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Tuesday, August 2, 2016

Quite independently and without reference to the aforesaid decision, another Bench of this Court in Rathnavathi and Another v. Kavita Ganashamdas[2] came to the same conclusion. It was held in paragraph 42 of the Report 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.The Clauses of the agreement for consideration in Rathnavathi were Clauses 2 and 3 and they read as follows:- “2. The purchaser shall pay a sum of Rs. 50,000 (Rupees fifty thousand only) as advance to the seller at the time of signing this agreement, the receipt of which the seller hereby acknowledges and the balance sale consideration amount shall be paid within 60 days from the date of expiry of lease period. 3. The seller covenants with the purchaser that efforts will be made with the Bangalore Development Authority for the transfer of the schedule property in favour of the purchaser after paying penalty. In case it is not possible then the time stipulated herein for the balance payment and completion of the sale transaction will be agreed mutually between the parties.” As far as the present appeal is concerned, the agreement between Gulab Bai and Madina Begum did not specify a calendar date as the date fixed for the performance of the agreement. Consequently, the view expressed in Ahmadsahab Abdul Mulla and Rathnavathi on the first part of Article 54 clearly applies to the facts of the case. In taking a contrary view, ignoring the absence of a specified date for the performance of the agreement and reversing the Trial Court, the High Court has fallen in error.; whether the High Court was right in merely deciding the issue of limitation in a first appeal filed under Section 96 of the Code of Civil Procedure without going into the merits of the case. Quite recently, in Vinod Kumar v. Gangadhar[3] this Court had occasion to consider the issue whether, under Section 96 of the Code of Civil Procedure, the first appellate court ought to decide all the issues before it or not. - the High Court only considered the issue of limitation and did not consider the other issues in the appeal. This was impermissible. The result is that since we do not agree with the view taken by the High Court on the issue of limitation, there is no option but to set aside the view expressed by the High Court and following the decisions of this Court, remand the matter to the High Court to decide the remaining issues in the first appeal filed under Section 96 of the Code of Civil Procedure.

                                                                  REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 6687 OF 2016

Madina Begum & Anr.                           .…Appellants
  versus
Shiv Murti Prasad Pandey & Ors.                   .…Respondents

                               J U D G M E N T
Madan B. Lokur, J.
1.     The two questions for our consideration are whether  the  suit  filed
by the appellant Madina Begum was barred  by  limitation  in  terms  of  the
first part of Article 54 of Schedule 1  of  the  Limitation  Act,  1963  and
whether the High Court ought to have  decided  the  first  appeal  filed  by
Madina Begum not only on the preliminary issue of  limitation  but  also  on
all other issues.  As far as the first question is concerned our  answer  is
in the negative and as far as the  second  question  is  concerned,  in  our
opinion, the High Court ought to have  considered  all  the  issues  in  the
first appeal rather than only the preliminary issue of limitation.
2.     The land in dispute in this appeal  is  1.63  acres  of  agricultural
land bearing khasra nos. 438, 439,  440  and  456  (total  area  being  2.13
acres) in Patwari Halka No. 26 Gram Amkhera, Tehsil and District Jabalpur.
3.     There was a dispute about the title of the entire aforesaid land  and
to resolve that  dispute,  Gulab  Bai  claiming  to  be  the  owner  and  in
possession of the entire land, filed Suit No. 479A of 1994 in the  Court  of
the Additional District Judge in Jabalpur.  The defendants in the suit  were
Amar Singh and Jaswant Singh.  The prayer made by Gulab Bai  in  her  plaint
was for a declaration with regard to her title  and  possession.   She  also
prayed for an injunction restraining the defendants Amar Singh  and  Jaswant
Singh from interfering with her possession.
4.     On 2nd August, 2001 the suit was decreed in favour of Gulab  Bai  and
thereafter on 3rd September, 2001 she entered  into  an  agreement  to  sell
1.63 acres of agricultural  land  being  the  disputed  property  to  Madina
Begum.  The consideration for the sale was Rs. 4,89,000/- out  of  which  an
advance of Rs. 1,25,000/- was paid by Madina Begum to Gulab Bai.  This  fact
is recorded in the agreement to sell.
5.     What we are concerned with in this appeal is  the  interpretation  of
Clause 3 of the agreement to sell which reads as follows:-

