P L D 1966 Supreme Court 505 (PLP)

HAMOODUR RAHMAN, J.

This appeal, by special leave, is directed against the judgment and decree of a Division Bench of the High Court of West Pakistan, Peshawar, dismissing a suit for specific performance of an agreement for re-conveyance on the ground of unreasonable delay in filing the suit. The properties in dispute, situated in village Ragi Bedazai in the District of Peshawar, belonged to the predecessors-in-interest of the appellants, who sold them to one Qazi Muhammad Ishaq, the predecessor-in-interest of the respondents, for Rs. 2,000 by a deed of sale executed on the 13th of March .1926, and registered on the 24th of March 1926. On the same date another agreement for re-conveyance was also executed between the parties for the re-conveyance of the properties to the vendors on payment of the same amount of money after 15 years. This agreement was registered on the 27th of March 1926. The period of 1 years expired on the 13th of March 1841, but the successors-in-interest of the vendors did not choose to exercise their option until 13 years after on the 23rd of February 1954, when they caused a notice to be served on the vendee to honour the agreement. The vendee replied to this notice on the 7th of March 1954, saying that he did not consider the notice givers to have any right in the matter and that they could choose their own course of action either by suit or by arbitration. The appellants thereupon instituted the suit, out of which this appeal arises, on the 12th of March 1954, claiming , specific performance of the agreement. This was resisted by the vendee on, inter alia, the grounds that the suit was barred by time, that the plaintiffs were estopped by their conduct from bringing the suit and that the sale was, in any event, an out and out sale and the vendee was not bound to re-convey the properties. The trial Court framed the following issues:- (1) Is the suit barred by time? (2) Have plaintiffs no cause of action? (3) Are plaintiffs estopped by their conduct from bringing the suit ? (4) Whether the date of the cause of action has been wrongly shown in the plaint? (5) Whether the defendant is an absolute vendee of the suit land, and hence the suit is not maintainable in its present form? (6) Are plaintiffs entitled to the specific performance of the agreement dated 13-3-26 and registered on 27-3-26? (7) Relief. It came to the conclusion that the sale was not an absolute sale but it was a sale with a condition for re-conveyance and, as such, the plaintiffs had clearly a cause of action for the suit. The suit was also held to be within time under Article 113 of the Limitation Act, as it had been filed within three years from the refusal of performance on the 7th of March 1954, when the vendee replied to the notice and refused performance of the agreement. The question of estoppel was also decided in favour of the appellants. The only ground upon which this estoppel was sought to be set up was that one of the original vendors, Saifullah Khan, had taken the suit lands on lease from the vendee, but this was held to be not sufficient by itself to establish a surrender of the rights under the agreement for reconveyance. The trial Court also took the view that mere delay was not sufficient to defeat the right of the appellants unless it was such that it amounted to an abandonment, acquiescence or waiver or at least an alteration of the position of the other party, from which it would be inequitable to expect him to withdraw. This suit was, accordingly, decreed on payment of Rs. 2,

