[Cites 12, Cited by 0]
Madhya Pradesh High Court
Harcharan Singh & Ors. vs Phoolwati & Ors. on 2 February, 2026
Author: Gurpal Singh Ahluwalia
Bench: G. S. Ahluwalia
NEUTRAL CITATION NO. 2026:MPHC-GWL:4333
1 FA-261-2004
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE G. S. AHLUWALIA
ON THE 2 nd OF FEBRUARY, 2026
FIRST APPEAL No. 261 of 2004
HARCHARAN SINGH & ORS. AND OTHERS
Versus
PHOOLWATI & ORS. AND OTHERS
Appearance:
Shri K.N. Gupta - Senior Advocate, assisted by Shri Santosh Agrawal, Shri Ankur
Maheshwari, and Sushri Suhani Dhariwal - Advocates for appellants.
Shri Ajay Chaturvedi - Proxy Counsel on behalf of Shri C.R. Roman - Advocate for
LRs. of respondent No. 1.
None for respondents No. 2(a) and 2(d).
Shri Saket Sharma - Advocate for respondents No. 2(b) and 2(c).
Shri Parth Dixit - Advocate for respondents No. 6, 7, and 9 to 12.
WITH
FIRST APPEAL No. 276 of 2004
KARTAR KAUR AND ORS.(DELETED) AND OTHERS
Versus
PHOOLWATI AND ORS. THROUGH LRS (A) SIYARAM AND OTHERS
Appearance:
Shri Parth Dixit - Advocate for appellants.
Shri Ajay Chaturvedi - Proxy Counsel on behalf of Shri C.R. Roman - Advocate for
LRs. of respondent No. 1.
Shri Santosh Agrawal - Advocate for respondents No. 6 and 7.
JUDGMENT
By this common judgment, First Appeal Nos. 261/2004 and 276/2004 shall
be decided.
2. First Appeal No. 261/2004 has been filed by plaintiffs, whereas First
Appeal No. 276/2004 has been filed by some of the defendants. Since the claim of
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appellants of both the cases is same, therefore, these appeals are being decided by
this common judgment.
3. Both the appeals have been filed against judgment and decree dated
31/07/2004 passed by 8th Additional District Judge, Gwalior, in Civil Suit No.
48A/1992, by which suit was partly decreed for permanent injunction, thereby
protecting the possession of plaintiffs, but the suit for specific performance of
contract was dismissed. Therefore, these appeals have been filed against the
dismissal of suit for specific performance of contract.
4. It is not out of place to mention here that while granting the decree of
permanent injunction, it has been observed that plaintiffs shall not be dispossessed
without following due procedure of law.
5. Original plaintiff is Labh Singh, who died during the pendency of the suit
and his legal representatives were brought on record, and the appeal is being
prosecuted by some of the legal representatives of Labh Singh, whereas defendant
Nos. 4, 11 and 12 are the widow and some of the children of late Labh Singh, and
defendant Nos. 5 to 10 are the wife of Guruvachan Singh and her children.
6. The facts necessary for disposal of both the appeals, in short, are that a
suit for specific performance of contract and permanent injunction was filed in
respect of agricultural land bearing Survey Nos. 355, 357, 402, 419, 421, 424/1,
424/2, 424/3, 404/1, 404/2, 606, 409/1/2, 409/6, 409/7, 425/1, 425/2, 425/3,
425/4, 425/5, 425/6, 428/1, 428/2, 434/1, 434/2, 1040 and 1108, situated in
village Jigsauli, Tehsil and District Gwalior. It is the case of plaintiffs that village
Jigsauli was a zamindari area and Mahavir Prasad Saxena was the Zamindar.
