JUDGMENT : Sathish Ninan, J. 1. The defendants in a suit for recovery of possession are in appeal. In the suit, the defendants raised a counter claim seeking a decree for specific performance of an agreement for sale. The trial court dismissed the suit and decreed the counter claim. On appeal, the learned Single Judge reversed the said decree and judgment. 2. The plaintiff is a Private Limited Company. The plaint schedule property, 28 cents with a building thereon, admittedly belong to the plaintiff-Company. It is also admitted that the property was entrusted with the defendants under a lease arrangement in the year 1972 on a monthly rent of Rs.100/-. It is the plaintiff's case that in the year 1974, the plaintiff requested the defendants for an advance of Rs.20,000/- on the condition that the interest therefrom would be taken as rent and the amount shall be returned to the defendants as and when they vacate the premises. The suit was filed terminating the lease arrangement as per notice and further claiming recovery on the strength of title since the defendants disowned possession under the lease and claimed possession under an alleged agreement for sale. 3. The defendants contended that an oral agreement was entered into with the plaintiff, for sale of the plaint schedule property to the defendants, for an amount of Rs.25,000/-. Out of the total sale consideration, an amount of Rs.20,000/- was paid. The contention of the plaintiff, that the payment was as an advance-loan, with an agreement to repay the same at the time of vacating the premises, was denied. They also filed a counter claim seeking a decree for specific performance. 4. The trial court upheld the oral agreement for sale pleaded by the defendants and granted a decree for specific performance. The decree was interfered with in appeal, by the learned Single Judge, finding against the agreement and granting a decree for recovery of possession. 5. Heard learned counsel Shri Gopikrishnan Nambiar on behalf of the appellants-defendants and learned Senior Counsel Shri T. Sethumadhavan on behalf of the respondent-plaintiff. 6. As noticed supra, the title of the plaintiff and the fact that the defendants came into possession as lessees under the plaintiff in the year 1972, are admitted. The initial question for determination is, has there been an agreement for sale, as pleaded by the defendants. 6. As noticed supra, the title of the plaintiff and the fact that the defendants came into possession as lessees under the plaintiff in the year 1972, are admitted. The initial question for determination is, has there been an agreement for sale, as pleaded by the defendants. The fact that Rs.20,000/- was paid by the defendants to the plaintiff is admitted. Was it a loan as contended by the plaintiff or part of sale consideration under an oral agreement for sale as contended by the defendants? The payments are evidenced by Exts B1 and B2 receipts dated 20.07.1974 and 30.04.1975, for Rs.15,000/- and Rs.5,000/-, respectively. The payment of the said amount of Rs.20,000/- has been entered in Ext A4, the cash book of the plaintiff- Company. In Exts B1, B2 and A4 the payment is shown as made to 'suspense account'. It does not specify the amount either as a loan received or as sale consideration. Exhibits B3 and B4 are relied on by the defendants to substantiate their case of sale agreement. Exhibit B3 is a small piece of paper with a note thereon alleged to have been issued by one of the Directors of the plaintiff company. It is mentioned therein that as per receipts dated 20.07.1974 and 30.04.1975, Rs.15,000/- and Rs.5,000/- has been received. It contains a further entry that the 'balance amount' due is Rs.5,000/-. Exhibit B4 is the cover containing Ext B3. PW1 admitted that the handwriting on the cover, Ext B4, resembles with his brother's handwriting. The trial court also found similarity in the handwriting with that in Exts B1 and B2. We also perused it and found the handwritings to be substantially similar. There is no proper explanation from the part of the plaintiff as to how Ext B3 happens to mention about a balance amount of Rs.5,000/-. It is submitted by the learned Senior Counsel that it is the plaintiff's case in the replication that the original demand by the plaintiff was for Rs.25,000/- but the defendants agreed to pay only Rs.20,000/-, and therefore it must be with reference to the said demand of Rs.25,000/- that Ext B3 mentions as balance amount of Rs.5,000/-. We find it difficult to accept the said reasoning. If the demand was for Rs.25,000/- and the defendants agreed to pay only Rs.20,000/-, one fails to understand how Ext B3 mentions about, “balance amount of Rs.5000/-”. We find it difficult to accept the said reasoning. If the demand was for Rs.25,000/- and the defendants agreed to pay only Rs.20,000/-, one fails to understand how Ext B3 mentions about, “balance amount of Rs.5000/-”. There is no case that the defendant had agreed to pay Rs.25,000/- and later withdrew from it and paid only Rs.20,000/-. Therefore, Ext B3 no doubt suggests the case put forward by the defendant. The learned counsel for the appellants/defendants would rely on Exts X1 and X2 letters written by the plaintiff to the State Bank of Travancore, to submit that, the said letters indicate that the plaintiff was earnestly making efforts to sell the property, and that it probabilises the defendants' case of the subsequent agreement for sale. No doubt, the said letters would give some indication regarding the intention of the plaintiff to dispose of the property. The said letters suggest that the plaintiff was eager to sell away the property. So also, there is no reason why a tenant in possession should, during the currency of the tenancy, advance amounts to the landlord on an agreement that the same would be repaid at the time of surrender of the premises. It is especially so since there is no case that the said amount was required to be paid towards security for use and occupation of the leased premises. These aspects, coupled with the statement in Ext B3, probabilises the defence version. Therefore, we are inclined to uphold the defence plea of, oral agreement for sale, concurring with the finding of the trial court thereon. 