Holding

The High Court erred in refusing specific performance without deciding the limitation question; its order is set aside and the case remanded for a merits determination.

Summary

The appellant, Ajaib Singh, entered into a sale agreement with the respondents and paid the bulk of the purchase price, leaving only Rs.75 to be paid upon execution of title documents. The appellant took possession of the property in part performance, but the respondents failed to execute the title documents. The appellant sought specific performance, while the respondents raised a limitation defence. The Punjab and Haryana High Court declined to decide the limitation issue and refused specific performance, citing delay and the rise in land prices as grounds for hardship. The Supreme Court held that the High Court exercised its discretion on wrong principles by not addressing the limitation question and by refusing specific performance on the basis of hardship. Consequently, the High Court's order was set aside and the matter remanded for a merits determination.

Issues considered

Whether the appellant is entitled to specific performance of the sale agreement.
Whether the claim is barred by the limitation period under the Limitation Act.
Whether the High Court erred in refusing specific performance on the ground of hardship without deciding the limitation issue.

Legislation cited

Indian Contract Act, 1872
Limitation Act, 1963s. Article 54

Subjects

specific performanceagreement of salelimitationpart performancejudicial discretionhardshipcontract law

Judgment

AJAIB SINGH
A
v.
GURBAX SINGH & ORS.

NOVEMBER 17, 1987

[SABYASACHI MUKHARJI AND G.L. OZA, JJ.) B

Indian Contract Act, 1872: Agreement of sal~Specific perform-
ance of-Major portion of sale price paid by buyer-Possession of
property with buyer in part performance of agreement-Documents of
title not executed-Limitation bar pleaded-Held High Court erred in
denying specific performance on account of hardship without deciding C
whether claim was barred by limitation.

Under an agreement of sale entered into by respondents the appel-
lant had paid the major portion of the agreed price long time ago and
the balance thereof that was to be paid at the time of execution of the
documents was a sum of Rs. 75 only. Possession of the premises was with D
the' appellant for all these years in part performance of the agreement.

Upon failure of the respondents to execute documents of title, the
appellant sought specific performance of the agreement. The respon-
dents canvassed the question of limitation before the High Court. The
High Court, however, without deciding that question took the view that E
due to passage of time prices of lands had gone up sky high and it would
be unjust to enforce the agreement of sale.

Allowing the appeal by special leave,

HELD: The High Court exercised discretion on wrong principles. F
Without deciding the question whether the claim of the plaintiff was
!>-
barred by limitation or not it proceeded to refuse to grant the relief on
the ground that there has been good deal of delay and the partieswould
suffer if specific performance of the agreement was granted. This
principle was not applicable to the facts of the case and the exercise of
discretion was not proper. The matter remanded to the High Court for G
decision in merits. [UOOG; E; llOlB)

Madamsetty Satyanarayana v. G. Yellogi Rao & Ors., [1965) 2
SCR 221; Dr. Jiwan Lal & Ors. v. Brij Mohan Mehra & Anr., [1973] 2
SCR 230 and Debendra Nath Manda! v. Sakhilal Kar & Ors., AIR 1950
Calcutta 526, referred to. H

1099
I 100 SUPREME COURT REPORTS [ !988] I S.C.R.

A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3066 f-
of 1987.

From the Judgment and Order dated 9.7.1986 of the Punjab and
Haryana High Court in R.S. A. No. 163 of 1978.

B Mala Ram Ghana and Dalveer Bhandari for the Appellant.
't
M.S. Gujral and Dr. Meera Aggarwal for the Respondents.

The Judgment of the Court was delivered by

SABYASACHI MUKHARJI, J. Special leave granted.
--
c ·'i -
The High Court in its judgment and order dated 9th July, 1986,
has observed that the question of limitation has been canvassed before
the High Court. The High Court expressed the view that there was a
lot of conflict between the various High Courts on the interpretation of
D Article 54 of the Limitation Act which governed the point of limita-
tion. The High Court, however, did not decide this question and
expressed the view that due to passage of time prices of lands had gone
up sky-high and it would be unjust to enforce the agreement of sale
entered into. In other words, it appears that without deciding the
question whether the claim of the plaintiff was barred by limitation or ¥
E not, the High Court exercised its discretion in refusing to grant the·
relief on the ground that there has been good deal of delay and the
parties would suffer if specific performance of the agreement was
granted. It appears from the facts that in this case the major portion of
the agreed price had been paid long time-ago and the balance thereof
was to be paid at the time of execution of the documents was a sum of
--
F Rs. 75 only. It further appears that possession of the premises was with
the appellant for all these years in part performance of the agreement. '...-\
In those circumstances, the principle upon which the High Court re-
fused to exercise its discretion, in our opi,nion, was not applicable and
such discretion was not proper. The High Court exercised discretion
on wrong principles. See in this connection M.adamsetty Satyanarayana
G v. G. Yellogi Rao & Two others, [1965] 2 SCR 221; Dr. Jiwan Lal &
Ors. v. Brij Mohan Mehra & Another, [1973] 2 SCR 230 and see also
the observation in Debendra Nath Manda/ v. Sakhilal Kar & Ors.,
AIR 1950 Calcutta 526. )---

In that view of the matter, we cannot sustain the exercise of
H discretion in the manner done by the High Court. This, however, does
AJAJil SINGH v. GURBAX SINGH (MUKHARJI, J.] 1101

not decide the matter because the High Court declined to go into the A
facts and decide the question of limitation on merits, the High Court
took the view in exercise of its discretion. Since we are not sustaining
the High Court's exercise of discretion hence the order and the Judg-
ment of the High Court are set aside but the matter is remanded to the
High Court for its decision on the merits. The matter should be dis-
8
posed of by the High Court as early as possible. The appeal is accord-
~ ingly allowed with no order as to costs.

P.S.S. Appeal allowed.