Specific Performance: Limitation, Readiness and Possession Injunction
On 12 January 2016, Arun agreed in writing to sell his 2,400 sq ft house plot at Coimbatore to Bala for ₹48,00,000. Bala paid ₹8,00,000 on that day, possession was handed over, and the sale deed was to be executed on 12 July 2016 on payment of the balance. Arun repeatedly postponed registration, citing family disputes. On 3 March 2022 Bala sent a lawyer's notice demanding execution within 30 days; Arun replied on 20 March 2022 denying the agreement and claiming that the paper was security for a hand loan. On 5 June 2023 Bala sued for specific performance and a permanent injunction restraining Arun from interfering with possession. Bala pleaded that he was always ready and willing and produced a bank statement showing the ₹8,00,000 transfer. The original agreement is unregistered, both attestors have died, and Arun disputes his signature. Bala did not deposit the balance in court and has not shown any notice or tender between July 2016 and March 2022. Arun also says the suit is barred by limitation.
1. Is Bala's suit for specific performance barred by limitation? Explain the relevant starting point and the effect of the 2022 notice and reply.
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The relevant provision is Article 54 of the Limitation Act, which gives three years for specific performance from the date fixed for performance, or, where no date is fixed, from notice of refusal.
Here the parties fixed 12 July 2016 as the date for execution. Once a date is fixed, limitation ordinarily runs from that date; a later demand or a later refusal does not create a fresh cause of action. Bala's notice of 3 March 2022 and Arun's reply of 20 March 2022 therefore came long after the three-year period had expired in July 2019. Those communications cannot revive a dead claim unless Bala proves a legally binding extension of time or an acknowledgment of liability satisfying the applicable provisions. Bala has produced no written extension, no payment after 2016, and no admission by Arun that the agreement subsists. His mere hope that Arun would register the deed is not enough.
The reply of 20 March 2022 may be relevant to the alternative limb only if no date had been fixed; that is not the case. The suit filed on 5 June 2023 is therefore beyond three years from 12 July 2016. On the facts stated, the plea of limitation should succeed, though Bala may have a separate claim for refund or damages if the agreement and payment are proved.
2. Assume limitation is not an obstacle. Has Bala proved readiness and willingness, and how should the court exercise discretion under section 20 of the Specific Relief Act?
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Section 16(c) of the Specific Relief Act requires the plaintiff not only to plead but to prove continuous readiness and willingness to perform his part. The bank statement proves only the original payment of ₹8,00,000 in 2016. It does not show that Bala had the balance of ₹40,00,000 available in 2016, that he tendered it, or that he was ready at any time between July 2016 and March 2022. A solitary notice after nearly six years, without tender or deposit, is weak evidence of continuous readiness.
The court would ask: did Bala call upon Arun to execute the deed within the agreed time; did he keep the balance ready; did he offer to deposit it; and why did he wait until 2022? His possession is consistent with part performance, but it does not dispense with the statutory requirement. If the agreement itself is proved despite the death of attestors and the disputed signature, readiness still remains a separate jurisdictional fact.
Section 20 discretion is not arbitrary, but it is exercised against a plaintiff whose conduct shows want of diligence. Even where the agreement is genuine, the court may refuse specific performance and confine the plaintiff to refund or damages if readiness and willingness are not proved. On these facts, Bala has not established the continuous readiness required by section 16(c).
3. What relief can Bala obtain regarding possession? Consider section 41(h) of the Specific Relief Act and the fact that he is already in possession.
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Bala is in possession under the 2016 agreement, but once specific performance is barred or refused, he has no enforceable title. An injunction is a discretionary equitable remedy. Section 41(h) bars an injunction where an equally efficacious relief can certainly be obtained by another usual mode of proceeding. Arun is the admitted owner; his remedy to recover possession is a suit for possession or, if the agreement is void, a possessory action after due notice.
The court must distinguish between protecting existing possession against a stranger and protecting a purchaser whose claim has failed against the true owner. Bala can perhaps resist a forcible dispossession without due process, but he cannot ask the court to permanently restrain the owner from asserting title merely because he was let into possession. A permanent injunction would effectively convert an unenforceable agreement into a right to remain. The conduct of Bala in not tendering the balance for years also attracts section 41(i).
Accordingly, the injunction should ordinarily be refused. Bala may be given a reasonable time to remove his belongings, and his remedy is to sue for refund of ₹8,00,000 with interest or damages, not to retain the plot indefinitely.