IMPORTANT POINT
Once the date for performance of the contract has been fixed by parties, limitation begins to run from that date and specific performance could be had within three years from that date unless parties by an agreement extend the time and question whether or not the time is the essence of contract is not of much relevance.

ORDER

Leave granted.

2. This appeal by special leave arises from the judgment of the learned single Judge of the High Court of Karnataka, made on 29.5.1996 in CRP No. 2246/93.

3. The admitted facts are that the appellants and the respondent entered into an agreement on March 16, 1989 for sale of plot of land bearing No. 114/8 situated at Peenya Industrial Suburb II Stage, Peenya Village, Bangalore for a consideration of Rs. 64 lakhs. The date for the performance of the contract was fixed as May 28, 1989. The appellants issued notice on October 2, 1989 calling upon the respondent to comply with the conditions mentioned under the agreement, namely, to obtain Income-tax clearance certificate and from the Urban Ceiling Authority permitting the respondent to alienate the property to the appellants. The respondent had issued a notice on November 6, 1989 repudiating the contract though the execution thereof was admitted. The appellants then filed a suit for mandatory injunction on April 21, 1992 directing the respondent to comply with the requirements as mentioned in the agreement. While the suit was pending, the appellants made an application on November 5, 1992 under Order VI, Rule 17 of the CPC for amending the plaint and seeking specific performance of the contract. The said application was rejected by the trial Court and the rejection was affirmed by the High Court. Thus, this appeal by special leave.

4. Learned counsel for the appellants has contended that time is not the essence of the contract; and, the performance, though it was fixed for May 28, 1989, the other clauses relating to payment of interest for the delayed period of performance would indicate that the time is not essence of the contract. The application, therefore, could not have been dismissed at that stage. It is further contended that the appellants had an oral agreement with the respondent that the agreement will be performed after the respondent obtained requisite permission from the competent authority. Thus, his contention is that the relief of specific performance was not barred by limitation. It is then contended for the respondent that by operation of first clause of Article 54 of the Schedule to the Limitation Act, 1963, once the date has been fixed for the performance, limitation begins to run from the date. Whether time is the essence of the contract or not is not relevant for the purpose of deciding the question of limitation. In the agreement, time having been fixed for performance of the contract as May 28, 1989, the limitation began to run under the first clause from that date. The second clause, therefore, has no application to the facts in this case. The courts below, therefore, were correct in refusing permition for amendment of the plaint introducing specific relief of performance.

5. It is seen that limitation under Section 3 of the Limitation Act is one of the defences available to the defendant. Article 54 of the Schedule to the Limitation Act postulates that for specific performance of a contract the period of limitation is three years from the date fixed for the performance, or, if no such date is fixed, from the date the plaintiff has notice that performance is refused. Under first part of Article 54, once date for performance of the contract has been fixed by the parties, the limitation begins to run from that date and specific performance of the contract could be had within three years from that date unless the parties by an agreement extend the fixed time. In this case, date was fixed for performance, i.e., May 28, 1989. The question whether or not the time is the essence of the contract is not of much relevance since the case falls in first part of Article 54 ? The decision relied on by the learned counsel for the appellant in Smt. Chand Rani (dead) by LRs. v. Smt. Kamal Rani (Dead) by LRs.1 of the Constitution Bench does not help the learned counsel for the appellant. In that case, this Court has reviewed the entire case law and need fo