Friday, 17 March 2017

How to ascertain limitation for filing suit for specific performance of contract?

 The interpretation of the first part of Article 54 of
Schedule 1 of the Act is no longer res-integra. Article 54 reads
as follows:-
“54. 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.”
18. In Ahmadsahab Abdul Mulla (2) (Dead) v. Bibijan and
Ors. (2009) 5 SCC 462
the following question was considered by a three judge
Bench of this Court: “Whether the use of the expression “date”
used in Article 54 of the Schedule to the Limitation Act, 1963
(in short “the Act”) is suggestive of a specific date in the
calendar?”
19. While answering this question on a reference made to the
three judge Bench, this Court considered the meaning of the
word “date” and “fixed” appearing in Article 54. Upon such
consideration, this Court held that the expression “date fixed
for the performance” is a crystallized notion. When a date is
fixed it means there is a definite date fixed for doing a
particular act. Therefore, there is no question of finding out the
intention from other circumstances. It was reiterated that the
expression “date” is definitely suggestive of a specified date in
the calendar. Paragraphs 11 and 12 of the Report in this
regard are of importance and they read as follows:-
“11. The inevitable conclusion is that the expression “date fixed
for the performance” is a crystallized notion. This is clear from
the fact that the second part “time from which period begins to
run” refers to a case where no such date is fixed. To put it
differently, when date is fixed it means that there is a definite
date fixed for doing a particular act. Even in the second part the
stress is on “when the plaintiff has notice that performance is
refused”. Here again, there is a definite point of time, when the
plaintiff notices the refusal. In that sense both the parts refer to
definite dates. So, there is no question of finding out an intention
from other circumstances.
12. Whether the date was fixed or not the plaintiff had notice that
performance is refused and the date thereof are to be established
with reference to materials and evidence to be brought on record.
The expression “date” used in Article 54 of the Schedule to the Act
definitely is suggestive of a specified date in the calendar. We
answer the reference accordingly. 
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6687 OF 2016
Madina Begum & Anr.
 v
Shiv Murti Prasad Pandey & Ors. 
Dated:August 1, 2016


1. The two questions for our consideration are whether the
suit filed by the appellant Madina Begum was barred by
limitation in terms of the first part of Article 54 of Schedule 1 of
the Limitation Act, 1963 and whether the High Court ought to
have decided the first appeal filed by Madina Begum not only
on the preliminary issue of limitation but also on all other
issues. As far as the first question is concerned our answer is
in the negative and as far as the second question is concerned,
in our opinion, the High Court ought to have considered all the
issues in the first appeal rather than only the preliminary issue
of limitation.

2. The land in dispute in this appeal is 1.63 acres of
agricultural land bearing khasra nos. 438, 439, 440 and 456
(total area being 2.13 acres) in Patwari Halka No. 26 Gram
Amkhera, Tehsil and District Jabalpur.
3. There was a dispute about the title of the entire aforesaid
land and to resolve that dispute, Gulab Bai claiming to be the
owner and in possession of the entire land, filed Suit No. 479A
of 1994 in the Court of the Additional District Judge in
Jabalpur. The defendants in the suit were Amar Singh and
Jaswant Singh. The prayer made by Gulab Bai in her plaint
was for a declaration with regard to her title and possession.
She also prayed for an injunction restraining the defendants
Amar Singh and Jaswant Singh from interfering with her
possession.
4. On 2nd August, 2001 the suit was decreed in favour of
Gulab Bai and thereafter on 3rd September, 2001 she entered
into an agreement to sell 1.63 acres of agricultural land being
the disputed property to Madina Begum. The consideration for
the sale was Rs. 4,89,000/- out of which an advance of Rs.
1,25,000/- was paid by Madina Begum to Gulab Bai. This fact
is recorded in the agreement to sell.
5. What we are concerned with in this appeal is the

