The Allahabad High Court has clarified how limitation periods are calculated for suits seeking specific performance of a contract. In a ruling reported by LiveLaw, the court determined that when a sale agreement lacks a fixed calendar date for execution and instead depends on a subsequent occurrence, the three-year window under Article 54 of the Limitation Act, 1963, does not start immediately. Instead, the clock starts ticking only after the buyer learns that the seller has refused to complete the transaction.
Justice Avnish Saxena, presiding over the revision petition, reviewed a May 2015 agreement for a Lucknow plot valued at Rs. 43 lakhs. The contract required the sellers to notify the buyer once the U.P. Avas Evam Vikas Parishad transferred the property to them. The buyer then had six months to receive the final deed. The court noted the absence of a specific calendar date, citing the Supreme Court’s view in Ahmadsahab Abdul Mulla v. Bibijan that a fixed date must be a definite, crystallised point in time.
The later purchasers, who bought the land in November 2016, argued the October 2016 suit was premature because the Parishad had not yet completed its transfer when the case began. They suggested the buyer, a property dealer with multiple similar deals, had created a sham document. However, the court found the cause of action valid because the buyer received a warning in September 2016 that the sellers planned to sell the plot to someone else.
The court upheld the trial court’s rejection of the later purchasers’ motion under Order VII Rule 11 of the Code of Civil Procedure. Justice Saxena observed that the warning was clearly stated in the initial complaint, identifying the source of the information. The court further noted that arguments regarding the Specific Relief Act were not directly relevant to rejecting the plaint at this stage, as those provisions are subject to trial. The revision petition was dismissed, confirming that the suit for specific performance was not barred by the Limitation Act.