Holding

The limitation period for specific performance begins from the date fixed for performance, and an amendment seeking specific performance filed after the three‑year period is barred.

Summary

The appellants entered into a sale agreement for a plot of land with the respondents, fixing May 28, 1989 as the date for performance. The respondents repudiated the contract after the appellants had issued a notice to obtain tax clearance and urban ceiling authority permission. The appellants filed a suit for mandatory injunction on April 21, 1992, and later, while the suit was pending, applied on November 5, 1992 under Order VI Rule 17 CPC to amend the plaint to seek specific performance. The trial court and the Karnataka High Court rejected the amendment, holding the suit barred by limitation. The Supreme Court affirmed that under Article 54 of the Limitation Act, 1963 the limitation period for specific performance begins from the date fixed for performance, irrespective of whether time is the essence, and therefore the amendment filed after three years was time‑barred. The appeal was dismissed, with the respondent undertaking to refund the amount with interest.

Issues considered

Whether the limitation period for a suit for specific performance begins from the date fixed for performance under Article 54 of the Limitation Act, 1963.
Whether the fact that time may not be the essence of the contract affects the running of the limitation period.
Whether the amendment of the plaint seeking specific performance filed after the expiry of three years is permissible.

Legislation cited

Code of Civil Procedure, 1908s. Order VI Rule 17
Limitation Act, 1963s. Article 54 of the Schedule, s. Section 3

Subjects

specific performancelimitation periodamendment of plaintcontract lawcivil proceduremandatory injunctiontime of performance

Judgment

T.L. MADDUKRISHANA AND ANR. A
v.
SMT. LALITHA RAMCHANDRA RAO

JANUARY, 6, 997

[K. RAMASWAMY AND G.T. NANAVATI, JJ.] B

Code of Civil Procedure, 1908 : Order 6 Rule l7-Amend111ent of
plai11t-Pennissibility of

• Li111itatio11 Act, 1963 : Sectio11 3-Schedule-A1ticle 54---Suit for C
specific perfonna11ce-Li111itation pe1iod for.

Agree111ent of sale of plot betwee11 appellants a11d respondents-The
date for the pe1fomwnce of the contract was ftxed as May 28, 1989-Appel-
la11ts calling upon the respo11dents to comply with the tenns of the agree111e11t:
to obtain Income-tax clearance ce1tificate and pemiission from the Urban D
Ceiling Autho1ity to alienate the prope1ty to the appellant~~Respondents
repudiating the contract-Suit filed by appellallts for mandato1y injunction
directing the respondents to comply with the requirements-Dwing pendency
of suit appellants made an application 011 November 5, 1992 under Order VI,
Rule 17 of the CPC for amending the plaint and seeking specific perfonnance E
of the contract-Application rejected by the T1ial Cowt-Rejection affinned
by the High Cowt-Appeal-Held for the pwpose of limitation, what is
mate1ial is that the limitation begins to nm from the date the pmties have
stipulated for pe1fonnance of the contract-The suit is required to be filed
within three years from the date ftxed by the palties under the contract-Since
the application for ame11dme11t of the plaint came to be filed after the expi1y F
of three years, ce1tainly it cha11ged the cause of action as required to be
specified in the plaim-The suit for 111a11dato1y injunction was filed a11d the
specific pe1fo1111ance was sought for by way of an amendment-T71e cause of
action was required to be stated initially i11 the plaint but it was not
pleaded-It was sought to be amended, alongwith an application for specific G
perfon11a11ce which was rejected-T11erefore even by the date of filing of the
,.-, application, namely, November 5, 1992, the suit was ba1Ted by limita-
tiort-T71e High Coult, therefore, was right in refusing to pem1it the amend-
ment of the plaint.

Smt. Chand Rani (dead) by Lrs. v. Sml Kanta Rani (dead) by Lrs., H
11
\

12 SUPREME COURT REPORTS [1997) 1 S.C.R.

A [1993] 1 SCC 519; K. Raheja Co11st111ctioii Ltd. v. Alliances Ministlies &
01:~., [1995] Supp. 3 SCC 70; Tarlok Singh v. Vijay Kumar Sahhafwal, (1996)
3 SCALE 558 and Ramza11 ~lfussaini, [1990] 1 SCC 104, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 104 of
1997. -
B
From the Judgment and Order dated 29.5.96 of the Karnataka High
Court in C.R.P. No. 2246 of 1993. r·

G.V. Chandrasekhar for P.P. Singh for the Appellants.

c I
Harish Salve, S.K. Kulkarni and Ms. Sangeeta Kumar for the •
Respondent.