“3 That Party no. 1 has sold 1.63 acres land at the rate of  Rs.  3,00,000/-
(Rs. Three lakh) per acre and  Party  no.  1  Gulab  Bai  has  obtained  Rs.
1,25,000/- (One lakh twenty five thousand) as  advance.   The  rest  of  the
amount of Rs. 3,64,000/- (Rs. Three lakh sixty four thousand) would be  paid
by Party no. 2 to Party no. 1 within the period  of  six  months  from  this
date and having received it the party no. 1 will execute Benama Registry  in
favour of Party no. 2 or any such person specified by party  no.  2  in  one
part or many parts.”

6.     Apparently on coming to know that Gulab Bai had agreed  to  sell  the
disputed land to Madina Begum an appeal being F.A. No.399 of 2001 was  filed
by Amar Singh and  Jaswant  Singh  in  the  High  Court  of  Madhya  Pradesh
challenging the decree dated  2nd  August,  2001.   An  interim  application
under Order XXXIX Rules 1 and 2 of the Code of  Civil  Procedure  was  filed
along with the appeal. The application was taken  up  for  consideration  on
22nd September, 2001 and while issuing notice  in  the  application  it  was
directed as follows:-
“In the meanwhile till the disposal of M(C) P.  No.  3231/2001,  status  quo
regarding possession over the suit property  shall  be  maintained  and  the
respondent shall not alienate the suit property.”

7.     On  16th  November,  2001  Gulab  Bai  executed  a  Will  (which  was
registered) in which she categorically mentioned  that  she  had  negotiated
the sale of 1.63 acres of land to Madina  Begum  and  had  given  possession
thereof to her but  the  remaining  amount  and  registration  of  the  sale
remained to be completed.  In her  Will,  Gulab  Bai  appointed  Shiv  Murti
Prasad Pandey  and  Devendra  Prasad  Pandey  (respondents  herein)  as  her
executors.  The Will mentioned that upon her demise, her  agricultural  land
except 1.63 acres will devolve on Shiv  Murti  Prasad  Pandey  and  Devendra
Prasad Pandey and in the event of her death before the registration  of  the
sale deed it would be their responsibility to execute and register the  sale
deed in favour of Madina Begum. Unfortunately, Gulab Bai passed away on  2nd
January, 2002.
8.     Thereafter, F.A. No. 399 of 2001 filed  by  Amar  Singh  and  Jaswant
Singh was heard by  the  High  Court  and  came  to  be  dismissed  on  28th
September, 2006.  We are told that the decree passed by the High  Court  has
attained finality.
9.     Upon the dismissal of the aforesaid appeal, it  appears  that  Madina
Begum required Shiv Murti  Prasad  Pandey  and  Devendra  Prasad  Pandey  to
execute the sale deed but apparently they did not take  any  steps  in  this
regard.  On the contrary, it appears that on or about 2nd August,  2008  the
land in dispute was mutated in the name of Anita Jain  pursuant  to  a  sale
made in her favour by Shiv Murti Prasad Pandey and Devendra Prasad Pandey.
10. When Madina Begum came to know of the transfer  of  the  disputed  land,
she sent a notice to Shiv Murti Prasad Pandey and Devendra Prasad Pandey  on
13th August, 2008 calling upon them to execute the sale  deed  in  terms  of
the agreement to sell dated 3rd September, 2001 and  the  Will  executed  by
Gulab Bai on 16th November, 2001.  The notice was replied to by  Shiv  Murti
Prasad Pandey and Devendra Prasad Pandey and we are told that they  declined
to execute the sale deed.  This led to Madina Begum  filing  a  suit,  inter
alia, for specific performance of the agreement being Suit No. 17A  of  2008
(perhaps renumbered later as 41A of 2010) in the  Court  of  the  Additional
District Judge, Jabalpur.
11. The defendants in the suit namely Shiv Murti Prasad Pandey and  Devendra
Prasad Pandey and Anita Jain filed their written statement and  one  of  the
contentions raised was that the suit was barred by  limitation  having  been
instituted more than three years beyond the date specified in the  agreement
to sell dated 3rd September, 2001. It was also submitted that  Madina  Begum
had given an advance of only Rs. 90,000/- which had since been  returned  to
her and that on 19th November, 2001 the agreement to sell between Gulab  Bai
and Madina Begum was cancelled.
12. On the pleadings, one of the issues framed by the Trial Court was  issue
No. 8: Whether the suit is time barred?
13. The Trial Court considered the issue whether the suit  filed  by  Madina
Begum was barred by time and answered it in the negative.  It  was  held  in
paragraph 38 of the decision rendered on 1st February, 2011 as follows:-

