Duraikannu Naicker vs K. Ramachandra Iyer

R.S. Ramanathan, J.—The unsuccessful Defendant is the Appellant.

The Respondent/Plaintiff filed the suit for specific performance of the agreement of sale dated 1.4.1994. The case of the Respondent was that

the Appellant/Defendant is the owner of 72 cents in Survey No. 180/1, 66 cents in Survey No. 181/2C, Perungalathur Village, Tambaram Taluk

and he agreed to sell both the extent of properties at the rate of Rs. 7500/- per cent and received an advance of Rs. 3,00,000/- and the properties

were also delivered to the Respondent for developing the same as house site and six months time was provided for completing the sale transaction.

The Appellant/Defendant handed over title deeds in respect of 66 cents and also executed the sale deed in respect of 66 cents and failed to deliver

the documents in respect of 72 cents of land. The Appellant/Defendant was also evading to execute the sale deed in respect of 72 cents of

property and also failed to give the documents of title. Thereafter, the Appellant/Defendant sold 15 cents out of 72 cents in favour of the

Respondent''s son and also received Rs. 3,05,000/- on different dates. As the Appellant failed to execute the sale deed in respect of 57 cents of

property in Survey No. 180/1 after receiving the balance sale consideration of Rs. 4,30,000/-, the suit was filed for specific performance in respect

of 57 cents of property in Survey No. 180/1.

The Appellant contested the suit admitting the execution of the agreement of sale in favour of the Respondent. The Appellant further contended

that the Respondent/Plaintiff did not have the means to pay the sale consideration for the entire extent of property and he also agreed to pay the

cost of the motor pumpset and the construction made thereon and even in respect of 15 cents of property in Survey No. 180/1 sold in favour of

the son of the Respondent, he did not make any payment and even in respect of the sale deed effected for 66 cents of property, he did not make

the full payment and therefore, he executed the letter acknowledging his liability to pay the balance sale consideration in respect of the properties

already sold by the Appellant by acknowledgment letter dated10.10.1994 and the subsequent payments made on 22.8.1994,12.1.1995 and

16.3.1995 to the tune of Rs. 1,00,000/- on each occasion were only towards the amount payable under the acknowledgment letter dated

10.10.1994 and thereafter, he did not evince any interest as the Respondent/Plaintiff did not have means to pay and therefore, the suit was also

barred by time and the Respondent was also not ready and willing to perform his part of the contract and therefore, the Respondent is not entitled

to the relief prayed for.

Both the courts held that the suit is not barred by time and the Appellant admitted the agreement of sale and also received the sale consideration

even after the period fixed in the agreement of sale and the suit was filed within three years from the last date of payment and therefore, the

Respondent is entitled to enforce the agreement of sale and the receipt of part of sale consideration by the Appellant/Defendant even after the time

fixed in the agreement of sale expired would show that the parties never intended to have time as essence of contract and decreed the suit. Hence,

the second appeal.

The following are the substantial questions of law that arise for consideration in this second appeal:

Whether the lower appellate court was right in holding that the suit isn''t barred by limitation?

Whether the lower appellate court was right in holding that the Plaintiff has-been ready and willing to perform his part of the contract in the

absence of any explanation for the inaction between16.3.1995 to 6.2.1998?

Mr. R. Subramanian, Learned Counsel for the Appellant submitted that both the courts erred in decreeing the suit without properly appreciating

Sections 16 and 20 of the Specific Relief Act. According to him, admittedly, as per the agreement of sale, the sale has to be completed within six

months from the date of agreement of sale and even in respect of 66 cents of land conveyed by the Appellant in favour of the Respondent, he has

not paid the full consideration and in respect of 15 cents of land out of 72cents in Survey No. 180/1, the sale consideration was not paid and that

was admitted by the Respondent/Plaintiff by his letter dated 10.10.1994 which was marked as Ex. B4 and towards the liability payable as

admitted under Ex. B4, the subsequent payments were made as evidenced by Exs.A3 and A4and that would also prove that the Respondent did

not have means to pay the sale consideration as per the agreement of sale and hence, the conduct of the Respondent would prove that he was not

ready and willing to perform his part of the contract which was not properly appreciated by the courts below. The Learned Counsel Mr. R.

