Case Note & Summary
The appellants, original plaintiffs, filed Special Civil Suit No. 51 of 1989 for specific performance of an agreement to sell immovable property against the respondents. The trial court decreed the suit directing execution of the sale deed. The respondents appealed in Regular Civil Appeal No. 52 of 2009, which was allowed by the first appellate court, dismissing the suit on grounds of limitation and bar under Order II Rule 2 CPC. The appellants then filed the present second appeal. The High Court admitted the appeal on three substantial questions of law: whether the decree for specific performance should be refused only on account of delay and whether the first appellate court's finding that time was of essence was erroneous; whether the first appellate court failed to properly construe the terms of the agreement; and whether the suit was barred by limitation and Order II Rule 2 CPC. The High Court held that in agreements for sale of immovable property, time is not presumed to be of essence unless expressly stipulated and the circumstances indicate the same. The plaintiffs had shown continuous readiness and willingness to perform their part. The suit was filed within three years from the date of refusal, hence within limitation. The earlier suit for injunction and the present suit for specific performance are based on different causes of action, so Order II Rule 2 CPC does not apply. The High Court allowed the appeal, set aside the judgment of the first appellate court, and restored the decree of the trial court directing specific performance.
Headnote
A) Specific Relief Act, 1963 - Section 20 - Specific Performance - Delay - Time not of essence - The court held that in an agreement for sale of immovable property, time is not presumed to be of essence unless expressly stipulated and the circumstances indicate the same. Mere fixation of a period for performance does not make time of essence. The first appellate court erred in refusing specific performance solely on the ground of delay when the plaintiffs were always ready and willing to perform their part. (Paras 1-3) B) Limitation Act, 1963 - Article 54 - Suit for Specific Performance - Limitation - The court held that the suit for specific performance filed within three years from the date fixed for performance or from the date of notice of refusal is within limitation. The first appellate court's finding that the suit was barred by limitation was erroneous as the plaintiffs had shown continuous readiness and willingness and the defendants did not refuse performance until a later date. (Paras 1-3) C) Code of Civil Procedure, 1908 - Order II Rule 2 - Bar on subsequent suit - The court held that Order II Rule 2 CPC applies only when the cause of action in the subsequent suit is the same as in the former suit. In the present case, the earlier suit was for injunction and the present suit is for specific performance, which are distinct causes of action. Hence, the bar under Order II Rule 2 CPC does not apply. (Paras 1-3)
Issue of Consideration
Whether the decree for specific performance should be refused only on account of delay and whether the first appellate court erred in holding time was of essence of contract and that the suit was barred by limitation and Order II Rule 2 CPC.
Final Decision
The High Court allowed the second appeal, set aside the judgment and decree of the first appellate court, and restored the decree of the trial court directing specific performance of the agreement to sell.
Law Points
- Specific performance
- Limitation
- Order II Rule 2 CPC
- Time not of essence
- Continuous readiness and willingness