Original plaintiff was cultivating the land from the year 1960 on behalf of
Mahavir Prasad. On 13/11/1963, Mulua and Devkinandan purchased the aforesaid
land as well as Survey Nos. 555, 556, 557, 1110 and 1111 (these are not the
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disputed properties) from Mahavir Prasad Saxena for a consideration amount of
Rs. 10,000/-. Aforesaid amount of Rs. 10,000/- was taken by Mulua and
Devkinandan from original plaintiff Labh Singh, and possession of the disputed
land was also given to plaintiff on the ground that he can cultivate the same and
use it for himself. It was further agreed that in case if Mulua and Devkinandan fail
to return the amount within a period of three years, then for the aforesaid
consideration amount, they would execute a sale deed in favour of plaintiff. When
Mulua and Devkinandan could not repay the amount, then original plaintiff
requested Mulua and Devkinandan to execute the sale deed, and accordingly,
Mulua and Devkinandan took back the agreement to sell and prepared the draft of
the sale deed. Devkinandan signed the draft of the sale deed, but Mulua refused to
sign the same, as a result the sale deed could not be executed. It was alleged that
Mulua and Devkinandan have already sold Survey Nos. 1110 and 1111 to the
sons of Sobat Singh by registered sale deed dated 30/10/1973, and when it was
objected by plaintiff, then Sobat Singh sold Survey No. 1165 to Guruvachan
Singh and Palvinder Singh. Similarly, Mulua and Devkinandan sold Survey Nos.
555, 556 and 557 to one Kishori Dhobi, and on objection raised by plaintiff,
Kishori Dhobi executed a sale deed in favour of Guruvachan Singh and Palvinder
Singh in respect of Survey No. 1166. Thus, it was claimed that plaintiff is in
possession of the disputed land except Survey Nos. 555, 556, 557, 1110 and 1111.
In order to resolve the dispute, matter was sent to arbitration and Sushil Bhargava
and Abdul Gafur Patel were appointed as Arbitrators. Arbitrators took a decision
on 16/11/1975 that Mulua and Devkinandan do not have any right or title in the
land in dispute and even in future they will not have any such right, and the said
land is in possession of plaintiff and he would continue to remain in possession.
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The registration charges, which were borne by Mulua and Devkinandan, were to
be returned by plaintiff to them, and according to plaintiff, the same has also been
returned. It was further held that plaintiff shall have a right to get the sale deed
executed within a period of 20 years. It was submitted that since the arbitration
award was acceptable to all the parties, accordingly, Mulua and Devkinandan,
apart from Panchas and plaintiff, signed the arbitration award, which is binding
on the parties. It was further pleaded that Mulua has expired and defendant No. 1
Phoolwati is the widow of Mulua. As per the arbitration award, plaintiff requested
the defendants to execute the sale deed, but they are avoiding to do so. A notice
dated 19/08/1992 was also given, but still defendant Nos. 1 and 2 are not
executing the sale deed. Although plaintiff is in possession of the property in
dispute, defendant Nos. 1 and 2 are intending to interfere with the peaceful
possession of plaintiff, for which they have no right or title. Defendants have also
initiated proceedings for getting their names mutated in the revenue
records. Therefore, it was prayed that a decree for specific performance of contract
be passed, or in the alternative, it was pleaded that since plaintiffs are in
possession of the property from the year 1960, therefore, they have acquired the
Bhumiswami rights and on that ground also they are liable to be declared as
Bhumiswami. A decree for permanent injunction was also sought to the effect that
defendant Nos. 1 and 2 should not interfere with the peaceful possession of
plaintiffs and they should not try to get their names mutated in the revenue
records.
7. Defendants No. 4 to 12, who are some of the legal representatives of
original plaintiff Labh Singh and are the legal representatives of Guruvachan
Singh, filed their written statement, and also claimed that they are also in
possession of the property in dispute along with Labh Singh from the year 1960,
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and original plaintiff Labh Singh also wanted to get a sale deed executed in his
favour along with Guruvachan Singh and Palvinder Singh. Accordingly, plaint
was amended and aforesaid stand taken by defendants No. 4 to 12 was denied in
the plaint.