interpretation of Clause 3 of the agreement to sell which reads
as follows:-
“3 That Party no. 1 has sold 1.63 acres land at the rate of Rs.
3,00,000/- (Rs. Three lakh) per acre and Party no. 1 Gulab Bai has
obtained Rs. 1,25,000/- (One lakh twenty five thousand) as
advance. The rest of the amount of Rs. 3,64,000/- (Rs. Three lakh
sixty four thousand) would be paid by Party no. 2 to Party no. 1
within the period of six months from this date and having received
it the party no. 1 will execute Benama Registry in favour of Party
no. 2 or any such person specified by party no. 2 in one part or
many parts.”
6. Apparently on coming to know that Gulab Bai had agreed
to sell the disputed land to Madina Begum an appeal being F.A.
No.399 of 2001 was filed by Amar Singh and Jaswant Singh in
the High Court of Madhya Pradesh challenging the decree dated
2
nd August, 2001. An interim application under Order XXXIX
Rules 1 and 2 of the Code of Civil Procedure was filed along
with the appeal. The application was taken up for consideration
on 22nd September, 2001 and while issuing notice in the
application it was directed as follows:-
“In the meanwhile till the disposal of M(C) P. No. 3231/2001,
status quo regarding possession over the suit property shall be
maintained and the respondent shall not alienate the suit
property.”
7. On 16th November, 2001 Gulab Bai executed a Will
(which was registered) in which she categorically mentioned
that she had negotiated the sale of 1.63 acres of land to Madina

Begum and had given possession thereof to her but the
remaining amount and registration of the sale remained to be
completed. In her Will, Gulab Bai appointed Shiv Murti Prasad
Pandey and Devendra Prasad Pandey (respondents herein) as
her executors. The Will mentioned that upon her demise, her
agricultural land except 1.63 acres will devolve on Shiv Murti
Prasad Pandey and Devendra Prasad Pandey and in the event of
her death before the registration of the sale deed it would be
their responsibility to execute and register the sale deed in
favour of Madina Begum. Unfortunately, Gulab Bai passed
away on 2nd January, 2002.
8. Thereafter, F.A. No. 399 of 2001 filed by Amar Singh and
Jaswant Singh was heard by the High Court and came to be
dismissed on 28th September, 2006. We are told that the decree
passed by the High Court has attained finality.
9. Upon the dismissal of the aforesaid appeal, it appears
that Madina Begum required Shiv Murti Prasad Pandey and
Devendra Prasad Pandey to execute the sale deed but
apparently they did not take any steps in this regard. On the
contrary, it appears that on or about 2nd August, 2008 the land
in dispute was mutated in the name of Anita Jain pursuant to a
sale made in her favour by Shiv Murti Prasad Pandey and

Devendra Prasad Pandey.
10. When Madina Begum came to know of the transfer of the
disputed land, she sent a notice to Shiv Murti Prasad Pandey
and Devendra Prasad Pandey on 13th August, 2008 calling upon
them to execute the sale deed in terms of the agreement to sell
dated 3rd September, 2001 and the Will executed by Gulab Bai
on 16th November, 2001. The notice was replied to by Shiv
Murti Prasad Pandey and Devendra Prasad Pandey and we are
told that they declined to execute the sale deed. This led to
Madina Begum filing a suit, inter alia, for specific performance
of the agreement being Suit No. 17A of 2008 (perhaps
renumbered later as 41A of 2010) in the Court of the Additional
District Judge, Jabalpur.
11. The defendants in the suit namely Shiv Murti Prasad
Pandey and Devendra Prasad Pandey and Anita Jain filed their
written statement and one of the contentions raised was that
the suit was barred by limitation having been instituted more
than three years beyond the date specified in the agreement to
sell dated 3rd September, 2001. It was also submitted that
Madina Begum had given an advance of only Rs. 90,000/-
which had since been returned to her and that on 19th
November, 2001 the agreement to sell between Gulab Bai and

