ORDER
E. Padmanabhan, J.
1. The second appeal has been preferred by the defendant in O.S. No. 253 of 1989 on the file of the Principal District Munsif, Pondichery being aggrieved by the judgment and decree of the Learned II Additional District Judge, Pondicherry made in A.S. No. 137 of 1990 dated 24.4.1992 in reversing the judgement and decree of the Principal District Munsif, Pondicherry dated 27.8.1990 made in O.S. No. 253 of 1989 and granting a decree for specific performance.
2. Heard Mrs. Chitra Sampath, learned counsel appearing for the appellant and Mr. G. Rajan, learned counsel appearing for the respondent. For convenience, the parties will be referred as arrayed before the trial court.
3. The plaintiff instituted the suit O.S. No. 258 of 1989 on the file of the Principal District Munsif, Pondicherry for specific performance of the agreement to sell. The plaintiff’s case is summarised here: The defendant, the owner of the suit property agreed to self the southern half of the suit property for a consideration of Rs. 41,250 after receiving Rs. 3000, as advance on 12.5.1977. The defendant executed an agreement to sell on 12.5.1977. The defendant also handed over possession of the suit property to the plaintiff on 12.5.1977. On 18.6.1980 the defendant executed another agreement for sale in respect of the entire suit property which is in possession of the plaintiff for a consideration of Rs. 10,000 and received a sum of Rs. 3500 towards advance. In terms of the said agreement, the defendant agreed to convey the suit property in favour of the plaintiff within six months after handing over the original title deeds and nil encumbrance certificate. The plaintiff was always ready and willing to perform his part of the contract and was ready to pay the balance sum of Rs. 5500, which the defendant was evading. After causing notice, the present suit has been instituted as the plaintiff came to know that the defendant is trying to sell the suit property in favour of a third party. On the said pleadings, the plaintiff has instituted the suit for specific performance by presenting the Plaint on 28.3.1989 and it was taken on file on 29.3.1989.
4. The defendant contested the suit claim by filing a detailed written statement. According to the defendant, he did not execute the agreement to sell the southern half of the suit property on 12.5.1977 as claimed. The plaintiff approached the defendant to lease out the suit property and obtained signature of the defendant by paying advance of Rs. 1,000 on a deed already prepared by the plaintiff. The plaintiff obtained the signature of the defendant representing that the document is only a lease deed. The plaintiff is not in possession and enjoyment of the suit property, but he was allowed to occupy 16″ x 25″ in the northern side of the suit property only as a lessee.
5. The defendant entered into an agreement to sell with the plaintiff to sell the entire property and a sale agreement was executed on 18.6.1980. In terms of the agreement, the plaintiff should pay the balance of sale consideration within six months, which the plaintiff failed and failed to complete the sale transaction. The plaintiff willfully failed and neglected to perform his part of the contract despite demands made by the defendant. Since the plaintiff did not come forward to perform his part of the contract, the defendant entered into a fresh sale agreement on 31.1.1989 with one Kumar Anusuya for a sale consideration of Rs. 15,000 after receiving advance of Rs. 5000. The defendant has also handed over possession of the suit property including the portion occupied by the plaintiff to the said Kumar Anusuya. The suit claim is barred by limitation. The plaintiff who is guilty of latches and who was never ready to perform his part of the contract, is not entitled to the relief of specific performance.
6. The trial court-framed the following three issues:-
(i)Whether the defendant agreed to sell half of the suit property to the plaintiff for a sum of Rs. 4250 and executed a sale agreement on 12.5.1977 after receiving a sum of Rs. 1000 as advance?
(ii)Whether the plaintiff is not entitled for the specific performance of the sale agreement, dated 18.6.1980 entered into with the defendant?
(iii)To what relief the plaintiff is entitled to?