7. Now coming to the enforcebility and enforcement of the oral agreement for sale, it is trite that an oral agreement for sale is seldom enforced. Its terms are to be specifically proved, in order to secure a decree. In the case at hand, from the facts and evidence it comes out that the agreement was on 20.07.1974 and that the total consideration payable was Rs.25,000/-. The period for performance of the contract is not discernible. Though the agreement was in 1974, till the filing of the counter claim on 12.04.1985 there was no endeavour on the part of the defendants to have the agreement performed. The period for performance of the contract is not discernible. Though the agreement was in 1974, till the filing of the counter claim on 12.04.1985 there was no endeavour on the part of the defendants to have the agreement performed. Though it is contended that as per the terms of the agreement, the period for performance was to start only on redemption of the mortgage over the property in favour of the State Bank of Travancore, there is no material indicating the same. Apparently, there is no evidence to show that there has been any demand from the part of the defendants to the plaintiff calling upon them to settle the liability and to execute conveyance in their favour. No evidence is produced to show that the defendants had at any time approached the plaintiff seeking performance of the contract, or expressed their readiness and willingness to pay the balance amount and act in terms of the contract. This is especially so in view of the fact that though the agreement was on 20.07.1974, till the filing of the counter claim on 12.04.1985 there was no action from the part of the defendants seeking to get the sale deed executed. In terms of Section 16(c) of the Specific Relief Act, 1963, continued readiness and willingness of the purchaser since the date of agreement, to perform his part of the contract needs to be proved. As noticed, there is lack of evidence indicating the same. Therefore, the defendants are not entitled to a decree for specific performance of the agreement. 8. Even otherwise, because there is an agreement for sale, the court is not bound to grant a decree for specific performance. Court is not obliged to grant a decree merely because it is lawful to do so. Section 20 of the Specific Relief Act clothes the court with the duty to exercise its discretion in a given case to grant a decree for specific performance. Of course, the exercise of discretion is to be guided by judicial principles and shall not be arbitrary. Rise in price or delay in seeking the relief, no doubt, by itself is not a ground to deny specific performance. However, here though the agreement was in the year 1974, specific performance is sought for only in the year 1985. Of course, the exercise of discretion is to be guided by judicial principles and shall not be arbitrary. Rise in price or delay in seeking the relief, no doubt, by itself is not a ground to deny specific performance. However, here though the agreement was in the year 1974, specific performance is sought for only in the year 1985. We are of the view that in the circumstances, definitely it is a reason to exercise the discretion refusing to grant a decree for specific performance. 9. There is yet another reason why the discretion should be exercised to negate a decree for specific performance. The owner of the property is a private limited company. To sell the property of the Company, as is required under Ext A7 Articles of Association, there has to be a decision in the said regard by the Board of Directors. It is not in dispute that such a decision is absent in the case. The documents suggesting the agreement for sale is only by P.S. Narayanan, one of the Directors of the Company. It cannot bind the Company. Therefore it may not be proper to direct specific performance of such an agreement. 10. Apart from the exercise of discretion, there is still another reason why a decree for specific performance could not be granted. Article 54 of the Limitation Act provides a period of three years for specific performance, from the date fixed for performance, and if no such period is fixed, from the date of notice of refusal of performance. The plaintiff herein had on 15.02.1982 filed a suit against the defendants before the Munsiff's Court, Palakkad as O.S. No.85 and 1982 for a prohibitory injunction against committing waste in the property in question. In paragraph (1) of the said plaint, the plaintiff has specifically repudiated the contract. As rightly held by the learned Single Judge, evidently the contract has been expressly repudiated under Ext B5. The claim for specific performance was lodged only on 12.04.1985. The learned Single Judge has held that the relief was sought beyond three years of the notice of repudiation. It is neither contended nor sought to be demonstrated before us that the notice of the suit was received by the defendants within three years prior to 12.04.1985. Therefore, we concur with the finding of the learned Single Judge that the claim is barred by limitation. 11. It is neither contended nor sought to be demonstrated before us that the notice of the suit was received by the defendants within three years prior to 12.04.1985. Therefore, we concur with the finding of the learned Single Judge that the claim is barred by limitation. 