Supreme Court of India
RAMAN (DEAD) BY LRS.versusR. NATARAJAN
- Citation
- 2022 INSC 954
- Decided
- 13 September 2022
- Disposal
- Appeal(s) allowed
Holding
Specific performance cannot be ordered where its fulfilment depends on a third party’s consent, and the suit is barred by Section 12(1) of the Specific Relief Act; the High Court’s decree for specific performance is set aside.
Summary
The plaintiff filed a suit for specific performance of a 1993 agreement of sale of land, which was conditioned on the defendant first entering into an agreement with his brother's wife to purchase a parcel of her land for access. The trial court granted specific performance, the first appellate court reversed, and the High Court restored the decree. On appeal, the Supreme Court held that specific performance cannot be compelled when the performance depends on a third party's consent, as barred by Section 12(1) of the Specific Relief Act and none of its exceptions apply. The Court also found that the High Court erred in addressing the limitation issue without framing a proper substantial question of law and without referring to Article 54 of the Limitation Act. Consequently, the decree for specific performance was set aside and the appellant was ordered to repay the amount paid by the plaintiff with interest. The appeal was allowed and costs were awarded to each party.
Issues considered
- Whether specific performance can be granted when the performance depends on a third party's agreement.
- Whether Section 12(1) of the Specific Relief Act, 1963 bars specific performance of part of a contract in the present case.
- Whether any of the exceptions under Sections 12(2), 12(3), 12(4) of the Specific Relief Act apply.
- Whether the limited rights under Section 13(1)(b) of the Specific Relief Act are available to the plaintiff.
- Whether the suit is barred by limitation under Article 54 of the Schedule to the Limitation Act, 1963.
- Whether the High Court correctly framed and decided the substantial question of law.
Legislation cited
- Limitation Act, 1963s. 18(1)
- Schedule to the Limitation Act, 1963s. Article 54
- Specific Relief Act, 1963s. 12, s. 13(1)(b)
Subjects
specific performancethird partySpecific Relief ActLimitation Actcontractsale of immovable propertydecreeappellate jurisdiction
Judgment
[2022] 11 S.C.R. 227 227
RAMAN (DEAD) BY LRS. A
v.
R. NATARAJAN
(Civil Appeal No. 6554 of 2022)
B
SEPTEMBER 13, 2022
[INDIRA BANERJEE AND V. RAMASUBRAMANIAN, JJ.]
Specific Relief Act, 1963 – s.12, 13(1)(b) – Limitation Act,
1963 – s.18(1), Art.54 – Suit for specific performance involving
third party – Grant of decree for specific performance – Correctness C
of – Held: High Court ought to have seen that the specific
performance of the Agreement in question comprised of two parts
(i) the defendant (predecessor of appellants) entering into an
agreement with his brother’s wife for the purchase of a land for
providing access to the land agreed to be sold under the suit
D
Agreement of Sale; and (ii) the defendant then executing a sale
deed conveying the property covered by the suit Agreement of Sale
– Since the defendant’s brother’s wife was not a party to the suit
agreement of sale, the Court cannot compel her to enter into an
agreement with the defendant – Thus, performance of the first part
of the obligation cannot be compelled by the Court, as it depended E
upon the will of a third party – Consequently, the performance of
the second part of the obligation, may be hit by s.12(1) – Also,
none of the exceptions contained in sub-sections (2), (3) and (4)
will apply – Even the limited rights conferred by s.13(1)(b) are not
available to the respondent-plaintiff – Further, the High Court could
F
not have answered the question of limitation in favour of the
respondent without framing any substantial question of law and
without even a reference to Article 54 – Impugned judgment set
aside – Relief of specific performance claimed by the respondent is
rejected.
G
Suit – For specific performance involving third party – Held:
Court cannot grant the relief of specific performance against a
person compelling him to enter into an agreement with a third party
and seek specific relief against such a third party.
H
227
228 SUPREME COURT REPORTS [2022] 11 S.C.R.
A Allowing the appeal, the Court
HELD: 1.1 The mistakes committed by the High Court
were manifold. First, the High Court framed a question which
was actually a question of fact which involved appreciation of
evidence and not a substantial question of law. As a consequence,
B the answer given by the High Court was only a finding of fact.
