R.K. PARVATHARAJ GUPTA versus K.C. JAYADEVA REDDY

Citation: [2006] 1 S.C.R. 1059 · Decided: 02-02-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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R.K. PARV ATHARAJ GUPTA 
A 
v. 
K.C. JAY ADEVA REDDY 
FEBRUARY 2, 2006 
[S.B. SINHA AND P.K. BALASUBRAMANYAN, JJ.] 
Limitation Act, 1963-Article 54-Suit for specific performance of 
contract filed after a period of three years from date of expiry of 15 days 
specified in notice, if barred by limitation-Held: Though time for performance c 
was not fIXed in sale agreement, but purchaser had notice that performance 
was being refused, if he failed to fulfil his obligation under the contract 
within 15 days of receipt of notice-On facts, it was clear that purchaser was 
not ready and willing to perform his part of contract-Thus, in terms of 
Article 54 suit should have been filed within three years from date of expiry 
of 15 days specified in notice-Thus as such suit barred by limitation- D 
Specific Relief Act, 1963. 
Appellant-owner of agriculture land took loan from bank depositing 
original title deed of the property with the bank. On the other hand appellant 
entered into agreement for sale of his land with the respondent for a certain E 
sum. As per the sale agreement respondent was to oeposit the mortgage 
amount in the bank and get the loan discharged. A dispute was pending 
between appellant and C in the High Court. Appellant was to inform respondent 
about disposal of the case. Sale deed was to be executed within period of four 
months upon disposal of appeal pending in High Court. Even if the dispute did 
not come to an end, sale deed was to be executed and the balance sale F 
consideration was to be left with the appellant after deducting the advance 
amount so as to enable the respondent to pay the same to the Bank till the 
said dispute came to an end. Respondent did not deposit the requisite amount. 
Bank filed a suit. Appellant served notice upon respondent on 24.04.1984 to 
deposit the amount and get the sale deed executed within 15 days of receipt of G 
notice failing which sale agreement would stand cancelled. Respondent did 
not deposit the amount nor inquired about the disposal of the case. He deposited 
only part of the amount one year later. Respondent then filed suit for specific 
performance of contract on 26.09.1989. Trial Court decreed the suit holding 
that the sanie was not barred by limitation. However, first appellate court 
1059 
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1060 
SUPREME COURT REPORTS 
[2006] I S.C.R. 
A dismissed the suit on the ground that it was barred by limitation. High Court 
holding that since time was not the essence of contract, suit was not barred 
by limitation and remitted the matter to the first appellate court. Hence the 
present appeal. 
B 
Allowing the appeal, the Court 
HELD: 1.1. In terms of Article 54 of the Limitation Act, 1963 a suit for 
specific performance of a contract is required to be filed within three years; 
in the event no date is fixed for the performance, within a period of three years 
from the date when the plaintiff has notice that performance is refused. 
C 
(1063-E) 
1.2. There cannot b.: any doubt whatsoever that in respect of a contract 
for sal'! of immovable property, time is not of the essence of the contract, but 
the notice dated 24.04.1984, is required to be construed in the context of the 
agreement entered into by and between the parties and the facts of the case. 
D From 1982 to 1984, the respondent did not pay any amount to the Bank nor 
took any steps to make any inquiry as regard the disposal of the said litigation 
before the High Court. Therefore, the appellant had good reasons to serve 
the notice dated 24.04.1984 calling upon the respondent to deposit the entire 
amount to the Bank. There is nothing on record to show that despite receipt 
of the said notice, the respondent took any step to deposit the said amount. He 
E was not ready and willing to perform his part of contract. Evidently, he was 
not interested in payment of the loan amount to the Bank on behalf of the 
appellant as he was appropriating the usufructs from the land as he was in 
possession thereof. He deposited a sum of Rs. 10,000/- after more than one 
year. [ 1063-F; 1064-E, FJ 
F 
1.3. Even though the time for performance was not fixed in the 
agreement for sale, on receipt of the notice, the respondent had notice that 
the performance was being refused, if he failed to fulfil his obligation under 
the contract within 15 days of receipt of the notice. Therefore, the suit, in 
terms of the requirement of Article 54 of the Limitation Act, should have 
G been filed within a 

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