7. The plaintiff marked Exs.A.1 to A.17, besides examining three witnesses. The defendant examined herself and two other witnesses. The trial court recorded findings specifically. The findings are: (i) that the plaintiff was never ready and willing to perform his part of the contract, (ii) that the plaintiff was always unprepared and unwilling to perform his part of the contract, (iii) that the suit claim is barred by limitation, (iv) that the plaintiff has not proved that he was ready and willing to perform his part of the contract within six months from the date of Ex. A.2, Sale agreement and (v) the suit filed after nearly 9 years from the date of Ex.A.2, agreement is barred by limitation. In the light of the said findings, the trial court dismissed the suit holding that the plaintiff is not entitled to the relief of specific performance on the facts of the case.
8. Being aggrieved by the dismissal of the suit, the plaintiff preferred A.S. No. 137 of 1990 on the file of the Additional District Judge, Pondicherry. The first appellate court framed the following two points for its consideration:-
(i)Whether the appellant is entitled to specific performance of the agreement?
(ii)Whether the respondent is liable to execute the sale?
9. On the first point, the first appellate court concluded that the plaintiff is entitled to the relief of specific performance subject to his paying the balance of sale consideration with interest at 10% from the expiry of six months from 18.6.1980, the date of Ex.A.2 agreement. In that view, the appellate court allowed the appeal, set aside the judgment and decree of the trial court and decreed the suit as prayed for, The first appellate court granted two months time for the defendant to execute the sale deed after deposit of the balance of sale consideration with interest by the plaintiff. Being aggrieved, the defendant has preferred this second appeal.
10. P.S. Mishra, J., as he then was, framed the following question of law at the time of admission?
“Whether the court of appeal below has rightly reversed the finding of the trial court that the plaintiff-respondent was not ever ready and willing to perform his part of the contract?”
11. The learned counsel for the appellant apart from arguing the said question of law contended that the suit claim is barred by limitation as it has been filed almost after nine years from the date fixed for performance of the contract, besides contending that time is essence of the contract and the period of limitation will have to be computed from the date stipulated in the agreement and not from 22.3.1989, the date of Ex.A.13 notice demanding performance. The learned counsel also contended that the plaintiff had failed to prove that he was ready and willing to perform his part of the contract throughout and the findings to the contra by the first appellate court is perverse, illegal and liable to be interfered.
12. Per contra, Mr. G. Rajan, learned counsel for the respondent contended that no interference is called for in this second appeal. Mr. G. Rajan also contended that the suit claim is well within time as per the law that was in force on the date of the agreement. It is also contended by Mr. G. Rajan, that the suit claim is not barred by limitation and that time is not the essence of the contract and at any rate the limitation has to be reckoned from the date on which the demand was made by the plaintiff on the defendant to complete the sale deed and it has been declined. Mr. G. Rajan, also contended that the plaintiff has always been ready and willing to perform his part of the contract.
13. The counsel for both the parties submitted detailed arguments as the judgment of the first appellate court is totally unsatisfactory according to either side. The counsel on either side agreed that as to the alleged first sale agreement, it is not necessary to examine as to its truth and it is not necessary to refer to the payment of Tax as the possession of the plaintiff in the status of a tenant is not in controversy.
14. As the substantial questions of law have not been framed at the time of admission, the learned counsel for the appellant requested this court to frame additional substantial questions of law and decide the appeal on merits and according to law while taking the court through pleadings and evidence. The counsel for the defendant/appellant relied upon a recent pronouncement of the Supreme Court in Syndicate Bank v. Praba D Naik and Anr., and contended that the Limitation Act 1963 applies to the Union Territory of Pondicherry like any other Union Territories except State of Jammu & Kashmir, while pointing out that the limitation period being three years in terms of the Indian Limitation Act, 1963, the suit claim is barred by limitation and the reliance placed upon the French Civil Code in this respect is a misconception of law. Mr. G. Rajan, learned counsel for the respondent contended that the lower appellate court had rightly applied the French Civil Code and held that the suit claim is not barred by limitation and that no interference is called for.
15. Many questions of law arise for consideration in this second appeal as seen from the detailed arguments advanced by the counsel on either side. Though this court pointed out that this being a second appeal it is not proper for this court to reappreciate the evidence the counsel on either side jointly requested that this court may consider this appeal, as if deciding a first appeal as any remand at this stage will not be in the interest of both the parties. The following points arise for consideration:-
(i)Whether the suit claim is barred by limitation?
