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CASE NO.:

Appeal (civil) 6202-6203 of 2004

PETITIONER:

S. Brahmanand and Ors.

RESPONDENT:

K. R. Muthugopal (D) and Ors.

DATE OF JUDGMENT: 21/10/2005

BENCH:

B. N. Srikrishna & C. K. Thakker

JUDGMENT:

J U D G M E N T

SRIKRISHNA, J.

These two appeals by special leave impugn the common judgment of

the High Court of Kerala rendered in First appeals AS Nos. 393/97 (E) and

281/97 (E) setting aside the decree made by the trial court in OS No. 647/95.

The appellants before us were the plaintiffs before the trial court in

Original Suit No. 647/95 and the respondents were the respective defendants

in the said suit. For the sake of convenience, the parties are hereinafter

referred to as they were arrayed in the suit before the trial court i.e. as

Plaintiffs and Defendants.

The Facts:

On 10.3.1989 an agreement was entered into between Defendants 1

and 2 (K.R. Muthugopal and V. Rajan, respectively) on the one hand, and

Plaintiffs 1, 2 and 3 (S. Brahmanand, S. Vinod and G. Ratna Bai,

respectively), on the other hand, for sale of the suit property which

comprised two shops and one godown in Kozhikode. The preambulatory

part of the agreement makes it clear that as on the date of the agreement a

stranger, by name, Thazhekeepattu Moosakutty had filed two suits O.S. Nos.

98/87 and 99/87 before the II Additional Sub Judge, Kozhikode, alleging

that there was an agreement to sell the suit property to him of which there

was a breach, and seeking specific performance of the alleged agreement of

the sale of the suit property. By the agreement of sale dated 10.3.1989 the

parties specifically recorded that, the Defendants had not made any such

agreement of sale of the suit property to the said Moosakutty. According to

the Plaintiffs and the Defendants, the suit property was originally let out to

Bhatt family (of which Defendants 3 & 4 are members) who refused to

vacate it on the request made by the Defendants 1 and 2 (i.e. the landlords).

A suit for eviction was filed against the said Bhatt family and a decree for

eviction was made. Even before the decree could be executed, two suits had

been filed in which Moosakutty alleged that the Plaintiffs had entered into

an agreement to sell the suit property to him and sought specific

performance. Agreement dated 10.3.1989 broadly referred to the

developments and the fact that as on the date of the agreement an interim

injunction had been issued by the civil court in O.S. Nos. 98/87 and 99/87

restraining the transfer of the suit property to third parties. The agreement

shows that the parties were well aware of the pending litigation and yet the

Plaintiffs (purchasers) under the agreement had offered to purchase the same

for a total consideration of Rupees six lakhs only, which was accepted

"subject to the restrictions contained in the interim orders mentioned above".

Clauses (1), (3), (5) and (9) of the agreement are relevant and are reproduced

as under:

"(1). That the first parties agreed to sell and the second parties

agree to purchase the said properties for a total consideration of

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Rs.6,00,000/- (Rupees six lakhs only) immediately after the

interim order in O.S. 99/88 and O.S. 98/88 imposing restriction

on alienation is evicted by the Court."

"(3) That the second parties shall tender the valuable amount

of Rs.5,78,000/- (Rupees five lakh seventy eight thousand only)

to the first parties immediately on the termination of the

proceedings in court as mentioned above, when the first parties

shall cause the sale deed executed and registered in favour of

the second parties with all the valid title deeds."

"(5) That the sale would be complete when the parties comply

with the conditions herein."

"(9) That the first parties do hereby covenant undertake and

make the second party believe that the first parties have good

title to the said properties and it is free from all encumbrances,

charges attachments, claims and demands whatsoever and is not

affected by any notice or scheme for acquisition or requisition

proceedings apart from the temporary legal impediment

imposed on transfer in O.S. 98/88 and O.S. 99/88 mentioned

above and if there is found any defect in title the first parties

shall be liable to pay back all money received from the second

parties along with all damages incurred by the second parties of

such defects of title of the first parties. It is also decided that the

advance amount will be the first charge over the properties."

