Summary
A suit for specific performance was filed in September 1993 on an agreement of 17.12.1989 that fixed execution of the sale deed within one month. Limitation under Article 54 of the Limitation Act ran from that fixed date and expired on 16.01.1993; a clause saying the agreement would be 'valid' for five years did not change the date fixed for performance. The suit was held time-barred and dismissed, but the defendants were directed to refund the Rs. 80,000 received, with 12% interest.
Issues
- Whether the suit for specific performance was barred by limitation under Article 54 of the Limitation Act, 1963.
- Whether a clause stating that the agreement to sell would remain valid for five years extended the date fixed for performance.
- What relief should be given to the plaintiffs for the consideration they had paid, although no refund was claimed.
Provisions considered
- Article 54 of the Schedule, Limitation Act, 1963A suit for specific performance must be filed within three years from the date fixed for performance or, if none is fixed, from when the plaintiff has notice of refusal. As the agreement fixed performance within one month, i.e. by 16.01.1990, the period expired on 16.01.1993 and the suit filed in September 1993 was out of time. (¶¶ 8, 9, 10, 11)
Held
- Where the agreement fixes a date for performance, limitation under Article 54 runs from that date. The 17.12.1989 agreement required the sale deed to be executed within one month, so time began on 16.01.1990 and ended on 16.01.1993; the suit instituted in September 1993 was barred. (¶¶ 8, 9)
- The validity of an agreement is distinct from the date fixed for its performance. A clause that the agreement would remain valid for five years did not alter the one-month date of performance, and the First Appellate Court and High Court erred in relying on it. (¶ 10)
- As the suit failed on limitation alone, the Court did not decide the other issues, including whether the agreement was genuine. (¶¶ 8, 11)
- To do complete justice, although the plaintiffs had not sought a refund, the defendants were directed to return the Rs. 80,000 paid towards the sale consideration with 12% simple interest. (¶¶ 12, 13)
Result
Appeal allowed; High Court order set aside and suit dismissed as time-barred; appellants to refund Rs. 80,000 with 12% per annum simple interest from the date of payment till repayment, within three months; no costs.