8. Defendant No. 1 - Phoolwati filed her written statement and admitted the
identity of disputed property, but it was claimed that husband of defendant No. 1,
namely Mulua, was in possession of the said land and he is the owner, and after
the death of Mulua, defendant No. 1 is the owner and in possession of the same. It
was admitted that Mahavir Prasad Saxena was the Zamindar, but the averment
that original plaintiff is in cultivating possession of the land in dispute was denied.
It was claimed that husband of defendant No. 1, Mulua, had purchased the land in
dispute from Mahavir by a registered sale deed dated 13/11/1963, and since then,
he was in possession. It was admitted that husband of defendant No. 1 has sold
Survey Nos. 1110 and 1111 to the sons of Sobat Singh. It was also admitted that
husband of defendant No. 1 has sold Survey Nos. 555, 556 and 557 to Kishori
Dhobi. It was claimed that defendant No. 2 has no right to alienate the property
without getting the undivided property partitioned. The factum of binding effect of
the arbitration award was also denied. It was claimed that the arbitration award is a
forged document. It was further claimed that although defendant No. 1 is the wife
of Mulua, but Mulua was also survived by his four sons, who are also his legal
representatives, but none of them have been impleaded as parties, therefore, suit is
barred on account of non-joinder of necessary parties. Accordingly, it was prayed
that the suit filed by plaintiff be dismissed.
9. Defendant No. 3 - State Government also filed its written statement,
which was formal in nature.
10. Defendants No. 4 to 12 filed their written statement and admitted the
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6 FA-261-2004
plaint averments and further claimed that original plaintiff Labh Singh and father
of defendants No. 6 to 10, namely Gurvachan Singh, and defendant No. 11 were
also in joint cultivating possession of the land in dispute along with original
plaintiff Labh Singh. It was also claimed that even Labh Singh was also intending
to get the sale deed executed in favour of Gurvachan Singh and defendant No. 11
also.
11. The Trial Court, after framing issues and recording evidence, dismissed
the suit by holding that since the arbitration award was not made rule of the Court,
therefore, it is a waste piece of paper. However, it was held that on 13/11/1963,
Mulua and Devkinandan had taken Rs. 10,000/- from original plaintiff Labh
Singh, and it was agreed upon that in case if Mulua and Devkinandan fail to return
the amount within a period of three years, then they would execute a sale deed in
favour of plaintiff. It was also held that on 16/11/1975, an arbitration award was
passed in which it was held that Mulua and Devkinandan are no more the owners
of property in dispute. So far as issue whether the suit is premature is concerned,
it was held that it is not required to be answered in the light of paragraph 31 of the
impugned judgment and decree. It was also held that original plaintiff and his
legal representatives are in continuous cultivating possession from the year 1963.
It was held that plaintiffs have not acquired any Bhumiswami rights. It was held
that defendants are interfering with the peaceful possession of plaintiffs. However,
prayer for specific performance of contract was dismissed. It was also held that
Mulua, and after his death, his legal representatives are not in cultivating
possession of the property in dispute, and the suit is not bad on account of non-
joinder of necessary parties. It was also held that arbitration award is not a forged
document. So far as the share of defendants No. 4 to 12 is concerned, it was
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decided in accordance with column 46 of the impugned judgment, according to
which defendants No. 4 to 12 will also be entitled to claim their share as per the
provisions of Hindu Succession Act.
12. Challenging the judgment and decree passed by the Court below, it is
submitted by counsel for plaintiffs that once the Court below had come to a
conclusion that an arbitration award was passed, then merely because it was not
made a rule of the Court, it cannot be treated as a waste piece of paper. It is further
submitted that even otherwise original plaintiff had acquired the rights of an
occupancy tenant, and thus, had also acquired Bhumiswami rights, and under
these circumstances, plaintiffs are entitled to a decree of permanent injunction.
13. Per contra , counsel for respondents No. 1 and 2 supported the findings
recorded by the Trial Court, whereas counsel for respondents No. 4 to 12 has
adopted the submissions made by counsel for plaintiff.