On 10.6.1992 the suits filed by Moosakutty, O.S. Nos. 98/87 and

99/87 were dismissed and interim orders granted therein stood vacated.

Though, Moosakutty made an application for continuation of the injunction

order till he was able to file an appeal, this prayer was rejected by the civil

court, but the order of status quo continued for a period of two weeks from

the date of dismissal of the suits i.e. upto 24.6.1992.

On 11.6.1992 the Plaintiffs were put in possession of the godown by

one Dandayudhan, who was the constituted attorney of Defendants 1 and 2.

On 18.6.1992, First Defendant addressed a letter to the First Plaintiff and

what he said therein is very material. He said:

"Dear Brahmanand,

Trust this will find you all quite well. I am in

receipt of your letter-dated 12.6.92. It is indeed gratifying to

know that the two suits filed by Bhatt have been dismissed.

Dandayudhan gave me information 10th itself and I immediately

intimated him to hand over keys of the godown to you as a

token of our intention to fulfill our commitments under the

agreement. Personally, I am not for delaying matters any more.

However, it appears that Bhatt has filed an injunction petition to

get injunction till appeal is filed.

My friends here are saying that we might as well await

the result of the petition before going ahead with registration.

Otherwise it may create further problems. Knowing Bhatt, I am

sure you will agree that it is advisable to wait for things to be

more clear, now that you are in possession of the godown.

It is a pity that Bhatt can got hold of people like

Moosakutty to harass us. I look forward to coming to Calicut

shortly along with Rajan, to conclude the registration as soon as

I get information from Dandayudhan in the matter.

In the meanwhile please be in touch with Dandayudhan

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With best wishes,

Yours faithfully,

Sd/-

(K.R. Muthugopal)"

The Proceedings in the Trial Court and the High Court:

On 20.6.1992, one R. Latha, sister of Defendant 4 filed a suit O.S. No.

382/92 in which she claimed partition in respect of the suit property, with a

prayer to restrain the Defendants "from alienating by way of sale, mortgage

or lease and/or transferring possession of the plaint schedule property in any

manner to any other persons and from causing any loss or damage in any

manner to the buildings standing in the plaint schedule property". An order

was passed therein on 2.7.1992 directing "to maintain status quo until further

orders".

On 24.8.1995, Defendants 1 and 2 abruptly cancelled the power of

attorney in favour of Dandayudhan. During the night of 31.8.1995

possession of the suit godown was taken over by the Defendants by breaking

open the locks. According to the Plaintiffs, on 1.9.1995 when the First

Plaintiff went to the shop, as usual, he found the defendants and other

strangers present therein, who tried to attack him and caused apprehension

about his life. An altercation followed during which the First Plaintiff was

told that Defendants 1 and 2 had sold the suit property to Defendants 3 and 4

and that the Plaintiffs may seek their remedy anywhere. This gave an

apprehension to the Plaintiffs that the Defendants were intent upon refusing

to execute and register the document and complete the conveyance of the

suit property to them. With this apprehension, the Plaintiffs made enquiries

in the office of the Sub Registrar and learnt that the suit property had already

been sold by Defendants 1 and 2 to Defendants 3 and 4 during the period

from 30.8.1995 to 31.8.1995. On 4.9.1995 the Plaintiffs issued a notice to

Defendants 1 and 2 calling upon them to execute the sale deed and complete

the conveyance of the suit property to them. The Plaintiffs brought a suit for

specific performance on 15.9.1995, which is numbered as O.S. No. 647/95.

The Bhatts, who were alleged to be the purchasers of the property, were also

impleaded as Defendants 3 and 4 to the suit. On 18.10.1995, Moosakutty's

appeal was dismissed as settled out of court and all interim orders made

therein came to be vacated. On 2.1.1996, Lata's suit O.S. No. 382/92 was

dismissed for non-payment of court fee.

