Purshottam Sava vs Kunverji Devji and Others

Shah, C.J.—This is a, Plaintiff''s appeal arising out of a suit for specific performance of a contract of sale of a house for Rs. 325/- entered

into with him by Defendants Nos. 1 and 2, who are brOrs. , on 5-2-1943. Defendant No. 3 is the subsequent purchaser of the property from the

said Defendants under a sale deed dated 27-8-1944. The Plaintiffs case was that he had paid to Defendants Nos. 1 and 2 sums aggregating to Rs.

289-6-0 from time to time towards the price of the house and that he was also put in possession and continued in possession, but was later falsely

prosecuted by Defendant No. 3 for trespass and that it was only then that he came to know that ""Defendants Nos. 1 and 2 had wrongfully sold the

house to Defendant No. 3. He alleged that the sale deed in favour of Defendant No. 3 was not registered within six months of its execution and

was for that reason null and void, and created no right in favour of Defendant No. 3 against the Plaintiff.

Defendants Nos. 1 and 2 denied having agreed to sell the house to the Plaintiff or that the Plaintiff'' was put in possession and contended that the

suit was barred by limitation and by laches and waiver. Defendant No. 3 raised the same pleas and further contended that his sale deed was legal

and valid and that he was a purchaser for value without notice of the Plaintiff''s contract of sale.

The trial Judge found that the suit was barred by limitation and by laches and waiver, and therefore declined to grant performance. He also held

that Defendant No. 3 was a purchaser for value and without notice of the Plaintiff''s contract. The Assistant Judge on appeal held that Defendant

No. 3 was not a purchaser in good faith and without notice of the Plaintiff''s contract and that if the Plaintiff was entitled to a relief for specific

performance then no equities arose in favour of Defendant No. 3. However the learned Judge held that the suit was barred by limitation and was

also bad for delay and that the Plaintiff had waived or abandoned his rights and was therefore not entitled to specific performance.

The first contention urged by Mr. Shah for the Appellant is as regards limitation. The house is situated at Ghantila in the former Morvi State and

being of a tenure known as ''Sakarvari'', according to the rules of the Morvi State, sanction of the State for the sale was necessary and the State

would sanction the right to transfer and issue the necessary permission or certificate on payment of fees to the State, to be determined on a

valuation of the property according to certain rules. One of the terms of the Plaintiff''s contract of sale was that'' he was to pay to the Morvi State

the charges or fees for the ''Aghat Lekh'', which sum was to be deducted from the purchase price and the balance was to be given to the vendor.

According to Chaturbhai, the surveyor, the presence of both the vendor and the vendee was necessary at the time of issuing the ''Dakhlachithi''.

Defendant No. 1 appears to have applied to the authorities for a ''lekh'' of the house, but there was some hitch on account of his uncle Dahya

Sava. The Defendant made up with Dahya and later renewed the application for a ''lekh''. It also appears that there was some difference between

him and the Plaintiff in regard to the contract in the Plaintiff''s favour, and the Defendant therefore declined to sell the house to the Plaintiff and

applied to the authorities again on 23-3-1943, saying that his contract with the Plaintiff had been rescinded and that he had withdrawn the earlier

applications and as he now wished to sell the house to Talshi Kala, Defendant No. 3, he prayed that a ''lekh.'' should be issued. Ultimately the

authorities granted the permission on 23-11-1943. Defendant No. 3 tools a sale deed from Defendant No. 2 on the same date, but Defendant No.

1 repudiated the sale deed and raised a dispute.

Certain proceedings were thereupon taken and ultimately Defendants Nos. 1 and 2 on the one hand and Defendant No. 3 on the other arrived at a

settlement and a fresh sale deed was executed by the Defendants in favour of Defendant No. 3 for Rs. 400/- on 27-8-1944. It was presented for

registration on 27-2-1945, and was duly registered on 18-3-1945. The question as to the sale deed being defective, for want of registration within

time, is not now in dispute and the sale deed must be taken as a valid document. Defendant No. 3 was also put in possession, of the house from

the date of ti(sic) sale deed and it is now conceded that he has been in possession since then. The Plaintiff tried to obstruct Defendant No. 3''s

possession and was prosecuted, but the complaint was compounded on 18-8-1948, and the Plaintiff thereafter filed the present suit on 29-8-

1948.

