PETITIONER:
T.L.MUDDUKRISHANA & ANR.
Vs.
RESPONDENT:
SMT.LALITHA RAMCHANDRA RAO
DATE OF JUDGMENT: 06/01/1997
BENCH:
K. RAMASWAMY, G.T. NANAVATI
ACT
HEADNOTE
JUDGMENT
THE 6TH DAY OF JANUARY, 1997 Present:
Hon’ble Mr.Justice K.Ramaswamy
Hon’ble Mr.Justice G.T.Nanavati
G.V. Chandrasekhar, Adv. For P.P.Singh, Adv. for the appellants.
Harish Salve, Sr.Adv., S.K.Kulkarni and Ms.Sangeeta Kumar, Advs. with him for the Respondent
ORDER
The following Order of the Court was delivered:
Leave granted.
This appeal by special leave arises from the judgment of the learned single Judge of the High Court of Karnataka, made on 29.5.1996 in CRP No.2246/93.
The admitted facts are that he appellants and the respondent entered into an agreement on March 16, 1989 for sale of plot of land 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 the respondent to comply with the conditions mentioned under the agreement, namely, to obtain Income-tax clearance certificate and from the Urban Ceiling Authority permitting the respondent to alienate the property to the appellants. 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 injunction on April 21, 1992 directing the respondent to comply with the requirements as mentioned in the agreement. 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 application was rejected by the trial Court and the rejection was affirmed by the High Court. Thus, this appeal by special leave.
Learned counsel for the appellants has contended that time is not the essence of the contract; and, the performance, though it was fixed for 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 had an oral agreement with the respondent that the agreement will be performed after the respondent obtained requisite permission from the competent authority. Thus, his contention is that the relief of specific performance 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 form that date. Whether time is the essence of the contract of 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 his case. The courts below, therefore, were correct in refusing permition 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 defence available to the defendant. article 54 of the Schedule to the Limitation Act postulated that for specific performance of a contract the period of limitation is three years from the date fixed for the performance, or, if no such date is fixed, from the date 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 extend 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. vs. smt. Kamal Rani (Dead) by LRs. [(1993) 1 SCC 519] of the constitution bench dose not help the learned counsel for the 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
fact, there is a presumption
against time being the essence of
the contract. This principle is not
in any way different from that
obtatinable in England. under the
law of equity which governs the
rights of the parties in the case
of specific performance 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
of the contract the parties named a
specific time within which
completion was to take placed
really and in substance it was
intended that it should be
completed within a reasonable time.
An intention to make time the
essence of the contract must be
expressed in unequivocal language."
After considering the question in the light of the terms of the contract made by the partied 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 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 Construction Ltd. vs. Alliances Ministries & Ors. [1995 Supp.(3) SCC 70] which relates to the amendment of the plaint. it was held 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 enterationed. the controversy in regard to the limitation was also considered by this Court in Tarlok Singh vs. Vijay Kumar Sabharwal [(1996) 3 SCALE 558] wherein this Court has that when the time has been fixed 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 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 was clearly barred by
limitation. We find force in the
sand of the appellants. We think
that parties had, by agreement,
determined he date for performance
of the contract. Thereby limitation
began to run induction laid on
December 23, 1987 would not be of
any avail nor the limitation began
to run from that date. Suit for
perpetual induction is different
from suit for specific performance.
The suit for specific performance
in fact was claimed by way of
amendment application filed under
order VI, Rule 17, CPC on September
12, 1979. It will operate only on
the application bring 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."
In Ramzan vs. Hussaini [(1990) 1 SCC 104] this Court held in paragraph 6, thus:
"The relevant provisions in the
alleged agreement of sale as quoted
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 get this
house, the description on 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
the sale deed of the said house,
written, executed and registered in
your favour".
The question in whether a date was
fixed for the performance of the
agreement and in our view the
answer is in the affirmative. It 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,
field the suit, could it be thrown
out on the ground that she was not
entitled to the specific
performance asked for? We do not
think so. she would have been
within her right to assert that she
had performed her part of the
contract and was entitled to insist
that her brother should complete
his that her brother should
complete his part. the agreement is
a typical illustration on a
contingent contract within the
meaning of Section 31 of the Indian
Contract Act, 1872 and become
enforceable 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 vs. B.M.
Shamanna Gauda expressed in
slightly different circumstances.
The doctrine of id certum est quod
certum reddj potest is clearly
applicable to the case before us
which in the language of Herbert
Broom (in his book dealing with
legal maxims) is that certainty
need not be ascertained 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 Vs. Brighton
Club and Norfolk Hotel Company,
relied upon in the Madras case.
Under an agreement, the plaintiff
had supplied some furniture to the
defendant 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 aid only if the price
was payable at a certain time.
Blackburn, J. observed that the did
not have the slightest hesitation
in saying that the agreement
contemplated a particular day,
which, when the goods were
delivered would be ascertained; and
then the money would be payable at
a certain time; but rejected the
plaintiff’s demand on the ground
that the price did not become
payable by the written instrument
at a certain time. The other
learned Judges did not agree with
him, and held that the statute did
not require that the document
should specify the time of payment
by mentionion 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. 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 the
calculation which was to make it
certain should be found therein. We
accordingly, hold that under the
agreement the date for the
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, namely, the
redemption of the mortgage; and,
immediately after the redemption by
the plaintiff, the defendant became
liable to execute the sale deed
which the plaintiff was entitled to
enforce. The period of limitation
thus started ruining on that date.
The case is therefore, covered by
the first part of Article 54 (third
column) and not the second part."
Under these circumstances, it must be held that for the purpose of limitation, what is material is that the limitation begins to run from the date the parties have stipulated for performance of the contract. The suit required to be filed within three years from the date fixed by the parties under the contract. Since the application for amendment of the plaint came to be filed after the expiry of three years, certainly in 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 action is required to be stead initially in the plaint but it was not pleaded. It was sought to be amended, along with an application for specific performance which, as stated earlier, was rejected. Under there circumstances, even by the date of filing of the application, namely, November 5, 1992, the suit was barred by limitation. the high Court, therefore, was right in refusing to permit the amendment of the plaint.
It is then contended that the appellants have already paid the substantial amount and, therefore, they will be deprived of the remedy of recover thereof. Shri Harish Salve, learned counsel for the respondent, in fairness, has stated that his client would refund by depositing in the trial Court the entire amount with interest as stipulated in the contract within a period of six months from today.
The appeal is accordingly dismissed subject to the above undertaking given by the respondent. No costs.