“38. On perusal of the record it is gathered  that  agreement  Ex.  P-1  was
executed on 03.09.2001 and thereafter stay has been granted by Hon’ble  High
Court in first appeal  on  22.09.2001  but  the  first  appeal  was  finally
decided on 28.09.2006 vide Ex. P-5  since  it  was  dismissed  and  in  this
manner, the stay order had become ineffective  on  28.09.2006.   Thereafter,
the plaintiffs have sent notice to the defendants in August 2008 i.e.  after
two years from the date of decision in the first appeal which was  dismissed
on 28.09.2006 which was  done  within  prescribed  period  of  three  years.
Therefore, it cannot be said that the plaintiffs had filed the  suit  beyond
the period of limitation with  a  view  to  harass  the  defendants.   Thus,
issues No. 8 and 9 are being answered against the defendants.”

14. Even though the issue of limitation was decided in her favour, the  suit
filed by Madina Begum was dismissed on  merits.  Feeling  aggrieved  by  the
dismissal of the suit on merits Madina Begum preferred First Appeal No.  175
of 2011 in the High Court of Madhya Pradesh and that  led  to  the  impugned
judgment and order dated 16th August, 2013.  The Division Bench hearing  the
appeal did not go into the merits of the dispute  between  the  parties  but
only adverted to the issue of limitation and since it  was  found  that  the
institution of the suit was barred by time (contrary to  the  conclusion  of
the Trial Court) there was no necessity of considering  the  merits  of  the
case.
15. In coming to the conclusion that the suit was barred by time,  the  High
Court considered Article 54 of Schedule 1 of the Limitation Act,  1963  (for
short, “the Act”).  The  discussion  thereon  was  brief  and  it  reads  as
follows:-

    “Under Article 54 of  the  Limitation  Act,  the  prescribed  period  of
limitation for filing a suit of specific performance of a contract is  three
years and the period of three years  has  to  be  calculated  based  on  two
contingencies i.e. the date fixed for performance of the contract or  if  no
such date is fixed, the date when the plaintiffs had  notice  about  refusal
of the performance by the defendants.  In this case, admittedly, a date  for
performance is fixed i.e. six months from  the  date  of  execution  of  the
contract and, therefore, as a specific period for performance is fixed,  the
period of limitation would be three years w.e.f.  3.03.2002  i.e.  the  date
when the period of six months for execution of the sale-deed lapsed.”

16. The High Court held that since the suit was barred  by  limitation,  the
Trial Court committed a grave error in recording a  finding  that  the  suit
was within limitation.
17. The interpretation of the first part of Article 54 of Schedule 1 of  the
Act is no longer res-integra. Article 54 reads as follows:-
|“54. |For specific performance of |Three years|The date fixed for the |
|     |a                           |           |performance, or, if no |
|     |contract                    |           |such date is fixed,    |
|     |                            |           |when the plaintiff has |
|     |                            |           |notice that performance|
|     |                            |           |is refused.”           |


18. In Ahmadsahab  Abdul  Mulla  (2)  (Dead)  v.  Bibijan  and  Ors.[1]  the
following question was considered by a three  judge  Bench  of  this  Court:
“Whether the use of  the  expression  “date”  used  in  Article  54  of  the
Schedule to the Limitation Act, 1963 (in short “the Act”) is  suggestive  of
a specific date in the calendar?”
19. While answering this question on a reference made  to  the  three  judge
Bench, this Court considered the meaning of  the  word  “date”  and  “fixed”
appearing in Article 54.  Upon such consideration, this Court held that  the
expression “date fixed for the performance” is a crystallized notion.   When
a date is fixed it means  there  is  a  definite  date  fixed  for  doing  a
particular act.   Therefore,  there  is  no  question  of  finding  out  the
intention from other circumstances.  It was reiterated that  the  expression
“date” is definitely  suggestive  of  a  specified  date  in  the  calendar.
Paragraphs 11 and 12 of the Report in this  regard  are  of  importance  and
they read as follows:-

“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.”