(ii)Whether the plaintiff was always ready and willing to perform his part of the contract?
(iii)Whether the plaintiff is entitled to equitable relief of specific performance on the facts of the case?
All the points could be considered together as evidence oral and documentary are just a handful.
16. Certain facts which are not in dispute has to be set out for appreciation of case of either parties and the points at issue, The plaintiff has merely prayed for a direction directing the defendant to execute the sale deed conveying the schedule mentioned property after receiving Rs. 5500. In the cause of action paragraph the plaintiff has set out thus:-
“The cause of action for the suit arose at Pondicherry within the jurisdiction of this Honourable Court on 12.5.1977 when the defendant has entered into an agreement of sale and handed over possession of the entire schedule mentioned property to the plaintiff in part performance of the contract of sale and on 18.6.1980 when the defendant has executed the second agreement for the entire suit property and till the date when the plaintiff is in possession and enjoyment of the same in pursuance of the agreement and on 22.3.1989 when the notice was issued and subsequently”.
17. According to the plaintiff the first agreement dated 12.5.1977 relates to one half of the property and the second agreement to sell entered on 18.6.1980 is in respect of the entire suit property. Since the plaintiff has prayed for relief in respect of the entire suit property, it has to be taken that the plaintiff seeks to enforce only the agreement dated 18.6.1980.
18. The plaint is dated 28th March, 1989 and the plaint was presented on 28.3.1989. As set out in the cause of action paragraph after 18.6.1980, the date on which the sale agreement came to be executed, only on 22.3.1989 the plaintiff caused a notice demanding specific performance. In other words, between 18.6.1980 and 22.3.1989 there is no material or document to establish that the parties have mutually agreed to extend the time for performance of the contract to sell entered on 18.6.1980 or kept the contract alive. After a lapse of Eight years and Ten months from 18.6.1980 the date of the agreement to sell the present plaint has been presented on 28.3.1989. On 22.3.1989, the plaintiff caused a notice through his counsel demanding performance of the contract.
19. This demand itself was after a lapse of Eight years and Nine months. There is nothing to show that between 18.6.1980 and 22.3.1989 or till the filing of the suit the sale agreement was kept alive by the plaintiff or the parties have extended the time for performance by mutual agreement or the plaintiff has at any point of time within the time stipulated in the agreement called upon the defendant to perform his part of the contract while stating that he is ready and willing to perform his part of the contract.
20. The plaint averment that the plaintiff has been put in possession of the entire scheduled mentioned property as part performance even from 12.5.1977 has been denied rightly as the plaintiff is a tenant already in possession. As per the sale agreement the defendant has to execute the sale deed in favour of the plaintiff within six months after handing over the original title deeds and also the nil encumbrance certificate. But having slept for nine years, it is too big a pill to swallow for the plaintiff and contend that Ex.A.2 agreement dated 18th June 1980 stipulates that within six months from 18.6.1980, the defendant who has to execute the deed of conveyance after receipt of the balance of sale consideration after deducting the advance sum of Rs. 4500 and paying the balance was never ready. The agreement further stipulates that in the event of the plaintiff failing to complete the sale transaction the advance paid shall be forfeited and in the event of the defendant not being ready, he has to refund double the advance amount. Admittedly after the said sale agreement on 18,6.1980 and till Ex.A.13 notice dated 22.3.1989, there has been no movement or action at all on the part of the plaintiff till a notice came to be issued after lapse of 8 years and 9 months.
21. The trial court rightly pointed out that for nine years the plaintiff had kept silent and there is no acceptable evidence at all in this respect to hold that the defendant had declined while the plaintiff was ready with money to perform his part. The trial court also recorded a finding that the plaintiff before and immediately after the expiry of six months from the date of Ex. A. 2 has not raised a little finger, nor he has chosen to plead that he was ready or called upon the defendant to perform his part of the contract immediately before or after six months stipulated in Ex.A.2.
