Case Note & Summary
The case arose from an agreement dated 6.10.1997 between the appellant, Rajesh Dayaldas Narwani, and the respondent, Kanayalal D. Bablani, whereby the appellant was inducted as a tenant in a shop premises on a security deposit of Rs.2,00,000 with an option to purchase the shop for total consideration of Rs.8,00,000, the deposit being adjustable. The option could be exercised during the subsistence of tenancy by intimation in writing. In 2002, the appellant obtained an ex parte decree in Special Civil Suit No.108 of 2002 declaring him a tenant. On 10.12.2003, the appellant issued a notice exercising the option to purchase, but the notice returned unclaimed. The appellant filed the present suit in 2007 seeking specific performance. The respondent resisted, contending that the appellant was a licensee not a tenant, had defaulted in payments, and that the agreement had expired; the respondent also filed a counterclaim for possession. The trial court dismissed the suit on grounds of limitation and failure to prove readiness and willingness, and dismissed the counterclaim. The first appellate court confirmed the dismissal. In this second appeal, the appellant argued that no specific date was fixed for performance, so limitation had not commenced as there was no express refusal; the return of notice as unclaimed did not start limitation; and readiness and willingness was wrongly decided only on limitation. The respondent argued that the suit was hopelessly barred by limitation due to inaction for 10 years and 4 years after notice; appellant failed to prove financial capacity; and discretionary relief would cause hardship due to escalated property value. The High Court framed three substantial questions of law. On limitation, the court held that under Article 54 of the Limitation Act, when no date is fixed, limitation runs from when the plaintiff has notice of refusal. The court noted that the appellant was aware of the respondent’s refusal as early as when his tenancy was challenged in prior proceedings, and waiting till 2007 was beyond permissible period. The suit was barred by limitation. On readiness and willingness, the court found that the appellant led no evidence of having necessary funds; payments of Rs.3,25,000 to the Registrar in 2013 and Rs.50,000 towards maintenance were not in terms of the contract and made after filing suit, thus did not discharge the requirement under Section 16(c) of the Specific Relief Act. The court also considered Section 20 of the Specific Relief Act, observing that granting specific performance after 20 years when property values had escalated exponentially would cause grave hardship to the respondent and that the appellant’s delay and conduct disentitled him to equitable relief. Consequently, the High Court dismissed the second appeal, confirming the concurrent findings.
Headnote
A) Limitation - Specific Performance - Article 54, Limitation Act, 1963 - When no date fixed for performance, limitation runs from date plaintiff has notice of refusal - Appellant's notice dated 10.12.2003 returned unclaimed, but prior knowledge of respondent's contesting his tenancy status indicated refusal; suit filed in 2007 held barred (Paras 21-26). B) Specific Relief Act - Readiness and Willingness - Section 16(c), Specific Relief Act, 1963 - Plaintiff must aver and prove continuous readiness and willingness - Appellant failed to show financial capacity and took no steps from 1997 to 2007, payments relied on not in terms of contract - Held, appellant not ready and willing (Paras 27-30). C) Specific Relief Act - Discretionary Relief - Section 20, Specific Relief Act, 1963 - Hardship to defendant due to property value escalation over 20 years and plaintiff's inordinate delay disentitle him to equitable relief - No interference warranted with lower courts' refusal (Paras 31-34).
Issue of Consideration
Whether the suit for specific performance was barred by limitation; Whether the appellant proved his readiness and willingness to perform the contract; Whether the High Court should exercise its discretion to grant specific performance.
Final Decision
Second Appeal dismissed. Judgments and decrees of courts below confirmed. Suit for specific performance dismissed. No costs.
Law Points
- Article 54 of Limitation Act
- 1963
- specific performance
- readiness and willingness
- Section 16(c) and Section 20 of Specific Relief Act
- discretionary relief