20.    Quite independently and without reference to the aforesaid  decision,
another  Bench  of  this  Court  in  Rathnavathi  and  Another   v.   Kavita
Ganashamdas[2] came to the same conclusion.  It was held in paragraph 42  of
the Report 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.
21.    The Clauses of the agreement for consideration  in  Rathnavathi  were
Clauses 2 and 3 and they read as follows:-

 “2. The purchaser shall pay a sum of  Rs.  50,000  (Rupees  fifty  thousand
only) as advance to the seller at the time of signing  this  agreement,  the
receipt of which  the  seller  hereby  acknowledges  and  the  balance  sale
consideration amount shall be paid within 60 days from the  date  of  expiry
of lease period.
3.  The seller covenants with the purchaser that efforts will be  made  with
the Bangalore  Development  Authority  for  the  transfer  of  the  schedule
property in favour of the purchaser after paying penalty.   In  case  it  is
not possible then the time stipulated herein for  the  balance  payment  and
completion of the sale transaction  will  be  agreed  mutually  between  the
parties.”

22.    As far as the present appeal  is  concerned,  the  agreement  between
Gulab Bai and Madina Begum did not specify  a  calendar  date  as  the  date
fixed  for  the  performance  of  the  agreement.  Consequently,  the   view
expressed in Ahmadsahab Abdul Mulla and Rathnavathi on  the  first  part  of
Article 54 clearly applies to the facts of the case. In  taking  a  contrary
view, ignoring the absence of a specified date for the  performance  of  the
agreement and reversing the Trial  Court,  the  High  Court  has  fallen  in
error.
23. It is not necessary for  us  to  multiply  authorities  on  the  subject
particularly when the issue has been conclusively  settled  by  a  Bench  of
three learned judges of this Court in Ahmadsahab Abdul Mulla and we  see  no
reason to take a different view.
24. The second question that requires  consideration  is  whether  the  High
Court was right in merely deciding  the  issue  of  limitation  in  a  first
appeal filed under Section 96 of the Code of Civil Procedure  without  going
into  the  merits  of  the  case.   Quite  recently,  in  Vinod   Kumar   v.
Gangadhar[3] this Court had occasion to consider the  issue  whether,  under
Section 96 of the Code of Civil Procedure, the first appellate  court  ought
to decide all the issues before it or not.  Reference was  made  to  a  very
large number of decisions rendered by  this  Court  and  it  was  concluded,
particularly relying upon Madhukar v.  Sangram[4]  decided  by  a  Bench  of
three learned judges of this Court 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.
25. In so far as the present  appeal  is  concerned,  the  High  Court  only
considered the issue of limitation and did not consider the other issues  in
the appeal. This was impermissible. The result  is  that  since  we  do  not
agree with the view taken by the High Court  on  the  issue  of  limitation,
there is no option but to set aside the view expressed  by  the  High  Court
and following the decisions of this Court, remand the  matter  to  the  High
Court to decide the  remaining  issues  in  the  first  appeal  filed  under
Section 96 of the Code of Civil Procedure.
26. It is a little unfortunate that the  parties  have  to  undergo  another
round of litigation which could easily have  been  avoided  if  the  settled
legal principles laid down by this Court from time to time were followed  in
regard to the requirements of Section 96 of the  Code  of  Civil  Procedure.
This is quite apart from the delay caused in the resolution of  the  dispute
between the parties.
27. In view of our discussion,  the  appeal  is  allowed  and  the  impugned
judgment and order of the High Court dated 16th August, 2013  is  set  aside
and the matter is remanded to the High  Court  for  deciding  the  remaining
issues in the appeal on merits.


      ...………………….J                                                 (Madan B.
                                                                      Lokur)



                                                                 ..………………….J

New     Delhi;                                                         (R.K.
Agrawal)
August 1, 2016
-----------------------
[1]  (2009) 5 SCC 462
[2]  (2015) 5 SCC 223
[3]  (2015) 1 SCC 391
[4]  (2001) 4 SCC 756

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