Specific Performance | Limitation Period Can Be Extended By Oral Agreement : Kerala High Court

The Kerala High Court has clarified that suits for specific performance cannot be dismissed at the pleadings stage merely because they appear time-barred, if the plaint contains specific averments about oral agreements extending the limitation period. This judgment establishes that questions of limitation involving disputed facts must be decided at trial rather than through preliminary rejection of plaint, providing crucial protection for plaintiffs with genuine claims of extended performance periods.

Background & Facts

The Dispute

The case arose from an agreement for sale dated 15.03.2012 between M/s. Vagamon Thomson Farms (plaintiffs) and Rajesh George (defendant) for property in Kottayam district. The agreement specified a six-month performance period, with the plaintiffs paying ₹20 lakhs as advance consideration. When the defendant failed to execute the sale deed within the stipulated time, citing errors in survey numbers, the parties allegedly agreed to extend the performance period until the defects were corrected.

Procedural History

The plaintiffs filed a suit for specific performance on 02.12.2021, nearly nine years after the original agreement. Key procedural steps included:

• Original Suit: Filed before the Sub Court, Kattappana (O.S. No. 42 of 2021)
• Plaint Rejection: The trial court rejected the plaint under Order VII Rule 11(d) CPC, holding it barred by limitation
• Appeal: The plaintiffs filed Regular First Appeal No. 355 of 2022 before the Kerala High Court

Relief Sought

The appellants sought:

1. Setting aside of the trial court's order rejecting the plaint
2. Restoration of the suit for trial on merits
3. Refund of court fees paid on the memorandum of appeal

The Legal Issue

The central question before the High Court was whether a plaint for specific performance can be rejected under Order VII Rule 11(d) CPC as barred by limitation when it contains specific averments about an oral agreement extending the period of performance beyond the original contractual deadline.

Arguments Presented

For the Appellants

The appellants contended that:

1. The plaint specifically pleaded an oral agreement extending the performance period until the survey number defects were corrected
2. The trial court erred in rejecting the plaint at the preliminary stage without considering this crucial averment
3. Questions of limitation involving disputed facts must be decided at trial, not through preliminary rejection
4. The plaint disclosed a cause of action for specific performance, as the defendant's conduct showed readiness to perform once the survey issues were resolved

For the Respondent

The respondent argued that:

1. The original agreement clearly specified a six-month performance period with no provision for extension
2. No written evidence of any extension agreement was produced
3. The suit was clearly barred by limitation as it was filed nearly nine years after the original deadline
4. The trial court correctly applied Order VII Rule 11(d) CPC to reject the time-barred plaint

The Court's Analysis

The Division Bench of Justices Sathish Ninan and P. Krishna Kumar conducted a detailed analysis of the limitation issue in the context of Order VII Rule 11 CPC. The Court made several significant observations:

1. Nature of Limitation Questions: The Court noted that limitation is generally a mixed question of law and fact, though in some cases it may be apparent from the plaint itself.

2. Plaint Averments: The Court examined paragraph 12 of the plaint, which specifically pleaded:

   "However, the defendant assured the plaintiffs that he had already initiated proceedings to correct the survey numbers and the property will be conveyed to the plaintiffs, even though the same may not be possible within the period of agreement. The plaintiffs expressed its displeasure and anguish on the conduct of the defendant, however, have to agree for the same as the plaintiffs had already parted with a huge sum of Rs.20,00,000/- as advance sale consideration, as per the agreement for sale dated 15.03.2012. Therefore, both the plaintiffs and defendant agreed to extent the period of agreement to such period as may be required by the defendant to correct the mistake in survey numbers and to execute sale deed after curing the defects, as originally agreed as per the agreement."

3. Legal Principle Established: The Court held that when a plaint contains specific averments about an agreement varying the period of performance, the question of limitation cannot be decided at the preliminary stage. The Court observed:

   "If the plaintiffs are able to prove such an agreement, then how far the plea of limitation would succeed is to be considered. Whether there has been an agreement in the manner as pleaded by the plaintiffs, is a matter of evidence."

4. Application of Order VII Rule 11: The Court distinguished cases where limitation is apparent on the face of the plaint from those where disputed facts require evidence. The judgment emphasized that Order VII Rule 11 CPC should not be used to reject plaints when the limitation question depends on disputed facts that require trial.

5. Precedent Analysis: While not explicitly citing specific precedents, the Court's reasoning aligns with established principles that limitation questions involving disputed facts should be decided at trial rather than through preliminary rejection.

The Verdict

The Kerala High Court allowed the appeal, setting aside the trial court's order rejecting the plaint. The Court held that the plaint could not be rejected under Order VII Rule 11(d) CPC as barred by limitation because it contained specific averments about an oral agreement extending the performance period. The suit was restored and remanded to the trial court for disposal in accordance with law. The appellants were also granted a refund of the court fees paid on the memorandum of appeal.

What This Means For Similar Cases

Oral Agreements Can Extend Limitation Periods

This judgment establishes important principles for practitioners dealing with specific performance suits:

• Pleadings Matter: Specific averments in the plaint about oral agreements extending performance periods must be considered at trial
• Trial Required: Courts cannot reject plaints under Order VII Rule 11 CPC when limitation depends on disputed facts
• Evidence Standard: Plaintiffs must be prepared to prove oral extension agreements through evidence at trial

Strategic Considerations for Practitioners

• For Plaintiffs:

  • Include detailed averments about any oral agreements extending performance periods
  • Document all communications regarding performance extensions
  • Be prepared to prove oral agreements through circumstantial evidence if written proof is unavailable

• For Defendants:

  • Challenge the sufficiency of pleadings regarding oral extensions at the appropriate stage
  • Argue that vague or general averments about extensions should not prevent plaint rejection
  • Prepare to counter claims of oral extensions with evidence of the original agreement terms

The Limits of Preliminary Rejection

The judgment reinforces that Order VII Rule 11 CPC has limited application in specific performance cases:

• Courts should not reject plaints when limitation depends on disputed facts
• Mixed questions of law and fact regarding limitation should be decided at trial
• The threshold for rejecting plaints on limitation grounds remains high when plaintiffs allege oral agreements extending performance periods