Sabbir (Dead) Through LRs vs. Anjuman (Since Deceased) Through LRs
Background
In 1975, the appellants (sellers) agreed to sell a property to the respondents (buyers) for Rs. 6,000, with Rs. 1,000 paid as earnest money. Under the agreement, the sellers had 8 days to obtain government permission to sell, and the buyers then had 15 days after being informed of that permission to complete the sale deed. The sellers never applied for permission, and more than five years later, in 1981, the buyers sued for specific performance of the contract. The case went through the Trial Court, First Appellate Court, High Court, and even a prior round before the Supreme Court (which had remanded it), with the High Court finally ruling in the buyers' favour in 2018, prompting this appeal by the sellers' legal heirs.
Decision Breakdown
The Supreme Court held that once the sellers failed to apply for permission within the first 8 days as agreed, the responsibility shifted to the buyers to act promptly and assert their rights. They could not simply wait indefinitely. Because the buyers waited over five-and-a-half years without ever formally demanding performance or showing they were "ready and willing" to pay the balance and complete the sale (a requirement under the law for such suits), their 1981 suit was filed well beyond the 3-year limitation period prescribed by the Limitation Act, 1963. The Court restored the earlier First Appellate Court ruling dismissing the suit, while ordering the sellers to refund the original Rs. 1,000 earnest money as an inflation-adjusted lump sum of Rs. 1,50,000.
Lesson Learnt
In contracts for sale of property, a buyer cannot wait indefinitely to sue for enforcement after the seller defaults: the buyer must act with reasonable diligence and clearly show, including in their own court pleadings, that they were ready and willing to perform their part, or the claim can be barred by limitation even if the seller was originally at fault.