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TMI Blog2006 (5) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... porated under the Companies Act, 1956 ('the Act'). The said company held and possessed the suit property situated in the District of Midnapur in the State of West Bengal. It intended to sell the said property. Respondent Nos. 1 & 2 having come to know of the said intention on the part of the company entered into an agreement for sale thereof, wherefor a sum of Rs. 6,000 was paid to the company by way of advance. The balance amount was to be paid within a period of fourteen months. As the title of the respondent No. 2 in respect of the said property was not clear, the company instituted a suit against some persons who were claiming title thereover on or about 22-5-1971. The said suit was marked as Title Suit No. 110 of 1971. In the said suit a compromise petition was filed on 3-4-1979 which having been accepted by the concerned court, a consent decree was passed on the basis thereof on 3-5-1979. Respondent No. 1 thereafter issued several [letters being dated 12-11-1979, 11-1-1980, 5-1-1981 and 8-10-1984 asking the company to ex-ecute and register a sale deed in his favour. The company in response thereto had all along been assuring the Respondent No. 1 that it would do so. 3. By a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anifest error in arriving at the finding that the suit was not barred by limitation, purported to be relying on or on the basis of the first part of article 54 of the Limitation Act whereas in this case the second part thereof could be attracted. It was urged that the respondent No. 1 in terms of the agreement for sale dated 18-4-1971 was required to pay the balance sum of Rs. 8,000 within fourteen months therefrom but even assuming that the deed of sale was to be executed and registered on perfection of title, the suit filed by the company against third parties having been decreed on 31-8-1979, the period of limitation in terms of article 54 of the Limitation Act should have been reckoned from the said date. Strong reliance in this behalf has been placed on Ramzan v. Hussaini [1990] 1 SCC 104, Tarlok Singh v. Vijay Kumar Sabharwal [1996] 8 SCC 367, T. L. Muddukrishana v. Smt. Latitha Ramchandra Rao [1997] 2 SCC 611 and Venkappa Gurappa Hosur v. Kasawwa [1997] 10 SCC 66. 10. It was further urged that in the event, the terms and conditions contained in the said agreement dated 18-4-1971 were found to be uncertain, the same would be void in terms of section 29 of the Contract Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court. The parties adduced evidence only on that basis. 17. So far as the question of limitation is concerned, the learned trial Judge held: "The letters sent by the plaintiff or his brothers on behalf of the plaintiff (exts. 8 to 11), the letter of chairman director Purushattam Roy (ext. 7) coupled with the fact of non-issuing of any notice by defendant No. 1 estate repudiating that contract proved beyond any trace of doubt that the agreement between plaintiff and defendant No. 1 estate was subsisting and was still in force and that the suit was not barred under article 54 of Limitation Act." 18. We may notice that the learned first appellate court as regards the appellants' contention that the suit was barred by limitation held : 'Next, it was vehemently argued before this court that the suit is barred by limitation as it was recited in ext. 3 that the transfer would be effective within 14 months after execution of the bainama (ext. 3). But the argument is not tenable in view of the fact that the time has been expanded by the respondent No. 2 impliedly by agreeing to transfer of the suit property as and when time comes. The respondent No. 1 and his brother despatched severa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormance of the agreement of sale and if it was so fixed, whether the suit was filed beyond the prescribed period unless any case of extension of time for performance was pleaded and established. When, however, no time is fixed for performance of contract, the court may determine the date on which the plaintiff had notice of refusal on the part of the defendant to perform the contract and in that event the suit is required to be filed within a period of three years therefrom. 21. In this case, before the trial court, the parties proceeded on the basis that the second respondent herein refused to execute and register a deed of sale in terms of the said agreement on 21-8-1985. The courts below have also arrived at a finding of fact that the time for performance of the said agreement for sale had all along been extended and even as on 16-3-1985, a director of the second respondent assured the first respondent that it would be honoured. In a suit for specific performance of contract in respect of any immovable property, time would ordinarily not be the essence of the contract. The appellant herein also did not raise any plea to the said effect. 22. A bare perusal of article 54 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e redemption of the mortgage by her. The mortgage was redeemed in 1970. It was in the aforementioned fact situation, the doctrine of id certum est quod certum redid potest (certainty need not be ascertained at the time) was applied. The said decision, therefore, is not applicable in the instant case. 24. In Tarlok Singh's case (supra), an agreement was entered into by the parties on 21-12-1984. A proceeding was pending in respect of the suit land. The time for performance was extended by an agreement dated 18-8-1984 stipulating that the appellant therein would be required to execute the same within 15 days of the order vacating the injunction which had been passed. In view of the said admitted fact, it was held that the date for performance of the contract was fixed. The order granting injunction having been vacated on 6-4-1986, the suit which was instituted on 25-8-1989, was held to be barred by limitation. 25. In T.L. Muddukrishana's case (supra), Tarlok Singh's case ( supra) was followed. 26. In Venkappa Gurappa Hosur's case (supra), a finding of fact was arrived at that the agreement was refused to be executed as far back in 1959 and in that view of the matter it was held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erformance is refused. The notice dated 24-4-1984, thus, is required to be construed in the context of the agreement dated 13-10-1982 entered into by and between the parties. There cannot be any doubt whatsoever that in respect of a contract for sale of immovable property, time is not of the essence of the contract, but the question as regard the conduct of the appellant must be considered in the backdrop of the events noticed hereinbefore." 30. The said decision has again been noticed in Gunwantbhai Mulchand Shah v. Anton Elis Farel [2006] 3 SCALE 82 wherein it has been held : "We may straightaway say that the manner in which the question of limitation has been dealt with by the courts below is highly unsatisfactory. It was rightly noticed that the suit was governed by article 54 of the Limitation Act, 1963. Then, the enquiry should have been, first, whether any time was fixed for performance in the agreement for sale, and if it was so fixed, to hold that a suit filed beyond three years of the date was barred by limitation unless any case of extension was pleaded and established. But in a case where no time for performance was fixed, the court had to find the date on which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b)a contract which, if made between private persons, would by law be valid although made by parole only and not reduced into writing, may be made by parole on behalf of the company by any person acting under its authority, express or implied, and may in the same manner be varied or discharged. (2) A contract made according to this section shall bind the company. 48. Execution of deeds-(1) A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place either in or outside India. (2) A deed signed by such an attorney on behalf of the company and under his seal where sealing is required, shall bind the company and have the same effect as if it were under its common seal." 34. Section 46 merely lays down the mode of signing contract on behalf of the company. Once a deed is executed on behalf of the company, it is company and not the persons signing can sue or be sued on the contract if the evidence is clear that the signature was only that of the company. 35. An oral agreement for sale is permissible in law. There is furthermore no dispute that the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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