Kaushalya Devi vs Kusum Rai & Others

Debangsu Basak, J

The revisional application is directed against a judgment and order dated June 28, 2019 passed by the first appellate Court allowing the appeal against the judgement and order dated June 19, 2019 passed by the First Court.

By the impugned judgment and order, the first appellate Court granted an injunction in favour of the plaintiff/opposite party no.1 in a suit for specific performance of an agreement for sale of an immovable property by reversing the order of rejection of the injunction petition passed by the First Court.

Learned advocate appearing in support of the revisional application submits that, an agreement for sale in respect of which specific performance was sought for the suit was entered into on July 24, 2013. The suit was filed on November 6, 2018 which was beyond a period of five years from the date of the agreement for sale. On the face of it, according to him, the suit was barred by the laws of limitation since the suit was filed after expiry of a period in excess of three years from the date of the agreement. In support of his contentions, learned advocate for the revisional applicant, relies upon Article 54 of the Limitation Act, 1963.

Learned advocate appearing for the revisional applicant submits that, the plaintiff/opposite party no.1 did not issue any notice to the revisional applicant to enforce the agreement for sale. He submits that, the revisional applicant not having received any notice for specific performance of the agreement for sale, the question of refusal to do so did not arise. Moreover, drawing the attention of the Court to the schedule of the plaint, he submits that, the plots in question, underwent sub-division. The sub-division happened in June 2018. Therefore, the schedule to the suit no longer exists for an order of injunction to be passed. According to him, third party interest were created subsequent to the sub-division of the plot in question. Those third parties are not parties to the suit. Therefore, the first appellate Court erred in granting the impugned order of injunction.

Referring to Section 17 of the Registration Act, 1908 and relying upon (2012) 1 SCC 656 [Suraj Lamp and Industries Private Limited (2) vs. State of Haryana and another], learned advocate appearing for the revisional applicant submits that, an unregistered agreement for sale cannot be enforced in a Court of law. Therefore, he submits that, the learned first appellate Court erred in granting an order of injunction.

Learned advocate appearing for the plaintiff/opposite party No.1 submits that, the agreement for sale did not fix any time limit for the performance of the agreement. He draws the attention of the Court to the various clauses of the agreement for sale. In particular, he draws the attention of the Court to clause 7 of the agreement for sale, and submits that, the revisional applicant, as a vendor, was required to sub-divide the portion of land purchased by the plaintiff/opposite party no.1. The revisional applicant did not do so till June 2018 which is before the filing of the suit. Therefore, according to him, the suit is not barred by limitation. He relies upon Article 54 of the Limitation Act, 1963 and submits that, in the facts of the present case, since, the agreement for sale did not fix any date for performance, then, the second portion of the Article 54 will apply, that is to say that, when no date is fixed, the plaintiff will have 3 years from the date of notice that the performance for the agreement of sale is refused. In the facts of the present case, the plaintiff got notice of refusal as pleaded in paragraph 13 of the plaint that is, on August 14, 2018. The suit was filed on November 6, 2018. Therefore, the suit was filed within three years from the date of the notice received by the plaintiff/opposite party no.1. In support of his contentions, he relies upon (1998) 6 SCC 358 [Babu Ram alias Durga Prasad vs. Indra Pal Singh) and (2006) 5 SCC 340 (Panchanan Dhara & others Vs. Monmatha Nath Maity & another).

Relying upon an unreported decision of this Hon'ble Court in a second appeal dated January 9, 2015 rendered in SAT No.006 of 2014 ( Swarnendu Das Gupta Vs. Smt.Sadhana Banerjee), learned advocate appearing for the plaintiff/opposite party no.1 submits that, a decree for specific performance of an unregistered sale can be granted.

Learned advocate appearing for the defendant Nos.2 and 3/opposite parties No.2 and 3 submits that, the revisional applicant could not have entered into an agreement for sale in respect of the immovable property concerned, as, the revisional applicant is not the sole and absolute owner of such property. His clients are also co-owners of such property. The properties are yet to be partitioned by metes and bounds. Therefore, the agreement for sale cannot be enforced by the plaintiff/opposite party no.1.

