Case: Fatehji &amp; Company  Vs. L.M. Nagpal

The perpetual lease hold right in respect of the suit land as vacant plot was granted in favour of original lessee Col. A.N. Kapur by registered lease deed dated 16.4.1962 by the Government of India and he built two storied building with barsati and he sold his rights in the said property to the first defendant-Firm by registered sale deed dated 6.5.1963. The first defendant entered into a written agreement of sale dated 2.7.1973 in respect of the suit property with Smt. Ram Pyari. As per the terms of the agreement the possession of the suit property including the building was handed over to Smt. Ram Pyari Nagpal on the date of agreement itself. The date for execution of the sale deed was fixed for 2.12.1973. Extension of time for execution of sale deed on the plea of obtaining permission to sell the property from the lessor was sought by the defendants by way of letters and the last of such extension was sought for six months w.e.f. August 1976. The sons of second defendant in July 1985 filed a suit seeking for declaration that the suit property is joint family property and the sale made by defendants in favour of plaintiffs be declared as null and void, was filed against defendants 2, 3 and the plaintiffs and on contest the same was dismissed on 5.4.1989. According to the plaintiffs the final cause of action accrued and arose after August 1991 when the defendants began hiding themselves and avoiding the plaintiffs and they filed the suit on 29.4.1994 seeking for a decree for specific performance of the agreement of sale dated 2.7.1973 against the defendants4. The defendants 1 to 3 filed an application under Order VII Rule 11 CPC on 10.10.1996 seeking for rejection of the plaint as barred by the law of limitation. The Trial Court after hearing both sides by a speaking order held that the suit is patently barred by the law of limitation and allowed the application by rejecting the plaint. The plaintiffs preferred appeal in RFA no.350 of 1997 and the High Court by the impugned judgment allowed the appeal by setting aside the order of the Trial Court and restored the suit to file. Aggrieved by the same the defendants have preferred the present appeal. For the sake of convenience, the parties are hereinafter referred to as they were arrayed in this suit

Court's reasoning:
7. The fact that the plaintiffs were put in possession of the property agreed to be sold on the date of agreement itself would not make any difference with regard to the limitation of filing the suit for specific performance. In fact both the courts below have rightly held that Article 54 of the Limitation Act does not make any difference between a case where possession of the property has been delivered in part performance of the agreement or otherwise. In the same way the courts below have also concurrently held even if any permission is to be obtained prior to the performance/completion of the contract, the mere fact that the defendants have not obtained the said permission would not lead to inference that no cause of action for filing the suit for specific performance would arise. Further it is also not the case for postponing the performance to a future date without fixing any further date for performance. The last extension for a period of six months w.e.f. 1.8.1976 sought for by the defendants expired on 1.2.1977. The present suit seeking for specific performance was filed by the plaintiffs on 29.4.1994, much beyond the period of three years9. The plaintiffs averred in the plaint that the last and final cause of action accrued and arose to them after August 1991 when the defendants succeeded in hiding themselves and started avoiding the plaintiffs and the cause of action being recurring and continuous one, they filed the suit on 29.4.1994. As already seen the original cause of action became available to the plaintiffs on 2.12.1973, the date fixed for the performance of the contract and thereafter the same stood extended till 1.2.1977 as requested by the defendants. Though the plaintiffs claimed that oral extension of time was given, no particulars as to when and how long, were not mentioned in the plaint. On the other hand even after knowing the dishonest intention of the sons of the second defendant with regard to the suit property in the year1985, the plaintiffs did not file the suit immediately. The suit having been filed in the year 1994 is barred by limitation under Article 54 of the Limitation Act10. We are of the view that the High Court committed manifest error in reversing the well considered order of the Trial Court rejecting the plaint as barred by the law of limitation and the impugned judgment is liable to be set aside.