1996 JTR(SC) 662
1997 2 AllCJ 1071 ; 1996 27 AllLR 704 ; 1996 2 CivCC 480 ; 1996 2 CLT(SC) 219 ; 1996 1 CTC 738 ; 1996 3 ICC 815 ; 1996 4 JT 245 ; 1996 PLJ 237 ; 1996 2 PLR(SC) 649 ; 1996 2 RRR 323 ; 1996 3 Scale 558 ; 1996 8 SCC 367 ; 1996 3 SCR 879 ; 1996 WBLR 252 ; 1996 1 KLT(Online) 958 ; 1996 5 Supreme 140
1996(5) Supreme 140
SUPREME COURT OF INDIA
K. Ramaswamy and G.B. Pattanaik, JJ.
Tarlok Singh -Appellant
versus
Vijay Kumar Sabharwal -Respondent
Civil Appeal No. 7020 of 1996
(Arising out of SLP (C) No. 21458 of 1994)
Decided on 25-3-1996
Counsel for the Parties :
For the Appellant : U.R. Lalit Sr. Advocate.
For the Respondent : Prem Malhotra, Advocate.
IMPORTANT POINT
Suit for injunction amended to suit for specific performance if on date of order of amendment is barred by limitation regarding specific performance then specific performance can not be decreed.
Act
Referred
:CIVIL PROCEDURE CODE : O.6 R.17
LIMITATION ACT : Art.54
A) The Limitation Act, Article 54 of the Schedule to the Limitation Act 21 of 1963, read in conjunction with Order 6, Rule 17 of the Civil Procedure Code, governs the time within which a suit for specific performance of a contract must be instituted. The period of limitation for specific performance is three years, commencing from the date fixed for performance or, in the absence of a fixed date, from when the plaintiff has notice that performance is refused. Here, the agreement of sale provided a fixed performance period of 15 days from the vacating of an injunction, and the suit for specific performance was instituted after the expiry of this period, triggering limitation defenses under the Act and Rules.
B) Key legal principles include that a suit for specific performance is time-barred if not filed within the prescribed limitation period; the date of performance is determinable by agreement; an amendment converting a suit for injunction to specific performance does not automatically extend the limitation period; and the filing date of the suit is treated as the date of the amendment when conversion occurs. Refusal of performance by the defendant starts the limitation period, but this does not apply when the timeline is contractually fixed.
Facts of the case:
The appellant is the owner of lands, and the respondent is the successor-in-interest. The respondents father had an agreement of sale dated December 21, 1984, which was extended for execution by an agreement dated August 18, 1984, stipulating execution of the sale deed within 15 days from the order vacating an injunction. The initial suit for perpetual injunction was dismissed, and a review application was dismissed as withdrawn on March 22, 1986. The respondent instituted a suit on December 23, 1987 for perpetual injunction, which was later amended under Order 6, Rule 17 of the CPC to seek specific performance. The amendment was allowed on August 25, 1989. The High Court held that the vendor could raise the plea of limitation, noting no illegality in the trial judges order. The limitation period began on April 6, 1986, and the suit for specific performance, being filed after its expiry, was barred.
Findings of Court:
The court found that the parties had fixed a performance date under the agreement, and limitation commenced on April 6, 1986. The suit for specific performance, instituted via amendment on August 25, 1989, was time-barred. The suit for perpetual injunction could not avail of limitation extensions applicable only to specific performance, and the amendment did not relate back to an earlier filing date within the limitation period.
Issues:
Whether a suit for specific performance filed after the contractual performance period and the expiration of a limitation period is maintainable when the cause of action arises from a contract with a fixed performance timeline.
Ratio Decidendi:
Where a contract fixes a performance date, limitation runs from that date; an amendment converting a suit for injunction to specific performance does not cure a limitation bar, and a suit instituted after the expiry of the prescribed period is barred.
Result:
The appeal is allowed, the suit is dismissed, and no costs are awarded.
A) The Limitation Act, Article 54 of the Schedule to the Limitation Act 21 of 1963, read in conjunction with Order 6, Rule 17 of the Civil Procedure Code, governs the time within which a suit for specific performance of a contract must be instituted. The period of limitation for specific performance is three years, commencing from the date fixed for performance or, in the absence of a fixed date, from when the plaintiff has notice that performance is refused. Here, the agreement of sale provided a fixed performance period of 15 days from the vacating of an injunction, and the suit for specific performance was instituted after the expiry of this period, triggering limitation defenses under the Act and Rules.
B) Key legal principles include that a suit for specific performance is time-barred if not filed within the prescribed limitation period; the date of performance is determinable by agreement; an amendment converting a suit for injunction to specific performance does not automatically extend the limitation period; and the filing date of the suit is treated as the date of the amendment when conversion occurs. Refusal of performance by the defendant starts the limitation period, but this does not apply when the timeline is contractually fixed.
