Limitation in specific performance suits is a mixed question of fact and law requiring trial.

The Plaintiff filed a suit for specific performance of an Agreement to Sell (ATS) dated 20.04.2015 regarding the second floor of Plot No. 3, Anand Lok, New Delhi

The ATS was executed after Defendant No. 1 failed to repay a loan of Rs. 5 Crores.

Under the ATS, possession was to be handed over within 18 months (by 18.10.2016) upon execution of the sale deed and payment of the balance consideration.

Meanwhile, Defendant No. 1 mortgaged the property to Defendant No. 4, who took physical possession on 22.09.2018 under the SARFAESI Act.

The Plaintiff filed a Securitization Application before the DRT in 2018.

In 2024, after Defendants 2 and 3 initiated insolvency proceedings and Defendant No. 4 attempted to assign the loan, the Plaintiff issued a legal notice and subsequently filed this suit.

Defendant No. 4 raised preliminary objections regarding maintainability, alleging the suit was barred by limitation.

Whether the suit is ex-facie barred by limitation under Article 54 of the Limitation Act, 1963.

Whether the possession taken by a secured creditor (Defendant No. 4) constitutes a "refusal" of performance by the vendor to trigger the limitation period.

Whether the pendency of SARFAESI or IBC proceedings bars the present suit for specific performance.

The court applied Article 54 of the Limitation Act, 1963, which prescribes a three-year limitation period for specific performance, running from the date fixed for performance or, if no date is fixed, from the date the plaintiff has notice that performance is refused.

The court noted that limitation is generally a mixed question of law and fact.

It further considered Section 14 and Section 96 of the Insolvency and Bankruptcy Code (IBC) regarding the scope of moratoriums on personal guarantors and corporate debtors,

and the principle that proceedings under the SARFAESI Act do not necessarily preclude civil remedies for contractual enforcement.

The Court rejected the argument that the suit was clearly time-barred at the preliminary stage.

Regarding the first limb of Article 54, the Court observed that Clause 10 of the ATS made delivery of possession contingent upon multiple factors, including the completion of construction and payment of the balance consideration; since there was no evidence that construction was completed or that the Plaintiff was called upon to pay, a fixed date for performance could not be definitively established for the purpose of Order VII Rule 11.

Regarding the second limb, the Court held that the act of a third-party mortgagee (Defendant No. 4) taking possession under the SARFAESI Act does not automatically constitute a "refusal" by the original vendors (Defendants 1-3) to perform their contract.

The Court emphasized that the intention behind contractual clauses and the veracity of the ATS are matters of trial.

Finally, the Court determined that the interim moratorium under the IBC and the parallel DRT proceedings did not provide a sufficient basis to reject the plaint at the threshold.

The Court directed the registration of the suit and issued summons to the Defendants.

The defendants were directed to file written statements and affidavits of admission/denial within 30 days.

The matter was listed before the Joint Registrar on 06.04.2026 and before the Court on 15.07.2026.