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TMI Blog2022 (8) TMI 1565X X X X Extracts X X X X X X X X Extracts X X X X ..... Limitation Act mandates that in this case at hand, the date fixed for payment of consideration was three months from the date of the agreements (i.e. 26.03.1997 and 27.03.1997). In any case, the time period for filing the suit had commenced from 26/27.6.1997 and would have expired after three years, i.e., in the end of June 2000. Article 54 of the Limitation Act provides for two consequences based on the presence of fixed time period of performance. It is only in a case where the time period for performance is not fixed that the purchaser can take recourse to the notices issued and the vendors' reply thereto. In the case at hand, the aforesaid circumstances do not come into play as a fixed time period was clearly mandated by Clause 3 read with Clause 23 of the agreements to sell - there would not have been any reason for this Court to continue the analysis on merits. However, we feel that even on merits, the purchaser's case cannot be countenanced in law. Whether the amended Section 10 of the Specific Relief Act is prospective or retrospective in operation? - HELD THAT:- When a substantive law is brought about by amendment, there is no assumption that the same ought to be given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on part of the parties to perform the rest of the contract or the remaining part was waived. In this case, the purchaser breached the essential condition of the contract, which altogether disentitles him to claim specific performance. There is no doubt that the claim of purchaser is hit by delay and laches on their part as they did not take appropriate measures within the stipulated time and filing of the suit was delayed by almost five years - This is not an appropriate case for granting relief to the purchaser in terms of Section 12 of the Specific Relief Act, 1963 as the claim of the purchaser is barred by delay, laches and limitation. Thus, the contract was breached due to the conduct of the plaintiff/purchaser, who were not willing to perform the contract after entering into a time sensitive agreement. In any case, it is an admitted fact that plaintiff had paid only part consideration. Though there is a forfeiture clause in the agreement, this Court with a view of rendering complete justice between the parties, deems it appropriate to direct the vendors/appellants to repay the said amount with interest @ 7.5% p.a. from the date such payment was made by the purchaser to the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 19.03.1994. In pursuance to this agreement, two registered Joint GPA'S dated 28.03.1994 were executed in the name of the defendant Nos. 5 and 6 from the abovementioned owners, for an extent of Acs. 127.27 gts. of land. 5. The agreement dated 19.03.1994 and the registered GPA, in favour of the respondent no. 1/purchaser (Siddamsetty Infra Projects Pvt. Ltd.) could not materialize. Parties entered into two fresh agreements dated 26.03.1997 and 27.03.1997 inter alia appellant (hereinafter referred to as 'vendors') herein to purchase an extent of Acs. 40.08 gts. The agreement dated 26.03.1997 pertained to Acs. 35.15 gts. land for a consideration of Rs. 38,37,500/ while the agreement dated 27.03.1997 pertained to Acs 1.33 gts of land for a consideration of Rs. 1,82,500/. 6. The total suit scheduled property thus consists of Acs. 40.08 gts of land situated in Sy No. 301 (part), 302, 303, 304 (part) of Budvel Village, Rajendranagar Mandal, R.R. District for which a total consideration of Rs. 40,20,000/ was agreed upon between the parties. Out of the total agreed consideration Rs. 34,80,850/ was paid by the purchaser to the vendors by way of cash and cheques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time bar of 3 months for the payment of the sale consideration and furnishing of necessary certificates by the purchaser and the vendor respectively. The vendor through their conduct had never intended to treat time as the essence of the contract. On delay of payments made by the purchaser, the vendor never issued any notice to them. This showed that the vendor never intended to treat time as the essence of the contract. The vendor also painted a picture that it did procure the necessary documents as required under clause 3 of the contract, but it never did the same. The vendor made a false plea about the duty to be performed by it under clause 3 of the contract. 10. The trial Court further held that while there exists a false plea on the part of the vendor, the same however does not benefit the case of the purchaser because there are grave laches on his part too. The purchaser himself having approached the Court with unclean hands, he cannot get the benefit of the false plea made by the vendor. 11. The trial court also came to the conclusion that the purchaser was never ready to pay the balance sale consideration, if so, he would have either issued a notice to the vendor making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime fixed for payment of sale consideration and time for performance of contract. 15. On point (2), the High Court held that the vendors surrendered almost all their rights over the suit schedule property and allowed the purchaser to exercise his rights over the suit property as per the contract. It was wrongly held by the trial Court that since the name of the purchaser was deleted in Exs. B10 & B11, the purchaser was not in possession of the property. On the basis of this, the trial Court also held that the purchaser did not approach the court with clean hands. One more point that came in favour of the purchaser was that one of the parties to the sale agreement had categorically admitted that the purchaser was put in possession of the property. This fact was never contested by any party. The High Court held that just because the possession aspect is not mentioned in Exs. A2, A3, A4, A5, A29 & A30 or in the first notice, it cannot be said that the purchaser was not in possession of the suit schedule property. 