Clarifying the position in respect of computing the period of limitation in a suit for specific performance, the Hon’ble Supreme Court in the case of Usha Devi & Ors. v. Ram Kumar Singh & Ors., observed that the period of validity of an agreement does not change the date of performance, which performance is to be necessarily determined from the Agreement in order to compute the period of limitation. Reliance was placed on Article 54 of the Schedule provided in the Limitation Act, 1963 which provides that the period shall run from the date fixed for performance.

It was observed that the clause in the agreement that allows it to remain valid for five years from the date of execution to sell is immaterial for present consideration. The performance was to be done within one month. Therefore, performance is to be computed from expiration of said one month. There is an inherent distinction between validity of an agreement and the date of performance.

The court set aside the findings of the High Court and Appellate Court and observed: “The performance was to take place within one month. The validity of the agreement is something different and does not change the date of performance. What was the reason for incorporating this clause of validating the agreement for five years is not spelled out in the agreement, but in any case, it does not change the date fixed for the performance.”

The factual background was that the sale deed was to be executed within one month from the date of the agreement. However, the appellant failed to execute the same and the respondent filed a suit for specific performance after the exhaustion of the three years limitation period.

The respondent pressed upon the running of limitation period from the date of expiry of the agreement’s validity. The court rejected this contention and held validity cannot change the date of performance.