The Subordinate Judge, Kozhikode tried Original Suit No. 647/95 and

rendered the judgment on 31.3.1997. The following issues were framed by

the trial court:

"1. Whether there was a sale agreement between the

plaintiffs and defendants 1 and 2 on 10.3.89 in

respect of the plaint schedule property as alleged?

2. Whether defendants 3 and 4 are bona fide purchasers

of the plaint schedule property without notice of the

sale agreement?

3. Whether the plaintiffs are entitled to specific

performance of the sale agreement as alleged?

4. Reliefs and costs?

Additional Issue :

5. Whether the suit is barred by limitation?"

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With regard to Issue No. 1 the trial court discussed the evidence in

detail and came to the conclusion that the defence set up by the Defendants

was wholly unbelievable and that from the evidence adduced in the case, it

could safely be found that the agreement dated 10.3.1989 in respect of the

suit property had been executed by Defendants 1 and 2, as contended by the

Plaintiffs, upon payment of consideration of Rs. 22,000/- as advance, as

recited in the document. The trial court also held that there was clinching

evidence to prove that Defendants 1 and 2 had put the Plaintiffs in

possession of the godown, after the 10.3.1989 agreement in June, 1992.

With regard to the second issue, the trial court totally disbelieved the

defence set up by the defendants and held, "thus the evidence only leads us

one way, that is to the fact that defendants 3 and 4 had due knowledge of the

sale agreement, prior to their entering into a deal for purchase of the plaint

schedule properties. It is also clear from the evidence that the sale deeds

were not taken by them in good faith."

The trial court held in favour of the Plaintiffs on all issues. According

to the trial court, the suit was for specific performance of an agreement in

respect of which no date had been fixed and, therefore, the cause of action

would arise only when the Plaintiffs had notice that the performance had

been refused. The trial court was of the opinion that the second part of

Article 54 of the Limitation Act, 1963 was applicable and since the Plaintiffs

notice of the refusal of performance by the Defendants 1 and 2 arose only on

31.8.95/ 1.9.1995, the suit filed on 15.9.1995 was within limitation. On this

finding, the learned judge of the trial court decreed the suit as prayed for,

since the learned judge was satisfied that the Plaintiffs were willing to

perform their part of the agreement and the defendants were not.

On appeal to the High Court, the High Court agreed with the trial

court judgment on all the issues, but differed only on the finding with regard

to limitation. The High Court took the view that the agreement dated

10.3.1989 was one in which a date was fixed for performance and, therefore,

the suit was hopelessly barred by limitation. In this view of the matter, the

High Court set aside the decree and dismissed the suit.

Thus, on all the issues that were raised in the suit, the findings in

favour of the Plaintiffs were confirmed by the High Court in appeal. The

only question which has been argued before us, and which we need to

consider is the issue of limitation.

Submissions:

Mr. R.F. Nariman, learned counsel for the Plaintiffs vehemently

contended that the High Court was wrong in reversing the decree on the

ground of limitation. His submissions were as follows.

On reading the agreement of 10.3.1989 as a whole, it is clear that no

date for specific performance was fixed until the cloud on the vendors' title

was removed. In other words, the date of performance was only after the

dismissal of the two suits. This meant that the date fixed for performance

would arise only after the final dismissal of Moosakutty's suits and the

appeals therein. In the alternative, he contended that letter dated 18.6.1992

can be read to show the true common intention of the parties, which was that

the date of performance was extended until the difficulty created by

Moosakutty's appeal and the injunction therein was resolved and that "it is

advisable to wait for things to be more clear". He, therefore, contends that

this letter would suggest that whatever the parties might have originally

intended, after the letter of 18.6.1992 the time had been extended. That even

if clause (1) of the agreement alone must be looked at, vacating an

injunction is not a certain event, and, therefore, the first part of Article 54 of

the Limitation Act, 1963 would not apply.