16. On point (3), the High Court observed that the vendors were at fault for not obtaining the necessary certificates as per Clause 3 of the contract for completing the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red that the sum of Rs. 5,39,150/ deposited by the purchaser, by virtue of the trial Court order dated 11.07.2005 in IA No. 925/2005, was to be refunded to the purchaser with interest, if any accrued thereon. 21. Aggrieved by the impugned judgment, both the vendors and the purchaser are in appeal before this Court. 22. Mr. Dushyant Dave and Mr. Harin P. Raval, learned Senior Counsel appearing on behalf of the purchaser, submitted as follows: i. The High Court was correct in exercising its jurisdiction and the impugned judgment is based on both, oral and documentary evidence. The reasons given for granting the relief of specific performance are in accordance with the settled principles of law. ii. Both the trial Court and the High Court have concurrently found that time is not the essence of the contract. No time was fixed for the performance of the contract itself. The period of 3 months stipulated under Clause 3 of the agreements to sell, is only for payment of the sale consideration. As a result, when no date is fixed for the performance of the contract, the limitation period commences from the date of specific refusal. In the case at hand, specific refusal of the vend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossession on execution of the sale deed. (d) PW2 (neighbour) deposed that the purchaser had laid roads, constructed two rooms, put up fencing, etc. on the property. However, the same is falsified by the documents on record. The photographs of the property show that there are no road or rooms on the property. Additionally, no such pleading is made in the suit. ii. The suit filed by the purchaser is barred by limitation and the trial Court held so correctly. The parties executed the agreements to sell on 26.03.1997 and 27.03.1997 and the purchaser was to pay the balance amount within 3 months, i.e., by 27.06.1997. It is the purchaser's case that the vendors evaded execution of the sale deed as early as in June 1997. Therefore, the limitation would start running in June 1997 and expire in June 2000. The suit, however, was filed only on 09.08.2002 and is, therefore, clearly barred by limitation. The purchaser's oral evidence also shows that the right to sue accrued in the year 1997 itself. iii. Additionally, the notice purportedly dated 08.02.2000, was actually despatched on 31.03.2000 and was purposely backdated. iv. The purchaser was not ready and willing to perform the contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two separate parcels of land in survey no. 301(part) , 302, 303, 304(part). The sale considerations for the aforesaid land were Rs. 38,37,500/ and Rs. 1,82,500/ respectively. Out of the above sale considerations, the vendors received an advance of Rs. 34,70,000/ and Rs. 10,850/ in furtherance of the performance of the aforesaid agreement. 26. A notice dated 08.02.2000 was despatched by the purchaser on 31.03.2000, calling upon the appellants herein to execute the sale deed at a convenient date, suitable to the vendors herein. 27. The vendor replied to the aforesaid notice by letter dated 14.04.2000 by stating that the purchaser never offered to pay the balance sale consideration and issuance of the notice dated 08.02.2000, was nothing but a subterfuge to get over the limitation. 28. Thereafter, a suit was filed by the purchaser only on 09.08.2002. In the suit, the averments made by the purchaser as to the limitation are as under: "LIMITATION: The suit is within limitation in continuation of efforts. Some defendants are agreeing to execute the sale deed and some defendants are continuing and evading the execution of the sale deed. Time is not the essence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreements. Further, the High Court construed the obligation of the vendors to produce requisite certificates and permission as a condition for the purchaser to complete the sale transaction. In view of the same, the High Court concluded that the first part of Article 54 was incorrectly applied by the trial Court and accordingly held that the suit was not barred by limitation. 31. At the outset, this Court has perused Clause 3 of the agreements, which is in two parts. The first part provides for the purchaser's obligation, while the second part details the obligation of the vendors to provide the requisite certificates. Although both the obligations were required to be completed within the stipulated period of three months, there is a substantive difference between these two sets of obligations. The obligation upon the vendors concerned was production of certain certificates, such as income tax exemption certificate and agriculture certificate. No consequences were spelt out for nonperformance of such obligations. Whereas the obligation on the purchaser, was to make the complete payment of the sale consideration within three months. The clause further mandates forfeiture of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract in which time is essential When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract." 35. In view of the aforesaid provisions, the vendors were entitled to rescind the contract as there was a breach of condition, i.e, 'time was the essence'. Coming back to the point of limitation, it is clear that Article 54 of the Limitation Act mandates that in this case at hand, the date fixed for payment of consideration was three months from the date of the agreements (i.e. 26.03.1997 and 27.03.1997). In any case, the time period for filing the suit had commenced from 26/27.6.1997 and would have expired after three years, i.e., in the end of June 2000. 