Next, the High Court reversed the finding of the First Appellate
Court on the question of limitation, without framing a substantial
question of law and without even referring to the statutory
provisions. The Agreement is dated 19.06.1993. The Agreement
contains four endorsements which are dated 12.11.1995,
C 11.05.1998, 27.01.2001, 10.07.2005. The defendant raised the
question of limitation, on the basis of the fact that the fourth
endorsement was made beyond a period of three years from the
date of the third endorsement. Such a defence was based upon
Section 18(1) of the Limitation Act, 1963. But as a matter of fact,
D the limitation for filing a suit for specific performance, in terms of
Article 54 of The Schedule to the Limitation Act, 1963 is three
years, “from the date fixed for the performance or if no such date
is fixed, when the plaintiff has notice that the performance is
refused.” But in the entire memorandum of grounds of second
appeal filed by the respondent before the High Court, there was
E no whisper or reference to Article 54 of the Schedule to the
Limitation Act, 1963. The only substantial question of law framed
by the High Court at the time of entertaining the second appeal
was not about limitation revolving around Article 54 of the
Schedule to the Limitation Act. Therefore, the High Court could
F not have answered the question of limitation in favour of the
respondent herein, (i) without framing any substantial question
of law; and (ii) without even a reference to Article 54. [Paras 11-
15][232-G-H; 233-A-E]
1.2 In any case, the High Court ought to have seen that a
G Court cannot grant the relief of specific performance against a
person compelling him to enter into an agreement with a third
party and seek specific relief against such a third party. In other
words, the specific performance of the agreement by the appellants
herein, depended upon (i) the appellants entering into an
agreement with a third party; and (ii) appellants being in a position
H
RAMAN (DEAD) BY LRS v. R. NATARAJAN 229
to compel such third party to perform her obligations under such A
agreement. The High Court ought to have seen that the specific
performance of the Agreement in question comprised of two parts
namely, (i) the defendant entering into an agreement with his
brother’s wife for the purchase of a land for providing access to
the land agreed to be sold under the suit Agreement of Sale; and
B
(ii) the defendant thereafter executing a sale deed conveying the
property covered by the suit Agreement of Sale. Since the
defendant’s brother’s wife was not a party to the suit agreement
of sale, the Court cannot compel her to enter into an agreement
with the defendant. In other words, the performance of the first
part of the obligation, which we have indicated in the preceding C
paragraph, cannot be compelled by the Court, as it depended
upon the will of a third party. As a consequence, the performance
of the second part of the obligation, may be hit by Section 12(1)
of the Specific Relief Act, 1963. [Paras 16, 17][233-E-H; 234-A-
B]
D
1.3 From the pleadings on record, it appears that the case
on hand will not even be covered by sub-sections (2), (3) & (4) of
Section 12 of the Specific Relief Act. Since it is stated very clearly
in the suit Agreement of Sale that the land covered by the
Agreement will not have any access, unless the defendant entered
into an agreement with his brother’s wife, it is clear that none of E
the exceptions contained in sub-sections (2), (3) and (4) of Section
12 will apply. Even the limited rights conferred by Section 13(1)(b)
of the Specific Relief Act are not available to the respondent, as
there was no legal right in the defendant to compel 3rd parties to
convey their land to him for the purpose of providing a pathway F
to the land agreed to be sold to the respondent herein. Therefore,
the High Court committed a grave error in law in granting a decree
for specific performance. Hence the appeal is allowed, the
impugned judgment of the High Court is set aside and the relief
of specific performance claimed by the respondent is rejected.
However, there will be a decree directing the appellants to pay G
to the respondent, the amount of Rs.1,44,400/- paid by the
respondent, with interest @ 9% p.a. from the date of filing of the
suit, till the date of repayment. The parties shall bear their
respective costs throughout. [Paras 18-21][234-D-E; 235-A-B]
H
230 SUPREME COURT REPORTS [2022] 11 S.C.R.
A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6554
of 2022.
From the Judgment and Orders dated 24.04.2018 of the High
Court of Judicature at Madras in Second Appeal No. 64 of 2015.
G. Sivabalamurugan, P. Shankar, C. Adhikesavan, Advs. for the
B Appellants.
S. Nandakumar, Ms. Deepika Nandakumar, Anand Murthi, Naresh
Kumar, Advs. for the Respondent.
The following Judgment of the Court was passed :
JUDGMENT
C
Leave granted.
2. The suit for specific performance of an Agreement of Sale of
an immovable property, filed by the respondent herein, was decreed by
the Trial Court but the said decree was reversed by the First Appellate
D Court. However, the High Court reversed the Judgment and decree of
the First Appellate Court and restored the decree for specific performance
granted by the Trial Court. Aggrieved by the same, the legal
representatives of the original defendant are on appeal.
3. We have heard Mr. G. Sivabalamurugan, learned counsel for
the appellants and Mr. S. Nandakumar, learned counsel for the
E respondent.