14. Heard learned counsel for parties.
15. In the present case, four questions are required to be adjudicated, i.e., (i)
whether an arbitration award dated 16/11/1975 is a waste piece of paper as it was
never made a rule of the Court; (ii) whether plaintiffs have become the occupancy
tenants resulting in Bhumiswami rights, (iii) whether the suit filed by plaintiff
after 19 years of arbitration award can be said to be a suit within a reasonable
period, and (iv) whether plaintiffs are entitled for a decree for permanent
injunction?
Whether an arbitration award dated 16/11/1975 is a waste piece of paper
as it was never made a rule of the Court?
16. Counsel for appellants/plaintiffs has relied upon the judgment passed by
the Supreme Court in the case of Satish Kumar and others Vs. Surinder Kumar
NEUTRAL CITATION NO. 2026:MPHC-GWL:4333
8 FA-261-2004
and others, reported in AIR 1970 SC 833 , and submitted that even if the award
was not made a rule of the Court, still the same would be final and binding on the
parties and persons claiming under them, respectively.
17. The Supreme Court in the case of Satish Kumar (supra) has held as
under:
"13. In view of the above decisions it is not necessary to refute the
other reasons given by both the Full Benches, but out of respect for the
learned Judges we deal with them. We may mention that no comment
was made in these cases on the provisions of Para 7 of Schedule 1 to
the Act. This para provides:
"7. The award shall be final and binding on the parties and
persons claiming under them respectively."
If the award is final and binding on the parties it can hardly be said that
it is a waste paper unless it is made a rule of the Court."
Thus, it is clear that in a privately agreed arbitration if an award is passed
and if it is signed by all the parties, then whether or not it is made a rule of the
Court, still it will be binding on the parties to the arbitration award, and such an
arbitration award cannot be treated as a waste piece of paper.
18. Under these circumstances, when the Trial Court had given a specific
finding that arbitration had taken place and on 16/11/1975, an arbitration award,
Exhibit P-1C, was passed which was signed by all the parties, including Mulua
and Devkinandan, then it is held that such an arbitration award cannot be treated
as a waste piece of paper, and therefore, finding recorded by the Trial Court that
since the arbitration award was not made a rule of the Court, therefore, it is a
waste piece of paper, is hereby set aside , and accordingly, it is held that the
arbitration award dated 16/11/1975, Exhibit P-1C, is binding on the parties,
according to which the sale deed was to be executed within a period of 20 years,
and it was held that Mulua and Devkinandan have no right or title in the property
in dispute.
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Whether the plaintiffs have become the occupancy tenants resulting in
Bhumiswami rights?
19. So far as the question whether the plaintiff has acquired Bhumiswami
rights in the light of Sections 169 and 190 of the M.P. Land Revenue Code or not
is concerned, Section 169 of M.P.L.R. Code, as it existed prior to 24/10/1980,
reads as under:
"169 Unauthorised leases- If a Bhumiswami leases out for any period
whatsoever any land comprised in his holding in contravention of
section 168, the rights of an occupancy tenants shall thereupon accrue
to the lessee in such land:
Provided that nothing in this section shall apply to a land comprised
in the holding of a Bhumiswami belonging to a tribe which has been
declared to be an aboriginal tribe under sub-section (6) of section 165
and which is leased out by him."
However, by amendment dated 24.10.1980, certain changes were made,
and Section 169 of M.P.L.R. Code reads as under:
"169. Unauthorised lease etc. - If a Bhumiswami-
(i) leases out for any period any land comprised in his holding in
contravention of section 168; or
(ii) by an arrangement which is not a lease under sub-section (1)
of section 168 allows any person to cultivate any land comprised
in his holding otherwise than as his hired labour and under that
arrangement such person is allowed to be in possession of such
land for a period exceeding two years without being evicted in
accordance with section 250;
the rights of an occupancy tenant shall-
(a) in the case of (i) above, thereupon accrue to the lessee in such
land ; and
(b) in the case of (ii) above, on the expiration of a period of two
years from the date of possession; accrue to such person in that
land:
Provided that nothing in this section shall apply to a land comprised
in the holding of a Bhumiswami belonging to a tribe which has been
declared to be an aboriginal tribe under sub-section (6) of section 165
and which is leased out by him or in respect of which he has made an
arrangement as aforesaid, as the case may be."