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In his submissions, the catena of judgments ending with the

judgments of this Court holding that the first part of Article 54 of the

Limitation Act, 1963 would apply to an agreement wherein no date was

fixed, but the performance was with reference to a future contingency, has

been wrongly decided and we should refer the matter to a larger Bench for

an authoritative exposition of the law. The expressions "date" and "time"

have been used differently, as evident from a contrast of the language used

in Articles 53 and 54 of the Limitation Act, 1963. Finally, that even if the

two expressions are interchangeable, the construction of the expression

"date" is ambiguous and in such circumstances the interpretation of the

statute must be in favour of preserving the remedy and against the dismissal

of a suit.

Mr. Rao, learned counsel, who appeared for Respondents 3 and 4 (the

Bhatt family) contends that the expressions "date" and "time" used in the

Schedule to the Limitation Act are interchangeable; the maxim id certum est

quod certum reddi potest ('That is certain which can be reduced to a

certainty.') clearly applies to a situation like this; the expression "date" is

interchangeable with "day" or "time". He relied on a series of judgments,

including two judgments of this Court, in support of his contention. He also

refuted the argument that there was any ambiguity in interpreting the

language used in Article 54 of the Limitation Act, 1963; that the High Court

had on a careful reading of the agreement ascertained the intention of the

parties, and there was no reason for this Court to take any different view of

the matter.

It would be useful to set out the provisions of Article 54 before

critically appraising the arguments presented to us on both sides.

"Article

Description of

suit

Period of

limitation

Time from which period

begins to run

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."

Though, at first blush, it may appear that the use of the expression

"date" used in this Article of the Limitation Act, 1963 is suggestive of a

specific date in the calendar, we cannot forget the judicial interpretation of

this expression over a long period of time. Different High Courts took

different views of the matter, which has been a subject matter of

controversy. Some interpreted the expression strictly and literally, while

others have taken an extended view.

In Kashi Prasad v. Chhabi Lal and Ors. the High Court dealing

with Article 113 of the Limitation Act, 1908, which was in pari materia with

Article 54 of the Schedule to the Limitation Act, 1963, took the view that the

force of the word "fixed" implies that the date should be fixed definitely and

should not be left to be gathered from surrounding circumstances of the case.

It must be a date clearly mentioned in the contract whether the said contract

be oral or in writing.

In Alopi Parshad and Anr. v. Court of Wards and Ors. , also the

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court was concerned with Article 113 of the Limitation Act, 1908. A suit for

specific performance was brought on an agreement of sale where the time

for performance of the contract was "after passing of a decree". Though no

date for performance was fixed for the agreement, the trial Court had opined

that time must be held to have begun to run from the date on which the

decree was passed in view of the maxim certum est quod certum reddi potest

("That is sufficiently certain which can be made certain"). The Lahore High

Court was of the view that statutes of limitation must be strictly construed

and that the respondents before it had failed to bring a case specifically

within the purview of the first part of Article 113 and that the case did not

fall within the first part but fell within the second part of Article 113. The

judgment of the Allahabad High Court in Kashi Prasad (supra) was

approvingly referred to and followed. This judgment was taken in appeal

before the Privy Council and approved by the Privy Council in Lala Ram

Sarup v. Court of Wards .

In Kruttiventi Mallikharjuna Rao v. Vemuri Pardhasaradhirao ,

a contract was entered into on 18.7.1934, and the vendor promised to

execute the sale deed when both his brothers who were studying elsewhere

returned to the village for the next vacation, i.e., in May-June 1935. The

High Court held that this was "too indefinite to be regarded as fixing a

"date" for the performance of the contract and the period of limitation must

be computed from the date of refusal to perform".

In R. Muniswami Goundar (died) and Anr. v. B.M. Shamanna

Gouda and Ors. interpreting the expression "date fixed" in Article 113 of

the Limitation Act, 1908 the doctrine of id certum est quodi certum reddi

potest was pressed into service along with its exposition in Broom's Legal

Maxims and it was held that it was wide enough to include a date which

though at the time when the contract was made was not known, but could be

ascertained by an event which subsequently was certain of happening.

