Prolonged Inaction and Alleged Oral Deferral Cannot Resuscitate a Time-Barred Claim for Specific Performance

The Appellants (Plaintiffs) filed a suit for Specific Performance of an Agreement to Sell dated 01.03.1993 regarding a plot in Malviya Nagar, New Delhi

The total consideration was approximately Rs. 58.14 Lakhs, of which the Plaintiffs paid only Rs. 2.40 Lakhs by May 1999

The vendor, Sh. Satya Narain, was involved in injunction litigation with the DDA since 1991

On 18.05.1999, the DDA dispossessed the vendor

The Plaintiffs alleged a mutual oral agreement to defer performance until the conclusion of the DDA litigation

The vendor died in 2010

The DDA litigation was eventually decided in favor of the vendor's heirs in January 2019

The Plaintiffs issued a legal notice in February 2021 and filed the suit in August 2021

The Trial Court rejected the plaint under Order VII Rule 11 CPC on the ground of limitation

1. Whether the suit for Specific Performance was barred by limitation under Article 54 of the Limitation Act, 1963

2. Whether the oral agreement to defer performance and the dispossession by the DDA in 1999 affected the commencement of the limitation period

Article 54 of the Schedule to the Limitation Act, 1963, which mandates a three-year limitation period for specific performance, starting from the date fixed for performance or, if no date is fixed, when the plaintiff has notice of refusal

Order VII Rule 11(d) of the CPC regarding the rejection of a plaint that appears barred by law

Hardesh Ores Pvt. Ltd. v. Hede & Co. to establish that a plaint must be rejected if the averments ex-facie show it is time-barred

R. Kandasamy v. T.R.K. Sarawathy and Saradamani Kandappan v. S. Rajalakshmi, establishing that even if time is not of the essence, performance must occur within a "reasonable time," and courts must be cautious with old claims involving escalating urban property values

Section 18 of the Limitation Act was applied to hold that any extension of limitation requires a written acknowledgment signed by the party against whom the right is claimed

The Court observed that while the Agreement did not fix a specific calendar date, Clause 4 contemplated performance within eight months

The Court rejected the Appellants' argument that the DDA litigation suspended limitation, noting that the 1991 suit was for injunction, not title; thus, there was no legal bar to executing the Sale Deed between 1993 and 1999

The Court held that the dispossession by the DDA on 18.05.1999—admitted in the plaint—constituted notice that performance was impeded/refused, triggering the second limb of Article 54

The alleged oral agreement to defer performance until the litigation ended was deemed legally insufficient, as Section 18 of the Limitation Act requires an acknowledgment of liability to be in writing

The Court found the 22-year delay (1999 to 2021) with no documented correspondence or payment for over two decades to be "hopelessly time-barred" and a result of "clever drafting" to create an illusion of a cause of action

Granting specific performance after such inordinate delay, where only a fraction of the price was paid (Rs. 2.40 Lakhs against Rs. 58.14 Lakhs), would be "manifestly inequitable"

The Court dismissed the appeal and upheld the Trial Court’s order rejecting the plaint under Order VII Rule 11 CPC

All pending applications were disposed of