11. Once it is held that the claim for specific performance is not liable to be granted, we are left with the prayer of the plaintiff for recovery of possession. It is not in dispute that during the pendency of this appeal, the area in question has been notified under the Kerala Buildings (Lease and Rent Control) Act. The learned counsel for the appellants would argue that the defendants could be evicted only under the provisions of the said Act. Here, it is to be noticed that, though according to the plaintiff, the defendants are in possession of the property as lessees, it is the specific case of the defendants that since 20.07.1974 they are in possession of the premises under the agreement for sale and not in their status as lessees. Here, it would be relevant to refer to the defendants' plea in the written statement as well as in the counter claim. “MALAYALAM” The defendants are very specific and categoric in their assertion that they are, since the agreement for sale, in possession of the premises under the agreement and not under the lease. 12. Pertinently, being conscious of the claim of the defendants, the plaintiff has filed the suit for recovery of possession on the strength of title. Court fee has been paid under Section 30 of the Kerala Court fees and Suits Valuation Act, on the market value of the property, for getting recovery of possession on the strength of title. “MALAYALAM” 13. The defendants though were let in possession as tenants, in view of the subsequent agreement for sale, they renounced their nature and character of possession as a lessee. Since the agreement for sale, the defendants altered their jural status and continued in possession under the agreement. Of course, the mere fact that the landlord and tenant enters into an agreement for sale in respect of the tenanted premises will not automatically result in change in the status. It would essentially depend on the intention of the parties, to be decided independently on the facts of each case. Of course, the mere fact that the landlord and tenant enters into an agreement for sale in respect of the tenanted premises will not automatically result in change in the status. It would essentially depend on the intention of the parties, to be decided independently on the facts of each case. In Arjunlal Bhatt Mall Gothani v. Girish Chandra Dutta ([1973] 2 SCC 197) the Apex Court held thus: “The appellants were tenants in the premises of the respondent landlord and three suits, including an eviction suit, were pending against them. By an agreement between the appellants and the respondent, the respondent agreed to sell the whole property to the appellants for a certain sum to be paid to him by equal installments. Clause (5) of the agreement provided that in case of default of any installment, the agreement for sale would stand cancelled and if the purchasers failed to pay the defaulted installments within one month's notice the payments made would stand forfeited and purchasers would make over possession of the property to the vendor.” “Under clause (5) of the agreement the question of giving notice arises only if the vendor wanted to forfeit the installments paid by the purchaser. Not even one installment having been paid the question of forfeiture does not arise and no notice was necessary for cancelling agreement. It stood automatically cancelled. It was sought to be argued before us that once the agreement stood cancelled the appellants stood restored to their original position as tenants and the suit could not be filed without giving notice under the Transfer of Property Act. We are of opinion that when the agreement, dated June 7, 1959, was entered into the old relationship of landlord and tenant came to an end. The rights and liabilities of the parties have to be worked out on the basis of that agreement.” (emphasis supplied) The said judgment was followed in R. Kanthimathi and Another v. Beatrice Xaiver (MRS) ([2000] 9 SCC 339). Referring to the decision in Arjunlal Bhatt Mall Gothani's case (supra) the court observed thus: “This decision clearly spells out that once there is agreement of sale between a landlord and a tenant, the old relationship as such comes to an end. It goes on to record that even after the cancellation of such agreement of sale the status of tenants is not restored as such. It goes on to record that even after the cancellation of such agreement of sale the status of tenants is not restored as such. In other words, on the date of execution of the aforesaid agreement of sale their status as that of landlord and tenant changed into a new status as that of a purchaser and a seller.” Therefore, when the nature and character of possession has changed as one under the agreement for sale, even if the agreement falls through, the original tenancy does not resurrect. 14. In this case, as noticed supra, the defendant is in possession under the agreement for sale. They are found to be not entitled to a decree for specific performance. The corollary is that, the plaintiff is entitled to get recovery of possession of the plaint schedule property from the defendants on the strength of title. It needs to be noted that, the mere fact that the plaintiff denied the agreement for sale does not preclude the plaintiff from seeking a decree on the defence plea (See Firm Srinivas Ram Kumar v. Mahabir Prasad & Co., AIR 1951 SC 177 and Anil Kumar v. Ajith and Others, 2012 [4] KHC 546). This is all the more so in view of the fact that, the plaintiff has, even in the plaint, referred to the defence contention and sought for recovery otherwise than as a landlord, on the strength of title. Thus, though for varying reasons, we are inclined to affirm the decree of the learned single judge. In the result, the appeal is dismissed. The decree and judgment of the learned Single Judge dismissing the counter claim and granting a decree for recovery of possession to the plaintiff, are confirmed. No costs.