In Hutchegowda v. H.M. Basaviah , upholding the view in

Muniswami Goundar (supra), it was held that an agreement to execute the

sale deed "after the 'Saguvali chit' is granted fell within the first part of

Article 113 of the Limitation Act, 1908.

In Purshottam Sava v. Kunverji Devji and Ors. the judgment of

the Madras High Court in R. Muniswami Goundar (supra) was followed

and it was held that the expression "date fixed" can be interpreted as

meaning either the date fixed expressly or a date that can be fixed with

reference to a future event which is certain to happen.

In Lakshminarayana Reddiar v. Singaravelu Naicker and Anr. it

was held that the phrase occurring in the third column of Article 113 of the

Limitation Act, 1908 "the date fixed for the performance" must be not only

a date which can be identified without any doubt as a particular point of

time, but it should also be a date which the parties intended should be the

date when the contract could be performed.

In Shrikrishna Keshav Kulkarni and Ors. v. Balaji Ganesh

Kulkarni and Ors. , the agreement for sale of a property stated that the

sale was to be executed after the attachment which the creditors had brought

was raised. Noticing the fact that there was absence of any indication as to

when the attachment would be raised, the court treated it as a case in which

no date was fixed for performance of the contract and, therefore, falling

within the second part of Article 54 of the Limitation Act, 1963.

P. Sivan Muthiah and Ors. v. John Sathiavasagam arose from a

suit for specific performance with an alternative prayer for recovery of

advance paid under the agreement of sale. Referring to Article 54 of the

Limitation Act, 1963 the court took the view that the expression "date fixed"

could mean either the date expressly fixed or the date that can be fixed with

reference to a future event, which is certain to happen. If the date is to be

ascertained depending upon an event which is not certain to happen, the first

part of Article 54 would not be applicable, and in such an eventuality, it is

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only the latter part of Article 54 that could be invoked by treating it as a case

in which no date had been fixed for performance and the limitation would be

three years from the date when the plaintiff had notice that performance is

refused. This was a case where performance was due after the tenants in the

property had been vacated. The court took the view that since eviction of the

tenants was an uncertain event, the time must be deemed to have run only

from the date when the plaintiffs had notice that the performance had been

refused by the defendants.

In Ramzan v. Hussaini a suit was filed for specific performance of

a contract of sale in respect of a house. The property was mortgaged and

according to the plaintiff, the defendant had agreed to execute a deed of sale

on the redemption of the mortgage by the plaintiff herself, which she did in

1970. In spite of her repeated demands, the defendant failed to perform his

part, which resulted in a suit being filed. The question that arose before this

Court was whether the agreement was one in which the date was "fixed" for

the performance of the agreement or was one in which no such date was

fixed. This Court answered the question in the affirmative by holding that,

although a particular calendar date was not mentioned in the document and

although the date was not ascertainable originally, as soon as the plaintiff

redeemed the mortgage, it became an ascertained date. This Court also

agreed with the view expressed in the Madras High Court in R. Muniswami

Goundar (supra) and held that the doctrine id certum est quod certum reddi

potest is clearly applicable. It also distinguished Kruttiventi Mallikharjuna

Rao (supra) and Kashi Prasad (supra) as cases that arose out of their

peculiar facts.

In Tarlok Singh v. Vijay Kumar Sabharwal the parties by

agreement determined the date for performance of the contract, which was

extended by a subsequent agreement stipulating that the appellants shall be

required to execute a sale deed within 15 days from the date of the order

vacating the injunction granted in a suit. The suit was initially dismissed

and, thereafter, a review application was also dismissed as withdrawn on

22.3.1986. On 23.12.1987 a suit was filed for perpetual injunction. In that

suit, an application came to be made under Order 6 Rule 17 CPC for

converting it into a suit for specific performance of an agreement dated

18.8.1984. This amendment was allowed on 25.8.1989. It was held that since

the amendment was ordered on 25.8.1989, the crucial date for examining

whether the suit was barred by limitation was 25.8.1989. Since the

injunction was vacated when the original suit was initially dismissed, and

the review application came to be dismissed on 22.3.1986, it was held that it

was a situation covered by the first part of Article 54 and, in any event, on

25.8.1989 the suit was barred by limitation.

