Holding

The suit for specific performance was filed within the limitation period; time is not the essence of the contract unless expressly stipulated, so the appeal is dismissed.

Summary

Thimmappa (appellant) had executed two sale deeds transferring a property to Siddaramakka (respondent) and a reconveyance agreement dated July 20, 1968, stipulating that if the respondent repaid Rs.5,000 within eight years, she could have the sale deed executed in her favour. The respondent offered payment in June 1976, but the appellant refused to receive it and to execute the deed, even after a notice from the sub‑registrar on July 19, 1976. A suit for specific performance was filed on July 20, 1976. The trial court held the suit timely; the appellate court reversed, deeming time as the essence of the contract and declaring the suit barred. The Karnataka High Court set aside the appellate decree, restoring the trial court’s decision. The Supreme Court held that unless a contract expressly makes time the essence, the limitation for specific performance begins from the date of refusal to execute the deed, i.e., July 19, 1976, and the suit was filed within that period. Consequently, the appeal was dismissed.

Issues considered

Whether time is the essence of the reconveyance contract under the Limitation Act, 1963.
When does the limitation period for a suit for specific performance commence under Schedule Article 54 of the Limitation Act, 1963?
Whether the suit filed on July 20, 1976, is barred by limitation.
Whether the High Court was justified in interfering with the appellate court’s decree.

Legislation cited

Code of Civil Procedure, 1908s. Section 11
Limitation Act, 1963s. Schedule Article 54

Subjects

specific performancelimitation periodtime is essencereconveyance agreementcontract lawcivil procedurehigh court interference

Judgment

'\

D-5. THIMMAPPA A
v.
SIDDARAMAKKA

MARCH 29, 1996

[K. RAMASWAMY AND G. B. PATTANAIK, J.I.[ B

Docun1ents :

Deed of reconveyance-Suit for specific pe1forma11ce-Limita-
tion--Deed of reconveyance stipulating that in the event of the respondent- c
vendor repaying the amount within 8 ycai:f, she would be entitled to have the
sale deed executed and registered in lier /avow-Respondent approached the
appellant within time but latter declined to facilitate registration of sale
deed-Suit by re;pondent for specific pe1jom1ance-T1ial Court decreed the
suit holding that the respondent had offered payment within the limita-
tion--Fin;t appellate court reversed the decree holding that tinie was the D
essence of contract and as respondent had not obtained reconveyance within
8 years period of limitation expired by efflux of time-High Court set aside
decree of appellate cowt and restored that of Ilia/ court-Held, unless the
deed of agreement of sale stipulated a date for perfomzance time is not always
essence of tfze contract-Respondent had offered the payment of the amount E
before the expil)' of the date of conveyance but the appellant had refused to
pe1fonn his pait-Cause of action arose 011 expi1y of 8 years from date of
execution of later sale deed dated 20. 7.1973--Appellalll by conduct refused to
execute sale deed 011 19. 7.1976--Suit was filed on 20. 7.1976, within limitati011
~ ji-om date of rcfu.rnl i.e. 19.7.1976.
F
Liniitation Act, 1963 :

Schedu/e-A1ticle 5~Suit for .1pecific peifo11nance--Limitatio11--He/d
/imitation for specific pe1fonnance begins to 1u11 jimn the date flXed in the
contract or fronz the date of refusal to execute the sale deed.
G
·' Code of Civil Procedure, 1908 :

S. Jiiii-Second appeaf-Power of High Court to inte1fere with the decree
of appellate court and to consider relevant circu111stantial evidence-Dis-
cussed. H
1045
1046 SUPREME COURT REPORTS [1996] 3 S.C.R.

-A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7054 of
1996. .. •

From the Judgment and Order dated 23.1.95 of the Karnataka High
Court in R.S.A. No. 6 of 1988.

B S.S . .lavali and E.C. Vidya Sagar for the Appellant.

Ms. S. Janani for the Respondent.

The following Order of the Court was delivered :

C Leave granted.

We have heard learned counsel on both sides.

