Madina Begum v. Shiv Murti Prasad Pandey - Supreme Court on Period of Limitation for filing Suit of Specific Performance

Introduction

 

It is many times seen that the concepts relating to Specific Performance of Contract are not clear and due to this fact, the parties suffer a lot as sometimes even the Courts are not able to apply the law in an unambiguous manner. The instant case discusses this problem (Madina Begum & Anr. v. Shiv Murti Prasad Pandey & Ors., Civil Appeal No. 6687 of 2016). For the sake brevity, there is no need to go into the facts of the present case. Following two issues of law were framed by the Hon’ble Supreme Court in the present case:

1.        Interpretation of Article 54 of Schedule I of the Limitation Act, 1963. The instant provision provides for the prescribed period of limitation for filing a Suit of Specific Performance of a Contract.

2.         Whether the Court of First Appeal under Section 96 of the Code of Civil Procedure, 1908, can decide only the issue of limitation without going into merits or deciding the other issues in the case?

Issue I – Interpretation of Article 54 of Schedule I of the Limitation Act

Article 54 reads as follows:

“54.

For specific performance of a contract

Three years

The date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused.”

Thus we see that the Article is divided into two parts. The first part talks about the date fixed for the performance of the contract and the limitation period of three years shall start from such date. The Court said that this part is no longer res integra and the interpretation is fairly simple and straightforward i.e. three years from the date fixed for performance. The first shall be applicable only where there is a date fixed. In Ahmadsahab Abdul Mulla (2) (Dead) v. Bibijan and Ors., reported at (2009) 5 SCC 462, the Hon’ble Court said that:

“11. The inevitable conclusion is that the expression “date fixed for the performance” is a crystallized notion. This is clear from the fact that the second part “time from which period begins to run” refers to a case where no such date is fixed. To put it differently, when date is fixed it means that there is a definite date fixed for doing a particular act. Even in the second part the stress is on “when the plaintiff has notice that performance is refused”. Here again, there is a definite point of time, when the plaintiff notices the refusal. In that sense both the parts refer to definite dates. So, there is no question of finding out an intention from other circumstances.

12. Whether the date was fixed or not the plaintiff had notice that performance is refused and the date thereof are to be established with reference to materials and evidence to be brought on record. The expression “date” used in Article 54 of the Schedule to the Act definitely is suggestive of a specified date in the calendar. We answer the reference accordingly. The matter shall now be placed before the Division Bench for deciding the issue on merits.”

 In other cases, where no such date is fixed by the parties, the second part will kick in which states that the limitation period shall start when the plaintiff has notice that performance of the contract is refused. In Rathnavathi and Another v. Kavita Ganashamdas, reported at (2015) 5 SCC 223, it was held that “a mere reading of Article 54 would show that if the date is fixed for the performance of an agreement, then non-compliance with the agreement on the date would give a cause of action to file a suit for specific performance within three years from the date so fixed. But when no such date is fixed, the limitation of three years would begin when the plaintiff has notice that the defendant has refused the performance of the agreement. It was further held, on the facts of the case that it did not fall in the first category of Article 54 since no date was fixed in the agreement for its performance”.

Thus we see that there is no scope of ambiguity in a case where there is no date fixed for performance. Indubitably, such a situation shall fall within the second part of the Article 54 and the date on which the Plaintiff has the notice about refusal of the performance shall be of concern.

Issue II – Whether a First Appeal filed under Section 96 of CPC before the High Court can be decided without going into merits of the case?

This is a fairly settled issue considered by the Hon’ble Supreme Court in previous Judgments. In the instant case, the Hon’ble Court cited Vinod Kumar v. Gangadhar, reported at (2015) 1 SCC 391, in which another Judgment Madhukar v. Sangram, reported at (2001) 4 SCC 756 was referred to. The Hon’ble Court in these Judgments held that sitting as a Court of First Appeal, it is the duty of the High Court to deal with all the issues and evidence led by the parties before recording its findings.

In the case at hand, the Learned High Court only considered the issue of limitation and did not look into the other issues. According to the Hon’ble Supreme Court, such an exercise is impermissible and it remanded the matter to the High Court to decide the remaining issues in the First Appeal filed under Section 96 of CPC.

Conclusion

We see that the Hon’ble Supreme Court has not propounded any new law but has iterated its findings in the earlier Judgments and applied those findings to the present case. The issue relating to limitation in Specific Performance of a Contract is a common one and often the lawyers as well as the judges get confused in arriving at a conclusion. This confusion can be removed if the principles mentioned in this Judgments are followed namely:

1.         In case of a date fixed for performance, such date is to be considered for the purposes of limitation.

2.         In cases where there is no date fixed for the performance, the period of Limitation shall start from the time when the Plaintiff has notice that the Defendant has refused the performance of the Agreement. There is no other manner in which this provision could be interpreted and nothing could be added or subtracted in it. The allegation of limitation must fall within the abovementioned components and no other.

With respect to the finding in relation to Section 96 of the CPC, it could only be said that it is a welcome one as the High Courts often err in dealing with such cases and decide only those issues as they deem fit and ignore others. I hope that this Judgment shall serve as a beacon of light for the First Appeals pending before various High Courts.