22. In other words, it is clear from the conduct of the plaintiff that the plaintiff has not kept the contract alive for 9 years. No evidence has been placed on record by the plaintiff to prove that he was ready and willing to perform his part of the contract within the stipulated months or immediately after six months. No evidence is let in to show before expiry of six months or immediately after 6 months period from the date of Ex.A.2 or within a reasonable time from the date of expiry of Ex.A.2 the plaintiff has either made a demand or proved his readiness.
23. Per contra, the lower appellate court proceeded on the premise that it is for the defendant to produce the encumbrance certificate and original title deeds and till the demand is made under Ex.13, is no obligation is cast on the plaintiff to perform his part of the contract. Such an approach on the part of the first appellate court cannot be sustained at all. Being a party to the contract to purchase and sell, the plaintiff should keep the contract alive and at least till he seeks enforcement of the contract, which the plaintiff has miserably failed.
24. Assuming for the purpose of argument that the defendant has not produced the original document of title and encumbrance certificate, which is not an impossibility, there is no reason at all for the plaintiff to keep quiet for nearly Nine years and thereafter make a demand under Ex.A.13. The assumption on the part of the appellate court that for nine years and till a demand is made the contract is kept alive and the limitation to institute a suit commences only after a demand is made after 8 years 10 months and the limitation has to be reckoned from the date of demand viz., Ex.A.13, is legally unsustainable. If such a view is taken the purchaser could wait or keep silent or even more for Ten years to make a demand and thereafter it could be contended that the suit claim is not barred by limitation or the purchaser is entitled to seek for specific performance. On the facts the view taken by the first appellate court is unsustainable in law and it is a clear misconception of the legal position.
25. Though, it is a well settled principle that time is not the essence of the contract with respect to an agreement for specific performance, as has been held by the Apex Court in Purushottam Reddy and Anr. v. Pratap Steels Ltd., 2002 AIR SCW 417, yet, it has to be held that even if time is not essence of the contract, the court may infer that it has to be performed with in a reasonable time. In that context, it has been held thus:-
“8. For the purpose of deciding the question whether or not time was the essence of the contract the appellant before the High Court relied on K.S. Vidyanandam and Ors. v. Vairavan which is a two Judge Bench decision and a few other decided cases. On behalf of the plaintiff-respondent reliance was placed on Chandnee Widya Vatti Madden v. Dr. C.L. Katial and Ors., which is a three Judge Bench decision. The High Court noticed the facts of both these decisions, and having also dealt with the law laid down therein felt inclined to decide the case in the light of the law laid down in Chandnee Widya Vatt’s case because the decision in Chandnee Widya Vatt’s case was as stated by the High Court, “the earlier larger Bench judgment”. The attention of the High Court was not invited to a Constitution Bench decision in Chand Rani by LRs. v. Kamal Rani by Lrs, and therefore the law laid down by the Constitution Bench has escaped the attention of the High Court. The issue as to whether time is the essence of the contract in contracts for sale of immovable property came up for consideration of the Constitution Bench and it was held:-
“It is well settled principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This Principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of the contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.
Xxxxxxxxxx
“…..in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the
contract the Court may infer that it is to be performed in a reasonable time if the conditions are:
1. From the express terms of the contract;
2 from the nature of the property; and
3. from the surrounding circumstances, for example: the object of making the contract”.
26. Examining the plea, evidence oral and documentary evidence of the present appeal, even if time is not the essence of the contract, the court may infer that it has to be performed within a reasonable time. In the present case the learned counsel for the defendant strongly contended that time is the essence of the contract as a condition has been stipulated in Ex.A.2 sale agreement viz., the plaintiff has to forfeit the advance in case if there is a breach on his part and the defendant has to refund double the advance amount in case of his committing breach. However, this court is not persuaded to sustain the contention that the time is the essence of the contract in the light of the law laid down by the Apex Court in the recent reported decision.
27. One another aspect the learned counsel for the defendant highlighted is that the plaintiff has not acted within a reasonable time and Nine years and above is not a reasonable time at all for the plaintiff to awake from the deep sleep and demand for sale. In Vidyanandam v. Vairavan, , the Apex Court has laid down thus:-
“Even where time is not of the essence of the contract, the plaintiff must perform his part of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property.”