It is not out of place to mention here that by M.P. Act 23 of 2018, Section
169 of M.P.L.R. Code has been omitted.
20. Section 190 of M.P.L.R. Code reads as under:
"190. Conferral of Bhumiswami rights on occupancy tenants --
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(1) Where a Bhumiswami whose land is held by an occupancy tenant
†[belonging to any of the categories specified in subsection (1) of
section 185 except in items (a) and (b) of clause (i) thereof | fails to
make an application under sub-section of section 189 within the period
laid down therein, the rights of a Bhumiswami shall accrue to the
occupancy tenant in respect of the land held by him from such
Bhumiswami with effect from the commencement of the agricultural
year next following the expiry of the aforesaid period.
(2) Where an application is made by a Bhumiswami in accordance with
the provisions of sub-section (1) of section 189, the rigts of a
Bhumiswami shall accrue to the occupancy tenant in respect of the land
remaining with him after resump-tion, if any, allowed to the
Bhumiswami with effect from the commencement of the agricultural
year next following the date on which the application is finally
disposed of.
[(2-A) Where the land of a Bhumiswami is held by an occupancy
tenant other than an occupancy tenant referred to in sub-section (1), the
rights of a Bhumiswami shall accure to the occupancy tenant in respect
of such land.
(a) in the case of occupancy tenants of the categories specified in
items (a) and (b) of clause (i) of subsection (1) of section 185,
with effect from the commencement of the agricultural year next
following the commencement of the Principal Act;
(b) in any other case, with effect from the commencement of the
agricultural year next following the date on which the rights of an
occupancy tenant accrue to such tenant.]
(3) Where the rights of a Bhumiswami accrue to an occupancy tenant
under sub-section (1), [sub-section (2) or subsection (2-A)] such
occupancy tenant shall be liable to pay to his Bhumiswami
compensation equal to fifteen times the land revenue payable in respect
of the land in five equal annual in-stalments, each instalment being
payable on the date on which the rent payable under section 188 for the
corresponding year falls due and, if default is made in payment, it shall
be recoverable as an arrear of land revenue :
Provided that if from any cause the land revenue is suspended or
remitted in whole or in part in any area in any year the annual
instalment of compensation payable by an occupancy tenant holding
land in such area in respect of that year shall be suspended and shall
become payable one year after the last of the remaining instalments.
(4) Any occupancy tenant may at his option pay the entire amount of
compensation in a lump sum, and where an occupancy tenant exercises
this option, he shall be entitled to a rebate at the rate of ten percent.
(5) The amount of compensation, whether paid in lump sum or in
annual instalments, shall be deposited in such manner and form as may
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be prescribed by the occupancy tenant with the [Tahsildar], for
payment to the Bhumiswamı.
(6) Where the rights of a Bhumiswami in any land accrue to an
occupancy tenant under this section, he shall be liable to pay the land
revenue payable by the Bhumiswami in respect of such land with effect
from the date of accrual of such rights."
21. In the present case, it is the case of plaintiffs that since Mulua and
Devkinandan were not having funds for purchasing the property from Mahavir for
a consideration of Rs. 10,000/-, therefore, in the year 1963, they had taken Rs.
10,000/- from original plaintiff and had agreed that in case they fail to refund the
amount within a period of three years, then they would execute a sale deed in
favour of the original plaintiff, and possession of the land in dispute was also
given to original plaintiff in the year 1963, and since then he is in possession of
the said land. Thus, it is clear that it was not the case of the plaintiff that the land
in dispute was ever leased out to him by Devkinandan and Mulua.
