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Court to direct specific performance by the defaulting party, of so much of the contract, as can be performed: Supreme Court

The SC on September 18, 2020 {B. SANTOSHAMMA & ANR. vs D. SARALA & ANR.} held that Section 12 of the Specific Relief Act is to be construed and interpreted in a purposive and meaningful manner to empower the Court to direct specific performance by the defaulting party, of so much of the contract, as can be performed. It was held that to hold otherwise would permit a party to a contract for sale of land, to deliberately frustrate the entire contract by transferring a part of the suit property and creating third party interests over the same.

It was held by the SC Bench, comprising of Justice Uday Umesh Lalit and Justice Indira Banerjee, that under the Limitation Act 1963 the period of limitation for filing a suit for specific performance is three years from the date fixed for performance of the contract, or if no date is fixed, then three years from the date on which the Vendee is put to notice of refusal to perform the agreement (Item No.54 in Part II of the Schedule to the Limitation Act 1963).

It was also held that a registered deed of conveyance takes effect, as regards the property comprised therein, against every unregistered deed relating to the same property as provided in Section 50 of the Registration Act.

It was held that a transferee to whom the subject matter of a sale agreement or part thereof is transferred, is a necessary party to a suit for specific performance. It was further held that unfortunately in present case, the Vendee omitted to implead Pratap Reddy. It was held that by the time she filed an application to implead Pratap Reddy, in 1989, the suit for specific performance of the agreement dated 21.3.1984 had become barred by limitation as against Pratap Reddy.

It was held that the Vendee was put to notice of the refusal of the Vendor to execute the agreement dated 21.3.1984, by the Vendor’s letter/legal notice dated 20.6.1984. It was held that any suit for specific performance would be time barred by June/July 1987. It was held that moreover, is a matter of record that the Vendee knew of the registered deed of conveyance in favour of Pratap Reddy, when she instituted the suit in 1984.

It was held that the Vendee neither amended her pleadings in the plaint nor amended the prayers. Pratap Reddy was simply added defendant. It was held the Court adding Pratap Reddy as defendant in the suit for specific performance, did not make any direction in terms of the proviso to Section 21(1) of the Limitation Act, that the suit against Pratap Reddy be deemed to be instituted at any earlier date. It was held that there could therefore be no question of any relief against Pratap Reddy in the suit for specific performance.

It was held that the Vendee did not implead the Vendor as defendant in her later suit inter alia for a declaration that the Deed of conveyance executed by the Vendor in favour of Pratap Reddy was null and void. It was held that the suit has rightly been dismissed for non joinder of the Vendor as defendant. It was held that there could be no question of a document being adjudged null and void without impleading the executant of the document, as defendant.

It was also held that the suit for specific performance being time barred against Pratap Reddy, and the suit against Pratap Reddy also having been dismissed for non joinder of the Vendor, there could be no question of nullifying the rights that had accrued to Pratap Reddy, pursuant to the Deed of Conveyance dated 25.4.1984 executed by the Vendor transferring 100 sq. yards of the suit land to Pratap Reddy. It was held moreover, there was apparently an agreement in writing executed between the Vendor and Pratap Reddy on or about 25.01.1984 before execution of the agreement between the Vendor and the Vendee.

It was further held that it is true that, the clubbing of suits for hearing them together and disposal thereof by a common judgment and order is for practical reasons. It was held that such clubbing together of the suits do not convert the suits into one action as argued. The suits retain their separate identity.

The SC concluded that it finds no such infirmity in the judgment and order of the High Court under appeal, confirming the judgment and order of the Trial Court, that calls for interference. The appeals were, therefore, dismissed by the SC.

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