Madina Begum was cancelled.
12. On the pleadings, one of the issues framed by the Trial
Court was issue No. 8: Whether the suit is time barred?
13. The Trial Court considered the issue whether the suit
filed by Madina Begum was barred by time and answered it in
the negative. It was held in paragraph 38 of the decision
rendered on 1st February, 2011 as follows:-
“38. On perusal of the record it is gathered that agreement Ex. P-1
was executed on 03.09.2001 and thereafter stay has been granted by
Hon’ble High Court in first appeal on 22.09.2001 but the first appeal
was finally decided on 28.09.2006 vide Ex. P-5 since it was dismissed
and in this manner, the stay order had become ineffective on
28.09.2006. Thereafter, the plaintiffs have sent notice to the
defendants in August 2008 i.e. after two years from the date of
decision in the first appeal which was dismissed on 28.09.2006
which was done within prescribed period of three years. Therefore, it
cannot be said that the plaintiffs had filed the suit beyond the period
of limitation with a view to harass the defendants. Thus, issues No. 8
and 9 are being answered against the defendants.”
14. Even though the issue of limitation was decided in her
favour, the suit filed by Madina Begum was dismissed on
merits. Feeling aggrieved by the dismissal of the suit on merits
Madina Begum preferred First Appeal No. 175 of 2011 in the
High Court of Madhya Pradesh and that led to the impugned
judgment and order dated 16th August, 2013. The Division
Bench hearing the appeal did not go into the merits of the
dispute between the parties but only adverted to the issue of

limitation and since it was found that the institution of the suit
was barred by time (contrary to the conclusion of the Trial
Court) there was no necessity of considering the merits of the
case.
15. In coming to the conclusion that the suit was barred by
time, the High Court considered Article 54 of Schedule 1 of the
Limitation Act, 1963 (for short, “the Act”). The discussion
thereon was brief and it reads as follows:-
“Under Article 54 of the Limitation Act, the prescribed period of
limitation for filing a suit of specific performance of a contract is
three years and the period of three years has to be calculated
based on two contingencies i.e. the date fixed for performance of
the contract or if no such date is fixed, the date when the plaintiffs
had notice about refusal of the performance by the defendants. In
this case, admittedly, a date for performance is fixed i.e. six
months from the date of execution of the contract and, therefore,
as a specific period for performance is fixed, the period of limitation
would be three years w.e.f. 3.03.2002 i.e. the date when the period
of six months for execution of the sale-deed lapsed.”
16. The High Court held that since the suit was barred by
limitation, the Trial Court committed a grave error in recording
a finding that the suit was within limitation.
17. The interpretation of the first part of Article 54 of
Schedule 1 of the Act is no longer res-integra. Article 54 reads
as follows:-
“54. 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.”
18. In Ahmadsahab Abdul Mulla (2) (Dead) v. Bibijan and
Ors.1
the following question was considered by a three judge
Bench of this Court: “Whether the use of the expression “date”
used in Article 54 of the Schedule to the Limitation Act, 1963
(in short “the Act”) is suggestive of a specific date in the
calendar?”
19. While answering this question on a reference made to the
three judge Bench, this Court considered the meaning of the
word “date” and “fixed” appearing in Article 54. Upon such
consideration, this Court held that the expression “date fixed
for the performance” is a crystallized notion. When a date is
fixed it means there is a definite date fixed for doing a
particular act. Therefore, there is no question of finding out the
intention from other circumstances. It was reiterated that the
expression “date” is definitely suggestive of a specified date in
the calendar. Paragraphs 11 and 12 of the Report in this
regard are of importance and they read as follows:-
“11. The inevitable conclusion is that the expression “date fixed
for the performance” is a crystallized notion. This is clear from
1
(2009) 5 SCC 462