The appellant had two sale deeds dated April 24, 1990 and July 20,
1968 executed .by the respondent transferring the schedule property. On
D the later date, i.e., July 20, 1968, an agreement of reconveyance was also
executed by the appellant with a stipulation that in the event of the
respondent repaying Rs. 5,000 within eight years from that date in one
lump sum, she would be entitled to have the sale deed executed and
registered in her favour. It is the case of the respondent that before the
E expiry of eight years, some time in June 1976, she had approached the
appellant but h.e avoided the reconveyance. Consequently, she ~equested
her lawyer to issue a notice which came to be issued to the appellant to be
present before the sub-Registrar to receive the amount and execute the
sale deed but he failed to do that. On July 19, 1976, the sub-Registrar had
issued notice calling upon the appellant to he present in the sub-Registrar's
F office. Although he received the notice, he was not present to receive the
amount and facilitate registration of the sale deed on July 20, 1976. Con-
sequently, the suit for specific performance came to be filed.

The trial Court, after adduction of evidence by both the parties had
accepted the pica of the respondent that she had offered payment within
G the limitation but Thimmappa had avoided the receipt thereof. The appel-
late Court reversed the decree on the finding that the time is the essence
of contract. The deed of reconveyance stipulates eight years period from
the date of execution of the sale deed and since the respondent had not
obtained re-conVeyance \Vil hin that period, the period of limitation expired
H by efflux of time. Therefore, the suit was barred by limitation. The High
D.S. THIMMAPPAv. SIDDARAMAKKA 1047

Court of Karnataka in Second Appeal No. 6 of 1988 by judgment and A
decree dated .I anuary 23, 1995 reversed the decree of the appellate Court
and restored that of the trail Court. Thus this appeal by special leave.

Shri Javali, learned senior counsel for the appellant, contended that
in view of the specific recital in the dead of reconveyance that the respon-
dent had lo have the reconveyance executed within eight years from July B
20, 1968 and since she had not had the conveyance executed, the suit is
barred by limitation. We find no force in the contention.

It is settled law that unless the deed of agreement of sale stipulated
a date for performance, time is not always essence of the contract. It would C
be seen that Thimmappa had the land purchased from the respondent and
there was an ab'feement of reconveyance on condition that the respondent
should return the consideration paid under the sale deeds, viz., Rs. 5,000
within eight years from that date. The appellant had gone to the extent of
even denying the executing of reconveyancc. Therefore, the High Court has D
gone into the question of the probability of the respondent approaching
the appellant for reconveyance before the expiry of the limitation. The
High Court has, therefore, rightly gone into the question whether there was
an agreement of reconveyance and whether the respondent had performed
her part of the contract in seeking reconveyance. That being the material
questions which hinge upon the discretion to be exercised by the Court to E
enforce for specific performance of the contract, the appellate Court had
not adverted to that material part. But merely it relied upon the plea of
limitation. Under those circumstances, the High Court has not committed
any error of law in interfering with the decree of the appellate Court and
considering relevant circumstantial evidence that unless the respondent F
had in the first instance approached and the appellant avoided the receipt
of the consideration and execution of sale deed, the respondent had no
occasion to approach an advocate to get the notice issued asking the
appellant to be present before the Sub-registrar for .execution of sale deed.
Under Article 54 of the Schedule to the Limitation Act 21 of 1963,
limitation for specific performance beings to run from the date fixed in the G
contract or for the date of refusal to execute the sale deed. Since time is
not the essence of the contract, the respondent had offered the payment
• of the amount before the expiry of the date of reconveyance but the
appellant had refused to reconvcy the same. The cause of action arose an
expiry of eight year from the date of execution of later sale deed, i.e. July H
µ

1048 SUPREME COURT REPORTS [1996J 3 S.C.R.

A 20, l 973. The appellant by conduct refused to execute the sale deed on July
19, 1976, the suit was filed on July 20, 1976. The suit was filed within ~ •
limitation from the date of refusal, i.e., July 19, 1976, i.e., next day. ll is not
a case of appreciation of evidence by the High Court in Second Appeal
but one of drawing proper inference from proved facts which the first
appellate court has failed in law to draw proper inference frnrn proved
B facts and non application of law in the proper perspective. We, therefore,
hold that the suit was filed within limitation. We do not find any illegality
w;.irranting our interference.

The appeal is accordingly dismissed. No costs. \,
c R.P. Appeal dismissed.

•