Subramanian further submitted that the suit is also barred by limitation and admittedly, the agreement of sale was dated 1.4.1994 and six months

time was given for completing the sale transaction and therefore, the suit ought to have been filed on or before 30.9.1997 after deducting the six

months period stated in the agreement but, the suit was filed only on 9.2.1998 and therefore, the suit was barred by limitation under Article 54 of

the Limitation Act. He further submitted that Exs.A3 and A4 will not extend the period of limitation unless there is evidence that along with the

payment, the parties agreed to extend the period for executing the sale deed and there is No. evidence adduced by the Respondent that the period

for executing the sale deed was extended along with Exs.A3 and A4 and therefore, mere payment by the Respondent/Plaintiff will not extend the

period of limitation as per Article 54 of the Limitation Act and he also relied upon the judgment reported in B.P. Samiappan (died) and Others Vs.

Arunthavaselvan and Others, in support of his contention.

On the other hand, Mr. V.Ramesh, Learned Counsel for the Respondent/Plaintiff submitted that both the courts have concurrently held that the

Plaintiff/Respondent was ready and willing to perform his part of the contract and the concurrent finding of fact cannot be disturbed in the second

appeal and the Plaintiff/Respondent also deposited the entire balance sale consideration while filing the plaint and that was also taken into

consideration by the courts below to arrive at the conclusion the Respondent/Plaintiff was having means to pay the balance sale consideration and

having regard to the payments made by the Respondent/Plaintiff towards sale consideration, it cannot be stated that the suit is barred by limitation

as the payment will extend the period of limitation. He further submitted that Ex. B4 was rightly not relied on by both the courts below and the

Respondent/Plaintiff also didn''t accept the contents of Ex. B4 and he only admitted the signature and therefore, Ex. B4 cannot be relied upon by

the Appellant to contend that No. consideration was passed while executing the sale deed in respect of 15 cents out of 72cents and it is contrary

to the recitals in the sale deed. He further contended that under Exs.A3 and A4, payments were made on various dates, there was No. reference

to Ex. B4and reference was made only to Ex. A1 dated 1.4.1994 and both the courts have rightly rejected Ex. B4 and held that the suit was not

barred by limitation and the Respondent also proved his readiness and willingness and decreed the suit.

Heard both sides. It is admitted that both the parties entered into the agreement of sale dated 1.4.1994 whereby the Appellant agreed to sell 66

cents of property in Survey No. 181/2C and 72 cents in Survey No. 180/1. Under the agreement of sale, six months time was fixed for completing

the sale transaction. It is also not in dispute that the in respect of 66 cents property, the Appellant executed the power under Ex. B5 authorizing the

Respondent to sell the property. The Appellant also did not claim any right in respect of 66 cents of property. It is also admitted that on

10.10.1994, the Appellant executed the sale deed in respect of 15 cents of property out of 72cents in Survey No. 180/1. Therefore, having regard

to the above admitted facts, we will have to see whether the suit filed by the Respondent/Plaintiff was barred by time and whether the Respondent

was ready and willing to perform his part of the contract.

As stated supra, six months time was given in Ex. A1to complete the sale transaction and admittedly, the Respondent/Plaintiff paid Rs.

3,00,000/- on the date of agreement and thereafter, paid Rs. 1,00,000/- each on22.8.1994, 12.1.1995 and 16.3.1995 and in addition to the

above amounts, he has already paid a sum of Rs. 5000/- as initial advance and therefore, out of the total consideration of Rs. 10,35,000/- in

respect of 66 cents and72 cents of property, the Respondent/Plaintiff had paid Rs. 6,05,000/= and he has to pay the balance amount ofRs.

4,30,000/- and on 10.10.1994 the Respondent obtained sale deed in the name of his son in respect of 15 cents out of 72 cents of property and

No. reason was stated by the Respondent for not having obtained the sale deed in respect of the remaining extent of property if he had the means

to pay the sale consideration for the remaining extent of property. Though under Ex. A3 dated 12.1.1995 and Ex. A4dated 16.3.1995, the

Respondent had paid a sum of Rs. 1,00,000/= on each occasion, there was No. explanation onthe part of the Respondent as to why he had not

asked theDefendant/Appellant to execute the sale deed in respect ofthe suit property.

