When it comes to legal remedies, you do not have a lifetime to enforce them. The Limitation Act, 1963 provides a period of limitation applicable for various claims. Once you miss out on the same, condonation of delay may be sought, but it is totally up to the Court to decide whether there is sufficient cause for such delay or not. Speaking of an agreement to sell, there is a limitation period for the same as well. What are the circumstances and when does the limitation period for civil suit against agreement to sell begins?

It may be noted that an agreement to sale involves two parties wherein one being the owner of an immovable property promises to sell the said property to another for a certain amount of consideration. The other one is the party who promises to buy the said immovable property to become a rightful owner of the same. Since it's an immovable property, transfer of possession requires certain formalities, followed by registration of sale deed which finalises the sale of property. In between, there are chances that one of them backs out, which leads to filing of a civil suit. The information hereunder addresses the various facets related to limitation period and agreement of sale in India.

What is the limitation period for filing a civil suit?

Ordinarily, the limitation period for filing a suit in a Civil Court is 3 years from the date when cause of action arose. However, it may vary in specific civil suits. For example, the limitation period for a suit for recovery of property is 12 years. Limitation for easement rights is 20 years/30 years in case of private and government properties respectively. Thus, it depends upon the nature of civil suit to determine the limitation period.

What is the limitation period of agreement to sale?

Once an agreement for sale is signed between the seller and the buyer, the limitation period for performing the agreement to sell is 3 years. While the stated period is 3 years, it is upon the buyer that when they come to notice the other party's reluctance or refusal to perform their part in furtherance of agreement to sell, and proceed with filing a civil suit for specific performance.

While the primary question revolved around limitation for filing civil suit for agreement to sell, the Supreme Court in the case of Raman v. R. Natarajan (2022) held that "a Court cannot grant the relief of specific performance against a person compelling him to enter into an agreement with a third party and seek specific relief against such a third party."

Limitation for Specific Performance of Agreement to Sell

Section 54 of the Limitation Act, 1963 clearly states that the limitation period for filing a civil suit for specific performance of a contract is 3 years. The general rule is that the agreement to sale itself specifies the timeline for execution and transfer of possession of the property. However, when the said document is silent regarding limitation for performance, the limitation period for specific performance of agreement to sell may start when the buyer comes to the notice of the seller's reluctance/refusal to hand over the possession. The Supreme Court in the case of A. Valliammai v. K.P. Murali and others (2023) clarified that as per Section 54 of Limitation Act, the limitation period either starts on the date set for execution of contract, or from the date when the buyer notices reluctance on part of the seller, not performing his part in the contract of sale.

While the limitation period is 3 years, it does not mean the buyer would stay at ease for 2 years and proceed with filing a civil suit for specific performance after a long delay. While clinching against the leverage of 3 years for specific performance of agreement to sell, the Supreme Court in case of Saradamani Kandappan vs. S. Rajalakshmi & Ors. (2011) in clear words stated that "every suit for specific performance need not be decreed merely because it is filed within the period of limitation by ignoring time limits stipulated in the agreement. The courts will also frown upon suits which are not filed immediately after the breach/refusal. The fact that the limitation is three years does not mean that a purchaser can wait for one or two years to file a suit and obtain specific performance." The said decision was followed by the Supreme Court in Rajesh Kumar v. Anand Kumar & Ors.

Limitation Period for Registered Sale Agreement

An agreement to sale which is duly registered cannot be denied in the usual course. However, Article 59 of the Limitation Act, 1963 provides for setting aside of cancellation of an instrument/decree/rescission of contract. Limitation period for cancellation of a registered sale agreement is 3 years from the date when the person came to know about facts which entitles them to a legal remedy.

The Supreme Court in this regard decided the case of Prem Singh & Ors v. Birbal & Ors (2006) and held that "Once, however, a suit is filed by a plaintiff for cancellation of a transaction, it would be governed by Article 59. Even if Article 59 is not attracted, the residuary Article would be. Article 59 would be attracted when coercion, undue influence, misappropriation or fraud which the plaintiff asserts is required to be proved. Article 59 would apply to the case of such instruments. It would, therefore, apply where a document is prima facie valid. It would not apply only to instruments which are presumptively invalid."

Written By: Advocate Kishan Dutt Kalaskar