The following Order of the Court was delivered :

Leave granted. This appeal by special leave arises from the judgment
D of the learned single Judge of the High Court of Karnat~ka, made on
29.5.1996 in CRP No. 2246/93.
:,.,1
The admitted facts are that the appellants and the respondent ·
entered into an agreement on March 16, 1989 for sale of plot of land
E bearing No. 114/8 situated at Peenya Industrial Suburb II Stage, Peenya
Village, Bangalore for a consideration of Rs. 64 lakhs. The date for the
performance of the contract was fixed as May 28, 1989. The appellants
issued notice on October 2, 1989 calling upon th~ respondent to comply
with the conditions mentioned under the agreement, namely to obtain
Income-tax clearance certificate and• from the Urban Ceiling Authority
F' permitting the respondent to alienate the property to the appeHants. The
respondent had issued a notice on November 6, 1989 repudiating the
contract though the execution thereof was admitted. The appellants then
filed a suit' for mandatory injunctio~ on April 21, 1992 directing the
respol).dent to comply with the requirements as mentioned in the agree-
G ment. While the suit was pending, the appellants made an application on
November 5, 1992 under Order VI, Rule 17 of the CPC for amending the
plaint and seeking specific performance of the contract. The said applica-
tion was rejected by the trial Court and the rejection was affirmed by the
High Court. Thus, this appeal by special leave.

H Learned counsel for the appellants has contended that time is not
T.L.M. KRISHANA v. SMT. L.R. RAO 13

the essence of the contract; and, the performance, though it was fixed for A
May 28, 1989, the other clauses relating to payment of interest for the
delayed period of performance would indicate that the time is not essence
of the contract. The application, therefore, could not have been dismissed
at that stage. It is further contended that the appellants held an oral
agreement with the respondent that the agreement will be performed after
the respondent obtained requisite permission from the competent B
authority. Thus, his contention is that the relief of specific perf~rmante was
not barred by limitation. It is then contended for the respondent that by
operation of first clause of Article 54 of the Schedule to the Limitation
Act, 1963, once the date has been fixed for the performance limitation
begins to run from that date. Whether time is the essence of the contract C
or not is not relevant for the purpose of deciding the question of limitation.
In the agreement, time having been fixed for performance of the contract
as May 28• 1989, the limitation began to run under the first clause from
that date. The second clause, therefore, has no application to the facts in
this case. Tht; courts below, therefore, were correct in refusing permission D
for amendment of the plaint introducing specific relief of performance.

It is seen that limitation under Section 3 of the Limitation Act is one
of the defences available to the defendant. Article 54 of the Schedule to
the Limitation Act postulates that for specific performance of a contract
the period of limitation is three years from the dated fixed for the perfor- E
mance, or, if no such date is fixed, from the date the plaintiff has notice
that performance is refused. Under first part of Article 54, once date for
performance of the contract has been fixed by the parties, the limitation
begins to run from that date and specific performance of the contract could
be had within three years from that date unless the parties by an agreement F
extent the fixed time. In this case, date was fixed for performance, i.e., May
28 1989. The question whether or not the time is the essence of the contract
is not of much relevance since the case falls in first part of Article 54? The
decision relied on by the learned counsel for the appellant in Smt. Chand
Rani (dead) by Lrs. v. Smt. Kamal Rani (Dead) by Lrs., (1993] 1 SCC 519
of the Constitution Bench doe!i not help the learned counsel for the G
appellant. In that case, this Court has reviewed the entire case law and
need for reiteration is obviated. The Court held thus :

"It is well-accepted principle that in the case of sale of immovable
property, time is never regarded as the essence of the contract. In H
14 SUPREME COURT REPORTS [1997] 1 S.C.R.
\
A fact, there is a presumption against time being the essence of the
contract. This principle is not ill any way different from that
obtainable in England. Under the law of equity which governs th~
rights of the parties in the case of specifii;: perfonnance of contract
to sell real estate, law looks not at the letter but at the substance
of the agreement. It has to be ascertained whether under the terms
B of the contract the parties named as specific time within which
completion was to take place, really and in substance it was
'r
intended that it should be completed within a reasonable time. An
intention to make time the essence of the contract must be ex-
pressed in unequivocal language."
c
After considering the question in the light of the terms of the
contract made by the parties extracted in paragraphs 25 and 26 of the
judgment, the Constitution Bench concluded in paragraph 28 that the
parties intended to make time as the essence of the contract. The contract
D was to be performed within a particular period and the respondent had
repudiated the contract. Under those circumstances, it was held that the
time was an essence of the contract. The same ratio was reiterated by this
Court in K. Raheja Constniction Ltd. v. Alliances Minstries & Ors., (1995)
Supp. 3 SCC 70 which relates to the amendment of the plaint. It was held
E therein that since the party had repudiated the agreement, the limitation
began to run from that date. Since the application for amendment of the
plaint was filed after the expiry of three years, the same could not be
entertained. The controversy in regard to the limitation was also con-
sidered by this Court in Tarlok Singh v. Vijay Kumar Sabha/Wal, (1996) 3
SCALE 558 wherein this Court has held that when the time has been fixed
F for performance of the contract by operation of Article 54 of the Limitation
Act, the time begins to run from the date fixed by the parties. The Court
observed thus :

"The question is : as to when the limitation began to run? In view
G 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 tkat the suit for
perpetual injunction was converted into one for specific perfor-
mance by order dated August 25, 1989, the suit was clearly barred
H by limitation. We find force in the sand of the appellants.We thiDk
T.L.M. KRISHANAv. SMT. L.R. RAO 15

that parties had, by agreement, determined the date for perfor- A
mance 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 B
by way of amendment application filed under order YI, 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 C
the suit.