It is settled law that in a suit for specific performance, the Plaintiff must show his readiness and willingness from the date of agreement till the

date of the sale or the filing of the suit and if the conduct of the Plaintiff shows that he was not having source to pay the sale consideration, then, the

Plaintiff is not entitled to decree of specific performance. In this case, there is No. evidence on the part of the Plaintiff for not getting the sale deed

from the Appellant in respect of 57 cents of property for nearly three years. The reason stated by the Learned Counsel for the Respondent that

both the parties were known to each other and Land Ceiling Laws were there preventing the sale of properties and that was the reason for the

delay, but, No. evidence was adduced to that effect during Trial. Therefore, the conduct of the Respondent in not demanding the execution of the

sale deed in respect of57 cents of property for more than three years, even after obtaining the sale deed in respect of 15 cents out of 72cents

would only lead to the presumption that he was not having the means to pay the balance sale consideration and that was also proved that he was

not ready to get the sale deed in respect of the suit property. These aspects weren''t properly appreciated by the courts below and the courts

below proceeded on the basis that under Article 54 of the Limitation Act, three years time was available to the parties to complete the sale

transaction and the suit was filed within three years from the date of Ex. A4 and the suit was filed in time and the Respondent also paid the balance

sale consideration along with the plaint and that would also prove the readiness and willingness on the part of the Respondent.

According to me, the approach of the courts below is not correct. The courts below, without properly appreciating various judgments of the

Supreme Court under Sections 16 and 20 of the Specific Relief Act, erred in holding that the Respondent/Plaintiff was ready and willing to perform

his part of the contract when there was no explanation on the part of the Respondent in not demanding the execution of the sale deed for nearly

three years after the last payment made under Ex. A4. Therefore, the second substantial question of law is answered in favour of the Appellant and

I hold that the Respondent was not ready and willing to perform his part of the contract.

Under Article 54 of the Limitation Act, the suit for specific performance has to be filed within three years from the date fixed for the

performance and if No. such date is fixed, from the date when the Plaintiff has notice that performance is refused. As stated supra, the agreement

of sale was dated 1.4.1994 and six months time was provided in the agreement of sale and therefore, after the expiry of six months viz.,

30.9.1994, within three years, the Plaintiff ought to have filed the suit for specific performance. Admittedly, the suit was filed on 9.2.1998.

Therefore, the suit is barred by limitation.

Further, it was contended by the Learned Counsel for the Respondent that under Exs.A3 and A4, payments were made on 12.1.1995 and

16.3.1995 and the same were accepted by the Appellant and therefore, the payments made underExs.A3 and A4 would extend the period of

limitation and therefore, the suit filed on 9.2.1998 is within the period of limitation.

The argument of the Learned Counsel for the Respondent cannot be accepted. Normally, the payment made will extend the period of limitation

only in respect of money transaction. Here, in a suit for specific performance, any payment made during the period of three years from the date of

agreement, will not extend the period of limitation and parties cannot claim that from the last date of payment, they are entitled to seek for

performance of the contract within a period of three years. The reason is that as per the third column to Section 54 of the Limitation Act, the

period of limitation commences from the date fixed for the performance or when the performance was refused. In an agreement of sale, when the

date was fixed, the time begins to run from the expiry of the date fixed for performance of the contract and it can be extended only by a written

agreement by the parties extending the period for performing the contract. Therefore, in the absence of any agreement or endorsement made by

the parties while making the payment that the period is also extended for performing the contract, me repayment will not extend the period of

limitation. This has been held by the Division Bench of this Court in (1994) 1MLJ 146 (cited supra).

In the above said case, the agreement of sale was entered on 12.4.1971 and one year time was prescribed for completing the sale. On

5.4.1972, an endorsement was made extending the period for completion of the transaction till5.5.1972. On 3.5.1972, another endorsement was

made extending the period unto 15.5.1972 and on 13.5.1972, a payment was made and the period was extended unto 13.8.1972and thereafter,

there was No. extension of time. Nevertheless, on 3.8.1972, a sum of Rs. 19,000/- was paid and the suit was filed on 4.12.1980. In the

circumstances, it was held by the Honorable Division Bench that the suit was barred by limitation as there was No. whisper in the plaint that the

parties either by express agreement or by implied agreement, extended the time for performance of the contract and the last extension of time for

performing the contract was 13.8.1972 and therefore, the suit was barred by limitation.

In the present case also, except the acknowledgment of payment furtherance to execution of the agreement of sale, nothing has been stated in

Exs.A3 ad A4that the parties agreed to extend the period for performing the contract. Hence, the subsequent payments made inExs.A3 and A4 in

the year 1995 will not extend the period of limitation as there was No. agreement between the parties that by such payments, the period for

performing the contract was also extended. Therefore, the suit filed on9.2.1998 after a period of three years from the date fixed for performance is

clearly barred by time and the payment made under Exs.A3 and A4 will not save the period of limitation. Therefore, the suit is also barred by

limitation. The first substantial question of law is also answered in favour the Appellant.

In the result, the judgment and decree of the courts below are set aside. The suit is dismissed. The second appeal is allowed. No. costs. The

connected miscellaneous petition is closed.