Calcutta High Court Orders Execution of Sale Deed, Holds Limitation Does Not Bar Specific Performance of Contract
Safiya Malik
A division bench of the Calcutta High Court, comprising Justice Sabyasachi Bhattacharyya and Justice Uday Kumar, has allowed an appeal seeking the specific performance of a contract for the sale of a garage space. The High Court set aside the decision of the Fourth Bench of the City Civil Court at Calcutta, which had dismissed the suit on the grounds of limitation and decreed the counterclaim for eviction. The High Coourt held that the suit was filed within the legally prescribed timeframe and directed the execution of a registered sale deed in favor of the plaintiff upon payment of the outstanding balance.
The dispute arose from an agreement for the sale of a garage space. The plaintiff claimed that an oral agreement was made on June 12, 1995, between him and Sukumar Dutta, the predecessor-in-interest of the defendants, for the sale of the suit property. The plaintiff contended that on the same date, he paid ₹10,000 as advance consideration and ₹40,000 as a loan, which was later adjusted against the sale price. These transactions were supported by money receipts, marked as Exhibits 1 and 2.
The agreement was reduced to writing on October 16, 1995, and was marked as Exhibit-3. A garage plan was also handed over to the plaintiff, marked as Exhibit-4. Additionally, on July 21, 1997, the plaintiff purchased a non-judicial stamp paper to complete the transaction, which was marked as Exhibit-5. However, before the sale deed could be executed, Sukumar Dutta passed away on July 25, 1997. The plaintiff alleged that the defendants refused to honor the agreement, prompting him to file Title Suit No. 1085 of 1999 for specific performance on June 25, 1999.
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During the pendency of the suit, Defendant Nos. 1 and 2 executed a registered sale deed on April 26, 2004, conveying their 2/3rd share of the property to the plaintiff. The deed explicitly acknowledged that out of the agreed sale price of ₹1,05,000, the plaintiff had already paid ₹1,00,000, leaving only ₹5,000 outstanding.
The trial court dismissed the suit on the ground that it was barred by limitation under Article 54 of the Limitation Act, 1963, and decreed the counterclaim for eviction against the plaintiff.
During the appeal, the respondent’s counsel argued that only a single appeal had been preferred against both the dismissal of the suit and the counterclaim decree and that since a counterclaim has independent status equivalent to a decree, the plaintiff was required to elect which decree he was challenging.
The plaintiff’s counsel clarified that the appeal was specifically against the dismissal of the suit for specific performance. It was argued that the trial court erred in holding that the suit was time-barred, as the agreement did not fix any date for execution of the sale deed. The plaintiff contended that time was not the essence of the contract and that the six-month period mentioned in the agreement applied only to the completion of construction and handing over possession, not the execution of the sale deed.
The respondent’s counsel challenged the authenticity of the agreement, citing handwritten interpolations. The respondent further argued that the ₹40,000 paid by the plaintiff was a loan, not part of the sale consideration. It was also contended that the plaintiff drafted a sale deed in favor of his wife, mentioning a different purchase price, which was inconsistent with the agreement.
The High Court examined the agreement for sale and held that the six-month clause in the contract applied to the completion of construction and handing over possession in a habitable condition, not to the execution of the sale deed. The court stated:
“The six months’ stipulation qualified not the execution of the deed of conveyance but the completion of the construction and handing over of possession to the purchaser in habitable condition.”
It was further noted that the plaintiff was put in possession on May 28, 1999, and that the suit was filed within three years of the first refusal by the defendant to perform the contract. Thus, the court concluded that the suit was not time-barred under Article 54 of the Limitation Act.
The court found that ₹10,000 was paid as an advance consideration on June 12, 1995. It was further recorded that ₹40,000, though described as a loan, was later adjusted against the purchase price. The registered sale deed executed by Defendant Nos. 1 and 2 in 2004 admitted that the plaintiff had already paid ₹1,00,000 towards the agreed sale price. No evidence was presented by the respondent to show that the ₹40,000 loan was ever repaid, strengthening the plaintiff’s claim that it was adjusted as part of the consideration.
The court rejected the respondent’s claim that the agreement contained fraudulent interpolations, stating that:
“Each of the handwritten insertions is either accompanied by the short signature of the parties against such insertions individually, or by continuous signature of the parties on the margin covering the portions of the handwritten insertions.”
The court also dismissed the argument that the vendor did not understand English, noting that he had executed multiple agreements in English during his lifetime.
The respondent contended that the appeal was not maintainable as the plaintiff had not separately appealed against the counterclaim decree for eviction. However, the court ruled that this did not bar the plaintiff’s claim for specific performance, stating:
“Even if the eviction decree is executed, upon the plaintiff obtaining a decree of specific performance, he would become the absolute owner of the suit property, rendering the eviction decree inoperative.”
The High Court allowed the appeal and directed the plaintiff to deposit ₹1,667, the remaining portion of the balance consideration, with the trial court within two months. Upon such deposit, the respondent was directed to execute a registered sale deed in favor of the plaintiff within one month. If the respondent failed to comply, the plaintiff was entitled to execute the decree through court intervention.
The court also ruled that the matter would not be remanded to the trial court, citing Order XLI Rule 24 of the CPC, since all relevant issues had already been decided. It was noted that the trial court had already framed and determined all germane issues, and that unnecessary remand would lead to further delay.
The appeal was allowed on contest, setting aside the judgment of the trial court. The plaintiff was granted specific performance of the agreement dated October 16, 1995, to the extent of the 1/3rd share of the defendant. It was recorded that out of the total consideration of ₹1,05,000, an amount of ₹1,00,000 had already been paid, with only ₹1,667 remaining. The respondent was directed to execute the sale deed in favor of the plaintiff upon receipt of this amount.
In the event of non-compliance, the plaintiff was permitted to have the deed executed through legal proceedings. There was no order as to costs.
Advocates Representing the Parties
For the appellant: Mr. Dipankar Dhar and Mr. S. Nath, Advocates
For the respondents: Mr. B. N. Ray and Ms. Shetparna Ray, Advocates
Case Title: Prasanta Kumar Chakraborty v. Sri Somnath Dutta & Smt. Sabita Dutta alias Saba Haque
Case Number: F.A. No. 87 of 2007 with CAN 3 of 2018 (Old No: CAN 1383 of 2018)
Bench: Justice Sabyasachi Bhattacharyya and Justice Uday Kumar
[Read/Download order]