Supplementary Contentions:

Mr. Nariman, learned counsel strongly urged that, the view taken by

the Allahabad High Court in 1933 and followed by the Lahore High Court in

1938 had been expressly affirmed by the Privy Council in its judgment in

Lala Ram Sarup (supra). Unfortunately, in none of the judgments of the

High Courts decided subsequently was the fact noticed that the decision of

the Lahore High Court had been expressly affirmed by the Privy Council,

nor was this noticed in the two judgments of this Court in Ramzan (supra)

and Tarlok Singh (supra). Mr. Nariman contended that if the Privy Council

judgment had been noticed, then perhaps none of the judgments of the High

Court would have been able to take a contrary view on the interpretation of

Article 54 of the Limitation Act, 1963, since the Privy Council had already

interpreted Article 113 of the Limitation Act, 1908, which was in pari

materia. He, therefore, urged that we should take a different view of the

matter, and if we feel ourselves bound by the judgments of this Court in

Ramzan (supra) and Tarlok Singh (supra), the matter should be referred to

a larger Bench.

The argument, thus, presented, no doubt, is attractive, but upon deeper

consideration, we decline to follow the course suggested by the learned

counsel for two reasons. Judgments which have held the field for a fairly

long time ought not to be disturbed unless there is a prepondering necessity

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dictated by the demands of justice to overturn them. It is true that no

judgment after 1940 seems to have noticed that the judgment in Alopi

Parshad (supra) delivered by the Lahore High Court was expressly affirmed

by the Privy Council in Lala Ram Sarup (supra). It is also possible that if

this fact had been brought to the notice of the High Courts, the course of the

decisions might have taken a different turn. Perhaps, the view of this Court

might also have been different, if its attention was drawn to the judgment of

the Privy Council. Nonetheless, we feel that the judgments in Ramzan

(supra) and Tarlok Singh (supra) being judgments of a coordinate Bench,

we are bound by the observations therein. We do not see the necessity of

referring the matter to a larger Bench at this juncture since we are of the

view that for the disposition of this case it is not necessary to go into the

larger issue urged by Mr. Nariman. We are satisfied that the Plaintiffs are

entitled to succeed on an altogether different ground arising from the facts of

the case.

A careful perusal of the letter dated 18.6.1992 leaves one in no doubt

as to what exactly the Defendants had in mind when this letter was written.

Doubtless, in the original agreement dated 10.3.1989, the date for

performance had been fixed differently under clauses (1) and (3). Clause (1)

stated that the sale would take place "immediately after the interim order in

O.S. 99/88 and 98/88 imposing restriction on alienation is vacated by the

court". These two suits were the suits of Moosakutty. Clause (3), however,

said that the time for performance would be "immediately on the termination

of the proceedings in court as mentioned above, when the first parties shall

cause the sale deed executed". Perhaps, in the light of the authorities cited at

the Bar ending with the two judgments of this court in Ramzan and Tarlok

Singh (supra), it is possible to say that the expression "date fixed" need not

be a calendar date, but time period fixed with reference to a certain event,

the happening of which is definite. The High Court seems to have judged by

this test and reversed the trial court's judgment and dismissed the suit.

In our judgment, the High Court went wrong in not giving full effect

to the import of letter dated 18.6.1992. What does this letter convey? By the

time this letter was written, the two suits filed by Moosakutty had been

dismissed by the trial court, but he had moved an application for interim

relief, after obtaining a status quo order from the trial court. In the light of

this situation, the Defendants 1 and 2 represented to the Plaintiff 1 and

assured him that they (Defendants 1 and 2) still have the intention of

standing by their promise and as a token of their intention to fulfill their

commitments under the agreement, Dandayudhan had been informed

immediately to hand over the keys of the godown to the Plaintiffs. Finally,

the letter says:

"\005Personally, I am not for delaying matter any more.