Facts of the case:
The appellant is the owner of lands, and the respondent is the successor-in-interest. The respondents father had an agreement of sale dated December 21, 1984, which was extended for execution by an agreement dated August 18, 1984, stipulating execution of the sale deed within 15 days from the order vacating an injunction. The initial suit for perpetual injunction was dismissed, and a review application was dismissed as withdrawn on March 22, 1986. The respondent instituted a suit on December 23, 1987 for perpetual injunction, which was later amended under Order 6, Rule 17 of the CPC to seek specific performance. The amendment was allowed on August 25, 1989. The High Court held that the vendor could raise the plea of limitation, noting no illegality in the trial judges order. The limitation period began on April 6, 1986, and the suit for specific performance, being filed after its expiry, was barred.
Findings of Court:
The court found that the parties had fixed a performance date under the agreement, and limitation commenced on April 6, 1986. The suit for specific performance, instituted via amendment on August 25, 1989, was time-barred. The suit for perpetual injunction could not avail of limitation extensions applicable only to specific performance, and the amendment did not relate back to an earlier filing date within the limitation period.
Issues:
Whether a suit for specific performance filed after the contractual performance period and the expiration of a limitation period is maintainable when the cause of action arises from a contract with a fixed performance timeline.
Ratio Decidendi:
Where a contract fixes a performance date, limitation runs from that date; an amendment converting a suit for injunction to specific performance does not cure a limitation bar, and a suit instituted after the expiry of the prescribed period is barred.
Result:
The appeal is allowed, the suit is dismissed, and no costs are awarded.
ORDER
Leave granted.
We have heard learned counsel on both sides.
2. Shorn of all the details regarding diverse litigations that went on between the parties, suffice it to state that the appellant is the owner of the lands. The respondent is successor-in-interest. The respondent s father admittedly had an agreement of sale on December 21, 1984 executed by the appellant to alienate the lands. In view of the pending proceedings time for conveyance was further extended by agreement dated August 18, 1984 stipulating that the appellant shall be required to execute the sale deed within 15 days from the date of the order vacating the injunction granted in a suit. We are informed that the suit was initially dismissed and thereafter a review application was also dismissed as withdrawn on March 22, 1986. Initially, the respondent had instituted the suit on December 23, 1987 for perpetual injunction. The application under Order 6, Rule 17, CPC came to be filed for converting the suit into one for specific performance of agreement dated August 18, 1984. That application was filed on July 17, 1989. By order dated August 25, 1989, the amendment was allowed. The appellant carried the matter in revision to the High Court in C.R. No. 2724/89. The High Court by order dated November 29, 1989 had held thus :
"I do not find any illegality or irregularity in the order passed by the trial Judge. However, the vendor will be at liberty to take a specific plea in the written statement which he will file pursuant to the amended plaint that the suit is beyond limitation and that the suit was even beyond limitation on the date when the application for amendment was filed. After the amended written statement is filed the trial Judge will frame proper issues and dispose of the same according to law."
3. In view of the above directions, the appellant has pleaded that the suit was barred by limitation. The trial Court negatived it and decreed the suit. On appeal, it was confirmed. Second Appeal No. RSA 2485/93 by order dated July 6, 1994, the Punjab & Haryana High Court dismissed it. Thus, this appeal by special leave.
4. The only question is : whether the suit is barred by limitation? Pursuant to the agreement dated December 21, 1984, time was extended for specific performance which started running after 15 days from the date the stay was vacated. It is now admitted position that review petition was dismissed on March 22, 1986. Thus, the limitation began to run on April 6, 1986. The question, therefore, is: whether the suit for specific performance is within the limitation? Article 54 of the Schedule to the Limitation Act 21 of 1963 reads thus :
"For specific performance of a contract the period of limitation is 3 years. The limitation begins to run from the date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused."
5. Shri Prem Malhotra, learned counsel for the respondent, contended that since the respondent had refused performance the suit must be deemed to have been filed on December 23, 1987 and, therefore, when the amendment was allowed, it would relate back to the date of filing the suit which was filed within three years from the date of the refusal. Accordingly, the suit is not barred by limitation. Shri U.R. Lalit, learned senior counsel for the appellant, contended that in view of the liberty given by the High Court the appellant is entitled to raise the plea of limitation. The suit filed after expiry of 3 years from 1986 is barred by limitation. The question is: as to when the limitation began to run? In view of the admitted position that the contract was to be performed within 15 days after the injunction was vacated, the limitation began to run on April 6, 1986. In view of the position that the suit for perpetual injunction was converted into one for specific performance by order dated August 25, 1989, the suit must be deemed to have been instituted on August 25, 1989 and the suit was clearly barred by limitation. We find force in the stand of the appellant. We think that parties had, by agreement, determined the date for performance of the contract. Thereby limitation began to run from April 6, 1986. Suit merely for injunction laid on December 23, 1987 would not be of any avail nor the limitation began to run from that date. Suit for perpetual injunction is different from suit for specific performance. The suit for specific performance in fact was claimed by way of amendment application filed under Order 6, Rule 17 CPC on September 12, 1979. It will operate only on the application being ordered. Since the amendment was ordered on August 25, 1989 the crucial date would be the date on which the amendment was ordered by which date, admittedly, the suit is barred by limitation. The courts below, therefore, were not right in decreeing the suit.
6. The appeal is accordingly allowed. The suit stands dismissed. No costs.
Appeal allowed.
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