the fact that the second part “time from which period begins to
run” refers to a case where no such date is fixed. To put it
differently, when date is fixed it means that there is a definite
date fixed for doing a particular act. Even in the second part the
stress is on “when the plaintiff has notice that performance is
refused”. Here again, there is a definite point of time, when the
plaintiff notices the refusal. In that sense both the parts refer to
definite dates. So, there is no question of finding out an intention
from other circumstances.
12. Whether the date was fixed or not the plaintiff had notice that
performance is refused and the date thereof are to be established
with reference to materials and evidence to be brought on record.
The expression “date” used in Article 54 of the Schedule to the Act
definitely is suggestive of a specified date in the calendar. We
answer the reference accordingly. The matter shall now be placed
before the Division Bench for deciding the issue on merits.”
20. Quite independently and without reference to the
aforesaid decision, another Bench of this Court in
Rathnavathi and Another v. Kavita Ganashamdas2
 came to
the same conclusion. It was held in paragraph 42 of the Report
that a mere reading of Article 54 would show that if the date is
fixed for the performance of an agreement, then
non-compliance with the agreement on the date would give a
cause of action to file a suit for specific performance within
three years from the date so fixed. But when no such date is
fixed, the limitation of three years would begin when the
plaintiff has notice that the defendant has refused the
performance of the agreement. It was further held, on the facts
2
(2015) 5 SCC 223

of the case that it did not fall in the first category of Article 54
since no date was fixed in the agreement for its performance.
21. The Clauses of the agreement for consideration in
Rathnavathi were Clauses 2 and 3 and they read as follows:-
 “2. The purchaser shall pay a sum of Rs. 50,000 (Rupees fifty
thousand only) as advance to the seller at the time of signing this
agreement, the receipt of which the seller hereby acknowledges and
the balance sale consideration amount shall be paid within 60
days from the date of expiry of lease period.
3. The seller covenants with the purchaser that efforts will be
made with the Bangalore Development Authority for the transfer of
the schedule property in favour of the purchaser after paying
penalty. In case it is not possible then the time stipulated herein
for the balance payment and completion of the sale transaction will
be agreed mutually between the parties.”
22. As far as the present appeal is concerned, the agreement
between Gulab Bai and Madina Begum did not specify a
calendar date as the date fixed for the performance of the
agreement. Consequently, the view expressed in Ahmadsahab
Abdul Mulla and Rathnavathi on the first part of Article 54
clearly applies to the facts of the case. In taking a contrary
view, ignoring the absence of a specified date for the
performance of the agreement and reversing the Trial Court, the
High Court has fallen in error.
23. It is not necessary for us to multiply authorities on the
subject particularly when the issue has been conclusively

settled by a Bench of three learned judges of this Court in
Ahmadsahab Abdul Mulla and we see no reason to take a
different view.
24. The second question that requires consideration is
whether the High Court was right in merely deciding the issue
of limitation in a first appeal filed under Section 96 of the Code
of Civil Procedure without going into the merits of the case.
Quite recently, in Vinod Kumar v. Gangadhar3
this Court had
occasion to consider the issue whether, under Section 96 of the
Code of Civil Procedure, the first appellate court ought to decide
all the issues before it or not. Reference was made to a very
large number of decisions rendered by this Court and it was
concluded, particularly relying upon Madhukar v. Sangram4
decided by a Bench of three learned judges of this Court that
sitting as a court of first appeal it is the duty of the High Court
to deal with all the issues and evidence led by the parties before
recording its findings.
25. In so far as the present appeal is concerned, the High
Court only considered the issue of limitation and did not
consider the other issues in the appeal. This was
impermissible. The result is that since we do not agree with the
3
(2015) 1 SCC 391
4
(2001) 4 SCC 756

view taken by the High Court on the issue of limitation, there is
no option but to set aside the view expressed by the High Court
and following the decisions of this Court, remand the matter to
the High Court to decide the remaining issues in the first
appeal filed under Section 96 of the Code of Civil Procedure.
26. It is a little unfortunate that the parties have to undergo
another round of litigation which could easily have been
avoided if the settled legal principles laid down by this Court
from time to time were followed in regard to the requirements of
Section 96 of the Code of Civil Procedure. This is quite apart
from the delay caused in the resolution of the dispute between
the parties.
27. In view of our discussion, the appeal is allowed and the
impugned judgment and order of the High Court dated 16th
August, 2013 is set aside and the matter is remanded to the
High Court for deciding the remaining issues in the appeal on
merits.
...………………….J
(Madan B. Lokur)
 ..………………….J
New Delhi; (R.K. Agrawal)
August 1, 2016

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