On the question of limitation, under Article 113, Limitation Act limitation for specific performance of a contract of sale is five years, in

accordance with the law of the Morvi State, and the period begins to run from the date fixed for the performance, or, if no such date is fixed, when

the Plaintiff has notice that performance is refused. No date for the performance of the contract is fixed in the Plaintiff''s contract. The expression

''date fixed'' has been interpreted as meaning either the date fixed expressly or a date that can be fixed with reference to a future event which is

certain to happen. See - Venkatarama Ayyangar Vs. Thulasi Ammal, . However in - Sampat Kumar Singh Vs. G.R. Peters and Others, , it was

held that it must be a date clearly mentioned in the contract, whether the said contract be oral or in writing. The force of the word ""fixed"",

according to the learned Judges, impiies that it should be fixed definitely and should not be left to be gathered from surrounding circumstances of

the case.

This to happen then it is as good as a date fixed in the contract, and it has not to be gathered from the is no doubt so, but if the date can be fixed

with reference to an event which is certain surrounding circumstances. Anyway I prefer to follow the view taken in the above Madras Case. Now

no date is fixed in the contract, Ex. 3 and we have therefore to see whether the terms of the contract contemplate a date for the performance

thereof dependent on any future event which was certain to happen. One of the terms of the contract was that it was sold on a condition of

''Aghat'' meaning that the contract was to be performed on obtaining a ''lekh'' from the Morvi State. Both the lower Courts have taken the view

that by reason of the notice, Ex. 25, issued on 1-8-1943, stating that Kunverji Devji (Defendant No. 1) had applied for an ''Aghat lekh'' and

inviting objections to the grant of the ''lekh'' to be filed on or before 31-8-1943, 1-9-1943 must be taken as the date fixed for the performance of

the contract because on the expiry of that date the ''lekh'' was to be given by the State.

This view is clearly wrong firstly because the grant of the ''lekh'' was not going to follow necessarily from the issue of the notice, and it may well be

that the Morvi State might refuse to grant it, and secondly because the ''lekh'' may not be granted immediately on the expiry of the notice and the

authorities would take time to consider objections, if any, or even otherwise may take time in granting the ''lekh''. As it is, the ''lekh'' was ordered

to be granted and was granted on 23-11-1943. Therefore it is not correct to take 1-9-1943, as the date which can be fixed from a future event

that was certain to happen. As I stated, the granting, of the ''lekh'' was itself not an event which was certain to happen.

The learned Assistant Judge has also held that under the contract, Ex. 3, possession was to be delivered to the Plaintiff on tire same day and that

this amounted to an agreement to perform the contract and therefore the date of the contract was itself the date fixed, but this view is altogether

wrong, because the document also says that possession was to be taken over by the Plaintiff after paying Rs. 20/- to Dahya Sava for the mortgage

on the property. Therefore the right to- possession did not arise until the payment was made. The recital in the earlier part of the document that

possession was to be delivered on the same day is to be read in conjunction with the latter recital and the two read together evidently show that

possession was not to be delivered on the date of the contract itself.

Again, assuming that it was so, that does not amount to the performance of the contract which, latter was to take place by an execution of a

document of sale. Therefore on neither ground can it be said that the date fixed for the performance of the contract was 5-2-1943. The trial Judge,

on his part, has held in the alternative that 23-3-1943 was the date when the Defendants refused to perform the contract, and that limitation began

to run from that date. As stated earlier, Defendant No. 1 had applied to the Lekh Department of the Morvi State prior to 23-3-1943, praying for a

Lekh, and that was in respect of the contract of sale with the Plaintiff. However by his application, Exh. 26, dated 23-3-1943, he definitely stated

that he had rescinded the contract with the Plaintiff and he had agreed to sell the property to Talshi Kala Defendant No. 3.

It is possible that the Plaintiff''s contract was rescinded to his knowledge and probably with his, consent, but in the absence of any definite evidence

to prove that it was so, it will not be safe to rely upon the statement of Defendant No. 1, considering that he had been wavering in the matter of the

sale of this property; nor upon the recitals in Ex. 26 because it may well have been that Defendant No. 1 might have rescinded it ex parte and

without the Plaintiff''s knowledge, and may have decided to sell the property to Defendant No. 3. Therefore it will not be safe to conclude that

before making the application, Ex. 26, the- contract with the Plaintiff had been rescinded to- the Plaintiff''s knowledge, and that Defendant No. 1

should be taken as having refused the preformance of the contract on 23-3-1943.

The Plaintiff''s case is that Defendant No. 1 had at no time refused to perform the contract, and he seeks to support this position by saying that

Defendant No. 1 had taken from him sums from time to time right until 11-10-1948, about 18 days prior to the suit. Both the lower Courts have

held the accounts, Ex. 4, as thoroughly unreliable, and apart from the fact that this finding is conclusive, the finding is also correct. I have- looked

into the account book, Exh. 4, and have no hesitation in holding that the accounts are not at all reliable and the entries therein cannot imply that

Defendant No. 1 was all along willing to execute the sale deed in favour of the Plaintiff, and had not refused to perform the contract at any time. It

seems that realising that Defendant No. 3 had been actually in possession and enjoyment of the property since long the Plaintiff tried to create

some evidence by means of payments to Defendant No. 1.