22. Furthermore, an arbitration award, Exhibit P-1C, came into existence,
and it was held that Mulua and Devkinandan are no longer the owners of the
property in dispute, and they would execute the sale deed within a period of 20
years. Therefore, from 1975 onwards, plaintiff was in possession of the property
in dispute by virtue of the arbitration award, which can be equated with an
agreement to sell.
23. By amendment dated 24/10/1980, Section 169(2) of M.P.L.R. Code was
incorporated. This section cannot be said to have retroactive operation.
Furthermore, this section was also omitted in the year 2018. By making an effort
to take advantage of Section 169(2), it is submitted by counsel for
appellants/plaintiffs that if an "arrangement", which is not a lease under sub-
Section 1 of Section 68 allows any person to cultivate any land, for a period
exceeding two years without being evicted in accordance with Section 250, then
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the rights of occupancy tenant shall accrue on the expiration of period of two years
from the date of possession. It is submitted that since the plaintiff was placed in
possession by virtue of an "arrangement" arrived at between the parties in the year
1963, therefore, sub-Section 2 of Section 169 of M.P.L.R. Code would come into
picture, and thus, original plaintiff had acquired the rights of occupancy tenant
resulting in acquisition of Bhumiswami rights under Section 190 of M.P.L.R.
Code. However, it was fairly conceded by counsel for plaintiffs that amendment,
which was incorporated in the year 1980, was not having any retroactive effect.
24. Furthermore, after the arbitration award, Exhibit P-1C, was passed on
16/11/1975, possession of plaintiff did not remain under any "arrangement" but he
can be said to be in possession by virtue of an arbitration award, which in fact was
in the shape of agreement to sell because the arbitration award also required
Mulua and Devkinandan to execute the sale deed within a period of 20 years. In
view of Section 53-A of Transfer of Property Act, an intending purchaser who was
placed in possession by virtue of agreement to sell is entitled to protect his
possession, provided some acts were discharged by him as required under Section
53-A of Transfer of Property Act. Therefore, where an intending purchaser is
placed in possession by virtue of agreement to sell, then it is because of
independent right and not because of any "arrangement". Furthermore, Section
169 of M.P.L.R. Code was omitted in the year 2018. Even if the provisions of
Section 169(2) of M.P.L.R. Code are treated to be retroactive in operation, still the
same was omitted in the year 2018. Therefore, viewed from every angle, plaintiff
cannot take advantage of Section 169 of the M.P. Land Revenue Code. Thus, it is
held that neither the plaintiff became an occupancy tenant nor acquired
Bhumiswami rights as provided under Section 190 of the M.P. Land Revenue
Code. Accordingly, this second issue is also answered against the plaintiff.
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Whether the suit filed by plaintiff after 19 years of arbitration award can
be said to be a suit within a reasonable period?
25. Admittedly, an arbitration award can be set aside on the ground that it is
against the public policy or law of the land. Generally, time is not an essence in
the cases where an agreement to sell is executed in respect of an immovable
property, and in such circumstances, the suit for specific performance of contract
has to be filed within a reasonable period.
26. The Supreme Court in the case of Chand Rani (SMT) (Dead) by LRS.
Vs. Kamal Rani (SMT) (DEAD) by LRS, reported in (1993) 1 SCC 519 , has held
as under:-
"25. From an analysis of the above case-law it is clear that in the case
of sale of immovable property there is no presumption as to time being
the essence of the contract. Even if it is not of the essence of the
contract the Court may infer that it is to be performed in a reasonable
time if the condition are:
1. From the express terms of the contract;
2. from the nature of the property; and
3. from the surrounding circumstances, for example: the object of
making the contract."
27. The Supreme Court in the case of Azhar Sultana Vs. B. Rajamani and
others, reported in (2009) 17 SCC 27 , has held that the suit must be filed within a
reasonable time. For ascertaining reasonable time, conduct of parties would also
assume significance. It has also been held that when the suit was filed belatedly,
then plaintiff has failed to prove continuous willingness and readiness to perform
her part of the contract and is not entitled for grant of specific relief.