000. On appeal, the Additional District Judge of Peshawar upheld the decision of the trial Court on the question of limitation which was the only point argued in the appeal and therefore, the appeal was dismissed. The vendee came to the High Court in second appeal. The High Court did not disagree with the findings of the Courts below as to the nature of the transaction, the applicability of the second part of Article 113 of the Limitation Act and as to the finding that the suit was not barred by estoppel but, nevertheless, took the view that since the suit was a suit for specific performance, the Court had a discretion in the matter and that this discretion should not be exercised in favour of the vendors' heirs who had slept over their right for 13 years. In the view of the High Court even though the measure of time was, as specified in Article 113, three years from the date of refusal to perform, the latitude was not to be extended for an unreasonable or indefinite period. In other words, in the High Court's opinion the three years should have commenced from a reasonable period after the expiry of the period of 15 years stipulated in the deed of sale as the period during which re conveyance could not be claimed. The High Court thought that even though this Article of the Limitation Act prescribed a period of three years from the date of non-performance, the suit should have been filed within at most five years from the date of the expiry of the period of 15 years. By waiting for 13 years, therefore, the plaintiffs in the suit had been guilty of laches, which disentitled them to the discretionary relief of specific performance. Leave was granted in this case to consider whether the High Court was right in taking the above view. The agreement for re-conveyance, which is in the Vernacular, provides as follows:- A correct translation of this would be:- "If the persons, named-above, desire to take back the property on payment of Rs. 2,000 to the vendee after the expiry of the stipulated period of 15 years, then the latter would have no objection to delivering possession of the property to the former." By this stipulation the parties clearly indicated an intention that for a period of 15 years from the date of execution of the document there would be no right to demand re-conveyance, but after the expiry of the said period if the vendors desired to obtain back the said properties on payment of the same amount of money the vendee would have no objection to the same. This clearly does not, as sought to be argued on behalf of the respondents, fix a period for performance. We are in agreement with the Courts below that this is a case in which date has been fixed for the performance of the agreement. It is obvious that under the clause mentioned above the desire for te conveyance was to arise at some time after the expiry of the period. In the circumstances, the case fell clearly within the latter part of Article 113 of the Limitation Act. This Article reads as follows:- Article Description of suit Period of limitations Time from which period begins to run 113 For specific performance of a contract Three years The date fixed for the performance, or if no such date is fixed, when the plaintiff has notice that performance is refused." 'The question then is as to from what date the period of three years will commence? The High Court has construed this as meaning within three years after the expiry of a reasonable time from the date on which the performance could have been first insisted upon, for, in its view, it would be unreasonable to allow the person entitled to the performance of the agreement to wait indefinitely. We are unable to upheld this view of the High Court. The language used by the Legislature is not ambiguous and fixes with certainty the date of the commencement of limitation as the date "when the plaintiff has notice that performance is refused." In view of this clear language, there can be no doubt that the date of commencement of limitation is the date on which the party seeking performance has notice that his right is denied. The cause of action arises from that date and the limitation also begins to run from the same date. The language used in the agreement for re-conveyance is, is our opinion, too indefinite to be regarded as fixing a date for the performance of the contract and the maxim certum est 'quod certum reddi potest cannot also be invoked in reference to such a loosely worded agreement, under which the promisor undertook to recovery not on the expiry of the stipulated period but at any, time after the expiry thereof. This could not possibly be construed as meaning simultaneously on the expiry of the period. The next question that arises is as to whether a different principle should operate in the case of a discretionary relief like that of specific performance of a contract. In a case where such a relief is sought can the defendant be entitled to raise the plea of delay as a defence to the suit, even where the delay does pot amount to a bar under the statute of limitation? The discretion, it is now well-settled must be exercised on principle substantially equitable. Equity does not, however, proceed upon any a priori basis. It has, therefore, never treated delay simpliciter as a bar. Unless the delay has caused some prejudice to the other party, equity has not intervened to excuse performance of a contract. So long as matters remain in status quo and there is nothing to show that the party called upon to perform has been misled by the inaction of C the other party to alter his position in such a manner as to make it inequitable to force him to perform his part of the contract, lapse of time short of the period prescribed by the Limitation Act should not be allowed to operate as a bar to the claim of the relief. It may be taken to be fairly well-settled that if the person seeking performance has not committed such delay as would cause prejudice to the other side or would amount to waiver or acquiescence on the part of the person seeking performance, aches by itself would not be a sufficient ground. Thus until it can be shown that the plaintiff in the suit had actively done something to lead the defendant to suppose that he had abandoned his claim against the latter, the doctrine of laches would have no application in cases where the statute of limitation has fixed a date for suing for performance. To take any other view would, as Sir Fredrick Pollock has said in his Tagore Law lectures, 1894, p.37, be "directly calculated to frustrate the purpose of the Indian Legislature in fixing a certain term." Laches has often been defined as "a neglect to do something which by law a man is obliged to do" and as to when and under what circumstances delay is a bar to a legal remedy we may usefully refer to the observations of the Judicial Committee of the Privy. Council, in the case of Lindsay Petroleium Company v. Hard ((1874) L R 5 P C 221):- "Now the doctrine of laches in Courts of Equity is not an ' arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fully be regarded as equivalent to a waiver of it, or, where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limita tions the validity of that defence must be tried upon principles substantially equitable. Two circumstances always important in such cases are the length of the delay and the nature of the acts done during the interval, which might affect either party, and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy." Again, Lord Penzance observed in Dalton v. Angus (1887) 6 A C 740), "in all cases in which lapse of time is held to stand in the way of the assertion of rights attaching to the ownership of property, it is not the lapse of time itself which so operates but the inferences which are reasonably drawn from the existence of a given state of things during that period of time. These inferences are inferences of acquiescence or consent," and they are drawn from the fact that the person against whom the right is claimed has for a length of time been permitted the enjoyment of the property in such a manner as to give him the assurance that the right would not be asserted. Cornelius, J., (as he then was) has himself, in the case of Mohammad Wazir v. Jahangirimal (A I R 1949 Lah. 72), also very lucidly propounded the same principle in the following words:- "It is well settled that where a statute of limitation imposes a bar, mere inaction by a claimant within the time allowed by the statute cannot be treated as evidence that he has waived or abandoned his rights, but, on the other hand, where a claimant knows that a party against whom he has a claim is altering his position in the belief that the claimant has abandoned or will not enforce, his claim and even then, the claimant does nothing, his inaction may bar his claim even within the period of limitation." In the present case too we see no reason to depart from the above well-settled principles, since there is nothing on the record to show that there has been any alteration in the position of the parties, which is likely to cause any prejudice to the respondents. The status quo is still, as far as can be gathered, being maintained unaltered. The situation of the parties having, therefore, in no substantial manner been altered, either by the delay or . by anything done during the interval, there is in these circumstances nothing to give special important to the defence founded on time. We are unable, as such, to hold that the High Court acted upon correct principles in dismissing the suit and refusing to allow specific performance of the agreement for re-conveyance. In the result we allow this appeal, set aside the judgment and decree of the High Court and restore that of the trial Court, decreeing the suit. The respondents will on payment of Rs. 2,000 execute and complete the deed of re-conveyance in favour of the appellants within two months of the payment of the amount in the trial Court, failing which the Court will execute the deed in accordance with the provisions of Order XXI, rule 34 of the Code of Civil Procedure. The appellants will also be entitled to the costs of this appeal. A. H. Appeal allowed.