Specific Performance Suit's Limitation Period Runs From Date For Performance & Not From Expiry Of Agreement's Validity : Supreme Court

The Supreme Court recently held that the limitation period for a specific performance suit will run from the date fixed for the performance and not from the expiry of the validity of the agreement.

Setting aside the concurring findings of the High Court and Appellate Court, the bench comprising Justices Vikram Nath and Prasanna B Varale observed :

“The First Appellate Court and the High Court went on the consideration that the agreement further recorded that this agreement would remain valid for a period of five years from today's date i.e. date of the execution of the agreement to sell. Placing reliance on this clause, in our considered opinion, is totally irrelevant. The performance was to take place within one month. The validity of the agreement is something different and does not change the date of performance. What was the reason for incorporating this clause of validating the agreement for five years is not spelled out in the agreement, but in any case, it does not change the date fixed for the performance.”, the court said.

Reference was made to Article 54 of the Limitation Act 1963 in this regard.

In the present case, the sale deed was to be executed within one month from the date of the said agreement i.e., 17.12.1989. The period of one month would expire on 16.01.1990, therefore the limitation period would be three years from the said date, which would expire on 16.01.1993.

Upon the failure of the Appellant to execute the sale deed, the respondent preferred a suit seeking specific performance of the agreement in September 1993 i.e., beyond three years limitation when calculated from 16.01.1993.

The respondent argued that the validity of the sale agreement would remain valid for five years from the date of the execution of the agreement to sell. Therefore, the period of limitation of three years shall be counted from the date of expiry of the agreement's validity. Hence, the suit cannot be dismissed on the ground of limitation.

Rejecting the respondent's contention, the court opined that the three-year limitation period would not be counted from the date of expiry of the agreement's validity as the validity doesn't change the date of the performance.

In essence, the court said it is the date of performance of the contract which is necessarily be culled out from the agreement which determines the period of limitation, and the period of limitation would be counted from the date of the performance of the contract.

Accordingly, the appeal was allowed and the impugned judgments of the courts below were set aside.

Appearance:

For Petitioner(s) Mr. Ajay Kumar, AOR Mr. Nirmal Kishore, Adv. Mr. Keshav Maheshwari, Adv.

For Respondent(s) Mr. Rohit Kumar Singh, AOR Mr. Abhishek Sharma, Adv. Mr. Shivam Sharma, Adv. Mr. Akash Kumar, Adv.

Case Details: USHA DEVI & ORS. VERSUS RAM KUMAR SINGH & ORS., CIVIL APPEAL NO. 8446 OF 2024

Citation : 2024 LiveLaw (SC) 568

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