The first of these, namely, of Rs. 20/- is itself dated Bhadarva Vad 1, Samvat 2004, corresponding to 19-8-1948, and the three payments are

subsequent thereto. There is a gap of nearly Ave and a half years between the earlier payment and these later payments, and this circumstance by

itself is significant to show the working of the Plaintiff''s mind. Even assuming that Defendant No. 1 did receive these later sums, that will not in itself

mean that he was agreeable to perform the contract and had not refused its performance at any curlier time. Defendants Nos. 1 and 2 had already

sold the property as far back as August 1944 and Defendant No. 3 had since then been in actual possession thereof, and there was no scope for

and no question of Defendant No. 1 being agreeable to perform the Plaintiff''s contract.

The events which took place after the filing of the application, Ex. 23, also indicate that Defendant No. 1 must nave refused to perform the

Plaintiff''s contract. By the terms of Ex. 3 the charges for the lekh were to be paid by the Plaintiff and they were to be deducted from the purchase

price. The Plaintiff is the revenue Patel of the village. He had purchased Anr. property of the Defendants which was adjoining to the plaint house,

and it is reasonable to suppose that he was aware of what was happening in the matter of the grant of the ''lekh''. At any rate, he was admittedly

aware of the notice Ex. 26, inviting objections to the grant of a ''lekh'' to Defendant No. 1. The notice was affixed on the property itself to the

Plaintiff''s knowledge, and it was also published in the state Gazette. As the revenue Patel of the village he must have been aware of the procedure;

at any rate, he was aware that if no objections were received, the ''lekh'' would be issued by the authorities.

The land was measured in his very presence. He has not paid the measurement charges which he would ordinarily have done if the measurement

was done in respect of his contract, ft is reasonable to infer from the Plaintiff''s conduct that he was aware that the application, as a sequel to which

the notice Ex. 26, was issued, was in respect of an agreement to sell the property to someone else and not to himself. His inaction in spite of the

fact that land was measured in his own presence and a ''lekh'' was to be issued on the expiry of the notice strongly indicates that he was aware that

Defendant No. 1 had refused to sell the land to him and had agreed to sell it to someone else. Had it been otherwise, or had he himself been

anxious to effect the purchase his conduct on coming to know of Ex. 28 would have been different; and he would have himself taken steps in the

matter of getting the ''lekh'' and the ''Dakhlachithi'' from the authorities.

The refusal to perform the contract may be gathered from the circumstances of the case and the notice thereof need not be actual, and the

circumstances of the present case unmistakably indicate that Defendant No. 1 had refused to perform the Plaintiff''s contract and the Plaintiff had

notice thereof; and considering that the Plaintiff was the revenue Patel of the village familiar with the procedure, they further indicate that he was

aware that the ''lekh'' was asked for by Defendant No. 1 in order to secure the ''Dakhlachithi'' for the sale of the house to Defendant No. 3.

Therefore the refusal was to the Plaintiff''s knowledge and at any rate time would begin to run from the date of the expiry of the notice, Ex. 26 and

as the suit has been brought more than live years thereafter, it is barred by limitation.

(9) Turning next to the question of delay, u/s 22, Specific Performance Act the jurisdiction to decree specific performance is discretionary and the

Court is not bound, to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and

reasonable and guided by judicial principles. Where delay not amounting to a bar or limitation is pleaded as a defence to a suit for specific

performance, the validity of that defence must be tried upon principle substantially equitable, and as observed in the Law of Specific Relief by Om

Prakash Aggarawalla at p. 488, It may be taken to be fairly settled that wherever the Plaintiff has not committed such delay as to cause prejudice

to the Defendant or wherever there has been no such delay as would amount to waiver or acquiescence by the Plaintiff, in respect of his right to

enforce specific performance, the Court will not refuse to grant a decree u/s 22 merely on the ground of laches or delay.

As held in - Kissen Gopal v. Kally Prosonno 33 Cal 633 (C), delay, which is short of the period prescribed by the Limitation Act and which is not

of such a character as to give rise to an inference of abandonment of right is no bar to a suit for specific performance, unless it is shown to have

prejudiced the Defendant and there - Lindsay Petroleum Company v. Hurd (1873) LR 5 PC 221 (D)was referred to. In - Osmond Beeby v.

Khitish Chandra. AIR 1915 Cal 13 (E) it was held that a defence of laches cannot prevail where a statutory period of limitation is prescribed, and

that acquiescene cannot be imputed where the Plaintiff was not aware of the facts.