28. In Veerayee ‘Ammal v. Seeni Ammal, 2002 (1) SCC 136, while examining the word “reasonable” in the context of specific performance of sale agreement, the Apex Court held thus:-
13. The word “reasonable” has in law prima facie meaning of reasonable in regard to those circumstances of which the person concerned is called upon to act reasonably knows or ought to know as to what was reasonable. It may be unreasonable to give an exact definition of the word “reasonable”. The reason varies in its conclusion according to idiosyncrasy of the individual and the time and circumstances in which he thinks. The dictionary meaning of the “reasonable time” is to be so much time as is necessary, under the circumstances, to do conveniently what the contract or duty requires should be done in a particular case. In other words it means, as soon as circumstances permit. In P. Ramanatha Aiyar’s The Law Lexicon it is defined to mean:
“A reasonable time, looking at all the circumstances of the case; a reasonable time under ordinary circumstances; as soon as circumstances will permit; so much time as is necessary under the circumstances, conveniently to do what the contract requires should be done; some more protracted space than ‘directly’; such length of time as may fairly, and properly, and reasonably be allowed or required, having regard to the nature of the act or duty and to the attending circumstances; all these convey more or less the same idea.”
29. On the facts of the case by all standards, it cannot be said that the plaintiff has acted reasonably. Nine years and odd is not a reasonable time at all by all standards and the plaintiff has to blame himself in keeping quiet for nine years and thereafter issuing a notice. Further, there is nothing to show that the plaintiff has kept the contract alive for nine years except his assertion that he is in possession of the suit property. The possession of the plaintiff is not in terms of the agreement to sell, nor it is in part performance, but possession is that of a tenant, which commenced long prior to the sale agreement, the plea of part performance is untrue and false.
30. The first appellate court has committed serious illegality in proceeding as if that the defendant has failed to produce nil encumbrance certificate or original title deeds within six months and therefore the plaintiff could invoke Article 1676 of the French Code (Civil) and Article 1589 of the Code which prescribes for limitation.
31. Even whether there is mortgage or not, or the defendant has failed to discharge the mortgage or the defendant has failed to produce the nil encumbrance certificate with original title deeds, there is no justification for the plaintiff to keep quiet for nine long years. Nothing prevented the plaintiff from seeking for enforcement of the contract within a reasonable time from the date of Ex.A.2 agreement. Even assuming that there is a subsisting mortgage the plaintiff could always work out remedies within a reasonable time, yet, he need not wait for a decade and thereafter make a demand. The first appellate court had acted with illegality and proceeded as if the defendant has not performed his part of contract. Even assuming so, it is clear that the defendant has not performed his part of the contract the plaintiff, nor he could keep the contract alive for all time to come without any action and more so when there is nothing to show that there is a novation of contract or extension of the period or the plaintiff has kept the contract alive for nine years by some step or action.
32. The first appellate court proceeded as if the suit claim is not barred by limitation reckoned from Ex.A.13 notice. This view of the first appellate court is not legally sustainable. The provision relating to the specific performance is three years from the date on which the agreement came to be concluded or the date on which the performance was agreed to. In this case by all standards and on both counts the plaintiff has kept silent for nearly a decade and has come before the court. The appellate court’s view that limitation starts from the date on which demand has been made and on receipt of reply to Ex.A.13 notice is legally unsustainable.
33. The learned counsel for the appellant relied upon a recent pronouncement of the Apex Court in Syndicate Bank v. Prabha D.Naik and Anr., and contended that Limitation Act, 1963 is the general law of Limitation for whole of India and the provision regarding the remedy as provided in the Civil Code is deemed to be replaced by implication. The learned counsel relied upon the said pronouncement where the Apex Court held thus:-
“21. Needless to record that our concurrence to the observations of the High Court in regard to a special Law of Limitation is provided for enforcement of the rights arising under that Code itself, is by reason of the fact that Law of Limitation is a procedural law and the provisions existing on the date of the suit apply to it (reference may be made to the decision of this Court in C. Beepathuma v. Velasari Shankaranarayana Kadambolithaya).