In Ramzan v. Hussaini, [1990] 1 SCC 104 ~his Court held in para-
graph 6, thus :

"The relevant provisions in the alleged agreement of sale as quoted D
in the judgment of the trial Court reads as follows :

"This house is under mortgage with Jethamal Bastimal for Rs.
1000. When you will get this house, the description of which is
given below, redeemed from M/s. Jethamal Bastimal and take the
papers of the registry in your possession, on that day I will have E
the sale deed of the said house, written, executed and registered
in your favour."

The question is whether a date was fixed for the performance of
the agreement and in our view the answer is in the affirmative. It F
is true that a particular date from the calendar was not mentioned
in the document and the date was not ascertainable originally, but
as soon as the plaintiff redeemed the mortgage, it became an
ascertained date. If the plaintiff had, immediately after the
redemption, filed the suit, could it be thrown out on the ground
that she was not entitled to the specific performance asked for? G
We do not think so. She would have been within her rights to assert
that she had performed her part of the contract and was entitled
to insist that her brother should complete his part. The agreement
is a typical illustration of a contingent contract with the meaning
of Section 31 of the India Contract Act, 1872 and became enfor- H
16 SUPREME COURT REPORTS f.1997] 1 s. C.R.

A ceable as soon as the even of redemption (by the plaintiff herself)
happened. We agree with the view of the Madras High Court in
R. Muniswami Goundar v. B.M. Shamanna, Gauda expressed in
slightly different circumstances. The doctrine of id ce1tum est quad
ce1tl1111 reddi potest is clearly applicable to the case before us which
B in the language of Herbert Broom (in his book dealing with legal
maxims) is that certainty need not be (11;Certained at the time; for
if, in the fluxion of time, a day will arrive which will make it certain,
that is sufficient. A similar question had arisen in Duncombe v.
Biighton Club and Norfolk Hotel Company, relied upon in the
Madras case. Under an agreement, the plaintiff had supplied some
c furniture to the dtfendant for which payment was made but after
some delay. He claimed interest. The rule at common law did not
allow interest in such a case, and the plaintiff in support of his
claim relied upon a statutory provision which could come to his
<!id only if the price was payable at a certam time. Blackburn, J.
D observed that he did not have the slightest hesitation in saying that
a
the agreement contemplated particular day, which, when the
goods were delivered would be ascertained; and then the money
wouW be payable at a certain time; 1'>.:t • t:Jected the plaintiffs
demand on the ground that the price did not become payable by
E the written instrument at a certain time. The other learned Judges
did not agree with him, and held that t:.e statute did not require
that the document should specify the time of payment by mention-
ing the day of payment. If it specified the event upon which the
payment was to be made, and if the time of event was capable of
being ascertained the requirements of the action were satisfied.
F The same is the position in the case before us. The requirement
of Article 54 is not that the actual day should necessarily be
ascertained upon the face of the deed, but that the basis of Yte
calculation which was to make it certain should be found therein.
We, accor.dingly, hold that under the agreement the date for the
G defendant to execute the sale deed was fixed, although not by
mentioning a certain date but by a reference to the happening.of
a certain event, nam.cl¥, the redemptioa of the mortgage; and,
ilDl!lediately after the redemption by the plaintiff, the defendant
became liable to execute the sale deed which the plaintiff was
H entitled to enforce. The period of limitation thus started running
T.L.M.-KRISJ!bNA V:-SM'.f. L.R. RAO 17
.J.
on that date. The case is, therefore, covered by the &st pan cl A
A-rtisle -54 _ft,hi'!"d column) and not t4te second part."

.. .Unde'.r~e--cirrmnstances,-it must be held that for the purpose of
Ttmitatioo, What is materia1 is that the limitation begins to rwilrom the date
the parties have stipulated for performance of the ~ontract. The suit is
required to be filed within three ye11rs from the date fixed by the parties B
under the contr~ct. Since the application for amendment of the plaint came
to be filed after the expiry of three years, certainly it changed the cause of
action as required to be specified in the plaint. The suit for mandatory
injunction is filed and the specific performance was sought for by way of
an amendment. The cause of attion -is required to be stated initially in the C
plaint btit it was not pieaded. It was sought to be amended, -alongwith an
application for specific performance which, as stated earlier, was rejected.
Under these circumstances, even by the date of filing of the application,
namely, November 5, 1992, the Sllit was barred l3y 1imitation. The High
Court, therefore, was right in refusing to permit the. amendment of the
plaint. D
It is then contended that the appellants have already paid the sub-
stantial amount and, therefore, they will be deprived of the remedy of
recovery thereof. Shri Harish Salve, learned counsel for the respondent, in
fairness, has stated that his client would refund by depositing in the trial E
Court the entire amount with interest as stipulated in the contract within
a IJeriod sf six months from today.

The appeal is accordingly dismissed subject to the above undertaking
~ given by the respondent. No costs.

T.N.A. Appeal dismissed. F