Plaintiff/A was inducted as tenant for half portion of suit property on monthly rent of Rs. 300/- w.e.f. 22.12.70 by defendant/B. On 24.12.70, defendant/B executed Agreement to Sell the suit property to plaintiff/A for Rs. 3,75,000/-, out of which Rs. 50,000/- was paid as part payment. It was stipulated that defendant/B will obtain Tax Clearance Certificate within 12 months, after which plaintiff/A shall pay balance consideration within 03 months. On 05.11.77, plaintiff/A filed suit for specific performance. Defendant/B contended suit was barred by limitation. Decide whether suit is barred by limitation.

The suit is likely barred by limitation. On the stated facts, the agreement fixed a clear outer time-frame: B had to obtain the tax clearance certificate within 12 months, and only then was A to pay the balance within three months, so Article 54 runs from that fixed date or, at the latest, from the date when performance was refused or became impossible.

Issue

The question is whether the suit filed on 05.11.1977 was within the three-year limitation period for specific performance. The answer turns on whether the agreement fixed a date for performance through the tax-clearance condition, or whether the right to sue arose only when A had notice of refusal.

Rule

Article 54 of the Limitation Act gives three years for a suit for specific performance. If the contract fixes a date for performance, limitation runs from that date; if no date is fixed, it runs from the date when the plaintiff has notice that performance is refused. Courts repeatedly treat the “date fixed” language broadly enough to include an agreed extended date or a contractual milestone that makes performance due.

Application

Here, the agreement dated 24.12.1970 required B to obtain the tax clearance certificate within 12 months, after which A had three months to pay the balance consideration. So the contract did not leave performance open-ended; it identified a definite time structure for completion. That means the outer performance date would ordinarily expire around March 1972, and the suit filed on 05.11.1977 is well beyond three years from that date.

A’s tenancy status does not change the limitation analysis. Once the agreement to sell fixed the time for completion, A had to sue within three years of that date or, if B clearly refused earlier or later, within three years of such refusal. On the facts supplied, there is no pleaded later refusal that would postpone limitation.

Case law

The Supreme Court has held that where the agreement itself fixes the time for performance, Article 54 applies strictly and the suit must be filed within three years from that fixed date. In a recent decision, the Court rejected the attempt to shift to Article 113 where Article 54 squarely governed the agreement to sell. The principle is the same here: once the contract specifies a performance schedule, the plaintiff cannot wait for years and then invoke a later, more convenient starting point.

Conclusion

B’s limitation objection should succeed. The suit filed on 05.11.1977 is barred because the contractual time for performance expired long before that date, and no fresh cause of action or later refusal has been shown to extend the limitation period.