Wednesday 5 June 2019

How to ascertain limitation in suit for specific performance of contract if time for execution of sale deed is fixed in agreement of sale?

In the light of the aforesaid agreement, the question to be considered is whether the First Part of Article 54 of the Act of 1963 would be attracted or whether the limitation would be governed by the Second Part of Article 54. As per the First Part of said Article, the time from which the period of limitation would begin to run is from the date fixed for the performance. As per the Second Part where no such date is fixed, it would begin to run when the plaintiff has notice that the performance is refused. In this regard, it would be necessary to first refer to the legal position in the matter of applicability of Article 54 of the Act of 1963. In Pancharan Dhara & Others Versus Monmatha Nath Maity (D) by L.R's & Another [MANU/SC/2787/2006 : AIR 2006 SC 2281], it has been observed in paragraph 19 as under:-

"19. ..... It is not in dispute that the suit for specific performance of contract would be governed by Article 54 of the Limitation Act, 1964. While determining the applicability of the first or the second part of the said provision, the court will firstly see as to whether any time was fixed for performance of the agreement of sale and if it was so fixed, whether the suit was filed beyond the prescribed period unless any case of extension of time for performance was pleaded and established. When, however, no time is fixed for performance of contract, the court may determine the date on which the plaintiff had notice of refusal on the part of the defendant to perform the contract and in that event the suit is required to be filed within a period of three years therefrom."
As it has been found that as per the agreement, the sale-deed was to be executed on 01.07.1998 and even according to the plaintiff no. 1 there was no further written or oral agreement for extending the time to execute the sale-deed, any subsequent payments cannot have the effect of extending the time to complete the transaction. It would have been a different matter if the plaintiffs would have proved that the defendants had agreed to extend the time to complete the contract. That is however not the case proved.

19. Thus, from the aforesaid discussion, it becomes clear that both the Courts wrongly interpreted the agreement at Exhibit 98 while holding the suit filed on 25.09.2006 to be within limitation. In the face of clear stipulation in the agreement as regards the date fixed for execution of the sale-deed, the finding recorded by both the Courts that the limitation was governed by the Second Part of Article 54 of the Act of 1963 is perverse. 


Second Appeal Nos. 457 and 458/2015

Decided On: 03.09.2018

Arvind  Vs.  Baba Jasbirsing Kalsi and Ors.

Hon'ble Judges/Coram:
A.S. Chandurkar, J.

Citation: AIR 2019(NOC) 160 Bom.

Read full judgment here: Click here
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