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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                          O R D E R      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

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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.

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    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

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    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

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    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

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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.