In reply, learned advocate appearing for the petitioner refers to clause 5 of the agreement for sale and submits that, the vendor was obliged to obtain all required documents for the purpose of registration of sale deed and that, the vendor was obliged to execute the sale deed in favour of the purchaser at the earliest. According to him, the word 'earliest' used in clause 5 of the agreement for sale does not mean a period of five years. It is to be reasonably construed as three years. Therefore, he submits that as the suit is barred by limitation, an order of injunction could not have been passed by the first appellate Court.

In a suit for specific performance of an agreement dated July 24, 2013, the plaintiff/opposite party no.1 applied for grant of injunction. On contested hearing, prayer for injunction was refused. Being aggrieved the plaintiff/opposite party no.1 preferred an appeal. The first appellate Court by the impugned judgment and order, granted an order of injunction till the disposal of the suit.

The revisional applicant sets up two defences to the grant of injunction in the suit for specific performance. One of the defences is limitation.

Prescribed period of limitation for filing a suit for specific performance of a contract appears in Article 54 of the Schedule to the Limitation Act, 1963 which is as follows:-

Description of suit

Period of limitation

Time from which period begins to run

54

For specific performance of contract.

Three years

The date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused.

Article 54 of the Limitation Act, 1963 prescribes a period of three years for specific performance of contract. However, Article 54 envisages two points of commencement for the period of three years prescribed in such Article. The first point of commencement of three years is the date fixed for performance in the agreement sought to be specifically performed. The other point of commencement is the date when the plaintiff has noticed that the performance is refused, in the event, no date is fixed for the performance of the contract.

In the present case, the agreement dated July 24, 2013 specific performance of which is sought in the suit, does not fix any date for performance of the same. In such an eventuality, the second portion of Article 54 comes into operation. In such a case, when no date is fixed for performance of a contract, then, it has to be the date when the plaintiff/opposite party no.1 has notice that performance is refused. In the instant case, in paragraph 13 of the plaint, the plaintiff/opposite party no.1 pleads that, on August 14, 2018 the plaintiff demanded from the revisional applicant the transfer of the suit property but she refused. The suit was filed on November 6, 2018 within a period of three years from the date of the notice of the refusal to perform the agreement. The suit is yet to be finally decided. Written statement is yet to be filed. It is at the stage where the petition for injunction is being considered.

The suit for re-conveyance covered by a sale deed dated July 15, 1964 was under consideration in Babu Ram (supra). An issue as to whether the suit which was filed on October 6, 1969 for specific performance of contact for re-conveyance dated November 19, 1963 was in time under Article 54 of the Limitation Act, 1963 or not was considered by the Supreme Court in that case. The Supreme Court held as follows:-

"39. Under Article 54 of the Limitation Act, 1963, it is stated in the third column that the suit for specific performance has to be filed within 3 years from the date stipulated in the contract or from the date of refusal to perform the contract. In the present case, even though a period of 5 years is fixed for exercising the option to repurchase, it is not specified in the agreement that the vendee shall execute the deed of repurchase within a particular period from the date of exercise of option. Hence the first part of the third column of article 54 does not apply. The second part applies. Time therefore starts to run only from 22-7-1968, the date when the defendant refused to execute the deed of reconveyance. The suit was filed on 6-10-1969 within 3 years from 22-7-1968. The suit is in time as held by the trial court. Point 5 is held in favour of the plaintiff."

In Panchanan Dhara & others (supra), the Supreme Court considered a suit for specific performance of an agreement and an issue of limitation involved therein. It held that, while determining the applicability of Article 54 of the Limitation Act, 1963, the Court has to find out whether, first or the second part of Article 54 applies. The Court will firstly see as to whether any time was fixed for performance of the agreement of sale and if it was so fixed, whether the suit was filed beyond the prescribed period unless any case of extension of time for performance was pleaded and established. When, however, no time is fixed for performance of contract, the Court may determine the date on which the plaintiff had notice of refusal on the part of the defendant to perform the contract and in that event the suit is required to be filed within a period of three years therefrom.