36. The purchaser has contended that the legal notice issued by them on 31.03.2000, would be sufficient to get past the bar of limitation, as the purchaser has paid the advance amount to a large extent. Alt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecific performance if the Court of Equity found that granting damages would be inadequate or some special equitable rights of the plaintiff under a trust have been breached. 42. In any case, grant of such relief, which emanated from equitable principles, remained discretionary. This principle is clearly explained by Swinfen Eady M.R., in Whiteley Limited v. Hilt [(1918) 2 K.B. 808], in the following manner: "The power vested in the Court to order the delivery up of a particular chattel is discretionary, and ought not to be exercised when the chattel is an ordinary article of commerce and of no special value or interest, and not alleged to be of any special value to the plaintiff and where the damages would fully compensate." 43. However, this was not the position under the Civil Law. Under the Civil Law of contracts, adherence to the sanctity of contract is enforced with greater rigour by inversing the situation. The reason for choice of damages and specific performance range from legal to economic. It is in this context that the Courts cannot engage on the merits of having damages or specific performance or a hybrid. It is best left to the legislature to choose the course bes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er remedy against a defendant who acts in breach of his obligations under a contract, is either damages or specific relief. The two principal varieties of specific relief are, decree of specific performance and the injunction (See David Bean on Injunctions). The Specific Relief Act, 1963 was intended to be "an Act to define and amend the law relating to certain kinds of specific reliefs". Specific relief is relief in specie. It is a remedy which aims at the exact fulfilment of an obligation. According to Dr. Banerjee in his Tagore Law Lectures on Specific Relief, the remedy for the nonperformance of a duty are (1) compensatory, (2) specific. In the former, the court awards damages for breach of the obligation. In the latter, it directs the party in default to do or forbear from doing the very thing, which he is bound to do or forbear from doing. The law of specific relief is said to be, in its essence, a part of the law of procedure, for, specific relief is a form of judicial redress. Thus, the Specific Relief Act, 1963 purports to define and amend the law relating to certain kinds of specific reliefs obtainable in civil courts. It does not deal with the remedies connected wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to comply with contracts and thereby reducing efficient breaches. 50. Under the preamended Specific Relief Act, one of the major considerations for grant of specific performance was the adequacy of damages under Section 14(1)(a). However, this consideration has now been completely done away with, in order to provide better compensation to the aggrieved party in the form of specific performance. 51. Having come to the conclusion that the 2018 amendment was not a mere procedural enactment, rather it had substantive principles built into its working, this Court cannot hold that such amendments would apply retrospectively. 52. In Shyam Sunder and others V. Ram Kumar and Another [(2001) 8 SCC 24], this Court held as under: "28. From the aforesaid decisions the legal position that emerges is that when a repeal of an enactment is followed by a fresh legislation, such legislation does not affect the substantive rights of the parties on the date of the suit or adjudication of the suit unless such a legislation is retrospective and a court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered because the rights ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the aforesaid decision, it is clear that when a substantive law is brought about by amendment, there is no assumption that the same ought to be given retrospective effect. Rather, there is a requirement for the legislature to expressly clarify whether the aforesaid amendments ought to be retrospective or not. 54. In the light of the aforesaid discussion, it is clear that ordinarily, the effect of amendment by substitution would be that the earlier provisions would be repealed, and amended provisions would be enacted in place of the earlier provisions from the date of inception of that enactment. However, if the substituted provisions contain any substantive provisions which create new rights, obligations, or take away any vested rights, then such substitution cannot automatically be assumed to have come into force retrospectively. In such cases, the legislature has to expressly provide as to whether such substitution is to be construed retrospectively or not. 55. In the case at hand, the amendment act contemplates that the said substituted provisions would come into force on such date as the Central Government may appoint, by notification in the Official Gazette, or differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation is three years does not mean that a purchaser can wait for 1 or 2 years to file a suit and obtain specific performance. The threeyear period is intended to assist the purchasers in special cases, as for example, where the major part of the consideration has been paid to the vendor and possession has been delivered in partperformance, where equity shifts in favour of the purchaser." 