In - Jadu Nath Gupta Vs. Chandra Bhusan Sur and Others, , it was held that the English doctrine of delay and laches showing negligence in

seeking relief in a Court of equity cannot be imported into the Indian Law in view of Article 113, Limitation Act. Except in mercantile and business

contracts, time is not of the essence of the contract, but it may be material for the purpose of consideration whether in the circumstances of a

particular case, specific performance should be granted. Though time may not be essential, delay even within the time prescribed by law will affect

the remedy. Absence of proof of Plaintiff''s readiness and earnestness to perform his portion of the contract will entitle the Court to exercise its

discretion u/s 22, Specific Relief Act, and refuse relief to the Plaintiff which otherwise he would be entitled to secure.

Mere delay is not a ground for refusing relief to the Plaintiff if there has been no change in the ''status quo'' since the contract; but where the

conduct of the Plaintiff is such that though it does not amount to abandonment but shows waiver or acquiescence especially when inaction on his

part induces the Defendant to change his position, the Plaintiff ought not to be allowed any relief. Similarly in - Dodla Rami Reddi and Others Vs.

Devireddi Pattabhirami Reddi, , it was held that mere delay itself is no ground for refusing relief, but when it raises the presumption of abandonment

of the Plaintiff''s claim or has caused hardship to the opposite party or something to his prejudice, the Court is entitled to exercise its discretion and

refuse the relief prayed for.

The Lahore High Court too has held in - Mohd. Wazir v. Jahangiri Mal AIR 1949 Lah 72 (H), that where a statute of limitation imposes a bar,

mere inaction by a claimant within the time allowed by the statute cannot be treated as evidence that ''he has waived or abandoned his rights, but

on the other hand where a claimant knows that a party against whom he has a claim is altering his position in the belief that the claimant has

abandoned or will not enforce his claim and even then the claimant does nothing, his inaction may bar his claim for specific performance even within

the period of limitation. Therefore the position is that while mere laches is not sufficient to disentitle the Plaintiff to the relief for specific performance

if either the delay has prejudiced the Defendant or the delay amounts to abandonment, or waiver or acquiescence by the Plaintiff in respect of his

right to enforce specific performance, the Court will refuse to grant the relief.

Now the Plaintiffs case, as stated in the plaint, is that Defendants Nos. 1 and 2 had promised to execute the sale deed by -applying to the

Morvi State for the lekh and by obtaining the certificate and that they have failed to execute it, but this plea has not been borne out by the

evidence. The Plaintiff was aware that Defendant No. 1 had applied for the ''lekh'' and that the said application was not in connection with

Plaintiff''s contract but was rattier in connection with a contract of sale to someone else. It is also wrong to contend that Defendant No. 1 had

taken sums from him in September and October 1948, and had then promised to execute the sale deed. So far as the Plaintiff himself is concerned,

he has never been earnest about his contract and has exhibited total inaction in the matter, In fact he has done nothing for nearly five years and a

half prior to the suit.

As I have shown, he was aware that Defendant No. 1 had agreed to sell the property to Defendant No. 3 and still he never asked Defendants

Nos. 1 and 2 to perform the contract and execute the sale deed. He did not pay the necessary charges for the ''lekh'' even while he was aware that

a ''lekh'' was going to he issued in the name of Defendant No. 1. The property was sold to Defendant No. 3 in August 1944, and since then the

said Defendant was in possession and enjoyment thereof. One of the rooms of the house had fallen and Defendant No. 3 had removed the

materials thereof and in the other room he was keeping his articles and he was otherwise using it. The Plaintiff had a house adjoining to the suit one

and Defendant No. 3''s possession and enjoyment were to the Plaintiff''s full knowledge. In spite of it all, the Plaintiff never made a demand for the

sale deed. It was nearly five years and a half after the contract that he started creating evidence in the shape of some debits and also trespassed on

the property but there were never attempts to resurrect the claim.

This great delay viewed in the light of the proceedings which had taken place in connection with the application Ex. 28 of which the Plaintiff was

aware and his total inaction thereafter can lead to only one conclusion namely that he had abandoned his rights. These circumstances as also the

fact of a safe deed having been passed to Defendant No. 3 at first by Defendant No. 2, and on that document being disputed by Defendant No. 1,

a fresh sale deed being passed by Defendants Nos. 1 and 2 to Defendant No. 3 as far back as August 1944, also prove the Plaintiff''s

acquiescence to the sale in favour of Defendant No. 3. Therefore this is not a case of mere delay but is a case of waiver or abandonment of his

rights by the Plaintiff and also of acquiescence, and the lower Courts have therefore correctly exercised their discretion in refusing to grant specific

performance.

The appeal fails and is dismissed with costs.