SMT. KATTA SUJATHA REDDY & ANR. versus SIDDAMSETTY INFRA PROJECTS PVT. LTD.& ORS.

Citation: [2022] 17 S.C.R. 416 · Decided: 25-08-2022 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Disposed off

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 17 S.C.R.
SMT. KATTA SUJATHA REDDY & ANR.
v.
SIDDAMSETTY INFRA PROJECTS PVT. LTD.& ORS.
(Civil Appeal No. 5822 of 2022)
AUGUST 25, 2022
[N. V. RAMANA, CJI, KRISHNA MURARI AND
HIMA KOHLI, JJ.]
Specific Performance – Limitation Act, 1963 – Article 54 –
Limitation period for Specific Performance – Specific Relief Act,
1963 – ss. 10, 12 – Appellant herein (Purchaser) entered into an
agreement with the Respondents herein (Vendors) in 1997 to
purchase two stretches of land, and paid 90% of total amount by
cash and cheque – Remaining 10% was to be paid within 3 months
as per clause 3 of the agreement, which was defaulted by the
appellant – However, appellant sent two notices to the respondents
in 2000 and 2002 seeking performance of the agreement by agreeing
to deposit the balance sale consideration – Thereafter, appellant
filed a suit seeking specific performance in 2002 – Trial court
dismissed the suit holding that it was barred by limitation – Appellant
approached High Court – High Court held that the trial Court erred
in making the distinction between time fixed for payment of sale
consideration and time for performance of contract – Further, held
that the purchaser was ready and willing to perform his contract,
and through his acts, proved his bonafides by already paying 90%
of the sale consideration within the stipulated period and by later
depositing the balance amount in court – Also held that amended
Section 10 of the Specific Relief Act, which provides that specific
performance shall be enforced by courts subject to conditions
mentioned, shall apply retrospectively and therefore benefit the
appellent – HC partly allowed the appeal and directed the resondents
to register the suit property in favour of the appellant to the extent
of the amount paid by the appellant, i.e., 90% of the total sale
consideration, within a period of 3 months – Aggrieved, both
appellant and respondents approached this Court – Held: Fixed
time period was mandated by Clause 3 of the agreement and
accordingly, the suit filed by the purchaser was clearly barred by
[2022] 17 S.C.R. 416
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limitation in view of the provision provided under Article 54 of the
Limitation Act – Amended Section 10 of the Specific Relief Act
brought by the amendment of 2018 was not mere procedural
enactment, rather it had substantive principles built in it and thus,
the same would not apply retrospectively – As far as entitled to the
relief of specific performance is concerned, it is clear that the
purchaser did not voluntarily adhere to the time stipulation under
the contract – In order to bypass the condition of time being the
essence, the purchaser invoked the standard of good faith – Unless
such duty is expressly stipulated, good faith standard cannot be
implicitly read into any contract – Prior to 2018 amendment, general
standard of good faith to imply broader good faith obligations
cannot be accepted to give a go-by to the explicit conditions for
maintaining the sanctity of contract – Such broad standards will
have potentially far-reaching consequences - The purchaser was
not ready or willing to perform his part of the contract within the
time stipulated and accordingly, specific performance cannot be
granted for the entire contract – There is no doubt that the claim of
appellant is hit by delay and laches on their part as they did not
take appropriate measures within the stipulated time and filing of
the suit was delayed by almost five years – Thus, no relief can also
be granted to the appellant u/s. 12 of the Specific Relief Act –
Respondents directed to repay the deposited amount with interest.
Disposing of the appeals, the Court
HELD:
1. The vendors were entitled to rescind the contract as
there was a breach of condition, i.e, ‘time was the essence’.
Coming back to the point of limitation, it is clear that Article 54
of the Limitation Act mandates that in this case at hand, the date
fixed for payment of consideration was three months from the
date of the agreements (i.e. 26.03.1997 and 27.03.1997). In any
case, the time period for filing the suit had commenced from 26/
27.6.1997 and would have expired after three years, i.e., in the
end of June 2000. [Para 35][434-B-C]
2. The purchaser has contended that the legal notice issued
by them on 31.03.2000, would be sufficient to get past the bar of
limitation, as the purchaser has paid the advance amount to a
SMT. KATTA SUJATHA REDDY v. SIDDAMSE

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