika v. Narsingh) is relied upon by the respondent to
contend that the mere Iact that a person is a retired Government servant cannot at
all be considered to be a valid ground to reIuse to enIorce the contract he had
voluntarily agreed to and that, under Section 20 oI the Act, the grounds which
enable the Court to reIuse to grant a decree must be such which were not in the
contemplat ion oI the part ies when they entered into an agreement oI sale and also
that the deIendant had no control over those grounds and as a result oI those
grounds, it has become impossible Ior him to get on without the property agreed to
be sold.




1he llmlLaLlon prescrlbed for a sulL for speclflc performance of a conLracL as per ArLlcle 34 of Lhe
Schedule Lo Lhe LlmlLaLlon AcL 1963 ls Lhree years 1he Llme from whlch Lhe perlod beglns Lo run ls Lhe
daLe flxed for Lhe performance or lf no such daLe ls flxed when Lhe plalnLlff has noLlce LhaL Lhe
performance ls refused Pence you need Lo prove Lhls facLual aspecL flrsL

See Lhe followlng reporLed [udgmenLs

1) 2007 (4) Al8(8CM) 113

2) 2006 (6) SC! 234

3) 2006 (3) SC! 39

4) 2006 (3) SC! 338

3) 2006 (2) SC! 239

6) 2006 Al8(SC) 40 2003 Al8(SCW) 3447 2003 (8) Scale 387 2003 (9) !1 149 2003 (7) Supreme 361
2003 (8) SC! 307