Case Note & Summary
The appellants, defendants in a suit for specific performance, challenged the concurrent findings of the Trial Court and First Appellate Court which decreed the suit in favour of the respondent/plaintiff. The suit was based on a sale agreement dated 08.12.2007 (Ex.A1) wherein the defendants agreed to sell the suit property to the plaintiff for a total consideration of Rs.6,00,000/-, with an advance of Rs.1,00,000/- paid on the date of agreement. The time for performance was fixed as three months. The plaintiff issued a legal notice on 08.09.2008 calling upon the defendants to execute the sale deed, but the defendants failed to comply. The suit was filed on 07.12.2010, which was the last day of the three-year limitation period from the date fixed for performance (08.03.2008). The defendants contended that the agreement was not intended to be a sale but was only a security for a loan of Rs.1,00,000/-. The Trial Court decreed the suit, and the First Appellate Court confirmed the decree. In the Second Appeal, the High Court framed three substantial questions of law: (A) whether the courts below erred in granting specific performance without considering Sections 16 and 20 of the Specific Relief Act, especially since the suit was filed on the last day of limitation; (B) whether the courts below erred in granting the relief without adverting to the fact that the suit was filed 36 months after the date of performance and 33 months after the legal notice; and (C) whether the courts below erred in rejecting the defence under Section 92 of the Evidence Act without considering its proviso. The High Court held that the plaintiff had proved readiness and willingness to perform his part of the contract, and the mere fact that the suit was filed on the last day of limitation does not disentitle the plaintiff to specific performance. The court also held that the defendants' attempt to lead oral evidence to show that the agreement was a security for a loan was barred by Section 92 of the Evidence Act, as no fraud or mistake was pleaded. The concurrent findings of fact were based on proper appreciation of evidence and did not give rise to any substantial question of law. Accordingly, the Second Appeal was dismissed with costs.
Headnote
A) Specific Relief Act - Specific Performance - Sections 16, 20 - Delay in Filing Suit - The suit for specific performance was filed on the last day of limitation, i.e., 36 months from the date fixed for performance. The court held that mere delay in filing the suit, without more, does not disentitle the plaintiff to the equitable relief of specific performance, especially when the plaintiff has proved readiness and willingness to perform his part of the contract. The courts below correctly exercised discretion in granting specific performance. (Paras 1-43) B) Evidence Act - Section 92 - Oral Evidence to Contradict Written Agreement - The defendants sought to lead oral evidence to show that the sale agreement was intended only as a security for a loan. The court held that under Section 92 of the Evidence Act, when the terms of a contract have been reduced to writing, no oral evidence is admissible to contradict or vary such terms, unless the case falls within any of the provisos. The defendants did not plead fraud, mistake, or any other exception, and therefore the courts below rightly rejected the defence. (Paras 1-43) C) Limitation Act - Article 54 - Suit for Specific Performance - The suit was filed within the period of limitation prescribed under Article 54 of the Limitation Act, 1963, i.e., three years from the date fixed for performance. The fact that the suit was filed on the last day of limitation does not, by itself, constitute a ground to deny the relief of specific performance. (Paras 1-43)
Issue of Consideration
Whether the courts below erred in granting specific performance despite the suit being filed on the last day of limitation and without proper explanation for delay; whether the courts below erred in rejecting the defence that the agreement was intended as a security for loan, relying on Section 92 of the Evidence Act without considering its proviso.
Final Decision
The Second Appeal was dismissed with costs. The judgment and decree of the First Appellate Court dated 12.10.2018 in A.S.No.19 of 2014, confirming the Trial Court's decree dated 28.02.2014 in O.S.No.214 of 2011, were upheld.
Law Points
- Specific performance
- Limitation
- Readiness and willingness
- Section 16 Specific Relief Act
- Section 20 Specific Relief Act
- Section 92 Evidence Act
- Equitable relief
- Concurrent findings
- Substantial question of law