4. The respondent herein filed a suit in O.S. No.360 of 2008 on
the file of the First Additional District Munsif, Salem, for specific
performance of an Agreement of Sale dated 19.06.1993, contending
inter alia :
F
that the appellants agreed to sell the suit property which is
a land of the extent of about 76 cents for a total sale
consideration of Rs.1,44,000;
that an advance of Rs.25,000 was paid at the time of
execution of the Agreement;
G
that the defendant received further amounts of
Rs.50,000/- on 19.11.1995, Rs.43,000/- on 11.05.1998,
Rs.10,000/- on 27.01.2001 and Rs.16,400/- on 10.07.2005;
that appropriate endorsements were made on the reverse
of the first, second and third pages of the agreement;
H
RAMAN (DEAD) BY LRS v. R. NATARAJAN 231
that the entire sale consideration thus stood paid; A
that it was provided in the Agreement that the defendant
should simultaneously enter into an agreement with his
brother’s wife for the purchase of a portion of her land, to
be used as pathway for access to reach the suit property;
that the time for performance of the obligations under the B
Agreement was fixed as 11 months from the date of the
defendant entering into an agreement with his brother’s wife
for the purchase of the land for the pathway;
that however when the plaintiff issued a legal notice dated
27.03.2007, the defendant sent a reply denying everything; C
and
that therefore, the plaintiff was constrained to file the suit.
5. The defendant filed a written statement denying everything,
including the execution of the Agreement. Therefore, the Trial Court D
framed the following issues;
“(i) Is the Agreement of Sale dated 19-8-93 real and true?
(ii) Is the suit barred by limitation?
(iii) Is the plaintiff eligible for the relief of specific performance?
E
(iv) Any other relief?”
6. After trial, the Trial Court passed a Judgment and decree dated
14.02.2012, holding that the Agreement dated 19.06.1993 was true and
valid; that the suit was not barred by limitation; and that the plaintiff
was entitled to the relief of specific performance. F
7. The First Appellate Court came to the conclusion,
that the endorsements made in the Agreement of sale on
12.11.1995, 11.05.1998, 27.01.2001 and 10.07.2005 marked
as Exhibit A-2 to A-5, were not proved;
G
that the plaintiff could not prove that he was ready and
willing to perform his part of the obligations;
that the suit was barred by limitation; and
that, therefore, the plaintiff was not entitled to specific
performance. H
232 SUPREME COURT REPORTS [2022] 11 S.C.R.
A 8. The only substantial question of law framed by the High Court
at the time of admission of the second appeal was as follows:
“In the light of the finding of the trial Court that Ex. A-1 – sale
agreement is true, whether the First Appellate Court was right in
holding that the endorsements made on Ex.A.1 under Exs.A.2 to
B A.5 have not been proved though, according to the plaintiff, it has
been proved by the evidence of P.Ws. 2 and 3?”
9. The High Court recorded its opinion on the above substantial
question of law as follows:
“From over all consideration of pleadings, oral and documentary
C evidence and the judgment of the trial Court, it is clear that the
first respondent only executed Exs.A.1 to A.5 and the First
Appellate Judge on erroneous consideration of pleadings and
evidence of P.Ws.2 to 3 held that the appellant failed to prove the
endorsements in Exs.A.2 to A.5 after holding that Ex.A.1 was
D executed by the first respondent and relying of Ex.A.2 to hold
that suit is barred by limitation.”
10. What was recorded as above was not actually an answer to
the substantial question of law, even if we construe what was framed, to
be a substantial question of law. The above finding is actually a finding
E of fact. Apart from that, the High Court also went beyond the substantial
question of law framed by it and proceeded to hold that the suit was not
barred by limitation. The High Court opined that the time for performance
of the obligations under the Agreement was fixed as 11 months from the
date on which the defendant entered into an agreement with his brother’s
wife for the purchase of a land to be used as pathway. However, the
F defendant did not enter into any agreement with his brother’s wife. On
the other hand, the defendant chose to deny the very execution of
Agreement of Sale in his reply notice dated 04.04.2007. Therefore, the
High Court held that limitation started running from the date of refusal
and that the suit filed in November, 2007 was within the period of limitation.
G 11. The mistakes committed by the High Court were manifold.
First, the High Court framed a question which was actually a question of
fact which involved appreciation of evidence and not a substantial question
of law. As a consequence, the answer given by the High Court was only
a finding of fact. Next, the High Court reversed the finding of the First
Appellate Court on the question of limitation, without framing a substantial
H
question of law and without even referring to the statutory provisions.