Applying the ratio of Babu Ram (supra) and Panchanan Dhara (supra), in the facts of the present case, since, the agreement for sale dated July 24, 2013 does not contain any time period within which the agreement is to be performed, then, the second point of commencement of limitations under Article 54 of the Limitation Act, 1963 applies. The second point of commencement of the period of limitation prescribes a period of three years from the date of notice of refusal of the plaintiff/opposite party no.1. In the present case, the plaintiff received notice of refusal on August 14, 2018. The suit being filed on November 6, 2018, the suit is within the period of limitation.

It is the contention of the revisional applicant that, the plaintiff/opposite party did not issue any notice to the revisional applicant for performance of the agreement for sale dated July 24, 2013. Even if such contention is taken at the face value, then, reading Article 54 of the Limitation Act, 1963, in the light of the ratio laid down in Babu Ram (supra) and Panchanan Dhara(supra), the limitation is yet to commence on the strength of the contention of the revisional applicant. As noted above, the agreement for sale dated July 24, 2013 does not prescribe a period of limitation. If the contention of the revisional applicant is accepted as sacrosanct, then, the plaintiff is yet to receive any notice of refusal, as the plaintiff did not issue any notice for performance. It is not the case of the revisional applicant that, as the vendor, the revisional applicant gave notice to the plaintiff/opposite party no.1 for performance of the contract. Therefore, the time for the performance of the agreement for sale dated July 24, 2013 is yet to expire. Therefore, the suit cannot be said to be beyond the prescribed period of limitation.

The second defence of the revisional applicant that, the agreement for sale is unregistered and therefore, cannot be enforced, requires consideration.

Suraj Lamp & Industries Pvt. Ltd. (2) (supra) dealt with the effect of unregistered deed of conveyances are concerned. It dealt with the bane of unregistered sale agreement/general power of attorney/will sales. It issued various directions with regard to the same.

The High Court in Swarnendu Das Gupta (supra) considered the issue as to whether an unregistered sale agreement can be specifically enforced under the Specific Relief Act, 1963 and whether, the sale agreement of which specific performance is sought under the provisions of the Specific Relief Act, 1963, is required to be registered under Section 17(1)(a) of the Registration Act, 1908 or not. It took into consideration the pronouncement of Suraj Lamp & Industries Pvt. Ltd. (2) (supra). It noted that, there is no provision in law which mandates that the agreement for sale will have to be registered excepting in cases where Section 17(1)(a) of the Registration Act, 1908 applies. It noted that, the provisions of the Registration Act, 1908 indicated that an agreement of sale is not required to be compulsorily registered. It proceeded to grant a decree for specific performance of an agreement for sale dated April 26, 2006.

Applying the ratio of Swarnendu Das Gupta (supra) in the facts of the present case, I find no material irregularity in the impugned judgment and order of the first appellant Court in granting an order of injunction in a suit for specific performance of an unregistered agreement for sale, warranting an interference under Article 227 of the Constitution of India. The plaintiff having made out a strong prima facie case, the balance of convenience and of inconvenience lying overwhelmingly in favour of the plaintiff in obtaining an order of injunction as granted by the First Appellate Court, no interference is called for.

CO No.043 of 2019 is dismissed without any order as to costs.

At this stage, learned advocate appearing for the revisional applicant submits that, direction for expeditious disposal of the suit be granted. He submits that, his client is ready and willing to file the written statement in course of tomorrow. In view of the stand of the revisional applicant, it would be appropriate to permit the revisional applicant to file the written statement in the suit within December 24, 2019. Learned advocate appearing for the revisional applicant makes over a copy of the written statement to the learned advocate for the plaintiff/opposite party no.1 in Court. It would be appropriate to request the learned Judge in seisin of the suit to hear and dispose of the suit as expeditiously as possible and preferably within a period of six months from the date of communication of this order. The parties are requested not to seek unnecessary adjournments at the trial of the suit.