28. The Supreme Court in the case of Urvashi Aggarwal and another Vs.
Kushagra Ansal and others , reoprted in (2020) 17 SCC 774 , has held that
plaintiffs had not performed their part of agreement within a reasonable period and
silence maintained by plaintiffs for about 12 years amounted to abandonment of
agreement.
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29. The Supreme Court in the case of K.S. Vidyanadam and others Vs.
Vairavan, reported in AIR 1997 SC 1751 , has held as under:-
"9. Article 54 of the Limitation Act prescribes three years as the period
within which a suit for specific performance can be filed. The period of
three years is to be calculated from the date specified in the agreement
for performance or in the absence of any such stipulation, within three
years from the date the performance was refused.
10. It has been consistently held by the courts in India, following
certain early English decisions, that in the case of agreement of sale
relating to immovable property, time is not of the essence of the
contract unless specifically provided to that effect. The period of
limitation prescribed by the Limitation Act for filing a suit is three
years. From these two circumstances, it does not follow that any and
every suit for specific performance of the agreement (which does not
provide specifically that time is of the essence of the contract) should
be decreed provided it is filed within the period of limitation
notwithstanding the time limits stipulated in the agreement for doing
one or the other thing by one or the other party. That would amount to
saying that the time-limits prescribed by the parties in the agreement
have no significance or value and that they mean nothing. Would it be
reasonable to say that because time is not made the essence of the
contract, the time-limit(s) specified in the agreement have no relevance
and can be ignored with impunity? It would also mean denying the
discretion vested in the court by both Sections 10 and 20. As held by a
Constitution Bench of this court in Chand Rani v. Kamal Rani, [1993]
1 S.C.C. 519,
"it is clear that in the case of sale of immovable property there is no
presumption as to time being the essence of the contract. Even if it is
not of the essence of the contract, the court may infer that it is to be
performed in a reasonable time if the conditions are (evident)?: (1)
From the express terms of the contract; (2) from the nature of the
property; and (3) from the surrounding circumstances, for example, the
object of making the contract". In other words, the court should look at
all the relevant circumstances including the time-limit(s) specified in
the agreement and determine whether its discretion to grant specific
performance should be exercised. Now in the case of urban properties
in India, it is well-known that their prices have been going up sharply
over the last few decades - particularly after 1973*. In this case, the
suit property is the house property situated in Madurai, which is one of
the major cities of Tamil Nadu. The suit agreement was in December
1978 and the six months' period specified therein for completing the
sale expired with 15th of June, 1979. The suit notice was issued by the
plaintiff only on 11.7.1981, i.e., more than two years after the expiry of
six months' period. The question is what was the plaintiff doing in this
interval of more than two years? The plaintiff says that he has been
calling upon Defendants 1 to 3 to get the tenant vacated and execute
the sale deed and that the defendants were postponing the same
representing that the tenant is not vacating the building. The defendants
have denied this story. According to them, the plaintiff never moved in
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the matter and never called upon them to execute the sale deed. The
Trial Court has accepted the defendants' story whereas the High Court
has accepted the plaintiffs story. Let us first consider whose story is
more probable and acceptable. For this purpose, we may first turn to
the terms of the agreement. In the agreement of sale, there is no
reference to the existence of any tenant in the building. What it says is
that within the period of six months, the plaintiff should purchase the
stamp papers and pay the balance consideration whereupon the
defendants will execute the sale deed and that prior to the registration
of the sale deed, the defendants shall vacate and deliver possession of
the suit house to the plaintiff. There is not a single letter or notice from
the plaintiff to the defendants calling upon them to get the tenant
vacated and get the sale deed executed until he issued the suit notice on
11.7.1981. It is not the plaintiffs case that within six months, he
purchased the stamp papers and offered to pay the balance
consideration. Defendants' case is that the tenant is their own relation,