RAMAN (DEAD) BY LRS v. R. NATARAJAN 233
12. As we have pointed out earlier, the Agreement is dated A
19.06.1993. The Agreement contains four endorsements which are dated
12.11.1995, 11.05.1998, 27.01.2001, 10.07.2005.
13. The defendant raised the question of limitation, on the basis of
the fact that the fourth endorsement was made beyond a period of three
years from the date of the third endorsement. Such a defence was based B
upon Section 18(1) of the Limitation Act, 1963.
14. But as a matter of fact, the limitation for filing a suit for specific
performance, in terms of Article 54 of The Schedule to the Limitation
Act, 1963 is three years, “from the date fixed for the performance or
if no such date is fixed, when the plaintiff has notice that the C
performance is refused.”
15. But in the entire memorandum of grounds of second appeal
filed by the respondent-herein before the High Court, there was no
whisper or reference to Article 54 of the Schedule to the Limitation Act,
1963. The only substantial question of law framed by the High Court at D
the time of entertaining the second appeal was not about limitation
revolving around Article 54 of the Schedule to the Limitation Act.
Therefore, the High Court could not have answered the question of
limitation in favour of the respondent herein, (i) without framing any
substantial question of law; and (ii) without even a reference to Article
54. E
16. In any case, the High Court ought to have seen that a Court
cannot grant the relief of specific performance against a person
compelling him to enter into an agreement with a third party and seek
specific relief against such a third party. In other words, the specific
performance of the agreement by the appellants herein, depended upon F
(i) the appellants entering into an agreement with a third party; and (ii)
appellants being in a position to compel such third party to perform her
obligations under such agreement.
17. The High Court ought to have seen that the specific
performance of the Agreement in question comprised of two parts namely, G
(i) the defendant entering into an agreement with his brother’s wife for
the purchase of a land for providing access to the land agreed to be sold
under the suit Agreement of Sale; and (ii) the defendant thereafter
executing a sale deed conveying the property covered by the suit
Agreement of Sale.
H
234 SUPREME COURT REPORTS [2022] 11 S.C.R.
A 18. Since the defendant’s brother’s wife was not a party to the
suit agreement of sale, the Court cannot compel her to enter into an
agreement with the defendant. In other words, the performance of the
first part of the obligation, which we have indicated in the preceding
paragraph, cannot be compelled by the Court, as it depended upon the
will of a third party. As a consequence, the performance of the second
B
part of the obligation, may be hit by Section 12(1) of the Specific Relief
Act, 1963 which reads as follows:-
“12. Specific Performance of part of contract.-(1) Except as
otherwise hereinafter provided in this section the court shall not
direct the specific performance of a part of contract.
C
xxx xxx xxx”
19. From the pleadings on record, it appears that the case on hand
will not even be covered by sub-sections (2), (3) & (4) of Section 12 of
the Specific Relief Act. Since it is stated very clearly in the suit Agreement
D of Sale that the land covered by the Agreement will not have any access,
unless the defendant entered into an agreement with his brother’s wife,
it is clear that none of the exceptions contained in sub-sections (2), (3)
and (4) of Section 12 will apply.
20. Even the limited rights conferred by Section 13(1)(b) of the
E Specific Relief Act are not available to the respondent, as there was no
legal right in the defendant to compel 3rd parties to convey their land to
him for the purpose of providing a pathway to the land agreed to be sold
to the respondent herein. Section 13(1)(b) reads as follows:
“13. Rights of purchaser or lessee against person with no
F title or imperfect title.—(1) Where a person contracts to sell
or let certain immovable property having no title or only an
imperfect title, the purchaser or lessee (subject to the other
provisions of this Chapter), has the following rights namely:-
(a) xxx xxx xxx
G (b) where the concurrence of other persons is necessary for
validating the title, and they are bound to concur at the request of
the vendor or lessor, the purchaser or lessee may compel him to
procure such concurrence, and when a conveyance by other
persons is necessary to validate the title and they are bound to
convey at the request of the vendor or lessor, the purchaser or
H lessee may compel him to procure such conveyance;”
RAMAN (DEAD) BY LRS v. R. NATARAJAN 235
21. Therefore, the High Court committed a grave error in law in A
granting a decree for specific performance. Hence the appeal is allowed,
the impugned judgment of the High Court is set aside and the relief of
specific performance claimed by the respondent is rejected. However,
there will be a decree directing the appellants to pay to the respondent,
the amount of Rs.1,44,400/- paid by the respondent, with interest @ 9%
B
p.a. from the date of filing of the suit, till the date of repayment. The
parties shall bear their respective costs throughout.
Divya Pandey Appeal allowed.
(Assisted by : Roopanshi Virang, LCRA)
C
D
E
F
G
H
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