22. Admittedly, the Limitation Act is a statute enacting the provisions in general terms applicable to the entire country excepting the exception as -mentioned in the statute itself. It is a later statute of the year 1963 only that Portuguese Civil Code assuming had its application in the State of Goa, Daman and Diu and an earlier statute thus stands altered, as the latter is expressed in affirmative language, more so by reason of specific application of the Negotiable Instruments Act and Indian Contract Act: It thus cannot but be said to be repealing by implication – “affirmative statute introductive of a new law do imply a negative” (Harcourt v. Fox).
23. As regards the doctrine of implied repeal, another aspect of the matter ought to be noticed vis-…-vis the Civil Code. The issue of limitation being a mixed issue of law and fact under the Limitation Act, the court in spite of plea not being raised by the defence, can go into the same suo motu but there is a specific bar under Article 515 of the Civil Code which records that the court cannot suo motu take cognizance of description (sic prescription) unless it is specifically pleaded by the parties. It is a bar to jurisdiction of court. The repugnancy and incongruity arise by reason of the fact that Parliament by law viz. the High Court at Bombay: (extension of jurisdiction to Goa, Daman and Diu) Act, 1981 extended the jurisdiction of the High Court of Judicature at Bombay to the Union Territory of Goa, Daman and Diu from the appointed day and the Court of Judicial Commissioner was abolished. Section 9 of the statute [(Act of 1981) (supra)l provides that there shall be, on and from the appointed day, established a permanent Bench of the High Court of Bombay at Panaji and some Judges of the High Court at Bombay being not less than two in number or as may be nominated by the Chief “Justice of the High Court from time to time shall sit at Panaji, in order to exercise the jurisdiction and power for the time being vested in the High Court in respect of cases arising in this Union Territory. The authority and jurisdiction of the High Court of Bombay, to take cognizance of an action being barred by limitation, thus stands negated – conceptually even a difficult situation to conceive that the same High Court will have two different spheres of jurisdiction while dealing with matters. At the cost of repetition we say that while implied repeal is not to be readily inferred but in the contextual facts, upon scrutiny, we cannot but hold that in the wake of the factum of the Limitation Act coming into existence from 1-1-1964, Article 535 of the Portuguese Civil Code cannot but be termed to be impliedly repealed and it is on this score that the decision of this Court in Justiniano case1 stands overruled. There is one general law of limitation for the entire country, being the Act of 1963, and the Portuguese civil taw cannot be termed to be a local law or a special law applicable to the State of Goa, Daman and Diu prescribing a different period of limitation within the meaning of Section 29(2) of the Limitation Act and in any event, question of saving of local law under the Limitation Act of 1963 does not and cannot arise. The submission that without there being a specific mention of repealing statute (since the 1963 Act of Limitation does not record express repeal of any other law excepting the Limitation Act of 1908), question of the Portuguese Civil Code being repealed does not arise, cannot hold good by reason of the doctrine of implied repeal as noticed above. In the premises aforesaid, these appeals fail and are dismissed without however any order as to costs.”
This pronouncement is against the plaintiff and the view of the first appellate Court is not sustainable in any view.
34. The question whether Ex.A.1 is true or not is not relevant at all as the plaintiff has not chosen to enforce Ex.A.1. It may not be necessary to examine whether Ex.A.1 is true or not and whether Ex.A.1 was signed or not as sought to be contended by the defendant. The attention of the first appellate court was drawn to the pronouncement of this court in Sriram Cotton Pressing Factor P. Ltd., v. Narayanaswamy Naidu, AIR 1965 Mad. 32. The first appellate court has failed to follow the dicta of this court as it is clear that the plaintiff has not kept the agreement alive and therefore the plaintiff is not entitled to specific performance of the contract.