that he is ready to vacate at any point of time and that the very fact that
the plaintiff has in his suit notice offered to purchase the house with the
tenant itself shows that the story put forward by him is false. The
tenant has been examined by the defendant as DW-2. He stated that
soon after the agreement, he was searching for a house but could not
secure one. Meanwhile [i.e., on the expiry of six months from the date
of agreement], he stated, the defendants told him that since the plaintiff
has abandoned the agreement, he need not vacate. It is equally an
admitted fact that between December 15, 1978 and July 11, 1981, the
plaintiff has purchased two other properties. The defendants' consistent
refrain has been that the prices of house properties in Madurai have
been rising fast, that within the said interval of 2½ years, the prices
went up by three times and that only because of the said circumstance
has the plaintiff [who had earlier abandoned any idea of going forward
with the purchase of the suit property] turned round and demanded
specific performance. Having regard to the above circumstances and
the oral evidence of the parties, we are inclined to accept the case put
forward by Defendants 1 to 3. We reject the story put forward by the
plaintiff that during the said period of 2½ years, he has been repeatedly
asking the defendants to get the tenant vacated and execute the sale
deed and that they were asking for time on the ground that tenant was
not vacating. The above finding means that from 15.12.1978 till
11.7.1981, i.e., for a period of more than 2½ years, the plaintiff was
sitting quiet without taking any steps to perform his part of the contract
under the agreement though the agreement specified a period of six
months within which he was expected to purchase stamp papers, tender
the balance amount and call upon the defendants to execute the sale
deed and deliver possession of the property. We are inclined to accept
the defendant's case that the values of the house property in Madurai
town was rising fast and this must have induced the plaintiff to wake
up after 2½ years and demand specific performance."
30. Thus, it is clear that in case of an immovable property, generally the
time is never considered to be the essence of contract, but even when the time was
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16 FA-261-2004
not made an essence of contract, still suit for specific performance of contract has
to be filed within a reasonable time.
31. If the arbitration award is considered, then it is clear that it has fixed a
time limit of 20 years for execution of sale deed. The said award cannot be said to
be in accordance with the public policy or law of the land. The Arbitrators must
have fixed some reasonable period for execution of the sale deed and not 20 long
years.
32. According to plaintiffs, he was placed in possession in the year 1963 as
he had given Rs. 10,000/- to Mulaa and Devkinandan, and against those Rs.
10,000/-, original plaintiff is in possession of the land in dispute from the year
1963, i.e., for the last about 62 years. Even on the date of institution of the civil
suit, plaintiffs were already in possession of the land in dispute for the last 29
years, and on the date of arbitration award, i.e., 16/11/1975, original plaintiff was
already in possession for the last about 12 years, and original plaintiff was earning
his income from the said land. Thus, under no circumstance it can be held that
fixation of time of 20 years for getting the sale deed executed in the arbitration
award was in accordance with law.
33. Since the suit was not filed within a period of three years from the date
of execution of arbitration award or within a reasonable period thereof, this Court
is of considered opinion that as the time limit of 20 years fixed in the arbitration
award cannot be said to be in accordance with public policy or law of the land,
therefore, suit filed by plaintiff for specific performance of contract in the year
1992 was hopelessly barred by limitation.
Whether plaintiffs are entitled for a decree for permanent injunction or
not?
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17 FA-261-2004
34. Since plaintiffs have been found to be in possession of the property in
dispute, therefore, a decree for permanent injunction has been passed to the effect
that they shall not be dispossessed by defendants No. 1 and 2, except in
accordance with law. By no stretch of imagination, such a decree can be said to be
contrary to law as plaintiffs have failed to prove any right to retain the property.
35. Under these circumstances, this Court is of the considered opinion that
no case is made out for warranting interference.
36. Accordingly, judgment and decree dated 31/07/2004 passed by 8 th
Additional District Judge, Gwalior, in Civil Suit No. 48A/1992 is hereby
affirmed.
37. Appeals fail and are hereby dismissed.
(G. S. AHLUWALIA)
JUDGE
AKS
