The Supreme Court dismissed the suit for specific performance due to the delay in filing it. The Agreement to Sell was dated 31.07.1975, and the suit was filed on 01.01.1981. The Limitation Act, 1963, allows a 3-year limitation from the date fixed for performance or from the date when the plaintiff becomes aware of the performance refusal.
The Court noted that even after more than five years, the respondent hadn't shown readiness to fulfill their obligations under the Agreement to Sell (ATS) or pay the remaining amount. This, along with the limitation issue, led to the dismissal of the respondent's suit.
This litigation stemmed from an Agreement to Sell (ATS) executed on 31.07.1975 in favor of the respondents by the appellants. The ATS required the appellants to seek permission from the District Magistrate to sell the property within eight days. Upon receiving permission, they were to inform the respondents, and a Sale Deed was to be executed within 15 days. However, the appellants didn't apply for permission, leading the respondents to file a suit for specific performance of the ATS. The suit was decreed on 08.03.1982.
The Justices, Vikram Nath and Ahsanuddin Amanullah, recognized that the appellants' failure to fulfill their duty by applying within 8 days or notifying permission had consequences. In either case, it granted the respondents the right to take the matter to court
Given this context, the court emphasized that the respondents couldn't argue that they had the right to wait indefinitely for the appellants to inform them about permission. The court stated that as soon as the initial eight days passed, the respondents were obligated to act promptly and diligently, being aware of their rights.
The appellants argued that the respondents hadn't taken any action, even though the appellants hadn't applied for permission for five years. This, they claimed, demonstrated that the respondents were not prepared and willing to fulfill their part of the contract, and therefore, the suit was time-barred. In contrast, the respondents contended that since the appellants hadn't applied and, therefore, hadn't obtained permission, they hadn't informed the respondents. As a result, the suit wasn't subject to limitation, and they argued that it was filed within the legally allowed time frame.
It's crucial to highlight that Clause 4 of the agreement specified that if the appellants failed to apply for permission within the specified time or, after obtaining permission, did not notify the respondents and execute the deed in favor of either the respondents or someone of their choice, then the respondents had the right to pursue the sale of the property through the court and also take possession through the court.
In this context, the Court's interpretation was that a combined and consistent reading of the pertinent clauses in the agreement made it clear that the responsibility was on the appellants. They were required to apply for permission within 8 days and, once permission was granted, inform the respondents. Subsequently, the respondents were obliged to execute the Sale Deed within 15 days. The Court emphasized that if the appellants failed to fulfill these obligations, either by not applying for permission or not informing the respondents after receiving permission, the respondents had the right to approach the court to enforce the sale and take possession of the property.
The Court also noted that the respondents had not provided any notice to the appellants for a period of five and a half years to explain why they were waiting. They didn't indicate whether they were willing to fulfill their obligations under the Agreement to Sell (ATS) and why the appellants hadn't done the same. Additionally, the respondents had never informed the appellants that they were ready and willing to pay the remaining amount and execute the Sale Deed. The absence of these actions in the entire pleading didn't support the respondents' case.
TAGS: Court opinion Onus on appellants Agreement clauses Notice absence Obligations under ATS