35. In Sriram Cotton Pressing Factor P. Ltd., v. Narayanaswamy Naidu, AIR 1965 Mad 32, (Division Bench), it has been held thus:-
“6. It seems to us that there was palpable failure on the part of the plaintiff to carry out its part of the contract and having regard to the particular facts and circumstances proved, it should be held that the time was the essence of the contract and having regard to the particular facts and circumstances proved, it should be held that the time was the essence of the contract and, in view o the events which have happened, the granting of decree or specific performance would involve hardship and inequity on the defendant. The plaintiff entered into an agreement o purchase the suit lands on 26.1.1957. Though ordinarily a period of two months was fixed for performance of the contract, the time was extended from time to time till 15.7.1958, to enable the parties to get the area declared as an industrial area. In the month of December, 1957, the Government finally refused to approve the suggestion made by the Panchayat to declare the suit property as an industrial area. The time for performing the contract was not extended after 15.7.1958. The defendant, however, carried on correspondence subsequently with the concerned authorities for having the area declared as an industrial area. But the correspondence does not show that he was pursuing the matter on plaintiff’s behalf or for plaintiff’s benefit. The defendant’s evidence is that he wrote Exs.B.8 and B.9 on his own initiative. He might have written those letters fro grant of a license for installing a 100 HP motor for his own benefit and thereby enhancing the value of the property.
The plaintiff is unable to explain the reason for the failure to have the time extended after 15.7.1958. He kept quiet for a period of 9 months from that date and it was only on 22.4.1959 he gave notice to the defendant through his counsel calling upon the defendant to complete the sale transaction as per the terms of agreement of sale. P. W. 1 in his evidence unhesitatingly stated that the very basis of the purchase as that the defendant should get the suit site declared as an industrial area and that “the plaintiff was not prepared to purchase the property before 30.9.1958”. On the face of this evidence, it is reasonable to infer that the plaintiff has abandoned the contract on the Government finally refusing to declare the property as within an industrial area and has come to court for enforcement of the agreement which could not be performed on account of its own laches. While dealing with the question of laches, Fry in his “Specific Performance” 6th Edn, says at page 515, para 1102, that laches on the part of the plaintiff (whether vendor or purchaser) in executing his part of the contract or in applying to the court will debar him from relief. The learned Author refers in this connection to the observations of Lard Alvanley M.R., that
“A party cannot call upon a court of Equity for specific performance unless he has shown himself ready, desirous, prompt and eager”
and of Lard Cranworth that
“specific performance is relief which this court will not give, unless in cases where the parties seeking it come promptly, and as soon as the nature of the will permit.”
Similarly, the law us to when and under what circumstances delay is a bar to a legal remedy is very clearly laid down in Lindsay Petroleum Co., v. Hurd, 1874 (5) PC 221, thus at page 239.
“Now the doctrine of laches in courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that reedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapses of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to that remedy”.
7. Similarly a Bench of this court consisting of Rajamannar C.J., and Venkatarama Aiyar, J., held in Sankaralinga v. Ratnaswami, :
“Mere delay does not by itself preclude the plaintiff from obtaining specific performance if his suit is otherwise in time. The delay must be such that it may be properly inferred that the plaintiff has abandoned his right or on account of delay there must have been such a change of circumstances that the grant of specific performance would prejudice the defendant. It is also well settled that waiver is not to be inferred merely from delay in the institution of the suit”.
In the instant case, there was a delay of about nine months between the last extended time and the notice given by the plaintiff to the defendant calling upon the latter to execute a sale deed. There was no correspondence during this period between the plaintiff and the defendant with regard to extension of time for completion of the contract and there is nothing to show that anything was done by the plaintiff to keep alive the agreement of sale. In the above circumstances, the principles laid down in the above case would apply to the facts of this case and from the considerable delay and laches on the part of the plaintiff, we can easily infer that there was a waiver or abandonment of the contract.”
36. Concedingly the plaintiff has not offered to pay the balance of sale price within six months or closely following thereafter or within three years from the date of the agreement or the date fixed for performance, but he kept quiet for nine long years and made a demand and therefore it has to be held that the plaintiff has not only failed to keep the contract alive, but also failed to perform his part of the contract. After having kept quiet for nine long years, it is not open to the plaintiff to blame the defendant that the defendant has not performed his part of the contract. The first appellate. court proceeded on the question of limitation as if the limitation starts to run only from the time when the plaintiff issued a notice and the defendant has refused to perform or complete the sale. This view cannot be sustained and the lower appellate court has misread Article 54 of the Limitation Act. Article 54 of The Limitation Act reads thus:-
description of suits
Period of limitation
Time from which period begins to run
For specific performance of a contract
Three years
The date fixed for the performance, or, if no such date is fixed, when the plaintiff has noticed that performance is refused.
