Settled legal principles should be applied by the Courts in order to avoid the unnecessary rounds of litigations

Supreme Court: In the matter where the Court was called upon to decide the question as to bar of suit under the first part of Article 54 of Schedule 1 of the Limitation Act, 1963, the bench of Madan B. Lokur and R.K. Agrawal, JJ showed it’s disconcert over the fact that the parties had 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.

Reiterating the view taken by a 3-judge bench in Ahmadsahab Abdul Mulla v. Bibijan, (2009) 5 SCC 462, the Court interpreted the meaning of the word “date” and “fixed” appearing in Article 54 and 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 further said 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. The 2-judge bench said that it is not necessary for them to multiply authorities on the subject particularly when the issue has been conclusively settled by a 3-judge Bench of this Court.

In the present case, the agreement between the parties did not specify a calendar date as the date fixed for the performance of the agreement and the High Court ignored the absence of a specified date for the performance of the agreement and reversed the Trial Court order. The High Court merely decided 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. Stating such approach to be erroneous, the Court held 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. [Madina Begum v. Shiv Murti Prasad Pandey, 2016 SCC OnLine SC 751, decided on 01.08.2016]

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