Suit Barred by Limitation - Begin When Acknowledgment of refusal by the party seeking specific performance – Supreme Court

In a significant legal verdict, the Supreme Court of India has ruled on a contentious land sale dispute, declaring that the suit for specific performance of an agreement to sell is barred by limitation. The judgment, delivered by a bench of the highest court, has far-reaching implications for similar cases across the country.

The dispute revolved around an agreement to sell land, and the key issue at hand was the limitation period for filing a suit for specific performance. The court examined various aspects of the case, including the interpretation of agreement terms, the conduct of the parties involved, and the crucial date for the commencement of the limitation period.

The judgment stated, "Whether suit barred by limitation – Applicability of Article 54 of the Limitation Act, 1963 – Date of commencement of limitation period – Notice of refusal – Acknowledgment of refusal by the party seeking specific performance – Interpretation of agreement terms – Parties' conduct – Refusal to perform the agreement – Suit filed beyond the prescribed limitation period – Suit for specific performance barred by limitation."

Additionally, the court addressed the issue of refund of the advance payment made by the plaintiff. The plaintiff had paid Rs. 1,00,000/- as an advance in the land sale agreement. However, given the court's ruling on the limitation period, the plaintiff sought a refund of the advance.

The judgment further noted, "Refund of advance sought – Payment of Rs. 1,00,000/- as advance – Expenses incurred by the plaintiff in obtaining layout plan approval – Decree for refund of Rs. 1,00,000/- with interest not justified – Exercise of power under Article 142 of the Constitution of India – Award of Rs. 50,00,000/- to the plaintiff – Direction to pay within six months – Liability to pay interest at 8% per annum on the awarded amount in case of non-payment within the stipulated time frame."

The decision, while clarifying the legal position on suits for specific performance, also emphasizes the importance of adhering to the prescribed limitation period in such cases. Furthermore, it highlights the court's commitment to ensuring justice by awarding a substantial amount to the plaintiff as compensation for the failed land sale agreement.

Date of Decision: September 5, 2023

VALLIAMMAI vs K.P. MURALI AND OTHERS      

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