However it appears that Bhatt has filed an injunction

petition to get injunction till appeal is filed.

My friends here are saying that we might as well

await the result of the petition before going ahead with

registration. Otherwise it may create further problems.

Knowing Bhatt, I am sure you will agree that it is

advisable to wait for things to be more clear, now that

you are in possession of the godown."

Further, the letter says:

"I look forward to coming to Calicut shortly along

with Rajan, to conclude the registration as soon as I get

information from Dandayudhan in the matter."

Both the parties knew that the suits, which were dismissed on

10.6.1992 resulting in the interim injunction granted by the trial court being

vacated, were technically filed by Moosakutty, but that Moosakutty had

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been put up by the Bhatts (Defendants 3 and 4), who were unsuccessful in

the eviction petition against them. In these circumstances, the Defendant's

representation to the Plaintiffs would amount to a request for forbearance

from insisting on performance or pursuing legal action pursuant thereto until

the things "become more clear".

Thus, this was a situation where the original agreement of 10.3.1989

had a "fixed date" for performance, but by the subsequent letter of 18.6.1992

the Defendants made a request for postponing the performance to a future

date without fixing any further date for performance. This was accepted by

the Plaintiffs by their act of forbearance and not insisting on performance

forthwith. There is nothing strange in time for performance being extended,

even though originally the agreement had a fixed date. Section 63 of the

Indian Contract Act, 1872 provides that every promisee may extend time for

the performance of the contract. Such an agreement to extend time need not

necessarily be reduced to writing, but may be proved by oral evidence or in

some cases, even by evidence of conduct including forbearance on the part

of the other party. Thus, in this case there was a variation in the date of

performance by express representation by the Defendants, agreed to by the

act of forbearance on the part of the Plaintiffs. What was originally covered

by the first part of Article 54, now fell within the purview of the second part

of the Article. Pazhaniappa Chettiyar v. South Indian Planting and

Industrial Co. Ltd. and Anr. was a similar instance where the contract

when initially made had a date fixed for the performance of the contract but

the Court was of the view that "in the events that happened in this case, the

agreement in question though started with fixation of a period for the

completion of the transaction became one without such period on account of

the peculiar facts and circumstances already explained and the contract,

therefore, became one in which no time fixed for its performance." and held

that was originally covered by the first part of Article 113 of the Limitation

Act, 1908 would fall under the second part of the said Article because of the

supervening circumstances of the case.

In the present case, it was only on 31.8.1995/1.9.1995 that the

plaintiffs realised that there was a refusal to perform, when they were

forcibly evicted from the godown. It is only then that the Plaintiffs had

notice of refusal of performance. Counted from this date, the suit was filed

within 15 days and, therefore, was perfectly within the period of limitation.

We, therefore, disagree with the High Court on this issue of limitation and

hold that the suit filed by the Plaintiffs was within the period of limitation

and was not liable to be dismissed under Section 3 of the Limitation Act. All

other issues concurrently have been held in favour of the Plaintiffs. Hence,

there is no impediment to the Plaintiffs succeeding in the suit.

Conclusion:

In the result, we allow the appeals and set aside the impugned

judgment of the High Court and affirm the decree made by the trial court in

favour of the Appellants-Plaintiffs. Considering the utterly dishonest defence

raised by the Defendants and the fact that Defendants 3 and 4 colluded with

Defendants 1 and 2, we think that the original Defendants 1 to 4 (present

Respondents in both the appeals), need to be imposed with costs. Defendants

1 and 2 shall together pay a sum of Rs. 50,000.00 and Defendants 3 and 4

shall together pay a sum of Rs. 50,000.00 to the appellants.