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TMI Blog2006 (3) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 19.11.1993, the plaintiffs filed the suit on 4.4.1994 for specific performance of the agreement dated 18.12.1964 and for a perpetual injunction restraining the defendants from interfering with their possession of the suit property. It may be noted that defendant No. 1 claims to have sold the property and the same has subsequently been purchased by defendant No. 4 from that vendee. 2. It was averred in the plaint that pursuant to the agreement for sale, the predecessor-in-interest of the plaintiffs, had paid the entire consideration in terms of the agreement and he was in possession of the property. The plaint implied that there remained nothing to be performed on the part of the plaintiffs on the terms of the agreement for sale and since on 19.11.1993, the plaintiffs came to know that the defendants were refusing to perform their part of the agreement, the suit was being filed. Defendant No. 1 resisted the suit. She did not admit the agreement. She put the plaintiffs to proof of the fact that the entire amount due as consideration and as per the agreement, has been paid towards the purchase price. She denied the averment to that effect in the plaint. She pleaded that she had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiffs. For convenience, the parties are being referred to in this judgment with reference to their ranks in the trial court, namely, as the plaintiffs and the defendants. 6. Learned counsel for the plaintiffs initially argued that the question of limitation, on the facts and in the circumstances of the case, was a mixed question of fact and law and was not one of those issues which could have been tried as a preliminary issue in terms of Order XIV Rule 2 of the Code of Civil Procedure. Learned counsel further submitted that on the averments in the plaint, it could not be said that the suit was barred by limitation. Obviously, no time for performance was fixed in the agreement for sale and hence the first limb of Article 54 of the Limitation Act which was the applicatory article, had no application. It was the second limb of Article 54 of the Limitation Act that had application and the cause of action arose only when the plaintiffs had notice that performance was refused by the defendants. Learned counsel submitted that the plaintiffs had notice of the refusal to perform only on 19.11.1993, when the defendants objected to the public notice issued by an intending purchaser from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that there was no reason to interfere with the finding that the suit was barred by limitation. 7. 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 plaintiff had notice that the performance was refused and on finding that date, to see whether the suit was filed within three years thereof. We have explained the position in the recent decision in R.K. Parvatharaj Gupta Vs. K.C. Jayadeva Reddy [2006 (2) SCALE 156]. In the case on hand, there is no dispute that no date for performance is fixed in the agreement and if so, the suit could be held to be barred by limitation only on a finding that the plaintiffs had notice that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intiff was paid prior to 1972 when their predecessor died. But on going through the agreement for sale, it is seen that there were certain obligations to be performed by the predecessor of the defendants, who allegedly entered into the agreement for sale and what was the position regarding the fulfillment of those obligations had to be considered. The subsequent agreement or receipt relied on by the plaintiffs had also to be proved since the same had been denied by the first defendant in her written statement and it had to be decided whether the possession in fact was handed over to the predecessor of the plaintiffs by the defendants on receipt of the amount referred to in the subsequent agreement or receipt dated 5.10.1960. Whether the plaintiffs by themselves could have maintained the suit for specific performance and, if so, whether they are entitled to specific performance and whether even if they are not entitled to a decree for specific performance, they are entitled to a perpetual injunction based on their alleged possession are all matters which had to be decided before the suit could be satisfactorily disposed of. These aspects relating to the prayer for specific performan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be decided as preliminary issues and they are not questions on the basis of which the suit could be dismissed as barred by limitation. The question of limitation has to be decided only on the basis of Article 54 of the Limitation Act and when the case is not covered by the first limb of that Article, normally, the question of limitation could be dealt with only after evidence is taken and not as a preliminary issue unless, of course, it is admitted in the plaint that the plaintiffs had notice that performance was refused by the defendants and it is seen that the plaintiffs approached the court beyond three years of the date of notice. Such is not the case here. 12. Section 27 of the Limitation Act provides for extinguishment of right to property only at the determination of the period limited by the Limitation Act for instituting a suit for possession. Section 3 of the Limitation Act provides that subject to Sections 4 to 24 of the Act every suit instituted after the period prescribed therefor in the Limitation Act shall be dismissed. When the suit is for specific performance of an agreement for sale and we conduct a search in the Limitation Act in the context of Section 3 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not think it proper to go into the various arguments urged by learned senior counsel appearing in this case. We think that all those arguments require to be kept alive for decision in the suit after a trial. Suffice it to say that we consider that the interests of justice would be subserved by setting aside the finding by the courts below that the suit is barred by limitation, even while upholding the finding that the trial court had the jurisdiction to try the suit and remand the suit to the trial court for a decision of all the issues arising therein, including the issue of limitation, in accordance with law after giving the parties an opportunity to adduce evidence in support of their respective cases. 15. In the result, this appeal is allowed, the finding that the suit is barred by limitation and the consequential dismissal of it are set aside and the suit is remanded to the trial court for a proper trial of all the issues (other than the issue of jurisdiction) arising in the case and for disposal afresh in accordance with law. The parties are directed to appear in the trial court on 17.4.2006 so as to receive further orders as to posting. However, in the circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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