37. In this case the date has been fixed for performance, namely six months and assuming that three years has to be reckoned from the date of the agreement even then the suit instituted after nine years is barred by limitation. The construction placed on Article 54 by the Lower appellate court cannot be sustained in law.
38. The Pondicherry Limitation (Repeal of local laws) Act, 1994 is being relied upon by the counsel for the plaintiff to save the limitation period. Section 3 of the said Act provides that all local laws in force in the Union Territory of Pondicherry or any area thereof corresponding to the Limitation Act, 1963 shall stand repealed as from the date of coming into force of the Pondicherry Limitation (Repeal of Local Laws) Act, 1994. The said Repeal of Local Laws Act, 1994 received the assent of The President on 3.1.1995 and published in the Pondicherry Gazette 24.1.1995. Section 4 of The Pondicherry Limitation (Repeal of Local Laws) Act, 1994 provides that notwithstanding anything contained in the Repeal Act, any suit for which the period of limitation prescribed in the Limitation Act is shorter than the period of limitation prescribed by the local laws, such suit could be instituted within one year next after the commencement of the Pondicherry Limitation (Repeal of Local Laws) Act, 1994. The suit in the present case has been instituted during 1989 and therefore the reliance placed on The Pondicherry Limitation (Repeal of Local Laws) Act, 1994 is of no consequence.
39. On the facts of the case the trial court dismissed the suit and the appellate court on 24.4.1992 i.e., after a lapse of 12 years had granted a decree for specific performance subject to the condition that the plaintiff pays interest on the balance of sale consideration remained unpaid viz., Rs. 5500 at 10% from 18.6.1980 and till full payment. This direction in my considered view will work hardship on the defendant the position the defendant is being placed cannot be compensated by a decree directing payment of interest as compensation in this case. In such matters discretion has to be exercised reasonably and fairly and if hardship that may be caused to the defendant cannot be compensated at all, the court of Appeal will decline to grant the relief of equitable relief of specific performance. It is well settled law that while granting the relief of specific performance the court has to exercise its discretion and such discretion should not only be unreasonable, but also too inequitable for courts to make the purchaser the sole beneficiary or the escalation of the real estate price, when admittedly the market value of the property has increased several times.
40. In Sardar Singh v. Krishna Devi and Anr., , the Apex Court held that 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 and exercise of such discretion must not be arbitrary, but sound and reasonable.
41. In Nirmala Anand v. Advent Corporation, Pvt., Ltd., 2002 AIR SCW 2416, at page 2425 the Apex Court held thus:-
“12. In Sardar Singh v. Krishna Devi and another, it was held that since Section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, the Court is not bound to grant such relief merely because it is lawful to do so observing at the same time that the exercise of such discretion must not be arbitrary but sound and reasonable guided by judicial principles and capable of correction by Appellate Court. The circumstances specified in Section 20 were considered to be illustrative and not exhaustive and that the court should take into consideration circumstances in each case, the conduct of the parties and ;the respective interest under the contract.”….
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15. In Gobind Ram v. Gian Ckand, , this court though held, taking note of Section 10 Expl.(i) and Section of the Specific Relief Act, 1963, that mere escalation of prices of real estate properties per se is no ground to deny the relief of specific performance but at the same time emphasized that the Court has to consider whether it will be fair, just and equitable to grant a decree therefor, guided by principles of justice, equity and good conscience and not automatically grant the relief for the asking of it.”….
42. Taking into consideration of the facts of the case and the law laid down by the Apex Court, this court holds that this is not a fit case where the lower appellate court could have granted relief of specific performance as a course of equity while exercising discretion as provided in Section 20 of The Specific Relief Act.
43. All the points have to be answered against the plaintiff and in favour of the defendant. In the result, the appeal is allowed. The judgment and decree of the lower appellate court are set aside and the judgment and decree of the trial court are restored. Consequently, connected CMP is closed. The parties shall bear their respective costs.