Specific Performance Suit Filed Within Limitation Cannot Be Dismissed On The Sole Ground Of Delay Or Laches: SC [Read Judgment]

The Supreme Court has observed that a suit for specific performance filed within limitation cannot be dismissed on the sole ground of delay or laches.

Once a suit for specific performance has been filed, any delay as a result of the court process cannot be put against the plaintiff as a matter of law in decreeing specific performance, the bench comprising Justices Rohinton Fali Nariman and Navin Sinha observed.

An exception to this rule is where immovable property is to be sold within a certain period, time being of the essence, and it is found that owing to some default on the part of the plaintiff, the sale could not take place within the stipulated time, the court clarified.

In this case, while denying specific performance, the High Court observed that the court process has taken 27 years to decide the specific performance suit, specific performance being a discretionary relief ought not to be granted.

Ferrodous Estate (Pvt.) Ltd. had filed Specific Performance Suit in 1981 against P. Gopirathnam and three others. The single judge of the Madras High Court held that the plaintiff is entitled to purchase the suit property and to get a decree for specific performance. The Division bench later set it aside (In between, the case was referred to full bench on the issue of the bar contained in section 6 of the Tamil Nadu Urban Land Ceiling Act ).

In appeal, the Apex Court bench noted that as per Section 20 of the Specific Relief Act, as it then stood before 2018 amendment,  the jurisdiction to decree specific performance is discretionary. But that discretion is not arbitrary but has to be exercised soundly and reasonably, guided by judicial principles, and capable of correction by a court of appeal, the court said.

The court noted that, in Nirmala Anand v. Advent Corporation (P) Ltd., (2002) 8 SCC 146, it was held that mere escalation of land prices after the date of the filing of the suit cannot be the sole ground to deny specific performance. Mere delay by itself, without more, cannot be the sole factor to deny specific performance, it was observed in Mademsetty Satyanarayana v. G. Yelloji Rao, (1965) 2 SCR 221. Saradamani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18, made it clear that given the steep rise in urban land prices, it may not be correct now to say that time is not of essence in performance of a contract of sale of immovable property, the court noted. It observed:

The resultant position in law is that a suit for specific performance filed within limitation cannot be dismissed on the sole ground of delay or laches. However, an exception to this rule is where immovable property is to be sold within a certain period, time being of the essence, and it is found that owing to some default on the part of the plaintiff, the sale could not take place within the stipulated time. Once a suit for specific performance has been filed, any delay as a result of the court process cannot be put against the plaintiff as a matter of law in decreeing specific performance. However, it is within the discretion of the Court, regard being had to the facts of each case, as to whether some additional amount ought or ought not to be paid by the plaintiff once a decree of specific performance is passed in its favour, even at the appellate stage.

Case name: FERRODOUS ESTATES (PVT.) LTD. vs. P. GOPIRATHNAM (DEAD) 

Case no.: CIVIL APPEAL NO.13516 OF 2015 

Coram: Justices Rohinton Fali Nariman and Navin Sinha

Counsel: Sr. Adv Guru Krishnakumar , Sr. Adv V. Giri for respondents

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