58. From the aforesaid, it is clear that the purchaser ought to have been vigilant in the case at hand to enforce his right and could not have been lackadaisical in his approach. From the facts, it is clear that the purchaser had entered into an agreement way back on 26/27.03.1997, which had a clause mandating completion of the contract by payment of the remaining consideration within three months. The aforesaid clause was drafted, as alluded to earlier, for providing one last opportunity for the purchaser to make good their lapse which had happened on the earlier occasion. In this context, the time for performance of the contract including the payment lasted till the month of June 1997. 59. It was necessary that the purchaser should have taken immediate steps to complete the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, we issued a demand draft for the sum of Rs. 5,00,000/ within 10 of [sic.] 15 days and obtained a separate receipt for that amount from Deft. No. 6 by name Katta Sujatha Reddy. It is mentioned in the agreement for sale dt. 26.03.1997 the transaction has to be completed within three months. Witness volunteers and says; the three month time was stipulated with some conditions. It is mentioned in another agreement of sale dated 27.03.1997 that the sale transaction has to be completed within three months with some conditions. … Q. How many times you met the Defendant and demanded for execution in the year 1997? Ans. … We did not issue any notice to the defendants in the year 1997 by demanding them to receive the balance of sale consideration and execute sale deed in our favour. It is not true to suggest that I was not ready and willing to perform my part of contract and that I never had balance of sale consideration and that I did not demand the defendants within stipulated period to receive the balance of sale consideration and to execute the sale deed and that due to it, I am not entitled to get the relief of specific performance of agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o agreements to sell in 1997. On this aspect, the High Court has decided in favour of the purchaser by relying upon the evidence of PW1 and the proceedings before the Revenue Authorities. However, we are of the opinion that the High Court has not duly considered the statement of PW1 in its proper perspective. PW1 during the course of crossexamination, has not specifically pointed out as to when was the purchaser put into possession of the property. PW1 has not further proved that there was any development cost incurred by him for developing the aforesaid land. 71. The claim of PW2 that the disputed land was developed by the purchaser, is clearly unacceptable in the light of exhibits A22 to A26 which are the photographs of the property that show that no development had taken place, as averred by the purchaser. Reliance on the revenue records concerning mutation may not be of any significance when the question of possession is to be decided solely on the facts as available on the records. 72. In this context, we do not propose to burden this judgment with a detailed discussion of the testimonies of DW2 and DW3 which clearly go to show that the purchaser was never in possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid] the consideration for the whole of the contract without any abatement; and (ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant. (4) When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the court may direct specific performance of the former part. Explanation.--For the purposes of this section, a party to a contract shall be deemed to be unable to perform the whole of his part of it if a portion of its subject matter existing at the date of the contract has ceased to exist at the time of its performance. 76. The aforesaid provision has been interpreted by this Court on several occasions. In the case of Jaswinder Kaur v. Gurmeet Singh [(2017) 12 SCC 810], this Court held as under: "20. Section 12(1) provides that specific performance can be granted on part of a contract only in the circumstances men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this Court held as under: "8. A perusal of subsection (3) of Section 12 shows that the first part of the said provisions mandates refusal of specific performance of a contract on certain conditions. However, the latter part of the provisions permits a court to direct the party in default to perform specifically so much of his part of the contract as he can perform if the other party pays or has paid the agreed consideration for the whole of the contract and relinquishes all claims to the performance of the remaining part of the contract and all the rights to compensation for the loss sustained by him. If a suit is laid by the other party, the court may direct the defaulting party to perform that part of the contract which is performable on satisfying two preconditions i.e. (i) the plaintiff pays or has already paid the whole of the consideration amount under the agreement, and that (ii) the plaintiff relinquishes all claims to the performance of the other part of the contract which the defaulting party is incapable to perform and all rights to compensation for loss sustained by him. Thus, the ingredients which would attract specific performance of the part of the contract, ..... 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