Specific Performance of an Agricultural Sale: Limitation, Readiness and Section 63 of the Tenancy Act

Article 54 of the Limitation Act, 1963 gives three years from the date fixed for performance or, where no date is fixed, from the date on which the plaintiff has notice that performance is refused.

• Here the agreement fixed 31 December 2017. The three-year period expired on 31 December 2020.
• The suit was filed on 20 June 2022 - roughly eighteen months late.
• The notice of 4 March 2022 cannot extend limitation. A notice issued after the period has run cannot revive a dead claim; only a written acknowledgment signed by the defendant before expiry could have done so under Section 18, and none is pleaded.
• The plaint itself discloses the date fixed for performance, so the bar is apparent from the plaint and can be decided without a full trial - under Order VII Rule 11(d) CPC or as a preliminary issue under Order XIV Rule 2.

Conclusion: the relief of specific performance is time-barred and must be refused.

The alternative relief of refund stands on a different footing. Its cause of action arises when the defendant refuses to perform - here, in response to the notice of 4 March 2022. If the refusal is so dated, the refund claim filed on 20 June 2022 is within time and must be decided on the merits. The court must not dismiss the entire suit on the limitation finding without separately examining the alternative relief.

A plaintiff seeking specific performance must both plead and prove that he has been ready and willing to perform his part continuously from the date of the agreement to the date of the decree - Section 16(c). Bare averments in the plaint are not proof; the conduct of the plaintiff is the best evidence.

Factors against Anil:

• He never tendered the balance of Rs 40,00,000, nor offered to deposit it in court.
• He sent no notice between 2017 and 2022 - a gap of over four years.
• He never applied for the Collector's sanction under Section 63 of the Maharashtra Tenancy and Agricultural Lands Act, 1948, which was an essential step before performance could ever occur.
• He remained silent even after learning, on the defendants' own case, that the land had been sold to a third party in January 2018.
• He is a Pune-based chartered accountant buying two hectares of agricultural land - a circumstance that made the sanction a precondition in his own interest.

Legal consequence: delay by itself may not defeat a suit if time is not of the essence, but unexplained delay coupled with non-tender of the balance and failure to take the statutory step is fatal to readiness and willingness. The court may not decree specific performance merely because the defendant has made a better bargain with a third party; but equally, the plaintiff cannot be relieved of proving his own willingness.

Conclusion: on these facts readiness and willingness is not proved, and the discretionary relief of specific performance must be refused independently of the limitation finding.

Section 63(1) of the Maharashtra Tenancy and Agricultural Lands Act, 1948 provides that no sale of agricultural land in favour of a person who is not an agriculturist shall be valid without the previous sanction of the Collector. Anil is not an agriculturist and holds no sanction.

• A decree of specific performance would compel execution of a sale deed which the statute renders invalid. The court will not do indirectly what the law forbids; the object of the contract is to that extent unlawful under Section 23 of the Contract Act, and the court cannot direct a party to perform an act that requires a sanction never applied for.
• At most the court could pass a conditional decree requiring the plaintiff to obtain sanction within a fixed time - but such a relief must be pleaded and sought, and cannot be granted where the suit is already barred by limitation and readiness is not proved.
• The third-party purchaser is a further obstacle, but the court need not reach Section 19 of the Specific Relief Act, 1963, once the plaintiff fails on limitation, readiness and the statutory bar.

Decree that should follow:

1. Specific performance refused.
2. The alternative claim for refund of Rs 5,00,000 examined on evidence; the defendant has received and enjoyed the earnest money for a contract that cannot be performed, and restitution can be ordered with interest, subject to the refund claim being within limitation.
3. Costs to follow the event, with the plaintiff entitled to costs on the refund claim if it succeeds.